10-Q

00000000$1234ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	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: 814-01538

VARAGON CAPITAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Maryland	30-1206578
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
151 West 42nd Street, 53rd Floor New York, New York	10036
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 235-2600

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    N/A

    N/A

    N/A

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. 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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☒

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 Exchange Act). Yes ☐ No ☒

As of September 30, 2024, there was no established public market for the Registrant’s common stock.

As of November 12, 2024, the registrant had 41,524,827 shares of common stock, $0.01 par value per share, outstanding.

TABLE OF CONTENTS

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Assets and Liabilities as of September 30, 2024 (unaudited) and December 31, 2023	2
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and September 30, 2023 (unaudited)	3
	Consolidated Statements of Changes in Net Assets for the Three and Nine Months Ended September 30, 2024 and September 30, 2023 (unaudited)	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and September 30, 2023 (unaudited)	7
	Consolidated Schedules of Investments as of September 30, 2024 (unaudited) and December 31, 2023
	Notes to Consolidated Financial Statements (unaudited)	28
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	62
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	89
Item 4.	Controls and Procedures	91
PART II.	OTHER INFORMATION
Item1.	Legal Proceedings	91
Item 1A.	Risk Factors	93
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	94
Item 3.	Defaults Upon Senior Securities	95
Item 4.	Mine Safety Disclosures	96
Item 5.	Other Information	97
Item 6.	Exhibits	98
Signatures		99

TABLE OF CONTENTS

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements.

Varagon Capital Corporation

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollar amounts in thousands, except share and per share data)


		As of
		September 30, 2024				As of
ASSETS		(unaudited)				December 31, 2023
Investments, at fair value
Non-controlled/non-affiliated, at fair value (amortized cost of $598,633 and $510,142, respectively)	$		591,949		$		501,552
Controlled investments, at fair value (amortized cost of $179,126 and $188,471, respectively)			173,772				184,485
Total investments, at fair value (amortized cost of $777,759 and $698,613, respectively)			765,721				686,037
Cash			21,163				19,976
Interest receivable			11,942				11,263
Deferred financing costs			3,028				2,649
Prepaid expenses			350				416
Other assets			518				21
Total assets	$		802,722		$		720,362

LIABILITIES
Revolving credit facility payable (Note 6)	$		322,850		$		241,670
Notes payable (net of debt issuance costs of $289, and $362, respectively) (Note 6)			50,094				49,638
Shareholder distributions payable			12,601				14,950
Derivative contracts payable, at fair value			—				91
Interest and credit facility fees payable			7,174				5,002
Base management fees payable (Note 7)			1,442				1,286
Income incentive fees payable (Note 7)			1,837				2,207
Administrator expenses payable			302				287
Directors' fees and expenses payable (Note 9)			79				82
Due to affiliates			732				859
Accounts payable and accrued expenses			1,075				1,140
Other liabilities			—				—
Total liabilities			398,186				317,212

Commitments and contingencies (Note 8)

NET ASSETS
Common stock, $0.01 par value; 500,000,000 shares authorized; 41,520,143 shares issued and outstanding at September 30, 2024, and 500,000,000 shares authorized; 41,505,531 shares issued and outstanding at December 31, 2023			415				415
Paid-in capital in excess of par value			415,129				414,985
Total accumulated earnings (loss)			(11,008	)			(12,250	)
Total net assets	$		404,536		$		403,150
NET ASSETS PER SHARE	$		9.74		$		9.71

See accompanying notes to consolidated financial statements.

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Varagon Capital Corporation

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollar amounts in thousands, except share and per share data)

(unaudited)



		For the three months ended September 30,								For the nine months ended September 30,
		2024				2023				2024				2023
Investment income:
From non-controlled/non-affiliated investments:
Interest income	$		17,628		$		14,171		$		50,878		$		41,253
Fee income			226				155				486				289
Total investment income from non-controlled/non-affiliated investments			17,854				14,326				51,364				41,542
From controlled investments:
Interest income			6,547				6,902				21,451				19,163
Total investment income from controlled investments			6,547				6,902				21,451				19,163
Total investment income			24,401				21,228				72,815				60,705

Expenses:
Base management fees (Note 7)	$		1,442		$		1,266		$		4,199		$		3,794
Income incentive fees (Note 7)			1,837				1,810				5,380				3,828
Professional fees			469				537				1,663				1,559
Administrator expenses			270				271				905				901
Interest expenses (Note 6)			7,509				5,459				20,978				15,570
Credit facility fees (Note 6)			383				308				1,078				2,350
Directors’ fees and expenses (Note 9)			79				102				230				265
Organizational expenses			—				93				155				286
Insurance expenses			19				95				172				290
Other general and administrative expenses			104				63				273				248
Total expenses before taxes			12,112				10,004				35,033				29,091
Net investment income before taxes			12,289				11,224				37,782				31,614
Excise tax expense			—				2				—				2
Net investment income (loss)			12,289				11,222				37,782				31,612

Realized and unrealized gain (loss):
Net realized gain (loss) on investments:
Non-controlled/non-affiliated investments			—				(391	)			179				(391	)
Net realized gain (loss) on investments			—				(391	)			179				(391	)
Net realized gain (loss) on derivatives			—				—				(116	)			—
Net realized gain (loss) on extinguishment of debt			(816	)			—				(816	)			—
Net realized gain (loss)			(816	)			(391	)			(753	)			(391	)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/non-affiliated investments			(265	)			1,043				1,906				(1,501	)
Controlled investments			1,650				1,487				(1,367	)			(2,237	)
Net change in unrealized appreciation (depreciation) on investments			1,385				2,530				539				(3,738	)
Net change in unrealized appreciation (depreciation) on derivatives			—				—				91				—
Net change in unrealized appreciation (depreciation)			1,385				2,530				630				(3,738	)
Net realized and unrealized gains (losses)			569				2,139				(123	)			(4,129	)
Net increase (decrease) in net assets resulting from operations	$		12,858		$		13,361		$		37,659		$		27,483

Per Common Share Information:
Weighted average shares outstanding			41,519,357				41,501,172				41,515,078				41,497,491

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Varagon Capital Corporation

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollar amounts in thousands, except share and per share data)

(unaudited)


Net investment income per share (basic and diluted)	$	0.30	$	0.27	$	0.91	$	0.76
Earnings per share (basic and diluted)	$	0.31	$	0.32	$	0.91	$	0.66

See accompanying notes to consolidated financial statements.

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Varagon Capital Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollar amounts in thousands, except share data)

(unaudited)


	Common Stock				Paid in Capital in		Accumulated			Total
	Shares		Par Amount		Excess of Par		earnings (losses)			Net Assets
Balance at June 30, 2023		41,497,926	$	415	$	414,940	$	(6,704	)	$	408,651
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)		—		—		—		11,222			11,222
Net realized gain (loss) on investments		—		—		—		(391	)		(391	)
Net change in unrealized appreciation (depreciation) on investments		—		—		—		2,530			2,530
Capital transactions:
Issuance of common shares pursuant to distribution reinvestment plan						37					37
Distributions to shareholders								(9,321	)		(9,321	)
Total increase (decrease) for the three months ended September 30, 2023		3,780		—		37		4,040			4,077
Balance at September 30, 2023		41,501,706	$	415	$	414,977	$	(2,664	)	$	412,728

Balance at June 30, 2024		41,515,624	$	415	$	415,084	$	(11,265	)	$	404,234
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)		—		—		—		12,289			12,289
Net realized gain (loss) on extinguishment of debt		—		—		—		(816	)		(816	)
Net change in unrealized appreciation (depreciation) on investments		—		—		—		1,385			1,385
Capital transactions:
Issuance of common shares pursuant to distribution reinvestment plan(1)		4,519		—		45		—			45
Distributions to shareholders		—		—		—		(12,601	)		(12,601	)
Total increase (decrease) for the three months ended September 30, 2024		4,519		—		45		257			302
Balance at September 30, 2024		41,520,143		415		415,129		(11,008	)		404,536

	Common Stock				Paid in Capital in		Accumulated			Total
	Shares		Par Amount (1)		Excess of Par (1)		earnings (loss)			Net Assets
Balance at December 31, 2022		41,490,642	$	415	$	414,868	$	(11,606	)	$	403,677
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)		—		—		—		31,612			31,612
Net realized gain (loss) on investments		—		—		—		(391	)		(391	)
Net change in unrealized appreciation (depreciation) on investments		—		—		—		(3,738	)		(3,738	)
Capital transactions:
Issuance of common shares pursuant to distribution reinvestment plan(1)		11,064		—		109		—			109
Distributions to shareholders		—		—		—		(18,541	)		(18,541	)
Total increase (decrease) for the nine months ended September 30, 2023		11,064		—		109		8,942			9,051
Balance at September 30, 2023		41,501,706	$	415	$	414,977	$	(2,664	)	$	412,728

Balance at December 31, 2023		41,505,531	$	415	$	414,985	$	(12,250	)	$	403,150

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Varagon Capital Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollar amounts in thousands, except share data)

(unaudited)


Increase (decrease) in net assets resulting from operations:
Net investment income (loss)	—		—		—		37,782			37,782
Net realized gain (loss) on investments	—		—		—		179			179
Net realized gain (loss) on derivatives	—		—		—		(116	)		(116	)
Net realized gain (loss) on extinguishment of debt	—		—		—		(816	)		(816	)
Net change in unrealized appreciation (depreciation) on investments	—		—		—		539			539
Net change in unrealized appreciation (depreciation) on derivatives	—		—		—		91			91
Capital transactions:
Issuance of common shares pursuant to distribution reinvestment plan	14,612		—		144		—			144
Distributions to shareholders	—		—		—		(36,417	)		(36,417	)
Tax reclassification of net assets	—		—		—		—			—
Total increase (decrease) for the nine months ended September 30, 2024	14,612		—		144		1,242			1,386
Balance at September 30, 2024	41,520,143	$	415	$	415,129	$	(11,008	)	$	404,536

(1) Par Amount was less than $1,000 for the periods shown above.

See accompanying notes to consolidated financial statements.

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Varagon Capital Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

(unaudited)


		For the nine months ended September 30,
		2024				2023
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$		37,659		$		27,483
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments			(202,754	)			(41,125	)
Payment-in-kind and other adjustments to cost			(1,155	)			(359	)
Repayments of investments			127,385				59,283
Net realized (gain) loss			(179	)			391
Net realized (gain) loss on derivatives			116				—
Net realized (gain) loss on extinguishment of debt			816				—
Net payment of settlement of derivatives			(116	)			—
Net change in unrealized (appreciation) depreciation on investments			(539	)			3,738
Net change in unrealized (appreciation) depreciation on derivatives			(91	)			—
Net unrealized (appreciation) depreciation on interest rate swap attributed to unsecured notes			383				—
Net amortization (accretion) on investments			(2,442	)			(1,404	)
Amortization of deferred financing costs			638				1,937
Changes in operating assets:
Interest receivable			(679	)			(1,759	)
Prepaid expenses			66				106
Other assets			(497	)			(4	)
Changes in operating liabilities:
Interest and credit facility fees payable			2,172				911
Base management fees payable			156				2
Income incentive fees payable			(370	)			1,337
Administrator expenses payable			15				(24	)
Directors' fees and expenses payable (Note 9)			(3	)			1
Other liabilities			—				—
Due to affiliates			(127	)			(12	)
Accounts payable and accrued expenses			(65	)			78
Net cash provided by (used in) operating activities			(39,611	)			50,580

Cash flows from financing activities:
Borrowings on debts			198,950				34,614
Repayments of debts			(117,770	)			(47,714	)
Financing costs paid			(1,759	)			(1,084	)
Dividends paid			(38,623	)			(28,410	)
Net cash provided by (used in) financing activities			40,798				(42,594	)
Net increase (decrease) in cash			1,187				7,986
Cash, beginning of period			19,976				20,416
Cash, end of period	$		21,163		$		28,402

Supplemental cash information:
Cash paid during the period for interest	$		19,218		$		15,072
Cash paid during the period for taxes	$		—		$		63
Supplemental non cash information:
Distributions reinvested	$		144		$		109

See accompanying notes to consolidated financial statements.

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Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


Company # +	Type of Investment	Reference Rate and Spread				Interest Rate *	Maturity	Shares / Units	Principal		Amortized Cost (++)			Fair Value			Percentage of Net Assets ^			Footnotes
Non-Controlled/Non-Affiliated Investments:
Senior Secured First Lien Loans
Aerospace & Defense
AIM Acquisition, LLC	Term Loan	SOFR	+	4.75%	(S)	10.17%	12/4/2025		$	11,000	$	10,886		$	11,000					(1)(6)
Air Comm Corporation LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(S)	9.35%	12/4/2025			3,515		3,499			3,515					(1)(6)
Air Comm Corporation LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(S)	9.35%	12/4/2025			1,125		1,119			1,125					(1)(6)
Air Comm Corporation LLC	Term Loan	SOFR	+	5.00%	(S)	9.35%	12/20/2024			1,645		1,637			1,645					(1)(6)
Precinmac (US) Holdings Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(M)	10.95%	8/13/2029			7,199		7,137			7,199					(1)(6)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/13/2029			3,526		3,496			3,526					(1)(6)
SI Holdings, Inc.	Revolver	N/A					7/25/2028			—		(5	)		—					(2)(6)(9)
SI Holdings, Inc.	Term Loan	SOFR	+	5.75%	(Q)	10.45%	7/15/2028			677		663			677					(1)(6)
SI Holdings, Inc.	Term Loan	SOFR	+	5.75%	(Q)	10.91%	7/15/2028			832		824			832					(1)(6)
SI Holdings, Inc.	Term Loan	SOFR	+	5.75%	(Q)	10.45%	12/1/2025			832		824			832					(1)(6)
Trident Maritime Systems, Inc.	Term Loan	SOFR	+	5.50%	(Q)	10.25%	5/24/2027			901		886			843					(6)(9)
												30,966			31,194			7.71	%
Air Freight & Logistics
Horizon Freight Holdings, Inc.	Delayed Draw Term Loan	N/A					6/18/2026		$	—	$	(11	)	$	(23	)				(2)(6)(9)
Horizon Freight Holdings, Inc.	Delayed Draw Term Loan	N/A					6/18/2026			—		(11	)		(23	)				(2)(6)(9)
Horizon Freight Holdings, Inc.	Revolver	SOFR	+	5.00%	(M)	9.85%	6/18/2026			253		238			238					(6)(9)
Horizon Freight Holdings, Inc.	Term Loan	SOFR	+	5.00%	(M)	9.85%	8/5/2028			6,557		6,460			6,459					(1)(6)
												6,676			6,651			1.64	%
Automobile Components
AAMP Global Holdings, Inc.	Term Loan	SOFR	+	5.75%	(Q)	10.45%	12/19/2029		$	14,625	$	14,560		$	14,442					(1)(6)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	2.50% (2.75% PIK)	(Q)	10.46%	8/16/2028			2,258		2,236			1,829					(6)(9)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	2.50% (2.75% PIK)	(Q)	10.46%	8/16/2028			19		19			16					(6)(9)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	2.50% (2.75% PIK)	(Q)	10.46%	12/17/2027			2,594		2,568			2,101					(6)(9)
Arrowhead Holdco Company	Term Loan	SOFR	+	2.50% (2.75% PIK)	(Q)	10.46%	12/17/2027			210		208			170					(6)(9)
Arrowhead Holdco Company	Term Loan	SOFR	+	2.50% (2.75% PIK)	(Q)	10.46%	12/17/2027			1,081		1,070			876					(6)(9)
M&D MidCo, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.40%	5/13/2030			11		10			10					(6)(9)
M&D MidCo, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.21%	5/13/2030			12		12			12					(6)(9)
M&D MidCo, Inc.	Revolver	SOFR	+	6.00%	(Q)	11.47%	8/10/2027			3		3			3					(6)(9)
M&D MidCo, Inc.	Revolver	SOFR	+	6.00%	(Q)	11.45%	8/10/2027			1		1			1					(6)(9)
M&D MidCo, Inc.	Revolver	SOFR	+	6.00%	(Q)	11.21%	8/10/2027			2		2			2					(6)(9)
M&D MidCo, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.21%	5/13/2030			64		63			63					(6)(9)
Race Winning Brands, Inc.	Term Loan	SOFR	+	5.50%	(Q)	10.90%	7/15/2028			10,851		10,787			10,281					(1)(6)
USSC Holding Corp.	Delayed Draw Term Loan	N/A					11/16/2028			—		(13	)		(13	)				(2)(6)(9)
USSC Holding Corp.	Revolver	N/A					11/16/2028			—		(8	)		(8	)				(2)(6)(9)
USSC Holding Corp.	Term Loan	SOFR	+	5.25%	(Q)	9.85%	2/26/2027			2,700		2,660			2,659					(1)(6)
												34,178			32,444			8.02	%
Chemicals

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Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


Boulder Scientific Company, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.48%	7/1/2027	$	5,745	$	5,722		$	5,544				(6)(9)
Boulder Scientific Company, LLC	Term Loan	SOFR	+	5.00%	(Q)	9.84%	7/1/2027		207		206			200				(6)(9)
Boulder Scientific Company, LLC	Term Loan	SOFR	+	5.00%	(Q)	9.81%	12/21/2027		414		413			400				(6)(9)
Boulder Scientific Company, LLC	Term Loan	SOFR	+	5.00%	(Q)	9.79%	12/21/2027		414		413			400				(6)(9)
MDI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.00%	3/31/2028		23		23			23				(6)(9)
MDI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.00%	12/31/2027		2,333		2,297			2,333				(1)(6)
MDI Buyer, Inc.	Revolver	SOFR	+	5.75%	(Q)	11.00%	3/31/2028		199		195			199				(6)(9)
MDI Buyer, Inc.	Revolver	SOFR	+	5.75%	(Q)	10.85%	8/22/2030		165		161			165				(6)(9)
MDI Buyer, Inc.	Revolver	PRIME	+	4.75%	(Q)	12.75%	8/22/2030		344		336			344				(6)(9)
MDI Buyer, Inc.	Term Loan	SOFR	+	5.75%	(M)	10.60%	12/31/2027		6,531		6,431			6,531				(1)(6)
Techmer BB Bidco, LLC	Delayed Draw Term Loan	N/A					7/25/2028		—		—			(1	)			(2)(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(Q)	10.67%	7/25/2028		1		1			1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(Q)	10.47%	10/4/2027		2		2			2				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(Q)	10.41%	10/1/2027		1		1			1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(Q)	10.41%	6/15/2027		1		1			1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(Q)	10.37%	6/15/2027		1		1			1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	9.60%	6/15/2027		3		2			2				(6)(9)
Techmer BB Bidco, LLC	Revolver	PRIME	+	4.25%	(Q)	12.25%	6/15/2027		1		1			1				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.63%	3/14/2025		—		—			—				(6)(8)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.59%	3/14/2025		1		1			1				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.42%	3/14/2025		1		1			1				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.41%	3/14/2025		1		1			—				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.37%	5/24/2027		53		53			48				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.36%	5/24/2027		—		—			—				(6)(8)(9)
											16,262			16,197		4.00	%
Commercial Services & Supplies
3G Intermediate, Inc.	Delayed Draw Term Loan	N/A					9/30/2030	$	—	$	(27	)	$	(13	)			(2)(6)(9)
3G Intermediate, Inc.	Revolver	N/A					9/30/2030		—		(13	)		(7	)			(2)(6)(9)
3G Intermediate, Inc.	Term Loan	SOFR	+	5.50%	(Q)	10.10%	9/30/2030		3,333		3,267			3,300				(6)(9)
Advanced Web Technologies Holding Company	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	10.06%	8/16/2028		75		74			75				(6)(9)
AWT Merger Sub, Inc.	Delayed Draw Term Loan	N/A					12/17/2027		—		(14	)		—				(2)(6)(9)
Advanced Web Technologies Holding Company	Delayed Draw Term Loan	SOFR	+	5.75%	(S)	10.06%	12/4/2025		431		426			431				(1)(6)
Advanced Web Technologies Holding Company	Revolver	N/A					8/16/2028		—		(3	)		—				(2)(6)(9)
Advanced Web Technologies Holding Company	Term Loan	SOFR	+	5.75%	(Q)	10.06%	8/16/2028		23		23			23				(6)(9)
Advanced Web Technologies Holding Company	Term Loan	SOFR	+	5.75%	(Q)	10.06%	8/16/2028		301		295			301				(6)(9)
Advanced Web Technologies Holding Company	Term Loan	SOFR	+	5.75%	(S)	10.06%	12/4/2025		1,095		1,084			1,095				(1)(6)
AWT Merger Sub, Inc.	Term Loan	SOFR	+	5.75%	(Q)	10.06%	12/20/2024		506		499			506				(1)(6)
HLSG Intermediate, LLC	Delayed Draw Term Loan	SOFR	+	6.25%	(M)	11.21%	6/29/2028		2,939		2,886			2,939				(6)(9)
HLSG Intermediate, LLC	Term Loan	SOFR	+	6.25%	(M)	11.21%	6/18/2026		5,854		5,745			5,854				(6)(9)
LAV Gear Holdings, Inc.	Term Loan	SOFR	+	6.25%	(Q)	11.72%	7/26/2028		10		10			10				(6)(9)
LAV Gear Holdings, Inc.	Term Loan	SOFR	+	6.25%	(Q)	11.64%	7/17/2029		2,463		2,459			2,463				(1)(6)
Liquid Environmental Solutions Corporation	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.18%	7/17/2029		5,032		4,997			4,906				(1)(6)
Liquid Environmental Solutions Corporation	Term Loan	SOFR	+	4.75%	(Q)	10.18%	7/17/2029		833		827			812				(1)(6)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


Online Labels Group, LLC	Delayed Draw Term Loan	N/A					6/30/2028		—		—			—				(2)(6)(8)(9)
Online Labels Group, LLC	Delayed Draw Term Loan	N/A					12/30/2026		—		—			—				(2)(6)(8)(9)
Online Labels Group, LLC	Revolver	N/A					12/30/2026		—		—			—				(2)(6)(8)(9)
Online Labels Group, LLC	Term Loan	SOFR	+	5.25%	(Q)	9.85%	12/30/2026		71		70			71				(6)(9)
RFI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.13%	8/31/2028		10		9			10				(6)(9)
RFI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	9.87%	8/31/2028		15		15			15				(6)(9)
RFI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	9.80%	8/31/2028		4		4			4				(6)(9)
RFI Buyer, Inc.	Revolver	SOFR	+	4.75%	(Q)	9.96%	8/31/2028		1		1			1				(6)(9)
RFI Buyer, Inc.	Term Loan	SOFR	+	4.75%	(Q)	9.80%	8/31/2028		58		57			58				(6)(9)
Titan Group Holdco, LLC	Delayed Draw Term Loan	N/A					5/24/2027		—		(4	)		—				(2)(6)(9)
Titan Group Holdco, LLC	Delayed Draw Term Loan	N/A					5/24/2027		—		(4	)		—				(2)(6)(9)
Titan Group Holdco, LLC	Revolver	N/A					5/24/2027		26		79			85				(2)(6)(9)
Titan Group Holdco, LLC	Revolver	PRIME	+	4.00%	(Q)	12.00%	5/24/2027		106		44			47				(6)(9)
Titan Group Holdco, LLC	Term Loan	SOFR	+	5.00%	(M)	9.85%	6/21/2030		2,560		2,522			2,560				(1)(6)
VRC Companies, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.01%	2/26/2027		11,635		11,538			11,634				(1)(6)
											36,866			37,180		9.19	%
Construction & Engineering
HTI Intermediate, LLC	Delayed Draw Term Loan	N/A					6/18/2026	$	—	$	(5	)	$	(7	)			(2)(6)(9)
HTI Intermediate, LLC	Revolver	SOFR	+	5.00%	(Q)	9.99%	12/20/2028		36		29			31				(6)(9)
HTI Intermediate, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.02%	12/30/2026		1,279		1,256			1,263				(1)(6)
Royal Holdco Corporation	Term Loan	SOFR	+	5.75%	(M)	10.70%	7/15/2028		674		661			674				(1)(6)
											1,941			1,961		0.48	%
Consumer Staples Distribution & Retail
KeyImpact Holdings, Inc.	Term Loan	SOFR	+	6.50%	(Q)	11.75%	8/31/2028	$	11,888	$	11,621		$	11,888				(1)(6)
											11,621			11,888		2.94	%
Containers & Packaging
Comar Holding Company, LLC	Delayed Draw Term Loan	SOFR	+	2.00% (4.75% PIK)	(S)	11.23%	6/3/2030	$	599	$	599		$	548				(6)(9)
Comar Holding Company, LLC	Delayed Draw Term Loan	SOFR	+	2.00% (4.75% PIK)	(S)	11.23%	1/2/2025		1,897		1,897			1,736				(1)(6)
Comar Holding Company, LLC	Delayed Draw Term Loan	SOFR	+	2.00% (4.75% PIK)	(S)	11.23%	1/2/2025		3,146		3,146			2,879				(1)(6)
Comar Holding Company, LLC	Term Loan	SOFR	+	2.00% (4.75% PIK)	(S)	11.23%	6/3/2030		3,032		3,032			2,775				(6)(9)
Comar Holding Company, LLC	Term Loan	SOFR	+	2.00% (4.75% PIK)	(S)	11.23%	1/2/2025		215		215			197				(1)(6)
Comar Holding Company, LLC	Term Loan	SOFR	+	2.00% (4.75% PIK)	(S)	11.23%	1/2/2025		6,122		6,121			5,601				(1)(6)
Oliver Packaging, LLC	Revolver	N/A					6/30/2028		—		—			—				(2)(6)(8)(9)
Oliver Packaging, LLC	Revolver	SOFR	+	5.00% (.50% PIK)	(Q)	10.25%	6/30/2028		174		167			168				(6)(9)
Oliver Packaging, LLC	Term Loan	SOFR	+	5.00% (.50% PIK)	(Q)	11.21%	9/1/2028		714		700			707				(1)(6)
Oliver Packaging, LLC	Term Loan	SOFR	+	5.00% (.50% PIK)	(Q)	10.25%	9/1/2028		3,945		3,898			3,906				(1)(6)
											19,775			18,517		4.58	%
Distributors
Graffiti Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.70%	6/29/2028	$	361	$	349		$	357				(6)(9)
Graffiti Buyer, Inc.	Term Loan	SOFR	+	5.50%	(Q)	10.86%	8/5/2028		1,728		1,705			1,724				(1)(6)
Hub Pen Company, LLC	Revolver	N/A					12/20/2028		—		(13	)		(13	)			(2)(6)(9)
Hub Pen Company, LLC	Term Loan	SOFR	+	5.25%	(M)	10.20%	12/20/2028		6,294		6,168			6,168				(6)(9)
Polk Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	5.25% (2.25% PIK)	(M)	12.45%	3/30/2027		6		6			6				(1)(6)
Polk Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	5.25% (2.25% PIK)	(M)	12.45%	3/30/2027		26		26			26				(1)(6)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


Polk Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	5.25% (2.25% PIK)	(M)	12.45%	3/30/2027		369		369		361				(1)(6)
Polk Acquisition Corp.	Term Loan	SOFR	+	5.25% (2.25% PIK)	(M)	12.45%	8/13/2029		160		160		156				(1)(6)
Polk Acquisition Corp.	Term Loan	SOFR	+	5.25% (2.25% PIK)	(M)	12.45%	8/13/2029		715		693		678				(1)(6)
Polk Acquisition Corp.	Term Loan	SOFR	+	5.25% (2.25% PIK)	(M)	12.45%	8/13/2029		10,053		10,065		9,848				(1)(6)
POY Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.89%	3/1/2029		581		573		581				(6)(9)
POY Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.29%	3/1/2029		194		191		194				(6)(9)
POY Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.25%	3/1/2029		434		428		434				(6)(9)
POY Holdings, LLC	Term Loan	SOFR	+	5.50%	(Q)	10.25%	3/1/2029		5,049		4,957		5,049				(6)(9)
United Scope LLC	Term Loan	SOFR	+	5.00%	(Q)	10.40%	5/24/2027		10,866		10,847		10,078				(6)(9)
											36,524		35,647		8.81	%
Diversified Consumer Services
ADPD Holdings LLC	Delayed Draw Term Loan	N/A					9/3/2029	$	—	$	—	$	—				(2)(6)(8)(9)
ADPD Holdings LLC	Delayed Draw Term Loan	N/A					9/3/2029		—		—		(1	)			(2)(6)(9)
ADPD Holdings LLC	Delayed Draw Term Loan	N/A					8/16/2028		—		—		(1	)			(2)(6)(9)
ADPD Holdings LLC	Revolver	SOFR	+	6.00%	(S)	11.03%	8/29/2026		2		2		2				(6)(9)
ADPD Holdings LLC	Revolver	SOFR	+	6.00%	(S)	11.54%	8/29/2026		1		1		1				(6)(9)
ADPD Holdings LLC	Revolver	SOFR	+	6.00%	(S)	11.39%	9/3/2029		1		1		1				(6)(9)
ADPD Holdings LLC	Term Loan	SOFR	+	6.00%	(S)	11.03%	1/16/2026		68		68		61				(6)(9)
Castleworks Home Services Company	Revolver	PRIME	+	4.5% (7.5% PIK)	(Q)	20.00%	12/17/2027		19		19		15				(6)(9)
Castleworks Home Services Company	Revolver	PRIME	+	4.5% (7.5% PIK)	(Q)	20.00%	12/21/2026		738		729		552				(6)(9)
Castleworks Home Services Company	Revolver	N/A					12/21/2026		—		—		—				(2)(6)(8)(9)
Castleworks Home Services Company	Term Loan	PRIME	+	4.5% (7.5% PIK)	(Q)	20.00%	12/31/2025		162		160		122				(6)(9)
Castleworks Home Services Company	Term Loan	PRIME	+	4.5% (7.5% PIK)	(Q)	20.00%	6/3/2030		6,125		6,051		4,594				(6)(9)
Express Wash Acquisition Company, LLC	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	12.09%	5/30/2025		1,120		1,105		1,034				(1)(6)
Magnolia Wash Holdings (Express Wash Acquisition Company, LLC)	Revolver	SOFR	+	6.50%	(Q)	12.09%	12/10/2026		141		138		121				(6)(9)
Magnolia Wash Holdings (Express Wash Acquisition Company, LLC)	Term Loan	SOFR	+	6.50%	(Q)	12.09%	7/17/2029		5,272		5,209		4,864				(1)(6)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.33%	5/14/2027		2		2		2				(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.27%	5/14/2027		1		1		1				(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.12%	5/14/2027		1		1		1				(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	10.87%	5/14/2027		4		4		4				(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	10.67%	5/14/2027		1		1		1				(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.77%	9/1/2028		477		474		477				(1)(6)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.63%	9/1/2028		1,534		1,525		1,534				(1)(6)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.53%	9/1/2028		1,716		1,706		1,716				(1)(6)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.44%	9/1/2028		1,389		1,380		1,389				(1)(6)
North Haven Stallone Buyer, LLC	Revolver	SOFR	+	5.75%	(Q)	11.33%	3/1/2030		91		88		91				(6)(9)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


North Haven Stallone Buyer, LLC	Revolver	SOFR	+	5.75%	(Q)	11.14%	3/1/2030		85		82			85			(6)(9)
North Haven Stallone Buyer, LLC	Revolver	SOFR	+	5.75%	(Q)	10.87%	12/31/2027		103		99			103			(6)(9)
North Haven Stallone Buyer, LLC	Revolver	PRIME	+	4.75%	(M)	12.75%	12/31/2027		79		77			79			(6)(9)
North Haven Stallone Buyer, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.28%	3/1/2030		179		175			179			(6)(9)
North Haven Stallone Buyer, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.57%	9/1/2028		1,097		1,091			1,097			(1)(6)
TheKey, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.35%	1/11/2030		772		770			739			(1)(6)
TheKey, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.35%	12/21/2026		5,433		5,417			5,202			(1)(6)
TheKey, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.35%	12/21/2026		1,720		1,715			1,647			(1)(6)
TheKey, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.35%	6/21/2030		495		494			474			(1)(6)
											28,585			26,186	6.47	%
Diversified Telecommunication Services
MBS Holdings, Inc.	Term Loan	SOFR	+	6.25%	(S)	11.09%	5/18/2029	$	313	$	306		$	313			(6)(9)
											306			313	0.08	%
Electronic Equipment, Instruments & Components
BC Group Holdings, Inc.	Term Loan	SOFR	+	5.00%	(Q)	9.60%	12/17/2027	$	795	$	795		$	795			(6)(9)
BC Group Holdings, Inc.	Term Loan	SOFR	+	5.00%	(Q)	9.60%	12/20/2024		6,513		6,513			6,513			(1)(6)
EIS Legacy, LLC	Term Loan	SOFR	+	6.00%	(Q)	11.20%	1/2/2025		3,783		3,715			3,783			(1)(6)
Wildcat Buyerco, Inc.	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.60%	11/16/2028		188		187			188			(6)(9)
Wildcat Buyerco, Inc.	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.60%	6/30/2028		1,885		1,885			1,885			(1)(6)
Wildcat Buyerco, Inc.	Term Loan	SOFR	+	5.75%	(M)	10.60%	6/30/2028		532		532			532			(1)(6)
Wildcat Buyerco, Inc.	Term Loan	SOFR	+	5.75%	(M)	10.60%	6/30/2028		3,562		3,562			3,562			(1)(6)
											17,189			17,258	4.27	%
Energy Equipment & Services
Energy Labs Holdings Corp.	Delayed Draw Term Loan	SOFR	+	5.00%	(M)	9.95%	5/17/2030	$	725	$	722		$	725			(6)(9)
Energy Labs Holdings Corp.	Term Loan	SOFR	+	5.00%	(M)	9.95%	1/2/2025		7,623		7,548			7,623			(1)(6)
											8,270			8,348	2.06	%
Financial Services
RWA Wealth Partners, LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.04%	8/31/2028	$	16	$	16		$	16			(6)(9)
RWA Wealth Partners, LLC	Revolver	N/A					7/14/2028		—		—			—			(2)(6)(8)(9)
RWA Wealth Partners, LLC	Term Loan	SOFR	+	4.75%	(Q)	9.81%	7/14/2028		38		37			38			(6)(9)
											53			54	0.01	%
Food Products
Del Real, LLC	Term Loan	SOFR	+	6.75% (1.00% PIK)	(Q)	12.45%	1/2/2025	$	3,508	$	3,468		$	3,507			(1)(6)
Hissho Parent, LLC	Revolver	N/A					6/29/2028		—		(6	)		—			(2)(6)(9)
Hissho Parent, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.21%	8/5/2028		3,492		3,458			3,492			(1)(6)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.70%	7/18/2029		2		2			2			(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.68%	7/18/2029		2		2			2			(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.65%	12/31/2025		5		5			5			(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.52%	12/31/2025		4		4			4			(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.52%	12/31/2025		2		2			2			(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.50%	12/31/2025		5		5			5			(6)(9)
JTM Foods LLC	Revolver	PRIME	+	4.25%	(M)	12.25%	12/31/2025		8		8			8			(6)(9)
JTM Food	Term Loan	SOFR	+	5.25%	(Q)	10.00%	3/28/2028		69		68			69			(6)(9)
KNPC Holdco, LLC	Term Loan	SOFR	+	5.50%	(S)	10.74%	7/17/2029		8,021		7,941			7,920			(1)(6)
VG Target Holdings, LLC	Term Loan	SOFR	+	5.50% (0.50% PIK)	(Q)	11.01%	11/16/2028		5,899		5,828			5,250			(6)(9)
											20,785			20,266	5.01	%
Ground Transportation

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


A&R Logistics Holdings, Inc.	Term Loan	SOFR	+	6.75%	(Q)	12.22%	7/6/2028	$	4,932	$	4,921		$	4,685				(1)(6)
A&R Logistics Holdings, Inc.	Term Loan	SOFR	+	6.75%	(Q)	12.22%	7/6/2028		930		928			883				(1)(6)
Beacon Mobility Corp.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.28%	12/20/2024		8,751		8,694			8,751				(1)(6)
Van Pool Transportation (Beacon Mobility / VP Holding Co.)	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.28%	2/26/2027		1,932		1,919			1,932				(1)(6)
											16,462			16,251		4.02	%
Health Care Equipment & Supplies
ACP Oak Buyer, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.70%	12/19/2029	$	5,846	$	5,815		$	5,846				(1)(6)
ACP Oak Buyer, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.70%	12/19/2029		816		806			816				(1)(6)
BioCare Medical, LLC	Term Loan	SOFR	+	7.00%	(M)	12.02%	11/16/2027		1,368		1,339			1,368				(1)(6)
EPTAM Plastics, Ltd.	Delayed Draw Term Loan	SOFR	+	5.50%	(M)	10.45%	5/30/2025		1,288		1,283			1,269				(1)(6)
EPTAM Plastics, Ltd.	Term Loan	SOFR	+	6.00%	(Q)	11.01%	5/17/2030		10		10			10				(6)(9)
EPTAM Plastics, Ltd.	Term Loan	SOFR	+	5.50%	(M)	10.45%	7/20/2029		2,988		2,976			2,943				(1)(6)
EPTAM Plastics, Ltd.	Term Loan	SOFR	+	5.50%	(M)	10.45%	5/30/2025		349		348			344				(1)(6)
EPTAM Plastics, Ltd.	Term Loan	SOFR	+	5.50%	(M)	10.45%	5/30/2025		249		248			245				(1)(6)
ORG USME Buyer, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.15%	9/1/2028		7,331		7,251			7,001				(1)(6)
Pediatric Home Respiratory Services, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(S)	10.74%	12/30/2026		421		421			421				(6)(9)
Pediatric Home Respiratory Services, LLC	Delayed Draw Term Loan	SOFR	+	6.25%	(S)	11.24%	12/30/2026		2,074		2,073			2,074				(6)(9)
Pediatric Home Respiratory Services, LLC	Delayed Draw Term Loan	PRIME	+	5.25%	(M)	13.25%	12/30/2026		382		381			382				(6)(9)
Pediatric Home Respiratory Services, LLC	Term Loan	SOFR	+	5.75%	(S)	10.74%	10/22/2029		4,518		4,512			4,518				(6)(9)
Pediatric Home Respiratory Services, LLC	Term Loan	SOFR	+	6.25%	(S)	11.80%	3/1/2029		2,851		2,812			2,851				(6)(9)
Pediatric Home Respiratory Services, LLC	Term Loan	SOFR	+	6.25%	(M)	11.45%	3/30/2027		4,156		4,099			4,156				(1)(6)
Zavation Medical Products, LLC	Revolver	SOFR	+	5.50%	(Q)	10.29%	11/16/2028		21		20			21				(6)(9)
Zavation Medical Products, LLC	Revolver	SOFR	+	5.50%	(Q)	10.24%	7/6/2028		26		25			26				(6)(9)
Zavation Medical Products, LLC	Revolver	N/A					7/6/2028		—		—			—				(2)(6)(8)(9)
Zavation Medical Products, LLC	Term Loan	SOFR	+	5.50%	(Q)	10.20%	7/6/2028		4,874		4,843			4,862				(6)(9)
Zavation Medical Products, LLC	Term Loan	SOFR	+	5.50%	(Q)	10.46%	6/30/2028		1,279		1,261			1,276				(1)(6)
Zavation Medical Products, LLC	Term Loan	SOFR	+	5.50%	(Q)	10.88%	6/30/2028		2,416		2,375			2,410				(1)(6)
											42,898			42,839		10.59	%
Health Care Providers & Services
ACP Vault Acquisition, Inc.	Delayed Draw Term Loan	N/A					8/3/2026	$	—	$	(19	)	$	(39	)			(2)(6)(9)
ACP Vault Acquisition, Inc.	Revolver	SOFR	+	5.25%	(Q)	9.85%	11/5/2025		259		234			233				(6)(9)
ACP Vault Acquisition, Inc.	Term Loan	SOFR	+	5.25%	(Q)	10.27%	11/24/2026		11,333		11,109			11,107				(1)(6)
Bebright MSO, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	10.98%	12/17/2027		3,340		3,256			3,340				(6)(9)
Bebright MSO, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	10.35%	11/8/2029		383		373			383				(6)(9)
Bebright MSO, LLC	Revolver	N/A					7/1/2027		—		(23	)		—				(2)(6)(9)
Bebright MSO, LLC	Term Loan	SOFR	+	5.75%	(Q)	10.81%	11/16/2027		6,170		6,051			6,170				(1)(6)
Eye Health America, LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	9.00%	5/17/2030		1,865		1,838			1,865				(6)(9)
Eye Health America, LLC	Revolver	N/A					7/26/2028		—		(7	)		—				(2)(6)(9)
Eye Health America, LLC	Term Loan	SOFR	+	4.75%	(S)	9.00%	11/16/2027		4,116		4,066			4,116				(1)(6)
Gen4 Dental Partners OPCO, LLC	Delayed Draw Term Loan	N/A					7/26/2028		—		(27	)		(29	)			(2)(6)(9)
Gen4 Dental Partners OPCO, LLC	Revolver	N/A					6/29/2028		—		(11	)		(6	)			(2)(6)(9)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


Gen4 Dental Partners OPCO, LLC	Term Loan	SOFR	+	5.50%	(S)	10.31%	8/5/2028	8,760	8,593		8,673	(1)(6)
Heartland Veterinary Partners LLC	Delayed Draw Term Loan	SOFR	+	5.06%	(M)	10.00%	8/5/2028	1,300	1,295		1,300	(1)(6)
Heartland Veterinary Partners LLC	Term Loan	SOFR	+	5.06%	(M)	10.00%	8/5/2028	9,375	9,340		9,375	(1)(6)
MWD Management, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(M)	9.95%	12/31/2027	1,965	1,953		1,965	(1)(6)
MWD Management, LLC	Revolver	SOFR	+	5.00%	(M)	9.95%	8/22/2030	233	227		233	(6)(9)
MWD Management, LLC	Term Loan	SOFR	+	5.00%	(M)	9.95%	7/31/2026	2,450	2,421		2,450	(1)(6)
NJEye LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(S)	10.25%	8/28/2026	1,493	1,493		1,493	(1)(6)
NJEye LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(S)	10.23%	9/1/2028	922	922		922	(1)(6)
NJEye LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(S)	10.16%	9/1/2028	457	457		457	(1)(6)
NJEye LLC	Term Loan	SOFR	+	4.75%	(S)	10.25%	8/28/2026	6,974	6,974		6,974	(1)(6)
OIS Management Services, LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	9.35%	5/14/2027	1,900	1,858		1,900	(6)(9)
OIS Management Services, LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	9.35%	5/14/2027	574	549		574	(6)(9)
OIS Management Services, LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	9.35%	5/14/2027	53	51		53	(6)(9)
OIS Management Services, LLC	Revolver	N/A					6/30/2028	—	(12	)	—	(2)(6)(9)
OIS Management Services, LLC	Term Loan	SOFR	+	4.75%	(Q)	9.35%	9/1/2028	4,925	4,814		4,925	(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	3/1/2029	240	240		212	(6)(9)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	10/31/2025	3,366	3,361		2,970	(6)(9)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	10/31/2025	4,099	4,093		3,617	(6)(9)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	6/29/2028	293	292		258	(6)(9)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	6/29/2028	200	200		176	(6)(9)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	6/29/2028	2,798	2,794		2,469	(6)(9)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	8/13/2029	217	217		192	(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	2/26/2027	126	126		112	(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	3/10/2028	265	264		234	(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	12/2/2025	154	154		136	(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	12/2/2025	105	105		93	(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	8.00%	(Q)	12.87%	12/2/2025	181	180		159	(1)(6)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	10.58%	7/14/2028	103	99		103	(6)(9)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	10.25%	4/16/2027	103	99		103	(6)(9)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	10.25%	7/25/2028	144	138		144	(6)(9)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	10.24%	7/25/2028	137	131		137	(6)(9)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	9.94%	7/25/2028	304	291		304	(6)(9)
SGA Dental Partners Opco, LLC	Term Loan	SOFR	+	5.50%	(Q)	10.79%	7/15/2028	13,693	13,425		13,693	(1)(6)
United Musculoskeletal Partners Acquisition Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.03%	5/24/2027	852	844		850	(6)(9)
United Musculoskeletal Partners Acquisition Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.00%	5/24/2027	589	583		587	(6)(9)
United Musculoskeletal Partners Acquisition Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	10.77%	5/24/2027	376	372		375	(6)(9)
United Musculoskeletal Partners Acquisition Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	10.50%	5/24/2027	90	89		89	(6)(9)
United Musculoskeletal Partners Acquisition Holdings, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.04%	11/9/2027	4,900	4,900		4,888	(1)(6)
US Health Partners Management, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	9.93%	5/24/2027	13	13		13	(6)(9)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


US Health Partners Management, LLC	Revolver	N/A					10/30/2027		—		—			—				(2)(6)(8)(9)
US Health Partners Management, LLC	Term Loan	SOFR	+	5.00%	(Q)	9.60%	10/30/2027		33		33			33				(6)(9)
USN Opco, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.25%	11/16/2028		1,179		1,171			1,179				(6)(9)
USN Opco, LLC	Term Loan	SOFR	+	5.75%	(Q)	10.50%	2/26/2027		2,447		2,406			2,447				(1)(6)
											104,395			104,007		25.71	%
Health Care Technology
BRG Acquisition Co., LLC	Revolver	N/A					12/17/2027	$	—	$	(8	)	$	(8	)			(2)(6)(9)
BRG Acquisition Co., LLC	Term Loan	SOFR	+	6.00%	(M)	10.85%	11/16/2027		2,978		2,926			2,978				(1)(6)
BRG Acquisition Co., LLC	Term Loan	SOFR	+	5.50%	(M)	10.45%	8/31/2027		3,381		3,334			3,339				(1)(6)
BRG Acquisition Co., LLC	Term Loan	SOFR	+	5.50%	(S)	10.00%	8/31/2027		3,381		3,334			3,339				(1)(6)
Q-Centrix Holdings LLC	Delayed Draw Term Loan	SOFR	+	4.50%	(Q)	9.66%	5/31/2026		4,798		4,793			4,798				(6)(9)
Q-Centrix Holdings LLC	Term Loan	SOFR	+	4.50%	(Q)	9.66%	5/29/2026		1,049		1,049			1,049				(6)(9)
Q-Centrix Holdings LLC	Term Loan	SOFR	+	4.50%	(Q)	9.66%	12/2/2025		2,786		2,785			2,786				(1)(6)
Q-Centrix Holdings LLC	Term Loan	SOFR	+	4.50%	(Q)	9.66%	12/2/2025		944		943			944				(1)(6)
											19,156			19,225		4.75	%
Hotels, Restaurants & Leisure
Taymax Group, L.P.	Term Loan	SOFR	+	6.00%	(M)	10.95%	1/11/2030	$	4,900	$	4,780		$	4,900				(1)(6)
											4,780			4,900		1.21	%
Household Products
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(M)	10.45%	6/30/2028	$	9,314	$	9,284		$	9,220				(1)(6)
											9,284			9,220		2.28	%
Insurance
Turbo Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	10.75%	5/24/2027	$	431	$	427		$	416				(6)(9)
Turbo Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	10.75%	5/24/2027		66		65			64				(6)(9)
Turbo Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	10.75%	8/2/2027		1,292		1,283			1,246				(1)(6)
Turbo Buyer, Inc.	Term Loan	SOFR	+	6.00%	(Q)	10.75%	12/31/2025		1,225		1,217			1,182				(1)(6)
Turbo Buyer, Inc.	Term Loan	SOFR	+	6.00%	(Q)	10.75%	6/29/2027		6,968		6,923			6,724				(1)(6)
											9,915			9,632		2.38	%
IT Services
Alta Buyer, LLC	Term Loan	SOFR	+	5.00%	(Q)	9.60%	8/16/2028	$	98	$	97		$	98				(6)(9)
Alta Buyer, LLC	Term Loan	SOFR	+	5.00%	(Q)	9.60%	12/20/2024		9,800		9,736			9,800				(1)(6)
Alta Buyer, LLC	Term Loan	SOFR	+	5.00%	(Q)	9.60%	12/20/2024		794		787			794				(1)(6)
Concord III, L.L.C.	Revolver	SOFR	+	6.25%	(M)	11.10%	6/3/2030		105		101			105				(6)(9)
Concord III, L.L.C.	Term Loan	SOFR	+	6.25%	(M)	11.10%	6/3/2030		3,715		3,641			3,715				(6)(9)
Concord III, L.L.C.	Term Loan	SOFR	+	6.25%	(M)	11.10%	1/2/2025		638		624			638				(1)(6)
Distinct Holdings, Inc.	Revolver	N/A					12/28/2025		—		(24	)		(28	)			(2)(6)(9)
Distinct Holdings, Inc.	Term Loan	SOFR	+	5.75%	(Q)	10.35%	1/2/2025		11,980		11,777			11,771				(1)(6)
TriMech Acquisition Corp.	Term Loan	SOFR	+	4.75%	(Q)	9.35%	6/21/2030		8,467		8,385			8,467				(1)(6)
											35,124			35,360		8.74	%
Life Sciences Tools & Services
KL Charlie Acquisition Company	Delayed Draw Term Loan	SOFR	+	6.75%	(M)	11.70%	11/1/2027	$	3	$	3		$	3				(6)(9)
KL Charlie Acquisition Company	Delayed Draw Term Loan	SOFR	+	6.25%	(M)	11.20%	12/6/2025	$	607	$	607		$	601				(6)(9)
KL Charlie Acquisition Company	Delayed Draw Term Loan	SOFR	+	6.25%	(M)	11.20%	8/31/2028	$	2,604	$	2,575		$	2,578				(1)(6)
KL Charlie Acquisition Company	Revolver	N/A					4/7/2028	$	—	$	(1	)	$	(1	)			(2)(6)(9)
KL Charlie Acquisition Company	Term Loan	SOFR	+	6.75%	(M)	11.70%	4/7/2028	$	2	$	2		$	2				(6)(9)
KL Charlie Acquisition Company	Term Loan	SOFR	+	6.25%	(M)	11.20%	7/17/2029	$	621	$	615		$	615				(1)(6)
Molecular Designs, LLC	Term Loan	SOFR	+	4.50%	(M)	9.62%	12/31/2027	$	2,269	$	2,225		$	2,252				(1)(6)
North Haven USHC Acquisition, Inc.	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	9.70%	9/1/2028	$	697	$	697		$	686				(1)(6)
North Haven USHC Acquisition, Inc.	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.38%	9/1/2028	$	5,742	$	5,730		$	5,656				(1)(6)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


North Haven USHC Acquisition, Inc.	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	9.70%	9/1/2028	$	2,841	$	2,835		$	2,799				(1)(6)
											15,288			15,191		3.76	%
Personal Care Products
Accupac, LLC	Delayed Draw Term Loan	N/A					8/3/2026	$	—	$	—		$	(17	)			(2)(6)(9)
Accupac, LLC	Term Loan	SOFR	+	6.00%	(Q)	10.90%	12/19/2029		10,719		10,719			10,398				(1)(6)
BPC Holding III Corp.	Term Loan	SOFR	+	5.25%	(S)	9.60%	12/21/2027		2,379		2,379			2,373				(6)(9)
BPC Holding III Corp.	Term Loan	SOFR	+	5.25%	(S)	9.60%	8/31/2028		3,315		3,315			3,307				(6)(9)
KL Bronco Acquisition, Inc.	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.45%	12/31/2025		533		518			506				(6)(9)
KL Bronco Acquisition, Inc.	Revolver	SOFR	+	5.25%	(Q)	10.60%	12/31/2025		304		294			293				(6)(9)
KL Bronco Acquisition, Inc.	Term Loan	SOFR	+	5.25%	(Q)	10.60%	8/31/2028		3,850		3,797			3,792				(1)(6)
											21,022			20,652		5.11	%
Pharmaceuticals
Advantage HCS LLC	Term Loan	SOFR	+	5.50%	(Q)	10.56%	12/4/2025	$	12,469	$	12,135		$	12,469				(1)(6)
Leiters, Inc.	Revolver	PRIME	+	5.00%	(Q)	13.00%	7/26/2028		77		71			68				(6)(9)
Leiters, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.16%	7/26/2028		332		324			320				(6)(9)
Leiters, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.16%	7/2/2025		151		147			145				(6)(9)
											12,677			13,002		3.21	%
Software
Project Leopard Holdings, Inc.	Term Loan	SOFR	+	5.25%	(Q)	10.60%	6/29/2028	$	98	$	93		$	88				(6)(7)(9)
TCP Hawker Intermediate LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.25%	1/11/2030		4,307		4,302			4,307				(1)(6)
TCP Hawker Intermediate LLC	Term Loan	SOFR	+	5.50%	(Q)	10.25%	1/11/2030		6,412		6,404			6,412				(1)(6)
											10,799			10,807		2.67	%
Textiles, Apparel & Luxury Goods
BPCP NSA Intermedco, Inc.	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	9.60%	8/31/2028	$	342	$	325		$	342				(6)(9)
BPCP NSA Intermedco, Inc.	Revolver	SOFR	+	5.00%	(Q)	9.99%	8/31/2028		85		71			85				(6)(9)
BPCP NSA Intermedco, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.60%	11/16/2027		6,536		6,442			6,536				(1)(6)
											6,838			6,963		1.72	%
Trading Companies & Distributors
Easy Ice, LLC	Delayed Draw Term Loan	SOFR	+	5.25% (0.50% PIK)	(Q)	11.15%	12/28/2025	$	331	$	328		$	331				(6)(9)
Easy Ice, LLC	Delayed Draw Term Loan	SOFR	+	5.25% (0.50% PIK)	(Q)	10.96%	12/28/2025		237		234			237				(6)(9)
Easy Ice, LLC	Delayed Draw Term Loan	SOFR	+	5.25% (0.50% PIK)	(Q)	10.54%	12/28/2025		380		375			380				(6)(9)
Easy Ice, LLC	Delayed Draw Term Loan	SOFR	+	5.25% (0.50% PIK)	(Q)	10.54%	7/28/2026		773		760			773				(6)(9)
Easy Ice, LLC	Delayed Draw Term Loan	SOFR	+	5.25% (0.50% PIK)	(Q)	10.50%	5/17/2030		1,292		1,271			1,292				(6)(9)
Easy Ice, LLC	Delayed Draw Term Loan	SOFR	+	5.25% (0.50% PIK)	(Q)	11.15%	1/2/2025		6,001		5,996			6,001				(1)(6)
Easy Ice, LLC	Term Loan	SOFR	+	5.25% (0.50% PIK)	(Q)	11.15%	1/2/2025		1,325		1,305			1,325				(1)(6)
Easy Ice, LLC	Term Loan	SOFR	+	5.25% (0.50% PIK)	(Q)	11.15%	1/2/2025		1,344		1,343			1,344				(1)(6)
Krayden Holdings, Inc.	Delayed Draw Term Loan	N/A					12/6/2025		—		(9	)		(1	)			(2)(6)(9)
Krayden Holdings, Inc.	Delayed Draw Term Loan	N/A					12/6/2025		—		(9	)		(1	)			(2)(6)(9)
Krayden Holdings, Inc.	Delayed Draw Term Loan	N/A					12/6/2025		—		(6	)		(3	)			(2)(6)(9)
Krayden Holdings, Inc.	Revolver	N/A					12/6/2025		—		(13	)		(2	)			(2)(6)(9)
Krayden Holdings, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.60%	7/14/2028		2,040		1,988			2,034				(6)(9)
Krayden Holdings, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.60%	7/17/2029		1,251		1,239			1,248				(1)(6)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)


Municipal Emergency Services, Inc.	Delayed Draw Term Loan	N/A					8/22/2030			—		(37	)		—			(2)(6)(9)
												14,765			14,958	3.70	%
Transportation Infrastructure
G2 Secure Staff, L.L.C.	Term Loan	SOFR	+	5.50%	(Q)	10.90%	7/26/2028		$	477	$	471		$	477			(6)(9)
												471			477	0.12	%

Total Senior Secured First Lien Loans												593,871			587,588	145.25	%
Equity
Automobile Components
M&D Parent Holdings, LLC	Class B Units							500,000				500			575			(3)(9)
												500			575	0.14	%
Chemicals
MDI Aggregator LP	Common Units							8,046				805			788			(3)(9)
Techmer BB Aggregator, LP	Limited Partnership Units							333				333			203			(3)(9)
												1,138			991	0.24	%
Commercial Services & Supplies
RFI Group Holdings, L.P.	Class A Units							3,000				300			381			(3)(9)
Chimney Rock 3G Co-Invest	Equity Co-Invest							1,250				125			125			(3)(9)
												425			506	0.13	%
Construction & Engineering
HT Investors, LLC	A1 Units							3,333				332			333			(3)(9)
												332			333	0.08	%
Containers & Packaging
Oliver Investors, LP	Class A Units							6,080				608			492			(3)(9)
												608			492	0.12	%
Diversified Consumer Services
FS NU Investors, LP	Class A Units							5,257				526			237			(3)(9)
												526			237	0.06	%
Health Care Technology
BRG Group Holdings, LLC	Class A Units							626,441				626			633			(3)(9)
												626			633	0.16	%
Personal Care Products
KLC Fund 1-C1 LP	Limited Partnership Units							605,769				607			594			(3)(9)
												607			594	0.15	%

Total Equity												4,762			4,361	1.08	%
Subtotal Non-Controlled/Non-Affiliated Investments												598,633			591,949	146.33	%


Controlled Investments:																		(+)
Investment Funds and Vehicles
Senior Direct Lending Program, LLC	Limited Partnership Units	SOFR	+	8.00%	(Q)	Current Yield: 14.50%	12/31/36			181,961		179,126			173,772			(2)(4)(5)
											$	179,126		$	173,772	42.96	%

Subtotal Controlled Investments											$	179,126		$	173,772	42.96	%
Total Investments, September 30, 2024											$	777,759		$	765,721	189.28	%

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2024

(dollar amounts in thousands, except Shares/Units)

(unaudited)

Derivative Instruments


Description	Hedging Item	Company Receives			Company Pays	Counterparty	Maturity Date	Notional Amount		Fair Value		Upfront Payments / Receipts		Unrealized Appreciation / (Depreciation)		Footnotes
Interest rate swap	2026 Notes		8.10	%	USD-SOFR-Compound + 4.202%	CIBC Bank USA	12/21/2026	$	25,000	$	186	$	—	$	186	(7)
Interest rate swap	2028 Notes		8.20	%	USD-SOFR-Compound + 4.550%	CIBC Bank USA	12/21/2028		25,000		215		—		215	(7)
Total								$	50,000	$	401	$	—	$	401

# Unless otherwise indicated, all securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of ASC 820 fair value hierarchy (See "Note 4. Fair Value Measurements").

+ All of the issuers of the investments held by the Company are domiciled in the United States. Certain investments also have international operations.

* Variable rate loans to the Company’s portfolio companies bear interest at a rate that may be determined by reference to the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower’s option, which reset semi-annually (S), quarterly (Q) or monthly (M). For each such loan, the Company has provided the interest rate in effect as of September 30, 2024.

^ Percentage is based on net assets of $404,536 as of September 30, 2024.

(+) Controlled Investments are defined by the Investment Company Act of 1940 Act, as amended (the "1940 Act"), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.

(++) Negative cost, if applicable, results from unamortized fees on unfunded commitments, which are capitalized to the investment cost. The negative fair value, if applicable, results from the fair valuation of the unfunded commitment.

(1) The Company's investment or a portion thereof is pledged as collateral under the JPM Facility (See "Note 6. Borrowings").

(2) The investment has an unfunded commitment as of September 30, 2024 (See "Note 8. Commitments"). Fair value includes an analysis of the unfunded commitment.

(3) Security is non-income producing.

(4) The investment is not considered a "qualifying asset" under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2024, total qualifying assets at fair value represented 77.9% of the Company's total assets calculated in accordance with the 1940 Act.

(5) In addition to the interest earned based on the stated contractual interest rate of this security, the certificates entitle the holders thereof to receive a portion of the excess cash flow from the SDLP’s loan portfolio, after expenses, which may result in a return to the Company greater than the contractual stated interest rate.

(6) Loan includes interest rate floor feature.

(7) This investment represents a Level 2 security in the ASC 820 fair value hierarchy as of September 30, 2024 (See "Note 4. Fair Value Measurements").

(8) Par Amount, Amortized Cost, and Fair Value are less than $1,000.

(9) The Company's investment or a portion thereof is pledged as collateral under the SMBC Facility (See "Note 6. Borrowings").

See accompanying notes to consolidated financial statements.

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


Company # +	Type of Investment	Reference Rate and Spread				Interest Rate *	Maturity	Shares / Units	Principal		Amortized Cost (++)		Fair Value		Percentage of Net Assets ^			Footnotes
Non-Controlled/Non-Affiliated Investments:
Senior Secured First Lien Loans
Aerospace & Defense
AIM Acquisition, LLC	Term Loan	SOFR	+	5.00%	(S)	10.49%	12/02/25		$	11,000	$	10,819	$	10,780				(1)(6)
Air Comm Corporation LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.45%	07/01/27			3,543		3,523		3,410				(1)(6)
Air Comm Corporation LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.45%	07/01/27			1,133		1,127		1,091				(1)(6)
Air Comm Corporation LLC	Term Loan	SOFR	+	5.00%	(Q)	10.45%	07/01/27			1,657		1,648		1,595				(1)(6)
Precinmac (US) Holdings Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(M)	11.46%	08/31/27			7,254		7,183		7,109				(1)(6)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.54%	08/31/27			3,553		3,518		3,482				(1)(6)
Trident Maritime Systems, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.00%	02/26/27			908		888		874				(6)(9)
												28,706		28,341		7.03	%
Auto Components
AAMP Global Holdings, Inc.	Term Loan	SOFR	+	5.75%	(Q)	10.95%	11/05/25			14,738		14,633		14,516				(1)(6)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	2.50%	(Q)	10.05% (2.75% PIK)	08/31/28			2,205		2,179		1,846				(6)(9)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	2.50%	(Q)	10.05% (2.75% PIK)	08/31/28			19		19		16				(6)(9)
Arrowhead Holdco Company	Term Loan	SOFR	+	2.50%	(Q)	10.05% (2.75% PIK)	08/31/28			205		203		172				(6)(9)
Arrowhead Holdco Company	Term Loan	SOFR	+	2.50%	(Q)	10.04% (2.75% PIK)	08/31/28			1,059		1,046		887				(6)(9)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	2.50%	(Q)	10.05% (2.75% PIK)	08/31/28			2,532		2,502		2,120				(6)(9)
M&D Midco, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.04%	08/31/28			65		64		65				(6)(9)
M&D Midco, Inc.	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.04%	08/31/28			9		9		9				(2)(6)(9)
M&D Midco, Inc.	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.01%	08/31/28			3		3		3				(2)(6)(9)
M&D Midco, Inc.	Revolver	PRIME	+	4.50%	(Q)	13.00%	08/31/28			1		1		1				(2)(6)(9)
Race Winning Brands, Inc.	Term Loan	SOFR	+	5.25%	(M)	10.71%	11/16/27			3,585		3,558		3,316				(1)(6)
Race Winning Brands, Inc.	Term Loan	SOFR	+	5.25%	(M)	10.71%	11/16/27			3,164		3,141		2,927				(1)(6)
Race Winning Brands, Inc.	Term Loan	SOFR	+	5.25%	(M)	10.71%	11/16/27			1,500		1,489		1,387				(1)(6)
Race Winning Brands, Inc.	Term Loan	SOFR	+	5.25%	(M)	10.71%	11/16/27			1,646		1,634		1,523				(1)(6)
Race Winning Brands, Inc.	Term Loan	SOFR	+	5.25%	(M)	10.71%	11/16/27			1,027		1,019		950				(1)(6)
USSC Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.75%	09/28/27			53		53		52				(6)(9)
USSC Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.79%	09/28/27			72		72		71				(6)(9)
USSC Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.78%	09/28/27			184		183		181				(6)(9)
USSC Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.77%	09/28/27			82		82		81				(6)(9)
USSC Acquisition Corp.	Term Loan	SOFR	+	6.25%	(Q)	11.75%	09/28/27			7,043		7,004		6,955				(1)(6)
												38,894		37,078		9.19	%
Capital Markets
Adviser Investments, LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.15%	08/31/28			13		13		13				(2)(6)(9)
Adviser Investments, LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.10%	08/31/28			2		2		2				(2)(6)(9)
Adviser Investments, LLC	Term Loan	SOFR	+	4.75%	(Q)	10.14%	08/31/28			38		37		37				(6)(9)
Adviser Investments, LLC	Revolver	N/A					08/31/28			—		—		—				(2)(6)(9)
												52		52		0.01	%

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


Chemicals
Boulder Scientific Company, LLC	Delayed Draw Term Loan	N/A					12/28/25	—	(1	)	(19	)			(2)(6)(9)
Boulder Scientific Company, LLC	Term Loan	SOFR	+	4.50%	(Q)	10.01%	12/28/25	414	411		401				(6)(9)
Boulder Scientific Company, LLC	Term Loan	SOFR	+	4.50%	(Q)	10.04%	12/28/25	5,798	5,760		5,624				(6)(9)
MDI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.63%	07/25/28	24	23		23				(6)(9)
MDI Buyer, Inc.	Revolver	SOFR	+	6.00%	(Q)	11.63%	07/25/28	2	2		2				(2)(6)(9)
MDI Buyer, Inc.	Revolver	SOFR	+	6.00%	(Q)	11.62%	07/25/28	2	2		2				(2)(6)(9)
MDI Buyer, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.60%	07/25/28	65	64		64				(1)(6)
SI Holdings, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.45%	12/31/27	682	665		671				(1)(6)
Techmer BB Bidco, LLC	Delayed Draw Term Loan	N/A					09/01/28	—	—		(1	)			(2)(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.74%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.85%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.82%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.72%	09/01/28	2	2		2				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.74%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.72%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.53%	09/01/28	—	—		—				(6)(8)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.53%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Revolver	SOFR	+	5.25%	(S)	10.53%	09/01/28	—	—		—				(6)(8)(9)
Techmer BB Bidco, LLC	Revolver	PRIME	+	4.25%	(M)	12.75%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(S)	10.80%	09/01/28	—	—		—				(6)(8)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.73%	09/01/28	—	—		—				(6)(8)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(S)	10.79%	09/01/28	—	—		—				(6)(8)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(S)	10.79%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(S)	10.73%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(S)	10.73%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(S)	10.77%	09/01/28	1	1		1				(6)(9)
Techmer BB Bidco, LLC	Term Loan	SOFR	+	5.25%	(S)	10.83%	09/01/28	53	52		52				(6)(9)
									6,991		6,832		1.69	%
Commercial Services & Supplies
Advanced Web Technologies Holding Company	Term Loan	SOFR	+	6.50%	(Q)	12.01%	12/17/26	23	23		23				(6)(9)
Advanced Web Technologies Holding Company	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	12.01%	12/17/26	76	75		76				(6)(9)
Advanced Web Technologies Holding Company	Term Loan	SOFR	+	6.75%	(Q)	12.26%	12/17/26	304	296		304				(6)(9)
Castleworks Home Services Company	Revolver	SOFR	+	5.50%	(M)	12.95% (2.00% PIK)	06/29/28	136	134		112				(2)(6)(9)
Castleworks Home Services Company	Revolver	SOFR	+	5.50%	(M)	12.96% (2.00% PIK)	06/29/28	136	134		112				(2)(6)(9)
Castleworks Home Services Company	Revolver	SOFR	+	5.50%	(M)	12.96% (2.00% PIK)	06/29/28	403	397		332				(2)(6)(9)
Castleworks Home Services Company	Term Loan	SOFR	+	5.50%	(M)	12.96% (2.00% PIK)	06/29/28	5,653	5,564		4,663				(6)(9)
LAV Gear Holdings, Inc.	Term Loan	SOFR	+	6.25%	(Q)	11.79%	10/31/24	10	10		10				(6)(9)
LAV Gear Holdings, Inc.	Term Loan	SOFR	+	6.25%	(Q)	11.78%	10/31/24	2,481	2,445		2,481				(1)(6)
Liquid Environmental Solutions Corporation	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.24%	05/31/26	5,070	5,022		4,918				(1)(6)
Liquid Environmental Solutions Corporation	Term Loan	SOFR	+	4.75%	(Q)	10.24%	05/31/26	839	831		814				(1)(6)
RFI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.24%	08/05/28	6	6		6				(6)(9)
RFI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.23%	08/05/28	15	15		15				(6)(9)
RFI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.23%	08/05/28	4	4		4				(6)(9)
RFI Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	4.75%	(Q)	10.25%	08/05/28	4	4		4				(6)(9)
RFI Buyer, Inc.	Revolver	N/A					08/05/28	—	—		—				(2)(6)(9)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


RFI Buyer, Inc.	Term Loan	SOFR	+	4.75%	(Q)	10.23%	08/05/28	58	57		58				(6)(9)
VRC Companies, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.14%	06/29/27	11,725	11,606		11,549				(1)(6)
									26,623		25,481		6.32	%
Construction & Engineering
Royal Holdco Corporation	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/30/26	679	662		676				(1)(6)
									662		676		0.17	%
Containers & Packaging
Comar Holding Company, LLC	Delayed Draw Term Loan	SOFR	+	2.00%	(Q)	12.13% (4.75% PIK)	06/18/26	578	561		530				(6)(9)
Comar Holding Company, LLC	Term Loan	SOFR	+	2.00%	(Q)	12.13% (4.75% PIK)	06/18/26	2,925	2,812		2,684				(6)(9)
Comar Holding Company, LLC	Delayed Draw Term Loan	SOFR	+	2.00%	(Q)	12.13% (4.75% PIK)	06/18/26	1,830	1,778		1,679				(1)(6)
Comar Holding Company, LLC	Delayed Draw Term Loan	SOFR	+	2.00%	(Q)	12.13% (4.75% PIK)	06/18/26	3,035	3,031		2,784				(1)(6)
Comar Holding Company, LLC	Term Loan	SOFR	+	2.00%	(Q)	12.13% (4.75% PIK)	06/18/26	207	207		190				(1)(6)
Comar Holding Company, LLC	Term Loan	SOFR	+	2.00%	(Q)	12.13% (4.75% PIK)	06/18/26	5,905	5,678		5,418				(1)(6)
Oliver Packaging, LLC	Revolver	SOFR	+	5.00%	(Q)	10.54%	07/06/28	410	402		395				(2)(6)(9)
Oliver Packaging, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.50%	07/06/28	3,974	3,919		3,874				(1)(6)
Online Labels Group, LLC	Revolver	N/A					12/19/29	—	—		—				(2)(6)(9)
Online Labels Group, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.61%	12/19/29	72	70		70				(6)(9)
Online Labels Group, LLC	Delayed Draw Term Loan	N/A					12/19/29	—	—		—				(2)(6)(9)
Online Labels Group, LLC	Delayed Draw Term Loan	N/A					12/19/29	—	—		—				(2)(6)(9)
									18,458		17,624		4.37	%
Distributors
Polk Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	12.96% (2.25% PIK)	12/20/24	6	6		6				(1)(6)
Polk Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	12.96% (2.25% PIK)	12/20/24	19	19		19				(1)(6)
Polk Acquisition Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	12.96% (2.25% PIK)	12/20/24	372	371		371				(1)(6)
Polk Acquisition Corp.	Term Loan	SOFR	+	5.25%	(M)	12.96% (2.25% PIK)	12/20/24	10,137	10,097		10,086				(1)(6)
Polk Acquisition Corp.	Term Loan	SOFR	+	5.25%	(M)	12.96% (2.25% PIK)	12/20/24	160	159		159				(1)(6)
Polk Acquisition Corp.	Term Loan	SOFR	+	5.25%	(M)	12.96% (2.25% PIK)	12/20/24	527	525		525				(1)(6)
POY Holdings, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.00%	11/16/27	5,086	4,986		5,061				(6)(9)
POY Holdings, LLC	Delayed Draw Term Loan	N/A					11/16/27	—	(9	)	(6	)			(2)(6)(9)
United Scope LLC	Term Loan	SOFR	+	5.00%	(Q)	10.50%	12/01/25	10,866	10,836		9,671				(6)(9)
									26,990		25,892		6.42	%
Diversified Consumer Services
ADPD Holdings, LLC	Term Loan	SOFR	+	6.00%	(S)	11.68%	08/16/28	66	65		58				(6)(9)
ADPD Holdings, LLC	Revolver	SOFR	+	6.00%	(S)	11.68%	08/16/28	2	2		1				(2)(6)(9)
ADPD Holdings, LLC	Delayed Draw Term Loan	N/A					08/16/28	—	—		(1	)			(2)(6)(9)
ADPD Holdings, LLC	Delayed Draw Term Loan	N/A					08/16/28	—	—		(2	)			(2)(6)(9)
Any Hour LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.23%	07/21/27	7,396	7,285		7,304				(1)(6)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


Express Wash Acquisition Company, LLC	Revolver	SOFR	+	6.50%	(Q)	12.16%	07/14/28	141	137	131			(2)(6)(9)
Express Wash Acquisition Company, LLC	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	12.16%	07/14/28	1,129	1,111	1,087			(1)(6)
Express Wash Acquisition Company, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.16%	07/14/28	5,272	5,195	5,075			(1)(6)
HLSG Intermediate, LLC	Delayed Draw Term Loan	SOFR	+	6.50%	(M)	11.97%	03/31/28	887	844	872			(2)(6)(9)
HLSG Intermediate, LLC	Delayed Draw Term Loan	SOFR	+	6.50%	(M)	11.97%	03/31/28	413	393	406			(2)(6)(9)
HLSG Intermediate, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.11%	03/31/28	5,898	5,771	5,854			(6)(9)
North Haven Stallone Buyer, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.15%	05/24/27	180	175	179			(6)(9)
North Haven Stallone Buyer, LLC	Revolver	SOFR	+	5.50%	(Q)	11.14%	05/24/27	71	66	70			(2)(6)(9)
North Haven Stallone Buyer, LLC	Revolver	PRIME	+	4.50%	(Q)	13.00%	05/24/27	25	23	24			(2)(6)(9)
North Haven Stallone Buyer, LLC	Revolver	SOFR	+	5.50%	(Q)	11.12%	05/24/27	32	30	31			(2)(6)(9)
North Haven Stallone Buyer, LLC	Revolver	SOFR	+	5.50%	(Q)	11.13%	05/24/27	42	39	42			(2)(6)(9)
North Haven Stallone Buyer, LLC	Revolver	SOFR	+	5.50%	(Q)	11.14%	05/24/27	42	39	42			(2)(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	11.41%	05/24/27	3	3	3			(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.17%	05/24/27	1	1	1			(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.14%	05/24/27	—	—	—			(6)(8)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	11.42%	05/24/27	1	1	1			(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	11.33%	05/24/27	1	1	1			(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.14%	05/24/27	1	1	1			(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	11.14%	05/24/27	1	1	1			(6)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	11.14%	05/24/27	—	—	—			(6)(8)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	11.38%	05/24/27	—	—	—			(6)(8)(9)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.90%	05/24/27	480	477	474			(1)(6)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.89%	05/24/27	1,546	1,535	1,527			(1)(6)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.89%	05/24/27	857	850	846			(1)(6)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.89%	05/24/27	872	866	862			(1)(6)
North Haven Stallone Buyer, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.90%	05/24/27	1,400	1,389	1,382			(1)(6)
North Haven Stallone Buyer, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.89%	05/24/27	1,106	1,098	1,092			(1)(6)
North Haven USHC Acquisition, Inc.	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	11.95%	10/30/25	702	702	691			(1)(6)
North Haven USHC Acquisition, Inc.	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	11.98%	10/30/25	5,786	5,766	5,699			(1)(6)
North Haven USHC Acquisition, Inc.	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	11.95%	10/30/25	2,863	2,853	2,820			(1)(6)
									36,719	36,574	9.07	%
Diversified Telecommunication Services
MBS Holdings, Inc.	Term Loan	SOFR	+	6.25%	(M)	11.71%	04/16/27	315	307	315			(6)(9)
									307	315	0.08	%
Electronic Equipment, Instruments & Components
BC Group Holdings, Inc.	Term Loan	SOFR	+	5.00%	(Q)	10.45%	12/23/24	801	801	795			(6)(9)
BC Group Holdings, Inc.	Term Loan	SOFR	+	5.00%	(Q)	10.45%	12/23/24	6,565	6,564	6,516			(1)(6)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


Wildcat Buyerco, Inc.	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.10%	02/26/27	190	189	189			(6)(9)
Wildcat Buyerco, Inc.	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.10%	02/26/27	1,899	1,899	1,894			(1)(6)
Wildcat Buyerco, Inc.	Term Loan	SOFR	+	5.75%	(Q)	11.10%	02/26/27	536	536	535			(1)(6)
Wildcat Buyerco, Inc.	Term Loan	SOFR	+	5.75%	(Q)	11.10%	02/26/27	3,590	3,590	3,581			(1)(6)
									13,579	13,510	3.35	%
Energy Equipment & Services
Energy Labs Holdings Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.73%	04/07/28	730	727	729			(6)(9)
Energy Labs Holdings Corp.	Term Loan	SOFR	+	5.25%	(M)	10.71%	04/07/28	7,682	7,593	7,663			(1)(6)
									8,320	8,392	2.08	%
Food & Staples Retailing
KeyImpact Holdings, Inc.	Term Loan	SOFR	+	4.75%	(Q)	10.23%	06/21/26	2,876	2,862	2,869			(1)(6)
									2,862	2,869	0.71	%
Food Products
Del Real, LLC	Term Loan	SOFR	+	6.75%	(Q)	13.25% (1.00% PIK)	03/28/28	3,507	3,461	3,507			(1)(6)
JTM Foods LLC	Term Loan	SOFR	+	5.25%	(Q)	10.75%	05/14/27	70	68	68			(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.81%	05/14/27	2	2	2			(2)(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.81%	05/14/27	2	2	2			(2)(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.78%	05/14/27	5	5	5			(2)(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.78%	05/14/27	4	4	4			(2)(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.78%	05/14/27	2	2	2			(2)(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.79%	05/14/27	6	6	6			(2)(6)(9)
JTM Foods LLC	Revolver	SOFR	+	5.25%	(Q)	10.77%	05/14/27	4	4	4			(2)(6)(9)
JTM Foods LLC	Revolver	PRIME	+	4.25%	(Q)	12.75%	05/14/27	2	2	2			(2)(6)(9)
KNPC Holdco, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.00%	10/22/29	8,082	7,989	7,900			(1)(6)
VG Target Holdings, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.14%	08/02/27	5,930	5,844	5,397			(6)(9)
									17,389	16,899	4.19	%
Health Care Equipment & Supplies
ACP Oak Buyer, Inc.	Term Loan	SOFR	+	5.25%	(M)	10.71%	08/29/25	5,892	5,837	5,819			(1)(6)
Biocare Medical, LLC	Term Loan	SOFR	+	7.00%	(Q)	12.47%	12/09/27	1,485	1,448	1,485			(1)(6)
EPTAM Plastics, Ltd.	Term Loan	SOFR	+	6.00%	(Q)	11.53%	12/06/25	10	10	10			(6)(9)
EPTAM Plastics, Ltd.	Term Loan	SOFR	+	5.50%	(M)	10.96%	12/06/25	3,011	2,993	2,966			(1)(6)
EPTAM Plastics, Ltd.	Delayed Draw Term Loan	SOFR	+	5.50%	(M)	10.96%	12/06/25	1,298	1,290	1,278			(1)(6)
EPTAM Plastics, Ltd.	Term Loan	SOFR	+	5.50%	(M)	10.96%	12/06/25	352	350	346			(1)(6)
EPTAM Plastics, Ltd.	Term Loan	SOFR	+	5.50%	(M)	10.96%	12/06/25	251	249	247			(1)(6)
Zavation Medical Products, LLC	Term Loan	SOFR	+	6.00%	(Q)	11.45%	06/30/28	4,912	4,876	4,814			(6)(9)
									17,053	16,965	4.21	%
Health Care Providers & Services
Advantage HCS LLC	Term Loan	SOFR	+	6.25%	(Q)	11.62%	11/08/29	12,500	12,131	12,125			(1)(6)
Eye Health America, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.60%	07/26/28	1,590	1,560	1,577			(2)(6)(9)
Eye Health America, LLC	Revolver	SOFR	+	5.25%	(Q)	10.60%	07/26/28	240	232	237			(2)(6)(9)
Eye Health America, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.60%	07/26/28	4,148	4,090	4,127			(1)(6)
Fingerpaint Marketing, Inc.	Delayed Draw Term Loan	SOFR	+	6.75%	(Q)	12.20%	12/30/26	3	3	3			(6)(9)
Fingerpaint Marketing, Inc.	Term Loan	SOFR	+	6.75%	(Q)	12.20%	12/30/26	4	4	4			(6)(9)
Fingerpaint Marketing, Inc.	Revolver	PRIME	+	5.25%	(Q)	13.75%	12/30/26	38	37	37			(2)(6)(9)
Fingerpaint Marketing, Inc.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.70%	12/30/26	612	611	595			(6)(9)
Fingerpaint Marketing, Inc.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.70%	12/30/26	2,624	2,587	2,552			(1)(6)
Fingerpaint Marketing, Inc.	Term Loan	SOFR	+	6.25%	(Q)	11.70%	12/30/26	626	617	609			(1)(6)
Heartland Veterinary Partners, LLC	Delayed Draw Term Loan	SOFR	+	5.06%	(M)	10.51%	12/10/26	1,312	1,304	1,298			(1)
Heartland Veterinary Partners, LLC	Term Loan	SOFR	+	5.06%	(M)	10.51%	12/10/26	9,461	9,406	9,366			(1)
MWD Management, LLC	Revolver	SOFR	+	5.00%	(Q)	10.45%	06/15/27	233	226	226			(2)(6)(9)
MWD Management, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.45%	06/15/27	1,980	1,966	1,950			(1)(6)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


MWD Management, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.45%	06/15/27	2,469	2,433		2,432		(1)(6)
NJEye LLC	Term Loan	SOFR	+	4.75%	(S)	10.39%	03/14/25	7,029	7,029		7,012		(1)(6)
NJEye LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(S)	10.39%	03/14/25	1,508	1,508		1,504		(1)(6)
NJEye LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(S)	10.42%	03/14/25	241	241		240		(1)(6)
NJEye LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(S)	10.40%	03/14/25	216	216		216		(1)(6)
NJEye LLC	Delayed Draw Term Loan	SOFR	+	4.75%	(S)	10.46%	03/14/25	929	929		927		(1)(6)
OIS Management Services, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.22%	11/16/28	288	280		287		(6)(9)
OIS Management Services, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.23%	11/16/28	378	368		377		(6)(9)
OIS Management Services, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.20%	11/16/28	554	540		553		(6)(9)
OIS Management Services, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.20%	11/16/28	695	677		693		(6)(9)
OIS Management Services, LLC	Revolver	N/A					11/16/28	—	(14	)	(1	)	(2)(6)(9)
OIS Management Services, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.20%	11/16/28	4,963	4,836		4,950		(1)(6)
ORG USME Buyer, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.29%	11/24/26	7,388	7,283		6,907		(1)(6)
Pediatric Home Respiratory Services, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	12/04/25	425	422		418		(6)(9)
Pediatric Home Respiratory Services, LLC	Delayed Draw Term Loan	SOFR	+	6.25%	(M)	11.71%	12/04/25	2,095	2,087		2,080		(6)(9)
Pediatric Home Respiratory Services, LLC	Delayed Draw Term Loan	PRIME	+	5.25%	(M)	13.75%	12/04/25	386	384		383		(6)(9)
Pediatric Home Respiratory Services, LLC	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/04/25	4,554	4,523		4,486		(6)(9)
Prelude Fertility, Inc.	Delayed Draw Term Loan	SOFR	+	7.00%	(S)	12.69%	12/31/24	2,089	2,045		2,068		(1)(6)
Prelude Fertility, Inc.	Term Loan	SOFR	+	7.00%	(S)	12.69%	12/31/24	7,756	7,676		7,678		(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	6.00%	(Q)	11.61%	01/02/25	3,583	3,561		3,502		(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	6.00%	(Q)	11.61%	01/02/25	4,363	4,336		4,265		(1)(6)
Premier Imaging, LLC	Term Loan	SOFR	+	6.00%	(Q)	11.61%	01/02/25	2,979	2,960		2,912		(1)(6)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.68%	12/30/26	164	162		163		(6)(9)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.64%	12/30/26	3,087	3,045		3,064		(6)(9)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.65%	12/30/26	331	326		328		(6)(9)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.61%	12/30/26	3,512	3,464		3,485		(6)(9)
SGA Dental Partners Opco, LLC	Delayed Draw Term Loan	N/A					12/30/26	—	(33	)	(10	)	(2)(6)(9)
SGA Dental Partners Opco, LLC	Term Loan	SOFR	+	6.00%	(Q)	11.61%	12/30/26	697	681		692		(6)(9)
TheKey, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.48%	03/30/27	778	775		748		(1)(6)
TheKey, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.48%	03/30/27	1,733	1,727		1,668		(1)(6)
TheKey, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.48%	03/30/27	5,475	5,455		5,269		(1)(6)
TheKey, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.48%	03/30/27	499	497		480		(1)(6)
United Musculoskeletal Partners Acquisition Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.16%	07/15/28	859	846		850		(2)(6)(9)
United Musculoskeletal Partners Acquisition Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.13%	07/15/28	593	585		588		(2)(6)(9)
United Musculoskeletal Partners Acquisition Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.13%	07/15/28	378	372		374		(2)(6)(9)
United Musculoskeletal Partners Acquisition Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.12%	07/15/28	90	89		89		(2)(6)(9)

TABLE OF CONTENTS

Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


United Musculoskeletal Partners Acquisition Holdings, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.15%	07/15/28	4,938	4,938		4,901				(1)(6)
USN Opco, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.28%	12/21/26	25	25		25				(6)(9)
USN Opco, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.25%	12/21/26	1,163	1,153		1,154				(6)(9)
									113,201		112,463		27.89	%
Health Care Technology
BRG Acquisition Co., LLC	Revolver	N/A					07/26/28	—	(9	)	(2	)			(2)(6)(9)
BRG Acquisition Co., LLC	Term Loan	SOFR	+	6.00%	(Q)	11.50%	07/26/28	3,000	2,940		2,993				(1)(6)
BRG Acquisition Co., LLC	Term Loan	SOFR	+	5.50%	(Q)	11.00%	07/26/28	6,814	6,705		6,797				(1)(6)
Net Health Acquisition Corp.	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/21/25	177	177		175				(1)(6)
Net Health Acquisition Corp.	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/21/25	1,464	1,463		1,445				(1)(6)
Net Health Acquisition Corp.	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/21/25	9,161	9,161		9,046				(1)(6)
Q-Centrix, LLC	Term Loan	SOFR	+	4.50%	(Q)	9.99%	05/30/25	1,057	1,055		1,050				(6)(9)
Q-Centrix, LLC	Delayed Draw Term Loan	SOFR	+	4.50%	(Q)	9.99%	05/30/25	4,836	4,824		4,799				(6)(9)
									26,316		26,303		6.52	%
Hotels, Restaurants & Leisure
Taymax Group, L.P.	Term Loan	SOFR	+	6.00%	(Q)	11.50%	07/31/25	4,938	4,804		4,938				(1)(6)
									4,804		4,938		1.22	%
Household Products
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.00%	11/09/27	9,389	9,353		9,177				(1)(6)
									9,353		9,177		2.28	%
Insurance
Integrity Marketing Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	6.05%	(Q)	11.54%	08/27/26	10,806	10,806		10,671				(1)(6)
Turbo Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.50%	12/02/25	435	419		421				(2)(6)(9)
Turbo Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.50%	12/02/25	67	64		64				(2)(6)(9)
Turbo Buyer, Inc.	Delayed Draw Term Loan	N/A					12/02/25	—	—		—				(2)(6)(9)
Turbo Buyer, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.50%	12/02/25	1,235	1,222		1,219				(1)(6)
Turbo Buyer, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.50%	12/02/25	1,302	1,289		1,286				(1)(6)
Turbo Buyer, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.50%	12/02/25	7,023	6,952		6,936				(1)(6)
									20,752		20,597		5.11	%
IT Services
Alta Buyer, LLC	Term Loan	SOFR	+	6.00%	(Q)	11.50%	12/21/27	99	96		98				(6)(9)
TriMech Acquisition Corp.	Term Loan	SOFR	+	4.75%	(Q)	10.25%	03/10/28	8,532	8,435		8,404				(1)(6)
									8,531		8,502		2.11	%
Personal Products
Accupac, LLC	Delayed Draw Term Loan	N/A					01/16/26	—	—		(18	)			(2)(6)(9)
Accupac, LLC	Term Loan	SOFR	+	6.00%	(Q)	11.52%	01/16/26	10,804	10,804		10,452				(1)(6)
Barnet Products LLC	Term Loan	SOFR	+	5.25%	(S)	10.82%	07/28/26	3,315	3,315		3,232				(6)(9)
Barnet Products LLC	Term Loan	SOFR	+	5.25%	(S)	10.82%	07/28/26	2,379	2,379		2,320				(6)(9)
KL Bronco Acquisition, Inc.	Delayed Draw Term Loan	N/A					06/30/28	—	(14	)	(165	)			(2)(6)(9)
KL Bronco Acquisition, Inc.	Revolver	SOFR	+	5.75%	(Q)	11.23%	06/30/28	464	453		398				(2)(6)(9)
KL Bronco Acquisition, Inc.	Term Loan	SOFR	+	5.75%	(Q)	11.23%	06/30/28	3,879	3,818		3,521				(1)(6)
									20,755		19,740		4.89	%
Pharmaceuticals
Leiters, Inc.	Revolver	N/A					06/29/28	—	(7	)	(1	)			(2)(6)(9)
Leiters, Inc.	Term Loan	SOFR	+	6.00%	(S)	11.46%	06/29/28	152	148		151				(6)(9)
Leiters, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.57%	06/29/28	335	325		333				(6)(9)
									466		483		0.12	%
Professional Services
The Chartis Group, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.04%	05/01/25	10	10		10				(6)(9)
The Chartis Group, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	10.53%	05/01/25	817	812		811				(1)(6)
The Chartis Group, LLC	Term Loan	SOFR	+	5.00%	(Q)	10.52%	05/01/25	10,803	10,725		10,722				(1)(6)
									11,547		11,543		2.86	%
Road & Rail
A&R Logistics Holdings, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.54%	05/03/25	4,971	4,947		4,871				(1)(6)

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Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


A&R Logistics Holdings, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.54%	05/03/25		937	932		918				(1)(6)
Beacon Mobility Corp.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.74%	05/22/24		8,839	8,807		8,684				(1)(6)
Beacon Mobility Corp.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.74%	05/22/24		1,951	1,943		1,916				(1)(6)
										16,629		16,389		4.06	%
Software
Concord III, L.L.C.,	Term Loan	SOFR	+	6.25%	(Q)	11.62%	12/20/28		3,734	3,650		3,692				(6)(9)
Concord III, L.L.C.,	Revolver	N/A					12/20/28		—	(5	)	(2	)			(2)(6)(9)
Pegasus Global Enterprise Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.75%	05/29/25		352	352		349				(1)(6)
Pegasus Global Enterprise Holdings, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.75%	05/29/25		5,540	5,539		5,484				(1)(6)
Project Leopard Holdings, Inc.	Term Loan	SOFR	+	5.25%	(Q)	10.73%	07/20/29		99	93		89				(6)(7)(9)
TimeClock Plus, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.00%	08/28/26		4,341	4,334		4,330				(1)(6)
TimeClock Plus, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.00%	08/28/26		6,463	6,452		6,447				(1)(6)
										20,415		20,389		5.06	%
Trading Companies & Distributors
Easy Ice, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	11.78% (1.00% PIK)	12/31/25		6,007	5,998		6,007				(1)(6)
Easy Ice, LLC	Term Loan	SOFR	+	5.25%	(Q)	11.78% (1.00% PIK)	12/31/25		1,345	1,343		1,345				(1)(6)
Krayden Holdings, Inc.	Delayed Draw Term Loan	N/A					03/01/29		—	(10	)	—				(2)(6)(9)
Krayden Holdings, Inc.	Delayed Draw Term Loan	N/A					03/01/29		—	(10	)	—				(2)(6)(9)
Krayden Holdings, Inc.	Revolver	N/A					03/01/29		—	(10	)	—				(2)(6)(9)
Krayden Holdings, Inc.	Term Loan	SOFR	+	5.75%	(Q)	11.20%	03/01/29		2,055	1,999		2,055				(6)(9)
										9,310		9,407		2.33	%
Transportation Infrastructure
G2 Secure Staff, L.L.C.	Term Loan	SOFR	+	5.50%	(Q)	11.03%	07/02/25		480	469		480				(6)(9)
										469		480		0.12	%

Total Senior Secured First Lien Loans										506,153		497,911		123.46	%
Equity
Auto Components
M&D Parent Holdings, LLC	Class B Units							5,000		500		607				(3)(9)
										500		607		0.15	%
Chemicals
MDI Aggregator LP	Common Units							8,046		805		805				(3)(9)
Techmer BB Aggregator, LP	Limited Partnership Units							333		333		250				(3)(9)
										1,138		1,055		0.26	%
Commercial Services & Supplies
RFI Group Holdings, L.P.	Class A Units							3,000		300		318				(3)(9)
										300		318		0.08	%
Containers & Packaging
Oliver Investors, LP	Class A Units							5,500		550		476				(3)(9)
										550		476		0.12	%
Diversified Consumer Services
FS NU Investors, LP	Class A Units							5,000		500		307				(3)(9)
										500		307		0.08	%
Health Care Technology
BRG Group Holdings, LLC	Class A Units							500,000		500		485				(3)(9)
										500		485		0.12	%
Personal Products
KLC Fund 1-C1 LP	Limited Partnership Units							500,000		501		393				(3)(9)
										501		393		0.10	%

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Varagon Capital Corporation

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(dollar amounts in thousands, except Shares/Units)


Total Equity										3,989		3,641	0.91	%
Subtotal Non-Controlled/Non-Affiliated Investments										510,142		501,552	124.37	%

Controlled Investments:															(+)
Investment Funds and Vehicles
Senior Direct Lending Program, LLC	Limited Partnership Units	SOFR	+	8.00%	(Q)	Current Yield: 14.25%	12/31/36	189,701		188,471		184,485			(2)(4)(5)
									$	188,471	$	184,485	45.75	%

Subtotal Controlled Investments									$	188,471	$	184,485	45.75	%
Total Investments, December 31, 2023									$	698,613	$	686,037	170.12	%

Derivative Instruments


Description	Company Receives			Company Pays	Counterparty	Maturity Date	Notional Amount		Fair Value			Upfront Payments / Receipts		Unrealized Appreciation / (Depreciation)			Footnotes
Interest rate swap		8.10	%	USD-SOFR-Compound + 4.202%	CIBC Bank USA	12/21/2026	$	25,000	$	(20	)	$	—	$	(20	)	(7)
Interest rate swap		8.20	%	USD-SOFR-Compound + 4.550%	CIBC Bank USA	12/21/2028		25,000		(71	)		—		(71	)	(7)
Total							$	50,000	$	(91	)	$	—	$	(91	)

+ All of the issuers of the investments held by the Company are domiciled in the United States. Certain investments also have international operations.

^ Percentage is based on net assets of $403,150 as of December 31, 2023.

(1) The Company's investment or a portion thereof is pledged as collateral under the JPM Facility (See "Note 6. Borrowings").

(2) The investment has an unfunded commitment as of December 31, 2023 (See "Note 8. Commitments"). Fair value includes an analysis of the unfunded commitment.

(3) Security is non-income producing.

(4) The investment is not considered a "qualifying asset" under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of December 31, 2023, total qualifying assets at fair value represented 74.0% of the Company's total assets calculated in accordance with the 1940 Act.

(6) Loan includes interest rate floor feature.

(7) This investment represents a Level 2 security in the ASC 820 fair value hierarchy as of December 31, 2023 (See "Note 4. Fair Value Measurements").

(8) Par Amount, Amortized Cost, and Fair Value are less than $1,000.

(9) The Company's investment or a portion thereof is pledged as collateral under the CIBC Facility (See "Note 6. Borrowings").

See accompanying notes to consolidated financial statements.

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VARAGON CAPITAL CORPORATION
Notes to Consolidated Financial Statements
September 30, 2024
(unaudited)

Note 1. Organization

Varagon Capital Corporation (the “Company”) was formed on July 31, 2019 as a corporation under the laws of Maryland. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, the Company elected, and intends to qualify annually, to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s fiscal year end is December 31.

VCC Advisors, LLC (the “Adviser”) serves as the Company’s investment adviser. The Adviser is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and is a subsidiary of Varagon Capital Partners, L.P. (“Varagon”), which is also registered with the SEC as an investment adviser under the Advisers Act. Subject to the overall supervision of the Company’s board of directors (the “Board”), the Adviser manages the day-to-day operation of, and provides investment advisory and management services to, the Company.

The Company’s investment objective is to generate current income with a focus on capital preservation and, to a lesser extent, capital appreciation by investing primarily in directly originated leveraged loans to U.S. middle market companies.

The Company intends to achieve its investment objective by investing primarily in senior secured loans to performing middle market companies controlled by private equity sponsors. The Company focuses on loans to middle market companies that have sustainable competitive advantages, experienced management teams, solid financial performance, stable and recurring cash flow and strong enterprise value. The Company expects that such companies and their sponsors will require financing from the Company for growth, acquisitions, recapitalizations, refinancings or leveraged buyouts, among other things. The Company generally intends to directly originate its investments as a lead lender to allow for deeper diligence, greater control over terms and structure, and superior economics.

The Company has a wholly owned subsidiary, VCC Equity Holdings, LLC ("VCCEH”), that is taxed as a corporation for federal income tax purposes. VCCEH was formed to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements of a RIC under the Code, and the assets held by VCCEH are pledged as collateral supporting the amounts outstanding under the CIBC Facility (See "Note 6. Borrowings"). VCCEH also guarantees the borrowings outstanding under the SMBC Facility (as defined below) (See "Note 6. Borrowings"). In addition, the Company has three other wholly owned subsidiaries, VCC Funding, LLC ("VCCF"), a bankruptcy remote special purpose entity, whose assets are pledged as collateral supporting the amounts outstanding under the JPM Facility (See "Note 6. Borrowings"), Varagon SDLP, LLC (“VSDLP”), which holds the Company’s interest in the SDLP (as defined below), and VCC CLO 1 Depositor, LLC ("VCC CLO Depositor"), which in turn wholly owns VCC CLO 1, LLC ("VCC CLO"). VCC CLO Depositor and VCC CLO were formed for the purpose of issuing a term debt securitization. VCCEH, VCCF, VSDLP, and VCC CLO Depositor are each direct wholly owned subsidiaries of the Company and VCC CLO is an indirect wholly owned subsidiary of the Company, and as such are consolidated in the Company's consolidated financial statements from June 2, 2022, the commencement of investment operations, or their respective formation, in accordance with the Company’s consolidation policy.

Formation Transactions

On March 29, 2022, in connection with its seed audit, the Company issued 100 shares of the Company's common stock for $10.00 to Varagon, which were subsequently redeemed on June 2, 2022, in connection with the Merger (as described below). On June 2, 2022, Varagon Fund I, L.P., a Delaware limited partnership and a private fund exempt from registration pursuant to Section 3(c)(7) of the 1940 Act (“VF1”), merged with and into the Company (the “Merger”), with the Company continuing as the surviving entity. As a result of the Merger, the Company acquired all of VF1’s assets and liabilities (the “Existing Portfolio”), including all of VF1’s interests in the joint venture, Senior Direct Lending Program (“SDLP”), in exchange for shares of the Company’s common stock. Accordingly, the Company received $40.9 million in cash and $145.2 million in investments at fair value, which consisted of a non-cash purchase of a $142.1 million investment and $3.1 million of total accumulated earnings. In addition, $191.3 million of VF1 investor commitments were converted into capital commitments to the Company (of which, $185.5 million was funded). In addition, the Company issued 18.6 million of shares of common stock at $10.00 per share to the limited partners of VF1 in exchange for the assets and liabilities of VF1. Additionally, on June 2, 2022, the Company received $296.9 million of capital commitments (of which, $175.2 million was funded)

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(the “Initial Closing”) and the Company issued 17.5 million shares of common stock at $10.00 per share to new investors. The Company also became the sole member of its wholly owned subsidiaries VCCF and VSDLP. On June 2, 2022, immediately prior to its election to be regulated as a BDC, the Company purchased a portfolio of existing loans for $449.4 million (the “Warehoused Portfolio” and together with the Existing Portfolio, the “Initial Portfolio”) from certain affiliates of the Adviser using proceeds from the Initial Closing and borrowings under the JPM Facility pursuant to loan sale and purchase agreements. In connection with the purchase of the Initial Portfolio, the Board reviewed and approved the fair value of the Initial Portfolio based on the Adviser’s internal analysis and input from third-party valuation firms.

Varagon Transaction with Man Group plc

On July 5, 2023, Varagon entered into an Agreement and Plan of Merger (the “Merger Agreement”) with affiliates of Man Group plc (“Man Group”), pursuant to which a newly formed indirect subsidiary of Man Group merged with and into Varagon, with Varagon surviving the merger as an indirect subsidiary of Man Group (the “Transaction”). The Transaction closed on September 6, 2023. As a result, following the Transaction, Man Group owns a majority interest in Varagon and Varagon management continues to own, directly or indirectly, a minority interest in Varagon. Although the ownership of Varagon changed as a result of the Transaction, there were no material changes to the investment advisory or administrative services performed by the Adviser or Varagon in its capacity as the Company’s administrator.

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Note 2. Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to Regulation S-X and include the accounts of the Company and its consolidated subsidiaries. As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”) issued by the Financial Accounting Standards Board (“FASB”). The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the results of operations and financial condition as of and for the periods presented. All significant intercompany balances and transactions have been eliminated in consolidation.

Cash

Cash consists of deposits held at a custodian bank and, at times, may exceed the insured limits under applicable law. As of September 30, 2024, the Company held approximately $21.2 million in cash. As of December 31, 2023, the Company held approximately $20.0 million in cash.

Organizational and Offering Expenses

Organizational and offering expenses consist of all costs and expenses, whether incurred before, on or after the date of the private placement memorandum relating to the Company’s private offering of shares of common stock (the “Offering”), pertaining to the organization and establishment of the Company (including any subsidiaries of the Company and the transactions contemplated by the Merger and the acquisition of the Initial Portfolio), including, without limitation, any related third-party legal, tax and accounting advisory fees and expenses, capital raising expenses, including printing expenses and other similar costs, fees and expenses, and regulatory, compliance, and administrative filings, and other organizational and offering expenses, but excluding the fees of any placement agent engaged on behalf of the Company.

The Adviser elected to incur the organizational and offering expenses associated with the Company (See "Note 7. Related Party Transactions”) for the period from July 31, 2019 through March 29, 2022. Such organizational and offering expenses are not reimbursable by the Company. For the period from July 31, 2019 through December 31, 2019, the Adviser incurred $46,384 of organizational and offering expenses. For the year ended December 31, 2020, the Adviser incurred $11,805 of organization costs. For the year ended December 31, 2021, the Adviser incurred $0.1 million of organizational and offering expenses. For the period of January 1, 2022 through March 29, 2022, the Adviser incurred $0.4 million of organizational and offering expenses.

For the three months ended September 30, 2024, the Company did not incur any organizational expenses. For the nine months ended September 30 2024, the Company incurred and expensed $0.2 million of organizational expenses. For the three and nine months ended September 30, 2023, the Company incurred and expensed $0.1 million and $0.2 million, respectively, of organizational expenses.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates.

Deferred Financing Costs

Deferred financing costs, incurred in connection with any revolving credit facility are presented as an asset on the Company’s consolidated statements of assets and liabilities and are deferred and amortized over the life of the respective credit facility (See "Note 6. Borrowings”).

Indemnifications

In the normal course of its business, the Company may enter into contracts that contain a variety of representations and warranties, which provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, management believes the risk of loss to be remote.

Revenue Recognition

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previously recognized. The Company reports current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Investment Income

Interest income, including amortization of premium and accretion of discount, is recorded on the accrual basis to the extent that such amounts are expected to be collected. The Company records amortized or accreted discounts or premiums as interest income using the effective interest method and is adjusted only for material amendments or prepayments. Dividend income, which represents dividends from equity investments and distributions from subsidiaries, if any, is recognized on an accrual basis to the extent that the Company expects to collect such amount.

Interest income from investments in the Subordinated Certificates (as defined below) of SDLP is recorded based on an estimate of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC Topic 325-40, Beneficial Interests in Securitized Financial Assets. The Company monitors the expected cash flows from these investments, including the expected residual payments, and the effective yield is determined and updated periodically. Any difference between the cash distribution received and the amount calculated pursuant to the effective interest method is recorded as an adjustment to the cost basis of such investments.

PIK Interest

The Company may, from time to time, hold loans in its portfolio that contain a payment-in-kind ("PIK") interest provision. PIK interest, computed at the contractual rate specified in each loan agreement, is periodically added to the principal balance of the loan, rather than being paid to the Company in cash, and is recorded as interest income. Thus, the actual collection of PIK interest may be deferred until the time of debt principal repayment.

PIK interest, which is a non-cash source of income at the time of recognition, is included in the Company’s taxable income, and therefore affects the amount the Company would be required to distribute to its shareholders to maintain its tax treatment as a RIC for U.S. federal income tax purposes, even though the Company would have not yet collected the cash. For the three and nine months ended September 30, 2024, the Company earned PIK interest of $0.7 million and $1.2 million, respectively. For the three and nine months ended September 30, 2023, the Company earned PIK interest of $0.1 million and $0.3 million, respectively, reflected on the accompanying consolidated statements of operations as part of interest income.

Fee Income

Origination fees received are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized origination fees are recorded as investment income. The Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees, covenant waiver fees and loan amendment fees, and are recorded as investment income when earned. Some of the fees earned by the Company may be PIK fee income. For the three and nine months ended September 30, 2024, the Company did not earn any PIK fee income, respectively. For the three and nine months ended September 30, 2023, the Company earned $7,524 and $7,524 of PIK fee income, respectively.

Non-accrual loans

A loan can be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans are recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid, and, in management’s judgment, payments are likely to remain current. As of September 30, 2024 and December 31, 2023, there were no loans on non-accrual.

Investment Classification

The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, the Company would be deemed to "control" a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company. The Company refers to such investments in portfolio companies that it "controls" as "Controlled Investments." Under the 1940 Act, the Company would be deemed to be an "Affiliated Person" of a portfolio company if it owned between 5% and 25% of the portfolio company's outstanding voting securities or the Company was under common control with such portfolio company. The Company refers to such investments in Affiliated Persons as "Affiliated Investments." Investments which are neither Control Investments nor Affiliated Investments are referred to as "Non-Controlled/Non-Affiliated investments."

Fair Value Measurements

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The Company applies fair value accounting to all of its investments in accordance with the 1940 Act and ASC Topic 820, Fair Value Measurements (“ASC 820”), which defines fair value, sets a framework for measuring fair value, and requires certain disclosures about fair value measurements. Fair value is defined as 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 (i.e. exit price). Investments are reflected on the consolidated statements of assets and liabilities at fair value, with the changes in unrealized gains and losses resulting from changes in fair value, if any, reflected on the accompanying consolidated statements of operations as a change in unrealized gain (loss) on investments.

In accordance with ASC 820, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs applied to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Investments with readily available market quotations or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining the fair value. The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 – Valuations based on quoted prices in active markets for identical assets and liabilities that the Company can access as of the measurement date. Valuation utilizing Level 1 inputs do not require any degree of judgment. The type of investments generally included in Level 1 are publicly-traded securities.

Level 2 – Valuations based on (i) quoted prices for similar instruments in active markets; (ii) quoted prices for which identical or similar instruments in markets that are not active that are reflective of recent market transactions; or (iii) models in which all significant inputs are observable, either directly or indirectly. The types of investments generally included in Level 2 are restricted securities listed in active markets, corporate bonds, and certain loans.

Level 3 – Valuations based on indicative quotes that do not reflect recent market transactions and models or other valuation techniques in which the inputs are unobservable and significant to the fair value measurement, which includes situations where there is little, if any, market activity for the asset or liability. The inputs used in determination of fair value require significant judgment and estimation. The types of investments generally included in Level 3 are privately held debt and equity securities.

The Company has established policies and procedures to ensure that valuation methodologies for investments that are categorized within all levels of the fair value hierarchy are fair and consistent. Valuations of the investments are reviewed and approved quarterly by the Adviser’s Valuation Committee, which is responsible for establishing the valuation policies and procedures and evaluating the overall fairness and consistent application of those policies. The valuation process may include a review or analysis by an independent, third-party valuation firm. The Adviser then recommends the valuations of the Company’s investments to the Board, which is responsible for determining the fair value of the Company's investments on a quarterly basis. The Company is subject to the valuation policies and procedures of the Adviser.

Any changes to the valuation methodology are reviewed by management and the Board to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies.

Currently, the Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of the Company's derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

Rule 2a-5 under the 1940 Act (the "Rule 2a-5") establishes a regulatory framework for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits boards, subject to board oversight and certain other conditions, to designate certain parties to perform the fair value determinations. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must determine the fair value of a security. Rule 31a-4 under the 1940 Act (“Rule 31a-4”), provides the record keeping requirements associated with fair value determinations. While the Board has not designated the Adviser as the valuation designee, the Company has established policies and procedures in compliance with the applicable requirements of Rule 2a-5 and Rule 31a-4.

Derivative Instruments

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The Company follows the guidance in ASC Topic 815, Derivatives and Hedging, when accounting for derivative instruments. The Company designated certain interest rate swaps as hedging instruments in a qualifying fair value hedge accounting relationship and, as a result, the change in fair value of the hedging instruments and hedged items are recorded in interest expense and recognized as components of “Interest and credit facility fees payable” in the Company’s consolidated statements of operations. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the corresponding fixed rate debt. See "Note 5. Derivative Instruments" for more information.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by FASB. ASUs not listed were assessed and either determined to be not applicable or expected to have a minimal impact on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Improvement to Reportable Segment Disclosures. ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis. ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted; however, the Company has not elected to adopt this provision as of the date of the financial statements contained in this quarterly report. The Company is still assessing the impact of the new guidance.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The amendments in this update require more disaggregated information on income taxes paid. ASU 2023-09 is effective for years beginning after December 15, 2024. Early adoption is permitted, however the Company has not elected to adopt this provision as of the date of the financial statements contained in this report. The Company is still assessing the impact of the new guidance.

Segments

The Company invests in various industries. The Company separately evaluates the performance of each of its investment relationships. However, because each of these investment relationships has similar business and economic characteristics, they have been aggregated into a single investment segment. All applicable segment disclosures are included in or can be derived from the Company’s consolidated financial statements (See "Note 3. Investments").

Company Investment Risk, Concentration of Credit Risk, and Liquidity Risk

The Company has broad discretion in making investments. Investments generally consist of debt instruments that may be affected by business, financial market or legal uncertainties. Prices of investments may be volatile, and a variety of factors that are inherently difficult to predict, such as economic conditions in the United States, may significantly affect the results of the Company’s activities and the value of its investments. In addition, the value of the Company’s portfolio may fluctuate as the general level of interest rates fluctuate.

The value of the Company’s investments in loans may be detrimentally affected to the extent, among other things, that a borrower defaults on its obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan, observable secondary or primary market yields for similar instruments issued by comparable companies increase materially or risk premiums required in the market between smaller companies, such as the Company's borrowers, and those for which market yields are observable increase materially.

The Company’s assets may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

Note 3. Investments

The following table shows the amortized cost and the fair value of the Company’s portfolio investments as of September 30, 2024 (dollars in thousands):


	As of September 30, 2024
	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Loans	$	593,871		76.4	%	$	587,588		76.7	%
Equity		4,762		0.6			4,361		0.6
Subordinated Certificates of the SDLP		179,126		23.0			173,772		22.7
Total Investments	$	777,759		100.0	%	$	765,721		100.0	%

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The following table shows the amortized cost and the fair value of the Company’s portfolio investments as of December 31, 2023 (dollars in thousands):


	As of December 31, 2023
	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Loans	$	506,153		72.5	%	$	497,911		72.6	%
Equity		3,989		0.6			3,641		0.5
Subordinated Certificates of the SDLP		188,471		26.9			184,485		26.9
Total Investments	$	698,613		100.0	%	$	686,037		100.0	%

The following table shows the composition of the Company’s portfolio investments by industry grouping at amortized cost and the fair value as of September 30, 2024 (dollars in thousands):


	As of September 30, 2024
Commercial Services & Supplies	Amortized Cost		Percentage			Fair Value		Percentage
Investment Funds and Vehicles (1)	$	179,126		23.0	%	$	173,772		22.7	%
Health Care Providers & Services		104,395		13.4			104,007		13.6
Health Care Equipment & Supplies		42,898		5.5			42,839		5.6
Commercial Services & Supplies		37,291		4.8			37,686		4.9
Distributors		36,524		4.7			35,647		4.6
IT Services		35,124		4.5			35,360		4.6
Automobile Components		34,678		4.5			33,019		4.3
Aerospace & Defense		30,966		4.0			31,194		4.1
Diversified Consumer Services		29,111		3.7			26,423		3.5
Personal Care Products		21,629		2.8			21,246		2.8
Food Products		20,785		2.7			20,266		2.6
Containers & Packaging		20,383		2.6			19,009		2.5
Health Care Technology		19,782		2.5			19,858		2.6
Electronic Equipment, Instruments & Components		17,189		2.2			17,258		2.2
Ground Transportation		16,462		2.1			16,251		2.1
Chemicals		17,400		2.2			17,188		2.2
Life Sciences Tools & Services		15,288		2.0			15,191		2.0
Trading Companies & Distributors		14,765		1.9			14,958		2.0
Pharmaceuticals		12,677		1.6			13,002		1.7
Consumer Staples Distribution & Retail		11,621		1.5			11,888		1.6
Software		10,799		1.4			10,807		1.4
Insurance		9,915		1.3			9,632		1.3
Household Products		9,284		1.2			9,220		1.2
Energy Equipment & Services		8,270		1.1			8,348		1.1
Textiles, Apparel & Luxury Goods		6,838		0.9			6,963		0.9
Air Freight & Logistics		6,676		0.9			6,651		0.9
Hotels, Restaurants & Leisure		4,780		0.6			4,900		0.6
Construction & Engineering		2,273		0.3			2,294		0.3
Transportation Infrastructure		471		0.1			477		0.1
Diversified Telecommunication Services(2)		306	0.0				313	0.0
Financial Services(2)		53	0.0				54	0.0
Total Investments	$	777,759		100.0	%	$	765,721		100.0	%

(1) The following industry is solely comprised of the Subordinated Certificates of the SDLP. The portfolio companies in SDLP represent a diverse set of industry classifications, which are similar to those in which the Company invests directly. See “Senior Direct Lending Program” below.

(2) Represents a percentage that is less than 0.1%.

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The following table shows the composition of the Company’s portfolio investments by industry grouping at amortized cost and the fair value as of December 31, 2023 (dollars in thousands):


	As of December 31, 2023
	Amortized Cost		Percentage			Fair Value		Percentage
Investment Funds and Vehicles (1)	$	188,471		26.9	%	$	184,485		26.9	%
Health Care Providers & Services		113,201		16.2			112,463		16.4
Auto Components		39,394		5.6			37,685		5.5
Diversified Consumer Services		37,219		5.3			36,881		5.4
Aerospace & Defense		28,706		4.1			28,341		4.1
Distributors		26,990		3.9			25,892		3.8
Commercial Services & Supplies		26,923		3.9			25,799		3.8
Health Care Technology		26,816		3.8			26,788		3.9
Personal Products		21,256		3.0			20,133		2.9
Insurance		20,752		3.0			20,597		3.0
Software		20,415		2.9			20,389		3.0
Containers & Packaging		19,008		2.7			18,100		2.6
Food Products		17,389		2.5			16,899		2.5
Health Care Equipment & Supplies		17,053		2.5			16,965		2.5
Road & Rail		16,629		2.4			16,389		2.4
Electronic Equipment, Instruments & Components		13,579		2.0			13,510		2.0
Professional Services		11,547		1.7			11,543		1.7
Household Products		9,353		1.3			9,177		1.3
Trading Companies & Distributors		9,310		1.3			9,407		1.4
IT Services		8,531		1.2			8,502		1.2
Energy Equipment & Services		8,320		1.2			8,392		1.2
Chemicals		8,129		1.2			7,887		1.1
Hotels, Restaurants & Leisure		4,804		0.7			4,938		0.7
Food & Staples Retailing		2,862		0.4			2,869		0.4
Construction & Engineering		662		0.1			676		0.1
Transportation Infrastructure		469		0.1			480		0.1
Pharmaceuticals		466		0.1			483		0.1
Diversified Telecommunication Services(2)		307	0.0				315	0.0
Capital Markets(2)		52	0.0				52	0.0
Total Investments	$	698,613		100.0	%	$	686,037		100.0	%

(2) Represents a percentage that is less than 0.1%.

Transactions With Controlled/Affiliated Companies

During the nine months ended September 30, 2024, the Company had an investment in one portfolio company designated as a controlled investment under the 1940 Act. Transactions with the controlled investment were as follows (dollars in thousands):


Controlled Investment	Type of Investment	Fair Value at December 31, 2023		Purchases of Investments		Payment-in-kind and other adjustments to cost			Principal repayments			Unrealized appreciation/ (depreciation)			Realized Gain/(Loss)		Fair Value at September 30, 2024		Income Earned
Senior Direct Lending Program	Subordinated Certificates of the SDLP	$	184,485	$	21,720	$	(1,605	)	$	(29,461	)	$	(1,367	)	$	—	$	173,772	$	21,451

During the nine months ended September 30, 2023, the Company had an investment in one portfolio company designated as a controlled investment under the 1940 Act. Transactions with the controlled investment were as follows (dollars in thousands):


Controlled Investment	Type of Investment	Fair Value at December 31, 2022		Purchases of Investments		Payment-in-kind and other adjustments to cost		Principal repayments			Unrealized appreciation/ (depreciation)			Realized Gain/(Loss)		Fair Value at September 30, 2023		Income Earned
Senior Direct Lending Program	Subordinated Certificates of the SDLP	$	178,367	$	15,793	$	—	$	(18,250	)	$	(2,237	)	$	—	$	173,673	$	19,163

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Senior Direct Lending Program

In 2015, VSDLP, a wholly owned subsidiary of the Company, and Ares Capital Corporation (“ARCC”) formed SDLP, a joint venture established for the purpose of providing senior stretch and unitranche loan financings to middle market borrowers. The Company received, indirectly through its membership interest in VSDLP, limited liability company membership interests and Subordinated Certificates (as defined below), in each case in SDLP, as a result of the Merger. The SDLP finances its investment activity through the issuance of securities (“SDLP Securities”) backed by its loan portfolio, including, in order of seniority, rated senior notes (the “Senior Note”), a rated intermediate funding note (the “IFN”), and capital provided by the Company and ARCC through subordinated certificates (the “Subordinated Certificates”). The Subordinated Certificates are the most junior securities issued by SDLP and collateralize the profits earned or losses incurred across the SDLP loan portfolio. As of September 30, 2024 and December 31, 2023, the Company and ARCC own 12.5% and 87.5%, respectively, of the outstanding Subordinated Certificates.

SDLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of SDLP must be approved by an investment committee of SDLP consisting of representatives of the Company (and/or VSDLP) and ARCC (the “SDLP Investment Committee”).

As of September 30, 2024 and December 31, 2023, the Company and ARCC had agreed to make capital available to the SDLP totaling $1.7 billion and $1.7 billion, respectively, in the aggregate, of which $206.3 million and $206.3 million, respectively is to be made available from the Company. The Company and ARCC will continue to provide capital to the SDLP in the form of Subordinated Certificates. This capital will only be committed to the SDLP upon approval of transactions by the SDLP Investment Committee as discussed above. As of September 30, 2024 and December 31, 2023, the Company has funded $182.0 million and $189.7 million, respectively, of its commitment to the SDLP and had $24.3 million and $16.6 million in unfunded commitments remaining to the SDLP, respectively.

The Subordinated Certificates pay a coupon equal to SOFR plus 8.0% and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, after expenses, which may result in a return to the holders of the Subordinated Certificates that is greater than the stated coupon. The Subordinated Certificates are junior in right of payment to the Senior Notes and IFNs.

The amortized cost and fair value of the Subordinated Certificates held by the Company were $179.1 million and $173.8 million, respectively, as of September 30, 2024, and $188.5 million and $184.5 million, respectively, as of December 31, 2023. The Company’s yield on its investment in the Subordinated Certificates at amortized cost and fair value was 14.5% and 15.0%, respectively, as of September 30, 2024, and 14.3% and 14.6%, respectively, as of December 31, 2023. For the three and nine months ended September 30, 2024, the Company earned interest income of $6.5 million and $21.5 million, respectively, from its investment in the Subordinated Certificates. For the three and nine months ended September 30, 2023, the Company earned interest income of $6.9 million and $19.2 million, respectively, from its investment in the Subordinated Certificates. As of September 30, 2024 and December 31, 2023, $6.5 million and $6.8 million, respectively, was in Interest receivable on the consolidated statements of assets and liabilities.

As of September 30, 2024 and December 31, 2023, the SDLP’s portfolio was comprised entirely of first lien senior secured loans to U.S. middle-market companies and were in industries similar to the companies in the Company’s portfolio. As of September 30, 2024, loans in one portfolio company was on non-accrual status. As of December 31, 2023, loans in one portfolio company were on non-accrual status. Below is a summary of the SDLP’s portfolio as of September 30, 2024 and December 31, 2023 (dollars in millions):


	As of September 30, 2024		As of December 31, 2023
Total first lien senior secured loans(1)	$	4,889	$	5,431
Largest loan to a single borrower(1)	$	367	$	370
Total of five largest loans to borrower(1)	$	1,686	$	1,650
Number of borrowers in the SDLP		19		22
Commitments to fund delayed draw loans (2)	$	291	$	260

(1) At principal amount.

(2) As discussed above, these commitments have been approved by the SDLP Investment Committee

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Below is a listing of SDLP’s individual investments as of September 30, 2024 (dollars in thousands):

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Company	Type of Investment	Reference Rate and Spread (1)				Interest Rate	Maturity	Par		Amortized Cost		Fair Value		Footnotes
Senior Secured First Lien Loans
Aerospace & Defense
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/31/2027	$	156,379	$	156,379	$	156,379	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/31/2027		45,561		45,561		45,561	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/31/2027		40,794		40,794		40,794	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/31/2027		11,390		11,390		11,390	(2)
Qnnect, LLC and Connector TopCo, LP	Delayed Draw Term Loan	SOFR	+	6.75%	(Q)	11.83%	11/2/2029		273,096		273,096		273,096	(2)
Qnnect, LLC and Connector TopCo, LP	Delayed Draw Term Loan	SOFR	+	6.75%	(Q)	11.83%	11/2/2029		3,155		3,155		3,155	(2)
											530,375		530,375
Automobile Components
Arrowhead Holdco Company	Term Loan	SOFR	+	5.25%	(Q)	10.46%	8/31/2028		173,104		173,104		154,063	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	5.25%	(Q)	10.46%	8/31/2028		35,708		35,708		31,780	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	5.25%	(Q)	10.46%	8/31/2028		41,008		41,008		36,497	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	2.50%	(Q)	7.71%	8/31/2028		25,465		25,465		22,664	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	5.25%	(Q)	10.46%	8/31/2028		2,326		2,326		2,070	(2)
North Haven Falcon Buyer, LLC	Delayed Draw Term Loan	SOFR	+	8.00%	(Q)	13.12%	5/19/2027		200,710		200,709		158,561	(2)
North Haven Falcon Buyer, LLC	Delayed Draw Term Loan	SOFR	+	8.00%	(Q)	12.60%	5/19/2027		33,608		33,559		26,551	(2)
											511,879		432,186
Chemicals
SePRO Holdings, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.53%	7/26/2030		118,611		118,611		116,239	(2)
											118,611		116,239
Commercial Services & Supplies
ISQ Hawkeye HoldCo, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.63%	8/20/2031		226,650		226,650		226,650	(2)
ISQ Hawkeye HoldCo, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.63%	8/20/2031		82,538		82,538		82,538	(2)
Pritchard Industries, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.26%	10/13/2027		196,370		196,370		192,443	(2)
Pritchard Industries, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.26%	10/13/2027		46,951		46,951		46,012	(2)
											552,509		547,643
Construction & Engineering
Valcourt Holdings II, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.03%	11/21/2029		260,562		260,562		260,562	(2)
Valcourt Holdings II, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.03%	11/21/2029		53,811		53,811		53,811	(2)
											314,373		314,373
Consumer Staples Distribution & Retail
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.20%	3/30/2026		168,750		168,750		168,750	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.20%	3/30/2026		4,219		4,219		4,219	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.20%	3/30/2026		64,487		64,487		64,487	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	3/30/2026		83,353		83,353		83,353	(2)
											320,809		320,809
Food Products
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	10.95%	12/10/2026		175,766		175,766		147,644	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	10.95%	12/10/2026		29,069		29,069		24,418	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	10.95%	12/10/2026		13,863		13,863		11,645	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	10.95%	12/10/2026		46,771		46,771		39,288	(2)
											265,469		222,995
Health Care Providers and Services
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		132,765		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		7,307		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		19,452		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		4,820		—		—	(2)(3)
NMN Holdings III Corp	Term Loan	SOFR	+	4.50%	(M)	9.35%	7/31/2031		229,508		229,508		227,213	(2)
											229,508		227,213
Hotels, Restaurants & Leisure
Triwizard Holdings, Inc.	Term Loan	SOFR	+	5.25%	(Q)	9.85%	6/29/2029		167,875		167,875		167,875	(2)
Triwizard Holdings, Inc.	Term Loan	SOFR	+	5.25%	(Q)	10.35%	6/29/2029		59,850		59,850		59,850	(2)
Triwizard Holdings, Inc.	Term Loan	SOFR	+	5.25%	(Q)	10.49%	6/29/2029		20,850		20,850		20,721	(2)
Concert Golf Partners Holdco LLC	Term Loan	SOFR	+	4.75%	(M)	9.63%	4/1/2030		231,667		231,667		231,667	(2)

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Concert Golf Partners Holdco LLC	Term Loan	SOFR	+	4.75%	(M)	9.63%	4/1/2030	43,583		43,583		43,583	(2)
Concert Golf Partners Holdco LLC	Term Loan	SOFR	+	4.75%	(M)	9.63%	4/1/2030	4,469		4,469		4,469	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.71%	6/8/2026	102,638		102,638		102,638	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.00%	6/8/2026	50,000		50,000		50,000	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.66%	6/8/2026	24,483		24,483		24,483	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	10.50%	6/8/2026	74,355		74,355		74,355	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	9.25%	6/8/2026	108,604		108,604		108,604	(2)
										888,374		888,245
Household Products
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(M)	10.45%	11/9/2027	300,825		300,825		291,800	(2)
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	10.45%	11/9/2027	26,460		26,460		25,666	(2)
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(M)	10.45%	11/9/2027	40,044		40,044		38,843	(2)
										367,329		356,309
Insurance
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	12/2/2026	204,579		204,579		204,579	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	12/2/2026	57,868		57,868		57,868	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	12/2/2026	24,275		24,275		24,275	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	12/2/2026	14,438		14,438		14,438	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(M)	10.45%	12/2/2026	22,694		22,694		22,694	(2)
										323,854		323,854
Machinery
Harvey Tool Company, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(M)	10.35%	10/26/2027	220,501		220,501		220,501	(2)
Harvey Tool Company, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.45%	10/26/2027	34,677		34,677		34,677	(2)
Harvey Tool Company, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(M)	10.35%	10/26/2027	12,915		12,915		12,915	(2)
										268,093		268,093
Trading Companies & Distributors
Penn Detroit Diesel Allison, LLC	Term Loan	SOFR	+	5.75%	(S)	10.70%	12/14/2027	32,913		32,913		32,913	(2)
										32,913		32,913

Total Investments, September 30, 2024									$	4,724,096	$	4,581,247

(1) Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to SOFR, or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower’s option, which reset semi-annually (S), quarterly (Q), or monthly (M). For each such loan, the interest rate provided was the rate in effect as of September 30, 2024.

(2) Loan includes interest rate floor feature.

(3) The investment was on non-accrual status as of September 30, 2024.

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Below is a listing of SDLP’s individual investments as of December 31, 2023 (dollars in thousands):


Company	Type of Investment	Reference Rate and Spread (1)				Interest Rate	Maturity	Par		Amortized Cost		Fair Value		Footnotes
Senior Secured First Lien Loans
Aerospace & Defense
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	11.46%	8/31/2027	$	11,478	$	11,478	$	11,363	(2)
Precinmac (US) Holdings Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(M)	11.46%	8/31/2027		45,911		45,911		45,452	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.54%	8/31/2027		157,588		157,588		156,012	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	11.46%	8/31/2027		41,110		41,110		40,699	(2)
Qnnect, LLC and Connector TopCo, LP	Delayed Draw Term Loan	SOFR	+	7.00%	(Q)	12.38%	11/2/2029		3,179		3,179		3,179	(2)
Qnnect, LLC and Connector TopCo, LP	Term Loan	SOFR	+	7.00%	(Q)	12.38%	11/2/2029		275,175		275,175		275,175	(2)
											534,441		531,880
Auto Components
Arrowhead Holdco Company	Term Loan	SOFR	+	4.50%	(Q)	10.04%	8/31/2028		169,531		169,531		152,578	(2)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	4.50%	(Q)	10.05%	8/31/2028		34,859		34,859		31,373	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	4.50%	(Q)	10.05%	8/31/2028		24,859		24,859		22,374	(2)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	4.50%	(Q)	10.05%	8/31/2028		2,270		2,270		2,043	(2)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	4.50%	(Q)	10.05%	8/31/2028		40,033		40,033		36,030	(2)
North Haven Falcon Buyer, LLC	Delayed Draw Term Loan	SOFR	+	8.00%	(Q)	13.50%	5/19/2027		32,199		32,199		26,081	(2)
North Haven Falcon Buyer, LLC	Term Loan	SOFR	+	8.00%	(Q)	13.52%	5/19/2027		192,273		192,272		155,741	(2)
											496,023		426,220
Commercial Services & Supplies
ISQ Hawkeye HoldCo, Inc.	Term Loan	SOFR	+	6.00%	(M)	11.38%	8/17/2029		228,385		228,385		228,385	(2)
ISQ Hawkeye HoldCo, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(M)	11.38%	8/17/2029		67,198		67,198		67,198	(2)
Pritchard Industries, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	10.93%	10/13/2027		47,311		47,311		46,365	(2)
Pritchard Industries, LLC	Term Loan	SOFR	+	5.50%	(Q)	10.93%	10/13/2027		197,885		197,885		193,927	(2)
Valcourt Holdings II, LLC	Term Loan	SOFR	+	5.75%	(S)	11.27%	11/21/2029		262,536		262,536		257,286	(2)
Valcourt Holdings II, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(S)	11.27%	11/21/2029		—		—		—	(2)
											803,315		793,161
Diversified Consumer Services
Excelligence Learning Corporation	Term Loan	SOFR	+	6.00%	(Q)	11.46%	1/18/2024		145,432		145,429		145,432	(2)
											145,429		145,432
Food & Staples Retailing
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	3/28/2025		83,991		83,991		83,991	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.71%	3/28/2025		64,989		64,989		64,989	(2)
FS Squared Holding Corp.	Term Loan	SOFR	+	5.25%	(M)	10.71%	3/28/2025		170,089		170,089		170,089	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.71%	3/28/2025		4,252		4,252		4,252	(2)
											323,321		323,321
Food Products
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	11.46%	12/10/2026		13,970		13,970		13,132	(2)
Manna Pro Products, LLC	Delayed Draw Term Loan	SOFR	+	6.00%	(M)	11.46%	12/10/2026		29,294		29,294		27,536	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	11.46%	12/10/2026		47,131		47,131		44,303	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	11.46%	12/10/2026		177,136		177,136		166,508	(2)
											267,531		251,479
Health Care Providers and Services
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		4,820		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		19,452		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		132,765		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		7,307		—		—	(2)(3)
											—		—
Hotels, Restaurants & Leisure
Triwizard Holdings, Inc.	Term Loan	SOFR	+	6.25%	(Q)	11.72%	6/29/2029		169,150		169,150		169,150	(2)

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Triwizard Holdings, Inc.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.72%	6/29/2029	—		—		—	(2)
Concert Golf Partners Holdco LLC	Term Loan	SOFR	+	5.50%	(Q)	11.25%	4/2/2029	233,445		233,445		233,445	(2)
Concert Golf Partners Holdco LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.25%	4/2/2029	40,012		40,012		40,012	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.03%	6/8/2026	24,670		24,670		24,670	(2)
HGC Holdings, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.04%	6/8/2026	103,425		103,425		103,425	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.08%	6/8/2026	50,000		50,000		50,000	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.62%	6/8/2026	53,865		53,865		53,865	(2)
										674,567		674,567
Household Products
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.00%	11/9/2027	303,188		303,188		300,156	(2)
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.00%	11/9/2027	40,367		40,367		39,963	(2)
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.00%	11/9/2027	26,670		26,670		26,403	(2)
										370,225		366,522
Insurance
Benecon Midco II, LLC	Term Loan	SOFR	+	5.25%	(M)	10.71%	12/4/2026	170,188		170,188		170,188	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	24,463		24,463		24,463	(2)
THG Acquisition, LLC	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	14,550		14,550		14,550	(2)
THG Acquisition, LLC	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	206,190		206,190		206,190	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	58,320		58,320		58,320	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	22,025		22,025		21,805	(2)
										495,736		495,516
Machinery
Harvey Tool Company, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.03%	10/26/2027	34,940		34,940		34,591	(2)
Harvey Tool Company, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.00%	10/26/2027	221,631		221,631		219,415	(2)
NCWS Intermediate, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.53%	12/29/2026	61,696		61,696		61,696	(2)
NCWS Intermediate, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.53%	12/29/2026	205,398		205,398		205,398	(2)
NCWS Intermediate, Inc.	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	12.03%	12/29/2026	12,600		12,600		12,600	(2)
										536,265		533,700
Software
Emergency Communications Network, LLC	Term Loan	SOFR	+	8.75%	(Q)	14.13%	6/30/2024	252,313		252,295		219,512	(2)
Pegasus Global Enterprise Holdings, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.75%	5/29/2025	259,306		259,306		259,306	(2)
Pegasus Global Enterprise Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.75%	5/29/2025	75,601		75,601		75,601	(2)
										587,202		554,419
Trading Companies & Distributors
Penn Detroit Diesel Allison, LLC	Term Loan	SOFR	+	6.25%	(M)	11.71%	12/14/2027	32,913		32,913		32,913	(2)
										32,913		32,913

Total Investments, December 31, 2023									$	5,266,968	$	5,129,130

(1) Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to LIBOR, SOFR, or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower’s option, which reset semi-annually (S), quarterly (Q), or monthly (M). For each such loan, the interest rate provided was the rate in effect as of December 31, 2023.

(2) Loan includes interest rate floor feature.

(3) The investment was on non-accrual status as of December 31, 2023.

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Below are the consolidated statements of assets and liabilities for SDLP (dollars in millions):


	As of September 30, 2024		As of December 31, 2023
	(unaudited)
Selected Consolidated Statements of Assets and Liabilities Information:
Investments in loans at fair value (cost of $4,724 and $5,267, respectively)	$	4,581	$	5,129
Restricted cash		137		150
Other Assets		32		42
Total assets	$	4,750	$	5,321

Senior notes	$	3,319	$	3,705
Intermediate funding notes		125		139
Interest payable		74		79
Other liabilities		56		57
Total liabilities		3,574		3,980
Members' capital		1,176		1,341
Total liabilities and members' capital	$	4,750	$	5,321

Below are the consolidated statements of operations for SDLP (dollars in millions):


	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
Selected Consolidated Statement of Operation Information:
Total revenues	$	137		$	145		$	420		$	421
Total expenses		79			83			241			236
Net unrealized appreciation/(depreciation)		68			154			(4	)		69
Net realized gain/(loss)		(93	)		(148	)		(93	)		(148	)
Net income/(loss)	$	33		$	68		$	82		$	106

In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, the Company must determine if any of its portfolio companies is considered a “significant subsidiary.” Pursuant to the definition of “significant subsidiary” applicable to investment companies set forth in Rule 1-02(w) of Regulation S-X, a portfolio company will meet the definition of “significant subsidiary” if either the investment test or the income test is triggered. Rule 3-09 of Regulation S-X requires the Company to include separate audited financial statements of any unconsolidated majority-owned subsidiary (portfolio company in which the Company owns greater than 50% of the unconsolidated subsidiary) in the Company's annual report on Form 10-K if one of the following conditions are met: (i) if the portfolio investment’s fair value exceeds 20% of the Company’s total investments at fair value (the investment test); or (ii) either (A) if the income from the portfolio investment exceeds 80% of the Company’s absolute value of the change in net assets from operations of the Company and its subsidiaries (the income test) or (B) if the income from the portfolio investment exceeds 20% of the Company’s absolute value of the change in net assets from operations of the Company and its subsidiaries and have a fair value exceeding 5% of the Company’s total investment fair value (the alternate income test). If the Company has an unconsolidated majority-owned subsidiary and does not satisfy any Rule 3-09 significant subsidiary conditions during a quarter end, the Company must include a summarized income statement within the notes to the quarterly financial statements.

Rule 4-08(g) of Regulation S-X requires the Company to include summarized financial information of any unconsolidated controlled subsidiary (portfolio company in which the Company owns greater than 25% of the voting securities of the unconsolidated subsidiary or otherwise controls the subsidiary) in the Company's annual report on Form 10-K if one of the following conditions are met: (i) if the portfolio investment’s fair value exceeds 10% of the Company’s total investments fair value (the investment test); or (ii) either (A) if the income from the portfolio investment exceeds 80% of the Company’s absolute value of the change in net assets from operations of the Company and its subsidiaries (the income test) or (B) if the income from the portfolio investment income exceeds 10% of the Company’s absolute value of the change in net assets from operations of the Company and its subsidiaries and have a fair value exceeding 5% of the Company’s total investment fair value (the alternate income test).

After performing the investment analysis and income analysis for the nine months ended September 30, 2024, the Company determined that the fair value of the SDLP represented greater than 20% of the Company's total investments (at fair value) and also generated more

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than 20% of the Company’s total income. Accordingly, the related summary financial information is presented in the "Senior Direct Lending Program" heading above.

Note 4. Fair Value Measurements

The following table presents the fair value measurements of the Company's investments, by major class according to the fair value hierarchy, as of September 30, 2024 (dollars in thousands):


	As of September 30, 2024
Investments	Level 1		Level 2		Level 3		Total
Senior Secured First Lien Loans	$	—	$	88	$	587,500	$	587,588
Equity		—		—		4,361		4,361
Subordinated Certificates of the SDLP		—		—		173,772		173,772
Total investments at fair value	$	—	$	88	$	765,633	$	765,721
Interest rate swaps		—		401		—		401
Total interest rate swaps	$	—	$	401	$	—	$	401

The following table presents the fair value measurements of the Company's investments, by major class according to the fair value hierarchy, as of December 31, 2023 (dollars in thousands):


	As of December 31, 2023
Investments	Level 1		Level 2		Level 3		Total
Senior Secured First Lien Loans	$	—	$	89	$	497,822	$	497,911
Equity		—		—		3,641		3,641
Subordinated Certificates of the SDLP		—		—		184,485		184,485
Total investments at fair value	$	—	$	89	$	685,948	$	686,037
Derivative contracts payable, at fair value		—		91		—		91
Total Derivative contracts payable, at fair value	$	—	$	91	$	—	$	91

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the nine months ended September 30, 2024 (dollars in thousands):




	Senior Secured First Lien Loans			Equity			Subordinated Certificates of the SDLP			Total
Balance as of December 31, 2023	$	497,822		$	3,641		$	184,485		$	685,948
Purchases		180,260			774			21,720			202,754
Payment-in-kind and other adjustments to cost		2,762			(1	)		(1,605	)		1,156
Principal repayments		(97,924	)		—			(29,461	)		(127,385	)
Net realized gains/(losses)		179			—			—			179
Net amortization of premium/discount		2,441			—			—			2,441
Net change unrealized gains/(losses)		1,960			(53	)		(1,367	)		540
Balance as of September 30, 2024	$	587,500		$	4,361		$	173,772		$	765,633
Net change unrealized appreciation/(depreciation) for investments still held as of September 30, 2024	$	(6,278	)	$	(400	)	$	(5,354	)	$	(12,032	)

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended December 31, 2023 (dollars in thousands):

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	Senior Secured First Lien Loans			Equity			Subordinated Certificates of the SDLP			Total
Balance as of December 31, 2022	$	483,740		$	2,633		$	178,367		$	664,740
Purchases		64,281			51			25,562			89,894
Payment-in-kind and other adjustments to cost		656			—			(1,230	)		(574	)
Principal repayments		(53,083	)		—			(17,868	)		(70,951	)
Net realized gains/(losses)		(289	)		—			—			(289	)
Net amortization of premium/discount		1,838			—			—			1,838
Net change unrealized gains/(losses)		679			(348	)		(346	)		(15	)
Transfer into Level 3		—			1,305			—			1,305
Balance as of December 31, 2023	$	497,822		$	3,641		$	184,485		$	685,948
Net change unrealized appreciation/(depreciation) for investments still held as of December 31, 2023	$	(8,237	)	$	(348	)	$	(3,987	)	$	(12,572	)

The Company conducts a review of the fair value hierarchy classifications on a quarterly basis. The Company monitors the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Changes in economic conditions or model based valuation techniques may require the transfer of financial instruments from one fair value level to another. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the quarter in which the reclassifications occur. For the nine months ended September 30, 2024, the Company had no investments transferred in/out of the Level 3 category. For the year ended December 31, 2023, there were no investments transferred out of Level 3 however, the Company had two equity investments with an aggregate fair value of $1.3 million transfer from being measured at NAV to Level 3 as a result of changes in the observability of significant inputs.

The following table presents the quantitative information about Level 3 fair value measurements of the Company's investments, as of September 30, 2024 (dollars in thousands):


	As of September 30, 2024
	Fair Value		Valuation Techniques	Significant Unobservable Inputs	Range of Significant Unobservable Inputs	Weighted Average (1)
Senior Secured First Lien Term Loans	$	500,823	Income Approach (DCF)	Discount Rate	6.8% - 62.6%	10.1%
Senior Secured First Lien Term Loans		76,402	Recent Transaction	Transactions Prices	98.0% - 99.0%	98.3%
Senior Secured First Lien Term Loans		10,274	Recovery	EV/EBITDA	10.1x - 11.7x	10.9x
Equity		2,552	Income Approach (DCF)	Long Term Growth Rate, Discount Rate	7.9% -11.8%	9.4%
			EBITDA Multiple	EBITDA Multiple	8.5x - 17.3x	15.0x
Equity		1,685	Market Approach	EBITDA Multiple	8.5x - 26.0x	15.6x
Equity		125	Recent Transaction	Transactions Prices	100% - 100%	100.0%
Subordinated Certificates of the SDLP		173,772	Income Approach (DCF)	Discount Rate	8.5% - 9.5%	8.9%
Total	$	765,633

(1) Unobservable inputs were weighted by the fair value of the investments.

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The following table presents the quantitative information about Level 3 fair value measurements of the Company's investments, as of December 31, 2023 (dollars in thousands):


	As of December 31, 2023
	Fair Value		Valuation Techniques	Significant Unobservable Inputs	Range of Significant Unobservable Inputs	Weighted Average (1)
Senior Secured First Lien Term Loans	$	476,551	Income Approach (DCF)	Discount Rate	8.4% - 16.5%	10.5%
Senior Secured First Lien Term Loans		21,271	Recent Transaction	Transactions Prices	97.0% - 98.9%	97.7%
Equity		1,735	Income Approach (DCF)	Long Term Growth Rate, Discount Rate	7.5% -10.5%	8.8%
			Market Approach	EBITDA Multiple	10.5x - 17.6x	13.5x
Equity		1,101	Market Approach	EBITDA Multiple	11.0x - 20.0x	14.4x
Equity		805	Recent Transaction	Transactions Price	100.0% - 100.0%	100.0%
Subordinated Certificates of the SDLP		184,485	Income Approach (DCF)	Discount Rate	8.5% -9.5%	9.5%
Total	$	685,948

(1) Unobservable inputs were weighted by the fair value of the investments.

Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.

Note 5. Derivative Instruments

The Company enters into derivative instruments from time to time to help mitigate interest rate risk exposures. Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements but do not meet the strict hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. On February 2, 2024, in connection with each of the 2026 Notes and the 2028 Notes (as defined in "Note 6. Borrowings"), the Company entered into an interest rate swap agreement with CIBC Bank USA ("CIBC"). As of September 30, 2024, the Company had two outstanding interest rates swaps that were designated as hedges in qualifying hedging relationships (as detailed below). As of December 31, 2023, the Company had two outstanding interest rates swaps that were not designated as hedges in qualifying hedging relationships (as detailed below). The counterparty to all of these interest rate swap contracts was CIBC.

Certain information related to the Company's derivative instruments as of September 30, 2024 is presented in the consolidated statements of assets and liabilities as follows:


As of September 30, 2024
Derivative Instrument	Notional Amount		Maturity Date	Gross Amount of Recognized Assets		Gross Amount of Recognized Liabilities		Consolidated Statements of Assets and Liabilities Location
Interest rate swap	$	25,000	12/21/2026	$	186	$	—	Other Assets
Interest rate swap		25,000	12/21/2028		215		—	Other Assets
Total	$	50,000		$	401	$	—

Certain information related to the Company's derivative instruments as of December 31, 2023 is presented in the consolidated statements of assets and liabilities as follows:


As of December 31, 2023
Derivative Instrument	Notional Amount		Maturity Date	Gross Amount of Recognized Assets		Gross Amount of Recognized Liabilities		Consolidated Statements of Assets and Liabilities Location
Interest rate swap	$	25,000	12/21/2026	$	—	$	20	Derivative contracts payable, at fair value
Interest rate swap		25,000	12/21/2028		—		71	Derivative contracts payable, at fair value
Total	$	50,000		$	—	$	91

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The Company records its derivatives on a net basis in the consolidated statements of assets and liabilities. The Company has a master netting agreement with its derivative counterparty which allows for the right to offset by counterparty. As of September 30, 2024 there have been no offsets.

Net unrealized appreciation (depreciation) on derivative instruments recognized by the Company for the three and nine months ended September 30, 2024, is presented in the consolidated statements of operations as follows:


Derivative Instrument	Consolidated Statements of Operations Location	For the three months ended September 30, 2024		For the nine months ended September 30, 2024
Interest rate swaps	Net change in unrealized appreciation (depreciation) on derivatives	$	—	$	91
Total		$	—	$	91

Net unrealized appreciation (depreciation) on derivative instruments recognized by the Company for the three and nine months ended September 30, 2023, is presented in the consolidated statements of operations as follows:


Derivative Instrument	Consolidated Statements of Operations Location	For the three months ended September 30, 2023		For the nine months ended September 30, 2023
Interest rate swaps	Net change in unrealized appreciation (depreciation) on derivatives	$	—	$	—
Total		$	—	$	—

Net realized gain (loss) on derivative instruments recognized by the Company for the three and nine months ended September 30, 2024, is presented in the consolidated statements of operations as follows:


Derivative Instrument	Consolidated Statements of Operations Location	For the three months ended September 30, 2024		For the nine months ended September 30, 2024
Interest rate swaps	Net realized gain (loss) on derivatives	$	—	$	(116	)
Total		$	—	$	(116	)

Net realized gain (loss) on derivative instruments recognized by the Company for the three and nine months ended September 30, 2023, is presented in the consolidated statements of operations as follows:


Derivative Instrument	Consolidated Statements of Operations Location	For the three months ended September 30, 2023		For the nine months ended September 30, 2023
Interest rate swaps	Net realized gain (loss) on derivatives	$	—	$	—
Total		$	—	$	—

Each of the interest rate swap agreements contain a provision whereby if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company also could be declared in default on its derivative obligations. As of September 30, 2024, the termination fair value of derivatives in a net liability position related to these agreements was $0.1 million. As of September 30, 2024, the Company had not posted any collateral related to these agreements.

If the Company had breached any of these provisions at September 30, 2024, it could have been required to settle its obligations under the agreements at their termination fair value.

Note 6. Borrowings

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The ratio of a BDC’s total assets (less total liabilities other than indebtedness represented by senior securities) to its total indebtedness represented by senior securities plus preferred stock, if any, must be at least 200% or 150%, if certain requirements are met. In connection with the Company’s organization and the Initial Closing, the Board and its initial shareholder authorized the Company to adopt the 150% asset coverage ratio. Additionally, investors both consented to the minimum asset coverage ratio of 150% and agreed not to seek to redeem their shares of common stock in connection therewith, in each case in the subscription agreement. As of September 30, 2024, the Company's asset coverage ratio was 208.52%.

The Company’s outstanding debt as of September 30, 2024 and December 31, 2023 was as follows (dollars in thousands):


	As of September 30, 2024								As of December 31, 2023
	Aggregate Principal Amount Available		Principal Amount Outstanding		Carrying Value		Fair Value		Aggregate Principal Amount Available		Principal Amount Outstanding		Carrying Value		Fair Value
JPM Facility	$	300,000	$	260,850	$	260,850	$	260,850	$	300,000	$	233,900	$	233,900	$	233,900
CIBC Facility(1)		-		-		-		-		75,000		7,770		7,770		7,770
SMBC Facility		195,000		62,000		62,000		62,000		—		—		—		—
2026 Notes(2)(3)		25,000		25,000		25,040		25,000		25,000		25,000		25,000		25,000
2028 Notes(2)(3)		25,000		25,000		25,054		25,000		25,000		25,000		25,000		25,000
Total borrowings outstanding	$	545,000	$	372,850	$	372,944	$	372,850	$	425,000	$	291,670	$	291,670	$	291,670

(1) On August 9, 2024, the Company repaid all amounts outstanding under the CIBC Facility, including outstanding borrowings and accrued interest, and terminated the CIBC Facility.

(2) Carrying value represents aggregate principal amount outstanding less unamortized debt issuance costs.

(3) The carrying values of the 2026 Notes and the 2028 Notes as of September 30, 2024 are presented inclusive of an incremental $(0.2) million and $(0.2) million, each resulting from a hedge accounting relationship.

JPM Facility

On June 2, 2022, the Company's wholly owned subsidiary, VCCF, entered into the Loan and Security Agreement (the "Loan and Security Agreement" and the revolving credit facility thereunder, the "JPM Facility") with JPMorgan Chase Bank, National Association, as administrative agent ("JPMorgan").

The JPM Facility currently allows VCCF to borrow up to $300 million, subject to certain leverage and borrowing base restrictions, and may potentially be expanded up to $600 million with the consent of the lenders. The JPM Facility’s reinvestment period ends on June 2, 2025 and has a termination date of June 2, 2027.

The JPM Facility bears interest at an annual rate of: (i) with respect to interest based reference rate other than a term SOFR, the reference rate plus a margin equal to 2.375% per annum; provided that, in the case of advances denominated in British Pounds, the margin shall be 2.494% per annum (ii) with respect to interest based on a term SOFR, the SOFR plus a margin equal to 2.475% per annum and (iii) with respect to interest based on a Base Rate, the Base Rate plus a margin equal to 2.475% per annum. JPMorgan determines the reference rate. The Company paid a fee of 0.50% per annum on the average daily committed but unused amounts under the JPM Facility during its ramp-up period (June 2, 2022 up to but not including March 2, 2023), and, beginning March 3, 2023, pays a fee of 0.75% on annum.

On January 26, 2023, the Company entered into the First Amendment to the Loan and Security Agreement (the “First Amendment”). The First Amendment, among other things: (i) reduces the borrowings available under the JPM Facility from up to $500 million to up to $300 million, subject to certain leverage and borrowing base restrictions; and (ii) reduces the commitment increase, subject to lender consent, from up to $800 million to up to $600 million. The reduction was accounted for as a debt modification to a line-of-credit or revolving-debt arrangement in accordance with ASC 470-50, Modifications and Extinguishments, which attributed to an acceleration of debt financing costs in the amount of $1.4 million and was recorded on the consolidated statements of operations as a component of "Credit facility fees".

On November 20, 2023, the Company entered into the Second Amendment to the Loan and Security Agreement (the "Second Amendment"). The Second Amendment, among other things: (i) permits the inclusion of revolving loans as collateral to the JPM Facility; (ii) decreases the minimum funding amount under the Loan and Agreement from 85% to 75% of the financing commitment which commenced November 21, 2023; and (iii) increases the percentage of Collateral Principal Amount (as defined in the Second Amendment) that may consist of portfolio investments the obligors of which have a leverage ratio equal to or greater than 7.0x from 0.0% to 10.0%.

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At September 30, 2024 and December 31, 2023, the carrying amount of the Company's borrowings under the JPM Facility approximated their fair value. The fair values of the Company's debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Company's borrowings under the JPM Facility would be deemed to be Level 3 investments.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the JPM Facility for the three and nine months ended September 30, 2024 and 2023, respectively (dollars in thousands):


	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
JPM Facility interest	$	5,114		$	4,985		$	14,930		$	14,558
JPM Facility unused fees		74			83			276			273
Amortization of debt issuance costs		125			123			371			1,795
Total interest and financing expenses related to the JPM Facility	$	5,313		$	5,191		$	15,577		$	16,626
Weighted average outstanding debt balance of the JPM Facility	$	261,307		$	251,124		$	251,684		$	259,901
Weighted average interest rate of the JPM Facility (annualized)		7.8	%		7.9	%		7.9	%		7.5	%

CIBC Facility

On January 31, 2023, the Company entered into a Senior Secured Revolving Credit Agreement (the “CIBC Credit Agreement” and the senior secured credit facility thereunder, the “CIBC Facility”) among the Company, as borrower, the lenders party thereto from time to time, the issuing banks party thereto from time to time, and CIBC Bank USA ("CIBC"), as administrative agent and as sole lead arranger. The CIBC Facility was guaranteed by VCCEH, and could have been guaranteed by certain domestic subsidiaries of the Company that would have been formed or acquired by the Company in the future (collectively, the “Guarantors”). Proceeds of the CIBC Facility were used for general corporate purposes, including the funding of portfolio investments. The initial maximum principal amount of the CIBC Facility was $75 million, subject to availability under the borrowing base, which was based on the Company’s and Guarantor’s portfolio investments and other outstanding indebtedness. The CIBC Facility was secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions. The CIBC Facility's commitment termination date was January 31, 2026 and had a final maturity date of January 31, 2028.

The CIBC Facility bore interest from January 1, 2023 to January 31, 2026 (the "Availability Period") at an annual rate of: (i) with respect to interest based on the greatest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 1/2 of 1% and (c) zero (the "ABR"), the ABR plus a margin equal to 1.500% per annum; and (ii) with respect to interest based on a term SOFR, the SOFR plus a margin equal to 2.500% per annum and after the Availability Period at an annual rate of: (i) with respect to interest based on the ABR, the ABR plus a margin equal to 1.750% per annum; and (ii) with respect to interest based on a term SOFR, the SOFR plus a margin equal to 2.750% per annum. CIBC, as the administrative agent, determines the reference rate. The Company paid a fee of 0.375% per annum on the average daily committed but unused amounts under the CIBC Facility during the first nine months of the CIBC Facility (January 31, 2023 up to but not including October 31, 2023), and thereafter, 0.375% if the average daily used amount of the commitment exceeds 25% of the total commitment or otherwise, 0.50%.

On August 9, 2024, the Company terminated in full (i) the CIBC Credit Agreement and the CIBC Facility, and (ii) the security interest over the collateral granted to CIBC as the lender pursuant to the CIBC Credit Agreement and the other Loan Documents (as defined in the CIBC Credit Agreement), each pertaining to the CIBC Facility. The CIBC Facility terminated upon the satisfaction of all obligations and liabilities of the Company to CIBC as the lender thereunder, including, without limitation, payments of principal and interest, other fees, breakage costs and other amounts owing to CIBC. The termination was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which resulted in a realized loss of $0.8 million and was recorded on the Consolidated Statements of Operations as a loss on extinguishment of debt.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the CIBC Facility for the three and nine months ended September 30, 2024 and 2023, respectively (dollars in thousands):

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	For the three months ended September 30,						For the nine months ended September 30,
	2024(1)			2023			2024			2023
CIBC Facility interest	$	490		$	474		$	1,715		$	1,012
CIBC Facility unused fees		16			49			98			140
Amortization of debt issuance costs		26			53			143			142
Total interest and financing expenses related to the CIBC Facility	$	532		$	576		$	1,956		$	1,294
Weighted average outstanding debt balance of the CIBC Facility	$	22,100		$	24,000		$	28,496		$	17,675
Weighted average interest rate of the CIBC Facility (annualized)		8.8	%		7.8	%		8.0	%		7.7	%

(1) On August 9, 2024, the Company repaid all amounts outstanding under the CIBC Facility, including outstanding borrowings and accrued interest, and terminated the CIBC Facility.

SMBC Facility

On August 9, 2024, the Company entered into a Senior Secured Revolving Credit Agreement (the “SMBC Credit Agreement” and the senior secured credit facility thereunder, the “SMBC Facility”) among the Company, as borrower, the lenders party thereto from time to time, the issuing banks party thereto from time to time, and Sumitomo Mitsui Banking Corporation, as administrative agent, sole book runner and lead arranger.

The SMBC Facility is guaranteed by VCCEH, a wholly owned subsidiary of the Company, and will be guaranteed by certain Guarantors. Proceeds of the SMBC Facility may be used for general corporate purposes, including the funding of portfolio investments.

The initial maximum principal amount of the SMBC Facility was $170,000,000, subject to availability under the borrowing base, which is based on the Company’s and Guarantors’ portfolio investments and other outstanding indebtedness. Maximum capacity under the SMBC Facility may be increased to $400,000,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The SMBC Facility is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions.

The availability period under the SMBC Facility will terminate on August 9, 2028 (the “SMBC Commitment Termination Date”) and the SMBC Facility will mature on August 9, 2029 (the “SMBC Maturity Date”). During the period from the SMBC Commitment Termination Date to the SMBC Maturity Date, the Company will be obligated to make mandatory prepayments under the SMBC Credit Agreement out of the proceeds of certain asset sales and other recovery events, equity and debt issuances and other returns of capital and extraordinary receipts.

The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the SMBC Facility will bear interest at either term SOFR plus a 1.000% or 1.125% margin, or the alternate base rate plus a 2.000% or 2.125% margin depending on the SMBC Facilities ratio of the borrowing base compared to the outstanding debt of the SMBC Facility. The Company may elect either the term SOFR or the alternate base rate at the time of drawdown, and loans may be converted from one rate to another at any time at the Company’s option, subject to certain conditions. The Company will also pay a fee of 0.375% on average daily undrawn amounts under the SMBC Facility.

The SMBC Credit Agreement includes customary covenants, including certain limitations on the incurrence by the Company of additional indebtedness and on the Company’s ability to make distributions to its shareholders, or redeem, repurchase or retire shares of stock, upon the occurrence of certain events and certain financial covenants related to asset coverage and liquidity and other maintenance covenants, as well as customary events of default.

On August 28, 2024, the Company closed an additional $25.0 million of commitments under the SMBC Facility increasing the maximum principal amount to $195,000,000.

At September 30, 2024, the carrying amount of the Company's borrowings under the SMBC Facility approximated their fair value. The fair values of the Company's debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of our borrowings under the SMBC Facility would be deemed to be Level 3 investments.

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The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the SMBC Facility for the three and nine months ended September 30, 2024 and 2023, respectively (dollars in thousands):


	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
SMBC Facility interest	$	716		$	—		$	716		$	—
SMBC Facility unused fees		66			—			66			—
Amortization of debt issuance costs		51			—			51			—
Total interest and financing expenses related to the SMBC Facility	$	833		$	—		$	833		$	—
Weighted average outstanding debt balance of the SMBC Facility	$	38,196		$	—		$	12,825		$	—
Weighted average interest rate of the SMBC Facility (annualized)		7.5	%		0.0	%		7.5	%		0.0	%

Unsecured Notes

On December 21, 2023, the Company entered into a Master Note Purchase Agreement (the “Note Purchase Agreement”) governing the issuance of $25,000,000 in aggregate principal amount of Series A Senior Notes, Tranche A, due December 21, 2026, with a fixed interest rate of 8.10% per year (the “2026 Notes”), and $25,000,000 in aggregate principal amount of Series A Senior Notes, Tranche B, due December 21, 2028, with a fixed interest rate of 8.20% per year (the “2028 Notes” and, together with the 2026 Notes, the “Notes”), to qualified institutional investors in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the "1933 Act"). The Notes are guaranteed by VCCEH, a wholly owned subsidiary of the Company.

Interest on the Notes will be payable semi-annually on June 21 and December 21 each year. The 2026 Notes and the 2028 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option prior to September 21, 2026 and September 21, 2028, respectively, at par plus accrued interest to the redemption date and a make-whole premium, and thereafter at par plus accrued interest to the redemption date. In addition, the Company is obligated to offer to prepay the Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

On February 2, 2024, in connection with each of the 2026 Notes and the 2028 Notes, the Company entered into an interest rate swap agreement for a total notional amount of $25,000,000 and $25,000,000 that matures on December 21, 2026 and December 21, 2028, respectively. Under the interest rate swap agreement for the 2026 Notes and the 2028 Notes, the Company receives a fixed interest rate of 8.10% and 8.20% and pays a floating interest rate of SOFR + 4.226% and SOFR + 4.595%, respectively. The Company designated these interest rate swaps, the 2026 Notes, and the 2028 Notes as a qualifying fair value hedge accounting relationship. For more information, see "Note 5. Derivative Instruments."

At September 30, 2024, the fair value of the Notes approximated their amortized cost. As of September 30, 2024, the Notes would be deemed to be Level 3 securities, as described in Note 2.

The following table summarizes the interest expenses and amortization of financing costs incurred on the Notes for the three and nine months ended September 30, 2024 (dollars in thousands):


	For the three months ended September 30,					For the nine months ended September 30,
	2024			2023		2024			2023
2026 Notes interest	$	506		$	—	$	1,518		$	—
2028 Notes interest		513		$	—	$	1,539		$	—
Amortization of debt issuance costs		25		$	—	$	73		$	—
Effect of interest rate swap		170				$	560
Total	$	1,214		$	—	$	3,690		$	—
Weighted average stated interest rate, net of effect of interest rate swaps (annualized)		9.5	%	$	—		9.7	%	$	—
Weighted average outstanding balance		50,000		$	—		50,000		$	—

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Note 7. Related Party Transactions

Investment Advisory Agreement

On June 2, 2022, the Company entered into an investment advisory agreement with the Adviser. In connection with the Transaction, the Company entered into a new investment agreement between the Company and the Adviser (the "Prior Investment Advisory Agreement"), which became effective on September 6, 2023. The Prior Investment Advisory Agreement was materially identical to the investment advisory agreement, dated June 2, 2022. At a meeting of the Company’s shareholders held on June 12, 2024, the Company’s shareholders voted to approve an amended investment advisory agreement by and between the Company and the Adviser (the “Investment Advisory Agreement”). Pursuant to the Investment Advisory Agreement, the Company pays the Adviser a fee for its investment advisory and management services consisting of two components—a base management fee and an incentive fee. The cost of both the base management fee and the incentive fee will ultimately be borne by the shareholders.

The Investment Advisory Agreement amended the Prior Investment Advisory Agreement as follows:

(i)

Reduced the incentive fee payable by the Company to the Adviser following an initial public offering or a listing of the common stock on a national securities exchange (a "Public Listing") from 20% of all remaining Pre-Incentive Fee Net Investment Income (as defined below) above the “catch-up” to 17.5% of all remaining Pre-Incentive Fee Net Investment Income above the “catch-up”; and

(ii)

More accurately reflect the original intent of the parties with respect to the “three-year look back” by revising the description of the calculation of the Income Incentive Fee (as defined below) to more explicitly account for the “three-year look back” and specifically referring to the “aggregate” Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters (as defined below) in the description of the calculation; therefore, the foregoing change is clarifying in nature and neither reflects a change in the actual calculation of the Income Incentive Fee nor would result in any change in the fees payable by the Adviser.

Other than the foregoing, no other material provisions of the Prior Investment Advisory Agreement changed.

Base Management Fee

Pursuant to the Amended Investment Advisory Agreement, prior to a Public Listing, the Company pays to the Adviser a fee (the “Management Fee”) for management services in an amount equal to an annual rate of 0.75% of the Company's "Adjusted Gross Assets". The Company's Adjusted Gross Assets is the average of the accreted or amortized cost basis of the Company's portfolio investments, excluding cash and cash equivalents and undrawn capital commitments at the end of the two most recently completed fiscal quarters (and, in the case of the first quarter-end following the Initial Closing, at the end of such fiscal quarter-end). The Management Fee is payable quarterly in arrears. Pursuant to the Investment Advisory Agreement, beginning with the first full calendar quarter following Public Listing, the Company will pay to the Adviser the Management Fee in an amount equal to an annual rate of 1.00% of the Adjusted Gross Assets payable quarterly in arrears (and, in the case of the first full calendar quarter-end following a Public Listing, at the end of such fiscal quarter-end).

For the three months ended September 30, 2024, the Company incurred base management fees to the Adviser of $1.4 million. For the nine months ended September 30, 2024, the Company incurred base management fees to the Adviser of $4.2 million.

For the three months ended September 30, 2023, the Company incurred base management fees to the Adviser of $1.3 million. For the nine months ended September 30, 2023, the Company incurred base management fees to the Adviser of $3.8 million.

As of September 30, 2024, $1.4 million was included in “base management fees payable” in the accompanying consolidated statements of assets and liabilities.

As of December 31, 2023, $1.3 million was included in “base management fees payable” in the accompanying consolidated statements of assets and liabilities.

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Income Incentive Fee and Capital Gain Incentive Fee Calculation

Pursuant to the Investment Advisory Agreement, the Company pays to the Adviser an incentive fee consisting of two components – an incentive fee based on a percentage of net investment income (the "Income Incentive Fee") and an incentive fee based on a percentage of capital gains(the "Capital Gains Incentive Fee"). The two components of the incentive fee are independent of each other and therefore, one component may be payable to the Adviser even if the other component is not payable to the Adviser.

Income Incentive Fee

The first part of the incentive fee, the Income Incentive Fee, is calculated and payable quarterly in arrears.

Prior to a Public Listing, under the Investment Advisory Agreement, the Income Incentive Fee will be calculated, subject to the Incentive Fee Cap (as defined below), and payable quarterly in arrears in respect of the Trailing Twelve Quarters as follows:

(i)

no incentive fee in any calendar quarter in which the Company’s aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters does not exceed the hurdle rate of 1.75% for such Trailing Twelve Quarters;

(ii)

100% of the excess of the Company’s Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate until the Adviser has received a “catch-up” equal to 12.5% of the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters; and

(iii)

12.5% of the Company’s remaining aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters, if any, that exceeds the “catch-up”.

Beginning with the first full calendar quarter following a Public Listing, under the Investment Advisory Agreement, the Income Incentive Fee will be calculated, subject to the Incentive Fee Cap, and payable quarterly in arrears in respect of the Trailing Twelve Quarters as follows:

(i)

(ii)

100% of the excess of the Company’s Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate until the Adviser has received a “catch-up” equal to 17.5% of the aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters; and

(iii)

17.5% of the Company’s remaining aggregate Pre-Incentive Fee Net Investment Income in respect of the relevant Trailing Twelve Quarters, if any, that exceeds the “catch-up”.

“Pre-incentive fee net investment income” means interest income, dividend income, accrued interest on the Subordinated Certificates, and any other income including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies accrued during the quarter, minus its operating expenses for the quarter including the Management Fee, expenses payable under the Administration Agreement (as defined below), and any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the Income Incentive Fee. Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

The Income Incentive Fee for a particular quarter is subject to a cap (the "Incentive Fee Cap”). For periods prior to a Public Listing, the Incentive Fee Cap is equal to the difference between (x) 12.5% of the Cumulative Net Return (as defined below) from the calendar quarter then ending and the eleven preceding calendar quarters (such period the “Trailing Twelve Quarters”) and (y) the aggregate Income Incentive Fees that were paid to the Adviser by the Company in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters. Following a Public Listing, the Incentive Fee Cap will be equal to the difference between (x) 20% of the Cumulative Net Return during the relevant Trailing Twelve Quarters and (y) the aggregate Income Incentive Fees that were paid to the Adviser by the Company in respect of the first eleven calendar quarters (or the portion thereof) included in the relevant Trailing Twelve Quarters. Cumulative Net Return is defined as the sum of (a) pre-incentive fee net investment income in respect of the relevant Trailing Twelve Quarters and (b) cumulative aggregate realized capital gains, cumulative aggregate

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realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation in respect of the relevant Trailing Twelve Quarters.

For the three months ended September 30, 2024, the Company incurred an Income Incentive Fee of $1.8 million. For the nine months ended September 30, 2024, the Company incurred an Income Incentive Fee of $5.4 million.

For the three months ended September 30, 2023, the Company incurred an Income Incentive Fee of $1.8 million. For the nine months ended September 30, 2023, the Company incurred an Income Incentive Fee of $3.8 million.

As of September 30, 2024, $1.8 million was included in “Income-based incentive fee payable” in the accompanying consolidated statements of assets and liabilities.

As of December 31, 2023, $2.2 million was included in “Income-based incentive fee payable” in the accompanying consolidated statements of assets and liabilities.

Capital Gains Incentive Fee

The second part of the incentive fee, the Capital Gains Incentive Fee, is determined and payable in arrears as of the end of each fiscal year. Prior to a Public Listing, the amount of Capital Gains Incentive Fee is equal to 12.5% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of the fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. Beginning with the first full calendar quarter following a Public Listing, the Capital Gains Incentive Fee will be equal to 17.5% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of the fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fees.

For the three and nine months ended September 30, 2024 and 2023, the Company did not incur a Capital Gains Incentive Fee.

In addition, the Adviser and its affiliates pay to the Company its allocable portion of any transaction, advisory or similar fees received in connection with the Company’s investment activities. The Adviser determines the Company’s allocable portion of such fees based on the Company’s ownership of the investment or securities related to the activity or investment, as applicable. The Adviser and its affiliates retain a portion of any transaction or transaction-related fee (including break-up fees, structuring fees, monitoring fees, commitment fees, or brokerage or underwriting compensation), advisory fees, or similar fees received in connection with the Company’s investment activities to the extent permitted by the 1940 Act, and may earn other transaction or transaction-related fees, advisory fees, or similar fees from the same transactions from sources other than the Company.

Administration Agreement

On June 2, 2022, the Company entered into an administration agreement with Varagon (in its capacity as the administrator, the "Administrator"). In connection with the Transaction, and in conjunction with entering into the Prior Investment Advisory Agreement, the Company entered into a new administration agreement between the Company and the Administrator (the "Administration Agreement"), which became effective on September 6, 2023. The Administration Agreement is materially identical to the prior administration agreement, dated June 2, 2022. Pursuant to the Administration Agreement, the Administrator (or one or more delegated service providers) furnishes the Company with office facilities, together with equipment and clerical, bookkeeping and recordkeeping services at such facilities. Under the Administration Agreement, the Administrator also performs, or oversees the performance of, the Company’s required administrative services, which includes being responsible for the financial records that the Company is required to maintain and preparing reports to the Company’s shareholders and reports filed with the SEC and otherwise assists with the Company’s compliance with the rules and regulations applicable to a BDC and RIC. In addition, the Administrator assists the Company in determining and publishing the Company’s net asset value, overseeing the preparation and filing of the Company’s tax returns and the printing and dissemination of reports to the Company’s shareholders, and generally overseeing the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. The Administrator will charge the Company only for the actual expenses it incurs on its behalf, or its allocable portion thereof, without any profit to the Administrator.

For the three and nine months ended September 30, 2024, the Company recorded administrator expenses of $0.3 million and $0.9 million, respectively.

For the three and nine months ended September 30, 2023, the Company recorded administrator expenses of $0.3 million and $0.9 million, respectively.

As of September 30, 2024, the Company had $0.3 million in "Administrator expenses payable" in the accompanying consolidated statements of assets and liabilities.

As of December 31, 2023, the Company had $0.3 million in "Administrator expenses payable" in the accompanying consolidated statements of assets and liabilities.

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On June 2, 2022, the Administrator also entered into a sub-administration agreement with State Street Bank and Trust Company (the “Sub-Administrator”), under which the Sub-Administrator provides various accounting and administrative services to the Company, subject to the oversight of the Administrator, including preparing certain financial information, providing certain treasury services, and providing certain fund accounting services. The Company, on behalf of the Administrator, will pay the Sub-Administrator fees for its services as it determines are commercially reasonable in its sole discretion and for all reasonable expenses. To the extent that the Sub-Administrator outsources any of its functions, the Sub-Administrator pays any compensation associated with such functions.

Expense Reimbursement Agreement

On June 2, 2022, the Company and the Adviser entered into an expense reimbursement agreement (the “Expense Reimbursement Agreement”) pursuant to which the Company reimburses the Adviser or Varagon, as applicable, for any organizational and offering expenses incurred by the Company and funded by the Adviser or Varagon. The Adviser elected to incur the organizational and offering expenses associated with the Company for the period from July 31, 2019 through March 29, 2022. Such organizational and offering expenses are not reimbursable by the Company (See "Note 2. Significant Accounting Policies").

Any such reimbursement will be made during the first four fiscal quarters following the 24-month period after the Initial Closing (the “Fundraising Period”). The Fundraising Period may be extended by up to an additional 18 months in the sole discretion of the Board (i.e., from 24 months to up to 42 months after the Initial Closing). On March 20, 2024, the Board determined to extend the Fundraising Period from 24 months to 42 months after the Initial Closing. As a result of the foregoing, the Company extended the period during which it may hold subsequent closings from June 2, 2024 to December 2, 2025. For the avoidance of doubt the Company will reimburse the Adviser or, as applicable, Varagon, for the organizational and offering expenses incurred by the Company during the first four fiscal quarters following the extended Fundraising Period. The Company’s obligation to reimburse the Adviser or Varagon, as applicable, under the Expense Reimbursement Agreement automatically became a liability of the Company on June 2, 2022, when the Company elected to be regulated as a BDC under the 1940 Act. For the avoidance of doubt, reimbursements under the Expense Reimbursement Agreement are not conditioned on any performance threshold and are not considered a contingent liability for accounting purposes.

Fronting Letter Agreement

On December 15, 2022, the Company and Varagon entered into a Fronting Letter Agreement (the “Fronting Letter”). Pursuant to the Fronting Letter, for purposes of facilitating the Company’s funding obligations under or in connection with one or more of the Company's portfolio investments, upon request by the Company or the Adviser, and the consent of Varagon, Varagon will advance up to an aggregate amount of $15.0 million to the Company (each advance, a "Fronted Amount"). No fees or interest is payable to Varagon by the Company with respect to any Fronted Amount. Each Fronted Amount will be reimbursed to Varagon by the Company within 90 days of receipt without any interest or fees.

On December, 20, 2022, Varagon advanced a Fronted Amount of $10.0 million to the Company. On December 28, 2022, the Company repaid $2.0 million thereof to Varagon. As of December 31, 2022, the Company had $8.0 million remaining due to Varagon, which is included in “Fronting amount payable” in the accompanying consolidated statements of assets and liabilities. On January 17, 2023, the Company repaid Varagon the remaining $8.0 million due to Varagon under the Fronting Letter. As of September 30, 2024, there were no Fronted Amounts advanced by the Company from Varagon.

Placement Agent Agreements

On September 6, 2023, the Adviser entered into an agreement with Man Investments Inc. on behalf of the Company, pursuant to which Man Investments Inc., assists the Company in conducting the Offering (the "Man Placement Agent Agreement"). On October 13, 2023, the Adviser entered into an agreement with Man Investments Inc. on behalf of the Company, pursuant to which Man Investments Inc. assists the Company in conducting the Offering in Canada (together with the Man Placement Agent Agreement, the "Placement Agent Agreements").

For avoidance of doubt, the Adviser or its affiliates are solely responsible for any placement or “finder’s” fees payable to any placement agents engaged by the Adviser on behalf of the Company in connection with the Offering.

Note 8. Commitments

Unfunded commitments

As of September 30, 2024 and December 31, 2023, the Company had commitments under loan and financing agreements to fund up to $58.0 million to 37 portfolio companies and $22.7 million to 29 portfolio companies, respectively. These commitments are primarily composed of senior secured term loans, revolvers, and in the SDLP, and an analysis of their fair value is included in the Consolidated Schedule of Investments. The Company's commitment to fund commitments are generally subject to the borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. The terms of the borrowings and financings subject to commitment are comparable to the terms of other loan and equity securities in our portfolio. A summary of the composition of the unfunded commitments as of September 30, 2024 and December 31, 2023 are shown in the table below (dollars in thousands):

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	As of September 30, 2024		As of December 31, 2023
3G Intermediate, Inc.		1,333		—
3G Intermediate, Inc.		667		—
Accupac, LLC		564		564
ACP Vault Acquisition, Inc.		1,036		—
ACP Vault Acquisition, Inc.		1,943		—
ADPD Holdings, LLC		2		5
ADPD Holdings, LLC		9		12
ADPD Holdings, LLC		11		13
ADPD Holdings, LLC		2		—
Advanced Web Technologies Holding Company		274		—
AWT Merger Sub, Inc.		845		—
Adviser Investments, LLC		9		9
Adviser Investments, LLC		—		37
Bebright MSO, LLC		1,225		—
Bebright MSO, LLC		1,237		—
BPCP NSA Intermedco, Inc.		1,944		—
BPCP NSA Intermedco, Inc.		911		—
Boulder Scientific Company, LLC		—		625
BRG Acquisition Co., LLC		600		600
Castleworks Home Services Company		7		7
Concord III, L.L.C.,		105		210
Distinct Holdings, Inc.		1,590		—
Easy Ice, LLC		1,352		—
Express Wash Acquisition Company, LLC		115		115
Eye Health America, LLC		600		360
Eye Health America, LLC		804		1,092
Gen4 Dental Partners OPCO, LLC		2,927		—
Gen4 Dental Partners OPCO, LLC		585		—
Graffiti Buyer, Inc.		1,213		—
Fingerpaint Marketing, Inc.		—		14
Hissho Parent, LLC		635		—
HLSG Intermediate, LLC		—		1,655
Horizon Freight Holdings, Inc.		1,543		—
Horizon Freight Holdings, Inc.		1,543		—
Horizon Freight Holdings, Inc.		775		—
HTI Intermediate, LLC		536		—
HTI Intermediate, LLC		321		—
Hub Pen Company, LLC		629		—
USSC Holding Corp.		896		—
USSC Holding Corp.		518		—
JTM Foods LLC		2		3
KL Bronco Acquisition, Inc.		411		250
KL Bronco Acquisition, Inc.		1,250		1,786
KL Charlie Acquisition Company		52		—
Krayden Holdings, Inc.		1,251		—
Krayden Holdings, Inc.		837		386
Krayden Holdings, Inc.		386		386
Krayden Holdings, Inc.		386		405
Leiters, Inc.		167		244
M&D Midco, Inc.		6		11
M&D Midco, Inc.		—		10
MDI Buyer, Inc.		323		7
Municipal Emergency Services, Inc.		3,774		—
MWD Management, LLC		267		266
North Haven Stallone Buyer, LLC		187		333
OIS Management Services, LLC		4,441		—
OIS Management Services, LLC		577		577
Oliver Packaging, LLC		411		176

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Online Labels Group, LLC		11		10
Online Labels Group, LLC		9		9
Online Labels Group, LLC		9		9
POY Holdings, LLC		—		1,211
RFI Buyer, Inc.		11		12
Senior Direct Lending Program, LLC		9,770		8,557
SGA Dental Partners Opco, LLC		1,790		1,394
SI Holdings, Inc.		522		—
Techmer BB Bidco, LLC		12		32
Titan Group Holdco, LLC		586		—
Titan Group Holdco, LLC		586		—
Titan Group Holdco, LLC		455		—
Turbo Buyer, Inc.		—		760
United Musculoskeletal Partners Acquisition Holdings, LLC		—		562
US Health Partners Management, LLC		37		—
US Health Partners Management, LLC		11		—
Zavation Medical Products, LLC		164		—
Total Unfunded Commitments	$	58,007	$	22,714

The Company believes its assets will provide adequate coverage to satisfy these unfunded commitments. As of September 30, 2024, the Company had cash of $21.2 million, available borrowings under the JPM Facility of $39.2 million, subject to borrowing base limitations, available borrowings under the SMBC Facility of $133.0 million, subject to borrowing base limitations, and undrawn capital commitments of $73.5 million.

Note 9. Directors Fees

The Company’s business and affairs is managed under the direction of the Board. The Board consists of four (4) members, three (3) of whom are not “interested persons” (as defined in Section 2(a)(19) of the 1940 Act) of the Company (the “Independent Directors”).

The Independent Directors receive an annual fee of $80,000. The Independent Directors will also receive an additional fee of $2,500 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each regular meeting of the Board. In addition, the Independent Directors will receive an additional fee of $1,500 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each special Board meeting. The Independent Directors also will receive a fee of $1,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each committee meeting. The lead Independent Director will receive an additional annual fee of $7,500. The chair of the Board's audit committee will receive an additional annual fee of $15,000 in lieu of fees for attending audit committee meetings. The chair of the Board's nominating and corporate governance committee will receive an additional annual fee of $7,500 in lieu of fees for attending nominating and corporate governance committee meetings.

For the three and nine months ended September 30, 2024, the Company accrued $0.1 million and $0.2 million, respectively, for directors’ fees and expenses. For the three and nine months ended September 30, 2023, the Company accrued $0.1 million and $0.3 million, respectively, for directors' fees. As of September 30, 2024 and December 31, 2023, the Company had $0.1 million and $0.1 million respectively, in "Directors' fees and expenses payable" in the accompanying consolidated statements of assets and liabilities.

Note 10. Share Data and Distributions

Earnings per share

The following table sets for the computation of basic and diluted earnings per share, for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands, except per share data):


	For the three months ended September 30,				For the nine months ended September 30,
	2024		2023		2024		2023
Net increase (decrease) in net assets resulting from operations	$	12,858	$	13,361	$	37,659	$	27,483
Weighted average shares outstanding		41,519,357		41,501,172		41,515,078		41,497,491
Earnings per share (basic and diluted)	$	0.31	$	0.32	$	0.91	$	0.66

Capital Activity

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The Company is authorized to issue 500,000,000 shares of common stock at a par value of $0.01 per share. The Company intends to offer and sell its shares of common stock to “accredited investors” (as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act in a private placement in reliance on Regulation D and Regulation S, as applicable. The Fundraising Period commenced when the Company held the Initial Closing on June 2, 2022 and entered into subscription agreements in which investors made capital commitments to purchase shares of common stock (the “Subscription Agreements”), providing private placement of the Company’s shares of common stock. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase the Company's shares of common stock up to the amount of their respective capital commitment each time the Company delivers a drawdown notice.

On March 29, 2022, in connection with its seed audit, the Company issued 100 shares of common stock for $10.00 to Varagon, which were subsequently redeemed on June 2, 2022, in connection with the Merger.

As of September 30, 2024, the Company had received capital commitments totaling $488.2 million ($73.5 million remaining undrawn), of which $7.2 million ($1.2 remaining undrawn) is from Varagon and current officers and directors of the Company. On June 2, 2022, the Company held the Initial Closing and entered into Subscription Agreements with a number of investors providing for the private placement of its shares of common stock.

The following table summarizes the total shares issued and proceeds received related to capital drawdowns delivered pursuant to the Subscription Agreements from inception through September 30, 2024 (dollars in thousands, except per share data):


Issuance Date	Shares Issued		Proceeds Received		Issuance Price per Share
June 2, 2022		36,130,510	$	361,305	$	10.00
July 12, 2022		2,994,012	$	30,000	$	10.02
September 7, 2022		2,362,205	$	24,000	$	10.16

Distributions and Distribution Reinvestments

Distributions to common shareholders are recorded on the ex-dividend date. The Company elected, and intends to qualify annually, to be treated as a RIC for U.S. federal income tax purposes under the Code. The Company will be required to distribute dividends each tax year as a RIC to its shareholders of an amount generally at least equal to 90% of its investment company taxable income, determined without regard to any deduction for dividends paid, in order to be eligible for tax benefits allowed to a RIC under Subchapter M of the Code. The Company anticipates paying out as a distribution all or substantially all of those amounts. The amount to be paid out as a dividend is determined by the Board and is based on management’s estimate of the Company’s annual taxable income. Net realized capital gains, if any, are generally distributed, although the Company may decide to retain such net realized capital gains for investment.

The Company has adopted an “opt out” distribution reinvestment plan (“DRIP”) for shareholders. As a result, if the Board authorizes, and the Company declares, a dividend or other distribution, each shareholder that has not “opted out” of the DRIP will have their dividends or distributions automatically reinvested in additional shares of our common stock rather than receiving cash distributions. Shareholders who receive distributions in the form of shares of common stock will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.

The following table reflects the distributions per share that the Company has declared, including shares issued under the DRIP, on its common stock from inception through September 30, 2024 (dollars in thousands, except per share data):

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Distribution	Date Declared	Record Date	Payment Dates	Amount per Share		Cash Distribution		DRIP Shares Issued		DRIP Shares Value
Quarterly	December 12, 2022	December 15, 2022	December 21, 2022	$	0.2635	$	10,892		3,915	$	40
Quarterly	December 19, 2022	December 23, 2022	January 27, 2023		0.2405		9,941		3,665		37
Quarterly	March 23, 2023	March 27, 2023	March 31, 2023		0.2222		9,185		3,619		35
Quarterly	May 10, 2023	July 1, 2023	July 15, 2023		0.2246		9,284		3,780		37
Quarterly	August 8, 2023	October 2, 2023	October 16, 2023		0.2271		9,387		3,825		38
Quarterly	November 7, 2023	December 27, 2023	January 17, 2024		0.2397		9,908		4,090		41
Special	December 18, 2023	December 27, 2023	January 17, 2024		0.1205		4,981		2,056		20
Quarterly	March 20, 2024	March 29, 2024	April 10, 2024		0.2371		9,809		3,461		34
Special	March 20, 2024	March 29, 2024	April 10, 2024		0.0333		1,378		486		5
Quarterly	May 9, 2024	June 28, 2024	July 17, 2024		0.2371		9,809		3,533		35
Special	May 9, 2024	June 28, 2024	July 17, 2024		0.0662		2,739		986		10
Quarterly	August 6, 2024	September 30, 2024	October 17, 2024		0.2397		9,916		3,699		36
Special	August 6, 2024	September 30, 2024	October 17, 2024		0.0638		2,639		985		10
Total						$	99,868		38,100	$	378

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Note 11. Income Taxes

The Company has elected, and intends to qualify annually, to be treated as a RIC under Subchapter M of the Code for U.S. federal income tax purposes. As a RIC, the Company generally will not pay U.S. federal income taxes at corporate tax rates on any ordinary income or capital gains that it timely distributes to its shareholders as dividends. To qualify as a RIC, the Company must meet certain minimum distribution, source-of-income, and asset diversification requirements. The minimum distribution requirements applicable to RICs require the Company to distribute at least 90% of its investment company taxable income, as defined by the Code, each year.

The Company is subject to a nondeductible 4% U.S. federal excise tax on its undistributed income, unless it timely distributes (or is deemed to have timely distributed) an amount equal to the sum of (1) 98% of ordinary income for each calendar year, (2) 98.2% of the amount by which capital gains exceeds capital losses (adjusted for certain ordinary losses) for a one-year period ending on October 31 of the calendar year, and (3) any income and gains recognized, but not distributed, from the previous years. While the Company intends to distribute any income and capital gains to avoid imposition of this 4% U.S. federal excise tax, it may not be successful in avoiding entirely the imposition of this tax. In that case, the Company will be liable for the tax only on the amount by which it does not meet the foregoing distribution requirement.

As of September 30, 2024, and December 31, 2023, the Company did not record a U.S. federal income tax expense/(benefit).

Taxable Subsidiaries

The Company uses the liability method to account for its taxable subsidiary's, VCCEH, income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net operating loss carry forwards that it may use to offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences. For the three and nine months ended September 30, 2024 and the year ended December 2023, the Company determined that no deferred tax asset or liability was necessary.

Federal Income Taxes

The Company is subject to the U.S. federal income tax rules and filing requirements. The Company is expected to have minimal or no income subject to tax and therefore no provision has been included for taxes due. The Company has elected, and intends to qualify annually, to be treated as a RIC under Subchapter M of the Code. As a result, the Company generally does not expect to be subject to U.S. federal income taxes.

In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators. The Company's federal tax returns are generally subject to examination by the Internal Revenue Service for a period of three years after they are filed.

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Note 12. Financial Highlights

The following is a schedule of financial highlights for the nine months ended September 30, 2024 and 2023 (dollars in thousands, except per share data):






	For the nine months ended September 30, 2024			For the nine months ended September 30, 2023
Per Share Data: (1)
Net asset value, beginning of period	$	9.71		$	9.73
Net investment income (loss)		0.91			0.76
Net unrealized appreciation (depreciation) on investments		0.02			(0.09	)
Net realized gains (losses) on investments		—			(0.01	)
Net realized gains (losses) on extinguishment of debt		(0.02	)		—
Net increase (decrease) in net assets resulting from operations		0.91			0.66
Distributions of net investment income to shareholders (2)		(0.88	)		(0.45	)
Issuance of common stock		—			—
Net asset value per share, end of period	$	9.74		$	9.94
Number of shares outstanding, end of period		41,520,143			41,501,706
Total return based on net asset value (3)(4)		9.65	%		6.99	%
Net assets attributable to shareholders, end of period	$	404,536		$	412,728

Ratio to average net assets attributable to shareholders:
Average net assets	$	404,484		$	406,176
Total expenses (5)		11.11	%		9.12	%
Total expenses (other than incentive fee) (5)		9.78	%		8.18	%
Net investment income (5)		12.94	%		10.86	%
Interest expense and credit facility fees (5)		7.28	%		5.78	%

Ratios/Supplemental Data:
Asset coverage, end of period (6)		208.52	%		255.51	%
Weighted average shares outstanding		41,515,078			41,497,491
Total capital commitments, end of period	$	488,208		$	488,208
Ratio of total contributed capital to total committed capital, end of period		84.95	%		84.95	%
Average debt outstanding (7)	$	343,005		$	277,575
Average debt outstanding per share	$	8.26		$	6.69
Portfolio turnover (4)		17.38	%		5.51	%
Year of formation	2019			2019

(1) The per share data was derived by using the weighted average shares outstanding.

(2) Distributions declared per common share was calculated as the sum of distributions on common stock declared during the year divided by the number of shares of common stock outstanding at each respective quarter-end date.

(3) Total return is based on the change in net asset value during the year divided by the beginning net asset value for the year, taking into account distributions declared, if any, reinvested in accordance with the Company’s DRIP.

(4) Not annualized.

(5) Annualized except in the case of non-recurring expenses (i.e. organizational expenses).

(6) Asset coverage per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness. Asset coverage ratio per unit does not include unfunded commitments. The inclusion of unfunded commitments in the calculation of the asset coverage ratio per unit would not cause the Company to be below the required amount of regulatory coverage.

(7) Based on daily weighted average balance of debt outstanding during the period.

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Note 13. Subsequent Events

Management has evaluated subsequent events through November 12, 2024, the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Quarterly Report on Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the three and nine months ended September 30, 2024 except as disclosed below:

Dividend Declaration

On November 6, 2024, the Board declared a dividend of $0.2392 per share and a special dividend of $0.0675 per share, both payable on January 17, 2025 to shareholders of record as of the close of business on December 31, 2024.

Pricing of CLO Transaction

On October 31, 2024, the Company through its wholly-owned indirect subsidiary, VCC CLO, priced a $493.77 million term debt securitization (the “CLO Transaction”). The CLO Transaction is expected to close on or about November 26, 2024 (the “Closing”). The VCC CLO Secured Debt (as defined below) to be issued by VCC CLO in the CLO Transaction will be secured by a portfolio of collateral obligations consisting primarily of middle market loans and participation interests therein.

The CLO Transaction is expected to be executed through (i) a private placement of several securities (collectively, “VCC CLO Secured Debt”), which include the Class A-1 Senior Secured Floating Rate Notes, the Class A-2 Senior Secured Floating Rate Loans, the Class B Senior Secured Floating Rate Notes, the Class B Senior Secured Floating Rate Loans, and the Class C Mezzanine Secured Deferrable Floating Rate Notes and (ii) a purchase by VCC CLO Depositor of the subordinated notes issued by VCC CLO (the “Subordinated Notes” and, together with the VCC CLO Secured Debt, the “VCC CLO Debt”).

The Company, through VCC CLO Depositor, is expected to acquire 100% of the Subordinated Notes at the Closing. The Company will be required to retain the Subordinated Notes in accordance with the U.S. Risk Retention Rules at and after the Closing. The Subordinated Notes will not bear interest.

The Company expects that the VCC CLO Debt will mature on October 20, 2036, unless otherwise redeemed earlier in accordance with the terms of the indenture governing the VCC CLO Debt, to be executed at the Closing (the “Indenture”). The VCC CLO Secured Debt will be the secured obligations of VCC CLO, and the Indenture will include customary covenants and events of default.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q.

Except as otherwise specified, references to “we,” “us,” “our,” or the “Company,” refer to Varagon Capital Corporation. The term “Adviser” refers to VCC Advisors, LLC, our investment adviser; the term “Varagon” refers to Varagon Capital Partners, L.P.; the parent company of the Adviser; and the term “Administrator” refers to Varagon Capital Partners, L.P., when acting in its capacity as our administrator.

Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q constitute forward-looking statements, which relate to future events or our performance or financial condition. The forward-looking statements contained in this Quarterly Report on Form 10-Q involve risks and uncertainties, including statements as to:

•

an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

•

an economic downturn could disproportionately impact the companies which we intend to target for investment, potentially causing us to experience a decrease in investment opportunities and diminished demand for capital from these companies;

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an economic downturn could impact availability and pricing of our financing;

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a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities;

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interest rate volatility could adversely affect our results, particularly if we elect to use leverage as part of our investment strategy;

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the impact of supply chain constraints and labor difficulties on our portfolio companies and the global economy;

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the elevated levels of inflation, and its impact on our portfolio companies and on the industries in which we invest;

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the impact of geopolitical conditions, including the ongoing conflicts between Ukraine and Russia and ongoing conflict in the Middle East, and its impact on financial market volatility, global economic market, and various sectors, industries and markets for commodities globally;

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changes in the financial, capital, and lending markets;

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currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;

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social, political, economic and other conditions and events (including natural disasters, epidemics, pandemics and terrorism) could adversely affect our results and the financial performance of our portfolio companies;

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our future operating results;

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our business prospects and the prospects of our portfolio companies;

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the expected return or impact of our investments;

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our contractual arrangements and relationships with third parties;

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the ability of our portfolio companies to achieve their objectives;

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competition with other entities and our affiliates for investment opportunities;

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the speculative and illiquid nature of our investments;

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the use of borrowed money to finance a portion of our investments;

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the adequacy of our financing sources and working capital;

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the loss of key personnel;

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the timing of cash flows, if any, from the operations of our portfolio companies;

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the ability of the Adviser to locate suitable investments for us and to monitor and administer our investments;

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the ability of the Adviser to attract and retain highly talented professionals;

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the ability of the Adviser to adequately allocate investment opportunities among the Company and Varagon’s advisory clients;

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any conflicts of interest posed by the structure of the management fee and incentive fee to be paid to the Adviser;

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our ability to qualify and maintain our qualification, for U.S. federal income tax purposes, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and our ability to operate as a business development company (“BDC”);

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the effect of legal, tax and regulatory changes; and

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other risks, uncertainties and other factors we identify under “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

Overview

We were formed on July 31, 2019 as a corporation under the laws of Maryland. We are an externally managed, non-diversified closed-end management investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, the Company has elected, and intends to qualify annually, to be treated as a RIC under the Code. The Company’s fiscal year end is December 31.

The Adviser serves as the Company’s investment adviser. The Adviser is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and is a subsidiary of Varagon, which is also registered with the SEC as an investment adviser under the Advisers Act. Subject to the overall supervision of the Company’s board of directors (the “Board”), the Adviser manages the day-to-day operation of and provides investment advisory and management services to the Company.

The Company intends to achieve its investment objective by investing primarily in senior secured loans to performing middle market companies controlled by private equity sponsors. The Company focuses on loans to middle market companies that have sustainable competitive advantages, experienced management teams, solid financial performance, stable and recurring cash flow and strong enterprise value. The Company expects that such companies and their sponsors will require financing from the Company for growth, acquisitions, recapitalizations, refinancings or leveraged buyouts, among other things. The Company generally expects to invest in companies with EBITDA between $10 million and $75 million annually, though we may invest in smaller or larger companies if an attractive opportunity presents itself. The Company also generally intends to directly originate its investments as a lead lender to allow for deeper diligence, greater control over terms and structure, and superior economics.

The Company has a wholly owned subsidiary, VCC Equity Holdings, LLC ("VCCEH”), that is taxed as a corporation for U.S. federal income tax purposes. VCCEH was formed to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements of a RIC under the Code, and the assets held by VCCEH are pledged as collateral supporting the amounts outstanding under the CIBC Facility (as discussed below). VCCEH also guarantees the borrowings outstanding under the SMBC Facility (as defined below) (See "Note 6. Borrowings"). In addition, the Company has three other wholly owned subsidiaries, VCC Funding, LLC ("VCCF"), a bankruptcy remote special purpose entity, whose assets are pledged as collateral supporting the amounts outstanding under the JPM Facility (as discussed below), Varagon SDLP, LLC (“VSDLP”), which holds the Company's interest in the SDLP (as defined below), and VCC CLO 1 Depositor, LLC ("VCC CLO Depositor"), which in turn wholly owns VCC CLO 1, LLC ("VCC CLO"). VCC CLO Depositor and VCC CLO were formed for the purpose of issuing a term debt securitization. VCCEH, VCCF, VSDLP, and VCC CLO Depositor are each direct wholly owned subsidiaries of the Company and VCC CLO is an indirect wholly owned subsidiary of the Company, and as such are consolidated in the Company's consolidated financial statements commencing from June 2, 2022, the commencement of investment operations, or the date of their respective formation, in accordance with the Company’s consolidation policy.

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million of shares of common stock at $10.00 per share to the limited partners of VF1 in exchange for the assets and liabilities of VF1. Additionally, on June 2, 2022, the Company received $296.9 million of capital commitments (of which, $175.2 million was funded) (the “Initial Closing”) and the Company issued 17.5 million shares of common stock at $10.00 per share to new investors. The Company also became the sole member of its wholly owned subsidiaries VCCF and VSDLP. On June 2, 2022, immediately prior to its election to be regulated as a BDC, the Company purchased a portfolio of existing loans for $449.4 million (the “Warehoused Portfolio” and together with the Existing Portfolio, the “Initial Portfolio”) from certain affiliates of the Adviser using proceeds from the Initial Closing and borrowings under the JPM Facility pursuant to loan sale and purchase agreements. In connection with the purchase of the Initial Portfolio, the Board reviewed and approved the fair value of the Initial Portfolio based on the Adviser’s internal analysis and input from third-party valuation firms.

Varagon Transaction with Man Group plc

Key Components of Our Results of Operations

Investments

We focus primarily on the direct origination and syndication of loans to middle market companies domiciled in the United States.

Our level of investment activity (both the number of investments and the size of each investment) varies substantially from period to period depending on many factors, including the amount of debt and equity capital generally available to middle market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make. Based on current market conditions, the pace of our investment activities, including originations and repayments, may vary. The historic strength of the financing and mergers and acquisitions markets and the historically low interest rate environment previously led to increased originations and repayments. However, there have been headwinds in the financing and merger and acquisitions markets resulting from inflation, supply chain disruptions, labor and resource shortages, commodity inflation, a shifting interest rate environment, geopolitical events (including the war in Ukraine, conflict in the Middle East, and U.S. and China relations), and the uncertain economic outlook for the United States and globally, which could include a recession. We are closely monitoring the effect that market volatility, including as a result of the elevated interest rate environment, may have on our portfolio companies and our investment activities, and we will continue to seek to invest in defensive businesses with low levels of cyclicality and strong levels of free cash flow generation.

As a BDC, we may not acquire any assets other than “qualifying assets” specified in Section 55(a) of the 1940 Act, unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. Qualifying assets include investments in “eligible portfolio companies”, which, under the 1940 Act, includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies whose securities are listed on a national securities exchange but whose market capitalization is less than $250 million. In addition, we must be organized in the United States to qualify as a BDC.

Revenues

We plan to generate revenues in the form of interest income from the debt securities we hold and dividends and capital appreciation on either direct equity investments or equity interests obtained in connection with originating loans, such as options, warrants or conversion rights. The debt we invest in typically will not be rated by any rating agency, but if it were, it is likely that such debt would be below investment grade. Our investment bias will be toward adjustable-rate senior secured loans. We do not anticipate a secondary market to develop for our private investments. We expect most of our investments to be in corporations, partnerships, limited liability companies or other business entities, including in investment vehicles that issue certificates to us. We also may generate revenue in the form of commitment, loan origination, structuring or diligence fees, fees for providing managerial assistance to our portfolio companies, repayment fees, and waiver and amendment fees associated with our portfolio investments based on our pro rata ownership of the applicable term loan investment or our interest in securities (including the subordinated certificates (the "Subordinated Certificates") issued by SDLP, a joint venture between the Company and Ares Capital Corporation ("ARCC")) related to an underlying investment, as applicable. Certain of these fees may be capitalized and amortized as additional interest income over the life of the related loan.

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Expenses

All professionals of the Adviser, when and to the extent engaged in providing investment advisory and management services to us, and the compensation and routine overhead expenses of personnel allocable to these services to us, will be provided and paid for by the Adviser and not by us. Payments under the Administration Agreement are based upon our allocable portion of overhead and other expenses incurred by our administrator, Varagon (in its capacity as our administrator, the "Administrator"), in performing its obligations under the Administration Agreement, including a portion of the rent and the compensation of our Chief Financial Officer and Chief Compliance Officer and their respective staffs. In accordance with the terms of the Administration Agreement, overhead and other administrative expenses are generally allocated between the Administrator and us by reference to the relative time spent by personnel in performing administrative and similar functions on our behalf as compared to performing administrative functions on behalf of the Administrator, its other clients or the Adviser. To the extent personnel retained by the Administrator perform administrative tasks for the Adviser, the fees incurred with respect to the actual time dedicated to such tasks will be reimbursed by the Adviser. We will bear all other out-of-pocket costs and expenses of our operations and transactions, including those relating to:

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organization and offering of the common stock, subject to the terms of the Expense Reimbursement Agreement;

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the Company’s fees and expenses related to any of the following: (i) an initial public offering (“IPO”) or a listing of the common stock on a national securities exchange (a “Public Listing”), (ii) a sale of all or substantially all of our assets to, or other liquidity event with, an entity for consideration of either cash and/or publicly listed securities of the acquirer, which potential acquirers may include entities affiliated with Varagon, or (iii) a permanent election by the Adviser not to make new investments and to distribute proceeds of investments to shareholders as they are received, or the wind down and/or liquidation and dissolution of the Company;

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calculating the Company’s net asset value ("NAV") (including the cost and expenses of any independent valuation firm);

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fees and expenses payable to third parties, including agents, consultants or other advisers, in connection with monitoring financial and legal affairs for the Company and in providing administrative services, monitoring the Company’s investments and performing due diligence on the Company’s prospective portfolio investments or otherwise relating to, or associated with, evaluating and making investments;

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fees and expenses incurred in connection with debt, if any, incurred to finance the Company’s investments or operations, and payment of interest and repayment of principal on such debt;

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fees and expenses related to sales and repurchases of the common stock and other securities;

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investment advisory and management fees;

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administration fees, if any, payable under the Administration Agreement;

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transfer agent, sub-administrator and custodial fees;

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expenses relating to the issue, repurchase and transfer of common stock to the extent not borne by the relevant transferring shareholders and/or assignees;

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federal and state registration fees;

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all costs associated with a Public Listing;

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federal, state and local taxes and other governmental charges assessed against the Company;

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independent directors’ fees and expenses and the costs associated with convening a meeting of the Board or any committee thereof;

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fees and expenses and the costs associated with convening a meeting of the shareholders or holders of any preferred stock, as well as the compensation of an investor relations professional responsible for the coordination and administration of the foregoing;

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costs of preparing and filing reports or other documents required by the SEC, the Financial Industry Regulatory Authority or other regulators;

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costs of any reports, proxy statements or other notices to shareholders, including printing and mailing costs;

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costs and expenses related to the preparation of the Company’s financial statements and tax returns;

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the Company’s allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;

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direct costs and expenses of administration, including printing, mailing, long distance telephone, and copying;

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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;

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compensation of other third-party professionals to the extent they are devoted to preparing the Company’s financial statements or tax returns or providing similar “back office” financial services to the Company;

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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;

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portfolio risk management costs;

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commissions or brokerage fees or similar charges incurred in connection with the purchase or sale of securities (including merger fees) and other assets;

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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);

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costs of amending, restating or modifying the Company’s charter and the Company’s bylaws or the Investment Advisory Agreement, the Administration Agreement or related documents of the Company or related entities;

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fees, costs, and expenses incurred in connection with any restructuring, IPO or reorganization of the Company or related entities, the termination, liquidation or dissolution of the Company or related entities, or the required redemption of all or substantially all outstanding common stock (including the fees and expenses associated with any such transaction);

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the expense reimbursements set forth in the Administration Agreement; and

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all other properly and reasonably chargeable expenses incurred by the Company or the Administrator in connection with administering the Company’s business, including rent and the allocable portion of the cost of the Company’s Chief Compliance Officer and Chief Financial Officer and their respective staffs; while certain of these expenses may not be ascertainable at any given time, any such expenses will be subject to the approval of the Board on a quarterly basis.

Leverage

The ratio of a BDC's total assets (less total liabilities other than indebtedness represented by senior securities) to its total indebtedness represented by senior securities plus preferred stock, if any, must be at least 200% or 150%, if certain requirements are met. In connection with the Company’s organization and the Initial Closing, the Board and its initial shareholder authorized us to adopt the 150% asset coverage ratio. Additionally, investors both consented to the minimum asset coverage ratio of 150% and agreed not to seek to redeem their shares of common stock in connection therewith, in each case in the subscription agreement. The Company therefore may be exposed, to a greater extent, to the risks of leverage, which may be considered a speculative investment technique. The use of leverage magnifies the potential for gain and loss on amounts invested and therefore increases the risks associated with investing in our securities. In any period, our interest expense will depend largely on the extent of our borrowing, and we expect interest expense will increase as we increase our debt outstanding. As of September 30, 2024, the Company's asset coverage ratio was 208.52%.

Portfolio and Investment Activity

As of September 30, 2024, our portfolio had a fair value of approximately $765.7 million. The following table summarizes our portfolio and investment activity during the nine months ended September 30, 2024 (dollars in thousands):


	For the nine months ended September 30, 2024
Investments made in new portfolio companies	$	82,674
Investments made in existing portfolio companies		120,080
Aggregate amount in exits and repayments		(127,385	)
Net investment activity	$	75,369

Portfolio Companies, at beginning of period		85
Number of new portfolio companies		17
Number of exited portfolio companies		(7	)
Portfolio companies, at end of period		95

The following table shows the amortized cost and the fair value of the Company’s portfolio investments as of September 30, 2024 (dollars in thousands):

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	As of September 30, 2024
	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Loans	$	593,871		76.4	%	$	587,588		76.7	%
Equity		4,762		0.6			4,361		0.6
Subordinated Certificates of the SDLP		179,126		23.0			173,772		22.7
Total Investments	$	777,759		100.0	%	$	765,721		100.0	%

The following table presents the fair value measurements of the Company's investments, by major class according to the fair value hierarchy, as of December 31, 2023 (dollars in thousands):


	As of December 31, 2023
	Amortized Cost		Percentage			Fair Value		Percentage
Senior Secured First Lien Loans	$	506,153		72.5	%	$	497,911		72.6	%
Equity		3,989		0.6			3,641		0.5
Subordinated Certificates of the SDLP		188,471		26.9			184,485		26.9
Total Investments	$	698,613		100.0	%	$	686,037		100.0	%

The following table shows weighted average current yield to maturity based on the amortized cost and fair value as of September 30, 2024 and December 31, 2023:


	As of September 30, 2024						As of December 31, 2023
	Weighted Average Current Yield for Total Portfolio (Amortized Cost)			Weighted Average Current Yield for Total Portfolio (Fair Value)			Weighted Average Current Yield for Total Portfolio (Amortized Cost)			Weighted Average Current Yield for Total Portfolio (Fair Value)
Senior Secured First Lien Loans		11.5	%		12.3	%		11.7	%		12.4	%
Equity	N/A			N/A			N/A			N/A
Subordinated Certificates of the SDLP (1)		14.5	%		15.0	%		14.3	%		14.6	%
Total		12.2	%		12.9	%		12.4	%		13.0	%

(1) "Weighted average yields” of investments are computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on the relevant accruing investments, divided by (b) the total relevant investments at amortized cost or at fair value, as applicable.

The weighted average yield of our debt and income producing securities is not the same as a return on investment for our shareholders, but rather relates to our investment portfolio and is calculated before the payment of all of our and our subsidiaries’ fees and expenses. The weighted average yield was computed using the effective interest rates as of each respective date, including accretion of original issue discount, but excluding investments on non-accrual status, if any. There can be no assurance that the weighted average yield will remain at its current level.

Portfolio Asset Quality

Our Adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Adviser grades the credit risk of all debt investments on a scale of 1 to 5 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio debt investment relative to the inherent risk at the time the original debt investment was made (i.e., at the time of acquisition), although it may also take into account under certain circumstances the performance of the portfolio company's business, the collateral coverage of the investment and other relevant factors.


Loan Rating		Summary Description
1		Involves the least amount of risk to our initial cost basis. The borrower is performing above expectations, and the trends and risk factors for this investment since origination or acquisition are generally favorable.
2		Involves an acceptable level of risk that is similar to the risk at the time of origination or acquisition. The borrower is generally performing as expected and the risk factors are generally neutral to favorable. All investments or acquired investments in new portfolio companies are initially assessed a rating of 2.
3		Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination or acquisition.
4		Involves a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination or acquisition. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 120 days past due).

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5		Involves a borrower performing substantially below expectations and indicates that the loan’s risk has increased substantially since origination or acquisition. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

The weighted average risk rating of our investments based on fair value was 2.0 as of September 30, 2024 and 2.0 as of December 31, 2023.

Based on a generally uncertain economic outlook in the United States (which includes a possible recession), we are maintaining close communications with our portfolio companies to proactively assess and manage potential risks across our debt investment portfolio. We also have increased oversight and analysis of credits in any vulnerable industries to mitigate any decline in loan performance and reduce credit risk. While we are not seeing signs of an overall, broad deterioration in our operating results or those of our portfolio companies at this time, there can be no assurance that the performance of certain of our portfolio companies will not be negatively impacted by economic conditions, which could have a negative impact on our future results.

The following table shows the distribution of our investments on the 1 to 5 investment performance rating scale at fair value as of September 30, 2024 and December 31, 2023 (dollars in thousands):


	As of September 30, 2024					As of December 31, 2023
Investment Performance Rating	Fair Value		Percentage			Fair Value		Percentage
1	$	21,638	2.8%			$	7,924	1.2%
2	$	704,194		92.0			654,568		95.4
3	$	39,889		5.2			23,545		3.4
4	$	—		—			—		—
5	$	—		—			—		—
Total	$	765,721		100.0	%	$	686,037		100.0	%

The following table shows the amortized cost of our performing and non-accrual debt investments as of September 30, 2024 and December 31, 2023 (dollars in thousands):


	As of September 30, 2024					As of December 31, 2023
	Amortized Cost		Percentage			Amortized Cost		Percentage
Performing	$	772,997		100.0	%	$	694,624		100.0	%
Non-Accrual		—		—			—		—
Total	$	772,997		100.0	%	$	694,624		100.0	%

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued 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. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

Senior Direct Lending Program

In 2015, VSDLP, a wholly owned subsidiary of the Company, and ARCC formed SDLP, a joint venture established for the purpose of providing senior stretch and unitranche loan financings to middle market borrowers. The Company received, indirectly through its membership interest in VSDLP, limited liability company membership interests and Subordinated Certificates in each case in SDLP, as a result of the Merger. The SDLP finances its investment activity through the issuance of securities (“SDLP Securities”) backed by its loan portfolio, including, in order of seniority, rated senior notes (the “Senior Note”), a rated intermediate funding note (the “IFN”), and capital provided by the Company and ARCC through the Subordinated Certificates. The Subordinated Certificates are the most junior securities issued by SDLP and collateralize the profits earned or losses incurred across the SDLP loan portfolio. As of September 30, 2024 and December 31, 2023, the Company and ARCC own 12.5% and 87.5%, respectively, of the outstanding Subordinated Certificates.

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Certificates. This capital will only be committed to the SDLP upon approval of transactions by the SDLP Investment Committee as discussed above. As of September 30, 2024 and December 31, 2023, the Company has funded $182.0 million and $189.7 million, respectively, of its commitment to the SDLP and had $24.3 million and $16.6 million in unfunded commitments remaining to the SDLP, respectively.


	As of September 30, 2024		As of December 31, 2023
Total first lien senior secured loans(1)	$	4,889	$	5,431
Largest loan to a single borrower(1)	$	367	$	370
Total of five largest loans to borrower(1)	$	1,686	$	1,650
Number of borrowers in the SDLP		19		22
Commitments to fund delayed draw loans (2)	$	291	$	260

(1) At principal amount.

(2) As discussed above, these commitments have been approved by the SDLP Investment Committee.

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Below is a listing of SDLP’s individual investments as of September 30, 2024 (dollars in thousands):

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Company	Type of Investment	Reference Rate and Spread (1)				Interest Rate	Maturity	Par		Amortized Cost		Fair Value		Footnotes
Senior Secured First Lien Loans
Aerospace & Defense
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/31/2027	$	156,379	$	156,379	$	156,379	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/31/2027		45,561		45,561		45,561	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/31/2027		40,794		40,794		40,794	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	10.95%	8/31/2027		11,390		11,390		11,390	(2)
Qnnect, LLC and Connector TopCo, LP	Delayed Draw Term Loan	SOFR	+	6.75%	(Q)	11.83%	11/2/2029		273,096		273,096		273,096	(2)
Qnnect, LLC and Connector TopCo, LP	Delayed Draw Term Loan	SOFR	+	6.75%	(Q)	11.83%	11/2/2029		3,155		3,155		3,155	(2)
											530,375		530,375
Automobile Components
Arrowhead Holdco Company	Term Loan	SOFR	+	5.25%	(Q)	10.46%	8/31/2028		173,104		173,104		154,063	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	5.25%	(Q)	10.46%	8/31/2028		35,708		35,708		31,780	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	5.25%	(Q)	10.46%	8/31/2028		41,008		41,008		36,497	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	2.50%	(Q)	7.71%	8/31/2028		25,465		25,465		22,664	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	5.25%	(Q)	10.46%	8/31/2028		2,326		2,326		2,070	(2)
North Haven Falcon Buyer, LLC	Delayed Draw Term Loan	SOFR	+	8.00%	(Q)	13.12%	5/19/2027		200,710		200,709		158,561	(2)
North Haven Falcon Buyer, LLC	Delayed Draw Term Loan	SOFR	+	8.00%	(Q)	12.60%	5/19/2027		33,608		33,559		26,551	(2)
											511,879		432,186
Chemicals
SePRO Holdings, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.53%	7/26/2030		118,611		118,611		116,239	(2)
											118,611		116,239
Commercial Services & Supplies
ISQ Hawkeye HoldCo, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.63%	8/20/2031		226,650		226,650		226,650	(2)
ISQ Hawkeye HoldCo, Inc.	Term Loan	SOFR	+	4.75%	(M)	9.63%	8/20/2031		82,538		82,538		82,538	(2)
Pritchard Industries, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.26%	10/13/2027		196,370		196,370		192,443	(2)
Pritchard Industries, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(Q)	11.26%	10/13/2027		46,951		46,951		46,012	(2)
											552,509		547,643
Construction & Engineering
Valcourt Holdings II, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.03%	11/21/2029		260,562		260,562		260,562	(2)
Valcourt Holdings II, LLC	Term Loan	SOFR	+	5.75%	(Q)	11.03%	11/21/2029		53,811		53,811		53,811	(2)
											314,373		314,373
Consumer Staples Distribution & Retail
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.20%	3/30/2026		168,750		168,750		168,750	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.20%	3/30/2026		4,219		4,219		4,219	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.20%	3/30/2026		64,487		64,487		64,487	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	3/30/2026		83,353		83,353		83,353	(2)
											320,809		320,809
Food Products
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	10.95%	12/10/2026		175,766		175,766		147,644	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	10.95%	12/10/2026		29,069		29,069		24,418	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	10.95%	12/10/2026		13,863		13,863		11,645	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	10.95%	12/10/2026		46,771		46,771		39,288	(2)
											265,469		222,995
Health Care Providers and Services
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		132,765		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		7,307		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		19,452		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		4,820		—		—	(2)(3)
NMN Holdings III Corp	Term Loan	SOFR	+	4.50%	(M)	9.35%	7/31/2031		229,508		229,508		227,213	(2)
											229,508		227,213
Hotels, Restaurants & Leisure
Triwizard Holdings, Inc.	Term Loan	SOFR	+	5.25%	(Q)	9.85%	6/29/2029		167,875		167,875		167,875	(2)
Triwizard Holdings, Inc.	Term Loan	SOFR	+	5.25%	(Q)	10.35%	6/29/2029		59,850		59,850		59,850	(2)
Triwizard Holdings, Inc.	Term Loan	SOFR	+	5.25%	(Q)	10.49%	6/29/2029		20,850		20,850		20,721	(2)
Concert Golf Partners Holdco LLC	Term Loan	SOFR	+	4.75%	(M)	9.63%	4/1/2030		231,667		231,667		231,667	(2)

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Concert Golf Partners Holdco LLC	Term Loan	SOFR	+	4.75%	(M)	9.63%	4/1/2030	43,583		43,583		43,583	(2)
Concert Golf Partners Holdco LLC	Term Loan	SOFR	+	4.75%	(M)	9.63%	4/1/2030	4,469		4,469		4,469	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.71%	6/8/2026	102,638		102,638		102,638	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.00%	6/8/2026	50,000		50,000		50,000	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.66%	6/8/2026	24,483		24,483		24,483	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	10.50%	6/8/2026	74,355		74,355		74,355	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.00%	(Q)	9.25%	6/8/2026	108,604		108,604		108,604	(2)
										888,374		888,245
Household Products
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(M)	10.45%	11/9/2027	300,825		300,825		291,800	(2)
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	10.45%	11/9/2027	26,460		26,460		25,666	(2)
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(M)	10.45%	11/9/2027	40,044		40,044		38,843	(2)
										367,329		356,309
Insurance
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	12/2/2026	204,579		204,579		204,579	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	12/2/2026	57,868		57,868		57,868	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	12/2/2026	24,275		24,275		24,275	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	10.70%	12/2/2026	14,438		14,438		14,438	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(M)	10.45%	12/2/2026	22,694		22,694		22,694	(2)
										323,854		323,854
Machinery
Harvey Tool Company, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(M)	10.35%	10/26/2027	220,501		220,501		220,501	(2)
Harvey Tool Company, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	10.45%	10/26/2027	34,677		34,677		34,677	(2)
Harvey Tool Company, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(M)	10.35%	10/26/2027	12,915		12,915		12,915	(2)
										268,093		268,093
Trading Companies & Distributors
Penn Detroit Diesel Allison, LLC	Term Loan	SOFR	+	5.75%	(S)	10.70%	12/14/2027	32,913		32,913		32,913	(2)
										32,913		32,913

Total Investments, September 30, 2024									$	4,724,096	$	4,581,247

(1) Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to SOFR, or an alternate base rate (commonly based on the Federal Funds Rate or the Prime Rate), at the borrower’s option, which reset semi-annually (S), quarterly (Q) or monthly (M). For each such loan, the interest rate provided was the rate in effect as of September 30, 2024.

(2) Loan includes interest rate floor feature.

(3) The investment was on non-accrual status as of September 30, 2024.

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Below is a listing of SDLP’s individual investments as of December 31, 2023(4) (dollars in thousands):


Company	Type of Investment	Reference Rate and Spread (1)				Interest Rate	Maturity	Par		Amortized Cost		Fair Value		Footnotes
Senior Secured First Lien Loans
Aerospace & Defense
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	11.46%	8/31/2027	$	11,478	$	11,478	$	11,363	(2)
Precinmac (US) Holdings Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(M)	11.46%	8/31/2027		45,911		45,911		45,452	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.54%	8/31/2027		157,588		157,588		156,012	(2)
Precinmac (US) Holdings Inc.	Term Loan	SOFR	+	6.00%	(M)	11.46%	8/31/2027		41,110		41,110		40,699	(2)
Qnnect, LLC and Connector TopCo, LP	Delayed Draw Term Loan	SOFR	+	7.00%	(Q)	12.38%	11/2/2029		3,179		3,179		3,179	(2)
Qnnect, LLC and Connector TopCo, LP	Term Loan	SOFR	+	7.00%	(Q)	12.38%	11/2/2029		275,175		275,175		275,175	(2)
											534,441		531,880
Auto Components
Arrowhead Holdco Company	Term Loan	SOFR	+	4.50%	(Q)	10.04%	8/31/2028		169,531		169,531		152,578	(2)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	4.50%	(Q)	10.05%	8/31/2028		34,859		34,859		31,373	(2)
Arrowhead Holdco Company	Term Loan	SOFR	+	4.50%	(Q)	10.05%	8/31/2028		24,859		24,859		22,374	(2)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	4.50%	(Q)	10.05%	8/31/2028		2,270		2,270		2,043	(2)
Arrowhead Holdco Company	Delayed Draw Term Loan	SOFR	+	4.50%	(Q)	10.05%	8/31/2028		40,033		40,033		36,030	(2)
North Haven Falcon Buyer, LLC	Delayed Draw Term Loan	SOFR	+	8.00%	(Q)	13.50%	5/19/2027		32,199		32,199		26,081	(2)
North Haven Falcon Buyer, LLC	Term Loan	SOFR	+	8.00%	(Q)	13.52%	5/19/2027		192,273		192,272		155,741	(2)
											496,023		426,220
Commercial Services & Supplies
ISQ Hawkeye HoldCo, Inc.	Term Loan	SOFR	+	6.00%	(M)	11.38%	8/17/2029		228,385		228,385		228,385	(2)
ISQ Hawkeye HoldCo, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(M)	11.38%	8/17/2029		67,198		67,198		67,198	(2)
Pritchard Industries, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(S)	10.93%	10/13/2027		47,311		47,311		46,365	(2)
Pritchard Industries, LLC	Term Loan	SOFR	+	5.50%	(Q)	10.93%	10/13/2027		197,885		197,885		193,927	(2)
Valcourt Holdings II, LLC	Term Loan	SOFR	+	5.75%	(S)	11.27%	11/21/2029		262,536		262,536		257,286	(2)
Valcourt Holdings II, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(S)	11.27%	11/21/2029		—		—		—	(2)
											803,315		793,161
Diversified Consumer Services
Excelligence Learning Corporation	Term Loan	SOFR	+	6.00%	(Q)	11.46%	1/18/2024		145,432		145,429		145,432	(2)
											145,429		145,432
Food & Staples Retailing
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	3/28/2025		83,991		83,991		83,991	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.71%	3/28/2025		64,989		64,989		64,989	(2)
FS Squared Holding Corp.	Term Loan	SOFR	+	5.25%	(M)	10.71%	3/28/2025		170,089		170,089		170,089	(2)
FS Squared Holding Corp.	Delayed Draw Term Loan	SOFR	+	5.25%	(M)	10.71%	3/28/2025		4,252		4,252		4,252	(2)
											323,321		323,321
Food Products
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	11.46%	12/10/2026		13,970		13,970		13,132	(2)
Manna Pro Products, LLC	Delayed Draw Term Loan	SOFR	+	6.00%	(M)	11.46%	12/10/2026		29,294		29,294		27,536	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	11.46%	12/10/2026		47,131		47,131		44,303	(2)
Manna Pro Products, LLC	Term Loan	SOFR	+	6.00%	(M)	11.46%	12/10/2026		177,136		177,136		166,508	(2)
											267,531		251,479
Health Care Providers and Services
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		4,820		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		19,452		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		132,765		—		—	(2)(3)
Center for Autism and Related Disorders, LLC	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	12.00%	11/21/2024		7,307		—		—	(2)(3)
											—		—
Hotels, Restaurants & Leisure
Triwizard Holdings, Inc.	Term Loan	SOFR	+	6.25%	(Q)	11.72%	6/29/2029		169,150		169,150		169,150	(2)

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Triwizard Holdings, Inc.	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.72%	6/29/2029	—		—		—	(2)
Concert Golf Partners Holdco LLC	Term Loan	SOFR	+	5.50%	(Q)	11.25%	4/2/2029	233,445		233,445		233,445	(2)
Concert Golf Partners Holdco LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.25%	4/2/2029	40,012		40,012		40,012	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.03%	6/8/2026	24,670		24,670		24,670	(2)
HGC Holdings, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.04%	6/8/2026	103,425		103,425		103,425	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.08%	6/8/2026	50,000		50,000		50,000	(2)
HGC Holdings, LLC	Delayed Draw Term Loan	SOFR	+	6.25%	(Q)	11.62%	6/8/2026	53,865		53,865		53,865	(2)
										674,567		674,567
Household Products
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.00%	11/9/2027	303,188		303,188		300,156	(2)
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.00%	11/9/2027	40,367		40,367		39,963	(2)
Walnut Parent, Inc.	Term Loan	SOFR	+	5.50%	(Q)	11.00%	11/9/2027	26,670		26,670		26,403	(2)
										370,225		366,522
Insurance
Benecon Midco II, LLC	Term Loan	SOFR	+	5.25%	(M)	10.71%	12/4/2026	170,188		170,188		170,188	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	24,463		24,463		24,463	(2)
THG Acquisition, LLC	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	14,550		14,550		14,550	(2)
THG Acquisition, LLC	Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	206,190		206,190		206,190	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	58,320		58,320		58,320	(2)
THG Acquisition, LLC	Delayed Draw Term Loan	SOFR	+	5.75%	(M)	11.21%	12/2/2026	22,025		22,025		21,805	(2)
										495,736		495,516
Machinery
Harvey Tool Company, LLC	Delayed Draw Term Loan	SOFR	+	5.50%	(Q)	11.03%	10/26/2027	34,940		34,940		34,591	(2)
Harvey Tool Company, LLC	Term Loan	SOFR	+	5.50%	(Q)	11.00%	10/26/2027	221,631		221,631		219,415	(2)
NCWS Intermediate, Inc.	Delayed Draw Term Loan	SOFR	+	6.00%	(Q)	11.53%	12/29/2026	61,696		61,696		61,696	(2)
NCWS Intermediate, Inc.	Term Loan	SOFR	+	6.00%	(Q)	11.53%	12/29/2026	205,398		205,398		205,398	(2)
NCWS Intermediate, Inc.	Delayed Draw Term Loan	SOFR	+	6.50%	(Q)	12.03%	12/29/2026	12,600		12,600		12,600	(2)
										536,265		533,700
Software
Emergency Communications Network, LLC	Term Loan	SOFR	+	8.75%	(Q)	14.13%	6/30/2024	252,313		252,295		219,512	(2)
Pegasus Global Enterprise Holdings, LLC	Term Loan	SOFR	+	5.25%	(Q)	10.75%	5/29/2025	259,306		259,306		259,306	(2)
Pegasus Global Enterprise Holdings, LLC	Delayed Draw Term Loan	SOFR	+	5.25%	(Q)	10.75%	5/29/2025	75,601		75,601		75,601	(2)
										587,202		554,419
Trading Companies & Distributors
Penn Detroit Diesel Allison, LLC	Term Loan	SOFR	+	6.25%	(M)	11.71%	12/14/2027	32,913		32,913		32,913	(2)
										32,913		32,913

Total Investments, December 31, 2023									$	5,266,968	$	5,129,130

(2) Loan includes interest rate floor feature.

(3) The investment was on non-accrual status as of December 31, 2023.

(4) The December 31, 2022 presentation has been revised to conform to the December 31, 2023 presentation.

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Below are the consolidated statements of assets and liabilities for SDLP (dollars in millions):


	As of September 30, 2024		As of December 31, 2023
	(unaudited)
Selected Consolidated Statements of Assets and Liabilities Information:
Investments in loans at fair value (cost of $4,724 and $5,267, respectively)	$	4,581	$	5,129
Restricted cash		137		150
Other Assets		32		42
Total assets	$	4,750	$	5,321

Senior notes	$	3,319	$	3,705
Intermediate funding notes		125		139
Interest payable		74		79
Other liabilities		56		57
Total liabilities		3,574		3,980
Members' capital		1,176		1,341
Total liabilities and members' capital	$	4,750	$	5,321

Below are the consolidated statements of operations for SDLP (dollars in millions):


	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
Selected Consolidated Statement of Operation Information:
Total revenues	$	137		$	145		$	420		$	421
Total expenses		79			83			241			236
Net unrealized appreciation/(depreciation)		68			154			(4	)		69
Net realized gain/(loss)		(93	)		(148	)		(93	)		(148	)
Net income/(loss)	$	33		$	68		$	82		$	106

After performing the investment analysis and income analysis for the three and nine months ended September 30, 2024, the Company determined that the fair value of the SDLP represented greater than 20% of the Company's total investments (at fair value) and also

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generated more than 20% of the Company’s total income. Accordingly, the related summary financial information is presented in the "Senior Direct Lending Program" heading above.

Results of Operations

Our operating results for the three and nine months ended September 30, 2024 and 2023 were as follows (dollars in thousands):


	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
Total investment income	$	24,401		$	21,228		$	72,815		$	60,705
Total expenses (including excise tax expense)		12,112			10,006			35,033			29,093
Net investment income		12,289			11,222			37,782			31,612
Net realized gain (loss)		(816	)		(391	)		(753	)		(391	)
Net change in unrealized appreciation (depreciation)		1,385			2,530			630			(3,738	)
Net increase in net assets resulting from operations	$	12,858		$	13,361		$	37,659		$	27,483
Net investment income per share - basic and diluted	$	0.30		$	0.27		$	0.91		$	0.76
Net increase in net assets resulting from operations per share - basic and diluted	$	0.31		$	0.32		$	0.91		$	0.66

Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including the level of new investment commitments, expenses, the recognition of realized gains and losses, and changes in unrealized appreciation and depreciation on the investment portfolio.

Investment Income

We expect our portfolio to continue to grow as we raise and deploy capital through our private offering and our investment income to grow commensurately. The shifting environment in base interest rates may affect our investment income over the long term. Increases in interest rates, however, may adversely affect our existing borrowers.

Investment income increased to $24.4 million and $72.8 million for the three and nine months ended September 30, 2024, respectively, from $21.2 million and $60.7 million for the comparable period in the prior year, primarily due to increased investment activity driven by an increase in our deployed capital and an increase in interest income from our portfolio investments and, to a lesser extent, fee income.

Operating Expenses

Expenses for the three and nine months ended September 30, 2024 and 2023 were as follows (dollars in thousands):


	For the three months ended September 30,				For the nine months ended September 30,
	2024		2023		2024		2023
Base management fees	$	1,442	$	1,266	$	4,199	$	3,794
Income-based incentive fees		1,837		1,810		5,380		3,828
Professional fees		469		537		1,663		1,559
Administrator expenses		270		271		905		901
Interest expenses		7,509		5,459		20,978		15,570
Credit facility fees		383		308		1,078		2,350
Directors’ fees and expenses		79		102		230		265
Organizational expenses		—		93		155		286
Insurance expenses		19		95		172		290
Other general and administrative		104		63		273		248
Excise tax expense		—		2		—		2
Total expenses	$	12,112	$	10,006	$	35,033	$	29,093

Total expenses increased to $12.1 million and $$35.0 million for the three and nine months ended September 30, 2024, respectively, from $10.0 million and $29.1 million for the three and nine months ended September 30, 2023.

Management and Incentive Fees

The increase in management and incentive fees for the three and nine months ended September 30, 2024 from the comparable periods in the prior year were primarily driven by our increasing invested balance.

Interest Expenses and Credit Facility Fees

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Interest expenses and credit facility fees increased to $7.9 million and $22.1 million, respectively, for the three and nine months ended September 30, 2024 from $5.8 million and $17.9 million, respectively, for the three and nine months ended September 30, 2023. The increase was primarily attributable to increased expenses related to the issuance of the Notes (as defined below) on December 21, 2023 as well as the increased usage of our Credit Facilities. Expenses during the period ended June 30, 2023 included an acceleration of debt financing costs in the amount of $1.4 million related to the Amendment (as defined below) of the JPM Facility (as defined below), see "JPM Facility" below for more information.

Net Realized Gains/Losses

We measure realized gains or losses by the difference between the net proceeds from the disposition and the amortized cost basis of an investment, without regard to unrealized gains or losses previously recognized.

For the three months ended September 30, 2024, we had a realized loss of $(0.8) million due to the extinguishment of the CIBC Facility. For the nine months ended September 30, 2024, we had a net realized loss of $(0.8) million which was due to the loss on the extinguishment of the CIBC Facility, a loss realized from the winddown of two interest rate swaps during the period, slightly offset by an escrow payment from a previously realized investment.

For the three and nine months ended September 30, 2023, we had $(0.4) million and $(0.4) million, respectively, of realized losses, due to the disposition of one of our portfolio companies.

Net Change in Unrealized Appreciation/Depreciation

For the three and nine months ended September 30, 2024, we had $1.4 million and $0.6 million, respectively, of unrealized appreciation on portfolio investments.

For the three months ended September 30, 2023, we had $2.5 million of unrealized appreciation on investments due to the decrease in cost of the Subordinated Certificates as well as overall favorable market spread adjustments on the portfolio during the period.

For the nine months ended September 30, 2023, we had $(3.7) million of unrealized depreciation on investments due to overall unfavorable market spread adjustments on the portfolio during the period.

Net Increase in Net Assets Resulting from Operations

For the three and nine months ended September 30, 2024, the net increase in net assets resulting from operations was $12.9 million or $0.31 per share and $37.7 million or $0.91 per share, respectively. For the three and nine months ended September 30, 2023, the net increase in net assets resulting from operations was $13.4 million or $0.32 per share and $27.5 million and $0.66 per share, respectively.

Financial Condition, Liquidity and Capital Resources

We expect to generate cash primarily from (i) the net proceeds from drawdowns of our capital commitments to purchase shares of our common stock pursuant to our private offering of our shares (the "Offering"), (ii) cash flows from our operations, (iii) proceeds from net borrowings on the JPM Facility and the SMBC Facility and (iv) any future offerings of our equity or debt securities. We may fund a portion of our investments through borrowings under the JPM Facility and the SMBC Facility and issuances of senior securities. Our primary use of cash will be for (i) investments in portfolio companies in accordance with our investment objective and investment strategies and to comply with certain portfolio diversification requirements, (ii) providing capital to the SDLP through the Subordinated Certificates, (iii) the cost of operations (including paying the Adviser), (iv) debt service and other financing costs of any borrowings, (v) any cash distributions to the holders of our common stock, and (vi) general working capital purposes. We will also pay operating expenses, including advisory and administrative fees and expenses, and may pay other expenses such as due diligence expenses of potential new investments, from the net proceeds of the Offering.

Equity

We are authorized to issue 500,000,000 shares of common stock at $0.01 par value per share.

On March 29, 2022, in connection with its seed audit, we issued 100 shares of common stock for $10.00 to Varagon, which were subsequently redeemed on June 2, 2022 in connection with the Merger.

As of September 30, 2024, we had received capital commitments totaling $488.2 million ($73.5 million remaining undrawn), of which $7.2 million ($1.2 remaining undrawn) is from Varagon and current officers and directors of the Company. On June 2, 2022, we held our Initial Closing and entered into Subscription Agreements with a number of investors providing for the private placement of our shares of common stock.

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Capital Drawdown Notice Date	Date of Issuance	Number of Shares Issued		Aggregate Offering Price		Issuance Price per Share
May 20, 2022	June 2, 2022		36,130,510	$	361,305	$	10.00
June 27, 2022	July 12, 2022		2,994,012	$	30,000	$	10.02
August 23, 2022	September 7, 2022		2,362,205	$	24,000	$	10.16

Distributions and Dividend Reinvestments

Distributions to common shareholders are recorded on the ex-dividend date. We have elected, and intend to qualify annually, to be treated as a RIC for U.S. federal income tax purposes under the Code. The Company will be required to distribute dividends each tax year as a RIC to its shareholders of an amount generally at least equal to 90% of its investment company taxable income, determined without regard to any deduction for dividends paid, in order to be eligible for tax benefits allowed to a RIC under Subchapter M of the Code. The Company anticipates paying out as a distribution all or substantially all of those amounts. The amount to be paid out as a dividend is determined by the Board and is based on management’s estimate of the Company’s annual taxable income. Net realized capital gains, if any, are generally distributed, although the Company may decide to retain such net realized capital gains for investment.

With respect to distributions, we have adopted an “opt out” distribution reinvestment plan (“DRIP”) for common shareholders. As a result, in the event of a declared distribution, each shareholder that has not “opted out” of the DRIP will have their dividends or distributions automatically reinvested in additional shares of our common stock rather than receiving cash distributions. Shareholders who receive distributions in the form of shares of common stock will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.


Distribution	Date Declared	Record Date	Payment Dates	Amount per Share		Cash Distribution		DRIP Shares Issued		DRIP Shares Value
Quarterly	December 12, 2022	December 15, 2022	December 21, 2022	$	0.2635	$	10,892		3,915	$	40
Quarterly	December 19, 2022	December 23, 2022	January 27, 2023		0.2405		9,941		3,665		37
Quarterly	March 23, 2023	March 27, 2023	March 31, 2023		0.2222		9,185		3,619		35
Quarterly	May 10, 2023	July 1, 2023	July 15, 2023		0.2246		9,284		3,780		37
Quarterly	August 8, 2023	October 2, 2023	October 16, 2023		0.2271		9,387		3,825		38
Quarterly	November 7, 2023	December 27, 2023	January 17, 2024		0.2397		9,908		4,090		41
Special	December 18, 2023	December 27, 2023	January 17, 2024		0.1205		4,981		2,056		20
Quarterly	March 20, 2024	March 29, 2024	April 10, 2024		0.2371		9,809		3,461		34
Special	March 20, 2024	March 29, 2024	April 10, 2024		0.0333		1,378		486		5
Quarterly	May 9, 2024	June 28, 2024	July 17, 2024		0.2371		9,809		3,533		35
Special	May 9, 2024	June 28, 2024	July 17, 2024		0.0662		2,739		986		10
Quarterly	August 6, 2024	September 30, 2024	October 17, 2024		0.2397		9,916		3,699		36
Special	August 6, 2024	September 30, 2024	October 17, 2024		0.0638		2,639		985		10
Total						$	99,868		38,100	$	378

Income Taxes

The Company has elected, and intends to qualify annually, to be treated as a RIC under Subchapter M of the Code. As a RIC, the Company generally will not pay U.S. federal income taxes at corporate rates on any ordinary income or capital gains that it timely distributes to its shareholders as dividends. To qualify as a RIC, the Company must meet certain minimum distribution, source-of-income, and asset diversification requirements. The minimum distribution requirements applicable to the RIC require the Company to distribute at least 90% of its investment company taxable income, as defined by the Code, each year.

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The Company evaluates tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority in accordance with ASC Topic 740, Income Taxes (“ASC 740”). Tax benefits of positions not deemed to meet the more-likely-than-not threshold, or uncertain tax positions, would be recorded as tax expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits 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. As of September 30, 2024, the Company did not have any uncertain tax positions that met the recognition or measurement criteria, nor did the Company have any unrecognized tax benefits.

Our accounting policy on income taxes is critical because if we are unable to maintain our tax treatment as a RIC, we would be required to record a provision for U.S. federal income taxes, which may be significant to our financial results.

Federal Income Taxes

The Company is subject to the U.S. federal income tax rules and filing requirements. The Company is expected to have minimal or no income subject to tax and therefore no provision has been included for taxes due. The Company has elected to be treated, and intends to qualify annually, as a RIC under Subchapter M of the Code. As a result, the Company generally does not expect to be subject to U.S. federal income taxes.

The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740 as of September 30, 2024.

In the normal course of business, the Company is subject to examination by federal and certain state and local tax regulators. The Company adopted a tax year-end of December 31.

For income tax purposes, distributions paid to shareholders are reported as ordinary income, return of capital, long-term capital gains, or a combination thereof.

Credit Facilities

JPM Facility

On June 2, 2022, the Company's wholly owned subsidiary, VCCF, entered into the Loan and Security Agreement (the “Loan and Security Agreement” and the revolving credit facility thereunder, the “JPM Facility”) with JPMorgan Chase Bank, National Association, as administrative agent (“JPMorgan”).

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	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
JPM Facility interest	$	5,114		$	4,985		$	14,930		$	14,558
JPM Facility unused fees		74			83			276			273
Amortization of debt issuance costs		125			123			371			1,795
Total interest and financing expenses related to the JPM Facility	$	5,313		$	5,191		$	15,577		$	16,626
Weighted average outstanding debt balance of the JPM Facility	$	261,307		$	251,124		$	251,684		$	259,901
Weighted average interest rate of the JPM Facility (annualized)		7.8	%		7.9	%		7.9	%		7.5	%

CIBC Facility

The CIBC Facility bore interest from January 1, 2023 to January 31, 2026 (the "Availability Period") at an annual rate of: (i) with respect to interest based on the greatest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 1/2 of 1% and (c) zero (the "ABR"), the ABR plus a margin equal to 1.500% per annum; and (ii) with respect to interest based on a term SOFR, the SOFR plus a margin equal to 2.500% per annum and after the Availability Period at an annual rate of: (i) with respect to interest based on the ABR, the ABR plus a margin equal to 1.750% per annum; and (ii) with respect to interest based on a term SOFR, the SOFR plus a margin equal to 2.750% per annum. CIBC, as the administrative agent determines the reference rate. The Company paid a fee of 0.375% per annum on the average daily committed but unused amounts under the CIBC Facility during the first nine months of the CIBC Facility (January 31, 2023 up to but not including October 31, 2023), and thereafter, 0.375% if the average daily used amount of the commitment exceeds 25% of the total commitment or otherwise, 0.50%.


	For the three months ended September 30,						For the nine months ended September 30,
	2024(1)			2023			2024			2023
CIBC Facility interest	$	490		$	474		$	1,715		$	1,012
CIBC Facility unused fees		16			49			98			140
Amortization of debt issuance costs		26			53			143			142
Total interest and financing expenses related to the CIBC Facility	$	532		$	576		$	1,956		$	1,294
Weighted average outstanding debt balance of the CIBC Facility	$	22,100		$	24,000		$	28,496		$	17,675
Weighted average interest rate of the CIBC Facility (annualized)		8.8	%		7.8	%		8.0	%		7.7	%

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(1) On August 9, 2024, the Company repaid all amounts outstanding under the CIBC Facility, including outstanding borrowings and accrued interest, and terminated the CIBC Facility.

SMBC Facility

On August 28, 2024, the Company closed an additional $25.0 million of commitments under the SMBC Facility increasing the maximum principal amount to $195,000,000.


	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
SMBC Facility interest	$	716		$	—		$	716		$	—
SMBC Facility unused fees		66			—			66			—
Amortization of debt issuance costs		51			—			51			—
Total interest and financing expenses related to the SMBC Facility	$	833		$	—		$	833		$	—
Weighted average outstanding debt balance of the SMBC Facility	$	38,196		$	—		$	12,825		$	—
Weighted average interest rate of the SMBC Facility (annualized)		7.5	%		0.0	%		7.5	%		0.0	%

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Unsecured Notes

On December 21, 2023, the Company entered into a Master Note Purchase Agreement (the “Note Purchase Agreement”) governing the issuance of $25,000,000 in aggregate principal amount of Series A Senior Notes, Tranche A, due December 21, 2026, with a fixed interest rate of 8.10% per year (the “2026 Notes”), and $25,000,000 in aggregate principal amount of Series A Senior Notes, Tranche B, due December 21, 2028, with a fixed interest rate of 8.20% per year (the “2028 Notes” and, together with the 2026 Notes, the “Notes”), to qualified institutional investors in a private offering exempt from the registration requirements of the 1933 Act. The Notes are guaranteed by VCC Equity Holdings, LLC, a wholly owned subsidiary of the Company.

On February 2, 2024, in connection with each of the 2026 Notes and the 2028 Notes, the Company entered into an interest rate swap

agreement for a total notional amount of $25,000,000 and $25,000,000 that matures on December 21, 2026 and December 21, 2028,

respectively. Under the interest rate swap agreement for the 2026 Notes and the 2028 Notes, the Company receives a fixed interest rate of 8.10% and 8.20% and pays a floating interest rate of SOFR + 4.226% and SOFR + 4.595%, respectively. The Company designated these interest rate swaps, the 2026 Notes, and the 2028 Notes as a qualifying fair value hedge accounting relationship. For more information, see “Item 1. Notes to Consolidated Financial Statements – Note 5. Derivative Instruments” in this Quarterly Report on Form 10-Q.

At September 30, 2024, the carrying amount of the Notes approximated their fair value.

The following table summarizes the interest expenses and amortization of financing costs incurred on the Notes for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):


	For the three months ended September 30,					For the nine months ended September 30,
	2024			2023		2024			2023
2026 Notes interest	$	506		$	—	$	1,518		$	—
2028 Notes interest		513		$	—	$	1,539		$	—
Amortization of debt issuance costs		25		$	—	$	73		$	—
Effect of interest rate swap		170				$	560
Total	$	1,214		$	—	$	3,690		$	—
Weighted average stated interest rate, net of effect of interest rate swaps (annualized)		9.5	%	$	—		9.7	%	$	—
Weighted average outstanding balance		50,000		$	—		50,000		$	—

Contractual Obligations

The following table shows the contractual maturities of our debt obligations as of September 30, 2024 (dollars in thousands):


	Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years
JPM Facility	$	260,850	$	—	$	—	$	260,850	$	—
SMBC Facility		62,000		—		—		62,000		—
2026 Notes		25,000		—		25,000		—		—
2028 Notes		25,000		—		—		25,000		—
Total debt obligations	$	372,850	$	—	$	25,000	$	347,850	$	—

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Related-Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

•

the Investment Advisory Agreement;

•

the Administration Agreement;

•

the Expense Reimbursement Agreement;

•

the Fronting Letter Agreement; and

•

the Placement Agent Agreements.

For more information on the above agreements, see "Item 1. Notes to Consolidated Financial Statements - Note 7. Related Party Transactions" in this Quarterly Report on Form 10-Q.

On December 22, 2022, the SEC granted an exemptive order (collectively, the “Order”) that permits us to participate in negotiated co-investment transactions with certain other funds and accounts managed and controlled by Varagon or an affiliate, subject to the satisfaction of certain conditions. Pursuant to the Order, the Company is permitted to co-invest with its affiliates if a "required majority" (as defined in Section 57(o) of the 1940 Act) of the Board's independent directors make certain conclusions in connection with a co-investment transaction, including, but not limited to, that (1) the terms of the potential co-investment transaction, including the consideration to be paid, are reasonable and fair to the Company and its shareholders and do not involve overreaching in respect of the Company or its shareholders on the part of any person concerned, and (2) the potential co-investment transaction is consistent with the interests of the Company's shareholders and is consistent with its then-current investment objective and strategies. Neither we nor the affiliated funds are obligated to invest or co-invest when investment opportunities are referred to us or them.

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Off-Balance Sheet Arrangements

Portfolio Company Commitments

As of September 30, 2024 and December 31, 2023, we had commitments under loan and financing agreements to fund up to $58.0 million to 37 portfolio companies and $22.7 million to 29 portfolio companies, respectively. These commitments are primarily composed of senior secured term loans and revolvers, and an analysis of their fair value is included in the Consolidated Schedule of Investments. The commitments are generally subject to the borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. The terms of the borrowings and financings subject to commitment are comparable to the terms of other loan and equity securities in our portfolio. A summary of the composition of the unfunded commitments as of September 30, 2024 and December 31, 2023 are shown in the table below (dollars in thousands):

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	As of September 30, 2024		As of December 31, 2023
3G Intermediate, Inc.		1,333		—
3G Intermediate, Inc.		667		—
Accupac, LLC		564		564
ACP Vault Acquisition, Inc.		1,036		—
ACP Vault Acquisition, Inc.		1,943		—
ADPD Holdings, LLC		2		5
ADPD Holdings, LLC		9		12
ADPD Holdings, LLC		11		13
ADPD Holdings, LLC		2		—
Advanced Web Technologies Holding Company		274		—
AWT Merger Sub, Inc.		845		—
Adviser Investments, LLC		9		9
Adviser Investments, LLC		—		37
Bebright MSO, LLC		1,225		—
Bebright MSO, LLC		1,237		—
BPCP NSA Intermedco, Inc.		1,944		—
BPCP NSA Intermedco, Inc.		911		—
Boulder Scientific Company, LLC		—		625
BRG Acquisition Co., LLC		600		600
Castleworks Home Services Company		7		7
Concord III, L.L.C.,		105		210
Distinct Holdings, Inc.		1,590		—
Easy Ice, LLC		1,352		—
Express Wash Acquisition Company, LLC		115		115
Eye Health America, LLC		600		360
Eye Health America, LLC		804		1,092
Gen4 Dental Partners OPCO, LLC		2,927		—
Gen4 Dental Partners OPCO, LLC		585		—
Graffiti Buyer, Inc.		1,213		—
Fingerpaint Marketing, Inc.		—		14
Hissho Parent, LLC		635		—
HLSG Intermediate, LLC		—		1,655
Horizon Freight Holdings, Inc.		1,543		—
Horizon Freight Holdings, Inc.		1,543		—
Horizon Freight Holdings, Inc.		775		—
HTI Intermediate, LLC		536		—
HTI Intermediate, LLC		321		—
Hub Pen Company, LLC		629		—
USSC Holding Corp.		896		—
USSC Holding Corp.		518		—
JTM Foods LLC		2		3
KL Bronco Acquisition, Inc.		411		250
KL Bronco Acquisition, Inc.		1,250		1,786
KL Charlie Acquisition Company		52		—
Krayden Holdings, Inc.		1,251		—
Krayden Holdings, Inc.		837		386
Krayden Holdings, Inc.		386		386
Krayden Holdings, Inc.		386		405
Leiters, Inc.		167		244
M&D Midco, Inc.		6		11
M&D Midco, Inc.		—		10
MDI Buyer, Inc.		323		7
Municipal Emergency Services, Inc.		3,774		—
MWD Management, LLC		267		266
North Haven Stallone Buyer, LLC		187		333
OIS Management Services, LLC		4,441		—
OIS Management Services, LLC		577		577
Oliver Packaging, LLC		411		176

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Online Labels Group, LLC		11		10
Online Labels Group, LLC		9		9
Online Labels Group, LLC		9		9
POY Holdings, LLC		—		1,211
RFI Buyer, Inc.		11		12
Senior Direct Lending Program, LLC		9,770		8,557
SGA Dental Partners Opco, LLC		1,790		1,394
SI Holdings, Inc.		522		—
Techmer BB Bidco, LLC		12		32
Titan Group Holdco, LLC		586		—
Titan Group Holdco, LLC		586		—
Titan Group Holdco, LLC		455		—
Turbo Buyer, Inc.		—		760
United Musculoskeletal Partners Acquisition Holdings, LLC		—		562
US Health Partners Management, LLC		37		—
US Health Partners Management, LLC		11		—
Zavation Medical Products, LLC		164		—
Total Unfunded Commitments	$	58,007	$	22,714

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated statements of assets and liabilities. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods.

Valuation of Portfolio Securities.

Investments are valued at the end of each calendar quarter. Most of our investments may be in loans that do not have readily available market quotations. Assets that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Board. In connection with that determination, portfolio company valuations will be prepared using sources, preliminary valuations obtained from independent valuation firms depending on the availability of information on our assets and the type of asset being valued, all in accordance with our valuation policy. The participation of the Adviser in the valuation process could result in a conflict of interest because the Adviser’s management fee is based in part on our gross assets.

Because fair values, and particularly fair values of private securities and private companies, are inherently uncertain, they may fluctuate over short periods of time, and are often based to a large extent on estimates, comparisons and qualitative evaluations of private information, our determinations of fair value may differ materially from the values that would have been determined if a ready market for these securities existed. This could make it more difficult for our shareholders to value accurately our portfolio investments and could lead to undervaluation or overvaluation of our interests. In addition, the valuation of these types of securities may result in substantial write-downs and earnings volatility.

NAV as of a particular date may be materially greater than or less than the value that would be realized if assets were to be liquidated as of such date. For example, if we were required to sell a certain asset or all or a substantial portion of our assets on a particular date, the actual price that we would realize upon the disposition of such asset or assets could be materially less than the value of such asset or assets as reflected in our NAV. Volatile market conditions could also cause reduced liquidity in the market for certain assets, which could result in liquidation values that are materially less than the values of such assets as reflected in NAV.

For more information regarding the fair value hierarchies, our framework for determining fair value and the composition of our portfolio, see "Item 1. Notes to Consolidated Financial Statements - Note 2. Significant Accounting Policies” in this Quarterly Report on Form 10-Q.

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Revenue Recognition

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Investment Income

Interest income from investments in the Subordinated Certificates of SDLP is recorded based on an estimate of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC Topic 325-40, Beneficial Interests in Securitized Financial Assets. The Company monitors the expected cash flows from these investments, including the expected residual payments, and the effective yield is determined and updated periodically. Any difference between the cash distribution received and the amount calculated pursuant to the effective interest method is recorded as an adjustment to the cost basis of such investments.

PIK Interest

PIK interest, which is a non-cash source of income at the time of recognition, is included in the Company’s taxable income, and therefore affects the amount the Company would be required to distribute to its shareholders to maintain its tax treatment as a RIC for federal income tax purposes, even though the Company had not yet collected the cash. For the three and nine months ended September 30, 2024, the Company earned PIK interest of $0.7 million and $1.2 million, respectively. For the three and nine months ended September 30, 2023, the Company earned PIK interest of $0.1 million and $0.3 million, respectively, reflected on the accompanying consolidated statements of operations as part of interest income.

Fee Income

Non-accrual loans

A loan can be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans are recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid, and, in management’s judgment, payments are likely to remain current. There were no loans on non-accrual as of September 30, 2024 and December 31, 2023.

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Recent Developments

Dividend Declaration

Pricing of CLO Transaction

On October 31, 2024, we, through VCC CLO, priced a $493.77 million term debt securitization (the “CLO Transaction”). The CLO Transaction is expected to close on or about November 26, 2024 (the “Closing”). The VCC CLO Secured Debt (as defined below) to be issued by VCC CLO in the CLO Transaction will be secured by a portfolio of collateral obligations consisting primarily of middle market loans and participation interests therein.

The CLO Transaction is expected to be executed through a private placement of several securities (collectively, “VCC CLO Secured Debt”), which include the Class A-1 Senior Secured Floating Rate Notes, Class A-2 Senior Secured Floating Rate Loans, Class B Senior Secured Floating Rate Notes, Class B Senior Secured Floating Rate Loans, and Class C Mezzanine Secured Deferrable Floating Rate Notes. Additionally, it includes a purchase by VCC CLO Depositor of the subordinated notes issued by VCC CLO (the “Subordinated Notes” and, together with the VCC CLO Secured Debt, the “VCC CLO Debt”).

We, through VCC CLO Depositor, are expected to acquire 100% of the Subordinated Notes at the Closing and will be required to retain the Subordinated Notes in accordance with the U.S. Risk Retention Rules at and after the Closing. The Subordinated Notes will not bear interest.

We expect that the VCC CLO Debt will mature on October 20, 2036, unless otherwise redeemed earlier in accordance with the terms of the indenture governing the VCC CLO Debt, to be executed at the Closing (the “Indenture”).

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including the valuation of our investment portfolio and changes in interest rates. The prices of securities held by us may decline in response to certain events, including those directly involving the companies in which we invest; conditions affecting the general economy, including inflationary pressures; overall market changes, including an increase in market volatility and interest rate volatility; legislative reform; and general political, social or economic instability. Generally, a rise in the general level of interest rates, like the current elevated interest rate environment, can be expected to lead to higher interest rates applicable to any variable rate investments we may hold and lead to declines in the value of any fixed rate investments we may hold. However, for variable rate investments that have an interest rate floor, our interest income will not decrease below a threshold amount. To the extent that a substantial portion of our investments may be in variable rate investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed the hurdle rate applicable to the upper level breakpoint of the pre-incentive fee net investment income incentive fee, and may result in a substantial increase in our net investment income and to the amount of incentive fees payable to the Adviser with respect to our increased pre-incentive fee net investment income. Conversely, a decline in the general level of interest rates can be expected to lead to lower interest rates applicable to any variable rate investments we may hold and to increases in the value of any fixed rate investments we may hold. Such a decrease would make it more difficult for us to meet or exceed the hurdle rate applicable to the upper level breakpoint of the pre-incentive fee net investment income incentive fee, and may result in a substantial decrease in our net investment income and to the amount of incentive fees payable to the Adviser with respect to our decreased pre-incentive fee net investment income.

In addition, we borrow funds in order to make additional investments. Our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we will be subject to risks relating to changes in market interest rates. In periods of elevated interest rates, when we or any future subsidiaries have debt outstanding or financing arrangements in effect, our interest expense will increase, which could reduce our net investment income, particularly to the extent we hold fixed rate investments.

We expect that our long-term investments will be financed primarily with equity and debt. In connection with each of the 2026 Notes and the 2028 Notes, we entered into an interest rate swap agreement in an effort to minimize our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations.

We invest primarily in illiquid debt of private companies. Most of our investments will not have a readily available market quotation, and we value these investments at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our Audit Committee and independent third-party valuation firm(s) engaged at the direction of the Board, and in accordance with our valuation policy. There is no single technique for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If, in the future, we are required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

Valuation Risk

We plan to invest primarily in senior secured loans but may also selectively invest in second lien and subordinated or mezzanine loans of, and equity and equity-related securities in, U.S. middle market companies. Most of our investments will not have a readily available market quotation, and we will value these investments at fair value as determined in good faith by the Board in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

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Interest Rate Risk

We are subject to interest rate risk. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing internals between our assets and liabilities and the effect that interest rates may have on our cash flows. Because we intend to 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.

Since March 2022, the Federal Reserve raised interest rates bringing rates to the 5.25% to 5.50% range. Although the Federal Reserve left its benchmark rates steady in the second quarter of 2024, it subsequently cut the federal funds rate by 50 basis points in September 2024 and an additional 25 basis points in November 2024 following improved inflation data. While the Federal Reserve indicated that there may be additional rate cuts in 2024, future reductions to benchmark rates are not certain. In an elevated interest rate environment, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio. It is possible that the Federal Reserve's tightening cycle could force the United States into a recession. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in base rates, such as SOFR, are not offset by corresponding increases in the spread over such base rate that we earn on any portfolio investments, a decrease in our operating expenses, or a decrease in the interest rate associated with our borrowings. Furthermore, in a lower interest rate environment, we could face a situation where our outstanding debt obligations carry higher coupon payments than newly issued debt, resulting in an increase in relative borrowing costs unless we are able to refinance at more favorable terms.

As of September 30, 2024, all income producing investments in our portfolio and the outstanding borrowings under our credit facilities were at floating rates indexed to SOFR. In addition, the Notes bear interest at fixed rates but have swapped from a fixed rate to a floating rate through interest rate swaps.

The following table shows the estimated annualized impact on net investment income based on hypothetical base rate changes in interest rates on our loan portfolio and outstanding debt as of September 30, 2024, assuming there are no changes in our investment and borrowing structure (dollars in thousands).


	Interest			Interest			Net
Basis Point Change	Income			Expense (1)			Investment Income
Up 300 basis points	$	22,800		$	11,200		$	11,600
Up 200 basis points		15,200			7,500		$	7,700
Up 100 basis points		7,600			3,700		$	3,900
Down 100 basis points		(7,600	)		(3,700	)	$	(3,900	)
Down 200 basis points		(15,200	)		(7,500	)	$	(7,700	)
Down 300 basis points		(22,800	)		(11,200	)	$	(11,600	)

(1) Includes the impact to interest expenses related to the interest rate swaps.

Although we believe that this analysis is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments that could affect our net income. Accordingly, we cannot assure you that actual results would not differ materially from the analysis above.

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were (a) designed to ensure that the information we are required to disclose in our reports under the Exchange Act is recorded, processed, and reported in an accurate manner and on a timely basis and the information that we are required to disclose in our Exchange Act reports is accumulated and communicated to management to permit timely decisions with respect to required disclosure and (b) operating in an effective manner.

Change in Internal Control Over Financial Reporting

No change occurred in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the nine months ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We, and our consolidated subsidiaries and the Adviser are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us or them. From time to time, we, our consolidated subsidiaries and/or the Adviser may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Our business also is subject to extensive regulation, which may result in regulatory proceedings against us.

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Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed under "Item. 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, filed with the SEC on March 25, 2024, which is accessible on the SEC’s website at sec.gov.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

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Item 3. Defaults Upon Senior Securities

None.

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Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

None.

None

For the period covered by this Quarterly Report on Form 10-Q, no director or officer of the Company has entered into any contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or (ii) any non-Rule 10b5-1 trading arrangement.

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Item 6. Exhibits


Exhibit Number		Description
3.1		Articles of Amendment and Restatement (2)
3.2		Amended and Restated Bylaws (1)
3.3		Articles of Merger of the Company (2)
4.1		Form of Subscription Agreement (3)
10.1		Senior Secured Revolving Credit Agreement, dated August 9, 2024, by and among Varagon Capital Corporation, as borrower, Sumitomo Mitsui Banking Corporation, as administrative agent, the issuing banks party thereto, and the lenders party thereto (4).
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
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 (formatted as Inline XBRL and contained in Exhibit 101)


*		Filed here within.
(1)		Incorporated by reference to the Registrant’s Registration Statement on Form 10 filed on May 27, 2022.
(2)		Incorporated by reference to the Registrant’s Amendment No.1 to the Registration Statement on Form 10 filed on July 15, 2022.
(3)		Incorporated by reference to the Registrant’s Amendment No.2 to the Registration Statement on Form 10 filed on July 22, 2022.
(4)		Incorporated by reference to the Registrant's Current Report on Form 8-K filed on August 12, 2024.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	VARAGON CAPITAL CORPORATION

	By:	/s/ Walter J. Owens
		Walter J. Owens
		Chief Executive Officer

Date: November 12, 2024	By:	/s/ Robert J. Bourgeois
		Robert J. Bourgeois
		Chief Financial Officer and Treasurer