SEC Company Response from Main Street Capital (MAIN) — Jul 16, 2015
Main Street Capital CORP
Date: July 16, 2015 · CIK: 0001396440 · Accession: 0001104659-15-051380
AI Filing Summary & Sentiment
File numbers found in text: 333-203147, 814-00746
Letter
U.S. Securities and Exchange Commission Division of Investment Management — Disclosure Review Office 100 F Street N.E. Washington, D.C. 20549 RE: Main Street Capital Corporation — Registration Statement on Form N-2 (File Nos. 333-203147 and 814-00746) (the “Registration Statement”)
Dear Ms. Fettig and Mr. O’Connor:
On behalf of Main Street Capital Corporation (the “Company”), set forth below are the Company’s responses to the comments provided by the staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the “SEC”) to the Company on April 30, 2015 relating to the Registration Statement. The Staff’s comments are set forth below and are followed by the Company’s responses. Where revisions to the Registration Statement are referenced in the Company’s responses set forth below, such revisions have been included in Pre-Effective Amendment No. 1 to the Registration Statement.
Legal Comments
Overview
1. Please disclose how “weighted average annual effective yield” is calculated. Please also disclose, wherever the term is used, that this yield is higher than what investors in the Fund will realize because it does not reflect the Fund’s expenses and any sales load paid by investors.
Response: The Company will revise the disclosure accordingly beginning with the Company’s quarterly report on Form 10-Q for the quarter ending June 30, 2015.
ATLANTA AUSTIN HOUSTON NEW YORK SACRAMENTO WASHINGTON DC
Ms. Christina DiAngelo Fettig
Mr. James E. O’Connor
U.S. Securities and Exchange Commission
July 16, 2015
Page 2
2. Please disclose, where appropriate in this subsection, the Fund’s “total investment return” and how it is calculated, including that it does not reflect any sales load that may be paid by investors. See Instruction 13 to Item 4 of Form N-2.
Response: The Company has complied with this comment. See pages 5 and 45 of the Registration Statement.
Fees and Expenses, Page 14
3. We calculate income tax expense of .71% as opposed to the disclosed amount of .67%. Please explain.
Response: The Company advises the Staff that it calculates the income tax expense as 0.67% by dividing the tax provision ($6,287) by the total net assets ($939,982) as of December 31, 2014.
4. Please disclose supplementally any amounts paid or payable to the External Investment Manager by Fund and its subsidiaries in 2014.
Response: The Company confirms that no amounts were paid or are payable to the External Investment Manager by the Company or its subsidiaries in 2014.
There are significant potential conflicts of interest which could impact our investment returns, Page 16
5. The disclosure states: “Our investment objective and investment strategies are very similar to those of HMS Income….” The Fund’s exemptive relief application stated, however, that the HMS Income Fund has the identical investment objectives and strategies as the Fund. Please clarify this apparent inconsistency.
Response: The Company refers the Staff to Exhibit D of Amendment No. 6 to the Company’s application for exemptive relief (File No. 812-14016), filed on March 17, 2014 (the “Exemptive Application”), which states that the investment objectives and strategies of the Company are “similar” to those of HMS Income Fund, Inc. As a result, the Company believes that the disclosure in the prospectus is consistent with its representations in the Exemptive Application.
Ms. Christina DiAngelo Fettig
Mr. James E. O’Connor
U.S. Securities and Exchange Commission
July 16, 2015
Page 3
6. Please disclose that, because the External Investment Manager receives performance fee compensation from HMS Income Fund, this may provide an incentive to allocate opportunities to HMS Income Fund instead of the Fund.
Response: The Company has revised the disclosure accordingly. See pages 6, 18, 50 and 83 of the Registration Statement.
We may have difficulty paying the distributions…if we recognize income before or without receiving cash representing such income, page 22
7. Please add the following disclosure with respect to the Fund’s investments in original issue discount instruments, including PIK loans:
· PIK loans may have unreliable valuations because the accruals require judgments about collectability.
· PIK loans may create heightened credit risks because the inducement to trade higher rates for the deferral of cash payments typically represents, to some extent, speculation on the part of the Fund about the borrower’s future ability to pay.
· Because original issue discount income is accrued without any cash being received by the Fund, required cash distributions may have to be paid from the proceeds of this offering or the sale of Fund assets and you will not be given any notice of this fact.
Response: The Company has revised the disclosure accordingly. See page 30 of the Registration Statement.
We may be unable to invest a significant portion of the net proceeds from an offering or from exiting an investment or other capital on acceptable terms…, Page 29
8. Please disclose how long the Fund expects to take to invest substantially all of the proceeds of the offering. If this is more than three months, please disclose the reason for this delay. See Item 7.2 of Form N-2 and Guide 1 to Form N-2.
Response: The Company advises the Staff that given the nature of the Registration Statement (i.e., a shelf registration that permits the delayed offering of the Company’s securities from time to time for a period of up to three years), the Company is not currently able to respond to the Staff’s requests. The Company confirms that, in any prospectus supplement issued in connection with a “takedown” from the Registration Statement, it will disclose, in accordance with “Guide 1. Use of Proceeds” to Form N-2,
Ms. Christina DiAngelo Fettig
Mr. James E. O’Connor
U.S. Securities and Exchange Commission
July 16, 2015
Page 4
the reasons for, and consequences of, any expected lengthy delay in investing substantially all of the proceeds of the “takedown.”
Price Range of Our Common Stock and Distributions, Page 33
9. Please revise the format of the chart under the caption “Price Range of Common Stock and Distributions” to disclose the premium or discount as a percentage of net asset value. See Instruction 4 to Item 8.5.b of Form N-2.
Response: The Company has revised the format of the chart accordingly. See page 38 of the Registration Statement.
Capital Resources, Page 72
10. The disclosure refers to the “6.125% Notes” as “pari passu with our current and future senior unsecured indebtedness [and] senior to any of our future indebtedness that expressly provides it is subordinated.” Please inform us whether the “6.125 notes” are titled “senior.” If so, we may have additional comments.
Response: In accordance with previous comments from the Staff, the Company no longer publicly refers to the 6.125% notes as “senior”.
Off-Balance Sheet Arrangements, Page 75
11. Unfunded commitments, which are contractual obligations of the Fund to make loans up to a specified amount at future dates, may subject the Fund to risks similar to those created by standby commitment agreements. Unfunded commitments, like standby commitment agreements, may be senior securities under Section 18(g) (“any … obligation or instrument constituting a security and evidencing indebtedness”). See Investment Company Act Release 10666, “Securities Trading Practices of Registered Investment Companies” (April 18, 1979). The Staff considers unfunded commitments that specify an interest rate to be senior securities subject to the coverage requirements of Sections 18 and 61 unless the Fund has segregated liquid assets equal to the market value of its unfunded commitments. Does the Fund currently treat its unfunded commitments as senior securities? If not, why not? Does the Fund currently segregate liquid assets sufficient to cover its unfunded commitments?
Response: The Company understands that the Staff is in discussions with a number of other BDCs with respect to this issue and, as a result, undertakes to comply with any industry-wide position taken by the Staff resulting therefrom with respect to its unfunded commitments.
Ms. Christina DiAngelo Fettig
Mr. James E. O’Connor
U.S. Securities and Exchange Commission
July 16, 2015
Page 5
Notwithstanding the foregoing, in the event that the Staff determines that some or all of the unfunded commitments held by BDCs (including senior secured revolving credit facilities, delayed draw term loans and capital commitments to private equity fund) should be treated as “senior securities” for purposes of Section 18 of the Investment Company Act of 1940 (the “1940 Act”), the Company believes that the Staff should specifically acknowledge the appropriateness of the following practices in connection therewith:
· To the extent that the Company has sufficient cash and/or liquid assets to cover some or all of its unfunded commitments and elects to do so, such portion of its unfunded commitments should not be deemed to be “senior securities” for purposes of Section 18 of the 1940 Act for so long as they remain covered.
· To the extent that the Company does not have sufficient cash and/or liquid assets to cover some or all of its unfunded commitments or elects not to cover some or all of its unfunded commitments in such manner, the Company would be required to treat the uncovered unfunded commitments as “senior securities” for purposes of Section 18 of the 1940 Act.
· In the event that the Company is required to treat some or all of its unfunded commitments as “senior securities” for purposes of Section 18 of the 1940 Act or otherwise elects to do so, then the Company would increase the numerator (i.e., the Company’s total assets less all liabilities and indebtedness not represented by senior securities) and the denominator (i.e., the amount of the Company’s senior securities representing indebtedness) in connection with calculating its compliance with the asset coverage requirement set forth in Section 18 of the 1940 Act in an amount equal to the Company’s unfunded commitments that are treated as “senior securities” for purposes of Section 18 of the 1940 Act. The rationale for such approach is that if the Company is being required to treat unfunded commitments as senior securities (i.e., outstanding indebtedness), then it should be able to similarly treat such commitments as having been funded and, as a result, as outstanding assets for purposes of calculating its compliance with the asset coverage requirement set forth in Section 18 of the 1940 Act.
Ms. Christina DiAngelo Fettig
Mr. James E. O’Connor
U.S. Securities and Exchange Commission
July 16, 2015
Page 6
Determination of Net Asset Value and Portfolio Valuation Process, Page 89
12. The disclosure states that, in arriving at estimates of fair value,” the Fund “consults” with a “nationally recognized independent financial advisory services firm.” Please disclose the nature of these consultations and the nature of this firm. Please inform the Staff supplementally of the identity of the “nationally recognized” firm currently being used by the Fund.
Response: The Company advises the Staff that the nationally recognized independent advisor that the Company currently consults is Deloitte Transactions and Business Analytics LLP, an affiliate of Deloitte Financial Advisory Services LLP.
The nationally recognized independent advisor analyzes and provides observations and recommendations regarding the Company’s determinations of the fair value of its investments in lower middle market (“LMM”) portfolio companies. The Company consulted with its independent financial advisory services firm in arriving at the Company’s determination of fair value on its investments in a total of 52 LMM portfolio companies for the year ended December 31, 2014, representing approximately 83% of the total LMM portfolio at fair value as of December 31, 2014, and on a total of 50 LMM portfolio companies for the year ended December 31, 2013, representing approximately 76% of the total LMM portfolio at fair value as of December 31, 2014. Excluding investments in new LMM portfolio companies which have not been in the investment portfolio for at least twelve months subsequent to the initial investment as of December 31, 2014 and 2013, as applicable, and investments in the LMM portfolio companies that were not reviewed because their equity is publicly traded, the percentage of the LMM portfolio reviewed by our independent financial advisory services firm for the year ended December 31, 2014 and 2013 was 99% and 100% of the total LMM portfolio at fair value as of December 31, 2014 and 2013, respectively. The board of directors of the Company (the “Board”) has the final responsibility for reviewing and approving, in good faith, the Company’s determination of the fair value for the investments. The nationally recognized independent financial advisory services firm is generally consulted relative to the Company’s investments in each LMM portfolio company at least once every calendar year, and for the Company’s investments in new LMM portfolio companies, at least once in the twelve-month period subsequent to the initial investment.
13. The disclosure states: “In certain instances, we may determine that it is not cost- effective, and as a result is not in our stockholders’ best interest, to consult with the nationally recognized independent financial advisory services firm on our investments in one or more LMM portfolio companies.” Please disclose the kinds of circumstances in which it would not be cost effective and in stockholders’ best interest to consult with the financial advisory services firm when fair valuing an LMM portfolio company investment. Will the Board be involved in such a determination?
Response: The Company advises the Staff that it may determine that it is not cost-effective, and as a result is not in its stockholders’ best interest, to consult with the nationally recognized independent advisor on one or more LMM portfolio companies. Such instances include, but are not limited to, situations where the fair value of the Company’s investment in an LMM portfolio company is determined to be insignificant relative to the total investment portfolio. The Board has delegated to management the
Ms. Christina DiAngelo Fettig
Mr. James E. O’Connor
U.S. Securities and Exchange Commission
July 16, 2015
Page 7
authority to determine which, if any, investments would not be cost-effective to consult with the independent advisor, and the Board monitors and approves such decisions quarterly in connection with its approval of the quarterly valuations. Excluding investments in new LMM portfolio companies which have not been in the investment portfolio for at least twelve months subsequent to the initial investment as of December 31, 2014 and 2013, as applicable, and investments in the LMM portfolio companies that were not reviewed because their equity is publicly traded, the percentage of the LMM portfolio reviewed by the Company’s independent financial advisory services firm for the year ended December 31, 2014 and 2013 was 99% and 100% of the total LMM portfolio at fair value as of December 31, 2014 and 2013, respectively.
14. The disclosure appears to indicate that the Fund does not consult with the financial advisory services firm when it fair values its Middle Market portfolio investme
Show Raw Text
CORRESP 1 filename1.htm HARRY S. PANGAS DIRECT LINE: 202.383.0805 E-mail: harry.pangas@sutherland.com July 16, 2015 Ms. Christina DiAngelo Fettig Senior Staff Accountant U.S. Securities and Exchange Commission Division of Investment Management — Disclosure Review Office 100 F Street N.E. Washington, D.C. 20549 James E. O’Connor Senior Counsel U.S. Securities and Exchange Commission Division of Investment Management — Disclosure Review Office 100 F Street N.E. Washington, D.C. 20549 RE: Main Street Capital Corporation — Registration Statement on Form N-2 (File Nos. 333-203147 and 814-00746) (the “Registration Statement”) Dear Ms. Fettig and Mr. O’Connor: On behalf of Main Street Capital Corporation (the “Company”), set forth below are the Company’s responses to the comments provided by the staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the “SEC”) to the Company on April 30, 2015 relating to the Registration Statement. The Staff’s comments are set forth below and are followed by the Company’s responses. Where revisions to the Registration Statement are referenced in the Company’s responses set forth below, such revisions have been included in Pre-Effective Amendment No. 1 to the Registration Statement. Legal Comments Overview 1. Please disclose how “weighted average annual effective yield” is calculated. Please also disclose, wherever the term is used, that this yield is higher than what investors in the Fund will realize because it does not reflect the Fund’s expenses and any sales load paid by investors. Response: The Company will revise the disclosure accordingly beginning with the Company’s quarterly report on Form 10-Q for the quarter ending June 30, 2015. ATLANTA AUSTIN HOUSTON NEW YORK SACRAMENTO WASHINGTON DC Ms. Christina DiAngelo Fettig Mr. James E. O’Connor U.S. Securities and Exchange Commission July 16, 2015 Page 2 2. Please disclose, where appropriate in this subsection, the Fund’s “total investment return” and how it is calculated, including that it does not reflect any sales load that may be paid by investors. See Instruction 13 to Item 4 of Form N-2. Response: The Company has complied with this comment. See pages 5 and 45 of the Registration Statement. Fees and Expenses, Page 14 3. We calculate income tax expense of .71% as opposed to the disclosed amount of .67%. Please explain. Response: The Company advises the Staff that it calculates the income tax expense as 0.67% by dividing the tax provision ($6,287) by the total net assets ($939,982) as of December 31, 2014. 4. Please disclose supplementally any amounts paid or payable to the External Investment Manager by Fund and its subsidiaries in 2014. Response: The Company confirms that no amounts were paid or are payable to the External Investment Manager by the Company or its subsidiaries in 2014. There are significant potential conflicts of interest which could impact our investment returns, Page 16 5. The disclosure states: “Our investment objective and investment strategies are very similar to those of HMS Income….” The Fund’s exemptive relief application stated, however, that the HMS Income Fund has the identical investment objectives and strategies as the Fund. Please clarify this apparent inconsistency. Response: The Company refers the Staff to Exhibit D of Amendment No. 6 to the Company’s application for exemptive relief (File No. 812-14016), filed on March 17, 2014 (the “Exemptive Application”), which states that the investment objectives and strategies of the Company are “similar” to those of HMS Income Fund, Inc. As a result, the Company believes that the disclosure in the prospectus is consistent with its representations in the Exemptive Application. Ms. Christina DiAngelo Fettig Mr. James E. O’Connor U.S. Securities and Exchange Commission July 16, 2015 Page 3 6. Please disclose that, because the External Investment Manager receives performance fee compensation from HMS Income Fund, this may provide an incentive to allocate opportunities to HMS Income Fund instead of the Fund. Response: The Company has revised the disclosure accordingly. See pages 6, 18, 50 and 83 of the Registration Statement. We may have difficulty paying the distributions…if we recognize income before or without receiving cash representing such income, page 22 7. Please add the following disclosure with respect to the Fund’s investments in original issue discount instruments, including PIK loans: · PIK loans may have unreliable valuations because the accruals require judgments about collectability. · PIK loans may create heightened credit risks because the inducement to trade higher rates for the deferral of cash payments typically represents, to some extent, speculation on the part of the Fund about the borrower’s future ability to pay. · Because original issue discount income is accrued without any cash being received by the Fund, required cash distributions may have to be paid from the proceeds of this offering or the sale of Fund assets and you will not be given any notice of this fact. Response: The Company has revised the disclosure accordingly. See page 30 of the Registration Statement. We may be unable to invest a significant portion of the net proceeds from an offering or from exiting an investment or other capital on acceptable terms…, Page 29 8. Please disclose how long the Fund expects to take to invest substantially all of the proceeds of the offering. If this is more than three months, please disclose the reason for this delay. See Item 7.2 of Form N-2 and Guide 1 to Form N-2. Response: The Company advises the Staff that given the nature of the Registration Statement (i.e., a shelf registration that permits the delayed offering of the Company’s securities from time to time for a period of up to three years), the Company is not currently able to respond to the Staff’s requests. The Company confirms that, in any prospectus supplement issued in connection with a “takedown” from the Registration Statement, it will disclose, in accordance with “Guide 1. Use of Proceeds” to Form N-2, Ms. Christina DiAngelo Fettig Mr. James E. O’Connor U.S. Securities and Exchange Commission July 16, 2015 Page 4 the reasons for, and consequences of, any expected lengthy delay in investing substantially all of the proceeds of the “takedown.” Price Range of Our Common Stock and Distributions, Page 33 9. Please revise the format of the chart under the caption “Price Range of Common Stock and Distributions” to disclose the premium or discount as a percentage of net asset value. See Instruction 4 to Item 8.5.b of Form N-2. Response: The Company has revised the format of the chart accordingly. See page 38 of the Registration Statement. Capital Resources, Page 72 10. The disclosure refers to the “6.125% Notes” as “pari passu with our current and future senior unsecured indebtedness [and] senior to any of our future indebtedness that expressly provides it is subordinated.” Please inform us whether the “6.125 notes” are titled “senior.” If so, we may have additional comments. Response: In accordance with previous comments from the Staff, the Company no longer publicly refers to the 6.125% notes as “senior”. Off-Balance Sheet Arrangements, Page 75 11. Unfunded commitments, which are contractual obligations of the Fund to make loans up to a specified amount at future dates, may subject the Fund to risks similar to those created by standby commitment agreements. Unfunded commitments, like standby commitment agreements, may be senior securities under Section 18(g) (“any … obligation or instrument constituting a security and evidencing indebtedness”). See Investment Company Act Release 10666, “Securities Trading Practices of Registered Investment Companies” (April 18, 1979). The Staff considers unfunded commitments that specify an interest rate to be senior securities subject to the coverage requirements of Sections 18 and 61 unless the Fund has segregated liquid assets equal to the market value of its unfunded commitments. Does the Fund currently treat its unfunded commitments as senior securities? If not, why not? Does the Fund currently segregate liquid assets sufficient to cover its unfunded commitments? Response: The Company understands that the Staff is in discussions with a number of other BDCs with respect to this issue and, as a result, undertakes to comply with any industry-wide position taken by the Staff resulting therefrom with respect to its unfunded commitments. Ms. Christina DiAngelo Fettig Mr. James E. O’Connor U.S. Securities and Exchange Commission July 16, 2015 Page 5 Notwithstanding the foregoing, in the event that the Staff determines that some or all of the unfunded commitments held by BDCs (including senior secured revolving credit facilities, delayed draw term loans and capital commitments to private equity fund) should be treated as “senior securities” for purposes of Section 18 of the Investment Company Act of 1940 (the “1940 Act”), the Company believes that the Staff should specifically acknowledge the appropriateness of the following practices in connection therewith: · To the extent that the Company has sufficient cash and/or liquid assets to cover some or all of its unfunded commitments and elects to do so, such portion of its unfunded commitments should not be deemed to be “senior securities” for purposes of Section 18 of the 1940 Act for so long as they remain covered. · To the extent that the Company does not have sufficient cash and/or liquid assets to cover some or all of its unfunded commitments or elects not to cover some or all of its unfunded commitments in such manner, the Company would be required to treat the uncovered unfunded commitments as “senior securities” for purposes of Section 18 of the 1940 Act. · In the event that the Company is required to treat some or all of its unfunded commitments as “senior securities” for purposes of Section 18 of the 1940 Act or otherwise elects to do so, then the Company would increase the numerator (i.e., the Company’s total assets less all liabilities and indebtedness not represented by senior securities) and the denominator (i.e., the amount of the Company’s senior securities representing indebtedness) in connection with calculating its compliance with the asset coverage requirement set forth in Section 18 of the 1940 Act in an amount equal to the Company’s unfunded commitments that are treated as “senior securities” for purposes of Section 18 of the 1940 Act. The rationale for such approach is that if the Company is being required to treat unfunded commitments as senior securities (i.e., outstanding indebtedness), then it should be able to similarly treat such commitments as having been funded and, as a result, as outstanding assets for purposes of calculating its compliance with the asset coverage requirement set forth in Section 18 of the 1940 Act. Ms. Christina DiAngelo Fettig Mr. James E. O’Connor U.S. Securities and Exchange Commission July 16, 2015 Page 6 Determination of Net Asset Value and Portfolio Valuation Process, Page 89 12. The disclosure states that, in arriving at estimates of fair value,” the Fund “consults” with a “nationally recognized independent financial advisory services firm.” Please disclose the nature of these consultations and the nature of this firm. Please inform the Staff supplementally of the identity of the “nationally recognized” firm currently being used by the Fund. Response: The Company advises the Staff that the nationally recognized independent advisor that the Company currently consults is Deloitte Transactions and Business Analytics LLP, an affiliate of Deloitte Financial Advisory Services LLP. The nationally recognized independent advisor analyzes and provides observations and recommendations regarding the Company’s determinations of the fair value of its investments in lower middle market (“LMM”) portfolio companies. The Company consulted with its independent financial advisory services firm in arriving at the Company’s determination of fair value on its investments in a total of 52 LMM portfolio companies for the year ended December 31, 2014, representing approximately 83% of the total LMM portfolio at fair value as of December 31, 2014, and on a total of 50 LMM portfolio companies for the year ended December 31, 2013, representing approximately 76% of the total LMM portfolio at fair value as of December 31, 2014. Excluding investments in new LMM portfolio companies which have not been in the investment portfolio for at least twelve months subsequent to the initial investment as of December 31, 2014 and 2013, as applicable, and investments in the LMM portfolio companies that were not reviewed because their equity is publicly traded, the percentage of the LMM portfolio reviewed by our independent financial advisory services firm for the year ended December 31, 2014 and 2013 was 99% and 100% of the total LMM portfolio at fair value as of December 31, 2014 and 2013, respectively. The board of directors of the Company (the “Board”) has the final responsibility for reviewing and approving, in good faith, the Company’s determination of the fair value for the investments. The nationally recognized independent financial advisory services firm is generally consulted relative to the Company’s investments in each LMM portfolio company at least once every calendar year, and for the Company’s investments in new LMM portfolio companies, at least once in the twelve-month period subsequent to the initial investment. 13. The disclosure states: “In certain instances, we may determine that it is not cost- effective, and as a result is not in our stockholders’ best interest, to consult with the nationally recognized independent financial advisory services firm on our investments in one or more LMM portfolio companies.” Please disclose the kinds of circumstances in which it would not be cost effective and in stockholders’ best interest to consult with the financial advisory services firm when fair valuing an LMM portfolio company investment. Will the Board be involved in such a determination? Response: The Company advises the Staff that it may determine that it is not cost-effective, and as a result is not in its stockholders’ best interest, to consult with the nationally recognized independent advisor on one or more LMM portfolio companies. Such instances include, but are not limited to, situations where the fair value of the Company’s investment in an LMM portfolio company is determined to be insignificant relative to the total investment portfolio. The Board has delegated to management the Ms. Christina DiAngelo Fettig Mr. James E. O’Connor U.S. Securities and Exchange Commission July 16, 2015 Page 7 authority to determine which, if any, investments would not be cost-effective to consult with the independent advisor, and the Board monitors and approves such decisions quarterly in connection with its approval of the quarterly valuations. Excluding investments in new LMM portfolio companies which have not been in the investment portfolio for at least twelve months subsequent to the initial investment as of December 31, 2014 and 2013, as applicable, and investments in the LMM portfolio companies that were not reviewed because their equity is publicly traded, the percentage of the LMM portfolio reviewed by the Company’s independent financial advisory services firm for the year ended December 31, 2014 and 2013 was 99% and 100% of the total LMM portfolio at fair value as of December 31, 2014 and 2013, respectively. 14. The disclosure appears to indicate that the Fund does not consult with the financial advisory services firm when it fair values its Middle Market portfolio investme