Document

10-Q 1 gbdc310-qxfy2020q2.htm 10-Q Document

TABLE OF CONTENTS

______________________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________________________________________________________________________________________________

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2020

o 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 814-01244

Golub Capital BDC 3, Inc.

(Exact name of registrant as specified in its charter)


Maryland						82-2375481
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

200 Park Avenue, 25th Floor

New York, NY 10166

(Address of principal executive offices)

(212) 750-6060

(Registrant's telephone number, including area code)

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 þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer o			Accelerated filer o
Non-accelerated filer o			Smaller reporting company o
Emerging growth company þ

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of May 14, 2020, the Registrant had 33,090,999.162 shares of common stock, $0.001 par value, outstanding.

TABLE OF CONTENTS


Part I. Financial Information
Item 1.	Financial Statements	3
	Consolidated Statements of Financial Condition as of March 31, 2020 (unaudited) and September 30, 2019	3
	Consolidated Statements of Operations for the three and six months ended March 31, 2020 (unaudited) and 2019 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the three and six months ended March 31, 2020 (unaudited) and 2019 (unaudited)	5
	Consolidated Statements of Cash Flows for the six months ended March 31, 2020 (unaudited) and 2019 (unaudited)	6
	Consolidated Schedules of Investments as of March 31, 2020 (unaudited) and September 30, 2019	8
	Notes to Consolidated Financial Statements (unaudited)	34
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	63
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	82
Item 4.	Controls and Procedures	83
Part II. Other Information
Item 1.	Legal Proceedings	83
Item 1A.	Risk Factors	83
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 3.	Defaults Upon Senior Securities	84
Item 4.	Mine Safety Disclosures	84
Item 5.	Other Information	84
Item 6.	Exhibits	85

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

(In thousands, except share and per share data)


	March 31, 2020		September 30, 2019
	(unaudited)
Assets
Investments, at fair value (amortized cost of $839,205 and $611,003, respectively)	$	798,441	$	616,989

Cash and cash equivalents	22,544		2,413
Foreign currencies (cost of $436 and $130, respectively)	428		130
Restricted cash and cash equivalents	12,162		17,374
Restricted foreign currencies (cost of $1,280 and $0, respectively)	1,338		—
Cash collateral held at broker for forward currency contracts	450		450
Unrealized net appreciation on forward currency contracts	720		240
Interest receivable	2,447		2,226
Capital call receivable	3,971		16
Other assets	42		102
Total Assets	$	842,543	$	639,940
Liabilities
Debt	$	382,870	$	270,644
Less unamortized debt issuance costs	1,868		1,770
Debt less unamortized debt issuance costs	381,002		268,874
Other short-term borrowings (proceeds of $0 and $16,366, respectively)	—		16,366


Interest payable	1,971		881
Distributions payable	3,805		6,441

Management and incentive fees payable	3,569		3,316

Accounts payable and accrued expenses	788		630
Accrued trustee fees	—		12
Total Liabilities	391,135		296,520
Commitments and Contingencies (Note 9)
Net Assets
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2020 and September 30, 2019	—		—
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 33,090,999.162 and 22,894,689.911 shares issued and outstanding as of March 31, 2020 and September 30, 2019, respectively	33		23
Paid in capital in excess of par	496,331		343,396
Distributable earnings	(44,956)		1
Total Net Assets	451,408		343,420
Total Liabilities and Total Net Assets	$	842,543	$	639,940
Number of common shares outstanding	33,090,999.162		22,894,689.911
Net asset value per common share	$	13.64	$	15.00

See Notes to Consolidated Financial Statements

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Statement of Operations (unaudited)

(In thousands, except share and per share data)


	Three months ended March 31,						Six months ended March 31,
	2020		2019		2020		2019
Investment income
Interest income	$	16,421	$	6,033	$	30,932	$	10,328
Dividend income	2		—		4		—
Fee income	132		18		181		83






Total investment income	16,555		6,051		31,117		10,411
Expenses
Interest and other debt financing expenses	3,635		1,511		7,137		2,532
Base management fee	2,796		927		5,193		1,573
Incentive fee	337		595		2,359		1,149
Professional fees	267		230		516		418
Administrative service fee	302		106		577		176
General and administrative expenses	77		29		92		56
Total expenses	7,414		3,398		15,874		5,904
Base management fee waived (Note 4)	(762)		(253)		(1,416)		(429)
Incentive fee waived (Note 4)	128		(24)		(169)		(79)

Net expenses	6,780		3,121		14,289		5,396
Net investment income	9,775		2,930		16,828		5,015


Net gain (loss) on investment transactions
Net realized gain (loss) from:
Investments	(1)		(1)		—		1
Foreign currency transactions	(1)		41		(13)		48
Net realized gain (loss) on investment transactions	(2)		40		(13)		49
Net change in unrealized appreciation (depreciation) from:
Investments	(49,321)		516		(46,750)		1,083
Forward currency contracts	778		—		479		—
Translation of assets and liabilities in foreign currencies	222		(10)		33		—
Net change in unrealized appreciation (depreciation) on investment transactions	(48,321)		506		(46,238)		1,083
Net gain (loss) on investment transactions	(48,323)		546		(46,251)		1,132
Net increase (decrease) in net assets resulting from operations	$	(38,548)	$	3,476	$	(29,423)	$	6,147
Per Common Share Data
Basic and diluted earnings (loss) per common share	$	(1.29)	$	0.31	$	(1.06)	$	0.65
Basic and diluted weighted average common shares outstanding	29,851,593		11,092,733		27,861,886		9,467,478

See Notes to Consolidated Financial Statements

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Statements of Changes in Net Assets (unaudited)

(In thousands, except share data)



	Common Stock					Paid in Capital in Excess of Par		Distributable Earnings		Total Net Assets
	Shares	Par Amount
Balance at September 30, 2018	5,815,002.633	$	6	$	87,218	$	1	$	87,225
Issuance of common stock	6,286,896.361	6		94,297		—		94,303

Net increase (decrease) in net assets resulting from operations:
Net investment income	—	—		—		5,015		5,015
Net realized gain (loss) on investment transactions	—	—		—		49		49
Net change in unrealized appreciation (depreciation) on investment transactions	—	—		—		1,083		1,083
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan	166,803.807	—		2,502		—		2,502
Distributions from distributable earnings	—	—		—		(2,943)		(2,943)
Distributions declared and payable	—	—		—		(3,204)		(3,204)

Total increase (decrease) for the six months ended March 31, 2019	6,453,700.168	6		96,799		—		96,805
Balance at March 31, 2019	12,268,702.801	$	12	$	184,017	$	1	$	184,030
Balance at December 31, 2018	10,859,989.050	$	11	$	162,888	$	1	$	162,900
Issuance of common stock	1,344,241.361	1		20,162		—		20,163

Net increase (decrease) in net assets resulting from operations:
Net investment income	—	—		—		2,930		2,930
Net realized gain (loss) on investment transactions	—	—		—		40		40
Net change in unrealized appreciation (depreciation) on investment transactions	—	—		—		506		506
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan	64,472.390	—		967		—		967
Distributions from distributable earnings	—	—		—		(1,251)		(1,251)
Distributions declared and payable	—	—		—		(2,225)		(2,225)

Total increase (decrease) for the three months ended March 31, 2019	1,408,713.751	1		21,129		—		21,130
Balance at March 31, 2019	12,268,702.801	$	12	$	184,017	$	1	$	184,030
Balance at September 30, 2019	22,894,689.911	$	23	$	343,396	$	1	$	343,420
Issuance of common stock	9,667,275.629	9		145,000		—		145,009

Net increase (decrease) in net assets resulting from operations:
Net investment income	—	—		—		16,828		16,828
Net realized gain (loss) on investment transactions	—	—		—		(13)		(13)
Net change in unrealized appreciation (depreciation) on investment transactions	—	—		—		(46,238)		(46,238)
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan	529,033.622	1		7,935		—		7,936
Distributions from distributable earnings	—	—		—		(11,729)		(11,729)
Distributions declared and payable	—	—		—		(3,805)		(3,805)

Total increase (decrease) for the six months ended March 31, 2020	10,196,309.251	10		152,935		(44,957)		107,988
Balance at March 31, 2020	33,090,999.162	$	33	$	496,331	$	(44,956)	$	451,408
Balance at December 31, 2019	29,715,740.183	$	30	$	445,705	$	1	$	445,736
Issuance of common stock	3,205,196.000	3		48,075		—		48,078

Net increase (decrease) in net assets resulting from operations:
Net investment income	—	—		—		9,775		9,775
Net realized gain (loss) on investment transactions	—	—		—		(2)		(2)
Net change in unrealized appreciation (depreciation) on investment transactions	—	—		—		(48,321)		(48,321)
Distributions to stockholders:
Stock issued in connection with dividend reinvestment plan	170,062.979	—		2,551		—		2,551
Distributions from distributable earnings	—	—		—		(5,792)		(5,792)
Distributions declared and payable	—	—		—		(617)		(617)

Total increase (decrease) for the three months ended March 31, 2020	3,375,258.979	3		50,626		(44,957)		5,672
Balance at March 31, 2020	33,090,999.162	$	33	$	496,331	$	(44,956)	$	451,408

See Notes to Consolidated Financial Statements

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited)

(In thousands)


	Six months ended March 31,
	2020		2019
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$	(29,423)	$	6,147
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash (used in) provided by operating activities:
Amortization of deferred debt issuance costs	497		532
Accretion of discounts and amortization of premiums	(1,672)		(483)
Net realized (gain) loss on investments	—		(1)
Net realized (gain) loss on foreign currency transactions	13		(48)

Net change in unrealized (appreciation) depreciation on investments	46,750		(1,083)
Net change in unrealized (appreciation) depreciation on translation of assets and liabilities in foreign currencies	(33)		—
Net change in unrealized (appreciation) depreciation on forward currency contracts	(479)		—
Proceeds from (fundings of) revolving loans, net	(4,989)		(1,142)
Fundings of investments	(300,257)		(161,614)
Proceeds from principal payments and sales of portfolio investments	79,611		9,708
PIK interest	(895)		(35)
Changes in operating assets and liabilities:

Interest receivable	(221)		(622)

Other assets	60		77

Interest payable	1,090		165
Management and incentive fees payable	253		792

Accounts payable and accrued expenses	158		90
Accrued trustee fees	(12)		(11)
Net cash (used in) provided by operating activities	(209,549)		(147,528)



Cash flows from financing activities
Borrowings on debt	491,055		228,350
Repayments of debt	(378,798)		(150,032)
Proceeds from other short-term borrowings	21,267		7,598
Repayments on other short-term borrowings	(37,664)		(7,558)
Capitalized debt issuance costs	(595)		(464)
Capital calls received in advance	—		4,374
Proceeds from issuance of common shares	141,054		94,303
Distributions paid	(10,234)		(2,980)
Net cash provided by (used in) financing activities	226,085		173,591
Net change in cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies	16,536		26,063
Effect of foreign currency exchange rates	19		8
Cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies, beginning of period	19,917		3,653
Cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies, end of period	$	36,472	$	29,724
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	5,550	$	1,747

Distributions declared during the period	15,534		6,147



Supplemental disclosure of non-cash operating and financing activity:
Change in capital call receivable	$	(3,955)	$	—
Stock issued in connection with dividend reinvestment plan	7,936		2,502
Change in distributions payable	(2,636)		665

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited) - (continued)

(In thousands)

The following table provides a reconciliation of cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies reported within the Consolidated Statements of Financial Condition that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows:


	As of March 31,
	2020		2019
Cash and cash equivalents	$	22,544	$	29,652
Foreign currencies (cost of $436 and $72, respectively)	428		72
Restricted cash and cash equivalents	12,162		—
Restricted foreign currencies (cost of $1,280 and $0, respectively)	1,338		—
Total cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies shown in the Consolidated Statements of Cash Flows	$	36,472	$	29,724

See Note 2. Significant Accounting Policies and Recent Accounting Updates for a description of cash and cash equivalents, foreign currencies, restricted cash and cash equivalents and restricted foreign currencies.

See Notes to Consolidated Financial Statements

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Investments
Non-controlled/non-affiliate company investments
Debt Investments
Automobile
Grease Monkey International, LLC	Senior loan	L + 5.00%	^(c)	6.45%		11/2022		$	965		$	957		0.2		$	907
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(c)	6.45%		11/2022		351			348			—		330
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(c)	6.45%		11/2022		178			178			—		168
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(c)	6.45%		11/2022		162			161			—		152
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(c)	6.45%		11/2022		148			147			—		139
Grease Monkey International, LLC^#	Senior loan	P + 4.00%	^(a)(f)	6.71%		11/2022		70			69			—		64
Grease Monkey International, LLC^#(5)	Senior loan	L + 5.00%		N/A⁽⁶⁾		11/2022		—			(1)			—		—
JHCC Holdings LLC	One stop	L + 5.50%	^(a)	6.50%		09/2025		3,020			2,992			0.6		2,657
JHCC Holdings LLC^#	One stop	P + 4.50%	^(f)	7.75%		09/2025		1,337			1,291			0.2		728
JHCC Holdings LLC^#	One stop	P + 4.50%	^(f)	7.75%		09/2025		13			12			—		1
Power Stop, LLC	Senior loan	L + 4.50%	^(c)(f)	5.95%		10/2025		672			669			0.1		591
Quick Quack Car Wash Holdings, LLC	One stop	L + 6.50%	^(a)	7.50%		04/2023		1,686			1,673			0.4		1,602
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	7.50%		04/2023		820			814			0.2		779
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	7.50%		04/2023		716			711			0.2		680
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	7.50%		04/2023		479			475			0.1		455
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	7.50%		04/2023		388			385			0.1		368
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	7.50%		04/2023		40			40			—		38
								11,045			10,921			2.1		9,659
Beverage, Food and Tobacco
BJH Holdings III Corp.	One stop	L + 5.75%	^(c)	7.20%		08/2025		19,303			19,011			4.0		17,952
BJH Holdings III Corp.^#	One stop	L + 5.75%	^(a)(c)	6.95%		08/2025		400			393			0.1		372
Fintech Midco, LLC	One stop	L + 5.00%	^(c)(d)	6.46%		08/2024		4,909			4,873			1.1		4,664
Fintech Midco, LLC^#	One stop	L + 5.00%	^(c)(d)	6.65%		08/2024		442			439			0.1		420
Fintech Midco, LLC^#	One stop	L + 5.00%	^(a)	6.00%		08/2024		100			99			—		95
Flavor Producers, LLC	Senior loan	L + 4.75%	^(c)	6.12%		12/2023		439			433			0.1		403
Flavor Producers, LLC^#	Senior loan	L + 4.75%	^(c)(d)	6.13%		12/2022		14			14			—		13
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	2.00% cash/7.50% PIK		06/2023		538			520			0.1		496
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	2.00% cash/7.50% PIK		06/2023		276			274			0.1		270
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	2.00% cash/7.50% PIK		06/2023		217			216			0.1		213
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	2.00% cash/7.50% PIK		06/2023		213			212			—		209
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	2.00% cash/7.50% PIK		06/2023		105			104			—		103
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	2.00% cash/7.50% PIK		06/2023		105			104			—		102
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	2.00% cash/7.50% PIK		06/2023		51			51			—		50
SSRG Holdings, LLC	One stop	L + 5.25%	^(c)	6.32%		11/2025		6,449			6,388			1.2		5,610
SSRG Holdings, LLC^#	One stop	L + 5.25%	^(c)	6.30%		11/2025		75			74			—		65
Velvet Taco Holdings, Inc.^#	One stop	L + 7.00%	^(c)	7.84%		03/2026		120			119			—		113
Velvet Taco Holdings, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		03/2026		—			—			—		(2)
Velvet Taco Holdings, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		03/2026		—			(15)			—		(89)
Wood Fired Holding Corp.	One stop	L + 5.75%		7.67%		12/2023		3,170			3,146			0.6		2,916
Wood Fired Holding Corp.^#	One stop	L + 5.75%	^(c)	6.95%		12/2023		284			282			0.1		261

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Beverage, Food and Tobacco - (continued)
Wood Fired Holding Corp.^#	One stop	L + 5.75%	^(c)	6.98%		12/2023		$	99		$	98		—	%	$	91
								37,309			36,835			7.6		34,327
Buildings and Real Estate
Groundworks LLC	Senior loan	L + 5.50%	^(c)	7.34%		01/2026		224			221			—		197
Groundworks LLC^#	Senior loan	L + 5.50%	^(c)(d)	6.50%		01/2026		36			36			—		32
Groundworks LLC^#(5)	Senior loan	L + 5.50%		N/A⁽⁶⁾		01/2026		—			(17)			—		—
MRI Software LLC	One stop	L + 5.50%	^(d)	6.57%		02/2026		11,275			11,176			2.4		10,823
MRI Software LLC^#	One stop	L + 5.50%	^(d)	6.57%		02/2026		136			133			—		125
MRI Software LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		02/2026		—			(21)			—		(170)
								11,671			11,528			2.4		11,007
Chemicals, Plastics and Rubber
Inhance Technologies Holdings LLC	One stop	L + 5.50%	^(c)	7.41%		07/2024		2,498			2,476			0.5		2,269
Inhance Technologies Holdings LLC^#	One stop	L + 5.50%	^(c)	7.15%		07/2024		754			748			0.2		685
Inhance Technologies Holdings LLC^#	One stop	L + 5.50%	^(a)(c)(f)	7.32%		07/2024		80			79			—		70
								3,332			3,303			0.7		3,024
Containers, Packaging and Glass
AmerCareRoyal LLC	Senior loan	L + 5.00%	^(c)(f)	6.81%		11/2025		2,905			2,878			0.6		2,615
AmerCareRoyal LLC	Senior loan	P + 4.00%	^(f)	7.25%		11/2025		525			520			0.1		473
Fortis Solutions Group, LLC	Senior loan	L + 4.50%	^(a)	5.50%		12/2023		541			536			0.1		509
Fortis Solutions Group, LLC	Senior loan	L + 4.50%	^(a)	5.50%		12/2023		216			214			0.1		203
Fortis Solutions Group, LLC	Senior loan	L + 4.50%	^(a)	5.50%		12/2023		207			205			—		195
Fortis Solutions Group, LLC^#	Senior loan	L + 4.50%	^(a)	5.50%		12/2023		41			40			—		38
								4,435			4,393			0.9		4,033
Diversified/Conglomerate Manufacturing
Blackbird Purchaser, Inc.	Senior loan	L + 4.50%	^(c)(f)	5.95%		04/2026		4,883			4,800			1.0		4,297
Blackbird Purchaser, Inc. ^#	Senior loan	L + 4.50%	^(c)	5.95%		04/2024		58			56			—		44
Blackbird Purchaser, Inc. ^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		04/2026		—			(3)			—		—
Chase Industries, Inc.	Senior loan	L + 5.50%	^(a)	5.45% cash/1.50% PIK		05/2025		1,956			1,931			0.4		1,721
Chase Industries, Inc.^#	Senior loan	L + 5.50%	^(a)	5.45% cash/1.50% PIK		05/2025		339			334			0.1		298
Chase Industries, Inc.^#	Senior loan	L + 5.50%	^(a)	5.45% cash/1.50% PIK		05/2023		177			176			—		155
Madison Safety & Flow LLC	Senior loan	L + 4.50%	^(a)	5.52%		03/2025		187			186			—		179
Madison Safety & Flow LLC^#	Senior loan	P + 3.50%	^(a)(f)	6.39%		03/2025		6			7			—		5
Protective Industrial Products, Inc.	Senior loan	L + 4.50%	^(a)	6.10%		01/2024		2,803			2,777			0.6		2,607
Togetherwork Holdings, LLC	One stop	L + 6.25%	^(a)	7.25%		03/2025		1,970			1,945			0.4		1,675
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2025		503			497			0.1		428
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2025		481			475			0.1		409
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2025		476			470			0.1		405
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2025		443			438			0.1		377
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2025		407			401			0.1		346
Togetherwork Holdings, LLC	One stop	L + 6.25%	^(a)	7.25%		03/2025		305			301			—		259
Togetherwork Holdings, LLC	One stop	L + 6.25%	^(a)	7.25%		03/2025		203			201			—		173
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2025		183			181			—		156
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2024		150			148			—		127
Togetherwork Holdings, LLC	One stop	L + 6.25%	^(a)	7.25%		03/2025		83			82			—		70

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Manufacturing - (continued)
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2025		$	18		$	18		—	%	$	15
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	7.25%		03/2025		17			16			—		14
								15,648			15,437			3.0		13,760
Diversified/Conglomerate Service
3ES Innovation, Inc.^(7)(10)	One stop	L + 5.75%	^(c)	7.48%		05/2025		3,755			3,683			0.8		3,568
3ES Innovation, Inc.^#(5)(7)(10)	One stop	L + 5.75%		N/A⁽⁶⁾		05/2025		—			(2)			—		(5)
Acquia, Inc.	One stop	L + 7.00%	^(c)	8.58%		10/2025		1,804			1,787			0.4		1,768
Acquia, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		10/2025		—			(1)			—		(1)
Apptio, Inc.	One stop	L + 7.25%	^(a)	8.25%		01/2025		12,605			12,403			2.8		12,605
Apptio, Inc. ^#(5)	One stop	L + 7.25%		N/A⁽⁶⁾		01/2025		—			(2)			—		—
Arch Global CCT Holdings Corp.	Senior loan	L + 4.75%	^(c)(f)	5.82%		04/2026		1,404			1,398			0.3		1,264
Arch Global CCT Holdings Corp.^#	Senior loan	L + 4.75%	^(a)	5.74%		04/2025		29			29			—		26
Arch Global CCT Holdings Corp.^#(5)	Senior loan	L + 4.75%		N/A⁽⁶⁾		04/2026		—			—			—		(18)
Astute Holdings, Inc.	One stop	L + 6.00%	^(c)	7.07%		04/2025		2,799			2,776			0.6		2,743
Astute Holdings, Inc. ^#	One stop	L + 6.00%	^(c)	7.21%		04/2025		75			75			—		73
Astute Holdings, Inc. ^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		04/2025		—			(10)			—		—
Aurora Lux Finco S.A R.L.^(7)(12)	One stop	L + 6.00%	^(c)	7.00%		12/2026		7,839			7,650			1.6		7,055
AutoQuotes, LLC	One stop	L + 5.50%	^(c)	7.12%		11/2024		2,326			2,308			0.5		2,233
AutoQuotes, LLC^#	One stop	L + 5.50%	^(c)	6.72%		11/2024		50			50			—		48
Axiom Merger Sub Inc.^#	One stop	L + 5.25%	^(c)	7.07%		04/2026		1,159			1,141			0.2		1,101
Axiom Merger Sub Inc.^#(7)(8)	One stop	E + 5.50%	^(g)	5.50%		04/2026		483			476			0.1		454
Axiom Merger Sub Inc.^#	One stop	L + 5.25%	^(c)	6.25%		04/2026		15			14			—		13
Axiom Merger Sub Inc.^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		04/2026		—			(15)			—		—
Bazaarvoice, Inc.	One stop	L + 5.75%	^(a)(c)	6.82%		02/2024		8,376			8,282			1.8		8,041
Bazaarvoice, Inc.^#	One stop	L + 5.75%	^(c)	6.96%		02/2024		150			147			—		142
Bearcat Buyer, Inc.	Senior loan	L + 4.25%	^(c)	5.70%		07/2026		581			575			0.1		552
Bearcat Buyer, Inc.	Senior loan	L + 4.25%	^(c)	5.70%		07/2026		154			152			—		146
Bearcat Buyer, Inc.^#	Senior loan	L + 4.25%	^(c)	5.70%		07/2026		65			63			—		55
Bearcat Buyer, Inc.^#	Senior loan	L + 4.25%	^(a)	4.86%		07/2024		11			11			—		10
Bullhorn, Inc.	One stop	L + 5.50%	^(c)(d)(f)	6.57%		10/2025		13,613			13,426			2.8		12,524
Bullhorn, Inc. ^#(7)(8)	One stop	L + 6.00%	⁽ⁱ⁾	6.70%		10/2025		2,429			2,396			0.5		2,309
Bullhorn, Inc. ^#(7)(8)	One stop	E + 5.75%	^(c)(d)	5.75%		10/2025		975			962			0.2		916
Bullhorn, Inc.^#	One stop	L + 5.50%	^(c)(d)	6.57%		10/2025		533			526			0.1		490
Bullhorn, Inc.^#	One stop	L + 0.00%	^(c)(d)	1.07%		10/2025		401			371			0.1		230
Bullhorn, Inc.^#	One stop	L + 5.50%	^(a)	6.50%		10/2025		239			235			0.1		220
Calabrio, Inc.	One stop	L + 6.50%	^(c)	7.95%		06/2025		22,076			21,885			4.7		20,972
Calabrio, Inc. ^#	One stop	L + 6.50%	^(a)	7.50%		06/2025		60			59			—		55
Caliper Software, Inc.	One stop	L + 5.50%	^(c)(f)	6.57%		11/2025		7,249			7,167			1.5		6,959
Caliper Software, Inc.^#	One stop	L + 5.50%	^(b)	6.60%		11/2023		175			173			—		168
Centrify Corporation	One stop	L + 6.25%	^(d)	7.33%		08/2024		5,207			5,150			1.0		4,582
Centrify Corporation^#	One stop	P + 5.25%	^(f)	8.50%		08/2024		150			148			—		132
Cloudbees, Inc.^#	One stop	L + 9.00%	^(a)	10.08% cash/0.50% PIK		05/2023		844			830			0.2		819
Cloudbees, Inc.^#	One stop	L + 9.00%	^(a)	10.08% cash/0.50% PIK		05/2023		495			491			0.1		480
Cloudbees, Inc.^#	One stop	L + 8.50%		N/A⁽⁶⁾		05/2023		—			—			—		—

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
Confluence Technologies, Inc.	One stop	L + 5.75%	^(a)	6.75%		03/2024		$	8,458		$	8,404		1.8	%	$	8,289
Confluence Technologies, Inc.^#	One stop	L + 5.75%	^(a)	6.75%		03/2024		50			49			—		49
Connexin Software, Inc.	One stop	L + 8.50%	^(a)	9.50%		02/2024		1,261			1,249			0.3		1,211
Connexin Software, Inc.^#	One stop	L + 8.50%	^(a)	9.50%		02/2024		20			20			—		19
Conservice, LLC	One stop	L + 5.25%	^(b)	6.51%		12/2024		888			881			0.2		853
Conservice, LLC^#	One stop	L + 5.25%	^(b)	6.30%		12/2024		4			4			—		4
Convercent, Inc.	One stop	L + 9.00%	^(c)	8.25% cash/2.75% PIK		12/2024		696			678			0.2		704
Convercent, Inc.^#	Subordinated debt	N/A		4.00%		11/2020		35			35			—		36
Convercent, Inc.^#	One stop	L + 6.25%	^(a)	7.25%		12/2024		20			20			—		20
Convercent, Inc.^#(5)	One stop	L + 6.25%		N/A⁽⁶⁾		12/2024		—			(1)			—		—
Digital Guardian, Inc^.#	One stop	L + 9.50%	^(c)	8.41% cash/3.00% PIK		06/2023		1,672			1,664			0.4		1,723
Digital Guardian, Inc^.#	Subordinated debt	N/A		8.00% PIK		06/2023		2			1			—		2
Digital Guardian, Inc^.#	One stop	L + 5.00%		N/A⁽⁶⁾		06/2023		—			—			—		—
Digital Guardian, Inc^.#	One stop	L + 6.50%		N/A⁽⁶⁾		06/2023		—			—			—		8
E2open, LLC	One stop	L + 5.75%	^(c)	7.36%		11/2024		22,827			22,516			4.9		21,913
E2open, LLC^#	One stop	L + 5.75%	^(c)	6.95%		11/2024		121			117			—		111
EWC Growth Partners LLC^#	One stop	L + 5.50%	^(c)	6.50%		03/2026		444			424			0.1		391
EWC Growth Partners LLC	One stop	L + 5.50%	^(b)	6.50%		03/2026		62			61			—		55
EWC Growth Partners LLC^#	One stop	L + 5.50%	^(c)	5.50%		03/2026		18			18			—		16
GS Acquisitionco, Inc.	One stop	L + 5.75%	^(d)	6.83%		05/2024		15,639			15,501			3.4		15,483
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(d)	6.83%		05/2024		4,405			4,365			1.0		4,361
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(d)	6.83%		05/2024		1,152			1,142			0.3		1,141
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(d)	6.83%		05/2024		1,063			1,053			0.2		1,053
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(d)	6.83%		05/2024		666			660			0.2		659
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(d)	6.83%		05/2024		91			90			—		89
HSI Halo Acquisition, Inc.	One stop	L + 5.75%	^(a)	6.75%		08/2026		964			953			0.2		916
HSI Halo Acquisition, Inc.^#	One stop	L + 5.75%	^(a)	6.75%		08/2026		123			120			—		110
HSI Halo Acquisition, Inc.^#	One stop	P + 4.75%	^(f)	8.00%		09/2025		25			25			—		24
ICIMS, Inc.	One stop	L + 6.50%	^(a)	7.50%		09/2024		3,240			3,194			0.7		3,143
ICIMS, Inc.	One stop	L + 6.50%	^(a)	7.50%		09/2024		1,065			1,055			0.2		1,033
ICIMS, Inc.^#(5)	One stop	L + 6.50%		N/A⁽⁶⁾		09/2024		—			(1)			—		(1)
Imprivata, Inc.	Senior loan	L + 4.00%	^(c)	5.45%		10/2023		818			812			0.2		818
Imprivata, Inc.^#(5)	Senior loan	L + 4.00%		N/A⁽⁶⁾		10/2023		—			(1)			—		—
Infinisource, Inc.	One stop	L + 4.75%	^(c)	6.20%		10/2026		10,806			10,705			2.2		9,942
Infinisource, Inc.^#	One stop	L + 4.75%	^(c)	6.54%		10/2026		1,791			1,774			0.4		1,648
Infinisource, Inc.^#(5)	One stop	L + 4.75%		N/A⁽⁶⁾		10/2026		—			(2)			—		(14)
Infinisource, Inc^.#(5)	One stop	L + 4.75%	^(c)	N/A⁽⁶⁾		10/2026		—			(48)			(0.1)		(408)
Infogix, Inc.	One stop	L + 6.75%	^(c)	8.20%		04/2024		1,464			1,459			0.3		1,406
Infogix, Inc.	One stop	L + 6.75%	^(c)	8.20%		04/2024		230			227			0.1		221
Infogix, Inc.^#	One stop	L + 6.75%	^(c)	7.75%		04/2024		45			45			—		43
Instructure, Inc.	One stop	L + 7.00%	^(c)	8.21%		03/2026		28,996			28,635			6.0		27,256
Instructure, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		03/2026		—			(2)			—		(9)
Integral Ad Science, Inc.	One stop	L + 7.25%	^(a)	7.00% cash/1.25% PIK		07/2024		3,540			3,492			0.8		3,398
Integral Ad Science, Inc^.#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		07/2023		—			(1)			—		(3)

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost			Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
Integration Appliance, Inc.	One stop	L + 7.25%	^(c)	9.43%		08/2023		$	14,125		$	14,030		$	3.1	%	$	13,843
Integration Appliance, Inc.^#	One stop	L + 7.25%	^(a)(c)	8.54%		08/2023		2			2			—			2
Internet Truckstop Group LLC	One stop	L + 5.50%	^(c)	6.96%		04/2025		8,077			7,909			1.7			7,754
Internet Truckstop Group LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		04/2025		—			(3)			—			(5)
Invoice Cloud, Inc^.#	One stop	L + 6.50%	^(c)	4.96% cash/3.25% PIK		02/2024		1,095			1,087			0.2			1,029
Invoice Cloud, Inc^.#	One stop	L + 6.50%	^(c)	7.96%		02/2024		667			660			0.1			607
Invoice Cloud, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		02/2024		—			—			—			(2)
JAMF Holdings, Inc.	One stop	L + 7.00%	^(c)	8.70%		11/2022		1,205			1,189			0.3			1,193
JAMF Holdings, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		11/2022		—			(1)			(0.1)			(1)
Kaseya Traverse Inc	One stop	L + 7.00%	^(a)(c)	5.91% cash/3.00% PIK		05/2025		13,990			13,761			3.0			13,568
Kaseya Traverse Inc^#	One stop	L + 7.00%	^(c)	5.91% cash/3.00% PIK		05/2025		224			208			—			218
Kaseya Traverse Inc^#	One stop	L + 6.50%	^(a)(b)(c)	7.50%		05/2025		104			102			0.1			99
Kaseya Traverse Inc^#(5)	One stop	L + 4.00%		N/A⁽⁶⁾		05/2025		—			(8)			—			—
Learn-it Systems, LLC	Senior loan	L + 4.50%	^(c)	5.39%		03/2025		761			751			0.2			700
Learn-it Systems, LLC^#	Senior loan	L + 4.50%	^(c)	6.17%		03/2025		87			80			—			80
Learn-it Systems, LLC^#	Senior loan	L + 4.50%	^(a)(c)(f)	5.95%		03/2025		16			16			—			15
Litera Bidco LLC	One stop	L + 5.75%	^(c)	7.21%		05/2026		608			601			0.1			589
Litera Bidco LLC^#	One stop	L + 5.75%	^(c)	7.21%		05/2026		278			275			0.1			270
Litera Bidco LLC^#	One stop	L + 5.75%	^(c)	7.21%		05/2026		278			278			0.1			269
Litera Bidco LLC^#	One stop	L + 5.75%	^(c)	6.95%		05/2025		30			30			—			29
MetricStream, Inc.^#	One stop	L + 7.00%	^(c)	9.00%		05/2024		2,010			1,946			0.4			1,964
MetricStream, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		05/2024		—			—			—			(2)
MetricStream, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		04/2024		—			(4)			—			(20)
Mindbody, Inc.^#	One stop	L + 7.00%	^(c)	8.00%		02/2025		11,692			11,597			2.3			10,522
Mindbody, Inc.^#	One stop	L + 7.00%	^(c)	8.07%		02/2025		119			118			—			107
Ministry Brands, LLC	Senior loan	L + 4.00%	^(b)	5.62%		12/2022		223			222			—			200
Ministry Brands, LLC^#	Senior loan	L + 4.00%	^(b)	5.62%		12/2022		131			131			—			118
Ministry Brands, LLC	Senior loan	L + 4.00%	^(b)	5.62%		12/2022		128			127			—			115
MSHC, Inc.	Senior loan	L + 4.25%	^(a)(f)	5.25%		12/2024		23			23			—			22
MSHC, Inc.^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		12/2024		—			—			—			(41)
Namely, Inc.	One stop	L + 7.50%	^(c)	8.25% cash/1.25% PIK		06/2024		2,105			2,084			0.4			1,999
Namely, Inc.^#	One stop	L + 7.50%	^(c)	8.25% cash/1.25% PIK		06/2024		793			787			0.2			727
Namely, Inc.^#(5)	One stop	L + 6.25%		N/A⁽⁶⁾		06/2024		—			—			—			(3)
Net Health Acquisition Corp.	One stop	L + 5.50%	^(d)	6.57%		12/2023		871			864			0.2			845
Net Health Acquisition Corp.	One stop	L + 5.50%	^(d)	6.57%		12/2023		749			743			0.2			727
Net Health Acquisition Corp.	One stop	L + 5.50%	^(d)	6.57%		12/2023		111			111			—			108
Net Health Acquisition Corp.^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		12/2023		—			(1)			—			(3)
Nextech Holdings, LLC	One stop	L + 5.50%	^(a)	6.49%		06/2025		17,942			17,785			3.7			16,506
Nextech Holdings, LLC^#	One stop	L + 5.50%	^(c)	6.11%		06/2025		250			247			0.1			226
Nextech Holdings, LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		06/2025		—			(8)			—			(69)
Nexus Brands Group, Inc.	One stop	L + 6.00%	^(c)	7.61%		11/2023		592			587			0.1			521
Nexus Brands Group, Inc.	One stop	L + 6.00%	^(c)	7.61%		11/2023		515			510			0.1			452
Nexus Brands Group, Inc.^#	One stop	L + 6.00%	^(c)	7.61%		11/2023		294			293			0.1			259

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
Nexus Brands Group, Inc.^#	One stop	L + 6.00%	^(c)	7.61%		11/2023		$	213		$	213		—	%	$	187
Nexus Brands Group, Inc.^#	One stop	L + 6.00%	^(c)(d)	7.61%		11/2023		100			99			—		88
Nexus Brands Group, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		11/2023		—			(1)			—		—
Nexus Brands Group, Inc.^#	One stop	L + 6.00%		N/A⁽⁶⁾		11/2023		—			—			—		—
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH	One stop	P + 6.75%	^(f)	8.25% cash/1.75% PIK		10/2024		130			124			—		133
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH^#	One stop	L + 6.00%		N/A⁽⁶⁾		10/2024		—			—			—		1
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH^#(5)	One stop	L + 7.75%		N/A⁽⁶⁾		10/2024		—			(7)			—		52
Property Brands, Inc.	One stop	L + 6.00%	^(a)	7.00%		01/2024		2,794			2,771			0.6		2,570
Property Brands, Inc.	One stop	L + 6.00%	^(a)	7.00%		01/2024		2,609			2,583			0.5		2,400
Property Brands, Inc.	One stop	L + 6.00%	^(a)	7.00%		01/2024		1,128			1,119			0.2		1,038
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	7.00%		01/2024		920			913			0.2		847
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	7.00%		01/2024		397			394			0.1		365
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	7.00%		01/2024		337			335			0.1		310
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	7.00%		01/2024		336			333			0.1		309
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	7.00%		01/2024		265			263			0.1		244
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	7.00%		01/2024		140			139			—		129
Property Brands, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		01/2024		—			(1)			—		(8)
Property Brands, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		01/2024		—			(7)			—		(78)
PCS Intermediate II Holdings, LLC	One stop	L + 5.50%	^(e)	6.50%		01/2026		4,944			4,896			1.1		4,746
PCS Intermediate II Holdings, LLC^#	One stop	L + 5.50%	^(a)	6.50%		01/2026		40			39			—		36
Personify, Inc.	One stop	L + 5.75%	^(c)	7.20%		09/2024		3,493			3,467			0.7		3,178
Personify, Inc.^#	One stop	L + 5.75%	^(c)	7.00%		09/2024		40			39			—		33
PlanSource Holdings, Inc.	One stop	L + 6.25%	^(d)	7.95%		04/2025		2,818			2,792			0.6		2,706
PlanSource Holdings, Inc.^#(5)	One stop	L + 6.25%		N/A⁽⁶⁾		04/2025		—			(1)			—		(3)
Project Power Buyer, LLC	One stop	L + 5.75%	^(c)	7.21%		05/2026		2,845			2,814			0.6		2,703
Project Power Buyer, LLC^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		05/2025		—			(1)			—		(4)
PT Intermediate Holdings III, LLC	One stop	L + 5.50%	^(c)	6.95%		10/2025		23,346			22,992			4.8		21,478
Qgenda Intermediate Holdings, LLC	One stop	L + 5.00%	^(a)	6.00%		06/2025		5,115			5,071			1.1		4,809
Qgenda Intermediate Holdings, LLC	One stop	L + 5.00%	^(a)	6.00%		06/2025		2,475			2,452			0.5		2,326
Qgenda Intermediate Holdings, LLC^#	One stop	L + 5.00%	^(a)	6.00%		06/2025		100			99			—		94
Recordxtechnologies, LLC	One stop	L + 5.50%	^(a)	6.50%		12/2025		18,794			18,569			3.9		17,666
Recordxtechnologies, LLC^#	One stop	L + 5.50%	^(a)	6.50%		12/2025		100			98			—		88
Recordxtechnologies, LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		12/2025		—			(23)			—		—
RegEd Aquireco, LLC	Senior loan	L + 4.25%	^(a)	5.25%		12/2024		1,223			1,214			0.2		1,126
RegEd Aquireco, LLC^#	Senior loan	L + 4.25%	^(a)(f)	5.43%		12/2024		118			117			—		108
RegEd Aquireco, LLC^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		12/2024		—			(27)			—		—
Saba Software, Inc.	Senior loan	L + 4.50%	^(a)	5.50%		05/2023		14,177			14,079			3.1		14,177
SnapLogic, Inc. ⁽⁵⁾	One stop	L + 8.75%	^(c)	5.75% cash/5.50% PIK		09/2024		3			(3)			—		3
SnapLogic, Inc.^#(5)	One stop	L + 3.25%		N/A⁽⁶⁾		09/2024		—			(6)			—		(54)
SnapLogic, Inc.^#(5)	One stop	L + 3.25%		N/A⁽⁶⁾		09/2024		—			—			—		(1)
Sonatype, Inc.	One stop	L + 6.75%	^(a)	7.52%		12/2025		12,912			12,789			2.7		12,267
Sonatype, Inc.^#(5)	One stop	L + 6.75%		N/A⁽⁶⁾		12/2025		—			(3)			—		(8)
Telesoft Holdings LLC	One stop	L + 5.75%	^(c)	7.20%		12/2025		21,275			20,819			4.6		20,849
Telesoft Holdings LLC^#	One stop	L + 5.75%	^(a)	6.75%		12/2025		150			145			—		147

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
TI Intermediate Holdings, LLC	Senior loan	L + 4.50%	^(c)	5.95%		12/2024		$	824		$	818		0.2	%	$	783
TI Intermediate Holdings, LLC^#	Senior loan	L + 4.50%	^(a)(f)	5.65%		12/2024		24			24			—		23
Transact Holdings, Inc.	Senior loan	L + 4.75%	^(a)	5.74%		4/1/2026		761			751			0.1		590
Transaction Data Systems, Inc.	One stop	L + 5.25%	^(c)	6.71%		06/2021		13,727			13,702			2.9		13,178
Transaction Data Systems, Inc.^#	One stop	L + 5.25%	^(a)(c)	6.71%		06/2021		28			28			—		27
Trintech, Inc.	One stop	L + 6.00%	^(c)	7.78%		12/2023		2,104			2,087			0.5		2,041
Trintech, Inc.	One stop	L + 6.00%	^(c)	7.78%		12/2023		1,046			1,038			0.2		1,015
Trintech, Inc. ^#	One stop	P + 5.00%	^(c)(f)	8.19%		12/2023		150			149			—		146
True Commerce, Inc.	One stop	L + 5.75%	^(c)	7.20%		11/2023		1,305			1,295			0.3		1,278
True Commerce, Inc.^#	One stop	L + 5.75%	^(c)	7.12%		11/2023		75			74			—		73
Upserve, Inc.	One stop	L + 6.50%	^(e)	7.50%		07/2023		1,694			1,683			0.3		1,559
Upserve, Inc.^#	One stop	L + 6.50%	^(e)	7.50%		07/2023		565			562			0.1		520
Upserve, Inc^.#(5)	One stop	L + 6.50%		N/A⁽⁶⁾		07/2023		—			—			—		(2)
Vector CS Midco Limited & Cloudsense Ltd.^#(7)(8)(9)	One stop	N/A		4.50% cash/3.55% PIK		05/2024		1,951			1,935			0.4		1,724
Vector CS Midco Limited & Cloudsense Ltd.^#(7)(8)(9)	One stop	L + 8.05%	⁽ⁱ⁾	4.50% cash/3.55% PIK		05/2024		58			58			—		58
Velocity Technology Solutions, Inc.	One stop	L + 6.00%	^(c)	7.45%		12/2023		1,614			1,597			0.4		1,598
Velocity Technology Solutions, Inc.^#	One stop	L + 6.00%	^(d)	7.45%		12/2023		50			49			—		49
Workforce Software, LLC	One stop	L + 6.50%	^(c)	8.11%		07/2025		10,900			10,707			2.3		10,464
Workforce Software, LLC^#(5)	One stop	L + 6.50%		N/A⁽⁶⁾		07/2025		—			(2)			—		—
								451,135			445,582			94.7		428,160
Electronics
Appriss Holdings, Inc.	One stop	L + 5.50%	^(a)	6.49%		06/2026		8,606			8,457			1.9		8,434
Appriss Holdings, Inc^.#	One stop	L + 5.50%	^(a)	6.49%		06/2025		101			97			—		97
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	6.57%		04/2022		7,648			7,585			1.7		7,648
Diligent Corporation^#	One stop	L + 5.50%	^(d)	7.42%		04/2022		3,701			3,671			0.8		3,701
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	6.93%		04/2022		2,471			2,452			0.5		2,471
Diligent Corporation	One stop	L + 5.50%	^(c)(d)	6.57%		04/2022		1,933			1,921			0.4		1,933
Diligent Corporation^#	One stop	L + 5.50%	^(d)	7.42%		04/2022		952			944			0.2		952
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	6.92%		04/2022		721			711			0.2		721
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	6.57%		04/2022		274			273			0.1		274
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	6.57%		04/2022		96			95			—		96
Diligent Corporation^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		04/2022		—			(21)			—		—
Episerver, Inc.^#(7)(8)	One stop	L + 6.25%	^(a)	6.25%		10/2024		4,749			4,702			1.0		4,374
Episerver, Inc.^#	One stop	L + 6.00%	^(a)	7.00%		10/2024		2,754			2,726			0.6		2,616
Episerver, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		10/2024		—			(2)			—		(10)
ES Acquisition, LLC	One stop	L + 5.50%	^(c)	7.18%		11/2025		15,938			15,787			3.4		15,141
ES Acquisition, LLC^#	One stop	L + 5.50%	^(c)	7.41%		11/2025		861			853			0.2		818
ES Acquisition, LLC^#	One stop	L + 5.50%	^(c)(d)	7.18%		11/2025		196			194			—		184
ES Acquisition, LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		11/2025		—			(42)			—		—
Red Dawn SEI Buyer, Inc.	Senior loan	L + 4.25%	^(d)	5.32%		11/2025		13,643			13,482			2.8		12,551
Red Dawn SEI Buyer, Inc.^#	Senior loan	L + 4.25%	^(a)	5.25%		11/2025		250			247			—		230
Red Dawn SEI Buyer, Inc.^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		11/2025		—			(23)			—		(193)
Silver Peak Systems, Inc.	One stop	L + 7.00%	^(a)	9.00%		04/2024		1,461			1,444			0.3		1,432
Silver Peak Systems, Inc.^#	One stop	L + 7.00%		N/A⁽⁶⁾		04/2024		—			—			—		1

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Electronics - (continued)
Sovos Compliance	One stop	L + 4.75%	^(a)	5.75%		04/2024		$	7,513		$	7,390		1.6	%	$	7,362
Sovos Compliance	Second lien	L + 0.00%		12.00% PIK		04/2025		3,597			3,529			0.8		3,597
Sovos Compliance^#	One stop	L + 4.75%	^(a)	5.75%		04/2024		735			729			0.2		721
Sovos Compliance^#	Second lien	L + 0.00%		12.00% PIK		04/2025		543			532			0.1		543
Sovos Compliance^#	One stop	L + 4.75%	^(a)	5.75%		04/2024		505			495			0.1		495
Sovos Compliance^#	One stop	L + 4.75%	^(a)	5.75%		04/2024		328			317			0.1		322
Sovos Compliance^#	One stop	L + 4.75%	^(a)	5.75%		04/2024		99			97			—		97
								79,675			78,642			17.0		76,608
Finance
Institutional Shareholder Services	Senior loan	L + 4.50%	^(c)(d)	5.57%		03/2026		6,412			6,358			1.4		6,156
Institutional Shareholder Services^#	Senior loan	L + 4.50%	^(c)(d)	5.56%		03/2024		100			98			—		92
								6,512			6,456			1.4		6,248
Healthcare, Education and Childcare
ACP Ulysses Buyer, Inc.	Senior loan	L + 5.00%	^(c)(d)	6.07%		02/2026		4,903			4,854			1.1		4,706
Aspen Medical Products, LLC	One stop	L + 5.25%	^(a)	6.88%		06/2025		1,038			1,029			0.3		955
Aspen Medical Products, LLC^#	One stop	L + 5.25%	^(c)	6.50%		06/2025		17			17			—		16
Belmont Instrument, LLC	Senior loan	L + 4.75%	^(d)	5.82%		12/2023		1,793			1,776			0.4		1,703
BIO18 Borrower, LLC	One stop	L + 5.25%	^(c)	7.03%		11/2024		1,763			1,746			0.4		1,728
BIO18 Borrower, LLC#	One stop	L + 5.25%	^(c)	7.03%		11/2024		1,639			1,623			0.4		1,606
BIO18 Borrower, LLC#	One stop	L + 5.25%	^(c)	6.55%		11/2024		105			104			—		103
BIO18 Borrower, LL^C#(5)	One stop	L + 5.25%	^(c)	N/A⁽⁶⁾		11/2024		—			(4)			—		(8)
Blades Buyer, Inc.	Senior loan	L + 4.50%	^(c)(f)	6.00%		08/2025		791			786			0.2		759
Blades Buyer, Inc.^#	Senior loan	L + 4.50%	^(a)	5.50%		08/2025		45			45			—		43
Blades Buyer, Inc.^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		08/2025		—			(3)			—		(16)
CMI Parent Inc.	Senior loan	L + 4.25%	^(c)	5.95%		08/2025		14,577			14,447			3.1		13,848
CMI Parent Inc^.#	Senior loan	L + 4.25%	^(a)(c)	5.25%		08/2025		150			149			—		142
CRH Healthcare Purchaser, Inc.	Senior loan	L + 4.50%	^(c)	5.95%		12/2024		2,383			2,364			0.5		2,288
CRH Healthcare Purchaser, Inc.^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2024		—			(1)			—		(6)
CRH Healthcare Purchaser, Inc.^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2024		—			(13)			—		(68)
Elite Dental Partners LLC	One stop	L + 5.25%	^(d)	6.32%		06/2023		745			738			0.1		581
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(d)	6.32%		06/2023		653			646			0.1		509
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(d)	6.32%		06/2023		612			606			0.1		477
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(d)	6.32%		06/2023		583			578			0.1		455
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(d)	6.32%		06/2023		559			554			0.1		436
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(c)(d)	6.32%		06/2023		100			99			—		78
Elite Dental Partners LLC^#(5)	One stop	L + 5.25%	^(d)	6.32%		06/2023		7			(19)			—		5
ERG Buyer, LLC	One stop	L + 5.50%	^(c)	6.95%		05/2024		2,301			2,277			0.5		2,071
ERG Buyer, LLC^#	One stop	P + 4.50%	^(f)	7.75%		05/2024		150			148			—		135
ERG Buyer, LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		05/2024		—			(40)			—		—
eSolutions, Inc.	One stop	L + 6.50%	^(a)	7.50%		03/2022		22,756			22,596			4.9		22,301
Eyecare Services Partners Holdings LLC^#	One stop	L + 6.25%	^(c)	7.70%		05/2023		1,539			1,443			0.3		1,419
Eyecare Services Partners Holdings LLC^#	One stop	L + 6.25%	^(c)	7.70%		05/2023		1,137			1,133			0.2		1,046
FYI Optical Acquisitions, Inc. & FYI USA Inc.^#(7)(8)(13)	One stop	L + 4.50%		6.24%		03/2027		803			795			0.2		688
FYI Optical Acquisitions, Inc. & FYI USA Inc.^#(5)(7)(13)	One stop	L + 4.50%		N/A⁽⁶⁾		03/2027		—			(16)			—		(111)

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Healthcare, Education and Childcare - (continued)
FYI Optical Acquisitions, Inc. & FYI USA Inc.^{#(5)(7)(8)(13)}	One stop	L + 4.50%		N/A⁽⁶⁾		03/2027		$	—		$	(41)		(0.1)	%	$	(263)
Krueger-Gilbert Health Physics, LLC^#	Senior loan	L + 5.25%	^(c)	6.70%		05/2025		478			474			0.1		445
Krueger-Gilbert Health Physics, LLC^#	Senior loan	L + 5.25%	^(c)	6.70%		05/2025		179			169			—		167
Krueger-Gilbert Health Physics, LLC	Senior loan	L + 5.25%	^(c)	6.70%		05/2025		129			128			—		120
Krueger-Gilbert Health Physics, LLC^#	Senior loan	L + 5.25%	^(c)	6.48%		05/2025		25			25			—		22
MD Now Holdings, Inc.	One stop	L + 5.00%	^(d)	6.07%		08/2024		2,913			2,891			0.6		2,796
MD Now Holdings, Inc.^#	One stop	L + 5.00%	^(d)	6.07%		08/2024		242			237			0.1		209
MD Now Holdings, Inc.^#	One stop	L + 5.00%	^(c)	6.45%		08/2024		150			149			—		144
ONsite Mammography, LLC	One stop	L + 6.00%	^(d)	7.07%		11/2023		673			666			0.1		645
ONsite Mammography, LLC^#	One stop	L + 6.00%	^(a)(d)	7.04%		11/2023		50			47			—		48
ONsite Mammography, LLC^#	One stop	L + 6.00%	^(a)	7.00%		11/2023		40			40			—		38
Summit Behavioral Healthcare, LLC	Senior loan	L + 4.75%	^(c)	6.36%		10/2023		1,622			1,609			0.4		1,492
Summit Behavioral Healthcare, LLC^#	Senior loan	L + 4.75%	^(c)	6.31%		10/2023		150			149			—		138
Summit Behavioral Healthcare, LLC^#	Senior loan	L + 4.75%	^(c)	6.36%		10/2023		64			63			—		59
								67,864			67,063			14.2		63,949
Hotels, Motels, Inns, and Gaming
Davidson Hotel Company, LLC	One stop	L + 5.25%	^(a)	6.25%		07/2024		2,106			2,088			0.3		1,579
Davidson Hotel Company, LLC^#	One stop	L + 5.25%	^(a)	6.25%		07/2024		422			422			0.1		316
Davidson Hotel Company, LLC^#	One stop	L + 5.25%	^(a)	6.25%		07/2024		50			50			—		38
Davidson Hotel Company, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		07/2024		—			(5)			—		—
								2,578			2,555			0.4		1,933
Insurance
Integrity Marketing Acquisition, LLC	Senior loan	L + 5.75%	^(c)	7.39%		08/2025		365			360			0.1		358
Integrity Marketing Acquisition, LLC^#	Senior loan	L + 5.75%	^(c)	0.08%		08/2025		320			318			0.1		314
Integrity Marketing Acquisition, LLC^#	Senior loan	L + 5.75%	^(c)	7.47%		08/2025		193			192			—		190
Integrity Marketing Acquisition, LLC^#	Senior loan	L + 5.75%	^(c)	7.26%		08/2025		133			126			—		114
Integrity Marketing Acquisition, LLC^#	Senior loan	L + 5.75%	^(c)	6.97%		08/2025		15			14			—		14
J.S. Held Holdings, LLC	One stop	L + 6.00%	^(c)(d)	7.07%		07/2025		17,764			17,381			3.6		16,344
J.S. Held Holdings, LLC^#	One stop	L + 6.00%	^(c)	7.22%		07/2025		116			112			—		100
J.S. Held Holdings, LLC^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		07/2025		—			(14)			—		(88)
Orchid Underwriters Agency, LLC	Senior loan	L + 4.50%	^(c)	5.57%		12/2024		811			804			0.2		746
Orchid Underwriters Agency, LLC^#	Senior loan	L + 4.50%	^(c)	5.62%		12/2024		19			19			—		18
Orchid Underwriters Agency, LLC^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2024		—			(3)			—		(32)
RSC Acquisition, Inc.	One stop	L + 5.50%	^(c)	7.26%		10/2026		9,351			9,174			2.0		8,977
RSC Acquisition, Inc.^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		10/2026		—			(1)			—		(3)
RSC Acquisition, Inc.^#(5)	One stop	L + 5.50%	^(c)	N/A⁽⁶⁾		10/2026		—			(41)			—		(87)
								29,087			28,441			6.0		26,965
Leisure, Amusement, Motion Pictures, Entertainment
CR Fitness Holdings, LLC	Senior loan	L + 4.00%	^(c)	5.45%		07/2025		317			314			0.1		279
CR Fitness Holdings, LLC^#	Senior loan	L + 4.00%	^(c)(f)	5.00%		07/2025		106			103			—		93
CR Fitness Holdings, LLC^#	Senior loan	L + 4.00%	^(c)(f)	5.18%		07/2025		37			37			—		33
EOS Fitness Opco Holdings, LLC	One stop	L + 4.75%	^(c)	6.20%		01/2025		1,746			1,733			0.4		1,607
EOS Fitness Opco Holdings, LLC^#	One stop	L + 4.75%	^(c)	6.20%		01/2025		271			266			—		241
EOS Fitness Opco Holdings, LLC^#	One stop	P + 3.75%	^(f)	7.00%		01/2025		60			60			—		55

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Leisure, Amusement, Motion Pictures, Entertainment - (continued)
Planet Fit Indy 10 LLC	One stop	L + 5.25%	^(c)	6.70%		07/2025		$	14,013		$	13,933		2.9	%	$	13,032
Planet Fit Indy 10 LLC^#	One stop	L + 5.25%	^(c)	6.99%		07/2025		3,654			3,614			0.8		3,399
Planet Fit Indy 10 LLC^#	One stop	L + 5.25%	^(c)	6.70%		07/2025		1,984			1,973			0.4		1,845
Planet Fit Indy 10 LLC^#	One stop	L + 5.25%	^(c)	6.45%		07/2025		100			100			—		93
Sunshine Sub, LLC	One stop	L + 4.75%	^(a)	5.75%		05/2024		1,984			1,957			0.4		1,826
Sunshine Sub, LLC^#	One stop	L + 4.75%	^(a)	5.75%		05/2024		1,942			1,916			0.4		1,787
Sunshine Sub, LLC^#	One stop	L + 4.75%	^(a)	5.75%		05/2024		100			99			—		92
Titan Fitness, LLC	One stop	L + 4.75%	^(c)	6.50%		02/2025		6,689			6,636			1.4		6,154
Titan Fitness, LLC^#	One stop	L + 4.75%	^(c)	6.38%		02/2025		789			778			0.2		726
Titan Fitness, LLC^#	One stop	L + 4.75%	^(c)(f)	6.00%		02/2025		237			235			—		217
WBZ Investment LLC	One stop	L + 5.50%	^(c)(f)	6.95%		09/2024		1,427			1,416			0.3		1,284
WBZ Investment LLC^#	One stop	L + 5.50%	^(a)(d)	6.50%		09/2024		473			470			0.1		426
WBZ Investment LLC^#	One stop	L + 5.50%	^(c)	6.95%		09/2024		329			326			0.1		296
WBZ Investment LLC^#	One stop	L + 5.50%	^(c)	6.95%		09/2024		168			166			—		151
WBZ Investment LLC^#	One stop	L + 5.50%	^(a)(c)	6.50%		09/2024		40			40			—		35
								36,466			36,172			7.5		33,671
Oil and Gas
Drilling Info Holdings, Inc.	Senior loan	L + 4.50%	^(a)	5.49%		07/2025		12,142			11,816			2.6		11,413
Drilling Info Holdings, Inc.	Senior loan	L + 4.25%	^(a)	5.24%		07/2025		9,329			9,227			1.9		8,667
Drilling Info Holdings, Inc.^#	Senior loan	L + 4.25%	^(a)	5.15%		07/2023		75			74			—		68
Drilling Info Holdings, Inc.^#	Senior loan	L + 4.50%	^(a)	5.40%		07/2023		65			61			—		59
Drilling Info Holdings, Inc.^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		07/2025		—			(5)			—		(33)
								21,611			21,173			4.5		20,174
Personal and Non Durable Consumer Products (Mfg. Only)
WU Holdco, Inc.	One stop	L + 5.50%	^(c)	6.99%		03/2026		1,075			1,066			0.2		1,054
WU Holdco, Inc. ^#	One stop	L + 5.50%	^(c)	7.19%		03/2026		165			164			0.1		161
WU Holdco, Inc. ^#	One stop	L + 5.50%	^(c)	6.72%		03/2025		20			20			—		19
								1,260			1,250			0.3		1,234
Personal, Food and Miscellaneous Services
Blue River Pet Care, LLC	One stop	L + 5.00%	^(d)	6.07%		07/2026		5,516			5,467			1.1		5,130
Blue River Pet Care, LLC^#	One stop	L + 5.00%	^(c)(d)	6.06%		08/2025		138			136			—		123
Blue River Pet Care, LLC^#(5)	One stop	L + 5.00%		N/A⁽⁶⁾		07/2026		—			(38)			(0.1)		(297)
Captain D's, LLC	Senior loan	L + 4.50%	^(c)(d)	5.50%		12/2023		1,246			1,234			0.3		1,121
Captain D's, LLC^#	Senior loan	P + 3.50%	^(c)(f)	6.74%		12/2023		61			60			—		52
Encorevet Group LLC^#	Senior loan	L + 5.00%	^(c)	6.45%		11/2024		1,828			1,828			0.4		1,700
Encorevet Group LLC^#	Senior loan	L + 5.00%	^(c)	6.58%		11/2024		942			934			0.2		876
Encorevet Group LLC^#	Senior loan	L + 5.00%	^(c)	6.45%		11/2024		162			162			—		151
Encorevet Group LLC^#	Senior loan	L + 5.00%	^(c)	6.23%		11/2024		25			25			—		22
Encorevet Group LLC^#(5)	Senior loan	L + 5.00%		N/A⁽⁶⁾		11/2024		—			(48)			(0.1)		(363)
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.60%		08/2023		1,526			1,511			0.3		1,449
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.73%		08/2023		1,452			1,434			0.3		1,379
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.51%		08/2023		1,111			1,101			0.2		1,056
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.60%		08/2023		879			871			0.2		835
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.62%		08/2023		750			742			0.2		712

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Personal, Food and Miscellaneous Services - (continued)
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.88%		08/2023		$	619		$	613		0.1	%	$	588
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.51%		08/2023		599			594			0.1		569
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.51%		08/2023		488			483			0.1		464
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.56%		08/2023		446			442			0.1		423
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.87%		08/2023		444			440			0.1		422
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.27%		08/2023		384			380			0.1		365
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)(c)	6.26%		08/2023		165			163			—		156
Imperial Optical Midco Inc.^#	One stop	L + 5.25%	^(b)	6.51%		08/2023		148			146			—		140
Imperial Optical Midco Inc.^#	One stop	L + 5.25%		N/A⁽⁶⁾		08/2023		—			—			—		—
Imperial Optical Midco Inc.^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		08/2023		—			(23)			—		—
Midwest Veterinary Partners, LLC^#	One stop	L + 4.75%	^(d)	5.82%		07/2025		797			790			0.2		773
Midwest Veterinary Partners, LLC^#	One stop	L + 6.00%	^(a)	7.00%		07/2025		630			601			0.2		611
Midwest Veterinary Partners, LLC	One stop	L + 6.00%	^(d)	7.07%		07/2025		249			246			0.1		241
Midwest Veterinary Partners, LLC^#	One stop	L + 4.75%	^(d)	5.82%		07/2025		100			99			—		97
NVA Holdings, Inc.	Senior loan	L + 3.50%	^(c)	4.95%		02/2026		1,001			991			0.2		921
PPV Intermediate Holdings II, LLC^#	One stop	L + 5.00%	^(c)(d)	7.33%		05/2023		1,709			1,708			0.4		1,588
PPV Intermediate Holdings II, LLC^#	One stop	P + 4.00%	^(d)(f)	6.75%		05/2023		50			50			—		48
PPV Intermediate Holdings II, LLC^#	One stop	N/A		7.90% PIK		05/2023		8			8			—		8
Ruby Slipper Cafe LLC, The^#	One stop	L + 7.50%	^(c)	8.95%		01/2023		334			332			0.1		317
Ruby Slipper Cafe LLC, The#	One stop	L + 7.50%	^(c)	8.62%		01/2023		85			84			—		81
Ruby Slipper Cafe LLC, The#	One stop	L + 7.50%	^(c)	8.70%		01/2023		20			20			—		19
Southern Veterinary Partners, LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		05/2025		—			(370)			(0.3)		(1,184)
Veterinary Specialists of North America, LLC	Senior loan	L + 4.25%	^(a)	5.24%		04/2025		17,010			16,869			3.6		16,160
Veterinary Specialists of North America, LLC^#	Senior loan	L + 4.25%	^(a)	5.18%		04/2025		1,435			1,393			0.3		1,181
Veterinary Specialists of North America, LLC^#	Senior loan	L + 4.25%	^(a)	5.24%		04/2025		1,238			1,227			0.3		1,176
Veterinary Specialists of North America, LLC^#	Senior loan	L + 4.25%	^(a)	5.24%		04/2025		623			618			0.1		592
Veterinary Specialists of North America, LLC^#	Senior loan	L + 4.25%	^(a)	5.05%		04/2025		500			496			0.1		475
								44,718			43,819			8.9		40,177
Printing and Publishing
Messenger, LLC	One stop	L + 6.00%	^(a)(c)(f)	7.16%		08/2023		2,041			2,027			0.4		1,898
Messenger, LLC^#	One stop	P + 5.00%	^(f)	8.25%		08/2023		16			16			—		14
Messenger, LLC^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		08/2023		—			(1)			—		—
								2,057			2,042			0.4		1,912
Retail Stores
2nd Ave. LLC	One stop	L + 5.50%	^(d)	7.28%		09/2025		1,391			1,378			0.3		1,112
2nd Ave. LLC^#	One stop	L + 5.50%	^(a)(c)	6.65%		09/2025		50			50			—		40
Jet Equipment & Tools Ltd.^#(7)(8)(10)	One stop	L + 5.75%	^(a)	7.41%		11/2024		4,278			4,237			0.8		3,661
Jet Equipment & Tools Ltd.^(7)(10)	One stop	L + 5.75%	^(a)	6.75%		11/2024		3,373			3,345			0.7		3,103
Jet Equipment & Tools Ltd.^(7)(10)	One stop	L + 5.75%	^(a)	6.75%		11/2024		1,036			1,028			0.2		953
Jet Equipment & Tools Ltd.^(7)(10)	One stop	L + 5.75%	^(a)	6.75%		11/2024		399			395			0.1		367
Jet Equipment & Tools Ltd.^{#(5)(7)(8)(10)}	One stop	L + 5.75%		N/A⁽⁶⁾		11/2024		—			(1)			(0.1)		(11)
Pet Supplies Plus, LLC	Senior loan	L + 4.50%	^(b)	6.16%		12/2024		3,325			3,298			0.7		3,158
Pet Supplies Plus, LLC^#	Senior loan	L + 4.50%	^(b)	5.50%		12/2023		112			111			0.1		106
Sola Franchise, LLC and Sola Salon Studios, LLC	One stop	L + 5.25%	^(d)	6.32%		10/2024		929			922			0.2		836

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Retail Stores - (continued)
Sola Franchise, LLC and Sola Salon Studios, LLC^#	One stop	L + 5.25%	^(d)	6.32%		10/2024		$	674		$	668		0.1	%	$	606
Sola Franchise, LLC and Sola Salon Studios, LLC^#	One stop	L + 5.25%	^(c)(f)	6.84%		10/2024		43			42			—		38
Sola Franchise, LLC and Sola Salon Studios, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		10/2024		—			(6)			—		(85)
Vermont Aus Pty Ltd^#(7)(8)(11)	One stop	L + 5.25%	^(j)	5.84%		12/2024		439			432			0.1		366
Vermont Aus Pty Ltd^#(7)(8)(11)	One stop	L + 5.25%	^(j)	5.84%		12/2024		16			14			—		7
								16,065			15,913			3.2		14,257
Total debt investments								$	842,468		$	831,525		175.2	%	$	791,098


Equity Investments^(14)(15)
Automobile
Grease Monkey International, LLC^#	LLC units	N/A		N/A		N/A		73			$	73		0.1	%	$	159
Quick Quack Car Wash Holdings, LLC^#	LLC units	N/A		N/A		N/A		—			93			—		76
											166			0.1		235
Beverage, Food and Tobacco
Mendocino Farms, LLC^#	Common stock	N/A		N/A		N/A		59			257			—		249
SSRG Holdings, LLC^#	LLC units	N/A		N/A		N/A		40			399			0.1		283
Wood Fired Holding Corp.^#	LLC units	N/A		N/A		N/A		103			103			—		82
Wood Fired Holding Corp.^#	LLC units	N/A		N/A		N/A		103			—			—		—
											759			0.1		614
Buildings and Real Estate
Groundworks LLC^#	LLC units	N/A		N/A		N/A		—			42			—		29

Chemicals, Plastics and Rubber
Inhance Technologies Holdings LLC^#	LLC units	N/A		N/A		N/A		—			34			—		6

Diversified/Conglomerate Service
Arctic Wolfs Networks, Inc. and Arctic Wolf Networks Canada, Inc.^#	Preferred stock	N/A		N/A		N/A		217			171			—		170
Astute Holdings, Inc.^#	LP interest	N/A		N/A		N/A		—			83			—		93
Calabrio, Inc. ^#	Common stock	N/A		N/A		N/A		58			444			0.1		496
Caliper Software, Inc.^#	Preferred stock	N/A		N/A		N/A		1			596			0.2		675
Caliper Software, Inc.^#	Common stock	N/A		N/A		N/A		53			53			—		106
Caliper Software, Inc.^#	Preferred stock	N/A		N/A		N/A		—			8			—		10
Centrify Corporation^#	LP interest	N/A		N/A		N/A		—			170			—		50
Centrify Corporation^#	LP interest	N/A		N/A		N/A		60			—			—		—
Cloudbees, Inc.^#	Preferred stock	N/A		N/A		N/A		15			93			—		73
Cloudbees, Inc.^#	Warrant	N/A		N/A		N/A		19			27			—		39
Confluence Technologies, Inc.^#	LLC interest	N/A		N/A		N/A		—			53			—		83
Connexin Software, Inc. ^#	LLC interest	N/A		N/A		N/A		26			26			—		31
Convercent, Inc.^#	Warrant	N/A		N/A		N/A		82			16			—		24
Digital Guardian, Inc.^#	Preferred stock	N/A		N/A		N/A		72			87			—		67
Digital Guardian, Inc.^#	Warrant	N/A		N/A		N/A		25			43			—		43
Digital Guardian, Inc.^#	Preferred stock	N/A		N/A		N/A		15			27			—		26
Digital Guardian, Inc.^#	Preferred stock	N/A		N/A		N/A		14			25			—		28

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾		Interest Rate⁽²⁾		Maturity Date		Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
Digital Guardian, Inc.^#	Warrant	N/A	N/A		N/A		3		$	4		—	%	$	9
EWC Growth Partners LLC^#	LLC units	N/A	N/A		N/A		—		25			0.1		22
GS Acquisitionco, Inc.^#	LP interest	N/A	N/A		N/A		—		44			—		83
HSI Halo Acquisition, Inc.^#	Preferred stock	N/A	N/A		N/A		—		75			—		65
HSI Halo Acquisition, Inc.^#	Preferred stock	N/A	N/A		N/A		—		—			—		—
Internet Truckstop Group LLC^#	LP interest	N/A	N/A		N/A		146		146			—		138
MetricStream, Inc.^#	Warrant	N/A	N/A		N/A		44		67			—		48
Namely, Inc.^#	Warrant	N/A	N/A		N/A		8		14			—		20
Net Health Acquisition Corp.^#	LP interest	N/A	N/A		N/A		—		126			—		124
Nexus Brands Group, Inc.^#	LP interest	N/A	N/A		N/A		—		49			—		29
Onapsis, Inc., Virtual Forge GMBH and Onapsis GMBH^#	Warrant	N/A	N/A		N/A		2		6			—		6
Property Brands, Inc.^#	LLC units	N/A	N/A		N/A		11		106			0.1		163
PCS Intermediate II Holdings, LLC^#	LLC units	N/A	N/A		N/A		13		126			—		117
Personify, Inc.^#	LLC units	N/A	N/A		N/A		145		145			0.1		170
Pride Midco, Inc.^#	Preferred stock	N/A	N/A		N/A		1		556			0.2		605
RegEd Aquireco, LLC^#	LP interest	N/A	N/A		N/A		—		70			—		54
RegEd Aquireco, LLC^#	LP interest	N/A	N/A		N/A		1		—			—		—
SnapLogic, Inc. ^#	Preferred stock	N/A	N/A		N/A		43		108			0.1		145
SnapLogic, Inc. ^#	Warrant	N/A	N/A		N/A		16		6			—		38
Telesoft Holdings LLC^#	LP interest	N/A	N/A		N/A		131		131			—		99
									3,726			0.9		3,949
Electronics
Appriss Holdings, Inc.^#	Preferred stock	N/A	N/A		N/A		—		52			—		59
Episerver, Inc.^#	Common stock	N/A	N/A		N/A		17		173			—		124
ES Acquisition, LLC^#	LP interest	N/A	N/A		N/A		—		289			0.1		236
Red Dawn SEI Buyer, Inc.^#	LP interest	N/A	N/A		N/A		219		219			—		177
Silver Peak Systems, Inc. ^#	Warrant	N/A	N/A		N/A		17		6			—		12
									739			0.1		608
Healthcare, Education and Childcare
Aspen Medical Products, LLC^#	Common stock	N/A	N/A		N/A		—		17			—		12
BIO18 Borrower, LLC^#(16)	LLC units	N/A	N/A		N/A		141		246			0.1		314
CMI Parent Inc.^#	LLC units	N/A	N/A		N/A		—		492			0.1		476
CMI Parent Inc.^#	LLC units	N/A	N/A		N/A		5		5			—		—
CRH Healthcare Purchaser, Inc.^#	LP interest	N/A	N/A		N/A		102		102			—		110
Elite Dental Partners LLC^#	Common stock	N/A	N/A		N/A		—		161			—		7
ERG Buyer, LLC^#	LLC units	N/A	N/A		N/A		—		165			—		23
ERG Buyer, LLC^#	LLC units	N/A	N/A		N/A		2		2			—		—
Krueger-Gilbert Health Physics, LLC^#	LLC interest	N/A	N/A		N/A		46		46			—		26
MD Now Holdings, Inc.^#	LLC units	N/A	N/A		N/A		3		33			—		32
Summit Behavioral Healthcare, LLC^#	LLC interest	N/A	N/A		N/A		—		14			—		8
Summit Behavioral Healthcare, LLC^#	LLC interest	N/A	N/A		N/A		—		—			—		—
									1,283			0.2		1,008
Insurance
Orchid Underwriters Agency, LLC^#	LP interest	N/A	N/A		N/A		18		18			—		14

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


	Investment Type	Spread Above Index ⁽¹⁾		Interest Rate⁽²⁾		Maturity Date		Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Leisure, Amusement, Motion Pictures, Entertainment
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		15		$	24		—	%	$	20
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		10		16			—		14
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		9		13			—		11
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		8		12			—		10
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		3		5			—		4
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		—		—			—		—
									70			—		59

Personal, Food and Miscellaneous Services
Blue River Pet Care, LLC^#	LLC units	N/A	N/A		N/A		—		207			0.1		186
Captain D's, LLC^#	LLC interest	N/A	N/A		N/A		15		15			—		9
Midwest Veterinary Partners, LLC^#	LLC units	N/A	N/A		N/A		—		13			—		6
Midwest Veterinary Partners, LLC^#	LLC units	N/A	N/A		N/A		3		—			—		—
PPV Intermediate Holdings II, LLC^#	LLC interest	N/A	N/A		N/A		77		77			—		71
Ruby Slipper Cafe LLC, The^#	LLC units	N/A	N/A		N/A		6		61			—		37
									373			0.1		309
Retail Stores
2nd Ave. LLC^#	LP interest	N/A	N/A		N/A		157		157			—		87
Jet Equipment & Tools Ltd.^#(7)(8)(10)	LLC units	N/A	N/A		N/A		—		173			0.1		239
Pet Supplies Plus, LLC^#(16)	LLC units	N/A	N/A		N/A		34		34			—		61
Sola Franchise, LLC and Sola Salon Studios, LLC^#	LLC units	N/A	N/A		N/A		1		88			—		104
Sola Franchise, LLC and Sola Salon Studios, LLC^#	LLC units	N/A	N/A		N/A		—		18			—		21
									470			0.1		512
Total equity investments																						$	7,680		1.6		%	$	7,343

Total investments																	$	842,468		$	839,205	176.8		%	$	798,441

Money market funds (included in cash and cash equivalents and restricted cash and cash equivalents)
BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)							0.21% ⁽¹⁷⁾							$	21,067		4.7		%	$	21,067
Total money market funds																						$	21,067		4.7		%	$	21,067

Total investments and money market funds																						$	860,272		181.5		%	$	819,508

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments (unaudited) - (continued)

March 31, 2020

(In thousands)


#						Denotes that all or a portion of the loan collateralizes the DB Credit Facility (as defined in Note 8).

⁽¹⁾ The majority of the investments bear interest at a rate that is permitted to be determined by reference to the London Interbank Offered Rate (‘‘LIBOR’’ or ‘‘L’’) denominated in U.S. dollars or U.K. pound sterling (‘‘GBP’’), Euro Interbank Offered Rate (‘‘EURIBOR’’ or ‘‘E’’) or Prime (‘‘P’’) and which reset daily, monthly, quarterly, semiannually or annually. For each, the Company has provided the spread over LIBOR, EURIBOR, or Prime and the weighted average current interest rate in effect as of March 31, 2020. Certain investments are subject to a LIBOR, EURIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. Listed below are the index rates as of March 31, 2020, which was the last business day of the period on which LIBOR was determined. The actual index rate for each loan listed may not be the applicable index rate outstanding as of March 31, 2020, as the loan may have priced or repriced based on an index rate prior to March 31, 2020.

^(a) Denotes that all or a portion of the loan was indexed to the 30-day LIBOR, which was 0.99% as of March 31, 2020.

^(b) Denotes that all or a portion of the loan was indexed to the 60-day LIBOR, which was 1.26% as of March 31, 2020.

^(c) Denotes that all or a portion of the loan was indexed to the 90-day LIBOR, which was 1.45% as of March 31, 2020.

^(d) Denotes that all or a portion of the loan was indexed to the 180-day LIBOR, which was 1.18% as of March 31, 2020.

^(e) Denotes that all or a portion of the loan was indexed to the 360-day LIBOR, which was 1.00% as of March 31, 2020.

^(f)Denotes that all or a portion of the loan was indexed to the Prime rate, which was 3.25% as of March 31, 2020.

^(g)Denotes that all or a portion of the loan was indexed to the 90-day EURIBOR, which was -0.36% as of March 31, 2020.

^(h)Denotes that all or a portion of the loan was indexed to the 30-day GBP LIBOR, which was 0.24% as of March 31, 2020.

⁽ⁱ⁾Denotes that all or a portion of the loan was indexed to the 90-day GBP LIBOR, which was 0.60% as of March 31, 2020.

^(j)Denotes that all or a portion of the loan was indexed to the Australia Three Month Interbank Rate, which was 0.42% as of March 31, 2020.

⁽²⁾For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect as of March 31, 2020.

⁽³⁾The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

⁽⁴⁾The fair value of the investment was valued using significant unobservable inputs. See Note 7. Fair Value Measurements.

⁽⁵⁾The negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par. The negative amortized cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

⁽⁶⁾The entire commitment was unfunded as of March 31, 2020. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.

⁽⁷⁾The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the ‘‘1940 Act’’). Under the 1940 Act, the Company can not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of March 31, 2020, total non-qualifying assets at fair value represented 3.5% of the Company’s total assets calculated in accordance with the 1940 Act.

⁽⁸⁾Investment is denominated in foreign currency and is translated into U.S. dollars as of the valuation date or the date of the transaction. See Note 2. Significant Accounting Policies and Recent Accounting Updates - Foreign Currency Translation.

⁽⁹⁾The headquarters of this portfolio company is located in the United Kingdom.

⁽¹⁰⁾The headquarters of this portfolio company is located in Canada.

⁽¹¹⁾The headquarters of this portfolio company is located in Australia.

⁽¹²⁾The headquarters of this portfolio company is located in Luxembourg.

⁽¹³⁾The headquarters of this portfolio company is located in Andorra.

⁽¹⁴⁾Equity investments are non-income producing securities unless otherwise noted.

⁽¹⁵⁾Ownership of certain equity investments occurs through a holding company or partnership.

⁽¹⁶⁾The Company holds an equity investment that entitles it to receive preferential dividends.

⁽¹⁷⁾The rate shown is the annualized seven-day yield as of March 31, 2020.

See Notes to Consolidated Financial Statements.

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Investments

Debt investments
Automobile
Grease Monkey International, LLC	Senior loan	L + 5.00%	^(a)	7.04%		11/2022		$	475		$	471		0.1	%	$	475
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(a)	7.04%		11/2022		353			349			0.1		353
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(a)	7.04%		11/2022		179			179			0.1		179
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(a)	7.04%		11/2022		163			162			0.1		163
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(a)	7.04%		11/2022		55			54			—		55
Grease Monkey International, LLC^#	Senior loan	L + 5.00%	^(a)	7.04%		11/2022		19			17			—		19
JHCC Holdings LLC	One stop	L + 5.50%	^(c)	7.60%		09/2025		3,035			3,005			0.9		3,004
JHCC Holdings LLC^#	One stop	L + 5.50%	^(a)	7.54%		09/2025		10			9			—		9
JHCC Holdings LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		09/2025		—			(50)			—		(51)
Power Stop, LLC	Senior loan	L + 4.75%	^(c)	6.85%		10/2025		675			672			0.2		675
Quick Quack Car Wash Holdings, LLC	One stop	L + 6.50%	^(a)	8.54%		04/2023		1,695			1,680			0.5		1,695
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	8.54%		04/2023		720			714			0.2		720
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	8.55%		04/2023		630			619			0.2		630
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	8.54%		04/2023		481			477			0.1		481
Quick Quack Car Wash Holdings, LLC^#	One stop	L + 6.50%	^(a)	8.55%		04/2023		40			40			—		40
								8,530			8,398			2.5		8,447
Beverage, Food and Tobacco
BJH Holdings III Corp.⁽¹²⁾	One stop	L + 5.75%	^(a)	7.79%		08/2025		19,400			19,079			5.6		19,206
BJH Holdings III Corp.^#	One stop	L + 5.75%	^(a)	7.79%		08/2025		80			72			—		76
Fintech Midco, LLC	One stop	L + 5.25%	^(a)	7.30%		08/2024		4,934			4,894			1.4		4,934
Fintech Midco, LLC^#	One stop	L + 5.25%	^(a)	7.30%		08/2024		444			441			0.1		444
Fintech Midco, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		08/2024		—			(1)			—		—
Fintech Midco, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		08/2024		—			(8)			—		—
Flavor Producers, LLC	Senior loan	L + 4.75%	^(c)	6.85%		12/2023		441			436			0.1		405
Flavor Producers, LLC^#(5)	Senior loan	L + 4.75%		N/A⁽⁶⁾		12/2022		—			(1)			—		(5)
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	3.04% cash/7.50% PIK		06/2023		267			265			0.1		267
Mendocino Farms, LLC^#	One stop	L + 8.50%	^(a)	3.04% cash/7.50% PIK		06/2023		210			208			0.1		210
Mendocino Farms, LLC^#(5)	One stop	L + 1.00%		N/A⁽⁶⁾		06/2023		—			(3)			—		—
Wood Fired Holding Corp.	One stop	L + 5.75%	^(c)	8.06%		12/2023		3,186			3,159			0.9		3,186
Wood Fired Holding Corp.^#	One stop	L + 5.75%	^(c)	7.85%		12/2023		20			19			—		20
Wood Fired Holding Corp.^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		12/2023		—			(2)			—		—
								28,982			28,558			8.3		28,743
Buildings and Real Estate
MRI Software LLC	One stop	L + 5.75%	^(a)	7.80%		06/2023		12,808			12,705			3.7		12,808
MRI Software LLC	One stop	L + 5.75%	^(a)	7.80%		06/2023		6,825			6,774			2.0		6,825
MRI Software LLC^#	One stop	L + 5.75%	^(a)	7.80%		06/2023		2,516			2,504			0.7		2,516
MRI Software LLC	One stop	L + 5.75%	^(a)	7.80%		06/2023		2,428			2,404			0.7		2,428
MRI Software LLC	One stop	L + 5.75%	^(a)	7.80%		06/2023		316			314			0.1		316
MRI Software LLC^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		06/2023		—			(16)			—		—
								24,893			24,685			7.2		24,893
Chemicals, Plastics and Rubber
Inhance Technologies Holdings LLC	One stop	L + 5.25%	^(c)	7.57%		07/2024		2,511			2,486			0.7		2,511
Inhance Technologies Holdings LLC^#	One stop	L + 5.25%	^(c)	7.57%		07/2024		333			326			0.1		333
Inhance Technologies Holdings LLC^#	One stop	P + 4.25%	^(f)	9.25%		07/2024		50			49			—		50
								2,894			2,861			0.8		2,894
Diversified/Conglomerate Manufacturing
Blackbird Purchaser, Inc.	Senior loan	L + 4.50%	^(c)(f)	6.60%		04/2026		3,846			3,774			1.1		3,846
Blackbird Purchaser, Inc.^#	Senior loan	L + 4.50%	^(c)(f)	6.60%		04/2026		251			228			0.1		251
Blackbird Purchaser, Inc.^#	Senior loan	L + 4.50%	^(c)	6.60%		04/2024		35			33			—		35
Chase Industries, Inc.	Senior loan	L + 4.00%	^(c)(f)	6.10%		05/2025		1,966			1,938			0.6		1,966

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Manufacturing - (continued)
Chase Industries, Inc.^#	Senior loan	L + 4.00%	^(c)	6.10%		05/2025		$	340		$	324		0.1	%	$	340
Chase Industries, Inc.^#	Senior loan	L + 4.00%	^(c)(f)	6.10%		05/2023		153			152			0.1		153
Togetherwork Holdings, LLC	One stop	L + 6.25%	^(a)	8.29%		03/2025		1,980			1,952			0.6		1,980
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	8.29%		03/2025		506			499			0.2		506
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	8.29%		03/2025		483			476			0.1		483
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	8.29%		03/2025		479			472			0.1		479
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	8.29%		03/2025		446			439			0.1		446
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	8.29%		03/2025		409			403			0.1		409
Togetherwork Holdings, LLC	One stop	L + 6.25%	^(a)	8.29%		03/2025		307			302			0.1		307
Togetherwork Holdings, LLC	One stop	L + 6.25%	^(a)	8.29%		03/2025		204			201			0.1		204
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	8.29%		03/2025		184			182			0.1		184
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	8.29%		03/2025		18			18			—		18
Togetherwork Holdings, LLC^#	One stop	L + 6.25%	^(a)	8.29%		03/2025		17			16			—		17
Togetherwork Holdings, LLC^#(5)	One stop	L + 6.25%		N/A⁽⁶⁾		03/2024		—			(2)			—		—
								11,624			11,407			3.5		11,624
Diversified/Conglomerate Service
3ES Innovation, Inc.^(7)(10)	One stop	L + 5.75%	^(d)	7.81%		05/2025		3,774			3,695			1.1		3,774
3ES Innovation, Inc.^#(5)(7)(10)	One stop	L + 5.75%		N/A⁽⁶⁾		05/2025		—			(2)			—		—
Apptio, Inc.	One stop	L + 7.25%	^(c)	9.56%		01/2025		12,605			12,382			3.7		12,605
Apptio, Inc.^#(5)	One stop	L + 7.25%		N/A⁽⁶⁾		01/2025		—			(2)			—		—
Arch Global CCT Holdings Corp.	Senior loan	L + 4.75%	^(a)(f)	6.79%		04/2026		986			980			0.3		986
Arch Global CCT Holdings Corp.^#	Senior loan	L + 4.75%		N/A⁽⁶⁾		04/2025		—			—			—		—
Arch Global CCT Holdings Corp.^#	Senior loan	L + 4.75%		N/A⁽⁶⁾		04/2026		—			—			—		—
Astute Holdings, Inc.	One stop	L + 6.00%	^(a)	8.04%		04/2025		2,813			2,787			0.8		2,813
Astute Holdings, Inc.^#	One stop	L + 6.00%	^(a)	8.04%		04/2025		20			19			—		20
Astute Holdings, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		04/2025		—			(11)			—		—
AutoQuotes, LLC	One stop	L + 5.75%	^(c)	7.88%		11/2024		2,326			2,306			0.7		2,326
AutoQuotes, LLC^#	One stop	L + 5.75%		N/A⁽⁶⁾		11/2024		—			—			—		—
Axiom Merger Sub Inc.^#	One stop	L + 5.50%	^(b)(c)	7.85%		04/2026		1,164			1,145			0.3		1,164
Axiom Merger Sub Inc.^#(7)(8)	One stop	E + 5.75%	^(g)	5.75%		04/2026		485			477			0.1		469
Axiom Merger Sub Inc.^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		04/2026		—			(1)			—		—
Axiom Merger Sub Inc.^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		04/2026		—			(17)			—		—
Bazaarvoice, Inc.	One stop	L + 5.75%	^(a)	7.79%		02/2024		8,418			8,311			2.5		8,418
Bazaarvoice, Inc.^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		02/2024		—			(3)			—		—
Bearcat Buyer, Inc.	Senior loan	L + 4.25%	^(c)	6.35%		07/2026		584			577			0.2		578
Bearcat Buyer, Inc.	Senior loan	L + 4.25%	^(c)	6.35%		07/2026		155			153			0.1		153
Bearcat Buyer, Inc.^#	Senior loan	L + 4.25%	^(c)	6.35%		07/2026		65			63			—		63
Bearcat Buyer, Inc.^#	Senior loan	L + 4.25%		N/A⁽⁶⁾		07/2024		—			—			—		—
Bullhorn, Inc.	One stop	L + 6.75%	^(b)	8.91%		11/2022		2,562			2,569			0.8		2,588
Bullhorn, Inc.	One stop	L + 6.75%	^(b)	8.91%		11/2022		614			615			0.2		620
Calabrio, Inc.	One stop	L + 6.50%	^(c)	8.60%		06/2025		22,076			21,867			6.4		22,076
Calabrio, Inc.^#	One stop	L + 6.50%	^(a)	8.54%		06/2025		70			69			—		70
Caliper Software, Inc.	One stop	L + 6.00%	^(c)(f)	8.10%		11/2025		6,742			6,662			2.0		6,742
Caliper Software, Inc.^#	One stop	L + 6.00%	^(c)	8.10%		11/2023		142			140			—		142
Centrify Corporation	One stop	L + 6.25%	^(c)	8.36%		08/2024		5,233			5,169			1.5		5,076
Centrify Corporation^#	One stop	P + 5.25%	^(f)	10.25%		08/2024		150			148			0.1		146
Cloudbees, Inc.^#	One stop	L + 9.00%	^(a)	10.60% cash/0.50% PIK		05/2023		842			826			0.3		838
Cloudbees, Inc.^#	One stop	L + 9.00%	^(a)	10.54% cash/0.50% PIK		08/2021		494			490			0.1		480
Cloudbees, Inc.^#	One stop	L + 8.50%		N/A⁽⁶⁾		05/2023		—			—			—		—
Confluence Technologies, Inc.^#	One stop	L + 5.50%	^(a)	7.55%		03/2024		2,531			2,507			0.7		2,531
Confluence Technologies, Inc.^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		03/2024		—			(1)			—		—
Connexin Software, Inc.	One stop	L + 8.50%	^(a)	10.54%		02/2024		1,261			1,248			0.4		1,249
Connexin Software, Inc.^#	One stop	L + 8.50%		N/A⁽⁶⁾		02/2024		—			—			—		—

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
Conservice, LLC	One stop	L + 5.25%	^(a)	7.29%		12/2024		$	893		$	885		0.3	%	$	893
Conservice, LLC^#	One stop	L + 5.25%		N/A⁽⁶⁾		12/2024		—			—			—		—
Digital Guardian, Inc.^#	One stop	L + 9.50%	^(c)	8.82% cash/3.00% PIK		06/2023		1,647			1,637			0.5		1,729
Digital Guardian, Inc.^#	Subordinated debt	N/A		8.00% PIK		06/2023		2			—			—		2
Digital Guardian, Inc.^#	One stop	L + 5.00%		N/A⁽⁶⁾		06/2023		—			—			—		—
Digital Guardian, Inc.^#(5)	One stop	L + 6.50%		N/A⁽⁶⁾		06/2023		—			(1)			—		7
E2open, LLC	One stop	L + 5.75%	^(c)	7.87%		11/2024		22,942			22,596			6.7		22,942
E2open, LLC^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		11/2024		—			(4)			—		—
GS Acquisitionco, Inc.	One stop	L + 5.75%	^(a)	7.80%		05/2024		13,304			13,155			3.8		13,138
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(a)	7.80%		05/2024		4,427			4,382			1.3		4,372
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(a)	7.80%		05/2024		1,158			1,146			0.3		1,144
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(a)	7.80%		05/2024		1,069			1,058			0.3		1,055
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(a)	7.80%		05/2024		669			662			0.2		661
GS Acquisitionco, Inc.^#	One stop	L + 5.75%	^(a)	7.80%		05/2024		25			24			—		23
HSI Halo Acquisition, Inc.	One stop	L + 5.75%	^(c)	7.87%		08/2026		969			957			0.3		959
HSI Halo Acquisition, Inc.^#	One stop	L + 5.75%		N/A⁽⁶⁾		09/2025		—			—			—		—
HSI Halo Acquisition, Inc.^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		08/2026		—			(3)			—		(3)
ICIMS, Inc.	One stop	L + 6.50%	^(a)	8.56%		09/2024		3,240			3,189			0.9		3,240
ICIMS, Inc.	One stop	L + 6.50%	^(a)	8.56%		09/2024		1,065			1,054			0.3		1,065
ICIMS, Inc.^#(5)	One stop	L + 6.50%		N/A⁽⁶⁾		09/2024		—			(1)			—		—
Imprivata, Inc.	Senior loan	L + 4.00%	^(c)	6.10%		10/2023		1,159			1,149			0.3		1,159
Imprivata, Inc.^#(5)	Senior loan	L + 4.00%		N/A⁽⁶⁾		10/2023		—			(1)			—		—
Infogix, Inc.	One stop	L + 6.50%	^(c)	8.60%		04/2024		1,472			1,466			0.4		1,442
Infogix, Inc.	One stop	L + 6.50%	^(c)	8.60%		04/2024		231			228			0.1		226
Infogix, Inc.^#	One stop	L + 6.50%	^(c)	8.60%		04/2024		13			13			—		12
Integral Ad Science, Inc.	One stop	L + 7.25%	^(a)	8.05% cash/1.25% PIK		07/2024		3,307			3,258			1.0		3,307
Integral Ad Science, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		07/2023		—			(1)			—		(2)
Integration Appliance, Inc.	One stop	L + 7.25%	^(c)	9.43%		08/2023		14,125			14,015			4.1		14,125
Integration Appliance, Inc.^#	One stop	L + 7.25%	^(a)	9.29%		08/2023		1			1			—		1
Internet Truckstop Group LLC	One stop	L + 5.50%	^(c)	7.61%		04/2025		8,118			7,932			2.4		8,118
Internet Truckstop Group LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		04/2025		—			(3)			—		—
Invoice Cloud, Inc.^#	One stop	L + 6.50%	^(c)	5.43% cash/3.25% PIK		02/2024		1,077			1,068			0.3		1,077
Invoice Cloud, Inc.^#	One stop	L + 6.00%		N/A⁽⁶⁾		02/2024		—			—			—		—
Invoice Cloud, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		02/2024		—			(8)			—		—
JAMF Holdings, Inc.	One stop	L + 7.00%	^(c)	9.18%		11/2022		1,205			1,186			0.4		1,205
JAMF Holdings, Inc.^#	One stop	L + 7.00%	^(a)	9.05%		11/2022		18			17			—		18
Kaseya Traverse Inc^#	One stop	L + 6.50%	^(d)	7.72% cash/1.00% PIK		05/2025		13,033			12,791			3.8		13,033
Kaseya Traverse Inc^#	One stop	L + 6.50%	^(d)	7.69% cash/1.00% PIK		05/2025		223			205			0.1		223
Kaseya Traverse Inc^#	One stop	L + 6.50%	^(c)	8.60%		05/2025		30			28			—		30
Keais Records Service, LLC	One stop	L + 4.50%	^(a)	6.54%		10/2024		4,128			4,102			1.2		4,128
Keais Records Service, LLC^#(5)	One stop	L + 4.50%		N/A⁽⁶⁾		10/2024		—			(1)			—		—
Keais Records Service, LLC^#(5)	One stop	L + 4.50%		N/A⁽⁶⁾		10/2024		—			(2)			—		—
Learn-it Systems, LLC	Senior loan	L + 4.50%	^(c)	6.65%		03/2025		764			754			0.2		764
Learn-it Systems, LLC^#	Senior loan	L + 4.50%	^(c)	6.61%		03/2025		14			6			—		14
Learn-it Systems, LLC^#	Senior loan	L + 4.50%	^(a)(c)(f)	7.04%		03/2025		13			13			—		13
Litera Bidco LLC	One stop	L + 5.75%	^(d)	7.95%		05/2026		534			528			0.2		534
Litera Bidco LLC^#	One stop	L + 5.75%	^(d)	7.96%		05/2026		278			275			0.1		278
Litera Bidco LLC^#	One stop	L + 5.75%	^(d)	7.96%		05/2026		278			278			0.1		278
Litera Bidco LLC^#	One stop	L + 5.75%		N/A⁽⁶⁾		05/2025		—			—			—		—
MetricStream, Inc.^#	One stop	L + 7.00%	^(a)	9.04%		05/2024		2,010			1,939			0.6		2,023
MetricStream, Inc.^#	One stop	L + 7.00%		N/A⁽⁶⁾		05/2024		—			—			—		1
MetricStream, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		04/2024		—			(4)			—		6

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
Mindbody, Inc.^#	One stop	L + 7.00%	^(a)	9.06%		02/2025		$	11,692		$	11,587		3.4	%	$	11,692
Mindbody, Inc.^#(5)	One stop	L + 7.00%		N/A⁽⁶⁾		02/2025		—			(1)			—		—
Ministry Brands, LLC	Senior loan	L + 4.00%	^(a)	6.04%		12/2022		224			223			0.1		224
Ministry Brands, LLC^#	Senior loan	L + 4.00%	^(a)	6.04%		12/2022		132			131			—		132
Ministry Brands, LLC	Senior loan	L + 4.00%	^(a)	6.04%		12/2022		128			128			—		128
Namely, Inc.	One stop	L + 7.50%	^(a)	8.29% cash/1.25% PIK		06/2024		2,098			2,075			0.6		2,098
Namely, Inc.^#	One stop	L + 6.25%		N/A⁽⁶⁾		06/2024		—			—			—		—
Namely, Inc.^#(5)	One stop	L + 6.25%		N/A⁽⁶⁾		06/2024		—			(6)			—		—
Net Health Acquisition Corp.	One stop	L + 5.50%	^(c)	7.60%		12/2023		875			867			0.3		866
Net Health Acquisition Corp.	One stop	L + 5.50%	^(c)	7.60%		12/2023		753			746			0.2		746
Net Health Acquisition Corp.	One stop	L + 5.50%	^(c)	7.60%		12/2023		112			111			—		111
Net Health Acquisition Corp.^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		12/2023		—			(1)			—		(1)
Nextech Holdings, LLC	One stop	L + 5.50%	^(a)	7.54%		06/2025		18,032			17,860			5.3		18,032
Nextech Holdings, LLC^#	One stop	L + 5.50%	^(a)	7.54%		06/2025		50			47			—		50
Nextech Holdings, LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		06/2025		—			(8)			—		—
Nexus Brands Group, Inc.	One stop	L + 6.00%	^(c)	8.12%		11/2023		595			590			0.2		595
Nexus Brands Group, Inc.^#	One stop	L + 6.00%	^(c)	8.10%		11/2023		296			295			0.1		296
Nexus Brands Group, Inc.^#	One stop	L + 6.00%	^(c)	8.10%		11/2023		214			213			0.1		214
Nexus Brands Group, Inc.^#	One stop	L + 6.00%	^(a)(c)	8.13%		11/2023		80			79			—		80
Nexus Brands Group, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		11/2023		—			(2)			—		—
Personify, Inc.	One stop	L + 5.75%	^(c)	7.85%		09/2024		3,510			3,481			1.0		3,510
Personify, Inc.^#	One stop	L + 5.75%	^(c)	7.85%		09/2024		20			19			—		20
PlanSource Holdings, Inc.	One stop	L + 6.25%	^(c)	8.81%		04/2025		2,296			2,275			0.7		2,296
PlanSource Holdings, Inc.^#(5)	One stop	L + 6.25%		N/A⁽⁶⁾		04/2025		—			(1)			—		—
Project Power Buyer, LLC	One stop	L + 5.75%	^(c)	7.86%		05/2026		2,859			2,825			0.8		2,859
Project Power Buyer, LLC^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		05/2025		—			(1)			—		—
Property Brands, Inc.	One stop	L + 6.00%	^(a)	8.04%		01/2024		2,808			2,783			0.8		2,808
Property Brands, Inc.	One stop	L + 6.00%	^(a)	8.04%		01/2024		1,134			1,124			0.3		1,134
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	8.04%		01/2024		925			917			0.3		925
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	8.04%		01/2024		399			395			0.1		399
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	8.04%		01/2024		339			336			0.1		339
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	8.04%		01/2024		338			335			0.1		338
Property Brands, Inc.^#	One stop	L + 6.00%	^(a)	8.04%		01/2024		140			139			—		140
Property Brands, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		01/2024		—			(1)			—		—
Property Brands, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		01/2024		—			(11)			—		—
Qgenda Intermediate Holdings, LLC	One stop	L + 4.75%	^(a)	6.79%		06/2025		5,141			5,092			1.5		5,141
Qgenda Intermediate Holdings, LLC^#(5)	One stop	L + 4.75%		N/A⁽⁶⁾		06/2025		—			(1)			—		—
RegEd Aquireco, LLC	Senior loan	L + 4.25%	^(a)	6.29%		12/2024		1,230			1,219			0.4		1,230
RegEd Aquireco, LLC^#	Senior loan	P + 3.25%	^(f)	8.25%		12/2024		29			28			—		29
RegEd Aquireco, LLC^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		12/2024		—			(30)			—		—
Saba Software, Inc.	Senior loan	L + 4.50%	^(b)	6.59%		05/2023		14,252			14,138			4.2		14,252
SnapLogic, Inc.⁽⁵⁾	One stop	L + 8.75%	^(a)	5.29% cash/5.50% PIK		09/2024		3			(4)			—		3
SnapLogic, Inc.^#(5)	One stop	L + 3.25%		N/A⁽⁶⁾		09/2024		—			(7)			—		(7)
SnapLogic, Inc.^#	One stop	L + 3.25%		N/A⁽⁶⁾		09/2024		—			—			—		—
TI Intermediate Holdings, LLC	Senior loan	L + 4.50%	^(a)	6.54%		12/2024		829			821			0.2		829
TI Intermediate Holdings, LLC^#	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2024		—			—			—		—
Transact Holdings, Inc.	Senior loan	L + 4.75%	^(c)	7.01%		04/2026		765			754			0.2		761
Transaction Data Systems, Inc.	One stop	L + 5.25%	^(a)	7.30%		06/2021		13,797			13,761			4.0		13,797
Transaction Data Systems, Inc.^#	One stop	L + 5.25%	^(a)	7.30%		06/2021		12			12			—		12
Trintech, Inc.	One stop	L + 6.50%	^(c)	8.76%		12/2023		2,114			2,096			0.6		2,114
Trintech, Inc.	One stop	L + 6.50%	^(c)	8.76%		12/2023		1,052			1,042			0.3		1,052
Trintech, Inc.^#	One stop	L + 6.50%	^(c)	8.69%		12/2023		60			59			—		60
True Commerce, Inc.	One stop	L + 5.75%	^(c)	7.85%		11/2023		1,311			1,300			0.4		1,311

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
True Commerce, Inc.^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		11/2023		$	—		$	(1)		—	%	$	—
Upserve, Inc.^#	One stop	L + 5.50%	^(a)	7.54%		07/2023		908			903			0.3		908
Upserve, Inc.^#	One stop	L + 5.50%	^(a)	7.54%		07/2023		565			562			0.2		565
Upserve, Inc.^#	One stop	L + 5.50%		N/A⁽⁶⁾		07/2023		—			—			—		—
Vector CS Midco Limited & Cloudsense Ltd.^#(7)(8)(9)	One stop	L + 7.25%	⁽ⁱ⁾	4.50% cash/2.75% PIK		05/2024		1,916			1,898			0.5		1,802
Vector CS Midco Limited & Cloudsense Ltd.^{#(5)(7)(8)(9)}	One stop	L + 4.50%		N/A⁽⁶⁾		05/2024		—			(1)			—		—
Velocity Technology Solutions, Inc.	One stop	L + 6.00%	^(c)	8.10%		12/2023		1,622			1,603			0.5		1,622
Velocity Technology Solutions, Inc.^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		12/2023		—			(1)			—		—
Workforce Software, LLC	One stop	L + 6.50%	^(c)	7.76% cash/1.00% PIK		07/2025		10,900			10,689			3.1		10,791
Workforce Software, LLC^#(5)	One stop	L + 6.50%		N/A⁽⁶⁾		07/2025		—			(2)			—		(1)
								286,108			282,615			83.4		285,469
Electronics
Appriss Holdings, Inc.	One stop	L + 5.50%	^(c)	7.60%		06/2026		8,649			8,487			2.5		8,649
Appriss Holdings, Inc.^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		06/2025		—			(4)			—		—
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	7.56%		04/2022		7,687			7,608			2.2		7,687
Diligent Corporation^#	One stop	L + 5.50%	^(c)	7.81%		04/2022		3,720			3,682			1.1		3,720
Diligent Corporation	One stop	L + 5.50%	^(c)(d)	7.56%		04/2022		1,943			1,928			0.6		1,943
Diligent Corporation^#	One stop	L + 5.50%	^(d)	7.73%		04/2022		1,365			1,314			0.4		1,365
Diligent Corporation^#	One stop	L + 5.50%	^(c)	7.81%		04/2022		957			947			0.3		957
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	7.64%		04/2022		721			708			0.2		721
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	7.56%		04/2022		275			274			0.1		275
Diligent Corporation^#	One stop	L + 5.50%	^(c)(d)	7.56%		04/2022		97			95			—		97
Episerver, Inc.^#(7)(8)	One stop	L + 6.00%	^(a)	6.00%		10/2024		4,774			4,721			1.3		4,528
Episerver, Inc.^#	One stop	L + 5.75%	^(a)	7.79%		10/2024		2,768			2,737			0.8		2,768
Episerver, Inc.^#(5)	One stop	L + 5.75%		N/A⁽⁶⁾		10/2024		—			(2)			—		—
Silver Peak Systems, Inc.	One stop	L + 7.00%	^(a)	9.03%		04/2024		1,461			1,442			0.4		1,462
Silver Peak Systems, Inc.^#	One stop	L + 7.00%		N/A⁽⁶⁾		04/2024		—			—			—		—
Sovos Compliance	One stop	L + 4.75%	^(a)	6.79%		04/2024		7,513			7,375			2.2		7,513
Sovos Compliance	Second lien	N/A		12.00% PIK		04/2025		3,387			3,312			1.0		3,387
Sovos Compliance^#	One stop	L + 4.75%	^(a)	6.79%		04/2024		735			728			0.2		735
Sovos Compliance^#	Second lien	N/A		12.00% PIK		04/2025		511			499			0.1		511
Sovos Compliance^#	One stop	L + 4.75%	^(a)	6.79%		04/2024		328			315			0.1		328
Sovos Compliance^#(5)	One stop	L + 4.75%		N/A⁽⁶⁾		04/2024		—			(2)			—		—
								46,891			46,164			13.5		46,646
Finance
Institutional Shareholder Services	Senior loan	L + 4.50%	^(c)	6.60%		03/2026		6,445			6,385			1.9		6,380
Institutional Shareholder Services^#	Senior loan	L + 4.50%	^(c)	6.60%		03/2024		57			56			—		53
								6,502			6,441			1.9		6,433
Healthcare, Education and Childcare
Aspen Medical Products, LLC	One stop	L + 5.25%	^(a)	7.30%		06/2025		980			971			0.3		980
Aspen Medical Products, LLC^#	One stop	L + 5.25%		N/A⁽⁶⁾		06/2025		—			—			—		—
BIO18 Borrower, LLC	One stop	L + 5.25%	^(a)	7.30%		11/2024		1,772			1,753			0.5		1,772
BIO18 Borrower, LLC^#	One stop	L + 5.25%	^(a)	7.30%		11/2024		33			32			—		33
BIO18 Borrower, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		11/2024		—			(22)			—		—
Blades Buyer, Inc.	Senior loan	L + 4.50%	^(b)	6.75%		08/2025		495			491			0.1		491
Blades Buyer, Inc.^#	Senior loan	L + 4.50%		N/A⁽⁶⁾		08/2025		—			—			—		—
Blades Buyer, Inc.^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		08/2025		—			(3)			—		(3)
CMI Parent Inc.	Senior loan	L + 4.25%	^(a)	6.29%		08/2025		14,650			14,508			4.2		14,504
CMI Parent Inc.^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		08/2025		—			(1)			—		(2)
CRH Healthcare Purchaser, Inc.	Senior loan	L + 4.50%	^(c)	6.60%		12/2024		2,546			2,524			0.7		2,546
CRH Healthcare Purchaser, Inc.^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2024		—			(1)			—		—
CRH Healthcare Purchaser, Inc.^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2024		—			(15)			—		—
Elite Dental Partners LLC	One stop	L + 5.25%	^(a)	7.29%		06/2023		744			736			0.2		707

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Healthcare, Education and Childcare - (continued)
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(a)	7.29%		06/2023		$	652		$	645		0.2	%	$	619
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(a)	7.29%		06/2023		611			604			0.2		581
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(a)	7.29%		06/2023		583			576			0.2		554
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(a)	7.29%		06/2023		559			553			0.2		531
Elite Dental Partners LLC^#	One stop	L + 5.25%	^(a)	7.29%		06/2023		100			99			—		95
Elite Dental Partners LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		06/2023		—			(30)			—		—
ERG Buyer, LLC	One stop	L + 5.50%	^(c)	7.60%		05/2024		2,313			2,286			0.7		2,244
ERG Buyer, LLC^#	One stop	P + 4.50%	^(f)	9.50%		05/2024		10			8			—		6
ERG Buyer, LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		05/2024		—			(44)			—		—
eSolutions, Inc.	One stop	L + 6.50%	^(a)	8.54%		03/2022		22,875			22,672			6.7		22,875
Eyecare Services Partners Holdings LLC^#	One stop	L + 6.25%	^(c)	8.55%		05/2023		1,494			1,383			0.4		1,464
Eyecare Services Partners Holdings LLC^#	One stop	L + 6.25%	^(c)	8.35%		05/2023		1,125			1,121			0.3		1,102
Silver Peak Systems, Inc.^#	One stop	L + 4.75%	^(b)	7.02%		05/2025		481			476			0.1		481
Krueger-Gilbert Health Physics, LLC	One stop	L + 4.75%	^(c)	6.85%		05/2025		130			128			—		130
Krueger-Gilbert Health Physics, LLC^#(5)	One stop	L + 4.75%		N/A⁽⁶⁾		05/2025		—			(12)			—		—
Krueger-Gilbert Health Physics, LLC^#	One stop	L + 4.75%		N/A⁽⁶⁾		05/2025		—			—			—		—
MD Now Holdings, Inc.	One stop	L + 5.00%	^(c)	7.10%		08/2024		2,927			2,904			0.9		2,927
MD Now Holdings, Inc.^#(5)	One stop	L + 5.00%		N/A⁽⁶⁾		08/2024		—			(1)			—		—
MD Now Holdings, Inc.^#(5)	One stop	L + 5.00%		N/A⁽⁶⁾		08/2024		—			(7)			—		—
ONsite Mammography, LLC^#	One stop	L + 6.75%	^(a)	8.79%		11/2023		442			437			0.1		442
ONsite Mammography, LLC^#	One stop	L + 6.75%	^(a)	8.79%		11/2023		152			151			—		152
ONsite Mammography, LLC^#	One stop	L + 6.75%	^(a)	8.79%		11/2023		50			50			—		50
Summit Behavioral Healthcare, LLC	Senior loan	L + 4.75%	^(c)	6.87%		10/2023		1,300			1,287			0.4		1,235
Summit Behavioral Healthcare, LLC^#	Senior loan	L + 4.75%	^(c)	6.87%		10/2023		140			138			—		133
Summit Behavioral Healthcare, LLC^#	Senior loan	L + 4.75%	^(c)	6.87%		10/2023		64			59			—		61
Upstream Intermediate, LLC	Senior loan	L + 4.00%	^(a)	6.04%		01/2024		626			624			0.2		626
								57,854			57,080			16.6		57,336
Hotels, Motels, Inns, and Gaming
Davidson Hotel Company, LLC	One stop	L + 5.25%	^(a)	7.29%		07/2024		2,116			2,096			0.6		2,095
Davidson Hotel Company, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		07/2024		—			—			—		(1)
Davidson Hotel Company, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		07/2024		—			—			—		(4)
Davidson Hotel Company, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		07/2024		—			(5)			—		(11)
								2,116			2,091			0.6		2,079
Insurance
Integrity Marketing Acquisition, LLC	Senior loan	L + 5.75%	^(c)	7.88%		08/2025		366			361			0.1		360
Integrity Marketing Acquisition, LLC^#	Senior loan	L + 5.75%		N/A⁽⁶⁾		08/2025		—			—			—		—
Integrity Marketing Acquisition, LLC^#(5)	Senior loan	L + 5.75%		N/A⁽⁶⁾		08/2025		—			(2)			—		(5)
Integrity Marketing Acquisition, LLC^#(5)	Senior loan	L + 5.75%		N/A⁽⁶⁾		08/2025		—			(1)			—		(3)
J.S. Held Holdings, LLC	One stop	L + 6.00%	^(c)	8.10%		07/2025		17,584			17,165			5.1		17,584
J.S. Held Holdings, LLC^#	One stop	P + 5.00%	^(f)	10.00%		07/2025		14			9			—		14
J.S. Held Holdings, LLC^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		07/2025		—			(20)			—		—
Orchid Underwriters Agency, LLC	Senior loan	L + 4.50%	^(c)	6.70%		12/2024		815			808			0.2		815
Orchid Underwriters Agency, LLC^#	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2024		—			—			—		—
Orchid Underwriters Agency, LLC^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2024		—			(4)			—		—
RSC Acquisition, Inc.^#	Senior loan	L + 4.25%	^(a)(b)(c)(f)	6.40%		11/2022		7,873			7,801			2.3		7,873
RSC Acquisition, Inc.^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		11/2022		—			(62)			—		—
								26,652			26,055			7.7		26,638
Leisure, Amusement, Motion Pictures, Entertainment
CR Fitness Holdings, LLC	Senior loan	L + 4.25%	^(a)	6.29%		07/2025		319			316			0.1		319
CR Fitness Holdings, LLC^#	Senior loan	L + 4.25%	^(c)	6.55%		07/2025		26			23			—		26
CR Fitness Holdings, LLC^#	Senior loan	L + 4.25%		N/A⁽⁶⁾		07/2025		—			—			—		—
EOS Fitness Opco Holdings, LLC	One stop	L + 4.75%	^(c)	6.85%		01/2025		1,755			1,740			0.5		1,755
EOS Fitness Opco Holdings, LLC^#	One stop	L + 4.75%	^(c)	6.86%		01/2025		136			130			—		136
EOS Fitness Opco Holdings, LLC^#	One stop	P + 3.75%	^(f)	8.75%		01/2025		6			5			—		6

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Leisure, Amusement, Motion Pictures, Entertainment - (continued)
Planet Fit Indy 10 LLC	One stop	L + 5.25%	^(c)	7.35%		07/2025		$	13,423		$	13,342		3.9	%	$	13,423
Planet Fit Indy 10 LLC^#	One stop	L + 5.25%	^(c)	7.46%		07/2025		3,664			3,619			1.1		3,664
Planet Fit Indy 10 LLC^#	One stop	L + 5.25%	^(c)	7.35%		07/2025		15			14			—		15
Planet Fit Indy 10 LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		07/2025		—			(12)			—		—
Sunshine Sub, LLC	One stop	L + 4.75%	^(a)	6.79%		05/2024		1,994			1,963			0.6		1,994
Sunshine Sub, LLC^#	One stop	L + 4.75%	^(a)	6.79%		05/2024		1,952			1,923			0.6		1,952
Sunshine Sub, LLC^#(5)	One stop	L + 4.75%		N/A⁽⁶⁾		05/2024		—			(1)			—		—
Titan Fitness, LLC	One stop	L + 4.75%	^(a)	6.88%		02/2025		6,723			6,663			2.0		6,723
Titan Fitness, LLC^#(5)	One stop	L + 4.75%		N/A⁽⁶⁾		02/2025		—			(13)			—		—
Titan Fitness, LLC^#(5)	One stop	L + 4.75%		N/A⁽⁶⁾		02/2025		—			(2)			—		—
WBZ Investment LLC	One stop	L + 5.50%	^(a)	7.54%		09/2024		1,434			1,422			0.4		1,434
WBZ Investment LLC^#	One stop	L + 5.50%	^(a)	7.54%		09/2024		331			328			0.1		331
WBZ Investment LLC^#	One stop	L + 5.50%	^(a)	7.54%		09/2024		178			171			0.1		178
WBZ Investment LLC^#	One stop	P + 4.50%	^(f)	9.50%		09/2024		5			5			—		5
								31,961			31,636			9.4		31,961
Oil and Gas
Drilling Info Holdings, Inc.	Senior loan	L + 4.25%	^(a)	6.29%		07/2025		8,781			8,688			2.6		8,781
Drilling Info Holdings, Inc.^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		07/2023		—			(1)			—		—
Drilling Info Holdings, Inc.^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		07/2025		—			(10)			—		—
								8,781			8,677			2.6		8,781
Personal and Non Durable Products (Mfg. Only)
WU Holdco, Inc.	One stop	L + 5.50%	^(c)	7.60%		03/2026		936			927			0.3		936
WU Holdco, Inc.^#	One stop	L + 5.50%	^(c)	7.62%		03/2026		24			24			—		24
WU Holdco, Inc.^#	One stop	L + 5.50%		N/A⁽⁶⁾		03/2025		—			—			—		—
								960			951			0.3		960
Personal, Food and Miscellaneous Services
Blue River Pet Care, LLC	One stop	L + 5.00%	^(c)(d)	7.04%		07/2026		4,610			4,565			1.3		4,564
Blue River Pet Care, LLC^#(5)	One stop	L + 5.00%		N/A⁽⁶⁾		07/2026		—			(51)			—		(52)
Blue River Pet Care, LLC^#(5)	One stop	L + 5.00%		N/A⁽⁶⁾		08/2025		—			(2)			—		(2)
Captain D's, LLC	Senior loan	L + 4.50%	^(a)	6.54%		12/2023		1,242			1,229			0.4		1,242
Captain D's, LLC^#	Senior loan	L + 4.50%	^(a)(f)	7.48%		12/2023		45			44			—		45
Clarkson Eyecare LLC	One stop	L + 6.25%	^(c)	8.35%		04/2021		6,649			6,597			1.9		6,515
Clarkson Eyecare LLC^#	One stop	L + 6.25%	^(c)	8.35%		04/2021		3,628			3,605			1.0		3,555
Clarkson Eyecare LLC^#	One stop	L + 6.25%	^(c)(f)	8.38%		04/2021		3,160			3,140			0.9		3,097
Clarkson Eyecare LLC^#	One stop	L + 6.25%	^(c)	8.35%		04/2021		3,121			3,101			0.9		3,058
Clarkson Eyecare LLC^#	One stop	L + 6.25%	^(c)	8.38%		04/2021		3,068			3,004			0.8		2,903
Clarkson Eyecare LLC	One stop	L + 6.25%	^(c)	8.37%		04/2021		2,058			2,019			0.6		2,017
Imperial Optical Midco Inc.^#	One stop	L + 4.75%	^(b)(c)	6.87%		08/2023		1,459			1,439			0.4		1,445
Imperial Optical Midco Inc.^#	One stop	L + 4.75%	^(b)	6.86%		08/2023		753			745			0.2		746
Imperial Optical Midco Inc.^#	One stop	L + 4.75%	^(b)	6.84%		08/2023		577			543			0.2		542
Imperial Optical Midco Inc.^#	One stop	L + 4.75%	^(b)	6.84%		08/2023		490			485			0.1		486
Imperial Optical Midco Inc.^#	One stop	L + 4.75%	^(b)	6.90%		08/2023		446			441			0.1		442
Imperial Optical Midco Inc.^#	One stop	L + 4.75%	^(b)	6.84%		08/2023		148			147			—		147
Imperial Optical Midco Inc.^#	One stop	L + 4.75%		N/A⁽⁶⁾		08/2023		—			—			—		—
Midwest Veterinary Partners, LLC	One stop	L + 4.75%	^(a)	6.79%		07/2025		250			247			0.1		248
Midwest Veterinary Partners, LLC^#	One stop	L + 4.75%	^(a)(b)	6.81%		07/2025		68			66			—		66
Midwest Veterinary Partners, LLC^#(5)	One stop	L + 4.75%		N/A⁽⁶⁾		07/2025		—			(38)			—		(40)
PPV Intermediate Holdings II, LLC^#	One stop	L + 5.00%	^(c)	7.56%		05/2020		798			787			0.2		798
PPV Intermediate Holdings II, LLC^#	One stop	P + 4.00%	^(f)	9.00%		05/2023		9			8			—		9
PPV Intermediate Holdings II, LLC^#	One stop	N/A		7.90% PIK		05/2023		8			8			—		8
Ruby Slipper Cafe LLC, The^#	One stop	L + 7.50%	^(c)	9.60%		01/2023		170			167			—		170
Ruby Slipper Cafe LLC, The^#	One stop	L + 7.50%	^(c)	9.60%		01/2023		59			59			—		59
Ruby Slipper Cafe LLC, The^#	One stop	L + 7.50%	^(c)	9.60%		01/2023		5			5			—	%	5
Veterinary Specialists of North America, LLC	Senior loan	L + 4.25%	^(a)	6.29%		04/2025		17,096			16,939			5.0		17,096

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾			Interest Rate⁽²⁾		Maturity Date			Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Personal, Food and Miscellaneous Services - (continued)
Veterinary Specialists of North America, LLC^#	Senior loan	L + 4.25%	^(a)	6.29%		04/2025		$	626		$	620		0.2	%	$	626
Veterinary Specialists of North America, LLC^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		04/2025		—			(5)			—		—
Veterinary Specialists of North America, LLC^#(5)	Senior loan	L + 4.25%		N/A⁽⁶⁾		04/2025		—			(58)			—		—
								50,543			49,856			14.3		49,795
Printing and Publishing
Messenger, LLC	One stop	L + 6.00%	^(a)(f)	8.05%		08/2023		2,051			2,035			0.6		2,031
Messenger, LLC^#	One stop	P + 5.00%	^(f)	10.00%		08/2023		18			18			—		18
Messenger, LLC^#(5)	One stop	L + 6.00%		N/A⁽⁶⁾		08/2023		—			(1)			—		(1)
								2,069			2,052			0.6		2,048
Retail Stores
2nd Ave. LLC	One stop	L + 5.50%	^(c)	7.65%		09/2025		1,390			1,377			0.4		1,377
2nd Ave. LLC^#(5)	One stop	L + 5.50%		N/A⁽⁶⁾		09/2025		—			—			—		(1)
Jet Equipment & Tools Ltd.^#(7)(8)(10)	One stop	L + 5.75%	^(a)	7.70%		11/2024		4,300			4,254			1.2		4,250
Jet Equipment & Tools Ltd.^(7)(10)	One stop	L + 5.75%	^(a)	7.79%		11/2024		3,390			3,359			1.0		3,390
Jet Equipment & Tools Ltd.^(7)(10)	One stop	L + 5.75%	^(a)	7.79%		11/2024		1,042			1,033			0.3		1,042
Jet Equipment & Tools Ltd.^{#(5)(7)(8)(10)}	One stop	L + 5.75%		N/A⁽⁶⁾		11/2024		—			(1)			—		—
Pet Supplies Plus, LLC	Senior loan	L + 4.50%	^(a)	6.54%		12/2024		3,341			3,312			1.0		3,341
Pet Supplies Plus, LLC^#(5)	Senior loan	L + 4.50%		N/A⁽⁶⁾		12/2023		—			(1)			—		—
Sola Franchise, LLC and Sola Salon Studios, LLC	One stop	L + 5.25%	^(c)	7.35%		10/2024		934			926			0.3		934
Sola Franchise, LLC and Sola Salon Studios, LLC^#	One stop	L + 5.25%	^(c)	7.35%		10/2024		677			671			0.2		677
Sola Franchise, LLC and Sola Salon Studios, LLC^#	One stop	L + 5.25%		N/A⁽⁶⁾		10/2024		—			—			—		—
Sola Franchise, LLC and Sola Salon Studios, LLC^#(5)	One stop	L + 5.25%		N/A⁽⁶⁾		10/2024		—			(7)			—		—
Vermont Aus Pty Ltd^#(7)(8)(11)	One stop	L + 5.75%	^(j)	6.75%		12/2024		439			431			0.1		428
Vermont Aus Pty Ltd^#(7)(8)(11)	One stop	L + 5.75%	^(j)	6.75%		12/2024		10			7			—		10
								15,523			15,361			4.5		15,448

Total debt investments																			$	612,883	$	604,888	177.7	%	$	610,195

Equity investments^(13)(14)
Automobile
Grease Monkey International, LLC^#	LLC units	N/A		N/A		N/A		73			$	73		0.1	%	$	159
Quick Quack Car Wash Holdings, LLC^#	LLC units	N/A		N/A		N/A		—			93			—		108
											166			0.1		267
Beverage, Food and Tobacco
Mendocino Farms, LLC^#	Common stock	N/A		N/A		N/A		59			257			0.1		257
Wood Fired Holding Corp.^#	LLC units	N/A		N/A		N/A		103			103			—		102
Wood Fired Holding Corp.^#	LLC units	N/A		N/A		N/A		103			—			—		—
											360			0.1		359
Chemicals, Plastics and Rubber
Inhance Technologies Holdings LLC^#	LLC units	N/A		N/A		N/A		—			34			—		22
											34			—		22
Diversified/Conglomerate Service
Astute Holdings, Inc.^#	LP interest	N/A		N/A		N/A		—			83			—		102
Calabrio, Inc.^#	Common stock	N/A		N/A		N/A		58			444			0.1		444
Caliper Software, Inc.^#	Preferred stock	N/A		N/A		N/A		1			596			0.2		683
Caliper Software, Inc.^#	Common stock	N/A		N/A		N/A		53			53			—		77
Caliper Software, Inc.^#	Preferred stock	N/A		N/A		N/A		—			8			—		9
Centrify Corporation^#	LP interest	N/A		N/A		N/A		—			170			0.1		139
Centrify Corporation^#	LP interest	N/A		N/A		N/A		60			—			—		—
Cloudbees, Inc.^#	Preferred stock	N/A		N/A		N/A		15			93			—		93
Cloudbees, Inc.^#	Warrant	N/A		N/A		N/A		19			27			—		49
Confluence Technologies, Inc.^#	LLC interest	N/A		N/A		N/A		—			32			—		58
Connexin Software, Inc.^#	LLC interest	N/A		N/A		N/A		26			26			—		37
Digital Guardian, Inc.^#	Preferred stock	N/A		N/A		N/A		725			87			—		85

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾		Interest Rate⁽²⁾		Maturity Date		Principal ($) / Shares⁽³⁾			Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Diversified/Conglomerate Service - (continued)
Digital Guardian, Inc.^#	Warrant	N/A	N/A		N/A		248		$	43		—	%	$	46
Digital Guardian, Inc.^#	Preferred stock	N/A	N/A		N/A		150		27			—		29
Digital Guardian, Inc.^#	Warrant	N/A	N/A		N/A		25		4			—		8
GS Acquisitionco, Inc.^#(14)	LP interest	N/A	N/A		N/A		—		44			—		75
Internet Truckstop Group LLC^#	LP interest	N/A	N/A		N/A		146		146			0.1		157
MetricStream, Inc.^#	Warrant	N/A	N/A		N/A		44		67			—		67
Namely, Inc.^#	Warrant	N/A	N/A		N/A		8		14			—		13
Net Health Acquisition Corp.^#	LP interest	N/A	N/A		N/A		—		126			0.1		133
Nexus Brands Group, Inc.^#	LP interest	N/A	N/A		N/A		—		40			—		41
Personify, Inc.^#	LLC units	N/A	N/A		N/A		145		145			0.1		216
Pride Midco, Inc.^#	Preferred stock	N/A	N/A		N/A		1		556			0.2		629
Property Brands, Inc.^#	LLC units	N/A	N/A		N/A		11		106			0.1		142
RegEd Aquireco, LLC^#	LP interest	N/A	N/A		N/A		—		70			—		75
RegEd Aquireco, LLC^#	LP interest	N/A	N/A		N/A		1		—			—		6
SnapLogic, Inc.^#	Preferred stock	N/A	N/A		N/A		43		108			—		108
SnapLogic, Inc.^#	Warrant	N/A	N/A		N/A		16		6			—		6
									3,121			1.0		3,527
Electronics
Appriss Holdings, Inc.^#	Preferred stock	N/A	N/A		N/A		—		52			—		59
Episerver, Inc.^#	Common stock	N/A	N/A		N/A		17		173			0.1		185
Silver Peak Systems, Inc.^#	Warrant	N/A	N/A		N/A		17		6			—		6
									231			0.1		250
Healthcare, Education and Childcare
Aspen Medical Products, LLC^#	Common stock	N/A	N/A		N/A		—		17			—		17
BIO18 Borrower, LLC^#	LLC units	N/A	N/A		N/A		141		246			0.1		304
CMI Parent Inc.^#	LLC units	N/A	N/A		N/A		—		492			0.1		492
CMI Parent Inc.^#	LLC units	N/A	N/A		N/A		5		5			—		5
CRH Healthcare Purchaser, Inc.^#	LP interest	N/A	N/A		N/A		102		102			—		115
Elite Dental Partners LLC^#	Common stock	N/A	N/A		N/A		—		161			0.1		136
ERG Buyer, LLC^#	LLC units	N/A	N/A		N/A		—		165			—		104
ERG Buyer, LLC^#	LLC units	N/A	N/A		N/A		2		2			—		—
Krueger-Gilbert Health Physics, LLC^#	LLC interest	N/A	N/A		N/A		40		40			—		46
MD Now Holdings, Inc.^#	LLC units	N/A	N/A		N/A		3		33			—		35
Summit Behavioral Healthcare, LLC^#(14)	LLC interest	N/A	N/A		N/A		—		14			—		5
Summit Behavioral Healthcare, LLC^#	LLC interest	N/A	N/A		N/A		—		—			—		—
									1,277			0.3		1,259
Insurance
Orchid Underwriters Agency, LLC^#	LP interest	N/A	N/A		N/A		18		18			—		23
Leisure, Amusement, Motion Pictures, Entertainment
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		15		24			—		28
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		10		16			—		19
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		9		13			—		15
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		8		12			—		13
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		3		5			—		6
WBZ Investment LLC^#	LLC interest	N/A	N/A		N/A		—		—			—		1
									70			—		82
Personal, Food and Miscellaneous Services
Blue River Pet Care, LLC^#	LLC units	N/A	N/A		N/A		—		207			0.1		207
Captain D's, LLC^#	LLC interest	N/A	N/A		N/A		15		15			—		13
Midwest Veterinary Partners, LLC^#	LLC units	N/A	N/A		N/A		—		13			—		13
Midwest Veterinary Partners, LLC^#	LLC units	N/A	N/A		N/A		3		—			—		—
PPV Intermediate Holdings II, LLC^#	LLC interest	N/A	N/A		N/A		72		72			—		69
Ruby Slipper Cafe LLC, The^#	LLC units	N/A	N/A		N/A		6		61			—		79
									368			0.1		381

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


	Investment Type	Spread Above Index⁽¹⁾		Interest Rate⁽²⁾		Maturity Date		Principal ($) / Shares⁽³⁾		Amortized Cost		Percentage of Net Assets			Fair Value⁽⁴⁾
Retail Stores
2nd Ave. LLC^#	LP interest	N/A	N/A		N/A		157		157		0.1		157
Jet Equipment & Tools Ltd.^#(7)(8)(10)	LLC units	N/A	N/A		N/A		—		173		0.1		263
Pet Supplies Plus, LLC^#	LLC units	N/A	N/A		N/A		34		34		—		49
Sola Franchise, LLC and Sola Salon Studios, LLC^#	LLC units	N/A	N/A		N/A		1		88		0.1		129
Sola Franchise, LLC and Sola Salon Studios, LLC^#	LLC units	N/A	N/A		N/A		—		18		—		26
									470		0.3		624

Total equity investments																			$	6,115	2.0		%	$	6,794

Total investments																$	612,883		$	611,003	179.7		%	$	616,989

Money market funds (included in cash and cash equivalents and restricted cash and cash equivalents)
BlackRock Liquidity Funds T-Fund Institutional Shares (CUSIP 09248U718)							1.81% ⁽¹⁵⁾						2,925			0.9			2,925
Total money market funds																					$	2,925		0.9		%	$	2,925

Total investments and money market funds													$	613,928		180.6		%	$	619,914

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Consolidated Schedule of Investments - (continued)

September 30, 2019

(In thousands)


^#						Denotes that all or a portion of the loan collateralizes the DB Credit Facility (as defined in Note 8).

⁽¹⁾The majority of the investments bear interest at a rate that is permitted to be determined by reference to the LIBOR (‘‘L’’) denominated in U.S. dollars or GBP, EURIBOR (‘‘E’’ ) or Prime (‘‘P’’) and which reset daily, monthly, quarterly, semiannually or annually. For each, the Company has provided the spread over LIBOR, EURIBOR, or Prime and the weighted average current interest rate in effect as of September 30, 2019. Certain investments are subject to a LIBOR, EURIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. Listed below are the index rates as of September 30, 2019, which was the last business day of the period on which LIBOR was determined. The actual index rate for each loan listed may not be the applicable index rate outstanding as of September 30, 2019, as the loan may have priced or repriced based on an index rate prior to September 30, 2019.

^(a) Denotes that all or a portion of the loan was indexed to the 30-day LIBOR, which was 2.02% as of September 30, 2019.

^(b) Denotes that all or a portion of the loan was indexed to the 60-day LIBOR, which was 2.07% as of September 30, 2019.

^(c) Denotes that all or a portion of the loan was indexed to the 90-day LIBOR, which was 2.09% as of September 30, 2019.

^(d) Denotes that all or a portion of the loan was indexed to the 180-day LIBOR, which was 2.06% as of September 30, 2019.

^(e) Denotes that all or a portion of the loan was indexed to the 360-day LIBOR, which was 2.03% as of September 30, 2019.

^(f)Denotes that all or a portion of the loan was indexed to the Prime rate, which was 5.00% as of September 30, 2019.

^(g)Denotes that all or a portion of the loan was indexed to the 90-day EURIBOR, which was -0.44% as of September 30, 2019.

^(h)Denotes that all or a portion of the loan was indexed to the 30-day GBP LIBOR, which was 0.72% as of September 30, 2019.

⁽ⁱ⁾Denotes that all or a portion of the loan was indexed to the 90-day GBP LIBOR, which was 0.76% as of September 30, 2019.

⁽²⁾For portfolio companies with multiple interest rate contracts, the interest rate shown is a weighted average current interest rate in effect as of September 30, 2019.

⁽³⁾The total principal amount is presented for debt investments while the number of shares or units owned is presented for equity investments.

⁽⁴⁾The fair value of the investment was valued using significant unobservable inputs. See Note 7. Fair Value Measurements.

⁽⁶⁾The entire commitment was unfunded as of September 30, 2019. As such, no interest is being earned on this investment. The investment may be subject to an unused facility fee.

⁽⁷⁾The investment is treated as a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the ‘‘1940 Act’’). Under the 1940 Act, the Company can not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of September 30, 2019, total non-qualifying assets at fair value represented 3.9% of the Company’s total assets calculated in accordance with the 1940 Act.

⁽⁹⁾The headquarters of this portfolio company is located in the United Kingdom.

⁽¹⁰⁾The headquarters of this portfolio company is located in Canada.

⁽¹¹⁾The headquarters of this portfolio company is located in Australia.

⁽¹²⁾The sale of a portion of this loan does not qualify for sale accounting under ASC Topic 860 - Transfers and Servicing (‘‘ASC Topic 860’’), and therefore, the asset remains in the Consolidated Schedule of Investments. See Note 8. Borrowings.

⁽¹³⁾Equity investments are non-income producing securities unless otherwise noted.

⁽¹⁴⁾Ownership of certain equity investments occurs through a holding company or partnership.

⁽¹⁵⁾The rate shown is the annualized seven-day yield as of September 30, 2019.

See Notes to Consolidated Financial Statements.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

Note 1. Organization

Golub Capital BDC 3, Inc. (“GBDC 3” and, collectively with its subsidiaries, the “Company”) is an externally managed, closed-end, non-diversified management investment company that was formed on August 1, 2017 and elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), on September 29, 2017. On October 2, 2017, the date of the commencement of operations, the Company entered into subscription agreements (collectively, the “Subscription Agreements”) to sell shares of GBDC 3's common stock in private placements. In addition, for U.S. federal income tax purposes, GBDC 3 has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company’s investment strategy is to invest primarily in one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies that are, in most cases, sponsored by private equity firms. The Company also selectively invests in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, primarily U.S. middle-market companies. The Company has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with GC Advisors LLC (the “Investment Adviser”), under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. Under an administration agreement (the “Administration Agreement”) the Company is provided with certain services by an administrator (the “Administrator”), which is currently Golub Capital LLC.

Note 2. Significant Accounting Policies and Recent Accounting Updates

Basis of presentation: The Company is an investment company as defined in the accounting and reporting guidance under Accounting Standards Codification (“ASC”) Topic 946 - Financial Services - Investment Companies (“ASC Topic 946”).

The accompanying interim consolidated financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) as established by the Financial Accounting Standards Board (“FASB”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements.

In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications consisting solely of normal accruals that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. The unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended September 30, 2019, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

Fair value of financial instruments: The Company applies fair value to all of its financial instruments in accordance with ASC Topic 820 - Fair Value Measurement (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.

Any changes to the valuation methodology are reviewed by management and the Company’s board of directors (the “Board”) to confirm that the changes are appropriate. As markets change, new products develop and the pricing for products becomes more or less transparent, the Company will continue to refine its valuation methodologies. See further description of fair value methodology in Note 7, Fair Value Measurements.

Use of estimates: The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation: As provided under ASC Topic 946 and Regulation S-X, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries, GBDC 3 Holdings LLC (“GBDC 3 Holdings”), GBDC 3 Funding LLC (“GBDC 3 Funding”) and GBDC 3 Funding II LLC (“GBDC 3 Funding II”), in its consolidated financial statements.

Assets related to transactions that do not meet ASC Topic 860 - Transfers and Servicing (“ASC Topic 860”) requirements for accounting sale treatment are reflected in the Company’s Consolidated Statements of Financial Condition as investments. Those assets are owned by special purpose entities, including GBDC 3 Holdings and GBDC 3 Funding, that are consolidated in the Company’s consolidated financial statements. The creditors of the special purpose entities have received security interests in such assets and such assets are not intended to be available to the creditors of GBDC (or any affiliate of GBDC).

Cash and cash equivalents and foreign currencies: Cash, cash equivalents and foreign currencies are highly liquid investments with an original maturity of three months or less at the date of acquisition. The Company deposits its cash in financial institutions and, at times, such balances exceed the Federal Deposit Insurance Corporation insurance limits.

Restricted cash and cash equivalents and restricted foreign currencies: Restricted cash and cash equivalents and restricted foreign currencies include amounts that are collected and are held by trustees who have been appointed as custodians of the assets securing certain of the Company’s financing transactions. Restricted cash and cash equivalents and restricted foreign currencies are held by the trustees for payment of interest expense and principal on the outstanding borrowings or reinvestment into new assets.

Foreign currency translation: The Company’s books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

(1)cash and cash equivalents, restricted cash and cash equivalents, fair value of investments, interest receivable, and other assets and liabilities—at the spot exchange rate on the last business day of the period; and

(2)purchases and sales of investments, income and expenses—at the exchange rates prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, the Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held. Such fluctuations

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

are included with the net realized and unrealized gain or loss from investments. Fluctuations arising from the translation of assets other than investments and liabilities are included with the net change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies on the Consolidated Statements of Operations.

Foreign security and currency transactions involve certain considerations and risks not typically associated with investing in U.S. companies. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.

Forward currency contracts: A forward currency contract is an obligation between two parties to purchase or sell a specific currency for an agreed-upon price at a future date. The Company utilized forward currency contracts to economically hedge the currency exposure associated with certain foreign-denominated investments. The use of forward currency contracts does not eliminate fluctuations in the price of the underlying securities the Company owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the exchange rates on the contract date and reporting date and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized gains (losses) and unrealized appreciation (depreciation) on the contracts are included in the Consolidated Statements of Operations. Unrealized appreciation (depreciation) on forward currency contracts is recorded on the Consolidated Statements of Financial Condition by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable.

The primary risks associated with forward currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks can exceed the amounts reflected in the Consolidated Statements of Financial Condition.

Refer to Note 6 for more information regarding the forward currency contracts.

Revenue recognition:

Investments and related investment income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments.

Loan origination fees, original issue discount and market discount or premium are capitalized, and the Company accretes or amortizes such amounts over the life of the loan as interest income. For the three and six months ended March 31, 2020, interest income included $972 and $1,672, respectively, of accretion of discounts. For the three and six months ended March 31, 2019, interest income included $257 and $483, respectively, of accretion of discounts. For the three and six months ended March 31, 2020, the Company received loan origination fees of $1,635 and $4,630, respectively. For the three and six months ended March 31, 2019, the Company received loan origination fees of $721 and $2,056, respectively.

For investments with contractual payment-in-kind (“PIK”) interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, the Company will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible. For the three and six months ended March 31, 2020, the Company capitalized PIK interest of $648 and $895, respectively, into the principal balance of certain debt investments. For the three and six months ended March 31, 2019, the Company capitalized PIK interest of $20 and $35, respectively, into the principal balance of certain debt investments.

In addition, the Company generates revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans. The Company records these fees as fee income when earned. All other income is recorded into income when earned. For the three and six months ended March 31, 2020, fee income included $0 and $32, respectively, of prepayment premiums, which fees are non-recurring. For the three and six months ended March 31, 2019, fee income included $17 and $78, respectively, of prepayment premiums, which fees are non-recurring.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

For the three and six months ended March 31, 2020, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $14,919 and $28,693, respectively. For the three and six months ended March 31, 2019, the Company received interest and fee income in cash, which excludes capitalized loan origination fees, in the amounts of $5,276 and $9,269, respectively.

Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the amortized cost basis of the investment. For the three and six months ended March 31, 2020, the Company recorded dividend income of $2 and $4, respectively, and return of capital distributions of $0 and $0, respectively. For the three and six months ended March 31, 2019, the Company recorded no dividend income and no return of capital distributions.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. The Company reports current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investments and foreign currency translation in the Consolidated Statements of Operations.

Non-accrual loans: A loan can be left on accrual status during the period the Company is pursuing repayment of the loan. Management reviews all loans that become 90 days or more past due on principal and interest, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When a loan is placed on non-accrual status, unpaid interest credited to income is reversed. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans is recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid, and, in management’s judgment, payments are likely to remain current. As of March 31, 2020 and September 30, 2019, the Company had no portfolio company investments on non-accrual status.

Income taxes: The Company has elected to be treated as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify and be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends for U.S. federal income tax purposes to its stockholders of an amount generally at least equal to 90% of its investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. The Company has made, and intends to continue to make, the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal income taxes with respect to all income distributed to its stockholders.

Depending on the level of taxable income earned in a tax year, the Company can determine to retain taxable income in excess of current year dividend distributions and distribute such taxable income in the next tax year. The Company may then be required to incur a 4% excise tax on such income. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. For the three and six months ended March 31, 2020 and 2019, the Company did not incur U.S. federal excise tax.

The Company accounts for income taxes in conformity with ASC Topic 740 - Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and

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Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

disclosed in financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or tax benefit in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material unrecognized tax benefits or unrecognized tax liabilities related to uncertain income tax positions through March 31, 2020. The Company's tax return for the 2017 through 2018 tax years remains subject to examination by U.S. federal and most state tax authorities.

Distributions: Distributions to common stockholders are recorded on the record date. Subject to the discretion of and as determined by the Board, the Company intends to authorize and declare ordinary cash distributions based on a formula approved by the Board on a quarterly basis. The amount to be paid out as a dividend or distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually, although the Company can retain such capital gains for investment in its discretion.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Board authorizes and the Company declares a cash distribution, then stockholders who have not “opted out” of the DRIP will have their cash distribution automatically reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. Shares issued under the DRIP will be issued at a price per share equal to the most recent net asset value (“NAV”) per share as determined by the Board (subject to adjustment to the extent required by Section 23 of the 1940 Act).

Deferred debt issuance costs: Deferred debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. As of March 31, 2020 and September 30, 2019, the Company had deferred debt issuance costs of $1,868 and $1,770, respectively. These amounts are amortized and included in interest expense in the Consolidated Statements of Operations over the estimated average life of the borrowings. Amortization expense for deferred debt issuance costs for the three and six months ended March 31, 2020 was $292 and $497, respectively. Amortization expense for deferred debt issuance costs for the three and six months ended March 31, 2019 was $362 and $532, respectively.

Note 3. Stockholders’ Equity

GBDC 3 is authorized to issue 1,000,000 shares of preferred stock at a par value of $0.001 per share and 100,000,000 shares of common stock at a par value of $0.001 per share. Since the commencement of operations on October 2, 2017, GBDC 3 has entered into Subscription Agreements with several investors, including with affiliates of the Investment Adviser, providing for the private placement of GBDC 3’s common stock. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase GBDC 3’s common stock at a price per share equal to the most recent NAV per share as determined by the Board (subject to adjustment to the extent required by Section 23 of the 1940 Act) up to the amount of their respective capital subscriptions on an as-needed basis as determined by GBDC 3 with a minimum of 10 calendar days prior notice.

As of March 31, 2020 and September 30, 2019, the Company had the following subscriptions, pursuant to the Subscription Agreements, and contributions from its stockholders:


	As of March 31, 2020						As of September 30, 2019
	Subscriptions		Contributions		Subscriptions		Contributions
GBDC 3 Stockholders	$	809,174	$	479,925	$	527,509	$	334,916
Total	$	809,174	$	479,925	$	527,509	$	334,916

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Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

As of March 31, 2020 and September 30, 2019, the ratio of total contributed capital to total capital subscriptions was 59.3% and 63.5%, respectively, and the Company had uncalled capital commitments of $329,249 and $192,593, respectively.

The following table summarizes the shares of GBDC 3 common stock issued for the six months ended March 31, 2020 and 2019:


	Date	Shares Issued	NAV ($) per share		Proceeds


























Shares issued for the six months ended March 31, 2019
Issuance of shares	10/15/18	659,020.644	15.00		9,885
Issuance of shares	10/26/18	988,531.000	15.00		14,828
Issuance of shares	11/26/18	988,531.000	15.00		14,828
Issuance of shares	12/17/18	2,306,572.356	15.00		34,599
Issuance of shares	03/18/19	1,344,241.361	15.00		20,163
Shares issued for capital drawdowns		6,286,896.361	$	15.00	$	94,303









Issuance of shares ⁽¹⁾	11/27/18	49,178.285	15.00		738
Issuance of shares ⁽¹⁾	12/28/18	53,153.132	15.00		797
Issuance of shares ⁽¹⁾	02/27/19	64,472.390	15.00		967
Shares issued through DRIP		166,803.807	$	15.00	$	2,502


Shares issued for the six months ended March 31, 2020

Issuance of shares	10/14/19	1,900,611.630	15.00		28,509
Issuance of shares	11/18/19	1,900,611.628	15.00		28,509
Issuance of shares	12/19/19	2,660,856.371	15.00		39,913
Issuance of shares	03/30/20	3,205,196.000	15.00		48,078
Shares issued for capital drawdowns		9,667,275.629	$	15.00	$	145,009




Issuance of shares ⁽¹⁾	11/26/19	185,724.541	15.00		2,786
Issuance of shares ⁽¹⁾	12/27/19	173,246.102	15.00		2,599
Issuance of shares ⁽¹⁾	02/26/20	170,062.979	15.00		2,551
Shares issued through DRIP		529,033.622	$	15.00	$	7,936

⁽¹⁾Shares issued through the DRIP.

Note 4. Related Party Transactions

Investment Advisory Agreement: Under the Investment Advisory Agreement, the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. The Board most recently reapproved the Investment Advisory Agreement in May 2020. The Investment Adviser is a registered investment adviser with the SEC. The Investment Adviser receives fees for providing services, consisting of two components, a base management fee and an Incentive Fee (as defined below).

The base management fee is calculated at an annual rate equal to 1.375% of the fair value of the average adjusted gross assets of the Company at the end of the two most recently completed calendar quarters (excluding cash and cash equivalents and foreign currencies but including assets purchased with borrowed funds, securitization-related assets, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

custodian) and is payable quarterly in arrears. Additionally, the Investment Adviser voluntarily excludes any assets funded with secured borrowing proceeds from the base management fee calculation. The base management fee is adjusted, based on the actual number of days elapsed relative to the total number of days in such calendar quarter, for any share issuances or repurchases during such calendar quarter. For purposes of the Investment Advisory Agreement, cash equivalents mean U.S. government securities and commercial paper instruments maturing within 270 days of purchase (which is different than the GAAP definition, which defines cash equivalents as U.S. government securities and commercial paper instruments maturing within 90 days of purchase). To the extent that the Investment Adviser or any of its affiliates provides investment advisory, collateral management or other similar services to a subsidiary of GBDC 3, the base management fee will be reduced by an amount equal to the product of (1) the total fees paid to the Investment Adviser by such subsidiary for such services and (2) the percentage of such subsidiary’s total equity, including membership interests and any class of notes not exclusively held by one or more third parties, that is owned, directly or indirectly, by the Company. For periods ending on or prior to the earlier of (1) the date of pricing of an initial public offering or listing on a national securities exchange of the shares of common stock of GBDC 3 or (2) a sale of all or substantially all of the Company’s assets to, or other liquidity event with, an entity for consideration of publicly listed securities of the acquirer (each, a “Liquidity Event”), the Investment Adviser has irrevocably agreed to waive any base management fee in excess of 1.00% of the fair value of the Company’s average adjusted gross assets as calculated in accordance with the Investment Advisory Agreement as described above.

For the three and six months ended March 31, 2020, the base management fees incurred by the Company were $2,796 and $5,193, respectively, and the base management fees irrevocably waived by the Investment Adviser were $762 and $1,416, respectively. For the three and six months ended March 31, 2019, the base management fees incurred by the Company were $927 and $1,573, respectively, and the base management fees irrevocably waived by the Investment Adviser were $253 and $429, respectively.

The Incentive Fee consists of three parts: the income component (the “Income Incentive Fee”), the capital gains component (the “Capital Gain Incentive Fee”) and the subordinated liquidation incentive component (the “Subordinated Liquidation Incentive Fee” and, together with the Income Incentive Fee and the Capital Gain Incentive Fee, the “Incentive Fee”).

The Income Incentive Fee is calculated quarterly in arrears based on Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the Investment Advisory Agreement and the Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that the Company has not yet received in cash.

Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the Income Incentive Fee, it is possible that an Incentive Fee is calculated under this formula with respect to a period in which the Company has incurred a loss. For example, if the Company receives Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the Income Incentive Fee will result in a positive value, and an Income Incentive Fee will be paid even if the Company has incurred a loss in such period due to realized and/or unrealized capital losses unless the payment of such Income Incentive Fee would cause the Company to pay Income Incentive Fees and Capital Gain Incentive Fees on a cumulative basis that exceed the Incentive Fee Cap described below.

Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any Incentive Fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed ‘‘hurdle rate’’ of 1.5%

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

quarterly. If market interest rates rise, it is possible that the Company will be able to invest funds in debt instruments that provide for a higher return, which would increase the Company’s Pre-Incentive Fee Net Investment Income and make it easier for the Investment Adviser to surpass the fixed hurdle rate and receive an Income Incentive Fee. Pre-Incentive Fee Net Investment Income used to calculate this part of the Incentive Fee is also included in the amount of the Company’s total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds securitization-related assets, unrealized depreciation or appreciation on derivative instruments and cash collateral on deposit with custodian) used to calculate the base management fee.

The Company calculates the Income Incentive Fee with respect to its Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

•zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;

•50.0% of Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than the percentage at which amounts payable to the Investment Adviser pursuant to the Income Incentive Fee equal 20.0% of the Pre-Incentive Fee Net Investment Income that exceeds the hurdle rate as if a hurdle rate did not apply. This portion of Pre-Incentive Fee Net Investment Income that exceeds the hurdle rate is referred to as the ‘‘catch-up’’ provision; and

•20.0% of the amount of Pre-Incentive Fee Net Investment Income, if any, that exceeds the catch-up provision in any calendar quarter.

The sum of these calculations yields the Income Incentive Fee. This amount is appropriately adjusted for any share issuances or repurchases during the quarter. For the three and six months ended March 31, 2020, the Income Incentive Fee incurred was $1,765 and $3,243, respectively. For the three and six months ended March 31, 2019, the Income Incentive Fee incurred was $503 and $909, respectively.

For periods ending on or prior to the date of the closing of a Liquidity Event, the Investment Adviser has agreed to irrevocably waive that portion of the Income Incentive fee calculated under the Investment Advisory Agreement in amounts in excess of the following amounts (computed on a quarterly basis, in arrears):

•zero in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate;

•50.0% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than the percentage at which the amount payable to the Investment Adviser equals to 15.0% of the Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply. This portion of the Company’s Pre-Incentive Fee Net Investment Income that exceeds the hurdle rate is referred to as the “catch-up” provision; and

•15.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the catch-up provision in any calendar quarter.

For the three and six months ended March 31, 2020, the Income Incentive Fee irrevocably waived by the Investment Adviser was $229 and $390, respectively. For the three and six months ended March 31, 2019, the Income Incentive Fee irrevocably waived by the Investment Adviser was $0 and $19, respectively.

The second part of the Incentive Fee, the Capital Gain Incentive Fee, equals (a) 20.0% of the Company’s Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or, upon termination of the Investment Advisory Agreement, as of the termination date), commencing with the calendar year ended December 31, 2017, less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. The Company’s ‘‘Capital Gain Incentive Fee Base’’ equals (1) the sum of (A) realized capital gains, if any, on a cumulative positive basis from September 29, 2017, the date the Company elected to be a BDC, through the end of each calendar year, (B) all realized capital losses on a cumulative basis and (C) all unrealized capital depreciation on a cumulative basis, less (2) unamortized deferred debt issuance costs as of the date of calculation, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

•The cumulative aggregate realized capital losses are calculated as the sum of the amounts by which (a) the net sales price of each investment in the Company’s portfolio when sold is less than (b) the accreted or amortized cost basis of such investment.

•The cumulative aggregate realized capital gains are calculated as the sum of the differences, if positive, between (a) the net sales price of each investment in the Company’s portfolio when sold and (b) the accreted or amortized cost basis of such investment.

•The aggregate unrealized capital depreciation is calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable Capital Gain Incentive Fee calculation date and (b) the accreted or amortized cost basis of such investment.

The Capital Gain Incentive Fee is calculated on a cumulative basis from September 29, 2017 through the end of each calendar year or termination of the Investment Advisory Agreement. For periods ending on or prior to the date of the closing of a Liquidity Event, the Investment Adviser has agreed to irrevocably waive that portion of the Capital Gain Incentive Fee, calculated as described above, in excess of 15.0% of the Capital Gain Incentive Fee Base, provided that any amounts so waived shall be deemed paid to the Investment Adviser for purposes of determining the Capital Gain Incentive Fee payable after the closing of a public offering or listing. For the three and six months ended March 31, 2020, the reversal in accrual for the Capital Gain Incentive Fee waiver was $357 and $221, respectively. For the three and six months ended March 31, 2019, the accrual of the Capital Gain Incentive Fee waiver was $24 and $60, respectively.

In accordance with GAAP, the Company is required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee on a quarterly basis, as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. If the Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized capital appreciation, is positive at the end of a period, then GAAP requires the Company to accrue a capital gain incentive fee equal to 15.0% prior to a Liquidity Event (20.0% following a Liquidity Event) of such amount, less the aggregate amount of the actual Capital Gain Incentive Fees paid and capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP in a given period results in additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. There can be no assurance that such unrealized capital appreciation will be realized in the future.

For the three and six months ended March 31, 2020, the reversal of the Capital Gain Incentive Fee incurred was $1,428 and $884, respectively. For the three and six months ended March 31, 2019, the Capital Gain Incentive Fee incurred was $92 and $240, respectively.

There was no Capital Gain Incentive Fee as calculated under the Investment Advisory Agreement (as described above) payable as of March 31, 2020 and September 30, 2019.

As of March 31, 2020 and September 30, 2019, included in management and incentive fees payable on the Consolidated Statements of Financial Condition was $0 and $663, respectively, for accruals for the capital gain incentive fee (net of waiver) under GAAP, none of which was payable pursuant to the Investment Advisory Agreement.

The third part of the Incentive Fee, the Subordinated Liquidation Incentive Fee, equals 15.0% of the net proceeds from a liquidation of the Company in excess of adjusted capital, as calculated immediately prior to liquidation. For purposes of this calculation, (a) ‘‘liquidation’’ includes any merger of the Company with another entity or the acquisition of all or substantially all of the shares of the Company’s common stock in a single or series of related transactions and (b) ‘‘adjusted capital’’ means the net asset value of the Company calculated immediately prior to liquidation in accordance with GAAP less unrealized capital appreciation that would have been subject to the Capital Gain Incentive Fee had capital gain been recognized on the transfer of such assets in the liquidation. The Investment Advisory Agreement provides that no Subordinated Liquidation Incentive Fee shall be payable for any

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

liquidation that occurs more than six months after the date of an initial public offering of the Company’s common stock or a listing of the Company’s common stock on a national securities exchange. For periods prior to the date of the closing of a Liquidity Event, the Investment Adviser has agreed to waive the Subordinated Liquidation Incentive Fee.

The Company has structured the calculation of the Incentive Fee to include a fee limitation such that the Income Incentive Fee and the Capital Gain Incentive Fee will not be paid at any time if, after such payment, the cumulative Income Incentive Fees and Capital Gain Incentive Fees paid to date would exceed an incentive fee cap (the "Incentive Fee Cap"). For periods ending on or prior to the date of the closing of a Liquidity Event, the Incentive Fee Cap in any quarter is equal to the difference between (a) 15.0% of Cumulative Pre-Incentive Fee Net Income and (b) cumulative incentive fees of any kind paid to the Investment Adviser by the Company since September 29, 2017. For periods beginning after the date of the closing of a Liquidity Event, the Incentive Fee Cap in any quarter will be equal to the difference, if positive, between (a) the sum of (i) 20.0% of Cumulative Pre-Incentive Fee Net Income for the period beginning on the date immediately following the closing of a Liquidity Event and (ii) 15.0% of Cumulative Pre-Incentive Fee Net Income for the period from September 29, 2017 and ending on the date of the closing of a Liquidity Event and (b) cumulative Income Incentive Fees and Capital Gain Incentive Fees paid to the Investment Adviser by the Company from September 29, 2017.

To the extent the Incentive Fee Cap is zero or a negative value in any quarter, no incentive fee would be payable in that quarter. ‘‘Cumulative Pre-Incentive Fee Net Income’’ is equal to the sum of (a) Pre-Incentive Fee Net Investment Income for each period since September 29, 2017 and (b) cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation since September 29, 2017.

The sum of the Income Incentive Fee, the Capital Gain Incentive Fee and the Subordinated Liquidation Incentive Fee is the Incentive Fee. Prior to the closing of a Liquidity Event, the Company will deposit one-third of each Income Incentive Fee and Capital Gain Incentive Fee payment into an escrow account (the “Escrow Account”) to be administered by U.S. Bank National Association (the “Escrow Agent”). Assets in the Escrow Account will be held by the Escrow Agent until the closing of a Liquidity Event at which time the Escrow Agent will release the assets to the Investment Adviser. If no Liquidity Event occurs prior to October 2, 2023, the Escrow Agent will return all assets in the Escrow Account to the Company for the benefit of the stockholders. For the three and six months ended March 31, 2020, the Company deposited $439 and $848, respectively, into the Escrow Account. For the three and six months ended March 31, 2019, the Company deposited $129 and $224, respectively, into the Escrow Account.

Administration Agreement: Pursuant to the Administration Agreement, the Administrator furnishes the Company with office facilities and equipment and provides clerical, bookkeeping, and record-keeping services at such facilities and provides the Company with other administrative services as the Administrator, subject to review by the Board, determines necessary to conduct the Company's day-to-day operations. The Company reimburses the Administrator for the allocable portion (subject to the review and approval of the Board) of the Administrator’s overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions and the Company’s allocable portion of the cost of its chief financial officer and chief compliance officer and their respective staffs. The Board reviews such expenses to determine that these expenses, including any allocation of expenses among the Company and other entities for which the Administrator provides similar services, are reasonable and comparable to administrative services charged by unaffiliated third-party asset managers. In addition, under the Administration Agreement, the Administrator also provides, on the Company’s behalf, managerial assistance to those portfolio companies to which the Company is required to provide such assistance and will be paid an additional amount based on the cost of the services provided, which amount shall not exceed the amount the Company receives from such portfolio companies.

As of March 31, 2020 and September 30, 2019, included in accounts payable and accrued expenses is $302 and $219, respectively, for accrued allocated shared services under the Administration Agreement.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

Other related party transactions: The Company agreed to reimburse the Investment Adviser for formation and costs associated with the initial closing of the Subscription Agreements incurred on its behalf up to an aggregate amount of $700. Any costs in excess of $700 will be borne by the Investment Adviser. Since our formation on August 1, 2017, formation and initial closing costs paid by the Investment Adviser on behalf of the Company and reimbursed by the Company totaled $199.

The Administrator pays for certain unaffiliated third-party expenses incurred by the Company. Such expenses include postage, printing, office supplies, rating agency fees and professional fees. These expenses are not marked-up and represent the same amount the Company would have paid had the Company paid the expenses directly. These expenses are subsequently reimbursed in cash. Total expenses reimbursed to the Administrator during the three and six months ended March 31, 2020 were $211 and $384, respectively. Total expenses reimbursed to the Administrator during the three and six months ended March 31, 2019 were $173 and $313, respectively. As of March 31, 2020 and September 30, 2019, included in accounts payable and accrued expenses were $121 and $173 for reimbursable expenses that were paid by the Administrator on behalf of the Company.

On August 1, 2017, GCOP LLC, an affiliate of the Investment Adviser, purchased 700.000 shares of common stock of the Company for an aggregate purchase price of $11. On October 1, 2018, GCOP LLC, entered into a Subscription Agreement for an aggregate commitment of $10,000. On January 1, 2020, GCOP LLC, entered into a Subscription Agreement for an aggregate commitment of $13,000. As of March 31, 2020, the Company has issued 562,419.224 shares of its common stock to GCOP LLC in exchange for aggregate capital contributions totaling $8,436.

On October 2, 2017, GEMS Fund 4, L.P., a Delaware limited partnership whose general partner is controlled by the Investment Adviser, entered into a Subscription Agreement for an aggregate commitment of $27,500. As of March 31, 2020, the Company has issued 1,778,333.332 shares of its common stock to GEMS Fund 4, L.P. in exchange for aggregate capital contributions totaling $26,675.

On October 2, 2017, the Company entered into an unsecured revolving credit facility with the Investment Adviser (as amended, the “Adviser Revolver”) with a maximum credit limit of $40,000 and with an expiration date of October 2, 2020. On June 28, 2019, the Company and the Investment Adviser amended the Adviser Revolver to increase the borrowing capacity from $40,000 to $100,000. On August 15, 2019, the Company and the Investment Adviser entered into a second amendment to the Adviser Revolver to increase the borrowing capacity from $100,000 to $125,000. On October 28, 2019, the Company amended the Adviser Revolver to decrease the borrowing capacity from $125,000 to $40,000. Refer to Note 8 for discussion of the Adviser Revolver.

Note 5. Investments

Investments as of March 31, 2020 and September 30, 2019 consisted of the following:


	As of March 31, 2020										As of September 30, 2019
	Principal		Amortized Cost		Fair Value		Principal		Amortized Cost		Fair Value
Senior secured	$	140,790	$	139,075	$	131,511	$	97,133	$	95,943	$	96,765
One stop	697,501		688,353		655,409		511,850		505,134		509,530
Second lien	4,140		4,061		4,140		3,898		3,811		3,898
Subordinated debt	37		36		38		2		—		2

Equity	N/A		7,680		7,343		N/A		6,115		6,794
Total	$	842,468	$	839,205	$	798,441	$	612,883	$	611,003	$	616,989

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Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

The following tables show the portfolio composition by geographic region at amortized cost and fair value as a percentage of total investments in portfolio companies. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which is not always indicative of the primary source of the portfolio company’s business.


	As of March 31, 2020						As of September 30, 2019
Amortized Cost:
United States
Mid-Atlantic	$	206,175	24.6	%	$	144,732	23.7	%
Midwest	174,869		20.9		158,842		26.0
Northeast	45,512		5.4		24,902		4.1
Southeast	151,881		18.1		117,930		19.3
Southwest	98,310		11.7		63,330		10.4
West	138,773		16.5		86,421		14.1
Canada	12,858		1.5		12,511		2.0
United Kingdom	1,993		0.2		1,897		0.3
Australia	446		0.1		438		0.1
Luxembourg	7,650		0.9		—		—
Andorra	738		0.1		—		—
Total	$	839,205	100.0	%	$	611,003	100.0	%

Fair Value:
United States
Mid-Atlantic	$	197,835	24.8	%	$	146,386	23.7	%
Midwest	165,618		20.7		159,689		25.9
Northeast	43,720		5.5		25,284		4.1
Southeast	142,035		17.8		118,977		19.3
Southwest	94,326		11.8		64,246		10.4
West	133,508		16.7		87,448		14.1
Canada	11,875		1.5		12,719		2.1
United Kingdom	1,782		0.2		1,802		0.3
Australia	373		0.1		438		0.1
Luxembourg	7,055		0.9		—		—
Andorra	314		—	*	—		—
Total	$	798,441	100.0	%	$	616,989	100.0	%

^{*Represents an amount less than 0.01%}

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

The industry compositions of the portfolio at amortized cost and fair value as of March 31, 2020 and September 30, 2019 were as follows:


	As of March 31, 2020						As of September 30, 2019
Amortized Cost:
Automobile	$	11,087	1.3	%	$	8,564	1.4	%
Beverage, Food and Tobacco	37,594		4.5		28,918		4.7
Buildings and Real Estate	11,570		1.4		24,685		4.0
Chemicals, Plastics and Rubber	3,337		0.4		2,895		0.5
Containers, Packaging and Glass	4,393		0.5		—		—
Diversified/Conglomerate Manufacturing	15,437		1.8		11,407		1.9
Diversified/Conglomerate Service	449,308		53.5		285,736		46.8
Electronics	79,381		9.5		46,395		7.6
Finance	6,456		0.8		6,441		1.1
Healthcare, Education and Childcare	68,346		8.1		58,357		9.5
Hotels, Motels, Inns, and Gaming	2,555		0.3		2,091		0.3
Insurance	28,459		3.4		26,073		4.3
Leisure, Amusement, Motion Pictures, Entertainment	36,242		4.3		31,706		5.2
Oil and Gas	21,173		2.5		8,677		1.4
Personal and Non Durable Consumer Products (Mfg. Only)	1,250		0.2		951		0.2
Personal, Food and Miscellaneous Services	44,192		5.3		50,224		8.2
Printing and Publishing	2,042		0.2		2,052		0.3
Retail Stores	16,383		2.0		15,831		2.6
Total	$	839,205	100.0	%	$	611,003	100.0	%


	As of March 31, 2020						As of September 30, 2019
Fair Value:
Automobile	$	9,894	1.2	%	$	8,714	1.4	%
Beverage, Food and Tobacco	34,941		4.4		29,102		4.7
Buildings and Real Estate	11,036		1.4		24,893		4.0
Chemicals, Plastics and Rubber	3,030		0.4		2,916		0.5
Containers, Packaging and Glass	4,033		0.5		—		—
Diversified/Conglomerate Manufacturing	13,760		1.7		11,624		1.9
Diversified/Conglomerate Service	432,109		54.1		288,996		46.9
Electronics	77,216		9.7		46,896		7.6
Finance	6,248		0.8		6,433		1.0
Healthcare, Education and Childcare	64,957		8.1		58,595		9.5
Hotels, Motels, Inns, and Gaming	1,933		0.2		2,079		0.4
Insurance	26,979		3.4		26,661		4.3
Leisure, Amusement, Motion Pictures, Entertainment	33,730		4.2		32,043		5.2
Oil and Gas	20,174		2.5		8,781		1.4
Personal and Non Durable Consumer Products (Mfg. Only)	1,234		0.2		960		0.2
Personal, Food and Miscellaneous Services	40,486		5.1		50,176		8.1
Printing and Publishing	1,912		0.2		2,048		0.3
Retail Stores	14,769		1.9		16,072		2.6
Total	$	798,441	100.0	%	$	616,989	100.0	%

GBDC 3 Senior Loan Fund LLC:

On October 2, 2017, the Company agreed to co-invest with RGA Reinsurance Company (“RGA”) primarily in senior secured loans through GBDC 3 Senior Loan Fund LLC (“GBDC 3 SLF”), an unconsolidated Delaware LLC.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

GBDC 3 SLF will be capitalized as transactions are completed and all portfolio and investment decisions in respect of GBDC 3 SLF must be approved by the GBDC 3 SLF investment committee consisting of two representatives of each of the Company and RGA (with unanimous approval required from (i) one representative of each of the Company and RGA or (ii) both representatives of each of the Company and RGA).

As of March 31, 2020 and September 30, 2019, the Company had $109,375 and $109,375, respectively, of LLC equity interest subscriptions to GBDC 3 SLF, none of which were funded as of each March 31, 2020 and September 30, 2019 as GBDC 3 SLF has not yet commenced operations.

Note 6. Forward Currency Contracts

The Company enters into forward currency contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company's investments denominated in foreign currencies.

The outstanding forward currency contracts as of March 31, 2020 and September 30, 2019 were as follows:



As of March 31, 2020
Counterparty	Currency to be sold					Currency to be purchased		Settlement Date		Unrealized appreciation ($)		Unrealized depreciation ($)
Macquarie Bank Limited	€	4,606	EUR	$	5,656	USD	12/12/2022	$	436	$	—
Macquarie Bank Limited	C$	5,654	CAD	$	4,284	USD	12/12/2022	282		—
Macquarie Bank Limited	£	1,550	GBP	$	1,933	USD	2/21/2023	2		—
								$	720	$	—



As of September 30, 2019
Counterparty	Currency to be sold					Currency to be purchased		Settlement Date		Unrealized appreciation ($)		Unrealized depreciation ($)
Macquarie Bank Limited	€	4,606	EUR	$	5,656	USD	12/12/2022	$	251	$	—
Macquarie Bank Limited	C$	5,654	CAD	$	4,284	USD	12/12/2022	23		—
Macquarie Bank Limited	£	1,550	GBP	$	1,933	USD	2/21/2023	—		(34)
								$	274	$	(34)

In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) with its derivative counterparty, Macquarie Bank Limited (“Macquarie”). The ISDA Master Agreement is a bilateral agreement between the Company and Macquarie that governs over the counter (“OTC”) derivatives, including forward currency contracts, and contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Company and cash collateral received from Macquarie, if any, is included in the Consolidated Statements of Financial Condition as cash collateral held at broker for forward currency contracts or cash collateral received from broker for forward currency contracts. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that it believes to be of good standing and by monitoring the financial stability of those counterparties.

The following table is intended to provide additional information about the effect of the forward foreign currency exchange contracts on the financial statements of the Company including: the fair value of derivatives by risk category, the location of those fair values on the Consolidated Statement of Financial Condition, and the Company’s

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Company as of March 31, 2020 and September 30, 2019.


As of March 31, 2020
Counterparty	Risk exposure category	Unrealized appreciation on forward currency contracts		Unrealized depreciation on forward currency contracts		Net amounts presented in the Consolidated Statement of Financial Condition		Collateral (Received) Pledged ⁽¹⁾		Net Amount ⁽²⁾
Macquarie Bank Limited	Foreign exchange	$	720	$	—	$	720	$	—	$	720


As of September 30, 2019
Counterparty	Risk exposure category	Unrealized appreciation on forward currency contracts		Unrealized depreciation on forward currency contracts		Net amounts presented in the Consolidated Statement of Financial Condition		Collateral (Received) Pledged ⁽¹⁾		Net Amount ⁽²⁾
Macquarie Bank Limited	Foreign exchange	$	274	$	(34)	$	240	$	—	$	240

⁽¹⁾In some instances, the actual collateral pledged may be more than the amount shown due to overcollateralization.

⁽²⁾Represents the net amount due from/(to) counterparties in the event of default.

During three and six months ended March 31, 2019, the Company had no forward currency contracts outstanding. The impact of derivative transactions for the three and six months ended March 31, 2020 on the Consolidated Statements of Operations, including realized and unrealized gains (losses) is summarized in the table below:


Realized gain (loss) on forward currency contracts recognized in income
Risk exposure category	For the three months ended March 31, 2020		For the six months ended March 31, 2020
Foreign exchange	$	—	$	—

Change in unrealized appreciation (depreciation) on forward currency contracts recognized in income
Risk exposure category	For the three months ended March 31, 2020		For the six months ended March 31, 2020
Foreign exchange	$	778	$	479

The following table is a summary of the average outstanding daily volume for forward currency contracts for the three and six months ended March 31, 2020:






Average U.S. Dollar notional outstanding	For the three months ended March 31, 2020		For the six months ended March 31, 2020
Forward currency contracts	$	11,874	$	11,874

Exclusion of the Investment Adviser from Commodity Pool Operator Definition

Engaging in commodity interest transactions such as swap transactions or futures contracts for the Company may cause the Investment Adviser to fall within the definition of “commodity pool operator” under the Commodity Exchange Act (the “CEA”) and related Commodity Futures Trading Commission (the “CFTC”) regulations. On February 6, 2020, the Investment Adviser claimed an exclusion from the definition of the term “commodity pool operator” under the CEA and the CFTC regulations in connection with its management of the Company and,

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

therefore, is not subject to CFTC registration or regulation under the CEA as a commodity pool operator with respect to its management of the Company.

Note 7. Fair Value Measurements

The Company follows ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the assets or liabilities.

Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company assesses the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities for the three and six months ended March 31, 2020 and 2019. The following section describes the valuation techniques used by the Company to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by the Board, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of the Board to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of the Company’s valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. All investments as of March 31, 2020 and September 30, 2019, with the exception of money market funds included in cash and cash equivalents and restricted cash and cash equivalents (Level 1 investments) and forward currency contracts (Level 2 investments), were valued using Level 3 inputs of the fair value hierarchy.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

When determining fair value of Level 3 debt and equity investments, the Company takes into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that affect the price at which similar investments are made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s net income before net interest expense, income tax expense, depreciation and amortization (“EBITDA”). A portfolio company’s EBITDA can include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, the Company will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, the Company uses a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, the Company bases its valuation on indicative bid and ask prices provided by an independent third-party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Company generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that are ultimately received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which such investment had previously been recorded.

The Company’s investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

The following tables present fair value measurements of the Company’s investments and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of March 31, 2020 and September 30, 2019:


As of March 31, 2020	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Total
Assets, at fair value:
Debt investments⁽¹⁾	$	—	$	—	$	791,098	$	791,098
Equity investments⁽¹⁾	—		—		7,343		7,343
Money market funds⁽¹⁾⁽²⁾	21,067		—		—		21,067
Forward currency contracts	—		720		—		720
Total assets, at fair value:	$	21,067	$	720	$	798,441	$	820,228

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)


As of September 30, 2019	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Total
Assets, at fair value:
Debt investments⁽¹⁾	$	—	$	—	$	610,195	$	610,195
Equity investments⁽¹⁾	—		—		6,794		6,794
Money market funds⁽¹⁾⁽²⁾	2,925		—		—		2,925
Forward currency contracts	—		274		—		274
Total assets, at fair value:	$	2,925	$	274	$	616,989	$	620,188
Liabilities, at fair value:
Forward currency contracts	$	—	$	(34)	$	—	$	(34)
Total liabilities, at fair value:	$	—	$	(34)	$	—	$	(34)

⁽¹⁾Refer to the Consolidated Schedules of Investments for further details.

⁽²⁾Included in cash and cash equivalents and restricted cash and cash equivalents on the Consolidated Statements of Financial Condition.

The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2020 reported within the net change in unrealized appreciation (depreciation) on investments and foreign currency translation in the Company’s Consolidated Statements of Operations attributable to the Company's Level 3 assets held as of March 31, 2020 was $(48,899) and $(46,637), respectively. The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2019 reported within the net change in unrealized appreciation (depreciation) on investments and foreign currency translation in the Company's Consolidated Statements of Operations attributable to the Company's Level 3 assets held as of March 31, 2019 was $582 and $1,299, respectively.

The following tables present the changes in investments measured at fair value using Level 3 inputs for the six months ended March 31, 2020 and 2019:


	For the six months ended March 31, 2020
	Debt Investments		Equity Investments		Total Investments
Fair value, beginning of period	$	610,195	$	6,794	$	616,989
Net change in unrealized appreciation (depreciation) on investments	(45,734)		(1,016)		(46,750)

Funding of (proceeds from) revolving loans, net	4,989		—		4,989
Fundings of investments	298,691		1,566		300,257
PIK interest	895		—		895
Proceeds from principal payments and sales of portfolio investments	(79,610)		(1)		(79,611)
Accretion of discounts and amortization of premiums	1,672		—		1,672
Fair value, end of period	$	791,098	$	7,343	$	798,441


	For the six months ended March 31, 2019
	Debt Investments		Equity Investments		Total Investments
Fair value, beginning of period	$	141,576	$	2,083	$	143,659
Net change in unrealized appreciation (depreciation) on investments	892		191		1,083
Realized gain (loss) on investments	—		1		1
Funding of (proceeds from) revolving loans, net	1,142		—		1,142
Fundings of investments	159,344		2,270		161,614
PIK interest	35		—		35
Proceeds from principal payments and sales of portfolio investments	(9,498)		(210)		(9,708)
Accretion of discounts and amortization of premiums	483		—		483
Fair value, end of period	$	293,974	$	4,335	$	298,309

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of March 31, 2020 and September 30, 2019:

Quantitative information about Level 3 Fair Value Measurements

Fair value as of March 31, 2020

Valuation Techniques

Unobservable Input

Range (Weighted Average)⁽¹⁾

Assets, at fair value:

Senior secured loans

130,921

Market rate approach

Market interest rate

4.5% - 11.0% (6.7%)

Market comparable companies

EBITDA multiples

7.0x - 20.0x (13.5x)

590

Market comparable companies

Broker/ Dealer bids or quotes

N/A

One stop loans⁽²⁾

655,409

Market rate approach

Market interest rate

2.8% - 15.8% (8.3%)

Market comparable companies

EBITDA multiples

5.5x - 27.2x (14.2x)

Market comparable companies

Revenue multiples

2.0x - 10.0x (6.3x)

Subordinated debt and second lien loans⁽³⁾

4,178

Market rate approach

Market interest rate

4.0% - 12.0% (11.9%)

Market comparable companies

EBITDA multiples

16.0x

Market comparable companies

Revenue multiples

4.0x (4.0x)

Equity⁽⁴⁾

7,343

Market comparable companies

EBITDA multiples

6.5x - 27.2x (14.9x)

Revenue multiples

2.0x - 8.0x (4.8x)

⁽¹⁾Unobservable inputs were weighted by the relative fair value of the instruments.

⁽²⁾The Company valued $503,507 and $151,902 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.

⁽³⁾The Company valued $4,140 and $38 of subordinated debt and second lien loans using EBITDA and revenue multiples, respectively. All subordinated debt and second lien loans were also valued using the market rate approach.

⁽⁴⁾The Company valued $5,463 and $1,880 of equity investments using EBITDA and revenue multiples, respectively.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

Quantitative information about Level 3 Fair Value Measurements

Fair value as of September 30, 2019

Valuation Techniques

Unobservable Input

Range (Weighted Average) ⁽¹⁾

Assets, at fair value:

Senior secured loans

96,004

Market rate approach

Market interest rate

4.3% - 9.5% (6.3%)

Market comparable companies

EBITDA multiples

7.5x - 24.0x (14.6x)

761

Market comparable companies

Broker/ Dealer bids or quotes

N/A

One stop loans⁽²⁾

509,530

Market rate approach

Market interest rate

5.3% - 11.5% (8.0%)

Market comparable companies

EBITDA multiples

7.0x - 28.0x (15.7x)

Market comparable companies

Revenue multiples

3.0x - 11.0x (6.0x)

Subordinated debt and second lien loans⁽³⁾

3,900

Market rate approach

Market interest rate

8.0% - 12.0% (12.0%)

Market comparable companies

EBITDA multiples

17.5x

Market comparable companies

Revenue multiples

3.0x

Equity⁽⁴⁾

6,794

Market comparable companies

EBITDA multiples

7.5x - 27.0x (16.3x)

Revenue multiples

3.0x - 6.5x (5.2x)

⁽¹⁾Unobservable inputs were weighted by the relative fair value of the instruments.

⁽²⁾The Company valued $399,514 and $110,016 of one stop loans using EBITDA and revenue multiples, respectively. All one stop loans were also valued using the market rate approach.

⁽³⁾The Company valued $3,898 and $2 of subordinated debt and second lien loans using EBITDA and revenue multiples, respectively. All subordinated debt and second lien loans were also valued using the market rate approach.

⁽⁴⁾The Company valued $5,174 and $1,620 of equity investments using EBITDA and revenue multiples, respectively.

The above tables are not intended to be all-inclusive but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity investments are EBITDA multiples, revenue multiples and market interest rates. The Company uses EBITDA multiples and, to a lesser extent, revenue multiples on its debt and equity investments to determine any credit gains or losses. Increases or decreases in either of these inputs in isolation would have resulted in a significantly lower or higher fair value measurement. The Company uses market interest rates for loans to determine if the effective yield on a loan is commensurate with the market yields for that type of loan. If a loan’s effective yield was significantly less than the market yield for a similar loan with a similar credit profile, then the resulting fair value of the loan may have been lower.

Other Financial Assets and Liabilities

ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. As a result, with the exception of the line item titled “debt” which is reported at cost, all assets and liabilities approximate fair value on the Consolidated Statements of Financial Condition due to their short maturity. Fair value of the Company’s debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

The following are the carrying values and fair values of the Company’s debt and other short-term borrowings as of March 31, 2020 and September 30, 2019. Fair value is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if available.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)


	As of March 31, 2020						As of September 30, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt	$	382,870	$	382,870	$	270,644	$	270,644
Other short-term borrowings	—		—		16,366		16,366

Note 8. Borrowings

In accordance with the 1940 Act, with certain limited exceptions, the Company is currently allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. The Company has not sought or obtained any approval necessary to be subject to the reduced asset coverage requirements available to BDCs pursuant to Section 61(a)(2) of the 1940 Act, which permits a BDC to have asset coverage of 150%, or a ratio of total consolidated assets to outstanding indebtedness of 2:1 as compared to a maximum of 1:1 under the 200% asset coverage requirement under the 1940 Act. As of March 31, 2020, the Company’s asset coverage for borrowed amounts was 217.3%.

Adviser Revolver: On October 2, 2017, the Company entered into the Adviser Revolver with the Investment Adviser, with a maximum credit limit of $40,000 and expiration date of October 2, 2020. On June 28, 2019, the Company and the Investment Adviser amended the Adviser Revolver to increase the borrowing capacity from $40,000 to $100,000. On August 15, 2019, the Company and the Investment Adviser entered into a second amendment to the Adviser Revolver to increase the borrowing capacity from $100,000 to $125,000. On October 28, 2019, the Company entered into a third amendment to the Adviser Revolver, which decreased the borrowing capacity from $125,000 to $40,000. Other material terms of the Adviser Revolver were unchanged. The Adviser Revolver bears interest at a rate equal to the short-term Applicable Federal Rate (“AFR”). The short-term AFR as of March 31, 2020 was 1.5%. As of March 31, 2020 and September 30, 2019, the Company had $0 and $3,500, respectively, of outstanding debt under the Adviser Revolver.

For the three and six months ended March 31, 2020, the Company had borrowings on the Adviser Revolver of $5,000 and $16,000, respectively, and repayments on the Adviser Revolver of $10,000 and $19,500, respectively. For the three and six months ended March 31, 2019, the Company had no borrowings and repayments on the Adviser Revolver.

For the three and six months ended March 31, 2020 and 2019, the stated interest expense, cash paid for interest expense, annualized average stated interest rates and average outstanding balances for the Adviser Revolver were as follows:


	For the three months ended March 31,								For the six months ended March 31,
	2020			2019		2020			2019
Stated interest expense	$	10		$	—	$	17		$	—
Cash paid for interest expense	11			—		270			—
Annualized average stated interest rate	1.6		%	N/A		1.7		%	N/A
Average outstanding balance	$	2,418		$	—	$	1,940		$	—

SMBC Revolver: On March 16, 2018, the Company entered into a revolving credit agreement with Sumitomo Mitsui Banking Corporation, which prior to its termination allowed the Company to borrow up to $110,000 at anytime outstanding, subject to leverage and borrowing base restrictions (as amended, the “SMBC Revolver”). On February 4, 2019, all outstanding borrowings under the SMBC Revolver were repaid, following which the SMBC Revolver was terminated. Obligations under the SMBC Revolver would have otherwise matured on March 16, 2020.

The SMBC Revolver bore interest at a rate equal, at the Company's election, to either one-month LIBOR plus 1.50% per annum or Prime. In addition to the stated interest rate on the SMBC Revolver, the Company was required to pay a non-usage fee at a rate of 0.20% per annum on the unused portion of the SMBC Revolver.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

The SMBC Revolver was secured by the unfunded capital commitments of certain stockholders of the Company. The Company made customary representations and warranties and was required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowings under the SMBC Revolver were subject to the asset coverage requirements contained in the 1940 Act.

As of March 31, 2020 and September 30, 2019, the Company had no outstanding debt under the SMBC Revolver. For the three and six months ended March 31, 2019, the Company had borrowings on the SMBC Revolver of $32,500 and $74,500, respectively, and repayments on the SMBC Revolver of $104,000 and $133,000, respectively.

For the three and six months ended March 31, 2020 and 2019, the components of interest expense, cash paid for interest and facility fees, annualized average interest rates and average outstanding balances for the SMBC Revolver were as follows:


	For the three months ended March 31,							For the six months ended March 31,
	2020		2019			2020		2019
Stated interest expense	$	—	$	645		$	—	$	1,393
Facility fees	—		4			—		21
Amortization of debt issuance costs	—		327			—		497
Total interest and other debt financing expenses	$	—	$	976		$	—	$	1,911
Cash paid for interest expense	$	—	$	944		$	—	$	1,549
Annualized average stated interest rate	N/A		7.5		%	N/A		5.0		%
Average outstanding balance	$	—	$	35,034		$	—	$	55,747

SB Revolver: On February 4, 2019, the Company entered into a revolving credit agreement (as amended, the “SB Revolver”) with Signature Bank (“SB”), as administrative agent and a lender, which allowed the Company to borrow up to $175,000 at any one time outstanding, subject to leverage and borrowing base restrictions, with a stated maturity date of February 4, 2021. On April 8, 2019, the Company entered into an amendment to the SB Revolver with SB which increased the borrowing capacity under the SB Revolver to $225,000 from $175,000. Other material terms of the SB Revolver were unchanged. On May 31, 2019, the Company amended the SB Revolver to permit borrowings in foreign currencies. On February 7, 2020, the Company, together with GBDC 3 Funding II entered into an amendment to the SB Revolver (the “SB Revolver Amendment”). The SB Revolver Amendment amended the SB Revolver to, among other things, increase the borrowing capacity under the SB Revolver to $275,000 from $225,000 and increase the borrowing base against which the Company may borrow through April 7, 2020, after which the borrowing base reverts to the terms applicable to the Company prior to the SB Revolver Amendment. The other material terms of the SB Revolver were unchanged. As of March 31, 2020, the Company could borrow up to $275,000.

The SB Revolver bears interest at a rate, at the Company’s election, of either the one-, two- or three-month LIBOR plus 1.50% per annum or the prime rate minus 1.40%, as calculated under the SB Revolver. The revolving period under the SB Revolver will continue through February 4, 2021. The SB Revolver is secured by the unfunded commitments of stockholders of the Company, collateral accounts and the proceeds of the foregoing. In addition to the stated interest rate on the SB Revolver, the Company is required to pay a non-usage fee at a rate of 0.15% per annum on the unused portion of the SB Revolver.

As of March 31, 2020 and September 30, 2019, the Company had outstanding debt under the SB Revolver of $232,284 and $144,444, respectively. For the three and six months ended March 31, 2020, the Company had borrowings on the SB Revolver of $276,000 and $307,243, respectively, and repayments on the SB Revolver of $153,000 and $219,403, respectively. For the three and six months ended March 31, 2019, the Company had borrowings on the SB Revolver of $153,850 and $153,850, respectively, and repayments on the SB Revolver of $17,032 and $17,032, respectively.

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Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

For the three and six months ended March 31, 2020 and 2019, the stated interest expense, cash paid for interest expense, annualized average interest rates and average outstanding balances for the SB Revolver were as follows:


	For the three months ended March 31,									For the six months ended March 31,
	2020			2019			2020			2019
Stated interest expense	$	1,424		$	487		$	2,663		$	487
Facility fees	25			12			56			12
Amortization of debt issuance costs	182			35			277			35
Total interest expense	$	1,631		$	534		$	2,996		$	534
Cash paid for interest expense	$	1,270		$	198		$	2,647		$	198
Annualized average stated interest rate	3.0		%	2.6		%	3.2		%	2.6		%
Average outstanding balance	$	189,053		$	77,313		166,488			$	38,232

DB Credit Facility: On September 10, 2019 (the “Effective Date”), the Company and GBDC 3 Funding, entered into a loan financing and servicing agreement (the “DB Credit Facility”), with the Company, as equity holder and as servicer, the lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as facility agent, the other agents parties thereto, each of the entities from time to time party thereto as securitization subsidiaries and Deutsche Bank Trust Company Americas, as collateral agent and as collateral custodian. As of September 30, 2019, allowed GBDC 3 Funding to borrow up to $250,000, subject to leverage and borrowing base restrictions. The period during which GBDC 3 Funding may request drawdowns under the DB Credit Facility (the “Revolving Period”) commenced on the Effective Date and will continue through September 10, 2022 unless there is an earlier termination or event of default. The DB Credit Facility will mature on the earliest of (i) three years from the last day of the Revolving Period, (ii) the date on which the Company ceases to exist or (iii) the occurrence of an event of default.

As of March 31, 2020, the DB Credit Facility bears interest at the applicable base rate plus 2.00% per annum. The base rate under the DB Credit Facility is (i) the three-month Canadian Dollar Offered Rate with respect to any advances denominated in Canadian dollars, (ii) the three-month EURIBOR with respect to any advances denominated in euros, (iii) the three-month Bank Bill Swap Rate with respect to any advances denominated in Australian dollars and (iv) the three-month LIBOR with respect to any other advances. A syndication/agent fee is payable to the facility agent each quarter and is calculated based on the aggregate commitments outstanding each day during the preceding collection period at a rate of 1/360 of 0.25% of the aggregate commitments on each day. In addition, a non-usage fee of 0.25% per annum is payable on the undrawn amount under the DB Credit Facility, and, during the Revolving Period, an additional fee based on unfunded commitments of the lenders may be payable if borrowings under the DB Credit Facility do not exceed a minimum utilization percentage threshold. A prepayment fee would be payable in the event of any permanent reduction in commitments of the DB Credit Facility in the amount of 0.50% or 0.25% of the amount of the reduction during the first or second year after the Effective Date, respectively.

The DB Credit Facility is secured by all of the assets held by GBDC 3 Funding. GBDC 3 Funding has made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. The borrowings of the Company, including under the DB Credit Facility, are subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.

The Company transfers certain loans and debt securities it has originated or acquired from time to time to GBDC 3 Funding through a purchase and sale agreement and causes GBDC 3 Funding to originate or acquire loans, consistent with the Company's investment objectives.

As of March 31, 2020 and September 30, 2019, the Company had outstanding debt under the DB Credit Facility of $150,586 and $122,700, respectively. For the three and six months ended March 31, 2020, the Company had borrowings on the DB Credit Facility of $26,912 and $167,812, respectively, and repayments on the DB Credit

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Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

Facility of $126,295 and $139,895, respectively. For the three and six months ended March 31, 2019, the Company had no borrowings or repayments on the DB Credit Facility, respectively.


	For the three months ended March 31,								For the six months ended March 31,
	2020			2019		2020			2019
Stated interest expense	$	1,657		$	—	$	3,336		$	—
Facility fees	201			—		414			—
Amortization of debt issuance costs	110			—		220			—
Total interest expense	$	1,968		$	—	$	3,970		$	—
Cash paid for interest expense	$	2,381		$	—	$	2,381		$	—
Annualized average stated interest rate	3.7		%	N/A		3.8		%	N/A
Average outstanding balance	$	181,982		$	—	$	174,566		$	—

Other Short-Term Borrowings: Borrowings with original maturities of less than one year are classified as short-term. The Company's short-term borrowings are the result of investments that were sold under repurchase agreements. Investments sold under repurchase agreements are accounted for as collateralized borrowings as the sale of the investment does not qualify for sale accounting under ASC Topic 860 and remains as an investment on the Consolidated Statements of Financial Condition.

As of March 31, 2020, the Company had no short-term borrowings. As of September 30, 2019, the Company had $16,366 of short-term borrowings and the fair value of the loan associated with the short-term borrowings was $16,202. For the three and six months ended March 31, 2020, the annualized effective interest rate on short-term borrowings was 4.3% and 4.9%, respectively, and interest expense was $27 and $155, respectively. For the three and six months ended March 31, 2019, the annualized effective interest rate on short-term borrowings was 3.5% and 4.9%, respectively, and interest expense was $2 and $88, respectively. The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2020, reported within the net change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies was $0 and $189, respectively. The net change in unrealized appreciation (depreciation) for the three and six months ended March 31, 2019 reported within the net change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies was $(10) and $0, respectively.

For the three and six months ended March 31, 2020, the average total debt outstanding (including the debt under the Adviser Revolver, SB Revolver, DB Credit Facility and other short-term borrowings) was $375,941 and $349,295, respectively. For the three and six months ended March 31, 2019, the average total debt outstanding (including the debt under the Adviser Revolver, SB Revolver, SMBC Revolver and other short-term borrowings) was $112,546 and $97,588, respectively.

For the three and six months ended March 31, 2020, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company's total debt was 3.9% and 4.1%, respectively. For the three and six months ended March 31, 2019, the effective annualized average interest rate, which includes amortization of debt financing costs and non-usage facility fees, on the Company's total debt was 5.4% and 5.2%, respectively.

A summary of the Company’s maturity requirements for borrowings as of March 31, 2020 is as follows:

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Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)


	Payments Due by Period
	Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More Than 5 Years
SB Revolver	$	232,284	$	232,284	$	—	$	—	$	—
DB Credit Facility	150,586		—		—		—		150,586


Total borrowings	$	382,870	$	232,284	$	—	$	—	$	150,586

Note 9. Commitments and Contingencies

Commitments: As of March 31, 2020, the Company had outstanding commitments to fund investments totaling $138,235, including $4,609 of commitments on undrawn revolvers. As of September 30, 2019, the Company had outstanding commitments to fund investments totaling $107,199. As described in Note 5, the Company had commitments of up to $109,375 and $109,375, respectively, to GBDC 3 SLF as of each of March 31, 2020 and September 30, 2019 which could be contributed primarily for the purpose of funding new investments approved by the GBDC 3 SLF investment committee. As of March 31, 2020, GBDC 3 SLF has not yet commenced operations.

Indemnifications: In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as these involve future claims against the Company that have not occurred. The Company expects the risk of any future obligations under these indemnifications to be remote.

Off-balance sheet risk: Off-balance sheet risk refers to an unrecorded potential liability that may result in a future obligation or loss, even though it does not appear on the Consolidated Statements of Financial Condition. The Company has entered and, in the future, may enter into derivative instruments that contain elements of off-balance sheet market and credit risk. Refer to Note 6 for outstanding forward currency contracts as of March 31, 2020 and September 30, 2019. Derivative instruments can be affected by market conditions, such as interest rate volatility, which could impact the fair value of the derivative instruments. If market conditions move against the Company, it may not achieve the anticipated benefits of any derivative instruments and may realize a loss. The Company minimizes market risk through monitoring its investments and borrowings.

Concentration of credit and counterparty risk: Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of the contract. The Company has engaged, and in the future may engage again, in derivative transactions with counterparties. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparties or issuers of the instruments. The Company’s maximum loss that it could incur related to counterparty risk on derivative instruments is the value of the collateral for that respective derivative instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

Legal proceedings: In the normal course of business, the Company is subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company does not believe any disposition will have a material adverse effect on the Company’s consolidated financial statements.

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Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

Note 10. Financial Highlights

The financial highlights for the Company are as follows:


Per share data:⁽¹⁾	Six months ended March 31,
	2020			2019
Net asset value at beginning of period	$	15.00		$	15.00
Distributions declared:⁽²⁾
From net investment income	(0.55)			(0.62)
From capital gains	0.00		^	—

Net investment income	0.60			0.53
Net realized gain (loss) on investment transactions	0.00		^	0.01
Net change in unrealized appreciation (depreciation) on investment transactions⁽³⁾	(1.41)			0.08
Net asset value at end of period	$	13.64		$	15.00
Total return based on net asset value per share⁽⁴⁾	(6.48)		%	4.24		%
Number of common shares outstanding	33,090,999.162			12,268,702.801


	Six months ended March 31,
Listed below are supplemental data and ratios to the financial highlights:	2020			2019
Ratio of net investment income to average net assets*	8.07		%	7.09		%
Ratio of total expenses to average net assets⁽⁵⁾*	7.05		%	7.53		%
Ratio of management fee waiver to average net assets*	(0.68)		%	(0.61)		%
Ratio of incentive fee waiver to average net assets	(0.04)		%	(0.06)		%

Ratio of net expenses to average net assets⁽⁵⁾⁽⁶⁾*	6.33		%	6.86		%
Ratio of incentive fees to average net assets	0.57		%	0.81		%
Ratio of total expenses (without incentive fees) to average net assets*	6.48		%	6.72		%
Total return based on average net asset value^(7)*	(14.11)		%	8.69		%
Net assets at end of period	$	451,408		$	184,030
Average debt outstanding	$	349,295		$	97,588
Average debt outstanding per share	$	10.56		$	7.95
Portfolio Turnover*	21.31		%	8.52		%
Asset coverage ratio⁽⁸⁾	217.30		%	234.21		%
Asset coverage ratio per unit⁽⁹⁾	$	2,173		$	2,342
Average market value per unit ⁽¹⁰⁾:
SMBC Revolver	N/A			N/A
SB Revolver	N/A			N/A
DB Credit Facility	N/A			N/A
Adviser Revolver	N/A			N/A
Other short-term borrowings	N/A			N/A

^*Annualized for periods of less than one year.

^{^}Represents an amount less than $0.01

⁽¹⁾Based on actual number of shares outstanding at the end of the corresponding period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate.

⁽²⁾The per share data for distributions reflect the amount of distributions paid or payable with a record date during the applicable period.

⁽³⁾Includes the impact of different share amounts as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on the shares outstanding as of the dividend record date.

⁽⁴⁾Total return based on net asset value per share assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.

TABLE OF CONTENTS

Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

⁽⁵⁾Incentive fee is not annualized in the calculation.

⁽⁶⁾Incentive fee waived is not annualized in the calculation.

⁽⁷⁾Total return based on average net asset value is calculated as (a) the net increase (decrease) in net assets resulting from operations divided by (b) the daily average of total net assets. Total return does not include sales load.

⁽⁸⁾In accordance with the 1940 Act, with certain limited exceptions, the Company is currently allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing.

⁽⁹⁾Asset coverage ratio per unit is the ratio of the carrying value of our total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage ratio per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.

⁽¹⁰⁾Not applicable because such senior securities are not registered for public trading.

Note 11. Earnings (Loss) Per Share

The following information sets forth the computation of the net increase/(decrease) in net assets per share resulting from operations for the three and six months ended March 31, 2020 and 2019:


	Three months ended March 31,						Six months ended March 31,
	2020		2019		2020		2019

Earnings/(loss) available to stockholders	$	(38,548)	$	3,476	$	(29,423)	$	6,147
Basic and diluted weighted average shares outstanding	29,851,593		11,092,733		27,861,886		9,467,478
Basic and diluted earnings/(loss) per share	$	(1.29)	$	0.31	$	(1.06)	$	0.65

Note 12. Dividends and Distributions

The Company’s dividends and distributions are recorded on the record date. The following table summarizes the Company’s dividend declarations and distributions with a record date during the six months ended March 31, 2020 and 2019:


Date Declared	Record Date	Payment Date	Shares Outstanding	Amount Per Share		Total Dividends Declared
For the six months ended March 31, 2020
08/06/2019	10/18/2019	12/27/2019	24,795,301.540	$	0.0974	$	2,415
11/22/2019	11/28/2019	12/27/2019	26,881,637.710	0.1310		3,522
11/22/2019	12/20/2019	02/26/2020	29,542,494.081	0.1079		3,188
11/22/2019	01/21/2020	02/26/2020	29,715,740.183	0.0876		2,604
02/04/2020	02/25/2020	05/22/2020	29,715,740.183	0.1280		3,805
Total dividends declared for the six months ended March 31, 2020								$	15,534

For the six months ended March 31, 2019
08/07/2018	10/17/2018	12/28/2018	6,474,023.277	$	0.1025	$	663
11/27/2018	11/28/2018	12/28/2018	8,500,263.562	0.1212		1,030
11/27/2018	12/26/2018	02/27/2019	10,806,835.918	0.0904		977
11/27/2018	01/21/2019	02/27/2019	10,859,989.050	0.1153		1,252
02/05/2019	02/26/2019	05/24/2019	10,859,989.050	0.0809		879
02/05/2019	03/27/2019	05/24/2019	12,268,702.801	0.1097		1,346






Total dividends declared for the six months ended March 31, 2019								$	6,147

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Golub Capital BDC 3, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

(In thousands, except shares and per share data)

The following table summarizes the Company’s distributions reinvested during the six months ended March 31, 2020 and 2019:


Payment Date	DRIP Shares Issued	NAV ($) per share		DRIP Shares Value
For the six months ended March 31, 2020
November 26, 2019	185,724.541	$	15.00	$	2,786
December 27, 2019	173,246.102	15.00		2,599
February 26, 2020	170,062.979	15.00		2,551
	529,033.622	$	15.00	$	7,936


For the six months ended March 31, 2019
November 27, 2018	49,178.285	$	15.00	$	738
December 28, 2018	53,153.132	15.00		797
February 27, 2019	64,472.390	15.00		967



	166,803.807	$	15.00	$	2,502

Note 13. Subsequent Events

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date of issuance. There are no subsequent events to disclose except for the following:

On April 1, 2020, the Company entered into subscription agreements with additional stockholders totaling $98,641 in the aggregate. Subsequent to April 1, 2020, the Company reached agreements to cancel undrawn subscriptions totaling $2,544 in the aggregate, of which $2,180 were subscription agreements entered into on April 1, 2020.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section should be read in conjunction with our interim and unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, “we,” “us,” “our” and “GBDC 3” refer to Golub Capital BDC 3, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:

•our future operating results;

•our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives as a result of the coronavirus (“COVID-19”) pandemic;

•the effect of investments that we expect to make and the competition for those investments;

•our contractual arrangements and relationships with third parties;

•completion of a public offering of our securities or other liquidity event;

•actual and potential conflicts of interest with GC Advisors LLC, or GC Advisors, and other affiliates of Golub Capital LLC, or collectively, Golub Capital;

•the dependence of our future success on the general economy and its effect on the industries in which we invest;

•the ability of our portfolio companies to achieve their objectives;

•the use of borrowed money to finance a portion of our investments and the effect of the COVID-19 pandemic on the availability of equity and debt capital and our use of borrowed funds to finance a portion of our investments;

•the adequacy of our financing sources and working capital;

•the timing of cash flows, if any, from the operations of our portfolio companies;

•general economic and political trends and other external factors, including the COVID-19 pandemic;

•changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets that could result in changes to the value of our assets, including changes from the impact of the COVID-19 pandemic;

•the ability of GC Advisors to locate suitable investments for us and to monitor and administer our investments;

•the ability of GC Advisors or its affiliates to attract and retain highly talented professionals;

•the ability of GC Advisors to continue to effectively manage our business due to the disruptions caused by the COVID-19 pandemic;

•our ability to qualify and maintain our qualification as a regulated investment company, or RIC, and as a business development company;

•general price and volume fluctuations in the stock markets;

•the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank, and the rules and regulations issued thereunder and any actions toward repeal thereof; and

•the effect of changes to tax legislation and our tax position.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth as “Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2019.

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We have based the forward-looking statements included in this report on information available to us on the date of this report. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that we make directly to you or through reports that we have filed or in the future file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. This quarterly report on Form 10-Q contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.

Overview

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a business development company and a RIC, we are also subject to certain constraints, including limitations imposed by the 1940 Act and the Code. We were formed in August 2017 and commenced operations on October 2, 2017.

Our investment objective is to generate current income and capital appreciation by investing primarily in one stop (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies. We also selectively invest in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, middle-market companies. We intend to achieve our investment objective by (1) accessing the established loan origination channels developed by Golub Capital, a leading lender to U.S. middle-market companies with over $30.0 billion in capital under management as of March 31, 2020, (2) selecting investments within our core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, in many cases with whom Golub Capital has invested alongside in the past, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital.

Our investment activities are managed by GC Advisors and supervised by our board of directors of which a majority of the members are independent of us, GC Advisors and its affiliates.

Under an investment advisory agreement, or the Investment Advisory Agreement, which was most recently reapproved by our board of directors in May 2020, we have agreed to pay GC Advisors an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. Under an administration agreement, or the Administration Agreement, we are provided with certain administrative services by an administrator, or the Administrator, which is currently Golub Capital LLC. Under the Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement.

We seek to create a portfolio that includes primarily one stop and other senior secured loans by primarily investing approximately $5.0 million to $30.0 million of capital, on average, in the securities of U.S. middle-market companies. We also selectively invest more than $30.0 million in some of our portfolio companies and generally expect that the size of our individual investments will vary 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, which are often referred to as “junk,” have predominantly 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, which may increase our risk of losing part or all of our investment.

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As of March 31, 2020 and September 30, 2019, our portfolio at fair value was comprised of the following:


	As of March 31, 2020						As of September 30, 2019
Investment Type	Investments at Fair Value (In thousands)		Percentage of Total Investments		Investments at Fair Value (In thousands)		Percentage of Total Investments
Senior secured	$	131,511	16.5	%	$	96,765	15.7	%
One stop	655,409		82.1		509,530		82.6
Second lien	4,140		0.5		3,898		0.6
Subordinated debt	38		—	*	2		—	*
Equity	7,343		0.9		6,794		1.1
Total	$	798,441	100.0	%	$	616,989	100.0	%

*Represents an amount less than 0.1%

One stop loans include loans to technology companies undergoing strong growth due to new services, increased adoption and/or entry into new markets. We refer to loans to these companies as late stage lending loans. Other targeted characteristics of late stage lending businesses include strong customer revenue retention rates, a diversified customer base and backing from growth equity or venture capital firms. In some cases, the borrower’s high revenue growth is supported by a high level of discretionary spending. As part of the underwriting of such loans and consistent with industry practice, we adjust our characterization of the earnings of such borrowers for a reduction or elimination of such discretionary expenses, if appropriate. As of March 31, 2020 and September 30, 2019, one stop loans included $151.9 million and $110.0 million, respectively, of late stage lending loans at fair value.

As of March 31, 2020 and September 30, 2019, we had debt and equity investments in 144 and 118 portfolio companies, respectively. The following table shows the weighted average annualized income yield and weighted average annualized investment income yield of our earning portfolio company investments, which represented 100% of our debt investments, as well as the total return based on our average net asset value and the total return based on the change in the net asset value of our stock and assuming distributions were reinvested in accordance with our dividend reinvestment plan, or DRIP, in each case for the three and six months ended March 31, 2020 and 2019:


	For the three months ended March 31,			For the six months ended March 31,
	2020	2019	2020	2019
Weighted average annualized income yield⁽¹⁾	7.8%	8.6%	8.3%	8.6%
Weighted average annualized investment income yield⁽²⁾	8.3%	9.0%	8.3%	9.1%
Total return based on average net asset value^(3)*	(34.7)%	8.5%	(14.1)%	8.7%
Total return based on net asset value per share⁽⁴⁾	(7.9)%	2.1%	(6.5)%	4.2%

* Annualized for periods of less than one year.

⁽¹⁾Represents income from interest and fees, excluding amortization of capitalized fees and discounts divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.

⁽²⁾Represents income from interest, fees and amortization of capitalized fees and discounts, divided by the average fair value of earning portfolio company investments, and does not represent a return to any investor in us.

⁽³⁾Total return based on average net asset value is calculated as (a) the net increase in net assets resulting from operations divided by (b) the daily average of total net assets. Total return does not include sales load.

⁽⁴⁾Total return based on net asset value assumes distributions are reinvested in accordance with the DRIP. Total return does not include sales load.

As of March 31, 2020, GBDC 3 has earned an inception-to-date internal rate of return, or IRR, of (1.0%) for stockholders taken as a whole. For the six months ended March 31, 2020, GBDC 3 earned a fiscal year-to-date IRR of (13.7%) for stockholders taken as a whole. For the six months ended March 31, 2019, GBDC3 earned a fiscal year-to-date IRR of 11.5% for stockholders taken as a whole. An individual stockholder’s IRR may vary based on the timing of their capital transactions. The IRR is the annualized effective compound rate of return that brings a series of cash flows to the current value of the cash invested. The IRR was computed based on the actual dates of

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cash inflows (share issuances, including share issuances through the DRIP), outflows (capital distributions), the stockholders' net asset value, or NAV, at the end of the period and distributions declared and payable at the end of the period (residual value of the stockholders’ NAV and distributions payable as of each measurement date).

Revenues: We generate revenue in the form of interest and fee income on debt investments and capital gains and distributions, if any, on portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior secured, one stop, second lien or subordinated loans, typically have a term of three to seven years and bear interest at a fixed or floating rate. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments provide for deferred interest payments or payment-in-kind, or PIK, interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. In addition, we generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. For additional details on revenues, see “Critical Accounting Policies - Revenue Recognition.”

We recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment or derivative instrument, without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments or derivative instruments that are measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investment transactions in the Consolidated Statements of Operations.

Expenses: Our primary operating expenses include the payment of fees to GC Advisors under the Investment Advisory Agreement and interest expense on our outstanding debt. We bear all other out-of-pocket costs and expenses of our operations and transactions, including:

•reimbursement to GC Advisors of organizational and offering expenses up to an aggregate amount of $0.7 million;

•calculating our NAV (including the cost and expenses of any independent valuation firm);

•fees and expenses incurred by GC Advisors payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments, which fees and expenses include, among other items, due diligence reports, appraisal reports, any studies commissioned by GC Advisors and travel and lodging expenses;

•expenses related to unsuccessful portfolio acquisition efforts;

•administration fees and expenses, if any, payable under the Administration Agreement (including payments based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);

•fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments in portfolio companies, including costs associated with meeting financial sponsors;

•transfer agent, dividend agent and custodial fees and expenses;

•U.S. federal and state registration and franchise fees;

•U.S. federal, state and local taxes;

•independent directors’ fees and expenses;

•costs of preparing and filing reports or other documents required by the SEC or other regulators;

•costs of any reports, proxy statements or other notices to stockholders, including printing costs;

•costs associated with individual or group stockholders;

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•costs associated with compliance under the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act;

•our allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;

•direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;

•proxy voting expenses; and

•all other expenses incurred by us or the Administrator in connection with administering our business.

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.

COVID-19 Pandemic

The rapid spread of COVID-19, which has been identified as a global pandemic by the World Health Organization, resulted in governmental authorities imposing restrictions on travel and the temporary closure of many corporate offices, retail stores, restaurants, fitness clubs and manufacturing facilities and factories in affected jurisdictions. The pandemic and the resulting economic dislocations have had adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of GC Advisors (including those relating to us). GC Advisors has been monitoring the COVID-19 pandemic and its impact on our business and the business of our portfolio companies and has been focused on proactively engaging with our portfolio companies in order to collaborate with the management teams of certain portfolio companies to assess and evaluate the steps each portfolio company can take in response to the impacts of COVID-19.

We cannot predict the full impact of the coronavirus, including the duration of the closures and restrictions described above. As a result, we are unable to predict the duration of these business and supply-chain disruptions, the extent to which COVID-19 will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition. Depending on the duration and extent of the disruption to the business operations of our portfolio companies, we expect some portfolio companies, particularly those in vulnerable industries such as retail and travel, to experience financial distress and possibly to default on their financial obligations to us and their other capital providers. In addition, if such portfolio companies are subjected to prolonged and severe financial distress, we expect some of them to substantially curtail their operations, defer capital expenditures and lay off workers. These developments would be likely to permanently impair their businesses and result in a reduction in the value of our investments in them.

Business disruption and financial distress experienced by our portfolio companies is likely to reduce, over time, the amount of interest and dividend income that we receive from our investments and may require us to contribute additional capital to such companies in the form of follow on investments. We may need to restructure the capitalization of some portfolio companies, which could result in reduced interest payments or permanent impairments on our investments. Any such decrease in our net investment income would increase the percentage of our cash flows dedicated to debt service and distribution payments to stockholders. If these amounts become unsustainable, we may be required to reduce the amount of our future distributions to stockholders. We proactively and aggressively commenced on a number of actions to support and evaluate our portfolio companies when the COVID-19 pandemic began to impact the U.S. economy including: gathering full information from a variety of sources including third-party experts, management teams of our borrowers, the private equity sponsor owners of our borrowers and other sources; and immediate outreach to our private equity sponsor partners to establish candid, two-way, real-time communications; We believe these actions will lead to increased and better solutions for our borrowers and believe our long-term relationships with these sponsors will create appropriate incentives for them to collaborate with us to address such portfolio company needs; In addition GC Advisors' and, 3) our underwriting team is segmenting our portfolio to highlight those borrowers with moderate or higher risk of material impacts to their business operations from COVID-19; y segmenting our portfolio we believe we can focus now on the borrowers which are more likely to require attention. We believe that early identification of vulnerable credits means more and better solutions to address potential problems. During the three months ended March 31, 2020, we amended the terms of six credit agreements for six borrowers to defer their March 31, 2020 principal payment and/or capitalize their March 31, 2020 interest payment.

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As of March 31, 2020, subject to certain limited exceptions, we were allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. Our revolving credit facilities, described in Note 8 in the notes to our consolidated financial statements, include customary covenants and events of default. Any failure on our part to make required payments under such facilities or to comply with such covenants could result in a default under the applicable credit facility or debt instrument. If we are unable to cure such default or obtain a waiver from the applicable lender or holder, we would experience an event of default, and the applicable lender or holder could accelerate the repayment of such indebtedness, which would negatively affect our business, financial condition, results of operations and cash flows. See “Item 1A.—Risk Factors—Risks Relating to our Business and Structure—We intend to finance our investments with borrowed money, which will accelerate and increase the potential for gain or loss on amounts invested and may increase the risk of investing in us” included in our most recent annual report on Form 10-K.

We are also subject to financial risks, including changes in market interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future will also have floating interest rates. The interest rates of such loans are based upon a floating interest rate index, typically LIBOR, together with a spread, or margin. They generally also feature interest rate reset provisions that adjust the interest rates under such loans to current market rates on a quarterly basis. As of March 31, 2020, and December 31, 2019 over 80% of our floating rate loans were subject to a minimum base rate, or floor, that we charge on our loans if the applicable interest rate index falls below such floor. In addition, our revolving credit facilities also have floating rate interest provisions. As a result of the COVID-19 pandemic and the related decision of the U.S. Federal Reserve to reduce certain interest rates, LIBOR decreased in March 2020. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on such loans, a decrease in the income incentive fee or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR. See “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for an analysis of the impact of hypothetical base rate changes in interest rates.

We have completed an industry subsegment analysis as of March 31, 2020 to determine the exposure of our portfolio companies to adverse effects on their business operations as a result of the COVID-19 pandemic. As of March, 31, 2020, more than 85% of our portfolio at fair value was comprised of investments in industry subsegments that we have identified as less exposed to negative impacts from the COVID-19 pandemic, less than 20% of our portfolio at fair value was comprised of investments in industry subsegments that we believe will experience significant financial distress as a result of the COVID-19 pandemic and less than 1% of our portfolio at fair value was comprised of investments in industry subsegments that were identified as most significantly exposed to adverse effects resulting from the COVID-19 pandemic. As of March 31, 2020, less than 1% of our portfolio at fair value represented second lien debt, mezzanine debt and other asset classes that we believe are particularly vulnerable due to the economic and market volatility and uncertainty resulting from the COVID-19 pandemic. Our portfolio by industry subsegments and our view of the exposure of our portfolio companies to the adverse effects of the COVID-19 pandemic as of March 31, 2020 is as follows:

Industry Subsegments¹

Less exposed to COVID-19

(>85% of portfolio²)

Significantly exposed to COVID-19 exposure

(<15% of portfolio²)

Most significantly exposed to COVID-19

(<1% of portfolio²)

Software & Technology

Restaurants

Airlines & Aircraft Finance

Business Services

Dental Care

Boating & Marine

Healthcare²

Eye Care

Entertainment

Aerospace & Defense

Fitness Franchises

Gaming

Distribution

Retail

Hotels

Financial Services

Metal & Mining

Food & Beverage

Oil & Gas

Manufacturing

Project Finance

Education

Real Estate

Shipping

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⁽¹⁾Industry subsegments are based on GC Advisors' internal analysis and industry classifications as of March 31, 2020.

⁽²⁾At fair value as of March 31, 2020.

⁽³⁾Excludes Dental Care and Eye Care subsegments..

The table below details the impact of effects of the COVID-19 pandemic on the weighted average price of our debt investments and the net change in unrealized depreciation on investments held as of March 31, 2020 by Internal Performance Rating (as defined in the "Portfolio Composition, Investment Activity and Yield" section below). Additionally, the following table details the primary drivers of reductions in weighted average price of our debt investments by Internal Performance Rating category as of March 31, 2020 as compared to December 31, 2019.


	Weighted Average Price¹
Category	As of December 31, 2019		As of March 31, 2020		Net Change in Unrealized Depreciation on Investments Held as of March 31, 2020 per Share ⁽²⁾⁽³⁾			% of Net Change in Unrealized Depreciation on Investments Held as of March 31, 2020 ⁽²⁾		Primary Driver
Internal Performance Ratings 4 and 5 (Performing At or Above Expectations)	$	99.8	$	95.7	$	(1.10)		67	%	Spread widening
Internal Performance Rating 3 (Performing Below Expectations)	95.9		91.2		(0.54)			33	%	Spread widening, COVID-19 exposure
Internal Performance Ratings 1 and 2 (Performing Materially Below Expectations)	N/A		N/A		—		*	—	*	N/A
Total	$	99.7	$	94.7	$	(1.64)		100	%

* Represents an amount less $0.01 per share or less than 1.0%.

⁽¹⁾Includes debt investments only. "Total" row reflects weighted average price of total fair value of debt investments.

⁽²⁾Net Change in Unrealized Depreciation on Investments Held as of March 31, 2020 includes the net change in unrealized depreciation for the three months ended

March 31, 2020 attributable to investments held as of March 31, 2020.

⁽³⁾Based on weighted average shares outstanding for the three months ended March 31, 2020.

We and GC Advisors will continue to monitor the rapidly evolving situation relating to the COVID-19 pandemic and guidance from U.S. and international authorities, including federal, state and local public health authorities future recommendations from such authorities may further impact our business operations and financial results. In these circumstances, there may be developments outside our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 pandemic on our financial condition, results of operations or cash flows in future periods.

Recent Developments

On April 1, 2020, we entered into subscription agreements with additional stockholders totaling $98.6 million in the aggregate. Additionally, we subsequently entered into cancellation agreements to cancel undrawn subscriptions totaling $2.5 million in the aggregate, of which $2.2 million were subscription agreements entered into on April 1, 2020.

Subsequent to March 31, 2020, the COVID-19 pandemic and the related effect on the U.S. and global economies has continued to have adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of GC Advisors (including with respect to us). Given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows in the future. However, to the extent our portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on our future net investment income, the fair value of our portfolio investments, and the results of operations and financial condition of our portfolio companies.

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Consolidated Results of Operations

Consolidated operating results for the three and six months ended March 31, 2020 and 2019 are as follows:


	For the three months ended March 31,						Variances		For the six months ended March 31,				Variances
	2020		2019		2020 vs. 2019		2020		2019		2020 vs. 2019
	(In thousands)										(In thousands)
Interest income	$	15,448	$	5,776	$	9,672	$	29,260	$	9,845	$	19,415
Income from accretion of discounts and origination fees	973		257		716		1,672		483		1,189
Dividend income	2		—		2		4		—		4
Fee income	132		18		114		181		83		98
Total investment income	16,555		6,051		10,504		31,117		10,411		20,706
Net expenses	6,780		3,121		3,659		14,289		5,396		8,893
Net investment income	9,775		2,930		6,845		16,828		5,015		11,813
Net realized gain (loss) on investment transactions	(2)		40		(42)		(13)		49		(62)
Net change in unrealized appreciation (depreciation) on investment transactions	(48,321)		506		(48,827)		(46,238)		1,083		(47,321)
Net increase (decrease) in net assets resulting from operations	$	(38,548)	$	3,476	$	(42,024)	$	(29,423)	$	6,147	$	(35,570)
Average earning portfolio company investments, at fair value	$	801,775	$	270,585	$	531,190	$	746,100	$	229,112	$	516,988

Net income (loss) can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income (loss) may not be meaningful. In addition, as we have continued to raise and deploy capital, we have experienced significant growth in total assets, total liabilities and net assets from March 31, 2019 to March 31, 2020. As a result, quarterly comparisons of operating results may not be meaningful.

Investment Income

Investment income increased from the three and six months ended March 31, 2019 to the three and six months ended March 31, 2020 by $10.5 million and $20.7 million, respectively, primarily as a result of an increase in the average earning debt investments balance, which is the annual average balance of accruing loans in our debt investment portfolio, of $531.2 million and $517.0 million, respectively.

The annualized income yield by debt security type for the three and six months ended March 31, 2020 and 2019 was as follows:


	For the three months ended March 31,			For the six months ended March 31,
	2020	2019	2020	2019
Senior secured	6.5%	7.4%	6.6%	7.3%
One stop	7.9%	8.9%	8.1%	8.9%
Second lien	12.1%	N/A	12.2%	N/A
Subordinated debt⁽¹⁾⁽²⁾	4.2%	8.0%	4.3%	8.0%

⁽¹⁾Represents two portfolio company investments for the three and six months ended March 31, 2020.

⁽²⁾Represents one portfolio company investment for the three and six months ended March 31, 2019.

Due to the significant growth in the portfolio from the three and six months ended March 31, 2019 to the three and six months ended March 31, 2020, changes in investment yields may not be indicative of market conditions and as a result, quarterly comparisons may not be meaningful.

For additional details on investment yields and asset mix, refer to the “Liquidity and Capital Resources - Portfolio Composition, Investment Activity and Yield” section below.

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Expenses

The following table summarizes our expenses for the three and six months ended March 31, 2020 and 2019:


	For the three months ended March 31,						Variances		For the six months ended March 31,				Variances
	2020		2019		2020 vs. 2019		2020		2019		2020 vs. 2019
	(In thousands)										(In thousands)
Interest and facility fee expenses	$	3,343	$	1,149	$	2,194	$	6,640	$	2,000	$	4,640
Amortization of debt issuance costs	292		362		(70)		497		532		(35)
Base management fee, net of waiver	2,034		674		1,360		3,777		1,144		2,633
Income incentive fee, net of waiver	1,536		503		1,033		2,853		890		1,963
Capital gain incentive fee accrued under GAAP, net of waiver	(1,071)		68		(1,139)		(663)		180		(843)
Professional fees	267		230		37		516		418		98
Administrative service fee	302		106		196		577		176		401
General and administrative expenses	77		29		48		92		56		36
Net expenses	$	6,780	$	3,121	$	3,659	$	14,289	$	5,396	$	8,893
Average debt outstanding	$	375,941	$	112,546	$	263,395	$	349,295	$	97,588	$	251,707

Interest Expense

Interest and facility fee expenses increased by $2.2 million and $4.6 million, respectively, from the three and six months ended March 31, 2019 to the three and six months ended March 31, 2020 primarily due to an increase in the weighted average of outstanding borrowings of $263.4 million and $251.7 million, respectively. The effective annualized average interest rate on our outstanding debt decreased from 5.4% and 5.2% for the three and six months ended March 31, 2019 to 3.9% and 4.9% for the three and six months ended March 31, 2020, primarily due to a lower average LIBOR during the three and six months ended March 31, 2020 as compared to the three and six months ended March 31, 2019. For more information about our outstanding borrowings for the three and six months ended March 31, 2020 and 2019, including the terms thereof, see Note 8. Borrowings in the notes to our consolidated financial statements and the "Liquidity and Capital Resources" section below.

Management Fees

The base management fee increased as a result of a sequential increase in average assets from the three and six months ended March 31, 2019 to the three and six months ended March 31, 2020.

Incentive Fees

The incentive fee payable under the Investment Advisory Agreement consists of two parts: (1) the income component, or the Income Incentive Fee, and (2) the capital gains component, or the Capital Gain Incentive Fee. The Income Incentive Fee increased by $1.0 million and $2.0 million, respectively, from the three and six months ended March 31, 2019 to the three and six months ended March 31, 2020, primarily as a result of the increase in our average earning debt investment balances that resulted in an increase in our Pre-Incentive Fee Net Investment Income (as defined in Note 4 to our consolidated financial statements). For the three and six months ended March 31, 2020 and 2019, the Income Incentive Fee calculation and the Income Incentive Fee earned by GC Advisors as a percentage of Pre-Incentive Fee Net Investment Income, net of waiver, was the maximum 15.0%.

We recorded a reversal for the capital gain incentive fee under GAAP, net of waiver, of $1.1 million and $0.8 million, respectively, for the three and six months ended March 31, 2020. The reversal was primarily due to an increase in unrealized depreciation in the fair value of some of our portfolio company investments due to the

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immediate adverse economic effects of the COVID-19 pandemic, the continuing uncertainty surrounding its long-term impact and increases in the spread between yields realized on risk-free and higher risk securities. We recorded an accrual for the capital gain incentive fee under GAAP, net of waiver, of $0.1 million and $0.2 million, respectively, for the three and six months ended March 31, 2019. In accordance with GAAP, we are required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gain incentive fee as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. The cumulative capital gain incentive fee accrual calculated in accordance with GAAP as of March 31, 2020 and September 30, 2019 was $0 and $0.7 million, respectively, none of which was payable as a Capital Gain Incentive Fee pursuant to the Investment Advisory Agreement. The capital gain incentive fee accrual under GAAP at September 30, 2019 was primarily due to unrealized appreciation in the investment portfolio. For additional details on unrealized appreciation and depreciation of investments, refer to the “Net Realized and Unrealized Gains and Losses” see section below.

Professional Fees, Administrative Service Fees, and General and Administrative Expenses

In total, professional fees, the administrative service fee, and general and administrative expenses increased by $0.3 million and $0.5 million, respectively, from the three and six months ended March 31, 2019 to the three and six months ended March 31, 2020. These increases are associated with increased costs to service a growing portfolio. In general, we expect certain of our operating expenses, including professional fees, the administrative service fee, and other general and administrative expenses to decline as a percentage of our total assets during periods of growth and increase as a percentage of our total assets during periods of asset declines.

The Administrator pays for certain expenses incurred by us. These expenses are subsequently reimbursed in cash. Total expenses reimbursed by us to the Administrator for the three and six months ended March 31, 2020 were $0.2 million and $0.4 million, respectively. Total expenses reimbursed by us to the Administrator for the three and six months ended March 31, 2019 were $0.2 million and $0.3 million, respectively.

As of March 31, 2020 and September 30, 2019, included in accounts payable and accrued expenses were $0.1 million and $0.2 million, respectively, for accrued expenses paid on behalf of us by the Administrator.

Net Realized and Unrealized Gains and Losses

The following table summarizes our net realized and unrealized gains (losses) for the three and six months ended March 31, 2020 and 2019:


	For the three months ended March 31,						Variances		For the six months ended March 31,				Variances
	2020		2019		2020 vs. 2019		2020		2019		2020 vs. 2019
	(In thousands)										(In thousands)
Net realized gain (loss) from investments	$	(1)	$	(1)	$	—	$	—	$	1	$	(1)
Net realized gain (loss) from foreign currency transactions	(1)		41		(42)		(13)		48		(61)
Net realized gain (loss) on investment transactions	(2)		40		(42)		(13)		49		(62)
Unrealized appreciation from investments	$	46	$	1,299	$	(1,253)	$	466	$	2,348	$	(1,882)
Unrealized (depreciation) from investments	(49,367)		(783)		(48,584)		(47,216)		(1,265)		(45,951)
Unrealized appreciation from forward currency contracts	778		—		778		479		—		479
Unrealized appreciation (depreciation) on foreign currency translation	222		(10)		232		33		—		33


Net change in unrealized appreciation (depreciation) on investment transactions	$	(48,321)	$	506	$	(48,827)	$	(46,238)	$	1,083	$	(47,321)

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For each of the three and six months ended March 31, 2020, we had net realized losses on investments and foreign currency transactions of less than $0.1 million, primarily due to realized losses on foreign currency transactions. For each of the three and six months ended March 31, 2019, we had a net realized gain on investments and foreign currency transactions of less than $0.1 million primarily due to realized gains on foreign currency transactions.

For the three and six months ended March 31, 2020, we had less than $0.1 million and $0.5 million, respectively, in unrealized appreciation on five and seven portfolio company investments, respectively, which was offset by $49.4 million and $47.2 million, respectively, in unrealized depreciation on 142 and 140 portfolio company investments, respectively. Unrealized depreciation for the three and six months ended March 31, 2020 primarily resulted from decreases in the fair value in the majority of our portfolio company investments due to the immediate adverse economic effects of the COVID-19 pandemic, the continuing uncertainty surrounding its long-term impact and increases in the spread between the yields realized on risk-free and higher risk securities.

For the three and six months ended March 31, 2019, we had $1.3 million and $2.3 million in unrealized appreciation on 45 and 58 portfolio company investments, respectively, which was partially offset by $0.8 million and $1.3 million unrealized depreciation on 61 and 53 portfolio company investments, respectively. Unrealized appreciation during the three and six months ended March 31, 2019 resulted from an increase in fair value primarily due to the rise in market prices of portfolio company investments. Unrealized depreciation primarily resulted from the amortization of discounts and negative credit related adjustments that caused a reduction in fair value of portfolio company investments during the three and six months ended March 31, 2019.

For the three and six months ended March 31, 2020, we recognized unrealized appreciation on forward currency contracts of $0.8 million and $0.5 million, respectively, which was comprised of favorable movements in currency rates for three open forward currency contracts. See Note 6 in the notes to the consolidated financial statements for details of open positions on forward currency contracts.

Liquidity and Capital Resources

For the six months ended March 31, 2020, we experienced a net increase in cash and cash equivalents, foreign currencies and restricted cash and cash equivalents of $16.5 million. During the period we used $209.5 million in operating activities, primarily as a result of fundings of portfolio investments of $300.3 million, partially offset by proceeds from principal payments and sales of portfolio investments of $79.6 million. During the same period, cash provided by financing activities was $226.1 million, primarily driven by borrowings on debt of $491.1 million, proceeds from short-term borrowings of $21.3 million and proceeds from the issuance of common stock of $141.1 million that were partially offset by repayments of debt of $378.8 million, repayments on short-term borrowings of $37.7 million and distributions paid of $10.2 million.

For the six months ended March 31, 2019, we experienced a net increase in cash, cash equivalents and foreign currencies of $26.1 million. During the period we used $147.5 million in operating activities, primarily as a result of fundings of portfolio investments of $161.6 million. During the same period, cash provided by financing activities was $173.6 million, primarily driven by borrowings on debt of $228.4 million, proceeds from short-term borrowings of $7.6 million and proceeds from the issuance of common shares of $94.3 million that were offset by repayments of debt of $150.0 million, repayments on short-term borrowings of $7.6 million and distributions paid of $3.0 million.

As of March 31, 2020 and September 30, 2019, we had cash and cash equivalents of $22.5 million and $2.4 million, respectively. In addition, as of March 31, 2020 and September 30, 2019, we had foreign currencies of $0.4 million and $0.1 million , respectively, restricted cash and cash equivalents of $12.2 million and $17.4 million, respectively, and restricted foreign currencies of $1.3 million and $0, respectively. Cash and cash equivalents and foreign currencies are available to fund new investments, pay operating expenses and pay distributions. Restricted cash and cash equivalents and restricted foreign currencies can be used to pay principal and interest on and to fund new investments that meet the guidelines under our credit facilities, as applicable.

As of March 31, 2020 and September 30, 2019, we had investor capital subscriptions totaling $809.2 million and $527.5 million, respectively, of which $479.9 million and $334.9 million, respectively, had been called and contributed, leaving $329.3 million and $192.6 million of uncalled investor capital subscriptions, respectively.

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This "Liquidity and Capital Resources" section should be read in conjunction with the "COVID-19 Pandemic" section above.

Revolving Credit Facilities

SB Revolver - On February 4, 2019, we entered into the SB Revolver (as defined in Note 8 of our consolidated financial statements) with Signature Bank, which initially allowed us to borrow up to $175.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. On April 8, 2019, we entered into an amendment which increased the borrowing capacity under the SB Revolver to $225.0 million. On February 7, 2020, we entered into an amendment which increased the borrowing capacity under the SB Revolver to $275.0 million and through April 7, 2020, increased the borrowing base against which we may borrow. As of March 31, 2020 and September 30, 2019, we had $232.3 million and $144.4 million outstanding, respectively, under the SB Revolver. As of March 31, 2020 and September 30, 2019, subject to leverage and borrowing base restrictions, we had approximately $42.7 million and $80.6 million of remaining commitments, respectively, and $31.1 million and $0 of availability on the SB Revolver.

DB Credit Facility - On September 10, 2019, we entered into the DB Credit Facility (as defined in Note 8 of our consolidated financial statements). As of March 31, 2020 and September 30, 2019, the DB Credit Facility allowed GBDC 3 Funding LLC, or GBDC 3 Funding, to borrow up to $250.0 million at any one time outstanding, subject to leverage and borrowing base restrictions. As of March 31, 2020 and September 30, 2019, we had $150.6 million and $122.7 million outstanding under the DB Credit Facility, respectively. As of March 31, 2020 and September 30, 2019, subject to leverage and borrowing base restrictions, we had approximately $99.4 million and $127.3 million of remaining commitments, respectively, $98.0 million and less than $1.0 million of availability on the DB Credit Facility, respectively.

Adviser Revolver - As of March 31, 2020 and September 30, 2019, we were permitted to borrow up to $40.0 million and $125.0 million, respectively, at any one time outstanding under the Adviser Revolver (as defined in Note 8 of our consolidated financial statements). As of March 31, 2020 and September 30, 2019, we had $0 and $3.5 million, respectively, outstanding under the Adviser Revolver. On October 28, 2019, we entered into an amendment to the Adviser Revolver, which decreased the borrowing capacity from $125.0 million to $40.0 million.

In accordance with the 1940 Act, with certain limited exceptions, we are currently allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 200% after such borrowing. We have not sought or obtained approval to reduce our asset coverage ratio as permitted by and subject to the requirements of Section 61(a)(2) of the 1940 Act and, as a result, remain subject to the 200% asset coverage requirement under Section 61(a)(1) of the 1940 Act. As of March 31, 2020, our asset coverage for borrowed amounts was 217.3%.

As of March 31, 2020, we had outstanding commitments to fund investments totaling $138.2 million, including $4.6 million of commitments on undrawn revolvers. As of September 30, 2019, we had outstanding commitments to fund investments totaling $107.2 million. There is no guarantee that these amounts will be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers as of March 31, 2020 and September 30, 2019, respectively, subject to the terms of each loan’s respective credit agreement. As of March 31, 2020, we believe that we had sufficient assets and liquidity to adequately cover future obligations under our unfunded commitments based on historical rates of drawings upon unfunded commitments and cash balances that we maintain, availability under our SB Revolver, DB Credit Facility and Adviser Revolver, ongoing principal repayments on debt investments assets and uncalled investor capital subscriptions.

Although we expect to fund the growth of our investment portfolio through net proceeds from capital calls on existing and future investor capital subscriptions and through our dividend reinvestment plan as well as future borrowings, to the extent permitted by the 1940 Act, we cannot assure you that our efforts to raise capital will be successful. In addition, we can amend, refinance, or enter into new leverage facilities. In addition to capital not being available, it also could not be available on favorable terms. To the extent we are not able to raise capital on what we believe are favorable terms, we will focus on optimizing returns by investing capital generated from repayments into new investments we believe are attractive from a risk/reward perspective. Furthermore, to the extent we are not able

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to raise capital and are at or near our targeted leverage ratios, we expect to receive smaller allocations, if any, on new investment opportunities under GC Advisors’ allocation policy.

Portfolio Composition, Investment Activity and Yield

As of March 31, 2020 and September 30, 2019, we had investments in 144 and 118 portfolio companies, respectively, with a total fair value of $798.4 million and $617.0 million, respectively.

The following table shows the asset mix of our new investment commitments for the three and six months ended March 31, 2020 and 2019:


	For the three months ended March 31,														For the six months ended March 31,
	2020						2019						2020				2019
	New Commitments		Percentage of Commitments		New Commitments		Percentage of Commitments		New Commitments		Percentage of Commitments		New Commitments		Percentage of Commitments
Senior secured	$	28,884	21.6	%	$	8,210	14.8	%	$	59,896	17.0	%	$	39,605	22.3	%
One stop	104,142		78.1		47,100		85.2		290,539		82.5		135,568		76.4
Subordinated debt	20		0.0^*		10		0.0^*		55		0.0^*		10		0.0^*
Equity	369		0.3		9		0.0^*		1,565		0.5		2,270		1.3
Total new investment commitments	$	133,415	100.0	%	$	55,329	100.0	%	$	352,055	100.0	%	$	177,453	100.0	%

* Represents an amount less than 0.1%

For the three and six months ended March 31, 2020, we had approximately $58.0 million and $79.6 million, respectively, in proceeds from principal payments, return of capital distributions of portfolio companies and sales of equity investments in portfolio companies. For the three and six months ended March 31, 2019, we had approximately $6.7 million and $9.7 million, respectively, in proceeds from principal payments, return of capital distributions of portfolio companies and sales of equity investments in portfolio companies.

The following table shows the principal, amortized cost and fair value of our portfolio of investments by asset class:


	As of March 31, 2020⁽¹⁾											As of September 30, 2019⁽²⁾
	Principal		Amortized Cost		Fair Value		Principal		Amortized Cost			Fair Value
	(In thousands)											(In thousands)
Senior secured:
Performing	$	140,790	$	139,075	$	131,511	$	97,133	$	95,943		$	96,765
Non-accrual⁽³⁾	—		—		—		—		—			—
One stop:
Performing	697,501		688,353		655,409		511,850		505,134			509,530
Non-accrual⁽³⁾	—		—		—		—		—			—
Second lien:
Performing	4,140		4,061		4,140		3,898		3,811			3,898
Non-accrual⁽³⁾	—		—		—		—		—			—
Subordinated debt:
Performing	37		36		38		2		—		*	2
Non-accrual⁽³⁾	—		—		—		—		—			—
Equity	N/A		7,680		7,343		N/A		6,115			6,794
Total	$	842,468	$	839,205	$	798,441	$	612,883	$	611,003		$	616,989

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* Represents less than $1,000.

⁽¹⁾As of March 31, 2020, $35.2 million and $34.4 million of our loans at amortized cost and fair value, respectively, included a feature permitting a portion of interest due on such loan to be PIK interest.

⁽²⁾As of September 30, 2019, $40.0 million and $40.6 million of our loans at amortized cost and fair value, respectively, included a feature permitting a portion of interest due on such loan to be PIK interest.

⁽³⁾We refer to a loan as non-accrual when we cease recognizing interest income on the loan because we have stopped pursuing repayment of the loan or, in certain circumstances, it is past due 90 days or more on principal and interest or our management has reasonable doubt that principal or interest will be collected. See “— Critical Accounting Policies — Revenue Recognition.” As of March 31, 2020 and September 30, 2019, there were no loans in our portfolio that were on non-accrual.

As of March 31, 2020 and September 30, 2019, the fair value of our debt investments as a percentage of the outstanding principal value was 93.9% and 99.6%, respectively.

The following table shows the weighted average rate, spread over LIBOR of floating rate and fees of investments originated for the three and six months ended March 31, 2020 and 2019:


	For the three months ended March 31,			For the six months ended March 31,
	2020	2019	2020	2019
Weighted average rate of new investment fundings	7.8%	8.6%	7.6%	7.9%
Weighted average spread over LIBOR of new floating rate investment fundings	5.2%	6.1%	5.3%	5.4%
Weighted average fees of new investment fundings	1.3%	1.4%	1.4%	1.4%

As of March 31, 2020 and September 30, 2019, 86.1% and 86.0%, respectively, of our debt portfolio at fair value and at amortized cost had interest rate floors that limit the minimum applicable interest rates on such loans.

As of March 31, 2020 and September 30, 2019, the portfolio median earnings before interest, taxes, depreciation and amortization, or EBITDA, for our portfolio companies was $34.2 million and $29.4 million, respectively. The portfolio median EBITDA is based on the most recently reported trailing twelve-month EBITDA received from the portfolio company.

As part of the monitoring process, GC Advisors regularly assesses the risk profile of each of our investments and rates each of them based on an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors’ internal performance ratings:

Internal Performance Ratings

Rating

Definition

Involves the least amount of risk in our portfolio. The borrower is performing above expectations, and the trends and risk factors are generally favorable.

Involves an acceptable level of risk that is similar to the risk at the time of origination. The borrower is generally performing as expected, and the risk factors are neutral to favorable.

Involves a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination. The borrower could be out of compliance with debt covenants; however, loan payments are generally not past due.

Involves a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments could be past due (but generally not more than 180 days past due).

Involves a borrower performing substantially below expectations and indicates that the loan’s risk has substantially increased since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 1 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we anticipate will be recovered.

Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

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For any investment rated 1, 2 or 3, GC Advisors will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions.

GC Advisors monitors and, when appropriate, changes the internal performance ratings assigned to each investment in our portfolio. In connection with our valuation process, GC Advisors and our board of directors review these internal performance ratings on a quarterly basis.

The following table shows the distribution of our investments on the 1 to 5 internal performance rating scale at fair value as of March 31, 2020 and September 30, 2019:


	As of March 31, 2020						As of September 30, 2019
Internal Performance Rating	Investments at Fair Value (In thousands)		Percentage of Total Investments		Investments at Fair Value (In thousands)		Percentage of Total Investments
5	$	15,237	1.9	%	$	1,949	0.3	%
4	615,877		77.1		605,050		98.1
3	167,247		20.9		9,990		1.6
2	80		—	*	—		—
1	—		—		—		—
Total	$	798,441	100.0	%	$	616,989	100.0	%

* Represents an amount less than 0.1%

Contractual Obligations and Off-Balance Sheet Arrangements

A summary of our significant contractual payment obligations as of March 31, 2020 is as follows:


	Payments Due by Period (In Thousands)
	Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More Than 5 Years
SB Revolver	$	232,284	$	232,284	$	—	$	—	$	—

DB Credit Facility	150,586		—		—		—		150,586

Unfunded commitments ⁽¹⁾	138,235		138,235		—		—		—
Total contractual obligations	$	521,105	$	370,519	$	—	$	—	$	150,586

⁽¹⁾Unfunded commitments represent unfunded commitments to fund investments as of March 31, 2020. There is no guarantee that these amounts will be funded to the borrowing party now or in the future. The unfunded commitments relate to loans with various maturity dates, but we are showing this amount in the less than one year category as this entire amount was eligible for funding to the borrowers as of March 31, 2020, subject to the terms of each loan’s respective credit agreement. The unfunded commitments amount does not include $109.4 million of commitments as of March 31, 2020 for GBDC 3 Senior Loan Fund LLC, which is described in Note 5 in the notes to our consolidated financial statements.

We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of March 31, 2020, we had outstanding commitments to fund investments totaling $138.2 million, including $4.6 million of commitments on undrawn revolvers.

We have certain contracts under which we have material future commitments. We have entered into the Investment Advisory Agreement with GC Advisors in accordance with the 1940 Act. Under the Investment Advisory Agreement, GC Advisors provides us with investment advisory and management services.

Under the Administration Agreement, the Administrator furnishes us with office facilities and equipment, provides us with clerical, bookkeeping and record keeping services at such facilities and provides us with other administrative services necessary to conduct our day-to-day operations. The Administrator also provides on our behalf managerial assistance to those portfolio companies to which we are required to offer to provide such assistance.

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If any of the contractual obligations discussed above is terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we receive under our Investment Advisory Agreement and our Administration Agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.

Distributions

We intend to make periodic distributions to our stockholders as determined by our board of directors. For additional information on distributions, see “Critical Accounting Policies - Income Taxes.”

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of our distributions from time to time. In addition, the asset coverage requirements applicable to us as a business development company under the 1940 Act could limit our ability to make distributions. If we do not distribute a certain percentage of our income annually, we will suffer adverse U.S. federal income tax consequences, including the possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations can differ from net investment income and realized gains recognized for financial reporting purposes. Differences are permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. For example, permanent differences in classification result from the treatment of distributions paid from short-term gains as ordinary income dividends for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

To the extent our taxable earnings fall below the total amount of our distributions for any tax year, a portion of those distributions could be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders could be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, our stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock unless a stockholder specifically “opts out” of our dividend reinvestment plan. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

•We entered into the Investment Advisory Agreement with GC Advisors. Each of Mr. Lawrence Golub, our chairman, and Mr. David Golub, our president and chief executive officer, is a manager of GC Advisors, and each of Messrs. Lawrence Golub and David Golub owns an indirect pecuniary interest in GC Advisors.

•Golub Capital LLC provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.

•We have entered into a license agreement with Golub Capital LLC, pursuant to which Golub Capital LLC has granted us a non-exclusive, royalty-free license to use the name “Golub Capital.”

•Under a staffing agreement, or the Staffing Agreement, Golub Capital LLC has agreed to provide GC Advisors with the resources necessary to fulfill its obligations under the Investment Advisory Agreement. The Staffing Agreement provides that Golub Capital LLC will make available to GC Advisors experienced investment professionals and provide access to the senior investment personnel of Golub Capital LLC for

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purposes of evaluating, negotiating, structuring, closing and monitoring our investments. The Staffing Agreement also includes a commitment that the members of GC Advisors’ investment committee will serve in such capacity. Services under the Staffing Agreement are provided on a direct cost reimbursement basis. We are not a party to the Staffing Agreement.

•We have entered into the Adviser Revolver with GC Advisors in order to have the ability to borrow funds on a short-term basis.

GC Advisors also sponsors or manages, and expects in the future to sponsor or manage, other investment funds, accounts or investment vehicles (together referred to as “accounts”) that have investment mandates that are similar, in whole and in part, with ours. For example, GC Advisors presently serves as the investment adviser to Golub Capital BDC, Inc., a publicly-traded business development company (Nasdaq: GBDC) which focuses on investing primarily in one stop and other senior secured loans of U.S. middle-market companies. In addition, our officers and directors serve in similar capacities for Golub Capital BDC, Inc. If GC Advisors and its affiliates determine that an investment is appropriate for us and for other such accounts, depending on the availability of such investment and other appropriate factors, and pursuant to GC Advisors’ allocation policy, GC Advisors or its affiliates could determine that we should invest side-by-side with one or more other accounts. We do not intend to make any investments if they are not permitted by applicable law and interpretive positions of the SEC and its staff, or if they are inconsistent with GC Advisors’ allocation procedures.

In addition, we have adopted a formal code of ethics that governs the conduct of our and GC Advisors’ officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the General Corporation Law of the State of Maryland.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

Fair Value Measurements

We value investments for which market quotations are readily available at their market quotations. However, a readily available market value is not expected to exist for many of the investments in our portfolio, and we value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process.

Valuation methods include comparisons of the portfolio companies to peer companies that are public, determination of the enterprise value of a portfolio company, discounted cash flow analysis and a market interest rate approach. The factors that are taken into account in fair value pricing investments include: available current market data, including relevant and applicable market trading and transaction comparables; applicable market yields and multiples; security covenants; call protection provisions; information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business; comparisons of financial ratios of peer companies that are public; comparable merger and acquisition transactions; and the principal market and enterprise values. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments can differ significantly from the values that would have been used had a readily available market value existed for such investments and differ materially from values that are ultimately received or settled.

Our board of directors is ultimately and solely responsible for determining, in good faith, the fair value of investments that are not publicly traded, whose market prices are not readily available on a quarterly basis or any other situation where portfolio investments require a fair value determination.

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With respect to investments for which market quotations are not readily available, our board of directors undertakes a multi-step valuation process each quarter, as described below:

Our quarterly valuation process begins with each portfolio company investment being initially valued by the investment professionals of GC Advisors responsible for credit monitoring. Preliminary valuation conclusions are then documented and discussed with our senior management and GC Advisors. The audit committee of our board of directors reviews these preliminary valuations. At least once annually, the valuation for each portfolio investment, subject to a de minimis threshold, is reviewed by an independent valuation firm. The board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith.

Determination of fair values involves subjective judgments and estimates. Under current accounting standards, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

We follow ASC Topic 820 for measuring fair value. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity. Our fair value analysis includes an analysis of the value of any unfunded loan commitments. Assets and liabilities are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the asset or liability as of the measurement date. The three levels are defined as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 3: Inputs include significant unobservable inputs for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or a liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the asset or liability. We assess the levels of assets and liabilities at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfers. There were no transfers among Level 1, 2 and 3 of the fair value hierarchy for assets and liabilities during the three and six months ended March 31, 2020 and 2019. The following section describes the valuation techniques used by us to measure different assets and liabilities at fair value and includes the level within the fair value hierarchy in which the assets and liabilities are categorized.

Valuation of Investments

Level 1 investments are valued using quoted market prices. Level 2 investments are valued using market consensus prices that are corroborated by observable market data and quoted market prices for similar assets and liabilities. Level 3 investments are valued at fair value as determined in good faith by our board of directors, based on input of management, the audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation at least once during a trailing twelve-month period under a valuation policy and a consistently applied valuation process. This valuation process is conducted at the end of each fiscal quarter, with approximately 25% (based on the number of portfolio companies) of our valuations of debt and equity investments without readily available market quotations subject to review by an independent valuation firm. As of March 31, 2020 and September 30, 2019, with the exception of money market funds included in cash and cash equivalents and restrictive cash and cash equivalents

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(Level 1 investments) and forward currency contracts (Level 2 investments), all investments were valued using Level 3 inputs of the fair value hierarchy.

When determining fair value of Level 3 debt and equity investments, we may take into account the following factors, where relevant: the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons to publicly traded securities, and changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made and other relevant factors. The primary method for determining enterprise value uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s EBITDA. A portfolio company’s EBITDA may include pro-forma adjustments for items such as acquisitions, divestitures, or expense reductions. The enterprise value analysis is performed to determine the value of equity investments and to determine if debt investments are credit impaired. If debt investments are credit impaired, we will use the enterprise value analysis or a liquidation basis analysis to determine fair value. For debt investments that are not determined to be credit impaired, we use a market interest rate yield analysis to determine fair value.

In addition, for certain debt investments, we may base our valuation on indicative bid and ask prices provided by an independent third-party pricing service. Bid prices reflect the highest price that we and others may be willing to pay. Ask prices represent the lowest price that we and others may be willing to accept. We generally use the midpoint of the bid/ask range as our best estimate of fair value of such investment.

Due to the inherent uncertainty of determining the fair value of Level 3 investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a market existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions or otherwise are less liquid than publicly traded instruments. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize significantly less than the value at which such investment had previously been recorded.

Our investments are subject to market risk. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

In connection with each sale of shares of our common stock, we make a determination that we are not selling shares of our common stock at a price below the then-current net asset value per share of common stock at the time at which the sale is made or otherwise in violation of the 1940 Act. GC Advisors will consider the following factors, among others, in making such determination:

•The net asset value of our common stock disclosed in the most recent periodic report filed with the SEC;

•Its assessment of whether any change in the net asset value per share of our common stock has occurred (including through the realization of gains on the sale of portfolio securities) during the period beginning on the date of the most recently disclosed net asset value per share of our common stock and ending two days prior to the date of the sale; and

•The magnitude of the difference between the sale price of the shares of common stock and management’s assessment of any change in the net asset value per share of our common stock during the period discussed above.

Valuation of Other Financial Assets and Liabilities

Fair value of our debt is estimated using Level 3 inputs by discounting remaining payments using comparable market rates or market quotes for similar instruments at the measurement date, if available.

Revenue Recognition:

Our revenue recognition policies are as follows:

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Investments and Related Investment Income: Interest income is accrued based upon the outstanding principal amount and contractual interest terms of debt investments. Premiums, discounts, and origination fees are amortized or accreted into interest income over the life of the respective debt investment. For investments with contractual PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we do not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not likely to be collectible. In addition, we may generate revenue in the form of amendment, structuring or due diligence fees, fees for providing managerial assistance, consulting fees and prepayment premiums on loans and record these fees as fee income when earned. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans as fee income. Dividend income on preferred equity securities is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Distributions received from LLC, and limited partnership, or LP, investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

We account for investment transactions on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the cost basis of investment, without regard to unrealized gains or losses previously recognized. We report changes in fair value of investments from the prior period that is measured at fair value as a component of the net change in unrealized appreciation (depreciation) on investment transactions in our Consolidated Statements of Operations.

Non-accrual: Loans may be left on accrual status during the period we are pursuing repayment of the loan. Management reviews all loans that become past due 90 days or more on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. We generally reverse accrued interest when a loan is placed on non-accrual. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. We restore non-accrual loans to accrual status when past due principal and interest are paid and, in our management’s judgment, are likely to remain current. As of each of March 31, 2020 and September 30, 2019, we had no portfolio company investments on non-accrual status.

Income taxes:

We have elected to be treated as a RIC under Subchapter M of the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, we are required to meet certain source of income and asset diversification requirements, as well as timely distribute to our stockholders dividends for U.S. federal income tax purposes of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. We have made and intend to continue to make the requisite distributions to our stockholders, which will generally relieve us from U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next tax year. We may then be required to incur a 4% excise tax on such income. To the extent that we determine that our estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, we accrue excise tax, if any, on estimated excess taxable income as taxable income is earned. For each of the three and six months ended March 31, 2020 and 2019, we did not incur any U.S federal excise tax.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Many of the loans in our portfolio have floating interest rates, and we expect that our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically have interest rate reset provisions that adjust applicable interest rates under such loans to current market rates on a quarterly basis. The loans that are subject to floating LIBOR are also generally subject to a minimum base rate, or floor, that we charge on our loans if the current market rates are below the respective floors. As of each of March 31, 2020 and September 30, 2019, the weighted average LIBOR floor on the loans subject to floating interest rates was 1.01%. In addition, the SB Revolver has a floating interest rate provision based on the one-month, two-month, or three-month LIBOR, the DB Credit Facility has a floating interest rate provision equal to three-month LIBOR and the Adviser Revolver has a floating interest rate provision equal to the short-term Applicable Federal Rate. We expect that other credit facilities into which we enter in the future may have floating interest rate provisions.

In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks have reduce certain interest rates and LIBOR has decreased. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we can earn on any portfolio investments, a decrease in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR.

Assuming that the interim and unaudited Consolidated Statement of Financial Condition as of March 31, 2020 was to remain constant and that we took no actions to alter our interest rate sensitivity as of such date, the following table shows the annualized impact of hypothetical base rate changes in interest rates.


Change in interest rates	Increase (decrease) in interest income		Increase (decrease) in interest expense		Net increase (decrease) in investment income
	(In thousands)
Down 25 basis points	$	(2,066)	$	(957)	$	(1,109)
Up 50 basis points	4,134		1,914		2,220
Up 100 basis points	8,338		3,829		4,509
Up 150 basis points	12,507		5,743		6,764
Up 200 basis points	16,676		7,657		9,019

Although we believe that this analysis is indicative of our sensitivity to interest rate changes as of March 31, 2020, it does not adjust for changes in the credit market, credit quality, the size and composition of the assets in our portfolio and other business developments, including borrowings under the SB Revolver, DB Credit Facility, the Adviser Revolver or other borrowings, that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above.

We could in the future hedge against interest rate fluctuations by using standard hedging instruments such as interest rate swaps, futures, options and forward contracts to the limited extent permitted under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates.

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Item 4. Controls and Procedures.

As of March 31, 2020 (the end of the period covered by this report), management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that, at the end of such period, our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.

There has not been any change in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Part II - Other Information

Item 1: Legal Proceedings.

We, GC Advisors and Golub Capital LLC may, from time to time, be involved in legal and regulatory proceedings arising out of our and their respective operations in the normal course of business or otherwise. While there can be no assurance of the ultimate disposition of any such proceedings, each of us, GC Advisors and Golub Capital LLC do not believe it is currently subject to any material legal proceedings.

Item 1A: Risk Factors.

Except as set forth below, there have been no material changes during the six months ended March 31, 2020 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2019.

You should carefully consider these risk factors, together with all of the other information included in this Quarterly Report on Form 10-Q and the other reports and documents filed by us with the SEC. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us may also impair our operations and performance. If any of the following events occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected. In such case, our net asset value (“NAV”) and the trading price of our common stock could decline, and you may lose all or part of your investment. The risk factors described below and in our Annual Report on Form 10-K for the year ended September 30, 2019 are the principal risk factors associated with an investment in us as well as those factors generally associated with an investment company with investment objectives, investment policies, capital structure or trading markets similar to ours.

We are currently operating in a period of capital markets disruption and economic uncertainty.

The U.S. capital markets have experienced extreme volatility and disruption following the global outbreak of COVID-19 (also known as the “coronavirus”) that began in December 2019. Some economists and major investment banks have expressed concern that the continued spread of the virus globally could lead to a world-wide economic downturn. Disruption in the capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets. A prolonged period of market disruption and/or illiquidity may have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions also could increase our funding costs, limit our access to the

capital markets or result in a decision by lenders not to extend credit to us. These events could limit our investment originations, limit our ability to grow and negatively impact our operating results.

Events outside of our control, including public health crises, may negatively affect our portfolio companies, our investment adviser and the results of our operations.

Periods of market volatility may continue to occur in response to pandemics or other events outside of our control. These types of events could adversely affect operating results for us and for our portfolio companies. For example, in December 2019, a novel strain of coronavirus surfaced in China and has since spread to other countries, including the United States, which has resulted in restrictions on travel and the temporary closure of many corporate offices, retail stores, and manufacturing facilities and factories in the affected jurisdictions. In addition to these developments having adverse consequences for us and our portfolio companies an, the operations of our investment adviser (including those relating to the Company) have been, and could continue to be, adversely impacted, including through quarantine measures and travel restrictions imposed on its personnel or service providers based or temporarily located in affected countries, or any related health issues of such personnel or service providers. As the potential impact of the coronavirus is difficult to predict, the extent to which the coronavirus and/or other health pandemics may negatively affect our and our portfolio companies’ operating results or the duration of any potential business or supply-chain disruption, is uncertain. Any potential impact to our results will depend to a large extent on future developments and new information that may emerge regarding the duration and severity of the coronavirus and the actions taken by authorities and other entities to contain the coronavirus or treat its impact, all of which are beyond our control. These potential impacts, while uncertain, could adversely affect our and our portfolio companies' operating results.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds.

Previously disclosed on Form 8-K filings.

Item 3: Defaults Upon Senior Securities.

None.

Item 4: Mine Safety Disclosures.

None.

Item 5: Other Information.

None.

Item 6: Exhibits.

EXHIBIT INDEX



Number						Description

10.1						Third Amendment to Revolving Credit and Security Agreement, dated as of February 7, 2020, by and among Golub Capital BDC 3, Inc. and GBDC 3 Funding LLC, as borrowers, and Signature Bank, as administrative agent and a lender (Incorporated by reference to Exhibit 10.1 to the Registrant's Report on Form 8-K (File No. 814-01244), filed on February 13, 2020).
31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
32.1						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

_________________

* Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Golub Capital BDC 3, Inc.
		A Maryland Corporation

Date: May 14, 2020	By:	/s/ David B. Golub
		David B. Golub
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: May 14, 2020	By:	/s/ Ross A. Teune
		Ross. A. Teune
		Chief Financial Officer
		(Principal Accounting and Financial Officer)