Crescent Capital BDC, Inc. (Exact Name of Registrant As Specified in Its Charter)
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One) È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2016 or ‘ 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 814-01132 Crescent Capital BDC, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware 47-3162282 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 11100 Santa Monica Blvd., Suite 2000, Los Angeles, CA 90025 (Address of Principal Executive Offices) (Zip Code) Registrant’s Telephone Number, Including Area Code: (310) 235-5900 Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share (Title of class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ‘ No È Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È 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 È No ‘ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ‘ No ‘ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ‘ Accelerated filer ‘ Non-Accelerated filer È (Do not check if a smaller reporting company) Smaller reporting company ‘ Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ‘ No È The number of shares of the Registrant’s common stock, $.001 par value per share, outstanding at March 24, 2017 was 7,121,596. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant’s proxy statement for the 2016 annual meeting of stockholders are incorporated by reference in Part III. CRESENT CAPITAL BDC, INC. INDEX TO ANNUAL REPORT ON FORM 10-K FOR YEAR ENDED DECEMBER 31, 2016 PAGE PART I ITEM 1. Business ................................................................. 2 ITEM 1A. Risk Factors .............................................................. 21 ITEM 1B. Unresolved Staff Comments ................................................. 43 ITEM 2. Properties ................................................................ 43 ITEM 3. Legal Proceedings ......................................................... 43 ITEM 4. Mine Safety Disclosures .................................................... 43 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ............................................. 44 ITEM 6. Selected Financial Data ..................................................... 47 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ............................................................. 49 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk ....................... 66 ITEM 8. Consolidated Financial Statements and Supplementary Data ........................ 68 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ............................................................. 112 ITEM 9A. Controls and Procedures .................................................... 112 ITEM 9B. Other Information ......................................................... 112 PART III ITEM 10. Directors, Executive Officers and Corporate Governance .......................... 113 ITEM 11. Executive Compensation .................................................... 113 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...................................................... 113 ITEM 13. Certain Relationships and Related Transactions, and Director Independence ........... 113 ITEM 14. Principal Accountant Fees and Services ........................................ 113 PART IV ITEM 15. Exhibits and Financial Statement Schedules ..................................... 114 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements that involve substantial risks and uncertainties. These forward- looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. We believe that it is important to communicate our future expectations to our investors. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The following factors and factors listed under “Risk Factors” in this report and other documents Crescent Capital BDC, Inc. has filed with the Securities and Exchange Commission, or SEC, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward- looking statements. The occurrence of the events described in these risk factors and elsewhere in this report could have a material adverse effect on our business, results of operation and financial position. The following factors are among those that may cause actual results to differ materially from our forward-looking statements: • Potential fluctuation in quarterly operating results • Potential impact of economic recessions or downturns • Adverse developments in the credit markets • Operation in a highly competitive market for investment opportunities • Regulations governing our operation as a business development company • Financing investments with borrowed money • Lack of liquidity in investments • Defaults by portfolio companies • Uncertainty as to the value of certain portfolio investments • Potential resignation of the Advisor and or the Administrator • Changes in interest rates may affect our cost of capital and net investment income • Potential adverse effects of price declines and illiquidity in the corporate debt markets • Risks associated with original issue discount (“OID”) and payment-in-kind (“PIK”) interest income • Risks regarding distributions • Potential adverse effects of new or modified laws and regulations Although we believe that the assumptions on which these forward-looking statements are based upon are reasonable, some of those assumptions are based on the work of third parties and any of those assumptions could prove to be inaccurate; as a result, forward-looking statements based on those assumptions also could prove to be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. We do not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law. You are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The safe harbor provisions of Section 21E of the 1934 Act, which preclude civil liability for certain forward-looking statements, do not apply to the forward-looking statements in this report because we are an investment company. See accompanying notes. 1 PART I In this Annual Report, except where the context suggests otherwise, the terms “CBDC,” “we,” “us,” “our,” and “the Company” refer to Crescent Capital BDC, Inc. The term “Advisor” refers to CBDC Advisors, LLC, a Delaware limited liability company. The term “Administrator”