HispanicBusiness

Since December 31, 2012 in the current March 2013 quarter, we have completed six new investments aggregating $142.5 million.

•On January 11, 2013, we provided $27.1 million of debt financing to CHC Companies, Inc., a national provider of correctional medical and behavioral healthcare solutions.

•On January 17, 2013, we made a $30.3 million follow-on investment in APH, to acquire 5100 Live Oaks Blvd, LLC, a multi-family residential property located in Tampa, Florida. We invested $2.7 million of equity and $27.6 million of debt in APH.

•On January 24, 2013, we made an investment of $24.3 million to purchase subordinated notes in Cent 17 CLO Limited.

•On January 24, 2013, we made an investment of $25.7 million to purchase subordinated notes in Octagon Investment Partners XV, Ltd.

•On January 29, 2013, we provided $8.0 million of secured second lien financing to TGG Medical Transitory, Inc., a developer of technologies for extracorporeal photopheresis treatments.

•On January 31, 2013, we funded the acquisition of the subsidiaries of Nationwide Acceptance Corporation, an auto finance business, with $25.2 million of combined debt and equity financing.

•On February 5, 2013, we made a secured debt investment of $2.0 million in Healogics, Inc., a provider of outpatient wound care management services located in Jacksonville, Florida. On the same day we fully exited the deal and realized a gain of approximately $0.1 million on this investment.



We are pleased with the overall credit quality of our portfolio, with many of our companies generating year-over-year and sequential growth in top-line revenues and bottom-line profits. None of our loans originated in over five years has gone on non-accrual status. The fair market value of our loan assets on non-accrual as a percentage of total assets stood at approximately 1.1% on December 31, 2012, down from 1.9% on June 30, 2012 and 3.5% on June 30, 2011.

During calendar year 2012, we received significant dividend and interest income from our ESHI investment. We expect our income from ESHI in calendar year 2013 to be significantly less than such income in calendar year 2012. We are looking to offset this decrease by utilizing existing liquidity and prudent leverage to finance our growth through new originations, including attractive yielding investments in the financial services and other sectors.

Because of the performance of several controlled positions in our portfolio, we have selectively monetized certain such companies and may monetize other positions if we identify attractive opportunities for exit. As such exits materialize, we expect to reinvest such proceeds into new income-producing opportunities. We are pleased with the performance of our controlled portfolio companies, and are actively exploring other new investment opportunities at attractive multiples of cash flow.

Our advanced investment pipeline aggregates more than $400 million of potential opportunities. These investments are primarily secured investments with double-digit coupons, sometimes coupled with equity upside through additional investments, diversified across multiple sectors.

Our diversified approach covers multiple business segments, including agented sponsor finance, club and syndicated finance, agented direct lending, structured credit, real estate yield, and controlled debt and equity investments. This diversity allows us to source a broad range and high volume of opportunities, then select in a disciplined bottoms-up manner the opportunities we deem to be the most attractive on a risk-adjusted basis.