CRESCENT CAPITAL BDC, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

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The information contained in this section should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this report. This
discussion also should be read in conjunction with the "Cautionary Statement
Regarding Forward Looking Statements" set forth on page 1 of this Quarterly
Report on Form 10-Q. In this report, "we," "us," "our" and "Company" refer to
Crescent Capital BDC, Inc. and its consolidated subsidiaries.

PREVIEW

We are a specialty finance company focused on lending to middle-market
companies. We were incorporated under the laws of the State of Delaware on
February 5, 2015 and on January 30, 2020, we changed our state of incorporation
from the State of Delaware to the State of Maryland. We have elected to be
treated as a BDC under the 1940 Act. In addition, we have elected to be treated
for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. As
such, we are required to comply with various regulatory requirements, such as
the requirement to invest at least 70% of our assets in "qualifying assets,"
source of income limitations, asset diversification requirements, and the
requirement to distribute annually at least 90% of our taxable income and
tax-exempt interest.

At January 31, 2020, we have entered into a transaction to acquire Alcentra capital company in connection with a cash and equity transaction (the “Alcentra Acquisition”). We were listed and started trading on the NASDAQ Stock Exchange to February 3, 2020.

We are managed by Crescent Cap Advisors, LLC (the "Adviser"), an investment
adviser that is registered with the SEC under the 1940 Act. CCAP Administration,
LLC (the "Administrator"), provides the administrative services necessary for us
to operate. Company management consists of investment and administrative
professionals from the Adviser and Administrator along with our Board. The
Adviser directs and executes our investment operations and capital raising
activities subject to oversight from the Board, which sets our broad policies.
The Board has delegated investment management of our investment assets to the
Adviser. The Board consists of five directors, four of whom are independent.

Our investment objective is to maximize the total return to our stockholders in
the form of current income and capital appreciation through debt and related
equity investments. We invest primarily in secured debt (including first lien,
unitranche first lien and second-lien debt) and unsecured debt (including
mezzanine and subordinated debt), as well as related equity securities of
private U.S. middle-market companies. We may purchase interests in loans or make
debt investments, either (i) directly from our target companies as primary
market or private credit investments (i.e., private credit transactions), or
(ii) primary or secondary market bank loan or high yield transactions in the
broadly syndicated "over-the-counter" market (i.e., broadly syndicated loans and
bonds). Although our focus is to invest in less liquid private credit
transactions, we may from time to time invest in more liquid broadly syndicated
loans to complement our private credit transactions.

"First lien" investments are senior loans on a lien basis to other liabilities
in the issuer's capital structure that have the benefit of a first-priority
security interest in assets of the issuer. The security interest ranks above the
security interest of any second-lien lenders in those assets.

"Unitranche first lien" investments are loans that may extend deeper in a
company's capital structure than traditional first lien debt and may provide for
a waterfall of cash flow priority among different lenders in the unitranche
loan. In certain instances, we may find another lender to provide the "first
out" portion of such loan and retain the "last out" portion of such loan, in
which case, the "first out" portion of the loan would generally receive priority
with respect to payment of principal, interest and any other amounts due
thereunder over the "last out" portion that we would continue to hold. In
exchange for the greater risk of loss, the "last out" portion earns a higher
interest rate.

"Second lien" investments are loans with a second priority lien on all existing
and future assets of the portfolio company. The security interest ranks below
the security interests of any first lien and unitranche first lien lenders in
those assets.

Investments in “unsecured debt” are loans that generally have priority over equity securities of a borrower and rank below the right of payment to other senior debts of that borrower.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of America
("GAAP"). The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses. Changes in the economic environment,
financial markets and any other parameters used in determining such estimates
could cause actual results to differ materially. The critical accounting
policies should be read in connection with our risk factors as disclosed herein.



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For a description of our critical accounting policies, see Note 2 "Significant
Accounting Policies" to our consolidated financial statements included in this
report. We consider the most significant accounting policies to be those related
to our Valuation of Portfolio Investments, Revenue Recognition, Non-Accrual
Investments, Distribution Policy, and Income Taxes.

COMPONENTS OF OPERATIONS

Investments

We expect our investment activity to vary substantially from period to period
depending on many factors, the general economic environment, the amount of
capital we have available to us, the level of merger and acquisition activity
for middle-market companies, including the amount of debt and equity capital
available to such companies and the competitive environment for the type of
investments we make. In addition, as part of our risk strategy on investments,
we may reduce certain levels of investments through partial sales or syndication
to additional investors.

We may not invest in any assets other than "qualifying assets" specified in the
1940 Act, unless, at the time the investments are made, at least 70% of our
total assets are qualifying assets (with certain limited exceptions). Qualifying
assets include investments in "eligible portfolio companies." Pursuant to rules
adopted by the SEC, "eligible portfolio companies" include certain companies
that do not have any securities listed on a national securities exchange and
public companies whose securities are listed on a national securities exchange
but whose market capitalization is less than $250 million.

The investment advisor

Our investment activities are managed by the Adviser, which is responsible for
originating prospective investments, conducting research and due diligence
investigations on potential investments, analyzing investment opportunities,
negotiating and structuring our investments and monitoring our investments and
portfolio companies on an ongoing basis. The Adviser has entered into a resource
sharing agreement with Crescent Capital Group LP ("Crescent"), pursuant to which
Crescent provides the Adviser with experienced investment professionals
(including the members of the Adviser's investment committee) and access to
Crescent's resources so as to enable the Adviser to fulfill its obligations
under the Investment Advisory Agreement. Through the resource sharing agreement,
the Adviser intends to capitalize on the deal origination, credit underwriting,
due diligence, investment structuring, execution, portfolio management and
monitoring experience of Crescent's investment professionals. On January 5,
2021, Sun Life Financial Inc. (together with its subsidiaries and joint
ventures, "Sun Life") acquired a majority interest in Crescent (the "Sun Life
Transaction"). There were no changes to our investment objective, strategies and
process or to the Crescent team responsible for the investment operations as a
result of the Sun Life Transaction.

Income

We generate revenue primarily in the form of interest income on debt
investments, capital gains and distributions, if any, on equity securities that
we may acquire in portfolio companies. Certain investments may have contractual
PIK interest or dividends. PIK represents accrued interest or accumulated
dividends that are added to the loan principal of the investment on the
respective interest or dividend payment dates rather than being paid in cash and
generally becomes due at maturity or upon being called by the issuer. PIK is
recorded as interest or dividend income, as applicable. We also generate revenue
in the form of commitment or origination fees. Loan origination fees, original
issue discount and market discount or premium are capitalized, and we accrete or
amortize such amounts into income over the life of the loan using the effective
yield method.

Dividend income from common equity securities is recorded on the record date for
private portfolio companies or on the ex-dividend date for publicly-traded
portfolio companies. Dividend income from preferred equity securities is
recorded on an accrual basis to the extent that such amounts are payable by the
portfolio company and are expected to be collected.

We may receive other income, which may include income such as consent, waiver,
amendment, underwriting, and arranger fees associated with our investment
activities as well as any fees for managerial assistance services rendered to
the portfolio companies. Such fees are recognized as income when earned or the
services are rendered.

Expenses

Our primary operating expenses include the payment of management fees and
incentive fees to the Adviser under the Investment Advisory Agreement, as
amended, our allocable portion of overhead expenses under the administration
agreement with our Administrator (the "Administration Agreement"), operating
costs associated with our sub-administration agreement and other operating costs
described below. The management and incentive fees compensate the Adviser for
its work in identifying, evaluating, negotiating, closing and monitoring our
investments. We bear all other out-of-pocket costs and expenses of our
operations and transactions, including:



     •    the cost of calculating our net asset value, including the cost of any
          third-party valuation services;




     •    fidelity bond, directors' and officers' liability insurance and other
          insurance premiums;




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• costs and expenses associated with independent audits and external legal services

          costs;




  •   independent directors' fees and expenses;




     •    administration fees and expenses, if any, payable under the

Administration Agreement (including payments based on our

part of the general expenses of the Director in the performance of his obligations

under the administration agreement, the rent and the attributable part of the

          cost of certain professional services provided to us, including but not
          limited to, our accounting professionals, our legal counsel and
          compliance professionals);




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




• the cost of realizing the sales and repurchases of shares of our ordinary shares

          and other securities;




     •    fees payable to third parties relating to making investments, including

reimbursable fees and expenses associated with the exercise of due diligence

          and reviews of prospective investments;




  •   out-of-pocket fees and expenses associated with marketing efforts;




  •   federal and state registration fees and any stock exchange listing fees;




  •   brokerage commissions;



• the costs associated with our reporting and compliance obligations under the

          1940 Act and other applicable U.S. federal and state securities laws;




     •    debt service and other costs of borrowings or other financing
          arrangements; and



• all other expenses reasonably incurred by us in connection with the realization

investments and administration of our company.


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.

Leverage

Our financing facilities allow us to borrow money and lever our investment
portfolio, subject to the limitations of the 1940 Act, with the objective of
increasing our yield. This is known as "leverage" and could increase or decrease
returns to our stockholders. The use of leverage involves significant risks.

Prior to the Small Business Credit Availability Act being signed into law, a BDC
generally was not permitted to incur indebtedness unless immediately after such
borrowing it has an asset coverage for total borrowings of at least 200%. The
Small Business Credit Availability Act, signed into law on March 23, 2018,
contains a provision that grants a BDC the option, subject to certain conditions
and disclosure obligations, to reduce the asset coverage requirement to 150%. On
March 3, 2020, our Board of Directors approved, and on May 4, 2020, at an annual
meeting of our stockholders, our stockholders approved, the application to us of
the reduced asset coverage requirements in Section 61(a) of the 1940 Act. The
application of the reduced asset coverage requirement, which became effective on
May 4, 2020, permits us, provided certain requirements are satisfied, to double
the maximum amount of leverage that it is permitted to incur by reducing the
asset coverage requirement applicable to us from 200% to 150% (i.e., we are
permitted to borrow up to two dollars for every dollar we have in assets less
all liabilities and indebtedness not represented by senior securities issued by
us) in order to issue senior securities. Short-term credits necessary for the
settlement of securities transactions and arrangements with respect to
securities lending will not be considered borrowings for these purposes. The
amount of leverage that we employ depends on our Adviser's and our Board's
assessment of market conditions and other factors at the time of any proposed
borrowing.

PORTFOLIO INVESTMENT ACTIVITY

We seek to create a broad and diversified portfolio that generally includes
senior secured first lien, unitranche, senior secured second lien, unsecured
loans and minority equity securities of U.S. middle market companies. The size
of our individual investments varies 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 have 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.



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As of September 30, 2021 and December 31, 2020, our portfolio at fair value was
comprised of the following:

$ in millions



                                              September 30, 2021                           December 31, 2020
Investment Type                         Fair Value            Percentage            Fair Value           Percentage
Senior Secured First Lien           $            349.8                30.7%      $          373.6                36.1%
Unitranche First Lien                            597.0               52.4                   413.6               40.0
Unitranche First Lien - Last Out                  13.5                1.2                    14.9                1.5
Senior Secured Second Lien                        56.4                5.0                   104.7               10.1
Unsecured Debt                                     5.4                0.5                     3.0                0.3
Equity & Other                                    57.9                5.1                    69.3                6.7
LLC/LP Equity Interests                           58.6                5.1                    54.9                5.3

Total investments                   $          1,138.6               100.0%      $        1,034.0               100.0%


The following table shows our investment activity by type of investment:

$ in millions



                                                  For the three months ended                                For the nine months ended
                                       September 30, 2021           September 30, 2020          September 30, 2021           September 30, 2020(1)
New investments at cost:
Senior Secured First Lien              $              36.4         $               30.4        $              101.0         $                  79.2
Unitranche First Lien                                114.1                         51.6                       252.2                           129.1
Unitranche First Lien - Last Out                        -                            -                           -                               -
Senior Secured Second Lien                              -                            -                           -                              9.4
Unsecured Debt                                          -                            -                          2.3                              -
Equity & Other                                         5.3                          2.1                         7.3                             2.1
LLC/LP Equity Interests                                2.7                           -                          4.9                             8.5

Total                                  $             158.5         $               84.1        $              367.7         $                 228.3

Proceeds from investments sold or
repaid:
Senior Secured First Lien              $              59.0         $               26.3        $              131.3         $                 127.2
Unitranche First Lien                                 14.5                          3.9                        77.4                            27.3
Unitranche First Lien - Last Out                        -                            -                           -                              0.2
Senior Secured Second Lien                             9.1                         10.1                        50.6                            18.8
Unsecured Debt                                         0.3                          6.6                         0.3                             6.6
Equity & Other                                        39.8                           -                         47.4                             0.4
LLC/LP Equity Interests                                0.1                           -                          2.6                             1.8

Total                                  $             122.8         $               46.9        $              309.6         $                 182.3

Net increase (decrease) in
portfolio                              $              35.7         $               37.2        $               58.1         $                  46.0




(1) Excludes $ 195.7 million assets at cost acquired under the

Acquisition of Alcentra. The assets acquired, at cost, consisted of

$ 82.2 million first privilege guaranteed first rank, $ 45.0 million unitranche first

privilege, $ 53.0 million of second guaranteed privilege of first rank, $ 1.2 million unsecured

debt and $ 14.3 million of equity investments.

The following table presents certain selected information concerning our portfolio of investments in September 30, 2021 and December 31, 2020:


                                                          September 30,       December 31,
                                                              2021                2020

Weighted average return on income-producing securities (at cost) (1)

                                                       7.6%               8.0%

Percentage of variable rate debt (at fair value)

                                                             99.7%    

98.4%

Percentage of debt bearing a fixed rate (at fair
value)                                                              0.3%               1.6%
Number of portfolio companies                                        132                132



(1) The return excludes investments in non-accounting status.



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The following table shows the amortized cost of our performing and non-accrual
debt and income producing debt securities as of September 30, 2021 and
December 31, 2020.

$ in millions



                                  September 30, 2021                                               December 31, 2020
                                                              % of Fair
                Cost         % of Cost       Fair Value         Value         Cost        % of Cost       Fair Value       % of Fair Value
Performing    $ 1,004.0           98.5%     $    1,010.5           98.9%     $ 899.2           98.3%     $      899.5                 98.7%
Non-Accrual        15.6            1.5%             11.7            1.1%        15.6            1.7%             12.1                  1.3%

Total         $ 1,019.6          100.0%     $    1,022.2          100.0%     $ 914.8          100.0%     $      911.6                100.0%


Loans are generally placed on non-accrual status when there is reasonable doubt
that principal or interest will be collected in full. Non-accrual loans are
restored to accrual status when past due principal and interest is paid current
and, in management's judgment, are likely to remain current. Management may
determine to not place a loan on non-accrual status if the loan has sufficient
collateral value and is in the process of collection.

As of September 30, 2021, we had investments in two portfolio companies with
three investment positions on non-accrual status, which represented 1.5% and
1.1% of the total debt investments at cost and fair value, respectively. As of
December 31, 2020, we had investments in two portfolio companies with three
investment positions on non-accrual status, which represented 1.7% and 1.3% of
the total debt investments at cost and fair value, respectively. The remaining
debt investments were performing and current on their interest payments as of
September 30, 2021 and December 31, 2020.

The Adviser monitors our portfolio companies on an ongoing basis. The Adviser
monitors the financial trends of each portfolio company to determine if it is
meeting its business plans and to assess the appropriate course of action for
each company. The Adviser has a number of methods of evaluating and monitoring
the performance and fair value of our investments, which may include the
following:



• evaluation of the success of the portfolio company in joining its activity

      plan and compliance with covenants;




  •   review of monthly and quarterly financial statements and financial
      projections for portfolio companies.



• contact with the management of the holding companies and, where applicable, the

      or strategic sponsor, to discuss financial position, requirements and
      accomplishments;




  •   comparisons to other companies in the industry; and




  •   attendance and participation in board meetings.

As part of the monitoring process, the Advisor regularly assesses the risk profile of each of our investments and, on a quarterly basis, rates each investment on a risk scale of 1 to 5. The risk assessment is not standardized in our industry and our risk assessment may not be comparable to those used by our competitors. Our assessment is based on the following categories:

1 Implies the least risk in our portfolio. The investor / borrower

performs above expectations since investing, and trends and risks

are generally favorable, which may include financial performance

    of the borrower or a potential exit.



2 Implies an acceptable level of risk which is similar to the current risk

investment. The investment / borrower generally behaves as expected,

    and the risk factors are neutral to favorable.



3 Involves an investment / borrower whose performance is below expectations and indicates

that the risk of the investment has increased somewhat since the investment. The

the borrower’s loan payments are generally not in arrears and it is more likely than not

the borrower will remain in compliance with the debt covenants. An investment

    rating of 3 requires closer monitoring.



4 Involves an investment / borrower whose performance is significantly lower than expected and

indicates that the risk of the loan has increased considerably since the investment. In

in addition to the fact that the borrower is generally not in good standing with the debt

covenants, loan payments may be in arrears (but usually no more than 180

days late). Placing loans on non-recognition status should be considered for

    investments rated 4.



5 Involves an investment / borrower whose performance is significantly lower than expected

and indicates that the risk of the loan has increased considerably since

investment. Most or all of the restrictive covenants are not in compliance and

the payments are substantially overdue. Loans rated 5 should not

be repaid in full and the fair market value of the loans is generally

reduced to the expected recovery amounts. Loans with an investment rating

    of 5 are generally placed on non-accrual status.




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The following table shows the composition of our portfolio on the 1 to 5
investment performance rating scale as of September 30, 2021 and December 31,
2020. Investment performance ratings are accurate only as of those dates and may
change due to subsequent developments relating to a portfolio company's business
or financial condition, market conditions or developments, and other factors.

$ in millions



                                                         September 30, 2021                                December 31, 2020
                                               Investments at           Percentage of            Investments at           Percentage of
Investment Performance Rating                    Fair Value            Total Portfolio             Fair Value            Total Portfolio
1                                             $            13.4                     1.2 %      $              9.8                     0.9 %
2                                                       1,003.7                    88.2                     895.1                    86.6
3                                                         109.8                     9.6                     117.0                    11.3
4                                                          11.7                     1.0                      12.1                     1.2
5                                                             -                       -                         -                       -

Total                                         $         1,138.6                   100.0 %      $          1,034.0                   100.0 %



RESULTS OF OPERATIONS

Operating results for the three and nine months ended September 30, 2021 and
2020 were as follows:

$ in millions



                                         For the three months ended                For the nine months ended
                                               September 30,                             September 30,
                                         2021                  2020               2021                  2020
Total investment income              $        25.5          $      18.7        $      69.8          $       56.8
Total net expenses                            12.8                  6.5               34.7                  20.1

Net investment income                $        12.7          $      12.2        $      35.1          $       36.7
Net realized gain (loss) on
investments                                   27.9                 (0.5 )             32.2                  (1.7 )
Net unrealized appreciation
(depreciation) on investments
and forward contracts                        (23.5 )               26.8                4.2                 (11.1 )

Net realized and unrealized
gains (losses)                       $         4.4          $      26.3        $      36.4          $      (12.8 )

Realized loss on asset
acquisition                                      -                    -                  -                  (3.8 )
Benefit/(Provision) for taxes on
realized and unrealized
appreciation (depreciation) on
investments                                   (0.4 )               (0.2 )             (0.7 )                 0.1

Net increase (decrease) in net
assets resulting from operations     $        16.7          $      38.3        $      70.8          $       20.2



Investment Income

$ in millions



                                         For the three months ended              For the nine months ended
                                                September 30,                          September 30,
                                         2021                  2020                2021                2020
Interest from investments            $        22.8         $        17.5       $        63.5         $   52.1
Dividend Income                                2.4                   1.2                 5.7              3.6
Other Income                                   0.3                     -                 0.6              1.1

Total investment income              $        25.5         $        18.7       $        69.8         $   56.8







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Interest income, which includes amortization of upfront fees, increased from
$17.5 million for the three months ended September 30, 2020 to $22.8 million for
the three months ended September 30, 2021, due to higher accelerated accretion
of OID and organic net deployment. Included in interest from investments for the
three months ended September 30, 2021 and 2020 are $3.9 million and $0.3 million
of accelerated accretion of OID related to paydown activity, respectively.

Dividend income increased from $1.2 million for the three months ended
September 30, 2020 to $2.4 million for the three months ended September 30, 2021
due to a one-time dividend distribution from a portfolio company. Other income
which includes consent, waiver, amendment, agency, underwriting and arranger
fees associated with our investment activities increased from $0 for the three
months ended September 30, 2020 to $0.3 million for the three months ended
September 30, 2021.

Interest income, which includes amortization of upfront fees, increased from
$52.1 million for the nine months ended September 30, 2020 to $63.5 million for
the nine months ended September 30, 2021, due to organic net deployment and
higher accelerated accretion of OID related to paydown activity. Included in
interest from investments for the nine months ended September 30, 2021 and 2020
are $7.0 million and $1.6 million of accelerated accretion of OID, respectively.

Dividend income increased from $3.6 million for the nine months ended
September 30, 2020 to $5.7 million for the nine months ended September 30, 2021
due to a one-time dividend distribution from a portfolio company. Other income
which includes consent, waiver, amendment, agency, underwriting and arranger
fees associated with our investment activities decreased from $1.1 million for
the nine months ended September 30, 2020 to $0.6 million for the nine months
ended September 30, 2021.

Expenses

$ in millions



                                                 For the three months ended            For the nine months ended
                                                        September 30,                        September 30,
                                                  2021                2020             2021                2020
Interest and other debt financing costs        $       5.7         $       3.5      $      14.5         $      11.5
Management fees                                        3.5                 2.9             10.1                 8.3
Income based incentive fees                            2.7                 2.1              7.5                 6.3
Capital gains based incentive fees                     0.8                   -              6.2                   -
Professional fees                                      0.5                 0.4              1.5                 1.1
Directors' fees                                        0.1                 0.1              0.4                 0.3
Other general and administrative expenses              0.7                 0.7              2.0                 1.8

Total expenses                                 $      14.0         $       9.7      $      42.2         $      29.3
Management fee waiver                                 (0.5 )              (1.2 )           (3.1 )              (3.4 )
Income based incentive fees waiver                    (0.9 )              (2.1 )           (5.8 )              (6.3 )

Net expenses                                   $      12.6         $       6.4      $      33.3         $      19.6
Income and excise taxes                                0.2                 0.1              1.4                 0.5

Total                                          $      12.8         $       6.5      $      34.7         $      20.1

Interest and other debt financing costs

Interest and other debt financing costs include interest, amortization of
deferred financing costs including upfront commitment fees and unused fees on
our credit facilities. For the three months ended September 30, 2021 and 2020
interest and other debt financing costs were $5.7 million and $3.5 million,
respectively. For the nine months ended September 30, 2021 and 2020 interest and
other debt financing costs were $14.5 million and $11.5 million, respectively.
The increase for both periods was due to a higher weighted average debt
outstanding, higher weighted average cost of debt and acceleration of certain
deferred financing costs.

Base Management Fees

For the three months ended September 30, 2021 and 2020, we incurred management
fees of $3.0 million and $1.7 million, respectively, which are net of waived
amounts of $0.5 million and $1.2 million, respectively. For the nine months
ended September 30, 2021 and 2020, we incurred management fees of $7.0 million
and $4.9 million, respectively, which are net of waived amounts of $3.1million
and $3.4 million, respectively. The increase in net management fees for both
three and nine month periods was driven by growing assets under management and
expiration of the management fee waiver on July 31, 2021.



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The Adviser has voluntarily waived its right to receive management fees on our
investments in GACP II LP and WhiteHawk III Onshore Fund LP for any period in
which these investments remain in the investment portfolio.

Incentive fees

For the three months ended September 30, 2021 and 2020 we incurred income based
incentive fees of $2.7 million and $2.1 million, of which $0.9 million and
$2.1 million, respectively, were waived. For the nine months ended September 30,
2021 and 2020 we incurred income based incentive fees of $7.5 million and
$6.3 million, of which $5.8 million and $6.3 million, respectively, were waived.
The increase in net incentive fees for both three and nine month periods was
driven by expiration of the income based incentive fee waiver on July 31, 2021.

For the three months ended September 30, 2021 and 2020 we accrued $0.8 million
and $0, respectively, of capital gains based incentive fees. For the nine months
ended September 30, 2021 and 2020 we accrued $6.2 million and $0, respectively,
of capital gains based incentive fees. As of September 30, 2021 and December 31,
2020, $6.2 million and $0, respectively, was accrued and unpaid. The increase in
incentive fees on cumulative unrealized capital appreciation was attributable to
the inception to date performance of the investment portfolio.

Professional fees and other general and administrative expenses

Professional fees generally include expenses from independent auditors, tax
advisors, legal counsel and third party valuation agents. Other general and
administrative expenses generally include overhead and staffing costs allocated
from the Administrator, insurance premiums, sub-administration expenses and
miscellaneous administrative costs associated with our operations and investment
activity.

For the three months ended September 30, 2021 and 2020, professional fees have been
$ 0.5 million and $ 0.4 million, respectively. For the nine months ended
September 30, 2021 and 2020, professional fees have been $ 1.5 million and
$ 1.1 million, respectively.

For the three months ended September 30, 2021 and 2020, other general and administrative expenses were $ 0.7 million and $ 0.7 million, respectively. For the nine months ended September 30, 2021 and 2020, other general and administrative expenses were $ 2.0 million and $ 1.8 million, respectively.

The increase in professional fees and other general and administrative expenses is attributable to servicing a growing investment portfolio.

Income and excise taxes

For the three months ended September 30, 2021 and 2020, we expensed income and
excise taxes of $0.2 million and $0.1 million. For the nine months ended
September 30, 2021 and 2020, we expensed income and excise taxes of $1.4 million
and $0.5 million. The increase in income and excise tax was attributable to
taxes due on allocated taxable income from an equity investment held in a
blocker. We accrued an offsetting tax distribution, which was declared by the
portfolio company, under dividend income.

Net investment income

For the three months ended September 30, 2021 and 2020, GAAP net investment
income was $12.7 million or $0.45 per share and $12.2 million or $0.43 per
share, respectively. The increase was due to higher accelerated amortization
income. For the nine months ended September 30, 2021 and 2020, GAAP net
investment income was $35.1 million or $1.25 per share and $36.7 million or
$1.33 per share, respectively. The decrease was due to accrued capital gains
based incentive fees recorded during current year.

For the three months ended September 30, 2021 and 2020, net investment income
excluding capital gains incentive fees ("Adjusted Net Investment Income"), was
$13.5 million or $0.48 per share and $12.2 million or $0.43 per share,
respectively. For the nine months ended September 30, 2021 and 2020, Adjusted
Net Investment Income was $41.3 million or $1.47 per share and $36.7 million or
$1.33 per share, respectively. The increase was due to a higher investment
income from a growing investment portfolio and higher accelerated amortization
income.



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The following table provides a reconciliation of net investment income (the most
comparable U.S. GAAP measure) to Adjusted Net Investment Income for the periods
presented:



                                              For the three months ended September 30,                          For the nine months ended September 30,
                                                2021                              2020                            2021                             2020
                                      Amount          Per Share          Amount        Per Share       Amount          Per Share          Amount        Per Share
GAAP net investment income          $     12.7       $      0.45       $   

12.2 $ 0.43 $ 35.1 $ 1.25 $ 36.7 $ 1.33
Capital gains incentive commission 0.8

              0.03                -               -           6.2               0.22               -     

Adjusted net investment income $ 13.5 $ 0.48 $

 12.2     $      0.43     $    41.3       $       1.47       $    36.7     $      1.33



On a supplemental basis, we are disclosing Adjusted Net Investment Income and
per share Adjusted Net Investment Income, each of which is a financial measure
that is calculated and presented on a basis of methodology other than in
accordance with U.S. GAAP ("non-GAAP"). Adjusted Net Investment Income
represents net investment income, excluding capital gains incentive fees. We use
this non-GAAP financial measure internally to analyze and evaluate financial
results and performance and believe that this non-GAAP financial measure is
useful to investors as an additional tool to evaluate ongoing results and trends
without giving effect to capital gains incentive fees. The Company's investment
advisory agreement provides that a capital gains-based incentive fee is
determined and paid annually with respect to realized capital gains (but not
unrealized capital appreciation) to the extent such realized capital gains
exceed realized capital losses and unrealized capital depreciation on a
cumulative basis. We believe that Adjusted Net Investment Income is a useful
performance measure because it reflects the net investment income produced on
the Company's investments during a period without giving effect to any changes
in the value of such investments and any related capital gains incentive fees
between periods. The presentation of Adjusted Net Investment Income is not
intended to be a substitute for financial results prepared in accordance with
GAAP and should not be considered in isolation.



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Net realized and unrealized gains and losses

We value our portfolio investments quarterly and any changes in fair value are
recorded as unrealized appreciation (depreciation) on investments. For the three
and nine months ended September 30, 2021 and 2020, net realized gains (losses)
and net unrealized appreciation (depreciation) on our investment portfolio were
comprised of the following:

$ in millions



                                                For the three months ended              For the nine months ended
                                                       September 30,                          September 30,
                                                 2021                 2020              2021                 2020
Realized losses on non-controlled and
non-affiliated investments                   $        (0.1 )       $         -      $       (0.2 )       $       (1.5 )
Realized gains on non-controlled and
non-affiliated investments                             0.5                   -               5.1                  0.4
Realized losses on non-controlled and
affiliated investments                                   -                (1.8 )               -                 (1.8 )
Realized gains on non-controlled and
affiliated investments                                27.5                 1.3              27.5                  1.3
Realized losses on foreign currency
forwards                                              (0.1 )                 -              (0.1 )               (0.3 )
Realized gains on foreign currency
forwards                                                 -                   -                 -                  0.2
Realized losses on foreign currency
transactions                                             -                   -              (0.2 )               (0.3 )
Realized gains on foreign currency
transactions                                           0.1                   -               0.1                  0.2

Net realized gains (losses) on investments $ 27.9 $ (0.5) $ 32.2 $ (1.8)

Change in unrealized depreciation on
non-controlled and non-affiliated
investments                                           (9.3 )                 -             (15.0 )              (21.0 )
Change in unrealized appreciation on
non-controlled and non-affiliated
investments                                           12.2                18.7              28.2                  0.8
Change in unrealized depreciation on
foreign currency translation                             -                (0.3 )               -                 (0.5 )
Change in unrealized appreciation on
foreign currency translation                             -                 0.6                 -                  0.5
Change in unrealized depreciation on
non-controlled and affiliated investments            (28.8 )              (0.5 )           (14.2 )               (1.0 )
Change in unrealized appreciation on
non-controlled and affiliated investments              0.6                 6.2               1.7                 15.0
Change in unrealized depreciation on
controlled and affiliated investments                    -                   -                 -                 (5.5 )
Change in unrealized appreciation on
controlled and affiliated investments                  0.3                 3.4               1.5                    -
Change in unrealized depreciation on
foreign currency forwards                                -                (1.3 )               -                 (0.1 )
Change in unrealized appreciation on
foreign currency forwards                              1.5                   -               2.0                  0.7

Net unrealized appreciation (depreciation)
on investments                                       (23.5 )              26.8               4.2                (11.1 )
Realized loss on asset acquisition                       -                   -                 -                 (3.8 )

Net realized and unrealized gains (losses) on investments and acquisition of assets $ 4.4 $ 26.3 $ 36.4 $ (16.7)



Hedging

We may, but are not required to, enter into interest rate, foreign exchange or
other derivative agreements to hedge interest rate, currency, credit or other
risks. Generally, we do not intend to enter into any such derivative agreements
for speculative purposes. Any derivative agreements entered into for speculative
purposes are not expected to be material to our business or results of
operations. These hedging activities, which are in compliance with applicable
legal and regulatory requirements, may include the use of various instruments,
including futures, options and forward contracts. We bear the costs incurred in
connection with entering into, administering and settling any such derivative
contracts. There can be no assurance any hedging strategy we employ will be
successful.

During the nine months ended September 30, 2021 and 2020, our average
we The notional dollar exposure to forward exchange contracts was
$ 70.1 million and $ 34.1 million, respectively.

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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

The primary uses of our cash and cash equivalents are for (1) investments in
portfolio companies and other investments; (2) the cost of operations (including
paying the Adviser); (3) debt service, repayment, and other financing costs; and
(4) cash distributions to the holders of our common stock. We expect to generate
additional liquidity from (1) future offerings of securities, (2) future
borrowings and (3) cash flows from operations.

As of September 30, 2021, we had $19.5 million in cash and cash equivalents and
restricted cash and cash equivalents and $173.1 million of undrawn capacity on
our senior revolving credit and special purpose vehicle asset facilities,
subject to borrowing base and other limitations. As of September 30, 2021, the
undrawn capacity under our facilities is in excess of our unfunded commitments.

As of September 30, 2021, we were in compliance with our asset coverage
requirements under the 1940 Act. In addition, we were in compliance with all the
financial covenant requirements of our credit facilities as of September 30,
2021. However, any increase in realized losses or unrealized depreciation of our
investment portfolio or significant reductions in our net asset value as a
result of the effects of the COVID-19 pandemic, increase the risk of breaching
the relevant covenants requirements. Any breach of these requirements may
adversely affect the access to sufficient debt and equity capital.

Share capital activity

Between June 26, 2015, commencement of operations, and January 31, 2020, the
date of Alcentra Acquisition, we entered into subscription agreements
(collectively, the "Subscription Agreements") with several investors, including
Crescent, providing for the private placement of our common shares. Pursuant to
the Subscription Agreements, between June 26, 2015 and January 31, 2020, we
issued 23,127,335 common shares for aggregate proceeds of $456.3 million, of
which $10.0 million was from Crescent. Proceeds from the issuances were used to
fund our investing activities and for other general corporate purposes.
Subsequently, on January 31, 2020, we issued 5,203,016 shares in connection with
the Alcentra Acquisition. Upon closing of the Alcentra Acquisition, all unfunded
commitments of stockholders subscribing in the private offering were terminated.

During the nine months ended September 30, 2021 we issued no common stock.
During the nine months ended September 30, 2020, we issued 30,128 shares of our
common stock to investors who have opted into our dividend reinvestment plan for
proceeds of $0.6 million.

Debt

Debt consisted of the following as of September 30, 2021 and December 31, 2020:

$ in millions



                                                                                             September 30, 2021
                                                                                                                                        Weighted                Weighted
                                                                                                                                         Average                Average
                                   Aggregate Principal             Drawn                  Amount                 Carrying                 Debt                  Interest
                                    Amount Committed              Amount              Available (1)              Value (2)             Outstanding                Rate
SPV Asset Facility                 $              350.0         $      276.7         $             73.3         $      276.7         $          263.6                  2.42 %
Corporate Revolving Facility                      200.0                100.2                       99.8                100.2                    101.6                  3.00 %
2023 Unsecured Notes                               50.0                 50.0                          -                 50.0                     50.0                  6.50 %
2026 Unsecured Notes                              135.0                135.0                          -                135.0                     87.8                  4.21 %
InterNotes®                                           -                    -                          -                    -                      4.0                     - %

Total Debt                         $              735.0         $      561.9         $            173.1         $      561.9         $          507.0                  3.32 %


                                                                                              December 31, 2020
                                                                                                                                        Weighted                Weighted
                                                                                                                                         Average                Average
                                   Aggregate Principal             Drawn                  Amount                 Carrying                 Debt                  Interest
                                    Amount Committed              Amount               Available (1)             Value (2)             Outstanding                Rate
SPV Asset Facility                 $              350.0         $      260.2         $             89.8         $      260.2         $          235.3                  2.63 %
Corporate Revolving Facility                      200.0                149.9                       50.1                149.9                    150.4                  2.93 %
2023 Unsecured Notes                               50.0                 50.0                          -                 50.0                     15.0                  6.49 %
InterNotes®                                        16.4                 16.4                          -                 16.4                     20.4                  6.40 %

Total Debt                         $              616.4         $      476.5         $            139.9         $      476.5         $          421.1                  3.26 %




(1) The amount available is subject to any limitation relating to

borrowing bases for credit facilities and currency conversion

adjustments.

(2) The amount presented excludes the compensation of deferred financing costs.



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SPV asset facility

On March 28, 2016, Crescent Capital BDC Funding, LLC ("CCAP SPV"), a wholly
owned subsidiary of CCAP, entered into a loan and security agreement, as amended
from time to time (the "SPV Asset Facility") with us as the collateral manager,
seller and equity holder, CCAP SPV as the borrower, the banks and other
financial institutions from time to time party thereto as lenders, and Wells
Fargo Bank, National Association ("Wells Fargo"), as administrative agent,
collateral agent, and lender. We consolidate CCAP SPV in our consolidated
financial statements and no gain or loss is recognized from the transfer of
assets to and from CCAP SPV.

The maximum commitment amount under the SPV Asset Facility is $350 million, and
may be increased with the consent of Wells Fargo or reduced upon our request.
Proceeds of the advances under the SPV Asset Facility may be used to acquire
portfolio investments, to make distributions to us in accordance with the SPV
Asset Facility, and to pay related expenses. The maturity date is the earlier of
(a) the date the borrower voluntarily reduces the commitments to zero, (b) June
22, 2026 and (c) the date upon which Wells Fargo declares the obligations due
and payable after the occurrence of an Event of Default. Borrowings under the
SPV Asset Facility bear interest at LIBOR plus a margin with no LIBOR floor. The
margin is between 1.65% and 2.10% as determined by the proportion of liquid and
illiquid loans pledged to the SPV Asset Facility. We pay unused facility fees of
0.50% per annum on committed but undrawn amounts under the SPV Asset Facility.
The unused facility fee rate may vary based on the utilization. The SPV Asset
Facility includes customary covenants, including certain limitations on the
incurrence of additional indebtedness and liens, as well as usual and customary
events of default for revolving credit facilities of this nature.

The facility size is subject to availability under the borrowing base, which is
based on the amount of CCAP SPV's assets from time to time, and satisfaction of
certain conditions, including an asset coverage test and certain concentration
limits.

Business revolving facility

On August 20, 2019, we entered into the "Corporate Revolving Facility" with Ally
Bank, as Administrative Agent and Arranger. Proceeds of the advances under the
Revolving Credit Agreement may be used to acquire portfolio investments, to make
distributions to us in accordance with the Revolving Credit Agreement and to pay
related expenses. The maximum principal amount of the Corporate Revolving
Facility is $200 million, subject to availability under the borrowing base.

Borrowings under the Corporate Revolving Facility bear interest at LIBOR plus a
2.35% margin with no LIBOR floor. We pay unused facility fees of 0.50% per annum
on committed but undrawn amounts under the Corporate Revolving Facility. The
unused facility fee rate may vary based on the utilization. Interest is payable
quarterly in arrears. Any amounts borrowed under the Corporate Revolving
Facility, and all accrued and unpaid interest, will be due and payable, on
August 20, 2024.

2023 unsecured notes

On July 30, 2020, we completed a private offering of $50.0 million aggregate
principal amount of 5.95% senior unsecured notes due July 30, 2023 (the "2023
Unsecured Notes"). The 2023 Unsecured Notes were issued in two $25.0 million
issuances on July 30, 2020 and October 28, 2020.

The 2023 Unsecured Notes will mature on July 30, 2023 and may be redeemed in
whole or in part, at our option, at any time or from time to time at par plus a
"make-whole" premium, if applicable. Interest on the 2023 Unsecured Notes is due
and payable semiannually in arrears on January 30th and July 30th of each year.
As of September 30, 2021, we were in compliance with the terms of the note
purchase agreement governing the 2023 Unsecured Notes.



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2026 Unsecured Notes

At February 17, 2021, we made a private offer of $ 135,000 aggregate principal amount of 4.00% senior unsecured notes due February 17, 2026 (the “2026 Unsecured Notes”). The initial issue of $ 50,000 from 2026 Unsecured notes closed February 17, 2021. Deliverance from the rest $ 85,000 2026 unsecured notes closed on May 5, 2021.

The 2026 Unsecured Notes will mature on February 17, 2026 and may be redeemed in
whole or in part, at our option, at any time or from time to time at par plus a
"make-whole" premium, if applicable. Interest on the 2026 Unsecured Notes is due
and payable semiannually in arrears on February 17th and August 17th of each
year. As of September 30, 2021, we were in compliance with the terms of the note
purchase agreement governing the 2026 Unsecured Notes.

InterNotes®

On January 31, 2020, in connection with the Alcentra Acquisition, we assumed
direct unsecured fixed interest rate obligations or "InterNotes®". The
InterNotes® bore interest at fixed interest rates ranging between 6.25% and
6.75% and offered a variety of maturities ranging between February 15, 2021 and
April 15, 2022. We redeemed or paid down the remaining $16.4 million of
InterNotes® during the first quarter of 2021.

The summary of costs incurred in connection with the SPV Asset Facility,
Corporate Revolving Facility, 2023 Unsecured Notes, 2026 Unsecured Notes and
InterNotes® for the three and nine months ended September 30, 2021 and 2020, is
presented below:

$ in millions



                                           For the three months ended              For the nine months ended
                                                 September 30,                           September 30,
                                           2021                 2020                2021                2020
Borrowing interest expense             $         4.2        $         2.9       $       11.7        $        9.9
Unused facility fees                             0.3                  0.2                0.8                 0.6
Amortization of financing costs                  1.2                  0.4                2.0                 1.0

Total interest and other debt
financing costs                        $         5.7        $         3.5       $       14.5        $       11.5

Weighted average outstanding
balance                                $       507.1        $       410.9       $      529.8        $      405.9


To the extent we determine that additional capital would allow us to take
advantage of additional investment opportunities, if the market for debt
financing presents attractively priced opportunities, or if our Board otherwise
determines that leveraging our portfolio would be in our best interest and the
best interests of our stockholders, we may enter into new debt financing
opportunities in addition to our existing debt. The pricing and other terms of
any such opportunities would depend upon market conditions and the performance
of our business, among other factors.

In accordance with applicable SEC staff guidance and interpretations, effective
May 5, 2020 with shareholder approval, we, as a BDC, are permitted to borrow
amounts such that our asset coverage ratio is at least 150% after such borrowing
(if certain requirements are met), rather than 200%, as previously required.
Short-term credits necessary for the settlement of securities transactions and
arrangements with respect to securities lending will not be considered
borrowings for these purposes. The amount of leverage that we employ depends on
our Adviser's and our Board's assessment of market conditions and other factors
at the time of any proposed borrowing.

As of September 30, 2021 and December 31, 2020, our asset coverage ratio was
205% and 217%, respectively. We may also refinance or repay any of our
indebtedness at any time based on our financial condition and market conditions.
See Note 6. Debt to our consolidated financial statements for more detail on the
debt facilities.

STOCK REPURCHASE PROGRAM

On January 31, 2020, we entered into a $20.0 million repurchase plan which
allowed us to purchase shares in the open market any time our common stock
traded below 90% of the most recently disclosed net asset value per share. The
plan was subject to compliance with our liquidity, covenant, leverage and
regulatory requirements. Pursuant to the terms of the repurchase plan,
repurchases began on March 2, 2020. On April 9, 2020, our Board of Directors
unanimously approved the termination of the stock repurchase program.



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There was no stock repurchased for the nine months ended September 30, 2021. For
the nine months ended September 30, 2020, we repurchased 192,415 shares at an
average price per share, including commissions, of $11.48.

OFF-BALANCE SHEET ARRANGEMENTS

Our investment portfolio may contain investments that are in the form of lines
of credit or unfunded commitments which require us to provide funding when
requested by portfolio companies in accordance with the terms of the underlying
agreements. Unfunded commitments to provide funds to portfolio companies are not
reflected on our Consolidated Statements of Assets and Liabilities. These
commitments are subject to the same underwriting and ongoing portfolio
maintenance as are the on-balance sheet financial instruments that we hold.
Since these commitments may expire without being drawn, the total commitment
amount does not necessarily represent future cash requirements. As of
September 30, 2021 and December 31, 2020, we had aggregate unfunded commitments
totaling $166.3 million and $80.8 million, respectively.

RECENT DEVELOPMENTS

On October 27, 2021, we entered into a senior secured revolving credit agreement
(the "SMBC Corporate Revolving Facility") with Sumitomo Mitsui Banking
Corporation, as Administrative Agent, Collateral Agent and Lender and
concurrently terminated our $200.0 million Corporate Revolving Facility with
Ally Bank. The maximum principal amount of the SMBC Corporate Revolving Facility
is $300.0 million, subject to availability under the borrowing base. Borrowings
under the SMBC Corporate Revolving Facility bear interest at LIBOR plus 1.875%
or 2.000%, subject to certain provisions in the SMBC Corporate Revolving
Facility agreement, with no LIBOR floor. Any amounts borrowed under the SMBC
Corporate Revolving Facility, and all accrued and unpaid interest, will be due
and payable, on October 27, 2026.

On November 5, 2021, our Board of Directors declared the following cash
dividends:



   Cash Dividend Type      Record Date         Payment Date       Amount Per Share
        Regular         December 31, 2021    January 17, 2022    $             0.41
        Special         December 3, 2021    December 15, 2021    $             0.05
        Special           March 4, 2022       March 15, 2022     $             0.05
        Special           June 3, 2022        June 15, 2022      $             0.05
        Special         September 2, 2022   September 15, 2022   $             0.05




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