Portman Ridge Finance Corp

Previous wording

Total portfolio investment activity (excluding activity in short-term investments) for the six months ended June 30, 2024 (unaudited) and for the year ended December 31, 2023, was as follows:

Current wording

Total portfolio investment activity (excluding activity in short-term investments) for the nine months ended September 30, 2024 (unaudited) and for the year ended December 31, 2023, was as follows:

Previous wording

At June 30, 2024 and December 31, 2023, the weighted average contractual interest rate on our interest earning Debt Securities Portfolio was approximately 12.4% and 12.5%, respectively.

Current wording

At September 30, 2024 and December 31, 2023, the weighted average contractual interest rate on our interest earning Debt Securities Portfolio was approximately 11.9% and 12.5%, respectively.

Previous wording

The debt investment portfolio (excluding our investments in the CLO Funds and Joint Ventures) at June 30, 2024 was spread across 28 different industries and 75 different portfolio companies with a fair value of approximately $358.9 million and average par balance per entity of approximately $2.6 million. As of June 30, 2024, nine of our investments were on non-accrual status. As of December 31, 2023, seven of our investments were on non-accrual status.

Current wording

The debt investment portfolio (excluding our investments in the CLO Funds and Joint Ventures) at September 30, 2024 was spread across 28 different industries and 72 different portfolio companies with a fair value of approximately $347.0 million and average par balance per entity of approximately $2.7 million. As of September 30, 2024, nine of our investments were on non-accrual status. As of December 31, 2023, seven of our investments were on non-accrual status.

Previous wording

We have made minority investments in the subordinated securities or preferred shares of CLO Funds managed by the Disposed Manager Affiliates and may selectively invest in securities issued by CLO Funds managed by other asset management companies. As of June 30, 2024 and December 31, 2023, the fair value of the CLO Fund Securities was $7.4 million and $9.0 million, respectively.

Current wording

We have made minority investments in the subordinated securities or preferred shares of CLO Funds managed by the Disposed Manager Affiliates and may selectively invest in securities issued by CLO Funds managed by other asset management companies. As of September 30, 2024 and December 31, 2023, the fair value of the CLO Fund Securities was $6.8 million and $9.0 million, respectively.

Previous wording

In August 2022, we invested in Series A – Great Lakes Funding II LLC (the “Great Lakes II Joint Venture,” collectively with the F3C Joint Venture the “Joint Ventures”), a joint venture with an investment strategy to underwrite and hold senior, secured unitranche loans made to middle-market companies. We treat our investment in the Great Lakes II Joint Venture as a joint venture since an affiliate of the Adviser controls a 50% voting interest in the Great Lakes II Joint Venture. In connection with the launch of the Great Lakes II Joint Venture, we entered into a series of transactions pursuant to which our prior investment in BCP Great Lakes Holdings LP, a vehicle formed as a co-investment vehicle to facilitate the participation of certain co-investors to invest, directly or indirectly, in BCP Great Lakes Funding, LLC (the “Prior Great Lakes Joint Venture”), and the corresponding assets held by the Prior Great Lakes Joint Venture in respect of our investment in BCP Great Lakes Holdings LP, were transferred to the Great Lakes II Joint Venture in complete redemption of our investment in BCP Great Lakes Holdings LP.

Current wording

In August 2022, we invested in Series A – Great Lakes Funding II LLC (the “Great Lakes II Joint Venture,” collectively with the F3C Joint Venture the “Joint Ventures”), a joint venture with an investment strategy to underwrite and hold senior, secured unitranche loans made to middle-market companies. We treat our investment in the Great Lakes II Joint Venture as a joint venture since an affiliate of the Adviser controls a 50% voting interest in the Great Lakes II Joint Venture. In connection with the launch of the Great Lakes II Joint Venture, we entered into a series of transactions pursuant to which our prior investment in BCP Great Lakes Holdings LP, a vehicle formed as a co-investment vehicle to facilitate the participation of certain co-investors to invest, directly or indirectly, in BCP Great Lakes Funding, LLC (the “Prior Great Lakes Joint

Previous wording

The fair value of our investment in the Great Lakes II Joint Venture as of June 30, 2024 and December 31, 2023, was $40.7 million and $45.0 million, respectively. Fair value has been determined utilizing the practical expedient pursuant to ASC 820-10. Pursuant to the terms of the Great Lakes II LLC Agreement, we generally may not effect any direct or indirect sale, transfer, assignment, hypothecation, pledge or other disposition of or encumbrance upon our interests in the Great Lakes II Joint Venture, except that we may sell or otherwise transfer our interests with the consent of the managing members of the Great Lakes II Joint Venture or to an affiliate or a successor to substantially all of our assets.

Current wording

The fair value of our investment in the Great Lakes II Joint Venture as of September 30, 2024 and December 31, 2023, was $39.3 million and $45.0 million, respectively. Fair value has been determined utilizing the practical expedient pursuant to ASC 820-10. Pursuant to the terms of the Great Lakes II LLC Agreement, we generally may not effect any direct or indirect sale, transfer, assignment, hypothecation, pledge or other disposition of or encumbrance upon our interests in the Great Lakes II Joint Venture, except that we may sell or otherwise transfer our interests with the consent of the managing members of the Great Lakes II Joint Venture or to an affiliate or a successor to substantially all of our assets.

Previous wording

Set forth below is a discussion of our results of operations for the three and six months ended June 30, 2024 and 2023.

Current wording

Set forth below is a discussion of our results of operations for the three and nine months ended September 30, 2024 and 2023.

Previous wording

Revenues consist primarily of investment income from interest and dividends on our investment portfolio and various ancillary fees related to our investment holdings. Investment income for the three months ended June 30, 2024 and 2023 was approximately $16.3 million and $19.6 million, respectively. Investment income for the six months ended June 30, 2024 and 2023 was approximately $32.9 million and $40.0 million, respectively.

Current wording

Revenues consist primarily of investment income from interest and dividends on our investment portfolio and various ancillary fees related to our investment holdings. Investment income for the three months ended September 30, 2024 and 2023 was approximately $15.2 million and $18.6 million, respectively. Investment income for the nine months ended September 30, 2024 and 2023 was approximately $48.0 million and $58.5 million, respectively.

Previous wording

The majority of investment income is attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio. For the three months ended June 30, 2024 and 2023, approximately $13.9 million and $15.5 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio. For the six months ended June 30, 2024 and 2023, approximately $28.1 million and $32.3 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio.

Current wording

The majority of investment income is attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio. For the three months ended September 30, 2024 and 2023, approximately $12.7 million and $15.8 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio. For the nine months ended September 30, 2024 and 2023, approximately $40.4 million and $48.1 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio.

Previous wording

At June 30, 2024 and December 31, 2023, the weighted average contractual interest rate on our interest earning Debt Securities Portfolio was approximately 12.4% and 12.5%, respectively.

Current wording

At September 30, 2024 and December 31, 2023, the weighted average contractual interest rate on our interest earning Debt Securities Portfolio was approximately 11.9% and 12.5%, respectively.

Previous wording

Investment Income on Investments in CLO Fund Securities. For the three months ended June 30, 2024 and 2023, approximately $0.5 million and $0.8 million, respectively, of investment income was attributable to investments in CLO Fund Securities. For the six months ended June 30, 2024 and 2023, approximately $1.1 million and $1.4 million, respectively, of investment income was attributable to investments in CLO Fund Securities. We generate investment income from our investments in the securities (typically preferred shares or subordinated securities) of CLO Funds. CLO Funds invest primarily in broadly syndicated non-investment grade loans, high-yield bonds and other credit instruments of corporate issuers. The underlying assets in each of the CLO Funds in which we have an investment are generally diversified secured or unsecured corporate debt. Our CLO Fund Securities that are subordinated securities or preferred shares (“junior securities”) are subordinated to senior note holders who typically receive a return on their investment at a fixed spread relative to the SOFR index. The CLO Funds are leveraged funds and any excess cash flow or “excess spread” (interest earned by the underlying securities in the fund less payments made to senior bond holders and less fund expenses and management fees) is paid to the holders of the CLO Fund’s subordinated securities or preferred shares. The level of excess spread from CLO Fund Securities can be impacted by the timing and level of the resetting of the benchmark interest rate for the underlying assets (which reset at various times throughout the quarter) in the CLO Fund and the related CLO Fund note liabilities (which reset at each quarterly distribution date); in periods of short-term and volatile changes in the benchmark interest rate, the levels of excess spread and resulting cash distributions to us can vary significantly.

Current wording

Investment Income on Investments in CLO Fund Securities. For the three months ended September 30, 2024 and 2023, approximately $0.3 million and $0.5 million, respectively, of investment income was attributable to investments in CLO Fund Securities. For the nine months ended September 30, 2024 and 2023, approximately $1.3 million and $1.9 million, respectively, of investment income was attributable to investments in CLO Fund Securities. We generate investment income from our investments in the securities (typically preferred shares or subordinated securities) of CLO Funds. CLO Funds invest primarily in broadly syndicated non-investment grade loans, high-yield bonds and other credit instruments of corporate issuers. The underlying assets in each of the CLO Funds in which we have an investment are generally diversified secured or unsecured corporate debt. Our CLO Fund Securities that are subordinated securities or preferred shares (“junior securities”) are subordinated to senior note holders who typically receive a return on their investment at a fixed spread relative to the SOFR index. The CLO Funds are leveraged funds and any excess cash flow or “excess spread” (interest earned by the underlying securities in the fund less payments made to senior bond holders and less fund expenses and management fees) is paid to the holders of the CLO Fund’s subordinated securities or preferred shares. The level of excess spread from CLO Fund Securities can be impacted by the timing and level of the resetting of the benchmark interest rate for the underlying assets (which reset at various times throughout the quarter) in the CLO Fund and the related CLO Fund note liabilities (which reset at each quarterly distribution date); in periods of short-term and volatile changes in the benchmark interest rate, the levels of excess spread and resulting cash distributions to us can vary significantly.

Previous wording

Investments in Joint Ventures. For the three months ended June 30, 2024 and 2023, we recognized $1.8 million and $2.3 million, respectively, in investment income from our investments in Joint Ventures. For the six months ended June 30, 2024 and 2023, we recognized $3.5 million and $4.8 million, respectively, in investment income from our investments in Joint Ventures. As of June 30, 2024, and December 31, 2023, the fair value of our investments in Joint Ventures was approximately $54.3 million and $59.3 million, respectively. The final determination of the tax attributes of distributions from Joint Ventures is made on an annual (full calendar year) basis at the end of the year based upon taxable income and distributions for the full year. Therefore, any estimate of tax attributes of distributions made on an interim basis may not be representative of the actual tax attributes of distributions for the full year.

Current wording

Investments in Joint Ventures. For the three months ended September 30, 2024 and 2023, we recognized $1.7 million and $2.1 million, respectively, in investment income from our investments in Joint Ventures. For the nine months ended September 30, 2024 and 2023, we recognized $5.1 million and $6.9 million, respectively, in investment income from our investments in Joint Ventures. As of September 30, 2024, and December 31, 2023, the fair value of our investments in Joint Ventures was approximately $52.3 million and $59.3 million, respectively. The final determination of the tax attributes of distributions from Joint Ventures is made on an annual (full calendar year) basis at the end of the year based upon taxable income and distributions for the full year. Therefore, any estimate of tax attributes of distributions made on an interim basis may not be representative of the actual tax attributes of distributions for the full year.

Previous wording

Fees and other income. Origination fees (to the extent services are performed to earn such income upon closing), amendment fees, consent fees, and other fees associated with investments in portfolio companies are recognized as income when they are earned. Prepayment penalties received by the Company for debt instruments repaid prior to maturity date are recorded as income upon receipt. For the three months ended June 30, 2024 and 2023, approximately $0.1 million and $0.9 million, respectively, of investment income was attributable to fees and other income. For the six months ended June 30, 2024 and 2023, approximately $0.3 million and $1.5 million, respectively, of investment income was attributable to fees and other income.

Current wording

Fees and other income. Origination fees (to the extent services are performed to earn such income upon closing), amendment fees, consent fees, and other fees associated with investments in portfolio companies are recognized as income when they are earned. Prepayment penalties received by the Company for debt instruments repaid prior to maturity date are recorded as income upon receipt. For the three months ended September 30, 2024 and 2023, approximately $0.2 million and $0.2 million, respectively, of investment income was attributable to fees and other income. For the nine months ended September 30, 2024 and 2023, approximately $0.5 million and $1.7 million, respectively, of investment income was attributable to fees and other income.

Previous wording

Total expenses for the three months ended June 30, 2024 and 2023 were approximately $9.9 million and $11.7 million, respectively. Total expenses for the six months ended June 30, 2024 and 2023 were approximately $20.2 million and $23.5 million, respectively. The decrease in total expenses for the three and six months ended June 30, 2024, in comparison to the prior year, was primarily driven by a decrease in average debt outstanding as well as lower incentive fees.

Current wording

Total expenses for the three months ended September 30, 2024 and 2023 were approximately $9.4 million and $11.4 million, respectively. Total expenses for the nine months ended September 30, 2024 and 2023 were approximately $29.5 million and $34.9 million, respectively. The decrease in total expenses for the three and nine months ended September 30, 2024, in comparison to the prior year, was primarily driven by a decrease in average debt outstanding as well as lower incentive fees.

Previous wording

Management Fees and Incentive Fees. Management fees for the three months ended June 30, 2024 and 2023 were approximately $1.7 million and $1.9 million, respectively. Management fees for the six months ended June 30, 2024 and 2023 were approximately $3.4 million and $3.8 million, respectively. Incentive fees for the three months ended June 30, 2024 and 2023 were approximately $1.4 million and $1.7 million, respectively. Incentive fees for the six months ended June 30, 2024 and 2023 were approximately $2.6 million and $3.5 million, respectively.

Current wording

Management Fees and Incentive Fees. Management fees for the three months ended September 30, 2024 and 2023 were approximately $1.6 million and $1.8 million, respectively. Management fees for the nine months ended September 30, 2024 and 2023 were approximately $5.0 million and $5.7 million, respectively. Incentive fees for the three months ended September 30, 2024 and 2023 were approximately $1.2 million and $1.5 million, respectively. Incentive fees for the nine months ended September 30, 2024 and 2023 were approximately $3.8 million and $5.0 million, respectively.

Previous wording

Interest and Amortization of Debt Issuance Costs. Interest expense is dependent on the average outstanding balance on our borrowings and the base index rate for the period. Debt issuance costs represent fees and other direct costs incurred in connection with our borrowings. These amounts are capitalized and amortized over the expected term of the borrowing. For the three months ended June 30, 2024 and 2023, interest expense and amortization on debt issuance costs and discount for the period was approximately $5.4 million and $6.4 million, respectively, on average debt outstanding of $288.7 million and $360.8 million, respectively. For the six months ended June 30, 2024 and 2023, interest expense and amortization on debt issuance costs and discount for the period was approximately $11.1 million and $12.7 million, respectively, on average debt outstanding of $299.7 million and $368.1 million, respectively.

Current wording

Interest and Amortization of Debt Issuance Costs. Interest expense is dependent on the average outstanding balance on our borrowings and the base index rate for the period. Debt issuance costs represent fees and other direct costs incurred in connection with our borrowings. These amounts are capitalized and amortized over the expected term of the borrowing. For the three months ended September 30, 2024 and 2023, interest expense and amortization on debt issuance costs and discount for the period was approximately $5.1 million and $6.3 million, respectively, on average debt outstanding of $277.3 million and $343.0 million, respectively. For the nine months ended September 30, 2024 and 2023, interest expense and amortization on debt issuance costs and discount for the period was approximately $16.2 million and $19.0 million, respectively, on average debt outstanding of $292.1 million and $359.6 million, respectively.

Previous wording

Professional Fees and General and Administrative Expenses. The balance of our expenses includes professional fees (primarily legal, accounting, director fees, valuation and other professional services), insurance costs, Administrative services expense under the Administration Agreement and general administrative and other costs.

Current wording

Professional Fees and General and Administrative Expenses. The balance of our expenses includes professional fees (primarily legal, accounting, valuation and other professional services), insurance costs, Administrative services expense under the Administration Agreement and general administrative and other costs.

Previous wording

For the three months ended June 30, 2024 and 2023, professional fees totaled approximately $0.6 million and $0.7 million, respectively. For the six months ended June 30, 2024 and 2023, professional fees totaled approximately $1.4 million and $1.3 million, respectively.

Current wording

For the three months ended September 30, 2024 and 2023, professional fees totaled approximately $0.3 million and $0.5 million, respectively. For the nine months ended September 30, 2024 and 2023, professional fees totaled approximately $1.4 million and $1.5 million, respectively.

Previous wording

For the three months ended June 30, 2024 and 2023, administrative services expense was approximately $0.4 million and $0.7 million, respectively. For the six months ended June 30, 2024 and 2023, administrative services expense was approximately $0.7 million and $1.3 million, respectively.

Current wording

For the three months ended September 30, 2024 and 2023, administrative services expense was approximately $0.6 million and $0.6 million, respectively. For the nine months ended September 30, 2024 and 2023, administrative services expense was approximately $1.3 million and $1.9 million, respectively.

Previous wording

For the three months ended June 30, 2024 and 2023, other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $0.4 million and $0.4 million, respectively. For the six months ended June 30, 2024 and 2023, other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $0.9 million and $0.9 million, respectively.

Current wording

For the three months ended September 30, 2024 and 2023, other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $0.4 million and $0.4 million, respectively. For the nine months ended September 30, 2024 and 2023, other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $1.3 million and $1.3 million, respectively.

Previous wording

For the six months ended June 30, 2024, net investment income was approximately $12.7 million, or $1.36 per basic and diluted share, while tax-basis distributable income was approximately $13.2 million, or $1.42 per basic and diluted share. For the six months ended June 30, 2023, net investment income was approximately $16.4 million, or $1.72 per basic and diluted share, while tax-basis distributable income was approximately $14.9 million, or $1.56 per basic and diluted share.

Current wording

For the nine months ended September 30, 2024, net investment income was approximately $18.5 million, or $1.99 per basic and diluted share, while tax-basis distributable income was approximately $18.5 million, or $1.99 per basic and diluted share. For the nine months ended September 30, 2023, net investment income was approximately $23.6 million, or $2.48 per basic and diluted share, while tax-basis distributable income was approximately $20.3 million, or $2.13 per basic and diluted share.

Previous wording

Investments are carried at fair value, with changes in fair value recorded as unrealized appreciation (depreciation) in the statement of operations. When an investment is sold or liquidated, any previously recognized unrealized appreciation (depreciation) is reversed and a corresponding amount is recognized as realized gain (loss).

Current wording

Investments are carried at fair value, with changes in fair value recorded as unrealized appreciation (depreciation) in the statement of operations. When an investment is sold or liquidated, any previously recognized unrealized appreciation (depreciation) is reversed and a corresponding amount is recognized as realized gain (loss). During the three and nine months ended September 30, 2024, the Company recognized $11.4 million and $20.4 million of net realized losses on our portfolio investments, respectively. During the three and nine months ended September 30, 2023, we recognized $1.6 million and $11.2 million of net realized losses on our portfolio investments, respectively.

Previous wording

During the three months ended June 30, 2024, our total investments had net change in unrealized appreciation (depreciation) on investments of approximately $(6.0) million . The net change in unrealized appreciation (depreciation) on investments is made up of approximately $(0.9) million on CLO Fund Securities, $3.9 million on equity securities, $0.4 million on our Joint Ventures investments, and $(9.4) million on our debt securities. During the three months ended June 30, 2023, our total investments had net change in unrealized appreciation (depreciation) of approximately $(4.2) million. The net change in unrealized appreciation (depreciation) on investments was made up of approximately $1.0 million on CLO Fund Securities, $0.1 million on equity securities, $0.4 million on our Joint Ventures investments, and $(3.7) million on our debt securities.

Current wording

During the three months ended September 30, 2024, our total investments had net change in unrealized appreciation (depreciation) on investments of approximately $4.5 million . The net change in unrealized appreciation (depreciation) on investments is made up of approximately $0.2 million on equity securities, $(0.4) million on our Joint Ventures investments, and $4.7 million on our debt securities. During the three months ended September 30, 2023, our total investments had net change in unrealized appreciation (depreciation) of approximately $1.7 million. The net change in unrealized appreciation (depreciation) on investments was made up of approximately $1.1 million on CLO Fund Securities, $(1.6) million on equity securities, $(0.9) million on our Joint Ventures investments, and $3.1 million on our debt securities.

Previous wording

During the six months ended June 30, 2024, our total investments had net change in unrealized appreciation (depreciation) of approximately $(5.9) million. The net change in unrealized appreciation (depreciation) on investments is made up of approximately $(0.9) million on CLO Fund Securities, $4.0 million on equity securities, $0.6 million on our Joint Ventures investments, and $(9.6) million on our debt securities. During the six months ended June 30, 2023, our total investments had net change in unrealized appreciation (depreciation) of approximately $(10.1) million. The net change in unrealized appreciation (depreciation) on investments was made up of approximately $1.6 million on CLO Fund Securities, $(1.9) million on equity securities, $2.4 million on our Joint Ventures investments, and $(7.4) million on our debt securities.

Current wording

During the nine months ended September 30, 2024, our total investments had net change in unrealized appreciation (depreciation) of approximately $(1.4) million. The net change in unrealized appreciation (depreciation) on investments is made up of approximately $(1.0) million on CLO Fund Securities, $4.1 million on equity securities, $0.3 million on our Joint Ventures investments, and $(4.8) million on our debt securities. During the nine months ended September 30, 2023, our total investments had net change in unrealized appreciation (depreciation) of approximately $(8.4) million. The net change in unrealized appreciation (depreciation) on investments was made up of approximately $2.8 million on CLO Fund Securities, $(3.5) million on equity securities, $(3.4) million on our Joint Ventures investments, and $(4.3) million on our debt securities.

Previous wording

The net increase (decrease) in net assets resulting from operations for the three months ended June 30, 2024, was $(6.4) million, or $(0.69) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the three months ended June 30, 2023, was $(3.1) million, or $(0.33) per basic and diluted share.The net increase (decrease) in net assets resulting from operations for the six months ended June 30, 2024, was $(1.9) million, or $(0.20) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the six months ended June 30, 2023, was $(3.1) million, or $(0.32) per basic and diluted share.

Current wording

The net increase (decrease) in net assets resulting from operations for the three months ended September 30, 2024, was $(1.5) million, or $(0.16) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the three months ended September 30, 2023, was $7.4 million, or $0.78 per basic and diluted share.The net increase (decrease) in net assets resulting from operations for the nine months ended September 30, 2024, was $(3.4) million, or $(0.37) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the nine months ended September 30, 2023, was $4.4 million, or $0.46 per basic and diluted share.

Previous wording

We use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our shareholders by reducing our overall cost of capital. As a BDC, we are limited in the amount of leverage we can incur under the 1940 Act. We are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. As of June 30, 2024, we had approximately $285.1 million of par value of outstanding borrowings and our asset coverage ratio of total assets to total borrowings was 169%, compliant with the minimum asset coverage level of 150% generally required for a BDC by the 1940 Act. We may also borrow amounts of up to 5% of the value of our total assets for temporary purposes.

Current wording

We use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our shareholders by reducing our overall cost of capital. As a BDC, we are limited in the amount of leverage we can incur under the 1940 Act. We are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. As of September 30, 2024, we had approximately $267.5 million of par value of outstanding borrowings and our asset coverage ratio of total assets to total borrowings was 170%, compliant with the minimum asset coverage level of 150% generally required for a BDC by the 1940 Act. We may also borrow amounts of up to 5% of the value of our total assets for temporary purposes.

Previous wording

During the second quarter of 2021, we issued $108.0 million aggregate principal amount of our 4.875% Notes due 2026. The net proceeds for the 4.875% Notes due 2026, after the payment of underwriting expenses, were approximately $104.6 million. Interest on the 4.875% Notes due 2026 is paid semi-annually on March 16 and September 16, at a rate of 4.875% commencing September 16, 2021. The 4.875% Notes due 2026 mature on April 30, 2026 and are general unsecured obligations. The indenture governing the 4.875% Notes Due 2026 contains certain restrictive covenants, including compliance with certain provisions of the 1940 Act relating to borrowing and dividends. At June 30, 2024, there was approximately $108.0 million of principal amount outstanding, and we were in compliance with all of our debt covenants on the 4.875% Notes due 2026.

Current wording

During the second quarter of 2021, we issued $108.0 million aggregate principal amount of our 4.875% Notes due 2026. The net proceeds for the 4.875% Notes due 2026, after the payment of underwriting expenses, were approximately $104.6 million. Interest on the 4.875% Notes due 2026 is paid semi-annually on April 30 and October 30, at a rate of 4.875%. The 4.875% Notes due 2026 mature on April 30, 2026 and are general unsecured obligations. The indenture governing the 4.875% Notes Due 2026 contains certain restrictive covenants, including compliance with certain provisions of the 1940 Act relating to borrowing and dividends. At September 30, 2024, there was approximately $108.0 million of principal amount outstanding, and we were in compliance with all of our debt covenants on the 4.875% Notes due 2026.

Previous wording

On December 18, 2019, Great Lakes Portman Ridge Funding LLC (“GLPRF LLC”), a wholly-owned subsidiary of the Company, entered into a senior secured revolving credit facility (the “Revolving Credit Facility”) with JPMorgan Chase Bank, National Association (“JPM”). JPM serves as administrative agent, U.S. Bank National Association serves as collateral agent, securities intermediary and collateral administrator, and the Company serves as portfolio manager under the Revolving Credit Facility.

Current wording

On December 18, 2019, Great Lakes Portman Ridge Funding LLC (“GLPRF LLC”), a wholly-owned subsidiary of the Company, entered into a senior secured revolving credit facility (as amended, restated or otherwise modified from time to time, the “Revolving Credit Facility”) with JPMorgan Chase Bank, National Association (“JPM”). JPM serves as administrative agent, U.S. Bank National Association serves as collateral agent, securities intermediary and collateral administrator, and the Company serves as portfolio manager under the Revolving Credit Facility.

Previous wording

Advances under the Revolving Credit Facility bear interest at a per annum rate equal to the three-month SOFR in effect, plus the applicable margin of 2.85% per annum. GLPRF LLC is required to utilize a minimum of 80% of the commitments under the Revolving Credit Facility, after an initial six-month ramp-up period during which a lesser minimum utilization requirement applies. Unused amounts below such minimum utilization amount accrue interest as if such amounts are outstanding as borrowings under the Revolving Credit Facility. In addition, GLPRF LLC will pay a non-usage fee during the first three years after the closing date in an amount not to exceed 0.50% per annum on the average daily unborrowed portion of the financing commitments in excess of such minimum utilization amount.

Current wording

GLPRF LLC is required to utilize a minimum of the commitments under the Revolving Credit Facility. Unused amounts below such minimum utilization amount accrue interest as if such amounts are outstanding as borrowings under the Revolving Credit Facility. In addition, GLPRF LLC pays a non-usage fee during the reinvestment period on the average daily unborrowed portion of the financing commitments in excess of such minimum utilization amount.

Previous wording

The initial principal amount of the Revolving Credit Facility is $115 million. The Revolving Credit Facility has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the Revolving Credit Facility to up to $215 million. Proceeds from borrowings under the Revolving Credit Facility may be used to fund portfolio investments by GLPRF LLC and to make advances under delayed draw term loans where GLPRF LLC is a lender.

Current wording

The initial principal amount of the Revolving Credit Facility was $115 million. The Revolving Credit Facility has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the Revolving Credit Facility to up to $215 million. Proceeds from borrowings under the Revolving Credit Facility may be used to fund portfolio investments by GLPRF LLC and to make advances under delayed draw term loans where GLPRF LLC is a lender.

Previous wording

On April 29, 2022, GLPRF LLC amended the Revolving Credit Facility with JPM as administrative agent. The amended agreement replaces three-month SOFR as the benchmark interest rate and reduces the applicable margin to 2.80% per annum from 2.85% per annum. Other amendments include the extension of the reinvestment period and scheduled termination date to April 29, 2025 and April 29, 2026, respectively.

Current wording

On April 29, 2022, GLPRF LLC amended the Revolving Credit Facility with JPM as administrative agent. The amended agreement replaced three-month SOFR as the benchmark interest rate and reduced the applicable margin to 2.80% per annum from 2.85% per annum.

Previous wording

At June 30, 2024, GLPRF LLC was in compliance with all of its debt covenants and there was approximately $92.0 million principal amount of borrowings was outstanding under the Revolving Credit Facility.

Current wording

At September 30, 2024, GLPRF LLC was in compliance with all of its debt covenants and there was approximately $159.5 million principal amount of borrowings was outstanding under the Revolving Credit Facility.

Previous wording

During the three months ended June 30, 2024, the Company redeemed approximately $6.6 million of the par value of 2018-2 Secured Notes. In connection therewith, the Company recognized a realized loss on extinguishment of less than $0.1 million.

Current wording

Accordingly, during the three months ended September 30, 2024, the Company redeemed approximately $85.1 million of the par value of 2018-2 Secured Notes. In connection therewith, the Company recognized a realized loss on extinguishment of approximately $0.4 million.

Previous wording

During the six months ended June 30, 2024, the Company redeemed approximately $40.6 million of the par value of 2018-2 Secured Notes. In connection therewith, the Company recognized a realized loss on extinguishment of approximately $0.3 million.

Current wording

During the nine months ended September 30, 2024, the Company redeemed approximately $125.7 million of the par value of 2018-2 Secured Notes. In connection therewith, the Company recognized a realized loss on extinguishment of approximately $0.7 million.

Previous wording

During the three months ended June 30, 2024, the Company repurchased 79,722 shares under the Renewed Stock Repurchase Program at an aggregate cost of approximately $1.6 million. During the three months ended June 30, 2023, the Company repurchased 27,081 shares under the Stock Repurchase Program at an aggregate cost of approximately $0.6 million. During the six months ended June 30, 2024, the Company repurchased 130,737 shares under the Renewed Stock Repurchase Program at an aggregate cost of approximately $2.6 million. During the six months ended June 30, 2023, the Company repurchased 62,694 shares under the Stock Repurchase Program at an aggregate cost of approximately $1.3 million.

Current wording

During the three months ended September 30, 2024, the Company repurchased 33,429 shares under the Renewed Stock Repurchase Program at an aggregate cost of approximately $0.6 million. During the three months ended September 30, 2023, the Company repurchased 60,559 shares under the Stock Repurchase Program at an aggregate cost of approximately $1.2 million. During the nine months ended September 30, 2024, the Company repurchased 164,166 shares under the Renewed Stock Repurchase Program at an aggregate cost of approximately $3.1 million. During the nine months ended September 30, 2023, the Company repurchased 123,253 shares under the Stock Repurchase Program at an aggregate cost of approximately $2.6 million.

Previous wording

From time-to-time we are a party to financial instruments with off-balance sheet risk in the normal course of business in order to meet the needs of our investment in portfolio companies. Such instruments include commitments to extend credit and may involve, in varying degrees, elements of credit risk in excess of amounts recognized on our balance sheet. Prior to extending such credit, we attempt to limit our credit risk by conducting extensive due diligence, obtaining collateral where necessary and negotiating appropriate financial covenants. As of June 30, 2024, and December 31, 2023, we had approximately $32.7 million and $28.6 million commitments to fund investments, respectively. We may also enter into derivative contracts with off-balance sheet risk in connection with its investing activities.

Current wording

From time-to-time we are a party to financial instruments with off-balance sheet risk in the normal course of business in order to meet the needs of our investment in portfolio companies. Such instruments include commitments to extend credit and may involve, in varying degrees, elements of credit risk in excess of amounts recognized on our balance sheet. Prior to extending such credit, we attempt to limit our credit risk by conducting extensive due diligence, obtaining collateral where necessary and negotiating appropriate financial covenants. As of September 30, 2024, and December 31, 2023, we had approximately $31.7 million and $28.6 million commitments to fund investments, respectively. We may also enter into derivative contracts with off-balance sheet risk in connection with its investing activities.