Liquidity and Capital Resources

At September 30, 2013, we had approximately $13.7 million in cash and cash equivalents, $30.7 million in payables for investments purchased, $412.9 million in debt outstanding and, subject to leverage and borrowing base restrictions, $236.0 million available for use under our amended and restated senior secured revolving credit facility, which matures in March 2017. Relative to our $1.2 billion dollar portfolio at fair value, we continue to have sufficient debt capacity to deploy in attractive investment opportunities. At September 30, 2013, we were in compliance with regulatory coverage requirements with an asset coverage ratio of 267% and were in compliance with all financial covenants under our debt agreements. In the near term, we expect to meet our liquidity needs through use of the remaining availability under our credit facility, continued cash flows from operations, and through periodic add-on equity and debt offerings, as needed. The primary use of funds will be investments in portfolio companies, reductions in debt outstanding and other general corporate purposes.


On November 5, 2013, our Board of Directors declared a quarterly dividend of $0.26 per share, payable on January 3, 2014 to stockholders of record at the close of business on December 20, 2013.

We continue to remain focused on our dividend coverage, although challenging in today’s environment. Our net investment income, as adjusted, was $0.22 per share for the three months ended September 30, 2013, relative to dividends declared of $0.26 per share for the same period, resulting in NII dividend coverage of 83%. Net investment income, as adjusted, for the nine months ended September 30, 2013 was $51.4 million versus dividends declared of $57.8 million for dividend coverage of 89% for 2013 thus far. Net increase in net assets from operations for the three and nine months ended September 30, 2013 was $0.27 and $0.83 per share, respectively, resulting in dividend coverage of 103% and 107%, respectively. While net short term capital gains are a component of a RIC’s annual distribution requirement, we anticipate having sufficient short and long term capital loss carryforwards to eliminate potential future capital gains distributions, thus providing available cash from which to cover a shortfall in cash adjusted NII dividend coverage, if any.

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