WhiteHorse Finance, Inc. Announces Third Quarter 2022 Earnings Results and Declares Quarterly Distribution of $0.355 Per Share
WhiteHorse Finance, Inc.("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the quarter ended September30,2022. In addition, the Company's board of directors has declared a distribution of $0.355 per share with respect to the quarter ending December 31, 2022. The distribution will be payable on January 4, 2023 to stockholders of record as of December 21, 2022.
Third Quarter 2022 Summary Highlights
-- Net Asset Value of $343.0 million, or $14.76 per share
-- Investment portfolio(1) totaling $764.6 million
-- STRS JV investment portfolio totaling $280.9 million
-- Gross investment deployments(2) of $39.5 million for the third quarter, including new originations of $26.1 million and $13.4 million of fundings for add-ons to existing investments
-- Net investment income of $9.8 million, or $0.420 per share
-- Core net investment income of $8.6 million, or $0.372 per share(3)
-- Third quarter distribution of $0.355 per share
Stuart Aronson, WhiteHorse Finance's Chief Executive Officer, commented, "A rising interest rate environment positively impacted our results this past quarter as nearly 100% of our debt portfolio is comprised of floating rate investments. We believe, given the modest leverage levels that we underwrite our loans to, that the majority of our portfolio companies will be able to service our debt in a rising interest rate environment. Additionally, our portfolio remains overwhelmingly represented by non-cyclical or light cyclical borrowers. Despite continued economic headwinds, WhiteHorse ended the quarter with no investments on non-accrual status, and the portfolio is holding up very well. While our pipeline for future deal flow is at record levels, due in part to our differentiated three-tiered sourcing approach and relationship with the leading H.I.G. platform, we have always employed a cautious approach based on an extreme downside scenario and are keeping a careful eye on the market backdrop, especially in the consumer sector. Given the broad reset in credit pricing, we believe that WhiteHorse will be able to selectively take advantage of market conditions and redeploy capital from repayments into higher yielding investments. Combined with portfolio growth and the performance of the STRS JV, this should ultimately lead to earnings accretion and greater coverage of our dividend."
Portfolio and Investment Activity
As of September30,2022, the fair value of WhiteHorse Finance's investment portfolio was $764.6 million, compared with $766.5 million as of June 30, 2022. The portfolio as of September30,2022 consisted of 107 positions across 68 companies with a weighted average effective yield of 11.4% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV (as defined below)) was $7.7 million with the overall portfolio comprised of approximately 80.6% first lien secured loans, 2.7% second lien secured loans, 3.4% equity and 13.3% in investments in STRS JV. Almost all loans were variable rate investments (primarily indexed to the London Interbank Offered Rate or Secured Overnight Financing Rate) with fixed rate securities representing only 0.4% of loans at fair value. Nearly all performing floating rate investments have interest rate floors.
During the three months ended September30,2022, WhiteHorse Finance made investments in three new portfolio companies for a total of $26.1 million, added a total of $13.4 million to existing portfolio companies, and made net fundings of $0.6 million to revolver loans. Proceeds from sales and repayments totaled approximately $36.3 million for the three months ended September30, 2022, driven by three full realizations in Mills Fleet Farm Group, LLC, Nelson Worldwide, LLC, and Maxitransfers Blocker Corp.
WHF STRS Ohio Senior Loan Fund LLC
As of September30,2022, STRS JV's portfolio totaled $280.9 million, consisted of 28 portfolio companies and had a weighted average effective yield of 10.1% on its portfolio.
Results of Operations
For the three months ended September30,2022, the Company's net investment income was approximately $9.8 million, compared with approximately $7.6 million for the same period in the prior year, representing an increase of approximately 28.9%. The increase in net investment income for the year-over-year period was primarily attributable to higher investment income from interest income and STRS JV due to larger portfolio sizes in both the Company and STRS JV, an increase in base rates and lower incentive fee expense. The lower incentive fee expense was due to a reversal of capital gains incentive fee component as a result of $5.9 million in net realized and unrealized losses recorded in the current quarter. This was partially offset by higher interest expense incurred due to higher leverage balances, higher base rates and lower accretion income and nonrecurring fee income recognizeddue to less repayment activities as compared to the same period in the prior year. For the three months ended September30,2022, the Company's investment in STRS JV generated an annualized, gross investment yield of approximately 14.0%.
For the three months ended September30,2022, core net investment income(3) was $8.6 million, or $0.372 per share, compared with $7.8 million, or $0.372 per share for the same period in the prior year.
For the three months ended September30,2022, WhiteHorse Finance reported a net realized and unrealized loss on investments and foreign currency transactions of $5.9 million. This compares with a net realized and unrealized gain on investments and foreign currency transactions of $0.6 million for the three months ended September30,2021. The decrease for the year-over-year period was primarily attributable to markdowns on the portfolio in the current quarter.
WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $3.8 million for the three months ended September30,2022, which compares with a net increase of $8.3 million the three months ended September30,2021.
WhiteHorse Finance's net asset value was $343.0 million, or $14.76 per share, as of September30,2022, compared with $347.4 million, or $14.95 per share, as of June30,2022.
Liquidity and Capital Resources
As of September30,2022, WhiteHorse Finance had cash and cash equivalents of $19.3 million, compared with $18.6 million as of June30,2022, inclusive of restricted cash. As of September30,2022, the Company also had $88.9 million of undrawn capacity under its revolving credit facility.
Distributions
The Company's Board of Directors has declared a distribution of $0.355 per share with respect to the quarter ending December 31, 2022. The distribution will be payable on January 4, 2023 to stockholders of record as of December 21, 2022. In addition, previously on October 14, 2022, the Company declared a special distribution of $0.05 per share, which will be payable on December 9, 2022 to stockholders of record as of October 31, 2022.
On August 10, 2022, the Company declared a distribution of $0.355 per share for the quarter ended September30,2022, consistent with distributions declared for the fortieth consecutive quarter since the Company's initial public offering. The distribution was paid on October 4, 2022 to stockholders of record as of September 20, 2022.
Distributions are paid from taxable earnings and may include return of capital and/or capital gains. The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company's periodic reports filed with the Securities and Exchange Commission.
Conference Call
WhiteHorse Finance will host a conference call to discuss its third quarter results for the period ended September 30, 2022 at 1:00 p.m. ET on Monday, November 14, 2022. To access the teleconference, please dial 800-225-9448 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference Conference ID #WHFQ322. Investors may also access the call on the investor relations portion of the Company's website at www.whitehorsefinance.com.
If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through November 21, 2022. The teleconference replay can be accessed by dialing 800-723-0532 (domestic and international). A webcast replay will also be available on the investor relations portion of the Company's website atwww.whitehorsefinance.com.
About WhiteHorse Finance, Inc.
WhiteHorse Financeis a business development company that originates and invests in loans to privately held, lower middle market companies across a broad range of industries. The Company's investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate ofH.I.G. Capital, LLC, ("H.I.G. Capital").H.I.G. Capitalis a leading global alternative asset manager with over $50 billionof capital under management(4)across a number of funds focused on the small and mid-cap markets. For more information aboutH.I.G. Capital, please visit http://www.higcapital.com. For more information about the Company, please visit http://www.whitehorsefinance.com.
Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
(1)Includes investments in WHF STRS Ohio Senior Loan Fund LLC ("STRS JV"), an unconsolidated joint venture, totaling $102.1 million, at fair value.
(2)Excludes investments made in STRS JV.
(3)"Core net investment income" is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company's financial performance excluding (i) the net impact of costs associated with the refinancing of the Company's indebtedness, (ii) the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and (iii) excise and other income taxes related to such net realized gains and losses (net of incentive fees). The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, are set forth in Schedule 1 hereto.
(4)Based on total capital commitments managed byH.I.G. Capitaland affiliates.
SCHEDULE 1
As a supplement to GAAP financial measures, the Company has provided information relating to core net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income determined in accordance with GAAP. The Company's non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment income adjusted to exclude the net impact of costs associated with the refinancing of the Company's indebtedness, the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and excise or other income taxes related to such net realized gains and losses (net of incentive fees). There were no excise or other income taxes related to net realized gains and losses nor did the Company incur any costs with refinancing any of its indebtedness for the quarters ended September30,2022 and September30,2021.
The following table provides a reconciliation of net investment income to core net investment income for the three months ended September30,2022 and September30,2021 (in thousands, except per share data):
September 30, 2022 September 30, 2021
Amount Per Share Amount Per Share
Amounts Amounts
Net investment income $ 9,768 $ 0.420 $ 7,639 $ 0.366
Net impact of costs associated with refinancing of indebtedness - - - -
Accrual for capital gains incentive fee (1,132) (0.048) 127 0.006
Net impact of excise tax expense related to net realized gains and losses - - - -
Core net investment income $ 8,636 $ 0.372 $ 7,766 $ 0.372
WhiteHorse Finance, Inc.
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share data)
September30,2022 December31,2021
(Unaudited)
Assets
Investments, at fair value
Non-controlled/non-affiliate company investments $ 650,585 $ 736,727
Non-controlled affiliate company investments 11,903 6,874
Controlled affiliate company investments 102,066 75,607
Total investments, at fair value (amortized cost $773,406 and $831,960, respectively) 764,554 819,208
Cash and cash equivalents 9,855 12,185
Restricted cash and cash equivalents 9,445 9,814
Restricted foreign currency (cost of $28 and $464, respectively) 17 469
Interest and dividend receivable 7,853 7,521
Amounts receivable on unsettled investment transactions 3,288 —
Escrow receivable 711 515
Prepaid expenses and other receivables 925 1,307
Unrealized appreciation on foreign currency forward contracts 10 —
Total assets $ 796,658 $ 851,019
Liabilities
Debt $ 430,992 $ 475,958
Distributions payable 8,251 8,222
Management fees payable 3,881 3,766
Incentive fees payable 4,335 7,958
Amounts payable on unsettled investment transactions 331 —
Interest payable 3,772 2,087
Accounts payable and accrued expenses 1,526 2,438
Advances received from unfunded credit facilities 551 839
Total liabilities 453,639 501,268
Commitments and contingencies
Net assets
Common stock, 23,243,088 and 23,162,667 shares issued and outstanding, par value 23 23
$0.001 per share, respectively, and 100,000,000 shares authorized
Paid-in capital in excess of par 340,264 339,161
Accumulated earnings 2,732 10,567
Total net assets 343,019 349,751
Total liabilities and total net assets $ 796,658 $ 851,019
Number of shares outstanding 23,243,088 23,162,667
Net asset value per share $ 14.76 $ 15.10
WhiteHorse Finance, Inc.
Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
Three months ended Nine months ended
September30, September30,
2022 2021 2022 2021
Investment income
From non-controlled/non-affiliate company investments
Interest income $ 17,121 $ 15,199 $ 49,890 $ 44,159
Fee income 423 1,224 1,564 2,344
Dividend income 100 35 268 144
From non-controlled affiliate company investments
Interest income 95 — 228 —
Dividend income 21 76 261 1,042
From controlled affiliate company investments
Interest income 1,753 905 4,339 2,362
Dividend income 2,045 939 5,042 3,638
Total investment income 21,558 18,378 61,592 53,689
Expenses
Interest expense 5,632 3,842 15,351 11,456
Base management fees 3,881 3,508 11,741 10,209
Performance-based incentive fees 1,027 2,069 4,291 6,739
Administrative service fees 171 171 512 512
General and administrative expenses 884 896 2,919 2,592
Total expenses 11,595 10,486 34,814 31,508
Net investment income before excise tax 9,963 7,892 26,778 22,181
Excise tax 195 253 594 845
Net investment income after excise tax 9,768 7,639 26,184 21,336
Realized and unrealized gains (losses) on investments and foreign currency
transactions
Net realized gains (losses)
Non-controlled/non-affiliate company investments 236 109 (17,262) 7,714
Non-controlled affiliate company investments — — 1,725 —
Foreign currency transactions (6) (206) (348) (209)
Foreign currency forward contracts — 1 (8) (3)
Net realized gains (losses) 230 (96) (15,893) 7,502
Net change in unrealized appreciation (depreciation)
Non-controlled/non-affiliate company investments (7,275) (1,370) 5,296 (3,937)
Non-controlled affiliate company investments (389) 792 (2,596) 1,112
Controlled affiliate company investments (212) 860 1,459 591
Translation of assets and liabilities in foreign currencies 1,713 263 2,441 161
Foreign currency forward contracts 10 187 10 186
Net change in unrealized appreciation (depreciation) (6,153) 732 6,610 (1,887)
Net realized and unrealized gains (losses) on investments and foreign currency (5,923) 636 (9,283) 5,615
transactions
Net increase in net assets resulting from operations $ 3,845 $ 8,275 $ 16,901 $ 26,951
Per Common Share Data
Basic and diluted earnings per common share $ 0.17 $ 0.40 $ 0.73 $ 1.30
Dividends and distributions declared per common share $ 0.36 $ 0.36 $ 1.07 $ 1.07
Basic and diluted weighted average common shares outstanding 23,243,088 20,851,435 23,224,990 20,677,545
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
September30,2022
(in thousands)
Issuer InvestmentType(1) Floor Spread Interest Acquisition Maturity Principal/ Amortized Fair FairValue
Above Rate(3) Date(10) Date Share Cost Value(11) AsA
Index(2) Amount Percentage
ofNet
Assets
North America
Debt Investments
Air Freight & Logistics
Access USA Shipping, LLC (d/b/a MyUS.com) First Lien Secured Term Loan 1.50% L+ 8.00% 11.12% 02/08/19 02/08/24 4,718 $ 4,699 $ 4,718 1.38 %
Motivational Marketing, LLC (d/b/a Motivational Fulfillment) First Lien Secured Term Loan 1.00% L+ 6.25% 9.07% 07/12/21 07/12/26 11,124 10,956 10,744 3.13
Motivational Marketing, LLC (d/b/a Motivational Fulfillment)(7) First Lien Secured Revolving Loan 1.00% L+ 6.25% 9.07% 07/12/21 07/12/26 — — (22) (0.01)
15,655 15,440 4.50
Alternative Carriers
Patagonia Holdco LLC (d/b/a Lumen LATAM) First Lien Secured Term Loan 0.50% SF+ 5.75% 8.39% 08/05/22 08/01/29 14,625 12,040 11,993 3.50
12,040 11,993 3.50
Application Software
Atlas Purchaser, Inc. (d/b/a Aspect Software) First Lien Secured Term Loan 0.75% L+ 5.25% 8.68% 08/29/22 05/08/28 3,105 2,595 2,562 0.74
Atlas Purchaser, Inc. (d/b/a Aspect Software) Second Lien Secured Term Loan 0.75% L+ 9.00% 11.19% 05/03/21 05/07/29 15,000 14,628 12,197 3.55
Naviga Inc. (f/k/a Newscycle Solutions, Inc.) First Lien Secured Term Loan 1.00% L+ 7.00% 10.67% 06/14/19 12/29/22 3,189 3,184 3,125 0.91
Naviga Inc. (f/k/a Newscycle Solutions, Inc.)(7)(12) First Lien Secured Revolving Loan 1.00% Base rate+ 6.92% 10.28% 06/14/19 12/29/22 267 267 261 0.08
20,674 18,145 5.28
Asset Management & Custody Banks
JZ Capital Partners Ltd.(4)(5) First Lien Secured Term Loan 1.00% L+ 7.00% 9.77% 01/26/22 01/26/27 10,286 10,108 10,147 2.96
JZ Capital Partners Ltd.(4)(5)(7) First Lien Secured Delayed Draw Loan 1.00% L+ 7.00% 9.77% 01/26/22 01/26/27 — — 22 0.01
10,108 10,169 2.97
Automotive Retail
Team Car Care Holdings, LLC (Heartland Auto)(12) First Lien Secured Term Loan 1.00% Base rate+ 7.98% 10.39% 02/16/18 06/28/24 14,594 14,532 14,594 4.25
14,532 14,594 4.25
Broadcasting
Coastal Television Broadcasting Group LLC First Lien Secured Term Loan 1.00% SF+ 6.50% 9.48% 12/30/21 12/30/26 8,191 8,052 7,946 2.32
Coastal Television Broadcasting Group LLC(7) First Lien Secured Revolving Loan 1.00% SF+ 6.50% 9.48% 12/30/21 12/30/26 — — (4) —
8,052 7,942 2.32
Building Products
PFB Holdco, Inc. (d/b/a PFB Corporation)(13) First Lien Secured Term Loan 1.00% C+ 6.00% 8.71% 12/17/21 12/17/26 8,959 6,889 6,382 1.85
PFB Holdco, Inc. (d/b/a PFB Corporation)(7)(13) First Lien Secured Revolving Loan 1.00% C+ 6.00% 8.71% 12/17/21 12/17/26 — — 2 —
PFB Holdco, Inc. (d/b/a PFB Corporation) First Lien Secured Term Loan 1.00% L+ 6.00% 8.28% 12/17/21 12/17/26 2,182 2,144 2,154 0.63
PFB Holdco, Inc. (d/b/a PFB Corporation)(7) First Lien Secured Revolving Loan 1.00% L+ 6.00% 8.28% 12/17/21 12/17/26 — — 1 —
Trimlite Buyer LLC (d/b/a Trimlite LLC)(5)(13) First Lien Secured Term Loan 1.00% C+ 6.50% 10.67% 07/27/21 07/27/26 22,544 17,681 16,175 4.72
26,714 24,714 7.20
Cable & Satellite
Bulk Midco, LLC(15)(23) First Lien Secured Term Loan 1.00% P+ 5.25% 11.50% 06/08/18 06/08/23 14,922 14,891 14,323 4.18
14,891 14,323 4.18
Commodity Chemicals
Flexitallic Group SAS First Lien Secured Term Loan 1.00% SF+ 7.50% 11.20% (10.70% Cash 10/28/19 10/29/26 16,371 15,777 16,003 4.67
+ 0.50% PIK)
15,777 16,003 4.67
Construction Materials
Claridge Products and Equipment, LLC First Lien Secured Term Loan 1.00% L+ 6.50% 10.17% 12/30/20 12/29/25 7,582 7,484 7,280 2.11
Claridge Products and Equipment, LLC(7)(12) First Lien Secured Revolving Loan 1.00% Base rate+ 5.72% 11.84% 12/30/20 12/29/25 926 918 888 0.26
8,402 8,168 2.37
Data Processing & Outsourced Services
Escalon Services Inc. First Lien Secured Term Loan 1.00% L+ 10.31% 13.22% (11.72% Cash 12/04/20 12/04/25 17,278 16,599 17,797 5.19
+ 1.50% PIK)
Future Payment Technologies, L.P. First Lien Secured Term Loan 1.00% L+ 8.25% 10.81% 12/23/16 06/07/24 23,222 23,074 23,222 6.77
39,673 41,019 11.96
Distributors
Crown Brands LLC First Lien Secured Term Loan 1.00% SF+ 10.00% 12.95% 04/22/22 12/09/25 357 $ 357 $ 344 0.10 %
Crown Brands LLC(19) Second Lien Secured Term Loan 1.50% L+ 10.50% 13.62% 12/15/20 01/08/26 4,386 4,318 2,851 0.83
Crown Brands LLC(19) Second Lien Secured Delayed Draw Loan 1.50% L+ 10.50% 13.74% 12/15/20 01/08/26 651 651 423 0.12
5,326 3,618 1.05
Diversified Chemicals
Manchester Acquisition Sub LLC (d/b/a Draslovka Holding AS) First Lien Secured Term Loan 0.75% SF+ 5.75% 8.85% 11/16/21 11/16/26 7,940 7,575 7,246 2.11
Sklar Holdings, Inc. (d/b/a Starco) First Lien Secured Term Loan 1.00% L+ 9.75% 10.75% (8.75% Cash 11/13/19 05/13/23 7,353 7,292 6,695 1.95
+ 2.00% PIK)
14,867 13,941 4.06
Diversified Support Services
NNA Services, LLC First Lien Secured Term Loan 1.00% L+ 6.75% 10.42% 08/27/21 08/27/26 11,375 11,264 11,165 3.25
11,264 11,165 3.25
Education Services
EducationDynamics, LLC First Lien Secured Term Loan 1.00% L+ 7.00% 10.05% (9.55% Cash 09/15/21 09/15/26 13,119 12,912 12,887 3.75
+ 0.50% PIK)
EducationDynamics, LLC(4)(7) First Lien Secured Delayed Draw Loan 1.00% L+ 7.00% 10.05% (9.55% Cash 09/15/21 09/15/26 — — (3) —
+ 0.50% PIK)
EducationDynamics, LLC(7) First Lien Secured Revolving Loan 1.00% P+ 5.50% 11.75% 09/15/21 09/15/26 240 236 234 0.07
EducationDynamics, LLC(4) Subordinated Unsecured Term Loan N/A 4.00% 4.00% 09/15/21 03/15/27 167 167 167 0.05
13,315 13,285 3.87
Electric Utilities
CleanChoice Energy, Inc. (d/b/a CleanChoice) First Lien Secured Term Loan 1.00% L+ 7.25% 9.76% 10/12/21 10/12/26 10,500 10,331 10,408 3.03
10,331 10,408 3.03
Environmental & Facilities Services
Industrial Specialty Services USA LLC First Lien Secured Term Loan 1.00% L+ 6.25% 9.92% 12/31/21 12/31/26 11,917 11,715 11,612 3.39
Industrial Specialty Services USA LLC(7) First Lien Secured Revolving Loan 1.00% L+ 6.25% 9.18% 12/31/21 12/31/26 886 871 861 0.25
Solar Holdings Bidco Limited(5)(23) First Lien Secured Term Loan 0.50% SF+ 6.75% 9.74% 09/30/22 09/28/29 2,783 2,706 2,706 0.79
Solar Holdings Bidco Limited(5)(13)(23) First Lien Secured Term Loan 0.50% C+ 6.75% 10.92% 09/30/22 09/28/29 3,839 2,726 2,704 0.79
Solar Holdings Bidco Limited(5)(23)(24) First Lien Secured Term Loan 0.00% S+ 6.75% 8.94% 09/30/22 09/28/29 169 182 184 0.05
Solar Holdings Bidco Limited(5)(23) First Lien Secured Delayed Draw Loan 0.50% SF+ 6.75% 9.74% 09/30/22 09/28/29 53 51 51 0.01
Solar Holdings Bidco Limited(5)(7)(23)(24)(25) First Lien Secured Delayed Draw Loan 0.50% SF+ 6.75% 9.74% 09/30/22 09/28/29 — — (10) —
18,251 18,108 5.28
Health Care Facilities
Bridgepoint Healthcare, LLC First Lien Secured Term Loan 1.00% L+ 7.75% 10.51% 10/05/21 10/05/26 10,562 10,392 10,337 3.01
Bridgepoint Healthcare, LLC(7) First Lien Secured Delayed Draw Loan 1.00% L+ 7.75% 10.51% 10/05/21 10/05/26 — — (11) —
Bridgepoint Healthcare, LLC(7) First Lien Secured Revolving Loan 1.00% L+ 7.75% 10.51% 10/05/21 10/05/26 — — (8) —
10,392 10,318 3.01
Health Care Services
CHS Therapy, LLC First Lien Secured Term Loan A 1.50% L+ 9.00% 12.67% (12.17% Cash 06/14/19 06/14/24 7,125 7,079 7,125 2.08
+ 0.50% PIK)
CHS Therapy, LLC First Lien Secured Term Loan C 1.50% L+ 9.00% 12.67% (12.17% Cash 10/07/20 06/14/24 877 869 877 0.26
+ 0.50% PIK)
Lab Logistics, LLC First Lien Secured Term Loan 1.00% SF+ 7.25% 10.16% 10/16/19 09/25/23 5,501 5,446 5,495 1.60
Lab Logistics, LLC First Lien Secured Delayed Draw Loan 1.00% SF+ 7.25% 10.20% 10/16/19 09/25/23 5,144 5,135 5,144 1.50
PG Dental New Jersey Parent, LLC First Lien Secured Term Loan 1.00% L+ 9.75% 12.57% (11.07% Cash 11/25/20 11/25/25 14,845 14,640 13,807 4.03
+ 1.50% PIK)
PG Dental New Jersey Parent, LLC(7) First Lien Secured Revolving Loan 1.00% L+ 9.75% 12.57% (11.07% Cash 11/25/20 11/25/25 352 347 308 0.09
+ 1.50% PIK)
33,516 32,756 9.56
Health Care Supplies
ABB/Con-cise Optical Group LLC (d/b/a ABB Optical Group, LLC) First Lien Secured Term Loan 0.75% L+ 7.50% 10.46% 02/23/22 02/23/28 21,627 $ 21,141 $ 21,281 6.20 %
ABB/Con-cise Optical Group LLC (d/b/a ABB Optical Group, LLC)(7)(12) First Lien Secured Revolving Loan 0.75% Base rate+ 6.51% 12.72% 02/23/22 02/23/28 2,106 2,058 2,073 0.60
23,199 23,354 6.80
Heavy Electrical Equipment
PPS CR Acquisition, Inc. (d/b/a Power Plant Services) First Lien Secured Term Loan 1.00% L+ 6.25% 9.92% 06/25/21 06/25/26 14,166 13,942 13,835 4.03
PPS CR Acquisition, Inc. (d/b/a Power Plant Services)(7) First Lien Secured Delayed Draw Loan 1.00% L+ 6.25% 9.92% 07/11/22 06/25/26 — — (1) —
PPS CR Acquisition, Inc. (d/b/a Power Plant Services)(7) First Lien Secured Revolving Loan 1.00% L+ 6.25% 9.92% 06/25/21 06/25/24 104 103 63 0.02
14,045 13,897 4.05
Home Furnishings
Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC) First Lien Secured Term Loan 1.00% L+ 6.50% 8.92% 10/12/21 10/12/26 20,895 20,555 20,630 6.01
Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC)(7) First Lien Secured Revolving Loan 1.00% L+ 6.50% 8.92% 10/12/21 10/12/26 — — 10 —
Hollander Intermediate LLC (d/b/a Hollander Sleep Products, LLC) First Lien Secured Term Loan 2.00% SF+ 8.75% 11.79% 09/19/22 09/21/26 4,891 4,849 4,671 1.36
25,404 25,311 7.37
Household Appliances
Token Buyer, Inc. (d/b/a Therm-O-Disc, Inc.) First Lien Secured Term Loan 0.50% SF+ 6.00% 9.70% 05/26/22 05/31/29 6,540 6,040 6,003 1.75
6,040 6,003 1.75
Household Products
The Kyjen Company, LLC (d/b/a Outward Hound) First Lien Secured Term Loan 1.00% SF+ 7.00% 10.31% (9.81% Cash 04/05/21 04/05/26 11,347 11,228 10,782 3.14
+ 0.50% PIK)
The Kyjen Company, LLC (d/b/a Outward Hound)(7) First Lien Secured Revolving Loan 1.00% SF+ 7.00% 9.88% (9.38% Cash 04/05/21 04/05/26 676 669 632 0.18
+ 0.50% PIK)
11,897 11,414 3.32
Industrial Machinery
Project Castle, Inc. (d/b/a Material Handling Systems, Inc.) First Lien Secured Term Loan 0.50% SF+ 5.50% 9.05% 06/09/22 06/01/29 8,376 7,521 7,541 2.20
7,521 7,541 2.20
Interactive Media & Services
MSI Information Services, Inc. First Lien Secured Term Loan 1.00% SF+ 7.75% 10.88% 04/25/22 04/24/26 7,851 7,711 7,647 2.23
MSI Information Services, Inc.(7) First Lien Secured Revolving Loan 1.00% P+ 6.75% 13.00% 04/25/22 04/24/26 300 295 286 0.08
8,006 7,933 2.31
Internet & Direct Marketing Retail
BBQ Buyer, LLC (d/b/a BBQ Guys) First Lien Secured Term Loan 1.50% L+ 10.00% 13.12% (11.12% Cash 08/28/20 08/28/25 12,719 12,533 12,616 3.68
+ 2.00% PIK)
BBQ Buyer, LLC (d/b/a BBQ Guys) First Lien Secured Delayed Draw Loan 1.50% L+ 10.00% 13.12% (11.12% Cash 04/29/22 08/28/25 2,593 2,553 2,559 0.75
+ 2.00% PIK)
Luxury Brand Holdings, Inc. (d/b/a Ross-Simons, Inc.) First Lien Secured Term Loan 1.00% L+ 6.50% 9.31% 12/04/20 06/04/26 5,895 5,816 5,854 1.71
Potpourri Group, Inc. First Lien Secured Term Loan 1.50% L+ 8.25% 9.75% 07/03/19 07/03/24 16,513 16,383 16,513 4.81
37,285 37,542 10.95
Investment Banking & Brokerage
JVMC Holdings Corp. (fka RJO Holdings Corp) First Lien Secured Term Loan 1.00% L+ 6.50% 9.62% 02/28/19 02/28/24 12,077 12,043 12,077 3.52
12,043 12,077 3.52
IT Consulting & Other Services
ATSG, Inc. First Lien Secured Term Loan 1.00% L+ 6.50% 9.42% 11/12/21 11/12/26 13,877 13,649 13,653 3.98
13,649 13,653 3.98
Leisure Facilities
Honors Holdings, LLC (d/b/a Orange Theory)(16)(23) First Lien Secured Term Loan 1.00% L+ 7.56% 10.73% (10.23% Cash 09/06/19 09/06/24 9,440 $ 9,337 $ 9,346 2.72 %
+ 0.50% PIK)
Honors Holdings, LLC (d/b/a Orange Theory)(16)(23) First Lien Secured Delayed Draw Loan 1.00% L+ 7.46% 10.80% (10.30% Cash 09/06/19 09/06/24 4,649 4,618 4,603 1.34
+ 0.50% PIK)
Lift Brands, Inc. (d/b/a Snap Fitness) First Lien Secured Term Loan A 1.00% L+ 7.50% 10.62% 06/29/20 06/29/25 5,588 5,541 5,533 1.61
Lift Brands, Inc. (d/b/a Snap Fitness) First Lien Secured Term Loan B N/A 9.50% 9.50% (0.00% Cash 06/29/20 06/29/25 1,330 1,314 1,302 0.38
+ 9.50% PIK)
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(9) First Lien Secured Term Loan C N/A 9.50% 9.50% (0.00% Cash 06/29/20 NA 1,268 1,265 1,084 0.32
+ 9.50% PIK)
22,075 21,868 6.37
Leisure Products
Playmonster Group LLC(6)(20)(21) First Lien Secured Term Loan 1.00% L+ 8.00% 10.78% (2.78% Cash 01/24/22 06/08/26 3,565 3,565 3,509 1.02
+ 8.00% PIK)
3,565 3,509 1.02
Life Sciences Tools & Services
LSCS Holdings, Inc. (d/b/a Eversana Life Science Services, LLC) Second Lien Secured Term Loan 0.50% L+ 8.00% 11.67% 11/23/21 12/16/29 5,000 4,932 4,912 1.43
4,932 4,912 1.43
Office Services & Supplies
American Crafts, LC First Lien Secured Term Loan 1.00% L+ 8.50% 11.62% 05/28/21 05/28/26 8,139 8,050 7,114 2.07
American Crafts, LC First Lien Secured Delayed Draw Loan 1.00% L+ 8.50% 11.62% 01/25/22 05/28/26 1,367 1,344 1,195 0.35
Empire Office, Inc. First Lien Secured Term Loan 1.50% L+ 6.50% 9.62% 04/12/19 04/12/24 12,019 11,923 11,910 3.47
Empire Office, Inc.(4) First Lien Secured Delayed Draw Loan 1.50% L+ 6.50% 9.62% 08/17/21 04/12/24 4,864 4,792 4,820 1.41
26,109 25,039 7.30
Packaged Foods & Meats
Lenny & Larry's, LLC(17)(23) First Lien Secured Term Loan 1.00% L+ 8.92% 11.74% (10.03% Cash 05/15/18 05/15/23 11,201 11,175 10,922 3.19
+ 1.71% PIK)
11,175 10,922 3.19
Paper Packaging
Max Solutions Inc. First Lien Secured Term Loan 1.00% SF+ 6.50% 10.21% 09/29/22 09/29/28 8,264 8,099 8,099 2.35
Max Solutions Inc.(7) First Lien Secured Delayed Draw Loan 1.00% SF+ 6.50% 10.21% 09/29/22 09/29/28 — — — —
Max Solutions Inc.(7)(13) First Lien Secured Revolving Loan 1.00% C+ 6.50% 10.21% 09/29/22 09/29/28 — — — —
Max Solutions Inc.(7) First Lien Secured Revolving Loan 1.00% SF+ 6.50% 10.21% 09/29/22 09/29/28 — — — —
8,099 8,099 2.35
Personal Products
Inspired Beauty Brands, Inc. First Lien Secured Term Loan 1.00% L+ 7.00% 9.91% 12/30/20 12/30/25 11,804 11,650 11,509 3.36
Inspired Beauty Brands, Inc.(7) First Lien Secured Revolving Loan 1.00% L+ 7.00% 9.91% 12/30/20 12/30/25 — — (6) —
Sunless, Inc. First Lien Secured Term Loan 1.00% L+ 6.50% 10.17% 06/30/22 08/13/25 2,092 2,053 2,063 0.60
13,703 13,566 3.96
Research & Consulting Services
Aeyon LLC(23) First Lien Secured Term Loan 1.00% SF+ 8.88% 11.62% 02/10/22 02/10/27 8,933 8,777 8,858 2.58
ALM Media, LLC First Lien Secured Term Loan 1.00% L+ 6.50% 9.31% 11/25/19 11/25/24 13,584 13,467 13,458 3.92
22,244 22,316 6.50
Specialized Consumer Services
Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.) First Lien Secured Term Loan 1.00% L+ 6.50% 9.55% 11/16/21 11/16/27 11,830 $ 11,628 $ 11,558 3.37 %
Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.)(4)(7) First Lien Secured Delayed Draw Loan 1.00% L+ 6.50% 9.55% 11/16/21 11/16/27 — — (24) (0.01)
HC Salon Holdings, Inc. (d/b/a Hair Cuttery) First Lien Secured Term Loan 1.00% L+ 8.00% 11.67% 09/30/21 09/30/26 11,550 11,365 11,550 3.37
HC Salon Holdings, Inc. (d/b/a Hair Cuttery)(7) First Lien Secured Revolving Loan 1.00% L+ 8.00% 11.67% 09/30/21 09/30/26 — — 11 —
True Blue Car Wash, LLC(23) First Lien Secured Term Loan 1.00% SF+ 6.88% 10.01% 10/17/19 10/17/24 9,969 9,876 9,898 2.89
True Blue Car Wash, LLC(7)(23) First Lien Secured Delayed Draw Loan 1.00% SF+ 6.50% 9.55% 10/17/19 10/17/24 4,186 4,124 4,103 1.20
36,993 37,096 10.82
Specialized Finance
WHF STRS Ohio Senior Loan Fund LLC(4)(5)(9)(14) Subordinated Note N/A L+ 6.50% 9.13% 07/19/19 N/A 80,000 80,000 80,000 23.32
80,000 80,000 23.32
Systems Software
Arcstor Midco, LLC (d/b/a Arcserve (USA), LLC First Lien Secured Term Loan 1.00% L+ 7.00% 10.67% 03/16/21 03/16/27 19,256 18,970 17,525 5.11
18,970 17,525 5.11
Technology Hardware, Storage & Peripherals
Telestream Holdings Corporation First Lien Secured Term Loan 1.00% SF+ 9.25% 12.11% 10/15/20 10/15/25 15,886 15,570 15,874 4.63
Telestream Holdings Corporation(7) First Lien Secured Revolving Loan 1.00% SF+ 9.25% 12.30% 10/15/20 10/15/25 927 909 935 0.27
Telestream Holdings Corporation(7) First Lien Secured Delayed Draw Loan 1.00% SF+ 9.25% 12.30% 05/12/22 10/15/25 — — — —
16,479 16,809 4.90
Total Debt Investments $ 727,213 $ 716,495 208.83 %
Equity Investments(22)
Advertising
Avision Holdings, LLC (d/b/a Avision Sales Group)(4) Class A LLC Interests N/A N/A N/A 12/15/21 N/A 201 $ 251 $ 219 0.06 %
251 219 0.06
Air Freight & Logistics
Motivational CIV, LLC (d/b/a Motivational Fulfillment)(4) Class B Units N/A N/A N/A 07/12/21 N/A 1,250 1,250 606 0.18
1,250 606 0.18
Building Products
PFB Holdco, Inc. (d/b/a PFB Corporation)(4)(13) Class A Units N/A N/A N/A 12/17/21 N/A 1 423 603 0.18
423 603 0.18
Data Processing & Outsourced Services
Escalon Services Inc.(4) Warrants N/A N/A N/A 12/04/20 N/A 709 476 2,368 0.69
476 2,368 0.69
Diversified Support Services
Quest Events, LLC(4) Preferred Units N/A N/A N/A 12/28/18 12/08/25 331 331 60 0.02
ImageOne Industries, LLC(4) Common A Units N/A N/A N/A 09/20/19 N/A 227 2 84 0.02
333 144 0.04
Education Services
Eddy Acquisitions, LLC (d/b/a EducationDynamics, LLC)(4) Preferred Units N/A 12.00% 12.00% 09/15/21 N/A 167 167 118 0.03
167 118 0.03
Environmental & Facilities Services
BPII-JL Group Holdings LP (d/b/a Juniper Landscaping Holdings LLC)(4) Class A Units N/A N/A N/A 12/29/21 N/A 83 825 661 0.19
825 661 0.19
Industrial Machinery
BL Products Parent, LP (d/b/a Bishop Lifting Products, Inc.)(4) Class A Units N/A N/A N/A 02/01/22 N/A 667 $ 667 $ 668 0.19 %
667 668 0.19
Interactive Media & Services
What If Media Group, LLC(4) Common Units N/A N/A N/A 07/02/21 N/A 851 851 2,327 0.68
851 2,327 0.68
Internet & Direct Marketing Retail
BBQ Buyer, LLC (d/b/a BBQ Guys)(4) Shares N/A N/A N/A 08/28/20 N/A 1,100 1,100 1,954 0.57
Ross-Simons Topco, LP (d/b/a Ross-Simons, Inc.)(4) Preferred Units N/A 8.00% 8.00% PIK 12/04/20 N/A 600 514 816 0.24
1,614 2,770 0.81
Investment Banking & Brokerage
Arcole Holding Corporation(4)(5)(6)(18) Shares N/A N/A N/A 10/01/20 N/A — 6,944 6,295 1.84
6,944 6,295 1.84
IT Consulting & Other Services
CX Holdco LLC (d/b/a Cennox Inc.)(4) Common Units N/A N/A N/A 05/04/21 N/A 972 972 1,457 0.42
Keras Holdings, LLC (d/b/a KSM Consulting, LLC)(4) Shares N/A N/A N/A 12/31/20 N/A 496 496 361 0.11
1,468 1,818 0.53
Leisure Facilities
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(4) Class A Common Stock N/A N/A N/A 06/29/20 N/A 2 1,941 157 0.05
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(4) Warrants N/A N/A N/A 06/29/20 06/28/28 1 793 64 0.02
2,734 221 0.07
Leisure Products
Playmonster Group Equity, Inc. (d/b/a Playmonster Group LLC)(4)(6)(8)(21) Preferred Stock N/A 14.00% 14.00% PIK 01/24/22 N/A 36 3,600 2,099 0.62
Playmonster Group Equity, Inc. (d/b/a Playmonster Group LLC)(4)(6)(21) Common Stock N/A N/A N/A 01/24/22 N/A 72 460 — —
4,060 2,099 0.62
Other Diversified Financial Services
SFS Global Holding Company (d/b/a Sigue Corporation)(4) Warrants N/A N/A N/A 06/28/18 12/28/25 — — — —
Sigue Corporation(4) Warrants N/A N/A N/A 06/28/18 12/28/25 22 2,890 3,823 1.11
2,890 3,823 1.11
Paper Packaging
Max Solutions Inc.(4) Common Stock N/A N/A N/A 09/29/22 N/A 4 400 400 0.12
400 400 0.12
Specialized Consumer Services
Camp Facility Services Parent, LLC (d/b/a Camp Construction Services, Inc.)(4) Preferred Units N/A 10.00% 10.00% PIK 11/16/21 N/A 15 840 853 0.26
840 853 0.26
Specialized Finance
WHF STRS Ohio Senior Loan Fund(4)(5)(14) LLC Interests N/A N/A N/A 07/19/19 N/A 20,000 20,000 22,066 6.43
20,000 22,066 6.43
Total Equity Investments $ 46,193 $ 48,059 14.03 %
Total Investments $ 773,406 $ 764,554 222.86 %
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
September30,2022
(in thousands)
Counterparty Currency to be sold Currencytobepurchased Settlementdate Unrealized Unrealized
appreciation depreciation
Morgan Stanley C$ 199 CAD $ 155 USD 10/28/22 $ 10 $ —
Total $ 10 $ —
(1) Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined by the Investment Company Act of 1940, as amended (the "1940 Act"), and provide collateral for the Company's credit facility.
(2) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate ("LIBOR" or "L"), which resets monthly, quarterly or semiannually, the Secured Overnight Financing Rate ("SOFR" or "SF"), the Canadian Dollar Offered Rate ("CDOR" or "C"), the Sterling Overnight Index Average ("SONIA" or "S"), or the U.S. Prime Rate ("Prime" or "P").
(3) The interest rate is the "all-in-rate" including the current index and spread, the fixed rate, and the payment-in-kind ("PIK") interest rate, as the case may be.
(4) The investment or a portion of the investment does not provide collateral for the Company's credit facility.
(5) Not 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 total assets. Qualifying assets represented 82.4% of total assets as of the date of the consolidated schedule of investments.
(6) Investment is a non-controlled/affiliate investment as defined by the 1940 Act.
(7) The investment has an unfunded commitment in addition to any amounts presented in the consolidated schedule of investments as of September 30, 2022.
(8) Preferred equity investment is a non-income producing security.
(9) Security is perpetual with no defined maturity date.
(10) Except as otherwise noted, all of the Company's portfolio company investments, which as of the date of the consolidated schedule of investments represented 222.9% of the Company's net assets or 96.0% of the Company's total assets, are subject to legal restrictions on sales.
(11) The fair value of each investment was determined using significant unobservable inputs.
(12) The investment was comprised of two contracts, which were indexed to different base rates, either L or SF and P, respectively. The Floor, Spread Above Index and Interest Rate presented represent the weighted average of both contracts.
(13) Principal amount is non-USD denominated and is based in Canadian dollars.
(14) Investment is a controlled affiliate investment as defined by the 1940 Act. On January 14, 2019, the Company entered into an agreement with State Teachers Retirement System of Ohio, a public pension fund established under Ohio law ("STRS Ohio"), to create WHF STRS Ohio Senior Loan Fund, LLC ("STRS JV"), a joint venture, which invests primarily in senior secured first and second lien term loans.
(15) In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 2.75% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.
(16) In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.50% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.
(17) In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.00% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.
(18) On October 1, 2020, as part of a restructuring agreement between the Company and Arcole Acquisition Corp, the Company's investments in first lien secured term loans to Arcole Acquisition Corp were converted into common shares of Arcole Holding Corp.
(19) At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 2.00% PIK.
(20) At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 9.00% PIK.
(21) On January 24, 2022, as part of a restructuring agreement between the Company and PlayMonster LLC, the Company's first lien secured term loan and delayed draw loan investments to PlayMonster LLC were converted into a new first lien secured term loan, preferred stock and common stock of Playmonster Group LLC.
(22) Ownership of certain equity investments may occur through a holding company or partnership.
(23) Investment is structured as a unitranche loan in which the Company may receive additional interest on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.
(24) Principal amount is non-USD denominated and is based in British pounds.
(25) Principal amount is non-USD denominated and is based in British pounds. At the option of the borrower, amounts borrowed under the delayed draw term loan commitment can be US dollars, Canadian dollars or British pounds.
Contacts
Stuart AronsonWhiteHorse Finance, Inc.212-506-0500saronson@higwhitehorse.com
or
Joyson ThomasWhiteHorse Finance, Inc.305-379-2322jthomas@higwhitehorse.com
or
Robert BrinbergRose & Company212-257-5932whitehorse@roseandco.com
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SOURCE WhiteHorse Finance, Inc.
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COMTEX_418840764/1005/2022-11-14T07:30:11