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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







|☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the Quarter Ended March 31, 2017



|☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

Commission File Number: 814-00849





SOLAR SENIOR CAPITAL LTD.

(Exact name of registrant as specified in its charter)







|                                         |  |                                     
|---------------------------------------- |  | ------------------------------------
|Maryland                                 |  | 27-4288022                          
|(State of Incorporation)                 |  | (I.R.S. Employer Identification No.)
|500 Park Avenue New York, N.Y.           |  | 10022                               
|(Address of principal executive offices) |  | (Zip Code)                          

(212) 993-1670

(Registrants telephone number, including area code)





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



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  | ☐ |  | Accelerated filer         |  | ☒
|                        |  |   | 
|Non-accelerated filer   |  | ☐ |  | Smaller Reporting Company |  | ☐

|                        |  |   |  |  |  | 
|----------------------- |  | - |  |  |  | 
|                        |  |   | 
|Emerging growth company |  | ☐ |  |  |  | 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

The number of shares of the
registrants Common Stock, $.01 par value, outstanding as of May 1, 2017 was 16,028,819.









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SOLAR SENIOR CAPITAL LTD.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2017

TABLE OF CONTENTS





|                              |  |                                                                                                                                              |  |  |    | 
|----------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  |  | -- | 
|                              |  | PAGE                                                                                                                                         | 
|PART I. FINANCIAL INFORMATION |  |                                                                                                                                              | 
|                              |  |                                                                                                                                             
|Item 1.                       |  | Financial Statements                                                                                                                         |  |  |    | 
|                              |  | Consolidated Statements of Assets and Liabilities as of March 
31, 2017 (unaudited) and December 31, 2016                                    |  |  | 3  | 
|                              |  |                                                                                                                                             
|                              |  | Consolidated Statements of Operations for the three months ended March 
31, 2017 (unaudited) and March 31, 2016 (unaudited)                  |  |  | 4  | 
|                              |  |                                                                                                                                             
|                              |  | Consolidated Statements of Changes in Net Assets for the three months ended March 
31, 2017 (unaudited) and the year ended December 31, 2016 |  |  | 5  | 
|                              |  |                                                                                                                                             
|                              |  | Consolidated Statements of Cash Flows for the three months ended March 
31, 2017 (unaudited) and March 31, 2016 (unaudited)                  |  |  | 6  | 
|                              |  |                                                                                                                                             
|                              |  | Consolidated Schedule of Investments as of March 31, 2017 (unaudited)                                                                        |  |  | 7  | 
|                              |  |                                                                                                                                             
|                              |  | Consolidated Schedule of Investments as of December 31, 2016                                                                                 |  |  | 10 | 
|                              |  |                                                                                                                                             
|                              |  | Notes to Consolidated Financial Statements (unaudited)                                                                                       |  |  | 13 | 
|                              |  |                                                                                                                                             
|                              |  | Report of Independent Registered Public Accounting Firm                                                                                      |  |  | 34 | 
|                              |  |                                                                                                                                             
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                        |  |  | 35 | 
|                              |  |                                                                                                                                             
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                   |  |  | 53 | 
|                              |  |                                                                                                                                             
|Item 4.                       |  | Controls and Procedures                                                                                                                      |  |  | 53 | 
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                                                              |  | 
|                              |  |                                                                                                                                             
|Item 1.                       |  | Legal Proceedings                                                                                                                            |  |  | 55 | 
|                              |  |                                                                                                                                             
|Item 1A.                      |  | Risk Factors                                                                                                                                 |  |  | 55 | 
|                              |  |                                                                                                                                             
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                  |  |  | 55 | 
|                              |  |                                                                                                                                             
|Item 3.                       |  | Defaults Upon Senior Securities                                                                                                              |  |  | 55 | 
|                              |  |                                                                                                                                             
|Item 4.                       |  | Mine Safety Disclosures                                                                                                                      |  |  | 55 | 
|                              |  |                                                                                                                                             
|Item 5.                       |  | Other Information                                                                                                                            |  |  | 55 | 
|                              |  |                                                                                                                                             
|Item 6.                       |  | Exhibits                                                                                                                                     |  |  | 56 | 
|                              |  |                                                                                                                                             
|                              |  | Signatures                                                                                                                                   |  |  | 58 | 



2



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PART I. FINANCIAL INFORMATION

In this Quarterly Report, Solar Senior, Company, Fund, we, us, and our refer to
Solar Senior Capital Ltd. unless the context states otherwise.



|Item 1. | Financial Statements
|------- | --------------------

SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except share amounts)



|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                                                |  | March 31,2017(unaudited) |         |   | December 31,2016 |  
|Assets                                                                                                                                                                          |  |                          |         |   |                  |   |         |  
|Investments at fair value:                                                                                                                                                      |  |                          |         |   |                  |   |         |  
|Companies less than 5% owned (cost: $302,284 and $295,037, respectively)                                                                                                        |  | $                        | 296,604 |   |                  | $ | 289,399 |  
|Companies 5% to 25% owned (cost: $3,884 and $3,710, respectively)                                                                                                               |  |                          | 2,069   |   |                  |   | 1,825   |  
|Companies more than 25% owned (cost: $74,026 and $74,026, respectively)                                                                                                         |  |                          | 74,441  |   |                  |   | 74,310  |  
|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  
|Total investments (cost: $380,194 and $372,773, respectively)                                                                                                                   |  |                          | 373,114 |   |                  |   | 365,534 |  
|Cash                                                                                                                                                                            |  |                          | 11,056  |   |                  |   | 11,876  |  
|Cash equivalents (cost: $124,940 and $139,952, respectively)                                                                                                                    |  |                          | 124,940 |   |                  |   | 139,952 |  
|Dividends receivable                                                                                                                                                            |  |                          | 1,547   |   |                  |   | 1,422   |  
|Interest receivable                                                                                                                                                             |  |                          | 1,092   |   |                  |   | 1,463   |  
|Other receivable                                                                                                                                                                |  |                          | 19      |   |                  |   | 19      |  
|Receivable for investments sold                                                                                                                                                 |  |                          | 17      |   |                  |   | 1,450   |  
|Prepaid expenses and other assets                                                                                                                                               |  |                          | 417     |   |                  |   | 273     |  
|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  
|Total assets                                                                                                                                                                    |  | $                        | 512,202 |   |                  | $ | 521,989 |  
|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  
|Liabilities                                                                                                                                                                     |  |                          |         |   |                  |   |         |  
|Credit facility payable (see notes 6 and 7)                                                                                                                                     |  | $                        | 86,800  |   |                  | $ | 98,300  |  
|Payable for investments and cash equivalents purchased                                                                                                                          |  |                          | 153,031 |   |                  |   | 151,312 |  
|Distributions payable                                                                                                                                                           |  |                          | 1,883   |   |                  |   | 1,883   |  
|Management fee payable (see note 3)                                                                                                                                             |  |                          | 159     |   |                  |   | 104     |  
|Interest payable (see note 7)                                                                                                                                                   |  |                          | 252     |   |                  |   | 241     |  
|Administrative services expense payable (see note 3)                                                                                                                            |  |                          | 215     |   |                  |   | 621     |  
|Other liabilities and accrued expenses                                                                                                                                          |  |                          | 409     |   |                  |   | 383     |  
|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  
|Total liabilities                                                                                                                                                               |  | $                        | 242,749 |   |                  | $ | 252,844 |  
|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  
|Commitments and contingencies (see notes 12 and 13)                                                                                                                             |  |                          |         |   |                  |   |         |  
|                                                                                                                                                                                |  |                         
|Net Assets                                                                                                                                                                      |  |                          |         |   |                  |   |         |  
|Common stock, par value $0.01 per share, 200,000,000 and 200,000,000 common shares authorized, respectively, and 16,027,687 and
16,025,011 issued and outstanding, respectively |  | $                        | 160     |   |                  | $ | 160     |  
|Paid-in capital in excess of par                                                                                                                                                |  |                          | 287,561 |   |                  |   | 287,515 |  
|Distributions in excess of net investment income                                                                                                                                |  |                          | (5,342  | ) |                  |   | (5,342  | )
|Accumulated net realized loss                                                                                                                                                   |  |                          | (5,846  | ) |                  |   | (5,949  | )
|Net unrealized depreciation                                                                                                                                                     |  |                          | (7,080  | ) |                  |   | (7,239  | )
|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  
|Total net assets                                                                                                                                                                |  | $                        | 269,453 |   |                  | $ | 269,145 |  
|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  
|Net Asset Value Per Share                                                                                                                                                       |  | $                        | 16.81   |   |                  | $ | 16.80   |  
|                                                                                                                                                                                |  |                          |         |   |                  |   |         |  

See notes to consolidated financial statements.



3



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SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except share amounts)



|                                                                                      |  |                    |       |   |               |   |       |  
|------------------------------------------------------------------------------------- |  | ------------------ | ----- | - | ------------- | - | ----- | -
|                                                                                      |  | Three months ended |      
|                                                                                      |  | March 31,2017      |       |   | March 31,2016 |  
|INVESTMENT INCOME:                                                                    |  |                    |       |   |               |   |       |  
|Interest:                                                                             |  |                    |       |   |               |   |       |  
|Companies less than 5% owned                                                          |  | $                  | 5,256 |   |               | $ | 4,424 |  
|Companies 5% to 25% owned                                                             |  |                    | 49    |   |               |   | 50    |  
|Dividends:                                                                            |  |                    |       |   |               |   |       |  
|Companies more than 25% owned                                                         |  |                    | 1,924 |   |               |   | 1,808 |  
|Other income:                                                                         |  |                    |       |   |               |   |       |  
|Companies less than 5% owned                                                          |  |                    | 247   |   |               |   | 53    |  
|Companies more than 25% owned                                                         |  |                    | 20    |   |               |   | 14    |  
|                                                                                      |  |                    |       |   |               |   |       |  
|Total investment income                                                               |  |                    | 7,496 |   |               |   | 6,349 |  
|                                                                                      |  |                    |       |   |               |   |       |  
|EXPENSES:                                                                             |  |                    |       |   |               |   |       |  
|Management fees (see note 3)                                                          |  | $                  | 948   |   |               | $ | 797   |  
|Performance-based incentive fees (see note 3)                                         |  |                    | 75    |   |               |   | 385   |  
|Interest and other credit facility expenses (see note 7)                              |  |                    | 844   |   |               |   | 851   |  
|Administrative services expense (see note 3)                                          |  |                    | 368   |   |               |   | 295   |  
|Other general and administrative expenses                                             |  |                    | 476   |   |               |   | 341   |  
|                                                                                      |  |                    |       |   |               |   |       |  
|Total expenses                                                                        |  |                    | 2,711 |   |               |   | 2,669 |  
|                                                                                      |  |                    |       |   |               |   |       |  
|Management fees waived (see note 3)                                                   |  |                    | (789  | ) |               |   |      |  
|Performance-based incentive fees waived (see note 3)                                  |  |                    | (75   | ) |               |   | (385  | )
|                                                                                      |  |                    |       |   |               |   |       |  
|Net expenses                                                                          |  |                    | 1,847 |   |               |   | 2,284 |  
|                                                                                      |  |                    |       |   |               |   |       |  
|Net investment income                                                                 |  | $                  | 5,649 |   |               | $ | 4,065 |  
|                                                                                      |  |                    |       |   |               |   |       |  
|REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND CASH EQUIVALENTS:              |  |                    |       |   |               |   |       |  
|Net realized gain on investments and cash equivalents (companies less than 5% owned): |  | $                  | 103   |   |               | $ | 9     |  
|Net change in unrealized gain (loss) on investments and cash equivalents              |  |                    | 159   |   |               |   | 4,340 |  
|                                                                                      |  |                    |       |   |               |   |       |  
|Net realized and unrealized gain (loss) on investments and cash equivalents           |  |                    | 262   |   |               |   | 4,349 |  
|                                                                                      |  |                    |       |   |               |   |       |  
|NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                  |  | $                  | 5,911 |   |               | $ | 8,414 |  
|                                                                                      |  |                    |       |   |               |   |       |  
|EARNINGS PER SHARE (see note 5)                                                       |  | $                  | 0.37  |   |               | $ | 0.73  |  
|                                                                                      |  |                    |       |   |               |   |       |  

See notes to consolidated financial statements.



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SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(in thousands, except share amounts)



|                                                               |  |                                             |         |   |                             |   |           |  
|-------------------------------------------------------------- |  | ------------------------------------------- | ------- | - | --------------------------- | - | --------- | -
|                                                               |  | Three months endedMarch 31,2017 (unaudited) |         |   | Year endedDecember 31, 2016 |  
|Increase in net assets resulting from operations:              |  |                                             |         |   |                             |   |           |  
|Net investment income                                          |  | $                                           | 5,649   |   |                             | $ | 18,316    |  
|Net realized gain                                              |  |                                             | 103     |   |                             |   | 81        |  
|Net change in unrealized gain (loss)                           |  |                                             | 159     |   |                             |   | 5,855     |  
|                                                               |  |                                             |         |   |                             |   |           |  
|Net increase in net assets resulting from operations           |  |                                             | 5,911   |   |                             |   | 24,252    |  
|                                                               |  |                                             |         |   |                             |   |           |  
|Distributions to stockholders:                                 |  |                                             |         |   |                             |   |           |  
|From net investment income                                     |  |                                             | (5,649  | ) |                             |   | (18,316   | )
|                                                               |  |                                             |         |   |                             |   |           |  
|Capital transactions (see note 13):                            |  |                                             |         |   |                             |   |           |  
|Net proceeds from shares sold                                  |  |                                             |        |   |                             |   | 75,255    |  
|Less common stock offering costs                               |  |                                             |        |   |                             |   | (376      | )
|Reinvestment of distributions                                  |  |                                             | 46      |   |                             |   | 26        |  
|                                                               |  |                                             |         |   |                             |   |           |  
|Net increase in net assets resulting from capital transactions |  |                                             | 46      |   |                             |   | 74,905    |  
|                                                               |  |                                             |         |   |                             |   |           |  
|Total increase in net assets                                   |  |                                             | 308     |   |                             |   | 80,841    |  
|Net assets at beginning of period                              |  |                                             | 269,145 |   |                             |   | 188,304   |  
|                                                               |  |                                             |         |   |                             |   |           |  
|Net assets at end of period(1)                                 |  | $                                           | 269,453 |   |                             | $ | 269,145   |  
|                                                               |  |                                             |         |   |                             |   |           |  
|Capital share activity:                                        |  |                                             |         |   |                             |   |           |  
|Common stock sold                                              |  |                                             |        |   |                             |   | 4,490,152 |  
|Common stock issued from reinvestment of distributions         |  |                                             | 2,676   |   |                             |   | 1,544     |  
|                                                               |  |                                             |         |   |                             |   |           |  
|Net increase from capital share activity                       |  |                                             | 2,676   |   |                             |   | 4,491,696 |  
|                                                               |  |                                             |         |   |                             |   |           |  



|(1) | Includes overdistributed net investment income of ($5,342) and ($5,342), respectively.
|--- | --------------------------------------------------------------------------------------

See notes to consolidated financial statements.



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SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)



|                                                                                                                                      |  |                    |         |   |               |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | - | ------------- | - | ------- | -
|                                                                                                                                      |  | Three months ended |        
|                                                                                                                                      |  | March 31,2017      |         |   | March 31,2016 |  
|Cash Flows from Operating Activities:                                                                                                 |  |                    |         |   |               |   |         |  
|Net increase in net assets resulting from operations                                                                                  |  | $                  | 5,911   |   |               | $ | 8,414   |  
|Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating
activities: |  |                    |         |   |               |   |         |  
|Net realized gain on investments and cash equivalents                                                                                 |  |                    | (103    | ) |               |   | (9      | )
|Net change in unrealized (gain) loss on investments and cash equivalents                                                              |  |                    | (159    | ) |               |   | (4,340  | )
|(Increase) decrease in operating assets:                                                                                              |  |                    |         |   |               |   |         |  
|Purchase of investments                                                                                                               |  |                    | (62,819 | ) |               |   | (19,089 | )
|Proceeds from disposition of investments                                                                                              |  |                    | 55,627  |   |               |   | 17,724  |  
|Capitalization of payment-in-kind
interest                                                                                            |  |                    | (126    | ) |               |   |        |  
|Receivable for investments sold                                                                                                       |  |                    | 1,433   |   |               |   | (4,903  | )
|Interest receivable                                                                                                                   |  |                    | 371     |   |               |   | 815     |  
|Dividends receivable                                                                                                                  |  |                    | (125    | ) |               |   | (891    | )
|Other receivable                                                                                                                      |  |                    |        |   |               |   | (2      | )
|Prepaid expenses and other assets                                                                                                     |  |                    | (144    | ) |               |   | (129    | )
|Increase (decrease) in operating liabilities:                                                                                         |  |                    |         |   |               |   |         |  
|Payable for investments and cash equivalents purchased                                                                                |  |                    | 1,719   |   |               |   | (11,125 | )
|Management fee payable                                                                                                                |  |                    | 55      |   |               |   | (34     | )
|Administrative services expense payable                                                                                               |  |                    | (406    | ) |               |   | (446    | )
|Interest payable                                                                                                                      |  |                    | 11      |   |               |   | 29      |  
|Other liabilities and accrued expenses                                                                                                |  |                    | 26      |   |               |   | 146     |  
|                                                                                                                                      |  |                    |         |   |               |   |         |  
|Net Cash Provided by (Used in) Operating Activities                                                                                   |  |                    | 1,271   |   |               |   | (13,840 | )
|                                                                                                                                      |  |                    |         |   |               |   |         |  
|Cash Flows from Financing Activities:                                                                                                 |  |                    |         |   |               |   |         |  
|Cash distributions paid                                                                                                               |  |                    | (5,603  | ) |               |   | (4,065  | )
|Proceeds from borrowings                                                                                                              |  |                    | 29,500  |   |               |   | 22,000  |  
|Repayments of borrowings                                                                                                              |  |                    | (41,000 | ) |               |   | (9,100  | )
|                                                                                                                                      |  |                    |         |   |               |   |         |  
|Net Cash Provided by (Used in) Financing Activities                                                                                   |  |                    | (17,103 | ) |               |   | 8,835   |  
|                                                                                                                                      |  |                    |         |   |               |   |         |  
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                                                                             |  |                    | (15,832 | ) |               |   | (5,005  | )
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                                                      |  |                    | 151,828 |   |               |   | 53,067  |  
|                                                                                                                                      |  |                    |         |   |               |   |         |  
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                                                            |  | $                  | 135,996 |   |               | $ | 48,062  |  
|                                                                                                                                      |  |                    |         |   |               |   |         |  
|Supplemental disclosure of cash flow information:                                                                                     |  |                    |         |   |               |   |         |  
|Cash paid for interest                                                                                                                |  | $                  | 833     |   |               | $ | 822     |  
|                                                                                                                                      |  |                    |         |   |               |   |         |  

Non-cash financing activities consist of the reinvestment of dividends of $46 and
$0 for the three months ended March 31, 2017 and March 31, 2016, respectively.

See notes to consolidated financial
statements.



6



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SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited)

March 31, 2017

(in thousands, except share/unit amounts)



|                                                        |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|------------------------------------------------------- |  | ----------------------------------- | - | ------------------- | ----- | --- | ---------- | -------- | ---- | --------------- |  |  | --------------- | ----- |  | ------------ | ---------- |  | --------- |  | ---------- | ---- |  | - | ------------ |  |  | - | ------- |  |  | - | ------- | 
|Description                                             |  | Industry                            |   | SpreadaboveIndex(3) |       |     | LiborFloor |          |      | InterestRate(1) |  |  | AcquisitionDate |       |  | MaturityDate |            |  | ParAmount |  |            | Cost |  |   | FairValue    | 
|Bank Debt/Senior Secured Loans  110.8%                 |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|ABB/Con-Cise Optical Group LLC(2)                       |  | Health Care Equipment & Supplies    |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.10            | %     |  |              | 6/14/2016  |  |           |  | 6/15/2023  |      |  | $ | 11,940       |  |  | $ | 11,892  |  |  | $ | 12,074  | 
|Advantage Sales and Marketing, Inc                      |  | Professional Services               |   |                     | L+650 |     |            |          | 1.00 | %               |  |  | 7.50            | %     |  |              | 2/14/2013  |  |           |  | 7/25/2022  |      |  |   | 8,000        |  |  |   | 7,956   |  |  |   | 7,804   | 
|Aegis Toxicology Sciences Corporation                   |  | Health Care Providers & Services    |   |                     | L+850 |     |            |          | 1.00 | %               |  |  | 9.66            | %     |  |              | 2/20/2014  |  |           |  | 8/24/2021  |      |  |   | 4,000        |  |  |   | 3,960   |  |  |   | 3,600   | 
|Alera Group Intermediate Holdings,
Inc.(2).             |  | Insurance                           |   |                     | L+550 |     |            |          | 1.00 | %               |  |  | 6.50            | %     |  |              | 11/28/2016 |  |           |  | 12/30/2022 |      |  |   | 3,456        |  |  |   | 3,423   |  |  |   | 3,422   | 
|American Seafoods Group LLC(2)                          |  | Food Products                       |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.00            | %     |  |              | 8/10/2015  |  |           |  | 8/19/2021  |      |  |   | 4,605        |  |  |   | 4,587   |  |  |   | 4,582   | 
|American Teleconferencing Services, Ltd.
(PGI)(2)       |  | Communications Equipment            |   |                     | L+650 |     |            |          | 1.00 | %               |  |  | 7.50            | %     |  |              | 5/5/2016   |  |           |  | 12/8/2021  |      |  |   | 15,549       |  |  |   | 14,730  |  |  |   | 15,471  | 
|Anesthesia Consulting & Management,
LP(2)               |  | Health Care Providers & Services    |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.04            | %     |  |              | 10/20/2016 |  |           |  | 10/31/2022 |      |  |   | 4,988        |  |  |   | 4,941   |  |  |   | 4,938   | 
|Capstone Logistics Acquisition,
Inc.(2)                 |  | Professional Services               |   |                     | L+450 |     |            |          | 1.00 | %               |  |  | 5.50            | %     |  |              | 10/3/2014  |  |           |  | 10/7/2021  |      |  |   | 8,278        |  |  |   | 8,221   |  |  |   | 8,216   | 
|CIBT Holdings, Inc.(2)                                  |  | Professional Services               |   |                     | L+525 |     |            |          | 1.00 | %               |  |  | 6.40            | %     |  |              | 6/28/2016  |  |           |  | 6/28/2022  |      |  |   | 2,607        |  |  |   | 2,584   |  |  |   | 2,594   | 
|Confie Seguros Holding II Co.(2)                        |  | Insurance                           |   |                     | L+475 |     |            |          | 1.00 | %               |  |  | 5.75            | %     |  |              | 10/13/2016 |  |           |  | 4/19/2022  |      |  |   | 9,975        |  |  |   | 9,882   |  |  |   | 10,039  | 
|CT Technologies Intermediate
Holdings(2)                |  | Health Care Technology              |   |                     | L+425 |     |            |          | 1.00 | %               |  |  | 5.25            | %     |  |              | 12/1/2014  |  |           |  | 12/1/2021  |      |  |   | 3,384        |  |  |   | 3,369   |  |  |   | 3,212   | 
|DB Datacenter Holdings, Inc.(2)                         |  | IT Services                         |   |                     | L+475 |     |            |          | 1.00 | %               |  |  | 5.75            | %     |  |              | 12/28/2016 |  |           |  | 7/13/2021  |      |  |   | 5,000        |  |  |   | 4,926   |  |  |   | 4,925   | 
|Empower Payments Acquisition, Inc.(2)                   |  | Professional Services               |   |                     | L+550 |     |            |          | 1.00 | %               |  |  | 6.65            | %     |  |              | 11/28/2016 |  |           |  | 11/30/2023 |      |  |   | 4,613        |  |  |   | 4,524   |  |  |   | 4,521   | 
|Engineering Solutions & Products, LLC(6)                |  | Aerospace & Defense                 |   |                     | L+600 |     |            |          | 2.00 | %               |  |  | 8.00            | %     |  |              | 11/5/2013  |  |           |  | 5/4/2018   |      |  |   | 174          |  |  |   | 174     |  |  |   | 174     | 
|Engineering Solutions & Products, LLC(6)                |  | Aerospace & Defense                 |   |                     | L+600 |     |            |          | 2.00 | %               |  |  | 8.00            | %     |  |              | 11/5/2013  |  |           |  | 11/5/2018  |      |  |   | 2,343        |  |  |   | 2,343   |  |  |   | 1,827   | 
|Falmouth Group Holdings Corp.
(AMPAC)(2)                |  | Chemicals                           |   |                     | L+675 |     |            |          | 1.00 | %               |  |  | 7.75            | %     |  |              | 12/15/2016 |  |           |  | 12/14/2021 |      |  |   | 9,452        |  |  |   | 9,452   |  |  |   | 9,452   | 
|GenMark Diagnostics, Inc(2)(4)                          |  | Health Care Providers & Services    |   |                     |      |     |            |          |     |                 |  |  | 6.90            | %     |  |              | 4/22/2016  |  |           |  | 1/12/2019  |      |  |   | 9,643        |  |  |   | 9,608   |  |  |   | 9,763   | 
|Global Holdings LLC & Payment Concepts
LLC(2)           |  | Consumer Finance                    |   |                     | L+650 |     |            |          | 1.00 | %               |  |  | 7.50            | %     |  |              | 3/31/2017  |  |           |  | 5/3/2022   |      |  |   | 8,750        |  |  |   | 8,575   |  |  |   | 8,575   | 
|Global Tel*Link Corporation(2)                          |  | Communications Equipment            |   |                     | L+375 |     |            |          | 1.25 | %               |  |  | 5.00            | %     |  |              | 11/6/2015  |  |           |  | 5/23/2020  |      |  |   | 3,417        |  |  |   | 3,097   |  |  |   | 3,416   | 
|Global Tel*Link Corporation                             |  | Communications Equipment            |   |                     | L+775 |     |            |          | 1.25 | %               |  |  | 9.00            | %     |  |              | 5/21/2013  |  |           |  | 11/23/2020 |      |  |   | 3,000        |  |  |   | 2,966   |  |  |   | 2,992   | 
|HC Group Holdings III, Inc.
(Walgreens)(2)              |  | Health Care Providers & Services    |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.00            | %     |  |              | 3/25/2015  |  |           |  | 4/7/2022   |      |  |   | 4,925        |  |  |   | 4,906   |  |  |   | 4,876   | 
|Hostway Corporation(2)                                  |  | Internet Software & Services        |   |                     | L+475 |     |            |          | 1.25 | %               |  |  | 8.00            | %     |  |              | 6/27/2014  |  |           |  | 12/13/2019 |      |  |   | 8,651        |  |  |   | 8,630   |  |  |   | 8,132   | 
|Island Medical Management Holdings,
LLC(2)              |  | Health Care Providers & Services    |   |                     | L+550 |     |            |          | 1.00 | %               |  |  | 6.50            | %     |  |              | 3/31/2017  |  |           |  | 9/1/2022   |      |  |   | 6,872        |  |  |   | 6,803   |  |  |   | 6,803   | 
|Kellermeyer Bergensons Services, LLC
(KBS)(2)           |  | Commercial Services & Supplies      |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.04            | %     |  |              | 10/31/2014 |  |           |  | 10/29/2021 |      |  |   | 4,875        |  |  |   | 4,841   |  |  |   | 4,827   | 
|Lumeris Solutions Company, LLC(2)                       |  | Health Care Technology              |   |                     | L+860 |     |            |          | 0.25 | %               |  |  | 9.58            | %     |  |              | 3/22/2017  |  |           |  | 2/1/2020   |      |  |   | 4,000        |  |  |   | 3,971   |  |  |   | 3,968   | 
|Metamorph US 3, LLC
(Metalogix)(2)                    |  | Software                            |   |                     | L+750 | (7) |            |          | 1.00 | %               |  |  | 8.50            | %     |  |              | 12/1/2014  |  |           |  | 12/1/2020  |      |  |   | 8,019        |  |  |   | 7,888   |  |  |   | 5,132   | 
|MHE Intermediate Holdings, LLC(2)                       |  | Air Freight & Logistics             |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.00            | %     |  |              | 3/8/2017   |  |           |  | 3/10/2024  |      |  |   | 5,083        |  |  |   | 5,033   |  |  |   | 5,033   | 
|Ministry Brands, LLC(2)                                 |  | Software                            |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.00            | %     |  |              | 11/21/2016 |  |           |  | 12/2/2022  |      |  |   | 8,305        |  |  |   | 8,224   |  |  |   | 8,222   | 
|MYI Acquiror Corp. (McLarens Young)(2)                  |  | Insurance                           |   |                     | L+450 |     |            |          | 1.25 | %               |  |  | 5.75            | %     |  |              | 5/21/2014  |  |           |  | 5/28/2019  |      |  |   | 3,356        |  |  |   | 3,341   |  |  |   | 3,323   | 
|MYI Acquiror Ltd. (McLarens
Young)(2)(4)                |  | Insurance                           |   |                     | L+450 |     |            |          | 1.25 | %               |  |  | 5.75            | %     |  |              | 5/21/2014  |  |           |  | 5/28/2019  |      |  |   | 4,282        |  |  |   | 4,262   |  |  |   | 4,240   | 
|nThrive, Inc. (Precyse)(2)                              |  | Health Care Providers & Services    |   |                     | L+550 |     |            |          | 1.00 | %               |  |  | 6.50            | %     |  |              | 4/19/2016  |  |           |  | 10/20/2022 |      |  |   | 5,962        |  |  |   | 5,889   |  |  |   | 5,962   | 
|Pearl Merger Sub LLC (PetVet)(2)                        |  | Health Care Facilities              |   |                     | L+475 |     |            |          | 1.00 | %               |  |  | 5.90            | %     |  |              | 1/29/2015  |  |           |  | 12/17/2020 |      |  |   | 4,399        |  |  |   | 4,339   |  |  |   | 4,355   | 
|Polycom, Inc.(2)                                        |  | Communications Equipment            |   |                     | L+525 |     |            |          | 1.00 | %               |  |  | 6.25            | %     |  |              | 9/29/2016  |  |           |  | 9/27/2023  |      |  |   | 13,813       |  |  |   | 13,288  |  |  |   | 13,813  | 
|PPT Management Holdings, LLC(2)                         |  | Health Care Providers & Services    |   |                     | L+600 |     |            |          | 1.00 | %               |  |  | 7.15            | %     |  |              | 12/15/2016 |  |           |  | 12/16/2022 |      |  |   | 7,980        |  |  |   | 7,903   |  |  |   | 7,900   | 
|Professional DataSolutions, Inc.(2)                     |  | Software                            |   |                     | L+550 |     |            |          | 1.00 | %               |  |  | 6.50            | %     |  |              | 3/23/2017  |  |           |  | 5/20/2022  |      |  |   | 11,525       |  |  |   | 11,352  |  |  |   | 11,352  | 
|PSP Group, LLC (Pet Supplies
Plus)(2)(8)                |  | Specialty Retail                    |   |                     | L+475 |     |            |          | 1.00 | %               |  |  | 5.90            | %     |  |              | 4/2/2015   |  |           |  | 4/6/2021   |      |  |   | 485          |  |  |   | 482     |  |  |   | 484     | 
|QBS Holding Company, Inc. (Quorum)(2)                   |  | Software                            |   |                     | L+475 |     |            |          | 1.00 | %               |  |  | 5.79            | %     |  |              | 8/1/2014   |  |           |  | 8/7/2021   |      |  |   | 6,354        |  |  |   | 6,311   |  |  |   | 6,131   | 
|Richelieu Foods, Inc.(2)                                |  | Food Products                       |   |                     | L+475 |     |            |          | 1.00 | %               |  |  | 5.91            | %     |  |              | 11/21/2014 |  |           |  | 5/21/2020  |      |  |   | 6,423        |  |  |   | 6,364   |  |  |   | 6,423   | 
|Salient Partners, L.P.(2)                               |  | Asset Management                    |   |                     | L+850 |     |            |          | 1.00 | %               |  |  | 9.52            | %     |  |              | 6/10/2015  |  |           |  | 6/9/2021   |      |  |   | 4,101        |  |  |   | 4,039   |  |  |   | 4,039   | 
|Securus Technologies, Inc                               |  | Communications Equipment            |   |                     | L+775 |     |            |          | 1.25 | %               |  |  | 9.00            | %     |  |              | 4/17/2013  |  |           |  | 4/30/2021  |      |  |   | 10,000       |  |  |   | 9,949   |  |  |   | 10,025  | 
|SHO Holding I Corporation (Shoes for
Crews)(2)          |  | Footwear                            |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.00            | %     |  |              | 11/20/2015 |  |           |  | 10/27/2022 |      |  |   | 5,925        |  |  |   | 5,877   |  |  |   | 5,895   | 
|Stratose Intermediate Holdings II,
LLC(2)               |  | Health Care Services                |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.15            | %     |  |              | 1/25/2016  |  |           |  | 1/26/2022  |      |  |   | 4,938        |  |  |   | 4,896   |  |  |   | 4,962   | 
|Suburban Broadband, LLC (Jab Wireless,
Inc.)(2)         |  | Wireless Telecommunication Services |   |                     | L+450 |     |            |          | 1.00 | %               |  |  | 5.54            | %     |  |              | 11/29/2016 |  |           |  | 3/26/2019  |      |  |   | 4,975        |  |  |   | 4,932   |  |  |   | 4,925   | 
|The Edelman Financial Center, LLC(2)                    |  | Diversified Financial Services      |   |                     | L+550 |     |            |          | 1.00 | %               |  |  | 6.51            | %     |  |              | 12/16/2015 |  |           |  | 12/18/2022 |      |  |   | 4,938        |  |  |   | 4,853   |  |  |   | 4,938   | 
|The Hilb Group, LLC & Gencorp Insurance Group,
Inc.(2). |  | Insurance                           |   |                     | L+475 |     |            |          | 1.00 | %               |  |  | 5.90            | %     |  |              | 3/16/2016  |  |           |  | 6/24/2021  |      |  |   | 3,801        |  |  |   | 3,737   |  |  |   | 3,763   | 
|Trident USA Health Services(2)                          |  | Health Care Providers & Services    |   |                     | L+575 |     |            |          | 1.25 | %               |  |  | 7.00            | %     |  |              | 7/29/2013  |  |           |  | 7/31/2019  |      |  |   | 8,768        |  |  |   | 8,734   |  |  |   | 7,935   | 
|TwentyEighty, Inc.                                    |  | Professional Services               |   |                     | L+800 | (9) |            |          | 1.00 | %               |  |  | 9.00            | %     |  |              | 1/31/2017  |  |           |  | 3/31/2020  |      |  |   | 884          |  |  |   | 845     |  |  |   | 884     | 
|TwentyEighty, Inc.                                    |  | Professional Services               |   |                     |      |     |            |          |     |                 |  |  | 8.00            | %(10) |  |              | 1/31/2017  |  |           |  | 3/31/2020  |      |  |   | 1,882        |  |  |   | 1,766   |  |  |   | 1,751   | 
|TwentyEighty, Inc.                                    |  | Professional Services               |   |                     |      |     |            |          |     |                 |  |  | 9.00            | %(11) |  |              | 1/31/2017  |  |           |  | 3/31/2020  |      |  |   | 1,699        |  |  |   | 1,594   |  |  |   | 1,546   | 
|U.S. Acute Care Solutions, LLC(2)                       |  | Health Care Providers & Services    |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.15            | %     |  |              | 12/22/2016 |  |           |  | 5/15/2021  |      |  |   | 6,484        |  |  |   | 6,422   |  |  |   | 6,419   | 
|VT Buyer Acquisition Corp.
(Veritext)(2)                |  | Professional Services               |   |                     | L+475 |     |            |          | 1.00 | %               |  |  | 5.75            | %     |  |              | 2/17/2017  |  |           |  | 1/29/2022  |      |  |   | 4,481        |  |  |   | 4,459   |  |  |   | 4,459   | 
|WIRB-Copernicus Group, Inc.(2)                          |  | Professional Services               |   |                     | L+500 |     |            |          | 1.00 | %               |  |  | 6.15            | %     |  |              | 3/27/2017  |  |           |  | 8/12/2022  |      |  |   | 4,500        |  |  |   | 4,478   |  |  |   | 4,477   | 
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Total Bank
Debt/Senior Secured Loans                    |  |                                     | $ | 301,618             |       |     | $          | 298,591  |     
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 | 
|Common Equity/Equity Interests/Warrants  27.7%         |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   | Shares/Units |  |  |   |         |  |  |   |         | 
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Engineering Solutions & Products,
LLC(6)(12)           |  | Aerospace & Defense                 |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              | 11/5/2013  |  |           |  |            |      |  |   | 133,668      |  |  | $ | 1,367   |  |  | $ | 68      | 
|Essence Group Holdings Corporation (Lumeris) Warrants. |  | Health Care Technology              |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              | 3/22/2017  |  |           |  |            |      |  |   | 52,000       |  |  |   | 16      |  |  |   | 14      | 
|First Lien Loan Program LLC(4)(5)                       |  | Asset Management                    |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              | 2/13/2015  |  |           |  |            |      |  |   |             |  |  |   | 41,187  |  |  |   | 38,791  | 
|Gemino Healthcare Finance, LLC(4)(5)                    |  | Diversified Financial Services      |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              | 9/30/2013  |  |           |  |            |      |  |   | 32,839       |  |  |   | 32,839  |  |  |   | 35,650  | 
|TwentyEighty Investors, LLC.                           |  | Professional Services               |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              | 1/31/2017  |  |           |  |            |      |  |   | 17,214       |  |  |   | 3,167   |  |  |   |        | 
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Total Common Equity/Equity Interests/Warrants           |  |                                     | $ | 78,576              |       |     | $          | 74,523   |     
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 | 
|Total Investments(13)  138.5%                          |  |                                     | $ | 380,194             |       |     | $          | 373,114  |     
|Cash Equivalents  46.3%                                |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   | Par Amount   |  |  |   |         |  |  |   |         | 
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|U.S. Treasury Bill                                      |  | Government                          |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              | 3/30/2017  |  |           |  | 4/27/2017  |      |  |   | 125,000      |  |  | $ | 124,940 |  |  | $ | 124,940 | 
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Total Investments & Cash Equivalents 
184.8%           |  |                                     | $ | 505,134             |       |     | $          | 498,054  |     
|Liabilities in Excess of Other Assets
(84.8%)          |  |                                     |   |                     |       |     |            | (228,601 | )   
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Net Assets  100.0%                                     |  |                                     |   |                     |       |     | $          | 269,453  |     
|                                                        |  |                                     |   |                     |       |     |            |          |      |                 |  |  |                 |       |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 

See notes to consolidated financial statements.



7



---

##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

March 31, 2017

(in thousands)



|(1) | Floating rate debt investments typically bear interest at a rate determined by reference to either the London Interbank Offered Rate (LIBOR or
L) index rate or the prime index rate (PRIME or P), and which typically reset monthly, quarterly or semi-annually. For each debt investment we have provided the current interest rate in effect as of March 31, 2017.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Indicates an investment that is wholly or partially held by Solar Senior Capital Ltd. through its wholly-owned financing subsidiary SUNS SPV LLC. Such investments are
pledged as collateral under the Senior Secured Revolving Credit Facility (see Note 7 to the consolidated financial statements) and are not generally available to creditors, if any, of Solar Senior Capital Ltd. The respective par amount for the two
investments partially held through SUNS SPV LLC is $4,821 for Genmark Diagnostics, Inc. and $6,525 for Professional DataSolutions, Inc. The par balance in excess of this stated amount is held directly by Solar Senior Capital Ltd.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR or PRIME rate. These instruments are typically subject to
a LIBOR or PRIME rate floor.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Indicates assets that the Company believes may not represent qualifying assets under Section 55(a) of the Investment Company Act of 1940 (1940
Act), as amended. If we fail to invest a sufficient portion of our assets in qualifying assets, we could be prevented from making follow-on investments in existing portfolio companies or could be
required to dispose of investments at inappropriate times in order to comply with the 1940 Act. As of March 31, 2017, on a fair value basis, non-qualifying assets in the portfolio represented 17.3% of the
total assets of the Company.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Denotes investments in which we are deemed to exercise a controlling influence over the management or policies of a company, as defined in the 1940 Act, due to
beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the investment. Transactions during the three months ended March 31, 2017 in these controlled investments
are as follows:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                               |  |                                |        |  |                |   |   |                 |  |   |                     |  |  |                      |   |  |                            |   |       |  |  |   |        | 
|------------------------------ |  | ------------------------------ | ------ |  | -------------- | - | - | --------------- |  | - | ------------------- |  |  | -------------------- | - |  | -------------------------- | - | ----- |  |  | - | ------ | 
|Name of Issuer                 |  | Fair Value atDecember 31, 2016 |        |  | GrossAdditions |   |   | GrossReductions |  |   | Realized Gain(Loss) |  |  | Dividend/OtherIncome |   |  | Fair Value atMarch 31,2017 |  
|First Lien Loan Program LLC    |  | $                              | 38,810 |  |                | $ |  |                 |  | $ |                    |  |  | $                    |  |  |                            | $ | 1,020 |  |  | $ | 38,791 | 
|Gemino Healthcare Finance, LLC |  |                                | 35,500 |  |                |   |  |                 |  |   |                    |  |  |                      |  |  |                            |   | 924   |  |  |   | 35,650 | 
|                               |  |                                |        |  |                |   |   |                 |  |   |                     |  |  |                      |   |  |                            |   |       |  |  |   |        | 
|                               |  | $                              | 74,310 |  |                | $ |  |                 |  | $ |                    |  |  | $                    |  |  |                            | $ | 1,944 |  |  | $ | 74,441 | 
|                               |  |                                |        |  |                |   |   |                 |  |   |                     |  |  |                      |   |  |                            |   |       |  |  |   |        | 



|(6) | Denotes investments in which we are an Affiliated Person but not exercising a controlling influence, as defined in the 1940 Act, due to beneficially owning,
either directly or through one or more controlled companies, more than 5% but less than 25% of the outstanding voting securities of the investment. Transactions during the three months ended March 31, 2017 in these affiliated investments are as
follows:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                         |  |                               |       |  |                |   |     |                 |  |   |                     |  |  |                |   |  |                            |   |    |  |  |   |       | 
|-------------------------------------------------------- |  | ----------------------------- | ----- |  | -------------- | - | --- | --------------- |  | - | ------------------- |  |  | -------------- | - |  | -------------------------- | - | -- |  |  | - | ----- | 
|Name of Issuer                                           |  | Fair Value atDecember 31,2016 |       |  | GrossAdditions |   |     | GrossReductions |  |   | Realized Gain(Loss) |  |  | InterestIncome |   |  | Fair Value atMarch 31,2017 |  
|Engineering Solutions & Products, LLC (1st lien)         |  | $                             |      |  |                | $ | 781 |                 |  | $ | 607                 |  |  | $              |  |  |                            | $ | 2  |  |  | $ | 174   | 
|Engineering Solutions & Products, LLC (2nd lien)         |  |                               | 1,757 |  |                |   |    |                 |  |   |                    |  |  |                |  |  |                            |   | 47 |  |  |   | 1,827 | 
|Engineering Solutions & Products, LLC (equity interests) |  |                               | 68    |  |                |   |    |                 |  |   |                    |  |  |                |  |  |                            |   |   |  |  |   | 68    | 
|                                                         |  |                               |       |  |                |   |     |                 |  |   |                     |  |  |                |   |  |                            |   |    |  |  |   |       | 
|                                                         |  | $                             | 1,825 |  |                | $ | 781 |                 |  | $ | 607                 |  |  | $              |  |  |                            | $ | 49 |  |  | $ | 2,069 | 
|                                                         |  |                               |       |  |                |   |     |                 |  |   |                     |  |  |                |   |  |                            |   |    |  |  |   |       | 



|(7) | Spread is 5.50% Cash / 2.00% PIK.
|--- | ---------------------------------

|(8) | PSP Group, LLC, PSP Service Newco, Inc., PSP Subco, LLC, PSP Stores, LLC, and PSP Distribution, LLC are co-borrowers.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(9) | Spread is 3.50% Cash / 4.50% PIK.
|--- | ---------------------------------

|(10) | Coupon is 1.00% Cash / 7.00% PIK.
|---- | ---------------------------------

|(11) | Coupon is 0.25% Cash / 8.75% PIK.
|---- | ---------------------------------

|(12) | Our equity investment in Engineering Solutions & Products, LLC is held through ESP SSC Corp., a taxable consolidated subsidiary.
|---- | --------------------------------------------------------------------------------------------------------------------------------

|(13) | Aggregate net unrealized depreciation for federal income tax purposes is $10,923; aggregate gross unrealized appreciation and depreciation for federal tax purposes is
$3,534 and $14,457, respectively, based on a tax cost of $384,037.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Non-income producing security.
|- | ------------------------------

| | Investment contains a payment-in-kind (PIK) feature.
|-- | ------------------------------------------------------



See notes to consolidated financial
statements.



8



---

##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

March 31, 2017



|                                    |  |                                                                  |       |  
|----------------------------------- |  | ---------------------------------------------------------------- | ----- | -
|Industry Classification             |  | Percentage of TotalInvestments (atfair value) as ofMarch 31,2017 |      
|Health Care Providers & Services    |  |                                                                  | 16.9  | %
|Communications Equipment            |  |                                                                  | 12.3  | %
|Asset Management                    |  |                                                                  | 11.6  | %
|Diversified Financial Services      |  |                                                                  | 10.9  | %
|Professional Services               |  |                                                                  | 9.7   | %
|Software                            |  |                                                                  | 8.3   | %
|Insurance                           |  |                                                                  | 6.6   | %
|Health Care Equipment & Supplies    |  |                                                                  | 3.2   | %
|Food Products                       |  |                                                                  | 2.9   | %
|Chemicals                           |  |                                                                  | 2.5   | %
|Consumer Finance                    |  |                                                                  | 2.3   | %
|Internet Software & Services        |  |                                                                  | 2.2   | %
|Health Care Technology              |  |                                                                  | 1.9   | %
|Footwear                            |  |                                                                  | 1.6   | %
|Air Freight & Logistics             |  |                                                                  | 1.3   | %
|Wireless Telecommunication Services |  |                                                                  | 1.3   | %
|IT Services                         |  |                                                                  | 1.3   | %
|Commercial Services & Supplies      |  |                                                                  | 1.3   | %
|Health Care Facilities              |  |                                                                  | 1.2   | %
|Aerospace & Defense                 |  |                                                                  | 0.6   | %
|Specialty Retail                    |  |                                                                  | 0.1   | %
|                                    |  |                                                                  |       |  
|Total Investments                   |  |                                                                  | 100.0 | %
|                                    |  |                                                                  |       |  

See notes to consolidated financial statements.



9



---

##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2016

(in thousands, except share/unit amounts)



|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|------------------------------------------------------ |  | ----------------------------------- | - | ------------------- | ----- |  | ---------- | -------- | ---- | --------------- |  |  | --------------- | - |  | ------------ | ---------- |  | --------- |  | ---------- | ---- |  | - | ------------ |  |  | - | ------- |  |  | - | ------- | 
|Description                                            |  | Industry                            |   | SpreadaboveIndex(3) |       |  | LiborFloor |          |      | InterestRate(1) |  |  | AcquisitionDate |   |  | MaturityDate |            |  | ParAmount |  |            | Cost |  |   | FairValue    | 
|Bank Debt/Senior Secured Loans  108.2%                |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|ABB/Con-Cise Optical Group LLC(2)                      |  | Health Care Equipment & Supplies    |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 6/14/2016  |  |           |  | 6/15/2023  |      |  | $ | 11,970       |  |  | $ | 11,920  |  |  | $ | 12,135  | 
|Advantage Sales and Marketing, Inc.                    |  | Professional Services               |   |                     | L+650 |  |            |          | 1.00 | %               |  |  | 7.50            | % |  |              | 2/14/2013  |  |           |  | 7/25/2022  |      |  |   | 8,000        |  |  |   | 7,955   |  |  |   | 7,835   | 
|Aegis Toxicology Sciences Corporation                  |  | Health Care Providers & Services    |   |                     | L+850 |  |            |          | 1.00 | %               |  |  | 9.50            | % |  |              | 2/20/2014  |  |           |  | 8/24/2021  |      |  |   | 4,000        |  |  |   | 3,958   |  |  |   | 3,740   | 
|Alera Group Intermediate Holdings,
Inc.(2)             |  | Insurance                           |   |                     | L+550 |  |            |          | 1.00 | %               |  |  | 6.50            | % |  |              | 11/28/2016 |  |           |  | 12/30/2022 |      |  |   | 8,640        |  |  |   | 8,554   |  |  |   | 8,554   | 
|ALG B.V. (Apple Leisure)(2)(4)                         |  | Hotels, Restaurants & Leisure       |   |                     | L+575 |  |            |          | 1.25 | %               |  |  | 7.00            | % |  |              | 2/28/2013  |  |           |  | 2/28/2019  |      |  |   | 2,692        |  |  |   | 2,681   |  |  |   | 2,692   | 
|ALG USA Holdings, LLC (Apple
Leisure)(2)               |  | Hotels, Restaurants & Leisure       |   |                     | L+575 |  |            |          | 1.25 | %               |  |  | 7.00            | % |  |              | 2/28/2013  |  |           |  | 2/28/2019  |      |  |   | 3,568        |  |  |   | 3,553   |  |  |   | 3,568   | 
|American Seafoods Group LLC(2)                         |  | Food Products                       |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 8/10/2015  |  |           |  | 8/19/2021  |      |  |   | 4,817        |  |  |   | 4,798   |  |  |   | 4,781   | 
|American Teleconferencing Services, Ltd.
(PGI)(2)      |  | Communications Equipment            |   |                     | L+650 |  |            |          | 1.00 | %               |  |  | 7.50            | % |  |              | 5/5/2016   |  |           |  | 12/8/2021  |      |  |   | 8,662        |  |  |   | 7,871   |  |  |   | 8,423   | 
|Anesthesia Consulting & Management,
LP(2)              |  | Health Care Providers & Services    |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 10/20/2016 |  |           |  | 10/31/2022 |      |  |   | 5,000        |  |  |   | 4,951   |  |  |   | 4,950   | 
|Asurion, LLC                                           |  | Insurance                           |   |                     | L+750 |  |            |          | 1.00 | %               |  |  | 8.50            | % |  |              | 2/27/2014  |  |           |  | 3/3/2021   |      |  |   | 840          |  |  |   | 785     |  |  |   | 855     | 
|Capstone Logistics Acquisition,
Inc.(2)                |  | Professional Services               |   |                     | L+450 |  |            |          | 1.00 | %               |  |  | 5.50            | % |  |              | 10/3/2014  |  |           |  | 10/7/2021  |      |  |   | 8,278        |  |  |   | 8,218   |  |  |   | 8,196   | 
|CIBT Holdings, Inc.(2)                                 |  | Professional Services               |   |                     | L+525 |  |            |          | 1.00 | %               |  |  | 6.25            | % |  |              | 6/28/2016  |  |           |  | 6/28/2022  |      |  |   | 2,620        |  |  |   | 2,596   |  |  |   | 2,594   | 
|Confie Seguros Holding II Co.(2)                       |  | Insurance                           |   |                     | L+475 |  |            |          | 1.00 | %               |  |  | 5.75            | % |  |              | 10/13/2016 |  |           |  | 4/19/2022  |      |  |   | 10,000       |  |  |   | 9,903   |  |  |   | 10,067  | 
|ConvergeOne Holdings Corp.(2)                          |  | Communications Equipment            |   |                     | L+538 |  |            |          | 1.00 | %               |  |  | 6.38            | % |  |              | 6/16/2014  |  |           |  | 6/17/2020  |      |  |   | 4,830        |  |  |   | 4,800   |  |  |   | 4,806   | 
|CT Technologies Intermediate
Holdings(2)               |  | Health Care Technology              |   |                     | L+425 |  |            |          | 1.00 | %               |  |  | 5.25            | % |  |              | 12/1/2014  |  |           |  | 12/1/2021  |      |  |   | 3,393        |  |  |   | 3,377   |  |  |   | 3,253   | 
|DB Datacenter Holdings, Inc.(2)                        |  | IT Services                         |   |                     | L+475 |  |            |          | 1.00 | %               |  |  | 5.75            | % |  |              | 12/28/2016 |  |           |  | 7/13/2021  |      |  |   | 5,000        |  |  |   | 4,925   |  |  |   | 4,925   | 
|Empower Payments Acquisition, Inc.(2)                  |  | Professional Services               |   |                     | L+550 |  |            |          | 1.00 | %               |  |  | 6.50            | % |  |              | 11/28/2016 |  |           |  | 11/30/2023 |      |  |   | 4,625        |  |  |   | 4,533   |  |  |   | 4,532   | 
|Engineering Solutions & Products, LLC(6)               |  | Aerospace & Defense                 |   |                     | L+600 |  |            |          | 2.00 | %               |  |  | 8.00            | % |  |              | 11/5/2013  |  |           |  | 11/5/2018  |      |  |   | 2,343        |  |  |   | 2,343   |  |  |   | 1,757   | 
|Epic Health Services, Inc.(2)                          |  | Health Care Providers & Services    |   |                     | L+475 |  |            |          | 1.00 | %               |  |  | 5.75            | % |  |              | 2/20/2015  |  |           |  | 2/17/2021  |      |  |   | 4,798        |  |  |   | 4,770   |  |  |   | 4,798   | 
|Falmouth Group Holdings Corp.
(AMPAC)(2)               |  | Chemicals                           |   |                     | L+675 |  |            |          | 1.00 | %               |  |  | 7.75            | % |  |              | 12/15/2016 |  |           |  | 12/14/2021 |      |  |   | 9,476        |  |  |   | 9,476   |  |  |   | 9,476   | 
|GenMark Diagnostics, Inc(2)(4)                         |  | Health Care Providers & Services    |   |                     |      |  |            |          |     |                 |  |  | 6.90            | % |  |              | 4/22/2016  |  |           |  | 1/12/2019  |      |  |   | 9,643        |  |  |   | 9,538   |  |  |   | 9,739   | 
|Global Tel*Link Corporation(2)                         |  | Communications Equipment            |   |                     | L+375 |  |            |          | 1.25 | %               |  |  | 5.00            | % |  |              | 11/6/2015  |  |           |  | 5/23/2020  |      |  |   | 3,426        |  |  |   | 3,083   |  |  |   | 3,418   | 
|Global Tel*Link Corporation                            |  | Communications Equipment            |   |                     | L+775 |  |            |          | 1.25 | %               |  |  | 9.00            | % |  |              | 5/21/2013  |  |           |  | 11/23/2020 |      |  |   | 3,000        |  |  |   | 2,964   |  |  |   | 2,921   | 
|HC Group Holdings III, Inc.
(Walgreens)(2)             |  | Health Care Providers & Services    |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 3/25/2015  |  |           |  | 4/7/2022   |      |  |   | 4,938        |  |  |   | 4,918   |  |  |   | 4,765   | 
|Hostway Corporation(2)                                 |  | Internet Software & Services        |   |                     | L+475 |  |            |          | 1.25 | %               |  |  | 8.00            | % |  |              | 6/27/2014  |  |           |  | 12/13/2019 |      |  |   | 8,776        |  |  |   | 8,753   |  |  |   | 8,162   | 
|Kellermeyer Bergensons Services, LLC
(KBS)(2)          |  | Commercial Services & Supplies      |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 10/31/2014 |  |           |  | 10/29/2021 |      |  |   | 4,875        |  |  |   | 4,840   |  |  |   | 4,778   | 
|Lumeris Solutions Company, LLC(2)                      |  | Health Care Technology              |   |                     |      |  |            |          |     |                 |  |  | 9.42            | % |  |              | 4/22/2016  |  |           |  | 12/27/2017 |      |  |   | 2,074        |  |  |   | 2,115   |  |  |   | 2,095   | 
|Material Handling Services, LLC
(TFS)(2)               |  | Air Freight & Logistics             |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 3/3/2014   |  |           |  | 3/26/2020  |      |  |   | 11,056       |  |  |   | 10,991  |  |  |   | 10,946  | 
|Mediware Information Systems, Inc.(2)                  |  | Health Care Technology              |   |                     | L+475 |  |            |          | 1.00 | %               |  |  | 5.75            | % |  |              | 9/26/2016  |  |           |  | 9/28/2023  |      |  |   | 4,988        |  |  |   | 4,939   |  |  |   | 4,988   | 
|Metamorph US 3, LLC (Metalogix)(2)                     |  | Software                            |   |                     | L+650 |  |            |          | 1.00 | %               |  |  | 7.50            | % |  |              | 12/1/2014  |  |           |  | 12/1/2020  |      |  |   | 8,000        |  |  |   | 7,860   |  |  |   | 5,720   | 
|Ministry Brands, LLC(2)                                |  | Software                            |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 11/21/2016 |  |           |  | 12/2/2022  |      |  |   | 5,493        |  |  |   | 5,438   |  |  |   | 5,438   | 
|MYI Acquiror Corp. (McLarens Young)(2)                 |  | Insurance                           |   |                     | L+450 |  |            |          | 1.25 | %               |  |  | 5.75            | % |  |              | 5/21/2014  |  |           |  | 5/28/2019  |      |  |   | 3,356        |  |  |   | 3,339   |  |  |   | 3,298   | 
|MYI Acquiror Ltd. (McLarens
Young)(2)(4)               |  | Insurance                           |   |                     | L+450 |  |            |          | 1.25 | %               |  |  | 5.75            | % |  |              | 5/21/2014  |  |           |  | 5/28/2019  |      |  |   | 4,282        |  |  |   | 4,260   |  |  |   | 4,208   | 
|nThrive, Inc. (Precyse)(2)                             |  | Health Care Providers & Services    |   |                     | L+550 |  |            |          | 1.00 | %               |  |  | 6.50            | % |  |              | 4/19/2016  |  |           |  | 10/20/2022 |      |  |   | 5,977        |  |  |   | 5,901   |  |  |   | 6,067   | 
|Pearl Merger Sub LLC (PetVet)(2)                       |  | Health Care Facilities              |   |                     | L+475 |  |            |          | 1.00 | %               |  |  | 5.75            | % |  |              | 1/29/2015  |  |           |  | 12/17/2020 |      |  |   | 4,410        |  |  |   | 4,347   |  |  |   | 4,360   | 
|Polycom, Inc.(2)                                       |  | Communications Equipment            |   |                     | L+650 |  |            |          | 1.00 | %               |  |  | 7.50            | % |  |              | 9/29/2016  |  |           |  | 9/27/2023  |      |  |   | 14,506       |  |  |   | 13,940  |  |  |   | 14,434  | 
|PPT Management Holdings, LLC(2)                        |  | Health Care Providers & Services    |   |                     | L+600 |  |            |          | 1.00 | %               |  |  | 7.00            | % |  |              | 12/15/2016 |  |           |  | 12/16/2022 |      |  |   | 8,000        |  |  |   | 7,920   |  |  |   | 7,920   | 
|PSP Group, LLC (Pet Supplies
Plus)(2)(7)               |  | Specialty Retail                    |   |                     | L+475 |  |            |          | 1.00 | %               |  |  | 5.75            | % |  |              | 4/2/2015   |  |           |  | 4/6/2021   |      |  |   | 487          |  |  |   | 483     |  |  |   | 484     | 
|QBS Holding Company, Inc. (Quorum)(2)                  |  | Software                            |   |                     | L+475 |  |            |          | 1.00 | %               |  |  | 5.75            | % |  |              | 8/1/2014   |  |           |  | 8/7/2021   |      |  |   | 6,370        |  |  |   | 6,325   |  |  |   | 6,115   | 
|Richelieu Foods, Inc.(2)                               |  | Food Products                       |   |                     | L+475 |  |            |          | 1.00 | %               |  |  | 5.75            | % |  |              | 11/21/2014 |  |           |  | 5/21/2020  |      |  |   | 6,510        |  |  |   | 6,446   |  |  |   | 6,510   | 
|Salient Partners, L.P.(2)                              |  | Asset Management                    |   |                     | L+850 |  |            |          | 1.00 | %               |  |  | 9.50            | % |  |              | 6/10/2015  |  |           |  | 6/9/2021   |      |  |   | 4,217        |  |  |   | 4,150   |  |  |   | 4,111   | 
|Securus Technologies, Inc.                             |  | Communications Equipment            |   |                     | L+775 |  |            |          | 1.25 | %               |  |  | 9.00            | % |  |              | 4/17/2013  |  |           |  | 4/30/2021  |      |  |   | 10,000       |  |  |   | 9,946   |  |  |   | 9,759   | 
|SHO Holding I Corporation (Shoes for
Crews)(2)         |  | Footwear                            |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 11/20/2015 |  |           |  | 10/27/2022 |      |  |   | 5,940        |  |  |   | 5,890   |  |  |   | 5,940   | 
|Strategic Partners Acquisition
Corp.(2)                |  | Textiles, Apparel & Luxury Goods    |   |                     | L+525 |  |            |          | 1.00 | %               |  |  | 6.25            | % |  |              | 6/24/2016  |  |           |  | 6/30/2023  |      |  |   | 1,995        |  |  |   | 1,976   |  |  |   | 2,015   | 
|Stratose Intermediate Holdings II,
LLC(2)              |  | Health Care Services                |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 1/25/2016  |  |           |  | 1/26/2022  |      |  |   | 4,950        |  |  |   | 4,907   |  |  |   | 4,962   | 
|Suburban Broadband, LLC (Jab Wireless,
Inc.)(2)        |  | Wireless Telecommunication Services |   |                     | L+450 |  |            |          | 1.00 | %               |  |  | 5.50            | % |  |              | 11/29/2016 |  |           |  | 3/26/2019  |      |  |   | 5,000        |  |  |   | 4,952   |  |  |   | 4,950   | 
|The Edelman Financial Center, LLC(2)                   |  | Diversified Financial Services      |   |                     | L+550 |  |            |          | 1.00 | %               |  |  | 6.50            | % |  |              | 12/16/2015 |  |           |  | 12/18/2022 |      |  |   | 4,950        |  |  |   | 4,862   |  |  |   | 4,950   | 
|The Hilb Group, LLC & Gencorp Insurance Group,
Inc.(2) |  | Insurance                           |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 3/16/2016  |  |           |  | 6/24/2021  |      |  |   | 3,814        |  |  |   | 3,747   |  |  |   | 3,776   | 
|Trident USA Health Services(2)                         |  | Health Care Providers & Services    |   |                     | L+575 |  |            |          | 1.25 | %               |  |  | 7.00            | % |  |              | 7/29/2013  |  |           |  | 7/31/2019  |      |  |   | 8,793        |  |  |   | 8,755   |  |  |   | 8,001   | 
|TwentyEighty, Inc. (fka Miller
Heiman)(2)*             |  | Professional Services               |   |                     | L+600 |  |            |          | 1.00 | %               |  |  | 7.00            | % |  |              | 9/30/2013  |  |           |  | 9/30/2019  |      |  |   | 6,991        |  |  |   | 6,950   |  |  |   | 3,495   | 
|U.S. Acute Care Solutions, LLC(2)                      |  | Health Care Providers & Services    |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 12/22/2016 |  |           |  | 5/15/2021  |      |  |   | 6,500        |  |  |   | 6,435   |  |  |   | 6,435   | 
|VT Buyer Acquisition Corp.
(Veritext)(2)               |  | Professional Services               |   |                     | L+500 |  |            |          | 1.00 | %               |  |  | 6.00            | % |  |              | 1/29/2016  |  |           |  | 1/29/2022  |      |  |   | 4,481        |  |  |   | 4,443   |  |  |   | 4,459   | 
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Total Bank
Debt/Senior Secured Loans                   |  |                                     | $ | 297,380             |       |  | $          | 291,156  |     
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Common Equity/Equity Interests  27.6%                 |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   | Shares/Units |  |  |   |         |  |  |   |         | 
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Engineering Solutions & Products,
LLC(6)(8)           |  | Aerospace & Defense                 |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              | 11/5/2013  |  |           |  |            |      |  |   | 133,668      |  |  | $ | 1,367   |  |  | $ | 68      | 
|First Lien Loan Program LLC(4)(5)                      |  | Asset Management                    |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              | 2/13/2015  |  |           |  |            |      |  |   |             |  |  |   | 41,187  |  |  |   | 38,810  | 
|Gemino Healthcare Finance, LLC(4)(5)                   |  | Diversified Financial Services      |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              | 9/30/2013  |  |           |  |            |      |  |   | 32,839       |  |  |   | 32,839  |  |  |   | 35,500  | 
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Total Common Equity/Equity Interests                   |  |                                     | $ | 75,393              |       |  | $          | 74,378   |     
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                
|Total Investments(9)  135.8%                          |  |                                     | $ | 372,773             |       |  | $          | 365,534  |     
|Cash Equivalents  52.0%                               |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   | Par Amount   |  |  |   |         |  |  |   |         | 
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|U.S. Treasury Bill                                     |  | Government                          |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              | 12/29/2016 |  |           |  | 2/2/2017   |      |  |   | 140,000      |  |  | $ | 139,952 |  |  | $ | 139,952 | 
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Total Investments & Cash Equivalents 
187.8%          |  |                                     | $ | 512,725             |       |  | $          | 505,486  |     
|Liabilities in Excess of Other Assets
(87.8%)         |  |                                     |   |                     |       |  |            | (236,341 | )   
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 
|Net Assets  100.0%                                    |  |                                     |   |                     |       |  | $          | 269,145  |     
|                                                       |  |                                     |   |                     |       |  |            |          |      |                 |  |  |                 |   |  |              |            |  |           |  |            |      |  |   |              |  |  |   |         |  |  |   |         | 

See notes to consolidated financial statements.



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SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

December 31, 2016

(in thousands)



|(1) | Floating rate debt investments typically bear interest at a rate determined by reference to either the London Interbank Offered Rate (LIBOR or
L) index rate or the prime index rate (PRIME or P), and which typically reset monthly, quarterly or semi-annually. For each debt investment we have provided the current interest rate in effect as of December 31, 2016.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Indicates an investment that is wholly or partially held by Solar Senior Capital Ltd. through its wholly-owned financing subsidiary SUNS SPV LLC. Such investments are
pledged as collateral under the Senior Secured Revolving Credit Facility (see Note 7 to the consolidated financial statements) and are not generally available to creditors, if any, of Solar Senior Capital Ltd. The respective par amount for the
investment that is partially held through SUNS SPV LLC is $4,821 for Genmark Diagnostics, Inc. The par balance in excess of this stated amount is held directly by Solar Senior Capital Ltd.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR or PRIME rate. These instruments are typically subject to
a LIBOR or PRIME rate floor.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Indicates assets that the Company believes may not represent qualifying assets under Section 55(a) of the Investment Company Act of 1940 (1940
Act), as amended. If we fail to invest a sufficient portion of our assets in qualifying assets, we could be prevented from making follow-on investments in existing portfolio companies or could be
required to dispose of investments at inappropriate times in order to comply with the 1940 Act. As of December 31, 2016, on a fair value basis, non-qualifying assets in the portfolio represented 17.4% of
the total assets of the Company.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Denotes investments in which we are deemed to exercise a controlling influence over the management or policies of a company, as defined in the 1940 Act, due to
beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the investment. Transactions during the year ended December 31, 2016 in these controlled investments are as
follows:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                               |  |                                |        |  |                |   |        |                 |  |   |                     |  |  |                              |   |  |                               |   |       |  |  |   |        | 
|------------------------------ |  | ------------------------------ | ------ |  | -------------- | - | ------ | --------------- |  | - | ------------------- |  |  | ---------------------------- | - |  | ----------------------------- | - | ----- |  |  | - | ------ | 
|Name of Issuer                 |  | Fair Value atDecember 31, 2015 |        |  | GrossAdditions |   |        | GrossReductions |  |   | Realized Gain(Loss) |  |  | Dividend/Other        Income |   |  | Fair Value atDecember 31,2016 |  
|First Lien Loan Program LLC    |  | $                              | 27,593 |  |                | $ | 11,603 |                 |  | $ |                    |  |  | $                            |  |  |                               | $ | 3,264 |  |  | $ | 38,810 | 
|Gemino Healthcare Finance, LLC |  |                                | 34,000 |  |                |   |       |                 |  |   |                    |  |  |                              |  |  |                               |   | 3,878 |  |  |   | 35,500 | 
|                               |  |                                |        |  |                |   |        |                 |  |   |                     |  |  |                              |   |  |                               |   |       |  |  |   |        | 
|                               |  | $                              | 61,593 |  |                | $ | 11,603 |                 |  | $ |                    |  |  | $                            |  |  |                               | $ | 7,142 |  |  | $ | 74,310 | 
|                               |  |                                |        |  |                |   |        |                 |  |   |                     |  |  |                              |   |  |                               |   |       |  |  |   |        | 



|(6) | Denotes investments in which we are an Affiliated Person but not exercising a controlling influence, as defined in the 1940 Act, due to beneficially owning,
either directly or through one or more controlled companies, more than 5% but less than 25% of the outstanding voting securities of the investment. Transactions during the year ended December 31, 2016 in these affiliated investments are as
follows:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                        |  |                                |       |  |                |   |     |                 |  |   |                     |  |  |                |   |  |                               |   |     |  |  |   |       | 
|------------------------------------------------------- |  | ------------------------------ | ----- |  | -------------- | - | --- | --------------- |  | - | ------------------- |  |  | -------------- | - |  | ----------------------------- | - | --- |  |  | - | ----- | 
|Name of Issuer                                          |  | Fair Value atDecember 31, 2015 |       |  | GrossAdditions |   |     | GrossReductions |  |   | Realized Gain(Loss) |  |  | InterestIncome |   |  | Fair Value atDecember 31,2016 |  
|Engineering Solutions & Products, LLC(1st
lien)         |  | $                              | 106   |  |                | $ | 376 |                 |  | $ | 482                 |  |  | $              |  |  |                               | $ | 11  |  |  | $ |      | 
|Engineering Solutions & Products, LLC(2nd
lien)         |  |                                | 2,249 |  |                |   |    |                 |  |   |                    |  |  |                |  |  |                               |   | 190 |  |  |   | 1,757 | 
|Engineering Solutions & Products, LLC(equity interests) |  |                                | 68    |  |                |   |    |                 |  |   |                    |  |  |                |  |  |                               |   |    |  |  |   | 68    | 
|                                                        |  |                                |       |  |                |   |     |                 |  |   |                     |  |  |                |   |  |                               |   |     |  |  |   |       | 
|                                                        |  | $                              | 2,423 |  |                | $ | 376 |                 |  | $ | 482                 |  |  | $              |  |  |                               | $ | 201 |  |  | $ | 1,825 | 
|                                                        |  |                                |       |  |                |   |     |                 |  |   |                     |  |  |                |   |  |                               |   |     |  |  |   |       | 



|(7) | PSP Group, LLC, PSP Service Newco, Inc., PSP Subco, LLC, PSP Stores, LLC, and PSP Distribution, LLC are co-borrowers.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(8) | Our equity investment in Engineering Solutions & Products, LLC is held through ESP SSC Corp., a taxable consolidated subsidiary.
|--- | --------------------------------------------------------------------------------------------------------------------------------

|(9) | Aggregate net unrealized depreciation for federal income tax purposes is $10,676; aggregate gross unrealized appreciation and depreciation for federal tax purposes is
$3,649 and $14,325, respectively, based on a tax cost of $376,210.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|* | Investment is on non-accrual status.
|- | ------------------------------------

| | Non-income producing security.
|- | ------------------------------



See notes to consolidated financial statements.



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SOLAR SENIOR CAPITAL LTD.

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

December 31, 2016





|                                    |  |                                                                     |       |  
|----------------------------------- |  | ------------------------------------------------------------------- | ----- | -
|Industry Classification             |  | Percentage of TotalInvestments (atfair value) as
ofDecember 31,2016 |      
|Health Care Providers & Services    |  |                                                                     | 16.8  | %
|Communications Equipment            |  |                                                                     | 12.0  | %
|Asset Management                    |  |                                                                     | 11.7  | %
|Diversified Financial Services      |  |                                                                     | 11.1  | %
|Professional Services               |  |                                                                     | 8.5   | %
|Insurance                           |  |                                                                     | 8.4   | %
|Software                            |  |                                                                     | 4.7   | %
|Health Care Equipment & Supplies    |  |                                                                     | 3.3   | %
|Food Products                       |  |                                                                     | 3.1   | %
|Air Freight & Logistics             |  |                                                                     | 3.0   | %
|Health Care Technology              |  |                                                                     | 2.8   | %
|Chemicals                           |  |                                                                     | 2.6   | %
|Internet Software & Services        |  |                                                                     | 2.2   | %
|Hotels, Restaurants & Leisure       |  |                                                                     | 1.7   | %
|Footwear                            |  |                                                                     | 1.6   | %
|Wireless Telecommunication Services |  |                                                                     | 1.4   | %
|IT Services                         |  |                                                                     | 1.4   | %
|Commercial Services & Supplies      |  |                                                                     | 1.3   | %
|Health Care Facilities              |  |                                                                     | 1.2   | %
|Textile, Apparel & Luxury Goods     |  |                                                                     | 0.6   | %
|Aerospace & Defense                 |  |                                                                     | 0.5   | %
|Specialty Retail                    |  |                                                                     | 0.1   | %
|                                    |  |                                                                     |       |  
|Total Investments                   |  |                                                                     | 100.0 | %
|                                    |  |                                                                     |       |  

See notes to consolidated financial statements.



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

March 31, 2017

(in thousands, except share amounts)

Note 1. Organization

Solar Senior Capital Ltd. (Solar Senior, the Company, SUNS, we, us, or
our), a Maryland corporation formed on December 16, 2010, is a closed-end, externally managed, non-diversified management investment company that has
elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act). Furthermore, as the Company is an investment company, it continues to apply the guidance in the
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946. In addition, for tax purposes, we have elected to be treated as a regulated investment company (RIC), under the
Internal Revenue Code of 1986, as amended (the Code).

On January 28, 2011, Solar Senior was capitalized with
initial equity of $2 and commenced operations. On February 24, 2011, Solar Senior priced its initial public offering, selling 9.0 million shares, including the underwriters over-allotment, raising approximately $168,000 of net
proceeds. Concurrent with this offering, our senior management team purchased an additional 500,000 shares through a private placement, raising another $10,000.

The Companys investment objective is to seek to maximize current income consistent with the preservation of capital. We seek to achieve our investment objective by investing directly or indirectly
in senior secured loans, including first lien and second lien debt instruments, made primarily to leveraged private middle-market companies whose debt is rated below investment grade, which the Company refers to collectively as senior
loans. From time to time, we may also invest in public companies that are thinly traded. Under normal market conditions, at least 80% of the value of the Companys net assets (including the amount of any borrowings for investment
purposes) will be invested in senior loans.

Note 2. Significant Accounting Policies

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally
accepted accounting principles (GAAP), and include the accounts of the Company and its wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications which, in the opinion of management,
are necessary for the fair presentation of the results of the operations and financial condition for the periods presented. All significant intercompany balances and transactions have been eliminated. Certain prior period amounts may have been
reclassified to conform to current period presentation.

Interim consolidated financial statements are prepared in accordance
with GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, they may not
include all of the information and notes required by GAAP for annual consolidated financial statements. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ
materially. The current periods results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending on December 31, 2017.

In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for the fair presentation of
financial statements, have been included.

The significant accounting policies consistently followed by the Company are:



| | (a) | Investment transactions are accounted for on the trade date;
| | --- | ------------------------------------------------------------



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



| | (b) | The Company conducts the valuation of its assets in accordance with GAAP and the 1940 Act. The Company generally values its assets on a quarterly basis, or more
frequently if required. Investments for which market quotations are readily available on an exchange are valued at the closing price on the date of valuation. The Company may also obtain quotes with respect to certain of its investments from pricing
services or brokers or dealers in order to value assets. When doing so, management determines whether the quote obtained is sufficient according to GAAP to determine the fair value of the investment. If determined adequate, the Company uses the
quote obtained. Debt investments with maturities of 60 days or less shall each be valued at cost plus accreted discount, or minus amortized premium, which is expected to approximate fair value, unless such valuation, in the judgment of Solar Capital
Partners, LLC (the Investment Adviser), does not represent fair value, in which case such investments shall be valued at fair value as determined in good faith by or under the direction of the Companys board of directors (the
Board).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Investments for which reliable market quotations are not readily available or for which the
pricing sources do not provide a valuation or methodology or provide a valuation or methodology that, in the judgment of the Investment Adviser or the Board does not represent fair value, shall be valued as follows: (i) each portfolio company
or investment is initially valued by the investment professionals responsible for the portfolio investment; (ii) preliminary valuations are discussed with senior management of the Investment Adviser; (iii) independent valuation firms
engaged by, or on behalf of, the Board will conduct independent appraisals and review the Investment Advisers preliminary valuations and make their own independent assessment for (a) each portfolio investment that, when taken together
with all other investments in the same portfolio company, exceeds 10% of estimated total assets, plus available borrowings, as of the end of the most recently completed fiscal quarter, and (b) each portfolio investment that is presently in
payment default; (iv) the Board will discuss the valuations and determine the fair value of each investment in our portfolio in good faith based on the input of the Investment Adviser and, where appropriate, the respective independent valuation
firm.

The recommendation of fair value generally considers the following factors among others, as relevant: applicable market
yields; the nature and realizable value of any collateral; the portfolio companys ability to make payments; the portfolio companys earnings and discounted cash flow; the markets in which the issuer does business; and comparisons to
publicly traded securities, among others.

When an external event such as a purchase transaction, public offering or subsequent
equity sale occurs, the Company will consider the pricing indicated by the external event to corroborate the valuation. 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 investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

Investments are valued utilizing a market approach, an income approach, or both approaches, as appropriate. However, in accordance with
ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946, may be valued using net asset value as a practical expedient for fair value. The market approach uses prices and
other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation approaches to convert future amounts (for example, cash flows or earnings)
to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value
pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables,



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



applicable market yields and multiples, security covenants, call protection provisions, the nature and realizable value of any collateral, the portfolio companys ability to make payments,
its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available,
broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process. For the three months ended March 31, 2017, there has been no change to the Companys valuation approaches or techniques
and the nature of the related inputs considered in the valuation process.

ASC Topic 820 classifies the inputs used to measure
these fair values into the following hierarchy:

Level1: Quoted prices in active markets for
identical assets or liabilities, accessible by the Company at the measurement date.

Level2: Quoted
prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level3: Unobservable inputs for the asset or liability.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on
the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment.
The exercise of judgment is based in part on our knowledge of the asset class and our prior experience.



| | (c) | Gains or losses on investments are calculated by using the specific identification method.
| | --- | ------------------------------------------------------------------------------------------



| | (d) | The Company records dividend income and interest, adjusted for amortization of premium and accretion of discount, on an accrual basis. Loan origination fees, original
issue discount, and market discounts are capitalized and we amortize such amounts into income using the effective interest method or on a straight-line basis, as applicable. Upon the prepayment of a loan, any unamortized loan origination fees are
recorded as interest income. We record call premiums on loans repaid as interest income when we receive such amounts. Capital structuring fees, amendment fees, consent fees, and any other non-recurring fee
income as well as management fee and other fee income for services rendered, if any, are recorded as other income when earned.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | The Company intends to comply with the applicable provisions of the Internal Revenue Code pertaining to regulated investment companies to make distributions of taxable
income sufficient to relieve it of substantially all U.S. federal income taxes. The Company, at its discretion, may carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. The Company will accrue
excise tax on such estimated excess taxable income as appropriate.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Book and tax basis differences relating to stockholder distributions and other permanent book and tax differences are typically reclassified among the Companys
capital accounts annually. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from GAAP.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | Distributions to common stockholders are recorded as of the record date. The amount to be paid out as a distribution is determined by the Board. Net realized capital
gains, if any, are generally distributed or deemed distributed at least annually.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



| | (h) | In accordance with Regulation S-X and ASC Topic 810Consolidation, the Company consolidates its interest in
investment company subsidiaries, financing subsidiaries and certain wholly-owned holding companies that serve to facilitate investment in portfolio companies. In addition, the Company may also consolidate any controlled operating companies
substantially all of whose business consists of providing services to the Company.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | The accounting records of the Company are maintained in U.S. dollars. Any assets and liabilities denominated in foreign currencies are translated into U.S. dollars
based on the rate of exchange of such currencies against the U.S. dollar on the date of valuation. The Company will not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such fluctuations would be included with the net unrealized gain or loss from investments. The Companys investments in foreign securities, if any, may involve certain
risks, including without limitation: foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the
relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments in terms of U.S. dollars and therefore the earnings of the Company.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (j) | The Company has made an irrevocable election to apply the fair value option of accounting to its senior secured revolving credit facility (the Credit
Facility), in accordance with ASC 825-10. The Company uses an independent third-party valuation firm to assist in measuring its fair value.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (k) | In accordance with ASC 835-30, the Company records origination and other expenses related to certain debt issuances, if any, as
a direct deduction from the carrying amount of the debt liability. These expenses are deferred and amortized using either the effective interest method or the straight-line method over the stated life. The straight-line method may be used on
revolving facilities and when it approximates the effective yield method.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (l) | The Company records expenses related to shelf registration statements and applicable equity offering costs as prepaid assets. These expenses are typically charged as a
reduction of capital upon utilization, in accordance with ASC 946-20-25. Certain subsequent costs are expensed per the AICPA Audit & Accounting Guide for
Investment Companies.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (m) | Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when
principal or interest cash payments are past due 30 days or more and/or when it is no longer probable that principal or interest cash payments will be collected. Such non-accrual investments are restored to
accrual status if past due principal and interest are paid in cash, and in managements judgment, are likely to continue timely payment of their remaining principal and interest obligations. Cash interest payments received on such investments
may be recognized as income or applied to principal depending on managements judgment.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (n) | The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and so near their maturity that they present insignificant
risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less would qualify, with limited exceptions. The Company believes that certain U.S. Treasury bills, repurchase agreements
and other high-quality, short-term debt securities would qualify as cash equivalents.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Recent Accounting
Pronouncements

In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended rules (together,
final rules) interned to modernize the reporting and disclosure of information by registered



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company
financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. The Company is currently evaluating the impact that the adoption of the
amendments to Regulation S-X will have on its consolidated financial statements and disclosures.

In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows, which will amend FASB ASC 230. The amendments in this Update require that a statement of cash
flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash
equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update apply to all entities that have restricted cash or restricted cash equivalents and are required to present a
statement of cash flows under Topic 230. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including
adoption in an interim period. The Company is evaluating the impact of ASU 2016-18 on its consolidated financial statements and disclosures.

In December 2016, the FASB issued ASU 2016-19, Technical Corrections and Improvements. As part of
this guidance, ASU 2016-19 amends FASB ASC 820 to clarify the difference between a valuation approach and a valuation technique. The amendment also requires an entity to disclose when there has been a change
in either or both a valuation approach and/or a valuation technique. ASU 2016-19 is effective on a prospective basis for financial statements issued for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2016 on a prospective basis. The Company has evaluated the impact of ASU 2016-19 on its consolidated financial statements and disclosures and determined that the
adoption of ASU 2016-19 has not had a material impact on its consolidated financial statements.

Note 3. Agreements

Solar Senior has an Advisory Agreement with the Investment Adviser, under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, Solar Senior. For providing these services, the Investment Adviser receives a fee from Solar Senior,
consisting of two componentsa base management fee and an incentive fee. The base management fee is calculated at an annual rate of 1.00% of gross assets. For services rendered under the Advisory Agreement, the base management fee is payable
quarterly in arrears. The base management fee is calculated based on the average value of our gross assets at the end of the two most recently completed calendar quarters. Base management fees for any partial month or quarter will be appropriately pro-rated. For purposes of computing the base management fee, gross assets exclude temporary assets acquired at the end of each fiscal quarter for purposes of preserving investment flexibility in the next fiscal
quarter. Temporary assets include, but are not limited to, U.S. treasury bills, other short-term U.S. government or government agency securities, repurchase agreements or cash borrowings.

The incentive fee has two parts, as follows: one is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter. For this purpose, pre-incentive fee net investment income means interest income,
dividend income and any other income (other than fees for providing managerial assistance) accrued during the calendar quarter, minus our operating expenses for the quarter (excluding the incentive fee).
Pre-incentive fee net investment income includes, in the case of



17



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



investments, if any, with a deferred interest feature (such as original issue discount, debt instruments with
pay-in-kind interest and zero-coupon securities), accrued income that we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains or losses or unrealized capital appreciation or depreciation. Pre-incentive fee net
investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to a hurdle of 1.75% per quarter (7.00% annualized). The Company pays the Investment Adviser
an incentive fee with respect to pre-incentive fee net investment income for each calendar quarter as follows:



| |  |  | no incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed
the hurdle of 1.75%;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | 50% 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 2.9167% in any calendar quarter (11.67% annualized);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

and



| |  |  | 20% of the amount of pre-incentive fee net investment income, if any, that exceeds 2.9167% in any calendar
quarter (11.67% annualized) will be payable 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 will equal 20% of the Companys cumulative realized capital gains less
cumulative realized capital losses, unrealized capital depreciation (unrealized depreciation on a gross investment-by-investment basis at the end of each calendar year)
and all net capital gains upon which prior performance-based capital gains incentive fee payments were previously made to the Investment Adviser. For financial statement purposes, the second part of the incentive fee is accrued based upon 20% of
cumulative net realized gains and net unrealized capital appreciation. No accrual was required for the three months ended March 31, 2017 and 2016.

For the three months ended March 31, 2017 and 2016 the Company recognized $948 and $797, respectively, in gross base management fees and $75 and $385, respectively, in gross performance-based
incentive fees. For the three months ended March 31, 2017 and 2016, $789 and $0, respectively, of such base management fees were waived. For the three months ended March 31, 2017 and 2016, $75 and $385, respectively, of such
performance-based incentive fees were waived. For the quarterly periods ended September 30, 2016 to June 30, 2017 (the Waiver Period), the Investment Adviser has agreed to voluntarily waive a portion or all of the incentive
fees, and to the extent necessary a portion or all of the base management fees, that the Investment Adviser would otherwise be entitled to receive pursuant to our investment advisory and management agreement with the Investment Adviser to the extent
required in order for the Company to earn net investment income (exclusive of costs related to the expansion, extension and/or amendments of our credit facilities), as determined in accordance with GAAP, sufficient to maintain the Companys
current level of distributions. A portion or all of the voluntary fee waivers made during the Waiver Period are made at the Investment Advisers discretion and are subject to recapture by the Investment Adviser and reimbursement by the Company
through June 30, 2018 to the extent GAAP net investment income equals or exceeds the current level of distributions. The amount to be waived or recaptured will be determined after the end of each quarter during the Waiver Period, with such amounts
being accrued on a quarterly basis. For the three months ended March 31, 2017, there were no fees recaptured by the Investment Adviser. The voluntary fee waiver for the three months ended March 31, 2016 was made at the Investment
Advisers discretion and was subject to recapture by the Investment Adviser and reimbursement by the Company if net investment income during and/or for fiscal 2016 equaled or exceeded distributions declared in fiscal 2016. For fiscal 2016,
there were no fees recaptured by the Investment Adviser.



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



Solar Senior has also entered into an Administration Agreement with Solar Capital
Management, LLC (the Administrator) under which the Administrator provides administrative services for Solar Senior. For providing these services, facilities and personnel, Solar Senior reimburses the Administrator for Solar
Seniors allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent. The Administrator will also provide, on Solar Seniors behalf,
managerial assistance to those portfolio companies to which Solar Senior is required to provide such assistance. The Company typically reimburses the Administrator on a quarterly basis.

For the three months ended March 31, 2017 and 2016, the Company recognized expenses under the Administration Agreement of $368 and
$295, respectively. No managerial assistance fees were accrued or collected for the three months ended March 31, 2017 and 2016.

Note
4. Net Asset Value Per Share

At March 31, 2017, the Companys total net assets and net asset value per
share were $269,453 and $16.81, respectively. This compares to total net assets and net asset value per share at December 31, 2016 of $269,145 and $16.80, respectively.

Note 5. Earnings Per Share

The following table sets forth the
computation of basic and diluted net increase in net assets per share resulting from operations, pursuant to ASC 260-10, for the three months ended March 31, 2017 and 2016:



|                                                                  |  |                              |            |  |      |   |            | 
|----------------------------------------------------------------- |  | ---------------------------- | ---------- |  | ---- | - | ---------- | 
|                                                                  |  | Three months ended March 31, |           
|                                                                  |  | 2017                         |            |  | 2016 |  
|Earnings per share (basic& diluted)                               |  |                              |            |  |      |   |            | 
|Numerator  net increase in net assets resulting from operations: |  | $                            | 5,911      |  |      | $ | 8,414      | 
|Denominator  weighted average shares:                            |  |                              | 16,026,312 |  |      |   | 11,533,315 | 
|Earnings per share:                                               |  | $                            | 0.37       |  |      | $ | 0.73       | 

Note 6. Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a
framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair
value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical
assets or liabilities in an active market that the Company has the ability to access.

Level2. Financial assets and liabilities whose values are based on quoted prices in markets that are not
active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:



| | a) | Quoted prices for similar assets or liabilities in active markets;
| | -- | ------------------------------------------------------------------



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



| | b) | Quoted prices for identical or similar assets or liabilities in non-active markets;
| | -- | -----------------------------------------------------------------------------------



| | c) | Pricing models whose inputs are observable for substantially the full term of the asset or liability; and
| | -- | ---------------------------------------------------------------------------------------------------------



| | d) | Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of
the asset or liability.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Level3.Financial assets and liabilities whose values are
based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect managements and, if applicable, an independent third-party valuation firms
own assumptions about the assumptions a market participant would use in pricing the asset or liability.

When the inputs used
to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example,
a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3).

Gains and losses for assets and liabilities categorized within the Level 3 table below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and
unobservable inputs (Level 3).

A review of fair value hierarchy classifications is conducted on a quarterly basis.
Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Such reclassifications are reported as transfers in/out of the appropriate category as of the end of the quarter in which
the reclassifications occur.

The following tables present the balances of assets and liabilities measured at fair value on a
recurring basis, as of March 31, 2017 and December 31, 2016:

Fair Value Measurements

As of March 31, 2017



|                                        |  |         |   |  |         |   |        |         |  |   |                              |  |  |       |        |  |  |   |         | 
|--------------------------------------- |  | ------- | - |  | ------- | - | ------ | ------- |  | - | ---------------------------- |  |  | ----- | ------ |  |  | - | ------- | 
|                                        |  | Level 1 |   |  | Level 2 |   |        | Level 3 |  |   | Measured atNet 
Asset Value* |  |  | Total |       
|Assets:                                 |  |         |   |  |         |   |        |         |  |   |                              |  |  |       |        |  |  |   |         | 
|Bank Debt/Senior Secured Loans          |  | $       |  |  |         | $ | 32,325 |         |  | $ | 266,266                      |  |  | $     |       |  |  | $ | 298,591 | 
|Common Equity/Equity Interests/Warrants |  |         |  |  |         |   |       |         |  |   | 35,732                       |  |  |       | 38,791 |  |  |   | 74,523  | 
|                                        |  |         |   |  |         |   |        |         |  |   |                              |  |  |       |        |  |  |   |         | 
|Total Investments                       |  | $       |  |  |         | $ | 32,325 |         |  | $ | 301,998                      |  |  | $     | 38,791 |  |  | $ | 373,114 | 
|                                        |  |         |   |  |         |   |        |         |  |   |                              |  |  |       |        |  |  |   |         | 
|Liabilities:                            |  |         |   |  |         |   |        |         |  |   |                              |  |  |       |        |  |  |   |         | 
|Credit Facility                         |  | $       |  |  |         | $ |       |         |  | $ | 86,800                       |  |  | $     |       |  |  | $ | 86,800  | 
|                                        |  |         |   |  |         |   |        |         |  |   |                              |  |  |       |        |  |  |   |         | 



|* | In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as
a practical expedient for fair value have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated
Statements of Assets and Liabilities. The portfolio investment in this category is First Lien Loan Program, LLC (FLLP). See Note 11 for more information on this investment, including its investment strategy and the Companys
unfunded equity commitment to FLLP. This investment is is not redeemable by the Company absent an election by the members of the entity to liquidate all investments and distribute the proceeds to the members.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



Fair Value Measurements

As of December 31, 2016



|                               |  |         |   |  |         |   |        |         |  |   |                             |  |  |       |        |  |  |   |         | 
|------------------------------ |  | ------- | - |  | ------- | - | ------ | ------- |  | - | --------------------------- |  |  | ----- | ------ |  |  | - | ------- | 
|                               |  | Level 1 |   |  | Level 2 |   |        | Level 3 |  |   | Measured atNet Asset Value* |  |  | Total |       
|Assets:                        |  |         |   |  |         |   |        |         |  |   |                             |  |  |       |        |  |  |   |         | 
|Bank Debt/Senior Secured Loans |  | $       |  |  |         | $ | 40,888 |         |  | $ | 250,268                     |  |  | $     |       |  |  | $ | 291,156 | 
|Common Equity/Equity Interests |  |         |  |  |         |   |       |         |  |   | 35,568                      |  |  |       | 38,810 |  |  |   | 74,378  | 
|                               |  |         |   |  |         |   |        |         |  |   |                             |  |  |       |        |  |  |   |         | 
|Total Investments              |  | $       |  |  |         | $ | 40,888 |         |  | $ | 285,836                     |  |  | $     | 38,810 |  |  | $ | 365,534 | 
|                               |  |         |   |  |         |   |        |         |  |   |                             |  |  |       |        |  |  |   |         | 
|Liabilities:                   |  |         |   |  |         |   |        |         |  |   |                             |  |  |       |        |  |  |   |         | 
|Credit Facility                |  | $       |  |  |         | $ |       |         |  | $ | 98,300                      |  |  | $     |       |  |  | $ | 98,300  | 
|                               |  |         |   |  |         |   |        |         |  |   |                             |  |  |       |        |  |  |   |         | 



|* | In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as
a practical expedient for fair value have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated
Statements of Assets and Liabilities.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table provides a summary of the changes in fair value of
Level 3 assets and liabilities for the three months ended March 31, 2017, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at
March 31, 2017:

Fair Value Measurements Using Level 3 Inputs



|                                                                                                                                        |  |                               |         |   |                                        |   |        |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ------- | - | -------------------------------------- | - | ------ | -
|                                                                                                                                        |  | Bank Debt/SeniorSecured Loans |         |   | CommonEquity/EquityInterests/
Warrants |  
|Fair value, December 31, 2016                                                                                                           |  | $                             | 250,268 |   |                                        | $ | 35,568 |  
|Total gains or losses included in earnings:                                                                                             |  |                               |         |   |                                        |   |        |  
|Net realized gain (loss)                                                                                                                |  |                               | 53      |   |                                        |   |       |  
|Net change in unrealized gain (loss)                                                                                                    |  |                               | 2,931   |   |                                        |   | (3,018 | )
|Purchase of investment securities                                                                                                       |  |                               | 59,720  |   |                                        |   | 3,182  |  
|Proceeds from dispositions of investment securities                                                                                     |  |                               | (52,773 | ) |                                        |   |       |  
|Transfers in/out of Level 3                                                                                                             |  |                               | 6,067   |   |                                        |   |       |  
|                                                                                                                                        |  |                               |         |   |                                        |   |        |  
|Fair value, March 31, 2017                                                                                                              |  | $                             | 266,266 |   |                                        | $ | 35,732 |  
|                                                                                                                                        |  |                               |         |   |                                        |   |        |  
|Unrealized gains (losses) for the period relating to those Level 3 assets that were still held by the Company at the end of
the period: |  |                               |         |   |                                        |   |        |  
|Net change in unrealized gain (loss):                                                                                                   |  | $                             | 3,023   |   |                                        | $ | (3,018 | )
|                                                                                                                                        |  |                               |         |   |                                        |   |        |  

During the three months ended March 31, 2017, nThrive, Inc. was transferred from Level 2 to
Level 3. At March 31, 2017, the Investment Adviser had information that nThrive, Inc. was possibly going to be prepaid in the near future. As such, the Investment Adviser felt that it was more representative of fair value to price the position
at par, matching the price we would receive if the investment was prepaid, than to value the position using the public quote, which was above par.



21



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



The following table shows a reconciliation of the beginning and ending balances for fair
valued liabilities measured using significant unobservable inputs (Level 3) for the three months ended March 31, 2017:



|                                          |  |   |         |  
|----------------------------------------- |  | - | ------- | -
|Beginning fair value at December 31, 2016 |  | $ | 98,300  |  
|Borrowings                                |  |   | 29,500  |  
|Repayments                                |  |   | (41,000 | )
|Transfers in/out of Level 3               |  |   |        |  
|                                          |  |   |         |  
|Ending fair value at March 31, 2017       |  | $ | 86,800  |  
|                                          |  |   |         |  

The Company has made an irrevocable election to apply the fair value option of accounting to the Credit
Facility, in accordance with ASC 825-10. On March 31, 2017, there were borrowings of $86,800 on the Credit Facility. For the three months ended March 31, 2017, the Credit Facility had no net change
in unrealized (appreciation) depreciation. The Company used an independent third-party valuation firm to assist in measuring the fair value of the Credit Facility.

The following table provides a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2016, as well as the portion of gains or losses included in
income attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2016:

Fair Value Measurements Using Level 3 Inputs



|                                                                                                                                        |  |                               |         |   |                |   |        |                              |  |   |        | 
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ------- | - | -------------- | - | ------ | ---------------------------- |  | - | ------ | 
|                                                                                                                                        |  | Bank Debt/SeniorSecured Loans |         |   | UnsecuredNotes |   |        | CommonEquity/EquityInterests | 
|Fair value, December 31, 2015                                                                                                           |  | $                             | 198,836 |   |                | $ | 3,650  |                              |  | $ | 34,068 | 
|Total gains or losses included in earnings:                                                                                             |  |                               |         |   |                |   |        |                              |  |   |        | 
|Net realized gain (loss)                                                                                                                |  |                               | 6       |   |                |   |       |                              |  |   |       | 
|Net change in unrealized gain (loss)                                                                                                    |  |                               | (1,812  | ) |                |   | (6     | )                            |  |   | 1,500  | 
|Purchase of investment securities                                                                                                       |  |                               | 136,331 |   |                |   |       |                              |  |   |       | 
|Proceeds from dispositions of investment securities                                                                                     |  |                               | (83,093 | ) |                |   | (3,644 | )                            |  |   |       | 
|Transfers in/out of Level 3                                                                                                             |  |                               |        |   |                |   |       |                              |  |   |       | 
|                                                                                                                                        |  |                               |         |   |                |   |        |                              |  |   |        | 
|Fair value, December 31, 2016                                                                                                           |  | $                             | 250,268 |   |                | $ |       |                              |  | $ | 35,568 | 
|                                                                                                                                        |  |                               |         |   |                |   |        |                              |  |   |        | 
|Unrealized gains (losses) for the period relating to those Level 3 assets that were still held by the Company at the end of
the period: |  |                               |         |   |                |   |        |                              |  |   |        | 
|Net change in unrealized gain (loss):                                                                                                   |  | $                             | (2,857  | ) |                | $ |       |                              |  | $ | 1,500  | 
|                                                                                                                                        |  |                               |         |   |                |   |        |                              |  |   |        | 

During the year ended December 31, 2016, there were no transfers in and out of Levels 1 and 2.



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



The following table shows a reconciliation of the beginning and ending balances for fair
valued liabilities measured using significant unobservable inputs (Level 3) for the year ended December 31, 2016:



|                                          |  |   |          |  
|----------------------------------------- |  | - | -------- | -
|Beginning fair value at December 31, 2015 |  | $ | 116,200  |  
|Borrowings                                |  |   | 136,800  |  
|Repayments                                |  |   | (154,700 | )
|Transfers in/out of Level 3               |  |   |         |  
|                                          |  |   |          |  
|Ending fair value at December 31, 2016    |  | $ | 98,300   |  
|                                          |  |   |          |  

The Company has made an irrevocable election to apply the fair value option of accounting to the Credit
Facility, in accordance with ASC 825-10. On December 31, 2016, there were borrowings of $98,300 on the Credit Facility. For the year ended December 31, 2016, the Credit Facility had no net change in
unrealized (appreciation) depreciation. The Company used an independent third-party valuation firm to assist in measuring the fair value of the Credit Facility.

Quantitative Information about Level 3 Fair Value Measurements

The Company typically determines the fair value of its performing debt investments utilizing a yield analysis. In a yield analysis, a
price is ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles. Additional consideration is given to current contractual interest rates, relative maturities and other
key terms and risks associated with an investment. Among other factors, a significant determinant of risk is the amount of leverage used by the portfolio company relative to the total enterprise value of the company, and the rights and remedies of
our investment within each portfolio company.

Significant unobservable quantitative inputs typically used in the fair value
measurement of the Companys Level 3 assets and liabilities primarily reflect current market yields, including indices, and readily available quotes from brokers, dealers, and pricing services as indicated by comparable assets and
liabilities, as well as enterprise values, returns on equity and earnings before income taxes, depreciation and amortization (EBITDA) multiples of similar companies, and comparable market transactions for equity securities.

Quantitative information about the Companys Level 3 asset and liability fair value measurements as of March 31, 2017 is
summarized in the table below:



|                                        |  |                   |  |                             |          |  |                                           |                                  |                    |                                 |                         |                                       
|--------------------------------------- |  | ----------------- |  | --------------------------- | -------- |  | ----------------------------------------- | -------------------------------- | ------------------ | ------------------------------- | ----------------------- | --------------------------------------
|                                        |  | Asset orLiability |  | Fair Value atMarch 31, 2017 |          |  | Principal 
ValuationTechnique/Methodology |                                  | Unobservable Input |                                 | Range (WeightedAverage)
|Bank Debt / Senior Secured Loans        |  | Asset             |  | $                           | 266,266  |  |                                           | Yield Analysis                   |                    | Market Yield                    |                         | 5.7%  25.2% (7.7%)                   
|Common Equity/Equity Interests/Warrants |  | Asset             |  | $$                          | 8235,650 |  |                                           | Enterprise ValueEnterprise Value |                    | EBITDA MultipleReturn on Equity |                         | 8.7x-23.8x (23.8x)4.3%  22.5% (11.3%)
|Credit Facility                         |  | Liability         |  | $                           | 86,800   |  |                                           | Yield Analysis                   |                    | Market Yield                    |                         | L+1.4%  L+4.8%(L+2.0%)               

Significant increases or decreases in any of the above unobservable inputs in isolation, including
unobservable inputs used in deriving bid-ask spreads, if applicable, would result in a significantly lower or higher fair value measurement for such assets and liabilities.



23



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



Quantitative information about the Companys Level 3 asset and liability fair
value measurements as of December 31, 2016 is summarized in the table below:



|                                 |  |                   |  |                                |          |  |                                           |                                  |                    |                                 |                         |                                       
|-------------------------------- |  | ----------------- |  | ------------------------------ | -------- |  | ----------------------------------------- | -------------------------------- | ------------------ | ------------------------------- | ----------------------- | --------------------------------------
|                                 |  | Asset orLiability |  | Fair Value atDecember 31, 2016 |          |  | Principal 
ValuationTechnique/Methodology |                                  | Unobservable Input |                                 | Range (WeightedAverage)
|Bank Debt / Senior Secured Loans |  | Asset             |  | $                              | 250,268  |  |                                           | Yield Analysis                   |                    | Market Yield                    |                         | 5.7%  37.3% (8.0%)                   
|Common Equity/Equity Interests   |  | Asset             |  | $$                             | 6835,500 |  |                                           | Enterprise ValueEnterprise Value |                    | EBITDA MultipleReturn on Equity |                         | 9.3x-27.0x (27.0x)3.0% - 21.7% (15.0%)
|Credit Facility                  |  | Liability         |  | $                              | 98,300   |  |                                           | Yield Analysis                   |                    | Market Yield                    |                         | L+1.4%  L+4.8%(L+2.0%)               

Significant increases or decreases in any of the above unobservable inputs in isolation, including
unobservable inputs used in deriving bid-ask spreads, if applicable, would result in a significantly lower or higher fair value measurement for such assets and liabilities.

Note 7. Debt

Senior Secured Revolving Credit FacilityOn August 26, 2011, the Company established the SPV which entered into the
Credit Facility with Citigroup Global Markets Inc. acting as administrative agent. On January 10, 2017, commitments to the Credit Facility, as amended, were increased from $175,000 to $200,000 by utilizing the accordion feature. It can also be
expanded up to $600,000. The stated interest rate on the Credit Facility is LIBOR plus 2.00% with no LIBOR floor requirement and the current final maturity date is June 30, 2020. The Credit Facility is secured by all of the assets held by the
SPV. Under the terms of the Credit Facility, Solar Senior Capital and the SPV, as applicable, have made certain customary representations and warranties, and are required to comply with various covenants, including leverage restrictions, reporting
requirements and other customary requirements for similar credit facilities. The Credit Facility also includes usual and customary events of default for credit facilities of this nature. The Credit Facility was amended on November 7, 2012,
June 30, 2014 and May 29, 2015 to extend maturities and add greater investment flexibility, among other changes.

The Company has made an irrevocable election to apply the fair value option of accounting to the Credit Facility, in accordance with ASC 825-10. We believe accounting for the Credit Facility at fair value better aligns the measurement methodologies of assets and liabilities, which may mitigate certain earnings volatility. ASC 825-10 requires entities to display the fair value of the selected assets and liabilities on the face of the Consolidated Statements of Assets and Liabilities and changes in fair value of the Credit Facility are
reported in the Consolidated Statements of Operations.

The average annualized interest cost for all borrowings for the three
months ended March 31, 2017 and the year ended December 31, 2016 was 2.89% and 2.59%, respectively. These costs are exclusive of other credit facility expenses such as unused fees and fees paid to the
back-up servicer, if any. The maximum amount borrowed on the Credit Facility during the three months ended March 31, 2017 and the year ended December 31, 2016, was $98,300 and $141,600, respectively.



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



Note 8. Financial Highlights and Senior Securities Table

The following is a schedule of financial highlights for the three months ended March 31, 2017 and for the year ended
December 31, 2016:



|                                                     |  |                                             |            |    |                            |   |            |   
|---------------------------------------------------- |  | ------------------------------------------- | ---------- | -- | -------------------------- | - | ---------- | --
|                                                     |  | Three months endedMarch 31, 2017(unaudited) |            |    | Year endedDecember 31,2016 |  
|Per Share Data: (a)                                  |  |                                             |            |    |                            |   |            |   
|Net asset value, beginning of year                   |  | $                                           | 16.80      |    |                            | $ | 16.33      |   
|                                                     |  |                                             |            |    |                            |   |            |   
|Net investment income                                |  |                                             | 0.35       |    |                            |   | 1.42       |   
|Net realized and unrealized gain (loss)              |  |                                             | 0.01       |    |                            |   | 0.50       |   
|                                                     |  |                                             |            |    |                            |   |            |   
|Net increase in net assets resulting from operations |  |                                             | 0.36       |    |                            |   | 1.92       |   
|Distributions to stockholders:                       |  |                                             |            |    |                            |   |            |   
|From net investment income                           |  |                                             | (0.35      | )  |                            |   | (1.42      | ) 
|Offering costs and other                             |  |                                             |           |    |                            |   | (0.03      | ) 
|                                                     |  |                                             |            |    |                            |   |            |   
|Net asset value, end of period                       |  | $                                           | 16.81      |    |                            | $ | 16.80      |   
|                                                     |  |                                             |            |    |                            |   |            |   
|Per share market value, end of period                |  | $                                           | 17.98      |    |                            | $ | 16.44      |   
|Total Return(b)                                      |  |                                             | 11.59      | %  |                            |   | 20.70      | % 
|Net assets, end of period                            |  | $                                           | 269,453    |    |                            | $ | 269,145    |   
|Shares outstanding, end of period                    |  |                                             | 16,027,687 |    |                            |   | 16,025,011 |   
|                                                     |  |                                             |            |    |                            |   |            |   
|Ratios to average net assets(c):                     |  |                                             |            |    |                            |   |            |   
|Net investment income                                |  |                                             | 2.10       | %  |                            |   | 8.68       | % 
|                                                     |  |                                             |            |    |                            |   |            |   
|Operating expenses                                   |  |                                             | 0.38       | %* |                            |   | 2.65       | %*
|Interest and other credit facility expenses          |  |                                             | 0.31       | %  |                            |   | 1.56       | % 
|                                                     |  |                                             |            |    |                            |   |            |   
|Total expenses                                       |  |                                             | 0.69       | %* |                            |   | 4.21       | %*
|                                                     |  |                                             |            |    |                            |   |            |   
|Average debt outstanding                             |  | $                                           | 85,681     |    |                            | $ | 109,938    |   
|Portfolio turnover ratio                             |  |                                             | 15.4       | %  |                            |   | 38.4       | % 



|(a) | Calculated using the average shares outstanding method.
|--- | -------------------------------------------------------

|(b) | Total return is based on the change in market price per share during the period and takes into account distributions, if any, reinvested in accordance with the dividend
reinvestment plan. Total return does not include a sales load.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Not annualized for periods less than one year.
|--- | ----------------------------------------------

|* | The ratio of operating expenses to average net assets and the ratio of total expenses to average net assets is shown net of voluntary management and incentive fee
waivers (see note 3). For the three months ended March 31, 2017, the ratios of operating expenses to average net assets and total expenses to average net assets would be 0.70% and 1.01%, respectively, without the voluntary management and
incentive fee waivers. For the year ended December 31, 2016, the ratios of operating expenses to average net assets and total expenses to average net assets would be 3.60% and 5.15%, respectively, without the voluntary management and incentive
fee waivers.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



Information about our senior securities is shown in the following table as of each year
ended December 31 since the Company commenced operations, unless otherwise noted. The  indicates information which the SEC expressly does not require to be disclosed for certain types of senior securities.



|                                     |  |                            |         |  |                          |   |        |                                             |  |   |                                |  |  |  |     | 
|------------------------------------ |  | -------------------------- | ------- |  | ------------------------ | - | ------ | ------------------------------------------- |  | - | ------------------------------ |  |  |  | --- | 
|Class and Year                       |  | Total AmountOutstanding(1) |         |  | AssetCoveragePer Unit(2) |   |        | InvoluntaryLiquidatingPreferencePer Unit(3) |  |   | AverageMarket ValuePer Unit(4) | 
|Revolving Credit Facility            |  |                            |         |  |                          |   |        |                                             |  |   |                                |  |  |  |     | 
|Fiscal 2017 (through March 31, 2017) |  | $                          | 86,800  |  |                          | $ | 4,104  |                                             |  | $ |                               |  |  |  | N/A | 
|Fiscal 2016                          |  |                            | 98,300  |  |                          |   | 3,738  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2015                          |  |                            | 116,200 |  |                          |   | 2,621  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2014                          |  |                            | 143,200 |  |                          |   | 2,421  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2013                          |  |                            | 61,400  |  |                          |   | 4,388  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2012                          |  |                            | 39,100  |  |                          |   | 5,453  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2011                          |  |                            | 8,600   |  |                          |   | 21,051 |                                             |  |   |                               |  |  |  | N/A | 



|(1) | Total amount of each class of senior securities outstanding at the end of the period presented.
|--- | -----------------------------------------------------------------------------------------------

|(2) | The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and
indebtedness not represented by senior securities, divided by senior securities representing indebtedness. This asset coverage ratio is multiplied by one thousand to determine the Asset Coverage Per Unit. In order to determine the specific Asset
Coverage Per Unit for each class of debt, the total Asset Coverage Per Unit was divided based on the amount outstanding at the end of the period for each. As of March 31, 2017, asset coverage was 410.4%.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Not applicable, we do not have senior securities that are registered for public trading.
|--- | ----------------------------------------------------------------------------------------

Note 9. Gemino Healthcare Finance, LLC

We acquired Gemino Healthcare
Finance, LLC (d/b/a Gemino Senior Secured Healthcare Finance) (Gemino) on September 30, 2013. Gemino is a commercial finance company that originates, underwrites, and manages primarily secured, asset-based loans for small and mid-sized companies operating in the healthcare industry. Our initial investment in Gemino was $32,839. The management team of Gemino co-invested in the transaction and
continues to lead Gemino.

Concurrent with the closing of the transaction, Gemino entered into a new, four-year, non-recourse, $100,000 credit facility with non-affiliates, which was expandable to $150,000 under its accordion feature. Effective March 31, 2014, the credit facility
was expanded to $105,000 and again on June 27, 2014 to $110,000. On May 27, 2016, Gemino entered into a new $125,000 credit facility which replaced the previously existing facility. The new facility has similar terms as compared to the
previous facility and includes an accordion feature increase to $200,000 and has a maturity date of May 27, 2020.

On
December 31, 2013, we contributed our 32,839 units in Gemino to Gemino Senior Secured Healthcare LLC (Gemino Senior Secured Healthcare). In exchange for this contribution, we received 19,839 units of equity interests and $13,000 in
floating rate secured notes of Gemino Senior Secured Healthcare bearing interest at LIBOR plus 7.50%, maturing on December 31, 2018. However, our financial statements, including our schedule of investments, reflected our investments in Gemino
Senior Secured Healthcare on a consolidated basis. On October 28, 2016, Gemino Senior Secured Healthcare was dissolved. Geminos management team and Solar Senior own approximately 6% and 94% of the equity in Gemino, respectively.



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



Gemino currently manages a highly diverse portfolio of directly-originated and
underwritten senior-secured commitments. As of March 31, 2017, the portfolio totaled approximately $185,353 of commitments, of which $107,657 were funded, on total assets of $109,823. As of December 31, 2016, the portfolio totaled
approximately $186,360 of commitments, of which $114,386 were funded, on total assets of $118,490. At March 31, 2017, the portfolio consisted of 33 issuers with an average balance of approximately $3,262 versus 35 issuers with an average
balance of approximately $3,268 at December 31, 2016. All of the commitments in Geminos portfolio are floating-rate, senior-secured, cash-pay loans. Geminos credit facility, which is non-recourse to us, had approximately $75,000 and $83,000 of borrowings outstanding at March 31, 2017 and December 31, 2016, respectively. For the three months ended March 31, 2017 and 2016, Gemino
had net income of $767 and $1,426, respectively, on gross income of $2,852 and $3,819, respectively. Due to timing and non-cash items, there may be material differences between GAAP net income and cash
available for distributions.

Note 10. Commitments and Contingencies

The Company had unfunded debt and equity commitments to delayed draw and revolving loans, as well as to Gemino. The total amount of these
unfunded commitments as of March 31, 2017 and December 31, 2016 is $14,078 and $13,073, respectively, comprised of the following:



|                                                    |  |               |        |  |                  |   |        | 
|--------------------------------------------------- |  | ------------- | ------ |  | ---------------- | - | ------ | 
|                                                    |  | March 31,2017 |        |  | December 31,2016 |  
|Gemino Healthcare Finance, LLC                      |  | $             | 5,000  |  |                  | $ | 5,000  | 
|Engineering Solutions & Products, LLC               |  |               | 1,562  |  |                  |   | 1,736  | 
|Alera Group Intermediate Holdings, Inc              |  |               | 1,544  |  |                  |   | 3,860  | 
|MHE Intermediate Holdings, LLC                      |  |               | 1,417  |  |                  |   |       | 
|Professional DataSolutions, Inc                     |  |               | 1,148  |  |                  |   |       | 
|The Hilb Group, LLC & Gencorp Insurance Group, Inc. |  |               | 1,007  |  |                  |   |       | 
|Ministry Brands, LLC                                |  |               | 699    |  |                  |   | 1,507  | 
|Island Medical Management Holdings, LLC             |  |               | 591    |  |                  |   |       | 
|VT Buyer Acquisition Corp. (Veritext)               |  |               | 486    |  |                  |   | 486    | 
|CIBT Holdings, Inc                                  |  |               | 484    |  |                  |   | 484    | 
|TwentyEighty, Inc                                   |  |               | 140    |  |                  |   |       | 
|                                                    |  |               |        |  |                  |   |        | 
|Total Commitments*                                  |  | $             | 14,078 |  |                  | $ | 13,073 | 
|                                                    |  |               |        |  |                  |   |        | 



|* | The Company controls the funding of the Gemino Healthcare Finance, LLC commitment and may cancel it at its discretion.
|- | ----------------------------------------------------------------------------------------------------------------------

As of March 31, 2017 and December 31, 2016, the Company had sufficient cash available and/or liquid securities available to
fund its commitments as well as the commitments to FLLP disclosed in Note 11 and Solar Life Science Program LLC (LSJV) disclosed in Note 12.

Note 11. First Lien Loan Program LLC

On September 10, 2014, the Company entered into
a limited liability company agreement to create FLLP with Voya Investment Management LLC (Voya). Voya acts as the investment advisor for several wholly-owned insurance subsidiaries of Voya Financial, Inc. (NYSE: VOYA). The joint venture
vehicle, structured as an unconsolidated Delaware limited liability company, is expected to invest primarily in senior secured floating rate term loans to middle market companies predominantly owned by private equity sponsors or entrepreneurs. Solar
Senior and Voya have committed to provide $50,750 and $7,250, respectively, of capital to the joint venture. All



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



portfolio decisions and generally all other decisions in respect of the FLLP must be approved by an investment committee of the FLLP consisting of representatives of the Company and Voya (with
approval from a representative of each required). On February 13, 2015, FLLP commenced operations. On February 13, 2015, FLLP as transferor and FLLP 2015-1, LLC, a newly formed wholly owned
subsidiary of FLLP, as borrower entered into a $75,000 senior secured revolving credit facility (the FLLP Facility) with Wells Fargo Securities, LLC acting as administrative agent. Solar Senior Capital Ltd. acts as servicer under
the FLLP Facility. The FLLP Facility was scheduled to mature on February 13, 2020. The FLLP Facility generally bears interest at a rate of LIBOR plus a range of 2.25%-2.50%. FLLP and FLLP 2015-1, LLC, as applicable, have made certain customary representations and warranties, and are required to comply with various covenants, including leverage restrictions, reporting requirements and other customary
requirements for similar credit facilities. The FLLP Facility also includes usual and customary events of default for credit facilities of this nature. On August 15, 2016, the FLLP Facility was amended, expanding commitments to $100,000 and
extending the maturity date to August 16, 2021. There were $75,165 and $75,941 of borrowings outstanding as of March 31, 2017 and December 31, 2016, respectively. As of March 31, 2017 and December 31, 2016, Solar Senior and
Voya contributed combined equity capital in the amount of $47,071 and $47,071, respectively. Of the $47,071 of contributed equity capital at March 31, 2017, the Company contributed $29,584 in the form of investments and $11,603 in the form of
cash and Voya contributed $5,884 in the form of cash. As of March 31, 2017, Solar Senior and Voyas remaining commitments totaled $9,563 and $1,366, respectively. The Company, along with Voya, controls the funding of FLLP and FLLP may not
call the unfunded commitments without approval of both the Company and Voya.

As of March 31, 2017 and December 31,
2016, FLLP had total assets of $127,193 and $122,225, respectively. For the same periods, FLLPs portfolio consisted of first lien floating rate senior secured loans to 26 and 25 different borrowers, respectively. For the three months ended
March 31, 2017, FLLP invested $12,010 across 6 portfolio companies. For the three months ended March 31, 2016, FLLP invested $17,071 across 4 portfolio companies. Investments prepaid totaled $4,970 for the three months ended March 31,
2017 and $1,013 for the three months ended March 31, 2016. At March 31, 2017 and December 31, 2016, the weighted average yield of FLLPs portfolio was 6.6% and 6.6%, respectively, measured at fair value and 6.6% and 6.5%,
respectively, measured at cost.



28



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



FLLP Portfolio as of March 31, 2017



|                                                       |  |          |                                               |  |                     |  |       |            |  |  |                 |   |  |              |      |   |           |  |          |      |  |   |              |  |  |   |         |  |  |   |         | 
|------------------------------------------------------ |  | -------- | --------------------------------------------- |  | ------------------- |  | ----- | ---------- |  |  | --------------- | - |  | ------------ | ---- | - | --------- |  | -------- | ---- |  | - | ------------ |  |  | - | ------- |  |  | - | ------- | 
|Description                                            |  | Industry |                                               |  | SpreadAboveIndex(1) |  |       | LIBORFloor |  |  | InterestRate(2) |   |  | MaturityDate |      |   | ParAmount |  |          | Cost |  |   | FairValue(3) | 
|1A Smart Start LLC                                     |  |          | Electronic Equipment,Instruments & Components |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.90 | % |           |  | 2/21/22  |      |  | $ | 7,900        |  |  | $ | 7,838   |  |  | $ | 7,900   | 
|Alera Group Intermediate Holdings,
Inc.(4)             |  |          | Insurance                                     |  |                     |  | L+550 |            |  |  | 1.00            | % |  |              | 6.50 | % |           |  | 12/30/22 |      |  |   | 3,456        |  |  |   | 3,423   |  |  |   | 3,422   | 
|Anesthesia Consulting & Management,
LP(4)              |  |          | Health Care Providers &Services               |  |                     |  | L+500 |            |  |  | 1.00            | % |  |              | 6.04 | % |           |  | 10/31/22 |      |  |   | 4,988        |  |  |   | 4,941   |  |  |   | 4,938   | 
|Capstone Logistics Acquisition,
Inc.(4)                |  |          | Professional Services                         |  |                     |  | L+450 |            |  |  | 1.00            | % |  |              | 5.50 | % |           |  | 10/7/21  |      |  |   | 5,361        |  |  |   | 5,322   |  |  |   | 5,321   | 
|CIBT Holdings, Inc.(4)                                 |  |          | Professional Services                         |  |                     |  | L+525 |            |  |  | 1.00            | % |  |              | 6.40 | % |           |  | 6/28/22  |      |  |   | 2,607        |  |  |   | 2,584   |  |  |   | 2,594   | 
|Confie Seguros Holding II Co.(4)                       |  |          | Insurance                                     |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.75 | % |           |  | 4/19/22  |      |  |   | 5,486        |  |  |   | 5,435   |  |  |   | 5,522   | 
|DB Datacenter Holdings, Inc.(4)                        |  |          | IT Services                                   |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.75 | % |           |  | 7/13/21  |      |  |   | 5,500        |  |  |   | 5,453   |  |  |   | 5,417   | 
|Empower Payments Acquisition, Inc.
(RevSpring)(4)      |  |          | Professional Services                         |  |                     |  | L+550 |            |  |  | 1.00            | % |  |              | 6.65 | % |           |  | 11/30/23 |      |  |   | 4,613        |  |  |   | 4,524   |  |  |   | 4,521   | 
|Falmouth Group Holdings Corp.
(AMPAC)(4)               |  |          | Chemicals                                     |  |                     |  | L+675 |            |  |  | 1.00            | % |  |              | 7.75 | % |           |  | 12/14/21 |      |  |   | 5,472        |  |  |   | 5,472   |  |  |   | 5,472   | 
|Island Medical Management Holdings,
LLC(4)             |  |          | Health Care Providers &Services               |  |                     |  | L+550 |            |  |  | 1.00            | % |  |              | 6.50 | % |           |  | 9/1/22   |      |  |   | 4,604        |  |  |   | 4,558   |  |  |   | 4,558   | 
|Kellermeyer Bergensons Services, LLC
(KBS)(4)          |  |          | Commercial Services &Supplies                 |  |                     |  | L+500 |            |  |  | 1.00            | % |  |              | 6.04 | % |           |  | 10/29/21 |      |  |   | 2,438        |  |  |   | 2,420   |  |  |   | 2,413   | 
|MedRisk, LLC                                           |  |          | Health Care Providers &Services               |  |                     |  | L+525 |            |  |  | 1.00            | % |  |              | 6.35 | % |           |  | 3/1/23   |      |  |   | 3,960        |  |  |   | 3,925   |  |  |   | 3,960   | 
|Metamorph US 3, LLC (Metalogix)(4)                     |  |          | Software                                      |  |                     |  | L+750 | (5)        |  |  | 1.00            | % |  |              | 8.50 | % |           |  | 12/1/20  |      |  |   | 4,009        |  |  |   | 3,941   |  |  |   | 2,566   | 
|Ministry Brands, LLC(4)                                |  |          | Software                                      |  |                     |  | L+500 |            |  |  | 1.00            | % |  |              | 6.00 | % |           |  | 12/2/22  |      |  |   | 4,152        |  |  |   | 4,112   |  |  |   | 4,111   | 
|Pearl Merger Sub, LLC (PetVet)(4)                      |  |          | Health Care Facilities                        |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.90 | % |           |  | 12/17/20 |      |  |   | 5,376        |  |  |   | 5,304   |  |  |   | 5,322   | 
|Pet Holdings ULC & Pet Supermarket, Inc.               |  |          | Specialty Retail                              |  |                     |  | L+550 |            |  |  | 1.00            | % |  |              | 6.50 | % |           |  | 7/5/22   |      |  |   | 4,630        |  |  |   | 4,567   |  |  |   | 4,572   | 
|PSP Group, LLC (Pet Supplies Plus)(4)                  |  |          | Specialty Retail                              |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.90 | % |           |  | 4/6/21   |      |  |   | 5,340        |  |  |   | 5,304   |  |  |   | 5,326   | 
|QBS Holding Company, Inc. (Quorum)(4)                  |  |          | Software                                      |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.79 | % |           |  | 8/7/21   |      |  |   | 3,421        |  |  |   | 3,396   |  |  |   | 3,301   | 
|Salient Partners, L.P.(4)                              |  |          | Asset Management                              |  |                     |  | L+850 |            |  |  | 1.00            | % |  |              | 9.52 | % |           |  | 6/9/21   |      |  |   | 5,012        |  |  |   | 4,937   |  |  |   | 4,937   | 
|Sarnova HC, LLC                                        |  |          | Trading Companies andDistributors             |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.75 | % |           |  | 1/28/22  |      |  |   | 4,950        |  |  |   | 4,909   |  |  |   | 4,950   | 
|Suburban Broadband, LLC (Jab Wireless, Inc.)(4)        |  |          | Wireless TelecommunicationServices            |  |                     |  | L+450 |            |  |  | 1.00            | % |  |              | 5.54 | % |           |  | 3/26/19  |      |  |   | 8,126        |  |  |   | 8,031   |  |  |   | 8,045   | 
|Telular Corporation                                    |  |          | Wireless TelecommunicationServices            |  |                     |  | L+425 |            |  |  | 1.25            | % |  |              | 5.50 | % |           |  | 6/24/19  |      |  |   | 4,991        |  |  |   | 4,976   |  |  |   | 4,991   | 
|The Hilb Group, LLC & Gencorp Insurance Group,
Inc.(4) |  |          | Insurance                                     |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.90 | % |           |  | 6/24/21  |      |  |   | 3,885        |  |  |   | 3,820   |  |  |   | 3,846   | 
|Tronair Parent Inc.                                    |  |          | Aerospace & Defense                           |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.86 | % |           |  | 9/8/23   |      |  |   | 4,975        |  |  |   | 4,928   |  |  |   | 4,950   | 
|VT Buyer Acquisition Corp.
(Veritext)(4)               |  |          | Professional Services                         |  |                     |  | L+475 |            |  |  | 1.00            | % |  |              | 5.75 | % |           |  | 1/29/22  |      |  |   | 5,398        |  |  |   | 5,372   |  |  |   | 5,371   | 
|Wirb-Copernicus Group, Inc.(4)                         |  |          | Professional Services                         |  |                     |  | L+500 |            |  |  | 1.00            | % |  |              | 6.15 | % |           |  | 8/12/22  |      |  |   | 5,973        |  |  |   | 5,920   |  |  |   | 5,943   | 
|                                                       |  |          |                                               |  |                     |  |       |            |  |  |                 |   |  |              |      |   |           |  |          |      |  |   |              |  |  |   |         |  |  |   |         | 
|                                                       |  |          |                                               |  |                     |  |       |            |  |  |                 |   |  |              |      |   |           |  |          |      |  |   |              |  |  | $ | 125,412 |  |  | $ | 124,269 | 
|                                                       |  |          |                                               |  |                     |  |       |            |  |  |                 |   |  |              |      |   |           |  |          |      |  |   |              |  |  |   |         |  |  |   |         | 



|(1) | Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR or PRIME rate. These instruments are typically subject to
a LIBOR or PRIME rate floor.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



29



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



|(2) | Floating rate debt investments typically bear interest at a rate determined by reference to either the London Interbank Offered Rate (LIBOR or
L) index rate or the prime index rate (PRIME or P), and which typically reset monthly, quarterly or semi-annually. For each debt investment we have provided the current interest rate in effect as of March 31, 2017.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Boards valuation process described
elsewhere herein.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The Company also holds this security on its Consolidated Statements of Assets and Liabilities.
|--- | ----------------------------------------------------------------------------------------------

|(5) | Spread is 5.50% Cash / 2.0% PIK.
|--- | --------------------------------



30



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



FLLP Portfolio as of December 31, 2016 (audited)



|                                                       |  |                                                |  |                     |       |  |            |  |      |                 |  |  |              |   |  |           |          |  |      |   |       |              |  |   |         |  |  |   |         | 
|------------------------------------------------------ |  | ---------------------------------------------- |  | ------------------- | ----- |  | ---------- |  | ---- | --------------- |  |  | ------------ | - |  | --------- | -------- |  | ---- | - | ----- | ------------ |  | - | ------- |  |  | - | ------- | 
|Description                                            |  | Industry                                       |  | SpreadAboveIndex(1) |       |  | LIBORFloor |  |      | InterestRate(2) |  |  | MaturityDate |   |  | ParAmount |          |  | Cost |   |       | FairValue(3) | 
|1A Smart Start LLC                                     |  | Electronic Equipment, Instruments & Components |  |                     | L+475 |  |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 2/21/22  |  |      | $ | 7,920 |              |  | $ | 7,855   |  |  | $ | 7,920   | 
|Alera Group Intermediate Holdings,
Inc.(4)             |  | Insurance                                      |  |                     | L+550 |  |            |  | 1.00 | %               |  |  | 6.50         | % |  |           | 12/30/22 |  |      |   | 3,456 |              |  |   | 3,422   |  |  |   | 3,422   | 
|Anesthesia Consulting & Management,
LP(4)              |  | Health Care Providers & Services               |  |                     | L+500 |  |            |  | 1.00 | %               |  |  | 6.00         | % |  |           | 10/31/22 |  |      |   | 5,000 |              |  |   | 4,951   |  |  |   | 4,950   | 
|Capstone Logistics Acquisition,
Inc.(4)                |  | Professional Services                          |  |                     | L+450 |  |            |  | 1.00 | %               |  |  | 5.50         | % |  |           | 10/7/21  |  |      |   | 5,361 |              |  |   | 5,320   |  |  |   | 5,308   | 
|CIBT Holdings, Inc.(4)                                 |  | Professional Services                          |  |                     | L+525 |  |            |  | 1.00 | %               |  |  | 6.25         | % |  |           | 6/28/22  |  |      |   | 2,620 |              |  |   | 2,596   |  |  |   | 2,594   | 
|Confie Seguros Holding II Co.(4)                       |  | Insurance                                      |  |                     | L+475 |  |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 4/19/22  |  |      |   | 5,500 |              |  |   | 5,447   |  |  |   | 5,537   | 
|DB Datacenter Holdings, Inc.(4)                        |  | IT Services                                    |  |                     | L+475 |  |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 7/13/21  |  |      |   | 5,500 |              |  |   | 5,450   |  |  |   | 5,417   | 
|Empower Payments Acquisition, Inc.
(RevSpring)(4)      |  | Professional Services                          |  |                     | L+550 |  |            |  | 1.00 | %               |  |  | 6.50         | % |  |           | 11/30/23 |  |      |   | 4,625 |              |  |   | 4,533   |  |  |   | 4,532   | 
|Falmouth Group Holdings Corp.
(AMPAC)(4)               |  | Chemicals                                      |  |                     | L+675 |  |            |  | 1.00 | %               |  |  | 7.75         | % |  |           | 12/14/21 |  |      |   | 5,486 |              |  |   | 5,486   |  |  |   | 5,486   | 
|Kellermeyer Bergensons Services, LLC
(KBS)(4)          |  | Commercial Services & Supplies                 |  |                     | L+500 |  |            |  | 1.00 | %               |  |  | 6.00         | % |  |           | 10/29/21 |  |      |   | 2,438 |              |  |   | 2,419   |  |  |   | 2,389   | 
|MedRisk, LLC                                           |  | Health Care Providers & Services               |  |                     | L+525 |  |            |  | 1.00 | %               |  |  | 6.25         | % |  |           | 3/1/23   |  |      |   | 3,970 |              |  |   | 3,934   |  |  |   | 3,970   | 
|Metamorph US 3, LLC (Metalogix)(4)                     |  | Software                                       |  |                     | L+650 |  |            |  | 1.00 | %               |  |  | 7.50         | % |  |           | 12/1/20  |  |      |   | 4,000 |              |  |   | 3,928   |  |  |   | 2,860   | 
|Ministry Brands, LLC(4)                                |  | Software                                       |  |                     | L+500 |  |            |  | 1.00 | %               |  |  | 6.00         | % |  |           | 12/2/22  |  |      |   | 2,746 |              |  |   | 2,719   |  |  |   | 2,719   | 
|Pearl Merger Sub, LLC (PetVet)(4)                      |  | Health Care Facilities                         |  |                     | L+475 |  |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 12/17/20 |  |      |   | 5,390 |              |  |   | 5,313   |  |  |   | 5,329   | 
|Pet Holdings ULC & Pet Supermarket, Inc.               |  | Specialty Retail                               |  |                     | L+550 |  |            |  | 1.00 | %               |  |  | 6.50         | % |  |           | 7/5/22   |  |      |   | 4,538 |              |  |   | 4,474   |  |  |   | 4,481   | 
|PSP Group, LLC (Pet Supplies Plus)(4)                  |  | Specialty Retail                               |  |                     | L+475 |  |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 4/6/21   |  |      |   | 5,353 |              |  |   | 5,315   |  |  |   | 5,327   | 
|QBS Holding Company, Inc. (Quorum)(4)                  |  | Software                                       |  |                     | L+475 |  |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 8/7/21   |  |      |   | 3,430 |              |  |   | 3,404   |  |  |   | 3,293   | 
|Salient Partners, L.P.(4)                              |  | Asset Management                               |  |                     | L+850 |  |            |  | 1.00 | %               |  |  | 9.50         | % |  |           | 6/9/21   |  |      |   | 5,154 |              |  |   | 5,073   |  |  |   | 5,025   | 
|Sarnova HC, LLC                                        |  | Trading Companies and Distributors             |  |                     | L+475 |  |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 1/28/22  |  |      |   | 4,963 |              |  |   | 4,919   |  |  |   | 4,962   | 
|Suburban Broadband, LLC (Jab Wireless, Inc.)(4)        |  | Wireless Telecommunication Services            |  |                     | L+450 |  |            |  | 1.00 | %               |  |  | 5.50         | % |  |           | 3/26/19  |  |      |   | 8,168 |              |  |   | 8,060   |  |  |   | 8,086   | 
|Telular Corporation                                    |  | Wireless Telecommunication Services            |  |                     | L+425 |  |            |  | 1.25 | %               |  |  | 5.50         | % |  |           | 6/24/19  |  |      |   | 5,063 |              |  |   | 5,047   |  |  |   | 5,051   | 
|The Hilb Group, LLC & Gencorp Insurance Group,
Inc.(4) |  | Insurance                                      |  |                     | L+500 |  |            |  | 1.00 | %               |  |  | 6.00         | % |  |           | 6/24/21  |  |      |   | 3,814 |              |  |   | 3,747   |  |  |   | 3,776   | 
|Tronair Parent Inc.                                    |  | Aerospace & Defense                            |  |                     | L+475 |  |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 9/8/23   |  |      |   | 4,988 |              |  |   | 4,939   |  |  |   | 4,963   | 
|VT Buyer Acquisition Corp.
(Veritext)(4)               |  | Professional Services                          |  |                     | L+500 |  |            |  | 1.00 | %               |  |  | 6.00         | % |  |           | 1/29/22  |  |      |   | 4,481 |              |  |   | 4,443   |  |  |   | 4,459   | 
|Wirb-Copernicus Group, Inc.                            |  | Professional Services                          |  |                     | L+500 |  |            |  | 1.00 | %               |  |  | 6.00         | % |  |           | 8/12/22  |  |      |   | 5,486 |              |  |   | 5,434   |  |  |   | 5,431   | 
|                                                       |  |                                                |  |                     |       |  |            |  |      |                 |  |  |              |   |  |           |          |  |      |   |       |              |  |   |         |  |  |   |         | 
|                                                       |  |                                                |  |                     |       |  |            |  |      |                 |  |  |              |   |  |           |          |  |      |   |       |              |  | $ | 118,228 |  |  | $ | 117,287 | 
|                                                       |  |                                                |  |                     |       |  |            |  |      |                 |  |  |              |   |  |           |          |  |      |   |       |              |  |   |         |  |  |   |         | 



31



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SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



|(1) | Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR or PRIME rate. These instruments are typically subject to
a LIBOR or PRIME rate floor.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Floating rate debt investments typically bear interest at a rate determined by reference to either the London Interbank Offered Rate (LIBOR or
L) index rate or the prime index rate (PRIME or P), and which typically reset monthly, quarterly or semi-annually. For each debt investment we have provided the current interest rate in effect as of December 31, 2016.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Boards valuation process described
elsewhere herein.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The Company also holds this security on its Consolidated Statements of Assets and Liabilities.
|--- | ----------------------------------------------------------------------------------------------

Below is certain summarized financial information for FLLP as of March 31, 2017 and December 31, 2016 and for the three months
ended March 31, 2017 and 2016:



|                                                                     |  |               |         |  |                            |   |         | 
|-------------------------------------------------------------------- |  | ------------- | ------- |  | -------------------------- | - | ------- | 
|                                                                     |  | March 31,2017 |         |  | December 31,2016 (audited) |  
|Selected Balance Sheet Information for FLLP:                         |  |               |         |  |                            |   |         | 
|Investments at fair value (cost $125,412 and $118,228, respectively) |  | $             | 124,269 |  |                            | $ | 117,287 | 
|Cash and other assets                                                |  |               | 2,924   |  |                            |   | 4,938   | 
|                                                                     |  |               |         |  |                            |   |         | 
|Total assets                                                         |  | $             | 127,193 |  |                            | $ | 122,225 | 
|                                                                     |  |               |         |  |                            |   |         | 
|Debt outstanding                                                     |  | $             | 75,165  |  |                            | $ | 75,941  | 
|Payable for investments purchased                                    |  |               | 5,708   |  |                            |   |        | 
|Distributions payable                                                |  |               | 1,123   |  |                            |   | 981     | 
|Interest payable and other credit facility related expenses          |  |               | 732     |  |                            |   | 708     | 
|Accrued expenses and other payables                                  |  |               | 132     |  |                            |   | 241     | 
|                                                                     |  |               |         |  |                            |   |         | 
|Total liabilities                                                    |  | $             | 82,860  |  |                            | $ | 77,871  | 
|                                                                     |  |               |         |  |                            |   |         | 
|Members equity                                                      |  | $             | 44,333  |  |                            | $ | 44,354  | 
|                                                                     |  |               |         |  |                            |   |         | 
|Total liabilities and members equity                                |  | $             | 127,193 |  |                            | $ | 122,225 | 
|                                                                     |  |               |         |  |                            |   |         | 



|                                                    |  |                                  |       |   |                                  |   |       | 
|--------------------------------------------------- |  | -------------------------------- | ----- | - | -------------------------------- | - | ----- | 
|                                                    |  | Three months endedMarch 31, 2017 |       |   | Three months endedMarch 31, 2016 |  
|Selected Income Statement Information for FLLP:     |  |                                  |       |   |                                  |   |       | 
|Interest income                                     |  | $                                | 2,007 |   |                                  | $ | 1,343 | 
|                                                    |  |                                  |       |   |                                  |   |       | 
|Service fees*                                       |  | $                                | 20    |   |                                  | $ | 14    | 
|Interest and other credit facility expenses         |  |                                  | 692   |   |                                  |   | 464   | 
|Other general and administrative expenses           |  |                                  | (8    | ) |                                  |   | 35    | 
|                                                    |  |                                  |       |   |                                  |   |       | 
|Total expenses                                      |  |                                  | 704   |   |                                  |   | 513   | 
|                                                    |  |                                  |       |   |                                  |   |       | 
|Net investment income                               |  | $                                | 1,303 |   |                                  | $ | 830   | 
|                                                    |  |                                  |       |   |                                  |   |       | 
|Net change in unrealized gain (loss) on investments |  |                                  | (202  | ) |                                  |   | 80    | 
|                                                    |  |                                  |       |   |                                  |   |       | 
|Net income                                          |  | $                                | 1,101 |   |                                  | $ | 910   | 
|                                                    |  |                                  |       |   |                                  |   |       | 



|* | Service fees are included within the Companys Consolidated Statements of Operations as other income.
|- | -----------------------------------------------------------------------------------------------------

Note 12. Solar Life Science Program LLC

On February 22, 2017, the Company and Solar Capital Ltd. formed LSJV with an affiliate of Deerfield Management. The Company committed $75,000 to LSJV. As of March 31, 2017, LSJV has not
commenced operations.



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##### Table of Contents

SOLAR SENIOR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

March 31, 2017

(in thousands, except share amounts)



Note 13. Capital Share Transactions

As of March 31, 2017 and December 31, 2016, 200,000,000 shares of $0.01 par value capital stock were authorized.

Transactions in capital stock were as follows:



|                                               |  |                                  |       |  |                             |  |           |                                  |  |   |                             |  |  |   |        | 
|---------------------------------------------- |  | -------------------------------- | ----- |  | --------------------------- |  | --------- | -------------------------------- |  | - | --------------------------- |  |  | - | ------ | 
|                                               |  | Shares                           |       |  | Amount                      | 
|                                               |  | Three months endedMarch 31, 2017 |       |  | Year endedDecember 31, 2016 |  |           | Three months endedMarch 31, 2017 |  |   | Year endedDecember 31, 2016 | 
|Shares sold (less offering costs)              |  |                                  |      |  |                             |  | 4,490,152 |                                  |  | $ |                            |  |  | $ | 74,879 | 
|Shares issued in reinvestment of distributions |  |                                  | 2,676 |  |                             |  | 1,544     |                                  |  |   | 46                          |  |  |   | 26     | 
|                                               |  |                                  |       |  |                             |  |           |                                  |  |   |                             |  |  |   |        | 
|Net increase                                   |  |                                  | 2,676 |  |                             |  | 4,491,696 |                                  |  | $ | 46                          |  |  | $ | 74,905 | 
|                                               |  |                                  |       |  |                             |  |           |                                  |  |   |                             |  |  |   |        | 

On February 22, 2017, the Board declared a monthly distribution of $0.1175 per share payable on
April 4, 2017 to holders of record as of March 23, 2017.

On April 6, 2017, the Board declared a monthly
distribution of $0.1175 per share payable on May 2, 2017 to holders of record as of April 20, 2017.

On May 2,
2017, the Board declared a monthly distribution of $0.1175 per share payable on June 2, 2017 to holders of record as of May 18, 2017.

Note 14. Subsequent Events

The Company has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the consolidated financial statements were issued.

On April 6, 2017, the Board declared a monthly distribution of $0.1175 per share payable on May 2, 2017 to holders of record as
of April 20, 2017.

On May 2, 2017, the Board declared a monthly distribution of $0.1175 per share payable on
June 2, 2017 to holders of record as of May 18, 2017.



33



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Solar Senior Capital Ltd.:

We have reviewed the accompanying consolidated
statement of assets and liabilities, including the consolidated schedule of investments, of Solar Senior Capital Ltd. (the Company) as of March 31, 2017, the related consolidated statements of operations for the three-month periods
ended March 31, 2017 and 2016, the related consolidated statement of changes in net assets for the three-month period ended March 31, 2017, and the related consolidated statements of cash flows for the three-month periods ended
March 31, 2017 and 2016. These consolidated financial statements are the responsibility of the Companys management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of
interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred
to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in
accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of assets and liabilities, including the consolidated schedule of investments, of Solar Senior Capital Ltd., as of
December 31, 2016 and the related consolidated statements of operations, changes in net assets, and cash flows for the year ended December 31, 2016, and in our report dated February 22, 2017, we expressed an unqualified opinion on
those consolidated financial statements.

/s/ KPMG LLP

New York, New York

May 2, 2017



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The information contained in this section should be read in conjunction with our consolidated financial statements and notes thereto
appearing elsewhere in this report.

Some of the statements in this report constitute forward-looking statements, which
relate to future events or our future performance or financial condition. The forward-looking statements contained herein involve risks and uncertainties, including statements as to:



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



| |  |  | our business prospects and the prospects of our portfolio companies;
| | - |  | --------------------------------------------------------------------



| |  |  | the impact of investments that we expect to make;
| | - |  | -------------------------------------------------



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



| |  |  | the dependence of our future success on the general economy and its impact on the industries in which we invest;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | the ability of our portfolio companies to achieve their objectives;
| | - |  | -------------------------------------------------------------------



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



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



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

We generally use words such as anticipates, believes, expects, intends and similar
expressions to identify forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements for any reason, including any factors set forth in Risk Factors and elsewhere in this
report.

We have based the forward-looking statements included in this report on information available to us on the date of
this report, 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 in the future may file with the SEC, including any annual reports on Form 10-K, quarterly reports
on Form 10-Q and current reports on Form 8-K.

Overview

Solar Senior Capital Ltd. (Solar Senior, the Company, we or our), a
Maryland corporation formed in December 2010, is a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a
business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act). Furthermore, as the Company is an investment company, it continues to apply the guidance in the Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946. In addition, for tax purposes, the Company has elected to be regulated as a regulated investment company (RIC) under Subchapter M of the
Internal Revenue Code of 1986, as amended (the Code).

On February 24, 2011, we priced our initial public
offering, selling 9.0 million shares, including the underwriters over-allotment, raising approximately $168 million in net proceeds. Concurrent with this offering, Solar Senior Capital Investors LLC, an entity controlled by Michael
S. Gross, our Chairman and Chief Executive Officer, and Bruce Spohler, our Chief Operating Officer, purchased an additional 500,000 shares through a concurrent private placement, raising another $10 million.



35



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##### Table of Contents

On August 26, 2011, we established a $200 million senior secured revolving credit
facility (the Credit Facility) with Citigroup Global Markets Inc. acting as administrative agent. In connection with the Credit Facility, our wholly-owned subsidiary, SUNS SPV LLC (the SPV) was formed. The Credit Facility, as
amended, currently has an aggregate of $200 million of commitments available. It can also be expanded up to $600 million. The stated interest rate on the Credit Facility is LIBOR plus 2.00% with no LIBOR floor requirement and the current
final maturity date is June 30, 2020. The Credit Facility is secured by all of the assets held by the SPV. Under the terms of the Credit Facility, Solar Senior Capital and the SPV, as applicable, have made certain customary representations and
warranties, and are required to comply with various covenants, including leverage restrictions, reporting requirements and other customary requirements for similar credit facilities. The Credit Facility also includes usual and customary events of
default for credit facilities of this nature. The Credit Facility was amended on November 7, 2012, June 30, 2014 and May 29, 2015 to extend maturities and add greater investment flexibility, among other changes.

We invest primarily in privately held U.S. middle-market companies, where we believe the supply of primary capital is limited and the
investment opportunities are most attractive. We define middle market to refer to companies with annual revenues between $50 million and $1 billion. Our investment objective is to seek to maximize current income consistent with
the preservation of capital. We seek to achieve our investment objective by directly and indirectly investing in senior loans, including first lien, unitranche, and second lien debt instruments, made to private middle-market companies whose debt is
rated below investment grade, which we refer to collectively as senior loans. We may also invest in debt of public companies that are thinly traded or in equity securities. Under normal market conditions, at least 80% of the value of our
net assets (including the amount of any borrowings for investment purposes) will be invested in senior loans. Senior loans typically pay interest at rates which are determined periodically on the basis of a floating base lending rate, primarily
LIBOR, plus a premium. Senior loans in which we invest are typically made to U.S. and, to a limited extent, non-U.S. corporations, partnerships and other business entities which operate in various industries
and geographical regions. Senior loans typically are rated below investment grade. Securities rated below investment grade are often referred to as leveraged loans, high yield or junk securities, and may be
considered high risk compared to debt instruments that are rated investment grade. In addition, some of our debt investments are not scheduled to fully amortize over their stated terms, which could cause us to suffer losses if the
respective issuer of such debt investment is unable to refinance or repay their remaining indebtedness at maturity. While the Company does not typically seek to invest in traditional equity securities as part of its investment objective, the Company
may occasionally acquire some equity securities in connection with senior loan investments and in certain other unique circumstances, such as the Companys equity investments in Gemino Healthcare Finance, LLC (Gemino) and First Lien
Loan Program (FLLP).

We invest in senior loans made primarily to private, leveraged middle-market companies with
approximately $20 million to $100 million of earnings before income taxes, depreciation and amortization (EBITDA). Our business model is focused primarily on the direct origination of investments through portfolio companies or
their financial sponsors. Our direct investments in individual securities will generally range between $5 million and $30 million each, although we expect that this investment size will vary proportionately with the size of our capital
base and/or strategic initiatives. In addition, we may invest a portion of our portfolio in other types of investments, which we refer to as opportunistic investments, which are not our primary focus but are intended to enhance our overall returns.
These opportunistic investments may include, but are not limited to, direct investments in public companies that are not thinly traded and securities of leveraged companies located in select countries outside of the United States. We may invest up
to 30% of our total assets in such opportunistic investments, including loans issued by non-U.S. issuers, subject to compliance with our regulatory obligations as a BDC under the 1940 Act. Our investment
activities are managed by Solar Capital Partners, LLC (Solar Capital Partners or Investment Adviser) and supervised by our board of directors, a majority of whom are non-interested, as
such term is defined in the 1940 Act. Solar Capital Management, LLC (Solar Capital Management or Administrator) provides the administrative services necessary for us to operate.



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As of March 31, 2017, the Investment Adviser has directly invested approximately
$6.2 billion in more than 270 different portfolio companies since 2006. Over the same period, the Investment Adviser completed transactions with more than 165 different financial sponsors.

Recent Developments

On
April 6, 2017, the Board declared a monthly distribution of $0.1175 per share payable on May 2, 2017 to holders of record as of April 20, 2017.

On May 2, 2017, the Board declared a monthly distribution of $0.1175 per share payable on June 2, 2017 to holders of record as of May 18, 2017.

Investments

Our level
of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity for such
companies, the general economic environment and the competitive environment for the types of investments we make. As a BDC, we must not acquire any assets other than qualifying assets specified in the 1940 Act unless, at the time the
acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in eligible portfolio companies. The definition of eligible portfolio
company includes certain public companies that do not have any securities listed on a national securities exchange and companies whose securities are listed on a national securities exchange but whose market capitalization is less than
$250 million.

Revenue

We generate revenue primarily in the form of interest and dividend income from the securities we hold and capital gains, if any, on investment securities that we may sell. Our debt investments generally
have a stated term of three to seven years and typically bear interest at a floating rate usually determined on the basis of a benchmark London interbank offered rate (LIBOR), commercial paper rate, or the prime rate. Interest on our
debt investments is generally payable quarterly but may be monthly or semi-annually. In addition, our investments may provide payment-in-kind (PIK) interest.
Such amounts of accrued PIK interest are added to the cost of the investment on the respective capitalization dates and generally become due at maturity of the investment or upon the investment being called by the issuer. We may also generate
revenue in the form of commitment, origination, structuring fees, fees for providing managerial assistance and, if applicable, consulting fees, etc.

Expenses

All investment professionals of the investment adviser and their
respective staffs, when and to the extent engaged in providing investment advisory and management services, and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by Solar Capital
Partners. We bear all other costs and expenses of our operations and transactions, including (without limitation):



| |  |  | the cost of our organization and public offerings;
| | - |  | --------------------------------------------------



| |  |  | the cost of calculating our net asset value, including the cost of any third-party valuation services;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | the cost of effecting sales and repurchases of our shares and other securities;
| | - |  | -------------------------------------------------------------------------------



| |  |  | interest payable on debt, if any, to finance our investments;
| | - |  | -------------------------------------------------------------



| |  |  | fees payable to third parties relating to, or associated with, making investments, including fees and expenses associated with performing due diligence
reviews of prospective investments and advisory fees;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | fees and expenses associated with marketing efforts;
| | - |  | ----------------------------------------------------



| |  |  | federal and state registration fees, any stock exchange listing fees;
| | - |  | ---------------------------------------------------------------------



| |  |  | federal, state and local taxes;
| | - |  | -------------------------------



| |  |  | independent directors fees and expenses;
| | - |  | -----------------------------------------



| |  |  | brokerage commissions;
| | - |  | ----------------------



| |  |  | fidelity bond, directors and officers errors and omissions liability insurance and other insurance premiums;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | direct costs and expenses of administration, including printing, mailing, long distance telephone and staff;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | fees and expenses associated with independent audits and outside legal costs;
| | - |  | -----------------------------------------------------------------------------



| |  |  | costs associated with our reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | all other expenses incurred by either Solar Capital Management or us in connection with administering our business, including payments under the
Administration Agreement that will be based upon our allocable portion of overhead and other expenses incurred by Solar Capital Management in performing its obligations under the Administration Agreement, including rent, the fees and expenses
associated with performing compliance functions, and our allocable portion of the costs of compensation and related expenses of our chief compliance officer and our chief financial officer and any administrative support staff.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We expect our general and administrative operating expenses related to our ongoing operations to increase
moderately in dollar terms. During periods of asset growth, we generally expect our general and administrative operating expenses to decline as a percentage of our total assets and increase during periods of asset declines. Incentive fees, interest
expense and costs relating to future offerings of securities, among others, may also increase or reduce overall operating expenses based on portfolio performance, interest rate benchmarks, and offerings of our securities relative to comparative
periods, among other factors.

Portfolio and Investment Activity

During the three months ended March 31, 2017, we invested $62.5 million across 11 portfolio companies. This compares to
investing $18.9 million in 6 portfolio companies for the three months ended March 31, 2016. Investments sold or prepaid during the three months ended March 31, 2017 totaled $55.8 million versus $17.8 million for the three
months ended March 31, 2016.

At March 31, 2017, our portfolio consisted of 49 portfolio companies and was invested
80.0% in senior secured loans and 20.0% in common equity/equity interests/warrants (of which 9.6% is Gemino Healthcare Finance, LLC and 10.4% is First Lien Loan Program LLC) measured at fair value versus 47 portfolio companies invested 80.1% in
senior secured loans and 19.9% in common equity/equity interests (of which 11.0% is Gemino Healthcare Finance, LLC and 8.9% is First Lien Loan Program LLC) at March 31, 2016.

At March 31, 2017, 96.5% or $360.0 million of our income producing investment portfolio* was floating rate and 3.5% or
$13.1 million was fixed rate, measured at fair value. At March 31, 2016, 100% of our $312.2 million income producing investment portfolio* was floating rate, measured at fair value.

Since the initial public offering of Solar Senior on February 24, 2011 and through March 31, 2017, invested capital totaled
approximately $1.1 billion in 122 portfolio companies. Over the same period, Solar Senior completed transactions with more than 70 different financial sponsors.



|* | We have included First Lien Loan Program LLC and Gemino Healthcare Finance, LLC as 100% floating rate within our income producing investment portfolio.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------



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Gemino Healthcare Finance, LLC

We acquired Gemino Healthcare Finance, LLC (d/b/a Gemino Senior Secured Healthcare Finance) (Gemino) on September 30,
2013. Gemino is a commercial finance company that originates, underwrites, and manages primarily secured, asset-based loans for small and mid-sized companies operating in the healthcare industry. Our initial
investment in Gemino was $32.8 million. The management team of Gemino co-invested in the transaction and continues to lead Gemino.

Concurrent with the closing of the transaction, Gemino entered into a new, four-year, non-recourse, $100.0 million credit facility with non-affiliates, which was expandable to $150.0 million under its accordion feature. Effective March 31, 2014, the credit facility was expanded to $105.0 million and again on June 27, 2014 to
$110.0 million. On May 27, 2016, Gemino entered into a new $125.0 million credit facility which replaced the previously existing facility. The new facility has similar terms as compared to the previous facility and includes an
accordion feature increase to $200.0 million and has a maturity date of May 27, 2020.

On December 31, 2013, we
contributed our 32,839 units in Gemino to Gemino Senior Secured Healthcare LLC (Gemino Senior Secured Healthcare). In exchange for this contribution, we received 19,839 units of equity interests and $13.0 million in floating rate
secured notes of Gemino Senior Secured Healthcare bearing interest at LIBOR plus 7.50%, maturing on December 31, 2018. However, our financial statements, including our schedule of investments, reflected our investments in Gemino Senior Secured
Healthcare on a consolidated basis. On October 28, 2016, Gemino Senior Secured Healthcare was dissolved. As of March 31, 2017, Geminos management team and Solar Senior own approximately 6% and 94% of the equity in Gemino,
respectively.

Gemino currently manages a highly diverse portfolio of directly-originated and underwritten senior-secured
commitments. As of March 31, 2017, the portfolio totaled approximately $185.4 million of commitments, of which $107.7 million were funded, on total assets of $109.8 million. As of December 31, 2016, the portfolio
totaled approximately $186.4 million of commitments, of which $114.4 million were funded, on total assets of $118.5 million. At March 31, 2017, the portfolio consisted of 33 issuers with an average balance of approximately
$3.3 million versus 35 issuers with an average balance of approximately $3.3 million at December 31, 2016. All of the commitments in Geminos portfolio are floating-rate, senior-secured,
cash-pay loans. Geminos credit facility, which is non-recourse to us, had approximately $75.0 million and $83.0 million of borrowings outstanding at
March 31, 2017 and December 31, 2016, respectively. For the three months ended March 31, 2017 and 2016, Gemino had net income of $0.8 million and $1.4 million, respectively, on gross income of $2.9 million and
$3.8 million, respectively. Due to timing and non-cash items, there may be material differences between GAAP net income and cash available for distributions. As of March 31, 2017, and based upon our
expectations for Geminos portfolio performance, we believe that Gemino will be able to maintain its dividend payments to the Company.

First Lien Loan Program LLC

On September 10, 2014, the Company entered into a limited liability company agreement to create a First Lien Loan Program (FLLP) with Voya Investment Management LLC (Voya).
Voya acts as the investment advisor for several wholly-owned insurance subsidiaries of Voya Financial, Inc. (NYSE: VOYA). The joint venture vehicle, structured as an unconsolidated Delaware limited liability company, is expected to invest primarily
in senior secured floating rate term loans to middle market companies predominantly owned by private equity sponsors or entrepreneurs. Solar Senior and Voya have committed to provide $50.75 million and $7.25 million, respectively, of
capital to the joint venture. All portfolio decisions and generally all other decisions in respect of the FLLP must be approved by an investment committee of the FLLP consisting of representatives of the Company and Voya (with approval from a
representative of each required). On February 13, 2015, FLLP commenced operations. On February 13, 2015, FLLP as transferor and FLLP 2015-1, LLC, a newly formed wholly owned subsidiary of FLLP, as
borrower entered into a $75.0 million senior secured revolving credit facility (the FLLP Facility) with Wells Fargo Securities, LLC acting as administrative agent. Solar Senior Capital Ltd. acts as servicer under the FLLP
Facility. The FLLP Facility was scheduled to mature on



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February 13, 2020. The FLLP Facility generally bears interest at a rate of LIBOR plus a range of 2.25%-2.50%. FLLP and FLLP 2015-1, LLC, as applicable, have made certain customary representations and warranties, and are required to comply with various covenants, including leverage restrictions, reporting requirements and other customary
requirements for similar credit facilities. The FLLP Facility also includes usual and customary events of default for credit facilities of this nature. On August 15, 2016, the FLLP Facility was amended, expanding commitments to
$100.0 million and extending the maturity date to August 16, 2021. There were $75.2 million and $75.9 million of borrowings outstanding as of March 31, 2017 and December 31, 2016, respectively. As of March 31, 2017 and
December 31, 2016, Solar Senior and Voya contributed combined equity capital in the amount of $47.1 million and $47.1 million, respectively. Of the $47.1 million of contributed equity capital at March 31, 2017, the Company
contributed $29.6 million in the form of investments and $11.6 million in the form of cash and Voya contributed $5.9 million in the form of cash. As of March 31, 2017, Solar Senior and Voyas remaining commitments totaled
$9.6 million and $1.4 million, respectively. The Company, along with Voya, controls the funding of FLLP and FLLP may not call the unfunded commitments without approval of both the Company and Voya.

As of March 31, 2017 and December 31, 2016, FLLP had total assets of $127.2 million and $122.2 million, respectively.
For the same periods, FLLPs portfolio consisted of first lien floating rate senior secured loans to 26 and 25 different borrowers, respectively. For the three months ended March 31, 2017 and 2016, FLLP invested $12.0 million across 6
portfolio companies and $17.1 million across 4 portfolio companies, respectively. Investments prepaid totaled $5.0 million and $1.0 million, respectively, for the three months ended March 31, 2017 and 2016. At March 31, 2017
and December 31, 2016, the weighted average yield of FLLPs portfolio was 6.6% and 6.6%, respectively, measured at fair value and 6.6% and 6.5%, respectively, measured at cost.



40



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##### Table of Contents

FLLP Portfolio as of March 31, 2017 (in thousands)



|                                                       |  |                                                |  |                     |       |     |            |  |      |                 |  |  |              |   |  |           |          |  |      |   |       |              |  |   |         |  |  |   |         | 
|------------------------------------------------------ |  | ---------------------------------------------- |  | ------------------- | ----- | --- | ---------- |  | ---- | --------------- |  |  | ------------ | - |  | --------- | -------- |  | ---- | - | ----- | ------------ |  | - | ------- |  |  | - | ------- | 
|Description                                            |  | Industry                                       |  | SpreadAboveIndex(1) |       |     | LIBORFloor |  |      | InterestRate(2) |  |  | MaturityDate |   |  | ParAmount |          |  | Cost |   |       | FairValue(3) | 
|1A Smart Start LLC                                     |  | Electronic Equipment, Instruments & Components |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.90         | % |  |           | 2/21/22  |  |      | $ | 7,900 |              |  | $ | 7,838   |  |  | $ | 7,900   | 
|Alera Group Intermediate Holdings, Inc.(4)             |  | Insurance                                      |  |                     | L+550 |     |            |  | 1.00 | %               |  |  | 6.50         | % |  |           | 12/30/22 |  |      |   | 3,456 |              |  |   | 3,423   |  |  |   | 3,422   | 
|Anesthesia Consulting & Management, LP(4)              |  | Health Care Providers & Services               |  |                     | L+500 |     |            |  | 1.00 | %               |  |  | 6.04         | % |  |           | 10/31/22 |  |      |   | 4,988 |              |  |   | 4,941   |  |  |   | 4,938   | 
|Capstone Logistics Acquisition, Inc.(4)                |  | Professional Services                          |  |                     | L+450 |     |            |  | 1.00 | %               |  |  | 5.50         | % |  |           | 10/7/21  |  |      |   | 5,361 |              |  |   | 5,322   |  |  |   | 5,321   | 
|CIBT Holdings, Inc.(4)                                 |  | Professional Services                          |  |                     | L+525 |     |            |  | 1.00 | %               |  |  | 6.40         | % |  |           | 6/28/22  |  |      |   | 2,607 |              |  |   | 2,584   |  |  |   | 2,594   | 
|Confie Seguros Holding II Co.(4)                       |  | Insurance                                      |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 4/19/22  |  |      |   | 5,486 |              |  |   | 5,435   |  |  |   | 5,522   | 
|DB Datacenter Holdings, Inc.(4)                        |  | IT Services                                    |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 7/13/21  |  |      |   | 5,500 |              |  |   | 5,453   |  |  |   | 5,417   | 
|Empower Payments Acquisition, Inc. (RevSpring)(4)      |  | Professional Services                          |  |                     | L+550 |     |            |  | 1.00 | %               |  |  | 6.65         | % |  |           | 11/30/23 |  |      |   | 4,613 |              |  |   | 4,524   |  |  |   | 4,521   | 
|Falmouth Group Holdings Corp. (AMPAC)(4)               |  | Chemicals                                      |  |                     | L+675 |     |            |  | 1.00 | %               |  |  | 7.75         | % |  |           | 12/14/21 |  |      |   | 5,472 |              |  |   | 5,472   |  |  |   | 5,472   | 
|Island Medical Management Holdings, LLC(4)             |  | Health Care Providers & Services               |  |                     | L+550 |     |            |  | 1.00 | %               |  |  | 6.50         | % |  |           | 9/1/22   |  |      |   | 4,604 |              |  |   | 4,558   |  |  |   | 4,558   | 
|Kellermeyer Bergensons Services, LLC (KBS)(4)          |  | Commercial Services & Supplies                 |  |                     | L+500 |     |            |  | 1.00 | %               |  |  | 6.04         | % |  |           | 10/29/21 |  |      |   | 2,438 |              |  |   | 2,420   |  |  |   | 2,413   | 
|MedRisk, LLC                                           |  | Health Care Providers & Services               |  |                     | L+525 |     |            |  | 1.00 | %               |  |  | 6.35         | % |  |           | 3/1/23   |  |      |   | 3,960 |              |  |   | 3,925   |  |  |   | 3,960   | 
|Metamorph US 3, LLC (Metalogix)(4)                     |  | Software                                       |  |                     | L+750 | (5) |            |  | 1.00 | %               |  |  | 8.50         | % |  |           | 12/1/20  |  |      |   | 4,009 |              |  |   | 3,941   |  |  |   | 2,566   | 
|Ministry Brands, LLC(4)                                |  | Software                                       |  |                     | L+500 |     |            |  | 1.00 | %               |  |  | 6.00         | % |  |           | 12/2/22  |  |      |   | 4,152 |              |  |   | 4,112   |  |  |   | 4,111   | 
|Pearl Merger Sub, LLC (PetVet)(4)                      |  | Health Care Facilities                         |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.90         | % |  |           | 12/17/20 |  |      |   | 5,376 |              |  |   | 5,304   |  |  |   | 5,322   | 
|Pet Holdings ULC & Pet Supermarket, Inc.               |  | Specialty Retail                               |  |                     | L+550 |     |            |  | 1.00 | %               |  |  | 6.50         | % |  |           | 7/5/22   |  |      |   | 4,630 |              |  |   | 4,567   |  |  |   | 4,572   | 
|PSP Group, LLC (Pet Supplies Plus)(4)                  |  | Specialty Retail                               |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.90         | % |  |           | 4/6/21   |  |      |   | 5,340 |              |  |   | 5,304   |  |  |   | 5,326   | 
|QBS Holding Company, Inc. (Quorum)(4)                  |  | Software                                       |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.79         | % |  |           | 8/7/21   |  |      |   | 3,421 |              |  |   | 3,396   |  |  |   | 3,301   | 
|Salient Partners, L.P.(4)                              |  | Asset Management                               |  |                     | L+850 |     |            |  | 1.00 | %               |  |  | 9.52         | % |  |           | 6/9/21   |  |      |   | 5,012 |              |  |   | 4,937   |  |  |   | 4,937   | 
|Sarnova HC, LLC                                        |  | Trading Companies and Distributors             |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 1/28/22  |  |      |   | 4,950 |              |  |   | 4,909   |  |  |   | 4,950   | 
|Suburban Broadband, LLC (Jab Wireless, Inc.)(4)        |  | Wireless Telecommunication Services            |  |                     | L+450 |     |            |  | 1.00 | %               |  |  | 5.54         | % |  |           | 3/26/19  |  |      |   | 8,126 |              |  |   | 8,031   |  |  |   | 8,045   | 
|Telular Corporation                                    |  | Wireless Telecommunication Services            |  |                     | L+425 |     |            |  | 1.25 | %               |  |  | 5.50         | % |  |           | 6/24/19  |  |      |   | 4,991 |              |  |   | 4,976   |  |  |   | 4,991   | 
|The Hilb Group, LLC & Gencorp Insurance Group, Inc.(4) |  | Insurance                                      |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.90         | % |  |           | 6/24/21  |  |      |   | 3,885 |              |  |   | 3,820   |  |  |   | 3,846   | 
|Tronair Parent Inc.                                    |  | Aerospace & Defense                            |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.86         | % |  |           | 9/8/23   |  |      |   | 4,975 |              |  |   | 4,928   |  |  |   | 4,950   | 
|VT Buyer Acquisition Corp. (Veritext)(4)               |  | Professional Services                          |  |                     | L+475 |     |            |  | 1.00 | %               |  |  | 5.75         | % |  |           | 1/29/22  |  |      |   | 5,398 |              |  |   | 5,372   |  |  |   | 5,371   | 
|Wirb-Copernicus Group, Inc.(4)                         |  | Professional Services                          |  |                     | L+500 |     |            |  | 1.00 | %               |  |  | 6.15         | % |  |           | 8/12/22  |  |      |   | 5,973 |              |  |   | 5,920   |  |  |   | 5,943   | 
|                                                       |  |                                                |  |                     |       |     |            |  |      |                 |  |  |              |   |  |           |          |  |      |   |       |              |  |   |         |  |  |   |         | 
|                                                       |  |                                                |  |                     |       |     |            |  |      |                 |  |  |              |   |  |           |          |  |      |   |       |              |  | $ | 125,412 |  |  | $ | 124,269 | 
|                                                       |  |                                                |  |                     |       |     |            |  |      |                 |  |  |              |   |  |           |          |  |      |   |       |              |  |   |         |  |  |   |         | 



|(1) | Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR or PRIME rate. These instruments are typically subject to
a LIBOR or PRIME rate floor.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Floating rate debt investments typically bear interest at a rate determined by reference to either the London Interbank Offered Rate (LIBOR or
L) index rate or the prime index rate (PRIME or P), and which typically reset monthly, quarterly or semi-annually. For each debt investment we have provided the current interest rate in effect as of March 31, 2017.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Boards valuation process described
elsewhere herein.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The Company also holds this security on its Consolidated Statements of Assets and Liabilities.
|--- | ----------------------------------------------------------------------------------------------

|(5) | Spread is 5.50% Cash / 2.0% PIK.
|--- | --------------------------------



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FLLP Portfolio as of December 31, 2016 (audited) (in thousands)



|                                                       |  |                                               |  |                     |  |            |      |   |                 |  |      |              |  |  |           |  |  |      |       |  |              |   |         |  |  |   |         | 
|------------------------------------------------------ |  | --------------------------------------------- |  | ------------------- |  | ---------- | ---- | - | --------------- |  | ---- | ------------ |  |  | --------- |  |  | ---- | ----- |  | ------------ | - | ------- |  |  | - | ------- | 
|Description                                            |  | Industry                                      |  | SpreadAboveIndex(1) |  | LIBORFloor |      |   | InterestRate(2) |  |      | MaturityDate |  |  | ParAmount |  |  | Cost |       |  | FairValue(3) |  
|1A Smart Start LLC                                     |  | Electronic Equipment,Instruments & Components |  | L+475               |  |            | 1.00 | % |                 |  | 5.75 | %            |  |  | 2/21/22   |  |  | $    | 7,920 |  |              | $ | 7,855   |  |  | $ | 7,920   | 
|Alera Group Intermediate Holdings,
Inc.(4)             |  | Insurance                                     |  | L+550               |  |            | 1.00 | % |                 |  | 6.50 | %            |  |  | 12/30/22  |  |  |      | 3,456 |  |              |   | 3,422   |  |  |   | 3,422   | 
|Anesthesia Consulting & Management,
LP(4)              |  | Health Care Providers &Services               |  | L+500               |  |            | 1.00 | % |                 |  | 6.00 | %            |  |  | 10/31/22  |  |  |      | 5,000 |  |              |   | 4,951   |  |  |   | 4,950   | 
|Capstone Logistics Acquisition,
Inc.(4)                |  | Professional Services                         |  | L+450               |  |            | 1.00 | % |                 |  | 5.50 | %            |  |  | 10/7/21   |  |  |      | 5,361 |  |              |   | 5,320   |  |  |   | 5,308   | 
|CIBT Holdings, Inc.(4)                                 |  | Professional Services                         |  | L+525               |  |            | 1.00 | % |                 |  | 6.25 | %            |  |  | 6/28/22   |  |  |      | 2,620 |  |              |   | 2,596   |  |  |   | 2,594   | 
|Confie Seguros Holding II Co.(4)                       |  | Insurance                                     |  | L+475               |  |            | 1.00 | % |                 |  | 5.75 | %            |  |  | 4/19/22   |  |  |      | 5,500 |  |              |   | 5,447   |  |  |   | 5,537   | 
|DB Datacenter Holdings, Inc.(4)                        |  | IT Services                                   |  | L+475               |  |            | 1.00 | % |                 |  | 5.75 | %            |  |  | 7/13/21   |  |  |      | 5,500 |  |              |   | 5,450   |  |  |   | 5,417   | 
|Empower Payments Acquisition, Inc.
(RevSpring)(4)      |  | Professional Services                         |  | L+550               |  |            | 1.00 | % |                 |  | 6.50 | %            |  |  | 11/30/23  |  |  |      | 4,625 |  |              |   | 4,533   |  |  |   | 4,532   | 
|Falmouth Group Holdings Corp.
(AMPAC)(4)               |  | Chemicals                                     |  | L+675               |  |            | 1.00 | % |                 |  | 7.75 | %            |  |  | 12/14/21  |  |  |      | 5,486 |  |              |   | 5,486   |  |  |   | 5,486   | 
|Kellermeyer Bergensons Services, LLC
(KBS)(4)          |  | Commercial Services &Supplies                 |  | L+500               |  |            | 1.00 | % |                 |  | 6.00 | %            |  |  | 10/29/21  |  |  |      | 2,438 |  |              |   | 2,419   |  |  |   | 2,389   | 
|MedRisk, LLC                                           |  | Health Care Providers &Services               |  | L+525               |  |            | 1.00 | % |                 |  | 6.25 | %            |  |  | 3/1/23    |  |  |      | 3,970 |  |              |   | 3,934   |  |  |   | 3,970   | 
|Metamorph US 3, LLC (Metalogix)(4)                     |  | Software                                      |  | L+650               |  |            | 1.00 | % |                 |  | 7.50 | %            |  |  | 12/1/20   |  |  |      | 4,000 |  |              |   | 3,928   |  |  |   | 2,860   | 
|Ministry Brands, LLC(4)                                |  | Software                                      |  | L+500               |  |            | 1.00 | % |                 |  | 6.00 | %            |  |  | 12/2/22   |  |  |      | 2,746 |  |              |   | 2,719   |  |  |   | 2,719   | 
|Pearl Merger Sub, LLC (PetVet)(4)                      |  | Health Care Facilities                        |  | L+475               |  |            | 1.00 | % |                 |  | 5.75 | %            |  |  | 12/17/20  |  |  |      | 5,390 |  |              |   | 5,313   |  |  |   | 5,329   | 
|Pet Holdings ULC & Pet Supermarket, Inc.               |  | Specialty Retail                              |  | L+550               |  |            | 1.00 | % |                 |  | 6.50 | %            |  |  | 7/5/22    |  |  |      | 4,538 |  |              |   | 4,474   |  |  |   | 4,481   | 
|PSP Group, LLC (Pet Supplies Plus)(4)                  |  | Specialty Retail                              |  | L+475               |  |            | 1.00 | % |                 |  | 5.75 | %            |  |  | 4/6/21    |  |  |      | 5,353 |  |              |   | 5,315   |  |  |   | 5,327   | 
|QBS Holding Company, Inc. (Quorum)(4)                  |  | Software                                      |  | L+475               |  |            | 1.00 | % |                 |  | 5.75 | %            |  |  | 8/7/21    |  |  |      | 3,430 |  |              |   | 3,404   |  |  |   | 3,293   | 
|Salient Partners, L.P.(4)                              |  | Asset Management                              |  | L+850               |  |            | 1.00 | % |                 |  | 9.50 | %            |  |  | 6/9/21    |  |  |      | 5,154 |  |              |   | 5,073   |  |  |   | 5,025   | 
|Sarnova HC, LLC                                        |  | Trading Companies andDistributors             |  | L+475               |  |            | 1.00 | % |                 |  | 5.75 | %            |  |  | 1/28/22   |  |  |      | 4,963 |  |              |   | 4,919   |  |  |   | 4,962   | 
|Suburban Broadband, LLC (Jab Wireless,
Inc.)(4)        |  | Wireless TelecommunicationServices            |  | L+450               |  |            | 1.00 | % |                 |  | 5.50 | %            |  |  | 3/26/19   |  |  |      | 8,168 |  |              |   | 8,060   |  |  |   | 8,086   | 
|Telular Corporation                                    |  | Wireless TelecommunicationServices            |  | L+425               |  |            | 1.25 | % |                 |  | 5.50 | %            |  |  | 6/24/19   |  |  |      | 5,063 |  |              |   | 5,047   |  |  |   | 5,051   | 
|The Hilb Group, LLC & Gencorp Insurance Group, Inc.(4) |  | Insurance                                     |  | L+500               |  |            | 1.00 | % |                 |  | 6.00 | %            |  |  | 6/24/21   |  |  |      | 3,814 |  |              |   | 3,747   |  |  |   | 3,776   | 
|Tronair Parent Inc.                                    |  | Aerospace & Defense                           |  | L+475               |  |            | 1.00 | % |                 |  | 5.75 | %            |  |  | 9/8/23    |  |  |      | 4,988 |  |              |   | 4,939   |  |  |   | 4,963   | 
|VT Buyer Acquisition Corp.
(Veritext)(4)               |  | Professional Services                         |  | L+500               |  |            | 1.00 | % |                 |  | 6.00 | %            |  |  | 1/29/22   |  |  |      | 4,481 |  |              |   | 4,443   |  |  |   | 4,459   | 
|Wirb-Copernicus Group, Inc.                            |  | Professional Services                         |  | L+500               |  |            | 1.00 | % |                 |  | 6.00 | %            |  |  | 8/12/22   |  |  |      | 5,486 |  |              |   | 5,434   |  |  |   | 5,431   | 
|                                                       |  |                                               |  |                     |  |            |      |   |                 |  |      |              |  |  |           |  |  |      |       |  |              |   |         |  |  |   |         | 
|                                                       |  |                                               |  |                     |  |            |      |   |                 |  |      |              |  |  |           |  |  |      |       |  |              | $ | 118,228 |  |  | $ | 117,287 | 
|                                                       |  |                                               |  |                     |  |            |      |   |                 |  |      |              |  |  |           |  |  |      |       |  |              |   |         |  |  |   |         | 



|(1) | Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR or PRIME rate. These instruments are typically subject to
a LIBOR or PRIME rate floor.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Floating rate debt investments typically bear interest at a rate determined by reference to either the London Interbank Offered Rate (LIBOR or
L) index rate or the prime index rate (PRIME or P), and which typically reset monthly, quarterly or semi-annually. For each debt investment we have provided the current interest rate in effect as of December 31, 2016.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Boards valuation process described
elsewhere herein.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The Company also holds this security on its Consolidated Statements of Assets and Liabilities.
|--- | ----------------------------------------------------------------------------------------------



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Below is certain summarized financial information for FLLP as of March 31, 2017 and
December 31, 2016 and for the three months ended March 31, 2017 and 2016:



|                                                                     |  |               |         |  |                           |   |         | 
|-------------------------------------------------------------------- |  | ------------- | ------- |  | ------------------------- | - | ------- | 
|                                                                     |  | March 31,2017 |         |  | December 31,2016(audited) |  
|Selected Balance Sheet Information for FLLP (in thousands):          |  |               |         |  |                           |   |         | 
|Investments at fair value (cost $125,412 and $118,228, respectively) |  | $             | 124,269 |  |                           | $ | 117,287 | 
|Cash and other assets.                                               |  |               | 2,924   |  |                           |   | 4,938   | 
|                                                                     |  |               |         |  |                           |   |         | 
|Total assets                                                         |  | $             | 127,193 |  |                           | $ | 122,225 | 
|                                                                     |  |               |         |  |                           |   |         | 
|Debt outstanding                                                     |  | $             | 75,165  |  |                           | $ | 75,941  | 
|Payable for investments purchased                                    |  |               | 5,708   |  |                           |   |        | 
|Distributions payable                                                |  |               | 1,123   |  |                           |   | 981     | 
|Interest payable and other credit facility related expenses          |  |               | 732     |  |                           |   | 708     | 
|Accrued expenses and other payables                                  |  |               | 132     |  |                           |   | 241     | 
|                                                                     |  |               |         |  |                           |   |         | 
|Total liabilities                                                    |  | $             | 82,860  |  |                           | $ | 77,871  | 
|                                                                     |  |               |         |  |                           |   |         | 
|Members equity                                                      |  | $             | 44,333  |  |                           | $ | 44,354  | 
|                                                                     |  |               |         |  |                           |   |         | 
|Total liabilities and members equity                                |  | $             | 127,193 |  |                           | $ | 122,225 | 
|                                                                     |  |               |         |  |                           |   |         | 



|                                                               |  |                                 |       |   |                                 |   |       | 
|-------------------------------------------------------------- |  | ------------------------------- | ----- | - | ------------------------------- | - | ----- | 
|                                                               |  | Three monthsendedMarch 31, 2017 |       |   | Three monthsendedMarch 31, 2016 |  
|Selected Income Statement Information for FLLP (in thousands): |  |                                 |       |   |                                 |   |       | 
|Interest income                                                |  | $                               | 2,007 |   |                                 | $ | 1,343 | 
|                                                               |  |                                 |       |   |                                 |   |       | 
|Service fees*                                                  |  | $                               | 20    |   |                                 | $ | 14    | 
|Interest and other credit facility expenses                    |  |                                 | 692   |   |                                 |   | 464   | 
|Other general and administrative expenses                      |  |                                 | (8    | ) |                                 |   | 35    | 
|                                                               |  |                                 |       |   |                                 |   |       | 
|Total expenses                                                 |  |                                 | 704   |   |                                 |   | 513   | 
|                                                               |  |                                 |       |   |                                 |   |       | 
|Net investment income                                          |  | $                               | 1,303 |   |                                 | $ | 830   | 
|                                                               |  |                                 |       |   |                                 |   |       | 
|Net change in unrealized gain (loss) on investments            |  |                                 | (202  | ) |                                 |   | 80    | 
|                                                               |  |                                 |       |   |                                 |   |       | 
|Net income                                                     |  | $                               | 1,101 |   |                                 | $ | 910   | 
|                                                               |  |                                 |       |   |                                 |   |       | 



|* | Service fees are included within the Companys Consolidated Statements of Operations as other income.
|- | -----------------------------------------------------------------------------------------------------

Solar Life Science Program LLC

On February 22, 2017, the Company and Solar Capital Ltd. formed LSJV with an affiliate of Deerfield Management. The Company committed $75.0 million to LSJV. As of March 31, 2017, LSJV has
not commenced operations.

Critical Accounting Policies

The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified
the following items as critical accounting policies. Within the context of these critical accounting policies and disclosed subsequent events herein, we are not currently aware of any other reasonably likely events or circumstances that would result
in materially different amounts being reported.



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Valuation of Portfolio Investments

We conduct the valuation of our assets, pursuant to which our net asset value is determined, at all times consistent with GAAP, and the
1940 Act. Our valuation procedures are set forth in more detail below:

The Company conducts the valuation of its assets in
accordance with GAAP and the 1940 Act. The Company generally values its assets on a quarterly basis, or more frequently if required. Investments for which market quotations are readily available on an exchange are valued at the closing price on the
date of valuation. The Company may also obtain quotes with respect to certain of its investments from pricing services or brokers or dealers in order to value assets. When doing so, management determines whether the quote obtained is sufficient
according to GAAP to determine the fair value of the investment. If determined adequate, the Company uses the quote obtained. Debt investments with maturities of 60 days or less shall each be valued at cost plus accreted discount, or minus amortized
premium, which is expected to approximate fair value, unless such valuation, in the judgment of the Investment Adviser, does not represent fair value, in which case such investments shall be valued at fair value as determined in good faith by or
under the direction of the Companys board of directors (the Board).

Investments for which reliable market
quotations are not readily available or for which the pricing sources do not provide a valuation or methodology or provide a valuation or methodology that, in the judgment of the Investment Adviser or the Board does not represent fair value, each
shall be valued as follows: (i) each portfolio company or investment is initially valued by the investment professionals responsible for the portfolio investment; (ii) preliminary valuations are discussed with senior management of the
Investment Adviser; (iii) independent valuation firms engaged by, or on behalf of, the Board will conduct independent appraisals and review the Investment Advisers preliminary valuations and make their own independent assessment for
(a) each portfolio investment that, when taken together with all other investments in the same portfolio company, exceeds 10% of estimated total assets, plus available borrowings, as of the end of the most recently completed fiscal quarter, and
(b) each portfolio investment that is presently in payment default; (iv) the Board will discuss the valuations and determine the fair value of each investment in our portfolio in good faith based on the input of the Investment Adviser and,
where appropriate, the respective independent valuation firm.

The recommendation of fair value generally considers the
following factors among others, as relevant: applicable market yields; the nature and realizable value of any collateral; the portfolio companys ability to make payments; the portfolio companys earnings and discounted cash flow; the
markets in which the issuer does business; and comparisons to publicly traded securities, among others.

When an external
event such as a purchase transaction, public offering or subsequent equity sale occurs, the Company will consider the pricing indicated by the external event to corroborate the valuation. 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 investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the
differences could be material.

Investments are valued utilizing a market approach, an income approach, or both approaches, as
appropriate. However, in accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946, may be valued using net asset value as a practical expedient for fair
value. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation approaches to convert future
amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors
that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security
covenants, call protection provisions, the nature and realizable value of any collateral, the portfolio companys ability to make payments, its earnings and



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discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values,
among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process. For the three months ended March 31, 2017, there has been no change to the Companys
valuation approaches or techniques and the nature of the related inputs considered in the valuation process.

Accounting
Standards Codification (ASC) Topic 820 classifies the inputs used to measure these fair values into the following hierarchy:

Level1: Quoted prices in active markets for identical assets or liabilities, accessible by the Company at the measurement date.

Level2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or
similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level3: Unobservable inputs for the asset or liability.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on
the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment.
The exercise of judgment is based in part on our knowledge of the asset class and our prior experience.

Determination of fair
value involves subjective judgments and estimates. Accordingly, the notes to our consolidated financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated
financial statements.

Valuation of Credit Facility

The Company has made an irrevocable election to apply the fair value option of accounting to the Credit Facility, in accordance with ASC 825-10. We believe
accounting for the Credit Facility at fair value better aligns the measurement methodologies of assets and liabilities, which may mitigate certain earnings volatility.

Revenue Recognition

The Company records dividend income and
interest, adjusted for amortization of premium and accretion of discount, on an accrual basis. Investments that are expected to pay regularly scheduled interest and/or dividends in cash are generally placed on
non-accrual status when principal or interest/dividend cash payments are past due 30 days or more and/or when it is no longer probable that principal or interest/dividend cash payments will be collected. Such non-accrual investments are restored to accrual status if past due principal and interest or dividends are paid in cash, and in managements judgment, are likely to continue timely payment of their remaining
interest or dividend obligations. Interest or dividend cash payments received on investments may be recognized as income or applied to principal depending upon managements judgment. Some of our investments may have contractual PIK interest or
dividends. PIK interest and dividends computed at the contractual rate are accrued into income and reflected as receivable up to the capitalization date. PIK investments offer issuers the option at each payment date of making payments in cash or in
additional securities. When additional securities are received, they typically have the same terms, including maturity dates and interest rates as the original securities issued. On these payment dates, the Company capitalizes the accrued interest
or dividends receivable (reflecting such amounts as the basis in the additional securities received). PIK generally becomes due at the maturity of the investment or upon the investment being called by the issuer. At the point the Company believes
PIK is not expected to be realized, the PIK investment will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued,
uncapitalized interest or dividends is reversed from the



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related receivable through interest or dividend income, respectively. The Company does not reverse previously capitalized PIK interest or dividends. Upon capitalization, PIK is subject to the
fair value estimates associated with their related investments. PIK investments on non-accrual status are restored to accrual status if the Company again believes that PIK is expected to be realized. Loan
origination fees, original issue discount, and market discounts are capitalized and amortized into income using the interest method or straight-line, as applicable. Upon the prepayment of a loan, any unamortized loan origination fees are recorded as
interest income. We record prepayment premiums on loans and other investments as interest income when we receive such amounts. Capital structuring fees are recorded as other income when earned.

The typically higher yields and interest rates on PIK securities, to the extent we invested, reflects the payment deferral and increased
credit risk associated with such instruments and that such investments may represent a significantly higher credit risk than coupon loans. PIK securities may have unreliable valuations because their continuing accruals require continuing judgments
about the collectability of the deferred payments and the value of any associated collateral. PIK interest has the effect of generating investment income and increasing the incentive fees payable at a compounding rate. In addition, the deferral of
PIK interest also increases the loan-to-value ratio at a compounding rate. PIK securities create the risk that incentive fees will be paid to the Investment Adviser
based on non-cash accruals that ultimately may not be realized, but the Investment Adviser will be under no obligation to reimburse the Company for these fees. For the three months ended March 31, 2017
and 2016, capitalized PIK income totaled $0.1 million and $0.0 million, respectively.

Net Realized Gain or Loss and Net
Change in Unrealized Gain or Loss

We generally measure realized gain or loss by the difference between the net
proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized origination or commitment fees and prepayment penalties.
The net change in unrealized gain or loss reflects the change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized gain or loss, when gains or losses are realized. Gains or losses on
investments are calculated by using the specific identification method.

Income Taxes

Solar Senior Capital, a U.S. corporation, has elected to be treated as a RIC under Subchapter M of the Code. In order to qualify for
taxation as a RIC, the Company is required, among other things, to timely distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, for each year. Depending on the level of taxable income earned in a
given tax year, we may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current
year annual taxable income will be in excess of estimated current year distributions, the Company accrues an estimated excise tax, if any, on estimated excess taxable income.

Recent Accounting Pronouncements

In October 2016, the U.S. Securities and
Exchange Commission adopted new rules and amended rules (together, final rules) interned to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017. The Company is currently evaluating the impact that the adoption of the amendments to Regulation S-X will have on its consolidated financial
statements and disclosures.

In November 2016, FASB issued ASU 2016-18, Statement of
Cash Flows, which will amend FASB ASC 230. The amendments in this Update require that a statement of cash flows explain the change during the period



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in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted
cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update apply to all entities that have restricted cash or restricted cash equivalents and are required to present a
statement of cash flows under Topic 230. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including
adoption in an interim period. The Company is evaluating the impact of ASU 2016-18 on its consolidated financial statements and disclosures.

In December 2016, the FASB issued ASU 2016-19, Technical Corrections and Improvements. As part of
this guidance, ASU 2016-19 amends FASB ASC 820 to clarify the difference between a valuation approach and a valuation technique. The amendment also requires an entity to disclose when there has been a change
in either or both a valuation approach and/or a valuation technique. ASU 2016-19 is effective on a prospective basis for financial statements issued for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2016 on a prospective basis. The Company has evaluated the impact of ASU 2016-19 on its consolidated financial statements and disclosures and determined that the
adoption of ASU 2016-19 has not had a material impact on its consolidated financial statements.

RESULTS OF OPERATIONS

Results comparisons are for the three months ended March 31, 2017 and 2016:

Investment Income

For the three months ended March 31, 2017 and 2016,
gross investment income totaled $7.5 million and $6.3 million, respectively. The increase in gross investment income year over year three month periods was primarily due to a larger average investment portfolio size year over year and to
the continued growth of the FLLP portfolio.

Expenses

Net expenses totaled $1.8 million and $2.3 million, respectively, for the three months ended March 31, 2017 and 2016, of which $1.0 million and $1.2 million, respectively, were
gross base management fees and gross performance-based incentive fees and $0.8 million and $0.9 million, respectively, were interest and other credit facility expenses. Over the same periods, $0.8 million and $0.0 million,
respectively, of base management fees were waived and $0.1 million and $0.4 million, respectively, of performance-based incentive fees were waived. Administrative services and other general and administrative expenses totaled
$0.8 million and $0.6 million, respectively, for the three months ended March 31, 2017 and 2016. Expenses generally consist of management fees, performance-based incentive fees, administrative services expenses, insurance, legal
expenses, directors expenses, audit and tax expenses, transfer agent fees and expenses, and other general and administrative expenses. Interest and other credit facility expenses generally consist of interest, unused fees, agency fees and loan
origination fees, if any, among others. For the three month periods, the decrease in net expenses year over year is primarily due to a management fee waiver.

Net Investment Income

The Companys net investment income totaled
$5.6 million and $4.1 million, or $0.35 and $0.35, per average share, respectively, for the three months ended March 31, 2017 and 2016.

Net Realized Gain

The Company had investment sales and prepayments
totaling approximately $55.8 million and $17.8 million, respectively, for the three months ended March 31, 2017 and 2016. Net realized gains over the



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same periods were $0.1 million and $0.0 million, respectively. Net realized gains for the three months ended March 31, 2017 and March 31, 2016 were primarily related to
partial or complete sales of select investments.

Net Change in Unrealized Gain (Loss)

For the three months ended March 31, 2017 and 2016, net change in unrealized gain (loss) on the Companys assets and liabilities
totaled $0.2 million and $4.3 million, respectively. Net unrealized gain for the three months ended March 31, 2017 is primarily due to appreciation in the value of our investments in Securus Technologies, TwentyEighty, Inc. and
American Teleconferencing Services, Inc., among others, partially offset by depreciation in Metamorph US 3, LLC, Aegis Toxicology Sciences Corporation and nThrive, Inc., among others. Net unrealized gain for the three months ended March 31,
2016 is primarily due to appreciation in the value of our investments in Securus Technologies, Inc., Gemino, CGSC of Delaware Holdings Corp., Asurion, LLC and Global Tel*Link Corporation, among others, partially offset by depreciation in Hostway
Corporation, Aegis Toxicology Sciences Corporation and Salient Partners, L.P., among others.

Net Increase in Net Assets From Operations

For the three months ended March 31, 2017 and 2016, the Company had a net increase in net assets resulting from
operations of $5.9 million and $8.4 million, respectively. For the same periods, earnings per average share were $0.37 and $0.73, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Companys liquidity and capital
resources are generally available through its Credit Facility, through periodic follow-on equity offerings, as well as from cash flows from operations, investment sales and
pre-payments of investments. At March 31, 2017, the Company had $86.8 million in borrowings outstanding on its Credit Facility and $113.2 million of unused capacity, subject to borrowing base
limits.

In September 2016, the Company closed a follow-on public equity offering of
4.5 million shares of common stock at $16.76 per share raising approximately $75.0 million in net proceeds. In the future, the Company may raise additional equity or debt capital, among other considerations. The primary uses of funds will
be investments in portfolio companies, reductions in debt outstanding and other general corporate purposes. The issuance of debt or equity securities will depend on future market conditions, funding needs and other factors and there can be no
assurance that any such issuance will occur or be successful.

We currently expect that our liquidity needs will be met with
cash flows from operations, borrowings under our Credit Facility, including its accordion feature, as well as from other available financing activities.

Cash Equivalents

We deem certain U.S. Treasury bills, repurchase
agreements and other high-quality, short-term debt securities as cash equivalents. The Company makes purchases that are consistent with its purpose of making investments in securities described in paragraphs 1 through 3 of Section 55(a) of the 1940
Act. From time to time, including at or near the end of each fiscal quarter, we consider using various temporary investment strategies for our business. One strategy includes taking proactive steps by utilizing cash equivalents as temporary assets
with the objective of enhancing our investment flexibility pursuant to Section 55 of the 1940 Act. More specifically, from time-to-time we may purchase U.S.
Treasury bills or other high-quality, short-term debt securities at or near the end of the quarter and typically close out the position on a net cash basis subsequent to quarter end. We may also utilize repurchase agreements or other balance sheet
transactions, including drawing down on our credit facilities, as deemed appropriate. The amount of these transactions or such drawn cash for this purpose is excluded from total assets for purposes of computing the asset base upon which the
management fee is determined. We held approximately $125 million in cash equivalents as of March 31, 2017.



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Debt

Senior Secured Revolving Credit FacilityOn August 26, 2011, the Company established the SPV which entered into the Credit Facility with Citigroup Global Markets Inc. acting as
administrative agent. On January 10, 2017, commitments to the Credit Facility, as amended, were increased from $175 million to $200 million by utilizing the accordion feature. It can also be expanded up to $600 million. The
stated interest rate on the Credit Facility is LIBOR plus 2.00% with no LIBOR floor requirement and the current final maturity date is June 30, 2020. The Credit Facility is secured by all of the assets held by the SPV. Under the terms of the
Credit Facility, Solar Senior Capital and the SPV, as applicable, have made certain customary representations and warranties, and are required to comply with various covenants, including leverage restrictions, reporting requirements and other
customary requirements for similar credit facilities. The Credit Facility also includes usual and customary events of default for credit facilities of this nature. The Credit Facility was amended on November 7, 2012, June 30, 2014 and
May 29, 2015 to extend maturities and add greater investment flexibility, among other changes. At March 31, 2017, the Company was in compliance with all financial and operational covenants required by the Credit Facility.

Contractual Obligations



|                                            |  |                                                                  |      |  |                 |   |   |           |  |   |           |  |  |                  |      |  |  |   |   | 
|------------------------------------------- |  | ---------------------------------------------------------------- | ---- |  | --------------- | - | - | --------- |  | - | --------- |  |  | ---------------- | ---- |  |  | - | - | 
|                                            |  | Payments due by Period as of March 31,
2017(dollars in millions) |     
|                                            |  | Total                                                            |      |  | Less than1 year |   |   | 1-3 years |  |   | 3-5 years |  |  | More than5 years |     
|Senior Secured Revolving Credit Facility(1) |  | $                                                                | 86.8 |  |                 | $ |  |           |  | $ |          |  |  | $                | 86.8 |  |  | $ |  | 



|(1) | At March 31, 2017, $113.2 million of capacity remained unused.
|--- | --------------------------------------------------------------

Information about our senior securities is shown in the following table (in thousands) as of each year ended December 31 since the Company commenced operations, unless otherwise noted. The
 indicates information which the SEC expressly does not require to be disclosed for certain types of senior securities.



|                                     |  |                             |         |  |                           |   |        |                                             |  |   |                                |  |  |  |     | 
|------------------------------------ |  | --------------------------- | ------- |  | ------------------------- | - | ------ | ------------------------------------------- |  | - | ------------------------------ |  |  |  | --- | 
|Class and Year                       |  | Total 
AmountOutstanding(1) |         |  | AssetCoveragePer 
Unit(2) |   |        | InvoluntaryLiquidatingPreferencePer Unit(3) |  |   | AverageMarket ValuePer
Unit(4) | 
|Revolving Credit Facility            |  |                             |         |  |                           |   |        |                                             |  |   |                                |  |  |  |     | 
|Fiscal 2017 (through March 31, 2017) |  | $                           | 86,800  |  |                           | $ | 4,104  |                                             |  | $ |                               |  |  |  | N/A | 
|Fiscal 2016                          |  |                             | 98,300  |  |                           |   | 3,738  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2015                          |  |                             | 116,200 |  |                           |   | 2,621  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2014                          |  |                             | 143,200 |  |                           |   | 2,421  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2013                          |  |                             | 61,400  |  |                           |   | 4,388  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2012                          |  |                             | 39,100  |  |                           |   | 5,453  |                                             |  |   |                               |  |  |  | N/A | 
|Fiscal 2011                          |  |                             | 8,600   |  |                           |   | 21,051 |                                             |  |   |                               |  |  |  | N/A | 



|(1) | Total amount of each class of senior securities outstanding at the end of the period presented.
|--- | -----------------------------------------------------------------------------------------------

|(2) | The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and
indebtedness not represented by senior securities, divided by senior securities representing indebtedness. This asset coverage ratio is multiplied by $1,000 to determine the Asset Coverage Per Unit. In order to determine the specific Asset Coverage
Per Unit for each class of debt, the total Asset Coverage Per Unit was divided based on the amount outstanding at the end of the period for each. As of March 31, 2017, asset coverage was 410.4%.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Not applicable, we do not have senior securities that are registered for public trading.
|--- | ----------------------------------------------------------------------------------------



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We have also entered into two contracts under which we have future commitments: the Advisory
Agreement, pursuant to which Solar Capital Partners, LLC has agreed to serve as our investment adviser, and the Administration Agreement, pursuant to which Solar Capital Management, LLC has agreed to furnish us with the facilities and administrative
services necessary to conduct our day-to-day operations and provide on our behalf managerial assistance to those portfolio companies to which we are required to provide
such assistance. Payments under the Advisory Agreement are equal to (1) a percentage of the value of our average gross assets and (2) a two-part incentive fee. Payments under the Administration
Agreement are equal to an amount based upon our allocable portion of the Administrators overhead in performing its obligations under the Administration Agreement, including rent, technology systems, insurance and our allocable portion of
the costs of our chief financial officer and chief compliance officer and their respective staffs. Either party may terminate each of the Advisory Agreement and Administration Agreement without penalty upon 60 days written notice to
the other. See note 3 to our Consolidated Financial Statements.

On September 10, 2014, FLLP entered into a servicing
agreement with the Company. FLLP engaged and retained the Company to provide certain administrative services relating to the facilities, supplies and necessary ongoing overhead support services for the operation of FLLPs ongoing business
affairs in exchange for a fee. Either party may terminate this agreement upon 30 days written notice to the other.

Off-Balance Sheet Arrangements

The Company had unfunded debt and equity commitments
to delayed draw and revolving loans as well as to Gemino Healthcare Finance, LLC. The total amount of these unfunded commitments as of March 31, 2017 and December 31, 2016 is $14.1 million and $13.1 million, respectively,
comprised of the following:



|                                                    |  |               |      |  |                  |   |      | 
|--------------------------------------------------- |  | ------------- | ---- |  | ---------------- | - | ---- | 
|                                                    |  | March 31,2017 |      |  | December 31,2016 |  
|(in millions)                                       |  |               |      |  |                  |   |      | 
|Gemino Healthcare Finance, LLC                      |  | $             | 5.0  |  |                  | $ | 5.0  | 
|Engineering Solutions & Products, LLC               |  |               | 1.6  |  |                  |   | 1.7  | 
|Alera Group Intermediate Holdings, Inc              |  |               | 1.6  |  |                  |   | 3.9  | 
|MHE Intermediate Holdings, LLC                      |  |               | 1.4  |  |                  |   |     | 
|Professional DataSolutions, Inc                     |  |               | 1.1  |  |                  |   |     | 
|The Hilb Group, LLC & Gencorp Insurance Group, Inc. |  |               | 1.0  |  |                  |   |     | 
|Ministry Brands, LLC                                |  |               | 0.7  |  |                  |   | 1.5  | 
|Island Medical Management Holdings, LLC             |  |               | 0.6  |  |                  |   |     | 
|VT Buyer Acquisition Corp. (Veritext)               |  |               | 0.5  |  |                  |   | 0.5  | 
|CIBT Holdings, Inc                                  |  |               | 0.5  |  |                  |   | 0.5  | 
|TwentyEighty, Inc                                   |  |               | 0.1  |  |                  |   |     | 
|                                                    |  |               |      |  |                  |   |      | 
|Total Commitments*                                  |  | $             | 14.1 |  |                  | $ | 13.1 | 
|                                                    |  |               |      |  |                  |   |      | 



|* | The Company controls the funding of the Gemino Healthcare Finance, LLC commitment and may cancel it at its discretion (also see First Lien Loan Program LLC section in
Item 7).
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of March 31, 2017 and December 31, 2016, the Company had sufficient cash available and/or
liquid securities available to fund its commitments as well as the commitments to FLLP and LSJV disclosed earlier.

In the
normal course of its business, we invest or trade in various financial instruments and may enter into various investment activities with off-balance sheet risk, which may include forward foreign currency
contracts. Generally, these financial instruments represent future commitments to purchase or sell other financial instruments at specific terms at future dates. These financial instruments contain varying degrees of
off-balance sheet risk whereby changes in the market value or our satisfaction of the obligations may exceed the amount recognized in our Consolidated Statements of Assets and Liabilities.



50



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Distributions

The following table reflects the cash distributions per share on our common stock for the two most recent fiscal years and the current fiscal year to date:



|                   |  |             |                    |  |              |  |                   |        |  |   |        | 
|------------------ |  | ----------- | ------------------ |  | ------------ |  | ----------------- | ------ |  | - | ------ | 
|Date Declared      |  | Record Date |                    |  | Payment Date |  |                   | Amount | 
|Fiscal 2017        |  |             |                    |  |              |  |                   |        |  |   |        | 
|May 2, 2017        |  |             | May 18, 2017       |  |              |  | June 2, 2017      |        |  | $ | 0.1175 | 
|April 6, 2017      |  |             | April 20, 2017     |  |              |  | May 2, 2017       |        |  |   | 0.1175 | 
|February 22, 2017  |  |             | March 23, 2017     |  |              |  | April 4, 2017     |        |  |   | 0.1175 | 
|February 7, 2017   |  |             | February 23, 2017  |  |              |  | March 1, 2017     |        |  |   | 0.1175 | 
|January 5, 2017    |  |             | January 19, 2017   |  |              |  | February 1, 2017  |        |  |   | 0.1175 | 
|                   |  |             |                    |  |              |  |                   |        |  |   |        | 
|YTD Total (2017)   |  |             |                    |  |              |  |                   |        |  | $ | 0.5875 | 
|                   |  |             |                    |  |              |  |                   |        |  |   |        | 
|Fiscal 2016        |  |             |                    |  |              |  |                   |        |  |   |        | 
|December 8, 2016   |  |             | December 22, 2016  |  |              |  | January 4, 2017   |        |  | $ | 0.1175 | 
|November 2, 2016   |  |             | November 23, 2016  |  |              |  | December 1, 2016  |        |  |   | 0.1175 | 
|October 5, 2016    |  |             | October 20, 2016   |  |              |  | November 1, 2016  |        |  |   | 0.1175 | 
|September 12, 2016 |  |             | September 22, 2016 |  |              |  | October 4, 2016   |        |  |   | 0.1175 | 
|August 2, 2016     |  |             | August 18, 2016    |  |              |  | September 1, 2016 |        |  |   | 0.1175 | 
|July 7, 2016       |  |             | July 21, 2016      |  |              |  | August 2, 2016    |        |  |   | 0.1175 | 
|June 7, 2016       |  |             | June 23, 2016      |  |              |  | July 1, 2016      |        |  |   | 0.1175 | 
|May 3, 2016        |  |             | May 19, 2016       |  |              |  | June 2, 2016      |        |  |   | 0.1175 | 
|April 7, 2016      |  |             | April 21, 2016     |  |              |  | May 3, 2016       |        |  |   | 0.1175 | 
|February 24, 2016  |  |             | March 24, 2016     |  |              |  | April 1, 2016     |        |  |   | 0.1175 | 
|February 4, 2016   |  |             | February 18, 2016  |  |              |  | March 2, 2016     |        |  |   | 0.1175 | 
|January 7, 2016    |  |             | January 21, 2016   |  |              |  | February 2, 2016  |        |  |   | 0.1175 | 
|                   |  |             |                    |  |              |  |                   |        |  |   |        | 
|Total (2016)       |  |             |                    |  |              |  |                   |        |  | $ | 1.41   | 
|                   |  |             |                    |  |              |  |                   |        |  |   |        | 
|Fiscal 2015        |  |             |                    |  |              |  |                   |        |  |   |        | 
|December 2, 2015   |  |             | December 17, 2015  |  |              |  | January 5, 2016   |        |  | $ | 0.1175 | 
|November 3, 2015   |  |             | November 19, 2015  |  |              |  | December 1, 2015  |        |  |   | 0.1175 | 
|October 7, 2015    |  |             | October 22, 2015   |  |              |  | November 3, 2015  |        |  |   | 0.1175 | 
|September 9, 2015  |  |             | September 24, 2015 |  |              |  | October 1, 2015   |        |  |   | 0.1175 | 
|August 4, 2015     |  |             | August 20, 2015    |  |              |  | September 1, 2015 |        |  |   | 0.1175 | 
|July 8, 2015       |  |             | July 23, 2015      |  |              |  | July 31, 2015     |        |  |   | 0.1175 | 
|June 9, 2015       |  |             | June 25, 2015      |  |              |  | July 1, 2015      |        |  |   | 0.1175 | 
|May 5, 2015        |  |             | May 21, 2015       |  |              |  | June 2, 2015      |        |  |   | 0.1175 | 
|April 9, 2015      |  |             | April 23, 2015     |  |              |  | May 1, 2015       |        |  |   | 0.1175 | 
|February 25, 2015  |  |             | March 19, 2015     |  |              |  | April 2, 2015     |        |  |   | 0.1175 | 
|February 3, 2015   |  |             | February 19, 2015  |  |              |  | February 27, 2015 |        |  |   | 0.1175 | 
|January 8, 2015    |  |             | January 22, 2015   |  |              |  | January 30, 2015  |        |  |   | 0.1175 | 
|                   |  |             |                    |  |              |  |                   |        |  |   |        | 
|Total (2015)       |  |             |                    |  |              |  |                   |        |  | $ | 1.41   | 
|                   |  |             |                    |  |              |  |                   |        |  |   |        | 

Tax characteristics of all distributions will be reported to shareholders on Form 1099 after the end of
the calendar year. Future distributions, if any, will be determined by our Board. We expect that our distributions to stockholders will generally be from accumulated net investment income, from net realized capital gains or non-taxable return of capital, if any, as applicable.

We have elected to be taxed as a RIC
under Subchapter M of the Code. To maintain our RIC status, we must 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, out of the assets legally
available for distribution. In addition, although we



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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, out of the assets legally
available for such distributions, we may in the future decide to retain such capital gains for investment.

We maintain an
opt out dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, then stockholders cash distributions will be automatically reinvested in additional shares of our common stock, unless they
specifically opt out of the dividend reinvestment plan so as to receive cash distributions.

We may not be able to
achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, due to the asset coverage test applicable to us as a business development
company, we may in the future be limited in our ability to make distributions. Also, our revolving credit facility may limit our ability to declare distributions if we default under certain provisions. If we do not distribute a certain percentage of
our income annually, we will suffer adverse tax consequences, including possible loss of the tax benefits available to us as a regulated investment company. In addition, in accordance with GAAP and tax regulations, we include in income certain
amounts that we have not yet received in cash, such as contractual payment-in-kind interest, which represents contractual interest added to the loan balance that becomes
due at the end of the loan term, or the accrual of original issue or market discount. Since we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90%
of our investment company taxable income to obtain tax benefits as a regulated investment company.

With respect to the
distributions to stockholders, income from origination, structuring, closing and certain other upfront fees associated with investments in portfolio companies are treated as taxable income and accordingly, distributed to stockholders.

Related Parties

We have
entered into a number of business relationships with affiliated or related parties, including the following:



| |  |  | We have entered into the Advisory Agreement with Solar Capital Partners. Mr. Gross, our Chairman and Chief Executive Officer and Mr. Spohler,
our Chief Operating Officer and board member, are managing members and senior investment professionals of, and have financial and controlling interests in, the Investment Adviser. In addition, Mr. Peteka, our Chief Financial Officer, Treasurer
and Corporate Secretary serves as the Chief Financial Officer for Solar Capital Partners.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Administrator provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement. We reimburse the Administrator for the allocable portion of overhead and other expenses incurred by it in performing its obligations under the
Administration Agreement, including rent, the fees and expenses associated with performing compliance functions, and the compensation of our chief compliance officer, our chief financial officer and any administrative support staff.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We have entered into a license agreement with the Investment Adviser, pursuant to which the Investment Adviser has granted us a non-exclusive, royalty-free license to use the name Solar Capital.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Investment Adviser may also manage other funds in the future that may have investment mandates that are similar, in whole and in part, with ours. For example, the Investment Adviser presently serves
as investment adviser to Solar Capital Ltd., a publicly traded BDC, which focuses on investing in senior secured loans, including unitranche loans, mezzanine loans and equity securities. In addition, Michael S. Gross, our Chairman and Chief
Executive Officer, Bruce Spohler, our Chief Operating Officer, and Richard L. Peteka, our Chief Financial Officer, serve in similar capacities for Solar Capital Ltd. The Investment Adviser and certain investment advisory affiliates may determine
that an investment is appropriate for us and for one or more of



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those other funds. In such event, depending on the availability of such investment and other appropriate factors, the Investment Adviser or its affiliates may determine that we should invest side-by-side with one or more other funds. Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its
staff, and consistent with the Investment Advisers allocation procedures.

Related party transactions may occur between
Solar Senior Capital Ltd. and Gemino Healthcare Finance, LLC, between Solar Senior Capital Ltd. and First Lien Loan Program LLC, between Solar Senior Capital Ltd. and Solar Life Science Program LLC and between Solar Senior Capital Ltd. and FLLP 2015-1, LLC. These transactions may occur in the normal course of business. No administrative fees are paid to Solar Capital Partners by Gemino Healthcare Finance, LLC, Solar Life Science Program LLC or First Lien
Loan Program LLC.

In addition, we have adopted a formal code of ethics that governs the conduct of our officers and
directors. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the Maryland General Corporation Law.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

We are subject to financial market risks, including changes in interest rates. During the three months ended March 31, 2017, most of the investments in our portfolio had floating interest rates. Our
loans are primarily based on floating LIBOR and typically have durations of one to three months after which they reset to current market interest rates. Most of our loans to portfolio companies have LIBOR floors. The Company also has a revolving
credit facility that is based on floating LIBOR and commercial paper rates. Assuming no changes to our balance sheet as of March 31, 2017 and no new defaults by portfolio companies, a hypothetical
one-quarter of one percent decrease in LIBOR on our floating rate assets and liabilities would increase our net investment income per average share by approximately one cent per average share over the next
twelve months. Assuming no changes to our balance sheet as of March 31, 2017 and no new defaults by portfolio companies, a hypothetical one percent increase in LIBOR on our floating rate assets and liabilities would increase our net investment
income per average share by approximately nine cents per average share over the next twelve months. However, we may hedge against interest rate fluctuations from
time-to-time by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities
may insulate us against adverse changes in interest rates, they may also limit our ability to participate in any benefits of certain changes in interest rates with respect to our portfolio of investments.



|                                                                |  |         |  |      
|--------------------------------------------------------------- |  | ------- |  | -----
|Increase (Decrease) in LIBOR                                    |  | (0.25%) |  | 1.00%
|Increase (Decrease) in Net Investment Income Per Share Per
Year |  | $0.01   |  | $0.09



|Item 4. | Controls and Procedures
|------- | -----------------------

(a)
Evaluation of Disclosure Controls and Procedures

As of March 31, 2017 (the end of the period covered by this
report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e)
of the 1934 Act). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information
required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such
possible controls and procedures.



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(b) Changes in Internal Controls Over Financial Reporting

Management has not identified any change in the Companys internal control over financial reporting that occurred during the first
quarter of 2017 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

We,
Solar Capital Management, LLC and Solar Capital Partners, LLC are not currently subject to any material pending legal proceedings threatened against us. From time to time, we may be a party to certain legal proceedings incidental to the normal
course of our business including the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a
material effect upon our business, financial condition or results of operations beyond what has been disclosed with these financial statements.



|Item 1A. | Risk Factors
|-------- | ------------

In addition
to the other information set forth in this report, you should carefully consider the factors discussed in Risk Factors in the March 9, 2017 filing of our Registration Statement on Form N-2, which
could materially affect our business, financial condition and/or operating results. The risks described in our Registration Statement on Form N-2 are not the only risks facing our Company. Additional risks and
uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

We did not engage in unregistered sales of securities during the quarter ended March 31, 2017.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Mine Safety Disclosures
|------- | -----------------------

Not applicable.



|Item 5. | Other Information
|------- | -----------------

None.



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|Item 6. | Exhibits
|------- | --------

The following
exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:



|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | 
|3.1            |  | Articles of Amendment and Restatement(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|               | 
|3.2            |  | Amended and Restated Bylaws(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|               | 
|4.1            |  | Form of Common Stock Certificate(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|               | 
|10.1           |  | Dividend Reinvestment Plan(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|               | 
|10.2           |  | First Amended and Restated Investment Advisory and Management Agreement by and between Registrant and Solar Capital Partners, LLC(7)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|               | 
|10.3           |  | Form of Custody Agreement(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|               | 
|10.4           |  | Amended and Restated Administration Agreement by and between Registrant and Solar Capital Management, LLC(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|               | 
|10.5           |  | Form of Indemnification Agreement by and between Registrant and each of its directors(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|               | 
|10.6           |  | Trademark License Agreement by and between Registrant and Solar Capital Partners, LLC(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|               | 
|10.7           |  | Form of Share Purchase Agreement by and between Registrant and Solar Senior Capital Investors, LLC(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|               | 
|10.8           |  | Form of Amendment No. 1 to Share Purchase Agreement by and between Registrant and Solar Senior Capital Investors, LLC(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|               | 
|10.9           |  | Form of Contribution Agreement, dated as of August 26, 2011, by and between SUNS SPV LLC, as the contributee, and Solar Senior Capital Ltd., as the contributor(3)                                                                                                                                                                                                                                                                                                                                                                                                                                           
|               | 
|10.10          |  | Form of Loan and Servicing Agreement, dated as of August 26, 2011 (as amended through May 29, 2015), by and among the Registrant, as the servicer and the transferor, SUNS
SPV LLC, as the borrower, each of the conduit lenders from time to time party thereto, each of the liquidity banks from time to time party thereto, each of the lender agents from time to time party thereto, Citibank, N.A., as the administrative
agent and collateral agent, and Wells Fargo Bank, N.A., as the account bank, the backup servicer and the collateral
custodian(5)                                             
|               | 
|10.11          |  | Fourth Amendment to the Loan and Servicing Agreement, dated as of May 29, 2015 by and among the Registrant, as the transferor and the servicer, SUNS SPV LLC, as the borrower,
Citibank, N.A., as the administrative agent and collateral agent, each of the conduit lenders from time to time party thereto, each of the lender agents from time to time party thereto, each of the liquidity banks from time to time party thereto,
each of the institutional lenders from time to time party thereto, and Wells Fargo Bank, N.A., as the account bank, the collateral custodian and the backup servicer(5)
|               | 
|10.12          |  | Form of Limited Liability Company Agreement, dated as of September 10, 2014, by and among the Registrant, Voya Retirement Insurance and Annuity Company, ReliaStar Life
Insurance Company, and Voya Insurance and Annuity Company, by and through Voya Investment Management LLC, as agent and investment manager(6)                                                                                                                                                                                                                                                                                         
|               | 
|10.13          |  | Form of Solar Life Science Program LLC Limited Liability Company Agreement, dated as of February 22, 2017, by and between Solar Capital Ltd., Solar Senior Capital Ltd. and
Deerfield Solar Holdings LLC*                                                                                                                                                                                                                                                                                                                                                                                                    
|               | 
|11.1           |  | Computation of Per Share Earnings (included in the notes to the financial statements contained in this report)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



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|               |  |                                                                                                                      
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                          
|               | 
|31.1           |  | Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
|               | 
|31.2           |  | Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
|               | 
|32.1           |  | Certification of Chief Executive Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.*                 
|               | 
|32.2           |  | Certification of Chief Financial Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.*                 



|(1) | Previously filed in connection with Solar Senior Capital Ltd.s registration statement on Form N-2 (File No. 333-171330) filed on February 14, 2011.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Previously filed in connection with Solar Senior Capital Ltd.s report on Form 10-K filed on February 22, 2012.
|--- | ---------------------------------------------------------------------------------------------------------------

|(3) | Previously filed in connection with Solar Senior Capital Ltd.s report on Form 8-K filed on August 31, 2011.
|--- | ------------------------------------------------------------------------------------------------------------

|(4) | Previously filed in connection with Solar Senior Capital Ltd.s report on Form 10-K filed on February 25, 2014.
|--- | ---------------------------------------------------------------------------------------------------------------

|(5) | Previously filed in connection with Solar Senior Capital Ltd.s report on Form 10-Q filed on August 4, 2015.
|--- | ------------------------------------------------------------------------------------------------------------

|(6) | Previously filed in connection with Solar Senior Capital Ltd.s report on Form 10-Q filed on November 4, 2014.
|--- | --------------------------------------------------------------------------------------------------------------

|(7) | Previously filed in connection with Solar Senior Capital Ltd.s report on Form 10-Q filed on August 2, 2016.
|--- | ------------------------------------------------------------------------------------------------------------

|* | Filed herewith.
|- | ---------------



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on May 2, 2017.



|                          |  |                                                                                       
|------------------------- |  | --------------------------------------------------------------------------------------
|SOLAR SENIOR CAPITAL LTD.
|                          | 
|By:                       |  | /S/    MICHAEL S.
GROSS                                                               
|                          |  | Michael S. Gross Chief Executive Officer (Principal Executive
Officer)                
|                          | 
|By:                       |  | /S/    RICHARD L.
PETEKA                                                              
|                          |  | Richard L. Peteka Chief Financial Officer (Principal Financial and Accounting
Officer)



58