Equibles

10-Q

Barings BDC, Inc. (BBDC)

10-Q 2022-05-05 For: 2022-03-31
View Original
Added on April 09, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________

Form 10-Q

__________________________________________________________

(Mark One)

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

For the quarterly period ended March 31, 2022

OR

¨ 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 814-00733

______________________________________________________________________

Barings BDC, Inc.

(Exact name of registrant as specified in its charter)

__________________________________________________________

Maryland 06-1798488
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 South Tryon Street, Suite 2500<br>Charlotte, North Carolina 28202
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (704) 805-7200

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

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

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share BBDC The New York Stock Exchange

________________________________________________________

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  ý    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 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, a 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 ý 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  ý

The number of shares outstanding of the registrant’s common stock on May 5, 2022 was 111,072,034.

BARINGS BDC, INC.

TABLE OF CONTENTS

QUARTERLY REPORT ON FORM 10-Q

Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet as ofMarch 31, 2022and Consolidated Balance Sheet as ofDecember 31, 2021 3
Unaudited Consolidated Statements of Operations for theThreeMonths EndedMarch 31, 2022and2021 4
Unaudited Consolidated Statements of Changes in Net Assets for theThree Months EndedMarch 31, 2022and2021 6
Unaudited Consolidated Statements of Cash Flows for theThreeMonths EndedMarch 31, 2022and2021 7
Unaudited Consolidated Schedule of Investments as of March 31, 2022 8
Consolidated Schedule of Investments as of December 31, 2021 32
Notes to Unaudited Consolidated Financial Statements 50
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 90
Item 3. Quantitative and Qualitative Disclosures About Market Risk 112
Item 4. Controls and Procedures 114
PART II – OTHER INFORMATION
Item 1. Legal Proceedings 115
Item 1A. Risk Factors 115
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 115
Item 3. Defaults Upon Senior Securities 116
Item 4. Mine Safety Disclosures 116
Item 5. Other Information 116
Item 6. Exhibits 116
Signatures 118

Item 1. Financial Statements.

Barings BDC, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

March 31,<br>2022 December 31, 2021
(Unaudited)
Assets:
Investments at fair value:
Non-Control / Non-Affiliate investments (cost of $1,950,064 and $1,494,031 as of March 31, 2022 and December 31, 2021, respectively) $ 1,917,558 $ 1,490,113
Affiliate investments (cost of $336,327 and $267,967 as of March 31, 2022 and December 31, 2021, respectively) 364,753 288,069
Control investments (cost of $105,210 and $25,826 as of March 31, 2022 and December 31, 2021, respectively) 121,114 22,412
Total investments at fair value 2,403,425 1,800,594
Cash 106,400 49,987
Foreign currencies (cost of $47,990 and $34,069 as of March 31, 2022 and December 31, 2021, respectively) 48,031 34,266
Interest and fees receivable 43,096 33,645
Prepaid expenses and other assets 2,662 4,297
Credit support agreements (cost of $58,000 and $13,600 as of March 31, 2022 and December 31, 2021, respectively) 59,400 15,400
Deferred financing fees 4,102 2,985
Receivable from unsettled transactions 182,294 219,732
Total assets $ 2,849,410 $ 2,160,906
Liabilities:
Accounts payable and accrued liabilities $ 10,444 $ 2,341
Interest payable 10,450 5,704
Administrative fees payable 973 750
Base management fees payable 5,872 5,422
Incentive management fees payable 4,754 4,067
Derivative liabilities 3,108 1,160
Payable from unsettled transactions 21,195 26,786
Borrowings under credit facilities 757,217 655,189
Notes payable (net of deferred financing fees) 717,841 717,556
Total liabilities 1,531,854 1,418,975
Commitments and contingencies (Note 7)
Net Assets:
Common stock, $0.001 par value per share (150,000,000 shares authorized, 111,095,334 and 65,316,085 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively) 111 65
Additional paid-in capital 1,597,257 1,027,687
Total distributable earnings (loss) (279,812) (285,821)
Total net assets 1,317,556 741,931
Total liabilities and net assets $ 2,849,410 $ 2,160,906
Net asset value per share $ 11.86 $ 11.36

See accompanying notes.

Barings BDC, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share data)

Three Months<br><br>Ended Three Months<br><br>Ended
March 31,<br>2022 March 31,<br>2021
Investment income:
Interest income:
Non-Control / Non-Affiliate investments $ 31,624 $ 25,096
Affiliate investments 172 —
Control investments 273 107
Short-term investments — 11
Total interest income 32,069 25,214
Dividend income:
Non-Control / Non-Affiliate investments 123 —
Affiliate investments 7,570 72
Total dividend income 7,693 72
Fee and other income:
Non-Control / Non-Affiliate investments 2,223 1,973
Affiliate investments 13 —
Control investments (1,039) 160
Total fee and other income 1,197 2,133
Payment-in-kind interest income:
Non-Control / Non-Affiliate investments 2,287 3,037
Affiliate investments 44 136
Control investments 467 —
Total payment-in-kind interest income 2,798 3,173
Interest income from cash — 1
Total investment income 43,757 30,593
Operating expenses:
Interest and other financing fees 11,661 7,285
Base management fee (Note 2) 5,872 3,929
Incentive management fees (Note 2) 4,754 2,722
General and administrative expenses (Note 2) 2,455 2,301
Total operating expenses 24,742 16,237
Net investment income before taxes 19,015 14,356
Income taxes, including excise tax expense 6 (18)
Net investment income after taxes 19,009 14,374
Barings BDC, Inc.<br><br>Unaudited Consolidated Statements of Operations — (Continued)<br><br>(in thousands, except share and per share data)
--- --- --- --- ---
Three Months<br><br>Ended Three Months<br><br>Ended
March 31,<br>2022 March 31,<br>2021
Realized gains (losses) and unrealized appreciation (depreciation) on investments, credit support agreements and foreign currency transactions:
Net realized gains (losses):
Non-Control / Non-Affiliate investments (250) 2,891
Affiliate investments 101 (77)
Net realized gains (losses) on investments (149) 2,814
Foreign currency transactions (1,293) (975)
Net realized gains (losses) (1,442) 1,839
Net unrealized appreciation (depreciation):
Non-Control / Non-Affiliate investments (28,587) 5,357
Affiliate investments 12,996 2,445
Control investments 14,644 (3,969)
Net unrealized appreciation (depreciation) on investments (947) 3,833
Credit support agreements (400) (1,600)
Foreign currency transactions 4,812 4,042
Net unrealized appreciation 3,465 6,275
Net realized gains (losses) and unrealized appreciation (depreciation) on investments, credit support agreements and foreign currency transactions 2,023 8,114
Net increase in net assets resulting from operations $ 21,032 $ 22,488
Net investment income per share—basic and diluted $ 0.23 $ 0.22
Net increase in net assets resulting from operations per share—basic and diluted $ 0.25 $ 0.34
Dividends/distributions per share:
Total dividends/distributions per share $ 0.23 $ 0.19
Weighted average shares outstanding—basic and diluted 82,656,326 65,316,085

See accompanying notes.

Barings BDC, Inc.

Unaudited Consolidated Statements of Changes in Net Assets

(in thousands, except share amounts)

Common Stock Additional<br>Paid-In<br>Capital Total Distributable Earnings (Loss) Total<br>Net<br>Assets
Three Months Ended March 31, 2021 Number<br>of Shares Par<br>Value
Balance, December 31, 2020 65,316,085 $ 65 $ 1,027,707 $ (309,968) $ 717,804
Net investment income — — — 14,374 14,374
Net realized gain on investments / foreign currency transactions — — — 1,839 1,839
Net unrealized appreciation of investments / CSA / foreign currency transactions — — — 6,275 6,275
Dividends / distributions — — — (12,410) (12,410)
Balance, March 31, 2021 65,316,085 $ 65 $ 1,027,707 $ (299,890) $ 727,882
Common Stock Additional<br>Paid-In<br>Capital Total Distributable Earnings (Loss) Total<br>Net<br>Assets
--- --- --- --- --- --- --- --- --- ---
Three Months Ended March 31, 2022 Number<br>of Shares Par<br>Value
Balance, December 31, 2021 65,316,085 $ 65 $ 1,027,687 $ (285,821) $ 741,931
Net investment income — — — 19,009 19,009
Net realized loss on investments / foreign currency transactions — — — (1,442) (1,442)
Net unrealized appreciation of investments / CSA / foreign currency transactions — — — 3,465 3,465
Dividends / distributions — — — (15,023) (15,023)
Deemed Contribution - CSA (See Note 2) — 44,400 — 44,400
Deemed contribution - from Adviser (See Note 9) — 27,904 — 27,904
Public offering of common stock 45,986,926 46 499,372 — 499,418
Purchases of shares in repurchase plan (207,677) — (2,106) — (2,106)
Balance, March 31, 2022 111,095,334 $ 111 $ 1,597,257 $ (279,812) $ 1,317,556

See accompanying notes.

Barings BDC, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended Three Months Ended
March 31, 2022 March 31, 2021
Cash flows from operating activities:
Net increase in net assets resulting from operations $ 21,032 $ 22,488
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of portfolio investments (335,519) (276,456)
Net cash acquired from mergers (cash consideration paid) (See Note 9) 101,896 —
Transaction costs from mergers (See Note 9) (2,866) —
Repayments received/sales of portfolio investments 210,493 188,160
Purchases of short-term investments — (198,550)
Sales of short-term investments — 190,542
Loan origination and other fees received 5,314 4,578
Net realized (gain) loss on investments 149 (2,814)
Net realized loss on foreign currency transactions 1,293 975
Net unrealized appreciation on investments 947 (3,832)
Net unrealized depreciation of CSA 400 1,600
Net unrealized appreciation on foreign currency transactions (4,812) (4,042)
Payment-in-kind interest (2,798) (3,174)
Amortization of deferred financing fees 732 344
Accretion of loan origination and other fees (1,523) (1,481)
Amortization / accretion of purchased loan premium / discount (339) (1,980)
Changes in operating assets and liabilities:
Interest and fees receivables (13,134) (2,935)
Prepaid expenses and other assets (1,881) 1,264
Accounts payable and accrued liabilities (2,962) (1,668)
Interest payable 4,746 1,869
Net cash used in operating activities (18,832) (85,112)
Cash flows from financing activities:
Borrowings under credit facilities 107,704 29,824
Repayments of credit facilities — (134,083)
Proceeds from notes — 150,000
Financing fees paid (1,565) (191)
Purchases of shares in repurchase plan (2,106) —
Cash dividends / distributions paid (15,023) (12,410)
Net cash provided by (used in) financing activities 89,010 33,140
Net increase (decrease) in cash and foreign currencies 70,178 (51,972)
Cash and foreign currencies, beginning of period 84,253 92,487
Cash and foreign currencies, end of period $ 154,431 $ 40,515
Supplemental Information:
Cash paid for interest $ 5,966 $ 4,903
Supplemental non-cash information
Acquisitions (See Note 9):
Fair value of Sierra net assets acquired, net of cash $ (435,811) $ —
Transaction Costs 7,520 —
Common stock issued in acquisition of Sierra net assets 499,418 —
Credit support agreement (See Note 2) (44,400) —
Deemed contribution -from Adviser 27,904 —
Deemed contributions - CSA 44,400 —

See accompanying notes.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Non–Control / Non–Affiliate Investments:
1WorldSync, Inc. (1.2%)*(7) (8) (10) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 07/19, Due 07/25) $ 16,474 $ 16,240 $ 16,445
16,240 16,445
Accelerant Holdings (0.4%)*(7) Banking, Finance, Insurance & Real Estate Class A Convertible Preferred Equity (5,000 shares, Acquired 01/22) 5,000 5,103
5,000 5,103
Accelerate Learning, Inc.<br><br>(0.6%)*(7) (8) (10) Education Services First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/18, Due 12/24) 7,568 7,492 7,442
7,492 7,442
Acclime Holdings HK Limited<br><br>(0.1%)*(3) (7) (8) (11) Business Services First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.0% Cash, Acquired 08/21, Due 07/27) 1,211 1,142 1,153
1,142 1,153
Accurus Aerospace Corporation (1.9%)*(7) (8) (11) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, 1.50% PIK, Acquired 10/18, Due 10/24) 24,874 24,699 24,563
24,699 24,563
Acogroup (1.7%)*(3) (7) (8) (16) Business Services First Lien Senior Secured Term Loan (IBOR + 6.25%, 6.3% Cash, Acquired 03/22, Due 10/26) 23,622 22,760 23,031
22,760 23,031
ADB Safegate (0.4%)*(3) (8) (10) Aerospace & Defense Second Lien Senior Secured Term Loan (LIBOR + 7.75%, 8.8% Cash, Acquired 08/21, Due 10/25) 5,500 5,113 5,118
5,113 5,118
Advantage Software Company (The), LLC (0.1%)*(7) Advertising, Printing & Publishing Class A1 Partnership Units (8,717.76 units, Acquired 12/21) 280 902
Class A2 Partnership Units (2,248.46 units, Acquired 12/21) 72 233
Class B1 Partnership Units (8,717.76 units, Acquired 12/21) 9 6
Class B2 Partnership Units (2,248.46 units, Acquired 12/21) 2 2
363 1,143
Aftermath Bidco Corporation (0.7%)* (7) (8) (10) Professional Services First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 04/19, Due 04/25) 9,425 9,307 9,227
9,307 9,227
Air Canada 2020-2 Class B Pass Through Trust (0.5%)* Airlines Structured Secured Note - Class B (9.0% Cash, Acquired 09/20, Due 10/25) 6,170 6,170 6,586
6,170 6,586
Air Comm Corporation, LLC (0.9%)* (7) (8) (10) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 06/21, Due 07/27) 11,539 11,299 11,319
11,299 11,319
AIT Worldwide Logistics Holdings, Inc. (0.5%)*(7) Transportation Services Second Lien Senior Secured Term Loan (LIBOR + 7.75%, 8.5% Cash, Acquired 04/21, Due 04/29)(8) (10) 6,460 6,328 6,320
Partnership Units (348.68 units, Acquired 04/21) 349 686
6,677 7,006
Alpine SG, LLC (2.0%)*(7) (8) (9) (31) High Tech Industries First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/22, Due 11/27) 26,957 26,418 26,418
26,418 26,418
Alpine US Bidco LLC (2.4%)*(7) (8) (9) Agricultural Products Second Lien Senior Secured Term Loan (LIBOR + 9.0%, 9.8% Cash, Acquired 05/21, Due 05/29) 18,157 17,654 17,612
17,654 17,612
AMMC CLO 22, Limited Series 2018-22A (0.3%)*(3) (31) Multi-Sector Holdings Subordinated Structured Notes (Residual Interest, current yield 12.61%, Acquired 02/22, Due 04/31) 7,222 4,690 4,267
4,690 4,267
AMMC CLO 23, Ltd. Series 2020-23A (0.1%)*(3) (31) Multi-Sector Holdings Subordinated Structured Notes (Residual Interest, current yield 12.35%, Acquired 02/22, Due 10/30) 2,000 1,948 1,781
1,948 1,781

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Amtech LLC (0.2%)*(7) (8) Technology First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 11/27)(9) $ 2,291 $ 2,210 $ 2,225
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 11/27)(10) (13) (12)
2,197 2,213
Anagram Holdings, LLC (1.2%)*(3) Chemicals, Plastics, & Rubber First Lien Senior Secured Note (10.0% Cash, 5.0% PIK, Acquired 08/20, Due 08/25) 14,755 13,866 15,714
14,755 13,866 15,714
AnalytiChem Holding Gmbh (0.2%)*(3) (7) (8) (16) Chemicals First Lien Senior Secured Term Loan (IBOR + 6.25%, 6.3% Cash, Acquired 11/21, Due 12/28) 2,740 2,589 2,551
2,589 2,551
Anju Software, Inc. (1.0%)*(7) (8) (9) Application Software First Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.3% Cash, Acquired 02/19, Due 02/25) 13,528 13,368 12,865
13,528 13,368 12,865
AP Aristotle Holdings, LLC (0.1)*(7) Oil Field Services Subordinated Term Loan (19.8% Cash, Acquired 12/21, Due 06/25) 1,588 1,594 1,592
1,588 1,594 1,592
Apex Bidco Limited (0.2%)*(3) (7) Business Equipment & Services First Lien Senior Secured Term Loan ( LIBOR + 6.25%, 6.8% Cash, Acquired 01/20, Due 01/27)(8) (13) 1,919 1,871 1,919
Subordinated Senior Unsecured Term Loan (8.0% PIK, Acquired 01/20, Due 07/27) 270 275
2,141 2,194
Apidos CLO XXIV, Series 2016-24A (0.5%)*(3) (31) Multi-Sector Holdings Subordinated Structured Notes (Residual Interest, current yield 19.24%, Acquired 02/22, Due 10/30) 18,358 7,557 6,946
7,557 6,946
Aptus 1829. GmbH (0.4%)*(3) (7) Chemicals, Plastics, & Rubber First Lien Senior Secured Term Loan (IBOR + 6.5%, 6.5% Cash, Acquired 09/21, Due 09/27)(8) (16) 5,301 5,455 5,190
Preferred Stock (13 shares, Acquired 09/21) 120 111
Common Stock (48 shares, Acquired 09/21) 12 11
5,587 5,312
Apus Bidco Limited (0.3%)*(3) (7) (8) (22) Banking, Finance, Insurance & Real Estate First Lien Senior Secured Term Loan (SONIA + 5.5%, 5.5% Cash, Acquired 02/21, Due 03/28) 3,793 3,877 3,725
3,877 3,725
AQA Acquisition Holding, Inc. (1.5%)*(7) (8) (10) High Tech Industries Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.0% Cash, Acquired 03/21, Due 03/29) 20,000 19,523 19,647
19,523 19,647
Aquavista Watersides 2 LTD (0.5%)*(3) (7) (8) (22) Transportation Services First Lien Senior Secured Term Loan (SONIA + 6.0%, 6.1% Cash, Acquired 12/21, Due 12/28) 5,873 5,709 5,661
Revolver (SONIA + 6.0%, 6.1% Cash, Acquired 12/21, Due 12/22) (3) (4)
Second Lien Senior Secured Term Loan (SONIA + 10.5% PIK, Acquired 12/21, Due 12/28) 1,447 1,436
7,153 7,093
Arch Global Precision LLC (0.7%)*(7) (8) (10) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.8% Cash, Acquired 04/19, Due 04/26) 9,248 9,244 9,155
9,244 9,155
Archimede (0.6%)*(3) (7) (8) (16) Consumer Services First Lien Senior Secured Term Loan (IBOR + 6.0%, 6.0% Cash, Acquired 10/20, Due 10/27) 8,234 8,767 8,094
8,767 8,094
Argus Bidco Limited (0.2%)*(3) (7) (8) High Tech Industries First Lien Senior Secured Term Loan (SONIA + 5.5%, 5.8% Cash, Acquired 12/20, Due 12/27)(21) 2,607 2,562 2,597
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 5.8% Cash, Acquired 05/21, Due 12/27)(10) 672 654 669
3,279 3,216 3,266
Armstrong Transport Group (Pele Buyer, LLC ) (0.3%)*(7) (8) (10) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24) 4,015 3,962 3,948
3,962 3,948
Arrow International, Inc. (1.1%)*(7) (8) (10) (31) Hotel, Gaming & Leisure First Lien Senior Secured Term Loan (LIBOR + 7.25%, 8.5% Cash, Acquired 02/22, Due 12/25) 15,000 15,000 15,000
15,000 15,000

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
ASPEQ Heating Group LLC (0.6%)*(7) (8) (9) Building Products, Air & Heating First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/19, Due 11/25) $ 8,435 $ 8,353 $ 8,435
8,435 8,353 8,435
Astra Bidco Limited (0.2%)*(3) (7) (8) (21) Healthcare First Lien Senior Secured Term Loan (SONIA + 5.75%, 5.8% Cash, Acquired 11/21, Due 11/28) 2,148 2,089 2,068
2,148 2,089 2,068
Auxi International (0.2%)*(3) (7) (8) Commercial Finance First Lien Senior Secured Term Loan (IBOR + 5.75%, 5.8% Cash, Acquired 12/19, Due 12/26)(17) 1,558 1,522 1,418
First Lien Senior Secured Term Loan (SONIA + 6.25%, 6.3% Cash, Acquired 04/21, Due 12/26)(22) 898 803
2,420 2,221
Avance Clinical Bidco Pty Ltd (0.2%)*(3) (7) (8) (24) Healthcare First Lien Senior Secured Term Loan (BBSY + 5.5%, 6.0% Cash, Acquired 11/21, Due 11/27) 2,651 2,395 2,543
2,395 2,543
Aviation Technical Services, Inc.(1.9%)*(7) (8) (9) (31) Aerospace & Defense Second Lien Senior Secured Term Loan (LIBOR + 2.0%, 2.2% Cash, 6.5% PIK, Acquired 02/22, Due 03/25) 27,042 25,699 25,690
25,699 25,690
AVSC Holding Corp. (0.9%)* Advertising First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, 0.25% PIK, Acquired 08/18, Due 03/25)(8) (10) 4,857 4,430 4,570
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, 1.0% PIK, Acquired 08/18, Due 10/26)(8) (10) 695 711
First Lien Senior Secured Term Loan (5.0% Cash, 10.0% PIK, Acquired 11/20, Due 10/26) 5,542 6,518
10,667 11,799
Azalea Buyer, Inc. (0.4%)*(7) Technology First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/21, Due 11/27)(8) (10) 4,606 4,500 4,507
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 11/21, Due 11/27)(8) (10) (9) (9)
Subordinated Term Loan (12.0% PIK, Acquired 11/21, Due 05/28) 1,235 1,237
Common Stock (192,307.7 shares, Acquired 11/21) 192 192
5,918 5,927
Bariacum S.A. (0.5%)*(3) (7) (8) (16) Consumer Products First Lien Senior Secured Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 11/21, Due 11/28) 6,342 6,243 6,139
6,243 6,139
BDP International, Inc. (f/k/a BDP Buyer, LLC) (2.0%)*(7) (8) (9) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/18, Due 12/24) 14,812 14,621 14,812
14,621 14,812
Benify (Bennevis AB)<br><br>(0.1%)*(3) (7) (8) (26) High Tech Industries First Lien Senior Secured Term Loan (STIBOR + 5.25%, 5.3% Cash, Acquired 07/19, Due 07/26) 1,249 1,223 1,249
1,223 1,249
Beyond Risk Management, Inc.<br><br>(0.2%)*(7) (8) (10) Other Financial First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.3% Cash, Acquired 10/21, Due 10/27) 2,427 2,345 2,343
2,345 2,343
Bidwax (0.6%)*(3) (7) (8) (16) Non-durable Consumer Goods First Lien Senior Secured Term Loan (IBOR + 6.5%, 6.5% Cash, Acquired 02/21, Due 02/28) 7,789 8,069 7,603
8,069 7,603
BigHand UK Bidco Limited (0.3%)*(3) (7) (8) (21) High Tech Industries First Lien Senior Secured Term Loan (SONIA + 5.5%, 5.5% Cash, Acquired 01/21, Due 01/28) 3,416 3,360 3,313
3,360 3,313
Bounteous, Inc. (0.1%)*(7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/21, Due 08/27) 1,905 1,817 1,823
1,817 1,823
Brightline Trains Florida LLC (0.4%)*(7) Transportation Senior Secured Note (8.0% Cash, Acquired 08/21, Due 01/28) 5,000 5,000 4,825
5,000 4,825
Brightpay Limited (0.2%)*(3) (7) (8) (16) Technology First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 10/21, Due 10/28) 2,058 2,078 2,012
2,078 2,012

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
BrightSign LLC (0.6%)*(7) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 10/21, Due 10/27)(8) (10) $ 6,779 $ 6,707 $ 6,664
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 10/21, Due 10/27)(8) (10) (12) (23)
LLC units (1,107,492.71 units, Acquired 10/21) 1,107 1,107
7,802 7,748
British Airways 2020-1 Class B Pass Through Trust (0.1%)* Airlines Structured Secured Note - Class B (8.4% Cash, Acquired 11/20, Due 11/28) 783 783 862
783 862
British Engineering Services Holdco Limited (1.1%)*(3) (7) (8) (22) Commercial Services & Supplies First Lien Senior Secured Term Loan (SONIA + 7.03%, 7.0% Cash, Acquired 12/20, Due 12/27) 15,097 15,094 14,689
15,094 14,689
Brook & Whittle Holding Corp.(0.1%)* (7) (8) (10) (31) Containers, Packaging & Supplies First Lien Senior Secured Term Loan (LIBOR + 4.0%, 4.5% Cash, Acquired 02/22, Due 12/28) 1,994 1,974 1,944
1,974 1,944
Brown Machine Group Holdings, LLC (0.5%)*(7) (8) (10) Industrial Equipment First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 10/24) 6,281 6,240 6,281
6,240 6,281
Cadent, LLC (f/k/a Cross MediaWorks) (0.5%)*(7) (8) (9) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 09/18, Due 09/23) 6,913 6,892 6,913
6,892 6,913
CAi Software, LLC (0.7%)*(7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/21, Due 12/28) 9,057 8,882 8,894
Revolver (LIBOR + 6.25%, 7.3% Cash, Acquired 12/21, Due 12/28) (18) (17)
8,864 8,877
Canadian Orthodontic Partners Corp.(0.1%)*(3) (7) (8) (25) Healthcare First Lien Senior Secured Term Loan (CDOR + 6.5%, 7.5% Cash, Acquired 06/21, Due 03/26) 1,703 1,741 1,666
1,741 1,666
Cardenas Markets, LLC (0.1%)*(7) (8) (10) (31) Retail First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 02/22, Due 06/27) 1,990 1,985 1,950
1,985 1,950
Carlson Travel, Inc (0.7%)* Business Travel Management First Lien Senior Secured Note (8.5% Cash, Acquired 11/21, Due 11/26) 6,050 5,670 5,959
Common Stock (94,155 shares, Acquired 11/21) 1,655 2,787
7,325 8,746
Centralis Finco S.a.r.l. (0.1%)*(3) (7) (8) (16) Diversified Financial Services First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 05/20, Due 05/27) 789 740 789
740 789
Ceres Pharma NV (0.1%)*(3) (7) (8) (17) Pharmaceuticals First Lien Senior Secured Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 10/21, Due 10/28) 1,342 1,285 1,254
1,285 1,254
CGI Parent, LLC (1.4%)*(7) Business Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/22, Due 02/28)(8) (10) 17,796 17,446 17,440
Revolver (LIBOR + 5.5%, 6.5% Cash, Acquired 02/22, Due 02/28)(8) (10) 408 408
Preferred Stock (551 shares, Acquired 02/22) 551 551
18,405 18,399
Cineworld Group PLC (0.2%)*(3) Leisure Products Super Senior Secured Term Loan (7.0% Cash, 8.3% PIK, Acquired 11/20, Due 05/24) 1,824 1,640 2,152
Super Senior Secured Term Loan (LIBOR + 8.25% Cash, 9.3% Cash, Acquired 07/21, Due 02/25)(8) (11) 964 1,056
Warrants (553,375 units, Acquired 12/20) 102 84
2,706 3,292
Classic Collision (Summit Buyer, LLC) (0.5%)*(7) (8) (10) Auto Collision Repair Centers First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/26) 6,640 6,528 6,526
6,528 6,526
CM Acquisitions Holdings Inc. (1.4%)*(7) (8) (19) Internet & Direct Marketing First Lien Senior Secured Term Loan (SOFR + 4.75%, 5.8% Cash, Acquired 05/19, Due 05/25) 19,106 18,911 18,819
18,911 18,819

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
CMT Opco Holding, LLC (Concept Machine) (0.3%)*(7) (8) Distributors $ 4,144 $ 4,094 $ 3,894
LLC Units (8,782 units, Acquired 01/20) 352 72
4,446 3,966
Coastal Marina Holdings, LLC (1.4%)*(7) Other Financial 4,901 4,472 4,447
Subordinated Term Loan (8.0% Cash, Acquired 11/21, Due 11/31) 11,873 11,830
LLC Units (547,591 units, Acquired 11/21) 1,643 2,177
17,988 18,454
Cobham Slip Rings SAS (0.1%)*(3) (7) (8) (10) Diversified Manufacturing 1,303 1,273 1,276
1,273 1,276
Command Alkon (Project Potter Buyer, LLC) (1.0%)*(7) Software 13,708 13,265 13,602
Class A Units (90.384 units, Acquired 04/20) 90 101
Class B Units (33,324.69 units, Acquired 04/20) — 199
13,355 13,902
Contabo Finco S.À R.L (0.4%)*(3) (7) (8) (16) Internet Software & Services 5,821 5,768 5,733
5,768 5,733
Core Scientific, Inc. (1.5%)*(3) (7) Technology 20,000 20,200 20,000
20,200 20,000
Coyo Uprising GmbH (0.4%)*(3) (7) Technology 4,043 4,137 3,932
Class A Units (440.0 units, Acquired 09/21) 205 199
Class B Units (191.0 units, Acquired 09/21) 446 523
4,788 4,654
CPI International, Inc. (0.6%)*(7) (8) (10) (31) Aerospace & Defense 8,575 7,975 7,975
7,975 7,975
Crash Champions (0.9%)*(7) (8) (10) Automotive 11,609 11,262 11,129
11,262 11,129
CSL DualCom (0.1%)*(3) (7) (8) (14) Tele-communications 1,304 1,205 1,270
1,205 1,270
CT Technologies Intermediate Holdings, Inc. (0.4%)*(8) (9) (31) Healthcare 4,975 4,968 4,924
4,968 4,924
Custom Alloy Corporation (2.2%)*(7) (29) Manufacturer of Pipe Fittings & Forgings 52,244 42,162 26,122
Revolver (15.0% PIK, Acquired 12/20, Due 04/22)(28) 4,222 2,470
46,384 28,592
CVL 3 (0.3%)*(3) (7) (8) Capital Equipment 1,947 1,928 1,903
First Lien Senior Secured Term Loan (SOFR + 5.5%, 5.5% Cash, Acquired 12/21, Due 12/28)(19) 1,115 1,116
6-Month Bridge Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 06/22)(16) 787 771
3,830 3,790
CW Group Holdings, LLC (0.2%)*(7) High Tech Industries 2,810 2,758 2,659
LLC Units (161,290.32 units, Acquired 01/21) 161 99
2,919 2,758

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Dart Buyer, Inc. (1.0%)*(7) (8) (10) Aerospace & Defense $ 13,438 $ 13,280 $ 13,438
13,280 13,438
DataOnline Corp. (1.3%)*(7) (8) (10) (31) High Tech Industries 14,700 14,700 14,700
Revolver (LIBOR + 6.25%, 7.3% Cash, Acquired 02/22, Due 11/25) 2,143 2,143
16,843 16,843
DecksDirect, LLC (0.1%)*(7) Building Materials 727 713 714
Revolver (LIBOR + 6.0%, 7.0% Cash, Acquired 12/21, Due 12/26)(8) (10) 156 156
LLC Units (1,280.8 units, Acquired 12/21) 55 55
924 925
Discovery Education, Inc. (0.9%)*(7) (8) (10) Publishing 11,785 11,622 11,785
11,622 11,785
Distinct Holdings, Inc. (0.5%)*(7) (8) (9) Systems Software 6,880 6,845 6,687
6,845 6,687
Dragon Bidco (0.8%)*(3) (7) (8) (17) Technology 11,127 10,883 10,848
10,883 10,848
DreamStart Bidco SAS (d/b/a SmartTrade) (0.2%)*(3) (7) (8) (17) Diversified Financial Services 2,366 2,297 2,341
2,297 2,341
Dryden 43 Senior Loan Fund, Series 2016-43A (0.2%)*(3) (31) Multi-Sector Holdings 3,620 2,454 2,296
2,454 2,296
Dryden 49 Senior Loan Fund, Series 2017-49A (0.6%)*(3) (31) Multi-Sector Holdings 17,233 7,934 7,548
7,934 7,548
Dune Group (0.1%)*(3) (7) (8) Health Care Equipment 1,230 1,210 1,212
First Lien Senior Secured Term Loan (IBOR + 5.75%, 5.8% Cash, Acquired 09/21, Due 09/28)(16) 107 112
1,317 1,324
Dwyer Instruments, Inc. (0.3%)*(7) (8) (10) Electric 4,551 4,460 4,471
4,460 4,471
Echo Global Logistics, Inc. (1.1%)*(7) Air Transportation 14,469 14,224 14,246
Partnership Equity (530.92 units, Acquired 11/21) 531 531
14,755 14,777
Ellkay, LLC (0.4%)*(7) (8) (10) Healthcare & Pharmaceuticals 4,975 4,883 4,894
4,883 4,894
EMI Porta Holdco LLC (0.8%)*(7) (8) (10) Diversified Manufacturing 10,822 10,401 10,430
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27) 549 552
10,950 10,982
Entact Environmental Services, Inc. (0.4%)*(7) (8) (10) Environmental Industries 5,690 5,645 5,554
5,645 5,554
Envision Healthcare Corporation (0.0%)*(8) (9) (31) Healthcare & Pharmaceuticals 48 37 32
37 32

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
EPS NASS Parent, Inc. (0.4%)*(7) (8) (10) Electrical Components & Equipment First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 04/21, Due 04/28) $ 5,798 $ 5,685 $ 5,711
5,685 5,711
eShipping, LLC (0.3%)*(7) (8) Transportation Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 11/27)(9) 3,854 3,744 3,759
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 11/27)(10) 635 637
4,379 4,396
Events Software BidCo Pty Ltd (0.1%)*(3) (7) (8) (24) Technology First Lien Senior Secured Term Loan (BBSY + 5.5%, 5.5% Cash, Acquired 03/22, Due 03/28) 1,924 1,850 1,852
1,850 1,852
F24 (Stairway BidCo Gmbh) (0.1%)*(3) (7) (8) (16) Software Services First Lien Senior Secured Term Loan (IBOR + 6.25%, 6.3% Cash, Acquired 08/20, Due 08/27) 1,586 1,651 1,586
1,651 1,586
Ferrellgas L.P. (0.2%)*(3) (7) Oil & Gas Equipment & Services OpCo Preferred Units (2,886 units, Acquired 03/21) 2,799 3,030
2,799 3,030
Fineline Technologies, Inc. (0.1%)*(7) (8) (10) Consumer Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 02/21, Due 02/28) 1,302 1,281 1,302
1,281 1,302
Finexvet (0.1%)*(3) (7) (8) (16) Consumer Cyclical First Lien Senior Secured Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 03/22, Due 03/29) 1,536 1,458 1,467
1,458 1,467
FinThrive Software Intermediate Holdings Inc. (0.5%)* Business Equipment & Services Preferred Stock (6,582.7 shares, Acquired 03/22) 7,263 7,263
7,263 7,263
FitzMark Buyer, LLC (0.3%)*(7) (8) (10) Cargo & Transportation First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 12/20, Due 12/26) 4,259 4,189 4,173
4,189 4,173
Flexential Issuer, LLC (1.1%)* Information Technology Structured Secured Note - Class C (6.9% Cash, Acquired 11/21, Due 11/51) 16,000 14,822 15,040
14,822 15,040
FragilePak LLC (0.4%)*(7) Transportation Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 05/21, Due 05/27)(8) (10) 4,685 4,515 4,298
Partnership Units (937.5 units, Acquired 05/21) 938 808
5,453 5,106
Front Line Power Construction LLC (0.3%)* Construction Machinery First Lien Senior Secured Term Loan (LIBOR + 12.5%, 13.5% Cash, Acquired 11/21, Due 11/28)(7) (8) (10) 4,000 3,876 3,880
Common Stock (50,848 shares, Acquired 11/21) 130 94
4,006 3,974
FSS Buyer LLC (0.5%)*(7) Technology First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 08/21, Due 08/28)(8) (10) 6,895 6,762 6,784
LP Interest (1,160.9 units, Acquired 08/21) 12 12
LP Units (5,104.32 units, Acquired 08/21) 51 51
6,825 6,847
GC EOS Buyer Inc. (0.2%)*(8) (9) (31) Automotive First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.0% Cash, Acquired 02/22, Due 08/25) 2,481 2,479 2,448
2,479 2,448
GTM Intermediate Holdings, Inc. (1.0%)*(7) (29) Medical Equipment Manufacturer Second Lien Loan (11.0% Cash, 1.0% PIK, Acquired 12/20, Due 12/24) 11,540 11,489 11,309
Series A Preferred Units (923,347.4 units, Acquired 12/20) 2,166 1,391
Series C Preferred Units (460,652.6 units, Acquired 12/20) 1,081 995
14,736 13,695
Gulf Finance, LLC (0.1%)*(8) (9) Oil & Gas Exploration & Production First Lien Senior Secured Term Loan (LIBOR + 6.75%, 7.8% Cash, Acquired 11/21, Due 08/26) 829 798 756
798 756
Hawaiian Airlines 2020-1 Class B Pass Through Certificates (0.4%)* Airlines Structured Secured Note - Class B (11.3% Cash, Acquired 08/20, Due 09/25) 5,389 5,389 5,874
5,389 5,874

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Heartland Veterinary Partners, LLC (0.7%)*(7) Healthcare Subordinated Term Loan (11.0% PIK, Acquired 11/21, Due 11/28) $ 9,343 $ 9,103 $ 9,124
9,103 9,124
Heartland, LLC (1.1%)*(7) (8) (10) Business Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 08/19, Due 08/25) 14,040 13,948 13,818
13,948 13,818
Heavy Construction Systems Specialists, LLC (0.5%)*(7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 11/21, Due 11/27) 7,368 7,228 7,239
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 11/21, Due 11/27) (49) (46)
7,179 7,193
Heilbron (f/k/a Sucsez (Bolt Bidco B.V.)) (0.6%)*(3) (7) (8) (16) Insurance First Lien Senior Secured Term Loan (IBOR + 5.0%, 5.0% Cash, Acquired 09/19, Due 09/26) 8,599 9,380 8,444
9,380 8,444
Highpoint Global LLC (0.4%)*(7) (29) Government Services Second Lien Note (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 09/22) 5,461 5,440 5,461
5,440 5,461
Holland Acquisition Corp. (0.0%)*(7) (8) (9) (28) (31) Energy: Oil & Gas First Lien Senior Secured Term Loan (LIBOR + 9.0%, 10.0% Cash, Acquired 02/22, Due 05/22) 3,754 — —
— —
Home Care Assistance, LLC (0.3%)*(7) (8) (10) Healthcare & Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 03/21, Due 03/27) 3,821 3,756 3,756
3,756 3,756
HTI Technology & Industries (1.7%)* (7) (29) Electronic Component Manufacturing Second Lien Note (12.0% Cash, 4.0% PIK, Acquired 12/20, Due 09/24) 23,068 22,429 22,560
22,429 22,560
HW Holdco, LLC (Hanley Wood LLC) (0.8%)*(7) (8) (9) Advertising First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/18, Due 12/24) 11,068 10,877 10,852
10,877 10,852
IGL Holdings III Corp. (0.3%)*(7) (8) (10) Commercial Printing First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/26) 4,315 4,227 4,229
4,227 4,229
IM Analytics Holding, LLC (d/b/a NVT) (0.5%)*(7) (8) Electronic Instruments & Components First Lien Senior Secured Term Loan (LIBOR + 7.0%, 8.0% Cash, Acquired 11/19, Due 11/23)(10) 8,106 8,069 6,416
Warrant (68,950 units, Acquired 11/19) — —
8,069 6,416
IM Square (0.5%)*(3) (7) (8) (17) Banking, Finance, Insurance & Real Estate First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 05/21, Due 04/28) 6,898 7,272 6,774
7,272 6,774
Infoniqa Holdings GmbH (0.2%)*(3) (7) (8) (16) Technology First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 11/21, Due 11/28) 2,924 2,895 2,853
2,895 2,853
Innovad Group II BV (0.4%)*(3) (7) (8) (16) Beverage, Food & Tobacco First Lien Senior Secured Term Loan (IBOR + 5.75%, 5.8% Cash, Acquired 04/21, Due 04/28) 6,121 6,327 5,583
6,327 5,583
Innovative XCessories & Services, LLC (0.2%)*(8) (10) (31) Automotive First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 02/22, Due 03/27) 2,946 2,892 2,762
2,892 2,762
INOS 19-090 GmbH (0.4%)*(3) (7) (8) (16) Aerospace & Defense First Lien Senior Secured Term Loan (IBOR + 6.13%, 6.1% Cash, Acquired 12/20, Due 12/27) 5,157 5,501 5,157
5,501 5,157
Iqor US Inc. (0.2%)*(8) (9) (31) Services: Business First Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.5% Cash, Acquired 02/22, Due 11/24) 2,710 2,738 2,696
2,738 2,696
Isagenix International, LLC (0.1%)*(8) (10) (31) Wholesale First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 02/22, Due 06/25) 1,645 1,208 1,033
1,208 1,033

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
ISS#2, LLC (d/b/a Industrial Services Solutions) (0.5%)*(7) (8) (10) Commercial Services & Supplies $ 6,720 $ 6,628 $ 6,431
6,720 6,628 6,431
ITI Intermodal, Inc. (0.1%)*(7) Transportation Services 721 706 706
Revolver (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(8) (10) — (2) (2)
Common Stock (1,433.37 shares, Acquired 01/22) 144 143
721 848 847
Ivanti Software, Inc. (0.4%)*(8) (10) (31) High Tech Industries 6,000 5,989 5,910
6,000 5,989 5,910
Jade Bidco Limited (Jane's)<br><br>(2.3%)*(3) (7) (8) Aerospace & Defense 26,714 26,052 26,085
First Lien Senior Secured Term Loan (IBOR + 6.25%, 6.3% Cash, Acquired 11/19, Due 02/29)(17) 4,256 4,074 4,150
30,970 30,126 30,235
Jaguar Merger Sub Inc. (0.2%)*(7) (8) (10) Other Financial 2,722 2,671 2,671
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 09/24) — (6) (6)
2,722 2,665 2,665
Jedson Engineering, Inc. (0.2%)*(7) (29) Engineering & Construction Management 2,650 2,650 2,650
2,650 2,650 2,650
JetBlue 2019-1 Class B Pass Through Trust (0.3%)* Airlines 4,165 4,165 4,437
4,165 4,165 4,437
JF Acquisition, LLC (0.3%)*(7) (8) (10) Automotive 3,856 3,759 3,687
3,856 3,759 3,687
Jon Bidco Limited (0.6%)*(3) (7) (8) (27) Healthcare 8,319 8,065 8,047
8,319 8,065 8,047
Jones Fish Hatcheries & Distributors LLC (0.2%)*(7) Consumer Products 2,785 2,730 2,729
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 02/22, Due 02/28)(8) (11) — (8) (8)
LLC Units (974.68 units, Acquired 02/22) 97 97
2,785 2,819 2,818
K&N Parent, Inc. (0.7%)*(8) (10) (31) Automotive 7,923 7,243 7,115
Second Lien Senior Secured Term Loan (LIBOR + 8.75%, 9.8% Cash, Acquired 02/22, Due 10/24)(7) 2,000 1,700 1,660
9,923 8,943 8,775
Kano Laboratories LLC (0.4%)*(7) Chemicals, Plastics & Rubber 5,716 5,577 5,565
Partnership Equity (203.2 units, Acquired 11/20) 203 203
5,716 5,780 5,768
Kene Acquisition, Inc. (En Engineering) (0.5%)*(7) (8) (10) Oil & Gas Equipment & Services 7,206 7,111 7,076
7,206 7,111 7,076
Kid Distro Holdings, LLC (0.7%)*(7) Media & Entertainment 9,326 9,152 9,170
LLC Units (637,677.11 units, Acquired 10/21) 638 638
9,326 9,790 9,808
Kona Buyer, LLC (0.7%)*(7) (8) (10) High Tech Industries 9,058 8,875 8,968
9,058 8,875 8,968

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
LAF International (0.1%)*(3) (7) (8) (17) Healthcare & Pharmaceuticals $ 1,602 $ 1,696 $ 1,584
1,696 1,584
Lambir Bidco Limited (0.5%)*(3) (7) Healthcare 4,909 4,776 4,726
Revolver (IBOR + 6.0%, 6.0% Cash, Acquired 12/21, Due 12/24)(8) (15) 293 274
Second Lien Senior Secured Term Loan (12.0% PIK, Acquired 12/21, Due 06/29) 1,365 1,349
6,434 6,349
LeadsOnline, LLC (0.8%)*(7) Business Equipment & Services 10,354 10,176 10,172
Revolver (LIBOR + 5.0%, 6.0% Cash, Acquired 02/22, Due 02/28)(8) (10) (44) (46)
LLC Units (52,493.44 units, Acquired 02/22) 52 52
10,184 10,178
Learfield Communications, LLC (0.6%)* Broadcasting 135 95 128
First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.0% Cash, 10.2% PIK, Acquired 08/20, Due 12/23)(10) 8,117 8,156
8,212 8,284
Legal Solutions Holdings (0.0%)*(7) (28) (29) Business Services 12,319 10,129 —
10,129 —
Lifestyle Intermediate II, LLC (0.2%)*(7) (8) (10) (31) Consumer Goods: Durable 3,174 3,174 3,174
Revolver (LIBOR + 7.0%, 8.0% Cash, Acquired 02/22, Due 01/26) — —
3,174 3,174
LivTech Purchaser, Inc. (0.1%)*(7) (8) (10) Business Services 862 854 853
854 853
LogMeIn, Inc. (0.1%)*(8) (9) (31) High Tech Industries 1,975 1,957 1,936
1,957 1,936
Magnetite XIX, Limited (1.0%)*(3) (31) Multi-Sector Holdings 5,250 5,107 5,019
Subordinated Structured Notes (Residual Interest, current yield 12.38%, Acquired 02/22, Due 04/34) 9,425 8,342
14,532 13,361
Marmoutier Holding B.V. (0.1%)*(3) (7) (8) (16) Consumer Products 1,902 1,874 1,845
Revolver (IBOR + 5.0%, 5.0% Cash, Acquired 12/21, Due 06/27) (4) (4)
1,870 1,841
Marshall Excelsior Co. (0.8%)*(7) (8) (19) Capital Goods 10,467 10,287 10,284
Revolver (SOFR + 5.5%, 6.5% Cash, Acquired 02/22, Due 02/28) 578 577
10,865 10,861
MC Group Ventures Corporation (0.3%)*(7) Business Services 3,678 3,592 3,607
Partnership Units (746.66 Units, Acquired 06/21) 747 734
4,339 4,341
Media Recovery, Inc. (SpotSee) (0.5%)*(7) (8) Containers, Packaging & Glass 2,933 2,895 2,933
First Lien Senior Secured Term Loan (SONIA + 6.0%, 7.0% Cash, Acquired 12/20, Due 11/25)(21) 4,306 4,318
7,201 7,251
Median B.V. (0.7%)*(3) (8) (21) Healthcare 9,809 9,762 9,490
9,762 9,490

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Medical Solutions Parent Holdings, Inc. (0.3%)*(8) (10) Healthcare Second Lien Senior Secured Term Loan (LIBOR + 7.0%, 7.5% Cash, Acquired 11/21, Due 11/29) $ 4,421 $ 4,378 $ 4,244
4,421 4,378 4,244
MNS Buyer, Inc. (0.1%)*(7) Construction & Building First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 08/21, Due 08/27)(8) (9) 921 904 906
Partnership Units (76.92 Units, Acquired 08/21) 77 77
921 981 983
Modern Star Holdings Bidco Pty Limited. (0.6%)*(3) (7) (8) (23) Non-durable Consumer Goods First Lien Senior Secured Term Loan (BBSY + 6.25%, 6.8% Cash, Acquired 12/20, Due 12/26) 8,643 8,292 8,381
8,643 8,292 8,381
MSG National Properties (0.2%)*(3) (7) (8) (10) Hotel, Gaming, & Leisure First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.0% Cash, Acquired 11/20, Due 11/25) 2,437 2,381 2,425
2,437 2,381 2,425
Murphy Midco Limited (0.1%)*(3) (7) (8) (22) Media, Diversified & Production First Lien Senior Secured Term Loan (SONIA + 5.0%, 5.0% Cash, Acquired 11/20, Due 11/27) 1,077 1,039 1,049
1,077 1,039 1,049
Music Reports, Inc. (0.6%)*(7) (8) (10) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 08/20, Due 08/26) 7,462 7,319 7,301
7,462 7,319 7,301
Napa Bidco Pty Ltd (1.5%)*(3) (7) (8) (24) Healthcare First Lien Senior Secured Term Loan (BBSY + 6.0%, 6.1% Cash, Acquired 03/22, Due 03/28) 20,895 19,461 20,215
20,895 19,461 20,215
Narda Acquisitionco., Inc. (0.5%)*(7) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 12/27)(8) (10) 5,680 5,585 5,589
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 12/27)(8) (10) — (22) (21)
Class A Preferred Stock (4,587.38 shares, Acquired 12/21) 459 468
Class B Common Stock (509.71 shares, Acquired 12/21) 51 51
5,680 6,073 6,087
Navia Benefit Solutions, Inc. (0.2%)* (7) (8) (10) Healthcare & Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 02/21, Due 02/27) 2,721 2,665 2,678
2,721 2,665 2,678
Nexus Underwriting Management Limited (0.1%)*(3) (7) (8) (22) Other Financial First Lien Senior Secured Term Loan (SONIA + 5.25%, 5.3% Cash, Acquired 10/21, Due 10/28) 1,644 1,638 1,594
Revolver (SONIA + 5.25%, 5.3% Cash, Acquired 10/21, Due 04/22) 101 102 101
1,745 1,740 1,695
NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions) (0.4%)*(7) (8) (9) Energy Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 10/18, Due 10/25) 4,740 4,727 4,707
4,740 4,727 4,707
Northstar Recycling, LLC (0.2%)*(7) (8) (10) Environmental Industries First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 10/21, Due 09/27) 2,500 2,454 2,458
2,500 2,454 2,458
Novotech Aus Bidco Pty Ltd (0.5%)*(3) (7) (8) Healthcare First Lien Senior Secured Term Loan (BBSY + 5.75%, 6.3% Cash, Acquired 01/22, Due 01/28)(23) 3,864 3,659 3,777
First Lien Senior Secured Term Loan (SOFR + 5.75%, 6.3% Cash, Acquired 01/22, Due 01/28)(18) 3,474 3,380 3,377
7,338 7,039 7,154
OA Buyer, Inc. (0.6%)*(7) Healthcare First Lien Senior Secured Term Loan (LIBOR + 6.0%, 6.8% Cash, Acquired 12/21, Due 12/28)(8) (10) 8,501 8,336 8,346
Revolver (LIBOR + 6.0%, 6.8% Cash, Acquired 12/21, Due 12/28)(8) (10) — (26) (24)
Partnership Units (210,920.11 units, Acquired 12/21) 211 211
8,501 8,521 8,533
OAC Holdings I Corp (0.3%)*(7) (8) (19) Automotive First Lien Senior Secured Term Loan (SOFR + 5.0%, 6.0% Cash, Acquired 03/22, Due 04/28) 3,630 3,557 3,557
Revolver (SOFR + 5.0%, 6.0% Cash, Acquired 03/22, Due 04/28) 685 658 658
4,315 4,215 4,215

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Odeon Cinemas Group Limited (0.3%)*(3) (7) Hotel, Gaming, & Leisure $ 3,859 $ 4,067 $ 3,937
4,067 3,937
Offen Inc. (0.3%)*(7) (9) (31) Transportation: Cargo 3,747 3,709 3,691
3,709 3,691
OG III B.V. (0.2%)*(3) (7) (8) (16) Containers & Glass Products 2,853 2,999 2,789
2,999 2,789
Omni Intermediate Holdings, LLC (0.8%)*(7) (8) (9) Transportation 10,686 10,539 10,455
10,539 10,455
Options Technology Ltd.<br><br>(0.2%)*(3) (7) (8) (10) Computer Services 2,308 2,278 2,268
2,278 2,268
Oracle Vision Bidco Limited (0.2%)*(3) (7) (8) (22) Healthcare 3,014 3,144 3,001
3,144 3,001
Origin Bidco Limited (0.1%)*(3) (7) (8) Technology 597 582 585
First Lien Senior Secured Term Loan (IBOR + 5.75%, 5.8% Cash, Acquired 06/21, Due 06/28)(16) 394 362
976 947
OSP Hamilton Purchaser, LLC (0.2%)*(7) (8) (10) Technology 2,281 2,237 2,239
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 12/27) (4) (3)
2,233 2,236
Pacific Health Supplies Bidco Pty Limited (0.7%)*(3) (7) (8) (23) Healthcare & Pharmaceuticals 9,068 8,744 8,836
8,744 8,836
Pare SAS (SAS Maurice MARLE) (0.3%)*(3) (7) (8) (16) Health Care Equipment 4,537 4,481 4,516
4,481 4,516
Path Medical, LLC (0.3%)*(7) (31) Healthcare & Pharmaceuticals 8,465 4,571 4,571
First Lien Senior Secured Term Loan 13.0% PIK, Acquired 02/22, Due 10/22)(28) — —
Warrants (36,716 units, Acquired 02/22) — —
4,571 4,571
Patriot New Midco 1 Limited (Forensic Risk Alliance) (0.5%)*(3) (7) (8) Diversified Financial Services 3,764 3,690 3,478
First Lien Senior Secured Term Loan (IBOR + 6.75%, 6.8% Cash, Acquired 02/20, Due 02/27)(16) 3,021 2,907
6,711 6,385
PDQ.Com Corporation (0.6%)*(7) Business Equipment & Services 7,546 7,284 7,300
Class A-2 Partnership Units (26.32 units, Acquired 08/21) 29 37
7,313 7,337
Permaconn Bidco Ltd (0.4%)*(3) (7) (8) (24) Tele-communications 5,179 4,810 5,049
4,810 5,049
PetroChoice Holdings, Inc. (0.6%)*(7) (8) (10) (31) Chemicals, Plastics & Rubber 9,000 8,190 8,190
8,190 8,190

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Polara Enterprises, LLC (0.1%)*(7) Capital Equipment $ 1,243 $ 1,219 $ 1,198
Revolver (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(8) (10) (10) (20)
Partnership Units (3,820.44 units, Acquired 12/21) 382 382
1,591 1,560
Policy Services Company, LLC (3.2%)*(7) Property & Casualty Insurance 44,474 43,075 43,026
Warrants - Class A (25,582 units, Acquired 12/21) — —
Warrants - Class B (8,634 units, Acquired 12/21) — —
Warrants - Class C (888 units, Acquired 12/21) — —
Warrants - Class D (2,282 units, Acquired 12/21) — —
43,075 43,026
Polymer Solutions Group Holdings, LLC (0.1%)*(7) (8) (9) (31) Chemicals, Plastics & Rubber 1,031 1,031 1,031
1,031 1,031
Premium Franchise Brands, LLC (1.1%)*(7) (8) (10) Research & Consulting Services 14,778 14,534 14,511
14,534 14,511
Premium Invest (0.3%)*(3) (7) (8) (16) Brokerage, Asset Managers & Exchanges 4,006 4,118 4,006
4,118 4,006
Preqin MC Limited (0.2%)*(3) (7) (8) (20) Banking, Finance, Insurance & Real Estate 2,789 2,701 2,739
2,701 2,739
Process Equipment, Inc. (ProcessBarron) (0.4%)*(7) (8) (10) Industrial Air & Material Handling Equipment 6,174 6,121 5,927
6,121 5,927
Professional Datasolutions, Inc. (PDI) (0.1%)*(7) (8) (10) Application Software 1,836 1,835 1,812
1,835 1,812
ProfitOptics, LLC (0.2%)*(7) Technology 1,770 1,735 1,734
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 03/22, Due 02/28)(8) (10) (10) (10)
Second Lien Senior Subordinated Term Loan (8.0% Cash, Acquired 03/22, Due 02/29) 81 81
LLC Units (241,935.48 units, Acquired 03/22) 161 161
1,967 1,966
Proppants Holdings, LLC (0.0%)*(7) (31) Energy: Oil & Gas — —
— —
Protego Bidco B.V. (0.3%)*(3) (7) (8) (16) Aerospace & Defense 2,179 2,270 2,151
First Lien Senior Secured Term Loan (IBOR + 6.0%, 6.0% Cash, Acquired 03/21, Due 03/28) 1,563 1,469
3,833 3,620
QPE7 SPV1 BidCo Pty Ltd (0.2%)*(3) (7) (8) (24) Consumer Cyclical 2,071 1,956 2,046
1,956 2,046
Questel Unite (0.5%)*(3) (7) (8) (10) Business Services 6,892 6,805 6,892
6,805 6,892
RA Outdoors, LLC (1.4%)*(7) (8) (10) (31) High Tech Industries 17,855 17,498 17,498
Revolver (LIBOR + 6.75%, 7.8% Cash, Acquired 02/22, Due 04/26) 494 469
17,992 17,967

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Recovery Point Systems, Inc.<br><br>(0.9%)*(7) Technology First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.5% Cash, Acquired 08/20, Due 08/26)(8) (10) $ 11,619 $ 11,440 $ 11,526
Partnership Equity (187,235 units, Acquired 03/21) 187 126
11,627 11,652
Redwood Services Group, LLC (2.0%)*(7) (8) (9) (31) Services: Business First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 02/22, Due 06/23) 10,594 10,594 10,594
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 02/22, Due 06/23)(7) 16,434 16,434
27,028 27,028
Renovation Parent Holdings, LLC<br><br>(0.4%)*(7) Home Furnishings First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 11/21, Due 11/27)(8) (10) 4,854 4,740 4,748
Partnership Equity (197,368.42 units, Acquired 11/21) 197 197
4,937 4,945
REP SEKO MERGER SUB LLC<br><br>(0.6%)*(7) (8) (10) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/20, Due 12/26) 7,763 7,574 7,650
7,574 7,650
Resolute Investment Managers, Inc.(0.4%)*(7) (8) (10) (31) Banking, Finance, Insurance & Real Estate Second Lien Senior Secured Term Loan (LIBOR + 8.0%, 9.0% Cash, Acquired 02/22, Due 04/25) 5,081 5,107 5,030
5,107 5,030
Resonetics, LLC (0.3%)*(7) (8) (10) Health Care Equipment Second Lien Senior Secured Term Loan (LIBOR + 7.0%, 7.8% Cash, Acquired 04/21, Due 04/29) 4,011 3,936 3,941
3,936 3,941
Reward Gateway (UK) Ltd (0.2%)*(3) (7) (8) (21) Precious Metals & Minerals First Lien Senior Secured Term Loan (SONIA + 6.75%, 6.8% Cash, Acquired 08/21, Due 06/28) 3,164 3,222 3,082
3,222 3,082
Riedel Beheer B.V. (0.1%)*(3) (7) (8) (16) Food & Beverage First Lien Senior Secured Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 12/28) 1,858 1,836 1,808
1,836 1,808
RPX Corporation (0.6%)*(7) (8) (10) Research & Consulting Services First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 10/20, Due 10/25) 7,530 7,383 7,389
7,383 7,389
RTIC Subsidiary Holdings, LLC (1.2%)*(7) (31) Consumer Goods: Durable First Lien Senior Secured Term Loan (LIBOR + 7.75%, 9.0% Cash, Acquired 02/22, Due 09/25)(8) (10) 9,661 9,661 9,661
First Lien Senior Secured Term Loan (LIBOR + 7.75%, 9.0% Cash, Acquired 02/22, Due 09/25)(8) (10) 774 774
Revolver (LIBOR + 7.75%, 9.0% Cash, Acquired 02/22, Due 09/25)(8) (10) 3,968 3,968
Class A Preferred Stock (145.347 shares, Acquired 02/22) 4 4
Class B Preferred Stock (145.347 shares, Acquired 02/22) — —
Class C Preferred Stock (7,844.03 shares, Acquired 02/22) 450 450
Common Stock (153 shares, Acquired 02/22) — —
14,857 14,857
Ruffalo Noel Levitz, LLC<br><br>(0.7%)*(7) (8) (10) Media Services First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 01/19, Due 05/22) 9,519 9,511 9,519
9,511 9,519
Safety Products Holdings, LLC (0.9%)*(7) Non-durable Consumer Goods First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 12/20, Due 12/26)(8) (9) 12,026 11,808 12,002
Preferred Stock (372.1 shares, Acquired 12/20) 372 512
12,180 12,514
Scaled Agile, Inc. (0.1%)*(7) (8) (10) Research & Consulting Services First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/21, Due 12/28) 1,748 1,707 1,728
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 12/21, Due 12/28) (6) (3)
1,701 1,725

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Serta Simmons Bedding LLC<br><br>(0.8%)*(8) (9) Home Furnishings Super Priority First Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23) $ 7,331 $ 7,230 $ 7,327
Super Priority Second Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23) 3,374 3,385
10,604 10,712
SISU ACQUISITIONCO., INC. (0.5%)*(7) (8) (10) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/20, Due 12/26) 7,009 6,894 6,708
6,894 6,708
SMART Financial Operations, LLC (0.0%)*(7) (31) Banking, Finance, Insurance & Real Estate Preferred Stock (1,000,000 shares, Acquired 02/22) — —
— —
Smartling, Inc. (1.0%)*(7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 10/27) 13,846 13,547 13,572
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 10/27) (22) (20)
13,525 13,552
Smile Brands Group Inc.<br><br>(0.4%)*(7) (8) (10) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.3% Cash, Acquired 10/18, Due 10/24) 4,590 4,569 4,554
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.3% Cash, Acquired 12/20, Due 10/25) 226 232
4,795 4,786
SN BUYER, LLC (1.4%)*(7) (8) (9) Health Care Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/20, Due 12/26) 18,394 18,093 18,394
18,093 18,394
Sound Point CLO XX, Ltd. (0.2%)*(3) (31) Multi-Sector Holdings Subordinated Structured Notes (Residual Interest, current yield 18.99%, Acquired 02/22, Due 07/31) 4,489 2,332 2,284
2,332 2,284
Springbrook Software (SBRK Intermediate, Inc.) (1.6%)*(7) (8) (9) Enterprise Software & Services First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 12/19, Due 12/26) 21,142 20,799 20,730
20,799 20,730
SPT Acquico Limited (0.0%)*(3) (7) (8) (10) High Tech Industries First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 01/21, Due 12/27) 658 644 658
644 658
SSCP Pegasus Midco Limited (0.2%)*(3) (7) (8) (13) Healthcare & Pharmaceuticals First Lien Senior Secured Term Loan ( LIBOR + 6.75%, 7.7% Cash, Acquired 12/20, Due 11/27) 2,677 2,544 2,550
2,544 2,550
Starnmeer B.V. (0.2%)*(3) (7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 6.4%, 6.9% Cash, Acquired 10/21, Due 04/27) 2,500 2,465 2,468
2,465 2,468
Superjet Buyer, LLC (1.0%)*(7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27) 13,175 12,920 12,933
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27) (35) (33)
12,885 12,900
Syniverse Holdings, Inc. (1.3%)*(8) (10) Technology Distributors First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/18, Due 03/23) 17,256 16,595 16,700
16,595 16,700
Syntax Systems Ltd (0.2%)*(3) (7) (8) (9) Technology First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 10/28) 2,051 2,017 2,012
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 10/26) 554 553
2,571 2,565
TA SL Cayman Aggregator Corp.<br><br>(0.2%)*(7) Technology Subordinated Term Loan (7.8% PIK, Acquired 07/21, Due 07/28) 2,084 2,048 2,052
Common Stock (1,227.79 shares, Acquired 07/21) 50 75
2,098 2,127
Tank Holding Corp (1.4%)*(7) (8) (18) Metal & Glass Containers First Lien Senior Secured Term Loan (SOFR + 6.0%, 6.8% Cash, Acquired 03/22, Due 03/28) 19,127 18,698 18,698
Revolver (SOFR + 6.0%, 6.8% Cash, Acquired 03/22, Due 03/28) (20) (20)
18,678 18,678

All values are in British Pounds.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Team Car Care, LLC (1.0%)*(7) (8) (9) (31) Automotive $ 12,687 $ 12,687 $ 12,687
12,687 12,687
Team Services Group (1.1%)*(7) (8) (10) (31) Services: Consumer 9,903 9,903 9,779
Second Lien Senior Secured Term Loan (LIBOR + 9.0%, 10.0% Cash, Acquired 02/22, Due 12/28) 4,975 4,950
14,878 14,729
Techone B.V. (0.2%)*(3) (7) (8) (16) Technology 2,324 2,265 2,229
Revolver (IBOR + 5.5%, 5.5% Cash, Acquired 11/21, Due 05/28) 97 96
2,362 2,325
Tencarva Machinery Company, LLC (0.4%)*(7) (8) (10) Capital Equipment 5,486 5,378 5,384
Revolver (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27) (19) (18)
5,359 5,366
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC) (0.3%)*(7) Brokerage, Asset Managers & Exchanges 847 779 797
Revolver (LIBOR + 4.25%, 5.3% Cash, Acquired 10/21, Due 12/27)(8) (10) (14) (11)
Subordinated Term Loan (7.8% PIK, Acquired 10/21, Due 10/28) 3,270 3,276
4,035 4,062
The Hilb Group, LLC (1.5%)*(7) (8) (10) Insurance Brokerage 20,269 19,888 19,815
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 12/19, Due 12/26) 246 236
20,134 20,051
The Octave Music Group, Inc. (0.4%)*(7) (8) (9) (31) Media: Diversified & Production 5,601 5,601 5,489
5,601 5,489
Thermacell Repellents, Inc. (0.3%)*(7) (8) (10) (31) Consumer Goods: Durable 2,766 2,766 2,766
Revolver (LIBOR + 5.75%, 6.75% Cash, Acquired 02/22, Due 12/26) 1,595 1,595
4,361 4,361
Total Safety U.S. Inc. (0.5%)*(8) (11) Diversified Support Services 6,400 6,228 6,208
6,228 6,208
Transit Technologies LLC<br><br>(0.4%)*(7) (8) (10) Software 6,035 5,971 5,818
5,971 5,818
Transportation Insight, LLC (0.8%)*(7) (8) (9) Air Freight & Logistics 11,316 11,263 11,172
11,263 11,172
Trident Maritime Systems, Inc. (1.1%)*(7) (8) (10) Aerospace & Defense 14,888 14,677 14,888
14,677 14,888
Truck-Lite Co., LLC (1.1%)*(7) (8) (10) Automotive Parts & Equipment 14,964 14,620 14,652
14,620 14,652
True Religion Apparel, Inc. (0.0%)*(7) (31) Retail — —
Preferred Stock (2.82 shares, Acquired 02/22) — —
— —
Trystar, LLC (0.5%)*(7) Power Distribution Solutions 6,980 6,897 6,869
Class A LLC Units (440.97 units, Acquired 09/18) 481 402
7,378 7,271

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
TSM II Luxco 10 SARL (0.8%)*(3) (7) (8) (17) Chemicals & Plastics Second Lien Senior Secured Term Loan (IBOR + 8.75%, 8.8% Cash, Acquired 03/22, Due 03/27) $ 11,127 $ 10,658 $ 10,682
10,658 10,682
Turbo Buyer, Inc. (0.5%)*(7) (8) (10) Finance Companies First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/21, Due 12/25) 6,149 5,991 5,955
5,991 5,955
Turf Products, LLC (0.7%)*(7) (29) Landscaping & Irrigation Equipment Distributor Senior Subordinated Debt (10.0% Cash, Acquired 12/20, Due 10/23) 8,697 8,384 8,610
8,384 8,610
Turnberry Solutions, Inc. (0.4%)*(7) (8) (19) Consumer Cyclical First Lien Senior Secured Term Loan (SOFR + 6.0%, 7.0% Cash, Acquired 07/21, Due 09/26) 5,025 4,936 4,924
4,936 4,924
U.S. Gas & Electric, Inc. (0.1%)*(7) (29) Energy Services Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25) 2,285 1,785 1,785
Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)(30) — —
1,785 1,785
U.S. Silica Company (0.1%)*(3) (8) (9) Metal & Glass Containers First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.0% Cash, Acquired 08/18, Due 05/25) 1,472 1,474 1,444
1,474 1,444
UKFast Leaders Limited (0.9%)*(3) (7) (8) (21) Technology First Lien Senior Secured Term Loan (SONIA + 7.12%, 7.1% Cash, Acquired 09/20, Due 9/27) 11,968 11,410 11,706
11,410 11,706
USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.) (1.2%)*(7) (8) (10) Legal Services First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/18, Due 11/24) 16,180 15,961 15,781
15,961 15,781
Utac Ceram (0.4%)*(3) (7) (8) Business Services First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 09/20, Due 09/27)(16) 1,669 1,708 1,641
First Lien Senior Secured Term Loan (LIBOR + 5.25%, 5.5% Cash, Acquired 02/21, Due 09/27)(10) 3,458 3,459
5,166 5,100
Validity, Inc. (0.4%)*(7) (8) (9) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.0% Cash, Acquired 07/19, Due 05/25) 4,783 4,693 4,773
4,693 4,773
Velocity Pooling Vehicle, LLC (0.0%)*(7) (31) Automotive Common Stock (4,676 shares, Acquired 02/22) 60 60
Warrants (5,591 units, Acquired 02/22) 72 72
132 132
Victoria Bidco Limited (0.3%)*(3) (7) (8) (22) Industrial Machinery First Lien Senior Secured Term Loan (SONIA + 6.5%, 6.5% Cash, Acquired 03/22, Due 01/29) 3,646 3,618 3,523
3,618 3,523
Vision Solutions, Inc. (0.5%)*(8) (10) (31) Business equipment & services Second Lien Senior Secured Term Loan (LIBOR + 7.25%, 8.0% Cash, Acquired 02/22, Due 04/29) 6,500 6,497 6,373
6,497 6,373
VistaJet Pass Through Trust 2021-1B (0.4%)*(7) Airlines Structured Secured Note - Class B (6.3% Cash, Acquired 11/21, Due 02/29) 5,000 5,000 4,986
5,000 4,986
Vital Buyer, LLC (0.6%)*(7) Technology First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 06/21, Due 06/28)(8) (10) 7,802 7,661 7,802
Partnership Units (16,442.9 units, Acquired 06/21) 164 283
7,825 8,085
VOYA CLO 2015-2, LTD. (0.2%)*(3) (31) Multi-Sector Holdings Subordinated Structured Notes (Residual Interest, current yield 454.7%, Acquired 02/22, Due 07/27) 10,736 2,627 2,561
2,627 2,561
VOYA CLO 2016-2, LTD. (0.2%)*(3) (31) Multi-Sector Holdings Subordinated Structured Notes (Residual Interest, current yield 15.05%, Acquired 02/22, Due 07/28) 11,088 3,653 3,185
3,653 3,185

All values are in Euros.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
W2O Holdings, Inc. (0.2%)*(7) (10) Healthcare Technology First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.1% Cash, Acquired 10/20, Due 06/25) $ 2,147 $ 2,147 $ 2,147
First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.7% Cash, Acquired 10/20, Due 06/25)(8) — (59) —
2,147 2,088 2,147
Walker Edison Furniture Company LLC (0.3%)*(7) (31) Consumer Goods: Durable Common Stock (2,819.53 shares, Acquired 02/22) 3,598 3,598
3,598 3,598
Watermill-QMC Midco, Inc. (0.0%)*(7) (31) Automotive Equity (1.62% Partnership Interest, Acquired 02/22) — —
— —
Wawona Delaware Holdings, LLC (0.0%)*(7) (10) (31) Beverage & Food First Lien Senior Secured Term Loan (LIBOR + 4.75% 5.0% Cash, Acquired 02/22, Due 09/26) 45 41 40
45 41 40
West Dermatology, LLC (0.7%)*(7) (8) (10) (31) Healthcare & Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.5% Cash, Acquired 02/22, Due 02/25) 862 862 862
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 02/22, Due 02/25) 1,049 1,049 1,049
First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, 0.8% PIK, Acquired 02/22, Due 02/25) 6,376 6,376 6,376
Revolver (LIBOR + 6.0%, 7.0% Cash, 0.8% PIK, Acquired 02/22, Due 02/25) 1,105 1,105 1,105
9,392 9,392 9,392
Wok Holdings Inc. (0.0%)*(9) (31) Retail First Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.5% Cash, Acquired 02/22, Due 03/26) 49 48 48
49 48 48
Woodland Foods, LLC (0.8%)*(7) Food & Beverage First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27)(8) (10) 8,512 8,350 8,362
Revolver (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27)(8) (10) 509 466 469
Common Stock (1,663.31 shares, Acquired 12/21) 1,663 1,663
9,021 10,479 10,494
World 50, Inc. (0.9%)*(7) (8) (9) Professional Services First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 01/20, Due 01/26) 2,637 2,578 2,632
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 09/20, Due 01/26) 9,009 8,858 8,866
11,646 11,436 11,498
ZB Holdco LLC (0.2%)*(7) Food & Beverage First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 02/22, Due 02/28)(8) (10) 2,705 2,627 2,623
Revolver (LIBOR + 5.0%, 6.0% Cash, Acquired 02/22, Due 02/28)(8) (10) — (17) (17)
LLC Units (152.69 units, Acquired 02/22) 153 153
2,705 2,763 2,759
Zeppelin Bidco Limited (0.4%)*(3) (7) (8) (21) Services: Business First Lien Senior Secured Term Loan (SONIA + 6.25%, 6.3% Cash, Acquired 03/22, Due 03/29) 5,653 5,427 5,403
Revolver (SONIA + 6.25%, 6.3% Cash, Acquired 03/22, Due 03/23) — (3) (3)
5,653 5,424 5,400
Subtotal Non–Control / Non–Affiliate Investments (144.8%) 2,029,027 1,950,064 1,917,558
Affiliate Investments: (4)
1888 Industrial Services, LLC (0.1%)*(7) (31) Energy: Oil & Gas First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 02/22, Due 05/23)(8) (10) (28) 4,186 419 151
Revolver (LIBOR + 6.0%, 7.0% Cash, Acquired 02/22, Due 05/23)(8) (10) 1,307 1,184 1,145
Warrants (7,546.76 units, Acquired 02/22) — —
5,493 1,603 1,296

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Charming Charlie LLC (0.0%)*(7) (31) Retail First Lien Senior Secured Term Loan (LIBOR + 12.0%, 13.0% Cash, Acquired 02/22, Due 04/23)(8) (10) (28) $ 4,948 $ — $ —
First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 02/22, Due 04/23)(8) (10) (28) 3,413 — —
First Lien Senior Secured Term Loan (20.0% Cash, Acquired 02/22, Due 05/22)(28) 139 — —
Common Stock (34,923,249 shares, Acquired 02/22) — —
8,500 — —
Eclipse Business Capital, LLC (9.5%)*(7) Banking, Finance, Insurance, & Real Estate Second Lien Senior Secured Term Loan (7.5% Cash, Acquired 07/21, Due 07/28) 4,545 4,504 4,545
Revolver (LIBOR + 7.25%, Acquired 07/21, Due 07/28)(10) 2,727 2,605 2,727
LLC Units (89,447,396 units, Acquired 07/21) 89,850 118,366
7,272 96,959 125,638
Hylan Datacom & Electrical LLC (1.0%)*(7) (31) Construction & Building First Lien Senior Secured Term Loan (SOFR + 8.0%, 9.0% Cash, Acquired 02/22, Due 03/26)(8)(19) 3,917 3,615 3,917
Second Lien Senior Secured Term Loan (SOFR + 10.0%, 11.0% Cash, Acquired 02/22, Due 03/27)(8)(19) 3,850 3,850 3,850
Common Stock (102,144 shares, Acquired 02/22) 5,219 5,219
7,767 12,684 12,986
Jocassee Partners LLC (3.2%)*(3) Investment Funds & Vehicles 9.1% Member Interest, Acquired 06/19 35,158 42,106
35,158 42,106
Kemmerer Operations, LLC (0.2%)*(7) (31) Metals & Mining First Lien Senior Secured Term Loan (15.0% PIK, Acquired 02/22, Due 06/23) 2,543 2,543 2,543
Common Stock (6.78 shares, Acquired 02/22) 1,589 1,589
2,543 4,132 4,132
Sierra Senior Loan Strategy JV I LLC (6.5%)*(3) (31) Investment Funds & Vehicles 89.01% Member Interest, Acquired 02/22 85,963 82,910
85,963 82,910
Thompson Rivers LLC (5.9%)*(3) Investment Funds & Vehicles 16.0% Member Interest, Acquired 06/20 79,409 75,663
79,409 75,663
Waccamaw River LLC (1.5%)*(3) Investment Funds & Vehicles 20% Member Interest, Acquired 02/21 20,419 20,022
20,419 20,022
Subtotal Affiliate Investments (28.0%) 31,575 336,327 364,753
Control Investments:(5)
Black Angus Steakhouses, LLC (1.2%)*(7) (31) Hotel, Gaming & Leisure First Lien Senior Secured Term Loan (LIBOR + 9.0%, 10.0% Cash, Acquired 02/22, Due 06/22)(8) (12) 5,647 5,647 5,647
First Lien Senior Secured Term Loan (10.0% PIK, Acquired 02/22, Due 06/22)(8) (12) (28) 24,071 9,628 9,628
Common Stock (44.6 shares, Acquired 02/22) — —
29,718 15,275 15,275
JSC Tekers Holdings (0.4%)*(3) (7) (29) Real Estate Management Preferred Stock (9,159,085 shares, Acquired 12/20) 4,753 5,953
Common Stock (35,571 shares, Acquired 12/20) — —
4,753 5,953
MVC Automotive Group Gmbh (1.0%)*(3) (7) (29) Automotive Bridge Loan (6.0% Cash, Acquired 12/20, Due 06/26) 7,149 7,149 7,149
Common Equity Interest (18,000 shares, Acquired 12/20) 9,554 6,729
7,149 16,703 13,878
MVC Private Equity Fund LP (0.6%)*(3) (29) Investment Funds & Vehicles General Partnership Interest 225 191
Limited Partnership Interest 8,899 7,508
9,124 7,699

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Security Holdings B.V. (5.9%)*(3) (7) (29) Electrical Engineering Bridge Loan (5.0% PIK, Acquired 12/20, Due 05/22) $ 5,727 $ 5,727 $ 5,727
Senior Subordinated Loan (3.1% PIK, Acquired 12/20, Due 05/22) 9,598 9,598 9,598
Subordinated Senior Subordinated Note (5.0% PIK, Acquired 01/22, Due 05/22) 14,292 14,567 14,292
Senior Unsecured Term Loan (6.0% Cash, 9.0% PIK, Acquired 04/21, Due 04/25) 7,149 7,639 7,149
Common Stock Series A (17,100 shares, Acquired 02/22) 560 439
Common Stock Series B (900 shares, Acquired 12/20) 21,264 41,104
36,766 59,355 78,309
Subtotal Control Investments (9.1%) 73,633 105,210 121,114
Total Investments, March 31, 2022 (182.0%)* $ 2,134,235 $ 2,391,601 $ 2,403,425

Derivative Instruments

Credit Support Agreements
Description(d) Counter Party Settlement Date Notional Amount Value Unrealized Appreciation (Depreciation)
MVC Credit Support Agreement(a)(b)(c) Barings LLC 01/01/31 $ 23,000 $ 15,000 $ 1,400
Sierra Credit Support Agreement(e)(f)(g) Barings LLC 04/01/32 $ 100,000 $ 44,400 $ —
Total Credit Support Agreements, March 31, 2022 $ 1,400

(a) The MVC Credit Support Agreement covers all of the investments acquired by Barings BDC, Inc. (the “Company”) from MVC Capital, Inc. ("MVC") in connection with the MVC Acquisition (as defined in “Note 1 – Organization, Business and Basis of Presentation”) and any investments received by the Company in connection with the restructuring, amendment, extension or other modification (including the issuance of new securities) of any of the investments acquired by the Company from MVC in connection with the MVC Acquisition (collectively, the “MVC Reference Portfolio”). Each investment that is included in the MVC Reference Portfolio is denoted in the above Schedule of Investments with footnote (29).

(b)      The Company and Barings LLC (“Barings”) entered into the MVC Credit Support Agreement pursuant to which Barings agreed to provide credit support to the Company in the amount of up to $23.0 million.

(c) Settlement Date means the earlier of (1) January 1, 2031 or (2) the date on which the entire MVC Reference Portfolio has been realized or written off.

(d) See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the Credit Support Agreements.

(e)     The Sierra Credit Support Agreement covers all of the investments acquired by the Company from Sierra Income Corporation (“Sierra”) in connection with the Sierra Acquisition (as defined in “Note 1 – Organization, Business and Basis of Presentation”) and any investments received by the Company in connection with the restructuring, amendment, extension or other modification (including the issuance of new securities) of any of the investments acquired by the Company from Sierra in connection with the Sierra Acquisition (collectively, the “Sierra Reference Portfolio”). Each investment that is included in the Sierra Reference Portfolio is denoted in the above Schedule of Investments with footnote (31).

(f)      The Company and Barings entered into the Sierra Credit Support Agreement pursuant to which Barings agreed to provide credit support to the Company in the amount of up to $100.0 million.

(g) Settlement Date means the earlier of (1) April 1, 2032 or (2) the date on which the entire Sierra Reference Portfolio has been realized or written off.

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

Foreign Currency Forward Contracts:
Description Notional Amount to be Purchased Notional Amount to be Sold Counterparty Settlement Date Unrealized Appreciation (Depreciation)
Foreign currency forward contract (AUD) A$67,436 $50,505 Bank of America, N.A. 04/08/22 $ 138
Foreign currency forward contract (AUD) $22,755 A$31,386 Bank of America, N.A. 04/08/22 (815)
Foreign currency forward contract (AUD) $19,490 A$27,000 Citibank N.A. 04/08/22 (787)
Foreign currency forward contract (AUD) $6,494 A$9,050 HSBC Bank USA 04/08/22 (302)
Foreign currency forward contract (AUD) $51,174 A$68,223 Bank of America, N.A. 07/07/22 (146)
Foreign currency forward contract (CAD) C$3,203 $2,559 HSBC Bank USA 04/08/22 5
Foreign currency forward contract (CAD) $2,506 C$3,203 Bank of America, N.A. 04/08/22 (58)
Foreign currency forward contract (CAD) $2,549 C$3,190 HSBC Bank USA 07/07/22 (5)
Foreign currency forward contract (CAD) $49 C$61 BNP Paribas SA 07/07/22 —
Foreign currency forward contract (DKK) 2,116kr. $315 Bank of America, N.A. 04/08/22 1
Foreign currency forward contract (DKK) $323 2,116kr. Bank of America, N.A. 04/08/22 6
Foreign currency forward contract (DKK) $323 2,159kr. Bank of America, N.A. 07/07/22 (1)
Foreign currency forward contract (EUR) €2,000 $2,215 Bank of America, N.A. 04/01/22 10
Foreign currency forward contract (EUR) €86,555 $96,092 Bank of America, N.A. 04/08/22 225
Foreign currency forward contract (EUR) €5,020 $5,701 HSBC Bank USA 04/08/22 (116)
Foreign currency forward contract (EUR) $25,366 €23,000 HSBC Bank USA 04/08/22 (228)
Foreign currency forward contract (EUR) $8,514 €7,500 BNP Paribas SA 04/08/22 168
Foreign currency forward contract (EUR) $69,071 €61,075 Bank of America, N.A. 04/08/22 1,109
Foreign currency forward contract (EUR) $95,469 €85,835 Bank of America, N.A. 07/07/22 (400)
Foreign currency forward contract (NZD) NZ$11,600 $8,026 Bank of America, N.A. 04/08/22 42
Foreign currency forward contract (NZD) $7,995 NZ$11,600 HSBC Bank USA 04/08/22 (74)
Foreign currency forward contract (NZD) $8,151 NZ$11,801 Bank of America, N.A. 07/07/22 (44)
Foreign currency forward contract (GBP) $13,131 £10,000 HSBC Bank USA 04/01/22 (35)
Foreign currency forward contract (GBP) £8,819 $11,521 Bank of America, N.A. 04/08/22 90
Foreign currency forward contract (GBP) $5,642 £4,220 HSBC Bank USA 04/08/22 86
Foreign currency forward contract (GBP) $6,122 £4,599 Bank of America, N.A. 04/08/22 67
Foreign currency forward contract (GBP) $12,612 £9,656 Bank of America, N.A. 07/07/22 (97)
Foreign currency forward contract (GBP) £10,000 $13,128 HSBC Bank USA 07/07/22 35
Foreign currency forward contract (SEK) 1,875kr $201 HSBC Bank USA 04/08/22 —
Foreign currency forward contract (SEK) $207 1,875kr HSBC Bank USA 04/08/22 6
Foreign currency forward contract (SEK) $213 1,976kr HSBC Bank USA 07/07/22 —
Total Foreign Currency Forward Contracts, March 31, 2022 $ (1,120)

_______________________________________________________________

*    Fair value as a percentage of net assets.

(1)All debt investments are income producing, unless otherwise noted. Eclipse Business Capital, LLC, Ferrellgas L.P., Thompson Rivers LLC and Waccamaw River LLC equity investments are income producing. All other equity and any equity-linked investments are non-income producing. The Company's Board of Directors (the "Board") determined in good faith that all investments were valued at fair value in accordance with the Company's valuation policies and procedures and the Investment Company Act of 1940, as amended (the “1940 Act”), based on, among other things, the input of the Company's external investment adviser, Barings, the Company’s Audit Committee and independent valuation firms that have been engaged to assist in the valuation of the Company's middle-market investments. In addition, all debt investments are variable rate investments unless otherwise noted. Index-based floating interest rates are generally subject to a contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to LIBOR, EURIBOR, GBP LIBOR, BBSY, STIBOR, CDOR, SOFR, SONIA, BKBM or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically reset semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.

(2)All of the Company’s portfolio company investments (including joint venture investments), which as of March 31, 2022 represented 182.0% of the Company’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of the Company's initial investment in the relevant portfolio company.

(3)Investment is not a qualifying investment as defined under Section 55(a) of the 1940 Act. Non-qualifying assets represent 28.7% of total investments at fair value as of March 31, 2022. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

(4)As defined in the 1940 Act, the Company is deemed to be an “affiliated person” of the portfolio company as the Company owns between 5% or more, up to 25% (inclusive), of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled "Affiliate Investments" for the three months ended March 31, 2022 were as follows:

December 31, 2021 <br>Value Gross Additions<br>(b) Gross Reductions (c) Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) March 31, 2022 Value Amount of Interest or Dividends Credited to Income(d)
Portfolio Company Type of Investment(a)
1888 Industrial Services, LLC(e) First Lien Senior Secured Term Loan (LIBOR +5.0%, 6.0% Cash)(f) $ — $ 419 $ — $ — $ (268) $ 151 $ 8
Revolver (LIBOR + 6.0%, 7.0% Cash) — 1,184 — — (39) 1,145 —
Warrants (7,546.76 units) — — — — — — —
— 1,603 — — (307) 1,296 8
Charming Charlie LLC(e)(f) First Lien Senior Secured Term Loan (LIBOR + 12.0%, 13.0% Cash) — — — — — — —
First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash) — — — — — — —
First Lien Senior Secured Term Loan (20.0% Cash) — — — — — — —
Common Stock (34,923,249 shares) — — — — — — —
— — — — — — —
Eclipse Business Capital, LLC (e) Second Lien Senior Secured Term Loan (7.5% Cash) 4,738 1 — — (194) 4,545 83
Revolver (LIBOR + 7.25%) 1,818 914 — — (5) 2,727 39
LLC units (89,849,519 units) 92,668 — — — 25,698 118,366 4,078
99,224 915 — — 25,499 125,638 4,200
Hylan Datacom & Electrical LLC(e) First Lien Senior Secured Term Loan (SOFR + 8.0%, 9.0% Cash) — 3,514 — 101 302 3,917 33
Second Lien Senior Secured Term Loan (SOFR + 10.0%, 11.0% Cash) — 3,850 — — — 3,850 26
Common Stock (102,144 shares) — 5,219 — — — 5,219 —
— 12,583 — 101 302 12,986 59
Jocassee Partners LLC 9.1% Member Interest 37,601 5,000 — — (495) 42,106 —
37,601 5,000 — — (495) 42,106 —
JSC Tekers Holdings(e) Preferred Stock (9,159,085 shares) 6,197 — (6,197) — — — —
Common Stock (3,201 shares) — — — — — — —
6,197 — (6,197) — — — —
Kemmerer Operations, LLC(e) First Lien Senior Secured Term Loan (15.0% PIK) — 2,543 — — — 2,543 40
Common Stock (6.78 shares) — 1,589 — — — 1,589 —
— 4,132 — — — 4,132 40
Security Holdings B.V(e) Bridge Loan (5.0% PIK 5/31/2021) 5,451 — (5,451) — — — —
Senior Subordinated Loan (3.1% PIK) 9,525 — (9,525) — — — —
Senior Unsecured Term Loan (9.0% PIK) 7,307 — (7,307) — — — —
Common Equity Interest 24,825 — (24,825) — — — —
47,108 — (47,108) — — — —
Sierra Senior Loan Strategy JV I LLC 89.01% Member Interest — 85,963 — — (3,053) 82,910 —
— 85,963 — — (3,053) 82,910 —

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

December 31, 2021 <br>Value Gross Additions<br>(b) Gross Reductions (c) Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) March 31, 2022 Value Amount of Interest or Dividends Credited to Income(d)
Portfolio Company Type of Investment(a)
Thompson Rivers LLC 16.0% Member Interest 84,438 — (4) — (8,771) 75,663 3,192
84,438 — (4) — (8,771) 75,663 3,192
Waccamaw River LLC 20% Member Interest 13,501 6,700 — — (179) 20,022 300
13,501 6,700 — — (179) 20,022 300
Total Affiliate Investments $ 288,069 $ 116,896 $ (53,309) $ 101 $ 12,996 $ 364,753 $ 7,799

(a)     Eclipse Business Capital, LLC, Thompson Rivers LLC and Waccamaw River LLC equity investments are income producing. All other equity and any equity-linked investments are non-income producing.

(b)     Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments.

(c)    Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales.

(d) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Affiliate category.

(e) The fair value of the investment was determined using significant unobservable inputs.

(f) Non-accrual investment.

(5)    As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” and “control” the portfolio company because it owns more than 25% of the portfolio company’s outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management agreement). Transactions as of and during the three months ended March 31, 2022 in which the portfolio company is deemed to be a "Control Investment" of the Company were as follows:

December 31, 2021<br>Value Gross Additions<br>(b) Gross Reductions (c) Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) March 31, 2022<br><br>Value Amount of Interest or Dividends Credited to Income(d)
Portfolio Company Type of Investment(a)
Black Angus Steakhouses, LLC(e) First Lien Senior Secured Term Loan (10.0% PIK)(f) $ — $ 9,628 $ — $ — $ — $ 9,628 $ —
First Lien Senior Secured Term Loan (LIBOR + 9.0%, 10.0% Cash) — 5,647 — — — 5,647 55
Common Stock (44.6 shares) — — — — — — —
— 15,275 — — — 15,275 55
JSC Tekers Holdings(e) Preferred Stock (9,159,085 shares) — 6,197 — — (244) 5,953 —
Common Stock (3,201 shares) — — — — — — —
— 6,197 — — (244) 5,953 —
MVC Automotive Group GmbH(e) Common Equity Interest 7,699 — — — (970) 6,729 —
Bridge Loan (6.0% PIK 12/31/2021) 7,149 — — — — 7,149 107
14,848 — — — (970) 13,878 107
MVC Private Equity Fund LP Limited Partnership Interest 7,376 — — — 132 7,508 —
General Partnership Interest 188 — — — 3 191 (1,039)
7,564 — — — 135 7,699 (1,039)

Barings BDC, Inc.

Unaudited Consolidated Schedule of Investments — (Continued)

March 31, 2022

(Amounts in thousands, except share amounts)

December 31, 2021<br>Value Gross Additions<br>(b) Gross Reductions (c) Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) March 31, 2022<br><br>Value Amount of Interest or Dividends Credited to Income(d)
Portfolio Company Type of Investment(a)
Security Holdings B.V(e) Bridge Loan (5.0% PIK, Acquired 12/20, Due 05/22) $ — $ 5,727 $ — $ — $ — $ 5,727 $ 72
Senior Subordinated Loan (3.1% PIK, Acquired 12/20, Due 05/22) — 9,598 — — — 9,598 78
Subordinated Senior Subordinated Note (5.0% PIK, Acquired 12/20, Due 05/22) — 14,567 — — (275) 14,292 160
Senior Unsecured Term Loan (6.0% Cash, 9.0% PIK, Acquired 04/21, Due 04/25) — 7,307 — — (158) 7,149 268
Common Stock Series A (17,100 shares, Acquired 02/22) — 560 — — (121) 439 —
Common Stock Series B (900 shares, Acquired 12/20) — 24,827 — — 16,277 41,104 —
— 62,586 — — 15,723 78,309 578
Total Control Investments $ 22,412 $ 84,058 $ — $ — $ 14,644 $ 121,114 $ (299)

(a)     Equity and equity-linked investments are non-income producing, unless otherwise noted.

(b) Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments.

(c)     Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales.

(d)    Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Control category.

(e) The fair value of the investment was determined using significant unobservable inputs.

(f) Non-accrual investment

(6)Some or all of the investment is or will be encumbered as security for the Company's $965.0 million senior secured credit facility with ING Capital LLC initially entered into in February 2019 (as amended, restated and otherwise modified from time to time, the "February 2019 Credit Facility").

(7)The fair value of the investment was determined using significant unobservable inputs.

(8)Debt investment includes interest rate floor feature.

(9)The interest rate on these loans is subject to 1 Month LIBOR, which as of March 31, 2022 was 0.45200%.

(10)The interest rate on these loans is subject to 3 Month LIBOR, which as of March 31, 2022 was 0.96157%.

(11)The interest rate on these loans is subject to 6 Month LIBOR, which as of March 31, 2022 was 1.46986%.

(12)The interest rate on these loans is subject to 12 Month LIBOR, which as of March 31, 2022 was 2.10143%.

(13)The interest rate on these loans is subject to 3 Month GBP LIBOR, which as of March 31, 2022 was 1.03540%.

(14)The interest rate on these loans is subject to 6 Month GBP LIBOR, which as of March 31, 2022 was 1.47070%.

(15)The interest rate on these loans is subject to 1 Month EURIBOR, which as of March 31, 2022 was -0.53200%.

(16)The interest rate on these loans is subject to 3 Month EURIBOR, which as of March 31, 2022 was -0.45800%.

(17)The interest rate on these loans is subject to 6 Month EURIBOR, which as of March 31, 2022 was -0.36700%.

(18)The interest rate on these loans is subject to 1 Month SOFR, which as of March 31, 2022 was 0.30240%.

(19)The interest rate on these loans is subject to 3 Month SOFR, which as of March 31, 2022 was 0.67512%.

(20)The interest rate on these loans is subject to 6 Month SOFR, which as of March 31, 2022 was 1.07915%.

(21)The interest rate on these loans is subject to 3 Month SONIA, which as of March 31, 2022 was 0.91610%.

(22)The interest rate on these loans is subject to 6 Month SONIA, which as of March 31, 2022 was 1.19410%.

(23)The interest rate on these loans is subject to 1 Month BBSY, which as of March 31, 2022 was 0.01270%.

(24)The interest rate on these loans is subject to 3 Month BBSY, which as of March 31, 2022 was 0.23150%.

(25)The interest rate on these loans is subject to 3 Month CDOR, which as of March 31, 2022 was 1.26000%.

(26)The interest rate on these loans is subject to 3 Month STIBOR, which as of March 31, 2022 was 0.00057%.

(27)The interest rate on these loans is subject to 3 Month BKBM, which as of March 31, 2022 was 1.49000%.

(28)Non-accrual investment.

(29)Investment was purchased as part of the MVC Acquisition and is part of the MVC Reference Portfolio for purposes of the MVC Credit Support Agreement.

(30)In 2017, MVC received $5.7 million of 9.5% second lien callable notes due in 2025, in lieu of an escrow to satisfy any indemnification claims associated with MVC’s sale of its equity investment in U.S. Gas & Electric ("U.S. Gas"). Effective January 1, 2018, the cost basis of the U.S. Gas second lien loan was decreased by approximately $3.0 million due to a working capital adjustment. This loan is still subject to indemnification adjustments.

(31)Investment was purchased as part of the Sierra Acquisition and is part of the Sierra Reference Portfolio for purposes of the Sierra Credit Support Agreement.

See accompanying notes.

Barings BDC, Inc.

Consolidated Schedule of Investments

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Non–Control / Non–Affiliate Investments:
1WorldSync, Inc. (2.2%)*(7) (8) (10) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 07/19, Due 07/25) $ 16,434 $ 16,185 $ 16,434
16,185 16,434
Accelerate Learning, Inc.<br><br>(1.0%)*(7) (8) (10) Education Services First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 12/18, Due 12/24) 7,568 7,486 7,429
7,486 7,429
Acclime Holdings HK Limited<br><br>(0.2%)*(3) (7) (8) (10) Business Services First Lien Senior Secured Term Loan (LIBOR + 6.5%, 7.0% Cash, Acquired 08/21, Due 07/27) 1,211 1,138 1,147
1,138 1,147
Accurus Aerospace Corporation (3.2%)*(7) (8) (11) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, 1.50% PIK, Acquired 10/18, Due 10/24) 24,874 24,684 24,016
24,684 24,016
ADB Safegate (0.7%)*(3) (8) (10) Aerospace & Defense Second Lien Senior Secured Term Loan (LIBOR + 7.75%, 8.8% Cash, Acquired 08/21, Due 07/25) 5,500 5,091 5,106
5,091 5,106
Advantage Software Company (The), LLC (0.0%)*(7) Advertising, Printing & Publishing Class A1 Partnership Units (8,717.76 units, Acquired 12/21) 280 280
Class A2 Partnership Units (2,248.46 units, Acquired 12/21) 72 72
Class B1 Partnership Units (8,717.76 units, Acquired 12/21) 9 9
Class B2 Partnership Units (2,248.46 units, Acquired 12/21) 2 2
363 363
Aftermath Bidco Corporation (1.3%)* (7) (8) (10) Professional Services First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 04/19, Due 04/25) 9,425 9,299 9,303
9,299 9,303
Air Canada 2020-2 Class B Pass Through Trust (0.9%)* Airlines Structured Secured Note - Class B (9.0% Cash, Acquired 09/20, Due 10/25) 6,170 6,170 6,822
6,170 6,822
Air Comm Corporation, LLC (1.5%)* (7) (8) (10) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 06/21, Due 07/27) 11,540 11,265 11,280
11,265 11,280
AIT Worldwide Logistics Holdings, Inc. (1.0%)*(7) Transportation Services Second Lien Senior Secured Term Loan (LIBOR + 7.75%, 8.5% Cash, Acquired 04/21, Due 04/29)(8) (10) 6,460 6,325 6,460
Partnership Units (348.68 units, Acquired 04/21) 349 689
6,674 7,149
Alpine US Bidco LLC (2.4%)*(7) (8) (10) Agricultural Products Second Lien Senior Secured Term Loan (LIBOR + 9.0%, 9.8% Cash, Acquired 05/21, Due 05/29) 18,157 17,642 17,975
17,642 17,975
Amtech LLC (0.5%)*(7) (8) Technology First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 11/27)(9) 4,091 3,958 3,955
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 11/27)(10) (13) (14)
3,945 3,941
Anagram Holdings, LLC<br><br>(2.2%)*(3) Chemicals, Plastics, & Rubber First Lien Senior Secured Note (10.0% Cash, 5.0% PIK, Acquired 08/20, Due 08/25) 14,395 13,459 16,051
14,395 13,459 16,051
AnalytiChem Holding Gmbh (0.3%)* (3) (7) (8) (14) Chemicals First Lien Senior Secured Term Loan (IBOR + 6.25%, 6.3% Cash, Acquired 11/21, Due 11/28) 2,801 2,580 2,576
2,580 2,576
Anju Software, Inc. (1.8%)*(7) (8) (9) Application Software First Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.3% Cash, Acquired 02/19, Due 02/25) 13,528 13,355 13,284
13,528 13,355 13,284

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
AP Aristotle Holdings, LLC (0.2)*(7) Oil Field Services Subordinated Term Loan (19.8% Cash, Acquired 12/21, Due 06/25) $ 1,883 $ 1,890 $ 1,854
1,883 1,890 1,854
Apex Bidco Limited (0.3%)*(3) (7) Business Equipment & Services First Lien Senior Secured Term Loan ( LIBOR + 6.25%, 6.8% Cash, Acquired 01/20, Due 01/27)(8) (12) 1,974 1,869 1,970
Subordinated Senior Unsecured Term Loan (8.0% PIK, Acquired 01/20, Due 07/27) 264 278
2,133 2,248
Aptus 1829. GmbH (0.6%)*(3) (7) Chemicals, Plastics, & Rubber First Lien Senior Secured Term Loan (IBOR + 6.5%, 6.5% Cash, Acquired 09/21, Due 09/27)(8) (14) 4,656 4,717 4,552
Preferred Stock (13 shares, Acquired 09/21) 120 111
Common Stock (48 shares, Acquired 09/21) 12 11
4,849 4,674
Apus Bidco Limited (0.5%)*(3) (7) (8) (17) Banking, Finance, Insurance & Real Estate First Lien Senior Secured Term Loan (SONIA + 5.5%, 5.5% Cash, Acquired 02/21, Due 03/28) 3,902 3,874 3,823
3,874 3,823
AQA Acquisition Holding, Inc. (2.7%)*(7) (8) (10) High Tech Industries Second Lien Senior Secured Term Loan (LIBOR + 7.5%, 8.0% Cash, Acquired 03/21, Due 03/29) 20,000 19,510 20,000
19,510 20,000
Aquavista Watersides 2 LTD (1.0%)*(3) (7) (8) (17) Transportation Services First Lien Senior Secured Term Loan (SONIA + 6.0%, 6.1% Cash, Acquired 12/21, Due 12/28) 6,042 5,696 5,766
Second Lien Senior Secured Term Loan (SONIA + 10.5% PIK, Acquired 12/21, Due 12/28) 1,446 1,465
Revolver (SONIA + 6.0%, 6.1% Cash, Acquired 12/21, Due 12/22) (4) (5)
7,138 7,226
Arch Global Precision LLC (1.2%)*(7) (8) (10) Industrial Machinery First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.8% Cash, Acquired 04/19, Due 04/26) 9,248 9,244 9,248
9,244 9,248
Archimede (1.1%)*(3) (7) (8) (14) Consumer Services First Lien Senior Secured Term Loan (IBOR + 6.0%, 6.0% Cash, Acquired 10/20, Due 10/27) 8,415 8,761 8,255
8,761 8,255
Argus Bidco Limited (0.5%)*(3) (7) (8) High Tech Industries First Lien Senior Secured Term Loan (SONIA + 5.5%, 5.8% Cash, Acquired 12/20, Due 12/27)(16) 2,682 2,559 2,682
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 5.8% Cash, Acquired 05/21, Due 12/27)(10) 672 653 672
3,354 3,212 3,354
Armstrong Transport Group (Pele Buyer, LLC ) (0.5%)*(7) (8) (10) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 06/19, Due 06/24) 4,020 3,961 3,939
3,961 3,939
ASPEQ Heating Group LLC (1.1%)* (7) (8) (9) Building Products, Air & Heating First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/19, Due 11/25) 8,464 8,377 8,464
8,464 8,377 8,464
Astra Bidco Limited (0.7%)*(3) (7) (8) (16) Healthcare First Lien Senior Secured Term Loan (SONIA + 5.75%, 5.8% Cash, Acquired 11/21, Due 11/28) 5,786 5,479 5,535
5,479 5,535
Auxi International (0.3%)*(3) (7) (8) Commercial Finance First Lien Senior Secured Term Loan (IBOR + 6.25%, 6.3% Cash, Acquired 12/19, Due 12/26)(15) 1,592 1,521 1,439
First Lien Senior Secured Term Loan (SONIA + 6.25%, 6.3% Cash, Acquired 04/21, Due 12/26)(17) 897 820
2,418 2,259
Avance Clinical Bidco Pty Ltd (0.8%)*(3) (7) (8) (20) Healthcare First Lien Senior Secured Term Loan (BBSY + 5.5%, 6.0% Cash, Acquired 11/21, Due 11/27) 6,457 6,040 6,158
6,040 6,158

All values are in British Pounds.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
AVSC Holding Corp. (1.6%)* Advertising First Lien Senior Secured Term Loan (LIBOR + 3.25%, 4.3% Cash, 0.25% PIK, Acquired 08/18, Due 03/25)(8) (10) $ 4,867 $ 4,405 $ 4,458
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, 1.0% PIK, Acquired 08/18, Due 10/26)(8) (10) 693 693
First Lien Senior Secured Term Loan (5.0% Cash, 10.0% PIK, Acquired 11/20, Due 10/26) 5,399 6,404
10,497 11,555
Azalea Buyer, Inc. (0.8%)*(7) Technology First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 11/21, Due 11/27)(10) 4,606 4,496 4,494
Subordinated Term Loan (12.0% PIK, Acquired 11/21, Due 05/28) 1,235 1,234
Common Stock (192,307.7 shares, Acquired 11/21) 192 192
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 11/21, Due 11/27)(10) (9) (10)
5,914 5,910
Bariacum S.A. (0.8%)*(3) (7) (8) (14) Consumer Products First Lien Senior Secured Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 11/21, Due 11/28) 6,482 6,236 6,244
6,236 6,244
BDP International, Inc. (f/k/a BDP Buyer, LLC) (2.0%)*(7) (8) (9) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/18, Due 12/24) 14,849 14,643 14,626
14,643 14,626
Benify (Bennevis AB)<br><br>(0.2%)*(3) (7) (8) (18) High Tech Industries First Lien Senior Secured Term Loan (STIBOR + 5.25%, 5.3% Cash, Acquired 07/19, Due 07/26) 1,286 1,222 1,286
1,222 1,286
Beyond Risk Management, Inc.<br><br>(0.3%)*(7) (8) (10) Other Financial First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.3% Cash, Acquired 10/21, Due 09/27) 2,427 2,336 2,327
2,336 2,327
Bidwax (1.0%)*(3) (7) (8) (14) Non-durable Consumer Goods First Lien Senior Secured Term Loan (IBOR + 6.5%, 6.5% Cash, Acquired 02/21, Due 02/28) 7,960 8,062 7,741
8,062 7,741
BigHand UK Bidco Limited (0.1%)*(3) (7) (8) (13) High Tech Industries First Lien Senior Secured Term Loan ( LIBOR + 5.25%, 5.4% Cash, Acquired 01/21, Due 01/28) 909 880 878
880 878
Black Diamond Equipment Rentals LLC (1.5%)*(7) (25) Equipment Rental Second Lien Loan (12.5% Cash, Acquired 12/20, Due 06/22) 10,000 10,000 10,000
Warrant (4.17 units, Acquired 12/20) 1,010 864
11,010 10,864
Bounteous, Inc. (0.6%)*(7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 08/21, Due 08/27) 4,911 4,752 4,756
4,752 4,756
Brightline Trains Florida LLC (0.7%)*(7) Transportation Senior Secured Note (8.0% Cash, Acquired 08/21, Due 01/28) 5,000 5,000 5,005
5,000 5,005
Brightpay Limited (0.3%)*(3) (7) (8) (14) Technology First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 10/21, Due 10/28) 1,918 1,883 1,862
1,883 1,862
BrightSign LLC (1.9%)*(7) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 10/21, Due 10/27)(8) (10) 12,811 12,687 12,683
LLC units (1,107,492.71 units, Acquired 10/21) 1,107 1,135
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 10/21, Due 10/27)(8) (10) (13) (13)
13,781 13,805
British Airways 2020-1 Class B Pass Through Trust (0.1%)* Airlines Structured Secured Note - Class B (8.4% Cash, Acquired 11/20, Due 11/28) 810 810 916
810 916

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
British Engineering Services Holdco Limited (2.1%)*(3) (7) (8) (17) Commercial Services & Supplies First Lien Senior Secured Term Loan (SONIA + 6.75%, 7.0% Cash, Acquired 12/20, Due 12/27) $ 15,530 $ 15,081 $ 15,406
Revolver (SONIA + 6.75%, 7.0% Cash, Acquired 12/20, Due 06/22) (2) (5)
15,079 15,401
Brown Machine Group Holdings, LLC (0.9%)*(7) (8) (9) Industrial Equipment First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 10/18, Due 10/24) 6,634 6,587 6,634
6,587 6,634
Cadent, LLC (f/k/a Cross MediaWorks) (0.9%)*(7) (8) (9) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 09/18, Due 09/23) 6,913 6,888 6,913
6,888 6,913
CAi Software, LLC (1.2%)*(7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/21, Due 12/28) 9,057 8,877 8,876
Revolver (LIBOR + 6.25%, 7.3% Cash, Acquired 12/21, Due 12/28) (19) (19)
8,858 8,857
Canadian Orthodontic Partners Corp.(0.2%)*(3) (7) (8) (21) Healthcare First Lien Senior Secured Term Loan (CDOR + 6.5%, 7.5% Cash, Acquired 06/21, Due 03/26) 1,640 1,697 1,625
1,697 1,625
Carlson Travel, Inc (1.2%)* Business Travel Management First Lien Senior Secured Note (8.5% Cash, Acquired 11/21, Due 11/26) 6,050 5,654 6,161
Common Stock (94,155 shares, Acquired 11/21) 1,655 3,084
7,309 9,245
Centralis Finco S.a.r.l. (0.1%)*(3) (7) (8) (14) Diversified Financial Services First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 05/20, Due 05/27) 807 739 807
739 807
Ceres Pharma NV (0.6%)*(3) (7) (8) (15) Pharmaceuticals First Lien Senior Secured Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 10/21, Due 10/28) 4,556 4,444 4,355
4,444 4,355
Cineworld Group PLC<br><br>(0.5%)*(3) Leisure Products Super Senior Secured Term Loan (7.0% Cash, 8.3% PIK, Acquired 11/20, Due 05/24) 1,786 1,591 2,128
Super Senior Secured Term Loan (LIBOR + 8.25%, 9.3% Cash, Acquired 07/21, Due 05/24)(8) (11) 961 1,054
Warrants (553,375 units, Acquired 12/20) 102 244
2,654 3,426
Classic Collision (Summit Buyer, LLC) (1.7%)*(7) (8) (10) Auto Collision Repair Centers First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/26) 12,587 12,384 12,448
12,384 12,448
CM Acquisitions Holdings Inc. (2.6%)*(7) (8) (10) Internet & Direct Marketing First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 05/19, Due 05/25) 19,106 18,897 19,106
18,897 19,106
CMT Opco Holding, LLC (Concept Machine) (0.6%)*(7) Distributors First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 01/20, Due 01/25)(8) (10) 4,144 4,090 3,999
LLC Units (8,782 units, Acquired 01/20) 352 227
4,442 4,226
Coastal Marina Holdings, LLC (2.4%)*(7) Other Financial Subordinated Term Loan (10.0% PIK, Acquired 11/21, Due 11/31) 17,608 15,965 15,966
LLC Units (547,591 units, Acquired 11/21) 1,643 1,643
17,608 17,609
Cobham Slip Rings SAS (0.6%)*(3) (7) (8) (10) Diversified Manufacturing First Lien Senior Secured Term Loan (LIBOR + 6.25%, 6.4% Cash, Acquired 11/21, Due 11/28) 4,303 4,199 4,196
4,199 4,196

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Command Alkon (Project Potter Buyer, LLC) (1.9%)*(7) Software $ 13,779 $ 13,290 $ 13,658
Class A Units (90.384 units, Acquired 04/20) 90 101
Class B Units (33,324.69 units, Acquired 04/20) — 186
13,380 13,945
Contabo Finco S.À R.L (0.8%)*(3) (7) (8) (16) Internet Software & Services 5,949 5,819 5,830
5,819 5,830
Coyo Uprising GmbH (0.6%)*(3) (7) Technology 4,062 4,050 3,938
Class A Units (440.0 units, Acquired 09/21) 205 587
Class B Units (191.0 units, Acquired 09/21) 446 252
4,701 4,777
Crash Champions (1.9%)*(7) (8) (10) Automotive 14,567 14,040 13,968
14,040 13,968
CSL DualCom (0.2%)*(3) (7) (8) (13) Tele-communications 1,341 1,203 1,301
1,203 1,301
Custom Alloy Corporation (4.0%)*(7) (24) (25) Manufacturer of Pipe Fittings & Forgings 45,000 37,043 27,450
Revolver (15.0% PIK, Acquired 12/20, Due 04/22) 3,738 2,596
40,781 30,046
CVL 3 (1.3%)*(3) (7) (8) Capital Equipment 5,913 5,724 5,766
First Lien Senior Secured Term Loan (SOFR + 5.5%, 5.5% Cash, Acquired 12/21, Due 12/28)(22) 3,298 3,298
6-Month Bridge Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 06/22)(14) 772 788
9,794 9,852
CW Group Holdings, LLC (0.4%)*(7) High Tech Industries 2,817 2,762 2,774
LLC Units (161,290.32 units, Acquired 01/21) 161 112
2,923 2,886
Dart Buyer, Inc. (1.6%)*(3) (7) (8) (10) Aerospace & Defense 12,217 12,047 11,734
12,047 11,734
DecksDirect, LLC (0.1%)*(7) Building Materials 727 713 713
Revolver (LIBOR + 6.0%, 7.0% Cash, Acquired 12/21, Due 12/26)(8) (10) (4) (4)
LLC Units (1,280.8 units, Acquired 12/21) 55 55
764 764
Discovery Education, Inc. (1.6%)*(7) (8) (10) Publishing 11,815 11,626 11,815
11,626 11,815
Distinct Holdings, Inc. (0.9%)*(7) (8) (9) Systems Software 6,880 6,841 6,715
6,841 6,715
Dragon Bidco (0.4%)*(3) (7) (8) (15) Technology 2,729 2,812 2,676
2,812 2,676
DreamStart Bidco SAS (d/b/a SmartTrade) (0.3%)*(3) (7) (8) (15) Diversified Financial Services 2,418 2,295 2,385
2,295 2,385

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Dune Group (0.2%)*(3) (7) (8) Health Care Equipment $ 1,230 $ 1,205 $ 1,202
First Lien Senior Secured Term Loan (IBOR + 5.75%, 5.8% Cash, Acquired 09/21, Due 09/28)(14) 105 113
1,310 1,315
Dwyer Instruments, Inc. (0.6%)*(7) (8) (10) Electric 4,563 4,452 4,516
4,452 4,516
Echo Global Logistics, Inc. (2.0%)*(7) Air Transportation 14,469 14,210 14,216
Partnership Equity (530.92 units, Acquired 11/21) 531 531
14,741 14,747
Ellkay, LLC (0.7%)*(7) (8) (10) Healthcare & Pharmaceuticals 4,988 4,892 4,898
4,892 4,898
EMI Porta Holdco LLC (1.2%)*(7) (8) (10) Diversified Manufacturing 9,576 9,141 9,136
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27) (59) (59)
9,082 9,077
Entact Environmental Services, Inc. (0.8%)*(7) (8) (10) Environmental Industries 5,705 5,657 5,631
5,657 5,631
EPS NASS Parent, Inc. (0.8%)*(7) (8) (10) Electrical Components & Equipment 5,813 5,695 5,715
5,695 5,715
Eshipping, LLC (0.8%)*(7) (8) Transportation Services 5,965 5,799 5,795
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 12/27)(10) 226 225
6,025 6,020
F24 (Stairway BidCo Gmbh) (0.2%)*(3) (7) (8) (14) Software Services 1,621 1,649 1,621
1,649 1,621
Ferrellgas L.P. (0.4%)*(3) (7) Oil & Gas Equipment & Services 2,799 3,146
2,799 3,146
Fineline Technologies, Inc. (0.2%)*(7) (8) (10) Consumer Services 1,306 1,283 1,306
1,283 1,306
FitzMark Buyer, LLC (0.6%)*(7) (8) (10) Cargo & Transportation 4,269 4,197 4,184
4,197 4,184
Flexential Issuer, LLC (2.1%)* Information Technology 16,000 14,817 15,609
14,817 15,609
FragilePak LLC (0.7%)*(7) Transportation Services 4,697 4,519 4,541
Partnership Units (937.5 units, Acquired 05/21) 938 926
5,457 5,467
Front Line Power Construction LLC (0.5%)* Construction Machinery 4,000 3,872 3,880
Common Stock (50,848 shares, Acquired 11/21) 130 111
4,002 3,991

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
FSS Buyer LLC (0.9%)*(7) Technology First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 08/21, Due 08/28)(8) (10) $ 6,913 $ 6,773 $ 6,790
LP Interest (1,160.9 units, Acquired 08/21) 12 30
LP Units (5,104.32 units, Acquired 08/21) 51 132
6,836 6,952
GTM Intermediate Holdings, Inc. (2.0%)*(7) (25) Medical Equipment Manufacturer Second Lien Loan (11.0% Cash, 1.0% PIK, Acquired 12/20, Due 12/24) 11,500 11,449 11,500
Series A Preferred Units (1,434,472.41 units) 2,166 2,290
Series C Preferred Units (715,649.59 units) 1,081 1,184
14,696 14,974
Gulf Finance, LLC (0.1%)*(8) (9) Oil & Gas Exploration & Production First Lien Senior Secured Term Loan (LIBOR + 6.75%, 7.8% Cash, Acquired 11/21, Due 08/26) 832 799 774
799 774
Hawaiian Airlines 2020-1 Class B Pass Through Certificates (1.0%)* Airlines Structured Secured Note - Class B (11.3% Cash, Acquired 08/20, Due 09/25) 6,093 6,093 7,213
6,093 7,213
Heartland Veterinary Partners, LLC (1.2%)*(7) Healthcare Subordinated Term Loan (11.0% PIK, Acquired 11/21, Due 11/28) 9,343 9,096 9,093
9,096 9,093
Heartland, LLC (1.9%)*(7) (8) (10) Business Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 08/19, Due 08/25) 14,075 13,976 13,794
13,976 13,794
Heavy Construction Systems Specialists, LLC (1.0%)*(7) (8) (10) Technology First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.5% Cash, Acquired 11/21, Due 11/27) 7,368 7,199 7,221
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 11/21, Due 11/27) (54) (53)
7,145 7,168
Heilbron (f/k/a Sucsez (Bolt Bidco B.V.)) (1.2%)*(3) (7) (8) (15) Insurance First Lien Senior Secured Term Loan (IBOR + 5.0%, 5.0% Cash, Acquired 09/19, Due 09/26) 8,789 9,380 8,612
9,380 8,612
Highpoint Global LLC (0.7%)*(7) (25) Government Services Second Lien Note (12.0% Cash, 2.0% PIK, Acquired 12/20, Due 09/22) 5,416 5,395 5,416
5,395 5,416
Home Care Assistance, LLC (0.5%)*(7) (8) (10) Healthcare & Pharmaceuticals First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 03/21, Due 03/27) 3,830 3,762 3,753
3,762 3,753
HTI Technology & Industries (3.0%)* (7) (25) Electronic Component Manufacturing Second Lien Note (12.0% Cash, 4.8% PIK, Acquired 12/20, Due 09/24) 22,746 22,096 22,215
22,096 22,215
HW Holdco, LLC (Hanley Wood LLC) (1.8%)*(7) (8) (9) Advertising First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 12/18, Due 12/24) 13,437 13,189 13,137
13,189 13,137
IGL Holdings III Corp. (0.6%)*(7) (8) (10) Commercial Printing First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/20, Due 11/26) 4,324 4,231 4,268
4,231 4,268
IM Analytics Holding, LLC (d/b/a NVT) (0.9%)*(7) (8) Electronic Instruments & Components First Lien Senior Secured Term Loan (LIBOR + 7.0%, 8.0% Cash, Acquired 11/19, Due 11/23)(10) 8,126 8,085 6,603
Warrant (68,950 units, Acquired 11/19) — —
8,085 6,603
IM Square (0.9%)*(3) (7) (8) (15) Banking, Finance, Insurance & Real Estate First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 05/21, Due 04/28) 7,051 7,232 6,938
7,232 6,938

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Infoniqa Holdings GmbH (1.2%)*(3) (7) (8) (14) Technology First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 11/21, Due 11/28) $ 9,243 $ 8,947 $ 8,989
8,947 8,989
Innovad Group II BV (0.8%)*(3) (7) (8) (14) Beverage, Food & Tobacco First Lien Senior Secured Term Loan (IBOR + 5.75%, 5.8% Cash, Acquired 04/21, Due 04/28) 6,256 6,321 5,876
6,321 5,876
INOS 19-090 GmbH (0.7%)*(3) (7) (8) (14) Aerospace & Defense First Lien Senior Secured Term Loan (IBOR + 6.13%, 6.1% Cash, Acquired 12/20, Due 12/27) 5,271 5,495 5,263
5,495 5,263
ISS#2, LLC (d/b/a Industrial Services Solutions) (0.9%)*(7) (8) (10) Commercial Services & Supplies First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/20, Due 02/26) 6,737 6,639 6,407
6,639 6,407
ITI Intermodal, Inc. (0.1%)*(7) (8) Transportation Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(9) 721 705 705
Revolver (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(10) (2) (2)
703 703
Jade Bidco Limited (Jane's)<br><br>(0.3%)*(3) (7) (8) (11) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.5% Cash, 2.0% PIK, Acquired 11/19, Due 12/26) 2,315 2,257 2,315
2,257 2,315
Jaguar Merger Sub Inc. (0.3%)*(7) (8) (10) Other Financial First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 09/24) 2,543 2,487 2,486
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 09/24) (6) (6)
2,481 2,480
Jedson Engineering, Inc. (0.4%)*(7) (25) Engineering & Construction Management First Lien Loan (12.0% Cash, Acquired 12/20, Due 06/24) 2,650 2,650 2,650
2,650 2,650
JetBlue 2019-1 Class B Pass Through Trust (0.6%)* Airlines Structured Secured Note - Class B (8.0% Cash, Acquired 08/20, Due 11/27) 4,165 4,165 4,805
4,165 4,805
JF Acquisition, LLC (0.5%)*(7) (8) (10) Automotive First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 05/21, Due 07/24) 3,866 3,763 3,711
3,763 3,711
Kano Laboratories LLC (1.2%)*(7) Chemicals, Plastics & Rubber First Lien Senior Secured Term Loan (LIBOR + 5.0%, 6.0% Cash, Acquired 11/20, Due 11/26)(8) (11) 9,002 8,773 8,728
Partnership Equity (203.2 units, Acquired 11/20) 203 205
8,976 8,933
Kene Acquisition, Inc. (En Engineering) (1.0%)*(7) (8) (9) Oil & Gas Equipment & Services First Lien Senior Secured Term Loan (LIBOR + 4.25%, 5.3% Cash, Acquired 08/19, Due 08/26) 7,225 7,125 7,080
7,125 7,080
Kid Distro Holdings, LLC (1.3%)*(7) Media & Entertainment First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 10/21, Due 10/27)(8) (10) 9,362 9,168 9,174
Partnership Equity (637,677.11 units, Acquired 10/21) 638 638
9,806 9,812
Kona Buyer, LLC (1.2%)*(7) (8) (10) High Tech Industries First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/20, Due 12/27) 8,994 8,785 8,994
8,785 8,994
LAF International (0.2%)*(3) (7) (8) (15) Healthcare & Pharmaceuticals First Lien Senior Secured Term Loan (IBOR + 6.0%, 6.0% Cash, Acquired 03/21, Due 03/28) 1,478 1,543 1,446
1,543 1,446

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Lambir Bidco Limited (0.9%)*(3) (7) Healthcare $ 5,017 $ 4,770 $ 4,810
Second Lien Senior Secured Term Loan (12.0% PIK, Acquired 12/21, Due 06/29) 1,363 1,375
Revolver (IBOR + 6.0%, 6.0% Cash, Acquired 12/21, Due 12/24)(8) (14) 292 295
6,425 6,480
Learfield Communications, LLC (1.1%)* Broadcasting 135 95 128
First Lien Senior Secured Term Loan (LIBOR + 3.0%, 3.0% Cash, 10.2% PIK, Acquired 08/20, Due 12/23)(10) 7,909 7,959
8,004 8,087
Legal Solutions Holdings (0.8%)*(7) (24) (25) Business Services 11,836 10,129 5,918
10,129 5,918
LivTech Purchaser, Inc. (0.1%)*(7) (8) (10) Business Services 918 908 910
908 910
Marmoutier Holding B.V. (0.3%)*(3) (7) (8) (14) Consumer Products 1,944 1,872 1,880
Revolver (IBOR + 5.0%, 5.0% Cash, Acquired 12/21, Due 06/27) (4) (4)
1,868 1,876
MC Group Ventures Corporation (0.6%)*(7) Business Services 3,687 3,598 3,656
Partnership Units (746.66 units, Acquired 06/21) 747 761
4,345 4,417
Media Recovery, Inc. (SpotSee) (1.0%)*(7) (8) Containers, Packaging & Glass 2,933 2,892 2,933
First Lien Senior Secured Term Loan ( LIBOR + 6.0%, 7.0% Cash, Acquired 12/20, Due 11/25)(12) 4,303 4,442
7,195 7,375
Medical Solutions Parent Holdings, Inc. (0.6%)*(8) (10) Healthcare 4,421 4,377 4,362
4,377 4,362
MNS Buyer, Inc. (0.1%)*(7) Construction & Building 921 903 905
Partnership Units (76.92 Units, Acquired 08/21) 77 78
980 983
Modern Star Holdings Bidco Pty Limited. (1.1%)*(3) (7) (8) (19) Non-durable Consumer Goods 8,368 8,281 8,299
8,281 8,299
MSG National Properties (0.3%)*(3) (7) (8) (10) Hotel, Gaming, & Leisure 2,437 2,378 2,486
2,378 2,486
Murphy Midco Limited (0.7%)*(3) (7) (8) (13) Media, Diversified & Production 5,252 4,951 5,104
4,951 5,104
Music Reports, Inc. (1.0%)*(7) (8) (10) Media & Entertainment 7,462 7,288 7,313
7,288 7,313

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Narda Acquisitionco., Inc. (0.8%)*(7) Aerospace & Defense $ 5,680 $ 5,581 $ 5,580
Revolver (LIBOR + 5.25%, 6.3% Cash, Acquired 12/21, Due 12/27)(8) (10) (23) (23)
Class A Preferred Stock (4,587.38 shares, Acquired 12/21) 459 459
Class B Common Stock (509.71 shares, Acquired 12/21) 51 51
6,068 6,067
Navia Benefit Solutions, Inc. (0.4%)* (7) (8) (10) Healthcare & Pharmaceuticals 2,727 2,668 2,703
2,668 2,703
Nexus Underwriting Management Limited (0.2%)*(3) (7) (8) (17) Other Financial 1,691 1,620 1,630
First Lien Senior Secured Term Loan (SONIA + 5.25%, 5.3% Cash, Acquired 12/21, Due 04/22) 102 101
1,722 1,731
NGS US Finco, LLC (f/k/a Dresser Natural Gas Solutions) (0.6%)*(7) (8) (9) Energy Equipment & Services 4,753 4,734 4,677
4,734 4,677
Northstar Recycling, LLC (0.3%)*(7) (8) (10) Environmental Industries 2,500 2,452 2,450
2,452 2,450
OA Buyer, Inc. (1.1%)*(7) Healthcare 8,501 8,331 8,331
Revolver (LIBOR + 6.0%, 6.8% Cash, Acquired 12/21, Due 12/28)(8) (10) (27) (27)
Partnership Units (210,920.11 units, Acquired 12/21) 211 211
8,515 8,515
Odeon Cinemas Group Limited (0.5%)*(3) (7) Hotel, Gaming, & Leisure 3,954 4,055 4,033
4,055 4,033
OG III B.V. (0.4%)*(3) (7) (8) (14) Containers & Glass Products 2,916 2,997 2,843
2,997 2,843
Omni Intermediate Holdings, LLC (1.5%)*(7) (8) (9) Transportation 11,831 11,461 11,491
11,461 11,491
Options Technology Ltd.<br><br>(0.3%)*(3) (7) (8) (10) Computer Services 2,313 2,282 2,267
2,282 2,267
Oracle Vision Bidco Limited (0.4%)*(3) (7) (8) (17) Healthcare 3,100 3,141 3,028
3,141 3,028
Origin Bidco Limited (0.1%)*(3) (7) (8) Technology 597 582 584
First Lien Senior Secured Term Loan (IBOR + 5.75%, 5.8% Cash, Acquired 06/21, Due 06/28)(14) 394 369
976 953
OSP Hamilton Purchaser, LLC (0.3%)*(7) (8) Technology 2,281 2,235 2,235
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 12/21, Due 12/27)(10) (4) (4)
2,231 2,231
Pacific Health Supplies Bidco Pty Limited (1.1%)*(3) (7) (8) (20) Healthcare & Pharmaceuticals 8,779 8,730 8,529
8,730 8,529

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Pare SAS (SAS Maurice MARLE) (0.6%)*(3) (7) (14) Health Care Equipment $ 4,638 $ 4,478 $ 4,638
4,478 4,638
Patriot New Midco 1 Limited (Forensic Risk Alliance) (0.9%)*(3) (7) (8) Diversified Financial Services 3,764 3,685 3,591
First Lien Senior Secured Term Loan (IBOR + 6.75%, 6.8% Cash, Acquired 02/20, Due 02/27)(14) 3,017 3,068
6,702 6,659
PDQ.Com Corporation (1.2%)*(7) Business Equipment & Services 9,062 8,710 8,707
Class A-2 Partnership Units (26.32 units, Acquired 08/21) 29 29
8,739 8,736
Permaconn Bidco Ltd (2.0%)*(3) (7) (8) (19) Tele-communications 15,012 14,386 14,599
14,386 14,599
Polara Enterprises, LLC (0.6%)*(7) Capital Equipment 4,243 4,159 4,158
Revolver (LIBOR + 4.75%, 5.8% Cash, Acquired 12/21, Due 12/27)(8) (10) (11) (11)
Partnership Units (3,820.44 units, Acquired 12/21) 382 382
4,530 4,529
Policy Services Company, LLC (5.9%)*(7) Property & Casualty Insurance 45,831 44,018 44,008
Warrants - Class A (28,260 units, Acquired 12/21) — —
Warrants - Class B (9,537 units, Acquired 12/21) — —
Warrants - Class CC (980 units, Acquired 12/21) — —
Warrants - Class D (2,520 units, Acquired 12/21) — —
44,018 44,008
Premium Franchise Brands, LLC (2.0%)*(7) (8) (10) Research & Consulting Services 14,853 14,597 14,556
14,597 14,556
Premium Invest (0.5%)*(3) (7) (8) (14) Brokerage, Asset Managers & Exchanges 4,094 4,113 4,010
4,113 4,010
Preqin MC Limited (0.4%)*(3) (7) (8) (23) Banking, Finance, Insurance & Real Estate 2,789 2,695 2,764
2,695 2,764
Process Equipment, Inc. (ProcessBarron) (0.8%)*(7) (8) (10) Industrial Air & Material Handling Equipment 6,174 6,115 5,945
6,115 5,945
Professional Datasolutions, Inc. (PDI) (0.2%)*(7) (8) (10) Application Software 1,836 1,833 1,809
1,833 1,809
Protego Bidco B.V. (0.5%)*(3) (7) (8) (14) Aerospace & Defense 2,227 2,269 2,195
First Lien Senior Secured Term Loan (IBOR + 6.0%, 6.0% Cash, Acquired 03/21, Due 03/28) 1,561 1,495
3,830 3,690
QPE7 SPV1 BidCo Pty Ltd (0.2%)*(3) (7) (8) (20) Consumer Cyclical 1,632 1,564 1,605
1,564 1,605
Questel Unite (0.9%)*(3) (7) (8) (10) Business Services 6,892 6,802 6,851
6,802 6,851

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
Recovery Point Systems, Inc.<br><br>(1.6%)*(7) Technology $ 11,648 $ 11,460 $ 11,648
Partnership Equity (187,235 units, Acquired 03/21) 187 150
11,647 11,798
Renovation Parent Holdings, LLC<br><br>(0.7%)*(7) Home Furnishings 4,854 4,735 4,733
Partnership Equity (197,368.42 units, Acquired 11/21) 197 203
4,932 4,936
REP SEKO MERGER SUB LLC<br><br>(1.0%)* (7) (8) (10) Air Freight & Logistics 7,614 7,416 7,478
7,416 7,478
Resonetics, LLC (0.5%)*(7) (8) (10) Health Care Equipment 4,011 3,934 3,930
3,934 3,930
Reward Gateway (UK) Ltd (0.4%)*(3) (7) (8) (17) Precious Metals & Minerals 2,869 2,807 2,776
2,807 2,776
Riedel Beheer B.V. (0.3%)*(3) (7) (8) (14) Food & Beverage 1,899 1,835 1,843
Revolver (IBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 06/28) (5) (5)
Super Senior Secured Term Loan (IBOR + 5.5%, 5.5% Cash, Acquired 12/21, Due 12/28) 222 223
2,052 2,061
RPX Corporation (1.0%)*(7) (8) (10) Research & Consulting Services 7,612 7,426 7,455
7,426 7,455
Ruffalo Noel Levitz, LLC<br><br>(1.3%)*(7) (8) (10) Media Services 9,543 9,524 9,543
9,524 9,543
Safety Products Holdings, LLC (1.6%)*(7) Non-durable Consumer Goods 12,026 11,798 11,755
Preferred Stock (372.1 shares, Acquired 12/20) 372 510
12,170 12,265
Scaled Agile, Inc. (0.2%)*(7) (8) (10) Research & Consulting Services 1,748 1,705 1,705
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 12/21, Due 12/28) (7) (7)
1,698 1,698
Serta Simmons Bedding LLC<br><br>(1.4%)*(8) (9) Home Furnishings 7,350 7,229 7,409
Super Priority Second Out (LIBOR + 7.5%, 8.5% Cash, Acquired 6/20, Due 08/23) 3,374 3,365
10,603 10,774
SISU ACQUISITIONCO., INC. (0.9%)*(7) (8) (10) Aerospace & Defense 7,009 6,869 6,771
6,869 6,771
Smartling, Inc. (2.2%)*(7) (8) (10) Technology 16,471 16,102 16,094
Revolver (LIBOR + 5.75%, 6.8% Cash, Acquired 11/21, Due 11/27) (23) (24)
16,079 16,070
Smile Brands Group Inc.<br><br>(0.6%)*(7) (8) (10) Health Care Services 4,593 4,571 4,553
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.3% Cash, Acquired 12/20, Due 10/25) (12) (6)
4,559 4,547

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Principal<br>Amount Cost Fair<br>Value
SN BUYER, LLC (2.5%)*(7) (8) (9) Health Care Services $ 18,394 $ 18,080 $ 18,394
18,080 18,394
Springbrook Software (SBRK Intermediate, Inc.) (1.4%)*(7) (8) (10) Enterprise Software & Services 10,346 10,179 10,346
10,179 10,346
SPT Acquico Limited (0.1%)*(3) (7) (8) (10) High Tech Industries 658 644 658
644 658
SSCP Pegasus Midco Limited (0.4%)*(3) (7) (8) (12) Healthcare & Pharmaceuticals 2,754 2,488 2,722
2,488 2,722
Starnmeer B.V. (1.0%)*(3) (7) (8) (10) Technology 7,500 7,391 7,388
7,391 7,388
Superjet Buyer, LLC (3.0%)*(7) (8) (10) Technology 23,175 22,711 22,711
Revolver (LIBOR + 5.75%, 6.5% Cash, Acquired 12/21, Due 12/27) (37) (37)
22,674 22,674
Syniverse Holdings, Inc. (2.3%)*(8) (10) Technology Distributors 17,314 16,493 17,192
16,493 17,192
Syntax Systems Ltd (0.3%)*(3) (7) (8) (9) Technology 2,056 2,018 2,016
Revolver (LIBOR + 5.5%, 6.3% Cash, Acquired 11/21, Due 10/26) 432 432
2,450 2,448
TA SL Cayman Aggregator Corp.<br><br>(0.3%)*(7) Technology 1,995 1,957 1,960
Common Stock (1,227.79 shares, Acquired 07/21) 50 65
2,007 2,025
Techone B.V. (1.1%)*(3) (7) (8) (14) Technology 8,726 8,428 8,441
Revolver (IBOR + 5.5%, 5.5% Cash, Acquired 11/21, Due 05/28) 97 97
8,525 8,538
Tencarva Machinery Company, LLC (0.7%)*(7) (8) (10) Capital Equipment 5,486 5,375 5,374
Revolver (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27) (20) (20)
5,355 5,354
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC) (0.5%)*(7) Brokerage, Asset Managers & Exchanges 847 776 776
Revolver (LIBOR + 4.25%, 5.3% Cash, Acquired 10/21, Due 12/27)(8) (10) (14) (14)
Subordinated Term Loan (7.8% PIK, Acquired 10/21, Due 10/28) 3,268 3,267
4,030 4,029
The Hilb Group, LLC<br><br>(2.7%)*(7) (8) (10) Insurance Brokerage 20,279 19,880 19,874
First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 12/19, Due 12/26) (1) (2)
19,879 19,872
Total Safety U.S. Inc. (0.9%)*(8) (11) Diversified Support Services 6,583 6,393 6,482
6,393 6,482

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
Transit Technologies LLC<br><br>(0.8%)*(7) (8) (10) Software First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 02/20, Due 02/25) $ 6,035 $ 5,946 $ 5,846
5,946 5,846
Transportation Insight, LLC (1.5%)*(7) (8) (9) Air Freight & Logistics First Lien Senior Secured Term Loan (LIBOR + 4.5%, 4.6% Cash, Acquired 08/18, Due 12/24) 11,330 11,260 11,160
11,260 11,160
Trident Maritime Systems, Inc. (2.0%)*(7) (8) (10) Aerospace & Defense First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 02/21, Due 02/27) 14,888 14,665 14,888
14,665 14,888
Truck-Lite Co., LLC (2.0%)*(7) (8) (10) Automotive Parts & Equipment First Lien Senior Secured Term Loan (LIBOR + 6.25%, 7.3% Cash, Acquired 12/19, Due 12/26) 15,002 14,623 14,611
14,623 14,611
Trystar, LLC (1.6%)*(7) Power Distribution Solutions First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 09/18, Due 09/23)(8) (10) 11,988 11,777 11,778
Class A LLC Units (440.97 units, Acquired 09/18) 481 412
12,258 12,190
Turbo Buyer, Inc. (1.1%)*(7) (8) (10) Finance Companies First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 11/21, Due 12/25) 8,430 8,226 8,220
8,226 8,220
Turf Products, LLC (1.2%)*(7) (25) Landscaping & Irrigation Equipment Distributor Senior Subordinated Debt (10.0% Cash, Acquired 12/20, Due 10/23) 8,697 8,384 8,627
8,384 8,627
Turnberry Solutions, Inc. (0.6%)*(7) (8) (10) Consumer Cyclical First Lien Senior Secured Term Loan (LIBOR + 6.0%, 7.0% Cash, Acquired 07/21, Due 09/26) 4,500 4,406 4,423
4,406 4,423
U.S. Gas & Electric, Inc. (0.2%)*(7) (25) Energy Services Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25) 2,285 1,785 1,785
Second Lien Loan (9.5% Cash, Acquired 12/20, Due 07/25)(26) — —
1,785 1,785
U.S. Silica Company (0.2%)*(3) (8) (9) Metal & Glass Containers First Lien Senior Secured Term Loan (LIBOR + 4.0%, 5.0% Cash, Acquired 08/18, Due 05/25) 1,472 1,474 1,437
1,474 1,437
UKFast Leaders Limited (1.6%)*(3) (7) (8) (16) Technology First Lien Senior Secured Term Loan (SONIA + 7.0%, 7.1% Cash, Acquired 09/20, Due 9/27) 12,312 11,399 12,090
11,399 12,090
USLS Acquisition, Inc. (f/k/a US Legal Support, Inc.) (2.2%)*(7) (8) (10) Legal Services First Lien Senior Secured Term Loan (LIBOR + 5.75%, 6.8% Cash, Acquired 11/18, Due 11/24) 16,222 16,065 16,222
16,065 16,222
Utac Ceram (0.7%)*(3) (7) (8) Business Services First Lien Senior Secured Term Loan (IBOR + 5.25%, 5.3% Cash, Acquired 09/20, Due 09/27)(14) 1,706 1,706 1,673
First Lien Senior Secured Term Loan (LIBOR + 5.25%, 5.5% Cash, Acquired 02/21, Due 09/27)(10) 3,456 3,451
5,162 5,124
Validity, Inc. (0.6%)*(7) (8) (9) IT Consulting & Other Services First Lien Senior Secured Term Loan (LIBOR + 4.75%, 4.8% Cash, Acquired 07/19, Due 05/25) 4,783 4,687 4,764
4,687 4,764
VistaJet Pass Through Trust 2021-1B (0.7%)* Airlines Structured Secured Note - Class B (6.3% Cash, Acquired 11/21, Due 02/29) 5,000 5,000 4,905
5,000 4,905
Vital Buyer, LLC (1.1%)*(7) Technology First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.3% Cash, Acquired 06/21, Due 06/28)(8) (10) 7,802 7,656 7,676
Partnership Units (16,442.9 units, Acquired 06/21) 164 171
7,820 7,847

All values are in Euros.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Portfolio Company(6) Industry Type of Investment(1) (2) Principal<br>Amount Cost Fair<br>Value
W2O Holdings, Inc. (0.3%)*(7) (8) (10) Healthcare Technology First Lien Senior Secured Term Loan (LIBOR + 4.75%, 5.8% Cash, Acquired 10/20, Due 06/25) $ 2,152 $ 2,090 $ 2,152
2,152 2,090 2,152
Woodland Foods, LLC (1.8%)*(7) Food & Beverage First Lien Senior Secured Term Loan (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27)(8) (10) 11,512 11,285 11,282
Revolver (LIBOR + 5.5%, 6.5% Cash, Acquired 12/21, Due 12/27)(8) (10) 172 128 127
Common Stock (1,663,307.18 shares, Acquired 12/21) 1,663 1,663
11,684 13,076 13,072
World 50, Inc. (1.6%)*(7) (8) (9) Professional Services First Lien Senior Secured Term Loan (LIBOR + 5.25%, 6.3% Cash, Acquired 01/20, Due 01/26) 3,280 3,202 3,280
First Lien Senior Secured Term Loan (LIBOR + 4.5%, 5.5% Cash, Acquired 09/20, Due 01/26) 9,009 8,849 8,874
12,289 12,051 12,154
Subtotal Non–Control / Non–Affiliate Investments (200.9%) 1,518,708 1,494,028 1,490,115
Affiliate Investments: (4)
Eclipse Business Capital, LLC (13.4%)*(7) Banking, Finance, Insurance, & Real Estate Second Lien Senior Secured Term Loan (7.5% Cash, Acquired 07/21, Due 07/28) 4,545 4,502 4,738
Revolver (LIBOR + 7.25%, Acquired 07/21, Due 07/28)(10) 1,818 1,691 1,818
LLC Units (89,447,396 units, Acquired 07/21) 89,850 92,668
6,363 96,043 99,224
Jocassee Partners LLC (5.1%)*(3) Investment Funds & Vehicles 9.1% Member Interest, Acquired 06/19 30,158 37,601
30,158 37,601
JSC Tekers Holdings (0.8%)*(3) (7) (25) Real Estate Management Preferred Stock (9,159,085 shares, Acquired 12/20) 4,753 6,197
Common Stock (3,201 shares, Acquired 12/20) — —
4,753 6,197
Security Holdings B.V. (6.3%)*(3) (7) (25) Electrical Engineering Bridge Loan (5.0% PIK, Acquired 12/20, Due 02/27) 5,451 5,451 5,451
Senior Subordinated Loan (3.1% PIK, Acquired 12/20, Due 05/22) 9,525 9,525 9,525
Senior Unsecured Term Loan (6.0% Cash, 9.0% PIK, Acquired 04/21, Due 04/25) 7,307 7,639 7,307
Common Stock (900 shares, Acquired 12/20) 21,264 24,825
22,283 43,879 47,108
Thompson Rivers LLC (11.3%)*(3) Investment Funds & Vehicles 15.90% Member Interest, Acquired 06/20 79,414 84,438
79,414 84,438
Waccamaw River LLC (1.8%)*(3) Investment Funds & Vehicles 20% Member Interest, Acquired 02/21 13,720 13,501
13,720 13,501
Subtotal Affiliate Investments (38.8%) 28,646 267,967 288,069
Control Investments:(5)
MVC Automotive Group Gmbh (2.0%)*(3) (7) (25) Automotive Bridge Loan (6.0% Cash, Acquired 12/20, Due 06/26) 7,149 7,149 7,149
Common Equity Interest (18,000 shares, Acquired 12/20) 9,553 7,699
7,149 16,702 14,848
MVC Private Equity Fund LP (1.0%)*(3) (25) Investment Funds & Vehicles General Partnership Interest 225 188
Limited Partnership Interest 8,899 7,376
9,124 7,564
Subtotal Control Investments (3.0%) 7,149 25,826 22,412
Total Investments, December 31, 2021 (242.7%)* $ 1,554,503 $ 1,787,821 $ 1,800,596

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

Derivative Instruments

Credit Support Agreement(a)(b)(d)
Description Counter Party Settlement Date(c) Notional Amount Value Unrealized Appreciation (Depreciation)
Credit Support Agreement Barings LLC 01/01/31 $ 23,000,000 $ 15,400,000 $ 1,800,000
Total Credit Support Agreement, December 31, 2021 $ 1,800,000

(a) The MVC Credit Support Agreement covers all of the investments acquired by the Company from MVC in connection with the MVC Acquisition (as defined in “Note 1 – Organization, Business and Basis of Presentation”) and any investments received by the Company in connection with the restructuring, amendment, extension or other modification (including the issuance of new securities) of any of the MVC Reference Portfolio. Each investment that is included in the MVC Reference Portfolio is denoted in the above Schedule of Investments with footnote (25).

(b)      The Company and Barings entered into a Credit Support Agreement pursuant to which Barings agreed to provide credit support to the Company in the amount of up to $23.0 million.

(c) Settlement Date means the earlier of (1) January 1, 2031 or (2) the date on which the entire MVC Reference Portfolio has been realized or written off.

(d) See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the MVC Credit Support Agreement.

Foreign Currency Forward Contracts:
Description Notional Amount to be Purchased Notional Amount to be Sold Counterparty Settlement Date Unrealized Appreciation (Depreciation)
Foreign currency forward contract (AUD) A$31,601 $22,850 Bank of America, N.A. 01/06/22 $ 126
Foreign currency forward contract (AUD) A$2,099 $1,508 HSBC Bank USA 01/06/22 18
Foreign currency forward contract (AUD) $20,727 A$28,700 Citibank N.A. 01/06/22 (139)
Foreign currency forward contract (AUD) $3,580 A$5,000 HSBC Bank USA 04/08/22 (55)
Foreign currency forward contract (AUD) $18,247 A$25,386 Bank of America, N.A. 04/08/22 (215)
Foreign currency forward contract (CAD) C$3,230 $2,528 Bank of America, N.A. 01/06/22 29
Foreign currency forward contract (CAD) C$3,000 $2,425 HSBC Bank USA 01/06/22 (50)
Foreign currency forward contract (CAD) $4,881 C$6,230 HSBC Bank USA 01/06/22 (51)
Foreign currency forward contract (CAD) $2,506 C$3,203 Bank of America, N.A. 04/08/22 (29)
Foreign currency forward contract (DKK) 2,143kr. $326 Bank of America, N.A. 01/06/22 1
Foreign currency forward contract (DKK) $335 2,143kr. Bank of America, N.A. 01/06/22 7
Foreign currency forward contract (DKK) $323 2,116kr. Bank of America, N.A. 04/08/22 (1)
Foreign currency forward contract (EUR) €52,583 $59,524 Bank of America, N.A. 01/06/22 275
Foreign currency forward contract (EUR) €5,020 $5,701 HSBC Bank USA 04/08/22 18
Foreign currency forward contract (EUR) $24,722 €21,500 Bank of America, N.A. 01/06/22 271
Foreign currency forward contract (EUR) $14,563 €12,900 HSBC Bank USA 01/06/22 (108)
Foreign currency forward contract (EUR) $20,655 €18,183 BNP Paribas SA 01/06/22 (23)
Foreign currency forward contract (EUR) $60,413 €53,265 Bank of America, N.A. 04/08/22 (282)
Foreign currency forward contract (EUR) $1,130 €1,000 HSBC Bank USA 04/08/22 (10)
Foreign currency forward contract (EUR) $8,514 €7,500 BNP Paribas SA 04/08/22 (33)
Foreign currency forward contract (GBP) £9,900 $13,220 Bank of America, N.A. 01/06/22 190
Foreign currency forward contract (GBP) $13,349 £9,900 BNP Paribas SA 01/06/22 (60)
Foreign currency forward contract (GBP) $6,122 £4,599 Bank of America, N.A. 04/08/22 (104)
Foreign currency forward contract (SEK) 1,792kr $198 HSBC Bank USA 01/07/22 —
Foreign currency forward contract (SEK) $204 1,792kr Bank of America, N.A. 01/07/22 6
Foreign currency forward contract (SEK) $207 1,875kr HSBC Bank USA 04/08/22 —
Total Foreign Currency Forward Contracts, December 31, 2021 $ (219)

_______________________________________________________________

*    Fair value as a percentage of net assets.

(1)All debt investments are income producing, unless otherwise noted. Eclipse Business Capital, LLC, Ferrellgas L.P., Kano Laboratories LLC, Thompson Rivers LLC and Waccamaw River LLC equity investments are income producing. All other equity and any equity-linked investments are non-income producing. The Board determined in good faith that all investments were valued at fair value in accordance with the Company's valuation policies and procedures and the 1940 Act, based on, among other things, the input of the Company's external investment adviser, Barings, the Company’s Audit Committee and independent valuation firms that have been engaged to assist in the valuation of the Company's middle-market investments. In addition, all debt investments are variable rate investments unless otherwise noted. Index-based floating interest rates are generally subject to a contractual minimum interest rate. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to LIBOR, EURIBOR, GBP LIBOR, BBSY, STIBOR, CDOR, SOFR, SONIA or an alternate Base Rate

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

(commonly based on the Federal Funds Rate or the Prime Rate), which typically reset semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan.

(2)All of the Company’s portfolio company investments (including joint venture investments), which as of December 31, 2021 represented 242.0% of the Company’s net assets, are subject to legal restrictions on sales. The acquisition date represents the date of the Company's initial investment in the relevant portfolio company.

(3)Investment is not a qualifying investment as defined under Section 55(a) of the 1940 Act. Non-qualifying assets represent 25.7% of total investments at fair value as of December 31, 2021. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. If at any time qualifying assets do not represent at least 70% of the Company's total assets, the Company will be precluded from acquiring any additional non-qualifying asset until such time as it complies with the requirements of Section 55(a).

(4)As defined in the 1940 Act, the Company is deemed to be an “affiliated person” of the portfolio company as the Company owns between 5% or more, up to 25% (inclusive), of the portfolio company's voting securities (“non-controlled affiliate”). Transactions related to investments in non-controlled "Affiliate Investments" for the year ended December 31, 2021 were as follows:

December 31, 2020 <br>Value Gross Additions<br>(b) Gross Reductions (c) Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) December 31, 2021 Value Amount of Interest or Dividends Credited to Income(d)
Portfolio Company Type of Investment(a)
Advantage Insurance, Inc.(e) Preferred Stock (587,001 shares) $ 5,947 $ — $ (5,870) $ (77) $ — $ — $ 72
5,947 — (5,870) (77) — — 72
Eclipse Business Capital, LLC (e) Second Lien Senior Secured Term Loan (7.5% Cash) — 4,502 — — 236 4,738 170
Revolver (LIBOR + 7.25%) — 1,691 — — 127 1,818 53
LLC units (89,447,396 units) — 89,850 — — 2,818 92,668 3,582
— 96,043 — — 3,181 99,224 3,805
Jocassee Partners LLC 9.1% Member Interest 22,624 10,000 — — 4,978 37,602 —
22,624 10,000 — — 4,978 37,602 —
JSC Tekers Holdings(e) Preferred Stock (9,159,085 shares) 4,753 — — — 1,444 6,197 —
Common Stock (3,201 shares) — — — — — — —
4,753 — — — 1,444 6,197 —
Security Holdings B.V(e) Bridge Loan (5.0% PIK 5/31/2021) 5,188 264 — — — 5,452 276
Senior Subordinated Loan (3.1% PIK) 8,746 778 — — — 9,524 285
Senior Unsecured Term Loan (9.0% PIK) — 8,831 (1,168) (24) (332) 7,307 820
Common Equity Interest 21,329 — — — 3,496 24,825 —
35,263 9,873 (1,168) (24) 3,164 47,108 1,381
Thompson Rivers LLC 15.90% Member Interest 10,012 69,414 — — 5,012 84,438 4,776
10,012 69,414 — — 5,012 84,438 4,776
Waccamaw River LLC 20% Member Interest — 13,762 (68) — (194) 13,500 280
— 13,762 (68) — (194) 13,500 280
Total Affiliate Investments $ 78,599 $ 199,092 $ (7,106) $ (101) $ 17,585 $ 288,069 $ 10,314

(a)     Eclipse Business Capital, LLC, Thompson Rivers LLC and Waccamaw River LLC equity investments are income producing. All other equity and any equity-linked investments are non-income producing.

(b)     Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments.

(c)    Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales.

Barings BDC, Inc.

Consolidated Schedule of Investments — (Continued)

December 31, 2021

(Amounts in thousands, except share amounts)

(d) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Affiliate category.

(e) The fair value of the investment was determined using significant unobservable inputs.

(5)    As defined in the 1940 Act, the Company is deemed to be both an “affiliated person” and “control” the portfolio company because it owns more than 25% of the portfolio company’s outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company (including through a management agreement). Transactions as of and during the year ended December 31, 2021 in which the portfolio company is deemed to be a "Control Investment" of the Company were as follows:

December 31, 2020<br>Value Gross Additions<br>(b) Gross Reductions (c) Amount of Realized Gain (Loss) Amount of Unrealized Gain (Loss) December 31, 2021<br><br>Value Amount of Interest or Dividends Credited to Income(d)
Portfolio Company Type of Investment(a)
MVC Automotive Group GmbH(e) Common Equity Interest $ 9,582 $ — $ — $ — $ (1,883) $ 7,699 $ —
Bridge Loan (6.0% Cash 12/31/2021) 7,149 — — — — 7,149 435
16,731 — — — (1,883) 14,848 435
MVC Private Equity Fund LP Limited Partnership Interest 8,899 — — — (1,523) 7,376 —
General Partnership Interest 225 — — (37) 188 643
9,124 — — — (1,560) 7,564 643
Waccamaw River LLC 50% Member Interest — 4,500 (4,474) — (26) — —
Total Control Investments $ 25,855 $ 4,500 $ (4,474) $ — $ (3,469) $ 22,412 $ 1,078

(a)     Equity and equity-linked investments are non-income producing, unless otherwise noted.

(b) Gross additions include increases in the cost basis of investments resulting from new investments and follow-on investments.

(c)     Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales.

(d)    Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Control category.

(e) The fair value of the investment was determined using significant unobservable inputs.

(6)Some or all of the investment is or will be encumbered as security for the Company's senior secured credit facility with ING Capital LLC.

(7)The fair value of the investment was determined using significant unobservable inputs.

(8)Debt investment includes interest rate floor feature.

(9)The interest rate on these loans is subject to 1 Month LIBOR, which as of December 31, 2021 was 0.10125%.

(10)The interest rate on these loans is subject to 3 Month LIBOR, which as of December 31, 2021 was 0.20913%.

(11)The interest rate on these loans is subject to 6 Month LIBOR, which as of December 31, 2021 was 0.33875%.

(12)The interest rate on these loans is subject to 3 Month GBP LIBOR, which as of December 31, 2021 was 0.26225%.

(13)The interest rate on these loans is subject to 6 Month GBP LIBOR, which as of December 31, 2021 was 0.47363%.

(14)The interest rate on these loans is subject to 3 Month EURIBOR, which as of December 31, 2021 was -0.57200%.

(15)The interest rate on these loans is subject to 6 Month EURIBOR, which as of December 31, 2021 was -0.54600%.

(16)The interest rate on these loans is subject to 3 Month SONIA, which as of December 31, 2021 was 0.33830%.

(17)The interest rate on these loans is subject to 6 Month SONIA, which as of December 31, 2021 was 0.49870%.

(18)The interest rate on these loans is subject to 3 Month STIBOR, which as of December 31, 2021 was -0.00050%.

(19)The interest rate on these loans is subject to 1 Month BBSY, which as of December 31, 2021 was 0.01500%.

(20)The interest rate on these loans is subject to 3 Month BBSY, which as of December 31, 2021 was 0.06770%.

(21)The interest rate on these loans is subject to 3 Month CDOR, which as of December 31, 2021 was 0.51750%.

(22)The interest rate on these loans is subject to 3 Month SOFR, which as of December 31, 2021 was 0.09125%.

(23)The interest rate on these loans is subject to 6 Month SOFR, which as of December 31, 2021 was 0.19947%.

(24)Non-accrual investment.

(25)Investment was purchased as part of the MVC Acquisition and is part of the MVC Reference Portfolio for purposes of the MVC Credit Support Agreement.

(26)In 2017, MVC received $5.7 million of 9.5% second lien callable notes due in 2025, in lieu of an escrow to satisfy any indemnification claims associated with MVC’s sale of its equity investment in U.S. Gas. Effective January 1, 2018, the cost basis of the U.S. Gas second lien loan was decreased by approximately $3.0 million due to a working capital adjustment. This loan is still subject to indemnification adjustments.

See accompanying notes.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements

  1. ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION

The Company and its wholly-owned subsidiaries are specialty finance companies. The Company currently operates as a closed-end, non-diversified investment company and has elected to be treated as a business development company (“BDC”) under the 1940 Act. The Company has elected for federal income tax purposes to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”).

Organization

The Company is a Maryland corporation incorporated on October 10, 2006. On August 2, 2018, the Company entered into an investment advisory agreement (the “Original Advisory Agreement”) and an administration agreement (the “Administration Agreement”) and became an externally-managed BDC managed by Barings LLC (“Barings” or the “Adviser”). An externally-managed BDC generally does not have any employees, and its investment and management functions are provided by an outside investment adviser and administrator under an investment advisory agreement and administration agreement. Instead of the Company directly compensating employees, the Company pays the Adviser for investment and management services pursuant to the terms of the New Barings BDC Advisory Agreement (as defined in “Note 2 – Agreements and Related Party Transactions”) (and, from January 1, 2021 to February 25, 2022, pursuant to the terms of the Amended and Restated Advisory Agreement (as defined in “Note 2 – Agreements and Related Party Transactions”)) and the Administration Agreement. See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the Company’s investment advisory agreement and administration agreement.

Basis of Presentation

The financial statements of the Company include the accounts of Barings BDC, Inc. and its wholly-owned subsidiaries. The effects of all intercompany transactions between the Company and its wholly-owned subsidiaries have been eliminated in consolidation. The Company is an investment company and, therefore, applies the specialized accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies. ASC Topic 946 states that consolidation by the Company of an investee that is not an investment company is not appropriate, except when the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. None of the portfolio investments made by the Company qualify for this exception. Therefore, the Company's investment portfolio is carried on the Unaudited and Audited Consolidated Balance Sheets at fair value, as discussed further in “Note 3 – Investments”, with any adjustments to fair value recognized as “Net unrealized appreciation (depreciation)” on the Unaudited Consolidated Statements of Operations.

The accompanying unaudited consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial statements for the interim period, have been reflected in the unaudited consolidated financial statements. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the full fiscal year. Additionally, the unaudited consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2021. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the unaudited consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Recently Issued Accounting Standards

In March 2020, the FASB issued Accounting Standards Update, 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting ASU 2020-04 on its consolidated financial statements.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Share Purchase Programs

In connection with the completion of the Company’s acquisition of MVC on December 23, 2020 (the “MVC Acquisition”), the Company committed to make open-market purchases of shares of its common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of the Company’s then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period commencing upon the filing of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, contractual and regulatory requirements. During the three months ended March 31, 2022, the Company repurchased a total of 207,677 shares of its common stock in the open market under the authorized program at an average price of $10.14 per share, including broker commissions.

In connection with the completion of the Company’s acquisition of Sierra on February 25, 2022 (the “Sierra Acquisition”), the Company committed to make open-market purchases of shares of its common stock in an aggregate amount of up to $30.0 million at then-current market prices at any time shares trade below 90% of the Company’s then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period commencing on April 1, 2022 and are expected to be made in accordance with a Rule 10b5-1 purchase plan that qualifies for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as subject to compliance with the Company’s covenant and regulatory requirements.

  1. AGREEMENTS AND RELATED PARTY TRANSACTIONS

On August 2, 2018, the Company entered into the Original Advisory Agreement and the Administration Agreement with the Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. In connection with the MVC Acquisition, on December 23, 2020, the Company entered into an amended and restated investment advisory agreement (the “Amended and Restated Advisory Agreement”) with the Adviser, following approval of the Amended and Restated Advisory Agreement by the Company’s stockholders at its December 23, 2020 special meeting of stockholders. The terms of the Amended and Restated Advisory Agreement became effective on January 1, 2021.

The Amended and Restated Advisory Agreement amended the Original Advisory Agreement to, among other things, (i) reduce the annual base management fee payable to the Adviser from 1.375% to 1.250% of the Company’s gross assets, (ii) reset the commencement date for the rolling 12-quarter “look-back” provision used to calculate the income incentive fee and incentive fee cap to January 1, 2021 from January 1, 2020 and (iii) describe the fact that the Company may enter into guarantees, sureties and other credit support arrangements with respect to one or more of its investments, including the impact of these arrangements on the income incentive fee cap.

In connection with the Sierra Acquisition, on February 25, 2022, the Company entered into a second amended and restated investment advisory agreement (the “New Barings BDC Advisory Agreement”) with the Adviser, which increased the hurdle rate applicable to the income incentive fee from 2.0% to 2.0625% per quarter (or from 8.0% to 8.25% annualized) and therefore increased the catch-up amount that is used in calculating the income incentive fee to correspond to the increase in the hurdle rate. All other terms and provisions of the Amended and Restated Advisory Agreement between the Company and the Adviser, including with respect to the calculation of the other fees payable to the Adviser, remained unchanged under the New Barings BDC Advisory Agreement.

Investment Advisory Agreement

Pursuant to the New Barings BDC Advisory Agreement, the Adviser manages the Company's day-to-day operations and provides the Company with investment advisory services. Among other things, the Adviser (i) determines the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of the investments made by the Company; (iii) executes, closes, services and monitors the investments that the Company makes; (iv) determines the securities and other assets that the Company will purchase, retain or sell; (v) performs due diligence on prospective portfolio companies and (vi) provides the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.

The New Barings BDC Advisory Agreement provides that, absent fraud, willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, the Adviser, and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser (collectively, the “IA Indemnified Parties”), are entitled to indemnification from the Company for any damages, liabilities, costs, demands, charges, claims and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the IA Indemnified Parties in or by reason of any pending, threatened or completed action, suit,

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of any actions or omissions or otherwise based upon the performance of any of the Adviser’s duties or obligations under the New Barings BDC Advisory Agreement or otherwise as an investment adviser of the Company. The Adviser’s services under the New Barings BDC Advisory Agreement are not exclusive, and the Adviser is generally free to furnish similar services to other entities so long as its performance under the New Barings BDC Advisory Agreement is not adversely affected.

The Adviser has entered into a personnel-sharing arrangement with its affiliate, Baring International Investment Limited (“BIIL”). BIIL is a wholly-owned subsidiary of Baring Asset Management Limited, which in turn is an indirect, wholly-owned subsidiary of the Adviser. Pursuant to this arrangement, certain employees of BIIL may serve as “associated persons” of the Adviser and, in this capacity, subject to the oversight and supervision of the Adviser, may provide research and related services, and discretionary investment management and trading services (including acting as portfolio managers) to the Company on behalf of the Adviser. This arrangement is based on no-action letters of the staff of the Securities and Exchange Commission (the “SEC”) that permit SEC-registered investment advisers to rely on and use the resources of advisory affiliates or "participating affiliates," subject to the supervision of that SEC-registered investment adviser. BIIL is a “participating affiliate” of the Adviser, and the BIIL employees are “associated persons” of the Adviser.

Under the New Barings BDC Advisory Agreement, the Company pays the Adviser (i) a base management fee (the “Base Management Fee”) and (ii) an incentive fee (the “Incentive Fee”) as compensation for the investment advisory and management services it provides the Company thereunder.

Base Management Fee

The Base Management Fee is calculated based on the Company’s gross assets, including the Company’s credit support agreements, assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, at an annual rate of 1.25%. The Base Management Fee is payable quarterly in arrears on a calendar quarter basis. The Base Management Fee will be calculated based on the average value of the Company’s gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter will be appropriately pro-rated.

For the three months ended March 31, 2022, the Base Management Fee determined in accordance with the terms of the New Barings BDC Advisory Agreement was approximately $5.9 million. For the three months ended March 31, 2021, the Base Management Fee determined in accordance with the terms of the Amended and Restated Advisory Agreement was approximately $3.9 million. As of March 31, 2022, the Base Management Fee of $5.9 million for the three months ended March 31, 2022 was unpaid and included in “Base management fees payable” in the accompanying Unaudited Consolidated Balance Sheet. As of December 31, 2021, the Base Management Fee of $5.4 million for the three months ended December 31, 2021 was unpaid and included in “Base management fees payable” in the accompanying Consolidated Balance Sheet.

Incentive Fee

The Incentive Fee consists of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on the Company's income (the “Income-Based Fee”) and a portion is based on the Company's capital gains (the “Capital Gains Fee”), each as described below:

(i) The Income-Based Fee will be determined and paid quarterly in arrears based on the amount by which (x) the aggregate “Pre-Incentive Fee Net Investment Income” (as defined below) in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of the Company's first eleven calendar quarters that commences on or after January 1, 2021) (in either case, the “Trailing Twelve Quarters”) exceeds (y) the Hurdle Amount (as defined below) in respect of the Trailing Twelve Quarters. The Hurdle Amount will be determined on a quarterly basis, and will be calculated by multiplying 2.0625% (8.25% annualized) by the aggregate of the Company's NAV at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including, without limitation, any accrued income that the Company has not yet received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company's operating expenses accrued during the calendar quarter (including, without limitation, the Base Management Fee, administration expenses and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Income-Based Fee and the Capital Gains Fee). For the avoidance of doubt, Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The calculation of the Income-Based Fee for each quarter is as follows:

(A) No Income-Based Fee will be payable to the Adviser in any calendar quarter in which the Company's aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters does not exceed the Hurdle Amount;

(B) 100% of the Company's aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the “Catch-Up Amount”) determined on a quarterly basis by multiplying 2.578125% (10.3125% annualized) by the aggregate of the Company's NAV at the beginning of each applicable calendar quarter comprising the relevant Trailing Twelve Quarters. The Catch-Up Amount is intended to provide the Adviser with an incentive fee of 20% on all of the Company's Pre-Incentive Fee Net Investment Income when the Company's Pre-Incentive Fee Net Investment Income reaches the Catch-Up Amount for the Trailing Twelve Quarters; and

(C) For any quarter in which the Company's aggregate Pre-Incentive Fee Net Investment Income for the Trailing Twelve Quarters exceeds the Catch-Up Amount, the Income-Based Fee shall equal 20% of the amount of the Company's aggregate Pre-Incentive Fee Net Investment Income for such Trailing Twelve Quarters, as the Hurdle Amount and Catch-Up Amount will have been achieved.

Subject to the Incentive Fee Cap described below, the amount of the Income-Based Fee that will be paid to the Adviser for a particular quarter will equal the excess of the aggregate Income-Based Fee so calculated less the aggregate Income-Based Fees that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters.

(ii) The Income-Based Fee is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant Trailing Twelve Quarters less (b) the aggregate Income-Based Fee that were paid to the Adviser in the preceding eleven calendar quarters (or portion thereof) comprising the relevant Trailing Twelve Quarters. For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant Trailing Twelve Quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the Trailing Twelve Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Twelve Quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company will pay no Income-Based Fee to the Adviser in that quarter. If, in any quarter, the Incentive Fee Cap is a positive value but is less than the Income-Based Fee calculated in accordance with paragraph (i) above, the Company will pay the Adviser the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap is equal to or greater than the Income-Based Fee calculated in accordance with paragraph (i) above, the Company will pay the Adviser the Income-Based Fee for such quarter.

“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses on the Company's assets, whether realized or unrealized, in such period and (ii) aggregate capital gains or other gains on the Company's assets (including, for the avoidance of doubt, the value ascribed to any credit support arrangement in the Company's financial statements even if such value is not categorized as a gain therein), whether realized or unrealized, in such period.

(iii) The second part of the Incentive Fee (the “Capital Gains Fee”) will be determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement), commencing with the calendar year ended on December 31, 2018, and is calculated at the end of each applicable year by subtracting (1) the sum of the Company's cumulative aggregate realized capital losses and aggregate unrealized capital depreciation from (2) the Company's cumulative aggregate realized capital gains, in each case calculated from August 2, 2018. If such amount is positive at the end of such year, then the Capital Gains Fee payable for such year is equal to 20% of such amount, less the cumulative aggregate amount of Capital Gains Fees paid in all prior years commencing with the calendar year ended on December 31, 2018. If such amount is negative, then there is no Capital Gains Fee payable for such year. If this Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee.

Under the New Barings BDC Advisory Agreement, the "cumulative aggregate realized capital gains" are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company's portfolio when sold and (b) the accreted or amortized cost basis of such investment.

The cumulative aggregate realized capital losses are calculated as the sum of the differences, if negative, between (a) the net sales price of each investment in the Company's portfolio when sold and (b) the accreted or amortized cost basis of such investment.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company's portfolio as of the applicable Capital Gains Fee calculation date and (b) the accreted or amortized cost basis of such investment.

Under the New Barings BDC Advisory Agreement, the “accreted or amortized cost basis of an investment” shall mean the accreted or amortized cost basis of such investment as reflected in the Company’s financial statements.

For the three months ended March 31, 2022, the Income-Based Fee determined in accordance with the terms of the New Barings BDC Advisory Agreement was $4.8 million. For the three months ended March 31, 2021, the Income-Based Fee determined in accordance with the terms of the Amended and Restated Advisory Agreement was $2.7 million. As of March 31, 2022, the Income-Based Fee of $4.8 million was unpaid and included in “Incentive management fees payable” in the accompanying Unaudited Consolidated Balance Sheet. As of December 31, 2021, the Income-Based Fee of $4.1 million for the three months ended December 31, 2021 was unpaid and included in “Incentive management fees payable” in the accompanying Consolidated Balance Sheet.

The Company did not incur any capital gains fees for either of the three months ended March 31, 2022 or 2021.

Payment of Company Expenses

Under the New Barings BDC Advisory Agreement, all investment professionals of the Adviser and its staff, when and to the extent engaged in providing services required to be provided by the Adviser under the New Barings BDC Advisory Agreement, and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by the Adviser and not by the Company, except that all costs and expenses relating to the Company's operations and transactions, including, without limitation, those items listed in the New Barings BDC Advisory Agreement, will be borne by the Company.

Administration Agreement

Under the terms of the Administration Agreement, the Adviser performs (or oversees, or arranges for, the performance of) the administrative services necessary for the operation of the Company, including, but not limited to, office facilities, equipment, clerical, bookkeeping and record-keeping services at such office facilities and such other services as the Adviser, subject to review by the Board, from time to time, determines to be necessary or useful to perform its obligations under the Administration Agreement. The Adviser also, on behalf of the Company and subject to oversight by the Board, arranges for the services of, and oversees, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, valuation experts, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable.

The Company will reimburse Barings for the costs and expenses incurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to be negotiated and mutually agreed to by the Company and Barings quarterly in arrears. In no event will the agreed-upon quarterly expense amount exceed the amount of expenses that would otherwise be reimbursable by the Company under the Administration Agreement for the applicable quarterly period, and Barings will not be entitled to the recoupment of any amounts in excess of the agreed-upon quarterly expense amount. The costs and expenses incurred by the Adviser on behalf of the Company under the Administration Agreement include, but are not limited to:

•the allocable portion of the Adviser’s rent for the Company’s Chief Financial Officer and the Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the usage thereof by such personnel in connection with their performance of administrative services under the Administration Agreement;

•the allocable portion of the salaries, bonuses, benefits and expenses of the Company’s Chief Financial Officer and Chief Compliance Officer and their respective staffs, which is based upon the allocable portion of the time spent by such personnel in connection with performing administrative services for the Company under the Administration Agreement;

•the actual cost of goods and services used for the Company and obtained by the Adviser from entities not affiliated with the Company, which is reasonably allocated to the Company on the basis of assets, revenues, time records or other methods conforming with generally accepted accounting principles;

•all fees, costs and expenses associated with the engagement of a sub-administrator, if any; and

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

•costs associated with (a) the monitoring and preparation of regulatory reporting, including filings with the SEC and tax reporting, (b) the coordination and oversight of service provider activities and the direct cost of such contractual matters related thereto and (c) the preparation of all financial statements and the coordination and oversight of audits, regulatory inquiries, certifications and sub-certifications.

For the three months ended March 31, 2022 and March 31, 2021, the Company incurred and was invoiced by the Adviser for expenses of approximately $1.0 million and $0.5 million under the terms of the Administration Agreement, which amounts are included in “General and administrative expenses” in the accompanying Unaudited Consolidated Statements of Operations. As of March 31, 2022, the administrative expenses of $1.0 million for the three months ended March 31, 2022 were unpaid and included in “Administrative fees payable” in the accompanying Unaudited Consolidated Balance Sheet. As of December 31, 2021, the administrative expenses of $0.8 million incurred for the three months ended December 31, 2021 were unpaid and included in “Administrative fees payable” in the accompanying Consolidated Balance Sheet.

MVC Credit Support Agreement

In connection with the MVC Acquisition, on December 23, 2020, promptly following the closing of the Company’s merger with MVC, the Company entered into a Credit Support Agreement (the “MVC Credit Support Agreement”) with the Adviser, pursuant to which the Adviser has agreed to provide credit support to the Company in the amount of up to $23.0 million relating to the net cumulative realized and unrealized losses on the acquired MVC investment portfolio over a 10-year period. A summary of the material terms of the MVC Credit Support Agreement are as follows:

•The MVC Credit Support Agreement covers all of the investments in the MVC Reference Portfolio.

•The Adviser has an obligation to provide credit support to the Company in an amount equal to the excess of (1) the aggregate realized and unrealized losses on the MVC Reference Portfolio over (2) the aggregate realized and unrealized gains on the MVC Reference Portfolio, in each case from the date of the closing of the Company’s merger with MVC through the MVC Designated Settlement Date (up to a $23.0 million cap) (such amount, the “MVC Covered Losses”). For purposes of the MVC Credit Support Agreement, “MVC Designated Settlement Date” means the earlier of (1) January 1, 2031 and (2) the date on which the entire MVC Reference Portfolio has been realized or written off. No credit support is required to be made by the Adviser to the Company under the MVC Credit Support Agreement if the aggregate realized and unrealized gains on the MVC Reference Portfolio exceed realized and unrealized losses of the MVC Reference Portfolio on the MVC Designated Settlement Date.

•The Adviser will settle any credit support obligation under the MVC Credit Support Agreement as follows. If the MVC Covered Losses are greater than $0.00, then, in satisfaction of the Adviser’s obligation set forth in the MVC Credit Support Agreement, the Adviser will irrevocably waive during the MVC Waiver Period (as defined below) (1) the incentive fees payable under the New Barings BDC Advisory Agreement (including any incentive fee calculated on an annual basis during the MVC Waiver Period), and (2) in the event that MVC Covered Losses exceed such incentive fee, the base management fees payable under the New Barings BDC Advisory Agreement. The “MVC Waiver Period” means the four quarterly measurement periods immediately following the quarter in which the MVC Designated Settlement Date occurs. If the MVC Covered Losses exceed the aggregate amount of incentive fees and base management fees waived by the Adviser during the MVC Waiver Period, then, on the date on which the last incentive fee or base management fee payment would otherwise be due during the MVC Waiver Period, the Adviser shall make a cash payment to the Company equal to the positive difference between the MVC Covered Losses and the aggregate amount of incentive fees and base management fees previously waived by the Adviser during the MVC Waiver Period.

•The MVC Credit Support Agreement and the rights of the Company thereunder shall automatically terminate if the Adviser (or an affiliate of the Adviser) ceases to serve as the investment adviser to the Company or any successor thereto, other than as a result of the voluntary termination by the Adviser of its investment advisory agreement with the Company. In the event of such a voluntary termination by the Adviser of the then-current investment advisory agreement with the Company, the Adviser will remain obligated to provide the credit support contemplated by the MVC Credit Support Agreement. In the event of a non-voluntary termination of the advisory agreement or its expiration (due to non-renewal by the Board), the Adviser will have no obligations under the MVC Credit Support Agreement.

The MVC Credit Support Agreement is intended to give stockholders of the combined company following the MVC Acquisition downside protection from net cumulative realized and unrealized losses on the acquired MVC portfolio and insulate the combined company’s stockholders from potential value volatility and losses in MVC’s portfolio following the closing of the MVC Acquisition. There is no fee or other payment by the Company to the Adviser or any of its affiliates in connection with

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

the MVC Credit Support Agreement. Any cash payment from the Adviser to the Company under the MVC Credit Support Agreement will be excluded from the Company’s incentive fee calculations under the New Barings BDC Advisory Agreement.

When the Company and the Adviser entered into the MVC Credit Support Agreement, it was accounted for as a deemed contribution from the Adviser and was included in "Additional paid-in capital" in the accompanying Unaudited Consolidated Balance Sheet and Consolidated Balance Sheet. In addition, the MVC Credit Support Agreement is accounted for as a derivative in accordance with ASC 815, Derivatives and Hedging, and is included in “Credit support agreements” in the accompanying Unaudited Consolidated Balance Sheet and Consolidated Balance Sheet.

Sierra Credit Support Agreement

In connection with the Sierra Acquisition, on February 25, 2022, promptly following the closing of the Company’s merger with Sierra, the Company entered into a Credit Support Agreement (the “Sierra Credit Support Agreement”) with the Adviser, pursuant to which the Adviser has agreed to provide credit support to the Company in the amount of up to $100.0 million relating to the net cumulative realized and unrealized losses on the acquired Sierra investment portfolio over a 10-year period. A summary of the material terms of the Sierra Credit Support Agreement are as follows:

•The Sierra Credit Support Agreement covers all of the investments in the Sierra Reference Portfolio.

•The Adviser has an obligation to provide credit support to the Company in an amount equal to the excess of (1) the aggregate realized and unrealized losses on the Sierra Reference Portfolio less (2) the aggregate realized and unrealized gains on the Sierra Reference Portfolio, in each case from the date of the closing of the Company’s merger with Sierra through the Designated Settlement Date (up to a $100.0 million cap) (such amount, the “Covered Losses”). For purposes of the Sierra Credit Support Agreement, “Designated Settlement Date” means the earlier of (1) April 1, 2032 and (2) the date on which the entire Sierra Reference Portfolio has been realized or written off. No credit support is required to be made by the Adviser to the Company under the Sierra Credit Support Agreement if the aggregate realized and unrealized gains on the Sierra Reference Portfolio exceed realized and unrealized losses of the Sierra Reference Portfolio on the Designated Settlement Date.

•The Adviser will settle any credit support obligation under the Sierra Credit Support Agreement as follows. If the Covered Losses are greater than $0.00, then, in satisfaction of the Adviser’s obligation set forth in the Sierra Credit Support Agreement, the Adviser will irrevocably waive during the Waiver Period (as defined below) (1) the incentive fees payable under the New Barings BDC Advisory Agreement (including any incentive fee calculated on an annual basis during the Waiver Period), and (2) in the event that Covered Losses exceed such incentive fee, the base management fees payable under the New Barings BDC Advisory Agreement. The “Waiver Period” means the four quarterly measurement periods immediately following the quarter in which the Designated Settlement Date occurs. If the Covered Losses exceed the aggregate amount of incentive fees and base management fees waived by the Adviser during the Waiver Period, then, on the date on which the last incentive fee or base management fee payment would otherwise be due during the Waiver Period, the Adviser shall make a cash payment to the Company equal to the positive difference between the Covered Losses and the aggregate amount of incentive fees and base management fees previously waived by the Adviser during the Waiver Period.

•The Sierra Credit Support Agreement and the rights of the Company thereunder shall automatically terminate if the Adviser (or an affiliate of the Adviser) ceases to serve as the investment adviser to the Company or any successor thereto, other than as a result of the voluntary termination by the Adviser of its investment advisory agreement with the Company. In the event of such a voluntary termination by the Adviser of the then-current investment advisory agreement with the Company, the Adviser will remain obligated to provide the credit support contemplated by the Sierra Credit Support Agreement. In the event of a non-voluntary termination of the advisory agreement or its expiration (due to non-renewal by the Board), the Adviser will have no obligations under the Sierra Credit Support Agreement.

The Sierra Credit Support Agreement is intended to give stockholders of the combined company following the Sierra Acquisition downside protection from net cumulative realized and unrealized losses on the acquired Sierra portfolio and insulate the combined company’s stockholders from potential value volatility and losses in Sierra’s portfolio following the closing of the Company’s merger with Sierra. There is no fee or other payment by the Company to the Adviser or any of its affiliates in connection with the Sierra Credit Support Agreement. Any cash payment from the Adviser to the Company under the Sierra Credit Support Agreement will be excluded from the combined company’s incentive fee calculations under the New Barings BDC Advisory Agreement.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

When the Company and the Adviser entered into the Sierra Credit Support Agreement, it was accounted for as a deemed contribution from the Adviser and was included in "Additional paid-in capital" in the accompanying Unaudited Consolidated Balance Sheet. In addition, the Sierra Credit Support Agreement is accounted for as a derivative in accordance with ASC 815, Derivatives and Hedging, and is included in "Credit support agreement" in the accompanying Unaudited Consolidated Balance Sheet.

  1. INVESTMENTS

Portfolio Composition

The Company invests predominately in senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries, as well as syndicated senior secured loans, structured product investments, bonds and other fixed income securities. Structured product investments include collateralized loan obligations and asset-backed securities. The Adviser's existing SEC co-investment exemptive relief under the 1940 Act permits the Company and the Adviser's affiliated private funds and SEC regulated funds to co-invest in loans originated by the Adviser, which allows the Adviser to efficiently implement its senior secured private debt investment strategy for the Company.

The cost basis of the Company's debt investments includes any unamortized purchased premium or discount, unamortized loan origination fees and PIK interest, if any. Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments and net assets, are shown in the following tables:

($ in thousands) Cost Percentage of<br>Total Portfolio Fair Value Percentage of<br>Total Portfolio Percentage of<br>Total <br>Net Assets
March 31, 2022:
Senior debt and 1st lien notes $ 1,560,223 65 % $ 1,555,746 65 % 118 %
Subordinated debt and 2nd lien notes 346,381 14 317,643 13 24
Structured products 84,056 4 82,014 3 6
Equity shares 170,691 7 219,466 9 17
Equity warrants 174 — 156 — —
Investment in joint ventures / PE fund 230,076 10 228,400 10 17
$ 2,391,601 100 % $ 2,403,425 100 % 182 %
December 31, 2021:
Senior debt and 1st lien notes $ 1,217,899 68 % $ 1,221,598 68 % 165 %
Subordinated debt and 2nd lien notes 253,551 14 240,037 13 32
Structured products 37,055 2 40,271 2 6
Equity shares 145,791 8 154,477 9 21
Equity warrants 1,111 — 1,107 — —
Investment in joint ventures / PE fund 132,417 8 143,104 8 19
$ 1,787,824 100 % $ 1,800,594 100 % 243 %

During the three months ended March 31, 2022, the Company made 22 new investments totaling $229.3 million, purchased $442.2 million of investments as part of the Sierra Acquisition, made investments in existing portfolio companies totaling $89.3 million and made additional investments in joint venture equity portfolio companies totaling $11.7 million. During the three months ended March 31, 2021, the Company made 18 new investments totaling $172.2 million, made investments in existing portfolio companies totaling $73.2 million, made one new joint venture equity investment totaling $4.5 million and made additional investments in existing joint venture equity portfolio companies totaling $25.0 million.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Industry Composition

The industry composition of investments at fair value at March 31, 2022 and December 31, 2021, excluding short-term investments, was as follows:

($ in thousands) March 31, 2022 December 31, 2021
Aerospace and Defense $ 154,797 6.4 % $ 91,129 5.1 %
Automotive 77,203 3.2 55,875 3.1
Banking, Finance, Insurance and Real Estate 243,595 10.1 208,397 11.6
Beverage, Food and Tobacco 38,294 1.6 38,985 2.2
Capital Equipment 41,492 1.7 42,916 2.4
Chemicals, Plastics, and Rubber 49,249 2.1 32,234 1.8
Construction and Building 64,628 2.7 62,083 3.4
Consumer goods: Durable 77,265 3.2 47,316 2.6
Consumer goods: Non-durable 28,497 1.2 28,306 1.6
Containers, Packaging and Glass 30,662 1.3 10,218 0.6
Energy: Electricity 7,270 0.3 12,190 0.7
Energy: Oil and Gas 6,674 0.3 5,774 0.3
Environmental Industries 8,012 0.3 8,081 0.4
Healthcare and Pharmaceuticals 186,429 7.8 134,286 7.5
High Tech Industries 248,659 10.3 139,590 7.7
Hotel, Gaming and Leisure 58,384 2.4 27,553 1.5
Investment Funds and Vehicles 228,400 9.5 143,104 7.9
Media: Advertising, Printing and Publishing 45,096 1.9 46,414 2.6
Media: Broadcasting and Subscription 7,429 0.3 7,441 0.4
Media: Diversified and Production 48,175 2.0 52,887 2.9
Metals and Mining 14,731 0.6 10,684 0.6
Retail 1,998 0.1 — —
Services: Business 419,154 17.4 342,758 19.0
Services: Consumer 82,068 3.4 65,801 3.7
Structured Products 82,014 3.4 24,662 1.4
Telecommunications 34,725 1.5 45,182 2.5
Transportation: Cargo 88,033 3.7 86,964 4.8
Transportation: Consumer 11,917 0.5 12,231 0.7
Utilities: Electric 12,835 0.5 12,857 0.7
Utilities: Oil and Gas 4,707 0.2 4,677 0.3
Wholesale 1,033 — — —
Total $ 2,403,425 100.0 % $ 1,800,594 100.0 %

Jocassee Partners LLC

On May 8, 2019, the Company entered into an agreement with South Carolina Retirement Systems Group Trust ("SCRS") to create and co-manage Jocassee Partners LLC ("Jocassee"), a joint venture, which invests in a highly diversified asset mix including senior secured, middle-market, private debt investments, syndicated senior secured loans and structured product investments. The Company and SCRS committed to initially provide $50.0 million and $500.0 million, respectively, of equity capital to Jocassee. Equity contributions will be called from each member on a pro-rata basis, based on their equity commitments.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The total value of Jocassee’s investment portfolio was $1,366.6 million as of March 31, 2022, as compared to $1,258.2 million as of December 31, 2021. As of March 31, 2022, Jocassee’s investments had an aggregate cost of $1,376.0 million, as compared to $1,242.2 million as of December 31, 2021. As of March 31, 2022 and December 31, 2021, the weighted average yield on the principal amount of Jocassee’s outstanding debt investments was approximately 5.4% and 5.3%, respectively. As of March 31, 2022 and December 31, 2021, the Jocassee investment portfolio consisted of the following investments:

($ in thousands) Cost Percentage of<br>Total<br>Portfolio Fair Value Percentage of<br>Total<br>Portfolio
March 31, 2022:
Senior debt and 1st lien notes $ 1,213,599 88 % $ 1,201,499 88 %
Subordinated debt and 2nd lien notes 22,657 2 % 22,709 2 %
Structured products 4,041 — % 4,405 — %
Equity shares 5,031 — % 3,487 — %
Equity warrants 31 — % 25 — %
Investment in joint ventures 117,952 9 % 121,813 9 %
Short-term investments 12,689 1 % 12,689 1 %
$ 1,376,000 100 % $ 1,366,627 100 %
December 31, 2021:
Senior debt and 1st lien notes $ 1,084,502 87 % $ 1,085,172 86 %
Subordinated debt and 2nd lien notes 23,607 2 24,011 2
Structured products 4,569 — 5,410 1
Equity shares 5,448 1 3,887 —
Equity warrants 31 — 75 —
Investment in joint ventures 111,490 9 127,092 10
Short-term investments 12,572 1 12,572 1
$ 1,242,219 100 % $ 1,258,219 100 %

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The industry composition of Jocassee’s investments at fair value at March 31, 2022 and December 31, 2021, excluding short-term investments, was as follows:

($ in thousands) March 31, 2022 December 31, 2021
Aerospace and Defense $ 71,608 5.3 % $ 71,857 5.8 %
Automotive 26,133 1.9 18,626 1.5
Banking, Finance, Insurance and Real Estate 110,522 8.2 109,961 8.8
Beverage, Food and Tobacco 30,457 2.3 30,352 2.4
Capital Equipment 27,322 2.0 17,006 1.4
Chemicals, Plastics, and Rubber 26,593 2.0 24,665 2.0
Construction and Building 14,293 1.1 14,506 1.2
Consumer goods: Durable 18,919 1.4 10,294 0.8
Consumer goods: Non-durable 23,635 1.7 23,886 1.9
Containers, Packaging and Glass 26,847 2.0 25,277 2.0
Energy: Electricity 15,450 1.1 10,571 0.8
Energy: Oil and Gas 4,803 0.4 5,091 0.4
Environmental Industries 7,453 0.6 7,563 0.6
Forest Products & Paper 450 — 475 —
Healthcare and Pharmaceuticals 143,056 10.6 128,495 10.3
High Tech Industries 172,972 12.8 171,960 13.8
Hotel, Gaming and Leisure 31,228 2.3 35,383 2.8
Investment Funds and Vehicles 121,813 9.0 127,092 10.2
Media: Advertising, Printing and Publishing 21,336 1.6 18,423 1.5
Media: Broadcasting and Subscription 36,877 2.7 37,840 3.0
Media: Diversified and Production 29,558 2.2 21,059 1.7
Metals and Mining 5,761 0.4 5,792 0.5
Retail 14,759 1.1 14,420 1.2
Services: Business 192,948 14.2 151,723 12.2
Services: Consumer 54,858 4.0 55,156 4.4
Structured Product 4,405 0.3 5,409 0.4
Telecommunications 43,168 3.2 36,036 2.9
Transportation: Cargo 54,161 4.0 49,103 3.9
Transportation: Consumer 12,390 0.9 6,546 0.5
Utilities: Electric 3,248 0.2 3,265 0.3
Utilities: Oil and Gas 6,915 0.5 6,870 0.6
Wholesale — — 945 0.1
Total $ 1,353,938 100.0 % $ 1,245,647 100.0 %

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The geographic composition of Jocassee’s investments at fair value at March 31, 2022 and December 31, 2021, excluding short-term investments, was as follows:

($ in thousands) March 31, 2022 December 31, 2021
Australia $ 37,405 2.8 % $ 16,509 1.3 %
Austria 7,054 0.5 1,115 0.1
Belgium 17,234 1.3 14,814 1.2
Canada 8,413 0.6 8,507 0.7
Denmark 1,105 0.1 6,960 0.6
Finland 2,220 0.2 47,992 3.9
France 130,483 9.6 3,391 0.3
Germany 43,386 3.2 6,357 0.5
Hong Kong 4,779 0.4 2,272 0.2
Ireland 4,045 0.3 123,816 9.9
Italy — — 113,896 9.1
Luxembourg 1,198 0.1 4,766 0.4
Netherlands 37,569 2.8 3,744 0.3
Panama 956 0.1 — —
Singapore 4,936 0.3 — —
Spain 4,632 0.3 1,225 0.1
Sweden 5,154 0.4 32,150 2.6
Switzerland 6,826 0.4 965 0.1
United Kingdom 126,637 9.4 5,305 0.4
USA 909,906 67.2 851,863 68.4
Total $ 1,353,938 100 % $ 1,245,647 100 %

Jocassee’s subscription facility with Bank of America N.A., which is non-recourse to the Company, had approximately $129.3 million and $176.3 million outstanding as of March 31, 2022 and December 31, 2021, respectively. Jocassee’s credit facility with Citibank, N.A., which is non-recourse to the Company, had approximately $347.9 million and $342.8 million outstanding as of March 31, 2022 and December 31, 2021, respectively. Jocassee’s term debt securitization, which is non-recourse to the Company, had approximately $323.1 million outstanding as of both March 31, 2022 and December 31, 2021.

The Company may sell portions of its investments via assignment to Jocassee. Since inception, as of March 31, 2022 and December 31, 2021, the Company had sold $830.8 million and $698.5 million, respectively, of its investments to Jocassee. For the three months ended March 31, 2022 and March 31, 2021, the Company realized a loss on the sales of its investments to Jocassee of $0.2 million and $0.3 million, respectively. As of March 31, 2022 and December 31, 2021, the Company had $180.0 million and $216.9 million, respectively, in unsettled receivables due from Jocassee that were included in "Receivable from unsettled transactions" in the accompanying Unaudited and Audited Consolidated Balance Sheets. The sale of the investments met the criteria set forth in ASC 860, Transfers and Servicing for treatment as a sale and satisfies the following conditions:

•Assigned investments have been isolated from the Company, and put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership;

•each participant has the right to pledge or exchange the assigned investments it received, and no condition both constrains the participant from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the Company; and

•the Company, its consolidated affiliates or its agents do not maintain effective control over the assigned investments through either: (i) an agreement that entitles and/or obligates the Company to repurchase or redeem the assets before maturity, or (ii) the ability to unilaterally cause the holder to return specific assets, other than through a cleanup call.

The Company has determined that Jocassee is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Jocassee as it is not a substantially wholly owned investment company subsidiary. In addition, Jocassee is not an operating company and the Company does not control Jocassee due to the allocation of voting rights among Jocassee members.

As of March 31, 2022 and December 31, 2021, Jocassee had the following contributed capital and unfunded commitments from its members:

($ in thousands) As of<br><br>March 31, 2022 As of December 31, 2021
Total contributed capital by Barings BDC, Inc. $ 35,000 $ 30,000
Total contributed capital by all members $ 385,000 $ 330,000
Total unfunded commitments by Barings BDC, Inc. $ 15,000 $ 20,000
Total unfunded commitments by all members $ 165,000 $ 220,000

Thompson Rivers LLC

On April 28, 2020, Thompson Rivers LLC (“Thompson Rivers”) was formed as a Delaware limited liability company. On May 13, 2020, the Company entered into a limited liability company agreement governing Thompson Rivers. Under Thompson Rivers’ current operating agreement, as amended to date, the Company has a capital commitment of $75.0 million of equity capital to Thompson Rivers, all of which has been funded as of March 31, 2022. As of March 31, 2022, aggregate commitments to Thompson Rivers by the Company and the other members under the current operating agreement total $450.0 million, all of which has been funded.

For the three months ended March 31, 2022, Thompson Rivers declared $20.0 million in dividends, of which $3.2 million was recognized as dividend income in the Company’s Unaudited Consolidated Statement of Operations.

As of March 31, 2022, Thompson Rivers had $2.7 billion in Ginnie Mae early buyout loans and $117.4 million in cash. As of December 31, 2021, Thompson Rivers had $3.1 billion in Ginnie Mae early buyout loans and $220.6 million in cash. As of March 31, 2022, Thompson Rivers had 14,270 outstanding loans with an average unpaid balance of $0.2 million and weighted average coupon of 3.9%. As of December 31, 2021, Thompson Rivers had 15,617 outstanding loans with an average unpaid balance of $0.2 million and weighted average coupon of 4.0%.

As of March 31, 2022 and December 31, 2021, the Thompson Rivers investment portfolio consisted of the following investments:

($ in thousands) Cost Percentage of<br>Total<br>Portfolio Fair Value Percentage of<br>Total<br>Portfolio
March 31, 2022:
Federal Housing Administration (“FHA”) loans $ 2,399,678 90 % $ 2,381,614 90 %
Veterans Affairs (“VA”) loans 277,194 10 % 271,393 10 %
$ 2,676,872 100 % $ 2,653,007 100 %
December 31, 2021:
Federal Housing Administration (“FHA”) loans $ 2,799,869 93 % $ 2,839,495 93 %
Veterans Affairs (“VA”) loans 224,660 7 % 223,540 7 %
$ 3,024,528 100 % $ 3,063,036 100 %

Thompson Rivers’ repurchase agreement with JPMorgan Chase Bank, which is non-recourse to the Company, had approximately $572.4 million and $694.8 million outstanding as of March 31, 2022 and December 31, 2021, respectively. Thompson Rivers’ repurchase agreement with Bank of America N.A., which is non-recourse to the Company, had approximately $1,087.3 million and $1,245.2 million outstanding as of March 31, 2022 and December 31, 2021, respectively. Thompson Rivers’ repurchase agreement with Barclays Bank, which is non-recourse to the Company, had approximately $749.7 million and $933.1 million outstanding as of March 31, 2022 and December 31, 2021, respectively.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The Company has determined that Thompson Rivers is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Thompson Rivers as it is not a substantially wholly owned investment company subsidiary. In addition, Thompson Rivers is not an operating company and the Company does not control Thompson Rivers due to the allocation of voting rights among Thompson Rivers members.

As of March 31, 2022 and December 31, 2021, Thompson Rivers had the following contributed capital and unfunded commitments from its members:

($ in thousands) As of<br><br>March 31, 2022 As of December 31, 2021
Total contributed capital by Barings BDC, Inc.(1) $ 79,411 $ 79,414
Total contributed capital by all members $ 482,083 (2) $ 482,120 (3)
Total unfunded commitments by Barings BDC, Inc. $ — $ —
Total unfunded commitments by all members $ — $ —

(1)Includes $4.4 million of dividend re-investments.

(2)Includes dividend re-investments of $32.1 million and $162.1 million of total contributed capital by related parties.

(3)Includes dividend re-investments of $32.1 million and $162.3 million of total contributed capital by related parties.

Waccamaw River LLC

On January 4, 2021, Waccamaw River LLC (“Waccamaw River”) was formed as a Delaware limited liability company. On February 8, 2021, the Company entered into a limited liability company agreement governing Waccamaw River. Under Waccamaw River’s current operating agreement, as amended to date, the Company has a capital commitment of $25.0 million of equity capital to Waccamaw River, of which approximately $20.4 million (including approximately $5.3 million of recallable return of capital) has been funded as of March 31, 2022. As of March 31, 2022, aggregate commitments to Waccamaw River by the Company and the other members under the current operating agreement total $125.0 million, of which $102.1 million (including $14.0 million of recallable return of capital) has been funded.

On March 31, 2022, Waccamaw River declared $1.5 million in dividends, of which $0.3 million was recognized as dividend income in the Company’s Unaudited Consolidated Statement of Operations.

As of March 31, 2022, Waccamaw River had $89.7 million in unsecured consumer loans and $8.5 million in cash. As of December 31, 2021, Waccamaw River had $60.8 million in unsecured consumer loans and $4.9 million in cash. As of March 31, 2022, Waccamaw River had 7,964 outstanding loans with an average loan size of $11,522, remaining average life to maturity of 45.9 months and weighted average interest rate of 10.9%. As of December 31, 2021, Waccamaw River had 5,500 outstanding loans with an average loan size of $11,280, remaining average life to maturity of 46.5 months and weighted average interest rate of 10.9%.

The Company has determined that Waccamaw River is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Waccamaw River as it is not a substantially wholly owned investment company subsidiary. In addition, Waccamaw River is not an operating company and the Company does not control Waccamaw River due to the allocation of voting rights among Waccamaw River members.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

As of March 31, 2022 and December 31, 2021, Waccamaw River had the following contributed capital and unfunded commitments from its members:

($ in thousands) As of<br><br>March 31, 2022 As of<br><br>December 31, 2021
Total contributed capital by Barings BDC, Inc. $ 25,700 $ 19,000
Total contributed capital by all members $ 116,120 (1) $ 82,620 (4)
Total return of capital (recallable) by Barings BDC, Inc. $ (5,280) $ (5,280)
Total return of capital (recallable) by all members(2) $ (14,020) $ (14,020)
Total unfunded commitments by Barings BDC, Inc. $ 4,580 $ 11,280
Total unfunded commitments by all members $ 22,900 (3) $ 56,400 (5)

(1)Includes $68.3 million of total contributed capital by related parties.

(2)Includes ($7.0) million of total return of capital (recallable) by related parties.

(3)Includes $13.7 million of unfunded commitments by related parties.

(4)Includes $48.2 million of total contributed capital by related parties.

(5)Includes $33.8 million of unfunded commitments by related parties.

Sierra Senior Loan Strategy JV I LLC

On February 25, 2022, as part of the Sierra Acquisition, the Company purchased its interest in Sierra Senior Loan Strategy JV I LLC (“Sierra JV”). The Company and MassMutual Ascend Life Insurance Company (“MMALIC”), a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company, are the members of Sierra JV, a joint venture formed as a Delaware limited liability company and commenced operations on July 15, 2015. Sierra JV’s investment objective is to generate current income and capital appreciation by investing primarily in the debt of privately-held middle market companies with a focus on senior secured first lien term loans. The members of Sierra JV make capital contributions as investments by Sierra JV are completed, and all portfolio and other material decisions regarding Sierra JV must be submitted to Sierra JV’s board of managers, which is comprised of four members, two of whom are selected by the Company and the other two are selected by MMALIC. Approval of Sierra JV’s board of managers requires the unanimous approval of a quorum of the board of managers, with a quorum consisting of equal representation of members appointed by each of the Company and MMALIC.

As of March 31, 2022, Sierra JV had total capital commitments of $124.5 million with the Company committing $110.1 million and MMALIC committing $14.5 million. The Company had fully funded its $110.1 million commitment and total commitments of $124.5 million were funded as of March 31, 2022.

The Company has determined that Sierra JV is an investment company under ASC, Topic 946, Financial Services - Investment Companies, however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a substantially wholly owned investment company subsidiary, which is an extension of the operations of the Company, or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in Sierra JV as it is not a substantially wholly owned investment company subsidiary. In addition, Sierra JV is not an operating company and the Company does not control Sierra JV due to the allocation of voting rights among Sierra JV members.

As of March 31, 2022, the total cost and value of Sierra JV’s investment portfolio was $158.8 million and $152.0 million, respectively. As of March 31, 2022, the weighted average yield on the principal amount of Sierra JV’s outstanding debt investments was approximately 5.8%. As of March 31, 2022, the Sierra JV investment portfolio consisted of the following investments:

($ in thousands) Cost Percentage of<br>Total<br>Portfolio Fair Value Percentage of<br>Total<br>Portfolio
March 31, 2022:
Senior debt and 1st lien notes $ 158,810 100 % $ 152,035 100 %
$ 158,810 100 % $ 152,035 100 %

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The industry composition of Sierra JV’s investments at fair value at March 31, 2022, excluding short-term investments, was as follows:

($ in thousands) March 31, 2022
Automotive 6,069 4.0 %
Banking, Finance, Insurance and Real Estate 1,677 1.1
Beverage, Food and Tobacco 4,481 2.9
Capital Equipment 9,413 6.2
Chemicals, Plastics, and Rubber 9,098 6.0
Construction and Building 1,883 1.2
Consumer goods: Durable 7,904 5.2
Consumer goods: Non-durable 43 —
Containers, Packaging and Glass 1,730 1.1
Environmental Industries 8,638 5.7
Forest Products & Paper 2,535 1.7
Healthcare and Pharmaceuticals 15,848 10.4
High Tech Industries 18,575 12.2
Media: Advertising, Printing and Publishing 9,805 6.4
Media: Diversified and Production 9,016 5.9
Retail 12,183 8.0
Services: Business 12,891 8.5
Services: Consumer 8,637 5.7
Transportation: Cargo 6,326 4.2
Transportation: Consumer 5,283 3.5
Total $ 152,035 100.0 %

Sierra JV’s revolving credit facility with Wells Fargo Bank, N.A., which is non-recourse to the Company, had $75.0 million outstanding as of March 31, 2022.

Eclipse Business Capital Holdings LLC

On July 8, 2021, the Company made an equity investment in Eclipse Business Capital Holdings LLC (“Eclipse”) of $89.8 million, a second lien senior secured loan of $4.5 million and unfunded revolver of $13.6 million, alongside other related party affiliates. As of March 31, 2022 and December 31, 2021, $2.7 million and $1.8 million, respectively, of the revolver was funded. Eclipse conducts its business through Eclipse Business Capital LLC. Eclipse is one of the country’s leading independent asset-based lending (“ABL”) platforms that provides financing to middle-market borrowers in the U.S. and Canada. Eclipse provides revolving lines of credit and term loans ranging in size from $10 – $125 million that are secured by collateral such as accounts receivable, inventory, equipment, or real estate. Eclipse lends to both privately-owned and publicly-traded companies across a range of industries, including manufacturing, retail, automotive, oil & gas, services, distribution, and consumer products. The addition of Eclipse to the portfolio allows the Company to participate in an asset class and commercial finance operations that offer differentiated income returns as compared to directly originated loans. Eclipse is led by a seasoned team of ABL experts.

The Company has determined that Eclipse is not an investment company under ASC, Topic 946, Financial Services - Investment Companies. Under ASC 810-10-15-12(d), an investment company generally does not consolidate an investee that is not an investment company other than a controlled operating company whose business consists of providing services to the company. Thus, the Company is not required to consolidate Eclipse because it does not provide services to the Company. Instead the Company accounts for its investment in Eclipse in accordance with ASC 946-320, presented as a single investment measured at fair value.

Valuation of Investments

The Company conducts the valuation of its investments, upon which its net asset value is primarily based, in accordance with its valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (at least quarterly) basis in accordance with the 1940 Act and FASB ASC Topic

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

820, Fair Value Measurements and Disclosures ("ASC Topic 820"). The Company's current valuation policy and processes were established by the Adviser and have been approved by the Board.

Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For the Company’s portfolio securities, fair value is generally the amount that the Company might reasonably expect to receive upon the current sale of the security. The fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. If no market for the security exists or if the Company does not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market.

Under ASC Topic 820, there are three levels of valuation inputs, as follows:

Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.

A financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

The Company’s investment portfolio includes certain debt and equity instruments of privately held companies for which quoted prices or other observable inputs falling within the categories of Level 1 and Level 2 are generally not available. In such cases, the Company determines the fair value of its investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs exist, and if so, the Company assesses the appropriateness of the use of these third-party quotes in determining fair value based on (i) its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with the underlying performance of the portfolio company.

There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of the Company’s Level 3 investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

Investment Valuation Process

The Adviser has established a pricing committee that is, subject to the oversight of the Board, responsible for the approval, implementation and oversight of the processes and methodologies that relate to the pricing and valuation of assets held by the Company. The Adviser uses independent third-party providers to price the portfolio, but in the event an acceptable price cannot be obtained from an approved external source, the Adviser will utilize alternative methods in accordance with internal pricing procedures established by the Adviser's pricing committee.

At least annually, the Adviser conducts reviews of the primary pricing vendors to validate that the inputs used in the vendors’ pricing process are deemed to be market observable. While the Adviser is not provided access to proprietary models of the vendors, the reviews have included on-site walkthroughs of the pricing process, methodologies and control procedures for each asset class and level for which prices are provided. The review also includes an examination of the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels and various durations, a process the Adviser continues to perform annually. In addition, the pricing vendors have an established challenge process in place for all security valuations, which facilitates identification and resolution of prices that fall outside expected ranges. The Adviser believes that the prices received from the pricing vendors are representative of prices that would be received to sell the assets at the measurement date (i.e., exit prices).

The Company's money market fund investments are generally valued using Level 1 inputs and its equity investments listed on an exchange or on the NASDAQ National Market System are valued using Level 1 inputs, using the last quoted sale price of that day. The Company’s syndicated senior secured loans and structured products are generally valued using Level 2 inputs, which are generally valued at the bid quotation obtained from dealers in loans by an independent pricing service. The Company's middle-market, private debt and equity investments are generally valued using Level 3 inputs.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Independent Valuation

The fair value of loans and equity investments that are not syndicated or for which market quotations are not readily available, including middle-market loans, are generally submitted to independent providers to perform an independent valuation on those loans and equity investments as of the end of each quarter. Such loans and equity investments are initially held at cost, as that is a reasonable approximation of fair value on the acquisition date, and monitored for material changes that could affect the valuation (for example, changes in interest rates or the credit quality of the borrower). At the quarter end following the initial acquisition, such loans and equity investments are generally sent to a valuation provider which will determine the fair value of each investment. The independent valuation providers apply various methods (synthetic rating analysis, discounting cash flows, and re-underwriting analysis) to establish the rate of return a market participant would require (the “discount rate”) as of the valuation date, given market conditions, prevailing lending standards and the perceived credit quality of the issuer. Future expected cash flows for each investment are discounted back to present value using these discount rates in the discounted cash flow analysis. A range of values will be provided by the valuation provider and the Adviser will determine the point within that range that it will use in making valuation recommendations to the Board, and will report to the Board on its rationale for each such determination. The Adviser uses its internal valuation model as a comparison point to validate the price range provided by the valuation provider and, where applicable, in determining the point within that range that it will use in making valuation recommendations to the Board. If the Adviser’s pricing committee disagrees with the price range provided, it may make a fair value recommendation to the Board that is outside of the range provided by the independent valuation provider, and will notify the Board of any such override and the reasons therefore. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in the stockholders' best interests, to request an independent valuation firm to perform an independent valuation on certain investments. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio. Pursuant to these procedures, the Board determines in good faith whether the Company's investments were valued at fair value in accordance with the Company's valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, the Company’s Audit Committee and the independent valuation firm.

Valuation Techniques

The Company's valuation techniques are based upon both observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. An independent pricing service provider is the preferred source of pricing a loan, however, to the extent the independent pricing service provider price is unavailable or not relevant and reliable, the Company will utilize alternative approaches such as broker quotes or manual prices. The Company attempts to maximize the use of observable inputs and minimize the use of unobservable inputs. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security.

Valuation of Investments in Jocassee, Thompson Rivers, Waccamaw River, Sierra JV and MVC Private Equity Fund LP

As Jocassee, Thompson Rivers, Waccamaw River, Sierra JV and MVC Private Equity Fund LP are investment companies with no readily determinable fair values, the Company estimates the fair value of the Company’s investments in these entities using net asset value of each company and the Company’s ownership percentage as a practical expedient. The net asset value is determined in accordance with the specialized accounting guidance for investment companies.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Level 3 Unobservable Inputs

The following tables summarize the significant unobservable inputs the Company used in the valuation of its Level 3 debt and equity securities as of March 31, 2022 and December 31, 2021. The weighted average range of unobservable inputs is based on fair value of investments.

March 31, 2022:( in thousands) Fair Value Valuation<br>Model Level 3<br>Input Impact to Valuation from an Increase in Input
Senior debt and 1st lien notes(1) $ 1,107,422 Yield Analysis Market Yield Decrease
Market Approach Adjusted EBITDA Multiple 0.3x – 4.5x 3.5x Increase
Recent Transaction Transaction Price 0% – 100.0% 98.1% Increase
Subordinated debt and 2nd lien notes(2) 170,059 Yield Analysis Market Yield Decrease
Market Approach Adjusted EBITDA Multiple 5.0x – 7.0x 5.2x Increase
1,592 Discounted Cash Flow Analysis Discount Rate Decrease
3,931 Recent Transaction Transaction Price Increase
Structured products 4,986 Discounted Cash Flow Analysis Discount Rate Decrease
Equity shares(3) 192,434 Market Approach Adjusted EBITDA Multiple Increase
Expected Transaction(4) Transaction Price 5,953 5,953 Increase
Recent Transaction Transaction Price 0.67 – 1,000 124.22 Increase
Equity warrants 72 Market Approach Adjusted EBITDA Multiple Increase

All values are in US Dollars.

(1)Excludes investments with an aggregate fair value amounting to $26,646, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(2)Excludes investments with an aggregate fair value amounting to $47,909, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(3)Excludes investments with an aggregate fair value amounting to $3,030, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(4)Estimated proceeds expected to be received under legally binding asset purchase agreement for sale of real estate held by portfolio company.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

December 31, 2021:( in thousands) Fair Value Valuation<br>Model Level 3<br>Input Impact to Valuation from an Increase in Input
Senior debt and 1st lien notes(1) $ 717,374 Yield Analysis Market Yield Decrease
Recent Transaction Transaction Price 96.5% – 99.0% 97.7% Increase
Subordinated debt and 2nd lien notes(2) 107,345 Yield Analysis Market Yield Decrease
Market Approach Adjusted EBITDA Multiple 0.6x – 9.0x 5.67x Increase
40,354 Recent Transaction Transaction Price Increase
Equity shares(3) 137,393 Market Approach Adjusted EBITDA Multiple Increase
Expected Transaction(4) Transaction Price 6,197,037 6,197,037 Increase
Recent Transaction Transaction Price 1.0 – 1,000 140.03 Increase
Equity warrants 864 Market Approach Adjusted EBITDA Multiple Increase

All values are in US Dollars.

(1)Excludes investments with an aggregate fair value amounting to $3,938, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(2)Excludes investments with an aggregate fair value amounting to $17,974, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(3)Excludes investments with an aggregate fair value amounting to $3,146, which the Company valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(4)Estimated proceeds expected to be received under legally binding asset purchase agreement for sale of real estate held by portfolio company.

The following tables present the Company’s investment portfolio at fair value as of March 31, 2022 and December 31, 2021, categorized by the ASC Topic 820 valuation hierarchy, as previously described:

Fair Value as of March 31, 2022
($ in thousands) Level 1 Level 2 Level 3 Total
Senior debt and 1st lien notes $ — $ 115,215 $ 1,440,531 $ 1,555,746
Subordinated debt and 2nd lien notes — 21,646 295,997 317,643
Structured products — 77,028 4,986 82,014
Equity shares 94 10,050 209,322 219,466
Equity warrants — 84 72 156
Investments subject to leveling $ 94 $ 224,023 $ 1,950,908 $ 2,175,025
Investment in joint ventures / PE fund(1) 228,400
$ 2,403,425
Fair Value as of December 31, 2021
($ in thousands) Level 1 Level 2 Level 3 Total
Senior debt and 1st lien notes $ — $ 84,275 $ 1,137,323 $ 1,221,598
Subordinated debt and 2nd lien notes — 9,468 230,569 240,037
Structured products — 40,271 — 40,271
Equity shares 111 3,084 151,282 154,477
Equity warrants — 243 864 1,107
Investments subject to leveling $ 111 $ 137,341 $ 1,520,038 $ 1,657,490
Investment in joint ventures / PE fund(2) 143,104
$ 1,800,594

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

(1)The Company's investments in Jocassee, Sierra JV, Thompson Rivers, Waccamaw River and MVC Private Equity Fund LP are measured at fair value using NAV and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Unaudited Consolidated Balance Sheet and Consolidated Balance Sheet.

(2)The Company's investments in Jocassee, Thompson Rivers, Waccamaw River and MVC Private Equity Fund LP are measured at fair value using NAV and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Unaudited Consolidated Balance Sheet and Consolidated Balance Sheet.

The following tables reconcile the beginning and ending balances of the Company’s investment portfolio measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2022 and 2021:

Three Months Ended<br><br>March 31, 2022:<br><br>($ in thousands) Senior Debt<br><br>and 1st Lien<br><br>Notes Subordinated Debt and 2nd Lien Notes Structured Products Equity<br>Shares Equity Warrants Total
Fair value, beginning of period $ 1,137,323 $ 230,569 $ — $ 151,282 $ 864 $ 1,520,038
New investments 258,441 30,065 — 11,936 — 300,442
Investments acquired in Sierra merger 210,176 54,177 — 7,065 72 271,490
Transfers into Level 3, net 2,580 — 4,905 — — 7,485
Proceeds from sales of investments (151,580) — — (1,364) (250) (153,194)
Loan origination fees received (5,350) 36 — — — (5,314)
Principal repayments received (7,773) (11,020) — — — (18,793)
Payment-in-kind interest 308 6,984 — — — 7,292
Accretion of loan premium/discount 7 10 — — — 17
Accretion of deferred loan origination revenue 1,390 62 — — — 1,452
Realized gain (loss) 611 8 — — (760) (141)
Unrealized appreciation (depreciation) (5,602) (14,894) 81 40,403 146 20,134
Fair value, end of period $ 1,440,531 $ 295,997 $ 4,986 $ 209,322 $ 72 $ 1,950,908 Three Months Ended<br><br>March 31, 2021:<br><br>($ in thousands) Senior Debt<br><br>and 1st Lien<br><br>Notes Subordinated Debt and 2nd Lien Notes Equity<br>Shares Equity Warrants Total
--- --- --- --- --- --- --- --- --- --- ---
Fair value, beginning of period $ 1,055,717 $ 130,820 $ 44,227 $ 1,134 $ 1,231,898
New investments 227,057 14,478 1,073 — 242,608
Transfers into Level 3, net — 2,234 424 — 2,658
Proceeds from sales of investments (130,763) — (5,946) — (136,709)
Loan origination fees received (4,176) (402) — — (4,578)
Principal repayments received (12,260) (10,120) — — (22,380)
Payment-in-kind interest 229 7,008 — — 7,237
Accretion of loan premium/discount 3 7 — — 10
Accretion of deferred loan origination revenue 1,213 211 — — 1,424
Realized gain (loss) 1,605 3 (77) — 1,531
Unrealized appreciation (depreciation) 756 (68) (2,883) (157) (2,352)
Fair value, end of period $ 1,139,381 $ 144,171 $ 36,818 $ 977 $ 1,321,347

All realized gains and losses and unrealized appreciation and depreciation are included in earnings (changes in net assets) and are reported on separate line items within the Company’s Unaudited Consolidated Statements of Operations. Pre-tax net unrealized appreciation on Level 3 investments of $21.0 million during the three months ended March 31, 2022 was related to portfolio company investments that were still held by the Company as of March 31, 2022. Pre-tax net unrealized depreciation on Level 3 investments of $0.4 million during the three months ended March 31, 2021 was related to portfolio company investments that were still held by the Company as of March 31, 2021.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

During the three months ended March 31, 2022, the Company made investments of approximately $741.9 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the three months ended March 31, 2022, the Company made investments of $30.5 million in portfolio companies to which it was previously committed to provide such financing.

During the three months ended March 31, 2021, the Company made investments of approximately $247.6 million in portfolio companies to which it was not previously contractually committed to provide such financing. During the three months ended March 31, 2021, the Company made investments of $27.3 million in portfolio companies to which it was previously committed to provide such financing.

Unsettled Purchases and Sales of Investments

Investment transactions are recorded based on the trade date of the transaction. As a result, unsettled purchases and sales are recorded as payables and receivables from unsettled transactions, respectively. While purchases and sales of the Company's syndicated senior secured loans generally settle on a T+7 basis, the settlement period will sometimes extend past the scheduled settlement. In such cases, the Company generally is contractually owed and recognizes interest income equal to the applicable margin ("spread") beginning on the T+7 date. Such income is accrued as interest receivable and is collected upon settlement of the investment transaction.

Realized Gain or Loss and Unrealized Appreciation or Depreciation of Portfolio Investments

Realized gains or losses are recorded upon the sale or liquidation of investments and are calculated as the difference between the net proceeds from the sale or liquidation, if any, and the cost basis of the investment using the specific identification method. Unrealized appreciation or depreciation reflects the difference between the fair value of the investments and the cost basis of the investments.

Investment Classification

In accordance with the provisions of the 1940 Act, the Company classifies investments by level of control. As defined in the 1940 Act, "Control Investments" are investments in those companies that the Company is deemed to "Control." "Affiliate Investments" are investments in those companies that are "Affiliated Persons" of the Company, as defined in the 1940 Act, other than Control Investments. "Non-Control / Non-Affiliate Investments" are those that are neither Control Investments nor Affiliate Investments. Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if the Company owns more than 25.0% of the voting securities (i.e., securities with the right to elect directors) and/or has the power to exercise control over the management or policies of such portfolio company. Generally, under the 1940 Act, “Affiliate Investments” that are not otherwise “Control Investments” are defined as investments in which the Company owns at least 5.0%, up to 25.0% (inclusive), of the voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

Short-Term Investments

Short-term investments represent investments in money market funds.

Deferred Financing Fees

Costs incurred to issue debt are capitalized and are amortized over the term of the debt agreements using the effective interest method.

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. Generally, when interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. As of March 31, 2022 and December 31, 2021,

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

the Company had seven and two portfolio companies, respectively, with investments that were on non-accrual. Dividend income is recorded on the ex-dividend date.

Payment-in-Kind Interest

The Company currently holds, and expects to hold in the future, some loans in its portfolio that contain payment-in-kind ("PIK") interest provisions. 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 is required to distribute to its stockholders to maintain its tax treatment as a RIC for federal income tax purposes, even though the Company has not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The Company writes off any accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.

Fee Income

Origination, facility, commitment, consent and other advance fees received in connection with loan agreements ("Loan Origination Fees") are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of its business, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and loan waiver and amendment fees, and are recorded as investment income when earned.

Fee income for the three months ended March 31, 2022 and 2021 was as follows:

Three Months Ended Three Months Ended
($ in thousands) March 31, 2022 March 31, 2021
Recurring Fee Income:
Amortization of loan origination fees $ 1,327 $ 1,078
Management, valuation and other fees (585) 581
Total Recurring Fee Income 742 1,659
Non-Recurring Fee Income:
Prepayment fees — 50
Acceleration of unamortized loan origination fees 196 403
Advisory, loan amendment and other fees 259 21
Total Non-Recurring Fee Income 455 474
Total Fee Income $ 1,197 $ 2,133

Concentration of Credit Risk

As of both March 31, 2022 and December 31, 2021, there were no individual investments representing greater than 10% of the fair value of the Company’s portfolio. As of March 31, 2022 and December 31, 2021, the Company’s largest single portfolio company investment represented approximately 5.2% and 5.5%, respectively, of the fair value of the Company’s portfolio, exclusive of short-term investments. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses on equity interests, can fluctuate dramatically upon repayment of an investment or sale of an equity interest and in any given year can be highly concentrated among several portfolio companies.

The Company places its cash with financial institutions and, at times, cash may exceed insured limits under applicable law.

As of March 31, 2022, all of the Company's assets were or will be pledged as collateral for the February 2019 Credit Facility.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Investments Denominated in Foreign Currencies

As of March 31, 2022, the Company held one investment that was denominated in Canadian dollars, one investment that was denominated in Danish kroner, eight investments that were denominated in Australian dollars, one investment that was denominated in New Zealand dollars, one investment that was denominated in Swedish kronas, 40 investments that were denominated in Euros and 21 investments that were denominated in British pounds sterling. As of December 31, 2021, the Company held one investment that was denominated in Canadian dollars, one investment that was denominated in Danish kroner, five investments that were denominated in Australian dollars, one investment that was denominated in Swedish kronas, 36 investments that were denominated in Euros and 18 investments that were denominated in British pounds sterling.

At each balance sheet date, portfolio company investments denominated in foreign currencies are translated into United States dollars using the spot exchange rate on the last business day of the period. Purchases and sales of foreign portfolio company investments, and any income from such investments, are translated into United States dollars using the rates of exchange prevailing on the respective dates of such transactions.

Although the fair values of foreign portfolio company investments and the fluctuation in such fair values are translated into United States dollars using the applicable foreign exchange rates described above, the Company does not separately report that portion of the change in fair values resulting from foreign currency exchange rates fluctuations from the change in fair values of the underlying investment. All fluctuations in fair value are included in net unrealized appreciation (depreciation) of investments in the Company's Unaudited Consolidated Statements of Operations.

In addition, during both the three months ended March 31, 2022 and March 31, 2021, the Company entered into forward currency contracts primarily to help mitigate the impact that an adverse change in foreign exchange rates would have on net interest income from the Company's investments and related borrowings denominated in foreign currencies. Net unrealized appreciation or depreciation on foreign currency contracts are included in "Net unrealized appreciation (depreciation) - foreign currency transactions" and net realized gains or losses on forward currency contracts are included in "Net realized gains (losses) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations.

Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. Dollar.

  1. INCOME TAXES

The Company has elected for federal income tax purposes to be treated, and intends to qualify annually, as a RIC under the Code and intends to make the required distributions to its stockholders as specified therein. In order to maintain its tax treatment as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay taxes only on the portion of its taxable income and gains it does not distribute (actually or constructively) and certain built-in gains. The Company has historically met its minimum distribution requirements and continually monitors its distribution requirements with the goal of ensuring compliance with the Code.

Depending on the level of investment company taxable income (“ICTI”) and net capital gains, if any, or taxable income, the Company may choose to carry forward undistributed taxable income and pay a 4% nondeductible U.S. federal excise tax on certain undistributed income unless the Company distributes, in a timely manner, an amount at least equal to the sum of (i) 98% of net ordinary income for each calendar year, (ii) 98.2% of the amount by which capital gains exceed capital losses (adjusted for certain ordinary losses) for the one-year period ending October 31 in that calendar year and (iii) certain undistributed amounts from previous years on which the Company paid no U.S. federal income tax. Any such carryover of taxable income must be distributed before the end of that next tax year through a dividend declared prior to filing of the tax return related to the year which generated such taxable income not to be subject to U.S. federal income tax.

Tax positions taken or expected to be taken in the course of preparing the Company's tax returns are evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than not threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the Company's tax positions taken, or to be taken, on federal income tax returns for all open tax years (fiscal years 2018-2020), and has concluded that the provision for uncertain tax positions in the Company's financial statements is appropriate.

Taxable income generally differs from increase in net assets resulting from operations due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized. The Company makes certain adjustments to the

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and nondeductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, or total distributable earnings (loss), as appropriate.

For federal income tax purposes, the cost of investments owned as of March 31, 2022 and December 31, 2021 was approximately $2,399.8 million and $1,792.1 million, respectively. As of March 31, 2022, net unrealized appreciation on the Company's investments (tax basis) was approximately $15.9 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $78.6 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $62.7 million. As of December 31, 2021, net unrealized depreciation on the Company's investments (tax basis) was approximately $16.4 million, consisting of gross unrealized appreciation, where the fair value of the Company's investments exceeds their tax cost, of approximately $45.6 million and gross unrealized depreciation, where the tax cost of the Company's investments exceeds their fair value, of approximately $29.2 million.

In addition, the Company has wholly-owned taxable subsidiaries (the “Taxable Subsidiaries”), which hold certain portfolio investments that are listed on the Unaudited and Audited Consolidated Schedules of Investments. The Taxable Subsidiaries are consolidated for financial reporting purposes, such that the Company’s consolidated financial statements reflect the Company’s investments in the portfolio companies owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit the Company to hold certain portfolio companies that are organized as LLCs (or other forms of pass-through entities) and still satisfy the RIC tax requirement that at least 90% of the RIC’s gross revenue for income tax purposes must consist of qualifying investment income. Absent the Taxable Subsidiaries, a proportionate amount of any gross income of an LLC (or other pass-through entity) portfolio investment would flow through directly to the RIC. To the extent that such income did not consist of qualifying investment income, it could jeopardize the Company’s ability to qualify as a RIC and therefore cause the Company to incur significant amounts of federal income taxes. When LLCs (or other pass-through entities) are owned by the Taxable Subsidiaries, their income is taxed to the Taxable Subsidiaries and does not flow through to the RIC, thereby helping the Company preserve its RIC tax treatment and resultant tax advantages. The Taxable Subsidiaries are not consolidated for income tax purposes and may generate income tax expense as a result of their ownership of the portfolio companies. This income tax expense or benefit, if any, is reflected in the Company’s Unaudited Consolidated Statements of Operations. Additionally, any unrealized appreciation related to portfolio investments held by the Taxable Subsidiaries (net of unrealized depreciation related to portfolio investments held by the Taxable Subsidiaries) is reflected net of applicable federal and state income taxes, if any, in the Company's Consolidated Statements of Operations, with the related deferred tax assets or liabilities, if any, included in "Accounts payable and accrued liabilities" in the Company's Unaudited and Audited Consolidated Balance Sheets.

As of March 31, 2022, two of the Company’s taxable subsidiaries had a deferred tax asset of $8.6 million pertaining to operating losses and tax basis differences related to certain partnership interests, and the Company’s other taxable subsidiary had a deferred tax liability of $0.8 million pertaining to tax basis differences related to certain partnership interests. As of December 31, 2021, the Company’s taxable subsidiaries had a deferred tax asset of $8.6 million pertaining to operating losses and tax basis differences related to certain partnership interests. A valuation allowance is provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. As of both March 31, 2022 and December 31, 2021, given the losses generated by the entity, the deferred tax assets have been offset by a valuation allowance of $8.6 million.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

  1. BORROWINGS

The Company had the following borrowings outstanding as of March 31, 2022 and December 31, 2021:

Issuance Date<br>($ in thousands) Maturity Date Interest Rate as of March 31, 2022 March 31, 2022 December 31, 2021
Credit Facilities:
February 21, 2019 February 21, 2025 2.272% $ 757,217 $ 655,189
Total Credit Facilities $ 757,217 $ 655,189
Notes:
September 24, 2020 - August 2025 Notes August 4, 2025 4.660% $ 25,000 $ 25,000
September 29, 2020 - August 2025 Notes August 4, 2025 4.660% 25,000 25,000
November 5, 2020 - Series B Notes November 4, 2025 4.250% 62,500 62,500
November 5, 2020 - Series C Notes November 4, 2027 4.750% 112,500 112,500
February 25, 2021 Series D Notes February 26, 2026 3.410% 80,000 80,000
February 25, 2021 Series E Notes February 26, 2028 4.060% 70,000 70,000
November 23, 2021 - November 2026 Notes November 23, 2026 3.300% 350,000 350,000
(Less: Deferred financing fees) (7,159) (7,444)
Total Notes $ 717,841 $ 717,556

February 2019 Credit Facility

The Company has entered into the February 2019 Credit Facility with ING, as administrative agent, and the lenders party thereto. The initial commitments under the February 2019 Credit Facility total $800.0 million. Effective on November 4, 2021, the Company increased aggregate commitments under the February 2019 Credit Facility to $875.0 million from $800.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants. Effective February 25, 2022, the Company increased aggregate commitments under the February 2019 Credit Facility to $965.0 million from $875.0 million pursuant to the accordion feature under the February 2019 Credit Facility, and the allowance for an increase in the total commitments increased to $1.5 billion from $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants. The Company can borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, which is structured as a revolving credit facility, is secured primarily by a material portion of the Company's assets and guaranteed by certain subsidiaries of the Company. Following the termination on June 30, 2020 of Barings BDC Senior Funding I, LLC’s (“BSF”) credit facility entered into in August 2018 with Bank of America, N.A. (the “August 2018 Credit Facility”), BSF became a subsidiary guarantor and its assets secure the February 2019 Credit Facility. The revolving period of the February 2019 Credit Facility ends on February 21, 2024, followed by a one-year repayment period with a maturity date of February 21, 2025.

Borrowings denominated in U.S. Dollars under the February 2019 Credit Facility bear interest, subject to the Company’s election, on a per annum basis equal to (i) the alternate base rate plus 1.25% (or 1.00% for so long as the Company maintains an investment grade credit rating) or (ii) the term Secured Overnight Financing Rate (“SOFR”) plus 2.25% (or 2.00% for so long as the Company maintains an investment grade credit rating) plus a credit spread adjustment of 0.10% for borrowings with an interest period of one month, 0.15% for borrowings with an interest period of three months or 0.25% for borrowings with an interest period of six months. The alternate base rate is equal to the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.5%, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) one-month term SOFR plus 1.0% plus a credit spread adjustment of 0.10% and (v) 1.0%. For borrowings denominated in certain foreign currencies other than Australian dollars, the applicable currency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if the Company no longer maintains an investment grade credit rating) or for borrowings denominated in Australian dollars, the applicable Australian dollars Screen Rate, plus 2.20% (or 2.45% if the Company no longer maintains an investment grade credit rating).

In addition, the Company pays a commitment fee of (i) 0.5% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is greater than two-thirds of total commitments or (ii) 0.375% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is equal to or less than two-thirds of total commitments. In connection with entering into the February 2019 Credit Facility, the Company incurred financing fees of approximately $6.4 million, which will be amortized over the remaining life of the February 2019 Credit Facility.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The February 2019 Credit Facility contains certain affirmative and negative covenants, including but not limited to (i) maintaining minimum stockholders' equity, (ii) maintaining minimum obligors' net worth, (iii) maintaining a minimum asset coverage ratio, (iv) meeting a minimum liquidity test and (v) maintaining the Company's status as a regulated investment company and as a business development company. The February 2019 Credit Facility also contains customary events of default with customary cure and notice provisions, including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, cross-default to other indebtedness, bankruptcy, change of control, and material adverse effect. The February 2019 Credit Facility also permits the administrative agent to select an independent third-party valuation firm to determine valuations of certain portfolio investments for purposes of borrowing base provisions. As of March 31, 2022, the Company was in compliance with all covenants under the February 2019 Credit Facility.

As of March 31, 2022, the Company had U.S. dollar borrowings of $472.0 million outstanding under the February 2019 Credit Facility with an interest rate of 2.318% (one month SOFR of 0.218%), borrowings denominated in Swedish kronas of 12.8kr million ($1.4 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £77.6 million ($102.1 million U.S. dollars) with an interest rate of 2.477% (one month SONIA of 0.477%), borrowings denominated in Australian dollars of A$36.6 million ($27.5 million U.S. dollars) with an interest rate of 2.250% (one month AUD Screen Rate of 0.250%) and borrowings denominated in Euros of €138.6 million ($154.2 million U.S. dollars) with an interest rate of 2.000% (one month EURIBOR of 0.000%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations.

As of December 31, 2021, the Company had U.S. dollar borrowings of $377.0 million outstanding under the February 2019 Credit Facility with an interest rate of 2.125% (one month LIBOR of 0.125%), borrowings denominated in Swedish kronas of 12.8kr million ($1.4 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £68.3 million ($92.5 million U.S. dollars) with an average interest rate of 2.125% (one month GBP LIBOR of 0.125%), borrowings denominated in Australian dollars of A$36.6 million ($26.6 million U.S. dollars) with an interest rate of 2.250% (one month AUD Screen Rate of 0.250%) and borrowings denominated in Euros of €138.6 million ($157.6 million U.S. dollars) with an interest rate of 2.00% (one month EURIBOR of 0.000%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in the Company's Unaudited Consolidated Statements of Operations.

As of March 31, 2022 and December 31, 2021, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $757.2 million and $655.2 million, respectively. The fair values of the borrowings outstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

August 2025 Notes

On August 3, 2020, the Company entered into a Note Purchase Agreement (the "August 2020 NPA") with Massachusetts Mutual Life Insurance Company governing the issuance of (1) $50.0 million in aggregate principal amount of Series A senior unsecured notes due August 2025 (the "Series A Notes due 2025") with a fixed interest rate of 4.66% per year, and (2) up to $50.0 million in aggregate principal amount of additional senior unsecured notes due August 2025 with a fixed interest rate per year to be determined (the "Additional Notes" and, collectively with the Series A Notes due 2025, the "August 2025 Notes"), in each case, to qualified institutional investors in a private placement. An aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 24, 2020 and an aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 29, 2020, both of which will mature on August 4, 2025 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with their terms. Interest on the August 2025 Notes is due semiannually in March and September, beginning in March 2021. In addition, the Company is obligated to offer to repay the August 2025 Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the August 2020 NPA, the Company may redeem the August 2025 Notes in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before November 3, 2024, a make-whole premium. The August 2025 Notes are guaranteed by certain of the

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Company's subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

On November 4, 2020, the Company amended the August 2020 NPA to reduce the aggregate principal amount of unissued Additional Notes from $50.0 million to $25.0 million.

The August 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The August 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the August 2025 Notes at the time outstanding may declare all August 2025 Notes then outstanding to be immediately due and payable. As of March 31, 2022, the Company was in compliance with all covenants under the August 2020 NPA.

The August 2025 Notes were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The August 2025 Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of March 31, 2022 and December 31, 2021, the fair value of the outstanding August 2025 Notes was $49.7 million and $52.2 million, respectively. The fair value determination of the August 2025 Notes was based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

November Notes

On November 4, 2020, the Company entered into a Note Purchase Agreement (the “November 2020 NPA”) governing the issuance of (1) $62.5 million in aggregate principal amount of Series B senior unsecured notes due November 2025 (the “Series B Notes”) with a fixed interest rate of 4.25% per year and (2) $112.5 million in aggregate principal amount of Series C senior unsecured notes due November 2027 (the “Series C Notes” and, collectively with the Series B Notes, the “November Notes”) with a fixed interest rate of 4.75% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable November Notes do not satisfy certain investment grade conditions and/or (y) 1.50% per year, to the extent the ratio of the Company’s secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The November Notes were delivered and paid for on November 5, 2020. The Series B Notes will mature on November 4, 2025, and the Series C Notes will mature on November 4, 2027 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with their terms. Interest on the November Notes is due semiannually in May and November, beginning in May 2021. In addition, the Company is obligated to offer to repay the November Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the November 2020 NPA, the Company may redeem the Series B Notes and the Series C Notes in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium. The November Notes are guaranteed by certain of the Company’s subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

The November 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The November 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the November Notes at the time outstanding may declare all November Notes then outstanding to be immediately due and payable. As of March 31, 2022, the Company was in compliance with all covenants under the November 2020 NPA.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The November Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The November Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of March 31, 2022 and December 31, 2021, the fair value of the outstanding Series B Notes was $61.1 million and $64.1 million, respectively. As of March 31, 2022 and December 31, 2021, the fair value of the outstanding Series C Notes was $109.0 million and $115.3 million, respectively. The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

February Notes

On February 25, 2021, the Company entered into a Note Purchase Agreement (the “February 2021 NPA”) governing the issuance of (1) $80.0 million in aggregate principal amount of Series D senior unsecured notes due February 26, 2026 (the “Series D Notes”) with a fixed interest rate of 3.41% per year and (2) $70.0 million in aggregate principal amount of Series E senior unsecured notes due February 26, 2028 (the “Series E Notes” and, collectively with the Series D Notes, the “February Notes”) with a fixed interest rate of 4.06% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable February Notes do not satisfy certain investment grade rating conditions and/or (y) 1.50% per year, to the extent the ratio of the Company’s secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The February Notes were delivered and paid for on February 26, 2021.

The Series D Notes will mature on February 26, 2026, and the Series E Notes will mature on February 26, 2028 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with the terms of the February 2021 NPA. Interest on the February Notes is due semiannually in February and August of each year, beginning in August 2021. In addition, the Company is obligated to offer to repay the February Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the February 2021 NPA, the Company may redeem the Series D Notes and the Series E Notes in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if redeemed on or before August 26, 2025, with respect to the Series D Notes, or on or before August 26, 2027, with respect to the Series E Notes, a make-whole premium. The February Notes are guaranteed by certain of the Company’s subsidiaries, and are the Company's general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

The February 2021 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement , including, without limitation, information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments. In addition, the February 2021 NPA contains the following financial covenants: (a) maintaining a minimum obligors’ net worth, measured as of each fiscal quarter end; (b) not permitting the Company’s asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to shareholders, to be less than the statutory minimum then applicable to the Company under the 1940 Act; and (c) not permitting the Company’s net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter end.

The February 2021 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or that of the Company’s subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February Notes at the time outstanding may declare all February Notes then outstanding to be immediately due and payable. As of March 31, 2022, the Company was in compliance with all covenants under the February 2021 NPA.

The February Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The February Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of March 31, 2022 and December 31, 2021, the fair value of the outstanding Series D Notes were $75.5 million and $79.2 million, respectively. As of March 31, 2022 and December 31, 2021, the fair value of the outstanding Series E Notes was $65.2 million and $68.7 million, respectively. The fair value determinations of the Series D Notes and Series E Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

November 2026 Notes

On November 23, 2021, the Company and U.S. Bank National Association (the “Trustee”) entered into an Indenture (the “Base Indenture”) and a Supplemental Indenture (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). The First Supplemental Indenture relates to the Company’s issuance of $350.0 million aggregate principal amount of its 3.300% notes due 2026 (the “November 2026 Notes”).

The November 2026 Notes will mature on November 23, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The November 2026 Notes bear interest at a rate of 3.300% per year payable semi-annually on May 23 and November 23 of each year, commencing on May 23, 2022. The November 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the November 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

The Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the 1940 Act, whether or not it is subject to those requirements, and to provide financial information to the holders of the November 2026 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are described in the Indenture.

In addition, on the occurrence of a “change of control repurchase event,” as defined in the Indenture, the Company will generally be required to make an offer to purchase the outstanding November 2026 Notes at a price equal to 100% of the principal amount of such November 2026 Notes plus accrued and unpaid interest to the repurchase date.

As of March 31, 2022 and December 31, 2021, the fair value of the outstanding November 2026 Notes was $320.9 million and $346.8 million, respectively. The fair value determinations of the November 2026 Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

  1. DERIVATIVE INSTRUMENTS

MVC Credit Support Agreement

In connection with the MVC Acquisition, on December 23, 2020, promptly following the closing of the Company’s merger with MVC, the Company and the Adviser entered into the MVC Credit Support Agreement, pursuant to which the Adviser has agreed to provide credit support to the Company in the amount of up to $23.0 million relating to the net cumulative realized and unrealized losses on the acquired MVC investment portfolio over a 10-year period. See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the MVC Credit Support Agreement. Net unrealized appreciation or depreciation on the MVC Credit Support Agreement is included in "Net unrealized appreciation (depreciation) - credit support agreements" in the Company’s Unaudited Consolidated Statements of Operations.

The following tables present the fair value and aggregate unrealized depreciation of the MVC Credit Support Agreement as of March 31, 2022 and December 31, 2021:

As of March 31, 2022<br><br>Description<br><br>($ in thousands) Counter Party Settlement Date Notional Amount Value Unrealized Appreciation (Depreciation)
MVC Credit Support Agreement Barings LLC 01/01/31 $ 23,000 $ 15,000 $ 1,400
Total MVC Credit Support Agreement $ 1,400 As of December 31, 2021<br><br>Description<br><br>($ in thousands) Counter Party Settlement Date Notional Amount Value Unrealized Appreciation (Depreciation)
--- --- --- --- --- --- --- --- ---
MVC Credit Support Agreement Barings LLC 01/01/31 $ 23,000 $ 15,400 $ 1,800
Total MVC Credit Support Agreement $ 1,800

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

As of March 31, 2022 and December 31, 2021, the fair value of the MVC Credit Support Agreement was $15.0 million and $15.4 million, respectively, and is included in "Credit support agreements" in the accompanying Unaudited and Audited Consolidated Balance Sheets. The fair value of the MVC Credit Support Agreement was determined based on an income approach, with the primary inputs being the enterprise value, the continuously annual risk-free interest rate, a measure of expected asset volatility, and the expected time until an exit event for each portfolio company in the MVC Reference Portfolio, which are all Level 3 inputs.

Sierra Credit Support Agreement

In connection with the Sierra Acquisition, on February 25, 2022, promptly following the closing of the Company’s merger with Sierra, the Company and the Adviser entered into the Sierra Credit Support Agreement, pursuant to which the Adviser has agreed to provide credit support to the Company in the amount of up to $100.0 million relating to the net cumulative realized and unrealized losses on the acquired Sierra investment portfolio over a 10-year period. See “Note 2 – Agreements and Related Party Transactions” for additional information regarding the Sierra Credit Support Agreement. Net unrealized appreciation or depreciation on the Sierra Credit Support Agreement is included in "Net unrealized appreciation (depreciation) - credit support agreements" in the Company’s Unaudited Consolidated Statements of Operations.

The following table presents the fair value and aggregate unrealized depreciation of the Sierra Credit Support Agreement as of March 31, 2022:

As of March 31, 2022<br><br>Description<br><br>($ in thousands) Counter Party Settlement Date Notional Amount Value Unrealized Appreciation (Depreciation)
Sierra Credit Support Agreement Barings LLC 04/01/32 $ 100,000 $ 44,400 $ —
Total Sierra Credit Support Agreement $ —

As of March 31, 2022, the fair value of the Sierra Credit Support Agreement was $44.4 million, and is included in “Credit support agreements” in the accompanying Unaudited Consolidated Balance Sheet. The fair value of the Sierra Credit Support Agreement was determined based on an income approach, with the primary inputs being the enterprise value, the continuously annual risk-free interest rate, a measure of expected asset volatility, and the expected time until an exit event for each portfolio company in the Sierra Reference Portfolio, which are all Level 3 inputs.

Foreign Currency Forward Contracts

The Company enters into forward currency contracts from time to time to primarily help mitigate the impact that an adverse change in foreign exchange rates would have on net interest income from the Company's investments and related borrowings denominated in foreign currencies. Net unrealized appreciation or depreciation on foreign currency contracts are included in "Net unrealized appreciation (depreciation) - foreign currency transactions" and net realized gains or losses on forward currency contracts are included in "Net realized gains (losses) - foreign currency transactions" in the Company’s Unaudited Consolidated Statements of Operations. Forward currency contracts are considered undesignated derivative instruments.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

The following tables present the Company's foreign currency forward contracts as of March 31, 2022 and December 31, 2021:

As of March 31, 2022<br><br>Description<br><br>($ in thousands) Notional Amount to be Purchased Notional Amount to be Sold Maturity Date Gross Amount of Recognized Assets (Liabilities) Balance Sheet Location of Net Amounts
Foreign currency forward contract (AUD) A$67,436 $50,505 04/08/22 $ 138 Prepaid expenses and other assets
Foreign currency forward contract (AUD) $22,755 A$31,386 04/08/22 (815) Derivative liability
Foreign currency forward contract (AUD) $19,490 A$27,000 04/08/22 (787) Derivative liability
Foreign currency forward contract (AUD) $6,494 A$9,050 04/08/22 (302) Derivative liability
Foreign currency forward contract (AUD) $51,174 A$68,223 07/07/22 (146) Derivative liability
Foreign currency forward contract (CAD) C$3,203 $2,559 04/08/22 5 Prepaid expenses and other assets
Foreign currency forward contract (CAD) $2,506 C$3,203 04/08/22 (58) Derivative liability
Foreign currency forward contract (CAD) $2,549 C$3,190 07/07/22 (5) Derivative liability
Foreign currency forward contract (CAD) $49 C$61 07/07/22 — Prepaid expenses and other assets
Foreign currency forward contract (DKK) 2,116kr. $315 04/08/22 1 Prepaid expenses and other assets
Foreign currency forward contract (DKK) $323 2,116kr. 04/08/22 6 Prepaid expenses and other assets
Foreign currency forward contract (DKK) $323 2,159kr. 07/07/22 (1) Derivative liability
Foreign currency forward contract (EUR) €2,000 $2,215 04/01/22 10 Prepaid expenses and other assets
Foreign currency forward contract (EUR) €86,555 $96,092 04/08/22 225 Prepaid expenses and other assets
Foreign currency forward contract (EUR) €5,020 $5,701 04/08/22 (116) Derivative liability
Foreign currency forward contract (EUR) $25,366 €23,000 04/08/22 (228) Derivative liability
Foreign currency forward contract (EUR) $8,514 €7,500 04/08/22 168 Prepaid expenses and other assets
Foreign currency forward contract (EUR) $69,071 €61,075 04/08/22 1,109 Prepaid expenses and other assets
Foreign currency forward contract (EUR) $95,469 €85,835 07/07/22 (400) Derivative liability
Foreign currency forward contract (NZD) NZ$11,600 $8,026 04/08/22 42 Prepaid expenses and other assets
Foreign currency forward contract (NZD) $7,995 NZ$11,600 04/08/22 (74) Derivative liability
Foreign currency forward contract (NZD) $8,151 NZ$11,801 07/07/22 (44) Derivative liability
Foreign currency forward contract (GBP) $13,131 £10,000 04/01/22 (35) Derivative liability
Foreign currency forward contract (GBP) £8,819 $11,521 04/08/22 90 Prepaid expenses and other assets
Foreign currency forward contract (GBP) $5,642 £4,220 04/08/22 86 Prepaid expenses and other assets
Foreign currency forward contract (GBP) $6,122 £4,599 04/08/22 67 Prepaid expenses and other assets
Foreign currency forward contract (GBP) $12,612 £9,656 07/07/22 (97) Derivative liability
Foreign currency forward contract (GBP) £10,000 $13,128 07/07/22 35 Prepaid expenses and other assets
Foreign currency forward contract (SEK) 1,875kr $201 04/08/22 — Prepaid expenses and other assets
Foreign currency forward contract (SEK) $207 1,875kr 04/08/22 6 Prepaid expenses and other assets
Foreign currency forward contract (SEK) $213 1,976kr 07/07/22 — Derivative liability
Total $ (1,120)

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

As of December 31, 2021<br><br>Description<br><br>($ in thousands) Notional Amount to be Purchased Notional Amount to be Sold Maturity Date Gross Amount of Recognized Assets (Liabilities) Balance Sheet Location of Net Amounts
Foreign currency forward contract (AUD) A$31,601 $22,849.503 01/06/22 $ 126 Prepaid expenses and other assets
Foreign currency forward contract (AUD) A$2,099 $1,508 01/06/22 18 Prepaid expenses and other assets
Foreign currency forward contract (AUD) $20,727 A$28,700 01/06/22 (139) Derivative liability
Foreign currency forward contract (AUD) $3,580 A$5,000 04/08/22 (55) Derivative liability
Foreign currency forward contract (AUD) $18,247 A$25,385.697 04/08/22 (215) Derivative liability
Foreign currency forward contract (CAD) C$3,230 $2,528 01/06/22 29 Prepaid expenses and other assets
Foreign currency forward contract (CAD) C$3,000 $2,425 01/06/22 (50) Derivative liability
Foreign currency forward contract (CAD) $4,881 C$6,230 01/06/22 (51) Derivative liability
Foreign currency forward contract (CAD) $2,506 C$3,203 04/08/22 (29) Derivative liability
Foreign currency forward contract (DKK) 2,142.838kr. $326 01/06/22 1 Prepaid expenses and other assets
Foreign currency forward contract (DKK) $335 2,142.838kr. 01/06/22 7 Prepaid expenses and other assets
Foreign currency forward contract (DKK) $323 2,115.99kr. 04/08/22 (1) Derivative liability
Foreign currency forward contract (EUR) €52,582.593 $59,524 01/06/22 275 Prepaid expenses and other assets
Foreign currency forward contract (EUR) €5,020 $5,701.2739 04/08/22 19 Prepaid expenses and other assets
Foreign currency forward contract (EUR) $24,722 €21,500 01/06/22 271 Prepaid expenses and other assets
Foreign currency forward contract (EUR) $14,563 €12,900 01/06/22 (108) Derivative liability
Foreign currency forward contract (EUR) $20,655 €18,182.593 01/06/22 (23) Derivative liability
Foreign currency forward contract (EUR) $60,413 €53,264.857 04/08/22 (282) Derivative liability
Foreign currency forward contract (EUR) $1,130 €1,000 04/08/22 (10) Derivative liability
Foreign currency forward contract (EUR) $8,514 €7,500 04/08/22 (32) Derivative liability
Foreign currency forward contract (GBP) £9,900 $13,219.519 01/06/22 190 Prepaid expenses and other assets
Foreign currency forward contract (GBP) $13,348.815 £9,900 01/06/22 (60) Derivative liability
Foreign currency forward contract (GBP) $6,121.622 £4,598.707 04/08/22 (104) Derivative liability
Foreign currency forward contract (SEK) 1,791.942kr $198 01/07/22 — Derivative liability
Foreign currency forward contract (SEK) $204 1,791.942kr 01/07/22 6 Prepaid expenses and other assets
Foreign currency forward contract (SEK) $207 1,874.724kr 04/08/22 — Prepaid expenses and other assets
Total $ (217)

As of March 31, 2022 and December 31, 2021, the total fair value of the Company's foreign currency forward contracts was $(1.1) million and $(0.2) million, respectively. The fair values of the Company's foreign currency forward contracts are based on unadjusted prices from independent pricing services and independent indicative broker quotes, which are Level 2 inputs.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

  1. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company is party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to the Company's portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. As of March 31, 2022, the Company believed that it had adequate financial resources to satisfy its unfunded commitments. The balances of unused commitments to extend financing as of March 31, 2022 and December 31, 2021 were as follows:

Portfolio Company <br>($ in thousands) Investment Type March 31, 2022 December 31, 2021
1888 Industrial Services, LLC(1)(2) Revolver $ 314 $ —
Acclime Holdings HK Limited(1) Delayed Draw Term Loan 1,179 1,179
Acclime Holdings HK Limited(1) Delayed Draw Term Loan 110 110
Air Comm Corporation, LLC(1) Delayed Draw Term Loan 11 11
Air Comm Corporation, LLC(1) Delayed Draw Term Loan 1,448 1,448
Amtech Software(1) Delayed Draw Term Loan 1,527 2,727
Amtech Software(1) Revolver 682 682
AnalytiChem Holding GmbH(1)(2)(3) Delayed Draw Term Loan 6,073 6,207
Aquavista Watersides 2 LTD(1)(2)(4) Bridge Revolver 489 503
Aquavista Watersides 2 LTD(1)(2)(4) Acquisition Facility 3,059 3,147
Astra Bidco Limited(1)(2)(4) Delayed Draw Term Loan 959 2,571
Avance Clinical Bidco Pty Ltd(1)(5) Delayed Draw Term Loan 1,435 3,497
Azalea Buyer, Inc.(1) Delayed Draw Term Loan 962 962
Azalea Buyer, Inc.(1) Revolver 481 481
Bariacum S.A(1)(2)(3) Acquisition Facility 2,114 2,161
Beyond Risk Management, Inc.(1)(2) Delayed Draw Term Loan 2,573 2,573
BigHand UK Bidco Limited(1)(2)(4) Acquisition Facility — 378
Black Angus Steakhouses, LLC(1) Acquisition Facility 417 —
Bounteous, Inc.(1) Delayed Draw Term Loan 2,840 2,840
Brightpay Limited(1)(2)(3) Delayed Draw Term Loan 241 432
Brightpay Limited(1)(2)(3) Delayed Draw Term Loan 141 144
BrightSign LLC(1) Revolver 1,329 1,329
British Engineering Services Holdco Limited(1)(2)(4) Bridge Revolver — 613
Brook & Whittle Holding Corp.(1) Delayed Draw Term Loan 852 —
CAi Software, LLC(1) Revolver 943 943
Canadian Orthodontic Partners Corp.(1)(2)(6) Acquisition Facility 120 167
Centralis Finco S.a.r.l.(1)(3) Acquisition Facility 451 461
Ceres Pharma NV(1)(2)(3) Delayed Draw Term Loan 2,103 2,149
CGI Parent, LLC(1)(2) Revolver 1,212 —
Classic Collision (Summit Buyer, LLC)(1)(2) Delayed Draw Term Loan 309 393
Coastal Marina Holdings, LLC(1)(2) PIK Tranche B Term Loan 1,311 1,311
Coastal Marina Holdings, LLC(1)(2) Tranche A Term Loan 3,576 3,576
Command Alkon (Project Potter Buyer, LLC)(1) Delayed Draw Term Loan 6,018 6,018
Coyo Uprising GmbH(1)(2)(3) Delayed Draw Term Loan 874 894
Crash Champions, LLC(1) Delayed Draw Term Loan 379 5,420
CSL Dualcom(1)(4) Acquisition Term Loan 970 998
Dart Buyer, Inc.(1) Delayed Draw Term Loan 1,163 2,431
DecksDirect, LLC(1) Revolver 58 218
DreamStart Bidco SAS(1)(3) Acquisition Facility 604 617
Dune Group(1)(3) Delayed Draw Term Loan 650 665
Dwyer Instruments, Inc.(1) Delayed Draw Term Loan 692 692

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Portfolio Company <br>($ in thousands) Investment Type March 31, 2022 December 31, 2021
Eclipse Business Capital, LLC(1) Revolver 10,909 11,818
EMI Porta Holdco LLC(1) Delayed Draw Term Loan 11,212 12,458
EMI Porta Holdco LLC(1) Revolver 2,361 2,966
EPS NASS Parent, Inc.(1) Delayed Draw Term Loan 583 583
eShipping, LLC(1) Delayed Draw Term Loan 1,650 2,548
eShipping, LLC(1) Revolver 824 1,232
Events Software BidCo Pty Ltd(1)(5) Delayed Draw Term Loan 481 —
F24 (Stairway BidCo GmbH)(1)(2)(3) Delayed Draw Term Loan 396 405
Fineline Technologies, Inc.(1) Delayed Draw Term Loan 180 180
Finexvet(1)(3) Acquisition Facility 967 —
FragilePak LLC(1)(2) Delayed Draw Term Loan 2,354 2,354
Heartland Veterinary Partners, LLC(1) Delayed Draw Term Loan 657 657
Heavy Construction Systems Specialists, LLC(1) Revolver 2,632 2,632
HW Holdco, LLC (Hanley Wood LLC)(1)(2) Delayed Draw Term Loan 913 1,563
IGL Holdings III Corp.(1) Delayed Draw Term Loan 1,217 1,217
Innovad Group II BV(1)(2)(3) Delayed Draw Term Loan 1,785 1,825
INOS 19-090 GmbH(1)(2)(3) Acquisition Facility 2,481 2,535
ITI Intermodal, Inc.(1) Delayed Draw Term Loan 103 103
ITI Intermodal, Inc.(1) Revolver 124 124
Jaguar Merger Sub Inc.(1)(2) Delayed Draw Term Loan 1,781 1,961
Jaguar Merger Sub Inc.(1)(2) Revolver 490 490
Jocassee Partners LLC Joint Venture 15,000 20,000
Jon Bidco Limited(1)(2)(7) Capex & Acquisition Facility 1,585 —
Jones Fish Hatcheries & Distributors LLC(1) Revolver 418 —
Kano Laboratories LLC(1)(2) Delayed Draw Term Loan 153 153
Kano Laboratories LLC(1)(2) Delayed Draw Term Loan 2,830 4,544
Kemmerer Operations LLC(1) Delayed Draw Term Loan 908 —
LAF International(1)(2)(3) Acquisition Facility 178 341
Lambir Bidco Limited(1)(2)(3) Bridge Revolver 920 941
Lambir Bidco Limited(1)(2)(3) Delayed Draw Term Loan 1,841 1,881
LeadsOnline, LLC(1) Revolver 2,603 —
Lifestyle Intermediate II, LLC(1) Revolver 2,500 —
LivTech Purchaser, Inc.(1) Delayed Draw Term Loan 34 82
Marmoutier Holding B.V.(1)(2)(3) Delayed Draw Term Loan 396 405
Marmoutier Holding B.V.(1)(2)(3) Revolver 159 162
Marshall Excelsior Co.(1)(2) Revolver 1,047 —
MC Group Ventures Corporation(1) Delayed Draw Term Loan 817 817
Modern Star Holdings Bidco Pty Limited(1)(5) Capex Term Loan 1,072 1,038
Murphy Midco Limited(1)(4) Delayed Draw Term Loan 648 2,617
Narda Acquisitionco., Inc.(1) Revolver 1,311 1,311
Navia Benefit Solutions, Inc.(1) Delayed Draw Term Loan 1,261 1,261
Nexus Underwriting Management Limited(1)(2)(4) Revolver 101 103
Nexus Underwriting Management Limited(1)(2)(4) Acquisition Facility 526 541
Novotech Aus Bidco Pty Ltd(1) Capex & Acquisition Facility 809 —
OA Buyer, Inc.(1) Revolver 1,331 1,331
OAC Holdings I Corp(1) Revolver 685 —
OG III B.V.(1)(2)(3) Acquisition CapEx Facility 671 686

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Portfolio Company <br>($ in thousands) Investment Type March 31, 2022 December 31, 2021
Omni Intermediate Holdings, LLC(1)(2) Delayed Draw Term Loan — 817
Omni Intermediate Holdings, LLC(1)(2) Delayed Draw Term Loan 2,289 4,357
OSP Hamilton Purchaser, LLC(1) Revolver 187 187
Pacific Health Supplies Bidco Pty Limited(1)(2)(5) CapEx Term Loan 1,325 1,283
PDQ.Com Corporation(1) Delayed Draw Term Loan — 289
PDQ.Com Corporation(1) Delayed Draw Term Loan 7,753 10,948
Polara Enterprises, L.L.C.(1)(2) Revolver 545 545
Policy Services Company, LLC(1)(2) Delayed Draw Term Loan 3,772 6,944
Premium Invest(1)(2)(3) Acquisition Facility 1,892 1,933
ProfitOptics, LLC(1) Revolver 484 —
Protego Bidco B.V.(1)(2)(3) Delayed Draw Term Loan 826 844
QPE7 SPV1 BidCo Pty Ltd(1)(2)(5) Acquisition Term Loan — 373
RA Outdoors, LLC(1) Revolver 741 —
Rep Seko Merger Sub LLC(1) Delayed Draw Term Loan 1,305 1,455
Reward Gateway (UK) Ltd(1)(2)(4) Acquisition Facility 657 1,061
Riedel Beheer B.V.(1)(2)(3) Revolver — 230
Riedel Beheer B.V.(1)(2)(3) Delayed Draw Term Loan 150 153
Scaled Agile, Inc.(1)(2) Delayed Draw Term Loan 416 416
Scaled Agile, Inc.(1)(2) Revolver 336 336
Security Holdings B.V.(1)(2)(3) Delayed Draw Term Loan 2,225 2,274
Security Holdings B.V.(1)(2)(3) Revolver 1,113 1,137
Smartling, Inc.(1) Delayed Draw Term Loan 1,978 2,353
Smartling, Inc.(1) Revolver 1,176 1,176
Smile Brands Group, Inc.(1)(2) Delayed Draw Term Loan 418 655
Springbrook Software (SBRK Intermediate, Inc.)(1)(2) Delayed Draw Term Loan 2,372 2,373
SSCP Pegasus Midco Limited(1)(4) Delayed Draw Term Loan 5,105 5,251
Superjet Buyer, LLC(1) Revolver 1,825 1,825
Syntax Systems Ltd(1)(2) Revolver 448 569
Syntax Systems Ltd(1)(2) Delayed Draw Term Loan 1,933 1,933
Tank Holding Corp(1) Revolver 873 —
Techone B.V.(1)(2)(3) Delayed Draw Term Loan 1,586 1,621
Techone B.V.(1)(2)(3) Revolver 423 432
Tencarva Machinery Company, LLC(1) Delayed Draw Term Loan 886 886
Tencarva Machinery Company, LLC(1) Revolver 1,128 1,129
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC)(1) Delayed Draw Term Loan 2,811 2,811
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC)(1) Revolver 827 827
The Hilb Group, LLC(1) Delayed Draw Term Loan 2,529 2,773
Thermacell Repellents, Inc.(1) Revolver 605 —
Transit Technologies LLC(1)(2) Delayed Draw Term Loan — 1,857
Truck-Lite Co., LLC(1) Delayed Draw Term Loan 4,540 4,540
Turbo Buyer, Inc.(1) Delayed Draw Term Loan 1,339 2,070
Turbo Buyer, Inc.(1) Delayed Draw Term Loan 2,250 —
USLS Acquisition, Inc.(f/k/a US Legal Support, Inc.)(1)(2) Delayed Draw Term Loan 3,820 —
Victoria Bidco Limited(1)(2)(4) Delayed Draw Term Loan 458 —
Waccamaw River, LLC(2) Joint Venture 4,580 11,280
W2O Holdings, Inc.(1) Delayed Draw Term Loan 3,831 3,832
West Dermatology, LLC(1) Revolver 552 —

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

Portfolio Company <br>($ in thousands) Investment Type March 31, 2022 December 31, 2021
West Dermatology, LLC(1) Delayed Draw Term Loan 3,352 —
West Dermatology, LLC(1) PIK Delayed Draw Term Loan 144 —
Woodland Foods, Inc.(1) Revolver 1,734 2,070
ZB Holdco LLC(1) Revolver 845 —
ZB Holdco LLC(1) Delayed Draw Term Loan 1,352 —
Zeppelin Bidco Limited(1)(2)(4) Capex / Acquisition Facility 3,472 —
Zeppelin Bidco Limited(1)(2)(4) Revolver 579 —
Total unused commitments to extend financing $ 220,360 $ 234,658

(1)The Company's estimate of the fair value of the current investments in these portfolio companies includes an analysis of the fair value of any unfunded commitments.

(2)Represents a commitment to extend financing to a portfolio company where one or more of the Company's current investments in the portfolio company are carried at less than cost.

(3)Actual commitment amount is denominated in Euros. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(4)Actual commitment amount is denominated in British pounds sterling.Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(5)Actual commitment amount is denominated in Australian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(6)Actual commitment amount is denominated in Canadian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(7)Actual commitment amount is denominated in New Zealand dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

In the normal course of business, the Company guarantees certain obligations in connection with its portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable. As of March 31, 2022 and December 31, 2021, the Company had guaranteed €9.9 million ($11.0 million U.S. dollars and $11.3 million U.S. dollars, respectively) relating to credit facilities among Erste Bank and MVC Automotive Group Gmbh ("MVC Auto"). The Company would be required to make payments to Erste Bank if MVC Auto were to default on their related payment obligations. None of the credit facility guarantees are recorded as a liability on the Company's Unaudited and Audited Consolidated Balance Sheets, as such the credit facility liabilities are considered in the valuation of the investments in MVC Auto. The guarantees denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

Neither the Company, the Adviser, nor the Company’s subsidiaries are currently subject to any material pending legal proceedings, other than ordinary routine litigation incidental to their respective businesses. The Company, the Adviser, and the Company’s subsidiaries may from time to time, however, be involved in litigation arising out of operations in the normal course of business or otherwise, including in connection with strategic transactions. Furthermore, third parties may seek to impose liability on the Company in connection with the activities of its portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, the Company does not expect any current matters will materially affect its financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on the Company’s financial condition or results of operations in any future reporting period.

COVID-19 Developments

During the three months ended March 31, 2022, the Coronavirus and the COVID-19 pandemic continued to have a significant impact on the U.S and global economies. To the extent the Company's portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on the Company's future net investment income, the fair value of its portfolio investments, its financial condition and the results of operations and financial condition of the Company's portfolio companies.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

  1. FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,
($ in thousands, except share and per share amounts) 2022 2021
Per share data:
Net asset value at beginning of period $ 11.36 $ 10.99
Net investment income(1) 0.23 0.22
Net realized gain (loss) on investments / foreign currency transactions(1) (0.02) 0.03
Net unrealized appreciation on investments / CSA / foreign currency transactions(1) 0.04 0.10
Total increase (decrease) from investment operations(1) 0.25 0.35
Dividends/distributions paid to stockholders from net investment income (0.23) (0.19)
Common stock offering (0.60) —
Deemed contribution - CSA 0.54 —
Deemed contribution - Barings LLC 0.34 —
Other 0.20 (0.01)
Net asset value at end of period $ 11.86 $ 11.14
Market value at end of period(2) $ 10.34 $ 9.98
Shares outstanding at end of period 111,095,334 65,316,085
Net assets at end of period $ 1,317,556 $ 727,883
Average net assets $ 929,432 $ 727,273
Ratio of total expenses, including loss on extinguishment of debt and provision for taxes, to average net assets (annualized)(3) 10.65 % 8.92 %
Ratio of net investment income to average net assets (annualized) 8.18 % 7.91 %
Portfolio turnover ratio (annualized)(4) 8.81 % 16.82 %
Total return(5) (4.16) % 10.54 %

(1)Weighted average per share data—basic and diluted; per share data was derived by using the weighted average shares outstanding during the applicable period.

(2)Represents the closing price of the Company’s common stock on the last day of the period.

(3)Does not include expenses of underlying investment companies, including joint ventures and short-term investments.

(4)Portfolio turnover ratio as of March 31, 2022 and 2021 excludes the impact of short-term investments. Portfolio ratio as of March 31, 2022 excludes the impact of the Sierra Acquisition.

(5)Total return is based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by the Company's dividend reinvestment plan during the period. Total return is not annualized.

  1. SIERRA ACQUISITION

On February 25, 2022, the Company completed the Sierra Acquisition pursuant to the terms and conditions of that certain Agreement and Plan of Merger (the “Sierra Merger Agreement”), dated as of September 21, 2021, by and among the Company, Mercury Acquisition Sub, Inc., a Maryland corporation and a direct wholly owned subsidiary of the Company (“Sierra Acquisition Sub”), Sierra Income Corporation, a Maryland corporation (“Sierra”), and Barings. To effect the acquisition, Sierra Acquisition Sub merged with and into Sierra, with Sierra surviving the merger as the Company’s wholly owned subsidiary (the “First Sierra Merger”). Immediately thereafter, Sierra merged with and into the Company, with the Company as the surviving company (the “Second Sierra Merger” and, together with the First Sierra Merger, the “Sierra Merger”). The Merger has been treated as a “reorganization” within the meaning of Section 368(a)(1)(A) of the Code.

Pursuant to the Sierra Merger Agreement, Sierra stockholders received the right to the following merger consideration in exchange for each share of Sierra common stock issued and outstanding immediately prior to the effective time of the First Sierra Merger (excluding any shares cancelled pursuant to the Sierra Merger Agreement): (i) approximately $0.9783641 per share in cash, without interest, from Barings and (ii) 0.44973 of a validly issued, fully paid and non-assessable share of the Company’s common stock. The Company issued approximately 45,986,926 shares of its common stock to Sierra’s former stockholders in connection with the Sierra Merger, thereby resulting in the Company’s then-existing stockholders owning approximately 58.7% of the combined company and Sierra’s former stockholders owning approximately 41.3% of the combined company.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

In connection with the completion of the Company’s acquisition of Sierra, the Board affirmed the Company’s commitment to make open-market purchases of shares of its common stock in an aggregate amount of up to $30.0 million at then-current market prices at any time shares trade below 90% of the Company’s then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period commencing on April 1, 2022 and are expected to be made in accordance with a Rule 10b5-1 purchase plan that qualifies for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Exchange Act, as well as subject to compliance with the Company’s covenant and regulatory requirements.

In connection with the Sierra Acquisition, on February 25, 2022, the Company entered into the New Barings BDC Advisory Agreement with the Adviser. Promptly following the closing of the Sierra Merger, the Company also entered into the Sierra Credit Support Agreement with Barings. See “Note 2 - Agreements and Related Party Transactions” for more information regarding the New Barings BDC Advisory Agreement and the Sierra Credit Support Agreement.

The Sierra Acquisition was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations-Related Issues. Under asset acquisition accounting, acquiring assets in groups not only requires ascertaining the cost of the asset (or net assets), but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. Per ASC 805-50-30-1, the acquired assets (as a group) are recognized based on their cost to the acquiring entity, which generally includes transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets carrying amounts on the acquiring entity’s records. ASC 805-50-30-2 goes on to say asset acquisitions in which the consideration given is cash are measured by the amount of cash paid. However, if the consideration given is not in the form of cash (that is, in the form of noncash assets, liabilities incurred, or equity interests issued), measurement is based on the cost to the acquiring entity or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measured.

The fair value of the merger consideration paid by the Company was allocated to the assets acquired and liabilities assumed based on their relative fair values as of the date of acquisition and did not give rise to goodwill. Since the fair value of the net assets acquired exceeded the fair value of the merger consideration paid by the Company, the Company recognized a deemed contribution from the Adviser.

The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed as a result of the Sierra Acquisition:

( in thousands)
Common stock issued by the Company 499,418
Cash consideration paid by the Company(1)
Deemed contribution from Barings LLC
Total purchase price 537,817
Assets acquired:
Investments(2) 442,198
Cash
Other assets(3)
Total assets acquired 547,723
Liabilities assumed(4)
Net assets acquired 537,817

All values are in US Dollars.

(1)The Company incurred $10.4 million in professional fees and other costs related to the Sierra Acquisition, including $4.0 million in investment banking fees.

(2)Investments acquired were recorded at fair value, which is also the Company's initial cost basis

(3)Other assets acquired in the Sierra Acquisition consisted of the following:

( in thousands)
Interest and fees receivable 2,874
Escrow receivable
Total 3,519

All values are in US Dollars.

Barings BDC, Inc.

Notes to Unaudited Consolidated Financial Statements — (Continued)

(4)Liabilities assumed in the Sierra Acquisition consisted of the following:

( in thousands)
Accrued merger expenses 3,327
Current and deferred tax liability
Other liabilities
Total 9,906

All values are in US Dollars.

  1. SUBSEQUENT EVENTS

Subsequent to March 31, 2022, the Company made approximately $174.4 million of new commitments, of which $141.0 million closed and funded. The $141.0 million of investments consists of $120.9 million of first lien senior secured debt investments, $16.2 million of second lien senior secured and subordinated debt investments and $3.8 million of equity investments. The weighted average yield of the debt investments was 7.1%. In addition, the Company funded $15.0 million of previously committed delayed draw term loans.

Effective on April 1, 2022, the Company increased aggregate commitments under the February 2019 Credit Facility to $1.1 billion from $965.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.5 billion subject to certain conditions and the satisfaction of specified financial covenants.

On May 5, 2022, the Board declared a quarterly distribution of $0.24 per share payable on June 15, 2022 to holders of record as of June 8, 2022.

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

The following discussion is designed to provide a better understanding of our unaudited consolidated financial statements for the three months ended March 31, 2022, including a brief discussion of our business, key factors that impacted our performance and a summary of our operating results. The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2021. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.

Forward-Looking Statements

Some of the statements in this Quarterly Report constitute forward-looking statements because they relate to future events or our future performance or financial condition. Forward-looking statements may include, among other things, statements as to our future operating results, our business prospects and the prospects of our portfolio companies, the impact of the investments that we expect to make, the ability of our portfolio companies to achieve their objectives, our expected financings and investments, the adequacy of our cash resources and working capital, and the timing of cash flows, if any, from the operations of our portfolio companies. Words such as "expect," "anticipate," "target," "goals," "project," "intend," "plan," "believe," "seek," "estimate," "continue," "forecast," "may," "should," "potential," variations of such words, and similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. Readers are cautioned that the forward-looking statements contained in this Quarterly Report are only predictions, are not guarantees of future performance, and are subject to risks, events, uncertainties and assumptions that are difficult to predict. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the items discussed herein, in Item 1A entitled "Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended December 31, 2021 and in Item 1A entitled "Risk Factors" in Part II of our subsequently filed Quarterly Reports on Form 10-Q. Other factors that could cause our actual results and financial condition to differ materially include, but are not limited to, changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including with respect to changes from the impact of the COVID-19 pandemic; the length and duration of the COVID-19 outbreak in the United States as well as worldwide and the magnitude of the economic impact of that outbreak; the effect of the COVID-19 pandemic on our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives; the effect of the disruptions caused by the COVID-19 pandemic on our ability to continue to effectively manage our business and on the availability of equity and debt capital and our use of borrowed money to finance a portion of our investments; risks associated with possible disruption due to terrorism in our operations or the economy generally; and future changes in laws or regulations and conditions in our operating areas. These statements are based on our current expectations, estimates, forecasts, information and projections about the industry in which we operate and the beliefs and assumptions of our management as of the date of filing of this Quarterly Report. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless we are required to do so by law. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Overview of Our Business

We are a Maryland corporation incorporated on October 10, 2006. In August 2018, in connection with the closing of an externalization transaction through which Barings LLC (“Barings”) agreed to become our external investment adviser, we entered into an investment advisory agreement (the “Original Advisory Agreement”) and an administration agreement (the “Administration Agreement”) with Barings. In connection with the completion of our acquisition of MVC Capital, Inc., a Delaware corporation, on December 23, 2020 (the “MVC Acquisition”), we entered into an amended and restated investment advisory agreement (the “Amended and Restated Advisory Agreement”) with Barings on December 23, 2020, following approval of the Amended and Restated Advisory Agreement by our stockholders at our December 23, 2020 special meeting of stockholders. The terms of the Amended and Restated Advisory Agreement became effective on January 1, 2021. In connection with the completion of the Sierra Acquisition (as defined below), on February 25, 2022, we entered into a second amended and restated investment advisory agreement (the “New Barings BDC Advisory Agreement”) with the Adviser. Under the terms of the New Barings BDC Advisory Agreement and the Administration Agreement, Barings serves as our investment adviser and administrator and manages our investment portfolio and performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operation.

An externally-managed BDC generally does not have any employees, and its investment and management functions are provided by an outside investment adviser and administrator under an advisory agreement and administration agreement. Instead of directly compensating employees, we pay Barings for investment management and administrative services pursuant to the terms of an investment advisory agreement and an administration agreement. Under the terms of the New Barings BDC Advisory Agreement, the fees paid to Barings for managing our affairs are determined based upon an objective and fixed formula, as compared with the subjective and variable nature of the costs associated with employing management and employees in an internally-managed BDC structure, which include bonuses that cannot be directly tied to Company performance because of restrictions on incentive compensation under the Investment Company Act of 1940, as amended (the “1940 Act”).

Beginning in August 2018, Barings shifted our investment focus to invest in syndicated senior secured loans, bonds and other fixed income securities. Since that time, Barings has transitioned our portfolio to primarily senior secured private debt investments in well-established middle-market businesses that operate across a wide range of industries. Barings’ existing SEC co-investment exemptive relief under the 1940 Act (the “Exemptive Relief”) permits us and Barings’ affiliated private and SEC-registered funds to co-invest in Barings-originated loans, which allows Barings to efficiently implement its senior secured private debt investment strategy for us.

Barings employs fundamental credit analysis, and targets investments in businesses with relatively low levels of cyclicality and operating risk. The holding size of each position will generally be dependent upon a number of factors including total facility size, pricing and structure, and the number of other lenders in the facility. Barings has experience managing levered vehicles, both public and private, and will seek to enhance our returns through the use of leverage with a prudent approach that prioritizes capital preservation. Barings believes this strategy and approach offers attractive risk/return with lower volatility given the potential for fewer defaults and greater resilience through market cycles. A significant portion of our investments are expected to be rated below investment grade by rating agencies or, if unrated would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.

We generate revenues in the form of interest income, primarily from our investments in debt securities, loan origination and other fees and dividend income. Fees generated in connection with our debt investments are recognized over the life of the loan using the effective interest method or, in some cases, recognized as earned. Our senior secured, middle-market, private debt investments generally have terms of between five and seven years. Our senior secured, middle-market, first lien private debt investments generally bear interest between LIBOR (or the applicable currency rate for investments in foreign currencies) plus 450 basis points and LIBOR plus 650 basis points per annum. Our subordinated middle-market, private debt investments generally bear interest between LIBOR (or the applicable currency rate for investments in foreign currencies) plus 700 basis points and LIBOR plus 900 basis points per annum if floating rate, and between 8% and 15% if fixed rate. From time to time, certain of our investments may have a form of interest, referred to as payment-in-kind, or PIK, interest, which is not paid currently but is instead accrued and added to the loan balance and paid at the end of the term.

As of March 31, 2022 and December 31, 2021, the weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was approximately 7.3% and 7.2%, respectively. The weighted average yield on the principal amount of all of our outstanding debt investments (including non-accrual debt investments) was approximately 6.8% and 6.9% as of March 31, 2022 and December 31, 2021, respectively.

Sierra Income Corporation Acquisition

On February 25, 2022, we completed our acquisition of Sierra Income Corporation, a Maryland corporation (“Sierra”), pursuant to the terms and conditions of that certain Agreement and Plan of Merger (the “Sierra Merger Agreement”), dated as of September 21, 2021, with Sierra, Mercury Acquisition Sub, Inc., a Maryland corporation and our direct wholly owned subsidiary (“Sierra Acquisition Sub”), and Barings. To effect the acquisition, Sierra Acquisition Sub merged with and into Sierra, with Sierra surviving the merger as our wholly owned subsidiary (the “First Sierra Merger”). Immediately thereafter, Sierra merged with and into us, with Barings BDC, Inc. as the surviving company (the “Second Sierra Merger” and, together with the First Sierra Merger, the “Sierra Merger”).

Pursuant to the Sierra Merger Agreement, each share of Sierra common stock, par value $0.001 per share (the “Sierra Common Stock”), issued and outstanding immediately prior to the effective time of the First Sierra Merger (other than shares of Sierra Common Stock issued and outstanding immediately prior to the effective time of the First Sierra Merger that were held by a subsidiary of Sierra or held, directly or indirectly, by us or Sierra Acquisition Sub) was converted into the right to receive (i) an amount in cash from Barings, without interest, equal to $0.9783641, and (ii) 0.44973 shares of the our common stock, plus any cash in lieu of fractional shares. As a result of the Sierra Merger, former Sierra stockholders received approximately 46.0 million shares of our common stock for their shares of Sierra Common Stock.

In connection with the Sierra Acquisition, on February 25, 2022, following the closing of the Sierra Merger, we entered into (1) the New Barings BDC Advisory Agreement, and (2) a credit support agreement (the “Sierra Credit Support Agreement”) with Barings, pursuant to which Barings has agreed to provide credit support to us in the amount of up to $100.0 million relating to the net cumulative realized and unrealized losses on the acquired Sierra investment portfolio over a 10-year period. See “Note 2. Agreements and Related Party Transactions” and “Note. 6 Derivative Instruments” in the Notes to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for more information.

In addition, in connection with the closing of the Sierra Merger, our board of directors (the “Board”) affirmed our commitment to purchase in open-market transactions, pursuant to Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and subject to our compliance with our covenant and regulatory requirements, shares of our common stock in an aggregate amount of up to $30,000,000 at then-current market prices at any time the shares of our common stock trade below 90% of our then most recently disclosed net asset value per share during the 12-month period commencing on April 1, 2022.

COVID-19 Developments

The spread of the Coronavirus and the COVID-19 pandemic, and the related effect on the U.S. and global economies, has had adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of Barings, including with respect to us. Barings has taken proactive steps around COVID-19 to address the potential impacts on their people, clients, communities and everyone they come in contact with, directly or through their premises. Protecting their employees and supporting the communities in which they live and work is a priority. Barings has now adopted a hybrid working model globally while maintaining service levels to our partners and clients. Barings’ return-to-office taskforce continues to monitor the COVID-19 situation globally and is prepared to adapt office working patterns as required to ensure the safety of its employees and clients who visit Barings office locations. Barings’ cybersecurity policies are applied consistently when working remotely or in the office.

While we have been carefully monitoring the COVID-19 pandemic and its impact on our business and the business of our portfolio companies, we have continued to fund our existing debt commitments. In addition, we have continued to make and originate, and expect to continue to make and originate, new loans.

We cannot predict the full impact of the COVID-19 pandemic, including its duration in the United States and worldwide and the magnitude of the economic impact of the outbreak, including with respect to the travel restrictions, business closures and other quarantine measures imposed on service providers and other individuals by various local, state, and federal governmental authorities, as well as non-U.S. governmental authorities. We are unable to predict the extent and duration of any business and supply-chain disruptions, the extent to which COVID-19 will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition. Depending on the duration and extent of the disruption to the operations of our portfolio companies, certain portfolio companies could experience financial distress and possibly default on their financial obligations to us and their other capital providers. Some of our portfolio companies may significantly curtail business operations, furlough or lay off employees and terminate service providers, and defer capital expenditures if subjected to prolonged and severe financial distress, which would likely impair their business on a permanent basis. These developments would likely result in a decrease in the value of our investment in any such portfolio company.

We will continue to monitor the situation relating to the COVID-19 pandemic and guidance from U.S. and international authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. In these circumstances, there may be developments outside our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows in the future. However, to the extent our portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on our future net investment income, the fair value of our portfolio investments, our financial condition and the results of operations and financial condition of our portfolio companies.

Relationship with Our Adviser, Barings

Our investment adviser, Barings, a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company, is a leading global asset management firm and is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. Barings’ primary investment capabilities include fixed income, private credit, real estate, equity, and alternative investments. Subject to the overall supervision of the Board, Barings’ Global Private Finance Group (“BGPF”) manages our day-to-day operations, and provides investment advisory and management services to us. BGPF is part of Barings’ $290.9 billion Global Fixed Income Platform that invests in liquid, private and structured credit. BGPF manages private funds and separately managed accounts, along with multiple public vehicles.

Among other things, Barings (i) determines the composition of our portfolio, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identifies, evaluates and negotiates the structure of the investments made by us; (iii) executes, closes, services and monitors the investments that we make; (iv) determines the securities and other assets that we will purchase, retain or sell; (v) performs due diligence on prospective portfolio companies and (vi) provides us with such other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of our funds.

Under the terms of the Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operation, including, but not limited to, office facilities, equipment, clerical, bookkeeping and record keeping services at such office facilities and such other services as Barings, subject to review by the Board, will from time to time determine to be necessary or useful to perform its obligations under the Administration Agreement. Barings also, on our behalf and subject to the Board’s oversight, arranges for the services of, and oversees, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. Barings is responsible for the financial and other records that we are required to maintain and will prepare all reports and other materials required to be filed with the SEC or any other regulatory authority.

Stockholder Approval of Reduced Asset Coverage Ratio

On July 24, 2018, our stockholders voted at a special meeting of stockholders (the “2018 Special Meeting”) to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the 2018 Special Meeting, effective July 25, 2018, our applicable asset coverage ratio under the 1940 Act has been decreased to 150% from 200%. As a result, we are permitted under the 1940 Act to incur indebtedness at a level which is more consistent with a portfolio of senior secured debt. As of March 31, 2022, our asset coverage ratio was 188.9%.

Portfolio Investment Composition

The total value of our investment portfolio was $2,403.4 million as of March 31, 2022, as compared to $1,800.6 million as of December 31, 2021. As of March 31, 2022, we had investments in 287 portfolio companies with an aggregate cost of $2,391.6 million. As of December 31, 2021, we had investments in 212 portfolio companies with an aggregate cost of $1,787.8 million. As of both March 31, 2022 and December 31, 2021, none of our portfolio investments represented greater than 10% of the total fair value of our investment portfolio.

As of March 31, 2022 and December 31, 2021, our investment portfolio consisted of the following investments:

($ in thousands) Cost Percentage of<br>Total<br>Portfolio Fair Value Percentage of<br>Total<br>Portfolio
March 31, 2022:
Senior debt and 1st lien notes $ 1,560,223 65 % $ 1,555,746 65 %
Subordinated debt and 2nd lien notes 346,381 14 317,643 13
Structured products 84,056 4 82,014 3
Equity shares 170,691 7 219,466 9
Equity warrants 174 — 156 —
Investment in joint ventures / PE fund 230,076 10 228,400 10
$ 2,391,601 100 % $ 2,403,425 100 %
December 31, 2021:
Senior debt and 1st lien notes $ 1,217,899 68 % $ 1,221,598 68 %
Subordinated debt and 2nd lien notes 253,551 14 240,037 13
Structured products 37,055 2 40,271 2
Equity shares 145,791 8 154,477 9
Equity warrants 1,111 — 1,107 —
Investment in joint ventures / PE fund 132,417 8 143,104 8
$ 1,787,824 100 % $ 1,800,594 100 %

Investment Activity

During the three months ended March 31, 2022, we made 22 new investments totaling $229.3 million, purchased $442.2 million of investments as part of the Sierra Acquisition, made investments in existing portfolio companies totaling $89.3 million and made additional investments in joint venture equity portfolio companies totaling $11.7 million. We had four loans repaid totaling $12.4 million and received $7.5 million of portfolio company principal payments. In addition, we sold $19.2 million of loans, recognizing a net realized gain on these transactions of $0.8 million, and sold $132.3 million of middle-market portfolio company debt investments to one of our joint ventures and realized a loss on these transactions of $0.2 million. Lastly, we received proceeds related to the sale of equity investments totaling $1.6 million and recognized a net realized loss on such sales totaling $0.7 million.

During the three months ended March 31, 2021, we made 18 new investments totaling $172.2 million, made investments in existing portfolio companies totaling $73.2 million, made one new investment in a joint venture equity portfolio company totaling $4.5 million and made additional investments in existing joint venture equity portfolio companies totaling $25.0 million. We had six loans repaid at par totaling $26.2 million and received $6.0 million of portfolio company principal payments. In addition, we sold $57.1 million of loans, recognizing a net realized gain on these transactions of $2.4 million, and sold $94.7 million of middle-market portfolio company debt investments to one of our joint ventures and realized a gain on these transactions of $0.5 million. Lastly, we received proceeds related to the sale of an equity investment totaling $5.9 million and recognized a net realized loss on such sale totaling $0.1 million.

Total portfolio investment activity for the three months ended March 31, 2022 and 2021 was as follows:

Three Months Ended<br><br>March 31, 2022:<br><br>($ in thousands) Senior Debt<br>and 1st Lien<br>Notes Subordinated Debt and 2nd Lien Notes Structured Products Equity<br>Shares Equity Warrants Investments in Joint Ventures / PE Fund Total
Fair value, beginning of period $ 1,221,598 $ 240,037 $ 40,271 $ 154,477 $ 1,107 $ 143,104 $ 1,800,594
New investments 268,202 30,065 1,060 19,200 — 11,696 330,223
Investments acquired in Sierra merger 235,770 66,662 46,666 7,065 72 85,963 442,198
Proceeds from sales of investments (151,575) — — (1,388) (249) — (153,212)
Loan origination fees received (5,350) 36 — — — — (5,314)
Principal repayments received (8,114) (11,020) (730) — — — (19,864)
Payment-in-kind interest 1,050 6,984 — — — 8,034
Accretion of loan premium/discount 301 33 5 — — — 339
Accretion of deferred loan origination revenue 1,461 62 — — — — 1,523
Realized gain (loss) 579 8 — 24 (760) — (149)
Unrealized appreciation (depreciation) (8,176) (15,224) (5,258) 40,088 (14) (12,363) (947)
Fair value, end of period $ 1,555,746 $ 317,643 $ 82,014 $ 219,466 $ 156 $ 228,400 $ 2,403,425
Three Months Ended<br><br>March 31, 2021:<br><br>($ in thousands) Senior Debt<br>and 1st Lien<br>Notes Subordinated Debt and 2nd Lien Notes Structured Products Equity<br>Shares Equity Warrants Investments in Joint Ventures / PE Fund Short-term<br>Investments Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Fair value, beginning of period $ 1,171,250 $ 138,767 $ 32,509 $ 44,651 $ 1,300 $ 41,760 $ 65,558 $ 1,495,795
New investments 227,057 14,479 — 3,873 — 29,500 198,550 473,459
Proceeds from sales of investments (144,893) — (6,823) (5,972) — — (190,542) (348,230)
Loan origination fees received (4,176) (402) — — — — — (4,578)
Principal repayments received (21,392) (10,120) (753) — — — — (32,265)
Payment-in-kind interest 829 7,007 — — — — — 7,836
Accretion of loan premium/discount 645 1,319 16 — — — — 1,980
Accretion of deferred loan origination revenue 1,270 211 — — — — — 1,481
Realized gain (loss) 2,207 3 652 (51) — — 3 2,814
Unrealized appreciation (depreciation) 5,381 (666) 553 (2,883) 134 1,316 (3) 3,832
Fair value, end of period $ 1,238,178 $ 150,598 $ 26,154 $ 39,618 $ 1,434 $ 72,576 $ 73,566 $ 1,602,124

Non-Accrual Assets

Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of March 31, 2022, we had seven portfolio companies with investments on non-accrual, the fair value of which was $42.9 million, which comprised 1.8% of the total fair value of our portfolio, and the cost of which was $71.3 million, which comprised 3.0% of the total cost of our portfolio. As of December 31, 2021, we had two portfolio companies with investments on non-accrual, the fair value of which was $36.0 million, which comprised 2.0% of the total fair value of our portfolio, and the cost of which was $50.9 million, which comprised 2.9% of the total cost of our portfolio.

A summary of our non-accrual assets as of March 31, 2022 is provided below:

1888 Industrial Services, LLC

In connection with the Sierra Acquisition, we purchased our debt and equity investments in 1888 Industrial Services, LLC, or 1888. The 1888 first lien senior secured term loan is on non-accrual status and as a result, under U.S. GAAP, we will not recognize interest income on our first lien senior secured term loan in 1888 for financial reporting purposes. As of March 31, 2022, the cost and fair of our first lien senior secured term loan in 1888 was $0.4 million and $0.2 million, respectively.

Black Angus Steakhouse, LLC

In connection with the Sierra Acquisition, we purchased our debt and equity investments in Black Angus Steakhouse, LLC, or Black Angus. The Black Angus PIK term loan is on non-accrual status and as a result, under U.S. GAAP, we will not recognize interest income on our PIK term loan in Black Angus for financial reporting purposes. As of March 31, 2022, both the cost and fair value of our PIK term loan in Black Angus was $9.6 million.

Charming Charlie LLC

In connection with the Sierra Acquisition, we purchased our debt and equity investments in Charming Charlie, LLC, or Charming Charlie. Charming Charlie is on non-accrual status and as a result, under U.S. GAAP, we will not recognize interest income on our debt investments in Charming Charlie for financial reporting purposes. As of March 31, 2022, both the cost and fair value of our debt investments in Charming Charlie was zero.

Custom Alloy Corporation

In connection with the MVC Acquisition, we purchased our debt investment in Custom Alloy Corporation, or Custom Alloy. During the quarter ended December 31, 2021, we placed our debt investment in Custom Alloy on non-accrual status. As a result, under U.S. GAAP, we will not recognize interest income on our debt investment in Custom Alloy for financial reporting purposes. As of March 31, 2022, the cost of our debt investment in Custom Alloy was $46.4 million and the fair value of such investment was $28.6 million.

Holland Acquisition Corp.

In connection with the Sierra Acquisition, we purchased our debt investment in Holland Acquisition Corp., or Holland. Holland is on non-accrual status and as a result, under U.S. GAAP, we will not recognize interest income on our debt investments in Holland for financial reporting purposes. As of March 31, 2022, both the cost and fair value of our debt investments in Holland was zero.

Legal Solutions Holdings

In connection with the MVC Acquisition, we purchased our debt investment in Legal Solutions Holdings, or Legal Solutions. During the quarter ended September 30, 2021, we placed our debt investment in Legal Solutions on non-accrual status. As a result, under U.S. GAAP, we will not recognize interest income on our debt investment in Legal Solutions for financial reporting purposes. As of March 31, 2022, the cost of our debt investment in Legal Solutions was $10.1 million and the fair value of such investment was zero.

Path Medical LLC

In connection with the Sierra Acquisition, we purchased our debt and equity investments in Path Medical LLC, or Path Medical. Path Medical is on non-accrual status and as a result, under U.S. GAAP, we will not recognize interest income on our debt investments in Path Medical for financial reporting purposes. As of March 31, 2022, both the cost and fair value of our debt investments in Path Medical was $4.6 million.

Results of Operations

Comparison of the three months ended March 31, 2022 and March 31, 2021

Operating results for the three months ended March 31, 2022 and 2021 were as follows:

Three Months<br><br>Ended Three Months<br><br>Ended
(in thousands) March 31,<br>2022 March 31,<br>2021
Total investment income $ 43,757 $ 30,593
Total operating expenses 24,742 16,237
Net investment income before taxes 19,015 14,356
Income taxes, including excise tax provision 6 (18)
Net investment income after taxes 19,009 14,374
Net realized gains (losses) (1,442) 1,839
Net unrealized appreciation 3,465 6,275
Net increase in net assets resulting from operations $ 21,032 $ 22,488

Net increases or decreases in net assets resulting from operations can vary substantially from period to period due to various factors, including recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net changes in net assets resulting from operations may not be meaningful.

Investment Income

Three Months<br>Ended Three Months<br>Ended
($ in thousands) March 31,<br>2022 March 31,<br>2021
Investment income:
Total interest income $ 32,069 $ 25,214
Total dividend income 7,693 72
Total fee and other income 1,197 2,133
Total payment-in-kind interest income 2,798 3,173
Interest income from cash — 1
Total investment income $ 43,757 $ 30,593

The change in total investment income for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, was primarily due to an increase in the average size of our portfolio and increased dividends from portfolio companies and joint venture investments. The increase in the average size of our portfolio was largely due to the increased middle-market investment opportunities and the investments acquired as part of the Sierra Acquisition; however, as the Sierra Acquisition did not close until late in the first quarter of 2022, we did not receive a full quarter of investment income from the acquired Sierra portfolio. This increase was partial offset by a decrease in payment-in-kind (“PIK”) interest income and a decrease in acceleration of unamortized OID and unamortized loan origination fee income associated with repayments of loans. For the three months ended March 31, 2022, dividends from portfolio companies and joint venture investments were $7.7 million, as compared to $0.1 million for the three months ended March 31, 2021. The amount of our outstanding debt investments was $2,134.2 million as of March 31, 2022, as compared to $1,451.9 million as of March 31, 2021. This increase is in part due to the acquisition of investment assets in the Sierra Acquisition. The weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was 7.3% as of March 31, 2022, as compared to 7.2% as of March 31, 2021. For the three months ended March 31, 2022, PIK interest income was $2.8 million, as compared to $3.2 million for the three months ended March 31, 2021. For the three months ended March 31, 2022, acceleration of unamortized OID income and unamortized loan origination fees totaled $0.2 million, as compared to $0.4 million for the three months ended March 31, 2021.

Operating Expenses

Three Months<br>Ended Three Months<br>Ended
($ in thousands) March 31,<br>2022 March 31,<br>2021
Operating expenses:
Interest and other financing fees $ 11,661 $ 7,285
Base management fees 5,872 3,929
Incentive management fees 4,754 2,722
General and administrative expenses 2,455 2,301
Total operating expenses $ 24,742 $ 16,237

Interest and Other Financing Fees

Interest and other financing fees during the three months ended March 31, 2022 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes, the February Notes and the November 2026 Notes (each as defined below under “Liquidity and Capital Resources”). Interest and other financing fees during the three months ended March 31, 2021 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes and the February Notes. The increase in interest and other financing fees for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021, was primarily attributable to the issuance of the February Notes and the November 2026 Notes and increased borrowings under the February 2019 Credit Facility.

Base Management Fees

Under the terms of the New Barings BDC Advisory Agreement, we pay Barings a base management fee (the “Base Management Fee”), quarterly in arrears on a calendar quarter basis. The Base Management Fee is calculated based on the average value of our gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are being calculated. Base Management Fees for any partial month or quarter are appropriately pro-rated. See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the New Barings BDC Advisory Agreement (and, from January 1, 2021 to February 25, 2022, the terms of the Amended and Restated Advisory Agreement) and the fee arrangements thereunder. For the three months ended March 31, 2022, the amount of Base Management Fee incurred was approximately $5.9 million. For the three months ended March 31, 2021, the amount of Base Management Fee incurred was approximately $3.9 million. The increase in the Base Management Fee for the three months ended March 31, 2022 versus the corresponding 2021 period is primarily related to the average value of gross assets increasing from $1,257.4 million as of the end of the two most recently completed calendar quarters prior to March 31, 2021 to $1,879.0 million as of the end of the two most recently completed calendar quarters prior to March 31, 2022. For both the three months ended March 31, 2022 and 2021, the Base Management Fee rate was 1.250%.

Incentive Fee

Under the New Barings BDC Advisory Agreement (and, from January 1, 2021 to February 25, 2022, pursuant to the terms of the Amended and Restated Advisory Agreement), we pay Barings an incentive fee. A portion of the incentive fee is based on our income and a portion is based on our capital gains. The income-based fee will be determined and paid quarterly in arrears based on the amount by which (x) the aggregate pre-incentive fee net investment income in respect of the current calendar quarter and the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after January 1, 2021, as the case may be (or the appropriate portion thereof in the case of any of our first eleven calendar quarters that commences on or after January 1, 2021) exceeds (y) the hurdle amount as calculated for the same period. See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the terms of the New Barings BDC Advisory Agreement and the fee arrangements thereunder. For the three months ended March 31, 2022, the amount of income-based fee incurred was $4.8 million, as compared to $2.7 million for the three months ended March 31, 2021.

General and Administrative Expenses

We entered into the Administration Agreement with Barings in August 2018. Under the terms of the Administration Agreement, Barings performs (or oversees, or arranges for, the performance of) the administrative services necessary for our operations. We will reimburse Barings for the costs and expenses incurred by it in performing its obligations and providing personnel and facilities under the Administration Agreement in an amount to be negotiated and mutually agreed to by us and Barings quarterly in arrears; provided that the agreed-upon quarterly expense amount will not exceed the amount of expenses that would otherwise be reimbursable by us under the Administration Agreement for the applicable quarterly period, and Barings will not be entitled to the recoupment of any amounts in excess of the agreed-upon quarterly expense amount. See Note 2 to our Unaudited Consolidated Financial Statements for additional information regarding the Administration Agreement. For the three months ended March 31, 2022, the amount of administration expense incurred and invoiced by Barings for expenses was approximately $1.0 million. For the three months ended March 31, 2021, the amount of administration expense incurred and invoiced by Barings for expenses was approximately $0.5 million. In addition to expenses incurred under the Administration Agreement, general and administrative expenses include Board fees, D&O insurance costs, as well as legal, valuation and accounting expenses.

Net Realized Gains (Losses)

Net realized gains (losses) during the three months ended March 31, 2022 and 2021 were as follows:

Three Months<br>Ended Three Months<br>Ended
($ in thousands) March 31,<br>2022 March 31,<br>2021
Net realized gain (losses):
Non-Control / Non-Affiliate investments $ (250) $ 2,891
Affiliate investments 101 (77)
Net realized gains (losses) on investments (149) 2,814
Foreign currency transactions (1,293) (975)
Net realized gains (losses) $ (1,442) $ 1,839

During the three months ended March 31, 2022, we recognized net realized losses totaling $1.4 million, which consisted primarily of a net loss on foreign currency transactions of $1.3 million. During the three months ended March 31, 2021, we recognized net realized gains totaling $1.8 million, which consisted primarily of a net gain on our loan portfolio of $2.8 million partially offset by a net loss on foreign currency transactions of $1.0 million.

Net Unrealized Appreciation (Depreciation)

Net unrealized appreciation (depreciation) during the three months ended March 31, 2022 and 2021 was as follows:

Three Months<br>Ended Three Months<br>Ended
($ in thousands) March 31,<br>2022 March 31,<br>2021
Net unrealized appreciation (depreciation):
Non-Control / Non-Affiliate investments $ (28,587) $ 5,357
Affiliate investments 12,996 2,445
Control investments 14,644 (3,969)
Net unrealized appreciation (depreciation) on investments (947) 3,833
Credit support agreements (400) (1,600)
Foreign currency transactions 4,812 4,042
Net unrealized appreciation $ 3,465 $ 6,275

During the three months ended March 31, 2022, we recorded net unrealized appreciation totaling $3.5 million, consisting of net unrealized appreciation on our current portfolio of $0.1 million and net unrealized appreciation related to foreign currency transactions of $4.8 million, net of unrealized depreciation of $0.4 million on the MVC credit support agreement with Barings and net unrealized depreciation reclassification adjustments of $1.0 million related to the net realized gains on the sales / repayments of certain investments. The net unrealized appreciation on our current portfolio of $0.1 million was driven primarily by credit or fundamental performance of investments of $27.8 million, partially offset by the impact of foreign currency exchange rates on investments of $4.7 million and broad market moves for investments of $23.1 million.

During the three months ended March 31, 2021, we recorded net unrealized appreciation totaling $6.3 million, consisting of net unrealized appreciation on our current portfolio of $6.4 million and net unrealized appreciation related to foreign currency transactions of $4.0 million, net of unrealized depreciation of $1.6 million on the MVC credit support agreement with Barings and net of unrealized depreciation reclassification adjustments of $2.6 million related to the net realized gains on the sales / repayments of certain investments. The net unrealized appreciation on our current portfolio of $6.4 million was driven primarily by broad market moves for investments of $13.8 million, partially offset by depreciation from the credit or fundamental performance of investments of $3.0 million and the impact of foreign currency exchange rates on investments of $4.4 million.

Liquidity and Capital Resources

We believe that our current cash and foreign currencies on hand, our available borrowing capacity under the February 2019 Credit Facility and our anticipated cash flows from operations will be adequate to meet our cash needs for our daily operations for at least the next twelve months. This “Liquidity and Capital Resources” section should be read in conjunction with “COVID-19 Developments” above, as well as with the notes to our Unaudited Consolidated Financial Statements.

Cash Flows

For the three months ended March 31, 2022, we experienced a net increase in cash in the amount of $70.2 million. During that period, our operating activities used $18.8 million in cash, consisting primarily of purchases of portfolio investments of $335.5 million, partially offset by net cash acquired from the acquisition of Sierra of $101.9 million and proceeds from sales or repayments of portfolio investments totaling $210.5 million. In addition, our financing activities provided net cash of $89.0 million, consisting of net borrowings under the February 2019 Credit Facility (as defined below under “Financing Transactions”) of $107.7 million, partially offset by dividends paid in the amount of $15.0 million and share repurchases of $2.1 million. As of March 31, 2022, we had $154.4 million of cash and foreign currencies on hand.

For the three months ended March 31, 2021, we experienced a net decrease in cash in the amount of $52.0 million. During that period, our operating activities used $85.1 million in cash, consisting primarily of purchases of portfolio investments of $276.5 million and purchases of short-term investments of $198.6 million, partially offset by proceeds from sales of portfolio investments totaling $188.2 million and sales of short-term investments of $190.5 million. In addition, our financing activities provided $33.1 million of cash, consisting of net proceeds of $149.8 million from the issuance of the February Notes, partially offset by net repayments under the February 2019 Credit Facility of $104.3 million and dividends paid in the amount of $12.4 million. As of March 31, 2021, we had $40.5 million of cash and foreign currencies on hand.

Financing Transactions

February 2019 Credit Facility

On February 21, 2019, we entered into a senior secured credit facility with ING Capital LLC (“ING”), as administrative agent, and the lenders party thereto (as amended, restated and otherwise modified from time to time, the “February 2019 Credit Facility”). The initial commitments under the February 2019 Credit Facility total $800.0 million. Effective on November 4, 2021, we increased aggregate commitments under the February 2019 Credit Facility to $875.0 million from $800.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants. Effective on February 25, 2022, we increased aggregate commitments under the February 2019 Credit Facility to $965.0 million from $875.0 million pursuant to the accordion feature under the February 2019 Credit Facility, and the allowance for an increase in the total commitments increased to $1.5 billion from $1.2 billion subject to certain conditions and the satisfaction of specified financial covenants. We can borrow foreign currencies directly under the February 2019 Credit Facility. The February 2019 Credit Facility, which is structured as a revolving credit facility, is secured primarily by a material portion of our assets and guaranteed by certain of our subsidiaries. Following the termination on June 30, 2020 of Barings BDC Senior Funding I, LLC’s (“BSF”) credit facility entered into in August 2018 with Bank of America, N.A. (the “August 2018 Credit Facility”), BSF became a subsidiary guarantor and its assets secure the February 2019 Credit Facility. The revolving period of the February 2019 Credit Facility ends on February 21, 2024, followed by a one-year repayment period with a maturity date of February 21, 2025.

Borrowings denominated in U.S. Dollars under the February 2019 Credit Facility bear interest, subject to our election, on a per annum basis equal to (i) the alternate base rate plus 1.25% (or 1.00% for so long as we maintain an investment grade credit rating) or (ii) the term Secured Overnight Financing Rate (“SOFR”) plus 2.25% (or 2.00% for so long as we maintain an investment grade credit rating) plus a credit spread adjustment of 0.10% for borrowings with an interest period of one month, 0.15% for borrowings with an interest period of three months or 0.25% for borrowings with an interest period of six months. The alternate base rate is equal to the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.5%, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) one-month term SOFR plus 1.0% plus a credit spread adjustment of 0.10% and (v) 1.0%. For borrowings denominated in certain foreign currencies other than Australian dollars, the applicable currency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if we no longer maintain an investment grade credit rating) or for borrowings denominated in Australian dollars, the applicable Australian dollars Screen Rate, plus 2.20% (or 2.45% if we no longer maintain an investment grade credit rating).

In addition, we pay a commitment fee of (i) 0.5% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is greater than two-thirds of total commitments or (ii) 0.375% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is equal to or less than two-thirds of total commitments. In connection with entering into the February 2019 Credit Facility, we incurred financing fees of approximately $6.4 million, which will be amortized over the life of the February 2019 Credit Facility.

As of March 31, 2022, we were in compliance with all covenants under the February 2019 Credit Facility and had U.S. dollar borrowings of $472.0 million outstanding under the February 2019 Credit Facility with an interest rate of 2.318% (one month SOFR of 0.218%), borrowings denominated in Swedish kronas of 12.8kr million ($1.4 million U.S. dollars) with an interest rate of 2.000% (one month STIBOR of 0.000%), borrowings denominated in British pounds sterling of £77.6 million

($102.1 million U.S. dollars) with an interest rate of 2.477% (one month SONIA of 0.477%), borrowings denominated in Australian dollars of A$36.6 million ($27.5 million U.S. dollars) with an interest rate of 2.250% (one month AUD Screen Rate of 0.250%) and borrowings denominated in Euros of €138.6 million ($154.2 million U.S. dollars) with an interest rate of 2.000% (one month EURIBOR of 0.000%). The borrowings denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date. The impact resulting from changes in foreign exchange rates on the February 2019 Credit Facility borrowings is included in "Net unrealized appreciation (depreciation) - foreign currency transactions" in our Unaudited Consolidated Statements of Operations.

The fair values of the borrowings outstanding under the February 2019 Credit Facility are based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model. As of March 31, 2022, the total fair value of the borrowings outstanding under the February 2019 Credit Facility was $757.2 million. See Note 5 to our Unaudited Consolidated Financial Statements for additional information regarding the February 2019 Credit Facility.

August 2025 Notes

On August 3, 2020, we entered into a Note Purchase Agreement (the “August 2020 NPA”) with Massachusetts Mutual Life Insurance Company governing the issuance of (1) $50.0 million in aggregate principal amount of Series A senior unsecured notes due August 2025 (the “Series A Notes due 2025”) with a fixed interest rate of 4.66% per year, and (2) up to $50.0 million in aggregate principal amount of additional senior unsecured notes due August 2025 with a fixed interest rate per year to be determined (the “Additional Notes” and, collectively with the Series A Notes due 2025, the “August 2025 Notes”), in each case, to qualified institutional investors in a private placement. An aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 24, 2020 and an aggregate principal amount of $25.0 million of the Series A Notes due 2025 was issued on September 29, 2020, both of which will mature on August 4, 2025 unless redeemed, purchased or prepaid prior to such date by us in accordance with their terms. Interest on the August 2025 Notes is due semiannually in March and September, beginning in March 2021. In addition, we are obligated to offer to repay the August 2025 Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the August 2020 NPA, we may redeem the August 2025 Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before November 3, 2024, a make-whole premium. The August 2025 Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.

On November 4, 2020, we amended the August 2020 NPA to reduce the aggregate principal amount of unissued Additional Notes from $50.0 million to $25.0 million.

The August 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The August 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the August 2025 Notes at the time outstanding may declare all August 2025 Notes then outstanding to be immediately due and payable. As of March 31, 2022, we were in compliance with all covenants under the August 2020 NPA.

The August 2025 Notes were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The August 2025 Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of March 31, 2022, the fair value of the outstanding August 2025 Notes was $49.7 million. The fair value determination of the August 2025 Notes was based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

November Notes

On November 4, 2020, we entered into a Note Purchase Agreement (the “November 2020 NPA”) governing the issuance of (1) $62.5 million in aggregate principal amount of Series B senior unsecured notes due November 2025 (the “Series B Notes”) with a fixed interest rate of 4.25% per year and (2) $112.5 million in aggregate principal amount of Series C senior

unsecured notes due November 2027 (the “Series C Notes,” and, collectively with the Series B Notes, the “November Notes”) with a fixed interest rate of 4.75% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable November Notes do not satisfy certain investment grade conditions and/or (y) 1.50% per year, to the extent the ratio of our secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The November Notes were delivered and paid for on November 5, 2020.

The Series B Notes will mature on November 4, 2025, and the Series C Notes will mature on November 4, 2027 unless redeemed, purchased or prepaid prior to such date by us in accordance with their terms. Interest on the November Notes is due semiannually in May and November, beginning in May 2021. In addition, we are obligated to offer to repay the November Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the November 2020 NPA, we may redeem the Series B Notes and the Series C Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before May 4, 2025, with respect to the Series B Notes, or on or before May 4, 2027, with respect to the Series C Notes, a make-whole premium. The November Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.

The November 2020 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments, minimum shareholders’ equity, maximum net debt to equity ratio and minimum asset coverage ratio. The November 2020 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of an event of default, the holders of at least 66-2/3% in principal amount of the November Notes at the time outstanding may declare all November Notes then outstanding to be immediately due and payable. As of March 31, 2022, we were in compliance with all covenants under the November 2020 NPA.

The November Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The November Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of March 31, 2022, the fair value of the outstanding Series B Notes and the Series C Notes was $61.1 million and $109.0 million, respectively. The fair value determinations of the Series B Notes and Series C Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

February Notes

On February 25, 2021, we entered into a Note Purchase Agreement (the “February 2021 NPA”) governing the issuance of (1) $80.0 million in aggregate principal amount of Series D senior unsecured notes due February 26, 2026 (the “Series D Notes”) with a fixed interest rate of 3.41% per year and (2) $70.0 million in aggregate principal amount of Series E senior unsecured notes due February 26, 2028 (the “Series E Notes” and, collectively with the Series D Notes, the “February Notes”) with a fixed interest rate of 4.06% per year, in each case, to qualified institutional investors in a private placement. Each stated interest rate is subject to a step up of (x) 0.75% per year, to the extent the applicable February Notes do not satisfy certain investment grade rating conditions and/or (y) 1.50% per year, to the extent the ratio of our secured debt to total assets exceeds specified thresholds, measured as of each fiscal quarter end. The February Notes were delivered and paid for on February 26, 2021.

The Series D Notes will mature on February 26, 2026, and the Series E Notes will mature on February 26, 2028 unless redeemed, purchased or prepaid prior to such date by us in accordance with the terms of the February 2021 NPA. Interest on the February Notes is due semiannually in February and August of each year, beginning in August 2021. In addition, we are obligated to offer to repay the February Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the February 2021 NPA, we may redeem the Series D Notes and the Series E Notes in whole or in part at any time or from time to time at our option at par plus accrued interest to the prepayment date and, if redeemed on or before August 26, 2025, with respect to the Series D Notes, or on or before August 26, 2027, with respect to the Series E Notes, a make-whole premium. The February Notes are guaranteed by certain of our subsidiaries, and are our general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.

The February 2021 NPA contains certain representations and warranties, and various covenants and reporting requirements customary for senior unsecured notes issued in a private placement, including, without limitation, information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business, permitted liens, investments and restricted payments. In addition, the February 2021 NPA contains the following financial covenants: (a) maintaining a minimum obligors’ net worth, measured as of each fiscal quarter end; (b) not permitting our asset coverage ratio, as of the date of the incurrence of any debt for borrowed money or the making of any cash dividend to shareholders, to be less than the statutory minimum then applicable to us under the 1940 Act; and (c) not permitting our net debt to equity ratio to exceed 2.0x, measured as of each fiscal quarter end.

The February 2021 NPA also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness or that of our subsidiary guarantors, certain judgements and orders, and certain events of bankruptcy. Upon the occurrence of certain events of default, the holders of at least 66-2/3% in principal amount of the February Notes at the time outstanding may declare all February Notes then outstanding to be immediately due and payable. As of March 31, 2022, we were in compliance with all covenants under the February 2021 NPA.

The February Notes were offered in reliance on Section 4(a)(2) of the Securities Act. The February Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.

As of March 31, 2022, the fair value of the outstanding Series D Notes and the Series E Notes was $75.5 million and $65.2 million, respectively. The fair value determinations of the Series D Notes and Series E Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

November 2026 Notes

On November 23, 2021, we entered into an Indenture (the “Base Indenture”) and a Supplemental Indenture (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) with U.S. Bank National Association (the “Trustee”). The First Supplemental Indenture relates to our issuance of $350.0 million aggregate principal amount of its 3.300% notes due 2026 (the “November 2026 Notes”).

The November 2026 Notes will mature on November 23, 2026 and may be redeemed in whole or in part at our option at any time or from time to time at the redemption prices set forth in the Indenture. The November 2026 Notes bear interest at a rate of 3.300% per year payable semi-annually on May 23 and November 23 of each year, commencing on May 23, 2022. The November 2026 Notes are our general unsecured obligations that rank senior in right of payment to all of our existing and future indebtedness that is expressly subordinated in right of payment to the November 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by us, rank effectively junior to any of our secured indebtedness (including unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities.

The Indenture contains certain covenants, including covenants requiring us to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the 1940 Act, whether or not it is subject to those requirements, and to provide financial information to the holders of the November 2026 Notes and the Trustee if we are no longer subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are described in the Indenture.

In addition, on the occurrence of a “change of control repurchase event,” as defined in the Indenture, we will generally be required to make an offer to purchase the outstanding November 2026 Notes at a price equal to 100% of the principal amount of such November 2026 Notes plus accrued and unpaid interest to the repurchase date.

The November 2026 Notes were offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The November 2026 Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

As of March 31, 2022, the fair value of the outstanding November 2026 Notes was $320.9 million. The fair value determinations of the November 2026 Notes were based on a market yield approach and current interest rates, which are Level 3 inputs to the market yield model.

Share Repurchases

In connection with the closing of the MVC Acquisition on December 23, 2020, we committed to make open-market purchases of shares of our common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period that commenced upon the filing of our quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, contractual and regulatory requirements. During the three months ended March 31, 2022, we repurchased a total of 207,677 shares of our common stock in the open market under the authorized program at an average price of $10.14 per share, including broker commissions.

In connection with the completion of the acquisition of Sierra, we committed to make open-market purchases of shares of our common stock in an aggregate amount of up to $30.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period commencing on April 1, 2022 and are expected to be made in accordance with a Rule 10b5-1 purchase plan that qualifies for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Exchange Act, as well as subject to compliance with our covenant and regulatory requirements.

Distributions to Stockholders

We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. We have adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of dividends on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, when we declare a dividend, stockholders who have not opted out of the DRIP will have their dividends automatically reinvested in shares of our common stock, rather than receiving cash dividends.

We have elected to be treated as a RIC under the Code, and intend to make the required distributions to our stockholders as specified therein. In order to maintain our tax treatment as a RIC and to obtain RIC tax benefits, we must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then we are generally required to pay income taxes only on the portion of our taxable income and gains we do not distribute (actually or constructively) and certain built-in gains. We have historically met our minimum distribution requirements and continually monitor our distribution requirements with the goal of ensuring compliance with the Code. We can offer no assurance that we will achieve results that will permit the payment of any level of cash distributions and our ability to make distributions will be limited by the asset coverage requirement and related provisions under the 1940 Act and contained in any applicable indenture or financing agreement and related supplements. In addition, in order to satisfy the annual distribution requirement applicable to RICs, we may declare a significant portion of our dividends in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash (which portion may be as low as 20% of such dividend (and 10% of the dividend declared through June 30, 2022) under published guidance from the Internal Revenue Service) and certain requirements are met, the entire distribution will be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally would be subject to tax on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner as a cash dividend, even though most of the dividend was paid in shares of our common stock.

The minimum distribution requirements applicable to RICs require us to distribute to our stockholders each year at least 90% of our investment company taxable income, or ICTI, as defined by the Code. Depending on the level of ICTI and net capital gain, if any, earned in a tax year, we may choose to carry forward ICTI in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such excess. Any such carryover ICTI must be distributed before the end of the next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. We may be required to recognize ICTI in certain circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments issued with warrants), we must include in ICTI each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in ICTI other amounts that we have not yet received in cash, such as (i) PIK interest income and (ii) interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any original issue discount or other amounts accrued will be included in our ICTI for the year of

accrual, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

Recent Developments

Subsequent to March 31, 2022, we made approximately made approximately $174.4 million of new commitments, of which $141.0 million closed and funded. The $141.0 million of investments consists of $120.9 million of first lien senior secured debt investments, $16.2 million of second lien senior secured and subordinated debt investments and $3.8 million of equity investments. The weighted average yield of the debt investments was 7.1%. In addition, the Company funded $15.0 million of previously committed delayed draw term loans.

Effective on April 1, 2022, we increased aggregate commitments under the February 2019 Credit Facility to $1.1 billion from $965.0 million pursuant to the accordion feature under the February 2019 Credit Facility, which allows for an increase in the total commitments to an aggregate of $1.5 billion subject to certain conditions and the satisfaction of specified financial covenants.

On May 5, 2022, the Board declared a quarterly distribution of $0.24 per share payable on June 15, 2022 to holders of record as of June 8, 2022.

Critical Accounting Policies and Use of Estimates

The preparation of our unaudited financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods covered by such financial statements. We have identified investment valuation and revenue recognition as our most critical accounting estimates. On an ongoing basis, we evaluate our estimates, including those related to the matters described below. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions or conditions. A discussion of our critical accounting policies follows.

Investment Valuation

The most significant estimate inherent in the preparation of our financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We have a valuation policy, as well as established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring (at least quarterly) basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC Topic 820. Our current valuation policy and processes were established by Barings and have been approved by the Board.

As of March 31, 2022, our investment portfolio, valued at fair value in accordance with the Board-approved valuation policies, represented approximately 182% of our total net assets, as compared to approximately 243% of our total net assets as of December 31, 2021.

Under ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between a willing buyer and a willing seller at the measurement date. For our portfolio securities, fair value is generally the amount that we might reasonably expect to receive upon the current sale of the security. The fair value measurement assumes that the sale occurs in the principal market for the security, or in the absence of a principal market, in the most advantageous market for the security. If no market for the security exists or if we do not have access to the principal market, the security should be valued based on the sale occurring in a hypothetical market.

Under ASC Topic 820, there are three levels of valuation inputs, as follows:

Level 1 Inputs – include quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.

A financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized as Level 3 investments within the tables in the notes to our consolidated financial statements may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

Our investment portfolio includes certain debt and equity instruments of privately held companies for which quoted prices or other observable inputs falling within the categories of Level 1 and Level 2 are generally not available. In such cases, we determine the fair value of our investments in good faith primarily using Level 3 inputs. In certain cases, quoted prices or other observable inputs exist, and if so, we assess the appropriateness of the use of these third-party quotes in determining fair value based on (i) our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer and (ii) the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company.

There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of our Level 3 investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

Investment Valuation Process

Barings has established a pricing committee that is, subject to the oversight of the Board, responsible for the approval, implementation and oversight of the processes and methodologies that relate to the pricing and valuation of assets we hold. Barings uses independent third-party providers to price the portfolio, but in the event an acceptable price cannot be obtained from an approved external source, Barings will utilize alternative methods in accordance with internal pricing procedures established by Barings' pricing committee.

At least annually, Barings conducts reviews of the primary pricing vendors to validate that the inputs used in the vendors’ pricing process are deemed to be market observable. While Barings is not provided access to proprietary models of the vendors, the reviews have included on-site walkthroughs of the pricing process, methodologies and control procedures for each asset class and level for which prices are provided. The review also includes an examination of the underlying inputs and assumptions for a sample of individual securities across asset classes, credit rating levels and various durations, a process Barings continues to perform annually. In addition, the pricing vendors have an established challenge process in place for all security valuations, which facilitates identification and resolution of prices that fall outside expected ranges. Barings believes that the prices received from the pricing vendors are representative of prices that would be received to sell the assets at the measurement date (i.e., exit prices).

Our money market fund investments are generally valued using Level 1 inputs and our equity investments listed on an exchange or on the NASDAQ National Market System are valued using Level 1 inputs, using the last quoted sale price of that day. Our syndicated senior secured loans and structured product investments are generally valued using Level 2 inputs, which are generally valued at the bid quotation obtained from dealers in loans by an independent pricing service. Our middle-market, private debt and equity investments are generally valued using Level 3 inputs.

Independent Valuation

The fair value of loans and equity investments that are not syndicated or for which market quotations are not readily available, including middle-market loans, are generally submitted to independent providers to perform an independent valuation on those loans and equity investments as of the end of each quarter. Such loans and equity investments are initially held at cost, as that is a reasonable approximation of fair value on the acquisition date, and monitored for material changes that could affect the valuation (for example, changes in interest rates or the credit quality of the borrower). At the quarter end following the initial acquisition, such loans and equity investments are generally sent to a valuation provider which will determine the fair value of each investment. The independent valuation providers apply various methods (synthetic rating analysis, discounting cash flows, and re-underwriting analysis) to establish the rate of return a market participant would require (the “discount rate”) as of the valuation date, given market conditions, prevailing lending standards and the perceived credit quality of the issuer. Future expected cash flows for each investment are discounted back to present value using these discount rates in the discounted cash flow analysis. A range of values will be provided by the valuation provider and Barings will determine the point within that range that it will use in making valuation recommendations to the Board, and will report to the Board on its rationale for each such determination. Barings uses its internal valuation model as a comparison point to validate the price range

provided by the valuation provider and, where applicable, in determining the point within that range that it will use in making valuation recommendations to the Board. If Barings’ pricing committee disagrees with the price range provided, it may make a fair value recommendation to the Board that is outside of the range provided by the independent valuation provider, and will notify the Board of any such override and the reasons therefore. In certain instances, we may determine that it is not cost-effective, and as a result is not in the stockholders' best interests, to request an independent valuation firm to perform an independent valuation on certain investments. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio. Pursuant to these procedures, the Board determines in good faith whether our investments were valued at fair value in accordance with our valuation policies and procedures and the 1940 Act based on, among other things, the input of Barings, our Audit Committee and the independent valuation firm.

The SEC has adopted new Rule 2a-5 under the 1940 Act. This rule establishes requirements for determining fair value in good faith for purposes of the 1940 Act. We will comply with the new rule’s valuation requirements on or before the SEC’s September 8, 2022 compliance date.

Valuation Techniques

Our valuation techniques are based upon both observable and unobservable pricing inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. An independent pricing service provider is the preferred source of pricing a loan, however, to the extent the independent pricing service provider price is unavailable or not relevant and reliable, we will utilize alternative approaches such as broker quotes or manual prices. We attempt to maximize the use of observable inputs and minimize the use of unobservable inputs. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security.

Valuation of Investments in Jocassee, Thompson Rivers, Waccamaw River, Sierra JV and MVC Private Equity Fund LP

As Jocassee, Thompson Rivers, Waccamaw River, Sierra JV and MVC Private Equity Fund LP are investment companies with no readily determinable fair values, we estimate the fair value of our investments in these entities using net asset value of each company and our ownership percentage as a practical expedient. The net asset value is determined in accordance with the specialized accounting guidance for investment companies.

Revenue Recognition

Interest and Dividend 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. Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. The cessation of recognition of such interest will negatively impact the reported fair value of the investment. We write off any previously accrued and uncollected interest when it is determined that interest is no longer considered collectible. Dividend income is recorded on the ex-dividend date.

We may have to include interest income in our ICTI, including original issue discount income, from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements to maintain our RIC tax treatment, even though we will not have received and may not ever receive any corresponding cash amount. Additionally, any loss recognized by us for U.S. federal income tax purposes on previously accrued interest income will be treated as a capital loss.

Fee Income

Origination, facility, commitment, consent and other advance fees received in connection with the origination of a loan, or Loan Origination Fees, are recorded as deferred income and recognized as investment income over the term of the loan. Upon prepayment of a loan, any unamortized Loan Origination Fees are recorded as investment income. In the general course of our business, we receive certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, advisory, loan amendment and other fees, and are recorded as investment income when earned.

Fee income for the three months ended March 31, 2022 and 2021 was as follows:

Three Months<br><br>Ended Three Months<br><br>Ended
($ in thousands) March 31, 2022 March 31, 2021
Recurring Fee Income:
Amortization of loan origination fees $ 1,327 $ 1,078
Management, valuation and other fees (585) 581
Total Recurring Fee Income 742 1,659
Non-Recurring Fee Income:
Prepayment fees — 50
Acceleration of unamortized loan origination fees 196 403
Advisory, loan amendment and other fees 259 21
Total Non-Recurring Fee Income 455 474
Total Fee Income $ 1,197 $ 2,133

Payment-in-Kind (PIK) Interest Income

We currently hold, and expect to hold in the future, some loans in our portfolio that contain PIK interest provisions. 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 us 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 our taxable income and therefore affects the amount we are required to distribute to our stockholders to maintain our tax treatment as a RIC for U.S. federal income tax purposes, even though we have not yet collected the cash. Generally, when current cash interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing PIK interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. We write off any previously accrued and uncollected PIK interest when it is determined that the PIK interest is no longer collectible.

We may have to include in our ICTI, PIK interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. As a result, we may be required to make a distribution to our stockholders in order to satisfy the minimum distribution requirements, even though we will not have received and may not ever receive any corresponding cash amount.

Unused Commitments

In the normal course of business, we are party to financial instruments with off-balance sheet risk, consisting primarily of unused commitments to extend financing to our portfolio companies. Since commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. As of March 31, 2022 and December 31, 2021, we believed that we had adequate financial resources to satisfy our unfunded commitments. The balances of unused commitments to extend financing as of March 31, 2022 and December 31, 2021 were as follows:

Portfolio Company <br>($ in thousands) Investment Type March 31, 2022 December 31, 2021
1888 Industrial Services, LLC(1)(2) Revolver $ 314 $ —
Acclime Holdings HK Limited(1) Delayed Draw Term Loan 1,179 1,179
Acclime Holdings HK Limited(1) Delayed Draw Term Loan 110 110
Air Comm Corporation, LLC(1) Delayed Draw Term Loan 11 11
Air Comm Corporation, LLC(1) Delayed Draw Term Loan 1,448 1,448
Amtech Software(1) Delayed Draw Term Loan 1,527 2,727
Amtech Software(1) Revolver 682 682
Portfolio Company <br>($ in thousands) Investment Type March 31, 2022 December 31, 2021
--- --- --- ---
AnalytiChem Holding GmbH(1)(2)(3) Delayed Draw Term Loan 6,073 6,207
Aquavista Watersides 2 LTD(1)(2)(4) Bridge Revolver 489 503
Aquavista Watersides 2 LTD(1)(2)(4) Acquisition Facility 3,059 3,147
Astra Bidco Limited(1)(2)(4) Delayed Draw Term Loan 959 2,571
Avance Clinical Bidco Pty Ltd(1)(5) Delayed Draw Term Loan 1,435 3,497
Azalea Buyer, Inc.(1) Delayed Draw Term Loan 962 962
Azalea Buyer, Inc.(1) Revolver 481 481
Bariacum S.A(1)(2)(3) Acquisition Facility 2,114 2,161
Beyond Risk Management, Inc.(1)(2) Delayed Draw Term Loan 2,573 2,573
BigHand UK Bidco Limited(1)(2)(4) Acquisition Facility — 378
Black Angus Steakhouses, LLC(1) Acquisition Facility 417 —
Bounteous, Inc.(1) Delayed Draw Term Loan 2,840 2,840
Brightpay Limited(1)(2)(3) Delayed Draw Term Loan 241 432
Brightpay Limited(1)(2)(3) Delayed Draw Term Loan 141 144
BrightSign LLC(1) Revolver 1,329 1,329
British Engineering Services Holdco Limited(1)(2)(4) Bridge Revolver — 613
Brook & Whittle Holding Corp.(1) Delayed Draw Term Loan 852 —
CAi Software, LLC(1) Revolver 943 943
Canadian Orthodontic Partners Corp.(1)(2)(6) Acquisition Facility 120 167
Centralis Finco S.a.r.l.(1)(3) Acquisition Facility 451 461
Ceres Pharma NV(1)(2)(3) Delayed Draw Term Loan 2,103 2,149
CGI Parent, LLC(1)(2) Revolver 1,212 —
Classic Collision (Summit Buyer, LLC)(1)(2) Delayed Draw Term Loan 309 393
Coastal Marina Holdings, LLC(1)(2) PIK Tranche B Term Loan 1,311 1,311
Coastal Marina Holdings, LLC(1)(2) Tranche A Term Loan 3,576 3,576
Command Alkon (Project Potter Buyer, LLC)(1) Delayed Draw Term Loan 6,018 6,018
Coyo Uprising GmbH(1)(2)(3) Delayed Draw Term Loan 874 894
Crash Champions, LLC(1) Delayed Draw Term Loan 379 5,420
CSL Dualcom(1)(4) Acquisition Term Loan 970 998
Dart Buyer, Inc.(1) Delayed Draw Term Loan 1,163 2,431
DecksDirect, LLC(1) Revolver 58 218
DreamStart Bidco SAS(1)(3) Acquisition Facility 604 617
Dune Group(1)(3) Delayed Draw Term Loan 650 665
Dwyer Instruments, Inc.(1) Delayed Draw Term Loan 692 692
Eclipse Business Capital, LLC(1) Revolver 10,909 11,818
EMI Porta Holdco LLC(1) Delayed Draw Term Loan 11,212 12,458
EMI Porta Holdco LLC(1) Revolver 2,361 2,966
EPS NASS Parent, Inc.(1) Delayed Draw Term Loan 583 583
eShipping, LLC(1) Delayed Draw Term Loan 1,650 2,548
eShipping, LLC(1) Revolver 824 1,232
Events Software BidCo Pty Ltd(1)(5) Delayed Draw Term Loan 481 —
F24 (Stairway BidCo GmbH)(1)(2)(3) Delayed Draw Term Loan 396 405
Fineline Technologies, Inc.(1) Delayed Draw Term Loan 180 180
Finexvet(1)(3) Acquisition Facility 967 —
FragilePak LLC(1)(2) Delayed Draw Term Loan 2,354 2,354
Heartland Veterinary Partners, LLC(1) Delayed Draw Term Loan 657 657
Portfolio Company <br>($ in thousands) Investment Type March 31, 2022 December 31, 2021
--- --- --- ---
Heavy Construction Systems Specialists, LLC(1) Revolver 2,632 2,632
HW Holdco, LLC (Hanley Wood LLC)(1)(2) Delayed Draw Term Loan 913 1,563
IGL Holdings III Corp.(1) Delayed Draw Term Loan 1,217 1,217
Innovad Group II BV(1)(2)(3) Delayed Draw Term Loan 1,785 1,825
INOS 19-090 GmbH(1)(2)(3) Acquisition Facility 2,481 2,535
ITI Intermodal, Inc.(1) Delayed Draw Term Loan 103 103
ITI Intermodal, Inc.(1) Revolver 124 124
Jaguar Merger Sub Inc.(1)(2) Delayed Draw Term Loan 1,781 1,961
Jaguar Merger Sub Inc.(1)(2) Revolver 490 490
Jocassee Partners LLC Joint Venture 15,000 20,000
Jon Bidco Limited(1)(2)(7) Capex & Acquisition Facility 1,585 —
Jones Fish Hatcheries & Distributors LLC(1) Revolver 418 —
Kano Laboratories LLC(1)(2) Delayed Draw Term Loan 153 153
Kano Laboratories LLC(1)(2) Delayed Draw Term Loan 2,830 4,544
Kemmerer Operations LLC(1) Delayed Draw Term Loan 908 —
LAF International(1)(2)(3) Acquisition Facility 178 341
Lambir Bidco Limited(1)(2)(3) Bridge Revolver 920 941
Lambir Bidco Limited(1)(2)(3) Delayed Draw Term Loan 1,841 1,881
LeadsOnline, LLC(1) Revolver 2,603 —
Lifestyle Intermediate II, LLC(1) Revolver 2,500 —
LivTech Purchaser, Inc.(1) Delayed Draw Term Loan 34 82
Marmoutier Holding B.V.(1)(2)(3) Delayed Draw Term Loan 396 405
Marmoutier Holding B.V.(1)(2)(3) Revolver 159 162
Marshall Excelsior Co.(1)(2) Revolver 1,047 —
MC Group Ventures Corporation(1) Delayed Draw Term Loan 817 817
Modern Star Holdings Bidco Pty Limited(1)(5) Capex Term Loan 1,072 1,038
Murphy Midco Limited(1)(4) Delayed Draw Term Loan 648 2,617
Narda Acquisitionco., Inc.(1) Revolver 1,311 1,311
Navia Benefit Solutions, Inc.(1) Delayed Draw Term Loan 1,261 1,261
Nexus Underwriting Management Limited(1)(2)(4) Revolver 101 103
Nexus Underwriting Management Limited(1)(2)(4) Acquisition Facility 526 541
Novotech Aus Bidco Pty Ltd(1) Capex & Acquisition Facility 809 —
OA Buyer, Inc.(1) Revolver 1,331 1,331
OAC Holdings I Corp(1) Revolver 685 —
OG III B.V.(1)(2)(3) Acquisition CapEx Facility 671 686
Omni Intermediate Holdings, LLC(1)(2) Delayed Draw Term Loan — 817
Omni Intermediate Holdings, LLC(1)(2) Delayed Draw Term Loan 2,289 4,357
OSP Hamilton Purchaser, LLC(1) Revolver 187 187
Pacific Health Supplies Bidco Pty Limited(1)(2)(5) CapEx Term Loan 1,325 1,283
PDQ.Com Corporation(1) Delayed Draw Term Loan — 289
PDQ.Com Corporation(1) Delayed Draw Term Loan 7,753 10,948
Polara Enterprises, L.L.C.(1)(2) Revolver 545 545
Policy Services Company, LLC(1)(2) Delayed Draw Term Loan 3,772 6,944
Premium Invest(1)(2)(3) Acquisition Facility 1,892 1,933
ProfitOptics, LLC(1) Revolver 484 —
Protego Bidco B.V.(1)(2)(3) Delayed Draw Term Loan 826 844
QPE7 SPV1 BidCo Pty Ltd(1)(2)(5) Acquisition Term Loan — 373
Portfolio Company <br>($ in thousands) Investment Type March 31, 2022 December 31, 2021
--- --- --- --- --- ---
RA Outdoors, LLC(1) Revolver 741 —
Rep Seko Merger Sub LLC(1) Delayed Draw Term Loan 1,305 1,455
Reward Gateway (UK) Ltd(1)(2)(4) Acquisition Facility 657 1,061
Riedel Beheer B.V.(1)(2)(3) Revolver — 230
Riedel Beheer B.V.(1)(2)(3) Delayed Draw Term Loan 150 153
Scaled Agile, Inc.(1)(2) Delayed Draw Term Loan 416 416
Scaled Agile, Inc.(1)(2) Revolver 336 336
Security Holdings B.V.(1)(2)(3) Delayed Draw Term Loan 2,225 2,274
Security Holdings B.V.(1)(2)(3) Revolver 1,113 1,137
Smartling, Inc.(1) Delayed Draw Term Loan 1,978 2,353
Smartling, Inc.(1) Revolver 1,176 1,176
Smile Brands Group, Inc.(1)(2) Delayed Draw Term Loan 418 655
Springbrook Software (SBRK Intermediate, Inc.)(1)(2) Delayed Draw Term Loan 2,372 2,373
SSCP Pegasus Midco Limited(1)(4) Delayed Draw Term Loan 5,105 5,251
Superjet Buyer, LLC(1) Revolver 1,825 1,825
Syntax Systems Ltd(1)(2) Revolver 448 569
Syntax Systems Ltd(1)(2) Delayed Draw Term Loan 1,933 1,933
Tank Holding Corp(1) Revolver 873 —
Techone B.V.(1)(2)(3) Delayed Draw Term Loan 1,586 1,621
Techone B.V.(1)(2)(3) Revolver 423 432
Tencarva Machinery Company, LLC(1) Delayed Draw Term Loan 886 886
Tencarva Machinery Company, LLC(1) Revolver 1,128 1,129
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC)(1) Delayed Draw Term Loan 2,811 2,811
The Caprock Group, Inc. (aka TA/TCG Holdings, LLC)(1) Revolver 827 827
The Hilb Group, LLC(1) Delayed Draw Term Loan 2,529 2,773
Thermacell Repellents, Inc.(1) Revolver 605 —
Transit Technologies LLC(1)(2) Delayed Draw Term Loan — 1,857
Truck-Lite Co., LLC(1) Delayed Draw Term Loan 4,540 4,540
Turbo Buyer, Inc.(1) Delayed Draw Term Loan 1,339 2,070
Turbo Buyer, Inc.(1) Delayed Draw Term Loan 2,250 —
USLS Acquisition, Inc.(f/k/a US Legal Support, Inc.)(1)(2) Delayed Draw Term Loan 3,820 —
Victoria Bidco Limited(1)(2)(4) Delayed Draw Term Loan 458 —
Waccamaw River, LLC(2) Joint Venture 4,580 11,280
W2O Holdings, Inc.(1) Delayed Draw Term Loan 3,831 3,832
West Dermatology, LLC(1) Revolver 552 —
West Dermatology, LLC(1) Delayed Draw Term Loan 3,352 —
West Dermatology, LLC(1) PIK Delayed Draw Term Loan 144 —
Woodland Foods, Inc.(1) Revolver 1,734 2,070
ZB Holdco LLC(1) Revolver 845 —
ZB Holdco LLC(1) Delayed Draw Term Loan 1,352 —
Zeppelin Bidco Limited(1)(2)(4) Capex / Acquisition Facility 3,472 —
Zeppelin Bidco Limited(1)(2)(4) Revolver $ 579 $ —
Total unused commitments to extend financing $ 220,360 $ 234,658

(1)Our estimate of the fair value of the current investments in these portfolio companies includes an analysis of the fair value of any unfunded commitments.

(2)Represents a commitment to extend financing to a portfolio company where one or more of our current investments in the portfolio company are carried at less than cost.

(3)Actual commitment amount is denominated in Euros. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(4)Actual commitment amount is denominated in British pounds sterling. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(5)Actual commitment amount is denominated in Australian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(6)Actual commitment amount is denominated in Canadian dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

(7)Actual commitment amount is denominated in New Zealand dollars. Commitment was translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

In the normal course of business, we guarantee certain obligations in connection with our portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable. As of March 31, 2022 and December 31, 2021, we had guaranteed €9.9 million ($11.0 million U.S. dollars and $11.3 million U.S. dollars, respectively) relating to credit facilities among Erste Bank and MVC Automotive Group Gmbh, or MVC Auto. We would be required to make payments to Erste Bank if MVC Auto were to default on their related payment obligations. None of the credit facility guarantees are recorded as a liability on our Unaudited and Audited Consolidated Balance Sheets. As such, the credit facility liabilities are considered in the valuation of our investments in MVC Auto. The guarantees denominated in foreign currencies were translated into U.S. dollars based on the spot rate at the relevant balance sheet date.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to market risk. Market risk includes risks that arise from changes in interest rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. The prices of securities held by us may decline in response to certain events, including those directly involving the companies we invest in; conditions affecting the general economy; overall market changes; global pandemics; legislative reform; local, regional, national or global political, social or economic instability; and interest rate fluctuations.

In addition, 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 intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in the general level of interest rates can affect our net interest income, which is the difference between the interest income earned on interest earning assets and our interest expense incurred in connection with our interest bearing debt and liabilities. Changes in interest rates can also affect, among other things, our ability to acquire and originate loans and securities and the value of our investment portfolio. Our net investment income is affected by fluctuations in various interest rates, including LIBOR, EURIBOR, GBP LIBOR, BBSY, STIBOR, CDOR, and SONIA. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. We regularly measure exposure to interest rate risk and determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. As of March 31, 2022, we were not a party to any interest rate hedging arrangements.

In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks reduced certain interest rates and LIBOR decreased. 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 LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on any portfolio investments, a decrease in in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR.

As of March 31, 2022, approximately $1,786.8 million (principal amount) of our debt portfolio investments bore interest at variable rates, which generally are LIBOR-based (or based on an equivalent applicable currency rate), and many of which are subject to certain floors. A hypothetical 200 basis point increase or decrease in the interest rates on our variable-rate debt investments could increase or decrease, as applicable, our investment income by a maximum of $35.7 million on an annual basis.

Borrowings denominated in U.S. Dollars under the February 2019 Credit Facility bear interest, subject to our election, on a per annum basis equal to (i) the alternate base rate plus 1.25% (or 1.00% for so long as we maintain an investment grade credit rating) or (ii) the term Secured Overnight Financing Rate (“SOFR”) plus 2.25% (or 2.00% for so long as we maintain an investment grade credit rating) plus a credit spread adjustment of 0.10% for borrowings with an interest period of one month, 0.15% for borrowings with an interest period of three months or 0.25% for borrowings with an interest period of six months. The alternate base rate is equal to the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.5%, (iii) the Overnight Bank Funding Rate plus 0.5%, (iv) one-month term SOFR plus 1.0% plus a credit spread adjustment of 0.10% and (v) 1.0%. For borrowings denominated in certain foreign currencies other than Australian dollars, the applicable currency rate for the foreign currency as defined in the credit agreement plus 2.00% (or 2.25% if we no longer maintain an investment grade credit rating) or for borrowings denominated in Australian dollars, the applicable Australian dollars Screen Rate, plus 2.20% (or 2.45% if we no

longer maintain an investment grade credit rating). A hypothetical 200 basis point increase or decrease in the interest rates on the February 2019 Credit Facility could increase or decrease, as applicable, our interest expense by a maximum of $15.1 million on an annual basis (based on the amount of outstanding borrowings under the February 2019 Credit Facility as of March 31, 2022). We pay a commitment fee of (x) 0.5% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is greater than two-thirds of total commitments or (y) 0.375% per annum on undrawn amounts if the unused portion of the February 2019 Credit Facility is equal to or less than two-thirds of total commitments.

In July 2017, the head of the U.K. Financial Conduct Authority (the “FCA”), announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. In March 2021, the FCA confirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative: (a) immediately after December 31, 2021, in the case of sterling, euro, Swiss franc, and Japanese yen, and the one week and two month U.S. dollar settings; and (b) immediately after June 30, 2023, in the case of the remaining U.S. dollar settings. In addition, as a result of supervisory guidance from U.S. regulators, some U.S. regulated entities ceased to enter into new LIBOR contracts after January 1, 2022. At this time, no consensus exists as to what rate or rates will become accepted alternatives to LIBOR, although the Alternative Reference Rates Committee, a steering committee convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York and comprised of large U.S. financial institutions, has recommended the use of SOFR. There are many uncertainties regarding a transition from LIBOR to SOFR or any other alternative benchmark rate that may be established, including, but not limited to, the timing of any such transition, the need to amend all contracts with LIBOR as the referenced rate and, given the inherent differences between LIBOR and SOFR or any other alternative benchmark rate, how any transition may impact the cost and performance of impacted securities, variable rate debt and derivative financial instruments. In addition, SOFR or another alternative benchmark rate may fail to gain market acceptance, which could adversely affect the return on, value of and market for securities, variable rate debt and derivative financial instruments linked to such rates. The effects of a transition from LIBOR to SOFR or any other alternative benchmark rate on our cost of capital and net investment income cannot yet be determined definitively. All of our loan agreements with our portfolio companies include fallback language in the event that LIBOR becomes unavailable. This language generally either includes a clearly defined alternative reference rate after LIBOR’s discontinuation or provides that the administrative agent may identify a replacement reference rate, typically with the consent of (or prior consultation with) the borrower. In certain cases, the administrative agent will be required to obtain the consent of either a majority of the lenders under the facility, or the consent of each lender, prior to identifying a replacement reference rate. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market value for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us and could have a material adverse effect on our business, financial condition and results of operations.

Because we have previously borrowed, and plan to borrow in the future, money to make investments, our net investment income will be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest the funds borrowed. Accordingly, 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. In periods of rising interest rates, 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.

We may also have exposure to foreign currencies related to certain investments. Such investments are translated into U.S. dollars based on the spot rate at the relevant balance sheet date, exposing us to movements in the exchange rate. In order to reduce our exposure to fluctuations in exchange rates, we generally borrow in local foreign currencies under the February 2019 Credit Facility to finance such investments. As of March 31, 2022, we had borrowings denominated in Swedish kronas of 12.8kr million ($1.4 million U.S. dollars) with an interest rate of 2.000%, borrowings denominated in British pounds sterling of £77.6 million ($102.1 million U.S. dollars) with an interest rate of 2.477%, borrowings denominated in Australian dollars of A$36.6 million ($27.5 million U.S. dollars) with an interest rate of 2.250% and borrowings denominated in Euros of €138.6 million ($154.2 million U.S. dollars) with an interest rate of 2.000%.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. 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 of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2022. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the first quarter of 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 1. Legal Proceedings.

Neither we, the Adviser, nor our subsidiaries are currently subject to any material pending legal proceedings, other than ordinary routine litigation incidental to our respective businesses. We, the Adviser, and our subsidiaries may from time to time, however, be involved in litigation arising out of operations in the normal course of business or otherwise, including in connection with strategic transactions. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our financial condition or results of operations in any future reporting period.

Item 1A. Risk Factors.

You should carefully consider the risks described in Item 1A entitled "Risk Factors" in Part 1 of our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 23, 2022, and all other information contained in this Quarterly Report on Form 10-Q, including our interim financial statements and the related notes thereto, before making a decision to purchase our securities. The risks and uncertainties referenced herein and in our most recent Annual Report on Form 10-K are not the only ones facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition and/or operating results, as well as the market price of our securities.

There have been no material changes during the three months ended March 31, 2022 to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021. If any of such risks actually occur, our business, financial condition or results of operations could be materially adversely affected. If that happens, the market price of our securities could decline, and you may lose all or part of your investment.

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

Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

During the three months ended March 31, 2022, in connection with our DRIP for our common stockholders, we directed the plan administrator to purchase 56,521 shares of our common stock for an aggregate of $607,552 in the open market in order to satisfy our obligations to deliver shares of common stock to our stockholders with respect to our dividend declared on February 1, 2022.

In connection with the closing of the MVC Acquisition on December 23, 2020, we committed to make open-market purchases of shares of our common stock in an aggregate amount of up to $15.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period that commenced upon the filing of our quarterly report on Form 10-Q for the quarter ended March 31, 2021, which occurred on May 6, 2021, and will be made in accordance with applicable legal, contractual and regulatory requirements. During the three months ended March 31, 2022, we repurchased a total of 207,677 shares of our common stock in the open market under the authorized program at an average price of $10.14 per share, including broker commissions.

The following chart summarizes repurchases of our common stock for the three months ended March 31, 2022:

Period Total number of shares purchased Average price paid per share Total number of<br>shares purchased<br>as part of publicly<br>announced plans<br>or programs Approximate dollar value of shares that <br>may yet be<br>purchased under the plans or programs
January 1 through January 31, 2022 — $ — — $ —
February 1 through February 28, 2022 — $ — — $ —
March 1 through March 31, 2022 264,198 (1) $ 10.27 207,677 $ 12,867 (2)

(1)     Includes 56,521 shares purchased in the open market pursuant to the terms of our dividend reinvestment plan.

(2)    In thousands. Program terminates May 6, 2022. Commencing on April 1, 2022, the Company will implement an open-market share repurchase program it committed to launch in connection with the completion of the acquisition of Sierra. Pursuant to the program, we will make open-market purchases of shares of our common stock in an aggregate amount of up to $30.0 million at then-current market prices at any time shares trade below 90% of our then most recently disclosed NAV per share. Any repurchases pursuant to the authorized program will occur during the 12-month period commencing on April 1, 2022 and are expected to be made in accordance with a Rule 10b5-1 purchase plan that qualifies for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Exchange Act, as well as subject to compliance with our covenant and regulatory requirements. Subsequent to period-end, through May 5, 2022, we repurchased an additional 23,300 shares of our common stock pursuant to the share repurchase plans at an average price of $10.12 per share, including broker commissions.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not Applicable.

Item 6. Exhibits.

Number Exhibit
3.1 Articles of Amendment and Restatement of the Registrant (Filed as Exhibit (a)(3) to the Registrant's Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 (File No. 333-138418) filed with the Securities and Exchange Commission on December 29, 2006 and incorporated herein by reference).
3.2 Articles of Amendment of the Registrant (Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference).
3.3 Seventh Amended and Restated Bylaws of the Registrant (Filed as Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference).
3.4 Articles Supplementary (Filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2018 and incorporated herein by reference).
10.1 Second Amended and Restated Investment Advisory Agreement, dated February 25, 2022, by and between Barings BDC, Inc. and Barings LLChttps://www.sec.gov/Archives/edgar/data/1379785/000114036122007670/ny20002465x3_ex10-1.htm(Filed as Exhibit10.1to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission onMarch 3, 2022and incorporated herein by reference).
10.2 Credit Support Agreement, dated February 25, 2022, by and between Barings BDC, Inc. and Barings LLC(Filed as Exhibit 10.2to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 3, 2022 and incorporated herein by reference).
10.3 Amendment No. 3 to Senior Secured Revolving Credit Agreement, dated as of February 25, 2022, by and amongBarings BDC, Inc., the subsidiary guarantors party thereto, the lenders party thereto and INGCapital LLC, as administrative agent(Filed as Exhibit 10.1to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 3, 2022 and incorporated herein by reference).*
10.4 Incremental Commitment and Assumption Agreement, dated as of April 1, 2022, made by the Incremental Lender partybbdc-3312022xq1ex104.htmthereto, relating to the Senior Secured Revolving Credit Agreement, dated as of February 21, 2019, among Barings BDC, Inc., as borrower, thesubsidiaryguarantors party thereto, the lenders party thereto and ING Capital LLC, as administrative agent. **
31.1 Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
31.2 Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
32.1 Chief Executive Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.***
32.2 Chief Financial Officer Certification pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.***

*    Exhibits and schedules to this Exhibit have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.

**    Filed Herewith.

***    Furnished Herewith.

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.

BARINGS BDC, INC.
Date: May 5, 2022 /s/    Eric Lloyd
Eric Lloyd
Chief Executive Officer
(Principal Executive Officer)
Date: May 5, 2022 /s/    Jonathan Bock
Jonathan Bock
Chief Financial Officer
(Principal Financial Officer)
Date: May 5, 2022 /s/    Elizabeth A. Murray
Elizabeth A. Murray
Principal Accounting Officer

118

Document

Exhibit 10.4

EXECUTION VERSION

________________________________________________________________________

INCREMENTAL COMMITMENT AND ASSUMPTION AGREEMENT

dated as of April 1, 2022,

made by

the Incremental Lender party hereto,

relating to the

SENIOR SECURED REVOLVING CREDIT AGREEMENT

dated as of February 21, 2019,

among

BARINGS BDC, INC., as Borrower,

The Subsidiary Guarantors Parties Thereto,

The Lenders Parties Thereto,

and

ING CAPITAL LLC, as Administrative Agent

________________________________________________________________________

INCREMENTAL COMMITMENT AND ASSUMPTION AGREEMENT (this “Agreement”), dated as of April 1, 2022 and effective as of the Effective Date (as defined below), by and among BARINGS BDC, INC. (the “Borrower”), ENERGY HARDWARE HOLDINGS, INC. (“Energy Holdings”), BARINGS BDC FINANCE I, LLC (“Barings Finance”) and BARINGS BDC SENIOR FUNDING I LLC (together with Energy Holdings and Barings Finance, each a “Subsidiary Guarantor”), SUMITOMO MITSUI BANKING CORPORATION, as an assuming lender (the “Incremental Lender”) and ING CAPITAL LLC, in its capacity as Administrative Agent (in such capacity, the “Administrative Agent”) and as Issuing Bank (in such capacity, the “Issuing Bank”), relating to the SENIOR SECURED REVOLVING CREDIT AGREEMENT, dated as of February 21, 2019 (as amended by that certain Amendment No. 1 to Senior Secured Revolving Credit Agreement, dated as of December 3, 2019, that certain Amendment No. 2 to Senior Secured Revolving Credit Agreement, dated as of December 29, 2021, that certain Amendment No. 3 to Senior Secured Revolving Credit Agreement, dated as of February 25, 2022 and as further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Administrative Agent and the several banks and other financial institutions or entities from time to time party to the Credit Agreement.

A.    The Borrower has requested that the Incremental Lender become a Lender under the Credit Agreement and provide additional Dollar Commitments on and as of the Effective Date in an aggregate principal amount equal to $100,000,000 (the “Incremental Commitment”) pursuant to Section 2.07(e) of the Credit Agreement.

B.    The Incremental Lender is willing to make the Incremental Commitment in the amount described on Annex I hereto on and as of the Effective Date on the terms and subject to the conditions set forth herein and in the Credit Agreement.

Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Defined Terms; Interpretation; Etc. Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Credit Agreement. The rules of construction set forth in Section 1.03 of the Credit Agreement shall apply equally to this Agreement. This Agreement shall be a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.

SECTION 2. Incremental Commitment. (a) Pursuant to Section 2.07(e) of the Credit Agreement and subject to the terms and conditions hereof, the Incremental Lender hereby agrees to make the Incremental Commitment to the Borrower effective on and as of the Effective Date. The Incremental Commitment shall constitute an additional “Commitment” in the form of a “Dollar Commitment” and a “Commitment Increase” for all purposes of the Credit Agreement and the other Loan Documents and the Effective Date shall be the “Commitment Increase Date” of the Incremental Commitment for purposes of Section 2.07(e) of the Credit Agreement.

(b)    The terms and provisions of any new Loans issued by the Incremental Lender and the Incremental Commitment of the Incremental Lender shall be identical to the other Loans and Dollar Commitments, as applicable, of the Lenders immediately prior to the Effective Date.

(c)    On the Effective Date, in connection with the adjustments, if any, to any outstanding Loans and participation interests contemplated by Section 2.07(e)(iv) of the Credit Agreement, the Incremental Lender shall make a payment to the Administrative Agent, for the account of the other Lenders, in an amount calculated by the Administrative Agent in accordance with such section, so that after giving effect to such payment and to the distribution thereof to the other Lenders in accordance with such section, the Loans are held ratably by the Lenders in accordance with the respective Dollar Commitments of such Lenders (after giving effect to the Incremental Commitment and any other Commitment Increases, if any, occurring on the Effective Date).

(d)    As of the Effective Date, the Incremental Lender shall become a “Dollar Lender” and a “Lender” under the Credit Agreement and shall have all rights and obligations of a Dollar Lender and a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto.

SECTION 3. Conditions Precedent to Incremental Commitment. This Agreement, and the Incremental Commitment of the Incremental Lender, shall become effective on and as of the Business Day on which the following conditions precedent have been satisfied (unless a condition shall have been waived in accordance with Section 9.02 of the Credit Agreement):

(a)    the Administrative Agent shall have received counterparts of this Agreement that, when taken together, bear the signatures of the Borrower, the Administrative Agent, the Issuing Bank and the Incremental Lender;

(b)    on the Effective Date, each of the conditions set forth or referred to in Section 2.07(e)(i) of the Credit Agreement shall be satisfied, and pursuant to Section 2.07(e)(ii)(x) of the Credit Agreement, the Administrative Agent shall have received a certificate of a duly authorized officer of the Borrower dated the Effective Date certifying as to the foregoing;

(c)    the Administrative Agent shall have received for the account of the Lenders the amounts, if any, payable under Section 2.14 of the Credit Agreement as a result of the adjustments of Borrowings pursuant to Section 2(c) of this Agreement;

(d)    pursuant to Section 9.03 of the Credit Agreement, the Administrative Agent shall have received all other reasonable and documented out-of-pocket fees, costs and expenses related to this Agreement due and owing on the Effective Date.

SECTION 4. Representations and Warranties of the Borrower. To induce the other parties hereto to enter into this Agreement, the Borrower represents and warrants to

the Administrative Agent and the Incremental Lender that, as of the date hereof and as of the Effective Date:

(a)    This Agreement has been duly authorized, executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

(b)    Each of the representations and warranties of the Borrower contained in the Credit Agreement and the other Loan Documents is true and correct in all material respects (other than any representation or warranty already qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) on and as of the Effective Date as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

(c)    No Default or Event of Default has occurred and is continuing on the Effective Date or will result from the Incremental Commitment.

SECTION 5. Representations, Warranties and Covenants of the Incremental Lender. The Incremental Lender (a) represents and warrants that (i) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Incremental Commitment, shall have the obligations of a Lender thereunder, (ii) it has received a copy of the Credit Agreement, together with copies of the most recent audited consolidated balance sheets, statements of operations, statement of changes in net assets, statements of cash flows and schedules of investments delivered pursuant to Section 5.01(a) thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and to make the Incremental Commitment on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender and (iii) if it is a Foreign Lender, it has delivered to the Administrative Agent any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Incremental Lender; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

SECTION 6. Consent and Reaffirmation. (a)  The Borrower and each Subsidiary Guarantor agrees that, notwithstanding the effectiveness of this Agreement, the Guarantee and Security Agreement and each of the other Security Documents continue to be in full force and effect, (b) the Borrower and each Subsidiary Guarantor acknowledges that the terms “Credit Agreement Obligations,” “Guaranteed Obligations” and “Secured

Obligations” (each as defined in the Guarantee and Security Agreement) include any and all Loans made now or in the future by the Incremental Lender in respect of its Incremental Commitment and all interest and other amounts owing in respect thereof under the Loan Documents (including all interest and expenses accrued or incurred subsequent to the commencement of any bankruptcy or insolvency proceeding with respect to the Borrower or the Subsidiary Guarantors, whether or not such interest or expenses are allowed as a claim in such proceeding), and (c) the Borrower and each Subsidiary Guarantor confirms its grant of a security interest in its assets as Collateral for the Secured Obligations, all as provided in the Loan Documents as originally executed (and amended prior to the Effective Date and supplemented hereby).

SECTION 7. Notices. All notices hereunder shall be given in accordance with the provisions of Section 9.01 of the Credit Agreement.

SECTION 8. Expenses. Pursuant to Section 9.03 of the Credit Agreement, the Borrower agrees to pay all reasonable and documented out-of-pocket fees, costs and expenses incurred by the Administrative Agent in connection with this Agreement, that are due and owing as of the date hereof, in accordance with the Credit Agreement, including the reasonable and documented out-of-pocket fees, charges and disbursements of one outside counsel for the Administrative Agent.

SECTION 9. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.

SECTION 10. Applicable Law; Jurisdiction; Consent to Service of Process; Other. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THE PROVISIONS OF SECTION 9.09 OF THE CREDIT AGREEMENT (AND ALL OTHER APPLICABLE PROVISIONS OF ARTICLE IX OF THE CREDIT AGREEMENT) ARE HEREBY INCORPORATED BY REFERENCE.

SECTION 11.     Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO

ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 12. Headings. The headings of this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 13. No Third Party Beneficiaries. This Agreement is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any other person or entity. No person or entity other than the parties hereto shall have any rights under or be entitled to rely upon this Agreement.

SECTION 14. Electronic Execution of Documents. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.

SECTION 15.    Acknowledgment and Consent. The Administrative Agent hereby acknowledges that it has received notice pursuant to Section 2.07(e)(i) of the Credit Agreement within the time period required thereunder.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized representatives as of the day and year first above written.

BARINGS BDC, INC.,
as Borrower
By: /s/ Jonathan Landsberg
Jonathan Landsberg
Treasurer
ENERGY HARDWARE HOLDINGS, INC.,
--- ---
as Subsidiary Guarantor
By: /s/ Jonathan Landsberg
Jonathan Landsberg
Treasurer
BARINGS BDC FINANCE I, LLC,
--- ---
as Subsidiary Guarantor
By: /s/ Jonathan Landsberg
Jonathan Landsberg
Treasurer
BARINGS BDC SENIOR FUNDING I, LLC
--- ---
as Subsidiary Guarantor
By: /s/ Jonathan Landsberg
Jonathan Landsberg
Treasurer

[Signature Page to Incremental Commitment and Assumption Agreement – BBDC]

ING CAPITAL LLC,
as Administrative Agent and as Issuing Bank
By: /s/ Grace Fu
Name: Grace Fu
Title: Managing Director
By: /s/ Ruben De Saegher
Name: Ruben De Saegher
Title: Vice President

[Signature Page to Incremental Commitment and Assumption Agreement – BBDC]

SUMITOMO MITSUI BANKING CORPORATION,
as Incremental Lender
By: /s/ Shane Klein
Name: Shane Klein
Title: Managing Director

[Signature Page to Incremental Commitment and Assumption Agreement – BBDC]

ANNEX I

INCREMENTAL COMMITMENTS

Incremental Lender Incremental Commitment (Dollar)
SUMITOMO MITSUI BANKING CORPORATION $100,000,000
Total $100,000,000

Document

Exhibit 31.1

Certification of Chief Executive Officer of Barings BDC, Inc.

pursuant to Rule 13a-14(a) under the Exchange Act,

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Eric Lloyd, as Chief Executive Officer, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Barings BDC, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ ERIC LLOYD
Eric Lloyd
Chief Executive Officer
May 5, 2022

Document

Exhibit 31.2

Certification of Chief Financial Officer of Barings BDC, Inc.

pursuant to Rule 13a-14(a) under the Exchange Act,

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jonathan Bock, as Chief Financial Officer, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Barings BDC, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ JONATHAN BOCK
Jonathan Bock
Chief Financial Officer
May 5, 2022

Document

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Barings BDC, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric Lloyd, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ERIC LLOYD
Eric Lloyd
Chief Executive Officer
May 5, 2022

Document

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Barings BDC, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan Bock, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JONATHAN BOCK
Jonathan Bock
Chief Financial Officer
May 5, 2022

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