BDC Credit Reporter View

The only BDC with exposure to the Company is TPG Specialty (TSLX), which began in 2011. Over the years, the type and size of investments by TSLX have varied. However, the Company was recapitalized in the IIQ of 2017  - according to a comment made on TSLX's Conference Call. The TSLX first lien Term Loan was replaced with a $59.6mn second lien loan, a Preferred investment of $12.5mn and low cost Class B common units. The Company has been treated an an Affiliate by TSLX, given equity ownership over 25%.   The value of the equity has increased in every quarter following the recapitalization as the Company's performance has improved. At June 30, 2018, the Preferred was valued at a small premium and the common at $5.0mn. Following the October 2018 sale of a majority interest to Symphony Technology Group, TSLX is likely to crystallize a portion of  the common stock gain - which may be higher than the June 2018 number. The press release indicates TSLX will "retain a meaningful ownership interest in AFS going forward and will continue to support AFS as a financing partner". That leaves unclear what will happen to the amounts, pricing and structure of all three types of financing in place. What is clear is that this has been a highly successful investment - to date - for TSLX. Just as well because this is one of the largest investments on the BDC's books, consistently listed in the top ten holdings.(Updated October 19, 2018).