Quarterly report pursuant to Section 13 or 15(d)

Debt (Tables)

v3.24.3
Debt (Tables)
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Available and Outstanding Debt
As of September 30, 2024 and December 31, 2023, the Company had the following available and outstanding debt:
(in thousands) September 30, 2024 December 31, 2023
  Total Available Principal
Carrying Value(1)
Total Available Principal
Carrying Value(1)
SBA Debentures(2)(4)
$ 350,000  $ 175,000  $ 170,763  $ 175,000  $ 175,000  $ 170,323 
July 2024 Notes —  —  —  105,000  105,000  104,828 
February 2025 Notes 50,000  50,000  49,952  50,000  50,000  49,866 
June 2025 Notes 70,000  70,000  69,879  70,000  70,000  69,757 
June 2025 3-Year Notes 50,000  50,000  49,887  50,000  50,000  49,771 
March 2026 A Notes 50,000  50,000  49,866  50,000  50,000  49,795 
March 2026 B Notes 50,000  50,000  49,854  50,000  50,000  49,776 
September 2026 Notes 325,000  325,000  323,075  325,000  325,000  322,339 
January 2027 Notes 350,000  350,000  346,932  350,000  350,000  345,935 
2031 Asset-Backed Notes 150,000  150,000  148,985  150,000  150,000  148,544 
2033 Notes 40,000  40,000  39,016  40,000  40,000  38,935 
MUFG Bank Facility(2)
400,000  240,000  240,000  400,000  61,000  61,000 
SMBC Facility(2)(3)
400,000  201,000  201,000  400,000  94,000  94,000 
Total $ 2,285,000  $ 1,751,000  $ 1,739,209  $ 2,215,000  $ 1,570,000  $ 1,554,869 
(1)Except for the SMBC Facility and MUFG Bank Facility, all carrying values represent the principal amount outstanding less the remaining unamortized debt issuance costs and unaccreted premium or discount, if any, associated with the debt as of the balance sheet date.
(2)Availability subject to the Company meeting the borrowing base requirements.
(3)“Total Available” includes $175.0 million of available commitment through the letter of credit facility as of September 30, 2024 and December 31, 2023.
(4)As of September 30, 2024, the total available debt under the SBA Debentures was $350.0 million, of which $175.0 million was available to HC IV and $175.0 million was available to SBIC V. As of December 31, 2023, the total available debt under the SBA debentures was $175.0 million, all of which was available to HC IV.
The Company held the following SBA debentures outstanding principal balances as of September 30, 2024 and December 31, 2023:
(in thousands)
Issuance/Pooling Date		 Maturity Date
Interest Rate(1)
September 30, 2024 December 31, 2023
March 26, 2021 September 1, 2031 1.58% $ 37,500  $ 37,500 
June 25, 2021 September 1, 2031 1.58% 16,200  16,200 
July 28, 2021 September 1, 2031 1.58% 5,400  5,400 
August 20, 2021 September 1, 2031 1.58% 5,400  5,400 
October 21, 2021 March 1, 2032 3.21% 14,000  14,000 
November 1, 2021 March 1, 2032 3.21% 21,000  21,000 
November 15, 2021 March 1, 2032 3.21% 5,200  5,200 
November 30, 2021 March 1, 2032 3.21% 20,800  20,800 
December 20, 2021 March 1, 2032 3.21% 10,000  10,000 
December 23, 2021 March 1, 2032 3.21% 10,000  10,000 
December 28, 2021 March 1, 2032 3.21% 5,000  5,000 
January 14, 2022 March 1, 2032 3.21% 4,500  4,500 
January 21, 2022 March 1, 2032 3.21% 20,000  20,000 
Total SBA Debentures     $ 175,000  $ 175,000 
(1)Interest rates are determined initially at issuance and reset to a fixed rate at the debentures pooling date. The rates are inclusive of annual SBA charges.
Schedule of Debt Issuance Costs, Net of Accumulated Amortization
Debt issuance costs, net of accumulated amortization, were as follows as of September 30, 2024 and December 31, 2023:
(in thousands) September 30, 2024 December 31, 2023
SBA Debentures $ 4,237  $ 4,677 
July 2024 Notes —  172 
February 2025 Notes 48  134 
June 2025 Notes 121  243 
June 2025 3-Year Notes 113  229 
March 2026 A Notes 134  205 
March 2026 B Notes 146  224 
September 2026 Notes 1,925  2,661 
January 2027 Notes 3,068  4,065 
2031 Asset-Backed Notes 1,015  1,456 
2033 Notes 984  1,065 
MUFG Bank Facility(1)
2,220  3,540 
SMBC Facility(1)
1,235  1,775 
Total $ 15,246  $ 20,446 
(1)The MUFG Bank Facility and SMBC Facility, are line-of-credit arrangements, the debt issuance costs associated with these instruments are included within Other assets on the Consolidated Statements of Assets and Liabilities in accordance with ASC Subtopic 835-30.
Components of Interest Expense, Related Fees and Cash Paid for Interest Expense for Debt
For the three and nine months ended September 30, 2024, the components of interest expense, related fees, and cash paid for interest expense for debt were as follows:
(in thousands) Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024
Description
Interest expense(1)
Amortization of debt issuance cost (loan fees) Unused facility and other fees (loan fees) Total interest expense and fees Cash paid for interest expense
Interest expense(1)
Amortization of debt issuance cost (loan fees) Unused facility and other fees (loan fees) Total interest expense and fees Cash paid for interest expense
SBA Debentures $ 1,149  $ 147  $ —  $ 1,296  $ 2,300  $ 3,424  $ 439  $ —  $ 3,863  $ 4,575 
July 2024 Notes 202  24  —  226  2,504  2,706  172  —  2,878  5,008 
February 2025 Notes 535  29  —  564  1,070  1,605  86  —  1,691  2,140 
June 2025 Notes 755  40  —  795  —  2,263  121  —  2,384  1,508 
June 2025 3-Year Notes 750  38  —  788  —  2,250  116  —  2,366  1,500 
March 2026 A Notes 563  24  —  587  1,125  1,688  71  —  1,759  2,250 
March 2026 B Notes 568  25  —  593  1,138  1,706  77  —  1,783  2,276 
September 2026 Notes 2,174  205  —  2,379  4,266  6,523  612  —  7,135  8,531 
January 2027 Notes 3,080  208  —  3,288  5,906  9,236  622  —  9,858  11,812 
2031 Asset-Backed Notes 1,903  100  —  2,003  1,856  5,710  300  —  6,010  5,568 
2033 Notes 625  27  —  652  625  1,875  81  —  1,956  1,875 
MUFG Bank Facility 4,105  443  329  4,877  3,875  8,181  1,328  1,572  11,081  7,596 
SMBC Facility 3,961  180  174  4,315  4,020  9,989  540  599  11,128  9,582 
Total $ 20,370  $ 1,490  $ 503  $ 22,363  $ 28,685  $ 57,156  $ 4,565  $ 2,171  $ 63,892  $ 64,221 

(1)Interest expense includes amortization of original issue discounts for the three months ended September 30, 2024 of $42 thousand, $126 thousand, and $47 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively. Interest expense includes amortization of original issue discounts for the nine months ended September 30, 2024 of $125 thousand, $377 thousand, and $141 thousand, related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
For the three and nine months ended September 30, 2023, the components of interest expense, related fees, and cash paid for interest expense for debt were as follows:
(in thousands) Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023
Description
Interest expense(1)
Amortization of debt issuance cost (loan fees) Unused facility and other fees (loan fees) Total interest expense and fees Cash paid for interest expense
Interest expense(1)
Amortization of debt issuance cost (loan fees) Unused facility and other fees (loan fees) Total interest expense and fees Cash paid for interest expense
SBA Debentures $ 1,150  $ 146  $ —  $ 1,296  $ 2,300  $ 3,412  $ 436  $ —  $ 3,848  $ 4,562 
July 2024 Notes 1,252  74  —  1,326  2,505  3,756  222  —  3,978  5,009 
February 2025 Notes 535  29  —  564  1,070  1,605  86  —  1,691  2,140 
June 2025 Notes 754  40  —  794  —  2,263  121  —  2,384  1,509 
June 2025 3-Year Notes 750  39  —  789  —  2,250  117  —  2,367  1,500 
March 2026 A Notes 563  24  —  587  1,125  1,688  71  —  1,759  2,250 
March 2026 B Notes 569  26  —  595  1,138  1,706  78  —  1,784  2,275 
September 2026 Notes 2,174  203  —  2,377  4,266  6,523  611  —  7,134  8,532 
January 2027 Notes 3,079  207  —  3,286  5,906  9,236  621  —  9,857  11,812 
2031 Asset-Backed Notes 1,902  101  —  2,003  1,857  5,709  301  —  6,010  5,570 
2033 Notes 625  27  —  652  625  1,875  81  —  1,956  1,875 
MUFG Bank Facility 1,247  443  709  2,399  1,240  4,323  1,327  2,017  7,667  4,673 
SMBC Facility 1,828  180  276  2,284  1,715  5,891  513  715  7,119  5,703 
Total $ 16,428  $ 1,539  $ 985  $ 18,952  $ 23,747  $ 50,237  $ 4,585  $ 2,732  $ 57,554  $ 57,410 

(1)Interest expense includes amortization of original issue discounts for the three months ended September 30, 2023 of $42 thousand, $126 thousand, and $47 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively. Interest expense includes amortization of original issue discounts for the nine months ended September 30, 2023, of $125 thousand, $377 thousand, and $141 thousand, related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
Summary of SBIC Investments
The following table shows the fair value of the Company’s portfolio of investments by asset class as of September 30, 2024 and December 31, 2023:
(in thousands) September 30, 2024 December 31, 2023
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
Senior Secured Debt $ 3,306,724  92.9  % $ 2,987,577  92.0  %
Unsecured Debt 73,854  2.1  % 69,722  2.2  %
Preferred Stock 47,342  1.3  % 53,038  1.6  %
Common Stock 95,693  2.7  % 99,132  3.1  %
Warrants 30,023  0.8  % 33,969  1.0  %
Investment Funds & Vehicles 6,877  0.2  % 4,608  0.1  %
Total $ 3,560,513  100.0  % $ 3,248,046  100.0  %
A summary of the Company’s investment portfolio, at value, by geographic location as of September 30, 2024 and December 31, 2023 is shown as follows:
(in thousands) September 30, 2024 December 31, 2023
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
United States $ 3,219,874  90.4  % $ 2,861,615  88.1  %
United Kingdom 174,566  4.9  % 222,136  6.9  %
Israel 77,767  2.2  % 52,868  1.6  %
Netherlands 59,562  1.7  % 89,995  2.8  %
Canada 16,441  0.5  % 15,730  0.5  %
Ireland 4,513  0.1  % —  0.0  %
Denmark 4,176  0.1  % 4,173  0.1  %
Singapore 1,999  0.1  % —  0.0  %
Germany 1,219  0.0  % 1,144  0.0  %
Other 396  0.0  % 385  0.0  %
Total $ 3,560,513  100.0  % $ 3,248,046  100.0  %
The following table shows the fair value of the Company’s portfolio by industry sector as of September 30, 2024 and December 31, 2023:
(in thousands) September 30, 2024 December 31, 2023
Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Drug Discovery & Development $ 1,125,617  31.6  % $ 1,257,699  38.7  %
Software 1,018,236  28.6  % 764,985  23.6  %
Healthcare Services, Other 574,750  16.1  % 300,079  9.3  %
Consumer & Business Services 355,831  10.0  % 525,973  16.2  %
Diversified Financial Services 112,709  3.2  % 114,722  3.5  %
Electronics & Computer Hardware 96,125  2.7  % 20,324  0.6  %
Information Services 81,266  2.3  % 126,605  3.9  %
Medical Devices & Equipment 56,153  1.6  % 22,096  0.7  %
Space Technologies 46,082  1.3  % —  0.0  %
Biotechnology Tools 35,311  1.0  % 48,381  1.5  %
Sustainable and Renewable Technology 27,858  0.8  % 9,581  0.3  %
Communications & Networking 26,465  0.7  % 29,400  0.9  %
Manufacturing Technology 2,096  0.1  % 11,006  0.3  %
Consumer & Business Products 1,285  0.0  % 2,589  0.1  %
Semiconductors 655  0.0  % 1,205  0.0  %
Media/Content/Info 55  0.0  % 12,704  0.4  %
Drug Delivery 19  0.0  % 21  0.0  %
Surgical Devices —  0.0  % 676  0.0  %
Total $ 3,560,513  100.0  % $ 3,248,046  100.0  %
The following table summarizes information related to our SBICs as of September 30, 2024 and December 31, 2023.
September 30, 2024 December 31, 2023
Description HC IV SBIC V HC IV SBIC V
Number of investments held 28 1 25 — 
Fair value of investments (in millions) $ 352.4 $ 11.2 $ 331.5 $ — 
Percentage of fair value of investments based on the Company's total investment portfolio 9.9  % 0.3  % 10.2  % 0.0  %
Tangible assets (in millions) $ 369.7 $ 13.3 $ 341.8 $ — 
Percentage of tangible assets based on the Company's total assets 10.1  % 0.4  % 10.0  % 0.0  %