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10-Q 1 d212052d10q.htm FORM 10-Q Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2021

☐	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 814-01246

TCW DIRECT LENDING VII LLC

(Exact Name of Registrant as Specified in Its Charter)


Delaware		82-2252672
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

200 Clarendon Street, Boston, MA		02116
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 936-2275

Not applicable

Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report.

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered

None	Not applicable	Not applicable

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 ☒ 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 (§232.405 of this chapter) 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	☒	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 Securities Exchange Act of 1934). Yes ☐ No ☒

As of September 30, 2021, there was no established public market for the Registrant’s common units. The number of the Registrant’s common units outstanding at November 8, 2021 was 13,734,010.

TCW DIRECT LENDING VII LLC

FORM 10-Q FOR THE QUARTER ENDED September 30, 2021

Table of Contents


	INDEX	PAGE NO.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Schedule of Investments as of September 30, 2021 (unaudited) and December 31, 2020		2
	Consolidated Statements of Assets and Liabilities as of September 30, 2021 (unaudited) and December 31, 2020		14
	Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (unaudited)		15
	Consolidated Statements of Changes in Members’ Capital for the nine months ended September 30, 2021 and 2020 (unaudited)		16
	Consolidated Statement of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited)		17
	Notes to Consolidated Financial Statements (unaudited)		18
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		52
Item 4.	Controls and Procedures		52
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings		53
Item 1A.	Risk Factors		53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		53
Item 3.	Defaults Upon Senior Securities		53
Item 4.	Mine Safety Disclosures		53
Item 5.	Other Information		53
Item 6.	Exhibits		54
SIGNATURES			55

TCW Direct Lending VII LLC

Consolidated Schedule of Investments (Unaudited)

As of September 30, 2021


Industry	Issuer	Acquisition Date	Investment	% of Net Assets			Par Amount		Maturity Date		Amortized Cost		Fair Value
	DEBT ⁽¹⁾

Aerospace & Defense
	Columbia Helicopters Inc.	08/20/19	Last Out Term Loan - 9.00% (LIBOR + 7.50%, 1.50% Floor)		2.9	%	$	30,088,398		08/20/24	$	29,734,456	$	29,245,923
	Heligear Acquisition Co.	07/30/19	Term Loan - 8.50% (LIBOR + 7.00%, 1.50% Floor)		5.5	%		54,770,759		07/30/24		54,138,247		55,318,467
	Karman Holdings LLC	12/21/20	Revolver - 7.75% (LIBOR + 6.75%, 1.00% Floor)		0.2	%		2,294,202		12/21/25		2,294,202		2,275,849
	Karman Holdings LLC	12/21/20	Term Loan - 7.75% (LIBOR + 6.75%, 1.00% Floor)		6.3	%		64,321,632		12/21/25		63,116,747		63,807,059
	Navistar Defense, LLC	12/31/18	Term Loan - 7.75% (LIBOR + 6.25%, 1.50% Floor)		1.5	%		17,192,190		12/31/23		16,974,793		15,215,088

					16.4	%						166,258,445		165,862,386


Air Freight & Logistics
	Need It Now Delivers, LLC	12/23/19	Last Out Delayed Draw Term Loan - 10.25% (LIBOR + 8.50%, 1.75% Floor)		0.1	%		1,422,039		12/23/24		1,422,039		1,422,039
	Need It Now Delivers, LLC	12/23/19	Last Out Term Loan - 10.25% (LIBOR + 8.50%, 1.75% Floor)		1.3	%		13,515,465		12/23/24		13,301,058		13,515,465

					1.4	%						14,723,097		14,937,504


Auto Components
	Shipston Group U.S. Inc.	05/18/20	Last Out Term Loan - 9.00% inc PIK (LIBOR + 7.75%, 1.25% Floor, 2.00% PIK)		0.2	%		1,773,139		09/28/23		1,773,139		1,698,667
	Shipston Group U.S. Inc.	09/28/18	Last Out Term Loan - 9.00% inc PIK (LIBOR + 7.75%, 1.25% Floor, 2.00% PIK)		2.5	%		26,480,069		09/28/23		26,315,229		25,367,906

					2.7	%						28,088,368		27,066,573


Beverages
	Westrock Coffee Company, LLC	02/28/20	Term Loan - 10.50% inc PIK (LIBOR + 9.00%, 1.50% Floor, 0.75% PIK)		6.4	%		64,942,791		02/28/25		64,175,045		64,553,135

					6.4	%						64,175,045		64,553,135


Capital Goods
	Carolina Atlantic Roofing Suppy LLC	05/28/21	Term Loan - 8.25% (LIBOR + 7.25%, 1.00% Floor)		4.6	%		46,044,600		05/28/26		45,187,253		46,366,912

					4.6	%						45,187,253		46,366,912


Chemicals
	AGY Holdings Corp. ⁽²⁾	09/21/20	Delayed Draw Term Loan - 11.50% inc PIK (LIBOR + 10.00%, 1.50% Floor, 6.00% PIK)		1.5	%		15,001,581		09/21/25		15,001,581		15,001,581
	AGY Holdings Corp. ⁽²⁾	09/21/20	Term Loan - 11.50% inc PIK (LIBOR + 10.00%, 1.50% Floor, 6.00% PIK)		2.4	%		24,749,237		09/21/25		24,749,237		24,749,237

					3.9	%						39,750,818		39,750,818


Commercial & Professional Services
	Rapid Displays, Inc.	04/16/21	Term Loan - 7.63% (LIBOR + 6.63%, 1.00% Floor)		1.4	%		14,124,600		04/13/26		13,962,310		13,842,108

					1.4	%						13,962,310		13,842,108


Commercial Services & Supplies
	Clover Imaging Group, LLC	12/16/19	Term Loan - 9.00% (LIBOR + 7.50%, 1.50% Floor)		0.8	%		8,474,934		12/16/24		8,365,724		8,441,034
	Retail Services WIS Corporation	05/20/21	Delayed Draw Term Loan - 8.75% (LIBOR + 7.75%, 1.00% Floor)		0.5	%		5,363,077		05/20/25		5,363,077		5,523,970
	Retail Services WIS Corporation	05/20/21	Term Loan - 8.75% (LIBOR + 7.75%, 1.00% Floor)		5.4	%		53,562,055		05/20/25		52,030,421		55,168,916

					6.7	%						65,759,222		69,133,920

TCW Direct Lending VII LLC

Consolidated Schedule of Investments (Unaudited) (Continued)

As of September 30, 2021


Industry	Issuer	Acquisition Date	Investment	% of Net Assets			Par Amount		Maturity Date		Amortized Cost		Fair Value
	Debt (continued)

Construction & Engineering
	UniTek Acquisition, Inc.	09/16/20	Delayed Draw Term Loan A - 7.50% inc PIK (LIBOR + 6.50%, 1.00% Floor, 2.00% PIK)		0.1	%	$	1,551,242		08/20/23	$	927,568	$	1,399,220
	UniTek Acquisition, Inc.	08/20/18	Delayed Draw Term Loan B - 8.50% inc PIK (LIBOR + 7.50%, 1.00% Floor, 2.00% PIK)		0.3	%		3,421,640		08/20/24		3,421,640		2,915,237
	UniTek Acquisition, Inc.	11/10/20	Revolver - 7.75% (Prime + 4.50%, 1.00% Floor)		0.1	%		1,501,481		08/20/23		1,501,481		1,354,336
	UniTek Acquisition, Inc.	09/16/20	Term Loan A - 7.50% inc PIK (LIBOR + 6.50%, 1.00% Floor, 2.00% PIK)		0.7	%		7,756,208		08/20/23		4,634,278		6,996,100
	UniTek Acquisition, Inc.	08/20/18	Term Loan B - 8.50% inc PIK (LIBOR + 7.50%, 1.00% Floor, 2.00% PIK)		1.4	%		17,109,164		08/20/24		16,913,071		14,577,008

					2.6	%						27,398,038		27,241,901


Construction Materials
	United Poly Systems Holding, Inc.	12/28/20	Mezzanine Loan - 13.00% inc PIK (13.00% Fixed Coupon, all PIK)		0.7	%		7,786,373		12/31/25		7,786,373		7,210,181

					0.7	%						7,786,373		7,210,181


Consumer Durables & Apparel
	Rocky Brands, Inc. ⁽³⁾	03/15/21	Term Loan - 7.50% (LIBOR + 6.50%, 1.00% Floor)		4.9	%		49,199,810		03/15/26		48,323,590		50,183,806
	Twin Star International, Inc.	06/18/21	Term Loan - 8.25% (LIBOR + 7.25%, 1.00% Floor)		4.1	%		41,775,300		06/18/26		41,283,418		41,357,547

					9.0	%						89,607,008		91,541,353


Consumer Services
	Grand Circle Corporation	02/26/21	Term Loan - 11.75% (LIBOR + 10.50%, 1.25% Floor)		4.0	%		40,363,826		02/26/26		39,652,486		40,363,826

					4.0	%						39,652,486		40,363,826


Energy Equipment & Services
	Profrac Services, LLC	09/07/18	Term Loan - 9.75% (LIBOR + 8.50%, 1.25% Floor)		4.9	%		51,155,454		09/07/23		49,955,516		49,978,878
	WDE TorcSill Holdings LLC	10/22/19	Revolver - 12.00% inc PIK (LIBOR + 10.50%, 1.50% Floor, 3.75% PIK)		0.5	%		5,596,444		10/22/24		5,596,444		5,361,393
	WDE TorcSill Holdings LLC	10/22/19	Term Loan - 12.00% inc PIK (LIBOR + 10.50%, 1.50% Floor, 3.75% PIK)		2.4	%		25,830,778		10/22/24		25,437,448		24,745,885

					7.8	%						80,989,408		80,086,156


Food Products
	Hometown Food Company	08/31/18	Revolver - 6.25% (LIBOR + 5.00%, 1.25% Floor)		0.1	%		784,157		08/31/23		784,157		784,157
	Hometown Food Company	08/31/18	Term Loan - 6.25% (LIBOR + 5.00%, 1.25% Floor)		2.6	%		25,994,800		08/31/23		25,768,900		25,994,800

					2.7	%						26,553,057		26,778,957


Health Care Technology
	American Academy Holdings, LLC	08/14/19	Term Loan - 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, 3.75% PIK)		3.1	%		30,724,827		01/01/25		30,298,854		31,308,598
	PatientPoint Health Technologies, LLC	03/30/21	Term Loan - 8.00% (LIBOR + 7.00%, 1.00% Floor)		1.7	%		16,716,000		03/07/25		16,315,450		16,883,160

					4.8	%						46,614,304		48,191,758


Hotels, Restaurants & Leisure
	FM Restaurants Holdco, LLC	11/25/19	Term Loan - 9.75% (LIBOR + 8.00%, 1.75% Floor)		2.1	%		21,179,418		11/22/23		20,896,301		21,179,418
	KBP Brands, LLC	05/26/21	Term Loan - 5.75% (LIBOR + 5.00%, 0.75% Floor)		1.0	%		9,985,255		05/26/27		9,679,693		9,895,387
	Red Lobster Management, LLC	01/22/21	Term Loan - 8.50% (LIBOR + 7.50%, 1.00% Floor)		5.4	%		55,179,013		01/22/26		54,227,734		55,234,192

					8.5	%						84,803,728		86,308,997

TCW Direct Lending VII LLC

Consolidated Schedule of Investments (Unaudited) (Continued)

As of September 30, 2021


Industry	Issuer	Acquisition Date	Investment	% of Net Assets			Par Amount		Maturity Date		Amortized Cost		Fair Value
	Debt (continued)

Household & Personal Products
	Obagi Cosmeceuticals LLC	03/16/21	Revolver - 8.50% (LIBOR + 7.50%, 1.00% Floor)		0.7	%	$	6,784,800		03/16/26	$	6,784,800	$	6,784,800
	Obagi Cosmeceuticals LLC	03/16/21	Term Loan - 8.50% (LIBOR + 7.50%, 1.00% Floor)		5.1	%		49,506,424		03/16/26		48,221,784		51,486,681

					5.8	%						55,006,584		58,271,481


Household Durables
	Slogic Holding Corp. ⁽⁴⁾	06/29/18	Last Out Term Loan - 7.28% (LIBOR + 6.28%, 1.00% Floor)		2.6	%		26,824,609		06/22/23		26,731,909		26,824,609

					2.6	%						26,731,909		26,824,609


Household Products
	Greenfield World Trade, Inc.	03/04/19	Last Out Term Loan - 14.83% inc PIK (LIBOR + 13.33%, 1.50% Floor, 6.00% PIK)		5.0	%		50,385,998		03/04/24		47,449,898		50,738,700

					5.0	%						47,449,898		50,738,700


Information Technology Services
	Corcentric, Inc.	11/15/18	Delayed Draw Term Loan - 8.50% (LIBOR + 7.00%, 1.50% Floor)		1.2	%		12,466,440		11/15/23		12,466,440		12,466,440
	Corcentric, Inc.	11/15/18	Term Loan - 8.50% (LIBOR + 7.00%, 1.50% Floor)		3.1	%		31,693,780		11/15/23		31,352,489		31,693,780

					4.3	%						43,818,929		44,160,220


Internet & Direct Marketing Retail
	Altern Marketing LLC	09/30/20	First Out Term Loan - 8.00% (LIBOR + 6.00%, 2.00% Floor)		1.2	%		11,535,928		10/07/24		11,341,048		11,685,895

					1.2	%						11,341,048		11,685,895


Media
	Encompass Digital Media, Inc.	10/01/18	Revolver - 8.75% (LIBOR + 7.50%, 1.25% Floor)		0.0	%		505,511		09/28/23		505,511		505,511
	Encompass Digital Media, Inc.	10/01/18	Term Loan - 8.75% inc PIK (LIBOR + 7.50%, 1.25% Floor, 1.13% PIK)		2.9	%		29,902,485		09/28/23		29,746,161		29,902,485
	Winsight, LLC	11/15/18	Revolver - 12.00% inc PIK (LIBOR + 11.00%, 1.00% Floor, 4.00% PIK)		0.1	%		1,550,908		03/31/24		1,550,908		1,450,099
	Winsight, LLC	11/15/18	Term Loan - 12.00% inc PIK (LIBOR + 11.00%, 1.00% Floor, 4.00% PIK)		2.2	%		23,451,690		03/31/24		23,175,099		21,927,330

					5.2	%						54,977,679		53,785,425


Packaging
	Hoover Group, Inc.	10/01/20	Term Loan - 9.75% (LIBOR + 8.50%, 1.25% Floor)		2.8	%		30,276,806		10/01/24		29,822,550		28,672,135

					2.8	%						29,822,550		28,672,135


Personal Products
	Voyant Beauty Holdings, Inc.	08/20/20	Term Loan - 10.00% (LIBOR + 8.50%, 1.50% Floor)		5.7	%		57,963,496		08/20/25		56,823,144		58,311,278

					5.7	%						56,823,144		58,311,278


Publishing
	Bendon Inc.	12/11/20	Term Loan - 7.50% (LIBOR + 6.50%, 1.00% Floor)		5.0	%		52,264,546		12/11/25		51,268,169		50,435,288

					5.0	%						51,268,169		50,435,288

TCW Direct Lending VII LLC

Consolidated Schedule of Investments (Unaudited) (Continued)

As of September 30, 2021


Industry	Issuer	Acquisition Date	Investment	% of Net Assets			Par Amount		Maturity Date		Amortized Cost		Fair Value
	Debt (continued)

Software
	Mondee Holdings LLC	12/20/19	Term Loan - 11.25% inc PIK (LIBOR + 9.50%, 1.75% Floor, 4.00% PIK)		7.7	%	$	89,035,704		12/23/24	$	87,205,518	$	77,639,134
	Quicken Parent Corp.	12/21/20	Term Loan - 9.25% (LIBOR + 8.25%, 1.00% Floor)		1.4	%		14,199,138		04/01/23		14,076,794		14,199,138

					9.1	%						101,282,312		91,838,272


Textiles, Apparel & Luxury Goods
	Centric Brands Inc. ⁽³⁾	10/09/20	Revolver - 6.50% (LIBOR + 5.50%, 1.00% Floor)		0.3	%		3,346,901		10/09/24		3,346,901		3,346,901
	Centric Brands Inc. ⁽³⁾	10/09/20	Term Loan - 10.00% inc PIK (LIBOR + 9.00%, 1.00% Floor, all PIK)		3.5	%		37,860,725		10/09/25		34,726,318		35,589,082
	Keeco Holdings, LLC	09/19/18	Term Loan - 10.25% inc PIK (LIBOR + 8.50%, 1.75% Floor, 0.75% PIK)		5.4	%		56,327,540		03/15/24		55,802,307		54,581,386
					9.2	%						93,875,526		93,517,369

	Total Debt Investments				139.5	%						1,413,706,708		1,417,477,157


	EQUITY							Shares				Amortized Cost		Fair Value

Chemicals
	AGY Equity LLC ^{(2) (5) (6)}		Class A Preferred Units		0.0	%		7,752,414			$	-	$	-
	AGY Equity LLC ^{(2) (5) (6)}		Class B Preferred Units		0.0	%		10,078,138				-		-
	AGY Equity LLC ^{(2) (5) (6)}		Class C Common Units		0.0	%		11,241,000				-		-

					0.0	%						-		-


Construction Materials
	United Poly Systems Holding, Inc. ^{(5) (6)}		Common Stock		0.0	%		7,550				755,000		-

					0.0	%						755,000		-


Household Durables
	Shelterlogic Group Holdings, Inc ^{(4) (5) (6)}		Common Stock		2.5	%		1,254,034				-		24,955,277

					2.5	%						-		24,955,277


Household Products
	Greenfield World Trade, Inc. ^{(5) (6)}		Warrant, expires 03/25/27		0.7	%		6,036				3,059,379		7,168,679

					0.7	%						3,059,379		7,168,679


Software
	Mondee Holdings LLC ^{(5) (6)}		Class G Preferred Stock		0.1	%		1,226,708				1,226,708		907,764

					0.1	%						1,226,708		907,764


Textiles, Apparel & Luxury Goods
	Centric Brands GP LLC ^{(3) (5) (6)}		Membership Interests		0.0	%		159,658				-		-
	Centric Brands L.P. ^{(3) (5) (6)}		Class A LP Interests		0.0	%		159,658				-		73,443

					0.0	%						-		73,443


	Total Equity Investments				3.3	%						5,041,087		33,105,163

	Total Debt & Equity Investments ⁽⁷⁾				142.8	%						1,418,747,795		1,450,582,320

	Cash Equivalents
	Fixed Income Clearing Corporation Repo, Yield 0.00%				0.0	%						-		-

	Total Cash Equivalents				0.0	%						-		-

	Total Investments (143.0%)										$	1,418,747,795	$	1,450,582,320

	Net unrealized depreciation on unfunded commitments (-0.1%)													(999,415	)

	Liabilities in Excess of Other Assets (-42.9%)													(435,072,430	)

	Net Assets (100.0%)												$	1,014,510,475

TCW Direct Lending VII LLC

Consolidated Schedule of Investments (Unaudited) (Continued)

As of September 30, 2021

⁽¹⁾	Certain debt investments are subject to contractual restrictions on resale, such as approval of the agent or borrower.

⁽²⁾

As defined in the Investment Company Act of 1940, the investment is deemed to be a “controlled affiliated person” of the Company because the Company owns, either directly or indirectly, 25% or more of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2020 and September 30, 2021 along with transactions during the period ended September 30, 2021 in these controlled investments are as follows:


Name of Investment	Fair Value at December 31, 2020		Gross Addition ^(a)		Gross Reduction ^(b)		Realized Gains (Losses)		Net Change in Unrealized Appreciation/ Depreciation		Fair Value at September 30, 2021		Interest/Dividend/ Other income
AGY Holdings Corp. Opco Term Loan - 11.50% inc. PIK	$	3,391,067	$	11,610,514	$	-	$	-	$	-	$	15,001,581	$	2,050,379
AGY Holdings Corp. PIK Holdco Term Loan - 11.50% inc. PIK		23,651,102		1,098,135		-		-		-		24,749,237		2,215,299
AGY Holdings Corp. Class A Preferred units		-		-		-		-		-		-		-
AGY Holdings Corp. Class B Preferred units		-		-		-		-		-		-		-
AGY Holdings Corp. Class C Common units		-		-		-		-		-		-		-

Total Controlled Affiliated investments	$	27,042,169	$	12,708,649	$	-	$	-	$	-	$	39,750,818	$	4,265,678

^(a)

Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

^(b)

Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

⁽³⁾

The investment is not a qualifying asset as defined in Section 55(a) under the Investment Company Act of 1940, as amended. A business development company may not acquire an asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. As of September 30, 2021, $89,193,232 or 5.7% of the Company’s total assets were represented by “non-qualifying assets.”

⁽⁴⁾

As defined in the Investment Company Act of 1940, the investment is deemed to be an “affiliated person” of the Company because the Company owns, either directly or indirectly, between 5% and 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2020 and September 30, 2021 along with transactions during the period ended September 30, 2021 in these affiliated investments are as follows:


Name of Investment	Fair Value at December 31, 2020		Gross Addition ^(a)		Gross Reduction ^(b)			Realized Gains (Losses)		Net Change in Unrealized Appreciation/ Depreciation		Fair Value at September 30, 2021		Interest/Dividend/ Other income
Shelterlogic Group Holdings, Inc. Common Stock	$	9,578,443	$	-	$	-		$	-	$	15,376,834	$	24,955,277	$	-
Slogic Holding Corp. Last Out Term Loan - 6.87%		27,252,661		42,356		(428,052	)		-		(42,356)		26,824,609		1,530,901

Total Non-Controlled Affiliated Investments	$	36,831,104	$	42,356	$	(428,052	)	$	-	$	15,334,478	$	51,779,886	$	1,530,901

^(a)

Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

^(b)

Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

⁽⁵⁾	Non-income producing.

⁽⁶⁾

All or a portion of such security was acquired in a transaction exempt from registration under the Securities Act of 1933, and may be deemed “restricted securities” under the Securities Act. As of September 30, 2021, the aggregate fair value of these securities was $33,105,163, or 2.1% of the Company’s total assets.

⁽⁷⁾	The fair value of each debt and equity was determined using significant unobservable inputs and such investments are considered to be Level 3 within the Fair Value Hierarchy. See Note 3 “Investment Valuations and Fair Value Measurements.”

LIBOR - London Interbank Offered Rate, generally 1-Month or 3-Month

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $559,721,594 and $552,154,698, respectively, for the period ended September 30, 2021. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments.


Country Breakdown Portfolio
United States	100.0	%

See Notes to Consolidated Financial Statements

TCW DIRECT LENDING VII LLC

Consolidated Schedule of Investments

As of December 31, 2020


Industry	Issuer	Acquisition Date	Investment	% of Net Assets			Par Amount		Maturity Date	Amortized Cost		Fair Value
	Debt(1)
Aerospace & Defense
	Cassavant Holdings, LLC	01/02/20	Revolver - 9.50% (LIBOR + 8.00%, 1.50% Floor)		0.2	%	$	1,567,896	01/02/25	$	1,567,896	$	1,484,797
	Cassavant Holdings, LLC	01/02/20	Term Loan - 9.50% (LIBOR + 8.00%, 1.50% Floor)		1.6	%		14,150,260	01/02/25		13,959,277		13,400,297

					1.8	%		15,718,156			15,527,173		14,885,094

	Columbia Helicopters, Inc.	08/20/19	Term Loan - 9.00% (LIBOR + 7.50%, 1.50% Floor)		4.2	%		34,711,398	08/20/24		34,197,313		35,058,512
	Heligear Acquisition Co.	07/30/19	Term Loan - 8.50% (LIBOR + 7.00%, 1.50% Floor)		7.0	%		57,878,827	07/30/24		57,033,777		58,168,221
	Navistar Defense, LLC	12/31/18	Term Loan B - 7.75% (LIBOR + 6.25%, 1.50% Floor)		2.1	%		17,152,164	12/31/23		16,860,065		17,152,164
	Spaceco Holdings LLC	12/21/20	Revolver - 7.50% (LIBOR + 6.50%, 1.00% Floor)		0.4	%		3,121,364	12/21/25		3,121,364		3,080,786
	Spaceco Holdings LLC	12/21/20	Term Loan - 7.50% (LIBOR + 6.50%, 1.00% Floor)		14.8	%		124,854,545	12/21/25		122,107,745		123,231,436

					15.2	%		127,975,909			125,229,109		126,312,222

	Sparton Corporation	03/04/19	First Lien Term Loan - 8.75% (LIBOR + 7.25%, 1.50% Floor)		1.6	%		13,227,692	03/04/24		13,027,145		13,439,335

					31.9	%		266,664,146			261,874,582		265,015,548

Air Freight & Logistics

	Need It Now Delivers, LLC	12/23/19	Delayed Draw Term Loan - 10.25% (LIBOR + 8.50%, 1.75% Floor)		0.2	%		1,479,333	12/23/24		1,479,332		1,429,036
	Need It Now Delivers, LLC	12/23/19	Last Out Term Loan - 10.25% (LIBOR + 8.50% , 1.75% Floor)		1.6	%		14,063,389	12/23/24		13,788,631		13,585,234

					1.8	%		15,542,722			15,267,963		15,014,270

Auto Components

	Shipston Group U.S. Inc.	05/18/20	Term Loan C - 9.00% inc. PIK (LIBOR + 7.75%, 1.25% Floor, 2.00% PIK)		0.2	%		1,746,375	09/28/23		1,746,375		1,706,208
	Shipston Group U.S. Inc.	09/28/18	Term Loan - 9.00% inc. PIK (LIBOR + 7.75%, 1.25% Floor, 2.00% PIK)		3.1	%		26,302,661	09/28/23		26,073,224		25,697,700

					3.3	%		28,049,036			27,819,599		27,403,908

Beverages

	Caiman Merger Sub LLC	11/01/19	Term Loan - 6.75% (LIBOR + 5.75%, 1.00% Floor)		1.7	%		14,037,026	11/01/25		13,914,606		14,177,396
	Westrock Coffee Company, LLC	02/28/20	Term Loan - 8.75% inc. PIK (LIBOR + 7.25%, 1.50% Floor, 1.00% PIK)		7.9	%		65,531,880	02/28/25		64,581,557		65,204,221

					9.6	%		79,568,906			78,496,163		79,381,617

Chemicals

	AGY Holdings Corp.(2)	09/21/20	Opco Term Loan - 11.50% inc. PIK (LIBOR + 10.00%, 1.50% Floor, 6.00% PIK)		0.4	%		3,391,067	09/21/25		3,391,067		3,391,067
	AGY Holdings Corp.(2)	09/21/20	PIK Holdco Term Loan - 11.50% inc. PIK (LIBOR + 10.00%, 1.50% Floor, 6.00% PIK)		2.8	%		23,651,102	09/21/25		23,651,102		23,651,102

					3.2	%		27,042,169			27,042,169		27,042,169


	GEON Performance Solutions, LLC	10/25/19	Term Loan - 7.88% (LIBOR + 6.25%, 1.63% Floor)		2.5	%		20,163,740	10/25/24		20,097,289		20,365,377
	Verdesian Life Sciences, LLC	07/22/19	2019 Term Loan - 9.50% (LIBOR + 7.75%, 1.75% Floor)		6.2	%		50,708,730	06/27/24		49,985,774		51,672,196

					11.9	%		97,914,639			97,125,232		99,079,742

TCW DIRECT LENDING VII LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020


Industry	Issuer	Acquisition Date	Investment	% of Net Assets		Par Amount		Maturity Date		Amortized Cost		Fair Value
Commercial Services & Supplies
	Clover Imaging Group, LLC	12/16/19	Term Loan - 9.00% (LIBOR + 7.50%, 1.50% Floor)		1.3%	$	10,774,250		12/16/24	$	10,603,070	$	10,688,056
	Production Resource Group, LLC	08/21/18	2020 Last Out Term Loan A - 9.75% inc. PIK (LIBOR + 9.50%, 0.25% Floor, 9.75% PIK)		1.1%		9,394,554		08/21/24		9,394,554		9,394,554
	Production Resource Group, LLC	08/01/20	Bridge Delayed Draw Term Loan - 8.50% inc. PIK (LIBOR + 7.50%, 1.00% Floor, 2.50% PIK)		0.3%		2,305,426		08/21/24		2,305,426		2,305,426

					1.4%		11,699,980				11,699,980		11,699,980

					2.7%		22,474,230				22,303,050		22,388,036

Construction & Engineering
	UniTek Acquisition, Inc.	09/16/20	Delayed Draw Term Loan - 7.50% (LIBOR + 6.50%, 1.00% Floor, 2.00% PIK)		0.2%		1,564,318		08/20/23		940,645		1,321,849
	UniTek Acquisition, Inc.	09/16/20	Term Loan A - 7.50% (LIBOR + 6.50%, 1.00% Floor, 2.00% PIK)		0.8%		7,821,592		08/20/23		4,697,446		6,609,245

					1.0%		9,385,910				5,638,091		7,931,094

	UniTek Acquisition, Inc.	11/10/20	Revolver - 6.50% (LIBOR + 5.50%, 1.00% Floor)		0.0%		16,070		08/20/23		16,070		13,579
	UniTek Acquisition, Inc.	08/20/18	Delayed Draw Term Loan B - 8.50% inc. PIK (LIBOR + 7.50%, 1.00% Floor, 2.00% PIK)		0.3%		3,369,896		08/20/24		3,369,896		2,719,506
	UniTek Acquisition, Inc.	08/20/18	Term Loan B - 8.50% inc. PIK (LIBOR + 7.50%, 1.00% Floor, 2.00% PIK)		1.6%		16,850,431		08/20/24		16,603,547		13,598,298

					1.9%		20,220,327				19,973,443		16,317,804

					2.9%		29,622,307				25,627,604		24,262,477

Construction Materials
	United Poly Systems Holding, Inc.	12/28/20	Mezzanine Loan - 13.00% inc. PIK (13.00%, 13.00% PIK)		0.8%		7,296,000		12/31/25		7,296,000		6,661,248

					0.8%		7,296,000				7,296,000		6,661,248

Electronic Equipment, Instruments & Components
	SMTC Corporation(4)	11/08/18	Term Loan A - 10.50% (LIBOR + 8.75%, 1.75% Floor)		2.7%		22,524,256		11/08/23		21,861,279		22,749,499

					2.7%		22,524,256				21,861,279		22,749,499

Energy Equipment & Services
	Profrac Services, LLC	09/07/18	Term Loan B - 8.75% (LIBOR + 7.50%, 1.25% Floor)		4.4%		39,213,639		09/07/23		37,592,108		36,821,607
	PSS Industrial Group Corp.	04/12/19	Term Loan - 9.50% (LIBOR + 8.00%, 1.50% Floor)		1.7%		17,608,820		04/10/25		17,295,238		13,910,968
	WDE TorcSill Holdings LLC	10/22/19	Revolver - 9.00% inc. PIK (LIBOR + 7.50%, 1.50% Floor, 0.75% PIK)		0.4%		3,048,419		10/22/24		3,048,419		2,953,918
	WDE TorcSill Holdings LLC	10/22/19	Term Loan - 9.00% inc. PIK (LIBOR + 7.50%, 1.50% Floor, 0.75% PIK)		3.3%		28,160,536		10/22/24		27,611,823		27,287,559

					3.7%		31,208,955				30,660,242		30,241,477

					9.8%		88,031,414				85,547,588		80,974,052

TCW DIRECT LENDING VII LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020


Industry	Issuer	Acquisition Date	Investment	% of Net Assets		Par Amount		Maturity Date		Amortized Cost			Fair Value
Food Products
	Hometown Food Company	08/31/18	Revolver - 6.25% (LIBOR + 5.00%, 1.25% Floor)		0.1%	$	784,157		08/31/23	$	784,157		$	784,157
	Hometown Food Company	08/31/18	Term Loan - 6.25% (LIBOR + 5.00%, 1.25% Floor)		3.6%		29,699,654		08/31/23		29,340,758			29,699,654

					3.7%		30,483,811				30,124,915			30,483,811

Health Care Technology
	American Academy Holdings, LLC	08/14/19	Term Loan - 10.00% inc. PIK (LIBOR + 9.00%, 1.00% Floor, 3.75% PIK)		3.8%		31,171,832		06/15/23		30,700,084			31,327,691

					3.8%		31,171,832				30,700,084			31,327,691

Hotels, Restaurants & Leisure
	FM Restaurants Holdco, LLC	11/25/19	Revolver - 9.75% (LIBOR + 8.00%, 1.75% Floor)		0.3%		2,413,636		11/22/24		2,413,636			2,343,641
	FM Restaurants Holdco, LLC	11/25/19	Term Loan - 9.75% (LIBOR + 8.00%, 1.75% Floor)		2.5%		21,505,500		11/22/24		21,089,573			20,881,840
	KBP Investments, LLC(5)		Delayed Draw Term Loan		0.0%		—		05/14/23		(176,718	)		(176,718	)

					2.8%		23,919,136				23,326,491			23,048,763

Household Durables
	Hunter Fan Company	11/05/19	Additional Term Loan - 7.63% (LIBOR + 6.63%, 1.00% Floor)		4.1%		34,346,515		12/20/23		34,151,512			34,346,515
	SLogic Holding Corp.(6)	06/29/18	2018 Term Loan B - 6.87% (LIBOR + 5.87%, 1.00% Floor)		3.3%		27,252,661		06/22/23		27,117,606			27,252,661

					7.4%		61,599,176				61,269,118			61,599,176

Household Products
	Greenfield World Trade, Inc.	03/04/19	Last Out Term Loan - 14.83% inc. PIK (LIBOR + 13.33%, 1.50% Floor, 6.00% PIK)		4.9%		44,286,796		03/04/24		42,854,852			41,053,860

					4.9%		44,286,796				42,854,852			41,053,860

Information Technology Services
	Corcentric, Inc.	11/15/18	Delayed Draw Term Loan - 9.00% (LIBOR + 7.50%, 1.50% Floor)		1.5%		12,664,320		11/15/23		12,664,320			12,638,992
	Corcentric, Inc.	11/15/18	Term Loan - 9.00% (LIBOR + 7.50%, 1.50% Floor)		3.9%		32,188,480		11/15/23		31,719,873			32,124,103

					5.4%		44,852,800				44,384,193			44,763,095

	Global Holdings, LLC	09/17/19	Term Loan - 7.00% (LIBOR + 6.00%, 1.00% Floor)		3.4%		28,159,064		09/17/23		27,873,511			28,299,859

					8.8%		73,011,864				72,257,704			73,062,954

Internet & Direct Marketing Retail
	Altern Marketing LLC	09/30/20	Revolver - 8.25% (PRIME + 5.00%, 3.25% Floor)		0.4%		2,744,187		10/07/24		2,744,187			2,744,187
	Altern Marketing LLC	09/30/20	Term Loan A - 8.00% (LIBOR + 6.00%, 2.00% Floor)		1.9%		15,893,813		10/07/24		15,593,510			15,957,388

					2.3%		18,638,000				18,337,697			18,701,575

TCW DIRECT LENDING VII LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020


Industry	Issuer	Acquisition Date	Investment	% of Net Assets			Par Amount		Maturity Date		Amortized Cost		Fair Value

Media
	Encompass Digital Media, Inc.	10/01/18	First Lien Term Loan - 8.75% inc. PIK (LIBOR + 7.50%, 1.25% Floor, 1.13% PIK)		3.5	%	$	29,917,841		09/28/23	$	29,700,804	$	29,409,237
	Encompass Digital Media, Inc.	10/01/18	Revolver - 8.75% (LIBOR + 7.50%, 1.25% Floor)		0.1	%		866,591		09/28/23		866,591		851,859

					3.6	%		30,784,432				30,567,395		30,261,096

	Winsight, LLC	11/15/18	Revolver - 8.00% (LIBOR + 7.00%, 1.00% Floor)		0.2	%		1,529,553		11/15/23		1,529,553		1,341,419
	Winsight, LLC	11/15/18	Term Loan - 8.00% (LIBOR + 7.00%, 1.00% Floor)		2.8	%		26,330,387		11/15/23		25,932,621		23,091,749

					3.0	%		27,859,940				27,462,174		24,433,168

					6.6	%		58,644,372				58,029,569		54,694,264

Metals & Mining

	DBM Global, Inc.	11/30/18	Term Loan - 7.60% (LIBOR + 5.85%, 1.75% Floor)		5.4	%		45,392,958		11/30/23		44,864,750		44,802,850

					5.4	%		45,392,958				44,864,750		44,802,850

Multiline Retail

	Torrid LLC	06/14/19	Term Loan - 7.75% (LIBOR + 6.75%, 1.00% Floor)		3.6	%		29,261,777		12/16/24		28,788,928		29,554,395

					3.6	%		29,261,777				28,788,928		29,554,395

Packaging

	Hoover Group, Inc.	10/01/20	Term Loan - 9.75% (LIBOR + 8.50%, 1.25% Floor)		4.0	%		33,153,118		10/01/24		32,531,809		33,517,802

					4.0	%		33,153,118				32,531,809		33,517,802

Personal Products

	Voyant Beauty Holdings, Inc.	08/20/20	Term Loan - 9.50% (LIBOR + 8.00%, 1.50% Floor)		7.2	%		58,403,726		08/03/25		57,044,994		59,630,204

					7.2	%		58,403,726				57,044,994		59,630,204

Publishing

	Bendon Inc.	12/11/20	Term Loan - 7.50% (LIBOR + 6.50%, 1.00% Floor)		7.2	%		60,526,400		12/11/25		59,166,965		59,557,977

					7.2	%		60,526,400				59,166,965		59,557,977

Software

	Mondee Holdings LLC	12/20/19	Term Loan - 12.25% inc. PIK (LIBOR + 10.50%, 1.75% Floor, 12.25% PIK)		8.5	%		83,619,514		12/23/24		81,365,545		71,160,207
	Quicken Parent Corp.	12/21/20	First Lien Term Loan - 9.25% (LIBOR + 8.25%, 1.00% Floor)		2.4	%		19,854,972		04/01/23		19,598,514		19,715,987

					10.9	%		103,474,486				100,964,059		90,876,194

Textiles, Apparel & Luxury Goods

	Centric Brands Inc.(4)	10/09/20	Exit Term Loan - 10.00% (LIBOR + 9.00%, 1.00% Floor)		3.9	%		35,100,350		10/09/25		31,383,442		32,678,426
	Centric Brands Inc.(4)	10/09/20	Exit First Out Revolver - 6.50% (LIBOR + 5.50%, 1.00% Floor)		0.2	%		1,775,345		10/09/24		1,775,345		1,775,345
	Keeco Holdings, LLC	09/19/18	Term Loan - 10.00% inc. PIK (LIBOR + 8.25%, 1.75% Floor, 0.50% PIK)		6.8	%		58,243,075		03/15/24		57,531,083		56,379,296

					10.9	%		95,118,770				90,689,870		90,833,067

	Total Debt Investments				166.9	%						1,394,170,865		1,385,674,980

TCW DIRECT LENDING VII LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020


Industry	Issuer	Investment	% of Net Assets			Shares		Amortized Cost		Fair Value

	Equity
Commercial Services & Supplies
	Production Resource Group, LLC(3),(7)	Class A units		0.2	%		33,738	$	—	$	1,831,299

				0.2	%		33,738		—		1,831,299

Chemicals
	AGY Equity LLC(2),(3),(7)	Class A Preferred units		0.0	%		7,752,414		—		—
	AGY Equity LLC(2),(3),(7)	Class B Preferred units		0.0	%		10,078,138		—		—
	AGY Equity LLC(2),(3),(7)	Class C Common units		0.0	%		11,241,000		—		—

				0.0	%		29,071,552		—		—

Construction Materials
	United Poly System Holding, Inc.(3),(7)	Common Stock		0.0	%		7,550		755,000		—

				0.0	%		7,550		755,000		—

Electronic Equipment, Instruments & Components
	SMTC Corporation(3),(4)	Common Stock		0.0	%		48,036		150,833		238,258
	SMTC Corporation(3),(4)	Warrant, expires 11/08/25		0.3	%		484,326		1,938,457		2,402,257

				0.3	%		532,362		2,089,290		2,640,515

Household Durables
	Shelterlogic Group Holdings, Inc(3),(6),(7)	Common Stock		1.2	%		1,240,731		—		9,578,443

				1.2	%		1,240,731		—		9,578,443

Household Products
	Greenfield World Trade, Inc.(3),(7)	Warrant, expires 03/25/27		0.4	%		7,403		1,463,118		3,306,924

				0.4	%		7,403		1,463,118		3,306,924

Textiles, Apparel & Luxury Goods
	Centric Brands Inc.(3),(4),(7)	Membership Interests		0.0	%		159,658		—		—

				0.0	%		159,658		—		—

Software
	Mondee Holdings LLC(3),(7)	Preferred Stock		0.1	%		1,226,708		1,226,708		1,165,373

				0.1	%		1,226,708		1,226,708		1,165,373

	Total Equity Investments			2.2	%				5,534,116		18,522,554

	Total Debt and Equity Investments(8)			169.1	%			$	1,399,704,981	$	1,404,197,534

TCW DIRECT LENDING VII LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020


Industry	Issuer	Investment	% of Net Assets			Shares		Amortized Cost		Fair Value

	Cash Equivalents
	Blackrock Liquidity Funds, Yield 0.01%			14.9	%		123,627,374	$	123,627,374	$	123,627,374

	Total Investments 184.0%							$	1,523,332,355	$	1,527,824,908

	Net unrealized depreciation on unfunded commitments (0.1%)									$	(944,826	)

	Liabilities in Excess of Other Assets (83.9%)									$	(696,483,208	)

	Net Assets 100.0%									$	830,396,874

(1)

Certain debt investments are subject to contractual restrictions on resale, such as approval of the agent or borrower.

(2)

As defined in the Investment Company Act of 1940, the investment is deemed to be a “controlled affiliated person” of the Company because the Company owns, either directly or indirectly, 25% or more of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2019 and December 31, 2020 along with transactions during the year ended December 31, 2020 in these controlled investments are as follows:


Name of Investment	Fair Value at December 31, 2019		Gross Additions^(a)		Gross Reductions^(b)		Realized Gains (Losses)		Net Change in Unrealized Appreciation/ Depreciation		Fair Value at December 31, 2020		Interest/ Dividend/ Other Income

AGY Holdings Corp. Opco Term Loan - 11.50% inc. PIK	$	—	$	3,391,067	$	—	$	—	$	—	$	3,391,067	$	116,419
AGY Holdings Corp. PIK Holdco Term Loan - 11.50% inc. PIK		—		23,651,102		—		—		—		23,651,102		1,156,314
AGY Equity LLC Class A Preferred units		—		—		—		—		—		—		—
AGY Equity LLC Class B Preferred units		—		—		—		—		—		—		—
AGY Equity LLC Class C Common units		—		—		—		—		—		—		—

Total Controlled Affiliated Investments	$	—	$	14,121,479	$	12,920,690	$	—	$	—	$	27,042,169	$	1,272,733

(a)

Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

(b)

Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

(3)

Non-income producing.

(4)

The investment is not a qualifying asset as defined in Section 55(a) under the Investment Company Act of 1940, as amended. A business development company may not acquire an asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. As of December 31, 2020, $59,843,785 or 3.8% of the Company’s total assets were represented by “non—qualifying assets.”

(5)

Negative balance relates to an unfunded commitment that was acquired at a discount.

TCW DIRECT LENDING VII LLC

Consolidated Schedule of Investments (Continued)

As of December 31, 2020

(6)

As defined in the Investment Company Act of 1940, the investment is deemed to be an “affiliated person” of the Company because the Company owns, either directly or indirectly, between 5% and 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company. Fair value as of December 31, 2019 and December 31, 2020 along with transactions during the year ended December 31, 2020 in these affiliated investments are as follows:


Name of Investment	Fair Value at December 31, 2019		Gross Additions^(a)		Gross Reductions^(b)			Realized Gains (Losses)		Net Change in Unrealized Appreciation/ Depreciation		Fair Value at December 31, 2020		Interest/ Dividend/ Other Income
Shelterlogic Group Holdings, Inc Common Stock	$	—	$	—	$	—		$	—	$	9,578,443	$	9,578,443	$	—
SLogic Holding Corp. 2018 Term Loan B - 7.50%		25,931,407		58,776		(570,736	)		—		1,833,214		27,252,661		2,603,353

Total Non-Controlled Affiliated Investments	$	25,931,407	$	58,776	$	(570,736	)	$	—	$	11,411,657	$	36,831,104	$	2,603,353

(a)

Gross additions include new purchases, PIK income and amortization of original issue and market discounts.

(b)

Gross reductions include decreases in the cost basis from sales, paydown and the amortization of premium.

(7)

All or a portion of such security was acquired in a transaction exempt from registration under the Securities Act of 1933 and may be deemed “restricted securities” under the Securities Act. As of December 31, 2020, the aggregate fair value of these securities was $15,882,039, or 1.0% of the Company’s total assets.

(8)

The fair value of the SMTC Corporation common stock is based on the quoted market price of the issuer’s common stock as of December 31, 2020. Such common stock is considered to be a Level 1 security within the Fair Value Hierarchy. The fair value of the SMTC Corporation warrant is based on the quoted market price of the issuer’s stock as of December 31, 2020. Such warrants are considered to be Level 2 securities within the Fair Value Hierarchy. Otherwise, the fair value of each debt and equity investment was determined using significant unobservable inputs and such investments are considered to be Level 3 within the Fair Value Hierarchy. See Note 3 “Investment Valuations and Fair Value Measurements.”


LIBOR - London Interbank Offered Rate, generally 1-Month or 3-Month
PRIME - Prime Rate

Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $691,614,825 and $639,529,403, respectively, for the year ended December 31, 2020. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments.


Country Breakdown Portfolio
United States	100.0	%

See Notes to Consolidated Financial Statements

TCW DIRECT LENDING VII LLC

Consolidated Statements of Assets and Liabilities

(Dollar amounts in thousands, except unit data)


	As of September 30, 2021		As of December 31, 2020
	(unaudited)
Assets
Investments, at fair value
Non-controlled/non-affiliated investments (amortized cost of $1,352,265 and $1,345,545, respectively)	$	1,359,051	$	1,340,325
Non-controlled affiliated investments (amortized cost of $26,732 and $27,118, respectively)		51,780		36,831
Controlled affiliated investments (amortized cost of $39,751 and $27,042, respectively)		39,751		27,042
Cash and cash equivalents		98,969		148,204
Receivable for investments sold		10,522		-
Interest receivable		7,062		5,292
Deferred financing costs		3,289		4,314
Due from Adviser		-		1,023
Prepaid and other assets		162		80

Total Assets	$	1,570,586	$	1,563,111

Liabilities
Term loan (net of $1,247 and $1,648 of deferred financing costs, respectively)	$	246,253	$	245,852
Revolving credit facilities payable		210,500		337,500
Payable for open trades		-		125,229
Incentive fee payable		50,878		15,278
Return of capital payable		38,974		-
Management fees payable		5,415		4,955
Interest and credit facilities expense payable		2,269		2,448
Unrealized depreciation on unfunded commitments		999		945
Directors’ fees payable		240		-
Other accrued expenses and other liabilities		548		507

Total Liabilities	$	556,076	$	732,714

Commitments and Contingencies (Note 5)
Members’ Capital
Common Unitholders’ commitment (13,734,010 units issued and outstanding)	$	1,373,401	$	1,373,401
Common Unitholders’ undrawn commitment (13,734,010 units issued and outstanding)		(165,401)		(458,401)
Common Unitholders’ return of capital		(153,683)		(53,683)
Common Unitholders’ offering costs		(633)		(633)
Accumulated Common Unitholders’ tax reclassification		(1,865)		(1,865)

Common Unitholders’ capital		1,051,819		858,819
Accumulated loss		(37,309)		(28,422)

Total Members’ Capital	$	1,014,510	$	830,397

Total Liabilities and Members’ Capital	$	1,570,586	$	1,563,111

Net Asset Value Per Unit (Note 10)	$	85.91	$	93.84

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING VII LLC

Consolidated Statements of Operations (Unaudited)

(Dollar amounts in thousands, except unit data)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

	2021		2020		2021		2020

Investment Income

Non-controlled/non-affiliated investments:

Interest income	$	32,419	$	29,145	$	98,409	$	89,258

Interest income paid-in-kind		4,414		5,669		15,785		15,206

Other fee income		231		-		373		231

Non-controlled affiliated investments:

Interest income		513		-		1,531		-

Controlled affiliated investments:

Interest income		1,055		-		2,411		-

Interest income paid-in-kind		834		-		1,855		-



Total investment income		39,466		34,814		120,364		104,695

Expenses

Incentive fees		7,085		-		35,600		(12,148)

Management fees		5,415		4,948		16,140		14,858

Interest and credit facilities expenses		3,793		4,886		12,742		18,095

Professional fees		264		225		1,023		1,014

Administrative fees		373		337		1,108		1,048

Directors’ fees		98		97		301		293

Other expenses		56		87		1,340		184



Total expenses		17,084		10,580		68,254		23,344



Net investment income	$	22,382	$	24,234	$	52,110	$	81,351



Net realized and unrealized gain (loss) on investments

Net realized gain (loss):

Non-controlled/non-affiliated investments	$	(210)	$	-	$	1,716	$	1,943

Net change in unrealized appreciation/depreciation:

Non-controlled/non-affiliated investments		(1,840)		21,505		11,953		(54,331)

Non-controlled affiliated investments		8,005		-		15,334		-



Net realized and unrealized gain (loss) on investments	$	5,955	$	21,505	$	29,003	$	(52,388)



Net increase in Members’ Capital from operations	$	28,337	$	45,739	$	81,113	$	28,963



Basic and diluted:

Income per unit	$	2.06	$	3.33	$	5.90	$	2.11

See Notes to Consolidated Financial Statements

TCW DIRECT LENDING VII LLC

Consolidated Statements of Changes in Members’ Capital (Unaudited)

(Dollar amounts in thousands, except unit data)


	Common Unitholders’ Capital		Accumulated Earnings (Loss)		Total

Members’ Capital at January 1, 2020	$	817,863	$	(1,633)	$	816,230

Net Increase (Decrease) in Members’ Capital Resulting from Operations:

Net investment income		-		35,292		35,292

Net realized gain on investments		-		1,943		1,943

Net change in unrealized appreciation/depreciation on investments		-		(66,230)		(66,230)


Total Decrease in Members’ Capital for the three months ended March 31, 2020		-		(28,995)		(28,995)



Members’ Capital at March 31, 2020	$	817,863	$	(30,628)	$	787,235



Net Increase (Decrease) in Members’ Capital Resulting from Operations:

Net investment income		-		21,825		21,825

Net change in unrealized appreciation/depreciation on investments		-		(9,606)		(9,606)

Distributions to Members from:

Distributable earnings		-		(38,635)		(38,635)

Total Decrease in Members’ Capital for the three months ended June 30, 2020		-		(26,416)		(26,416)



Members’ Capital at June 30, 2020	$	817,863	$	(57,044)	$	760,819



Net Increase (Decrease) in Members’ Capital Resulting from Operations:

Net investment income		-		24,234		24,234

Net change in unrealized appreciation/depreciation on investments		-		21,505		21,505

Distributions to Members from:

Return of capital		(47,000)		-		(47,000)


Total (Decrease) Increase in Members’ Capital for the three months ended September 30, 2020		(47,000)		45,739		(1,261)


Members’ Capital at September 30, 2020	$	770,863	$	(11,305)	$	759,558



Members’ Capital at January 1, 2021	$	858,819	$	(28,422)	$	830,397

Net Increase (Decrease) in Members’ Capital Resulting from Operations:

Net investment income		-		6,762		6,762

Net realized gain on investments		-		1,221		1,221

Net change in unrealized appreciation/depreciation on investments		-		15,123		15,123

Distributions to Members from:

Distributable earnings		-		(24,000)		(24,000)

Increase in Members’ Capital Resulting from Capital Activity:

Contributions		127,000		-		127,000



Total Increase (Decrease) in Members’ Capital for the three months ended March 31, 2021		127,000		(894)		126,106


Members’ Capital at March 31, 2021	$	985,819	$	(29,316)	$	956,503



Net Increase (Decrease) in Members’ Capital Resulting from Operations:

Net investment income		-		22,966		22,966

Net realized gain on investments		-		705		705

Net change in unrealized appreciation/depreciation on investments		-		5,999		5,999

Distributions to Members from:

Distributable earnings		-		(36,000)		(36,000)

Increase in Members’ Capital Resulting from Capital Activity:

Contributions		166,000		-		166,000



Total Increase (Decrease) in Members’ Capital for the three months ended June 30, 2021		166,000		(6,330)		159,670



Members’ Capital at June 30, 2021	$	1,151,819	$	(35,646)	$	1,116,173



Net Increase (Decrease) in Members’ Capital Resulting from Operations:

Net investment income		-		22,382		22,382

Net realized loss on investments		-		(210)		(210)

Net change in unrealized appreciation/depreciation on investments		-		6,165		6,165

Distributions to Members from:

Distributable earnings		-		(30,000)		(30,000)

Return of capital		(100,000)		-		(100,000)


Total Decrease in Members’ Capital for the three months ended September 30, 2021		(100,000)		(1,663)		(101,663)



Members’ Capital at September 30, 2021	$	1,051,819	$	(37,309)	$	1,014,510

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING VII LLC

Consolidated Statements of Cash Flows (Unaudited)

(Dollar amounts in thousands, except unit data)


	For the Nine Months Ended September 30,
	2021		2020

Cash Flows from Operating Activities

Net increase in net assets resulting from operations	$	81,113	$	28,963

Adjustments to reconcile the net increase in net assets resulting from operations to net cash (used in) provided by operating activities:

Purchases of investments		(542,082)		(363,389)

Interest income paid-in-kind		(17,640)		(15,206)

Proceeds from sales and paydowns of investments		552,155		395,865

Net realized gain on investments		(1,716)		(1,943)

Net change in unrealized appreciation/depreciation on investments		(27,287)		54,331

Amortization of premium and accretion of discount, net		(9,760)		(8,096)

Amortization of deferred financing costs		2,084		2,327

Increase (decrease) in operating assets and liabilities:

(Increase) decrease in receivable for investments sold		(10,522)		-

(Increase) decrease in interest receivable		(1,770)		1,147

(Increase) decrease in due from Adviser		1,023		-

(Increase) decrease in prepaid and other assets		(82)		(61)

Increase (decrease) in payable for open trades		(125,229)		-

Increase (decrease) in incentive fees payable		35,600		(12,148)

Increase (decrease) in management fees payable		460		(3,741)

Increase (decrease) in interest and credit facilities expense payable		(179)		(1,037)

Increase (decrease) in directors’ fees payable		240		241

Increase (decrease) in other accrued expenses and liabilities		41		104


Net cash (used in) provided by operating activities	$	(63,551)	$	77,357



Cash Flows from Financing Activities

Contributions	$	293,000	$	-

Distributions		(90,000)		(38,635)

Return of capital		(61,026)		(47,000)

Deferred financing costs paid		(658)		(1,888)

Proceeds from credit facilities		173,000		48,000

Repayments of credit facilities		(300,000)		(220,000)

Proceeds from repurchase obligation		125,229		23,257

Repayments of repurchase obligation		(125,229)		-



Net cash provided by (used in) financing activities	$	14,316	$	(236,266)



Net decrease in cash and cash equivalents	$	(49,235)	$	(158,909)



Cash and cash equivalents, beginning of period	$	148,204	$	220,074



Cash and cash equivalents, end of period	$	98,969	$	61,165



Supplemental and non-cash financing activities

Interest expense paid	$	10,724	$	15,662

See Notes to Consolidated Financial Statements.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

1. Organization and Basis of Presentation

Organization: TCW Direct Lending VII LLC (the “Company”) was formed as a Delaware limited liability company on May 23, 2017. The Company engaged in a private offering of its common limited liability company units (the “Units”) to investors in reliance on exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”). In addition, the Company may issue preferred units (“Preferred Units”), though it currently has no intention to do so. On August 18, 2017, the Company sold and issued 10 Units at an aggregate purchase price of $1 to TCW Asset Management Company LLC (the “Adviser”), an affiliate of the TCW Group, Inc. The Company commenced operations during the second quarter of fiscal year 2018.

The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company has also elected to be treated for U.S. federal income tax purposes as a Regulated Investment Company (a “RIC”) under Subchapter M of the U.S Internal Revenue Code of 1986, as amended (the “Code”), beginning fiscal year 2018. The Company is required to meet the minimum distribution and other requirements for RIC qualification. As a BDC and a RIC, the Company is required to comply with certain regulatory requirements.

During 2018, the Company formed two Delaware limited liability companies which each have a single member interest owned by the Company. On February 12, 2020, the Company formed its third wholly-owned subsidiary, TCW DLG Funding VII 2020-1 LLC, a single member Delaware limited liability company.

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant

intercompany transactions and balances have been eliminated in consolidation.

Term: The term of the Company will continue until the sixth anniversary of the Initial Closing Date (as defined below), April 13, 2024, unless extended or sooner dissolved as provided in the Company’s amended and restated limited liability agreement (the “LLC Agreement”) or by operation of law. The Company may extend the term for two additional one-year periods upon written notice to the holders of the Units (the “Unitholders) and holders of preferred units, if any, (together with the Unitholders, the “Members”) at least 90 days prior to the expiration of the term or the end of the first one-year period. Thereafter, the term may be extended for successive one-year periods, with the vote or consent of a supermajority in interest of the holders of the Units.

Commitment Period: The Commitment Period commenced on April 13, 2018 (the “Initial Closing Date”), the day on which the Company completed the first closing of the sale of its Units to persons not affiliated with the Adviser and ended on May 16, 2021, which is the later of (a) April 13, 2021, three years from the Initial Closing Date and (b) May 16, 2021, three years from the date in which the Company first completed an investment. In accordance with the Company’s LLC Agreement, the Company may complete investment transactions that were significantly in process as of the end of the Commitment Period and which the Company reasonably expects to be consummated prior to 90 days subsequent to the expiration date of the Commitment Period. The Company may also effect follow-on investments in existing portfolio companies up to an aggregate maximum of 10% of Capital Commitments (as defined below).

Capital Commitments: On the Initial Closing Date, the Company began accepting subscription agreements from investors for the private sale of its Units. On January 14, 2019, the Company completed its fourth and final closing sale of Units. The Company sold 13,734,010 Units for an aggregate offering price of $1,373,401. Each Unitholder is obligated to contribute capital equal to its respective capital commitment to the Company (the “Commitment”) and each Unit’s Commitment obligation is $100.00 per unit. The sale of the Units was made pursuant to subscription agreements entered into by the Company and each investor. Under the terms of the subscription agreements, the Company may draw down all or any portion of the undrawn commitment with respect to each Unit generally upon at least ten business days’ prior written notice to the unitholders. The amount of capital that remains to be drawn down and contributed is referred to as an “Undrawn Commitment”.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

1. Organization and Basis of Presentation (Continued)

The commitment amount funded does not include amounts contributed in anticipation of a potential investment that the Company did not consummate and therefore returned to the Members as unused capital. As of September 30, 2021, aggregate Commitments, Undrawn Commitments, percentage of Commitments funded and the number of subscribed for Units of the Company were as follows:


	Commitments		Undrawn Commitments		% of Commitments Funded		Units

Unitholder	$	1,373,401	$	165,401		88.0%		13,734,010

Recallable Amount: A Unitholder may be required to re-contribute amounts distributed equal to (a) such Unitholder’s share of all portfolio investments that are repaid to the Company, or otherwise recouped by the Company, and distributed to the Unitholder, in whole or in part, during or after the Commitment period, reduced by (b) all re-contributions made by such Unitholder. This amount, (the “Recallable Amount”) is excluded from the calculation of the accrual based net asset value.

The Recallable Amount as of September 30, 2021 was $153,683.

2. Significant Accounting Policies

Basis of Presentation: The Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies, (“ASC 946”). The Company has also consolidated the results of its wholly-owned subsidiaries in its consolidated financial statements in accordance with ASC 946.

Use of Estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities at the date of the consolidated financial statements, (ii) the reported amounts of income and expenses during the years presented and (iii) disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates, and such differences could be material.

Investments: The Company measures the fair value of its investments in accordance with ASC Topic 820, Fair Value Measurements and Disclosure (“ASC 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 market participants at the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, the Company considers the principal market of its investments to be the market in which the investment trades with the greatest volume and level of activity.

Transactions: The Company records investment transactions on the trade date. The Company considers the trade date for investments not traded on a recognizable exchange, or traded in the over-the-counter markets, to be the date on which the Company receives legal or contractual title to the asset and bears the risk of loss.

Income Recognition: Interest income is recorded on an accrual basis unless doubtful of collection or the related investment is in default. Realized gains and losses on investments are recorded on a specific identification basis. The Company typically receives a fee in the form of a discount to the purchase price at the time it funds an investment in a loan. The discount is accreted to interest income over the life of the respective loan, using the effective-interest method assuming there are no questions as to collectability, and reflected in the amortized cost basis of the investment. Ongoing facility, commitment or other additional fees including prepayment fees, consent fees and forbearance fees are recognized immediately when earned as income.

The Company has entered into certain intercreditor agreements that entitle the Company to the “last out” tranche of first lien secured loans, whereby the “first out” tranche will receive priority as to the “last out” tranche with respect to payments of principal, interest, and any other amounts due thereunder. In certain cases, the Company may receive a higher interest rate than the contractual stated interest rate as disclosed on the Company’s Consolidated Schedule of Investments.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

2. Significant Accounting Policies (Continued)

Certain investments have an unfunded loan commitment for a delayed draw term loan or revolving credit. The Company earns an unused commitment fee on the unfunded commitment during the commitment period. The expiration date of the commitment period may be earlier than the maturity date of the investment stated above. See Note 5—Commitments and Contingencies.

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection.

Deferred Financing Costs: Deferred financing costs incurred by the Company in connection with the Credit Facilities (as defined in Note 7 to the Consolidated Financial Statements), including arrangement fees, upfront fees and legal fees, are amortized on a straight-line basis over the term of the respective credit facility.

Organization and Offering Costs: The Company expensed organization costs totaling $740 (net of $380 in Adviser reimbursement) since its inception through December 31, 2018. Offering costs totaling $633 (net of $324 in Adviser reimbursement) were charged directly to Members’ Capital on December 31, 2018. No additional organization and offering costs were incurred subsequent to December 31, 2018. The Company did not bear more than an amount equal to 10 basis points of the aggregate capital commitments for organization and offering expenses.

Cash and Cash Equivalents: The Company considers all investments with a maturity of three months or less at the time of acquisition to be cash equivalents. As of September 30, 2021, cash and cash equivalents are comprised of demand deposits and highly liquid investments with maturities of three months or less. Cash equivalents are carried at amortized costs which approximates fair value and are classified as Level 1 in the GAAP valuation hierarchy.

Income Taxes: The Company has elected to be regulated as a BDC under the 1940 Act. The Company also elected to be treated as a RIC under the Code beginning with the taxable year ending December 31, 2018. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its Unitholders as dividends. Rather, any tax liability related to income earned and distributed by the Company represents obligations of the Company’s investors and will not be reflected in the consolidated financial statements of the Company.

Recent Accounting Pronouncements: In March 2020, the FASB issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in the ASU provides optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this ASU to have a material impact on the consolidated financial statements.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

3. Investment Valuations and Fair Value Measurements

Investments at Fair Value: Investments held by the Company are valued at fair value. Fair value is generally determined on the basis of last reported sales prices or official closing prices on the primary exchange in which each security trades, or if no sales are reported, generally based on the midpoint of the valuation range obtained for debt investments from a quotation reporting system, established market makers or pricing service.

Investments for which market quotes are not readily available or are not considered reliable are valued at fair value and approved by the Board of Directors (the “Board”) based on similar instruments, internal assumptions and the weighting of the best available pricing inputs.

Fair Value Hierarchy: Assets and liabilities are classified by the Company into three levels based on valuation inputs used to determine fair value:

Level 1 values are based on unadjusted quoted market prices in active markets for identical assets.

Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs.

Level 3 values are based on significant unobservable inputs that reflect the Company’s determination of assumptions that market participants might reasonably use in valuing the assets.

Categorization within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation levels are not necessarily an indication of the risk associated with investing in those securities.

Level 1 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:

Equity, (Level 1), generally includes common stock valued at the closing price on the primary exchange in which the security trades.

Level 2 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:

Equity, (Level 2), generally includes warrants valued using quotes for comparable investments.

Level 3 Assets (Investments): The following valuation techniques and significant inputs are used to determine the fair value of investments in private debt and equity for which reliable market quotations are not available. Some of the inputs are independently observable however, a significant portion of the inputs and the internal assumptions applied are unobservable.

Debt, (Level 3), includes investments in privately originated senior secured debt. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. A discounted cash flow approach incorporating a weighted average cost of capital is generally used to determine fair value or, in some cases, an enterprise value waterfall method. Valuation may also include a shadow rating method. Standard pricing inputs include but are not limited to the financial health of the issuer, place in the capital structure, value of other issuer debt, credit, industry, and market risk and events.

Equity, (Level 3), includes common stock, preferred stock and warrants. Such securities are valued based on specific pricing models, internal assumptions and the weighting of the best available pricing inputs. A market approach is generally used to determine fair value. Pricing inputs include, but are not limited to, financial health and relevant business developments of the issuer; EBITDA; market multiples of comparable companies; comparable market transactions and recent trades or transactions; issuer, industry and market events; and contractual or legal restrictions on the sale of the security. When a Black-Scholes pricing model is used it follows the income approach. The pricing model takes into account the contract terms as well as multiple inputs, including: time value, implied volatility, equity prices and interest rates. A liquidity discount based on current market expectations, future events, minority ownership position and the period management reasonably expects to hold the investment may be applied.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

3. Investment Valuations and Fair Value Measurements (Continued)

Pricing inputs and weightings applied to determine value require subjective determination. Accordingly, valuations do not necessarily represent the amounts that may eventually be realized from sales or other dispositions of investments.

The following is a summary by major security type of the fair valuations according to inputs used in valuing investments listed in the Consolidated Schedule of Investments as of September 30, 2021:


Investments	Level 1		Level 2		Level 3		Total

Debt	$	—	$	—	$	1,417,477	$	1,417,477
Equity		—		—		33,105		33,105
Cash equivalents		—		—		—		—


Total	$	—	$	—	$	1,450,582	$	1,450,582


The following is a summary by major security type of the fair valuations according to inputs used in valuing investments listed in the Consolidated Schedule of Investments as of December 31, 2020:
Investments	Level 1		Level 2		Level 3		Total

Debt	$	—	$	—	$	1,385,675	$	1,385,675
Equity		238		2,402		15,883		18,523
Cash equivalents		123,627		—		—		123,627


Total	$	123,865	$	2,402	$	1,401,558	$	1,527,825

The following tables provide a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the three and nine months ended September 30, 2021:


	Debt			Equity		Total

Balance, July 1, 2021	$	1,458,634		$	24,959	$	1,483,593
Purchases, including payments received in-kind		29,753			—		29,753
Sales and paydowns of investments		(70,810	)		—		(70,810)
Amortization of premium and accretion of discount, net		2,378			—		2,378
Net realized gains (losses)		(210	)		—		(210)
Net change in unrealized appreciation/depreciation		(2,268	)		8,146		5,878


Balance, September 30, 2021	$	1,417,477		$	33,105	$	1,450,582

Net change in unrealized appreciation/depreciation in investments held as of September 30, 2021	$	(1,518	)	$	8,146	$	6,628

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

3. Investment Valuations and Fair Value Measurements (Continued)


	Debt		Equity		Total
Balance, January 1, 2021	$	1,385,675	$	15,883	$	1,401,558
Purchases, including payments received in-kind		557,620		2,101		559,721
Sales and paydowns of investments		(545,825)		(3,117)		(548,942)
Amortization of premium and accretion of discount, net		9,760		—		9,760
Net realized (losses) gains		(2,019)		2,612		593
Net change in unrealized appreciation/depreciation		12,266		15,626		27,892


Balance, September 30, 2021	$	1,417,477	$	33,105	$	1,450,582

Net change in unrealized appreciation/depreciation in investments held as September 30, 2021	$	13,083	$	17,458	$	30,541

The following tables provide a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the three and nine months ended September 30, 2020:


	Debt			Equity			Total
Balance, July 1, 2020	$	1,256,268		$	3,053		$	1,259,321
Purchases, including payments received in-kind		108,268			212			108,480
Sales and paydowns of investments		(90,192	)		—			(90,192	)
Amortization of premium and accretion of discount, net		3,508			—			3,508
Net change in unrealized appreciation/depreciation		20,156			(93	)		20,063


Balance, September 30, 2020	$	1,298,008		$	3,172		$	1,301,180

Net change in unrealized appreciation/depreciation in investments held as of September 30, 2020	$	20,643		$	514		$	21,157


	Debt			Equity			Total
Balance, January 1, 2020	$	1,360,505		$	608		$	1,361,113
Purchases, including payments received in-kind		375,906			2,689			378,595
Sales and paydowns of investments		(395,865	)		—			(395,865	)
Amortization of premium and accretion of discount, net		8,096			—			8,096
Net realized gains		1,943			—			1,943
Net change in unrealized appreciation/depreciation		(52,577	)		(125	)		(52,702	)


Balance, September 30, 2020	$	1,298,008		$	3,172		$	1,301,180

Net change in unrealized appreciation/depreciation in investments held as of September 30, 2020	$	(50,916	)	$	482		$	(50,434	)

The Company did not have any transfers between levels during the three and nine months ended September 30, 2021 and 2020.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

3. Investment Valuations and Fair Value Measurements (Continued)

Level 3 Valuation and Quantitative Information: The following table summarizes the valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of September 30, 2021:

Investment Type

Fair Value

Valuation
Technique

Unobservable
Input

Range

Weighted
Average*

Impact to
Valuation from an
Increase in Input

Debt

1,292,542

Income Method

Discount Rate

5.9% to 19.5%

10.7%

Decrease

Debt

26,825

Market Method

EBITDA Multiple

6.0x to 7.0x

N/A

Increase

Income Method

Take Out Indication

100.0% to 100.0%

N/A

Increase

Debt

39,751

Market Method

Revenue Multiple

0.6x to 0.8x

N/A

Increase

Debt

58,359

Income Method

Discount Rate

5.9% to 7.9%

7.2%

Decrease

Income Method

Take Out Indication

100.0% to 100.0%

N/A

Increase

Equity

25,028

Market Method

EBITDA Multiple

6.0x to 7.5x

N/A

Increase

Equity

—

Market Method

Revenue Multiple

0.6x to 0.8x

N/A

Increase

Equity

7,169

Market Method

EBITDA Multiple

8.5x to 9.5x

N/A

Increase

Income Method

Implied Volatility

30.0% to 40.0%

N/A

Increase

Expected Term

(in years)

1.0 to 6.0

N/A

Increase

Equity

908

Market Method

Revenue Multiple

1.8x to 2.8x

N/A

Increase

Income Method

Implied Volatility

35.0% to 45.0%

N/A

Increase

Expected Term

(in years)

0.5 to 1.0

N/A

Increase

*	Weighted based on fair value

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

3. Investment Valuations and Fair Value Measurements (Continued)

The following table summarizes the valuation techniques and quantitative information utilized in determining the fair value of the Level 3 investments as of December 31, 2020:

Investment Type

Fair Value

Valuation
Technique

Unobservable
Input

Range

Weighted
Average*

Impact to
Valuation from an
Increase in Input

Debt

1,240,657

Income Method

Discount Rate

5.0% to 20.8%

10.1%

Decrease

Debt

13,911

Market Method

EBITDA Multiple

8.9x to 9.9x

N/A

Increase

Debt

27,253

Market Method

EBITDA Multiple

7.3x to 8.3x

N/A

Increase

Revenue Multiple

0.8x to 1.0x

N/A

Increase

Debt

38,742

Market Method

Revenue Multiple

0.6x to 2.3x

N/A

Increase

Debt

65,112

Income Method

Discount Rate

6.9% to 10.1%

9.0%

Decrease

Market Method

Indicative Bid

101.6% to 102.0%

N/A

Increase

Equity

—

Market Method

EBITDA Multiple

7.5x to 8.5x

N/A

Increase

Equity

1,831

Market Method

Revenue Multiple

0.6x to 2.3x

N/A

Increase

Equity

9,578

Market Method

EBITDA Multiple

5.0x to 8.3x

N/A

Increase

Revenue Multiple

0.5x to 1.0x

N/A

Increase

Equity

3,308

Market Method

EBITDA Multiple

10.3x to 11.3x

N/A

Increase

Income Method

Implied Volatility

25.0% to 35.0%

N/A

Increase

Expected Term

(in years)

1.3 to 6.3

N/A

Increase

Equity

1,166

Market Method

EBITDA Multiple

3.5x to 5.5x

N/A

Increase

Market Method

Revenue Multiple

1.5x to 2.5x

N/A

Increase

Income Method

Implied Volatility

32.5% to 42.5%

N/A

Increase

Expected Term

(in years)

1.0 to 1.5

N/A

Increase

*	Weighted based on fair value

The Company generally utilizes the midpoint of a valuation range provided by an external, independent valuation firm in determining fair value.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

4. Agreements and Related Party Transactions

Advisory Agreement: On December 29, 2017, the Company entered into the Investment Advisory and Management Agreement (the “Advisory Agreement”) with the Adviser, its registered investment adviser under the Investment Advisers Act of 1940, as amended. The Advisory Agreement became effective upon its execution. Unless earlier terminated, the Advisory Agreement will remain in effect for a period of two years and will remain in effect from year to year thereafter if approved annually by (i) the vote of the Board, or by the vote of a majority of the Company’s outstanding voting securities and (ii) the vote of a majority of the Board who are not “interested persons” (as defined in Section 2(a)(19) of the 1940 Act) of the Company, the Adviser or any of their respective affiliates (the “Independent Directors”). The Advisory Agreement will automatically terminate in the event of an assignment by the Adviser.

The Advisory Agreement may be terminated by either party, by vote of the Company’s Board, or by a vote of the majority of the Company’s outstanding voting units, without penalty upon not less than 60 days’ prior written notice to the applicable party. If the Advisory Agreement is terminated according to this paragraph, the Company will pay the Adviser a pro-rated portion of the Management Fee and Incentive Fee (each as defined below). The Advisory Agreement was reapproved by the Company’s Board on August 9, 2021.

Pursuant to the Advisory Agreement, the Adviser will:

•

determine the composition of the Company’s portfolio, the nature and timing of the changes to the Company’s portfolio and the manner of implementing such changes;

•

identify, evaluate and negotiate the structure of the investments the Company makes (including performing due diligence on the Company’s prospective portfolio companies);

•

determine the assets the Company will originate, purchase, retain or sell;

•

close, monitor and administer the investments the Company makes, including the exercise of any rights in the Company’s capacity as a lender; and

•

provide the Company such other investment advice, research and related services as the Company may, from time to time, require.

The Company pays to the Adviser, quarterly in arrears, a management fee in cash (the “Management Fee”) calculated as follows: 0.375% (i.e., 1.50% per annum) of the average gross assets of the Company on a consolidated basis, with the average determined based on the gross assets of the Company as of the end of the three most recently completed calendar months. “Gross assets” means the amortized cost of portfolio investments of the Company (including portfolio investments purchased with borrowed funds and other forms of leverage, such as Preferred Units, public and private debt issuances, derivative instruments, repurchase agreements and other similar instruments or arrangements) that have not been sold, distributed to the Members, or written off for tax purposes (but reduced by any portion of such cost basis that has been written down to reflect a permanent impairment of value of any portfolio investment), and excluding cash and cash equivalents. The Management Fee payable for any partial month or quarter will be appropriately pro-rated. The Adviser may defer its right to receive current payment of such fee until the Company is notified otherwise.

For the three and nine months ended September 30, 2021, Management Fees incurred were $5,415 and $16,140, respectively, of which $5,415 remained payable as of September 30, 2021. For the three and nine months ended September 30, 2020, Management Fees incurred amounted to $4,948 and $14,858, respectively, of which $4,948 remained payable at September 30, 2020.

In addition, the Adviser will receive an incentive fee (the “Incentive Fee”) as follows:

(a)

First, no Incentive Fee will be owed until the Unitholders have collectively received cumulative distributions pursuant to this clause equal to their aggregate contributions to the Company in respect of all Units;

(b)

Second, no Incentive Fee will be owed until the Unitholders have collectively received cumulative distributions equal to a 9% internal rate of return on their aggregate contributions to the Company in respect of all Units (the “Hurdle”);

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

4. Agreements and Related Party Transactions (Continued)

(c)

Third, the Adviser will be entitled to an Incentive Fee out of 100% of additional amounts otherwise distributable to Unitholders until such time as the Incentive Fee paid to the Adviser is equal to 20% of the sum of (i) the amount by which the Hurdle exceeds the aggregate capital contributions of the Unitholders in respect of all Units and (ii) the amount of Incentive Fee being paid to the Adviser pursuant to this clause (c); and

(d)

Thereafter, the Adviser will be entitled to an Incentive Fee equal to 20% of additional amounts otherwise distributable to Unitholders in respect of all Units, with the remaining 80% distributed to the Unitholders.

The Incentive Fee is calculated on a cumulative basis and the amount of the Incentive Fee payable in connection with any distribution (or deemed distribution) will be determined in accordance with the foregoing formula each time amounts are to be distributed to the Unitholders.

For purposes of calculating the Incentive Fee, aggregate contributions shall not include Earnings Balancing Contributions or Late-Closer Contributions, and the distributions to Unitholders shall not include distributions attributable to Late-Closer Contributions. Earnings Balancing Contributions received by the Company will not be treated as amounts distributed to Unitholders for purposes of calculating the Incentive Fee. In addition, if distributions to which a Defaulting Member otherwise would have been entitled have been withheld pursuant to 6.2.4 of the TCW Direct Lending VII LLC Agreement (the “LLC Agreement”), the amounts so withheld shall be treated for such purposes as having been distributed to such Defaulting Member. The amount of any distribution of securities made in kind shall be equal to the fair market value of those securities at the time of distribution determined pursuant to 13.4 of the LLC Agreement.

If the Advisory Agreement terminates early for any reason other than (i) the Adviser voluntarily terminating the agreement or (ii) the Company terminating the agreement for cause (as set out in the Advisory Agreement), the Company will be required to pay the Adviser a final incentive fee payment (the “Final Incentive Fee Payment”). The Final Incentive Fee Payment will be calculated as of the date the Advisory Agreement is so terminated and will equal the amount of Incentive Fee that would be payable to the Adviser if (A) all of the Company’s investments were liquidated for their current value (but without taking into account any unrealized appreciation of any portfolio investment), and any unamortized deferred portfolio investment-related fees were deemed accelerated, (B) the proceeds from such liquidation were used to pay all of the Company’s outstanding liabilities, and (C) the remainder were distributed to Unitholders and paid as Incentive Fee in accordance with the “waterfall” (i.e., clauses (a) through (d)) described above for determining the amount of the Incentive Fee. The Company will make the Final Incentive Fee Payment in cash on or immediately following the date the Advisory Agreement is so terminated.

Adviser Return Obligation: After the Company has made its final distribution of assets in connection with its dissolution, if the Adviser has received aggregate payments of Incentive Fees in excess of the amount the Adviser was entitled to receive pursuant to “Incentive Fee” above, then the Adviser will return to the Company, on or before 90 days after such final distribution of assets, an amount equal to such excess (the “Adviser Return Obligation”). Notwithstanding the preceding sentence, in no event will the Adviser be required to return to the Company an amount greater than the aggregate Incentive Fees paid to the Adviser, reduced by the excess of (a) the aggregate federal, state and local income tax liability the Adviser incurred in connection with the payment of such Incentive Fees, over (b) an amount equal to the U.S. federal and state tax benefits available to the Adviser by virtue of the payment made by the Adviser pursuant to its Adviser Return Obligation.

Administration Agreement: On September 25, 2018, the Company entered into an Amended and Restated Administration Agreement (the “Administration Agreement”) with TCW Asset Management Company LLC (the “Administrator”), which amended and restated the Administration Agreement between the Company and the Administrator entered into on April 16, 2018. Under the Administration Agreement, the Administrator (or one or more delegated service providers) will oversee the maintenance of the Company’s financial records and otherwise assist with the Company’s compliance with regulations applicable to a business development company under the Investment Company Act of 1940, as amended, and a regulated investment company under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended; monitor the payment of the Company’s expenses; oversee the performance of administrative and professional services rendered to the Company by others; be responsible for the financial and other records that the Company is required to maintain; prepare and disseminate reports to Unitholders and reports and other materials to be filed with the SEC or other regulators; assist the Company in determining and publishing (as necessary or appropriate) its net asset value; oversee the preparation and filing of tax returns; generally oversee the payment of expenses; and provide such other services as the Administrator, subject to review of the Company’s board of directors, shall from time to time determine to be necessary or useful to perform its obligations

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

4. Agreements and Related Party Transactions (Continued)

under the Administration Agreement. Payments under the Administration Agreement will be equal to an amount that reimburses the Administrator for the costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities under the Administration Agreement. The Administrator shall seek such reimbursement from the Company no more than once during any calendar year and shall only seek such reimbursement when all Company Expenses (as defined below) for such calendar year have been paid or accrued. Amounts paid pursuant to the Administration Agreement are subject to the annual cap on Company Expenses (as defined below), as described more fully below.

The Company, and indirectly the Unitholders, will bear all costs, expenses and liabilities, other than Adviser Operating Expenses (as defined below) (which shall be borne by the Adviser), in connection with the organization, operations, administration and transactions of the Company (“Company Expenses”). Company Expenses shall include, without limitation: (a) organizational expenses and expenses associated with the issuance of the Units; (b) expenses of calculating the Company’s net asset value (including the cost and expenses of any independent valuation firm); (c) fees payable to third parties, including agents, consultants, attorneys or other advisors, relating to, or associated with, evaluating and making investments; (d) expenses incurred by the Adviser or the Administrator payable to third parties, including agents, consultants, attorneys or other advisors, relating to or associated with monitoring the financial and legal affairs for the Company, providing administrative services, monitoring or administering the Company’s investments and performing due diligence reviews of prospective investments and the corresponding portfolio companies; (e) costs associated with the Company’s reporting and compliance obligations under the Investment Company Act of 1940, the Securities Exchange Act of 1934, as amended, and other applicable federal or state securities laws; (f) fees and expenses incurred in connection with debt incurred to finance the Company’s investments or operations, and payment of interest and repayment of principal on such debt; (g) expenses related to sales and purchases of Units and other securities; (h) Management Fees and Incentive Fees; (i) administrator fees, if any, payable under the Administration Agreement; (j) transfer agent, sub-administrator and custodial fees; (k) expenses relating to the issue, repurchase and transfer of Units to the extent not borne by the relevant transferring Unitholders and/or assignees; (l) federal and state registration fees; (m) federal, state and local taxes and other governmental charges assessed against the Company; (n) independent directors’ fees and expenses and the costs associated with convening a meeting of the Company’s board of directors or any committee thereof; (o) fees and expenses and the costs associated with convening a meeting of the Unitholders or holders of any Preferred Units of the Company, as well as the compensation of an investor relations professional responsible for the coordination and administration of the foregoing; (p) costs of any reports, proxy statements or other notices to Unitholders, including printing and mailing costs; (q) costs and expenses related to the preparation of the Company’s consolidated financial statements and tax returns; (r) the Company’s allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; (s) direct costs and expenses of administration, including printing, mailing, long distance telephone, and copying; (t) independent auditors and outside legal costs, including legal costs associated with any requests for exemptive relief, “no-action” positions or other guidance sought from a regulator, pertaining to the Company; (u) compensation of other third party professionals to the extent they are devoted to preparing the Company’s consolidated financial statements or tax returns or providing similar “back office” financial services to the Company; (v) Adviser costs and expenses (excluding travel) in connection with identifying and investigating investment opportunities for the Company, monitoring the investments of the Company and disposing of any such investments; (w) portfolio risk management costs; (x) commissions or brokerage fees or similar charges incurred in connection with the purchase or sale of securities (including merger fees); (y) costs and expenses attributable to normal and extraordinary investment banking, commercial banking, accounting, auditing, appraisal, valuation, administrative agent activities, custodial and registration services provided to the Company, including in each case services with respect to the proposed purchase or sale of securities by the Company that are not reimbursed by the issuer of such securities or others (whether or not such purchase or sale is consummated); (z) costs of amending, restating or modifying the LLC Agreement or Advisory Agreement or related documents of the Company or related entities; (aa) fees, costs, and expenses incurred in connection with the termination, liquidation or dissolution of the Company or related entities and (bb) all other properly and reasonably chargeable expenses incurred by the Company or the Administrator in connection with administering the Company’s business. Notwithstanding the foregoing, in the event of a Reorganization (as defined in the LLC Agreement) that results in a Public Company (as defined in the LLC Agreement) or an Extension Fund (as defined in the LLC Agreement), including a Reorganization (as defined in the LLC Agreement) pursuant to which the Company becomes the Public Company (as defined in the LLC Agreement) or the Extension Fund (as defined in the LLC Agreement), the fees, costs and expenses associated with any such restructuring, initial public offering, listing of equity securities or reorganization will be borne appropriately by the Public Company (as defined in the LLC Agreement) and the Extension Fund (as defined in the LLC Agreement) (and indirectly only by Unitholders that elect to become investors in the Public Company (as defined in the LLC Agreement) or the Extension Fund (as defined in the LLC Agreement)), as the case may be, and no others will directly or indirectly bear such fees, costs or expenses.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

4. Agreements and Related Party Transactions (Continued)

However, the Company will not bear (a) more than an amount equal to 10 basis points of investors’ aggregate Commitments for organizational expenses and offering expenses in connection with the offering of Units through the date that is nine months after the Initial Closing Date, as it may be extended by the Adviser, and (b) more than an amount equal to 12.5 basis points of aggregate Commitments computed annually for Company Expenses (the “Expense Cap”); provided, that, any amount by which actual annual expenses in (b) exceed the 12.5 basis point limit shall be carried over to the next year, without limitation, as additional expense until the earlier of the Reorganization (as defined in the LLC Agreement) or the dissolution of the Company, with any partial year assessed on a pro rata basis; and provided, further, that in determining the Company Expenses subject to the 12.5 basis point limit in (b), the following expenses shall be excluded and shall be borne by the Company as incurred without regard to the 12.5 basis point limit in (b): the Management Fee, the Incentive Fee, organizational and offering expenses (which are subject to the separate cap), amounts incurred in connection with the Company’s borrowings (including interest, bank fees, legal fees and other transactional expenses arising out of or related to any borrowing or borrowing facility and similar costs), transfer agent fees, federal, state and local taxes and other governmental charges assessed against the Company, out-of-pocket expenses of calculating the Company’s net asset value (including the cost and expenses of any independent valuation firm engaged for that purpose and the costs and expenses of the valuation of the Company’s portfolio investments performed by the Company’s independent auditors in order to comply with applicable Public Company Accounting Oversight Board standards), out-of-pocket costs and expenses incurred in connection with arranging or structuring investments and their ongoing operations (including expenses and liabilities related to the formation and ongoing operations of any special purpose entity or entities in connection with an investment), out-of-pocket legal costs associated with any requests for exemptive relief, “no-action” positions or other guidance sought from a regulator pertaining to the Company, out-of-pocket costs and expenses relating to any Reorganization (as defined in the LLC Agreement) or liquidation of the Company, and any extraordinary expenses (such as litigation expenses and indemnification payments). Notwithstanding the foregoing, in no event will the Company carryforward to future periods the amount by which actual annual Company Expenses for a year exceed the 12.5 basis point limit for more than three years from the date on which such expenses were reimbursed.

“Adviser Operating Expenses” means overhead and operating and administrative expenses incurred by or on behalf of the Adviser or any of its affiliates, including the Company, in connection with maintaining and operating the Adviser’s office, including salaries and other compensation (including compensation due to its officers), rent, routine office equipment expense and liability and insurance premiums (other than those incurred in maintaining fidelity bonds and indemnitee insurance policies), in furtherance of providing supervisory investment management services for the Company. Adviser Operating Expenses also include any expenses incurred by the Adviser or its Affiliates in connection with the Adviser’s registration as an investment adviser under the Investment Advisers Act of 1940, as amended, or with its compliance as a registered investment adviser thereunder.

All Adviser Operating Expenses and all expenses of the Company that the Company will not bear will, as set forth above, will be borne by the Adviser or its affiliates.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

5. Commitments and Contingencies

The Company had the following unfunded commitments and unrealized depreciation by investment as of September 30, 2021 and December 31, 2020:


			September 30, 2021				December 31, 2020
Unfunded Commitments	Maturity/ Expiration		Amount		Unrealized Depreciation		Amount		Unrealized Depreciation
AGY Holdings Corp.		September 2025	$	7,752	$	-	$	10,854	$	-
Altern Marketing LLC		October 2024		5,217		-		2,473		-
Bendon Inc.		December 2025		7,263		254		8,254		149
Caiman Merger Sub LLC		November 2024		-		-		1,031		-
Centric Brands Inc.		October 2024		1,351		-		2,922		-
Encompass Digital Media, Inc.		September 2023		2,022		-		1,661		28
FM Restaurants Holdco, LLC		November 2023		2,414		-		-		-
GEON Performance Solutions, LLC		October 2024		-		-		2,350		-
Greenfield World Trade, Inc.		December 2021		16,118		-		-		-
Hometown Food Company		August 2023		5,097		-		5,097		-
Karman Holdings LLC (fka Spaceco Holdings LLC)		December 2025		4,261		34		9,364		122
KBP Brands, LLC (fka KBP Investments LLC)		May 2023		16,000		144		15,000		-
Mondee Holdings LLC		December 2024		8,613		-		8,613		-
Obagi Cosmeceuticals LLC		March 2026		11,308		-		-		-
Production Resource Group LLC		October 2021		-		-		1,443		-
Quicken Parent Corp.		April 2023		948		-		948		7
Rapid Displays, Inc.		April 2026		1,770		35		-		-
UniTek Acquisition, Inc.		August 2023		1,714		168		3,214		498
WDE TorcSill Holdings LLC		October 2024		2,108		89		4,564		141
Winsight, LLC		March 2024		4,233		275		-		-

Total			$	98,189	$	999	$	77,788	$	945

From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. As of September 30, 2021, the Company is not aware of any pending or threatened litigation.

In the normal course of business, the Company enters into contracts which provide a variety of representations and warranties, and that provide general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.

The Company’s Unit activity for the three and nine months ended September 30, 2021 and 2020, was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Units at beginning of period		13,734,010		13,734,010		13,734,010		13,734,010

Units issued and committed at end of period		13,734,010		13,734,010		13,734,010		13,734,010

No deemed distributions and contributions were processed during the three and nine months ended September 30, 2021 and 2020.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

7. Credit Facilities

On May 10, 2018, the Company entered into a Revolving Credit Agreement (the “Natixis Credit Agreement”) among the Company, as borrower, and Natixis, New York Branch (“Natixis”), as administrative agent and the committed lenders, conduit lenders and funding agents. The Natixis Credit Agreement provided for a revolving credit line (the “Natixis Revolving Credit Facility”) of up to $150,000 (the “Natixis Maximum Commitment”), subject to the lesser of the “Natixis Borrowing Base” assets or the Natixis Maximum Commitment. The Natixis Borrowing Base assets equal the sum of a percentage of unfunded commitments from certain classes of eligible investors in the Company (the “Natixis Available Commitment”).

The Natixis Maximum Commitment may be periodically increased in amounts designated by the Company, up to an aggregate amount of $1 billion. The maturity date of the Natixis Credit Agreement was May 10, 2021. On May 10, 2021, the Company exercised its option to extend the maturity date of the Natixis Credit Agreement to May 9, 2022. The Company has one more available option to extend the Natixis Credit Agreement maturity date for a term of up to 364 days after the maturity date per such extension. Borrowings under the Natixis Credit Agreement bear interest at a rate equal to either (a) a base rate calculated in a customary manner plus 0.75% or (b) an adjusted eurodollar rate calculated in a customary manner plus 1.75%. As of December 31, 2020, the Natixis Maximum Commitment was $280,000. On March 10, 2021, the Natixis Maximum Commitment was reduced to $250,000.

The Natixis Revolving Credit Facility is secured by a first priority security interest, subject to customary exceptions, in (i) all of the capital commitments of the investors in the Company, (ii) the Company’s right to make capital calls, receive payment of capital contributions from the investors and enforce payment of the capital commitments and capital contributions under the Company’s operating agreement and (iii) a cash collateral account into which the capital contributions from the investors are made. The Natixis Revolving Credit Facility may be terminated, and any outstanding amounts thereunder may become due and payable, should the Company fail to satisfy certain covenants. As of September 30, 2021, the Company was in compliance with such covenants.

As of September 30, 2021 and December 31, 2020, the Natixis Borrowing Base assets were less than the Natixis Maximum Commitment. A summary of amounts outstanding and available under the Natixis Revolving Credit Facility as of September 30, 2021 and December 31, 2020 was as follows:


Natixis Revolving Credit Facility	Maximum Commitment		Borrowings Outstanding		Available Amount⁽¹⁾
As of September 30, 2021	$	250,000	$	45,000	$	89,444
As of December 31, 2020	$	280,000	$	172,000	$	85,230

(1)	The amount available considers any limitations related to the debt facility borrowing.

On January 29, 2019, TCW DL VII Financing LLC (the “Borrower” or “TCW DL VII Financing”), a newly-formed, wholly-owned, special purpose financing subsidiary of the Company, entered into a senior secured credit facility (the “PNC Credit Facility” and together with the Natixis Revolving Credit Facility, the “Credit Facilities”) pursuant to a credit and security agreement (the “PNC Credit Agreement”) with PNC Bank, National Association (“PNC”), as facility agent, the lenders from time to time party thereto, and State Street Bank and Trust Company, as collateral agent.

Under the PNC Credit Facility, the lenders have agreed to extend credit to the Borrower in an aggregate principal amount of up to $400,000 of revolving and term loans (the “PNC Maximum Commitment”), subject to compliance with a borrowing base (the “PNC Borrowing Base”). The PNC Maximum Commitment may be periodically increased in amounts designated by the Borrower up to an aggregate principal amount of $900,000, subject to lender consent and obtaining commitments for the increase. The Borrower may make borrowings of (i) a revolving loan (the “PNC Revolving Credit Facility” and together with the Natixis Revolving Credit Facility, the “Revolving Credit Facilities”) under the PNC Credit Facility during the period commencing January 29, 2019 and ending on January 29, 2022 and (ii) a term loan (the “PNC Term Loan”) under the PNC Credit Facility during the period which commenced on January 29, 2019 and ended on January 29, 2020, unless, there is an earlier termination of the PNC Credit Facility or event of default thereunder. The PNC Credit Facility will mature on January 29, 2024. Loans under the PNC Credit Facility bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) three-month LIBOR plus the facility margin of 2.30% per annum or (ii) the Base Rate plus the facility margin of 2.30% per annum.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

7. Credit Facilities (Continued)

On April 11, 2019, the Borrower amended and restated the PNC Credit Agreement (as amended, the “Amended PNC Credit Agreement”) for the PNC Credit Facility. The Amended PNC Credit Agreement, among other things, (a) increased the total commitments under the PNC Credit Facility from $400,000 to $600,000 (the “Amended PNC Maximum Commitment”) and (b) made certain modifications to the calculation of the borrowing base under the prior facility, including the eligibility requirements of collateral obligations pledged under the PNC Credit Facility and loan portfolio concentration limits.

On March 17, 2020, the Borrower amended and restated the Amended PNC Credit Agreement (as further amended the “Second Amended PNC Credit Agreement”). The Second Amended PNC Credit Agreement, among other things, increased the total commitments under the PNC Credit Facility from $600,000 to $795,000 (the “Second Amended PNC Maximum Commitment”). The Second Amended PNC Maximum Commitment may be periodically increased in amounts designated by the Borrower up to an aggregate principal amount of $900,000, subject to lender consent and obtaining commitments for the increase. The Borrower may make borrowings of (i) revolving loans under the PNC Credit Facility during the period commencing January 29, 2019 and ending on January 29, 2022 and (ii) term loans under the PNC Credit Facility during the period commencing January 29, 2019 and ending on March 17, 2020, unless, in the case of (i) and (ii), there is an earlier termination of the PNC Credit Facility or event of default thereunder. The PNC Credit Facility will mature on January 29, 2024. Loans under the PNC Credit Facility will bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) three-month LIBOR plus the facility margin of 2.30% per annum or (ii) the Base Rate plus the facility margin of 2.30% per annum. On June 19, 2020, the Second Amended PNC Maximum Commitment was increased from $795,000 to $825,000.

The Borrower’s obligations under the PNC Credit Facility are secured by a first priority security interest in all of the assets of the Borrower, including its portfolio of loans that has been contributed by the Company to the Borrower in exchange for 100% of the membership interests of the Borrower and any payments received in respect of such loans. The Company may contribute or sell to the Borrower additional loans from time to time after the closing date, which shall be pledged in favor of the lenders under the PNC Credit Facility.

Under the PNC Credit Facility, the Borrower has made customary representations and warranties and is required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar credit facilities. The PNC Credit Facility also includes events of default that are customary for similar credit facilities. As of September 30, 2021, the Borrower was in compliance with such covenants.

Borrowings of the Borrower are non-recourse to the Company but are consolidated in the Company’s consolidated financial statements and considered borrowings of the Company for purposes of complying with the asset coverage requirements under the Investment Company Act of 1940, as amended.

As of September 30, 2021 and December 31, 2020, the PNC Borrowing Base assets were less than the Second Amended and Amended PNC Maximum Commitment. A summary of amounts outstanding and available under the PNC Credit Facility as of September 30, 2021 and December 31, 2020 is as follows:


PNC Credit Facility	Maximum Commitment		Borrowings Outstanding		Available Amount⁽¹⁾
As of September 30, 2021	$	825,000	$	413,000	$	348,386
As of December 31, 2020	$	825,000	$	413,000	$	334,734

(1)	The amount available considers any limitations related to the facility borrowing.

Borrowings under the PNC Credit Facility as of September 30, 2021 and December 31, 2020 consisted of $165,500 from the PNC Revolving Credit Facility (i.e., revolving line of credit) and $247,500 of PNC Term Loan.

The Company incurred financing costs of $3,463 and $4,433, in connection with the Natixis Credit Agreement and the PNC Credit Agreement, respectively. In addition, the Company incurred an additional $2,070 and $1,531 in financing costs in connection with the Amended and Second Amended PNC Credit Agreement, respectively. Lastly, the Company incurred $255 in financing costs associated with the June 19, 2020 upsize of the PNC Credit Facility.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

7. Credit Facilities (Continued)

The Company incurred $629 in fees associated with the May 10, 2021 extension of the Natixis Credit Agreement. Costs associated with the Revolving Credit Facilities were primarily recorded by the Company as deferred financing costs on its Consolidated Statements of Assets and Liabilities and the costs are being amortized over the respective lives of the Natixis Revolving Credit Facility and PNC Revolving Credit Facility. As of September 30, 2021 and December 31, 2020, $3,289 and $4,314, respectively, of such deferred financing costs had yet to be amortized. Costs associated with the PNC Term Loan are deferred and amortized over the term of the PNC Term Loan. Such deferred financing costs are netted against the carrying value of the PNC Term Loan on the Company’s Consolidated Statements of Assets and Liabilities. As of September 30, 2021 and December 31, 2020, $1,247 and $1,648 million, respectively, of such deferred financing costs have yet to be amortized.

A reconciliation of amounts presented on the Company’s Consolidated Statements of Assets and Liabilities versus amounts outstanding on the PNC Term Loan is as follows:


	As of September 30, 2021			As of December 31, 2020
Principal amount outstanding on PNC Term Loan	$	247,500		$	247,500
Deferred financing costs		(1,247	)		(1,648	)

PNC Term Loan (as presented on the Consolidated Statements of Assets and Liabilities)	$	246,253		$	245,852

The carrying amounts of the Credit Facilities, which are categorized as Level 2 within the fair value hierarchy as of September 30, 2021 and 2020, approximates their respective fair values. Valuation techniques and significant inputs used to determine fair value include Company details; credit, market and liquidity risk and events; financial health of the Company; place in the capital structure; interest rate; and the Credit Facilities’ terms and conditions.

The summary information regarding the Credit Facilities for the three and nine months ended September 30, 2021 and 2020 was as follows:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2021		2020			2021			2020
Credit Facilities interest expense	$	2,638	$	3,655		$	9,178		$	14,530
Unused commitment fees		518		438			1,380			1,138
Administrative fees		—		—			100			100
Amortization of deferred financing costs		637		793			2,084			2,327

Total	$	3,793	$	4,886		$	12,742		$	18,095

Weighted average interest rate		2.43%		2.44	%		2.34	%		3.09	%
Average outstanding balance	$	425,098	$	585,000		$	516,905		$	617,858

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

8. Repurchase Obligation

In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements with Macquarie US Trading LLC (“Macquarie”), whereby the Company sells to Macquarie an investment that it holds and concurrently enters into an agreement to repurchase the same investment at an agreed-upon price at a future date, not to exceed 90-days from the date it was sold (the “Macquarie Transaction”).

In accordance with ASC 860, Transfers and Servicing, these Macquarie Transactions meet the criteria for secured borrowings. Accordingly, the investment financed by the Macquarie Transaction remains on the Company’s Consolidated Statements of Assets and Liabilities as an asset, and the Company records a liability to reflect its repurchase obligation to Macquarie (the “Repurchase Obligation”). The Repurchase Obligation is secured by the respective investment that is the subject of the repurchase agreement. Interest expense associated with the Repurchase Obligation is reported on the Company’s Consolidated Statements of Operations within Other expenses.

No repurchase agreements were entered into or settled during the three months ended September 30, 2021. During the nine months ended September 30, 2021, the Company entered into and settled a repurchase agreement for which the Company incurred interest expense of $516.

During the three and nine months ended September 30, 2020, the Company entered into a repurchase agreement collateralized by the Company’s term loan to AGY Holdings Corp. Interest under this Repurchase Obligation was calculated as “the product of (i) the difference in days between the trade date and the settlement date of the Macquarie Transaction and (ii) 0.00009722,” as stipulated in the repurchase agreement. Interest expense associated with this Repurchase Obligation totaled $624.

The Company had no outstanding Repurchase Obligations as of September 30, 2021 and December 31, 2020.

9. Income Taxes

The Company has elected to be regulated as a BDC under the 1940 Act and has elected to be treated as a RIC under the Code. So long as the Company maintains its status as a RIC, it will generally not pay corporate-level U.S. Federal income or excise taxes on any ordinary income or capital gains that it distributes at least annually to its Unitholders as dividends. The Company elected to be taxed as a RIC in 2018. The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reversed and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof.

Federal Income Taxes: It is the policy of the Company to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and distribute all of its net taxable income and any net realized gains on investments to its shareholders. Therefore, no federal income tax provision is required.

As of September 30, 2021 and December 31, 2020, the Company’s aggregate investment unrealized appreciation and depreciation for federal income tax purposes were as follows:


	As of September 30, 2021			As of December 31, 2020
Cost of investments for federal income tax purposes	$	1,418,747		$	1,532,332
Unrealized appreciation	$	54,929		$	32,386
Unrealized depreciation	$	(23,094	)	$	(27,893	)
Net unrealized appreciation on investments	$	31,835		$	4,493

The Company did not have any unrecognized tax benefits as of December 31, 2020, nor were there any increases or decreases in unrecognized tax benefits for the period then ended; therefore, no interest or penalties were accrued. The Company is subject to examination by the U.S federal and state tax authorities for returns filed for the prior two years.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

10. Financial Highlights

Selected data for a unit outstanding throughout the nine months ended September 30, 2021 and 2020 is presented below.


	For the Nine Months Ended September 30,
	2021⁽¹⁾			2020⁽¹⁾
Net Asset Value Per Unit (accrual base), Beginning of Period	$	93.84		$	99.36


Income from Investment Operations:
Net investment income		3.79			5.92
Net realized and unrealized gain (loss)		2.11			(3.81	)


Total income from investment operations		5.90			2.11

Less Distributions:
From distributable earnings		(6.55	)		(2.81	)
From return of capital		(7.28	)		(3.42	)


Total distributions		(13.83	)		(6.23	)


Net Asset Value Per Unit (accrual base), End of Period	$	85.91		$	95.24

Unitholder Total Return⁽²⁾⁽³⁾		8.12	%		3.56	%

Unitholder IRR before incentive fees⁽⁴⁾		12.14	%		7.01	%

Unitholder IRR after all fees and expenses⁽⁴⁾		9.89	%		7.01	%


Ratios and Supplemental Data
Members’ Capital, end of period	$	1,014,510		$	759,558
Units outstanding, end of period		13,734,010			13,734,010

Ratios based on average net assets of Members’ Capital:
Ratio of total expenses to average net assets⁽⁵⁾⁽⁶⁾		9.47	%		3.99	%
Ratio of financing cost to average net assets⁽³⁾		1.32	%		2.31	%
Ratio of net investment income to average net assets⁽⁵⁾⁽⁶⁾		7.23	%		13.90	%
Ratio of incentive fees to average net assets⁽⁵⁾		4.94	%		(2.08	)%
Credit facilities payable		456,753			583,217
Asset coverage ratio		3.22			2.30
Portfolio turnover rate⁽³⁾		37.43	%		28.20	%

(1)

Per unit data was calculated using the number of Common Units issued and outstanding as of September 30, 2021 and 2020, respectively.

(2)

The Total Return for the nine months ended September 30, 2021 and 2020 was calculated by taking total income from investment operations for the period divided by the weighted average capital contributions from the Members during the period. The return is net of management fees and expenses.

(3)

Not annualized.

(4)

The IRR since inception for the Common Unitholders, after management fees, financing costs and operating expenses, but before incentive fees is 12.14%. The IRR since inception for the Common Unitholders, after management fees, financing costs, operating expenses and Advisor incentive fees is 9.89%. The IRR is computed based on cash flow due dates contained in notices to Members (contributions from and distributions to the Unitholders) and the net assets (residual value) of the Members’ Capital account at period end. The IRR is calculated based on the fair value of investments using principles and methods in accordance with GAAP and does not necessarily represent the amounts that may be realized from sales or other dispositions. Accordingly, the actual return may vary significantly upon realization.

(5)

Annualized.

(6)

Expenses for the nine months ended September 30, 2020 include the $12.1 million reversal of incentive fees.

TCW DIRECT LENDING VII LLC

Notes to Consolidated Financial Statements (Unaudited) (Continued)

(Dollar amounts in thousands, except for unit data)

September 30, 2021

11. Subsequent Events

The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no subsequent events that require recognition or disclosure in these consolidated financial statements.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report on Form 10-Q. Some of the statements in this report (including in the following discussion) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or future performance or financial condition of TCW Direct Lending VII LLC. For simplicity, this report uses the terms “Company,” “we,” “us,” and “our” to refer to TCW Direct Lending VII LLC and where appropriate in the context, its wholly owned subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation:

•

our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our and their respective objectives as a result of the current COVID-19 pandemic;

•

an economic downturn, including as a result of the current COVID-19 pandemic, could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

•

a contraction of available credit, including as a result of the current COVID-19 pandemic, could impair our lending and investment activities;

•

interest rate volatility could affect our results, particularly in light of our use of leverage as part of our investment strategy;

•

our future operating results;

•

our contractual arrangements and relationships with third parties;

•

the ability of our portfolio companies to achieve their financial and other business objectives and the impact of the COVID-19 pandemic thereon;

•

competition with other entities and our affiliates for investment opportunities;

•

the impact of changing market conditions and lending standards on our ability to compete with other industry participants, including other business development companies, private and public funds, individual and institutional investors, and financial institutions for investment opportunities;

•

uncertainty surrounding the impact of the current COVID-19 pandemic on the financial stability of the United States and global economies;

•

the social, geopolitical, financial, trade and legal implications of the trade and cooperation agreement arising from Brexit, as well as future agreements between the United Kingdom and various countries in the European Union;

•

pandemics or other serious public health events, such as the ongoing global outbreak of COVID-19;

•

an inability to replicate the historical success of any previously launched fund managed by the private credit team of our investment adviser, TCW Asset Management Company LLC (the “Adviser”);

•

the speculative and illiquid nature of our investments;

•

the use of borrowed money to finance a portion of our investments;

•

the adequacy of our financing sources and working capital;

•

the costs associated with being an entity registered with the Securities and Exchange Commission (“SEC”);

•

the loss of key personnel;

•

the timing of cash flows, if any, from the operations of our portfolio companies;

•

the ability of the Adviser to locate suitable investments for us and to monitor and administer our investments;

•

the ability of the TCW Group, Inc. and its subsidiaries to attract and retain highly talented professionals that can provide services to the Adviser in its capacity as our investment adviser and administrator;

•

our ability to qualify and maintain our qualification as a regulated investment company, or “RIC,” under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended, or the “Code,” and as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”) and the related tax implications;

•

the effect of legal, tax and regulatory changes; and

•

the other risks, uncertainties and other factors we identify under “Part I—Item 1A. Risk Factors” in our Form 10-K filed with the SEC on March 22, 2021.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, some of those assumptions are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, the forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 (as amended, the “1934 Act”), which preclude civil liability for certain forward-looking statements, do not apply to the forward-looking statements in this report because we are an investment company.

Overview

We were formed on May 23, 2017 as a limited liability company under the laws of the State of Delaware. We conducted a private offering of our common limited liability company units (the “Units”) to investors in reliance on exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”).

On August 18, 2017 (“Inception Date”), we sold and issued 10 Units at an aggregate purchase price of $1,000 to TCW Asset Management Company LLC (“TAMCO”), an affiliate of the TCW Group, Inc.

On December 29, 2017, we filed an election to be regulated as a BDC under the 1940 Act. We elected, and intend to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. As a BDC and a RIC, we are required to comply with certain regulatory requirements.

On April 13, 2018 (the “Initial Closing Date”), we began accepting subscription agreements from investors for the private sale of our Units and on January 14, 2019, we completed our fourth and final closing sale of our Units. We have sold 13,734,010 Units for an aggregate offering price of approximately $1.4 billion. Each Unitholder is obligated to contribute capital equal to their Commitment and each Unit’s Commitment obligation is $100.00 per Unit. The sale of the Units was made pursuant to subscription agreements entered into by us and each investor. Under the terms of the subscription agreements, we may draw down all or any portion of the undrawn commitment with respect to each Unit generally upon at least ten business days’ prior written notice to the unitholders. The amount of capital that remains to be drawn down and contributed is referred to as an “Undrawn Commitment.”

We commenced operations during the second quarter of fiscal year 2018.

On February 12, 2020, we formed our third wholly-owned subsidiary, TCW DLG Funding VII 2020-1 LLC, a single member Delaware limited liability company.

Our commitment period commenced on the Initial Closing Date and ended on May 16, 2021, which is the later of (a) April 13, 2021, three years from the Initial Closing Date and (b) May 16, 2021, three years from the date in which we first completed an investment. We may complete investment transactions that were significantly in process as of the end of the commitment period and which we reasonably expect to be consummated prior to 90 days subsequent to the expiration date of the commitment period. We may also effect follow-on investments up to an aggregate maximum of 10% of Commitments.

Revenues

We generate revenues in the form of interest income and capital appreciation by providing private capital to middle market companies operating in a broad range of industries primarily in the United States. As our investment period has ended, we will not originate new loans, but may increase credit facilities to existing borrowers or affiliates. The investment philosophy, strategy and

approach of the private credit team of the Adviser (the “Private Credit Team” fka the “Direct Lending Team”) has generally not involved the use of payment-in-kind (“PIK”) interest, which represents contractual interest accrued and added to the loan balance that generally becomes due at maturity, or similar arrangements. Although the Private Credit Team generally did not originate a significant amount of investments for us with PIK interest features, from time to time we made, and currently have, investments that contain such features. We have investments with PIK interest features in certain circumstances involving debt restructurings or work-outs of current investments. Our highly negotiated private investments may include senior secured loans, unsecured senior loans, subordinated and mezzanine loans, convertible securities, notes and other non-convertible debt securities, equity securities, and equity-linked securities such as options and warrants. However, historically, our investment bias has been towards adjustable-rate, senior secured loans. We do not anticipate a secondary market developing for our private investments.

We are primarily focused on investing in senior secured debt obligations, although there may be occasions where the investment may be unsecured. We also consider an equity investment as the primary security, in combination with a debt obligation, or as a part of total return strategy. Our investments are mostly in corporations, partnerships or other business entities. Additionally, in certain circumstances, we may co-invest with other investors and/or strategic partners indirectly in a company through a joint venture partnership or other special purpose vehicle. While we invest primarily in U.S. companies, there are certain instances where we invested in companies domiciled elsewhere.

Expenses

We do not currently have any employees and do not expect to have any employees. Services necessary for our business are provided through the Amended and Restated Administration Agreement, dated as of September 25, 2018 (the “Administration Agreement”) and the Investment Advisory Agreement, dated as of December 29, 2017, (the “Advisory Agreement”).

We, and indirectly our Unitholders, will bear all costs, expenses and liabilities, other than Adviser Operating Expenses (which shall be borne by the Adviser), in connection with our organization, operations, administration and transactions (“Company Expenses”). Company Expenses shall include, without limitation: (a) organizational expenses and expenses associated with the issuance of the Units; (b) expenses of calculating our net asset value (including the cost and expenses of any independent valuation firm); (c) fees payable to third parties, including agents, consultants, attorneys or other advisors, relating to, or associated with, evaluating and making investments; (d) expenses incurred by the Adviser or the Administrator payable to third parties, including agents, consultants, attorneys or other advisors, relating to or associated with monitoring our financial and legal affairs, providing administrative services, monitoring or administering our investments and performing due diligence reviews of prospective investments and the corresponding portfolio companies; (e) costs associated with our reporting and compliance obligations under the 1940 Act, the 1934 Act and other applicable federal or state securities laws; (f) fees and expenses incurred in connection with debt incurred to finance our investments or operations, and payment of interest and repayment of principal on such debt; (g) expenses related to sales and purchases of Units and other securities; (h) Management Fees and Incentive Fees; (i) administrator fees, if any, payable under the Administration Agreement; (j) transfer agent, sub-administrator and custodial fees; (k) expenses relating to the issue, repurchase and transfer of Units to the extent not borne by the relevant transferring Unitholders and/or assignees; (l) federal and state registration fees; (m) federal, state and local taxes and other governmental charges assessed against us; (n) independent directors’ fees and expenses and the costs associated with convening a meeting of our board of directors or any committee thereof; (o) fees and expenses and the costs associated with convening a meeting of the Unitholders or holders of any Preferred Units, as well as the compensation of an investor relations professional responsible for the coordination and administration of the foregoing; (p) costs of any reports, proxy statements or other notices to Unitholders, including printing and mailing costs; (q) costs and expenses related to the preparation of our consolidated financial statements and tax returns; (r) our allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; (s) direct costs and expenses of administration, including printing, mailing, long distance telephone, and copying; (t) independent auditors and outside legal costs, including legal costs associated with any requests for exemptive relief, “no-action” positions or other guidance sought from a regulator, pertaining to us; (u) compensation of other personnel (including employees and secretarial and other staff of the Administrator) to the extent they are devoted to preparing our consolidated financial statements or tax returns or providing similar “back office” financial services to us; (v) Adviser costs and expenses (excluding travel) in connection with identifying and investigating investment opportunities for us, monitoring our investments and disposing of any such investments; (w) portfolio risk management costs; (x) commissions or brokerage fees or similar charges incurred in connection with the purchase or sale of securities (including merger fees); (y) costs and expenses attributable to normal and extraordinary investment banking, commercial banking, accounting, auditing, appraisal, valuation, administrative agent activities, custodial and registration services provided to us, including in each case services with respect to the proposed purchase or sale of securities by us that are not reimbursed by the issuer of such securities or others (whether or not such purchase or sale is consummated); (z) costs of amending, restating or modifying the LLC Agreement or Advisory Agreement or related documents of us or related entities; (aa) fees, costs, and expenses incurred in connection with the termination, liquidation or dissolution of the Company or related entities; and (bb) all other properly and reasonably chargeable expenses incurred by the Company or the Administrator in connection with administering our business. However, in the event of a Reorganization (as defined in the LLC Agreement) that results in a Public Fund (as defined in the LLC Agreement) or an Extension Fund (as defined in the LLC Agreement),

including a Reorganization (as defined in the LLC Agreement) pursuant to which the Company becomes the Public Fund (as defined in the LLC Agreement) or the Extension Fund (as defined in the LLC Agreement), the fees, costs and expenses associated with any such restructuring, initial public offering, listing of equity securities or reorganization will be borne appropriately by the Public Fund (as defined in the LLC Agreement) and the Extension Fund (as defined in the LLC Agreement) (and indirectly only by Unitholders that elect to become investors in the Public Fund (as defined in the LLC Agreement) or the Extension Fund (as defined in the LLC Agreement)), as the case may be, and no others will directly or indirectly bear such fees, costs or expenses.

However, we will not bear (a) more than an amount equal to 10 basis points of our aggregate Commitments for organizational expenses and offering expenses in connection with the offering of Units through January 14, 2019 and (b) more than an amount equal to 12.5 basis points of our aggregate Commitments computed annually for Company Expenses (the “Expense Cap”); provided, that, any amount by which actual annual expenses in (b) exceed the 12.5 basis point limit shall be carried over to the next year, without limitation, as additional expense until the earlier of the Reorganization (as defined in the LLC Agreement) or the dissolution of the Company, with any partial year assessed on a pro rata basis; and provided, further, that in determining the Company Expenses subject to the 12.5 basis point limit in (b), the following expenses shall be excluded and shall be borne by us as incurred without regard to the 12.5 basis point limit in (b): the Management Fee, the Incentive Fee, organizational and offering expenses (which are subject to the separate cap), amounts incurred in connection with our borrowings (including interest, bank fees, legal fees and other transactional expenses arising out of or related to any borrowing or borrowing facility and similar costs), transfer agent fees, federal, state and local taxes and other governmental charges assessed against us, expenses of calculating our net asset value (including the cost and expenses of any independent valuation firm engaged for that purpose and the costs and expenses of the valuation of our portfolio investments performed by our independent auditors in order to comply with applicable Public Company Accounting Oversight Board standards), costs and expenses incurred in connection with arranging or structuring investments and their ongoing operations (including expenses and liabilities related to the formation and ongoing operations of any special purpose entity or entities in connection with an investment), legal costs associated with any requests for exemptive relief, “no-action” positions or other guidance sought from a regulator pertaining to us, costs and expenses relating to any Reorganization (as defined in the LLC Agreement) or liquidation of the Company and any extraordinary expenses (such as litigation expenses and indemnification payments). Notwithstanding the foregoing, in no event will the Company carryforward to future periods the amount by which actual annual Company Expenses for a year exceed the 12.5 basis point limit for more than three years from the date on which such expenses were reimbursed.

“Adviser Operating Expenses” means overhead and operating and administrative expenses incurred by or on behalf of the Adviser or any of its affiliates, including us, in connection with maintaining and operating the Adviser’s office, including salaries and other compensation (including compensation due to its officers), rent, routine office equipment expense and liability and insurance premiums (other than those incurred in maintaining fidelity bonds and Indemnitee insurance policies), in furtherance of providing supervisory investment management services for us. Adviser Operating Expenses include any expenses incurred by the Adviser or its affiliates in connection with the Adviser’s registration as an investment adviser under the Investment Advisers Act of 1940, as amended, or with its compliance as a registered investment adviser thereunder.

All Adviser Operating Expenses and all our expenses that we will not bear, as set forth above, will be borne by the Adviser or its affiliates.

In connection with borrowings, our lenders require us to pledge assets, Commitments and/or the right to draw down on Commitments. In this regard, the subscription agreement entered into with each of our investors contractually obligates each investor to fund its respective Commitments in order to pay amounts that may become due under any borrowings or other financings or similar obligations.

We expensed organization costs totaling $0.7 million (net of $0.4 million in Adviser reimbursement) since our inception through December 31, 2018. Offering costs totaling $0.6 million (net of $0.3 million in Adviser reimbursement) was charged directly to Members’ Capital on December 31, 2018. No additional organization and offering costs were incurred subsequent to December 31, 2018. We did not bear more than an amount equal to 10 basis points of the aggregate capital commitments for organization and offering expenses.

Critical Accounting Policies and Estimates

Investments at Fair Value

Investments which we hold for which market quotes are not readily available or are not considered reliable are valued at fair value and approved by the Board of Directors (the “Board”) based on similar instruments, internal assumptions and the weighting of the best available pricing inputs.

Fair Value Hierarchy: Assets and liabilities are classified by us into three levels based on valuation inputs used to determine fair value:

Level 1 values are based on unadjusted quoted market prices in active markets for identical assets.

Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs.

Level 3 values are based on significant unobservable inputs that reflect our determination of assumptions that market participants might reasonably use in valuing the assets.

Level 1 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:

Equity, (Level 1), generally includes common stock valued at the closing price on the primary exchange in which the security trades.

Level 2 Assets (Investments): The valuation techniques and significant inputs used to determine fair value are as follows:

Equity, (Level 2), generally includes warrants valued using quotes for comparable investments.

Investment Activity

As of September 30, 2021, our portfolio consisted of 55 debt investments and 9 equity investments. Based on fair values as of September 30, 2021, our portfolio was 97.7% invested in debt investments which were mostly senior secured term loans. The remaining 2.3% represented our equity investments, which were comprised of common stock, preferred stock, membership interests and warrants.

As of December 31, 2020, our portfolio consisted of 60 debt investments and 11 equity investments. Based on fair values as of December 31, 2020, our portfolio was 98.7% invested in debt investments which were mostly senior secured term loans. The remaining 1.3% represented our equity investments, which were comprised of common stock, preferred stock and warrants.

We had no debt investments on non-accrual status as of September 30, 2021 and December 31, 2020.

The table below describes our debt and equity investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets by industry as of September 30, 2021:


Industry	Percent of Total Investments
Aerospace & Defense		11%
Textiles, Apparel & Luxury Goods		6%
Software		6%
Consumer Durables & Apparel		6%
Hotels, Restaurants & Leisure		6%
Energy Equipment & Services		6%
Commercial Services & Supplies		5%
Beverages		4%
Personal Products		4%
Household & Personal Products		4%
Household Products		4%
Media		4%
Household Durables		4%
Publishing		3%
Health Care Technology		3%
Capital Goods		3%
Information Technology Services		3%
Consumer Services		3%
Chemicals		3%
Packaging		2%
Construction & Engineering		2%
Auto Components		2%
Food Products		2%
Air Freight & Logistics		1%
Commercial & Professional Services		1%
Internet & Direct Marketing Retail		1%
Construction Materials		1%

Total		100%

Interest income, including interest income paid-in-kind, was $39.2 million and $34.8 million for the three months ended September 30, 2021 and 2020, respectively. We also earned $0.2 million and $0 in other fee income during the three months ended September 30, 2021 and 2020, respectively.

Interest income, including interest income paid-in-kind, was $120.0 million and $104.5 million for the nine months ended September 30, 2021 and 2020, respectively. We also earned $0.4 million and $0.2 million in other fee income during the nine months ended September 30, 2021 and 2020, respectively.

Results of Operations

Our operating results for the three and nine months ended September 30, 2021 and 2020 were as follows (dollar amounts in thousands):


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

	2021		2020		2021		2020

Total investment income	$	39,466	$	34,814	$	120,364	$	104,695
Net expenses		17,084		10,580		68,254		23,344

Net investment income		22,382		24,234		52,110		81,351

Net realized (loss) gain on investments		(210)		-		1,716		1,943
Net change in unrealized appreciation/depreciation on investments		6,165		21,505		27,287		(54,331	)

Net increase in Members’ Capital from operations	$	28,337	$	45,739	$	81,113	$	28,963

Total investment income

Total investment income for the three months ended September 30, 2021 and 2020 was $39.5 million and $34.8 million, respectively. Total investment income for the nine months ended September 30, 2021 and 2020 was $120.4 million and $104.7 million, respectively. The increases in total investment income during the three and nine months ended September 30, 2021 compared to the three and nine months ended September 30, 2020, respectively, were due to our investment portfolio’s larger size as of September 30, 2021 (total amortized cost of $1,413.7 million as of September 30, 2021 versus $1,316.4 million as of September 30, 2020), in addition to none of our debt investments being placed on non-accrual as of September 30, 2021 versus one debt investment on non-accrual as of September 30, 2020.

Net investment income

Net investment income for the three months ended September 30, 2021 and 2020 was $22.4 million and $24.2 million, respectively. The decrease in our net investment income during the three months ended September 30, 2021 compared the three months ended September 30, 2020 was primarily due to the increase in total expenses during the three months ended September 30, 2021, partially offset by the increase in total investment income. The increase in total expenses was primarily attributable to the increase in incentive fees during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, as a result of our internal rate return (“IRR”) exceeding the hurdle rate stipulated in our Advisory Agreement (the “hurdle rate”) during the current quarter. We recorded no incentive fees during the three months ended September 30, 2020 as our IRR was below the hurdle rate.

Net investment income for the nine months ended September 30, 2021 and 2020 was $52.1 million and $81.4 million, respectively. The decrease in our net investment income during the nine months ended September 30, 2021 compared to our net investment income during the nine months ended September 30, 2020 was primarily due to $35.6 million of incentive fees accrued during the nine months ended September 30, 2021, compared to the $12.1 million reversal of previously accrued incentive fees during the nine months ended September 30, 2020. The incentive fee accrual during the current year-to-date period is a result of our IRR exceeding the hurdle rate. The reversal of previously accrued incentive fees during the nine months ended September 30, 2020 was a result of our IRR falling below the hurdle rate during the nine months ended September 30, 2020. The increase in incentive fees during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was partially offset by higher total investment income during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Expenses for the three and nine months ended September 30, 2021 and 2020 were as follows (dollar amounts in thousands):


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Expenses
Incentive fees	$	7,085	$	-	$	35,600	$	(12,148)
Management fees		5,415		4,948		16,140		14,858
Interest and credit facilities expenses		3,793		4,886		12,742		18,095
Professional fees		264		225		1,023		1,014
Administrative fees		373		337		1,108		1,048
Directors’ fees		98		97		301		293
Other expenses		56		87		1,340		184

Total expenses	$	17,084	$	10,580	$	68,254	$	23,344

Our total expenses were $17.1 million and $10.6 million for the three months ended September 30, 2021 and 2020, respectively. Our total expenses included management fees attributed to the Adviser of $5.4 million and $4.9 million; and incentive fees of $7.1 million and $0, for the three months ended September 30, 2021 and 2020, respectively.

The increase in total expenses during the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was primarily due to incentive fees that were accrued during the current quarter as a result of our IRR exceeding the hurdle rate. Total expenses during the three months ended September 30, 2020 did not include an accrual for incentive fees as our IRR was below the hurdle rate. The increase in incentive fees during the three months ended September 30, 2021 was partially offset by lower interest and credit facilities expenses during the current quarter compared to the three months ended September 30, 2020, due to lower outstanding balances and interest rates on our credit facilities.

Our total expenses were $68.3 million and $23.3 million for the nine months ended September 30, 2021 and 2020, respectively. Our total expenses included management fees attributed to the Adviser of $16.1 million and $14.9 million; and incentive fees of $35.6 million and ($12.1), for the nine months ended September 30, 2021 and 2020, respectively.

Similar to the three months ended September 30, 2021, the increase in total expenses during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was primarily due to incentive fees that were accrued during the current year-to-date period as a result of our IRR exceeding the hurdle rate. In contrast, total expenses during the nine months ended September 30, 2020 included a $12.1 million reversal of previously accrued incentive fees, in conjunction with our IRR falling below the hurdle rate during the nine months ended September 30, 2020. This increase was partially offset by lower interest and credit facilities expenses during the current year-to-date period compared to the nine months ended September 30, 2020, due to lower interest rates on our credit facilities.

Net realized (loss) gain on investments

Our net realized (loss) gain on investments for the three months ended September 30, 2021 and 2020 was ($0.2) million and $0, respectively. Our net realized loss during the three months ended September 30, 2021 was primarily attributable to our partial disposition of our delayed draw term loan to Retail Services WIS Corporation which resulted in a realized loss of $0.2 million.

Our net realized gain on investments for the nine months ended September 30, 2021 and 2020 was $1.7 million and $1.9 million, respectively. Our net realized gain during the nine months ended September 30, 2021 was primarily attributable to our partial or full dispositions of the following investments (dollar amounts in thousands):


Issuer	Investment	Realized Gain (Loss)

Production Resources Group, LLC	Class A Units	$	3,117
SMTC Corporation	Warrants		984
PSS Industrial Group Corp.	Term Loan		(2,428)
All others	Various		43

Net realized gain		$	1,716

Our net realized gain during the nine months ended September 30, 2020 was primarily attributable to our partial or full dispositions of the following investments (dollar amounts in thousands):


Issuer	Investment	Realized Gain

Powerhouse Intermediate, LLC	Term Loan	$	346
AVI-SPL, Inc.	Term Loan		331
Westrock Coffee Company, LLC	Term Loan		306
Gold Star Foods Inc.	Term Loan		270
AMCP Staffing Intermediate Holdings III, LLC	Term Loan		344
Dura-Supreme Holdings, Inc.	Term Loan		170
Hunter Fan Company	Term Loan		78
Geon Performance Solutions, LLC	Term Loan		53
Mondee Holdings, LLC	Term Loan		45


Total realized gain		$	1,943

Net change in unrealized appreciation/depreciation on investments

Our net change in unrealized appreciation/depreciation investments for the three months ended September 30, 2021 and 2020 was $6.2 million and $21.5 million, respectively. Our net change in unrealized appreciation/depreciation for the three months ended September 30, 2021 was primarily due to the following investments (dollar amounts in thousands):


Issuer	Investment	Change in Unrealized Appreciation/Depreciation

Keeco Holdings, LLC	Term Loan	$	(1,808)
Karman Holdings LLC (fka Spaceco Holdings LLC)	Term Loan		(1,307)
Bendon Inc.	Term Loan		(1,002)
Shipston Group U.S. Inc.	Term Loans		(899)
Voyant Beauty Holdings, Inc.	Term Loan		(888)
Westrock Coffee Company, LLC	Term Loan		(778)
Red Lobster Management, LLC	Term Loan		(706)
Navistar Defense, LLC	Term Loan		(630)
UniTek Acquisition, Inc.	Term Loans		522
Rocky Brands, Inc.	Term Loan		978
Carolina Atlantic Roofing Supply LLC	Term Loan		1,243
Retail Services WIS Corporation	Term Loans		3,315
Shelterlogic Group Holdings, Inc.	Common Stock		8,019
All others	Various		106


Net change in unrealized appreciation/depreciation		$	6,165

Our net change in unrealized appreciation/depreciation for the three months ended September 30, 2020 was primarily due to the following investments (dollar amounts in thousands):


Issuer	Investment	Change in Unrealized Appreciation/ Depreciation

Slogic Holdings Corp.	Term Loan	$	5,337
Innerworkings, Inc.	Term Loan		2,304
Westrock Coffee Company, LLC	Term Loan		2,958
Keeco Holdings, LLC	Term Loan		1,887
Voyant Beauty Holdings, Inc.	Term Loan		1,843
Verdesian Life Sciences, LLC	Term Loan		1,585
Greenfield World Trade, Inc.	Term Loan		1,450
Heligear Acquisition Co.	Term Loan		1,407
Mondee Holdings, LLC	Term Loan		1,356
Akumin, Inc.	Term Loan		1,210
Need It Now Delivers, LLC	Term Loans		1,166
Centric Brands Inc.	Term Loan		1,155
Torrid LLC	Term Loan		1,115
Winsight, LLC	Term Loan		(2,056)
PSS Industrial Group Corp.	Term Loan		(2,291)
All others	Various		1,079


Net change in unrealized appreciation/depreciation		$	21,505

Our net change in unrealized appreciation/depreciation during the three months ended September 30, 2020 was affected by significant business disruptions and various other consequences experienced by our portfolio companies due to the uncertainty and economic volatility caused by COVID-19, in addition to other business conditions unique to our respective issuers. However, credit spreads tightened during the three months ended September 30, 2020 compared to the three months ended June 30, 2020 and in addition, some of our portfolio companies began to see performance improvements which, together, elevated valuations during the quarter ended September 30, 2020.

Our net change in unrealized appreciation/depreciation investments for the nine months ended September 30, 2021 and 2020 was $27.3 million and ($54.3) million, respectively. Our net change in unrealized appreciation/depreciation for the nine months ended September 30, 2021 was primarily due to the following investments (dollar amounts in thousands):


Issuer	Investment	Change in Unrealized Appreciation/Depreciation

Shelterlogic Group Holdings, Inc.	Common Stock	$	15,377
Greenfield World Trade, Inc.	Term Loan		5,090
PSS Industrial Group Corp.	Term Loan		3,384*
Retail Services WIS Corporation	Term Loans		3,299
Obagi Cosmeceuticals LLC	Term Loan		3,265
Rocky Brands, Inc.	Term Loan		1,860
Winsight, LLC	Term Loan		1,593
UniTek Acquisition, Inc.	Term Loans		1,354
Carolina Atlantic Roofing Supply LLC	Term Loan		1,180
Red Lobster Management, LLC	Term Loan		1,006
Voyant Beauty Holdings, Inc.	Term Loan		(1,098)
Bendon Inc.	Term Loan		(1,224)
Columbia Helicopters Inc.	Term Loan		(1,350)
Verdesian Life Sciences, LLC	Term Loan		(1,686)*
Production Resource Group, LLC	Class A Units		(1,831)*
Navistar Defense, LLC	Term Loan		(2,052)
Hoover Group, Inc.	Term Loan		(2,136)
All others	Various		1,256


Net change in unrealized appreciation/depreciation		$	27,287

Reversals of previously recognized unrealized depreciation (appreciation). Recognized during the nine months ended September 30, 2021 as realized (gains) losses and/or accelerated original issue discount.

Our net change in unrealized appreciation/depreciation for the nine months ended September 30, 2020 was due to the following investments (dollar amounts in thousands):


Issuer	Investment	Change in Unrealized Appreciation/ Depreciation

Production Resource Group, LLC	Term Loan	$	(14,378)
Mondee Holdings, LLC	Term Loan		(10,184)
PSS Industrial Group Corp.	Term Loan		(4,803)
Slogic Holdings Corp.	Term Loan		(5,187)
Winsight, LLC	Term Loan		(4,105)
UniTek Acquisition, Inc.	Term Loans		(3,875)
Centric Brands Inc.	Term Loan		(3,663)
United Poly Systems Holding, Inc.	Term Loan		(2,078)
Greenfield World Trade, Inc.	Term Loan		(2,952)
Shipston Group U.S. Inc.	Term Loans		(1,352)
FM Restaurants Holdco, LLC	Term Loan		(1,184)
Westrock Coffee Company, LLC	Term Loan		1,666
Voyant Beauty Holdings, Inc.	Term Loan		1,843
All others	Various		(4,079)


Net change in unrealized appreciation/depreciation		$	(54,331)

Our net change in unrealized appreciation/depreciation during the nine months ended September 30, 2020 was affected by significant business disruptions and various other consequences experienced by our portfolio companies due to the uncertainty and economic volatility caused by COVID-19, in addition to other business conditions unique to our respective issuers.

Net increase (decrease) in Members’ Capital from operations

Our net increase in Members’ Capital from operations during the three months ended September 30, 2021 and 2020 was $28.3 million and $45.7 million, respectively. The relative decrease in Members’ Capital from operations during the three months ended September 30, 2021 compared to the increase during three months ended September 30, 2020 was primarily due to lower net change in unrealized appreciation/depreciation during the current quarter which, as previously described, was a net appreciation of $6.4 million, compared to a net appreciation of $21.5 million during the three months ended September 30, 2020.

Our net increase in Members’ Capital from operations during the nine months ended September 30, 2021 and 2020 was $81.1 million and $29.0 million, respectively. The increase in Members’ Capital during the during the nine months ended September 30, 2021 compared to the decrease during nine months ended September 30, 2020 was primarily due to our net change in unrealized appreciation/depreciation during the nine months ended September 30, 2021 which, as previously described, was a net appreciation of $27.3 million, compared to a net depreciation of ($54.3) million during the nine months ended September 30, 2020. This was partially offset by the increase in our total expenses during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Financial Condition, Liquidity and Capital Resources

On April 13, 2018, we completed the first closing of the sale of our Units to persons not affiliated with the Adviser. We also commenced operations during the second quarter of fiscal year 2018. On January 14, 2019, we completed our fourth and final closing sale of our Units. We generate cash from (1) drawing down capital in respect of Units, (2) cash flows from investments and operations and (3) borrowings from banks or other lenders.

Our primary use of cash is for (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including expenses, the Management Fee, the Incentive Fee, and any indemnification obligations), (3) debt service of any borrowings and (4) cash distributions to the Unitholders.

As of September 30, 2021, aggregate Commitments, Undrawn Commitments, percentage of Commitments funded and the number of subscribed for Units of the Company were as follows (dollar amounts in thousands):


	September 30, 2021

Commitments	$	1,373,401
Undrawn commitments	$	165,401
Percentage of commitments funded		88.0%
Units		13,734,010

On May 10, 2018, we entered into a Revolving Credit Agreement (the “Natixis Credit Agreement”) among the Company, as borrower, and Natixis, New York Branch (“Natixis”), as administrative agent and the committed lenders, conduit lenders and funding agents. The Natixis Credit Agreement provided for a revolving credit line (the “Natixis Revolving Credit Facility”) of up to $150.0 million (the “Natixis Maximum Commitment”), subject to the lesser of the “Natixis Borrowing Base” assets or the Natixis Maximum Commitment. The Natixis Borrowing Base assets equal the sum of a percentage of unfunded commitments from certain classes of eligible investors in the Company (the “Natixis Available Commitment”). The Natixis Revolving Credit Facility is generally secured by the Natixis Borrowing Base assets.

The Natixis Maximum Commitment may be periodically increased in amounts designated by the Company, up to an aggregate amount of $1 billion. The maturity date of the Natixis Credit Agreement was May 10, 2021. On May 10, 2021, the Company exercised its option to extend the maturity date of the Natixis Credit Agreement to May 9, 2022. The Company has one more available option to extend the Natixis Credit Agreement maturity date for a term of up to 364 days after the maturity date per such extension. Borrowings under the Natixis Credit Agreement bear interest at a rate equal to either (a) a base rate calculated in a customary manner plus 0.75% or (b) an adjusted eurodollar rate calculated in a customary manner plus 1.75%. As of December 31, 2020, the Natixis Maximum Commitment was $280.0 million. On March 10, 2021, we further reduced the Natixis Maximum Commitment to $250.0 million.

terminated, and any outstanding amounts thereunder may become due and payable, should we fail to satisfy certain covenants. As of September 30, 2021, we were in compliance with such covenants.


Natixis Revolving Credit Facility	Maximum Commitment		Borrowings Outstanding		Available Amount⁽¹⁾

As of September 30, 2021	$	250,000	$	45,000	$	89,444
As of December 31, 2020	$	280,000	$	172,000	$	85,230

(1)	The amount available considers any limitations related to the debt facility borrowing.

On January 29, 2019, TCW DL VII Financing LLC (the “Borrower” or “TCW DL VII Financing”), a newly-formed, wholly-owned, special purpose financing subsidiary of ours, entered into a senior secured credit facility (the “PNC Credit Facility” and together with the Natixis Revolving Credit Facility, the “Credit Facilities”) pursuant to a credit and security agreement (the “PNC Credit Agreement”) with PNC Bank, National Association (“PNC”), as facility agent, the lenders from time to time party thereto, and State Street Bank and Trust Company, as collateral agent.

Under the PNC Credit Facility, the lenders have agreed to extend credit to the Borrower in an aggregate principal amount of up to $400.0 million of revolving and term loans (the “PNC Maximum Commitment”), subject to compliance with a borrowing base (the “PNC Borrowing Base”). The PNC Maximum Commitment may be periodically increased in amounts designated by the Borrower up to an aggregate principal amount of $900.0 million, subject to lender consent and obtaining commitments for the increase. The Borrower may make borrowings of (i) a revolving loan (the “PNC Revolving Credit Facility” and together with the Natixis Revolving Credit Facility, the “Revolving Credit Facilities”) under the PNC Credit Facility during the period commencing January 29, 2019 and ending on January 29, 2022 and (ii) a term loan (the “PNC Term Loan”) under the PNC Credit Facility during the period which commenced on January 29, 2019 and ended on January 29, 2020, unless, in the case of (i) and (ii), there is an earlier termination of the PNC Credit Facility or event of default thereunder. The PNC Credit Facility will mature on January 29, 2024. Loans under the PNC Credit Facility bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) three-month LIBOR plus the facility margin of 2.30% per annum or (ii) the Base Rate plus the facility margin of 2.30% per annum.

On April 11, 2019, the Borrower amended and restated the PNC Credit Agreement (as amended, the “Amended PNC Credit Agreement”) for the PNC Credit Facility. The Amended PNC Credit Agreement, among other things, (a) increased the total commitments under the PNC Credit Facility from $400.0 million to $600.0 million (the “Amended PNC Maximum Commitment”) and (b) made certain modifications to the calculation of the borrowing base under the prior facility, including the eligibility requirements of collateral obligations pledged under the PNC Credit Facility and loan portfolio concentration limits.

On March 17, 2020, the Borrower further amended and restated the Amended PNC Credit Agreement (as further amended the “Second Amended PNC Credit Agreement”). The Second Amended PNC Credit Agreement, among other things, increased the total commitments under the PNC Credit Facility from $600.0 million to $795.0 million (the “Second Amended PNC Maximum Commitment”). The Second Amended PNC Maximum Commitment may be periodically increased in amounts designated by the Borrower up to an aggregate principal amount of $900.0 million, subject to lender consent and obtaining commitments for the increase. The Borrower may make borrowings of (i) revolving loans under the PNC Credit Facility during the period commencing January 29, 2019 and ending on January 29, 2022 and (ii) term loans under the PNC Credit Facility during the period commencing January 29, 2019 and ended on March 17, 2020, unless, there is an earlier termination of the PNC Credit Facility or event of default thereunder. The PNC Credit Facility will mature on January 29, 2024. Loans under the PNC Credit Facility will bear interest at a fluctuating rate of interest per annum equal to, at the Borrower’s option, either (i) three-month LIBOR plus the facility margin of 2.30% per annum or (ii) the Base Rate plus the facility margin of 2.30% per annum. On June 19, 2020, the Second Amended PNC Maximum Commitment was increased from $795.0 million to $825.0 million.

PNC Credit Facility also includes events of default that are customary for similar credit facilities. As of September 30, 2021, the Borrower was in compliance with such covenants.

Borrowings of the Borrower are non-recourse to us but are consolidated in our consolidated financial statements and considered our borrowings for purposes of complying with the asset coverage requirements under the Investment Company Act of 1940, as amended.

As of September 30, 2021 and December 31 2020, the PNC Borrowing Base assets were less than the Second Amended and Amended PNC Maximum Commitment. A summary of amounts outstanding and available under the PNC Credit Facility as of September 30, 2021 and December 31, 2020 is as follows (dollar amounts in thousands):


PNC Credit Facility	Maximum Commitment		Borrowings Outstanding		Available Amount⁽¹⁾

As of September 30, 2021	$	825,000	$	413,000	$	348,386
As of December 31, 2020	$	825,000	$	413,000	$	334,734

(1)	The amount available considers any limitations related to the debt facility borrowing.

Borrowings under the PNC Credit Facility as of September 30, 2021 and December 31, 2020 consisted of $165.5 million from the PNC Revolving Credit Facility (i.e., revolving line of credit) and $247.5 million of PNC Term Loan.

We incurred financing costs of $3.4 million and $4.4 million, in connection with the Natixis Credit Agreement and the PNC Credit Agreement, respectively. In addition, we incurred an additional $2.1 million and $1.5 million in financing costs in connection with the Amended and Second Amended PNC Credit Agreement, respectively. Lastly, we incurred $0.3 million in financing costs associated with the June 19, 2020 upsize of the PNC Credit Facility.

We incurred $0.6 million in fees associated with the May 10, 2021 extension of the Natixis Credit Agreement. We recorded most of the costs associated with the Revolving Credit Facilities as deferred financing costs on our Consolidated Statements of Assets and Liabilities and the costs are being amortized over the respective lives of the Natixis Revolving Credit Facility and PNC Revolving Credit Facility. As of September 30, 2021 and December 31, 2020, $3.3 million and $4.3 million, respectively, of such deferred financing costs had yet to be amortized. Costs associated with the PNC Term Loan are deferred and amortized over the term of the PNC Term Loan. Such deferred financing costs are netted against the carrying value of the PNC Term Loan on our Consolidated Statements of Assets and Liabilities. As of September 30, 2021 and December 31, 2020, $1.2 million and $1.6 million, respectively, of such deferred financing costs have yet to be amortized.

The summary information regarding the Credit Facilities for the three and nine months ended September 30, 2021 and 2020 was as follows (dollar amounts in thousands):


	Three Months Ended September 30,					Nine Months Ended September 30,

	2021		2020			2021		2020

Credit Facilities interest expense	$	2,638	$	3,655		$	9,178	$	14,530
Unused commitment fees		518		438			1,380		1,138
Administrative fees		—		—			100		100
Amortization of deferred financing costs		637		793			2,084		2,327

Total	$	3,793	$	4,886		$	12,742	$	18,095

Weighted average interest rate		2.43%		2.44	%		2.34%		3.09	%
Average outstanding balance	$	425,098	$	585,000		$	516,905	$	617,858

In order to finance certain investment transactions, we may, from time to time, enter into repurchase agreements with Macquarie US Trading LLC (“Macquarie”), whereby we sell to Macquarie an investment that we hold and concurrently enter into an agreement to repurchase the same investment at an agreed-upon price at a future date, not to exceed 90-days from the date it was sold (the “Macquarie Transaction”). These Macquarie Transactions are accounted for as secured borrowings. Accordingly, the investment financed by the Macquarie Transaction remains on our Consolidated Statements of Assets and Liabilities as an asset, and we record a liability to reflect our repurchase obligation to Macquarie (the “Repurchase Obligation”). The Repurchase obligation is secured by the respective investment that is the subject of the repurchase agreement.

No repurchase agreements were entered into or settled during the three months ended September 30, 2021. During the nine months ended September 30, 2021, we entered into and settled a repurchase agreement for which we incurred interest expense of $0.5 million.

During the three and nine months ended September 30, 2020, we entered into a repurchase agreement collateralized by our term loan to AGY Holdings Corp. Interest under this Repurchase Obligation was calculated as “the product of (i) the difference in days between the trade date and the settlement date of the Macquarie Transaction and (ii) 0.00009722,” as stipulated in the repurchase agreement. Interest expense associated with this Repurchase Obligation totaled $0.6 million.

The Company had no outstanding Repurchase Obligations as of September 30, 2021 and December 31, 2020.

We had the following unfunded commitments and unrealized depreciation by investment as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):


		September 30, 2021				December 31, 2020
Unfunded Commitments	Maturity/ Expiration	Amount		Unrealized Depreciation		Amount		Unrealized Depreciation
AGY Holdings Corp.	September 2025	$	7,752	$	-	$	10,854	$	-
Altern Marketing LLC	October 2024		5,217		-		2,473		-
Bendon Inc.	December 2025		7,263		254		8,254		149
Caiman Merger Sub LLC	November 2024		-		-		1,031		-
Centric Brands Inc.	October 2024		1,351		-		2,922		-
Encompass Digital Media, Inc.	September 2023		2,022		-		1,661		28
FM Restaurants Holdco, LLC	November 2023		2,414		-		-		-
GEON Performance Solutions, LLC	October 2024		-		-		2,350		-
Greenfield World Trade, Inc.	December 2021		16,118		-		-		-
Hometown Food Company	August 2023		5,097		-		5,097		-
Karman Holdings LLC (fka Spaceco Holdings LLC)	December 2025		4,261		34		9,364		122
KBP Brands, LLC (fka KBP Investments LLC)	May 2023		16,000		144		15,000		-
Mondee Holdings LLC	December 2024		8,613		-		8,613		-
Obagi Cosmeceuticals LLC	March 2026		11,308		-		-		-
Production Resource Group LLC	October 2021		-		-		1,443		-
Quicken Parent Corp.	April 2023		948		-		948		7
Rapid Displays, Inc.	April 2026		1,770		35		-		-
UniTek Acquisition, Inc.	August 2023		1,714		168		3,214		498
WDE TorcSill Holdings LLC	October 2024		2,108		89		4,564		141
Winsight, LLC	March 2024		4,233		275		-		-

Total		$	98,189	$	999	$	77,788	$	945

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to financial market risks, including changes in interest rates. As of September 30, 2021, 99.5% of our debt investments bore interest based on floating rates, such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate. The interest rates on such investments generally reset by reference to the current market index after one to nine months. As of September 30, 2021, the percentage of our floating rate debt investments that bore interest based on an interest rate floor was 99.4%. Floating rate investments subject to a floor generally reset by reference to the current market index after one to nine months only if the index exceeds the floor.

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, 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. We assess our portfolio companies periodically to determine whether such companies will be able to continue making interest payments in the event that interest rates increase. There can be no assurances that the portfolio companies will be able to meet their contractual obligations at any or all levels of increases in interest rates.

Based on our September 30, 2021 consolidated statement of assets and liabilities, the following table shows the annual impact on net investment income (excluding the related incentive compensation impact) of base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure (dollar amounts in thousands):


	Interest Income			Interest Expense			Net Investment Income (Loss)
Up 300 basis points	$	26,913		$	13,931		$	12,982
Up 200 basis points		12,355			9,287			3,068
Up 100 basis points		821			4,644			(3,823	)
Down 100 basis points		(15	)		(583	)		568
Down 200 basis points		(30	)		(583	)		553
Down 300 basis points		-			(583	)		583

ITEM 4.

CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934). Based on that evaluation, our President and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them to material information relating to us that is required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934.

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K.

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

Sales of unregistered securities

None.

Issuer purchases of equity securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits.

(a) Exhibits



3.1		Certificate of Formation (incorporated by reference to Exhibit 3.1 to a registration on Form 10 filed on September 1, 2017)

3.2		Limited Liability Company Agreement, dated June 29, 2017 (incorporated by reference to Exhibit 3.2 to a registration on Form 10 filed on September 1, 2017)

3.3		Amended and Restated Limited Liability Company Agreement, dated October 2, 2017 (incorporated by reference to Exhibit 3.3 to a registration on Form 10 filed on October 16, 2017)

3.4		Third Amended and Restated Limited Liability Company Agreement, dated as of September 10, 2018 (incorporated by reference to Exhibit 3.6 to the registrant’s Quarterly Report on Form 10-Q filed November 6, 2018).

3.5		Fourth Amended and Restated Limited Liability Company Agreement, dated as of January 14, 2019 (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on January 18, 2019).

10.1		Investment Advisory and Management Agreement dated December 29, 2017 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on January 3, 2018).

10.2		Administration Agreement dated December 29, 2017, by and between TCW Direct Lending VII LLC and TCW Asset Management Company LLC (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on January 3, 2018).

10.3		Amended and Restated Administration Agreement, dated as of September 25, 2018, between TCW Direct Lending VII LLC and TCW Asset Management Company LLC (incorporated by reference to Exhibit 3.7 to the registrant’s Quarterly Report on Form 10-Q filed November 6, 2018).

10.4		Revolving Credit Agreement, dated as of May 10, 2018, among TCW Direct Lending VII LLC, as borrower, and Natixis, New York Branch, as Administrative Agent and Committed Lender (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed on May 14, 2018).

10.5		Credit and Security Agreement, dated as of January 29, 2019, among TCW DL VII Financing LLC, as borrower, PNC Bank, National Association, as facility agent, and State Street Bank and Trust Company, as collateral agent (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on February 4, 2019).

10.6		First Amended and Restated Credit and Security Agreement, dated as of April 11, 2019, among TCW DL VII Financing LLC, as borrower, PNC Bank, National Association, as facility agent, the lenders from time to time party thereto, and State Street Bank and Trust Company, as collateral agent (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on April 16, 2019).

10.7		Second Amended and Restated Credit and Security Agreement, dated as of March 17, 2020, among TCW DL VII Financing LLC, as borrower, PNC Bank, National Association, as facility agent, the lenders from time to time party thereto, and State Street Bank and Trust Company, as collateral agent (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on March 20, 2020).

10.8		Fourth Amendment to Revolving Credit Agreement, dated as of May 10, 2021, among TCW Direct Lending VII LLC, as borrower, and Natixis, New York Branch, as Administrative Agent and Committed Lender (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on May 10, 2021).

10.9		Fifth Amendment to Revolving Credit Agreement, dated as of May 13, 2021, among TCW Direct Lending VII LLC, as borrower, and Natixis, New York Branch, as Administrative Agent and Committed Lender (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on May 10, 2021)

31.1^*		Certification of President Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2^*		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32.1^*		Certification of President Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

32.2^*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

^*	Filed herewith

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: November 8, 2021	TCW DIRECT LENDING VII LLC
	By:	/s/ Richard T. Miller
		Richard T. Miller
		President


Date: November 8, 2021
	By:	/s/ James G. Krause
		James G. Krause
		Chief Financial Officer