Debt

6 Months Ended

Jun. 30, 2025

6. DEBT

On May 2, 2019, the Initial Member approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the Investment Company Act to the Company and such election became effective the following day. As a result of this approval, the Company is currently allowed to borrow amounts such that its asset coverage ratio, as defined in the Investment Company Act, is at least 150% after such borrowing (if certain requirements are met). As of June 30, 2025 and December 31, 2024, the Company’s asset coverage ratio based on the aggregate amount outstanding of senior securities was 243% and 210%.

The Company’s outstanding debt was as follows:


	June 30, 2025						December 31, 2024
	Aggregate Borrowing Amount Committed		Amount Available		Carrying Value		Aggregate Borrowing Amount Committed		Amount Available		Carrying Value
JPM Revolving Credit Facility(1)	$	1,250,000	$	470,646	$	779,990	$	1,250,000	$	249,527	$	1,000,612
Total debt	$	1,250,000	$	470,646	$	779,990	$	1,250,000	$	249,527	$	1,000,612

(1)

Provides, under certain circumstances, a total borrowing capacity of $2,000,000. The Company may borrow amounts in USD or certain other permitted currencies. Debt outstanding denominated in currencies other than USD has been converted to USD using the applicable foreign currency exchange rate as of the applicable reporting date. As of June 30, 2025, the Company had outstanding borrowings denominated in USD of $774,500 and in GBP of GBP 4,000. As of December 31, 2024, the Company had outstanding borrowings denominated in USD of $995,500, in CAD of CAD 150 and in GBP of GBP 4,000.

The weighted average interest rate of the aggregate borrowings outstanding for the six months ended June 30, 2025 was 6.60% and for the year ended December 31, 2024 was 7.94%. The weighted average debt of the aggregate borrowings outstanding for the six months ended June 30, 2025 was $872,345 and for the year ended December 31, 2024 was $1,249,042.

MUFG Revolving Credit Facility

The Company entered into the MUFG Revolving Credit Facility on May 7, 2019 with MUFG Bank Ltd., as administrative agent (the “Administrative Agent”), lead arranger, letter of credit issuer and lender. The Company amended the MUFG Revolving Credit Facility on numerous occasions between July 31, 2019 and May 4, 2023. The MUFG Revolving Credit Facility matured on May 3, 2024 and was terminated in accordance with its terms.

Subject to availability under the “Borrowing Base,” the maximum principal amount of the MUFG Revolving Credit Facility was $50,050 until May 3, 2024. The Borrowing Base was calculated based on the unfunded capital commitments of the investors meeting various eligibility requirements (subject to investor concentration limits) multiplied by specified advance rates. The stated maturity date of the MUFG Revolving Credit Facility was May 3, 2024, following the Company’s exercise of its maturity extension on October 5, 2023.

As of June 30, 2025 and December 31, 2024, there were no amounts outstanding under the MUFG Revolving Credit Facility.

Proceeds from the MUFG Revolving Credit Facility were used for investments, working capital, expenses and general corporate purposes (including to pay dividends or distributions).

Under the MUFG Revolving Credit Facility, the Company had the ability to elect, for loans denominated in U.S. Dollars, either Term SOFR with a one-, three- or, if available, six-month tenor or the alternative base rate at the time of draw-down (and with respect to loans denominated in non-U.S. Dollar currencies, the applicable benchmark specified in the MUFG Revolving Credit Facility), and loans denominated in U.S. Dollars may have been converted from one rate to another at any time, subject to certain conditions. The interest rate on obligations under the MUFG Revolving Credit Facility was (A) Term Loan plus a credit adjustment spread for the applicable tenor (or other listed offered rate, depending upon the currency of borrowing) plus 2.75% per annum or (B) an alternative base rate (the greatest of the prime rate set by MUFG Bank, Ltd., the federal funds rate plus 0.50%, and Term SOFR with a one-month tenor plus 1.00% (“ABR”)) plus 1.75% per annum. The Company paid a 0.35% annualized fee on a quarterly basis on committed but undrawn amounts under the MUFG Revolving Credit Facility.

Amounts drawn under the MUFG Revolving Credit Facility may have been prepaid at any time without premium or penalty, subject to applicable breakage costs. Loans were subject to mandatory prepayment for amounts exceeding the Borrowing Base or the lenders’ aggregate commitment and to the extent required to comply with the Investment Company Act, as applied to BDCs. Transfers of interests in the Company by investors were subject to certain restrictions under the MUFG Revolving Credit Facility. In addition, any transfer of Units from a Unitholder whose undrawn commitments were included in the Borrowing Base to a Unitholder that was not eligible to be included in the Borrowing Base (or that was eligible to be included in the Borrowing Base at a lower advance rate) may have triggered mandatory prepayment obligations.

The MUFG Revolving Credit Facility was secured by a perfected first priority security interest in the unfunded capital commitments of the Company’s investors (with certain exceptions) and the proceeds thereof, including an assignment of the right to make capital calls, receive and apply capital contributions, and enforce remedies and claims related thereto, and a pledge of the collateral account into which capital call proceeds were deposited. Additionally, under the MUFG Revolving Credit Facility, in certain circumstances after an event of default, the Administrative Agent would have been able to require investors to fund their capital commitments directly to the Administrative Agent for the purposes of repaying the loans, but lenders could not seek recourse against a Unitholder in excess of such Unitholder’s obligation to contribute capital to the Company.

The MUFG Revolving Credit Facility contained customary representations, warranties, and affirmative and negative covenants, including without limitation, representations and covenants regarding treatment as a RIC under the Code and as a BDC under the Investment Company Act and restrictions on the Company’s ability to make certain distributions, to incur additional indebtedness, to incur any liens on the collateral and to permit certain transfers of Unitholders’ ownership interest in the Units. The MUFG Revolving Credit Facility included customary conditions precedent to the draw-down of loans and customary events of default.

Costs of $6,051 were incurred in connection with obtaining and amending the MUFG Revolving Credit Facility and exercising its right under the accordion feature, which have been recorded as deferred financing costs in the Consolidated Statements of Financial Condition and are being amortized over the life of the MUFG Revolving Credit Facility using the straight-line method. As of June 30, 2025 and December 31, 2024, outstanding deferred financing costs were $0 and $0.

The following table presents the summary information of the MUFG Revolving Credit Facility:


	For the Three Months Ended					For the Six Months Ended
	June 30, 2025		June 30, 2024			June 30, 2025		June 30, 2024
Borrowing interest expense	$	—	$	—		$	—	$	—
Facility fees		—		(22	)		—		27
Amortization of financing costs		—		19			—		73
Total	$	—	$	(3	)	$	—	$	100
Weighted average interest rate	—%		—%			—%		—%
Average outstanding balance	$	—	$	—		$	—	$	—

JPM Revolving Credit Facility

On September 24, 2020, SPV entered into the JPM Revolving Credit Facility. JPMorgan Chase Bank, National Association (“JPM”) serves as administrative agent, U.S. Bank Trust Company, National Association serves as collateral agent and collateral administrator, U.S. Bank National Association serves as securities intermediary and the Company serves as portfolio manager under the JPM Revolving Credit Facility. The Company amended the JPM Revolving Credit Facility on numerous occasions between February 12, 2021 and November 22, 2024.

Borrowings under the JPM Revolving Credit Facility bear interest (at SPV’s election) at a per annum rate equal to (x) Term SOFR (or the applicable benchmark for loans denominated in non-U.S. Dollar currencies) plus a credit spread adjustment of 0.15% (or other listed offered rate, depending upon the currency of borrowing) in effect and, (y) to the extent Term SOFR is unavailable, a rate per annum equal to the greater of (i) the prime rate of JPM in effect on such day and (ii) the Federal Funds Effective Rate in effect on such day plus 0.50%, in each case, plus the applicable margin. The applicable margin is 2.05% per annum. SPV will also pay a commitment fee of 0.55% per annum on the average daily unused amount of the financing commitments until the last day of the reinvestment period (as defined in the JPM Revolving Credit Facility), and an administrative fee of 0.20% per annum on the average daily commitment until the maturity date. The JPM Revolving Credit Facility is a multicurrency facility. As of June 30, 2025, the total commitments under the JPM Revolving Credit Facility were $1,250,000. The JPM Revolving Credit Facility also has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the JPM Revolving Credit Facility to $2,000,000. All amounts outstanding under the JPM Revolving Credit Facility must be repaid by September 24, 2026, the stated scheduled termination date of the JPM Revolving Credit Facility, subject to a six-month extension of the maturity date with the consent of the administrative agent at such time.

SPV’s obligations to the lenders under the JPM Revolving Credit Facility are secured by a first priority security interest in all of SPV’s portfolio of investments and cash. The obligations of SPV under the JPM Revolving Credit Facility are non-recourse to the Company, and the Company’s exposure under the JPM Revolving Credit Facility is limited to the value of the Company’s investment in SPV.

In connection with the JPM Revolving Credit Facility, SPV has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The JPM Revolving Credit Facility contains customary events of default for similar financing transactions, including if a change of control of SPV occurs or if the Company is no longer the portfolio manager of SPV. Upon the occurrence and during the continuation of an event of default, JPM may declare the outstanding advances and all other obligations under the JPM Revolving Credit Facility immediately due and payable. As of June 30, 2025, the Company was in compliance with these covenants.

Costs of $15,065 were incurred in connection with obtaining the JPM Revolving Credit Facility, which have been recorded as deferred financing costs in the Consolidated Statements of Financial Condition and are being amortized over the life of the JPM Revolving Credit Facility using the straight-line method. As of June 30, 2025 and December 31, 2024, outstanding deferred financing costs were $3,838 and $5,353.

The following table presents the summary information of the JPM Revolving Credit Facility:


	For the Three Months Ended						For the Six Months Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Borrowing interest expense	$	13,028		$	26,465		$	28,544		$	54,555
Facility fees		1,099			1,410			2,465			2,717
Amortization of financing costs		776			775			1,559			1,544
Total	$	14,903		$	28,650		$	32,568		$	58,816
Weighted average interest rate		6.59	%		8.13	%		6.60	%		8.15	%
Average outstanding balance	$	793,293		$	1,308,743		$	872,345		$	1,346,461

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Goldman Sachs Private Middle Market Credit II LLC 10-Q