Barings BDC Inc

Previous wording

The following discussion is designed to provide a better understanding of our Unaudited Consolidated Financial Statements for the three months ended March 31, 2024, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results. The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2023. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.

Current wording

The following discussion is designed to provide a better understanding of our Unaudited Consolidated Financial Statements for the three and six months ended June 30, 2024, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results. The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2023. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.

Previous wording

We generate revenues in the form of interest income, primarily from our investments in debt securities, loan origination and other fees and dividend income. Fees generated in connection with our debt investments are recognized over the life of the loan using the effective interest method or, in some cases, recognized as earned. Our senior secured, middle-market, private debt investments generally have terms of between five and seven years. Our senior secured, middle-market, first lien private debt investments generally bear interest between the Secured Overnight Financing Rate (“SOFR”) (or the applicable currency rate for investments in foreign currencies) plus 475 basis points and SOFR plus 675 basis points per annum. Our subordinated middle-market, private debt investments generally bear interest between SOFR (or the applicable currency rate for investments in foreign currencies) plus 700 basis points and SOFR plus 900 basis points per annum if floating rate, and between 8% and 15% if fixed rate. From time to time, certain of our investments may have a form of interest, referred to as payment-in-kind (“PIK”) interest, which is not paid currently but is instead accrued and added to the loan balance and paid at the end of the term.

Current wording

We generate revenues in the form of interest income, primarily from our investments in debt securities, loan origination and other fees and dividend income. Fees generated in connection with our debt investments are recognized over the life of the loan using the effective interest method or, in some cases, recognized as earned. Our senior secured, middle-market, private debt investments generally have terms of between five and seven years. Our senior secured, middle-market, first lien private debt investments generally bear interest between the Secured Overnight Financing Rate (“SOFR”) (or the applicable currency rate for investments in foreign currencies) plus 475 basis points and SOFR plus 675 basis points per annum. Our subordinated middle-market, private debt investments generally bear interest between SOFR (or the applicable currency rate for investments in foreign currencies) plus 700 basis points and SOFR plus 900 basis points per annum if floating rate, and between 8% and 15% if fixed rate. From time to time, certain of our investments may have a form of interest, referred to as payment-in-kind (“PIK”) interest, which is not paid currently but is instead accrued and added to the loan balance and paid at the end of the term. To a lesser extent, we will invest opportunistically in assets such as, without limitation, equity, special situations, structured credit (e.g., private asset-backed securities), syndicated loan opportunities and/or mortgage securities.

Previous wording

As of March 31, 2024 and December 31, 2023, the weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was approximately 10.7% and 10.5%, respectively. The weighted average yield on the principal amount of all of our outstanding debt investments (including non-accrual debt investments) was approximately 10.4% and 10.0% as of March 31, 2024 and December 31, 2023, respectively.

Current wording

As of June 30, 2024 and December 31, 2023, the weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was approximately 10.9% and 10.5%, respectively. The weighted average yield on the principal amount of all of our outstanding debt investments (including non-accrual debt investments) was approximately 10.5% and 10.0% as of June 30, 2024 and December 31, 2023, respectively.

Previous wording

Our investment adviser, Barings, a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company, is a leading global asset management firm and is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. Barings’ primary investment capabilities include fixed income, private credit, real estate, equity, and alternative investments. Subject to the overall supervision of our Board of Directors (the “Board”), Barings’ Global Private Finance Group (“Barings GPFG”) manages our day-to-day operations, and provides investment advisory and management services to us. Barings GPFG is part of Barings’ $324.0 billion Global Fixed Income Platform (as of March 31, 2024) that invests in liquid, private and structured credit. Barings GPFG also advises private funds and separately managed accounts, along with multiple public vehicles.

Current wording

Our investment adviser, Barings, a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company, is a leading global asset management firm and is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. Barings’ primary investment capabilities include fixed income, private credit, real estate, equity, and alternative investments. Subject to the overall supervision of our Board of Directors (the “Board”), Barings’ Global Private Finance Group (“Barings GPFG”) manages our day-to-day operations, and provides investment advisory and management services to us. Barings GPFG is part of Barings’ $326.7 billion Global Fixed Income Platform (as of June 30, 2024) that invests in liquid, private and structured credit. Barings GPFG also advises private funds and separately managed accounts, along with multiple public vehicles.

Previous wording

Included in Barings GPFG is Barings North American Private Finance Team (the “U.S. Investment Team”), which consists of 43 investment professionals (as of March 31, 2024) located in three offices in the United States. The U.S. Investment Team provides a full set of solutions to the North American middle market, including first and second lien senior secured loans, unitranche structures, revolvers, mezzanine debt and equity co-investments. The U.S. Investment Team averages approximately 20 years of industry experience at the Managing Director and Director level. Also included in Barings GPFG are its Europe and Asia-Pacific Investment Committees and Private Finance Teams, which are responsible for our investment origination and portfolio monitoring activities for middle-market companies in Europe and Asia-Pacific geographies. In addition, Barings believes that it has best-in-class support personnel, including expertise in risk management, legal, accounting, tax, information technology and compliance, among others. We expect to benefit from the support provided by these personnel in our operations.

Current wording

Included in Barings GPFG is Barings North American Private Finance Team (the “U.S. Investment Team”), which consists of 46 investment professionals (as of June 30, 2024) located in three offices in the United States. The U.S. Investment Team provides a full set of solutions to the North American middle market, including first and second lien senior secured loans, unitranche structures, revolvers, mezzanine debt and equity co-investments. The U.S. Investment Team averages over 18 years of industry experience at the Managing Director and Director level. Also included in Barings GPFG are its Europe and Asia-Pacific Investment Committees and Private Finance Teams, which are responsible for our investment origination and portfolio monitoring activities for middle-market companies in Europe and Asia-Pacific geographies. In addition, Barings believes that it has best-in-class support personnel, including expertise in risk management, legal, accounting, tax, information technology and compliance, among others. We expect to benefit from the support provided by these personnel in our operations.

Previous wording

On July 24, 2018, our stockholders voted at a special meeting of stockholders (the “2018 Special Meeting”) to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the 2018 Special Meeting, effective July 25, 2018, our applicable asset coverage ratio under the 1940 Act has been decreased to 150% from 200%. As a result, we are permitted under the 1940 Act to incur indebtedness at a level which is more consistent with a portfolio of senior secured debt. As of March 31, 2024, our asset coverage ratio was 182.4%.

Current wording

On July 24, 2018, our stockholders voted at a special meeting of stockholders (the “2018 Special Meeting”) to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the 2018 Special Meeting, effective July 25, 2018, our applicable asset coverage ratio under the 1940 Act has been decreased to 150% from 200%. As a result, we are permitted under the 1940 Act to incur indebtedness at a level which is more consistent with a portfolio of senior secured debt. As of June 30, 2024, our asset coverage ratio was 187.4%.

Previous wording

The total value of our investment portfolio was $2,527.5 million as of March 31, 2024, as compared to $2,488.7 million as of December 31, 2023. As of March 31, 2024, we had investments in 337 portfolio companies with an aggregate cost of $2,551.3 million. As of December 31, 2023, we had investments in 336 portfolio companies with an aggregate cost of $2,535.6 million. As of both March 31, 2024 and December 31, 2023, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.

Current wording

The total value of our investment portfolio was $2,395.7 million as of June 30, 2024, as compared to $2,488.7 million as of December 31, 2023. As of June 30, 2024, we had investments in 329 portfolio companies with an aggregate cost of $2,445.9 million. As of December 31, 2023, we had investments in 336 portfolio companies with an aggregate cost of $2,535.6 million. As of both June 30, 2024 and December 31, 2023, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.

Previous wording

During the three months ended March 31, 2024, we made 10 new investments totaling $63.5 million and made investments in existing portfolio companies totaling $78.9 million. We had nine loans repaid totaling $72.2 million and received $23.3 million of portfolio company principal payments. We received $4.3 million of return of capital from our joint ventures and equity investments. We received $12.5 million for the sale of loans, recognizing a net realized loss on these transactions of $0.8 million. In addition, investments in two portfolio companies were restructured, which resulted in a loss of $12.7 million. Lastly, we received proceeds related to the sale of equity investments totaling $6.5 million and recognized a net realized gain on such sales totaling $0.8 million.

Current wording

During the six months ended June 30, 2024, we made 19 new investments totaling $102.1 million and made investments in existing portfolio companies totaling $118.8 million. We had 24 loans repaid totaling $188.3 million and received $45.1 million of portfolio company principal payments. We received $8.1 million of return of capital from our joint ventures and equity investments. We received $40.7 million for the sale of loans, recognizing a net realized loss on these transactions of $0.4 million. In addition, investments in two portfolio companies were restructured, which resulted in a loss of $12.7 million. Lastly, we received proceeds related to the sale of equity investments totaling $31.4 million and recognized a net realized gain on such sales totaling $3.9 million.

Previous wording

During the three months ended March 31, 2023, we made 11 new investments totaling $65.8 million, made investments in existing portfolio companies totaling $33.9 million and made a $45.0 million equity co-investment alongside certain affiliates in a portfolio company that specializes in providing financing to plaintiff law firms engaged in mass tort and other civil litigation. We had four loans repaid totaling $26.6 million, received $12.7 million of portfolio company principal payments and received $9.1 million of return of capital from our joint ventures. In addition, we sold $1.0 million of loans, recognizing a net realized loss on these transactions of $0.3 million. We received proceeds related to the sale of equity investments totaling $4.3 million and recognized a net realized gain on such sales totaling $1.0 million.

Current wording

During the six months ended June 30, 2023, we made 15 new investments totaling $81.4 million, made investments in existing portfolio companies totaling $71.6 million and made a $55.0 million equity co-investment alongside certain affiliates in a portfolio company that specializes in providing financing to plaintiff law firms engaged in mass tort and other civil litigation. We had nine loans repaid totaling $58.2 million and received $38.3 million of portfolio company principal payments, recognizing a loss on these repayments of $0.7 million. We received $16.3 million of return of capital from our joint ventures and equity investments. In addition, we received $25.4 million for the sale of loans, recognizing a net realized loss on these transactions of $44.0 million, and sold $46.5 million of middle-market portfolio debt investments to our joint ventures realizing a gain on these transactions of $0.1 million. In addition, investments in two portfolio companies were restructured, which resulted in a loss of $2.0 million. Lastly, we received proceeds related to the sale of equity investments totaling $4.3 million and recognized a net realized gain on such sales totaling $1.1 million.

Previous wording

Total portfolio investment activity for the three months ended March 31, 2024 and 2023 was as follows:

Current wording

Total portfolio investment activity for the six months ended June 30, 2024 and 2023 was as follows:

Previous wording

Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of March 31, 2024, we had six portfolio companies with investments on non-accrual, the aggregate fair value of which was $7.9 million, which comprised 0.3% of the total fair value of our portfolio, and the aggregate cost of which was $38.1 million, which comprised 1.5% of the total cost of our portfolio. As of December 31, 2023, we had four portfolio companies with investments on non-accrual, the aggregate fair value of which was $37.2 million, which comprised 1.5% of the total fair value of our portfolio, and the aggregate cost of which was $62.6 million, which comprised 2.5% of the total cost of our portfolio.

Current wording

Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of June 30, 2024, we had seven portfolio companies with investments on non-accrual, the aggregate fair value of which was $6.5 million, which comprised 0.3% of the total fair value of our portfolio, and the aggregate cost of which was $43.2 million, which comprised 1.8% of the total cost of our portfolio. As of December 31, 2023, we had four portfolio companies with investments on non-accrual, the aggregate fair value of which was $37.2 million, which comprised 1.5% of the total fair value of our portfolio, and the aggregate cost of which was $62.6 million, which comprised 2.5% of the total cost of our portfolio.

Previous wording

During the quarter ended September 30, 2023, we placed our first lien senior secured debt investment in Anju Software, Inc., or Anju Software, on non-accrual status. As a result, under U.S. generally accepted accounting principles (“U.S. GAAP”), we will not recognize interest income on our first lien senior secured debt investment in Anju Software for financial reporting purposes. As of March 31, 2024, the cost of our first lien senior secured debt investment in Anju Software was $13.3 million and the fair value of such investment was $2.7 million.

Current wording

During the quarter ended September 30, 2023, we placed our first lien senior secured debt investment in Anju Software, Inc., or Anju Software, on non-accrual status. As a result, under U.S. generally accepted accounting principles (“U.S. GAAP”), we will not recognize interest income on our first lien senior secured debt investment in Anju Software for financial reporting purposes. As of June 30, 2024, the cost of our first lien senior secured debt investment in Anju Software was $13.3 million and the fair value of such investment was $0.9 million.

Previous wording

In connection with the Sierra Merger, we purchased our debt and equity investments in Black Angus Steakhouse, LLC, or Black Angus. The Black Angus 10% PIK term loan is on non-accrual status and as a result, under U.S. GAAP, we will not recognize interest income on our 10% PIK term loan in Black Angus for financial reporting purposes. As of March 31, 2024, the cost of the 10% PIK term loan in Black Angus was $9.6 million and the fair value of such investment was $2.5 million.

Current wording

In connection with the Sierra Merger, we purchased our debt and equity investments in Black Angus Steakhouse, LLC, or Black Angus. The Black Angus 10% PIK term loan is on non-accrual status and as a result, under U.S. GAAP, we will not recognize interest income on our 10% PIK term loan in Black Angus for financial reporting purposes. As of June 30, 2024, the cost of the 10% PIK term loan in Black Angus was $9.6 million and the fair value of such investment was $1.9 million.

Previous wording

During the quarter ended March 31, 2024, we placed our debt investment in Canadian Orthodontic Partners Corp., or Canadian Orthodontics, on non-accrual status. As a result, under U.S. GAAP, we will not recognize interest income on our debt investment in Canadian Orthodontics for financial reporting purposes. As of March 31, 2024, the cost of our debt investment in Canadian Orthodontics was $1.9 million and the fair value of such investment was $1.1 million.

Current wording

During the quarter ended March 31, 2024, we placed our first lien senior secured debt investment in Canadian Orthodontic Partners Corp., or Canadian Orthodontics, on non-accrual status. As a result, under U.S. GAAP, we will not recognize interest income on our first lien senior secured debt investment in Canadian Orthodontics for financial reporting purposes. As of June 30, 2024, the cost of our first lien senior secured debt investment in Canadian Orthodontics was $1.9 million and the fair value of such investment was $0.5 million.

Previous wording

During the quarter ended March 31, 2024, we placed our debt investments in GPNZ II GmbH., or GPNZ, on non-accrual status. As a result, under U.S. GAAP, we will not recognize interest income on our debt investments in GPNZ for financial reporting purposes. As of March 31, 2024, the cost of our debt investments in GPNZ was $0.6 million and the fair value of such investments was $0.4 million.

Current wording

During the quarter ended March 31, 2024, we placed our first lien EURIBOR + 6.00% debt investment in GPNZ II GmbH, or GPNZ, on non-accrual status. As a result, under U.S. GAAP, we will not recognize interest income on our first lien EURIBOR + 6.00% debt investment in GPNZ for financial reporting purposes. As of June 30, 2024, the cost of our first lien EURIBOR + 6.00% debt investment in GPNZ was $0.4 million and the fair value of such investments was $0.1 million.

Previous wording

During the quarter ended March 31, 2024, we placed our debt investments in Marmoutier Holding B.V., or Marmoutier, on non-accrual status. As a result, under U.S. GAAP, we will not recognize interest income on our debt investments in Marmoutier for financial reporting purposes. As of March 31, 2024, the cost of our debt investments in Marmoutier was $2.6 million and the fair value of such investments was $1.2 million.

Current wording

During the quarter ended March 31, 2024, we placed our debt investments in Marmoutier Holding B.V., or Marmoutier, on non-accrual status. As a result, under U.S. GAAP, we will not recognize interest income on our debt investments in Marmoutier for financial reporting purposes. As of June 30, 2024, the cost of our debt investments in Marmoutier was $2.8 million and the fair value of such investments was $1.2 million.

Previous wording

Comparison of the three months ended March 31, 2024 and March 31, 2023

Current wording

Comparison of the three andsix months ended June 30, 2024 and June 30, 2023

Previous wording

Operating results for the three months ended March 31, 2024 and 2023 were as follows:

Current wording

Operating results for the three and six months ended June 30, 2024 and 2023 were as follows:

Previous wording

The change in total investment income for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was primarily due to an increase in the weighted average yield on the portfolio from higher base rates and increased dividends from portfolio companies and joint venture investments. The weighted average yield on the principal amount of our outstanding debt investments, other than non-accrual debt investments, was 10.7% as of March 31, 2024, as compared to 10.2% as of March 31, 2023. For the three months ended March 31, 2024, dividends from portfolio companies and joint venture investments were $8.5 million, as compared to $7.9 million for the three months ended March 31, 2023.

Current wording

The change in total investment income for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was primarily due to an increase in the weighted average yield on the portfolio from higher base rates and increased dividends from portfolio companies and joint venture investments. The weighted average yield on the principal amount of our outstanding debt investments, other than non-accrual debt investments, was 10.9% as of June 30, 2024, as compared to 10.4% as of June 30, 2023.

Previous wording

Interest and other financing fees during the three months ended March 31, 2024 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes, the February Notes, the November 2026 Notes and the February 2029 Notes (each as defined below under “Liquidity and Capital Resources”). Interest and other financing fees during the three months ended March 31, 2023 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes, the February Notes and the November 2026 Notes. The increase in interest and other financing fees for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, was primarily attributable to the interest and financing fees on the February 2029 Notes and an increase in the weighted average interest rate on the February 2019 Credit Facility. The weighted average interest rate on the February 2019 Credit Facility was 6.9% as of March 31, 2024, as compared to 6.3% as of March 31, 2023.

Current wording

Interest and other financing fees during the three and six months ended June 30, 2024 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes, the February Notes, the November 2026 Notes and the February 2029 Notes (each as defined below under “Liquidity and Capital Resources”). Interest and other financing fees during the three and six months ended June 30, 2023 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes, the February Notes and the November 2026 Notes.

Previous wording

Under the terms of the Barings BDC Advisory Agreement, we pay Barings a base management fee (the “Base Management Fee”), quarterly in arrears on a calendar quarter basis. The Base Management Fee is calculated based on the average value of our gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter are appropriately pro-rated. See “Note 2. Agreements and Related Party Transactions” to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Barings BDC Advisory Agreement and the fee arrangements thereunder. For the three months ended March 31, 2024, the amount of Base Management Fees incurred were approximately $8.3 million. For the three months ended March 31, 2023, the amount of Base Management Fees incurred were approximately $7.9 million. The increase in the Base Management Fees for the three months ended March 31, 2024 versus the three months ended March 31, 2023 is primarily related to the average value of gross assets increasing from $2,512.9 million as of the end of the two most recently completed calendar quarters prior to March 31, 2023 to $2,649.4 million as of the end of the two most recently completed calendar quarters prior to March 31, 2024. For both the three months ended March 31, 2024 and 2023, the Base Management Fee rate was 1.250%.

Current wording

Under the terms of the Barings BDC Advisory Agreement, we pay Barings a base management fee (the “Base Management Fee”), quarterly in arrears on a calendar quarter basis. The Base Management Fee is calculated based on the average value of our gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter are appropriately pro-rated. See “Note 2. Agreements and Related Party Transactions” to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Barings BDC Advisory Agreement and the fee arrangements thereunder. For the three and six months ended June 30, 2024, the amount of Base Management Fees incurred were approximately $8.2 million and $16.5 million. For the three and six months ended June 30, 2023, the amount of Base Management Fees incurred were approximately $8.1 million and $16.0 million, respectively. The increase in the Base Management Fees for the three and six months ended June 30, 2024 versus the three and six months ended June 30, 2023 is primarily related to the average value of gross assets increasing from $2,602.9 million as of the end of the two most recently completed calendar quarters prior to June 30, 2023 to $2,620.7 million as of the end of the two most recently completed calendar quarters prior to June 30, 2024. For both the three and six months ended June 30, 2024 and 2023, the Base Management Fee rate was 1.250%.

Previous wording

Under the Barings BDC Advisory Agreement, we pay Barings an incentive fee (the “Incentive Fee”). A portion of the Incentive Fee is based on our income (the “Income-Based Fee”) and a portion is based on our capital gains (the “Capital Gains Fee”). The Income-Based Fee is determined and paid quarterly in arrears based on the amount by which (x) the aggregate pre-incentive fee net investment income in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of our first eleven calendar quarters that commences on or after January 1, 2021) exceeds (y) the hurdle amount as calculated for the same period. See “Note 2. Agreements and Related Party Transactions” to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Barings BDC Advisory Agreement and the fee arrangements thereunder. For the three months ended March 31, 2024, the amount of Income-Based Fees incurred were $8.2 million, as compared to $9.6 million for the three months ended March 31, 2023. The Income-Based Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return during the relevant Trailing Twelve Quarters less (b) the aggregate Income-Based Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. See “Note 2. Agreements and Related Party Transactions” to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Incentive Fee Cap. The decrease in the Incentive Fees for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, relates predominately to the Incentive Fee Cap for the three months ended March 31, 2024.

Current wording

Under the Barings BDC Advisory Agreement, we pay Barings an incentive fee (the “Incentive Fee”). A portion of the Incentive Fee is based on our income (the “Income-Based Fee”) and a portion is based on our capital gains (the “Capital Gains Fee”). The Income-Based Fee is determined and paid quarterly in arrears based on the amount by which (x) the aggregate pre-incentive fee net investment income in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of our first eleven calendar quarters that commences on or after January 1, 2021) exceeds (y) the hurdle amount as calculated for the same period. See “Note 2. Agreements and Related Party Transactions” to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Barings BDC Advisory Agreement and the fee arrangements thereunder. For the three and six months ended June 30, 2024, the amount of Income-Based Fees incurred were $1.1 million and $9.3 million, respectively, as compared to $10.1 million and $19.7 million, respectively, for the three and six months ended June 30, 2023. The Income-Based Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return during the relevant Trailing Twelve Quarters less (b) the aggregate Income-Based Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. See “Note 2. Agreements and Related Party Transactions” to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the Incentive Fee Cap. The decrease in the Incentive Fees for the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, relates predominately to the Incentive Fee Cap for the three and six months ended June 30, 2024.

Previous wording

We entered into the Administration Agreement with Barings in August 2018. Under the terms of the Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operations. We reimburse Barings for the costs and expenses incurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to be negotiated and mutually agreed to by us and Barings quarterly in arrears; provided that the agreed-upon quarterly expense amount will not exceed the amount of expenses that would otherwise be reimbursable by us under the Administration Agreement for the applicable quarterly period, and Barings will not be entitled to the recoupment of any amounts in excess of the agreed-upon quarterly expense amount. See “Note 2. Agreements and Related Party Transactions” to our Unaudited Consolidated Financial Statements for additional information regarding the Administration Agreement. For the three months ended March 31, 2024, the amount of administration expenses incurred and invoiced by Barings for expenses was approximately $0.6 million. For the three months ended March 31, 2023, the amount of administration expenses incurred and invoiced by Barings for expenses was approximately $0.7 million. In addition to expenses incurred under the Administration Agreement, general and administrative expenses include fees payable to the members of our Board for their service on the Board, directors’ and officers’ insurance costs, as well as legal and accounting expenses.

Current wording

We entered into the Administration Agreement with Barings in August 2018. Under the terms of the Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operations. We reimburse Barings for the costs and expenses incurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to be negotiated and mutually agreed to by us and Barings quarterly in arrears; provided that the agreed-upon quarterly expense amount will not exceed the amount of expenses that would otherwise be reimbursable by us under the Administration Agreement for the applicable quarterly period, and Barings will not be entitled to the recoupment of any amounts in excess of the agreed-upon quarterly expense amount. See “Note 2. Agreements and Related Party Transactions” to our Unaudited Consolidated Financial Statements for additional information regarding the Administration Agreement. For the three and six months ended June 30, 2024, the amount of administration expenses incurred and invoiced by Barings for expenses was approximately $0.4 million and $1.0 million, respectively. For the three and six months ended June 30, 2023, the amount of administration expenses incurred and invoiced by Barings for expenses was approximately $0.5 million and $1.2 million, respectively. In addition to expenses incurred under the Administration Agreement, general and administrative expenses include fees payable to the members of our Board for their service on the Board, directors’ and officers’ insurance costs, as well as legal and accounting expenses.

Previous wording

Net realized gains (losses) during the three months ended March 31, 2024 and 2023 were as follows:

Current wording

Net realized gains (losses) during the three and six months ended June 30, 2024 and 2023 were as follows:

Previous wording

During the three months ended March 31, 2024, we recognized net realized losses totaling $21.5 million, which consisted primarily of a net loss on our investment portfolio of $12.6 million, a net gain on foreign currency transactions of $0.2 million and a net loss on forward currency contracts of $9.1 million. The net loss on our investment portfolio predominately related to the restructuring of two investments which was primarily reclassified from unrealized depreciation during the three months ended March 31, 2024.

Current wording

During the three months ended June 30, 2024, we recognized net realized gains totaling $8.1 million, which consisted primarily of a net gain on our investment portfolio of $3.5 million, a net gain on foreign currency transactions of $0.2 million and a net gain on forward currency contracts of $4.4 million. The net gain on our investment portfolio predominately related to a $7.2 million gain on the sale of one investment, partially offset by a $4.2 million loss on the sale of one investment, which was reclassified from unrealized depreciation during the three months ended June 30, 2024. During the six months ended June 30, 2024, we recognized net realized losses of $13.4 million, which consisted primarily of a net loss on our investment portfolio of $9.1 million, a net gain on foreign currency transactions of $0.4 million and a net loss on forward currency contracts of $4.7 million. The net loss on our investment portfolio was primarily comprised of a $12.7 million loss on the restructuring of two investments and a $4.2 million loss on the sale of one investment, which were primarily reclassified from unrealized depreciation, partially offset by a $7.2 million gain on the sale of one investment during the six months ended June 30, 2024.

Previous wording

Net unrealized appreciation (depreciation) during the three months ended March 31, 2024 and 2023 was as follows:

Current wording

Net unrealized appreciation (depreciation) during the three and six months ended June 30, 2024 and 2023 was as follows:

Previous wording

During the three months ended March 31, 2024, we recorded net unrealized appreciation totaling $36.1 million, consisting of net unrealized appreciation reclassification adjustments of $12.6 million related to the net realized losses on the sales / repayments and restructures of certain investments, net unrealized appreciation on our current portfolio of $10.5 million, net unrealized appreciation related to foreign currency transactions of $3.5 million and net unrealized appreciation related to forward currency contracts of $15.8 million, partially offset by unrealized depreciation of $1.2 million on the MVC credit support agreement with Barings and unrealized depreciation of $5.1 million on the Sierra credit support agreement with Barings. The net unrealized appreciation on our current portfolio of $10.5 million was driven primarily by broad market moves for investments of $13.9 million and credit or fundamental performance of investments of $6.9 million, partially offset by the impact of foreign currency exchange rates on investments of $10.3 million.

Current wording

During the six months ended June 30, 2024, we recorded net unrealized appreciation totaling $5.3 million consisting of net unrealized appreciation reclassification adjustments of $16.2 million related to the net realized losses on the sales / repayments and restructures of certain investments, unrealized appreciation of $0.6 million on the MVC credit support agreement with Barings, net unrealized appreciation related to foreign currency transactions of $4.5 million and net unrealized appreciation related to forward currency contracts of $11.4 million, partially offset by net unrealized depreciation on our current portfolio of $19.5 million and unrealized depreciation of $7.9 million on the Sierra credit support agreement with Barings. The net unrealized depreciation on our current portfolio of $19.5 million was driven primarily by the credit or fundamental performance of investments of $14.7 million and the impact of foreign currency exchange rates on investments of $11.1 million, partially offset by broad market moves for investments of $6.3 million .

Previous wording

During the three months ended March 31, 2023, we recorded net unrealized appreciation totaling $22.0 million, consisting of net unrealized appreciation on our current portfolio of $11.8 million, unrealized appreciation of $0.9 million on the MVC credit support agreement with Barings, unrealized appreciation of $4.7 million on the Sierra credit support agreement with Barings, net unrealized appreciation related to foreign currency transactions of $5.4 million, net of unrealized depreciation reclassification adjustments of $0.7 million related to the net realized gains on the sales / repayments of certain investments and $0.1 million of deferred taxes. The net unrealized appreciation on our current portfolio of $11.8 million was driven primarily by broad market moves for investments of $4.0 million, credit or fundamental performance of investments of $0.9 million and the impact of foreign currency exchange rates on investments of $6.9 million.

Current wording

During the six months ended June 30, 2023, we recorded net unrealized appreciation totaling $77.0 million, consisting of net unrealized appreciation on our current portfolio of $17.1 million, net unrealized appreciation on forward currency contracts of $15.8 million, unrealized appreciation of $3.3 million on the MVC credit support agreement with Barings, unrealized appreciation of $4.3 million on the Sierra credit support agreement with Barings and net unrealized appreciation reclassification adjustments of $47.6 million related to the net realized losses on the sales / repayments of certain investments, partially offset by net unrealized depreciation of $11.0 million related to foreign currency transactions and $0.1 million of deferred taxes. The net unrealized appreciation on our current portfolio of $17.1 million was driven primarily by broad market moves for investments of $3.0 million, credit or fundamental performance of investments of $3.4 million and the impact of foreign currency exchange rates on investments of $10.7 million.

Previous wording

For the three months ended March 31, 2024, we experienced a net decrease in cash in the amount of $6.4 million. During that period, our operating activities provided $4.9 million in cash, with proceeds from sales or repayments of portfolio investments totaling $118.0 million and other cash collections from investments exceeding purchases of portfolio investments of $143.1 million. In addition, our financing activities used net cash of $11.3 million, consisting of net repayments under the February 2019 Credit Facility of $275.5 million, dividends paid in the amount of $27.6 million and share repurchases of $1.1 million, partially offset by net proceeds of $292.9 million from the issuance of the February 2029 Notes. As of March 31, 2024, we had $64.1 million of cash and foreign currencies on hand, including $13.3 million of restricted cash.

Current wording

For the six months ended June 30, 2024, we experienced a net increase in cash in the amount of $13.8 million. During that period, our operating activities provided $143.2 million in cash, with proceeds from sales or repayments of portfolio investments totaling $289.3 million and other cash collections from investments exceeding purchases of portfolio investments of $216.9 million. In addition, our financing activities used net cash of $129.4 million, consisting of net repayments under the February 2019 Credit Facility of $364.0 million, dividends paid in the amount of $55.1 million and share repurchases of $3.0 million, partially offset by net proceeds of $292.8 million from the issuance of the February 2029 Notes. As of June 30, 2024, we had $84.4 million of cash and foreign currencies on hand, including $15.0 million of restricted cash.

Previous wording

For the three months ended March 31, 2023, we experienced a net decrease in cash in the amount of $84.0 million. During that period, our operating activities used $92.0 million in cash, consisting primarily of purchases of portfolio investments of $179.6 million partially offset by proceeds from sales or repayments of portfolio investments totaling $69.5 million. In addition, our financing activities provided net cash of $8.0 million, consisting of net borrowings under the February 2019 Credit Facility of $35.0 million, partially offset by dividends paid in the amount of $27.0 million. As of March 31, 2023, we had $55.4 million of cash and foreign currencies on hand.

Current wording

that period, our operating activities used $27.2 million in cash, consisting primarily of purchases of portfolio investments of

Previous wording

On February 21, 2019, we entered into a senior secured credit facility with ING Capital LLC (“ING”), as administrative agent, and the lenders party thereto (as amended, restated and otherwise modified from time to time, the “February 2019 Credit Facility”). The initial commitments under the February 2019 Credit Facility totaled $800.0 million. Effective on November 4, 2021, we increased aggregate commitments under the February 2019 Credit Facility to $875.0 million from $800.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants (the “November 2021 Amendment”). Effective on February 25, 2022, we increased aggregate commitments under the February 2019 Credit Facility to $965.0 million from $875.0 million pursuant to the accordion feature under the February 2019 Credit Facility, and the allowance for an increase in the total commitments increased to $1.5 billion from $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants (the “February 2022 Amendment”). Effective on April 1, 2022, we increased the aggregate commitments under the February 2019 Credit Facility to $1,065.0 million from $965.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.5 billion subject to certain conditions and the satisfaction of specified financial covenants (the “April 2022 Amendment”). We can borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, which is structured as a revolving credit facility, is secured primarily by a material portion of our assets and guaranteed by certain of our subsidiaries. Following the termination on June 30, 2020 of Barings BDC Senior

Current wording

On February 21, 2019, we entered into a senior secured credit facility with ING Capital LLC (“ING”), as administrative agent, and the lenders party thereto (as amended, restated and otherwise modified from time to time, the “February 2019 Credit Facility”). The initial commitments under the February 2019 Credit Facility totaled $800.0 million. Effective on November 4, 2021, we increased aggregate commitments under the February 2019 Credit Facility to $875.0 million from $800.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants (the “November 2021 Amendment”). Effective on February 25, 2022, we increased aggregate commitments under the February 2019 Credit Facility to $965.0 million from $875.0 million pursuant to the accordion feature under the February 2019 Credit Facility, and the allowance for an increase in the total commitments increased to $1.5 billion from $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants (the “February 2022 Amendment”). Effective on April 1, 2022, we increased the aggregate commitments under the February 2019 Credit Facility to $1,065.0 million from $965.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.5 billion subject to certain conditions and the satisfaction of specified financial covenants (the “April 2022 Amendment”). We can borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, which is structured as a revolving credit facility, is secured primarily by a material portion of our assets and guaranteed by certain of our subsidiaries. Following the termination on June 30, 2020 of Barings BDC Senior Funding I, LLC’s (“BSF”) credit facility entered into in August 2018 with Bank of America, N.A. (the “August 2018 Credit Facility”), BSF became a subsidiary guarantor and its assets secure the February 2019 Credit Facility. Effective May 9, 2023, the revolving period of the February 2019 Credit Facility was extended to February 21, 2025, followed by a one-year repayment period, and the maturity date was extended to February 21, 2026 (the “May 2023 Amendment”).

Previous wording

As of March 31, 2024, we were in compliance with all covenants under the February 2019 Credit Facility and had U.S. dollar borrowings of $214.0 million outstanding under the February 2019 Credit Facility with a weighted average interest rate of 7.420% (one month SOFR of 5.320%), borrowings denominated in Swedish kronor of kr 12.8 million ($1.2 million U.S. dollars) with an interest rate of 6.063% (one month STIBOR of 4.063%), borrowings denominated in British pounds sterling of £66.6 million ($84.1 million U.S. dollars) with an interest rate of 7.221% (one month SONIA of 5.189%) and borrowings denominated in Euros of €130.6 million ($141.0 million U.S. dollars) with an interest rate of 5.938% (one month EURIBOR of 3.938%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in “Net unrealized appreciation (depreciation) - foreign currency transactions” in our Unaudited Consolidated Statements of Operations.

Current wording

As of June 30, 2024, we were in compliance with all covenants under the February 2019 Credit Facility and had U.S. dollar borrowings of $139.0 million outstanding under the February 2019 Credit Facility with a weighted average interest rate of 7.431% (one month SOFR of 5.331%), borrowings denominated in Swedish kronor of kr 12.8 million ($1.2 million U.S. dollars) with an interest rate of 5.750% (one month STIBOR of 3.750%), borrowings denominated in British pounds sterling of £57.6 million ($72.8 million U.S. dollars) with an interest rate of 7.233% (one month SONIA of 5.200%) and borrowings denominated in Euros of €128.6 million ($137.8 million U.S. dollars) with an interest rate of 5.625% (one month EURIBOR of 3.625%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in “Net unrealized appreciation (depreciation) - foreign currency transactions” in our Unaudited Consolidated Statements of Operations.

Previous wording

The fair values of the borrowings outstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of March 31, 2024, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $440.4 million. See “Note 5. Borrowings — February 2019 Credit Facility” to our Unaudited Consolidated Financial Statements for additional information regarding the February 2019 Credit Facility.

Current wording

The fair values of the borrowings outstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of June 30, 2024, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $350.8 million. See “Note 5. Borrowings — February 2019 Credit Facility” to our Unaudited Consolidated Financial Statements for additional information regarding the February 2019 Credit Facility.

Previous wording

As of March 31, 2024, the fair value of the outstanding Series B Notes and the Series C Notes was $59.5 million and $103.5 million, respectively. The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

Current wording

As of June 30, 2024, the fair value of the outstanding Series B Notes and the Series C Notes was $60.3 million and $104.9 million, respectively. The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

Previous wording

As of March 31, 2024, the fair value of the outstanding Series D Notes and the Series E Notes was $74.9 million and $62.7 million, respectively. The fair value determinations of the Series D Notes and Series E Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

Current wording

As of June 30, 2024, the fair value of the outstanding Series D Notes and the Series E Notes was $75.0 million and $62.9 million, respectively. The fair value determinations of the Series D Notes and Series E Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

Previous wording

The November 2026 Notes Indenture contains certain covenants, including covenants requiring us to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Sections 61(a)(1) and (2) of the 1940 Act, whether or not we are subject to those requirements, and to provide financial information to the holders of the November 2026 Notes and the Trustee if we are no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These covenants are subject to important limitations and exceptions that are described in the November 2026 Notes Indenture.

Current wording

The November 2026 Notes Indenture contains certain covenants, including covenants requiring us to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Sections 61(a)(1) and (2) of the 1940 Act, whether or not we are subject to those requirements, and to provide financial information to the holders of the November 2026 Notes and the Trustee if we are no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the

Previous wording

On February 7, 2024, we entered into an underwriting agreement among us, Barings LLC, and Wells Fargo Securities, LLC, SMBC Nikko Securities America, Inc., BMO Capital Markets Corp., and Fifth Third Securities, Inc., in connection with the issuance and sale of $300 million in aggregate principal amount of our 7.000% senior unsecured notes due February 15, 2029 (the “February 2029 Notes”). The February 2029 Notes offering closed on February 12, 2024 and the February 2029 Notes were issued under a Second Supplemental Indenture, dated February 12, 2024, between us and the Trustee, to the Base Indenture (the “Second Supplemental Indenture,” and together with the Base Indenture, the “February 2029 Notes Indenture”).

Current wording

On February 7, 2024, we entered into an underwriting agreement among us, Barings LLC, and Wells Fargo Securities, LLC, SMBC Nikko Securities America, Inc., BMO Capital Markets Corp., and Fifth Third Securities, Inc., in connection with the issuance and sale of $300.0 million in aggregate principal amount of our 7.000% senior unsecured notes due February 15, 2029 (the “February 2029 Notes”). The February 2029 Notes offering closed on February 12, 2024 and the February 2029 Notes were issued under a Second Supplemental Indenture, dated February 12, 2024, between us and the Trustee, to the Base Indenture (the “Second Supplemental Indenture,” and together with the Base Indenture, the “February 2029 Notes Indenture”).

Previous wording

In connection with the offering of the February 2029 Notes, on February 12, 2024, we entered into a $300.0 million notional value interest rate swap. We receive a fixed rate interest at 7.00% paid semi-annually and pay semi-annually based on a compounded daily rate of SOFR plus 3.14750%. The swap transaction matures on February 15, 2029. The interest expense related to the February 2029 Notes will be equally offset by proceeds received from the interest rate swap. The swap adjusted interest expense is included as a component of interest and other financing fees in our Unaudited Consolidated Statements of Operations. As of March 31, 2024, the interest rate swap had a fair value of $3.2 million. Depending on the nature of the balance at period end, the fair value of the interest rate swap is either included as a component of derivative assets or derivative liabilities on our Unaudited Consolidated Balance Sheet. The change in fair value of the interest rate swap is offset by the change in fair value of the February 2029 Notes. The fair value of the Company’s interest rate swap is based on unadjusted prices from independent pricing services and independent indicative broker quotes, which are Level 2 inputs.

Current wording

In connection with the offering of the February 2029 Notes, on February 12, 2024, we entered into a $300.0 million notional value interest rate swap. We receive a fixed rate interest at 7.00% paid semi-annually and pay semi-annually based on a compounded daily rate of SOFR plus 3.14750%. The swap transaction matures on February 15, 2029. The interest expense related to the February 2029 Notes will be equally offset by proceeds received from the interest rate swap. The swap adjusted interest expense is included as a component of interest and other financing fees in our Unaudited Consolidated Statements of Operations. As of June 30, 2024, the interest rate swap had a fair value of $(5.6) million. Depending on the nature of the balance at period end, the fair value of the interest rate swap is either included as a component of derivative assets or derivative liabilities on our Unaudited Consolidated Balance Sheet. The change in fair value of the interest rate swap is offset by the change in fair value of the February 2029 Notes. The fair value of the Company’s interest rate swap is based on unadjusted prices from independent pricing services and independent indicative broker quotes, which are Level 2 inputs.

Previous wording

On February 23, 2023, our Board authorized a 12-month share repurchase program. Under the program, we were able to repurchase, during the 12-month period commencing on March 1, 2023, up to $30.0 million in the aggregate of our outstanding common stock in the open market at prices below the then-current net asset value (“NAV”) per share. The timing, manner, price and amount of any share repurchases was determined by us, at our discretion, based upon the evaluation of economic and market conditions, our stock price, applicable legal, contractual and regulatory requirements and other factors. The program terminated on March 1, 2024. The program did not require us to repurchase any specific number of shares, and we could not assure stockholders that any shares would be repurchased under the program. During the three months ended March 31, 2024, we did not repurchase any shares pursuant to the authorized program.

Current wording

On February 23, 2023, our Board authorized a 12-month share repurchase program. Under the program, we were able to repurchase, during the 12-month period commencing on March 1, 2023, up to $30.0 million in the aggregate of our outstanding common stock in the open market at prices below the then-current net asset value (“NAV”) per share. The timing, manner, price and amount of any share repurchases was determined by us, at our discretion, based upon the evaluation of economic and market conditions, our stock price, applicable legal, contractual and regulatory requirements and other factors. The program terminated on March 1, 2024. The program did not require us to repurchase any specific number of shares, and we could not assure stockholders that any shares would be repurchased under the program. During the six months ended June 30, 2024, we did not repurchase any shares pursuant to the authorized program.

Previous wording

On February 22, 2024, our Board authorized a new 12-month share repurchase program. Under the program, we may repurchase, during the 12-month period commencing on March 1, 2024, up to $30.0 million in the aggregate of our outstanding common stock in the open market at prices below the then-current NAV per share. The timing, manner, price and amount of any share repurchases will be determined by us, in our discretion, based upon the evaluation of economic and market conditions, our stock price, applicable legal, contractual and regulatory requirements and other factors. The program is expected to be in effect until March 1, 2025, unless extended or until the aggregate repurchase amount that has been approved by the Board has been expended. The program does not require us to repurchase any specific number of shares, and we cannot assure stockholders that any shares will be repurchased under the program. The program may be suspended, extended, modified or discontinued at any time. During the three months ended March 31, 2024, we repurchased a total of 115,911 shares of common stock in the open market under the authorized program at an average price of $9.56 per share, including brokerage commissions.

Current wording

On February 22, 2024, our Board authorized a new 12-month share repurchase program. Under the program, we may repurchase, during the 12-month period commencing on March 1, 2024, up to $30.0 million in the aggregate of our outstanding common stock in the open market at prices below the then-current NAV per share. The timing, manner, price and amount of any share repurchases will be determined by us, in our discretion, based upon the evaluation of economic and market conditions, our stock price, applicable legal, contractual and regulatory requirements and other factors. The program is expected to be in effect until March 1, 2025, unless extended or until the aggregate repurchase amount that has been approved by the Board has been expended. The program does not require us to repurchase any specific number of shares, and we cannot assure stockholders that any shares will be repurchased under the program. The program may be suspended, extended, modified or discontinued at any time. During the six months ended June 30, 2024, we repurchased a total of 309,078 shares of common stock in the open market under the authorized program at an average price of $9.76 per share, including brokerage commissions.