Barings(BBDC)2022-02-22 16:00Management Fees - The Base Management Fee for the period from January 1, 2021, is calculated at an annual rate of 1.25% based on gross assets, excluding cash and cash equivalents [94]. - The Base Management Fee for the period from January 1, 2020, to December 31, 2020, was calculated at an annual rate of 1.375% [93]. - The Pre-2021 Income-Based Fee was calculated based on Pre-Incentive Fee Net Investment Income for the preceding calendar quarter, with a hurdle rate of 2% per quarter (8% annualized) [98]. - For the Post-2019 Period, no Pre-2021 Income-Based Fee was payable if the Pre-Incentive Fee Net Investment Income did not exceed the hurdle rate [100]. - The Pre-2021 Capital Gains Fee was calculated as 20% of the positive difference between cumulative realized capital gains and cumulative capital losses, starting from the year ended December 31, 2018 [105]. - Beginning January 1, 2021, the Incentive Fee consists of an Income-Based Fee and a Capital Gains Fee, each calculated independently [106]. - The Income-Based Fee is determined quarterly based on the aggregate Pre-Incentive Fee Net Investment Income exceeding a Hurdle Amount calculated at 2% (8% annualized) of net asset value [107]. - The Income-Based Fee includes a Catch-Up Amount, which is 2.5% (10% annualized) of net asset value for the Trailing Twelve Quarters [107]. - The Incentive Fee Cap limits the Income-Based Fee to 20% of the Cumulative Pre-Incentive Fee Net Return during the relevant Trailing Twelve Quarters [111]. - The Capital Gains Fee is calculated annually as 20% of the positive difference between cumulative realized capital gains and cumulative capital losses, starting from the year ended December 31, 2018 [113]. - If the Incentive Fee Cap is zero or negative, no Income-Based Fee is payable for that quarter [111]. - The Pre-Incentive Fee Net Investment Income does not include realized capital gains or losses, or unrealized appreciation or depreciation [106]. Company Operations and Structure - Barings manages the day-to-day operations and investment advisory services for the company under the Amended and Restated Advisory Agreement [89]. - The company does not currently have any employees; services are provided by employees of Barings [85]. - The company has elected to be regulated as a Business Development Company (BDC) under the 1940 Act, which impacts its operations significantly [124]. - The company intends to distribute substantially all of its income to stockholders, only paying taxes on the portion of taxable income not distributed [126]. - The company is required to maintain a coverage ratio of total assets to total senior securities of at least 150% due to its BDC status [128]. - The company reports investments at market value or fair value, with changes in value reflected in its consolidated statements of operations [124]. - The company has wholly-owned taxable subsidiaries to hold certain portfolio investments, helping to preserve its RIC status and tax advantages [126]. - The company must comply with the provisions of the 1940 Act, including having a majority of directors who are not "interested persons" [129]. - The company is limited in its ability to use leverage for financing its portfolio of investments due to regulatory requirements [128]. - The company is required to meet minimum distribution requirements to avoid incurring significant corporate-level U.S. federal income taxes [126]. - The company may not acquire assets other than qualifying assets unless qualifying assets represent at least 70% of total assets [133]. - The company must obtain exemptive relief from the SEC to co-invest with Barings or its affiliates [130]. - The company has reduced its asset coverage requirement from 200% to 150% following stockholder approval, allowing for more flexibility in issuing senior securities [140]. - The company must distribute at least 90% of its investment company taxable income (ICTI) to qualify for RIC tax treatment, which has been in effect since December 31, 2007 [158]. - The company is subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless specific distribution requirements are met [159]. - At least 50% of the company's assets must consist of cash, cash equivalents, U.S. Government securities, and other qualifying securities to meet diversification requirements [160]. - The company may not invest more than 25% of its total assets in securities of a single issuer to maintain compliance with the Diversification Tests [160]. - The company provides significant managerial assistance to portfolio companies, which may include fees for these services [137]. - Temporary investments may include cash, cash equivalents, and U.S. government securities to ensure 70% of assets are qualifying [139]. - The company is required to maintain a bond issued by a reputable fidelity insurance company to protect against larceny and embezzlement [148]. - The company has adopted a Global Code of Ethics Policy and corporate governance guidelines applicable to its directors and employees [141]. - The company is periodically examined by the SEC for compliance with the 1940 Act [147]. Tax and Regulatory Compliance - The company may need to recognize taxable income without receiving corresponding cash payments, such as original issue discounts on debt obligations [163]. - The company anticipates that a portion of its income may consist of original issue discounts or other income required to be included in taxable income prior to cash receipt [163]. - The company may face challenges in meeting the Annual Distribution Requirement necessary to maintain RIC tax treatment, potentially leading to corporate-level income tax [164]. - If the company fails to satisfy the Annual Distribution Requirement, it may be subject to a 4.0% U.S. federal excise tax [164]. - Failure to qualify for RIC tax treatment could result in corporate-level taxation on all taxable income, reducing the amount available for distribution to stockholders [177]. - The company may distribute taxable dividends payable in cash or shares, which could lead to tax implications for stockholders [175]. - Legislative changes could affect the U.S. federal income tax treatment of investments in the company's stock, impacting stockholders [180]. - The company’s distributions are generally treated as dividends for U.S. tax purposes and may be subject to U.S. income or withholding tax [181]. - State and local tax treatment may differ from U.S. federal income tax treatment, requiring stockholders to consult their tax advisors [183]. Financial Position and Market Risks - As of December 31, 2021, approximately 26.2 million annually [558]. - The February 2019 Credit Facility's borrowings could see a maximum annual interest expense change of 1.4 million), British pounds of £68.3 million (36.6 million (157.6 million) [564]. - The balance of unused commitments to extend financing as of December 31, 2021, included various delayed draw term loans and revolvers totaling over 234,657.5 million [570]. - New commitments made after December 31, 2021, totaled approximately 104.8 million closed and funded [573]. - The 75.8 million in first lien senior secured debt investments and 11.3 million) for credit facilities [571]. - A cash collateralization of 0.23 per share, payable on February 23, 2022 [573]. - The total amount of delayed draw term loans across various portfolio companies includes significant figures such as 12,457.6 million for EMI Porta Holdco LLC [568][570]. - The company has made substantial investments in various sectors, including 2,811.0 million for The Caprock Group, Inc. [570]. - The company has commitments in multiple currencies, with amounts translated into U.S. dollars based on the spot rate at the relevant balance sheet date [570].