Edgar Filing: GOLUB CAPITAL BDC, Inc.

Document

______________________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________________________________________________________________________________________________

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2017

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 814-00794

Golub Capital BDC, Inc.

(Exact name of registrant as specified in its charter)



Delaware		27-2326940
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

666 Fifth Avenue, 18th Floor

New York, NY 10103

(Address of principal executive offices)

(212) 750-6060

(Registrant's telephone number, including area code)

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See 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 þ	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o
Emerging growth company o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of August 7, 2017, the Registrant had 59,455,395 shares of common stock, $0.001 par value, outstanding.



Part I. Financial Information
Item 1.	Financial Statements	3
	Consolidated Statements of Financial Condition as of June 30, 2017 (unaudited) and September 30, 2016	3
	Consolidated Statements of Operations for the three and nine months ended June 30, 2017 (unaudited) and 2016 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the nine months ended June 30, 2017 (unaudited) and 2016 (unaudited)	5
	Consolidated Statements of Cash Flows for the nine months ended June 30, 2017 (unaudited) and 2016 (unaudited)	6
	Consolidated Schedules of Investments as of June 30, 2017 (unaudited) and September 30, 2016	7
	Notes to Consolidated Financial Statements (unaudited)	35
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	71
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	103
Item 4.	Controls and Procedures	104
Part II. Other Information
Item 1.	Legal Proceedings	105
Item 1A.	Risk Factors	105
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	105
Item 3.	Defaults Upon Senior Securities	105
Item 4.	Mine Safety Disclosures	105
Item 5.	Other Information	105
Item 6.	Exhibits	105

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands, except share and per share data)



	June 30, 2017			September 30, 2016
	(unaudited)
Assets
Investments, at fair value
Non-controlled/non-affiliate company investments	$	1,692,929		$	1,546,766
Non-controlled affiliate company investments	—			9,618
Controlled affiliate company investments	108,879			104,228
Total investments at fair value (amortized cost of $1,781,227 and $1,650,173, respectively)	1,801,808			1,660,612
Cash and cash equivalents	12,827			10,947
Restricted cash and cash equivalents	33,042			78,593
Interest receivable	5,871			5,935
Receivable from investments sold	1,317			—
Other assets	174			422
Total Assets	$	1,855,039		$	1,756,509
Liabilities
Debt	$	883,400		$	864,700
Less unamortized debt issuance costs	4,284			5,627
Debt less unamortized debt issuance costs	879,116			859,073
Secured borrowings, at fair value (proceeds of $403 and $471, respectively)	406			475
Interest payable	6,274			3,229
Management and incentive fees payable	13,404			12,763
Accounts payable and accrued expenses	2,264			2,072
Payable for investments purchased	5,294			—
Accrued trustee fees	62			72
Total Liabilities	906,820			877,684
Commitments and Contingencies (Note 8)
Net Assets
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2017 and September 30, 2016	—			—
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 59,235,174 and 55,059,067 shares issued and outstanding as of June 30, 2017 and September 30, 2016, respectively	59			55
Paid in capital in excess of par	932,970			855,998
Undistributed net investment income	3,862			18,832
Net unrealized appreciation (depreciation) on investments and secured borrowings	23,247			13,104
Net realized gain (loss) on investments	(11,919		)	(9,164		)
Total Net Assets	948,219			878,825
Total Liabilities and Total Net Assets	$	1,855,039		$	1,756,509
Number of common shares outstanding	59,235,174			55,059,067
Net asset value per common share	$	16.01		$	15.96

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

(In thousands, except share and per share data)



	Three months ended June 30,						Nine months ended June 30,
	2017			2016			2017			2016
Investment income
From non-controlled/non-affiliate company investments:
Interest income	$	32,877		$	28,752		$	94,238		$	83,641
Dividend income	278			111			438			393
Fee income	990			60			1,422			834
Total investment income from non-controlled/non-affiliate company investments	34,145			28,923			96,098			84,868
From non-controlled affiliate company investments:
Interest income	372			316			1,023			337
Total investment income from non-controlled affiliate company investments	372			316			1,023			337
From controlled affiliate company investments:
Interest income	—			1,799			1,639			5,192
Dividend income	891			1,068			4,054			2,971
Total investment income from controlled affiliate company investments	891			2,867			5,693			8,163
Total investment income	35,408			32,106			102,814			93,368
Expenses
Interest and other debt financing expenses	8,099			7,019			23,379			20,583
Base management fee	6,059			5,567			17,744			16,286
Incentive fee	2,073			2,311			6,274			4,262
Professional fees	638			692			1,935			2,123
Administrative service fee	595			531			1,720			1,643
General and administrative expenses	136			101			437			386
Total expenses	17,600			16,221			51,489			45,283
Net investment income - before excise tax	17,808			15,885			51,325			48,085
Excise tax	—			—			17			333
Net investment income - after excise tax	17,808			15,885			51,308			47,752
Net gain (loss) on investments and secured borrowings
Net realized gain (loss) on investments:
Non-controlled/non-affiliate company investments	3,233			(5,416		)	4,826			(2,982		)
Non-controlled affiliate company investments	(6,442		)	—			(6,442		)	2,722
Net realized gain (loss) on investments	(3,209		)	(5,416		)	(1,616		)	(260		)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/non-affiliate company investments	(245		)	7,254			4,743			10,203
Non-controlled affiliate company investments	5,658			(253		)	5,228			(3,052		)
Controlled affiliate company investments	99			818			171			(1,539		)
Net change in unrealized appreciation (depreciation) on investments	5,512			7,819			10,142			5,612
Net change in unrealized appreciation (depreciation) on secured borrowings	—			1			1			1
Net gain (loss) on investments and secured borrowings	2,303			2,404			8,527			5,353
Net increase in net assets resulting from operations	$	20,111		$	18,289		$	59,835		$	53,105
Per Common Share Data
Basic and diluted earnings per common share	$	0.35		$	0.35		$	1.07		$	1.03
Dividends and distributions declared per common share	$	0.32		$	0.32		$	1.21		$	0.96
Basic and diluted weighted average common shares outstanding	57,719,505			51,513,685			56,058,642			51,399,363

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Changes in Net Assets (unaudited)

(In thousands, except share data)



									Net Unrealized Appreciation (Depreciation) on Investments and Secured Borrowings
	Common Stock			Paid in Capital in Excess of Par		Undistributed Net Investment Income					Net Realized Gain (Loss) on Investments
	Shares	Par Amount		Paid in Capital in Excess of Par		Undistributed Net Investment Income					Net Realized Gain (Loss) on Investments			Total Net Assets
Balance at September 30, 2015	51,300,193	$	51	$	790,713	$	4,230		$	15,134	$	742		$	810,870
Net increase in net assets resulting from operations	—	—		—		47,752			5,613		(260		)	53,105
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan	323,132	1		5,347		—			—		—			5,348
Distributions from net investment income	—	—		—		(36,924		)	—		—			(36,924		)
Distributions from realized gain	—	—		—		—			—		(12,418		)	(12,418		)
Total increase (decrease) for the period ended June 30, 2016	323,132	1		5,347		10,828			5,613		(12,678		)	9,111
Balance at June 30, 2016	51,623,325	$	52	$	796,060	$	15,058		$	20,747	$	(11,936	)	$	819,981
Balance at September 30, 2016	55,059,067	$	55	$	855,998	$	18,832		$	13,104	$	(9,164	)	$	878,825
Issuance of common stock, net of offering and underwriting costs⁽¹⁾	3,762,500	4		69,489		—			—		—			69,493
Net increase in net assets resulting from operations	—	—		—		51,308			10,143		(1,616		)	59,835
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan	413,607	—		7,483		—			—		—			7,483
Distributions from net investment income	—	—		—		(66,278		)	—		—			(66,278		)
Distributions from realized gain	—	—		—		—			—		(1,139		)	(1,139		)
Total increase (decrease) for the period ended June 30, 2017	4,176,107	4		76,972		(14,970		)	10,143		(2,755		)	69,394
Balance at June 30, 2017	59,235,174	$	59	$	932,970	$	3,862		$	23,247	$	(11,919	)	$	948,219

⁽¹⁾

On March 21, 2017, Golub Capital BDC, Inc. priced a public offering of 1,750,000 shares of its common stock at a public offering price of $19.03 per share. On April 6, 2017, Golub Capital BDC, Inc. sold an additional 262,500 shares of its common stock at a public offering price of $19.03 per share pursuant to the underwriter's exercise of the option to purchase additional shares granted in connection with the public offering in March 2017. On June 6, 2017, Golub Capital BDC, Inc. entered into an agreement to sell 1,750,000 shares of its common stock pursuant to an underwritten, public offering at a price to the Company of $18.71 per share.

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited)

(In thousands)



	Nine months ended June 30,
	2017			2016
Cash flows from operating activities
Net increase in net assets resulting from operations	$	59,835		$	53,105
Adjustments to reconcile net increase in net assets resulting from operations to net cash (used in) provided by operating activities
Amortization of deferred debt issuance costs	2,488			3,227
Accretion of discounts and amortization of premiums	(6,792		)	(5,895		)
Net realized (gain) loss on investments	1,616			260
Net change in unrealized (appreciation) depreciation on investments	(10,142		)	(5,612		)
Net change in unrealized appreciation (depreciation) on secured borrowings	(1		)	(1		)
Proceeds from (fundings of) revolving loans, net	959			(2,624		)
Fundings of investments	(461,763		)	(471,480		)
Proceeds from principal payments and sales of portfolio investments	336,464			387,316
PIK interest	(1,537		)	(689		)
Changes in operating assets and liabilities:
Interest receivable	64			(7		)
Receivable from investments sold	(1,317		)	—
Other assets	248			(128		)
Interest payable	3,045			2,578
Management and incentive fees payable	641			(419		)
Payable for investments purchased	5,294			1,949
Accounts payable and accrued expenses	192			(292		)
Accrued trustee fees	(10		)	(1		)
Net cash (used in) provided by operating activities	(70,716		)	(38,713		)
Cash flows from investing activities
Net change in restricted cash and cash equivalents	45,551			33,289
Net cash (used in) provided by investing activities	45,551			33,289
Cash flows from financing activities
Borrowings on debt	419,350			288,050
Repayments of debt	(400,650		)	(239,250		)
Capitalized debt issuance costs	(1,145		)	(1,654		)
Repayments on secured borrowings	(69		)	(29		)
Proceeds from shares sold, net of underwriting costs	69,893			—
Offering costs paid	(400		)	—
Distributions paid	(59,934		)	(43,994		)
Net cash provided by (used in) financing activities	27,045			3,123
Net change in cash and cash equivalents	1,880			(2,301		)
Cash and cash equivalents, beginning of period	10,947			5,468
Cash and cash equivalents, end of period	$	12,827		$	3,167
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	17,836		$	14,766
Distributions declared during the period	67,417			49,342
Supplemental disclosure of noncash operating activity:
Funding of LLC equity interest in SLF	$	(78,689	)	$	—
Proceeds from subordinated notes in SLF principal payment	78,689			—
Supplemental disclosure of noncash financing activity:
Proceeds from issuance of Class A-Refi 2010 Notes	$	205,000		$	—
Redemptions of Class A and Class B 2010 Notes	(205,000		)	—

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Investments
Non-controlled/non-affiliate company investments
Debt investments
Aerospace and Defense
ILC Dover, LP^{*^#}	One stop	L + 9.00%	8.23% cash/2.00% PIK	03/2020	$	17,645	$	17,539		1.9	%	$	17,645
ILC Dover, LP	One stop	L + 9.00%	8.23% cash/2.00% PIK	03/2019	797		791			0.1		797
NTS Technical Systems^{*^#}	One stop	L + 6.00%	7.05%	06/2021	21,773		21,466			2.3		21,773
NTS Technical Systems⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	06/2021	—		(77		)	—		—
NTS Technical Systems⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	06/2021	—		(128		)	—		—
Tresys Technology Holdings, Inc.⁽⁶⁾	One stop	L + 6.75%	8.05%	12/2017	3,899		3,845			0.1		1,170
Tresys Technology Holdings, Inc.⁽⁶⁾	One stop	L + 6.75%	8.01%	12/2017	659		658			0.1		659
Tresys Technology Holdings, Inc.	One stop	P + 7.50%	11.75%	12/2017	40		40			—		40
Tronair Parent, Inc.^#	Senior loan	L + 4.75%	5.84%	09/2023	192		190			—		190
Tronair Parent, Inc.	Senior loan	L + 4.50%	5.59%	09/2021	20		19			—		19
Whitcraft LLC^{*^#}	One stop	L + 6.25%	7.55%	04/2023	12,596		12,415			1.3		12,470
Whitcraft LLC	One stop	P + 5.25%	9.50%	04/2023	5		4			—		4
Whitcraft LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	04/2023	—		(5		)	—		(3		)
					57,626		56,757			5.8		54,764
Automobile
Dent Wizard International Corporation^*	Senior loan	L + 4.75%	5.97%	04/2020	4,534		4,508			0.5		4,534
OEConnection LLC^*	Senior loan	L + 5.00%	6.30%	06/2022	4,846		4,742			0.5		4,798
OEConnection LLC^{^}	Senior loan	L + 4.75%	6.05%	06/2022	2,597		2,571			0.3		2,571
OEConnection LLC⁽⁴⁾	Senior loan	L + 5.00%	N/A⁽⁵⁾	06/2021	—		(1		)	—		(1		)
T5 Merger Corporation^{^#}	One stop	L + 6.25%	7.30%	03/2022	4,392		4,319			0.4		4,392
T5 Merger Corporation	One stop	L + 6.25%	7.41%	03/2022	108		106			—		108
T5 Merger Corporation	One stop	L + 6.25%	7.33%	03/2022	60		59			—		60
T5 Merger Corporation⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	03/2022	—		(2		)	—		—
					16,537		16,302			1.7		16,462
Banking
HedgeServ Holding L.P.^*#	One stop	L + 8.00%	7.16% cash/2.00% PIK	02/2019	17,151		17,109			1.8		17,151
HedgeServ Holding L.P.⁽⁴⁾	One stop	L + 8.00%	N/A⁽⁵⁾	02/2019	—		(3		)	—		—
					17,151		17,106			1.8		17,151
Beverage, Food and Tobacco
Abita Brewing Co., L.L.C.	One stop	L + 6.25%	7.23% cash/0.25% PIK	04/2021	7,837		7,720			0.8		7,601
Abita Brewing Co., L.L.C.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	04/2021	—		(1		)	—		(1		)
ABP Corporation^*	Senior loan	L + 4.75%	6.00%	09/2018	4,659		4,640			0.5		4,499
ABP Corporation	Senior loan	P + 3.50%	7.75%	09/2018	292		290			—		275
Atkins Nutritionals, Inc.^{*^}	One stop	L + 8.50%	9.75%	04/2019	21,636		21,515			2.3		21,636
Atkins Nutritionals, Inc.^{*^#}	One stop	L + 5.00%	6.25%	01/2019	13,262		13,185			1.4		13,262
Benihana, Inc.^{*^}	One stop	L + 7.00%	8.25%	01/2019	16,140		15,954			1.7		15,992
Benihana, Inc.	One stop	L + 7.00%	9.09%	07/2018	1,020		1,000			0.1		1,000
C. J. Foods, Inc.^{*^}	One stop	L + 6.25%	7.55%	05/2019	5,218		5,171			0.6		5,218
C. J. Foods, Inc.	One stop	L + 6.25%	7.55%	05/2019	658		652			0.1		658
C. J. Foods, Inc.	One stop	L + 6.25%	7.41%	05/2019	172		167			—		172
Firebirds International, LLC^*	One stop	L + 5.75%	7.00%	05/2018	1,065		1,062			0.1		1,065
Firebirds International, LLC^*	One stop	L + 5.75%	7.00%	05/2018	299		298			—		299
Firebirds International, LLC^{^}	One stop	L + 5.75%	7.00%	05/2018	96		96			—		96
Firebirds International, LLC	One stop	L + 5.75%	N/A⁽⁵⁾	05/2018	—		—			—		—
First Watch Restaurants, Inc^{.*^}	One stop	L + 6.00%	7.38%	12/2020	15,137		15,029			1.6		15,137
First Watch Restaurants, Inc.^*	One stop	L + 6.00%	7.30%	12/2020	1,248		1,241			0.1		1,248
First Watch Restaurants, Inc.^*	One stop	L + 6.00%	7.30%	12/2020	1,246		1,238			0.1		1,246
First Watch Restaurants, Inc.	One stop	L + 6.00%	7.30%	12/2020	1,075		1,069			0.1		1,075
First Watch Restaurants, Inc.	One stop	P + 5.00%	9.25%	12/2020	721		718			0.1		721

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Beverage, Food and Tobacco - (continued)
First Watch Restaurants, Inc.	One stop	L + 6.00%	N/A⁽⁵⁾	12/2020	$	—	$	—		—	%	$	—
Hopdoddy Holdings, LLC	One stop	L + 8.00%	9.23%	08/2020	655		646			0.1		655
Hopdoddy Holdings, LLC	One stop	L + 8.00%	N/A⁽⁵⁾	08/2020	—		—			—		—
Hopdoddy Holdings, LLC⁽⁴⁾	One stop	L + 8.00%	N/A⁽⁵⁾	08/2020	—		(2		)	—		—
Julio & Sons Company	One stop	L + 5.50%	N/A⁽⁵⁾	12/2018	—		—			—		—
Mid-America Pet Food, L.L.C.^{^}	One stop	L + 6.25%	7.55%	12/2021	5,655		5,578			0.6		5,655
Mid-America Pet Food, L.L.C.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	12/2021	—		(1		)	—		—
P&P Food Safety US Acquisition, Inc.^*	One stop	L + 6.50%	7.77%	11/2021	4,136		4,091			0.4		4,136
P&P Food Safety US Acquisition, Inc.	One stop	L + 6.50%	N/A⁽⁵⁾	11/2021	—		—			—		—
Purfoods, LLC	One stop	L + 6.25%	7.45%	05/2021	8,582		8,418			0.9		8,582
Purfoods, LLC	One stop	N/A	7.00% PIK	05/2026	109		109			—		110
Purfoods, LLC	One stop	L + 6.25%	7.42%	05/2021	65		64			—		65
Purfoods, LLC	One stop	L + 6.25%	7.34%	05/2021	15		15			—		15
Purfoods, LLC	One stop	L + 6.25%	7.34%	05/2021	14		14			—		14
Purfoods, LLC	One stop	L + 6.25%	7.55%	05/2021	10		10			—		10
Purfoods, LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	05/2021	—		(1		)	—		—
Restaurant Holding Company, LLC^#	Senior loan	L + 7.75%	8.98%	02/2019	4,499		4,482			0.5		4,409
Rubio's Restaurants, Inc.^{*^}	Senior loan	L + 4.75%	6.04%	11/2018	8,851		8,825			0.9		8,851
Smashburger Finance LLC	Senior loan	L + 5.50%	6.80%	05/2018	83		82			—		78
Smashburger Finance LLC⁽⁴⁾	Senior loan	L + 5.50%	N/A⁽⁵⁾	05/2018	—		(1		)	—		—
Surfside Coffee Company LLC^#	One stop	L + 5.25%	6.55%	06/2020	4,436		4,409			0.5		4,436
Surfside Coffee Company LLC	One stop	L + 5.25%	6.54%	06/2020	335		333			—		335
Surfside Coffee Company LLC	One stop	L + 5.25%	6.46%	06/2020	25		25			—		25
Tate's Bake Shop, Inc.^#	Senior loan	L + 5.00%	6.30%	08/2019	593		589			0.1		593
Uinta Brewing Company^{^}	One stop	L + 8.50%	9.73%	08/2019	3,734		3,719			0.4		3,623
Uinta Brewing Company	One stop	L + 8.50%	9.72%	08/2019	539		535			0.1		517
					134,117		132,983			14.1		133,308
Broadcasting and Entertainment
TouchTunes Interactive Networks, Inc.^{^}	Senior loan	L + 4.75%	6.05%	05/2021	1,466		1,461			0.2		1,475

Building and Real Estate
Brooks Equipment Company, LLC^{*^}	One stop	L + 5.00%	6.21%	08/2020	22,720		22,541			2.4		22,720
Brooks Equipment Company, LLC^*	One stop	L + 5.00%	6.20%	08/2020	5,598		5,560			0.6		5,598
Brooks Equipment Company, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	08/2020	—		(11		)	—		—
ITEL Laboratories, Inc^.*	Senior loan	L + 4.50%	5.80%	06/2018	545		544			0.1		545
ITEL Laboratories, Inc.	Senior loan	L + 4.50%	N/A⁽⁵⁾	06/2018	—		—			—		—
Jensen Hughes, Inc.^#	Senior loan	L + 5.00%	6.23%	12/2021	134		133			—		134
MRI Software LLC^{^}	One stop	L + 6.00%	7.30%	06/2023	23,983		23,344			2.5		23,744
MRI Software LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	06/2023	—		(3		)	—		(2		)
MRI Software LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	06/2023	—		(8		)	—		(3		)
					52,980		52,100			5.6		52,736
Chemicals, Plastics and Rubber
Flexan, LLC^*	One stop	L + 5.75%	7.05%	02/2020	2,339		2,320			0.2		2,339
Flexan, LLC	One stop	L + 5.75%	N/A⁽⁵⁾	02/2020	—		—			—		—
					2,339		2,320			0.2		2,339
Diversified/Conglomerate Manufacturing
Chase Industries, Inc.^{*^#}	One stop	L + 5.75%	6.90%	09/2020	30,192		29,980			3.2		29,889
Chase Industries, Inc.^#	One stop	L + 5.75%	6.90%	09/2020	4,783		4,757			0.5		4,735
Chase Industries, Inc.	One stop	L + 5.75%	6.84%	09/2020	324		312			—		302
Inventus Power, Inc.^{*^}	One stop	L + 6.50%	7.73%	04/2020	8,140		8,094			0.8		7,652
Inventus Power, Inc^.(4)	One stop	L + 6.50%	N/A⁽⁵⁾	04/2020	—		(3		)	—		(31		)
Onicon Incorporated^{*^#}	One stop	L + 6.00%	7.30%	04/2020	13,111		13,005			1.4		13,111

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Diversified/Conglomerate Manufacturing - (continued)
Onicon Incorporated⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	04/2020	$	—	$	(5	)	—	%	$	—
PetroChoice Holdings, Inc.^{^}	Senior loan	L + 5.00%	6.12%	08/2022	1,754		1,711			0.2		1,754
Plex Systems, Inc^{.*^}	One stop	L + 7.50%	8.75%	06/2020	18,797		18,497			2.0		18,797
Plex Systems, Inc.⁽⁴⁾	One stop	L + 7.50%	N/A⁽⁵⁾	06/2020	—		(24		)	—		—
Reladyne, Inc.^{*^}	Senior loan	L + 5.25%	6.40%	07/2022	10,605		10,464			1.1		10,499
Reladyne, Inc.^#	Senior loan	L + 5.25%	6.33%	07/2022	3,131		3,101			0.3		3,100
Reladyne, Inc.^*	Senior loan	L + 5.25%	6.40%	07/2022	111		109			—		110
Reladyne, Inc.	Senior loan	L + 5.25%	6.35%	07/2022	70		69			—		69
Reladyne, Inc.^{^}	Senior loan	L + 5.25%	6.40%	07/2022	36		36			—		36
Reladyne, Inc.	Senior loan	L + 5.25%	6.40%	07/2022	13		11			—		12
Reladyne, Inc.	Senior loan	L + 5.25%	6.36%	07/2022	6		5			—		6
Reladyne, Inc.⁽⁴⁾	Senior loan	L + 5.25%	N/A⁽⁵⁾	07/2022	—		(1		)	—		(1		)
Sunless Merger Sub, Inc.^#	Senior loan	L + 5.00%	6.25%	07/2019	1,457		1,464			0.2		1,457
Sunless Merger Sub, Inc.	Senior loan	P + 3.75%	7.75%	07/2019	326		326			—		326
					92,856		91,908			9.7		91,823
Diversified/Conglomerate Service
Accellos, Inc.^{*^}	One stop	L + 5.75%	6.98%	07/2020	17,038		16,929			1.8		17,038
Accellos, Inc.⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	07/2020	—		(6		)	—		—
Actiance, Inc.^{*^}	One stop	L + 9.00%	10.23%	10/2019	3,962		3,849			0.4		3,962
Actiance, Inc.	One stop	L + 9.00%	10.23%	10/2019	20		20			—		20
Agility Recovery Solutions Inc.^{*^}	One stop	L + 6.50%	7.67%	03/2020	13,924		13,813			1.5		13,924
Agility Recovery Solutions Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	03/2020	—		(5		)	—		—
Bomgar Corporation^{^}	One stop	L + 7.50%	8.80%	06/2022	4,851		4,770			0.5		4,851
Bomgar Corporation⁽⁴⁾	One stop	L + 7.50%	N/A⁽⁵⁾	06/2022	—		(2		)	—		—
Clearwater Analytics, LLC^{*^}	One stop	L + 7.50%	8.55%	09/2022	9,594		9,445			1.0		9,594
Clearwater Analytics, LLC	One stop	L + 7.50%	8.72%	09/2022	11		9			—		11
Daxko Acquisition Corporation^{^#}	One stop	L + 6.50%	7.73%	09/2022	8,493		8,382			0.9		8,493
Daxko Acquisition Corporation	One stop	L + 6.50%	N/A⁽⁵⁾	09/2022	—		—			—		—
DISA Holdings Acquisition Subsidiary Corp.^#	Senior loan	L + 4.25%	5.47%	12/2020	428		426			—		428
EGD Security Systems, LLC	One stop	L + 6.25%	7.37%	06/2022	11,114		10,907			1.2		11,114
EGD Security Systems, LLC^{^}	One stop	L + 6.25%	7.55%	06/2022	98		97			—		98
EGD Security Systems, LLC	One stop	L + 6.25%	7.37%	06/2022	30		28			—		30
EGD Security Systems, LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	06/2022	—		(1		)	—		—
HealthcareSource HR, Inc^.*	One stop	L + 6.75%	8.05%	05/2020	20,771		20,465			2.2		20,771
HealthcareSource HR, Inc.⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	05/2020	—		(1		)	—		—
Host Analytics, Inc.	One stop	N/A	8.50% cash/2.25% PIK	08/2021	3,081		3,035			0.3		3,081
Host Analytics, Inc.	One stop	N/A	8.50% cash/2.25% PIK	08/2021	2,582		2,447			0.3		2,582
Host Analytics, Inc.⁽⁴⁾	One stop	N/A	N/A⁽⁵⁾	08/2021	—		(7		)	—		—
III US Holdings, LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	09/2022	—		(1		)	—		—
Integration Appliance, Inc.^{*^}	One stop	L + 8.25%	9.50%	09/2020	16,123		16,012			1.7		16,123
Integration Appliance, Inc.	One stop	L + 8.25%	9.50%	09/2020	7,914		7,797			0.8		7,914
Integration Appliance, Inc.	One stop	L + 8.25%	9.50%	09/2020	5,396		5,324			0.6		5,396
Integration Appliance, Inc.	One stop	L + 8.25%	9.50%	09/2020	2,484		2,460			0.3		2,484
Integration Appliance, Inc^.*	One stop	L + 8.25%	9.50%	09/2020	719		711			0.1		719
Integration Appliance, Inc.	One stop	L + 8.25%	9.50%	09/2020	462		454			0.1		462
Maverick Bidco Inc.^#	One stop	L + 6.25%	7.42%	04/2023	17,689		17,340			1.8		17,424
Maverick Bidco Inc.	One stop	L + 6.25%	7.48%	04/2023	27		25			—		25
Maverick Bidco Inc.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	04/2023	—		(2		)	—		—
Netsmart Technologies, Inc.^#	Senior loan	L + 4.50%	5.80%	04/2023	1,759		1,744			0.2		1,772
Netsmart Technologies, Inc.⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	04/2023	—		(8		)	—		—
Professional Datasolutions, Inc.^#	One stop	L + 5.50%	6.73%	05/2022	2,919		2,877			0.3		2,919
Professional Datasolutions, Inc.	One stop	L + 5.50%	N/A⁽⁵⁾	05/2022	—		—			—		—

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Diversified/Conglomerate Service - (continued)
PT Intermediate Holdings III, LLC	One stop	L + 6.50%	7.80%	06/2022	$	22,083	$	21,625		2.3	%	$	22,083
PT Intermediate Holdings III, LLC^*	One stop	L + 6.50%	7.80%	06/2022	2,182		2,162			0.2		2,182
PT Intermediate Holdings III, LLC	One stop	L + 6.50%	8.19%	06/2022	143		140			—		143
Saba Software, Inc.^#	One stop	L + 5.50%	6.73%	05/2023	20,348		20,002			2.1		20,145
Saba Software, Inc.⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	05/2023	—		(3		)	—		(2		)
Secure-24, LLC^{*^}	One stop	L + 5.00%	6.30%	08/2019	21,708		21,508			2.3		21,708
Secure-24, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	08/2019	—		(5		)	—		—
Severin Acquisition, LLC^{^}	Senior loan	L + 5.38%	6.68%	07/2021	885		875			0.1		901
Severin Acquisition, LLC^{^}	Senior loan	L + 5.00%	6.30%	07/2021	788		779			0.1		792
Severin Acquisition, LLC^{^}	Senior loan	L + 5.38%	6.68%	07/2021	603		595			0.1		613
Severin Acquisition, LLC^{^}	Senior loan	L + 4.88%	6.18%	07/2021	194		192			—		194
Switchfly, Inc.	One stop	L + 10.00%	9.66% cash/1.50% PIK	04/2020	2,390		2,277			0.2		2,281
Switchfly, Inc.	One stop	L + 10.00%	N/A⁽⁵⁾	04/2020	—		—			—		—
Trintech, Inc.^{*^#}	One stop	L + 6.00%	7.17%	10/2021	12,263		12,146			1.3		12,263
Trintech, Inc.	One stop	L + 6.00%	N/A⁽⁵⁾	10/2021	—		—			—		—
Vendavo, Inc.	One stop	L + 8.50%	9.66%	10/2019	17,982		17,782			1.9		17,654
Vendavo, Inc.⁽⁴⁾	One stop	L + 8.50%	N/A⁽⁵⁾	10/2019	—		(7		)	—		(25		)
Vendor Credentialing Service LLC^{^}	One stop	L + 6.00%	7.23%	11/2021	12,271		12,034			1.3		12,271
Vendor Credentialing Service LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	11/2021	—		(1		)	—		—
Verisys Corporation^#	One stop	L + 6.75%	8.05%	01/2023	3,936		3,881			0.4		3,936
Verisys Corporation⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	01/2023	—		(1		)	—		—
Vitalyst, LLC	Senior loan	L + 5.00%	6.25%	09/2017	1,250		1,249			0.1		1,250
Vitalyst, LLC	Senior loan	P + 4.00%	8.00%	09/2017	22		22			—		22
Workforce Software, LLC^{^}	One stop	L + 10.50%	4.66% cash/7.00% PIK	06/2021	5,250		5,221			0.6		5,250
Workforce Software, LLC	One stop	L + 10.50%	N/A⁽⁵⁾	06/2021	—		—			—		—
Xmatters, Inc. and Alarmpoint, Inc.	One stop	L + 9.25%	9.72% cash/0.75% PIK	08/2021	4,864		4,789			0.5		4,864
Xmatters, Inc. and Alarmpoint, Inc.	One stop	L + 9.25%	N/A⁽⁵⁾	08/2021	—		—			—		—
					280,651		276,595			29.5		279,760
Ecological
Pace Analytical Services, LLC	One stop	L + 6.00%	7.23%	09/2022	15,384		15,014			1.6		15,230
Pace Analytical Services, LLC^{^}	One stop	L + 6.00%	7.30%	09/2022	1,430		1,409			0.1		1,416
Pace Analytical Services, LLC	One stop	L + 6.00%	7.26%	09/2022	350		345			0.1		346
Pace Analytical Services, LLC	One stop	L + 6.00%	7.22%	09/2022	25		23			—		24
Pace Analytical Services, LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	09/2022	—		(5		)	—		(3		)
WRE Holding Corp.^#	Senior loan	L + 4.75%	6.09%	01/2023	1,021		1,009			0.1		1,011
WRE Holding Corp.	Senior loan	L + 4.75%	N/A⁽⁵⁾	01/2023	—		—			—		—
WRE Holding Corp.	Senior loan	L + 4.75%	N/A⁽⁵⁾	01/2023	—		—			—		—
WRE Holding Corp.⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	01/2023	—		(1		)	—		(1		)
					18,210		17,794			1.9		18,023
Electronics
Appriss Holdings, Inc.^{*^}	Senior loan	L + 5.25%	6.55%	11/2020	15,335		15,185			1.6		15,335
Appriss Holdings, Inc.	Senior loan	L + 5.25%	6.50%	11/2020	1,892		1,867			0.2		1,892
Compusearch Software Holdings, Inc.^{^}	Senior loan	L + 4.25%	5.43%	05/2021	1,469		1,467			0.1		1,469
Diligent Corporation^#	One stop	L + 6.25%	7.55%	04/2022	4,940		4,868			0.5		4,866
Diligent Corporation^*	One stop	L + 6.25%	7.55%	04/2022	4,851		4,741			0.5		4,778
Diligent Corporation^{*^}	One stop	L + 6.25%	7.55%	04/2022	2,655		2,613			0.3		2,615
Diligent Corporation⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	04/2022	—		(2		)	—		(2		)
ECI Acquisition Holdings, Inc.^{*^#}	One stop	L + 6.25%	7.55%	03/2019	21,051		20,913			2.2		21,051
ECI Acquisition Holdings, Inc.^*	One stop	L + 6.25%	7.55%	03/2019	1,363		1,354			0.1		1,363
ECI Acquisition Holdings, Inc.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	03/2019	—		(6		)	—		—
Gamma Technologies, LLC^{^}	One stop	L + 5.00%	6.23%	06/2021	7,574		7,524			0.8		7,574
Gamma Technologies, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	06/2021	—		(1		)	—		—

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Electronics - (continued)
LD Intermediate Holdings, Inc.^{*^}	Senior loan	L + 5.88%	7.06%	12/2022	$	2,556	$	2,368		0.3	%	$	2,430
Park Place Technologies LLC^{*^}	One stop	L + 5.00%	6.30%	06/2022	15,762		15,589			1.7		15,762
Park Place Technologies LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	06/2022	—		(2		)	—		—
Sloan Company, Inc., The^#	One stop	L + 7.25%	8.55%	04/2020	7,456		7,376			0.7		7,084
Sloan Company, Inc., The	One stop	L + 7.25%	8.46%	04/2020	20		19			—		18
Sovos Compliance^{*^}	One stop	L + 7.25%	8.48%	03/2022	9,352		9,201			1.0		9,352
Sovos Compliance⁽⁴⁾	One stop	L + 7.25%	N/A⁽⁵⁾	03/2022	—		(1		)	—		—
Sparta Holding Corporation^{*^#}	One stop	L + 5.50%	6.73%	07/2020	22,309		22,166			2.4		22,309
Sparta Holding Corporation⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	07/2020	—		(20		)	—		—
Watchfire Enterprises, Inc.	Second lien	L + 8.00%	9.30%	10/2021	9,434		9,298			1.0		9,434
					128,019		126,517			13.4		127,330
Grocery
MyWebGrocer, Inc.^*	One stop	L + 8.75%	10.00%	09/2017	14,271		14,146			1.5		14,271
Teasdale Quality Foods, Inc.^#	Senior loan	L + 4.75%	5.75%	10/2020	3,567		3,550			0.4		3,550
Teasdale Quality Foods, Inc.^#	Senior loan	L + 4.75%	5.93%	10/2020	698		686			0.1		695
Teasdale Quality Foods, Inc.^#	Senior loan	L + 4.75%	6.05%	10/2020	522		517			—		520
Teasdale Quality Foods, Inc.^#	Senior loan	L + 4.75%	5.92%	10/2020	256		254			—		255
					19,314		19,153			2.0		19,291
Healthcare, Education and Childcare
Active Day, Inc.	One stop	L + 6.00%	7.23%	12/2021	13,436		13,162			1.4		13,436
Active Day, Inc.^{^}	One stop	L + 6.00%	7.23%	12/2021	1,037		1,023			0.1		1,037
Active Day, Inc.	One stop	P + 5.00%	9.25%	12/2021	666		648			0.1		666
Active Day, Inc.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	12/2021	—		(1		)	—		—
Acuity Eyecare Holdings, LLC	One stop	L + 6.75%	7.95%	03/2022	3,623		3,537			0.4		3,623
Acuity Eyecare Holdings, LLC	One stop	L + 6.75%	7.98%	03/2022	38		36			—		38
Acuity Eyecare Holdings, LLC⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	03/2022	—		(1		)	—		—
ADCS Clinics Intermediate Holdings, LLC	One stop	L + 5.75%	7.05%	05/2022	21,334		20,814			2.2		21,334
ADCS Clinics Intermediate Holdings, LLC^*	One stop	L + 5.75%	7.05%	05/2022	109		107			—		109
ADCS Clinics Intermediate Holdings, LLC	One stop	P + 4.75%	9.00%	05/2022	47		46			—		47
ADCS Clinics Intermediate Holdings, LLC^*	One stop	L + 5.75%	7.05%	05/2022	32		31			—		32
ADCS Clinics Intermediate Holdings, LLC	One stop	P + 4.75%	9.00%	05/2022	5		2			—		5
Agilitas USA, Inc.^#	One stop	L + 6.00%	7.16%	04/2022	8,460		8,379			0.9		8,375
Agilitas USA, Inc.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	04/2022	—		(1		)	—		(1		)
Agilitas USA, Inc.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	04/2022	—		(1		)	—		—
Aris Teleradiology Company, LLC^*	Senior loan	L + 5.50%	6.80%	03/2021	2,706		2,685			0.3		2,490
Aris Teleradiology Company, LLC	Senior loan	L + 5.50%	6.66%	03/2021	25		25			—		23
Avalign Technologies, Inc.^{^}	Senior loan	L + 4.50%	5.73%	07/2021	1,119		1,115			0.1		1,119
BIORECLAMATIONIVT, LLC^{*^#}	One stop	L + 5.75%	6.98%	01/2021	14,088		13,912			1.5		14,088
BIORECLAMATIONIVT, LLC⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	01/2021	—		(1		)	—		—
California Cryobank, LLC^{^}	One stop	L + 5.50%	6.80%	08/2019	1,535		1,528			0.2		1,535
California Cryobank, LLC^{^}	One stop	L + 5.50%	6.80%	08/2019	714		705			0.1		714
California Cryobank, LLC^{^}	One stop	L + 5.50%	6.80%	08/2019	206		206			—		206
California Cryobank, LLC⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	08/2019	—		(1		)	—		—
Certara L.P.^{*^#}	One stop	L + 5.50%	6.80%	12/2018	25,931		25,767			2.7		25,931
Certara L.P.⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	12/2018	—		(6		)	—		—
CLP Healthcare Services, Inc.^{^}	Senior loan	L + 5.00%	6.30%	12/2020	3,934		3,905			0.4		3,855
Curo Health Services LLC^#	Senior loan	L + 4.75%	5.93%	02/2022	3,282		3,269			0.4		3,325
DCA Investment Holding, LLC^{*^#}	One stop	L + 5.25%	6.48%	07/2021	18,823		18,544			2.0		18,823
DCA Investment Holding, LLC^{*^#}	One stop	L + 5.25%	6.48%	07/2021	13,501		13,380			1.4		13,501
DCA Investment Holding, LLC^#	One stop	L + 5.25%	6.48%	07/2021	2,481		2,439			0.3		2,481
DCA Investment Holding, LLC	One stop	P + 4.25%	8.50%	07/2021	350		338			—		350
DCA Investment Holding, LLC⁽⁴⁾	One stop	L + 5.25%	N/A⁽⁵⁾	07/2021	—		(3		)	—		—

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Healthcare, Education and Childcare - (continued)
Deca Dental Management LLC^{*^}	One stop	L + 6.25%	7.55%	07/2020	$	4,086	$	4,048		0.4	%	$	4,086
Deca Dental Management LLC	One stop	L + 6.25%	7.48%	07/2020	497		493			0.1		497
Deca Dental Management LLC	One stop	L + 6.25%	7.48%	07/2020	50		50			—		50
Deca Dental Management LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	07/2020	—		(2		)	—		—
Delta Educational Systems^*(6)	Senior loan	P + 6.75%	4.75% cash/2.00% PIK	12/2018	1,438		1,433			—		—
Delta Educational Systems⁽⁴⁾⁽⁶⁾	Senior loan	L + 6.00%	N/A⁽⁵⁾	12/2018	—		—			—		(60		)
Dental Holdings Corporation	One stop	L + 5.50%	6.67%	02/2020	7,436		7,328			0.8		7,436
Dental Holdings Corporation	One stop	L + 5.50%	6.70%	02/2020	1,133		1,120			0.1		1,133
Dental Holdings Corporation	One stop	L + 5.50%	6.70%	02/2020	220		211			—		220
eSolutions, Inc.^#	One stop	L + 6.50%	7.73%	03/2022	16,342		16,057			1.7		16,179
eSolutions, Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	03/2022	—		(1		)	—		(1		)
Excelligence Learning Corporation#	One stop	L + 6.00%	7.21%	04/2023	4,866		4,819			0.5		4,817
Eyecare Services Partners Holdings LLC	One stop	L + 6.25%	7.43%	05/2023	8,026		7,810			0.8		7,946
Eyecare Services Partners Holdings LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	05/2023	—		(3		)	—		(2		)
Eyecare Services Partners Holdings LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	05/2023	—		(4		)	—		—
G & H Wire Company, Inc.^{*^}	One stop	L + 5.75%	7.05%	12/2017	13,056		13,039			1.4		13,056
G & H Wire Company, Inc.	One stop	P + 4.50%	8.75%	12/2017	196		195			—		196
Immucor, Inc.^#	Senior loan	L + 5.00%	6.00%	08/2018	1,762		1,744			0.2		1,780
Joerns Healthcare, LLC^{*^}	One stop	L + 6.50%	7.88%	05/2020	3,503		3,464			0.3		3,263
Kareo, Inc.	One stop	L + 9.00%	10.29%	06/2022	4,518		4,291			0.5		4,473
Kareo, Inc.	One stop	L + 9.00%	N/A⁽⁵⁾	06/2022	—		—			—		—
Katena Holdings, Inc.^{^}	One stop	L + 6.25%	7.55%	06/2021	8,633		8,573			0.9		8,633
Katena Holdings, Inc.^{^}	One stop	L + 6.25%	7.55%	06/2021	843		838			0.1		843
Katena Holdings, Inc.	One stop	P + 5.25%	9.50%	06/2021	54		53			—		54
Lombart Brothers, Inc.^#	One stop	L + 6.75%	8.05%	04/2022	3,639		3,553			0.4		3,639
Lombart Brothers, Inc.^#(7)	One stop	L + 6.75%	8.05%	04/2022	1,669		1,642			0.2		1,669
Lombart Brothers, Inc.⁽⁷⁾	One stop	L + 6.75%	N/A⁽⁵⁾	04/2022	—		—			—		—
Lombart Brothers, Inc.⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	04/2022	—		(1		)	—		—
Maverick Healthcare Group, LLC^*	Senior loan	P + 8.50%	10.75% cash/2.00% PIK	12/2017	1,946		1,946			0.2		1,810
Maverick Healthcare Group, LLC	Senior loan	P + 6.50%	5.25% cash/5.50% PIK	12/2017	82		82			—		82
MWD Management, LLC & MWD Services, Inc.^#	One stop	L + 5.25%	6.55%	06/2023	5,940		5,866			0.6		5,881
MWD Management, LLC & MWD Services, Inc.⁽⁴⁾	One stop	L + 5.25%	N/A⁽⁵⁾	06/2022	—		(1		)	—		(1		)
MWD Management, LLC & MWD Services, Inc.⁽⁴⁾	One stop	L + 5.25%	N/A⁽⁵⁾	06/2023	—		(2		)	—		—
Oliver Street Dermatology Holdings, LLC	One stop	L + 6.50%	7.80%	05/2022	9,458		9,238			1.0		9,458
Oliver Street Dermatology Holdings, LLC	One stop	L + 6.50%	8.10%	05/2022	74		73			—		74
Oliver Street Dermatology Holdings, LLC	One stop	L + 6.50%	7.67%	05/2022	46		45			—		46
Oliver Street Dermatology Holdings, LLC^*	One stop	L + 6.50%	7.80%	05/2022	42		41			—		42
Oliver Street Dermatology Holdings, LLC	One stop	L + 6.50%	7.80%	05/2022	33		32			—		33
Oliver Street Dermatology Holdings, LLC	One stop	L + 6.50%	7.66%	05/2022	30		30			—		30
Oliver Street Dermatology Holdings, LLC	One stop	L + 6.50%	7.69%	05/2022	18		16			—		18
Pinnacle Treatment Centers, Inc.	One stop	L + 6.25%	7.37%	08/2021	10,005		9,779			1.1		10,005
Pinnacle Treatment Centers, Inc.	One stop	P + 5.00%	9.25%	08/2021	22		21			—		22
Pinnacle Treatment Centers, Inc.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	08/2021	—		(2		)	—		—
PPT Management Holdings, LLC^{^#}	One stop	L + 6.00%	7.30%	12/2022	10,248		10,038			1.1		10,248
PPT Management Holdings, LLC	One stop	L + 6.00%	7.22%	12/2022	150		146			—		150
PPT Management Holdings, LLC	One stop	L + 6.00%	7.30%	12/2022	110		107			—		110
Premise Health Holding Corp.^{*^#}	One stop	L + 4.50%	5.80%	06/2020	14,850		14,784			1.6		14,850
Premise Health Holding Corp.⁽⁴⁾	One stop	L + 4.50%	N/A⁽⁵⁾	06/2020	—		(13		)	—		—
Pyramid Healthcare, Inc.	One stop	L + 6.50%	7.72%	08/2019	84		82			—		84
Radiology Partners, Inc.^{^#}	One stop	L + 5.75%	7.05%	09/2020	22,400		22,147			2.4		22,400
Radiology Partners, Inc.	One stop	L + 5.75%	7.05%	09/2020	928		911			0.1		928
Radiology Partners, Inc.	One stop	L + 5.75%	7.05%	09/2020	703		702			0.1		703

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Healthcare, Education and Childcare - (continued)
Radiology Partners, Inc.⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	09/2020	$	—	$	(4	)	—	%	$	—
Reliant Pro ReHab, LLC^*	Senior loan	L + 5.00%	6.30%	12/2017	2,493		2,489			0.3		2,493
Reliant Pro ReHab, LLC	Senior loan	P + 4.00%	8.25%	12/2017	396		394			—		396
Riverchase MSO, LLC^#	Senior loan	L + 5.25%	6.55%	10/2022	4,993		4,926			0.5		4,993
Riverchase MSO, LLC	Senior loan	L + 5.25%	6.55%	10/2022	21		20			—		21
RXH Buyer Corporation^{*^}	One stop	L + 5.75%	7.05%	09/2021	17,303		17,061			1.8		16,958
RXH Buyer Corporation^*	One stop	L + 5.75%	7.05%	09/2021	1,958		1,931			0.2		1,918
RXH Buyer Corporation	One stop	L + 5.75%	7.58%	09/2021	55		52			—		51
SLMP, LLC	One stop	L + 6.00%	7.23%	05/2023	6,212		6,059			0.6		6,150
SLMP, LLC	One stop	N/A	7.50% PIK	05/2027	83		83			—		83
SLMP, LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	05/2023	—		(1		)	—		(1		)
SLMP, LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	05/2023	—		(1		)	—		—
Spear Education, LLC^{^}	One stop	L + 5.75%	6.90%	08/2019	4,656		4,631			0.5		4,656
Spear Education, LLC	One stop	L + 5.75%	6.90%	08/2019	75		75			—		75
Spear Education, LLC	One stop	L + 5.75%	N/A⁽⁵⁾	08/2019	—		—			—		—
Summit Behavioral Holdings I, LLC^*	One stop	L + 5.00%	6.23%	06/2021	4,349		4,305			0.5		4,349
Summit Behavioral Holdings I, LLC	One stop	L + 5.00%	6.23%	06/2021	113		112			—		113
Summit Behavioral Holdings I, LLC	One stop	L + 5.00%	6.23%	06/2021	15		15			—		15
WHCG Management, LLC^*#	Senior loan	L + 4.75%	6.05%	03/2023	10,400		10,277			1.1		10,400
WHCG Management, LLC⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	03/2023	—		(1		)	—		—
WHCG Management, LLC⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	03/2023	—		(3		)	—		—
WIRB-Copernicus Group, Inc.^{*^}	Senior loan	L + 5.00%	6.30%	08/2022	9,837		9,753			1.0		9,837
WIRB-Copernicus Group, Inc.^#	Senior loan	L + 5.00%	6.30%	08/2022	5,680		5,633			0.6		5,680
WIRB-Copernicus Group, Inc.	Senior loan	L + 5.00%	N/A⁽⁵⁾	08/2022	—		—			—		—
Young Innovations, Inc.^*#	Senior loan	L + 5.00%	6.30%	01/2019	3,597		3,570			0.4		3,597
Young Innovations, Inc.	Senior loan	L + 5.00%	6.30%	01/2019	13		13			—		13
					368,867		363,795			38.6		365,819
Home and Office Furnishings, Housewares, and Durable Consumer
1A Smart Start LLC^#	Senior loan	L + 4.50%	5.80%	02/2022	930		926			0.1		929
CST Buyer Company^{^}	Senior loan	L + 6.25%	7.61%	03/2023	2,649		2,580			0.3		2,649
CST Buyer Company⁽⁴⁾	Senior loan	L + 6.25%	N/A⁽⁵⁾	03/2023	—		(1		)	—		—
Plano Molding Company, LLC^{*^#}	One stop	L + 7.50%	8.63%	05/2021	14,522		14,356			1.4		13,651
					18,101		17,861			1.8		17,229

Hotels, Motels, Inns, and Gaming
Aimbridge Hospitality, LLC^{*^}	One stop	L + 5.50%	6.72%	06/2022	10,066		9,890			1.0		9,889
Aimbridge Hospitality, LLC	One stop	L + 5.50%	6.72%	06/2022	16		15			—		15
Aimbridge Hospitality, LLC⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	06/2022	—		(1		)	—		(1		)
					10,082		9,904			1.0		9,903

Insurance
Captive Resources Midco,^{LLC*^#}	One stop	L + 5.75%	6.95%	06/2020	25,555		25,355			2.7		25,555
Captive Resources Midco, LLC⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	06/2020	—		(13		)	—		—
Captive Resources Midco, LLC⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	06/2020	—		(14		)	—		—
Higginbotham Insurance Agency, Inc^.*	Senior loan	L + 5.00%	6.23%	11/2021	1,599		1,588			0.2		1,599
Internet Pipeline, Inc.	One stop	L + 7.25%	8.48%	08/2022	4,847		4,737			0.5		4,798
Internet Pipeline, Inc.^*	One stop	L + 6.25%	7.42%	08/2022	2,103		2,082			0.2		2,082
Internet Pipeline, Inc.⁽⁴⁾	One stop	L + 7.25%	N/A⁽⁵⁾	08/2021	—		(1		)	—		—
RSC Acquisition, Inc.^#	Senior loan	L + 5.25%	6.55%	11/2022	787		782			0.1		783
RSC Acquisition, Inc.⁽⁴⁾	Senior loan	L + 5.25%	N/A⁽⁵⁾	11/2022	—		(2		)	—		(2		)
					34,891		34,514			3.7		34,815

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Leisure, Amusement, Motion Pictures, Entertainment
NFD Operating, LLC^#	One stop	L + 7.00%	8.25%	06/2021	$	2,331	$	2,303		0.3	%	$	2,331
NFD Operating, LLC	One stop	L + 7.00%	N/A⁽⁵⁾	06/2021	—		—			—		—
NFD Operating, LLC⁽⁴⁾	One stop	L + 7.00%	N/A⁽⁵⁾	06/2021	—		(1		)	—		—
PADI Holdco, Inc.^#	One stop	L + 6.50%	7.80%	04/2023	19,599		19,314			2.0		19,305
PADI Holdco, Inc.	One stop	L + 6.50%	7.80%	04/2022	53		51			—		51
Self Esteem Brands, LLC^{*^#}	Senior loan	L + 4.75%	5.98%	02/2020	18,301		18,197			1.9		18,301
Self Esteem Brands, LLC⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	02/2020	—		(4		)	—		—
Teaching Company, The	One stop	L + 6.25%	7.37%	08/2020	18,783		18,606			1.9		18,032
Teaching Company, The	One stop	L + 6.25%	7.73%	08/2020	113		112			—		107
Titan Fitness, LLC^*	One stop	L + 7.00%	8.25%	09/2019	13,122		13,007			1.4		13,122
Titan Fitness, LLC	One stop	L + 7.00%	8.25%	09/2019	1,975		1,964			0.2		1,975
Titan Fitness, LLC^*	One stop	L + 7.00%	8.25%	09/2019	1,738		1,728			0.2		1,738
Titan Fitness, LLC⁽⁴⁾	One stop	L + 7.00%	N/A⁽⁵⁾	09/2019	—		(10		)	—		—
Titan Fitness, LLC⁽⁴⁾	One stop	L + 7.00%	N/A⁽⁵⁾	09/2019	—		(16		)	—		—
					76,015		75,251			7.9		74,962
Mining, Steel, Iron and Non-Precious Metals
Benetech, Inc.^*	One stop	L + 11.00%	10.25% cash/2.00% PIK	08/2018	4,483		4,477			0.4		3,587
Benetech, Inc.	One stop	P + 9.75%	11.97% cash/2.00% PIK	08/2018	368		367			—		144
					4,851		4,844			0.4		3,731
Oil and Gas
Drilling Info, Inc.^{^#(8)}	One stop	L + 5.25%	6.55%	06/2020	1,700		1,683			0.2		1,700
Drilling Info, Inc.^*(8)	One stop	L + 5.25%	6.55%	06/2020	482		473			0.1		482
Drilling Info, Inc.⁽⁸⁾	One stop	L + 5.25%	N/A⁽⁵⁾	06/2020	—		—			—		—
					2,182		2,156			0.3		2,182
Personal and Non Durable Consumer Products (Mfg. Only)
Georgica Pine Clothiers, LLC	One stop	L + 5.50%	6.80%	11/2021	5,693		5,610			0.6		5,693
Georgica Pine Clothiers, LLC^{^}	One stop	L + 5.50%	6.80%	11/2021	496		492			0.1		496
Georgica Pine Clothiers, LLC^*	One stop	L + 5.50%	6.80%	11/2021	348		345			—		348
Georgica Pine Clothiers, LLC	One stop	L + 5.50%	6.80%	11/2021	38		37			—		38
IMPLUS Footwear, LLC	One stop	L + 6.75%	8.04%	04/2021	10,615		10,459			1.1		10,615
IMPLUS Footwear, LLC	One stop	L + 6.75%	7.91%	04/2021	1,869		1,841			0.2		1,869
Massage Envy, LLC^{*^#}	One stop	L + 6.75%	8.05%	09/2020	35,279		34,927			3.7		35,279
Massage Envy, LLC	One stop	L + 6.75%	7.97%	09/2020	316		305			—		316
Massage Envy, LLC	One stop	L + 6.75%	7.93%	09/2020	100		99			—		100
Massage Envy, LLC	One stop	L + 6.75%	7.97%	09/2020	35		35			—		35
Massage Envy, LLC	One stop	L + 6.75%	8.01%	09/2020	5		5			—		5
Orthotics Holdings, Inc.^*#	One stop	L + 6.00%	7.23%	02/2020	8,311		8,236			0.9		8,311
Orthotics Holdings, Inc.^*#(7)	One stop	L + 6.00%	7.23%	02/2020	1,362		1,350			0.1		1,362
Orthotics Holdings, Inc.⁽⁴⁾⁽⁷⁾	One stop	L + 6.00%	N/A⁽⁵⁾	02/2020	—		(1		)	—		—
Orthotics Holdings, Inc.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	02/2020	—		(11		)	—		—
Team Technologies Acquisition Company^{^}	Senior loan	L + 5.00%	6.25%	12/2017	4,421		4,415			0.5		4,413
Team Technologies Acquisition Company^#	Senior loan	L + 5.50%	6.75%	12/2017	815		813			0.1		824
Team Technologies Acquisition Company⁽⁴⁾	Senior loan	L + 5.00%	N/A⁽⁵⁾	12/2017	—		—			—		(1		)
					69,703		68,957			7.3		69,703
Personal, Food and Miscellaneous Services
Community Veterinary Partners, LLC⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	10/2021	—		(1		)	—		—
Ignite Restaurant Group, Inc^{.^(6)}	One stop	P + 6.00%	10.25%	02/2019	4,312		4,285			0.2		1,638
PetVet Care Centers LLC^#	One stop	L + 6.00%	7.22%	06/2023	16,822		16,655			1.8		16,654
PetVet Care Centers LLC	One stop	L + 6.00%	7.22%	06/2023	14		11			—		11
PetVet Care Centers LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	06/2023	—		(10		)	—		(10		)
Southern Veterinary Partners, LLC^#	One stop	L + 5.00%	6.13%	06/2020	3,900		3,871			0.4		3,880
Southern Veterinary Partners, LLC	One stop	L + 5.00%	N/A⁽⁵⁾	06/2020	—		—			—		—

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Personal, Food and Miscellaneous Services - (continued)
Southern Veterinary Partners, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	06/2020	$	—	$	(1	)	—	%	$	—
Vetcor Professional Practices LLC^{*^#}	One stop	L + 6.25%	7.55%	04/2021	28,822		28,392			3.0		28,822
Vetcor Professional Practices LLC^*	One stop	L + 6.25%	7.55%	04/2021	959		951			0.1		959
Vetcor Professional Practices LLC^#	One stop	L + 6.25%	7.55%	04/2021	950		936			0.1		950
Vetcor Professional Practices LLC	One stop	L + 6.25%	7.55%	04/2021	864		850			0.1		864
Vetcor Professional Practices LLC^#	One stop	L + 6.25%	7.55%	04/2021	746		746			0.1		746
Vetcor Professional Practices LLC^{^}	One stop	L + 6.25%	7.55%	04/2021	727		716			0.1		727
Vetcor Professional Practices LLC^#	One stop	L + 6.25%	7.55%	04/2021	286		284			—		286
Vetcor Professional Practices LLC^#	One stop	L + 6.25%	7.55%	04/2021	234		232			—		234
Vetcor Professional Practices LLC	One stop	L + 6.25%	7.55%	04/2021	119		110			—		119
Vetcor Professional Practices LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	04/2021	—		(4		)	—		—
Veterinary Specialists of North America, LLC^#	One stop	L + 5.25%	6.42%	07/2021	7,424		7,348			0.8		7,424
Veterinary Specialists of North America, LLC	One stop	L + 5.25%	6.55%	07/2021	90		74			—		90
Veterinary Specialists of North America, LLC^#	One stop	L + 5.25%	6.43%	07/2021	63		63			—		63
Veterinary Specialists of North America, LLC⁽⁴⁾	One stop	L + 5.25%	N/A⁽⁵⁾	07/2021	—		(3		)	—		—
Wetzel's Pretzels, LLC	One stop	L + 6.75%	7.83%	09/2021	6,707		6,554			0.7		6,707
Wetzel's Pretzels, LLC⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	09/2021	—		(1		)	—		—
					73,039		72,058			7.4		70,164
Printing and Publishing
Brandmuscle, Inc.^#	Senior loan	L + 5.00%	6.30%	12/2021	626		621			0.1		631
Marketo, Inc.	One stop	L + 9.50%	10.80%	08/2021	9,940		9,694			1.0		9,940
Marketo, Inc.⁽⁴⁾	One stop	L + 9.50%	N/A⁽⁵⁾	08/2021	—		(1		)	—		—
					10,566		10,314			1.1		10,571
Retail Stores
Batteries Plus Holding Corporation	One stop	L + 6.75%	7.98%	07/2022	13,757		13,459			1.5		13,757
Batteries Plus Holding Corporation⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	07/2022	—		(2		)	—		—
CVS Holdings I, LP^{*^#}	One stop	L + 6.25%	7.48%	08/2021	22,114		21,809			2.3		22,114
CVS Holdings I, LP^*	One stop	L + 6.25%	7.48%	08/2021	318		313			—		318
CVS Holdings I, LP⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	08/2020	—		(2		)	—		—
CVS Holdings I, LP⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	08/2021	—		(7		)	—		—
Cycle Gear, Inc.^{^}	One stop	L + 6.50%	7.65%	01/2020	10,453		10,336			1.1		10,453
Cycle Gear, Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	01/2020	—		(6		)	—		—
Cycle Gear, Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	01/2020	—		(13		)	—		—
DTLR, Inc.^{*^}	One stop	L + 6.50%	7.67%	10/2020	11,309		11,234			1.2		11,309
Elite Sportswear, L.P.	Senior loan	L + 5.25%	6.55%	03/2020	6,959		6,863			0.7		6,975
Elite Sportswear, L.P.	Senior loan	L + 5.00%	6.30%	03/2020	2,799		2,760			0.3		2,787
Elite Sportswear, L.P.	Senior loan	L + 5.25%	6.55%	03/2020	1,440		1,425			0.2		1,443
Elite Sportswear, L.P.	Senior loan	P + 3.75%	8.00%	03/2020	686		680			0.1		683
Elite Sportswear, L.P.	Senior loan	L + 5.25%	6.55%	03/2020	219		216			—		219
Elite Sportswear, L.P.^#	Senior loan	L + 5.25%	6.49%	03/2020	209		207			—		209
Elite Sportswear, L.P.	One stop	L + 5.00%	6.62%	06/2018	18		17			—		17
Feeders Supply Company, LLC	One stop	L + 5.75%	6.98%	04/2021	5,181		5,091			0.5		5,181
Feeders Supply Company, LLC	Subordinated debt	N/A	12.50% cash/7.00% PIK	04/2021	58		58			—		58
Feeders Supply Company, LLC	One stop	L + 5.75%	N/A⁽⁵⁾	04/2021	—		—			—		—
Marshall Retail Group LLC, The^{^#}	One stop	L + 6.00%	7.15%	08/2020	12,023		11,944			1.3		12,023
Marshall Retail Group LLC, The	One stop	P + 4.75%	9.00%	08/2019	439		424			—		439
Mills Fleet Farm Group LLC^{*^}	One stop	L + 5.50%	6.73%	02/2022	1,815		1,717			0.2		1,815
Paper Source, Inc.^{^#}	One stop	L + 6.25%	7.55%	09/2018	12,658		12,610			1.3		12,658
Paper Source, Inc.^*	One stop	L + 6.25%	7.55%	09/2018	1,681		1,672			0.2		1,681
Paper Source, Inc.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	09/2018	—		(5		)	—		—
Pet Holdings ULC^{*^(7)(9)}	One stop	L + 5.50%	6.65%	07/2022	14,664		14,418			1.6		14,664
Pet Holdings ULC⁽⁷⁾⁽⁹⁾	One stop	P + 4.50%	8.75%	07/2022	120		117			—		120
Pet Holdings ULC⁽⁷⁾⁽⁹⁾	One stop	L + 5.50%	6.62%	07/2022	28		27			—		28

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Retail Stores - (continued)
Sneaker Villa, Inc.^*#	One stop	L + 7.75%	8.98%	12/2020	$	12,373	$	12,286		1.3	%	$	12,373
					131,321		129,648			13.8		131,324
Telecommunications
Arise Virtual Solutions, Inc.^{^}	One stop	L + 6.50%	7.80%	12/2018	1,270		1,264			0.1		1,270
Arise Virtual Solutions, Inc.	One stop	L + 6.50%	N/A⁽⁵⁾	12/2018	—		—			—		—
NetMotion Wireless Holdings, Inc.^{*^#}	One stop	L + 6.25%	7.55%	10/2021	7,357		7,262			0.8		7,357
NetMotion Wireless Holdings, Inc.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	10/2021	—		(1		)	—		—
					8,627		8,525			0.9		8,627
Textile and Leather
SHO Holding I Corporation^*	Senior loan	L + 5.00%	6.23%	10/2022	2,239		2,198			0.3		2,239
SHO Holding I Corporation	Senior loan	L + 4.00%	5.15%	10/2021	16		15			—		15
					2,255		2,213			0.3		2,254
Utilities
Arcos, LLC	One stop	L + 6.00%	7.30%	02/2021	3,679		3,626			0.4		3,679
Arcos, LLC	One stop	L + 6.00%	N/A⁽⁵⁾	02/2021	—		—			—		—
Power Plan Holdings, Inc.^{*^}	Senior loan	L + 4.75%	5.98%	02/2022	6,434		6,340			0.7		6,434
PowerPlan Holdings, Inc.^*	Senior loan	L + 4.75%	6.05%	02/2022	5,673		5,617			0.6		5,673
PowerPlan Holdings, Inc.⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	02/2021	—		(6		)	—		—
					15,786		15,577			1.7		15,786
Total non-controlled/non-affiliate company debt investments					$	1,647,552	$	1,626,613		172.1	%	$	1,631,532

Equity investments^(10)(11)
Aerospace and Defense
NTS Technical Systems	Common stock	N/A	N/A	N/A	2		$	1,506		0.1	%	$	706
NTS Technical Systems	Preferred stock B	N/A	N/A	N/A	—		256			—		264
NTS Technical Systems	Preferred stock A	N/A	N/A	N/A	—		128			—		143
Tresys Technology Holdings, Inc.	Common stock	N/A	N/A	N/A	295		295			—		—
Whitcraft LLC	Common stock	N/A	N/A	N/A	—		375			0.1		375
							2,560			0.2		1,488
Automobile
Polk Acquisition Corp.	LP interest	N/A	N/A	N/A	1		144			—		122
Beverage, Food and Tobacco
Atkins Nutritionals, Inc	LLC interest	N/A	N/A	N/A	57		746			0.3		2,415
Benihana, Inc.	LLC units	N/A	N/A	N/A	43		699			—		396
C. J. Foods, Inc.	Preferred stock	N/A	N/A	N/A	—		75			—		302
First Watch Restaurants, Inc.	Common stock	N/A	N/A	N/A	9		964			0.3		2,379
Hopdoddy Holdings, LLC	LLC interest	N/A	N/A	N/A	27		130			—		89
Hopdoddy Holdings, LLC	LLC interest	N/A	N/A	N/A	12		36			—		25
Julio & Sons Company	LLC interest	N/A	N/A	N/A	521		521			0.1		1,081
P&P Food Safety US Acquisition, Inc.	LLC interest	N/A	N/A	N/A	2		204			—		219
Purfoods, LLC	LLC interest	N/A	N/A	N/A	381		381			—		442
Richelieu Foods, Inc.	LP interest	N/A	N/A	N/A	220		220			0.1		614
Rubio's Restaurants, Inc.	Preferred stock	N/A	N/A	N/A	2		945			0.2		1,951
Tate's Bake Shop, Inc.	LP interest	N/A	N/A	N/A	462		428			0.1		586
Uinta Brewing Company	LP interest	N/A	N/A	N/A	462		462			—		—
							5,811			1.1		10,499
Buildings and Real Estate
Brooks Equipment Company, LLC	Common stock	N/A	N/A	N/A	10		1,020			0.2		1,346

Chemicals, Plastics and Rubber
Flexan, LLC	Preferred stock A	N/A	N/A	N/A	—		90			—		106

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾	Amortized Cost		Percentage of Net Assets		Fair Value
Chemicals, Plastics and Rubber - (continued)
Flexan, LLC	Common stock	N/A	N/A	N/A	1	$	—	—	%	$	22
						90		—		128
Diversified/Conglomerate Manufacturing
Chase Industries, Inc.	LLC units	N/A	N/A	N/A	1	1,186		0.2		2,171
Inventus Power, Inc.	Preferred stock	N/A	N/A	N/A	—	370		—		36
Inventus Power, Inc.	Common stock	N/A	N/A	N/A	—	—		—		—
Reladyne, Inc.	LP interest	N/A	N/A	N/A	—	249		0.1		435
Sunless Merger Sub, Inc.	LP interest	N/A	N/A	N/A	160	160		—		—
						1,965		0.3		2,642
Diversified/Conglomerate Service
Actiance, Inc.	Warrant	N/A	N/A	N/A	510	122		—		151
Agility Recovery Solutions Inc.	Preferred stock	N/A	N/A	N/A	67	341		0.1		461
Bomgar Corporation	Common stock	N/A	N/A	N/A	—	108		—		103
Bomgar Corporation	Common stock	N/A	N/A	N/A	72	1		—		—
DISA Holdings Acquisition Subsidiary Corp.	Common stock	N/A	N/A	N/A	—	154		—		109
HealthcareSource HR, Inc.	LLC interest	N/A	N/A	N/A	—	348		0.1		370
Host Analytics, Inc.	Warrant	N/A	N/A	N/A	166	130		—		271
Marathon Data Operating Co., LLC	LLC units	N/A	N/A	N/A	1	264		0.1		469
Marathon Data Operating Co., LLC	LLC units	N/A	N/A	N/A	1	263		—		—
Maverick Bidco Inc.	LLC units	N/A	N/A	N/A	1	369		—		369
Project Alpha Intermediate Holding, Inc.	Common stock	N/A	N/A	N/A	—	417		0.1		450
Project Alpha Intermediate Holding, Inc.	Common stock	N/A	N/A	N/A	103	4		—		107
Secure-24, LLC	LLC units	N/A	N/A	N/A	263	148		—		473
Switchfly, Inc.	Warrant	N/A	N/A	N/A	60	85		—		85
Vendavo, Inc.	Preferred stock	N/A	N/A	N/A	827	827		0.1		765
Verisys Corporation	LLC interest	N/A	N/A	N/A	261	261		—		261
Vitalyst, LLC	Preferred stock A	N/A	N/A	N/A	—	61		—		61
Vitalyst, LLC	Common stock	N/A	N/A	N/A	1	7		—		—
Workforce Software, LLC	LLC units	N/A	N/A	N/A	308	308		—		333
Xmatters, Inc. and Alarmpoint, Inc.	Warrant	N/A	N/A	N/A	43	34		—		32
						4,252		0.5		4,870
Ecological
Pace Analytical Services, LLC	LLC units	N/A	N/A	N/A	3	277		—		333
Electronics
Diligent Corporation ⁽¹²⁾	Preferred stock	N/A	N/A	N/A	83	66		—		121
ECI Acquisition Holdings, Inc.	Common stock	N/A	N/A	N/A	9	872		0.1		1,387
Gamma Technologies, LLC	LLC units	N/A	N/A	N/A	1	134		—		397
SEI, Inc.	LLC units	N/A	N/A	N/A	340	265		—		403
Sloan Company, Inc., The	LLC units	N/A	N/A	N/A	—	122		—		9
Sloan Company, Inc., The	LLC units	N/A	N/A	N/A	1	14		—		—
Sparta Holding Corporation ⁽¹²⁾	Common stock	N/A	N/A	N/A	1	567		0.1		721
Sparta Holding Corporation	Common stock	N/A	N/A	N/A	235	6		0.1		509
Syncsort Incorporated	Preferred stock	N/A	N/A	N/A	90	226		0.1		575
						2,272		0.4		4,122
Grocery
MyWebGrocer, Inc.	LLC units	N/A	N/A	N/A	1,418	1,446		0.2		1,970
MyWebGrocer, Inc.	Preferred stock	N/A	N/A	N/A	71	165		0.1		263
						1,611		0.3		2,233
Healthcare, Education and Childcare
Active Day, Inc.	LLC interest	N/A	N/A	N/A	1	614		0.1		680
Acuity Eyecare Holdings, LLC	LLC interest	N/A	N/A	N/A	198	198		—		198
ADCS Clinics Intermediate Holdings, LLC	Preferred stock	N/A	N/A	N/A	1	579		0.1		551

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾	Amortized Cost		Percentage of Net Assets		Fair Value
Healthcare, Education and Childcare - (continued)
ADCS Clinics Intermediate Holdings, LLC	Common stock	N/A	N/A	N/A	—	$	6	—	%	$	—
Advanced Pain Management Holdings, Inc.	Preferred stock	N/A	N/A	N/A	8	829		—		—
Advanced Pain Management Holdings, Inc.	Common stock	N/A	N/A	N/A	67	67		—		—
Advanced Pain Management Holdings, Inc.	Preferred stock	N/A	N/A	N/A	1	64		—		—
BIORECLAMATIONIVT, LLC	LLC interest	N/A	N/A	N/A	—	365		0.1		527
California Cryobank, LLC	LLC units	N/A	N/A	N/A	—	28		—		35
California Cryobank, LLC	LLC units	N/A	N/A	N/A	—	11		—		12
California Cryobank, LLC	LLC units	N/A	N/A	N/A	—	—		—		14
Certara L.P.	LP interest	N/A	N/A	N/A	—	635		0.2		1,601
DCA Investment Holding, LLC	LLC units	N/A	N/A	N/A	8,637	864		0.1		998
DCA Investment Holding, LLC	LLC units	N/A	N/A	N/A	87	9		—		78
Deca Dental Management LLC	LLC units	N/A	N/A	N/A	357	357		0.1		410
Dental Holdings Corporation	LLC units	N/A	N/A	N/A	30	805		0.1		790
Encore GC Acquisition, LLC	LLC units	N/A	N/A	N/A	18	182		—		157
Encore GC Acquisition, LLC	LLC units	N/A	N/A	N/A	18	—		—		—
Eyecare Services Partners Holdings LLC	Preferred stock	N/A	N/A	N/A	—	133		—		133
Eyecare Services Partners Holdings LLC	LLC units	N/A	N/A	N/A	—	1		—		1
G & H Wire Company, Inc.	LP interest	N/A	N/A	N/A	102	102		—		127
Global Healthcare Exchange, LLC	Common stock	N/A	N/A	N/A	—	287		—		310
Global Healthcare Exchange, LLC	Common stock	N/A	N/A	N/A	—	5		0.2		1,669
IntegraMed America, Inc.	LLC interest	N/A	N/A	N/A	—	458		—		275
IntegraMed America, Inc.	LLC interest	N/A	N/A	N/A	—	417		—		296
Kareo, Inc.	Warrant	N/A	N/A	N/A	22	160		—		160
Katena Holdings, Inc.	LLC units	N/A	N/A	N/A	—	387		0.1		376
Lombart Brothers, Inc.	Common stock	N/A	N/A	N/A	—	132		—		175
MWD Management, LLC & MWD Services, Inc.	LLC interest	N/A	N/A	N/A	121	121		—		121
Oliver Street Dermatology Holdings, LLC	LLC units	N/A	N/A	N/A	234	234		0.1		294
Pentec Acquisition Sub, Inc.	Preferred stock	N/A	N/A	N/A	1	116		—		287
Pinnacle Treatment Centers, Inc.	Preferred stock	N/A	N/A	N/A	—	221		—		199
Pinnacle Treatment Centers, Inc.	Common stock	N/A	N/A	N/A	2	2		—		—
Radiology Partners, Inc.	LLC units	N/A	N/A	N/A	43	85		—		112
Reliant Pro ReHab, LLC	Preferred stock A	N/A	N/A	N/A	2	183		0.1		953
RXH Buyer Corporation	LP interest	N/A	N/A	N/A	7	683		—		204
Sage Dental Management, LLC	LLC units	N/A	N/A	N/A	—	249		0.1		362
Sage Dental Management, LLC	LLC units	N/A	N/A	N/A	3	3		—		229
SLMP, LLC	LLC interest	N/A	N/A	N/A	256	256		—		256
Spear Education, LLC	LLC units	N/A	N/A	N/A	—	62		—		69
Spear Education, LLC	LLC units	N/A	N/A	N/A	1	1		—		50
SSH Corporation	Common stock	N/A	N/A	N/A	—	40		—		72
Surgical Information Systems, LLC	Common stock	N/A	N/A	N/A	4	414		0.1		534
U.S. Renal Care, Inc.	LP interest	N/A	N/A	N/A	1	2,665		0.1		1,337
WHCG Management, LLC	LLC interest	N/A	N/A	N/A	—	220		—		220
Young Innovations, Inc.	LLC units	N/A	N/A	N/A	—	236		—		180
Young Innovations, Inc.	Common stock	N/A	N/A	N/A	2	—		—		325
						13,486		1.6		15,377
Insurance
Captive Resources Midco, LLC	LLC units	N/A	N/A	N/A	1	—		0.1		306
Internet Pipeline, Inc. ⁽¹²⁾	Preferred stock	N/A	N/A	N/A	—	72		—		83
Internet Pipeline, Inc.	Common stock	N/A	N/A	N/A	44	1		—		109
						73		0.1		498

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost		Percentage of Net Assets		Fair Value
Leisure, Amusement, Motion Pictures, Entertainment
LMP TR Holdings, LLC	LLC units	N/A	N/A	N/A	712		$	712	—	%	$	523
Titan Fitness, LLC	LLC units	N/A	N/A	N/A	7		712		0.1		746
							1,424		0.1		1,269
Mining, Steel, Iron and Non-Precious Metals
Benetech, Inc.^*	LLC interest	N/A	N/A	N/A	4		—		—		—
Benetech, Inc.^*	LLC interest	N/A	N/A	N/A	4		—		—		—
							—		—		—
Personal and Non Durable Consumer Products (Mfg. Only)
Georgica Pine Clothiers, LLC	LLC interest	N/A	N/A	N/A	11		106		—		107
Massage Envy, LLC	LLC interest	N/A	N/A	N/A	749		210		0.1		777
Team Technologies Acquisition Company	Common stock	N/A	N/A	N/A	—		114		—		279
							430		0.1		1,163
Personal, Food and Miscellaneous Services
Community Veterinary Partners, LLC	Common stock	N/A	N/A	N/A	1		114		—		138
DentMall MSO, LLC	LLC units	N/A	N/A	N/A	2		97		—		—
DentMall MSO, LLC	LLC units	N/A	N/A	N/A	2		—		—		—
R.G. Barry Corporation	Preferred stock A	N/A	N/A	N/A	—		161		—		106
Southern Veterinary Partners, LLC	LLC units	N/A	N/A	N/A	—		38		—		38
Southern Veterinary Partners, LLC	LLC units	N/A	N/A	N/A	40		2		—		2
Vetcor Professional Practices LLC	LLC units	N/A	N/A	N/A	766		459		0.1		500
Vetcor Professional Practices LLC	LLC units	N/A	N/A	N/A	85		85		0.1		925
Veterinary Specialists of North America, LLC	LLC units	N/A	N/A	N/A	—		106		—		150
Wetzel's Pretzels, LLC	Common stock	N/A	N/A	N/A	—		160		—		179
							1,222		0.2		2,038
Printing and Publishing
Brandmuscle, Inc.	LLC interest	N/A	N/A	N/A	—		240		—		236

Retail Stores
Barcelona Restaurants, LLC	LP interest	N/A	N/A	N/A	1,996		—		0.7		7,060
Batteries Plus Holding Corporation	LLC units	N/A	N/A	N/A	5		529		0.1		656
Cycle Gear, Inc.	LLC interest	N/A	N/A	N/A	19		248		—		389
Elite Sportswear, L.P.	LLC interest	N/A	N/A	N/A	—		158		—		124
Feeders Supply Company, LLC	Preferred stock	N/A	N/A	N/A	2		192		—		214
Feeders Supply Company, LLC	Common stock	N/A	N/A	N/A	—		—		—		96
Marshall Retail Group LLC, The	LLC units	N/A	N/A	N/A	15		154		—		90
Paper Source, Inc.	Common stock	N/A	N/A	N/A	8		1,387		0.1		912
Pet Holdings ULC⁽⁷⁾⁽⁹⁾	LP interest	N/A	N/A	N/A	455		386		0.1		401
RCP PetPeople LP	LP interest	N/A	N/A	N/A	889		889		0.2		2,026
Sneaker Villa, Inc.	LLC interest	N/A	N/A	N/A	4		411		0.1		573
							4,354		1.3		12,541
Utilities
PowerPlan Holdings, Inc.	Common stock	N/A	N/A	N/A	—		260		0.1		258
PowerPlan Holdings, Inc.	Common stock	N/A	N/A	N/A	151		3		—		234
							263		0.1		492

Total non-controlled/non-affiliate company equity investments							$	41,494	6.5	%	$	61,397

Total non-controlled/non-affiliate company investments					$	1,647,552	$	1,668,107	178.6	%	$	1,692,929

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

June 30, 2017

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal ($) / Shares⁽³⁾		Amortized Cost		Percentage of Net Assets		Fair Value
Controlled affiliate company investments⁽¹³⁾
Equity investments
Investment Funds and Vehicles
Senior Loan Fund LLC ^(7)(14)	LLC interest	N/A	N/A	N/A			$	113,120	11.5	%	$	108,879

Total controlled affiliate company equity investments							$	113,120	11.5	%	$	108,879

Total investments					$	1,647,552	$	1,781,227	190.1	%	$	1,801,808

Cash and cash equivalents and restricted cash and cash equivalents
Cash and restricted cash							$	34,230	3.6	%	$	34,230
BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)			0.61% ⁽¹⁵⁾				11,639		1.2		11,639
Total cash and cash equivalents and restricted cash and cash equivalents							$	45,869	4.8	%	$	45,869

Total investments and cash and cash equivalents and restricted cash and cash equivalents							$	1,827,096	194.9	%	$	1,847,677



^*		Denotes that all or a portion of the investment secures the notes offered in the 2010 Debt Securitization (as defined in Note 7).
^{^}		Denotes that all or a portion of the investment secures the notes offered in the 2014 Debt Securitization (as defined in Note 7).
^#		Denotes that all or a portion of the investment collateralizes the Credit Facility (as defined in Note 7).

⁽¹⁾

The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L") or Prime ("P") and which reset daily, monthly, quarterly or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect at June 30, 2017. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.


⁽²⁾	For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect at June 30, 2017.


⁽³⁾	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.


⁽⁴⁾	The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.


⁽⁵⁾	The entire commitment was unfunded as of June 30, 2017. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.


⁽⁶⁾	Loan was on non-accrual status as of June 30, 2017, meaning that the Company has ceased recognizing interest income on the loan.

⁽⁷⁾

The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of June 30, 2017, total non-qualifying assets at fair value represented 6.9% of the Company's assets calculated in accordance with the 1940 Act.


⁽⁸⁾	The sale of a portion of this loan does not qualify for sale accounting under Accounting Standards Codification Topic 860 - Transfers and Servicing, and therefore, the entire one stop loan asset remains in the Consolidated Schedule of Investments. (See Note 7 in the accompanying notes to the consolidated financial statements.)


⁽⁹⁾	The headquarters of this portfolio company is located in Canada.


⁽¹⁰⁾	Equity investments are non-income producing securities unless otherwise noted.


⁽¹¹⁾	Ownership of certain equity investments may occur through a holding company or partnership.


⁽¹²⁾	The Company holds an equity investment that entitles it to receive preferential dividends.

⁽¹³⁾

As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Note 5 in the accompanying notes to the consolidated financial statements for transactions during the nine months ended June 30, 2017 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.


⁽¹⁴⁾	The Company receives quarterly profit distributions from its equity investment in Senior Loan Fund LLC. (See Note 4 in the accompanying notes to the consolidated financial statements).


⁽¹⁵⁾	The rate shown is the annualized seven-day yield as of June 30, 2017.

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Investments
Non-controlled/non-affiliate company investments
Debt investments
Aerospace and Defense
ILC Dover, LP^{*^#}	One stop	L + 9.00%	8.00% cash/2.00% PIK	03/2020	$	17,730	$	17,592		1.7	%	$	15,070
ILC Dover, LP	One stop	L + 9.00%	8.00% cash/2.00% PIK	03/2019	784		776			0.1		667
NTS Technical Systems^{*^#}	One stop	L + 6.25%	7.25	06/2021	26,079		25,721			2.9		25,557
NTS Technical Systems⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	06/2021	—		(83		)	—		(71		)
NTS Technical Systems⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	06/2021	—		(39		)	—		(57		)
Tresys Technology Holdings, Inc.⁽⁶⁾	One stop	L + 6.75%	8.00%	12/2017	3,899		3,845			0.1		1,170
Tresys Technology Holdings, Inc.	One stop	L + 6.75%	8.00%	12/2017	537		535			0.1		537
Tronair Parent, Inc.⁽⁴⁾	Senior loan	L + 4.50%	N/A⁽⁵⁾	09/2021	—		(1		)	—		—
Whitcraft LLC^{*^}	One stop	L + 6.50%	7.50%	05/2020	13,504		13,404			1.5		13,504
Whitcraft LLC⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	05/2020	—		(1		)	—		—
					62,533		61,749			6.4		56,377
Automobile
American Driveline Systems, Inc.^*	Senior loan	L + 5.75%	6.75%	03/2020	1,798		1,758			0.2		1,798
American Driveline Systems, Inc.^{^}	Senior loan	L + 5.75%	6.75%	03/2020	233		229			—		233
American Driveline Systems, Inc.	Senior loan	P + 4.75%	8.25%	03/2020	46		40			—		46
CH Hold Corp. (Caliber Collision)^*#	Senior loan	L + 5.25%	6.25%	11/2019	5,144		5,108			0.6		5,144
Dent Wizard International Corporation^*	Senior loan	L + 4.75%	5.75%	04/2020	2,469		2,460			0.3		2,469
K&N Engineering, Inc.^{^}	Senior loan	P + 3.25%	6.75%	07/2019	2,821		2,797			0.3		2,821
K&N Engineering, Inc.^{^}	Senior loan	L + 4.25%	5.25%	07/2019	133		122			—		133
K&N Engineering, Inc.⁽⁴⁾	Senior loan	L + 4.25%	N/A⁽⁵⁾	07/2019	—		(2		)	—		—
OEConnection LLC^*	Senior loan	L + 5.00%	6.00%	06/2022	4,883		4,763			0.6		4,883
OEConnection LLC⁽⁴⁾	Senior loan	L + 5.00%	N/A⁽⁵⁾	06/2021	—		(1		)	—		—
Polk Acquisition Corp.^*	Senior loan	L + 5.00%	6.00%	06/2022	4,734		4,662			0.5		4,734
Polk Acquisition Corp.	Senior loan	L + 5.00%	6.00%	06/2022	54		53			—		54
Polk Acquisition Corp.	Senior loan	L + 5.00%	6.64%	06/2022	18		16			—		18
Polk Acquisition Corp.⁽⁴⁾	Senior loan	L + 5.00%	N/A⁽⁵⁾	06/2022	—		(2		)	—		—
T5 Merger Corporation^{^}	One stop	L + 6.25%	7.25%	03/2022	3,200		3,148			0.4		3,168
T5 Merger Corporation⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	03/2022	—		(2		)	—		(1		)
					25,533		25,149			2.9		25,500
Banking
HedgeServ Holding L.P.^{*^#}	One stop	L + 8.00%	7.00% cash/2.00% PIK	02/2019	17,529		17,451			2.0		17,529
HedgeServ Holding L.P.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	02/2019	—		(4		)	—		—
					17,529		17,447			2.0		17,529
Beverage, Food and Tobacco
Abita Brewing Co., L.L.C.	One stop	L + 5.75%	6.75%	04/2021	7,993		7,871			0.8		7,194
Abita Brewing Co., L.L.C.⁽⁴⁾	One stop	L + 5.75%	6.75%	04/2021	4		3			—		(11		)
ABP Corporation^*	Senior loan	L + 4.75%	6.00%	09/2018	4,696		4,667			0.5		4,461
ABP Corporation	Senior loan	P + 3.50%	7.25%	09/2018	250		247			—		225
Atkins Nutritionals, Inc^{*^}	One stop	L + 8.50%	9.75%	04/2019	21,636		21,464			2.5		21,636
Atkins Nutritionals, Inc^{*^#}	One stop	L + 5.00%	6.25%	01/2019	16,872		16,752			1.9		16,872
Benihana, Inc.^{*^}	One stop	L + 6.00%	7.25%	01/2019	15,279		15,064			1.7		14,973
Benihana, Inc.	One stop	P + 4.75%	7.92%	07/2018	1,628		1,599			0.2		1,585
C. J. Foods, Inc.^*	One stop	L + 5.00%	6.00%	05/2019	3,141		3,116			0.4		3,141
C. J. Foods, Inc.	One stop	L + 5.00%	6.00%	05/2019	663		656			0.1		663
C. J. Foods, Inc.⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	05/2019	—		(5		)	—		—
Firebirds International, LLC^*	One stop	L + 5.75%	7.00%	05/2018	1,074		1,067			0.1		1,074
Firebirds International, LLC^*	One stop	L + 5.75%	7.00%	05/2018	302		300			—		302
Firebirds International, LLC	One stop	L + 5.75%	7.00%	05/2018	55		53			—		55
Firebirds International, LLC⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	05/2018	—		(1		)	—		—

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Beverage, Food and Tobacco – (continued)
First Watch Restaurants, Inc.^{*^#}	One stop	L + 6.00%	7.15%	12/2020	$	25,596	$	25,384		2.9	%	$	25,596
First Watch Restaurants, Inc.	One stop	P + 5.00%	8.05%	12/2020	1,603		1,596			0.2		1,603
First Watch Restaurants, Inc.	One stop	L + 6.00%	7.00%	12/2020	1,258		1,248			0.1		1,258
First Watch Restaurants, Inc.	One stop	L + 6.00%	7.00%	12/2020	1,255		1,246			0.2		1,255
First Watch Restaurants, Inc.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	12/2020	—		(8		)	—		—
Hopdoddy Holdings, LLC	One stop	L + 8.00%	9.00%	08/2020	660		649			0.1		660
Hopdoddy Holdings, LLC	One stop	L + 8.00%	N/A⁽⁵⁾	08/2020	—		—			—		—
Hopdoddy Holdings, LLC⁽⁴⁾	One stop	L + 8.00%	N/A⁽⁵⁾	08/2020	—		(3		)	—		—
IT'SUGAR LLC	Subordinated debt	N/A	5.00%	10/2017	1,707		1,707			0.2		1,384
Purfoods, LLC	One stop	L + 6.25%	7.25%	05/2021	8,647		8,449			1.0		8,647
Purfoods, LLC	One stop	N/A	7.00% PIK	05/2026	101		101			—		101
Purfoods, LLC	One stop	L + 6.25%	7.25%	05/2021	25		24			—		25
Purfoods, LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	05/2021	—		(1		)	—		—
Restaurant Holding Company, LLC ^#	Senior loan	L + 7.75%	8.75%	02/2019	4,605		4,581			0.5		4,513
Rubio's Restaurants, Inc^{*^}	Senior loan	L + 4.75%	6.00%	11/2018	8,919		8,879			1.0		8,919
Smashburger Finance LLC	Senior loan	L + 5.50%	6.75%	05/2018	87		86			—		85
Smashburger Finance LLC⁽⁴⁾	Senior loan	L + 5.50%	N/A⁽⁵⁾	05/2018	—		(2		)	—		—
Surfside Coffee Company LLC^{^}	One stop	L + 5.25%	6.25%	06/2020	4,470		4,436			0.5		4,470
Surfside Coffee Company LLC	One stop	L + 5.25%	6.25%	06/2020	337		329			—		337
Surfside Coffee Company LLC	One stop	L + 5.25%	6.25%	06/2020	26		25			—		26
Tate's Bake Shop, Inc.^#	Senior loan	L + 5.00%	6.00%	08/2019	597		593			0.1		597
Uinta Brewing Company^{^}	One stop	L + 8.50%	9.50%	08/2019	3,734		3,713			0.4		3,622
Uinta Brewing Company	One stop	L + 8.50%	9.50%	08/2019	308		305			—		296
					137,528		136,190			15.4		135,564
Broadcasting and Entertainment
TouchTunes Interactive Networks, Inc.^{^}	Senior loan	L + 4.75%	5.75%	05/2021	1,477		1,471			0.2		1,483

Building and Real Estate
Brooks Equipment Company, LLC^{*^}	One stop	L + 5.00%	6.00%	08/2020	22,970		22,747			2.6		22,970
Brooks Equipment Company, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	08/2020	—		(13		)	—		—
ITEL Laboratories, Inc.^*	Senior loan	L + 4.50%	5.75%	06/2018	634		631			0.1		634
ITEL Laboratories, Inc.	Senior loan	L + 4.50%	N/A⁽⁵⁾	06/2018	—		—			—		—
					23,604		23,365			2.7		23,604
Containers, Packaging and Glass
Fort Dearborn Company^{*^}	Senior loan	L + 4.75%	5.75%	10/2018	2,980		2,969			0.3		2,980
Fort Dearborn Company^{*^}	Senior loan	L + 4.25%	5.25%	10/2017	509		508			0.1		509
					3,489		3,477			0.4		3,489
Diversified Conglomerate Manufacturing
Chase Industries, Inc.^{*^#}	One stop	L + 5.75%	6.81%	09/2020	21,704		21,556			2.5		21,704
Chase Industries, Inc.^#	One stop	L + 5.75%	7.13%	09/2020	4,816		4,784			0.5		4,816
Chase Industries, Inc.⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	09/2020	—		(14		)	—		—
Inventus Power, Inc^{*^}	One stop	L + 5.50%	6.50%	04/2020	8,409		8,369			0.9		7,736
Inventus Power, Inc⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	04/2020	—		(3		)	—		(42		)
Onicon Incorporated^{*^#}	One stop	L + 6.00%	7.00%	04/2020	13,422		13,286			1.5		13,221
Onicon Incorporated⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	04/2020	—		(6		)	—		(15		)
Pasternack Enterprises, Inc. and Fairview Microwave, Inc.^#	Senior loan	L + 5.00%	6.00%	05/2022	2,460		2,436			0.3		2,435
PetroChoice Holdings, Inc.^{^}	Senior loan	L + 5.00%	6.00%	08/2022	1,768		1,718			0.2		1,768
Plex Systems, Inc.^{*^}	One stop	L + 7.50%	8.75%	06/2020	18,797		18,410			2.1		18,797
Plex Systems, Inc.⁽⁴⁾	One stop	L + 7.50%	N/A⁽⁵⁾	06/2020	—		(30		)	—		—
Reladyne, Inc.^*#	Senior loan	L + 5.25%	6.25%	07/2022	10,149		9,992			1.2		10,047
Reladyne, Inc.	Senior loan	L + 5.25%	6.25%	07/2022	111		110			—		110

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Diversified Conglomerate Manufacturing – (continued)
Reladyne, Inc.	Senior loan	P + 4.25%	7.75%	07/2022	$	26	$	24		—	%	$	24
Reladyne, Inc.⁽⁴⁾	Senior loan	L + 5.25%	N/A⁽⁵⁾	07/2022	—		(2		)	—		(1		)
Sunless Merger Sub, Inc.	Senior loan	L + 5.00%	6.25%	07/2019	1,503		1,509			0.2		1,503
Sunless Merger Sub, Inc.	Senior loan	P + 3.75%	7.25%	07/2019	151		151			—		151
					83,316		82,290			9.4		82,254
Diversified Conglomerate Service
Accellos, Inc.^{*^#}	One stop	L + 5.75%	6.75%	07/2020	31,051		30,806			3.5		31,051
Accellos, Inc.⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	07/2020	—		(13		)	—		—
Actiance, Inc. ^{*^}	One stop	L + 9.00%	10.00%	04/2018	2,900		2,831			0.3		2,900
Actiance, Inc.	One stop	L + 9.00%	N/A⁽⁵⁾	04/2018	—		—			—		—
Agility Recovery Solutions Inc.^{*^}	One stop	L + 6.50%	7.50%	03/2020	14,092		13,950			1.6		14,092
Agility Recovery Solutions Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	03/2020	—		(6		)	—		—
Bomgar Corporation^{^}	One stop	L + 7.50%	8.50%	06/2022	4,888		4,794			0.6		4,888
Bomgar Corporation⁽⁴⁾	One stop	L + 7.50%	N/A⁽⁵⁾	06/2022	—		(2		)	—		—
CIBT Holdings, Inc.^{^}	Senior loan	L + 5.25%	6.25%	06/2022	1,973		1,954			0.2		1,973
CIBT Holdings, Inc.	Senior loan	L + 5.25%	N/A⁽⁵⁾	06/2022	—		—			—		—
Clearwater Analytics, LLC^#	One stop	L + 7.50%	8.50%	09/2022	10,050		9,877			1.1		9,925
Clearwater Analytics, LLC⁽⁴⁾	One stop	L + 7.50%	N/A⁽⁵⁾	09/2022	—		(2		)	—		(1		)
Daxko Acquisition Corporation^#	One stop	L + 6.50%	7.50%	09/2022	8,557		8,430			1.0		8,472
Daxko Acquisition Corporation⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	09/2022	—		(1		)	—		—
EGD Security Systems, LLC	One stop	L + 6.25%	7.25%	06/2022	11,114		10,876			1.3		11,114
EGD Security Systems, LLC	One stop	L + 6.25%	7.25%	06/2022	98		96			—		98
EGD Security Systems, LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	06/2022	—		(2		)	—		—
HealthcareSource HR, Inc.	One stop	L + 6.75%	7.75%	05/2020	17,724		17,416			2.0		17,724
HealthcareSource HR, Inc.⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	05/2020	—		(1		)	—		—
Host Analytics, Inc.	One stop	N/A	8.50% cash/2.25% PIK	02/2020	3,028		2,978			0.3		3,005
Host Analytics, Inc.	One stop	N/A	8.50% cash/2.25% PIK	08/2021	2,552		2,530			0.3		2,533
Host Analytics, Inc.⁽⁴⁾	One stop	N/A	N/A⁽⁵⁾	02/2020	—		(8		)	—		(6		)
III US Holdings, LLC^#	One stop	L + 6.00%	7.00%	09/2022	5,510		5,400			0.6		5,400
III US Holdings, LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	09/2022	—		(1		)	—		(1		)
Integration Appliance, Inc.^{*^}	One stop	L + 8.25%	9.50%	09/2020	16,123		15,986			1.8		16,123
Integration Appliance, Inc.	One stop	L + 8.25%	9.50%	09/2020	7,914		7,771			0.9		7,914
Integration Appliance, Inc.	One stop	L + 8.25%	9.50%	09/2020	5,396		5,307			0.6		5,396
Integration Appliance, Inc.^*	One stop	L + 8.25%	9.50%	09/2020	719		709			0.1		719
Integration Appliance, Inc.⁽⁴⁾	One stop	L + 8.25%	N/A⁽⁵⁾	09/2018	—		(8		)	—		—
Jensen Hughes, Inc.^#	Senior loan	L + 5.00%	6.00%	12/2021	156		155			—		156
Netsmart Technologies, Inc.^#	Senior loan	L + 4.75%	5.75%	04/2023	1,772		1,755			0.2		1,783
Netsmart Technologies, Inc.⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	01/1900	—		(9		)	—		—
Project Alpha Intermediate Holding, Inc.^*#	One stop	L + 8.25%	9.25%	08/2022	17,257		16,749			1.9		16,912
PT Intermediate Holdings III, LLC	One stop	L + 6.50%	7.50%	06/2022	22,250		21,719			2.5		22,250
PT Intermediate Holdings III, LLC	One stop	P + 5.50%	9.00%	06/2022	25		21			—		25
Secure-24, LLC^*	One stop	L + 6.00%	7.25%	08/2017	9,777		9,723			1.1		9,777
Secure-24, LLC^{^}	One stop	L + 6.00%	7.25%	08/2017	1,430		1,424			0.2		1,430
Secure-24, LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	08/2017	—		(1		)	—		—
Severin Acquisition, LLC^{^}	Senior loan	L + 5.38%	6.38%	07/2021	892		884			0.1		905
Severin Acquisition, LLC^{^}	Senior loan	L + 5.00%	6.00%	07/2021	794		788			0.1		794
Severin Acquisition, LLC^{^}	Senior loan	L + 5.38%	6.38%	07/2021	607		601			0.1		616
Severin Acquisition, LLC^{^}	Senior loan	L + 4.88%	5.88%	07/2021	196		194			—		195
Source Medical Solutions, Inc.	Second lien	L + 11.00%	9.00% cash/3.00% PIK	03/2018	9,475		9,340			1.1		9,475
Steelwedge Software, Inc.^{^}	One stop	L + 10.00%	9.00% cash/2.00% PIK	09/2020	2,197		2,109			0.2		2,197
Steelwedge Software, Inc.	One stop	L + 10.00%	N/A⁽⁵⁾	09/2020	—		—			—		—

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Diversified Conglomerate Service – (continued)
TA MHI Buyer, Inc. ^{^}	One stop	L + 6.50%	7.50%	09/2021	$	8,232	$	8,172		0.9	%	$	8,232
TA MHI Buyer, Inc.^*	One stop	L + 6.50%	7.50%	09/2021	1,281		1,269			0.2		1,281
TA MHI Buyer, Inc.^{^}	One stop	L + 6.50%	7.50%	09/2021	666		659			0.1		666
TA MHI Buyer, Inc.^{^}	One stop	L + 6.50%	7.50%	09/2021	237		235			—		237
TA MHI Buyer, Inc.	One stop	L + 6.50%	N/A⁽⁵⁾	09/2021	—		—			—		—
Trintech, Inc.^{*^#}	One stop	L + 6.00%	7.00%	10/2021	10,959		10,841			1.3		10,959
Trintech, Inc.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	10/2021	—		(1		)	—		—
Vendavo, Inc.	One stop	L + 8.50%	9.50%	10/2019	17,982		17,717			2.0		17,672
Vendavo, Inc.⁽⁴⁾	One stop	L + 8.50%	N/A⁽⁵⁾	10/2019	—		(9		)	—		(25		)
Vendor Credentialing Service LLC	One stop	L + 6.00%	7.00%	11/2021	10,194		9,970			1.2		10,194
Vendor Credentialing Service LLC⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	11/2021	—		(1		)	—		—
Vitalyst, LLC	Senior loan	L + 5.25%	6.50%	09/2017	1,385		1,381			0.2		1,385
Vitalyst, LLC⁽⁴⁾	Senior loan	L + 4.25%	N/A⁽⁵⁾	09/2017	—		—			—		(2		)
Workforce Software, LLC^{^}	One stop	L + 10.50%	4.50% cash/7.00% PIK	06/2021	5,039		5,004			0.6		5,001
Workforce Software, LLC	One stop	L + 3.50%	N/A⁽⁵⁾	06/2021	—		—			—		—
Xmatters, Inc. and Alarmpoint, Inc.	One stop	L + 8.50%	9.50%	08/2021	4,629		4,563			0.5		4,594
Xmatters, Inc. and Alarmpoint, Inc.	One stop	L + 8.50%	N/A⁽⁵⁾	08/2021	—		—			—		—
					271,121		266,919			30.7		270,028
Ecological
Pace Analytical Services, LLC	One stop	L + 6.25%	7.25%	09/2022	15,500		15,074			1.7		15,345
Pace Analytical Services, LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	09/2022	—		(2		)	—		(1		)
Pace Analytical Services, LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	09/2022	—		(6		)	—		(3		)
					15,500		15,066			1.7		15,341
Electronics
Appriss Holdings, Inc.^*#	Senior loan	L + 5.25%	6.25%	11/2020	15,451		15,268			1.7		15,451
Appriss Holdings, Inc.	Senior loan	L + 5.25%	6.25%	11/2020	800		770			0.1		800
Compusearch Software Holdings, Inc.^{^}	Senior loan	L + 4.25%	5.25%	05/2021	1,308		1,305			0.1		1,308
Diligent Corporation^*	One stop	L + 6.75%	7.75%	04/2022	4,888		4,786			0.6		4,888
Diligent Corporation⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	04/2022	—		(2		)	—		—
ECI Acquisition Holdings, Inc.^{*^#}	One stop	L + 6.25%	7.25%	03/2019	21,668		21,467			2.5		21,668
ECI Acquisition Holdings, Inc.^*	One stop	L + 6.25%	7.25%	03/2019	1,403		1,390			0.2		1,403
ECI Acquisition Holdings, Inc.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	03/2019	—		(9		)	—		—
Gamma Technologies, LLC^{^#}	One stop	L + 5.00%	6.00%	06/2021	18,001		17,859			2.0		18,001
Gamma Technologies, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	06/2021	—		(1		)	—		—
Park Place Technologies LLC^*#	One stop	L + 5.25%	6.25%	06/2022	12,466		12,301			1.4		12,466
Park Place Technologies LLC	One stop	L + 5.25%	6.25%	06/2022	100		98			—		100
Sloan Company, Inc., The^#	One stop	L + 7.25%	8.25%	04/2020	7,513		7,411			0.8		7,138
Sloan Company, Inc., The	One stop	L + 7.25%	8.25%	04/2020	6		5			—		4
Sovos Compliance^{*^}	One stop	L + 7.25%	8.25%	03/2022	9,423		9,247			1.1		9,234
Sovos Compliance⁽⁴⁾	One stop	L + 7.25%	N/A⁽⁵⁾	03/2022	—		(1		)	—		(1		)
Sparta Holding Corporation^{*^#}	One stop	L + 5.50%	6.50%	07/2020	22,309		22,131			2.5		22,309
Sparta Holding Corporation⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	07/2020	—		(24		)	—		—
Syncsort Incorporated^{*^#}	One stop	L + 5.50%	6.50%	11/2021	16,609		16,325			1.9		16,609
Syncsort Incorporated⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	11/2021	—		(2		)	—		—
Systems Maintenance Services Holding, Inc.^{^}	Senior loan	L + 4.00%	5.00%	10/2019	2,603		2,597			0.3		2,603
Watchfire Enterprises, Inc.	Second lien	L + 8.00%	9.00%	10/2021	9,434		9,274			1.1		9,434
					143,982		142,195			16.3		143,415
Grocery
MyWebGrocer, Inc.^*	One stop	L + 8.75%	10.00%	05/2017	14,271		14,190			1.6		14,271
Teasdale Quality Foods, Inc.^#	Senior loan	L + 4.75%	5.77%	10/2020	726		712			0.1		735
Teasdale Quality Foods, Inc.^#	Senior loan	L + 4.75%	5.77%	10/2020	543		538			0.1		551
					15,540		15,440			1.8		15,557

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Healthcare, Education and Childcare
Active Day, Inc.	One stop	L + 6.00%	7.00%	12/2021	$	13,538	$	13,216		1.5	%	$	13,538
Active Day, Inc.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	12/2021	—		(1		)	—		—
Active Day, Inc.⁽⁴⁾	One stop	L + 6.00%	N/A⁽⁵⁾	12/2021	—		(37		)	—		—
ADCS Clinics Intermediate Holdings, LLC	One stop	L + 5.75%	6.75%	05/2022	21,496		20,891			2.4		21,496
ADCS Clinics Intermediate Holdings, LLC	One stop	L + 5.75%	6.75%	05/2022	109		107			—		109
ADCS Clinics Intermediate Holdings, LLC	One stop	L + 5.75%	6.75%	05/2022	32		32			—		32
ADCS Clinics Intermediate Holdings, LLC	One stop	P + 4.75%	8.25%	05/2022	27		26			—		27
ADCS Clinics Intermediate Holdings, LLC⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	05/2022	—		(4		)	—		—
Agilitas USA, Inc.^{^}	Senior loan	L + 4.00%	5.00%	10/2020	2,125		2,110			0.2		2,040
Aris Teleradiology Company, LLC^*	Senior loan	L + 4.75%	5.75%	03/2021	941		933			0.1		941
Aris Teleradiology Company, LLC	Senior loan	L + 4.75%	N/A⁽⁵⁾	03/2021	—		—			—		—
Avalign Technologies, Inc.^	Senior loan	L + 4.50%	5.50%	07/2021	1,136		1,132			0.1		1,136
BIORECLAMATIONIVT, LLC ^{*^#}	One stop	L + 6.25%	7.25%	01/2021	14,392		14,177			1.6		14,392
BIORECLAMATIONIVT, LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	01/2021	—		(1		)	—		—
California Cryobank, LLC^{^}	One stop	L + 5.50%	6.50%	08/2019	1,550		1,542			0.2		1,550
California Cryobank, LLC	One stop	L + 5.50%	6.50%	08/2019	234		234			—		234
California Cryobank, LLC⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	08/2019	—		(1		)	—		—
Certara L.P.^{*^#}	One stop	L + 6.25%	7.25%	12/2018	29,063		28,870			3.3		29,063
Certara L.P.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	12/2018	—		(10		)	—		—
CLP Healthcare Services, Inc.^{^}	Senior loan	L + 5.25%	6.25%	12/2020	3,964		3,928			0.5		3,964
CPI Buyer, LLC (Cole-Parmer)^{*^}	Senior loan	L + 4.50%	5.50%	08/2021	7,740		7,522			0.9		7,702
Curo Health Services LLC^#	Senior loan	L + 5.50%	6.50%	02/2022	1,970		1,955			0.2		1,976
DCA Investment Holding, LLC^{*^#}	One stop	L + 5.25%	6.25%	07/2021	18,968		18,634			2.2		18,968
DCA Investment Holding, LLC^{*^#}	One stop	L + 5.25%	6.25%	07/2021	13,604		13,460			1.5		13,604
DCA Investment Holding, LLC	One stop	P + 4.25%	7.75%	07/2021	1,340		1,325			0.2		1,340
Deca Dental Management LLC^{*^}	One stop	L + 6.25%	7.25%	07/2020	4,146		4,100			0.5		4,146
Deca Dental Management LLC	One stop	L + 6.25%	7.25%	07/2020	504		496			0.1		504
Deca Dental Management LLC	One stop	L + 6.25%	7.25%	07/2020	50		49			—		50
Delta Educational Systems^*(6)	Senior loan	P + 4.75%	8.25%	12/2016	1,438		1,433			—		216
Delta Educational Systems⁽⁴⁾⁽⁶⁾	Senior loan	L + 6.00%	N/A⁽⁵⁾	12/2016	—		—			—		(60		)
Dental Holdings Corporation	One stop	L + 5.50%	6.50%	02/2020	7,599		7,480			0.9		7,599
Dental Holdings Corporation	One stop	L + 5.50%	6.50%	02/2020	1,155		1,143			0.1		1,155
Dental Holdings Corporation	One stop	P + 4.25%	7.75%	02/2020	213		204			—		213
eSolutions, Inc.	One stop	L + 6.50%	7.50%	03/2022	12,866		12,605			1.5		12,866
eSolutions, Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	03/2022	—		(1		)	—		—
G & H Wire Company, Inc.^{*^}	One stop	L + 5.75%	6.75%	12/2017	13,157		13,112			1.5		13,157
G & H Wire Company, Inc.	One stop	P + 4.50%	8.00%	12/2017	357		355			—		357
Joerns Healthcare, LLC^{*^}	One stop	L + 5.00%	6.00%	05/2020	3,838		3,802			0.4		3,647
Katena Holdings, Inc.^{^}	One stop	L + 6.25%	7.25%	06/2021	8,699		8,627			1.0		8,699
Katena Holdings, Inc.	One stop	P + 5.25%	8.75%	06/2021	850		843			0.1		850
Katena Holdings, Inc.	One stop	P + 5.25%	8.75%	06/2021	13		12			—		13
Lombart Brothers, Inc.	One stop	L + 6.75%	7.75%	04/2022	3,508		3,411			0.4		3,508
Lombart Brothers, Inc.	One stop	L + 6.75%	7.75%	04/2022	8		7			—		8
Maverick Healthcare Group, LLC^*	Senior loan	L + 7.50%	7.25% cash/2.00% PIK	04/2017	1,921		1,915			0.2		1,921
Northwestern Management Services, LLC (Sage Dental)	One stop	L + 5.25%	6.50%	10/2019	72		71			—		71
Northwestern Management Services, LLC (Sage Dental)	One stop	P + 4.00%	7.50%	10/2019	17		16			—		16
Northwestern Management Services, LLC (Sage Dental)⁽⁴⁾	One stop	L + 5.25%	N/A⁽⁵⁾	10/2019	—		(2		)	—		(3		)
Oliver Street Dermatology Holdings, LLC	One stop	L + 6.50%	7.50%	05/2022	8,605		8,369			1.0		8,605
Oliver Street Dermatology Holdings, LLC	One stop	L + 6.50%	7.50%	05/2022	58		57			—		58
Oliver Street Dermatology Holdings, LLC⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	05/2022	—		(3		)	—		—
Pinnacle Treatment Centers, Inc.	One stop	L + 6.25%	7.25%	08/2021	10,081		9,812			1.1		9,980

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Healthcare, Education and Childcare – (continued)
Pinnacle Treatment Centers, Inc.	One stop	P + 5.00%	8.50%	08/2021	$	5	$	3		—	%	$	4
Pinnacle Treatment Centers, Inc.⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	08/2021	—		(3		)	—		(1		)
PPT Management, LLC^#	One stop	L + 5.00%	6.00%	04/2020	4,179		4,143			0.5		4,179
PPT Management, LLC	One stop	L + 5.00%	6.00%	04/2020	137		136			—		137
PPT Management, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	04/2020	—		(1		)	—		—
Premise Health Holding Corp.^#	One stop	L + 4.50%	5.50%	06/2020	14,963		14,881			1.7		14,963
Premise Health Holding Corp.⁽⁴⁾	One stop	L + 4.50%	N/A⁽⁵⁾	06/2020	—		(16		)	—		—
Pyramid Healthcare, Inc.^#	One stop	L + 5.75%	6.75%	08/2019	1,484		1,471			0.2		1,484
Radiology Partners, Inc.^#	One stop	L + 5.50%	6.50%	09/2020	22,570		22,295			2.6		22,344
Radiology Partners, Inc.	One stop	L + 5.50%	6.50%	09/2020	708		708			0.1		701
Radiology Partners, Inc.⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	09/2020	—		(4		)	—		(4		)
Radiology Partners, Inc.⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	09/2020	—		(18		)	—		(8		)
Reliant Pro ReHab, LLC^*	Senior loan	L + 5.00%	6.00%	12/2017	2,548		2,533			0.3		2,548
Reliant Pro ReHab, LLC	Senior loan	P + 4.00%	7.50%	12/2017	59		54			—		59
RXH Buyer Corporation^{*^}	One stop	L + 5.75%	6.75%	09/2021	17,435		17,148			1.9		16,738
RXH Buyer Corporation	One stop	L + 5.75%	6.75%	09/2021	1,973		1,940			0.2		1,894
RXH Buyer Corporation	One stop	P + 4.75%	8.25%	09/2021	35		32			—		27
RXH Buyer Corporation⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	09/2021	—		(14		)	—		(34		)
Southern Anesthesia and Surgical	One stop	L + 5.50%	6.50%	11/2017	5,537		5,502			0.6		5,537
Southern Anesthesia and Surgical^{^}	One stop	L + 5.50%	6.50%	11/2017	2,715		2,701			0.3		2,715
Southern Anesthesia and Surgical⁽⁴⁾	One stop	L + 5.50%	N/A⁽⁵⁾	11/2017	—		(3		)	—		—
Spear Education, LLC^#	One stop	L + 6.00%	7.00%	08/2019	4,732		4,697			0.5		4,732
Spear Education, LLC	One stop	L + 6.00%	7.00%	08/2019	76		76			—		76
Spear Education, LLC	One stop	L + 6.00%	N/A⁽⁵⁾	08/2019	—		—			—		—
Summit Behavioral Holdings I, LLC^*	One stop	L + 5.00%	6.00%	06/2021	4,382		4,330			0.5		4,382
Summit Behavioral Holdings I, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	06/2021	—		(1		)	—		—
Summit Behavioral Holdings I, LLC⁽⁴⁾	One stop	L + 5.00%	N/A⁽⁵⁾	06/2021	—		(2		)	—		—
Surgical Information Systems, LLC^{^}	Senior loan	L + 3.00%	4.50%	09/2018	1,701		1,699			0.2		1,701
U.S. Anesthesia Partners, Inc.^#	One stop	L + 5.00%	6.12%	12/2019	5,882		5,864			0.7		5,882
WIRB-Copernicus Group, Inc.^{*^}	Senior loan	L + 5.00%	6.00%	08/2022	9,912		9,815			1.1		9,812
WIRB-Copernicus Group, Inc.⁽⁴⁾	Senior loan	L + 5.00%	N/A⁽⁵⁾	08/2022	—		(1		)	—		(1		)
Young Innovations, Inc.^*#	Senior loan	L + 4.25%	5.25%	01/2019	1,733		1,725			0.2		1,739
Young Innovations, Inc.^*	Senior loan	L + 4.75%	5.75%	01/2019	304		299			0.1		308
Young Innovations, Inc.	Senior loan	P + 3.25%	6.75%	01/2018	34		34			—		33
					314,488		309,976			35.4		311,635
Home and Office Furnishings, Housewares, and Durable Consumer
Plano Molding Company, LLC^{*^#}	One stop	L + 6.50%	7.50%	05/2021	17,934		17,796			1.9		16,498

Hotels, Motels, Inns, and Gaming
Aimbridge Hospitality, LLC^{^}	Senior loan	L + 4.50%	5.75%	10/2018	815		804			0.1		815

Insurance
Captive Resources Midco, LLC^{*^#}	One stop	L + 5.75%	6.75%	06/2020	26,127		25,876			3.0		26,127
Captive Resources Midco, LLC⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	06/2020	—		(16		)	—		—
Captive Resources Midco, LLC⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	06/2020	—		(17		)	—		—
Higginbotham Insurance Agency, Inc.^*	Senior loan	L + 5.25%	6.25%	11/2021	1,301		1,290			0.1		1,303
Internet Pipeline, Inc.	One stop	L + 7.25%	8.25%	08/2022	4,910		4,797			0.6		4,910
Internet Pipeline, Inc.⁽⁴⁾	One stop	L + 7.25%	N/A⁽⁵⁾	08/2021	—		(1		)	—		—
RSC Acquisition, Inc.^#	Senior loan	L + 5.25%	6.25%	11/2022	629		624			0.1		629
					32,967		32,553			3.8		32,969

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Leisure, Amusement, Motion Pictures and Entertainment
NFD Operating, LLC^*	One stop	L + 7.00%	8.25%	06/2021	$	2,349	$	2,315		0.3	%	$	2,349
NFD Operating, LLC	One stop	L + 7.00%	N/A⁽⁵⁾	06/2021	—		—			—		—
NFD Operating, LLC⁽⁴⁾	One stop	L + 7.00%	N/A⁽⁵⁾	06/2021	—		(1		)	—		—
Self Esteem Brands, LLC^{^}	Senior loan	L + 4.00%	5.00%	02/2020	2,934		2,924			0.3		2,934
Self Esteem Brands, LLC⁽⁴⁾	Senior loan	L + 4.00%	N/A⁽⁵⁾	02/2020	—		(3		)	—		—
Teaching Company, The	One stop	L + 6.25%	7.25%	08/2020	18,926		18,705			2.2		18,926
Teaching Company, The	One stop	L + 6.25%	7.25%	08/2020	40		39			—		40
Titan Fitness, LLC^*	One stop	L + 6.50%	7.75%	09/2019	13,223		13,070			1.5		13,223
Titan Fitness, LLC	One stop	L + 6.50%	7.75%	09/2019	1,747		1,733			0.2		1,747
Titan Fitness, LLC	One stop	L + 6.50%	7.75%	09/2019	582		546			0.1		582
Titan Fitness, LLC	One stop	P + 5.25%	8.75%	09/2019	419		406			—		419
					40,220		39,734			4.6		40,220
Mining, Steel, Iron and Non-Precious Metals
Benetech, Inc.^*	One stop	L + 9.00%	10.25%	10/2017	4,425		4,413			0.4		3,894
Benetech, Inc.	One stop	P + 7.75%	11.25%	10/2017	152		149			—		20
					4,577		4,562			0.4		3,914
Oil and Gas
Drilling Info, Inc.^{^#(9)}	One stop	L + 5.50%	6.50%	06/2020	1,806		1,782			0.2		1,792
Drilling Info, Inc.⁽⁹⁾	One stop	L + 5.50%	6.50%	06/2020	516		506			0.1		513
Drilling Info, Inc.⁽⁴⁾⁽⁹⁾	One stop	L + 5.50%	N/A⁽⁵⁾	06/2020	—		(1		)	—		—
					2,322		2,287			0.3		2,305
Personal and Non-Durable Consumer Products
Georgica Pine Clothiers, LLC	One Stop	L + 5.50%	6.50%	11/2021	5,736		5,638			0.7		5,736
Georgica Pine Clothiers, LLC^{^}	One Stop	L + 5.50%	6.50%	11/2021	500		495			0.1		500
Georgica Pine Clothiers, LLC⁽⁴⁾	One Stop	L + 5.50%	N/A⁽⁵⁾	11/2021	—		(1		)	—		—
Massage Envy, LLC^*	One Stop	L + 7.25%	8.50%	09/2018	15,151		15,025			1.7		15,151
Massage Envy, LLC⁽⁴⁾	One Stop	L + 7.25%	N/A⁽⁵⁾	09/2018	—		(6		)	—		—
Orthotics Holdings, Inc^*#	One Stop	L + 5.00%	6.00%	02/2020	8,375		8,303			0.9		7,956
Orthotics Holdings, Inc^*#(7)	One Stop	L + 5.00%	6.00%	02/2020	1,373		1,361			0.1		1,304
Orthotics Holdings, Inc	One Stop	L + 5.00%	6.00%	02/2020	139		129			—		77
Orthotics Holdings, Inc⁽⁴⁾	One Stop	L + 5.00%	N/A⁽⁵⁾	02/2020	—		(12		)	—		(70		)
Orthotics Holdings, Inc⁽⁴⁾⁽⁷⁾	One Stop	L + 5.00%	N/A⁽⁵⁾	02/2020	—		(1		)	—		(7		)
Team Technologies Acquisition Company^{^}	Senior loan	L + 5.00%	6.25%	12/2017	4,660		4,644			0.5		4,613
Team Technologies Acquisition Company^#	Senior loan	L + 5.50%	6.75%	12/2017	859		854			0.1		857
Team Technologies Acquisition Company⁽⁴⁾	Senior loan	L + 5.00%	N/A⁽⁵⁾	12/2017	—		(1		)	—		(3		)
					36,793		36,428			4.1		36,114
Personal and Non-Durable Consumer Products
Community Veterinary Partners, LLC	One stop	L + 5.50%	6.50%	10/2021	16		16			—		16
Focus Brands Inc.^{*^}	Second lien	L + 9.00%	10.25%	08/2018	9,000		8,965			1.0		9,000
Ignite Restaurant Group, Inc. (Joe's Crab Shack)^	One stop	L + 7.00%	8.00%	02/2019	4,322		4,286			0.5		4,236
PetVet Care Centers LLC^{^}	Senior loan	L + 4.75%	5.75%	12/2020	5,837		5,753			0.7		5,837
PetVet Care Centers LLC^{^}	Senior loan	L + 4.75%	5.75%	12/2020	1,219		1,203			0.1		1,219
PetVet Care Centers LLC⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	12/2019	—		(9		)	—		—
Vetcor Professional Practices LLC^{*^#}	One stop	L + 6.25%	7.25%	04/2021	29,043		28,526			3.3		29,043
Vetcor Professional Practices LLC^*	One stop	L + 6.25%	7.25%	04/2021	966		956			0.1		966
Vetcor Professional Practices LLC	One stop	L + 6.25%	7.25%	04/2021	550		501			0.1		550
Vetcor Professional Practices LLC^#	One stop	L + 6.25%	7.25%	04/2021	288		285			—		288
Vetcor Professional Practices LLC	One stop	L + 6.25%	7.25%	04/2021	236		234			—		236
Vetcor Professional Practices LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	04/2021	—		(16		)	—		—
Vetcor Professional Practices LLC⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	04/2021	—		(4		)	—		—
Veterinary Specialists of North America, LLC^{*^}	One stop	L + 5.25%	6.25%	07/2021	6,101		6,029			0.7		6,041

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Personal and Non-Durable Consumer Products – (continued)
Veterinary Specialists of North America, LLC	One stop	L + 5.25%	6.25%	07/2021	$	64	$	63		—	%	$	63
Veterinary Specialists of North America, LLC⁽⁴⁾	One stop	L + 5.25%	N/A⁽⁵⁾	07/2021	—		(3		)	—		(3		)
Veterinary Specialists of North America, LLC⁽⁴⁾	One stop	L + 5.25%	N/A⁽⁵⁾	07/2021	—		(18		)	—		(13		)
Wetzel's Pretzels, LLC	One stop	L + 6.75%	7.75%	09/2021	7,064		6,873			0.8		6,993
Wetzel's Pretzels, LLC⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	09/2021	—		(1		)	—		—
					64,706		63,639			7.3		64,472
Printing and Publishing
Brandmuscle, Inc.^#	Senior loan	L + 5.00%	6.00%	12/2021	631		624			0.1		636
Market Track, LLC^{*^#}	One stop	L + 7.00%	8.00%	10/2019	28,603		28,354			3.3		28,603
Market Track, LLC^*	One stop	L + 7.00%	8.00%	10/2019	2,175		2,156			0.2		2,175
Market Track, LLC^#	One stop	L + 7.00%	8.00%	10/2019	2,141		2,126			0.2		2,141
Market Track, LLC	One stop	L + 7.00%	8.00%	10/2019	1,353		1,334			0.2		1,353
Market Track, LLC	One stop	L + 7.00%	8.00%	10/2019	1,284		1,278			0.1		1,284
Marketo, Inc.	One stop	L + 9.50%	10.50%	08/2021	9,940		9,649			1.1		9,791
Marketo, Inc.⁽⁴⁾	One stop	L + 9.50%	N/A⁽⁵⁾	08/2021	—		(2		)	—		(1		)
					46,127		45,519			5.2		45,982
Retail Stores
Batteries Plus Holding Corporation	One stop	L + 6.75%	7.75%	07/2022	13,860		13,516			1.6		13,791
Batteries Plus Holding Corporation⁽⁴⁾	One stop	L + 6.75%	N/A⁽⁵⁾	07/2022	—		(2		)	—		(1		)
CVS Holdings I, LP^{*^#}	One stop	L + 6.25%	7.25%	08/2021	22,283		21,920			2.5		21,948
CVS Holdings I, LP^*	One stop	L + 6.25%	7.25%	08/2021	321		315			—		316
CVS Holdings I, LP⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	08/2020	—		(3		)	—		(3		)
CVS Holdings I, LP⁽⁴⁾	One stop	L + 6.25%	N/A⁽⁵⁾	08/2021	—		(8		)	—		(6		)
Cycle Gear, Inc.^{^}	One stop	L + 6.50%	7.50%	01/2020	10,533		10,379			1.2		10,533
Cycle Gear, Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	01/2020	—		(17		)	—		—
Cycle Gear, Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	01/2020	—		(9		)	—		—
DTLR, Inc.^{*^}	One stop	L + 6.50%	7.50%	10/2020	11,394		11,303			1.3		11,394
Elite Sportswear, L.P.	Senior loan	L + 5.00%	6.00%	03/2020	2,821		2,781			0.3		2,814
Elite Sportswear, L.P.	Senior loan	L + 5.25%	6.25%	03/2020	1,451		1,431			0.2		1,458
Elite Sportswear, L.P.	Senior loan	L + 5.25%	6.25%	03/2020	220		216			—		221
Elite Sportswear, L.P.	Senior loan	P + 3.75%	7.25%	03/2020	117		112			—		116
Express Oil Change, LLC	Senior loan	L + 5.00%	6.01%	12/2017	1,210		1,197			0.1		1,210
Express Oil Change, LLC^{^}	Senior loan	L + 5.00%	6.00%	12/2017	473		470			0.1		473
Feeders Supply Company, LLC	One stop	L + 5.75%	6.75%	04/2021	4,298		4,211			0.5		4,298
Feeders Supply Company, LLC	Subordinated debt	N/A	12.50% cash/7.00% PIK	04/2021	43		43			—		43
Feeders Supply Company, LLC⁽⁴⁾	One stop	L + 5.75%	N/A⁽⁵⁾	04/2021	—		(1		)	—		—
Marshall Retail Group, LLC, The^{^#}	One stop	L + 6.00%	7.00%	08/2020	12,207		12,107			1.3		11,474
Marshall Retail Group, LLC, The	One stop	L + 6.00%	7.00%	08/2019	410		392			—		278
Mills Fleet Farm Group LLC^{*^}	One stop	L + 5.50%	6.50%	02/2022	4,776		4,641			0.5		4,776
Paper Source, Inc.^{*^#}	One stop	L + 6.25%	7.25%	09/2018	12,757		12,679			1.5		12,757
Paper Source, Inc.	One stop	L + 6.25%	7.25%	09/2018	1,694		1,680			0.2		1,694
Paper Source, Inc.	One stop	P + 5.00%	8.50%	09/2018	339		331			—		339
Pet Holdings ULC^{*^(7)(8)}	One stop	L + 5.50%	6.50%	07/2022	14,775		14,491			1.7		14,627
Pet Holdings ULC⁽⁷⁾⁽⁸⁾	One stop	P + 4.50%	8.00%	07/2022	37		35			—		36
Pet Holdings ULC^(4)(7)(8)	One stop	L + 5.50%	N/A⁽⁵⁾	07/2022	—		(1		)	—		(1		)
Sneaker Villa, Inc.^{*^}	One stop	L + 7.75%	8.75%	12/2020	12,467		12,361			1.4		12,467
					128,486		126,570			14.4		127,052
Telecommunications
Arise Virtual Solutions, Inc.^{^}	One stop	L + 6.50%	7.75%	12/2018	1,382		1,373			0.2		1,313
Arise Virtual Solutions, Inc.⁽⁴⁾	One stop	L + 6.50%	N/A⁽⁵⁾	12/2018	—		(1		)	—		(4		)
Hosting.com Inc.^*	Senior loan	L + 4.50%	5.75%	12/2017	720		717			0.1		720

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost			Percentage of Net Assets		Fair Value
Telecommunications – (continued)
Hosting.com Inc.	Senior loan	L + 4.50%	5.75%	12/2017	$	82	$	81		—	%	$	82
					2,184		2,170			0.3		2,111
Textile and Leather
SHO Holding I Corporation^*	Senior loan	L + 5.00%	6.00%	10/2022	2,062		2,016			0.2		2,062
SHO Holding I Corporation⁽⁴⁾	Senior loan	L + 4.00%	N/A⁽⁵⁾	10/2021	—		(1		)	—		(1		)
					2,062		2,015			0.2		2,061
Utilities
Arcos, LLC	One stop	L + 6.50%	7.50%	02/2021	4,014		3,944			0.5		4,014
Arcos, LLC	One stop	L + 6.50%	N/A⁽⁵⁾	02/2021	—		—			—		—
PowerPlan Holdings, Inc.^*#	Senior loan	L + 4.75%	5.75%	02/2022	6,790		6,699			0.8		6,790
PowerPlan Holdings, Inc.⁽⁴⁾	Senior loan	L + 4.75%	N/A⁽⁵⁾	02/2021	—		(6		)	—		—
					10,804		10,637			1.3		10,804
Total non-controlled/non-affiliate company debt investments					$	1,505,637	$	1,485,448		169.2	%	$	1,487,093

Equity Investments^(10)(11)
Aerospace and Defense
NTS Technical Systems	Common stock	N/A	N/A	N/A	2		$	1,506		0.2	%	$	1,317
Tresys Technology Holdings, Inc.	Common stock	N/A	N/A	N/A	295		295			—		—
Whitcraft LLC	Warrant	N/A	N/A	N/A	—		—			—		232
Whitcraft LLC	Preferred stock B	N/A	N/A	N/A	1		670			0.1		1,194
							2,471			0.3		2,743
Automobile
K&N Engineering, Inc.	Preferred stock A	N/A	N/A	N/A	—		—			—		27
K&N Engineering, Inc.	Preferred stock B	N/A	N/A	N/A	—		—			—		27
K&N Engineering, Inc.	Common stock	N/A	N/A	N/A	—		—			—		213
Polk Acquisition Corp.	LP interest	N/A	N/A	N/A	1		144			0.1		144
							144			0.1		411
Beverage, Food and Tobacco
Atkins Nutritionals, Inc	LLC interest	N/A	N/A	N/A	57		746			0.3		2,630
Benihana, Inc.	LLC units	N/A	N/A	N/A	43		699			0.1		501
C. J. Foods, Inc.	Preferred stock	N/A	N/A	N/A	—		157			—		309
First Watch Restaurants, Inc.	Common stock	N/A	N/A	N/A	9		964			0.2		1,712
Hopdoddy Holdings, LLC	LLC interest	N/A	N/A	N/A	27		130			—		50
Hopdoddy Holdings, LLC	LLC interest	N/A	N/A	N/A	12		36			—		14
Julio & Sons Company	LLC interest	N/A	N/A	N/A	521		521			0.1		801
Purfoods, LLC	LLC interest	N/A	N/A	N/A	381		381			—		381
Richelieu Foods, Inc.	LP interest	N/A	N/A	N/A	220		220			0.1		588
Rubio's Restaurants, Inc.	Preferred stock A	N/A	N/A	N/A	2		945			0.3		2,625
Tate's Bake Shop, Inc.	LP interest	N/A	N/A	N/A	462		428			0.1		483
Uinta Brewing Company	LP interest	N/A	N/A	N/A	462		462			—		—
							5,689			1.2		10,094
Buildings and Real Estate
Brooks Equipment Company, LLC	Common stock	N/A	N/A	N/A	10		1,021			0.1		1,248
Chemicals, Plastics and Rubber
Flexan, LLC	Preferred stock	N/A	N/A	N/A	—		73			—		75
Flexan, LLC	Common stock	N/A	N/A	N/A	1		—			—		—
							73			—		75
Diversified Conglomerate Manufacturing
Chase Industries, Inc.	LLC units	N/A	N/A	N/A	1		1,186			0.2		1,666
Inventus Power, Inc	Preferred stock	N/A	N/A	N/A	—		370			—		137
Inventus Power, Inc	Common stock	N/A	N/A	N/A	—		—			—		—

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾	Amortized Cost		Percentage of Net Assets		Fair Value
Diversified Conglomerate Manufacturing – (continued)
Reladyne, Inc.	LP interest	N/A	N/A	N/A	—	$	249	—	%	$	249
Sunless Merger Sub, Inc.	LP interest	N/A	N/A	N/A	—	160		—		—
						1,965		0.2		2,052
Diversified Conglomerate Service
Actiance, Inc.	Warrant	N/A	N/A	N/A	344	95		—		99
Agility Recovery Solutions Inc.	Preferred stock	N/A	N/A	N/A	67	341		0.1		610
Bomgar Corporation	Common stock	N/A	N/A	N/A	100	108		—		108
Bomgar Corporation	Common stock	N/A	N/A	N/A	72	1		—		1
DISA Holdings Acquisition Subsidiary Corp.	Common stock	N/A	N/A	N/A	—	154		—		43
HealthcareSource HR, Inc.	LLC interest	N/A	N/A	N/A	—	348		—		323
Host Analytics, Inc.	Warrant	N/A	N/A	N/A	180	—		—		155
Marathon Data Operating Co., LLC	LLC units	N/A	N/A	N/A	1	264		0.1		385
Marathon Data Operating Co., LLC	LLC units	N/A	N/A	N/A	1	264		—		—
Project Alpha Intermediate Holding, Inc.	Common stock	N/A	N/A	N/A	1	417		—		417
Project Alpha Intermediate Holding, Inc.	Common stock	N/A	N/A	N/A	103	4		—		4
Secure-24, LLC	LLC units	N/A	N/A	N/A	263	263		0.1		445
Steelwedge Software, Inc.	Warrant	N/A	N/A	N/A	36,575	76		—		84
TA MHI Buyer, Inc.	Preferred stock	N/A	N/A	N/A	—	202		—		260
Vendavo, Inc.	Preferred stock A	N/A	N/A	N/A	827	827		0.1		852
Vitalyst, LLC	Preferred stock A	N/A	N/A	N/A	—	61		—		44
Vitalyst, LLC	Common stock	N/A	N/A	N/A	1	7		—		—
Workforce Software, LLC	LLC units	N/A	N/A	N/A	308	308		0.1		308
Xmatters, Inc. and Alarmpoint, Inc.	Warrant	N/A	N/A	N/A	40	32		—		32
						3,772		0.5		4,170
Ecological
Pace Analytical Services, LLC	LLC units	N/A	N/A	N/A	2	277		—		277
						277		—		277
Electronics
Diligent Corporation	Preferred stock	N/A	N/A	N/A	83	83		—		83
ECI Acquisition Holdings, Inc.	Common stock	N/A	N/A	N/A	9	873		0.1		1,130
Gamma Technologies, LLC	LLC units	N/A	N/A	N/A	1	134		—		188
SEI, Inc.	LLC units	N/A	N/A	N/A	340	340		—		317
Sloan Company, Inc., The	LLC units	N/A	N/A	N/A	—	122		—		23
Sloan Company, Inc., The	LLC units	N/A	N/A	N/A	1	14		—		—
Sparta Holding Corporation	Common stock	N/A	N/A	N/A	1	567		0.1		688
Sparta Holding Corporation	Common stock	N/A	N/A	N/A	235	6		—		162
Syncsort Incorporated	Preferred stock	N/A	N/A	N/A	90	226		0.1		313
						2,365		0.3		2,904
Grocery
MyWebGrocer, Inc.	LLC units	N/A	N/A	N/A	1,418	1,446		0.2		2,038
MyWebGrocer, Inc.	Preferred stock	N/A	N/A	N/A	71	165		—		267
						1,611		0.2		2,305
Healthcare, Education and Childcare
Active Day, Inc.	LLC interest	N/A	N/A	N/A	1	614		0.1		706
ADCS Clinics Intermediate Holdings, LLC	Preferred stock	N/A	N/A	N/A	1	579		0.1		579
ADCS Clinics Intermediate Holdings, LLC	Common stock	N/A	N/A	N/A	—	6		—		6
Advanced Pain Management Holdings, Inc.	Preferred stock	N/A	N/A	N/A	8	829		0.1		382
Advanced Pain Management Holdings, Inc.	Common stock	N/A	N/A	N/A	67	67		—		—
Advanced Pain Management Holdings, Inc.	Preferred stock	N/A	N/A	N/A	1	64		—		199
BIORECLAMATIONIVT, LLC	LLC interest	N/A	N/A	N/A	—	365		0.1		399
California Cryobank, LLC	LLC units	N/A	N/A	N/A	—	28		—		31
California Cryobank, LLC	LLC units	N/A	N/A	N/A	—	—		—		—

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾	Amortized Cost		Percentage of Net Assets		Fair Value
Healthcare, Education and Childcare – (continued)
Certara L.P.	LP interest	N/A	N/A	N/A	—	$	635	0.1	%	$	1,266
DCA Investment Holding, LLC	LLC units	N/A	N/A	N/A	6,386	864		0.1		940
DCA Investment Holding, LLC	LLC units	N/A	N/A	N/A	65	9		—		146
Deca Dental Management LLC	LLC units	N/A	N/A	N/A	357	357		—		392
Dental Holdings Corporation	LLC units	N/A	N/A	N/A	734	775		0.1		925
Encore GC Acquisition, LLC	LLC units	N/A	N/A	N/A	14	182		—		200
Encore GC Acquisition, LLC	LLC units	N/A	N/A	N/A	14	—		—		36
G & H Wire Company, Inc	LP interest	N/A	N/A	N/A	102	102		—		107
Global Healthcare Exchange, LLC	Common stock	N/A	N/A	N/A	—	287		—		289
Global Healthcare Exchange, LLC	Common stock	N/A	N/A	N/A	—	5		0.1		350
IntegraMed America, Inc.	LLC interest	N/A	N/A	N/A	—	458		—		51
IntegraMed America, Inc.	LLC interest	N/A	N/A	N/A	—	417		0.1		404
Katena Holdings, Inc.	LLC units	N/A	N/A	N/A	—	387		0.1		459
Lombart Brothers, Inc.	Common stock	N/A	N/A	N/A	—	106		—		106
Northwestern Management Services, LLC	LLC units	N/A	N/A	N/A	—	249		—		335
Northwestern Management Services, LLC	LLC units	N/A	N/A	N/A	3	3		—		215
Oliver Street Dermatology Holdings, LLC	LLC units	N/A	N/A	N/A	234	234		—		234
Pentec Acquisition Sub, Inc.	Preferred stock	N/A	N/A	N/A	1	116		—		238
Pinnacle Treatment Centers, Inc.	Preferred stock	N/A	N/A	N/A	2	221		—		221
Pinnacle Treatment Centers, Inc.	Common stock	N/A	N/A	N/A	—	2		—		2
Radiology Partners, Inc.	LLC units	N/A	N/A	N/A	43	85		—		149
Reliant Pro ReHab, LLC	Preferred stock A	N/A	N/A	N/A	2	183		0.1		998
RXH Buyer Corporation	LP interest	N/A	N/A	N/A	7	683		0.1		376
Southern Anesthesia and Surgical	LLC units	N/A	N/A	N/A	487	487		0.1		594
Spear Education, LLC	LLC units	N/A	N/A	N/A	—	62		—		65
Spear Education, LLC	LLC units	N/A	N/A	N/A	1	1		—		41
SSH Corporation	Common stock	N/A	N/A	N/A	—	40		—		92
Surgical Information Systems, LLC	Common stock	N/A	N/A	N/A	4	414		0.1		482
U.S. Renal Care, Inc.	LP interest	N/A	N/A	N/A	1	2,665		0.3		2,979
Young Innovations, Inc.	LLC units	N/A	N/A	N/A	—	236		0.1		315
Young Innovations, Inc.	Common stock	N/A	N/A	N/A	2	—		—		343
						12,817		1.8		15,652
Insurance
Captive Resources Midco, LLC	LLC units	N/A	N/A	N/A	1	—		0.1		186
Internet Pipeline, Inc.	Preferred stock	N/A	N/A	N/A	—	98		—		113
Internet Pipeline, Inc.	Common stock	N/A	N/A	N/A	43	1		—		35
						99		0.1		334
Leisure, Amusement, Motion Pictures
and Entertainment
LMP TR Holdings, LLC	LLC units	N/A	N/A	N/A	712	712		0.1		782
Titan Fitness, LLC	LLC units	N/A	N/A	N/A	6	712		0.1		777
						1,424		0.2		1,559
Personal and Non-Durable Consumer
Products
C.B. Fleet Company, Incorporated	LLC units	N/A	N/A	N/A	2	134		0.1		270
Georgica Pine Clothiers, LLC	LLC interest	N/A	N/A	N/A	11	106		—		116
Massage Envy, LLC	LLC interest	N/A	N/A	N/A	749	749		0.1		1,149
Team Technologies Acquisition Company	Common stock	N/A	N/A	N/A	—	114		—		246
						1,103		0.2		1,781
Personal, Food and Miscellaneous Services
Community Veterinary Partners, LLC	Common stock	N/A	N/A	N/A	1	114		—		144
R.G. Barry Corporation	Preferred stock	N/A	N/A	N/A	—	161		—		156

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost		Percentage of Net Assets		Fair Value
Personal, Food and Miscellaneous Services – (continued)
Vetcor Professional Practices LLC	LLC units	N/A	N/A	N/A	766		$	525	0.1	%	$	536
Vetcor Professional Practices LLC	LLC units	N/A	N/A	N/A	85		85		0.1		624
Veterinary Specialists of North America, LLC	LLC units	N/A	N/A	N/A	—		106		—		106
Wetzel's Pretzels, LLC	Common stock	N/A	N/A	N/A	—		160		—		160
							1,151		0.2		1,726
Printing and Publishing
Brandmuscle, Inc.	LLC interest	N/A	N/A	N/A	—		240		—		273
Market Track, LLC	Preferred stock	N/A	N/A	N/A	—		145		—		215
Market Track, LLC	Common stock	N/A	N/A	N/A	1		145		0.1		344
							530		0.1		832
Retail Stores
Barcelona Restaurants, LLC	LP interest	N/A	N/A	N/A	1,996		—		0.6		5,507
Batteries Plus Holding Corporation	LLC units	N/A	N/A	N/A	5		529		0.1		529
Cycle Gear, Inc.	LLC interest	N/A	N/A	N/A	19		248		—		397
DentMall MSO, LLC	LLC units	N/A	N/A	N/A	2		97		—		—
DentMall MSO, LLC	LLC units	N/A	N/A	N/A	2		—		—		—
Elite Sportswear, L.P.	LLC interest	N/A	N/A	N/A	—		83		—		111
Express Oil Change, LLC	LLC interest	N/A	N/A	N/A	81		81		—		272
Feeders Supply Company, LLC	Preferred stock	N/A	N/A	N/A	2		155		—		155
Feeders Supply Company, LLC	Common stock	N/A	N/A	N/A	—		—		—		—
Marshall Retail Group LLC, The	LLC units	N/A	N/A	N/A	15		154		—		46
Paper Source, Inc.	Common stock	N/A	N/A	N/A	8		1,387		0.2		1,423
Pet Holdings ULC⁽⁷⁾⁽⁸⁾	LP interest	N/A	N/A	N/A	455		387		—		351
RCP PetPeople LP	LP interest	N/A	N/A	N/A	889		889		0.2		1,556
Sneaker Villa, Inc.	LLC interest	N/A	N/A	N/A	4		411		0.1		541
							4,421		1.2		10,888
Utilities
PowerPlan Holdings, Inc.	Common stock	N/A	N/A	N/A	—		303		0.1		349
PowerPlan Holdings, Inc.	Common stock	N/A	N/A	N/A	151		3		—		273
							306		0.1		622

Total non-controlled/non-affiliate company equity investments							$	41,239	6.8	%	$	59,673

Total non-controlled/non-affiliate company investments					$	1,505,637	$	1,526,687	176.0	%	$	1,546,766

Non-controlled affiliate company investments⁽¹²⁾
Debt investments
Leisure, Amusement, Motion Pictures
and Entertainment
Competitor Group, Inc.^*#(7)	One stop	L + 9.25%	5.00% cash/5.50% PIK	11/2018	$	9,233	$	8,837	1.0	%	$	8,540
Competitor Group, Inc.⁽⁷⁾	One stop	L + 9.25%	5.00% cash/5.50% PIK	11/2018	1,095		1,063		0.1		1,013
Competitor Group, Inc.⁽⁷⁾	One stop	L + 9.25%	5.00% cash/5.50% PIK	11/2018	6		6		—		6
					10,334		9,906		1.1		9,559

Total non-controlled affiliate company debt investments					$	10,334	$	9,906	1.1	%	$	9,559

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)



	Investment Type	Spread Above Index⁽¹⁾	Interest Rate⁽²⁾	Maturity Date	Principal/Par Amount⁽³⁾		Amortized Cost		Percentage of Net Assets		Fair Value
Equity Investments ^(10)(11)
Leisure, Amusement, Motion Pictures
and Entertainment
Competitor Group, Inc.^*#(7)	Preferred stock	N/A	N/A	N/A	4		$	4,226	—	%	$	59
Competitor Group, Inc.⁽⁷⁾	LLC interest	N/A	N/A	N/A	1		714		—		—
Competitor Group, Inc.^*#(7)	Common stock	N/A	N/A	N/A	27		—		—		—
							$	4,940	—	%	$	59

Total non-controlled affiliate company equity investments							$	4,940	—	%	$	59

Total non-controlled affiliate company investments					$	10,334	$	14,846	1.1	%	$	9,618

Controlled affiliate company investments⁽¹³⁾
Debt investments
Investment Funds and Vehicles
Senior Loan Fund LLC⁽⁷⁾	Subordinated debt	L + 8.00%	8.47%	05/2020	$	77,301	$	77,301	8.8	%	$	77,301

Total controlled affiliate company debt investments					$	77,301	$	77,301	8.8	%	$	77,301

Equity Investments⁽¹⁰⁾
Investment Funds and Vehicles
Senior Loan Fund LLC⁽⁷⁾	LLC interest	N/A	N/A	N/A			$	31,339	3.1	%	$	26,927

Total controlled affiliate company equity investments							$	31,339	3.1	%	$	26,927

Total controlled affiliate company investments					$	77,301	$	108,640	11.9	%	$	104,228

Total investments					$	1,593,272	$	1,650,173	189.0	%	$	1,660,612

Cash, Restricted Cash and Cash Equivalents
Cash and Restricted Cash							$	45,259	5.1	%	$	45,259
BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)			0.21% ⁽¹⁴⁾				44,281		5.0		44,281
Total Cash, Restricted Cash and Cash Equivalents							$	89,540	10.1	%	$	89,540

Total Investments and Cash, Restricted Cash and Cash Equivalents							$	1,739,713	199.1	%	$	1,750,152



^*		Denotes that all or a portion of the loan secures the notes offered in the 2010 Debt Securitization (as defined in Note 7).
^{^}		Denotes that all or a portion of the loan secures the notes offered in the 2014 Debt Securitization (as defined in Note 7).
^#		Denotes that all or a portion of the loan collateralizes the Credit Facility (as defined in Note 7).

⁽¹⁾

The majority of the investments bear interest at a rate that may be determined by reference to LIBOR or Prime and which reset daily, quarterly or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the weighted average current interest rate in effect at September 30, 2016. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable.


⁽²⁾	For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect at September 30, 2016.


⁽³⁾	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.


⁽⁴⁾	The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.


⁽⁵⁾	The entire commitment was unfunded as of September 30, 2016. As such, no interest is being earned on this investment.


⁽⁶⁾	Loan was on non-accrual status as of September 30, 2016, meaning that the Company has ceased recognizing interest income on the loan.

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2016

(In thousands)

⁽⁷⁾

The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2016, total non-qualifying assets at fair value represented 7.4% of the Company's assets calculated in accordance with the 1940 Act.


⁽⁸⁾	The headquarters of this portfolio company is located in Canada.


⁽⁹⁾	The sale of a portion of this loan does not qualify for sale accounting under ASC Topic 860 - Transfers and Servicing, and therefore, the entire one stop loan asset remains in the Consolidated Schedule of Investments. (See Note 7 in the accompanying notes to the consolidated financial statements.)


⁽¹⁰⁾	Non-income producing securities.


⁽¹¹⁾	Ownership of certain equity investments may occur through a holding company or partnership.


⁽¹²⁾	As defined in the 1940 Act, the Company is deemed to be an "Affiliated Person" of the company as the Company along with affiliated entities owns five percent or more of the portfolio company's securities.

⁽¹³⁾

As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Note 5 in the accompanying notes to the consolidated financial statements for transactions during the year ended September 30, 2016 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.


⁽¹⁴⁾	The rate shown is the annualized seven-day yield as of September 30, 2016.

See Notes to Consolidated Financial Statements.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Note 1. Organization

Golub Capital BDC, Inc. (“GBDC” and, collectively with its subsidiaries, the “Company”) is an externally managed, closed-end, non-diversified management investment company. GBDC 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, GBDC has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company’s investment strategy is to invest primarily in senior secured and one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans) loans of U.S. middle-market companies. The Company may also selectively invest in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, U.S. middle-market companies. The Company has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with GC Advisors LLC (the “Investment Adviser”), under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. Under an administration agreement (the “Administration Agreement”) the Company is provided with certain services by an administrator (the “Administrator”), which is currently Golub Capital LLC.

Note 2. Significant Accounting Policies and Recent Accounting Updates

Basis of presentation: The Company is an investment company as defined in the accounting and reporting guidance under Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies (“ASC Topic 946”).

The accompanying interim consolidated financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation.

Fair value of financial instruments: The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Any changes to the valuation methodology are reviewed by management and the Company’s board of directors (the “Board”) to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See further description of fair value methodology in Note 6.

Use of estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation: As provided under Regulation S-X and ASC Topic 946, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries Golub Capital BDC 2010-1 Holdings LLC (“Holdings”), Golub Capital BDC 2010-1 LLC (“2010 Issuer”), Golub Capital BDC CLO 2014 LLC (“2014 Issuer”), Golub Capital BDC Funding LLC (“Funding”), Golub Capital BDC Holdings, LLC (“BDC Holdings”), GC SBIC IV, L.P. (“SBIC IV”), GC SBIC V, L.P. (“SBIC V”), GC SBIC VI, L.P. (“SBIC VI”) and, prior to its dissolution on January 27, 2016, Golub Capital BDC Revolver Funding LLC (“Revolver Funding”) in its consolidated financial statements. The Company does not consolidate its non-controlling interest in Senior Loan Fund LLC ("SLF"). See further description of the Company’s investment in SLF in Note 4.

Assets related to transactions that do not meet ASC Topic 860 - Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s consolidated statements of financial condition as investments. Those assets are owned by special purpose entities, including 2010 Issuer, 2014 Issuer and Funding, that are consolidated in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of GBDC (or any affiliate of GBDC).

Cash and cash equivalents: Cash and cash equivalents are highly liquid investments with an original maturity of three months or less at the date of acquisition. The Company deposits its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Restricted cash and cash equivalents: Restricted cash and cash equivalents include amounts that are collected and are held by trustees who have been appointed as custodians of the assets securing certain of the Company’s financing transactions. Restricted cash is held by the trustees for payment of interest expense and principal on the outstanding borrowings or reinvestment into new assets. In addition, restricted cash and cash equivalents include amounts held within the Company’s small business investment company (“SBIC”) subsidiaries. The amounts held within the SBICs are generally restricted to the originations of new loans by the SBICs and the payment of U.S. Small Business Administration (“SBA”) debentures and related interest expense.

Revenue recognition:

Investments and related investment income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments.

Loan origination fees, original issue discount and market discount or premium are capitalized, and the Company accretes or amortizes such amounts over the life of the loan as interest income. For the three and nine months ended June 30, 2017, interest income included $3,170 and $6,793, respectively, of accretion of discounts. For the three and nine months ended June 30, 2016, interest income included $2,210 and $5,896, respectively, of accretion of discounts. For the three and nine months ended June 30, 2017, the Company received loan origination fees of $3,947 and $6,976, respectively. For the three and nine months ended June 30, 2016, the Company received loan origination fees of $3,257 and $8,048, respectively.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

For investments with contractual payment-in-kind (“PIK”) interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, the Company will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. For the three and nine months ended June 30, 2017, the Company recorded PIK income of $632 and $2,028, respectively, and received PIK payments in cash of $233 and $419, respectively. For the three and nine months ended June 30, 2016, the Company recorded PIK income of $335 and $650, respectively, and received PIK payments in cash of $4 and $4, respectively.

In addition, the Company may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans. The Company records these fees as fee income when received. All other income is recorded into income when earned. For the three and nine months ended June 30, 2017, fee income included $926 and $1,191, respectively, of prepayment premiums. For the three and nine months ended June 30, 2016, fee income included $3 and $570, respectively, of prepayment premiums.

For the three and nine months ended June 30, 2017, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $30,805 and $89,962 respectively. For the three and nine months ended June 30, 2016, the Company received interest and fees in cash, which excludes capitalized loan origination fees, in the amounts of $28,694 and $83,438 respectively.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment. For the three and nine months ended June 30, 2017, the Company recorded dividend income of $1,169 and $4,492, respectively, and return of capital distributions of $7,368 and $10,449. For the three and nine months ended June 30, 2016, the Company recorded dividend income of $1,179 and $3,364, respectively, and return of capital distributions of $2,969 and $5,127.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Non-accrual loans: A loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. 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. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, payments are likely to remain current. The total fair value of non-accrual loans was $3,407 and $1,326 as of June 30, 2017 and September 30, 2016, respectively.

Partial loan sales: The Company follows the guidance in ASC Topic 860 when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain on the Company’s consolidated statements of financial condition and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

are carried at fair value to correspond with the related investments, which are carried at fair value. See Note 7 for additional information.

Income taxes: The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify and be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends for U.S. federal income tax purposes to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. The Company has made, and intends to continue to make, the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to all income distributed to its stockholders.

Depending on the level of taxable income earned in a tax year, the Company may choose to retain taxable income in excess of current year dividend distributions, and would distribute such taxable income in the next tax year. The Company may then be required to incur a 4% excise tax on such income. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and nine months ended June 30, 2017, $0 and $17, respectively, was incurred for U.S. federal excise tax. For the three and nine months ended June 30, 2016, $0 and $333, respectively, was incurred for U.S. federal excise tax.

The Company accounts for income taxes in conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns 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 would be recorded as a tax expense or tax benefit in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material unrecognized tax benefits or unrecognized tax liabilities related to uncertain income tax positions through June 30, 2017. The Company's tax returns for 2014 through 2016 tax years remain subject to examination by U.S. federal and most state tax authorities.

Dividends and distributions: Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend or distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Board authorizes and the Company declares a cash distribution, then stockholders who participate in the DRIP will have their cash distribution reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. The Company may use newly issued shares under the guidelines of the DRIP (if the Company’s shares are trading at a premium to net asset value), or the Company may purchase shares in the open market in connection with the obligations under the plan. In particular, if the Company’s shares are trading at a significant discount to net asset value (“NAV”) and the Company is otherwise permitted under applicable law to purchase such shares, the Company intends to purchase shares in the open market in connection with any obligations under the DRIP.

In the event the market price per share of the Company’s common stock on the date of a distribution exceeds the most recently computed NAV per share of the common stock, the Company will issue shares of common stock to participants in the DRIP at the greater of the most recently computed NAV per share of common stock or 95% of the current market price per share of common stock (or such lesser discount to the current market price per share that still exceeds the most recently computed NAV per share of common stock).

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Share repurchase plan: The Company has a share repurchase program (the “Program”) which allows the Company to repurchase up to $75,000 of the Company’s outstanding common stock on the open market at prices below the Company’s NAV as reported in its most recently published consolidated financial statements. The Board most recently reapproved the Program in August 2017 and the Program may be implemented at the discretion of management. The shares may be purchased from time to time at prevailing market prices, through open market transactions, including block transactions. The Company did not make any repurchases of its common stock during the three and nine months ended June 30, 2017 and 2016.

Deferred debt issuance costs: Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of June 30, 2017 and September 30, 2016, the Company had deferred debt issuance costs of $4,284 and $5,627, respectively. These amounts are amortized and included in interest expense in the consolidated statements of operations over the estimated average life of the borrowings. Amortization expense for the three and nine months ended June 30, 2017 was $843 and $2,488, respectively. Amortization expense for the three and nine months ended June 30, 2016 was $977 and $3,227, respectively.

Deferred offering costs: Deferred offering costs consist of fees paid in relation to legal, accounting, regulatory and printing work completed in preparation of equity offerings. Deferred offering costs are charged against the proceeds from equity offerings when received. As of June 30, 2017 and September 30, 2016, deferred offering costs, which are included in other assets on the consolidated statements of financial condition, were $111 and $145, respectively.

Accounting for derivative instruments: The Company does not utilize hedge accounting and marks its derivatives, if any, to market through a net change in unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations.

Recent accounting pronouncements: In November 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash a consensus of FASB Emerging Issues Task Force, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for annual reporting periods, and the interim periods within those periods, beginning after December 15, 2017 and early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

Note 3. Related Party Transactions

Investment Advisory Agreement: Under the Investment Advisory Agreement, the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, GBDC. The Board most recently reapproved the Investment Advisory Agreement in May 2017. The Investment Adviser is a registered investment adviser with the Securities and Exchange Commission (the “SEC”). The Investment Adviser receives fees for providing services, consisting of two components, a base management fee and an Incentive Fee (as defined below).

The base management fee is calculated at an annual rate equal to 1.375% of average adjusted gross assets at the end of the two most recently completed calendar quarters (including assets purchased with borrowed funds and securitization-related assets, leverage, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian but adjusted to exclude cash and cash equivalents so that investors do not pay the base management fee on such assets) and is payable quarterly in arrears. Additionally, the Investment Adviser is voluntarily excluding assets funded with secured borrowing proceeds from the base management fee. The base management fee is adjusted, based on the actual number of days elapsed relative to the total number of days in such calendar quarter, for any share issuances or repurchases during such calendar quarter. For purposes of the Investment Advisory Agreement, cash equivalents means U.S. government securities and commercial paper instruments maturing within 270 days of purchase (which is different than the GAAP definition, which defines cash equivalents as U.S. government securities and commercial paper

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

instruments maturing within 90 days of purchase). To the extent that the Investment Adviser or any of its affiliates provides investment advisory, collateral management or other similar services to a subsidiary of the Company, the base management fee will be reduced by an amount equal to the product of (1) the total fees paid to the Investment Adviser by such subsidiary for such services and (2) the percentage of such subsidiary’s total equity, including membership interests and any class of notes not exclusively held by one or more third parties, that is owned, directly or indirectly, by the Company.

The Company has structured the calculation of the Incentive Fee to include a fee limitation such that an Incentive Fee for any quarter can only be paid to the Investment Adviser if, after such payment, the cumulative Incentive Fees paid to the Investment Adviser since April 13, 2010, the effective date of the Company’s election to become a BDC, would be less than or equal to 20.0% of the Company’s Cumulative Pre-Incentive Fee Net Income (as defined below).

The Company accomplishes this limitation by subjecting each quarterly Incentive Fee payable under the Income and Capital Gain Incentive Fee Calculation (as defined below) to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is equal to the difference between (a) 20.0% of Cumulative Pre-Incentive Fee Net Income and (b) cumulative Incentive Fees of any kind paid to the Investment Adviser by GBDC since April 13, 2010. To the extent the Incentive Fee Cap is zero or a negative value in any quarter, no Incentive Fee would be payable in that quarter. If, for any relevant period, the Incentive Fee Cap calculation results in the Company paying less than the amount of the Incentive Fee calculated above, then the difference between the Incentive Fee and the Incentive Fee Cap will not be paid by GBDC and will not be received by the Investment Adviser as an Incentive Fee either at the end of such relevant period or at the end of any future period. “Cumulative Pre-Incentive Fee Net Income” is equal to the sum of (a) Pre-Incentive Fee Net Investment Income (as defined below) for each period since April 13, 2010 and (b) cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation since April 13, 2010.

“Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash.

Incentive Fees are calculated and payable quarterly in arrears (or, upon termination of the Investment Advisory Agreement, as of the termination date).

The income and capital gains incentive fee calculation (the “Income and Capital Gain Incentive Fee Calculation”) has two parts, the income component (the “Income Incentive Fee”) and the capital gains component (the “Capital Gain Incentive Fee” and, together with the Income Incentive Fee, the “Incentive Fee”). The Income Incentive Fee is calculated quarterly in arrears based on the Company’s Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter.

For the three and nine months ended June 30, 2017, the Income Incentive Fee incurred was $1,485 and $4,300, respectively. For the three and nine months ended June 30, 2016, the Income Incentive Fee incurred was $1,750 and $2,877, respectively.

Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the Income Incentive Fee, it is possible that an Incentive Fee may be calculated under this formula with respect to a period in which the Company has incurred a loss. For example,

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

if the Company receives Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the Income Incentive Fee will result in a positive value and an Incentive Fee will be paid unless the payment of such Incentive Fee would cause the Company to pay Incentive Fees on a cumulative basis that exceed the Incentive Fee Cap. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 2.0% quarterly. If market interest rates rise, the Company may be able to invest funds in debt instruments that provide for a higher return, which would increase Pre-Incentive Fee Net Investment Income and make it easier for the Investment Adviser to surpass the fixed hurdle rate and receive an Incentive Fee based on such net investment income.

The Company’s Pre-Incentive Fee Net Investment Income used to calculate this part of the Incentive Fee is also included in the amount of its total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds and securitization-related assets, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian) used to calculate the 1.375% base management fee annual rate.

The Company calculates the Income Incentive Fee with respect to its Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:


•	Zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;

•

100% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.5% in any calendar quarter. This portion of the Company’s Pre-Incentive Fee Net Investment Income (which exceeds the hurdle rate but is less than 2.5%) is referred to as the “catch-up” provision. The catch-up is meant to provide the Investment

Adviser with 20.0% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply if the Company’s Pre-Incentive Fee Net Investment Income exceeds 2.5% in any calendar quarter; and


•	20.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any calendar quarter.

The Capital Gain Incentive Fee equals (a) 20.0% of the Company’s Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), which commenced with the calendar year ending December 31, 2010, less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. The Company’s “Capital Gain Incentive Fee Base” equals (1) the sum of (i) realized capital gains, if any, on a cumulative positive basis from the date the Company elected to become a BDC through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred financing costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.


•	The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company’s portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.


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


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

The Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement (as described above) for each of the three and nine months ended June 30, 2017 and 2016 was $0. However, in accordance with GAAP, the

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Company is required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee on a quarterly basis as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. If the Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized appreciation, is positive at the end of a period, then GAAP requires the Company to accrue a capital gain incentive fee equal to 20% of such amount, less the aggregate amount of the actual Capital Gain Incentive Fees paid and capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP in a given period may result in additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. There can be no assurance that such unrealized capital appreciation will be realized in the future. From inception through June 30, 2017, the Company has not made any Capital Gain Incentive Fee payments. For the three and nine months ended June 30, 2017, the Company accrued a capital gain incentive fee under GAAP of $588 and $1,974, respectively, which accruals are included in incentive fee in the consolidated statements of operations. For the three and nine months ended June 30, 2016, the Company accrued a capital gain incentive fee under GAAP of $561 and$1,385, respectively.

As of June 30, 2017 and September 30, 2016, included in management and incentive fees payable on the consolidated statements of financial condition were $6,051 and $4,077, respectively, for accruals for capital gain incentive fees under GAAP.

The sum of the Income Incentive Fee and the Capital Gain Incentive Fee is the “Incentive Fee.”

Administration Agreement: Under the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment, provides the Company with clerical, bookkeeping and record keeping services at such facilities and provides the Company with other administrative services as the Administrator, subject to review by the Board, determines necessary to conduct the Company’s day-to-day operations. GBDC reimburses the Administrator the allocable portion of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, fees and expenses associated with performing compliance functions and GBDC’s allocable portion of the cost of its chief financial officer and chief compliance officer and their respective staffs. The Board reviews such expenses to determine that these expenses are reasonable and comparable to administrative services charged by unaffiliated third party asset managers. Under the Administration Agreement, the Administrator also provides, on the Company’s behalf, managerial assistance to those portfolio companies to which the Company is required to provide such assistance and will be paid an additional amount based on the cost of the services provided, which amount shall not exceed the amount the Company receives from such portfolio companies.

Included in accounts payable and accrued expenses is $595 and $566 as of June 30, 2017 and September 30, 2016, respectively, for accrued allocated shared services under the Administration Agreement.

Other related party transactions: The Administrator pays for certain unaffiliated third-party expenses incurred by the Company. Such expenses include postage, printing, office supplies, rating agency fees and professional fees. These expenses are not marked-up and represent the same amount the Company would have paid had the Company paid the expenses directly. These expenses are subsequently reimbursed in cash.

Total expenses reimbursed to the Administrator during the three and nine months ended June 30, 2017 were $430 and $1,749, respectively. Total expenses reimbursed to the Administrator during the three and nine months ended June 30, 2016 were $715 and $2,094, respectively.

As of June 30, 2017 and September 30, 2016, included in accounts payable and accrued expenses were $506 and $582, respectively, for accrued expenses paid on behalf of the Company by the Administrator.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

On June 22, 2016, the Company entered into an unsecured revolving credit facility with the Investment Adviser (the "Adviser Revolver"), with a maximum credit limit of $20,000 and expiration date of June 22, 2019. Refer to Note 7 for discussion of the Adviser Revolver.

During the three and nine months ended June 30, 2017, the Company sold $8,852 and $93,083, respectively, of investments and unfunded commitments to SLF at fair value and recognized $22 and $598, respectively, of net realized gains. During the three and nine months ended June 30, 2016, the Company sold $29,369 and $144,515, respectively, of investments and unfunded commitments to SLF at fair value and recognized $258 and $1,011, respectively, of net realized gains.

During the three and nine months ended June 30, 2017, SLF incurred an administrative service fee of $123 and $354, respectively, to reimburse the Administrator for expenses pursuant to an administrative and loan services agreement by and between SLF and the Administrator. During the three and nine months ended June 30, 2016, SLF incurred an administrative service fee of $127 and $327, respectively, to reimburse the Administrator for expenses pursuant to an administrative and loan services agreement by and between SLF and the Administrator.

Note 4. Investments

Investments as of June 30, 2017 and September 30, 2016 consisted of the following:



	As of June 30, 2017						As of September 30, 2016
	Principal		Amortized Cost		Fair Value		Principal		Amortized Cost		Fair Value
Senior secured	$	194,591	$	192,650	$	192,123	$	164,818	$	162,969	$	162,849
One stop	1,443,469		1,424,607		1,429,917		1,321,494		1,303,056		1,304,467
Second lien	9,434		9,298		9,434		27,909		27,579		27,909
Subordinated debt	58		58		58		1,750		1,750		1,427
Subordinated notes in SLF⁽¹⁾⁽²⁾	—		—		—		77,301		77,301		77,301
LLC equity interests in SLF⁽²⁾	N/A		113,120		108,879		N/A		31,339		26,927
Equity	N/A		41,494		61,397		N/A		46,179		59,732
Total	$	1,647,552	$	1,781,227	$	1,801,808	$	1,593,272	$	1,650,173	$	1,660,612


⁽¹⁾	On December 30, 2016, SLF issued a capital call in an aggregate amount of $89,930 the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by SLF and terminate all remaining subordinated note commitments.


⁽²⁾	SLF’s proceeds from the subordinated notes and LLC equity interests invested in SLF were utilized by SLF to invest in senior secured loans.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

The following tables show the portfolio composition by geographic region at amortized cost and fair value as a percentage of total investments in portfolio companies. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business.



	As of June 30, 2017				As of September 30, 2016
Amortized Cost:
United States
Mid-Atlantic	$	393,352	22.1	%	$	411,509	24.9	%
Midwest	417,867		23.5		353,117		21.4
West	306,608		17.2		289,208		17.5
Southeast	364,780		20.5		364,203		22.1
Southwest	168,543		9.5		117,168		7.1
Northeast	115,129		6.4		100,056		6.1
Canada	14,948		0.8		14,912		0.9
Total	$	1,781,227	100.0	%	$	1,650,173	100.0	%

Fair Value:
United States
Mid-Atlantic	$	389,722	21.6	%	$	403,536	24.3	%
Midwest	422,507		23.5		357,059		21.5
West	312,261		17.3		288,047		17.3
Southeast	368,733		20.5		368,450		22.2
Southwest	168,284		9.3		119,641		7.2
Northeast	125,088		6.9		108,866		6.6
Canada	15,213		0.9		15,013		0.9
Total	$	1,801,808	100.0	%	$	1,660,612	100.0	%

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

The industry compositions of the portfolio at amortized cost and fair value as of June 30, 2017 and September 30, 2016 were as follows:



	As of June 30, 2017				As of September 30, 2016
Amortized Cost:
Aerospace and Defense	$	59,317	3.3	%	$	64,220	3.9	%
Automobile	16,446		0.9		25,293		1.5
Banking	17,106		1.0		17,447		1.1
Beverage, Food and Tobacco	138,794		7.8		141,879		8.6
Broadcasting and Entertainment	1,461		0.1		1,471		0.1
Buildings and Real Estate	53,120		3.0		24,386		1.5
Chemicals, Plastics and Rubber	2,410		0.1		73		0.0	*
Containers, Packaging and Glass	—		—		3,477		0.2
Diversified/Conglomerate Manufacturing	93,873		5.3		84,255		5.1
Diversified/Conglomerate Service	280,847		15.8		270,691		16.4
Ecological	18,071		1.0		15,343		0.9
Electronics	128,789		7.2		144,560		8.8
Grocery	20,764		1.2		17,051		1.0
Healthcare, Education and Childcare	377,281		21.2		322,793		19.6
Home and Office Furnishings, Housewares and Durable Consumer	17,861		1.0		17,796		1.1
Hotels, Motels, Inns, and Gaming	9,904		0.6		804		0.0	*
Insurance	34,587		1.9		32,652		2.0
Investment Funds and Vehicles	113,120		6.3		108,640		6.6
Leisure, Amusement, Motion Pictures, Entertainment	76,675		4.3		56,004		3.4
Mining, Steel, Iron and Non-Precious Metals	4,844		0.3		4,562		0.3
Oil and Gas	2,156		0.1		2,287		0.1
Personal and Non Durable Consumer Products (Mfg. Only)	69,387		3.9		37,531		2.3
Personal, Food and Miscellaneous Services	73,280		4.1		64,790		3.9
Printing and Publishing	10,554		0.6		46,049		2.8
Retail Stores	134,002		7.5		130,991		7.9
Telecommunications	8,525		0.5		2,170		0.1
Textiles and Leather	2,213		0.1		2,015		0.1
Utilities	15,840		0.9		10,943		0.7
Total	$	1,781,227	100.0	%	$	1,650,173	100.0	%

*Represents an amount less than 0.1%

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



	As of June 30, 2017				As of September 30, 2016
Fair Value:
Aerospace and Defense	$	56,252	3.1	%	$	59,120	3.6	%
Automobile	16,584		0.9		25,911		1.6
Banking	17,151		1.0		17,529		1.1
Beverage, Food and Tobacco	143,807		8.0		145,658		8.8
Broadcasting and Entertainment	1,475		0.1		1,483		0.1
Buildings and Real Estate	54,082		3.0		24,852		1.5
Chemicals, Plastics and Rubber	2,467		0.1		75		0.0	*
Containers, Packaging and Glass	—		—		3,489		0.2
Diversified/Conglomerate Manufacturing	94,465		5.2		84,306		5.1
Diversified/Conglomerate Service	284,630		15.8		274,198		16.5
Ecological	18,356		1.0		15,618		0.9
Electronics	131,452		7.3		146,319		8.8
Grocery	21,524		1.2		17,862		1.1
Healthcare, Education and Childcare	381,196		21.2		327,287		19.7
Home and Office Furnishings, Housewares, and Durable Consumer	17,229		1.0		16,498		1.0
Hotels, Motels, Inns, and Gaming	9,903		0.6		815		0.0	*
Insurance	35,313		2.0		33,303		2.0
Investment Funds and Vehicles	108,879		6.0		104,228		6.3
Leisure, Amusement, Motion Pictures, Entertainment	76,231		4.2		51,397		3.1
Mining, Steel, Iron and Non-Precious Metals	3,731		0.2		3,914		0.2
Oil and Gas	2,182		0.1		2,305		0.1
Personal and Non Durable Consumer Products (Mfg. Only)	70,866		3.9		37,895		2.3
Personal, Food and Miscellaneous Services	72,202		4.0		66,198		4.0
Printing and Publishing	10,807		0.6		46,814		2.8
Retail Stores	143,865		8.0		137,940		8.3
Telecommunications	8,627		0.5		2,111		0.1
Textiles and Leather	2,254		0.1		2,061		0.1
Utilities	16,278		0.9		11,426		0.7
Total	$	1,801,808	100.0	%	$	1,660,612	100.0	%

*Represents an amount less than 0.1%

Senior Loan Fund LLC:

The Company co-invests with RGA Reinsurance Company (“RGA”) in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect of SLF must be approved by the SLF investment committee consisting of two representatives of each of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business. Investments held by SLF are measured at fair value using the same valuation methodologies as described in Note 6.

As of June 30, 2017, SLF was capitalized from LLC equity interest subscriptions from its members. On December 14, 2016, the SLF investment committee approved the recapitalization of the commitments of SLF’s members. On December 30, 2016, SLF’s members entered into additional LLC equity interest subscriptions totaling $160,000, SLF issued capital calls totaling $89,930 to the Company and RGA and the subordinated notes previously issued by SLF were redeemed and terminated. As of June 30, 2017 and September 30, 2016, the Company and RGA owned 87.5% and 12.5%, respectively of the LLC equity interests of SLF. SLF’s profits and losses are allocated to the Company and RGA in accordance with their respective ownership interests. As of September 30, 2016, the Company and RGA owned 87.5% and 12.5%, respectively, of the outstanding subordinated notes issued by SLF.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Additionally, SLF has entered into a senior secured revolving credit facility (as amended, the “SLF Credit Facility”) with Wells Fargo Bank, N.A., through its wholly-owned subsidiary Senior Loan Fund II LLC (“SLF II”), which as of June 30, 2017 allowed SLF II to borrow up to $300,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

As of June 30, 2017 and September 30, 2016, SLF had the following commitments from its members:



	As of June 30, 2017				As of September 30, 2016
	Committed		Funded⁽¹⁾		Committed		Funded⁽¹⁾⁽²⁾
Subordinated note commitments ⁽³⁾	$	—	$	—	$	160,000	$	88,344
LLC equity commitments ⁽³⁾	200,000		129,280		40,000		35,816
Total	$	200,000	$	129,280	$	200,000	$	124,160


⁽¹⁾	Funded LLC equity commitments are presented net of return of capital distributions subject to recall.


⁽²⁾	Funded subordinated note commitments as of September 30, 2016 are presented net of repayments subject to recall. The subordinated note commitments were terminated as of December 30, 2016.


⁽³⁾	Commitments presented are combined for the Company and RGA.

As of June 30, 2017 and September 30, 2016, SLF had total assets at fair value of $331,212 and $332,786, respectively. As of June 30, 2017, SLF had two portfolio company investments on non-accrual status and the total fair value of non-accrual loans was $4,900. As of September 30, 2016, SLF had one portfolio company investment on non-accrual status and the total fair value of non-accrual loans was $6,686. The portfolio companies in SLF are in industries and geographies similar to those in which the Company may invest directly. Additionally, as of June 30, 2017 and September 30, 2016, SLF had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $17,958 and $24,104, respectively.

Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of June 30, 2017 and September 30, 2016:



	As of			As of
	June 30,			September 30,
	2017			2016
Senior secured loans⁽¹⁾	$	331,346		$	331,473
Weighted average current interest rate on senior secured loans⁽²⁾	6.5		%	6.0		%
Number of borrowers in SLF	52			62
Largest portfolio company investments⁽¹⁾	$	16,160		$	13,050
Total of five largest portfolio company investments⁽¹⁾	$	66,281		$	61,118


⁽¹⁾	At principal amount.


⁽²⁾	Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



SLF Investment Portfolio as of June 30, 2017
Portfolio Company	Business Description	Security Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($) / Shares⁽²⁾		Fair Value⁽³⁾
1A Smart Start LLC	Home and Office Furnishings, Housewares, and Durable Consumer	Senior loan	02/2022	6.0	%	$	2,100	$	2,102
Accellos, Inc.⁽⁴⁾	Diversified/Conglomerate Service	Senior loan	07/2020	7.0		16,160		16,160
Advanced Pain Management Holdings, Inc.,	Healthcare, Education and Childcare	Senior loan	02/2018	6.3		6,805		6,124
Advanced Pain Management Holdings, Inc.,	Healthcare, Education and Childcare	Senior loan	02/2018	6.3		466		419
American Seafoods Group LLC	Beverage, Food and Tobacco	Senior loan	08/2021	6.3		4,605		4,605
Argon Medical Devices, Inc.	Healthcare, Education and Childcare	Senior loan	12/2021	6.0		3,334		3,334
Arise Virtual Solutions, Inc. ⁽⁴⁾	Telecommunications	Senior loan	12/2018	7.8		9,927		9,927
Atkins Nutritionals, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	01/2019	6.3		4,452		4,452
Boot Barn, Inc.	Retail Stores	Senior loan	06/2021	5.8		10,073		10,073
Brandmuscle, Inc.	Printing and Publishing	Senior loan	12/2021	6.0		4,851		4,846
Certara L.P.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	12/2018	6.8		8,243		8,243
CLP Healthcare Services, Inc.	Healthcare, Education and Childcare	Senior loan	12/2020	6.3		8,611		8,439
CLP Healthcare Services, Inc.	Healthcare, Education and Childcare	Senior loan	12/2020	6.3		4,340		4,253
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.8		2,448		2,448
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.8		1,231		1,231
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.8		59		59
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.8		36		36
Curo Health Services LLC⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	02/2022	5.9		5,865		5,943
DentMall MSO, LLC⁽⁵⁾	Personal, Food and Miscellaneous Services	Senior loan	07/2019	6.2		10,147		3,349
DentMall MSO, LLC⁽⁵⁾	Personal, Food and Miscellaneous Services	Senior loan	07/2019	6.5		1,178		509
DISA Holdings Acquisition Subsidiary Corp.	Diversified/Conglomerate Service	Senior loan	12/2020	5.4		4,401		4,401
DISA Holdings Acquisition Subsidiary Corp.	Diversified/Conglomerate Service	Senior loan	12/2020	6.5		80		80
EAG, INC.	Diversified/Conglomerate Service	Senior loan	07/2018	5.5		1,996		1,996
Encore GC Acquisition, LLC	Healthcare, Education and Childcare	Senior loan	01/2020	6.8		4,737		4,737
Encore GC Acquisition, LLC	Healthcare, Education and Childcare	Senior loan	01/2020	8.5		161		161
First Watch Restaurants, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	12/2020	7.4		10,259		10,259
First Watch Restaurants, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	12/2020	9.3		489		489
Flexan, LLC	Chemicals, Plastics and Rubber	Senior loan	02/2020	7.0		6,044		6,044
Flexan, LLC	Chemicals, Plastics and Rubber	Senior loan	02/2020	7.0		1,686		1,686
Gamma Technologies, LLC⁽⁴⁾	Electronics	Senior loan	06/2021	6.2		10,290		10,290
Harvey Tool Company, LLC	Diversified/Conglomerate Manufacturing	Senior loan	03/2020	6.1		3,071		3,071
III US Holdings, LLC	Diversified/Conglomerate Service	Senior loan	09/2022	7.4		5,194		5,194
Jensen Hughes, Inc.	Buildings and Real Estate	Senior loan	12/2021	6.4		2,336		2,336
Jensen Hughes, Inc.	Buildings and Real Estate	Senior loan	12/2021	6.2		103		103
Jensen Hughes, Inc.	Buildings and Real Estate	Senior loan	12/2021	6.2		65		65
Joerns Healthcare, LLC⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	05/2020	7.9		8,757		8,159
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.7		6,780		6,780
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.7		2,232		2,232
Loar Group Inc.	Aerospace and Defense	Senior loan	01/2022	6.0		2,164		2,164
Paradigm DKD Group, LLC	Buildings and Real Estate	Senior loan	11/2018	6.1		1,982		1,982
Paradigm DKD Group, LLC	Buildings and Real Estate	Senior loan	11/2018	7.3		524		524
Pasternack Enterprises, Inc. and Fairview Microwave, Inc.	Diversified/Conglomerate Manufacturing	Senior loan	05/2022	6.2		5,385		5,385
Payless ShoeSource, Inc.⁽⁵⁾	Retail Stores	Senior loan	03/2021	7.2		1,945		1,042

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



SLF Investment Portfolio as of June 30, 2017 – (continued)
Portfolio Company	Business Description	Security Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($) / Shares⁽²⁾		Fair Value⁽³⁾
Polk Acquisition Corp.	Automobile	Senior loan	06/2022	6.2	%	$	4,699	$	4,699
Polk Acquisition Corp.	Automobile	Senior loan	06/2022	6.2		54		54
Polk Acquisition Corp.	Automobile	Senior loan	06/2022	6.6		43		43
PowerPlan Holdings, Inc.⁽⁴⁾	Utilities	Senior loan	02/2022	6.0		11,365		11,365
Premise Health Holding Corp.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	06/2020	5.8		11,801		11,801
Pyramid Healthcare, Inc.	Healthcare, Education and Childcare	Senior loan	08/2019	7.7		9,763		9,763
Pyramid Healthcare, Inc.	Healthcare, Education and Childcare	Senior loan	08/2019	7.7		328		328
R.G. Barry Corporation	Personal, Food and Miscellaneous Services	Senior loan	09/2019	6.2		5,252		5,252
Radiology Partners, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	7.0		7,813		7,813
Radiology Partners, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	7.0		597		597
Radiology Partners, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	7.0		507		507
Reliant Pro ReHab, LLC⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	12/2017	6.3		3,265		3,265
RSC Acquisition, Inc.⁽⁴⁾	Insurance	Senior loan	11/2022	6.5		3,874		3,855
RSC Acquisition, Inc.	Insurance	Senior loan	11/2020	6.0		15		15
Rubio's Restaurants, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	11/2018	6.0		5,005		5,005
Rug Doctor LLC	Personal and Non Durable Consumer Products (Mfg. Only)	Senior loan	06/2018	6.5		5,926		5,926
Sage Dental Management, LLC	Healthcare, Education and Childcare	Senior loan	10/2019	6.9		4,794		4,794
Sage Dental Management, LLC	Healthcare, Education and Childcare	Senior loan	10/2019	6.9		50		50
Sage Dental Management, LLC	Healthcare, Education and Childcare	Senior loan	10/2019	7.0		40		40
Sage Dental Management, LLC	Healthcare, Education and Childcare	Senior loan	10/2019	8.8		23		23
Saldon Holdings, Inc.	Diversified/Conglomerate Service	Senior loan	09/2021	5.7		2,560		2,560
Sarnova HC, LLC	Healthcare, Education and Childcare	Senior loan	01/2022	6.0		3,694		3,694
SEI, Inc.	Electronics	Senior loan	07/2021	6.0		13,855		13,717
SEI, Inc.⁽⁶⁾	Electronics	Senior loan	07/2021	N/A	⁽⁷⁾	—		(1		)
Self Esteem Brands, LLC⁽⁴⁾	Leisure, Amusement, Motion Pictures, Entertainment	Senior loan	02/2020	6.0		11,514		11,514
Severin Acquisition, LLC	Diversified/Conglomerate Service	Senior loan	07/2021	6.1		5,304		5,278
Severin Acquisition, LLC⁽⁴⁾	Diversified/Conglomerate Service	Senior loan	07/2021	6.2		4,845		4,842
Severin Acquisition, LLC	Diversified/Conglomerate Service	Senior loan	07/2021	6.3		670		672
Severin Acquisition, LLC ⁽⁶⁾	Diversified/Conglomerate Service	Senior loan	07/2021	N/A	⁽⁷⁾	—		(1		)
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		905		860
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		71		67
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		71		68
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		71		68
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		71		68
Smashburger Finance LLC ⁽⁶⁾	Beverage, Food and Tobacco	Senior loan	05/2018	N/A	⁽⁷⁾	—		(6		)
Tate's Bake Shop, Inc. ⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	08/2019	6.3		2,933		2,933
Teasdale Quality Foods, Inc.	Grocery	Senior loan	10/2020	5.5		4,581		4,558
Transaction Data Systems, Inc.	Diversified/Conglomerate Service	Senior loan	06/2021	6.6		7,412		7,412
Transaction Data Systems, Inc.	Diversified/Conglomerate Service	Senior loan	06/2020	5.7		22		21
W3 Co.	Oil and Gas	Senior loan	03/2022	7.2		1,269		1,269

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



SLF Investment Portfolio as of June 30, 2017 – (continued)
Portfolio Company	Business Description	Security Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($) / Shares⁽²⁾		Fair Value⁽³⁾
Young Innovations, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	01/2019	6.3	%	$	10,395	$	10,395
Young Innovations, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	01/2019	6.3		277		277
Total senior loan investments						$	331,346	$	321,192

W3 Co.⁽⁸⁾⁽⁹⁾	Oil and Gas	LLC units	N/A	N/A		3		$	1,069
Total equity investments								$	1,069

Total investments						$	331,346	$	322,261


⁽¹⁾	Represents the weighted average annual current interest rate as of June 30, 2017.


⁽²⁾	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.


⁽³⁾	Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.


⁽⁴⁾	The Company also holds a portion of the first lien senior secured loan in this portfolio company.


⁽⁵⁾	Loan was on non-accrual status as of June 30, 2017, meaning that SLF has ceased recognizing interest income on the loan.


⁽⁶⁾	The negative fair value is the result of the unfunded commitment being valued below par.


⁽⁷⁾	The entire commitment was unfunded as of June 30, 2017. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.


⁽⁸⁾	Equity investment received as a result of the portfolio company's debt restructuring.


⁽⁹⁾	Non-income producing.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



SLF Investment Portfolio as of September 30, 2016
Portfolio Company	Business Description	Security Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($)		Fair Value⁽²⁾
1A Smart Start LLC⁽³⁾	Home and Office Furnishings, Housewares, and Durable Consumer	Senior loan	02/2022	5.8	%	$	2,116	$	2,111
ACTIVE Network, Inc.	Electronics	Senior loan	11/2020	5.5		1,945		1,938
Advanced Pain Management Holdings, Inc.	Healthcare, Education and Childcare	Senior loan	02/2018	6.3		6,805		6,601
Advanced Pain Management Holdings, Inc.	Healthcare, Education and Childcare	Senior loan	02/2018	6.3		466		452
Advanced Pain Management Holdings, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	02/2018	N/A	⁽⁵⁾	—		(35		)
Aimbridge Hospitality, LLC⁽³⁾	Hotels, Motels, Inns, and Gaming	Senior loan	10/2018	5.8		5,037		5,037
American Seafoods Group LLC	Beverage, Food and Tobacco	Senior loan	08/2021	6.0		4,818		4,806
Argon Medical Devices, Inc.	Healthcare, Education and Childcare	Senior loan	12/2021	5.8		3,895		3,895
Arise Virtual Solutions, Inc.⁽³⁾	Telecommunications	Senior loan	12/2018	7.8		10,804		10,264
Arise Virtual Solutions, Inc.⁽³⁾⁽⁴⁾	Telecommunications	Senior loan	12/2018	N/A	⁽⁵⁾	—		(28		)
Atkins Nutritionals, Inc.⁽³⁾	Beverage, Food and Tobacco	Senior loan	01/2019	6.3		5,664		5,664
BMC Software, Inc.	Electronics	Senior loan	09/2020	5.0		1,876		1,813
Boot Barn, Inc.	Retail Stores	Senior loan	06/2021	5.5		10,667		10,667
Brandmuscle, Inc.	Printing and Publishing	Senior loan	12/2021	5.8		4,948		4,938
C.B. Fleet Company, Incorporated	Personal and Non-Durable Consumer Products	Senior loan	12/2021	5.8		7,613		7,613
Checkers Drive-In Restaurants, Inc.	Beverage, Food and Tobacco	Senior loan	01/2022	6.5		4,460		4,427
CLP Healthcare Services, Inc.	Healthcare, Education and Childcare	Senior loan	12/2020	6.3		8,677		8,677
CLP Healthcare Services, Inc.	Healthcare, Education and Childcare	Senior loan	12/2020	6.3		4,373		4,373
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.5		2,466		2,454
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.5		1,240		1,234
CPI Buyer, LLC (Cole-Parmer)⁽³⁾	Healthcare, Education and Childcare	Senior loan	08/2021	5.5		5,805		5,776
Curo Health Services LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	02/2022	6.5		5,910		5,928
DentMall MSO, LLC⁽⁶⁾	Retail Stores	Senior loan	07/2019	6.0		10,147		6,088
DentMall MSO, LLC⁽⁶⁾	Retail Stores	Senior loan	07/2019	6.0		1,000		598
DISA Holdings Acquisition Subsidiary Corp.	Diversified Conglomerate Service	Senior loan	12/2020	5.5		4,568		4,431
DISA Holdings Acquisition Subsidiary Corp.	Diversified Conglomerate Service	Senior loan	12/2020	5.5		255		224
EAG, INC. (Evans Analytical Group)	Diversified Conglomerate Service	Senior loan	07/2017	5.0		2,113		2,113
Encore GC Acquisition, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	01/2020	6.3		4,773		4,773
Encore GC Acquisition, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	01/2020	7.8		164		164
Express Oil Change, LLC⁽³⁾	Retail Stores	Senior loan	12/2017	6.0		4,841		4,841
Extreme Reach Inc.	Broadcasting and Entertainment	Senior loan	02/2020	7.3		1,976		1,998
Federal-Mogul Corporation	Automobile	Senior loan	04/2021	4.8		3,920		3,799
Flexan, LLC	Chemicals, Plastics and Rubber	Senior loan	02/2020	6.3		6,090		6,090
Harvey Tool Company, LLC⁽³⁾	Diversified Conglomerate Manufacturing	Senior loan	03/2020	6.0		3,108		3,108
Jensen Hughes, Inc.	Diversified Conglomerate Service	Senior loan	12/2021	6.3		2,342		2,342
Jensen Hughes, Inc.	Diversified Conglomerate Service	Senior loan	12/2021	6.0		104		104
Jensen Hughes, Inc.	Diversified Conglomerate Service	Senior loan	12/2021	6.2		65		65
Joerns Healthcare, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	05/2020	6.0		9,598		9,118
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.5		6,834		6,834
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.5		1,061		1,061
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.5		596		596

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company	Business Description	Security Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($)		Fair Value⁽²⁾
K&N Engineering, Inc.⁽³⁾	Automobile	Senior loan	07/2019	6.8	%	$	3,781	$	3,781
K&N Engineering, Inc.⁽³⁾	Automobile	Senior loan	07/2019	5.3		179		179
Loar Group Inc.	Aerospace and Defense	Senior loan	01/2022	5.8		2,233		2,233
Mediaocean LLC⁽³⁾	Diversified Conglomerate Service	Senior loan	08/2022	5.8		3,137		3,137
Northwestern Management Services, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	10/2019	6.5		4,288		4,224
Northwestern Management Services, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	10/2019	6.5		470		463
Northwestern Management Services, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	10/2019	7.5		1		1
Paradigm DKD Group, LLC	Buildings and Real Estate	Senior loan	11/2018	6.5		1,998		1,958
Paradigm DKD Group, LLC	Buildings and Real Estate	Senior loan	11/2018	6.7		180		166
Pasternack Enterprises, Inc. and Fairview Microwave, Inc⁽³⁾	Diversified Conglomerate Manufacturing	Senior loan	05/2022	6.0		1,640		1,623
Payless ShoeSource, Inc.	Retail Stores	Senior loan	03/2021	5.0		1,955		1,163
Pentec Acquisition Sub, Inc.	Healthcare, Education and Childcare	Senior loan	05/2018	6.3		1,419		1,419
PetVet Care Centers LLC⁽³⁾	Personal, Food and Miscellaneous Services	Senior loan	12/2020	5.8		5,895		5,895
PetVet Care Centers LLC⁽³⁾	Personal, Food and Miscellaneous Services	Senior loan	12/2020	5.8		1,219		1,219
PowerPlan Holdings, Inc.⁽³⁾	Utilities	Senior loan	02/2022	5.8		11,994		11,994
PPT Management, LLC	Healthcare, Education and Childcare	Senior loan	04/2020	6.0		13,026		13,026
PPT Management, LLC	Healthcare, Education and Childcare	Senior loan	04/2020	6.0		10		10
Premise Health Holding Corp.⁽³⁾	Healthcare, Education and Childcare	Senior loan	06/2020	5.5		11,891		11,891
Pyramid Healthcare, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	08/2019	6.8		8,354		8,354
Pyramid Healthcare, Inc.	Healthcare, Education and Childcare	Senior loan	08/2019	7.8		373		373
R.G. Barry Corporation	Personal, Food and Miscellaneous Services	Senior loan	09/2019	6.0		5,880		5,821
Radiology Partners, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	09/2020	6.5		7,072		7,001
Radiology Partners, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	09/2020	6.5		801		792
Radiology Partners, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	09/2020	6.5		510		505
Radiology Partners, Inc.⁽³⁾⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	N/A	⁽⁵⁾	—		(6		)
Radiology Partners, Inc.⁽³⁾⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	N/A	⁽⁵⁾	—		(3		)
Reliant Pro ReHab, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	12/2017	6.0		3,337		3,337
RSC Acquisition, Inc.⁽³⁾	Insurance	Senior loan	11/2022	6.3		3,732		3,732
RSC Acquisition, Inc.⁽³⁾	Insurance	Senior loan	11/2022	6.3		172		172
RSC Acquisition, Inc.	Insurance	Senior loan	11/2020	6.8		33		33
Rubio's Restaurants, Inc.⁽³⁾	Beverage, Food and Tobacco	Senior loan	11/2018	6.0		5,044		5,044
Rug Doctor LLC	Personal and Non-Durable Consumer Products	Senior loan	06/2018	6.3		7,780		7,780
Saldon Holdings, Inc.	Diversified Conglomerate Service	Senior loan	09/2021	5.5		2,718		2,718
Sarnova HC, LLC	Healthcare, Education and Childcare	Senior loan	01/2022	5.8		3,722		3,722
SEI, Inc.	Electronics	Senior loan	07/2021	5.8		8,711		8,711
Self Esteem Brands, LLC⁽³⁾	Leisure, Amusement, Motion Pictures and Entertainment	Senior loan	02/2020	5.0		6,342		6,342
Severin Acquisition, LLC⁽³⁾	Diversified Conglomerate Service	Senior loan	07/2021	5.9		4,882		4,858
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		951		932
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		75		74
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		75		73
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		75		73
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		75		73
Smashburger Finance LLC⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	05/2018	N/A	⁽⁵⁾	—		(2		)

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company	Business Description	Security Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($)		Fair Value⁽²⁾
Systems Maintenance Services Holding, Inc.⁽³⁾	Electronics	Senior loan	10/2019	5.0	%	$	2,396	$	2,396
Tate's Bake Shop, Inc.⁽³⁾	Beverage, Food and Tobacco	Senior loan	08/2019	6.0		2,955		2,955
Teasdale Quality Foods, Inc.	Grocery	Senior loan	10/2020	5.3		4,582		4,566
Transaction Data Systems, Inc.⁽³⁾	Diversified Conglomerate Service	Senior loan	06/2021	6.3		5,260		5,260
Transaction Data Systems, Inc.	Diversified Conglomerate Service	Senior loan	06/2020	5.5		9		8
W3 Co.	Oil and Gas	Senior loan	03/2020	5.8		2,924		2,295
Worldwide Express Operations, LLC	Cargo Transport	Senior loan	07/2019	6.0		4,869		4,869
Worldwide Express Operations, LLC	Cargo Transport	Senior loan	07/2019	6.0		100		100
Young Innovations, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	01/2019	5.3		3,804		3,818
Young Innovations, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	01/2018	6.8		122		118
Zest Holdings, LLC	Healthcare, Education and Childcare	Senior loan	08/2020	5.8		5,282		5,282
						$	331,473	$	323,510


⁽¹⁾	Represents the weighted average annual current interest rate as of September 30, 2016. All interest rates are payable in cash.


⁽²⁾	Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in the Board's valuation process described elsewhere herein.


⁽³⁾	The Company also holds a portion of the first lien senior secured loan in this portfolio company.


⁽⁴⁾	The negative fair value is the result of the unfunded commitment being valued below par.


⁽⁵⁾	The entire commitment was unfunded at September 30, 2016. As such, no interest is being earned on this investment.


⁽⁶⁾	Loan was on non-accrual status as of September 30, 2016, meaning that SLF has ceased recognizing interest income on the loan.

As of June 30, 2017, the Company has committed to fund $175,000 of LLC equity interest subscriptions to SLF. As of June 30, 2017 and September 30, 2016, $113,120 and $31,339, respectively, of the Company’s LLC equity interest subscriptions to SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and nine months ended June 30, 2017, the Company received $891 and $4,054, respectively, in dividend income from the SLF LLC equity interests. For the three and nine months ended June 30, 2016, the Company received $1,068 and $2,971, respectively, in dividend income from the SLF LLC equity interests.

As of September 30, 2016, the amortized cost, net of principal repayments that were subject to recall, and fair value of the subordinated notes held by the Company was $77,301 and $77,301, respectively. As of September 30, 2016, the subordinated notes paid a weighted average interest rate of three-month LIBOR plus 8.0%. For the three and nine months ended June 30, 2017, the Company earned interest income on the subordinated notes of $0 and $1,639, respectively. For the three and nine months ended June 30, 2016, the Company earned interest income on the subordinated notes of $1,799 and $5,192, respectively.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

See below for certain summarized financial information for SLF as of June 30, 2017 and September 30, 2016 and for the three and nine months ended June 30, 2017 and 2016:



	As of			As of
	June 30, 2017			September 30, 2016
Selected Balance Sheet Information:
Investments, at fair value	$	322,261		$	323,510
Cash and other assets	7,068			7,281
Receivable from investments sold	1,883			1,995
Total assets	$	331,212		$	332,786
Senior credit facility	$	204,900		$	214,050
Unamortized debt issuance costs	(110		)	(949		)
Payable for investments purchased	1,317			—
Other liabilities	672			567
Total liabilities	206,779			213,668
Subordinated notes and members’ equity	124,433			119,118
Total liabilities and members' equity	$	331,212		$	332,786



	Three months ended June 30,					Nine months ended June 30,
	2017			2016		2017			2016
Selected Statement of Operations Information:
Interest income	$	5,645		$	5,695	$	16,311		$	16,699
Fee income	5			—		5			22
Total investment income	5,650			5,695		16,316			16,721
Interest expense	2,129			4,016		8,148			11,775
Administrative service fee	123			127		354			327
Other expenses	34			35		98			110
Total expenses	2,286			4,178		8,600			12,212
Net investment income	3,364			1,517		7,716			4,509
Net realized gain (loss) on investments	29			—		3			(430		)
Net change in unrealized appreciation (depreciation) on investments and subordinated notes	(2,262		)	591		(2,891		)	(1,505		)
Net increase (decrease) in net assets	$	1,131		$	2,108	$	4,828		$	2,574

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Note 5. Transactions with Affiliated Companies

An affiliated company is generally a portfolio company in which the Company owns 5% or more of the portfolio company's voting securities. A controlled affiliate is generally a portfolio company in which the Company owns more than 25% of the portfolio company’s outstanding voting securities. Transactions related to investments with both controlled and non-controlled affiliates for the nine months ended June 30, 2017 and 2016 were as follows:



For the nine months ended June 30, 2017
Portfolio Company	Fair value at September 30, 2016		Purchases(cost)⁽¹⁾		Redemptions (cost)			Transfer in (out) (cost)		Discount accretion		Net change in unrealized gain/(loss)		Fair value at June 30, 2017		Net realized gain/(loss)			Interest and fee income		Dividend income
Controlled Affiliates
Senior Loan Fund LLC^*	$	104,228	$	96,687	$	(92,207	)	$	—	$	—	$	171	$	108,879	$	—		$	1,639	$	4,054
Non-Controlled Affiliates
Competitor Group, Inc.	9,618		491		(15,615		)	—		278		5,228		—		(6,442		)	1,023		—
Total Controlled and Non-Controlled Affiliates	$	113,846	$	97,178	$	(107,822	)	$	—	$	278	$	5,399	$	108,879	$	(6,442	)	$	2,662	$	4,054



*	Together with RGA, the Company co-invests through SLF. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owns more than 25% of the voting securities of SLF, the Company does not believe that it has control over SLF for purposes of the 1940 Act or otherwise.
⁽¹⁾	Purchases at cost includes amounts related to PIK capitalized and added to the principal balance of the respective loans.



For the nine months ended June 30, 2016
Portfolio Company	Fair value at September 30, 2015		Purchases(cost)⁽¹⁾		Redemptions (cost)			Transfer in (out) (cost)			Discount accretion		Net change in unrealized gain/(loss)			Fair value at June 30, 2016		Net realized gain/(loss)		Interest and fee income		Dividend income
Controlled Affiliates
Senior Loan Fund LLC*	$	98,936	$	20,440	$	(6,773	)	$	—		$	—	$	(1,539	)	$	111,064	$	—	$	5,192	$	2,971
Non-Controlled Affiliates
Barcelona Restaurants, LLC⁽²⁾	5,523		—		(1,995		)	(4,871		)	—		1,343			—		2,722		—		—
Competitor Group, Inc.⁽³⁾	—		149		—			13,743			50		(4,395		)	9,547		—		337		—
Total Controlled and Non-Controlled Affiliates	$	104,459	$	20,589	$	(8,768	)	$	8,872		$	50	$	(4,591	)	$	120,611	$	2,722	$	5,529	$	2,971



*	Together with RGA, the Company co-invests through SLF. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA). Therefore, although the Company owns more than 25% of the voting securities of SLF, the Company does not believe that it has control over SLF for purposes of the 1940 Act or otherwise.
⁽¹⁾	Purchases at cost includes amounts related to PIK capitalized and added to the principal balance of the respective loans.
⁽²⁾	During the three months ended December 31, 2015, a portion of the Company's investment was sold diluting the Company's ownership to less than five percent of the portfolio company's voting securities. Effective as of and for periods subsequent to December 31, 2015, the Company no longer classified the portfolio company as a non-controlled affiliate company.
⁽³⁾	During the three months ended March 31, 2016, the Company's ownership increased to over five percent of the portfolio company's voting securities as a result of a partial debt to equity conversion.

Note 6. Fair Value Measurements

The Company follows ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

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

Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and nine months ended June 30, 2017 and 2016. The following section describes the valuation techniques used by the Company to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by the Board, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of the Board to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of the Company’s valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. All investments as of June 30, 2017 and September 30, 2016, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, the Company may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”). A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses a market interest rate yield analysis to determine fair value.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

In addition, for certain debt investments, the Company may base its valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company may realize significantly less than the value at which such investment had previously been recorded. The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

Secured Borrowings

The Company has elected the fair value option under ASC Topic 825 - Financial Instruments, relating to accounting for debt obligations at their fair value for its secured borrowings which arose due to partial loan sales which did not meet the criteria for sale treatment under ASC Topic 860. The Company reports changes in the fair value of its secured borrowings as a component of the net change in unrealized (appreciation) depreciation on secured borrowings in the consolidated statements of operations. The net gain or loss reflects the difference between the fair value and the principal amount due on maturity.

All secured borrowings as of June 30, 2017 and September 30, 2016 were valued using Level 3 inputs under the fair value hierarchy, and the Company’s approach to determining fair value of Level 3 secured borrowings is consistent with its approach to determining fair value of the Level 3 investments that are associated with these secured borrowings as previously described.

The following tables present fair value measurements of the Company’s investments and secured borrowings and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of June 30, 2017 and September 30, 2016:



As of June 30, 2017	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Total
Assets:
Debt investments⁽¹⁾	$	—	$	—	$	1,631,532	$	1,631,532
Equity investments⁽¹⁾	—		—		61,397		61,397
Money market funds⁽¹⁾⁽²⁾	11,639		—		—		11,639
Investment measured at NAV⁽³⁾⁽⁴⁾	—		—		—		108,879
Total assets:	$	11,639	$	—	$	1,692,929	$	1,813,447
Secured borrowings:	$	—	$	—	$	406	$	406

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



As of September 30, 2016	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Total
Assets:
Debt investments⁽¹⁾	$	—	$	—	$	1,573,953	$	1,573,953
Equity investments⁽¹⁾	—		—		59,732		59,732
Money market funds⁽¹⁾⁽²⁾	44,281		—		—		44,281
Investment measured at NAV⁽³⁾⁽⁴⁾	—		—		—		26,927
Total assets:	$	44,281	$	—	$	1,633,685	$	1,704,893
Secured borrowings:	$	—	$	—	$	475	$	475


⁽¹⁾	Refer to the Consolidated Schedules of Investments for further details.


⁽²⁾	Included in cash and cash equivalents and restricted cash and cash equivalents on the Consolidated Statements of Financial Condition.


⁽³⁾	Certain investments that are measured at fair value using the NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Financial Condition.


⁽⁴⁾	Represents the Company's investment in LLC equity interests in SLF. The fair value of this investment has been determined using the NAV of the Company’s ownership interest in members’ capital.

The net change in unrealized appreciation (depreciation) for the three and nine months ended June 30, 2017 reported within the net change in unrealized appreciation (depreciation) on investments in the Company’s consolidated statements of operations attributable to the Company’s Level 3 assets held as of June 30, 2017 was $3,882 and $8,874, respectively. The net change in unrealized appreciation (depreciation) for the three and nine months ended June 30, 2016 reported within the net change in unrealized appreciation (depreciation) on investments in the Company’s consolidated statements of operations attributable to the Company’s Level 3 assets held as of June 30, 2016 was $1,820 and $1,353, respectively.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

The following table presents the changes in investments and secured borrowings measured at fair value using Level 3 inputs for the nine months ended June 30, 2017 and 2016:



	For the nine months ended June 30, 2017
	Debt Investments			Equity Investments			Total Investments			Secured Borrowings
Fair value, beginning of period	$	1,573,953		$	59,732		$	1,633,685		$	475
Net change in unrealized appreciation (depreciation) on investments	3,621			6,350			9,971			—
Net change in unrealized appreciation (depreciation) on secured borrowings	—			—			—			(1		)
Realized gain (loss) on investments	(640		)	(976		)	(1,616		)	—
Proceeds from (funding of) revolving loans, net	(959		)	—			(959		)	—
Fundings of investments	446,059			3,162			449,221			—
PIK interest	1,537			—			1,537			—
Proceeds from principal payments and sales of portfolio investments	(320,143		)	(6,871		)	(327,014		)	—
Noncash proceeds from subordinated notes in SLF principal payments	(78,689		)	—			(78,689		)	—
Repayments on secured borrowings	—			—			—			(69		)
Accretion of discounts and amortization of premiums	6,793			—			6,793			1
Fair value, end of period	$	1,631,532		$	61,397		$	1,692,929		$	406



	For the nine months ended June 30, 2016
	Debt Investments			Equity Investments			Total Investments			Secured Borrowings
Fair value, beginning of period	$	1,449,603		$	57,808		$	1,507,411		$	355
Net change in unrealized appreciation (depreciation) on investments	4,081			2,249			6,330			—
Net change in unrealized appreciation (depreciation) on secured borrowings	—			—			—			(1		)
Realized gain (loss) on investments	(5,724		)	5,464			(260		)	—
Proceeds from (funding of) revolving loans, net	2,624			—			2,624			—
Fundings of investments	449,237			11,422			460,659			—
PIK interest	689			—			689			—
Proceeds from principal payments and sales of portfolio investments	(375,583		)	(9,029		)	(384,612		)	—
Repayments on secured borrowings	—			—			—			(29		)
Accretion of discounts and amortization of premiums	5,896			—			5,896			1
Fair value, end of period	$	1,530,823		$	67,914		$	1,598,737		$	326

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments and secured borrowings as of June 30, 2017 and September 30, 2016.



Quantitative information about Level 3 Fair Value Measurements
	Fair value as of June 30, 2017		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Assets:
Senior secured loans⁽¹⁾⁽²⁾	$	180,472	Market rate approach	Market interest rate	5.4% - 12.3% (6.8%)
			Market comparable companies	EBITDA multiples	6.0x - 17.5x (11.3x)
	11,711		Market comparable	Broker/dealer bids or quotes	N/A
One stop loans^(1)(3)(4)	$	1,423,187	Market rate approach	Market interest rate	4.5% - 22.3% (8.0%)
			Market comparable companies	EBITDA multiples	4.0x - 35.0x (12.2x)
				Revenue multiples	2.0x - 7.5x (3.9x)
	3,263		Market comparable	Broker/dealer bids or quotes	N/A
Subordinated debt and second lien loans⁽¹⁾	$	9,492	Market rate approach	Market interest rate	9.3% - 19.5% (9.4%)
			Market comparable companies	EBITDA multiples	10.5x
Equity⁽⁵⁾	$	61,397	Market comparable companies	EBITDA multiples⁽⁶⁾	4.0x - 21.5x (11.6x)
				Revenue multiples⁽⁶⁾	2.0x - 5.8x (2.9x)
Liabilities:
Secured borrowings⁽⁷⁾	$	406	Market rate approach	Market interest rate	6.6%
			Market comparable companies	EBITDA multiples	16.0x


⁽¹⁾	The fair value of this asset class was determined using the market rate approach as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of June 30, 2017 was determined using the market rate approach.


⁽²⁾	Excludes $(60) of non-accrual loans at fair value, which the Company valued on a liquidation basis. The negative fair value is the result of the unfunded commitment being valued below par.


⁽³⁾	Excludes $3,467 of non-accrual loans at fair value, which the Company valued on a liquidation basis.


⁽⁴⁾	The Company valued $1,285,788 and $137,399 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.


⁽⁵⁾	Excludes $108,879 of LLC equity interests in SLF at fair value, which the Company valued using the NAV.


⁽⁶⁾	The Company valued $57,367 and $4,030 of equity investments using EBITDA and revenue multiples, respectively.


⁽⁷⁾	The fair value of the secured borrowings was determined using the market rate approach as the corresponding investments were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of June 30, 2017 was determined using the market rate approach.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)



Quantitative information about Level 3 Fair Value Measurements
	Fair value as of September 30, 2016		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Assets:
Senior secured loans⁽¹⁾⁽²⁾	$	148,446	Market rate approach	Market interest rate	4.0% - 10.0% (6.4%)
			Market comparable companies	EBITDA multiples	6.0x - 17.5x (11.5x)
	14,247		Market comparable	Broker/dealer bids or quotes	N/A
Subordinated Notes of SLF	$	77,301	Discounted cash flow analysis	Discount rate	8.2%
One stop loans^(1)(3)(4)	$	1,299,650	Market rate approach	Market interest rate	4.5% - 23.5% (7.9%)
			Market comparable companies	EBITDA multiples	4.0x - 35.4x (10.6x)
				Revenue multiples	2.0x - 7.5x (3.9x)
	3,647		Market comparable	Broker/dealer bids or quotes	N/A
Subordinated debt and second lien loans⁽¹⁾	$	29,336	Market rate approach	Market interest rate	9.0% - 29.5% (11.3%)
			Market comparable companies	EBITDA multiples	6.5x - 20.0x (13.1x)
Equity⁽⁵⁾	$	59,732	Market comparable companies	EBITDA multiples(6)	4.0x - 16.7x (10.9x)
				Revenue multiples(6)	2.0x - 5.5x (3.2x)
Liabilities:
Secured borrowings⁽⁷⁾	$	475	Market rate approach	Market interest rate	7.0%
			Market comparable companies	EBITDA multiples	16.0x


⁽¹⁾	The fair value of this asset class was determined using the market rate approach as the investments in this asset class were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of September 30, 2016 was determined using the market rate approach.


⁽²⁾	Excludes $156 of non-accrual loans at fair value, which the Company valued on a liquidation basis.


⁽³⁾	Excludes $1,170 of non-accrual loans at fair value, which the Company valued on a liquidation basis.


⁽⁴⁾	The Company valued $1,171,240 and $128,410 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.


⁽⁵⁾	Excludes $26,927 of LLC equity interests in SLF at fair value, which the Company valued using the NAV.


⁽⁶⁾	The Company valued $55,897 and $3,835 of equity investments using EBITDA and revenue multiples, respectively.


⁽⁷⁾	The fair value of the secured borrowings was determined using the market rate approach as the corresponding investments were determined not to be credit impaired using the market comparable companies approach. The unobservable inputs for both valuation techniques have been presented, but the fair value as of September 30, 2016 was determined using the market rate approach.

The above tables are not intended to be all-inclusive but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity investments and secured borrowings are EBITDA multiples, revenue multiples and market interest rates. The Company uses EBITDA multiples and, to a lesser extent, revenue multiples on its debt and equity investments and secured borrowings to determine any credit gains or losses. Increases or decreases in either of these inputs in isolation would result in a significantly lower or higher fair value measurement. The Company uses market interest rates for loans to determine if the effective yield on a loan is commensurate with the market yields for that type of loan. If a loan’s effective yield is significantly less than the market yield for a similar loan with a similar credit profile, then the resulting fair value of the loan may be lower.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Other Financial Assets and Liabilities

ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. As a result, with the exception of the line item titled “debt” which is reported at cost, all assets and liabilities approximate fair value on the consolidated statements of financial condition due to their short maturity. Fair value of the Company’s debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

The following are the carrying values and fair values of the Company’s debt as of June 30, 2017 and September 30, 2016. Fair value is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if available.



	As of June 30, 2017				As of September 30, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt	$	883,400	$	882,162	$	864,700	$	873,980

Note 7. Borrowings

In accordance with the 1940 Act, with certain limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. On September 13, 2011, the Company received exemptive relief from the SEC allowing it to modify the asset coverage requirement to exclude the SBA debentures from this calculation. As such, the Company’s ratio of total consolidated assets to outstanding indebtedness may be less than 200%. This provides the Company with increased investment flexibility but also increases its risks related to leverage. As of June 30, 2017, the Company’s asset coverage for borrowed amounts was 258.4% (excluding the SBA debentures).

Debt Securitizations: On July 16, 2010, the Company completed a $300,000 term debt securitization, which was subsequently increased to $350,000 (as amended, “2010 Debt Securitization”). The notes (“2010 Notes”) offered in the 2010 Debt Securitization were issued by the 2010 Issuer, a subsidiary of Holdings. Through October 19, 2016, the 2010 Debt Securitization consisted of $203,000 of Aaa/AAA Class A 2010 Notes that bore interest at a rate of three-month LIBOR plus 1.74%, $12,000 of Class B 2010 Notes that bore interest at a rate of three-month LIBOR plus 2.40% and $135,000 of Subordinated 2010 Notes that do not bear interest. On October 20, 2016, the Company and the 2010 Issuer amended the 2010 Debt Securitization to, among other things, (a) refinance the issued Class A 2010 Notes by redeeming in full the Class A 2010 Notes and issuing new Class A-Refi 2010 Notes in an aggregate principal amount of $205,000 that bear interest at a rate of three-month LIBOR plus 1.90%, (b) refinance the Class B Notes by redeeming in full the Class B 2010 Notes and issuing new Class B-Refi 2010 Notes in an aggregate principal amount of $10,000 that bear interest at a rate of three-month LIBOR plus 2.40%, and (c) extend the reinvestment period applicable to the 2010 Issuer to July 20, 2018. Following the refinancing, Holdings retained the Class B-Refi 2010 Notes. The Class A-Refi 2010 Notes and Class B-Refi 2010 Notes are secured by the assets held by the 2010 Issuer.

The Class A-Refi 2010 Notes are included in the June 30, 2017 consolidated statement of financial condition as debt of the Company and the Class B-Refi 2010 Notes were eliminated in consolidation. The Class A and Class B 2010 Notes are included in the September 30, 2016 consolidated statement of financial condition as debt of the Company. As of June 30, 2017 and September 30, 2016, the Subordinated 2010 Notes were eliminated in consolidation.

Through July 20, 2018, all principal collections received on the underlying collateral may be used by the 2010 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2010 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the leverage in the 2010 Debt Securitization. The 2010 Notes are scheduled to mature on July 20, 2023.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

As of June 30, 2017 and September 30, 2016, there were 79 and 77 portfolio companies with a total fair value of $347,064 and $319,288, respectively, securing the 2010 Notes. The pool of loans in the 2010 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The interest charged under the 2010 Debt Securitization is based on three-month LIBOR, which as of June 30, 2017 was 1.2%. For the three and nine months ended June 30, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the 2010 Debt Securitization were as follows:



	For the three months ended June 30,						For the nine months ended June 30,
	2017			2016			2017			2016
Stated interest expense	$	1,570		$	1,309		$	4,492		$	3,726
Amortization of debt issuance costs	67			30			193			360
Total interest and other debt financing expenses	$	1,637		$	1,339		$	4,685		$	4,086
Cash paid for interest expense	$	1,502		$	1,305		$	4,317		$	3,590
Annualized average stated interest rate	3.1		%	2.4		%	2.9		%	2.3		%
Average outstanding balance	$	205,000		$	215,000		$	205,696		$	215,000

As of June 30, 2017, the amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A-Refi 2010 Notes are as follows:



Description		Class A-Refi 2010 Notes
Type		Senior Secured Floating Rate
Amount Outstanding		$205,000
Moody’s Rating		“Aaa”
S&P Rating		“AAA”
Interest Rate		LIBOR + 1.90%
Stated Maturity		July 20, 2023

On June 5, 2014, the Company completed a $402,569 term debt securitization (“2014 Debt Securitization”). The notes (“2014 Notes”) offered in the 2014 Debt Securitization were issued by the 2014 Issuer and are secured by a diversifed portfolio of senior secured and second lien loans held by the 2014 Issuer. The 2014 Debt Securitization consists of $191,000 of Aaa/AAA Class A-1 2014 Notes, $20,000 of Aaa/AAA Class A-2 2014 Notes and $35,000 of Aa2/AA Class B 2014 Notes. In partial consideration for the loans transferred to the 2014 Issuer as part of the 2014 Debt Securitization, the Company received $37,500 of Class C 2014 Notes and $119,069 of LLC equity interests in the 2014 Issuer. The Company retained all of the Class C 2014 Notes and LLC equity interests totaling $37,500 and $119,069, respectively. The Class A-1, Class A-2 and Class B 2014 Notes are included in the June 30, 2017 and September 30, 2016 consolidated statements of financial condition as debt of the Company. As of June 30, 2017 and September 30, 2016, the Class C 2014 Notes and LLC equity interests were eliminated in consolidation.

Through April 28, 2018, all principal collections received on the underlying collateral may be used by the 2014 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2014 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the leverage in the 2014 Debt Securitization. The 2014 Notes are scheduled to mature on April 25, 2026.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

As of June 30, 2017 and September 30, 2016, there were 83 and 79 portfolio companies with a total fair value of $398,722 and $391,752, respectively, securing the 2014 Notes. The pool of loans in the 2014 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The interest charged under the 2014 Debt Securitization is based on three-month LIBOR, which as of June 30, 2017 was 1.2%. For the three and nine months ended June 30, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the 2014 Debt Securitization were as follows:



	For the three months ended June 30,						For the nine months ended June 30,
	2017			2016			2017			2016
Stated interest expense	$	1,864		$	1,558		$	5,333		$	4,415
Amortization of debt issuance costs	159			160			478			480
Total interest and other debt financing expenses	$	2,023		$	1,718		$	5,811		$	4,895
Cash paid for interest expense	$	1,790		$	1,550		$	5,149		$	4,225
Annualized average stated interest rate	3.0		%	2.5		%	2.9		%	2.4		%
Average outstanding balance	$	246,000		$	246,000		$	246,000		$	246,000

As of June 30, 2017, the classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A-1, A-2 and B 2014 Notes are as follows:



Description	Class A-1 2014 Notes	Class A-2 2014 Notes	Class B 2014 Notes
Type	Senior Secured Floating Rate	Senior Secured Floating Rate	Senior Secured Floating Rate
Amount Outstanding	$191,000	$20,000	$35,000
Moody’s Rating	“Aaa”	“Aaa”	“Aa2”
S&P Rating	“AAA”	“AAA”	“AA”
Interest Rate	LIBOR + 1.75%	LIBOR + 1.95%	LIBOR + 2.50%
Stated Maturity	April 25, 2026	April 25, 2026	April 25, 2026

The Investment Adviser serves as collateral manager to the 2010 Issuer and the 2014 Issuer under separate collateral management agreements and receives a fee for providing these services. The total fees payable by the Company under its Investment Advisory Agreement are reduced by an amount equal to the total aggregate fees that are paid to the Investment Adviser by the 2010 Issuer and the 2014 Issuer for rendering such collateral management services.

As part of each of the 2010 Debt Securitization and the 2014 Debt Securitization, GBDC entered into master loan sale agreements under which GBDC agreed to directly or indirectly sell or contribute certain senior secured and second lien loans (or participation interests therein) to the 2010 Issuer and the 2014 Issuer, as applicable, and to purchase or otherwise acquire the Subordinated 2010 Notes and the LLC equity interests in the 2014 Issuer, as applicable. The 2010 Notes (other than the Subordinated 2010 Notes) and the 2014 Notes are the secured obligations of the 2010 Issuer and 2014 Issuer, respectively, and indentures governing each of the 2010 Notes and the 2014 Notes include customary covenants and events of default. The pool of loans in the 2010 Debt Securitization and the 2014 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

SBA Debentures: On August 24, 2010, SBIC IV received approval for a license from the SBA to operate as an SBIC. On December 5, 2012, SBIC V received a license from the SBA to operate as an SBIC. On January 10, 2017, SBIC VI received a license from the SBA to operate as an SBIC. SBICs are subject to a variety of regulations and oversight by the

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

SBA concerning the size and nature of the companies in which they may invest as well as the structures of those investments.

The licenses allow the SBICs to obtain leverage by issuing SBA-guaranteed debentures, subject to issuance of a capital commitment by the SBA and customary procedures. These debentures are non-recourse to GBDC, have interest payable semiannually and a ten-year maturity. The interest rate is fixed at the time of issuance at a market-driven spread over U.S. Treasury Notes with ten-year maturities.

Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by multiple licensees under common management is $350,000 and the maximum amount that a single SBIC licensee may issue is $150,000. As of June 30, 2017, SBIC IV, SBIC V and SBIC VI had $150,000, $133,000 and $5,000, respectively, of outstanding SBA-guaranteed debentures that mature between March 2021 and September 2027, leaving incremental borrowing capacity of $17,000 and $45,000 for SBIC V and SBIC VI, respectively, under present SBIC regulations. As of September 30, 2016, SBIC IV and SBIC V had $150,000 and $127,000, respectively, of outstanding SBA-guaranteed debentures that mature between March 2021 and September 2026.

The interest rate on $283,000 of outstanding debentures as of June 30, 2017 is fixed at an average annualized interest rate of 3.5%. The annualized interim financing rate on the remaining $5,000 of outstanding debentures was 2.0% as of June 30, 2017. For the three and nine months ended June 30, 2017 and 2016, the components of interest expense, cash paid for interest, annualized average interest rates and average outstanding balances for the SBA debentures were as follows:



	For the three months ended June 30,						For the nine months ended June 30,
	2017			2016			2017			2016
Stated interest expense	$	2,473		$	2,140		$	7,339		$	6,284
Amortization of debt issuance costs	320			455			1,032			1,386
Total interest and other debt financing expenses	$	2,793		$	2,595		$	8,371		$	7,670
Cash paid for interest expense	$	—		$	—		$	4,764		$	4,083
Annualized average stated interest rate	3.5		%	3.6		%	3.5		%	3.6		%
Average outstanding balance	$	284,594		$	241,967		$	282,366		$	230,883

Revolving Credit Facility: On July 21, 2011, Funding entered into a senior secured revolving credit facility (as amended, the “Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent and lender, which as of June 30, 2017, allowed Funding to borrow up to $225,000 at any one time outstanding, subject to leverage and borrowing base restrictions.

On March 1, 2016 the Credit Facility was amended to, among other things, make certain amendments to the computation of the borrowing base restrictions in the Credit Facility. The maximum borrowing capacity under the Credit Facility, the expiration of the reinvestment period and the stated maturity date of the Credit Facility did not change in connection with this amendment.

On May 2, 2017, the Company and Funding amended the Credit Facility to, among other things, increase the size of the Credit Facility from $200,000 to $225,000 and allowed for the addition of a third lender under the facility.

Through the reinvestment period, which as of June 30, 2017 ended July 29, 2017, the Credit Facility bears interest at one-month LIBOR plus 2.25% per annum. After the reinvestment period, through the stated maturity date of July 30, 2020, the rate will reset to one-month LIBOR plus 2.75% per annum for the remaining term of the Credit Facility. In addition to the stated interest rate on the Credit Facility, the Company is required to pay a non-usage fee at a rate between 0.50% and 2.00% per annum depending on the size of the unused portion of the Credit Facility.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

The Credit Facility is collateralized by all of the assets held by Funding, and GBDC has pledged its interests in Funding as collateral to Wells Fargo Bank, N.A., as the collateral agent, under an ancillary agreement to secure the obligations of GBDC as the transferor and servicer under the Credit Facility. Both GBDC and Funding have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the Credit Facility is subject to the leverage restrictions contained in the 1940 Act.

The Company has transferred certain loans and debt securities it has originated or acquired from time to time to Funding through a purchase and sale agreement and may cause Funding to originate or acquire loans in the future, consistent with the Company’s investment objectives.

As of June 30, 2017 and September 30, 2016, the Company had outstanding debt under the Credit Facility of $144,400 and $126,700, respectively. For the three and nine months ended June 30, 2017, the Company had borrowings on the Credit Facility of $181,600 and $408,350 and repayments on the Credit Facility of $166,850 and $390,650, respectively. For the three and nine months ended June 30, 2016, the Company had borrowings on the Credit Facility of $93,300 and $248,550 and repayments on the Credit Facility of $94,800 and $229,750, respectively.

For the three and nine months ended June 30, 2017 and 2016, the components of interest expense, cash paid for interest and facility fees, annualized average interest rates and average outstanding balances for the Credit Facility were as follows:



	For the three months ended June 30,						For the nine months ended June 30,
	2017			2016			2017			2016
Stated interest expense	$	1,237		$	953		$	3,475		$	2,629
Facility fees	109			78			242			288
Amortization of debt issuance costs	297			332			785			967
Total interest and other debt financing expenses	$	1,643		$	1,363		$	4,502		$	3,884
Cash paid for interest expense and facility fees	$	1,324		$	1,019		$	3,606		$	2,866
Annualized average stated interest rate	3.3		%	2.7		%	3.1		%	2.7		%
Average outstanding balance	$	148,087		$	139,817		$	148,956		$	131,251

Revolvers: On November 22, 2013, Revolver Funding entered into a $15,000 revolving line of credit (as amended, the “Revolver”), which could have been increased up to $30,000, with The PrivateBank and Trust Company. On October 21, 2015, the Company and Revolver Funding terminated the Revolver. There were no borrowings outstanding on the Revolver at the time of termination and Revolver Funding was released of all obligations under the Revolver and all liens on the assets held by Revolver Funding collateralizing the Revolver were released.

The Revolver was collateralized by all of the assets held by Revolver Funding. Both GBDC and Revolver Funding made customary representations and warranties and were required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowing under the Revolver was subject to the leverage restrictions contained in the 1940 Act. In addition, the Company paid a fee of 0.25% per annum on any unused portion of the Revolver.

The revolver was not in existence for the three months and nine months ended June 30, 2017. For the three months ended June 30, 2016, the revolver was not in existence and the Company did not incur any expense. For the nine months ended June 30, 2016, the weighted average outstanding balance was $0, cash paid for facility fees was $2 and total interest expense of $36 included $2 of facility fees and $34 of amortization of deferred debt issuance costs.

On June 22, 2016, the Company entered into the Adviser Revolver with the Investment Adviser, with a maximum credit limit of $20,000 and expiration date of June 22, 2019. The Adviser Revolver bears an interest rate equal to the short-term

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Applicable Federal Rate, which was 1.2% as of June 30, 2017. As of June 30, 2017 and September 30, 2016, the Company had no outstanding debt under the Adviser Revolver. For the three and nine months ended June 30, 2017, the Company had no borrowings and repayments, did not incur any interest expense and no cash was paid for interest on the Adviser Revolver. For the three and nine months ended June 30, 2016, the annualized average stated interest rate was 0.7% on average outstanding borrowings of $104, interest expense was an amount less than $1 and cash paid for interest was an amount less than $1. For the three and nine months ended June 30, 2016, the Company had borrowings on the Adviser Revolver of $9,500 and repayments on the Adviser Revolver of $9,500.

The average total debt outstanding (including the debt under the 2010 Debt Securitization, the 2014 Debt Securitization, SBA debentures, Credit Facility and Adviser Revolver) for the three and nine months ended June 30, 2017 was $883,681 and $883,018, respectively. The average total debt outstanding (including the debt under the 2010 Debt Securitization, the 2014 Debt Securitization, SBA debentures, Credit Facility, Revolver and Adviser Revolver) for the three and nine months ended June 30, 2016 was $842,888 and $823,169, respectively.

For the three and nine months ended June 30, 2017, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company’s total debt outstanding (excluding secured borrowings) was 3.7% and 3.5%, respectively. For the three and nine months ended June 30, 2016, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company’s total debt outstanding (excluding secured borrowings) was 3.3% and 3.3%, respectively.

A summary of the Company’s maturity requirements for borrowings as of June 30, 2017 is as follows:



	Payments Due by Period
	Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More Than 5 Years
2010 Debt Securitization	$	205,000	$	—	$	—	$	—	$	205,000
2014 Debt Securitization	246,000		—		—		—		246,000
SBA debentures	288,000		—		—		100,000		188,000
Credit Facility	144,400		—		—		144,400		—
Adviser Revolver	—		—		—		—		—
Total borrowings	$	883,400	$	—	$	—	$	244,400	$	639,000

Secured Borrowings: Certain partial loan sales do not qualify for sale accounting under ASC Topic 860 because these sales do not meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain as an investment on the consolidated statement of financial condition and the portion sold is recorded as a secured borrowing in the liabilities section of the consolidated statement of financial condition. For these partial loan sales, the interest earned on the entire loan balance is recorded within “interest income” and the interest earned by the buyer in the partial loan sale is recorded within “interest and other debt financing expenses” in the consolidated statement of operations.

As of June 30, 2017 and September 30, 2016, the Company recognized secured borrowings at fair value of $406 and $475, respectively, and the fair values of the loans that are associated with these secured borrowings was $2,182 and $2,305, respectively.

These secured borrowings were the result of the Company’s completion of partial loan sales of one stop loans associated with a portfolio company that did not meet the definition of a “participating interest.” As a result, sale treatment was not allowed and the partial loan sales were treated as secured borrowings.

During the three and nine months ended June 30, 2017, there were no partial loan sales, no fundings on revolving and delayed draw secured borrowings and repayments on secured borrowings totaled $42 and $69, respectively. During the

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

three and nine months ended June 30, 2016, there were no partial loan sales, no fundings on revolving and delayed draw secured borrowings and repayments on secured borrowings totaled $8 and $29.

For the three and nine months ended June 30, 2017, the effective annualized average interest rate on secured borrowings, which includes amortization of original issuance costs, was 2.9% and 2.7%, respectively and interest expense was $3 and $9 and amortization of original issue discount was an amount less than $1and $1, respectively. For the three and nine months ended June 30, 2016, the effective annualized average interest rate on secured borrowings, which includes amortization of original issuance costs, was 4.6% and 4.6%, interest expense was $3 and $11 and amortization of original issue discount was $1 and $1, respectively.

Note 8. Commitments and Contingencies

Commitments: The Company had outstanding commitments to fund investments totaling $70,412 and $81,417 under various undrawn revolvers and other credit facilities as of June 30, 2017 and September 30, 2016, respectively. As described in Note 4, the Company had commitments of up to $61,880 and $66,360 to SLF as of June 30, 2017 and September 30, 2016, respectively, that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee.

Indemnifications: In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as these involve future claims that may be made against the Company but that have not occurred. The Company expects the risk of any future obligations under these indemnifications to be remote.

Off-balance sheet risk: Off-balance sheet risk refers to an unrecorded potential liability that may result in a future obligation or loss, even though it does not appear on the consolidated statements of financial condition. The Company has entered and, in the future, may again enter into derivative instruments that contain elements of off-balance sheet market and credit risk. There were no commitments outstanding for derivative contracts as of June 30, 2017 and September 30, 2016. Derivative instruments can be affected by market conditions, such as interest rate volatility, which could impact the fair value of the derivative instruments. If market conditions move against the Company, it may not achieve the anticipated benefits of the derivative instruments and may realize a loss. The Company minimizes market risk through monitoring its investments and borrowings.

Concentration of credit and counterparty risk: Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of the contract. The Company has engaged and, in the future, may engage again in derivative transactions with counterparties. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments. The Company’s maximum loss that it could incur related to counterparty risk on its derivative instruments is the value of the collateral for that respective derivative instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

Legal proceedings: In the normal course of business, the Company may be subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company does not believe any disposition will have a material adverse effect on the Company’s consolidated financial statements.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Note 9. Financial Highlights

The financial highlights for the Company are as follows:



	Nine months ended June 30,
Per share data:⁽¹⁾	2017			2016
Net asset value at beginning of period	$	15.96		$	15.80
Net increase in net assets as a result of issuance of shares⁽²⁾	0.01			0.01
Net increase in net assets as a result of public offering	0.18			—
Dividends and distributions declared:
From net investment income	(1.19		)	(0.72		)
From capital gains	(0.02		)	(0.24		)
Net investment income⁽³⁾	0.92			0.93
Net realized gain (loss) on investments	(0.03		)	(0.01		)
Net change in unrealized appreciation (depreciation) on investments	0.18			0.11
Net asset value at end of period	$	16.01		$	15.88
Per share market value at end of period	$	19.12		$	18.07
Total return based on market value⁽⁴⁾	10.01		%	19.79		%
Number of common shares outstanding	59,235,174			51,623,325



	Nine months ended June 30,
Listed below are supplemental data and ratios to the financial highlights:	2017			2016
Ratio of net investment income to average net assets^*	7.70		%	7.82		%
Ratio of total expenses to average net assets ^(5)*	7.73		%	7.24		%
Ratio of incentive fees to average net assets	0.94		%	0.52		%
Ratio of expenses (without incentive fees) to average net assets^*	6.79		%	6.72		%
Total return based on average net asset value^(6)*	8.98		%	8.70		%
Net assets at end of period	$	948,219		$	819,981
Average debt outstanding	$	883,018		$	823,169
Average debt outstanding per share	$	14.91		$	15.95
Asset coverage ratio⁽⁷⁾	258.36		%	234.46		%
Portfolio turnover^*	26.03		%	32.73		%

* Annualized for a period less than one year


⁽¹⁾	Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.


⁽²⁾	Net increase in net assets as a result of issuance of shares related to shares issued through the DRIP.


⁽³⁾	Net investment income per share for the nine months ended June 30, 2017 and 2016 is shown after a net expense of $17 and $333, respectively, for U.S. federal excise tax.


⁽⁴⁾	Total return based on market value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.


⁽⁵⁾	Expenses, other than incentive fees, are annualized for periods of less than one year.


⁽⁶⁾	Total return based on average net asset value is calculated as (a) the net increase in net assets resulting from operations divided (b) the daily average of total net assets. Total return does not include sales load.


⁽⁷⁾	In accordance with the 1940 Act, with certain limited exceptions (including the Company's exemptive relief related to SBA debentures), the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing.

Golub Capital BDC, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except shares and per share data)

Note 10. Earnings Per Share

The following information sets forth the computation of the net increase in net assets per share resulting from operations for the three and nine months ended June 30, 2017 and 2016:



	Three months ended June 30,				Nine months ended June 30,
	2017		2016		2017		2016
Earnings available to stockholders	$	20,111	$	18,289	$	59,835	$	53,105
Basic and diluted weighted average shares outstanding	57,719,505		51,513,685		56,058,642		51,399,363
Basic and diluted earnings per share	$	0.35	$	0.35	$	1.07	$	1.03

Note 11. Dividends and Distributions

The Company’s dividends and distributions are recorded on the ex-dividend date. The following table summarizes the Company’s dividend declarations and distributions during the nine months ended June 30, 2017 and 2016:



Date Declared		Record Date	Payment Date	Amount Per Share			Cash Distribution		DRIP Shares Issued	DRIP Shares Value
Nine months ended June 30, 2016
	05/03/2016	06/06/2016	06/29/2016	$	0.32		$	14,558	112,104	$	1,926
	02/02/2016	03/07/2016	03/30/2016	$	0.32		$	14,287	131,434	$	2,155
	11/17/2015	12/11/2015	12/29/2015	$	0.32		$	15,149	79,594	$	1,267
Nine months ended June 30, 2017
	05/04/2017	06/06/2017	06/29/2017	$	0.32		$	16,186	119,251	$	2,171
	02/07/2017	03/07/2017	03/30/2017	$	0.32		$	15,509	116,386	$	2,167
	11/14/2016	12/12/2016	12/29/2016	$	0.57	⁽¹⁾	$	28,239	177,970	$	3,145


⁽¹⁾	Includes a special distribution of $0.25 per share.

Note 12. Subsequent Events

On July 5, 2017, the Company sold an additional 220,221 shares of its common stock pursuant to the underwriter's partial exercise of the option the Company granted in connection with its June 6, 2017 sale of 1,750,000 shares of common stock pursuant to an underwritten public offering. Settlement of this partial exercise of the option resulted in net proceeds, after underwriting costs, of $4,120.

On July 28, 2017, Funding entered into an amendment, or the Credit Facility Amendment, to the documents governing the Credit Facility. The Credit Facility Amendment was effective as of July 28, 2017. The Credit Facility Amendment, among other things, (a) extended the expiration of the reinvestment period from July 29, 2017 to September 27, 2017, during which period Funding, subject to certain conditions, may make borrowings under the facility and (b) extended the stated maturity date to September 28, 2020. The size, interest rate and other material terms of the Credit Facility were unchanged.

On August 2, 2017, the Company’s Board declared a quarterly dividend of $0.32 per share payable on September 29, 2017 to holders of record as of September 6, 2017.

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

The information contained in this section should be read in conjunction with our interim and unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, “we,” “us,” “our” and “Golub Capital BDC” refer to Golub Capital BDC, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:


•	our future operating results;


•	our business prospects and the prospects of our portfolio companies;


•	the effect of investments that we expect to make and the competition for those investments;


•	our contractual arrangements and relationships with third parties;


•	actual and potential conflicts of interest with GC Advisors LLC, or GC Advisors, and other affiliates of Golub Capital LLC, collectively, Golub Capital;


•	the dependence of our future success on the general economy and its effect on the industries in which we invest;


•	the ability of our portfolio companies to achieve their objectives;


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


•	the adequacy of our financing sources and working capital;


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


•	general economic and political trends and other external factors;


•	the ability of GC Advisors to locate suitable investments for us and to monitor and administer our investments;


•	the ability of GC Advisors or its affiliates to attract and retain highly talented professionals;


•	our ability to qualify and maintain our qualification as a regulated investment company, or RIC,

and as a business development company;


•	general price and volume fluctuations in the stock markets;


•	the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations issued thereunder and any actions toward repeal thereof; and


•	the effect of changes to tax legislation and our tax position.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The forward looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth elsewhere in this quarterly report on Form 10-Q and as “Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2016.

We have based the forward-looking statements included in this report on information available to us on the date of this report. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. 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 Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K. This quarterly report on Form 10-Q contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.

Overview

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a business development company and a RIC, we are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code.

Our shares are currently listed on The NASDAQ Global Select Market under the symbol “GBDC”.

Our investment objective is to generate current income and capital appreciation by investing primarily in senior secured and one stop loans of U.S. middle-market companies. We may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in U.S. middle-market companies. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, a leading lender to U.S. middle-market companies with over $20.0 billion in capital under management as of June 30, 2017, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, in many cases with whom Golub Capital has invested alongside in the past, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital.

Our investment activities are managed by GC Advisors and supervised by our board of directors of which a majority of the members are independent of us, GC Advisors and its affiliates.

Under an investment advisory agreement, or the Investment Advisory Agreement, which was most recently reapproved by our board of directors in May 2017, we have agreed to pay GC Advisors an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. Under an administration agreement, or the Administration Agreement, we are provided with certain administrative services by an administrator, or the Administrator, which is currently Golub Capital LLC.

Under the Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement.

We seek to create a portfolio that includes primarily senior secured and one stop loans by primarily investing approximately $5.0 million to $30.0 million of capital, on average, in the securities of U.S. middle-market companies. We may also selectively invest more than $30.0 million in some of our portfolio companies and generally expect that the size of our individual investments will vary proportionately with the size of our capital base.

We generally invest in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities, which may be referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of our debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity, which may increase our risk of losing part or all of our investment.

As of June 30, 2017 and September 30, 2016, our portfolio at fair value was comprised of the following:



	As of June 30, 2017					As of September 30, 2016
Investment Type	Investments at Fair Value (In thousands)		Percentage of Total Investments			Investments at Fair Value (In thousands)		Percentage of Total Investments
Senior secured	$	192,123	10.7	%		$	162,849	9.8	%
One stop	1,429,917		79.4			1,304,467		78.5
Second lien	9,434		0.5			27,909		1.7
Subordinated debt	58		0.0		*	1,427		0.1
Subordinated notes in SLF⁽¹⁾⁽²⁾	—		—			77,301		4.7
LLC equity interests in SLF⁽²⁾	108,879		6.0			26,927		1.6
Equity	61,397		3.4			59,732		3.6
Total	$	1,801,808	100.0	%		$	1,660,612	100.0	%



*	Represents an amount less than 0.1%.


⁽¹⁾	On December 30, 2016, Senior Loan Fund LLC, or SLF, issued a capital call in an aggregate amount of $89.9 million the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by SLF and terminate all remaining subordinated note commitments.


⁽²⁾	Proceeds from the subordinated notes and limited liability company, or LLC, equity interests invested in SLF were utilized by SLF to invest in senior secured loans.

One stop loans include loans to technology companies undergoing strong growth due to new services, increased adoption and/or entry into new markets. We refer to loans to these companies as late stage lending loans. Other targeted characteristics of late stage lending businesses include strong customer revenue retention rates, a diversified customer base and backing from growth equity or venture capital firms. In some cases, the borrower’s high revenue growth is supported by a high level of discretionary spending. As part of the underwriting of such loans and consistent with industry practice, we may adjust our characterization of the earnings of such borrowers for a reduction or elimination of such discretionary expenses, if appropriate. As of June 30, 2017 and September 30, 2016, one stop loans included $137.4 million and $128.4 million, respectively, of late stage lending loans at fair value.

As of June 30, 2017 and September 30, 2016, we had debt and equity investments in 188 and 183 portfolio companies, respectively, and an investment in SLF.

The weighted average annualized income yield and weighted average annualized investment income yield of our earning portfolio company investments, which represented nearly 100% of our debt investments, for the three and nine months ended June 30, 2017 and 2016 was as follows:



	For the three months ended June 30,		For the nine months ended June 30,
	2017	2016	2017	2016
Weighted average annualized income yield ⁽¹⁾⁽³⁾	7.9%	7.6%	7.8%	7.6%
Weighted average annualized investment income yield ⁽²⁾⁽³⁾	8.7%	8.2%	8.4%	8.1%


⁽¹⁾	Represents income from interest, including subordinated notes in SLF, and fees excluding amortization of capitalized fees and discounts divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.


⁽²⁾	Represents income from interest, including subordinated notes in SLF, fees and amortization of capitalized fees and discounts divided by the average fair value of earning portfolio investments, and does not represent a return to any investor in us.


⁽³⁾	For the three months ended June 30, 2017, weighted average annualized income yield and weighted average annualized investment income yield do not reflect interest income from subordinated notes in SLF, which were redeemed on December 30, 2016.

The total return, based on the change in the quoted market price of our stock and assuming distributions were reinvested in accordance with the dividend reinvestment plan, or DRIP, for the nine months ended June 30, 2017 and 2016, was 10.0% and 19.8%, respectively. The total return does not include sales load.

Revenues: We generate revenue in the form of interest and fee income on debt investments and capital gains and distributions, if any, on portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior secured, one stop, second lien or subordinated loans, typically have a term of three to seven years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments provide for deferred interest payments or payment-in-kind, or PIK, interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. In addition, we may generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. For additional details on revenues, see “Critical Accounting Policies-Revenue Recognition.”

We recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the cost basis of the investment or derivative instrument, without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments and derivative instruments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Expenses: Our primary operating expenses include the payment of fees to GC Advisors under the Investment Advisory Agreement and interest expense on our outstanding debt. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:


•	calculating our net asset value, or NAV (including the cost and expenses of any independent valuation firm);

•

fees and expenses incurred by GC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments, which fees and expenses may include, among other items, due diligence reports, appraisal reports, any studies that may be commissioned by GC Advisors and travel and lodging expenses;


•	expenses related to unsuccessful portfolio acquisition efforts;


•	offerings of our common stock and other securities;


•	administration fees and expenses, if any, payable under the Administration Agreement (including payments based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);


•	fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting financial sponsors;


•	transfer agent, dividend agent and custodial fees and expenses;


•	U.S. federal and state registration and franchise fees;


•	all costs of registration and listing our shares on any securities exchange;


•	U.S. federal, state and local taxes;


•	independent directors’ fees and expenses;


•	costs of preparing and filing reports or other documents required by the SEC or other regulators;


•	costs of any reports, proxy statements or other notices to stockholders, including printing costs;


•	costs associated with individual or group stockholders;


•	costs associated with compliance under the Sarbanes-Oxley Act;


•	our allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;


•	direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;


•	proxy voting expenses; and


•	all other expenses incurred by us or the Administrator in connection with administering our business.

We expect our general and administrative expenses to be relatively stable or decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

GC Advisors, as collateral manager for Golub Capital BDC 2010-1 LLC, or the 2010 Issuer, our indirect subsidiary, under a collateral management agreement, or the 2010 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the 2010 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2010 Collateral Management Agreement, the term ‘‘collection period’’ refers to a quarterly period running from the day after the end of the prior collection period to the fifth business day of the calendar month in which a payment date occurs.

GC Advisors, as collateral manager for Golub Capital BDC CLO 2014 LLC, or the 2014 Issuer, our wholly-owned subsidiary, under a collateral management agreement, or the 2014 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the 2014 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2014 Collateral Management Agreement, the term ‘‘collection period’’ refers to a quarterly period running from the day after the end of the prior collection period to the tenth business day prior to the payment date.

Collateral management fees are paid directly by the 2010 Issuer and the 2014 Issuer to GC Advisors and offset against the management fees payable under the Investment Advisory Agreement. In addition, the 2010 Issuer and 2014 Issuer paid Wells Fargo Securities, LLC structuring and placement fees for its services in connection with the initial structuring and subsequent amendments of a $350.0 million term debt securitization, or the 2010 Debt Securitization, and the initial structuring of a $402.6 million term debt securitization, or the 2014 Debt Securitization and, together with the 2010 Debt Securitization, the Debt Securitizations. The 2010 Issuer and 2014 Issuer also agreed to pay ongoing administrative expenses to the trustee, collateral manager, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2010 Debt Securitization and the 2014 Debt Securitization, or, collectively, the Debt Securitizations, as applicable.

We believe that these administrative expenses approximate the amount of ongoing fees and expenses that we would be required to pay in connection with a traditional secured credit facility. Our common stockholders indirectly bear all of these expenses.

Recent Developments

On July 5, 2017, we sold an additional 220,221 shares of our common stock pursuant to the underwriter's partial exercise of the option we granted in connection with our June 6, 2017 sale of 1,750,000 shares of common stock in an underwritten, public offering. Settlement of this partial exercise of the option resulted in net proceeds, after underwriting costs, of $4.1 million.

On July 28, 2017, Golub Capital BDC Funding LLC, or Funding, our wholly-owned subsidiary, entered into an amendment, or the Credit Facility Amendment, to the documents governing the senior secured revolving credit

facility, or, amended, the Credit Facility, with Golub Capital BDC Inc., as the transferor and servicer, certain institutional lenders, and Wells Fargo Bank, N.A., as the swingline lender, collateral agent, account bank, collateral custodian, and administrative agent. The Credit Facility Amendment is effective as of July 28, 2017. The Credit Facility Amendment, among other things, (a) extended the expiration of the reinvestment period from July 29, 2017 to September 27, 2017, during which period Funding, subject to certain conditions, may make borrowings under the facility and (b) extended the stated maturity date from July 30, 2020 to September 28, 2020. The size, interest rate and other material terms of the Credit Facility were unchanged.

On August 2, 2017, our board of directors declared a quarterly distribution of $0.32 per share payable on September 29, 2017 to holders of record as of September 6, 2017.

Consolidated Results of Operations

Consolidated operating results for the three and nine months ended June 30, 2017 and 2016 are as follows:



	For the three months ended June 30,						Variances			For the nine months ended June 30,						Variances
	2017			2016			2017 vs. 2016			2017			2016			2017 vs. 2016
	(In thousands)									(In thousands)
Interest income	$	30,079		$	26,858		$	3,221		$	88,468		$	78,082		$	10,386
Income from accretion of discounts and origination fees	3,170			2,210			960			6,793			5,896			897
Interest and dividend income from investments in SLF ⁽¹⁾	891			2,867			(1,976		)	5,693			8,163			(2,470		)
Dividend income	278			111			167			438			393			45
Fee income	990			60			930			1,422			834			588
Total investment income	35,408			32,106			3,302			102,814			93,368			9,446
Total expenses	17,600			16,221			1,379			51,489			45,283			6,206
Net investment income - before excise tax	17,808			15,885			1,923			51,325			48,085			3,240
Excise tax	—			—			—			17			333			(316		)
Net investment income - after excise tax	17,808			15,885			1,923			51,308			47,752			3,556
Net realized gain (loss) on investments	(3,209		)	(5,416		)	2,207			(1,616		)	(260		)	(1,356		)
Net change in unrealized appreciation (depreciation) on investments, and secured borrowings	5,512			7,820			(2,308		)	10,143			5,613			4,530
Net increase in net assets resulting from operations	$	20,111		$	18,289		$	1,822		$	59,835		$	53,105		$	6,730
Average earning debt investments, at fair value ⁽²⁾	$	1,579,961		$	1,439,936		$	140,025		$	1,546,012		$	1,395,699		$	150,313
Average investment in subordinated notes of SLF, at fair value	—			84,918			(84,918		)	25,760			82,919			(57,159		)
Average earning portfolio company investments, at fair value ⁽²⁾	$	1,579,961		$	1,524,854		$	55,107		$	1,571,772		$	1,478,618		$	93,154


⁽¹⁾	The investments in SLF include our investments in both subordinated notes and LLC equity interests in SLF for the three and nine months ended June 30, 2016 and the nine months ended June 30, 2017. For the three months ended June 30, 2017, the investments in SLF include our investment in LLC equity interests in SLF.


⁽²⁾	Does not include our investment in LLC equity interests in SLF.

Net income can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.

Investment Income

Investment income increased from the three months ended June 30, 2016 to the three months ended June 30, 2017 by $3.3 million primarily as a result of an increase in the average earning debt investment balance, which is the

average balance of accruing loans in our investment portfolio, excluding our investment in the subordinated notes of SLF, of $140.0 million and increases in prepayment fee income and accretion of discounts resulting from increased debt investment payoffs. These increases were partially offset by a decline in income from our investments in SLF that was attributable to a decline in the credit performance of SLF's portfolio.

Investment income increased from the nine months ended June 30, 2016 to the nine months ended June 30, 2017 by $9.4 million primarily as a result of an increase in the average earning debt investment balance in our investment portfolio of $150.3 million and increases in prepayment fee income and accretion of discounts resulting from increased debt investment payoffs. These increases were partially offset by a decline in income from our investments in SLF that was attributable to a decline in the credit performance of SLF's portfolio.

The annualized income yield by debt security type for the three and nine months ended June 30, 2017 and 2016 was as follows:



	For the three months ended June 30,		For the nine months ended June 30,
	2017	2016	2017	2016
Senior secured	6.4%	6.3%	6.3%	6.3%
One stop	8.0%	7.6%	7.9%	7.7%
Second lien	9.9%	10.1%	10.5%	9.7%
Subordinated debt	8.5%	4.8%	8.0%	5.1%
Subordinated notes in SLF⁽¹⁾	N/A	8.5%	8.5%	8.4%


⁽¹⁾	SLF’s proceeds from the subordinated notes were utilized by SLF to invest in senior secured loans.

Annualized income yields on one stop and senior secured loans remained relatively stable for the three and nine months ended June 30, 2017 compared to the three and nine months ended June 30, 2016. Due to the limited number of second lien and subordinated debt investments, quarterly income yields on second lien and subordinated debt investments can be significantly impacted by the addition, subtraction or refinancing of one investment. The increase in the annualized income yield on second lien investments for the nine months ended June 30, 2017 was driven by a contractual rate change on one investment representing 50% of the second lien investments. This investment subsequently paid off during the three months ended June 30, 2017, which resulted in the decrease in the annualized income yield on second lien investments for the three months ended June 30, 2017. The increase in the annualized income yield on subordinated debt investments for the three and nine months ended June 30, 2017 was driven by the payoff on the lower yielding subordinated debt investment. As of June 30, 2017, we have one second lien investment and one subordinated debt investment as shown in the consolidated schedule of investments.

For additional details on investment yields and asset mix, refer to the “Liquidity and Capital Resources - Portfolio Composition, Investment Activity and Yield” section below.

Expenses

The following table summarizes our expenses:



	For the three months ended June 30,				Variances			For the nine months ended June 30,				Variances
	2017		2016		2017 vs. 2016			2017		2016		2017 vs. 2016
	(In thousands)							(In thousands)
Interest and other debt financing expenses	$	7,256	$	6,042	$	1,214		$	20,891	$	17,356	$	3,535
Amortization of debt issuance costs	843		977		(134		)	2,488		3,227		(739		)
Base management fee	6,059		5,567		492			17,744		16,286		1,458
Income Incentive Fee	1,485		1,750		(265		)	4,300		2,877		1,423
Capital gain incentive fee accrued under GAAP	588		561		27			1,974		1,385		589
Professional fees	638		692		(54		)	1,935		2,123		(188		)
Administrative service fee	595		531		64			1,720		1,643		77
General and administrative expenses	136		101		35			437		386		51
Total expenses	$	17,600	$	16,221	$	1,379		$	51,489	$	45,283	$	6,206
Average debt outstanding⁽¹⁾	$	883,681	$	842,888	$	40,793		$	883,018	$	823,169	$	59,849

⁽¹⁾

For the three and nine months ended June 30, 2017 and 2016, we have excluded $0.4 million and $0.3 million, respectively, of secured borrowings, at fair value, which were the result of participations and partial loan sales that did not meet the definition of a “participating interest”, as defined in the guidance to Accounting Standards Codification, or ASC, Topic 860 — Transfers and Servicing, or ASC Topic 860.

Interest Expense

Interest and other debt financing expenses increased by $1.2 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 primarily due to an increase in the weighted average of outstanding borrowings from $842.9 million for the three months ended June 30, 2016 to $883.7 million for the three months ended June 30, 2017 and an increase in the average London Interbank Offered Rate, or LIBOR, which is the index that determines the interest rate on our floating rate liabilities. The increase in our debt was primarily driven by an increase in our use of debt under our United States Small Business Administration, or SBA, debentures through our small business investment companies, or SBICs, which had outstanding balances of $288.0 million as of June 30, 2017 and $255.0 million as of June 30, 2016. This was partially offset by our Credit Facility which decreased to an outstanding balance of $144.4 million as of June 30, 2017 from an outstanding balance of $146.1 million as of June 30, 2016. The effective annualized average interest rate on our outstanding debt increased to 3.7% for the three months ended June 30, 2017 from 3.3% for the three months ended June 30, 2016 primarily due to the increase in LIBOR.

Interest and other debt financing expenses increased by $3.5 million from the nine months ended June 30, 2016 to the nine months ended June 30, 2017 primarily due to an increase in the weighted average of outstanding borrowings from $823.2 million for the nine months ended June 30, 2016 to $883.0 million for the nine months ended June 30, 2017. The effective annualized average interest rate on our outstanding debt increased to 3.5% for the nine months ended June 30, 2017 from 3.3% for the nine months ended June 30, 2016 primarily due to the increase in LIBOR.

Management Fee

The base management fee increased as a result of a sequential increase in average assets from June 30, 2016 to June 30, 2017.

Incentive Fees

The incentive fee payable under the Investment Advisory Agreement consists of two parts: (1) the income component, or the Income Incentive Fee, and (2) the capital gains component, or the Capital Gain Incentive Fee. The Income Incentive Fee decreased by $0.3 million from the three months ended June 30, 2016 to the three months ended June 30, 2017 primarily as a result of the increase in the interest and debt financing expenses and the decline in income from our investment in SLF. This resulted in a decline in the rate of return on the value of our net assets and for the three months ended June 30, 2017. For the three months ended June 30, 2017, while still not fully through the catch-up provision of the Income Incentive Fee calculation, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income (as defined below) decreased to 7.5% compared to 9.6% for the three months ended June 30, 2016. The Income Incentive Fee increased by $1.4 million from the nine months ended June 30, 2016 to the nine months ended June 30, 2017 primarily as a result of the $150.3 million increases in our average earning debt investment balances that resulted in an increase in our Pre-Incentive Fee Net Investment Income. For the nine months ended June 30, 2017, while still not fully through the catch-up provision of the Income Incentive Fee calculation in any quarter, the Income Incentive Fee as a percentage of Pre-Incentive Fee Net Investment Income increased to 7.5% compared to 5.5% for the nine months ended June 30, 2016. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies, but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that we have not yet received in cash.

The Capital Gain Incentive Fee payable as calculated under the Investment Advisory Agreement for each of the three and nine months ended June 30, 2017 and 2016 was $0. However, in accordance with generally accepted accounting principles in the United States of America, or GAAP, we are required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement.

The accrual for capital gain incentive fee under GAAP was $0.6 million, or $0.01 per share, and $2.0 million, or $0.04 per share, for the three and nine months ended June 30, 2017, respectively. We recorded an accrual for capital gain incentive fee under GAAP of $0.6 million, or $0.01 per share, and recorded an accrual of $1.4 million, or $0.03 per share, for the three and nine months ended June 30, 2016, respectively. The increase in the accrual for capital gain incentive fee under GAAP for the nine months ended June 30, 2017 from the nine months ended June 30, 2016 was primarily the result of increased unrealized appreciation on portfolio company investments. For additional details on unrealized appreciation and depreciation of investments, refer to the “Net Realized and Unrealized Gains and Losses” section below.

Professional Fees, Administrative Service Fee, and General and Administrative Expenses

In total, professional fees, the administrative service fee, and general and administrative expenses increased from the three months ended June 30, 2016 to the three months ended June 30, 2017 by an amount less than $0.1 million and decreased by $0.1 million from the nine months ended June 30, 2016 to the nine months ended June 30, 2017. In general, we expect certain of our operating expenses, including professional fees, the administrative service fee, and other general and administrative expenses to decline as a percentage of our total assets during periods of growth and increase as a percentage of our total assets during periods of asset declines.

The Administrator pays for certain expenses incurred by us. These expenses are subsequently reimbursed in cash. Total expenses reimbursed by us to the Administrator for the three and nine months ended June 30, 2017 were $0.4

million and $1.7 million, respectively. Total expenses reimbursed by us to the Administrator for the three and nine months ended June 30, 2016 were $0.7 million and $2.1 million, respectively.

As of June 30, 2017 and September 30, 2016, included in accounts payable and accrued expenses were $0.5 million and $0.6 million, respectively, for accrued expenses paid on behalf of us by the Administrator.

Excise Tax Expense

We have elected to be treated as a RIC under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, we are required to meet certain source of income and asset diversification requirements, as well as timely distribute to our stockholders dividends for U.S. federal income tax purposes of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code, and determined without regard to any deduction for dividends paid for each tax year. We have made and intend to continue to make the requisite distributions to our stockholders that will generally relieve us from U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year distributions into the next tax year in an amount less than what would trigger payments of U.S. federal income tax under Subchapter M of the Code. We may then be required to incur a 4% excise tax on such income. To the extent that we determine that our estimated current year annual taxable income may exceed estimated current year distributions, we accrue excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and nine months ended June 30, 2017, we incurred a net expense of $0 and $17,000, respectively, for U.S. federal excise tax. For the three and nine months ended June 30, 2016, we incurred a net expense of $0 and $333,000, respectively, for U.S. federal excise tax.

Net Realized and Unrealized Gains and Losses

The following table summarizes our net realized and unrealized gains (losses) for the periods presented:



	For the three months ended June 30,						Variances			For the nine months ended June 30,						Variances
	2017			2016			2017 vs. 2016			2017			2016			2017 vs. 2016
	(In thousands)									(In thousands)
Net realized gain (loss) on investments	$	(3,209	)	$	(5,416	)	$	2,207		$	(1,616	)	$	(260	)	$	(1,356	)
Net realized gain (loss)	(3,209		)	(5,416		)	2,207			(1,616		)	(260		)	(1,356		)
Unrealized appreciation on investments	19,206			17,257			1,949			28,465			33,855			(5,390		)
Unrealized (depreciation) on investments	(13,793		)	(10,256		)	(3,537		)	(18,494		)	(26,704		)	8,210
Unrealized appreciation on investments in SLF⁽¹⁾	99			818			(719		)	171			—			171
Unrealized (depreciation) on investments in SLF⁽²⁾	—			—			—			—			(1,539		)	1,539
Unrealized appreciation on secured borrowings	—			1			(1		)	1			1			—
Net change in unrealized appreciation (depreciation) on investments, investments in SLF, and secured borrowings	$	5,512		$	7,820		$	(2,308	)	$	10,143		$	5,613		$	4,530


⁽¹⁾	Unrealized appreciation on investments in SLF includes our investment in LLC equity interests in SLF.


⁽²⁾	Unrealized (depreciation) on investments in SLF includes our investments in subordinated notes and LLC interests in SLF.

For the three months ended June 30, 2017, we had a net realized loss of $3.2 million primarily due to the sale of a debt and equity investment in a single portfolio company, which was partially offset by the gain on the sale of five equity investments. For the nine months ended June 30, 2017, we had a net realized loss of $1.6 million primarily due to the sale of a debt and equity investment in a single portfolio company, which was partially offset by the net realized gains on the sale of portfolio company investments to SLF and the sale of eight equity investments.

For the three months ended June 30, 2017, we had $19.2 million in unrealized appreciation on 118 portfolio company investments, which was partially offset by $13.8 million in unrealized depreciation on 154 portfolio

company investments. For the nine months ended June 30, 2017, we had $28.5 million in unrealized appreciation on 144 portfolio company investments, which was partially offset by $18.5 million in unrealized depreciation on 147 portfolio company investments. Unrealized appreciation during the three and nine months ended June 30, 2017 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments. Unrealized depreciation primarily resulted from the amortization of discounts, negative credit related adjustments that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sales of portfolio company investments during the three and nine months ended June 30, 2017.

For the three and nine months ended June 30, 2017, we had $0.1 million and $0.2 million, respectively, in unrealized appreciation on our investment in SLF LLC equity interests, which was primarily driven by stable net investment income that was partially offset by net negative credit related adjustments associated with SLF's investment portfolio.

For the three months ended June 30, 2016, we had a net realized loss of $5.4 million primarily due to the realized loss on the sale of one non-accrual portfolio company investment that was partially offset by the sale of equity and debt investments. For the nine months ended June 30, 2016, we had a net realized loss of $0.3 million primarily due to the realized loss on the sale of one non-accrual portfolio company investment and the write off of one non-accrual portfolio company investment that were partially offset by the sale of, or capital gain distributions received from, five equity investments.

During the three months ended June 30, 2016, we had $17.3 million in unrealized appreciation on 114 portfolio company investments, which was offset by $10.3 million in unrealized depreciation on 143 portfolio company investments. For the nine months ended June 30, 2016, we had $33.9 million in unrealized appreciation on 135 portfolio company investments, which was offset by $26.7 million in unrealized depreciation on 138 portfolio company investments. Unrealized appreciation during the three and nine months ended June 30, 2016 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments and the reversal of prior period unrealized depreciation associated with the non-accrual portfolio company investments that were sold and written-off. Unrealized depreciation primarily resulted from the amortization of discounts, negative credit related adjustments that caused a reduction in fair value and the reversal of the net unrealized appreciation associated with the sales of portfolio company investments during the three and nine months ended June 30, 2016.

For the three months ended June 30, 2016, we had $0.8 million in unrealized appreciation on our investment in SLF LLC equity interests and an amount less than $0.1 million in unrealized appreciation on our investment in SLF subordinated notes. The unrealized appreciation on the SLF LLC equity interests was driven by positive credit related adjustments associated with SLF’s investment portfolio.

For the nine months ended June 30, 2016, we had $0.7 million of unrealized depreciation on our investment in SLF LLC equity interests and $0.8 million of unrealized depreciation on our investment in SLF subordinated notes. The unrealized depreciation on the SLF subordinated notes was the result of the lower yielding contractual rate compared to comparable market pricing of subordinated notes. The unrealized depreciation on the SLF LLC equity interests was driven by negative credit related adjustments associated with SLF’s investment portfolio which was partially offset by the offsetting impact of the pricing on the subordinated notes.

Liquidity and Capital Resources

For the nine months ended June 30, 2017, we experienced a net increase in cash and cash equivalents of $1.9 million. During the period, cash used in operating activities was $70.7 million, primarily as a result of fundings of portfolio investments of $461.8 million, partially offset by the proceeds from principal payments and sales of portfolio investments of $336.5 million and net investment income of $51.3 million. During the same period, cash provided by investment activities of $45.6 million was primarily driven by the decrease in restricted cash and cash equivalents. Lastly, cash provided by financing activities was $27.0 million, primarily driven by borrowings on debt of $419.4 million and proceeds from shares sold of $69.9 million that were partially offset by repayments of debt of $400.7 million and distributions paid of $59.9 million.

For the nine months ended June 30, 2016, we experienced a net decrease in cash and cash equivalents of $2.3 million. During the period, cash used in operating activities was $38.7 million primarily as a result of funding of portfolio investments of $471.5 million. This was partially offset by the proceeds from principal payments and sales of portfolio investments of $387.3 million and net investment income of $47.8 million. During the same period, cash provided by investment activities of $33.3 million was driven by the decrease in restricted cash and cash equivalents. Lastly, cash provided by financing activities was $3.1 million, primarily driven by borrowings on debt of $288.1 million that were partially offset by repayments of debt of $239.1 million and distributions paid of $44.0 million.

As of June 30, 2017 and September 30, 2016, we had cash and cash equivalents of $12.8 million and $10.9 million, respectively. In addition, we had restricted cash and cash equivalents of $33.0 million and $78.6 million as of June 30, 2017 and September 30, 2016, respectively. Cash and cash equivalents are available to fund new investments, pay operating expenses and pay distributions. As of June 30, 2017, $21.4 million of our restricted cash and cash equivalents could be used to fund new investments that meet the investment guidelines established in the Debt Securitizations, which are described in further detail in Note 7 to our consolidated financial statements, and for the payment of interest expense on the notes issued in the Debt Securitizations. As of June 30, 2017 $4.1 million of our restricted cash and cash equivalents could be used to fund investments that meet the guidelines under the Credit Facility as well as for the payment of interest expense and revolving debt of the Credit Facility. As of June 30, 2017, $7.5 million of our restricted cash and cash equivalents could be used to fund new investments that meet the regulatory and investment guidelines established by the SBA for our SBICs, which are described in further detail in Note 7 to our consolidated financial statements, and for interest expense and fees on our outstanding SBA debentures.

As of June 30, 2017, the Credit Facility allowed Funding to borrow up to $225.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of June 30, 2017 and September 30, 2016, we had $144.4 million and $126.7 million outstanding under the Credit Facility, respectively. As of June 30, 2017 and September 30, 2016, subject to leverage and borrowing base restrictions, we had approximately $80.6 million and $73.3 million, respectively, of remaining commitments and $35.9 million and $30.8 million, respectively, of availability on the Credit Facility.

On June 22, 2016, we entered into an unsecured revolving credit facility with GC Advisors, or the Adviser Revolver, which permitted us to borrow up to $20.0 million at any one time outstanding. We entered into the Adviser Revolver in order to have the ability to borrow funds on a short-term basis and have in the past repaid, and generally intend in the future to repay, borrowings under the Adviser Revolver within the same quarter in which they are drawn. As of June 30, 2017 and September 30, 2016, we had no amounts outstanding on the Adviser Revolver.

On October 21, 2015, we terminated the $15.0 million revolving line of credit, or the Revolver, entered into by Golub Capital BDC Revolver Funding LLC, or Revolver Funding, our wholly-owned subsidiary, with PrivateBank and Trust Company. There were no borrowings outstanding on the Revolver at the time of termination and Revolver Funding was released of all obligations under the Revolver and all liens on the assets held by Revolver Funding collateralizing the Revolver were released.

On July 16, 2010, we completed the 2010 Debt Securitization, which was subsequently increased to $350.0 million. On October 20, 2016, we further amended the 2010 Debt Securitization to, among other things, (a) refinance the issued Class A notes issued by the 2010 Issuer, or the 2010 Notes, by redeeming in full the $203.0 million Class A 2010 Notes and issuing new Class A-Refi 2010 Notes in an aggregate principal amount of $205.0 million that bear interest at a rate of three-month LIBOR plus 1.90%, (b) refinance the Class B 2010 Notes by redeeming in full the $12.0 million Class B 2010 Notes and issuing new Class B-Refi 2010 Notes in an aggregate principal amount of $10.0 million that bear interest at a rate of three-month LIBOR plus 2.40%, and (c) extend the reinvestment period applicable to the 2010 Issuer to July 20, 2018. Following the refinancing, Golub Capital BDC 2010-1 Holdings LLC, our wholly-owned subsidiary, or Holdings, retained the Class B-Refi 2010 Notes.

As of June 30, 2017, the 2010 Notes consisted of $205.0 million of Class A-Refi 2010 Notes, which bear interest at a rate of three-month LIBOR plus 1.90%, $10.0 million of Class B-Refi 2010 Notes, which bear interest at a rate of three-month LIBOR plus 2.40%, and $135.0 million face amount of Subordinated 2010 Notes that do not bear interest. The Class A-Refi 2010 Notes are included in the June 30, 2017 consolidated statement of financial condition as our debt of and the Class B-Refi 2010 Notes and Subordinated 2010 Notes were eliminated in consolidation. As of September 30, 2016, the 2010 Notes consisted of $203.0 million of Class A 2010 Notes, which bore interest at a rate of three-month LIBOR plus 1.74%, $12.0 million of Class B 2010 Notes, which bore interest at a rate of three-month LIBOR plus 2.40%, and $135.0 million face amount of Subordinated 2010 Notes that do not bear interest. The Class A and Class B 2010 Notes are included in the September 30, 2016 consolidated statement of financial condition as our debt of and the Subordinated 2010 Notes were eliminated in consolidation. As of June 30, 2017 and September 30, 2016, we had outstanding debt under the 2010 Debt Securitization of $205.0 million and $215.0 million, respectively.

On June 5, 2014, we completed the 2014 Debt Securitization in which the 2014 Issuer issued an aggregate of $402.6 million of notes, or the 2014 Notes, including $191.0 million of Class A-1 2014 Notes, which bear interest at a rate of three-month LIBOR plus 1.75%, $20.0 million of Class A-2 2014 Notes, which bear interest at a rate of three-month LIBOR plus 1.95%, $35.0 million of Class B 2014 Notes, which bear interest at a rate of three-month LIBOR plus 2.50%, $37.5 million of Class C 2014 Notes, which bear interest at a rate of three-month LIBOR plus 3.50%, and $119.1 million of LLC equity interests in the 2014 Issuer that do not bear interest. We retained all of the Class C 2014 Notes and LLC equity interests in the 2014 Issuer totaling $37.5 million and $119.1 million, respectively. The Class A-1, Class A-2 and Class B 2014 Notes are included in the June 30, 2017 and September 30, 2016 consolidated statements of financial condition as our debt and the Class C 2014 Notes and LLC equity interests in the 2014 Issuer were eliminated in consolidation. As of June 30, 2017 and September 30, 2016, we had outstanding debt under the 2014 Debt Securitization of $246.0 million.

On January 10, 2017, we received approval for our third SBIC license, GC SBIC VI, L.P., or GC SBIC VI. Under present SBIC regulations, the maximum amount of SBA-guaranteed debentures that may be issued by multiple licensees under common management is $350.0 million and the maximum amount that a single SBIC licensee may issue is $150.0 million. As of June 30, 2017, GC SBIC IV, L.P., or SBIC IV, GC SBIC V, L.P., or SBIC V, and GC SBIC VI, L.P., or SBIC VI, had $150.0 million, $133.0 million, and $5.0 million, respectively, of outstanding SBA-guaranteed debentures that mature between March 2021 and September 2027 leaving incremental borrowing capacity of $17.0 million and $45.0 million for SBIC V and SBIC VI, respectively, under present SBIC regulations. As of September 30, 2016, SBIC IV and SBIC V had $150.0 million and $127.0 million, respectively, of outstanding SBA-guaranteed debentures that mature between March 2021 and September 2026.

On March 21, 2017, we priced a public offering of 1,750,000 shares of our common stock at a public offering price of $19.03 per share, raising approximately $33.3 million in gross proceeds. On March 24, 2017, the transaction closed, the shares were issued and proceeds, net of offering costs but before expenses, of $32.3 million were received. On April 6, 2017, we sold an additional 262,500 shares of our common stock at a public offering price of $19.03 per share pursuant to the underwriter's exercise of the option granted in connection with the March 2017 offering.

On June 6, 2017, we entered into an agreement to sell 1,750,000 shares of our common stock pursuant to an underwritten, public offering at a price to us of $18.71 per share. On June 12, 2017, the transaction closed, the shares were issued and proceeds, net of offering costs but before expenses, of $32.7 million were received. On July 5, 2017, we sold an additional 220,221 shares of our common stock pursuant to the underwriter's partial exercise of the option we granted in connection with the sale of shares in June 2017.

In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. On September 13, 2011, we received exemptive relief from the SEC allowing us to modify the asset coverage requirement to exclude the SBA debentures from this calculation. As such, our ratio of total consolidated assets to outstanding indebtedness may be less than 200%. This provides us with increased investment flexibility but also increases our risks related to

leverage. As of June 30, 2017, our asset coverage for borrowed amounts was 258.4% (excluding the SBA debentures).

As of June 30, 2017 and September 30, 2016, we had outstanding commitments to fund investments, excluding our investments in SLF, totaling $70.4 million and $81.4 million, respectively. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers, subject to the terms of each loan’s respective credit agreement. As of June 30, 2017, we believe that we had sufficient assets and liquidity to adequately cover future obligations under our unfunded commitments based on historical rates of drawings upon unfunded commitments, cash and restricted cash balances that we maintain, availability under our Credit Facility and Adviser Revolver and ongoing principal repayments on debt investments. In addition, we generally hold some syndicated loans in larger portfolio companies that are saleable over a relatively short period to generate cash.

Although we expect to fund the growth of our investment portfolio through the net proceeds from future securities offerings and through our DRIP as well as future borrowings, to the extent permitted by the 1940 Act, we cannot assure you that our efforts to raise capital will be successful. In addition to capital not being available, it also may not be available on favorable terms. To the extent we are not able to raise capital on what we believe are favorable terms, we will focus on optimizing returns by investing capital generated from repayments into new investments we believe are attractive from a risk/reward perspective. Furthermore, to the extent we are not able to raise capital and are at or near our targeted leverage ratios, we may receive smaller allocations, if any, on new investment opportunities under GC Advisors’ allocation policy and have, in the past, received such smaller allocations under similar circumstances.

Portfolio Composition, Investment Activity and Yield

As of June 30, 2017 and September 30, 2016, we had investments in 188 and 183 portfolio companies, respectively, with a total fair value of $1,692.9 million and $1,556.4 million, respectively, and had investments in SLF with a total fair value of $108.9 million and $104.2 million, respectively.

The following table shows the asset mix of our new investment commitments for the three and nine months ended June 30, 2017 and 2016:



	For the three months ended June 30,									For the nine months ended June 30,
	2017				2016					2017					2016
	(In thousands)		Percentage of Commitments		(In thousands)		Percentage of Commitments			(In thousands)		Percentage of Commitments			(In thousands)		Percentage of Commitments
Senior secured	$	27,678	11.5	%	$	27,257	17.5	%		$	111,015	23.6	%		$	99,420	20.8	%
One stop	212,465		87.8		126,245		80.9			338,457		71.9			352,666		73.9
Subordinated debt	—		—		42		0.0		*	12		0.0		*	42		0.0		*
Subordinated notes in SLF⁽¹⁾	—		—		—		—			5,457		1.1			9,620		2.0
LLC equity interests in SLF⁽¹⁾	—		—		—		—			12,542		2.7			10,820		2.3
Equity	1,795		0.7		2,421		1.6			3,162		0.7			4,529		1.0
Total new investment commitments	$	241,938	100.0	%	$	155,965	100.0	%		$	470,645	100.0	%		$	477,097	100.0	%

^* Represents an amount less than 0.1%.


⁽¹⁾	SLF’s proceeds from the subordinated notes and LLC equity interests were utilized by SLF to invest in senior secured loans. As of June 30, 2017, SLF had investments in senior secured loans to 52 different borrowers.

For the three and nine months ended June 30, 2017, we had approximately $156.0 million and $241.0 million, excluding $78.7 million of proceeds from the repayment in full and termination of our investment in subordinated notes of SLF, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and nine months ended June 30, 2017, we had sales of investments in 9 and 28 portfolio companies, respectively, aggregating approximately $13.4 million and $95.5 million, respectively, in net proceeds.

For the three and nine months ended June 30, 2016, we had approximately $106.2 million and $239.0 million, respectively, in proceeds from principal payments and return of capital distributions of portfolio companies. For the three and nine months ended June 30, 2016, we had sales of investments in 6 and 28 portfolio companies, respectively, aggregating approximately $33.2 million and $148.1 million, respectively, in net proceeds.

The following table shows the principal, amortized cost and fair value of our portfolio of investments by asset class:



	As of June 30, 2017 ⁽¹⁾								As of September 30, 2016 ⁽¹⁾
	Principal		Amortized Cost		Fair Value				Principal		Amortized Cost		Fair Value
	(In thousands)
Senior secured:
Performing	$	193,153	$	191,217	$	192,183			$	163,380	$	161,536	$	162,693
Non-accrual ⁽²⁾	1,438		1,433		(60		)	⁽³⁾	1,438		1,433		156
One stop:
Performing	1,434,599		1,415,819		1,426,450				1,317,595		1,299,211		1,303,297
Non-accrual ⁽²⁾	8,870		8,788		3,467				3,899		3,845		1,170
Second lien:
Performing	9,434		9,298		9,434				27,909		27,579		27,909
Non-accrual ⁽²⁾	—		—		—				—		—		—
Subordinated debt:
Performing	58		58		58				1,750		1,750		1,427
Non-accrual ⁽²⁾	—		—		—				—		—		—
Subordinated notes in SLF⁽⁴⁾⁽⁵⁾
Performing	—		—		—				77,301		77,301		77,301
Non-accrual⁽²⁾	—		—		—				—		—		—
LLC equity interests in SLF⁽⁴⁾⁽⁵⁾	N/A		113,120		108,879				N/A		31,339		26,927
Equity	N/A		41,494		61,397				N/A		46,179		59,732
Total	$	1,647,552	$	1,781,227	$	1,801,808			$	1,593,272	$	1,650,173	$	1,660,612


⁽¹⁾	17 and 14 of our loans included a feature permitting a portion of the interest due on such loan to be PIK interest as of June 30, 2017 and September 30, 2016, respectively.


⁽²⁾	We refer to a loan as non-accrual when we cease recognizing interest income on the loan because we have stopped pursuing repayment of the loan or, in certain circumstances, it is past due 90 days or more on principal and interest or our management has reasonable doubt that principal or interest will be collected. See “— Critical Accounting Policies — Revenue Recognition.”


⁽³⁾	The negative fair value is the result of the unfunded commitment being valued below par.


⁽⁴⁾	On December 30, 2016, SLF issued a capital call in an aggregate amount of $89.9 million the proceeds of which were used to redeem in full the outstanding balance on the subordinated notes previously issued by SLF and terminate all remaining subordinated note commitments.


⁽⁵⁾	SLF's proceeds from the subordinated notes and LLC equity interest in SLF were utilized by SLF to invest in senior secured loans.

As of June 30, 2017 and September 30, 2016, the fair value of our debt investments as a percentage of the outstanding principal value was 99.0% and 98.8%, respectively.

The following table shows the weighted average rate, spread over LIBOR of floating rate and fees of investments originated and the weighted average rate of sales and payoffs of portfolio companies during the three and nine months ended June 30, 2017 and 2016:



	For the three months ended June 30,		For the nine months ended June 30,
	2017	2016	2017	2016
Weighted average rate of new investment fundings⁽¹⁾	7.3%	7.2%	7.0%	7.0%
Weighted average spread over LIBOR of new floating rate investment fundings⁽¹⁾	6.0%	6.2%	5.9%	6.0%
Weighted average rate of new fixed rate investment fundings	7.5%	10.6%	7.5%	10.6%
Weighted average fees of new investment fundings	1.6%	2.1%	1.5%	1.8%
Weighted average rate of sales and payoffs of portfolio investments⁽¹⁾⁽²⁾	7.9%	6.8%	7.3%	7.1%
Weighted average annualized income yield ⁽³⁾⁽⁴⁾	7.9%	7.6%	7.8%	7.6%


⁽¹⁾	Excludes subordinated note investments in SLF.


⁽²⁾	Excludes exits on investments on non-accrual status.


⁽³⁾	Represents income from interest, including subordinated notes in SLF, and fees excluding amortization of capitalized fees and discounts divided by the average fair value of earning debt investments, and does not represent a return to any investor in us.


⁽⁴⁾	For the three months ended June 30, 2017, weighted average annualized income yield does not reflect interest income from subordinated notes in SLF, which were redeemed on December 30, 2016.

As of June 30, 2017, 99.6% and 99.6% of our debt portfolio at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans. As of September 30, 2016, 93.3% and 93.6% of our debt portfolio, including our investment in SLF subordinated notes which were not subject to an interest rate floor, at fair value and at amortized cost, respectively, had interest rate floors that limit the minimum applicable interest rates on such loans.

As of June 30, 2017, the portfolio median earnings before interest, taxes, depreciation and amortization, or EBITDA, for our portfolio companies (excluding SLF) was $26.4 million. The portfolio median EBITDA is based on the most recently reported trailing twelve-month EBITDA received from the portfolio company.

As part of the monitoring process, GC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors’ internal performance ratings:




Internal Performance Ratings
Rating		Definition
5		Involves the least amount of risk in our portfolio. The borrower is performing above expectations, and the trends and risk factors are generally favorable.
4		Involves an acceptable level of risk that is similar to the risk at the time of origination. The borrower is generally performing as expected, and the risk factors are neutral to favorable.
3		Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination. The borrower may be out of compliance with debt covenants; however, loan payments are generally not past due.
2		Involves a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due).
1		Involves a borrower performing substantially below expectations and indicates that the loan’s risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

For any investment rated 1, 2 or 3, GC Advisors will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions.

GC Advisors monitors and, when appropriate, changes the internal performance ratings assigned to each investment in our portfolio. In connection with our valuation process, GC Advisors and our board of directors review these internal performance ratings on a quarterly basis.

The following table shows the distribution of our investments on the 1 to 5 internal performance rating scale at fair value as of June 30, 2017 and September 30, 2016:



	June 30, 2017				September 30, 2016
Internal Performance Rating	Investments at Fair Value (In thousands)		Percentage of Total Investments		Investments at Fair Value (In thousands)		Percentage of Total Investments
5	$	212,063	11.8	%	$	93,768	5.7	%
4	1,377,526		76.5		1,380,274		83.1
3	209,231		11.6		176,464		10.6
2	240		0.0	*	9,950		0.6
1	2,748		0.1		156		0.0	*
Total	$	1,801,808	100.0	%	$	1,660,612	100.0	%



*	Represents an amount less than 0.1%.

Senior Loan Fund LLC

We co-invest with RGA Reinsurance Company, or RGA, in senior secured loans through SLF, an unconsolidated Delaware LLC. SLF is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF must be approved by the SLF investment committee consisting of two representatives of each of us and RGA (with unanimous approval required from (i) one representative of each of us and RGA or (ii) both representatives of each of us and RGA). SLF may cease making new investments upon notification of either member but operations will continue until all investments have been sold or paid-off in the normal course of business.

As of June 30, 2017, SLF is capitalized from LLC equity interest subscriptions from its members. On December 14, 2016, the SLF investment committee approved the recapitalization of the commitments of SLF’s members. On December 30, 2016, SLF’s members entered into additional LLC equity interest subscriptions totaling $160.0 million, SLF issued capital calls totaling $89.9 million to us and RGA and the subordinated notes previously issued by SLF were redeemed and terminated. As of June 30, 2017 and September 30, 2016, we and RGA owned 87.5% and 12.5%, respectively, of the LLC equity interests. SLF’s profits and losses are allocated to us and RGA in accordance with our respective ownership interests. As of September 30, 2016, we and RGA owned 87.5% and 12.5%, respectively, of the outstanding subordinated notes issued by SLF.

As of June 30, 2017 and September 30, 2016, SLF had the following commitments from its members:



	As of June 30, 2017				As of September 30, 2016
	Committed		Funded⁽¹⁾		Committed		Funded⁽¹⁾⁽²⁾
	(Dollars in thousands)
Subordinated note commitments ⁽³⁾	$	—	$	—	$	160,000	$	88,344
LLC equity commitments⁽³⁾	200,000		129,280		40,000		35,816
Total	$	200,000	$	129,280	$	200,000	$	124,160


⁽¹⁾	Funded LLC equity commitments are presented net of return of capital distributions subject to recall.


⁽²⁾	Funded subordinated note commitments as of September 30, 2016 are presented net of repayments subject to recall. The subordinated note commitments were terminated as of December 30, 2016.


⁽³⁾	Commitments presented are combined for us and RGA.

As of June 30, 2017, the senior secured revolving credit facility, or, as amended, the SLF Credit Facility, which SLF entered into through its wholly-owned subsidiary, Senior Loan Fund II LLC, or SLF II, allows SLF II to borrow up to $300.0 million subject to leverage and borrowing base restrictions. The reinvestment period of the SLF Credit Facility ends August 10, 2017, and the stated maturity date is August 11, 2020. As of June 30, 2017 and September 30, 2016, SLF II had outstanding debt under the SLF Credit Facility of $204.9 million and $214.1 million, respectively.

Through the reinvestment period, the SLF Credit Facility bears interest at one-month LIBOR plus a rate between 1.75% and 2.25%, depending on the composition of the collateral asset portfolio, per annum. After the reinvestment period, the rate will reset to one-month LIBOR plus 2.75% per annum for the remaining term of the SLF Credit Facility.

As of June 30, 2017 and September 30, 2016, SLF had total assets at fair value of $331.2 million and $332.8 million, respectively. As of June 30, 2017, SLF had two portfolio company investments on non-accrual status and the total fair value of non-accrual loans was $4.9 million. As of September 30, 2016, SLF had one portfolio company investment on non-accrual status and the total fair value of non-accrual loans was $6.7 million. The portfolio companies in SLF are in industries and geographies similar to those in which we may invest directly. Additionally, as of June 30, 2017 and September 30, 2016, SLF had commitments to fund various undrawn revolving credit and delayed draw loans to its portfolio companies totaling $18.0 million and $24.1 million, respectively.

Below is a summary of SLF’s portfolio, followed by a listing of the individual investments in SLF’s portfolio as of June 30, 2017 and September 30, 2016:



	As of June 30, 2017			As of September 30, 2016
	(Dollars in thousands)
Senior secured loans⁽¹⁾	$	331,346		$	331,473
Weighted average current interest rate on senior secured loans ⁽²⁾	6.5		%	6.0		%
Number of borrowers in SLF	52			62
Largest portfolio company investment⁽¹⁾	$	16,160		$	13,050
Total of five largest portfolio company investments⁽¹⁾	$	66,281		$	61,118


⁽¹⁾	At principal amount.


⁽²⁾	Computed as the (a) annual stated interest rate on accruing senior secured loans divided by (b) total senior secured loans at principal amount.



SLF Investment Portfolio as of June 30, 2017
Portfolio Company	Business Description	Investment Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($) / Shares⁽²⁾		Fair Value⁽³⁾
						(In thousands)
1A Smart Start LLC	Home and Office Furnishings, Housewares, and Durable Consumer	Senior loan	02/2022	6.0	%	$	2,100	$	2,102
Accellos, Inc.⁽⁴⁾	Diversified/Conglomerate Service	Senior loan	07/2020	7.0		16,160		16,160
Advanced Pain Management Holdings, Inc.,	Healthcare, Education and Childcare	Senior loan	02/2018	6.3		6,805		6,124
Advanced Pain Management Holdings, Inc.,	Healthcare, Education and Childcare	Senior loan	02/2018	6.3		466		419
American Seafoods Group LLC	Beverage, Food and Tobacco	Senior loan	08/2021	6.3		4,605		4,605
Argon Medical Devices, Inc.	Healthcare, Education and Childcare	Senior loan	12/2021	6.0		3,334		3,334
Arise Virtual Solutions, Inc. ⁽⁴⁾	Telecommunications	Senior loan	12/2018	7.8		9,927		9,927
Atkins Nutritionals, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	01/2019	6.3		4,452		4,452
Boot Barn, Inc.	Retail Stores	Senior loan	06/2021	5.8		10,073		10,073
Brandmuscle, Inc.	Printing and Publishing	Senior loan	12/2021	6.0		4,851		4,846
Certara L.P.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	12/2018	6.8		8,243		8,243
CLP Healthcare Services, Inc.	Healthcare, Education and Childcare	Senior loan	12/2020	6.3		8,611		8,439
CLP Healthcare Services, Inc.	Healthcare, Education and Childcare	Senior loan	12/2020	6.3		4,340		4,253
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.8		2,448		2,448
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.8		1,231		1,231
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.8		59		59
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.8		36		36
Curo Health Services LLC⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	02/2022	5.9		5,865		5,943
DentMall MSO, LLC⁽⁵⁾	Personal, Food and Miscellaneous Services	Senior loan	07/2019	6.2		10,147		3,349
DentMall MSO, LLC⁽⁵⁾	Personal, Food and Miscellaneous Services	Senior loan	07/2019	6.5		1,178		509
DISA Holdings Acquisition Subsidiary Corp.	Diversified/Conglomerate Service	Senior loan	12/2020	5.4		4,401		4,401
DISA Holdings Acquisition Subsidiary Corp.	Diversified/Conglomerate Service	Senior loan	12/2020	6.5		80		80
EAG, INC.	Diversified/Conglomerate Service	Senior loan	07/2018	5.5		1,996		1,996
Encore GC Acquisition, LLC	Healthcare, Education and Childcare	Senior loan	01/2020	6.8		4,737		4,737
Encore GC Acquisition, LLC	Healthcare, Education and Childcare	Senior loan	01/2020	8.5		161		161
First Watch Restaurants, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	12/2020	7.4		10,259		10,259
First Watch Restaurants, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	12/2020	9.3		489		489
Flexan, LLC	Chemicals, Plastics and Rubber	Senior loan	02/2020	7.0		6,044		6,044
Flexan, LLC	Chemicals, Plastics and Rubber	Senior loan	02/2020	7.0		1,686		1,686
Gamma Technologies, LLC⁽⁴⁾	Electronics	Senior loan	06/2021	6.2		10,290		10,290
Harvey Tool Company, LLC	Diversified/Conglomerate Manufacturing	Senior loan	03/2020	6.1		3,071		3,071
III US Holdings, LLC	Diversified/Conglomerate Service	Senior loan	09/2022	7.4		5,194		5,194
Jensen Hughes, Inc.	Buildings and Real Estate	Senior loan	12/2021	6.4		2,336		2,336
Jensen Hughes, Inc.	Buildings and Real Estate	Senior loan	12/2021	6.2		103		103
Jensen Hughes, Inc.	Buildings and Real Estate	Senior loan	12/2021	6.2		65		65
Joerns Healthcare, LLC⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	05/2020	7.9		8,757		8,159
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.7		6,780		6,780
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.7		2,232		2,232
Loar Group Inc.	Aerospace and Defense	Senior loan	01/2022	6.0		2,164		2,164
Paradigm DKD Group, LLC	Buildings and Real Estate	Senior loan	11/2018	6.1		1,982		1,982
Paradigm DKD Group, LLC	Buildings and Real Estate	Senior loan	11/2018	7.3		524		524
Pasternack Enterprises, Inc. and Fairview Microwave, Inc.	Diversified/Conglomerate Manufacturing	Senior loan	05/2022	6.2		5,385		5,385
Payless ShoeSource, Inc.⁽⁵⁾	Retail Stores	Senior loan	03/2021	7.2		1,945		1,042
Polk Acquisition Corp.	Automobile	Senior loan	06/2022	6.2		4,699		4,699
Polk Acquisition Corp.	Automobile	Senior loan	06/2022	6.2		54		54
Polk Acquisition Corp.	Automobile	Senior loan	06/2022	6.6		43		43



SLF Investment Portfolio as of June 30, 2017 – (continued)
Portfolio Company	Business Description	Investment Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($) / Shares⁽²⁾		Fair Value⁽³⁾
						(In thousands)
PowerPlan Holdings, Inc.⁽⁴⁾	Utilities	Senior loan	02/2022	6.0	%	$	11,365	$	11,365
Premise Health Holding Corp.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	06/2020	5.8		11,801		11,801
Pyramid Healthcare, Inc.	Healthcare, Education and Childcare	Senior loan	08/2019	7.7		9,763		9,763
Pyramid Healthcare, Inc.	Healthcare, Education and Childcare	Senior loan	08/2019	7.7		328		328
R.G. Barry Corporation	Personal, Food and Miscellaneous Services	Senior loan	09/2019	6.2		5,252		5,252
Radiology Partners, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	7.0		7,813		7,813
Radiology Partners, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	7.0		597		597
Radiology Partners, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	7.0		507		507
Reliant Pro ReHab, LLC⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	12/2017	6.3		3,265		3,265
RSC Acquisition, Inc.⁽⁴⁾	Insurance	Senior loan	11/2022	6.5		3,874		3,855
RSC Acquisition, Inc.	Insurance	Senior loan	11/2020	6.0		15		15
Rubio's Restaurants, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	11/2018	6.0		5,005		5,005
Rug Doctor LLC	Personal and Non Durable Consumer Products (Mfg. Only)	Senior loan	06/2018	6.5		5,926		5,926
Sage Dental Management, LLC	Healthcare, Education and Childcare	Senior loan	10/2019	6.9		4,794		4,794
Sage Dental Management, LLC	Healthcare, Education and Childcare	Senior loan	10/2019	6.9		50		50
Sage Dental Management, LLC	Healthcare, Education and Childcare	Senior loan	10/2019	7.0		40		40
Sage Dental Management, LLC	Healthcare, Education and Childcare	Senior loan	10/2019	8.8		23		23
Saldon Holdings, Inc.	Diversified/Conglomerate Service	Senior loan	09/2021	5.7		2,560		2,560
Sarnova HC, LLC	Healthcare, Education and Childcare	Senior loan	01/2022	6.0		3,694		3,694
SEI, Inc.	Electronics	Senior loan	07/2021	6.0		13,855		13,717
SEI, Inc.⁽⁶⁾	Electronics	Senior loan	07/2021	N/A	⁽⁷⁾	—		(1		)
Self Esteem Brands, LLC⁽⁴⁾	Leisure, Amusement, Motion Pictures, Entertainment	Senior loan	02/2020	6.0		11,514		11,514
Severin Acquisition, LLC	Diversified/Conglomerate Service	Senior loan	07/2021	6.1		5,304		5,278
Severin Acquisition, LLC⁽⁴⁾	Diversified/Conglomerate Service	Senior loan	07/2021	6.2		4,845		4,842
Severin Acquisition, LLC	Diversified/Conglomerate Service	Senior loan	07/2021	6.3		670		672
Severin Acquisition, LLC ⁽⁶⁾	Diversified/Conglomerate Service	Senior loan	07/2021	N/A	⁽⁷⁾	—		(1		)
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		905		860
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		71		67
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		71		68
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		71		68
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		71		68
Smashburger Finance LLC ⁽⁶⁾	Beverage, Food and Tobacco	Senior loan	05/2018	N/A	⁽⁷⁾	—		(6		)
Tate's Bake Shop, Inc.⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	08/2019	6.3		2,933		2,933
Teasdale Quality Foods, Inc.	Grocery	Senior loan	10/2020	5.5		4,581		4,558
Transaction Data Systems, Inc.	Diversified/Conglomerate Service	Senior loan	06/2021	6.6		7,412		7,412
Transaction Data Systems, Inc.	Diversified/Conglomerate Service	Senior loan	06/2020	5.7		22		21
W3 Co.	Oil and Gas	Senior loan	03/2022	7.2		1,269		1,269
Young Innovations, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	01/2019	6.3		10,395		10,395
Young Innovations, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	01/2019	6.3		277		277
Total senior loan investments						$	331,346	$	321,192

W3 Co.⁽⁸⁾⁽⁹⁾	Oil and Gas	LLC units	N/A	N/A		3		$	1,069
Total equity investments								$	1,069

Total investments						$	331,346	$	322,261


⁽¹⁾	Represents the weighted average annual current interest rate as of June 30, 2017.


⁽²⁾	The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.


⁽³⁾	Represents the fair value in accordance with ASC Topic 820 - Fair Value Measurement, or ASC Topic 820. The determination of such fair value is not included in our board of directors’ valuation process described elsewhere herein.


⁽⁴⁾	We also hold a portion of the first lien senior secured loan in this portfolio company.


⁽⁵⁾	Loan was on non-accrual status as of June 30, 2017, meaning that SLF has ceased recognizing interest income on the loan.


⁽⁶⁾	The negative fair value is the result of the unfunded commitment being valued below par.


⁽⁷⁾	The entire commitment was unfunded as of June 30, 2017. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.


⁽⁸⁾	Equity investment received as a result of the portfolio company's debt restructuring.


⁽⁹⁾	Non-income producing.



SLF Investment Portfolio as of September 30, 2016
Portfolio Company	Business Description	Investment Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($)		Fair Value⁽²⁾
						(In thousands)
1A Smart Start LLC⁽³⁾	Home and Office Furnishings, Housewares, and Durable Consumer	Senior loan	02/2022	5.8	%	$	2,116	$	2,111
ACTIVE Network, Inc.	Electronics	Senior loan	11/2020	5.5		1,945		1,938
Advanced Pain Management Holdings, Inc.	Healthcare, Education and Childcare	Senior loan	02/2018	6.3		6,805		6,601
Advanced Pain Management Holdings, Inc.	Healthcare, Education and Childcare	Senior loan	02/2018	6.3		466		452
Advanced Pain Management Holdings, Inc.⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	02/2018	N/A	⁽⁵⁾	—		(35		)
Aimbridge Hospitality, LLC⁽³⁾	Hotels, Motels, Inns, and Gaming	Senior loan	10/2018	5.8		5,037		5,037
American Seafoods Group LLC	Beverage, Food and Tobacco	Senior loan	08/2021	6.0		4,818		4,806
Argon Medical Devices, Inc.	Healthcare, Education and Childcare	Senior loan	12/2021	5.8		3,895		3,895
Arise Virtual Solutions, Inc.⁽³⁾	Telecommunications	Senior loan	12/2018	7.8		10,804		10,264
Arise Virtual Solutions, Inc.⁽³⁾⁽⁴⁾	Telecommunications	Senior loan	12/2018	N/A	⁽⁵⁾	—		(28		)
Atkins Nutritionals, Inc.⁽³⁾	Beverage, Food and Tobacco	Senior loan	01/2019	6.3		5,664		5,664
BMC Software, Inc.	Electronics	Senior loan	09/2020	5.0		1,876		1,813
Boot Barn, Inc.	Retail Stores	Senior loan	06/2021	5.5		10,667		10,667
Brandmuscle, Inc.	Printing and Publishing	Senior loan	12/2021	5.8		4,948		4,938
C.B. Fleet Company, Incorporated	Personal and Non-Durable Consumer Products	Senior loan	12/2021	5.8		7,613		7,613
Checkers Drive-In Restaurants, Inc.	Beverage, Food and Tobacco	Senior loan	01/2022	6.5		4,460		4,427
CLP Healthcare Services, Inc.	Healthcare, Education and Childcare	Senior loan	12/2020	6.3		8,677		8,677
CLP Healthcare Services, Inc.	Healthcare, Education and Childcare	Senior loan	12/2020	6.3		4,373		4,373
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.5		2,466		2,454
Community Veterinary Partners, LLC	Personal, Food and Miscellaneous Services	Senior loan	10/2021	6.5		1,240		1,234
CPI Buyer, LLC (Cole-Parmer)⁽³⁾	Healthcare, Education and Childcare	Senior loan	08/2021	5.5		5,805		5,776
Curo Health Services LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	02/2022	6.5		5,910		5,928
DentMall MSO, LLC⁽⁶⁾	Retail Stores	Senior loan	07/2019	6.0		10,147		6,088
DentMall MSO, LLC⁽⁶⁾	Retail Stores	Senior loan	07/2019	6.0		1,000		598
DISA Holdings Acquisition Subsidiary Corp.	Diversified Conglomerate Service	Senior loan	12/2020	5.5		4,568		4,431
DISA Holdings Acquisition Subsidiary Corp.	Diversified Conglomerate Service	Senior loan	12/2020	5.5		255		224
EAG, INC. (Evans Analytical Group)	Diversified Conglomerate Service	Senior loan	07/2017	5.0		2,113		2,113
Encore GC Acquisition, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	01/2020	6.3		4,773		4,773
Encore GC Acquisition, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	01/2020	7.8		164		164
Express Oil Change, LLC⁽³⁾	Retail Stores	Senior loan	12/2017	6.0		4,841		4,841
Extreme Reach Inc.	Broadcasting and Entertainment	Senior loan	02/2020	7.3		1,976		1,998
Federal-Mogul Corporation	Automobile	Senior loan	04/2021	4.8		3,920		3,799
Flexan, LLC	Chemicals, Plastics and Rubber	Senior loan	02/2020	6.3		6,090		6,090
Harvey Tool Company, LLC⁽³⁾	Diversified Conglomerate Manufacturing	Senior loan	03/2020	6.0		3,108		3,108
Jensen Hughes, Inc.	Diversified Conglomerate Service	Senior loan	12/2021	6.3		2,342		2,342
Jensen Hughes, Inc.	Diversified Conglomerate Service	Senior loan	12/2021	6.0		104		104
Jensen Hughes, Inc.	Diversified Conglomerate Service	Senior loan	12/2021	6.2		65		65
Joerns Healthcare, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	05/2020	6.0		9,598		9,118
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.5		6,834		6,834
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.5		1,061		1,061
Julio & Sons Company	Beverage, Food and Tobacco	Senior loan	12/2018	6.5		596		596
K&N Engineering, Inc.⁽³⁾	Automobile	Senior loan	07/2019	6.8		3,781		3,781
K&N Engineering, Inc.⁽³⁾	Automobile	Senior loan	07/2019	5.3		179		179
Loar Group Inc.	Aerospace and Defense	Senior loan	01/2022	5.8		2,233		2,233
Mediaocean LLC⁽³⁾	Diversified Conglomerate Service	Senior loan	08/2022	5.8		3,137		3,137
Northwestern Management Services, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	10/2019	6.5		4,288		4,224



SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company	Business Description	Investment Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($)		Fair Value⁽²⁾
						(In thousands)
Northwestern Management Services, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	10/2019	6.5	%	$	470	$	463
Northwestern Management Services, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	10/2019	7.5		1		1
Paradigm DKD Group, LLC	Buildings and Real Estate	Senior loan	11/2018	6.5		1,998		1,958
Paradigm DKD Group, LLC	Buildings and Real Estate	Senior loan	11/2018	6.7		180		166
Pasternack Enterprises, Inc. and Fairview Microwave, Inc⁽³⁾	Diversified Conglomerate Manufacturing	Senior loan	05/2022	6.0		1,640		1,623
Payless ShoeSource, Inc.	Retail Stores	Senior loan	03/2021	5.0		1,955		1,163
Pentec Acquisition Sub, Inc.	Healthcare, Education and Childcare	Senior loan	05/2018	6.3		1,419		1,419
PetVet Care Centers LLC⁽³⁾	Personal, Food and Miscellaneous Services	Senior loan	12/2020	5.8		5,895		5,895
PetVet Care Centers LLC⁽³⁾	Personal, Food and Miscellaneous Services	Senior loan	12/2020	5.8		1,219		1,219
PowerPlan Holdings, Inc.⁽³⁾	Utilities	Senior loan	02/2022	5.8		11,994		11,994
PPT Management, LLC	Healthcare, Education and Childcare	Senior loan	04/2020	6.0		13,026		13,026
PPT Management, LLC	Healthcare, Education and Childcare	Senior loan	04/2020	6.0		10		10
Premise Health Holding Corp.⁽³⁾	Healthcare, Education and Childcare	Senior loan	06/2020	5.5		11,891		11,891
Pyramid Healthcare, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	08/2019	6.8		8,354		8,354
Pyramid Healthcare, Inc.	Healthcare, Education and Childcare	Senior loan	08/2019	7.8		373		373
R.G. Barry Corporation	Personal, Food and Miscellaneous Services	Senior loan	09/2019	6.0		5,880		5,821
Radiology Partners, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	09/2020	6.5		7,072		7,001
Radiology Partners, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	09/2020	6.5		801		792
Radiology Partners, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	09/2020	6.5		510		505
Radiology Partners, Inc.⁽³⁾⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	N/A	⁽⁵⁾	—		(6		)
Radiology Partners, Inc.⁽³⁾⁽⁴⁾	Healthcare, Education and Childcare	Senior loan	09/2020	N/A	⁽⁵⁾	—		(3		)
Reliant Pro ReHab, LLC⁽³⁾	Healthcare, Education and Childcare	Senior loan	12/2017	6.0		3,337		3,337
RSC Acquisition, Inc.⁽³⁾	Insurance	Senior loan	11/2022	6.3		3,732		3,732
RSC Acquisition, Inc.⁽³⁾	Insurance	Senior loan	11/2022	6.3		172		172
RSC Acquisition, Inc.	Insurance	Senior loan	11/2020	6.8		33		33
Rubio's Restaurants, Inc.⁽³⁾	Beverage, Food and Tobacco	Senior loan	11/2018	6.0		5,044		5,044
Rug Doctor LLC	Personal and Non-Durable Consumer Products	Senior loan	06/2018	6.3		7,780		7,780
Saldon Holdings, Inc.	Diversified Conglomerate Service	Senior loan	09/2021	5.5		2,718		2,718
Sarnova HC, LLC	Healthcare, Education and Childcare	Senior loan	01/2022	5.8		3,722		3,722
SEI, Inc.	Electronics	Senior loan	07/2021	5.8		8,711		8,711
Self Esteem Brands, LLC⁽³⁾	Leisure, Amusement, Motion Pictures and Entertainment	Senior loan	02/2020	5.0		6,342		6,342
Severin Acquisition, LLC⁽³⁾	Diversified Conglomerate Service	Senior loan	07/2021	5.9		4,882		4,858
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		951		932
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		75		74
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		75		73
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		75		73
Smashburger Finance LLC	Beverage, Food and Tobacco	Senior loan	05/2018	6.8		75		73
Smashburger Finance LLC⁽⁴⁾	Beverage, Food and Tobacco	Senior loan	05/2018	N/A	⁽⁵⁾	—		(2		)
Systems Maintenance Services Holding, Inc.⁽³⁾	Electronics	Senior loan	10/2019	5.0		2,396		2,396
Tate's Bake Shop, Inc.⁽³⁾	Beverage, Food and Tobacco	Senior loan	08/2019	6.0		2,955		2,955
Teasdale Quality Foods, Inc.	Grocery	Senior loan	10/2020	5.3		4,582		4,566
Transaction Data Systems, Inc.⁽³⁾	Diversified Conglomerate Service	Senior loan	06/2021	6.3		5,260		5,260
Transaction Data Systems, Inc.	Diversified Conglomerate Service	Senior loan	06/2020	5.5		9		8
W3 Co.	Oil and Gas	Senior loan	03/2020	5.8		2,924		2,295
Worldwide Express Operations, LLC	Cargo Transport	Senior loan	07/2019	6.0		4,869		4,869
Worldwide Express Operations, LLC	Cargo Transport	Senior loan	07/2019	6.0		100		100
Young Innovations, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	01/2019	5.3		3,804		3,818



SLF Investment Portfolio as of September 30, 2016 – (continued)
Portfolio Company	Business Description	Investment Type	Maturity Date	Current Interest Rate⁽¹⁾		Principal ($)		Fair Value⁽²⁾
						(In thousands)
Young Innovations, Inc.⁽³⁾	Healthcare, Education and Childcare	Senior loan	01/2018	6.8	%	$	122	$	118
Zest Holdings, LLC	Healthcare, Education and Childcare	Senior loan	08/2020	5.8		5,282		5,282
						$	331,473	$	323,510


⁽¹⁾	Represents the weighted average annual current interest rate as of September 30, 2016. All interest rates are payable in cash.


⁽²⁾	Represents the fair value in accordance with ASC Topic 820. The determination of such fair value is not included in our board of directors’ valuation process described elsewhere herein.


⁽³⁾	We also hold a portion of the first lien senior secured loan in this portfolio company.


⁽⁴⁾	The negative fair value is the result of the unfunded commitment being valued below par.


⁽⁵⁾	The entire commitment was unfunded as of September 30, 2016. As such, no interest is being earned on this investment.


⁽⁶⁾	Loan was on non-accrual status as of September 30, 2016, meaning that SLF has ceased recognizing interest income on the loan.

As of June 30, 2017, we have committed to fund $175.0 million of LLC equity interest subscriptions to SLF. As of June 30, 2017 and September 30, 2016, $113.1 million and $31.3 million, respectively, of our LLC equity interest subscriptions to SLF had been called and contributed, net of return of capital distributions subject to recall. For the three and nine months ended June 30, 2017, we received $0.9 million and $4.1 million, respectively, in dividend income from the SLF LLC equity interests. For the three and nine months ended June 30, 2016, we received $1.1 million and $3.0 million, respectively, in dividend income from the SLF LLC equity interests.

As of September 30, 2016, the amortized cost, net of principal repayments that were subject to recall, and fair value of the subordinated notes held by us was $77.3 million and $77.3 million, respectively. As of September 30, 2016, the subordinated notes paid a weighted average interest rate of three-month LIBOR plus 8.0%. For the nine months ended June 30, 2017, we earned interest income on the subordinated notes of $1.6 million. The subordinated notes held by us were redeemed on December 30, 2016, and therefore no interest income was earned for the three months ended June 30, 2017. For the three and nine months ended June 30, 2016, we earned interest income of $1.8 million and $5.2 million, respectively, on the subordinated notes.

For the three and nine months ended June 30, 2017, we earned an annualized total return on our weighted average capital invested in SLF of 3.4% and 7.0%, respectively. For the three and nine months ended June 30, 2016, we earned an annualized total return on our weighted average capital invested in SLF of 12.6% and 7.8%, respectively. The annualized total return on weighted average capital invested is calculated by dividing total income earned on our investments in SLF by the combined daily average of our investments in (1) the principal of the SLF subordinated notes, if any, and (2) the NAV of the SLF LLC equity interests.

Below is certain summarized financial information for SLF as of June 30, 2017 and September 30, 2016, and for the three and nine months ended June 30, 2017 and 2016:



	June 30, 2017			September 30, 2016
	(In thousands)
Selected Balance Sheet Information, at fair value
Investments, at fair value	$	322,261		$	323,510
Cash and other assets	7,068			7,281
Receivable from investments sold	1,883			1,995
Total assets	$	331,212		$	332,786
Senior credit facility	$	204,900		$	214,050
Unamortized debt issuance costs	(110		)	(949		)
Payable for investments purchased	1,317			—
Other liabilities	672			567
Total liabilities	206,779			213,668
Subordinated notes and members’ equity	124,433			119,118
Total liabilities and members' equity	$	331,212		$	332,786



	Three months ended June 30,					Nine months ended June 30,
	2017			2016		2017			2016
	(In thousands)					(In thousands)
Selected Statement of Operations Information:
Interest income	$	5,645		$	5,695	$	16,311		$	16,699
Fee income	5			—		5			22
Total investment income	5,650			5,695		16,316			16,721
Interest expense	2,129			4,016		8,148			11,775
Administrative service fee	123			127		354			327
Other expenses	34			35		98			110
Total expenses	2,286			4,178		8,600			12,212
Net investment income	3,364			1,517		7,716			4,509
Net realized gains (losses) on investments	29			—		3			(430		)
Net change in unrealized appreciation (depreciation) on investments and subordinated notes	(2,262		)	591		(2,891		)	(1,505		)
Net increase (decrease) in net assets	$	1,131		$	2,108	$	4,828		$	2,574

Prior to their termination, SLF elected to fair value the subordinated notes issued to us and RGA under ASC Topic 825 — Financial Instruments, or ASC Topic 825. The subordinated notes were valued by calculating the net present value of the future expected cash flow streams using an appropriate risk-adjusted discount rate model. For each of the three and nine months ended June 30, 2017, SLF did not recognize unrealized appreciation or depreciation on the subordinated notes. For each of the three and nine months ended June 30, 2016, SLF recognized an amount less than $0.1 million in unrealized appreciation and $1.0 million in unrealized depreciation on the subordinated notes, respectively.

As of June 30, 2017, SLF had no subordinated notes outstanding. As of September 30, 2016, SLF had $88.3 million of aggregate contractual principal amounts of subordinated notes outstanding for which the fair value option was elected with a fair value and carrying value of $88.3 million.

Contractual Obligations and Off-Balance Sheet Arrangements

A summary of our significant contractual payment obligations as of June 30, 2017 is as follows:



	Payments Due by Period (In millions)
	Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More Than 5 Years
2010 Debt Securitization	$	205.0	$	—	$	—	$	—	$	205.0
2014 Debt Securitization	246.0		—		—		—		246.0
SBA debentures	288.0		—		—		100.0		188.0
Credit Facility	144.4		—		—		144.4		—
Adviser Revolver	—		—		—		—		—
Unfunded commitments ⁽¹⁾	70.4		70.4		—		—		—
Total contractual obligations ⁽²⁾	$	953.8	$	70.4	$	—	$	244.4	$	639.0

⁽¹⁾

Unfunded commitments represent unfunded commitments to fund investments, excluding our investments in SLF, as of June 30, 2017. These amounts may or may not be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but we are showing this amount in the less than one year category as this entire amount was eligible for funding to the borrowers as of June 30, 2017, subject to the terms of each loan’s respective credit agreement.


⁽²⁾	Total contractual obligations exclude $0.4 million of secured borrowings.

We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of June 30, 2017 and September 30, 2016, we had outstanding commitments to fund investments, excluding our investments in SLF, totaling $70.4 million and $81.4 million, respectively. We have commitments of up to $61.9 million and $66.4 million to SLF as of June 30, 2017 and September 30, 2016, respectively, that may be contributed primarily for the purpose of funding new investments approved by the SLF investment committee.

We have certain contracts under which we have material future commitments. We have entered into the Investment Advisory Agreement with GC Advisors in accordance with the 1940 Act. Under the Investment Advisory Agreement, GC Advisors provides us with investment advisory and management services.

Under the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us with clerical, bookkeeping and record keeping services at such facilities and provides us with other administrative services necessary to conduct our day-to-day operations. The Administrator also provides on our behalf managerial assistance to those portfolio companies to which we are required to offer to provide such assistance.

If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we receive under our Investment Advisory Agreement and our Administration Agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.

Distributions

We intend to make quarterly distributions to our stockholders as determined by our board of directors. For additional details on distributions, see “Income taxes” in Note 2 to our consolidated financial statements.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of our distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage requirements applicable to us as a business development company under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse U.S. federal

income tax consequences, including the possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. For example, permanent differences in classification may result from the treatment of distributions paid from short-term gains as ordinary income dividends for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

To the extent our taxable earnings fall below the total amount of our distributions for any tax year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, our stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our dividend reinvestment plan. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:


•	We entered into the Investment Advisory Agreement with GC Advisors. Mr. Lawrence Golub, our chairman, is a manager of GC Advisors, and Mr. David Golub, our chief executive officer, is a manager of GC Advisors, and each of Messrs. Lawrence Golub and David Golub owns an indirect pecuniary interest in GC Advisors.


•	Golub Capital LLC provides, and other affiliates of Golub Capital have historically provided, us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.


•	We have entered into a license agreement with Golub Capital LLC, pursuant to which Golub Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Golub Capital.”

•

Under the Staffing Agreement, Golub Capital LLC has agreed to provide GC Advisors with the resources necessary to fulfill its obligations under the Investment Advisory Agreement. The Staffing Agreement provides that Golub Capital LLC will make available to GC Advisors experienced investment professionals and provide access to the senior investment personnel of Golub Capital LLC for purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of GC Advisors’ investment committee will serve in such capacity. Services under the Staffing Agreement are provided on a direct cost reimbursement basis. We are not a party to the Staffing Agreement.


•	GC Advisors serves as collateral manager to the 2010 Issuer and the 2014 Issuer under the 2010 Collateral Management Agreement and 2014 Collateral Management Agreement, respectively, and receives a fee for providing these services that is offset against the base management fee payable by us under the Investment Advisory Agreement.


•	We have entered into the Adviser Revolver with GC Advisors in order to have the ability to borrow funds on a short-term basis.

•

During calendar year 2017, the Golub Capital Employee Grant Program Rabbi Trust, or the Trust, purchased approximately $17.7 million of shares, or 955,896 shares, of our common stock from GCOP LLC, an affiliate of GC Advisors, for the purpose of awarding incentive compensation to employees of Golub Capital. During calendar year 2016, the Trust purchased approximately $1.5 million of shares, or 95,035 shares, of our common stock, for the purpose of awarding incentive compensation to employees of Golub Capital. During calendar year 2015, the Trust purchased approximately $16.0 million of shares, or 952,051 shares, of our common stock, for the purpose of awarding incentive compensation to employees of Golub Capital.

GC Advisors also sponsors or manages, and may in the future sponsor or manage, other investment funds, accounts or investment vehicles (together referred to as “accounts”) that have investment mandates that are similar, in whole and in part, with ours. For example, GC Advisors presently serves as the investment adviser to Golub Capital Investment Corporation, an unlisted business development company that primarily focuses on investing in senior secured and one stop loans. In addition, our officers and directors serve in similar capacities for Golub Capital Investment Corporation. GC Advisors and its affiliates may determine that an investment is appropriate for us and for one or more of those other accounts. In such event, depending on the availability of such investment and other appropriate factors, and pursuant to GC Advisors’ allocation policy, GC Advisors or its affiliates may determine that we should invest side-by-side with one or more other accounts. We do not intend to make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, or if they are inconsistent with GC Advisors’ allocation procedures.

In addition, we have adopted a formal code of ethics that governs the conduct of our and GC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the General Corporation Law of the State of Delaware.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

Fair Value Measurements

We value investments for which market quotations are readily available at their market quotations. However, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process.

Valuation methods may include comparisons of the portfolio companies to peer companies that are public, determination of the enterprise value of a portfolio company, discounted cash flow analysis and a market interest rate approach. The factors that are taken into account in fair value pricing investments include: available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; security covenants; call protection provisions; information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ

significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from values that may ultimately be received or settled.

Our board of directors is ultimately and solely responsible for determining, in good faith, the fair value of investments that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.

With respect to investments for which market quotations are not readily available, our board of directors undertakes a multi-step valuation process each quarter, as described below:


•	Our quarterly valuation process begins with each portfolio company investment being initially valued by the investment professionals of GC Advisors responsible for credit monitoring.


•	Preliminary valuation conclusions are then documented and discussed with our senior management and GC Advisors.


•	The audit committee of our board of directors reviews these preliminary valuations.


•	At least once annually, the valuation for each portfolio investment is reviewed by an independent valuation firm.


•	The board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith.

Determination of fair values involves subjective judgments and estimates. Under current accounting standards, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

We follow ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. Our fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the asset or liability. We assess the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and nine months ended June 30, 2017 and 2016. The following section describes the valuation techniques used by us to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

100

Valuation of Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by our board of directors, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of our valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. As of June 30, 2017 and September 30, 2016, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and investments measured at fair value using the NAV, all investments were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, we may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s EBITDA. A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, we will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, we use a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, we may base our valuation on indicative bid and ask prices provided by an independent third party pricing service. Bid prices reflect the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing to accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize significantly less than the value at which such investment had previously been recorded.

Our investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

Valuation of Secured Borrowings

We have elected the fair value option under ASC Topic 825 relating to accounting for debt obligations at their fair value for our secured borrowings which arise due to partial loan sales that do not meet the criteria for sale treatment under ASC Topic 860. All secured borrowings as of June 30, 2017 and September 30, 2016 were valued using Level 3 inputs under the fair value hierarchy, and our approach to determining fair value of Level 3 secured borrowings is consistent with our approach to determining fair value of the Level 3 investments that are associated with these secured borrowings as previously described.

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Valuation of Other Financial Assets and Liabilities

Fair value of our debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

Revenue Recognition:

Our revenue recognition policies are as follows:

Investments and Related Investment Income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments. Premiums, discounts, and origination fees are amortized or accreted into interest income over the life of the respective debt investment. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we do not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not likely to be collectible. In addition, we may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans and record these fees as fee income when received. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Distributions received from LLC and limited partnership, or LP, investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

We account for investment transactions on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in fair value of investments from the prior period that is measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments in our consolidated statements of operations.

Non-accrual: Loans may be left on accrual status during the period we are pursuing repayment of the loan. Management reviews all loans that become past due 90 days or more on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. We generally reverse accrued interest when a loan is placed on non-accrual. 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. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. We restore non-accrual loans to accrual status when past due principal and interest is paid and, in our management’s judgment, are likely to remain current. The total fair value of our non-accrual loans was $3.4 million as of June 30, 2017 and $1.3 million as of September 30, 2016.

Partial loan sales: We follow the guidance in ASC Topic 860, when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest”, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales that do not meet the definition of a participating interest remain on our statements of assets and liabilities and the proceeds are recorded as a secured borrowing until the definition is met. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.

Income taxes: See “Consolidated Results of Operations - Expenses - Excise Tax Expense.”

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate reset provisions that adjust applicable interest rates under such loans to current market rates on a quarterly basis. The loans that are subject to the floating LIBOR rates are also subject to a minimum base rate, or floor, that we charge on our loans if the current market rates are below the respective floors. As of June 30, 2017 and September 30, 2016, the weighted average LIBOR floor on the loans subject to floating interest rates was 1.03% and 1.04%, respectively. Prior to their redemption on October 20, 2016, the Class A 2010 Notes issued as part of the 2010 Debt Securitization had floating interest rate provisions based on three-month LIBOR that reset quarterly as do the Class A-Refi 2010 Notes issued in connection with the refinancing of the 2010 Debt Securitization. In addition, the Class A-1, A-2 and B 2014 Notes issued as part of the 2014 Debt Securitization have floating interest rate provisions based on three-month LIBOR that reset quarterly and the Credit Facility has a floating interest rate provision based on one-month LIBOR that resets daily. As of each of June 30, 2017 and September 30, 2016, the weighted average LIBOR floor on the secured borrowings, which reset quarterly, was 1.00%. We expect that other credit facilities into which we enter in the future may have floating interest rate provisions.

Assuming that the interim and unaudited consolidated statement of financial condition as of June 30, 2017 were to remain constant and that we took no actions to alter interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates.



Change in interest rates	Increase (decrease) in interest income			Increase (decrease) in interest expense			Net increase (decrease) in investment income
	(In thousands)
Down 25 basis points	$	(3,729	)	$	(1,490	)	$	(2,239	)
Up 50 basis points	8,145			2,979			5,166
Up 100 basis points	16,292			5,958			10,334
Up 150 basis points	24,437			8,937			15,500
Up 200 basis points	32,584			11,916			20,668

Although we believe that this analysis is indicative of our sensitivity to interest rate changes as of June 30, 2017, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowings under the Debt Securitizations and the Credit Facility, or other borrowings, that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above.

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

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Item 4: Controls and Procedures.

As of June 30, 2017 (the end of the period covered by this report), management, with the participation of 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 Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that, at the end of such period, our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic 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. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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Part II - Other Information

Item 1: Legal Proceedings.

Golub Capital BDC, GC Advisors and Golub Capital LLC are not currently subject to any material legal proceedings.

Item 1A: Risk Factors.

None.

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

None.

Item 3: Defaults Upon Senior Securities.

None.

Item 4: Mine Safety Disclosures.

None.

Item 5: Other Information.

None.

Item 6: Exhibits.

EXHIBIT INDEX




Number		Description

10.1		Joinder Supplement, dated as of May 2, 2017, by and among Golub Capital BDC Funding LLC, as the borrower; the lender identified therein, and Wells Fargo Securities, LLC, as the administrative agent.*
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

_________________

* Filed herewith

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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.



	Golub Capital BDC, Inc.

Dated: August 7, 2017	By	/s/ David B. Golub
		David B. Golub
		Chief Executive Officer
		(Principal Executive Officer)

Dated: August 7, 2017	By	/s/ Ross A. Teune
		Ross A. Teune
		Chief Financial Officer
		(Principal Accounting and Financial Officer)

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