##### Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K



|☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2016

OR



|☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period
from                to

Commission File No. 000-54899

TCG BDC, INC.

(Exact name
of Registrant as specified in its charter)



|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Maryland                                                       |  | 80-0789789                             
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)

520 Madison Avenue, 40th Floor, New York, NY 10022

(Address of principal executive office) (Zip Code)

(212) 813-4900

(Registrants telephone number, including area code)





Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered
pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per share

(Title of Class)





Indicate by
check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes  ☐    No  ☒

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days:    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).    Yes  ☐    No  ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  | ☐                                                |  | Accelerated filer         |  | ☐
|                        |  |                                                  | 
|Non-accelerated filer   |  | ☒  (Do not check if a smaller reporting company) |  | Smaller reporting company |  | ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of December 31, 2016, there was no established public market for the registrants common stock.

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|                              |  |                              
|----------------------------- |  | -----------------------------
|Class                         |  | Outstanding at March 21, 2017
|Common stock, $0.01 par value |  | 41,708,155                   

Documents Incorporated by Reference:Portions of the registrants Proxy Statement for its 2017
Annual Meeting of Stockholders to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference into Part III of this Form 10-K.



---

##### Table of Contents

TCG BDC, INC.

INDEX



|         |  |                                                                                                              |  |  |     | 
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  |  | --- | 
|         |  |                                                                                                             
|Part I   |  |                                                                                                              |  |  |     | 
|         |  |                                                                                                             
|Item1.   |  | Business                                                                                                     |  |  | 3   | 
|         |  |                                                                                                             
|Item1A.  |  | Risk Factors                                                                                                 |  |  | 22  | 
|         |  |                                                                                                             
|Item1B.  |  | Unresolved Staff Comments                                                                                    |  |  | 53  | 
|         |  |                                                                                                             
|Item 2.  |  | Properties                                                                                                   |  |  | 53  | 
|         |  |                                                                                                             
|Item 3.  |  | Legal Proceedings                                                                                            |  |  | 54  | 
|         |  |                                                                                                             
|Item 4.  |  | Mine Safety Disclosures                                                                                      |  |  | 54  | 
|         |  |                                                                                                             
|Part II  |  |                                                                                                              |  |  |     | 
|         |  |                                                                                                             
|Item 5.  |  | Marketfor Registrants Common Equity, Related Stockholder Matters and Issuer
 Purchases of Equity Securities |  |  | 55  | 
|         |  |                                                                                                             
|Item 6.  |  | Selected Financial Data                                                                                      |  |  | 56  | 
|         |  |                                                                                                             
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  |  | 58  | 
|         |  |                                                                                                             
|Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  |  | 84  | 
|         |  |                                                                                                             
|Item 8.  |  | Financial Statements and Supplementary Data                                                                  |  |  | 86  | 
|         |  |                                                                                                             
|Item 9.  |  | Changes and Disagreements with Accountants on Accounting and Financial Disclosure                            |  |  | 143 | 
|         |  |                                                                                                             
|Item 9A. |  | Controls and Procedures                                                                                      |  |  | 143 | 
|         |  |                                                                                                             
|Item 9B. |  | Other Information                                                                                            |  |  | 144 | 
|         |  |                                                                                                             
|Part III |  |                                                                                                              |  |  |     | 
|         |  |                                                                                                             
|Item 10. |  | Directors, Executive Officers and Corporate Governance                                                       |  |  | 145 | 
|         |  |                                                                                                             
|Item 11. |  | Executive Compensation                                                                                       |  |  | 146 | 
|         |  |                                                                                                             
|Item 12. |  | SecurityOwnership of Certain Beneficial Owners and Management and Related Stockholder
 Matters               |  |  | 146 | 
|         |  |                                                                                                             
|Item 13. |  | Certain Relationships and Related Transactions, and Director Independence                                    |  |  | 146 | 
|         |  |                                                                                                             
|Item 14. |  | Principal Accountant Fees and Services                                                                       |  |  | 146 | 
|         |  |                                                                                                             
|Part IV  |  |                                                                                                              |  |  |     | 
|         |  |                                                                                                             
|Item 15. |  | Exhibits and Financial Statement Schedules                                                                   |  |  | 147 | 



---

##### Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Form 10-K, and from time to time our management
may make, forward-looking statements. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of TCG BDC, Inc. (together with its consolidated
subsidiaries, we, us, our, TCG BDC or the Company). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments,
our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-K and the documents incorporated by reference herein involve a number of risks and uncertainties,
including statements concerning:



| |  |  | our, or our portfolio companies, future business, operations, operating results or prospects;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | the return or impact of current and future investments;
| | - |  | -------------------------------------------------------



| |  |  | the impact of any protracted decline in the liquidity of credit markets on our business;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | the impact of fluctuations in interest rates on our business;
| | - |  | -------------------------------------------------------------



| |  |  | currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our future operating results;
| | - |  | -----------------------------



| |  |  | the impact of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | our ability to recover unrealized losses;
| | - |  | -----------------------------------------



| |  |  | market conditions and our ability to access alternative debt markets and additional debt and equity capital;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | our contractual arrangements and relationships with third parties;
| | - |  | ------------------------------------------------------------------



| |  |  | the general economy and its impact on the industries in which we invest;
| | - |  | ------------------------------------------------------------------------



| |  |  | the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | competition with other entities and our affiliates for investment opportunities;
| | - |  | --------------------------------------------------------------------------------



| |  |  | the speculative and illiquid nature of our investments;
| | - |  | -------------------------------------------------------



| |  |  | the use of borrowed money to finance a portion of our investments;
| | - |  | ------------------------------------------------------------------



| |  |  | our expected financings and investments;
| | - |  | ----------------------------------------



| |  |  | the adequacy of our cash resources and working capital;
| | - |  | -------------------------------------------------------



| |  |  | the loss of key personnel;
| | - |  | --------------------------



| |  |  | the costs associated with being a public entity;
| | - |  | ------------------------------------------------



| |  |  | the timing, form and amount of any dividend distributions;
| | - |  | ----------------------------------------------------------



| |  |  | the timing of cash flows, if any, from the operations of our portfolio companies;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



1



---

##### Table of Contents

| |  |  | the ability of The Carlyle Group Employee Co., L.L.C. and CELF Advisors LLP to attract and retain highly talented professionals that can provide services to our investment adviser and administrator;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to maintain our status as a business development company; and
| | - |  | -------------------------------------------------------------------------



| |  |  | our intent to satisfy the requirements of a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

We use words such as anticipates, believes, expects, intends, will,
should, may, plans, continue, believes, seeks, estimates, would, could, targets, projects, outlook,
potential, predicts and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ
materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in Risk Factors in Part I, Item 1A of and elsewhere in this Form 10-K.

We have based the forward-looking statements included in this Form 10-K on information available
to us on the date of this Form 10-K, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements,
whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and
Exchange Commission (the SEC), including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.



2



---

##### Table of Contents

PART I

In this annual report, except where the context suggests otherwise:



| |  |  | the terms we, us, our, Company and TCG BDC refer to TCG BDC, Inc., a Maryland corporation and its consolidated subsidiaries;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the term SPV refers to TCG BDC SPV LLC, our wholly owned and consolidated subsidiary;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | the term 2015-1 Issuer refers to Carlyle GMS Finance MM CLO 2015-1 LLC, our wholly owned and consolidated subsidiary;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | the term Carlyle refers to The Carlyle Group L.P. (NASDAQ: CG) and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds);
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the term CPC refers to the Carlyle Private Credit platform, which is Carlyles direct lending business unit that operates within the broader Carlyle Global Credit platform. Carlyle Global Credit
operates within Carlyles Global Market Strategies (GMS) segment;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the terms CGMSFA and Administrator refer to Carlyle GMS Finance Administration L.L.C., our administrator, a wholly owned and consolidated subsidiary of Carlyle;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the terms CGMSIM and Investment Adviser refer to Carlyle GMS Investment Management L.L.C., our investment adviser, a wholly owned and consolidated subsidiary of Carlyle;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the term Credit Fund refers to Middle Market Credit Fund, LLC, an unconsolidated limited liability company, in which we own a 50% economic interest and co-manage with
Credit Partners USA LLC, and its wholly owned and consolidated subsidiary; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | references to this Form 10-K are to our Annual Report on Form 10-K for the year ended December 31, 2016.
| | - |  | ----------------------------------------------------------------------------------------------------------

Item 1. Business

We are an externally managed specialty finance company focused on lending to middle market companies. We are managed by our Investment Adviser,
a wholly owned subsidiary of The Carlyle Group L.P. We have elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated
thereunder, the Investment Company Act). In addition, we have elected to be treated, and intend to continue to comply with the requirements to qualify annually, as a regulated investment company (RIC) under the Internal
Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the Code). Since we commenced investment operations in May 2013 through December 31, 2016, we have invested more than
$2.2 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments.

Our
investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which we define as companies with approximately $10 million to $100 million of earnings before
interest, taxes, depreciation and amortization (EBITDA), which we believe is a useful proxy for cash flow. We seek to achieve our investment objective primarily through direct originations of secured debt, including first lien senior
secured loans (which may include stand-alone first lien loans, first lien/last out loans and unitranche loans) and second lien senior secured loans (collectively, Middle Market Senior Loans), with the balance of our assets
invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities).

We generate
revenues primarily in the form of interest income from the investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan
origination and other fees.



3



---

##### Table of Contents

In conducting our investment activities, we believe that we benefit from the significant scale
and resources of Carlyle, including our Investment Adviser and its affiliates. We have operated our business as a BDC since we began our investment activities in May 2013.

Effective on March 15, 2017, we changed our name from Carlyle GMS Finance, Inc. to TCG BDC, Inc.

Formation Transactions

We were formed in
February 2012 as a Maryland corporation structured as an externally managed, non-diversified closed-end investment company. On May 2, 2013, we elected to be
regulated as a BDC under the Investment Company Act and commenced substantial investment operations upon the completion of our initial closing of equity capital commitments. In addition, for U.S. federal income tax purposes, we have elected to be
treated as a RIC under the Code commencing with our taxable year ended December 31, 2013. If we have not consummated an initial public offering of our common stock that results in an unaffiliated public float of at least 15% of the aggregate
capital commitments received prior to the date of such initial public offering (a Qualified IPO) by May 2, 2018, then our Board of Directors (subject to any necessary stockholder approvals and applicable requirements of the
Investment Company Act) will use its best efforts to wind us down and/or liquidate and dissolve us.

Our Investment Adviser

Our investment activities are managed by our Investment Adviser. The principal executive offices of our Investment Adviser are located at 520
Madison Avenue, 40th Floor, New York, NY 10022, with additional offices in Chicago and Los Angeles. Our Investment Adviser is responsible for sourcing potential investments, conducting research and due diligence on prospective investments and equity
sponsors, analyzing investment opportunities, structuring our investments and monitoring our investments on an ongoing basis.

Our
Investment Adviser is served by an origination, capital markets, underwriting and portfolio management team comprised of experienced investment professionals in CPC, which is Carlyles direct lending business unit that operates within the
broader Carlyle Global Credit platform. Our investment approach is focused on long-term credit performance and principal preservation. Our Investment Advisers investment team utilizes a rigorous, systematic, and consistent investment process,
refined over Carlyles 29-year history investing in private markets across multiple cycles, designed to achieve enhanced risk-adjusted returns.

Our Investment Advisers seven person investment committee is responsible for reviewing and approving our investment opportunities. The
members of the investment committee have experience investing through different credit cycles. The investment committee is led by Michael A. Hart, Managing Director of Carlyle, Head of CPC, and our Chief Executive Officer and also includes Jeffrey
S. Levin, Managing Director of Carlyle and our President.

Pursuant to a personnel agreement between our Investment Adviser and The
Carlyle Group Employee Co., L.L.C. (Carlyle Employee Co.), an affiliate of our Investment Adviser, Carlyle Employee Co. provides our Investment Adviser with access to investment professionals that comprise our Investment Advisers
investment team. As of March 21, 2017, our Investment Advisers investment team includes a team of 27 dedicated investment professionals. The seven members of our Investment Advisers investment committee have an average of 21 years
of industry experience. In addition, our Investment Adviser and its investment team are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co. and CELF Advisors LLP (CELF),
both wholly owned subsidiaries of Carlyle.

Our Investment Adviser, its investment professionals, our executive officers and directors,
and other current and future principals of our Investment Adviser serve or may serve as investment advisers, officers, directors or principals of entities or investment funds that operate in the same or a related line of business as we do and/or



4



---

##### Table of Contents

investment funds, accounts and other similar arrangements advised by Carlyle. An affiliated investment fund, account or other similar arrangement currently formed or formed in the future and
managed by our Investment Adviser or its affiliates may have overlapping investment objectives and strategies with our own and, accordingly, may invest in asset classes similar to those targeted by us. As a result, our Investment Adviser and/or its
affiliates may face conflicts of interest arising out of the investment advisory activities of our Investment Adviser and other operations of Carlyle. See Allocation of Investment Opportunities and Potential Conflicts of Interest
and Part I, Item 1A of this Form 10-K Risk FactorsRisks Related to Our Business and StructureThere are significant potential conflicts of interest, including the management of other
investment funds and accounts by our Investment Adviser, which could impact our investment returns in Part I, Item 1A of this Form 10-K for more information.

Carlyle

Our Investment Adviser is an
affiliate of Carlyle. Carlyle is one of the worlds largest and most diversified multi-product global alternative asset management firms. Carlyle and its affiliates advise an array of specialized investment funds and other investment vehicles
that invest across a range of industries, geographies, asset classes and investment strategies. Since its founding in Washington, D.C. in 1987, Carlyle has grown to become a leading global alternative asset manager with nearly $158 billion
in assets under management (AUM) across 281 investment vehicles as of December 31, 2016.

Carlyle Global Credit
is one of the largest integrated credit platforms in the industry with approximately $29 billion in AUM and nearly 150 employees with multiple offices, including New York, Chicago and Los Angeles, as of December 31, 2016. Carlyle
Global Credits investment strategies include loans and structured credit, distressed credit, private credit (through CPC) and energy credit. CPC advises five funds, including us, totaling, in the aggregate, approximately $2.0 billion in
AUM as of December 31, 2016.

Primary areas of focus for Carlyles Global Credit teams include:



| |  |  | Loans and Structured Credit.The structured credit funds invest primarily in performing senior secured bank loans through structured vehicles and other investment vehicles. As of December 31, 2016,
Carlyles loan and structured credit team advised 44 structured credit funds and two carry funds in the United States, Europe, and Asia totaling, in the aggregate, approximately $19.2 billion in AUM.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Distressed Credit.The distressed credit funds generally invest in liquid and illiquid securities and obligations, including secured debt, senior and subordinated unsecured debt, convertible debt obligations,
preferred stock and public and private equity of financially distressed companies in defensive and asset-rich industries. In certain investments, these funds may seek to restructure pre-reorganization debt
claims into controlling positions in the equity of reorganized companies. As of December 31, 2016, Carlyles distressed credit team advised three funds totaling, in the aggregate, approximately $3.4 billion in AUM.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Private Credit.The private credit business comprises Carlyles BDCs (including us), which invest primarily in middle market first-lien loans (which include unitranche, first out and last
out loans) and second-lien loans, a CLO consisting of middle market senior, first lien loans, and corporate mezzanine funds, which invest in the first-lien, second-lien and mezzanine loans of middle-market companies, typically defined as
companies with annual EBITDA ranging from $10 million to $100 million that lack access to the broadly syndicated loan and bond markets. As of December 31, 2016, Carlyles private credit investment team advised five funds
totaling, in the aggregate, approximately $2.0 billion in AUM.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Energy Credit.Carlyles energy credit team invests primarily in privately-negotiated mezzanine debt investments in North American energy and power projects and companies. As of December 31, 2016,
Carlyles energy credit team advised two funds with approximately $4.7 billion in AUM.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5



---

##### Table of Contents

Strategic Relationships

We have established two highly differentiated strategic relationships that expand our product offering and increase our scale, enhancing our
investment opportunities and optimizing selectivity rates, as we determine which credits provide the best risk adjusted returns for our stockholders. In early 2015, our Investment Adviser developed a key strategic relationship with Madison
CapitalFunding LLC (Madison Capital), a prominent non-bank finance company that is a subsidiary of New York Life Insurance Company, which has allowed us to offer various lending solutions
to potential borrowers and has increased our coverage of U.S. middle market private equity firms. Additionally, in early 2016, we agreed to co-invest with Credit Partners, a wholly owned subsidiary of a large
Canadian pension fund, to form Credit Fund, a joint venture primarily focused on investing in first lien loans to middle market companies. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time
to time, capital of up to $400 million each.

About Our Administrator

CGMSFA, a Delaware limited liability company, serves as our Administrator. Pursuant to an administration agreement between us and the
Administrator (the Administration Agreement), our Administrator provides services to us and we reimburse our Administrator for its costs and expenses and our allocable portion of overhead incurred by our Administrator in performing its
obligations under the Administration Agreement, including our allocable portion of the compensation of certain of our officers and staff. In addition, our Administrator has entered into sub-administration
agreements with Carlyle Employee Co. and CELF (the Carlyle Sub-Administration Agreements), which provide our Administrator with access to personnel. Our Administrator has also entered into a sub-administration agreement with State Street Bank and Trust Company (State Street and such agreement, the State Street Sub-Administration Agreement
and, together with the Carlyle Sub-Administration Agreements, the Sub-Administration Agreements), pursuant to which State Street provides for certain
administrative and professional services. State Street also serves as our custodian, transfer agent, distribution paying agent and registrar.

Competitive Strengths

Market Leading
Direct Origination Platform. We have access to CPCs expansive origination platform, including 27 dedicated investment professionals, that covers over 200 private equity firms and over 150 lending institutions. We take a regional approach
to client coverage with offices in New York City, Chicago and Los Angeles. The origination team is highly experienced, and maintains deep relationships with a broad network of financial sponsors, commercial and investment banks, and finance
companies, which are expected to continue to generate a significant amount of investment opportunities.

Scaled Investment Platform and
Capabilities. Our Investment Adviser is a key part of, and has access to, CPCs established, scaled investment platform. CPCs broad capabilities and ability to offer a full financing solution to middle market companies give us access
to a wide funnel of opportunities, allow us to select high quality credits, construct the optimal financing package as it relates to price and terms, assert greater control over documentation, and generate attractive risk-adjusted returns for our
stockholders. As a result of our scale, strategic relationships and ability to co-invest, we can offer large hold sizes, and are able to provide certainty with regards to spreads, fees, structure and
covenants. Furthermore, the breadth of CPCs debt offerings also allows us to deploy capital at a measured pace across credit cycles and construct a portfolio that will perform in a broad range of economic conditions. We believe our
differentiated platform has allowed us to become a preferred lending partner to middle market financial sponsors that place a premium on reliability and certainty of financing.

One Carlyle Capabilities Leading to Superior Credit Performance. We benefit from our Investment Advisers utilization of the
broader resources of Carlyle, which includes access to Carlyles relationships and institutional knowledge from almost three decades of private market investing. Our underwriting process



6



---

##### Table of Contents

leverages Carlyles 700 investment professionals across multiple alternative investment asset classes, 29 operating executive consultants, information obtained through direct ownership of
over 275 companies and lending relationships with over 500 companies, 11 credit industry research analysts, and in-house government affairs and economic research teams. Our systematic and consistent approach
is augmented by industry expertise and tenured underwriting professionals who both lead our Investment Advisers investment team and serve on our Investment Advisers investment committee. Strong credit underwriting has been a key
component of our investing process, where our Investment Adviser seeks to select borrowers whose businesses are expected to retain significant value.

Experienced Investment Team.Our Investment Advisers investment team comprises investment professionals in CPC who have
extensive middle market lending experience. The investment team consists of 27 dedicated investment professionals. The seven members of our Investment Advisers investment committee have an average of 21 years of industry experience. We believe
the breadth and depth of the investment team in sourcing, structuring, executing, and monitoring a broad range of private investments provides us with a significant competitive advantage in building a high quality portfolio of investments.

Carefully Constructed Portfolio of Diversified Senior Secured, Floating Rate Loans.Our portfolio has been defensively constructed,
exhibits strong credit quality, generates stable risk-adjusted returns and allows us to generate meaningful investment income, and consequently dividend income, for our stockholders. We have invested approximately $2.0 billion since our inception in
directly originated middle market loans. Our portfolio is highly diversified by borrower, industry sector, sponsor relationships and other metrics. As of December 31, 2016, we had a portfolio of 98 investments in 86 portfolio companies across
29 industries and 57 unique sponsors. As of December 31, 2016, approximately 99% of our debt investments bore interest at floating rates, subject to interest rate floors, and 80.1% of our portfolio was invested in first-lien debt investments
(including 12.9% first lien last out loans).

Strategic Relationships.Our strategic relationships enhance our ability to provide
full financing solutions to our borrowers, which results in our being able to generate optimal economics, significant access to diligence and control over documentation terms. Additionally, these relationships further strengthen our origination
platform and ability to develop creative financing solutions to invest through the capital structure based on where we believe the best risk-adjusted return opportunities reside. Our Investment Advisers strategic relationship with Madison
Capital, a leading middle market senior lender with approximately $8.2 billion of AUM as of December 31, 2016, allows us to offer a full unitranche financing solution. This product provides middle market companies with certainty for
financing without syndication risk and generates attractive risk-adjusted returns on these investments for our stockholders. Madison Capital provides the first lien/first out portion of the unitranche loan, which allows us to provide the first
lien/last out portion. Collectively, we and Madison Capital have provided over $800 million (before any repayments or exits) of unitranche loans to middle market companies. The relationship has been extremely successful, and we frequently
invest alongside Madison Capital on a variety of investment opportunities (in addition to unitranche loans).

Separately, Credit
Fund, our strategic joint venture with a large Canadian pension fund, primarily invests in first lien loans of middle-market companies. Since its inception and through December 31, 2016, Credit Fund has provided $453 million (before any
repayments or exits) of senior secured loans. This joint venture provides us with an enhanced first lien loan product for certain transactions, thus further increasing our deal flow, and results in an increased number of borrowers in our portfolio,
which provides strategic benefits as we build incumbent positions for future growth and investment opportunity.

The following highlights
illustrate our accomplishments since the commencement of our operations:



| |  |  | Equity Capital Commitments and InvestmentsAs of March 21, 2017, we had a total of
$1.3 billion in total equity capital commitments. Of that total, and inclusive of the use of leverage and recycled proceeds from sales and paydowns, we have deployed $1.6 billion in 114 funded first lien
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7



---

##### Table of Contents

| | debt investments, $272.2 million in 30 funded second lien debt investments, $126.6 million in 27 structured finance obligations, $5.1 million in six equity investments and
$119.8 million in one investment fund through December 31, 2016.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Facilities and the 2015-1 NotesOn May 24, 2013, our wholly owned subsidiary, the SPV, entered into a senior secured revolving credit facility (as amended, the
SPV Credit Facility) with a maximum principal amount of $400 million. In addition, on March 21, 2014, we entered into a senior secured revolving credit facility (as amended, the Credit Facility and, together with
the SPV Credit Facility, the Facilities) with a maximum principal amount of $220 million. Further, on June 26, 2015, we completed a $400 million term debt securitization (the
2015-1 Debt Securitization). The notes offered in the 2015-1 Debt Securitization (the 2015-1 Notes) were
issued by the 2015-1 Issuer, our wholly owned and consolidated subsidiary.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Credit Platform EnhancementsOur Investment Advisers investment team has continued to expand and enhance all facets of the credit platform supporting us. Additional senior origination professionals
were added during 2016 which meaningfully expanded the direct sourcing capabilities, bringing the total number of senior origination professionals to eight as of December 31, 2016. The scale of the direct origination platform allows us to
maximize the investment opportunity set and increase overall investment selectivity. Direct origination has several important benefits including optimizing transaction economics, improving the strength of the loan documentation, and providing
greater access to due diligence materials. Additional senior resources were added to the capital markets group, further enhancing investment sourcing and syndication capabilities with other lenders, including banks, finance companies, credit funds,
and other business development companies. Additional professionals were added to the underwriting and portfolio management team to support the overall increase in investment activity and portfolio growth. This team works closely with the origination
and capital markets professionals, as well as the CPC industry research analysts in executing all facets of transaction due diligence and portfolio management. Further enhancements and additions will be made as appropriate to ensure that our
Investment Advisers investment team continues to have best in class execution across each segment of the business.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Market
Opportunity

We believe the middle market lending environment provides attractive investment opportunities as a result of a combination
of the following factors:

Favorable Market Environment.We believe the middle market remains one of the most attractive investment
areas due to its large size, superior value relative to the broadly syndicated loan market, and supply-demand imbalance that continues to favor non-bank lenders. We believe market yields remain attractive and
leverage levels at middle market companies are stable, creating a favorable investment environment.

Large and Growing U.S. Middle
Market.The U.S. middle market is the largest market by many measures, which is expected to enable us to invest selectively as approximately 70% of middle market loan volume is sponsor-backed. According to S&P Capital IQ, as of
December 31, 2016, there are over 70,000 U.S. middle market companies generating between $20 million and $1 billion in annual revenue, compared with approximately 3,500 companies with revenue greater than $1 billion. We believe
these middle market companies, both sponsored and non-sponsored, represent a significant growth segment of the U.S. economy and often require substantial capital investments to grow.

Leverage, Pricing and Risk. According to the S&P Global Market Intelligence LCD Quarterly Leveraged Lending Review (Q4 2016),
middle market companies are less levered, have larger equity contributions, experience lower rates of default, and achieve higher recoveries versus large cap broadly syndicated loans. Middle market loans also tend to achieve more attractive pricing
and structures, including documentation, covenants and information/governance, than broadly syndicated loans. Over the 3 year period from 2014 to 2016,



8



---

##### Table of Contents

middle market loans have exhibited an approximate 200 basis points spread premium over broadly syndicated loans according to the S&P Global Market Intelligence LCD Leveraged Loan Index.

Market Environment Favors Non-Traditional Lenders. Traditional middle-market lenders, such as
commercial and regional banks and commercial finance companies, have contracted their origination and lending activities and are focusing on more liquid asset classes or have exited the business. At the same time, institutional investors have sought
to invest in larger, more liquid offerings, limiting the ability of middle-market companies to raise debt capital through public capital markets. This has resulted in other capital providers, such as specialty finance companies, structured-credit
vehicles such as CLOs (collateralized loan obligations), BDCs, and private investment funds, actively investing in the middle market. We believe the aforementioned changes and restrictions have created a large and growing market opportunity for
alternative lenders such as us.

Favorable Capital Markets Trends. Current and future demand for middle market financings, driven
by private equity investment and upcoming maturities are expected to provide us with ample deal flow. Current data from the Thompson Reuters LPC Middle Market Weekly Report (January 27, 2017) suggests that approximately $615 billion of upcoming
loan maturities for middle market companies are due between 2017 and 2022, and the PitchBook PE & VE Fundraising and Capital Overhang Report (1H 2016) suggests that there is over $657 billion of uninvested capital in 20112015
vintage private equity funds. We believe these refinancings and uninvested capital will provide a steady flow of attractive opportunities for well-positioned lenders with deep and longstanding sponsor and market relationships, particularly for
providers of full capital structure financing solutions.

Allocation of Investment Opportunities and Potential Conflicts of Interest

An affiliated investment fund, account or other similar arrangement currently formed or formed in the future and managed by our Investment
Adviser or its affiliates may have overlapping investment objectives and strategies with our own and, accordingly, may invest in asset classes similar to those targeted by us. This creates potential conflicts in allocating investment opportunities
among the Company and such other investment funds, accounts and similar arrangements, particularly in circumstances where the availability or liquidity of such investment opportunities is limited or where
co-investments by the Company and other funds, accounts or arrangements are not permitted under applicable law, as discussed below.

For example, Carlyle sponsors several investment funds, accounts and other similar arrangements with strategies overlapping with our strategy,
including, without limitation, structured credit funds as well as future closed-end registered investment companies, BDCs, carry funds, managed accounts and structured credit funds. The terms of certain of
these investment funds, accounts or other similar arrangements require Carlyle to allocate investment opportunities to them in priority to allocations to other vehicles, such as us. In addition, in some cases the Investment Adviser may make
investment recommendations to investment funds, accounts and similar arrangements where the investment funds, accounts and similar arrangements make the investment independently of the Investment Adviser. As a result, there are circumstances where
investments appropriate for us are instead allocated, in whole or in part, to such other investment funds, accounts or other similar arrangements irrespective of the Investment Advisers policies regarding allocation of investments. Where
Carlyle otherwise has discretion to allocate investment opportunities among various funds, accounts and other similar arrangements, it should be noted that Carlyle may determine to allocate such investment opportunities away from us. While our
Investment Adviser maintains an allocation policy, such policy may result in certain investment opportunities that are attractive to us being allocated to other funds managed by affiliates of Carlyle.

Our Investment Advisers investment team forms the exclusive Carlyle platform for U.S. middle market debt investments. If Carlyle is
presented with investment opportunities that generally fall within our investment objective and that of other Carlyle funds, accounts or other similar arrangements, whether focused on a debt strategy or otherwise, Carlyle allocates such
opportunities among us and such other Carlyle funds, accounts or other similar arrangements in a manner consistent with our Investment Advisers allocation policies and



9



---

##### Table of Contents

procedures. Our Investment Advisers allocation policies and procedures are designed to allocate investment opportunities fairly and equitably among its clients over time, taking into
account the sourcing of the transaction, the nature of the investment focus of each such other Carlyle fund, accounts or other similar arrangements, the relative amounts of capital available for investment, the nature and extent of involvement in
the transaction on the part of the respective teams of investment professionals, any requirements contained in the governing agreements of the Carlyle funds, accounts or other similar arrangements and other considerations deemed relevant by Carlyle
in good faith, including suitability considerations and reputational matters. The application of these considerations may cause differences in the performance of different Carlyle funds, accounts and similar arrangements that have similar
strategies.

Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed
by Carlyle.

We are also not permitted to make any co-investments with our Investment Adviser or
its affiliates (including any fund managed by Carlyle) without exemptive relief from the SEC, subject to certain exceptions, including with respect to our downstream affiliates. The SEC has granted us exemptive relief that permits us and certain of
our affiliates to co-invest in suitable negotiated investments (the Exemptive Relief). Co-investments made under the Exemptive Relief are subject to
compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also
co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and our Investment Advisers
allocation policies and procedures.

While Carlyle and our Investment Adviser seek to implement their respective allocation processes in a
fair and equitable manner under the particular circumstances, there can be no assurance that it will result in equivalent allocation of or participation in investment opportunities or equivalent performance of investments allocated to us as compared
to the other entities. In some cases, due to information barriers that are in place, the Company and other Carlyle investment funds, accounts or other similar arrangements may compete with each other for specific investment opportunities without
being aware that they are competing with each other. Carlyle has a conflict system in place above these information barriers to identify potential conflicts early in the process and determine if an allocation decision needs to be made. If the
conflicts system detects a potential conflict, the legal and compliance departments of Carlyle assess investment opportunities to determine whether a particular investment opportunity is required to be allocated to a particular investment fund,
account or other similar arrangement (including the Company) or is prohibited from being allocated to a particular investment fund, account or similar arrangement. Subject to a determination by the legal and compliance departments (if applicable),
portfolio management teams are then charged with ensuring that investment opportunities are allocated to the appropriate investment fund, account or similar arrangement.

During periods of unusual market conditions, our Investment Adviser may deviate from its normal trade allocation practices. For example, this
may occur with respect to the management of unlevered and/or long-only investment funds, accounts or similar arrangements that are typically managed on a side-by-side
basis with levered and/or long-short investment funds, accounts or similar arrangements.

Investment Strategy

Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market
companies. We seek to achieve our investment objective by investing primarily in Middle Market Senior Loans of private U.S. middle market companies with the balance of our assets invested in higher yielding investments (which may include unsecured
debt, mezzanine debt and investments in equities).



10



---

##### Table of Contents

We target U.S. middle market companies, generally controlled by private equity investment firms
that require capital for growth, acquisitions, recapitalizations, refinancings and leveraged buyouts. We may also make opportunistic loans to independently owned and publicly held middle market companies. We seek to partner with strong management
teams executing long-term growth strategies. Target businesses typically exhibit some or all of the following characteristics:



| |  |  | EBITDA of $10$100 million;
| | - |  | ---------------------------



| |  |  | Minimum of 35% original sponsor cash equity;
| | - |  | --------------------------------------------



| |  |  | Sustainable leading positions in their respective markets;
| | - |  | ----------------------------------------------------------



| |  |  | Scalable revenues and operating cash flow;
| | - |  | ------------------------------------------



| |  |  | Experienced management teams with successful track records;
| | - |  | -----------------------------------------------------------



| |  |  | Stable, predictable cash flows with low technology and market risks;
| | - |  | --------------------------------------------------------------------



| |  |  | Diversified product offering and customer base;
| | - |  | -----------------------------------------------



| |  |  | Low capital expenditures requirements;
| | - |  | --------------------------------------



| |  |  | A North American base of operations;
| | - |  | ------------------------------------



| |  |  | Strong customer relationships;
| | - |  | ------------------------------



| |  |  | Products, services or distribution channels having distinctive competitive advantages; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | Defensible niche strategy or other barriers to entry.
| | - |  | -----------------------------------------------------

While we believe that the criteria
listed above are important in identifying and investing in prospective portfolio companies, not all of these criteria will be necessarily met by each prospective portfolio company. In addition, we may change our investment objective and/or
investment criteria over time without notice to or consent from our investors.

Investment Approach and Risk Monitoring of Investments

Our Investment Adviser utilizes a rigorous, systematic and consistent due diligence underwriting process to evaluate all investment
opportunities. Our Investment Advisers investment teams primarily consist of origination professionals, research analysts and underwriters. An investment team works on a particular transaction from initial screening through closing, and the
same team continues to monitor the credit for the life cycle of the investment.

We view our investment process as consisting of the
phases described below:

Origination. Our Investment Adviser has built a strong direct origination platform with coverage of over 200 private
equity firms and over 150 lending institutions. Our Investment Advisers origination team sources approximately 700 opportunities per year for us with an ultimate investment rate by us of less than 10% annually. The scale of our Investment
Advisers origination platform allows us to maximize access to investment opportunities and enhance overall investment selectivity. We further seek to reduce risk by partnering with experienced sponsors with strong track records. We believe
lending to companies owned by leading private equity firms (versus non-sponsored companies) has several important and potentially defensive characteristics. Sponsor involvement provides for:



| |  |  | maximization of investment opportunities as approximately 70% of middle market loan volume is sponsor backed as of December 31, 2016, according to the S&P Global Market Intelligence LCD Middle Market Fact
Sheet;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | validation of enterprise value;
| | - |  | -------------------------------



11



---

##### Table of Contents

| |  |  | support, as needed, in strategy, operations and governance of portfolio companies; and
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the potential for additional capital commitment by sponsor if company requires financial support.
| | - |  | -------------------------------------------------------------------------------------------------

The
origination team supplements these relationships through personal visits and marketing campaigns focused on maximizing investment deal flow. It is their responsibility to identify specific opportunities, refine opportunities through candid
exploration of the underlying facts and circumstances and to apply creative and flexible solutions to solve clients financing needs. The origination personnel are located in New York, Chicago and Los Angeles. Each originator maintains
long-standing relationships with potential sources of deal flow and is responsible for covering a specified target market. We believe those originators strength and breadth of relationships across a wide range of markets generate numerous
financing opportunities, which should enable our Investment Adviser to be highly selective in recommending investments.

Transaction
Screening. After the senior originator has completed an initial screen, the investment team will prepare and present a consistent screening template that includes business description, proposed transaction financing structures,
preliminary financial analysis, initial assessment of investment merits and key risks and market/industry considerations to a subset of our Investment Advisers investment committee. During this early stage, the investment team also assesses
initial adherence with environmental, social, and governance policies. Based on feedback from the committee, the deal team will prepare and disseminate an outcome email that documents the takeaways from the meeting, including preferred financing
structure as well as terms, key diligence items, and next steps.

Underwriting. The next step is full credit analysis and in-depth due diligence. During the investment process, the investment team works closely with the private equity sponsor in all aspects of due diligence, including onsite meetings, due diligence calls, and review of
third party diligence reports. Our Investment Adviser also conducts an independent evaluation of the business, utilizing both internal and external sources. A key differentiator is our Investment Advisers integrated credit platform and
collaborative efforts that leverage Carlyles broader resources, which include access to Carlyles relationships and institutional knowledge. This includes speaking to the private equity investment professionals (in accordance with
information barrier restrictions), Carlyle operating executives, Carlyles Chief Economist & Director of Research, Carlyles Government Affairs professionals, and any executive within Carlyles private equity portfolio. In
addition, we utilize multiple third party expert networks to supplement its work to gain further insight into company and industry factors from various thought leaders across the companys markets. From the multiple diligence sources noted
above, the deal team will prepare a highly detailed approval memo that includes, but is not limited to, the following:



| |  |  | Overview of the opportunity and investment team recommendation
| | - |  | --------------------------------------------------------------



| |  |  | Structure, terms and pricing of the proposed facilities
| | - |  | -------------------------------------------------------



| |  |  | Sources and uses
| | - |  | ----------------



| |  |  | Sponsor background, history
| | - |  | ---------------------------



| |  |  | Risks and mitigants
| | - |  | -------------------



| |  |  | Detailed analysis of historical financial statements, including analysis of EBITDA adjustments, where appropriate
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | Projections, including management/sponsor case and base case, with assumptions clearly described, including revenue and EBITDA bridge, where appropriate
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Downside case analysis
| | - |  | ----------------------



| |  |  | Fixed/variable cost analysis
| | - |  | ----------------------------



| |  |  | Business/product description
| | - |  | ----------------------------



| |  |  | Customers & suppliers
| | - |  | ---------------------



12



---

##### Table of Contents

| |  |  | Industry trends and analysis
| | - |  | ----------------------------



| |  |  | Competition
| | - |  | -----------



| |  |  | Management
| | - |  | ----------



| |  |  | Legal, environmental, regulatory issues (if applicable)
| | - |  | -------------------------------------------------------



| |  |  | Capital markets/syndication strategy (if applicable)
| | - |  | ----------------------------------------------------



| |  |  | Items as to which approval is conditional and which require further due diligence and/or subsequent resolution
| | - |  | --------------------------------------------------------------------------------------------------------------

Monitoring. We view proactive portfolio monitoring as a vital part of the investment process. Our Investment Adviser utilizes a proprietary
credit surveillance report and software system, an objective rules-based Internal Risk Rating system and proprietary valuation model to assess risk in the portfolio. In addition to monthly portfolio reviews, our Investment Adviser compiles a
quarterly risk report that examines, among other metrics, migration in portfolio and loan level investment mix, industry diversification, Internal Risk Ratings, revenue, EBITDA, and leverage. Our Investment Adviser supplements these policies with
additional analyses and projections, including stress scenarios, to assess the potential exposure of our portfolio to variable macroeconomic factors and market conditions. For more information on the Internal Risk Ratings of our portfolio, see Part
II, Item 7 of this Form 10-K Managements Discussion and Analysis of Financial Condition and Results of OperationsPortfolio and Investment Activity.

Portfolio Composition

As of
December 31, 2016 and 2015, the fair value of our investments was approximately $1,422.8 million and $1,052.7 million, respectively, in 86 and 85 portfolio companies/structured finance obligations/investment fund, respectively. The
type, geography and industry composition of our non-controlled/non-affiliated investments as a percentage of fair value as of December 31, 2016 and 2015 was each as
follows:



|                               |  |                    |        |   |      |  |        |  
|------------------------------ |  | ------------------ | ------ | - | ---- |  | ------ | -
|                               |  | As of December 31, |       
|Type% of Fair Value           |  | 2016               |        |   | 2015 | 
|First Lien Debt                |  |                    | 80.09  | % |      |  | 75.53  | %
|Second Lien Debt               |  |                    | 12.08  |   |      |  | 19.98  |  
|Structured Finance Obligations |  |                    | 0.37   |   |      |  | 4.26   |  
|Equity Investments             |  |                    | 0.46   |   |      |  | 0.23   |  
|Investment Fund                |  |                    | 7.00   |   |      |  |       |  
|                               |  |                    |        |   |      |  |        |  
|Total                          |  |                    | 100.00 | % |      |  | 100.00 | %
|                               |  |                    |        |   |      |  |        |  



|                                                   |  |                    |        |   |      |  |        |  
|-------------------------------------------------- |  | ------------------ | ------ | - | ---- |  | ------ | -
|                                                   |  | As of December 31, |       
|Type% of Fair Value of First and Second Lien Debt |  | 2016               |        |   | 2015 | 
|Floating Rate                                      |  |                    | 99.25  | % |      |  | 97.44  | %
|Fixed Rate                                         |  |                    | 0.75   |   |      |  | 2.56   |  
|                                                   |  |                    |        |   |      |  |        |  
|Total                                              |  |                    | 100.00 | % |      |  | 100.00 | %
|                                                   |  |                    |        |   |      |  |        |  



|                          |  |                    |        |   |      |  |        |  
|------------------------- |  | ------------------ | ------ | - | ---- |  | ------ | -
|                          |  | As of December 31, |       
|Geography% of Fair Value |  | 2016               |        |   | 2015 | 
|Cayman Islands            |  |                    | 0.37   | % |      |  | 4.26   | %
|Ireland                   |  |                    |       |   |      |  | 0.93   |  
|United Kingdom            |  |                    | 1.47   |   |      |  | 2.14   |  
|United States             |  |                    | 98.16  |   |      |  | 92.67  |  
|                          |  |                    |        |   |      |  |        |  
|Total                     |  |                    | 100.00 | % |      |  | 100.00 | %
|                          |  |                    |        |   |      |  |        |  



13



---

##### Table of Contents

|                                          |  |                    |        |   |      |  |        |  
|----------------------------------------- |  | ------------------ | ------ | - | ---- |  | ------ | -
|                                          |  | As of December 31, |       
|Industry% of Fair Value                  |  | 2016               |        |   | 2015 | 
|Aerospace & Defense                       |  |                    | 4.31   | % |      |  | 6.02   | %
|Automotive                                |  |                    | 2.70   |   |      |  | 5.02   |  
|Banking, Finance, Insurance & Real Estate |  |                    | 10.59  |   |      |  | 13.24  |  
|Beverage, Food & Tobacco                  |  |                    | 1.08   |   |      |  |       |  
|Business Services                         |  |                    | 9.97   |   |      |  | 12.38  |  
|Capital Equipment                         |  |                    | 2.62   |   |      |  | 1.71   |  
|Chemicals, Plastics & Rubber              |  |                    | 1.39   |   |      |  | 2.46   |  
|Construction & Building                   |  |                    | 1.67   |   |      |  | 1.90   |  
|Consumer Services                         |  |                    | 5.62   |   |      |  | 4.82   |  
|Containers, Packaging & Glass             |  |                    | 3.35   |   |      |  | 5.24   |  
|Durable Consumer Goods                    |  |                    | 1.40   |   |      |  | 1.94   |  
|Energy: Electricity                       |  |                    | 2.59   |   |      |  | 3.51   |  
|Energy: Oil & Gas                         |  |                    | 0.77   |   |      |  | 1.08   |  
|Environmental Industries                  |  |                    | 2.90   |   |      |  | 1.10   |  
|Forest Products & Paper                   |  |                    | 1.68   |   |      |  |       |  
|Healthcare & Pharmaceuticals              |  |                    | 11.36  |   |      |  | 6.09   |  
|High Tech Industries                      |  |                    | 3.26   |   |      |  | 4.73   |  
|Hotel, Gaming & Leisure                   |  |                    | 2.11   |   |      |  | 2.97   |  
|Investment Fund                           |  |                    | 7.00   |   |      |  |       |  
|Media: Advertising, Printing & Publishing |  |                    | 5.06   |   |      |  | 1.96   |  
|Metals & Mining                           |  |                    | 0.72   |   |      |  | 0.97   |  
|Non-durable Consumer Goods                |  |                    | 2.06   |   |      |  | 3.85   |  
|Retail                                    |  |                    | 0.58   |   |      |  | 2.29   |  
|Software                                  |  |                    | 0.79   |   |      |  | 1.33   |  
|Structured Finance                        |  |                    | 0.37   |   |      |  | 4.26   |  
|Telecommunications                        |  |                    | 7.76   |   |      |  | 6.72   |  
|Transportation: Cargo                     |  |                    | 2.41   |   |      |  | 1.82   |  
|Transportation: Consumer                  |  |                    | 1.96   |   |      |  | 0.89   |  
|Utilities: Electric                       |  |                    |       |   |      |  | 0.54   |  
|Wholesale                                 |  |                    | 1.92   |   |      |  | 1.16   |  
|                                          |  |                    |        |   |      |  |        |  
|Total                                     |  |                    | 100.00 | % |      |  | 100.00 | %
|                                          |  |                    |        |   |      |  |        |  

See the Consolidated Schedules of Investments as of December 31, 2016 and 2015 in our consolidated financial statements
in Part II, Item 8 of this Form 10-K for more information on these investments, including a list of companies and type, cost and fair value of investments.

Election to be Taxed as a RIC

We have
elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. As a RIC, we generally will not pay corporate-level U.S. federal income taxes on any net ordinary income or capital
gains that we timely distribute to our stockholders as dividends. Instead, dividends we distribute generally will be taxable to the holders of our common stock, and any net operating losses, foreign tax credits and other tax attributes may not pass
through to the holders of our common stock. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as
described below). In addition, we must distribute to our stockholders on an annual basis at least 90% of our investment company taxable income (generally, our net ordinary income plus the excess of our realized net short-term capital gains over
realized net long-term capital losses, determined without regard to the dividends paid deduction) for any taxable year (the Annual Distribution Requirement). The following discussion assumes that we qualify as a RIC and have satisfied
the Annual Distribution Requirement.



14



---

##### Table of Contents

If we:



| |  |  | qualify as a RIC; and
| | - |  | ---------------------



| |  |  | satisfy the Annual Distribution Requirement,
| | - |  | --------------------------------------------

then we are not subject to U.S. federal income tax on the
portion of our net taxable income we distribute (or are deemed to distribute) to stockholders. We are subject to U.S. federal income tax at regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our
stockholders.

In addition, if we fail to distribute in a timely manner an amount at least equal to the sum of (1) 98% of our
ordinary income for the calendar year, (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income
realized, but not distributed, in the preceding year (the Excise Tax Distribution Requirements), we are liable for a 4% excise tax on the portion of the undistributed amounts of such income that are less than the amounts required to be
distributed based on the Excise Tax Distribution Requirements. For this purpose, however, any ordinary income or capital gain net income retained by us that is subject to corporate income tax for the tax year ending in that calendar year is
considered to have been distributed by year end (or earlier if estimated taxes are paid). We currently intend to make sufficient distributions each taxable year to satisfy the Excise Tax Distribution Requirements.

In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:



| |  |  | continue to qualify as a BDC under the Investment Company Act at all times during each taxable year;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities or foreign currencies, net
income from certain qualified publicly traded partnerships, or other income derived with respect to our business of investing in such stock or securities or foreign currencies (the 90% Gross Income Test); and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | diversify our holdings so that at the end of each quarter of the taxable year:
| | - |  | ------------------------------------------------------------------------------



| |  |  | at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more
than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, or two or more issuers that are controlled, as determined
under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses, or of certain qualified publicly traded partnerships (the Diversification Tests).
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our
portfolio and/or (2) other requirements relating to our qualification as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Distribution Requirements, we
may make such dispositions at times that, from an investment standpoint, are not advantageous. If we are prohibited from making distributions or are unable to raise additional debt or equity capital or sell assets to make distributions, we may not
be able to make sufficient distributions to satisfy the Annual Distribution Requirement, and therefore would not be able to maintain our qualification as a RIC. Additionally, we may make investments that result in the recognition of ordinary income
rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us from making capital gain distributions as described below. We intend to monitor our transactions, make the appropriate tax
elections and make the appropriate entries in our books and records when we make any such investments in order to mitigate the effect of these rules.



15



---

##### Table of Contents

A RIC is limited in its ability to deduct expenses in excess of its investment company
taxable income (which is, generally, ordinary income plus net realized short-term capital gains in excess of net realized long-term capital losses). If our expenses in a given year exceed gross taxable income, we would have a net operating
loss for that year. However, a RIC is not permitted to carry forward net operating losses to subsequent years. In addition, expenses can be used only to offset investment company taxable income, not net capital gain. Due to these limits on the
deductibility of expenses, we may for U.S. federal income tax purposes have aggregate taxable income for several years that we distribute and that is taxable to our stockholders even if such income is greater than the aggregate net income we
actually earned during those years. Such distributions may be made from our cash assets or by liquidation of investments, if necessary. We may realize gains or losses from such liquidations. In the event we realize net capital gains from such
transactions, a holder may receive a larger capital gain distribution than the holder would have received in the absence of such transactions.

Our
Regulatory StructureRegulation as a Business Development Company

General

We have elected to be regulated as a BDC under the Investment Company Act and have elected to be treated as a RIC under the Code. A BDC must be
organized in the United States for the purpose of investing in or lending to primarily private companies and making significant managerial assistance available to them. A BDC may use capital provided by public stockholders and from other sources to
make long-term, private investments in businesses. A publicly-traded BDC provides stockholders the ability to retain the liquidity of a publicly traded stock while sharing in the possible benefits, if any, of investing in primarily privately owned
companies. Until a Qualified IPO, we do not intend to list our common stock on a stock exchange and it will not be publicly traded.

We
may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of a majority of the outstanding voting securities, as required by the Investment Company Act. A majority of the outstanding
voting securities of a company is defined under the Investment Company Act as the lesser of: (a) 67% or more of such companys voting securities present at a meeting if more than 50% of the outstanding voting securities of such company are
present or represented by proxy, or (b) more than 50% of the outstanding voting securities of such company. We do not anticipate any substantial change in the nature of our business.

As with other companies regulated by the Investment Company Act, a BDC must adhere to certain substantive regulatory requirements. A majority
of our directors must be persons who are not interested persons, as that term is defined in Section 2(a)(19) of the Investment Company Act (Independent Directors). We are required to provide and maintain a bond issued by a
reputable fidelity insurance company to protect the BDC. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such persons office.

The Investment Company Act contains
prohibitions and restrictions relating to certain transactions between BDCs and certain affiliates (including any investment advisers or sub-advisers), principal underwriters and certain affiliates of those
affiliates or underwriters. Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle. We are also not permitted to make any
co-investments with our Investment Adviser or its affiliates (including any fund managed by Carlyle) without exemptive relief from the SEC, subject to certain exceptions, including with respect to our
downstream affiliates. The SEC has granted us Exemptive Relief that permits us and certain present and future funds advised by our Investment Adviser (or a future investment adviser controlling, controlled by or under common control with our
Investment Adviser) to co-invest in suitable negotiated investments. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and
other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds
managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and our Investment Advisers allocation policies and procedures.



16



---

##### Table of Contents

As a BDC, we are generally required to meet an asset coverage ratio, defined under the Investment
Company Act as the ratio of our total assets (less all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities, of at least 200% after each issuance of senior securities.

We may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such
securities, we may, for the purpose of public resale, be deemed an underwriter as that term is defined in the Securities Act of 1933, as amended (the Securities Act). Our intention is to not write (sell) or buy put or call
options to manage risks associated with the publicly traded securities of our portfolio companies. We may enter into hedging transactions to manage the risks associated with interest rate and currency fluctuations. We may purchase or otherwise
receive warrants or options to purchase the common stock of our portfolio companies in connection with acquisition financings or other investments. In connection with such an acquisition, we may acquire rights to require the issuers of acquired
securities or their affiliates to repurchase them under certain circumstances.

We do not intend to acquire securities issued by any
investment company that exceed the limits imposed by the Investment Company Act. Under these limits, except for registered money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company, invest more than
5% of the value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of investment companies in the aggregate. The portion of our portfolio invested in securities
issued by investment companies ordinarily will subject our stockholders to additional indirect expenses. Our investment portfolio is also subject to diversification requirements by virtue of our intended status to be a RIC for U.S. tax purposes. See
Part I, Item 1A of this Form 10-K Risk FactorsRisks Related to Our Business and Structure for more information.

In addition, investment companies registered under the Investment Company Act and private funds that are excluded from the definition of
investment company pursuant to either Section 3(c)(1) or 3(c)(7) of the Investment Company Act may not acquire directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the
acquisition), unless the funds comply with an exemption under the Investment Company Act. As a result, certain of our investors may hold a smaller position in our shares than if they were not subject to these restrictions.

We are generally not able to issue and sell our common stock at a price below net asset value per share. See Part I, Item 1A of this
Form 10-KRisk FactorsRisks Related to Our Business and StructureRegulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital.
As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a
price below the then-current net asset value of our common stock if our Board of Directors determines that such sale is in our best interests and the best interests of our stockholders, and our stockholders approve such sale. In addition, we may
generally issue new shares of our common stock at a price below net asset value in rights offerings to existing stockholders, in payment of dividends and in certain other limited circumstances.

We will be periodically examined by the SEC for compliance with the Investment Company Act.

As a BDC, we are subject to certain risks and uncertainties. See Part I, Item 1A of this Form
10-K Risk FactorsRisks Related to Our Business and Structure.

Qualifying Assets

We may invest up to 30% of our portfolio opportunistically in non-qualifying
assets, which will be driven primarily through opportunities sourced through the CPC platform. However, under the Investment Company Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the
Investment Company Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying



17



---

##### Table of Contents

assets represent at least 70% of the BDCs total assets. The principal categories of qualifying assets relevant to our proposed business are the following:



| | (1) | Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who
is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the Investment
Company Act as any issuer which:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | is organized under the laws of, and has its principal place of business in, the United States;
| | --- | ----------------------------------------------------------------------------------------------



| | (b) | is not an investment company (other than a small business investment company wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the Investment Company Act; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | satisfies any of the following:
| | --- | -------------------------------



| | i. | does not have any class of securities that is traded on a national securities exchange;
| | -- | ---------------------------------------------------------------------------------------



| | ii. | has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than
$250 million;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | is a small and solvent company having total assets of not more than $4.0 million and capital and surplus of not less than $2.0 million.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Securities of any eligible portfolio company which we control.
| | --- | --------------------------------------------------------------



| | (3) | Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and
subject to reorganization or if the issuer, immediately prior to the purchase of its securities, was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio
company.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------

Managerial Assistance to Portfolio Companies

A BDC must have been organized under the laws of, and have its principal place of business in, any state or states within the United States and
must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above. However, in order to count portfolio securities as qualifying assets for the purpose of the 70% test, the BDC must either control
the issuer of the securities or must offer to make available to the issuer of the securities (other than small and solvent companies described above) significant managerial assistance; except that, where the BDC purchases such securities in
conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available managerial assistance means, among other things, any arrangement whereby the BDC,
through its directors, officers or employees, offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company. Our Investment
Adviser or an affiliate thereof may provide such managerial assistance on our behalf to portfolio companies that request such assistance. We may receive fees for these services.



18



---

##### Table of Contents

Temporary Investments

Pending investment in other types of qualifying assets, as described above, our investments may consist of cash, cash equivalents,
U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to, collectively, as temporary investments, so that 70% of our assets are qualifying assets. We may also
invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such
as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price which is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no
percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our gross assets constitute repurchase agreements from a single counterparty, we would not meet the
diversification tests in order to qualify as a RIC. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. Our Investment Adviser will monitor the creditworthiness of the counterparties with
which we enter into repurchase agreement transactions.

Indebtedness and Senior Securities

We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if
our asset coverage, as defined in the Investment Company Act, is at least equal to 200% immediately after each such issuance. In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our
stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or
emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see Part I, Item 1A of this Form 10-K Risk FactorRisks Relating to Our Business
and StructureRegulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks
associated with leverage.

Code of Ethics

We and our Investment Adviser have each adopted a code of ethics pursuant to Rule 17j-1 under the
Investment Company Act and Rule 204A-1 under the Advisers Act, respectively, that establishes procedures for personal investments and restricts certain transactions by our personnel. Our codes of ethics
generally do not permit investments by our and our Investment Advisers personnel in securities that may be purchased or sold by us.

Compliance
Policies and Procedures

We and our Investment Adviser have each adopted and implemented written policies and procedures reasonably
designed to detect and prevent violation of the federal securities laws and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation and designate a Chief Compliance
Officer to be responsible for administering the policies and procedures.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002, as amended (the Sarbanes-Oxley Act) imposes a wide variety of regulatory requirements on
publicly-held companies and their insiders. Many of these requirements affect us. For example:



| |  |  | pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934, as amended (the Exchange Act), our Chief Executive Officer and Chief Financial Officer must
certify the accuracy of the financial statements contained in our periodic reports;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



19



---

##### Table of Contents

| |  |  | pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | pursuant to Rule 13a-15 of the Exchange Act, our management must prepare a report regarding its assessment of our internal control over financial reporting and, starting from the
date on which we cease to be an emerging growth company under the JOBS Act, must obtain an audit of the effectiveness of internal control over financial reporting performed by our independent registered public accounting firm; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there
were significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to material
weaknesses.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply
with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance
therewith.

Proxy Voting Policies and Procedures

We have delegated our proxy voting responsibility to our Investment Adviser. The proxy voting policies and procedures of our Investment Adviser
are set forth below. These guidelines are reviewed periodically by our Investment Adviser and our Independent Directors, and, accordingly, are subject to change.

An investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the best interests of its clients. As part of
this duty, our Investment Adviser recognizes that it must vote portfolio securities in a timely manner free of conflicts of interest and in the best interests of its clients.

These policies and procedures for voting proxies are intended to comply with Section 206 of, and
Rule 206(4)-6 under, the Advisers Act.

Our Investment Adviser will vote proxies relating to
our portfolio securities in what it perceives to be the best interest of our stockholders. Our Investment Adviser will review on a case-by-case basis each proposal
submitted to a stockholder vote to determine its impact on the portfolio securities held by us. Although our Investment Adviser will generally vote against proposals that may have a negative impact on our portfolio securities, it may vote for such a
proposal if there exist compelling long-term reasons to do so.

Our Investment Advisers proxy voting decisions will be made by its
investment committee. To ensure that the vote is not the product of a conflict of interest, our Investment Adviser will require that: (1) anyone involved in the decision making process disclose to our Investment Advisers investment
committee, and Independent Directors, any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision making process or vote
administration are prohibited from revealing how our Investment Adviser intends to vote on a proposal in order to reduce any attempted influence from interested parties.

Privacy Principles

We endeavor to
maintain the privacy of our stockholders and to safeguard their non-public personal information. The following information is provided to help stockholders understand what
non-public personal information we collect, how we protect that information and why, in certain cases, we may share that information with select other parties.



20



---

##### Table of Contents

We may collect non-public personal information about
stockholders from our subscription agreements or other forms, such as name, address, account number and the types and amounts of investments, and information about transactions with us or our affiliates, such as participation in other investment
programs, ownership of certain types of accounts or other account data and activity. We may disclose the non-public personal information that we collect from our stockholders or former stockholders, as
described above, to our affiliates and service providers and as allowed by applicable law or regulation. Any party that receives this information from us is permitted to use it only for the services required by us and as allowed by applicable law or
regulation, and is not permitted to share or use this information for any other purpose. We permit access only by authorized personnel who need access to that non-public personal information to provide
services to us and our stockholders. We also maintain physical, electronic and procedural safeguards for non-public personal information that are designed to comply with applicable law.

Reporting Obligations

We furnish our
stockholders with annual reports containing audited financial statements, quarterly reports, and such other periodic reports as we determine to be appropriate or as may be required by law. We are required to comply with all periodic reporting, proxy
solicitation and other applicable requirements under the Exchange Act.

Our annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as reports on Forms 3, 4 and 5 regarding
directors, officers or 10% beneficial owners of us, filed or furnished pursuant to section 13(a), 15(d) or 16(a) of the Exchange Act, are available on our website
(http://www.carlyle.com/our-business/global-market-strategies/tcg-bdc-inc).

Stockholders and the
public may also read and copy any materials we file with the SEC at the SECs Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may also obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains a website (www.sec.gov) that contains such information.

Competition

Our primary competitors in
providing financing to middle market companies include public and private funds, other BDCs, commercial and investment banks, collateralized loan obligations, commercial finance companies and, to the extent they provide an alternative form of
financing, private equity and hedge funds. Many of our potential competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds
and access to funding sources that will not be available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments than we do, which could allow them to consider a wider variety of investments and
establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. We cannot assure you that the competitive pressures we will face
will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can
offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.

We expect to
use the expertise of the members of our Investment Advisers investment committee and its investment team to assess investment risks and determine appropriate pricing for our investments. In addition, we expect that the relationships developed
by our Investment Advisers investment team will enable us to learn about and compete effectively for, financing opportunities with attractive middle market companies in the industries in which we seek to invest. For additional information
concerning the competitive risks we face, see Part I, Item 1A of this Form 10-K Risk FactorsRisks Related to Our InvestmentsWe operate in a highly competitive market for investment
opportunities, and compete with investment vehicles sponsored or advised by our affiliates.



21



---

##### Table of Contents

Staffing

We do not currently have any employees. Our Chief Financial Officer and Treasurer and Chief Operating Officer, each a Managing Director of
Carlyle, and our Chief Compliance Officer and Secretary, a Director of Carlyle, are retained by our Administrator pursuant to the Carlyle Sub-Administration Agreements. Each of these professionals performs
their respective functions for us under the terms of our Administration Agreement.

Our day-to-day investment operations are managed by our Investment Adviser. Pursuant to its personnel agreement with Carlyle Employee Co., our Investment Adviser has access to the members of its investment
committee, and a team of additional experienced investment professionals who, collectively, comprise the Investment Advisers investment team. Our Investment Adviser may hire additional investment professionals to provide services to us.

Implications of Being an Emerging Growth Company

We currently are, and expect to remain, an emerging growth company, as that term is used in the JOBS Act until the earliest of:



| |  |  | up to five years measured from the date of the first sale of common equity securities pursuant to an effective registration statement;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the last day of the first fiscal year in which our annual gross revenues are $1.0 billion or more;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | the date on which we have, during the preceding three-year period, issued more than $1.0 billion in non-convertible debt; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | the date that we become a large accelerated filer as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of the common stock that is
held by non-affiliates exceeds $700 million as of any June 30.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under the JOBS
Act, we are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act, which would require that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial
reporting. This may increase the risk that material weaknesses or other deficiencies in our internal control over financial reporting go undetected. See Part I, Item 1A of this Form 10-KRisk FactorsRisks Related to Our Business and StructureWe are obligated to maintain proper and effective internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial
reporting in accordance with Section404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and the value of our common stock.

In addition, Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the Securities Act) and Section 13(a) of the
Exchange Act, as amended by Section 102(b) of the JOBS Act, provide that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards. However, pursuant to Section 107 of
the JOBS Act, we are choosing to opt out of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Item 1A. Risk Factors

Potential investors should be aware that an investment in the Company involves a high degree of risk. There can be no assurance that the
Companys investment objective will be achieved or that an investor will receive a return of its capital. In addition, there will be occasions when the Investment Adviser and its affiliates may encounter potential conflicts of interest in
connection with the Company. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be



22



---

##### Table of Contents

immaterial also may materially adversely affect our business, financial condition and/or operating results. The following considerations, in addition to the considerations set forth elsewhere
herein, should be carefully evaluated before making an investment in the Company. If any of the following events occur, our business, financial condition and operating result could be materially and adversely affected. In such case, our net asset
value could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Structure

Capital markets may experience periods of disruption and instability. These market conditions may materially and adversely affect debt and equity capital
markets in the United States and abroad, which may in the future have a negative impact on our business and operations.

From time
to time, capital markets may experience periods of disruption and instability. For example, between 2007 and 2009, the global capital markets experienced an extended period of disruption as evidenced by a lack of liquidity in the debt capital
markets, write-offs in the financial services sector, the re-pricing of credit risk and the failure of certain major financial institutions. Despite actions of the United States, federal government and foreign
governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and
financial services firms in particular. While market conditions have experienced relative stability in recent years, there have been continuing periods of volatility such as that following the referendum by British voters to exit the European Union
(Brexit) in June 2016 and that experienced during the first quarter of 2016, and there can be no assurance that adverse market conditions will not repeat themselves in the future. During such periods of market disruption and instability,
we and other companies in the financial services sector may have limited access, if available, to alternative markets for debt and equity capital. Equity capital may be difficult to raise to the extent we complete an initial public offering and
commence trading on an exchange because, subject to some limited exceptions which will apply to us, as a BDC, we will generally not be able to issue additional shares of our common stock at a price less than net asset value without first obtaining
approval for such issuance from our stockholders and our independent directors. In addition, our ability to incur indebtedness (including by issuing preferred stock) is limited by applicable regulations such that our asset coverage, as defined in
the Investment Company Act, must equal at least 200% immediately after each time we incur indebtedness. The debt capital that will be available, if at all, may be at a higher cost and on less favorable terms and conditions in the future. Any
inability to raise capital could have a negative effect on our business, financial condition and results of operations.

Given the extreme
volatility and dislocation in the capital markets over the past several years, many BDCs have faced, and may in the future face, a challenging environment in which to raise or access capital. In addition, significant changes in the capital markets,
including the extreme volatility and disruption over the past several years, has had, and may in the future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving these investments. While
most of our investments are not publicly traded, applicable accounting standards require us to assume as part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an
investment through its maturity). As a result, volatility in the capital markets can adversely affect our investment valuations. Further, the illiquidity of our investments may make it difficult for us to sell such investments if required and to
value such investments. As a result, we may realize significantly less than the value at which we will have recorded our investments. An inability to raise capital, and any required sale of our investments for liquidity purposes, could have a
material adverse impact on our business, financial condition or results of operations.

Economic recessions or downturns could impair our portfolio
companies and harm our operating results.

Many of the portfolio companies in which we make investments may be susceptible to
economic slowdowns or recessions and may be unable to repay the loans we made to them during these periods. Therefore, our non-performing assets may increase and the value of our portfolio may decrease during
these periods as we are



23



---

##### Table of Contents

required to record our investments at their current fair value. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity
investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our and our portfolio companies funding costs,
limit our and our portfolio companies access to the capital markets or result in a decision by lenders not to extend credit to us or our portfolio companies. These events could prevent us from increasing investments and harm our operating
results.

A portfolio companys failure to satisfy financial or operating covenants imposed by us or other lenders could lead to
defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio companys ability to meet its obligations
under the debt that we hold. We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if one of our portfolio companies were to go bankrupt,
depending on the facts and circumstances, including the extent to which we will actually provide significant managerial assistance to that portfolio company, a bankruptcy court might subordinate all or a portion of our claim to that of other
creditors.

Capital markets may experience periods of disruption and instability; as a result, we may be unable to launch or complete a Qualified
IPO of our common stock or list our shares on a recognized exchange.

From time to time, the U.S. and global capital markets may
experience periods of disruption and instability. While market conditions have experienced relative stability in recent years, there have been continuing periods of volatility such as that experienced during the first quarter of 2016 and there can
be no assurance that adverse market conditions will not repeat themselves or worsen in the future. A prolonged period of market illiquidity may have an adverse effect on our business, financial condition and results of operations. Unfavorable
economic conditions could also increase our portfolio companies funding costs, limit their access to the capital markets or result in a decision by lenders not to extend credit to them. These events could limit our investment originations,
limit their ability to grow, negatively impact our operating results, and delay or prevent us from launching or completing a Qualified IPO of our common stock or listing our shares on a recognized exchange.

We are dependent upon our Investment Adviser for our future success.

We do not have any employees. We depend on the diligence, skill and network of business contacts of our Investment Advisers investment
professionals and CPC to source appropriate investments for us. We depend on members of our Investment Advisers investment team to appropriately analyze our investments and our Investment Advisers investment committee to approve and
monitor our middle market portfolio investments. Our Investment Advisers investment committee, together with the other members of its investment team, evaluate, negotiate, structure, close and monitor our investments. Our future success will
depend on the continued availability of the members of our Investment Advisers investment committee and the other investment professionals available to our Investment Adviser. Neither we nor our Investment Adviser has employment agreements
with these individuals or other key personnel, and we cannot provide any assurance that unforeseen business, medical, personal or other circumstances would not lead any such individual to terminate his or her relationship with us. The loss of
Mr. Hart, or any of the other senior investment professionals to which our Investment Adviser has access, could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition and results
of operations. In addition, we cannot assure you that CGMSIM will remain our investment adviser or that we will continue to have access to Carlyles investment professionals or its information and deal flow. Further, the can be no assurance
that CGMSIM will replicate its own or Carlyles historical success, and we caution you that our investment returns could be substantially lower than the returns achieved by other Carlyle-managed funds.



24



---

##### Table of Contents

Our financial condition, results of operations and ability to achieve our investment objective depend on
our ability to source investments, access financing and manage future growth effectively.

Our ability to achieve our investment
objective and to grow depends on our ability to acquire suitable investments and monitor and administer those investments, which depends, in turn, on our Investment Advisers ability to identify, invest in and monitor companies that meet our
investment criteria.

Accomplishing this result on a cost-effective basis is largely a function of our Investment Advisers
structuring of the investment process, its ability to provide competent, attentive and efficient services to us and its ability to access financing for us on acceptable terms. Our Investment Advisers investment team has substantial
responsibilities under the Investment Advisory Agreement, has substantial responsibilities in connection with managing us and certain other investment funds and accounts advised by our Investment Adviser, and may also be called upon to provide
managerial assistance to our portfolio companies. These demands on their time, which will increase as the number of investments grow, may distract them or slow the rate of investment. In order for us to grow, Carlyle will need to hire, train,
supervise, manage and retain new employees. However, we can offer no assurance that any such investment professionals will contribute effectively to the work of our Investment Adviser. Any failure to manage our future growth effectively could have a
material adverse effect on our business, financial condition and results of operations.

We may need to raise additional capital to grow because we
must distribute most of our income.

We may need additional capital to fund growth in our investments and a reduction in the
availability of new capital could limit our ability to grow. We have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. To maintain our status as a RIC, among other
requirements, we must distribute on a timely basis at least 90% of our investment company taxable income to our stockholders to maintain our RIC status. As a result, any such cash earnings may not be available to fund investment originations or
repay maturing debt. We have borrowed under the SPV Credit Facility, the Credit Facility and through the issuance of the 2015-1 Notes and in the future may borrow under additional debt facilities from
financial institutions. We must continue to issue additional debt and equity securities to fund our growth. If we fail to obtain funds from such sources or from other sources to fund our investments, it could limit our ability to grow, which may
have an adverse effect on the value of our securities. We may pursue growth through acquisitions or strategic investments in new businesses. Completion and timing of any such acquisitions or strategic investments may be subject to a number of
contingencies and risks. There can be no assurance that the integration of an acquired business will be successful or that an acquired business will prove to be profitable or sustainable.

In addition, as a BDC, our ability to borrow or issue preferred stock may be restricted if our total assets are less than 200% of our total
borrowings and preferred stock. Furthermore, equity capital may be difficult to raise because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price per share less than NAV
without first obtaining approval for such issuance from our stockholders and our Independent Directors.

Any failure on our part to maintain our
status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation.

The Investment Company Act imposes numerous constraints on the operations of BDCs and RICs that do not apply to other types of investment
vehicles. For example, under the Investment Company Act, BDCs are required to invest at least 70% of their total assets in specified types of qualifying assets, primarily in private U.S. companies or thinly-traded U.S. public companies,
cash, cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less. In addition, in order to continue to qualify as a RIC for U.S. federal income tax purposes, we are required to satisfy
certain source-of-income, diversification



25



---

##### Table of Contents

and distribution requirements. These constraints, among others, may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective. See Part
I, Item 1 of this Form 10-K BusinessElection to be Taxed as a RIC.

Furthermore, any failure to comply with the requirements imposed on BDCs by the Investment Company Act could cause the SEC to bring an
enforcement action against us and/or expose us to claims of private litigants. In addition, upon approval of a majority of our outstanding voting securities as required by the Investment Company Act, we may elect to withdraw our status as a BDC. If
we decide to withdraw our election, or if we otherwise fail to qualify, or maintain our qualification, as a BDC, we might be regulated as a closed-end investment company that is required to register under the
Investment Company Act, which would subject us to additional regulatory restrictions, significantly decrease our operating flexibility and could significantly increase our cost of doing business. In addition, any such failure could cause an event of
default under our outstanding indebtedness, which could have a material adverse effect on our business, financial condition or results of operations.

Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of
raising additional capital may expose us to risks, including the typical risks associated with leverage.

We may issue debt
securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as senior securities, up to the maximum amount permitted by the Investment Company Act. In addition, we may seek
to securitize certain of our loans. Under the provisions of the Investment Company Act, we are permitted, as a BDC, to issue senior securities only in amounts such that our asset coverage ratio, as defined in the Investment Company Act, equals at
least 200% of total assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test, which may prohibit us from
paying dividends and could prevent us from maintaining our status as a RIC or may prohibit us from repurchasing shares of our common stock. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our
leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. Accordingly, any failure to satisfy this test could have a material adverse effect on our business, financial condition or results of operations. As of
December 31, 2016, our asset coverage calculated in accordance with the Investment Company Act was 209.97%. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders.
Furthermore, as a result of issuing senior securities, our common stockholders would also be exposed to typical risks associated with increased leverage, including an increased risk of loss resulting from increased indebtedness.

If we issue preferred stock, the preferred stock would rank senior to common stock in our capital structure, preferred
stockholders would have separate voting rights on certain matters and might have other rights, preferences, or privileges more favorable than those of our common stockholders, and the issuance of preferred stock could have the effect of delaying,
deferring or preventing a transaction or a change of control that might involve a premium price for holders of our common stock or otherwise be in their best interest.

We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common
stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock if our Board of Directors determines that such sale is in the best interests of us and our
stockholders and our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board of Directors, closely approximates the market
value of such securities (less any distributing commission or discount). If we raise additional funds by issuing more common stock, including in connection with a Qualified IPO, or senior securities convertible into, or exchangeable for, our common
stock, then the percentage ownership of our stockholders at that time will decrease, and holders of our common stock might experience dilution.



26



---

##### Table of Contents

We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the
risk of investing in us.

As part of our business strategy, we, including through our wholly owned subsidiaries, borrow from and
may in the future issue additional senior debt securities to banks, insurance companies and other lenders. Holders of these loans or senior securities would have fixed-dollar claims on our assets that are superior to the claims of our stockholders.
If the value of our assets decreases, leverage will cause our net asset value to decline more sharply than it otherwise would have without leverage. Similarly, any decrease in our income would cause our net income to decline more sharply than it
would have if we had not borrowed. This decline could negatively affect our ability to make dividend payments on our common stock.

Our
ability to service our borrowings depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. In addition, our management fees are payable based on our gross assets, including assets
acquired through the use of leverage (but excluding cash and any temporary investments in cash-equivalents), which may give our Investment Adviser an incentive to use leverage to make additional investments. See We may
be obligated to pay our Investment Adviser even if we incur a loss. The amount of leverage that we employ will depend on our Investment Advisers and our Board of Directors assessment of market and other factors at the time of
any proposed borrowing. We cannot assure you that we will be able to obtain credit at all or on terms acceptable to us.

In addition to
having fixed-dollar claims on our assets that superior to the claims of our common stockholders, obligations to lenders may be secured by a first priority security interest in our portfolio of investments and cash. In the case of a liquidation
event, those lenders would receive proceeds to the extent of their security interest before any distributions are made to our stockholders.

Our Facilities and 2015-1 Notes impose financial and operating covenants that restrict our business
activities, remedies on default and similar matters. As of December 31, 2016, we are in compliance with the covenants of our SPV Credit Facility, Credit Facility and 2015-1 Notes. However, our continued
compliance with these covenants depends on many factors, some of which are beyond our control. Accordingly, although we believe we will continue to be in compliance, we cannot assure you that we will continue to comply with the covenants in our
Facilities and 2015-1 Notes. Failure to comply with these covenants could result in a default. If we were unable to obtain a waiver of a default from the lenders or holders of that indebtedness, as applicable,
those lenders or holders could accelerate repayment under that indebtedness, which may result in cross-acceleration of other indebtedness. An acceleration could have a material adverse impact on our business, financial condition and results of
operations. Lastly, we may be unable to obtain additional leverage, which would, in turn, affect our return on capital.

As of
December 31, 2016, we had a combined $694.9 million of outstanding consolidated indebtedness under our Facilities and 2015-1 Notes. Our annualized interest cost as of December 31, 2016, was
2.81%, excluding fees (such as fees on undrawn amounts and amortization of upfront fees). Since we generally pay interest at a floating rate on our SPV Credit Facility, Credit Facility and 2015-1 Notes, an
increase in interest rates will generally increase our borrowing costs.

Our indebtedness could adversely affect our business, financial conditions
or results of operations.

We cannot assure you that our business will generate sufficient cash flow from operations or that future
borrowings will be available to us under our credit facilities or otherwise in an amount sufficient to enable us to repay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or
before it matures. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets or seeking
additional equity. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all, or on terms that would not be disadvantageous to our stockholders or on terms that would not require us to
breach the terms and conditions of our existing or future debt agreements.



27



---

##### Table of Contents

Changes in interest rates may increase our cost of capital, reduce the ability of our portfolio companies
to service their debt obligations and decrease our net investment income.

General interest rate fluctuations and changes in credit
spreads on floating rate loans may have a substantial negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income and our
net asset value. Substantially all of our debt investments have variable interest rates that reset periodically based on benchmarks such as LIBOR and the prime rate, so an increase in interest rates from their historically low present levels may
make it more difficult for our portfolio companies to service their obligations under the debt investments that we will hold. Rising interest rates could also cause portfolio companies to shift cash from other productive uses to the payment of
interest, which may have a material adverse effect on their business and operations and could, over time, lead to increased defaults. In addition, to the extent we borrow money to make investments, our net investment income depends, in part, upon
the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net
investment income to the extent we use debt to finance our investments. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income.

In addition, a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to our debt
investments. Accordingly, an increase in interest rates would make it easier for us to meet or exceed the incentive fee hurdle rate and may result in a substantial increase of the amount of incentive fees payable to our Investment Adviser with
respect to our pre-incentive fee net investment income.

We may experience fluctuations in our quarterly
results.

We could experience fluctuations in our quarterly operating results due to a number of factors, including, the pace at
which investments are made, the interest rate payable on the debt securities we acquire, the default rate on such securities, rates of repayment, the level of our expenses, variations in and the timing of the recognition of realized and unrealized
gains or losses and changes in unrealized appreciation or depreciation, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as
being indicative of performance in future periods.

There are significant potential conflicts of interest, including the management of other
investment funds and accounts by our Investment Adviser, which could impact our investment returns.

Our executive officers and
directors, other current and future principals of our Investment Adviser and certain members of our Investment Advisers investment committee may serve as officers, directors or principals of other entities and affiliates of our Investment
Adviser and funds managed by our affiliates that operate in the same or a related line of business as we do. Currently, our executive officers, as well as the other principals of our Investment Adviser manage other funds affiliated with Carlyle. In
addition, our Investment Advisers investment team has responsibilities for managing U.S. middle market debt investments for certain other investment funds and accounts. Accordingly, they have obligations to investors in those entities, the
fulfillment of which may not be in the best interests of, or may be adverse to the interests of, us or our stockholders. Although the professional staff of our Investment Adviser will devote as much time to our management as appropriate to enable
our Investment Adviser to perform its duties in accordance with the Investment Advisory Agreement, the investment professionals of our Investment Adviser may have conflicts in allocating their time and services among us, on the one hand, and
investment vehicles managed by Carlyle or one or more of its affiliates, on the other hand.

In addition, we note that any affiliated
investment vehicle currently existing, or formed in the future, and managed by our Investment Adviser or its affiliates, including Carlyle, may, notwithstanding different stated investment objectives, have overlapping investment objectives with our
own and, accordingly, may invest in



28



---

##### Table of Contents

asset classes similar to those targeted by us. As a result, our Investment Adviser may face conflicts in allocating investment opportunities between us and such other entities. Although our
Investment Adviser will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in
investments made by investment funds managed by our Investment Adviser or an investment manager affiliated with our Investment Adviser, including Carlyle. In any such case, when our Investment Adviser identifies an investment, it will be forced to
choose which investment fund should make the investment.

We and our affiliates may own investments at different levels of a portfolio
companys capital structure or otherwise own different classes of a portfolio companys securities. Such investments may inherently give rise to conflicts of interest or perceived conflicts of interest between or among the various classes
of securities that may be held. Conflicts may also arise because portfolio decisions regarding our portfolio may benefit our affiliates. Our affiliates may pursue or enforce rights with respect to one of our portfolio companies, and those activities
may have an adverse effect on us. As a result, prices, availability, liquidity and terms of our investments may be negatively impacted by the activities of our affiliates, and transactions for us may be impaired or effected at prices or terms that
may be less favorable than would otherwise have been the case.

Carlyle considers its One Carlyle philosophy and the ability
of its professionals to communicate and collaborate across funds, industries and geographies one of its significant competitive strengths. As a result of the expansion of its platform into various lines of business in the alternative asset
management industry, Carlyle is subject to a number of actual and potential conflicts of interest and subject to greater regulatory oversight than that to which it would otherwise be subject if it had just one line of business. In addition, as
Carlyle expands its platform, the allocation of investment opportunities among its investment funds, including us, is expected to become more complex. In addressing these conflicts and regulatory requirements across Carlyles various
businesses, Carlyle has and may continue to implement certain policies and procedures (for example, information barriers). As a practical matter, the establishment and maintenance of such information barriers means that collaboration between our
investment professionals across various platforms or with respect to certain investments may be limited, reducing potential synergies that Carlyle has cultivated across these businesses through its One Carlyle approach. In addition, we
may come into possession of material non-public information with respect to issuers in which we may be considering making an investment. As a consequence, we may be precluded from providing such information or
other ideas to other funds affiliated with Carlyle that benefit from such information or we may be precluded from otherwise consummating a contemplated investment. To the extent we or any other funds affiliated with Carlyle fail to appropriately
deal with any such conflicts, it could negatively impact our reputation or Carlyles reputation and our ability to raise additional funds and the willingness of counterparties to do business with us or result in potential litigation against us.
Our communications with Carlyle Corporate Private Equity, Real Assets and Investment Solutions personnel are subject to certain restrictions as set forth in Carlyles information barrier policy. In that regard, it is not generally expected that
the investment personnel involved in our day-to-day affairs will discuss any issuer-specific information with other members of Carlyle outside the Carlyle Global Credit
platform.

In the ordinary course of business, we may enter into transactions with affiliates and portfolio companies that may be
considered related party transactions. In order to ensure that we do not engage in any prohibited transactions under the Investment Company Act with any persons affiliated with us, we have implemented certain policies and procedures whereby certain
of our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us, companies controlled by us, any stockholders that own more than 5% of us and our employees and directors. We will
not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the Investment Company Act or, if such concerns exist, we have taken appropriate actions to seek Board of Directors review and approval or
SEC exemptive relief for such transaction. Our Board of Directors will review these procedures on an annual basis.

In the course of our
investing activities, we pay management and incentive fees to our Investment Adviser and reimburse our Investment Adviser for certain expenses it incurs in accordance with our Investment Advisory



29



---

##### Table of Contents

Agreement. As a result, investors in our common stock invest on a gross basis and receive distributions on a net basis after expenses, resulting in a lower rate of return
than an investor might achieve through direct investments. Accordingly, there may be times when the senior management team of our Investment Adviser has interests that differ from those of our stockholders, giving rise to a conflict.

In addition, we pay our Administrator, an affiliate of our Investment Adviser, its costs and expenses and our allocable portion of overhead
incurred by it in performing its obligations under the Administration Agreement, including, compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and their
respective staff who provide services to us, operations staff who provide services to us, and internal audit staff in their role of performing our Sarbanes-Oxley Act internal control assessment. These arrangements create conflicts of interest that
our Board of Directors monitors. We entered into a royalty-free License Agreement with CIM, pursuant to which CIM has granted us a non-exclusive license to use the name Carlyle. Under the License
Agreement, we have the right to use the Carlyle name for so long as CGMSIM or one of its affiliates remains our Investment Adviser.

We
may be obligated to pay our Investment Adviser incentive compensation even if we incur a loss.

Our Investment Adviser is entitled
to incentive compensation for each calendar quarter in an amount equal to a percentage of the excess of our pre-incentive fee net investment income for that quarter (before deducting incentive compensation)
above a performance threshold for that quarter. Our pre-incentive fee net investment income for incentive compensation purposes excludes realized and unrealized capital losses and depreciation that we may
incur in the calendar quarter, even if such capital losses or depreciation result in a net loss on our statement of operations for that quarter. Thus, we may be required to pay our Investment Adviser incentive compensation for a calendar quarter
even if there is a decline in the value of our portfolio or we incur a net loss for that quarter, subject to the deferral provisions.

Our fee
structure may induce our Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.

The incentive fees payable by us to our Investment Adviser may create an incentive for our Investment Adviser to pursue investments on our
behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement. The incentive fees payable to our Investment Adviser are calculated based on a percentage of our return on invested capital. This may
encourage our Investment Adviser to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would impair the value of our common stock. In addition, our
Investment Adviser receives the incentive fees based, in part, upon net capital gains realized on our investments. Unlike that portion of the incentive fees based on income, there is no hurdle rate applicable to the portion of the incentive fees
based on net capital gains. As a result, our Investment Adviser may have a tendency to invest more capital in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our
investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.

The catch-up portion of the incentive fees may encourage our Investment Adviser to
accelerate or defer interest payable by portfolio companies from one calendar quarter to another, potentially resulting in fluctuations in timing and dividend amounts.

Moreover, because the base management fees payable to our Investment Adviser are payable based on our gross assets, including those assets
acquired through the use of leverage, our Investment Adviser has a financial incentive to incur leverage which may not be consistent with our stockholders interests.

We may invest, to the extent permitted by law, in the securities and instruments of other investment companies, including private funds, and,
to the extent we so invest, bear our ratable share of any such investment



30



---

##### Table of Contents

companys expenses, including management and performance fees. We also remain obligated to pay management and incentive fees to our Investment Adviser with respect to the assets invested in
the securities and instruments of other investment companies. With respect to each of these investments, each of our stockholders bear his or her share of the management and incentive fees of our Investment Adviser as well as indirectly bearing the
management and performance fees and other expenses of any investment companies in which we invest.

We will be subject to corporate-level income tax
if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code.

Although we have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the
Code, we cannot assure you that we will be able to maintain RIC status. To maintain RIC status and be relieved of U.S. federal income taxes on income and gains distributed to our stockholders, we must, among other things, continue to qualify and
have in effect an election to be treated as a BDC under the Investment Company Act at all times during each taxable year and meet the Annual Distribution Requirement, the 90% Gross Income Test and the Diversification Tests (each defined term,
defined below).



| |  |  | We must distribute to our stockholders on an annual basis at least 90% of our investment company taxable income (generally, our net ordinary income plus the excess of our realized net short-term capital gains over
realized net long-term capital losses, determined without regard to the dividends paid deduction) for each taxable year (the Annual Distribution Requirement).
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We must derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities or foreign
currencies, net income from certain qualified publicly traded partnerships, or other income derived with respect to our business of investing in such stock or securities or foreign currencies (the 90% Gross Income Test).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | At the end of each quarter of our taxable year, at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other
securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and no more than 25% of the value of our assets is invested in the securities, other than U.S.
government securities or securities of other RICs, of one issuer, or of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses, or the
securities of one or more qualified publicly traded partnerships (the Diversification Tests).
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If we
fail to maintain our RIC status for any reason, and we do not qualify for certain relief provisions under the Code, we would be subject to corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes) regardless of whether
we make any distributions to the holders of our common stock. In this event, the resulting taxes and any resulting penalties could substantially reduce our net assets, the amount of our income available for distribution and the amount of our
distributions to our stockholders, which would have a material adverse effect on our financial performance. For additional discussion regarding the tax implications of a RIC, see Part I, Item 1 of this Form
10-K BusinessElection to be Taxed as a RIC.

We may have difficulty satisfying the
Annual Distribution Requirement in order to maintain our RIC status if we recognize income before or without receiving cash representing such income.

We may make investments that produce income that is not matched by a corresponding cash receipt by us, such as original issue discount
(OID), which may arise, for example, if we receive warrants in connection with the making of a loan, or payment-in-kind (PIK) interest
representing contractual interest added to the loan principal balance and due at the end of the loan term. Any such income would be treated as income earned by us and therefore would be subject to the Annual Distribution Requirement. Such
investments may require us to



31



---

##### Table of Contents

borrow money or dispose of other securities in order to comply with those requirements. However, under the Investment Company Act, we are not permitted to make distributions to our stockholders
while our debt obligations and other senior securities are outstanding unless an asset coverage test is met. See Part I, Item 1 of this Form 10-K BusinessOur Regulatory
StructureRegulation as a Business Development CompanyIndebtedness and Senior Securities.

If we are prohibited from
making distributions or are unable to raise additional debt or equity capital or sell assets to make distributions, we may not be able to make sufficient distributions to satisfy the Annual Distribution Requirement, and therefore would not be able
to maintain our qualification as a RIC. Additionally, we may make investments that result in the recognition of ordinary income rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us
from making capital gain distributions. See Part I, Item 1 of this Form 10-K BusinessElection to be Taxed as a RIC.

A portion of our income and fees may not be qualifying income for purposes of the income source requirement.

Some of the income and fees that we may recognize will not satisfy the income source requirement applicable to RICs. In order to ensure that
such income and fees do not disqualify us as a RIC for a failure to satisfy such requirement, we may be required to recognize such income and fees indirectly through one or more entities treated as corporations for U.S. federal income tax purposes.
Such corporations will be required to pay U.S. corporate income tax on their earnings, which ultimately will reduce the amount of income available for distribution.

If we are not treated as a publicly offered regulated investment company, as defined in the Code, certain U.S. stockholders will be treated
as having received a dividend from us in the amount of such U.S. stockholders allocable share of the management and incentive fees paid to our Investment Adviser and certain of our other expenses, and these fees and expenses will be treated as
miscellaneous itemized deductions of such U.S. stockholders.

We expect to be treated as a publicly offered regulated
investment company as a result of shares of our common stock being held by at least 500 persons at all times during the taxable year. However, we cannot assure you that we will be treated as a publicly offered regulated investment company for
all years. If we are not treated as a publicly offered regulated investment company for any calendar year, each U.S. stockholder that is an individual, trust or estate will be treated as having received a dividend from us in the amount of such U.S.
stockholders allocable share of the management and incentive fees paid to our Investment Adviser and certain of our other expenses for the calendar year, and these fees and expenses will be treated as miscellaneous itemized deductions of such
U.S. stockholder. Miscellaneous itemized deductions generally are deductible by a U.S. stockholder that is an individual, trust or estate only to the extent that the aggregate of such U.S. stockholders miscellaneous itemized deductions exceeds
2% of such U.S. stockholders adjusted gross income for U.S. federal income tax purposes, are not deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions under the Code. See Part
I, Item 1 of this Form 10-K BusinessElection to be Taxed as a RIC.

We will expend
significant financial and other resources to comply with the requirements of being a public entity.

As a public entity, we are
subject to the reporting requirements of the Exchange Act and requirements of the Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports
with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting, which are discussed below. See Part I, Item 1 of
this Form 10-K BusinessOur Regulatory StructureRegulation as a Business Development CompanySarbanes-Oxley Act of 2002. In



32



---

##### Table of Contents

order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls, significant resources and management oversight is required. We will continue to
implement procedures, processes, policies and practices for the purpose of addressing the standards and requirements applicable to public companies. These activities may divert managements attention from other business concerns, which could
have a material adverse effect on our business, financial condition, results of operations and cash flows. We expect to incur significant additional annual expenses related to these steps and, among other things, directors and officers
liability insurance, director fees, reporting requirements of the SEC, transfer agent fees, additional administrative expenses payable to our Administrator to compensate them for hiring additional accounting, legal and administrative personnel,
increased auditing and legal fees and similar expenses.

The systems and resources necessary to comply with public company reporting
requirements will increase further once we cease to be an emerging growth company under the JOBS Act. As long as we remain an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will remain an emerging growth company for up to
five years following an initial public offering, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, we would
cease to be an emerging growth company as of the following December 31.

We are obligated to maintain proper and effective internal control
over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and the value of our
common stock.

We are obligated to maintain proper and effective internal control over financial reporting, including the internal
control evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act (Section 404). We will not be required to comply with all of the requirements under Section 404 until the date we are no longer an
emerging growth company under the JOBS Act. Accordingly, our internal controls over financial reporting do not currently meet all of the standards contemplated by Section 404 that we will eventually be required to meet. Specifically, we are
required to conduct annual management assessments of the effectiveness of our internal controls over financial reporting. However, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our
internal control over financial reporting until the date we are no longer an emerging growth company under the JOBS Act. We currently are, and expect to remain, an emerging growth company, as that term is used in the JOBS Act until the
earliest of: (i) up to five years measured from the date of the first sale of common equity securities pursuant to an effective registration statement; (ii) the last day of the first fiscal year in which our annual gross revenues are
$1.0 billion or more; (iii)the date on which we have, during the preceding three-year period, issued more than $1.0 billion in non-convertible debt; and (iv) the date that we become a
large accelerated filer as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of the common stock that is held by
non-affiliates exceeds $700 million as of any June 30.

We have begun the process of
documenting our internal control procedures to satisfy the requirements of Section 404, which requires annual management assessments of the effectiveness of our internal control over financial reporting. If we are not able to implement the
applicable requirements of Section 404 in a timely manner or with adequate compliance, our operations, financial reporting or financial results could be adversely affected. Matters impacting our internal controls may cause us to be unable to
report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or, to the extent we have completed a Qualified IPO, violations of applicable stock exchange listing rules,
and result in a breach of the covenants under the agreements governing any of our financing arrangements. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our
financial statements. Confidence in the reliability of our financial statements could also suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This
could materially adversely affect us and lead to a decline in the market price of our common stock, to the extent we have completed a Qualified IPO.



33



---

##### Table of Contents

Our internal control over financial reporting may not prevent or detect misstatements because of
its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation
of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results
could be harmed and we could fail to meet our financial reporting obligations.

Certain investors are limited in their ability to make significant
investments in us.

Private funds that are excluded from the definition of investment company either pursuant to
Section 3(c)(1) or 3(c)(7) of the Investment Company Act are restricted from acquiring directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the acquisition). Investment companies
registered under the Investment Company Act and BDCs are also subject to this restriction as well as other limitations under the Investment Company Act that would restrict the amount that they are able to invest in our securities. As a result,
certain investors will be limited in their ability to make significant investments in us at a time that they might desire to do so.

Our Board of
Directors is authorized to reclassify any unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.

Under the Maryland General Corporation Law (MGCL) and our charter, our Board of Directors is authorized to classify and reclassify
any authorized but unissued shares of stock into one or more classes of stock, including preferred stock. Prior to the issuance of shares of each class or series, the Board of Directors is required by Maryland law and our charter to set the terms,
preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the Board of Directors could authorize the
issuance of shares of preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be
in their best interest. The cost of any such reclassification would be borne by our existing common stockholders. Certain matters under the Investment Company Act require the separate vote of the holders of any issued and outstanding preferred
stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a BDC. In addition, the Investment Company Act provides that holders of preferred stock are entitled to vote
separately from holders of common stock to elect two preferred stock directors. We currently have no plans to issue preferred stock, but may determine to do so in the future. The issuance of preferred stock convertible into shares of common stock
might also reduce the net income per share and net asset value per share of our common stock upon conversion, provided, that we will only be permitted to issue such convertible preferred stock to the extent we comply with the requirements of
Section 61 of the Investment Company Act, including obtaining common stockholder approval. In addition, under the Investment Company Act, participating preferred stock and preferred stock constitutes a senior security for purposes
of the 200% asset coverage test. These effects, among others, could have an adverse effect on an investment in our common stock.

Provisions of the
MGCL and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

The
MGCL and our charter and bylaws contain provisions that may discourage, delay or make more difficult a change in control of us or the removal of our directors. We are subject to the Maryland Business Combination Act (MBCA), subject to
any applicable requirements of the Investment Company Act. Our Board of Directors has adopted a resolution exempting from the MBCA any business combination between us and any other person, subject to prior approval of such business combination by
our Board of Directors, including approval by a majority of our Independent Directors. If the resolution exempting business combinations is repealed or our Board of Directors does not approve a business combination, the Business Combination Act may



34



---

##### Table of Contents

discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer. Our bylaws exempt from the Maryland Control Share Acquisition Act
(Control Share Act) acquisitions of our stock by any person. If we amend our bylaws to repeal the exemption from the Control Share Act, the Control Share Act also may make it more difficult for a third party to obtain control of us and
increase the difficulty of consummating such a transaction. However, we will amend our bylaws to be subject to the Control Share Act only if our Board of Directors determines that it would be in our best interests and if the SEC staff does not
object to our determination that our being subject to the Control Share Act does not conflict with the Investment Company Act.

We have
also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our charter classifying our Board of Directors in three classes serving staggered three-year terms, and authorizing our Board of
Directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock, to amend our charter without stockholder approval and to increase or decrease the number of shares of
stock that we have authority to issue. These provisions, as well as other provisions of our charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.

Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval.

Our Board of Directors has the authority to modify or, if applicable, waive our investment objectives, operating policies and
strategies without prior notice (except as required by the Investment Company Act) and without stockholder approval. In addition, none of our investment policies is fundamental and any of them may be changed without stockholder approval. However,
absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current investment objectives, operating policies or strategies would
have on our business, operating results and value of our stock. Nevertheless, the effects may adversely affect our business and impact our ability to make distributions.

A failure in our operational systems or infrastructure, or those of third parties, as well as cyber-attacks could significantly disrupt our business or
negatively affect our liquidity, financial condition or results of operations.

We rely heavily on our and third parties
financial, accounting, information and other data processing systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems
in our activities. We face various security threats on a regular basis, including ongoing cyber-security threats to and attacks on our information technology infrastructure that are intended to gain access to our proprietary information, destroy
data or disable, degrade or sabotage our systems. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These security threats may be intentional or
unintentional and could originate from a wide variety of sources, including unknown third parties outside the Company for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The
result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our business
relationships.

Although we are not currently aware that we have been subject to cyber-attacks or other cyber incidents which,
individually or in the aggregate, have materially affected our operations or financial condition, there can be no assurance that the various procedures and controls we utilize to mitigate these threats will be sufficient to prevent disruptions to
our systems. If any of these systems do not operate properly or are disabled for any reason or if there is any unauthorized disclosure of data, whether as a result of tampering, a breach of our network security systems, a cyber-incident or attack or
otherwise, we could suffer substantial financial loss, increased



35



---

##### Table of Contents

costs, a disruption of our businesses, liability to our investors, regulatory intervention or reputational damage. In addition, we operate in a business that is highly dependent on information
systems and technology. Carlyle has implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a
cyber-incident, do not guarantee that a cyber-incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident. The information systems and technology that we rely
on may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase from its current level. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a
material adverse effect on us.

Furthermore, we depend on our and our Investment Advisers headquarters in New York, New York, where
most of our executives, investment professionals and administrative and operations personnel are located, for the continued operation of our business. Disasters, such as natural disasters, pandemics, events arising from local or larger scale
political or social matters or weather events, or disruptions in the infrastructure that supports our businesses, such as sudden electrical or telecommunications outages, could have a material adverse impact on our ability to continue to operate our
business without interruption. These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay distributions to our stockholders. Our disaster
recovery programs may not be sufficient to mitigate the harm that may result from such disasters or disruptions. In addition, insurance and other safeguards might only partially reimburse us for our losses, if at all.

Changes in laws or regulations governing our business or the businesses of our portfolio companies, changes in the interpretation thereof or newly
enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations may adversely affect our business and the businesses of our portfolio companies.

We and our portfolio companies are subject to laws and regulations at the U.S. federal, state and local levels and, in some cases, foreign
levels. These laws and regulations, as well as their interpretation, may change from time to time, and new laws, regulations and interpretations may also come into effect. Any such new or changed laws or regulations could have a material adverse
effect on our business or the business of our portfolio companies. The legal, tax and regulatory environment for BDCs, investment advisers and the instruments that they utilize (including derivative instruments) is continuously evolving. In
addition, there is significant uncertainty regarding recently enacted legislation (including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) and the regulations that have recently been adopted and
future regulations that may or may not be adopted pursuant to such legislation) and, consequently, the full impact that such legislation will ultimately have on us and the markets in which we trade and invest is not fully known. Such uncertainty and
any resulting confusion may itself be detrimental to the efficient functioning of the markets and the success of certain investment strategies.

In addition, as private equity firms become more influential participants in the U.S. and global financial markets and economy generally,
there recently has been pressure for greater governmental scrutiny and/or regulation of the private equity industry. It is uncertain as to what form and in what jurisdictions such enhanced scrutiny and/or regulation, if any, on the private equity
industry may ultimately take. Therefore, there can be no assurance as to whether any such scrutiny or initiatives will have an adverse impact on the private equity industry, including our ability to effect operating improvements or restructurings of
our portfolio companies or otherwise achieve our objectives.

Over the last several years, there also has been an increase in regulatory
attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector will be subject to new regulation. While it cannot be
known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension could negatively impact our operating results or financial condition,
impose additional costs on us, intensify the regulatory supervision of us or otherwise adversely affect our business.



36



---

##### Table of Contents

On February 3, 2017, President Trump signed an executive order (the Executive
Order) announcing the new Administrations policy to regulate the U.S. financial system in a manner consistent with certain Core Principles, including regulation that is efficient, effective and appropriately tailored. The
Executive Order directs the Secretary of the Treasury, in consultation with the heads of the member agencies of the Financial Stability Oversight Council, to report to the President on the extent to which existing laws, regulations and other
government policies promote the Core Principles and to identify any laws, regulations and other government policies that inhibit federal regulation of the U.S. financial system. At this time it is unclear what impact the Executive Order in
particular and the Administrations policies in general will have on regulations that affect our and our portfolio companies business.

Changes in laws or regulations related to U.S. federal income taxation could affect us or the holders of our common stock.

Reform proposals have been recently put forth by members of Congress and the President which, if ultimately proposed as legislation and enacted
as law, would substantially change the U.S. federal taxation of (among other things) individuals and businesses. In 2016, the Speaker of the House of Representatives and the Chairman of the House Ways and Means Committee published A Better
Way. Separately, the then-candidate, now-President published a one-page document on tax reform. Each of these proposals sets forth a variety of principles to guide
potential tax reform legislation. As of the date of this report, no legislation in respect of either of these proposals has been introduced in the Congress. However, the principles set forth in both A Better Way and the Presidents one-page proposal, if ultimately reduced to legislation enacted by the Congress and signed into law by the President in a form that is consistent with those principles, could change dramatically the U.S. federal
taxation of us and a holder of our common stock. Under both A Better Way and President Trumps proposal, individual and corporate tax rates would be meaningfully reduced. Under A Better Way, the U.S. federal tax system
would be converted into a destination-based cash-flow tax system under which net interest expense would not be deductible, investment in tangible property (other than land) and intangible assets would be immediately deductible, export
revenue would not be taxable, and the cost of imports would not be deductible. While it is impossible to predict whether and to what extent any tax reform legislation (or other legislative, regulatory or administrative change to the U.S. federal tax
laws) will be proposed or enacted, any such change in the U.S. federal tax laws could affect materially the value of any investment in our common stock. Prospective investors should consult their tax advisors regarding possible legislative and
regulatory changes and the potential effect of such changes on an investment in our common stock.

Our Investment Adviser can resign upon
60 days notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.

Our Investment Adviser has the right, under the Investment Advisory Agreement, to resign at any time upon 60 days written notice,
whether we have found a replacement or not. If our Investment Adviser resigns, we may not be able to find a new investment adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on
acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are
likely to be adversely affected and the value of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single
institution or group of executives having the expertise possessed by our Investment Adviser and its affiliates. Even if we are able to retain comparable management, whether internal or external, the integration of such management and their lack of
familiarity with our investment objective may result in additional costs and time delays that may adversely affect our financial condition, business and results of operations. Moreover, the termination by our Investment Adviser of our Investment
Advisory Agreement for any reason will be an event of default under the SPV Credit Facility, which could result in the immediate acceleration of the amounts due under the SPV Credit Facility. Similarly, it will be an event of default under the
Credit Facility if our Investment Adviser or an affiliate of our Investment Adviser ceases to manage us, which could result in the immediate acceleration of the amounts due under the Credit Facility.



37



---

##### Table of Contents

Our Investment Advisers liability is limited under the Investment Advisory Agreement, and we are
required to indemnify our Investment Adviser against certain liabilities, which may lead our Investment Adviser to act in a riskier manner on our behalf than it would when acting for its own account.

Our Investment Adviser has not assumed any responsibility to us other than to render the services described in the Investment Advisory
Agreement, and it will not be responsible for any action of our Board of Directors in declining to follow our Investment Advisers advice or recommendations. Pursuant to the Investment Advisory Agreement, our Investment Adviser and its members
and their respective officers, managers, partners, agents, employees, controlling persons and members and any other person or entities affiliated with it will not be liable to us for their acts under the Investment Advisory Agreement, absent willful
misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. We have agreed to indemnify, defend and protect our Investment Adviser and its members and their respective officers, managers, partners, agents,
employees, controlling persons and members and any other person or entities affiliated with it with respect to all damages, liabilities, costs and expenses arising out of or otherwise based upon the performance of any of our Investment
Advisers duties or obligations under the Investment Advisory Agreement or otherwise as an Investment Adviser for us, and not arising out of willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their
duties under the Investment Advisory and Agreement. These protections may lead our investment adviser to act in a riskier manner when acting on our behalf than it would when acting for its own account. See Our fee structure may induce
our Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.

Our Administrator can resign from its role as Administrator under the Administration Agreement, and a suitable replacement may not be found, resulting
in disruptions that could adversely affect our business, results of operations and financial condition.

Our Administrator has the
right to resign under the Administration Agreement upon 60 days written notice, whether a replacement has been found or not. If our Administrator resigns, it may be difficult to find a new administrator or hire internal management with similar
expertise and ability to provide the same or equivalent services on acceptable terms, or at all. If a replacement is not found quickly, our business, results of operations and financial condition are likely to be adversely affected and the value of
our common stock may decline. Even if a comparable service provider or individuals to perform such services are retained, whether internal or external, their integration into our business and lack of familiarity with our investment objective may
result in additional costs and time delays that may materially adversely affect our business, results of operations and financial condition.

Any of
our three sub-administrators can resign from their respective roles pursuant to the Sub-Administration Agreements, and suitable replacements may not be found, resulting
in disruptions that could adversely affect our business, results of operations and financial condition.

Each of Carlyle Employee
Co., CELF and State Street has the right to resign under their respective agreements, the Carlyle Sub-Administration Agreements and the State Street Sub-Administration
Agreement, upon 60 days written notice, whether a replacement has been found or not. If any of our sub-administrators resign, it may be difficult to find a new administrator or hire internal management
with similar expertise and ability to provide the same or equivalent services on acceptable terms, or at all. If a replacement is not found quickly, our business, results of operations and financial condition are likely to be adversely affected and
the value of our common stock may decline. Even if a comparable service provider or individuals to perform such services are retained, whether internal or external, their integration into our business and lack of familiarity with our investment
objective may result in additional costs and time delays that may materially adversely affect our business, results of operations and financial condition.

We are subject to certain risks as a result of our direct interest in the Preferred Interests of the 2015-1
Issuer.

As part of the 2015-1 Debt Securitization, certain first and second lien senior
secured loans were distributed by the SPV to us pursuant to a distribution and contribution agreement. We contributed the loans that comprised



38



---

##### Table of Contents

the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution
agreement. Following this transfer, the 2015-1 Issuer held all of the equity ownership interest in such loan portfolio. As a result, we received 100% of the Preferred Interests issued by the 2015-1 Issuer in exchange for our contribution to the 2015-1 Issuer of the initial closing date loan portfolio. The 2015-1 Notes are
included in the consolidated financial statements and the Preferred Interests are eliminated in consolidation.

Because each of the SPV
and the 2015-1 Issuer is disregarded as an entity separate from its owner for U.S. federal income tax purposes, the sale or contribution by the SPV to us and the sale or contribution by us to the 2015-1 Issuer did not constitute a taxable event for U.S. federal income tax purposes. If the U.S. Internal Revenue Service were to take a contrary position, there could be a material adverse effect on our business,
financial condition, results of operations or cash flows.

The Preferred Interests in the 2015-1 Issuer are
subordinated obligations of the 2015-1 Issuer.

The
2015-1 Issuer is the residual claimant on funds, if any, remaining after holders of all classes of 2015-1 Notes have been paid in full on each payment date or upon
maturity of the 2015-1 Notes under the 2015-1 Debt Securitization documents. The Preferred Interests in the 2015-1 Issuer
represent all of the equity interest in the 2015-1 Issuer and, as the holder of the Preferred Interests, we may receive distributions, if any, only to the extent that the
2015-1 Issuer makes distributions out of funds remaining after holders of all classes of 2015-1 Notes have been paid in full on each payment date any amounts due and
owing on such payment date or upon maturity of the 2015-1 Notes. There is no guarantee that we will receive any distributions as the holders of the Preferred Interests.

The 2015-1 Issuer may fail to meet certain asset coverage tests.

Under the documents governing the 2015-1 Debt Securitization, there are two coverage tests applicable
to the 2015-1 Notes.

The first such test compares the amount of interest received on the
portfolio loans held by the 2015-1 Issuer to the amount of interest payable in respect of the 2015-1 Notes. To meet this first test, interest received on the portfolio
loans must equal at least 120% of the interest payable in respect of the 2015-1 Notes issued by the 2015-1 Issuer.

The second such test compares the adjusted collateral principal amount of the portfolio loans of the
2015-1 Debt Securitization to the aggregate outstanding principal amount of the 2015-1 Notes. To meet this second test at any time, the adjusted collateral principal
amount of the portfolio loans must equal at least 140% of the outstanding principal amount of the 2015-1 Notes.

If any coverage test with respect to the 2015-1 Notes is not met, proceeds from the portfolio of loans
that otherwise would have been distributed to the holders of the Preferred Interests of 2015-1 Issuer will instead be used to redeem first the 2015-1 Notes, to the
extent necessary to satisfy the applicable asset coverage tests on a pro forma basis after giving effect to all payments made in respect of the 2015-1 Notes, which we refer to as a mandatory redemption, or to
obtain the necessary ratings confirmation. There is no guarantee that the 2015-1 Notes will meet either of these coverage tests, and thus, we may not receive distributions as the holders of the Preferred
Interests.

We may not receive cash from the 2015-1 Issuer.

We receive cash from the 2015-1 Issuer only to the extent of payments on the distributions, if any,
with respect to the Preferred Interests of the 2015-1 Issuer as permitted under the 2015-1 Debt Securitization. The 2015-1 Issuer
may only make payments on Preferred Interests to the extent permitted by the payment priority



39



---

##### Table of Contents

provisions of the indenture governing the 2015-1 Notes (the 2015-1 Indenture), as applicable, which
generally provide, distribution to Preferred Interests holder may not be made on any payment date unless all amounts owing under the 2015-1 Notes are paid in full. There is no guarantee that we will receive
any distributions as the holders of the Preferred Interests.

In addition, if the 2015-1 Issuer
does not meet the asset coverage tests or the interest coverage test set forth in the documents governing the 2015-1 Debt Securitization, cash would be diverted to first pay the
2015-1 Notes in amounts sufficient to cause such tests to be satisfied. Even if we do not receive cash directly from the 2015-1 Issuer, such amount will still be treated
as income subject to our requirement to distribute 90% of our net investment income to our shareholders. Therefore, in the event that we fail to receive cash directly from the 2015-1 Issuer, we could be unable
to make such distributions in amounts sufficient to maintain our status as a RIC for U.S. federal income tax purposes, or at all.

We may be
required to assume liabilities of the 2015-1 Issuer and are indirectly liable for certain representations and warranties in connection with the 2015-1 Debt
Securitization.

As part of the 2015-1 Debt Securitization, we entered into a contribution
agreement under which we are required to repurchase any loan (or participation interest therein) which was sold to the 2015-1 Issuer, in breach of any representation or warranty made by us with respect to such
loan on the date such loan was sold. To the extent we fail to satisfy any such repurchase obligation, the trustee of the 2015-1 Debt Securitization may, on behalf of the
2015-1 Issuer, bring an action against us to enforce these repurchase obligations.

The structure
of the 2015-1 Debt Securitization is intended to prevent, in the event of our bankruptcy, the consolidation of the 2015-1 Issuer with our operations. If the true sale of
the assets in the 2015-1 Debt Securitization were not respected in the event of our insolvency, a trustee or debtor-in-possession
might reclaim the assets of the 2015-1 Issuer for our estate. However, in doing so, we would become directly liable for all of the indebtedness then outstanding under the
2015-1 Debt Securitization, which would equal the full amount of debt of the 2015-1 Issuer reflected on our consolidated balance sheet.

In addition, in connection with 2015-1 Debt Securitization, the Company has made customary
representations, warranties and covenants to the 2015-1 Issuer. We remain liable for any breach of such representations for the life of the 2015-1 Debt Securitization.

The interests of holders of the 2015-1 Notes issued by the 2015-1
Issuer may not be aligned with our interests.

The 2015-1 Notes are the debt obligations
ranking senior in right of payment to the Preferred Interests holders. As such, there are circumstances in which the interests of holders of the 2015-1 Notes may not be aligned with the interests of the
Preferred Interests of the 2015-1 Issuer. For example, under the terms of the 2015-1 Issuer, holders of the 2015-1 Notes have the
right to receive payments of principal and interest prior to distribution to the holders of the Preferred Interests of the 2015-1 Issuer.

For as long as the 2015-1 Notes remain outstanding, holders of the
2015-1 Notes have the right to act, in certain circumstances, with respect to the portfolio loans in ways that may benefit their interests but not the interests of holders of the Preferred Interests of the 2015-1 Issuer, including by exercising remedies under the 2015-1 Indenture.

If an event of default has occurred and acceleration occurs in accordance with the terms of the 2015-1
Indenture, the 2015-1 Notes then outstanding will be paid in full before any further payment or distribution to the Preferred Interests. In addition, if an event of default occurs, holders of a majority of the
2015-1 Notes then outstanding will be entitled to determine the remedies to be exercised under the 2015-1 Indenture, subject to the terms of the 2015-1 Indenture. For example, upon the occurrence of an event of default with respect to the notes issued by the 2015-1 Issuer, the trustee or holders of a majority of the 2015-1 Notes then outstanding may declare



40



---

##### Table of Contents

the principal, together with any accrued interest, of all the 2015-1 Notes to be immediately due and payable. This would have the effect of accelerating
the principal on such notes, triggering a repayment obligation on the part of the 2015-1 Issuer. If at such time the portfolio loans of the 2015-1 Issuer were not
performing well, the 2015-1 Issuer may not have sufficient proceeds available to enable the trustee under the 2015-1 Indenture to pay a distribution to holders of the
Preferred Interests of the 2015-1 Issuer.

Remedies pursued by the holders of the 2015-1 Notes could be adverse to the interests of the holders of the Preferred Interests, and the holders of the 2015-1 Notes have no obligation to consider any possible
adverse effect on such other interests. Thus, any remedies pursued by the holders of the 2015-1 Notes may not be in our best interests and we may not receive payments or distributions upon an acceleration of
the 2015-1 Notes. Any failure of the 2015-1 Issuer to make distributions on Preferred Interests we hold, directly or indirectly, whether as a result of an event of
default or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows and may result in an inability of us to make distributions sufficient to allow for us to qualify as a RIC for U.S.
federal income tax purposes.

If we have not consummated a Qualified IPO by May 2, 2018, it could result in an early optional redemption of the
2015-1 Notes.

If we have not consummated a Qualified IPO by May 2, 2018, then our
Board of Directors (subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) will use its best efforts to wind-down and/or liquidate and dissolve us. If this were to occur, it would likely result in
us using our rights, as a holder of the Preferred Interests to effect an optional redemption of the 2015-1 Notes. If at such time the portfolio loans of the 2015-1
Issuer were not performing well, the 2015-1 Issuer may not have sufficient proceeds available to enable the trustee under the 2015-1 Indenture to pay a distribution to
holders of the Preferred Interests of the 2015-1 Issuer.

To the extent we use additional structured
financing vehicles, we could be subject to heightened risk versus holding direct investments in underlying portfolio companies.

To
finance investments, we may continue to securitize certain of our investments, including through the formation of one or more additional CLOs, while retaining all or most of the exposure to the performance of these investments. This would involve
contributing a pool of assets to a special purpose entity, and selling debt interests in such entity on a non-recourse or limited-recourse basis to purchasers. Any interest in any such CLO held by the Company
may be considered a non-qualifying asset for purposes of Section 55 of the Investment Company Act.

If we create another CLO, we will likely depend on distributions from the CLOs assets out of its earnings and cash flows to enable us to
make distributions to our stockholders. The ability of a CLO to make distributions or pay dividends will be subject to various limitations, including the terms and covenants of the debt it issues. For example, tests (based on interest coverage or
other financial ratios or other criteria) may restrict our ability, as holder of a CLOs equity interests, to receive cash flow from these investments. There is no assurance any such performance tests will be satisfied. Also, a CLO may take
actions that delay distributions in order to preserve ratings and to keep the cost of present and future financings lower or the CLO may be obligated to retain cash or other assets to satisfy over-collateralization requirements commonly provided for
holders of the CLOs debt. As a result, there may be a lag, which could be significant, between the repayment or other realization on a loan or other assets in, and the distribution of cash out of, a CLO, or cash flow may be completely
restricted for the life of the CLO.

In addition, a decline in the credit quality of loans in a CLO due to poor operating results of the
relevant borrower, declines in the value of loan collateral or increases in defaults, among other things, may force a CLO to sell certain assets at a loss, reducing their earnings and, in turn, cash potentially available for distribution to us for
distribution to our stockholders.



41



---

##### Table of Contents

To the extent that any losses are incurred by the CLO in respect of any collateral, such losses
will be borne first by us as owner of equity interests. Finally, any equity interests that we retain in a CLO will not be secured by the assets of the CLO and we will rank behind all creditors of the CLO.

Risks Related to Our Investments

Our portfolio
companies may prepay loans, which may have the effect of reducing our investment income if the returned capital cannot be invested in transactions with equal or greater yields.

Loans are generally prepayable at any time, most of them at no premium to par. We are generally unable to predict the rate and frequency of
such repayments. Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions that allow such portfolio company the ability to replace existing
financing with less expensive capital. In periods of rising interest rates, the risk of prepayment of floating rate loans may increase if other financing sources are available. As market conditions change frequently, we will often be unable to
predict when, and if, this may be possible for each of our portfolio companies. In the case of some of these loans, having the loan called early may have the effect of reducing our actual investment income below our expected investment income if the
capital returned cannot be invested in transactions with equal or greater yields.

The financial projections of our portfolio companies could prove
inaccurate.

We generally evaluate the capital structure of portfolio companies on the basis of financial projections prepared by
the management of such portfolio companies. These projected operating results are normally based primarily on judgments of the management of the portfolio companies. In all cases, projections are only estimates of future results that are based upon
assumptions made at the time that the projections are developed. General economic conditions, which are not predictable with accuracy, along with other factors may cause actual performance to fall short of the financial projections that were used to
establish a given portfolio companys capital structure. Because of the leverage that is typically employed by our portfolio companies, this could cause a substantial decrease in the value of our investment in the portfolio company. The
inaccuracy of financial projections could thus cause our performance to fall short of our expectations.

Our portfolio securities typically do not
have a readily available market price and, in such a case, we will value these securities at fair value as determined in good faith under procedures adopted by our Board of Directors, which valuation is inherently subjective and may not reflect what
we may actually realize from the sale of the investment.

Substantially all of our portfolio investments are in the form of debt
investments that are not publicly traded. The fair value of these securities is not readily determinable, and the due diligence process that our Investment Adviser undertakes in connection with our investments may not reveal all the facts that may
be relevant in connection with such investment. We value these investments on at least a quarterly basis in accordance with our valuation policy, which is at all times consistent with accounting principles generally accepted in the
United States (US GAAP). Our Board of Directors utilizes the services of a third-party valuation firm to aid it in determining the fair value of these investments as well as the recommendations of our Investment Advisors
investment professionals, which are based upon the most recent portfolio company financial statements available and projected financial results of each portfolio company. The Board of Directors discusses valuations and determines the fair value in
good faith based on the input of our Investment Adviser and the third-party valuation firm. The participation of our Investment Adviser in our valuation process, and the indirect pecuniary interest in our Investment Adviser by the interested
directors on our Board of Directors, could result in a conflict of interest, since the management fee is based on our gross assets and also because our Investment Adviser is receiving performance-based incentive fees.

The factors that are considered in the fair value pricing of our investments include the nature and realizable value of any collateral, the
portfolio companys ability to make payments and its earnings, the markets in which



42



---

##### Table of Contents

the portfolio company does business, comparisons to publicly traded companies, discounted cash flow, relevant credit market indices, and other relevant factors. When an external event such as a
purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate our valuation. Because such valuations, and particularly valuations of private investments and private
companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities
existed. Also, since these valuations are, to a large extent, based on estimates, comparisons and qualitative evaluations of private information, it could make it more difficult for investors to value accurately our investments and could lead to
undervaluation or overvaluation of our common stock. In addition, the valuation of these types of securities may result in substantial write-downs and earnings volatility. If our Investment Adviser is unable to uncover all material information about
these companies, we may not make a fully informed investment decision, and we may lose money on our investments. Also, privately held companies frequently have less diverse product lines and smaller market presence than larger competitors.

Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. The effect of all of these factors
on our portfolio can reduce our net asset value by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer unrealized losses, which could have a material
adverse impact on our business, financial condition and results of operations.

Our net asset value as of a particular date may be
materially greater than or less than the value that would be realized if our assets were to be liquidated as of such date. For example, if we were required to sell a certain asset or all or a substantial portion of its assets on a particular date,
the actual price that we would realize upon the disposition of such asset or assets could be materially less than the value of such asset or assets as reflected in our net asset value. Volatile market conditions could also cause reduced liquidity in
the market for certain assets, which could result in liquidation values that are materially less than the values of such assets as reflected in our net asset value.

Our investments are risky and speculative.

We invest primarily in loans to middle market companies whose debt, if rated, is rated below investment grade and, if not rated, would likely
be rated below investment grade if it were rated. Investments rated below investment grade are generally considered higher risk than investment grade instruments. Bonds that are rated below investment grade are sometimes referred to as high
yield bonds or junk bonds.

First Lien Senior Secured Loans. When we make a senior secured term loan investment
in a portfolio company, we generally take a security interest in substantially all of the available assets of the portfolio company, including the equity interests of its domestic subsidiaries, which we expect to help mitigate the risk that we will
not be repaid. However, there is a risk that the collateral securing our loans may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the
business and market conditions, including as a result of the inability of the portfolio company to raise additional capital, and, in some circumstances, our lien could be subordinated to claims of other creditors. In addition, deterioration in a
portfolio companys financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan. Consequently, the fact that a loan is secured does not
guarantee that we will receive principal and interest payments according to the loans terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our remedies.

Unitranche Loans. Unitranche loans provide leverage levels comparable to a combination of first lien and second lien or subordinated
loans, and may rank junior to other debt instruments issued by the portfolio company. Unitranche loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a heightened risk of loss if
the borrower is unable to pay the lump sum or refinance the amount owed at maturity. From the perspective of a lender, in addition to making a single loan, a



43



---

##### Table of Contents

unitranche loan may allow the lender to choose to participate in the first out tranche, which will generally receive priority with respect to payments of principal, interest and any
other amounts due, or to choose to participate only in the last out tranche, which is generally paid after the first out tranche is paid. We participate in first out and last out tranches of unitranche loans and
make single unitranche loans.

Second Lien Senior Secured Loans and Junior Debt Investments. Our second lien senior secured loans
are subordinated to first lien loans and our junior debt investments, such as mezzanine loans, generally are subordinated to both first lien and second lien loans and have junior security interests or may be unsecured. As such, to the extent we hold
second lien senior secured loans and junior debt investments, holders of first lien loans may be repaid before us in the event of a bankruptcy or other insolvency proceeding. This may result in an above average amount of risk and loss of principal.

Equity Investments. When we invest in loans, we may acquire equity securities as well. In addition, we may invest directly in the
equity securities of portfolio companies. Our goal is ultimately to dispose of such equity interests and realize gains upon our disposition of such interests. However, the equity interests we receive may not appreciate in value and, in fact, may
decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

In addition, investing in middle market companies involves a number of significant risks, including:



| |  |  | these companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a
reduction in the likelihood of us realizing on any guarantees or security we may have obtained in connection with our investment;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors actions and market conditions, as
well as general economic downturns;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material
adverse impact on a portfolio company and, in turn, on us;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | there is generally little public information about these companies. These companies and their financial information are usually not subject to the Exchange Act and other regulations that govern public companies, and we
may be unable to uncover all material information about these companies, which may prevent us from making a fully informed investment decision and cause us to lose money on our investments;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may
require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, our executive officers, directors and our Investment Adviser may, in the ordinary course of business, be named
as defendants in litigation arising from our investments in the portfolio companies;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in laws and regulations, as well as their interpretations, may adversely affect their business, financial structure or prospects; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | they may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness upon maturity.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.

A number of entities compete with us to make the types of investments that we target in middle market companies. We compete with
other BDCs, public and private funds, commercial and investment banks,



44



---

##### Table of Contents

commercial finance companies, and, to the extent they provide an alternative form of financing, private equity funds, some of which may be affiliates of us. Many of our competitors are
substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of
our competitors may have higher risk tolerances or different risk assessments than we do, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not
subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. The competitive pressures we face may have a material adverse effect on our business, financial condition and results of operations. Also, as a result
of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment
objective.

We do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors may make
loans with interest rates that are comparable to or lower than the rates we offer. We may lose investment opportunities if we do not match our competitors pricing, terms and structure. However, if we match our competitors pricing, terms
and structure, we may experience decreased net interest income and increased risk of credit loss.

We may not replicate our historical performance
or the historical success of Carlyle.

We cannot provide any assurance that we will replicate our own historical performance, the
historical success of Carlyle or the historical performance of other companies that our Investment Adviser and our investment team advised in the past. Accordingly, our investment returns could be substantially lower than the returns achieved by the
Company in the past, other Carlyle managed funds or by other clients of our Investment Adviser. We can offer no assurance that our Investment Adviser will be able to continue to implement our investment objective with the same degree of success as
it has had in the past.

Our ability to enter into transactions with Carlyle and our other affiliates is restricted.

We and certain of our controlled affiliates are prohibited under the Investment Company Act from knowingly participating in certain
transactions with our upstream affiliates, or our Investment Adviser and its affiliates, without the prior approval of our Independent Directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding
voting securities is our upstream affiliate for purposes of the Investment Company Act, and we are generally prohibited from buying or selling any security (other than our securities) from or to such affiliate, absent the prior approval of our
Independent Directors. The Investment Company Act also prohibits joint transactions with an upstream affiliate, or our Investment Adviser or its affiliates, which could include investments in the same portfolio company (whether at the
same or different times), without prior approval of our Independent Directors. In addition, we and certain of our controlled affiliates are prohibited from buying or selling any security from or to, or entering into joint transactions with, our
Investment Adviser and its affiliates, or any person who owns more than 25% of our voting securities or is otherwise deemed to control, be controlled by, or be under common control with us, absent the prior approval of the SEC through an exemptive
order (other than in certain limited situations pursuant to current regulatory guidance as described below). The analysis of whether a particular transaction constitutes a joint transaction requires a review of the relevant facts and circumstances
then existing.

As a BDC, we are required to comply with certain regulatory requirements. For example, we are not generally permitted to
make loans to companies controlled by Carlyle or other funds managed by Carlyle. We are also not permitted to make any co-investments with our Investment Adviser or its affiliates (including any fund managed
by Carlyle) without exemptive relief from the SEC, subject to certain exceptions. The SEC has granted us the Exemptive Relief that permits us and certain present and future funds advised by our Investment Adviser (or a future investment adviser
controlling, controlled by or under common control with our Investment Adviser) to co invest in suitable negotiated investments. Co investments made under the Exemptive Relief are subject to



45



---

##### Table of Contents

compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and our Investment Advisers allocation
procedures.

In addition to co-investing pursuant to our Exemptive Relief, we may invest alongside
affiliates or their affiliates in certain circumstances where doing so is consistent with applicable law and current regulatory guidance. For example, we may invest alongside such investors consistent with guidance promulgated by the SEC staff
permitting us and an affiliated person to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that we negotiate no term other than price. We may, in certain cases, also make
investments in securities owned by affiliates that we acquire from non-affiliates. In such circumstances, our ability to participate in any restructuring of such investment or other transaction involving the
issuer of such investment may be limited, and as a result, we may realize a loss on such investments that might have been prevented or reduced had we not been restricted in participating in such restructuring or other transaction.

To the extent we make investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional
direct investments in portfolio companies.

We may make investments in restructurings that involve, or otherwise invest in the debt
securities of, companies that are experiencing or are expected to experience severe financial difficulties. These severe financial difficulties may never be overcome and may cause such companies to become subject to bankruptcy proceedings. As such,
these investments could subject us to certain additional potential liabilities that may exceed the value of our original investment therein. For instance, under certain circumstances, payments to us and our distributions to stockholders may be
reclaimed if any such payment or distribution is later determined to have been a fraudulent conveyance, preferential payment or similar transaction under applicable bankruptcy and insolvency laws. Furthermore, investments in restructurings may be
adversely affected by statutes relating to, among other things, fraudulent conveyances, voidable preferences, lender liability and the courts discretionary power to disallow, subordinate or disenfranchise particular claims. Under certain
circumstances, a lender that has inappropriately exercised control of the management and policies of a debtor may have its claims subordinated or disallowed, or may be found liable for damages suffered by parties as a result of such actions. The
level of analytical sophistication, both financial and legal, necessary for successful financing to companies experiencing significant business and financial difficulties is unusually high.

The lack of liquidity in our investments may adversely affect our business.

We generally make investments in private companies. Substantially all of these investments are subject to legal and other restrictions on
resale or will otherwise be less liquid than publicly traded securities. The illiquidity of our investments may make it difficult for us to sell such investments if the need arises. In addition, if we are required to liquidate all or a portion of
our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our investments. In addition, we may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent
that we hold a significant portion of a companys equity or if we have material non-public information regarding such portfolio company.

Our ability to extend financial commitments may be limited.

The SEC has proposed a new Rule 18f-4 under the Investment Company Act that, if enacted in the form
proposed, could adversely impact the way we and other BDCs do business. In addition to imposing restrictions on the use of derivatives, the rule would generally limit our financial commitments to portfolio companies, together with our exposure to
other transactions involving senior securities entered into by us other than in reliance of the rule, to not more than 150 percent of our net asset value. We cannot assure you when or if the proposed rule will be adopted by the SEC, and if
adopted, whether the final rule will constrain our ability to extend financial commitments.



46



---

##### Table of Contents

Our portfolio may be concentrated in a limited number of portfolio companies and industries, which will
subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.

We are classified as a non-diversified investment company within the meaning of the Investment Company
Act, which means that we are not limited by the Investment Company Act with respect to the proportion of our assets that we may invest in securities of a single issuer, excluding limitations on investments in other investment companies. Although we
do not intend to focus our investments in any specific industries, our portfolio may be concentrated in a limited number of portfolio companies and industries. Beyond the asset diversification requirements associated with our qualification as a RIC
under Subchapter M of the Code and under the Facilities and 2015-1 Notes, we do not have fixed guidelines for diversification, and while we do not target any specific industries, our investments may be
concentrated in relatively few industries. As a result, the aggregate returns we will realize may be significantly adversely affected if a small number of investments perform poorly or if we need to write down the value of one or more investments.
Additionally, a downturn in any particular industry in which we are invested could also significantly impact our aggregate returns.

Our portfolio
companies may be highly leveraged.

Some of our portfolio companies may be highly leveraged, which may have adverse consequences to
these companies and to us as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies ability to finance their future operations and capital needs. As a result,
these companies flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged companys income and net assets will tend to increase or decrease at
a greater rate than if borrowed money were not used.

Leveraged companies may enter into bankruptcy proceedings at higher rates than companies that
are not leveraged and we invest in debt securities of these companies.

Leveraged companies, such as those in which we invest, may
be more prone to bankruptcy or similar financial distress. The bankruptcy process has a number of significant inherent risks. Many events in a bankruptcy proceeding are the product of contested matters and adversary proceedings and are beyond the
control of the creditors. A bankruptcy filing by a portfolio company may adversely and permanently affect the portfolio company. If the proceeding is converted to a liquidation, the value of the portfolio company may not equal the liquidation value
that was believed to exist at the time of the investment. The duration of a bankruptcy proceeding is also difficult to predict, and a creditors return on investment can be adversely affected by delays until the plan of reorganization or
liquidation ultimately becomes effective. The administrative costs of a bankruptcy proceeding are frequently high and would be paid out of the debtors estate prior to any return to creditors. Because the standards for classification of claims
under bankruptcy law are vague, our influence with respect to the class of securities or other obligations we own may be lost by increases in the number and amount of claims in the same class or by different classification and treatment. In the
early stages of the bankruptcy process, it is often difficult to estimate the extent of, or even to identify, any contingent claims that might be made. In addition, certain claims that have priority by law (for example, claims for taxes) may be
substantial.

The debt of companies in financial reorganization will, in most cases, not pay current interest, may not accrue interest
during reorganization and may be adversely affected by an erosion of the issuers fundamental value. To the extent we and an affiliate both hold investments in the same portfolio company that are of a different character, we may also face
restrictions on our ability to become actively involved in the event that portfolio company becomes distressed as a result of the restrictions imposed on transactions involving affiliates under the Investment Company Act. In such cases, we may be
unable to exercise rights we may otherwise have to protect our interests as security holders in such portfolio company.

In addition,
lenders can be subject to lender liability claims for actions taken by them where they become too involved in the borrowers business or exercise control over the borrower. For example, we could become



47



---

##### Table of Contents

subject to a lender liability claim (alleging that we misused our influence on the borrower for the benefit of its lenders), if, among other things, the borrower requests significant managerial
assistance from us and we provide that assistance.

Our failure to make follow-on investments in our
portfolio companies could impair the value of our investments.

Following an initial investment in a portfolio company, we may make
additional investments in that portfolio company as follow-on investments to:



| |  |  | increase or maintain in whole or in part our equity ownership percentage;
| | - |  | -------------------------------------------------------------------------



| |  |  | exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | attempt to preserve or enhance the value of our investment.
| | - |  | -----------------------------------------------------------

We may elect not to make follow-on investments, may be constrained in our ability to employ available funds, or otherwise may lack sufficient funds to make those investments. We have the discretion to make any
follow-on investments, subject to the availability of capital resources. However, doing so could be placing even more capital at risk in existing portfolio companies.

The failure to make follow-on investments may, in some circumstances, jeopardize the continued
viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful investment. Even if we have sufficient capital to make a desired
follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our concentration of risk, because we prefer other
opportunities or because we are inhibited by compliance with BDC requirements or the desire to maintain our tax status.

Declines in the prices of
corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.

As a BDC, we are required to account for our investments at market value or, if no market value is ascertainable, at fair value as determined
in good faith by or under the direction of our Board of Directors. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. Depending on market conditions, we may face similar losses, which could
reduce our net asset value and have a material adverse impact on our business, financial condition and results of operations.

Because we generally
do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our
investments.

Although we may do so in the future, currently we do not intend to hold controlling equity positions in our portfolio
companies. Accordingly, we may not be able to control decisions relating to a minority equity investment, including decisions relating to the management and operation of the portfolio company and the timing and nature of any exit. As a result, we
are subject to the risk that a portfolio company may make business decisions with which we disagree, and that the management and/or stockholders of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to
the lack of liquidity of the investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company and may therefore suffer a decrease in the
value of our investments. If any of the foregoing were to occur, our financial condition, results of operations and cash flow could suffer as a result.



48



---

##### Table of Contents

Our portfolio companies may incur debt that ranks equally with, or senior to, some of our investments in
such companies.

We invest primarily in middle market senior loans issued by our portfolio companies. To the extent we invest in
second lien, mezzanine or other instruments, our portfolio companies typically may be permitted to incur other debt that ranks equally with, or senior to, such debt instruments. By their terms, such debt instruments may provide that the holders are
entitled to receive payment of interest or principal on or before the dates on which we will be entitled to receive payments in respect of the debt securities in which we invest. Also, in the event of insolvency, liquidation, dissolution,
reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our
investment. In such cases, after repaying such senior creditors, such portfolio company may not have sufficient remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities in which we invest,
we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

The rights we may have with respect to the collateral securing the debt investments we make in our portfolio companies with senior debt
outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under such an intercreditor agreement, at any time that obligations that have the benefit of the first
priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens: the ability to cause the commencement of
enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents.
We may not have the ability to control or direct such actions, even if our rights are adversely affected.

We may also make unsecured
loans to portfolio companies, meaning that such loans will not benefit from any interest in collateral of such companies. Liens on such portfolio companies collateral, if any, will secure the portfolio companys obligations under its
outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and
be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the
availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all secured loan obligations. If such
proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors claims against the portfolio companys remaining assets, if
any.

Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.

Our investment strategy contemplates investments in debt securities of foreign companies. Investing in foreign companies may expose us to
additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less
available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of
uniform accounting and auditing standards and greater price volatility. As a result of investing in foreign securities, we may be subject to withholding and other foreign taxes with respect to those securities. We do not expect to satisfy the
conditions necessary to pass through to our stockholders their share of the foreign taxes paid by us. In addition, interest income derived from loans to foreign companies is not eligible to be distributed to our
non-U.S. stockholders free from U.S. withholding tax.



49



---

##### Table of Contents

Although most of our investments are expected to be U.S. dollar-denominated, any investments
denominated in a foreign currency will be subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of
short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation, and political developments. We may employ hedging techniques to minimize these
risks, but we can offer no assurance that we will, in fact, hedge currency risk, or that if we do, such strategies will be effective.

We may expose
ourselves to risks if we engage in hedging transactions.

If we engage in hedging transactions, we may expose ourselves to risks
associated with such transactions. We may utilize instruments such as forward contracts, credit default swaps, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our
portfolio positions from changes in currency exchange rates, credit risk premiums, and market interest rates. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such
positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such
hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. It may not be possible to hedge against an exchange rate or interest rate fluctuation at an acceptable price that is
generally anticipated. The success of any hedging transactions we may enter into will depend on our ability to correctly predict movements in currencies and interest rates. Therefore, while we may enter into such transactions to seek to reduce
currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the
degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation
between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the effect of the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully
or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related
to currency fluctuations. Income derived from hedging transactions is generally not eligible to be distributed to non-U.S. stockholders free from U.S. withholding tax. We may determine not to hedge against
particular risks, including if we determine that available hedging transactions are not available at an appropriate price.

Risks Related to an
Investment in Our Securities

Investing in our common stock may involve a high degree of risk.

The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options
and volatility or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive, and therefore an investment in our common stock may not be suitable for someone with lower risk tolerance.

Investors in the Private Offering are subject to transfer restrictions.

We have issued equity securities in connection with the private offering of our shares of common stock to investors in reliance on exemptions
from the registration requirements of the Securities Act, and other applicable securities laws (the Private Offering). Prior to the completion of a Qualified IPO, investors who participate in the Private Offering may not sell, assign,
transfer or otherwise dispose of (in each case, a Transfer) any common stock unless (i) we give consent and (ii) the Transfer is made in accordance with applicable securities laws. No Transfer will be effectuated except by
registration of the Transfer on our books. Each transferee must



50



---

##### Table of Contents

agree to be bound by these restrictions and all other obligations as an investor in us. Following completion of a Qualified IPO, investors will be restricted from selling or disposing of their
shares of common stock contractually by a lock-up agreement with the underwriters of the IPO and secondary offerings, and by the terms of the subscription agreement entered into by the Company and each
investor in connection with the Private Offering. It is possible that, once we are no longer accepting new commitments, we may seek to implement a program intended to provide limited liquidity and price discovery to holders of our common stock
through an auction process; however, there can be no assurance that such a program will, in fact, be established or, if established, will provide meaningful levels of liquidity. In the event we implement such a program, investors would be subject to
conditions and limitations on Transfers of our common stock made through the program.

Stockholders may be subject to filing requirements under the
Exchange Act as a result of an investment in us.

Because our common stock is registered under the Exchange Act, ownership
information for any person who beneficially owns 5% or more of our common stock must be disclosed in a Schedule 13D or other filings with the SEC. Beneficial ownership for these purposes is determined in accordance with the rules of the SEC, and
includes having voting or investment power over the securities. In some circumstances, investors who choose to reinvest their dividends may see their percentage stake in us increased to more than 5%, thus triggering this filing requirement. Although
we provide in our quarterly financial statements the amount of outstanding stock and the amount of the investors stock, the responsibility for determining the filing obligation and preparing the filing remains with the investor. In addition,
owners of 10% or more of our common stock are subject to reporting obligations under Section 16(a) of the Exchange Act.

Stockholders may be
subject to the short-swing profits rules under the Exchange Act as a result of an investment in us.

Persons with the right to
appoint a director or who hold 10% or more of a class of our shares may be subject to Section 16(b) of the Exchange Act, which recaptures for the benefit of the issuer profits from the purchase and sale of registered stock within a six-month period.

If we complete a Qualified IPO, our shares may trade at a discount to net asset value, which
could make raising capital more difficult.

As disclosed in connection with the Private Offering and in our prior filings with the
SEC, if we have not consummated a Qualified IPO of our common stock by May 2, 2018, then our Board of Directors (subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) will use its best efforts
to wind down and/or liquidate and dissolve us. There can be no assurance that we will be able to complete a Qualified IPO or that if completed, shares will trade above NAV. Shares of companies offered in an initial public offering often trade at a
discount to the initial offering price due to underwriting discounts and related offering expenses. Also, shares of closed-end investment companies, including BDCs, frequently trade at a discount from NAV and
our common stock may also be discounted in the market, which could make capital raising more difficult as BDCs are generally not permitted to issue shares at below NAV.

Once we have consummated a Qualified IPO, our commitment period will expire and our stockholders outstanding commitments will be
cancelled. In addition, the waiver of 0.50% of the base management fees by our Investment Adviser, will expire and base management fee will be 1.5% on average gross assets (including assets acquired through the incurrence of debt, excluding cash and
cash equivalents and adjusted for share issuances or repurchases).

If we cannot complete a Qualified IPO, we will seek to wind down and/or
liquidate and dissolve the Company, which could result in decreasing income over time, a declining asset base and an increase in our expenses as a percentage or our total assets.

Although we expect to complete a Qualified IPO prior to May 2, 2018, there can be no assurance that we will do so. If we have not consummated a Qualified
IPO of our common stock by May 2, 2018, then our Board of



51



---

##### Table of Contents

Directors (subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) will use its best efforts to wind down and/or liquidate and dissolve the
Company. That will require us to seek to dispose of our portfolio for which there is no trading market. Accordingly, disposition of these assets would take time. In addition, if we are in liquidation, potential counterparties may seek to offer us
less than we believe our investments are worth, which could result in us experiencing losses or otherwise receiving less than the amount at which we have valued our investments. In addition, if we begin to liquidate our portfolio, our total assets
and investment income will decrease and while certain of our expenses will also decrease, we expect that our expenses as a percentage of our assets will increase.

There is a risk that our stockholders may not receive distributions or that our distributions may not grow over time.

We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you
that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. If we declare
a dividend and if enough stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash dividend payments. In addition, due to the
asset coverage test applicable to us as a BDC, we may be limited in our ability to make distributions. The Facilities may also limit our ability to declare dividends if we default under certain provisions. Further, if we invest a greater amount of
assets in equity securities that do not pay current dividends, it could reduce the amount available for distribution. See Part I, Item 1 of this Form 10-K BusinessDistribution Policy.
The above referenced restrictions on distributions may also inhibit our ability to make required interest payments to holders of our debt, which may cause a default under the terms of our debt agreements. Such a default could materially increase our
cost of raising capital, as well as cause us to incur penalties under the terms of our debt agreements.

Our stockholders may be required to pay
federal income taxes in excess of the cash dividends they receive.

We may distribute taxable dividends that are payable in cash or
shares of our common stock at the election of each stockholder. If too many stockholders elect to receive cash, each stockholder electing to receive cash would receive a pro rata amount of cash (with the balance of the distribution paid in stock).
In no event would any stockholder electing to receive cash receive less than 20% of his or her entire distribution in cash. For U.S. federal income tax purposes, the amount of a dividend paid in stock would be equal to the amount of cash that could
have been received instead of stock.

Stockholders receiving dividends in shares of our common stock would be required to include the full
amount of the dividend (including the portion payable in stock) as ordinary income (or, in certain circumstances, long-term capital gain) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a
result, stockholders may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales
proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S.
stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. In addition, if a significant number of our stockholders were to
determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price (if any) of our common stock. It is unclear whether and to what extent we will be able to pay taxable dividends
of the type described in this paragraph.

We may have difficulty paying our required distributions if we recognize taxable income before or without
receiving cash representing such income.

For U.S. federal income tax purposes, we will include in our taxable income certain
amounts that we have not yet received in cash, such as OID or accruals on a contingent payment debt instrument, which may occur if



52



---

##### Table of Contents

we receive warrants in connection with the origination of a loan or possibly in other circumstances or contracted PIK interest, which generally represents contractual interest added to the loan
balance and due at the end of the loan term. Such OID and PIK interest will be included in our taxable income before we receive any corresponding cash payments. We also may be required to include in our taxable income certain other amounts that we
will not receive in cash. The credit risk associated with the collectability of deferred payments may be increased as and when a portfolio company increases the amount of interest on which it is deferring cash payment through deferred interest
features. Our investments with a deferred interest feature may represent a higher credit risk than loans for which interest must be paid in full in cash on a regular basis. For example, even if the accounting conditions for income accrual are met,
the borrower could still default when our actual collection is scheduled to occur upon maturity of the obligation.

Because in certain
cases we may recognize taxable income before or without receiving cash representing such income, we may have difficulty making distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution Requirement
necessary for us to maintain our status as a RIC. Accordingly, we may need to sell some of our assets at times and/or at prices that we would not consider advantageous, we may need to raise additional equity or debt capital, or we may need to forego
new investment opportunities or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business) to enable us to make distributions to our stockholders that will be sufficient to
enable us to meet the Annual Distribution Requirement. If we are unable to obtain cash from other sources to meet the Annual Distribution Requirement, we may fail to qualify for the U.S. federal income tax benefits allowable to RICs and, thus,
become subject to a corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes). Alternatively, we may, with the consent of all our shareholders, designate an amount as a consent dividend (i.e., a deemed dividend).
In that case, although we would not distribute any actual cash to our shareholders, the consent dividend would be treated like an actual dividend under the Code for all U.S. federal income tax purposes. This would allow us to deduct the amount of
the consent dividend and our shareholders would be required to include that amount in income as if it were actually distributed. For additional discussion regarding the tax implications of a RIC, see Part I, Item 1 of this Form 10-K BusinessElection to be Taxed as a RIC.

Non-U.S. stockholders may be subject to withholding of U.S. federal income tax on dividends we pay.

Distributions of our investment company taxable income to a non-U.S. stockholder that are
not effectively connected with the non-U.S. stockholders conduct of a trade or business within the United States will be subject to withholding of U.S. federal income tax at a 30% rate (or lower rate
provided by an applicable income tax treaty) to the extent of our current or accumulated earnings and profits. Certain properly designated dividends are generally exempt from withholding of U.S. federal income tax, including certain dividends that
are paid in respect of our (i) qualified net interest income (generally, our U.S.-source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we or the non-U.S. stockholder are at least a 10% shareholder, reduced by expenses that are allocable to such income) or (ii) qualified short-term capital gains (generally, the excess of our net short-term capital
gain over our long-term capital loss for such taxable year), and certain other requirements were satisfied. No assurance can be given as to whether any of our distributions will be eligible for this exemption from withholding of U.S. federal income
tax or, if eligible, will be designated as such by us. See Part I, Item 1 of this Form 10-K BusinessElection to be Taxed as a RIC.

Item 1B. Unresolved Staff Comments

None.

Item 2.
Properties

We maintain our principal executive office at 520 Madison Avenue, 40th
Floor, New York, NY 10022. We do not own any real estate.



53



---

##### Table of Contents

Item 3. Legal Proceedings

The Company may become party to certain lawsuits in the ordinary course of business, including proceedings relating to the enforcement of our
rights under contracts with our portfolio companies. The Company is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 1 to the consolidated
financial statements in Part II, Item 8 of this Form 10-K.

Item 4. Mine
Safety Disclosures

Not applicable.



54



---

##### Table of Contents

PART II

Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
(dollar amounts in thousands, except per share data)

Market Information

Until the completion of a Qualified IPO, our outstanding common stock will be offered and sold in transactions exempt from registration under
the Securities Act under Section 4(2) and Regulation D, as well as under Regulation S under the Securities Act. There is no established public trading market for our common stock currently, nor can we give any assurance that one will
develop.

Holders

As of
March 21, 2017, there were approximately 1,682 holders of record of our common stock.

Distribution Policy

To the extent that we have taxable income available, we intend to distribute quarterly dividends to our stockholders. The amount of our
dividends, if any, will be determined by our Board of Directors. Any dividends to our stockholders will be declared out of assets legally available for distribution. We anticipate that our distributions will generally be paid from taxable earnings,
including interest and capital gains generated by our investment portfolio, and any other income, including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting
fees or other fees, that we receive from portfolio companies. However, if we do not generate sufficient taxable earnings during a year, all or part of a distribution may constitute a return of capital. The specific tax characteristics of our
dividends and other distributions will be reported to stockholders after the end of each calendar year.

We have elected to be treated,
and intend to continue to qualify annually, as a RIC. To maintain our qualification as a RIC, we must, among other things, distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term
capital losses, if any, to our stockholders on an annual basis. In order to avoid certain excise taxes imposed on RICs, we intend to distribute during each calendar year an amount at least equal to the sum of: (1) 98% of our ordinary income for
the calendar year; (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending on October 31 of the calendar year; and, (3) any undistributed ordinary
income and capital gain net income for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax less certain over-distributions in prior years. In addition, although we currently intend to
distribute realized net capital gains (i.e., net long term capital gains in excess of short term capital losses), if any, at least annually, we may in the future decide to retain such capital gains for investment, pay U.S. federal income tax on such
amounts at regular corporate tax rates, and elect to treat such gains as deemed distributions to stockholders. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, to the extent that we
issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our
borrowings.

We intend to make distributions in cash unless a stockholder elects to receive dividends and/or long-term capital gains
distributions in additional shares of common stock. See Dividend Reinvestment Planbelow. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and,
if we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our
borrowings.



55



---

##### Table of Contents

The following table summarizes the Companys dividends declared and payable since inception
through March 21, 2017:



|                   |  |                    |  |                   |  |                 |      |     |             |   |        |                             |  |  |      |  
|------------------ |  | ------------------ |  | ----------------- |  | --------------- | ---- | --- | ----------- | - | ------ | --------------------------- |  |  | ---- | -
|Date Declared      |  | RecordDate         |  | PaymentDate       |  | Per ShareAmount |      |     | TotalAmount |   |        | AnnualizedDividend Yield(1) | 
|March 13, 2014     |  | March 31, 2014     |  | April 14, 2014    |  | $               | 0.19 |     |             | $ | 2,449  |                             |  |  | 4.76 | %
|June 26, 2014      |  | June 30, 2014      |  | July 14, 2014     |  | $               | 0.27 |     |             | $ | 3,481  |                             |  |  | 5.52 | %
|September 12, 2014 |  | September 18, 2014 |  | October 9, 2014   |  | $               | 0.44 |     |             | $ | 5,956  |                             |  |  | 9.23 | %
|December 19, 2014  |  | December 29, 2014  |  | January 26, 2015  |  | $               | 0.35 |     |             | $ | 6,276  |                             |  |  | 8.17 | %
|March 11, 2015     |  | March 13, 2015     |  | April 17, 2015    |  | $               | 0.37 |     |             | $ | 7,833  |                             |  |  | 8.58 | %
|June 24, 2015      |  | June 30, 2015      |  | July 22, 2015     |  | $               | 0.37 |     |             | $ | 9,902  |                             |  |  | 9.03 | %
|September 24, 2015 |  | September 24, 2015 |  | October 22, 2015  |  | $               | 0.42 |     |             | $ | 11,670 |                             |  |  | 8.91 | %
|December 29, 2015  |  | December 29, 2015  |  | January 22, 2016  |  | $               | 0.40 |     |             | $ | 12,610 |                             |  |  | 8.97 | %
|December 29, 2015  |  | December 29, 2015  |  | January 22, 2016  |  | $               | 0.18 | (2) |             | $ | 5,674  |                             |  |  | 4.03 | %
|March 10, 2016     |  | March 14, 2016     |  | April 22, 2016    |  | $               | 0.40 |     |             | $ | 13,337 |                             |  |  | 9.26 | %
|June 8, 2016       |  | June 8, 2016       |  | July 22, 2016     |  | $               | 0.40 |     |             | $ | 13,943 |                             |  |  | 9.23 | %
|September 28, 2016 |  | September 28, 2016 |  | October 24, 2016  |  | $               | 0.40 |     |             | $ | 15,917 |                             |  |  | 9.37 | %
|December 29, 2016  |  | December 29, 2016  |  | January 24, 2017  |  | $               | 0.41 |     |             | $ | 17,098 |                             |  |  | 9.09 | %
|December 29, 2016  |  | December 29, 2016  |  | January 24, 2017  |  | $               | 0.07 | (2) |             | $ | 2,919  |                             |  |  | 1.55 | %
|March 20, 2017     |  | March 20, 2017     |  | April 24, 2017(3) |  | $               | 0.41 |     |             | $ | 17,100 |                             |  |  | 9.07 | %



|(1) | Annualized dividend yield is calculated by dividing the declared dividend by the weighted average of the net asset value at the beginning of the quarter and the capital called during the quarter and annualizing over 4
quarterly periods.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Represents a special dividend.
|--- | ------------------------------

|(3) | Payable on or about April 24, 2017.
|--- | -----------------------------------

Dividend Reinvestment Plan

The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders, for
those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and the Company declares a cash dividend or distribution, the stockholders who have elected to participate in the dividend
reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys common stock, rather than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly
issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan
so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the market value per share is less than the net asset
value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.

Recent Sales of Unregistered Securities and Use of Proceeds

Except as previously reported by the Company on its current reports on Form 8-K, the Company did not
sell any securities during the period covered by this Form 10-K that were not registered under the Securities Act.

Item 6. Selected Financial Data

The tables below set forth our selected consolidated historical financial data for the periods indicated. The selected consolidated historical
financial data as of and for the years ended December 31, 2016, 2015, 2014 and 2013 have been derived from our audited consolidated financial statements, which are included in Financial



56



---

##### Table of Contents

Statements and Supplementary Data in Part II, Item 8 of this Form 10-K. Our historical results are not necessarily indicative of future
results. The selected financial data in this section is not intended to replace the financial statements and is qualified in its entirety by the financial statements and related notes included in this filing.

The selected consolidated financial information and other data presented below should be read in conjunction with the information contained in
Part II, Item 7 of this Form 10-K Managements Discussion and Analysis of Financial Condition and Results of Operations, the audited consolidated financial statements and the notes
thereto in Part II, Item 8 of this Form 10-K, Financial Statements and Supplementary Data.



|                                                                    |  |                                 |         |   |      |   |         |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                    |  | For the years endedDecember 31, |        
|                                                                    |  | 2016                            |         |   | 2015 |   |         | 2014 |  |   | 2013   |  
|(dollar amounts in thousands, except per share data)                |  |                                 |         |   |      |   |         |      |  |   |        |  
|Consolidated Statements of Operations Data                          |  |                                 |         |   |      |   |         |      |  |   |        |   |  |   |        |  
|Income                                                              |  |                                 |         |   |      |   |         |      |  |   |        |   |  |   |        |  
|Total investment income                                             |  | $                               | 110,971 |   |      | $ | 69,190  |      |  | $ | 32,984 |   |  | $ | 4,969  |  
|Expenses                                                            |  |                                 |         |   |      |   |         |      |  |   |        |   |  |   |        |  
|Net expenses                                                        |  |                                 | 51,350  |   |      |   | 33,666  |      |  |   | 18,724 |   |  |   | 6,638  |  
|Net investment income (loss)                                        |  |                                 | 59,621  |   |      |   | 35,524  |      |  |   | 14,260 |   |  |   | (1,669 | )
|Net realized gain (loss) on investments                             |  |                                 | (9,644  | ) |      |   | 1,164   |      |  |   | 72     |   |  |   | 63     |  
|Net change in unrealized appreciation (depreciation) on investments |  |                                 | 19,832  |   |      |   | (18,015 | )    |  |   | (8,718 | ) |  |   | (321   | )
|Net increase (decrease) in net assets resulting from operations     |  |                                 | 69,809  |   |      |   | 18,673  |      |  |   | 5,614  |   |  |   | (1,927 | )
|Per Share Data                                                      |  |                                 |         |   |      |   |         |      |  |   |        |   |  |   |        |  
|Basic and diluted net investment income                             |  | $                               | 1.65    |   |      | $ | 1.43    |      |  | $ | 1.09   |   |  | $ | (0.55  | )
|Basic and diluted earnings                                          |  | $                               | 1.93    |   |      | $ | 0.75    |      |  | $ | 0.43   |   |  | $ | (0.64  | )
|Dividends declared (1)                                              |  | $                               | 1.68    |   |      | $ | 1.74    |      |  | $ | 1.25   |   |  | $ |       |  



|(1) | Cumulative per share dividends declared by the Companys Board of Directors for the years ended December 31, 2016, 2015 and 2014. Cumulative per share dividends declared by the Companys Board of
Directors for the years ended December 31, 2016 and 2015 included a special dividend of $0.07 and $0.18 per share, respectively. The Companys Board of Directors did not declare a dividend during the year ended December 31, 2013.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                         |  |                                           |           |   |      |   |           |      |  |   |         |   |  |   |         |   
|---------------------------------------------------------------------------------------- |  | ----------------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | ------- | - |  | - | ------- | --
|                                                                                         |  | As of and for the years endedDecember 31, |          
|                                                                                         |  | 2016                                      |           |   | 2015 |   |           | 2014 |  |   | 2013    |  
|(dollar amounts in thousands, except per share data)                                     |  |                                           |           |   |      |   |           |      |  |   |         |  
|Consolidated Statements of Assets and Liabilities Data                                   |  |                                           |           |   |      |   |           |      |  |   |         |   |  |   |         |   
|Investmentsnon-controlled/non-affiliated, at fair value                                 |  | $                                         | 1,323,102 |   |      | $ | 1,052,666 |      |  | $ | 698,662 |   |  | $ | 212,807 |   
|Investmentscontrolled/affiliated, at fair value                                         |  |                                           | 99,657    |   |      |   |          |      |  |   |        |   |  |   |        |   
|Cash and cash equivalents                                                                |  |                                           | 38,489    |   |      |   | 41,837    |      |  |   | 8,754   |   |  |   | 42,010  |   
|Total assets                                                                             |  |                                           | 1,490,155 |   |      |   | 1,104,032 |      |  |   | 716,720 |   |  |   | 260,967 |   
|Secured borrowings                                                                       |  |                                           | 421,885   |   |      |   | 234,313   |      |  |   | 308,441 |   |  |   | 66,822  |   
|2015-1 Notes payable                                                                     |  |                                           | 270,849   |   |      |   | 270,644   |      |  |   |        |   |  |   |        |   
|Total liabilities                                                                        |  |                                           | 726,018   |   |      |   | 532,306   |      |  |   | 378,463 |   |  |   | 74,965  |   
|Total net assets                                                                         |  |                                           | 764,137   |   |      |   | 571,726   |      |  |   | 338,257 |   |  |   | 186,002 |   
|Net assets per share                                                                     |  | $                                         | 18.32     |   |      | $ | 18.14     |      |  | $ | 18.86   |   |  | $ | 19.42   |   
|                                                                                         |  |                                           |           |  
|Other Data:                                                                              |  |                                           |           |   |      |   |           |      |  |   |         |   |  |   |         |   
|Number of portfolio companies/structured finance obligation/investment fund at year end  |  |                                           | 86        |   |      |   | 85        |      |  |   | 72      |   |  |   | 27      |   
|Average funded investments in new portfolio companies/structured finance obligations (1) |  |                                           | 12,188    |   |      |   | 12,996    |      |  |   | 10,597  |   |  |   | 6,751   |   
|Total return based on net asset value
(2)                                                |  |                                           | 10.25     | % |      |   | 5.41      | %    |  |   | 3.55    | % |  |   | (2.90   | %)



|(1) | Average is calculated per portfolio company based on the total amount funded during the period divided by the number of portfolio companies invested/structured finance obligations made during the period.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



57



---

##### Table of Contents

|(2) | Total return is based on the change in net asset value per share during the year plus the declared dividends, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the
beginning net asset value for the year. Total return for the years/periods ended December 31, 2016, 2015, 2014 and 2013 was inclusive of $0.01, $0.11, $0.09 and $0.32, respectively, per share increase in net asset value related to the offering
price of the Companys common stock. Excluding the effects of the higher offering price of the Companys common stock, total return would have been 10.20%, 4.83%, 3.09% and (4.50%), respectively (refer to Note 9 in Part II,
Item 8 of this Form 10-K for additional information).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Total return based on
change in net asset value for the year ended December 31, 2013 was calculated for the period from commencement of operations through December 31, 2013.

Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in
thousands, except per share data, unless otherwise indicated)

The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with Part I, Item 6 of this Form 10-K Selected Financial Data and our consolidated financial statements and related notes in Part II, Item 8
of this Form 10-K Financial Statements and Supplementary Data. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to
those described in Part I, Item 1A of this Form 10-K Risk Factors. Our actual results could differ materially from those anticipated by such forward-looking information due to factors
discussed under Risk Factors and Cautionary Statement Regarding Forward-Looking Statements appearing elsewhere in this Form 10-K.

OVERVIEW

We are a Maryland corporation
formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. We have elected to be regulated as a BDC under
the Investment Company Act. We have elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code.

Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market
companies, which we define as companies with approximately $10 million to $100 million of EBITDA. We seek to achieve its investment objective primarily through direct originations of Middle Market Senior Loans, with the balance of our
assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). We generally make Middle Market Senior Loans to private U.S. middle market companies that are, in many cases, controlled
by private equity firms. Depending on market conditions, we expect that between 70% and 80% of the value of our assets will be invested in Middle Market Senior Loans. We expect that the composition of our portfolio will change over time given our
Investment Advisers view on, among other things, the economic and credit environment (including with respect to interest rates) in which we are operating.

We are externally managed by our Investment Adviser, an investment adviser registered under the Advisers Act. Our Administrator provides the
administrative services necessary for us to operate. Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle.

In conducting our investment activities, we believe that we benefit from the significant scale and resources of Carlyle, including our
Investment Adviser and its affiliates. We have operated our business as a BDC since we began our investment activities in May 2013.



58



---

##### Table of Contents

KEY COMPONENTS OF OUR RESULTS OF OPERATIONS

Investments

Our level of
investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle market companies, the general economic environment and the competitive environment for the type of
investments we make.

Revenue

We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on
direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a
floating rate usually determined on the basis of a benchmark such as LIBOR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the
outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also
reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.

Expenses

Our primary operating
expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to an investment advisory agreement (the Investment Advisory Agreement) between us
and our Investment Adviser; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under an administration agreement (the Administration
Agreement) between us and our Administrator; and (iii) other operating expenses as detailed below:



| |  |  | the costs associated with the Private Offering;
| | - |  | -----------------------------------------------



| |  |  | the costs of any other offerings of our common stock and other securities, if any;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio
companies and, if necessary, expenses of enforcing our rights;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the base management fee and any incentive fee payable under our Investment Advisory Agreement;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | certain costs and expenses relating to distributions paid on our shares;
| | - |  | ------------------------------------------------------------------------



| |  |  | administration fees payable under our Administration Agreement and sub-administration agreements, including related expenses;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | debt service and other costs of borrowings or other financing arrangements;
| | - |  | ---------------------------------------------------------------------------



| |  |  | the allocated costs incurred by our Investment Adviser in providing managerial assistance to those portfolio companies that request it;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | amounts payable to third parties relating to, or associated with, making or holding investments;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | transfer agent and custodial fees;
| | - |  | ----------------------------------



59



---

##### Table of Contents

| |  |  | costs of hedging;
| | - |  | -----------------



| |  |  | commissions and other compensation payable to brokers or dealers;
| | - |  | -----------------------------------------------------------------



| |  |  | federal and state registration fees;
| | - |  | ------------------------------------



| |  |  | any U.S. federal, state and local taxes, including any excise taxes;
| | - |  | --------------------------------------------------------------------



| |  |  | independent director fees and expenses;
| | - |  | ---------------------------------------



| |  |  | costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the
SEC (or other regulatory bodies), and other reporting and compliance costs, including registration and listing fees, and the compensation of professionals responsible for the preparation or review of the foregoing;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders meetings and the compensation of investor relations personnel
responsible for the preparation of the foregoing and related matters;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the costs of specialty and custom software for monitoring risk, compliance and overall portfolio, including any development costs incurred prior to the filing of our election to be regulated as a BDC;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our fidelity bond;
| | - |  | ------------------



| |  |  | directors and officers/errors and omissions liability insurance, and any other insurance premiums;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | indemnification payments;
| | - |  | -------------------------



| |  |  | direct fees and expenses associated with independent audits, agency, consulting and legal costs; and
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of
asset growth and to increase during periods of asset declines.



60



---

##### Table of Contents

PORTFOLIO AND INVESTMENT ACTIVITY

As of December 31, 2016, the fair value of our investments was approximately $1,422,759, comprised of 86 portfolio companies/structured
finance obligations/investment fund. As of December 31, 2015, the fair value of our investments was approximately $1,052,666, comprised of 85 portfolio companies/structured finance obligations. The fair value of our investments was
approximately $698,662, comprised of 72 portfolio companies/structured finance obligations as of December 31, 2014.

Our investment
activity for the years ended December 31, 2016, 2015 and 2014 is presented below (information presented herein is at amortized cost unless otherwise indicated):



|                                                                     |  |                                 |           |   |      |   |           |      |  |   |          |  
|-------------------------------------------------------------------- |  | ------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | -------- | -
|                                                                     |  | For the years endedDecember 31, |          
|                                                                     |  | 2016                            |           |   | 2015 |   |           | 2014 | 
|Investments:                                                         |  |                                 |           |   |      |   |           |      |  |   |          |  
|Total Investments as of January 1                                    |  | $                               | 1,079,720 |   |      | $ | 707,701   |      |  | $ | 213,128  |  
|New Investments purchased                                            |  |                                 | 755,654   |   |      |   | 597,811   |      |  |   | 614,622  |  
|Net accretion of discount on investments                             |  |                                 | 5,605     |   |      |   | 3,035     |      |  |   | 1,108    |  
|Net realized gain (loss) on investments                              |  |                                 | (9,644    | ) |      |   | 1,164     |      |  |   | 72       |  
|Investments sold or repaid                                           |  |                                 | (401,354  | ) |      |   | (229,991  | )    |  |   | (121,229 | )
|                                                                     |  |                                 |           |   |      |   |           |      |  |   |          |  
|Total Investments as of December 31                                  |  | $                               | 1,429,981 |   |      | $ | 1,079,720 |      |  | $ | 707,701  |  
|                                                                     |  |                                 |           |   |      |   |           |      |  |   |          |  
|Principal amount of investments funded:                              |  |                                 |           |   |      |   |           |      |  |   |          |  
|First Lien Debt                                                      |  | $                               | 604,514   |   |      | $ | 481,510   |      |  | $ | 457,212  |  
|Second Lien Debt                                                     |  |                                 | 38,950    |   |      |   | 115,250   |      |  |   | 80,790   |  
|Structured Finance Obligations                                       |  |                                 |          |   |      |   | 15,760    |      |  |   | 115,638  |  
|Equity Investments                                                   |  |                                 | 2,856     |   |      |   | 1,507     |      |  |   |         |  
|Investment Fund                                                      |  |                                 | 119,785   |   |      |   |          |      |  |   |         |  
|                                                                     |  |                                 |           |   |      |   |           |      |  |   |          |  
|Total                                                                |  | $                               | 766,105   |   |      | $ | 614,027   |      |  | $ | 653,640  |  
|                                                                     |  |                                 |           |   |      |   |           |      |  |   |          |  
|Principal amount of investments sold or repaid:                      |  |                                 |           |   |      |   |           |      |  |   |          |  
|First Lien Debt                                                      |  | $                               | (254,921  | ) |      | $ | (191,718  | )    |  | $ | (77,040  | )
|Second Lien Debt                                                     |  |                                 | (83,279   | ) |      |   | (8,000    | )    |  |   | (9,500   | )
|Structured Finance Obligations                                       |  |                                 | (81,442   | ) |      |   | (39,475   | )    |  |   | (31,363  | )
|Investment Fund                                                      |  |                                 | (22,400   | ) |      |   |          |      |  |   |         |  
|                                                                     |  |                                 |           |   |      |   |           |      |  |   |          |  
|Total                                                                |  | $                               | (442,042  | ) |      | $ | (239,193  | )    |  | $ | (117,903 | )
|                                                                     |  |                                 |           |   |      |   |           |      |  |   |          |  
|Number of new funded investments                                     |  |                                 | 62        |   |      |   | 46        |      |  |   | 58       |  
|Average amount of new funded investments                             |  | $                               | 12,188    |   |      | $ | 12,996    |      |  | $ | 10,597   |  
|Percentage of new funded debt investments at floating interest rates |  |                                 | 100       | % |      |   | 98        | %    |  |   | 98       | %

As of December 31, 2016 and 2015, investments consisted of the following:



|                               |  |                   |           |  |                   |   |           |               |  |   |            |  |  |   |           | 
|------------------------------ |  | ----------------- | --------- |  | ----------------- | - | --------- | ------------- |  | - | ---------- |  |  | - | --------- | 
|                               |  | December 31, 2016 |           |  | December 31, 2015 |  
|                               |  | AmortizedCost     |           |  | Fair Value        |   |           | AmortizedCost |  |   | Fair Value | 
|First Lien Debt                |  | $                 | 1,145,326 |  |                   | $ | 1,139,548 |               |  | $ | 800,857    |  |  | $ | 795,034   | 
|Second Lien Debt               |  |                   | 172,960   |  |                   |   | 171,864   |               |  |   | 216,708    |  |  |   | 210,396   | 
|Structured Finance Obligations |  |                   | 9,239     |  |                   |   | 5,216     |               |  |   | 59,940     |  |  |   | 44,812    | 
|Equity Investments             |  |                   | 5,071     |  |                   |   | 6,474     |               |  |   | 2,215      |  |  |   | 2,424     | 
|Investment Fund                |  |                   | 97,385    |  |                   |   | 99,657    |               |  |   |           |  |  |   |          | 
|                               |  |                   |           |  |                   |   |           |               |  |   |            |  |  |   |           | 
|Total                          |  | $                 | 1,429,981 |  |                   | $ | 1,422,759 |               |  | $ | 1,079,720  |  |  | $ | 1,052,666 | 
|                               |  |                   |           |  |                   |   |           |               |  |   |            |  |  |   |           | 



61



---

##### Table of Contents

The weighted average yields(1) for our
first and second lien debt, based on the amortized cost and fair value as of December 31, 2016 and 2015, were as follows:



|                                                |  |                   |       |   |                   |  |       |               |  |  |            |   |  |  |       |  
|----------------------------------------------- |  | ----------------- | ----- | - | ----------------- |  | ----- | ------------- |  |  | ---------- | - |  |  | ----- | -
|                                                |  | December 31, 2016 |       |   | December 31, 2015 | 
|                                                |  | AmortizedCost     |       |   | Fair Value        |  |       | AmortizedCost |  |  | Fair Value |  
|First Lien Debt (excluding First Lien/Last Out) |  |                   | 7.09  | % |                   |  | 7.15  | %             |  |  | 6.65       | % |  |  | 6.74  | %
|First Lien/Last Out Unitranche                  |  |                   | 12.33 | % |                   |  | 12.12 | %             |  |  | 11.83      | % |  |  | 11.53 | %
|                                                |  |                   |       |   |                   |  |       |               |  |  |            |   |  |  |       |  
|First Lien Debt Total                           |  |                   | 7.92  | % |                   |  | 7.96  | %             |  |  | 7.43       | % |  |  | 7.48  | %
|Second Lien Debt                                |  |                   | 9.97  | % |                   |  | 10.04 | %             |  |  | 9.80       | % |  |  | 10.09 | %
|                                                |  |                   |       |   |                   |  |       |               |  |  |            |   |  |  |       |  
|First and Second Lien Debt Total                |  |                   | 8.19  | % |                   |  | 8.23  | %             |  |  | 7.93       | % |  |  | 8.03  | %
|                                                |  |                   |       |   |                   |  |       |               |  |  |            |   |  |  |       |  



|(1) | Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2016 and 2015. Weighted average yield on debt and income
producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total
first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual
amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each
investment could differ materially from the yields presented above.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See the Consolidated Schedules of Investments as of
December 31, 2016 and 2015 in our consolidated financial statements in Part II, Item 8 of this Form 10-K Financial Statements and Supplementary Data for more information on these
investments, including a list of companies and type and amount of investments.

As part of the monitoring process, our Investment Adviser
has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as Internal Risk Ratings:

Internal Risk Ratings Definitions



|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Rating |  | Definition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|1      |  | PerformingLow Risk: Borrower is operating more than 10% ahead of the base case.                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | 
|2      |  | PerformingStable Risk: Borrower is operating within 10% of the base case (above or below). This is the initial rating assigned to all new borrowers.                                                                                                                                                                                                                                                                                                                                             
|       | 
|3      |  | PerformingManagement Notice: Borrower is operating more than 10% below the base case. A financial covenant default may have occurred, but there is a low risk of payment default.                                                                                                                                                                                                                                                                                                                
|       | 
|4      |  | Watch List: Borrower is operating more than 20% below the base case and there is a high risk of covenant default, or it may have already occurred. Payments are current although subject to greater uncertainty, and there is
moderate to high risk of payment default.                                                                                                                                                                                                                           
|       | 
|5      |  | Watch ListPossible Loss: Borrower is operating more than 30% below the base case. At the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or
refinance all outstanding debt on current terms. Payment default is very likely or may have occurred. Loss of principal is possible.                                                                                                                                     
|       | 
|6      |  | Watch ListProbable Loss: Borrower is operating more than 40% below the base case, and at the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or
refinance all outstanding debt on current terms. Payment default is very likely or may have already occurred. Additionally, the prospects for improvement in the borrowers situation are sufficiently negative that impairment of some or all
principal is probable.



62



---

##### Table of Contents

Our Investment Advisers risk rating model is based on evaluating portfolio company
performance in comparison to the base case when considering certain credit metrics including, but not limited to, adjusted EBITDA and net senior leverage as well as specific events including, but not limited to, default and impairment.

Our Investment Adviser monitors and, when appropriate, changes the investment ratings assigned to each debt investment in our portfolio. In
connection with our quarterly valuation process, our Investment Adviser reviews our investment ratings on a regular basis. The following table summarizes the Internal Risk Ratings as of December 31, 2016 and 2015:



|                             |  |                   |         |  |                   |  |        |            |  |   |                 |  |  |  |        |  
|---------------------------- |  | ----------------- | ------- |  | ----------------- |  | ------ | ---------- |  | - | --------------- |  |  |  | ------ | -
|                             |  | December 31, 2016 |         |  | December 31, 2015 | 
|                             |  | Fair Value        |         |  | % of Fair Value   |  |        | Fair Value |  |   | % of Fair Value | 
|(dollar amounts in millions) |  |                   |         |  |                   |  |        |            |  |   |                 | 
|Internal Risk Rating 1       |  | $                 | 59.3    |  |                   |  | 4.52   | %          |  | $ | 71.2            |  |  |  | 7.08   | %
|Internal Risk Rating 2       |  |                   | 1,055.7 |  |                   |  | 80.50  |            |  |   | 809.7           |  |  |  | 80.54  |  
|Internal Risk Rating 3       |  |                   | 100.9   |  |                   |  | 7.70   |            |  |   | 112.3           |  |  |  | 11.17  |  
|Internal Risk Rating 4       |  |                   | 75.7    |  |                   |  | 5.77   |            |  |   | 12.2            |  |  |  | 1.21   |  
|Internal Risk Rating 5       |  |                   | 12.2    |  |                   |  | 0.93   |            |  |   |                |  |  |  |       |  
|Internal Risk Rating 6       |  |                   | 7.6     |  |                   |  | 0.58   |            |  |   |                |  |  |  |       |  
|                             |  |                   |         |  |                   |  |        |            |  |   |                 |  |  |  |        |  
|Total                        |  | $                 | 1,311.4 |  |                   |  | 100.00 | %          |  | $ | 1,005.4         |  |  |  | 100.00 | %
|                             |  |                   |         |  |                   |  |        |            |  |   |                 |  |  |  |        |  

As of December 31, 2016 and 2015, the weighted average Internal Risk Rating of our debt investment
portfolio was 2.2 and 2.1, respectively.

CONSOLIDATED RESULTS OF OPERATIONS

For the years ended December 31, 2016, 2015 and 2014

The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors,
including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.

Investment Income

Investment income for
the years ended December 31, 2016, 2015 and 2014, was as follows:



|                               |  |                                 |         |  |      |   |        |      |  |   |        | 
|------------------------------ |  | ------------------------------- | ------- |  | ---- | - | ------ | ---- |  | - | ------ | 
|                               |  | For the years endedDecember 31, |        
|                               |  | 2016                            |         |  | 2015 |   |        | 2014 | 
|Investment income:             |  |                                 |         |  |      |   |        |      |  |   |        | 
|First Lien Debt                |  | $                               | 83,713  |  |      | $ | 45,654 |      |  | $ | 18,028 | 
|Second Lien Debt               |  |                                 | 23,190  |  |      |   | 15,357 |      |  |   | 5,716  | 
|Structured Finance Obligations |  |                                 | 887     |  |      |   | 8,160  |      |  |   | 9,233  | 
|Equity Investments             |  |                                 | 13      |  |      |   | 12     |      |  |   |       | 
|Investment Fund                |  |                                 | 3,140   |  |      |   |       |      |  |   |       | 
|Cash                           |  |                                 | 28      |  |      |   | 7      |      |  |   | 7      | 
|                               |  |                                 |         |  |      |   |        |      |  |   |        | 
|Total investment income        |  | $                               | 110,971 |  |      | $ | 69,190 |      |  | $ | 32,984 | 
|                               |  |                                 |         |  |      |   |        |      |  |   |        | 

The increase in investment income for the year ended December 31, 2016 from the comparable period in 2015
was primarily driven by our deployment of capital, increasing invested balance, increased fees and other income from syndications, amendments and prepayments, and dividends declared by Credit Fund. The size of our portfolio increased to $1,429,981
as of December 31, 2016 from $1,079,720 as of December 31, 2015, at amortized cost, and total principal amount of investments outstanding increased to $1,467,133 as of



63



---

##### Table of Contents

December 31, 2016 from $1,142,364 as of December 31, 2015. The increase in interest income was also due to the increase in the weighted average yield. As of December 31, 2016, the
weighted average yield of our first and second lien debt increased to 8.19% from 7.93% as of December 31, 2015, on amortized cost.

The increase in investment income for the year ended December 31, 2015 from the comparable period in 2014 was primarily driven by our
deployment of capital and increasing invested balance. The size of our portfolio increased to $1,079,720 as of December 31, 2015 from $707,701 as of December 31, 2014, at amortized cost, and total principal amount of investments
outstanding increased to $1,142,364 as of December 31, 2015 from $767,530 as of December 31, 2014. The increase in interest income was also due to the increase in the weighted average yield. As of December 31, 2015, the weighted
average yield of our first and second lien debt increased to 7.93% from 6.70% as of December 31, 2014, on amortized cost.

Interest
income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each
loans credit agreement. As of December 31, 2016, one first lien debt investment in the portfolio was non-performing. The fair value of the loan in the portfolio on
non-accrual status was $7,628, which represents approximately 0.5% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest
payments as of December 31, 2016 and for the year then ended. As of December 31, 2015 and 2014 and for the years then ended, all of our first and second lien debt investments were performing and current on their interest payments. Interest
income from structured finance obligations is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows. The effective yield is updated periodically based on payments received and expected future
payments. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults, delinquencies and
liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted our estimates if the information was known at the time. As a result, actual results may differ
significantly from these estimates.

Net investment income (loss) for the years ended December 31, 2016, 2015 and 2014 was as
follows:



|                             |  |                                 |         |   |      |   |         |      |  |   |         |  
|---------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                             |  | For the years endedDecember 31, |        
|                             |  | 2016                            |         |   | 2015 |   |         | 2014 | 
|Total investment income      |  | $                               | 110,971 |   |      | $ | 69,190  |      |  | $ | 32,984  |  
|Net expenses                 |  |                                 | (51,350 | ) |      |   | (33,666 | )    |  |   | (18,724 | )
|                             |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net investment income (loss) |  | $                               | 59,621  |   |      | $ | 35,524  |      |  | $ | 14,260  |  
|                             |  |                                 |         |   |      |   |         |      |  |   |         |  

Expenses



|                                 |  |                                 |        |   |      |   |        |      |  |   |        |  
|-------------------------------- |  | ------------------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                 |  | For the years endedDecember 31, |       
|                                 |  | 2016                            |        |   | 2015 |   |        | 2014 | 
|Base management fees             |  | $                               | 18,539 |   |      | $ | 13,361 |      |  | $ | 6,559  |  
|Incentive fees                   |  |                                 | 14,905 |   |      |   | 8,881  |      |  |   | 3,578  |  
|Professional fees                |  |                                 | 2,103  |   |      |   | 1,845  |      |  |   | 2,169  |  
|Administrative service fees      |  |                                 | 703    |   |      |   | 595    |      |  |   | 626    |  
|Interest expense                 |  |                                 | 16,462 |   |      |   | 9,582  |      |  |   | 3,648  |  
|Credit facility fees             |  |                                 | 2,573  |   |      |   | 1,898  |      |  |   | 3,052  |  
|Directors fees and expenses     |  |                                 | 553    |   |      |   | 419    |      |  |   | 395    |  
|Other general and administrative |  |                                 | 1,692  |   |      |   | 1,539  |      |  |   | 883    |  
|Waiver of base management fees   |  |                                 | (6,180 | ) |      |   | (4,454 | )    |  |   | (2,186 | )
|                                 |  |                                 |        |   |      |   |        |      |  |   |        |  
|Net expenses                     |  | $                               | 51,350 |   |      | $ | 33,666 |      |  | $ | 18,724 |  
|                                 |  |                                 |        |   |      |   |        |      |  |   |        |  



64



---

##### Table of Contents

Interest expense and credit facility fees for the years ended December 31, 2016, 2015 and
2014 were comprised of the following:



|                                                |  |                                 |        |  |      |   |        |      |  |   |       | 
|----------------------------------------------- |  | ------------------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ----- | 
|                                                |  | For the years endedDecember 31, |       
|                                                |  | 2016                            |        |  | 2015 |   |        | 2014 | 
|Interest expense                                |  | $                               | 16,462 |  |      | $ | 9,582  |      |  | $ | 3,648 | 
|Facility unused commitment fee                  |  |                                 | 1,253  |  |      |   | 847    |      |  |   | 1,129 | 
|Amortization of deferred financing costs        |  |                                 | 1,213  |  |      |   | 945    |      |  |   | 1,820 | 
|Other fees                                      |  |                                 | 107    |  |      |   | 106    |      |  |   | 103   | 
|                                                |  |                                 |        |  |      |   |        |      |  |   |       | 
|Total interest expense and credit facility fees |  | $                               | 19,035 |  |      | $ | 11,480 |      |  | $ | 6,700 | 
|                                                |  |                                 |        |  |      |   |        |      |  |   |       | 
|Cash paid for interest expense                  |  | $                               | 15,267 |  |      | $ | 8,083  |      |  | $ | 2,882 | 

The increase in interest expense for the year ended December 31, 2016 compared to the comparable period
in 2015 was driven by increased usage of the Facilities related to increased deployment of capital to investments, and additional debt issued through the securitization in the form of the 2015-1 Notes (see
Note 7 to the consolidated financial statements in Part II, Item 8 of this Form 10-K for more information). For the year ended December 31, 2016, the average interest rate increased to 2.81% from
2.31% for the comparable period in 2015, and average principal debt outstanding increased to $580,734 from $406,638 for the comparable period in 2015.

The increase in interest expense for the year ended December 31, 2015 compared to the comparable period in 2014 was driven by increased
usage of the Facilities related to increased deployment of capital to investments. For the year ended December 31, 2015, the average interest rate increased to 2.31% from 2.18% for the comparable period in 2014, and average principal debt
outstanding increased to $406,638 from $164,980 for the comparable period in 2014.

The increase in base management fees (and related
waiver of base management fees) and incentive fees related to pre-incentive fee net investment income for the year ended December 31, 2016 from the comparable period in 2015 and for the year ended
December 31, 2015 from the comparable period in 2014 was driven by our deployment of capital and our increasing invested balance. For the years ended December 31, 2016, 2015 and 2014, base management fees were $12,359, $8,907 and $4,373,
respectively (net of waiver of $6,180, $4,454 and $2,186, respectively); incentive fees related to pre-incentive fee net investment income were $14,905, $8,881 and $3,578, respectively, and there were no
incentive fees related to realized capital gains. For the year ended December 31, 2016, 2015 and 2014 we recorded no accrued capital gains incentive fees based upon our cumulative net realized and unrealized appreciation (depreciation) as of
December 31, 2016, 2015 and 2014, respectively. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (US GAAP) in a given period may result in an additional expense if
such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4 to the
consolidated financial statements in Part II, Item 8 of this Form 10-K for more information on our incentive and base management fees.

Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the
management of us. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including
our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs. The increase in other general and
administrative expenses for the year ended December 31, 2016 from the comparable period in 2015 and for the year ended in December 31, 2015 from the comparable period in 2014 was primarily driven by the increased deployment of capital.



65



---

##### Table of Contents

Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments

During the years ended December 31, 2016, 2015 and 2014, we had realized gains on 10, 8, and 4, investments, respectively, totaling
approximately $864, $1,622, and $391, respectively, which was offset by realized losses on 14, 6, and 3, investments, respectively, totaling approximately $10,508, $458, and $319, respectively. During the years ended December 31, 2016, 2015 and
2014, we had a change in unrealized appreciation on 104, 48, and 25 investments, respectively, totaling approximately $41,130, $8,597, and $2,931, respectively, which was offset by a change in unrealized depreciation on 24, 71, and 65 investments,
respectively, totaling approximately $21,298, $26,612, and $11,649, respectively.

Net realized gain (loss) and net change in unrealized
appreciation (depreciation) for the years ended December 31, 2016, 2015 and 2014, were as follows:



|                                                                                                 |  |                                 |        |   |      |   |         |      |  |   |        |  
|------------------------------------------------------------------------------------------------ |  | ------------------------------- | ------ | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                                                                                 |  | For the years endedDecember 31, |       
|                                                                                                 |  | 2016                            |        |   | 2015 |   |         | 2014 | 
|Net realized gain (loss) on investments                                                          |  | $                               | (9,644 | ) |      | $ | 1,164   |      |  | $ | 72     |  
|Net change in unrealized appreciation (depreciation) on investments                              |  |                                 | 19,832 |   |      |   | (18,015 | )    |  |   | (8,718 | )
|                                                                                                 |  |                                 |        |   |      |   |         |      |  |   |        |  
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on
investments |  | $                               | 10,188 |   |      | $ | (16,851 | )    |  | $ | (8,646 | )
|                                                                                                 |  |                                 |        |   |      |   |         |      |  |   |        |  

Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments
for the years ended December 31, 2016, 2015 and 2014 were as follows:



|                               |  |                                  |         |   |                                                    |   |        |                         |  |   |                                                   |  |  |                         |         |   |                                                   |   |     |   |  |   |        |  
|------------------------------ |  | -------------------------------- | ------- | - | -------------------------------------------------- | - | ------ | ----------------------- |  | - | ------------------------------------------------- |  |  | ----------------------- | ------- | - | ------------------------------------------------- | - | --- | - |  | - | ------ | -
|                               |  | For the years ended December 31, |        
|                               |  | 2016                             |         |   | 2015                                               |   |        | 2014                    | 
|Type                           |  | Net realizedgain (loss)          |         |   | Net change inunrealizedappreciation (depreciation) |   |        | Net realizedgain (loss) |  |   | Net change inunrealizedappreciation(depreciation) |  |  | Net realizedgain (loss) |         |   | Net change inunrealizedappreciation(depreciation) |  
|First Lien Debt                |  | $                                | 383     |   |                                                    | $ | 46     |                         |  | $ | 208                                               |  |  | $                       | (3,160  | ) |                                                   | $ |    |   |  | $ | (2,829 | )
|Second Lien Debt               |  |                                  | 275     |   |                                                    |   | 5,216  |                         |  |   |                                                  |  |  |                         | (2,925  | ) |                                                   |   | 120 |   |  |   | (2,518 | )
|Structured Finance Obligations |  |                                  | (10,302 | ) |                                                    |   | 11,105 |                         |  |   | 956                                               |  |  |                         | (12,139 | ) |                                                   |   | (48 | ) |  |   | (3,371 | )
|Equity Investments             |  |                                  |        |   |                                                    |   | 1,193  |                         |  |   |                                                  |  |  |                         | 209     |   |                                                   |   |    |   |  |   |       |  
|Investment Fund                |  |                                  |        |   |                                                    |   | 2,272  |                         |  |   |                                                  |  |  |                         |        |   |                                                   |   |    |   |  |   |       |  
|                               |  |                                  |         |   |                                                    |   |        |                         |  |   |                                                   |  |  |                         |         |   |                                                   |   |     |   |  |   |        |  
|Total                          |  | $                                | (9,644  | ) |                                                    | $ | 19,832 |                         |  | $ | 1,164                                             |  |  | $                       | (18,015 | ) |                                                   | $ | 72  |   |  | $ | (8,718 | )
|                               |  |                                  |         |   |                                                    |   |        |                         |  |   |                                                   |  |  |                         |         |   |                                                   |   |     |   |  |   |        |  

Net change in unrealized appreciation in our investments for the year ended December 31, 2016 compared to
the comparable period in 2015 was primarily due to a tightening spread environment during the year. Net change in unrealized depreciation in our investments for the year ended December 31, 2015 compared to the comparable period in 2014 was
primarily due to a widening spread environment during the last six months of the year.

MIDDLE MARKET CREDIT FUND, LLC

Overview

On February 29,
2016, we and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 (as amended, the Limited Liability Company Agreement) to co-manage Credit Fund, an unconsolidated Delaware limited liability company. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a
six-member



66



---

##### Table of Contents

board of managers, on which we and Credit Partners each have equal representation. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time
to time, capital of up to $400,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by us.

Together with Credit Partners, we co-invest through Credit Fund. Portfolio and investment decisions
with respect to Credit Fund must be unanimously approved by a quorum of Credit Funds investment committee consisting of an equal number of representatives of us and Credit Partners. Therefore, although we own more than 25% of the voting
securities of Credit Fund, we do not believe that we have control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the Credit Fund Sub), a Delaware limited liability company,
was formed on April 5, 2016. Credit Fund Sub primarily invests in first lien loans of middle market companies. Credit Fund Sub is a wholly owned subsidiary of Credit Fund and is consolidated in Credit Funds consolidated financial
statements commencing from the date of its formation.

Selected Financial Data

Since inception of Credit Fund and through December 31, 2016, we and Credit Partners each made capital contributions of $1 in
members equity and $35,000 in subordinated loans to Credit Fund. Additionally, Credit Fund had net borrowings of $62,384 in mezzanine loans under a revolving credit facility with us (the Credit Fund Facility). As of
December 31, 2016, Credit Fund had subordinated loans and members capital of $74,547 and mezzanine loans of $62,384. Our ownership interest in such subordinated loans and members capital was $37,273 and in such mezzanine loans was
$62,384.

As of December 31, 2016, Credit Fund held cash and cash equivalents totaling $6,103.

As of December 31, 2016, Credit Fund had total investments at fair value of $437,829, which was comprised of first lien senior secured
loans and second lien senior secured loans to 28 portfolio companies. As of December 31, 2016, no loans in Credit Funds portfolio were on non-accrual status or contained PIK provisions. All
investments in the portfolio were floating rate debt instruments. The portfolio companies in Credit Fund are U.S. middle market companies in industries similar to those in which we may invest directly. Additionally, as of December 31, 2016,
Credit Fund had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $30,361.

Below is a summary of Credit Funds portfolio, followed by a listing of the loans in Credit Funds portfolio as of December 31,
2016:



|                                                                            |  |                         |         |  
|--------------------------------------------------------------------------- |  | ----------------------- | ------- | -
|                                                                            |  | As of December 31, 2016 |        
|Senior secured loans (1)                                                    |  | $                       | 439,086 |  
|Weighted average yields of senior secured loans based on amortized cost (2) |  |                         | 6.47    | %
|Weighted average yields of senior secured loans based on fair value (2)     |  |                         | 6.41    | %
|Number of portfolio companies in Credit Fund                                |  |                         | 28      |  



|(1) | At par/principal amount.
|--- | ------------------------

|(2) | Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rate as of December 31, 2016. Weighted average yield on debt and income producing
securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien
and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization
of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could
differ materially from the yields presented above.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



67



---

##### Table of Contents

|                                                             |  |  |  |  |  |  |  |  |  |  |  | 
|------------------------------------------------------------ |  |  |  |  |  |  |  |  |  |  |  | 
|Consolidated Schedule of Investments as of
December 31, 2016

|                                                                |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               |   |         |  |  |   |         | 
|--------------------------------------------------------------- |  | -------- | ---------------------------------------- |  | ---------------- |  | ----------------------- | ------------ |  |  | ------------------- |  |  | ----------------- | ------ |  | ------------- | - | ------- |  |  | - | ------- | 
|Investments
(1)                                                 |  | Industry |                                          |  | InterestRate (2) |  |                         | MaturityDate |  |  | Par/PrincipalAmount |  |  | AmortizedCost (5) |        |  | FairValue (6) |  
|First Lien Debt (99.31% of fair value)                          |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               |   |         |  |  |   |         | 
|AM Conservation Holding
Corporation (2)(3)(4)                   |  |          | Energy: Electricity                      |  |                  |  | L + 4.75% (1.00% Floor) |              |  |  | 10/31/2022          |  |  | $                 | 30,000 |  |               | $ | 29,721  |  |  | $ | 29,925  | 
|Datapipe, Inc. (2)(3)(4)(11)                                    |  |          | Telecommunications                       |  |                  |  | L + 4.75% (1.00% Floor) |              |  |  | 3/15/2019           |  |  |                   | 9,750  |  |               |   | 9,654   |  |  |   | 9,764   | 
|Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)(2)(3)(4)(11) |  |          | Construction & Building                  |  |                  |  | L + 4.50% (1.00% Floor) |              |  |  | 4/4/2023            |  |  |                   | 19,850 |  |               |   | 19,580  |  |  |   | 19,723  | 
|Diversitech Corporation
(2)(4)(10)(11)                          |  |          | Capital Equipment                        |  |                  |  | P + 3.50%               |              |  |  | 11/19/2021          |  |  |                   | 14,803 |  |               |   | 14,617  |  |  |   | 14,803  | 
|DTI Holdco, Inc. (2)(3)(4)(7)                                   |  |          | High Tech Industries                     |  |                  |  | L + 5.25% (1.00% Floor) |              |  |  | 9/30/2023           |  |  |                   | 19,950 |  |               |   | 19,751  |  |  |   | 19,651  | 
|DYK Prime Acquisition LLC (2)(3)(4)                             |  |          | Chemicals, Plastics &Rubber              |  |                  |  | L + 4.75% (1.00% Floor) |              |  |  | 4/1/2022            |  |  |                   | 5,775  |  |               |   | 5,735   |  |  |   | 5,775   | 
|EAG, Inc. (2)(3)(4)(11)                                         |  |          | Services: Business                       |  |                  |  | L + 4.25% (1.00% Floor) |              |  |  | 7/28/2018           |  |  |                   | 8,713  |  |               |   | 8,686   |  |  |   | 8,720   | 
|EIP Merger Sub, LLC (Evolve
IP) (2)(3)(4)(8)                    |  |          | Telecommunications                       |  |                  |  | L + 6.25% (1.00% Floor) |              |  |  | 6/7/2021            |  |  |                   | 22,971 |  |               |   | 22,323  |  |  |   | 22,509  | 
|EIP Merger Sub, LLC (Evolve
IP) (2)(3)(4)(9)                    |  |          | Telecommunications                       |  |                  |  | L + 6.25% (1.00% Floor) |              |  |  | 6/7/2021            |  |  |                   | 1,500  |  |               |   | 1,455   |  |  |   | 1,468   | 
|Empower Payments Acquisitions,
Inc. (2)(3)(7)                   |  |          | Media: Advertising, Printing& Publishing |  |                  |  | L + 5.50% (1.00% Floor) |              |  |  | 11/30/2023          |  |  |                   | 17,500 |  |               |   | 17,154  |  |  |   | 17,279  | 
|Generation Brands Holdings, Inc. (2)(3)(4)                      |  |          | Durable Consumer Goods                   |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 6/10/2022           |  |  |                   | 19,900 |  |               |   | 19,712  |  |  |   | 20,099  | 
|Jensen Hughes, Inc. (2)(3)(4)(10)                               |  |          | Utilities: Electric                      |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 12/4/2021           |  |  |                   | 20,409 |  |               |   | 20,188  |  |  |   | 20,327  | 
|Kestra Financial, Inc.(2)(3)(4)                                 |  |          | Banking, Finance, Insurance& Real Estate |  |                  |  | L + 5.25% (1.00% Floor) |              |  |  | 6/24/2022           |  |  |                   | 19,900 |  |               |   | 19,632  |  |  |   | 19,814  | 
|MSHC, Inc.(2)(3)(4)(10)                                         |  |          | Construction & Building                  |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 7/19/2021           |  |  |                   | 13,177 |  |               |   | 13,062  |  |  |   | 13,003  | 
|PAI Holdco, Inc. (Parts
Authority)(2)(3)(4)                     |  |          | Automotive                               |  |                  |  | L + 4.75% (1.00% Floor) |              |  |  | 12/30/2022          |  |  |                   | 9,950  |  |               |   | 9,886   |  |  |   | 9,950   | 
|Pasternack Enterprises, Inc. (Infinite
RF)(2)(3)(4)             |  |          | Capital Equipment                        |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 5/27/2022           |  |  |                   | 11,941 |  |               |   | 11,844  |  |  |   | 11,941  | 
|Q Holding Company (2)(3)(4)                                     |  |          | Automotive                               |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 12/18/2021          |  |  |                   | 13,964 |  |               |   | 13,828  |  |  |   | 13,941  | 
|QW Holding Corporation
(Quala)(2)(3)(4)(7)(10)                  |  |          | Environmental Industries                 |  |                  |  | L + 6.75% (1.00% Floor) |              |  |  | 8/31/2022           |  |  |                   | 8,975  |  |               |   | 8,413   |  |  |   | 9,030   | 
|Restaurant Technologies, Inc. (2)(3)(4)                         |  |          | Retail                                   |  |                  |  | L + 4.75% (1.00% Floor) |              |  |  | 11/23/2022          |  |  |                   | 23,514 |  |               |   | 23,117  |  |  |   | 23,443  | 
|RelaDyne Inc. (2)(3)(4)(10)                                     |  |          | Wholesale                                |  |                  |  | L + 5.25% (1.00% Floor) |              |  |  | 7/22/2022           |  |  |                   | 14,000 |  |               |   | 13,871  |  |  |   | 13,969  | 
|Systems Maintenance Services Holding, Inc. (2)(3)(4)            |  |          | High Tech Industries                     |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 10/30/2023          |  |  |                   | 12,000 |  |               |   | 11,885  |  |  |   | 12,001  | 
|T2 Systems Canada, Inc. (2)(3)(4)(11)                           |  |          | Transportation: Consumer                 |  |                  |  | L + 6.75% (1.00% Floor) |              |  |  | 9/28/2022           |  |  |                   | 2,700  |  |               |   | 2,635   |  |  |   | 2,727   | 
|T2 Systems, Inc. (2) (3)(4)(10)(11)                             |  |          | Transportation: Consumer                 |  |                  |  | L + 6.75% (1.00% Floor) |              |  |  | 9/28/2022           |  |  |                   | 15,300 |  |               |   | 14,888  |  |  |   | 15,473  | 
|The Original Cakerie, Ltd.
(Canada) (2)(3)(4)(10)               |  |          | Beverage, Food & Tobacco                 |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 7/20/2021           |  |  |                   | 7,009  |  |               |   | 6,946   |  |  |   | 7,009   | 
|The Original Cakerie, Co. (Canada) (2)(3)(4)                    |  |          | Beverage, Food & Tobacco                 |  |                  |  | L + 5.50% (1.00% Floor) |              |  |  | 7/20/2021           |  |  |                   | 3,621  |  |               |   | 3,591   |  |  |   | 3,621   | 
|U.S. Acute Care Solutions,
LLC (2)(3)(4)                        |  |          | Health & Pharmaceuticals                 |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 5/15/2021           |  |  |                   | 26,400 |  |               |   | 26,154  |  |  |   | 26,336  | 
|U.S. Anesthesia Partners, Inc.
(2)(3)(4)                        |  |          | Health & Pharmaceuticals                 |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 12/31/2019          |  |  |                   | 10,374 |  |               |   | 10,275  |  |  |   | 10,362  | 
|Vantage Specialty Chemicals,
Inc.(2)(3)(4)(11)                  |  |          | Chemicals, Plastics &Rubber              |  |                  |  | L + 4.50% (1.00% Floor) |              |  |  | 2/5/2021            |  |  |                   | 17,910 |  |               |   | 17,786  |  |  |   | 17,903  | 
|WIRB  Copernicus Group,
Inc. (2)(3)(4)                         |  |          | Health & Pharmaceuticals                 |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 8/12/2022           |  |  |                   | 7,980  |  |               |   | 7,916   |  |  |   | 8,050   | 
|Zest Holdings, LLC (2)(3)(4)                                    |  |          | Durable Consumer Goods                   |  |                  |  | L + 4.75% (1.00% Floor) |              |  |  | 8/16/2020           |  |  |                   | 8,700  |  |               |   | 8,658   |  |  |   | 8,749   | 
|Zywave, Inc. (2)(3)(4)(7)(10)                                   |  |          | High Tech Industries                     |  |                  |  | L + 5.00% (1.00% Floor) |              |  |  | 11/17/2022          |  |  |                   | 17,500 |  |               |   | 17,315  |  |  |   | 17,434  | 
|                                                                |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               |   |         |  |  |   |         | 
|First Lien Debt Total                                           |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               | $ | 430,278 |  |  | $ | 434,799 | 
|                                                                |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               |   |         |  |  |   |         | 
|Second Lien Debt (0.69% of fair value)                          |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               |   |         |  |  |   |         | 
|Vantage Specialty Chemicals,
Inc.(2)(3)(4)(11)                  |  |          | Chemicals, Plastics &Rubber              |  |                  |  | L + 8.75% (1.00% Floor) |              |  |  | 2/5/2022            |  |  | $                 | 2,000  |  |               | $ | 1,960   |  |  | $ | 1,987   | 
|Zywave, Inc. (2)(3)(4)                                          |  |          | High Tech Industries                     |  |                  |  | L + 9.00% (1.00% Floor) |              |  |  | 11/17/2023          |  |  |                   | 1,050  |  |               |   | 1,034   |  |  |   | 1,043   | 
|                                                                |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               |   |         |  |  |   |         | 
|Second Lien Debt Total                                          |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               | $ | 2,994   |  |  | $ | 3,030   | 
|                                                                |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               |   |         |  |  |   |         | 
|Total Investments                                               |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               | $ | 433,272 |  |  | $ | 437,829 | 
|                                                                |  |          |                                          |  |                  |  |                         |              |  |  |                     |  |  |                   |        |  |               |   |         |  |  |   |         | 



68



---

##### Table of Contents

|(1) | Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2016, the geographical composition of investments as a percentage of fair value was
2.43% in Canada and 97.57% in the United States.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR (L) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S.
Prime Rate (P)), which generally resets quarterly. For each such loan, Credit Fund has provided the interest rate in effect as of December 31, 2016. As of December 31, 2016, all of Credit Funds LIBOR loans were indexed to
the 90-day LIBOR rate at 1.00%, except for those loans as indicated in Note 11 below, and the U.S. Prime Rate loan was indexed at 3.75%.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan includes interest rate floor feature.
|--- | ------------------------------------------

|(4) | Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the Credit Fund Sub Facility). The lenders of the Credit Fund Sub
Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Funds valuation policy, which is substantially similar to the valuation policy of the
Company provided in Critical Accounting PoliciesFair Value Measurements.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially
all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Credit Fund receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.25% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among
lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among
lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.84%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan
with respect to principal, interest and other payments.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | As of December 31, 2016, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
|---- | ------------------------------------------------------------------------------------------------------------------------------------



|                                                                            |  |      |              |  |            |  |      |                     |  |   |            |  |  |   |     |  
|--------------------------------------------------------------------------- |  | ---- | ------------ |  | ---------- |  | ---- | ------------------- |  | - | ---------- |  |  | - | --- | -
|First Lien Debt  unfunded delayed draw andrevolving term loans
commitments |  | Type |              |  | Unused Fee |  |      | Par/PrincipalAmount |  |   | Fair Value | 
|Diversitech Corporation                                                     |  |      | Delayed Draw |  |            |  | 1.00 | %                   |  | $ | 5,000      |  |  | $ |    |  
|Jensen Hughes, Inc.                                                         |  |      | Revolver     |  |            |  | 0.50 | %                   |  |   | 2,000      |  |  |   | (7  | )
|Jensen Hughes, Inc.                                                         |  |      | Delayed Draw |  |            |  | 0.50 | %                   |  |   | 1,461      |  |  |   | (5  | )
|MSHC, Inc.                                                                  |  |      | Delayed Draw |  |            |  | 1.50 | %                   |  |   | 1,790      |  |  |   | (21 | )
|QW Holding Corporation (Quala)                                              |  |      | Revolver     |  |            |  | 1.00 | %                   |  |   | 5,086      |  |  |   | 14  |  
|QW Holding Corporation (Quala)                                              |  |      | Delayed Draw |  |            |  | 1.00 | %                   |  |   | 5,918      |  |  |   | 17  |  
|RelaDyne Inc.                                                               |  |      | Revolver     |  |            |  | 0.50 | %                   |  |   | 2,162      |  |  |   | (6  | )
|RelaDyne Inc.                                                               |  |      | Delayed Draw |  |            |  | 0.50 | %                   |  |   | 1,824      |  |  |   | (5  | )
|T2 Systems, Inc.                                                            |  |      | Revolver     |  |            |  | 1.00 | %                   |  |   | 1,955      |  |  |   | 20  |  
|The Original Cakerie, Ltd. (Canada)                                         |  |      | Revolver     |  |            |  | 0.50 | %                   |  |   | 1,665      |  |  |   |    |  
|Zywave, Inc.                                                                |  |      | Revolver     |  |            |  | 0.50 | %                   |  |   | 1,500      |  |  |   | (5  | )
|                                                                            |  |      |              |  |            |  |      |                     |  |   |            |  |  |   |     |  
|Total unfunded commitments                                                  |  |      |              |  |            |  |      |                     |  | $ | 30,361     |  |  | $ | 2   |  
|                                                                            |  |      |              |  |            |  |      |                     |  |   |            |  |  |   |     |  



|(11) | As of December 31, 2016, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.77%.
|---- | ---------------------------------------------------------------------------------------



69



---

##### Table of Contents

Below is certain summarized consolidated financial information for Credit Fund as of
December 31, 2016. Credit Fund commenced operations in May 2016.



|                                                                    |  |                   |         | 
|------------------------------------------------------------------- |  | ----------------- | ------- | 
|                                                                    |  | December 31, 2016 |        
|Selected Consolidated Balance Sheet Information                     |  |                   |         | 
|ASSETS                                                              |  |                   |         | 
|Investments, at fair value (amortized cost of $433,272)             |  | $                 | 437,829 | 
|Cash and other assets                                               |  |                   | 11,326  | 
|                                                                    |  |                   |         | 
|Total assets                                                        |  | $                 | 449,155 | 
|                                                                    |  |                   |         | 
|LIABILITIES AND MEMBERS EQUITY                                     |  |                   |         | 
|Secured borrowings                                                  |  | $                 | 248,540 | 
|Mezzanine loans                                                     |  |                   | 62,384  | 
|Other liabilities                                                   |  |                   | 63,684  | 
|Subordinated loans and members equity                              |  |                   | 74,547  | 
|                                                                    |  |                   |         | 
|Liabilities and members equity                                     |  | $                 | 449,155 | 
|                                                                    |  |                   |         | 
|Selected Consolidated Statement of Operations Information:          |  |                   |         | 
|Total investment income                                             |  | $                 | 9,973   | 
|                                                                    |  |                   |         | 
|Expenses                                                            |  |                   |         | 
|Interest and credit facility expenses                               |  |                   | 5,410   | 
|Other expenses                                                      |  |                   | 1,266   | 
|                                                                    |  |                   |         | 
|Total expenses                                                      |  |                   | 6,676   | 
|                                                                    |  |                   |         | 
|Net investment income (loss)                                        |  |                   | 3,297   | 
|                                                                    |  |                   |         | 
|Net realized gain (loss) on investments                             |  |                   | 41      | 
|Net change in unrealized appreciation (depreciation) on investments |  |                   | 4,557   | 
|                                                                    |  |                   |         | 
|Net increase (decrease) resulting from operations                   |  | $                 | 7,895   | 
|                                                                    |  |                   |         | 

Debt

Credit
Fund Facility

On June 24, 2016, Credit Fund entered into the Credit Fund Facility with us pursuant to which Credit Fund may from
time to time request mezzanine loans from us. The maximum principal amount of the Credit Fund Facility is $100,000. The maturity date of the Credit Fund Facility is June 24, 2017. Amounts borrowed under the Credit Fund Facility bear interest at
a rate of LIBOR plus 9.50%.

During the year ended December 31, 2016, there were mezzanine loan borrowings of $84,784 and repayments
of $22,400 under the Credit Fund Facility. As of December 31, 2016, there were $62,384 in mezzanine loans outstanding.

Credit Fund Sub Facility

On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders. The Credit Fund Sub Facility provides for
secured borrowings during the applicable revolving period up to an amount equal to $450,000, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed
$1,400,000. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub and the Companys and Credit Partners unfunded capital commitments. The maturity date of the
Credit Fund Sub Facility is June 24, 2022. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.50%.



70



---

##### Table of Contents

During the year ended December 31, 2016, there were secured borrowings of $248,540 under the
Credit Fund Sub Facility. As of December 31, 2016, there was $248,540 in secured borrowings outstanding.

FINANCIAL CONDITION, LIQUIDITY AND
CAPITAL RESOURCES

We generate cash from the net proceeds of offerings of our common stock and through cash flows from operations,
including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Facilities, as well as through securitization of a portion of our
existing investments.

The SPV closed on May 24, 2013 on the SPV Credit Facility, which was subsequently amended on June 30,
2014, June 19, 2015 and June 9, 2016. The SPV Credit Facility provides for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $400,000 (the borrowing base as calculated pursuant to the terms of
the SPV Credit Facility) and the amount of net cash proceeds and unpledged capital commitments the Company has received, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an
amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The
SPV Credit Facility imposes financial and operating covenants on us and the SPV that restrict our and its business activities. Continued compliance with these covenants will depend on many factors, some of which are beyond our control.

We closed on March 21, 2014 on the Credit Facility, which was subsequently amended on January 8, 2015 and May 25, 2016. The
maximum principal amount of the Credit Facility is $220,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Companys portfolio investments (subject to certain
concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of
portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $225,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at
their option, agree to provide additional financing. The Credit Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security
interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders equity and liquidity, certain
limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.

Although we believe that we and the SPV will remain in compliance, there are no assurances that we or the SPV will continue to comply with the
covenants in the Credit Facility and SPV Credit Facility, as applicable. Failure to comply with these covenants could result in a default under the Credit Facility and/or the SPV Credit Facility that, if we or the SPV were unable to obtain a waiver
from the applicable lenders, could result in the immediate acceleration of the amounts due under the Credit Facility and/or the SPV Credit Facility, and thereby have a material adverse impact on our business, financial condition and results of
operations.

For more information on the SPV Credit Facility and the Credit Facility, see Note 6 to the consolidated financial statements
in Part II, Item 8 of this Form 10-K.

The primary use of existing funds and any funds
raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes.

On June 26, 2015, we completed the 2015-1 Debt Securitization. The
2015-1 Notes were issued by Carlyle GMS Finance MM CLO 2015-1 LLC (the 2015-1 Issuer), a wholly owned and
consolidated subsidiary of us,



71



---

##### Table of Contents

and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of $160 million of Aaa/AAA
Class A-1A Notes, which bear interest at the three-month London Interbank Offered Rate (LIBOR) plus 1.85%; $40 million of Aaa/AAA Class A-1B
Notes, which bear interest at the three-month LIBOR plus 1.75% for the first 24 months and the three-month LIBOR plus 2.05% thereafter; $27 million of Aaa/AAA Class A-1C Notes, which bear interest at
3.75%; and $46 million of Aa2 Class A-2 Notes which bear interest at the three-month LIBOR plus 2.70%. The 2015-1 Notes were issued at par and are scheduled to
mature on July 15, 2027. We received 100% of the preferred interests (the Preferred Interests) issued by the 2015-1 Issuer on the closing date of the
2015-1 Debt Securitization in exchange for our contribution to the Issuer of the initial closing date loan portfolio. The Preferred Interests do not bear interest and had a nominal value of $125.9 million
at closing. In connection with the contribution, we have made customary representations, warranties and covenants to the 2015-1 Issuer. The Class A-1A, Class A-1B and Class A-1C and Class A-2 Notes are included in the consolidated financial statements included in Part II,
Item 8 of this Form 10-K. The Preferred Interests were eliminated in consolidation. For more information on the 2015-1 Notes, see Note 7 to the consolidated financial
statements in Part II, Item 8 of this Form 10-K.

As of December 31, 2016 and 2015, we had
$38,489 and $41,837, respectively, in cash and cash equivalents. The Facilities consisted of the following as of December 31, 2016 and 2015:



|                    |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 
|------------------- |  | ----------------- | ------- |  | --------------------- | - | ------- | ----------------- |  | - | ------------------- |  |  | - | ------ | 
|                    |  | December 31, 2016 |        
|                    |  | TotalFacility     |         |  | BorrowingsOutstanding |   |         | UnusedPortion (1) |  |   | AmountAvailable (2) | 
|SPV Credit Facility |  | $                 | 400,000 |  |                       | $ | 252,885 |                   |  | $ | 147,115             |  |  | $ | 5,988  | 
|Credit Facility     |  |                   | 220,000 |  |                       |   | 169,000 |                   |  |   | 51,000              |  |  |   | 51,000 | 
|                    |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 
|Total               |  | $                 | 620,000 |  |                       | $ | 421,885 |                   |  | $ | 198,115             |  |  | $ | 56,988 | 
|                    |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 



|                    |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 
|------------------- |  | ----------------- | ------- |  | --------------------- | - | ------- | ----------------- |  | - | ------------------- |  |  | - | ------ | 
|                    |  | December 31, 2015 |        
|                    |  | TotalFacility     |         |  | BorrowingsOutstanding |   |         | UnusedPortion (1) |  |   | AmountAvailable (2) | 
|SPV Credit Facility |  | $                 | 400,000 |  |                       | $ | 170,313 |                   |  | $ | 229,687             |  |  | $ | 3,155  | 
|Credit Facility     |  |                   | 150,000 |  |                       |   | 64,000  |                   |  |   | 86,000              |  |  |   | 86,000 | 
|                    |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 
|Total               |  | $                 | 550,000 |  |                       | $ | 234,313 |                   |  | $ | 315,687             |  |  | $ | 89,155 | 
|                    |  |                   |         |  |                       |   |         |                   |  |   |                     |  |  |   |        | 



|(1) | The unused portion is the amount upon which commitment fees are based.
|--- | ----------------------------------------------------------------------

|(2) | Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following were the carrying values (before debt issuance costs) and fair values of our 2015-1
Notes disclosed but not carried at fair value as of December 31, 2016 and 2015. No 2015-1 Notes were outstanding as of December 31, 2014:



|                         |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 
|------------------------ |  | ----------------- | ------- |  | ----------------- | - | ------- | -------------- |  | - | ---------- |  |  | - | ------- | 
|                         |  | December 31, 2016 |         |  | December 31, 2015 |  
|                         |  | Carrying Value    |         |  | Fair Value        |   |         | Carrying Value |  |   | Fair Value | 
|Aaa/AAA Class A-1A Notes |  | $                 | 160,000 |  |                   | $ | 160,072 |                |  | $ | 160,000    |  |  | $ | 157,200 | 
|Aaa/AAA Class A-1B Notes |  |                   | 40,000  |  |                   |   | 39,960  |                |  |   | 40,000     |  |  |   | 39,700  | 
|Aaa/AAA Class A-1C Notes |  |                   | 27,000  |  |                   |   | 26,951  |                |  |   | 27,000     |  |  |   | 26,823  | 
|Aa2 Class A-2 Notes      |  |                   | 46,000  |  |                   |   | 45,784  |                |  |   | 46,000     |  |  |   | 45,122  | 
|                         |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 
|Total                    |  | $                 | 273,000 |  |                   | $ | 272,767 |                |  | $ | 273,000    |  |  | $ | 268,845 | 
|                         |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 



72



---

##### Table of Contents

Equity Activity

There were $48,018 and $44,818 of commitments made to us during the years ended December 31, 2016 and 2015, respectively. As of
December 31, 2016 and 2015, we had $1,222,358 and $1,174,340, respectively, in total capital commitments from stockholders, of which $421,698 and $559,214, respectively, was unfunded, and subject to call by the Company. As of December 31,
2016 and 2015, current directors had committed $765 in capital commitments to us.

Shares issued as of December 31, 2016 and 2015,
were 41,702,318 and 31,524,083, respectively.

The following table summarizes activity in the number of shares of our common stock
outstanding during the years ended December 31, 2016, 2015 and 2014:



|                                      |  |                                  |            |  |      |  |            |      |  |  |            | 
|------------------------------------- |  | -------------------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|                                      |  | For the years ended December 31, |           
|                                      |  | 2016                             |            |  | 2015 |  |            | 2014 | 
|Shares outstanding, beginning of year |  |                                  | 31,524,083 |  |      |  | 17,932,697 |      |  |  | 9,575,990  | 
|Common stock issued                   |  |                                  | 10,162,898 |  |      |  | 13,584,508 |      |  |  | 8,354,987  | 
|Reinvestment of dividends             |  |                                  | 15,337     |  |      |  | 6,878      |      |  |  | 1,720      | 
|                                      |  |                                  |            |  |      |  |            |      |  |  |            | 
|Shares outstanding, end of year       |  |                                  | 41,702,318 |  |      |  | 31,524,083 |      |  |  | 17,932,697 | 
|                                      |  |                                  |            |  |      |  |            |      |  |  |            | 

Contractual Obligations

A summary of our significant contractual payment obligations was as follows as of December 31, 2016 and 2015:



|                      |  |                                         |         |  |                  |   |         |                  |  |   |                  |  |  |   |         | 
|--------------------- |  | --------------------------------------- | ------- |  | ---------------- | - | ------- | ---------------- |  | - | ---------------- |  |  | - | ------- | 
|                      |  | SPV Credit Facility and Credit Facility |         |  | 2015-1 Notes     |  
|Payment Due by Period |  | December 31,2016                        |         |  | December 31,2015 |   |         | December 31,2016 |  |   | December 31,2015 | 
|Less than 1 Year      |  | $                                       |        |  |                  | $ |        |                  |  | $ |                 |  |  | $ |        | 
|1-3 Years             |  |                                         |        |  |                  |   |        |                  |  |   |                 |  |  |   |        | 
|3-5 Years             |  |                                         | 421,885 |  |                  |   | 64,000  |                  |  |   |                 |  |  |   |        | 
|More than 5 Years     |  |                                         |        |  |                  |   | 170,313 |                  |  |   | 273,000          |  |  |   | 273,000 | 
|                      |  |                                         |         |  |                  |   |         |                  |  |   |                  |  |  |   |         | 
|Total                 |  | $                                       | 421,885 |  |                  | $ | 234,313 |                  |  | $ | 273,000          |  |  | $ | 273,000 | 
|                      |  |                                         |         |  |                  |   |         |                  |  |   |                  |  |  |   |         | 

As of December 31, 2016 and 2015, $252,885 and $170,313, respectively, of secured borrowings were
outstanding under the SPV Credit Facility, $169,000 and $64,000, respectively, were outstanding under the Credit Facility, and $273,000 and $273,000, respectively, of 2015-1 Notes were outstanding. For the
years ended December 31, 2016, 2015 and 2014, we incurred $16,462, $9,582 and $3,648, respectively, of interest expense and $1,253, $847 and $1,129, respectively, of unused commitment fees.

OFF BALANCE SHEET ARRANGEMENTS

In the
ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood
of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of December 31, 2016 and 2015, in Part II, Item 8 of this Form
10-K, for any such exposure.

We have in the past and may in the future become obligated to fund
commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments.



73



---

##### Table of Contents

We had the following unfunded commitments to fund delayed draw and revolving senior secured loans
as of the indicated dates:



|                                         |  |                        |        |  |                   |   |        | 
|---------------------------------------- |  | ---------------------- | ------ |  | ----------------- | - | ------ | 
|                                         |  | Principal Amount as of |       
|                                         |  | December 31, 2016      |        |  | December 31, 2015 |  
|Unfunded delayed draw commitments        |  | $                      | 35,704 |  |                   | $ | 20,695 | 
|Unfunded revolving term loan commitments |  |                        | 24,063 |  |                   |   | 3,906  | 
|                                         |  |                        |        |  |                   |   |        | 
|Total unfunded commitments               |  | $                      | 59,767 |  |                   | $ | 24,601 | 
|                                         |  |                        |        |  |                   |   |        | 

Pursuant to an undertaking by us in connection with the 2015-1 Debt
Securitization, we agreed to hold on an ongoing basis Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the
2015-1 Issuer for so long as any securities of the 2015-1 Issuer remains outstanding. As of December 31, 2016 and 2015, we were in compliance with this undertaking.

As of December 31, 2016, in addition to the amounts in the table above, we had remaining commitments to fund, from time to time,
capital to Credit Fund of up to $364,999. As of December 31, 2016, we had remaining commitments to fund, from time to time, mezzanine loans to Credit Fund of up to $37,617, of which $13,500 was available for borrowing based on the computation
of collateral to support the borrowings.

DIVIDENDS AND DISTRIBUTIONS TO COMMON STOCKHOLDERS

We have adopted a dividend reinvestment plan that provides for reinvestment of any distributions on behalf of our stockholders, for those who
have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and we declare a cash dividend or distribution, the stockholders who have elected to participate in the dividend reinvestment plan
would have their cash dividends or distributions automatically reinvested in additional shares of our common stock, rather than receiving cash. Prior to a Qualified IPO, we intend to use primarily newly issued shares of its common stock to implement
the plan issued at the net asset value per share most recently determined by the Board of Directors. After a Qualified IPO, we intend to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or
greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the market value per share is less than the net asset value per share as of the close of business on the
relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise.

The following table summarizes our dividends declared and payable since inception through March 21, 2017:



|                   |  |                    |  |                   |  |                 |      |     |             |   |        |                             |  |  |      |  
|------------------ |  | ------------------ |  | ----------------- |  | --------------- | ---- | --- | ----------- | - | ------ | --------------------------- |  |  | ---- | -
|DateDeclared       |  | Record
Date        |  | Payment
Date      |  | Per ShareAmount |      |     | TotalAmount |   |        | AnnualizedDividend Yield(1) | 
|March 13, 2014     |  | March 31, 2014     |  | April 14, 2014    |  | $               | 0.19 |     |             | $ | 2,449  |                             |  |  | 4.76 | %
|June 26, 2014      |  | June 30, 2014      |  | July 14, 2014     |  | $               | 0.27 |     |             | $ | 3,481  |                             |  |  | 5.52 | %
|September 12, 2014 |  | September 18, 2014 |  | October 9, 2014   |  | $               | 0.44 |     |             | $ | 5,956  |                             |  |  | 9.23 | %
|December 19, 2014  |  | December 29, 2014  |  | January 26, 2015  |  | $               | 0.35 |     |             | $ | 6,276  |                             |  |  | 8.17 | %
|March 11, 2015     |  | March 13, 2015     |  | April 17, 2015    |  | $               | 0.37 |     |             | $ | 7,833  |                             |  |  | 8.58 | %
|June 24, 2015      |  | June 30, 2015      |  | July 22, 2015     |  | $               | 0.37 |     |             | $ | 9,902  |                             |  |  | 9.03 | %
|September 24, 2015 |  | September 24, 2015 |  | October 22, 2015  |  | $               | 0.42 |     |             | $ | 11,670 |                             |  |  | 8.91 | %
|December 29, 2015  |  | December 29, 2015  |  | January 22, 2016  |  | $               | 0.40 |     |             | $ | 12,610 |                             |  |  | 8.97 | %
|December 29, 2015  |  | December 29, 2015  |  | January 22, 2016  |  | $               | 0.18 | (2) |             | $ | 5,674  |                             |  |  | 4.03 | %
|March 10, 2016     |  | March 14, 2016     |  | April 22, 2016    |  | $               | 0.40 |     |             | $ | 13,337 |                             |  |  | 9.26 | %
|June 8, 2016       |  | June 8, 2016       |  | July 22, 2016     |  | $               | 0.40 |     |             | $ | 13,943 |                             |  |  | 9.23 | %
|September 28, 2016 |  | September 28, 2016 |  | October 24, 2016  |  | $               | 0.40 |     |             | $ | 15,917 |                             |  |  | 9.37 | %
|December 29, 2016  |  | December 29, 2016  |  | January 24, 2017  |  | $               | 0.41 |     |             | $ | 17,098 |                             |  |  | 9.09 | %
|December 29, 2016  |  | December 29, 2016  |  | January 24, 2017  |  | $               | 0.07 | (2) |             | $ | 2,919  |                             |  |  | 1.55 | %
|March 20, 2017     |  | March 20, 2017     |  | April 24, 2017(3) |  | $               | 0.41 |     |             | $ | 17,100 |                             |  |  | 9.07 | %



74



---

##### Table of Contents

|(1) | Annualized dividend yield is calculated by dividing the declared dividend by the weighted average of the net asset value at the beginning of the quarter and the capital called during the quarter and annualizing over 4
quarterly periods.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Represents a special dividend.
|--- | ------------------------------

|(3) | Payable on or about April 24, 2017.
|--- | -----------------------------------

CRITICAL ACCOUNTING POLICIES

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those
relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in connection with our Risk Factors in Part I, Item 1A of this Form
10-K.

Fair Value Measurements

The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value
Measurement(ASC 820). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values
securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with
respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e. consensus
pricing). When doing so, the Company determines whether the quote obtained is sufficient according to US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be
utilized including valuation techniques typically utilized for illiquid securities/instruments.

Securities/instruments that are illiquid
or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Board of Directors, does not represent fair value shall each be valued as of
the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent
transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals
responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit
statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee
comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that
each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of managements preliminary valuation and
conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the Audit Committee) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any
recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the
portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.



75



---

##### Table of Contents

All factors that might materially impact the value of an investment are considered, including,
but not limited to the assessment of the following factors, as relevant:



| |  |  | the nature and realizable value of any collateral;
| | - |  | --------------------------------------------------



| |  |  | call features, put features and other relevant terms of debt;
| | - |  | -------------------------------------------------------------



| |  |  | the portfolio companys leverage and ability to make payments;
| | - |  | --------------------------------------------------------------



| |  |  | the portfolio companys public or private credit rating;
| | - |  | --------------------------------------------------------



| |  |  | the portfolio companys actual and expected earnings and discounted cash flow;
| | - |  | ------------------------------------------------------------------------------



| |  |  | prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the markets in which the portfolio company does business and recent economic and/or market events; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | comparisons to comparable transactions and publicly traded securities.
| | - |  | ----------------------------------------------------------------------

Investment performance
data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value
of the Companys investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the
investments existed, and it is reasonably possible that the difference could be material.

In addition, changes in the market environment
and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial
statements as of December 31, 2016 and 2015.

US GAAP establishes a hierarchical disclosure framework which ranks the level of
observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the
marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher
degree of market price observability and a lesser degree of judgment applied in determining fair value.

Investments measured and reported
at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:



| |  |  | Level 1inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments included in Level 1 generally
include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could
reasonably impact the quoted price.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 2inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this
category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain
over-the-counter derivatives where the fair value is based on observable inputs.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



76



---

##### Table of Contents

| |  |  | Level 3inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation.
Financial instruments that are included in this category generally include investments in privately-held entities, collateralized loan obligations, and certain
over-the-counter derivatives where the fair value is based on unobservable inputs.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an
investments level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Advisers assessment of the significance of a particular input to the fair
value measurement in its entirety requires judgment, and considers factors specific to the investment.

Transfers between levels, if any,
are recognized at the beginning of the quarter in which the transfers occur.

The Company generally uses the following framework when
determining the fair value of investments that are categorized as Level 3:

Investments in debt securities are initially evaluated to
determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value
(EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to
value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach
typically uses a discounted cash flow analysis of the portfolio company.

Investments in debt securities that do not have sufficient
coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.

Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash
flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant securitys contractual interest, fees and principal payments plus the assumption of full principal recovery at the
securitys expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.

Investments in structured finance obligations are generally valued using a discounted cash flow and/or consensus pricing.

Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes EBITDA multiples
of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.

Investments in Credit Funds subordinated loan and members interest are valued using the net asset value of the Companys
ownership interest in the funds and investments in Credit Funds mezzanine loans are valued using discounted cash flow analysis with expected repayment rate of principal and interest.

The significant unobservable inputs used in the fair value measurement of the Companys investments in first and second lien debt
securities are discount rates and indicative quotes. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes in isolation may result in a significantly lower
fair value measurement.



77



---

##### Table of Contents

The significant unobservable inputs used in the fair value measurement of the Companys
investments in structured finance obligations are discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases in discount rates, default rates or prepayment rates in isolation would result in a
significantly lower fair value measurement, while a significant increase in recovery rates in isolation would result in a significantly higher fair value. Significant decreases in indicative quotes in isolation may result in a significantly lower
fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Companys investments in
equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples would result in a significantly
lower fair value measurement.

The carrying values of the secured borrowings and 2015-1 Notes
approximate their respective fair values and are categorized as Level 3 within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of
the Companys secured borrowings are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement. The fair value determination of the Companys
2015-1 Notes was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as
defined in the accounting guidance for fair value measurement.

The carrying value of other financial assets and liabilities approximates
their fair value based on the short term nature of these items.

See Note 3 to the consolidated financial statements in Part II,
Item 8 of this Form 10-K for further information on fair value measurements.

Use of Estimates

The preparation of consolidated financial statements in Part II, Item 8 of this Form
10-K in conformity with US GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the statements and the reported amounts of revenues and expenses during the reporting period. Managements estimates are based on historical experiences and other factors, including expectations of future events that management believes
to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Companys accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact
on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements in Part II, Item 8 of this Form 10-K. Actual results could differ from these estimates and such differences could be material.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net
proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off
during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the Consolidated Statements of Operations in Part II, Item 8 of this
Form 10-K reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.



78



---

##### Table of Contents

Revenue Recognition

Interest from Investments and Realized Gain/Loss on Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and
premiums to par value on securities purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of investments represents the original cost, including
origination fees, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit
using the specific identification method.

The Company may have loans in its portfolio that contain payment-in-kind (PIK) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization
dates, and is generally due at maturity.

Interest income from investments in the equity class of collateralized loan
obligation (CLO) funds, which we refer to as structured finance obligations, is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC 325-40, Beneficial Interests in Securitized Financials Assets. We monitor the expected cash inflows from our CLO equity investments, including the expected residual payments and the effective yield is
determined and updated at least quarterly. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases,
defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted the Companys estimates if the information was known at the time. As a
result, actual results may differ significantly from these estimates.

Other Income

Other income may include income such as consent, waiver, amendment, syndication and prepayment fees associated with the Companys
investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for
guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the Consolidated Statements of Assets and Liabilities
included in Part II, Item 8 of this Form 10-K.

Non-Accrual Income

Loans are generally placed on non-accrual status when principal or interest payments are past
due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status.
Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon managements judgment regarding collectability.
Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in managements judgment, are likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

Income Taxes

For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required
distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset
diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.



79



---

##### Table of Contents

The minimum distribution requirements applicable to RICs require the Company to distribute to its
stockholders at least 90% of its investment company taxable income (ICTI), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year
distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed
income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income
retained by the Company that is subject to corporate income tax is considered to have been distributed. the Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to
determine whether the tax positions are more-likely than not to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.

The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the
tax return of the Company.

Capital Calls and Dividends and Distributions to Common Stockholders

The Company records the shares issued in connection with capital calls as of the effective date of the capital call. To the extent that the
Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by
the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to
retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan that provides for reinvestment of any
distributions on behalf of its stockholders, for those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and the Company declares a cash dividend or distribution, the stockholders
who have elected to participate in the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys common stock, rather than receiving cash. Prior to a Qualified
IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a Qualified IPO, the Company intends to use
primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the
market value per share is less than the net asset value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company
instructs the plan administrator otherwise.



80



---

##### Table of Contents

RELATED PARTY TRANSACTIONS

Investment Advisory Agreement

On
April 3, 2013, the Companys Board of Directors, including a majority of the Independent Directors, approved the Investment Advisory Agreement between the Company and the Investment Adviser in accordance with, and on the basis of an
evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The initial term of the Investment Advisory Agreement is two years from April 3, 2013 and, unless terminated earlier, the Investment
Advisory Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On
March 20, 2017, the Companys Board of Directors, including a majority of the Independent Directors, approved the continuance of the Advisory Agreement for a one year period. The Investment Advisory Agreement will automatically terminate
in the event of an assignment and may be terminated by either party without penalty upon at least 60 days written notice to the other party. Subject to the overall supervision of the Board of Directors, the Investment Adviser provides
investment advisory services to the Company. For providing these services, the Investment Adviser receives fees from the Company consisting of two componentsa base management fee and an incentive fee.

Prior to a Qualified IPO, the base management fees are calculated and payable quarterly in arrears at an annual rate of 1.50% of the average
daily gross assets of the Company for the period adjusted for share issuances or repurchases, excluding any cash and cash equivalents and including assets acquired through the incurrence of debt from use of the SPV Credit Facility, Credit Facility
and 2015-1 Notes (see Note 6, Borrowings, and Note 7, 2015-1 Notes, in Part II, Item 8 of this Form 10-K). For purposes of
this calculation, cash and cash equivalents include any temporary investments in cash-equivalents, U.S. government securities and other high quality investment grade debt investments that mature in 12 months or less from the date of investment. Base
management fees for any partial quarter are prorated. As such, base management fees for the year ended December 31, 2013 were calculated commencing after May 8, 2013, the date the Company first called capital from investors. The Investment
Adviser waived its right to receive one-third (0.50%) of the base management fees prior to a Qualified IPO. The fee waiver will terminate if and when a Qualified IPO has been consummated. Any waived base
management fees are not subject to recoupment by the Investment Adviser.

The incentive fee has two parts. The first part is calculated
and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains
as of the end of each calendar year.

Pre-incentive fee net investment income means interest
income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from
portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit
facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income does not include, in the case of
investments with a deferred interest feature (such as OID, debt instruments with pay-in-kind interest and zero coupon securities), accrued income that the Company has
not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Prior to any Qualified IPO of the Companys common stock, pre-incentive fee net investment
income, expressed as a rate of return on the average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, is compared to a hurdle rate of 1.50% per quarter (6% annualized).
Hurdle Calculation Value means, on any given day, the sum of (x) the value of net assets as of the end of the calendar quarter immediately preceding such day plus (y) the aggregate amount of capital drawn from investors (or
reinvested in us pursuant to a dividend reinvestment plan) from the beginning of the current quarter to such



81



---

##### Table of Contents

day minus (z) the aggregate amount of distributions (including share repurchases) made by the Company from the beginning of the current quarter to such day but only to the extent such
distributions were not declared and accounted for on the books and records in a previous quarter.

The Company pays its Investment Adviser
an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:



| |  |  | no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment
income does not exceed the hurdle of 1.50%;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that
exceeds the hurdle but is less than 1.875% in any calendar quarter (7.50% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle but is less
than 1.875%) as the catch-up. The catch-up is meant to provide the Investment Adviser with approximately 20% of the Companys pre-incentive fee net investment income as if a hurdle did not apply if this net investment income exceeds 1.875% in any calendar quarter; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 20% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) will be payable to the Investment Adviser.
This reflects that once the hurdle is reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to the Investment
Adviser.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or
upon termination of the Investment Advisory Agreement, as of the termination date), and equals 20% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses
on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be
calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.

The Company will defer payment of any incentive fee otherwise earned by the Investment Adviser if, during the most recent four full calendar
quarter periods (or, if less, the number of full calendar quarters completed since the initial drawdown of capital from the stockholders, Initial Drawdown) ending on or prior to the date such payment is to be made, the sum of
(a) the aggregate distributions to stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 6.0% of net assets
(defined as gross assets less indebtedness) at the beginning of such period, provided, that such percentage will be appropriately prorated during the four full calendar quarters immediately following the Initial Drawdown. These calculations are
adjusted for any share issuances or repurchases. Any deferred incentive fees are carried over for payment in subsequent calculation periods. The Investment Adviser may earn an incentive fee under the Investment Advisory Agreement on the
Companys repurchase of debt issued by the Company at a gain.

Our Investment Adviser has not assumed any responsibility to us other
than to render the services described in the Investment Advisory Agreement, and it is not responsible for any action of our Board in declining to follow our Investment Advisers advice or recommendations. Pursuant to the Investment Advisory
Agreement, our Investment Adviser and its managers, officers, employees, agents, controlling persons and any other person or entity affiliated with it are not liable to us for any action taken or omitted to be taken by the Adviser in connection with
the performance of any of its duties or obligations under the Investment Advisory Agreement or otherwise as an investment adviser of the Company (except to the extent specified in Section 36(b) of the Investment Company Act concerning loss
resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation for services). We have agreed to the fullest extent permitted by law, to provide indemnification and
the right to the advancement of expenses, to



82



---

##### Table of Contents

each person who was or is made a party or is threatened to be made a party to or is involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that he/she is or was a member, manager, officer, employee, agent, controlling person or any other person or entity affiliated with the Adviser with respect to all
damages, liabilities, costs and expenses resulting from acts of our Investment Adviser in the performance of their duties under the Investment Advisory Agreement, other than acts not in good faith with the reasonable belief that the conduct was in,
or not opposed to, the best interest of the Company, and conduct constituting gross negligence, bad faith, reckless disregard, or willful misfeasance. These protections may lead our Investment Adviser to act in a riskier manner when acting on our
behalf than it would when acting for its own account.

On April 3, 2013, the Investment Adviser entered into a personnel agreement
with Carlyle Employee Co., pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.

Administration Agreement

On
April 3, 2013, the Companys Board of Directors approved the Administration Agreement between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements
equal to an amount that reimburses the Administrator for its costs and expenses and the Companys allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the
Companys allocable portion of the compensation paid to or compensatory distributions received by the Companys officers (including the Chief Compliance Officer and Chief Financial Officer) and respective staff who provide services to the
Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Companys Sarbanes-Oxley Act internal control assessment. Reimbursement under the Administration
Agreement occurs quarterly in arrears.

The initial term of the Administration Agreement is two years from April 3, 2013 and, unless
terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote
of the outstanding voting securities of the Company and (ii) the vote of a majority of the Companys Independent Directors. On March 20, 2017, the Companys Board of Directors, including a majority of the Independent Directors,
approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60
days written notice to the other party.

Sub-Administration Agreements

On April 3, 2013, the Administrator entered into the Carlyle Sub-Administration Agreements with
Carlyle Employee Co. and CELF. Pursuant to the Carlyle Sub-Administration Agreements, Carlyle Employee Co. and CELF provide the Administrator with access to personnel.

On April 3, 2013, the Administrator entered into the State Street Sub-Administration Agreement
with State Street. On March 20, 2017, the Companys Board of Directors, including a majority of the Independent Directors, approved an amendment to the State Street Sub-Administration Agreement.
The initial term of the State Street Sub-Administration Agreement ends on April 1, 2017 and, unless terminated earlier, the State Street Sub-Administration
Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting
securities of the Company and (ii) the vote of a majority of the Companys Independent Directors. The State Street Sub-Administration Agreement may be terminated upon at least 60 days written
notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.



83



---

##### Table of Contents

Placement Fees

On April 3, 2013, the Company entered into a placement fee arrangement with TCG Securities, L.L.C. (TCG), a licensed
broker-dealer and an affiliate of the Investment Adviser, which may require certain stockholders to pay a placement fee to TCG for TCGs services.

Board of Directors

The
Companys Board of Directors currently consists of five members, three of whom are Independent Directors. On April 3, 2013, the Board of Directors also established an Audit Committee consisting of its Independent Directors, and may
establish additional committees in the future.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.

Valuation Risk

Our investments
may not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy. There is no single standard for determining fair value in good
faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to
the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these
estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.

Interest Rate Risk

As of
December 31, 2016, on a fair value basis, approximately 1% of our debt investments bear interest at a fixed rate and approximately 99% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate
floors. Interest rates on the investments held within our portfolio of investments are typically based on floating LIBOR, with many of these investments also having a LIBOR floor. Additionally, our Facilities are also subject to floating interest
rates and are currently paid based on floating LIBOR rates.

Interest rate sensitivity refers to the change in earnings that may result
from changes in the level of interest rates. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.

The following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or
decrease by 100, 200 or 300 basis points. Interest income is calculated as revenue from interest generated from our settled portfolio of investments held as of December 31, 2016 and 2015, excluding structured finance obligations and Credit
Fund. These hypothetical calculations are based on a model of the settled investments in our portfolio, excluding structured finance obligations and Credit Fund, held as of December 31, 2016 and 2015, and are only adjusted for assumed changes
in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings and 2015-1 Notes as of December 31, 2016 and
2015 and based on the terms of our Facilities and 2015-1 Notes. Interest expense on our Facilities and 2015-1 Notes is calculated using the interest rate as of
December 31, 2016 and 2015, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion of our investments with borrowings and the interest rates paid on our borrowings may impact significantly our
net interest income.



84



---

##### Table of Contents

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage
interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to
changes in interest rates.

Based on our Consolidated Statements of Assets and Liabilities as of December 31, 2016 and 2015, the
following table shows the annual impact on net investment income of base rate changes in interest rates for our settled investments (considering interest rate floors for variable rate instruments), excluding structured finance obligations and Credit
Fund, and outstanding secured borrowings and 2015-1 Notes assuming no changes in our investment and borrowing structure:



|                      |  |                         |        |   |                         |   |         |                     |  |   |                |  |  |                 |        |  |                     |   |         |   |  |   |        | 
|--------------------- |  | ----------------------- | ------ | - | ----------------------- | - | ------- | ------------------- |  | - | -------------- |  |  | --------------- | ------ |  | ------------------- | - | ------- | - |  | - | ------ | 
|                      |  | As of December 31, 2016 |        |   | As of December 31, 2015 |  
|Basis Point Change    |  | InterestIncome          |        |   | InterestExpense         |   |         | NetInvestmentIncome |  |   | InterestIncome |  |  | InterestExpense |        |  | NetInvestmentIncome |  
|Up 300 basis points   |  | $                       | 40,324 |   |                         | $ | (20,037 | )                   |  | $ | 20,287         |  |  | $               | 26,335 |  |                     | $ | (14,409 | ) |  | $ | 11,926 | 
|Up 200 basis points   |  | $                       | 26,848 |   |                         | $ | (13,358 | )                   |  | $ | 13,490         |  |  | $               | 16,271 |  |                     | $ | (9,606  | ) |  | $ | 6,665  | 
|Up 100 basis points   |  | $                       | 13,372 |   |                         | $ | (6,679  | )                   |  | $ | 6,693          |  |  | $               | 6,207  |  |                     | $ | (4,803  | ) |  | $ | 1,404  | 
|Down 100 basis points |  | $                       | (132   | ) |                         | $ | 6,282   |                     |  | $ | 6,150          |  |  | $               |       |  |                     | $ | 2,826   |   |  | $ | 2,826  | 
|Down 200 basis points |  | $                       | (132   | ) |                         | $ | 6,282   |                     |  | $ | 6,150          |  |  | $               |       |  |                     | $ | 2,826   |   |  | $ | 2,826  | 
|Down 300 basis points |  | $                       | (132   | ) |                         | $ | 6,282   |                     |  | $ | 6,150          |  |  | $               |       |  |                     | $ | 2,826   |   |  | $ | 2,826  | 



85



---

##### Table of Contents

Item 8. Financial Statements and Supplementary Data

TCG BDC, INC.

INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                       |  |  |     | 
|------------------------------------------------------------------------------------------------------ |  |  | --- | 
|Report of Independent Registered Public Accounting
Firm                                                |  |  | 87  | 
|                                                                                                       | 
|Consolidated Statements of Assets and Liabilities as of December 31,
 2016 and 2015                    |  |  | 88  | 
|                                                                                                       | 
|Consolidated Statements of Operations for the years ended December 31,
 2016, 2015 and 2014            |  |  | 89  | 
|                                                                                                       | 
|Consolidated Statements of Changes in Net Assets for the years ended December 31,
 2016, 2015 and 2014 |  |  | 90  | 
|                                                                                                       | 
|Consolidated Statements of Cash Flows for the years ended December 31,
 2016, 2015 and 2014            |  |  | 91  | 
|                                                                                                       | 
|Consolidated Schedules of Investments as of December 
31, 2016 and 2015                                |  |  | 92  | 
|                                                                                                       | 
|Notes to Consolidated Financial Statements                                                             |  |  | 109 | 



86



---

##### Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of

TCG BDC, Inc.

We have audited the accompanying consolidated statements of assets and liabilities of TCG BDC, Inc. (the Company), including the
consolidated schedules of investments, as of December 31, 2016 and 2015, and the related consolidated statements of operations, cash flows and changes in net assets for the years ended December 31, 2016, 2015 and 2014. These financial
statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our December 31, 2016 audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and
in accordance with auditing standards generally accepted in the United States of America. We conducted our December 31, 2015 and 2014 audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Companys internal control over
financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2016 by
correspondence with the custodian and debt agents. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,
the financial statements referred to above present fairly, in all material respects, the consolidated financial position of TCG BDC, Inc. at December 31, 2016 and 2015, and the consolidated results of its operations, its cash flows, and the
changes in its net assets for the years ended December 31, 2016, 2015 and 2014, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

New York, NY

March 21, 2017



87



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollar amounts in thousands, except per share data)



|                                                                                                                                            |  |                  |           |   |                  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                                                                            |  | December 31,2016 |           |   | December 31,2015 |  
|ASSETS                                                                                                                                      |  |                  |           |   |                  |   |           |  
|Investments, at fair value                                                                                                                  |  |                  |           |   |                  |   |           |  
|Investmentsnon-controlled/non-affiliated, at fair value (amortized cost of $1,332,596 and $1,079,720, respectively)                        |  | $                | 1,323,102 |   |                  | $ | 1,052,666 |  
|Investmentscontrolled/affiliated, at fair value (amortized cost of $97,385 and $0,
respectively)                                           |  |                  | 99,657    |   |                  |   |          |  
|                                                                                                                                            |  |                  |           |   |                  |   |           |  
|Total investments, at fair value (amortized cost of $1,429,981 and $1,079,720,
respectively)                                                |  |                  | 1,422,759 |   |                  |   | 1,052,666 |  
|Cash and cash equivalents                                                                                                                   |  |                  | 38,489    |   |                  |   | 41,837    |  
|Receivable for investment sold                                                                                                              |  |                  | 19,750    |   |                  |   | 1,987     |  
|Deferred financing costs                                                                                                                    |  |                  | 3,308     |   |                  |   | 3,877     |  
|Interest receivable
non-controlled/non-affiliated investments                                                                               |  |                  | 3,407     |   |                  |   | 3,279     |  
|Interest and dividend receivable from controlled/affiliated investments                                                                     |  |                  | 2,400     |   |                  |   |          |  
|Prepaid expenses and other assets                                                                                                           |  |                  | 42        |   |                  |   | 386       |  
|                                                                                                                                            |  |                  |           |   |                  |   |           |  
|Total assets                                                                                                                                |  | $                | 1,490,155 |   |                  | $ | 1,104,032 |  
|                                                                                                                                            |  |                  |           |   |                  |   |           |  
|LIABILITIES                                                                                                                                 |  |                  |           |   |                  |   |           |  
|Secured borrowings (Note 6)                                                                                                                 |  | $                | 421,885   |   |                  | $ | 234,313   |  
|2015-1 Notes payable, net of unamortized debt issuance
costs of $2,151 and $2,356, respectively (Note 7)                                    |  |                  | 270,849   |   |                  |   | 270,644   |  
|Due to Investment Adviser                                                                                                                   |  |                  | 215       |   |                  |   | 189       |  
|Interest and credit facility fees payable (Notes 6 and 7)                                                                                   |  |                  | 3,599     |   |                  |   | 2,577     |  
|Dividend payable (Note 9)                                                                                                                   |  |                  | 20,018    |   |                  |   | 18,284    |  
|Base management and incentive fees payable (Note 4)                                                                                         |  |                  | 8,157     |   |                  |   | 5,277     |  
|Administrative service fees payable (Note 4)                                                                                                |  |                  | 137       |   |                  |   | 97        |  
|Other accrued expenses and liabilities                                                                                                      |  |                  | 1,158     |   |                  |   | 925       |  
|                                                                                                                                            |  |                  |           |   |                  |   |           |  
|Total liabilities                                                                                                                           |  |                  | 726,018   |   |                  |   | 532,306   |  
|                                                                                                                                            |  |                  |           |   |                  |   |           |  
|Commitments and contingencies (Notes 8 and 11)                                                                                              |  |                  |           |   |                  |   |           |  
|NET ASSETS                                                                                                                                  |  |                  |           |   |                  |   |           |  
|Common stock, $0.01 par value; 200,000,000 shares authorized; 41,702,318 shares and 31,524,083
shares, respectively, issued and outstanding |  |                  | 417       |   |                  |   | 315       |  
|Paid-in capital in excess of par value                                                                                                      |  |                  | 799,580   |   |                  |   | 613,944   |  
|Offering costs                                                                                                                              |  |                  | (74       | ) |                  |   | (74       | )
|Accumulated net investment income (loss), net of cumulative dividends of $129,065 and $65,851,
respectively                                 |  |                  | (3,207    | ) |                  |   | (12,994   | )
|Accumulated net realized gain (loss)                                                                                                        |  |                  | (25,357   | ) |                  |   | (2,411    | )
|Accumulated net unrealized appreciation (depreciation)                                                                                      |  |                  | (7,222    | ) |                  |   | (27,054   | )
|                                                                                                                                            |  |                  |           |   |                  |   |           |  
|Total net assets                                                                                                                            |  | $                | 764,137   |   |                  | $ | 571,726   |  
|                                                                                                                                            |  |                  |           |   |                  |   |           |  
|NET ASSETS PER SHARE                                                                                                                        |  | $                | 18.32     |   |                  | $ | 18.14     |  
|                                                                                                                                            |  |                  |           |   |                  |   |           |  

The accompanying notes are an integral part of these consolidated financial statements.



88



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollar amounts in thousands, except per share data)



|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                                                  |  | For the years endedDecember 31, |           
|                                                                                                  |  | 2016                            |            |   | 2015 |   |            | 2014 | 
|Investment income:                                                                                |  |                                 |            |   |      |   |            |      |  |   |            |  
|Interest income from
non-controlled/non-affiliated investments                                    |  | $                               | 101,196    |   |      | $ | 68,356     |      |  | $ | 32,740     |  
|Other income from
non-controlled/non-affiliated investments                                       |  |                                 | 6,635      |   |      |   | 834        |      |  |   | 244        |  
|Interest income from controlled/affiliated investments                                            |  |                                 | 1,465      |   |      |   |           |      |  |   |           |  
|Dividend income from controlled/affiliated investments                                            |  |                                 | 1,675      |   |      |   |           |      |  |   |           |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Total investment income                                                                           |  |                                 | 110,971    |   |      |   | 69,190     |      |  |   | 32,984     |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Expenses:                                                                                         |  |                                 |            |   |      |   |            |      |  |   |            |  
|Base management fees (Note 4)                                                                     |  |                                 | 18,539     |   |      |   | 13,361     |      |  |   | 6,559      |  
|Incentive fees (Note 4)                                                                           |  |                                 | 14,905     |   |      |   | 8,881      |      |  |   | 3,578      |  
|Professional fees                                                                                 |  |                                 | 2,103      |   |      |   | 1,845      |      |  |   | 2,169      |  
|Administrative service fees (Note 4)                                                              |  |                                 | 703        |   |      |   | 595        |      |  |   | 626        |  
|Interest expense (Notes 6 and 7)                                                                  |  |                                 | 16,462     |   |      |   | 9,582      |      |  |   | 3,648      |  
|Credit facility fees (Note 6)                                                                     |  |                                 | 2,573      |   |      |   | 1,898      |      |  |   | 3,052      |  
|Directors fees and expenses                                                                      |  |                                 | 553        |   |      |   | 419        |      |  |   | 395        |  
|Other general and administrative                                                                  |  |                                 | 1,692      |   |      |   | 1,539      |      |  |   | 883        |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Total expenses                                                                                    |  |                                 | 57,530     |   |      |   | 38,120     |      |  |   | 20,910     |  
|Waiver of base management fees (Note 4)                                                           |  |                                 | 6,180      |   |      |   | 4,454      |      |  |   | 2,186      |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Net expenses                                                                                      |  |                                 | 51,350     |   |      |   | 33,666     |      |  |   | 18,724     |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Net investment income (loss)                                                                      |  |                                 | 59,621     |   |      |   | 35,524     |      |  |   | 14,260     |  
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on
investments: |  |                                 |            |   |      |   |            |      |  |   |            |  
|Net realized gain (loss) on
investmentsnon-controlled/non-affiliated                             |  |                                 | (9,644     | ) |      |   | 1,164      |      |  |   | 72         |  
|Net change in unrealized appreciation (depreciation) on investmentsnon-controlled/non-affiliated |  |                                 | 17,560     |   |      |   | (18,015    | )    |  |   | (8,718     | )
|Net change in unrealized appreciation (depreciation) on
investmentscontrolled/affiliated         |  |                                 | 2,272      |   |      |   |           |      |  |   |           |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on
investments  |  |                                 | 10,188     |   |      |   | (16,851    | )    |  |   | (8,646     | )
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Net increase (decrease) in net assets resulting from operations                                   |  | $                               | 69,809     |   |      | $ | 18,673     |      |  | $ | 5,614      |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Basic and diluted earnings per common share (Note 9)                                              |  | $                               | 1.93       |   |      | $ | 0.75       |      |  | $ | 0.43       |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Weighted-average shares of common stock outstandingBasic and Diluted (Note 9)                    |  |                                 | 36,152,390 |   |      |   | 24,830,200 |      |  |   | 13,091,544 |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  
|Dividends declared per common share (Note 9)                                                      |  | $                               | 1.68       |   |      | $ | 1.74       |      |  | $ | 1.25       |  
|                                                                                                  |  |                                 |            |   |      |   |            |      |  |   |            |  

The accompanying notes are an integral part of these consolidated financial statements.



89



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollar amounts in thousands)



|                                                                                |  |                                 |         |   |      |   |         |      |  |   |         |  
|------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                                |  | For the years endedDecember 31, |        
|                                                                                |  | 2016                            |         |   | 2015 |   |         | 2014 | 
|Increase (decrease) in net assets resulting from operations:                    |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net investment income (loss)                                                    |  | $                               | 59,621  |   |      | $ | 35,524  |      |  | $ | 14,260  |  
|Net realized gain (loss) on investments                                         |  |                                 | (9,644  | ) |      |   | 1,164   |      |  |   | 72      |  
|Net change in unrealized appreciation (depreciation) on investments             |  |                                 | 19,832  |   |      |   | (18,015 | )    |  |   | (8,718  | )
|                                                                                |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net increase (decrease) in net assets resulting from operations                 |  |                                 | 69,809  |   |      |   | 18,673  |      |  |   | 5,614   |  
|                                                                                |  |                                 |         |   |      |   |         |      |  |   |         |  
|Capital transactions:                                                           |  |                                 |         |   |      |   |         |      |  |   |         |  
|Common stock issued                                                             |  |                                 | 185,537 |   |      |   | 262,354 |      |  |   | 164,769 |  
|Reinvestment of dividends                                                       |  |                                 | 279     |   |      |   | 131     |      |  |   | 34      |  
|Dividends declared (Note 12)                                                    |  |                                 | (63,214 | ) |      |   | (47,689 | )    |  |   | (18,162 | )
|                                                                                |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net increase (decrease) in net assets resulting from capital share transactions |  |                                 | 122,602 |   |      |   | 214,796 |      |  |   | 146,641 |  
|                                                                                |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net increase (decrease) in net assets                                           |  |                                 | 192,411 |   |      |   | 233,469 |      |  |   | 152,255 |  
|                                                                                |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net assets at beginning of year                                                 |  |                                 | 571,726 |   |      |   | 338,257 |      |  |   | 186,002 |  
|                                                                                |  |                                 |         |   |      |   |         |      |  |   |         |  
|Net assets at end of year                                                       |  | $                               | 764,137 |   |      | $ | 571,726 |      |  | $ | 338,257 |  
|                                                                                |  |                                 |         |   |      |   |         |      |  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



90



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)



|                                                                                                                                                 |  |                                 |          |   |      |   |          |      |  |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                                                                                                 |  | For the years endedDecember 31, |         
|                                                                                                                                                 |  | 2016                            |          |   | 2015 |   |          | 2014 | 
|Cash flows from operating activities:                                                                                                            |  |                                 |          |   |      |   |          |      |  |   |          |  
|Net increase (decrease) in net assets resulting from operations                                                                                  |  | $                               | 69,809   |   |      | $ | 18,673   |      |  | $ | 5,614    |  
|Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net
cash provided by (used in) operating activities: |  |                                 |          |   |      |   |          |      |  |   |          |  
|Amortization of deferred financing costs                                                                                                         |  |                                 | 1,417    |   |      |   | 1,051    |      |  |   | 1,820    |  
|Net accretion of discount on investments                                                                                                         |  |                                 | (5,605   | ) |      |   | (3,035   | )    |  |   | (1,108   | )
|Net realized (gain) loss on investments                                                                                                          |  |                                 | 9,644    |   |      |   | (1,164   | )    |  |   | (72      | )
|Net change in unrealized (appreciation) depreciation on investments                                                                              |  |                                 | (19,832  | ) |      |   | 18,015   |      |  |   | 8,718    |  
|Cost of investments purchased and change in payable for investments purchased                                                                    |  |                                 | (755,654 | ) |      |   | (653,154 | )    |  |   | (565,432 | )
|Proceeds from sales and repayments of investments and change in receivable for investments
sold                                                  |  |                                 | 383,591  |   |      |   | 228,004  |      |  |   | 121,229  |  
|Changes in operating assets:                                                                                                                     |  |                                 |          |   |      |   |          |      |  |   |          |  
|Interest receivable                                                                                                                              |  |                                 | (1,203   | ) |      |   | 1,233    |      |  |   | (2,828   | )
|Dividend receivable                                                                                                                              |  |                                 | (1,325   | ) |      |   |         |      |  |   |         |  
|Prepaid expenses and other assets                                                                                                                |  |                                 | 344      |   |      |   | (229     | )    |  |   | (117     | )
|Changes in operating liabilities:                                                                                                                |  |                                 |          |   |      |   |          |      |  |   |          |  
|Due to Investment Adviser                                                                                                                        |  |                                 | 26       |   |      |   | 148      |      |  |   | 25       |  
|Interest and credit facility fees payable                                                                                                        |  |                                 | 1,022    |   |      |   | 1,384    |      |  |   | 643      |  
|Base management and incentive fees payable                                                                                                       |  |                                 | 2,880    |   |      |   | (1,042   | )    |  |   | 5,694    |  
|Administrative service fees payable                                                                                                              |  |                                 | 40       |   |      |   | 6        |      |  |   | (40      | )
|Other accrued expenses and liabilities                                                                                                           |  |                                 | 233      |   |      |   | 165      |      |  |   | 91       |  
|                                                                                                                                                 |  |                                 |          |   |      |   |          |      |  |   |          |  
|Net cash provided by (used in) operating activities                                                                                              |  |                                 | (314,613 | ) |      |   | (389,945 | )    |  |   | (425,763 | )
|                                                                                                                                                 |  |                                 |          |   |      |   |          |      |  |   |          |  
|Cash flows from financing activities:                                                                                                            |  |                                 |          |   |      |   |          |      |  |   |          |  
|Proceeds from issuance of common stock                                                                                                           |  |                                 | 185,537  |   |      |   | 262,354  |      |  |   | 164,769  |  
|Borrowings on SPV Credit Facility and Credit Facility                                                                                            |  |                                 | 566,351  |   |      |   | 402,200  |      |  |   | 420,023  |  
|Repayments of SPV Credit Facility and Credit Facility                                                                                            |  |                                 | (378,779 | ) |      |   | (476,328 | )    |  |   | (178,404 | )
|Proceeds from issuance of 2015-1 Notes                                                                                                           |  |                                 |         |   |      |   | 273,000  |      |  |   |         |  
|Debt issuance costs paid                                                                                                                         |  |                                 | (643     | ) |      |   | (2,648   | )    |  |   | (2,029   | )
|Dividends paid in cash                                                                                                                           |  |                                 | (61,201  | ) |      |   | (35,550  | )    |  |   | (11,852  | )
|                                                                                                                                                 |  |                                 |          |   |      |   |          |      |  |   |          |  
|Net cash provided by (used in) financing activities                                                                                              |  |                                 | 311,265  |   |      |   | 423,028  |      |  |   | 392,507  |  
|                                                                                                                                                 |  |                                 |          |   |      |   |          |      |  |   |          |  
|Net increase (decrease) in cash and cash equivalents                                                                                             |  |                                 | (3,348   | ) |      |   | 33,083   |      |  |   | (33,256  | )
|Cash and cash equivalents, beginning of year                                                                                                     |  |                                 | 41,837   |   |      |   | 8,754    |      |  |   | 42,010   |  
|                                                                                                                                                 |  |                                 |          |   |      |   |          |      |  |   |          |  
|Cash and cash equivalents, end of year                                                                                                           |  | $                               | 38,489   |   |      | $ | 41,837   |      |  | $ | 8,754    |  
|                                                                                                                                                 |  |                                 |          |   |      |   |          |      |  |   |          |  
|Supplemental disclosures:                                                                                                                        |  |                                 |          |   |      |   |          |      |  |   |          |  
|Offering expenses and debt issuance costs due                                                                                                    |  | $                               |         |   |      | $ | 1        |      |  | $ |         |  
|Interest paid during the year                                                                                                                    |  | $                               | 15,267   |   |      | $ | 8,083    |      |  | $ | 2,882    |  
|Dividends declared during the year                                                                                                               |  | $                               | 63,214   |   |      | $ | 47,689   |      |  | $ | 18,162   |  
|Reinvestment of dividends                                                                                                                        |  | $                               | 279      |   |      | $ | 131      |      |  | $ | 34       |  

The accompanying notes are an integral part of these consolidated financial statements.



91



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2016

(dollar amounts in
thousands)



|                                                                           |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |        |   |                         |   |        |   |  |  |      |  
|-------------------------------------------------------------------------- |  | -------- | ---------------------------------------- |  | --------------- | ----------------------- | ------------ |  | ---------- | ------------------- |  | - | ---------------- |  |  | ------------ | ------ | - | ----------------------- | - | ------ | - |  |  | ---- | -
|Investmentsnon-controlled/non-affiliated (1)                              |  | Industry |                                          |  | InterestRate(2) |                         | MaturityDate |  |            | Par/PrincipalAmount |  |   | AmortizedCost(6) |  |  | FairValue(7) |        |   | Percentage ofNet Assets |  
|First Lien Debt (80.09%)                                                   |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |        |   |                        
|Access CIG, LLC(2)(3)(4)(13)                                               |  |          | Business Services                        |  |                 | L + 5.00% (1.00% Floor) |              |  | 10/17/2021 |                     |  | $ | 18,335           |  |  | $            | 18,222 |   |                         | $ | 18,335 |   |  |  | 2.40 | %
|Advanced Instruments, LLC(2)(3)(4)(5)(13)(15)                              |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 5.25% (1.00% Floor) |              |  | 10/31/2022 |                     |  |   | 22,500           |  |  |              | 22,019 |   |                         |   | 22,252 |   |  |  | 2.91 |  
|AF Borrower LLC (Accuvant) (2)(3)(4)                                       |  |          | High Tech Industries                     |  |                 | L + 5.25% (1.00% Floor) |              |  | 1/28/2022  |                     |  |   | 16,113           |  |  |              | 15,923 |   |                         |   | 16,113 |   |  |  | 2.11 |  
|Alpha Packaging Holdings, Inc.
(2)(3)(4)(13)                               |  |          | Containers, Packaging &Glass             |  |                 | L + 4.25% (1.00% Floor) |              |  | 5/12/2020  |                     |  |   | 11,322           |  |  |              | 11,313 |   |                         |   | 11,322 |   |  |  | 1.48 |  
|Anaren, Inc.(2)(3)(4)(13)                                                  |  |          | Telecommunications                       |  |                 | L + 4.50% (1.00% Floor) |              |  | 2/18/2021  |                     |  |   | 10,869           |  |  |              | 10,800 |   |                         |   | 10,869 |   |  |  | 1.42 |  
|Audax AAMP Holdings, Inc.(2)(3)(4)(13)                                     |  |          | Durable Consumer Goods                   |  |                 | L + 6.00% (1.00% Floor) |              |  | 6/24/2017  |                     |  |   | 10,424           |  |  |              | 10,400 |   |                         |   | 10,348 |   |  |  | 1.35 |  
|BAART Programs, Inc.(2)(4)(16)                                             |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 7.75% (0.00% Floor) |              |  | 10/9/2021  |                     |  |   | 7,406            |  |  |              | 7,355  |   |                         |   | 7,534  |   |  |  | 0.99 |  
|Brooks Equipment Company, LLC(2)(3)(4)(13)                                 |  |          | Construction & Building                  |  |                 | L + 5.00% (1.00% Floor) |              |  | 8/29/2020  |                     |  |   | 6,694            |  |  |              | 6,657  |   |                         |   | 6,683  |   |  |  | 0.87 |  
|Capstone Logistics Acquisition, Inc.(2)(3)(4)(13)                          |  |          | Transportation: Cargo                    |  |                 | L + 4.50% (1.00% Floor) |              |  | 10/7/2021  |                     |  |   | 19,478           |  |  |              | 19,337 |   |                         |   | 19,212 |   |  |  | 2.51 |  
|Captive Resources Midco, LLC(2)(3)(4)(13)(15)                              |  |          | Banking, Finance, Insurance &Real Estate |  |                 | L + 5.75% (1.00% Floor) |              |  | 6/30/2020  |                     |  |   | 29,050           |  |  |              | 28,683 |   |                         |   | 29,009 |   |  |  | 3.80 |  
|Central Security Group, Inc.(2)(3)(4)(13)(16)                              |  |          | Consumer Services                        |  |                 | L + 5.63% (1.00% Floor) |              |  | 10/6/2020  |                     |  |   | 28,658           |  |  |              | 28,300 |   |                         |   | 28,557 |   |  |  | 3.74 |  
|CIP Revolution Holdings, LLC(2)(3)(5)(15)                                  |  |          | Media: Advertising,Printing & Publishing |  |                 | L + 6.00% (1.00% Floor) |              |  | 8/19/2021  |                     |  |   | 16,500           |  |  |              | 16,325 |   |                         |   | 16,585 |   |  |  | 2.17 |  
|Colony Hardware Corporation(2)(3)(4)(13)                                   |  |          | Construction & Building                  |  |                 | L + 6.00% (1.00% Floor) |              |  | 10/23/2021 |                     |  |   | 17,038           |  |  |              | 16,806 |   |                         |   | 17,038 |   |  |  | 2.23 |  
|Datapipe, Inc.(2)(3)(13)(16)                                               |  |          | Telecommunications                       |  |                 | L + 4.75% (1.00% Floor) |              |  | 3/15/2019  |                     |  |   | 9,750            |  |  |              | 9,666  |   |                         |   | 9,764  |   |  |  | 1.28 |  
|Dent Wizard International Corporation(2)(3)(4)(13)(16)                     |  |          | Automotive                               |  |                 | L + 4.75% (1.00% Floor) |              |  | 4/7/2020   |                     |  |   | 7,216            |  |  |              | 7,190  |   |                         |   | 7,216  |   |  |  | 0.94 |  
|Derm Growth Partners III, LLC (Dermatology Associates)(2)(3)(4)(5)(13)(15) |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 6.50% (1.00% Floor) |              |  | 5/31/2022  |                     |  |   | 32,929           |  |  |              | 32,393 |   |                         |   | 32,958 |   |  |  | 4.31 |  
|Dimensional Dental Management, LLC(2)(3)(5)(12)(15)                        |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 7.00% (1.00% Floor) |              |  | 2/12/2021  |                     |  |   | 18,000           |  |  |              | 17,601 |   |                         |   | 17,811 |   |  |  | 2.33 |  
|Dimora Brands, Inc. (fka TK USA Enterprises,Inc.)
(2)(3)(5)(15)            |  |          | Construction & Building                  |  |                 | L + 4.50% (1.00% Floor) |              |  | 4/4/2022   |                     |  |   |                 |  |  |              | (60    | ) |                         |   | (30    | ) |  |  | 0.00 |  
|Direct Travel, Inc.(2)(3)(4)(5)(13)(15)                                    |  |          | Hotel, Gaming & Leisure                  |  |                 | L + 6.50% (1.00% Floor) |              |  | 12/1/2021  |                     |  |   | 12,842           |  |  |              | 12,420 |   |                         |   | 12,712 |   |  |  | 1.66 |  
|EIP Merger Sub, LLC (Evolve IP)(2)(3)(5)(12)                               |  |          | Telecommunications                       |  |                 | L + 6.25% (1.00% Floor) |              |  | 6/7/2021   |                     |  |   | 23,750           |  |  |              | 23,098 |   |                         |   | 23,242 |   |  |  | 3.04 |  
|Emerging Markets Communications,LLC(2)(3)(4)(8)(13)                        |  |          | Telecommunications                       |  |                 | L + 5.75% (1.00% Floor) |              |  | 7/1/2021   |                     |  |   | 17,730           |  |  |              | 16,299 |   |                         |   | 17,730 |   |  |  | 2.32 |  
|EP Minerals, LLC(2)(3)(4)(13)                                              |  |          | Metals & Mining                          |  |                 | L + 4.50% (1.00% Floor) |              |  | 8/20/2020  |                     |  |   | 10,264           |  |  |              | 10,232 |   |                         |   | 10,259 |   |  |  | 1.34 |  
|FCX Holdings Corp.(2)(3)(4)(13)(16)                                        |  |          | Capital Equipment                        |  |                 | L + 4.50% (1.00% Floor) |              |  | 8/4/2020   |                     |  |   | 9,856            |  |  |              | 9,852  |   |                         |   | 9,856  |   |  |  | 1.29 |  
|Genex Holdings, Inc.(2)(3)(13)(16)                                         |  |          | Banking, Finance, Insurance &Real Estate |  |                 | L + 4.25% (1.00% Floor) |              |  | 5/30/2021  |                     |  |   | 4,200            |  |  |              | 4,187  |   |                         |   | 4,196  |   |  |  | 0.55 |  
|Global Software, LLC(2)(3)(4)(13)(16)                                      |  |          | High Tech Industries                     |  |                 | L + 5.50% (1.00% Floor) |              |  | 5/2/2022   |                     |  |   | 16,163           |  |  |              | 15,880 |   |                         |   | 16,163 |   |  |  | 2.12 |  
|Green Energy Partners/Stonewall LLC(2)(3)(5)(13)                           |  |          | Energy: Electricity                      |  |                 | L + 5.50% (1.00% Floor) |              |  | 11/13/2021 |                     |  |   | 16,600           |  |  |              | 16,475 |   |                         |   | 16,598 |   |  |  | 2.17 |  
|Green Plains II LLC(2)(3)(4)(5)(13)(15)                                    |  |          | Beverage, Food & Tobacco                 |  |                 | L + 7.00% (1.00% Floor) |              |  | 10/03/2022 |                     |  |   | 15,205           |  |  |              | 15,059 |   |                         |   | 15,379 |   |  |  | 2.01 |  
|Hummel Station LLC(2)(3)(5)(13)(16)                                        |  |          | Energy: Electricity                      |  |                 | L + 6.00% (1.00% Floor) |              |  | 10/27/2022 |                     |  |   | 21,000           |  |  |              | 20,308 |   |                         |   | 20,160 |   |  |  | 2.64 |  
|Imagine! Print Solutions, LLC(2)(3)(4)(13)                                 |  |          | Media: Advertising,Printing & Publishing |  |                 | L + 6.00% (1.00% Floor) |              |  | 3/30/2022  |                     |  |   | 18,461           |  |  |              | 18,213 |   |                         |   | 18,603 |   |  |  | 2.43 |  



92



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2016

(dollar amounts in thousands)



|                                                                      |  |          |                                          |  |                 |                          |              |  |            |                     |  |   |                  |  |  |              |        |  |                         |   |        |  |  |  |      |  
|--------------------------------------------------------------------- |  | -------- | ---------------------------------------- |  | --------------- | ------------------------ | ------------ |  | ---------- | ------------------- |  | - | ---------------- |  |  | ------------ | ------ |  | ----------------------- | - | ------ |  |  |  | ---- | -
|Investmentsnon-controlled/non-affiliated (1)                         |  | Industry |                                          |  | InterestRate(2) |                          | MaturityDate |  |            | Par/PrincipalAmount |  |   | AmortizedCost(6) |  |  | FairValue(7) |        |  | Percentage ofNet Assets |  
|First Lien Debt (80.09%) (continued)                                  |  |          |                                          |  |                 |                          |              |  |            |                     |  |   |                  |  |  |              |        |  |                        
|Imperial Bag & Paper Co. LLC(2)(3)(4)(13)(16)                         |  |          | Forest Products & Paper                  |  |                 | L + 6.00% (1.00% Floor)  |              |  | 1/7/2022   |                     |  | $ | 24,074           |  |  | $            | 23,752 |  |                         | $ | 23,924 |  |  |  | 3.13 | %
|Indra Holdings Corp. (Totes Isotoner)(2)(3)(5)(13)                    |  |          | Non-durable ConsumerGoods                |  |                 | L + 4.25% (1.00% Floor)  |              |  | 5/1/2021   |                     |  |   | 14,224           |  |  |              | 14,130 |  |                         |   | 10,553 |  |  |  | 1.38 |  
|International Medical Group, Inc.(2)(3)(5)(12)                        |  |          | Banking, Finance,Insurance &Real Estate  |  |                 | L + 6.50% (1.00% Floor)  |              |  | 10/30/2020 |                     |  |   | 30,000           |  |  |              | 29,505 |  |                         |   | 30,237 |  |  |  | 3.96 |  
|Jackson Hewitt Inc.(2)(3)(4)(13)                                      |  |          | Retail                                   |  |                 | L + 7.00% (1.00% Floor)  |              |  | 7/30/2020  |                     |  |   | 8,758            |  |  |              | 8,625  |  |                         |   | 8,320  |  |  |  | 1.09 |  
|Metrogistics LLC(2)(3)(4)(5)(13)                                      |  |          | Transportation: Cargo                    |  |                 | L + 6.50% (1.00% Floor)  |              |  | 9/30/2022  |                     |  |   | 15,200           |  |  |              | 14,986 |  |                         |   | 15,094 |  |  |  | 1.98 |  
|MSX International, Inc.(2)(3)(4)(13)                                  |  |          | Automotive                               |  |                 | L + 5.00% (1.00% Floor)  |              |  | 8/21/2020  |                     |  |   | 8,940            |  |  |              | 8,882  |  |                         |   | 8,940  |  |  |  | 1.17 |  
|National Technical Systems, Inc.(2)(3)(4)(13)(15)                     |  |          | Aerospace & Defense                      |  |                 | L + 6.25% (1.00% Floor)  |              |  | 6/12/2021  |                     |  |   | 25,123           |  |  |              | 24,854 |  |                         |   | 23,927 |  |  |  | 3.13 |  
|NES Global Talent Finance US LLC (United
Kingdom)(2)(3)(4)(8)(13)     |  |          | Energy: Oil & Gas                        |  |                 | L + 5.50% (1.00% Floor)  |              |  | 10/3/2019  |                     |  |   | 11,250           |  |  |              | 11,132 |  |                         |   | 10,911 |  |  |  | 1.43 |  
|OnCourse Learning Corporation(2)(3)(4)(5)(13)(15)(16)                 |  |          | Consumer Services                        |  |                 | L + 6.50% (1.00% Floor)  |              |  | 9/12/2021  |                     |  |   | 26,141           |  |  |              | 25,770 |  |                         |   | 26,220 |  |  |  | 3.43 |  
|Paradigm Acquisition Corp.(2)(3)(4)(13)                               |  |          | Business Services                        |  |                 | L + 5.00% (1.00% Floor)  |              |  | 6/2/2022   |                     |  |   | 23,246           |  |  |              | 22,963 |  |                         |   | 23,223 |  |  |  | 3.04 |  
|Pelican Products, Inc.(2)(3)(4)(13)                                   |  |          | Containers, Packaging &Glass             |  |                 | L + 4.25% (1.00% Floor)  |              |  | 4/11/2020  |                     |  |   | 7,643            |  |  |              | 7,654  |  |                         |   | 7,593  |  |  |  | 0.99 |  
|Plano Molding Company, LLC(2)(3)(4)(5)(13)                            |  |          | Hotel, Gaming & Leisure                  |  |                 | L + 7.00% (1.00% Floor)  |              |  | 5/12/2021  |                     |  |   | 18,163           |  |  |              | 18,030 |  |                         |   | 17,302 |  |  |  | 2.26 |  
|PPT Management Holdings, LLC(2)(3)(5)                                 |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 6.00% (1.00% Floor)  |              |  | 12/16/2022 |                     |  |   | 22,500           |  |  |              | 22,288 |  |                         |   | 22,426 |  |  |  | 2.93 |  
|Premier Senior Marketing, LLC(2)(3)(5)(16)                            |  |          | Banking, Finance,Insurance & Real Estate |  |                 | L + 5.00% (1.00% Floor)  |              |  | 7/1/2022   |                     |  |   | 3,741            |  |  |              | 3,690  |  |                         |   | 3,741  |  |  |  | 0.49 |  
|Product Quest Manufacturing, LLC(2)(3)(4)(5)(12)                      |  |          | Containers, Packaging &Glass             |  |                 | L + 5.75% (1.00% Floor)  |              |  | 9/9/2020   |                     |  |   | 28,000           |  |  |              | 27,565 |  |                         |   | 25,838 |  |  |  | 3.38 |  
|Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)(2)(3)(4) |  |          | Wholesale                                |  |                 | L + 4.50% (1.00% Floor)  |              |  | 1/28/2020  |                     |  |   | 10,798           |  |  |              | 10,739 |  |                         |   | 8,101  |  |  |  | 1.06 |  
|PSC Industrial Holdings Corp(2)(3)(4)(13)                             |  |          | Environmental Industries                 |  |                 | L + 4.75% (1.00% Floor)  |              |  | 12/5/2020  |                     |  |   | 11,760           |  |  |              | 11,679 |  |                         |   | 11,290 |  |  |  | 1.48 |  
|PSI Services LLC(2)(3)(4)(5)(12)(16)                                  |  |          | Business Services                        |  |                 | L + 6.75% (1.00% Floor)  |              |  | 2/27/2021  |                     |  |   | 32,705           |  |  |              | 32,022 |  |                         |   | 34,784 |  |  |  | 4.56 |  
|PT Intermediate Holdings III, LLC (Parts Town)(2)(3)(4)(5)(13)(15)    |  |          | Wholesale                                |  |                 | L + 6.50% (1.00% Floor)  |              |  | 6/23/2022  |                     |  |   | 17,417           |  |  |              | 17,215 |  |                         |   | 17,563 |  |  |  | 2.30 |  
|QW Holding Corporation (Quala)(2)(3)(4)(5)(13)                        |  |          | Environmental Industries                 |  |                 | L + 6.75% (1.00% Floor)  |              |  | 8/31/2022  |                     |  |   | 29,925           |  |  |              | 29,084 |  |                         |   | 30,009 |  |  |  | 3.93 |  
|Reliant Pro Rehab, LLC(2)(3)(5)(12)                                   |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 10.00% (1.00% Floor) |              |  | 12/29/2017 |                     |  |   | 22,331           |  |  |              | 22,024 |  |                         |   | 22,331 |  |  |  | 2.92 |  
|SolAero Technologies Corp.(2)(3)(4)(5)                                |  |          | Telecommunications                       |  |                 | L + 5.25% (1.00% Floor)  |              |  | 12/10/2020 |                     |  |   | 19,677           |  |  |              | 19,541 |  |                         |   | 18,901 |  |  |  | 2.47 |  
|Superior Health Linens, LLC(2)(3)(4)(5)(13)(15)                       |  |          | Business Services                        |  |                 | L + 6.50% (1.00% Floor)  |              |  | 9/30/2021  |                     |  |   | 19,206           |  |  |              | 18,891 |  |                         |   | 19,068 |  |  |  | 2.50 |  
|T2 Systems, Inc.(2)(3)(4)(5)(13)(15)(16)                              |  |          | Transportation: Consumer                 |  |                 | L + 6.75% (1.00% Floor)  |              |  | 9/28/2022  |                     |  |   | 22,950           |  |  |              | 22,333 |  |                         |   | 23,208 |  |  |  | 3.04 |  
|T2 Systems Canada, Inc.(2)(3)(5)(16)                                  |  |          | Transportation: Consumer                 |  |                 | L + 6.75% (1.00% Floor)  |              |  | 9/28/2022  |                     |  |   | 4,050            |  |  |              | 3,952  |  |                         |   | 4,090  |  |  |  | 0.54 |  



93



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2016

(dollar amounts in thousands)



|                                                                                   |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |           |  |                         |   |           |  |  |  |        |  
|---------------------------------------------------------------------------------- |  | -------- | ---------------------------------------- |  | --------------- | ----------------------- | ------------ |  | ---------- | ------------------- |  | - | ---------------- |  |  | ------------ | --------- |  | ----------------------- | - | --------- |  |  |  | ------ | -
|Investmentsnon-controlled/non-affiliated (1)                                      |  | Industry |                                          |  | InterestRate(2) |                         | MaturityDate |  |            | Par/PrincipalAmount |  |   | AmortizedCost(6) |  |  | FairValue(7) |           |  | Percentage ofNet Assets |  
|First Lien Debt (80.09%) (continued)                                               |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |           |  |                         |   |           |  |  |  |        |  
|Teaching Strategies, LLC(2)(3)(4)(13)                                              |  |          | Media: Advertising, Printing &Publishing |  |                 | L + 5.50% (0.50% Floor) |              |  | 10/1/2019  |                     |  | $ | 13,369           |  |  | $            | 13,333    |  |                         | $ | 13,369    |  |  |  | 1.75   | %
|The Hilb Group, LLC(2)(3)(5)(12)(15)                                               |  |          | Banking, Finance, Insurance &Real Estate |  |                 | L + 6.50% (1.00% Floor) |              |  | 6/24/2021  |                     |  |   | 29,682           |  |  |              | 29,113    |  |                         |   | 29,826    |  |  |  | 3.90   |  
|The SI Organization, Inc.(2)(3)(4)(13)                                             |  |          | Aerospace & Defense                      |  |                 | L + 4.75% (1.00% Floor) |              |  | 11/23/2019 |                     |  |   | 8,574            |  |  |              | 8,527     |  |                         |   | 8,676     |  |  |  | 1.15   |  
|The Topps Company, Inc.(2)(3)(4)(13)                                               |  |          | Non-durable Consumer Goods               |  |                 | L + 6.00% (1.25% Floor) |              |  | 10/2/2020  |                     |  |   | 18,707           |  |  |              | 18,629    |  |                         |   | 18,795    |  |  |  | 2.46   |  
|TruckPro, LLC(2)(3)(4)(13)(16)                                                     |  |          | Automotive                               |  |                 | L + 5.00% (1.00% Floor) |              |  | 8/6/2018   |                     |  |   | 9,292            |  |  |              | 9,267     |  |                         |   | 9,262     |  |  |  | 1.21   |  
|Tweddle Group, Inc.(2)(3)(4)(13)                                                   |  |          | Media: Advertising, Printing &Publishing |  |                 | L + 6.00% (1.00% Floor) |              |  | 10/24/2022 |                     |  |   | 16,200           |  |  |              | 15,885    |  |                         |   | 16,114    |  |  |  | 2.11   |  
|TwentyEighty, Inc. (fka Miller Heiman, Inc.)
(2)(3)(5)(10)(13)                     |  |          | Business Services                        |  |                 | L + 6.00% (1.00% Floor) |              |  | 9/30/2019  |                     |  |   | 18,719           |  |  |              | 18,571    |  |                         |   | 7,628     |  |  |  | 1.00   |  
|U.S. Farathane, LLC(2)(3)(4)(13)                                                   |  |          | Automotive                               |  |                 | L + 4.75% (1.00% Floor) |              |  | 12/23/2021 |                     |  |   | 1,925            |  |  |              | 1,895     |  |                         |   | 1,925     |  |  |  | 0.25   |  
|U.S. TelePacific Holdings Corp.(2)(3)(5)                                           |  |          | Telecommunications                       |  |                 | L + 8.50% (1.00% Floor) |              |  | 2/24/2021  |                     |  |   | 30,000           |  |  |              | 29,149    |  |                         |   | 29,853    |  |  |  | 3.91   |  
|Vetcor Professional Practices,
LLC (2)(3)(4)(5)(13)(15)                            |  |          | Consumer Services                        |  |                 | L + 6.25% (1.00% Floor) |              |  | 4/20/2021  |                     |  |   | 25,001           |  |  |              | 24,623    |  |                         |   | 25,164    |  |  |  | 3.29   |  
|Violin Finco S.A.R.L. (Alexander Mann Solutions) (United Kingdom) (2)(3)(4)(8)(13) |  |          | Business Services                        |  |                 | L + 4.75% (1.00% Floor) |              |  | 12/20/2019 |                     |  |   | 10,065           |  |  |              | 10,012    |  |                         |   | 10,058    |  |  |  | 1.32   |  
|Vistage Worldwide, Inc.
(2)(3)(4)(13)(16)                                          |  |          | Business Services                        |  |                 | L + 5.50% (1.00% Floor) |              |  | 8/19/2021  |                     |  |   | 28,757           |  |  |              | 28,524    |  |                         |   | 28,688    |  |  |  | 3.75   |  
|Vitera Healthcare Solutions, LLC
(2)(3)(4)(13)                                     |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 5.00% (1.00% Floor) |              |  | 11/4/2020  |                     |  |   | 9,104            |  |  |              | 9,050     |  |                         |   | 9,078     |  |  |  | 1.19   |  
|Winchester Electronics
Corporation (2)(3)(4)(5)(13)(15)                            |  |          | Capital Equipment                        |  |                 | L + 6.50% (1.00% Floor) |              |  | 6/30/2022  |                     |  |   | 27,367           |  |  |              | 26,959    |  |                         |   | 27,460    |  |  |  | 3.59   |  
|Zest Holdings, LLC (2)(3)(4)(13)                                                   |  |          | Durable Consumer Goods                   |  |                 | L + 4.75% (1.00% Floor) |              |  | 8/16/2020  |                     |  |   | 9,530            |  |  |              | 9,530     |  |                         |   | 9,584     |  |  |  | 1.25   |  
|                                                                                   |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |           |  |                         |   |           |  |  |  |        |  
|First Lien Debt Total                                                              |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  | $            | 1,145,326 |  |                         | $ | 1,139,548 |  |  |  | 149.13 | %
|                                                                                   |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |           |  |                         |   |           |  |  |  |        |  
|Second Lien Debt (12.08%)                                                          |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |           |  |                         |   |           |  |  |  |        |  
|AF Borrower LLC (Accuvant)(2)(3)(5)                                                |  |          | High Tech Industries                     |  |                 | L + 9.00% (1.00% Floor) |              |  | 1/30/2023  |                     |  | $ | 8,000            |  |  | $            | 7,934     |  |                         | $ | 8,000     |  |  |  | 1.05   | %
|AIM Group USA Inc.(2)(3)(5)(13)                                                    |  |          | Aerospace & Defense                      |  |                 | L + 9.00% (1.00% Floor) |              |  | 8/2/2022   |                     |  |   | 23,000           |  |  |              | 22,701    |  |                         |   | 23,196    |  |  |  | 3.04   |  
|AmeriLife Group, LLC (2)(3)(5)                                                     |  |          | Banking, Finance, Insurance &RealEstate  |  |                 | L + 8.75% (1.00% Floor) |              |  | 1/10/2023  |                     |  |   | 20,000           |  |  |              | 19,656    |  |                         |   | 19,208    |  |  |  | 2.51   |  
|Argon Medical Devices, Inc.(2)(3)(4)(5)                                            |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 9.50% (1.00% Floor) |              |  | 6/23/2022  |                     |  |   | 24,000           |  |  |              | 23,363    |  |                         |   | 24,233    |  |  |  | 3.17   |  
|Berlin Packaging L.L.C.(2)(3)(5)(13)                                               |  |          | Containers, Packaging & Glass            |  |                 | L + 6.75% (1.00% Floor) |              |  | 10/1/2022  |                     |  |   | 2,927            |  |  |              | 2,910     |  |                         |   | 2,953     |  |  |  | 0.39   |  
|Charter NEX US Holdings, Inc.(2)(3)(5)(13)                                         |  |          | Chemicals, Plastics & Rubber             |  |                 | L + 8.25% (1.00% Floor) |              |  | 2/5/2023   |                     |  |   | 7,394            |  |  |              | 7,303     |  |                         |   | 7,468     |  |  |  | 0.98   |  
|Confie Seguros Holding II Co.(2)(3)(5)(16)                                         |  |          | Banking, Finance, Insurance &Real Estate |  |                 | L + 9.00% (1.25% Floor) |              |  | 5/8/2019   |                     |  |   | 12,000           |  |  |              | 11,921    |  |                         |   | 11,918    |  |  |  | 1.56   |  
|Drew Marine Group Inc.(2)(3)(4)(5)(13)                                             |  |          | Chemicals, Plastics & Rubber             |  |                 | L + 7.00% (1.00% Floor) |              |  | 5/19/2021  |                     |  |   | 12,500           |  |  |              | 12,481    |  |                         |   | 12,333    |  |  |  | 1.61   |  



94



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2016

(dollar amounts in thousands)



|                                                                      |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |       |  
|--------------------------------------------------------------------- |  | -------- | ---------------------------------------- |  | --------------- | ----------------------- | ------------ |  | ---------- | ------------------- |  | - | ---------------- |  |  | ------------ | ------- |  | ----------------------- | - | ------- |  |  |  | ----- | -
|Investmentsnon-controlled/non-affiliated (1)                         |  | Industry |                                          |  | InterestRate(2) |                         | MaturityDate |  |            | Par/PrincipalAmount |  |   | AmortizedCost(6) |  |  | FairValue(7) |         |  | Percentage ofNet Assets |  
|Second Lien Debt (12.08%) (continued)                                 |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |       |  
|Genex Holdings, Inc.(2)(3)(5)                                         |  |          | Banking, Finance, Insurance &Real Estate |  |                 | L + 7.75% (1.00% Floor) |              |  | 5/30/2022  |                     |  | $ | 7,990            |  |  | $            | 7,915   |  |                         | $ | 7,978   |  |  |  | 1.04  | %
|Institutional Shareholder Services
Inc.(2)(3)(5)(13)                  |  |          | Banking, Finance, Insurance &Real Estate |  |                 | L + 8.50% (1.00% Floor) |              |  | 4/29/2022  |                     |  |   | 12,500           |  |  |              | 12,408  |  |                         |   | 12,359  |  |  |  | 1.62  |  
|Jazz Acquisition, Inc. (Wencor)
(2)(3)(5)(13)                         |  |          | Aerospace & Defense                      |  |                 | L + 6.75% (1.00% Floor) |              |  | 6/19/2022  |                     |  |   | 6,700            |  |  |              | 6,677   |  |                         |   | 5,572   |  |  |  | 0.73  |  
|MRI Software, LLC(2)(3)(5)                                            |  |          | Software                                 |  |                 | L + 8.00% (1.00% Floor) |              |  | 6/23/2022  |                     |  |   | 11,250           |  |  |              | 11,110  |  |                         |   | 11,265  |  |  |  | 1.47  |  
|Power Stop, LLC(5)(9)                                                 |  |          | Automotive                               |  |                 | 11.00%                  |              |  | 5/29/2022  |                     |  |   | 10,000           |  |  |              | 9,831   |  |                         |   | 9,863   |  |  |  | 1.29  |  
|Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)(2)(3)(5) |  |          | Wholesale                                |  |                 | L + 8.50% (1.00% Floor) |              |  | 7/28/2020  |                     |  |   | 3,000            |  |  |              | 2,960   |  |                         |   | 1,682   |  |  |  | 0.22  |  
|Vitera Healthcare Solutions, LLC(2)(3)(4)                             |  |          | Healthcare & Pharmaceuticals             |  |                 | L + 8.25% (1.00% Floor) |              |  | 11/4/2021  |                     |  |   | 2,000            |  |  |              | 1,979   |  |                         |   | 1,945   |  |  |  | 0.26  |  
|Watchfire Enterprises, Inc.(2)(3)(5)(13)                              |  |          | Media: Advertising, Printing &Publishing |  |                 | L + 8.00% (1.00% Floor) |              |  | 10/2/2021  |                     |  |   | 7,000            |  |  |              | 6,932   |  |                         |   | 6,976   |  |  |  | 0.91  |  
|Zywave, Inc.(2)(3)(5)                                                 |  |          | High Tech Industries                     |  |                 | L + 9.00% (1.00% Floor) |              |  | 11/17/2023 |                     |  |   | 4,950            |  |  |              | 4,879   |  |                         |   | 4,915   |  |  |  | 0.64  |  
|                                                                      |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |       |  
|Second Lien Debt Total                                                |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  | $            | 172,960 |  |                         | $ | 171,864 |  |  |  | 22.49 | %
|                                                                      |  |          |                                          |  |                 |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |       |  



|                                                  |  |          |                    |  |              |  |           |           |  |   |                   |  |  |               |       |  |                         |   |       |  |  |  |      |  
|------------------------------------------------- |  | -------- | ------------------ |  | ------------ |  | --------- | --------- |  | - | ----------------- |  |  | ------------- | ----- |  | ----------------------- | - | ----- |  |  |  | ---- | -
|Investmentsnon-controlled/non-affiliated (1)     |  | Industry |                    |  | MaturityDate |  |           | ParAmount |  |   | AmortizedCost (6) |  |  | FairValue (7) |       |  | Percentage ofNet Assets |  
|Structured Finance Obligations
(0.37%) (5)(8)(11) |  |          |                    |  |              |  |           |           |  |   |                   |  |  |               |       |  |                         |   |       |  |  |  |      |  
|1776 CLO I, Ltd., Subordinated Notes              |  |          | Structured Finance |  |              |  | 5/8/2020  |           |  | $ | 11,750            |  |  | $             | 6,739 |  |                         | $ | 2,761 |  |  |  | 0.36 | %
|Clydesdale CLO 2005, Ltd., Subordinated Notes     |  |          | Structured Finance |  |              |  | 12/6/2017 |           |  |   | 5,750             |  |  |               |      |  |                         |   | 10    |  |  |  | 0.00 |  
|MSIM Peconic Bay, Ltd., Subordinated Notes        |  |          | Structured Finance |  |              |  | 7/20/2019 |           |  |   | 4,500             |  |  |               | 63    |  |                         |   | 5     |  |  |  | 0.00 |  
|Nautique Funding Ltd., Income Notes               |  |          | Structured Finance |  |              |  | 4/15/2020 |           |  |   | 5,000             |  |  |               | 2,437 |  |                         |   | 2,440 |  |  |  | 0.32 |  
|                                                  |  |          |                    |  |              |  |           |           |  |   |                   |  |  |               |       |  |                         |   |       |  |  |  |      |  
|Structured Finance Obligations Total              |  |          |                    |  |              |  |           |           |  |   |                   |  |  | $             | 9,239 |  |                         | $ | 5,216 |  |  |  | 0.68 | %
|                                                  |  |          |                    |  |              |  |           |           |  |   |                   |  |  |               |       |  |                         |   |       |  |  |  |      |  



|                                                       |  |          |                                           |  |              |  |           |      |  |   |               |  |  |                         |           |  |  |  |        |  
|------------------------------------------------------ |  | -------- | ----------------------------------------- |  | ------------ |  | --------- | ---- |  | - | ------------- |  |  | ----------------------- | --------- |  |  |  | ------ | -
|Investmentsnon-controlled/non-affiliated (1)          |  | Industry |                                           |  | Shares/Units |  |           | Cost |  |   | FairValue (7) |  |  | Percentage ofNet Assets |          
|Equity Investments (0.46%) (5)                         |  |          |                                           |  |              |  |           |      |  |   |               |  |  |                         |           |  |  |  |        |  
|CIP Revolution Investments, LLC                        |  |          | Media: Advertising, Printing & Publishing |  |              |  | 30,000    |      |  | $ | 300           |  |  | $                       | 352       |  |  |  | 0.05   | %
|Derm Growth Partners III, LLC (Dermatology Associates) |  |          | Healthcare & Pharmaceuticals              |  |              |  | 1,000,000 |      |  |   | 1,000         |  |  |                         | 976       |  |  |  | 0.13   |  
|GS Holdco LLC (Global Software, LLC)                   |  |          | High Tech Industries                      |  |              |  | 1,000,000 |      |  |   | 1,001         |  |  |                         | 1,126     |  |  |  | 0.15   |  
|Power Stop Intermediate Holdings, LLC                  |  |          | Automotive                                |  |              |  | 7,150     |      |  |   | 715           |  |  |                         | 1,208     |  |  |  | 0.16   |  
|T2 Systems Parent Corporation                          |  |          | Transportation: Consumer                  |  |              |  | 555,556   |      |  |   | 556           |  |  |                         | 584       |  |  |  | 0.07   |  
|THG Acquisition, LLC (The Hilb Group, LLC)             |  |          | Banking, Finance, Insurance & Real Estate |  |              |  | 1,500,000 |      |  |   | 1,499         |  |  |                         | 2,228     |  |  |  | 0.29   |  
|                                                       |  |          |                                           |  |              |  |           |      |  |   |               |  |  |                         |           |  |  |  |        |  
|Equity Investments Total                               |  |          |                                           |  |              |  |           |      |  | $ | 5,071         |  |  | $                       | 6,474     |  |  |  | 0.85   | %
|                                                       |  |          |                                           |  |              |  |           |      |  |   |               |  |  |                         |           |  |  |  |        |  
|Total
investmentsnon-controlled/non-affiliated        |  |          |                                           |  |              |  |           |      |  | $ | 1,332,596     |  |  | $                       | 1,323,102 |  |  |  | 173.15 | %
|                                                       |  |          |                                           |  |              |  |           |      |  |   |               |  |  |                         |           |  |  |  |        |  
|                                                       |  |          |                                           |  |              |  |           |      |  |   |               |  |  |                         |           |  |  |  |        |  



95



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2016

(dollar amounts in thousands)



|                                                                                |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               |   |           |                         |  |   |           |  |  |  |        |  
|------------------------------------------------------------------------------- |  | -------- | --------------- |  | ---------------- |  | -------- | ------------ |  |  | --------------------- |  |  | ---- | ------ |  | ------------- | - | --------- | ----------------------- |  | - | --------- |  |  |  | ------ | -
|Investmentscontrolled/affiliated                                               |  | Industry |                 |  | InterestRate (2) |  |          | MaturityDate |  |  | ParAmount/LLCInterest |  |  | Cost |        |  | FairValue (7) |   |           | Percentage ofNet Assets | 
|Investment Fund (7.00%)(8)                                                      |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               |   |           |                         |  |   |           |  |  |  |        |  
|Middle Market Credit Fund, LLC, Mezzanine Loan
(2)(5)(9)(14)                    |  |          | Investment Fund |  |                  |  | L + 9.50 | %            |  |  | 6/24/2017             |  |  | $    | 62,384 |  |               | $ | 62,384    |                         |  | $ | 62,384    |  |  |  | 8.16   | %
|Middle Market Credit Fund, LLC, Subordinated Loan and Members Interest (5)(14) |  |          | Investment Fund |  |                  |  | 0.001    |              |  |  | 3/1/2021              |  |  |      | 35,000 |  |               |   | 35,001    |                         |  |   | 37,273    |  |  |  | 4.88   |  
|                                                                                |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               |   |           |                         |  |   |           |  |  |  |        |  
|Investment Fund Total                                                           |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               | $ | 97,385    |                         |  | $ | 99,657    |  |  |  | 13.04  | %
|                                                                                |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               |   |           |                         |  |   |           |  |  |  |        |  
|Total investmentscontrolled/affiliated                                         |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               | $ | 97,385    |                         |  | $ | 99,657    |  |  |  | 13.04  | %
|                                                                                |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               |   |           |                         |  |   |           |  |  |  |        |  
|Total investments                                                               |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               | $ | 1,429,981 |                         |  | $ | 1,422,759 |  |  |  | 186.19 | %
|                                                                                |  |          |                 |  |                  |  |          |              |  |  |                       |  |  |      |        |  |               |   |           |                         |  |   |           |  |  |  |        |  



|(1) | Unless otherwise indicated, issuers of debt and equity investments held by TCG BDC, Inc. (together with its consolidated subsidiaries, we, us, our, TCG BDC or the
Company) are domiciled in the United States and issuers of structured finance obligations are domiciled in the Cayman Islands. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated
thereunder, the Investment Company Act), the Company would be deemed to control a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the
management or policies of the portfolio company. As of December 31, 2016, the Company does not control any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an affiliated person
of a portfolio company if the Company owns 5% or more of the portfolio companys outstanding voting securities. As of December 31, 2016, the Company is not an affiliated person of any of these portfolio companies.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR (L) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S.
Prime Rate), which generally resets quarterly. For each such loan, the Company has provided the interest rate in effect as of December 31, 2016. As of December 31, 2016, all of our LIBOR loans were indexed to the 90-day LIBOR rate at 1.00%, except for those loans as indicated in Note 16 below.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan includes interest rate floor feature.
|--- | ------------------------------------------

|(4) | Denotes that all or a portion of the assets are owned by the Companys wholly owned subsidiary, TCG BDC SPV LLC (the SPV). The SPV has entered into a senior secured revolving credit facility (as
amended, the SPV Credit Facility). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors
of the Company or Carlyle GMS Finance MM CLO 2015-1 LLC (the 2015-1 Issuer), a wholly owned and consolidated subsidiary of the Company.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Denotes that all or a portion of the assets are owned by the Company. The Company has entered into a senior secured revolving credit facility (as amended, the Credit Facility). The lenders of the Credit
Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the SPV or the
2015-1 Issuer.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. Equity tranche
collateralized loan obligation (CLO) fund investments, which are referred to as structured finance obligations, are recorded at amortized cost using the effective interest method.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



96



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2016

(dollar amounts in thousands)



|(7) | Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the
Companys valuation policy.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may
not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Companys total assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.
|--- | -----------------------------------------------------------------------------------------------------------------------------------

|(10) | Loan was on non-accrual status as of December 31, 2016.
|---- | -------------------------------------------------------

|(11) | As of December 31, 2016, the Company has a greater than 25% but less than 50% equity or subordinated notes ownership interest in certain structured finance obligations. These investments have governing documents
that preclude the Company from controlling management of the entity and therefore the Company has determined that the issuer of the investment is not a controlled affiliate or a non-controlled affiliate
because the investments are not voting securities.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among
lenders as follows: Dimensional Dental Management, LLC (4.54%), EIP Merger Sub, LLC (Evolve IP) (3.84%), International Medical Group, Inc. (4.64%), Product Quest Manufacturing, LLC (3.54%), PSI Services LLC (4.40%), Reliant Pro Rehab, LLC (nil) and
The Hilb Group, LLC (3.96%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal,
interest and other payments.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Denotes that all or a portion of the assets are owned by the 2015-1 Issuer and secure the notes issued in connection with a $400 million term debt securitization completed by
the Company on June 26, 2015 (see Note 7, 2015-1 Notes). Accordingly, such assets are not available to the creditors of the SPV or the Company.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



97



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2016

(dollar amounts in thousands)

|(14) | Under the Investment Company Act, the Company is deemed to be an affiliated person of and control this investment fund because the Company owns more than 25% of the investment funds
outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, for more details.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(15) | As of December 31, 2016, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
|---- | ------------------------------------------------------------------------------------------------------------------------------------



|                                                                           |  |      |              |  |           |  |      |                     |  |   |           |  |  |   |      |  
|-------------------------------------------------------------------------- |  | ---- | ------------ |  | --------- |  | ---- | ------------------- |  | - | --------- |  |  | - | ---- | -
|Investmentsnon
controlled/non-affiliated                                  |  | Type |              |  | UnusedFee |  |      | Par/PrincipalAmount |  |   | FairValue | 
|First Lien Debtunfunded delayed draw and revolving term loans commitments |  |      |              |  |           |  |      |                     |  |   |           |  |  |   |      |  
|Advanced Instruments, LLC                                                  |  |      | Revolver     |  |           |  | 0.50 | %                   |  | $ | 2,500     |  |  | $ | (25  | )
|Captive Resources Midco, LLC                                               |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 1,875     |  |  |   | (2   | )
|Captive Resources Midco, LLC                                               |  |      | Delayed Draw |  |           |  | 1.25 | %                   |  |   | 3,125     |  |  |   | (4   | )
|CIP Revolution Holdings, LLC                                               |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 1,331     |  |  |   | 6    |  
|CIP Revolution Holdings, LLC                                               |  |      | Delayed Draw |  |           |  | 0.75 | %                   |  |   | 1,331     |  |  |   | 6    |  
|Derm Growth Partners III, LLC (Dermatology Associates)                     |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 1,672     |  |  |   | 1    |  
|Derm Growth Partners III, LLC (Dermatology Associates)                     |  |      | Delayed Draw |  |           |  | 1.00 | %                   |  |   | 5,247     |  |  |   | 4    |  
|Dimensional Dental Management, LLC                                         |  |      | Delayed Draw |  |           |  | 1.00 | %                   |  |   | 2,507     |  |  |   | (23  | )
|Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)                         |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 4,750     |  |  |   | (30  | )
|Direct Travel, Inc.                                                        |  |      | Delayed Draw |  |           |  | 1.00 | %                   |  |   | 9,658     |  |  |   | (56  | )
|Green Plains II LLC                                                        |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 1,352     |  |  |   | 14   |  
|National Technical Systems, Inc.                                           |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 2,031     |  |  |   | (102 | )
|National Technical Systems, Inc.                                           |  |      | Delayed Draw |  |           |  | 1.00 | %                   |  |   | 4,469     |  |  |   | (165 | )
|OnCourse Learning Corporation                                              |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 859       |  |  |   | 2    |  
|PT Intermediate Holdings III, LLC (Parts Town)                             |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 2,025     |  |  |   | 15   |  
|Superior Health Linens, LLC                                                |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 2,735     |  |  |   | (17  | )
|T2 Systems, Inc.                                                           |  |      | Revolver     |  |           |  | 0.50 | %                   |  |   | 2,933     |  |  |   | 29   |  
|The Hilb Group, LLC                                                        |  |      | Delayed Draw |  |           |  | 1.00 | %                   |  |   | 3,810     |  |  |   | 16   |  
|Vetcor Professional Practices, LLC                                         |  |      | Delayed Draw |  |           |  | 1.00 | %                   |  |   | 3,057     |  |  |   | 18   |  
|Winchester Electronics Corporation                                         |  |      | Delayed Draw |  |           |  | 1.00 | %                   |  |   | 2,500     |  |  |   | 8    |  
|                                                                           |  |      |              |  |           |  |      |                     |  |   |           |  |  |   |      |  
|Total unfunded commitments                                                 |  |      |              |  |           |  |      |                     |  | $ | 59,767    |  |  | $ | (305 | )
|                                                                           |  |      |              |  |           |  |      |                     |  |   |           |  |  |   |      |  



|(16) | As of December 31, 2016, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.77%.
|---- | ---------------------------------------------------------------------------------------



98



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of
December 31, 2016

(dollar amounts in thousands)

As of December 31, 2016, investments at fair value consisted of the following:



|                                                   |  |               |           |  |            |   |           |                |  |  |        |  
|-------------------------------------------------- |  | ------------- | --------- |  | ---------- | - | --------- | -------------- |  |  | ------ | -
|Type% of Fair Value                               |  | AmortizedCost |           |  | Fair Value |   |           | % of FairValue | 
|First Lien Debt                                    |  | $             | 1,145,326 |  |            | $ | 1,139,548 |                |  |  | 80.09  | %
|Second Lien Debt                                   |  |               | 172,960   |  |            |   | 171,864   |                |  |  | 12.08  |  
|Structured Finance Obligations                     |  |               | 9,239     |  |            |   | 5,216     |                |  |  | 0.37   |  
|Equity Investments                                 |  |               | 5,071     |  |            |   | 6,474     |                |  |  | 0.46   |  
|Investment Fund                                    |  |               | 97,385    |  |            |   | 99,657    |                |  |  | 7.00   |  
|                                                   |  |               |           |  |            |   |           |                |  |  |        |  
|Total                                              |  | $             | 1,429,981 |  |            | $ | 1,422,759 |                |  |  | 100.00 | %
|                                                   |  |               |           |  |            |   |           |                |  |  |        |  
|                                                   |  |               |          
|Type% of Fair Value of First and Second Lien Debt |  | AmortizedCost |           |  | Fair Value |   |           | % of FairValue | 
|Floating Rate                                      |  | $             | 1,308,455 |  |            | $ | 1,301,549 |                |  |  | 99.25  | %
|Fixed Rate                                         |  |               | 9,831     |  |            |   | 9,863     |                |  |  | 0.75   |  
|                                                   |  |               |           |  |            |   |           |                |  |  |        |  
|Total                                              |  | $             | 1,318,286 |  |            | $ | 1,311,412 |                |  |  | 100.00 | %
|                                                   |  |               |           |  |            |   |           |                |  |  |        |  

The industrial composition of investments at fair value as of December 31, 2016 was as follows:



|                                          |  |               |         |  |            |   |         |                |  |  |       |  
|----------------------------------------- |  | ------------- | ------- |  | ---------- | - | ------- | -------------- |  |  | ----- | -
|Industry                                  |  | AmortizedCost |         |  | Fair Value |   |         | % of FairValue | 
|Aerospace & Defense                       |  | $             | 62,759  |  |            | $ | 61,371  |                |  |  | 4.31  | %
|Automotive                                |  |               | 37,780  |  |            |   | 38,414  |                |  |  | 2.7   |  
|Banking, Finance, Insurance & Real Estate |  |               | 148,577 |  |            |   | 150,700 |                |  |  | 10.59 |  
|Beverage, Food & Tobacco                  |  |               | 15,059  |  |            |   | 15,379  |                |  |  | 1.08  |  
|Business Services                         |  |               | 149,205 |  |            |   | 141,784 |                |  |  | 9.97  |  
|Capital Equipment                         |  |               | 36,811  |  |            |   | 37,316  |                |  |  | 2.62  |  
|Chemicals, Plastics & Rubber              |  |               | 19,784  |  |            |   | 19,801  |                |  |  | 1.39  |  
|Construction & Building                   |  |               | 23,403  |  |            |   | 23,691  |                |  |  | 1.67  |  
|Consumer Services                         |  |               | 78,693  |  |            |   | 79,941  |                |  |  | 5.62  |  
|Containers, Packaging & Glass             |  |               | 49,442  |  |            |   | 47,706  |                |  |  | 3.35  |  
|Durable Consumer Goods                    |  |               | 19,930  |  |            |   | 19,932  |                |  |  | 1.04  |  
|Energy: Electricity                       |  |               | 36,783  |  |            |   | 36,758  |                |  |  | 2.59  |  
|Energy: Oil & Gas                         |  |               | 11,132  |  |            |   | 10,911  |                |  |  | 0.77  |  
|Environmental Industries                  |  |               | 40,763  |  |            |   | 41,299  |                |  |  | 2.90  |  
|Forest Products & Paper                   |  |               | 23,752  |  |            |   | 23,924  |                |  |  | 1.68  |  
|Healthcare & Pharmaceuticals              |  |               | 159,072 |  |            |   | 161,544 |                |  |  | 11.36 |  
|High Tech Industries                      |  |               | 45,617  |  |            |   | 46,317  |                |  |  | 3.26  |  
|Hotel, Gaming & Leisure                   |  |               | 30,450  |  |            |   | 30,014  |                |  |  | 2.11  |  
|Investment Fund                           |  |               | 97,385  |  |            |   | 99,657  |                |  |  | 7.00  |  
|Media: Advertising, Printing & Publishing |  |               | 70,988  |  |            |   | 71,999  |                |  |  | 5.06  |  
|Metals & Mining                           |  |               | 10,232  |  |            |   | 10,259  |                |  |  | 0.72  |  
|Non-durable Consumer Goods                |  |               | 32,759  |  |            |   | 29,348  |                |  |  | 2.06  |  
|Retail                                    |  |               | 8,625   |  |            |   | 8,320   |                |  |  | 0.58  |  
|Software                                  |  |               | 11,110  |  |            |   | 11,265  |                |  |  | 0.79  |  
|Structured Finance                        |  |               | 9,239   |  |            |   | 5,216   |                |  |  | 0.37  |  



99



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2016

(dollar amounts in thousands)

|                         |  |               |           |  |            |   |           |                |  |  |        |  
|------------------------ |  | ------------- | --------- |  | ---------- | - | --------- | -------------- |  |  | ------ | -
|Industry                 |  | AmortizedCost |           |  | Fair Value |   |           | % of FairValue | 
|Telecommunications       |  | $             | 108,553   |  |            | $ | 110,359   |                |  |  | 7.76   | %
|Transportation: Cargo    |  |               | 34,323    |  |            |   | 34,306    |                |  |  | 2.41   |  
|Transportation: Consumer |  |               | 26,841    |  |            |   | 27,882    |                |  |  | 1.96   |  
|Wholesale                |  |               | 30,914    |  |            |   | 27,346    |                |  |  | 1.92   |  
|                         |  |               |           |  |            |   |           |                |  |  |        |  
|Total                    |  | $             | 1,429,981 |  |            | $ | 1,422,759 |                |  |  | 100.00 | %
|                         |  |               |           |  |            |   |           |                |  |  |        |  

The geographical composition of investments at fair value as of December 31, 2016 was as follows:



|               |  |               |           |  |            |   |           |                |  |  |        |  
|-------------- |  | ------------- | --------- |  | ---------- | - | --------- | -------------- |  |  | ------ | -
|Geography      |  | AmortizedCost |           |  | Fair Value |   |           | % of FairValue | 
|Cayman Islands |  | $             | 9,239     |  |            | $ | 5,216     |                |  |  | 0.37   | %
|United Kingdom |  |               | 21,144    |  |            |   | 20,969    |                |  |  | 1.47   |  
|United States  |  |               | 1,399,598 |  |            |   | 1,396,574 |                |  |  | 98.16  |  
|               |  |               |           |  |            |   |           |                |  |  |        |  
|Total          |  | $             | 1,429,981 |  |            | $ | 1,422,759 |                |  |  | 100.00 | %
|               |  |               |           |  |            |   |           |                |  |  |        |  





The accompanying notes are an integral part of these consolidated financial statements.



100



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of
December 31, 2015

(dollar amounts in thousands)



|                                                                    |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |        |  |                         |   |        |  |  |  |      |  
|------------------------------------------------------------------- |  | -------- | ---------------------------------------- |  | ---------------- | ----------------------- | ------------ |  | ---------- | ------------------- |  | - | ---------------- |  |  | ------------ | ------ |  | ----------------------- | - | ------ |  |  |  | ---- | -
|Investmentsnon-controlled/non-affiliated (1)                       |  | Industry |                                          |  | InterestRate
(2) |                         | MaturityDate |  |            | Par/PrincipalAmount |  |   | AmortizedCost(6) |  |  | FairValue(7) |        |  | Percentage ofNet Assets |  
|First Lien Debt (75.53%)                                            |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |        |  |                         |   |        |  |  |  |      |  
|Access CIG, LLC (2)(3)(4)(13)                                       |  |          | Business Services                        |  |                  | L + 5.00% (1.00% Floor) |              |  | 10/17/2021 |                     |  | $ | 18,522           |  |  | $            | 18,388 |  |                         | $ | 18,291 |  |  |  | 3.20 | %
|AF Borrower LLC (Accuvant)
(2)(3)(5)(13)                            |  |          | High Tech Industries                     |  |                  | L + 5.25% (1.00% Floor) |              |  | 1/28/2022  |                     |  |   | 16,277           |  |  |              | 16,055 |  |                         |   | 15,829 |  |  |  | 2.77 |  
|Alpha Packaging Holdings, Inc. (2)(3)(4)(13)                        |  |          | Containers, Packaging &Glass             |  |                  | L + 4.25% (1.00% Floor) |              |  | 5/12/2020  |                     |  |   | 11,409           |  |  |              | 11,398 |  |                         |   | 11,180 |  |  |  | 1.96 |  
|                                                                    |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |        |  |                         |   |        |  |  |  |      |  
|Anaren, Inc. (2)(3)(4)(13)                                          |  |          | Telecommunications                       |  |                  | L + 4.50% (1.00% Floor) |              |  | 2/18/2021  |                     |  |   | 10,981           |  |  |              | 10,898 |  |                         |   | 10,759 |  |  |  | 1.88 |  
|APX Group, Inc. (5)(8)                                              |  |          | Consumer Services                        |  |                  | 6.38%                   |              |  | 12/1/2019  |                     |  |   | 10,000           |  |  |              | 9,749  |  |                         |   | 9,575  |  |  |  | 1.67 |  
|Audax AAMP Holdings, Inc.(2)(3)(4)(13)                              |  |          | Durable Consumer Goods                   |  |                  | L + 5.50% (1.00% Floor) |              |  | 6/24/2017  |                     |  |   | 11,025           |  |  |              | 10,954 |  |                         |   | 10,885 |  |  |  | 1.90 |  
|BAART Programs, Inc.(2)(4)(15)                                      |  |          | Healthcare & Pharmaceuticals             |  |                  | L + 8.07% (0.00% Floor) |              |  | 10/9/2021  |                     |  |   | 7,481            |  |  |              | 7,422  |  |                         |   | 7,556  |  |  |  | 1.32 |  
|Blue Bird Body Company (2)(3)(4)(8)(13)                             |  |          | Transportation: Consumer                 |  |                  | L + 5.50% (1.00% Floor) |              |  | 6/26/2020  |                     |  |   | 9,491            |  |  |              | 9,110  |  |                         |   | 9,361  |  |  |  | 1.64 |  
|Brooks Equipment Company, LLC (2)(3)(4)(13)                         |  |          | Construction & Building                  |  |                  | L + 5.35% (1.00% Floor) |              |  | 8/29/2020  |                     |  |   | 7,209            |  |  |              | 7,160  |  |                         |   | 7,097  |  |  |  | 1.24 |  
|Capstone Logistics Acquisition, Inc. (2)(3)(4)(13)(15)              |  |          | Transportation: Cargo                    |  |                  | L + 4.50% (1.00% Floor) |              |  | 10/7/2021  |                     |  |   | 19,750           |  |  |              | 19,582 |  |                         |   | 19,134 |  |  |  | 3.35 |  
|Captive Resources Midco, LLC (2)(3)(4)(14)                          |  |          | Banking, Finance, Insurance &Real Estate |  |                  | L + 5.75% (1.00% Floor) |              |  | 6/30/2020  |                     |  |   | 29,350           |  |  |              | 28,890 |  |                         |   | 28,900 |  |  |  | 5.05 |  
|Castle Management Borrower LLC (Highgate Hotels L.P.)
(2)(3)(4)(13) |  |          | Hotel, Gaming & Leisure                  |  |                  | L + 4.50% (1.00% Floor) |              |  | 9/18/2020  |                     |  |   | 9,878            |  |  |              | 9,807  |  |                         |   | 9,535  |  |  |  | 1.67 |  
|Central Security Group, Inc.(2)(3)(4)(13)                           |  |          | Consumer Services                        |  |                  | L + 5.25% (1.00% Floor) |              |  | 10/6/2020  |                     |  |   | 24,750           |  |  |              | 24,444 |  |                         |   | 23,884 |  |  |  | 4.18 |  
|Colony Hardware Corporation
(2)(3)(5)(13)                           |  |          | Construction & Building                  |  |                  | L + 6.00% (1.00% Floor) |              |  | 10/23/2021 |                     |  |   | 13,000           |  |  |              | 12,787 |  |                         |   | 12,861 |  |  |  | 2.25 |  
|CRCI Holdings Inc. (CLEAResult Consulting, Inc.)
(2)(3)(4)(13)(15)  |  |          | Utilities: Electric                      |  |                  | L + 4.25% (1.00% Floor) |              |  | 7/10/2019  |                     |  |   | 5,910            |  |  |              | 5,892  |  |                         |   | 5,704  |  |  |  | 1.00 |  
|Dent Wizard International Corporation (2)(3)(4)(13)                 |  |          | Automotive                               |  |                  | L + 4.75% (1.00% Floor) |              |  | 4/7/2020   |                     |  |   | 7,809            |  |  |              | 7,775  |  |                         |   | 7,591  |  |  |  | 1.33 |  
|Emerging Markets Communications, LLC (2)(3)(4)(13)                  |  |          | Telecommunications                       |  |                  | L + 5.75% (1.00% Floor) |              |  | 7/1/2021   |                     |  |   | 17,910           |  |  |              | 16,225 |  |                         |   | 16,882 |  |  |  | 2.95 |  
|EP Minerals, LLC (2)(3)(4)(13)                                      |  |          | Metals & Mining                          |  |                  | L + 4.50% (1.00% Floor) |              |  | 8/20/2020  |                     |  |   | 10,369           |  |  |              | 10,329 |  |                         |   | 10,168 |  |  |  | 1.78 |  
|FCX Holdings Corp. (2)(3)(4)(13)(15)                                |  |          | Capital Equipment                        |  |                  | L + 4.50% (1.00% Floor) |              |  | 8/4/2020   |                     |  |   | 10,047           |  |  |              | 10,041 |  |                         |   | 9,862  |  |  |  | 1.72 |  
|Genex Holdings, Inc. (2)(3)(13)(15)                                 |  |          | Banking, Finance, Insurance &Real Estate |  |                  | L + 4.25% (1.00% Floor) |              |  | 5/30/2021  |                     |  |   | 4,243            |  |  |              | 4,227  |  |                         |   | 4,164  |  |  |  | 0.73 |  
|Green Energy Partners/Stonewall LLC (2)(3)(5)(13)                   |  |          | Energy: Electricity                      |  |                  | L + 5.50% (1.00% Floor) |              |  | 11/13/2021 |                     |  |   | 16,600           |  |  |              | 16,456 |  |                         |   | 16,354 |  |  |  | 2.86 |  
|Hummel Station LLC (2)(3)(5)(15)                                    |  |          | Energy: Electricity                      |  |                  | L + 6.00% (1.00% Floor) |              |  | 10/27/2022 |                     |  |   | 21,000           |  |  |              | 20,174 |  |                         |   | 20,553 |  |  |  | 3.59 |  
|Indra Holdings Corp. (Totes Isotoner) (2)(3)(5)(13)                 |  |          | Non-durable Consumer Goods               |  |                  | L + 4.25% (1.00% Floor) |              |  | 5/1/2021   |                     |  |   | 14,285           |  |  |              | 14,173 |  |                         |   | 13,818 |  |  |  | 2.42 |  
|International Medical Group, Inc. (2)(3)(5)(12)                     |  |          | Banking, Finance, Insurance &Real Estate |  |                  | L + 4.75% (1.00% Floor) |              |  | 10/30/2020 |                     |  |   | 30,000           |  |  |              | 29,415 |  |                         |   | 30,276 |  |  |  | 5.30 |  
|Jackson Hewitt Inc.(2)(3)(4)(13)                                    |  |          | Retail                                   |  |                  | L + 7.00% (1.00% Floor) |              |  | 7/30/2020  |                     |  |   | 14,800           |  |  |              | 14,526 |  |                         |   | 14,600 |  |  |  | 2.55 |  
|Language Line, LLC (2)(3)(4)(13)(15)                                |  |          | Telecommunications                       |  |                  | L + 5.50% (1.00% Floor) |              |  | 7/7/2021   |                     |  |   | 23,896           |  |  |              | 23,675 |  |                         |   | 23,697 |  |  |  | 4.14 |  
|Ministry Brands, LLC (2)(3)(5)(10)(14)                              |  |          | High Tech Industries                     |  |                  | L + 7.00% (1.00% Floor) |              |  | 11/20/2021 |                     |  |   | 936              |  |  |              | 926    |  |                         |   | 901    |  |  |  | 0.16 |  
|Ministry Brands, LLC (2)(3)(5)(12)(14)                              |  |          | High Tech Industries                     |  |                  | L + 7.00% (1.00% Floor) |              |  | 11/20/2021 |                     |  |   | 17,471           |  |  |              | 17,190 |  |                         |   | 17,371 |  |  |  | 3.04 |  
|MSX International, Inc. (2)(3)(4)(13)                               |  |          | Automotive                               |  |                  | L + 5.00% (1.00% Floor) |              |  | 8/21/2020  |                     |  |   | 9,499            |  |  |              | 9,424  |  |                         |   | 9,218  |  |  |  | 1.61 |  
|National Technical Systems, Inc.(2)(3)(4)(5)(13)(14)                |  |          | Aerospace & Defense                      |  |                  | L + 6.00% (1.00% Floor) |              |  | 6/12/2021  |                     |  |   | 25,935           |  |  |              | 25,609 |  |                         |   | 24,919 |  |  |  | 4.36 |  
|NES Global Talent Finance US LLC (United Kingdom)
(2)(3)(4)(8)(13)  |  |          | Energy: Oil & Gas                        |  |                  | L + 5.50% (1.00% Floor) |              |  | 10/3/2019  |                     |  |   | 11,875           |  |  |              | 11,715 |  |                         |   | 11,327 |  |  |  | 1.98 |  



101



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2015

(dollar amounts in thousands)



|                                                                                   |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |        |  
|---------------------------------------------------------------------------------- |  | -------- | ---------------------------------------- |  | ---------------- | ----------------------- | ------------ |  | ---------- | ------------------- |  | - | ---------------- |  |  | ------------ | ------- |  | ----------------------- | - | ------- |  |  |  | ------ | -
|Investmentsnon-controlled/non-affiliated(1)                                       |  | Industry |                                          |  | InterestRate
(2) |                         | MaturityDate |  |            | Par/PrincipalAmount |  |   | AmortizedCost(6) |  |  | FairValue(7) |         |  | Percentage ofNet Assets |  
|First Lien Debt (75.53%) (continued)                                               |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |        |  
|Paradigm Acquisition Corp. (2)(3)(5)(13)                                           |  |          | Business Services                        |  |                  | L + 5.00% (1.00% Floor) |              |  | 6/2/2022   |                     |  | $ | 23,482           |  |  | $            | 23,154  |  |                         | $ | 22,984  |  |  |  | 4.02   | %
|Pelican Products, Inc. (2)(3)(4)(13)                                               |  |          | Containers, Packaging & Glass            |  |                  | L + 4.25% (1.00% Floor) |              |  | 4/11/2020  |                     |  |   | 7,817            |  |  |              | 7,832   |  |                         |   | 7,444   |  |  |  | 1.30   |  
|Plano Molding Company, LLC
(2)(3)(5)(13)                                           |  |          | Hotel, Gaming & Leisure                  |  |                  | L + 6.00% (1.00% Floor) |              |  | 5/12/2021  |                     |  |   | 22,487           |  |  |              | 22,294  |  |                         |   | 21,779  |  |  |  | 3.81   |  
|Product Quest Manufacturing, LLC
(2)(3)(4)(5)(12)                                  |  |          | Containers, Packaging & Glass            |  |                  | L + 5.75% (1.00% Floor) |              |  | 9/9/2020   |                     |  |   | 28,000           |  |  |              | 27,477  |  |                         |   | 27,810  |  |  |  | 4.86   |  
|Prowler Acquisition Corp. (Pipeline Supply and Service, LLC) (2)(3)(4)             |  |          | Wholesale                                |  |                  | L + 4.50% (1.00% Floor) |              |  | 1/28/2020  |                     |  |   | 10,911           |  |  |              | 10,836  |  |                         |   | 9,736   |  |  |  | 1.70   |  
|PSC Industrial Holdings Corp
(2)(3)(4)(13)                                         |  |          | Environmental Industries                 |  |                  | L + 4.75% (1.00% Floor) |              |  | 12/5/2020  |                     |  |   | 11,880           |  |  |              | 11,782  |  |                         |   | 11,622  |  |  |  | 2.03   |  
|PSI Services LLC (2)(3)(4)(5)(12)                                                  |  |          | Business Services                        |  |                  | L + 7.00% (1.00% Floor) |              |  | 2/27/2021  |                     |  |   | 23,471           |  |  |              | 22,885  |  |                         |   | 23,933  |  |  |  | 4.19   |  
|SolAero Technologies Corp.
(2)(3)(4)(15)                                           |  |          | Telecommunications                       |  |                  | L + 4.75% (1.00% Floor) |              |  | 12/10/2020 |                     |  |   | 10,827           |  |  |              | 10,744  |  |                         |   | 10,511  |  |  |  | 1.84   |  
|SolAero Technologies Corp.
(2)(3)(13)(15)                                          |  |          | Telecommunications                       |  |                  | L + 5.25% (1.00% Floor) |              |  | 12/10/2020 |                     |  |   | 9,104            |  |  |              | 9,023   |  |                         |   | 8,887   |  |  |  | 1.55   |  
|Synarc-Biocore Holdings, LLC
(2)(3)(4)(13)                                         |  |          | Healthcare & Pharmaceuticals             |  |                  | L + 4.50% (1.00% Floor) |              |  | 3/10/2021  |                     |  |   | 13,264           |  |  |              | 13,162  |  |                         |   | 12,599  |  |  |  | 2.20   |  
|Systems Maintenance Services
Holding, Inc. (2)(3)(13)                              |  |          | High Tech Industries                     |  |                  | L + 4.00% (1.00% Floor) |              |  | 10/18/2019 |                     |  |   | 2,193            |  |  |              | 2,187   |  |                         |   | 2,155   |  |  |  | 0.38   |  
|TASC, Inc. (2)(3)(4)(8)(13)                                                        |  |          | Aerospace & Defense                      |  |                  | L + 6.00% (1.00% Floor) |              |  | 5/23/2020  |                     |  |   | 18,351           |  |  |              | 17,713  |  |                         |   | 17,916  |  |  |  | 3.13   |  
|Teaching Strategies, LLC
(2)(3)(4)(13)(15)                                         |  |          | Media: Advertising,Printing & Publishing |  |                  | L + 5.50% (0.50% Floor) |              |  | 10/1/2019  |                     |  |   | 13,953           |  |  |              | 13,904  |  |                         |   | 13,844  |  |  |  | 2.42   |  
|The Hilb Group, LLC
(2)(3)(5)(12)(13)(14)                                          |  |          | Banking, Finance, Insurance &Real Estate |  |                  | L + 5.75% (1.00% Floor) |              |  | 6/24/2021  |                     |  |   | 23,458           |  |  |              | 22,850  |  |                         |   | 23,555  |  |  |  | 4.12   |  
|The Hygenic Corporation (Performance
Health) (2)(3)(4)(13)(15)                     |  |          | Non-durable Consumer Goods               |  |                  | L + 5.00% (1.00% Floor) |              |  | 10/11/2020 |                     |  |   | 15,920           |  |  |              | 15,721  |  |                         |   | 15,368  |  |  |  | 2.69   |  
|The SI Organization, Inc.
(2)(3)(4)(13)                                            |  |          | Aerospace & Defense                      |  |                  | L + 4.75% (1.00% Floor) |              |  | 11/23/2019 |                     |  |   | 8,778            |  |  |              | 8,716   |  |                         |   | 8,724   |  |  |  | 1.53   |  
|The Topps Company, Inc. (2)(3)(4)(13)                                              |  |          | Non-durable Consumer Goods               |  |                  | L + 6.00% (1.25% Floor) |              |  | 10/2/2018  |                     |  |   | 11,395           |  |  |              | 11,326  |  |                         |   | 11,395  |  |  |  | 1.99   |  
|TruckPro, LLC (2)(3)(4)(13)(15)                                                    |  |          | Automotive                               |  |                  | L + 5.00% (1.00% Floor) |              |  | 8/6/2018   |                     |  |   | 9,683            |  |  |              | 9,648   |  |                         |   | 9,546   |  |  |  | 1.67   |  
|TwentyEighty, Inc. (fka Miller
Heiman, Inc.) (2)(3)(4)(13)                         |  |          | Business Services                        |  |                  | L + 5.75% (1.00% Floor) |              |  | 9/30/2019  |                     |  |   | 19,094           |  |  |              | 18,901  |  |                         |   | 16,904  |  |  |  | 2.96   |  
|U.S. Farathane, LLC (2)(3)(4)(13)                                                  |  |          | Automotive                               |  |                  | L + 5.75% (1.00% Floor) |              |  | 12/23/2021 |                     |  |   | 15,818           |  |  |              | 15,535  |  |                         |   | 15,586  |  |  |  | 2.73   |  
|Vetcor Professional Practices, LLC
(2)(3)(4)(5)(13)(14)                            |  |          | Consumer Services                        |  |                  | L + 6.00% (1.00% Floor) |              |  | 4/20/2021  |                     |  |   | 11,085           |  |  |              | 10,983  |  |                         |   | 11,034  |  |  |  | 1.93   |  
|Violin Finco S.A.R.L. (Alexander Mann Solutions) (United Kingdom) (2)(3)(4)(8)(13) |  |          | Business Services                        |  |                  | L + 4.75% (1.00% Floor) |              |  | 12/20/2019 |                     |  |   | 11,252           |  |  |              | 11,176  |  |                         |   | 11,241  |  |  |  | 1.97   |  
|Vistage Worldwide, Inc.
(2)(3)(4)(13)(15)                                          |  |          | Business Services                        |  |                  | L + 5.50% (1.00% Floor) |              |  | 8/19/2021  |                     |  |   | 29,813           |  |  |              | 29,529  |  |                         |   | 29,505  |  |  |  | 5.16   |  
|Vitera Healthcare Solutions, LLC
(2)(3)(4)(13)                                     |  |          | Healthcare & Pharmaceuticals             |  |                  | L + 5.00% (1.00% Floor) |              |  | 11/4/2020  |                     |  |   | 9,437            |  |  |              | 9,369   |  |                         |   | 9,107   |  |  |  | 1.59   |  
|Zest Holdings, LLC (2)(3)(4)(13)                                                   |  |          | Durable Consumer Goods                   |  |                  | L + 4.00% (1.00% Floor) |              |  | 8/16/2020  |                     |  |   | 9,694            |  |  |              | 9,694   |  |                         |   | 9,597   |  |  |  | 1.69   |  
|                                                                                   |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |        |  
|First Lien Debt Total                                                              |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  | $            | 800,857 |  |                         | $ | 795,034 |  |  |  | 139.06 | %
|                                                                                   |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |        |  



102



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2015

(dollar amounts in thousands)



|                                                                       |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |       |  
|---------------------------------------------------------------------- |  | -------- | ---------------------------------------- |  | ---------------- | ----------------------- | ------------ |  | ---------- | ------------------- |  | - | ---------------- |  |  | ------------ | ------- |  | ----------------------- | - | ------- |  |  |  | ----- | -
|Investmentsnon-controlled/non-affiliated(1)                           |  | Industry |                                          |  | InterestRate (2) |                         | MaturityDate |  |            | Par/PrincipalAmount |  |   | AmortizedCost(6) |  |  | FairValue(7) |         |  | Percentage ofNet Assets |  
|Second Lien Debt (19.98%)                                              |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |       |  
|AF Borrower LLC (Accuvant) (2)(3)(5)                                   |  |          | High Tech Industries                     |  |                  | L + 9.00% (1.00% Floor) |              |  | 1/30/2023  |                     |  | $ | 8,000            |  |  | $            | 7,927   |  |                         | $ | 7,666   |  |  |  | 1.34  | %
|Allied Security Holdings LLC
(2)(3)(5)(13)                             |  |          | Business Services                        |  |                  | L + 7.00% (1.00% Floor) |              |  | 8/13/2021  |                     |  |   | 8,000            |  |  |              | 7,948   |  |                         |   | 7,460   |  |  |  | 1.30  |  
|AmeriLife Group, LLC (2)(3)(5)                                         |  |          | Banking, Finance, Insurance &Real Estate |  |                  | L + 8.75% (1.00% Floor) |              |  | 1/10/2023  |                     |  |   | 20,000           |  |  |              | 19,619  |  |                         |   | 19,598  |  |  |  | 3.44  |  
|Argon Medical Devices, Inc.
(2)(3)(4)(5)                               |  |          | Healthcare & Pharmaceuticals             |  |                  | L + 9.50% (1.00% Floor) |              |  | 6/23/2022  |                     |  |   | 24,000           |  |  |              | 23,294  |  |                         |   | 23,354  |  |  |  | 4.09  |  
|Berlin Packaging L.L.C.
(2)(3)(5)(13)(15)                              |  |          | Containers, Packaging &Glass             |  |                  | L + 6.75% (1.00% Floor) |              |  | 10/1/2022  |                     |  |   | 9,200            |  |  |              | 9,139   |  |                         |   | 8,694   |  |  |  | 1.52  |  
|Charter NEX US Holdings, Inc.
(2)(3)(5)(13)                            |  |          | Chemicals, Plastics & Rubber             |  |                  | L + 8.25% (1.00% Floor) |              |  | 2/5/2023   |                     |  |   | 10,000           |  |  |              | 9,864   |  |                         |   | 9,459   |  |  |  | 1.65  |  
|Confie Seguros Holding II Co.
(2)(3)(5)(15)                            |  |          | Banking, Finance, Insurance &Real Estate |  |                  | L + 9.00% (1.25% Floor) |              |  | 5/8/2019   |                     |  |   | 12,000           |  |  |              | 11,896  |  |                         |   | 11,820  |  |  |  | 2.07  |  
|Creganna Finance (US) LLC (Ireland)
(2)(3)(5)(8)                       |  |          | Healthcare & Pharmaceuticals             |  |                  | L + 8.00% (1.00% Floor) |              |  | 6/1/2022   |                     |  |   | 9,900            |  |  |              | 9,814   |  |                         |   | 9,740   |  |  |  | 1.70  |  
|DiversiTech Corporation (2)(3)(5)(13)                                  |  |          | Capital Equipment                        |  |                  | L + 8.00% (1.00% Floor) |              |  | 11/19/2022 |                     |  |   | 8,400            |  |  |              | 8,294   |  |                         |   | 8,131   |  |  |  | 1.42  |  
|Drew Marine Group Inc. (2)(3)(4)(5)                                    |  |          | Chemicals, Plastics & Rubber             |  |                  | L + 7.00% (1.00% Floor) |              |  | 5/19/2021  |                     |  |   | 12,500           |  |  |              | 12,478  |  |                         |   | 11,743  |  |  |  | 2.05  |  
|Genex Holdings, Inc. (2)(3)(5)(15)                                     |  |          | Banking, Finance, Insurance &Real Estate |  |                  | L + 7.75% (1.00% Floor) |              |  | 5/30/2022  |                     |  |   | 7,990            |  |  |              | 7,906   |  |                         |   | 7,390   |  |  |  | 1.29  |  
|Genoa, a QoL Healthcare Company,
LLC (2)(3)(5)(13)                     |  |          | Retail                                   |  |                  | L + 7.75% (1.00% Floor) |              |  | 4/28/2023  |                     |  |   | 9,900            |  |  |              | 9,807   |  |                         |   | 9,523   |  |  |  | 1.67  |  
|Institutional Shareholder Services Inc.
(2)(3)(5)(13)                  |  |          | Banking, Finance, Insurance &Real Estate |  |                  | L + 7.50% (1.00% Floor) |              |  | 4/30/2022  |                     |  |   | 12,500           |  |  |              | 12,397  |  |                         |   | 12,014  |  |  |  | 2.10  |  
|Jazz Acquisition, Inc. (Wencor)
(2)(3)(5)(13)                          |  |          | Aerospace & Defense                      |  |                  | L + 6.75% (1.00% Floor) |              |  | 6/19/2022  |                     |  |   | 6,700            |  |  |              | 6,674   |  |                         |   | 5,759   |  |  |  | 1.01  |  
|Landslide Holdings, Inc. (LANDesk Software)
(2)(3)(13)                 |  |          | Software                                 |  |                  | L + 7.25% (1.00% Floor) |              |  | 2/25/2021  |                     |  |   | 3,500            |  |  |              | 3,480   |  |                         |   | 3,113   |  |  |  | 0.54  |  
|MRI Software, LLC (2)(3)(5)(15)                                        |  |          | Software                                 |  |                  | L + 8.00% (1.00% Floor) |              |  | 6/23/2022  |                     |  |   | 11,250           |  |  |              | 11,093  |  |                         |   | 10,890  |  |  |  | 1.91  |  
|Phillips-Medisize Corporation
(2)(3)(5)(13)                            |  |          | Chemicals, Plastics & Rubber             |  |                  | L + 7.25% (1.00% Floor) |              |  | 6/16/2022  |                     |  |   | 5,000            |  |  |              | 4,958   |  |                         |   | 4,700   |  |  |  | 0.82  |  
|Power Stop, LLC(5)(9)                                                  |  |          | Automotive                               |  |                  | 11.00%                  |              |  | 5/29/2022  |                     |  |   | 10,000           |  |  |              | 9,811   |  |                         |   | 10,080  |  |  |  | 1.76  |  
|Prime Security Services Borrower, LLC (Protection One, Inc.) (2)(3)(5) |  |          | Consumer Services                        |  |                  | L + 8.75% (1.00% Floor) |              |  | 7/1/2022   |                     |  |   | 6,700            |  |  |              | 6,607   |  |                         |   | 6,271   |  |  |  | 1.10  |  
|Prowler Acquisition Corp. (Pipeline Supply and Service, LLC) (2)(3)(5) |  |          | Wholesale                                |  |                  | L + 8.50% (1.00% Floor) |              |  | 7/28/2020  |                     |  |   | 3,000            |  |  |              | 2,953   |  |                         |   | 2,493   |  |  |  | 0.44  |  
|Systems Maintenance Services
Holding, Inc. (2)(3)(4)                   |  |          | High Tech Industries                     |  |                  | L + 8.25% (1.00% Floor) |              |  | 10/18/2020 |                     |  |   | 6,000            |  |  |              | 5,959   |  |                         |   | 5,860   |  |  |  | 1.02  |  
|TASC, Inc.(5)(8)                                                       |  |          | Aerospace & Defense                      |  |                  | 12.00%                  |              |  | 5/21/2021  |                     |  |   | 6,000            |  |  |              | 5,891   |  |                         |   | 6,075   |  |  |  | 1.06  |  
|Vitera Healthcare Solutions, LLC
(2)(3)(4)(13)                         |  |          | Healthcare & Pharmaceuticals             |  |                  | L + 8.25% (1.00% Floor) |              |  | 11/4/2021  |                     |  |   | 2,000            |  |  |              | 1,976   |  |                         |   | 1,784   |  |  |  | 0.31  |  
|Watchfire Enterprises, Inc.
(2)(3)(5)(13)                              |  |          | Media: Advertising,Printing & Publishing |  |                  | L + 8.00% (1.00% Floor) |              |  | 10/2/2021  |                     |  |   | 7,000            |  |  |              | 6,923   |  |                         |   | 6,779   |  |  |  | 1.19  |  
|                                                                       |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |       |  
|Second Lien Debt Total                                                 |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  | $            | 216,708 |  |                         | $ | 210,396 |  |  |  | 36.80 | %
|                                                                       |  |          |                                          |  |                  |                         |              |  |            |                     |  |   |                  |  |  |              |         |  |                         |   |         |  |  |  |       |  



103



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2015

(dollar amounts in thousands)



|                                                  |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  |               |           |  |                         |   |           |   |  |  |        |  
|------------------------------------------------- |  | -------- | --------------------------------------- |  | ------------ |  | ---------- | ------------------- |  | - | ---------------- |  |  | ------------- | --------- |  | ----------------------- | - | --------- | - |  |  | ------ | -
|Investmentsnon-controlled/non-affiliated (1)     |  | Industry |                                         |  | MaturityDate |  |            | Par/PrincipalAmount |  |   | AmortizedCost(6) |  |  | FairValue(7)  |           |  | Percentage ofNet Assets |  
|Structured Finance Obligations (4.26%)
(5)(8)(11) |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  |               |           |  |                         |   |           |   |  |  |        |  
|1776 CLO I, Ltd., Subordinated Notes              |  |          | Structured Finance                      |  |              |  | 5/8/2020   |                     |  | $ | 11,750           |  |  | $             | 8,079     |  |                         | $ | 3,347     |   |  |  | 0.59   | %
|AIMCO CLO, Series 2014-A, Class F, 5.47% (2)      |  |          | Structured Finance                      |  |              |  | 7/20/2026  |                     |  |   | 2,700            |  |  |               | 2,369     |  |                         |   | 1,701     |   |  |  | 0.30   |  
|AIMCO CLO, Series 2014-A, Subordinated Notes      |  |          | Structured Finance                      |  |              |  | 7/20/2026  |                     |  |   | 11,500           |  |  |               | 8,369     |  |                         |   | 5,779     |   |  |  | 1.00   |  
|Ares XXVIII CLO Ltd., Subordinated Notes          |  |          | Structured Finance                      |  |              |  | 10/17/2024 |                     |  |   | 7,000            |  |  |               | 4,416     |  |                         |   | 3,255     |   |  |  | 0.57   |  
|Babson CLO Ltd. 2005-I, Subordinated Notes        |  |          | Structured Finance                      |  |              |  | 4/15/2019  |                     |  |   | 7,632            |  |  |               | 333       |  |                         |   | 86        |   |  |  | 0.02   |  
|CIFC Funding 2007-III, Ltd., Income Notes         |  |          | Structured Finance                      |  |              |  | 7/26/2021  |                     |  |   | 6,500            |  |  |               | 2,902     |  |                         |   | 2,453     |   |  |  | 0.43   |  
|Clydesdale CLO 2005, Ltd., Subordinated Notes     |  |          | Structured Finance                      |  |              |  | 12/6/2017  |                     |  |   | 5,750            |  |  |               |          |  |                         |   | 11        |   |  |  | 0.00   |  
|Flagship VII Limited, Subordinated Notes          |  |          | Structured Finance                      |  |              |  | 1/20/2026  |                     |  |   | 7,000            |  |  |               | 4,781     |  |                         |   | 3,184     |   |  |  | 0.56   |  
|ING IM CLO 2012-1 LLC, Preferred Shares           |  |          | Structured Finance                      |  |              |  | 3/14/2022  |                     |  |   | 7,610            |  |  |               | 4,637     |  |                         |   | 3,789     |   |  |  | 0.66   |  
|ING IM CLO 2012-1 LLC, Subordinated Notes         |  |          | Structured Finance                      |  |              |  | 3/14/2022  |                     |  |   | 2,500            |  |  |               | 1,523     |  |                         |   | 1,245     |   |  |  | 0.22   |  
|MSIM Peconic Bay, Ltd., Subordinated Notes        |  |          | Structured Finance                      |  |              |  | 7/20/2019  |                     |  |   | 4,500            |  |  |               | 1,112     |  |                         |   | 923       |   |  |  | 0.16   |  
|Nautique Funding Ltd., Income Notes               |  |          | Structured Finance                      |  |              |  | 4/15/2020  |                     |  |   | 5,000            |  |  |               | 2,760     |  |                         |   | 2,275     |   |  |  | 0.40   |  
|Steele Creek CLO 2014-I, LLC, Subordinated Notes  |  |          | Structured Finance                      |  |              |  | 8/21/2026  |                     |  |   | 18,000           |  |  |               | 13,453    |  |                         |   | 12,241    |   |  |  | 2.14   |  
|Venture VI CDO Limited, Preference Shares         |  |          | Structured Finance                      |  |              |  | 8/3/2020   |                     |  |   | 7,000            |  |  |               | 3,488     |  |                         |   | 3,203     |   |  |  | 0.56   |  
|Westwood CDO I, Ltd., Subordinated Notes          |  |          | Structured Finance                      |  |              |  | 3/25/2021  |                     |  |   | 4,000            |  |  |               | 1,718     |  |                         |   | 1,320     |   |  |  | 0.23   |  
|                                                  |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  |               |           |  |                         |   |           |   |  |  |        |  
|Structured Finance Obligations Total              |  |          |                                         |  |              |  |            |                     |  | $ | 59,940           |  |  | $             | 44,812    |  |                         |   | 7.84      | %
|                                                  |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  |               |           |  |                         |   |           |   |  |  |        |  
|                                                  |  |          |                                         |  |              | 
|Investmentsnon-controlled/non-affiliated (1)     |  | Industry |                                         |  |              |  |            | Units               |  |   | Cost             |  |  | FairValue (7) |           |  | Percentage ofNet Assets |  
|Equity Investments (0.23%) (5)                    |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  |               |           |  |                         |   |           |   |  |  |        |  
|Power Stop Intermediate Holdings, LLC             |  |          | Automotive                              |  |              |  |            |                     |  |   | 7,150            |  |  | $             | 715       |  |                         | $ | 788       |   |  |  | 0.14   | %
|THG Acquisition, LLC (The Hilb Group, LLC)        |  |          | Banking, Finance,Insurance & RealEstate |  |              |  |            |                     |  |   | 1,500,000        |  |  |               | 1,500     |  |                         |   | 1,636     |   |  |  | 0.28   |  
|                                                  |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  |               |           |  |                         |   |           |   |  |  |        |  
|Equity Investments Total                          |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  | $             | 2,215     |  |                         | $ | 2,424     |   |  |  | 0.42   | %
|                                                  |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  |               |           |  |                         |   |           |   |  |  |        |  
|Total
Investmentsnon-controlled/non-affiliated   |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  | $             | 1,079,720 |  |                         | $ | 1,052,666 |   |  |  | 184.12 | %
|                                                  |  |          |                                         |  |              |  |            |                     |  |   |                  |  |  |               |           |  |                         |   |           |   |  |  |        |  



104



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2015

(dollar amounts in thousands)



|(1) | Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States and issuers of structured finance obligations are domiciled in the Cayman Islands. Under the
Investment Company Act, the Company would be deemed to control a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the
portfolio company. As of December 31, 2015, the Company does not control any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an affiliated person of a portfolio company if the
Company owns 5% or more of the portfolio companys outstanding voting securities. As of December 31, 2015, the Company is not an affiliated person of any of these portfolio companies.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Variable rate loans to the portfolio companies and variable rate notes of structured finance obligations bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly
based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan and note, the Company has provided the interest rate in effect as of December 31, 2015. As of December 31, 2015, all of our LIBOR
loans were indexed to the 90-day LIBOR rate at 0.61%, except for those loans as indicated in Note 15 below.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan includes interest rate floor feature.
|--- | ------------------------------------------

|(4) | Denotes that all or a portion of the assets are owned by the SPV. The SPV has entered into the SPV Credit Facility. The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the
assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the Company or the 2015-1 Issuer.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Denotes that all or a portion of the assets are owned by the Company. The Company has entered into the Credit Facility. The lenders of the Credit Facility have a first lien security interest in substantially all of the
portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the SPV or the 2015-1 Issuer.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. Equity tranche
CLO fund investments, which are referred to as structured finance obligations, are recorded at amortized cost using the effective interest method.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the
Companys valuation policy.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may
not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Companys total assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.
|--- | -------------------------------------------------------------------------------------------------------------------

|(10) | The Company receives less than the stated interest rate of this loan as a result of an agreement among lenders. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first
lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | As of December 31, 2015, the Company has a greater than 25% but less than 50% equity or subordinated notes ownership interest in certain structured finance obligations. These investments have governing documents
that preclude the Company from controlling management of the entity and therefore the Company has determined that the issuer of the investment is not a controlled affiliate or a non-controlled affiliate
because the investments are not voting securities.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



105



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2015

(dollar amounts in thousands)



|(12) | In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among
lenders. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other
payments.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Denotes that all or a portion of the assets are owned by the 2015-1 Issuer and secure the notes issued in connection with a $400 million term debt securitization completed by
the Company on June 26, 2015 (see Note 7, 2015-1 Notes). Accordingly, such assets are not available to the creditors of the SPV or the Company.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(14) | As of December 31, 2015, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
|---- | ------------------------------------------------------------------------------------------------------------------------------------



|                                                                           |  |              |  |           |      |   |                     |   |        |           |  |   |      |  
|-------------------------------------------------------------------------- |  | ------------ |  | --------- | ---- | - | ------------------- | - | ------ | --------- |  | - | ---- | -
|First Lien Debtunfunded delayed draw and revolving term loans
commitments |  | Type         |  | UnusedFee |      |   | Par/PrincipalAmount |   |        | FairValue | 
|Captive Resources Midco, LLC                                               |  | Revolver     |  |           | 0.50 | % |                     | $ | 1,875  |           |  | $ | (25  | )
|Captive Resources Midco, LLC                                               |  | Delayed Draw |  |           | 1.25 | % |                     |   | 3,125  |           |  |   | (41  | )
|Ministry Brands, LLC (First Lien/First Out)                                |  | Delayed Draw |  |           | 1.00 | % |                     |   | 64     |           |  |   | (2   | )
|Ministry Brands, LLC (First Lien/Last Out)                                 |  | Delayed Draw |  |           | 1.00 | % |                     |   | 1,530  |           |  |   | (8   | )
|National Technical Systems, Inc.                                           |  | Revolver     |  |           | 0.50 | % |                     |   | 2,031  |           |  |   | (79  | )
|National Technical Systems, Inc.                                           |  | Delayed Draw |  |           | 1.00 | % |                     |   | 4,469  |           |  |   | (138 | )
|The Hilb Group, LLC                                                        |  | Delayed Draw |  |           | 1.00 | % |                     |   | 10,034 |           |  |   | 29   |  
|Vetcor Professional Practices, LLC                                         |  | Delayed Draw |  |           | 1.00 | % |                     |   | 1,473  |           |  |   | (6   | )
|                                                                           |  |              |  |           |      |   |                     |   |        |           |  |   |      |  
|Total unfunded commitments                                                 |  |              |  |           |      |   |                     | $ | 24,601 |           |  | $ | (270 | )
|                                                                           |  |              |  |           |      |   |                     |   |        |           |  |   |      |  

|(15) | As of December 31, 2015, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.43%.
|---- | ---------------------------------------------------------------------------------------



106



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2015

(dollar amounts in thousands)

As of December 31, 2015, investments at fair value consisted of the following:



|                                                   |  |               |           |  |            |   |           |                |  |  |        |  
|-------------------------------------------------- |  | ------------- | --------- |  | ---------- | - | --------- | -------------- |  |  | ------ | -
|Type% of Fair Value                               |  | AmortizedCost |           |  | Fair Value |   |           | % of FairValue | 
|First Lien Debt                                    |  | $             | 800,857   |  |            | $ | 795,034   |                |  |  | 75.53  | %
|Second Lien Debt                                   |  |               | 216,708   |  |            |   | 210,396   |                |  |  | 19.98  |  
|Structured Finance Obligations                     |  |               | 59,940    |  |            |   | 44,812    |                |  |  | 4.26   |  
|Equity Investments                                 |  |               | 2,215     |  |            |   | 2,424     |                |  |  | 0.23   |  
|                                                   |  |               |           |  |            |   |           |                |  |  |        |  
|Total                                              |  | $             | 1,079,720 |  |            | $ | 1,052,666 |                |  |  | 100.00 | %
|                                                   |  |               |           |  |            |   |           |                |  |  |        |  
|                                                   |  |               |          
|Type% of Fair Value of First and Second Lien Debt |  | AmortizedCost |           |  | Fair Value |   |           | % of FairValue | 
|Floating Rate                                      |  | $             | 992,114   |  |            | $ | 979,700   |                |  |  | 97.44  | %
|Fixed Rate                                         |  |               | 25,451    |  |            |   | 25,730    |                |  |  | 2.56   |  
|                                                   |  |               |           |  |            |   |           |                |  |  |        |  
|Total                                              |  | $             | 1,017,565 |  |            | $ | 1,005,430 |                |  |  | 100.00 | %
|                                                   |  |               |           |  |            |   |           |                |  |  |        |  

The industrial composition of investments at fair value as of December 31, 2015 was as follows:



|                                          |  |               |           |  |            |   |           |                |  |  |        |  
|----------------------------------------- |  | ------------- | --------- |  | ---------- | - | --------- | -------------- |  |  | ------ | -
|Industry                                  |  | AmortizedCost |           |  | Fair Value |   |           | % of FairValue | 
|Aerospace & Defense                       |  | $             | 64,603    |  |            | $ | 63,393    |                |  |  | 6.02   | %
|Automotive                                |  |               | 52,908    |  |            |   | 52,809    |                |  |  | 5.02   |  
|Banking, Finance, Insurance & Real Estate |  |               | 138,700   |  |            |   | 139,353   |                |  |  | 13.24  |  
|Business Services                         |  |               | 131,981   |  |            |   | 130,318   |                |  |  | 12.38  |  
|Capital Equipment                         |  |               | 18,335    |  |            |   | 17,993    |                |  |  | 1.71   |  
|Chemicals, Plastics & Rubber              |  |               | 27,300    |  |            |   | 25,902    |                |  |  | 2.46   |  
|Construction & Building                   |  |               | 19,947    |  |            |   | 19,958    |                |  |  | 1.90   |  
|Consumer Services                         |  |               | 51,783    |  |            |   | 50,764    |                |  |  | 4.82   |  
|Containers, Packaging & Glass             |  |               | 55,846    |  |            |   | 55,128    |                |  |  | 5.24   |  
|Durable Consumer Goods                    |  |               | 20,648    |  |            |   | 20,482    |                |  |  | 1.94   |  
|Energy: Electricity                       |  |               | 36,630    |  |            |   | 36,907    |                |  |  | 3.51   |  
|Energy: Oil & Gas                         |  |               | 11,715    |  |            |   | 11,327    |                |  |  | 1.08   |  
|Environmental Industries                  |  |               | 11,782    |  |            |   | 11,622    |                |  |  | 1.10   |  
|Healthcare & Pharmaceuticals              |  |               | 65,037    |  |            |   | 64,140    |                |  |  | 6.09   |  
|High Tech Industries                      |  |               | 50,244    |  |            |   | 49,782    |                |  |  | 4.73   |  
|Hotel, Gaming & Leisure                   |  |               | 32,101    |  |            |   | 31,314    |                |  |  | 2.97   |  
|Media: Advertising, Printing & Publishing |  |               | 20,827    |  |            |   | 20,623    |                |  |  | 1.96   |  
|Metals & Mining                           |  |               | 10,329    |  |            |   | 10,168    |                |  |  | 0.97   |  
|Non-durable Consumer Goods                |  |               | 41,220    |  |            |   | 40,581    |                |  |  | 3.85   |  
|Retail                                    |  |               | 24,333    |  |            |   | 24,123    |                |  |  | 2.29   |  
|Software                                  |  |               | 14,573    |  |            |   | 14,003    |                |  |  | 1.33   |  
|Structured Finance                        |  |               | 59,940    |  |            |   | 44,812    |                |  |  | 4.26   |  
|Telecommunications                        |  |               | 70,565    |  |            |   | 70,736    |                |  |  | 6.72   |  
|Transportation: Cargo                     |  |               | 19,582    |  |            |   | 19,134    |                |  |  | 1.82   |  
|Transportation: Consumer                  |  |               | 9,110     |  |            |   | 9,361     |                |  |  | 0.89   |  
|Utilities: Electric                       |  |               | 5,892     |  |            |   | 5,704     |                |  |  | 0.54   |  
|Wholesale                                 |  |               | 13,789    |  |            |   | 12,229    |                |  |  | 1.16   |  
|                                          |  |               |           |  |            |   |           |                |  |  |        |  
|Total                                     |  | $             | 1,079,720 |  |            | $ | 1,052,666 |                |  |  | 100.00 | %
|                                          |  |               |           |  |            |   |           |                |  |  |        |  



107



---

##### Table of Contents

TCG BDC, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of
December 31, 2015

(dollar amounts in thousands)

The geographical composition of investments at fair value as of December 31, 2015 was as follows:



|               |  |               |           |  |            |   |           |                |  |  |        |  
|-------------- |  | ------------- | --------- |  | ---------- | - | --------- | -------------- |  |  | ------ | -
|Geography      |  | AmortizedCost |           |  | Fair Value |   |           | % of FairValue | 
|Cayman Islands |  | $             | 59,940    |  |            | $ | 44,812    |                |  |  | 4.26   | %
|Ireland        |  |               | 9,814     |  |            |   | 9,740     |                |  |  | 0.93   |  
|United Kingdom |  |               | 22,891    |  |            |   | 22,568    |                |  |  | 2.14   |  
|United States  |  |               | 987,075   |  |            |   | 975,546   |                |  |  | 92.67  |  
|               |  |               |           |  |            |   |           |                |  |  |        |  
|Total          |  | $             | 1,079,720 |  |            | $ | 1,052,666 |                |  |  | 100.00 | %
|               |  |               |           |  |            |   |           |                |  |  |        |  







The accompanying notes are an integral part of these consolidated financial statements.



108



---

##### Table of Contents

TCG BDC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2016

(dollar amounts in
thousands, except per share data)

1. ORGANIZATION

TCG BDC, Inc. (together with its consolidated subsidiaries, we, us, our, TCG BDC or the
Company) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company.
The Company is managed by its investment adviser, Carlyle GMS Investment Management L.L.C. (CGMSIM or Investment Adviser), a wholly owned subsidiary of The Carlyle Group L.P. The Company has elected to be regulated as a
business development company (BDC) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the Investment Company Act). In addition, the Company has elected to be
treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations
promulgated thereunder, the Code).

The Companys investment objective is to generate current income and capital
appreciation primarily through debt investments in U.S. middle market companies, which the Company defines as companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization
(EBITDA), which the Company believes is a useful proxy for cash flow. The Company seeks to achieve its investment objective primarily through direct originations of secured debt, including first lien senior secured loans (which may
include stand-alone first lien loans, first lien/last out loans and unitranche loans) and second lien senior secured loans (collectively, Middle Market Senior Loans), with the balance of our assets invested in higher yielding
investments (which may include unsecured debt, mezzanine debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms.
Depending on market conditions, the Company expects that between 70% and 80% of the value of its assets will be invested in Middle Market Senior Loans. The Company expects that the composition of its portfolio will change over time given the
Investment Advisers view on, among other things, the economic and credit environment (including with respect to interest rates) in which the Company is operating.

On May 2, 2013, the Company completed its initial closing of capital commitments (the Initial Closing) and subsequently
commenced substantial investment operations. If the Company has not consummated an initial public offering of its common stock that results in an unaffiliated public float of at least 15% of the aggregate capital commitments received prior to the
date of such initial public offering (a Qualified IPO) by May 2, 2018, then the Board of Directors of the Company (subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) will use
its best efforts to wind down and/or liquidate and dissolve.

The Company is an emerging growth company as defined in the
Jumpstart Our Business Startups Act of 2012. The Company will remain an emerging growth company for up to five years following an initial public offering, although if the market value of the common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, the Company would cease to be an emerging growth company as of the following December 31.

The Company is externally managed by the Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as
amended. Carlyle GMS Finance Administration L.L.C. (the Administrator) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle
Investment Management L.L.C., a subsidiary of The Carlyle Group L.P. Carlyle refers to The Carlyle Group L.P. and its affiliates and its



109



---

##### Table of Contents

consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global alternative asset manager publicly traded on NASDAQ Global Select Market under the symbol
CG. Refer to the sec.gov website for further information on Carlyle.

Effective March 15, 2017, the Company changed its
name from Carlyle GMS Finance, Inc. to TCG BDC, Inc.

TCG BDC SPV LLC (the SPV) is a Delaware limited
liability company that was formed on January 3, 2013. The SPV invests in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing
from the date of its formation, January 3, 2013. Effective March 15, 2017, the SPV changed its name from Carlyle GMS Finance SPV LLC to TCG BDC SPV LLC.

On June 26, 2015, the Company completed a $400 million term debt securitization (the
2015-1 Debt Securitization). The notes offered in the 2015-1 Debt Securitization (the 2015-1 Notes) were
issued by Carlyle GMS Finance MM CLO 2015-1 LLC (the 2015-1 Issuer), a wholly owned and consolidated subsidiary of the Company, and are secured by a
diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. Refer to Note 7 for details. The 2015-1 Issuer is
consolidated in these consolidated financial statements commencing from the date of its formation, May 8, 2015.

On February 29,
2016, the Company and Credit Partners USA LLC (Credit Partners) entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 (as amended, the Limited Liability
Company Agreement) to co-manage Middle Market Credit Fund, LLC (Credit Fund). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund,
from time to time, capital of up to $400,000 each. Refer to Note 5, Middle Market Credit Fund, LLC, for details.

As a BDC, the Company is
required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than qualifying assets specified in the Investment Company Act unless, at the time the acquisition is
made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).

To qualify as a RIC, the Company must,
among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its
investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company
satisfies those requirements.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The
consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (US GAAP). The Company is an investment company for the purposes of
accounting and financial reporting in accordance with Accounting Standards Update (ASU) 2013-08, Financial ServicesInvestment Companies (ASU
2013-08): Amendments to the Scope, Measurement and Disclosure Requirements. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPV and
the 2015-1 Issuer. All significant intercompany balances and transactions have been eliminated. US GAAP for an investment company requires investments to be recorded at fair value. The carrying value for
all other assets and liabilities approximates their fair value.



110



---

##### Table of Contents

The annual financial statements have been prepared in accordance with US GAAP for annual
financial information and pursuant to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. In the opinion of management, all adjustments
considered necessary for the fair presentation of consolidated financial statements for the years presented have been included.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make assumptions and
estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Managements estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the
process of applying the Companys accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and
these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.

Investments

Investment
transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without
regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying
Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3 for further
information about fair value measurements.

Cash and cash equivalents

Cash and cash equivalents consist of demand deposits and highly liquid investments (e.g. money market funds, U.S. treasury notes) with original
maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Companys cash and cash equivalents are held with two large financial institutions and cash held in such financial
institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit.

Revenue Recognition

Interest from Investments and Realized Gain/Loss on Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and
premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost,
including origination fees, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received
at exit using the specific identification method.

The Company may have loans in its portfolio that contain
payment-in-kind (PIK) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan
principal on the respective capitalization dates, and is generally due at maturity. As of December 31, 2016 and 2015 and for the years then ended, no loans in the portfolio contained PIK provisions.



111



---

##### Table of Contents

Interest income from investments in the equity class of collateralized loan
obligation (CLO) funds, which are included in structured finance obligations, is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with Accounting
Standards Codification (ASC) 325-40, Beneficial Interests in Securitized Financials Assets. The Company monitors the expected cash inflows from its CLO equity investments, including the
expected residual payments and the effective yield is determined and updated at least quarterly. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal
payments which are impacted by prepayments, repurchases, defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted the Companys
estimates if the information was known at the time. As a result, actual results may differ significantly from these estimates.

Other Income

Other income may include income such as consent, waiver, amendment, syndication and prepayment fees associated with the Companys
investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for
guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the accompanying Consolidated Statements of Assets and
Liabilities. For the years ended December 31, 2016, 2015 and 2014, the Company earned $6,635, $834 and $244, respectively, in other income, primarily from syndication and prepayment fees.

Non-Accrual Income

Loans are generally placed on non-accrual status when principal or interest payments are past due 30
days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest
payments received on non-accrual loans may be recognized as income or applied to principal depending upon managements judgment regarding collectability.
Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in managements judgment, are likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2016, fair value of the loan on non-accrual status
was $7,628, which represents approximately 0.5% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2016 and for the year then ended.
As of December 31, 2015, no loans in the portfolio were on non-accrual status.

SPV Credit Facility,
Credit Facility and 2015-1 Notes Related Costs, Expenses and Deferred Financing Costs (See Note 6, Borrowings, and Note 7, 2015-1 Notes)

Interest expense and unused commitment fees on the SPV Credit Facility and Credit Facility are recorded on an accrual basis. Unused commitment
fees are included in credit facility fees in the accompanying Consolidated Statements of Operations.

The SPV Credit Facility and Credit
Facility are recorded at carrying value, which approximates fair value.

Deferred financing costs include capitalized expenses related to
the closing or amendments of the SPV Credit Facility and Credit Facility. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility, except for a portion
that was accelerated in connection with the amendment of the SPV Credit Facility as described in Note 6. The unamortized balance of such costs is included in deferred financing costs in the accompanying Consolidated Statements of Assets and
Liabilities. The amortization of such costs is included in credit facility fees in the accompanying Consolidated Statements of Operations.



112



---

##### Table of Contents

Debt issuance costs include capitalized expenses including structuring and arrangement fees
related to the offering of the 2015-1 Notes. Amortization of debt issuance costs for the 2015-1 Notes is computed on the effective yield method over the term of the 2015-1 Notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the 2015-1 Notes in the accompanying Consolidated Statements
of Assets and Liabilities. The amortization of such costs is included in interest expense in the accompanying Consolidated Statements of Operations.

The 2015-1 Notes are recorded at carrying value, which approximates fair value.

Organization and Offering Costs

The Company agreed to reimburse the Investment Adviser for initial organization and offering costs incurred on behalf of the Company up to
$1,500. As of December 31, 2016 and 2015, $1,500 of organization and offering costs had been incurred by the Company and $57 of excess organization and offering costs had been incurred by the Investment Adviser since inception. The $1,500 of
incurred organization and offering costs are allocated to all stockholders based on their respective capital commitment and are re-allocated amongst all stockholders at the time of each capital drawdown
subsequent to the Initial Closing. The Companys organization costs incurred are expensed and the offering costs are charged against equity when incurred.

Income Taxes

For federal income
tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its
taxable income and gains it does not distribute.

The minimum distribution requirements applicable to RICs require the Company to
distribute to its stockholders at least 90% of its investment company taxable income (ICTI), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess
of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on
undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for
the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net
income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to
determine whether the tax positions are more-likely than not to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.

The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the
tax return of the Company.



113



---

##### Table of Contents

Capital Calls and Dividends and Distributions to Common Stockholders

The Company records the shares issued in connection with capital calls as of the effective date of the capital call. To the extent that the
Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by
the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to
retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan that provides for reinvestment of any
distributions on behalf of its stockholders, for those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and the Company declares a cash dividend or distribution, the stockholders
who have elected to participate in the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Companys common stock, rather than receiving cash. Prior to a Qualified
IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a Qualified IPO, the Company intends to use
primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the
market value per share is less than the net asset value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company
instructs the plan administrator otherwise.

Functional Currency

The functional currency of the Company is the U.S. Dollar and all transactions were in U.S. Dollars.

Recent Accounting Standards Updates

On April 7, 2015, the Financial Accounting Standards Board issued ASU 2015-3,
InterestImputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs (ASU 2015-3). ASU 2015-3 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts
and premiums. This guidance was effective for the Company on January 1, 2016 and the ASU requires the guidance to be applied on a retrospective basis. The Company adopted this guidance on January 1, 2016 and reclassified $2,356 of debt
issuance costs from deferred financing costs to 2015-1 Notes payable in the accompanying Consolidated Statement of Assets and Liabilities as of December 31, 2015.

In May 2015, the Financial Accounting Standards Board issued ASU 2015-7, Fair Value Measurement
(Topic 820)Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)(ASU 2015-7). ASU 2015-7
provides amended guidance on the disclosures for investments in certain entities that calculate net asset value per share (or its equivalent). The amendments remove the requirement to categorize within the fair value hierarchy all investments for
which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value
per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The guidance is effective for the Company on January 1, 2016. The
Company adopted the new accounting guidance on January 1, 2016 and presented the fair value disclosures accordingly.



114



---

##### Table of Contents

In August 2015, the Financial Accounting Standards Board issued ASU 2015-15, InterestImputation of Interest (Sub-topic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs
Associated with Line-of-Credit Arrangements (ASU 2015-15). ASU 2015-03
does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. In accordance with ASU 2015-15, an entity may defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This
guidance was effective for the Company on January 1, 2016. The Company adopted the new accounting guidance and it did not have a material impact on the Companys consolidated financial statements.

3. FAIR VALUE MEASUREMENTS

The Company
applies fair value accounting in accordance with the terms of Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 820, Fair Value Measurement(ASC 820). ASC 820 defines fair value as the
amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by
multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded
in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., consensus pricing). When doing so, the Company determines whether the quote obtained
is sufficient according to US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid
securities/instruments.

Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or
methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Companys Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques
appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash
flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or
investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to
determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management;
(iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each
non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of managements preliminary valuation and
conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the Audit Committee) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any
recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the
portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

All factors
that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:



| |  |  | the nature and realizable value of any collateral;
| | - |  | --------------------------------------------------



| |  |  | call features, put features and other relevant terms of debt;
| | - |  | -------------------------------------------------------------



115



---

##### Table of Contents

| |  |  | the portfolio companys leverage and ability to make payments;
| | - |  | --------------------------------------------------------------



| |  |  | the portfolio companys public or private credit rating;
| | - |  | --------------------------------------------------------



| |  |  | the portfolio companys actual and expected earnings and discounted cash flow;
| | - |  | ------------------------------------------------------------------------------



| |  |  | prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the markets in which the portfolio company does business and recent economic and/or market events; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | comparisons to comparable transactions and publicly traded securities.
| | - |  | ----------------------------------------------------------------------

Investment performance
data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value
of the Companys investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the
investments existed, and it is reasonably possible that the difference could be material.

In addition, changes in the market environment
and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial
statements as of December 31, 2016, 2015 and 2014.

US GAAP establishes a hierarchical disclosure framework which ranks the
level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state
of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a
higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

Investments measured and
reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:



| |  |  | Level 1inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments in Level 1 generally include
unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact
the quoted price.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 2inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this
category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain
over-the-counter derivatives where the fair value is based on observable inputs.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation.
Financial instruments that are in this category generally include investments in privately-held entities, CLOs, and certain over-the-counter derivatives where the fair
value is based on unobservable inputs.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



116



---

##### Table of Contents

In certain cases, the inputs used to measure fair value may fall into different levels of the
fair value hierarchy. In such cases, an investments level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Advisers assessment of the
significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Transfers between levels, if any, are recognized at the beginning of the year in which the transfers occur. For the years ended
December 31, 2016 and 2015, there were no transfers between levels.

The following tables summarize the Companys investments
measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2016 and 2015:



|                                            |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|------------------------------------------- |  | ----------------- | - |  | ------- | - | ----- | ------- |  | - | --------- |  |  | - | --------- | 
|                                            |  | December 31, 2016 |  
|                                            |  | Level 1           |   |  | Level 2 |   |       | Level 3 |  |   | Total     | 
|Assets                                      |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|First Lien Debt                             |  | $                 |  |  |         | $ |      |         |  | $ | 1,139,548 |  |  | $ | 1,139,548 | 
|Second Lien Debt                            |  |                   |  |  |         |   |      |         |  |   | 171,864   |  |  |   | 171,864   | 
|Structured Finance Obligations              |  |                   |  |  |         |   |      |         |  |   | 5,216     |  |  |   | 5,216     | 
|Equity Investments                          |  |                   |  |  |         |   |      |         |  |   | 6,474     |  |  |   | 6,474     | 
|Investment Fund                             |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|Mezzanine Loan                              |  |                   |  |  |         |   |      |         |  |   | 62,384    |  |  |   | 62,384    | 
|                                            |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|Subtotal                                    |  | $                 |  |  |         | $ |      |         |  | $ | 1,385,486 |  |  | $ | 1,385,486 | 
|                                            |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|Investments measured at net asset value
(1) |  |                   |   |  |         |   |       |         |  |   |           |  |  | $ | 37,273    | 
|                                            |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|Total                                       |  |                   |   |  |         |   |       |         |  | $ | 1,422,759 | 
|                                            |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|                                            | 
|                                            |  | December 31, 2015 |  
|                                            |  | Level 1           |   |  | Level 2 |   |       | Level 3 |  |   | Total     | 
|Assets                                      |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|First Lien Debt                             |  | $                 |  |  |         | $ | 9,575 |         |  | $ | 785,459   |  |  | $ | 795,034   | 
|Second Lien Debt                            |  |                   |  |  |         |   |      |         |  |   | 210,396   |  |  |   | 210,396   | 
|Structured Finance Obligations              |  |                   |  |  |         |   |      |         |  |   | 44,812    |  |  |   | 44,812    | 
|Equity Investments                          |  |                   |  |  |         |   |      |         |  |   | 2,424     |  |  |   | 2,424     | 
|                                            |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 
|Total                                       |  | $                 |  |  |         | $ | 9,575 |         |  | $ | 1,043,091 |  |  | $ | 1,052,666 | 
|                                            |  |                   |   |  |         |   |       |         |  |   |           |  |  |   |           | 



|(1) | Amount represents the Companys subordinated loan and members interest investments in Credit Fund. The fair value of these investments has been estimated using the net asset value of the Companys
ownership interests in Credit Fund.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



117



---

##### Table of Contents

The changes in the Companys investments at fair value for which the Company has used
Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:



|                                                                                                                                                                                                                                                                                               |  |                                                      |           |   |                 |   |         |                              |  |   |                   |   |  |                               |       |  |       |   |         |   |  |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- | --------- | - | --------------- | - | ------- | ---------------------------- |  | - | ----------------- | - |  | ----------------------------- | ----- |  | ----- | - | ------- | - |  | - | --------- | -
|                                                                                                                                                                                                                                                                                               |  | Financial AssetsFor the year ended December 31, 2016 |          
|                                                                                                                                                                                                                                                                                               |  | First LienDebt                                       |           |   | SecondLien Debt |   |         | StructuredFinanceObligations |  |   | EquityInvestments |   |  | InvestmentFund -MezzanineLoan |       |  | Total |  
|Balance, beginning of year                                                                                                                                                                                                                                                                     |  | $                                                    | 785,459   |   |                 | $ | 210,396 |                              |  | $ | 44,812            |   |  | $                             | 2,424 |  |       | $ |        |   |  | $ | 1,043,091 |  
|Purchases                                                                                                                                                                                                                                                                                      |  |                                                      | 594,633   |   |                 |   | 38,380  |                              |  |   |                  |   |  |                               | 2,857 |  |       |   | 84,784  |   |  |   | 720,654   |  
|Sales                                                                                                                                                                                                                                                                                          |  |                                                      | (77,434   | ) |                 |   | (25,398 | )                            |  |   | (33,327           | ) |  |                               |      |  |       |   |        |   |  |   | (136,159  | )
|Paydowns                                                                                                                                                                                                                                                                                       |  |                                                      | (167,699  | ) |                 |   | (57,855 | )                            |  |   | (7,041            | ) |  |                               |      |  |       |   | (22,400 | ) |  |   | (254,995  | )
|Accretion of discount                                                                                                                                                                                                                                                                          |  |                                                      | 4,757     |   |                 |   | 850     |                              |  |   | (31               | ) |  |                               |      |  |       |   |        |   |  |   | 5,576     |  
|Net realized gains (losses)                                                                                                                                                                                                                                                                    |  |                                                      | (40       | ) |                 |   | 275     |                              |  |   | (10,302           | ) |  |                               |      |  |       |   |        |   |  |   | (10,067   | )
|Net change in unrealized appreciation (depreciation)                                                                                                                                                                                                                                           |  |                                                      | (128      | ) |                 |   | 5,216   |                              |  |   | 11,105            |   |  |                               | 1,193 |  |       |   |        |   |  |   | 17,386    |  
|                                                                                                                                                                                                                                                                                               |  |                                                      |           |   |                 |   |         |                              |  |   |                   |   |  |                               |       |  |       |   |         |   |  |   |           |  
|Balance, end of year                                                                                                                                                                                                                                                                           |  | $                                                    | 1,139,548 |   |                 | $ | 171,864 |                              |  | $ | 5,216             |   |  | $                             | 6,474 |  |       | $ | 62,384  |   |  | $ | 1,385,486 |  
|                                                                                                                                                                                                                                                                                               |  |                                                      |           |   |                 |   |         |                              |  |   |                   |   |  |                               |       |  |       |   |         |   |  |   |           |  
|Net change in unrealized appreciation (depreciation) included in earnings related to investments
still held as of December 31, 2016 included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated
Statements of Operations |  | $                                                    | (1,000    | ) |                 | $ | 3,331   |                              |  | $ | 1,372             |   |  | $                             | 1,193 |  |       |   |        |   |  | $ | 4,896     |  
|                                                                                                                                                                                                                                                                                               |  |                                                      |           |   |                 |   |         |                              |  |   |                   |   |  |                               |       |  |       |   |         |   |  |   |           |  



|                                                                                                                                                                                                                                                                                               |  |                                                      |          |   |                 |   |         |                              |  |   |                   |   |  |       |       |  |  |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- | -------- | - | --------------- | - | ------- | ---------------------------- |  | - | ----------------- | - |  | ----- | ----- |  |  | - | --------- | -
|                                                                                                                                                                                                                                                                                               |  | Financial AssetsFor the year ended December 31, 2015 |         
|                                                                                                                                                                                                                                                                                               |  | First LienDebt                                       |          |   | SecondLien Debt |   |         | StructuredFinanceObligations |  |   | EquityInvestments |   |  | Total |      
|Balance, beginning of year                                                                                                                                                                                                                                                                     |  | $                                                    | 505,212  |   |                 | $ | 107,874 |                              |  | $ | 76,001            |   |  | $     |      |  |  | $ | 689,087   |  
|Purchases                                                                                                                                                                                                                                                                                      |  |                                                      | 472,342  |   |                 |   | 113,195 |                              |  |   | 10,059            |   |  |       | 2,215 |  |  |   | 597,811   |  
|Sales                                                                                                                                                                                                                                                                                          |  |                                                      | (17,454  | ) |                 |   |        |                              |  |   | (19,930           | ) |  |       |      |  |  |   | (37,384   | )
|Paydowns                                                                                                                                                                                                                                                                                       |  |                                                      | (174,427 | ) |                 |   | (8,025  | )                            |  |   | (10,155           | ) |  |       |      |  |  |   | (192,607  | )
|Accretion of discount                                                                                                                                                                                                                                                                          |  |                                                      | 2,677    |   |                 |   | 277     |                              |  |   | 20                |   |  |       |      |  |  |   | 2,974     |  
|Net realized gains (losses)                                                                                                                                                                                                                                                                    |  |                                                      | 208      |   |                 |   |        |                              |  |   | 956               |   |  |       |      |  |  |   | 1,164     |  
|Net change in unrealized appreciation (depreciation)                                                                                                                                                                                                                                           |  |                                                      | (3,099   | ) |                 |   | (2,925  | )                            |  |   | (12,139           | ) |  |       | 209   |  |  |   | (17,954   | )
|                                                                                                                                                                                                                                                                                               |  |                                                      |          |   |                 |   |         |                              |  |   |                   |   |  |       |       |  |  |   |           |  
|Balance, end of year                                                                                                                                                                                                                                                                           |  | $                                                    | 785,459  |   |                 | $ | 210,396 |                              |  | $ | 44,812            |   |  | $     | 2,424 |  |  | $ | 1,043,091 |  
|                                                                                                                                                                                                                                                                                               |  |                                                      |          |   |                 |   |         |                              |  |   |                   |   |  |       |       |  |  |   |           |  
|Net change in unrealized appreciation (depreciation) included in earnings related to investments
still held as of December 31, 2015 included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated
Statements of Operations |  | $                                                    | (4,423   | ) |                 | $ | (2,838  | )                            |  | $ | (12,219           | ) |  | $     | 209   |  |  | $ | (19,271   | )
|                                                                                                                                                                                                                                                                                               |  |                                                      |          |   |                 |   |         |                              |  |   |                   |   |  |       |       |  |  |   |           |  



118



---

##### Table of Contents

The Company generally uses the following framework when determining the fair value of investments
that are categorized as Level 3:

Investments in debt securities are initially evaluated to determine whether the enterprise value of
the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded
comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These
factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow
analysis of the portfolio company.

Investments in debt securities that do not have sufficient coverage through the enterprise value
analysis are valued based on an expected probability of default and discount recovery analysis.

Investments in debt securities with
sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant securitys
contractual interest, fees and principal payments plus the assumption of full principal recovery at the securitys expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies.
Investments in debt securities may also be valued using consensus pricing.

Investments in structured finance obligations are generally
valued using a discounted cash flow and/or consensus pricing.

Investments in equities are generally valued using a market approach and/or
an income approach. The market approach utilizes EBITDA multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the
portfolio company.

Investments in the subordinated loan and members interest of the investment fund are valued using the net asset
value of the Companys ownership interest in the investment fund and investments in the mezzanine loan of the investment fund are valued using discounted cash flow analysis with expected repayment rate of principal and interest.

The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which
are carried at fair value as of December 31, 2016 and 2015:



|                                |  |                                  |           |  |                      |                      |                               |                    |       |  |       |                 |  |  |        |   |  |  |       |  
|------------------------------- |  | -------------------------------- | --------- |  | -------------------- | -------------------- | ----------------------------- | ------------------ | ----- |  | ----- | --------------- |  |  | ------ | - |  |  | ----- | -
|                                |  | Fair Value asof December 31,2016 |           |  | Valuation Techniques |                      | SignificantUnobservableInputs |                    | Range |  |       | WeightedAverage | 
|                                |  |                                  |           |  | Low                  |                      |                               | High               |       | 
|Investments in First Lien Debt  |  | $                                | 986,695   |  |                      | Discounted Cash Flow |                               | Discount Rate      |       |  | 4.50  | %               |  |  | 16.33  | % |  |  | 7.94  | %
|                                |  |                                  | 152,853   |  |                      | Consensus Pricing    |                               | Indicative Quotes  |       |  | 40.75 |                 |  |  | 106.36 |   |  |  | 97.29 |  
|                                |  |                                  |           |  |                      |                      |                               |                    |       |  |       |                 |  |  |        |   |  |  |       |  
|Total First Lien Debt           |  |                                  | 1,139,548 |  |                      |                      |                               |                    |       |  |       |                 |  |  |        |   |  |  |       |  
|                                |  |                                  |           |  |                      |                      |                               |                    |       |  |       |                 |  |  |        |   |  |  |       |  
|Investments in Second Lien Debt |  |                                  | 153,657   |  |                      | Discounted Cash Flow |                               | Discount Rate      |       |  | 7.93  | %               |  |  | 11.05  | % |  |  | 9.75  | %
|                                |  |                                  | 16,525    |  |                      | Consensus Pricing    |                               | Indicative Quotes  |       |  | 83.17 |                 |  |  | 100.88 |   |  |  | 94.48 |  
|                                |  |                                  | 1,682     |  |                      | Income Approach      |                               | Discount Rate      |       |  | 15.32 | %               |  |  | 15.32  | % |  |  | 15.32 | %
|                                |  |                                  |           |  |                      | Market Approach      |                               | ComparableMultiple |       |  | 8.01x |                 |  |  | 8.68x  |   |  |  | 8.34x |  
|                                |  |                                  |           |  |                      |                      |                               |                    |       |  |       |                 |  |  |        |   |  |  |       |  
|Total Second Lien Debt          |  |                                  | 171,864   |  |                      |                      |                               |                    |       |  |       |                 |  |  |        |   |  |  |       |  
|                                |  |                                  |           |  |                      |                      |                               |                    |       |  |       |                 |  |  |        |   |  |  |       |  



119



---

##### Table of Contents

|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|----------------------------------------------- |  | -------------------------------- | --------- |  | -------------------- |  | -------------------- | ----------------------------- |  |  | ------------------ |  |  | --------------- | ------ | - |  |  | ------ | - |  |  | ------ | -
|                                                |  | Fair Value asof December 31,2016 |           |  | Valuation Techniques |  |                      | SignificantUnobservableInputs |  |  | Range              |  |  | WeightedAverage |       
|                                                |  |                                  |           |  | Low                  |  |                      | High                          |  | 
|Investments in Structured Finance Obligations   |  |                                  | 2,761     |  |                      |  | Discounted Cash Flow |                               |  |  | Discount Rate      |  |  |                 | 22.00  | % |  |  | 22.00  | % |  |  | 22.00  | %
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  | Default Rate       |  |  |                 | 1.13   |   |  |  | 1.13   |   |  |  | 1.13   |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  | Prepayment Rate    |  |  |                 | 35.00  |   |  |  | 35.00  |   |  |  | 35.00  |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  | Recovery Rate      |  |  |                 | 65.00  |   |  |  | 65.00  |   |  |  | 65.00  |  
|                                                |  |                                  | 2,455     |  |                      |  | Consensus Pricing    |                               |  |  | Indicative Quotes  |  |  |                 | 0.10   |   |  |  | 48.79  |   |  |  | 48.50  |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total Structured Finance Obligations            |  |                                  | 5,216     |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Investments in Equity                           |  |                                  | 6,474     |  |                      |  | Income Approach      |                               |  |  | Discount Rate      |  |  |                 | 8.68   | % |  |  | 10.40  | % |  |  | 9.41   | %
|                                                |  |                                  |           |  |                      |  | Market Approach      |                               |  |  | ComparableMultiple |  |  |                 | 7.22x  |   |  |  | 13.71x |   |  |  | 11.00x |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total Equity Investments                        |  |                                  | 6,474     |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Investments in Investment Fund  Mezzanine Loan |  |                                  | 62,384    |  |                      |  | Income Approach      |                               |  |  | Repayment Rate     |  |  |                 | 100.00 | % |  |  | 100.00 | % |  |  | 100.00 | %
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total Investment Fund  Mezzanine Loan          |  |                                  | 62,384    |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total Level 3 Investments                       |  | $                                | 1,385,486 |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                     
|                                                |  | Fair Value asof December 31,2015 |           |  | Valuation Techniques |  |                      | SignificantUnobservableInputs |  |  | Range              |  |  | WeightedAverage |       
|                                                |  |                                  |           |  | Low                  |  |                      | High                          |  | 
|Investments in First Lien Debt                  |  | $                                | 618,172   |  |                      |  | Discounted Cash Flow |                               |  |  | Discount Rate      |  |  |                 | 5.57   | % |  |  | 13.37  | % |  |  | 8.19   | %
|                                                |  |                                  | 167,287   |  |                      |  | Consensus Pricing    |                               |  |  | Indicative Quotes  |  |  |                 | 96.50  |   |  |  | 99.38  |   |  |  | 97.97  |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total First Lien Debt                           |  |                                  | 785,459   |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Investments in Second Lien Debt                 |  |                                  | 161,907   |  |                      |  | Discounted Cash Flow |                               |  |  | Discount Rate      |  |  |                 | 9.37   | % |  |  | 15.44  | % |  |  | 10.56  | %
|                                                |  |                                  | 48,489    |  |                      |  | Consensus Pricing    |                               |  |  | Indicative Quotes  |  |  |                 | 93.25  |   |  |  | 101.25 |   |  |  | 96.86  |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total Second Lien Debt                          |  |                                  | 210,396   |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Investments in Structured Finance Obligations   |  |                                  | 43,016    |  |                      |  | Discounted Cash Flow |                               |  |  | Discount Rate      |  |  |                 | 13.00  | % |  |  | 17.50  | % |  |  | 14.05  | %
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  | Default Rate       |  |  |                 | 0.19   |   |  |  | 1.56   |   |  |  | 1.09   |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  | Prepayment Rate    |  |  |                 | 18.16  |   |  |  | 40.00  |   |  |  | 22.09  |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  | Recovery Rate      |  |  |                 | 69.27  |   |  |  | 75.00  |   |  |  | 74.36  |  
|                                                |  |                                  | 1,796     |  |                      |  | Consensus Pricing    |                               |  |  | Indicative Quotes  |  |  |                 | 0.18   |   |  |  | 63.00  |   |  |  | 59.69  |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total Structured Finance Obligations            |  |                                  | 44,812    |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Investments in Equity                           |  |                                  | 2,424     |  |                      |  | Income Approach      |                               |  |  | Discount Rate      |  |  |                 | 10.19  | % |  |  | 10.90  | % |  |  | 10.42  | %
|                                                |  |                                  |           |  |                      |  | Market Approach      |                               |  |  | ComparableMultiple |  |  |                 | 9.94x  |   |  |  | 11.09x |   |  |  | 10.71x |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total Equity Investments                        |  |                                  | 2,424     |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|Total Level 3 Investments                       |  | $                                | 1,043,091 |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  
|                                                |  |                                  |           |  |                      |  |                      |                               |  |  |                    |  |  |                 |        |   |  |  |        |   |  |  |        |  



120



---

##### Table of Contents

The significant unobservable inputs used in the fair value measurement of the Companys
investments in first and second lien debt securities are discount rates and indicative quotes. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes in
isolation may result in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value
measurement of the Companys investments in structured finance obligations are discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases in discount rates, default rates or prepayment rates in
isolation would result in a significantly lower fair value measurement, while a significant increase in recovery rates in isolation would result in a significantly higher fair value. Significant decreases in indicative quotes in isolation may result
in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the
Companys investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples
would result in a significantly lower fair value measurement.

Financial instruments disclosed but not carried at fair value

The following table presents the carrying value and fair value of the Companys secured borrowings disclosed but not carried at fair value
as of December 31, 2016 and 2015:



|                   |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 
|------------------ |  | ----------------- | ------- |  | ----------------- | - | ------- | -------------- |  | - | ---------- |  |  | - | ------- | 
|                   |  | December 31, 2016 |         |  | December 31, 2015 |  
|                   |  | Carrying Value    |         |  | Fair Value        |   |         | Carrying Value |  |   | Fair Value | 
|Secured borrowings |  | $                 | 421,885 |  |                   | $ | 421,885 |                |  | $ | 234,313    |  |  | $ | 234,313 | 
|                   |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 
|Total              |  | $                 | 421,885 |  |                   | $ | 421,885 |                |  | $ | 234,313    |  |  | $ | 234,313 | 
|                   |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 

The carrying values of the secured borrowings approximate their respective fair values and are categorized as
Level 3 within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Companys secured borrowings are discount rates.
Significant increases in discount rates would result in a significantly lower fair value measurement.

The following table represents the
carrying values (before debt issuance costs) and fair values of the Companys 2015-1 Notes disclosed but not carried at fair value as of December 31, 2016 and 2015:



|                         |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 
|------------------------ |  | ----------------- | ------- |  | ----------------- | - | ------- | -------------- |  | - | ---------- |  |  | - | ------- | 
|                         |  | December 31, 2016 |         |  | December 31, 2015 |  
|                         |  | Carrying Value    |         |  | Fair Value        |   |         | Carrying Value |  |   | Fair Value | 
|Aaa/AAA Class A-1A Notes |  | $                 | 160,000 |  |                   | $ | 160,072 |                |  | $ | 160,000    |  |  | $ | 157,200 | 
|Aaa/AAA Class A-1B Notes |  |                   | 40,000  |  |                   |   | 39,960  |                |  |   | 40,000     |  |  |   | 39,700  | 
|Aaa/AAA Class A-1C Notes |  |                   | 27,000  |  |                   |   | 26,951  |                |  |   | 27,000     |  |  |   | 26,823  | 
|Aa2 Class A-2 Notes      |  |                   | 46,000  |  |                   |   | 45,784  |                |  |   | 46,000     |  |  |   | 45,122  | 
|                         |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 
|Total                    |  | $                 | 273,000 |  |                   | $ | 272,767 |                |  | $ | 273,000    |  |  | $ | 268,845 | 
|                         |  |                   |         |  |                   |   |         |                |  |   |            |  |  |   |         | 

The fair value determination of the Companys 2015-1 Notes was
based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value
measurement.

The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of
these items.



121



---

##### Table of Contents

4. RELATED PARTY TRANSACTIONS

Investment Advisory Agreement

On
April 3, 2013, the Companys Board of Directors, including a majority of the directors who are not interested persons as defined in Section 2(a)(19) of the Investment Company Act (the Independent Directors),
approved an investment advisory agreement (the Investment Advisory Agreement) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section
15(c) of the Investment Company Act. The initial term of the Investment Advisory Agreement is two years from April 3, 2013 and, unless terminated earlier, the Investment Advisory Agreement will renew automatically for successive annual periods,
provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On March 20, 2017, the Companys Board of Directors, including a
majority of the Independent Directors, approved the continuance of the Investment Advisory Agreement for a one year period. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either
party without penalty upon at least 60 days written notice to the other party. Subject to the overall supervision of the Board of Directors, the Investment Adviser provides investment advisory services to the Company. For providing these
services, the Investment Adviser receives fees from the Company consisting of two componentsa base management fee and an incentive fee.

Prior to a Qualified IPO, the base management fee is calculated and payable quarterly in arrears at an annual rate of 1.50% of the average
daily gross assets of the Company for the period adjusted for share issuances or repurchases, excluding any cash and cash equivalents and including assets acquired through the incurrence of debt from use of the SPV Credit Facility, Credit Facility
and 2015-1 Notes (see Note 6, Borrowings, and Note 7, 2015-1 Notes). For purposes of this calculation, cash and cash equivalents include any temporary investments in
cash-equivalents, U.S. government securities and other high quality investment grade debt investments that mature in 12 months or less from the date of investment. Base management fees for any partial quarter are prorated. The Investment Adviser
waived its right to receive one-third (0.50%) of the base management fee prior to a Qualified IPO. The fee waiver will terminate if and when a Qualified IPO has been consummated. Any waived base management
fees are not subject to recoupment by the Investment Adviser.

The incentive fee has two parts. The first part is calculated and payable
quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the
end of each calendar year.

Pre-incentive fee net investment income means interest income,
dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio
companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities
or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income does not include, in the case of investments with
a deferred interest feature (such as OID, debt instruments with pay-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in
cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Prior to any Qualified IPO of the Companys common stock, pre-incentive fee net investment
income, expressed as a rate of return on the average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, is compared to a hurdle rate of 1.50% per quarter (6% annualized).
Hurdle Calculation Value means, on any given day, the sum of (x) the value of net assets as of the end of the calendar quarter immediately preceding such day plus (y) the aggregate amount of capital drawn from investors (or
reinvested in the Company pursuant to a dividend reinvestment plan) from the beginning of the current



122



---

##### Table of Contents

quarter to such day minus (z) the aggregate amount of distributions (including share repurchases) made by the Company from the beginning of the current quarter to such day but only to the
extent such distributions were not declared and accounted for on the books and records in a previous quarter.

The Company pays its
Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:



| |  |  | no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment
income does not exceed the hurdle of 1.50%;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that
exceeds the hurdle but is less than 1.875% in any calendar quarter (7.50% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle but is less
than 1.875%) as the catch-up. The catch-up is meant to provide the Investment Adviser with approximately 20% of the Companys pre-incentive fee net investment income as if a hurdle did not apply if this net investment income exceeds 1.875% in any calendar quarter; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 20% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) will be payable to the Investment Adviser.
This reflects that once the hurdle is reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to the Investment
Adviser.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or
upon termination of the Investment Advisory Agreement, as of the termination date), and equals 20% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses
on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be
calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.

The Company will defer payment of any incentive fee otherwise earned by the Investment Adviser if, during the most recent four full calendar
quarter periods (or, if less, the number of full calendar quarters completed since the initial drawdown of capital from the stockholders, Initial Drawdown) ending on or prior to the date such payment is to be made, the sum of
(a) the aggregate distributions to stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 6.0% of net assets
(defined as gross assets less indebtedness) at the beginning of such period, provided, that such percentage will be appropriately prorated during the four full calendar quarters immediately following the Initial Drawdown. These calculations are
adjusted for any share issuances or repurchases. Any deferred incentive fees are carried over for payment in subsequent calculation periods. The Investment Adviser may earn an incentive fee under the Investment Advisory Agreement on the
Companys repurchase of debt issued by the Company at a gain.

For the years ended December 31, 2016, 2015 and 2014, base
management fees were $12,359, $8,907 and $4,373, respectively (net of waiver of $6,180, $4,454 and $2,186, respectively), incentive fees related to pre-incentive fee net investment income were $14,905, $8,881
and $3,578, respectively, and there were no incentive fees related to realized capital gains. For the years ended December 31, 2016, 2015 and 2014, there were no accrued capital gains incentive fees based upon the cumulative net realized and
unrealized appreciation (depreciation) as of December 31, 2016, 2015 and 2014, respectively. The accrual for any capital gains incentive fee under US GAAP in a given period may result in an additional expense if such cumulative amount is
greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.



123



---

##### Table of Contents

As of December 31, 2016 and 2015, $8,157 and $5,277, respectively, was included in base
management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

On April 3, 2013, the
Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (Carlyle Employee Co.), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with
access to investment professionals.

Administration Agreement

On April 3, 2013, the Companys Board of Directors approved an administration agreement (the Administration Agreement)
between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the
Companys allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Companys allocable portion of the compensation paid to or compensatory distributions
received by the Companys officers (including the Chief Compliance Officer and Chief Financial Officer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit
staff, to the extent internal audit performs a role in the Companys Sarbanes-Oxley Act internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.

The initial term of the Administration Agreement is two years from April 3, 2013 and, unless terminated earlier, the Administration
Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of
the Company and (ii) the vote of a majority of the Companys Independent Directors. On March 20, 2017, the Companys Board of Directors, including a majority of the Independent Directors, approved the continuance of the
Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days written notice to
the other party.

For the years ended December 31, 2016, 2015 and 2014, the Company incurred $703, $595 and $626, respectively, in
fees under the Administrative Agreement, which were included in administrative service fees in the accompanying Consolidated Statements of Operations. As of December 31, 2016 and 2015, $137 and $97, respectively, was unpaid and included in
administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

Sub-Administration Agreements

On April 3, 2013, the Administrator entered into sub-administration agreements with Carlyle
Employee Co. and CELF Advisors LLP (CELF) (the Carlyle Sub-Administration Agreements). Pursuant to the Carlyle Sub-Administration Agreements,
Carlyle Employee Co. and CELF provide the Administrator with access to personnel.

On April 3, 2013, the Administrator entered into a
sub-administration agreement with State Street Bank and Trust Company (State Street and, such agreement, the State Street Sub-Administration
Agreement and, together with the Carlyle Sub-Administration Agreements, the Sub-Administration Agreements). On March 11, 2015, the Companys
Board of Directors, including a majority of the Independent Directors, approved an amendment to the State Street Sub-Administration Agreement. The initial term of the State Street Sub-Administration Agreement ends on April 1, 2017 and, unless terminated earlier, the State Street Sub-Administration Agreement will renew automatically for successive
annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a
majority of the Companys Independent Directors. The State Street Sub-Administration Agreement may be terminated upon at least 60 days



124



---

##### Table of Contents

written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.

For the years ended December 31, 2016, 2015 and 2014, fees incurred
in connection with the State Street Sub-Administration Agreement, which amounted to $602, $486 and $222, respectively, were included in other general and administrative in the accompanying Consolidated
Statements of Operations. As of December 31, 2016 and 2015, $159 and $138, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

Placement Fees

On April 3,
2013, the Company entered into a placement fee arrangement with TCG Securities, L.L.C. (TCG), a licensed broker-dealer and an affiliate of the Investment Adviser, which may require stockholders to pay a placement fee to TCG for
TCGs services.

For the years ended December 31, 2016, 2015 and 2014, TCG earned placement fees of $12, $6 and $1,
respectively, from the Companys stockholders in connection with the issuance or sale of the Companys common stock.

Board of Directors

The Companys Board of Directors currently consists of five members, three of whom are Independent Directors. On
April 3, 2013, the Board of Directors also established an Audit Committee consisting of its Independent Directors, and may establish additional committees in the future. For the years ended December 31, 2016, 2015 and 2014, the Company
incurred $553, $419 and $395, respectively, in fees and expenses associated with its Independent Directors and Audit Committee. As of December 31, 2016 and 2015, $0 was unpaid and included in other accrued expenses and liabilities in the
accompanying Consolidated Statements of Assets and Liabilities. As of December 31, 2016 and 2015, current directors had committed $765 in capital commitments to the Company.

Transactions

On May 13, 2016
and October 14, 2016, the Company sold investments to a wholly owned subsidiary of Credit Fund for proceeds of $20,038 and $19,800, respectively. The Company had no realized gain or loss on these trades. See Note 5, Middle Market Credit Fund,
LLC, for further information about Credit Fund.

5. MIDDLE MARKET CREDIT FUND, LLC

Overview

On February 29,
2016, the Company and Credit Partners entered into the Limited Liability Company Agreement to co-manage Credit Fund, an unconsolidated Delaware limited liability company. Credit Fund primarily invests in first
lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each
have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members
appointed by the Company.

Together with Credit Partners, the Company co-invests through Credit
Fund. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Funds investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore,
although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle



125



---

##### Table of Contents

Market Credit Fund SPV, LLC (the Credit Fund Sub), a Delaware limited liability company, was formed on April 5, 2016. Credit Fund Sub primarily invests in first lien loans of
middle market companies. Credit Fund Sub is a wholly owned subsidiary of Credit Fund and is consolidated in Credit Funds consolidated financial statements commencing from the date of its formation.

Selected Financial Data

Since
inception of Credit Fund and through December 31, 2016, the Company and Credit Partners each made capital contributions of $1 in members equity and $35,000 in subordinated loans to Credit Fund. Additionally, Credit Fund had net borrowings
of $62,384 in mezzanine loans under a revolving credit facility with the Company (the Credit Fund Facility). As of December 31, 2016, Credit Fund had subordinated loans and members capital of $74,547 and mezzanine loans
of $62,384. The Companys ownership interest in such subordinated loans and members capital was $37,273 and in such mezzanine loans was $62,384.

As of December 31, 2016, Credit Fund held cash and cash equivalents totaling $6,103.

As of December 31, 2016, Credit Fund had total investments at fair value of $437,829, which was comprised of first lien senior secured
loans and second lien senior secured loans to 28 portfolio companies. As of December 31, 2016, no loans in Credit Funds portfolio were on non-accrual status or contained PIK provisions. All
investments in the portfolio were floating rate debt instruments with interest rate floors. The portfolio companies in Credit Fund are U.S. middle market companies in industries similar to those in which the Company may invest directly.
Additionally, as of December 31, 2016, Credit Fund had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $30,361.

Below is a summary of Credit Funds portfolio, followed by a listing of the loans in Credit Funds portfolio as of December 31,
2016:



|                                                                            |  |                        |         |  
|--------------------------------------------------------------------------- |  | ---------------------- | ------- | -
|                                                                            |  | As of December 31,2016 |        
|Senior secured loans (1)                                                    |  | $                      | 439,086 |  
|Weighted average yields of senior secured loans based on amortized cost (2) |  |                        | 6.47    | %
|Weighted average yields of senior secured loans based on fair value (2)     |  |                        | 6.41    | %
|Number of portfolio companies in Credit Fund                                |  |                        | 28      |  



|(1) | At par/principal amount.
|--- | ------------------------

|(2) | Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2016. Weighted average yield on debt and income producing securities
at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at
fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount
earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields
presented above.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



126



---

##### Table of Contents

|                                                                 |  |                                           |  |                         |  |              |  |                     |        |  |                   |   |        |               |  |   |        | 
|---------------------------------------------------------------- |  | ----------------------------------------- |  | ----------------------- |  | ------------ |  | ------------------- | ------ |  | ----------------- | - | ------ | ------------- |  | - | ------ | 
|Consolidated Schedule of Investments as of
December 31, 2016     | 
|Investments
(1)                                                  |  | Industry                                  |  | Interest Rate (2)       |  | MaturityDate |  | Par/PrincipalAmount |        |  | AmortizedCost (5) |   |        | FairValue (6) | 
|First Lien Debt (99.31% of fair value)                           |  |                                           |  |                         |  |              |  |                     |        |  |                   |   |        |               |  |   |        | 
|AM Conservation Holding
Corporation (2)(3)(4)                    |  | Energy: Electricity                       |  | L + 4.75% (1.00% Floor) |  | 10/31/2022   |  | $                   | 30,000 |  |                   | $ | 29,721 |               |  | $ | 29,925 | 
|Datapipe, Inc. (2)(3)(4)(11)                                     |  | Telecommunications                        |  | L + 4.75% (1.00% Floor) |  | 3/15/2019    |  |                     | 9,750  |  |                   |   | 9,654  |               |  |   | 9,764  | 
|Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)
(2)(3)(4)(11) |  | Construction & Building                   |  | L + 4.50% (1.00% Floor) |  | 4/4/2023     |  |                     | 19,850 |  |                   |   | 19,580 |               |  |   | 19,723 | 
|Diversitech
Corporation (2)(4)(10)(11)                           |  | Capital Equipment                         |  | P + 3.50%               |  | 11/19/2021   |  |                     | 14,803 |  |                   |   | 14,617 |               |  |   | 14,803 | 
|DTI Holdco, Inc. (2)(3)(4)(7)                                    |  | High Tech Industries                      |  | L + 5.25% (1.00% Floor) |  | 9/30/2023    |  |                     | 19,950 |  |                   |   | 19,751 |               |  |   | 19,651 | 
|DYK Prime Acquisition LLC (2)(3)(4)                              |  | Chemicals, Plastics & Rubber              |  | L + 4.75% (1.00% Floor) |  | 4/1/2022     |  |                     | 5,775  |  |                   |   | 5,735  |               |  |   | 5,775  | 
|EAG, Inc. (2)(3)(4)(11)                                          |  | Services: Business                        |  | L + 4.25% (1.00% Floor) |  | 7/28/2018    |  |                     | 8,713  |  |                   |   | 8,686  |               |  |   | 8,720  | 
|EIP Merger Sub, LLC (Evolve IP)
(2)(3)(4)(8)                     |  | Telecommunications                        |  | L + 6.25% (1.00% Floor) |  | 6/7/2021     |  |                     | 22,971 |  |                   |   | 22,323 |               |  |   | 22,509 | 
|EIP Merger Sub, LLC (Evolve
IP) (2)(3)(4)(9)                     |  | Telecommunications                        |  | L + 6.25% (1.00% Floor) |  | 6/7/2021     |  |                     | 1,500  |  |                   |   | 1,455  |               |  |   | 1,468  | 
|Empower Payments Acquisitions,
Inc. (2)(3)(7)                    |  | Media: Advertising, Printing & Publishing |  | L + 5.50% (1.00% Floor) |  | 11/30/2023   |  |                     | 17,500 |  |                   |   | 17,154 |               |  |   | 17,279 | 
|Generation Brands Holdings, Inc. (2)(3)(4)                       |  | Durable Consumer Goods                    |  | L + 5.00% (1.00% Floor) |  | 6/10/2022    |  |                     | 19,900 |  |                   |   | 19,712 |               |  |   | 20,099 | 
|Jensen Hughes,
Inc. (2)(3)(4)(10)                                |  | Utilities: Electric                       |  | L + 5.00% (1.00% Floor) |  | 12/4/2021    |  |                     | 20,409 |  |                   |   | 20,188 |               |  |   | 20,327 | 
|Kestra Financial, Inc.(2)(3)(4)                                  |  | Banking, Finance, Insurance & Real Estate |  | L + 5.25% (1.00% Floor) |  | 6/24/2022    |  |                     | 19,900 |  |                   |   | 19,632 |               |  |   | 19,814 | 
|MSHC, Inc.(2)(3)(4)(10)                                          |  | Construction & Building                   |  | L + 5.00% (1.00% Floor) |  | 7/19/2021    |  |                     | 13,177 |  |                   |   | 13,062 |               |  |   | 13,003 | 
|PAI Holdco, Inc. (Parts Authority)
(2)(3)(4)                     |  | Automotive                                |  | L + 4.75% (1.00% Floor) |  | 12/30/2022   |  |                     | 9,950  |  |                   |   | 9,886  |               |  |   | 9,950  | 
|Pasternack Enterprises, Inc. (Infinite
RF)(2)(3)(4)              |  | Capital Equipment                         |  | L + 5.00% (1.00% Floor) |  | 5/27/2022    |  |                     | 11,941 |  |                   |   | 11,844 |               |  |   | 11,941 | 
|Q Holding Company (2)(3)(4)                                      |  | Automotive                                |  | L + 5.00% (1.00% Floor) |  | 12/18/2021   |  |                     | 13,964 |  |                   |   | 13,828 |               |  |   | 13,941 | 
|QW Holding Corporation (Quala)(2)(3)(4)(7)(10)                   |  | Environmental Industries                  |  | L + 6.75% (1.00% Floor) |  | 8/31/2022    |  |                     | 8,975  |  |                   |   | 8,413  |               |  |   | 9,030  | 
|Restaurant Technologies, Inc. (2)(3)(4)                          |  | Retail                                    |  | L + 4.75% (1.00% Floor) |  | 11/23/2022   |  |                     | 23,514 |  |                   |   | 23,117 |               |  |   | 23,443 | 
|RelaDyne Inc. (2)(3)(4)(10)                                      |  | Wholesale                                 |  | L + 5.25% (1.00% Floor) |  | 7/22/2022    |  |                     | 14,000 |  |                   |   | 13,871 |               |  |   | 13,969 | 
|Systems Maintenance Services Holding,
Inc. (2)(3)(4)             |  | High Tech Industries                      |  | L + 5.00% (1.00% Floor) |  | 10/30/2023   |  |                     | 12,000 |  |                   |   | 11,885 |               |  |   | 12,001 | 
|T2 Systems Canada,
Inc. (2)(3)(4)(11)                            |  | Transportation: Consumer                  |  | L + 6.75% (1.00% Floor) |  | 9/28/2022    |  |                     | 2,700  |  |                   |   | 2,635  |               |  |   | 2,727  | 
|T2 Systems,
Inc. (2)(3)(4)(10)(11)                               |  | Transportation: Consumer                  |  | L + 6.75% (1.00% Floor) |  | 9/28/2022    |  |                     | 15,300 |  |                   |   | 14,888 |               |  |   | 15,473 | 
|The Original Cakerie, Ltd.
(Canada) (2)(3)(4)(10)                |  | Beverage, Food & Tobacco                  |  | L + 5.00% (1.00% Floor) |  | 7/20/2021    |  |                     | 7,009  |  |                   |   | 6,946  |               |  |   | 7,009  | 
|The Original Cakerie, Co. (Canada) (2)(3)(4)                     |  | Beverage, Food & Tobacco                  |  | L + 5.50% (1.00% Floor) |  | 7/20/2021    |  |                     | 3,621  |  |                   |   | 3,591  |               |  |   | 3,621  | 
|U.S. Acute Care Solutions, LLC
(2)(3)(4)                         |  | Health & Pharmaceuticals                  |  | L + 5.00% (1.00% Floor) |  | 5/15/2021    |  |                     | 26,400 |  |                   |   | 26,154 |               |  |   | 26,336 | 
|U.S. Anesthesia Partners, Inc.
(2)(3)(4)                         |  | Health & Pharmaceuticals                  |  | L + 5.00% (1.00% Floor) |  | 12/31/2019   |  |                     | 10,374 |  |                   |   | 10,275 |               |  |   | 10,362 | 
|Vantage Specialty Chemicals,
Inc.(2)(3)(4)(11)                   |  | Chemicals, Plastics & Rubber              |  | L + 4.50% (1.00% Floor) |  | 2/5/2021     |  |                     | 17,910 |  |                   |   | 17,786 |               |  |   | 17,903 | 



127



---

##### Table of Contents

|                                                             |  |                              |  |                         |  |              |  |                     |        |  |                   |   |         |               |  |   |         | 
|------------------------------------------------------------ |  | ---------------------------- |  | ----------------------- |  | ------------ |  | ------------------- | ------ |  | ----------------- | - | ------- | ------------- |  | - | ------- | 
|Consolidated Schedule of Investments as of
December 31, 2016 | 
|Investments
(1)                                              |  | Industry                     |  | Interest Rate (2)       |  | MaturityDate |  | Par/PrincipalAmount |        |  | AmortizedCost (5) |   |         | FairValue (6) | 
|WIRB  Copernicus Group, Inc.
(2)(3)(4)                      |  | Health & Pharmaceuticals     |  | L + 5.00% (1.00% Floor) |  | 8/12/2022    |  | $                   | 7,980  |  |                   | $ | 7,916   |               |  | $ | 8,050   | 
|Zest Holdings, LLC (2)(3)(4)                                 |  | Durable Consumer Goods       |  | L + 4.75% (1.00% Floor) |  | 8/16/2020    |  |                     | 8,700  |  |                   |   | 8,658   |               |  |   | 8,749   | 
|Zywave, Inc. (2)(3)(4)(7)(10)                                |  | High Tech Industries         |  | L + 5.00% (1.00% Floor) |  | 11/17/2022   |  |                     | 17,500 |  |                   |   | 17,315  |               |  |   | 17,434  | 
|                                                             |  |                              |  |                         |  |              |  |                     |        |  |                   |   |         |               |  |   |         | 
|First Lien Debt Total                                        |  |                              |  |                         |  |              |  |                     |        |  |                   | $ | 430,278 |               |  | $ | 434,799 | 
|                                                             |  |                              |  |                         |  |              |  |                     |        |  |                   |   |         |               |  |   |         | 
|Second Lien Debt (0.69% of fair value)                       |  |                              |  |                         |  |              |  |                     |        |  |                   |   |         |               |  |   |         | 
|Vantage Specialty Chemicals,
Inc.(2)(3)(4)(11)               |  | Chemicals, Plastics & Rubber |  | L + 8.75% (1.00% Floor) |  | 2/5/2022     |  | $                   | 2,000  |  |                   | $ | 1,960   |               |  | $ | 1,987   | 
|Zywave, Inc. (2)(3)(4)                                       |  | High Tech Industries         |  | L + 9.00% (1.00% Floor) |  | 11/17/2023   |  |                     | 1,050  |  |                   |   | 1,034   |               |  |   | 1,043   | 
|                                                             |  |                              |  |                         |  |              |  |                     |        |  |                   |   |         |               |  |   |         | 
|Second Lien Debt Total                                       |  |                              |  |                         |  |              |  |                     |        |  |                   | $ | 2,994   |               |  | $ | 3,030   | 
|                                                             |  |                              |  |                         |  |              |  |                     |        |  |                   |   |         |               |  |   |         | 
|Total Investments                                            |  |                              |  |                         |  |              |  |                     |        |  |                   | $ | 433,272 |               |  | $ | 437,829 | 
|                                                             |  |                              |  |                         |  |              |  |                     |        |  |                   |   |         |               |  |   |         | 



|(1) | Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2016, the geographical composition of investments as a percentage of fair value was
2.43% in Canada and 97.57% in the United States.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate
(P)), which generally resets quarterly. For each such loan, Credit Fund has provided the interest rate in effect as of December 31, 2016. As of December 31, 2016, all of Credit Funds LIBOR loans were indexed to the 90-day LIBOR rate at 1.00%, except for those loans as indicated in Note 11 below, and the U.S. Prime Rate loan was indexed at 3.75%.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan includes interest rate floor feature.
|--- | ------------------------------------------

|(4) | Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the Credit Fund Sub Facility). The lenders of the Credit Fund Sub
Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Funds valuation policy, which is substantially similar to the valuation policy of the
Company provided in Note 3, Fair Value Measurements.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially
all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Credit Fund receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.25% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among
lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among
lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.84%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan
with respect to principal, interest and other payments.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



128



---

##### Table of Contents

|(10) | As of December 31, 2016, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
|---- | ------------------------------------------------------------------------------------------------------------------------------------



|                                                                            |  |      |              |  |            |  |      |                     |  |   |           |  |  |   |     |  
|--------------------------------------------------------------------------- |  | ---- | ------------ |  | ---------- |  | ---- | ------------------- |  | - | --------- |  |  | - | --- | -
|First Lien Debt  unfunded delayed draw andrevolving term loans
commitments |  | Type |              |  | Unused Fee |  |      | Par/PrincipalAmount |  |   | FairValue | 
|Diversitech Corporation                                                     |  |      | Delayed Draw |  |            |  | 1.00 | %                   |  | $ | 5,000     |  |  | $ |    |  
|Jensen Hughes, Inc.                                                         |  |      | Revolver     |  |            |  | 0.50 | %                   |  |   | 2,000     |  |  |   | (7  | )
|Jensen Hughes, Inc.                                                         |  |      | Delayed Draw |  |            |  | 0.50 | %                   |  |   | 1,461     |  |  |   | (5  | )
|MSHC, Inc.                                                                  |  |      | Delayed Draw |  |            |  | 1.50 | %                   |  |   | 1,790     |  |  |   | (21 | )
|QW Holding Corporation (Quala)                                              |  |      | Revolver     |  |            |  | 1.00 | %                   |  |   | 5,086     |  |  |   | 14  |  
|QW Holding Corporation (Quala)                                              |  |      | Delayed Draw |  |            |  | 1.00 | %                   |  |   | 5,918     |  |  |   | 17  |  
|RelaDyne Inc.                                                               |  |      | Revolver     |  |            |  | 0.50 | %                   |  |   | 2,162     |  |  |   | (6  | )
|RelaDyne Inc.                                                               |  |      | Delayed Draw |  |            |  | 0.50 | %                   |  |   | 1,824     |  |  |   | (5  | )
|T2 Systems, Inc.                                                            |  |      | Revolver     |  |            |  | 1.00 | %                   |  |   | 1,955     |  |  |   | 20  |  
|The Original Cakerie, Ltd. (Canada)                                         |  |      | Revolver     |  |            |  | 0.50 | %                   |  |   | 1,665     |  |  |   |    |  
|Zywave, Inc.                                                                |  |      | Revolver     |  |            |  | 0.50 | %                   |  |   | 1,500     |  |  |   | (5  | )
|                                                                            |  |      |              |  |            |  |      |                     |  |   |           |  |  |   |     |  
|Total unfunded commitments                                                  |  |      |              |  |            |  |      |                     |  | $ | 30,361    |  |  | $ | 2   |  
|                                                                            |  |      |              |  |            |  |      |                     |  |   |           |  |  |   |     |  



|(11) | As of December 31, 2016, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.77%.
|---- | ---------------------------------------------------------------------------------------

Below is certain summarized consolidated financial information for Credit Fund as of December 31, 2016. Credit Fund commenced operations
in May 2016.



|                                                                    |  |                  |         | 
|------------------------------------------------------------------- |  | ---------------- | ------- | 
|                                                                    |  | December 31,2016 |        
|Selected Consolidated Balance Sheet Information                     |  |                  |         | 
|ASSETS                                                              |  |                  |         | 
|Investments, at fair value (amortized cost of $433,272)             |  | $                | 437,829 | 
|Cash and other assets                                               |  |                  | 11,326  | 
|                                                                    |  |                  |         | 
|Total assets                                                        |  | $                | 449,155 | 
|                                                                    |  |                  |         | 
|LIABILITIES AND MEMBERS EQUITY                                     |  |                  |         | 
|Secured borrowings                                                  |  | $                | 248,540 | 
|Mezzanine loans                                                     |  |                  | 62,384  | 
|Other liabilities                                                   |  |                  | 63,684  | 
|Subordinated loans and members equity                              |  |                  | 74,547  | 
|                                                                    |  |                  |         | 
|Liabilities and members equity                                     |  | $                | 449,155 | 
|                                                                    |  |                  |         | 
|Selected Consolidated Statement of Operations Information:          | 
|Total investment income                                             |  | $                | 9,973   | 
|                                                                    |  |                  |         | 
|                                                                    | 
|Expenses                                                            | 
|Interest and credit facility expenses                               |  |                  | 5,410   | 
|Other expenses                                                      |  |                  | 1,266   | 
|                                                                    |  |                  |         | 
|Total expenses                                                      |  |                  | 6,676   | 
|                                                                    |  |                  |         | 
|Net investment income (loss)                                        |  |                  | 3,297   | 
|                                                                    |  |                  |         | 
|Net realized gain (loss) on investments                             |  |                  | 41      | 
|Net change in unrealized appreciation (depreciation) on investments |  |                  | 4,557   | 
|                                                                    |  |                  |         | 
|Net increase (decrease) resulting from operations                   |  | $                | 7,895   | 
|                                                                    |  |                  |         | 



129



---

##### Table of Contents

Debt

Credit Fund Facility

On June 24,
2016, Credit Fund entered into the Credit Fund Facility with the Company pursuant to which Credit Fund may from time to time request mezzanine loans from the Company. The maximum principal amount of the Credit Fund Facility is $100,000. The maturity
date of the Credit Fund Facility is June 24, 2017. Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.50%.

During the year ended December 31, 2016, there were mezzanine loan borrowings of $84,784 and repayments of $22,400 under the Credit Fund
Facility. As of December 31, 2016, there were $62,384 in mezzanine loans outstanding.

As of December 31, 2016, Credit Fund was
in compliance with all covenants and other requirements of the Credit Fund Facility.

Credit Fund Sub Facility

On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders. The Credit Fund Sub Facility provides for secured
borrowings during the applicable revolving period up to an amount equal to $450,000, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $1,400,000. The
facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub and the Companys and Credit Partners unfunded capital commitments. The maturity date of the Credit Fund Sub
Facility is June 24, 2022. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.50%.

During
the year ended December 31, 2016, there were secured borrowings of $248,540 under the Credit Fund Sub Facility. As of December 31, 2016, there was $248,540 in secured borrowings outstanding.

As of December 31, 2016, Credit Fund Sub was in compliance with all covenants and other requirements of the Credit Fund Sub Facility.

6. BORROWINGS

In accordance with
the Investment Company Act, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 200% after such borrowing. As of December 31, 2016 and 2015, asset coverage was
209.97% and 212.70%, respectively. During the years ended December 31, 2016, 2015 and 2014, there were secured borrowings of $566,351, $402,200 and $420,023, respectively, under the SPV Credit Facility and Credit Facility and repayments of
$378,779, $476,328 and $178,404, respectively, under the SPV Credit Facility and Credit Facility. As of December 31, 2016 and 2015, there were $421,885 and $234,313, respectively, in secured borrowings outstanding.

SPV Credit Facility

The SPV
closed on May 24, 2013 on the SPV Credit Facility, which was subsequently amended on June 30, 2014, June 19, 2015 and June 9, 2016. The SPV Credit Facility provides for secured borrowings during the applicable revolving period up
to an amount equal to the lesser of $400,000 (the borrowing base as calculated pursuant to the terms of the SPV Credit Facility) and the amount of net cash proceeds and unpledged capital commitments the Company has received, with an accordion
feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and
conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The SPV Credit Facility has a revolving period through May 23, 2019 and a maturity date of May 24, 2021. Borrowings under the



130



---

##### Table of Contents

SPV Credit Facility bear interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR (or, if applicable, a rate based on the prime rate or federal
funds rate) plus 2.00% per year through May 23, 2018, with a pre-determined future interest rate increase of 0.50% during the final year of the revolving period and
pre-determined future interest rate increases of 0.875%-1.75% over the two years following the end of the revolving period. The SPV is also required to pay an undrawn
commitment fee of between 0.25% and 0.75% per year depending on the usage of the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly. The lenders have a first lien security interest on substantially all of the assets of
the SPV.

As part of the SPV Credit Facility, the SPV is subject to limitations as to how borrowed funds may be used and the types of
loans that are eligible to be acquired by the SPV including, but not limited to, restrictions on sector and geographic concentrations, loan size, payment frequency, tenor and minimum investment ratings (or estimated ratings). In addition, borrowed
funds are intended to be used primarily to purchase first lien loan assets, and the SPV is limited in its ability to purchase certain other assets (including, but not limited to, second lien loans, covenant-lite loans, revolving and delayed draw
loans and discount loans) and other assets are not permitted to be purchased (including, but not limited to paid-in-kind loans and structured finance obligations). The
SPV Credit Facility has certain requirements relating to interest coverage, collateral quality and portfolio performance, including limitations on delinquencies and charge offs, certain violations of which could result in the immediate acceleration
of the amounts due under the SPV Credit Facility. The SPV Credit Facility is also subject to a borrowing base that applies different advance rates to assets held by the SPV based generally on the fair market value of such assets. Under certain
circumstances as set forth in the SPV Credit Facility, the Company could be obliged to repurchase loans from the SPV.

As of
December 31, 2016 and 2015, the SPV was in compliance with all covenants and other requirements of the SPV Credit Facility.

Credit Facility

The Company closed on March 21, 2014 on the Credit Facility, which was subsequently amended on January 8, 2015 and
May 25, 2016 (the Second Facility Amendment). The maximum principal amount of the Credit Facility is $220,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the
Companys portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for
general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $225,000 through the exercise by the Company of an uncommitted accordion feature through which existing and
new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other
permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either LIBOR plus an applicable spread of 2.25%, or an alternative base rate (which is the highest
of a prime rate, the federal funds effective rate plus 0.50%, or one month LIBOR plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the LIBOR or the alternative base rate at the time of drawdown, and loans may
be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Credit Facility and, in respect of each undrawn letter of credit, a fee and interest rate equal to
the then-applicable margin under the Credit Facility while the letter of credit is outstanding. The availability period under the Credit Facility will terminate on March 21, 2020 and the Credit Facility will mature on March 21, 2021.
During the period from March 21, 2020 to March 21, 2021, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.

Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio
investments held by the Company and the Companys unfunded investor equity capital commitments (provided that the amount of unfunded capital commitments ultimately available to the lenders is



131



---

##### Table of Contents

limited to $100,000). The pledge of unfunded investor equity capital commitments was subject to release once $100,000 of incremental capital had been called and received by the Company subsequent
to January 8, 2015. The pledge of unfunded investor equity capital commitments had been released as of December 31, 2016. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage,
shareholders equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of
this nature.

Related to the Second Credit Facility Amendment, $380 of deferred financing costs (representing the prorated financing costs
related to a departing lender) were immediately expensed on May 25, 2016 in lieu of continuing to amortize over the term of the Credit Facility.

As of December 31, 2016 and 2015, the Company was in compliance with all covenants and other requirements of the Credit Facility.

Summary of Facilities

The
facilities of the Company and the SPV consisted of the following as of December 31, 2016 and 2015:



|                    |  |                   |         |  |                       |   |         |                   |  |   |                    |  |  |   |        | 
|------------------- |  | ----------------- | ------- |  | --------------------- | - | ------- | ----------------- |  | - | ------------------ |  |  | - | ------ | 
|                    |  | December 31, 2016 |        
|                    |  | TotalFacility     |         |  | BorrowingsOutstanding |   |         | Unused Portion(1) |  |   | AmountAvailable(2) | 
|SPV Credit Facility |  | $                 | 400,000 |  |                       | $ | 252,885 |                   |  | $ | 147,115            |  |  | $ | 5,988  | 
|Credit Facility     |  |                   | 220,000 |  |                       |   | 169,000 |                   |  |   | 51,000             |  |  |   | 51,000 | 
|                    |  |                   |         |  |                       |   |         |                   |  |   |                    |  |  |   |        | 
|Total               |  | $                 | 620,000 |  |                       | $ | 421,885 |                   |  | $ | 198,115            |  |  | $ | 56,988 | 
|                    |  |                   |         |  |                       |   |         |                   |  |   |                    |  |  |   |        | 



|                    |  |                   |         |  |                       |   |         |                   |  |   |                    |  |  |   |        | 
|------------------- |  | ----------------- | ------- |  | --------------------- | - | ------- | ----------------- |  | - | ------------------ |  |  | - | ------ | 
|                    |  | December 31, 2015 |        
|                    |  | TotalFacility     |         |  | BorrowingsOutstanding |   |         | Unused Portion(1) |  |   | AmountAvailable(2) | 
|SPV Credit Facility |  | $                 | 400,000 |  |                       | $ | 170,313 |                   |  | $ | 229,687            |  |  | $ | 3,155  | 
|Credit Facility     |  |                   | 150,000 |  |                       |   | 64,000  |                   |  |   | 86,000             |  |  |   | 86,000 | 
|                    |  |                   |         |  |                       |   |         |                   |  |   |                    |  |  |   |        | 
|Total               |  | $                 | 550,000 |  |                       | $ | 234,313 |                   |  | $ | 315,687            |  |  | $ | 89,155 | 
|                    |  |                   |         |  |                       |   |         |                   |  |   |                    |  |  |   |        | 



|(1) | The unused portion is the amount upon which commitment fees are based.
|--- | ----------------------------------------------------------------------

|(2) | Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of December 31, 2016 and 2015, $1,667 and $966, respectively, of interest expense, $203 and $141, respectively, of unused commitment
fees and $23 and $22, respectively, of other fees were included in interest and credit facility fees payable. For the years ended December 31, 2016, 2015 and 2014, the weighted average interest rate was 2.73%, 2.23% and 2.18%, respectively, and
average principal debt outstanding was $307,734, $265,277 and $164,980, respectively. As of December 31, 2016, 2015 and 2014, the weighted average interest rate was 2.92%, 2.37% and 2.17%, respectively, based on floating LIBOR rates.



132



---

##### Table of Contents

For the years ended December 31, 2016, 2015 and 2014, the components of interest expense and
credit facility fees were as follows:



|                                                |  |                                  |        |  |      |   |       |      |  |   |       | 
|----------------------------------------------- |  | -------------------------------- | ------ |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                                |  | For the years ended December 31, |       
|                                                |  | 2016                             |        |  | 2015 |   |       | 2014 | 
|Interest expense                                |  | $                                | 8,559  |  |      | $ | 6,008 |      |  | $ | 3,648 | 
|Facility unused commitment fee                  |  |                                  | 1,253  |  |      |   | 847   |      |  |   | 1,129 | 
|Amortization of deferred financing costs        |  |                                  | 1,213  |  |      |   | 945   |      |  |   | 1,820 | 
|Other fees                                      |  |                                  | 107    |  |      |   | 106   |      |  |   | 103   | 
|                                                |  |                                  |        |  |      |   |       |      |  |   |       | 
|Total interest expense and credit facility fees |  | $                                | 11,132 |  |      | $ | 7,906 |      |  | $ | 6,700 | 
|                                                |  |                                  |        |  |      |   |       |      |  |   |       | 
|Cash paid for interest expense                  |  | $                                | 7,828  |  |      | $ | 6,062 |      |  | $ | 2,882 | 

7. 2015-1 Notes

On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly owned and consolidated subsidiary of the Company, and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of $160 million of Aaa/AAA Class A-1A Notes which bear interest at the three-month London Interbank Offered Rate (LIBOR) plus
1.85%; $40 million of Aaa/AAA Class A-1B Notes which bear interest at the three-month LIBOR plus 1.75% for the first 24 months and the three-month LIBOR plus 2.05% thereafter; $27 million of
Aaa/AAA Class A-1C Notes which bear interest at 3.75%; and $46 million of Aa2 Class A-2 Notes which bear interest at the three month LIBOR plus 2.70%. The
2015-1 Notes were issued at par and are scheduled to mature on July 15, 2027. The Company received 100% of the preferred interests (the Preferred Interests) issued by the 2015-1 Issuer on the closing date of the 2015-1 Debt Securitization in exchange for the Companys contribution to the Issuer of the initial closing date loan portfolio.
The Preferred Interests do not bear interest and had a nominal value of $125.9 million at closing. In connection with the contribution, the Company made customary representations, warranties and covenants to the
2015-1 Issuer in the purchase agreement. The Class A-1A, Class A-1B and
Class A-1C and Class A-2 Notes are included in the December 31, 2016 consolidated financial statements. The Preferred Interests were eliminated in
consolidation.

On the closing date of the 2015-1 Debt Securitization, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the
2015-1 Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the
2015-1 Debt Securitization, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement. The Company contributed the
loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from
the Company to the 2015-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Companys Board of Directors. Assets of the 2015-1
Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1 Notes, the Company made customary representations, warranties and covenants in the
purchase agreement.

During the reinvestment period, pursuant to the indenture governing the
2015-1 Notes, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of
Investment Adviser in its capacity as collateral manager of the 2015-1 Issuer and in accordance with the Companys investment strategy.

The Investment Adviser serves as collateral manager to the 2015-1 Issuer under a collateral management
agreement (the Collateral Management Agreement). Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management
fees and



133



---

##### Table of Contents

incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the
Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the Preferred Interests, thus the Investment Adviser did not earn any management fees
from the 2015-1 Issuer for the year ended December 31, 2016. Any such waived fees may not be recaptured by the Investment Adviser.

Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization, the
Company has agreed to hold on an ongoing basis Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1
Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of December 31, 2016, the Company was in compliance with its undertaking.

The 2015-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal
counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2015-1
Issuer.

As of December 31, 2016, there were 62 first lien and second lien senior secured loans with a total
fair value of approximately $389,437 securing the 2015-1 Notes. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral
coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1 Notes.

For the years ended December 31, 2016 and 2015, the weighted average interest rate, which includes amortization of debt issuance costs on
the 2015-1 Notes, was 2.89% and 2.45%, respectively, based on floating LIBOR rates.

For the years
ended December 31, 2016, 2015 and 2014, the components of interest expense on the 2015-1 Notes were as follows:



|                                                |  |                                 |       |  |      |   |       |      |  |   |   | 
|----------------------------------------------- |  | ------------------------------- | ----- |  | ---- | - | ----- | ---- |  | - | - | 
|                                                |  | For the years endedDecember 31, |      
|                                                |  | 2016                            |       |  | 2015 |   |       | 2014 | 
|Interest expense                                |  | $                               | 7,698 |  |      | $ | 3,468 |      |  | $ |  | 
|Amortization of debt issuance costs             |  |                                 | 205   |  |      |   | 106   |      |  |   |  | 
|                                                |  |                                 |       |  |      |   |       |      |  |   |   | 
|Total interest expense and credit facility fees |  | $                               | 7,903 |  |      | $ | 3,574 |      |  | $ |  | 
|                                                |  |                                 |       |  |      |   |       |      |  |   |   | 
|Cash paid for interest expense                  |  | $                               | 7,439 |  |      | $ | 2,021 |      |  | $ |  | 

8. COMMITMENTS AND CONTINGENCIES

A summary of significant contractual payment obligations was as follows as of December 31, 2016 and 2015:



|                      |  |                                         |         |  |                  |   |         |                  |  |   |                  |  |  |   |         | 
|--------------------- |  | --------------------------------------- | ------- |  | ---------------- | - | ------- | ---------------- |  | - | ---------------- |  |  | - | ------- | 
|                      |  | SPV Credit Facility and Credit Facility |         |  | 2015-1 Notes     |  
|Payment Due by Period |  | December 31,2016                        |         |  | December 31,2015 |   |         | December 31,2016 |  |   | December 31,2015 | 
|Less than 1 Year      |  | $                                       |        |  |                  | $ |        |                  |  | $ |                 |  |  | $ |        | 
|1-3 Years             |  |                                         |        |  |                  |   |        |                  |  |   |                 |  |  |   |        | 
|3-5 Years             |  |                                         | 421,885 |  |                  |   | 64,000  |                  |  |   |                 |  |  |   |        | 
|More than 5 Years     |  |                                         |        |  |                  |   | 170,313 |                  |  |   | 273,000          |  |  |   | 273,000 | 
|                      |  |                                         |         |  |                  |   |         |                  |  |   |                  |  |  |   |         | 
|Total                 |  | $                                       | 421,885 |  |                  | $ | 234,313 |                  |  | $ | 273,000          |  |  | $ | 273,000 | 
|                      |  |                                         |         |  |                  |   |         |                  |  |   |                  |  |  |   |         | 



134



---

##### Table of Contents

In the ordinary course of its business, the Company enters into contracts or agreements that
contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is
unknown. No accrual has been made in the consolidated financial statements as of December 31, 2016 and 2015 for any such exposure.

As of December 31, 2016 and 2015, the Company had $1,222,358 and $1,174,340, respectively, in total capital commitments from
stockholders, of which $421,698 and $559,214, respectively, was unfunded. As of December 31, 2016 and 2015, current directors had committed $765 in capital commitments to the Company.

The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:



|                                         |  |                   |        |  |                   |   |        | 
|---------------------------------------- |  | ----------------- | ------ |  | ----------------- | - | ------ | 
|                                         |  | Par Value as of   |       
|                                         |  | December 31, 2016 |        |  | December 31, 2015 |  
|Unfunded delayed draw commitments        |  | $                 | 35,704 |  |                   | $ | 20,695 | 
|Unfunded revolving term loan commitments |  |                   | 24,063 |  |                   |   | 3,906  | 
|                                         |  |                   |        |  |                   |   |        | 
|Total unfunded commitments               |  | $                 | 59,767 |  |                   | $ | 24,601 | 
|                                         |  |                   |        |  |                   |   |        | 

As of December 31, 2016, the Company had remaining commitments to fund, from time to time, capital to
Credit Fund of up to $364,999. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. As of December 31, 2016, the Company had remaining commitments to
fund, from time to time, mezzanine loans to Credit Fund of up to $37,617, of which $13,500 was available for borrowing based on the computation of collateral to support the borrowings.

9. NET ASSETS

The Company has the
authority to issue 200,000,000 shares of common stock, $0.01 per share par value.

During the year ended December 31, 2016, the
Company issued 10,178,235 shares for $185,816 including reinvestment of dividends. The following table summarizes capital activity during the year ended December 31, 2016:



|                                                                        |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |         |   |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------- | ------ | ------------ | ---------- | ------ | --------------------------- | - | --- | ------------- |  | - | -------------------------------------- | - |  | ------------------------------------------------ | --- | - | ----------------------------------------------------------------- | - | ------- | -------------- |  | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                                        |        | Common Stock |            |        | Capitalin Excessof ParValue |   |     | OfferingCosts |  |   | AccumulatedNet InvestmentIncome (Loss) |   |  | AccumulatedNet RealizedGain (Loss)on Investments |     |   | Accumulated NetUnrealizedAppreciation(Depreciation) onInvestments |   |         | TotalNetAssets | 
|                                                                        | Shares |              |            | Amount |                             |   |     |               |  |   |                                       
|Balance, beginning of year                                              |        |              | 31,524,083 |        |                             | $ | 315 |               |  | $ | 613,944                                |   |  | $                                                | (74 | ) |                                                                   | $ | (12,994 | )              |  | $ | (2,411  | ) |  | $ | (27,054 | ) |  | $ | 571,726 |  
|Common stock issued                                                     |        |              | 10,162,898 |        |                             |   | 102 |               |  |   | 185,435                                |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |        |   |  |   |        |   |  |   | 185,537 |  
|Reinvestment of dividends                                               |        |              | 15,337     |        |                             |   |    |               |  |   | 279                                    |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |        |   |  |   |        |   |  |   | 279     |  
|Net investment income (loss)                                            |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   | 59,621  |                |  |   |        |   |  |   |        |   |  |   | 59,621  |  
|Net realized gain (loss) on investments                                 |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   |        |                |  |   | (9,644  | ) |  |   |        |   |  |   | (9,644  | )
|Net change in unrealized appreciation (depreciation) on investments     |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |        |   |  |   | 19,832  |   |  |   | 19,832  |  
|Dividends declared                                                      |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   | (63,214 | )              |  |   |        |   |  |   |        |   |  |   | (63,214 | )
|Tax reclassification of stockholders equity in accordance with US GAAP |        |              |           |        |                             |   |    |               |  |   | (78                                    | ) |  |                                                  |    |   |                                                                   |   | 13,380  |                |  |   | (13,302 | ) |  |   |        |   |  |   |        |  
|                                                                        |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |         |   |  |   |         |   |  |   |         |  
|Balance, end of year                                                    |        |              | 41,702,318 |        |                             | $ | 417 |               |  | $ | 799,580                                |   |  | $                                                | (74 | ) |                                                                   | $ | (3,207  | )              |  | $ | (25,357 | ) |  | $ | (7,222  | ) |  | $ | 764,137 |  
|                                                                        |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |         |   |  |   |         |   |  |   |         |  



135



---

##### Table of Contents

During the year ended December 31, 2015, the Company issued 13,591,386 shares for $262,485
including reinvestment of dividends. The following table summarizes capital activity during the year ended December 31, 2015:



|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |        |   |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------------------------------- | ------ | ------------ | ---------- | ------ | --------------------------- | - | --- | ------------- |  | - | -------------------------------------- | - |  | ------------------------------------------------ | --- | - | ----------------------------------------------------------------- | - | ------- | -------------- |  | - | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                                                                   |        | Common Stock |            |        | Capitalin Excessof ParValue |   |     | OfferingCosts |  |   | AccumulatedNet InvestmentIncome (Loss) |   |  | AccumulatedNet RealizedGain (Loss)on Investments |     |   | Accumulated NetUnrealizedAppreciation(Depreciation) onInvestments |   |         | TotalNetAssets | 
|                                                                                                   | Shares |              |            | Amount |                             |   |     |               |  |   |                                       
|Balance, beginning of year                                                                         |        |              | 17,932,697 |        |                             | $ | 179 |               |  | $ | 351,636                                |   |  | $                                                | (74 | ) |                                                                   | $ | (4,388  | )              |  | $ | (57    | ) |  | $ | (9,039  | ) |  | $ | 338,257 |  
|Common stock issued                                                                                |        |              | 13,584,508 |        |                             |   | 136 |               |  |   | 262,218                                |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |       |   |  |   |        |   |  |   | 262,354 |  
|Reinvestment of dividends                                                                          |        |              | 6,878      |        |                             |   |    |               |  |   | 131                                    |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |       |   |  |   |        |   |  |   | 131     |  
|Net investment income (loss)                                                                       |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   | 35,524  |                |  |   |       |   |  |   |        |   |  |   | 35,524  |  
|Net realized gain (loss) on
investmentsnon-controlled/ non-affiliated                             |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   |        |                |  |   | 1,164  |   |  |   |        |   |  |   | 1,164   |  
|Net change in unrealized appreciation (depreciation) on
investmentsnon-controlled/ non-affiliated |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |       |   |  |   | (18,015 | ) |  |   | (18,015 | )
|Dividends declared                                                                                 |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   | (47,689 | )              |  |   |       |   |  |   |        |   |  |   | (47,689 | )
|Tax reclassification of stockholders equity in accordance with US GAAP                            |        |              |           |        |                             |   |    |               |  |   | (41                                    | ) |  |                                                  |    |   |                                                                   |   | 3,559   |                |  |   | (3,518 | ) |  |   |        |   |  |   |        |  
|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |        |   |  |   |         |   |  |   |         |  
|Balance, end of year                                                                               |        |              | 31,524,083 |        |                             | $ | 315 |               |  | $ | 613,944                                |   |  | $                                                | (74 | ) |                                                                   | $ | (12,994 | )              |  | $ | (2,411 | ) |  | $ | (27,054 | ) |  | $ | 571,726 |  
|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |        |   |  |   |         |   |  |   |         |  

During the year ended December 31, 2014, the Company issued 8,356,707 shares for $164,803 including
reinvestment of dividends. The following table summarizes capital activity during the year ended December 31, 2014:



|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |      |   |  |   |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------- | ------ | ------------ | ---------- | ------ | --------------------------- | - | --- | ------------- |  | - | -------------------------------------- | - |  | ------------------------------------------------ | --- | - | ----------------------------------------------------------------- | - | ------- | -------------- |  | - | ---- | - |  | - | ------ | - |  | - | ------- | -
|                                                                                                   |        | Common Stock |            |        | Capitalin Excessof ParValue |   |     | OfferingCosts |  |   | AccumulatedNet InvestmentIncome (Loss) |   |  | AccumulatedNet RealizedGain (Loss)on Investments |     |   | Accumulated NetUnrealizedAppreciation(Depreciation) onInvestments |   |         | TotalNetAssets | 
|                                                                                                   | Shares |              |            | Amount |                             |   |     |               |  |   |                                       
|Balance, beginning of year                                                                         |        |              | 9,575,990  |        |                             | $ | 96  |               |  | $ | 186,965                                |   |  | $                                                | (74 | ) |                                                                   | $ | (664    | )              |  | $ |     |   |  | $ | (321   | ) |  | $ | 186,002 |  
|Common stock issued                                                                                |        |              | 8,354,987  |        |                             |   | 83  |               |  |   | 164,686                                |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |     |   |  |   |       |   |  |   | 164,769 |  
|Reinvestment of dividends                                                                          |        |              | 1,720      |        |                             |   |    |               |  |   | 34                                     |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |     |   |  |   |       |   |  |   | 34      |  
|Net investment income (loss)                                                                       |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   | 14,260  |                |  |   |     |   |  |   |       |   |  |   | 14,260  |  
|Net realized gain (loss) on
investmentsnon-controlled/ non-affiliated                             |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   |        |                |  |   | 72   |   |  |   |       |   |  |   | 72      |  
|Net change in unrealized appreciation (depreciation) on
investmentsnon-controlled/ non-affiliated |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   |        |                |  |   |     |   |  |   | (8,718 | ) |  |   | (8,718  | )
|Dividends declared                                                                                 |        |              |           |        |                             |   |    |               |  |   |                                       |   |  |                                                  |    |   |                                                                   |   | (18,162 | )              |  |   |     |   |  |   |       |   |  |   | (18,162 | )
|Tax reclassification of stockholders equity in accordance with US GAAP                            |        |              |           |        |                             |   |    |               |  |   | (49                                    | ) |  |                                                  |    |   |                                                                   |   | 178     |                |  |   | (129 | ) |  |   |       |   |  |   |        |  
|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |      |   |  |   |        |   |  |   |         |  
|Balance, end of year                                                                               |        |              | 17,932,697 |        |                             | $ | 179 |               |  | $ | 351,636                                |   |  | $                                                | (74 | ) |                                                                   | $ | (4,388  | )              |  | $ | (57  | ) |  | $ | (9,039 | ) |  | $ | 338,257 |  
|                                                                                                   |        |              |            |        |                             |   |     |               |  |   |                                        |   |  |                                                  |     |   |                                                                   |   |         |                |  |   |      |   |  |   |        |   |  |   |         |  



136



---

##### Table of Contents

The following table summarizes total shares issued and proceeds received related to capital
subscriptions for the Companys common stock and reinvestment of dividends during the year ended December 31, 2016:



|                   |  |               |            |  |                   |   |         | 
|------------------ |  | ------------- | ---------- |  | ----------------- | - | ------- | 
|                   |  | Shares Issued |            |  | Proceeds Received |  
|January 22, 2016*  |  |               | 3,885      |  |                   | $ | 74      | 
|March 11, 2016     |  |               | 1,815,181  |  |                   |   | 33,000  | 
|April 22, 2016*    |  |               | 2,988      |  |                   |   | 54      | 
|May 6, 2016        |  |               | 1,510,859  |  |                   |   | 26,999  | 
|June 24, 2016      |  |               | 1,660,333  |  |                   |   | 30,102  | 
|July 22, 2016*     |  |               | 3,756      |  |                   |   | 66      | 
|August 26, 2016    |  |               | 1,909,449  |  |                   |   | 35,000  | 
|September 16, 2016 |  |               | 1,360,948  |  |                   |   | 25,001  | 
|October 24, 2016*  |  |               | 4,708      |  |                   |   | 85      | 
|November 18, 2016  |  |               | 1,906,128  |  |                   |   | 35,435  | 
|                   |  |               |            |  |                   |   |         | 
|Total              |  |               | 10,178,235 |  |                   | $ | 185,816 | 
|                   |  |               |            |  |                   |   |         | 

* Represents shares issued upon the reinvestment of dividends.

The following table summarizes total shares issued and proceeds received related to capital subscriptions for the Companys common stock
and reinvestment of dividends during the year ended December 31, 2015:



|                   |  |               |            |  |                   |   |         | 
|------------------ |  | ------------- | ---------- |  | ----------------- | - | ------- | 
|                   |  | Shares Issued |            |  | Proceeds Received |  
|January 16, 2015   |  |               | 924,977    |  |                   | $ | 18,000  | 
|January 26, 2015*  |  |               | 1,051      |  |                   |   | 20      | 
|February 26, 2015  |  |               | 2,312,659  |  |                   |   | 45,005  | 
|April 21, 2015*    |  |               | 1,351      |  |                   |   | 25      | 
|May 1, 2015        |  |               | 1,462,746  |  |                   |   | 28,085  | 
|May 22, 2015       |  |               | 1,708,068  |  |                   |   | 33,000  | 
|June 25, 2015      |  |               | 2,412,386  |  |                   |   | 46,992  | 
|July 22, 2015*     |  |               | 2,018      |  |                   |   | 38      | 
|August 21, 2015    |  |               | 1,032,504  |  |                   |   | 20,002  | 
|September 30, 2015 |  |               | 104,954    |  |                   |   | 2,009   | 
|October 9, 2015    |  |               | 1,255,914  |  |                   |   | 24,038  | 
|October 22, 2015*  |  |               | 2,458      |  |                   |   | 47      | 
|December 21, 2015  |  |               | 2,370,300  |  |                   |   | 45,224  | 
|                   |  |               |            |  |                   |   |         | 
|Total              |  |               | 13,591,386 |  |                   | $ | 262,485 | 
|                   |  |               |            |  |                   |   |         | 

* Represents shares issued upon the reinvestment of dividends.

The following table summarizes total shares issued and proceeds received related to capital subscriptions for the Companys common stock
and reinvestment of dividends during the year ended December 31, 2014:



|                   |  |               |           |  |                   |   |         | 
|------------------ |  | ------------- | --------- |  | ----------------- | - | ------- | 
|                   |  | Shares Issued |           |  | Proceeds Received |  
|January 27, 2014   |  |               | 1,020,810 |  |                   | $ | 19,998  | 
|February 21, 2014  |  |               | 491,849   |  |                   |   | 9,689   | 
|March 21, 2014     |  |               | 1,802,772 |  |                   |   | 35,785  | 
|April 14, 2014*    |  |               | 148       |  |                   |   | 3       | 
|July 14, 2014*     |  |               | 586       |  |                   |   | 12      | 
|September 17, 2014 |  |               | 643,060   |  |                   |   | 12,790  | 
|October 9, 2014*   |  |               | 986       |  |                   |   | 19      | 
|October 16, 2014   |  |               | 1,134,723 |  |                   |   | 22,502  | 
|November 3, 2014   |  |               | 1,008,570 |  |                   |   | 20,000  | 
|December 9, 2014   |  |               | 2,253,203 |  |                   |   | 44,005  | 
|                   |  |               |           |  |                   |   |         | 
|Total              |  |               | 8,356,707 |  |                   | $ | 164,803 | 
|                   |  |               |           |  |                   |   |         | 

* Represents shares issued upon the reinvestment of dividends.



137



---

##### Table of Contents

Subscribed but unissued shares are presented in equity with a deduction of subscriptions
receivable until cash is received for a subscription. There were no subscribed but unissued shares as of December 31, 2016, 2015 and 2014.

Subscription transactions during the years ended December 31, 2016, 2015 and 2014 were executed at an offering price at a premium to net
asset value due to the requirement to use prior quarter net asset value as offering price unless it would result in the Company selling shares of its common stock at a price below the current net asset value and also in order to effect a
reallocation of organizational costs to subsequent investors. Such subscription transactions increased net asset value by $0.01 per share, $0.11 per share, and $0.09 per share, respectively, for the years ended December 31, 2016, 2015 and 2014,
respectively.

The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share.Basic earnings per
common share were calculated by dividing net increase (decrease) in net assets resulting from operations attributable to the Company by the weighted-average number of common shares outstanding for the year.

Basic and diluted earnings per common share were as follows:



|                                                                |  |                                  |            |  |      |   |            |      |  |   |            | 
|--------------------------------------------------------------- |  | -------------------------------- | ---------- |  | ---- | - | ---------- | ---- |  | - | ---------- | 
|                                                                |  | For the years ended December 31, |           
|                                                                |  | 2016                             |            |  | 2015 |   |            | 2014 | 
|Net increase (decrease) in net assets resulting from operations |  | $                                | 69,809     |  |      | $ | 18,673     |      |  | $ | 5,614      | 
|Weighted-average common shares outstanding                      |  |                                  | 36,152,390 |  |      |   | 24,830,200 |      |  |   | 13,091,544 | 
|                                                                |  |                                  |            |  |      |   |            |      |  |   |            | 
|Basic and diluted earnings per common share                     |  | $                                | 1.93       |  |      | $ | 0.75       |      |  | $ | 0.43       | 
|                                                                |  |                                  |            |  |      |   |            |      |  |   |            | 

The following table summarizes the Companys dividends declared and payable since inception through the
year ended December 31, 2016:



|                   |  |                    |  |                  |  |                 |      |     |             |   |        | 
|------------------ |  | ------------------ |  | ---------------- |  | --------------- | ---- | --- | ----------- | - | ------ | 
|Date Declared      |  | Record Date        |  | Payment Date     |  | Per ShareAmount |      |     | TotalAmount |  
|March 13, 2014     |  | March 31, 2014     |  | April 14, 2014   |  | $               | 0.19 |     |             | $ | 2,449  | 
|June 26, 2014      |  | June 30, 2014      |  | July 14, 2014    |  | $               | 0.27 |     |             | $ | 3,481  | 
|September 12, 2014 |  | September 18, 2014 |  | October 9, 2014  |  | $               | 0.44 |     |             | $ | 5,956  | 
|December 19, 2014  |  | December 29, 2014  |  | January 26, 2015 |  | $               | 0.35 |     |             | $ | 6,276  | 
|March 11, 2015     |  | March 13, 2015     |  | April 17, 2015   |  | $               | 0.37 |     |             | $ | 7,833  | 
|June 24, 2015      |  | June 30, 2015      |  | July 22, 2015    |  | $               | 0.37 |     |             | $ | 9,902  | 
|September 24, 2015 |  | September 24, 2015 |  | October 22, 2015 |  | $               | 0.42 |     |             | $ | 11,670 | 
|December 29, 2015  |  | December 29, 2015  |  | January 22, 2016 |  | $               | 0.40 |     |             | $ | 12,610 | 
|December 29, 2015  |  | December 29, 2015  |  | January 22, 2016 |  | $               | 0.18 | (1) |             | $ | 5,674  | 
|March 10, 2016     |  | March 14, 2016     |  | April 22, 2016   |  | $               | 0.40 |     |             | $ | 13,337 | 
|June 8, 2016       |  | June 8, 2016       |  | July 22, 2016    |  | $               | 0.40 |     |             | $ | 13,943 | 
|September 28, 2016 |  | September 28, 2016 |  | October 24, 2016 |  | $               | 0.40 |     |             | $ | 15,917 | 
|December 29, 2016  |  | December 29, 2016  |  | January 24, 2017 |  | $               | 0.41 |     |             | $ | 17,098 | 
|December 29, 2016  |  | December 29, 2016  |  | January 24, 2017 |  | $               | 0.07 | (1) |             | $ | 2,919  | 



|(1) | Represents a special dividend.
|--- | ------------------------------



138



---

##### Table of Contents

10. CONSOLIDATED FINANCIAL HIGHLIGHTS

The following is a schedule of consolidated financial highlights for the years ended December 31, 2016, 2015, 2014 and 2013:



|                                                                                                 |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |           |   
|------------------------------------------------------------------------------------------------ |  | -------------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | - |  | - | --------- | --
|                                                                                                 |  | For the years ended December 31, |           
|                                                                                                 |  | 2016                             |            |   | 2015 |   |            | 2014 |  |   | 2013       |  
|Per Share Data:                                                                                  |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |           |   
|Net asset value per share, beginning of year                                                     |  | $                                | 18.14      |   |      | $ | 18.86      |      |  | $ | 19.42      |   |  | $ | 20.00     |   
|Net investment income (loss) (1)                                                                 |  |                                  | 1.65       |   |      |   | 1.43       |      |  |   | 1.09       |   |  |   | (0.55     | ) 
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on
investments |  |                                  | 0.20       |   |      |   | (0.52      | )    |  |   | (0.49      | ) |  |   | (0.34     | ) 
|                                                                                                 |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |           |   
|Net increase (decrease) in net assets resulting from operations                                  |  |                                  | 1.85       |   |      |   | 0.91       |      |  |   | 0.60       |   |  |   | (0.89     | ) 
|                                                                                                 |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |           |   
|Dividends declared (2)                                                                           |  |                                  | (1.68      | ) |      |   | (1.74      | )    |  |   | (1.25      | ) |  |   |          |   
|Effect of subscription offering price
(3)                                                        |  |                                  | 0.01       |   |      |   | 0.11       |      |  |   | 0.09       |   |  |   | 0.32      |   
|Offering costs                                                                                   |  |                                  |           |   |      |   |           |      |  |   |           |   |  |   | (0.01     | ) 
|                                                                                                 |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |           |   
|Net asset value per share, end of year                                                           |  | $                                | 18.32      |   |      | $ | 18.14      |      |  | $ | 18.86      |   |  | $ | 19.42     |   
|                                                                                                 |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |           |   
|Number of shares outstanding, end of year                                                        |  |                                  | 41,702,318 |   |      |   | 31,524,083 |      |  |   | 17,932,697 |   |  |   | 9,575,990 |   
|Total return (4)                                                                                 |  |                                  | 10.25      | % |      |   | 5.41       | %    |  |   | 3.55       | % |  |   | (2.90     | )%
|Net assets, end of year                                                                          |  | $                                | 764,137    |   |      | $ | 571,726    |      |  | $ | 338,257    |   |  | $ | 186,002   |   
|Ratio to average net assets
(5):                                                                 |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |           |   
|Expenses net of waiver, before incentive fees                                                    |  |                                  | 5.46       | % |      |   | 5.11       | %    |  |   | 5.78       | % |  |   | 9.75      | % 
|Expenses net of waiver, after incentive fees                                                     |  |                                  | 7.69       | % |      |   | 6.94       | %    |  |   | 7.15       | % |  |   | 9.75      | % 
|Expenses gross of waiver, after incentive fees                                                   |  |                                  | 8.62       | % |      |   | 7.86       | %    |  |   | 7.98       | % |  |   | 10.21     | % 
|Net investment income (loss) (6)                                                                 |  |                                  | 8.93       | % |      |   | 7.33       | %    |  |   | 5.45       | % |  |   | (2.45     | )%
|Interest expense and credit facility fees                                                        |  |                                  | 2.85       | % |      |   | 2.37       | %    |  |   | 2.56       | % |  |   | 2.23      | % 
|Ratios/Supplemental Data:                                                                        |  |                                  |            |   |      |   |            |      |  |   |            |   |  |   |           |   
|Asset coverage, end of period                                                                    |  |                                  | 209.97     | % |      |   | 212.70     | %    |  |   | 209.67     | % |  |   | 378.35    | % 
|Portfolio turnover                                                                               |  |                                  | 32.39      | % |      |   | 26.04      | %    |  |   | 28.06      | % |  |   | 6.43      | % 
|Total committed capital, end of year                                                             |  | $                                | 1,222,358  |   |      | $ | 1,174,340  |      |  | $ | 1,129,522  |   |  | $ | 877,408   |   
|Ratio of total contributed capital to total committed capital, end of year                       |  |                                  | 65.50      | % |      |   | 52.38      | %    |  |   | 31.23      | % |  |   | 21.43     | % 
|Weighted-average shares outstanding                                                              |  |                                  | 36,152,390 |   |      |   | 24,830,200 |      |  |   | 13,091,544 |   |  |   | 3,016,298 |   



|(1) | For the years ended December 31, 2016, 2015 and 2014, net investment income (loss) per share was calculated as net investment income (loss) for the year divided by the weighted-average number of shares outstanding
for the year. For the year ended December 31, 2013, net investment income (loss) per share was calculated as net investment income (loss) for the period divided by the weighted average number of shares outstanding for the period June 5,
2013 (date of issuance of shares related to the first capital drawdown) through December 31, 2013.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For the years ended December 31, 2016, 2015 and 2014, dividends declared per share was calculated as the sum of dividends declared during the year divided by the number of shares outstanding at each respective quarter-end date (refer to Notes 9 and 12).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Increase is due to offering price of subscriptions during the year (refer to Note 9).
|--- | -------------------------------------------------------------------------------------

|(4) | Total return is based on the change in net asset value per share during the year plus the declared dividends,
assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the year. Total return based on change in net asset value for the year ended December 31, 2013 was calculated for
the period from commencement of operations through December 31, 2013.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



139



---

##### Table of Contents

| | Total return for the years ended December 31, 2016, 2015, 2014 and 2013 was inclusive of $0.01, $0.11, $0.09, and $0.32, respectively, per share increase in net asset value related to the
offering price of subscriptions. Excluding the effects of the higher offering price of subscriptions, total return would have been 10.20%, 4.83%, 3.09%, and (4.50%), respectively (refer to Note 9).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | The Company commenced operations on May 2, 2013; therefore, ratios to average net assets and portfolio turnover for the year ended December 31, 2013 may have been different had there been a full year of
operations.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | The net investment income ratio is net of the waiver of base management fees.
|--- | -----------------------------------------------------------------------------

11. LITIGATION

The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current
matters, if any, will materially impact the Company or its consolidated financial statements. As of December 31, 2016 and 2015, the Company was not subject to any material legal proceedings, nor, to the Companys knowledge, is any material
legal proceeding threatened against the Company.

In addition, portfolio investments of the Company could be the subject of litigation or
regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated
financial statements.

12. TAX

The
Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of December 31, 2016 and 2015.

In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign authorities for
2013-2016. As of December 31, 2016 and 2015, the Company had filed tax returns and therefore is subject to examination.

Book and tax
basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified among the Companys capital accounts. In addition, the character of income and gains to be distributed is
determined in accordance with income tax regulations that may differ from US GAAP. As of December 31, 2016 and 2015, permanent differences primarily due to the tax treatment of passive foreign investment companies and non- deductible
excise tax resulted in a net decrease in accumulated net investment loss by $13,380 and $3,559, respectively, net decrease in accumulated net realized gain by $13,302 and $3,518, respectively, and net decrease in additional paid-in capital in excess of par by $78 and $41, respectively, on the Consolidated Statements of Assets and Liabilities. Total earnings and net asset value were not affected.

The tax character of the distributions paid for the fiscal years ended December 31, 2016, 2015 and 2014 was as follows:



|                      |  |                                 |        |  |      |   |        |      |  |   |        | 
|--------------------- |  | ------------------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                      |  | For the years endedDecember 31, |       
|                      |  | 2016                            |        |  | 2015 |   |        | 2014 | 
|Ordinary income       |  | $                               | 63,214 |  |      | $ | 47,689 |      |  | $ | 18,162 | 
|Tax return of capital |  | $                               |       |  |      | $ |       |      |  | $ |       | 



140



---

##### Table of Contents

Income Tax Information and Distributions to Stockholders

As of December 31, 2016 and 2015, the components of accumulated earnings (deficit) on a tax basis were as follows:



|                                                              |  |      |         |   |      |   |         |  
|------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                              |  | 2016 |         |   | 2015 |  
|Undistributed ordinary income                                 |  | $    | 5,365   |   |      | $ | 2,691   |  
|Other book/tax temporary differences(1)                       |  |      | (2,108  | ) |      |   | (2,012  | )
|Capital loss carryforwards                                    |  |      | (25,414 | ) |      |   | (2,411  | )
|Net unrealized appreciation (depreciation) on investments (2) |  |      | (13,629 | ) |      |   | (40,727 | )
|                                                              |  |      |         |   |      |   |         |  
|Total accumulated earnings (deficit)                          |  | $    | (35,786 | ) |      | $ | (42,459 | )
|                                                              |  |      |         |   |      |   |         |  



|(1) | Consists of the unamortized portion of organization costs as of December 31, 2016 and 2015, respectively.
|--- | ---------------------------------------------------------------------------------------------------------

|(2) | The difference between the book-basis and tax-basis unrealized appreciation (depreciation) on investments is attributable primarily to the tax treatment of passive foreign
investment companies, which include the structured finance obligations.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Also, consists of book to tax difference on
interest income on CLO equity investments recognized using the effective yield method for financial statement purposes.

As of
December 31, 2016 and 2015, the cost of investments for federal income tax purposes and gross unrealized appreciation and depreciation on investments were as follows:



|                                                          |  |      |           |   |      |   |           |  
|--------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | -
|                                                          |  | 2016 |           |   | 2015 |  
|Cost of investments                                       |  | $    | 1,436,387 |   |      | $ | 1,093,393 |  
|Gross unrealized appreciation on investments              |  |      | 22,390    |   |      |   | 5,911     |  
|Gross unrealized depreciation on investments              |  |      | (36,019   | ) |      |   | (46,638   | )
|                                                          |  |      |           |   |      |   |           |  
|Net unrealized appreciation (depreciation) on investments |  | $    | (13,629   | ) |      | $ | (40,727   | )
|                                                          |  |      |           |   |      |   |           |  

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the RIC
Modernization Act) was enacted which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. Under the RIC Modernization Act, the fund
will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the
losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more
likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term losses rather than being considered all short-term as under previous law. As of
December 31, 2016 and 2015, the Company did not have any pre-enactment capital loss carryforwards, and had $25,414 and $2,411, respectively, of post enactment capital loss carryforwards, $614 and $727 of
which were post-enactment short-term capital loss carryforwards, respectively, and $24,800 and $1,684, of which were post-enactment long-term capital loss carryforwards, respectively.



141



---

##### Table of Contents

13. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)



|                                                                                                 |  |      |        |   |    |   |        |    |  |   |        |  |  |   |         |  
|------------------------------------------------------------------------------------------------ |  | ---- | ------ | - | -- | - | ------ | -- |  | - | ------ |  |  | - | ------- | -
|                                                                                                 |  | 2016 |       
|                                                                                                 |  | Q4   |        |   | Q3 |   |        | Q2 |  |   | Q1     | 
|Total investment income                                                                          |  | $    | 33,156 |   |    | $ | 28,957 |    |  | $ | 25,748 |  |  | $ | 23,110  |  
|Net expenses                                                                                     |  |      | 14,807 |   |    |   | 13,111 |    |  |   | 12,282 |  |  |   | 11,150  |  
|Net investment income (loss)                                                                     |  |      | 18,349 |   |    |   | 15,846 |    |  |   | 13,466 |  |  |   | 11,960  |  
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on
investments |  |      | (953   | ) |    |   | 13,324 |    |  |   | 12,485 |  |  |   | (14,668 | )
|Net increase (decrease) in net assets resulting from operations                                  |  |      | 17,396 |   |    |   | 29,170 |    |  |   | 25,951 |  |  |   | (2,708  | )
|Net asset value per share                                                                        |  |      | 18.32  |   |    |   | 18.38  |    |  |   | 18.02  |  |  |   | 17.66   |  
|Basic and diluted earnings per common share                                                      |  | $    | 0.48   |   |    | $ | 0.78   |    |  | $ | 0.75   |  |  | $ | (0.08   | )



|                                                                                                 |  |      |         |   |    |   |        |    |  |   |        |  |  |   |        | 
|------------------------------------------------------------------------------------------------ |  | ---- | ------- | - | -- | - | ------ | -- |  | - | ------ |  |  | - | ------ | 
|                                                                                                 |  | 2015 |        
|                                                                                                 |  | Q4   |         |   | Q3 |   |        | Q2 |  |   | Q1     | 
|Total investment income                                                                          |  | $    | 20,685  |   |    | $ | 19,601 |    |  | $ | 15,925 |  |  | $ | 12,979 | 
|Net expenses                                                                                     |  |      | 9,920   |   |    |   | 9,267  |    |  |   | 7,980  |  |  |   | 6,499  | 
|Net investment income (loss)                                                                     |  |      | 10,765  |   |    |   | 10,334 |    |  |   | 7,945  |  |  |   | 6,480  | 
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on
investments |  |      | (20,748 | ) |    |   | (681   | )  |  |   | 1,270  |  |  |   | 3,308  | 
|Net increase (decrease) in net assets resulting from operations                                  |  |      | (9,983  | ) |    |   | 9,653  |    |  |   | 9,215  |  |  |   | 9,788  | 
|Net asset value per share                                                                        |  |      | 18.14   |   |    |   | 19.02  |    |  |   | 19.09  |  |  |   | 19.05  | 
|Basic and diluted earnings per common share                                                      |  | $    | (0.34   | ) |    | $ | 0.35   |    |  | $ | 0.40   |  |  | $ | 0.50   | 



|                                                                                                 |  |      |        |   |    |   |        |    |  |   |       |  |  |   |       | 
|------------------------------------------------------------------------------------------------ |  | ---- | ------ | - | -- | - | ------ | -- |  | - | ----- |  |  | - | ----- | 
|                                                                                                 |  | 2014 |       
|                                                                                                 |  | Q4   |        |   | Q3 |   |        | Q2 |  |   | Q1    | 
|Total investment income                                                                          |  | $    | 5,885  |   |    | $ | 10,522 |    |  | $ | 9,944 |  |  | $ | 6,633 | 
|Net expenses                                                                                     |  |      | 4,906  |   |    |   | 4,816  |    |  |   | 5,408 |  |  |   | 3,594 | 
|Net investment income (loss)                                                                     |  |      | 979    |   |    |   | 5,706  |    |  |   | 4,536 |  |  |   | 3,039 | 
|Net realized gain (loss) and net change in unrealized appreciation (depreciation) on
investments |  |      | (4,910 | ) |    |   | (4,769 | )  |  |   | 56    |  |  |   | 977   | 
|Net increase (decrease) in net assets resulting from operations                                  |  |      | (3,931 | ) |    |   | 937    |    |  |   | 4,592 |  |  |   | 4,016 | 
|Net asset value per share                                                                        |  |      | 18.86  |   |    |   | 19.35  |    |  |   | 19.71 |  |  |   | 19.63 | 
|Basic and diluted earnings per common share                                                      |  | $    | (0.25  | ) |    | $ | 0.07   |    |  | $ | 0.36  |  |  | $ | 0.37  | 

14. SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events
that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below.

Subsequent to December 31, 2016, the Company borrowed $81,000 under the Credit Facility and SPV Credit Facility to fund investment
acquisitions. The Company also voluntarily repaid $124,277 under the Credit Facility and SPV Credit Facility.

Effective January 31,
2017, TwentyEighty, Inc. (fka Miller Heiman, Inc.) completed a restructuring whereby the first lien debt held by us was converted into new term loans and equity. Such term loan investments contain cash interest and PIK provisions. As a result, we
realized a loss of $7,738 during the period.

On February 28, 2017, Credit Fund issued a capital call and delivered capital drawdown
notices of $3,000 to each of the Company and Credit Partners. Proceeds from the capital call were due, and the related issuance of $6,000 of subordinated loans occurred, on March 7, 2017.



142



---

##### Table of Contents

On March 20, 2017, the Companys Board of Directors, including a majority of the
Independent Directors, approved the renewal of the Companys Investment Advisory Agreement with the Investment Adviser and the Companys Administration Agreement with the Administrator, each for an additional one year term.

On March 20, 2017, the Companys Board of Directors declared a dividend of $0.41 per share, which is payable on or about
April 24, 2017 to holders of record of the Companys common stock at the close of business on March 20, 2017.

Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer and Treasurer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures
(as defined in Rule 13a-15 of the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer and Treasurer have concluded that our current disclosure controls and
procedures are effective in timely alerting them of material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Exchange Act.

Managements Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). The Companys internal control over financial reporting is a process designed under the supervision of its Chief Executive
Officer (Principal Executive Officer) and Chief Financial Officer and Treasurer (Principal Financial Officer) and effected by the Companys Board of Directors, management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

The Companys internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect transactions and dispositions of the Companys assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in
accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors; and provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on its consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of the Companys internal control over financial reporting as of
December 31, 2016 based on the framework established in Internal ControlIntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded
that the Companys internal control over financial reporting as of December 31, 2016 was effective.



143



---

##### Table of Contents

This annual report does not include an attestation report of the Companys registered public
accounting firm due to an exemption for emerging growth companies under the JOBS Act.

Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2016
that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Pursuant to the Articles of Amendment and Restatement (as amended, the Charter) of the Company, the members of the Companys
Board of Directors are elected to serve staggered terms and are divided into three classes, with each class being as nearly equal in number as possible, and with the term of one class of members of the Board of Directors expiring at each annual
meeting of the Companys stockholders. Following the previously disclosed resignations of Michael J. Petrick and Michael L. Rankowitz, in order to ensure that the Board of Directors consists of three classes divided as nearly equal in number as
possible, on March 20, 2017, the Board of Directors approved effectively moving Michael A. Hart, who is currently a Class III director and a member of the Pricing Committee, from Class III to Class I, which would result in one (1) Class I director,
two (2) Class II directors and two (2) Class III directors. Mr. Hart has been nominated to stand for election as a Class I director at the 2017 annual meeting of the Companys stockholders. On March 20, 2017, Mr. Hart, with the concurrence of
the Board of Directors, expressed his intention to resign from his position as a Class III director effective upon his election as a Class I director. If Mr. Hart is not elected as a Class I director at the 2017 annual meeting of the Companys
stockholders, his resignation as a Class III director will not become effective and he will continue to serve as a Class III director

Effective March 15, 2017, the Company amended its Charter to change its name to TCG BDC, Inc. To effectuate the name change,
the amendment (the Articles of Amendment) to the Companys Articles of Amendment and Restatement was filed with the Maryland State Department of Assessments and Taxation on March 15, 2017, pursuant to approval from the
Companys Board of Directors and without action by the Companys stockholders, as permitted by Section 2-605(a)(1) of the Maryland General Corporation Law (MGCL). A copy of the Articles
of Amendment is attached to this Form 10-K as Exhibit 3.2.

Pursuant to authorization of the Board
as permitted by the MGCL and the provisions of the Companys Bylaws, the Bylaws were amended (the Bylaws Amendment) to reflect the name change described above, effective March 15, 2017. The Bylaws Amendment replaces all
references in the Bylaws to the Company with references to TCG BDC, Inc. A copy of the Bylaws Amendment is attached to this Annual Report on Form 10-K as Exhibit 3.4.



144



---

##### Table of Contents

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2016 annual meeting of stockholders.
The Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Exchange Act.

We have adopted a Code of Ethics for Principal Executive and Senior Financial Officers under the Sarbanes-Oxley Act of 2002 (the SOX
Code of Ethics), which applies to, among others, our principal executive officer and principal financial officer. There have been no material changes to our SOX Code of Ethics or material waivers of the code that apply to our Chief Executive
Officer or Chief Financial Officer. We hereby undertake to provide a copy of this code to any person, without charge, upon request. Requests for a copy of this code may be made in writing addressed to the Secretary of the Company, Matthew Cottrell,
TCG BDC, Inc., 520 Madison Avenue, 40th Floor, New York, NY.

Item 11. Executive Compensation

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2017 annual meeting of stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2017 annual meeting of stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2017 annual meeting of stockholders.

Item 14. Principal Accountant Fees and Services

Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2017 annual meeting of stockholders.



145



---

##### Table of Contents

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this annual report:

(1) Financial StatementsRefer to Part II, Item 8 of this Form 10-K, which are incorporated
herein by reference:



|                                                                                                       |  |  |     | 
|------------------------------------------------------------------------------------------------------ |  |  | --- | 
|                                                                                                       | 
|Report of Independent Registered Public Accounting
Firm                                                |  |  | 87  | 
|                                                                                                       | 
|Consolidated Statements of Assets and Liabilities as of December 31,
 2016 and 2015                    |  |  | 88  | 
|                                                                                                       | 
|Consolidated Statements of Operations for the Years Ended December 31,
 2016, 2015 and 2014            |  |  | 89  | 
|                                                                                                       | 
|Consolidated Statements of Changes in Net Assets for the Years Ended December 31,
 2016, 2015 and 2014 |  |  | 90  | 
|                                                                                                       | 
|Consolidated Statements of Cash Flows for the Years Ended December 31,
 2016, 2015 and 2014            |  |  | 91  | 
|                                                                                                       | 
|Consolidated Schedules of Investments as of December 
31, 2016 and 2015                                |  |  | 92  | 
|                                                                                                       | 
|Notes to Consolidated Financial Statements                                                             |  |  | 109 | 

(2) Financial Statement Schedules required to be filed by Part II, Item 8 of this Form 10-KNone are required and therefore all financial statement schedules have been omitted.

(3)
Exhibits



|      |  |                                                                                                                                                                                                    
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1   |  | Articles of Amendment and Restatement(1)                                                                                                                                                           
|      | 
|3.2   |  | Articles of Amendment*                                                                                                                                                                             
|      | 
|3.3   |  | Amended and Restated Bylaws (1)                                                                                                                                                                    
|      | 
|3.4   |  | First Amendment to the Amended and Restated Bylaws*                                                                                                                                                
|      | 
|4.1   |  | Form of Subscription Agreement(1)                                                                                                                                                                  
|      | 
|10.1  |  | Investment Advisory Agreement(1)                                                                                                                                                                   
|      | 
|10.2  |  | Administration Agreement(1)                                                                                                                                                                        
|      | 
|10.3  |  | Form of Indemnification Agreement(1)                                                                                                                                                               
|      | 
|10.4  |  | Loan and Servicing Agreement(2)                                                                                                                                                                    
|      | 
|10.5  |  | Senior Secured Revolving Credit Agreement, dated as of March 21, 2014(4)                                                                                                                           
|      | 
|10.6  |  | First Amendment, dated as of June 30, 2014, to the Loan and Servicing Agreement, dated as of May 24, 2013(5)                                                                                       
|      | 
|10.7  |  | First Amendment, dated as of January 8, 2015, to the Senior Secured Revolving Credit Agreement, dated as of March 21, 2014(6)                                                                      
|      | 
|10.8  |  | Second Amendment, dated as of June 19, 2015, to the Loan and Servicing Agreement, dated as of May 24, 2013(7)                                                                                      
|      | 
|10.9  |  | Indenture, dated as of June 26, 2015, between Carlyle GMS Finance MM CLO 2015-1 LLC, as issuer, and State Street Bank and Trust Company, as trustee(7)                                             
|      | 
|10.10 |  | Collateral Management Agreement, dated as of June 26, 2015, by and between Carlyle GMS Finance MM CLO 2015-1 LLC, as issuer, and Carlyle GMS Investment Management L.L.C., as collateral
manager(7)



146



---

##### Table of Contents

|      |  |                                                                                                                                                                                  
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.11 |  | Contribution Agreement, dated as of June 26, 2015, by and between Carlyle GMS Finance, Inc., as the contributor, and Carlyle GMS Finance MM CLO 2015-1 LLC, as the contributee(7)
|      | 
|10.12 |  | Second Amendment, dated as of May 25, 2016, to the Senior Secured Revolving Credit Agreement, dated as of March 21, 2014(8)                                                      
|      | 
|10.13 |  | Third Amendment, dated as of June 9, 2016, to the Loan and Servicing Agreement, dated as of May 24, 2013(8)                                                                      
|      | 
|10.14 |  | Second Amended and Restated Limited Liability Company Agreement, dated as of June 24, 2016, by and between Carlyle GMS Finance, Inc. and Credit Partners USA LLC, as members(9)  
|      | 
|21.1  |  | List of Subsidiaries (3)                                                                                                                                                         
|      | 
|31.1  |  | Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*                           
|      | 
|31.2  |  | Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*                              
|      | 
|32.1  |  | Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|      | 
|32.2  |  | Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*



|(1) | Incorporated by reference to Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)
|--- | ------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Form 10-Q filed by the Company on July 31, 2013 (File No. 814-00995)
|--- | -------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Form 10-12G filed by the Company on February 11, 2013 (File No. 000-54899)
|--- | -------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Form 10-Q filed by the Company on May 9, 2014 (File No. 814-00995)
|--- | -----------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to Form 10-Q filed by the Company on August 13, 2014 (File No. 814-00995)
|--- | ---------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to Form 10-K filed by the Company on March 27, 2015 (File No. 814-00995)
|--- | --------------------------------------------------------------------------------------------------

|(7) | Incorporated by reference to Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)
|--- | ---------------------------------------------------------------------------------------------------

|(8) | Incorporated by reference to Form 10-Q filed by the Company on August 10, 2016 (File No. 814-00995)
|--- | ---------------------------------------------------------------------------------------------------

|(9) | Incorporated by reference to Form 10-Q filed by the Company on November 10, 2016 (File No. 814-00995)
|--- | -----------------------------------------------------------------------------------------------------

|* | Filed herewith
|- | --------------



147



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.



|                      |  |  |  |               |  |                                                                   
|--------------------- |  |  |  | ------------- |  | ------------------------------------------------------------------
|                      |  |  |  | TCG BDC, INC.
|                      |  |  | 
|Dated: March 21, 2017 |  |  |  | By            |  | /s/ Michael A. Hart                                               
|                      |  |  |  |               |  | Michael A. Hart                                                   
|                      |  |  |  |               |  | Director and Chief Executive Officer (principal executive officer)



|                      |  |  |  |    |  |                                                                     
|--------------------- |  |  |  | -- |  | --------------------------------------------------------------------
|                      |  |  | 
|Dated: March 21, 2017 |  |  |  | By |  | /s/ Venugopal Rathi                                                 
|                      |  |  |  |    |  | Venugopal Rathi                                                     
|                      |  |  |  |    |  | Chief Financial Officer (principal financial
and accounting officer)



|                      |  |  |  |    |  |                       
|--------------------- |  |  |  | -- |  | ----------------------
|                      |  |  | 
|Dated: March 21, 2017 |  |  |  | By |  | /s/ Nigel D.T. Andrews
|                      |  |  |  |    |  | Nigel D.T. Andrews    
|                      |  |  |  |    |  | Director              



|                      |  |  |  |    |  |                      
|--------------------- |  |  |  | -- |  | ---------------------
|                      |  |  | 
|Dated: March 21, 2017 |  |  |  | By |  | /s/ William P. Hendry
|                      |  |  |  |    |  | William P. Hendry    
|                      |  |  |  |    |  | Director             



|                      |  |  |  |    |  |                       
|--------------------- |  |  |  | -- |  | ----------------------
|                      |  |  | 
|Dated: March 21, 2017 |  |  |  | By |  | /s/ Eliot P.S. Merrill
|                      |  |  |  |    |  | Eliot P.S. Merrill    
|                      |  |  |  |    |  | Director              



|                      |  |  |  |    |  |                   
|--------------------- |  |  |  | -- |  | ------------------
|                      |  |  | 
|Dated: March 21, 2017 |  |  |  | By |  | /s/ John G. Nestor
|                      |  |  |  |    |  | John G. Nestor    
|                      |  |  |  |    |  | Director          



148