Antares Historical Default Rate & Loss Performance Disclosures

Sources of data include (i) unaudited carve-out financial information prepared by General Electric Capital Corporation (“GE Capital”) in connection with its divestiture of its Antares division (“Antares Division”) and certain other assets on August 21, 2015 (the “Divestiture Date”), (ii) post-divestiture audited and unaudited financial information prepared by Antares Holdings LP, together with its consolidated subsidiaries whose equity securities or whose subordinated notes or other interests that constitute the economic equity therein, as applicable, are directly or indirectly majority owned by Antares Holdings LP (the “Platform Balance Sheet”), (iii)  with respect to loans (“MMGP Loans”) held under the Middle Market Growth Program (“MMGP”) entered into by General Electric Capital Corporation with LStar Financing Investments, Ltd. (Bermuda) and LStar Financial Investments, LLC (Delaware) and as restructured and recapitalized post-divestiture, unaudited financial information held by the Platform Balance Sheet with respect thereto, (iv) prior to March 31, 2019 with respect to loans (“ABCS Loans”) held under the Antares Bain Capital Complete Financing Solution joint venture (“ABCS”) entered into by an affiliate of the Platform Balance Sheet with Bain Capital Credit, audited and unaudited financial information prepared by the Platform Balance Sheet and (v) commencing in 2017, with respect to the Private Credit Composite Portfolio (as defined below), unaudited financial information prepared by the Platform Balance Sheet and third-party fund administrators.

Defined Terms:

“ACA” means Antares Capital Advisers LLC.

“ACCA” means Antares Capital Credit Advisers LLC

“ALCS” means Antares Liquid Credit Strategies LLC

“ALS” means Antares Liquidity Solutions LLC

“Antares Core Business Loans” means, collectively, (i) Private Credit loans made by the Antares Division and the Platform Balance Sheet consisting of senior secured loans (including, without limitation, first lien loans, second lien loans and unitranche loans) to private equity sponsored companies, (ii) on and after December 31, 2014, MMGP Loans (iii) on and after the Divestiture Date, commercial loans made through GE Capital businesses, other than Antares Division, whose assets were combined with the Antares Division as part of the GE Capital divestiture, and (iv) on and after November 30, 2017 through March 31, 2019, ABCS Loans.

“Default Event” means (i) a payment default on principal or interest occurred and was continuing for no less than 90 days, (ii) a bankruptcy event occurred or (iii) such loan was written down or forgiven, in whole or in part, or its lien position subordinated in connection with a distressed restructuring or exchange or otherwise, or (iv) failure to recover the full principal balance of the loan after collection efforts have been substantially exhausted  (e.g. sale of the business, liquidation, or final partial repayment below par).

“Defaulted Loan” means Antares Core Business Loans or Private Credit Composite Loans with respect to which a Default Event occurred on or after January 1, 2007.

“Defaulted Loan Balance” means for any Defaulted Loan on any applicable date of determination, the funded, outstanding principal balance of such loan. The Defaulted Loan Balance includes over-advances outstanding with respect to revolving loans and excludes undrawn letters of credit.

“Invested Capital” is calculated as the sum of (i) the  ending aggregate loan balance of the Antares Core Business Loans as of December 31, 2016 of $13.1B, plus (ii) from and after January 1, 2017, cumulative funded new money at the time of close for originations of Antares Core Business Loans (excluding maturity extensions and refinances) marked as held for investment by the Platform Balance Sheet, plus, for Private Credit Composite Loans, (iii) from and after January 1, 2017, cumulative funded amount at the time of purchase for ACA advised portfolios, and (iv) purchases of investments per the consolidated statements of cash flows for ACCA advised portfolios (i.e., BDCs).

“Liquid Credit” to the broadly syndicated loans and high yield bonds held within vehicles managed by Antares Liquid Credit Strategies LLC (“ALCS”) or Antares Capital Credit Advisers LLC (“ACCA”).

“Net Credit Costs” means the aggregate amount of accounting reserves recorded through the Realization Date, net of reversals of accounting reserves related to cash receipts up to the amount of the aggregate reserve (upon receipt of cash proceeds). Net Credit Costs are adjusted to (i) exclude impacts of purchase accounting resulting from the August 2015 purchase of the Antares Division and other assets from GE Capital, (ii) include gains and losses on equity positions received as part of a distressed restructuring or exchange of a Defaulted Loan, and (iii) include estimated Net Credit Costs for a single unitranche loan that became a Defaulted Loan in 2016.

“Private Credit” refers to the business of arranging, structuring and/or investing in senior secured loans of private equity sponsored middle-market companies (known as “Private Credit”). Private Credit excludes Liquid Credit but can include broadly syndicated loans either originated or purchased by the Antares Lending Platform.

“Private Credit Composite Portfolio” refers to the portfolio comprised of Private Credit loans (“Private Credit Composite Loans”) which are held by discretionary portfolios advised by ACA and ACCA that employ substantially similar investment policies, objectives, and strategies in that they invest in term loans and unfunded obligations such as delayed draw term loans and revolvers. The Private Credit Composite Portfolio does not include loans held in non-discretionary advised portfolios or portfolios of advised clients whose investment strategy is to invest solely in unfunded obligations. If such loans were included, the Loss Rate and Default Rate shown would differ.  The Private Credit Composite Portfolio pertains to Antares’ Private Credit strategy.

“Realization Date” refers to the date(s) on which a Defaulted Loan became Realized, in whole or in part. Note that prior to 2024, such date coincides with the year in which collection efforts were deemed to have been substantially exhausted.

“Realized” refers to a Defaulted Loan that as of the reporting date, has been (i) restructured resulting in a write-down or forgiveness of legal principal, or  (ii) repaid, refinanced, or in the event where principal was not fully recovered, where collection efforts have been substantially exhausted (e.g. sale of the business, liquidation, or final partial repayment below par).

“Realized Loss” means for any Realized loan, as of the reporting date (i) the Net Credit Costs  for Antares Core Business Loans, and (ii) proceeds (including the fair value of restructured securities, if applicable) less amortized cost for Private Credit Composite Loans; in all cases net of cash interest received over the life of the loan through the applicable Realization Date.

Antares Default Rate

“Default Rate” is the quotient of (i) cumulative Defaulted Loan Balance divided by (ii) cumulative Invested Capital, annualized by dividing such result by the number of years since 2007, as of the reporting period.

Antares Loss Rate

“Loss Rate” is the quotient of (i) cumulative Realized Losses divided by (ii) cumulative Invested Capital, annualized by dividing such result by the number of years since 2007, as of the reporting period.

Note: Loss performance pertains only to Antares Core Business Loans and Private Credit Composite Loans; Gains or losses associated with investments other than such loan positions, including without limitation, equity investment in borrowers (or their affiliates) other than equity positions received as part of a debt-to-equity conversion, and unrealized loans, are excluded.