ThZeal - The Zeal

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2023

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

Commission File Number: 814-01363

Kayne Anderson BDC, Inc.

Delaware		83-0531326
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

811 Main Street, 14^th Floor, Houston, TX		77002
(Address of principal executive offices)		(Zip Code)

(713) 493-2020

(Registrant’s telephone number, including area code)

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		None		None

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, or a smaller reporting 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 Exchange Act). ☐ Yes ☒ No

As of November 9, 2023, the registrant had 41,603,665 shares of common stock, $0.001 par value per share, issued and outstanding and there was no public market for the registrant’s shares.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Consolidated Financial Statements	1
	Consolidated Statements of Assets and Liabilities as of September 30, 2023 (Unaudited) and December 31, 2022	1
	Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (Unaudited)	2
	Consolidated Statement of Changes in Net Assets for the three and nine months ended September 30, 2023 and 2022 (Unaudited)	3
	Consolidated Statement of Cash Flows for the nine months ended September 30, 2023 and 2022 (Unaudited)	4
	Consolidated Schedule of Investments as of September 30, 2023 (Unaudited) and December 31, 2022	5
	Notes to Consolidated Financial Statements (Unaudited)	18
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	50

PART II.	OTHER INFORMATION	51
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	51
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	52

Signatures		53

Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve substantial known and unknown risks, uncertainties and other factors. Undue reliance should not be placed on such statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about the company, current and prospective portfolio investments, the industry, beliefs and assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “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 control of Kayne Anderson BDC, Inc. (“the Company”) and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including:

●

future operating results;

●

business prospects and the prospects of portfolio companies in which we invest;

●

the ability of our portfolio companies to achieve their objectives;

●

changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets;

●

the ability of KA Credit Advisors, LLC (our “Advisor”) to locate suitable investments and to monitor and administer investments;

●

the ability of the Advisor and its affiliates to attract and retain highly talented professionals;

●

risk associated with possible disruptions in operations or the economy generally;

●

the adequacy of our cash resources, financing sources and working capital;

●

the timing of cash flows, distributions and dividends, if any, from the operations of the companies in which the Company invests;

●

the dependence of the future success on the general economy and its effect on the industries in which the Company invests;

●

the ability to maintain qualification as a business development company (“BDC”) and as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”);

●

the use of borrowed money to finance a portion of the Company’s investments;

●

the adequacy, availability and pricing of financing sources and working capital for the Company;

●

actual or potential conflicts of interest with the Advisor and its affiliates;

●

contractual arrangements and relationships with third parties;

●

the risk associated with an economic downturn, increased inflation, political instability, interest rate volatility, loss of key personnel, and the illiquid nature of investments of the Company; and

●

the risks, uncertainties and other factors the Company identifies under “Item 1A. Risk Factors” and elsewhere in this quarterly report on Form 10-Q, as well as in the Company’s annual report on Form 10-K for the year ended December 31, 2022.

We have based the forward-looking statements included in this report on information available to us on the date of this report. We assume no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Although we undertake no obligation to revise or update any forward-looking statements, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the United States Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, registration statements on Form 10, quarterly reports on Form 10-Q and current reports on Form 8-K.

PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements.

Kayne Anderson BDC, Inc.

Consolidated Statements of Assets and Liabilities

(amounts in 000’s, except share and per share amounts)

	September 30, 2023 (Unaudited)			December 31, 2022
Assets:
Investments, at fair value:
Long-term investments (amortized cost of $1,268,376 and $1,147,788)	$	1,277,603		$	1,165,119
Short-term investments (amortized cost of $16,628 and $9,847)		16,628			9,847
Cash and cash equivalents		12,384			8,526
Receivable for principal payments on investments		179			111
Interest receivable		13,718			10,444
Prepaid expenses and other assets		119			347
Total Assets	$	1,320,631		$	1,194,394

Liabilities:
Corporate Credit Facility (Note 6)	$	192,000		$	269,000
Unamortized Corporate Credit Facility issuance costs		(1,917	)		(2,517	)
Revolving Funding Facility (Note 6)		306,000			200,000
Unamortized Revolving Funding Facility issuance costs		(2,432	)		(2,827	)
Subscription Credit Agreement (Note 6)		25,000			108,000
Unamortized Subscription Credit Facility issuance costs		(37	)		(65	)
Notes (Note 6)		75,000			-
Unamortized notes issuance costs		(903	)		-
Payable for investments purchased		-			956
Distributions payable		21,999			15,428
Management fee payable		2,905			2,415
Incentive fee payable		11,692			4,762
Accrued expenses and other liabilities		10,598			7,201
Total Liabilities	$	639,905		$	602,353

Commitments and contingencies (Note 8)

Net Assets:
Common Shares, $0.001 par value; 100,000,000 shares authorized; 41,506,935 and 35,879,291 as of September 30, 2023 and December 31, 2022, respectively, issued and outstanding	$	42		$	36
Additional paid-in capital		668,505			574,540
Total distributable earnings (deficit)		12,179			17,465
Total Net Assets	$	680,726		$	592,041
Total Liabilities and Net Assets	$	1,320,631		$	1,194,394
Net Asset Value Per Common Share	$	16.40		$	16.50

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Statements of Operations

(amounts in 000’s, except share and per share amounts)

(Unaudited)

	For the three months ended September 30,					For the nine months ended September 30,
	2023			2022		2023			2022
Income:
Investment income from investments:
Interest income	$	41,041		$	20,494	$	117,960		$	45,386
Dividend income		156			-		349			-
Total Investment Income		41,197			20,494		118,309			45,386

Expenses:
Management fees		2,905			1,908		8,438			4,732
Incentive fees		2,371			1,230		6,929			2,960
Interest expense		13,871			5,504		38,396			11,325
Professional fees		189			166		482			466
Directors fees		147			107		464			321
Offering costs		-			-		-			29
Other general and administrative expenses		345			345		1,216			961
Total Expenses		19,828			9,260		55,925			20,794
Net Investment Income (Loss)		21,369			11,234		62,384			24,592

Realized and unrealized gains (losses) on investments
Net realized gains (losses):
Investments		-			47		-			70
Total net realized gains (losses)		-			47		-			70
Net change in unrealized gains (losses):
Investments		(7,497	)		3,317		(8,103	)		3,127
Total net change in unrealized gains (losses)		(7,497	)		3,317		(8,103	)		3,127
Total realized and unrealized gains (losses)		(7,497	)		3,364		(8,103	)		3,197

Net Increase (Decrease) in Net Assets Resulting from Operations	$	13,872		$	14,598	$	54,281		$	27,789

Per Common Share Data:
Basic and diluted net investment income per common share	$	0.53		$	0.38	$	1.62		$	0.98
Basic and diluted net increase in net assets resulting from operations	$	0.34		$	0.49	$	1.41		$	1.10
Weighted Average Common Shares Outstanding - Basic and Diluted		40,499,327			29,530,036		38,461,385			25,177,005

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Statements of Changes in Net Assets

(amounts in 000’s)

(Unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
	2023			2022			2023			2022
Increase (Decrease) in Net Assets Resulting from Operations:
Net investment income (loss)	$	21,369		$	11,234		$	62,384		$	24,592
Net realized gains (losses) on investments		-			47			-			70
Net change in unrealized gains (losses) on investments		(7,497	)		3,317			(8,103	)		3,127
Net Increase (Decrease) in Net Assets Resulting from Operations		13,872			14,598			54,281			27,789

Decrease in Net Assets Resulting from Stockholder Distributions
Dividends and distributions to stockholders		(21,999	)		(7,065	)		(59,567	)		(13,168	)
Net Decrease in Net Assets Resulting from Stockholder Distributions		(21,999	)		(7,065	)		(59,567	)		(13,168	)

Increase in Net Assets Resulting from Capital Share Transactions
Issuance of common shares		40,575			125,000			90,575			193,582
Reinvestment of distributions		1,352			1,431			3,396			3,555
Net Increase in Net Assets Resulting from Capital Share Transactions		41,927			126,431			93,971			197,137
Total Increase (Decrease) in Net Assets		33,800			133,964			88,685			211,758
Net Assets, Beginning of Period		646,926			389,763			592,041			311,969
Net Assets, End of Period	$	680,726		$	523,727		$	680,726		$	523,727

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Statements of Cash Flows

(amounts in 000’s)

(Unaudited)

	For the nine months ended September 30,
	2023			2022

Cash Flows from Operating Activities:
Net increase (decrease) in net assets resulting from operations	$	54,281		$	27,789
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:
Net realized (gains)/losses on investments		-			(70	)
Net change in unrealized (gains)/losses on investments		8,103			(3,127	)
Net accretion of discount on investments		(6,760	)		(3,287	)
Sales (purchases) of short-term investments, net		(6,781	)		(1,084	)
Purchases of portfolio investments		(217,836	)		(468,799	)
Proceeds from sales of investments and principal repayments		105,319			89,694
Paid-in-kind interest from portfolio investments		(1,310	)		-
Amortization of deferred financing cost		1,936			1,533
Increase/(decrease) in operating assets and liabilities:
(Increase)/decrease in interest and dividends receivable		(3,274	)		(5,820	)
(Increase)/decrease in deferred offering costs		-			29
(Increase)/decrease in receivable for principal payments on investments		(68	)		(273	)
(Increase)/decrease in prepaid expenses and other assets		228			(9	)
Increase/(decrease) in payable for investments purchased		(956	)		-
Increase/(decrease) in management fees payable		490			956
Increase/(decrease) in incentive fee payable		6,930			2,960
Increase/(decrease) in accrued organizational and offering costs, net		-			(6	)
Increase/(decrease) in accrued other general and administrative expenses		3,397			2,096
Net cash used in operating activities		(56,301	)		(357,418	)
Cash Flows from Financing Activities:
Borrowings/(payments) on Corporate Credit Facility, net		(77,000	)		202,000
Borrowings on Revolving Funding Facility, net		106,000			200,000
Borrowings/(payments) on Loan and Security Agreement, net		-			(162,000	)
Borrowings/(payments) on Subscription and Credit Agreement, net		(83,000	)		(43,000	)
Payments of debt issuance costs		(1,816	)		(5,700	)
Distributions paid in cash		(49,600	)		(14,228	)
Proceeds from issuance of common shares		90,575			193,582
Proceeds from issuance of Notes		75,000			-
Net cash provided by financing activities		60,159			370,654
Net increase in cash and cash equivalents		3,858			13,236
Cash and cash equivalents, beginning of period		8,526			2,035
Cash and cash equivalents, end of period	$	12,384		$	15,271

Supplemental and Non-Cash Information:
Interest paid during the period	$	32,882		$	8,168
Non-cash financing activities not included herein consisted of reinvestment of dividends	$	3,396		$	3,555

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of September 30, 2023

(amounts in 000’s)

(Unaudited)

			Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company(1)	Investment(2)	Interest Rate	Date	Par		Cost(3)(4)		Value		of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁵⁾
Aerospace & defense
Basel U.S. Acquisition Co., Inc. (IAC) (6)	First lien senior secured revolving loan	11.55% (S + 6.00%)	12/5/2028	$	-	$	-	$	-		0.0	%
	First lien senior secured loan	11.55% (S + 6.00%)	12/5/2028		18,541		18,095		18,634		2.7	%
Fastener Distribution Holdings, LLC	First lien senior secured loan	12.54% (S + 7.00%)	10/1/2025		20,546		20,083		20,597		3.0	%
	First lien senior secured delayed draw loan	12.54% (S + 7.00%)	10/1/2025		9,121		9,020		9,144		1.3	%
Precinmac (US) Holdings, Inc.	First lien senior secured loan	11.52% (S + 6.00%)	8/31/2027		5,366		5,290		5,232		0.8	%
	First lien senior secured delayed draw loan	11.42% (S + 6.00%)	8/31/2027		1,105		1,089		1,078		0.2	%
					54,679		53,577		54,685		8.0	%
Automobile components
Speedstar Holding LLC	First lien senior secured loan	12.82% (S + 7.25%)	1/22/2027		6,028		5,934		6,073		0.9	%
	First lien senior secured delayed draw loan	12.81% (S + 7.25%)	1/22/2027		272		265		274		0.0	%
Vehicle Accessories, Inc.	First lien senior secured loan	10.90% (S + 5.25%)	11/30/2026		21,065		20,802		21,065		3.1	%
	First lien senior secured revolving loan	10.90% (S + 5.25%)	11/30/2026		-		-		-		0.0	%
					27,365		27,001		27,412		4.0	%
Biotechnology
Alcami Corporation (Alcami)	First lien senior secured delayed draw loan	12.42% (S + 7.00%)	6/30/2024		-		-		-		0.0	%
	First lien senior secured revolving loan	12.42% (S + 7.00%)	12/21/2028		-		-		-		0.0	%
	First lien senior secured loan	12.42% (S + 7.00%)	12/21/2028		11,647		11,206		11,880		1.7	%
					11,647		11,206		11,880		1.7	%
Building products
Eastern Wholesale Fence	First lien senior secured loan	13.54% (S + 8.00%)	10/30/2025		20,271		19,821		20,069		2.9	%
	First lien senior secured revolving loan	13.54% (S + 8.00%)	10/30/2025		368		363		365		0.1	%
					20,639		20,184		20,434		3.0	%
Capital Markets
Atria Wealth Solutions, Inc.	First lien senior secured loan	12.15% (S + 6.50%)	2/29/2024		5,099		5,085		5,099		0.7	%
	First lien senior secured delayed draw loan	12.15% (S + 6.50%)	2/29/2024		3,227		3,215		3,227		0.5	%
					8,326		8,300		8,326		1.2	%
Chemicals
FAR Technologies Holdings, Inc.(f/k/a Cyalume Technologies Holdings, Inc.)	First lien senior secured loan	10.65% (S + 5.00%)	8/30/2024		1,274		1,270		1,274		0.2	%
Fralock Buyer LLC	First lien senior secured loan	11.15% (S + 5.50%)	4/17/2024		11,660		11,612		11,602		1.7	%
	First lien senior secured revolving loan	11.15% (S + 5.50%)	4/17/2024		349		349		348		0.0	%
Shrieve Chemical Company, LLC	First lien senior secured loan	11.80% (S + 6.38%)	12/2/2024		583		576		583		0.1	%
	First lien senior secured loan	11.80% (S + 6.38%)	12/2/2024		3,419		3,397		3,419		0.5	%
USALCO, LLC	First lien senior secured loan	11.65% (S + 6.00%)	10/19/2027		19,036		18,710		19,036		2.8	%
	First lien senior secured revolving loan	11.43% (S + 6.00%)	10/19/2026		1,144		1,113		1,144		0.2	%
					37,465		37,027		37,406		5.5	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of September 30, 2023

(amounts in 000’s)

(Unaudited)

		Interest	Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company(1)	Investment(2)	Rate	Date	Par		Cost(3)(4)		Value		of Net Assets
Commercial services & supplies
Advanced Environmental Monitoring (7)	First lien senior secured loan	13.05% (S + 7.50%)	1/29/2026		10,158		9,975		10,260		1.5	%
Allentown, LLC	First lien senior secured loan	11.42% (S + 6.00%)	4/22/2027		7,605		7,550		7,567		1.1	%
	First lien senior secured delayed draw loan	11.42% (S + 6.00%)	4/22/2027		1,374		1,367		1,367		0.2	%
	First lien senior secured revolving loan	13.50% (P + 5.00%)	4/22/2027		561		557		558		0.1	%
American Equipment Holdings LLC	First lien senior secured loan	11.45% (S + 6.00%)	11/5/2026		20,096		19,842		20,096		2.9	%
	First lien senior secured delayed draw loan	11.45% (S + 6.00%)	11/5/2026		7,351		7,254		7,351		1.1	%
	First lien senior secured delayed draw loan	11.86% (S + 6.00%)	11/5/2026		3,886		3,834		3,886		0.6	%
	First lien senior secured revolving loan	11.83% (S + 6.00%)	11/5/2026		1,770		1,706		1,770		0.2	%
Arborworks Acquisition LLC	First lien senior secured loan (8)(9)		11/9/2026		20,209		19,941		11,265		1.7	%
	First lien senior secured revolving loan (8)(9)		11/9/2026		4,666		4,610		2,601		0.4	%
BLP Buyer, Inc. (Bishop Lifting Products)	First lien senior secured loan	12.02% (S + 6.50%)	2/1/2027		16,249		16,029		16,086		2.4	%
	First lien senior secured loan	12.27% (S + 6.75%)	2/1/2027		6,130		6,006		6,130		0.9	%
	First lien senior secured loan	12.27% (S + 6.75%)	2/1/2027		10,677		10,389		10,677		1.6	%
	First lien senior secured revolving loan	11.92% (S + 6.50%)	2/1/2027		1,264		1,242		1,251		0.2	%
Gusmer Enterprises, Inc.	First lien senior secured loan	12.44% (S + 7.00%)	5/7/2027		4,759		4,689		4,747		0.7	%
	First lien senior secured delayed draw loan	12.43% (S + 7.00%)	5/7/2027		7,972		7,805		7,952		1.2	%
	First lien senior secured revolving loan	12.43% (S + 7.00%)	5/7/2027		-		-		-		0.0	%
PMFC Holding, LLC	First lien senior secured loan	13.02% (S + 7.50%)	7/31/2025		5,576		5,420		5,576		0.8	%
	First lien senior secured delayed draw loan	13.02% (S + 7.50%)	7/31/2025		2,796		2,794		2,796		0.4	%
	First lien senior secured revolving loan	13.03% (S + 7.50%)	7/31/2025		547		547		547		0.1	%
Regiment Security Partners LLC	First lien senior secured loan	15.55% (S + 10.00%)	9/15/2026		6,403		6,322		6,403		0.9	%
	First lien senior secured delayed draw loan	15.55% (S + 10.00%)	9/15/2026		2,615		2,593		2,615		0.4	%
	First lien senior secured revolving loan	15.55% (S + 10.00%)	9/15/2026		1,448		1,425		1,448		0.2	%
					144,112		141,897		132,949		19.6	%
Containers & packaging
Drew Foam Companies, Inc.	First lien senior secured loan	12.79% (S + 7.25%)	11/5/2025		7,320		7,255		7,266		1.1	%
	First lien senior secured loan	12.75% (S + 7.25%)	11/5/2025		20,806		20,509		20,650		3.0	%
FCA, LLC (FCA Packaging)	First lien senior secured loan	11.81% (S + 6.50%)	7/18/2028		18,673		18,406		18,860		2.8	%
	First lien senior secured revolving loan	11.81% (S + 6.50%)	7/18/2028		-		-		-		0.0	%
Innopak Industries, Inc.	First lien senior secured loan	11.17% (S + 5.75%)	3/5/2027		14,963		14,598		14,963		2.2	%
					61,762		60,768		61,739		9.1	%
Diversified telecommunication services
Network Connex (f/k/a NTI Connect, LLC)	First lien senior secured loan	10.29% (S + 4.75%)	11/30/2024		5,209		5,172		5,183		0.8	%
Pavion Corp., f/k/a Corbett Technology Solutions, Inc.	First lien senior secured loan	11.27% (S + 5.75%)	10/29/2027		15,056		14,843		15,056		2.2	%
	First lien senior secured delayed draw loan	11.31% (S + 5.75%)	10/29/2027		9,363		9,297		9,363		1.4	%
	First lien senior secured revolving loan	11.29% (S + 5.75%)	10/29/2027		1,797		1,682		1,797		0.2	%
					31,425		30,994		31,399		4.6	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of September 30, 2023

(amounts in 000’s)

(Unaudited)

		Interest	Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company(1)	Investment(2)	Rate	Date	Par		Cost(3)(4)		Value		of Net Assets
Food products
BC CS 2, L.P. (Cuisine Solutions) (6)	(10)	12.94% (S + 8.00%)	7/8/2028		21,555		21,036		21,555		3.2	%
BR PJK Produce, LLC (Keany)	First lien senior secured loan	11.39% (S + 6.00%)	11/14/2027		29,639		28,985		30,084		4.4	%
	First lien senior secured delayed draw loan	11.39% (S + 6.00%)	5/14/2024		-		-		-		0.0	%
City Line Distributors, LLC	First lien senior secured loan	11.65% (S + 6.00%)	8/31/2028		8,917		8,608		8,917		1.3	%
	First lien senior secured delayed draw loan	11.65% (S + 6.00%)	3/3/2025		-		-		-		0.0	%
	First lien senior secured revolving loan	11.65% (S + 6.00%)	8/31/2028		84		42		84		0.0	%
Gulf Pacific Holdings, LLC	First lien senior secured loan	11.29% (S + 5.75%)	9/30/2028		20,231		19,884		20,130		3.0	%
	First lien senior secured delayed draw loan	11.38% (S + 5.75%)	9/30/2028		1,706		1,498		1,697		0.2	%
	First lien senior secured revolving loan	11.38% (S + 5.75%)	9/30/2028		-		-		-		0.0	%
IF&P Foods, LLC (FreshEdge) (7)	First lien senior secured loan	11.07% (S + 5.63%)	10/3/2028		27,314		26,728		26,767		3.9	%
	First lien senior secured delayed draw loan	11.07% (S + 5.63%)	10/3/2028		4,055		3,974		3,974		0.6	%
	First lien senior secured revolving loan	11.19% (S + 5.63%)	10/3/2028		1,776		1,704		1,740		0.3	%
Siegel Egg Co., LLC	First lien senior secured loan	11.84% (S + 6.50%)	12/29/2026		15,506		15,314		14,653		2.2	%
	First lien senior secured revolving loan	11.84% (S + 6.50%)	12/29/2026		2,594		2,554		2,451		0.3	%
Worldwide Produce Acquisition, LLC	First lien senior secured delayed draw loan	11.64% (S + 6.25%)	1/18/2029		633		587		633		0.1	%
	First lien senior secured delayed draw loan	11.64% (S + 6.25%)	4/18/2024		-		-		-		0.0	%
	First lien senior secured revolving loan	11.64% (S + 6.25%)	1/18/2029		127		119		127		0.0	%
	First lien senior secured loan	11.64% (S + 6.25%)	1/18/2029		2,868		2,790		2,868		0.4	%
					137,005		133,823		135,680		19.9	%
Health care providers & services
Brightview, LLC	First lien senior secured loan	11.43% (S + 6.00%)	12/14/2026		12,903		12,874		12,677		1.9	%
	First lien senior secured delayed draw loan	11.43% (S + 6.00%)	12/14/2026		1,723		1,714		1,693		0.2	%
	First lien senior secured revolving loan	11.43% (S + 6.00%)	12/14/2026		232		231		228		0.0	%
Guardian Dentistry Partners	First lien senior secured loan	12.15% (S + 6.50%)	8/20/2026		8,078		7,938		8,078		1.2	%
	First lien senior secured delayed draw loan	12.15% (S + 6.50%)	8/20/2026		15,722		15,482		15,722		2.3	%
	First lien senior secured delayed draw loan	12.15% (S + 6.50%)	8/20/2026		5,823		5,823		5,823		0.9	%
Light Wave Dental Management LLC	First lien senior secured revolving loan	12.39% (S + 7.00%)	6/30/2029		1,580		1,489		1,580		0.2	%
	First lien senior secured loan	12.39% (S + 7.00%)	6/30/2029		22,479		21,864		22,479		3.3	%
OMH-HealthEdge Holdings, LLC	First lien senior secured loan	12.75% (S + 5.25%)	10/24/2025		12,156		12,007		12,156		1.8	%
	First lien senior secured loan	12.75% (S + 5.25%)	10/24/2025		5,282		5,212		5,282		0.8	%
SGA Dental Partners Holdings, LLC	First lien senior secured loan	11.54% (S + 6.00%)	12/30/2026		11,858		11,701		11,858		1.7	%
	First lien senior secured delayed draw loan	11.67% (S + 6.00%)	12/30/2026		11,052		10,892		11,052		1.6	%
	First lien senior secured revolving loan	11.54% (S + 6.00%)	12/30/2026		345		321		345		0.1	%
					109,233		107,548		108,973		16.0	%
Health care equipment & supplies
LSL Industries, LLC (LSL Healthcare)	First lien senior secured loan	12.13% (S + 6.50%)	11/3/2027		19,578		18,989		19,383		2.8	%
	First lien senior secured delayed draw loan	12.13% (S + 6.50%)	11/3/2024		-		-		-		0.0	%
	First lien senior secured revolving loan	12.13% (S + 6.50%)	11/3/2027		-		-		-		0.0	%
					19,578		18,989		19,383		2.8	%
Household durables
Curio Brands, LLC	First lien senior secured loan	11.04% (S + 5.50%)	12/21/2027		17,218		16,884		16,960		2.5	%
	First lien senior secured revolving loan	11.04% (S + 5.50%)	12/21/2027		-		-		-		0.0	%
	First lien senior secured delayed draw loan	11.04% (S + 5.50%)	12/21/2027		4,121		4,121		4,060		0.6	%
					21,339		21,005		21,020		3.1	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of September 30, 2023

(amounts in 000’s)

(Unaudited)

			Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company(1)	Investment(2)	Interest Rate	Date	Par		Cost(3)(4)		Value		of Net Assets
Household products
Home Brands Group Holdings, Inc. (ReBath)	First lien senior secured loan	10.32% (S + 4.75%)	11/8/2026		17,472		17,220		17,385		2.6	%
	First lien senior secured revolving loan	10.32% (S + 4.75%)	11/8/2026		-		-		-		0.0	%
					17,472		17,220		17,385		2.6	%
Insurance
Allcat Claims Service, LLC	First lien senior secured loan	11.51% (S + 6.00%)	7/7/2027		7,737		7,609		7,737		1.1	%
	First lien senior secured delayed draw loan	11.52% (S + 6.00%)	7/7/2027		21,659		21,250		21,659		3.2	%
	First lien senior secured revolving loan	11.52% (S + 6.00%)	7/7/2027		-		-		-		0.0	%
					29,396		28,859		29,396		4.3	%
IT services
Domain Information Services Inc. (Integris)	First lien senior secured loan	11.40% (S + 6.00%)	9/30/2025		20,496		20,131		20,496		3.0	%
Improving Acquisition LLC	First lien senior secured loan	11.61% (S + 6.50%)	7/26/2027		31,730		31,189		31,571		4.7	%
	First lien senior secured revolving loan	11.61% (S + 6.00%)	7/26/2027		-		-		-		0.0	%
					52,226		51,320		52,067		7.7	%
Leisure products
BCI Burke Holding Corp.	First lien senior secured loan	11.15% (S + 5.50%)	12/14/2027		15,609		15,442		15,843		2.3	%
	First lien senior secured delayed draw loan	11.15% (S + 5.50%)	12/14/2027		587		562		595		0.1	%
	First lien senior secured revolving loan	11.15% (S + 5.50%)	12/14/2027		-		-		-		0.0	%
VENUplus, Inc. (f/k/a CTM Group, Inc.)	First lien senior secured loan	12.32% (S + 6.75%)	11/30/2026		4,432		4,332		4,432		0.7	%
MacNeill Pride Group	First lien senior secured loan	11.90% (S + 6.25%)	4/22/2026		8,275		8,212		8,171		1.2	%
	First lien senior secured delayed draw loan	11.90% (S + 6.25%)	4/22/2026		3,286		3,224		3,245		0.5	%
	First lien senior secured revolving loan	11.90% (S + 6.25%)	4/22/2026		-		-		-		0.0	%
Trademark Global LLC	First lien senior secured loan	12.93% (S +7.50%, 1.75% is PIK)	7/30/2024		11,742		11,715		11,037		1.6	%
	First lien senior secured revolving loan	12.93% (S +7.50%, 1.75% is PIK)	7/30/2024		99		95		93		0.0	%
	First lien senior secured revolving loan	12.93% (S +7.50%, 1.75% is PIK)	7/30/2024		2,142		2,142		2,013		0.3	%
					46,172		45,724		45,429		6.7	%
Machinery
Pennsylvania Machine Works, LLC	First lien senior secured loan	11.65% (S + 6.00%)	3/6/2027		1,913		1,900		1,913		0.3	%
PVI Holdings, Inc	First lien senior secured loan	12.08% (S + 6.67%)	1/18/2028		23,956		23,647		23,956		3.5	%
Techniks Holdings, LLC / Eppinger Holdings Germany GMBH (6)	First lien senior secured loan	12.29% (S + 6.75%)	2/4/2025		24,865		24,448		24,679		3.6	%
	First lien senior secured revolving loan	11.21% (S + 5.75%)	2/4/2025		800		750		792		0.1	%
					51,534		50,745		51,340		7.5	%
Personal care products
DRS Holdings III, Inc. (Dr. Scholl’s)	First lien senior secured loan	11.67% (S + 6.25%)	11/1/2025		11,192		11,136		11,137		1.6	%
	First lien senior secured revolving loan	11.67% (S + 6.25%)	11/1/2025		-		-		-		0.0	%
PH Beauty Holdings III, Inc.	First lien senior secured loan	10.68% (S + 5.00%)	9/28/2025		9,467		9,279		9,136		1.4	%
Silk Holdings III Corp. (Suave)	First lien senior secured loan	13.14% (S + 7.75%)	5/1/2029		19,950		19,382		19,950		2.9	%
					40,609		39,797		40,223		5.9	%
Pharmaceuticals
Foundation Consumer Brands	First lien senior secured loan	11.77% (S + 6.25%)	2/12/2027		6,992		6,951		7,097		1.0	%
					6,992		6,951		7,097		1.0	%
Professional services
4 Over International, LLC	First lien senior secured loan	12.50% (S + 7.00%)	12/7/2026		19,585		19,119		19,585		2.9	%
DISA Holdings Corp. (DISA)	First lien senior secured delayed draw loan	10.83% (S + 5.50%)	9/9/2028		2,781		2,638		2,781		0.4	%
	First lien senior secured revolving loan	10.83% (S + 5.50%)	9/9/2028		280		232		280		0.0	%
	First lien senior secured loan	10.83% (S + 5.50%)	9/9/2028		22,233		21,655		22,233		3.3	%
Universal Marine Medical Supply International, LLC (Unimed)	First lien senior secured loan	12.55% (S + 7.00%)	12/5/2027		13,834		13,541		13,834		2.0	%
	First lien senior secured revolving loan	12.56% (S + 7.00%)	12/5/2027		2,544		2,491		2,544		0.4	%
					61,257		59,676		61,257		9.0	%
Software
AIDC Intermediate Co 2, LLC (Peak Technologies)	First lien senior secured loan	11.75% (S + 6.25%)	7/22/2027		34,738		33,760		34,564		5.1	%
					34,738		33,760		34,564		5.1	%
Specialty retail
Sundance Holdings Group, LLC (7)	First lien senior secured loan	13.54% (S + 9.50%, 1.50% is PIK)	5/1/2024		8,931		8,604		8,641		1.3	%
					8,931		8,604		8,641		1.3	%
Textiles, apparel & luxury goods
American Soccer Company, Incorporated (SCORE)	First lien senior secured loan	12.04% (S + 6.50%)	7/20/2027		29,892		29,358		29,892		4.4	%
	First lien senior secured revolving loan	12.04% (S + 6.50%)	7/20/2027		2,010		1,944		2,010		0.3	%
BEL USA, LLC	First lien senior secured loan	14.53% (S +9.00%, 2.00% is PIK)	6/2/2026		5,821		5,788		5,821		0.9	%
	First lien senior secured loan	14.53% (S +9.00%, 2.00% is PIK)	6/2/2026		96		96		96		0.0	%
YS Garments, LLC	First lien senior secured loan	12.91% (S + 7.50%)	8/9/2026		6,907		6,777		6,786		1.0	%
					44,726		43,963		44,605		6.6	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of September 30, 2023

(amounts in 000’s)

(Unaudited)

			Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company(1)	Investment(2)	Interest Rate	Date	Par		Cost(3)(4)		Value		of Net Assets
Trading companies & distributors
BCDI Meteor Acquisition, LLC (Meteor)	First lien senior secured loan	12.49% (S + 7.00%)	6/29/2028		16,338		15,980		16,338		2.4	%
Broder Bros., Co.	First lien senior secured loan	11.65% (S+ 6.00%)	12/4/2025		4,671		4,443		4,671		0.7	%
CGI Automated Manufacturing, LLC	First lien senior secured loan	12.65% (S + 7.00%)	12/17/2026		20,644		19,923		20,437		3.0	%
	First lien senior secured loan	12.65% (S + 7.00%)	12/17/2026		6,724		6,591		6,656		1.0	%
	First lien senior secured delayed draw loan	12.65% (S + 7.00%)	12/17/2026		3,639		3,524		3,603		0.5	%
	First lien senior secured revolving loan	12.65% (S + 7.00%)	12/17/2026		1,087		996		1,076		0.2	%
EIS Legacy, LLC	First lien senior secured loan	10.52% (S + 5.00%)	11/1/2027		18,138		17,811		18,138		2.7	%
	First lien senior secured delayed draw loan	10.52% (S + 5.00%)	11/1/2027		-		-		-		0.0	%
	First lien senior secured revolving loan	10.52% (S + 5.00%)	11/1/2027		-		-		-		0.0	%
Engineered Fastener Company, LLC (EFC International)	First lien senior secured loan	12.04% (S + 6.50%)	11/1/2027		23,663		23,146		23,663		3.5	%
Genuine Cable Group, LLC	First lien senior secured loan	10.92% (S + 5.50%)	11/1/2026		29,130		28,349		29,058		4.3	%
	First lien senior secured loan	10.92% (S + 5.50%)	11/1/2026		5,520		5,347		5,506		0.8	%
I.D. Images Acquisition, LLC	First lien senior secured loan	11.79% (S + 6.25%)	7/30/2026		13,687		13,564		13,687		2.0	%
	First lien senior secured delayed draw loan	11.79% (S + 6.25%)	7/30/2026		2,492		2,477		2,492		0.4	%
	First lien senior secured loan	11.67% (S + 6.25%)	7/30/2026		4,534		4,440		4,534		0.7	%
	First lien senior secured loan	11.79% (S + 6.25%)	7/30/2026		1,046		1,034		1,046		0.1	%
	First lien senior secured revolving loan	11.67% (S + 6.25%)	7/30/2026		-		-		-		0.0	%
Krayden Holdings, Inc.	First lien senior secured delayed draw loan	12.39% (S + 7.00%)	3/1/2025		-		-		-		0.0	%
	First lien senior secured delayed draw loan	12.39% (S + 7.00%)	3/1/2025		-		-		-		0.0	%
	First lien senior secured revolving loan	12.39% (S + 7.00%)	3/1/2029		-		-		-		0.0	%
	First lien senior secured loan	12.39% (S + 7.00%)	3/1/2029		9,515		9,104		9,562		1.4	%
United Safety & Survivability Corporation (USSC)	First lien senior secured loan	12.04% (S + 6.50%)	9/30/2027		12,468		12,276		12,468		1.8	%
	First lien senior secured delayed draw loan	12.04% (S + 6.50%)	9/30/2027		1,679		1,638		1,679		0.2	%
	First lien senior secured revolving loan	12.04% (S + 6.50%)	9/30/2027		1,326		1,305		1,326		0.2	%
					176,301		171,948		175,940		25.9	%
Wireless telecommunication services
Centerline Communications, LLC	First lien senior secured loan	11.55% (S + 6.00%)	8/10/2027		14,983		14,775		14,610		2.1	%
	First lien senior secured delayed draw loan	11.55% (S + 6.00%)	8/10/2027		7,062		6,964		6,885		1.0	%
	First lien senior secured delayed draw loan	11.53% (S + 6.00%)	8/10/2027		4,821		4,747		4,701		0.7	%
	First lien senior secured delayed draw loan	11.55% (S + 6.00%)	8/10/2027		1,396		1,375		1,361		0.2	%
	First lien senior secured revolving loan	11.57% (S + 6.00%)	8/10/2027		1,800		1,777		1,755		0.3	%
	First lien senior secured loan	11.53% (S + 6.00%)	8/10/2027		1,023		997		997		0.1	%
					31,085		30,635		30,309		4.4	%
Total Private Credit Debt Investments					1,286,014		1,261,521		1,269,539		186.5	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of September 30, 2023

(amounts in 000’s)

(Unaudited)

	Number of				Fair		Percentage
	Units		Cost		Value		of Net Assets
Equity Investments(9)
Auto components
Vehicle Accessories, Inc. - Class A common (11)		128.250		-		132		0.0	%
Vehicle Accessories, Inc. - preferred (11)		250.000		250		286		0.1	%
		378.250		250		418		0.1	%
Commercial services & supplies
American Equipment Holdings LLC (12)		250.000		285		518		0.1	%
BLP Buyer, Inc. (Bishop Lifting Products) - Class A common (13)		582.000		652		1,086		0.1	%
		832.000		937		1,604		0.2	%
Food products
BC CS 2, L.P. (Cuisine Solutions) (6) (10)		2,000.000		2,000		2,499		0.4	%
City Line Distributors, LLC - Class A units (14)		418.416		418		418		0.1	%
Gulf Pacific Holdings, LLC - Class A common (12)		0.250		250		247		0.0	%
Gulf Pacific Holdings, LLC - Class C common (12)		0.250		-		-		0.0	%
IF&P Foods, LLC (FreshEdge) - Class A common (12)		0.750		750		933		0.1	%
IF&P Foods, LLC (FreshEdge) - Class B common (12)		0.750		-		-		0.0	%
Siegel Parent, LLC (15)		0.250		250		72		0.0	%
		2,420.666		3,668		4,169		0.6	%
Healthcare equipment & supplies
LSL Industries, LLC (LSL Healthcare) (12)		7.500		750		561		0.1	%
IT services
Domain Information Services Inc. (Integris)		250.000		250		325		0.0	%
Textiles, apparel & luxury goods
American Soccer Company, Incorporated (SCORE) (15)		1,000.000		1,000		987		0.2	%
Total Private Equity Investments				6,855		8,064		1.2	%

Total Private Investments				1,268,376		1,277,603		187.7	%

	Number of				Fair			Percentage
	Shares		Cost		Value			of Net Assets
Short-Term Investments
First American Treasury Obligations Fund - Institutional Class Z, 5.22% (16)		16,628		16,628		16,628			2.4	%
Total Short-Term Investments		16,628		16,628		16,628			2.4	%

Total Investments			$	1,285,004	$	1,294,231			190.1	%

Liabilities in Excess of Other Assets						(613,505	)		(90.1	)%
Net Assets					$	680,726			100.0	%

(1)

As of September 30, 2023, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

(2)	Debt investments are pledged to the Company’s credit facilities, and a single debt investment may be divided into parts that are individually pledged to separate credit facilities.

(3)	The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of September 30, 2023

(amounts in 000’s)

(Unaudited)

(4)	As of September 30, 2023, the tax cost of the Company’s investments approximates their amortized cost.

(5)

Loan contains a variable rate structure, that may be subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by reference to either the Secured Overnight Funding Rate (“SOFR” or “S”) (which can include one-, three- or six-month SOFR), or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate or “P”).

(6)

Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of September 30, 2023, 5.2% of the Company’s total assets were in non-qualifying investments.

(7)

The Company may be entitled to receive additional interest as a result of an arrangement with other lenders in the syndication. In exchange for the higher interest rate, the “last-out” portion is at a greater risk of loss. Certain lenders represent a “first out” portion of the investment and have priority to the “last-out” portion with respect to payments of principal and interest.

(8)	Debt investment on non-accrual status as of September 30, 2023.

(9)	Non-income producing investment.

(10)	The Company has a senior secured loan in an investment vehicle (BC CS 2, L.P.) that is collateralized by a preferred stock investment in Cuisine Solutions, Inc..

(11)	The Company owns 0.19% of the common equity and 0.43% of the preferred equity of Vehicle Accessories, Inc.

(12)

The Company owns 71.55% of a pass-through, taxable limited liability company, KSCF IV Equity Aggregator Blocker, LLC (the “Aggregator Blocker”), which holds the Company’s equity investments in American Equipment Holdings LLC, Gulf Pacific Holdings, LLC, IF&P Foods, LLC (FreshEdge) and LSL Industries, LLC (LSL Healthcare). Through the Company’s ownership of the Aggregator Blocker, the Company owns the respective units of each company listed above in the Schedule of Investments.

(13)	The Company owns 0.53% of the common equity BLP Buyer, Inc. (Bishop Lifting Products).

(14)	KABDC Corp, LLC, a wholly owned subsidiary of the Company, owns 0.62% of the common equity of City Line Distributors, LLC.

(15)

The Company owns 33.95% of a pass-through limited liability company, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds the Company’s equity investments in Siegel Parent, LLC and American Soccer Company, Incorporated (SCORE). The Aggregator’s ownership of Siegel Parent, LLC is 1.1442%. Through the Company’s ownership of the Aggregator, the Company owns the respective units of each company listed above in the Schedule of Investments.

(16)

The indicated rate is the yield as of September 30, 2023.

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

			Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company⁽¹⁾	Investment	Interest Rate	Date	Par		Cost⁽²⁾⁽³⁾		Value		of Net Assets
Debt and Equity Investments
Private Credit Investments⁽⁴⁾
Aerospace & defense
Basel U.S. Acquisition Co., Inc. (IAC) (5)	First lien senior secured revolving loan	11.10% (S + 6.50%)	12/5/2028	$	-	$	-	$	-		0.0	%
	First lien senior secured loan	11.10% (S + 6.50%)	12/5/2028		18,681		18,180		18,681		3.1	%
Fastener Distribution Holdings, LLC	First lien senior secured delayed draw loan	11.73% (S + 7.00%)	4/1/2024		2,362		2,293		2,362		0.4	%
	First lien senior secured loan	11.73% (S + 7.00%)	4/1/2024		20,701		20,347		20,701		3.5	%
Precinmac (US) Holdings, Inc.	First lien senior secured delayed draw loan	10.42% (S + 6.00%)	8/31/2027		1,113		1,094		1,096		0.2	%
	First lien senior secured loan	10.42% (S + 6.00%)	8/31/2027		5,408		5,315		5,326		0.9	%
					48,265		47,229		48,166		8.1	%
Asset management & custody banks
Atria Wealth Solutions, Inc.	First lien senior secured delayed draw loan	10.84% (S + 6.00%)	2/29/2024		232		202		228		0.0	%
	First lien senior secured loan	10.84% (S + 6.00%)	2/29/2024		5,139		5,101		5,036		0.9	%
					5,371		5,303		5,264		0.9	%
Auto components
Speedstar Holding LLC	First lien senior secured loan	11.73% (L + 7.00%)	1/22/2027		4,908		4,828		4,908		0.8	%
Vehicle Accessories, Inc.	First lien senior secured revolving loan	12.00% (P + 4.50%)	11/30/2026		-		-		-		0.0	%
	First lien senior secured loan	10.34% (S + 5.50%)	11/30/2026		21,225		20,898		21,066		3.6	%
					26,133		25,726		25,974		4.4	%
Biotechnology
Alcami Corporation (Alcami)	First lien senior secured delayed draw loan	11.42% (S + 7.00%)	6/30/2024		-		-		-		0.0	%
	First lien senior secured revolving loan	11.42% (S + 7.00%)	12/21/2028		-		-		-		0.0	%
	First lien senior secured loan	11.42% (S + 7.00%)	12/21/2028		11,735		11,237		11,618		2.0	%
					11,735		11,237		11,618		2.0	%
Building products
BCI Burke Holding Corp.	First lien senior secured delayed draw loan	9.70% (L + 5.50%)	12/14/2023		639		615		642		0.1	%
	First lien senior secured loan	10.23% (L + 5.50%)	12/14/2027		16,489		16,256		16,572		2.8	%
	First lien senior secured revolving loan	10.23% (L + 5.50%)	6/14/2027		-		-		-		0.0	%
Eastern Wholesale Fence	First lien senior secured revolving loan	11.73% (L + 7.00%)	10/30/2025		1,275		1,252		1,275		0.2	%
	First lien senior secured loan	11.73% (L + 7.00%)	10/30/2025		21,239		20,778		21,239		3.6	%
					39,642		38,901		39,728		6.7	%
Chemicals
Cyalume Technologies Holdings, Inc.	First lien senior secured loan	9.73% (L + 5.00%)	8/30/2024		1,274		1,266		1,274		0.2	%
Fralock Buyer LLC	First lien senior secured revolving loan	10.23% (L + 5.50%)	4/17/2024		-		-		-		0.0	%
	First lien senior secured loan	10.23% (L + 5.50%)	4/17/2024		11,679		11,560		11,621		2.0	%
Schrieve Chemical Company, LLC	First lien senior secured loan	10.33% (L + 6.00%)	12/2/2024		609		597		609		0.1	%
USALCO, LLC	First lien senior secured revolving loan	10.38% (L + 6.00%)	10/19/2026		1,081		1,042		1,070		0.2	%
	First lien senior secured loan	10.73% (L + 6.00%)	10/19/2027		19,181		18,792		18,989		3.2	%
					33,824		33,257		33,563		5.7	%
Commercial services & supplies
Advanced Environmental Monitoring (6)	First lien senior secured loan	11.68% (S + 7.00%)	1/29/2026		10,158		9,918		10,158		1.7	%
Allentown, LLC	First lien senior secured delayed draw loan	10.42% (S + 6.00%)	10/22/2023		-		-		-		0.0	%
	First lien senior secured revolving loan	12.50% (P + 5.00%)	4/22/2027		357		348		347		0.1	%
	First lien senior secured loan	10.42% (S + 6.00%)	4/22/2027		7,663		7,588		7,452		1.3	%
American Equipment Holdings LLC	First lien senior secured delayed draw loan	10.88% (S + 6.00%)	11/5/2026		6,303		6,202		6,303		1.1	%
	First lien senior secured revolving loan	10.45% (S + 6.00%)	11/5/2026		1,610		1,559		1,610		0.3	%
	First lien senior secured delayed draw loan	9.33% (S + 6.00%)	11/5/2026		3,670		3,594		3,670		0.6	%
	First lien senior secured loan	10.51% (S + 6.00%)	11/5/2026		2,107		2,072		2,107		0.3	%
	First lien senior secured loan	10.88% (S + 6.00%)	11/5/2026		18,142		17,853		18,142		3.1	%
Arborworks Acquisition LLC	First lien senior secured revolving loan	11.41% (L + 7.00%)	11/9/2026		3,125		3,053		2,750		0.5	%
	First lien senior secured loan	11.56% (L + 7.00%)	11/9/2026		19,855		19,533		17,473		2.9	%
BLP Buyer, Inc. (Bishop Lifting Products)	First lien senior secured revolving loan	10.67% (S + 6.25%)	2/1/2027		604		577		596		0.1	%
	First lien senior secured loan	10.21% (S + 6.50%)	2/1/2027		6,176		6,027		6,099		1.0	%
	First lien senior secured loan	10.49% (S + 6.25%)	2/1/2027		16,372		16,097		16,168		2.7	%
Gusmer Enterprises, Inc.	First lien senior secured delayed draw loan	11.44% (S + 7.00%)	5/7/2027		8,032		7,891		8,032		1.4	%
	First lien senior secured revolving loan	11.43% (S + 7.00%)	5/7/2027		-		-		-		0.0	%
	First lien senior secured loan	11.43% (S + 7.00%)	5/7/2027		4,795		4,647		4,795		0.8	%
PMFC Holding, LLC	First lien senior secured delayed draw loan	10.88% (L + 6.50%)	7/31/2023		2,818		2,811		2,818		0.5	%
	First lien senior secured loan	10.88% (L + 6.50%)	7/31/2023		5,619		5,604		5,619		0.9	%
	First lien senior secured revolving loan	11.18% (L + 6.50%)	7/31/2023		342		342		342		0.1	%
Regiment Security Partners LLC	First lien senior secured delayed draw loan	12.66% (S + 8.00%)	9/15/2023		2,635		2,593		2,635		0.4	%
	First lien senior secured loan	12.66% (S + 8.00%)	9/15/2026		6,461		6,358		6,461		1.1	%
	First lien senior secured revolving loan	12.66% (S + 8.00%)	9/15/2026		1,345		1,320		1,345		0.2	%
The Kleinfelder Group, Inc.	First lien senior secured loan	9.98% (L + 5.25%)	11/30/2024		12,760		12,678		12,697		2.1	%
					140,949		138,665		137,619		23.2	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

			Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company⁽¹⁾	Investment	Interest Rate	Date	Par		Cost⁽²⁾⁽³⁾		Value		of Net Assets
Containers & packaging
Drew Foam Companies, Inc.	First lien senior secured loan	11.48% (S + 6.75%)	11/5/2025		7,375		7,288		7,375		1.2	%
	First lien senior secured loan	10.89% (S + 6.75%)	11/5/2025		20,964		20,564		20,964		3.6	%
FCA, LLC (FCA Packaging)	First lien senior secured revolving loan	9.46% (S + 6.50%)	7/18/2028		-		-		-		0.0	%
	First lien senior secured loan	9.46% (S + 6.50%)	7/18/2028		23,382		23,004		23,616		4.0	%
					51,721		50,856		51,955		8.8	%
Diversified telecommunication services
Network Connex (f/k/a NTI Connect, LLC)	First lien senior secured loan	9.48% (S + 4.75%)	11/30/2024		5,249		5,187		5,249		0.9	%
Pavion Corp., f/k/a Corbett Technology Solutions, Inc.	First lien senior secured revolving loan	9.14% (S + 5.00%)	10/29/2027		572		442		563		0.1	%
	First lien senior secured delayed draw loan	9.66% (S + 5.00%)	10/29/2027		9,434		9,354		9,293		1.6	%
	First lien senior secured loan	9.58% (S + 5.00%)	10/29/2027		1,742		1,727		1,716		0.3	%
	First lien senior secured loan	9.24% (S + 5.00%)	10/29/2027		13,429		13,188		13,227		2.2	%
					30,426		29,898		30,048		5.1	%
Electronic equipment, instruments & components
Process Insights, Inc.	First lien senior secured loan	10.49% (S + 6.00%)	10/30/2025		3,044		2,993		3,021		0.5	%
					3,044		2,993		3,021		0.5	%
Food products
BC CS 2, L.P. (Cuisine Solutions) (5)	First lien senior secured loan	12.18% (S + 8.00%)	7/8/2028		25,000		24,283		25,000		4.2	%
BR PJK Produce, LLC (Keany)	First lien senior secured loan	10.47% (S + 6.25%)	11/14/2027		29,863		29,095		29,863		5.0	%
	First lien senior secured delayed draw loan	10.47% (S + 6.25%)	5/14/2024		-		-		-		0.0	%
Gulf Pacific Holdings, LLC	First lien senior secured delayed draw loan	10.73% (S + 6.00%)	9/30/2024		-		-		-		0.0	%
	First lien senior secured revolving loan	10.42% (S + 6.00%)	9/30/2028		1,498		1,384		1,498		0.3	%
	First lien senior secured loan	10.73% (S + 6.00%)	9/30/2028		20,384		19,905		20,384		3.5	%
IF&P Foods, LLC (FreshEdge) (6)	First lien senior secured delayed draw loan	8.91% (S + 5.25%)	10/3/2024		-		-		-		0.0	%
	First lien senior secured revolving loan	8.91% (S + 5.25%)	10/3/2028		1,366		1,187		1,366		0.2	%
	First lien senior secured loan	8.91% (S + 5.25%)	10/3/2028		27,520		26,853		27,520		4.7	%
Siegel Egg Co., LLC	First lien senior secured revolving loan	9.25% (L + 5.50%)	12/29/2026		1,923		1,873		1,913		0.3	%
	First lien senior secured loan	9.25% (L + 5.50%)	12/29/2026		15,624		15,383		15,546		2.6	%
					123,178		119,963		123,090		20.8	%
Health care providers & services
Brightview, LLC	First lien senior secured delayed draw loan	10.14% (L + 5.75%)	12/14/2026		1,736		1,714		1,719		0.3	%
	First lien senior secured revolving loan	10.13% (L + 5.75%)	12/14/2026		-		-		-		0.0	%
	First lien senior secured loan	10.13% (L + 5.75%)	12/14/2026		13,002		12,923		12,872		2.2	%
Guardian Dentistry Partners	First lien senior secured delayed draw loan	10.94% (S + 6.50%)	8/20/2026		21,708		21,402		21,708		3.7	%
	First lien senior secured loan	10.94% (S + 6.50%)	8/20/2026		8,139		7,961		8,139		1.4	%
Light Wave Dental Management LLC	First lien senior secured delayed draw loan	11.32% (S + 6.50%)	12/31/2023		9,559		9,437		9,559		1.6	%
	First lien senior secured loan (7)	30.00%	9/30/2023		6,254		6,254		6,254		1.0	%
	First lien senior secured revolving loan	11.32% (S + 6.50%)	12/31/2023		558		555		558		0.1	%
	First lien senior secured loan	11.32% (S + 6.50%)	12/31/2023		12,941		12,851		12,941		2.1	%
OMH-HealthEdge Holdings, LLC	First lien senior secured loan	10.03% (L + 5.25%)	10/24/2025		17,572		17,271		17,572		3.0	%
SGA Dental Partners Holdings, LLC	First lien senior secured delayed draw loan	9.93% (S + 6.00%)	12/30/2026		11,136		10,941		11,136		1.9	%
	First lien senior secured loan	9.93% (S + 6.00%)	12/30/2026		11,948		11,725		11,948		2.0	%
	First lien senior secured revolving loan	9.93% (S + 6.00%)	12/30/2026		-		-		-		0.0	%
					114,553		113,034		114,406		19.3	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

			Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company⁽¹⁾	Investment	Interest Rate	Date	Par		Cost⁽²⁾⁽³⁾		Value		of Net Assets
Healthcare equipment & supplies
LSL Industries, LLC (LSL Healthcare)	First lien senior secured delayed draw loan	10.90% (S + 6.50%)	11/3/2024		-		-		-		0.0	%
	First lien senior secured revolving loan	10.90% (S + 6.50%)	11/3/2027		-		-		-		0.0	%
	First lien senior secured loan	10.90% (S + 6.50%)	11/3/2027		19,727		19,001		19,727		3.3	%
					19,727		19,001		19,727		3.3	%
Household durables
Curio Brands, LLC	First lien senior secured delayed draw loan	10.23% (L + 5.50%)	12/21/2027		3,296		3,296		3,230		0.5	%
	First lien senior secured revolving loan	10.23% (L + 5.50%)	12/21/2027		-		-		-		0.0	%
	First lien senior secured loan	10.23% (L + 5.50%)	12/21/2027		18,009		17,596		17,648		3.0	%
					21,305		20,892		20,878		3.5	%
Household products
Home Brands Group Holdings, Inc. (ReBath)	First lien senior secured revolving loan	9.16% (L + 4.75%)	11/8/2026		-		-		-		0.0	%
	First lien senior secured loan	9.16% (L + 4.75%)	11/8/2026		19,046		18,706		18,951		3.2	%
					19,046		18,706		18,951		3.2	%
Insurance
Allcat Claims Service, LLC	First lien senior secured delayed draw loan	10.24% (S + 6.00%)	7/7/2027		5,396		5,127		5,396		0.9	%
	First lien senior secured revolving loan	10.33% (S + 6.00%)	7/7/2027		1,651		1,591		1,651		0.3	%
	First lien senior secured loan	10.41% (S + 6.00%)	7/7/2027		7,795		7,641		7,795		1.3	%
					14,842		14,359		14,842		2.5	%
IT services
Domain Information Services Inc. (Integris)	First lien senior secured loan	10.63% (S + 6.25%)	9/30/2025		20,632		20,133		20,632		3.5	%
Improving Acquisition LLC	First lien senior secured revolving loan	10.24% (S + 6.00%)	7/26/2027		-		-		-		0.0	%
	First lien senior secured loan	10.24% (S + 6.00%)	7/26/2027		24,260		23,754		24,260		4.1	%
					44,892		43,887		44,892		7.6	%
Leisure products
MacNeill Pride Group	First lien senior secured delayed draw loan	11.09% (S + 6.25%)	4/22/2026		4,119		4,061		4,017		0.7	%
	First lien senior secured loan	11.09% (S + 6.25%)	4/22/2026		8,619		8,533		8,403		1.4	%
	First lien senior secured revolving loan	11.09% (S + 6.25%)	4/22/2026		899		874		877		0.1	%
Trademark Global LLC	First lien senior secured revolving loan	11.88% (L + 7.50%), 4.50% is PIK	7/30/2024		2,760		2,744		2,574		0.4	%
	First lien senior secured revolving loan	11.88% (L + 7.50%), 4.50% is PIK	7/30/2024		29		21		27		0.1	%
	First lien senior secured loan	11.88% (L + 7.50%), 4.50% is PIK	7/30/2024		11,516		11,451		10,739		1.8	%
					27,942		27,684		26,637		4.5	%
Machinery
Pennsylvania Machine Works, LLC	First lien senior secured loan	11.09% (S + 6.25%)	3/6/2027		2,009		1,991		2,009		0.3	%
PVI Holdings, Inc	First lien senior secured loan	10.12% (S + 6.38%)	7/18/2027		24,124		23,763		24,124		4.1	%
					26,133		25,754		26,133		4.4	%
Personal products
DRS Holdings III, Inc. (Dr. Scholl’s)	First lien senior secured revolving loan	10.48% (L + 5.75%)	11/1/2025		-		-		-		0.0	%
	First lien senior secured loan	10.48% (L + 5.75%)	11/1/2025		11,377		11,295		11,149		1.9	%
PH Beauty Holdings III, Inc.	First lien senior secured loan	9.73% (L + 5.00%)	9/28/2025		9,542		9,277		9,113		1.5	%
					20,919		20,572		20,262		3.4	%
Pharmaceuticals
Foundation Consumer Brands	First lien senior secured revolving loan	10.15% (L + 5.50%)	2/12/2027		-		-		-		0.0	%
	First lien senior secured loan	10.15% (L + 5.50%)	2/12/2027		7,331		7,276		7,331		1.2	%
					7,331		7,276		7,331		1.2	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

			Maturity	Principal /		Amortized		Fair		Percentage
Portfolio Company⁽¹⁾	Investment	Interest Rate	Date	Par		Cost⁽²⁾⁽³⁾		Value		of Net Assets
Professional services
4 Over International, LLC	First lien senior secured loan	10.73% (L + 6.00%)	12/7/2023		24,326		24,013		24,205		4.1	%
DISA Holdings Corp. (DISA)	First lien senior secured delayed draw loan	9.73% (S + 5.50%)	9/9/2028		2,443		2,283		2,430		0.4	%
	First lien senior secured revolving loan	9.82% (S + 5.50%)	9/9/2028		56		1		56		0.0	%
	First lien senior secured loan	9.72% (S + 5.50%)	9/9/2028		22,401		21,741		22,289		3.8	%
Universal Marine Medical Supply International, LLC (Unimed)	First lien senior secured revolving loan	12.14% (S + 7.50%)	12/5/2027		509		446		509		0.1	%
	First lien senior secured loan	12.10% (S + 7.50%)	12/5/2027		14,756		14,395		14,756		2.5	%
					64,491		62,879		64,245		10.9	%
Software
AIDC Intermediate Co 2, LLC (Peak Technologies)	First lien senior secured loan	10.44% (S + 6.25%)	7/22/2027		35,000		33,835		35,000		5.9	%
					35,000		33,835		35,000		5.9	%
Specialty retail
Sundance Holdings Group, LLC (6)	First lien senior secured loan	10.73% (L + 6.00%)	5/1/2024		8,743		8,548		8,656		1.5	%
					8,743		8,548		8,656		1.5	%
Textiles, apparel & luxury goods
American Soccer Company, Incorporated (SCORE)	First lien senior secured revolving loan	11.91% (S + 7.25%)	7/20/2027		1,892		1,795		1,892		0.3	%
	First lien senior secured loan	11.98% (S + 7.25%)	7/20/2027		30,119		29,478		30,119		5.1	%
BEL USA, LLC	First lien senior secured loan	10.43% (S + 6.00%)	2/2/2025		7,006		6,937		6,936		1.2	%
YS Garments, LLC	First lien senior secured loan	9.51% (L + 5.50%)	8/9/2024		7,706		7,608		7,706		1.3	%
					46,723		45,818		46,653		7.9	%
Trading companies & distributors
BCDI Meteor Acquisition, LLC (Meteor)	First lien senior secured loan	11.66% (S + 7.00%)	6/29/2028		16,420		16,010		16,420		2.8	%
Broder Bros., Co.	First lien senior secured loan	10.73% (L + 6.00%)	12/4/2025		4,763		4,456		4,763		0.8	%
CGI Automated Manufacturing, LLC	First lien senior secured delayed draw loan	11.34% (S + 6.50%)	12/17/2026		3,710		3,566		3,710		0.6	%
	First lien senior secured loan	11.34% (S + 6.50%)	12/17/2026		27,896		26,809		27,896		4.7	%
	First lien senior secured revolving loan	11.34% (S + 6.50%)	12/17/2026		-		-		-		0.0	%
EIS Legacy, LLC	First lien senior secured delayed draw loan	9.73% (L + 5.00%)	5/1/2023		-		-		-		0.0	%
	First lien senior secured revolving loan	9.73% (L + 5.00%)	11/1/2027		-		-		-		0.0	%
	First lien senior secured loan	9.73% (L + 5.00%)	11/1/2027		18,277		17,885		18,140		3.1	%
Genuine Cable Group, LLC	First lien senior secured loan	10.17% (S + 5.75%)	11/1/2026		34,912		33,732		34,476		5.8	%
I.D. Images Acquisition, LLC	First lien senior secured loan	10.98% (S + 6.25%)	7/30/2026		15,415		15,236		15,415		2.6	%
	First lien senior secured loan	10.67% (S + 6.25%)	7/30/2026		4,743		4,651		4,743		0.8	%
	First lien senior secured delayed draw loan	10.98% (S + 6.25%)	7/30/2026		2,608		2,587		2,608		0.4	%
	First lien senior secured revolving loan	10.67% (S + 6.25%)	7/30/2026		596		567		596		0.1	%
Refrigeration Sales Corp.	First lien senior secured loan	11.26% (L + 6.50%)	6/22/2026		6,876		6,789		6,876		1.2	%
United Safety & Survivability Corporation (USSC)	First lien senior secured delayed draw loan	11.41% (S + 6.75%)	9/30/2027		670		628		670		0.1	%
	First lien senior secured revolving loan	10.88% (S + 6.25%)	9/30/2027		1,075		1,051		1,075		0.2	%
	First lien senior secured loan	11.48% (S + 6.75%)	9/30/2027		12,563		12,332		12,563		2.1	%
					150,524		146,299		149,951		25.3	%
Wireless telecommunication services
Centerline Communications, LLC	First lien senior secured loan	9.93% (S + 5.50%)	8/10/2027		1,031		1,000		1,026		0.2	%
	First lien senior secured delayed draw loan	10.06% (S + 5.50%)	8/10/2027		7,116		6,999		7,080		1.2	%
	First lien senior secured delayed draw loan	9.93% (S + 5.50%)	8/10/2027		6,265		6,148		6,233		1.1	%
	First lien senior secured revolving loan	10.06% (S + 5.50%)	8/10/2027		-		-		-		0.0	%
	First lien senior secured loan	10.06% (S + 5.50%)	8/10/2027		15,098		14,819		15,022		2.5	%
					29,510		28,966		29,361		5.0	%
Total Private Credit Debt Investments					1,165,969		1,141,538		1,157,971		195.6	%

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

	Number of				Fair		Percentage
	Units		Cost		Value		of Net Assets
Equity Investments
Auto components
Vehicle Accessories, Inc. - Class A common (8)		128.250		-		80		0.0	%
Vehicle Accessories, Inc. - preferred (8)		250.000		250		268		0.1	%
		378.250		250		348		0.1	%
Commercial services & supplies
American Equipment Holdings LLC (9)		250.000		250		248		0.0	%
BLP Buyer, Inc. (Bishop Lifting Products) - Class A common (10)		500.000		500		560		0.1	%
		750.000		750		808		0.1	%
Food products
BC CS 2, L.P. (Cuisine Solutions) (5)		2,000.000		2,000		2,220		0.4	%
IF&P Foods, LLC (FreshEdge) – Class A common (9)		0.750		750		745		0.1	%
IF&P Foods, LLC (FreshEdge) – Class B common (9)		0.750		-		-		0.0	%
Gulf Pacific Holdings, LLC - Class A common (9)		0.250		250		278		0.0	%
Gulf Pacific Holdings, LLC - Class C common (9)		0.250		-		-		0.0	%
Siegel Parent, LLC (11)		0.250		250		496		0.1	%
		2,002.250		3,250		3,739		0.6	%
Healthcare equipment & supplies
LSL Industries, LLC (LSL Healthcare) (9)		7.500		750		745		0.1	%
		7.500		750		745		0.1	%
IT services
Domain Information Services Inc. (Integris)		250.000		250		250		0.0	%
		250.000		250		250		0.0	%
Textiles, apparel & luxury goods
American Soccer Company, Incorporated (SCORE) (11)		1,000.000		1,000		1,258		0.2	%
		1,000.000		1,000		1,258		0.2	%
Total Private Equity Investments		4,388.000		6,250		7,148		1.1	%

Total Private Investments				1,147,788		1,165,119		196.7	%

	Number of				Fair			Percentage
	Shares		Cost		Value			of Net Assets
Short-Term Investments
First American Treasury Obligations Fund - Institutional Class Z, 4.16% (12)		9,847		9,847		9,847			1.7	%
Total Short-Term Investments		9,847		9,847		9,847			1.7	%

Total Investments			$	1,157,635	$	1,174,966			198.4	%

Liabilities in Excess of Other Assets						(582,925	)		(98.4	)%
Net Assets					$	592,041			100.0	%

(1)	As of December 31, 2022, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

(2)	The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.

Kayne Anderson BDC, Inc.

Consolidated Schedule of Investments

As of December 31, 2022

(amounts in 000’s)

	(3)	As of December 31, 2022, the tax cost of the Company’s investments approximates their amortized cost.

	(4)	Loan contains a variable rate structure, that may be subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate (“LIBOR” or “L”) (which can include one-, two-, three- or six-month LIBOR), the Secured Overnight Funding Rate (“SOFR” or “S”) (which can include one-, three- or six-month SOFR), or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate or “P”).

(5)

Non-qualifying investment as defined by Section 55(a) of the Investment Company Act of 1940. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2022, 3.8% of the Company’s total assets were in non-qualifying investments.

(6)

(7)

On December 5, 2022, the Company funded a $6,254 first lien senior secured loan in Light Wave Dental Management LLC. The loan has an annual interest rate of 30% with a minimum of 1.3x MOIC (multiple on invested capital) if the loan is repaid prior to June 6, 2023 with further increases above 1.3x thereafter. The interest and the prepayment premium are payable to the Company upon a triggering event or maturity in September 2023.

(8)

The Company owns 0.19% of the common equity and 0.43% of the preferred equity of Vehicle Accessories, Inc.

(9)

The Company owns 71% of a pass-through, taxable limited liability company, KSCF IV Equity Aggregator Blocker, LLC (the “Aggregator Blocker”), which holds the Company’s equity investments in American Equipment Holdings LLC, Gulf Pacific Holdings, LLC, IF&P Foods, LLC (FreshEdge) and LSL Industries, LLC (LSL Healthcare). Through the Company’s ownership of the Aggregator Blocker, the Company owns the respective units of each company listed above in the Schedule of Investments.

(10)

The Company owns 0.53% of the common equity BLP Buyer, Inc. (Bishop Lifting Products).

(11)

The Company owns 40% of a pass-through limited liability company, KSCF IV Equity Aggregator, LLC (the “Aggregator”), which holds the Company’s equity investments in Siegel Parent, LLC and American Soccer Company, Incorporated (SCORE). The Aggregator’s ownership of Siegel Parent, LLC is 1.1442%. Through the Company’s ownership of the Aggregator, the Company owns the respective units of each company listed above in the Schedule of Investments.

(12)

The indicated rate is the yield as of December 31, 2022.

See accompanying notes to consolidated financial statements.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 1. Organization

Organization

Kayne Anderson BDC, Inc. (the “Company”) is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, the Company intends to qualify as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company was formed as a Delaware corporation to make investments in middle-market companies and commenced operations on February 5, 2021.

As of September 30, 2023, the Company has entered into subscription agreements with investors for an aggregate capital commitment of $887,003 to purchase shares of the Company’s common stock. See Note 11 – Subsequent Events.

KA Credit Advisors, LLC (the “Advisor”) is an affiliate of Kayne Anderson Capital Advisors, L.P. (“Kayne Anderson”), a prominent alternative investment management firm. The Advisor and Kayne Anderson are registered with the United States Securities and Exchange Commission (the “SEC”) under the Investment Advisory Act of 1940, as amended. Subject to the overall supervision of the Company’s board of directors (the “Board”), the Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring investments, determining the value of its investments and monitoring its investments and portfolio companies on an ongoing basis. The Board consists of seven directors, four of whom are independent.

The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through debt investments in middle-market companies.

The Company conducts private offerings of its Common Stock to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). At the closing of any private offering, each investor will make a capital commitment (a “Capital Commitment”) to purchase shares of its common stock pursuant to a subscription agreement entered into with the Company. Investors will be required to fund drawdowns to purchase shares of common stock up to the amount of their respective Capital Commitments each time the Company delivers a notice to the investors. Following the initial closing of the private offering (the “Initial Closing”) on February 5, 2021 and prior to any Liquidity Event (as defined below), the Advisor may, in its sole discretion, permit additional closings of the private offering. A “Liquidity Event” is defined as (a) an initial public offering of shares of common stock (the “Initial Public Offering”) or the listing of shares of common stock on an exchange (together with the Initial Public Offering, an “Exchange Listing”), (b) the sale of the Company or (c) a disposition of the Company’s investments and distribution of the net proceeds (after repayment of borrowed funds or other forms of leverage) to the Company’s investors.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 2. Significant Accounting Policies

A. Basis of Presentation—the accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company is an investment company and follows accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946 — “Financial Services — Investment Companies.” In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair statement of the consolidated financial statements for the periods presented, have been included.

B. Consolidation—As provided under Regulation S-X and ASC Topic 946 – “Financial Services – Investment Companies”, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company or controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the accounts of the Company’s wholly-owned subsidiaries, Kayne Anderson BDC Financing, LLC, (“KABDCF”); Kayne Anderson BDC Financing II, LLC (“KABDCF II”) and KABDC Corp, LLC in its consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation. KABDC Corp, LLC is a Delaware LLC that has elected to be treated as a corporation for U.S. tax purposes and was formed to facilitate compliance with the requirements to be treated as a RIC under the Code by holding (directly or indirectly through a subsidiary) equity or equity related investments in portfolio companies organized as limited liability companies or limited partnerships.

C. Use of Estimates—the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Actual results could differ materially from those estimates.

D. Cash and Cash Equivalents—cash and cash equivalents include short-term, liquid investments with an original maturity of three months or less and include money market fund accounts. Cash equivalents, which are the Company’s investments in money market fund accounts, are presented on the Company’s consolidated schedule of investments, and within investments on the Company’s consolidated statement of assets and liabilities.

E. Investment Valuation, Fair Value—the Company conducts the valuation of its investments consistent with GAAP and the 1940 Act. The Company’s investments will be valued no less frequently than quarterly, in accordance with the terms of Topic 820 of the Financial Accounting Standards Board’s Accounting Standards Codification, Fair Value Measurement and Disclosures (“ASC 820”).

Pursuant to Rule 2a-5 under the 1940 Act, the Board of Directors has designated the Advisor as the “valuation designee” to perform fair value determinations of the Company’s portfolio holdings, subject to oversight by and periodic reporting to the Board. The valuation designee performs fair valuation of the Company’s portfolio holdings in accordance with the Advisor’s Valuation Program, as approved by the Board.

Traded Investments (Level 1 or Level 2)

Investments for which market quotations are readily available will typically be valued at those market quotations. Traded investments such as corporate bonds, preferred stock, bank notes, loans or loan participations are valued by using the bid price provided by an independent pricing service, by an independent broker, the agent bank, syndicate bank or principal market maker. When price quotes for investments are not available, or such prices are stale or do not represent fair value in the judgment of the Company’s Advisor, fair market value will be determined using the Advisor’s valuation process for investments that are privately issued or otherwise restricted as to resale.

The Company may also invest, to a lesser extent, in equity securities purchased in conjunction with debt investments. While the Company anticipates these equity securities to be issued by privately held companies, the Company may hold equity securities that are publicly traded. Equity securities listed on any exchange other than the NASDAQ Stock Market, Inc. (“NASDAQ”) are valued, except as indicated below, at the last sale price on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the most recent bid and ask prices on such day. Securities admitted to trade on the NASDAQ are valued at the NASDAQ official closing price. Equity securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Equity securities traded in the over-the-counter market, but excluding securities admitted to trading on the NASDAQ, are valued at the closing bid prices.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Non-Traded Investments (Level 3)

Investments that are privately issued or otherwise restricted as to resale, as well as any security for which (a) reliable market quotations are not available in the judgment of the Company’s Advisor, or (b) the independent pricing service or independent broker does not provide prices or provides a price that in the judgment of the Company’s Advisor is stale or does not represent fair value, shall each be valued in a manner that most fairly reflects fair value of the security on the valuation date. The Company expects that a significant majority of its investments will be Level 3 investments. Unless otherwise determined by the Advisor, the following valuation process is used for the Company’s Level 3 investments:

●

Valuation Designee. The applicable investments will be valued no less frequently than quarterly by the Advisor, with new investments valued at the time such investment was made. The value of each Level 3 investment will be initially reviewed by the persons responsible for such portfolio company or investment. The Advisor will use a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs to determine a preliminary value. The Advisor will specify the titles of the persons responsible for determining the fair value of Company investments, including by specifying the particular functions for which they are responsible, and will reasonably segregate fair value determinations from the portfolio management of the Company such that the portfolio manager(s) may not determine, or effectively determine by exerting substantial influence on, the fair values ascribed to portfolio investments.

●

Valuation Firm. Quarterly, a third-party valuation firm engaged by the Advisor reviews the valuation methodologies and calculations employed for each of the Company’s investments that the Advisor has placed on the “watch list” and approximately 25% of the Company’s remaining investments. The third-party valuation firm will review and independently value all of the Level 3 investments at least once per year, on a rolling twelve-month basis. The quarterly report issued by the third-party valuation firm will provide positive assurance on the fair values of the investments reviewed.

●

Oversight. The Board has appointed the Advisor as the valuation designee for the Company for purposes of making determinations of fair value as permitted by Rule 2a-5 under the 1940 Act. The Audit Committee shall aid the Board in overseeing the Advisor’s fair valuation of securities that are not publicly traded or for which current market values are not readily available. The Audit Committee shall meet quarterly to review the fair value determinations, processes and written reports of the Advisor as part of the Board’s oversight responsibilities.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to the Company’s financial statements will express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on the Company’s financial statements.

F. Interest Income Recognition— Interest income is recorded on an accrual basis and includes the accretion of discounts, amortization of premiums and payment-in-kind (“PIK”) interest. Discounts from and premiums to par value on investments purchased are accreted/amortized into interest income over the life of the respective security using the effective yield method. To the extent loans contain PIK provisions, PIK interest, computed at the contractual rate specified in each applicable agreement, is accrued and recorded as interest income and added to the principal balance of the loan. PIK interest income added to the principal balance is generally collected upon repayment of the outstanding principal. The Company does not accrue PIK interest if, in the opinion of the Advisor, the portfolio company valuation indicates that the PIK interest is not likely to be collectible. If the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through PIK interest income. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders in the form of dividends for the year the income was earned, even though the Company has not yet collected the cash. The amortized cost of investments represents the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest. For the nine months ended September 30, 2023, the Company had $1,310 of PIK interest included in interest income, which represents 1.1% of aggregate interest income. There was no PIK interest for the nine months ended September 30, 2022.

Loans are generally placed on non-accrual status when it has been determined that a significant impairment in the financial condition and ability of the borrower to repay principal and interest has occurred and is expected to continue such that it is probable the collectability of full amount of the loan (principal and interest) is doubtful. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. If cash payments are received subsequent to a loan being placed on non-accrual status, these payments will first be applied to previously accrued but uncollected interest, then to recover the principal. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Non-accrual loans are restored to accrual status when past due principal and interest are paid or there is no longer a reasonable doubt that such principal or interest will be collected in full and, in the Company’s judgment, principal and interest are likely to remain current. The Company may make exceptions to this policy if the loan has sufficient collateral value (i.e., typically measured as enterprise value of the portfolio company) or is in the process of collection. As of September 30, 2023, the Company had one investment on non-accrual status, which comprised 1.9% and 1.1%, respectively, of total debt investments at cost and fair value. As of December 31, 2022, the Company did not have any investments in portfolio companies on non-accrual status.

G. Debt Issuance Costs—Costs incurred by the Company related to the issuance of its debt (credit facilities) are capitalized and amortized over the period the debt is outstanding. The Company has classified the costs incurred to issue its credit facilities as a deduction from the carrying value of the credit facilities on the Statement of Assets and Liabilities. For the purpose of calculating the Company’s asset coverage ratios pursuant to the 1940 Act, deferred issuance costs are not deducted from the carrying value of debt or preferred stock.

H. Dividends to Common Stockholders—Distributions to common stockholders are recorded on the record date. The amount to be paid out as a dividend is determined by the Company’s board of directors each quarter and is generally based upon the earnings estimated by management and considers the level of undistributed taxable income carried forward from the prior year for distribution in the current year. Net realized capital gains, if any, are generally distributed, although the Company may decide to retain such capital gains for investment.

I. Organizational Costs—organizational expenses include costs and expenses relating to the formation and organization of the Company. The Company has reimbursed the Advisor for these costs which are expensed as incurred.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

J. Offering Costs—offering costs include costs and expenses incurred in connection with the offering of the Company’s common stock. These initial costs were capitalized as deferred offering expenses and included in prepaid expenses and other assets on the Statement of Assets and Liabilities. These costs were amortized over a twelve-month period beginning with the commencement of operations. These expenses consist primarily of legal fees and other costs incurred in connection with the Company’s share offerings, the preparation of the Company’s registration statement and registration fees. The Company reimbursed the Advisor for these costs.

K. Income Taxes—it is the Company’s intention to continue to be treated as and to qualify each year for special tax treatment afforded a RIC under the Code. As long as the Company meets certain requirements that govern its sources of income, diversification of assets and timely distribution of earnings to stockholders, the Company will not be subject to U.S. federal income tax.

The Company must pay distributions equal to 90% of its investment company taxable income (ordinary income and short-term capital gains) to qualify as a RIC and it must distribute all of its taxable income (ordinary income, short-term capital gains and long-term capital gains) to avoid federal income taxes. The Company will be subject to federal income tax on any undistributed portion of income. For purposes of the distribution test, the Company may elect to treat as paid on the last day of its taxable year all or part of any distributions that are declared after the end of its taxable year if such distributions are declared before the due date of its tax return, including any extensions.

All RICs are subject to a non-deductible 4% excise tax on income that is not distributed on a timely basis in accordance with the calendar year distribution requirements. To avoid the tax, the Company must distribute during each calendar year an amount at least equal to the sum of (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of its net capital gains for the one-year period ending on December 31, the last day of our taxable year, and (iii) undistributed amounts from previous years on which the Company paid no U.S. federal income tax. A distribution will be treated as paid during the calendar year if it is paid during the calendar year or declared by the Company in October, November or December of such year, payable to stockholders of record on a date during such months and paid by the Company no later than January of the following year. Any such distributions paid during January of the following year will be deemed to be received by stockholders on December 31 of the year the distributions are declared, rather than when the distributions are actually received.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its 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 reserved 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.

L. Commitments and Contingencies—in the normal course of business, the Company may enter into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 3. Agreements and Related Party Transactions

A. Administration Agreement—on February 5, 2021, the Company entered into an Administration Agreement with its Advisor, which serves as its Administrator and will provide or oversee the performance of its required administrative services and professional services rendered by others, which will include (but are not limited to), accounting, payment of our expenses, legal, compliance, operations, technology and investor relations, preparation and filing of its tax returns, and preparation of financial reports provided to its stockholders and filed with the SEC. On March 7, 2023, the Board approved a one-year renewal of the Administration Agreement through March 15, 2024.

The Company will reimburse the Administrator for its costs and expenses incurred in performing its obligations under the Administration Agreement, which may include, after completion of our Exchange Listing, its allocable portion of office facilities, overhead, and compensation paid to or compensatory distributions received by its officers (including our Chief Compliance Officer and Chief Financial Officer) and its respective staff who provide services to the Company. As the Company reimburses the Administrator for its expenses, the Company will indirectly bear such cost. The Administration Agreement may be terminated by either party with 60 days’ written notice.

B. Investment Advisory Agreement—on February 5, 2021, the Company entered into an Investment Advisory Agreement with its Advisor. Pursuant to the Investment Advisory Agreement with its Advisor, the Company will pay its Advisor a fee for investment advisory and management services consisting of two components—a base management fee and an incentive fee. The Advisor may, from time-to-time, grant waivers on the Company’s obligations, including waivers of the base management fee and/or incentive fee, under the Investment Advisory Agreement. The Investment Advisory Agreement may be terminated by either party with 60 days’ written notice. On March 7, 2023, the Board approved a one-year renewal of the Investment Advisory Agreement through March 15, 2024.

Base Management Fee

Prior to an Exchange Listing, the base management fee will be calculated at an annual rate of 0.90% of the fair market value of the Company’s investments including, in each case, assets purchased with borrowed funds or other forms of leverage, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase. After an Exchange Listing, the base management fee will be calculated at an annual rate of 1.50% of the fair market value of the Company’s investments. However, following an Exchange Listing, if borrowed funds or other forms of leverage utilized to finance the Company’s investments is greater than a debt-to-equity ratio of 1.0x, the base management fee will be 1.00% of the fair market value of the portion of the Company’s investments financed with borrowed funds or other forms of leverage above a 1.0x debt-to-equity ratio.

The base management fee will be payable quarterly in arrears and calculated based on the average of the Company’s fair market value of investments, at the end of the two most recently completed calendar quarters, including, in each case, assets purchased with borrowed funds or other forms of leverage, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase. Base management fees for any partial quarter will be appropriately pro-rated.

For the three months ended September 30, 2023 and 2022, the Company incurred base management fees of $2,905 and $1,908, respectively.

For the nine months ended September30, 2023 and 2022, the Company incurred base management fees of $8,438 and $4,732, respectively.

Incentive Fee

The Company will also pay the Advisor an incentive fee. The incentive fee will consist of two parts—an incentive fee on income and an incentive fee on capital gains. Described in more detail below, these components of the incentive fee will be largely independent of each other with the result that one component may be payable even if the other is not.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Incentive Fee on Income

The incentive fee based on income (the “income incentive fee”) is determined and paid quarterly in arrears in cash (subject to the limitations described in “Payment of Incentive Fees” below). The Company’s quarterly pre-incentive fee net investment income must exceed a preferred return of 1.50% of the Company’s net asset value (“NAV”) at the end of the immediately preceding calendar quarter (6.0% annualized but not compounded) (the “Hurdle Amount”) in order for the Company to receive an income incentive fee. The income incentive fee is calculated as follows:

●

Prior to an Exchange Listing: 100% of our pre-incentive fee net investment income for the immediately preceding calendar quarter in excess of 1.50% of the Company’s NAV at the end of the immediately preceding calendar quarter until the Advisor has received 10% of the total pre-incentive fee net income for that calendar quarter and, for pre-incentive fee net investment income in excess of 1.6667%, 10% of all remaining pre-incentive fee net investment income for that quarter.

●

After an Exchange Listing: 100% of the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter in excess of 1.50% of the Company’s NAV at the end of the immediately preceding calendar quarter until the Advisor has received 15% of the total pre-incentive fee net income for that calendar quarter and, for pre-incentive fee net investment income in excess of 1.7647%, 15% of all remaining pre-incentive fee net investment income for that quarter.

Incentive Fee on Capital Gains

The incentive fee on capital gains (the “capital gains incentive fee”) will be calculated and payable in arrears in cash as follows:

●

Prior to an Exchange Listing: 10% of the Company’s realized capital gains, if any, on a cumulative basis from formation through (a) the day before an Exchange Listing, (b) upon consummation of a Liquidity Event or (c) upon the termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis. For the purpose of computing the capital gain incentive fee, the calculation methodology will look through derivative financial instruments or swaps as if the Company owned the reference assets directly.

●

After an Exchange Listing: 15% of the Company’s realized capital gains, if any, on a cumulative basis from formation through the end of a given calendar year or upon termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.

Payment of Incentive Fees

Prior to an Exchange Listing, any incentive fees earned by the Advisor shall accrue as earned but only become payable in cash to the Advisor upon consummation of an Exchange Listing. To the extent the Company does not complete an Exchange Listing, the incentive fees will be payable to the Advisor (a) upon consummation of a sale of the Company or (b) once substantially all the proceeds from a Company Liquidation payable to the Company’s stockholders have been distributed to such stockholders.

For the three months ended September 30, 2023, the Company incurred incentive fees on income of $2,371 and no incentive fees on capital gains.

For the three months ended September 30, 2022, the Company incurred incentive fees on income of $1,230 and no incentive fees on capital gains.

For the nine months ended September 30, 2023, the Company incurred incentive fees on income of $6,929 and no incentive fees on capital gains.

For the nine months ended September 30, 2022, the Company incurred incentive fees on income of $2,960 and no incentive fees on capital gains.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 4. Investments

The following table presents the composition of the Company’s investment portfolio at amortized cost and fair value as of September 30, 2023 and December 31, 2022.

	September 30, 2023				December 31, 2022
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
First-lien senior secured debt investments	$	1,261,521	$	1,269,539	$	1,141,538	$	1,157,971
Equity investments		6,855		8,064		6,250		7,148
Short-term investments		16,628		16,628		9,847		9,847
Total Investments	$	1,285,004	$	1,294,231	$	1,157,635	$	1,174,966

As of September 30, 2023 and December 31, 2022, $68,159 and $45,901, respectively, of the Company’s total assets were non-qualifying assets, as defined by Section 55(a) of the 1940 Act.

The Company uses Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of its portfolio companies.

The industry composition of long-term investments based on fair value as of September 30, 2023 and December 31, 2022 was as follows:

	September 30, 2023			December 31, 2022

Trading companies & distributors		13.8	%		12.9	%
Food products		10.9	%		10.9	%
Commercial services & supplies		10.5	%		11.9	%
Health care providers & services		8.5	%		9.8	%
Containers & packaging		4.8	%		4.5	%
Professional services		4.8	%		5.5	%
Aerospace & defense		4.3	%		4.1	%
IT services		4.1	%		3.9	%
Machinery		4.0	%		2.2	%
Textiles, apparel & luxury goods		3.6	%		4.1	%
Leisure products		3.5	%		2.3	%
Personal care products		3.1	%		1.7	%
Chemicals		2.9	%		2.9	%
Software		2.7	%		3.0	%
Diversified telecommunication services		2.5	%		2.6	%
Wireless telecommunication services		2.4	%		2.5	%
Insurance		2.3	%		1.3	%
Automobile components		2.2	%		2.3	%
Household durables		1.6	%		1.8	%
Building products		1.6	%		3.4	%
Health care equipment & supplies		1.6	%		1.8	%
Household products		1.4	%		1.6	%
Biotechnology		0.9	%		1.0	%
Specialty retail		0.7	%		0.7	%
Capital Markets		0.7	%		-	%
Pharmaceuticals		0.6	%		0.6	%
Electronic equipment, instruments & components		-	%		0.3	%
Asset management & custody banks		-	%		0.4	%
Total		100.0	%		100.0	%

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 5. Fair Value

The Fair Value Measurement Topic of the FASB Accounting Standards Codification (ASC 820) defines fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants under current market conditions at the measurement date. As required by ASC 820, the Company has performed an analysis of all investments measured at fair value to determine the significance and character of all inputs to their fair value determination. Inputs are the assumptions, along with considerations of risk, that a market participant would use to value an asset or a liability. In general, observable inputs are based on market data that is readily available, regularly distributed and verifiable that the Company obtains from independent, third-party sources. Unobservable inputs are developed by the Company based on its own assumptions of how market participants would value an asset or a liability.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories.

Level 1 — Valuations based on quoted unadjusted prices for identical instruments in active markets traded on a national exchange to which the Company has access at the date of measurement.

Level 2 — Valuations based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Company’s own assumptions that market participants would use to price the asset or liability based on the best available information.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

The following tables present the fair value hierarchy of investments as of September 30, 2023 and December 31, 2022. Note that the valuation levels below are not necessarily an indication of the risk or liquidity associated with the underlying investment.

	Fair Value Hierarchy as of September 30, 2023
Investments:	Level 1		Level 2		Level 3		Total
First-lien senior secured debt investments	$	-	$	-	$	1,269,539	$	1,269,539
Equity investments		-		-		8,064		8,064
Short-term investments		16,628		-		-		16,628
Total Investments	$	16,628	$	-	$	1,277,603	$	1,294,231

	Fair Value Hierarchy as of December 31, 2022
Investments:	Level 1		Level 2		Level 3		Total
First-lien senior secured debt investments	$	-	$	-	$	1,157,971	$	1,157,971
Equity investments		-		-		7,148		7,148
Short-term investments		9,847		-		-		9,847
Total Investments	$	9,847	$	-	$	1,165,119	$	1,174,966

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

The following tables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the three and nine months ended September 30, 2023 and 2022.

	First-lien
	senior secured			Private
	debt investments			equity investments			Total
For the three months ended September 30, 2023
Fair value, beginning of period	$	1,276,048		$	7,903		$	1,283,951
Purchases of investments, including PIK, if any		40,064			418			40,482
Proceeds from sales of investments and principal repayments		(41,776	)		-			(41,776	)
Net change in unrealized gain (loss)		(7,240	)		(257	)		(7,497	)
Net realized gain (loss)		-			-			-
Net accretion of discount on investments		2,443			-			2,443
Transfers into (out of) Level 3		-			-			-
Fair value, end of period	$	1,269,539		$	8,064		$	1,277,603

	First-lien
	senior secured			Private
	debt investments			equity investments		Total
For the three months ended September 30, 2022
Fair value, beginning of period	$	716,581		$	1,383	$	717,964
Purchases of investments, including PIK, if any		284,098			3,250		287,348
Proceeds from sales of investments and principal repayments		(45,917	)		-		(45,917	)
Net change in unrealized gain (loss)		2,822			495		3,317
Net realized gain (loss)		47			-		47
Net accretion of discount on investments		1,275			-		1,275
Transfers into (out of) Level 3		-			-		-
Fair value, end of period	$	958,906		$	5,128	$	964,034

	First-lien
	senior secured			Private
	debt investments			Equity investments		Total
For the nine months ended September 30, 2023
Fair value, beginning of period	$	1,157,971		$	7,148	$	1,165,119
Purchases of investments, including PIK, if any		218,541			605		219,146
Proceeds from sales of investments and principal repayments		(105,319	)		-		(105,319	)
Net change in unrealized gain (loss)		(8,414	)		311		(8,103	)
Net realized gain (loss)		-			-		-
Net accretion of discount on investments		6,760			-		6,760
Transfers into (out of) Level 3		-			-		-
Fair value, end of period	$	1,269,539		$	8,064	$	1,277,603

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

	First-lien
	senior secured			Private
	debt investments			Equity investments		Total
For the nine months ended September 30, 2022
Fair value, beginning of period	$	578,195		$	250	$	578,445
Purchases of investments, including PIK, if any		464,549			4,250		468,799
Proceeds from sales of investments and principal repayments		(89,694	)		-		(89,694	)
Net change in unrealized gain (loss)		2,499			628		3,127
Net realized gain (loss)		70			-		70
Net accretion of discount on investments		3,287			-		3,287
Transfers into (out of) Level 3		-			-		-
Fair value, end of period	$	958,906		$	5,128	$	964,034

For the three and nine months ended September 30, 2023 and 2022, the Company did not recognize any transfers to or from Level 3. The increase in unrealized gain (loss) relates to investments that were held during the period. The Company includes these unrealized gains and losses on the Statement of Operations – Net Change in Unrealized Gains (Losses).

Valuation Techniques and Unobservable Inputs

Non-traded debt investments are typically valued using either a market yield analysis or an enterprise value analysis. For debt investments that are not considered to be credit impaired, the Advisor uses a market yield analysis to determine fair value. If the debt investment is considered to be credit impaired (which is determined by performing an enterprise value analysis), the Advisor will use the enterprise value analysis or a liquidation basis analysis to determine fair value.

To determine fair value using a market yield analysis, the Advisor discounts the contractual cash flows of each investment at an appropriate discount rate (the market yield). To determine the estimated market yield for its debt investments, the Advisor analyzes changes in the risk/reward (measured by yields and leverage) of middle market indices as compared to changes in risk/reward for the underlying investment and estimates the appropriate discount rate for such debt investment. In this context, the discount rate and the fair market value of the investment is impacted by the structure and pricing of the security relative to current market yields for similar investments in similar businesses as well as the financial performance of such business. In performing this analysis, the Advisor considers data sources including, but not limited to: (i) industry publications, such as S&P Global’s High-End Middle Market Lending Review; Thomson Reuter’s Refinitiv Middle Market Monthly Stats; CapitalIQ; Pitchbook News; The Lead Left, and other data sources; (ii) comparable investments reviewed or completed by affiliates of the Advisor, and (iii) information obtained and provided by the Advisor’s independent valuation managers.

To determine if a debt investment is credit impaired, the Advisor estimates the enterprise value of the business and compares such estimate to the outstanding indebtedness of such business. The Advisor utilizes the following valuation methodologies to determine the estimated enterprise value of the company: (i) analysis of valuations of publicly traded companies in a similar line of business (“public company comparable analysis”), (ii) analysis of valuations of M&A transaction valuations for companies in a similar line of business (“precedent transaction analysis”), (iii) discounted cash flows (“DCF analysis”) and (iv) other valuation methodologies.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

In determining the non-traded debt investment valuations, the following factors are considered, where relevant: the nature and realizable value of any collateral; the company’s ability to make interest payments, amortization payments (if any) and other fixed charges; call features, put features and other relevant terms of the debt security; the company’s historical and projected financial results; the markets in which the company does business; changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be valued; and other relevant factors.

Equity investments in private companies are typically valued using one of or a combination of the following valuation techniques: (i) public company comparable analysis, (ii) precedent transaction analysis and (iii) DCF analysis.

Under all of these valuation techniques, the Advisor estimates operating results of the companies in which it invests, including earnings before interest expense, income tax expense, depreciation and amortization (“EBITDA”) and free cash flow. These estimates utilize unobservable inputs such as historical operating results, which may be unaudited, and projected operating results, which will be based on operating assumptions for such company. Investment performance data utilized will be the most recently available as of the measurement date which in many cases may reflect up to a one quarter lag in information. These estimates will be sensitive to changes in assumptions specific to such company as well as general assumptions for the industry. Other unobservable inputs utilized in the valuation techniques outlined above include: discounts for lack of marketability, selection of publicly traded companies, selection of similar precedent transactions, selected ranges for valuation multiples and expected required rates of return (discount rates).

Quantitative Table for Valuation Techniques

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of September 30, 2023 and December 31, 2022. The tables are not intended to be all-inclusive but instead capture the significant unobservable inputs relevant to the Advisor’s determination of fair value. The Company calculates weighted average, based on the value of the unobservable input of each investment relative to the fair value of the investment compared to the total fair value of all investments.

	As of September 30, 2023
			Valuation	Unobservable				Weighted
	Fair Value		Technique	Input	Range			Average
First-lien senior secured debt investments	$	1,269,539	Discounted cash flow analysis	Discount rate		9.3% - 15.0	%	11.1	%

Equity investments	$	1,652	Precedent Transaction Analysis	Original cost		1.0		1.0
		6,412	Comparable Multiples	EV / EBITDA		5.5 - 17.2		12.3
	$	1,277,603

	As of December 31, 2022
			Valuation	Unobservable				Weighted
	Fair Value		Technique	Input	Range			Average
First-lien senior secured debt investments	$	1,157,971	Discounted cash flow analysis	Discount rate		8.4% - 15.0	%		10.1	%

Equity investments	$	1,988	Precedent Transaction Analysis	Original Cost		1.0			1.0
		5,160	Comparable Multiples	EV/ EBITDA		6.6 - 17.2			12.7
	$	1,165,119

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 6. Debt

Subscription Credit Agreement

As of September 30, 2023, the Company had a $125,000 credit agreement (the “Subscription Credit Agreement”) with certain lenders party thereto. The Subscription Credit Agreement permits the Company to elect the commitment amount each quarter to borrow up to $125,000, subject to availability under the borrowing base which is calculated based on the unused capital commitments of the investors meeting various eligibility requirements. The interest rate under the Subscription Credit Agreement is equal to the Secured Overnight Funding Rate (“SOFR”) plus 1.975% (subject to a 0.275% SOFR floor). The Company is also required to pay a commitment fee of 0.25% per annum on any unused portion of the Subscription Credit Agreement. The Company also pays an extension fee of 0.05% per quarter on the elected commitment amount on the first day of each calendar quarter. The Subscription Credit Agreement will expire on December 31, 2023.

For the nine months ended September 30, 2023 and 2022, the average amount of borrowings outstanding under the Subscription Credit Agreement were $49,220 and $53,333, respectively, with a weighted average interest rate of 6.93% and 3.02%, respectively. As of September 30, 2023, the Company had $25,000 outstanding under the Subscription Credit Agreement at a weighted average interest rate of 7.35%.

Corporate Credit Facility

As of September 30, 2023, the Company had a senior secured revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of $400,000. The Company entered into the Corporate Credit Facility on February 18, 2022. The Corporate Credit Facility’s commitment termination date and the final maturity date are February 18, 2026 and February 18, 2027, respectively. The Corporate Credit Facility also provides for a feature that allows the Company, under certain circumstances, to increase the overall size of the Corporate Credit Facility to a maximum of $550,000. The interest rate on the Corporate Credit Facility is equal to Term SOFR (a forward-looking rate based on SOFR futures) plus an applicable spread of 2.35% per annum or an “alternate base rate” (as defined in the agreements governing the Corporate Credit Facility) plus an applicable spread of 1.25%. The Company is also required to pay a commitment fee of 0.375% per annum on any unused portion of the Corporate Credit Facility.

Under the Corporate Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’ equity, and (e) maintaining a ratio of total assets (less total liabilities not representing indebtedness) to total indebtedness of the Company and its consolidated subsidiaries of not less than 1.5:1.0. These covenants are subject to important limitations and exceptions that are described in the agreements governing the Corporate Credit Facility. Amounts available to borrow under the Corporate Credit Facility are subject to compliance with a borrowing base that applies different advance rates to different types of assets (based on their value as determined pursuant to the Corporate Credit Facility) that are pledged as collateral. The Corporate Credit Facility is secured by certain assets in the Company’s portfolio and excludes investments held by Kayne Anderson BDC Financing LLC (“KABDCF”) under the Revolving Funding Facility (as defined below).

For the nine months ended September 30, 2023 and 2022, the average amount of borrowings outstanding under the Corporate Credit Facility was $265,344 and $101,617, respectively, with a weighted average interest rate of 7.24% and 3.61%, respectively. As of September 30, 2023, the Company had $192,000 outstanding under the Corporate Credit Facility at a weighted average interest rate of 7.67%.

Revolving Funding Facility

As of September 30, 2023, the Company had a senior secured revolving funding facility (the “Revolving Funding Facility”), that has a total commitment of $455,000. The Company and KABDCF entered into the Revolving Funding Facility on February 18, 2022, and on June 29, 2023, amended the facility and increased the commitment amount from $350,000 to $455,000. The interest rate and all other terms remained unchanged. The Revolving Funding Facility is secured by all of the assets held by KABDCF and the Company has agreed that it will not grant or allow a lien on the membership interest of KABDCF. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are February 18, 2025 and February 18, 2027, respectively. The interest rate on the Revolving Funding Facility is equal to daily SOFR plus 2.75% per annum. KABDCF is also required to pay a commitment fee of between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility. Amounts available to borrow under the Revolving Funding Facility are subject to a borrowing base that applies different advance rates to different types of assets held by KABDCF and is subject to limitations with respect to the loans securing the Revolving Funding Facility, including restrictions on, loan size, industry concentration, payment frequency and status, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and KABDCF are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the agreements governing the Revolving Funding Facility.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

For the nine months ended September 30, 2023 and 2022, the average amount of borrowings outstanding under the Revolving Funding Facility was $285,033 and $130,220, respectively, with a weighted average interest rate of 7.62% and 3.44%, respectively. As of September 30, 2023, the Company had $306,000 outstanding under the Revolving Funding Facility at a weighted average interest rate of 8.05 %.

Loan and Security Agreement

On February 18, 2022, the Company and KABDCF established two new credit facilities (described above) and fully repaid the $150,000 outstanding balance on the Loan and Security Agreement (the “LSA”), which was entered into by KABDCF on February 5, 2021. Advances under the LSA had an interest rate of LIBOR plus 4.25% (subject to a 1.00% LIBOR floor).

For the nine months ended September 30, 2022, the average amount of borrowings outstanding under the LSA were $27,253 with a weighted average interest rate of 5.25%.

Senior Unsecured Notes

On June 29, 2023, the Company completed a private placement of $75,000 of senior unsecured notes (the “Notes”). Net proceeds from the offering was used to refinance existing debt and for general corporate purposes.

The table below sets forth a summary of the key terms of each series of Notes outstanding at September 30, 2023.

	Principal				Estimated
	Outstanding				Fair Value		Fixed
	September 30,		Unamortized		September 30,		Interest
Series	2023		Issuance Costs		2023		Rate			Maturity
A	$	25,000	$	295	$	25,256		8.65	%	6/30/2027
B		50,000		608		50,369		8.74	%	6/30/2028
	$	75,000	$	903	$	75,625

Holders of the Notes are entitled to receive cash interest payments semi-annually (on January 30 and July 30) at the fixed rate. As of September 30, 2023, the weighted average interest rate on the outstanding Notes was 8.71%.

As of September 30, 2023, the Notes were rated “BBB” by Kroll Bond Rating Agency (“KBRA”). The Company is required to maintain a current rating from one rating agency with respect to the Notes. In the event the Company does not maintain a current rating from a rating agency for a specified period of time or the credit rating on the Notes falls below “BBB-” (a “Below Investment Grade Event”), the interest rate per annum on the Notes will increase by 1.0% during the period the Notes are rated below “BBB-”. In the event the Company’s Secured Debt Ratio exceeds 60% (until June 29, 2024) or 55% (on or after June 29, 2024) (a “Secured Debt Ratio Event”), the interest rate per annum on the Notes will increase by 1.5% during the period the ratio is above stated percentage. If a Below Investment Grade Event and a Secured Debt Ratio Event is continuing at the same time the aggregate increase in interest rate per annum will not exceed 2.0%.

The Notes were issued in private placement offerings to institutional investors and are not listed on any exchange or automated quotation system. The Notes contain various covenants related to other indebtedness, liens and limits on the Company’s overall leverage. The Company must maintain a minimum amount of shareholder equity and the Company’s asset coverage ratio must be greater than 150% as of the last business day of each fiscal quarter. The Notes are redeemable in certain circumstances at the option of the Company and may be redeemed under certain circumstances to cure the asset coverage ratio covenant.

The Notes are unsecured obligations of the Company and, upon liquidation, dissolution or winding up of the Company, will rank: (1) senior to all of the Company’s outstanding common shares; (2) on parity with any unsecured creditors of the Company and any unsecured senior securities representing indebtedness of the Company; and (3) junior to any secured creditors of the Company.

At September 30, 2023, the Company was in compliance with all covenants under the Notes agreements.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Debt obligations consisted of the following as of September 30, 2023 and December 31, 2022.

	September 30, 2023

	Aggregate Principal Committed		Outstanding Principal		Amount Available⁽¹⁾		Net Carrying Value⁽²⁾
Notes	$	75,000	$	75,000	$	-	$	74,097
Corporate Credit Facility		400,000		192,000		208,000		190,083
Revolving Funding Facility		455,000		306,000		20,324		303,568
Subscription Credit Agreement		125,000		25,000		100,000		24,963
Total debt	$	1,055,000	$	598,000	$	328,324	$	592,711

(1)

The amount available reflects any limitations related to the Credit Facility’s borrowing base as of September 30, 2023.

(2)

The carrying value of the Notes, Corporate Credit Facility, Revolving Funding Facility, and Subscription Credit Agreement are presented net of deferred financing costs totaling $5,289.

	December 31, 2022

	Aggregate Principal Committed		Outstanding Principal		Amount Available⁽¹⁾		Net Carrying Value⁽²⁾
Corporate Credit Facility	$	400,000	$	269,000	$	131,000	$	266,483
Revolving Funding Facility		350,000		200,000		21,793		197,173
Subscription Credit Agreement		125,000		108,000		17,000		107,935
Total debt	$	875,000	$	577,000	$	169,793	$	571,591

(1)

The amount available reflects any limitations related to the Credit Facility’s borrowing base as of December 31, 2022.

(2)

The carrying value of the Corporate Credit Facility, Revolving Funding Facility and Subscription Credit Agreement are presented net of deferred financing costs totaling $5,409.

For the three and nine months ended September 30, 2023 and 2022, the components of interest expense were as follows:

	For the three months ended
	September 30, 2023			September 30, 2022
Interest expense	$	13,119		$	4,976
Amortization of debt issuance costs		752			528
Total interest expense	$	13,871		$	5,504
Average interest rate		8.9	%		5.3	%
Average borrowings	$	617,598		$	410,146

	For the nine months ended
	September 30, 2023			September 30, 2022
Interest expense	$	36,460		$	9,792
Amortization of debt issuance costs		1,936			1,533
Total interest expense	$	38,396		$	11,325
Average interest rate		8.2	%		4.8	%
Average borrowings	$	625,421		$	312,423

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 7. Share Transactions

Common Stock Issuances

The following table summarizes the number of common stock shares issued and aggregate proceeds received from such issuances related to the Company’s capital call notices pursuant to subscription agreements with investors for the nine months ended September 30, 2023 and 2022.

For the nine months ended September 30, 2023
	Offering				Aggregate
	price per		Common stock		offering
Common stock issue date	share		shares issued		amount
April 4, 2023	$	16.61		3,010,942	$	50,000
August 8, 2023	$	16.82		2,411,582		40,575
Total common stock issued				5,422,524	$	90,575

For the nine months ended September 30, 2022
	Offering				Aggregate
	price per		Common stock		offering
Common stock issue date	share		shares issued		amount
January 24, 2022	$	16.36		4,191,292	$	68,582
July 22, 2022	$	16.30		7,666,830		125,000
Total common stock issued				11,858,122	$	193,582

As of September 30, 2023, the Company had subscription agreements with investors for an aggregate capital commitment of $887,003 to purchase shares of common stock. Of this amount, the Company had $228,709 of undrawn commitments as of September 30, 2023. See Note 11 – Subsequent Events.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Dividends and Dividend Reinvestment

The following table summarizes the dividends declared and payable by the Company for the nine months ended September 30, 2023 and 2022. See Note 11 – Subsequent Events.

For the nine months ended September 30, 2023
	Dividend	Dividend	Dividend
	record	payment	per
Dividend declaration date	date	date	share

March 7, 2023	March 31, 2023	April 14, 2023	$	0.47
May 10, 2023	June 30, 2023	July 14, 2023		0.53
August 10, 2023	September 29, 2023	October 13, 2023		0.53
Total dividends declared			$	1.53

For the nine months ended September 30, 2022
	Dividend	Dividend	Dividend
	record	payment	per
Dividend declaration date	date	date	share
April 19, 2022	April 20, 2022	April 26, 2022	$	0.26
July 19, 2022	July 20, 2022	July 27, 2022		0.30
Total dividends declared			$	0.56

The following tables summarize the amounts received and shares of common stock issued to shareholders pursuant to the Company’s dividend reinvestment plan (“DRIP”) for the nine months ended September 30, 2023 and 2022. See Note 11 – Subsequent Events.

	Dividend	DRIP
	payment	shares		DRIP
Dividend record date	date	issued		value
December 29, 2022	January 13, 2023		57,860	$	955
March 31, 2023	April 14, 2023		65,733		1,089
June 30, 2023	July 14, 2023		81,527		1,352
			205,120	$	3,396

	Dividend	DRIP
	payment	shares		DRIP
Dividend record date	date	issued		value
December 29, 2021	January 18, 2022		55,590	$	902
April 20, 2022	April 26, 2022		75,270		1,222
July 20, 2022	July 27, 2022		88,081		1,431
			218,941	$	3,555

For the dividend declared on August 10, 2023 and paid on October 13, 2023, there were 96,731 shares issued with a DRIP value of $1,586. These shares are excluded from the table above, as the DRIP shares were issued after September 30, 2023.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 8. Commitments and Contingencies

The Company had an aggregate of $109,130 and $149,338, respectively, of unfunded commitments to provide debt financing to its portfolio companies as of September 30, 2023 and December 31, 2022. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and certain operational metrics. The commitment period for these amounts may be shorter than the maturity date if drawn or funded. These commitments are not reflected in the Company’s consolidated statement of assets and liabilities. Consequently, such commitments result in an element of credit risk in excess of the amount recognized in the Company’s consolidated statement of assets and liabilities.

A summary of the composition of the unfunded commitments as of September 30, 2023 and December 31, 2022 is shown in the table below.

	As of		As of
	September 30, 2023		December 31, 2022
Alcami Corporation (Alcami)	$	2,543	$	2,543
Allcat Claims Service, LLC		5,370		20,106
Allentown, LLC		459		2,040
American Equipment Holdings LLC		1,449		2,956
American Soccer Company, Incorporated (SCORE)		2,720		2,838
Arborworks Acquisition LLC		-		1,563
Atria Wealth Solutions, Inc.		-		2,996
Basel U.S. Acquisition Co., Inc. (IAC)		1,622		1,622
BCI Burke Holding Corp.		4,659		4,659
BLP Buyer, Inc. (Bishop Lifting Products)		387		1,047
BR PJK Produce, LLC (Keany)		1,429		1,429
Brightview, LLC		2,672		2,904
Centerline Communications, LLC		-		1,800
CGI Automated Manufacturing, LLC		1,630		2,717
City Line Distributors, LLC		5,238		-
Curio Brands, LLC		1,776		2,722
DISA Holdings Corp. (DISA)		7,194		7,769
DRS Holdings III, Inc. (Dr. Scholl’s)		310		310
Eastern Wholesale Fence		1,332		425
EIS Legacy, LLC		3,846		6,539
Fastener Distribution Holdings, LLC		-		6,810
FCA, LLC (FCA Packaging)		2,670		2,670
Foundation Consumer Brands		577		577
Fralock Buyer LLC		399		749
Gulf Pacific Holdings, LLC		12,850		13,066
Gusmer Enterprises, Inc.		3,676		3,676
Home Brands Group Holdings, Inc. (ReBath)		2,099		2,099
I.D. Images Acquisition, LLC		2,020		1,424
IF&P Foods, LLC (FreshEdge)		1,639		6,114
Improving Acquisition LLC		1,672		2,028
Krayden Holdings, Inc.		5,437		-
Light Wave Dental Management LLC		1,429		6,774
LSL Industries, LLC (LSL Healthcare)		15,224		15,224
MacNeill Pride Group		3,877		2,978
Pavion Corp., f/k/a Corbett Technology Solutions, Inc.		109		1,334
PMFC Holding, LLC		137		342
Regiment Security Partners LLC		104		3,207
SGA Dental Partners Holdings, LLC		1,379		1,724
Siegel Egg Co., LLC		537		1,207
Techniks Holdings, LLC / Eppinger Holdings Germany GMBH		1,700		-
Trademark Global LLC		858		240
United Safety & Survivability Corporation (USSC)		1,675		2,942
Universal Marine Medical Supply International, LLC (Unimed)		-		2,035
USALCO, LLC		1,399		1,462
Vehicle Accessories, Inc.		1,671		1,671
Worldwide Produce Acquisition, LLC		1,356		-
Total unfunded commitments	$	109,130	$	149,338

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

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, 2023 and December 31, 2022, management was not aware of any material pending or threatened litigation that would require accounting recognition or financial statement disclosure.

Note 9. Earnings Per Share

In accordance with the provisions of ASC Topic 260, Earnings per Share (“ASC 260”), basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. As of September 30, 2023 and 2022, there were no dilutive shares.

The following table sets forth the computation of basic and diluted earnings per share of common stock for the three and nine months ended September 30, 2023 and 2022.

	For the three months ended				For the nine months ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022

Net increase (decrease) in net assets resulting from operations	$	13,872	$	14,598	$	54,281	$	27,789
Weighted average shares of common stock outstanding - basic and diluted		40,499,327		29,530,036		38,461,385		25,177,005
Earnings (loss) per share of common stock - basic and diluted	$	0.34	$	0.49	$	1.41	$	1.10

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

Note 10. Financial Highlights

The following per share of common stock data has been derived from information provided in the unaudited financial statements. The following is a schedule of financial highlights for the nine months ended September 30, 2023 and 2022.

	For the nine months ended September 30,
Per Common Share Operating Performance⁽¹⁾	2023 (amounts in thousands, except share and per share amounts)			2022 (amounts in thousands, except share and per share amounts)
Net Asset Value, Beginning of Period	$	16.50		$	16.22

Results of Operations:
Net Investment Income		1.62			0.98
Net Realized and Unrealized Gain (Loss) on Investments⁽²⁾		(0.19	)		0.09
Net Increase (Decrease) in Net Assets Resulting from Operations		1.43			1.07

Distributions to Common Stockholders
Distributions		(1.53	)		(0.56	)
Net Decrease in Net Assets Resulting from Distributions		(1.53	)		(0.56	)

Net Asset Value, End of Period	$	16.40		$	16.73

Shares Outstanding, End of Period		41,506,935			31,304,965

Ratio/Supplemental Data
Net assets, end of period	$	680,726		$	523,727
Weighted-average shares outstanding		38,461,385			25,177,005
Total Return⁽³⁾		8.9	%		6.7	%
Portfolio turnover		8.5	%		12.5	%
Ratio of operating expenses to average net assets		11.9	%		6.9	%
Ratio of net investment income (loss) to average net assets		13.3	%		8.2	%

(1)	The per common share data was derived by using weighted average shares outstanding.

Kayne Anderson BDC, Inc.

Notes to Consolidated Financial Statements

(amounts in 000’s, except share and per share amounts)

(Unaudited)

(2)

Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period and may not reconcile with the aggregate gains and losses in the Consolidated Statement of Operations due to share transactions during the period.

For the nine months ended September 30, 2023 and 2022, such share transactions include the effect of share issuances of $0.00 and $0.03 per share, respectively. During the period, shares were issued at prices that reflect the aggregate amount of the Company’s initial organizational and offering expenses. As a result, investors subscribing after the initial capital call are allocated organizational expenses consistently with all stockholders.

(3)

Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share (if any), divided by the beginning NAV per share. The calculation also assumes reinvestment of dividends at actual prices pursuant to the Company’s dividend reinvestment plan. Total return is not annualized.

Note 11. Subsequent Events

The Company’s management has evaluated subsequent events through the date of issuance of the financial statements included herein. There have been no subsequent events that require recognition or disclosure in these financial statements except as described below.

On October 13, 2023, the Company paid a distribution of $0.53 per share to each common stockholder of record as of September 29, 2023. The total distribution was $21,999 and $1,586 was reinvested into the Company through the purchase of 96,731 shares of common stock.

On October 16, 2023, the Company completed a capital close totaling $101,175. Following this capital close, the Company has subscription agreements with investors for an aggregate capital commitment of $988,178 to purchase shares of common stock ($329,884 is undrawn).

On November 9, 2023, the Board elected Frank P. Karl as Senior Vice President.

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

The following discussion and analysis should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise specified, references to “we,” “us,” “our,” or the “Company” refer to Kayne Anderson BDC, Inc.

Overview and Investment Framework

Kayne Anderson BDC, Inc. was formed as a Delaware corporation to make investments in middle-market companies and commenced operations on February 5, 2021. We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act, as amended. In addition, for U.S. federal income tax purposes, we intend to qualify, annually, as a RIC under Subchapter M of the Code.

We are managed by KA Credit Advisors, LLC (the “Advisor”), an affiliate of Kayne Anderson Capital Advisors, L.P. (“Kayne Anderson”), a prominent alternative investment management firm. The Advisor and Kayne Anderson are registered with the United States Securities and Exchange Commission (the “SEC”) under the Investment Advisory Act of 1940, as amended. Subject to the overall supervision of the Company’s board of directors (the “Board”), our Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring investments, determining the value of our investments and monitoring our investments and portfolio companies on an ongoing basis. The Board consists of seven directors, four of whom are independent.

Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through debt investments in middle-market companies. We define “middle-market companies” as private U.S. middle-market companies that, in general, generate between $10 million and $150 million of annual earnings before interest, taxes, depreciation and amortization, or EBITDA. Further, we refer to companies that generate between $10 million and $50 million of annual EBITDA as “core middle-market companies” and companies that generate between $50 million and $150 million of annual EBITDA as “upper middle-market companies.”

We intend to achieve our investment objective by investing primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to privately held middle market companies. We expect at least 90% of our portfolio (including investments purchased with proceeds from borrowings) to be invested in first lien senior secured, unitranche and split-lien loans. The remaining 10% of our portfolio may be invested in equity securities (including those purchased in conjunction with other credit investments) and other opportunistic credit investments, including junior debt and other higher yielding investments. Most of these investments (i) will be made in core middle market companies, with the remainder in upper middle market companies and (ii) will generally have stated maturities of no more than six years.

We execute on our investment objective by (1) accessing the established loan sourcing channels developed by Kayne Anderson’s middle market private credit platform and investment and management team (“KAPC” or “Kayne Anderson Private Credit”), which includes an extensive network of private equity firms, other middle market lenders, financial advisors and intermediaries, and management teams, (2) selecting investments within our middle market company focus, (3) implementing KAPC’s time-tested underwriting process, and (4) drawing upon the experience and resources of our Advisor’s investment team and the broader Kayne Anderson network.

We believe our Advisor’s disciplined approach to origination, credit analysis, portfolio construction and risk management should allow us to achieve attractive risk-adjusted returns while preserving investor capital. At a high-level, our Advisor adheres to a strategy it refers to as a “value lending philosophy”, which is comprised of several distinct areas of focus. This philosophy includes an explicit focus on underwriting investments in “evolutionary” not “revolutionary” markets. We tend to avoid high-growth markets as that growth profile attracts substantial capital formation and, in turn, new competition, leading to the potential for longer-term uncertainty and industry upheaval. As such, we tend to invest in markets where the winners and losers have been more-or-less decided and where we can underwrite sustainable, predictable and leverageable cashflows for the long term.

Our portfolio is currently comprised of a broad mix of loans, with diversity among investment size, industry focus and geography. Our Advisor’s team of professionals conducts due diligence on prospective investments during the underwriting process and is involved in structuring the credit terms of substantially all of our investments. Once an investment has been made, our Advisor closely monitors portfolio investments and takes a proactive approach identifying and addressing sector or company specific risks. Our Advisor maintains a regular dialogue with portfolio company management teams (as well as their financial sponsors, where applicable), reviews detailed operating and financial results on a regular basis (typically monthly or quarterly) and monitors current and projected liquidity needs, in addition to other portfolio management activities.

Recent Developments

On October 13, 2023, we paid a distribution of $0.53 per share to each common stockholder of record as of September 29, 2023. The total distribution was $22.0 million and $1.6 million was reinvested into the Company through the purchase of 96,731 shares of common stock.

On October 16, 2023, we completed a capital close totaling $101.2 million. Following this capital close, we have subscription agreements with investors for an aggregate capital commitment of $988.2 million to purchase shares of common stock ($329.9 million is undrawn).

On November 9, 2023, the Board elected Frank P. Karl as Senior Vice President.

Portfolio and Investment Activity

September 30, 2023

As of September 30, 2023, we had investments in 72 portfolio companies with an aggregate fair value of approximately $1,278 million, and unfunded commitments to these portfolio companies of $109 million, and our portfolio consisted of 97.7% first lien senior secured loans, 1.7% junior debt and 0.6% equity investments.

As of September 30, 2023, our weighted average yield of debt and income producing securities at fair value and amortized cost was 12.4% and 12.5%, respectively, and 100% of our debt investments at fair value were at floating rates. We do not include investments on non-accrual status and non-incoming producing as of September 30, 2023 in this calculation.

As of September 30, 2023, our portfolio was invested across 28 different industries (Global Industry Classification “GICS”, Level 3 – Industry). The largest industries in our portfolio as of September 30, 2023 were Trading Companies & Distributors; Food Products and Commercial Services & Supplies, which represented, as a percentage of our portfolio of long-term investments, 13.8%, 10.9% and 10.5%, respectively, based on fair value.

As of September 30, 2023, our average position sized based on commitment (at the portfolio company level) was $19.5 million, and the weighted average and median last twelve months (“LTM”) EBITDA of our portfolio companies was $55.8 million and $43.4 million, respectively, based on fair value.

As of September 30, 2023, the weighted average loan-to-value (“LTV”) of our debt investments at the time of our initial investment was 44.5%, based on fair value. LTV represents the total par value of our debt investment relative to our estimate of the enterprise value of the underlying borrower. Given the senior secured status of nearly all of our investments, the difference between 100% and the LTV of our investment represents the percentage that our estimate of the enterprise value of the underlying borrower would need to degrade prior to a loss on our position.

As of September 30, 2023, we had one investment on non-accrual status, which comprised 1.9% and 1.1%, respectively, of total debt investments at cost and fair value.

As of September 30, 2023, 100% of our debt investments included financial maintenance covenants.

September 30, 2022

As of September 30, 2022, we had investments in 59 portfolio companies with an aggregate fair value of approximately $964 million, and unfunded commitments to these portfolio companies of $125 million, and our portfolio consisted of 96.9% first lien senior secured loans, 2.6% junior debt and 0.5% equity investments.

As of September 30, 2022, our weighted average yield of debt and income producing securities at fair value and amortized cost was 9.8% and 9.9%, respectively, and 100% of our debt investments at fair value were at floating rates.

As of September 30, 2022, our portfolio was invested across 25 different industries (GICS, Level 3 – Industry). The largest industries in our portfolio as of September 30, 2022 were Commercial Services & Supplies; Trading Companies & Distributors; Health Care Providers & Services and Food Products, which represented, as a percentage of our portfolio of long-term investments, 13.7%, 12.8%, 10.9% and 10.3%, respectively, based on fair value.

As of September 30, 2022, our average position sized based on commitment (at the portfolio company level) was $18.5 million, and the weighted average and median last twelve months (“LTM”) EBITDA of our portfolio companies was $48.5 million and $37.1 million, respectively, based on fair value.

As of September 30, 2022, the weighted average loan-to-value (“LTV”) of our debt investments at the time of our initial investment was 46.1%, based on fair value. LTV represents the total par value of our debt investment relative to our estimate of the enterprise value of the underlying borrower. Given the senior secured status of nearly all of our investments, the difference between 100% and the LTV of our investment represents the percentage that our estimate of the enterprise value of the underlying borrower would need to degrade prior to a loss on our position.

As of September 30, 2022, none of our debt investments in portfolio companies were on non-accrual.

As of September 30, 2022, 100% of our debt investments included financial maintenance covenants.

Our investment activity for the three months ended September 30, 2023 and 2022 is presented below (information presented herein is at par value unless otherwise indicated).

	For the three months ended September 30,
	2023 ($ in millions)			2022 ($ in millions)

New investments:
Gross new investments commitments	$	29.8		$	331.8
Less: investment commitments sold down, exited or repaid⁽¹⁾		(36.8	)		(49.5	)
Net investment commitments		(7.0	)		282.3

Principal amount of investments funded:
Private credit investments	$	41.4		$	292.6
Liquid credit investments		-			-
Preferred equity investments⁽²⁾		-			-
Common equity investments⁽²⁾		0.4			3.3
Total principal amount of investments funded		41.8			295.9

Principal amount of investments sold / repaid:
Private credit investments		(41.8	)		(47.3	)
Liquid credit investments		-			-
Total principal amount of investments sold or repaid		(41.8	)		(47.3	)

Number of new investment commitments		4			20
Average new investment commitment amount	$	7.4		$	16.6
Weighted average maturity for new investment commitments⁽³⁾		3.7 years			4.3 years
Percentage of new debt investment commitments at floating rates		100.0	%		100.0	%
Percentage of new debt investment commitments at fixed rates		0.0	%		0.0	%
Weighted average interest rate of new investment commitments⁽⁴⁾		11.3	%		9.7	%
Weighted average spread over SOFR of new floating rate investment commitments		5.8	%		6.6	%
Weighted average interest rate on investment sold or paid down⁽⁵⁾		12.3	%		9.6	%

(1)	Does not include repayments on revolving loans, which may be redrawn.

(2)	As of September 30, 2023, preferred equity investments and common equity investments were reported as equity investments.

(3)	For undrawn delayed draw term loans, the maturity date used is that of the associated term loan.

(4)	Based on the rate in effect at September 30, 2023 per our Consolidated Schedule of Investments for new commitments entered into during the quarter.

(5)	Based on the underlying rate if still held at September 30, 2023. For those investments sold or paid down in full during the year, based on the rate in effect at the time of sale or paid down.

We use Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of our portfolio companies.

The table below describes long-term investments by industry composition based on fair value as of September 30, 2023 and December 31, 2022.

	September 30, 2023			December 31, 2022

Trading companies & distributors		13.8	%		12.9	%
Food products		10.9	%		10.9	%
Commercial services & supplies		10.5	%		11.9	%
Health care providers & services		8.5	%		9.8	%
Containers & packaging		4.8	%		4.5	%
Professional services		4.8	%		5.5	%
Aerospace & defense		4.3	%		4.1	%
IT services		4.1	%		3.9	%
Machinery		4.0	%		2.2	%
Textiles, apparel & luxury goods		3.6	%		4.1	%
Leisure products		3.5	%		2.3	%
Personal care products		3.1	%		1.7	%
Chemicals		2.9	%		2.9	%
Software		2.7	%		3.0	%
Diversified telecommunication services		2.5	%		2.6	%
Wireless telecommunication services		2.4	%		2.5	%
Insurance		2.3	%		1.3	%
Automobile components		2.2	%		2.3	%
Household durables		1.6	%		1.8	%
Building products		1.6	%		3.4	%
Health care equipment & supplies		1.6	%		1.8	%
Household products		1.4	%		1.6	%
Biotechnology		0.9	%		1.0	%
Specialty retail		0.7	%		0.7	%
Pharmaceuticals		0.6	%		0.6	%
Capital Markets		0.7	%		-	%
Electronic equipment, instruments & components		-	%		0.3	%
Asset management & custody banks		-	%		0.4	%
Total		100.0	%		100.0	%

Results of Operations

For the three and nine months ended September 30, 2023 and 2022, our total investment income was derived from our portfolio of investments. As of September 30, 2023, we had one investment on non-accrual status and non-income producing. As of September 30, 2022, there were no loans on non-accrual status.

The following table represents the operating results for the three and nine months ended September 30, 2023 and 2022.

	For the three months ended September 30,						For the nine months ended September 30,
	2023			2022			2023			2022
	($ in millions)			($ in millions)			($ in millions)			($ in millions)
Total investment income	$	41.2		$20.5			$	118.3		$	45.4
Less: Net expenses		(19.8	)		(9.2	)		(55.9	)		(20.8	)
Net investment income		21.4			11.3			62.4			24.6
Net realized gains (losses) on investments		-			0.0			-			0.1
Net change in unrealized gains (losses) on investments		(7.5	)		3.3			(8.1	)		3.1
Net increase (decrease) in net assets resulting from operations	$	13.9		$	14.6		$	54.3		$	27.8

Investment Income

Investment income for the three and nine months ended September 30, 2023 totaled $41.2 million and $118.3 million, respectively, and consisted primarily of interest income on our debt investments. Investment income for the three and nine months ended September 30, 2022 totaled $20.5 million and $45.4 million, respectively, and consisted primarily of interest income on our debt investments. For the three and nine months ended September 30, 2023, we had $0.3 million and $1.3 million of PIK interest included in interest income. There was no PIK interest for the three and nine months ended September 30, 2022.

Expenses

Operating expenses for the three and nine months ended September 30, 2023 and 2022 were as follows:

	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
	($ in millions)		($ in millions)		($ in millions)		($ in millions)
Interest and debt financing expenses	$	13.9	$	5.5	$	38.4	$	11.3
Management fees		2.9		1.9		8.4		4.7
Incentive fees		2.4		1.2		6.9		3.0
Directors fees		0.1		0.1		0.5		0.3
Other operating expenses		0.5		0.5		1.7		1.5
Total expenses	$	19.8	$	9.2	$	55.9	$	20.8

Net Unrealized Gains (Losses) on Investments

We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. During the three and nine months ended September 30, 2023 and 2022, net unrealized gains (losses) on our investment portfolio were comprised of the following.

	For the three months ended September 30,						For the nine months ended September 30,
	2023			2022			2023			2022
	($ in millions)			($ in millions)			($ in millions)			($ in millions)
Unrealized gains on investments	$	3.7		$	7.3		$	7.3		$	9.4
Unrealized (losses) on investments		(11.2	)		(4.0	)		(15.4	)		(6.3	)
Net change in unrealized gains (losses) on investments	$	(7.5	)	$	3.3		$	(8.1	)	$	3.1

For these three-month periods ended September 30, 2023 and 2022, the top five largest contributors to the change in unrealized gains and change in unrealized losses on investments are presented in the following tables.

	For the three months ended
	September 30, 2023
	($ in millions)
Portfolio Company
Genuine Cable Group, LLC	$	0.7
4 Over International, LLC		0.4
Innopak Industries, Inc.		0.4
City Line Distributors, LLC		0.4
BR PJK Produce, LLC (Keany)		0.3
Other portfolio companies unrealized gains		1.5
Other portfolio companies unrealized (losses)		(1.6	)
Techniks Holdings, LLC / Eppinger Holdings Germany GMBH		(0.3	)
Centerline Communications, LLC		(0.3	)
IF&P Foods, LLC (FreshEdge)		(0.4	)
Sundance Holdings Group, LLC		(0.4	)
Arborworks Acquisition LLC		(8.2	)
Total Unrealized Appreciation (Depreciation), net	$	(7.5	)

	For the three months ended
	September 30, 2022
	($ in millions)
Portfolio Company
Genuine Cable Group, LLC	$	1.0
BC CS 2, L.P. (Cuisine Solutions)		1.0
AIDC Intermediate Co 2, LLC (Peak Technologies)		0.8
American Soccer Company, Incorporated (SCORE)		0.8
Gulf Pacific Holdings, LLC		0.6
Other portfolio companies unrealized gains		3.1
Other portfolio companies unrealized (losses)		(2.0	)
DRS Holdings III, Inc. (Dr. Scholl’s)		(0.2	)
Corbett Technology Solutions, Inc.		(0.3	)
Curio Brands, LLC		(0.4	)
Trademark Global LLC		(0.5	)
Arborworks Acquisition LLC		(0.6	)
Total Unrealized Appreciation (Depreciation), net	$	3.3

For these nine-month periods ended September 30, 2023 and 2022, the top five largest contributors to the change in unrealized gains and change in unrealized losses on investments are presented in the following tables.

	For the nine months ended
	September 30, 2023
	($ in millions)
Portfolio Company
BLP Buyer, Inc. (Bishop Lifting Products)	$	0.7
Silk Holdings III Corp. (Suave)		0.6
Engineered Fastener Company, LLC (EFC International)		0.5
Light Wave Dental Management LLC		0.5
Krayden Holdings, Inc.		0.4
Other portfolio companies unrealized gains		4.6
Other portfolio companies unrealized (losses)		(3.9	)
LSL Industries, LLC (LSL Healthcare)		(0.5	)
IF&P Foods, LLC (FreshEdge)		(0.6	)
Centerline Communications, LLC		(0.7	)
Siegel Egg Co., LLC		(1.4	)
Arborworks Acquisition LLC		(8.3	)
Total Unrealized Appreciation (Depreciation), net	$	(8.1	)

	For the nine months ended
	September 30, 2022
	($ in millions)
Portfolio Company
AIDC Intermediate Co 2, LLC (Peak Technologies)	$	1.1
Genuine Cable Group, LLC		1.0
BC CS 2, L.P. (Cuisine Solutions)		1.0
CGI Automated Manufacturing, LLC		0.8
American Soccer Company, Incorporated (SCORE)		0.8
Other portfolio companies unrealized gains		4.7
Other portfolio companies unrealized (losses)		(2.6	)
Corbett Technology Solutions, Inc.		(0.3	)
PH Beauty Holdings III, Inc.		(0.4	)
Curio Brands, LLC		(0.5	)
Trademark Global LLC		(1.0	)
Arborworks Acquisition LLC		(1.5	)
Total Unrealized Appreciation (Depreciation), net	$	3.1

Financial Condition, Liquidity and Capital Resources

Our liquidity and capital resources are generated primarily from the net proceeds of any offering of our shares of common stock, proceeds from borrowing on our credit facilities, proceeds from the issuance of notes and from cash flows from interest and fees earned from our investments and principal repayments and proceeds from sales of our investments. Our primary use of cash will be investments in portfolio companies, payments of our expenses, repayments of borrowed amounts and payment of cash distributions to our stockholders.

We finance our investments with borrowed money. In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. As of September 30, 2023 and December 31, 2022, our asset coverage ratios were 214% and 203%. We currently intend to target asset coverage of 200% to 180% (which equates to a debt-to-equity ratio of 1.0x to 1.25x) but may alter this target based on market conditions.

Over the next twelve months, we expect that cash and cash equivalents, taken together with our undrawn capital commitments and available capacity under our credit facilities, will be sufficient to conduct anticipated investment activities. Beyond twelve months, we expect that our cash and liquidity needs will continue to be met by cash generated from our ongoing operations as well as financing activities.

As of September 30, 2023, we had $75 million Notes outstanding, $523 million borrowed under our credit facilities and cash and cash equivalents of $29.0 million (including short-term investments). As of November 9, 2023, we had $75 million Notes outstanding, $531 million borrowed under our credit facilities and cash and cash equivalents of $17.1 million (including short-term investments).

Capital Contributions

During the nine months ended September 30, 2023 and 2022, we issued 5,422,524 and 11,858,122 shares of our common stock related to capital called at an aggregate purchase price of $90.6 million and $193.6 million, respectively. As of November 9, 2023, we had aggregate capital commitments of $988.2 million, and we had undrawn capital commitments of $329.9 million from investors ($658.3 million or 66.6% funded).

Senior Unsecured Notes

As of September 30, 2023, we have $75 million of senior unsecured notes outstanding, with $25 million of 8.65% Series A Notes due June 2027 and $50 million of 8.74% Series B Notes due June 2028.

Credit Facilities

Corporate Credit Facility: As of September 30, 2023, we are party to a senior secured revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of $400 million. The facility’s commitment termination date and the final maturity date are February 18, 2026 and February 18, 2027, respectively. The Corporate Credit Facility also provides for a feature that allows us, under certain circumstances, to increase the overall size of the Corporate Credit Facility to a maximum of $550 million. The interest rate on the Corporate Credit Facility is equal to Term SOFR (a forward-looking rate based on SOFR futures) plus an applicable spread of 2.35% per annum or an “alternate base rate” (as defined in the agreements governing the Corporate Credit Facility) plus an applicable spread of 1.25%. We are also required to pay a commitment fee of 0.375% per annum on any unused portion of the Corporate Credit Facility.

Revolving Funding Facility: As of September 30, 2023, we and our wholly owned, special purpose financing subsidiary, Kayne Anderson BDC Financing, LLC (“KABDCF”), are party to a senior secured revolving funding facility (the “Revolving Funding Facility”), that has a total commitment of $455 million. The Revolving Funding Facility is secured by all of the assets held by, and the membership interest in, KABDCF. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are February 18, 2025 and February 18, 2027, respectively. The interest rate on the Revolving Funding Facility is equal to daily SOFR plus 2.75% per annum. KABDCF is also required to pay a commitment fee of between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility.

Subscription Credit Agreement: As of September 30, 2023, we are party to a senior secured revolving credit agreement that includes a capital call facility (the “Subscription Credit Agreement”). The Subscription Credit Agreement permits us to elect the commitment amount each quarter to borrow up to $125 million, subject to availability under the borrowing base which is calculated based on the unused capital commitments of the investors meeting various eligibility requirements. The Subscription Credit Agreement has a maximum commitment of $125 million and the interest rate under the facility is equal to Term SOFR plus 1.975% (subject to a 0.275% floor). We are also required to pay a commitment fee of 0.25% per annum on the unused portion of the Subscription Credit Agreement. We also pay an extension fee of 0.05% per quarter on the elected commitment amount on the first day of each calendar quarter. The Subscription Credit Agreement will expire on December 31, 2023.

Contractual Obligations

A summary of our significant contractual principal payment obligations related to the repayment of our outstanding indebtedness at September 30, 2023 is as follows:

	Payments Due by Period ($ in millions)
	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Senior Unsecured Notes	$	75.0	$	-	$	-	$	75.0	$	-
Corporate Credit Facility		192.0		-		-		192.0		-
Revolving Funding Facility		306.0		-		-		306.0		-
Subscription Credit Agreement		25.0		25.0		-		-		-
Total contractual obligations	$	598.0	$	25.0	$	-	$	573.0	$	-

Off-Balance Sheet Arrangements

As of September 30, 2023 and December 31, 2022, we had an aggregate $109.1 million and $149.3 million, respectively, of unfunded commitments to provide debt financing to our portfolio companies. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in our financial statements. Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.

Critical Accounting Estimates

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in conjunction with our risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in this Quarterly Report. See Note 2 to our consolidated financial statements for the nine months ended September 30, 2023, for more information on our critical accounting policies.

Investment Valuation

Traded Investments (Level 1 or Level 2)

Investments for which market quotations are readily available will typically be valued at those market quotations. Traded investments such as corporate bonds, preferred stock, bank notes, loans or loan participations are valued by using the bid price provided by an independent pricing service, by an independent broker, the agent bank, syndicate bank or principal market maker. When price quotes for investments are not available, or such prices are stale or do not represent fair value in the judgment of our Advisor, fair market value will be determined using our Advisor’s valuation process for investments that are privately issued or otherwise restricted as to resale.

We may also invest, to a lesser extent, in equity securities purchased in conjunction with debt investments. While we anticipate these equity securities to be issued by privately held companies, we may hold equity securities that are publicly traded. Equity securities listed on any exchange other than the NASDAQ Stock Market, Inc. (“NASDAQ”) are valued, except as indicated below, at the last sale price on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the most recent bid and ask prices on such day. Securities admitted to trade on the NASDAQ are valued at the NASDAQ official closing price. Equity securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Equity securities traded in the over-the-counter market, but excluding securities admitted to trading on the NASDAQ, are valued at the closing bid prices.

Non-Traded Investments (Level 3)

Investments that are privately issued or otherwise restricted as to resale, as well as any security for which (a) reliable market quotations are not available in the judgment of our Advisor, or (b) the independent pricing service or independent broker does not provide prices or provides a price that in the judgment of our Advisor is stale or does not represent fair value, shall each be valued in a manner that most fairly reflects fair value of the security on the valuation date. We expect that a significant majority of our investments will be Level 3 investments. Unless otherwise determined by the Advisor, the following valuation process is used for our Level 3 investments:

●

Refer to Note 5 – Fair Value – for more information on the Company’s valuation process.

Revenue Recognition

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest, which represents contractual interest accrued and added to the principal balance, we generally will not accrue PIK interest for accounting purposes if the portfolio company valuation indicates that such PIK interest is not collectible. We do not accrue as a receivable interest on loans and debt securities for accounting purposes if we have reason to doubt our ability to collect such interest. OIDs, market discounts or premiums are accreted or amortized using the effective interest method as interest income. We record prepayment premiums on loans and debt securities as interest income.

Related Party Transactions

Investment Advisory Agreement. On February 5, 2021, we entered into the Investment Advisory Agreement with our Advisor. On March 7, 2023, the Board approved a one-year renewal of the Investment Advisory Agreement through March 15, 2024. Our Advisor will agree to serve as our investment advisor in accordance with the terms of our Investment Advisory Agreement. Payments under our Investment Advisory Agreement in each reporting period will consist of the base management fee equal to a percentage of the fair market value of investments, including, in each case, assets purchased with borrowed funds or other forms of leverage, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase as well as an incentive fee based on our performance.

For services rendered under the Investment Advisory Agreement, we will pay a base management fee quarterly in arrears to our Advisor based on the of the fair market value of our investments including, in each case, assets purchased with borrowed funds or other forms of leverage, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase. We will also pay an incentive fee on income and an incentive fee on capital gains to our Advisor.

Prior to an Exchange Listing, any incentive fees earned by the Advisor shall accrue as earned but only become payable in cash to the Advisor upon consummation of an Exchange Listing. To the extent the Company does not complete an Exchange Listing, the incentive fees will be payable to the Advisor (a) upon consummation of a sale of the Company or (b) once substantially all proceeds from a Company Liquidation payable to the Company’s common stockholders have been distributed to such stockholders.

Administration Agreement. On February 5, 2021, we entered into an Administration Agreement with our Advisor, which serves as our Administrator pursuant to which the Administrator will furnish us with administrative services necessary to conduct our day-to-day operations. On March 7, 2023, the Board approved a one-year renewal of the Administration Agreement through March 15, 2024. The Administrator will be reimbursed for administrative expenses it incurs on our behalf in performing its obligations. Such reimbursement may be made for our allocable portion (subject to the review and approval of our independent directors) of office facilities, overhead, and compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and their respective staff who provide services to us. As we reimburse the Administrator for its expenses, we will indirectly bear such cost. The Administrator engaged U.S. Bank Global Fund Services under a sub-administration agreement to assist the Administrator in performing certain of its administrative duties. On March 28, 2023, the Administrator engaged Ultimus Fund Solutions, LLC under a sub-administration agreement to assist the Administrator in performing certain of its administrative duties effective in the second quarter of 2023. The Administrator may enter into additional sub-administration agreements with third-parties to perform other administrative and professional services on behalf of the Administrator.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including changes in interest rates. Interest rate sensitivity refers to the change in our 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 will be 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.

Assuming that the consolidated statement of assets and liabilities as of September 30, 2023 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact ($ in millions) of hypothetical base rate changes in interest rate (considering interest rate floors for floating rate instruments). We do not include our investments on non-accrual status and non-incoming producing as of September 30, 2023 in this calculation.

Change in Interest Rates	Increase (Decrease) in Interest Income			Increase (Decrease) in Interest Expense			Net Increase (Decrease) in Net Investment Income
Down 200 basis points	$	(25.2	)	$	(10.5	)	$	(14.7	)
Down 100 basis points	$	(12.6	)	$	(5.2	)	$	(7.4	)
Up 100 basis points	$	12.6		$	5.2		$	7.4
Up 200 basis points	$	25.2		$	10.5		$	14.7

The data in the table is based on the Company’s current statement of assets and liabilities.

We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of September 30, 2023 (the end of the period covered by this report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic United States Securities and Exchange Commission (the “SEC”) filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

Internal Control Over Financial Reporting

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.

Neither we nor our Advisor is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against our Advisor.

From time to time, we, or our Advisor, may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under 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.

From time to time we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the risk factors described below and in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Our business is dependent on bank relationships and recent strain on the banking system may adversely impact us.

The financial markets recently have encountered volatility associated with concerns about the balance sheets of banks, especially small and regional banks, which may have significant losses associated with investments that make it difficult to fund demands to withdraw deposits and other liquidity needs. Although the federal government has announced measures to assist these banks and protect depositors, some banks have already been impacted and others may be materially and adversely impacted. Our business is dependent on bank relationships and we are proactively monitoring the financial health of such bank relationships. Continued strain on the banking system may adversely impact our business, financial condition and results of operations.

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

As set forth in the table below (dollars in thousands, except per share and share amounts), during the nine months ended September 30, 2023, we issued and sold 5,422,524 shares of common stock at an aggregate offering amount of approximately $90.6 million. The issuance of the shares of common stock was exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) and Rule 506(b) of Regulation D thereof and previously reported by us on our current reports on Form 8-K. The Company relied, in part, upon representations from the investors in the subscription agreements that each investor was an accredited investor as defined in Regulation D under the Securities Act. We did not engage in general solicitation or advertising, and did not offer securities to the public in connection with such issuances and sales.

	Offering				Aggregate
	price per		Common stock		offering
Common stock issue date	share		shares issued		amount
April 4, 2023	$	16.61		3,010,942	$	50,000
August 8, 2023	$	16.82		2,411,582		40,575
				5,422,524	$	90,575

Item 3. Default Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits required by this item are set forth in the Exhibit Index attached hereto and are filed or incorporated as part of this Report.

Exhibit Index

3.1		Certificate of Formation (3)
3.2		Initial Limited Liability Company Agreement (1)
3.3		Certificate of Conversion (2)
3.4		Certificate of Incorporation (2)
3.5		Amended and Restated Bylaws (5)
4.1		Description of Securities (3)
10.1		Investment Advisory Agreement (1)
10.2		Amendment to Investment Advisory Agreement (3)
10.3		Administration Agreement (1)
10.4		License Agreement (1)
10.5		Indemnification Agreement (1)
10.6		Custody Agreement (1)
10.7		Subscription Agreement (1)
10.8		Credit Agreement, dated February 5, 2021, by and between Kayne Anderson BDC, Inc., as borrower, lenders signatories thereto, and agent and the lead arranger (2)
10.9		Second Amendment to Credit Agreement, dated December 3, 2021, by and between Kayne Anderson BDC, Inc., as borrower, lender signatories thereto, and agent and lead arranger (5)
10.10		Senior Secured Revolving Credit Agreement (4)
10.11		Loan and Security Agreement (4)
21.1		Subsidiaries of Kayne Anderson BDC, Inc. (3)
31.1*		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1		Code of Ethics (1)
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

(1)	Incorporated by reference from the Company’s Amendment No. 2 to Form 10, as filed with the Securities and Exchange Commission on November 9, 2020.

(2)	Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on February 9, 2021.

(3)	Incorporated by reference from the Company’s Form 10-K, as filed with the Securities and Exchange Commission on March 10, 2023.

(4)	Incorporated by reference from the Company’s Form 8-K, as filed with the Securities and Exchange Commission on February 25, 2022.

(5)	Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on August 15, 2022.

*	Filed herewith.

SIGNATURES

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

	Kayne Anderson BDC, Inc.

Date: November 14, 2023
		/s/ Douglas L. Goodwillie
	Name:	Douglas L. Goodwillie
	Title:	Co-Chief Executive Officer
		(Co-Principal Executive Officer)

Date: November 14, 2023
		/s/ Kenneth B. Leonard
	Name:	Kenneth B. Leonard
	Title:	Co-Chief Executive Officer
		(Co-Principal Executive Officer)

Date: November 14, 2023
		/s/ Terry A. Hart
	Name:	Terry A. Hart
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)