Annual report pursuant to Section 13 and 15(d)

Debt (Tables)

v3.25.0.1
Debt (Tables)
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Schedule of Debt Information
As of December 31, 2024 and December 31, 2023, the Company had the following available and outstanding debt:
(in thousands) December 31, 2024 December 31, 2023
Total Available Principal
Outstanding
Carrying Value(1)
Total Available Principal
Outstanding
Carrying Value(1)
SBA Debentures(2)(4)
$ 350,000  $ 279,000  $ 271,371  $ 175,000  $ 175,000  $ 170,323 
July 2024 Notes —  —  —  105,000  105,000  104,828 
February 2025 Notes 50,000  50,000  49,981  50,000  50,000  49,866 
June 2025 Notes 70,000  70,000  69,919  70,000  70,000  69,757 
June 2025 3-Year Notes 50,000  50,000  49,926  50,000  50,000  49,771 
March 2026 A Notes 50,000  50,000  49,889  50,000  50,000  49,795 
March 2026 B Notes 50,000  50,000  49,880  50,000  50,000  49,776 
September 2026 Notes 325,000  325,000  323,321  325,000  325,000  322,339 
January 2027 Notes 350,000  350,000  347,265  350,000  350,000  345,935 
2031 Asset-Backed Notes 119,475  119,475  118,769  150,000  150,000  148,544 
2033 Notes 40,000  40,000  39,043  40,000  40,000  38,935 
MUFG Bank Facility(2)
400,000  116,000  116,000  400,000  61,000  61,000 
SMBC Facility(2)(3)(5)
475,000  283,790  283,591  400,000  94,000  94,000 
Total $ 2,329,475  $ 1,783,265  $ 1,768,955  $ 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 December 31, 2024 and December 31, 2023.
(4)As of December 31, 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.
(5)In November 2024, the Company amended its SMBC Facility and converted a portion of the existing revolver facility into a term loan facility in connection therewith. As of December 31, 2024, the term loan portion of the SMBC Facility for total available, outstanding principal, and carrying value was $25.0 million, $25.0 million, and $24.8 million respectively.
The overall weighted average interest cost, cost of debt and debt outstanding for the Company for the years ended December 31, 2024 and 2023 were as follows:
Year Ended December 31,
(in thousands)
 2024 2023
Weighted average interest cost
 4.5  % 4.2  %
Weighted average cost of debt(1)
5.0  % 4.8  %
Weighted average debt outstanding
 1,709,469  1,607,278 
(1)Cost of debt includes interest and fees.
The Company held the following SBA debentures outstanding principal balances as of December 31, 2024 and December 31, 2023:
(in thousands)
Issuance/Pooling Date
 Maturity Date
Interest Rate(1)
December 31, 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 
November 8, 2024(2)
March 1, 2035 5.16% 30,000  — 
December 6, 2024(2)
March 1, 2035 5.12% 33,600  — 
December 12, 2024(2)
March 1, 2035 5.05% 8,400  — 
December 20, 2024(2)
March 1, 2035 5.01% 32,000  — 
Total SBA Debentures $ 279,000  $ 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.
(2)As of December 31, 2024, $104.0 million of drawn SBA Debentures are scheduled to be pooled on March 26, 2025. The interest rate disclosed is the current effective interim interest rate.
Schedule of Debt Issuance Costs, Net of Accumulated Amortization
Debt issuance costs, net of accumulated amortization, were as follows as of December 31, 2024 and December 31, 2023:
(in thousands) December 31, 2024 December 31, 2023
SBA Debentures $ 7,629  $ 4,677 
July 2024 Notes —  172 
February 2025 Notes 19  134 
June 2025 Notes 81  243 
June 2025 3-Year Notes 74  229 
March 2026 A Notes 111  205 
March 2026 B Notes 120  224 
September 2026 Notes 1,679  2,661 
January 2027 Notes 2,735  4,065 
2031 Asset-Backed Notes 706  1,456 
2033 Notes 957  1,065 
MUFG Bank Facility(1)
1,770  3,540 
SMBC Facility(1)(2)
2,693  1,775 
Total $ 18,574  $ 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.
(2)As part of the November 2024 amendment of the SMBC Facility, the existing revolver facility was split into a revolver facility and a term loan facility. The debt issuance costs, net of accumulated amortization of the revolver facility is $2.5 million and the term loan is $0.2 million.
Schedules of Components of Interest Expense, Related Fees, Losses on Debt Extinguishment and Cash Paid for Interest Expense for Debt
For the year ended December 31, 2024, the components of interest expense, related fees, losses on debt extinguishment and cash paid for interest expense for debt were as follows:
 (in thousands)
Year ended December 31, 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
SBA Debentures $ 4,993  $ 621  $ —  $ 5,614  $ 4,575 
July 2024 Notes 2,706  172  —  2,878  5,008 
February 2025 Notes 2,140  115  —  2,255  2,140 
June 2025 Notes 3,017  162  —  3,179  3,016 
June 2025 3-Year Notes 3,000  155  —  3,155  3,000 
March 2026 A Notes 2,250  95  —  2,345  2,250 
March 2026 B Notes 2,275  103  —  2,378  2,276 
September 2026 Notes 8,697  815  —  9,512  8,531 
January 2027 Notes 12,316  828  —  13,144  11,812 
2031 Asset-Backed Notes(2)
7,464  394  —  7,858  7,321 
2033 Notes 2,500  108  —  2,608  2,500 
MUFG Bank Facility 11,931  1,770  1,949  15,650  11,866 
SMBC Facility 13,862  735  785  15,382  13,555 
Total $ 77,151  $ 6,073  $ 2,734  $ 85,958  $ 77,850 
(1)Interest expense includes amortization of original issue discounts for the year ended December 31, 2024, of $166 thousand, $503 thousand, and $185 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
(2)During the year ended December 31, 2024, we have recognized $171 thousand of loss on debt extinguishment for 2031 Asset-Backed Notes.
For the year ended December 31, 2023, the components of interest expense, related fees, and cash paid for interest expense for debt were as follows:
 (in thousands)
Year ended December 31, 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
SBA Debentures $ 4,562  $ 585  $ —  $ 5,147  $ 4,562 
July 2024 Notes 5,009  295  —  5,304  5,009 
February 2025 Notes 2,140  115  —  2,255  2,140 
June 2025 Notes 3,017  162  —  3,179  3,017 
June 2025 3-Year Notes 3,000  155  —  3,155  3,000 
March 2026 A Notes 2,250  95  —  2,345  2,250 
March 2026 B Notes 2,275  103  —  2,378  2,276 
September 2026 Notes 8,697  815  —  9,512  8,532 
January 2027 Notes 12,316  828  —  13,144  11,812 
2031 Asset-Backed Notes 7,613  399  —  8,012  7,425 
2033 Notes 2,500  108  —  2,608  2,500 
MUFG Bank Facility(2)
5,583  1,770  2,782  10,135  5,948 
SMBC Facility 8,658  693  940  10,291  8,678 
Total $ 67,620  $ 6,123  $ 3,722  $ 77,465  $ 67,149 
(1)Interest expense includes amortization of original issue discounts for the year ended December 31, 2023, of $166 thousand, $503 thousand, $188 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
(2)The June 2022 amendment of the MUFG Bank Facility replaced Union Bank Facility via an amendment as the lead lender.
For the year ended December 31, 2022, the components of interest expense, related fees, and cash paid for interest expense for debt were as follows:
 (in thousands)
Year ended December 31, 2022
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
SBA Debentures $ 3,997  $ 581  $ —  $ 4,578  $ 2,835 
2022 Notes(3)
1,011  50  —  1,061  2,293 
July 2024 Notes 5,009  295  —  5,304  5,009 
February 2025 Notes 2,140  115  —  2,255  2,140 
June 2025 Notes 3,017  162  —  3,179  3,017 
June 2025 3-Year Notes 1,567  81  —  1,648  1,500 
March 2026 A Notes 2,250  95  —  2,345  2,250 
March 2026 B Notes 2,275  103  —  2,378  2,275 
September 2026 Notes 8,698  815  —  9,513  8,531 
January 2027 Notes 11,630  782  —  12,412  5,906 
2031 Asset-Backed Notes 3,975  209  —  4,184  3,671 
2033 Notes 2,500  108  —  2,608  2,500 
2022 Convertible Notes(3)
923  148  —  1,071  5,004 
MUFG Bank Facility(2)
4,548  941  2,285  7,774  4,097 
SMBC Facility 1,209  315  513  2,037  1,047 
Total $ 54,749  $ 4,800  $ 2,798  $ 62,347  $ 52,075 
(1)Interest expense includes amortization of original issue discounts for the year ended December 31, 2022, of $23 thousand, $112 thousand, $166 thousand, $475 thousand, and $98 thousand for the 2022 Notes, 2022 Convertible Notes, September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
(2)The June 2022 amendment of the MUFG Bank Facility replaced Union Bank Facility via an amendment as the lead lender.
(3)The Company fully redeemed the 2022 Notes on February 22, 2022 and fully repaid the 2022 Convertible Notes on February 1, 2022.
Summary of SBIC Investments
The following table shows the fair value of the Company’s portfolio of investments by asset class as of December 31, 2024 and December 31, 2023:
(in thousands) December 31, 2024 December 31, 2023
Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Senior Secured Debt $ 3,419,044  93.4  % $ 2,987,577  92.0  %
Unsecured Debt 75,557  2.1  % 69,722  2.2  %
Preferred Stock 53,802  1.5  % 53,038  1.6  %
Common Stock 74,855  2.0  % 99,132  3.1  %
Warrants 30,500  0.8  % 33,969  1.0  %
Investment Funds & Vehicles 6,220  0.2  % 4,608  0.1  %
Total $ 3,659,978  100.0  % $ 3,248,046  100.0  %
A summary of the Company’s investment portfolio, at value, by geographic location as of December 31, 2024 and December 31, 2023 is shown as follows:
(in thousands) December 31, 2024 December 31, 2023
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
United States $ 3,288,737  89.9  % $ 2,861,615  88.1  %
United Kingdom 142,183  3.9  % 222,136  6.9  %
Israel 88,066  2.4  % 52,868  1.6  %
Netherlands 59,157  1.6  % 89,995  2.8  %
Germany 49,255  1.3  % 1,144  0.0  %
Canada 16,251  0.4  % 15,730  0.5  %
Denmark 9,284  0.3  % 4,173  0.1  %
Ireland 4,649  0.1  % —  0.0  %
Singapore 1,996  0.1  % —  0.0  %
Other 400  0.0  % 385  0.0  %
Total $ 3,659,978  100.0  % $ 3,248,046  100.0  %
The following table shows the fair value of the Company’s portfolio by industry sector as of December 31, 2024 and December 31, 2023:
(in thousands) December 31, 2024 December 31, 2023
  Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Software $ 1,081,100  29.5  % $ 764,985  23.6  %
Drug Discovery & Development 1,080,390  29.5  % 1,257,699  38.7  %
Healthcare Services, Other 610,184  16.7  % 300,079  9.3  %
Consumer & Business Services 372,641  10.2  % 525,973  16.2  %
Electronics & Computer Hardware 162,888  4.5  % 20,324  0.6  %
Diversified Financial Services 113,491  3.1  % 114,722  3.5  %
Medical Devices & Equipment 74,962  2.0  % 22,096  0.7  %
Space Technologies 45,700  1.2  % —  0.0  %
Biotechnology Tools 35,434  1.0  % 48,381  1.5  %
Communications & Networking 27,700  0.8  % 29,400  0.9  %
Sustainable and Renewable Technology 27,696  0.8  % 9,581  0.3  %
Information Services 24,356  0.7  % 126,605  3.9  %
Consumer & Business Products 1,497  0.0  % 2,589  0.1  %
Manufacturing Technology 1,162  0.0  % 11,006  0.3  %
Semiconductors 704  0.0  % 1,205  0.0  %
Media/Content/Info 63  0.0  % 12,704  0.4  %
Drug Delivery 10  0.0  % 21  0.0  %
Surgical Devices —  0.0  % 676  0.0  %
Total $ 3,659,978  100.0  % $ 3,248,046  100.0  %
The following table summarizes information related to our SBICs as of December 31, 2024 and December 31, 2023.
December 31, 2024 December 31, 2023
Description HC IV SBIC V HC IV SBIC V
Number of investments held 33 11 25 — 
Fair value of investments (in millions) $ 377.7 $ 155.6 $ 331.5 $ — 
Percentage of fair value of investments based on the Company's total investment portfolio 10.3  % 4.3  % 10.2  % 0.0  %
Tangible assets (in millions) $ 382.9 $ 157.8 $ 341.8 $ — 
Percentage of tangible assets based on the Company's total assets 10.0  % 4.1  % 10.0  % 0.0  %