UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 814-00821

FRANKLIN BSP LENDING CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Maryland						27-2614444
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)
9 West 57th Street, 49th Floor, Suite 4920 New York, New York						10019
(Address of Principal Executive Office)						(Zip Code)

(212) 588-6770

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

    

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 x 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes x No o

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    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 the 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 x						Smaller reporting company o
						Emerging growth company o

    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. o

    Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of

the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.

7262(b)) by the registered public accounting firm that prepared or issued its audit report. o

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

The number of shares of the registrant's common stock, $0.001 par value, outstanding as of May 11, 2022 was 204,976,172.

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FRANKLIN BSP LENDING CORPORATION

FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2022

TABLE OF CONTENTS

 

			Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements			4
Consolidated Statements of Assets and Liabilities as of March 31, 2022 (Unaudited) and December 31, 2021			4
Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (Unaudited)			5
Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31, 2022 and 2021 (Unaudited)			7
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (Unaudited)			8
Consolidated Schedules of Investments as of March 31, 2022 (Unaudited) and December 31, 2021			9
Notes to Consolidated Financial Statements (Unaudited)			31
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			87
Item 3. Quantitative and Qualitative Disclosures About Market Risk			103
Item 4. Controls and Procedures			104
PART II - OTHER INFORMATION
Item 1. Legal Proceedings			105
Item 1A. Risk Factors			105
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			106
Item 3. Defaults Upon Senior Securities			106
Item 4. Mine Safety Disclosures			106
Item 5. Other Information			106
Item 6. Exhibits			107
Signatures			108

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PART I - FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS

FRANKLIN BSP LENDING CORPORATION

 

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollars in thousands except share and per share data)

			March 31,						December 31,
			2022						2021
			(Unaudited)
ASSETS
Investments, at fair value:
Control Investments, at fair value (amortized cost of $597,018 and $614,408, respectively)			$	649,547					$	657,414
Affiliate Investments, at fair value (amortized cost of $147,333 and $154,211, respectively)			105,118						110,952
Non-affiliate Investments, at fair value (amortized cost of $1,971,005 and $2,014,998, respectively)			1,958,805						2,010,598
Investments, at fair value (amortized cost of $2,715,356 and $2,783,617, respectively)			2,713,470						2,778,964
Cash and cash equivalents			28,238						42,774
Interest and dividends receivable			28,779						29,089
Receivable for unsettled trades			10,723						37,379
Prepaid expenses and other assets			3,112						6,749
Unrealized appreciation on forward currency exchange contracts			—						266
Total assets			$	2,784,322					$	2,895,221
LIABILITIES
Debt (net of deferred financing costs of $7,063 and $9,553, respectively)			$	1,206,073					$	1,272,274
Stockholder distributions payable			22,972						23,253
Management fees payable			10,585						10,499
Incentive fee on income payable			7,396						7,169
Accounts payable and accrued expenses			27,374						29,975
Payable for unsettled trades			2,589						34,394
Interest and debt fees payable			7,384						8,044
Payable for common stock repurchases			1,224						—
Directors' fees payable			70						121
Unrealized depreciation on forward currency exchange contracts			273						—
Total liabilities			1,285,940						1,385,729
Commitments and contingencies (Note 7)
NET ASSETS
Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued and outstanding			—						—
Common stock, $.001 par value, 450,000,000 shares authorized; 233,328,540 issued and 199,428,205 outstanding at March 31, 2022, and 232,419,916 issued and 201,610,757 outstanding at December 31, 2021			199						202
Additional paid in capital			1,897,109						1,913,365
Total distributable loss			(398,926)						(404,075)
Total net assets			1,498,382						1,509,492
Total liabilities and net assets			$	2,784,322					$	2,895,221
Net asset value per share			$	7.51					$	7.49

The accompanying notes are an integral part of these consolidated financial statements.

4

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands except share and per share data)

(Unaudited)

			For the three months ended March 31,
			2022						2021
Investment income:
From control investments
Interest income			$	4,586					$	3,480
Dividend income			16,280						13,833
Fee and other income			70						35
Total investment income from control investments			20,936						17,348
From affiliate investments
Interest income			1,881						3,180
Dividend income			484						878
Total investment income from affiliate investments			2,365						4,058
From non-affiliate investments
Interest income			38,559						34,058
Fee and other income			1,915						969
Total investment income from non-affiliate investments			40,474						35,027
Interest from cash and cash equivalents			1						1
Total investment income			63,776						56,434
Operating expenses:
Management fees			10,503						9,574
Incentive fee on income			7,256						6,655
Interest and debt fees			12,284						9,600
Professional fees			853						1,279
Other general and administrative			1,407						1,601
Administrative services			195						181
Directors' fees			273						226
Total expenses			32,771						29,116
Income tax expense, including excise tax			1,979						700
Net investment income			29,026						26,618
Realized and unrealized gain (loss):
Net realized gain (loss)
Control investments			1						1
Affiliate investments			112						(307)
Non-affiliate investments			4,907						(443)
Net realized gain (loss) on foreign currency transactions			193						(528)
Net realized loss on extinguishment of debt			(1,769)						(1,286)
Total net realized gain (loss)			3,444						(2,563)
Net change in unrealized appreciation (depreciation) on investments
Control investments			9,523						(8,125)
Affiliate investments			1,044						21,111
Non-affiliate investments			(7,800)						29,645
Net change in deferred taxes			229						—
Total net change in unrealized appreciation on investments, net of change in deferred taxes			2,996						42,631
Net change in unrealized appreciation (depreciation) from forward currency exchange contracts			(539)						293
Net realized and unrealized gain			5,901						40,361
Net increase in net assets resulting from operations			$	34,927					$	66,979

The accompanying notes are an integral part of these consolidated financial statements.

5

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands except share and per share data)

(Unaudited)

			For the three months ended March 31,
			2022						2021
Per share information - basic and diluted
Net investment income			$	0.15					$	0.13
Net increase in net assets resulting from operations			$	0.17					$	0.33
Weighted average shares outstanding			199,948,106						200,340,731

The accompanying notes are an integral part of these consolidated financial statements.

6

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollars in thousands except share and per share data)

(Unaudited)

			For the three months ended March 31,
			2022						2021
Operations:
Net investment income			$	29,026					$	26,618
Net realized gain (loss) from investments			5,020						(749)
Net realized gain (loss) on foreign currency transactions			193						(528)
Net realized loss on extinguishment of debt			(1,769)						(1,286)
Net change in unrealized appreciation on investments			2,767						42,631
Net change in deferred taxes			229						—
Net change in unrealized appreciation (depreciation) from forward currency exchange contracts			(539)						293
Net increase in net assets resulting from operations			34,927						66,979
Stockholder distributions:
Distributions			(29,778)						(19,757)
Net decrease in net assets from stockholder distributions			(29,778)						(19,757)
Capital share transactions:
Reinvestment of stockholder distributions			6,806						4,579
Repurchases of common stock			(23,065)						(18,799)
Net decrease in net assets from capital share transactions			(16,259)						(14,220)
Total increase (decrease) in net assets			(11,110)						33,002
Net assets at beginning of period			1,509,492						1,399,755
Net assets at end of period			$	1,498,382					$	1,432,757
Net asset value per common share			$	7.51					$	7.19
Common shares outstanding at end of period			199,428,205						199,247,868

The accompanying notes are an integral part of these consolidated financial statements.

7

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

			For the three months ended March 31,
			2022						2021
Operating activities:
Net increase in net assets resulting from operations			$	34,927					$	66,979
Adjustments to reconcile net increase in net assets from operations to net cash provided by (used in) operating activities:
Payment-in-kind interest income			(2,540)						(1,264)
Net accretion of discount on investments			(2,250)						(2,578)
Amortization of deferred financing costs			722						809
Amortization of discount on unsecured notes			308						122
Sales and repayments of investments			137,773						206,284
Purchases of investments			(59,702)						(221,050)
Net realized (gain) loss from investments			(5,020)						749
Net realized (gain) loss on foreign currency transactions			(193)						528
Net realized loss on extinguishment of debt			1,769						1,286
Net change in unrealized appreciation on investments			(2,767)						(42,631)
Net change in unrealized (appreciation) depreciation from forward currency exchange contracts			539						(293)
(Increase) decrease in operating assets:
Interest and dividends receivable			310						(174)
Receivable for unsettled trades			26,656						30,858
Prepaid expenses and other assets			3,637						(375)
Increase (decrease) in operating liabilities:
Management fees payable			86						53
Incentive fee on income payable			227						732
Accounts payable and accrued expenses			(2,601)						1,996
Payable for unsettled trades			(31,805)						(126,499)
Interest and debt fees payable			(660)						1,730
Directors' fees payable			(51)						(26)
Net cash provided by (used in) operating activities			99,365						(82,764)
Financing activities:
Repurchases of common stock			(21,841)						(18,799)
Proceeds from debt			20,000						497,994
Payments on debt			(89,000)						(373,100)
Payments of financing costs			—						(496)
Stockholder distributions			(23,253)						(15,386)
Net cash provided by (used in) financing activities			(114,094)						90,213
Net increase (decrease) in cash and cash equivalents			(14,729)						7,449
Effect of foreign currency exchange rates			193						(528)
Cash and cash equivalents, beginning of period			42,774						53,182
Cash and cash equivalents, end of period			$	28,238					$	60,103
Supplemental information:
Interest paid during the period			$	11,864					$	5,463
Net taxes, including excise tax, paid during the period			$	2,504					$	700
Distributions reinvested			$	6,806					$	4,579
Assets and liabilities exchanged for interest in FBLC Senior Loan Fund, LLC (Note 3)			$	—					$	262,544

The accompanying notes are an integral part of these consolidated financial statements.

8

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Senior Secured First Lien Debt - 119.1% (b)
1236904 BC, Ltd. (c) (h)						Software/Services						L+7.50% (8.50%), 3/4/2027						$	10,441					$	10,272					$	10,600					0.7		%
1236904 BC, Ltd. (c) (h) (i)						Software/Services						L+5.50% (5.96%), 3/4/2027						18,592						18,060						17,979						1.2		%
Absolute Software Corp. (a) (c) (h) (i)						Software/Services						L+6.00% (7.01%), 7/1/2027						46,288						45,478						45,478						3.0		%
ADCS Clinics Intermediate Holdings, LLC (c) (h)						Healthcare						L+6.25% (7.25%), 5/7/2027						13,737						13,504						13,504						0.9		%
ADCS Clinics Intermediate Holdings, LLC (c)						Healthcare						L+6.25% (7.25%), 5/7/2027						2,723						2,723						2,677						0.2		%
Arch Global Precision, LLC (c)						Industrials						L+4.50% (4.72%), 4/1/2026						2,374						2,374						2,375						0.1		%
Arch Global Precision, LLC (c) (h) (i)						Industrials						L+4.50% (4.96%), 4/1/2026						7,537						7,509						7,537						0.5		%
Arctic Holdco, LLC (c) (i)						Paper & Packaging						L+6.00% (7.00%), 12/23/2026						9,313						9,313						9,174						0.6		%
Arctic Holdco, LLC (c)						Paper & Packaging						L+6.00% (7.00%), 12/23/2026						2,030						2,030						1,999						0.1		%
Arctic Holdco, LLC (c) (h) (i)						Paper & Packaging						L+6.00% (7.01%), 12/23/2026						50,872						49,843						50,110						3.3		%
Armada Parent, Inc. (c) (h)						Industrials						L+5.75% (6.50%), 10/29/2027						45,056						44,218						44,218						2.9		%
Armada Parent, Inc. (c)						Industrials						L+5.75% (6.50%), 10/29/2027						452						452						443						0.0		%
Aventine Holdings, LLC (c)						Media/Entertainment						L+6.00% (6.93%) 4.00% PIK, 6/18/2027						7,970						7,970						7,818						0.5		%
Aventine Holdings, LLC (c)						Media/Entertainment						10.25%, 6/18/2027						22,439						21,906						21,905						1.4		%
Aventine Holdings, LLC (c) (i)						Media/Entertainment						L+6.00% (6.93%) 4.00% PIK, 6/18/2027						25,410						24,932						24,928						1.7		%
Axiom Global, Inc. (c) (h) (i)						Business Services						L+4.75% (5.50%), 10/1/2026						20,473						20,326						20,473						1.4		%
BCPE Oceandrive Buyer, Inc. (c) (i)						Healthcare						L+6.25% (7.26%), 12/29/2028						3,425						3,425						3,351						0.2		%
BCPE Oceandrive Buyer, Inc. (c) (i)						Healthcare						L+6.25% (7.26%), 12/29/2028						20,550						20,104						20,104						1.3		%
Bearcat Buyer, Inc. (c) (i)						Healthcare						L+4.25% (5.26%), 7/9/2026						150						150						150						0.0		%
Bearcat Buyer, Inc. (c) (i)						Healthcare						L+4.25% (5.26%), 7/9/2026						724						724						724						0.0		%
Black Mountain Sand, LLC (c)						Energy						L+9.00% (10.50%), 6/28/2024						17,145						17,079						17,145						1.1		%
Capstone Logistics (c)						Transportation						L+4.75% (5.75%), 11/12/2027						1,124						1,124						1,124						0.1		%
Capstone Logistics (c) (h)						Transportation						L+4.75% (5.75%), 11/12/2027						19,160						19,015						19,160						1.3		%
CDS U.S. Intermediate Holdings, Inc. (a) (h) (i) (p)						Media/Entertainment						L+6.00% (7.00%), 11/24/2025						5,570						5,518						5,557						0.4		%
CHA Holdings, Inc. (c) (i)						Business Services						L+4.50% (5.51%), 4/10/2025						518						494						519						0.0		%
Chudy Group, LLC (c) (h)						Healthcare						L+5.75% (6.75%), 6/30/2027						20,549						20,279						20,280						1.3		%
Cobblestone Intermediate Holdco, LLC (c) (i)						Consumer						L+5.50% (6.25%), 1/29/2026						14,976						14,895						14,976						1.0		%
Cobblestone Intermediate Holdco, LLC (c)						Consumer						L+5.50% (6.25%), 1/29/2026						3,345						3,345						3,346						0.2		%
Cold Spring Brewing, Co. (c) (h) (i)						Food & Beverage						L+4.75% (5.75%), 12/19/2025						7,209						7,164						7,209						0.5		%
Communication Technology Intermediate, LLC (c) (h)						Business Services						L+5.75% (6.75%), 5/5/2027						18,026						17,720						18,027						1.2		%
Communication Technology Intermediate, LLC (c) (i)						Business Services						L+5.75% (6.75%), 5/5/2027						6,270						6,270						6,270						0.4		%

The accompanying notes are an integral part of these consolidated financial statements.

9

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Communication Technology Intermediate, LLC (c)						Business Services						L+5.75% (6.75%), 5/5/2027						$	205					$	205					$	205					0.0		%
Corfin Industries, LLC (c)						Industrials						L+5.75% (6.76%), 12/27/2027						1,610						1,610						1,578						0.1		%
Corfin Industries, LLC (c) (h) (i)						Industrials						L+5.75% (6.76%), 2/5/2026						16,478						16,250						16,478						1.1		%
Cornerstone Chemical, Co.						Chemicals						6.75%, 8/15/2024						14,850						14,410						13,638						0.9		%
CRS-SPV, Inc. (c) (o) (w)						Industrials						L+4.50% (5.50%), 3/8/2023						62						62						62						0.0		%
Drilling Info Holdings, Inc. (c) (i)						Business Services						L+4.25% (4.71%), 7/30/2025						7,006						6,829						6,936						0.4		%
Dynagrid Holdings, LLC (c)						Utilities						L+6.00% (7.00%), 12/18/2025						452						452						452						0.0		%
Dynagrid Holdings, LLC (c) (i)						Utilities						L+6.00% (7.01%), 12/18/2025						14,300						14,077						14,300						1.0		%
FGT Purchaser, LLC (c) (h)						Consumer						L+5.50% (6.50%), 9/13/2027						21,391						21,003						21,002						1.4		%
FGT Purchaser, LLC (c)						Consumer						L+5.50% (6.51%), 9/13/2027						836						836						821						0.1		%
Foresight Energy Operating, LLC (c) (p)						Energy						L+8.00% (9.50%), 6/30/2027						1,087						1,087						1,098						0.1		%
Galway Borrower, LLC (c)						Financials						L+5.25% (6.26%), 9/29/2028						359						359						352						0.0		%
Galway Borrower, LLC (c) (h)						Financials						L+5.25% (6.26%), 9/29/2028						26,288						25,831						25,799						1.7		%
Gold Standard Baking, Inc. (c)						Food & Beverage						P+5.50% (9.00%) 2.00% PIK, 7/25/2022						2,515						2,176						211						0.0		%
Green Energy Partners/Stonewall, LLC (c)						Utilities						L+6.00% (6.50%), 11/12/2026						10,296						10,105						10,245						0.7		%
Health Plan One, Inc. (c)						Financials						L+7.50% (8.51%), 7/15/2025						10,695						10,343						10,695						0.7		%
Higginbotham Insurance Agency, Inc. (c) (h)						Financials						L+5.50% (6.25%), 11/25/2026						14,737						14,602						14,737						1.0		%
Higginbotham Insurance Agency, Inc. (c)						Financials						L+5.50% (6.25%), 11/25/2026						836						836						836						0.1		%
Hospice Care Buyer, Inc. (c)						Healthcare						L+6.50% (7.50%), 12/9/2026						4,565						4,565						4,513						0.3		%
Hospice Care Buyer, Inc. (c) (h)						Healthcare						L+6.50% (7.50%), 12/9/2026						24,499						23,936						24,222						1.6		%
Hospice Care Buyer, Inc. (c) (h)						Healthcare						L+6.50% (7.50%), 12/9/2026						18,145						17,778						17,940						1.2		%
Hospice Care Buyer, Inc. (c)						Healthcare						P+5.50% (9.00%), 12/9/2026						2,537						2,537						2,509						0.2		%
ICR Operations, LLC (c) (h)						Business Services						L+5.50% (6.51%), 11/22/2028						42,666						41,857						41,864						2.8		%
ICR Operations, LLC (c)						Business Services						L+5.25% (6.26%), 11/22/2027						3,089						3,089						3,030						0.2		%
Ideal Tridon Holdings, Inc. (c) (h) (i)						Industrials						L+5.25% (6.26%), 7/31/2024						4,145						4,073						4,145						0.3		%
Ideal Tridon Holdings, Inc. (c)						Industrials						L+5.25% (6.26%), 7/31/2024						45						45						45						0.0		%
Ideal Tridon Holdings, Inc. (c) (h) (i)						Industrials						L+5.25% (6.26%), 7/31/2024						26,538						26,423						26,538						1.8		%
IG Investments Holdings, LLC (c) (h)						Business Services						L+6.00% (7.01%), 9/22/2028						17,763						17,434						17,587						1.2		%
IG Investments Holdings, LLC (c) (h)						Business Services						L+6.00% (7.01%), 9/22/2028						320						317						317						0.0		%
IG Investments Holdings, LLC (c)						Business Services						P+5.00% (8.50%), 9/22/2027						278						278						275						0.0		%
Integrated Efficiency Solutions, Inc. (c) (o) (w)						Industrials						7.50%, 12/31/2025						1,432						1,432						1,432						0.1		%
Integrated Global Services, Inc. (c) (i)						Industrials						L+6.00% (7.00%), 2/4/2026						11,356						11,211						11,039						0.7		%

The accompanying notes are an integral part of these consolidated financial statements.

10

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Integrated Global Services, Inc. (c)						Industrials						L+6.00% (7.00%), 2/4/2026						$	2,028					$	2,028					$	1,971					0.1		%
Internap Corp. (c) (h) (p)						Business Services						L+6.50% (7.50%) 5.50% PIK, 5/8/2025						6,383						6,383						5,553						0.4		%
International Cruise & Excursions, Inc. (c) (i)						Business Services						S+5.35% (6.35%), 6/6/2025						4,888						4,863						4,448						0.3		%
K2 Intelligence Holdings, Inc. (c) (h) (i)						Business Services						L+5.75% (6.76%), 9/23/2024						10,018						9,919						9,322						0.6		%
KidKraft, Inc. (c) (w)						Consumer						L+5.00% (6.00%), 8/15/2022						1,060						831						1,060						0.1		%
Kissner Milling Co., Ltd.						Industrials						4.88%, 5/1/2028						2,983						2,983						2,802						0.2		%
Knowledge Pro Buyer, Inc. (c) (i)						Business Services						L+5.75% (6.50%), 12/10/2027						24,738						24,269						24,268						1.6		%
Knowledge Pro Buyer, Inc. (c)						Business Services						L+5.75% (6.50%), 12/10/2027						911						911						894						0.1		%
Labrie Environmental Group, LLC (a) (c) (h)						Industrials						L+5.50% (6.50%), 9/1/2026						22,523						22,191						22,523						1.5		%
Lakeland Tours, LLC (c) (h) (i)						Education						L+7.50% (8.75%) 6.00% PIK, 9/25/2025						3,612						3,597						3,613						0.2		%
Lakeland Tours, LLC (c) (h) (i)						Education						L+7.50% (8.75%) 6.00% PIK, 9/25/2025						4,378						4,038						3,941						0.3		%
Lakeland Tours, LLC (c) (h)						Education						L+12.00% (13.25%) 6.00% PIK, 9/25/2023						1,900						1,900						1,900						0.1		%
Lakeland Tours, LLC (c) (h) (i)						Education						13.25% PIK, 9/27/2027						5,015						3,398						3,761						0.3		%
Lakeview Health Holdings, Inc. (c) (o) (w)						Healthcare						P+6.00% (9.50%) PIK, 10/15/2024						525						525						525						0.0		%
Lakeview Health Holdings, Inc. (c) (o) (t) (w)						Healthcare						P+4.50% (8.00%) PIK, 10/15/2024						1,606						630						595						0.0		%
LightSquared, LP						Telecom						15.50% PIK, 11/1/2023						1,794						1,794						1,365						0.1		%
Manna Pro Products, LLC (c)						Consumer						L+6.00% (7.00%), 12/10/2026						4,023						4,023						4,023						0.3		%
Manna Pro Products, LLC (c) (i)						Consumer						L+6.00% (7.00%), 12/10/2026						33,166						32,555						33,166						2.2		%
Manna Pro Products, LLC (c)						Consumer						L+6.00% (7.00%), 12/10/2026						1,082						1,082						1,082						0.1		%
McDonald Worley, P.C. (c)						Business Services						26.00% PIK, 12/31/2024						12,223						12,223						11,526						0.8		%
MCS Acquisition Corp. (c)						Business Services						L+6.00% (7.00%), 10/2/2025						778						778						778						0.1		%
Medical Depot Holdings, Inc. (c) (h) (i)						Healthcare						L+9.50% (10.51%) 4.00% PIK, 6/2/2025						20,079						19,691						19,275						1.3		%
Medical Management Resource Group, LLC (c) (h)						Healthcare						L+5.75% (6.76%), 9/30/2027						16,098						15,803						15,804						1.1		%
MGTF Radio Company, LLC (c) (o)						Media/Entertainment						L+6.00% (7.00%), 4/1/2024						50,471						50,412						42,421						2.8		%
Midwest Can Company, LLC (c) (h) (i)						Paper & Packaging						L+6.00% (7.01%), 3/2/2026						32,302						31,844						32,302						2.2		%
Midwest Can Company, LLC (c)						Paper & Packaging						L+6.00% (7.00%), 3/2/2026						565						565						565						0.0		%
Miller Environmental Group, Inc. (c) (h) (i)						Business Services						L+6.50% (7.56%), 3/15/2024						11,317						11,229						11,317						0.8		%
Miller Environmental Group, Inc. (c) (h) (i)						Business Services						L+6.50% (7.56%), 3/15/2024						10,351						10,255						10,351						0.7		%
Mirra-Primeaccess Holdings, LLC (c) (h)						Healthcare						L+6.50% (7.50%), 7/29/2026						49,198						48,346						49,198						3.3		%
Mirra-Primeaccess Holdings, LLC (c)						Healthcare						L+6.50% (7.50%), 7/29/2026						2,935						2,935						2,935						0.2		%
Muth Mirror Systems, LLC (c) (h) (i)						Technology						L+5.25% (6.25%), 4/23/2025						15,060						14,907						13,833						0.9		%
New Star Metals, Inc. (c) (h) (i)						Industrials						L+5.00% (6.01%), 1/9/2026						32,726						32,325						32,726						2.2		%

The accompanying notes are an integral part of these consolidated financial statements.

11

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Norvax, LLC (a) (c)						Business Services						L+6.50% (7.50%), 9/13/2024						$	893					$	893					$	862					0.1		%
NTM Acquisition Corp. (c) (h) (i)						Media/Entertainment						L+7.25% (8.26%) 1.00% PIK, 6/7/2024						21,396						21,386						20,818						1.4		%
Odessa Technologies, Inc. (c) (h)						Software/Services						L+5.75% (6.50%), 10/19/2027						14,451						14,184						14,184						0.9		%
ORG GC Holdings, LLC (c) (o)						Business Services						L+6.50% (7.51%) PIK, 11/24/2026						8,499						8,499						8,499						0.6		%
Pie Buyer, Inc. (c) (i)						Food & Beverage						L+5.50% (6.50%), 4/5/2027						28,319						27,609						28,319						1.9		%
Pie Buyer, Inc. (c)						Food & Beverage						L+5.50% (6.50%), 4/5/2027						6,114						6,114						6,114						0.4		%
Pie Buyer, Inc. (c)						Food & Beverage						L+5.50% (6.50%), 4/6/2026						613						613						613						0.0		%
Pilot Air Freight, LLC (c) (i)						Transportation						L+5.00% (6.00%), 7/25/2024						8,936						8,841						8,936						0.6		%
Pilot Air Freight, LLC (c)						Transportation						L+5.00% (6.01%), 7/25/2024						2,320						2,320						2,320						0.2		%
PlayPower, Inc. (c) (h) (i)						Industrials						L+5.50% (6.50%), 5/8/2026						23,894						23,684						21,983						1.5		%
Pluralsight, LLC (c) (h)						Software/Services						L+8.00% (9.00%), 4/6/2027						18,826						18,511						18,497						1.2		%
Pluralsight, LLC (c) (h)						Software/Services						L+8.00% (9.00%), 4/6/2027						6,728						6,611						6,610						0.4		%
Point Broadband Acquisition, LLC (c) (h)						Telecom						L+6.00% (7.00%), 9/29/2028						19,292						18,844						18,844						1.3		%
Premier Global Services, Inc. (c) (t)						Telecom						P+5.50% (9.00%), 6/8/2023						5,024						4,908						251						0.0		%
Premier Global Services, Inc. (c)						Telecom						P+5.50% (9.00%), 12/8/2022						969						969						889						0.1		%
Prototek, LLC (c) (h)						Industrials						L+5.75% (6.75%), 10/20/2026						11,144						10,954						11,088						0.7		%
Prototek, LLC (c)						Industrials						L+5.75% (6.75%), 10/20/2026						1,467						1,467						1,460						0.1		%
PSKW, LLC (c) (h) (i)						Healthcare						L+6.25% (7.25%), 3/9/2026						29,400						28,918						29,400						2.0		%
Questex, Inc. (c) (h) (i)						Media/Entertainment						L+5.00% (6.00%), 9/9/2024						15,624						15,497						14,449						1.0		%
Questex, Inc. (c)						Media/Entertainment						L+5.00% (6.00%), 9/9/2024						1,034						1,034						955						0.1		%
Reddy Ice Corp. (c)						Food & Beverage						L+6.50% (7.50%), 7/1/2025						1,804						1,793						1,769						0.1		%
Reddy Ice Corp. (c)						Food & Beverage						L+6.50% (7.50%), 7/1/2025						1,472						1,472						1,443						0.1		%
Reddy Ice Corp. (c)						Food & Beverage						L+6.50% (7.50%), 7/1/2025						4,851						4,851						4,756						0.3		%
Reddy Ice Corp. (c) (h) (i)						Food & Beverage						L+6.50% (7.50%), 7/1/2025						19,098						18,788						18,726						1.2		%
Relativity Oda, LLC (c) (i)						Software/Services						L+6.50% (7.50%) PIK, 5/12/2027						4,959						4,860						4,835						0.3		%
REP TEC Intermediate Holdings, Inc. (c) (h) (i)						Software/Services						L+6.50% (7.51%), 12/1/2027						28,708						28,255						28,212						1.9		%
Roadsafe Holdings, Inc. (c) (i)						Industrials						L+5.75% (6.75%), 10/19/2027						7,812						7,679						7,678						0.5		%
Roadsafe Holdings, Inc. (c)						Industrials						P+4.75% (8.25%), 10/19/2027						4,422						4,422						4,346						0.3		%
Roadsafe Holdings, Inc. (c)						Industrials						P+4.75% (8.25%), 10/19/2027						874						874						857						0.1		%
RSC Acquisition, Inc. (c) (i)						Financials						L+5.50% (6.51%), 10/30/2026						7,831						7,814						7,831						0.5		%
Saturn SHC Buyer Holdings, Inc. (c) (h)						Healthcare						L+6.00% (6.75%), 11/18/2027						33,324						32,698						32,698						2.2		%
Saturn SHC Buyer Holdings, Inc. (c)						Healthcare						L+6.00% (6.75%), 11/18/2027						1,111						1,111						1,090						0.1		%

The accompanying notes are an integral part of these consolidated financial statements.

12

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Sherlock Buyer Corp. (c) (i)						Business Services						L+5.75% (6.50%), 12/8/2028						$	11,124					$	10,911					$	10,912					0.7		%
Simplifi Holdings, Inc. (c) (h)						Media/Entertainment						L+5.50% (6.25%), 10/1/2027						35,371						34,723						34,724						2.3		%
Skillsoft Corp. (a) (h)						Technology						L+4.75% (5.76%), 7/14/2028						1,456						1,437						1,436						0.1		%
St. Croix Hospice Acquisition Corp. (c) (i)						Healthcare						L+6.00% (7.00%), 10/30/2026						25,615						25,224						25,615						1.7		%
Striper Buyer, LLC (c) (h)						Paper & Packaging						L+5.50% (6.25%), 12/30/2026						12,362						12,261						12,362						0.8		%
Subsea Global Solutions, LLC (c) (i)						Business Services						L+7.00% (8.00%), 3/29/2023						4,685						4,657						4,685						0.3		%
Subsea Global Solutions, LLC (c) (i)						Business Services						L+7.00% (8.06%), 3/29/2023						7,895						7,864						7,895						0.5		%
Subsea Global Solutions, LLC (c)						Business Services						L+7.00% (8.00%), 3/29/2023						963						963						963						0.1		%
SunMed Group Holdings, LLC (c) (h)						Healthcare						L+5.75% (6.73%), 6/16/2028						9,032						8,891						8,892						0.6		%
SunMed Group Holdings, LLC (c)						Healthcare						L+5.75% (6.73%), 6/16/2027						96						96						95						0.0		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						L+6.00% (10.00%) PIK, 3/31/2023						6,633						3,833						464						0.0		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						10.00% PIK, 3/31/2023						3,678						2,986						3,678						0.2		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						L+6.00% (10.00%) PIK, 3/31/2023						37,368						21,646						2,616						0.2		%
Therapy Brands Holdings, LLC (c) (h)						Healthcare						L+4.00% (4.79%), 5/18/2028						3,467						3,452						3,467						0.2		%
Tillamook Country Smoker, LLC (c) (h)						Food & Beverage						L+7.75% (8.75%), 5/19/2022						9,578						9,574						8,448						0.6		%
Tillamook Country Smoker, LLC (c)						Food & Beverage						L+7.75% (8.75%), 5/19/2022						2,561						2,561						2,259						0.2		%
Trilogy International Partners, LLC (a)						Telecom						8.88%, 5/15/2023						15,976						15,752						15,834						1.1		%
Trilogy International Partners, LLC (a) (c) (h)						Telecom						10.00%, 5/1/2022						6,298						6,282						6,298						0.4		%
Trinity Air Consultants Holdings Corp. (c)						Business Services						L+5.25% (6.00%), 6/29/2027						2,491						2,491						2,447						0.2		%
Trinity Air Consultants Holdings Corp. (c) (h)						Business Services						L+5.25% (6.00%), 6/29/2027						20,424						20,067						20,067						1.3		%
Triple Lift, Inc. (c) (i)						Software/Services						S+5.75% (6.58%), 5/5/2028						28,477						27,968						28,477						1.9		%
University of St. Augustine Acquisition Corp. (c) (h) (i)						Education						L+4.25% (5.25%), 2/2/2026						23,459						23,138						23,459						1.6		%
Urban One, Inc. (a)						Media/Entertainment						7.38%, 2/1/2028						1,561						1,561						1,567						0.1		%
US Oral Surgery Management Holdco, LLC (c)						Healthcare						L+5.50% (6.25%), 11/18/2027						428						428						420						0.0		%
US Oral Surgery Management Holdco, LLC (c) (h)						Healthcare						L+5.50% (6.25%), 11/18/2027						12,173						11,944						11,944						0.8		%
US Salt Investors, LLC (c) (h)						Chemicals						L+5.50% (6.51%), 7/19/2028						20,083						19,721						19,707						1.3		%
Vantage Mobility International, LLC (c) (p) (t) (w)						Transportation						L+6.00% (7.00%) 4.50% PIK, 3/21/2024						1,910						251						91						0.0		%
Vantage Mobility International, LLC (c) (p) (w)						Transportation						L+6.00% (7.00%) 4.50% PIK, 3/21/2024						245						244						245						0.0		%
Vensure Employer Services, Inc. (c) (i)						Business Services						L+4.75% (5.50%), 3/26/2027						10,199						10,125						10,199						0.7		%
Westwood Professional Services, Inc. (c)						Business Services						L+6.00% (7.00%), 5/26/2026						1,007						1,007						982						0.1		%
Westwood Professional Services, Inc. (c) (i)						Business Services						L+6.00% (7.00%), 5/26/2026						8,626						8,483						8,410						0.6		%
WHCG Purchaser III, Inc. (c) (h)						Healthcare						L+5.75% (6.76%), 6/22/2028						29,346						28,824						28,824						1.9		%

The accompanying notes are an integral part of these consolidated financial statements.

13

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
WHCG Purchaser III, Inc. (c)						Healthcare						L+5.75% (6.76%), 6/22/2028						$	7,131					$	7,131					$	7,004					0.5		%
WIN Holdings III Corp. (c) (h)						Consumer						L+5.75% (6.76%), 7/16/2028						31,547						30,981						30,980						2.1		%
WIN Holdings III Corp. (c)						Consumer						L+5.75% (6.50%), 7/16/2026						890						890						874						0.1		%
WMK, LLC (c) (i)						Business Services						L+5.75% (6.76%), 9/5/2025						2,551						2,544						2,551						0.2		%
WMK, LLC (c)						Business Services						L+5.75% (6.76%), 9/5/2025						352						349						352						0.0		%
WMK, LLC (c) (h) (i)						Business Services						L+5.75% (6.75%), 9/5/2025						18,863						18,679						18,863						1.3		%
WMK, LLC (c)						Business Services						L+5.75% (6.75%), 9/5/2024						2,618						2,618						2,618						0.2		%
Subtotal Senior Secured First Lien Debt																								$	1,822,527					$	1,783,960					119.1		%
Senior Secured Second Lien Debt - 16.1% (b)
Accentcare, Inc. (c) (h)						Healthcare						L+8.75% (9.50%), 6/21/2027						$	30,152					$	29,613					$	30,152					2.0		%
Anchor Glass Container Corp. (c) (t)						Paper & Packaging						L+7.75% (8.75%), 12/6/2024						6,667						6,615						2,004						0.1		%
Aruba Investments Holdings, LLC (i)						Chemicals						L+7.75% (8.50%), 11/24/2028						3,759						3,712						3,712						0.3		%
Astro AB Merger Sub, Inc. (a) (h)						Financials						L+8.00% (9.00%), 4/30/2025						8,162						8,140						8,081						0.5		%
Carlisle FoodService Products, Inc. (c) (h)						Consumer						L+7.75% (8.75%), 3/20/2026						10,719						10,613						10,166						0.7		%
CDS U.S. Intermediate Holdings, Inc. (a) (p)						Media/Entertainment						L+8.00% (9.00%) 7.00% PIK, 11/24/2027						10,505						10,454						10,412						0.7		%
CommerceHub, Inc. (c) (h)						Technology						L+7.00% (8.01%), 12/29/2028						12,360						12,308						12,125						0.8		%
Corelogic, Inc. (h)						Business Services						L+6.50% (7.00%), 6/4/2029						10,808						10,711						10,632						0.7		%
HAH Group Holding Company, LLC (c) (h)						Healthcare						L+8.50% (9.50%), 10/30/2028						12,445						12,189						12,445						0.8		%
Integrated Efficiency Solutions, Inc. (c) (o) (w)						Industrials						10.00% PIK, 12/31/2026						1,472						848						799						0.1		%
Mercury Merger Sub, Inc. (c) (h)						Business Services						L+6.50% (7.00%), 8/2/2029						13,965						13,858						13,965						0.9		%
ORG GC Holdings, LLC (c) (o)						Business Services						18.00% PIK, 11/24/2027						3,594						3,594						3,594						0.2		%
PetVet Care Centers, LLC (h)						Healthcare						L+6.25% (6.71%), 2/13/2026						3,539						3,530						3,510						0.2		%
Project Boost Purchaser, LLC (c)						Business Services						L+8.00% (8.46%), 5/31/2027						1,848						1,848						1,848						0.1		%
Proofpoint, Inc. (h)						Software/Services						L+6.25% (6.76%), 8/31/2029						8,541						8,502						8,490						0.6		%
QuickBase, Inc. (c)						Technology						L+8.00% (8.46%), 4/2/2027						7,484						7,390						7,484						0.5		%
RealPage, Inc. (i)						Software/Services						L+6.50% (7.25%), 4/23/2029						13,647						13,466						13,664						0.9		%
Recess Holdings, Inc. (c) (h)						Industrials						L+7.75% (8.75%), 9/29/2025						16,134						16,011						16,134						1.1		%
River Cree Enterprises, LP (a) (c) (m)						Gaming/Lodging						10.00%, 5/17/2025						CAD	21,275					16,504						17,013						1.1		%
SSH Group Holdings, Inc. (c) (h)						Education						L+8.25% (9.26%), 7/30/2026						10,122						10,067						10,122						0.7		%
Therapy Brands Holdings, LLC (c) (h)						Healthcare						L+6.75% (7.54%), 5/18/2029						3,275						3,246						3,275						0.2		%
Travelpro Products, Inc. (a) (c) (w)						Consumer						14.00%, 10.75% PIK, 11/21/2022						2,938						2,938						2,681						0.2		%

The accompanying notes are an integral part of these consolidated financial statements.

14

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Travelpro Products, Inc. (a) (c) (m) (w)						Consumer						14.00%, 10.75% PIK, 11/21/2022						CAD	3,394					2,631						2,477						0.2		%
USIC Holdings, Inc. (c) (h)						Business Services						L+6.50% (7.25%), 5/14/2029						$	5,798					$	5,746					$	5,798					0.4		%
Vantage Mobility International, LLC (c) (p) (t) (w)						Transportation						L+6.00% (7.00%) PIK, 3/21/2024						1,131						17						—						—		%
Vantage Mobility International, LLC (c) (p) (t) (w)						Transportation						L+6.00% (7.00%) PIK, 3/21/2024						3,673						2,914						—						—		%
Victory Buyer, LLC (c) (h)						Industrials						L+7.00% (7.50%), 11/15/2029						31,686						31,377						31,369						2.1		%
Subtotal Senior Secured Second Lien Debt																								$	248,842					$	241,952					16.1		%
Subordinated Debt - 6.9% (b)
Del Real, LLC (c) (w)						Food & Beverage						16.00%, 12.00% PIK, 4/1/2023						$	4,433					$	3,540					$	3,942					0.3		%
Encina Equipment Finance, LLC (c) (o)						Financials						L+7.75% (9.00%), 12/31/2028						38,100						37,968						38,100						2.5		%
Siena Capital Finance, LLC (c) (j) (o)						Financials						12.50%, 11/27/2026						61,000						60,996						61,000						4.1		%
Subtotal Subordinated Debt																								$	102,504					$	103,042					6.9		%
Collateralized Securities - 2.5% (b)
Collateralized Securities - Debt Investments
NewStar Arlington Senior Loan Program, LLC 14-1A FR (a) (c) (p)						Diversified Investment Vehicles						L+11.00% (11.26%), 4/25/2031						$	4,750					$	4,589					$	4,585					0.3		%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F (a) (c) (p)						Diversified Investment Vehicles						L+7.50% (7.75%), 1/20/2027						10,728						10,024						9,172						0.6		%
Whitehorse, Ltd. 2014-1A E (a) (c) (p)						Diversified Investment Vehicles						L+4.55% (4.87%), 5/1/2026						8,000						7,910						7,145						0.5		%
Collateralized Securities - Equity Investments (n)
NewStar Arlington Senior Loan Program, LLC 14-1A SUB (a) (c) (k) (p)						Diversified Investment Vehicles						24.76%, 4/25/2031						$	31,603					$	14,012					$	16,371					1.1		%
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB (a) (c) (k) (p)						Diversified Investment Vehicles						0.00%, 1/20/2027						31,575						6,285						—						—		%
OFSI Fund, Ltd. 2014-6A Side Letter (a) (c)						Diversified Investment Vehicles						0.00%, 3/20/2025						1,970						47						—						—		%
Whitehorse, Ltd. 2014-1A Side Letter (a) (c) (p)						Diversified Investment Vehicles						0.00%, 5/1/2026						1,886						134						—						—		%
Whitehorse, Ltd. 2014-1A SUB (a) (c) (k) (p)						Diversified Investment Vehicles						0.00%, 5/1/2026						36,000						6,965						—						—		%
Subtotal Collateralized Securities																								$	49,966					$	37,273					2.5		%
Equity/Other - 36.5% (b) (d)
Aden & Anais Holdings, Inc. (c) (e) (w)						Retail												4,470						$	—					$	—					—		%
Answers Corp. (c) (e) (p)						Media/Entertainment												908,911						10,643						145						0.0		%
Baker Hill Acquisition, LLC (c) (e) (w)						Financials												22,653						—						—						—		%
Black Mountain Sand, LLC (c) (e) (u)						Energy												55,463						—						478						0.0		%
CDS U.S. Intermediate Holdings, Inc. (a) (e) (p)						Media/Entertainment												539,708						1,224						5,694						0.4		%
CDS U.S. Intermediate Holdings, Inc. (a) (e) (p)						Media/Entertainment												874,000						437						2,185						0.1		%
Clover Technologies Group, LLC (c) (e)						Industrials												180,274						1,153						29						0.0		%
Clover Technologies Group, LLC (c) (e)						Industrials												2,753						275						627						0.0		%
CRS-SPV, Inc. (c) (e) (o) (w)						Industrials												246						2,219						1,398						0.1		%

The accompanying notes are an integral part of these consolidated financial statements.

15

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Danish CRJ, Ltd. (a) (c) (e) (o) (r)						Transportation												5,002						$	—					$	—					—		%
Data Source Holdings, LLC (c) (e) (w)						Business Services												10,617						140						306						0.0		%
Del Real, LLC (c) (e) (u) (w)						Food & Beverage												670,510						382						—						—		%
Dyno Acquiror, Inc. (c) (e) (w)						Consumer												134,102						58						107						0.0		%
Encina Equipment Finance, LLC (c) (o) (u)						Financials												79,479						81,692						81,693						5.5		%
FBLC Senior Loan Fund, LLC (a) (c) (j) (o)						Diversified Investment Vehicles												304,934						304,934						304,934						20.4		%
First Eagle Greenway Fund II, LLC (a) (p)						Diversified Investment Vehicles												5,329						4,049						449						0.0		%
Foresight Energy Operating, LLC (c) (e) (p) (u)						Energy												158,093						2,087						3,965						0.3		%
HemaSource, Inc. (c) (e) (w)						Healthcare												223,503						168						291						0.0		%
Integrated Efficiency Solutions, Inc. (c) (e) (o) (u)						Industrials												55,991						—						—						—		%
Integrated Efficiency Solutions, Inc. (c) (e) (o) (u)						Industrials												57,427						—						—						—		%
Internap Corp (c) (e) (p)						Business Services												1,293,189						543						1,552						0.1		%
Jakks Pacific, Inc. (e) (p) (s)						Consumer												237,436						2,385						3,331						0.2		%
Jakks Pacific, Inc. (c) (p)						Consumer												5,303						194						801						0.1		%
Kahala Ireland OpCo Designated Activity Company (a) (c) (o) (y)						Transportation												1						—						17,176						1.1		%
Kahala Ireland OpCo Designated Activity Company (a) (c) (e) (o) (y)						Transportation												3,250,000						—						3,250						0.2		%
Kahala US OpCo, LLC (a) (c) (e) (o) (x)						Transportation												4,413,472						—						—						—		%
KidKraft, Inc. (c) (e) (u) (w)						Consumer												2,682,257						—						2,334						0.2		%
Lakeview Health Holdings, Inc. (c) (e) (o) (w)						Healthcare												5,272						—						—						—		%
McDonald Worley, P.C. (c) (e)						Business Services												248,600						41						1,024						0.1		%
MCS Acquisition Corp. (c) (e)						Business Services												31,521						4,103						1,663						0.1		%
MGTF Holdco, LLC (c) (e) (o) (u)						Media/Entertainment												402,000						—						—						—		%
Motor Vehicle Software Corp. (c) (e) (w)						Business Services												223,503						318						350						0.0		%
ORG GC Holdings, LLC (c) (e) (o)						Business Services												93,380						212						—						—		%
ORG GC Holdings, LLC (c) (e) (o)						Business Services												1,771						—						—						—		%
Park Ave RE Holdings, LLC (c) (e) (o) (v)						Financials												719						496						6,759						0.5		%
PennantPark Credit Opportunities Fund II, LP (a) (p)						Diversified Investment Vehicles												8,739						1,105						1,962						0.1		%
Point Broadband Acquisition, LLC (c) (e) (u)						Telecom												2,550,487						2,550						2,550						0.2		%
RMP Group, Inc. (c) (e) (u) (w)						Financials												223						164						429						0.0		%
Siena Capital Finance, LLC (c) (j) (o)						Financials												41,789,400						42,499						77,310						5.2		%
Skillsoft Corp (a) (e) (s)						Technology												248,712						2,636						1,502						0.1		%
Smile Brands, Inc. (c) (w)						Healthcare												712						—						1,437						0.1		%
Squan Holding Corp. (c) (e)						Telecom												180,835						—						—						—		%
Tap Rock Resources, LLC (c) (g) (p) (u)						Energy												18,356,442						5,849						8,467						0.6		%
Tax Defense Network, LLC (c) (e) (p)						Consumer												147,099						425						—						—		%
Tax Defense Network, LLC (c) (e) (p)						Consumer												633,382						—						—						—		%
Tennenbaum Waterman Fund, LP (a) (p)						Diversified Investment Vehicles												10,000						10,000						9,580						0.6		%
Travelpro Products, Inc. (a) (c) (e) (w)						Consumer												447,007						507						38						0.0		%

The accompanying notes are an integral part of these consolidated financial statements.

16

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
United Biologics, LLC (c) (e) (u) (w)						Healthcare												39,769						$	132					$	—					—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												3,155						—						—						—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												4,206						31						—						—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												99,236						—						—						—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												223						35						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												10,000						10						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												490						490						475						0.0		%
USASF Holdco, LLC (c) (e) (u)						Financials												139						139						277						0.0		%
Vantage Mobility International, LLC (c) (e) (p) (w)						Transportation												512,923						—						—						—		%
Vantage Mobility International, LLC (c) (e) (p) (w)						Transportation												4,439,484						3,140						—						—		%
Vantage Mobility International, LLC (c) (e) (p) (w)						Transportation												1,940,977						—						—						—		%
World Business Lenders, LLC (c) (e)						Financials												922,669						3,750						2,675						0.2		%
WPNT, LLC (c) (e) (o) (u)						Media/Entertainment												402,000						—						—						—		%
Wythe Will Tzetzo, LLC (c) (e) (u) (w)						Food & Beverage												22,312						302						—						—		%
YummyEarth, Inc. (c) (e) (w)						Food & Beverage												223						—						—						—		%
Subtotal Equity/Other																								$	491,517					$	547,243					36.5		%
TOTAL INVESTMENTS - 181.1% (b)																								$	2,715,356					$	2,713,470					181.1		%

Forward foreign currency contracts:

Counterparty

Contract to Deliver

In Exchange For

Maturity Date

Unrealized Depreciation

Goldman Sachs International

CAD 21,807

$

17,182

5/17/2022

$

273

_____________

(a)All of the Company's investments, except the investments noted by this footnote, are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the "1940 Act"). Under the 1940 Act, the Company may 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. Qualifying assets represent 81.0% of the Company's total assets. The significant majority of all investments held are deemed to be illiquid.

(b)Percentages are based on net assets as of March 31, 2022.

(c)The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's Board of Directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).

(d)All amounts are in thousands except share amounts.

(e)Non-income producing at March 31, 2022.

(f)The Company has various unfunded commitments to portfolio companies. Please refer to Note 7 - Commitments and Contingencies for details of these unfunded commitments.

(g)The commitment related to this investment is discretionary.

(h)The Company's investment or a portion thereof is pledged as collateral under the JPM Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(i)The Company's investment or a portion thereof is pledged as collateral under the Wells Fargo Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(j)The Company's investment falls under the definition of a significant subsidiary, as it exceeded the threshold of at least one of the tests under Rule 4-08(g), or exceeded the threshold of at least one of the tests under Rule 3-09. See Note 3 for additional disclosure.

(k)The Collateralized Securities - subordinated notes are treated as equity investments and are entitled to recurring distributions which are generally equal to

The accompanying notes are an integral part of these consolidated financial statements.

17

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

the remaining cash flow of the payments made by the underlying fund’s securities less contractual payments to debt holders and fund expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.

(l)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L"), Secured Overnight Financing Rate ("SOFR" or "S"), or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, the Company has provided the spread over the relevant reference rate and the current interest rate in effect at March 31, 2022. Certain investments are subject to reference rate floors. For fixed rate loans, a spread above a reference rate is not applicable. For floating rate securities the all-in rate is disclosed within parentheses.

(m)The principal amount (par amount) is denominated in Canadian Dollars ("CAD").

(n)For equity investments in Collateralized Securities, the effective yield is presented in place of the investment coupon rate for each investment. Refer to footnote (k) for a further description of an equity investment in a Collateralized Security.

(o)The provisions of the 1940 Act classify investments based on the level of control that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be "non-controlled" when the Company owns 25% or less of the portfolio company's voting securities and/or does not have the power to exercise control over the management or policies of such portfolio company. A company is generally presumed to be "controlled" when the Company owns more than 25% of the portfolio company's voting securities and/or has the power to exercise control over the management or policies of such portfolio company. The Company classifies this investment as "controlled".

(p)The provisions of the 1940 Act classify investments further based on the level of ownership that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as "non-affiliated" when the Company owns less than 5% of a portfolio company's voting securities and "affiliated" when the Company owns 5% or more of a portfolio company's voting securities. The Company classifies this investment as "affiliated".

(q)Unless otherwise indicated, all investments in the consolidated schedule of investments are non-affiliated, non-controlled investments.

(r)The Company's investment is held through the Consolidated Holding Company, Kahala Aviation Holdings, LLC, which owns 49% of the operating company, Danish CRJ LTD.

(s)The investment is not a restricted security. All other securities are restricted securities.

(t)The investment is on non-accrual status as of March 31, 2022.

(u)Investments are held in the taxable wholly-owned, consolidated subsidiary, 54th Street Equity Holdings, Inc.

(v)The Company's investment is held through the consolidated subsidiary, Park Ave RE, Inc., which owns 100% of the equity of the operating company, Park Ave RE Holdings, LLC.

(w)The investment is held through BSP TCAP Acquisition Holdings LP which is an affiliated acquisition entity utilized for the Triangle Transaction. Due to certain restrictions, such as limits on the number of partners allowable within the equity structures of the newly acquired investments, these investments are still held within the acquisition entity as of March 31, 2022.

(x)The Company's investment is held through the consolidated subsidiaries, Kahala Aviation Holdings, LLC and Kahala Aviation US, Inc. which own 100% of the equity of the operating company, Kahala US OpCo LLC.

(y)The Company's investment is held through the consolidated subsidiary, Kahala Aviation Holdings, LLC, which owns 100% of the equity of the operating company, Kahala Ireland OpCo Designated Activity Company.

The accompanying notes are an integral part of these consolidated financial statements.

18

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

March 31, 2022

(Unaudited)

The following table shows the portfolio composition by industry grouping based on fair value at March 31, 2022:

			At March 31, 2022
			Investments at Fair Value						Percentage of Total Portfolio
Healthcare			$	398,865					14.7		%
Diversified Investment Vehicles (1)			354,198						13.1		%
Financials			337,049						12.4		%
Business Services			334,997						12.3		%
Industrials			273,680						10.1		%
Software/Services			197,026						7.3		%
Media/Entertainment			193,578						7.1		%
Consumer			140,023						5.2		%
Paper & Packaging			108,516						4.0		%
Food & Beverage			83,809						3.1		%
Transportation			52,302						1.9		%
Education			46,796						1.7		%
Telecom			46,031						1.7		%
Chemicals			37,057						1.4		%
Technology			36,380						1.3		%
Energy			31,153						1.2		%
Utilities			24,997						0.9		%
Gaming/Lodging			17,013						0.6		%
Retail			—						—		%
Total			$	2,713,470					100.0		%

_____________

(1) Includes FBLC's investment in FBLC Senior Loan Fund, LLC, which represents 11.2% of the fair value of investments as of March 31, 2022.

The accompanying notes are an integral part of these consolidated financial statements.

19

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Senior Secured First Lien Debt - 121.3% (b)
1236904 BC, Ltd. (c) (h)						Software/Services						L+7.50% (8.50%), 3/4/2027						$	10,441					$	10,264					$	10,754					0.7		%
1236904 BC, Ltd. (c) (h) (i)						Software/Services						L+5.50% (5.60%), 3/4/2027						18,639						18,079						18,276						1.2		%
Absolute Software Corp. (a) (c) (h)						Software/Services						L+6.00% (6.75%), 7/1/2027						46,405						45,555						45,556						3.0		%
ADCS Clinics Intermediate Holdings, LLC (c) (h)						Healthcare						L+6.25% (7.25%), 5/7/2027						13,772						13,526						13,527						0.9		%
ADCS Clinics Intermediate Holdings, LLC (c)						Healthcare						L+6.25% (7.25%), 5/7/2027						2,119						2,119						2,082						0.1		%
Arch Global Precision, LLC (c)						Industrials						L+4.50% (4.72%), 4/1/2026						2,216						2,216						2,216						0.1		%
Arch Global Precision, LLC (c) (h) (i)						Industrials						L+4.50% (4.72%), 4/1/2026						7,556						7,526						7,556						0.5		%
Arctic Holdco, LLC (c)						Paper & Packaging						L+6.00% (7.00%), 12/23/2026						6,938						6,938						6,834						0.6		%
Arctic Holdco, LLC (c)						Paper & Packaging						L+6.00% (7.00%), 12/23/2026						1,015						1,015						1,000						0.1		%
Arctic Holdco, LLC (c) (h) (i)						Paper & Packaging						L+6.00% (7.00%), 12/23/2026						51,003						49,921						50,238						3.3		%
Armada Parent, Inc. (c) (h)						Industrials						L+5.75% (6.50%), 10/29/2027						45,169						44,292						44,293						2.9		%
Armada Parent, Inc. (c)						Industrials						L+5.75% (6.50%), 10/29/2027						452						452						443						0.0		%
Aventine Holdings, LLC (c)						Media/Entertainment						10.25%, 6/18/2027						22,439						21,881						21,880						1.5		%
Aventine Holdings, LLC (c)						Media/Entertainment						L+6.00% (6.75%), 6/18/2027						25,159						24,658						24,658						1.6		%
Axiom Global, Inc. (c) (h) (i)						Business Services						L+4.75% (5.50%), 10/1/2026						20,525						20,370						20,525						1.4		%
BCPE Oceandrive Buyer, Inc. (c) (i)						Healthcare						L+6.25% (7.00%), 12/29/2028						20,550						20,088						20,088						1.3		%
Bearcat Buyer, Inc. (c) (i)						Healthcare						L+4.25% (5.25%), 7/9/2026						151						151						151						0.0		%
Bearcat Buyer, Inc. (c) (i)						Healthcare						L+4.25% (5.25%), 7/9/2026						726						726						726						0.0		%
Black Mountain Sand, LLC (c)						Energy						L+9.00% (10.50%), 6/28/2024						17,145						17,071						17,145						1.1		%
Capstone Logistics (c)						Transportation						L+4.75% (5.75%), 11/12/2027						1,127						1,127						1,127						0.1		%
Capstone Logistics (c) (h)						Transportation						L+4.75% (5.75%), 11/12/2027						19,208						19,053						19,208						1.3		%
Capstone Logistics (c)						Transportation						P+3.75% (7.00%), 11/12/2025						278						278						278						0.0		%
CDS U.S. Intermediate Holdings, Inc. (a) (h) (i) (p)						Media/Entertainment						L+6.00% (7.00%), 11/24/2025						5,570						5,514						5,565						0.4		%
CHA Holdings, Inc. (c) (i)						Business Services						L+4.50% (5.50%), 4/10/2025						520						493						520						0.0		%
Chudy Group, LLC (c) (h)						Healthcare						L+5.75% (6.75%), 6/30/2027						20,600						20,317						20,318						1.3		%
Cobblestone Intermediate Holdco, LLC (c) (i)						Consumer						L+5.25% (6.25%), 1/29/2026						15,014						14,927						15,014						1.0		%
Cobblestone Intermediate Holdco, LLC (c)						Consumer						L+5.50% (6.25%), 1/29/2026						1,116						1,116						1,116						0.1		%
Cold Spring Brewing, Co. (c) (h) (i)						Food & Beverage						L+4.75% (5.75%), 12/19/2025						7,746						7,694						7,746						0.5		%
Communication Technology Intermediate, LLC (c) (h)						Business Services						L+5.75% (6.75%), 5/5/2027						18,072						17,750						18,072						1.2		%
Communication Technology Intermediate, LLC (c)						Business Services						L+5.75% (6.75%), 5/5/2027						6,286						6,286						6,286						0.4		%
Community Care Health Network, LLC (h)						Healthcare						L+4.75% (4.85%), 2/17/2025						8						7						7						0.0		%

The accompanying notes are an integral part of these consolidated financial statements.

20

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Corfin Industries, LLC (c) (h) (i)						Industrials						L+5.75% (6.75%), 2/5/2026						$	16,520					$	16,277					$	16,520					1.1		%
Cornerstone Chemical, Co.						Chemicals						6.75%, 8/15/2024						14,850						14,369						13,271						0.9		%
CRS-SPV, Inc. (c) (j) (o) (w)						Industrials						L+4.50% (5.50%), 3/8/2022						62						62						62						0.0		%
Drilling Info Holdings, Inc. (c) (i)						Business Services						L+4.25% (4.35%), 7/30/2025						7,024						6,833						7,024						0.5		%
Dynagrid Holdings, LLC (c)						Utilities						L+6.00% (7.00%), 12/18/2025						679						679						679						0.0		%
Dynagrid Holdings, LLC (c) (i)						Utilities						L+6.00% (7.00%), 12/18/2025						14,336						14,101						14,336						0.9		%
FGT Purchaser, LLC (c) (h)						Consumer						L+5.50% (6.50%), 9/13/2027						21,445						21,038						21,038						1.4		%
FGT Purchaser, LLC (c)						Consumer						L+5.50% (6.50%), 9/13/2027						643						643						631						0.0		%
Foresight Energy Operating, LLC (c) (p)						Energy						L+8.00% (9.50%), 6/30/2027						1,091						1,091						1,102						0.1		%
Galway Borrower, LLC (c) (h)						Financials						L+5.25% (6.00%), 9/29/2028						26,354						25,878						25,845						1.7		%
Gold Standard Baking, Inc. (c) (t)						Food & Beverage						P+5.50% (8.75%) 2.00% PIK, 7/25/2022						2,515						2,176						755						0.1		%
Green Energy Partners/Stonewall, LLC						Utilities						L+6.00% (6.50%), 11/12/2026						10,339						10,138						10,235						0.7		%
Health Plan One, Inc. (c) (j)						Financials						L+7.50% (8.50%), 7/15/2025						10,695						10,317						10,695						0.7		%
Higginbotham Insurance Agency, Inc. (c) (h)						Financials						L+5.50% (6.25%), 11/25/2026						11,521						11,380						11,521						0.8		%
Higginbotham Insurance Agency, Inc. (c)						Financials						L+5.50% (6.25%), 11/25/2026						4,091						4,091						4,091						0.3		%
Hospice Care Buyer, Inc. (c)						Healthcare						L+6.50% (7.50%), 12/9/2026						4,579						4,579						4,527						0.3		%
Hospice Care Buyer, Inc. (c) (h)						Healthcare						L+6.50% (7.50%), 12/9/2026						24,561						23,956						24,283						1.6		%
Hospice Care Buyer, Inc. (c) (h)						Healthcare						L+6.50% (7.50%), 12/9/2026						18,191						17,804						17,986						1.2		%
Hospice Care Buyer, Inc. (c)						Healthcare						P+5.50% (8.75%), 12/9/2026						1,705						1,705						1,686						0.1		%
ICR Operations, LLC (c) (h)						Business Services						L+5.50% (6.50%), 11/22/2028						42,773						41,931						41,930						2.8		%
ICR Operations, LLC (c)						Business Services						L+5.25% (6.25%), 11/22/2027						3,089						3,089						3,028						0.2		%
Ideal Tridon Holdings, Inc. (c)						Industrials						L+5.25% (6.25%), 7/31/2024						45						45						45						0.0		%
Ideal Tridon Holdings, Inc. (c) (h) (i)						Industrials						L+5.25% (6.25%), 7/31/2024						820						812						820						0.1		%
Ideal Tridon Holdings, Inc. (c) (h) (i)						Industrials						L+5.25% (6.25%), 7/31/2024						26,837						26,699						26,837						1.8		%
Ideal Tridon Holdings, Inc. (c) (j)						Industrials						L+5.25% (6.25%), 7/31/2023						883						883						883						0.1		%
IG Investments Holdings, LLC (c) (h)						Business Services						L+6.00% (6.75%), 9/22/2028						17,807						17,465						17,465						1.2		%
IG Investments Holdings, LLC (c)						Business Services						L+6.00% (6.75%), 9/22/2027						695						695						682						0.0		%
Integrated Efficiency Solutions, Inc. (c) (o) (w)						Industrials						7.50%, 12/31/2025						1,436						1,436						1,436						0.1		%
Integrated Efficiency Solutions, Inc. (c) (o) (w)						Industrials						7.50%, 12/31/2025						131						131						131						0.0		%
Integrated Global Services, Inc. (c) (i)						Industrials						L+6.00% (7.00%), 2/4/2026						11,385						11,230						10,928						0.7		%
Integrated Global Services, Inc. (c) (j)						Industrials						L+6.00% (7.00%), 2/4/2026						1,622						1,622						1,556						0.1		%
Internap Corp. (c) (h) (p)						Business Services						L+6.50% (7.50%) 5.50% PIK, 5/8/2025						6,294						6,294						5,475						0.4		%

The accompanying notes are an integral part of these consolidated financial statements.

21

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
International Cruise & Excursions, Inc. (c) (i)						Business Services						L+5.25% (6.25%), 6/6/2025						$	4,900					$	4,874					$	4,459					0.3		%
K2 Intelligence Holdings, Inc. (c) (h) (i)						Business Services						L+5.75% (6.75%), 9/23/2024						10,251						10,140						9,539						0.6		%
Kaman Distribution Corp. (c) (h) (i)						Industrials						L+5.00% (5.10%), 8/26/2026						20,448						19,219						20,448						1.4		%
KidKraft, Inc. (c) (w)						Consumer						L+5.00% (6.00%), 8/15/2022						1,060						680						1,060						0.1		%
Kissner Milling Co., Ltd.						Industrials						4.88%, 5/1/2028						2,983						2,983						2,871						0.2		%
Knowledge Pro Buyer, Inc. (c) (i)						Business Services						L+5.75% (6.50%), 12/10/2027						24,800						24,309						24,309						1.6		%
Knowledge Pro Buyer, Inc. (c)						Business Services						L+5.75% (6.50%), 12/10/2027						607						607						595						0.0		%
Labrie Environmental Group, LLC (a) (c) (h)						Industrials						L+5.50% (6.50%), 9/1/2026						22,580						22,229						22,580						1.5		%
Lakeland Tours, LLC (c) (h) (i)						Education						L+7.50% (8.75%) 6.00% PIK, 9/25/2025						3,565						3,548						3,565						0.2		%
Lakeland Tours, LLC (c) (h) (i)						Education						L+7.50% (8.75%) 6.00% PIK, 9/25/2025						4,321						3,955						3,889						0.3		%
Lakeland Tours, LLC (c) (h)						Education						L+12.00% (13.25%) 6.00% PIK, 9/25/2023						1,875						1,875						1,875						0.1		%
Lakeland Tours, LLC (c) (h) (i)						Education						13.25% PIK, 9/27/2027						4,700						3,010						3,290						0.2		%
Lakeview Health Holdings, Inc. (c) (o) (w)						Healthcare						P+6.00% (9.25%), 10/15/2024						414						414						414						0.0		%
Lakeview Health Holdings, Inc. (c) (o) (t) (w)						Healthcare						P+4.50% (7.75%) PIK, 10/15/2024						1,576						600						584						0.0		%
LightSquared, LP						Telecom						15.50% PIK, 11/1/2023						1,794						1,794						1,471						0.1		%
Manna Pro Products, LLC (c)						Consumer						L+6.00% (7.00%), 12/10/2026						4,033						4,033						4,033						0.3		%
Manna Pro Products, LLC (c) (i)						Consumer						L+6.00% (7.00%), 12/10/2026						33,250						32,596						33,250						2.2		%
Manna Pro Products, LLC (c)						Consumer						L+6.00% (7.00%), 12/10/2026						744						744						744						0.0		%
McDonald Worley, P.C. (c)						Business Services						26.00% PIK, 12/31/2024						12,080						12,080						11,826						0.8		%
MCS Acquisition Corp. (c)						Business Services						L+6.00% (7.00%), 10/2/2025						780						780						780						0.1		%
Medical Depot Holdings, Inc. (c) (h) (i)						Healthcare						L+9.50% (10.50%) 4.00% PIK, 6/2/2025						19,929						19,510						19,630						1.3		%
Medical Management Resource Group, LLC (c) (h)						Healthcare						L+5.75% (6.50%), 9/30/2027						16,139						15,830						15,829						1.0		%
MGTF Radio Company, LLC (c) (j) (o)						Media/Entertainment						L+6.00% (7.00%), 4/1/2024						51,596						51,529						42,567						2.8		%
Midwest Can Company, LLC (c) (h) (i)						Paper & Packaging						L+6.00% (7.00%), 3/2/2026						32,385						31,896						32,385						2.1		%
Midwest Can Company, LLC (c) (j)						Paper & Packaging						L+6.00% (7.00%), 3/2/2026						565						565						565						0.0		%
Miller Environmental Group, Inc. (c) (h) (i)						Business Services						L+6.50% (7.50%), 3/15/2024						11,346						11,246						11,346						0.8		%
Miller Environmental Group, Inc. (c) (h) (i)						Business Services						L+6.50% (7.50%), 3/15/2024						10,377						10,269						10,377						0.7		%
Ministry Brands, LLC (c) (i)						Software/Services						L+4.00% (5.00%), 12/2/2022						5,610						5,585						5,610						0.4		%
Mintz Group, LLC (c) (i)						Business Services						L+4.25% (5.25%), 3/18/2026						3,986						3,958						3,986						0.3		%
Mirra-Primeaccess Holdings, LLC (c) (h)						Healthcare						L+6.50% (7.50%), 7/29/2026						49,321						48,419						49,321						3.3		%
Muth Mirror Systems, LLC (c) (h) (i)						Technology						L+5.25% (6.25%), 4/23/2025						15,140						14,973						14,032						0.9		%
New Star Metals, Inc. (c) (h) (i)						Industrials						L+5.00% (6.00%), 1/9/2026						32,817						32,335						32,817						2.2		%

The accompanying notes are an integral part of these consolidated financial statements.

22

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Norvax, LLC (a) (c)						Business Services						L+6.50% (7.50%), 9/13/2024						$	893					$	893					$	893					0.1		%
NTM Acquisition Corp. (c) (h) (i)						Media/Entertainment						L+7.25% (8.25%) 1.00% PIK, 6/7/2024						21,678						21,655						21,093						1.4		%
Odessa Technologies, Inc. (c) (h)						Software/Services						L+5.75% (6.50%), 10/19/2027						14,451						14,172						14,172						0.9		%
Olaplex, Inc. (c) (h) (i)						Consumer						L+6.25% (7.25%), 1/8/2026						16,792						16,567						16,792						1.1		%
ORG GC Holdings, LLC (c) (o)						Business Services						L+6.50% (7.50%) PIK, 11/24/2026						8,343						8,343						8,343						0.6		%
Pie Buyer, Inc. (c) (i)						Food & Beverage						L+5.50% (6.50%), 4/5/2027						28,390						27,644						28,390						1.9		%
Pie Buyer, Inc. (c)						Food & Beverage						L+5.50% (6.50%), 4/5/2027						1,471						1,471						1,471						0.1		%
Pilot Air Freight, LLC (c) (i)						Transportation						L+5.25% (6.25%), 7/25/2024						8,964						8,859						8,964						0.6		%
Pilot Air Freight, LLC (c)						Transportation						L+5.25% (6.25%), 7/25/2024						2,326						2,326						2,326						0.2		%
PlayPower, Inc. (c) (h) (i)						Industrials						L+5.50% (5.72%), 5/8/2026						23,961						23,737						22,786						1.5		%
Pluralsight, LLC (c) (h)						Software/Services						L+8.00% (9.00%), 4/6/2027						18,826						18,496						18,481						1.2		%
Pluralsight, LLC (c) (h)						Software/Services						L+8.00% (9.00%), 4/6/2027						6,728						6,605						6,605						0.4		%
Point Broadband Acquisition, LLC (c) (h)						Telecom						L+6.00% (7.00%), 9/29/2028						19,340						18,874						18,874						1.3		%
Premier Global Services, Inc. (c) (t)						Telecom						P+5.50% (8.75%), 6/8/2023						5,024						4,908						251						0.0		%
Premier Global Services, Inc. (c)						Telecom						P+5.50% (8.75%), 3/31/2022						969						969						969						0.1		%
Prototek, LLC (c) (h)						Industrials						L+5.75% (6.75%), 10/20/2026						11,172						10,971						11,060						0.7		%
Prototek, LLC (c)						Industrials						L+5.75% (6.75%), 10/20/2026						1,242						1,242						1,229						0.1		%
PSKW, LLC (c) (h) (i)						Healthcare						L+6.25% (7.25%), 3/9/2026						29,475						28,961						29,475						2.0		%
PT Network, LLC (c) (h)						Healthcare						L+7.50% (8.50%) 2.00% PIK, 11/30/2023						17,179						17,142						17,179						1.1		%
PT Network, LLC (c)						Healthcare						L+7.50% (8.50%) 2.00% PIK, 11/30/2023						395						395						395						0.0		%
Questex, Inc. (c) (h) (i)						Media/Entertainment						L+5.00% (6.00%), 9/9/2024						15,665						15,525						14,257						0.9		%
Questex, Inc. (c) (j)						Media/Entertainment						L+5.00% (6.00%), 9/9/2024						1,550						1,550						1,410						0.1		%
Reddy Ice Corp. (c) (j)						Food & Beverage						L+6.50% (7.50%), 7/1/2025						1,807						1,795						1,772						0.1		%
Reddy Ice Corp. (c)						Food & Beverage						L+6.50% (7.50%), 7/1/2025						1,476						1,476						1,447						0.1		%
Reddy Ice Corp. (c)						Food & Beverage						L+6.50% (7.50%), 7/1/2025						4,844						4,845						4,707						0.3		%
Reddy Ice Corp. (c) (h) (i)						Food & Beverage						L+6.50% (7.50%), 7/1/2025						19,147						18,812						18,774						1.2		%
Refresh Parent Holdings, Inc. (c)						Healthcare						L+6.50% (7.50%), 12/9/2026						3,035						3,035						3,035						0.2		%
Refresh Parent Holdings, Inc. (c) (h)						Healthcare						L+6.50% (7.50%), 12/9/2026						9,487						9,277						9,487						0.6		%
Refresh Parent Holdings, Inc. (c) (h)						Healthcare						L+6.50% (7.50%), 12/9/2026						1,159						1,136						1,136						0.1		%
Refresh Parent Holdings, Inc. (c)						Healthcare						P+5.50% (8.75%), 12/9/2026						406						406						406						0.0		%
Relativity Oda, LLC (c) (i)						Software/Services						L+7.50% (8.50%) PIK, 5/12/2027						4,885						4,781						4,787						0.3		%

The accompanying notes are an integral part of these consolidated financial statements.

23

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
REP TEC Intermediate Holdings, Inc. (c) (h) (i)						Software/Services						L+6.50% (7.50%), 12/1/2027						$	28,236					$	27,758					$	27,717					1.8		%
Resco Products, Inc. (c)						Industrials						L+7.00% (9.00%) 2.00% PIK, 6/5/2022						9,376						9,376						9,376						0.6		%
Roadsafe Holdings, Inc. (c) (i)						Industrials						L+5.75% (6.75%), 10/19/2027						7,832						7,692						7,692						0.5		%
Roadsafe Holdings, Inc. (c)						Industrials						P+4.75% (8.00%), 10/19/2027						2,879						2,879						2,828						0.2		%
RSC Acquisition, Inc. (c)						Financials						L+5.50% (6.25%), 10/30/2026						4,249						4,249						4,208						0.3		%
RSC Acquisition, Inc. (c)						Financials						L+5.50% (6.25%), 10/30/2026						1,293						1,293						1,280						0.1		%
RSC Acquisition, Inc. (c) (i)						Financials						L+5.50% (6.25%), 10/30/2026						1,847						1,829						1,829						0.1		%
Saturn SHC Buyer Holdings, Inc. (c) (h)						Healthcare						L+6.00% (6.75%), 11/18/2027						33,324						32,671						32,671						2.2		%
Saturn SHC Buyer Holdings, Inc. (c)						Healthcare						P+5.00% (8.25%), 11/18/2027						3,332						3,332						3,267						0.2		%
SCIH Salt Holdings, Inc. (c)						Industrials						L+4.00% (5.00%), 3/17/2025						1,030						1,030						978						0.1		%
Sherlock Buyer Corp. (c) (i)						Business Services						L+5.75% (6.50%), 12/8/2028						11,124						10,904						10,904						0.7		%
Simplifi Holdings, Inc. (c) (h)						Media/Entertainment						L+5.50% (6.25%), 10/1/2027						35,460						34,781						34,779						2.3		%
Skillsoft Corp. (a) (h)						Technology						L+4.75% (5.50%), 7/14/2028						1,460						1,440						1,462						0.1		%
St. Croix Hospice Acquisition Corp. (c) (i)						Healthcare						L+6.00% (7.00%), 10/30/2026						25,680						25,267						25,680						1.7		%
Striper Buyer, LLC (c) (h)						Paper & Packaging						L+5.50% (6.25%), 12/30/2026						12,393						12,287						12,393						0.8		%
Subsea Global Solutions, LLC (c) (i)						Business Services						L+7.00% (8.00%), 3/29/2023						4,697						4,663						4,697						0.3		%
Subsea Global Solutions, LLC (c) (i)						Business Services						L+7.00% (8.00%), 3/29/2023						7,916						7,877						7,916						0.5		%
Subsea Global Solutions, LLC (c) (j)						Business Services						L+7.00% (8.00%), 3/29/2023						963						963						963						0.1		%
SunMed Group Holdings, LLC (c) (h)						Healthcare						L+5.75% (6.50%), 6/16/2028						9,054						8,908						8,909						0.6		%
SunMed Group Holdings, LLC (c)						Healthcare						L+5.75% (6.50%), 6/16/2027						96						96						95						0.0		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						L+6.00% (10.00%) PIK, 3/31/2022						6,633						3,833						464						0.0		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						10.00% PIK, 3/31/2022						3,678						2,986						3,678						0.3		%
Tax Defense Network, LLC (c) (p) (t)						Consumer						L+6.00% (10.00%) PIK, 3/31/2022						37,368						21,646						2,616						0.2		%
Therapy Brands Holdings, LLC (c) (h)						Healthcare						L+4.00% (4.75%), 5/18/2028						3,475						3,459						3,475						0.2		%
Tillamook Country Smoker, LLC (c) (h)						Food & Beverage						L+7.75% (8.75%), 5/19/2022						9,629						9,618						8,493						0.6		%
Tillamook Country Smoker, LLC (c) (j)						Food & Beverage						L+7.75% (8.75%), 5/19/2022						2,561						2,561						2,259						0.1		%
Trilogy International Partners, LLC (a)						Telecom						8.88%, 5/15/2023						15,510						15,240						15,359						1.0		%
Trilogy International Partners, LLC (a) (c) (h)						Telecom						10.00%, 5/1/2022						6,298						6,235						6,298						0.4		%
Trinity Air Consultants Holdings Corp. (c) (h)						Business Services						L+5.25% (6.00%), 6/29/2027						20,424						20,050						20,050						1.3		%
Trinity Air Consultants Holdings Corp. (c)						Business Services						L+5.25% (6.00%), 6/29/2027						1,594						1,594						1,565						0.1		%
Triple Lift, Inc. (c) (i)						Software/Services						L+5.75% (6.50%), 5/8/2028						22,983						22,566						22,983						1.5		%
University of St. Augustine Acquisition Corp. (c) (h) (i)						Education						L+4.25% (5.25%), 2/2/2026						23,520						23,177						23,520						1.6		%
Urban One, Inc.						Media/Entertainment						7.38%, 2/1/2028						1,561						1,561						1,613						0.1		%

The accompanying notes are an integral part of these consolidated financial statements.

24

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
US Oral Surgery Management Holdco, LLC (c)						Healthcare						L+5.50% (6.25%), 11/18/2027						$	428					$	428					$	420					0.0		%
US Oral Surgery Management Holdco, LLC (c) (h)						Healthcare						L+5.50% (6.25%), 11/18/2027						12,173						11,934						11,934						0.8		%
US Salt Investors, LLC (c) (h)						Chemicals						L+5.50% (6.25%), 7/19/2028						20,133						19,756						19,757						1.3		%
Vantage Mobility International, LLC (c) (p) (t) (w)						Transportation						L+6.00% (7.00%), 3/21/2024						1,897						251						251						0.0		%
Vantage Mobility International, LLC (c) (p) (w)						Transportation						L+6.00% (7.00%), 3/21/2024						244						244						244						0.0		%
Vensure Employer Services, Inc. (c) (i)						Business Services						L+4.75% (5.50%), 3/26/2027						9,614						9,536						9,614						0.6		%
Westwood Professional Services, Inc. (c)						Business Services						L+6.00% (7.00%), 5/26/2026						1,007						1,007						982						0.1		%
Westwood Professional Services, Inc. (c) (i)						Business Services						L+6.00% (7.00%), 5/26/2026						8,648						8,495						8,431						0.6		%
WHCG Purchaser III, Inc. (c) (h)						Healthcare						L+5.75% (6.50%), 6/22/2028						29,420						28,876						28,876						1.9		%
WHCG Purchaser III, Inc. (c)						Healthcare						L+5.75% (6.50%), 6/22/2028						919						919						902						0.1		%
WIN Holdings III Corp. (c) (h)						Consumer						L+5.75% (6.50%), 7/16/2028						31,627						31,036						31,035						2.1		%
WIN Holdings III Corp. (c)						Consumer						L+5.75% (6.50%), 7/16/2026						556						556						546						0.0		%
WMK, LLC (c) (j)						Business Services						L+5.75% (6.75%), 9/5/2025						2,558						2,550						2,558						0.2		%
WMK, LLC (c)						Business Services						L+5.75% (6.75%), 9/5/2025						352						350						352						0.0		%
WMK, LLC (c) (h) (i)						Business Services						L+5.75% (6.75%), 9/5/2025						18,912						18,714						18,912						1.3		%
WMK, LLC (c) (j)						Business Services						L+5.75% (6.75%), 9/5/2024						2,618						2,618						2,618						0.2		%
Subtotal Senior Secured First Lien Debt																								$	1,865,403					$	1,831,170					121.3		%
Senior Secured Second Lien Debt - 16.2% (b)
Accentcare, Inc. (c) (h)						Healthcare						L+8.75% (9.50%), 6/21/2027						$	30,152					$	29,588					$	30,152					2.0		%
Anchor Glass Container Corp. (c) (j)						Paper & Packaging						L+7.75% (8.75%), 12/6/2024						6,667						6,615						2,003						0.1		%
Aruba Investments Holdings, LLC (i)						Chemicals						L+7.75% (8.50%), 11/24/2028						3,759						3,710						3,765						0.2		%
Astro AB Merger Sub, Inc. (a) (c) (h)						Financials						L+8.00% (9.00%), 4/30/2025						8,162						8,138						8,162						0.5		%
Carlisle FoodService Products, Inc. (c) (h)						Consumer						L+7.75% (8.75%), 3/20/2026						10,719						10,606						10,166						0.7		%
CDS U.S. Intermediate Holdings, Inc. (a) (p)						Media/Entertainment						L+8.00% (9.00%) 7.00% PIK, 11/24/2027						10,324						10,271						10,262						0.7		%
CommerceHub, Inc. (c) (h)						Technology						L+7.00% (7.75%), 12/29/2028						12,360						12,306						12,125						0.8		%
Corelogic, Inc. (h)						Business Services						L+6.50% (7.00%), 6/4/2029						10,808						10,707						10,882						0.7		%
HAH Group Holding Company, LLC (c) (h)						Healthcare						L+8.50% (9.50%), 10/30/2028						12,445						12,180						12,445						0.8		%
Integrated Efficiency Solutions, Inc. (c) (o) (w)						Industrials						10.00% PIK, 12/31/2026						1,436						780						780						0.1		%
Mercury Merger Sub, Inc. (c) (h)						Business Services						L+6.50% (7.00%), 8/2/2029						13,965						13,855						13,965						0.9		%
MLN US Holdco, LLC (a) (c) (h) (i)						Technology						L+8.75% (8.85%), 11/30/2026						3,000						2,963						2,699						0.2		%
ORG GC Holdings, LLC (c) (o)						Business Services						18.00% PIK, 11/24/2027						3,439						3,439						3,439						0.2		%
PetVet Care Centers, LLC (c) (h)						Healthcare						L+6.25% (6.35%), 2/13/2026						3,539						3,530						3,539						0.2		%

The accompanying notes are an integral part of these consolidated financial statements.

25

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Project Boost Purchaser, LLC (c) (j)						Business Services						L+8.00% (8.10%), 5/31/2027						$	1,848					$	1,848					$	1,848					0.1		%
Proofpoint, Inc. (c) (h)						Software/Services						L+6.25% (6.75%), 8/31/2029						8,541						8,500						8,541						0.6		%
QuickBase, Inc. (c)						Technology						L+8.00% (8.10%), 4/2/2027						7,484						7,386						7,484						0.5		%
RealPage, Inc. (c) (i)						Software/Services						L+6.50% (7.25%), 4/23/2029						13,647						13,460						13,756						0.9		%
Recess Holdings, Inc. (c) (h)						Industrials						L+7.75% (8.75%), 9/29/2025						16,134						16,003						16,134						1.1		%
River Cree Enterprises, LP (a) (c) (m)						Gaming/Lodging						10.00%, 5/17/2025						CAD	21,275					16,493						16,836						1.1		%
SSH Group Holdings, Inc. (c) (h)						Education						L+8.25% (8.38%), 7/30/2026						10,122						10,064						10,122						0.7		%
Therapy Brands Holdings, LLC (c) (h)						Healthcare						L+6.75% (7.50%), 5/18/2029						3,275						3,245						3,275						0.2		%
Travelpro Products, Inc. (a) (c) (w)						Consumer						14.00%, 10.75% PIK, 11/21/2022						2,861						2,861						2,282						0.2		%
Travelpro Products, Inc. (a) (c) (m) (w)						Consumer						13.00%, 2.00% PIK, 11/21/2022						CAD	3,304					2,557						2,086						0.2		%
USIC Holdings, Inc. (c) (h)						Business Services						L+6.50% (7.25%), 5/14/2029						5,798						5,744						5,798						0.4		%
Vantage Mobility International, LLC (c) (p) (t) (w)						Transportation						L+6.00% (7.00%), 3/21/2024						1,134						17						17						0.0		%
Vantage Mobility International, LLC (c) (p) (t) (w)						Transportation						L+6.00% (7.00%) PIK, 3/21/2024						3,578						2,914						—						—		%
Victory Buyer, LLC (c) (h)						Industrials						L+7.00% (7.50%), 11/15/2029						31,686						31,369						31,369						2.1		%
Subtotal Senior Secured Second Lien Debt																								$	251,149					$	243,932					16.2		%
Subordinated Debt - 7.8% (b)
Del Real, LLC (c) (t) (w)						Food & Beverage						14.50%, 2.00% PIK, 4/1/2023						$	4,239					$	3,131					$	3,576					0.2		%
Encina Equipment Finance, LLC (c) (o)						Financials						L+7.75% (9.00%), 12/31/2028						38,100						37,964						37,964						2.5		%
Park Ave RE Holdings, LLC (c) (j) (o) (v)						Financials						13.00%, 12/30/2022						1,537						1,537						1,537						0.1		%
Siena Capital Finance, LLC (c) (j) (o) (z)						Financials						12.50%, 11/27/2026						75,000						74,995						75,000						5.0		%
Subtotal Subordinated Debt																								$	117,627					$	118,077					7.8		%
Collateralized Securities - 2.5% (b)
Collateralized Securities - Debt Investments
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F (a) (c) (j) (p)						Diversified Investment Vehicles						L+7.50% (7.63%), 1/20/2027						$	10,728					$	9,945					$	8,237					0.6		%
NewStar Arlington Senior Loan Program, LLC 14-1A FR (a) (c) (j) (p)						Diversified Investment Vehicles						L+11.00% (11.12%), 4/25/2031						4,750						4,585						4,575						0.3		%
Whitehorse, Ltd. 2014-1A E (a) (c) (p)						Diversified Investment Vehicles						L+4.55% (4.68%), 5/1/2026						8,000						7,899						7,171						0.5		%
Collateralized Securities - Equity Investments (n)
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB (a) (c) (k) (p)						Diversified Investment Vehicles						0.00%, 1/20/2027						$	31,575					$	6,285					$	—					—		%
NewStar Arlington Senior Loan Program, LLC 14-1A SUB (a) (c) (j) (k) (p)						Diversified Investment Vehicles						23.85%, 4/25/2031						31,603						15,223						17,114						1.1		%
OFSI Fund, Ltd. 2014-6A Side Letter (a) (c)						Diversified Investment Vehicles						0.00%, 3/20/2025						1,970						47						—						—		%
Whitehorse, Ltd. 2014-1A Side Letter (a) (c) (p)						Diversified Investment Vehicles						0.00%, 5/1/2026						1,886						134						—						—		%
Whitehorse, Ltd. 2014-1A SUB (a) (c) (k) (p)						Diversified Investment Vehicles						0.00%, 5/1/2026						36,000						6,965						—						—		%
Subtotal Collateralized Securities																								$	51,083					$	37,097					2.5		%

The accompanying notes are an integral part of these consolidated financial statements.

26

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
Equity/Other - 36.3% (b) (d)
Aden & Anais Holdings, Inc. (c) (e) (w)						Retail												4,470						$	—					$	—					—		%
Answers Corp. (c) (e) (p)						Media/Entertainment												908,911						10,643						145						0.0		%
Baker Hill Acquisition, LLC (c) (e) (w)						Financials												22,653						—						—						—		%
Black Mountain Sand, LLC (c) (e) (u)						Energy												55,463						—						478						0.0		%
CDS U.S. Intermediate Holdings, Inc. (a) (e) (p)						Media/Entertainment												539,708						1,224						5,442						0.4		%
CDS U.S. Intermediate Holdings, Inc. (a) (c) (e) (p)						Media/Entertainment												874,000						437						2,884						0.2		%
Clover Technologies Group, LLC (c) (e)						Industrials												180,274						1,153						29						0.0		%
Clover Technologies Group, LLC (c) (e)						Industrials												2,753						275						627						0.0		%
CRS-SPV, Inc. (c) (e) (j) (o) (w)						Industrials												246						2,219						1,266						0.1		%
Danish CRJ, Ltd. (a) (c) (e) (o) (r)						Transportation												5,002						—						—						—		%
Data Source Holdings, LLC (c) (e) (w)						Business Services												10,617						140						276						0.0		%
Del Real, LLC (c) (e) (u) (w)						Food & Beverage												670,510						382						—						—		%
Dyno Acquiror, Inc. (c) (e) (w)						Consumer												134,102						58						107						0.0		%
Encina Equipment Finance, LLC (c) (e) (o) (u)						Financials												79,479,085						81,693						81,693						5.4		%
FBLC Senior Loan Fund, LLC (a) (c) (o) (z)						Diversified Investment Vehicles												304,934						304,934						304,934						20.2		%
First Eagle Greenway Fund II, LLC (a) (j) (p)						Diversified Investment Vehicles												5,329						4,049						464						0.0		%
Foresight Energy Operating, LLC (c) (e) (p) (u)						Energy												158,093						2,087						3,965						0.3		%
HemaSource, Inc. (c) (e) (w)						Healthcare												223,503						168						268						0.0		%
Integrated Efficiency Solutions, Inc. (c) (e) (o)						Industrials												55,991						—						—						—		%
Integrated Efficiency Solutions, Inc. (c) (e) (o)						Industrials												57,427						—						—						—		%
Internap Corp (c) (e) (p)						Business Services												1,293,189						543						1,552						0.1		%
Jakks Pacific, Inc. (e) (p) (s)						Consumer												237,436						2,385						2,412						0.2		%
Jakks Pacific, Inc. (c) (e) (p)						Consumer												5,303						185						785						0.1		%
Kahala Ireland OpCo Designated Activity Company (a) (c) (o) (y)						Transportation												1						—						23,732						1.6		%
Kahala Ireland OpCo Designated Activity Company (a) (c) (e) (o) (y)						Transportation												3,250,000						—						3,250						0.2		%
Kahala US OpCo, LLC (a) (c) (e) (o) (x)						Transportation						13.00%						4,413,472						—						—						—		%
KidKraft, Inc. (c) (e) (u) (w)						Consumer												2,682,257						—						1,048						0.1		%
Lakeview Health Holdings, Inc. (c) (e) (o) (w)						Healthcare												5,272						—						—						—		%
McDonald Worley, P.C. (c) (e)						Business Services												248,600						104						1,272						0.1		%
MCS Acquisition Corp. (c) (e)						Business Services												31,521						4,103						2,431						0.2		%
MGTF Holdco, LLC (c) (e) (o) (u)						Media/Entertainment												402,000						—						—						—		%
Motor Vehicle Software Corp. (c) (e) (w)						Business Services												223,503						318						386						0.0		%
New Constellis Holdings Inc. (c) (e) (w)						Business Services												2,316						67						—						—		%
ORG GC Holdings, LLC (c) (e) (o)						Business Services												93,380						212						212						0.0		%
ORG GC Holdings, LLC (c) (e) (o)						Business Services												1,771						—						—						—		%
Park Ave RE Holdings, LLC (c) (e) (j) (o) (v)						Financials												719						1,623						4,461						0.3		%
PennantPark Credit Opportunities Fund II, LP (a) (p)						Diversified Investment Vehicles												8,739						3,936						4,953						0.3		%
Point Broadband Acquisition, LLC (c) (e)						Telecom												2,099,333						2,099						2,099						0.1		%

The accompanying notes are an integral part of these consolidated financial statements.

27

---

FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021
Portfolio Company (f) (q)						Industry						Investment Coupon Rate / Maturity (l)						Principal / Number of Shares						Amortized Cost						Fair Value						% of Net Assets (b)
PT Network, LLC (c) (e) (u)						Healthcare												3						$	—					$	2,813					0.2		%
RMP Group, Inc. (c) (e) (u) (w)						Financials												223						164						340						0.0		%
Schweiger Dermatology Group, LLC (c) (e) (u) (w)						Healthcare												265,024						—						—						—		%
Siena Capital Finance, LLC (c) (j) (o) (z)						Financials												41,789,400						42,499						65,609						4.3		%
Skillsoft Corp (a) (e) (s)						Technology												248,712						2,636						2,275						0.2		%
Smile Brands, Inc. (c) (w)						Healthcare												712						—						1,437						0.1		%
Squan Holding Corp. (c) (e)						Telecom												180,835						—						—						—		%
Tap Rock Resources, LLC (c) (g) (p) (u)						Energy												18,356,442						6,490						8,742						0.6		%
Tax Defense Network, LLC (c) (e) (p)						Consumer												147,099						425						—						—		%
Tax Defense Network, LLC (c) (e) (p)						Consumer												633,382						—						—						—		%
Team Waste, LLC (c) (e) (p) (u) (w)						Industrials												128,483						2,569						3,073						0.2		%
Tennenbaum Waterman Fund, LP (a) (j) (p)						Diversified Investment Vehicles												10,000						10,000						9,764						0.6		%
Travelpro Products, Inc. (a) (c) (e) (w)						Consumer												447,007						506						—						—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												39,769						132						—						—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												3,155						—						—						—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												4,206						31						—						—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												99,236						—						—						—		%
United Biologics, LLC (c) (e) (u) (w)						Healthcare												223						35						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												10,000						10						—						—		%
USASF Holdco, LLC (c) (e) (u)						Financials												490						490						510						0.0		%
USASF Holdco, LLC (c) (e) (u)						Financials												139						139						278						0.0		%
Vantage Mobility International, LLC (c) (e) (p) (w)						Transportation												512,923						—						—						—		%
Vantage Mobility International, LLC (c) (e) (p) (w)						Transportation												4,439,484						3,140						—						—		%
Vantage Mobility International, LLC (c) (e) (p) (w)						Transportation												1,940,977						—						—						—		%
World Business Lenders, LLC (c) (e)						Financials												922,669						3,750						2,676						0.2		%
WPNT, LLC (c) (e) (o) (u)						Media/Entertainment												402,000						—						—						—		%
Wythe Will Tzetzo, LLC (c) (e) (u) (w)						Food & Beverage												22,312						302						—						—		%
YummyEarth, Inc. (c) (e) (w)						Food & Beverage												223						—						—						—		%
Subtotal Equity/Other																								$	498,355					$	548,688					36.3		%
TOTAL INVESTMENTS - 184.1% (b)																								$	2,783,617					$	2,778,964					184.1		%

Forward foreign currency contracts:

Counterparty

Contract to Deliver

In Exchange For

Maturity Date

Unrealized Depreciation

Goldman Sachs International

CAD 21,807

$

17,388

2/17/2022

$

266

_____________

(a)All of the Company's investments, except the investments noted by this footnote, are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the "1940 Act"). Under the 1940 Act, the Company may 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. Qualifying assets represent 81.4% of the Company's total assets. The significant majority of all investments held are deemed to be illiquid.

(b)Percentages are based on net assets as of December 31, 2021.

(c)The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's Board of Directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).

(d)All amounts are in thousands except share amounts.

(e)Non-income producing at December 31, 2021.

The accompanying notes are an integral part of these consolidated financial statements.

28

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

(f)The Company has various unfunded commitments to portfolio companies. Please refer to Note 7 - Commitments and Contingencies for details of these unfunded commitments.

(g)The commitment related to this investment is discretionary.

(h)The Company's investment or a portion thereof is pledged as collateral under the JPM Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(i)The Company's investment or a portion thereof is pledged as collateral under the Wells Fargo Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(j)The Company's investment or a portion thereof is pledged as collateral under the MassMutual Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(k)The Collateralized Securities - subordinated notes are treated as equity investments and are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying fund’s securities less contractual payments to debt holders and fund expenses. The estimated yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.

(l)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L") or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, the Company has provided the spread over LIBOR or Prime and the current interest rate in effect at December 31, 2021. Certain investments are subject to a LIBOR or Prime interest rate floor. For fixed rate loans, a spread above a reference rate is not applicable. For floating rate securities the all-in rate is disclosed within parentheses.

(m)The principal amount (par amount) is denominated in Canadian Dollars ("CAD").

(n)For equity investments in Collateralized Securities, the effective yield is presented in place of the investment coupon rate for each investment. Refer to footnote (k) for a further description of an equity investment in a Collateralized Security.

(o)The provisions of the 1940 Act classify investments based on the level of control that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be "non-controlled" when the Company owns 25% or less of the portfolio company's voting securities and/or does not have the power to exercise control over the management or policies of such portfolio company. A company is generally presumed to be "controlled" when the Company owns more than 25% of the portfolio company's voting securities and/or has the power to exercise control over the management or policies of such portfolio company. The Company classifies this investment as "controlled".

(p)The provisions of the 1940 Act classify investments further based on the level of ownership that the Company maintains in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as "non-affiliated" when the Company owns less than 5% of a portfolio company's voting securities and "affiliated" when the Company owns 5% or more of a portfolio company's voting securities. The Company classifies this investment as "affiliated".

(q)Unless otherwise indicated, all investments in the consolidated schedule of investments are non-affiliated, non-controlled investments.

(r)The Company's investment is held through the Consolidated Holding Company, Kahala Aviation Holdings, LLC, which owns 49% of the operating company, Danish CRJ LTD.

(s)The investment is not a restricted security. All other securities are restricted securities.

(t)The investment is on non-accrual status as of December 31, 2021.

(u)Investments are held in the taxable wholly-owned, consolidated subsidiary, 54th Street Equity Holdings, Inc.

(v)The Company's investment is held through the consolidated subsidiary, Park Ave RE, Inc., which owns 100% of the equity of the operating company, Park Ave RE Holdings, LLC.

(w)The investment is held through BSP TCAP Acquisition Holdings LP which is an affiliated acquisition entity utilized for the Triangle Transaction. Due to certain restrictions, such as limits on the number of partners allowable within the equity structures of the newly acquired investments, these investments are still held within the acquisition entity as of December 31, 2021.

(x)The Company's investment is held through the consolidated subsidiaries, Kahala Aviation Holdings, LLC and Kahala Aviation US, Inc. which own 100% of the equity of the operating company, Kahala US OpCo LLC.

(y)The Company's investment is held through the consolidated subsidiary, Kahala Aviation Holdings, LLC, which owns 100% of the equity of the operating company, Kahala Ireland OpCo Designated Activity Company.

(z)The Company's investment falls under the definition of a significant subsidiary, as it exceeded the threshold of at least one of the tests under Rule 4-08(g), but did not exceed the threshold of any tests under Rule 3-09. See Note 3 for additional disclosure.

The accompanying notes are an integral part of these consolidated financial statements.

29

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FRANKLIN BSP LENDING CORPORATION

CONSOLIDATED SCHEDULES OF INVESTMENTS

(dollars in thousands)

December 31, 2021

The following table shows the portfolio composition by industry grouping based on fair value at December 31, 2021:

			At December 31, 2021
			Investments at Fair Value						Percentage of Total Portfolio
Healthcare			$	422,430					15.2		%
Diversified Investment Vehicles (1)			357,212						12.9		%
Business Services			339,083						12.2		%
Financials			337,699						12.2		%
Industrials			301,669						10.9		%
Software/Services			197,238						7.1		%
Media/Entertainment			186,555						6.7		%
Consumer			150,903						5.4		%
Paper & Packaging			105,418						3.8		%
Food & Beverage			79,390						2.9		%
Transportation			59,397						2.1		%
Education			46,261						1.7		%
Telecom			45,321						1.6		%
Technology			40,077						1.4		%
Chemicals			36,793						1.3		%
Energy			31,432						1.1		%
Utilities			25,250						0.9		%
Gaming/Lodging			16,836						0.6		%
Retail			—						—		%
Total			$	2,778,964					100.0		%

_____________

(1) Includes FBLC's investment in FBLC Senior Loan Fund, LLC, which represents 11.0% of the fair value of investments as of December 31, 2021.

The accompanying notes are an integral part of these consolidated financial statements.

30

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Note 1 — Organization and Basis of Presentation

Franklin BSP Lending Corporation (the “Company” or "FBLC") is an externally managed, non-diversified closed-end management investment company incorporated in Maryland in May 2010 that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (“the 1940 Act”). In addition, the Company has elected to be treated for tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s investment activities are managed by Franklin BSP Lending Adviser, L.L.C. (the “Adviser”), a subsidiary of Benefit Street Partners L.L.C. (“BSP”) and supervised by the Company’s Board of Directors ("Board"), a majority of whom are independent of the Adviser and its affiliates. As a BDC, the Company is required to comply with certain regulatory requirements.

    The Company’s investment objective is to generate both current income and to a lesser extent long-term capital appreciation through debt and equity investments. The Company invests primarily in first and second lien senior secured loans and mezzanine debt issued by middle market companies. The Company defines middle market companies as those with annual revenues up to $1 billion. The Company also purchases interests in loans through secondary market transactions. First and second lien secured loans generally are senior debt instruments that rank ahead of subordinated debt and equity in bankruptcy priority and are generally secured by liens on the operating assets of a borrower, which may include inventory, receivables, plant, property, and equipment. Mezzanine debt is subordinated to senior loans and is generally unsecured. The Company may invest in the equity and junior debt tranches of collateralized loan obligation investment vehicles (“Collateralized Securities” or "CLOs"). CLOs are entities that are formed to manage a portfolio of senior secured loans made to companies whose debt is typically rated below investment grade or, in limited circumstances, unrated. The senior secured loans within these Collateralized Securities meet specified credit and diversity criteria and are subject to concentration limitations in order to create a diverse investment portfolio. In most cases, companies to whom the Company provides customized financing solutions will be privately held at the time the Company invests in them.

    On February 1, 2019, Franklin Resources, Inc. (“FRI”) and Templeton International, Inc. (collectively with FRI, “Franklin Templeton”) acquired BSP, including BSP’s 100% ownership interest in the Adviser (the “FT Transaction”).

    While the structure of the Company’s investments is likely to vary, the Company may invest in senior secured debt, senior unsecured debt, subordinated secured debt, subordinated unsecured debt, mezzanine debt, convertible debt, convertible preferred equity, preferred equity, common equity, warrants, CLOs, and other instruments, many of which generate current yields. If the Adviser deems appropriate, the Company may invest in more liquid senior secured and second lien debt securities, some of which may be traded. The Company will make such investments to the extent allowed by the 1940 Act and consistent with its continued qualification as a RIC for federal income tax purposes.

    On January 25, 2011, the Company commenced its initial public offering (the “IPO”) on a “reasonable best efforts basis” of up to 150.0 million shares of common stock, $0.001 par value per share, and subsequently amended the offering to issue up to an additional 101.1 million shares of its common stock (the “Offering”). The Company closed the Offering to new investments on April 30, 2015. As of March 31, 2022, the Company had issued 233.3 million shares of common stock for gross proceeds of $2.4 billion including the shares purchased by affiliates and shares issued under the Company's distribution reinvestment plan (“DRIP”). As of March 31, 2022, the Company had repurchased a cumulative 33.9 million shares of common stock through its share repurchase program for payments of $282.3 million.

    The Company intends to co-invest, subject to the conditions included in the exemptive order the Company received from the Securities and Exchange Commission ("SEC"), with certain of its affiliates. The Company believes that such co-investments may afford it additional investment opportunities and an ability to achieve greater diversification.

    As a BDC, the Company is generally required to invest at least 70% of its total assets primarily in securities of private and certain U.S. public companies (other than certain financial institutions), cash, cash equivalents and U.S. Government securities, and other high-quality debt investments that mature in one year or less.

    The Company is permitted to borrow money from time to time within the levels permitted by the 1940 Act (which generally currently allows it to incur leverage for up to one half of its total assets). The Company has used, and expects to continue to use, its credit facilities and other borrowings, along with proceeds from the rotation of its portfolio and proceeds from private securities offerings to finance its investment objectives.

    Although the Small Business Credit Availability Act of 2018 (the “SBCAA”) amended the 1940 Act to permit BDCs to incur increased leverage if certain conditions are met, the Company does not presently intend to avail itself of the increased

31

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

leverage limits permitted by the SBCAA. If the Company were to avail itself of the increased leverage permitted by the SBCAA, this would effectively allow the Company to double its leverage, which would increase leverage risk and expenses.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

    The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements reflect all adjustments, both normal and recurring which, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition for the periods presented. The Company is an investment company and follows accounting and reporting guidance in Accounting Standards Codification ("ASC") Topic 946 - Financial Services - Investment Companies ("ASC 946").

    We have also formed and expect to continue to form consolidated subsidiaries (the “Consolidated Holding Companies”). The Company consolidates the following subsidiaries for accounting purposes: BDCA Funding I, LLC (“Funding I”), BDCA 57th Street Funding, LLC ("57th Street"), BDCA Asset Financing, LLC ("BDCA Asset Financing") and 54th Street Equity Holdings, Inc. Prior to January 20, 2021, the Company also consolidated BDCA-CB Funding, LLC (“CB Funding”). Refer to Note 3 and Note 5 for more information. All significant intercompany balances and transactions have been eliminated in consolidation. 

Interim financial statements are prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, the consolidated financial statements may not include all of the information and notes required by U.S. GAAP for annual consolidated financial statements. U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets, and any other parameters used in determining these estimates could cause actual results to differ materially. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending on December 31, 2022.

Use of Estimates

    The preparation of financial statements in conformity with U.S. 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 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 946, the Company will generally not consolidate its investment in a company other than a substantially or wholly-owned investment company or controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the accounts of the Company's substantially wholly-owned subsidiaries in its consolidated financial statements. Although the Company owns more than 25% of the voting securities of FBLC Senior Loan Fund, LLC, ("SLF"), the Company does not have sole control over significant actions of SLF for purposes of the 1940 Act or otherwise, and thus does not consolidate its interest.

Valuation of Portfolio Investments

    Portfolio investments are reported on the consolidated statements of assets and liabilities at fair value. On a quarterly basis, the Company performs an analysis of each investment to determine fair value as follows:

    Securities for which market quotations are readily available on an exchange are valued at the reported closing price on the valuation date. The Company may also obtain quotes with respect to certain of the Company's investments from pricing services or brokers or dealers in order to value assets. When doing so, the Company determines whether the quote obtained is readily available according to U.S. GAAP to determine the fair value of the security. If determined to be readily available, the Company uses the quote obtained.

    Investments without a readily determined market value are primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that the Company may take into account in fair value pricing the Company's investments

32

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

include, as relevant: 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, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process.

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

•Each portfolio company or investment will be valued by the Adviser, with assistance from one or more independent valuation firms engaged by the Company's Board of Directors or as noted below, with respect to investments in an investment fund;

•The independent valuation firm(s) conduct independent appraisals and make an independent assessment of the value of each investment; and

•The Board of Directors determines the fair value of each investment, in good faith, based on the input of the Adviser and independent valuation firm (to the extent applicable).

    For an investment in an investment fund that does not have a readily determinable fair value, the Company measures the fair value of the investment predominately based on the net asset value per share of the investment fund if the net asset value of the investment fund is calculated in a manner consistent with the measurement principles of ASC 946, as of the Company's measurement date. However, there can be no assurance that the Company will be able to sell such investment at a price equal to its net asset value per share and the Company may ultimately sell such investment at a discount to its net asset value per share.

    The Company’s investments in funds that offer periodic liquidity have redemption frequencies which range from monthly to quarterly and redemption notice periods which range from 30 to 90 days. Investments in private equity typically do not offer liquidity and instead, capital is returned through periodic distributions.

    Because there is not a readily available market value for most of the investments in its portfolio, the Company values substantially all of its portfolio investments at fair value as determined in good faith by its Board of Directors, as described herein. 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 Company's investments may fluctuate from period to period. Additionally, the fair value of the Company's 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 the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, the Company could realize significantly less than the value at which the Company has recorded it.

Investment Classification

    The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “Control” is defined as the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. In addition, any person “who owns beneficially, either directly or through one or more controlled companies, more than 25% of the voting securities of a company and/or has the power to exercise control over the management or policies of such portfolio company shall be presumed to control such company. Typically, any person who does not so own more than 25% of the voting securities of any company and/or does not have the power to exercise control over the management or policies of such portfolio company shall be presumed not to control such company.” Consistent with the 1940 Act, “Affiliated Investments” are defined as those investments in companies in which the Company owns 5% or more of the voting securities. Consistent with the 1940 Act, “Non-affiliated Investments” are defined as investments that are neither Control Investments nor Affiliated Investments.

Cash and Cash Equivalents

Cash and cash equivalents include short-term, liquid investments in a money market deposit account. Cash and cash equivalents are carried at cost which approximates fair value.

33

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Offering Costs

    The Company incurs certain costs in connection with the registration of shares of its common stock. Offering costs principally relate to professional fees, printing costs, direct marketing expenses, due diligence costs, fees paid to regulators, and other expenses, including the salaries and/or expenses of the Adviser and its affiliates engaged in registering and marketing the Company’s common stock. Such allocated expenses of the Adviser and its affiliates may include the development of marketing materials and presentations, training and educational meetings, and generally coordinating the marketing process for the Company.

    Pursuant to the Investment Advisory Agreement, the Company and the Adviser have agreed that the Company will not be liable for organization and offering costs, including transfer agent fees, in excess of 1.5% of the aggregate gross proceeds from the Company’s on-going offering. Should the Company resume continually offering its shares, any offering costs incurred will be capitalized and amortized as an expense on a straight-line basis over a 12-month period. For the periods ended March 31, 2022 and 2021, the Company did not incur any offering costs.

Deferred Financing Costs

    Financing costs incurred in connection with the Company’s unsecured notes and revolving credit facilities are capitalized and amortized into expense using the straight-line method, which approximates the effective yield method over the life of the respective facility. See Note 5 - Borrowings for details on the credit facilities and unsecured notes.

Distributions

    The Company’s Board of Directors authorizes and declares cash distributions payable on a quarterly basis to stockholders of record on each record date. The amount of each such distribution is subject to the discretion of the Board of Directors and applicable legal restrictions related to the payment of distributions. The Company calculates each stockholder’s specific distribution amount for the quarter using record and declaration dates. The distributions are payable by the fifth day following each record date. From time to time, the Company may also pay interim distributions, including capital gains distributions, at the discretion of the Company’s Board of Directors. The Company’s distributions may exceed earnings, especially during the period before it has substantially invested the proceeds from the offering. As a result, a portion of the distributions made by the Company may represent a return of capital for U.S. federal income tax purposes. A return of capital is a return of each stockholder’s investment rather than earnings or gains derived from the Company’s investment activities.

    The Company may fund cash distributions to stockholders from any sources of funds available to the Company, including advances from the Adviser that are subject to reimbursement, as well as offering proceeds, borrowings, net investment income from operations, capital gain proceeds from the sale of assets, and non-capital gain proceeds from the sale of assets. The Company has not established limits on the amount of funds it may use from available sources to make distributions. See Note 13 - Income Tax Information and Distributions to Stockholders for additional information.

Revenue Recognition

Interest Income

    Investment transactions are accounted for on the trade date. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discount and amortization of premium on investments.

    The Company has a number of investments in Collateralized Securities. Interest income from investments in the “equity” class of these Collateralized Securities (in the Company's case, preferred shares or subordinated notes) is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC 325-40-35, Beneficial Interests in Securitized Financial Assets ("ASC 325-40-35"). The Company monitors the expected cash inflows from its equity investments in Collateralized Securities, including the expected principal repayments. The effective yield is determined and updated quarterly. In accordance with ASC 325-40, investments in CLOs are periodically assessed for other-than-temporary impairment ("OTTI"). When the Company determines that a CLO has OTTI, the amortized cost basis of the CLO is written down as of the date of the determination based on events and information evaluated and that write-down is recognized as a realized loss.

34

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Dividend Income

Dividend income on preferred equity investments is recorded 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 investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies.

Dividend income from SLF is recorded on accrual basis once dividends are declared by SLF's board of directors. Distributions from SLF are evaluated at the time of distribution to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions as dividend income unless there are sufficient accumulated tax-basis earnings and profit in SLF prior to distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

Fee Income

    Fee income, such as structuring fees, origination, closing, amendment fees, commitment, termination, and other upfront fees are generally non-recurring and are recognized as income when earned, either upon receipt or amortized into income. Upon the re-payment of a loan or debt security, any prepayment penalties and unamortized loan origination, structuring, closing, commitment, and other upfront fees are recorded as income.

Payment-in-Kind Interest/Dividends

    The Company may hold debt and equity investments in its portfolio that contain payment-in-kind (“PIK”) interest and dividend provisions. PIK interest and PIK dividend, which represent contractually deferred interest or dividends that add to the investment balance that is generally due at maturity, are recorded on accrual basis to the extent such amounts are expected to be collected.

Non-accrual Income

    Investments may be placed on non-accrual status when principal or interest payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued interest which may include un-capitalized PIK interest is generally reversed when an investment is placed on non-accrual status. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management's judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current.

Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation

    Gain or loss on the sale of investments is calculated using the specific identification method. The Company measures realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when a gain or loss is realized.

Income Taxes

    The Company has elected to be treated for federal income tax purposes as a RIC under Subchapter M of the Code. Generally, a RIC is not subject to federal income taxes in respect of each taxable year if it distributes dividends for federal income tax purposes to stockholders of an amount generally equal to at least 90% of ‘‘investment company taxable income,’’ as defined in the Code, and determined without regard to any deduction for dividends paid. Distributions declared prior to the filing of the previous year's tax return and paid up to twelve months after the previous tax year can be carried back to the prior tax year in determining the distributions paid in such tax year. The Company intends to make sufficient distributions to maintain its ability to be subject to be taxed as a RIC each year. The Company may be subject to federal excise tax imposed at a rate of 4% on certain undistributed amounts. See Note 13 - Income Tax Information and Distributions to Stockholders for additional information.

35

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Note 3 — Fair Value of Financial Instruments

    The Company’s fair value measurements are classified into a fair value hierarchy in accordance with ASC Topic 820, Fair Value Measurement, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

    The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, if any, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value:

•Level 1—Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

•Level 3—Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

    The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

    For investments for which Level 1 inputs, such as quoted prices, were not available at March 31, 2022 and December 31, 2021, the investments were valued at fair value as determined in good faith using the valuation policy approved by the Board of Directors using Level 2 and Level 3 inputs. The Company evaluates the source of inputs, including any markets in which the Company's investments are trading, in determining fair value. Due to the inherent uncertainty in the valuation process, the estimate of fair value of the Company’s investment portfolio at March 31, 2022 and December 31, 2021 may differ materially from values that would have been used had a ready market for the securities existed.

    In addition to using the above inputs in investment valuations, the Company continues to employ the valuation policy approved by the Board of Directors. Portfolio investments are reported on the consolidated statements of assets and liabilities at fair value. On a quarterly basis the Company performs an analysis of each investment to determine fair value as described below.

    Securities for which market quotations are readily available on an exchange are valued at the reported closing price on the valuation date. The Company may also obtain quotes with respect to certain of the Company's investments from pricing services or brokers or dealers in order to value assets. When doing so, the Company determines whether the quote obtained is readily available according to U.S. GAAP to determine the fair value of the security. If determined readily available, the Company uses the quote obtained.

36

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    Investments without a readily determined market value are primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that the Company may take into account in fair value pricing the Company's investments include, as relevant: 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, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process.

    For an investment in an investment fund that does not have a readily determinable fair value, the Company measures the fair value of the investment predominately based on the net asset value per share of the investment fund if the net asset value of the investment fund is calculated in a manner consistent with the measurement principles of ASC Topic 946, as of the Company's measurement date.

    For investments in Collateralized Securities, the Adviser models both the assets and liabilities of each Collateralized Securities' capital structure. The model uses a waterfall engine to store the collateral data, generate cash flows from the assets, and distribute the cash flows to the liability structure based on the contractual priority of payments. The cash flows are discounted using rates that incorporate risk factors such as default risk, interest rate risk, downgrade risk, and credit spread risk, among others. In addition, the Adviser considers broker quotations and/or comparable trade activity is considered as an input to determining fair value when available.

    As part of the Company's quarterly valuation process, the Adviser may be assisted by one or more independent valuation firms engaged by the Company. The Board of Directors determines the fair value of each investment, in good faith, based on the input of the Adviser and the independent valuation firm(s) (to the extent applicable).

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

    For discussion of the fair value measurement of the Company's borrowings, refer to Note 5 - Borrowings.

    For discussion of the fair value measurement of the Company's foreign currency contracts, refer to Note 6 - Derivatives.

    The following table presents fair value measurements of investments, by major class, as of March 31, 2022, according to the fair value hierarchy:

			Fair Value Measurements
			Level 1						Level 2						Level 3						Measured at Net Asset Value (1)						Total
Senior Secured First Lien Debt			$	—					$	42,199					$	1,741,761					$	—					$	1,783,960
Senior Secured Second Lien Debt			—						58,501						183,451						—						241,952
Subordinated Debt			—						—						103,042						—						103,042
Collateralized Securities			—						—						37,273						—						37,273
Equity/Other			4,833						7,879						217,606						11,991						242,309
FBLC Senior Loan Fund, LLC			—						—						304,934						—						304,934
Total			$	4,833					$	108,579					$	2,588,067					$	11,991					$	2,713,470

______________

(1) In accordance with ASC Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient election have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated statements of assets and liabilities.

37

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    The following table presents fair value measurements of investments, by major class, as of December 31, 2021, according to the fair value hierarchy:

			Fair Value Measurements
			Level 1						Level 2						Level 3						Measured at Net Asset Value (1)						Total
Senior Secured First Lien Debt			$	—					$	51,854					$	1,779,316					$	—					$	1,831,170
Senior Secured Second Lien Debt			—						24,909						219,023						—						243,932
Subordinated Debt			—						—						118,077						—						118,077
Collateralized Securities			—						—						37,097						—						37,097
Equity/Other			4,687						5,442						218,444						15,181						243,754
FBLC Senior Loan Fund, LLC			—						—						304,934						—						304,934
Total			$	4,687					$	82,205					$	2,676,891					$	15,181					$	2,778,964

______________

(1) In accordance with ASC Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient election have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated statements of assets and liabilities.

    The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended March 31, 2022:

			Senior Secured First Lien Debt						Senior Secured Second Lien Debt						Subordinated Debt						Collateralized Securities						Equity/Other (1)						Total
Balance as of December 31, 2021			$	1,779,316					$	219,023					$	118,077					$	37,097					$	523,378					$	2,676,891
Purchases and other adjustments to cost			62,343						458						414						94						460						63,769
Sales and repayments			(107,590)						(2,835)						(15,537)						(1,212)						(7,766)						(134,940)
Net realized gain (loss)			1,817						(129)						—						—						3,300						4,988
Transfers in			10,243						—						—						—						—						10,243
Transfers out			—						(33,998)						—						—						(2,884)						(36,882)
Net change in unrealized appreciation (depreciation) on investments			(4,368)						932						88						1,294						6,052						3,998
Balance as of March 31, 2022			$	1,741,761					$	183,451					$	103,042					$	37,273					$	522,540					$	2,588,067
Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period:			$	(2,515)					$	667					$	88					$	1,294					$	9,302					$	8,836

_______________

(1) Includes FBLC's investment in FBLC Senior Loan Fund, LLC.

For the three months ended March 31, 2022, transfers from Level 2 to Level 3 were due to current assessments of investment liquidity and a decrease in the number of observable market inputs. For the three months ended March 31, 2022, transfers from Level 3 to Level 2 were due to an increase in the number of observable market inputs.

38

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended December 31, 2021:

			Senior Secured First Lien Debt						Senior Secured Second Lien Debt						Subordinated Debt						Collateralized Securities						Equity/Other						Total
Balance as of December 31, 2020			$	1,307,957					$	186,899					$	108,610					$	106,525					$	208,793					$	1,918,784
Purchases and other adjustments to cost			1,077,201						83,554						115,838						422						395,008			(1)			1,672,023
Sales and repayments			(664,874)						(68,648)						(106,646)						(84,250)						(119,493)						(1,043,911)
Net realized gain (loss)			(12,043)						382						2,561						(4,677)						25,959						12,182
Transfers in			90,853						25,018						—						—						—						115,871
Transfers out			(63,570)						(13,094)						—						—						(1,224)						(77,888)
Net change in unrealized appreciation (depreciation) on investments			43,792						4,912						(2,286)						19,077						14,335						79,830
Balance as of December 31, 2021			$	1,779,316					$	219,023					$	118,077					$	37,097					$	523,378					$	2,676,891
Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period:			$	18,655					$	4,052					$	504					$	10,436					$	18,515					$	52,162

_______________

(1) Includes $304.9 million of purchases related to FBLC Senior Loan Fund, LLC.

For the year ended December 31, 2021, transfers from Level 2 to Level 3 were due to current assessments of investment liquidity and a decrease in the number of observable market inputs. For the year ended December 31, 2021, transfers from Level 3 to Level 2 were due to an increase in the number of observable market inputs.

The composition of the Company’s investments as of March 31, 2022, at amortized cost and fair value, were as follows:

			Investments at Amortized Cost						Investments at Fair Value						Fair Value Percentage of Total Portfolio
Senior Secured First Lien Debt			$	1,822,527					$	1,783,960					65.8		%
Senior Secured Second Lien Debt			248,842						241,952						8.9
Subordinated Debt			102,504						103,042						3.8
Collateralized Securities			49,966						37,273						1.4
Equity/Other			186,583						242,309						8.9
FBLC Senior Loan Fund, LLC			304,934						304,934						11.2
Total			$	2,715,356					$	2,713,470					100.0		%

    

39

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

The composition of the Company’s investments as of December 31, 2021, at amortized cost and fair value, were as follows:

			Investments at Amortized Cost						Investments at Fair Value						Fair Value Percentage of Total Portfolio
Senior Secured First Lien Debt			$	1,865,403					$	1,831,170					65.9		%
Senior Secured Second Lien Debt			251,149						243,932						8.8
Subordinated Debt			117,627						118,077						4.2
Collateralized Securities			51,083						37,097						1.3
Equity/Other			193,421						243,754						8.8
FBLC Senior Loan Fund, LLC			304,934						304,934						11.0
Total			$	2,783,617					$	2,778,964					100.0		%

40

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Significant Unobservable Inputs

    The following table summarizes the significant unobservable inputs used to value the majority of the Level 3 investments as of March 31, 2022. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.

Range

Asset Category

Fair Value

Primary Valuation Technique

Unobservable Inputs

Minimum

Maximum

Weighted Average (a)

Senior Secured First Lien Debt

$

1,454,828

Discounted Cash Flow

Market Yield

5.75%

24.20%

9.20%

Senior Secured First Lien Debt

223,605

Yield Analysis

Market Yield

6.66%

14.72%

9.14%

Senior Secured First Lien Debt (b)

28,477

Yield Analysis

EBITDA Multiple

19.00x

19.00x

19.00x

Senior Secured First Lien Debt

18,373

Waterfall Analysis

EBITDA Multiple

1.35x

8.80x

7.69x

Senior Secured First Lien Debt (c)

8,264

N/A

N/A

N/A

N/A

N/A

Senior Secured First Lien Debt

8,214

Waterfall Analysis

Revenue Multiple

0.24x

0.75x

0.31x

Senior Secured Second Lien Debt

123,821

Discounted Cash Flow

Market Yield

7.75%

19.54%

9.68%

Senior Secured Second Lien Debt

56,828

Yield Analysis

Market Yield

9.49%

18.79%

12.03%

Senior Secured Second Lien Debt

2,802

Waterfall Analysis

EBITDA Multiple

4.84x

6.10x

5.74x

Subordinated Debt

99,099

Waterfall Analysis

Tangible Net Asset Value Multiple

1.65x

1.95x

1.77x

Subordinated Debt (b)

3,943

Yield Analysis

Market Yield

23.61%

23.61%

23.61%

Collateralized Securities

37,273

Discounted Cash Flow

Discount Rate

9.75%

17.00%

14.45%

Equity/Other

158,999

Waterfall Analysis

Tangible Net Asset Value Multiple

1.65x

1.95x

1.81x

Equity/Other

20,427

Waterfall Analysis

Discount Rate

17.50%

17.50%

17.50%

Equity/Other

13,423

Waterfall Analysis

EBITDA Multiple

2.75x

13.90x

7.42x

Equity/Other (c)

9,310

N/A

N/A

N/A

N/A

N/A

Equity/Other (b)

8,467

Discounted Cash Flow

Discount Rate

17.50%

17.50%

17.50%

Equity/Other (b)

2,676

Waterfall Analysis

TBV Multiple

4.90x

4.90x

4.90x

Equity/Other (b)

2,334

Yield Analysis

Market Yield

6.99%

6.99%

6.99%

Equity/Other

1,825

Discounted Cash Flow

Market Yield

9.75%

13.25%

11.71%

Equity/Other

145

Waterfall Analysis

Revenue Multiple

0.14x

0.25x

0.14x

FBLC Senior Loan Fund, LLC (b)

304,934

Discounted Cash Flow

Discount Rate

13.91%

13.91%

13.91%

Total

$

2,588,067

______________

(a)Weighted averages are calculated based on fair value of investments.

(b)This asset category contains one investment.

(c)Investment(s) were valued based on recent or pending transactions expected to close after the valuation date.

    There were no significant changes in valuation approach or technique as of March 31, 2022.

41

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

The following table summarizes the significant unobservable inputs used to value the majority of the Level 3 investments as of December 31, 2021. The table is not intended to be all-inclusive, but instead identifies the significant unobservable inputs relevant to the determination of fair values.

Range

Asset Category

Fair Value

Primary Valuation Technique

Unobservable Inputs

Minimum

Maximum

Weighted Average (a)

Senior Secured First Lien Debt

$

1,258,128

Discounted Cash Flow

Market Yield

5.00%

23.71%

8.15%

Senior Secured First Lien Debt (c)

272,647

N/A

N/A

N/A

N/A

N/A

Senior Secured First Lien Debt

214,761

Yield Analysis

Market Yield

1.82%

14.14%

7.93%

Senior Secured First Lien Debt

27,022

Waterfall Analysis

EBITDA Multiple

4.30x

10.16x

8.08x

Senior Secured First Lien Debt

6,758

Waterfall Analysis

Revenue Multiple

0.24x

0.24x

0.24x

Senior Secured Second Lien Debt

120,275

Discounted Cash Flow

Market Yield

7.00%

19.54%

9.17%

Senior Secured Second Lien Debt

64,578

Yield Analysis

Market Yield

8.03%

24.78%

10.92%

Senior Secured Second Lien Debt (c)

31,387

N/A

N/A

N/A

N/A

N/A

Senior Secured Second Lien Debt

2,783

Waterfall Analysis

EBITDA Multiple

6.26x

6.30x

6.29x

Subordinated Debt (b)

75,000

Waterfall Analysis

Tangible Net Asset Value Multiple

1.65x

1.65x

1.65x

Subordinated Debt (b) (c)

37,963

N/A

N/A

N/A

N/A

N/A

Subordinated Debt (b)

3,577

Waterfall Analysis

EBITDA Multiple

11.12x

11.12x

11.12x

Subordinated Debt (b)

1,537

Discounted Cash Flow

Discount Rate

8.75%

8.75%

8.75%

Collateralized Securities

37,097

Discounted Cash Flow

Discount Rate

9.00%

17.00%

14.62%

Equity/Other (c)

89,678

N/A

N/A

N/A

N/A

N/A

Equity/Other (b)

65,609

Waterfall Analysis

Tangible Net Asset Value Multiple

1.65x

1.65x

1.65x

Equity/Other

26,981

Waterfall Analysis

Discount Rate

17.50%

17.50%

17.50%

Equity/Other

15,209

Waterfall Analysis

EBITDA Multiple

2.75x

12.00x

7.01x

Equity/Other

13,204

Discounted Cash Flow

Discount Rate

8.75%

12.50%

11.23%

Equity/Other

3,030

Waterfall Analysis

Revenue Multiple

0.15x

2.70x

2.58x

Equity/Other (b)

2,676

Waterfall Analysis

TBV Multiple

5.50x

5.50x

5.50x

Equity/Other

2,057

Discounted Cash Flow

Market Yield

9.75%

12.54%

11.48%

FBLC Senior Loan Fund, LLC (b)

304,934

Discounted Cash Flow

Discount Rate

13.03%

13.03%

13.03%

Total

$

2,676,891

______________

(a)Weighted averages are calculated based on fair value of investments.

(b)This asset category contains one investment.

(c)Investment(s) were valued based on recent or pending transactions expected to close after the valuation date.

    There were no significant changes in valuation approach or technique as of December 31, 2021.

Level 3 Inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category include investments in privately held entities where the fair value is based on unobservable inputs.

Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.

42

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    The income and market approaches were used in the determination of fair value of certain Level 3 assets as of March 31, 2022 and December 31, 2021. The significant unobservable inputs used in the income approach are the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. An increase in the discount rate or market yield would result in a decrease in the fair value. Included in the consideration and selection of discount rates is risk of default, rating of the investment, call provisions and comparable company investments. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in market comparable transactions or market multiples would result in an increase or decrease, respectively, in the fair value.

    Valuations of loans, corporate debt, and other debt obligations are generally based on discounted cash flow techniques, for which the significant inputs are the amount and timing of expected future cash flows, market yields and recovery assumptions. The significant inputs are generally determined based on relative value analysis, which incorporate comparisons to other debt instruments for which observable prices or broker quotes are available. Other valuation methodologies are used as appropriate including market comparables, transactions in similar instruments and recovery/liquidation analysis. The Company also considers the use of EBITDA multiples, revenue multiples, tangible net asset value multiples, TBV multiples, and other relevant multiples on its debt and equity investments to determine any credit gains or losses in certain instances. Increases or decreases in either of these inputs in isolation may result in a significantly lower or higher fair value measurement of the respective subject instrument.

As of March 31, 2022, the Company had five portfolio companies on non-accrual with a total amortized cost of $43.8 million and fair value of $9.7 million, which represented 1.6% and 0.4% of the investment portfolio's total amortized cost and fair value, respectively. As of December 31, 2021, the Company had six portfolio companies on non-accrual with a total amortized cost of $42.5 million and fair value of $12.2 million, which represented 1.5%, and 0.4% of the investment portfolio's total amortized cost and fair value, respectively. Refer to Note 2 - Summary of Significant Accounting Policies - for additional details regarding the Company’s non-accrual policy.

43

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

FBLC Senior Loan Fund, LLC

On January 20, 2021, FBLC and Cliffwater Corporate Lending Fund (“CCLF”) formed a joint venture, FBLC Senior Loan Fund, LLC (the “SLF”), that invests primarily in senior secured loans, and to a lesser extent may invest in mezzanine loans, unsecured loans and equity of predominantly private U.S. middle-market companies. SLF was formed as a Delaware limited liability company and is not consolidated by FBLC for financial reporting purposes. FBLC provides capital to SLF in the form of LLC equity interests. At formation, FBLC and CCLF owned 87.5% and 12.5%, respectively, of the LLC equity interests of SLF. As of March 31, 2022 and December 31, 2021, FBLC and CCLF owned 79.8% and 20.2%, respectively, of the LLC equity interests of SLF. Profit and loss are allocated based on each members' ownership percentage of the joint venture's net asset value. SLF has an Administrative and Loan Services Agreement with BSP, an affiliate of the Company, pursuant to which BSP provides certain operational and valuation services for SLF's investments; as well as certain agreements with third-party service providers. FBLC and CCLF each appoint two members to SLF's four-person board of members. All material decisions with respect to SLF, including those involving its investment portfolio, require unanimous approval of a quorum of the board of members. Quorum is defined as (i) the presence of two members of the board of members; provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of members; provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of members; provided that two individuals are present that were elected, designated or appointed by each member.

As part of the initial contribution to SLF, FBLC contributed $751.8 million of assets including $664.2 million of investments and $42.4 million of cash as well as $446.9 million worth of liabilities including the Citi Credit Facility (as defined in Note 5) debt of $344.4 million in exchange for $304.9 million of equity in SLF. As of March 31, 2022 and December 31, 2021, FBLC’s investment in SLF consisted of equity contributions of $304.9 million. FBLC’s investment in SLF is classified as “Equity/Other” on the Consolidated Schedule of Investments, and other disclosures unless otherwise indicated. Subsequent to the initial contribution, FBLC may sell investments to SLF. For the three months ended March 31, 2022, FBLC had sold $0.0 of investments to SLF. For the year ended December 31, 2021, FBLC had sold $322.7 million of investments to SLF. As of March 31, 2022, $0.1 million of net accounts payable relates to investments sold by FBLC to SLF, which is reflected on the Consolidated Statements of Assets and Liabilities. As of December 31, 2021, $0.1 million of net accounts receivable relates to investments sold by FBLC to SLF, which is reflected on the Consolidated Statements of Assets and Liabilities.

As of March 31, 2022, SLF had total assets of $1,153.0 million. As of December 31, 2021, SLF had total assets of $1,196.0 million. SLF's portfolio consisted of debt investments in 176 portfolio companies as of March 31, 2022. SLF's portfolio consisted of debt investments of 172 portfolio companies as of December 31, 2021. As of March 31, 2022, SLF's largest investment in a single portfolio company was $20.4 million in aggregate principal; and the five largest investments in portfolio companies in SLF totaled $97.2 million in aggregate principal. As of December 31, 2021, SLF's largest investment in a single portfolio company was $28.0 million in aggregate principal; and the five largest investments in portfolio companies in SLF totaled $113.3 million in aggregate principal. SLF may invest in portfolio companies in the same industries in which FBLC directly invests.

Below is a listing of SLF’s individual investments as of March 31, 2022:

March 31, 2022 (Unaudited)
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Senior Secured First Lien Debt
Accentcare, Inc. (b)						Healthcare						L+4.00% (4.51%)						6/22/2026						$	10,004					$	10,004					$	9,854					2.4		%
Access Cig, LLC (b)						Business Services						L+3.75% (4.21%)						2/27/2025						4,221						4,210						4,149						1.1		%
Acrisure, LLC (b)						Financials						L+3.50% (3.96%)						2/15/2027						20,267						19,864						19,947						5.0		%
Adtalem Global Education, Inc.						Education						5.50%						3/1/2028						2,000						2,000						1,937						0.5		%
Adtalem Global Education, Inc. (f)						Education						L+4.50% (5.25%)						8/12/2028						1,034						1,034						1,028						0.3		%
Advisor Group, Inc. (f)						Financials						L+4.50% (4.96%)						7/31/2026						7,883						7,883						7,841						2.0		%
Alchemy US Holdco 1, LLC (b)						Industrials						L+5.50% (5.96%)						10/10/2025						15,555						15,416						15,429						3.9		%
Altice Financing, SA						Telecom						5.00%						1/15/2028						2,000						1,930						1,801						0.5		%
Alvogen Pharma US, Inc. (b)						Healthcare						L+5.25% (6.26%)						12/31/2023						12,337						12,244						11,489						3.0		%
Amentum Government Services Holdings, LLC (b)						Industrials						S+4.00% (4.78%)						2/15/2029						3,000						2,974						2,970						0.8		%
Amentum Government Services Holdings, LLC (f)						Industrials						L+3.50% (3.96%)						1/29/2027						1,985						1,974						1,958						0.5		%

44

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

March 31, 2022 (Unaudited)
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
American Airlines Inc/AAdvantage Loyalty IP, Ltd. (b)						Transportation						L+4.75% (5.50%)						4/20/2028						$	6,316					$	6,258					$	6,389					1.6		%
American Rock Salt Company, LLC (f)						Chemicals						L+4.00% (4.75%)						6/9/2028						4,765						4,768						4,705						1.2		%
AmWINS Group, Inc. (f)						Financials						L+2.25% (3.00%)						2/19/2028						4,962						4,900						4,875						1.3		%
AP Gaming I, LLC (f)						Gaming/Lodging						S+4.00% (4.80%)						2/9/2029						7,467						7,338						7,318						1.9		%
APLP Holdings, LP (b)						Utilities						L+3.75% (4.76%)						5/14/2027						2,936						2,911						2,936						0.8		%
Apollo Commercial Real Estate Finance, Inc.						Financials						4.63%						6/15/2029						3,000						3,000						2,717						0.7		%
AppLovin Corp. (b)						Media/Entertainment						L+3.00% (3.50%)						10/25/2028						8,978						8,957						8,895						2.3		%
Artera Services, LLC (f)						Utilities						L+3.50% (4.51%)						3/6/2025						2,481						2,468						2,319						0.6		%
Ascensus Holidngs, Inc. (b)						Business Services						L+3.50% (4.56%)						8/2/2028						7,980						7,975						7,910						2.0		%
Astoria Energy, LLC (f)						Utilities						L+3.50% (4.50%)						12/10/2027						1,957						1,957						1,927						0.5		%
Astro AB Merger Sub, Inc. (f)						Financials						L+4.25% (5.25%)						4/30/2024						3,838						3,834						3,807						1.0		%
Asurion, LLC (b)						Business Services						L+3.25% (3.71%)						12/23/2026						4,962						4,884						4,849						1.2		%
Athenahealth, Inc. (b)						Healthcare						S+3.50% (4.00%)						2/15/2029						12,484						12,423						12,328						3.2		%
Athletico Management, LLC (f)						Healthcare						S+4.25% (5.16%)						2/15/2029						5,000						4,975						4,959						1.3		%
Avaya Holdings Corp. (b)						Technology						L+4.00% (4.40%)						12/15/2027						12,770						12,770						12,610						3.2		%
Avis Budget Car Rental, LLC (b)						Transportation						S+3.50% (4.00%)						3/8/2029						5,000						4,850						4,956						1.3		%
Bally's Corp. (b)						Gaming/Lodging						L+3.25% (3.75%)						10/2/2028						2,723						2,698						2,706						0.7		%
BBB Industries, LLC (b)						Transportation						L+4.50% (4.96%)						8/1/2025						12,822						12,730						12,655						3.3		%
BCP Raptor, LLC (b)						Energy						L+4.25% (5.25%)						6/24/2024						13,568						12,922						13,526						3.5		%
BCP Renaissance, LLC (f)						Energy						L+3.50% (4.50%)						10/31/2024						2,198						2,183						2,164						0.6		%
Bella Holding Company, LLC (f)						Healthcare						L+3.75% (4.50%)						5/10/2028						2,974						2,947						2,944						0.8		%
Blackstone CQP Holdco, LP (b)						Industrials						L+3.75% (4.76%)						6/5/2028						7,947						7,914						7,899						2.0		%
BMC Software Finance, Inc. (b)						Technology						L+3.75% (4.21%)						10/2/2025						12,711						12,744						12,624						3.3		%
Bomgar Corp. (f)						Technology						L+4.00% (4.46%)						4/18/2025						3,911						3,923						3,858						1.0		%
Brookfield WEC Holdings, Inc. (f)						Utilities						L+2.75% (3.25%)						8/1/2025						1,995						1,921						1,957						0.5		%
Cablevision Lightpath, LLC						Telecom						3.88%						9/15/2027						2,000						1,927						1,870						0.5		%
CareCentrix, Inc. (b)						Healthcare						L+4.50% (4.96%)						4/3/2025						20,702						20,039						20,365						5.2		%
CLP Health Services, Inc. (b)						Healthcare						L+4.25% (5.00%)						12/31/2026						12,882						12,838						12,625						3.3		%
Cnt Holdings I Corp (f)						Consumer						L+3.50% (4.25%)						11/8/2027						3,465						3,465						3,443						0.9		%
CommerceHub, Inc. (f)						Technology						L+4.00% (5.01%)						12/29/2027						9,614						9,627						9,302						2.4		%
Community Care Health Network, LLC (b)						Healthcare						L+4.75% (5.21%)						2/17/2025						9,737						9,712						8,909						2.3		%
Compass Power Generation, LLC (f)						Utilities						L+3.50% (4.50%)						12/20/2024						4,763						4,752						4,685						1.2		%
Connect Finco SARL (f)						Telecom						L+3.50% (4.50%)						12/11/2026						7,519						7,541						7,448						1.9		%
Connectwise, LLC (f)						Software/Services						L+3.50% (4.00%)						9/29/2028						6,983						6,974						6,927						1.8		%
Conservice Midco, LLC (b)						Business Services						L+4.25% (4.71%)						5/13/2027						7,681						7,694						7,572						2.0		%
Conterra Ultra Broadband, LLC (b)						Telecom						L+4.75% (5.75%)						4/30/2026						6,693						6,693						6,693						1.7		%
Corelogic, Inc. (b)						Business Services						L+3.50% (4.00%)						6/2/2028						7,960						7,946						7,851						2.0		%
Directv Financing, LLC (b)						Media/Entertainment						L+5.00% (5.75%)						8/2/2027						4,775						4,732						4,764						1.2		%
Dish Dbs Corp.						Cable						5.25%						12/1/2026						700						700						666						0.2		%
Dish Dbs Corp.						Cable						5.75%						12/1/2028						1,000						1,000						950						0.2		%
Division Holding Corp. (b)						Business Services						L+4.75% (5.50%)						5/27/2028						8,717						8,727						8,630						2.2		%
Dynasty Acquisition Co., Inc. (e)						Industrials						L+3.50% (4.51%)						4/6/2026						2,817						2,726						2,760						0.7		%

45

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

March 31, 2022 (Unaudited)
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Dynasty Acquisition Co., Inc. (e)						Industrials						L+3.50% (4.51%)						4/6/2026						$	5,239					$	5,070					$	5,134					1.3		%
Echo Global Logistics, Inc. (b)						Transportation						L+3.75% (4.25%)						11/23/2028						3,330						3,323						3,286						0.8		%
Edelman Financial Services, LLC (b)						Financials						L+3.50% (4.25%)						4/7/2028						1,995						1,955						1,970						0.5		%
Edgewater Generation, LLC (b)						Utilities						L+3.75% (4.21%)						12/13/2025						2,476						2,462						2,277						0.6		%
Emerald 2, Ltd. (b)						Industrials						L+3.50% (3.96%)						7/12/2028						516						514						516						0.1		%
Flex Acquisition Company, Inc. (f)						Paper & Packaging						S+4.25% (4.78%)						3/30/2029						2,500						2,438						2,458						0.6		%
Flex Acquisition Company, Inc. (f)						Paper & Packaging						L+3.50% (4.00%)						3/2/2028						2,931						2,924						2,924						0.8		%
Florida Food Products, LLC (f)						Food & Beverage						L+5.00% (5.75%)						10/18/2028						8,000						7,886						7,880						2.0		%
Foley Products Co, LLC (b)						Industrials						S+4.75% (5.55%)						12/29/2028						3,200						3,169						3,168						0.8		%
Frontier Communications Corp.						Telecom						5.00%						5/1/2028						1,240						1,301						1,191						0.3		%
Frontier Communications Corp. (b)						Telecom						L+3.75% (4.81%)						5/1/2028						19,376						19,360						19,053						4.9		%
Geon Performance Solutions, LLC (b)						Chemicals						L+4.75% (5.50%)						8/18/2028						4,693						4,662						4,673						1.2		%
Gogo Intermediate Holdings, LLC (f)						Telecom						L+3.75% (4.50%)						4/30/2028						4,207						4,207						4,170						1.1		%
Gordian Medical, Inc. (b)						Healthcare						L+6.25% (7.26%)						1/31/2027						11,033						10,968						10,784						2.8		%
Greeneden U.S. Holdings I, LLC (b)						Software/Services						L+4.00% (4.98%)						12/1/2027						2,000						1,968						1,995						0.5		%
Greenway Health, LLC (f)						Healthcare						L+3.75% (5.25%)						2/16/2024						4,720						4,480						4,484						1.2		%
GVC Holdings Gibraltar, Ltd. (f)						Gaming/Lodging						L+2.25% (3.74%)						3/29/2027						4,963						4,956						4,913						1.3		%
HAH Group Holding Company, LLC (b)						Healthcare						L+5.00% (6.00%)						10/29/2027						735						735						724						0.2		%
HAH Group Holding Company, LLC (b)						Healthcare						L+5.00% (6.00%)						10/29/2027						5,812						5,737						5,725						1.5		%
Hamilton Projects Acquiror, LLC (f)						Utilities						L+4.50% (5.51%)						6/17/2027						5,704						5,680						5,585						1.4		%
Heartland Dental, LLC (e)						Healthcare						L+3.50% (3.71%)						4/30/2025						4,143						4,085						4,089						1.1		%
Hertz Corp. (b) (f)						Transportation						L+3.25% (3.75%)						6/30/2028						4,175						4,160						4,143						1.1		%
Hertz Corp. (b) (f)						Transportation						L+3.25% (3.75%)						6/30/2028						793						791						787						0.2		%
HireRight, Inc. (f)						Business Services						L+3.75% (4.21%)						7/11/2025						7,216						7,179						7,122						1.8		%
Hudson River Trading, LLC (b)						Financials						S+3.00% (3.43%)						3/20/2028						5,433						5,365						5,340						1.4		%
ICP Industrial, Inc. (f)						Chemicals						L+3.75% (4.76%)						12/29/2027						6,957						6,949						6,731						1.7		%
IDERA, Inc. (f)						Technology						L+3.75% (4.50%)						3/2/2028						6,965						6,976						6,829						1.8		%
Ineos Us Finance, LLC (f)						Chemicals						L+2.50% (3.00%)						11/8/2028						4,000						3,995						3,916						1.0		%
Intelsat Jackson Holdings, SA						Telecom						S+4.25% (4.75%)						2/1/2029						9,696						9,599						9,523						2.5		%
Iri Holdings, Inc. (b)						Business Services						L+4.25% (4.71%)						12/1/2025						7,799						7,781						7,757						2.0		%
Jack Ohio Finance, LLC (f)						Gaming/Lodging						L+4.75% (5.50%)						10/4/2028						3,990						3,972						3,990						1.0		%
Jane Street Group, LLC						Financials						4.50%						11/15/2029						5,000						4,851						4,744						1.2		%
Jane Street Group, LLC (f)						Financials						L+2.75% (3.21%)						1/26/2028						1,933						1,931						1,903						0.5		%
Jump Financial, LLC (b)						Financials						S+4.50% (5.00%)						8/7/2028						7,475						7,341						7,382						1.9		%
Kissner Milling Co., Ltd.						Industrials						4.88%						5/1/2028						9,000						8,873						8,454						2.2		%
LABL, Inc. (b)						Paper & Packaging						L+5.00% (5.50%)						10/29/2028						3,990						3,934						3,931						1.0		%
Lightstone Holdco, LLC (f)						Utilities						L+3.75% (4.75%)						1/30/2024						7,573						6,678						6,819						1.8		%
Lightstone Holdco, LLC (f)						Utilities						L+3.75% (4.75%)						1/30/2024						427						377						385						0.1		%
Liquid Tech Solutions Holdings, LLC (b) (f)						Industrials						L+4.75% (5.75%)						3/20/2028						10,190						10,141						10,190						2.6		%
Luxembourg Investment Co., 428 SARL (b)						Chemicals						S+5.00% (5.65%)						1/3/2029						3,864						3,828						3,827						1.0		%
Madison IAQ, LLC						Industrials						4.13%						6/30/2028						2,000						1,983						1,846						0.5		%

46

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

March 31, 2022 (Unaudited)
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Medallion Midland Acquisition, LP (f)						Energy						L+3.75% (4.50%)						10/18/2028						$	5,614					$	5,583					$	5,547					1.4		%
MH Sub I, LLC (f)						Business Services						L+3.75% (4.75%)						9/13/2024						8,619						8,614						8,513						2.2		%
Michael Baker International, LLC (b)						Industrials						L+5.00% (5.75%)						12/1/2028						3,326						3,294						3,276						0.8		%
MicroStrategy, Inc.						Software/Services						6.13%						6/15/2028						1,500						1,500						1,454						0.4		%
Monitronics International, Inc. (b)						Business Services						L+7.50% (8.75%)						3/29/2024						5,494						5,304						4,458						1.1		%
MPH Acquisition Holdings, LLC						Healthcare						5.50%						9/1/2028						2,000						1,990						1,920						0.5		%
MPH Acquisition Holdings, LLC (b)						Healthcare						L+4.25% (4.76%)						9/1/2028						4,975						4,886						4,825						1.2		%
MSG National Properties, LLC (b)						Media/Entertainment						L+6.25% (7.00%)						11/12/2025						12,157						12,390						12,157						3.1		%
MYOB US Borrower, LLC (f)						Business Services						L+4.00% (4.46%)						5/6/2026						5,454						5,440						5,399						1.4		%
Naked Juice, LLC (f)						Food & Beverage						S+3.25% (4.00%)						1/24/2029						1,430						1,427						1,404						0.4		%
National Mentor Holdings, Inc. (b) (f)						Healthcare						L+3.75% (4.76%)						3/2/2028						5,487						5,463						5,298						1.4		%
National Mentor Holdings, Inc. (f)						Healthcare						L+3.75% (4.76%)						3/2/2028						179						178						173						0.0		%
Nexus Buyer, LLC (f)						Business Services						L+3.75% (4.21%)						11/9/2026						4,477						4,477						4,429						1.1		%
Nouryon Finance B.V. (e)						Chemicals						L+3.00% (4.01%)						10/1/2025						2,334						2,303						2,294						0.6		%
Novae, LLC (f)						Industrials						S+5.00% (5.80%)						12/22/2028						3,889						3,851						3,855						1.0		%
Pathway Vet Alliance, LLC (b)						Healthcare						L+3.75% (4.21%)						3/31/2027						2,992						3,000						2,957						0.8		%
Paysafe Finance, PLC						Software/Services						4.00%						6/15/2029						400						400						341						0.1		%
Peabody Energy Corp. (f)						Energy						L+2.75% (3.20%)						3/31/2025						5,583						5,273						5,268						1.4		%
Peraton Corp. (b)						Industrials						L+3.75% (4.50%)						2/1/2028						2,938						2,906						2,914						0.8		%
Perstorp Holding Ab (b)						Chemicals						L+4.75% (6.25%)						2/27/2026						8,755						8,328						8,755						2.3		%
PG&E Corp. (f)						Utilities						L+3.00% (3.50%)						6/23/2025						10,671						10,705						10,524						2.7		%
Polaris Newco, LLC (f)						Business Services						L+4.00% (4.50%)						6/2/2028						1,995						1,940						1,979						0.5		%
Power Stop, LLC (f)						Transportation						L+4.75% (5.25%)						1/26/2029						4,000						3,961						3,910						1.0		%
Project Accelerate Parent, LLC (e)						Technology						L+4.25% (5.25%)						1/2/2025						16,068						15,906						15,987						4.1		%
Proofpoint, Inc. (b)						Software/Services						L+3.25% (3.76%)						8/31/2028						5,486						5,488						5,421						1.4		%
Protective Industrial Products, Inc. (b)						Industrials						L+4.00% (4.75%)						12/29/2027						9,104						9,068						8,944						2.3		%
Pug, LLC (f)						Technology						L+3.50% (3.96%)						2/12/2027						4,949						4,836						4,844						1.2		%
Quikrete Holdings, Inc. (f)						Industrials						L+3.00% (3.46%)						6/11/2028						8,000						7,959						7,844						2.0		%
Regionalcare Hospital Partners Holdings, Inc.						Healthcare						4.38%						2/15/2027						2,000						2,000						1,936						0.5		%
Regionalcare Hospital Partners Holdings, Inc. (b)						Healthcare						L+3.75% (4.20%)						11/16/2025						5,195						5,213						5,159						1.3		%
Renaissance Learning, Inc. (f)						Software/Services						S+4.50% (5.00%)						3/30/2029						2,000						1,940						1,988						0.5		%
RXB Holdings, Inc. (f)						Healthcare						L+4.50% (5.25%)						12/20/2027						10,180						10,216						10,103						2.6		%
S&S Holdings, LLC (f)						Consumer						L+5.00% (5.80%)						3/11/2028						6,930						6,748						6,930						1.8		%
Safe Fleet Holdings, LLC (b)						Industrials						S+3.75% (4.27%)						2/17/2029						7,500						7,463						7,375						1.9		%
Safety Products/JHC Acquisition Corp. (b)						Industrials						L+4.50% (4.96%)						6/28/2026						936						890						889						0.2		%
Safety Products/JHC Acquisition Corp. (b)						Industrials						L+4.50% (4.96%)						6/28/2026						17,316						16,549						16,450						4.2		%
Schenectady International Group, Inc. (b)						Chemicals						L+4.75% (4.99%)						10/15/2025						19,911						19,801						19,264						5.0		%
SCIH Salt Holdings, Inc. (f)						Industrials						L+4.00% (4.75%)						3/16/2027						3,724						3,696						3,655						0.9		%
SFR Group, SA (b) (e)						Telecom						L+4.00% (4.51%)						8/14/2026						12,673						12,603						12,424						3.2		%
Sierra Acquisition, Inc. (b)						Food & Beverage						L+4.00% (5.00%)						11/11/2024						4,889						4,716						4,767						1.2		%
Sophia, LP (f)						Software/Services						L+3.25% (4.26%)						10/7/2027						2,996						2,999						2,963						0.8		%

47

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

March 31, 2022 (Unaudited)
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Spirit Aerosystems, Inc. (b)						Industrials						L+3.75% (4.25%)						1/15/2025						$	2,549					$	2,575					$	2,542					0.7		%
SSH Group Holdings, Inc. (e)						Education						L+4.25% (5.26%)						7/30/2025						10,491						10,141						10,155						2.6		%
Staples, Inc. (b)						Business Services						L+5.00% (5.32%)						4/16/2026						4,937						4,887						4,655						1.2		%
Station Casinos, LLC (f)						Gaming/Lodging						L+2.25% (2.71%)						2/8/2027						2,272						2,262						2,239						0.6		%
Team Health Holdings, Inc. (e) (f)						Healthcare						S+5.25% (6.25%)						3/2/2027						5,479						5,350						5,203						1.3		%
Tecta America Corp. (f)						Industrials						L+4.25% (5.00%)						4/10/2028						9,022						8,998						8,920						2.3		%
Tenneco, Inc. (e)						Transportation						L+3.00% (3.46%)						10/1/2025						2,962						2,939						2,920						0.8		%
The Dun & Bradstreet Corp. (f)						Business Services						L+3.25% (3.70%)						2/6/2026						4,851						4,869						4,813						1.2		%
TransDigm, Inc. (f)						Industrials						L+2.25% (2.71%)						12/9/2025						2,962						2,947						2,907						0.7		%
Traverse Midstream Partners, LLC (b)						Energy						S+4.25% (5.25%)						9/27/2024						14,921						14,897						14,840						3.8		%
Triton Water Holdings, Inc. (f)						Food & Beverage						L+3.50% (4.51%)						3/31/2028						7,444						7,428						7,265						1.8		%
Truck Hero, Inc. (f)						Transportation						L+3.25% (4.00%)						1/31/2028						1,485						1,482						1,437						0.4		%
TSL Engineered Products, LLC (b)						Industrials						S+4.75% (5.50%)						1/7/2028						7,841						7,773						7,841						2.0		%
United Airlines, Inc. (f)						Transportation						L+3.75% (4.50%)						4/21/2028						3,785						3,773						3,734						1.0		%
University Support Services, LLC (f)						Education						L+3.25% (3.75%)						2/10/2029						4,988						4,970						4,919						1.3		%
Urban One, Inc.						Media/Entertainment						7.38%						2/1/2028						6,000						6,188						6,023						1.6		%
Venga Finance Sarl (b)						Telecom						L+4.75% (5.25%)						12/4/2028						4,000						3,880						3,879						1.0		%
Veritext Corp. (f)						Business Services						L+3.25% (4.26%)						8/1/2025						3,496						3,457						3,433						0.9		%
Virgin Media Bristol, LLC (f)						Telecom						L+3.25% (3.65%)						1/31/2029						2,500						2,497						2,483						0.6		%
Vyaire Medical, Inc. (f)						Healthcare						L+4.75% (5.75%)						4/16/2025						7,410						6,313						5,696						1.5		%
WaterBridge Midstream Operating, LLC (b)						Energy						L+5.75% (6.75%)						6/22/2026						10,720						9,602						10,325						2.7		%
Watlow Electric Manufacturing Co. (b)						Industrials						L+3.75% (4.25%)						3/2/2028						9,450						9,407						9,317						2.4		%
Western Dental Services, Inc. (f)						Healthcare						L+4.50% (5.28%)						8/18/2028						9,052						9,046						8,995						2.3		%
Western Dental Services, Inc. (f)						Healthcare						L+4.50% (5.30%)						8/18/2028						526						526						523						0.1		%
Wilsonart, LLC (b)						Consumer						L+3.25% (4.25%)						12/31/2026						7,431						7,426						7,231						1.9		%
YI, LLC (e)						Healthcare						L+4.00% (5.00%)						11/7/2024						8,950						8,917						8,861						2.3		%
Subtotal Senior Secured First Lien Debt																														$	949,314					$	940,063					242.1		%
Senior Secured Second Lien Debt
American Rock Salt Company, LLC (b)						Chemicals						L+7.25% (8.00%)						6/11/2029						$	1,943					$	1,924					$	1,948					0.5		%
Asurion, LLC (b)						Business Services						L+5.25% (5.71%)						1/31/2028						7,632						7,603						7,472						1.9		%
Barracuda Networks, Inc. (b)						Software/Services						L+6.75% (7.50%)						10/30/2028						4,698						4,724						4,669						1.2		%
CDS U.S. Intermediate Holdings, Inc.						Media/Entertainment						L+8.00% (9.00%) 7.00% PIK						11/24/2027						5,178						5,160						5,132						1.3		%
Edelman Financial Services, LLC (b) (e)						Financials						L+6.75% (7.21%)						7/20/2026						7,972						7,959						7,844						2.0		%
IDERA, Inc. (b) (e)						Technology						L+6.75% (7.50%)						3/2/2029						1,545						1,527						1,518						0.4		%
Tecta America Corp. (b)						Industrials						L+8.50% (9.25%)						4/9/2029						4,998						4,973						4,998						1.3		%
TIBCO Software, Inc. (b)						Technology						L+7.25% (7.71%)						3/3/2028						13,020						13,165						12,974						3.4		%
Subtotal Senior Secured Second Lien Debt																														$	47,035					$	46,555					12.0		%

48

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

March 31, 2022 (Unaudited)
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Collateralized Securities
Collateralized Securities - Debt Investments
AIG CLO, Ltd. 21-1A F						Diversified Investment Vehicles						L+6.90% (7.16%)						4/22/2034						$	1,410					$	1,287					$	1,220					0.3		%
Avery Point CLO, Ltd. 15-6A E1 (f)						Diversified Investment Vehicles						L+5.50% (5.82%)						8/5/2027						3,500						3,138						3,366						0.9		%
Battalion CLO, Ltd. 21-17A F						Diversified Investment Vehicles						L+7.50% (7.75%)						3/9/2034						1,224						1,133						1,082						0.3		%
Carlyle GMS CLO, 16-3A FRR (f)						Diversified Investment Vehicles						L+8.60% (8.85%)						7/20/2034						2,100						1,986						1,908						0.5		%
Eaton Vance CDO, Ltd. 15-1A FR (f)						Diversified Investment Vehicles						L+7.97% (8.22%)						1/20/2030						2,000						1,742						1,765						0.5		%
Elevation CLO, Ltd. 13-1A D2						Diversified Investment Vehicles						L+7.65% (8.16%)						8/15/2032						2,000						1,961						1,958						0.5		%
Great Lakes CLO, Ltd. 21-6A E						Diversified Investment Vehicles						L+8.03% (8.25%)						1/15/2034						5,150						4,949						4,848						1.2		%
Greywolf CLO, Ltd. 20-3RA ER (f)						Diversified Investment Vehicles						L+8.74% (9.00%)						4/15/2033						1,000						875						917						0.2		%
Hayfin Kingsland XI, Ltd. 19-2A ER						Diversified Investment Vehicles						L+7.72% (7.97%)						10/20/2034						2,500						2,427						2,376						0.6		%
Highbridge Loan Management, Ltd. 11A-17 E (f)						Diversified Investment Vehicles						L+6.10% (6.42%)						5/6/2030						3,000						2,697						2,796						0.7		%
KKR Financial CLO, Ltd. 15 FR						Diversified Investment Vehicles						L+8.50% (8.74%)						1/18/2032						2,000						1,894						1,809						0.5		%
LCM, Ltd. Partnership 16A ER2 (f)						Diversified Investment Vehicles						L+6.38% (6.62%)						10/15/2031						2,500						2,284						2,347						0.6		%
Marble Point CLO, Ltd. 20-1A E (f)						Diversified Investment Vehicles						L+6.82% (7.07%)						4/20/2033						4,500						4,402						4,330						1.1		%
Medalist Partners Corporate Finance CLO, Ltd. 21-1A D (f)						Diversified Investment Vehicles						L+7.48% (7.69%)						10/20/2034						3,000						2,855						2,787						0.7		%
Northwoods Capital, Ltd. 17-15A ER						Diversified Investment Vehicles						L+7.64% (8.57%)						6/20/2034						3,000						2,921						2,866						0.7		%
OCP CLO, Ltd. 14-5A DR (f)						Diversified Investment Vehicles						L+5.70% (5.97%)						4/26/2031						2,200						2,080						2,176						0.6		%
OZLM, Ltd. 16-15A DR (f)						Diversified Investment Vehicles						L+6.75% (7.00%)						4/20/2033						2,000						1,905						1,852						0.5		%
Palmer Square CLO, Ltd. 21-4A F						Diversified Investment Vehicles						L+7.66% (7.80%)						10/15/2034						1,500						1,427						1,350						0.3		%
Regatta II Funding, LP 13-2A DR2 (f)						Diversified Investment Vehicles						L+6.95% (7.19%)						1/15/2029						2,000						1,925						1,948						0.5		%
Saranac CLO, Ltd. 20-8A E						Diversified Investment Vehicles						L+8.12% (8.60%)						2/20/2033						1,455						1,441						1,414						0.4		%
Sculptor CLO, Ltd. 27A E						Diversified Investment Vehicles						L+7.05% (7.30%)						7/20/2034						1,500						1,458						1,453						0.4		%
Sound Point CLO, Ltd. 17-1A E (f)						Diversified Investment Vehicles						L+5.96% (6.22%)						1/23/2029						4,000						3,601						3,715						1.0		%
Sound Point CLO, Ltd. 17-2A E (f)						Diversified Investment Vehicles						L+6.10% (6.36%)						7/25/2030						2,400						2,071						2,160						0.6		%
Sound Point CLO, Ltd. 18-3A D (f)						Diversified Investment Vehicles						L+5.79% (6.06%)						10/26/2031						1,000						901						865						0.2		%
Symphony CLO, Ltd. 2012-9A ER2 (f)						Diversified Investment Vehicles						L+6.95% (7.19%)						7/16/2032						3,000						2,773						2,897						0.7		%
Trimaran CAVU 2021-2A, Ltd. 21-2A E (f)						Diversified Investment Vehicles						L+7.20% (7.33%)						10/25/2034						3,000						2,943						2,870						0.7		%
Trysail CLO, Ltd. 21-1A E						Diversified Investment Vehicles						L+7.38% (7.63%)						7/20/2032						1,500						1,446						1,414						0.4		%
Venture CDO, Ltd. 16-23A ER2 (f)						Diversified Investment Vehicles						L+7.55% (7.80%)						7/19/2034						3,000						2,914						2,849						0.7		%
Venture CDO, Ltd. 16-25A E (f)						Diversified Investment Vehicles						L+7.20% (7.45%)						4/20/2029						2,000						1,945						1,882						0.5		%

49

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

March 31, 2022 (Unaudited)
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Venture CDO, Ltd. 20-39A E						Diversified Investment Vehicles						L+7.63% (7.87%)						4/15/2033						$	4,995					$	4,961					$	4,852					1.3		%
Venture CLO 43, Ltd. 21-43A E (f)						Diversified Investment Vehicles						L+7.15% (7.39%)						4/15/2034						3,000						2,915						2,858						0.7		%
Wind River CLO, Ltd. 14-2A FR						Diversified Investment Vehicles						L+7.87% (8.11%)						1/15/2031						3,000						2,504						2,414						0.6		%
Zais CLO 13, Ltd. 19-13A D1 (f)						Diversified Investment Vehicles						L+4.52% (4.76%)						7/15/2032						3,000						2,726						2,801						0.7		%
Subtotal Collateralized Securities																														$	78,487					$	78,145					20.1		%
TOTAL INVESTMENTS																														$	1,074,836					$	1,064,763					274.2		%

______________

(a)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L"), Secured Overnight Financing Rate ("SOFR" or "S"), or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, SLF has provided the spread over the relevant reference rate and the current interest rate in effect at March 31, 2022. Certain investments are subject to reference rate floors. For fixed rate loans, a spread above a reference rate is not applicable. For floating rate securities the all-in rate is disclosed within parentheses.

(b)SLF's investment or a portion thereof is pledged as collateral under the Citi Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(c)Percentages are based on SLF members' capital as of March 31, 2022.

(d)SLF has various unfunded commitments to portfolio companies.

(e)SLF's investment or a portion thereof is held through a total return swap with J.P. Morgan.

(f)SLF's investment or a portion thereof is pledged as collateral under a credit facility with CIBC. Individual investments can be divided into parts which are pledged to separate credit facilities.

SLF had $3.6 million of unfunded commitments on delayed draw term loans as of March 31, 2022.

Below is a listing of SLF’s individual investments as of December 31, 2021:

December 31, 2021
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Senior Secured First Lien Debt
ABC Financial Intermediate, LLC (e)						Technology						L+4.25% (5.25%)						1/2/2025						$	19,109					$	19,038					$	19,014					4.8		%
Accentcare, Inc. (b)						Healthcare						L+4.00% (4.18%)						6/22/2026						10,030						10,030						9,976						2.5		%
Access Cig, LLC (b)						Business Services						L+3.75% (3.84%)						2/27/2025						4,233						4,220						4,200						1.1		%
Acrisure, LLC (b) (f)						Financials						L+3.50% (3.72%)						2/16/2027						28,319						27,836						27,965						7.0		%
Adtalem Global Education, Inc.						Education						5.50%						3/1/2028						2,000						2,000						1,959						0.5		%
Adtalem Global Education, Inc. (f)						Education						L+4.50% (5.25%)						8/12/2028						2,000						2,000						2,003						0.5		%
Advisor Group, Inc. (f)						Financials						L+4.50% (4.60%)						7/31/2026						7,903						7,902						7,925						2.0		%
Alchemy US Holdco 1, LLC (b)						Industrials						L+5.50% (5.60%)						10/10/2025						15,555						15,403						15,555						3.9		%
Alvogen Pharma US, Inc. (b)						Healthcare						L+5.25% (6.25%)						12/29/2023						12,497						12,388						11,935						3.0		%
Amentum Government Services Holdings, LLC (f)						Industrials						L+3.50% (3.60%)						2/1/2027						1,990						1,978						1,956						0.5		%
American Airlines Inc/AAdvantage Loyalty IP, Ltd. (b)						Transportation						L+4.75% (5.50%)						4/20/2028						$	6,316					$	6,259					$	6,534					1.6		%

50

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

December 31, 2021
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
American Rock Salt Company, LLC (f)						Chemicals						L+4.00% (4.75%)						6/9/2028						4,777						4,780						4,759						1.2		%
AmWINS Group, Inc. (f)						Financials						L+2.25% (3.00%)						2/22/2028						4,975						4,909						4,933						1.2		%
AP Gaming I, LLC (f)						Gaming/Lodging						L+3.50% (4.50%)						2/15/2024						7,467						7,327						7,410						1.9		%
APLP Holdings, LP (b)						Utilities						L+3.75% (4.75%)						5/14/2027						3,245						3,215						3,265						0.8		%
Apollo Commercial Real Estate Finance, Inc.						Financials						4.63%						6/15/2029						3,000						3,000						2,922						0.7		%
AppLovin Corp. (b)						Media/Entertainment						L+3.00% (3.50%)						10/25/2028						8,978						8,955						8,953						2.2		%
Artera Services, LLC (f)						Utilities						L+3.50% (4.50%)						3/6/2025						2,488						2,473						2,404						0.6		%
Ascensus Holidngs, Inc. (b)						Business Services						L+3.50% (4.00%)						8/2/2028						5,000						4,982						4,974						1.2		%
Asp Navigate Acquisition Corp. (f)						Healthcare						L+4.50% (5.50%)						10/6/2027						3,276						3,284						3,276						0.8		%
Astoria Energy, LLC (f)						Utilities						L+3.50% (4.50%)						12/10/2027						1,985						1,985						1,976						0.5		%
Astro AB Merger Sub, Inc. (f)						Financials						L+4.25% (5.25%)						4/30/2024						3,902						3,898						3,907						1.0		%
Asurion, LLC (b)						Business Services						L+3.25% (3.35%)						12/23/2026						4,975						4,892						4,938						1.2		%
Athenahealth, Inc. (e)						Healthcare						L+4.25% (4.38%)						2/11/2026						14,233						14,197						14,219						3.6		%
Avaya Holdings Corp. (b)						Technology						L+4.00% (4.11%)						12/15/2027						17,770						17,770						17,743						4.5		%
Aveanna Healthcare, LLC						Healthcare						L+3.75% (4.25%)						7/17/2028						5,465						5,457						5,432						1.4		%
Bally's Corp. (b)						Gaming/Lodging						L+3.25% (3.75%)						10/2/2028						2,730						2,704						2,729						0.6		%
BBB Industries, LLC (b)						Transportation						L+4.50% (4.60%)						8/1/2025						12,855						12,754						12,855						3.2		%
BCP Raptor, LLC (b)						Energy						L+4.25% (5.25%)						6/24/2024						13,604						12,835						13,572						3.4		%
BCP Renaissance, LLC (f)						Energy						L+3.50% (4.50%)						10/31/2024						5,896						5,852						5,880						1.5		%
Beasley Mezzanine Holdings, LLC						Broadcasting						8.63%						2/1/2026						2,174						2,225						2,151						0.5		%
Bella Holding Company, LLC (f)						Healthcare						L+3.75% (4.50%)						5/10/2028						7,481						7,411						7,469						1.9		%
Blackstone CQP Holdco, LP (f)						Industrials						L+3.75% (4.25%)						6/5/2028						7,967						7,931						7,944						2.0		%
BMC Software Finance, Inc. (b)						Technology						L+3.75% (3.97%)						10/2/2025						12,748						12,782						12,659						3.2		%
Bomgar Corp. (f)						Technology						L+4.00% (4.10%)						4/18/2025						1,922						1,926						1,916						0.5		%
CareCentrix, Inc. (b)						Healthcare						L+4.50% (4.72%)						4/3/2025						20,845						20,127						20,715						5.2		%
Clover Technologies Group, LLC (e)						Industrials						L+7.50% (8.50%)						2/5/2024						1,445						1,375						1,369						0.3		%
CLP Health Services, Inc. (b)						Healthcare						L+4.25% (5.00%)						12/31/2026						12,915						12,867						12,882						3.2		%
Cnt Holdings I Corp (f)						Consumer						L+3.50% (4.25%)						11/8/2027						3,474						3,474						3,473						0.9		%
CommerceHub, Inc. (f)						Technology						L+4.00% (4.75%)						12/29/2027						7,639						7,649						7,551						1.9		%
Community Care Health Network, LLC (b)						Healthcare						L+4.75% (4.85%)						2/17/2025						9,755						9,726						9,368						2.3		%
Compass Power Generation, LLC (f)						Utilities						L+3.50% (4.50%)						12/20/2024						4,777						4,765						4,753						1.2		%
Connect Finco SARL (f)						Telecom						L+3.50% (4.50%)						12/11/2026						7,538						7,560						7,534						1.9		%
Connectwise, LLC (f)						Software/Services						L+3.50% (4.00%)						9/29/2028						4,000						3,980						3,986						1.0		%
Conservice Midco, LLC (b)						Business Services						L+4.25% (4.47%)						5/13/2027						7,700						7,713						7,679						1.9		%
CONSOL Energy, Inc. (b)						Energy						L+4.50% (4.60%)						9/27/2024						3,612						3,328						3,502						0.9		%
Conterra Ultra Broadband, LLC (b)						Telecom						L+4.75% (5.75%)						4/30/2026						6,710						6,710						6,710						1.7		%
Corelogic, Inc. (b)						Business Services						L+3.50% (4.00%)						6/2/2028						7,980						7,965						7,964						2.0		%
CVENT, Inc. (e)						Technology						L+3.75% (3.83%)						11/29/2024						2,700						2,628						2,695						0.6		%
Dealer Tire, LLC (e)						Retail						L+4.25% (4.33%)						12/12/2025						3,952						3,927						3,946						1.0		%
Directv Financing, LLC (b)						Media/Entertainment						L+5.00% (5.75%)						8/2/2027						4,888						4,842						4,889						1.2		%
Dish DBS Corp.						Cable						5.25%						12/1/2026						700						700						711						0.2		%
Dish DBS Corp.						Cable						5.75%						12/1/2028						1,000						1,000						1,009						0.3		%
Division Holding Corp. (b)						Business Services						L+4.75% (5.50%)						5/26/2028						$	8,739					$	8,749					$	8,745					2.2		%

51

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

December 31, 2021
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Dunn Paper, Inc. (b)						Paper & Packaging						L+5.25% (6.25%)						8/26/2022						578						562						555						0.1		%
Dynasty Acquisition Co., Inc. (e)						Industrials						L+3.50% (3.63%)						4/6/2026						2,824						2,736						2,743						0.7		%
Dynasty Acquisition Co., Inc. (e)						Industrials						L+3.50% (3.63%)						4/6/2026						5,253						5,089						5,102						1.3		%
Echo Global Logistics, Inc. (b)						Transportation						L+3.75% (4.25%)						11/23/2028						3,330						3,322						3,313						0.8		%
Edgewater Generation, LLC (b)						Utilities						L+3.75% (3.85%)						12/12/2025						2,491						2,476						2,349						0.6		%
Emerald 2, Ltd. (b)						Industrials						L+3.25% (3.47%)						7/12/2028						518						515						514						0.1		%
Fastlane Parent Co, Inc. (b)						Transportation						L+4.50% (4.60%)						2/4/2026						1,569						1,569						1,567						0.4		%
Flex Acquisition Company, Inc. (f)						Paper & Packaging						L+3.50% (4.00%)						3/2/2028						6,957						6,920						6,939						1.7		%
Florida Food Products, LLC (f)						Food & Beverage						L+5.00% (5.75%)						10/18/2028						8,000						7,881						7,860						2.0		%
Frontier Communications Corp.						Telecom						5.00%						5/1/2028						1,240						1,303						1,276						0.3		%
Frontier Communications Corp. (b)						Telecom						L+3.75% (4.50%)						5/1/2028						19,425						19,407						19,386						4.9		%
Geon Performance Solutions, LLC (b)						Chemicals						L+4.75% (5.50%)						8/18/2028						4,705						4,671						4,739						1.2		%
Gogo Intermediate Holdings, LLC (f)						Telecom						L+3.75% (4.50%)						4/28/2028						8,381						8,381						8,373						2.1		%
Golden Nugget, LLC (b) (f)						Gaming/Lodging						L+2.50% (3.25%)						10/4/2023						3,960						3,932						3,933						1.0		%
Gordian Medical, Inc. (b)						Healthcare						L+6.25% (7.00%)						1/31/2027						11,060						10,987						10,968						2.8		%
Greenway Health, LLC (f)						Healthcare						L+3.75% (4.75%)						2/16/2024						4,733						4,462						4,496						1.1		%
GVC Holdings Gibraltar, Ltd. (f)						Gaming/Lodging						L+2.50% (3.00%)						3/29/2027						4,975						4,969						4,958						1.2		%
HAH Group Holding Company, LLC (b)						Healthcare						L+5.00% (6.00%)						10/29/2027						737						737						737						0.2		%
HAH Group Holding Company, LLC (b)						Healthcare						L+5.00% (6.00%)						10/29/2027						5,827						5,748						5,827						1.5		%
Hamilton Projects Acquiror, LLC (f)						Utilities						L+4.50% (5.25%)						6/17/2027						5,718						5,694						5,710						1.4		%
Heartland Dental, LLC (e)						Healthcare						L+3.50% (3.58%)						4/30/2025						4,154						4,076						4,109						1.0		%
Hertz Corp. (b) (f)						Transportation						L+3.25% (3.75%)						6/30/2028						4,186						4,170						4,185						1.0		%
Hertz Corp. (b) (f)						Transportation						L+3.25% (3.75%)						6/30/2028						793						790						793						0.2		%
HireRight, Inc. (f)						Business Services						L+3.75% (3.85%)						7/11/2025						7,237						7,197						7,203						1.8		%
Hudson River Trading, LLC (b)						Financials						L+3.00% (3.10%)						3/20/2028						4,975						4,910						4,933						1.2		%
ICP Industrial, Inc. (f)						Chemicals						L+3.75% (4.50%)						12/29/2027						4,975						4,971						4,900						1.2		%
IDERA, Inc. (f)						Technology						L+3.75% (4.50%)						3/2/2028						6,983						6,994						6,972						1.7		%
Ineos Us Finance, LLC (f)						Chemicals						L+2.50% (3.00%)						11/6/2028						4,000						3,995						3,977						1.0		%
Iri Holdings, Inc. (b)						Business Services						L+4.25% (4.35%)						12/1/2025						7,819						7,800						7,809						2.0		%
Jack Ohio Finance, LLC (f)						Gaming/Lodging						L+4.75% (5.50%)						10/4/2028						4,000						3,980						3,980						1.0		%
Jane Street Group, LLC (f)						Financials						L+2.75% (2.85%)						1/26/2028						4,938						4,932						4,895						1.2		%
Jump Financial, LLC (b)						Financials						L+3.50% (4.00%)						8/7/2028						2,494						2,482						2,475						0.6		%
Kissner Milling Co., Ltd.						Industrials						4.88%						5/1/2028						5,000						5,035						4,814						1.2		%
LABL, Inc. (b)						Paper & Packaging						L+5.00% (5.50%)						10/30/2028						5,000						4,925						4,988						1.3		%
Liquid Tech Solutions Holdings, LLC (b) (f)						Industrials						L+4.75% (5.50%)						3/20/2028						10,216						10,166						10,216						2.6		%
Luxembourg Investment Co., 428 SARL (b)						Chemicals						S+5.00% (5.50%)						1/3/2029						3,864						3,825						3,827						1.0		%
Medallion Midland Acquisition, LP (f)						Energy						L+3.75% (4.50%)						10/18/2028						3,614						3,579						3,594						0.9		%
Meridian Adhesives Group, Inc. (b)						Chemicals						L+4.00% (4.75%)						7/24/2028						5,000						4,953						5,000						1.3		%
MH Sub I, LLC (f)						Business Services						L+3.75% (4.75%)						9/13/2024						8,641						8,636						8,650						2.2		%
Michael Baker International, LLC (b)						Industrials						L+5.00% (5.75%)						12/1/2028						3,334						3,301						3,301						0.8		%
MicroStrategy, Inc.						Software/Services						6.13%						6/15/2028						$	1,500					$	1,500					$	1,508					0.4		%

52

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

December 31, 2021
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Monitronics International, Inc. (b)						Business Services						L+6.50% (7.75%)						3/29/2024						5,508						5,301						5,164						1.3		%
MPH Acquisition Holdings, LLC (b)						Healthcare						L+4.25% (4.75%)						9/1/2028						4,988						4,895						4,860						1.2		%
MSG National Properties, LLC (b)						Media/Entertainment						L+6.25% (7.00%)						11/12/2025						12,188						12,431						12,188						3.1		%
MYOB US Borrower, LLC (f)						Business Services						L+4.00% (4.10%)						5/6/2026						5,468						5,453						5,422						1.4		%
National Mentor Holdings, Inc. (b) (f)						Healthcare						L+3.75% (4.50%)						3/2/2028						7,370						7,336						7,282						1.8		%
National Mentor Holdings, Inc. (f)						Healthcare						L+3.75% (4.50%)						3/2/2028						233						232						230						0.1		%
Navitas Midstream Midland Basin, LLC (b)						Energy						L+4.00% (4.75%)						12/13/2024						10,676						10,676						10,639						2.7		%
Nexus Buyer, LLC (f)						Business Services						L+3.75% (3.85%)						11/9/2026						1,489						1,485						1,480						0.4		%
Nouryon USA, LLC (e)						Chemicals						L+3.00% (3.10%)						10/1/2025						2,342						2,310						2,332						0.6		%
Paysafe Finance, PLC						Software/Services						4.00%						6/15/2029						400						400						373						0.1		%
Perstorp Holding Ab (b)						Chemicals						L+4.75% (4.91%)						2/27/2026						8,777						8,325						8,777						2.2		%
PG&E Corp. (f)						Utilities						L+3.00% (3.50%)						6/23/2025						10,698						10,735						10,569						2.7		%
Proofpoint, Inc. (b)						Software/Services						L+3.25% (3.75%)						8/31/2028						2,500						2,494						2,488						0.6		%
Protective Industrial Products, Inc. (b)						Industrials						L+4.00% (4.75%)						12/29/2027						9,127						9,091						9,087						2.3		%
Pug, LLC (f)						Technology						L+3.50% (3.60%)						2/12/2027						4,962						4,843						4,843						1.2		%
Pug, LLC (f)						Technology						L+4.25% (4.75%)						2/13/2027						1,995						1,986						1,983						0.5		%
Quikrete Holdings, Inc. (f)						Industrials						L+3.00% (3.19%)						6/11/2028						8,000						7,959						7,978						2.0		%
Regionalcare Hospital Partners Holdings, Inc.						Healthcare						4.38%						2/15/2027						2,000						2,000						2,025						0.5		%
Regionalcare Hospital Partners Holdings, Inc. (b)						Healthcare						L+3.75% (3.85%)						11/14/2025						5,195						5,214						5,186						1.3		%
RXB Holdings, Inc. (f)						Healthcare						L+4.50% (5.25%)						12/20/2027						10,205						10,244						10,205						2.6		%
S&S Holdings, LLC (f)						Consumer						L+5.00% (5.50%)						3/10/2028						6,948						6,759						6,948						1.7		%
Safe Fleet Holdings, LLC (f)						Industrials						L+3.00% (4.00%)						2/3/2025						2,374						2,359						2,357						0.6		%
Safety Products/JHC Acquisition Corp. (b)						Industrials						L+4.50% (4.60%)						6/28/2026						938						891						892						0.2		%
Safety Products/JHC Acquisition Corp. (b)						Industrials						L+4.50% (4.60%)						6/28/2026						17,360						16,549						16,492						4.1		%
Schenectady International Group, Inc. (b)						Chemicals						L+4.75% (4.87%)						10/15/2025						19,911						19,791						19,911						5.0		%
SCIH Salt Holdings, Inc. (b) (f)						Industrials						L+4.00% (4.75%)						3/16/2027						18,735						18,671						18,532						4.6		%
SFR Group, SA (b) (e)						Telecom						L+4.00% (4.13%)						8/14/2026						12,705						12,640						12,629						3.2		%
Sierra Acquisition, Inc. (b)						Food & Beverage						L+4.00% (5.00%)						11/11/2024						4,902						4,712						4,890						1.2		%
Sophia, LP (f)						Software/Services						L+3.50% (4.00%)						10/7/2027						3,004						3,007						3,001						0.8		%
Spirit Aerosystems, Inc. (b)						Industrials						L+3.75% (4.25%)						1/15/2025						2,555						2,584						2,556						0.6		%
SSH Group Holdings, Inc. (e)						Education						L+4.25% (4.40%)						7/30/2025						10,518						10,064						10,134						2.5		%
Staples, Inc. (b)						Business Services						L+5.00% (5.13%)						4/16/2026						4,949						4,896						4,774						1.2		%
Station Casinos, LLC (f)						Gaming/Lodging						L+2.25% (2.50%)						2/8/2027						2,278						2,267						2,257						0.6		%
Team Health Holdings, Inc. (e)						Healthcare						L+2.75% (3.75%)						2/6/2024						2,969						2,808						2,830						0.7		%
Tecta America Corp. (f)						Industrials						L+4.25% (5.00%)						4/6/2028						9,045						9,018						9,033						2.3		%
Tenneco, Inc.						Transportation						5.13%						4/15/2029						3,846						3,846						3,773						0.9		%
Tenneco, Inc. (e)						Transportation						L+3.00% (3.08%)						10/1/2025						2,969						2,911						2,921						0.7		%
The Dun & Bradstreet Corp. (f)						Business Services						L+3.25% (3.35%)						2/6/2026						4,863						4,884						4,841						1.2		%
TransDigm, Inc. (f)						Industrials						L+2.25% (2.35%)						12/9/2025						2,970						2,953						2,926						0.7		%
Traverse Midstream Partners, LLC (b)						Energy						S+4.25% (5.25%)						9/27/2024						14,962						14,936						14,878						3.7		%
Triton Water Holdings, Inc. (f)						Food & Beverage						L+3.50% (4.00%)						3/31/2028						7,463						7,445						7,374						1.8		%
Truck Hero, Inc. (f)						Transportation						L+3.25% (4.00%)						1/31/2028						1,489						1,485						1,479						0.4		%

53

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

December 31, 2021
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
TSL Engineered Products, LLC (b)						Industrials						L+4.75% (5.50%)						1/7/2028						$	7,858					$	7,785					$	7,858					2.0		%
United Airlines, Inc. (f)						Transportation						L+3.75% (4.50%)						4/21/2028						3,794						3,782						3,800						1.0		%
University Support Services, LLC (f)						Education						L+3.25% (3.75%)						6/29/2028						5,000						4,983						4,975						1.2		%
Urban One, Inc.						Media/Entertainment						7.38%						2/1/2028						6,000						6,194						6,200						1.6		%
Venga Finance Sarl (b)						Telecom						L+4.75% (5.25%)						12/4/2028						4,000						3,880						3,913						1.0		%
Veritext Corp. (f)						Business Services						L+3.25% (3.35%)						8/1/2025						3,505						3,463						3,472						0.9		%
Virgin Media Bristol, LLC (f)						Telecom						L+3.25% (3.36%)						1/31/2029						2,500						2,497						2,497						0.6		%
Vyaire Medical, Inc. (f)						Healthcare						L+4.75% (5.75%)						4/16/2025						7,831						6,573						6,695						1.7		%
WaterBridge Midstream Operating, LLC (b)						Energy						L+5.75% (6.75%)						6/22/2026						10,748						9,572						10,462						2.6		%
Watlow Electric Manufacturing Co. (b)						Industrials						L+3.75% (4.25%)						3/2/2028						9,473						9,431						9,447						2.4		%
Western Dental Services, Inc. (f)						Healthcare						L+4.50% (5.25%)						8/18/2028						9,075						9,067						9,070						2.3		%
Western Dental Services, Inc. (f)						Healthcare						L+4.50% (5.25%)						8/18/2028						389						389						388						0.1		%
Wilsonart, LLC (b)						Consumer						L+3.50% (4.50%)						12/31/2026						7,450						7,444						7,444						1.9		%
Wrench Group, LLC (f)						Consumer						L+4.00% (4.22%)						4/30/2026						3,151						3,098						3,151						0.8		%
YI, LLC (e)						Healthcare						L+4.00% (5.00%)						11/7/2024						8,974						8,891						8,974						2.3		%
Subtotal Senior Secured First Lien Debt																														$	945,196					$	947,148					237.6		%
Senior Secured Second Lien Debt
American Rock Salt Company, LLC (b)						Chemicals						L+7.25% (8.00%)						6/11/2029						$	4,943					$	4,894					$	4,955					1.2		%
Asp Ls Acquisition Corp. (b)						Transportation						L+7.50% (8.25%)						4/30/2029						2,065						2,075						2,074						0.5		%
Asurion, LLC (b)						Business Services						L+5.25% (5.35%)						1/31/2028						15,632						15,564						15,671						3.9		%
Barracuda Networks, Inc. (b)						Software/Services						L+6.75% (7.50%)						10/30/2028						4,698						4,724						4,749						1.2		%
CDS U.S. Intermediate Holdings, Inc. (b)						Media/Entertainment						L+8.00% (9.00%) 7.00% PIK						11/24/2027						5,088						5,070						5,058						1.3		%
Edelman Financial Services, LLC (b) (e)						Financials						L+6.75% (6.84%)						7/20/2026						9,972						9,929						9,989						2.5		%
IDERA, Inc. (b) (e)						Technology						L+6.75% (7.50%)						3/2/2029						1,545						1,537						1,545						0.4		%
Tecta America Corp. (b)						Industrials						L+8.50% (9.25%)						4/6/2029						4,998						4,973						4,998						1.3		%
TIBCO Software, Inc. (b)						Technology						L+7.25% (7.36%)						3/3/2028						13,020						13,166						13,047						3.3		%
Subtotal Senior Secured Second Lien Debt																														$	61,932					$	62,086					15.6		%
Collateralized Securities
Collateralized Securities - Debt Investments
AIG CLO, Ltd. 21‐1A F						Diversified Investment Vehicles						L+6.90% (7.03%)						4/22/2034						$	1,410					$	1,285					$	1,270					0.3		%
Avery Point CLO, Ltd. 15-6A E1 (f)						Diversified Investment Vehicles						L+5.50% (5.64%)						8/6/2027						3,500						3,124						3,380						0.9		%
Battalion CLO, Ltd. 21-17A F						Diversified Investment Vehicles						L+7.50% (7.63%)						3/9/2034						1,224						1,132						1,123						0.3		%
Carlyle GMS CLO, 16-3A FRR (f)						Diversified Investment Vehicles						L+8.60% (8.73%)						7/20/2034						2,100						1,984						1,983						0.5		%
Eaton Vance CDO, Ltd. 15-1A FR (f)						Diversified Investment Vehicles						L+7.97% (8.10%)						1/20/2030						2,000						1,736						1,829						0.5		%
Elevation CLO, Ltd. 13-1A D2						Diversified Investment Vehicles						L+7.65% (7.80%)						8/15/2032						2,000						1,961						1,973						0.5		%

54

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

December 31, 2021
Portfolio Company (d)						Industry						Investment Coupon Rate (a)						Maturity						Principal/ Number of Shares						Amortized Cost						Fair Value						% of Members' Capital (c)
Great Lakes CLO, Ltd. 21-6A E						Diversified Investment Vehicles						L+8.03% (8.25%)						1/15/2034						$	5,150					$	4,945					$	4,906					1.2		%
Greywolf CLO, Ltd. 20-3RA ER (f)						Diversified Investment Vehicles						L+8.74% (8.87%)						4/15/2033						1,000						873						949						0.2		%
Hayfin Kingsland XI, Ltd. 19‐2A ER						Diversified Investment Vehicles						L+7.72% (7.85%)						10/20/2034						2,500						2,426						2,412						0.6		%
Highbridge Loan Management, Ltd. 11A-17 E (f)						Diversified Investment Vehicles						L+6.10% (6.24%)						5/6/2030						3,000						2,689						2,825						0.7		%
Jamestown CLO, Ltd. 17-10A D (f)						Diversified Investment Vehicles						L+6.70% (6.82%)						7/17/2029						1,200						1,120						1,153						0.3		%
KKR Financial CLO, Ltd. 15 FR						Diversified Investment Vehicles						L+8.50% (8.62%)						1/18/2032						2,000						1,892						1,880						0.5		%
LCM, Ltd. Partnership 16A ER2 (f)						Diversified Investment Vehicles						L+6.38% (6.50%)						10/15/2031						2,500						2,280						2,373						0.6		%
Marble Point CLO, Ltd. 20-1A E (f)						Diversified Investment Vehicles						L+6.82% (6.95%)						4/20/2033						4,500						4,400						4,392						1.1		%
Medalist Partners Corporate Finance CLO, Ltd. 21-1A D (f)						Diversified Investment Vehicles						L+7.48% (7.69%)						10/20/2034						3,000						2,852						2,833						0.7		%
Northwoods Capital, Ltd. 17-15A ER						Diversified Investment Vehicles						L+7.64% (7.85%)						6/20/2034						3,000						2,920						2,909						0.7		%
OCP CLO, Ltd. 14-5A DR (f)						Diversified Investment Vehicles						L+5.70% (5.82%)						4/26/2031						2,200						2,077						2,118						0.5		%
OZLM, Ltd. 16-15A DR (f)						Diversified Investment Vehicles						L+6.75% (6.88%)						4/20/2033						2,000						1,903						1,922						0.5		%
Palmer Square CLO, Ltd. 21‐4A F						Diversified Investment Vehicles						L+7.66% (7.80%)						10/15/2034						1,500						1,426						1,413						0.4		%
Regatta II Funding, LP 13-2A DR2 (f)						Diversified Investment Vehicles						L+6.95% (7.07%)						1/15/2029						2,000						1,923						1,968						0.5		%
Saranac CLO, Ltd. 20-8A E						Diversified Investment Vehicles						L+8.12% (8.28%)						2/20/2033						1,455						1,441						1,433						0.4		%
Sound Point CLO, Ltd. 17-1A E (f)						Diversified Investment Vehicles						L+5.96% (6.08%)						1/23/2029						4,000						3,589						3,736						0.9		%
Sound Point CLO, Ltd. 17-2A E (f)						Diversified Investment Vehicles						L+6.10% (6.22%)						7/25/2030						2,400						2,065						2,173						0.6		%
Sound Point CLO, Ltd. 18-3A D (f)						Diversified Investment Vehicles						L+5.79% (5.91%)						10/26/2031						1,000						899						895						0.2		%
Symphony CLO, Ltd. 2012-9A ER2 (f)						Diversified Investment Vehicles						L+6.95% (7.07%)						7/16/2032						3,000						2,769						2,937						0.7		%
Trimaran CAVU 2021-2A, Ltd. 21-2A E (f)						Diversified Investment Vehicles						L+7.20% (7.33%)						10/25/2034						3,000						2,941						2,915						0.7		%
Trysail CLO, Ltd. 21‐1A E						Diversified Investment Vehicles						L+7.38% (7.52%)						7/20/2032						1,500						1,444						1,445						0.4		%
Venture CDO, Ltd. 16-23A ER2 (f)						Diversified Investment Vehicles						L+7.55% (7.67%)						7/19/2034						3,000						2,912						2,892						0.7		%
Venture CDO, Ltd. 16-25A E (f)						Diversified Investment Vehicles						L+7.20% (7.33%)						4/20/2029						2,000						1,943						1,936						0.5		%
Venture CDO, Ltd. 20-39A E						Diversified Investment Vehicles						L+7.63% (7.75%)						4/15/2033						4,995						4,961						4,922						1.2		%
Venture CLO 43, Ltd. 21-43A E (f)						Diversified Investment Vehicles						L+7.15% (7.27%)						4/15/2034						3,000						2,913						2,901						0.7		%
Wind River CLO, Ltd. 14-2A FR						Diversified Investment Vehicles						L+7.87% (7.99%)						1/15/2031						3,000						2,495						2,489						0.6		%
Zais CLO 13, Ltd. 19-13A D1 (f)						Diversified Investment Vehicles						L+4.52% (4.64%)						7/15/2032						3,000						2,722						2,818						0.7		%
Subtotal Collateralized Securities																														$	78,042					$	79,103					19.8		%

55

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

December 31, 2021

Portfolio Company (d)

Industry

Investment Coupon Rate (a)

Maturity

Principal/ Number of Shares

Amortized Cost

Fair Value

% of Members' Capital (c)

TOTAL INVESTMENTS

$

1,085,170

$

1,088,337

273.0

%

______________

(a)The majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate ("LIBOR" or "L"), Secured Overnight Financing Rate ("SOFR" or "S"), or Prime ("P") and which reset daily, monthly, quarterly, or semiannually. For each, SLF has provided the spread over the relevant reference rate and the current interest rate in effect at December 31, 2021. Certain investments are subject to reference rate floors. For fixed rate loans, a spread above a reference rate is not applicable. For floating rate securities the all-in rate is disclosed within parentheses.

(b)SLF's investment or a portion thereof is pledged as collateral under the Citi Credit Facility. Individual investments can be divided into parts which are pledged to separate credit facilities.

(c)Percentages are based on SLF members' capital as of December 31, 2021.

(d)SLF has various unfunded commitments to portfolio companies.

(e)SLF's investment or a portion thereof is held through a total return swap with J.P. Morgan.

(f)SLF's investment or a portion thereof is pledged as collateral under a credit facility with CIBC. Individual investments can be divided into parts which are pledged to separate credit facilities.

SLF had $2.2 million of unfunded commitments on delayed draw term loans as of December 31, 2021.

Below is certain summarized financial information for SLF as of March 31, 2022 and December 31, 2021 and for the periods ended March 31, 2022 and March 31, 2021:

Selected Statement of Assets and Liabilities Information			March 31,						December 31,
			2022						2021
			(Unaudited)
ASSETS
Investments, at fair value (amortized cost of $1,074,836 and $1,085,170, respectively)			$	1,064,763					$	1,088,337
Cash and other assets			88,279						107,623
Total assets			$	1,153,042					$	1,195,960
LIABILITIES
Revolving credit facilities (net of deferred financing costs of $2,243 and $2,488, respectively)			$	629,807					$	631,562
Secured borrowings			67,530						94,737
Other liabilities			67,439						71,008
Total liabilities			$	764,776					$	797,307
MEMBERS' CAPITAL
Total members' capital			$	388,266					$	398,653
Total liabilities and members' capital			$	1,153,042					$	1,195,960

56

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Selected Statements of Operations Information									For the three months ended March 31,						For the period January 20, 2021 through March 31,
									2022						2021
									(Unaudited)						(Unaudited)
Investment income:
Total investment income									$	14,429					$	8,452
Operating expenses:
Interest and credit facility financing expenses									3,368						1,594
Other expenses									634						283
Total expenses									4,002						1,877
Net investment income									10,427						6,575
Realized and unrealized gain:
Net realized and unrealized gain (loss)									(13,249)						3,478
Net increase (decrease) in net assets resulting from operations									$	(2,822)					$	10,053

Unconsolidated Significant Subsidiaries

In accordance with Rules 3-09 and 4-08(g) of Regulation S-X (“Rule 3-09” and “Rule 4-08(g),” respectively), the Company must determine which of its unconsolidated controlled affiliated investments are considered significant subsidiaries, if any. As of March 31, 2022 and for the three months ended March 31, 2022, the Company's investment in Siena Capital Finance, LLC exceeded the threshold of at least one of the tests under Rule 4-08(g). As of December 31, 2021, the Company's investments in Siena Capital Finance, LLC and FBLC Senior Loan Fund, LLC exceeded the threshold of at least one of the tests under Rule 4-08(g). As of December 31, 2021, neither Siena Capital Finance, LLC nor FBLC Senior Loan Fund, LLC exceeded the threshold of any tests under Rule 3-09, however as of and for the three months ended March 31, 2022, Siena Capital Finance, LLC exceeded the threshold of at least one of the tests under Rule 3-09. The summarized financial information for FBLC Senior Loan Fund, LLC is provided above in Note 3. Included below is the summarized financial information for Siena Capital Finance, LLC.

Selected Balance Sheet Information									As of March 31,						As of December 31,
									2022						2021
									(Unaudited)
Total Assets									$	519,330					$	470,781
Total Liabilities									462,069						414,464

Selected Income Statement Information									For the three months ended March 31,
									2022
									(Unaudited)
Revenues									$	11,900
Net income									2,945

Note 4 — Related Party Transactions and Arrangements

Investment Advisory Agreement

    Pursuant to the Investment Advisory Agreement and for the investment advisory and management services provided

57

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

thereunder, the Company pays the Adviser a base management fee and an incentive fee.

    Prior to February 1, 2019, the Adviser provided investment advisory and management services under the investment advisory and management services agreement, effective November 1, 2016 (the “Prior Investment Advisory Agreement”), and most recently re-approved by the Board in August 2018. The terms of the Prior Investment Advisory Agreement were materially identical to the Investment Advisory Agreement. The Prior Investment Advisory Agreement automatically terminated on February 1, 2019 upon the indirect change of control of the Adviser on the consummation of Franklin Templeton's acquisition of BSP. The Investment Advisory Agreement was approved by the Board, including a majority of independent directors, on October 22, 2018, and by stockholders at a special meeting held on January 11, 2019 and took effect February 1, 2019. The Board renewed the Investment Advisory Agreement on January 31, 2022.

Base Management Fee

    The base management fee is calculated at an annual rate of 1.5% of the Company's average gross assets (including assets purchased with borrowed funds). The Company's gross assets increase or decrease with any appreciation or depreciation associated with a derivative contract. Average gross assets is calculated based on the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters. The base management fee is payable quarterly in arrears and is appropriately pro-rated for any partial month or quarter. All or any part of the base management fee not taken as to any quarter may be deferred without interest and may be taken in such other quarter as the Adviser will determine within three years.

    As of March 31, 2022 and December 31, 2021, $10.6 million and $10.5 million was payable to the Adviser for base management fees, respectively.

For the three months ended March 31, 2022, the Company incurred $10.5 million, in base management fees under the Investment Advisory Agreement. For the three months ended March 31, 2021, the Company incurred $9.6 million in base management fees under the Investment Advisory Agreement.

Incentive Fees

    The incentive fee consists of two parts. The first part is referred to as the incentive fee on income and it is calculated and payable quarterly in arrears based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding quarter. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income, and any other income (including any other fees, other than fees for providing managerial assistance, such as commitment, origination, structuring, diligence, and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the administration agreement and any interest expense and dividends paid on any issued and 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 original issue discount debt instruments with payment-in-kind interest 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 or losses, or unrealized capital appreciation or depreciation. The payment of the incentive fee on income is subject to payment of a preferred return to investors each quarter, expressed as a quarterly rate of return on the value of the Company's net assets at the end of the most recently completed calendar quarter, of 1.75% (7.00% annualized), subject to a “catch up” feature (as described below). The calculation of the incentive fee on income for each quarter is as follows:

•No incentive fee on income will be payable to the Adviser in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income does not exceed the preferred return rate of 1.75% or 7.00% annualized (the “Preferred Return”) on net assets;

•100% of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the preferred return but is less than or equal to 2.1875% in any calendar quarter (8.75% annualized) will be payable to the Adviser. This portion of the Company’s incentive fee on income is referred to as the “catch up” and is intended to provide the Adviser with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income when the Company’s Pre-Incentive Fee Net Investment Income reaches 2.1875% (8.75% annualized) in any calendar quarter; and

•For any quarter in which the Company's Pre-Incentive Fee Net Investment Income exceeds 2.1875% (8.75% annualized), the incentive fee on income will be equal to 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, as the Preferred Return and catch-up will have been achieved.

    As of March 31, 2022 and December 31, 2021, $7.4 million and $7.2 million was payable to the Adviser for the incentive fee on income, respectively.

58

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    For the three months ended March 31, 2022 and 2021, the Company incurred $7.3 million and $6.7 million, respectively, in incentive fees on income under the Investment Advisory Agreement.

    The second part of the incentive fee, referred to as the “incentive fee on capital gains during operations,” is an incentive fee on capital gains earned on liquidated investments from the portfolio during operations prior to the Company’s liquidation and is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, if earlier). This fee equals 20% of the Company’s incentive fee capital gains, which equals the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For the three months ended March 31, 2022 and 2021, the Company did not incur incentive fees on capital gains during operations under the Investment Advisory Agreement.

Administration Agreement

    In connection with the Administration Agreement, BSP provides the Company with office facilities and administrative services. As of March 31, 2022 and December 31, 2021, $0.4 million and $1.6 million was payable to BSP under the Administration Agreement, respectively.

    For the three months ended March 31, 2022 and 2021, the Company incurred $0.3 million and $0.5 million, respectively, in administrative service fees under the Administration Agreement.

Co-Investment Relief

    The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC. The SEC staff has granted the Company exemptive relief that allows it to enter into certain negotiated co-investment transactions alongside with other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with its investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions (the “Order”). Pursuant to the Order, the Company is permitted to co-invest with its affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of its eligible directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to the Company and the Company's stockholders and do not involve overreaching in respect of the Company or the Company's stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objective and strategies.    

Due To/From Affiliated Funds

Included within Prepaid and Other Assets on the Consolidated Statements of Assets and Liabilities as of March 31, 2022 and December 31, 2021 are $0.0 and $2.6 million, respectively of receivables from Affiliated Funds related to investment transactions.

Note 5 — Borrowings

Wells Fargo Credit Facility

    On July 24, 2012, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, Funding I, entered into a revolving credit facility with Wells Fargo and U.S. Bank as collateral agent, account bank, and collateral custodian (as amended from time to time, the “Existing Wells Fargo Credit Facility”). The Existing Wells Fargo Credit Facility was amended on July 7, 2020 (the "July 7th Amendment") to decrease the total aggregate principal amount of borrowings from $600.0 million on a committed basis to $575.0 million. Prior to the July 7th Amendment, the facility was priced at one-month LIBOR, with no LIBOR floor, plus a spread ranging between 1.65% and 2.50% per annum. After the July 7th Amendment, the Existing Wells Fargo Credit Facility was priced at one-month LIBOR, with no LIBOR floor, plus a spread of 2.75% per annum. Interest was payable quarterly in arrears. Funding I was subject to a non-usage fee to the extent the aggregate principal amount available under the Existing Wells Fargo Credit Facility has not been borrowed. The non-usage fee per annum was 0.50% for the first 25% of the unused balance and 2.0% for the portion of the unused balance that exceeded 25%, except for the period from March 15, 2019 through June 15, 2019, where the non-usage fee per annum was 0.50% on any principal amount unused.

    On August 28, 2020, the Company refinanced the Existing Wells Fargo Credit Facility with (i) a $300.0 million revolving credit facility with the Company, as collateral manager, Funding I, as borrower, the lenders party thereto, Wells Fargo, as administrative agent, and U.S. Bank, as collateral agent and collateral custodian (the “New Wells Fargo Credit

59

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Facility,” together with Existing Wells Fargo Credit Facility, “Wells Fargo Credit Facility”) and (ii) the JPM Credit Facility (as defined below).

    The New Wells Fargo Credit Facility provides for borrowings through August 28, 2023, and any amounts borrowed under the New Wells Fargo Credit Facility will mature on August 28, 2025. The New Wells Fargo Credit Facility is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread calculated based upon the composition of loans in the collateral pool, which will not exceed 2.75% per annum. Interest is payable quarterly in arrears. Funding I will be subject to a non-usage fee to the extent the commitments available under the New Wells Fargo Credit Facility have not been borrowed. The non-usage fee per annum is 0.50% for the first 25% of the unused balance and up to 2.0% for the remaining unused balance. Funding I paid a structuring fee and incurred other customary costs and expenses in connection with the New Wells Fargo Credit Facility. Pursuant to an amendment entered into on April 6, 2021, the commitment fee for any unused portion of the New Wells Fargo Credit Facility was temporarily reduced until September 30, 2021. Additionally, the maximum spread was reduced from 2.75% to 2.50% as a result of this amendment. The other terms of the New Wells Fargo Credit Facility were unchanged.

    Funding I’s obligations under the New Wells Fargo Credit Facility are secured by a first priority security interest in substantially all of the assets of Funding I, including its portfolio of investments and the Company’s equity interest in Funding I. The obligations of Funding I under the New Wells Fargo Credit Facility are non-recourse to the Company.

    In connection with the New Wells Fargo Credit Facility, the Company and Funding I have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The New Wells Fargo Credit Facility contains customary default provisions pursuant to which the administrative agent and the lenders under the New Wells Fargo Credit Facility may terminate the Company in its capacity as collateral manager/portfolio manager under the New Wells Fargo Credit Facility. Upon the occurrence of an event of default under the New Wells Fargo Credit Facility, the administrative agent or the lenders may declare the outstanding advances and all other obligations under the New Wells Fargo Credit Facility immediately due and payable.

JPM Credit Facility

    On August 28, 2020, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, 57th Street, entered into a $300.0 million revolving credit facility with JPMorgan Chase Bank, National Association, as administrative agent (“JPM”), and U.S. Bank, as collateral agent, collateral administrator and securities intermediary (the “JPM Credit Facility”).

The JPM Credit Facility provides for borrowings through August 28, 2023, and any amounts borrowed under the JPM Credit Facility will mature on August 28, 2023 unless the administrative agent exercises its option to extend the maturity date to August 28, 2024. The JPM Credit Facility is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread of 2.75% per annum. Interest is payable quarterly in arrears. 57th Street will be subject to a non-usage fee to the extent the commitments available under the JPM Credit Facility have not been borrowed. The non-usage fee per annum is 0.50% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance until August 28, 2021, when the non-usage fee per annum is 0.75% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance. 57th Street paid a structuring fee and incurred other customary costs and expenses in connection with the JPM Credit Facility. On January 21, 2021, the Company entered into an amendment (the “JPM Amendment”) to the JPM Credit Facility. The JPM Amendment, among other things, increases the amount that the Company is permitted to borrow under the JPM Credit Agreement from $300.0 million to $400.0 million. On April 12, 2021, the Company, through 57th Street, amended and restated the JPM Credit Facility. The amendment and restatement temporarily reduced the previous minimum funding amount until October 13, 2021. The other material terms of the JPM Credit Facility were unchanged.

    57th Street’s obligations under the JPM Credit Facility are secured by a first priority security interest in substantially all of the assets of 57th Street, including its portfolio of investments and the Company’s equity interest in 57th Street. The obligations of 57th Street under the JPM Credit Facility are non-recourse to the Company.

    In connection with the JPM Credit Facility, the Company and 57th Street have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The JPM Credit Facility contains customary default provisions pursuant to which the administrative agent and the lenders under the JPM Credit Facility may terminate the Company in its capacity as collateral manager/portfolio manager under the JPM Credit Facility. Upon the occurrence of an event of default under the JPM Credit Facility, the administrative agent or the lenders may declare the outstanding advances and all other obligations under the JPM Credit Facility immediately due and payable.

60

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Citi Credit Facility

On June 27, 2014, the Company, through a wholly-owned, special purpose financing subsidiary, CB Funding, entered into a credit facility (as amended from time to time, the “Citi Credit Facility”) with Citibank, N.A. ("Citi") as administrative agent and U.S. Bank as collateral agent, account bank, and collateral custodian. From January 1, 2020 to January 20, 2021 the Citi Credit Facility provided for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, with a reinvestment period ending on May 31, 2021 and maturity date of May 31, 2022. On January 20, 2021, SLF, the Company's joint venture with CCLF entered into an amendment to the Citi Credit Facility (the “Citi Credit Agreement”). The amendment, among other things, (i) replaces the Company with SLF as the collateral manager under the Citi Credit Agreement, (ii) extends the end of the reinvestment period from May 31, 2021 to May 31, 2023 and (iii) extends the final maturity date from May 31, 2022 to May 31, 2024. As a result of this amendment to the Citi Credit Facility, the Company incurred a realized loss on extinguishment of debt of $1.3 million. In connection with the Citi Credit Facility, CB Funding has made certain representations and warranties, is required to comply with various covenants, reporting requirements, and other customary requirements for similar facilities and is subject to certain customary events of default. Upon the occurrence and during the continuation of an event of default, Citi may declare the outstanding advances and all other obligations under the Citi Credit Facility immediately due and payable. During the continuation of an event of default, CB Funding must pay interest at a default rate.

    The Citi Credit Facility contains customary default provisions for facilities of this type pursuant to which Citi may terminate the rights, obligations, power, and authority of the Company, in its capacity as servicer of the portfolio assets under the Citi Credit Facility, including, but not limited to, non-performance of Citi Credit Facility obligations, insolvency, defaults of certain financial covenants, and other events with respect to the Company that may be adverse to Citi and the secured parties under the Citi Credit Facility.

    The Citi Credit Facility is priced at three-month LIBOR plus a spread of 1.60% per annum through and including the last day of the investment period and 2.00% per annum thereafter. Interest is payable quarterly in arrears. CB Funding is subject to a non-usage fee to the extent the aggregate principal amount available under the Citi Credit Facility has not been borrowed. The non-usage fee per annum is 0.50%. Any amounts borrowed under the Citi Credit Facility along with any accrued and unpaid interest thereunder will mature, and will be due and payable, in three years.

MassMutual Credit Facility

    On July 7, 2020, the Company and a wholly-owned, special purpose financing subsidiary, BDCA Asset Financing, entered into a loan and servicing agreement (the “MassMutual Credit Facility”) with Massachusetts Mutual Life Insurance Company (“MassMutual”) as facility servicer and a lender and U.S. Bank National Association as collateral custodian, collateral administrator and administrative agent. The MassMutual Credit Facility provides for borrowings of up to $100.0 million on a committed basis, and, subject to satisfaction of certain conditions, contains an accordion feature whereby the Mass Mutual Credit Facility can be expanded to $150.0 million.

    BDCA Asset Financing’s obligations under the MassMutual Credit Facility are secured by a first priority security interest in substantially all of the assets of BDCA Asset Financing, including its portfolio of investments and the Company’s equity interest in BDCA Asset Financing. The obligations of BDCA Asset Financing under the MassMutual Credit Facility are non-recourse to the Company.

    The MassMutual Credit Facility provides for borrowings through December 31, 2021 and matures on December 31, 2025.

    The MassMutual Credit Facility is priced at three-month LIBOR, with a LIBOR floor of 0.75%, plus a spread of 5.0% per annum. Interest is payable quarterly in arrears. BDCA Asset Financing will be subject to a non-usage fee of 0.50% to the extent the aggregate principal amount available under the MassMutual Credit Facility has not been borrowed. BDCA Asset Financing paid a structuring fee and incurred other customary costs and expenses in connection with the MassMutual Credit Facility.

    In connection with the MassMutual Credit Facility, the Company and BDCA Asset Financing have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The MassMutual Credit Facility contains customary default provisions pursuant to which MassMutual may terminate the Company in its capacity as portfolio asset servicer of the portfolio assets under the MassMutual Credit Facility. Upon the occurrence of an event of default, MassMutual may declare the outstanding advances and all other obligations under the MassMutual Credit Facility immediately due and payable.

61

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Effective February 18, 2022, the Company terminated the Mass Mutual Credit Facility. As a result of this termination, the Company incurred a realized loss on extinguishment of debt of $1.8 million.

2022 Notes

    On December 14, 2017, the Company entered into a Purchase Agreement (the “2022 Notes Purchase Agreement”) with Sandler O'Neill & Partners, L.P. (the "Initial Purchaser") relating to the Company's sale of $150.0 million aggregate principal amount of its 4.75% fixed rate notes due 2022 (the “2022 Notes”) to the Initial Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act and for initial resale by the Initial Purchaser to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act and to institutional accredited investors under Rule 501(a)(1), (2), (3), or (7) under the Securities Act. The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The 2022 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2022 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The 2022 Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The net proceeds from the sale of the 2022 Notes was approximately $147.0 million, after deducting an offering price discount of approximately $0.8 million, as well as Initial Purchaser’s discounts and commissions of approximately $1.7 million and offering expenses of approximately $0.6 million, each payable by the Company. The Company used the net proceeds to repay outstanding indebtedness, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes.

    The 2022 Notes were issued pursuant to the Indenture dated as of December 19, 2017 (the “2017 Indenture”), between the Company and the Trustee, and a Supplemental Indenture, dated as of December 19, 2017 (the “Supplemental Indenture”), between the Company and the Trustee. The 2022 Notes will mature on December 30, 2022, unless repurchased or redeemed in accordance with their terms prior to such date. The 2022 Notes bear interest at a rate of 4.75% per year payable semi-annually on June 30 and December 30 of each year, commencing on June 30, 2018. The 2022 Notes will be general unsecured obligations of the Company that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2022 Notes. The 2022 Notes will rank equally in right of payment with all of the Company's existing and future senior liabilities that are not so subordinated, effectively junior to any of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and structurally junior to all existing and future indebtedness incurred by the Company's subsidiaries, financing vehicles, or similar facilities, including credit facilities entered into by the Company's wholly owned, special purpose financing subsidiaries.

    The 2017 Indenture contains certain covenants, including covenants requiring the Company to (i) comply with the asset coverage requirements of the 1940 Act, whether or not it is subject to those requirements, and (ii) provide financial information to the holders of the 2022 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the 2017 Indenture.

    In addition, if a change of control repurchase event, as defined in the 2017 Indenture, occurs prior to maturity, holders of the 2022 Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the 2022 Notes at a repurchase price equal to 100% of the principal amount of the 2022 Notes being repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

62

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

2023 Notes

    On May 11, 2018, the Company entered into a Purchase Agreement (the “2023 Notes Purchase Agreement”) with the Initial Purchaser relating to the Company’s sale of $60.0 million aggregate principal amount of its 5.38% fixed rate notes due 2023 (the “2023 Notes”) to the Initial Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, and for initial resale by the Initial Purchaser to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act and to institutional accredited investors under Rule 501 (a)(1), (2), (3), or (7) under the Securities Act. The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The 2023 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2023 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The 2023 Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The net proceeds from the sale of the 2023 Notes were approximately $58.7 million, after deducting an offering price discount of approximately $0.3 million, as well as Initial Purchaser’s discounts and commissions of approximately $0.6 million and estimated offering expenses of approximately $0.4 million, each payable by the Company. The Company used the net proceeds to repay outstanding indebtedness, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes. The 2023 Notes were issued pursuant to the 2017 Indenture between the Company and The Trustee, and a Second Supplemental Indenture, dated as of May 16, 2018, between the Company and the Trustee. The 2023 Notes will mature on May 30, 2023, unless repurchased or redeemed in accordance with their terms prior to such date. The 2023 Notes bear interest at a rate of 5.375% per year payable semi-annually on May 30 and November 30 of each year, commencing on November 30, 2018. The 2023 Notes will be general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2023 Notes. The 2023 Notes will rank equally in right of payment with all of the Company’s existing and future senior liabilities that are not so subordinated, effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and structurally junior to all existing and future indebtedness incurred by the Company’s subsidiaries, financing vehicles, or similar facilities, including credit facilities entered into by the Company’s wholly owned, special purpose financing subsidiaries. The 2017 Indenture contains certain covenants, including covenants requiring the Company to (i) comply with the asset coverage requirements of the 1940 Act, whether or not it is subject to those requirements, and (ii) provide financial information to the holders of the 2023 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the 2017 Indenture. In addition, if a change of control repurchase event, as defined in the 2017 Indenture, occurs prior to maturity, holders of the 2023 Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the 2023 Notes at a repurchase price equal to 100% of the principal amount of the 2023 Notes being repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

63

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

2024 Notes

    On December 3, 2019, the Company entered into a Purchase Agreement (the “2024 Notes Purchase Agreement”) with the Initial Purchaser relating to the Company’s sale of $100.0 million aggregate principal amount of its 4.85% fixed rate notes due 2024 (the “2024 Notes”) to the Initial Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, and for initial resale by the Initial Purchaser to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act and to institutional accredited investors under Rule 501 (a)(1), (2), (3), or (7) under the Securities Act. The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The 2024 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2024 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The 2024 Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The net proceeds from the sale of the 2024 Notes were approximately $98.4 million, after deducting the Initial Purchaser’s discounts and commissions of approximately $1.2 million and estimated offering expenses of approximately $0.4 million, each payable by the Company. The Company used the net proceeds to repay outstanding indebtedness, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes. The 2024 Notes were issued pursuant to the 2017 Indenture between the Company and The Trustee, and a Third Supplemental Indenture, dated as of December 5, 2019, between the Company and the Trustee. The 2024 Notes will mature on December 15, 2024, unless repurchased or redeemed in accordance with their terms prior to such date. The 2024 Notes bear interest at a rate of 4.85% per year payable semi-annually on June 15 and December 15 of each year, commencing on June 15, 2020. The 2024 Notes will be general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2024 Notes. The 2024 Notes will rank equally in right of payment with all of the Company’s existing and future senior liabilities that are not so subordinated, effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and structurally junior to all existing and future indebtedness incurred by the Company’s subsidiaries, financing vehicles, or similar facilities, including credit facilities entered into by the Company’s wholly owned, special purpose financing subsidiaries. The 2017 Indenture contains certain covenants, including covenants requiring the Company to (i) comply with the asset coverage requirements of the 1940 Act, whether or not it is subject to those requirements, and (ii) provide financial information to the holders of the 2024 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the 2017 Indenture. In addition, if a change of control repurchase event, as defined in the 2017 Indenture, occurs prior to maturity, holders of the 2024 Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the 2024 Notes at a repurchase price equal to 100% of the principal amount of the 2024 Notes being repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

2026 Notes

On March 24, 2021, the Company entered into a Purchase Agreement (the “2026 Notes Purchase Agreement”) with the initial purchaser listed therein relating to the Company’s sale of $300.0 million aggregate principal amount of its 3.25% fixed rate notes due 2026 (the “Restricted 2026 Notes”) to the Initial Purchaser in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, and for initial resale by the Initial Purchaser to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act and to certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The Company relied upon these exemptions from registration based in part on representations made by the Initial Purchaser. The 2026 Notes Purchase Agreement also includes customary representations, warranties, and covenants by the Company. Under the terms of the 2026 Notes Purchase Agreement, the Company has agreed to indemnify the Initial Purchaser against certain liabilities under the Securities Act. The Restricted 2026 Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The net proceeds from the sale of the 2026 Notes were approximately $296.0 million, after deducting the Initial Purchaser’s discounts and commissions and estimated offering expenses. The Company used the net proceeds to repay outstanding indebtedness, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes. The Restricted 2026 Notes were issued pursuant to the Indenture dated as of March 29, 2021 (the “2021 Indenture”), between the Company and the Trustee, and a Supplemental Indenture, dated as of March 29, 2021 (the “First Supplemental Indenture”), between the Company and the Trustee. The 2026 Notes (as defined below) will mature on March 30, 2026, unless repurchased or redeemed in accordance with their terms prior to such date. The 2026 Notes bear interest at a rate of 3.25% per year payable semi-annually on March 30 and September 30 of

64

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

each year, commencing on September 30, 2021. The 2026 Notes will be general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2026 Notes. The 2026 Notes will rank equally in right of payment with all of the Company’s existing and future senior liabilities that are not so subordinated, effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and structurally junior to all existing and future indebtedness incurred by the Company’s subsidiaries, financing vehicles, or similar facilities, including credit facilities entered into by the Company’s wholly owned, special purpose financing subsidiaries. The 2021 Indenture contains certain covenants, including covenants requiring the Company to (i) comply with the asset coverage requirements of the 1940 Act, whether or not it is subject to those requirements, and (ii) provide financial information to the holders of the 2026 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the 2021 Indenture. In addition, if a change of control repurchase event, as defined in the 2021 Indenture, occurs prior to maturity, holders of the 2026 Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the 2026 Notes at a repurchase price equal to 100% of the principal amount of the 2026 Notes being repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date. Pursuant to a Registration Statement on Form N-14 (File No. 333-257321), on September 22, 2021, the Company closed an exchange offer in which holders of the Restricted 2026 Notes were offered the opportunity to exchange their Restricted 2026 Notes for new registered notes with substantially identical terms (the “Unrestricted 2026 Notes” and, together with the Restricted 2026 Notes, the 2026 Notes), through which holders representing 99.88% of the outstanding principal of the then Restricted 2026 Notes obtained Unrestricted 2026 Notes.

    The weighted average annualized interest cost for all borrowings for the three months ended March 31, 2022 and 2021 was 3.41% and 3.50%, respectively. The average daily debt outstanding for the three months ended March 31, 2022 and 2021 was $1.3 billion, and 1.0 billion, respectively. The maximum debt outstanding for the three months ended March 31, 2022 and 2021 was $1.3 billion and 1.6 billion, respectively.

    The following table represents borrowings as of March 31, 2022:

						Maturity Date						Total Aggregate Borrowing Capacity						Total Principal Outstanding						Less Deferred Financing Costs						Amount per Consolidated Statements of Assets and Liabilities
Wells Fargo Credit Facility						8/28/2025						$	300,000					$	265,000					$	(5,199)					$	259,801
JPM Credit Facility						8/28/2023						400,000						342,100						(630)						341,470
2026 Notes						3/30/2026						300,000						296,881						(573)						296,308
2024 Notes						12/15/2024						100,000						99,354						(101)						99,253
2023 Notes						5/30/2023						60,000						59,924						(219)						59,705
2022 Notes						12/30/2022						150,000						149,877						(341)						149,536
Totals												$	1,310,000					$	1,213,136					$	(7,063)					$	1,206,073

65

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    The following table represents borrowings as of December 31, 2021:

						Maturity Date						Total Aggregate Borrowing Capacity						Total Principal Outstanding						Less Deferred Financing Costs						Amount per Consolidated Statements of Assets and Liabilities
Wells Fargo Credit Facility						8/28/2025						$	300,000					$	285,000					$	(5,575)					$	279,425
JPM Credit Facility						8/28/2023						400,000						391,100						(734)						390,366
MassMutual Credit Facility						12/31/2025						100,000						—						(1,807)						(1,807)
2026 Notes						3/30/2026						300,000						296,688						(607)						296,081
2024 Notes						12/15/2024						100,000						99,295						(110)						99,185
2023 Notes						5/30/2023						60,000						59,908						(266)						59,642
2022 Notes						12/30/2022						150,000						149,836						(454)						149,382
Totals												$	1,410,000					$	1,281,827					$	(9,553)					$	1,272,274

    The following table represents interest and debt fees for the three months ended March 31, 2022:

			Three months ended March 31, 2022
			Interest Rate						Non-Usage Rate						Interest Expense						Deferred Financing Costs (6)						Other Fees (7)
Wells Fargo Credit Facility			(1)						(2)						$	1,947					$	376					$	49
JPM Credit Facility			(3)						(4)						2,927						104						68
MassMutual Credit Facility			(5)						0.50%						—						38						26
2026 Notes			3.25%						n/a						2,630						35						—
2024 Notes			4.85%						n/a						1,271						9						—
2023 Notes			5.38%						n/a						822						47						—
2022 Notes			4.75%						n/a						1,822						113						—
Totals															$	11,419					$	722					$	143

______________

(1) From April 6, 2021 through March 31, 2022, the Wells Fargo Credit Facility had an interest rate priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread calculated based upon the composition of the loans in the collateral pool, which will not exceed 2.50% per annum.

(2) The non-usage fee per annum is 0.50% for the first 25% of the unused balance and up to 2.0% for the remaining unused balance.

(3) Interest rate is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread of 2.75% per annum.

(4) The non-usage fee per annum is 0.75% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance.

(5) Interest rate is priced at three-month LIBOR, with a LIBOR floor of 0.75%, plus a spread of 5.0% per annum.

(6) Amortization of deferred financing costs.

(7) Includes non-usage fees and custody fees.

66

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    The following table represents interest and debt fees for the three months ended March 31, 2021:

			Three months ended March 31, 2021
			Interest Rate						Non-Usage Rate						Interest Expense						Deferred Financing Costs (6)						Other Fees (7)
Wells Fargo Credit Facility			(1)						(2)						$	1,938					$	376					$	60
JPM Credit Facility			(3)						(4)						2,172						104						183
Citi Credit Facility (8)			L+1.60%						0.50%						277						49						48
MassMutual Credit Facility			(5)						0.50%						—						111						138
2026 Notes			3.25%						n/a						60						1						—
2024 Notes			4.85%						n/a						1,271						9						—
2023 Notes			5.38%						n/a						822						47						—
2022 Notes			4.75%						n/a						1,822						112						—
Totals															$	8,362					$	809					$	429

______________

(1) Prior to an amendment on July 7, 2020, the Wells Fargo Credit Facility had an interest rate priced at one-month LIBOR, with no LIBOR floor, plus a spread ranging between 1.65% and 2.50% per annum, depending on the composition of the portfolio of loans owned. From July 7, 2020 until August 28, 2020, the Wells Fargo Credit Facility had an interest rate priced at one-month LIBOR, with no LIBOR floor, plus a spread of 2.75% per annum. From August 28, 2020 through March 31, 2021, the Wells Fargo Credit Facility had an interest rate priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread calculated based upon the composition of the loans in the collateral pool, which will not exceed 2.75% per annum.

(2) The non-usage fee per annum is 0.50% for the first 25% of the unused balance and 2.0% for the portion of the unused balance that exceeds 25%.

(3) Interest rate is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread of 2.75% per annum.

(4) The non-usage fee per annum is 0.50% for the first 20% of the unused balance and 2.75% for the portion of the unused balance that exceeds 20%.

(5) Interest rate is priced at three-month LIBOR, with a LIBOR floor of 0.75%, plus a spread of 5.0% per annum.

(6) Amortization of deferred financing costs.

(7) Includes non-usage fees and custody fees.

(8) Amounts presented represent activity prior to the Citi Credit Agreement on January 20, 2021.

    The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate fair value. The fair value of short-term financial instruments such as cash and cash equivalents, due to affiliates, and accounts payable approximate their carrying value on the accompanying consolidated statements of assets and liabilities due to their short-term nature. The fair value of the Company's 2022 Notes, 2023 Notes, 2024 Notes, and 2026 Notes are derived from market indications provided by Bloomberg Finance L.P. at March 31, 2022 and December 31, 2021.

    At March 31, 2022, the carrying amount of the Company's secured borrowings approximated their fair value. The fair values of the Company's debt obligations are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Company's borrowings is estimated based upon market interest rates for the Company's own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. As of March 31, 2022 and December 31, 2021, the Company's borrowings would be deemed to be Level 3, as defined in Note 3 - Fair Value of Financial Instruments.

67

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    The fair values of the Company’s remaining financial instruments that are not reported at fair value on the accompanying consolidated statements of assets and liabilities are reported below:

			Level						Carrying Amount at March 31, 2022						Fair Value at March 31, 2022
Wells Fargo Credit Facility			3						$	265,000					$	265,000
JPM Credit Facility			3						342,100						342,100
2026 Notes			3						296,881						279,744
2024 Notes			3						99,354						100,466
2023 Notes			3						59,924						60,438
2022 Notes			3						149,877						150,299
									$	1,213,136					$	1,198,047

			Level						Carrying Amount at December 31, 2021						Fair Value at December 31, 2021
Wells Fargo Credit Facility			3						$	285,000					$	285,000
JPM Credit Facility			3						391,100						391,100
MassMutual Credit Facility			3						—						—
2026 Notes			3						296,688						300,243
2024 Notes			3						99,295						105,163
2023 Notes			3						59,908						62,113
2022 Notes			3						149,836						153,732
									$	1,281,827					$	1,297,351

Note 6 — Derivatives

Foreign Currency

    The Company may enter into forward foreign currency contracts from time to time to facilitate settlement of purchases and sales of investments denominated in foreign currencies or 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. A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date (usually the security transaction settlement date) at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract exchange rate and the current market rate as unrealized appreciation or depreciation. Realized gains or losses are recognized when contracts are settled. The Company's forward foreign currency contracts generally have terms of approximately three months. The volume of open contracts at the end of each reporting period is reflective of the typical volume of transactions during each calendar quarter. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contracts. The Company attempts to limit this risk by dealing with creditworthy counterparties.

    At March 31, 2022 and December 31, 2021, the forward foreign currency contracts were classified within Level 2 of the fair value hierarchy. The foreign currency forward contracts held as of March 31, 2022, and December 31, 2021 were subject to ISDA Master Agreements or similar agreements.

    The Company is operated by a person who has claimed an exclusion from the definition of the "commodity pool operator" under the Commodity Exchange Act, and, therefore, who is not subject to registration or regulation as a pool operator under such Act.

68

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Note 7 — Commitments and Contingencies

Commitments

    In the ordinary course of business, the Company may enter into future funding commitments. As of March 31, 2022, the Company had unfunded commitments on delayed draw term loans of $131.9 million, unfunded commitments on revolver term loans of $98.6 million, unfunded equity capital discretionary commitments of $11.1 million, and unfunded commitments on term loans of $0.7 million. As of December 31, 2021, the Company had unfunded commitments on delayed draw term loans of $163.6 million, unfunded commitments on revolver term loans of $102.9 million, unfunded equity capital discretionary commitments of $11.1 million, and unfunded commitments on term loans of $0.8 million. The Company maintains sufficient cash on hand and available borrowing capacity to fund such unfunded commitments.

69

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    As of March 31, 2022, the Company's unfunded commitments consisted of the following:

March 31, 2022

Portfolio Company Name

Investment Type

Commitment Type

Total Commitment

Remaining Commitment

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

$

3,603

$

880

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,264

1,264

Arch Global Precision, LLC

Senior Secured First Lien Debt

Revolver term loan

1,008

1,008

Arctic Holdco, LLC

Senior Secured First Lien Debt

Delayed draw term loan

1,295

1,295

Arctic Holdco, LLC

Senior Secured First Lien Debt

Revolver term loan

5,074

3,044

Armada Parent, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

4,517

4,517

Armada Parent, Inc.

Senior Secured First Lien Debt

Revolver term loan

5,420

4,968

Aventine Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

10,103

2,133

BCPE Oceandrive Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

11,417

11,417

BCPE Oceandrive Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

3,425

3,425

Capstone Logistics

Senior Secured First Lien Debt

Delayed draw term loan

2,942

1,818

Capstone Logistics

Senior Secured First Lien Debt

Revolver term loan

1,804

1,804

Chudy Group, LLC

Senior Secured First Lien Debt

Delayed draw term loan

3,442

3,442

Chudy Group, LLC

Senior Secured First Lien Debt

Revolver term loan

860

860

Cobblestone Intermediate Holdco, LLC

Senior Secured First Lien Debt

Delayed draw term loan

3,667

3,667

Communication Technology Intermediate, LLC

Senior Secured First Lien Debt

Revolver term loan

2,363

2,158

CRS-SPV, Inc.

Senior Secured First Lien Debt

Revolver term loan

224

162

Dynagrid Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

2,262

1,810

Encina Equipment Finance, LLC

Subordinated Debt

Delayed draw term loan

24,000

24,000

FGT Purchaser, LLC

Senior Secured First Lien Debt

Revolver term loan

2,144

1,308

Galway Borrower, LLC

Senior Secured First Lien Debt

Delayed draw term loan

3,977

3,618

Galway Borrower, LLC

Senior Secured First Lien Debt

Revolver term loan

1,894

1,894

Gogo Intermediate Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,053

1,053

Health Plan One, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,458

1,458

Higginbotham Insurance Agency, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

6,859

6,023

Hospice Care Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,775

238

ICR Operations, LLC

Senior Secured First Lien Debt

Revolver term loan

3,089

3,089

Ideal Tridon Holdings, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,810

2,810

IG Investments Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,390

1,112

Integrated Efficiency Solutions, Inc.

Senior Secured First Lien Debt

Revolver term loan

600

600

Knowledge Pro Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

5,061

5,061

Knowledge Pro Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,531

1,620

Manna Pro Products, LLC

Senior Secured First Lien Debt

Revolver term loan

2,706

1,624

McDonald Worley, P.C.

Senior Secured First Lien Debt

Term loan

12,887

664

Medical Management Resource Group, LLC

Senior Secured First Lien Debt

Delayed draw term loan

6,631

6,631

Medical Management Resource Group, LLC

Senior Secured First Lien Debt

Revolver term loan

1,326

1,326

Midwest Can Company, LLC

Senior Secured First Lien Debt

Revolver term loan

2,019

1,454

Miller Environmental Group, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

1,131

1,131

Miller Environmental Group, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,324

1,324

Mirra-Primeaccess Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

7,827

4,892

Muth Mirror Systems, LLC

Senior Secured First Lien Debt

Revolver term loan

1,299

1,299

Norvax, LLC

Senior Secured First Lien Debt

Revolver term loan

1,152

259

Odessa Technologies, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

2,676

2,676

Odessa Technologies, Inc.

Senior Secured First Lien Debt

Revolver term loan

3,747

3,747

ORG GC Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

584

584

Pie Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,840

1,227

Pluralsight, LLC

Senior Secured First Lien Debt

Revolver term loan

1,602

1,602

Point Broadband Acquisition, LLC

Senior Secured First Lien Debt

Delayed draw term loan

8,058

8,058

Premier Global Services, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,042

73

Prototek, LLC

Senior Secured First Lien Debt

Delayed draw term loan

2,257

2,257

70

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Portfolio Company Name						Investment Type						Commitment Type						Total Commitment						Remaining Commitment
Prototek, LLC						Senior Secured First Lien Debt						Revolver term loan						$	1,693					$	226
Questex, Inc.						Senior Secured First Lien Debt						Revolver term loan						2,584						1,550
Reddy Ice Corp.						Senior Secured First Lien Debt						Revolver term loan						1,762						1,762
Relativity Oda, LLC						Senior Secured First Lien Debt						Revolver term loan						464						464
REP TEC Intermediate Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,354						1,354
Roadsafe Holdings, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						5,762						4,888
RSC Acquisition, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						7,463						7,463
Saturn SHC Buyer Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						8,886						7,775
SCIH Salt Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,746						3,746
Sherlock Buyer Corp.						Senior Secured First Lien Debt						Delayed draw term loan						3,209						3,209
Sherlock Buyer Corp.						Senior Secured First Lien Debt						Revolver term loan						1,284						1,284
Simplifi Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,782						3,782
St. Croix Hospice Acquisition Corp.						Senior Secured First Lien Debt						Delayed draw term loan						5,639						5,639
St. Croix Hospice Acquisition Corp.						Senior Secured First Lien Debt						Revolver term loan						2,256						2,256
SunMed Group Holdings, LLC						Senior Secured First Lien Debt						Revolver term loan						601						505
Tap Rock Resources, LLC (1)						Equity/Other						Equity						29,470						11,114
Therapy Brands Holdings, LLC						Senior Secured First Lien Debt						Delayed draw term loan						889						889
Therapy Brands Holdings, LLC						Senior Secured Second Lien Debt						Delayed draw term loan						1,379						1,379
Trinity Air Consultants Holdings Corp.						Senior Secured First Lien Debt						Delayed draw term loan						6,974						4,483
Trinity Air Consultants Holdings Corp.						Senior Secured First Lien Debt						Revolver term loan						1,993						1,993
Triple Lift, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,300						3,300
University of St. Augustine Acquisition Corp.						Senior Secured First Lien Debt						Revolver term loan						2,615						2,615
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Delayed draw term loan						4,821						4,393
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Revolver term loan						1,167						1,167
US Salt Investors, LLC						Senior Secured First Lien Debt						Revolver term loan						2,169						2,169
Vensure Employer Services, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						1,773						1,773
Westwood Professional Services, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						3,023						2,016
Westwood Professional Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						378						378
WHCG Purchaser III, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						13,710						6,579
WHCG Purchaser III, Inc.						Senior Secured First Lien Debt						Revolver term loan						4,224						4,224
WIN Holdings III Corp.						Senior Secured First Lien Debt						Revolver term loan						4,448						3,558
Total																		$	317,257					$	242,317

_____________

(1) The commitment related to this investment is discretionary.

71

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    As of December 31, 2021, the Company's unfunded commitments consisted of the following:

December 31, 2021

Portfolio Company Name

Investment Type

Commitment Type

Total Commitment

Remaining Commitment

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

$

3,604

$

1,485

ADCS Clinics Intermediate Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,264

1,264

Arch Global Precision, LLC

Senior Secured First Lien Debt

Delayed draw term loan

2,380

164

Arch Global Precision, LLC

Senior Secured First Lien Debt

Revolver term loan

1,008

1,008

Arctic Holdco, LLC

Senior Secured First Lien Debt

Delayed draw term loan

10,632

3,694

Arctic Holdco, LLC

Senior Secured First Lien Debt

Revolver term loan

5,074

4,059

Armada Parent, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

4,517

4,517

Armada Parent, Inc.

Senior Secured First Lien Debt

Revolver term loan

5,420

4,968

Aventine Holdings, LLC

Senior Secured First Lien Debt

Delayed draw term loan

10,063

10,063

BCPE Oceandrive Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

11,417

11,417

BCPE Oceandrive Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

3,425

3,425

BCPE Oceandrive Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

3,425

3,425

Capstone Logistics

Senior Secured First Lien Debt

Delayed draw term loan

2,945

1,818

Capstone Logistics

Senior Secured First Lien Debt

Revolver term loan

1,804

1,526

Chudy Group, LLC

Senior Secured First Lien Debt

Delayed draw term loan

3,442

3,442

Chudy Group, LLC

Senior Secured First Lien Debt

Revolver term loan

860

860

Cobblestone Intermediate Holdco, LLC

Senior Secured First Lien Debt

Delayed draw term loan

7,015

5,899

Communication Technology Intermediate, LLC

Senior Secured First Lien Debt

Revolver term loan

2,363

2,363

CRS-SPV, Inc.

Senior Secured First Lien Debt

Revolver term loan

224

162

Dynagrid Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

2,262

1,583

Encina Equipment Finance, LLC

Subordinated Debt

Delayed draw term loan

24,000

24,000

FGT Purchaser, LLC

Senior Secured First Lien Debt

Revolver term loan

2,144

1,501

Galway Borrower, LLC

Senior Secured First Lien Debt

Delayed draw term loan

3,977

3,977

Galway Borrower, LLC

Senior Secured First Lien Debt

Revolver term loan

1,894

1,894

Gogo Intermediate Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,053

1,053

Health Plan One, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,458

1,458

Higginbotham Insurance Agency, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

10,113

6,022

Hospice Care Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,775

1,070

ICR Operations, LLC

Senior Secured First Lien Debt

Revolver term loan

6,178

3,089

Ideal Tridon Holdings, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,810

1,927

IG Investments Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

1,390

695

Integrated Efficiency Solutions, Inc.

Senior Secured First Lien Debt

Revolver term loan

600

469

Integrated Global Services, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,028

406

Knowledge Pro Buyer, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

5,061

5,061

Knowledge Pro Buyer, Inc.

Senior Secured First Lien Debt

Revolver term loan

2,531

1,924

Lakeview Health Holdings, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

514

100

Manna Pro Products, LLC

Senior Secured First Lien Debt

Revolver term loan

2,706

1,962

McDonald Worley, P.C.

Senior Secured First Lien Debt

Term loan

12,887

807

Medical Management Resource Group, LLC

Senior Secured First Lien Debt

Delayed draw term loan

6,631

6,631

Medical Management Resource Group, LLC

Senior Secured First Lien Debt

Revolver term loan

1,326

1,326

Midwest Can Company, LLC

Senior Secured First Lien Debt

Revolver term loan

2,019

1,454

Miller Environmental Group, Inc.

Senior Secured First Lien Debt

Delayed draw term loan

1,131

1,131

Miller Environmental Group, Inc.

Senior Secured First Lien Debt

Revolver term loan

1,324

1,324

Mintz Group, LLC

Senior Secured First Lien Debt

Delayed draw term loan

1,344

1,344

Mintz Group, LLC

Senior Secured First Lien Debt

Revolver term loan

630

630

Mirra-Primeaccess Holdings, LLC

Senior Secured First Lien Debt

Revolver term loan

7,827

7,827

Muth Mirror Systems, LLC

Senior Secured First Lien Debt

Revolver term loan

1,299

1,299

72

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Portfolio Company Name						Investment Type						Commitment Type						Total Commitment						Remaining Commitment
Norvax, LLC						Senior Secured First Lien Debt						Revolver term loan						$	1,152					$	259
Odessa Technologies, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						2,676						2,676
Odessa Technologies, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,747						3,747
Olaplex, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,908						1,908
ORG GC Holdings, LLC						Senior Secured First Lien Debt						Delayed draw term loan						584						584
Pie Buyer, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						6,129						4,658
Pie Buyer, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,840						1,840
Pluralsight, LLC						Senior Secured First Lien Debt						Revolver term loan						1,602						1,602
Point Broadband Acquisition, LLC						Senior Secured First Lien Debt						Delayed draw term loan						8,058						8,058
Premier Global Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,042						73
Prototek, LLC						Senior Secured First Lien Debt						Delayed draw term loan						2,257						2,257
Prototek, LLC						Senior Secured First Lien Debt						Revolver term loan						1,693						451
PT Network, LLC						Senior Secured First Lien Debt						Revolver term loan						1,316						921
Questex, Inc.						Senior Secured First Lien Debt						Revolver term loan						2,584						1,034
Reddy Ice Corp.						Senior Secured First Lien Debt						Delayed draw term loan						4,863						19
Reddy Ice Corp.						Senior Secured First Lien Debt						Revolver term loan						1,762						1,762
Refresh Parent Holdings, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						3,120						85
Refresh Parent Holdings, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						1,859						1,859
Refresh Parent Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,127						721
Relativity Oda, LLC						Senior Secured First Lien Debt						Revolver term loan						464						464
REP TEC Intermediate Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						1,354						1,354
Roadsafe Holdings, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						4,433						1,554
RSC Acquisition, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						9,236						7,943
Saturn SHC Buyer Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						8,886						5,554
SCIH Salt Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,746						2,716
Sherlock Buyer Corp.						Senior Secured First Lien Debt						Delayed draw term loan						3,209						3,209
Sherlock Buyer Corp.						Senior Secured First Lien Debt						Revolver term loan						1,284						1,284
Simplifi Holdings, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,782						3,782
St. Croix Hospice Acquisition Corp.						Senior Secured First Lien Debt						Delayed draw term loan						5,639						5,639
St. Croix Hospice Acquisition Corp.						Senior Secured First Lien Debt						Revolver term loan						2,256						2,256
SunMed Group Holdings, LLC						Senior Secured First Lien Debt						Revolver term loan						601						505
Tap Rock Resources, LLC (1)						Equity/Other						Equity						29,470						11,114
Therapy Brands Holdings, LLC						Senior Secured First Lien Debt						Delayed draw term loan						889						889
Therapy Brands Holdings, LLC						Senior Secured Second Lien Debt						Delayed draw term loan						1,379						1,379
Trinity Air Consultants Holdings Corp.						Senior Secured First Lien Debt						Delayed draw term loan						6,974						6,974
Trinity Air Consultants Holdings Corp.						Senior Secured First Lien Debt						Revolver term loan						1,993						399
Triple Lift, Inc.						Senior Secured First Lien Debt						Revolver term loan						3,300						3,300
University of St. Augustine Acquisition Corp.						Senior Secured First Lien Debt						Revolver term loan						2,615						2,615
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Delayed draw term loan						4,821						4,393
US Oral Surgery Management Holdco, LLC						Senior Secured First Lien Debt						Revolver term loan						1,167						1,167
US Salt Investors, LLC						Senior Secured First Lien Debt						Revolver term loan						2,169						2,169
Vensure Employer Services, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						2,384						2,384
Westwood Professional Services, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						3,023						2,016
Westwood Professional Services, Inc.						Senior Secured First Lien Debt						Revolver term loan						378						378
WHCG Purchaser III, Inc.						Senior Secured First Lien Debt						Delayed draw term loan						13,728						12,809
WHCG Purchaser III, Inc.						Senior Secured First Lien Debt						Revolver term loan						4,224						4,224
WIN Holdings III Corp.						Senior Secured First Lien Debt						Revolver term loan						4,448						3,892
Total																		$	367,965					$	278,399

_____________

73

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

(1) The commitment related to this investment is discretionary.

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims, and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.

Indemnifications

In the ordinary course of its business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management feels that the likelihood of such an event is remote.

Note 8 — Economic Dependency

    Under various agreements, the Company has engaged or will engage the Adviser and its affiliates to provide certain services that are essential to the Company, including asset management services, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issuance, as well as other administrative responsibilities for the Company including accounting services and investor relations.

    As a result of these relationships, the Company is dependent upon the Adviser and its affiliates. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.

Note 9 — Common Stock

    On August 25, 2011, the Company had raised sufficient funds to break escrow on its IPO. On July 1, 2014, the Company's registration statement on Form N-2 (File No. 333-193241) for its Follow-on was declared effective by the SEC. Simultaneously with the effectiveness of the registration statement of the Follow-on, the Company's IPO terminated. Through March 31, 2022, the Company issued 233.3 million shares of common stock for gross proceeds of $2.4 billion, including the shares purchased by an affiliate of BSP and shares issued under the Company's DRIP. Following the time the Company's updated registration statement was declared effective on June 30, 2015, the Company issued shares for subscription agreements that had been accepted through that date. The Company suspended the DRIP from March 29, 2020 through June 26, 2020. While the DRIP was suspended, participants and all other holders of the Company's common stock received distributions paid by the Company in cash. From inception of the Company's DRIP plan to March 31, 2022, the Company had repurchased 33.9 million shares of common stock through its share repurchase program for payments of $282.3 million. As of December 31, 2021, the Company had repurchased 30.8 million shares of common stock for payments of $259.2 million. Amounts include additional shares tendered for death and disability as permitted.

    On March 31, 2020, the Company issued in a private placement an aggregate amount of 9,532,062 newly issued shares of its common stock at a price of $5.77 per share for aggregate cash proceeds of $55.0 million. On April 30, 2020, the Company issued in a private placement an aggregate amount of 693,240 newly issued shares of its common stock at a price of $5.77 per share for aggregate cash proceeds of $4.0 million.

    

The following table reflects the common stock activity for the three months ended March 31, 2022:

						Shares						Value
Shares Sold						—						$	—
Shares Issued through DRIP						908,625						6,806
Share Repurchases						(3,091,177)						(23,065)
						(2,182,552)						$	(16,259)

74

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FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

The following table reflects the common stock activity for the year ended December 31, 2021:

						Shares						Value
Shares Sold						—						$	—
Shares Issued through DRIP						3,130,965						22,822
Share Repurchases						(2,910,936)						(19,532)
						220,029						$	3,290

    The following table reflects the stockholders' equity activity for the three months ended March 31, 2022:

			Common stock - shares						Common stock - par						Additional paid in capital						Total distributable earnings (loss)												Total Stockholders' Equity
Balance as of December 31, 2021			201,610,757						$	202					$	1,913,365					$	(404,075)											$	1,509,492
Net investment income			—						—						—						29,026												29,026
Net realized gain from investment transactions			—						—						—						3,444												3,444
Net change in unrealized appreciation on investments and foreign exchange currency contracts, net of change in deferred taxes			—						—						—						2,457												2,457
Repurchases			(3,091,177)						(3)						(23,062)						—												(23,065)
Distributions to stockholders			—						—						—						(29,778)												(29,778)
Reinvested dividends			908,625						—						6,806						—												6,806
Balance as of March 31, 2022			199,428,205						$	199					$	1,897,109					$	(398,926)											$	1,498,382

The following table reflects the stockholders' equity activity for the three months ended March 31, 2021:

			Common stock - shares						Common stock - par						Additional paid in capital						Total distributable earnings (loss)												Total Stockholders' Equity
Balance as of December 31, 2020			201,390,728						$	201					$	1,908,116					$	(508,562)											$	1,399,755
Net investment income			—						—						—						26,618												26,618
Net realized loss from investment transactions			—						—						—						(2,563)												(2,563)
Net change in unrealized appreciation on investments and foreign exchange currency contracts, net of change in deferred taxes			—						—						—						42,924												42,924
Repurchases			(2,801,712)						(3)						(18,796)						—												(18,799)
Distributions to stockholders			—						—						—						(19,757)												(19,757)
Reinvested dividends			658,852						1						4,578						—												4,579
Balance as of March 31, 2021			199,247,868						$	199					$	1,893,898					$	(461,340)											$	1,432,757

Note 10 — Share Repurchase Program

The Company intends to conduct annual tender offers pursuant to its share repurchase program (“SRP”). The Company’s Board of Directors considers the following factors in making its determination regarding whether to cause the Company to offer to repurchase shares and under what terms:

•the effect of such repurchases on the Company's qualification as a RIC (including the consequences of any necessary asset sales);

•the liquidity of the Company's assets (including fees and costs associated with disposing of assets);

•the Company's investment plans and working capital requirements;

•the relative economies of scale with respect to the Company's size;

75

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

•the Company's history in repurchasing shares or portions thereof;

•the condition of the securities markets.

    On June 26, 2020, the Company's Board of Directors amended the Company's SRP. The Company intends to conduct tender offers on an annual basis, instead of on a semi-annual basis as was done previously. The Company intends to continue to limit the number of shares to be repurchased in any calendar year to the lesser of (i) 10% of the weighted average number of shares outstanding in the prior calendar year or (ii) the number of shares of common stock the Company is able to repurchase with the proceeds received from the sale of shares of common stock under the DRIP during the relevant redemption period. In addition, in the event of a stockholder’s death or disability, the Company may, in its sole discretion, accept up to the full amount tendered by such stockholder of the current net asset value per share. Any repurchases of shares made in connection with a stockholder’s death or disability may be included within the overall limitation imposed on tender offers during the relevant redemption period, which provides that the Company may limit the number of shares to be repurchased during any redemption period to the number of shares of common stock the Company is able to repurchase with the proceeds received from the sale of shares of common stock under the DRIP during such redemption period. The Company's ten most recent tender offers were oversubscribed.

Offer Date						Repurchase Date						Shares Tendered						Shares Repurchased						Repurchase Price Per Share						Aggregate Consideration for Repurchased Shares (in thousands)
December 15, 2020						January 26, 2021						39,794,155						2,776,140						$	6.71					$	18,627.86
December 14, 2021						February 24, 2022						45,067,174						2,927,837						$	7.46					$	21,841.64

    Share amounts in the table above represent amounts filed in the tender offer.

Note 11 — Earnings Per Share

    Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company had no potentially dilutive securities as of March 31, 2022 and 2021.

    The following information sets forth the computation of the weighted average basic and diluted net increase in net assets per share resulting from operations for the three months ended March 31, 2022 and 2021.

			For the three months ended March 31,
			2022						2021
Basic and diluted
Net increase in net assets resulting from operations			$	34,927					$	66,979
Weighted average common shares outstanding			199,948,106						200,340,731
Net increase in net assets resulting from operations per share			$	0.17					$	0.33

76

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Note 12 — Distributions

    For the period from January 1, 2018 to March 29, 2020, the Company’s Board of Directors had authorized, and had declared, cash distributions payable on a monthly basis to stockholders of record at a distribution rate of $0.00178082 per day, which is equivalent to approximately $0.65 annually, per share of common stock, except for 2020 where the daily distribution rate was $0.00177596 per day to accurately reflect 2020 being a leap year. Effective April 21, 2020, the Board of Directors of the Company approved a transition in the timing of its distributions to holders of the Company's common stock from a monthly to a quarterly basis. On June 26, 2020, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable on July 6, 2020 to stockholders of record as of June 30, 2020. On September 25, 2020, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable on October 1, 2020 to stockholders of record as of September 30, 2020. On November 9, 2020, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable on January 4, 2021 to stockholders of record as of December 31, 2020. On March 11, 2021, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable on April 1, 2021 to stockholders of record as of March 31, 2021. On May 7, 2021, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable July 1, 2021 to stockholders of record as of June 30, 2021. On September 28, 2021, the Board declared a regular quarterly cash dividend of $0.13 per share and a special dividend of $0.02 per share of the Company's common stock, payable on October 1, 2021 to stockholders of record as of September 30, 2021. On November 9, 2021, the Board declared a regular quarterly cash dividend of $0.13 per share and a special dividend of $0.02 per share of the Company's common stock, payable on January 3, 2022 to stockholders of record as of December 31, 2021. On March 10, 2022, the Board declared a regular quarterly cash dividend of $0.13 per share and a special dividend of $0.02 per share of the Company's common stock, payable on April 5, 2022 to stockholders of record as of March 31, 2022.

The amount of each such distribution is subject to the discretion of the Board of Directors and applicable legal restrictions related to the payment of distributions. The Company calculates each stockholder’s specific distribution amount for the quarter using record and declaration dates. The distributions are payable by the fifth day following each record date.

    As of March 31, 2022 and December 31, 2021, the Company had accrued $23.0 million and $23.3 million, respectively, in stockholder distributions that were unpaid.

Note 13 — Income Tax Information and Distributions to Stockholders

    The Company has elected to be treated for federal income tax purposes as a RIC under the Code. Generally, a RIC is exempt from federal income taxes if it meets certain quarterly asset diversification requirements, annual income tests, and distributes to stockholders its ‘‘investment company taxable income,’’ as defined in the Code, each taxable year. Distributions declared prior to the filing of the previous year's tax return and paid up to one year after the previous tax year can be carried back to the prior tax year for determining the distributions paid in such tax year. The Company intends to make sufficient distributions to maintain its RIC status each year. The Company may also be subject to federal excise taxes of 4%.

    A RIC is limited in its ability to deduct expenses in excess of its “investment company taxable income” (which is, generally, ordinary income plus net realized short-term capital gains in excess of net realized long-term capital losses). If the Company's expenses in a given taxable year exceed gross taxable income (e.g., as the result of large amounts of equity-based compensation), it would incur a net operating loss for that year. However, a RIC is not permitted to carry forward net operating losses to subsequent taxable years and such net operating losses do not pass through to the RIC’s stockholders. In addition, deductible expenses can be used only to offset investment company taxable income, not net capital gain. A RIC may not use any net capital losses (that is, realized capital losses in excess of realized capital gains) to offset the RIC’s investment company taxable income, but may carry forward such net capital losses, and use them to offset capital gains indefinitely. Due to these limits on the deductibility of expenses and net capital losses, the Company may for tax purposes have aggregate taxable income for several taxable years that it is required to distribute and that is taxable to stockholders even if such taxable income is greater than the aggregate net income the Company actually earned during those taxable years. Such required distributions may be made from the Company cash assets or by liquidation of investments, if necessary. The Company may realize gains or losses from such liquidations. In the event the Company realizes net capital gains from such transactions, the Company may make a larger capital gain distribution than it would have made in the absence of such transactions.

77

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

    Depending on the level of taxable income earned in a tax year, for excise tax purposes the Company may choose to carry forward taxable income in excess of current year distributions into the next tax year and incur a 4% U.S. federal excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned.

    The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes (“ASC Topic 740”), nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company's 2021 tax year and 2020, 2019 and 2018 federal and state tax returns remain subject to examination by the Internal Revenue Service.

    As of March 31, 2022, the Company had a deferred tax asset of $2.0 million and a deferred tax liability of $(4.7) million. Given the losses generated by certain entities, deferred tax assets have been offset by valuation allowances of $2.0 million. As of December 31, 2021, the Company had a deferred tax asset of $2.0 million and a deferred tax liability of $(4.9) million. Given the losses generated by certain entities, deferred tax assets have been offset by valuation allowances of $2.0 million.

    The deferred tax asset valuation allowance has been determined pursuant to the provisions of ASC Topic 740, including the Company's estimation of future taxable income, if necessary, and is adequate to reduce the total deferred tax asset to an amount that will more likely than not be realized.

Note 14 — Financial Highlights

The following is a schedule of financial highlights for the three months ended March 31, 2022 and 2021:

			For the three months ended March 31,
			2022						2021
Per share data:
Net asset value, beginning of period			$	7.49					$	6.95
Results of operations (1)
Net investment income			0.15						0.13
Net realized and unrealized gain, net of change in deferred taxes			0.02						0.20
Net increase in net assets resulting from operations			0.17						0.33
Stockholder distributions (2)
Distributions from net investment (loss)			(0.15)						(0.10)
Net (decrease) in net assets resulting from stockholder distributions			(0.15)						(0.10)
Other (6)			—						0.01
Net asset value, end of period			$	7.51					$	7.19
Shares outstanding at end of period			199,428,205						199,247,868
Total return (3)			2.36		%				4.95		%
Ratio/Supplemental data:
Total net assets, end of period			$	1,498,382					$	1,432,757
Ratio of net investment income to average net assets (7)			9.30		%				9.06		%
Ratio of total expenses to average net assets (5) (7)			7.90		%				7.10		%
Portfolio turnover rate (4)			2.17		%				21.80		%

______________

(1)The per share data was derived by using the weighted average shares outstanding during the period.

(2)The per share data for distributions reflects the actual amount of distributions declared per share during the period.

(3)    Total return is calculated assuming a purchase of shares of common stock at the current net asset value on the first day and a sale at the current net asset value on the last day of the periods reported. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the DRIP.

78

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

(4)    Portfolio turnover rate is calculated using the lesser of year-to-date purchases or sales over the average of the invested assets at fair value.

(5)    Ratio of total expenses to average net assets is calculated using total operating expenses, including income tax expense over average net assets.

(6)    Represents the impact of calculating certain per share amounts based on weighted average shares outstanding during the period and certain per share amounts based on shares outstanding as of period end.

(7)    Ratios are annualized, except for incentive fees.

Note 15 – Schedules of Investments and Advances to Affiliates

    An affiliated company is generally a portfolio company in which FBLC owns 5% or more of its voting securities. A controlled affiliated company is generally a portfolio company in which FBLC owns more than 25% of its voting securities or has the power to exercise control over its management or policies (including through a management agreement.) Transactions related to investments in affiliated and controlled affiliated companies for the three months ended March 31, 2022 were as follows:

Portfolio Company (1)						Type of Asset						Industry						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2021						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at March 31, 2022
Control Investments
CRS-SPV, Inc. - L+4.50% (5.50%), 3/8/2023 (2) (6)						Senior Secured First Lien Debt						Industrials						$	1					$	62					$	—					$	—					$	—					$	—					$	62
CRS-SPV, Inc. (2) (3) (6)						Equity/Other						Industrials						—						1,266						—						—						—						132						1,398
Danish CRJ, Ltd. (2) (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Encina Equipment Finance, LLC (2) (6)						Equity/Other						Financials						1,788						81,693						—						—						—						—						81,693
Encina Equipment Finance, LLC - L+7.75% (9.00%), 12/31/2028 (2) (6)						Subordinated Debt						Financials						862						37,964						5						—						—						131						38,100
FBLC Senior Loan Fund, LLC (2) (4) (6)						Equity/Other						Diversified Investment Vehicles						6,015						304,934						—						—						—						—						304,934
Integrated Efficiency Solutions, Inc. - 7.50%, 12/31/2025 (2) (6)						Senior Secured First Lien Debt						Industrials						2						131						—						(131)						—						—						—
Integrated Efficiency Solutions, Inc. - 7.50%, 12/31/2025 (2) (6)						Senior Secured First Lien Debt						Industrials						27						1,436						—						(4)						—						—						1,432
Integrated Efficiency Solutions, Inc. - 10.00% PIK, 12/31/2026 (2) (6)						Senior Secured Second Lien Debt						Industrials						68						780						68						—						—						(49)						799
Kahala Ireland OpCo Designated Activity Company (2) (6)						Equity/Other						Transportation						6,266						23,732						—						—						—						(6,556)						17,176
Kahala Ireland OpCo Designated Activity Company (2) (3) (6)						Equity/Other						Transportation						—						3,250						—						—						—						—						3,250
Kahala US OpCo, LLC - 13.00% (2) (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Lakeview Health Holdings, Inc. - P+4.50% (8.00%) PIK, 10/15/2024 (2) (6)						Senior Secured First Lien Debt						Healthcare						30						584						30						—						—						(19)						595
Lakeview Health Holdings, Inc. - P+6.00% (9.50%) PIK, 10/15/2024 (2) (6)						Senior Secured First Lien Debt						Healthcare						11						414						111						—						—						—						525
Lakeview Health Holdings, Inc. (2) (3) (6)						Equity/Other						Healthcare						—						—						—						—						—						—						—
MGTF Holdco, LLC (2) (3) (6)						Equity/Other						Media/Entertainment						—						—						—						—						—						—						—
MGTF Radio Company, LLC - L+6.00% (7.00%), 4/1/2024 (2) (6)						Senior Secured First Lien Debt						Media/Entertainment						909						42,567						7						(1,125)						1						971						42,421

79

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Portfolio Company (1)						Type of Asset						Industry						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2021						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at March 31, 2022
ORG GC Holdings, LLC - L+6.50% (7.51%) PIK, 11/24/2026 (2) (6)						Senior Secured First Lien Debt						Business Services						156						8,343						156						—						—						—						8,499
ORG GC Holdings, LLC - 18.00% PIK, 11/24/2027 (2) (6)						Senior Secured Second Lien Debt						Business Services						$	155					$	3,439					$	155					$	—					$	—					$	—					$	3,594
ORG GC Holdings, LLC (2) (3) (6)						Equity/Other						Business Services						—						212						—						—						—						(212)						—
ORG GC Holdings, LLC (2) (3) (6)						Equity/Other						Business Services						—						—						—						—						—						—						—
Park Ave RE Holdings, LLC (2) (3) (6)						Equity/Other						Financials						—						4,461						—						(1,127)						—						3,425						6,759
Park Ave RE Holdings, LLC (2) (5) (6)						Subordinated Debt						Financials						31						1,537						—						(1,537)						—						—						—
Siena Capital Finance, LLC - 12.50%, 11/27/2026 (2) (6)						Subordinated Debt						Financials						2,405						75,000						1						(14,000)						—						(1)						61,000
Siena Capital Finance, LLC (2) (6)						Equity/Other						Financials						2,210						65,609						—						—						—						11,701						77,310
WPNT, LLC (2) (3) (6)						Equity/Other						Media/Entertainment						—						—						—						—						—						—						—
Total Control Investments																		$	20,936					$	657,414					$	533					$	(17,924)					$	1					$	9,523					$	649,547
Affiliate Investments
Answers Corp. (3) (6)						Equity/Other						Media/Entertainment						$	—					$	145					$	—					$	—					$	—					$	—					$	145
CDS U.S. Intermediate Holdings, Inc. - L+6.00% (7.00%), 11/24/2025						Senior Secured First Lien Debt						Media/Entertainment						101						5,565						4						—						—						(12)						5,557
CDS U.S. Intermediate Holdings, Inc. - L+8.00% (9.00%) 7.00% PIK, 11/24/2027						Senior Secured Second Lien Debt						Media/Entertainment						248						10,262						183						—						—						(33)						10,412
CDS U.S. Intermediate Holdings, Inc. (3)						Equity/Other						Media/Entertainment						—						5,442						—						—						—						252						5,694
CDS U.S. Intermediate Holdings, Inc. (3)						Equity/Other						Media/Entertainment						—						2,884						—						—						—						(699)						2,185
First Eagle Greenway Fund II, LLC						Equity/Other						Diversified Investment Vehicles						—						464						—						—						—						(15)						449
Foresight Energy Operating, LLC - L+8.00% (9.50%), 6/30/2027 (6)						Senior Secured First Lien Debt						Energy						26						1,102						—						(4)						—						—						1,098
Foresight Energy Operating, LLC (3) (6)						Equity/Other						Energy						—						3,965						—						—						—						—						3,965
Internap Corp. - L+6.50% (7.50%) 5.50% PIK, 5/8/2025 (6)						Senior Secured First Lien Debt						Business Services						119						5,475						89						—						—						(11)						5,553
Internap Corp (3) (6)						Equity/Other						Business Services						—						1,552						—						—						—						—						1,552
Jakks Pacific, Inc. (6)						Equity/Other						Consumer						9						785						9						—						—						7						801
Jakks Pacific, Inc. (3)						Equity/Other						Consumer						—						2,412						—						—						—						919						3,331
NewStar Arlington Senior Loan Program, LLC 14-1A FR - L+11.00% (11.26%), 4/25/2031 (6)						Collateralized Securities						Diversified Investment Vehicles						138						4,575						4						—						—						6						4,585
NewStar Arlington Senior Loan Program, LLC 14-1A SUB - 24.76%, 4/25/2031 (6)						Collateralized Securities						Diversified Investment Vehicles						901						17,114						—						(1,211)						—						468						16,371
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F - L+7.50% (7.75%), 1/20/2027 (6)						Collateralized Securities						Diversified Investment Vehicles						216						8,237						78						—						—						857						9,172
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB - 0.00%, 1/20/2027 (6)						Collateralized Securities						Diversified Investment Vehicles						—						—						—						—						—						—						—

80

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Portfolio Company (1)						Type of Asset						Industry						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2021						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at March 31, 2022
PennantPark Credit Opportunities Fund II, LP						Equity/Other						Diversified Investment Vehicles						—						4,953						—						(2,831)						—						(160)						1,962
Tap Rock Resources, LLC (6)						Equity/Other						Energy						306						8,742						—						(641)						—						366						8,467
Tax Defense Network, LLC - 10.00% PIK, 3/31/2023 (6)						Senior Secured First Lien Debt						Consumer						$	—					$	3,678					$	—					$	—					$	—					$	—					$	3,678
Tax Defense Network, LLC - L+6.00% (10.00%) PIK, 3/31/2023 (6)						Senior Secured First Lien Debt						Consumer						—						464						—						—						—						—						464
Tax Defense Network, LLC - L+6.00% (10.00%) PIK, 3/31/2023 (6)						Senior Secured First Lien Debt						Consumer						—						2,616						—						—						—						—						2,616
Tax Defense Network, LLC (3) (6)						Equity/Other						Consumer						—						—						—						—						—						—						—
Tax Defense Network, LLC (3) (6)						Equity/Other						Consumer						—						—						—						—						—						—						—
Team Waste, LLC (5) (6)						Equity/Other						Diversified Investment Vehicles						—						3,073						—						(2,681)						112						(504)						—
Tennenbaum Waterman Fund, LP						Equity/Other						Diversified Investment Vehicles						178						9,764						—						—						—						(184)						9,580
Vantage Mobility International, LLC - L+6.00% (7.00%) 4.50% PIK, 3/21/2024 (6)						Senior Secured First Lien Debt						Transportation						9						251						—						—						—						(160)						91
Vantage Mobility International, LLC - L+6.00% (7.00%) 4.50% PIK, 3/21/2024 (6)						Senior Secured First Lien Debt						Transportation						2						244						—						—						—						1						245
Vantage Mobility International, LLC - L+6.00% (7.00%) PIK, 3/21/2024 (6)						Senior Secured Second Lien Debt						Transportation						5						17						—						—						—						(17)						—
Vantage Mobility International, LLC - L+6.00% (7.00%) PIK, 3/21/2024 (6)						Senior Secured Second Lien Debt						Transportation						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Whitehorse, Ltd. 2014-1A E - L+4.55% (4.87%), 5/1/2026 (6)						Collateralized Securities						Diversified Investment Vehicles						107						7,171						11						—						—						(37)						7,145
Whitehorse, Ltd. 2014-1A Side Letter - 0.00%, 5/1/2026 (6)						Collateralized Securities						Diversified Investment Vehicles						—						—						—						—						—						—						—
Whitehorse, Ltd. 2014-1A SUB - 0.00%, 5/1/2026 (6)						Collateralized Securities						Diversified Investment Vehicles						—						—						—						—						—						—						—
Total Affiliate Investments																		$	2,365					$	110,952					$	378					$	(7,368)					$	112					$	1,044					$	105,118
Total Control & Affiliate Investments																		$	23,301					$	768,366					$	911					$	(25,292)					$	113					$	10,567					$	754,665

______________________________________________________

*     Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company into this category from a different category.

**     Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company out of this category into a different category.

(1)The principal amount and ownership detail are shown in the consolidated schedules of investments.

(2)This investment was not deemed significant under Regulation S-X as of March 31, 2022.

81

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

(3)Investment is non-income producing at March 31, 2022.

(4)FBLC and CCLF are the members of SLF, a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members make investments in SLF in the form of LLC equity interests as SLF makes investments, and all portfolio and other material decisions regarding SLF must be submitted to SLF’s board of directors which is comprised of an equal number of members appointed by each of FBLC and CCLF. Because management of SLF is shared equally between us and CCLF, we do not believe we control SLF for purposes of the 1940 Act or otherwise.

(5)Investment no longer held as of March 31, 2022.

(6)The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's Board of Directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).

(7)Gross of net change in deferred taxes in the amount of $0.2 million.

    Dividends and interest for the three months ended March 31, 2022 attributable to Controlled and Affiliated investments no longer held as of March 31, 2022 were $0.0 million.

    Realized gain for the three months ended March 31, 2022 attributable to Controlled and Affiliated investments no longer held as of March 31, 2022 was $0.1 million.

    Change in unrealized loss for the three months ended March 31, 2022 attributable to Controlled and Affiliated investments no longer held as of March 31, 2022 was $(0.5) million.

    The following table presents the Schedule of Investments and Advances to Affiliates as of December 31, 2021:

Portfolio Company (1)						Type of Asset						Industry						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2020						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at December 31, 2021
Control Investments
CRD Holdings, LLC - 9.00% (2) (5) (6)						Equity/Other						Energy						$	—					$	14,557					$	—					$	(13,174)					$	(597)					$	(786)					$	—
CRS-SPV, Inc. - L+4.50% (5.50%), 3/8/2022 (2) (6)						Senior Secured First Lien Debt						Industrials						3						62						—						—						—						—						62
CRS-SPV, Inc. (2) (3) (6)						Equity/Other						Industrials						—						1,393						—						—						—						(127)						1,266
Danish CRJ, Ltd. (2) (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Encina Equipment Finance, LLC - L+7.75% (9.00%), 12/31/2028 (2) (6)						Subordinated Debt						Financials						19						—						37,964						—						—						—						37,964
Encina Equipment Finance, LLC (2) (3) (6)						Equity/Other						Financials						—						—						81,693						—						—						—						81,693
FBLC Senior Loan Fund, LLC (2) (4) (6)						Equity/Other						Diversified Investment Vehicles						24,066						—						304,934						—						—						—						304,934
Integrated Efficiency Solutions, Inc. - 7.50%, 12/31/2025 (2) (6)						Senior Secured First Lien Debt						Industrials						—						—						131						—						—						—						131
Integrated Efficiency Solutions, Inc. - 7.50%, 12/31/2025 (2) (6)						Senior Secured First Lien Debt						Industrials						—						—						1,436						—						—						—						1,436
Integrated Efficiency Solutions, Inc. - 10.00% PIK, 12/31/2026 (2) (6)						Senior Secured Second Lien Debt						Industrials						1						—						780						—						—						—						780
Kahala Ireland OpCo Designated Activity Company - L+8.00% (13.00%), 12/22/2028 (2) (5) (6)						Senior Secured First Lien Debt						Transportation						950						18,549						—						(18,549)						—						—						—
Kahala Ireland OpCo Designated Activity Company (2) (6)						Equity/Other						Transportation						25,513						42,952						—						—						—						(19,220)						23,732
Kahala Ireland OpCo Designated Activity Company (2) (3) (6)						Equity/Other						Transportation						—						3,250						—						—						—						—						3,250
Kahala US OpCo, LLC - 13.00% (2) (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—

82

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Portfolio Company (1)						Type of Asset						Industry						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2020						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at December 31, 2021
KMTEX, LLC - P+3.00% (6.25%) PIK, 6/16/2025 (2) (5) (6)						Senior Secured First Lien Debt						Chemicals						$	16					$	218					$	468					$	(686)					$	—					$	—					$	—
KMTEX, LLC - P+3.00% (6.25%) PIK, 6/16/2025 (2) (5) (6)						Senior Secured First Lien Debt						Chemicals						92						3,230						102						(1,060)						(2,272)						—						—
KMTEX, LLC - P+3.00% (6.25%) PIK, 6/16/2025 (2) (5) (6)						Senior Secured First Lien Debt						Chemicals						26						829						26						(272)						(583)						—						—
KMTEX, LLC (2) (3) (5) (6)						Equity/Other						Chemicals						—						—						—						—						—						—						—
KMTEX, LLC (2) (3) (5) (6)						Equity/Other						Chemicals						—						2,289						—						—						(2,793)						504						—
Lakeview Health Holdings, Inc. - P+4.50% (7.75%) PIK, 10/15/2024 (2) (6)						Senior Secured First Lien Debt						Healthcare						26						—						600						—						—						(16)						584
Lakeview Health Holdings, Inc. - P+6.00% (9.25%), 10/15/2024 (2) (6)						Senior Secured First Lien Debt						Healthcare						28						—						414						—						—						—						414
MGTF Holdco, LLC (2) (3) (6)						Equity/Other						Media/Entertainment						—						—						—						—						—						—						—
MGTF Radio Company, LLC - L+6.00% (7.00%), 4/1/2024 (2) (6)						Senior Secured First Lien Debt						Media/Entertainment						3,854						43,400						32						(3,551)						6						2,680						42,567
NMFC Senior Loan Program I, LLC (2) (3) (5) (6)						Equity/Other						Diversified Investment Vehicles						496						—						—						—						—						—						—
ORG GC Holdings, LLC - L+6.50% (7.50%) PIK, 11/24/2026 (2) (6)						Senior Secured First Lien Debt						Business Services						57						—						8,343						—						—						—						8,343
ORG GC Holdings, LLC - 18.00% PIK, 11/24/2027 (2) (6)						Senior Secured Second Lien Debt						Business Services						56						—						3,439						—						—						—						3,439
ORG GC Holdings, LLC (2) (3) (6)						Equity/Other						Business Services						—						—						212						—						—						—						212
ORG GC Holdings, LLC (2) (3) (6)						Equity/Other						Business Services						—						—						—						—						—						—						—
Park Ave RE Holdings, LLC - 13.00%, 12/30/2022 (2) (6)						Subordinated Debt						Financials						1,784						37,237						—						(35,700)						—						—						1,537
Park Ave RE Holdings, LLC (2) (3) (6)						Equity/Other						Financials						—						3,300						—						(792)						—						1,953						4,461
Siena Capital Finance, LLC - 12.50%, 11/27/2026 (2) (6)						Subordinated Debt						Financials						5,340						25,500						74,502						(25,000)						—						(2)						75,000
Siena Capital Finance, LLC (2) (6)						Equity/Other						Financials						5,959						35,839						5,950						—						—						23,820						65,609
WPNT, LLC (2) (3) (6)						Equity/Other						Media/Entertainment						—						—						—						—						—						—						—
Total Control Investments																		$	68,286					$	232,605					$	521,026					$	(98,784)					$	(6,239)					$	8,806					$	657,414
Affiliate Investments
Answers Corp. (3) (6)						Equity/Other						Media/Entertainment						$	—					$	727					$	—					$	(718)					$	—					$	136					$	145
Capstone Nutrition Development, LLC (3) (5) (6)						Equity/Other						Consumer						—						5,928						—						(28,103)						23,635						(1,460)						—
CDS U.S. Intermediate Holdings, Inc. - L+6.00% (7.00%), 11/24/2025 (6)						Senior Secured First Lien Debt						Media/Entertainment						330						1,940						3,944						(374)						3						52						5,565
CDS U.S. Intermediate Holdings, Inc. - L+8.00% (9.00%) 7.00% PIK, 11/24/2027						Senior Secured Second Lien Debt						Media/Entertainment						756						1,104						13,866						(4,977)						278						(9)						10,262
CDS U.S. Intermediate Holdings, Inc. (3) (6)						Equity/Other						Media/Entertainment						—						1,224						—						—						—						4,218						5,442
CDS U.S. Intermediate Holdings, Inc. (3) (6)						Equity/Other						Media/Entertainment						—						437						—						—						—						2,447						2,884

83

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Portfolio Company (1)						Type of Asset						Industry						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2020						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at December 31, 2021
First Eagle Greenway Fund II, LLC						Equity/Other						Diversified Investment Vehicles						$	170					$	1,759					$	—					$	(1,279)					$	—					$	(16)					$	464
Foresight Energy Operating, LLC - L+8.00% (9.50%), 6/30/2027 (6)						Senior Secured First Lien Debt						Energy						119						1,354						—						(235)						—						(17)						1,102
Foresight Energy Operating, LLC (3) (6)						Equity/Other						Energy						—						2,520						—						—						—						1,445						3,965
Internap Corp. - L+6.50% (7.50%) 5.50% PIK, 5/8/2025 (6)						Senior Secured First Lien Debt						Business Services						466						5,181						338						—						—						(44)						5,475
Internap Corp (3) (6)						Equity/Other						Business Services						—						2,231						—						—						—						(679)						1,552
Jakks Pacific, Inc. - 10.50%, 2.50% PIK, 2/9/2023 (5) (6)						Senior Secured First Lien Debt						Consumer						1,217						17,104						1,552						(18,515)						866						(1,007)						—
Jakks Pacific, Inc. - 6.00%, 2.75% PIK, 8/31/2021 (5) (6)						Subordinated Debt						Consumer						80						—						1,495						(2,827)						1,332						—						—
Jakks Pacific, Inc. (3) (6)						Equity/Other						Consumer						81						402						83						—						—						300						785
Jakks Pacific, Inc. (3)						Equity/Other						Consumer						—						49						2,345						—						—						18						2,412
LendingHome Corp. - 8.00% (5) (6)						Equity/Other						Financials						—						59,823						—						(59,477)						(346)						—						—
MidOcean Credit CLO 2013-2A INC - 0.00%, 1/29/2030 (5) (6)						Collateralized Securities						Diversified Investment Vehicles						—						6,313						—						(10,152)						(5,677)						9,516						—
Mood Media - Common Equity (5) (6)						Equity/Other						Media/Entertainment						—						—						—						645						(645)						—						—
NewStar Arlington Senior Loan Program, LLC 14-1A FR - L+11.00% (11.12%), 4/25/2031 (6)						Collateralized Securities						Diversified Investment Vehicles						555						3,632						19						—						—						924						4,575
NewStar Arlington Senior Loan Program, LLC 14-1A SUB - 23.85%, 4/25/2031 (6)						Collateralized Securities						Diversified Investment Vehicles						3,906						15,631						—						(3,821)						—						5,304						17,114
Newstar Fairfield Fund CLO, Ltd. 2015-1RA F - L+7.50% (7.63%), 1/20/2027 (6)						Collateralized Securities						Diversified Investment Vehicles						2,060						5,459						318						—						—						2,460						8,237
Newstar Fairfield Fund CLO, Ltd. 2015-1RA SUB - 0.00%, 1/20/2027 (6)						Collateralized Securities						Diversified Investment Vehicles						—						—						—						—						—						—						—
PCX Aerostructures, LLC - 6.00%, 8/9/2021 (5) (6)						Subordinated Debt						Industrials						2,829						9,859						645						(7,995)						634						(3,143)						—
PCX Aerostructures, LLC (5) (6)						Equity/Other						Industrials						—						76						—						(2,263)						2,263						(76)						—
PCX Aerostructures, LLC (5) (6)						Equity/Other						Industrials						—						535						—						(609)						609						(535)						—
PCX Aerostructures, LLC (5) (6)						Equity/Other						Industrials						—						—						—						(168)						168						—						—
PennantPark Credit Opportunities Fund II, LP						Equity/Other						Diversified Investment Vehicles						726						9,274						—						(4,197)						—						(124)						4,953
Tap Rock Resources, LLC (6)						Equity/Other						Energy						1,398						11,405						—						(3,484)						—						821						8,742
Tax Defense Network, LLC - 10.00% PIK, 3/31/2022 (6)						Senior Secured First Lien Debt						Consumer						—						3,311						—						—						—						367						3,678
Tax Defense Network, LLC - L+6.00% (10.00%) PIK, 3/31/2022 (6)						Senior Secured First Lien Debt						Consumer						—						420						—						—						—						44						464
Tax Defense Network, LLC - L+6.00% (10.00%) PIK, 3/31/2022 (6)						Senior Secured First Lien Debt						Consumer						—						2,368						—						—						—						248						2,616
Tax Defense Network, LLC (3) (6)						Equity/Other						Consumer						—						—						—						—						—						—						—
Tax Defense Network, LLC (3) (6)						Equity/Other						Consumer						—						—						—						—						—						—						—
Team Waste, LLC (3) (6)						Equity/Other						Industrials						—						2,570						—						—						—						503						3,073

84

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

Portfolio Company (1)						Type of Asset						Industry						Amount of dividends and interest included in income						Beginning Fair Value at December 31, 2020						Gross additions*						Gross reductions**						Realized Gain/(Loss)						Change in Unrealized Gain (Loss) (7)						Fair Value at December 31, 2021
Tennenbaum Waterman Fund, LP						Equity/Other						Diversified Investment Vehicles						$	1,062					$	10,087					$	—					$	—					$	—					$	(323)					$	9,764
TwentyEighty, Inc. (3) (5) (6)						Equity/Other						Business Services						—						—						—						(35)						35						—						—
Vantage Mobility International, LLC - L+6.00% (7.00%), 3/21/2024 (6)						Senior Secured First Lien Debt						Transportation						8						—						251						—						—						—						251
Vantage Mobility International, LLC - L+6.00% (7.00%), 3/21/2024 (6)						Senior Secured First Lien Debt						Transportation						2						—						244						—						—						—						244
Vantage Mobility International, LLC - L+6.00% (7.00%), 3/21/2024 (6)						Senior Secured Second Lien Debt						Transportation						—						—						17						—						—						—						17
Vantage Mobility International, LLC - L+6.00% (7.00%) PIK, 3/21/2024 (6)						Senior Secured Second Lien Debt						Transportation						—						944						—						—						—						(944)						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Vantage Mobility International, LLC (3) (6)						Equity/Other						Transportation						—						—						—						—						—						—						—
Whitehorse, Ltd. 2014-1A E - L+4.55% (4.68%), 5/1/2026 (6)						Collateralized Securities						Diversified Investment Vehicles						426						5,592						45						—						—						1,534						7,171
Whitehorse, Ltd. 2014-1A Side Letter - 0.00%, 5/1/2026 (6)						Collateralized Securities						Diversified Investment Vehicles						—						—						—						—						—						—						—
Whitehorse, Ltd. 2014-1A SUB - 0.00%, 5/1/2026 (6)						Collateralized Securities						Diversified Investment Vehicles						—						—						—						—						—						—						—
Total Affiliate Investments																		$	16,191					$	189,259					$	25,162					$	(148,584)					$	23,155					$	21,960					$	110,952
Total Control & Affiliate Investments																		$	84,477					$	421,864					$	546,188					$	(247,368)					$	16,916					$	30,766					$	768,366

_____________________________________________________

*     Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company into this category from a different category.

**     Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities, and the movement of an existing portfolio company out of this category into a different category.

(1)The principal amount and ownership detail are shown in the consolidated schedules of investments.

(2)This investment was not deemed significant under Regulation S-X as of December 31, 2021.

(3)Investment is non-income producing at December 31, 2021.

(4)FBLC and CCLF are the members of SLF, a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members make investments in SLF in the form of LLC equity interests as SLF makes investments, and all portfolio and other material decisions regarding SLF must be submitted to SLF’s board of directors which is comprised of an equal number of members appointed by each of FBLC and CCLF. Because management of SLF is shared equally between us and CCLF, we do not believe we control SLF for purposes of the 1940 Act or otherwise.

(5)Investment no longer held as of December 31, 2021.

(6)The fair value of investments with respect to securities for which market quotations are not readily available is determined in good faith by the Company's Board of Directors as required by the 1940 Act. Such investments are valued using significant unobservable inputs (See Note 3 to the consolidated financial statements).

85

---

FRANKLIN BSP LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For the period ended March 31, 2022

(Unaudited)

(7)Gross of net change in deferred taxes in the amount of $(4.1) million.

    Dividends and interest for the year ended December 31, 2021 attributable to Controlled and Affiliated investments no longer held as of December 31, 2021 were $5.7 million.

    Realized loss for the year ended December 31, 2021 attributable to Controlled and Affiliated investments no longer held as of December 31, 2021 was $16.6 million.

    Change in unrealized gain for the year ended December 31, 2021 attributable to Controlled and Affiliated investments no longer held as of December 31, 2021 was $3.0 million.

Note 16 – Subsequent Events

Purchase Agreements and Subscription Agreements

On April 1, 2022, April 12, 2022 and May 13, 2022, we entered into stock purchase agreements with certain investors (collectively, the "Purchase Agreements") and associated subscription agreements (collectively, the "Subscription Agreements"), totaling $234.8 million, for the sale of our common stock at the net asset value of each drawdown date. Investors are required to make capital contributions to purchase our common stock each time we deliver a drawdown notice in an aggregate amount not to exceed their respective capital commitments. All purchases will generally be made subject to the terms and conditions set forth in the Purchase Agreements and Subscription Agreements, at a per-share price as determined by our Board, which price will be determined prior to the issuance of our common stock and in accordance with the limitations under Section 23 of the 1940 Act. As of the date of this filing, the Company has called $41.5 million of capital commitments, the proceeds of which were used to pay down outstanding borrowings.

86

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Franklin BSP Lending Corporation (the "Company," "FBLC," "we," or "our") and the notes thereto and other financial information included elsewhere in this Quarterly Report on Form 10-Q. We are externally managed by our adviser, Franklin BSP Lending Adviser, L.L.C. (the “Adviser”).

Forward Looking Statements

This report, and other statements that we may make, may contain forward-looking statements with respect to future financial or business performance, strategies, or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions.

Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and we assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to factors previously disclosed in our U.S. Securities and Exchange Commission (“SEC”) reports and those identified elsewhere in this report, including the “Risk Factors” section, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

•our future operating results;

•the impact of the COVID-19 pandemic on our business and our portfolio companies, including our and their ability to access capital and liquidity;

•changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including the effect of the current COVID-19 pandemic and recent supply chain disruptions;

•the impact of geopolitical conditions, including revolution, insurgency, terrorism or war, including those arising out of the ongoing conflict between Russia and Ukraine;

•the impact that the discontinuation of LIBOR and the transition to new reference rates could have on the value of our LIBOR-indexed portfolio investments and the cost of borrowing under our credit facilities;

•the impact of the investments that we expect to make;

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

•our contractual arrangements and relationships with third parties;

•our expected financings and investments;

•the adequacy of our cash resources and working capital;

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

•our repurchase of shares;

•actual and potential conflicts of interest with our Adviser and its affiliates;

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

•the ability to qualify and maintain our qualifications as a regulated investment company (“RIC”) and a business development company (“BDC”);

•the timing, form, and amount of any distributions;

•the impact of fluctuations in interest rates on our business;

•the valuation of any investments in portfolio companies, particularly those having no liquid trading market;

•the impact of changes to generally accepted accounting principles, and the impact to FBLC; and

•the impact of changes to tax legislation and, generally, our tax position.

Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Item 1A. Risk Factors” and elsewhere in this Quarterly Report.    

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Overview

    We are an externally managed, non-diversified closed-end management investment company incorporated in Maryland in May 2010 that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (“the 1940 Act”). In addition, we have elected to be treated for tax purposes as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Our investment activities are managed by the Adviser, a subsidiary of Benefit Street Partners L.L.C. (“BSP”) and supervised by our Board of Directors, a majority of whom are independent of the Adviser and its affiliates. As a BDC, we are required to comply with certain regulatory requirements.

    Our investment objective is to generate both current income and to a lesser extent long-term capital appreciation through debt and equity investments. We invest primarily in senior secured loans, and to a lesser extent, mezzanine loans, unsecured loans, and equity of predominantly private U.S. middle-market companies. We define middle market companies as those with annual revenues of less than $1 billion, although we may invest in larger or smaller companies. We may also purchase interests in loans or corporate bonds through secondary market transactions. We expect that each investment generally will range between approximately 0.5% and 3.0% of our total assets. As of March 31, 2022, 74.7% of our portfolio was invested in senior secured loans.

    Senior secured loans generally are senior debt instruments that rank ahead of subordinated debt and equity in priority of payments and are generally secured by liens on the operating assets of a borrower which may include inventory, receivables, plant, property, and equipment. Mezzanine debt is subordinated to senior loans and is generally unsecured. We may also invest in the equity and junior debt tranches of collateralized loan obligation investment vehicles (“Collateralized Securities” or “CLO's”). Effective April 1, 2022, we have elected to not invest, directly or indirectly, in coal-related companies, or invest in portfolio companies primarily engaged in directly investing in the exploration for, or the production of, coal at the discretion of the Adviser; provided, however, we shall be considered in compliance with this investment restriction if, from this date forward, we do not invest in any portfolio company that has a Global Industry Classification Standard designation of "coal and consumable fuels."

Financial and Operating Highlights

(Dollars in millions, except per share amounts)
At March 31, 2022:
			Investment Portfolio			$	2,713.5
			Net assets			1,498.4
			Debt (net of deferred financing costs)			1,206.1
			Net asset value per share			7.51
Portfolio Activity for the Three Months Ended March 31, 2022:
			Purchases during the period			59.7
			Sales, repayments, and other exits during the period			137.8
			Number of portfolio companies at end of period			150
Operating results for the Three Months Ended March 31, 2022:
			Net investment income per share			0.15
			Distributions declared per share			0.15
			Net increase in net assets resulting from operations per share			0.17
			Net investment income			29,026
			Net realized and unrealized gain, net of change in deferred taxes			2,996
			Net increase in net assets resulting from operations			34,927

Portfolio and Investment Activity

    During the three months ended March 31, 2022, we made $59.7 million of investments in new and existing portfolio companies and had $137.8 million in aggregate amount of sales and repayments, resulting in a decrease investments of $78.1 million for the period. The total portfolio of debt investments at fair value consisted of 91.8% bearing variable interest rates and 8.2% bearing fixed interest rates.

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    Our portfolio composition, based on fair value at March 31, 2022 was as follows:

			March 31, 2022
			Percentage of Total Portfolio						Weighted Average Current Yield for Total Portfolio (1)
Senior Secured First Lien Debt			65.8		%				7.6		%
Senior Secured Second Lien Debt			8.9						9.0
Subordinated Debt			3.8						12.3
Debt Subtotal			78.5						8.0
Collateralized Securities (2)			1.4						14.5
Equity/Other (3)			8.9						17.7
FBLC Senior Loan Fund, LLC (3)(4)			11.2						8.0
Total			100.0		%				9.0		%

______________

(1) Includes the effect of the amortization or accretion of loan premiums or discounts.

(2) Weighted average current yield for Collateralized Securities is based on the estimation of effective yield to expected maturity for each security as calculated in accordance with Accounting Standards Codification ("ASC") Topic 325-40-35, Beneficial Interests in Securitized Financial Assets (see Note 2 - Summary of Significant Accounting Policies).

(3) Weighted average current yield for Equity/Other may be based on actual or annualized income, where applicable.

(4) As of March 31, 2022, FBLC Senior Loan Fund, LLC holdings consisted of 92.7% senior secured debt. On a look-through basis to FBLC Senior Loan Fund, LLC, our portfolio is comprised of approximately 86.3% senior secured debt as of March 31, 2022.

    During the year ended December 31, 2021, we made $1,932.8 million of investments in new and existing portfolio companies and had $1,898.1 million in aggregate amount of sales and repayments, resulting in net investments of $78.1 million for the period. The total portfolio of debt investments at fair value consisted of 91.5% bearing variable interest rates and 8.5% bearing fixed interest rates.

    Our portfolio composition, based on fair value at December 31, 2021 was as follows:

			December 31, 2021
			Percentage of Total Portfolio						Weighted Average Current Yield for Total Portfolio (1)
Senior Secured First Lien Debt			65.9		%				7.6		%
Senior Secured Second Lien Debt			8.8						9.1
Subordinated Debt			4.2						11.0
Debt Subtotal			78.9						7.9
Collateralized Securities (2)			1.3						15.0
Equity/Other (3)			8.8						17.1
FBLC Senior Loan Fund, LLC (3)(4)			11.0						8.0
Total			100.0		%				8.8		%

______________

(1) Includes the effect of the amortization or accretion of loan premiums or discounts.

(2) Weighted average current yield for Collateralized Securities is based on the estimation of effective yield to expected maturity for each security as calculated in accordance with Accounting Standards Codification ("ASC") Topic 325-40-35, Beneficial Interests in Securitized Financial Assets (see Note 2 - Summary of Significant Accounting Policies).

(3) Weighted average current yield for Equity/Other may be based on actual or annualized income, where applicable.

(4) As of December 31, 2021, FBLC Senior Loan Fund, LLC holdings consisted of 92.7% senior secured debt. On a look-through basis to FBLC Senior Loan Fund, LLC, our portfolio is comprised of approximately 86.2% senior secured debt as of December 31, 2021.

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Portfolio Asset Quality

    Our Adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Adviser grades the credit risk of all debt investments on a scale of 1 to 5 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio debt investment relative to the inherent risk at the time the original debt investment was made (i.e., at the time of acquisition), although it may also take into account under certain circumstances the performance of the portfolio company's business, the collateral coverage of the investment and other relevant factors.

Loan Rating						Summary Description
1						Debt investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since the time of investment are favorable.
2						Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. All investments are initially rated a “2”.
3						Performing debt investment requiring closer monitoring. Trends and risk factors show some deterioration.
4						Underperforming debt investment. Some loss of interest or dividend expected, but still expecting a positive return on investment. Trends and risk factors are negative.
5						Underperforming debt investment with expected loss of interest and some principal.

    The weighted average risk rating of our investments based on fair value was 2.1 and 2.1 as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, we had five portfolio companies on non-accrual with a total amortized cost of $43.8 million and fair value of $9.7 million, which represented 1.6% and 0.4% of the investment portfolio's total amortized cost and fair value, respectively. As of December 31, 2021, we had six portfolio companies on non-accrual with a total amortized cost of $42.5 million and fair value of $12.2 million, which represented 1.5%, and 0.4% of the investment portfolio's total amortized cost and fair value, respectively. Refer to Note 2 - Summary of Significant Accounting Policies - in our consolidated financial statements included in this report for additional details regarding our non-accrual policy.

FBLC Senior Loan Fund, LLC

On January 20, 2021, FBLC and Cliffwater Corporate Lending Fund (“CCLF”) formed a joint venture, FBLC Senior Loan Fund, LLC (the “SLF”), that invests primarily in senior secured loans, and to a lesser extent may invest in mezzanine loans, unsecured loans and equity of predominantly private U.S. middle-market companies. SLF was formed as a Delaware limited liability company and is not consolidated by FBLC for financial reporting purposes. FBLC provides capital to SLF in the form of LLC equity interests. At formation, FBLC and CCLF owned 87.5% and 12.5%, respectively, of the LLC equity interests of SLF. As of March 31, 2022 and December 31, 2021, FBLC and CCLF owned 79.8% and 20.2%, respectively, of the LLC equity interests of SLF. Profit and loss are allocated based on each members' ownership percentage of the joint venture's net asset value. SLF has an Administrative and Loan Services Agreement with BSP, an affiliate of the Company, pursuant to which BSP provides certain operational and valuation services for SLF's investments; as well as certain agreements with third-party service providers. FBLC and CCLF each appoint two members to SLF's four-person board of members. All material decisions with respect to SLF, including those involving its investment portfolio, require unanimous approval of a quorum of the board of members. Quorum is defined as (i) the presence of two members of the board of members; provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of members; provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of members; provided that two individuals are present that were elected, designated or appointed by each member.

As part of the initial contribution to SLF, FBLC contributed $751.8 million of assets including $664.2 million of investments and $42.4 million of cash as well as $446.9 million worth of liabilities including the Citi Credit Facility (as defined in Note 5) debt of $344.4 million in exchange for $304.9 million of equity in SLF. As of March 31, 2022 and December 31, 2021, FBLC’s investment in SLF consisted of equity contributions of $304.9 million.

Below is a summary of SLF’s portfolio as of March 31, 2022 and December 31, 2021. A listing of the individual investments in SLF’s portfolio as of such dates can be found in “Note 3 – Fair Value of Investments” in the notes to the accompanying consolidated financial statements (dollars in thousands):

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						March 31, 2022						December 31, 2021
Total assets						$	1,153,042					$	1,195,960
Total investments (1)						$	1,064,763					$	1,088,337
Weighted Average Current Yield for Total Portfolio (2)						5.7		%				5.4		%
Number of Portfolio companies in SLF						176						172
Largest portfolio company investment (1)						$	20,365					$	27,965
Total of five largest portfolio company investments (1)						$	97,159					$	113,297

_____________________

(1) At fair value

(2) Includes the effect of the amortization or accretion of loan premiums or discounts.

Below is certain summarized financial information for SLF as of March 31, 2022 and December 31, 2021 and for the periods ended March 31, 2022 and March 31, 2021 (dollars in thousands):

Selected Statement of Assets and Liabilities Information			March 31,						December 31,
			2022						2021
			(Unaudited)
ASSETS
Investments, at fair value (amortized cost of $1,074,836 and $1,085,170, respectively)			$	1,064,763					$	1,088,337
Cash and other assets			88,279						107,623
Total assets			$	1,153,042					$	1,195,960
LIABILITIES
Revolving credit facilities (net of deferred financing costs of $2,243 and $2,488, respectively)			$	629,807					$	631,562
Secured borrowings			67,530						94,737
Other liabilities			67,439						71,008
Total liabilities			$	764,776					$	797,307
MEMBERS' CAPITAL
Total members' capital			$	388,266					$	398,653
Total liabilities and members' capital			$	1,153,042					$	1,195,960

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Selected Statements of Operations Information									For the three months ended March 31,						For the period January 20, 2021 through March 31,
									2022						2021
									(Unaudited)						(Unaudited)
Investment income:
Total investment income									$	14,429					$	8,452
Operating expenses:
Interest and credit facility financing expenses									3,368						1,594
Other expenses									634						283
Total expenses									4,002						1,877
Net investment income									10,427						6,575
Realized and unrealized gain:
Net realized and unrealized gain (loss)									(13,249)						3,478
Net increase (decrease) in net assets resulting from operations									$	(2,822)					$	10,053

RESULTS OF OPERATIONS

    Operating results for the three months ended March 31, 2022 and 2021 were as follows (dollars in thousands):

			For the three months ended March 31,
			2022						2021
Total investment income			$	63,776					$	56,434
Total expenses			32,771						29,116
Income tax expense, including excise tax			1,979						700
Net investment income			$	29,026					$	26,618

Investment Income

    For the three months ended March 31, 2022, total investment income was $63.8 million and was primarily attributable to interest income from investments in portfolio companies with an average portfolio fair value of $2.7 billion and a weighted average current yield of 9.0%. Included within total investment income was $2.0 million of fee income for the three months ended March 31, 2022. Fee income consists primarily of prepayment and amendment fees. For the three months ended March 31, 2021 total investment income was $56.4 million and was primarily attributable to interest income from investments in portfolio companies with an average portfolio fair value of $2.5 billion and a weighted average current yield of 8.8%. Included within total investment income was $1.0 million of fee income for the three months ended March 31, 2021. Fee income consists primarily of prepayment and amendment fees.

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Operating Expenses

    The composition of our operating expenses for the three months ended March 31, 2022 and 2021 was as follows (dollars in thousands):

			For the three months ended March 31,
			2022						2021
Management fees			$	10,503					$	9,574
Incentive fee on income			7,256						6,655
Interest and debt fees			12,284						9,600
Professional fees			853						1,279
Other general and administrative			1,407						1,601
Administrative services			195						181
Directors' fees			273						226
Total operating expenses			$	32,771					$	29,116

    For the three months ended March 31, 2022 and 2021, we incurred management fees of $10.5 million and $9.6 million, respectively. For the three months ended March 31, 2022 and 2021, we incurred incentive fees on income of $7.3 million and $6.7 million.

    For the three months ended March 31, 2022 and 2021, we incurred interest and debt fees of $12.3 million and $9.6 million, respectively. Interest and debt fees are comprised of interest expense, non-usage fees, trustee fees, amortization of deferred financing costs, and amortization of discount, if applicable, related to our revolving credit facilities and unsecured notes, each, as defined herein in the section entitled "Borrowings". The increase in interest and debt fees for the three months ended March 31, 2022 as compared to the same periods in 2021 is primarily the result of the timing of issuance of our 2026 Notes as well as an increase in total principal outstanding on our credit facilities.

Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments, Foreign Currency Transactions, and Forward Currency Exchange Contracts

    Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and foreign currency transactions, net of change in deferred taxes for the three months ended March 31, 2022 and 2021 were as follows (dollars in thousands):

			For the three months ended March 31,
			2022						2021
Net realized gain (loss)
Control investments			$	1					$	1
Affiliate investments			112						(307)
Non-affiliate investments			4,907						(443)
Net realized gain (loss) on foreign currency transactions			193						(528)
Net realized loss on extinguishment of debt			(1,769)						(1,286)
Total net realized gain (loss)			3,444						(2,563)
Net change in unrealized appreciation (depreciation) on investments
Control investments			9,523						(8,125)
Affiliate investments			1,044						21,111
Non-affiliate investments			(7,800)						29,645
Net change in deferred taxes			229						—
Total net change in unrealized appreciation on investments, net of change in deferred taxes			2,996						42,631
Net change in unrealized appreciation (depreciation) from forward currency exchange contracts			(539)						293
Net realized and unrealized gain			$	5,901					$	40,361

    Net realized and unrealized loss on investments and foreign currency transactions, net of change in deferred taxes, resulted in a net gain of $5.9 million for the three months ended March 31, 2022 compared to a net gain of $40.4 million, respectively, for the same period in 2021. We look at net realized gain (loss) and change in unrealized appreciation (depreciation) together, as movement in unrealized appreciation or depreciation can be the result of realizations.

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    The net realized and unrealized gain for the three months ended March 31, 2022 was primarily driven by realized and unrealized gains on Equity Investments.

The net realized and unrealized gain for the three months ended March 31, 2021 was primarily driven by unrealized gains on Senior Secured Investments and Equity Investments.

Changes in Net Assets from Operations

    For the three months ended March 31, 2022, we recorded a net increase in net assets resulting from operations of $34.9 million versus a net increase in net assets resulting from operations of $67.0 million for the three months ended March 31, 2021. The increase is primarily driven by an increase in realized and unrealized gain on our investments. Based on the weighted average shares of common stock outstanding for the three months ended March 31, 2022 and 2021, respectively, our per share net increase in net assets resulting from operations was $0.17 for the three months ended March 31, 2022, versus a net increase in net assets of $0.33 for the three months ended March 31, 2021.

Cash Flows

For the three months ended March 31, 2022, net cash provided by operating activities was $99.4 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The increase in cash flows provided by operating activities for the three months ended March 31, 2022 was primarily a result of sales and repayments of investments of $137.8 million, offset by purchases of investments of $59.7 million.

    Net cash used in financing activities of $114.1 million during the three months ended March 31, 2022 related to payments on debt of $89.0 million, stockholder distributions of $23.3 million and repurchases of common stock of $21.8 million, partially offset by proceeds from debt of $20.0 million.

    For the three months ended March 31, 2021, net cash used in operating activities was $82.8 million. The level of cash flows used in or provided by operating activities is affected by the timing of purchases, redemptions, and sales of portfolio investments. The increase in cash flows used in operating activities for the three months ended March 31, 2021 was primarily a result of purchases of investments of $221.1 million as well as payable for unsettled trades of $126.5 million, partially offset by sales and repayments of $206.3 million.

Net cash provided by financing activities of $90.2 million during the three months ended March 31, 2021 primarily related to proceeds from debt of $498.0 million, partially offset by payments on debt of $373.1 million.

Impact of COVID-19 Pandemic

    The COVID-19 pandemic has resulted in governments around the world implementing a broad suite of measures to help control the spread of the virus, including quarantines, travel restrictions and business curtailments and others. The emergence of COVID-19 has created economic and financial disruptions and disruptions in global supply chains that during the quarter adversely affected, and may continue to affect, our business, financial condition, liquidity and certain of our portfolio companies’ results of operations and liquidity. The extent to which the COVID-19 pandemic will continue to affect our business, financial condition, liquidity and certain of our portfolio companies’ results of operations and liquidity will depend on future developments, which are highly uncertain and cannot be predicted.

    Given the unprecedented nature of the COVID-19 exigency and the fiscal and monetary response designed to mitigate strain to businesses and the economy, the operating environment of certain of our portfolio companies is evolving rapidly. We have been in frequent communication with management, as well as the private equity sponsors, of our portfolio companies in order to understand the impact of the COVID-19 pandemic on their particular businesses and assess their ability to meet their obligations. As a result of the business disruptions affecting certain of our portfolio companies, we may be required to reduce the future amount of distributions to our stockholders. We continue to closely monitor our investment portfolio in order to be positioned to respond appropriately.

Recent Developments

Purchase Agreements and Subscription Agreements

On April 1, 2022, April 12, 2022 and May 13, 2022, we entered into stock purchase agreements with certain investors (collectively, the "Purchase Agreements") and associated subscription agreements (collectively, the "Subscription Agreements"), totaling $234.8 million, for the sale of our common stock at the net asset value of each drawdown date. Investors are required to make capital contributions to purchase our common stock each time we deliver a drawdown notice in an aggregate amount not to exceed their respective capital commitments. All purchases will generally be made subject to the terms and conditions set forth in the Purchase Agreements and Subscription Agreements, at a per-share price as determined by our Board, which price will be determined prior to the issuance of our common stock and in accordance with the limitations under Section 23 of the 1940 Act. As of the date of this filing, the Company has called $41.5 million of capital commitments, the proceeds of which were used to pay down outstanding borrowings.

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Liquidity and Capital Resources

    We generate cash flows from fees, interest, and dividends earned from our investments, as well as proceeds from sales of our investments and, previously, from the net proceeds of our Offering. As of March 31, 2022, we had issued 233.3 million shares of our common stock for gross proceeds of $2.4 billion, including the shares purchased by affiliates and shares issued pursuant to the DRIP. As of March 31, 2022, we had $610.0 million of senior unsecured notes outstanding. As of March 31, 2021, we had issued 230.0 million shares of our common stock for gross proceeds of $2.4 billion, including the shares purchased by affiliates and shares issued pursuant to the DRIP. As of March 31, 2021, we had $610.0 million of senior unsecured notes outstanding.

    Our principal demands for funds in both the short-term and long-term are for portfolio investments, for the payment of operating expenses, distributions to our investors, repurchases under our share repurchase program, and for the payment of principal and interest on our outstanding indebtedness. We may also from time to time enter into other agreements with third parties whereby third parties will contribute to specific investment opportunities. Other potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders, proceeds from private offerings, proceeds from the sale of investments, and undistributed funds from operations. However, our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets, and borrowing restrictions that may be imposed by lenders.

    We intend to conduct annual tender offers pursuant to our share repurchase program. Our Board of Directors will consider the following factors, among others, in making its determination regarding whether to cause us to offer to repurchase shares and under what terms:

•the effect of such repurchases on our qualification as a RIC (including the consequences of any necessary asset sales);

•the liquidity of our assets (including fees and costs associated with disposing of assets);

•our investment plans and working capital requirements;

•the relative economies of scale with respect to our size;

•our history in repurchasing shares or portions thereof; and

•the condition of the securities markets.

    We intend to conduct tender offers on an annual basis. We intend to continue to limit the number of shares to be repurchased in any calendar year to the lesser of (i) 10% of the weighted average number of shares outstanding in the prior calendar year or (ii) the number of shares of common stock the Company is able to repurchase with the proceeds received from the sale of shares of common stock under the DRIP during the relevant redemption period. In addition, in the event of a stockholder’s death or disability, any repurchases of shares made in connection with a stockholder’s death or disability may be included within the overall limitation imposed on tender offers during the relevant redemption period, which provides that we may limit the number of shares to be repurchased during any redemption period to the number of shares of common stock we are able to repurchase with the proceeds received from the sale of shares of common stock under the DRIP during such redemption period.

Distributions

    For the period from January 1, 2018 to March 29, 2020, the Company’s Board of Directors had authorized, and had declared, cash distributions payable on a monthly basis to stockholders of record at a distribution rate of $0.00178082 per day, which is equivalent to approximately $0.65 annually, per share of common stock, except for 2020 where the daily distribution rate was $0.00177596 per day to accurately reflect 2020 being a leap year. Effective April 21, 2020, the Board of Directors of the Company approved a transition in the timing of its distributions to holders of the Company's common stock from a monthly to a quarterly basis. On June 26, 2020, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable on July 6, 2020 to stockholders of record as of June 30, 2020. On September 25, 2020, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable on October 1, 2020 to stockholders of record as of September 30, 2020. On November 9, 2020, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable on January 4, 2021 to stockholders of record as of December 31, 2020. On March 11, 2021, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable on April 1, 2021 to stockholders of record as of March 31, 2021. On May 7, 2021, the Board declared a regular quarterly cash dividend of $0.10 per share of the Company's common stock, payable July 1, 2021 to stockholders of record as of June 30, 2021. On September 28, 2021, the Board declared a regular quarterly cash dividend of $0.13 per share and a special dividend of $0.02 per share of the Company's common stock, payable on October 1, 2021 to stockholders of record as of September 30, 2021. On November 9, 2021, the Board declared a regular quarterly cash dividend of $0.13 per share and a special dividend of $0.02 per share of the Company's common stock, payable on January 3, 2022 to stockholders of record as of December 31, 2021. On March 10, 2022, the Board declared a regular quarterly cash dividend of $0.13 per share and a special

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dividend of $0.02 per share of the Company's common stock, payable on April 5, 2022 to stockholders of record as of March 31, 2022.

The amount of each such distribution is subject to the discretion of the Board of Directors and applicable legal restrictions related to the payment of distributions. The Company calculates each stockholder’s specific distribution amount for the quarter using record and declaration dates. The distributions are payable by the fifth day following each record date.

    The table below shows the components of the distributions we have declared and/or paid during the three months ended March 31, 2022 and 2021 (dollars in thousands).

			For the three months ended March 31,
			2022						2021
Distributions declared			$	29,778					$	19,757
Distributions paid			$	30,059					$	19,965
Portion of distributions paid in cash			$	23,253					$	15,386
Portion of distributions paid in DRIP shares			$	6,806					$	4,579

    As of March 31, 2022, we had $23.0 million of distributions accrued and unpaid. As of December 31, 2021, we had $23.3 million of distributions accrued and unpaid.

    We may fund our cash distributions to stockholders from any sources of funds available to us, including offering proceeds, borrowings, net investment income from operations, capital gain proceeds from the sale of assets, and non-capital gain proceeds from the sale of assets. We have not established limits on the amount of funds we may use from available sources to make distributions. We may have distributions which could be characterized as a return of capital for tax purposes. During the three months ended March 31, 2022 and 2021, no portion of our distributions was characterized as return of capital for tax purposes. The specific tax characteristics of our distributions made in respect of our anticipated fiscal year ending December 31, 2022 will be reported to stockholders shortly after the end of the calendar year 2022 as well as in our periodic reports with the SEC. 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 gain. Moreover, you should understand that any such distributions were not based on our investment performance and can only be sustained if we achieve positive investment performance in future periods and/or our Adviser continues to make such reimbursements. There can be no assurance that we will achieve the performance necessary to sustain our distributions or that we will be able to pay distributions at all.

    The following table sets forth the distributions declared during the three months ended March 31, 2022 and 2021 (dollars in thousands):

			For the three months ended March 31,
			2022						2021
Distributions			$	29,778					$	19,757
Total distributions			$	29,778					$	19,757

Taxation as a RIC

    We have elected to be treated as a RIC under Subchapter M of the Code commencing with our tax year ended December 31, 2011 and intend to maintain our qualification as a RIC thereafter. As a RIC, we generally will not be subject to corporate-level U.S. federal income taxes on any income that we distribute as dividends for U.S. federal income tax purposes to our stockholders. To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, in order to maintain RIC tax treatment, we must distribute to our stockholders, for each tax year, an amount equal to at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gain over realized net long-term capital loss and determined without regard to any deduction for dividends paid, or the annual distribution requirement. Even if we qualify as a RIC, we generally will be subject to corporate-level U.S. federal income tax on our undistributed taxable income and could be subject to state, local, and foreign taxes.

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Additionally, in order to avoid the imposition of a U.S. federal excise tax, we are required to distribute, in respect of each calendar year, dividends to our stockholders of an amount at least equal to the sum of 98% of our calendar year net ordinary income (taking into account certain deferrals and elections); 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the one year period ending on October 31 of such calendar year; and any net ordinary income and capital gain net income for preceding calendar years that were not distributed during such calendar years and on which we previously did not incur any U.S. federal income tax. If we fail to qualify as a RIC for any reason and become subject to corporate tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. Such a failure would have a material adverse effect on us and our stockholders. In addition, we could be required to recognize unrealized gains, incur substantial taxes and interest and make substantial distributions in order to re-qualify as a RIC. We cannot assure stockholders that they will receive any distributions.

Related Party Transactions and Agreements

Investment Advisory Agreement

    We entered into an Investment Advisory Agreement as of February 1, 2019, under which the Adviser, subject to the overall supervision of our Board of Directors manages the day-to-day operations of, and provides investment advisory services to us. The Adviser and its affiliates also provide investment advisory services to other funds that have investment mandates that are similar, in whole and in part, with ours. The Adviser and its affiliates serve as investment adviser or sub-adviser to private funds and registered open-end funds, and serves as an investment adviser to a public real estate investment trust. The Adviser’s policies are designed to manage and mitigate the conflicts of interest associated with the allocation of investment opportunities. In addition, any affiliated fund currently formed or formed in the future and managed by the Adviser or its affiliates may have overlapping investment objectives with our own and, accordingly, may invest in asset classes similar to those targeted by us. However, in certain instances due to regulatory, tax, investment, or other restrictions, certain investment opportunities may not be appropriate for either us or other funds managed by the Adviser or its affiliates. The Board renewed the Investment Advisory Agreement on January 31, 2022.

    Prior to February 1, 2019, our Adviser provided investment advisory and management services under the Prior Investment Advisory Agreement, effective November 1, 2016, and most recently re-approved by the Board in August 2018. The terms of the Prior Investment Advisory Agreement were materially identical to the Investment Advisory Agreement. The Prior Investment Advisory Agreement automatically terminated upon the indirect change of control of the Adviser on the consummation of the FT Transaction.

Administration Agreement

    On November 1, 2016, we entered into the Administration Agreement with BSP, pursuant to which BSP provides us with office facilities and administrative services. The Administration Agreement may be terminated by either party without penalty upon not less than 60 days’ written notice to the other. For the three months ended March 31, 2022 and 2021, the Company incurred $0.3 million and $0.5 million respectively, in administrative service fees under the Administration Agreement.

Co-Investment Relief

    The 1940 Act generally prohibits BDCs from entering into negotiated co-investments with affiliates absent an order from the SEC permitting the BDC to do so. The SEC staff has granted us exemptive relief that allows it to enter into certain negotiated co-investment transactions alongside other funds managed by the Adviser or its affiliates (“Affiliated Funds”) in a manner consistent with our investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions (the “Order”). Pursuant to the Order, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our eligible directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.

Due To/From Affiliated Funds

Included within Prepaid and Other Assets on the Consolidated Statements of Assets and Liabilities as of March 31, 2022 and December 31, 2021 are $0.0 and $2.6 million, respectively of receivables from Affiliated Funds.

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Borrowings

We are only allowed to borrow money such that our asset coverage, which, as defined in the 1940 Act, measures the ratio of total assets less total liabilities not represented by senior securities to total borrowings, equals at least 200% after such borrowing, with certain limited exceptions. We are continually exploring additional forms of alternative debt financing which could include new or expanded credit facilities or the issuance of debt securities. We may use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our stockholders by reducing our overall cost of capital. We currently have credit facilities with Wells Fargo, JPM and MassMutual and have sold $610.0 million in aggregate principal of unsecured notes.

Wells Fargo Credit Facility

On July 24, 2012, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, Funding I, entered into a revolving credit facility with Wells Fargo and U.S. Bank as collateral agent, account bank, and collateral custodian (as amended from time to time, the "Existing Wells Fargo Credit Facility"). The Existing Wells Fargo Credit Facility was amended on July 7, 2020 (the "July 7th Amendment") to decrease the total aggregate principal amount of borrowings from $600.0 million on a committed basis to $575.0 million. Prior to the July 7th Amendment, the facility was priced at one-month LIBOR, with no LIBOR floor, plus a spread ranging between 1.65% and 2.50% per annum. After the July 7th Amendment, the Existing Wells Fargo Credit Facility was priced at one-month LIBOR, with no LIBOR floor, plus a spread of 2.75% per annum. Interest was payable quarterly in arrears. Funding I was subject to a non-usage fee to the extent the aggregate principal amount available under the Existing Wells Fargo Credit Facility has not been borrowed. The non-usage fee per annum was 0.50% for the first 25% of the unused balance and 2.0% for the portion of the unused balance that exceeds 25%, except for the period from March 15, 2019 through June 15, 2019, where the non-usage fee per annum was 0.50% on any principal amount unused.

On August 28, 2020, the Company refinanced the Existing Wells Fargo Credit Facility with (i) a $300.0 million revolving credit facility with the Company, as collateral manager, Funding I, as borrower, the lenders party thereto, Wells Fargo, as administrative agent, and U.S. Bank, as collateral agent and collateral custodian (the "New Wells Fargo Credit Facility," together with Existing Wells Fargo Credit Facility, "Wells Fargo Credit Facility") and (ii) the JPM Credit Facility (as defined below).

The New Wells Fargo Credit Facility provides for borrowings through August 28, 2023, and any amounts borrowed under the New Wells Fargo Credit Facility will mature on August 28, 2025. The New Wells Fargo Credit Facility is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread calculated based upon the composition of loans in the collateral pool, which will not exceed 2.75% per annum. Interest is payable quarterly in arrears. Funding I will be subject to a non-usage fee to the extent the commitments available under the New Wells Fargo Credit Facility have not been borrowed. The non-usage fee per annum is 0.50% for the first 25% of the unused balance and up to 2.0% for the remaining unused balance. Funding I paid a structuring fee and incurred other customary costs and expenses in connection with the New Wells Fargo Credit Facility. Pursuant to an amendment entered into on April 6, 2021, the commitment fee for any unused portion of the New Wells Fargo Credit Facility was temporarily reduced until September 30, 2021. Additionally, the maximum spread was reduced from 2.75% to 2.50% as a result of this amendment. The other terms of the New Wells Fargo Credit Facility were unchanged.

Funding I’s obligations under the New Wells Fargo Credit Facility are secured by a first priority security interest in substantially all of the assets of Funding I, including its portfolio of investments and the Company’s equity interest in Funding I. The obligations of Funding I under the New Wells Fargo Credit Facility are non-recourse to the Company.

In connection with the New Wells Fargo Credit Facility, the Company and Funding I have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The New Wells Fargo Credit Facility contains customary default provisions pursuant to which the administrative agent and the lenders under the New Wells Fargo Credit Facility may terminate the Company in its capacity as collateral manager/portfolio manager under the New Wells Fargo Credit Facility. Upon the occurrence of an event of default under the New Wells Fargo Credit Facility, the administrative agent or the lenders may declare the outstanding advances and all other obligations under the New Wells Fargo Credit Facility immediately due and payable.

JPM Credit Facility

On August 28, 2020, the Company, through a wholly-owned, consolidated special purpose financing subsidiary, 57th Street, entered into a $300.0 million revolving credit facility with JPMorgan Chase Bank, Nation Association, as administrative agent ("JPM"), and U.S. Bank, as collateral agent, collateral administrator and securities intermediary (the "JPM Credit Facility").

The JPM Credit Facility provides for borrowings through August 28, 2023, and any amounts borrowed under the JPM Credit Facility will mature on August 28, 2023 unless the administrative agent exercises its option to extend the maturity date to August 28, 2024. The JPM Credit Facility is priced at three-month LIBOR, with a LIBOR floor of zero, plus a spread of 2.75% per annum. Interest is payable quarterly in arrears. 57th Street will be subject to a non-usage fee to the extent the commitments

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available under the JPM Credit Facility have not been borrowed. The non-usage fee per annum is 0.50% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance until August 28, 2021, when the non-usage fee per annum is 0.75% for the first 20% of the unused balance and up to 2.75% for the remaining unused balance. 57th Street paid a structuring fee and incurred other customary costs and expenses in connection with the JPM Credit Facility. On January 21, 2021, the Company entered into an amendment (the “JPM Amendment”) to the JPM Credit Facility. The JPM Amendment, among other things, increases the amount that the Company is permitted to borrow under the JPM Credit Agreement from $300.0 million to $400.0 million. On April 12, 2021, the Company, through 57th Street, amended and restated the JPM Credit Facility. The amendment and restatement temporarily reduced the previous minimum funding amount until October 13, 2021. The other material terms of the JPM Credit Facility were unchanged.

57th Street’s obligations under the JPM Credit Facility are secured by a first priority security interest in substantially all of the assets of 57th Street, including its portfolio of investments and the Company’s equity interest in 57th Street. The obligations of 57th Street under the JPM Credit Facility are non-recourse to the Company.

In connection with the JPM Credit Facility, the Company and 57th Street have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The JPM Credit Facility contains customary default provisions pursuant to which the administrative agent and the lenders under the JPM Credit Facility may terminate the Company in its capacity as collateral manager/portfolio manager under the JPM Credit Facility. Upon the occurrence of an event of default under the JPM Credit Facility, the administrative agent or the lenders may declare the outstanding advances and all other obligations under the JPM Credit Facility immediately due and payable.

Citi Credit Facility

On June 27, 2014, the Company, through a wholly-owned, special purpose financing subsidiary, CB Funding, entered into a credit facility (as amended from time to time, the “Citi Credit Facility”) with Citibank, N.A. ("Citi") as administrative agent and U.S. Bank as collateral agent, account bank, and collateral custodian. From January 1, 2020 to January 20, 2021 the Citi Credit Facility provided for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, with a reinvestment period ending on May 31, 2021 and maturity date of May 31, 2022. On January 20, 2021, SLF, the Company's joint venture with CCLF entered into an amendment to the Citi Credit Facility (the “Citi Credit Agreement”). The amendment, among other things, (i) replaces the Company with SLF as the collateral manager under the Citi Credit Agreement, (ii) extends the end of the reinvestment period from May 31, 2021 to May 31, 2023 and (iii) extends the final maturity date from May 31, 2022 to May 31, 2024. As a result of this amendment to the Citi Credit Facility, the Company incurred a realized loss on extinguishment of debt of $1.3 million. In connection with the Citi Credit Facility, CB Funding has made certain representations and warranties, is required to comply with various covenants, reporting requirements, and other customary requirements for similar facilities and is subject to certain customary events of default. Upon the occurrence and during the continuation of an event of default, Citi may declare the outstanding advances and all other obligations under the Citi Credit Facility immediately due and payable. During the continuation of an event of default, CB Funding must pay interest at a default rate.

The Citi Credit Facility contains customary default provisions for facilities of this type pursuant to which Citi may terminate the rights, obligations, power, and authority of the Company, in its capacity as servicer of the portfolio assets under the Citi Credit Facility, including, but not limited to, non-performance of Citi Credit Facility obligations, insolvency, defaults of certain financial covenants, and other events with respect to the Company that may be adverse to Citi and the secured parties under the Citi Credit Facility.

The Citi Credit Facility is priced at three-month LIBOR plus a spread of 1.60% per annum through and including the last day of the investment period and 2.00% per annum thereafter. Interest is payable quarterly in arrears. CB Funding is subject to a non-usage fee to the extent the aggregate principal amount available under the Citi Credit Facility has not been borrowed. The non-usage fee per annum is 0.50%. Any amounts borrowed under the Citi Credit Facility along with any accrued and unpaid interest thereunder will mature, and will be due and payable, in three years.

MassMutual Credit Facility

On July 7, 2020, the Company and a wholly-owned, special purpose financing subsidiary of the Company, BDCA Asset Financing, LLC (“BDCA Asset Financing”), entered into a loan and servicing agreement (the “MassMutual Credit Facility”) with Massachusetts Mutual Life Insurance Company (“MassMutual”) as facility servicer and a lender and U.S. Bank National Association as collateral custodian, collateral administrator and administrative agent. The MassMutual Credit Facility provides for borrowings of up to $100.0 million on a committed basis, and, subject to satisfaction of certain conditions, contains an accordion feature whereby the Mass Mutual Credit Facility can be expanded to $150.0 million.

BDCA Asset Financing’s obligations under the MassMutual Credit Facility are secured by a first priority security interest in substantially all of the assets of BDCA Asset Financing, including its portfolio of investments and the Company’s equity interest in BDCA Asset Financing. The obligations of BDCA Asset Financing under the MassMutual Credit Facility are non-recourse to the Company.

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The MassMutual Credit Facility provides for borrowings through December 31, 2021 and matures on December 31, 2025. The MassMutual Credit Facility is priced at three-month LIBOR, with a LIBOR floor of 0.75%, plus a spread of 5.0% per annum. Interest is payable quarterly in arrears. BDCA Asset Financing will be subject to a non-usage fee of 0.50% to the extent the aggregate principal amount available under the MassMutual Credit Facility has not been borrowed. BDCA Asset Financing paid a structuring fee and incurred other customary costs and expenses in connection with the MassMutual Credit Facility.

In connection with the MassMutual Credit Facility, the Company and BDCA Asset Financing have made certain representations and warranties and are required to comply with various covenants and other customary requirements. The MassMutual Credit Facility contains customary default provisions pursuant to which MassMutual may terminate the Company in its capacity as portfolio asset servicer of the portfolio assets under the MassMutual Credit Facility. Upon the occurrence of an event of default, MassMutual may declare the outstanding advances and all other obligations under the MassMutual Credit Facility immediately due and payable.

Effective February 18, 2022, the Company terminated the Mass Mutual Credit Facility. As a result of this termination, the Company incurred a realized loss on extinguishment of debt of $1.8 million.

2022 Notes

    On December 14, 2017, the Company entered into a Purchase Agreement relating to the Company's sale of $150.0 million aggregate principal amount of its 4.75% fixed rate notes due December 30, 2022 (the “2022 Notes”). The 2022 Notes are subject to customary indemnification provisions and representations, warranties, and covenants. The net proceeds from the sale of the 2022 Notes were approximately $147.0 million. The 2022 Notes bear interest at a rate of 4.75% per year payable semi-annually.

2023 Notes

    On May 11, 2018, the Company entered into a Purchase Agreement relating to the Company's sale of $60.0 million aggregate principal amount of its 5.38% fixed rate notes due May 30, 2023 (the “2023 Notes”). The 2023 Notes are subject to customary indemnification provisions and representations, warranties, and covenants. The net proceeds from the sale of the 2023 Notes were approximately $58.7 million. The 2023 Notes bear interest at a rate of 5.375% per year payable semi-annually.

2024 Notes

    On December 3, 2019, the Company entered into a Purchase Agreement relating to the Company's sale of $100.0 million aggregate principal amount of its 4.85% fixed rate notes due December 15, 2024 (the “2024 Notes”). The 2024 Notes are subject to customary indemnification provisions and representations, warranties, and covenants. The net proceeds from the sale of the 2024 Notes were approximately $98.4 million. The 2024 Notes bear interest at a rate of 4.85% per year payable semi-annually.

2026 Notes

On March 24, 2021, the Company entered into a Purchase Agreement relating to the Company's sale of $300.0 million aggregate principal amount of its 3.25% fixed rate notes due March 30, 2026 (the “Restricted 2026 Notes”). The net proceeds from the sale of the Restricted 2026 Notes were approximately $296.0 million. Pursuant to a Registration Statement on Form N-14 (File No. 333-257321), on September 22, 2021, the Company closed an exchange offer in which holders of the Restricted 2026 Notes were offered the opportunity to exchange their Restricted 2026 Notes for new registered notes with substantially identical terms (the "Unrestricted 2026 Notes" and, together with the Restricted 2026 Notes, the 2026 Notes), through which holders representing 99.88% of the outstanding principal of the then Restricted 2026 Notes obtained Unrestricted 2026 Notes. The 2026 Notes are subject to customary indemnification provisions and representations, warranties and covenants. The 2026 Notes bear interest at a rate of 3.25% per year payable semi-annually.

See Note 5 to our consolidated financial statements contained in this Quarterly Report on Form 10-Q for a more detailed discussion of our borrowings.

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Contractual Obligations

    The following table shows our payment obligations for repayment of debt and other contractual obligations as of March 31, 2022 (dollars in thousands):

									Payment Due by Period
			Total						Less than 1 year						1 - 3 years						3- 5 years						More than 5 years
Wells Fargo Credit Facility (1)			$	265,000					$	—					$	—					$	265,000					$	—
JPM Credit Facility (2)			342,100						—						342,100						—						—
2026 Notes (3)			296,881						—						—						296,881						—
2024 Notes (4)			99,354						—						99,354						—						—
2023 Notes (5)			59,924						—						59,924						—						—
2022 Notes (6)			149,877						149,877						—						—						—
Total contractual obligations			$	1,213,136					$	149,877					$	501,378					$	561,881					$	—

______________

(1)As of March 31, 2022, we had $35.0 million of unused borrowing capacity under the Wells Fargo Credit Facility, subject to borrowing base limits.

(2)As of March 31, 2022, we had $57.9 million of unused borrowing capacity under the JPM Credit Facility, subject to borrowing base limits.

(3)As of March 31, 2022, we had no unused borrowing capacity under the 2026 Notes.

(4)As of March 31, 2022, we had no unused borrowing capacity under the 2024 Notes.

(5)As of March 31, 2022, we had no unused borrowing capacity under the 2023 Notes.

(6)As of March 31, 2022, we had no unused borrowing capacity under the 2022 Notes.

Off-Balance Sheet Arrangements

    We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Commitments

    In the ordinary course of business, we may enter into future funding commitments. As of March 31, 2022, the Company had unfunded commitments on delayed draw term loans of $131.9 million, unfunded commitments on revolver term loans of $98.6 million, unfunded equity capital discretionary commitments of $11.1 million, and unfunded commitments on term loans of $0.7 million. As of December 31, 2021, the Company had unfunded commitments on delayed draw term loans of $163.6 million, unfunded commitments on revolver term loans of $102.9 million, unfunded equity capital discretionary commitments of $11.1 million, and unfunded commitments on term loans of $0.8 million. Please refer to Note 7 - Commitments and Contingencies for further detail of these unfunded commitments. We maintain sufficient cash on hand and available borrowing capacity to fund such unfunded commitments.

Significant Accounting Estimates and Critical Accounting Policies

    Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

    While our significant accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies appearing elsewhere in this report, we believe the following accounting policies require the most significant judgment in the preparation of our consolidated financial statements.

Valuation of Portfolio Investments

    Portfolio investments are reported on the consolidated statements of assets and liabilities at fair value. On a quarterly basis we perform an analysis of each investment to determine fair value as follows:

    Securities for which market quotations are readily available on an exchange are valued at the reported closing price on the valuation date. We may also obtain quotes with respect to certain of our investments from pricing services or brokers or

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dealers in order to value assets. When doing so, we determine whether the quote obtained is readily available according to U.S. GAAP to determine the fair value of the security. If determined readily available, we use the quote obtained.

    Investments without a readily determined market value are primarily valued using a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: 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, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process.

    For an investment in an investment fund that does not have a readily determinable fair value, we measure the fair value of the investment predominately based on the net asset value per share of the investment fund if the net asset value of the investment fund is calculated in a manner consistent with the measurement principles of ASC 946, as of our measurement date.

    For investments in Collateralized Securities, both the assets and liabilities of each Collateralized Securities' capital structure are modeled. The model uses a waterfall engine to store the collateral data, generate collateral cash flows from the assets and distribute the cash flows to the liability structure based on the contractual priority of payments. The waterfall cash flows are discounted using rates that incorporate risk factors such as default risk, interest rate risk, downgrade risk, and credit spread risk, among others. In addition, broker quotations and/or comparable trade activity is considered as an input to determining fair value when available.

    As part of our quarterly valuation process the Adviser may be assisted by one or more independent valuation firms engaged by us. The Board of Directors determines the fair value of each investment, in good faith, based on the input of the Adviser and the independent valuation firm(s) (to the extent applicable).

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

•Each portfolio company or investment will be valued by the Adviser, potentially with assistance from one or more independent valuation firms engaged by our Board of Directors;

•The independent valuation firm(s), if involved, will conduct independent appraisals and make an independent assessment of the value of each investment; and

•The Board of Directors determines the fair value of each investment, in good faith, based on the input of the Adviser, independent valuation firm (to the extent applicable) and the audit committee of the Board of Directors.

    Because there is not a readily available market value for most of the investments in its portfolio, we value substantially all of our portfolio investments at fair value as determined in good faith by our Board of Directors, as described herein. 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 our investments may fluctuate from period to period. Additionally, the fair value of our 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 we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.

Revenue Recognition

Interest Income

    Investment transactions are accounted for on the trade date. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Discount and premium on investments purchased are accreted/amortized over the expected life of the respective investment using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discount and amortization of premium on investments.

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    The Company has a number of investments in Collateralized Securities. Interest income from investments in the “equity” class of these Collateralized Securities (in the Company's case, preferred shares, or subordinated notes) is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC 325-40-35, Beneficial Interests in Securitized Financial Assets ("ASC 325-40-35"). The Company monitors the expected cash inflows from its equity investments in Collateralized Securities, including the expected principal repayments. The effective yield is determined and updated quarterly. In accordance with ASC 325-40, investments in CLOs are periodically assessed for other-than-temporary impairment ("OTTI"). When the Company determines that a CLO has OTTI, the amortized cost basis of the CLO is written down as of the date of the determination based on events and information evaluated and that write-down is recognized as a realized loss.

Dividend Income

Dividend income on preferred equity investments is recorded 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 investments is recorded on the record date for private portfolio companies and on the ex-dividend date for publicly traded portfolio companies.

Dividend income from SLF is recorded on accrual basis once dividends are declared by SLF's board of directors. Distributions from SLF are evaluated at the time of distribution to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions as dividend income unless there are sufficient accumulated tax-basis earnings and profit in SLF prior to distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

Fee Income

    Fee income, such as structuring fees, origination, closing, amendment fees, commitment, and other upfront fees are generally non-recurring and are recognized as revenue when earned, either upfront or amortized into income. Upon the payment of a loan or debt security, any prepayment penalties and unamortized loan origination, structuring, closing, commitment, and other upfront fees are recorded as income.

Payment-in-Kind Interest/Dividends

    We may hold debt and equity investments in our portfolio that contain PIK interest and dividend provisions. PIK interest and PIK dividend, which represent contractually deferred interest or dividends that add to the investment balance that is generally due at maturity, are recorded on accrual basis to the extent such amounts are expected to be collected.

Non-accrual Income

    Investments are placed on non-accrual status when principal or interest/dividend payments are past due and/or when there is reasonable doubt that principal or interest will be collected. Accrued cash and un-capitalized PIK interest is generally reversed when an investment is placed on non-accrual status. Previously capitalized PIK interest is not reversed when an investment is placed on non-accrual status. Interest payments received on non-accrual investments may be recognized as income or applied to principal depending upon management's judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current.

Net Realized Gain or Loss and Net Change in Unrealized Appreciation or Depreciation

    Gain or loss on the sale of investments is calculated using the specific identification method. We measure realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when a gain or loss is realized.

    See Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements for a description of other accounting policies and recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

    The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars, and

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treasury lock agreements, subject to the requirements of the 1940 Act, in order to mitigate our interest rate risk with respect to various debt instruments. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. During the periods covered by this report, we did not engage in interest rate hedging activities. We would not hold or issue these derivative contracts for trading or speculative purposes.

    As of March 31, 2022, our debt included variable-rate debt, bearing a weighted average interest rate of LIBOR plus 2.59% and fixed rate debt, bearing a weighted average interest rate of 4.09% with a total carrying value (net of deferred financing costs) of $1,206.1 million. The following table quantifies the potential changes in interest income net of interest expense should base interest rates increase or decrease by the amounts below assuming that our current consolidated statement of assets and liabilities was to remain constant and no actions were taken to alter our existing interest rate sensitivity. Interest rate floors, if applicable, are not reflected in the sensitivity analysis below.

Change in Base Interest Rates						Estimated Change in Interest Income net of Interest Expense (in thousands)
(-) 96 Basis Points						$	(13,245)
(-) 50 Basis Points						$	(6,887)
(+) 50 Basis Points						$	6,887
(+) 100 Basis Points						$	13,775
(+) 200 Basis Points						$	27,550

    Because we may borrow money to make investments, our net investment income may be dependent on the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of increasing interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

Capital Markets Risk

    The prices of securities we hold may decline in response to certain events, including those directly involving the companies we invest in; conditions affecting the general economy; overall market changes; legislative reform; local, regional, national or global political, social or economic instability; and interest rate fluctuations. In addition, U.S. and global capital markets and credit markets have experienced a higher level of stress due to the global COVID-19 pandemic, which has resulted in an increase in the level of volatility across such markets and a general decline in value of the publicly-traded securities held by us.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were (a) designed to ensure that the information we are required to disclose in our reports under the Exchange Act is recorded, processed, and reported in an accurate manner and on a timely basis and the information that we are required to disclose in our Exchange Act reports is accumulated and communicated to management to permit timely decisions with respect to required disclosure and (b) operating in an effective manner.

Change in Internal Control Over Financial Reporting

No change occurred in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

    As of March 31, 2022, we were not defendants in any material pending legal proceeding, and no such material proceedings are known to be contemplated. However, from time to time, we may be party to certain legal proceedings incidental to the normal course of our business including the enforcement of our rights under the contracts with our portfolio companies. Third parties may also seek to impose liability on us in connection with the activities of our portfolio companies.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I., “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which could materially affect our business, financial condition, and/or operating results. The risks described below and in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

Because we borrow money, the potential for gain or loss on amounts invested in us will be magnified and may increase the risk of investing in us.

    As of March 31, 2022, we had approximately $1.2 billion of debt financing. The use of borrowings, also known as leverage, increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital. Because we use leverage to partially finance our investments, through borrowing from banks and other lenders, you will experience increased risks of investing in our common stock. If the value of our assets increases, leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause our net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net income to increase more than it would without the leverage, while any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make common stock distribution payments. Leverage is generally considered a speculative investment technique.

Illustration. The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing below. The calculation assumes (i) $2.8 billion in total assets, (ii) a weighted average cost of funds of 3.41%, (iii) $1.3 billion in debt outstanding (i.e., assumes that the $610.0 million principal amount of our unsecured notes sold and the full $700.0 million available to us under our revolving credit facilities is outstanding), and (iv) $1.5 billion in stockholders’ equity. In order to compute the “Corresponding return to stockholders,” the “Assumed Return on Our Portfolio (net of expenses)” is multiplied by the assumed total assets to obtain an assumed return to us. From this amount, the interest expense is calculated by multiplying the assumed weighted average cost of funds by the assumed debt outstanding, and the product is subtracted from the assumed return to us in order to determine the return available to stockholders. The return available to stockholders is then divided by our stockholders’ equity to determine the “Corresponding return to stockholders.” Actual interest payments may be different.

Assumed Return on Our Portfolio (net of expenses)						(10)%						(5)%						—%						5%						10%
Corresponding return to stockholders (1)						(21.97)%						(12.48)%						(2.98)%						6.51%						16.01%

___________________

(1) In order for us to cover our hypothetical annual interest payments on indebtedness, we would need to achieve annual returns on our March 31, 2022 total assets of at least 1.57%.

As of March 31, 2022, the Wells Fargo Credit Facility provided for borrowings in an aggregate principal amount of up to $300.0 million on a committed basis, due August 28, 2025; the JPM Credit Facility provided for borrowings in an aggregate principal amount of up to $400.0 million on a committed basis, due August 28, 2023; the 2022 Notes provided borrowings in an aggregate principal amount of $150.0 million, due December 30, 2022; the 2023 Notes provided borrowings in an aggregate principal amount of $60.0 million, due May 30, 2023; the 2024 Notes provided borrowings in an aggregate principal amount of $100.0 million, due December 15, 2024; and the 2026 Notes provided borrowings in an aggregate principal amount of $300.0 million, due March 30, 2026. See Item 7 in the Annual Report filed on Form 10-K for more information about these financing arrangements.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

Repurchases of our common stock pursuant to our tender offer are as follows:

Period						Total Number of Shares Purchased						Average Price per Share						Cumulative Number of Shares Purchased as Part of Publicly Announced Plans or Programs						Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
January 1, 2022 through January 31, 2022						—						—						—						—
February 1, 2022 through February 28, 2022						2,927,837						$	7.46					2,927,837						—
March 1, 2022 through March 31, 2022						—						—						—						—

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

    Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

    Not applicable.

ITEM 5. OTHER INFORMATION

    None.

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ITEM 6. EXHIBITS

    The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the three months ended March 31, 2022 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.			Description
3.1			Third Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed on August 10, 2017 and herein incorporated by reference).
3.2			Bylaws (previously filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed on August 10, 2017 and herein incorporated by reference).
10.1			Form of Purchase Agreement between the Company and investors (filed as Exhibit 1.1 to the Company's Current Report on Form 8-K filed on April 7, 2022 and herein incorporated by reference).
10.2			Form of Subscription Agreement between the Company and investors (filed as Exhibit 1.2 to the Company's Current Report on Form 8-K filed on April 7, 2022 and herein incorporated by reference).
31.1			Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2			Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32			Written statement of the Principal Executive Officer and Principal Financial Officer of the Company 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.

Signature

Title

Date

/s/ Richard J. Byrne Richard J. Byrne

Chief Executive Officer, President, and Chairman of the Board of Directors (Principal Executive Officer)

May 13, 2022

/s/ Nina Kang Baryski Nina Kang Baryski

Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

May 13, 2022

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Exhibit 31.1

I, Richard J. Byrne, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 of Franklin BSP Lending Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:			May 13, 2022			/s/ Richard J. Byrne
						Richard J. Byrne
						Chief Executive Officer, President, and Chairman of the Board of Directors (Principal Executive Officer)

Exhibit 31.2

 

I, Nina Kang Baryski, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 of Franklin BSP Lending Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:			May 13, 2022			/s/ Nina Kang Baryski
						Nina Kang Baryski Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

Exhibit 32

 

SECTION 1350 CERTIFICATIONS

 

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended.

 

The undersigned, who are the Principal Executive Officer and Principal Financial Officer of Franklin BSP Lending Corporation (the “Company”), each hereby certify as follows:

 

To the best of their knowledge, the Quarterly Report on Form 10-Q of the Company, which accompanies this Certificate, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in this quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated this 13th day of May 2022

 

/s/ Richard J. Byrne
Richard J. Byrne Chief Executive Officer, President, and Chairman of the Board of Directors (Principal Executive Officer)
/s/ Nina Kang Baryski
Nina Kang Baryski Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)