Monroe Capital Corporation

Fund Manager’s Report
As of November 2015

The Fund Manager’s Report will be presented quarterly and will be available
by the end of the month following a calendar quarter end.

Third Quarter 2015 Financial Highlights

* Net investment income of $4.5 million, or $0.36 per share
* Adjusted Net Investment Income (a non-GAAP measure described below) of
$4.4 million, or $0.36 per share, the fourth consecutive quarter of growth in this
metric
* Net increase in net assets resulting from operations of $4.7 million, or $0.38
per share
* Net asset value (“NAV”) of $179.9 million, or $14.21 per share
* Paid quarterly dividend of $0.35 per share on September 30, 2015

Chief Executive Officer Theodore L. Koenig commented, “We are pleased to report strong earnings for the third quarter of 2015, with net investment income of $0.36 per share, covering our dividend of $0.35 per share. This quarter represents our sixth consecutive quarter of dividend coverage, even after raising our dividend to $0.35 per quarter in the first quarter of this year and after raising new capital in a secondary offering during the second quarter. We are pleased to be able to continue to provide our stockholders consistent, strong quarterly results and a stable book value in what has been a challenging market environment for other BDCs. During the quarter, we put to work a significant amount of the new capital from our second quarter capital raise, increasing our investments at fair value by $47.2 million. We expect to continue to grow our portfolio over time as well as redeploy proceeds from repayments into high return investment opportunities.”

Portfolio Review
The Company had debt and equity investments in 55 portfolio companies, with a total fair value of $329.7 million, as of September 30, 2015 as compared to debt and equity investments in 50 portfolio companies, with a total fair value of $282.5 million, as of June 30, 2015. The Company�s portfolio consists primarily of first lien loans, representing 77.5% of the portfolio as of September 30, 2015 and 81.0% of the portfolio as of June 30, 2015. As of September 30, 2015, the weighted average contractual yield on the Company�s investments was 10.5% and the effective yield was 10.7% as compared to the weighted average contractual yield of 10.8% and effective yield of 11.1% as of June 30, 2015.

Financial Review
Net investment income for the quarter ended September 30, 2015 totaled $4.5 million, or $0.36 per share, compared to $5.1 million, or $0.43 per share, for the quarter ended June 30, 2015. Adjusted net investment income was also $4.5 million, or $0.36 per share, for the quarter ended September 30, 2015, compared to $5.1 million, or $0.43 per share, for the quarter ended June 30, 2015. On a per share basis, the decrease in adjusted net investment income was primarily attributable to a decrease in interest income, partially offset by a decrease in expenses. The Company’s interest income (including cash interest and payment-in-kind interest) decreased by $0.08 per share during the third quarter, driven primarily by lower prepayment fees and paydown gains (losses) as repayment activity was minimal during the quarter ended September 30, 2015. Interest income, excluding the impact of prepayment fees and paydown gains (losses), was down only slightly from the second quarter on a per share basis reflecting a slight decline in effective yield on the portfolio during the quarter.

Net gain (loss) on investments and secured borrowings was $0.2 million for the quarter ended September 30, 2015, compared to ($7) thousand of net gain (loss) on investments and secured borrowings for the quarter ended June 30, 2015. These gains (losses) are primarily the result of net unrealized mark-to-market gains (losses) on investments in the portfolio and a realized gain on an equity position during the quarter ended September 30, 2015.

Net increase in net assets resulting from operations was $4.7 million, or $0.38 per share, for the quarter ended September 30, 2015, compared to $5.1 million of net increase in net assets resulting from operations, or $0.43 per share, for the quarter ended June 30, 2015. This decrease is primarily the result of declines in prepayment fees and paydown gains (losses) during the quarter ended September 30, 2015 due to reductions in repayment activity, partially offset by increases in net gain (loss) on investments and secured borrowings. The Company’s NAV increased to $14.21 per share at September 30, 2015 from $14.18 per share at June 30, 2015.

Liquidity and Capital Resources
At September 30, 2015, the Company had $9.1 million in cash, $116.2 million of total debt outstanding on its revolving credit facility and $40.0 million in outstanding Small Business Administration (“SBA”) debentures. As of September 30, 2015, the Company had $18.8 million available for additional borrowings on its revolving credit facility and had drawn all of its available SBA-guaranteed debentures.

On July 31, 2015, the Company closed a $25.0 million upsize to its revolving credit facility with ING Capital LLC, as agent, to $135.0 million in accordance with the facility’s accordion feature.

SBIC Subsidiary
As of September 30, 2015, the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP (“MRCC SBIC”), had $20.0 million in regulatory capital and leveragable capital and cash and investments at fair value of $4.4 million and $57.9 million, respectively. Additionally, MRCC SBIC had $40.0 million in SBA-guaranteed debentures outstanding.

Non-GAAP Financial Measure – Adjusted Net Investment Income
On a supplemental basis, the Company discloses Adjusted Net Investment Income (including on a per share basis) which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with generally accepted accounting principles of the United States of America (“non-GAAP”). Adjusted Net Investment Income represents net investment income, excluding the net capital gains incentive fee. The management agreement with the Company’s advisor provides that a capital gains incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized capital losses for such year. Management believes that Adjusted Net Investment Income is a useful indicator of operations exclusive of any net capital gains incentive fee as net investment income does not include gains associated with the capital gains incentive fee.

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Monroe Capital Corporation (NASDAQ: MRCC)