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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/10/23 TCW Direct Lending VII LLC 10-Q 3/31/23 65:20M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 6.21M
2: EX-10 Ex-10.10 HTML 3.50M
3: EX-31 Ex-31.1 HTML 27K
4: EX-31 Ex-31.2 HTML 27K
5: EX-32 Ex-32.1 HTML 22K
6: EX-32 Ex-32.2 HTML 22K
12: R1 Document and Entity Information HTML 67K
13: R2 Consolidated Schedule of Investments HTML 1.35M
14: R3 Consolidated Schedule of Investments HTML 50K
(Parenthetical)
15: R4 Consolidated Schedule of Investments - Controlled HTML 766K
Affiliated Investments And Non-Controlled
Affiliated Investments
16: R5 Consolidated Statements of Assets and Liabilities HTML 106K
(Unaudited)
17: R6 Consolidated Statements of Assets and Liabilities HTML 37K
(Unaudited)(Parenthetical)
18: R7 Consolidated Statements of Operations (Unaudited) HTML 87K
19: R8 Consolidated Statements of Changes in Members' HTML 39K
Capital (Unaudited)
20: R9 Consolidated Statements of Cash Flows (Unaudited) HTML 91K
21: R10 N-2 HTML 45K
22: R11 Organization and Basis of Presentation HTML 56K
23: R12 Significant Accounting Policies HTML 45K
24: R13 Investment Valuations and Fair Value Measurements HTML 396K
25: R14 Agreements and Related Party Transactions HTML 67K
26: R15 Commitments and Contingencies HTML 148K
27: R16 Members' Capital HTML 38K
28: R17 Credit Facilities HTML 138K
29: R18 Repurchase Obligation HTML 27K
30: R19 Income Taxes HTML 51K
31: R20 Financial Highlights HTML 113K
32: R21 Subsequent Events HTML 23K
33: R22 Significant Accounting Policies (Policies) HTML 68K
34: R23 Organization and Basis of Presentation (Tables) HTML 36K
35: R24 Investment Valuations and Fair Value Measurements HTML 383K
(Tables)
36: R25 Commitments and Contingencies (Tables) HTML 144K
37: R26 Members' Capital (Tables) HTML 36K
38: R27 Credit Facilities (Tables) HTML 94K
39: R28 Income Taxes (Tables) HTML 43K
40: R29 Financial Highlights (Tables) HTML 113K
41: R30 Organization and Basis of Presentation - HTML 47K
Additional Information (Details)
42: R31 Organization and Basis of Presentation - Schedule HTML 33K
of Aggregate Commitments, Undrawn Commitments,
Percentage of Commitments Funded and Number of
Subscribed for Units (Details)
43: R32 Significant Accounting Policies - Additional HTML 31K
Information (Details)
44: R33 Investment Valuations and Fair Value Measurements HTML 45K
- Summary by Major Security Type of Fair
Valuations According to Inputs Used in Valuing
Investments (Details)
45: R34 Investment Valuations and Fair Value Measurements HTML 50K
- Reconciliation of Beginning and Ending Balances
for Total Investments (Details)
46: R35 Investment Valuations and Fair Value Measurements HTML 22K
- Additional Information (Details)
47: R36 Investment Valuations and Fair Value Measurements HTML 87K
- Summary of Valuation Techniques and Quantitative
Information in Determining Fair value of Level 3
Investments (Details)
48: R37 Agreements and Related Party Transactions - HTML 57K
Additional Information (Details)
49: R38 Commitments and Contingencies - Schedule of HTML 61K
Unfunded Commitments and Unrealized Depreciation
by Investment (Details)
50: R39 Members' Capital - Summary of Company Unit HTML 23K
Activity (Details)
51: R40 Members' Capital - Additional Information HTML 23K
(Details)
52: R41 Credit Facilities - Additional Information HTML 117K
(Details)
53: R42 Credit Facilities - Summary of Amounts Outstanding HTML 32K
and Available under Credit Facilities (Details)
54: R43 Credit Facilities - Reconciliation of Term Loan HTML 31K
Amounts Presented on Consolidated Statements of
Assets and Liabilities versus Outstanding
(Details)
55: R44 Credit Facilities - Summary Information Regarding HTML 37K
Credit Facilities (Details)
56: R45 Repurchase Obligation - Additional Information HTML 23K
(Details)
57: R46 Income Taxes - Additional Information (Details) HTML 29K
58: R47 Income Taxes - Schedule Of Aggregate Investment HTML 28K
Unrealized Appreciation And Depreciation For
Federal Income Tax Purposes (Details)
59: R48 Financial Highlights - Schedule of Net Asset Value HTML 61K
Per Unit and Reflects all Units Issued and
Outstanding (Details)
60: R49 Financial Highlights - Schedule of Net Asset Value HTML 24K
Per Unit and Reflects all Units Issued and
Outstanding (Parenthetical) (Details)
63: XML IDEA XML File -- Filing Summary XML 119K
61: XML XBRL Instance -- ck0001715933-20230331_htm XML 5.40M
62: EXCEL IDEA Workbook of Financial Reports XLSX 183K
9: EX-101.CAL XBRL Calculations -- ck0001715933-20230331_cal XML 131K
7: EX-101.DEF XBRL Definitions -- ck0001715933-20230331_def XML 640K
8: EX-101.LAB XBRL Labels -- ck0001715933-20230331_lab XML 1.22M
11: EX-101.PRE XBRL Presentations -- ck0001715933-20230331_pre XML 849K
10: EX-101.SCH XBRL Schema -- ck0001715933-20230331 XSD 228K
64: JSON XBRL Instance as JSON Data -- MetaLinks 433± 649K
65: ZIP XBRL Zipped Folder -- 0000950170-23-020312-xbrl Zip 850K
| 10-Q |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM i 10-Q
(Mark One)
i ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended i March 31, i 2023 /
OR
i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number i 814-01246
i TCW DIRECT LENDING VII LLC
(Exact Name of Registrant as Specified in Its Charter)
|
|
i Delaware |
i 82-2252672 |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
|
|
i 02116 |
|
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s Telephone Number, Including Area Code: ( i 617) i 936-2275
Not applicable
Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report.
Securities registered pursuant to Section 12(b) of the Act.
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
|
None |
Not applicable |
Not applicable |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
|
|
|
|
Large accelerated filer |
☐ |
|
Accelerated filer |
☐ |
|
|
|
|
|
i Non-Accelerated filer |
☒ |
|
Smaller reporting company |
i ☐ |
|
|
|
|
|
Emerging growth company |
i ☐ |
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No i ☒
As of March 31, 2023, there was no established public market for the Registrant’s common units. The number of the Registrant’s common units outstanding at May 10, 2023 was i 13,734,010.
Auditor Firm Id: 34 Auditor Name: Deloitte & Touche LLP Auditor Location: Los Angeles, CA, U.S.A.
TCW DIRECT LENDING VII LLC
FORM 10-Q FOR THE QUARTER ENDED March 31, 2023
|
INDEX
|
PAGE
|
PART I. |
FINANCIAL INFORMATION |
|
Item 1. |
Financial Statements |
|
|
Consolidated Schedule of Investments as of March 31, 2023 (unaudited) and December 31, 2022 |
3 |
|
17 |
|
|
Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 (unaudited) |
18 |
|
19 |
|
|
Consolidated Statement of Cash Flows for the three months ended March 31, 2023 and 2022 (unaudited) |
20 |
|
21 |
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
40 |
Item 3. |
53 |
|
Item 4. |
53 |
|
PART II. |
|
|
Item 1. |
54 |
|
Item 1A. |
54 |
|
Item 2. |
54 |
|
Item 3. |
54 |
|
Item 4. |
54 |
|
Item 5. |
54 |
|
Item 6. |
55 |
|
57 |
||
TCW Direct Lending VII LLC
Consolidated Schedule of Investments (Unaudited)
As of March 31, 2023
Industry |
|
Issuer |
|
Acquisition |
|
Investment |
|
% of Net |
|
|
Par |
|
|
Maturity |
|
Amortized |
|
|
Fair Value |
|
||||
|
|
DEBT(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Columbia Helicopters Inc. |
|
i 08/20/19 |
|
Last Out Term Loan - i 15.54% inc PIK |
|
|
i 2.7 |
% |
|
$ |
i 21,727,133 |
|
|
i 08/20/24 |
|
$ |
i 21,608,472 |
|
|
$ |
i 20,010,689 |
|
|
|
Heligear Acquisition Co. |
|
i 07/30/19 |
|
Term Loan - i 12.65% |
|
|
i 6.7 |
% |
|
|
i 49,966,411 |
|
|
i 07/30/24 |
|
|
i 49,694,933 |
|
|
|
i 49,966,411 |
|
|
|
Karman Holdings LLC |
|
i 12/21/20 |
|
Revolver - i 12.17% |
|
|
i 0.7 |
% |
|
|
i 5,571,634 |
|
|
i 12/21/25 |
|
|
i 5,571,634 |
|
|
|
i 5,415,628 |
|
|
|
Karman Holdings LLC |
|
i 12/21/20 |
|
Term Loan - i 11.85% |
|
|
i 7.9 |
% |
|
|
i 60,672,420 |
|
|
i 12/21/25 |
|
|
i 59,939,057 |
|
|
|
i 58,973,592 |
|
|
|
Navistar Defense, LLC (2) (5) |
|
i 08/01/22 |
|
Term Loan - i 13.61% inc PIK |
|
|
i 4.6 |
% |
|
|
i 36,713,538 |
|
|
i 02/01/26 |
|
|
i 33,109,294 |
|
|
|
i 34,841,147 |
|
|
|
|
|
|
|
|
|
|
i 22.6 |
% |
|
|
i 174,651,136 |
|
|
|
|
|
i 169,923,390 |
|
|
|
i 169,207,467 |
|
Auto Components |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Shipston Group U.S. Inc. |
|
i 05/18/20 |
|
Last Out Term Loan - i 13.32% inc PIK |
|
|
i 0.2 |
% |
|
|
i 1,897,971 |
|
|
i 09/28/24 |
|
|
i 1,897,971 |
|
|
|
i 1,425,376 |
|
|
|
Shipston Group U.S. Inc. |
|
i 09/28/18 |
|
Last Out Term Loan - i 13.26% inc PIK |
|
|
i 2.9 |
% |
|
|
i 28,564,267 |
|
|
i 09/28/24 |
|
|
i 28,523,453 |
|
|
|
i 21,451,764 |
|
|
|
Shipston Group U.S. Inc. |
|
i 01/20/22 |
|
Last Out Delayed Draw Term Loan - i 13.32% inc PIK |
|
|
i 0.2 |
% |
|
|
i 1,649,838 |
|
|
i 09/28/24 |
|
|
i 1,649,838 |
|
|
|
i 1,239,029 |
|
|
|
|
|
|
|
|
|
|
i 3.3 |
% |
|
|
i 32,112,076 |
|
|
|
|
|
i 32,071,262 |
|
|
|
i 24,116,169 |
|
Capital Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Carolina Atlantic Roofing Suppy LLC |
|
i 05/28/21 |
|
Term Loan - i 12.91% |
|
|
i 4.7 |
% |
|
|
i 35,564,473 |
|
|
i 05/28/26 |
|
|
i 35,115,458 |
|
|
|
i 34,888,748 |
|
|
|
|
|
|
|
|
|
|
i 4.7 |
% |
|
|
i 35,564,473 |
|
|
|
|
|
i 35,115,458 |
|
|
|
i 34,888,748 |
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
AGY Holdings Corp. (2) |
|
i 09/21/20 |
|
Delayed Draw Term Loan - i 15.16% inc PIK |
|
|
i 3.3 |
% |
|
|
i 26,735,681 |
|
|
i 09/21/25 |
|
|
i 26,735,681 |
|
|
|
i 25,051,333 |
|
|
|
AGY Holdings Corp. (2) |
|
i 09/21/20 |
|
Term Loan - i 14.83% inc PIK |
|
|
i 3.6 |
% |
|
|
i 29,093,555 |
|
|
i 09/21/25 |
|
|
i 29,093,555 |
|
|
|
i 27,260,661 |
|
|
|
AGY Holdings Corp. (2) |
|
i 05/27/22 |
|
Delayed Draw Term Loan - i 15.16% inc PIK |
|
|
i 0.4 |
% |
|
|
i 3,466,380 |
|
|
i 09/21/25 |
|
|
i 3,466,380 |
|
|
|
i 3,247,998 |
|
|
|
|
|
|
|
|
|
|
i 7.3 |
% |
|
|
i 59,295,616 |
|
|
|
|
|
i 59,295,616 |
|
|
|
i 55,559,992 |
|
3
TCW Direct Lending VII LLC
Consolidated Schedule of Investments (Unaudited) (Continued)
As of March 31, 2023
Industry |
|
Issuer |
|
Acquisition |
|
Investment |
|
% of Net |
|
|
Par |
|
|
Maturity |
|
Amortized |
|
|
Fair Value |
|
||||
|
|
DEBT (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial & Professional Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Rapid Displays, Inc. |
|
i 04/16/21 |
|
Term Loan - i 11.46% |
|
|
i 1.8 |
% |
|
$ |
i 13,912,200 |
|
|
i 04/13/26 |
|
$ |
i 13,805,183 |
|
|
$ |
i 13,411,361 |
|
|
|
Rapid Displays, Inc. |
|
i 09/29/22 |
|
Incremental Term Loan - i 11.76% |
|
|
i 0.0 |
% |
|
|
i 246,245 |
|
|
i 04/13/26 |
|
|
i 241,493 |
|
|
|
i 240,581 |
|
|
|
|
|
|
|
|
|
|
i 1.8 |
% |
|
|
i 14,158,445 |
|
|
|
|
|
i 14,046,676 |
|
|
|
i 13,651,942 |
|
Commercial Services & Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Retail Services WIS Corporation |
|
i 05/20/21 |
|
Term Loan - i 12.91% |
|
|
i 6.1 |
% |
|
|
i 45,409,275 |
|
|
i 05/20/25 |
|
|
i 44,830,394 |
|
|
|
i 45,590,913 |
|
|
|
|
|
|
|
|
|
|
i 6.1 |
% |
|
|
i 45,409,275 |
|
|
|
|
|
i 44,830,394 |
|
|
|
i 45,590,913 |
|
Consumer Durables & Apparel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Rocky Brands, Inc. (3) |
|
i 03/15/21 |
|
Term Loan - i 12.14% |
|
|
i 4.6 |
% |
|
|
i 36,717,801 |
|
|
i 03/15/26 |
|
|
i 36,283,863 |
|
|
|
i 34,698,322 |
|
|
|
Twin Star International, Inc. |
|
i 06/18/21 |
|
Term Loan - i 12.55% inc PIK |
|
|
i 4.4 |
% |
|
|
i 43,113,731 |
|
|
i 06/18/26 |
|
|
i 42,796,387 |
|
|
|
i 32,766,436 |
|
|
|
Twin Star International, Inc. |
|
i 02/15/23 |
|
Delayed Draw Term Loan - i 12.55% inc PIK |
|
|
i 0.1 |
% |
|
|
i 854,901 |
|
|
i 06/18/26 |
|
|
i 854,901 |
|
|
|
i 854,901 |
|
|
|
|
|
|
|
|
|
|
i 9.1 |
% |
|
|
i 80,686,433 |
|
|
|
|
|
i 79,935,151 |
|
|
|
i 68,319,659 |
|
Consumer Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Grand Circle Corporation |
|
i 02/26/21 |
|
Term Loan - i 17.16% |
|
|
i 5.1 |
% |
|
|
i 39,300,492 |
|
|
i 02/26/26 |
|
|
i 38,845,623 |
|
|
|
i 38,121,477 |
|
|
|
|
|
|
|
|
|
|
i 5.1 |
% |
|
|
i 39,300,492 |
|
|
|
|
|
i 38,845,623 |
|
|
|
i 38,121,477 |
|
Energy Equipment & Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Profrac Services II, LLC |
|
i 03/04/22 |
|
Term Loan - i 12.10% |
|
|
i 4.4 |
% |
|
|
i 32,204,459 |
|
|
i 03/04/25 |
|
|
i 31,584,758 |
|
|
|
i 32,848,548 |
|
|
|
WDE TorcSill Holdings LLC |
|
i 10/22/19 |
|
Revolver - i 14.42% inc PIK |
|
|
i 1.2 |
% |
|
|
i 9,747,888 |
|
|
i 10/22/24 |
|
|
i 9,747,888 |
|
|
|
i 9,289,737 |
|
|
|
WDE TorcSill Holdings LLC |
|
i 10/22/19 |
|
Term Loan - i 14.42% inc PIK |
|
|
i 3.0 |
% |
|
|
i 23,391,553 |
|
|
i 10/22/24 |
|
|
i 23,220,880 |
|
|
|
i 22,292,150 |
|
|
|
|
|
|
|
|
|
|
i 8.6 |
% |
|
|
i 65,343,900 |
|
|
|
|
|
i 64,553,526 |
|
|
|
i 64,430,435 |
|
Food Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Hometown Food Company |
|
i 08/31/18 |
|
Term Loan - i 9.85% |
|
|
i 2.4 |
% |
|
|
i 18,292,637 |
|
|
i 08/31/23 |
|
|
i 18,258,069 |
|
|
|
i 18,292,637 |
|
|
|
|
|
|
|
|
|
|
i 2.4 |
% |
|
|
i 18,292,637 |
|
|
|
|
|
i 18,258,069 |
|
|
|
i 18,292,637 |
|
Health Care Technology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
PatientPoint Health Technologies, LLC |
|
i 03/30/21 |
|
Term Loan - i 12.16% |
|
|
i 2.2 |
% |
|
$ |
i 16,401,000 |
|
|
i 03/07/25 |
|
|
i 16,193,740 |
|
|
|
i 16,236,990 |
|
|
|
|
|
|
|
|
|
|
i 2.2 |
% |
|
|
i 16,401,000 |
|
|
|
|
|
i 16,193,740 |
|
|
|
i 16,236,990 |
|
4
TCW Direct Lending VII LLC
Consolidated Schedule of Investments (Unaudited) (Continued)
As of March 31, 2023
Industry |
|
Issuer |
|
Acquisition |
|
Investment |
|
% of Net |
|
|
Par |
|
|
Maturity |
|
Amortized |
|
|
Fair Value |
|
||||
|
|
DEBT (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotels, Restaurants & Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
KBP Brands, LLC |
|
i 05/26/21 |
|
Delayed Draw Term Loan - i 11.62% inc PIK |
|
|
i 1.7 |
% |
|
|
i 14,061,587 |
|
|
i 05/26/27 |
|
|
i 14,061,587 |
|
|
|
i 12,922,598 |
|
|
|
KBP Brands, LLC |
|
i 05/26/21 |
|
Term Loan - i 11.62% inc PIK |
|
|
i 1.2 |
% |
|
|
i 9,940,863 |
|
|
i 05/26/27 |
|
|
i 9,718,307 |
|
|
|
i 9,135,653 |
|
|
|
Red Lobster Management, LLC |
|
i 01/22/21 |
|
Term Loan - i 12.92% |
|
|
i 6.6 |
% |
|
|
i 54,296,577 |
|
|
i 01/22/26 |
|
|
i 53,686,044 |
|
|
|
i 49,409,885 |
|
|
|
|
|
|
|
|
|
|
i 9.5 |
% |
|
|
i 78,299,027 |
|
|
|
|
|
i 77,465,938 |
|
|
|
i 71,468,136 |
|
Household Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Slogic Holding Corp. (4) |
|
i 06/29/18 |
|
Last Out Term Loan - i 10.84% |
|
|
i 3.6 |
% |
|
|
i 26,681,925 |
|
|
i 10/29/26 |
|
|
i 26,668,876 |
|
|
|
i 26,681,925 |
|
|
|
|
|
|
|
|
|
|
i 3.6 |
% |
|
|
i 26,681,925 |
|
|
|
|
|
i 26,668,876 |
|
|
|
i 26,681,925 |
|
Household Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Greenfield World Trade, Inc. |
|
i 03/04/19 |
|
Last Out Term Loan - i 18.25% inc PIK |
|
|
i 7.6 |
% |
|
|
i 57,177,588 |
|
|
i 03/31/25 |
|
|
i 55,482,021 |
|
|
|
i 56,777,344 |
|
|
|
Greenfield World Trade, Inc. |
|
i 08/12/21 |
|
Last Out Delayed Draw Term Loan - i 18.19% inc PIK |
|
|
i 1.6 |
% |
|
|
i 12,158,545 |
|
|
i 03/31/25 |
|
|
i 11,235,050 |
|
|
|
i 12,073,435 |
|
|
|
|
|
|
|
|
|
|
i 9.2 |
% |
|
|
i 69,336,133 |
|
|
|
|
|
i 66,717,071 |
|
|
|
i 68,850,779 |
|
Information Technology Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Corcentric, Inc. |
|
i 11/15/18 |
|
Delayed Draw Term Loan - i 11.46% |
|
|
i 1.6 |
% |
|
|
i 12,070,680 |
|
|
i 11/15/23 |
|
|
i 12,070,680 |
|
|
|
i 12,070,680 |
|
|
|
Corcentric, Inc. |
|
i 11/15/18 |
|
Term Loan - i 11.46% |
|
|
i 4.1 |
% |
|
|
i 30,704,380 |
|
|
i 11/15/23 |
|
|
i 30,607,117 |
|
|
|
i 30,704,380 |
|
|
|
|
|
|
|
|
|
|
i 5.7 |
% |
|
|
i 42,775,060 |
|
|
|
|
|
i 42,677,797 |
|
|
|
i 42,775,060 |
|
Internet & Direct Marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Altern Marketing LLC |
|
i 09/30/20 |
|
First Out Term Loan - i 11.00% |
|
|
i 1.1 |
% |
|
|
i 8,171,309 |
|
|
i 10/07/24 |
|
|
i 8,104,503 |
|
|
|
i 8,122,281 |
|
|
|
Altern Marketing LLC |
|
i 09/30/20 |
|
Revolver - i 13.00% |
|
|
i 0.3 |
% |
|
|
i 1,989,530 |
|
|
i 10/07/24 |
|
|
i 1,989,530 |
|
|
|
i 1,977,593 |
|
|
|
|
|
|
|
|
|
|
i 1.4 |
% |
|
|
i 10,160,839 |
|
|
|
|
|
i 10,094,033 |
|
|
|
i 10,099,874 |
|
5
TCW Direct Lending VII LLC
Consolidated Schedule of Investments (Unaudited) (Continued)
As of March 31, 2023
Industry |
|
Issuer |
|
Acquisition |
|
Investment |
|
% of Net |
|
|
Par |
|
|
Maturity |
|
Amortized |
|
|
Fair Value |
|
||||
|
|
DEBT (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Media |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Encompass Digital Media, Inc. |
|
i 10/01/18 |
|
Revolver - i 12.35% inc PIK |
|
|
i 0.2 |
% |
|
$ |
i 1,840,441 |
|
|
i 09/28/23 |
|
$ |
i 1,840,441 |
|
|
$ |
i 1,599,344 |
|
|
|
Encompass Digital Media, Inc. |
|
i 10/01/18 |
|
Term Loan - i 12.35% inc PIK |
|
|
i 3.7 |
% |
|
|
i 31,703,796 |
|
|
i 09/28/23 |
|
|
i 31,665,556 |
|
|
|
i 27,550,599 |
|
|
|
|
|
|
|
|
|
|
i 3.9 |
% |
|
|
i 33,544,237 |
|
|
|
|
|
i 33,505,997 |
|
|
|
i 29,149,943 |
|
Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Bendon Inc. |
|
i 12/11/20 |
|
Term Loan - i 12.55% |
|
|
i 6.1 |
% |
|
|
i 47,811,249 |
|
|
i 12/11/25 |
|
|
i 47,225,214 |
|
|
|
i 45,468,498 |
|
|
|
|
|
|
|
|
|
|
i 6.1 |
% |
|
|
i 47,811,249 |
|
|
|
|
|
i 47,225,214 |
|
|
|
i 45,468,498 |
|
Software |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Mondee Holdings LLC |
|
i 12/20/19 |
|
Term Loan - i 13.66% inc PIK |
|
|
i 9.1 |
% |
|
|
i 67,515,502 |
|
|
i 12/23/24 |
|
|
i 66,847,438 |
|
|
|
i 68,055,626 |
|
|
|
|
|
|
|
|
|
|
i 9.1 |
% |
|
|
i 67,515,502 |
|
|
|
|
|
i 66,847,438 |
|
|
|
i 68,055,626 |
|
Textiles, Apparel & Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Centric Brands Inc. (3) |
|
i 10/09/20 |
|
Term Loan - i 13.81% inc PIK |
|
|
i 5.2 |
% |
|
|
i 43,813,438 |
|
|
i 10/09/25 |
|
|
i 41,846,166 |
|
|
|
i 38,906,333 |
|
|
|
Centric Brands Inc. (3) |
|
i 10/09/20 |
|
Revolver - i 10.38% |
|
|
i 0.4 |
% |
|
|
i 3,245,604 |
|
|
i 10/09/24 |
|
|
i 3,234,928 |
|
|
|
i 3,245,604 |
|
|
|
Hollander Intermediate LLC |
|
i 09/19/22 |
|
Term Loan - i 13.67% |
|
|
i 7.2 |
% |
|
|
i 58,720,198 |
|
|
i 09/19/26 |
|
|
i 58,720,198 |
|
|
|
i 53,670,261 |
|
|
|
|
|
|
|
|
|
|
i 12.8 |
% |
|
|
i 105,779,240 |
|
|
|
|
|
i 103,801,292 |
|
|
|
i 95,822,198 |
|
|
|
Total Debt Investments |
|
|
|
|
|
|
i 134.5 |
% |
|
|
i 1,063,118,695 |
|
|
|
|
|
i 1,048,072,561 |
|
|
|
i 1,006,788,468 |
|
6
TCW Direct Lending VII LLC
Consolidated Schedule of Investments (Unaudited) (Continued)
As of March 31, 2023
Industry |
|
Issuer |
|
|
|
Investment |
|
% of Net |
|
|
Shares |
|
|
|
|
Amortized |
|
|
Fair Value |
|
||||
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
TCW ND Parent Holdings LLC. (2) (5) (6) |
|
|
|
Class A Units |
|
|
i 0.0 |
% |
|
|
i 4,399 |
|
|
|
|
|
i 43,990 |
|
|
|
i — |
|
|
|
|
|
|
|
|
|
|
i 0.0 |
% |
|
|
i 4,399 |
|
|
|
|
|
i 43,990 |
|
|
|
i — |
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
AGY Equity LLC (2) (5) (6) |
|
|
|
Class A Preferred Units |
|
|
i 0.0 |
% |
|
|
i 7,752,414 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
AGY Equity LLC (2) (5) (6) |
|
|
|
Class B Preferred Units |
|
|
i 0.0 |
% |
|
|
i 10,078,138 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
AGY Equity LLC (2) (5) (6) |
|
|
|
Class C Common Units |
|
|
i 0.0 |
% |
|
|
i 11,241,000 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
AGY Equity LLC (2) (5) (6) |
|
|
|
Class D Preferred Units |
|
|
i 0.0 |
% |
|
|
i 3,997,226 |
|
|
|
|
|
i 3,997,226 |
|
|
|
i — |
|
|
|
|
|
|
|
|
|
|
i 0.0 |
% |
|
|
i 33,068,778 |
|
|
|
|
|
i 3,997,226 |
|
|
|
i — |
|
Household Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Shelterlogic Group Holdings, Inc (4) (5) (6) |
|
|
|
Common Stock |
|
|
i 2.8 |
% |
|
|
i 1,254,034 |
|
|
|
|
|
i — |
|
|
|
i 20,666,480 |
|
|
|
|
|
|
|
|
|
|
i 2.8 |
% |
|
|
i 1,254,034 |
|
|
|
|
|
i — |
|
|
|
i 20,666,480 |
|
Household Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Greenfield World Trade, Inc. (5) (6) |
|
|
|
Class A-1 Warrant, expires i 03/25/27 |
|
|
i 0.7 |
% |
|
|
i 3,959 |
|
|
|
|
|
i 3,178,520 |
|
|
|
i 5,465,989 |
|
|
|
Greenfield World Trade, Inc. (5) (6) |
|
|
|
Class A-2 Warrant, expires i 03/25/27 |
|
|
i 0.2 |
% |
|
|
i 1,376 |
|
|
|
|
|
i 1,189,508 |
|
|
|
i 1,426,870 |
|
|
|
Greenfield World Trade, Inc. (5) (6) |
|
|
|
Class A-3 Warrant, expires i 03/25/27 |
|
|
i 0.0 |
% |
|
|
i 116 |
|
|
|
|
|
i 113,932 |
|
|
|
i 119,592 |
|
|
|
|
|
|
|
|
|
|
i 0.9 |
% |
|
|
i 5,451 |
|
|
|
|
|
i 4,481,960 |
|
|
|
i 7,012,451 |
|
Software |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Mondee Holdings LLC (5) (6) |
|
|
|
Common Stock |
|
|
i 1.3 |
% |
|
|
i 916,136 |
|
|
|
|
|
i 1,226,708 |
|
|
|
i 9,967,560 |
|
|
|
|
|
|
|
|
|
|
i 1.3 |
% |
|
|
i 916,136 |
|
|
|
|
|
i 1,226,708 |
|
|
|
i 9,967,560 |
|
Textiles, Apparel & Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Centric Brands GP LLC (3) (5) (6) |
|
|
|
Membership Interests |
|
|
i 0.0 |
% |
|
|
i 159,658 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
Centric Brands L.P. (3) (5) (6) |
|
|
|
Class A LP Interests |
|
|
i 0.0 |
% |
|
|
i 159,658 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
|
|
|
|
|
|
|
i 0.0 |
% |
|
|
i 319,316 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
Total Equity Investments |
|
|
i 5.0 |
% |
|
|
i 35,568,114 |
|
|
|
|
|
i 9,749,884 |
|
|
|
i 37,646,491 |
|
||||
|
|
Total Debt & Equity Investments (7) |
|
|
i 139.5 |
% |
|
|
|
|
|
|
|
i 1,057,822,445 |
|
|
|
i 1,044,434,959 |
|
|||||
|
|
Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
First American Government Obligation Fund, Yield i 4.65% |
|
|
i 4.8 |
% |
|
|
i 35,887,338 |
|
|
|
|
|
i 35,887,338 |
|
|
|
i 35,887,338 |
|
||||
|
|
Total Cash Equivalents |
|
|
i 4.8 |
% |
|
|
|
|
|
|
|
i 35,887,338 |
|
|
|
i 35,887,338 |
|
|||||
|
|
Total Investments ( i 144.1%) |
|
|
|
|
|
|
|
|
|
$ |
i 1,093,709,783 |
|
|
$ |
i 1,080,322,297 |
|
||||||
|
|
Net unrealized depreciation on unfunded commitments (- i 0.1%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
( i 757,889 |
) |
|||||||
|
|
Liabilities in Excess of Other Assets (- i 44.0%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
( i 329,623,992 |
) |
|||||||
|
|
Net Assets ( i 100.0%) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
i 749,940,416 |
|
|||||||
7
TCW Direct Lending VII LLC
Consolidated Schedule of Investments (Unaudited) (Continued)
As of March 31, 2023
Name of Investment |
|
Fair Value at December 31, 2022 |
|
|
Gross Addition (a) |
|
|
Gross Reduction (b) |
|
|
Realized Gains |
|
|
Net Change in |
|
|
Fair Value at March 31, 2023 |
|
|
Interest/Dividend/ |
|
|||||||
AGY Holdings Corp. Delayed Draw Term Loan - i 15.16% inc PIK |
|
|
i 25,420,236 |
|
|
|
i 3,472,056 |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 592,961 |
) |
|
|
i 28,299,331 |
|
|
|
i 2,578,308 |
|
AGY Holdings Corp. Term Loan - i 14.83% inc PIK |
|
|
i 26,315,189 |
|
|
|
i 1,422,484 |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 477,012 |
) |
|
|
i 27,260,661 |
|
|
|
i 2,479,970 |
|
Navistar Defense, LLC Term Loan - i 13.61% inc PIK |
|
|
i 34,632,469 |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i 208,679 |
|
|
|
i 34,841,148 |
|
|
|
i 794 |
|
AGY Equity LLC Class A Preferred Units |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
AGY Equity LLC Class B Preferred Units |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
AGY Equity LLC Class C Common Units |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
AGY Equity LLC Class D Preferred Units |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
TCW ND Parent Holdings LLC Class A Units |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
Total Controlled Affiliated investments |
|
$ |
i 86,367,894 |
|
|
$ |
i 4,894,540 |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
( i 861,294 |
) |
|
$ |
i 90,401,140 |
|
|
$ |
i 5,059,072 |
|
Name of Investment |
|
Fair Value at December 31, 2022 |
|
|
Gross Addition (a) |
|
|
Gross Reduction (b) |
|
|
Realized Gains |
|
|
Net Change in |
|
|
Fair Value at March 31, 2023 |
|
|
Interest/Dividend/ |
|
|||||||
Slogic Holding Corp. Last Out Term Loan - i 10.84% |
|
$ |
i 26,681,925 |
|
|
$ |
i 12,165 |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
( i 12,165 |
) |
|
$ |
i 26,681,925 |
|
|
$ |
i 707,951 |
|
Shelterlogic Group Holdings, Inc Common Stock |
|
|
i 29,432,178 |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 8,765,698 |
) |
|
|
i 20,666,480 |
|
|
|
i — |
|
Total Non-Controlled Affiliated Investments |
|
$ |
i 56,114,103 |
|
|
$ |
i 12,165 |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
( i 8,777,863 |
) |
|
$ |
i 47,348,405 |
|
|
$ |
i 707,951 |
|
8
TCW Direct Lending VII LLC
Consolidated Schedule of Investments (Unaudited) (Continued)
As of March 31, 2023
LIBOR - London Interbank Offered Rate, generally 1-Month, 3-Month, or 6-Month
PRIME - Prime Rate
SOFR - Secured Overnight Financing Rate, generally 1-Month, 3-Month, or 6-Month
Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $ i 24,892,008 and $ i 67,714,921, respectively, for the period ended March 31, 2023. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments.
Country Breakdown Portfolio |
|
|
|
|
United States |
|
|
i 100.0 |
% |
See Notes to Consolidated Financial Statements
9
TCW DIRECT LENDING VII LLC
Consolidated Schedule of Investments
As of December 31, 2022
Industry |
|
Issuer |
|
Acquisition |
|
Investment |
|
% of Net |
|
|
Par |
|
|
Maturity |
|
Amortized |
|
|
Fair Value |
|
||||
|
|
DEBT(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Columbia Helicopters Inc. |
|
i 08/20/19 |
|
Last Out Term Loan - i 15.09% inc PIK |
|
|
i 2.9 |
% |
|
$ |
i 22,774,816 |
|
|
i 08/20/24 |
|
$ |
i 22,627,335 |
|
|
$ |
i 21,226,129 |
|
|
|
Heligear Acquisition Co. |
|
i 07/30/19 |
|
Term Loan - i 12.33% |
|
|
i 6.8 |
% |
|
|
i 50,701,211 |
|
|
i 07/30/24 |
|
|
i 50,374,728 |
|
|
|
i 50,549,108 |
|
|
|
Karman Holdings LLC |
|
i 12/21/20 |
|
Revolver - i 11.73% |
|
|
i 0.7 |
% |
|
|
i 5,407,762 |
|
|
i 12/21/25 |
|
|
i 5,407,762 |
|
|
|
i 5,277,976 |
|
|
|
Karman Holdings LLC |
|
i 12/21/20 |
|
Term Loan - i 11.73% |
|
|
i 8.0 |
% |
|
|
i 61,080,066 |
|
|
i 12/21/25 |
|
|
i 60,274,996 |
|
|
|
i 59,614,144 |
|
|
|
Navistar Defense, LLC (2) (5) |
|
i 08/01/22 |
|
Term Loan - i 12.73% inc PIK |
|
|
i 4.7 |
% |
|
|
i 35,556,949 |
|
|
i 02/01/26 |
|
|
i 33,109,294 |
|
|
|
i 34,632,469 |
|
|
|
|
|
|
|
|
|
|
i 23.1 |
% |
|
|
i 175,520,804 |
|
|
|
|
|
i 171,794,115 |
|
|
|
i 171,299,826 |
|
Auto Components |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Shipston Group U.S. Inc. |
|
i 05/18/20 |
|
Last Out Term Loan - i 11.27% inc PIK |
|
|
i 0.2 |
% |
|
|
i 1,855,947 |
|
|
i 09/28/24 |
|
|
i 1,855,947 |
|
|
|
i 1,546,003 |
|
|
|
Shipston Group U.S. Inc. |
|
i 09/28/18 |
|
Last Out Term Loan - i 10.25% inc PIK |
|
|
i 3.1 |
% |
|
|
i 27,907,008 |
|
|
i 09/28/24 |
|
|
i 27,845,788 |
|
|
|
i 23,246,538 |
|
|
|
Shipston Group U.S. Inc. |
|
i 01/20/22 |
|
Last Out Delayed Draw Term Loan - i 11.27% inc PIK |
|
|
i 0.2 |
% |
|
|
i 1,613,490 |
|
|
i 09/28/24 |
|
|
i 1,613,490 |
|
|
|
i 1,344,037 |
|
|
|
|
|
|
|
|
|
|
i 3.5 |
% |
|
|
i 31,376,445 |
|
|
|
|
|
i 31,315,225 |
|
|
|
i 26,136,578 |
|
Capital Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Carolina Atlantic Roofing Suppy LLC |
|
i 05/28/21 |
|
Term Loan - i 12.41% |
|
|
i 4.8 |
% |
|
|
i 35,791,961 |
|
|
i 05/28/26 |
|
|
i 35,304,801 |
|
|
|
i 35,791,961 |
|
|
|
|
|
|
|
|
|
|
i 4.8 |
% |
|
|
i 35,791,961 |
|
|
|
|
|
i 35,304,801 |
|
|
|
i 35,791,961 |
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
AGY Holdings Corp. (2) |
|
i 09/21/20 |
|
Delayed Draw Term Loan - i 14.73% inc PIK |
|
|
i 3.3 |
% |
|
|
i 25,452,322 |
|
|
i 09/21/25 |
|
|
i 25,452,322 |
|
|
|
i 24,205,159 |
|
|
|
AGY Holdings Corp. (2) |
|
i 09/21/20 |
|
Term Loan - i 14.42% inc PIK |
|
|
i 3.5 |
% |
|
|
i 27,671,071 |
|
|
i 09/21/25 |
|
|
i 27,671,071 |
|
|
|
i 26,315,189 |
|
|
|
AGY Holdings Corp. (2) |
|
i 05/27/22 |
|
Delayed Draw Term Loan - i 14.73% inc PIK |
|
|
i 0.2 |
% |
|
|
i 1,277,683 |
|
|
i 06/30/23 |
|
|
i 1,277,683 |
|
|
|
i 1,215,077 |
|
|
|
|
|
|
|
|
|
|
i 7.0 |
% |
|
|
i 54,401,076 |
|
|
|
|
|
i 54,401,076 |
|
|
|
i 51,735,425 |
|
10
TCW DIRECT LENDING VII LLC
Consolidated Schedule of Investments (Continued)
As of December 31, 2022
Industry |
|
Issuer |
|
Acquisition |
|
Investment |
|
% of Net |
|
|
Par |
|
|
Maturity |
|
Amortized |
|
|
Fair Value |
|
||||
|
|
DEBT (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial & Professional Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Rapid Displays, Inc. |
|
i 04/16/21 |
|
Term Loan - i 10.65% |
|
|
i 1.9 |
% |
|
$ |
i 13,947,600 |
|
|
i 04/13/26 |
|
$ |
i 13,831,596 |
|
|
$ |
i 13,752,334 |
|
|
|
Rapid Displays, Inc. |
|
i 09/29/22 |
|
Incremental Term Loan - i 10.65% |
|
|
i 0.0 |
% |
|
|
i 246,862 |
|
|
i 04/13/26 |
|
|
i 241,712 |
|
|
|
i 246,862 |
|
|
|
|
|
|
|
|
|
|
i 1.9 |
% |
|
|
i 14,194,462 |
|
|
|
|
|
i 14,073,308 |
|
|
|
i 13,999,196 |
|
Commercial Services & Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Retail Services WIS Corporation |
|
i 05/20/21 |
|
Term Loan - i 12.48% |
|
|
i 6.2 |
% |
|
|
i 46,013,788 |
|
|
i 05/20/25 |
|
|
i 45,359,517 |
|
|
|
i 46,059,802 |
|
|
|
|
|
|
|
|
|
|
i 6.2 |
% |
|
|
i 46,013,788 |
|
|
|
|
|
i 45,359,517 |
|
|
|
i 46,059,802 |
|
Construction & Engineering |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
UniTek Acquisition, Inc. |
|
i 09/16/20 |
|
Delayed Draw Term Loan A - i 9.76% inc PIK |
|
|
i 0.2 |
% |
|
|
i 1,297,786 |
|
|
i 08/20/23 |
|
|
i 801,063 |
|
|
|
i 1,265,341 |
|
|
|
UniTek Acquisition, Inc. |
|
i 08/20/18 |
|
Delayed Draw Term Loan B - i 10.76% inc PIK |
|
|
i 0.4 |
% |
|
|
i 3,505,562 |
|
|
i 08/20/24 |
|
|
i 3,505,562 |
|
|
|
i 3,323,273 |
|
|
|
UniTek Acquisition, Inc. |
|
i 11/10/20 |
|
Revolver - i 12.00% |
|
|
i 0.6 |
% |
|
|
i 4,683,444 |
|
|
i 08/20/23 |
|
|
i 4,683,444 |
|
|
|
i 4,566,358 |
|
|
|
UniTek Acquisition, Inc. |
|
i 09/16/20 |
|
Term Loan A - i 9.76% inc PIK |
|
|
i 0.9 |
% |
|
|
i 6,488,936 |
|
|
i 08/20/23 |
|
|
i 4,001,579 |
|
|
|
i 6,326,712 |
|
|
|
UniTek Acquisition, Inc. |
|
i 08/20/18 |
|
Term Loan B - i 10.76% inc PIK |
|
|
i 2.2 |
% |
|
|
i 17,523,014 |
|
|
i 08/20/24 |
|
|
i 17,412,095 |
|
|
|
i 16,611,817 |
|
|
|
|
|
|
|
|
|
|
i 4.3 |
% |
|
|
i 33,498,742 |
|
|
|
|
|
i 30,403,743 |
|
|
|
i 32,093,501 |
|
Consumer Durables & Apparel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Rocky Brands, Inc. (3) |
|
i 03/15/21 |
|
Term Loan - i 12.14% |
|
|
i 5.8 |
% |
|
|
i 44,584,314 |
|
|
i 03/15/26 |
|
|
i 44,013,459 |
|
|
|
i 42,845,526 |
|
|
|
Twin Star International, Inc. |
|
i 06/18/21 |
|
Term Loan - i 12.23% |
|
|
i 3.8 |
% |
|
|
i 39,489,648 |
|
|
i 06/18/26 |
|
|
i 39,147,974 |
|
|
|
i 27,840,202 |
|
|
|
|
|
|
|
|
|
|
i 9.6 |
% |
|
|
i 84,073,962 |
|
|
|
|
|
i 83,161,433 |
|
|
|
i 70,685,728 |
|
Consumer Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Grand Circle Corporation |
|
i 02/26/21 |
|
Term Loan - i 16.44% |
|
|
i 5.2 |
% |
|
|
i 39,552,766 |
|
|
i 02/26/26 |
|
|
i 39,056,182 |
|
|
|
i 38,287,077 |
|
|
|
|
|
|
|
|
|
|
i 5.2 |
% |
|
|
i 39,552,766 |
|
|
|
|
|
i 39,056,182 |
|
|
|
i 38,287,077 |
|
Energy Equipment & Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Profrac Services II, LLC |
|
i 03/04/22 |
|
Term Loan - i 11.10% |
|
|
i 4.5 |
% |
|
|
i 32,612,110 |
|
|
i 03/04/25 |
|
|
i 31,904,225 |
|
|
|
i 33,264,352 |
|
|
|
WDE TorcSill Holdings LLC |
|
i 10/22/19 |
|
Revolver - i 15.69% inc PIK |
|
|
i 1.2 |
% |
|
|
i 9,362,927 |
|
|
i 10/22/24 |
|
|
i 9,362,927 |
|
|
|
i 8,847,966 |
|
|
|
WDE TorcSill Holdings LLC |
|
i 10/22/19 |
|
Term Loan - i 15.69% inc PIK |
|
|
i 3.0 |
% |
|
|
i 23,192,584 |
|
|
i 10/22/24 |
|
|
i 22,994,963 |
|
|
|
i 21,916,992 |
|
|
|
|
|
|
|
|
|
|
i 8.7 |
% |
|
|
i 65,167,621 |
|
|
|
|
|
i 64,262,115 |
|
|
|
i 64,029,310 |
|
Food Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Hometown Food Company |
|
i 08/31/18 |
|
Term Loan - i 9.39% |
|
|
i 2.7 |
% |
|
|
i 20,218,178 |
|
|
i 08/31/23 |
|
|
i 20,157,349 |
|
|
|
i 20,218,178 |
|
|
|
Hometown Food Company |
|
i 08/31/18 |
|
Revolver - i 9.39% |
|
|
i 0.2 |
% |
|
|
i 1,176,235 |
|
|
i 08/31/23 |
|
|
i 1,176,235 |
|
|
|
i 1,176,235 |
|
|
|
|
|
|
|
|
|
|
i 2.9 |
% |
|
|
i 21,394,413 |
|
|
|
|
|
i 21,333,584 |
|
|
|
i 21,394,413 |
|
11
TCW DIRECT LENDING VII LLC
Consolidated Schedule of Investments (Continued)
As of December 31, 2022
Industry |
|
Issuer |
|
Acquisition |
|
Investment |
|
% of Net |
|
|
Par |
|
|
Maturity |
|
Amortized |
|
|
Fair Value |
|
||||
|
|
DEBT (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Health Care Technology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
PatientPoint Health Technologies, LLC |
|
i 03/30/21 |
|
Term Loan - i 11.84% |
|
|
i 2.2 |
% |
|
$ |
i 16,506,000 |
|
|
i 03/07/25 |
|
|
i 16,270,823 |
|
|
|
i 16,373,952 |
|
|
|
|
|
|
|
|
|
|
i 2.2 |
% |
|
|
i 16,506,000 |
|
|
|
|
|
i 16,270,823 |
|
|
|
i 16,373,952 |
|
Hotels, Restaurants & Leisure |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
KBP Brands, LLC |
|
i 05/26/21 |
|
Delayed Draw Term Loan - i 10.73% inc PIK |
|
|
i 1.8 |
% |
|
|
i 14,034,103 |
|
|
i 05/26/27 |
|
|
i 14,034,103 |
|
|
|
i 13,009,614 |
|
|
|
KBP Brands, LLC |
|
i 05/26/21 |
|
Term Loan - i 10.25% inc PIK |
|
|
i 1.2 |
% |
|
|
i 9,939,447 |
|
|
i 05/26/27 |
|
|
i 9,703,329 |
|
|
|
i 9,213,867 |
|
|
|
Red Lobster Management, LLC |
|
i 01/22/21 |
|
Term Loan - i 12.32% |
|
|
i 6.6 |
% |
|
|
i 54,443,650 |
|
|
i 01/22/26 |
|
|
i 53,777,763 |
|
|
|
i 49,053,728 |
|
|
|
|
|
|
|
|
|
|
i 9.6 |
% |
|
|
i 78,417,200 |
|
|
|
|
|
i 77,515,195 |
|
|
|
i 71,277,209 |
|
Household Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Slogic Holding Corp. (4) |
|
i 06/29/18 |
|
Last Out Term Loan - i 10.09% |
|
|
i 3.6 |
% |
|
|
i 26,681,925 |
|
|
i 10/29/26 |
|
|
i 26,656,711 |
|
|
|
i 26,681,925 |
|
|
|
|
|
|
|
|
|
|
i 3.6 |
% |
|
|
i 26,681,925 |
|
|
|
|
|
i 26,656,711 |
|
|
|
i 26,681,925 |
|
Household Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Greenfield World Trade, Inc. |
|
i 03/04/19 |
|
Last Out Term Loan - i 17.78% inc PIK |
|
|
i 7.7 |
% |
|
|
i 56,346,632 |
|
|
i 03/31/25 |
|
|
i 54,436,296 |
|
|
|
i 56,797,405 |
|
|
|
Greenfield World Trade, Inc. |
|
i 08/12/21 |
|
Last Out Delayed Draw Term Loan - i 17.78% inc PIK |
|
|
i 1.6 |
% |
|
|
i 11,980,543 |
|
|
i 12/31/22 |
|
|
i 10,940,072 |
|
|
|
i 12,076,388 |
|
|
|
|
|
|
|
|
|
|
i 9.3 |
% |
|
|
i 68,327,175 |
|
|
|
|
|
i 65,376,368 |
|
|
|
i 68,873,793 |
|
Information Technology Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Corcentric, Inc. |
|
i 11/15/18 |
|
Delayed Draw Term Loan - i 10.98% |
|
|
i 1.6 |
% |
|
|
i 12,136,640 |
|
|
i 11/15/23 |
|
|
i 12,136,640 |
|
|
|
i 12,136,640 |
|
|
|
Corcentric, Inc. |
|
i 11/15/18 |
|
Term Loan - i 10.98% |
|
|
i 4.2 |
% |
|
|
i 30,869,280 |
|
|
i 11/15/23 |
|
|
i 30,732,895 |
|
|
|
i 30,869,280 |
|
|
|
|
|
|
|
|
|
|
i 5.8 |
% |
|
|
i 43,005,920 |
|
|
|
|
|
i 42,869,535 |
|
|
|
i 43,005,920 |
|
Internet & Direct Marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Altern Marketing LLC |
|
i 09/30/20 |
|
First Out Term Loan - i 10.69% |
|
|
i 1.2 |
% |
|
|
i 8,673,924 |
|
|
i 10/07/24 |
|
|
i 8,591,509 |
|
|
|
i 8,613,206 |
|
|
|
Altern Marketing LLC |
|
i 09/30/20 |
|
Revolver - i 12.50% |
|
|
i 0.1 |
% |
|
|
i 531,263 |
|
|
i 10/07/24 |
|
|
i 531,263 |
|
|
|
i 527,544 |
|
|
|
|
|
|
|
|
|
|
i 1.3 |
% |
|
|
i 9,205,187 |
|
|
|
|
|
i 9,122,772 |
|
|
|
i 9,140,750 |
|
12
TCW DIRECT LENDING VII LLC
Consolidated Schedule of Investments (Continued)
As of December 31, 2022
Industry |
|
Issuer |
|
Acquisition |
|
Investment |
|
% of Net |
|
|
Par |
|
|
Maturity |
|
Amortized |
|
|
Fair Value |
|
||||
|
|
DEBT (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Media |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Encompass Digital Media, Inc. |
|
i 10/01/18 |
|
Revolver - i 11.92% inc PIK |
|
|
i 0.2 |
% |
|
$ |
i 1,766,925 |
|
|
i 09/28/23 |
|
$ |
i 1,766,925 |
|
|
$ |
i 1,560,195 |
|
|
|
Encompass Digital Media, Inc. |
|
i 10/01/18 |
|
Term Loan - i 11.92% inc PIK |
|
|
i 3.6 |
% |
|
|
i 30,455,589 |
|
|
i 09/28/23 |
|
|
i 30,398,230 |
|
|
|
i 26,892,285 |
|
|
|
|
|
|
|
|
|
|
i 3.8 |
% |
|
|
i 32,222,514 |
|
|
|
|
|
i 32,165,155 |
|
|
|
i 28,452,480 |
|
Publishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Bendon Inc. |
|
i 12/11/20 |
|
Term Loan - i 11.73% |
|
|
i 6.3 |
% |
|
|
i 49,264,770 |
|
|
i 12/11/25 |
|
|
i 48,605,744 |
|
|
|
i 47,047,856 |
|
|
|
|
|
|
|
|
|
|
i 6.3 |
% |
|
|
i 49,264,770 |
|
|
|
|
|
i 48,605,744 |
|
|
|
i 47,047,856 |
|
Software |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Mondee Holdings LLC |
|
i 12/20/19 |
|
Term Loan - i 13.34% inc PIK |
|
|
i 10.2 |
% |
|
|
i 75,063,333 |
|
|
i 12/23/24 |
|
|
i 74,196,895 |
|
|
|
i 75,813,966 |
|
|
|
|
|
|
|
|
|
|
i 10.2 |
% |
|
|
i 75,063,333 |
|
|
|
|
|
i 74,196,895 |
|
|
|
i 75,813,966 |
|
Textiles, Apparel & Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Centric Brands Inc. (3) |
|
i 10/09/20 |
|
Term Loan - i 13.30% inc PIK |
|
|
i 5.2 |
% |
|
|
i 43,097,540 |
|
|
i 10/09/25 |
|
|
i 40,938,235 |
|
|
|
i 38,701,591 |
|
|
|
Centric Brands Inc. (3) |
|
i 10/09/20 |
|
Revolver - i 9.84% |
|
|
i 0.4 |
% |
|
|
i 2,989,372 |
|
|
i 10/09/24 |
|
|
i 2,978,696 |
|
|
|
i 2,989,372 |
|
|
|
Hollander Intermediate LLC |
|
i 09/19/22 |
|
Term Loan - i 13.19% |
|
|
i 7.4 |
% |
|
|
i 59,091,845 |
|
|
i 09/19/26 |
|
|
i 59,091,845 |
|
|
|
i 55,073,599 |
|
|
|
|
|
|
|
|
|
|
i 13.0 |
% |
|
|
i 105,178,757 |
|
|
|
|
|
i 103,008,776 |
|
|
|
i 96,764,562 |
|
|
|
Total Debt Investments |
|
|
|
|
|
|
i 142.3 |
% |
|
|
i 1,104,858,821 |
|
|
|
|
|
i 1,086,253,073 |
|
|
|
i 1,054,945,230 |
|
13
TCW DIRECT LENDING VII LLC
Consolidated Schedule of Investments (Continued)
As of December 31, 2022
Industry |
|
Issuer |
|
|
|
Investment |
|
% of Net |
|
|
Shares |
|
|
|
|
Amortized |
|
|
Fair Value |
|
||||
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
TCW ND Parent Holdings LLC. (2) (5) (6) |
|
|
|
Class A Units |
|
|
i 0.0 |
% |
|
|
i 4,399 |
|
|
|
|
|
i 43,990 |
|
|
|
i — |
|
|
|
|
|
|
|
|
|
|
i 0.0 |
% |
|
|
i 4,399 |
|
|
|
|
|
i 43,990 |
|
|
|
i — |
|
Chemicals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
AGY Equity LLC (2) (5) (6) |
|
|
|
Class A Preferred Units |
|
|
i 0.0 |
% |
|
|
i 7,752,414 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
AGY Equity LLC (2) (5) (6) |
|
|
|
Class B Preferred Units |
|
|
i 0.0 |
% |
|
|
i 10,078,138 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
AGY Equity LLC (2) (5) (6) |
|
|
|
Class C Common Units |
|
|
i 0.0 |
% |
|
|
i 11,241,000 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
AGY Equity LLC (2) (5) (6) |
|
|
|
Class D Preferred Units |
|
|
i 0.0 |
% |
|
|
i 3,997,226 |
|
|
|
|
|
i 3,997,226 |
|
|
|
i — |
|
|
|
|
|
|
|
|
|
|
i 0.0 |
% |
|
|
i 33,068,778 |
|
|
|
|
|
i 3,997,226 |
|
|
|
i — |
|
Household Durables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Shelterlogic Group Holdings, Inc (4) (5) (6) |
|
|
|
Common Stock |
|
|
i 4.0 |
% |
|
|
i 1,254,034 |
|
|
|
|
|
i — |
|
|
|
i 29,432,178 |
|
|
|
|
|
|
|
|
|
|
i 4.0 |
% |
|
|
i 1,254,034 |
|
|
|
|
|
i — |
|
|
|
i 29,432,178 |
|
Household Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Greenfield World Trade, Inc. (5) (6) |
|
|
|
Class A-1 Warrant, expires i 03/25/27 |
|
|
i 0.9 |
% |
|
|
i 3,959 |
|
|
|
|
|
i 3,178,520 |
|
|
|
i 6,865,228 |
|
|
|
Greenfield World Trade, Inc. (5) (6) |
|
|
|
Class A-2 Warrant, expires i 03/25/27 |
|
|
i 0.3 |
% |
|
|
i 1,376 |
|
|
|
|
|
i 1,189,508 |
|
|
|
i 1,913,294 |
|
|
|
Greenfield World Trade, Inc. (5) (6) |
|
|
|
Class A-3 Warrant, expires i 03/25/27 |
|
|
i 0.0 |
% |
|
|
i 116 |
|
|
|
|
|
i 113,932 |
|
|
|
i 160,520 |
|
|
|
|
|
|
|
|
|
|
i 1.2 |
% |
|
|
i 5,451 |
|
|
|
|
|
i 4,481,960 |
|
|
|
i 8,939,042 |
|
Software |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Mondee Holdings LLC (5) (6) |
|
|
|
Class G Preferred Stock |
|
|
i 1.2 |
% |
|
|
i 2,700,922 |
|
|
|
|
|
i 1,226,708 |
|
|
|
i 9,220,164 |
|
|
|
|
|
|
|
|
|
|
i 1.2 |
% |
|
|
i 2,700,922 |
|
|
|
|
|
i 1,226,708 |
|
|
|
i 9,220,164 |
|
Textiles, Apparel & Luxury Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Centric Brands GP LLC (3) (5) (6) |
|
|
|
Membership Interests |
|
|
i 0.0 |
% |
|
|
i 159,658 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
Centric Brands L.P. (3) (5) (6) |
|
|
|
Class A LP Interests |
|
|
i 0.0 |
% |
|
|
i 159,658 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
|
|
|
|
|
|
|
i 0.0 |
% |
|
|
i 319,316 |
|
|
|
|
|
i — |
|
|
|
i — |
|
|
|
Total Equity Investments |
|
|
i 6.4 |
% |
|
|
i 37,352,900 |
|
|
|
|
|
i 9,749,884 |
|
|
|
i 47,591,384 |
|
||||
|
|
Total Debt & Equity Investments (7) |
|
|
i 148.7 |
% |
|
|
|
|
|
|
|
i 1,096,002,957 |
|
|
|
i 1,102,536,614 |
|
|||||
|
|
Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
First American Government Obligation Fund, Yield i 4.06% |
|
|
i 5.2 |
% |
|
|
i 38,242,961 |
|
|
|
|
|
i 38,242,961 |
|
|
|
i 38,242,961 |
|
||||
|
|
Total Cash Equivalents |
|
|
i 5.2 |
% |
|
|
|
|
|
|
|
i 38,242,961 |
|
|
|
i 38,242,961 |
|
|||||
|
|
Total Investments ( i 153.8%) |
|
|
|
|
|
|
|
|
|
$ |
i 1,134,245,918 |
|
|
$ |
i 1,140,779,575 |
|
||||||
|
|
Net unrealized depreciation on unfunded commitments (- i 0.1%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
( i 770,877 |
) |
|||||||
|
|
Liabilities in Excess of Other Assets (- i 53.7%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
( i 398,343,218 |
) |
|||||||
|
|
Net Assets ( i 100.0%) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
i 741,665,480 |
|
|||||||
14
TCW DIRECT LENDING VII LLC
Consolidated Schedule of Investments (Continued)
As of December 31, 2022
Name of Investment |
|
Fair Value at |
|
|
Gross Addition(a) |
|
|
Gross Reduction(b) |
|
|
Realized Gains |
|
|
Net Change in |
|
|
Fair Value at |
|
|
Interest/Dividend/ |
|
|||||||
AGY Holdings Corp. Delayed Draw Term Loan - i 14.73% inc PIK |
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
i — |
|
AGY Holdings Corp. Delayed Draw Term Loan - i 14.73% inc PIK |
|
|
i 19,425,938 |
|
|
|
i 7,206,449 |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 1,212,151 |
) |
|
|
i 25,420,236 |
|
|
|
i 5,686,033 |
|
AGY Holdings Corp. Term Loan - i 14.42% inc PIK |
|
|
i 25,005,013 |
|
|
|
i 2,540,405 |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 1,230,229 |
) |
|
|
i 26,315,189 |
|
|
|
i 5,854,193 |
|
Navistar Defense, LLC Term Loan - i 12.73% inc PIK |
|
|
i — |
|
|
|
i 33,109,294 |
|
|
|
i — |
|
|
|
i — |
|
|
|
i 1,523,175 |
|
|
|
i 34,632,469 |
|
|
|
i 3,354 |
|
AGY Equity LLC Class A Preferred Units |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
AGY Equity LLC Class B Preferred Units |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
AGY Equity LLC Class C Common Units |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
AGY Equity LLC Class D Preferred Units |
|
|
i — |
|
|
|
i 3,997,226 |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 3,997,226 |
) |
|
|
i — |
|
|
|
i — |
|
TCW ND Parent Holdings LLC Class A Units |
|
|
i — |
|
|
|
i 43,990 |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 43,990 |
) |
|
|
i — |
|
|
|
i — |
|
Navistar Defense, LLC Term Loan A - i 9.75% inc PIK |
|
|
i 3,244,352 |
|
|
|
i 107,614 |
|
|
|
( i 2,307,174 |
) |
|
|
i — |
|
|
|
( i 1,044,792 |
) |
|
|
i — |
|
|
|
i 198,952 |
|
Navistar Defense, LLC Term Loan B - i 9.75% inc PIK |
|
|
i 13,671,013 |
|
|
|
i 772,753 |
|
|
|
( i 18,197,242 |
) |
|
|
i — |
|
|
|
i 3,753,476 |
|
|
|
i — |
|
|
|
i 1,502,138 |
|
Navistar Defense, LLC Term Loan C - i 9.75% inc PIK |
|
|
i — |
|
|
|
i 9,261,149 |
|
|
|
( i 9,261,149 |
) |
|
|
i — |
|
|
|
— |
|
|
|
— |
|
|
|
i 1,804,531 |
|
Total Controlled Affiliated investments |
|
$ |
i 61,346,316 |
|
|
$ |
i 57,038,880 |
|
|
$ |
( i 29,765,565 |
) |
|
$ |
i — |
|
|
$ |
( i 2,251,737 |
) |
|
$ |
i 86,367,894 |
|
|
$ |
i 15,049,201 |
|
Name of Investment |
|
Fair Value at |
|
|
Gross Addition(a) |
|
|
Gross Reduction(b) |
|
|
Realized Gains |
|
|
Net Change in |
|
|
Fair Value at |
|
|
Interest/Dividend/ |
|
|||||||
Slogic Holding Corp. Last Out Term Loan - i 10.09% |
|
$ |
i 26,681,925 |
|
|
$ |
i 121,434 |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
( i 121,434 |
) |
|
$ |
i 26,681,925 |
|
|
$ |
i 2,275,402 |
|
Shelterlogic Group Holdings, Inc Common Stock |
|
|
i 30,761,454 |
|
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 1,329,276 |
) |
|
|
i 29,432,178 |
|
|
|
— |
|
Total Non-Controlled Affiliated Investments |
|
$ |
i 57,443,379 |
|
|
$ |
i 121,434 |
|
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
( i 1,450,710 |
) |
|
$ |
i 56,114,103 |
|
|
$ |
i 2,275,402 |
|
LIBOR - London Interbank Offered Rate, generally 1-Month or 3-Month
PRIME - Prime Rate
SOFR - Secured Overnight Financing Rate, generally 1-Month or 3-Month
15
TCW DIRECT LENDING VII LLC
Consolidated Schedule of Investments (Continued)
As of December 31, 2022
Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $ i 198,299,049 and $ i 514,779,805, respectively, for the year ended December 31, 2022. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments.
Country Breakdown Portfolio |
|
|
|
|
United States |
|
|
i 100.0 |
% |
See Notes to Consolidated Financial Statements
16
TCW DIRECT LENDING VII LLC
Consolidated Statements of Assets and Liabilities
(Dollar amounts in thousands, except unit data)
|
|
As of March 31, |
|
|
|
|
||
|
|
|
|
As of December 31, |
|
|||
|
|
(unaudited) |
|
|
2022 |
|
||
Assets |
|
|
|
|
|
|
||
Investments, at fair value |
|
|
|
|
|
|
||
Non-controlled/non-affiliated investments (amortized cost of $ i 934,707 and |
|
$ |
i 906,686 |
|
|
$ |
i 960,055 |
|
Non-controlled affiliated investments (amortized cost of $ i 26,669 and |
|
|
i 47,348 |
|
|
|
i 56,114 |
|
Controlled affiliated investments (amortized cost of $ i 96,446 and |
|
|
i 90,401 |
|
|
|
i 86,368 |
|
Cash and cash equivalents |
|
|
i 74,196 |
|
|
|
i 47,657 |
|
Interest receivable |
|
|
i 10,367 |
|
|
|
i 11,632 |
|
Receivable for investments sold |
|
|
i 7,344 |
|
|
|
i 605 |
|
Due from Adviser |
|
|
i 157 |
|
|
|
i 157 |
|
Deferred financing costs |
|
|
i 66 |
|
|
|
i 221 |
|
Prepaid and other assets |
|
|
i 52 |
|
|
|
i 103 |
|
Total Assets |
|
$ |
i 1,136,617 |
|
|
$ |
i 1,162,912 |
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Term loan (net of $ i 1,214 and $ i 1,576 of deferred financing costs, respectively) |
|
$ |
i 298,786 |
|
|
$ |
i 335,424 |
|
Incentive fee payable |
|
|
i 78,335 |
|
|
|
i 76,266 |
|
Management fees payable |
|
|
i 4,055 |
|
|
|
i 4,177 |
|
Interest and credit facilities expense payable |
|
|
i 3,842 |
|
|
|
i 4,130 |
|
Unrealized depreciation on unfunded commitments |
|
|
i 758 |
|
|
|
i 771 |
|
Directors’ fees payable |
|
|
i 98 |
|
|
|
i — |
|
Other accrued expenses and other liabilities |
|
|
i 803 |
|
|
|
i 479 |
|
Total Liabilities |
|
|
i 386,677 |
|
|
|
i 421,247 |
|
|
|
|
|
|
|
|
||
Commitments and Contingencies (Note 5) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Members’ Capital |
|
|
|
|
|
|
||
Common Unitholders’ commitment ( i i i i 13,734,010 / / / units issued and outstanding) |
|
|
i 1,373,401 |
|
|
|
i 1,373,401 |
|
Common Unitholders’ undrawn commitment ( i i i i 13,734,010 / / / units issued and outstanding) |
|
|
( i 165,401 |
) |
|
|
( i 165,401 |
) |
Common Unitholders’ return of capital |
|
|
( i 387,434 |
) |
|
|
( i 387,434 |
) |
Common Unitholders’ offering costs |
|
|
( i 633 |
) |
|
|
( i 633 |
) |
Accumulated Common Unitholders’ tax reclassification |
|
|
( i 1,865 |
) |
|
|
( i 1,865 |
) |
Common Unitholders’ capital |
|
|
i 818,068 |
|
|
|
i 818,068 |
|
Accumulated loss |
|
|
( i 68,128 |
) |
|
|
( i 76,403 |
) |
Total Members’ Capital |
|
$ |
i 749,940 |
|
|
$ |
i 741,665 |
|
Total Liabilities and Members’ Capital |
|
$ |
i 1,136,617 |
|
|
$ |
i 1,162,912 |
|
Net Asset Value Per Unit (Note 10) |
|
$ |
i 66.64 |
|
|
$ |
i 66.04 |
|
See Notes to Consolidated Financial Statements.
17
TCW DIRECT LENDING VII LLC
Consolidated Statements of Operations (Unaudited)
(Dollar amounts in thousands, except unit data)
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
Investment Income |
|
|
|
|
|
|
||
Non-controlled/non-affiliated investments: |
|
|
|
|
|
|
||
Interest income |
|
$ |
i 26,631 |
|
|
$ |
i 28,449 |
|
Interest income paid-in-kind |
|
|
i 8,898 |
|
|
|
i 7,439 |
|
Other fee income |
|
|
i 85 |
|
|
|
i 213 |
|
Non-controlled affiliated investments: |
|
|
|
|
|
|
||
Interest income |
|
|
i 708 |
|
|
|
i 474 |
|
Controlled affiliated investments: |
|
|
|
|
|
|
||
Interest income |
|
|
i 2,231 |
|
|
|
i 1,154 |
|
Interest income paid-in-kind |
|
|
i 2,827 |
|
|
|
i 763 |
|
Other fee income |
|
|
i 1 |
|
|
|
i — |
|
Total investment income |
|
|
i 41,381 |
|
|
|
i 38,492 |
|
|
|
|
|
|
|
|
||
Expenses |
|
|
|
|
|
|
||
Interest and credit facilities expenses |
|
|
i 6,277 |
|
|
|
i 5,089 |
|
Management fees |
|
|
i 4,055 |
|
|
|
i 5,236 |
|
Incentive fees |
|
|
i 2,069 |
|
|
|
i 3,890 |
|
Professional fees |
|
|
i 326 |
|
|
|
i 234 |
|
Administrative fees |
|
|
i 319 |
|
|
|
i 359 |
|
Directors’ fees |
|
|
i 100 |
|
|
|
i 100 |
|
Other expenses |
|
|
i 71 |
|
|
|
i 79 |
|
Total expenses |
|
|
i 13,217 |
|
|
|
i 14,987 |
|
Net investment income |
|
|
i 28,164 |
|
|
|
i 23,505 |
|
Net realized and unrealized gain (loss) on investments |
|
|
|
|
|
|
||
Net realized gain: |
|
|
|
|
|
|
||
Non-controlled/non-affiliated investments |
|
|
i 19 |
|
|
|
i — |
|
Net change in unrealized appreciation/(depreciation): |
|
|
|
|
|
|
||
Non-controlled/non-affiliated investments |
|
|
( i 10,269 |
) |
|
|
( i 3,168 |
) |
Non-controlled affiliated investments |
|
|
( i 8,778 |
) |
|
|
( i 3,418 |
) |
Controlled affiliated investments |
|
|
( i 861 |
) |
|
|
( i 1,361 |
) |
Net realized and unrealized (loss) gain on investments |
|
|
( i 19,889 |
) |
|
|
( i 7,947 |
) |
Net increase in Members’ Capital from operations |
|
$ |
i 8,275 |
|
|
$ |
i 15,558 |
|
Basic and diluted: |
|
|
|
|
|
|
||
Income per unit |
|
$ |
i i 0.60 / |
|
|
$ |
i i 1.13 / |
|
See Notes to Consolidated Financial Statements.
18
TCW DIRECT LENDING VII LLC
Consolidated Statements of Changes in Members’ Capital (Unaudited)
(Dollar amounts in thousands, except unit data)
|
|
Common |
|
|
Accumulated |
|
|
Total |
|
|||
Members’ Capital at January 1, 2022 |
|
$ |
i 934,160 |
|
|
$ |
( i 30,864 |
) |
|
$ |
i 903,296 |
|
Net Increase (Decrease) in Members’ Capital Resulting from Operations: |
|
|
|
|
|
|
|
|
|
|||
Net investment income |
|
|
i — |
|
|
|
i 23,505 |
|
|
|
i 23,505 |
|
Net change in unrealized appreciation/(depreciation) on investments |
|
|
i — |
|
|
|
( i 7,947 |
) |
|
|
( i 7,947 |
) |
Total Increase in Members’ Capital for the three months ended |
|
|
i — |
|
|
|
i 15,558 |
|
|
|
i 15,558 |
|
Members’ Capital at March 31, 2022 |
|
$ |
i 934,160 |
|
|
$ |
( i 15,306 |
) |
|
$ |
i 918,854 |
|
|
|
Common |
|
|
Accumulated |
|
|
Total |
|
|||
Members’ Capital at January 1, 2023 |
|
$ |
i 818,068 |
|
|
$ |
( i 76,403 |
) |
|
$ |
i 741,665 |
|
Net Increase (Decrease) in Members’ Capital Resulting from Operations: |
|
|
|
|
|
|
|
|
|
|||
Net investment income |
|
|
i — |
|
|
|
i 28,164 |
|
|
|
i 28,164 |
|
Net realized gain on investments |
|
|
i — |
|
|
|
i 19 |
|
|
|
i 19 |
|
Net change in unrealized appreciation/(depreciation) on investments |
|
|
i — |
|
|
|
( i 19,908 |
) |
|
|
( i 19,908 |
) |
Total Increase in Members’ Capital for the three months ended March 31, 2023 |
|
|
i — |
|
|
|
i 8,275 |
|
|
|
i 8,275 |
|
Members’ Capital at March 31, 2023 |
|
$ |
i 818,068 |
|
|
$ |
( i 68,128 |
) |
|
$ |
i 749,940 |
|
See Notes to Consolidated Financial Statements.
19
TCW DIRECT LENDING VII LLC
Consolidated Statements of Cash Flows (Unaudited)
(Dollar amounts in thousands, except unit data)
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
Cash Flows from Operating Activities |
|
|
|
|
|
|
||
Net increase in net assets resulting from operations |
|
$ |
i 8,275 |
|
|
$ |
i 15,558 |
|
Adjustments to reconcile the net increase in net assets resulting from operations to net |
|
|
|
|
|
|
||
Purchases of investments |
|
|
( i 13,167 |
) |
|
|
( i 66,323 |
) |
Interest income paid-in-kind |
|
|
( i 11,725 |
) |
|
|
( i 8,202 |
) |
Proceeds from sales and paydowns of investments |
|
|
i 60,978 |
|
|
|
i 95,456 |
|
Net realized gain on investments |
|
|
( i 19 |
) |
|
|
i — |
|
Net change in unrealized (appreciation)/depreciation on investments |
|
|
i 19,908 |
|
|
|
i 7,947 |
|
Amortization of premium and accretion of discount, net |
|
|
( i 4,624 |
) |
|
|
( i 3,355 |
) |
Amortization of deferred financing costs |
|
|
i 516 |
|
|
|
i 1,388 |
|
Increase (decrease) in operating assets and liabilities: |
|
|
|
|
|
|
||
(Increase) decrease in interest receivable |
|
|
i 1,265 |
|
|
|
( i 350 |
) |
(Increase) decrease in due from Adviser |
|
|
i — |
|
|
|
i — |
|
(Increase) decrease in prepaid and other assets |
|
|
i 51 |
|
|
|
i 50 |
|
Increase (decrease) in payable for open trades |
|
|
i — |
|
|
|
i — |
|
Increase (decrease) in incentive fees payable |
|
|
i 2,069 |
|
|
|
i 3,890 |
|
Increase (decrease) in management fees payable |
|
|
( i 122 |
) |
|
|
( i 11 |
) |
Increase (decrease) in interest and credit facilities expense payable |
|
|
( i 288 |
) |
|
|
i 2 |
|
Increase (decrease) in directors’ fees payable |
|
|
i 98 |
|
|
|
i 84 |
|
Increase (decrease) in other accrued expenses and liabilities |
|
|
i 324 |
|
|
|
i 411 |
|
Net cash provided by operating activities |
|
|
i 63,539 |
|
|
|
i 46,545 |
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
||
Repayments of credit facilities |
|
|
( i 37,000 |
) |
|
|
( i 45,000 |
) |
Net cash used in financing activities |
|
|
( i 37,000 |
) |
|
|
( i 45,000 |
) |
Net increase in cash and cash equivalents |
|
|
i 26,539 |
|
|
|
i 1,545 |
|
Cash and cash equivalents, beginning of period |
|
|
i 47,657 |
|
|
|
i 113,687 |
|
Cash and cash equivalents, end of period |
|
$ |
i 74,196 |
|
|
$ |
i 115,232 |
|
Supplemental and non-cash financing activities |
|
|
|
|
|
|
||
Interest expense paid |
|
$ |
i 5,840 |
|
|
$ |
i 3,330 |
|
Purchase of investments due to reorganization |
|
$ |
i 1,227 |
|
|
$ |
i 17,247 |
|
Change in receivable for investments sold |
|
$ |
i 6,739 |
|
|
$ |
i — |
|
See Notes to Consolidated Financial Statements.
20
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except for unit data)
1. Organization and Basis of Presentation
Organization: TCW Direct Lending VII LLC (the “Company”) was formed as a Delaware limited liability company on May 23, 2017. The Company engaged in a private offering of its common limited liability company units (the “Units”) to investors in reliance on exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”). In addition, the Company may issue preferred units (“Preferred Units”), though it currently has no intention to do so. On August 18, 2017, the Company sold and issued i 10 Units at an aggregate purchase price of $ i 1 to TCW Asset Management Company LLC (the “Adviser”), an affiliate of the TCW Group, Inc. The Company commenced operations during the second quarter of fiscal year 2018.
The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company has also elected to be treated for U.S. federal income tax purposes as a Regulated Investment Company (a “RIC”) under Subchapter M of the U.S Internal Revenue Code of 1986, as amended (the “Code”), beginning fiscal year 2018. The Company is required to meet the minimum distribution and other requirements for RIC qualification. As a BDC and a RIC, the Company is required to comply with certain regulatory requirements.
During 2018, the Company formed two Delaware limited liability companies which each have a single member interest owned by the Company. On February 12, 2020, the Company formed its third wholly-owned subsidiary, TCW DLG Funding VII 2020-1 LLC, a single member Delaware limited liability company. On March 21, 2022, the Company formed its fourth wholly-owned subsidiary, TCW DL NAV LLC, also a single member Delaware limited liability company.
The consolidated financial statements in this quarterly report on Form 10-Q include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
Term: The term of the Company will continue until the sixth anniversary of the Initial Closing Date (as defined below), April 13, 2024, unless extended or sooner dissolved as provided in the Company’s amended and restated limited liability agreement (the “LLC Agreement”) or by operation of law. The Company may extend the term for two additional one-year periods upon written notice to the holders of the Units (the “Unitholders) and holders of preferred units, if any, (together with the Unitholders, the “Members”) at least 90 days prior to the expiration of the term or the end of the first one-year period. Thereafter, the term may be extended for successive i one-year periods, with the vote or consent of a supermajority representing more than 66 2/3% in interest of the holders of the Units.
Commitment Period: i The Commitment Period commenced on April 13, 2018 (the “Initial Closing Date”), the day on which the Company completed the first closing of the sale of its Units to persons not affiliated with the Adviser and ended on May 16, 2021, which is the later of (a) April 13, 2021, three years from the Initial Closing Date and (b) May 16, 2021, three years from the date in which the Company first completed an investment. In accordance with the Company’s LLC Agreement, the Company may complete investment transactions that were significantly in process as of the end of the Commitment Period and which the Company reasonably expects to be consummated prior to i 90 days subsequent to the expiration date of the Commitment Period. The Company may also effect follow-on investments in existing portfolio companies up to an aggregate maximum of i 10% of Capital Commitments (as defined below).
Capital Commitments: On the Initial Closing Date, the Company began accepting subscription agreements from investors for the private sale of its Units. On January 14, 2019, the Company completed its fourth and final closing sale of Units. The Company sold i 13,734,010 Units for an aggregate offering price of $ i 1,373,401. Each Unitholder is obligated to contribute capital equal to its respective capital commitment to the Company (the “Commitment”) and each Unit’s Commitment obligation is $ i 100.00 per unit. The sale of the Units was made pursuant to subscription agreements entered into by the Company and each investor. Under the terms of the subscription agreements, the Company may draw down all or any portion of the undrawn commitment with respect to each Unit generally upon at least ten business days’ prior written notice to the unitholders. The amount of capital that remains to be drawn down and contributed is referred to as an “Undrawn Commitment”.
21
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
1. Organization and Basis of Presentation (Continued)
The commitment amount funded does not include amounts contributed in anticipation of a potential investment that the Company did not consummate and therefore returned to the Members as unused capital. i As of March 31, 2023, aggregate Commitments, Undrawn Commitments, percentage of Commitments funded and the number of subscribed for Units of the Company were as follows:
|
|
Commitments |
|
|
Undrawn |
|
|
% of |
|
|
Units |
|
||||
Unitholder |
|
$ |
i 1,373,401 |
|
|
$ |
i 165,401 |
|
|
|
i 88.0 |
% |
|
|
i 13,734,010 |
|
Recallable Amount: A Unitholder may be required to re-contribute amounts distributed equal to (a) such Unitholder’s share of all portfolio investments that are repaid to the Company, or otherwise recouped by the Company, and distributed to the Unitholder, in whole or in part, during or after the Commitment period, reduced by (b) all re-contributions made by such Unitholder. This amount, (the “Recallable Amount”) is excluded from the calculation of the accrual based net asset value.
The Recallable Amount as of March 31, 2023 was $ i 387,434.
/2. Significant Accounting Policies
Basis of Presentation: The Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies, (“ASC 946”). The Company has also consolidated the results of its wholly-owned subsidiaries in its consolidated financial statements in accordance with ASC 946.
Use of Estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities at the date of the consolidated financial statements, (ii) the reported amounts of income and expenses during the years presented and (iii) disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates, and such differences could be material.
Investments: The Company measures the fair value of its investments in accordance with ASC Topic 820, Fair Value Measurements and Disclosure (“ASC 820”). Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, the Company considers the principal market of its investments to be the market in which the investment trades with the greatest volume and level of activity.
Transactions: The Company records investment transactions on the trade date. The Company considers the trade date for investments not traded on a recognizable exchange, or traded in the over-the-counter markets, to be the date on which the Company receives legal or contractual title to the asset and bears the risk of loss.
Income Recognition: Interest income is recorded on an accrual basis unless doubtful of collection or the related investment is in default. Realized gains and losses on investments are recorded on a specific identification basis. The Company typically receives a fee in the form of a discount to the purchase price at the time it funds an investment in a loan. The discount is accreted to interest income over the life of the respective loan, using the effective-interest method assuming there are no questions as to collectability, and reflected in the amortized cost basis of the investment. Ongoing facility, commitment or other additional fees including prepayment fees, consent fees and forbearance fees are recognized as interest income in the period in which the fees were earned. Income received in exchange for the provision of services such as administration and managerial services is recognized as other fee income in the period in which it was earned.
22
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
2. Significant Accounting Policies (Continued)
The Company has entered into certain intercreditor agreements that entitle the Company to the “last out” tranche of first lien secured loans, whereby the “first out” tranche will receive priority as to the “last out” tranche with respect to payments of principal, interest, and any other amounts due thereunder. In certain cases, the Company may receive a higher interest rate than the contractual stated interest rate as disclosed on the Company’s Consolidated Schedule of Investments.
Certain investments have an unfunded loan commitment for a delayed draw term loan or revolving credit. The Company earns an unused commitment fee on the unfunded commitment during the commitment period. The expiration date of the commitment period may be earlier than the maturity date of the investment stated above. See Note 5—Commitments and Contingencies.
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection.
Deferred Financing Costs: Deferred financing costs incurred by the Company in connection with the Credit Facilities (as defined in Note 7 to the Consolidated Financial Statements), including arrangement fees, upfront fees and legal fees, are amortized on a straight-line basis over the term of the respective credit facility.
Organization and Offering Costs: The Company expensed organization costs totaling $ i 740 (net of $ i 380 in Adviser reimbursement) since its inception through December 31, 2018. Offering costs totaling $ i 633 (net of $ i 324 in Adviser reimbursement) were charged directly to Members’ Capital on December 31, 2018. No additional organization and offering costs were incurred subsequent to December 31, 2018. The Company did not bear more than an amount equal to i 10 basis points of the aggregate capital commitments for organization and offering expenses.
/Cash and Cash Equivalents: The Company generally considers investments with a maturity of three months or less at the time of acquisition to be cash equivalents. The Company had i no cash equivalents as of March 31, 2023.
/Income Taxes: The Company has elected to be regulated as a BDC under the 1940 Act. The Company also elected to be treated as a RIC under the Code beginning with the taxable year ending December 31, 2018. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its Unitholders as dividends. Rather, any tax liability related to income earned and distributed by the Company represents obligations of the Company’s investors and will not be reflected in the consolidated financial statements of the Company.
Repurchase Obligations: Transactions whereby the Company sells an investment it currently holds with a concurrent agreement to repurchase the same investment at an agreed upon price at a future date are accounted for as secured borrowings in accordance with ASC 860, Transfers and Servicing. The investment subject to the repurchase agreement remains on the Company's Statements of Assets and Liabilities and a secured borrowing is recorded for the future repurchase obligation. The secured borrowing is collateralized by the investment subject to the repurchase agreement. Interest expense associated with the repurchase obligation is reported on the Company's Statements of Operations within Interest expense on repurchase transactions.
Recent Accounting Pronouncements: In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023 and interim periods within that fiscal year, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2022-03 on the consolidated financial statements.
23
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
3. Investment Valuations and Fair Value Measurements
Investments at Fair Value: Investments held by the Company are valued at fair value. Fair value is generally determined on the basis of last reported sales prices or official closing prices on the primary exchange in which each security trades, or if no sales are reported, generally based on the midpoint of the valuation range obtained for debt investments from a quotation reporting system, established market makers or pricing service.
Investments for which market quotes are not readily available or are not considered reliable are valued at fair value according to procedures approved by the Board of Directors (the “Board”) based on similar instruments, internal assumptions and the weighting of the best available pricing inputs.
Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser as the "valuation designee" with respect to the fair valuation of the Company's portfolio securities, subject to oversight by and periodic reporting to the Board.
Fair Value Hierarchy: Assets and liabilities are classified by the Company into three levels based on valuation inputs used to determine fair value:
Level 1 values are based on unadjusted quoted market prices in active markets for identical assets.
Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs.
Level 3 values are based on significant unobservable inputs that reflect the Company’s determination of assumptions that market participants might reasonably use in valuing the assets.
Categorization within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation levels are not necessarily an indication of the risk associated with investing in those securities.
Level 1 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:
Equity, (Level 1), generally includes common stock valued at the closing price on the primary exchange in which the security trades.
Level 2 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:
Equity, (Level 2), generally includes warrants valued using quotes for comparable investments.
Level 3 Assets (Investments): The following valuation techniques and significant inputs are used to determine the fair value of investments in private debt and equity for which reliable market quotations are not available. Some of the inputs are independently observable however, a significant portion of the inputs and the internal assumptions applied are unobservable.
Debt, (Level 3), includes investments in privately originated senior secured debt. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. An income method approach incorporating a weighted average cost of capital and discount rate or a market method approach using prices and other relevant information generated by market transactions involving identical or comparable assets are generally used to determine fair value, though some cases use an enterprise value waterfall method. Valuation may also include a shadow rating method. Standard pricing inputs include but are not limited to the financial health of the issuer, place in the capital structure, value of other issuer debt, credit, industry, and market risk and events.
24
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
3. Investment Valuations and Fair Value Measurements (Continued)
Equity, (Level 3), includes common stock, preferred stock and warrants. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. A market approach is generally used to determine fair value. Pricing inputs include, but are not limited to, financial health and relevant business developments of the issuer; EBITDA; market multiples of comparable companies; comparable market transactions and recent trades or transactions; issuer, industry and market events; and contractual or legal restrictions on the sale of the security. When a Black-Scholes pricing model is used it follows the income approach. The pricing model takes into account the contract terms as well as multiple inputs, including: time value, implied volatility, equity prices and interest rates. A liquidity discount based on current market expectations, future events, minority ownership position and the period management reasonably expects to hold the investment may be applied.
Pricing inputs and weightings applied to determine value require subjective determination. Accordingly, valuations do not necessarily represent the amounts that may eventually be realized from sales or other dispositions of investments.
The following is a summary by major security type of the fair valuations according to inputs used in valuing investments listed in the Consolidated Schedule of Investments as of March 31, 2023:
Investments |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Debt |
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
i 1,006,788 |
|
|
$ |
i 1,006,788 |
|
Equity |
|
|
i — |
|
|
|
i 9,968 |
|
|
|
i 27,679 |
|
|
|
i 37,647 |
|
Cash equivalents |
|
|
i 35,887 |
|
|
|
i — |
|
|
|
i — |
|
|
|
i 35,887 |
|
Total Assets |
|
$ |
i 35,887 |
|
|
$ |
i 9,968 |
|
|
$ |
i 1,034,467 |
|
|
$ |
i 1,080,322 |
|
The following is a summary by major security type of the fair valuations according to inputs used in valuing investments listed in the Consolidated Schedule of Investments as of December 31, 2022:
Investments |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Debt |
|
$ |
i — |
|
|
$ |
i — |
|
|
$ |
i 1,054,945 |
|
|
$ |
i 1,054,945 |
|
Equity |
|
|
i — |
|
|
|
i — |
|
|
|
i 47,591 |
|
|
|
i 47,591 |
|
Cash equivalents |
|
|
i 38,243 |
|
|
|
i — |
|
|
|
i — |
|
|
|
i 38,243 |
|
Total Assets |
|
$ |
i 38,243 |
|
|
$ |
i — |
|
|
$ |
i 1,102,536 |
|
|
$ |
i 1,140,779 |
|
The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the three months ended March 31, 2023:
|
|
Debt |
|
|
Equity |
|
|
Total |
|
|||
Balance, January 1, 2023 |
|
$ |
i 1,054,945 |
|
|
$ |
i 47,591 |
|
|
$ |
i 1,102,536 |
|
Purchases, including payments received in-kind |
|
|
i 24,892 |
|
|
|
i — |
|
|
|
i 24,892 |
|
Sales and paydowns of investments |
|
|
( i 67,715 |
) |
|
|
( i 1,227 |
) |
|
|
( i 68,942 |
) |
Amortization of premium and accretion of discount, net |
|
|
i 4,624 |
|
|
|
i — |
|
|
|
i 4,624 |
|
Net realized gains |
|
|
i 19 |
|
|
|
i — |
|
|
|
i 19 |
|
Net change in unrealized appreciation/(depreciation) |
|
|
( i 9,977 |
) |
|
|
( i 18,685 |
) |
|
|
( i 28,662 |
) |
Balance, March 31, 2023 |
|
$ |
i 1,006,788 |
|
|
$ |
i 27,679 |
|
|
$ |
i 1,034,467 |
|
Net change in unrealized appreciation/(depreciation) in investments held as of March 31, 2023 |
|
$ |
( i 8,278 |
) |
|
$ |
( i 10,692 |
) |
|
$ |
( i 18,970 |
) |
25
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
3. Investment Valuations and Fair Value Measurements (Continued)
The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the three months ended March 31, 2022:
|
|
Debt |
|
|
Equity |
|
|
Total |
|
|||
Balance, January 1, 2022 |
|
$ |
i 1,393,576 |
|
|
$ |
i 39,835 |
|
|
$ |
i 1,433,411 |
|
Purchases, including payments received in-kind |
|
|
i 74,525 |
|
|
|
i — |
|
|
|
i 74,525 |
|
Sales and paydowns of investments |
|
|
( i 95,456 |
) |
|
|
i — |
|
|
|
( i 95,456 |
) |
Amortization of premium and accretion of discount, net |
|
|
i 3,355 |
|
|
|
i — |
|
|
|
i 3,355 |
|
Net change in unrealized appreciation/depreciation |
|
|
( i 6,446 |
) |
|
|
( i 672 |
) |
|
|
( i 7,118 |
) |
Balance, March 31, 2022 |
|
$ |
i 1,369,554 |
|
|
$ |
i 39,163 |
|
|
$ |
i 1,408,717 |
|
Net change in unrealized appreciation/depreciation in investments held as of March 31, 2022 |
|
$ |
( i 5,415 |
) |
|
$ |
( i 672 |
) |
|
$ |
( i 6,087 |
) |
The Company did i i no / t have any transfers between levels during the three months ended March 31, 2023 and 2022.
Level 3 Valuation and Quantitative Information: i The following table summarizes the valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of March 31, 2023:
Investment Type |
|
Fair Value |
|
|
Valuation Technique |
|
Unobservable Input |
|
Range |
|
Weighted |
|
Impact to |
|
Debt |
|
$ |
i 721,137 |
|
|
Income Method |
|
Discount Rate |
|
i 9.3% to i 27.0% |
|
i 15.3% |
|
Decrease |
Debt |
|
$ |
i 33,621 |
|
|
Market Method |
|
EBITDA Multiple |
|
i 5.3x to i 6.3x |
|
N/A |
|
Increase |
|
|
|
|
|
Market Method |
|
Revenue Multiple |
|
i 0.8x to i 1.0x |
|
N/A |
|
Increase |
|
Debt |
|
$ |
i 94,738 |
|
|
Market Method |
|
EBITDA Multiple |
|
i 6.0x to i 8.0x |
|
N/A |
|
Increase |
Debt |
|
$ |
i 114,517 |
|
|
Market Method |
|
Revenue Multiple |
|
i 0.2x to i 0.9x |
|
N/A |
|
Increase |
Debt |
|
$ |
i 42,775 |
|
|
Income Method |
|
Discount Rate |
|
i 11.2% to i 12.5% |
|
i 11.9% |
|
Decrease |
|
|
|
|
|
Income Method |
|
Take Out Indication |
|
i 100.0% to i 100.0% |
|
N/A |
|
Increase |
|
Equity |
|
$ |
i 20,667 |
|
|
Market Method |
|
EBITDA Multiple |
|
i 6.0x to i 8.0x |
|
N/A |
|
Increase |
Equity |
|
$ |
i — |
|
|
Market Method |
|
Revenue Multiple |
|
i 0.5x to i 0.9x |
|
N/A |
|
Increase |
Equity |
|
$ |
i 7,012 |
|
|
Market Method |
|
EBITDA Multiple |
|
i 8.0x to i 9.0x |
|
N/A |
|
Increase |
|
|
|
|
|
Income Method |
|
Implied Volatility |
|
i 60.0% to i 60.0% |
|
N/A |
|
Increase |
|
|
|
|
|
|
|
|
Expected Term (in years) |
|
i 2.0 to i 2.0 |
|
N/A |
|
Increase |
|
* Weighted based on fair value
26
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
3. Investment Valuations and Fair Value Measurements (Continued)
The following table summarizes the valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of December 31, 2022:
Investment Type |
|
Fair Value |
|
|
Valuation |
|
Unobservable Input |
|
Range |
|
Weighted |
|
Impact to |
|
Debt |
|
$ |
i 859,467 |
|
|
Income Method |
|
Discount Rate |
|
i 9.6% to i 22.6% |
|
i 15.4% |
|
Decrease |
Debt |
|
$ |
i 27,840 |
|
|
Market Method |
|
EBITDA Multiple |
|
i 6.0x to i 7.0x |
|
N/A |
|
Increase |
|
|
|
|
|
Market Method |
|
Revenue Multiple |
|
i 0.8x to i 1.0x |
|
N/A |
|
Increase |
|
Debt |
|
$ |
i 55,134 |
|
|
Market Method |
|
EBITDA Multiple |
|
i 5.8x to i 8.0x |
|
N/A |
|
Increase |
Debt |
|
$ |
i 112,504 |
|
|
Market Method |
|
Revenue Multiple |
|
i 0.2x to i 0.8x |
|
N/A |
|
Increase |
Equity |
|
$ |
i 29,432 |
|
|
Market Method |
|
EBITDA Multiple |
|
i 5.8x to i 7.5x |
|
N/A |
|
Increase |
Equity |
|
$ |
i — |
|
|
Market Method |
|
Revenue Multiple |
|
i 0.5x to i 0.8x |
|
N/A |
|
Increase |
Equity |
|
$ |
i 8,939 |
|
|
Market Method |
|
EBITDA Multiple |
|
i 7.8x to i 8.8x |
|
N/A |
|
Increase |
|
|
|
|
|
Income Method |
|
Implied Volatility |
|
i 60.0% to i 60.0% |
|
N/A |
|
Increase |
|
|
|
|
|
|
|
|
Expected Term (in years) |
|
i 2.3 to i 2.3 |
|
N/A |
|
Increase |
|
Equity |
|
$ |
i 9,220 |
|
|
Income Method |
|
Implied Volatility |
|
i 60.0% to i 60.0% |
|
N/A |
|
Increase |
|
|
|
|
|
|
|
Expected Term (in years) |
|
i 0.2 to i 0.2 |
|
N/A |
|
Increase |
|
* Weighted based on fair value
The Company generally utilizes the midpoint of a valuation range provided by an external, independent valuation firm in determining fair value.
/27
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
4. Agreements and Related Party Transactions
Advisory Agreement: On December 29, 2017, the Company entered into the Investment Advisory and Management Agreement (the “Advisory Agreement”) with the Adviser, a registered investment adviser under the Investment Advisers Act of 1940, as amended. The Advisory Agreement became effective upon its execution. Unless earlier terminated, the Advisory Agreement will remain in effect for a period of i two years and will remain in effect from year to year thereafter if approved annually by (i) the vote of the Board, or by the vote of a majority of the Company’s outstanding voting securities and (ii) the vote of a majority of the Board who are not “interested persons” (as defined in Section 2(a)(19) of the 1940 Act) of the Company, the Adviser or any of their respective affiliates (the “Independent Directors”). The Advisory Agreement was most recently approved to remain in effect on August 10, 2022. The Advisory Agreement will automatically terminate in the event of an assignment by the Adviser.
The Advisory Agreement may be terminated by either party, by vote of the Company’s Board, or by a vote of the majority of the Company’s outstanding voting units, without penalty upon not less than 60 days’ prior written notice to the applicable party. If the Advisory Agreement is terminated according to this paragraph, the Company will pay the Adviser a pro-rated portion of the Management Fee and Incentive Fee (each as defined below). The Advisory Agreement was reapproved by the Company’s Board on August 10, 2022.
Pursuant to the Advisory Agreement, the Adviser will:
The Company pays to the Adviser, quarterly in arrears, a management fee in cash (the “Management Fee”) calculated as follows: i i i 0.375 / / % (i.e., i 1.50% per annum) of the average gross assets of the Company on a consolidated basis, with the average determined based on the gross assets of the Company as of the end of the three most recently completed calendar months. “Gross assets” means the amortized cost of portfolio investments of the Company (including portfolio investments purchased with borrowed funds and other forms of leverage, such as Preferred Units, public and private debt issuances, derivative instruments, repurchase agreements and other similar instruments or arrangements) that have not been sold, distributed to the Members, or written off for tax purposes (but reduced by any portion of such cost basis that has been written down to reflect a permanent impairment of value of any portfolio investment), and excluding cash and cash equivalents. The Management Fee payable for any partial month or quarter will be appropriately pro-rated. The Adviser may defer its right to receive current payment of such fee until the Company is notified otherwise.
28
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
4. Agreements and Related Party Transactions (Continued)
For the three months ended March 31, 2023, Management Fees incurred were $ i 4,055 of which $ i 4,055 remained payable as of March 31, 2023. For the three months ended March 31, 2022, Management Fees incurred amounted to $ i 5,236 of which $ i 5,236 remained payable at March 31, 2022.
In addition, the Adviser will receive an incentive fee (the “Incentive Fee”) as follows:
i The Incentive Fee is calculated on a cumulative basis and the amount of the Incentive Fee payable in connection with any distribution (or deemed distribution) will be determined in accordance with the foregoing formula each time amounts are to be distributed to the Unitholders.
For purposes of calculating the Incentive Fee, aggregate contributions shall not include Earnings Balancing Contributions or Late-Closer Contributions, and the distributions to Unitholders shall not include distributions attributable to Late-Closer Contributions. Earnings Balancing Contributions (as such terms are defined in the Company’s LLC Agreement) received by the Company will not be treated as amounts distributed to Unitholders for purposes of calculating the Incentive Fee. In addition, if distributions to which a Defaulting Member otherwise would have been entitled have been withheld pursuant to 6.2.4 of the LLC Agreement, the amounts so withheld shall be treated for such purposes as having been distributed to such Defaulting Member (as that term is defined in the LLC Agreement). The amount of any distribution of securities made in kind shall be equal to the fair market value of those securities at the time of distribution determined pursuant to 13.4 of the LLC Agreement.
29
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
4. Agreements and Related Party Transactions (Continued)
If the Advisory Agreement terminates early for any reason other than (i) the Adviser voluntarily terminating the agreement or (ii) the Company terminating the agreement for cause (as set out in the Advisory Agreement), the Company will be required to pay the Adviser a final incentive fee payment (the “Final Incentive Fee Payment”). The Final Incentive Fee Payment will be calculated as of the date the Advisory Agreement is so terminated and will equal the amount of Incentive Fee that would be payable to the Adviser if (A) all of the Company’s investments were liquidated for their current value (but without taking into account any unrealized appreciation of any portfolio investment), and any unamortized deferred portfolio investment-related fees were deemed accelerated, (B) the proceeds from such liquidation were used to pay all of the Company’s outstanding liabilities, and (C) the remainder were distributed to Unitholders and paid as Incentive Fee in accordance with the “waterfall” (i.e., clauses (a) through (d)) described above for determining the amount of the Incentive Fee. The Company will make the Final Incentive Fee Payment in cash on or immediately following the date the Advisory Agreement is so terminated.
Adviser Return Obligation: After the Company has made its final distribution of assets in connection with its dissolution, if the Adviser has received aggregate payments of Incentive Fees in excess of the amount the Adviser was entitled to receive pursuant to “Incentive Fee” above, then the Adviser will return to the Company, on or before 90 days after such final distribution of assets, an amount equal to such excess (the “Adviser Return Obligation”). Notwithstanding the preceding sentence, in no event will the Adviser be required to return to the Company an amount greater than the aggregate Incentive Fees paid to the Adviser, reduced by the excess of (a) the aggregate federal, state and local income tax liability the Adviser incurred in connection with the payment of such Incentive Fees, over (b) an amount equal to the U.S. federal and state tax benefits available to the Adviser by virtue of the payment made by the Adviser pursuant to its Adviser Return Obligation.
Administration Agreement: On September 25, 2018, the Company entered into an Amended and Restated Administration Agreement (the “Administration Agreement”) with TCW Asset Management Company LLC (in such capacity, the “Administrator”), which amended and restated the Administration Agreement between the Company and the Administrator entered into on April 16, 2018. Under the Administration Agreement, the Administrator (or one or more delegated service providers) will oversee the maintenance of the Company’s financial records and otherwise assist with the Company’s compliance with regulations applicable to a business development company under the Investment Company Act of 1940, as amended, and a regulated investment company under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended; monitor the payment of the Company’s expenses; oversee the performance of administrative and professional services rendered to the Company by others; be responsible for the financial and other records that the Company is required to maintain; prepare and disseminate reports to Unitholders and reports and other materials to be filed with the SEC or other regulators; assist the Company in determining and publishing (as necessary or appropriate) its net asset value; oversee the preparation and filing of tax returns; generally oversee the payment of expenses; and provide such other services as the Administrator, subject to review of the Company’s Board, shall from time to time determine to be necessary or useful to perform its obligations under the Administration Agreement. Payments under the Administration Agreement will be equal to an amount that reimburses the Administrator for the costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities under the Administration Agreement. The Administrator shall seek such reimbursement from the Company no more than once during any calendar year and shall only seek such reimbursement when all Company Expenses (as defined below) for such calendar year have been paid or accrued. Amounts paid pursuant to the Administration Agreement are subject to the annual cap on Company Expenses (as defined below), as described more fully below.
30
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
4. Agreements and Related Party Transactions (Continued)
The Company, and indirectly the Unitholders, will bear all costs, expenses and liabilities, other than Adviser Operating Expenses (as defined below) (which shall be borne by the Adviser), in connection with the organization, operations, administration and transactions of the Company (“Company Expenses”). Company Expenses shall include, without limitation: (a) organizational expenses and expenses associated with the issuance of the Units; (b) expenses of calculating the Company’s net asset value (including the cost and expenses of any independent valuation firm); (c) fees payable to third parties, including agents, consultants, attorneys or other advisors, relating to, or associated with, evaluating and making investments; (d) expenses incurred by the Adviser or the Administrator payable to third parties, including agents, consultants, attorneys or other advisors, relating to or associated with monitoring the financial and legal affairs for the Company, providing administrative services, monitoring or administering the Company’s investments and performing due diligence reviews of prospective investments and the corresponding portfolio companies; (e) costs associated with the Company’s reporting and compliance obligations under the Investment Company Act of 1940, the Securities Exchange Act of 1934, as amended, and other applicable federal or state securities laws; (f) fees and expenses incurred in connection with debt incurred to finance the Company’s investments or operations, and payment of interest and repayment of principal on such debt; (g) expenses related to sales and purchases of Units and other securities; (h) Management Fees and Incentive Fees; (i) administrator fees, if any, payable under the Administration Agreement; (j) transfer agent, sub-administrator and custodial fees; (k) expenses relating to the issue, repurchase and transfer of Units to the extent not borne by the relevant transferring Unitholders and/or assignees; (l) federal and state registration fees; (m) federal, state and local taxes and other governmental charges assessed against the Company; (n) independent directors’ fees and expenses and the costs associated with convening a meeting of the Company’s board of directors or any committee thereof; (o) fees and expenses and the costs associated with convening a meeting of the Unitholders or holders of any Preferred Units of the Company, as well as the compensation of an investor relations professional responsible for the coordination and administration of the foregoing; (p) costs of any reports, proxy statements or other notices to Unitholders, including printing and mailing costs; (q) costs and expenses related to the preparation of the Company’s consolidated financial statements and tax returns; (r) the Company’s allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; (s) direct costs and expenses of administration, including printing, mailing, long distance telephone, and copying; (t) independent auditors and outside legal costs, including legal costs associated with any requests for exemptive relief, “no-action” positions or other guidance sought from a regulator, pertaining to the Company; (u) compensation of other third party professionals to the extent they are devoted to preparing the Company’s consolidated financial statements or tax returns or providing similar “back office” financial services to the Company; (v) Adviser costs and expenses (excluding travel) in connection with identifying and investigating investment opportunities for the Company, monitoring the investments of the Company and disposing of any such investments; (w) portfolio risk management costs; (x) commissions or brokerage fees or similar charges incurred in connection with the purchase or sale of securities (including merger fees); (y) costs and expenses attributable to normal and extraordinary investment banking, commercial banking, accounting, auditing, appraisal, valuation, administrative agent activities, custodial and registration services provided to the Company, including in each case services with respect to the proposed purchase or sale of securities by the Company that are not reimbursed by the issuer of such securities or others (whether or not such purchase or sale is consummated); (z) costs of amending, restating or modifying the LLC Agreement or Advisory Agreement or related documents of the Company or related entities; (aa) fees, costs, and expenses incurred in connection with the termination, liquidation or dissolution of the Company or related entities and (bb) all other properly and reasonably chargeable expenses incurred by the Company or the Administrator in connection with administering the Company’s business. Notwithstanding the foregoing, in the event of a Reorganization (as defined in the LLC Agreement) that results in a Public Company (as defined in the LLC Agreement) or an Extension Fund (as defined in the LLC Agreement), including a Reorganization (as defined in the LLC Agreement) pursuant to which the Company becomes the Public Company or the Extension Fund, the fees, costs and expenses associated with any such restructuring, initial public offering, listing of equity securities or reorganization will be borne appropriately by the Public Company and the Extension Fund (and indirectly only by Unitholders that elect to become investors in the Public Company or the Extension Fund), as the case may be, and no others will directly or indirectly bear such fees, costs or expenses.
31
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
4. Agreements and Related Party Transactions (Continued)
However, the Company will not bear (a) more than an amount equal to i 10 basis points of investors’ aggregate Commitments for organizational expenses and offering expenses in connection with the offering of Units through the date that is nine months after the Initial Closing Date, as it may be extended by the Adviser, and (b) more than an amount equal to i 12.5 basis points of aggregate Commitments computed annually for Company Expenses (the “Expense Cap”); provided, that, any amount by which actual annual expenses in (b) exceed the 12.5 basis point limit shall be carried over to the next year, without limitation, as additional expense until the earlier of the Reorganization (as defined in the LLC Agreement) or the dissolution of the Company, with any partial year assessed on a pro rata basis; and provided, further, that in determining the Company Expenses subject to the 12.5 basis point limit in (b), the following expenses shall be excluded and shall be borne by the Company as incurred without regard to the 12.5 basis point limit in (b): the Management Fee, the Incentive Fee, organizational and offering expenses (which are subject to the separate cap), amounts incurred in connection with the Company’s borrowings (including interest, bank fees, legal fees and other transactional expenses arising out of or related to any borrowing or borrowing facility and similar costs), transfer agent fees, federal, state and local taxes and other governmental charges assessed against the Company, out-of-pocket expenses of calculating the Company’s net asset value (including the cost and expenses of any independent valuation firm engaged for that purpose and the costs and expenses of the valuation of the Company’s portfolio investments performed by the Company’s independent auditors in order to comply with applicable Public Company Accounting Oversight Board standards), out-of-pocket costs and expenses incurred in connection with arranging or structuring investments and their ongoing operations (including expenses and liabilities related to the formation and ongoing operations of any special purpose entity or entities in connection with an investment), out-of-pocket legal costs associated with any requests for exemptive relief, “no-action” positions or other guidance sought from a regulator pertaining to the Company, out-of-pocket costs and expenses relating to any Reorganization or liquidation of the Company, and any extraordinary expenses (such as litigation expenses and indemnification payments). Notwithstanding the foregoing, in no event will the Company carryforward to future periods the amount by which actual annual Company Expenses for a year exceed the 12.5 basis point limit for more than i three years from the date on which such expenses were reimbursed.
“Adviser Operating Expenses” means overhead and operating and administrative expenses incurred by or on behalf of the Adviser or any of its affiliates, including the Company, in connection with maintaining and operating the Adviser’s office, including salaries and other compensation (including compensation due to its officers), rent, routine office equipment expense and liability and insurance premiums (other than those incurred in maintaining fidelity bonds and indemnitee insurance policies), in furtherance of providing supervisory investment management services for the Company. Adviser Operating Expenses also include any expenses incurred by the Adviser or its Affiliates in connection with the Adviser’s registration as an investment adviser under the Investment Advisers Act of 1940, as amended, or with its compliance as a registered investment adviser thereunder.
All Adviser Operating Expenses and all expenses of the Company that the Company will not bear, as set forth above, will be borne by the Adviser or its affiliates.
/32
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
5. Commitments and Contingencies
The Company had the following unfunded commitments and unrealized depreciation by investment as of March 31, 2023 and December 31, 2022:
|
|
|
|
|
|
|
||||||||||||
Unfunded Commitments |
|
Maturity/ |
|
Amount |
|
|
Unrealized |
|
|
Amount |
|
|
Unrealized |
|
||||
AGY Holdings Corp. |
|
i September 2025 |
|
$ |
i 1,937 |
|
|
$ |
i 130 |
|
|
$ |
i 4,135 |
|
|
$ |
i 203 |
|
Altern Marketing LLC |
|
i October 2024 |
|
|
i 3,208 |
|
|
|
i 19 |
|
|
|
i 4,686 |
|
|
|
i 33 |
|
Bendon Inc. |
|
i December 2025 |
|
|
i 6,907 |
|
|
|
i 356 |
|
|
|
i 7,263 |
|
|
|
i 326 |
|
Centric Brands Inc. |
|
i October 2024 |
|
|
i 2,050 |
|
|
|
i — |
|
|
|
i 2,306 |
|
|
|
i — |
|
Encompass Digital Media, Inc. |
|
i September 2023 |
|
|
i 614 |
|
|
|
i 93 |
|
|
|
i 794 |
|
|
|
i 93 |
|
Greenfield World Trade, Inc. |
|
i June 2023 |
|
|
i 4,653 |
|
|
|
i 33 |
|
|
|
i 4,685 |
|
|
|
i — |
|
Hometown Food Company |
|
i August 2023 |
|
|
i 5,881 |
|
|
|
i — |
|
|
|
i 4,705 |
|
|
|
i — |
|
Karman Holdings LLC (fka Spaceco Holdings LLC) |
|
i December 2025 |
|
|
i 956 |
|
|
|
i 28 |
|
|
|
i 1,147 |
|
|
|
i 28 |
|
KBP Brands, LLC (fka KBP Investments LLC) |
|
i May 2027 |
|
|
i 402 |
|
|
|
i 35 |
|
|
|
i 437 |
|
|
|
i 32 |
|
Mondee Holdings LLC |
|
i December 2024 |
|
|
i — |
|
|
|
i — |
|
|
|
i 8,613 |
|
|
|
i — |
|
Rapid Displays, Inc. |
|
i April 2026 |
|
|
i 1,706 |
|
|
|
i 64 |
|
|
|
i 1,770 |
|
|
|
i 25 |
|
UniTek Acquisition, Inc. |
|
i August 2023 |
|
|
i — |
|
|
|
i — |
|
|
|
i 571 |
|
|
|
i 14 |
|
WDE TorcSill Holdings LLC |
|
i October 2024 |
|
|
i 8 |
|
|
|
i — |
|
|
|
i 313 |
|
|
|
i 17 |
|
Total |
|
|
|
$ |
i 28,322 |
|
|
$ |
i 758 |
|
|
$ |
i 41,425 |
|
|
$ |
i 771 |
|
From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of March 31, 2023, the Company is not aware of any pending or threatened litigation.
In the normal course of business, the Company enters into contracts which provide a variety of representations and warranties, and that provide general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.
/
33
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
6. Members' Capital
The Company’s Unit activity for the three months ended March 31, 2023 and 2022, was as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
Units at beginning of period |
|
|
i 13,734,010 |
|
|
|
i 13,734,010 |
|
Units issued and committed at end of period |
|
|
i 13,734,010 |
|
|
|
i 13,734,010 |
|
i i i i No / / / deemed distributions and contributions were processed during the three months ended March 31, 2023 and 2022.
/7. Credit Facilities
On May 10, 2018, the Company entered into a Revolving Credit Agreement (the “Natixis Credit Agreement”) among the Company, as borrower, and Natixis, New York Branch (“Natixis”), as administrative agent and the committed lenders, conduit lenders and funding agents. The Natixis Credit Agreement provided for a revolving credit line (the “Natixis Revolving Credit Facility”) of up to $ i 150,000 (the “Natixis Maximum Commitment”), subject to the lesser of the “Natixis Borrowing Base” assets or the Natixis Maximum Commitment. The Natixis Borrowing Base assets equal the sum of a percentage of unfunded commitments from certain classes of eligible investors in the Company (the “Natixis Available Commitment”).
The Natixis Maximum Commitment may be periodically increased in amounts designated by the Company, up to an aggregate amount of $ i 1 billion. The maturity date of the Natixis Credit Agreement was i May 10, 2021. On i May 10, 2021, the Company exercised its option to extend the maturity date of the Natixis Credit Agreement to i May 9, 2022. On March 15, 2022, the Company exercised its last available option to extend the Natixis Credit Agreement maturity date from i May 9, 2022 to i May 9, 2023. Borrowings under the Natixis Credit Agreement bear interest at a rate equal to either (a) a base rate calculated in a customary manner plus i 0.75% or (b) an adjusted eurodollar rate calculated in a customary manner plus i 1.75%. As of December 31, 2020, the Natixis Maximum Commitment was $ i 280,000. On March 10, 2021, the Natixis Maximum Commitment was reduced to $ i 250,000.
The Natixis Revolving Credit Facility is secured by a first priority security interest, subject to customary exceptions, in (i) all of the capital commitments of the investors in the Company, (ii) the Company’s right to make capital calls, receive payment of capital contributions from the investors and enforce payment of the capital commitments and capital contributions under the Company’s operating agreement and (iii) a cash collateral account into which the capital contributions from the investors are made. The Natixis Revolving Credit Facility may be terminated, and any outstanding amounts thereunder may become due and payable, should the Company fail to satisfy certain covenants. As of March 31, 2023, the Company was in compliance with such covenants.
As of March 31, 2023 and December 31, 2022, the Natixis Borrowing Base assets were more than the Natixis Maximum Commitment. A summary of amounts outstanding and available under the Natixis Revolving Credit Facility as of March 31, 2023 and December 31, 2022 was as follows:
Natixis Revolving Credit Facility |
|
Maximum |
|
|
Borrowings |
|
|
Available |
|
|||
As of March 31, 2023 |
|
$ |
i 250,000 |
|
|
$ |
i — |
|
|
$ |
i 250,000 |
|
As of December 31, 2022 |
|
$ |
i 250,000 |
|
|
$ |
i — |
|
|
$ |
i 250,000 |
|
On January 29, 2019, TCW DL VII Financing LLC (the “Borrower” or “TCW DL VII Financing”), a newly-formed, wholly-owned, special purpose financing subsidiary of the Company, entered into a senior secured credit facility (the “PNC Credit Facility” and together with the Natixis Revolving Credit Facility, the “Credit Facilities”) pursuant to a credit and security agreement (the “PNC Credit Agreement”) with PNC Bank, National Association (“PNC”), as facility agent, the lenders from time to time party thereto, and State Street Bank and Trust Company, as collateral agent.
34
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
7. Credit Facilities (Continued)
Under the PNC Credit Facility, the lenders have agreed to extend credit to the Borrower in an aggregate principal amount of up to $ i 400,000 of revolving and term loans (the “PNC Maximum Commitment”), subject to compliance with a borrowing base (the “PNC Borrowing Base”). The PNC Maximum Commitment may be periodically increased in amounts designated by the Borrower up to an aggregate principal amount of $ i 900,000, subject to lender consent and obtaining commitments for the increase. The Borrower may make borrowings of (i) a revolving loan (the “PNC Revolving Credit Facility” and together with the Natixis Revolving Credit Facility, the “Revolving Credit Facilities”) under the PNC Credit Facility during the period commencing January 29, 2019 and ending on January 29, 2022 and (ii) a term loan (the “PNC Term Loan”) under the PNC Credit Facility during the period which commenced on January 29, 2019 and ended on January 29, 2020, unless, there is an earlier termination of the PNC Credit Facility or event of default thereunder. The PNC Credit Facility will mature on i January 29, 2024. Loans under the PNC Credit Facility bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) i three-month LIBOR plus the facility margin of i 2.30% per annum or (ii) the Base Rate plus the facility margin of i 2.30% per annum.
On April 11, 2019, the Borrower amended and restated the PNC Credit Agreement (as amended, the “Amended PNC Credit Agreement”) for the PNC Credit Facility. The Amended PNC Credit Agreement, among other things, (a) increased the total commitments under the PNC Credit Facility from $ i 400,000 to $ i 600,000 (the “Amended PNC Maximum Commitment”) and (b) made certain modifications to the calculation of the borrowing base under the prior facility, including the eligibility requirements of collateral obligations pledged under the PNC Credit Facility and loan portfolio concentration limits.
On March 17, 2020, the Borrower amended and restated the Amended PNC Credit Agreement (as further amended the “Second Amended PNC Credit Agreement”). The Second Amended PNC Credit Agreement, among other things, increased the total commitments under the PNC Credit Facility from $ i 600,000 to $ i 795,000 (the “Second Amended PNC Maximum Commitment”). The Second Amended PNC Maximum Commitment may be periodically increased in amounts designated by the Borrower up to an aggregate principal amount of $ i 900,000, subject to lender consent and obtaining commitments for the increase. The Borrower may make borrowings of (i) revolving loans under the PNC Credit Facility during the period commencing January 29, 2019 and ending on January 29, 2022 and (ii) term loans under the PNC Credit Facility during the period commencing January 29, 2019 and ending on March 17, 2020, unless, in the case of (i) and (ii), there is an earlier termination of the PNC Credit Facility or event of default thereunder. On June 19, 2020, the Second Amended PNC Maximum Commitment was increased from $ i 795,000 to $ i 825,000. On November 15, 2021, the Second Amended PNC Maximum Commitment was decreased from $ i 825,000 to $ i 700,000.
On January 31, 2022 (the first business day after January 29, 2022), the Borrower's ability to make borrowings under the PNC Revolving Credit Facility expired and the then outstanding PNC Revolving Credit Facility borrowings of $ i 295,500 converted into outstanding borrowings under the PNC Term Loan. In connection with such conversion, repayments on outstanding borrowings under the PNC Term Loan will correspondingly reduce the PNC Maximum Commitment. The PNC Credit Facility will mature on i January 29, 2024. Loans under the PNC Credit Facility will bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) three-month LIBOR plus the facility margin of i 2.30% per annum or (ii) the Base Rate plus the facility margin of i 2.30% per annum.
On October 27, 2022, the Borrower amended and restated the Amended PNC Credit Agreement (as further amended the “Third Amended PNC Credit Agreement”). The Third Amended PNC Credit Agreement, among other things, removed reference to LIBOR rates and the related definitions and added reference to SOFR rates and the related definitions in which the Borrower may now elect a fluctuating rate of interest that is based on SOFR rather than LIBOR. Loans under the PNC Credit Facility will bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) SOFR rate plus the sum of the facility margin of i 2.30% and SOFR adjustment per annum or (ii) the Base Rate plus the facility margin of i 2.30% per annum.
35
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
7. Credit Facilities (Continued)
On January 10, 2023, the Company entered into a Sixth Amendment to the Revolving Credit Agreement with Natixis (the "Sixth Amended Revolving Credit Agreement"). The Sixth Amended Revolving Credit Agreement replaces the Eurocurrency Rate with a Daily Simple SOFR Rate, Term SOFR Rate and Adjusted Term SOFR Rate (each as defined in the Sixth Amended Revolving Credit Agreement) for purposes of calculating interest on the loan. Each Term SOFR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Adjusted Term SOFR Rate for such Interest Period plus the interest rate spread or "Applicable Margin." Each Daily SOFR Loan will bear interest on the outstanding principal amount thereof at a rate per annum equal to Daily Simple SOFR plus the Applicable Margin. The Term SOFR Loan and Daily SOFR Loan have an Applicable Margin of i 1.75%.
The Borrower’s obligations under the PNC Credit Facility are secured by a first priority security interest in all of the assets of the Borrower, including its portfolio of loans that has been contributed by the Company to the Borrower in exchange for i 100% of the membership interests of the Borrower and any payments received in respect of such loans. The Company may contribute or sell to the Borrower additional loans from time to time after the closing date, which shall be pledged in favor of the lenders under the PNC Credit Facility.
Under the PNC Credit Facility, the Borrower has made customary representations and warranties and is required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar credit facilities. The PNC Credit Facility also includes events of default that are customary for similar credit facilities. As of March 31, 2023, the Borrower was in compliance with such covenants.
Borrowings of the Borrower are non-recourse to the Company but are consolidated in the Company’s consolidated financial statements and considered borrowings of the Company for purposes of complying with the asset coverage requirements under the Investment Company Act of 1940, as amended.
Borrowings under the PNC Term Loan as of March 31, 2023 and December 31, 2022 were $ i 300,000 and $ i 337,000, respectively.
The Company incurred financing costs of $ i 3,463 and $ i 4,433, in connection with the Natixis Credit Agreement and the PNC Credit Agreement, respectively. In addition, the Company incurred an additional $ i 2,070 and $ i 1,531 in financing costs in connection with the Amended and Second Amended PNC Credit Agreement, respectively. Lastly, the Company incurred $ i 255 in financing costs associated with the June 19, 2020 upsize of the PNC Credit Facility.
36
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
7. Credit Facilities (Continued)
The Company incurred $ i 629 in fees associated with the May 10, 2021 extension of the Natixis Credit Agreement. Costs associated with the Revolving Credit Facilities were primarily recorded by the Company as deferred financing costs on its Consolidated Statements of Assets and Liabilities and the costs are being amortized over the respective term of the Natixis Revolving Credit Facility and PNC Revolving Credit Facility. As of March 31, 2023 and December 31, 2022, $ i 66 and $ i 221, respectively, of such deferred financing costs had yet to be amortized. Costs associated with the PNC Term Loan are deferred and amortized over the term of the PNC Term Loan. Such deferred financing costs are netted against the carrying value of the PNC Term Loan on the Company’s Consolidated Statements of Assets and Liabilities. As of March 31, 2023 and December 31, 2022, $ i 1,214 and $ i 1,576, respectively, of such deferred financing costs have yet to be amortized.
A reconciliation of amounts presented on the Company’s Consolidated Statements of Assets and Liabilities versus amounts outstanding on the PNC Term Loan is as follows:
|
|
As of March 31, 2023 |
|
|
As of December 31, 2022 |
|
||
Principal amount outstanding on PNC Term Loan |
|
$ |
i 300,000 |
|
|
$ |
i 337,000 |
|
Deferred financing costs |
|
|
( i 1,214 |
) |
|
|
( i 1,576 |
) |
PNC Term Loan (as presented on the Consolidated Statements of Assets and Liabilities) |
|
$ |
i 298,786 |
|
|
$ |
i 335,424 |
|
The carrying amounts of the Credit Facilities, which are categorized as Level 2 within the fair value hierarchy as of March 31, 2023 and 2022, approximates their respective fair values. Valuation techniques and significant inputs used to determine fair value include Company details; credit, market and liquidity risk and events; financial health of the Company; place in the capital structure; interest rate; and the Credit Facilities’ terms and conditions.
The summary information regarding the Credit Facilities for the three months ended March 31, 2023 and 2022 was as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
Credit Facilities interest expense |
|
$ |
i 5,555 |
|
|
$ |
i 3,486 |
|
Unused commitment fees |
|
|
i 156 |
|
|
|
i 215 |
|
Administrative fees |
|
|
i 50 |
|
|
|
i — |
|
Amortization of deferred financing costs |
|
|
i 516 |
|
|
|
i 1,388 |
|
Total |
|
$ |
i 6,277 |
|
|
$ |
i 5,089 |
|
Weighted average interest rate |
|
|
i 7.03 |
% |
|
|
i 2.54 |
% |
Average outstanding balance |
|
$ |
i 316,033 |
|
|
$ |
i 549,000 |
|
P[
8. Repurchase Obligation
In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements with Macquarie US Trading LLC (“Macquarie”), whereby the Company sells to Macquarie an investment that it holds and concurrently enters into an agreement to repurchase the same investment at an agreed-upon price at a future date, not to exceed 90-days from the date it was sold (each, a “Macquarie Transaction”).
37
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
8. Repurchase Obligation (continued)
In accordance with ASC 860, Transfers and Servicing, these Macquarie Transactions meet the criteria for secured borrowings. Accordingly, the investment financed by a Macquarie Transaction remains on the Company’s Consolidated Statements of Assets and Liabilities as an asset, and the Company records a liability to reflect its repurchase obligation to Macquarie (the “Repurchase Obligation”). The Repurchase Obligation is secured by the respective investment that is the subject of the repurchase agreement. Interest expense associated with the Repurchase Obligation is reported on the Company’s Consolidated Statements of Operations within Other expenses.
i i No / repurchase agreements were entered into or settled during the three months ended March 31, 2023 and 2022.
The Company had i i no / outstanding Repurchase Obligations as of March 31, 2023 and December 31, 2022.
/9. Income Taxes
The Company has elected to be regulated as a BDC under the 1940 Act and has elected to be treated as a RIC under the Code. So long as the Company maintains its status as a RIC, it will generally not pay corporate-level U.S. Federal income or excise taxes on any ordinary income or capital gains that it distributes at least annually to its Unitholders as dividends. The Company elected to be taxed as a RIC in 2018. The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reversed and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof.
Federal Income Taxes: It is the policy of the Company to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and distribute all of its net taxable income and any net realized gains on investments to its shareholders. Therefore, i no federal income tax provision is required.
As of March 31, 2023 and December 31, 2022, the Company’s aggregate investment unrealized appreciation and depreciation for federal income tax purposes were as follows:
|
|
As of March 31, 2023 |
|
|
As of December 31, 2022 |
|
||
Cost of investments for federal income tax purposes |
|
$ |
i 1,093,710 |
|
|
$ |
i 1,139,662 |
|
Unrealized appreciation |
|
$ |
i 39,518 |
|
|
$ |
i 48,979 |
|
Unrealized depreciation |
|
$ |
( i 52,911 |
) |
|
$ |
( i 47,861 |
) |
Net unrealized (depreciation)/appreciation on investments |
|
$ |
( i 13,393 |
) |
|
$ |
i 1,118 |
|
The Company did i not have any unrecognized tax benefits as of December 31, 2022, nor were there any increases or decreases in unrecognized tax benefits for the period then ended; therefore, i no interest or penalties were accrued. The Company is subject to examination by the U.S federal and state tax authorities for returns filed for the prior i two years.
/38
TCW DIRECT LENDING VII LLC
Notes to Consolidated Financial Statements (Unaudited) (Continued)
(Dollar amounts in thousands, except for unit data)
10. Financial Highlights
Selected data for a unit outstanding throughout the three months ended March 31, 2023 and 2022 is presented below.
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
2023(1) |
|
|
2022(1) |
|
||
Net Asset Value Per Unit (accrual base), Beginning of Period |
|
$ |
i 66.04 |
|
|
$ |
i 77.81 |
|
Income from Investment Operations: |
|
|
|
|
|
|
||
Net investment income |
|
|
i 2.05 |
|
|
|
i 1.71 |
|
Net realized and unrealized gain (loss) |
|
|
( i 1.45 |
) |
|
|
( i 0.58 |
) |
Total income from investment operations |
|
|
i 0.60 |
|
|
|
i 1.13 |
|
Net Asset Value Per Unit (accrual base), End of Period |
|
$ |
i 66.64 |
|
|
$ |
i 78.94 |
|
Unitholder Total Return(2)(3) |
|
|
i 1.01 |
% |
|
|
i 1.66 |
% |
Unitholder IRR before incentive fees(4) |
|
|
i 11.64 |
% |
|
|
i 12.19 |
% |
Unitholder IRR after all fees and expenses(4) |
|
|
i 9.63 |
% |
|
|
i 9.98 |
% |
Ratios and Supplemental Data |
|
|
|
|
|
|
||
Members’ Capital, end of period |
|
$ |
i 749,940 |
|
|
$ |
i 918,854 |
|
Units outstanding, end of period |
|
|
i 13,734,010 |
|
|
|
i 13,734,010 |
|
Ratios based on average net assets of Members’ Capital: |
|
|
|
|
|
|
||
Ratio of total expenses to average net assets(5) |
|
|
i 7.14 |
% |
|
|
i 6.67 |
% |
Ratio of financing cost to average net assets(3) |
|
|
i 0.84 |
% |
|
|
i 0.56 |
% |
Ratio of net investment income to average net assets(5) |
|
|
i 15.21 |
% |
|
|
i 10.46 |
% |
Ratio of incentive fees to average net assets(5) |
|
|
i 1.12 |
% |
|
|
i 1.73 |
% |
Credit facilities payable |
|
|
i 298,786 |
|
|
|
i 540,525 |
|
Asset coverage ratio |
|
|
i 3.50 |
|
|
|
i 2.69 |
|
Portfolio turnover rate(3) |
|
|
i 1.21 |
% |
|
|
i 4.64 |
% |
11. Subsequent Events
The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no subsequent events that require recognition or disclosure in these consolidated financial statements.
39
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report on Form 10-Q. Some of the statements in this report (including in the following discussion) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or future performance or financial condition of TCW Direct Lending VII LLC. For simplicity, this report uses the terms “Company,” “we,” “us,” and “our” to refer to TCW Direct Lending VII LLC and where appropriate in the context, its wholly owned subsidiaries.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation:
40
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, some of those assumptions are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, the forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended the (“1934 Act”), which preclude civil liability for certain forward-looking statements, do not apply to the forward-looking statements in this report because we are an investment company.
Overview
We were formed on May 23, 2017 as a limited liability company under the laws of the State of Delaware. We conducted a private offering of our common limited liability company units (the “Units”) to investors in reliance on exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”).
On August 18, 2017 (“Inception Date”), we sold and issued 10 Units at an aggregate purchase price of $1,000 to our investment adviser, TCW Asset Management Company LLC, an affiliate of the TCW Group, Inc.
On December 29, 2017, we filed an election to be regulated as a BDC under the 1940 Act. We elected, and intend to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. As a BDC and a RIC, we are required to comply with certain regulatory requirements.
On April 13, 2018 (the “Initial Closing Date”), we began accepting subscription agreements from investors for the private sale of our Units and on January 14, 2019, we completed our fourth and final closing sale of our Units. We have sold 13,734,010 Units for an aggregate offering price of approximately $1.4 billion. Each Unitholder is obligated to contribute capital equal to their Commitment and each Unit’s Commitment obligation is $100.00 per Unit. The sale of the Units was made pursuant to subscription agreements entered into by us and each investor. Under the terms of the subscription agreements, we may draw down all or any portion of the undrawn commitment with respect to each Unit generally upon at least ten business days’ prior written notice to the unitholders. The amount of capital that remains to be drawn down and contributed is referred to as an “Undrawn Commitment.”
We commenced operations during the second quarter of fiscal year 2018.
We have several wholly-owned subsidiaries, each a single member Delaware limited liability company. On March 21, 2022, we formed our fourth wholly-owned subsidiary, TCW DL NAV LLC, also a single member Delaware limited liability company.
Our commitment period commenced on the Initial Closing Date and ended on May 16, 2021, which is the later of (a) April 13, 2021, three years from the Initial Closing Date and (b) May 16, 2021, three years from the date in which we first completed an investment. We may complete investment transactions that were significantly in process as of the end of the commitment period and which we reasonably expect to be consummated prior to 90 days subsequent to the expiration date of the commitment period. We may also effect follow-on investments up to an aggregate maximum of 10% of Commitments.
Revenues
We generate revenues in the form of interest income and capital appreciation by providing private capital to middle market companies operating in a broad range of industries primarily in the United States. As our investment period has ended, we will not originate new loans, but may increase credit facilities to existing borrowers or affiliates. Our highly negotiated private investments
41
may include senior secured loans, unsecured senior loans, subordinated and mezzanine loans, convertible securities, notes and other non-convertible debt securities, equity securities, and equity-linked securities such as options and warrants. However, historically, our investment bias has been towards adjustable-rate, senior secured loans. We do not anticipate a secondary market developing for our private investments. The investment philosophy, strategy and approach of the private credit team of the Adviser (the “Private Credit Team” fka the “Direct Lending Team”) has generally not involved the use of payment-in-kind (“PIK”) interest, which represents contractual interest accrued and added to the loan balance that generally becomes due at maturity, or similar arrangements. Although the Private Credit Team generally did not originate a significant amount of investments for us with PIK interest features, from time to time we made, and currently have, investments that contain such features, usually due to certain circumstances involving debt restructurings or work-outs of current investments.
We are primarily focused on investing in senior secured debt obligations, although there may be occasions where the investment may be unsecured. We also consider an equity investment as the primary security, in combination with a debt obligation, or as a part of total return strategy. Our investments are mostly in corporations, partnerships or other business entities. Additionally, in certain circumstances, we may co-invest with other investors and/or strategic partners indirectly in a company through a joint venture partnership or other special purpose vehicle. While we invest primarily in U.S. companies, there are certain instances where we invested in companies domiciled elsewhere.
Expenses
We do not currently have any employees and do not expect to have any employees. Services necessary for our business are provided through the Amended and Restated Administration Agreement, dated as of September 25, 2018 (the “Administration Agreement”) and the Investment Advisory Agreement, dated as of December 29, 2017, (the “Advisory Agreement”).
42
We, and indirectly our Unitholders, will bear all costs, expenses and liabilities, other than Adviser Operating Expenses (which shall be borne by the Adviser), in connection with our organization, operations, administration and transactions (“Company Expenses”). Company Expenses shall include, without limitation: (a) organizational expenses and expenses associated with the issuance of the Units; (b) expenses of calculating our net asset value (including the cost and expenses of any independent valuation firm); (c) fees payable to third parties, including agents, consultants, attorneys or other advisors, relating to, or associated with, evaluating and making investments; (d) expenses incurred by the Adviser or the Administrator payable to third parties, including agents, consultants, attorneys or other advisors, relating to or associated with monitoring our financial and legal affairs, providing administrative services, monitoring or administering our investments and performing due diligence reviews of prospective investments and the corresponding portfolio companies; (e) costs associated with our reporting and compliance obligations under the 1940 Act, the 1934 Act and other applicable federal or state securities laws; (f) fees and expenses incurred in connection with debt incurred to finance our investments or operations, and payment of interest and repayment of principal on such debt; (g) expenses related to sales and purchases of Units and other securities; (h) Management Fees and Incentive Fees; (i) administrator fees, if any, payable under the Administration Agreement; (j) transfer agent, sub-administrator and custodial fees; (k) expenses relating to the issue, repurchase and transfer of Units to the extent not borne by the relevant transferring Unitholders and/or assignees; (l) federal and state registration fees; (m) federal, state and local taxes and other governmental charges assessed against us; (n) independent directors’ fees and expenses and the costs associated with convening a meeting of our board of directors or any committee thereof; (o) fees and expenses and the costs associated with convening a meeting of the Unitholders or holders of any Preferred Units, as well as the compensation of an investor relations professional responsible for the coordination and administration of the foregoing; (p) costs of any reports, proxy statements or other notices to Unitholders, including printing and mailing costs; (q) costs and expenses related to the preparation of our consolidated financial statements and tax returns; (r) our allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; (s) direct costs and expenses of administration, including printing, mailing, long distance telephone, and copying; (t) independent auditors and outside legal costs, including legal costs associated with any requests for exemptive relief, “no-action” positions or other guidance sought from a regulator, pertaining to us; (u) compensation of other personnel (including employees and secretarial and other staff of the Administrator) to the extent they are devoted to preparing our consolidated financial statements or tax returns or providing similar “back office” financial services to us; (v) Adviser costs and expenses (excluding travel) in connection with identifying and investigating investment opportunities for us, monitoring our investments and disposing of any such investments; (w) portfolio risk management costs; (x) commissions or brokerage fees or similar charges incurred in connection with the purchase or sale of securities (including merger fees); (y) costs and expenses attributable to normal and extraordinary investment banking, commercial banking, accounting, auditing, appraisal, valuation, administrative agent activities, custodial and registration services provided to us, including in each case services with respect to the proposed purchase or sale of securities by us that are not reimbursed by the issuer of such securities or others (whether or not such purchase or sale is consummated); (z) costs of amending, restating or modifying the LLC Agreement or Advisory Agreement or related documents of us or related entities; (aa) fees, costs, and expenses incurred in connection with the termination, liquidation or dissolution of the Company or related entities; and (bb) all other properly and reasonably chargeable expenses incurred by the Company or the Administrator in connection with administering our business. However, in the event of a Reorganization (as defined in the LLC Agreement) that results in a Public Company (as defined in the LLC Agreement) or an Extension Fund (as defined in the LLC Agreement), including a Reorganization pursuant to which the Company becomes the Public Company or the Extension Fund, the fees, costs and expenses associated with any such restructuring, initial public offering, listing of equity securities or reorganization will be borne appropriately by the Public Company and the Extension Fund (and indirectly only by Unitholders that elect to become investors in the Public Company or the Extension Fund), as the case may be, and no others will directly or indirectly bear such fees, costs or expenses.
43
However, we will not bear (a) more than an amount equal to 10 basis points of our aggregate Commitments for organizational expenses and offering expenses in connection with the offering of Units through January 14, 2019 and (b) more than an amount equal to 12.5 basis points of our aggregate Commitments computed annually for Company Expenses (the “Expense Cap”); provided, that, any amount by which actual annual expenses in (b) exceed the 12.5 basis point limit shall be carried over to the next year, without limitation, as additional expense until the earlier of the Reorganization (as defined in the LLC Agreement) or the dissolution of the Company, with any partial year assessed on a pro rata basis; and provided, further, that in determining the Company Expenses subject to the 12.5 basis point limit in (b), the following expenses shall be excluded and shall be borne by us as incurred without regard to the 12.5 basis point limit in (b): the Management Fee, the Incentive Fee, organizational and offering expenses (which are subject to the separate cap), amounts incurred in connection with our borrowings (including interest, bank fees, legal fees and other transactional expenses arising out of or related to any borrowing or borrowing facility and similar costs), transfer agent fees, federal, state and local taxes and other governmental charges assessed against us, expenses of calculating our net asset value (including the cost and expenses of any independent valuation firm engaged for that purpose and the costs and expenses of the valuation of our portfolio investments performed by our independent auditors in order to comply with applicable Public Company Accounting Oversight Board standards), costs and expenses incurred in connection with arranging or structuring investments and their ongoing operations (including expenses and liabilities related to the formation and ongoing operations of any special purpose entity or entities in connection with an investment), legal costs associated with any requests for exemptive relief, “no-action” positions or other guidance sought from a regulator pertaining to us, costs and expenses relating to any Reorganization or liquidation of the Company and any extraordinary expenses (such as litigation expenses and indemnification payments). Notwithstanding the foregoing, in no event will the Company carryforward to future periods the amount by which actual annual Company Expenses for a year exceed the 12.5 basis point limit for more than three years from the date on which such expenses were reimbursed.
“Adviser Operating Expenses” means overhead and operating and administrative expenses incurred by or on behalf of the Adviser or any of its affiliates, including us, in connection with maintaining and operating the Adviser’s office, including salaries and other compensation (including compensation due to its officers), rent, routine office equipment expense and liability and insurance premiums (other than those incurred in maintaining fidelity bonds and Indemnitee insurance policies), in furtherance of providing supervisory investment management services for us. Adviser Operating Expenses include any expenses incurred by the Adviser or its affiliates in connection with the Adviser’s registration as an investment adviser under the Investment Advisers Act of 1940, as amended, or with its compliance as a registered investment adviser thereunder.
All Adviser Operating Expenses and all our expenses that we will not bear, as set forth above, will be borne by the Adviser or its affiliates.
In connection with borrowings, our lenders require us to pledge assets, Commitments and/or the right to draw down on Commitments. In this regard, the subscription agreement entered into with each of our investors contractually obligates each investor to fund its respective Commitments in order to pay amounts that may become due under any borrowings or other financings or similar obligations.
We expensed organization costs totaling $0.7 million (net of $0.4 million in Adviser reimbursement) since our inception through December 31, 2018. Offering costs totaling $0.6 million (net of $0.3 million in Adviser reimbursement) were charged directly to Members’ Capital on December 31, 2018. No additional organization and offering costs were incurred subsequent to December 31, 2018. We did not bear more than an amount equal to 10 basis points of the aggregate capital commitments for organization and offering expenses.
Critical Accounting Policies and Estimates
Investments at Fair Value
Investments which we hold for which market quotes are not readily available or are not considered reliable are valued at fair value according to procedures approved by the Board of Directors (the “Board”) based on similar instruments, internal assumptions and the weighting of the best available pricing inputs. Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser as the "valuation designee" with respect to the fair valuation of the Company's portfolio securities, subject to oversight by and periodic reporting to the Board.
Fair Value Hierarchy: Assets and liabilities are classified by us into three levels based on valuation inputs used to determine fair value:
Level 1 values are based on unadjusted quoted market prices in active markets for identical assets.
44
Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs.
Level 3 values are based on significant unobservable inputs that reflect our determination of assumptions that market participants might reasonably use in valuing the assets.
Categorization within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation levels are not necessarily an indication of the risk associated with investing in those securities.
Level 1 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:
Equity, (Level 1), generally includes common stock valued at the closing price on the primary exchange in which the security trades.
Level 2 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:
Equity, (Level 2), generally includes warrants valued using quotes for comparable investments.
Level 3 Assets (Investments): The following valuation techniques and significant inputs are used to determine the fair value of investments in private debt and equity for which reliable market quotations are not available. Some of the inputs are independently observable however, a significant portion of the inputs and the internal assumptions applied are unobservable.
Debt, (Level 3), includes investments in privately originated senior secured debt. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. An income method approach incorporating a weighted average cost of capital and discount rate or a market method approach using prices and other relevant information generated by market transactions involving identical or comparable assets are generally used to determine fair value, though some cases use an enterprise value waterfall method. Valuation may also include a shadow rating method. Standard pricing inputs include but are not limited to the financial health of the issuer, place in the capital structure, value of other issuer debt, credit, industry, and market risk and events.
Equity, (Level 3), includes common stock, preferred stock and warrants. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. A market approach is generally used to determine fair value. Pricing inputs include, but are not limited to, financial health and relevant business developments of the issuer; EBITDA; market multiples of comparable companies; comparable market transactions and recent trades or transactions; issuer, industry and market events; and contractual or legal restrictions on the sale of the security. When a Black-Scholes pricing model is used it follows the income approach. The pricing model takes into account the contract terms as well as multiple inputs, including: time value, implied volatility, equity prices and interest rates. A liquidity discount based on current market expectations, future events, minority ownership position and the period management reasonably expects to hold the investment may be applied.
Pricing inputs and weightings applied to determine value require subjective determination. Accordingly, valuations do not necessarily represent the amounts that may eventually be realized from sales or other dispositions of investments.
Investment Activity
As of March 31, 2023, our portfolio consisted of 41 debt investments and 12 equity investments. Based on fair values as of March 31, 2023, our portfolio was 96.4% invested in debt investments which were mostly senior secured term loans. The remaining 3.6% represented our equity investments, which were comprised of common stock, preferred stock, membership interests and warrants. We had one debt investment that was on non-accrual status as of March 31, 2023, representing 3.3% and 3.1% of our portfolio's fair value and cost, respectively.
As of December 31, 2022, our portfolio consisted of 46 debt investments and 12 equity investments. Based on fair values as of December 31, 2022, our portfolio was 95.7% invested in debt investments which were mostly senior secured term loans. The remaining 4.3% represented our equity investments, which were comprised of common stock, preferred stock and warrants. We had one debt investment on non-accrual status as of December 31, 2022, representing 3.1% and 3.0% of our portfolio's fair value and cost, respectively.
45
The table below describes our debt and equity investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets by industry as of March 31, 2023:
Industry |
|
Percent |
|
|
Aerospace & Defense |
|
|
17 |
% |
Textiles, Apparel & Luxury Goods |
|
|
9 |
% |
Household Products |
|
|
7 |
% |
Hotels, Restaurants & Leisure |
|
|
7 |
% |
Software |
|
|
7 |
% |
Consumer Durables & Apparel |
|
|
7 |
% |
Energy Equipment & Services |
|
|
6 |
% |
Chemicals |
|
|
5 |
% |
Household Durables |
|
|
5 |
% |
Publishing |
|
|
4 |
% |
Information Technology Services |
|
|
4 |
% |
Consumer Services |
|
|
4 |
% |
Commercial Services & Supplies |
|
|
4 |
% |
Capital Goods |
|
|
3 |
% |
Media |
|
|
3 |
% |
Food Products |
|
|
2 |
% |
Health Care Technology |
|
|
2 |
% |
Auto Components |
|
|
2 |
% |
Internet & Direct Marketing Retail |
|
|
1 |
% |
Commercial & Professional Services |
|
|
1 |
% |
Total |
|
|
100 |
% |
Interest income, including interest income paid-in-kind, was $41.3 million and $38.3 million for the three months ended March 31, 2023 and 2022, respectively. We also earned $0.1 million and $0.2 million in other fee income during the three months ended March 31, 2023 and 2022, respectively.
Results of Operations
Our operating results for the three months ended March 31, 2023 and 2022 were as follows (dollar amounts in thousands):
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
|
|
|
|
|
|
|
||
Total investment income |
|
$ |
41,381 |
|
|
$ |
38,492 |
|
Total expenses |
|
|
13,217 |
|
|
|
14,987 |
|
Net investment income |
|
|
28,164 |
|
|
|
23,505 |
|
Net realized (loss) gain on investments |
|
|
19 |
|
|
|
— |
|
Net change in unrealized appreciation/(depreciation) on investments |
|
|
(19,908 |
) |
|
|
(7,947 |
) |
Net increase in Members’ Capital from operations |
|
$ |
8,275 |
|
|
$ |
15,558 |
|
Total investment income
Total investment income for the three months ended March 31, 2023 and 2022 was $41.4 million and $38.5 million, respectively. The increase in total investment income during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was due to an increase in interest rates during the three months ended March 31, 2023 compared to the three months ended March 31, 2022. Additionally, there was an increase of $3.3 million due to accelerated original issue discounts from payoffs of loans and $1.3 million in amendment fees during the three months ended March 31, 2023. These increases were partially offset by the decrease in the number of debt investments in our portfolio, which decreased to 41 as of March 31, 2023, as compared to 53 as of March 31, 2022.
46
Net investment income
Net investment income for the three months ended March 31, 2023 and 2022 was $28.2 million and $23.5 million, respectively. The increase in our net investment income during the three months ended March 31, 2023 compared the three months ended March 31, 2022 was primarily due to the increase in total investment income described above, coupled with a decrease in total expenses during the three months ended March 31, 2023. The decrease in total expenses was primarily attributable to the decrease in incentive fees and management fees during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 and was partially offset by an increase in interest and credit facilities expenses.
Expenses for the three months ended March 31, 2023 and 2022 were as follows (dollar amounts in thousands):
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
Expenses |
|
|
|
|
|
|
||
Interest and credit facilities expenses |
|
$ |
6,277 |
|
|
$ |
5,089 |
|
Management fees |
|
|
4,055 |
|
|
|
5,236 |
|
Incentive fees |
|
|
2,069 |
|
|
|
3,890 |
|
Professional fees |
|
|
326 |
|
|
|
234 |
|
Administrative fees |
|
|
319 |
|
|
|
359 |
|
Directors' fees |
|
|
100 |
|
|
|
100 |
|
Other expenses |
|
|
71 |
|
|
|
79 |
|
Total expenses |
|
$ |
13,217 |
|
|
$ |
14,987 |
|
Our total expenses were $13.2 million and $15.0 million for the three months ended March 31, 2023 and 2022, respectively. Our total expenses included management fees attributed to the Adviser of $4.1 million and $5.2 million; and incentive fees of $2.1 million and $3.9, for the three months ended March 31, 2023 and 2022, respectively.
The decrease in total expenses during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily due to the decrease in incentive fees during the current quarter combined with a decrease in management fees caused by the decrease in the size of our portfolio of debt investments. Incentive fees decreased during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 due to $19.8 million of net realized and unrealized losses recognized during the three months ended March 31, 2023 versus $7.9 million of net realized and unrealized losses recognized during the three months ended March 31, 2022. The decreases were partially offset by the increase in interest and credit facilities expenses due to a higher weighted average interest rate during the current quarter compared to the three months ended March 31, 2022.
Net realized gain on investments
Our net realized gain on investments for the three months ended March 31, 2023 and 2022 was $19 thousand and $0, respectively. Our net realized gain during the three months ended March 31, 2023 is fully attributable to our partial sale of the Mondee Holdings, LLC term loan. We did not have a net realized (loss) gain during the three months ended March 31, 2022 as none of our investments were disposed of during the period.
Net change in unrealized appreciation/(depreciation) on investments
Our net change in unrealized appreciation/(depreciation) investments for the three months ended March 31, 2023 and 2022 was ($19.9) million and ($7.9) million, respectively. Our net change in unrealized appreciation/(depreciation) for the three months ended March 31, 2023 was primarily due to the following investments (dollar amounts in thousands):
47
Issuer |
|
Investment |
|
Change in Unrealized |
|
|
|
Mondee Holdings Inc. |
|
Common Stock |
|
$ |
8,741 |
|
** |
Twin Star International, Inc. |
|
Term Loan |
|
|
1,278 |
|
|
Hollander Intermediate LLC |
|
Term Loan |
|
|
(1,032 |
) |
|
Greenfield World Trade, Inc. |
|
Last Out Term Loan |
|
|
(1,066 |
) |
|
Greenfield World Trade, Inc. |
|
Class A-1 Warrant |
|
|
(1,399 |
) |
|
UniTek Acquisition, Inc. |
|
Term Loan |
|
|
(2,325 |
) |
* |
Shipston Group U.S. Inc. |
|
Last Out Term Loan |
|
|
(2,472 |
) |
|
Mondee Holdings Inc. |
|
Preferred Stock |
|
|
(7,993 |
) |
** |
Shelterlogic Group Holdings, Inc |
|
Common Stock |
|
|
(8,766 |
) |
|
All others |
|
Various |
|
|
(4,874 |
) |
|
Net change in unrealized appreciation/(depreciation) |
|
|
|
$ |
(19,908 |
) |
|
*Includes reversal of previously recognized unrealized (depreciation)/appreciation. Recognized during the three months ended March 31, 2023 as realized gains/(losses) and/or accelerated original issue discount.
**Our investment in Mondee Holdings, Inc. preferred stock converted into an investment in Mondee Holdings, Inc. common stock during the three months ended March 31, 2023.
Our net change in unrealized appreciation/(depreciation) for the three months ended March 31, 2022 was primarily due to the following investments (dollar amounts in thousands):
Issuer |
|
Investment |
|
Change in Unrealized |
|
|
|
Shelterlogic Group Holdings, Inc |
|
Common Stock |
|
$ |
(3,411 |
) |
|
Navistar Defense, LLC |
|
Term Loan C |
|
|
(2,441 |
) |
|
Navistar Defense, LLC |
|
Term Loan B |
|
|
(927 |
) |
|
Rapid Displays, Inc. |
|
Term Loan |
|
|
(923 |
) |
|
AGY Holdings Corp. |
|
Term Loan |
|
|
(716 |
) |
|
Voyant Beauty Holdings, Inc. |
|
Term Loan |
|
|
(686 |
) |
|
AGY Holdings Corp. |
|
Delayed Draw Term Loan |
|
|
(660 |
) |
|
Mondee Holdings LLC |
|
Term Loan |
|
|
(653 |
) |
|
Grand Circle Corporation |
|
Term Loan |
|
|
(645 |
) |
|
Westrock Coffee Company, LLC |
|
Term Loan |
|
|
588 |
|
|
Karman Holdings LLC |
|
Term Loan |
|
|
625 |
|
|
Winsight, LLC |
|
Term Loan |
|
|
727 |
|
|
Hoover Group, Inc. |
|
Term Loan |
|
|
809 |
|
|
Centric Brands L.P. |
|
Class A LP Interests |
|
|
2,668 |
|
|
All others |
|
Various |
|
|
(2,302 |
) |
|
Net change in unrealized appreciation/depreciation |
|
|
|
$ |
(7,947 |
) |
|
48
Net increase in Members’ Capital from operations
Our net increase in Members’ Capital from operations during the three months ended March 31, 2023 and 2022 was $8.3 million and $15.6 million, respectively. The lower net increase in Members’ Capital from operations during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily due to net unrealized depreciation during the current quarter which, as previously described, was a net depreciation of ($19.9) million, compared to a net unrealized depreciation of ($7.9) million during the three months ended March 31, 2022, partially offset by higher net investment income during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022.
Financial Condition, Liquidity and Capital Resources
On April 13, 2018, we completed the first closing of the sale of our Units to persons not affiliated with the Adviser. We also commenced operations during the second quarter of fiscal year 2018. On January 14, 2019, we completed our fourth and final closing sale of our Units. We generate cash from (1) drawing down capital in respect of Units, (2) cash flows from investments and operations and (3) borrowings from banks or other lenders.
Our primary use of cash is for (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including expenses, the Management Fee, the Incentive Fee, and any indemnification obligations), (3) debt service of any borrowings and (4) cash distributions to the Unitholders.
As of March 31, 2023, aggregate Commitments, Undrawn Commitments, percentage of Commitments funded and the number of subscribed for Units of the Company were as follows (dollar amounts in thousands):
|
|
|
||
Commitments |
|
$ |
1,373,401 |
|
Undrawn commitments |
|
$ |
165,401 |
|
Percentage of commitments funded |
|
|
88.0 |
% |
Units |
|
|
13,734,010 |
|
On May 10, 2018, we entered into a Revolving Credit Agreement (the “Natixis Credit Agreement”) among the Company, as borrower, and Natixis, New York Branch (“Natixis”), as administrative agent and the committed lenders, conduit lenders and funding agents. The Natixis Credit Agreement provided for a revolving credit line (the “Natixis Revolving Credit Facility”) of up to $150.0 million (the “Natixis Maximum Commitment”), subject to the lesser of the “Natixis Borrowing Base” assets or the Natixis Maximum Commitment. The Natixis Borrowing Base assets equal the sum of a percentage of unfunded commitments from certain classes of eligible investors in the Company (the “Natixis Available Commitment”). The Natixis Revolving Credit Facility is generally secured by the Natixis Borrowing Base assets.
The Natixis Maximum Commitment may be periodically increased in amounts designated by the Company, up to an aggregate amount of $1 billion. The maturity date of the Natixis Credit Agreement was May 10, 2021. On May 10, 2021, the Company exercised its option to extend the maturity date of the Natixis Credit Agreement to May 9, 2022. On March 15, 2022, the Company exercised its last available option to extend the Natixis Credit Agreement maturity date from May 9, 2022 to May 9, 2023. Borrowings under the Natixis Credit Agreement bear interest at a rate equal to either (a) a base rate calculated in a customary manner plus 0.75% or (b) an adjusted eurodollar rate calculated in a customary manner plus 1.75%. As of December 31, 2020, the Natixis Maximum Commitment was $280.0 million. On March 10, 2021, we further reduced the Natixis Maximum Commitment to $250.0 million.
The Natixis Revolving Credit Facility is secured by a first priority security interest, subject to customary exceptions, in (i) all of the capital commitments of the investors in the Company, (ii) our right to make capital calls, receive payment of capital contributions from the investors and enforce payment of the capital commitments and capital contributions under our operating agreement and (iii) a cash collateral account into which the capital contributions from the investors are made. The Natixis Revolving Credit Facility may be terminated, and any outstanding amounts thereunder may become due and payable, should we fail to satisfy certain covenants. As of March 31, 2023, we were in compliance with such covenants.
49
As of March 31, 2023 and December 31, 2022, the Natixis Borrowing Base assets were more than the Natixis Maximum Commitment. A summary of amounts outstanding and available under the Natixis Revolving Credit Facility as of March 31, 2023 and December 31, 2022 was as follows (dollar amounts in thousands):
Natixis Revolving Credit Facility |
|
Maximum |
|
|
Borrowings |
|
|
Available |
|
|||
As of March 31, 2023 |
|
$ |
250,000 |
|
|
$ |
— |
|
|
$ |
250,000 |
|
As of December 31, 2022 |
|
$ |
250,000 |
|
|
$ |
— |
|
|
$ |
250,000 |
|
On January 29, 2019, TCW DL VII Financing LLC (the “Borrower” or “TCW DL VII Financing”), a newly-formed, wholly-owned, special purpose financing subsidiary of ours, entered into a senior secured credit facility (the “PNC Credit Facility” and together with the Natixis Revolving Credit Facility, the “Credit Facilities”) pursuant to a credit and security agreement (the “PNC Credit Agreement”) with PNC Bank, National Association (“PNC”), as facility agent, the lenders from time to time party thereto, and State Street Bank and Trust Company, as collateral agent.
Under the PNC Credit Facility, the lenders have agreed to extend credit to the Borrower in an aggregate principal amount of up to $400.0 million of revolving and term loans (the “PNC Maximum Commitment”), subject to compliance with a borrowing base (the “PNC Borrowing Base”). The PNC Maximum Commitment may be periodically increased in amounts designated by the Borrower up to an aggregate principal amount of $900.0 million, subject to lender consent and obtaining commitments for the increase. The Borrower may make borrowings of (i) a revolving loan (the “PNC Revolving Credit Facility” and together with the Natixis Revolving Credit Facility, the “Revolving Credit Facilities”) under the PNC Credit Facility during the period commencing January 29, 2019 and ending on January 29, 2022 and (ii) a term loan (the “PNC Term Loan”) under the PNC Credit Facility during the period which commenced on January 29, 2019 and ended on January 29, 2020, unless, in the case of (i) and (ii), there is an earlier termination of the PNC Credit Facility or event of default thereunder. The PNC Credit Facility will mature on January 29, 2024. Loans under the PNC Credit Facility bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) three-month LIBOR plus the facility margin of 2.30% per annum or (ii) the Base Rate plus the facility margin of 2.30% per annum.
On April 11, 2019, the Borrower amended and restated the PNC Credit Agreement (as amended, the “Amended PNC Credit Agreement”) for the PNC Credit Facility. The Amended PNC Credit Agreement, among other things, (a) increased the total commitments under the PNC Credit Facility from $400.0 million to $600.0 million (the “Amended PNC Maximum Commitment”) and (b) made certain modifications to the calculation of the borrowing base under the prior facility, including the eligibility requirements of collateral obligations pledged under the PNC Credit Facility and loan portfolio concentration limits.
On March 17, 2020, the Borrower further amended and restated the Amended PNC Credit Agreement (as further amended the “Second Amended PNC Credit Agreement”). The Second Amended PNC Credit Agreement, among other things, increased the total commitments under the PNC Credit Facility from $600.0 million to $795.0 million (the “Second Amended PNC Maximum Commitment”). The Second Amended PNC Maximum Commitment may be periodically increased in amounts designated by the Borrower up to an aggregate principal amount of $900.0 million, subject to lender consent and obtaining commitments for the increase. The Borrower may make borrowings of (i) revolving loans under the PNC Credit Facility during the period commencing January 29, 2019 and ending on January 29, 2022 and (ii) term loans under the PNC Credit Facility during the period commencing January 29, 2019 and ended on March 17, 2020, unless, there is an earlier termination of the PNC Credit Facility or event of default thereunder. On June 19, 2020, the Second Amended PNC Maximum Commitment was increased from $795.0 million to $825.0 million. On November 15, 2021, the Second Amended PNC Maximum Commitment was decreased from $825.0 million to $700.0 million.
On January 31, 2022 (the first business day after January 29, 2022), the Borrower's ability to make borrowings under the PNC Revolving Credit Facility expired and the then outstanding PNC Revolving Credit Facility borrowings of $295.5 million converted into outstanding borrowings under the PNC Term Loan. In connection with such conversion, repayments on outstanding borrowings under the PNC Term Loan will correspondingly reduce the PNC Maximum Commitment. The PNC Credit Facility will mature on January 29, 2024. Loans under the PNC Credit Facility will bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) three-month LIBOR plus the facility margin of 2.30% per annum or (ii) the Base Rate plus the facility margin of 2.30% per annum.
On October 27, 2022, the Borrower amended and restated the Amended PNC Credit Agreement (as further amended the “Third Amended PNC Credit Agreement”). The Third Amended PNC Credit Agreement, among other things, removed reference to LIBOR rates and the related definitions and added reference to SOFR rates and the related definitions in which the Borrower may now elect a fluctuating rate of interest that is based on SOFR rather than LIBOR. Loans under the PNC Credit Facility will bear interest at a
50
fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) SOFR rate plus the sum of the facility margin of 2.3% and SOFR adjustment per annum or (ii) the Base Rate plus the facility margin of 2.30% per annum.
On January 10, 2023, we entered into a Sixth Amendment to the Revolving Credit Agreement with Natixis (the "Sixth Amended Revolving Credit Agreement"). The Sixth Amended Revolving Credit Agreement replaces the Eurocurrency Rate with a Daily Simple SOFR Rate, Term SOFR Rate and Adjusted Term SOFR Rate (each as defined in the Sixth Amended Revolving Credit Agreement) for purposes of calculating interest on the loan. Each Term SOFR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Adjusted Term SOFR Rate for such Interest Period plus the interest rate spread or "Applicable Margin." Each Daily SOFR Loan will bear interest on the outstanding principal amount thereof at a rate per annum equal to Daily Simple SOFR plus the Applicable Margin. The Term SOFR Loan and Daily SOFR Loan have an Applicable Margin of 1.75%.
The Borrower’s obligations under the PNC Credit Facility are secured by a first priority security interest in all of the assets of the Borrower, including its portfolio of loans that has been contributed by the Company to the Borrower in exchange for 100% of the membership interests of the Borrower and any payments received in respect of such loans. The Company may contribute or sell to the Borrower additional loans from time to time after the closing date, which shall be pledged in favor of the lenders under the PNC Credit Facility.
Under the PNC Credit Facility, the Borrower has made customary representations and warranties and is required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar credit facilities. The PNC Credit Facility also includes events of default that are customary for similar credit facilities. As of March 31, 2023, the Borrower was in compliance with such covenants.
Borrowings of the Borrower are non-recourse to us but are consolidated in our consolidated financial statements and considered our borrowings for purposes of complying with the asset coverage requirements under the Investment Company Act of 1940, as amended.
Borrowings under the PNC Term Loan as of March 31, 2023 and December 31, 2022 consisted of $300.0 million and $337.0 million, respectively.
We incurred financing costs of $3.4 million and $4.4 million, in connection with the Natixis Credit Agreement and the PNC Credit Agreement, respectively. In addition, we incurred an additional $2.1 million and $1.5 million in financing costs in connection with the Amended and Second Amended PNC Credit Agreement, respectively. Lastly, we incurred $0.3 million in financing costs associated with the June 19, 2020 upsize of the PNC Credit Facility.
We incurred $0.6 million in fees associated with the May 10, 2021 extension of the Natixis Credit Agreement. We recorded most of the costs associated with the Revolving Credit Facilities as deferred financing costs on our Consolidated Statements of Assets and Liabilities and the costs are being amortized over the respective term of the Natixis Revolving Credit Facility and PNC Revolving Credit Facility. As of March 31, 2023 and December 31, 2022, $0.1 million and $0.2 million, respectively, of such deferred financing costs had yet to be amortized. Costs associated with the PNC Term Loan are deferred and amortized over the term of the PNC Term Loan. Such deferred financing costs are netted against the carrying value of the PNC Term Loan on our Consolidated Statements of Assets and Liabilities. As of March 31, 2023 and December 31, 2022, $1.2 million and $1.6 million, respectively, of such deferred financing costs have yet to be amortized.
The summary information regarding the Credit Facilities for the three months ended March 31, 2023 and 2022 was as follows (dollar amounts in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
|
|
2022 |
|
|||
Credit Facilities interest expense |
|
$ |
5,555 |
|
|
$ |
3,486 |
|
Unused commitment fees |
|
|
156 |
|
|
|
215 |
|
Administrative fees |
|
|
50 |
|
|
|
— |
|
Amortization of deferred financing costs |
|
|
516 |
|
|
|
1,388 |
|
Total |
|
$ |
6,277 |
|
|
$ |
5,089 |
|
Weighted average interest rate |
|
|
7.03 |
% |
|
|
2.54 |
% |
Average outstanding balance |
|
$ |
316,033 |
|
|
$ |
549,000 |
|
In order to finance certain investment transactions, we may, from time to time, enter into repurchase agreements with Macquarie US Trading LLC (“Macquarie”), whereby we sell to Macquarie an investment that we hold and concurrently enter into an agreement
51
to repurchase the same investment at an agreed-upon price at a future date, not to exceed 90-days from the date it was sold (each, a “Macquarie Transaction”). These Macquarie Transactions are accounted for as secured borrowings. Accordingly, the investment financed by a Macquarie Transaction remains on our Consolidated Statements of Assets and Liabilities as an asset, and we record a liability to reflect our repurchase obligation to Macquarie (the “Repurchase Obligation”). The Repurchase Obligation is secured by the respective investment that is the subject of the repurchase agreement.
No repurchase agreements were entered into or settled during the three months ended March 31, 2023. No repurchase agreements were entered into or settled during the three months ended March 31, 2022. We had no outstanding Repurchase Obligations as of March 31, 2023 and December 31, 2022.
We had the following unfunded commitments and unrealized depreciation by investment as of March 31, 2023 and December 31, 2022 (dollar amounts in thousands):
|
|
|
|
|
|
|
||||||||||||
Unfunded Commitments |
|
Maturity/ |
|
Amount |
|
|
Unrealized |
|
|
Amount |
|
|
Unrealized |
|
||||
AGY Holdings Corp. |
|
September 2025 |
|
$ |
1,937 |
|
|
$ |
130 |
|
|
$ |
4,135 |
|
|
$ |
203 |
|
Altern Marketing LLC |
|
October 2024 |
|
|
3,208 |
|
|
|
19 |
|
|
|
4,686 |
|
|
|
33 |
|
Bendon Inc. |
|
December 2025 |
|
|
6,907 |
|
|
|
356 |
|
|
|
7,263 |
|
|
|
326 |
|
Centric Brands Inc. |
|
October 2024 |
|
|
2,050 |
|
|
|
— |
|
|
|
2,306 |
|
|
|
— |
|
Encompass Digital Media, Inc. |
|
September 2023 |
|
|
614 |
|
|
|
93 |
|
|
|
794 |
|
|
|
93 |
|
Greenfield World Trade, Inc. |
|
June 2023 |
|
|
4,653 |
|
|
|
33 |
|
|
|
4,685 |
|
|
|
— |
|
Hometown Food Company |
|
August 2023 |
|
|
5,881 |
|
|
|
— |
|
|
|
4,705 |
|
|
|
— |
|
Karman Holdings LLC (fka Spaceco Holdings LLC) |
|
December 2025 |
|
|
956 |
|
|
|
28 |
|
|
|
1,147 |
|
|
|
28 |
|
KBP Brands, LLC (fka KBP Investments LLC) |
|
May 2027 |
|
|
402 |
|
|
|
35 |
|
|
|
437 |
|
|
|
32 |
|
Mondee Holdings LLC |
|
December 2024 |
|
|
— |
|
|
|
— |
|
|
|
8,613 |
|
|
|
— |
|
Rapid Displays, Inc. |
|
April 2026 |
|
|
1,706 |
|
|
|
64 |
|
|
|
1,770 |
|
|
|
25 |
|
UniTek Acquisition, Inc. |
|
August 2023 |
|
|
— |
|
|
|
— |
|
|
|
571 |
|
|
|
14 |
|
WDE TorcSill Holdings LLC |
|
October 2024 |
|
|
8 |
|
|
|
— |
|
|
|
313 |
|
|
|
17 |
|
Total |
|
|
|
$ |
28,322 |
|
|
$ |
758 |
|
|
$ |
41,425 |
|
|
$ |
771 |
|
52
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to financial market risks, including changes in interest rates. As of March 31, 2023, 100% of our debt investments bore interest based on floating rates, such as LIBOR, SOFR or the Prime Rate. The interest rates on such investments generally reset by reference to the current market index after one to three months. As of March 31, 2023, the percentage of our floating rate debt investments that bore interest based on an interest rate floor was 0.0%. Floating rate investments subject to a floor generally reset by reference to the current market index after one to three months only if the index exceeds the floor.
Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. We assess our portfolio companies periodically to determine whether such companies will be able to continue making interest payments in the event that interest rates increase. There can be no assurances that the portfolio companies will be able to meet their contractual obligations at any or all levels of increases in interest rates.
Based on our March 31, 2023 consolidated statement of assets and liabilities, the following table shows the annual impact on net investment income (excluding the related incentive compensation impact) of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure (dollar amounts in thousands):
|
|
Interest Income |
|
|
Interest Expense |
|
|
Net Investment |
|
|||
Up 300 basis points |
|
$ |
31,220 |
|
|
$ |
9,125 |
|
|
$ |
22,095 |
|
Up 200 basis points |
|
|
20,813 |
|
|
|
6,083 |
|
|
|
14,730 |
|
Up 100 basis points |
|
|
10,407 |
|
|
|
3,042 |
|
|
|
7,365 |
|
Down 100 basis points |
|
|
(10,407 |
) |
|
|
(3,042 |
) |
|
|
(7,365 |
) |
Down 200 basis points |
|
|
(20,813 |
) |
|
|
(6,083 |
) |
|
|
(14,730 |
) |
Down 300 basis points |
|
|
(31,040 |
) |
|
|
(9,125 |
) |
|
|
(21,915 |
) |
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934). Based on that evaluation, our President and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934.
There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
53
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Sales of unregistered securities
None.
Issuer purchases of equity securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
54
Item 6. Exhibits.
(a) Exhibits
3.1 |
|
|
|
3.2 |
|
|
|
3.3 |
|
|
|
3.4 |
|
|
|
3.5 |
|
|
|
10.1 |
|
|
|
10.2 |
|
|
|
10.3 |
|
|
|
10.4 |
|
|
|
10.5 |
|
|
|
10.6 |
|
|
|
10.7 |
|
|
|
10.8 |
|
|
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10.9 |
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10.10* |
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31.1* |
Certification of President Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 |
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31.2* |
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32.1* |
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32.2* |
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101.INS |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: May 10, 2023 |
TCW DIRECT LENDING VII LLC |
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By: |
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President |
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Date: May 10, 2023 |
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By: |
/s/ Andrew J. Kim
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Chief Financial Officer |
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| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 4/13/24 | ||||
| 1/29/24 | ||||
| 12/15/23 | ||||
| Filed on: | 5/10/23 | DEF 14A | ||
| 5/9/23 | ||||
| For Period end: | 3/31/23 | |||
| 3/28/23 | 10-K | |||
| 1/10/23 | ||||
| 1/1/23 | ||||
| 12/31/22 | 10-K | |||
| 10/27/22 | ||||
| 8/10/22 | 10-Q | |||
| 5/9/22 | ||||
| 3/31/22 | 10-Q | |||
| 3/21/22 | ||||
| 3/15/22 | ||||
| 1/31/22 | ||||
| 1/29/22 | ||||
| 1/1/22 | ||||
| 12/31/21 | 10-K | |||
| 11/15/21 | ||||
| 5/16/21 | ||||
| 5/10/21 | 10-Q, 8-K, DEF 14A | |||
| 4/13/21 | ||||
| 3/10/21 | ||||
| 12/31/20 | 10-K | |||
| 6/19/20 | ||||
| 3/17/20 | 10-K, 8-K | |||
| 2/12/20 | ||||
| 1/29/20 | ||||
| 4/11/19 | 8-K | |||
| 1/29/19 | 8-K | |||
| 1/14/19 | 4, 8-K | |||
| 12/31/18 | 10-K | |||
| 9/25/18 | ||||
| 5/10/18 | 8-K, SC 13G | |||
| 4/16/18 | 4 | |||
| 4/13/18 | 3, 4, 8-K | |||
| 12/29/17 | 8-K, N-54A | |||
| 8/18/17 | ||||
| 5/23/17 | ||||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/09/24 TCW Direct Lending VII LLC 10-Q 3/31/24 62:12M Donnelley … Solutions/FA 4/29/24 TCW Direct Lending VII LLC 10-K/A 12/31/23 11:2.1M Donnelley … Solutions/FA 4/01/24 TCW Direct Lending VII LLC 10-K 12/31/23 67:16M Donnelley … Solutions/FA 11/08/23 TCW Direct Lending VII LLC 10-Q 9/30/23 62:17M Donnelley … Solutions/FA 8/09/23 TCW Direct Lending VII LLC 10-Q 6/30/23 63:21M Donnelley … Solutions/FA |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/14/21 TCW Direct Lending VII LLC 8-K:1,2,9 5/10/21 3:1.1M Donnelley … Solutions/FA 3/20/20 TCW Direct Lending VII LLC 8-K:1,2,9 3/17/20 2:922K Donnelley … Solutions/FA 4/16/19 TCW Direct Lending VII LLC 8-K:1,2,9 4/11/19 2:683K Donnelley … Solutions/FA 2/04/19 TCW Direct Lending VII LLC 8-K:1,2,9 1/29/19 2:655K Donnelley … Solutions/FA 1/18/19 TCW Direct Lending VII LLC 8-K:3,5,9 1/14/19 2:564K Donnelley … Solutions/FA 11/06/18 TCW Direct Lending VII LLC 10-Q 9/30/18 8:1.1M Donnelley … Solutions/FA 5/14/18 TCW Direct Lending VII LLC 8-K:1,2,9 5/10/18 2:1.2M Donnelley … Solutions/FA 1/03/18 TCW Direct Lending VII LLC 8-K:1,8,9 12/29/17 3:121K Donnelley … Solutions/FA 10/16/17 TCW Direct Lending VII LLC 10-12G/A 2:408K Donnelley … Solutions/FA 9/01/17 TCW Direct Lending VII LLC 10-12G 3:383K Donnelley … Solutions/FA |