Golub Capital BDC (GBDC) 424B3Prospectus supplement

Filed pursuant to Rule 424(b)(3)
File No. 333-277325

GOLUB CAPITAL BDC, INC.

200 Park Avenue, 25th Floor

New York, NY 10166

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

April 15, 2024

Dear Stockholder:

You are cordially invited to attend the Special Meeting of Stockholders (the “GBDC Special Meeting”) of Golub Capital BDC, Inc. (“GBDC”), to be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC2024SM.

The notice of special meeting and joint proxy statement/prospectus accompanying this letter provide an outline of the business to be conducted at the GBDC Special Meeting. At the GBDC Special Meeting, you will be asked to approve the issuance of shares of GBDC common stock, par value $0.001 per share (“GBDC Common Stock”) pursuant to the Agreement and Plan of Merger dated as of January 16, 2024 (as amended, the “Merger Agreement”) by and among GBDC, Park Avenue Subsidiary Inc., a wholly owned subsidiary of GBDC (“Merger Sub”), Golub Capital BDC 3, Inc., a Maryland corporation (“GBDC 3”), GC Advisors LLC (“GC Advisors”), and, for certain limited purposes, Golub Capital LLC (such proposal is referred to herein as the “Merger Stock Issuance Proposal”).

Closing of the Merger (as defined below) is contingent upon GBDC stockholder approval of the above proposal and certain other closing conditions.

GBDC and GBDC 3 are proposing a combination of both companies by a merger and related transactions pursuant to the Merger Agreement in which Merger Sub would merge with and into GBDC 3 with GBDC 3 continuing as the surviving company (the “Initial Merger”). Immediately following the Initial Merger, GBDC 3, as the surviving company, would merge with and into GBDC with GBDC continuing as the surviving company (the Initial Merger and the Second Merger referred to collectively herein as the “Merger”).

Subject to the terms and conditions of the Merger Agreement, if the Merger is completed, each holder of GBDC 3 common stock, par value $0.001 per share (“GBDC 3 Common Stock”), issued and outstanding immediately prior to the effective time of the Merger will have the right to receive, for each share of GBDC 3 Common Stock, a number of shares of GBDC Common Stock, based on an exchange ratio determined prior to closing of the Merger that potentially values GBDC 3 at a premium to its net asset value (“NAV”) with such premium-to-NAV subject to a cap of 3% (the “Cap”). As described in more detail in the joint proxy statement/prospectus, the Exchange Ratio (as defined in the Merger Agreement) is calculated by taking into account the per share NAV of GBDC and GBDC 3 (the “GBDC Per Share NAV” and the “GBDC 3 Per Share NAV,” respectively), as well as the closing price per share of GBDC Common Stock on the Nasdaq on either the Determination Date or, if the Nasdaq is closed, the most recent trading day (the “GBDC Common Stock Price”). See “Summary of the Merger—Merger Consideration” in the joint proxy statement/prospectus accompanying this letter for a full description of the determination of the Exchange Ratio pursuant to the Merger Agreement.

The following scenarios provide an illustration of the mechanics of the Exchange Ratio based on the ratio of the GBDC Common Stock Price to the GBDC Per Share NAV, or the GBDC P/NAV, as of the determination of the Exchange Ratio, which will occur within 48 hours (excluding Sundays or holidays) of the closing of the Merger:

The market value of the consideration to be received by GBDC 3’s stockholders will fluctuate with changes in the market price of GBDC Common Stock. We urge you to obtain current market quotations of GBDC Common Stock. GBDC Common Stock trades on The Nasdaq Global Select Market (the “Nasdaq”) under the ticker symbol “GBDC.” The following table shows the closing sale price of GBDC Common Stock, as reported on the Nasdaq on January 12, 2024, the last trading day before the execution of the Merger Agreement, and on April 9, 2024, a recent trading day before printing this document.

Your vote is extremely important. At the GBDC Special Meeting, you will be asked to vote on the Merger Stock Issuance Proposal. The approval of the Merger Stock Issuance Proposal requires the affirmative vote of at least a majority of the votes cast by holders of GBDC Common Stock at a meeting at which a quorum is present.

Abstentions will not be included in determining the number of votes cast, and, as a result, will have no effect on the outcome of the Merger Stock Issuance Proposal. Since GBDC stockholders will only vote on the Merger Stock Issuance Proposal, there will not be any broker non-votes (which occur when a beneficial owner does not instruct its broker, bank or other institution or nominee holding its shares of GBDC Common Stock on its behalf).

After careful consideration, the board of directors of GBDC, including, after separate meetings and discussion, all of the independent directors, unanimously recommends that GBDC stockholders vote “FOR” the Merger Stock Issuance Proposal.

It is very important that your shares be represented at the GBDC Special Meeting. Even if you plan to attend the meeting virtually, we urge you to complete, date and sign the enclosed proxy card and promptly return it in the envelope provided. If you prefer, you can save time by voting through the Internet or by telephone as described in this joint proxy statement/prospectus and on the enclosed proxy card. We encourage you to vote via the Internet, if possible, as it saves us significant time and processing costs. Your vote and participation in the governance of GBDC are very important to us.

This joint proxy statement/prospectus describes the GBDC Special Meeting, the Merger, the documents related to the Merger (including the Merger Agreement), and other related matters that GBDC stockholders ought to know before voting on the Merger Stock Issuance Proposal and should be retained for future reference. Please carefully read this entire document, including “Risk Factors” beginning on page 19 and otherwise incorporated by reference in this joint proxy statement/prospectus, for a discussion of the risks relating to the Merger. GBDC files annual, quarterly and current reports, proxy statements and other information about itself with the SEC. GBDC maintains a website at http://www.golubcapitalbdc.com and makes all of its annual, quarterly and current reports, proxy statements and other publicly filed information available on or through its website. You may also obtain such information, free of charge, and make shareholder inquiries by contacting GBDC at 200 Park Avenue, 25^th Floor, New York, New York 10166, Attention: Investor Relations, or by calling collect at (212) 750-6060. The SEC also maintains a website at  http://www.sec.gov that contains such information. Except for the documents incorporated by reference into this joint proxy statement/prospectus, information on GBDC’s website is not incorporated into or a part of this joint proxy statement/prospectus.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the shares of GBDC Common Stock to be issued under this joint proxy statement/prospectus or determined if this joint proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This joint proxy statement/prospectus is dated April 15, 2024 and it is first being mailed or otherwise delivered to GBDC stockholders on or about April 19, 2024.

GOLUB CAPITAL BDC, INC.
200 Park Avenue, 25th Floor
New York, NY 10166
(212) 750-6060

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON May 29, 2024, 9:00 a.m., Eastern Time

Notice is hereby given to the owners of shares of common stock (the “GBDC Stockholders”) of Golub Capital BDC, Inc. (“GBDC”) that:

A Special Meeting of Stockholders (the “GBDC Special Meeting”) of GBDC will be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC2024SM for stockholders of GBDC to consider and vote on a proposal to approve the issuance of shares of GBDC common stock, par value $0.001 per share (“GBDC Common Stock”) pursuant to the Agreement and Plan of Merger, dated as of January 16, 2024 (as amended, the “Merger Agreement”), by and among GBDC, Park Avenue Subsidiary Inc., a wholly owned subsidiary of GBDC (“Merger Sub”), Golub Capital BDC 3, Inc., a Maryland corporation (“GBDC 3”), GC Advisors LLC (“GC Advisors”), and, for certain limited purposes, Golub Capital LLC (such proposal is referred to herein as the “Merger Stock Issuance Proposal”).

Closing of the Merger is contingent upon GBDC stockholder approval of the above proposal and certain other closing conditions.

THE GBDC BOARD OF DIRECTORS, INCLUDING, AFTER SEPARATE MEETINGS AND DISCUSSION, ALL OF THE INDEPENDENT DIRECTORS, HAS UNANIMOUSLY APPROVED EACH OF THE MERGER AGREEMENT AND RELATED TRANSACTIONS (THE “MERGER”) AND THE MERGER STOCK ISSUANCE PROPOSAL AND UNANIMOUSLY RECOMMENDS THAT GBDC STOCKHOLDERS VOTE “FOR” THE MERGER STOCK ISSUANCE PROPOSAL.

Enclosed is a copy of the joint proxy statement/prospectus and the proxy card. You have the right to receive notice of, and to vote at, the GBDC Special Meeting if you were a GBDC Stockholder of record at the close of business on April 5, 2024. If you are unable to participate in the GBDC Special Meeting, please sign the enclosed proxy and return it promptly in the envelope provided, or authorize your proxy via the Internet or telephone. Instructions are shown on the proxy card.

Your vote is extremely important to GBDC. In the event there are not sufficient votes for a quorum or to approve the proposals at the time of the GBDC Special Meeting, the GBDC Special Meeting may be adjourned in order to permit further solicitation of proxies by GBDC.

The Merger and the Merger Agreement are each described in more detail in this joint proxy statement/prospectus, which you should read carefully and in its entirety before authorizing a proxy to vote. Attached to this joint proxy statement/prospectus is a copy of the Merger Agreement as Annex A.

April 15, 2024

This is an important meeting. To ensure proper representation at the meeting, please promptly authorize a proxy over the Internet or by telephone, or execute and return the accompanying proxy card, which is being solicited by the GBDC board of directors. Instructions are shown on the proxy card. Authorizing a proxy is important to ensure a quorum at the GBDC Special Meeting. Proxies may be revoked at any time before they are exercised by submitting a written notice of revocation or a subsequently executed proxy, or by attending the GBDC Special Meeting and voting virtually.

Important notice regarding the availability of proxy materials for the GBDC Special Meeting, GBDC’s joint proxy statement/prospectus and the proxy card are available at www.proxyvote.com.

GOLUB CAPITAL BDC 3, INC.
200 Park Avenue, 20th Floor
New York, NY 10166

April 15, 2024

Dear Stockholder:

You are cordially invited to attend the Special Meeting of Stockholders (the “GBDC 3 Special Meeting”) of Golub Capital BDC 3, Inc., a Maryland corporation (“GBDC 3”), to be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC32024SM.

The notice of special meeting and joint proxy statement/prospectus accompanying this letter provide an outline of the business to be conducted at the GBDC 3 Special Meeting. At the GBDC 3 Special Meeting, you will be asked to approve the Agreement and Plan of Merger dated as of January 16, 2024 (as amended, the “Merger Agreement”) by and among Golub Capital BDC, Inc. (“GBDC”), Park Avenue Subsidiary Inc., a wholly owned subsidiary of GBDC (“Merger Sub”), GBDC 3, GC Advisors LLC (“GC Advisors”), and, for certain limited purposes, Golub Capital LLC (such proposal is referred to herein as the “Merger Proposal”).

The Merger Agreement provides for a combination of GBDC 3 and GBDC via a merger and related transactions in which Merger Sub would merge with and into GBDC 3 with GBDC 3 continuing as the surviving company (the “Initial Merger”). Immediately following the Initial Merger, in a subsequent combination, the surviving company would merge with and into GBDC with GBDC continuing as the surviving company (the Initial Merger, together with the subsequent merger, the “Merger”). An amended investment advisory agreement between GBDC and GC Advisors (the “New Investment Advisory Agreement”) would take effect upon the closing of the Merger. Closing of the Merger is contingent upon GBDC 3 stockholder approval of the Merger Agreement and certain other closing conditions.

Subject to the terms and conditions of the Merger Agreement, if the Merger is completed, each holder of GBDC 3 common stock, par value $0.001 per share (“GBDC 3 Common Stock”), issued and outstanding immediately prior to the effective time of the Merger will have the right to receive, for each share of GBDC 3 Common Stock, a number of shares of GBDC Common Stock, based on an exchange ratio determined prior to closing of the Merger that potentially values GBDC 3 at a premium to its net asset value (“NAV”) with such premium-to-NAV subject to a cap of 3% (the “Cap”). As described in more detail in the joint proxy statement/prospectus, the Exchange Ratio (as defined in the Merger Agreement) is calculated by taking into account the per share NAV of GBDC and GBDC 3 (the “GBDC Per Share NAV” and the “GBDC 3 Per Share NAV,” respectively), as well as the closing price per share of GBDC Common Stock on the Nasdaq on either the Determination Date or, if the Nasdaq is closed, the most recent trading day (the “GBDC Common Stock Price”). See “Summary of the Merger—Merger Consideration” in the joint proxy statement/prospectus accompanying this letter for a full description of the determination of the Exchange Ratio pursuant to the Merger Agreement.

The following scenarios provide an illustration of the mechanics of the Exchange Ratio based on the ratio of the GBDC Common Stock Price to the GBDC Per Share NAV, or the GBDC P/NAV, as of the determination of the Exchange Ratio, which will occur within 48 hours (excluding Sundays or holidays) of the closing of the Merger:

The value of the consideration to be received by GBDC 3 stockholders will fluctuate with changes in the market price of GBDC Common Stock. We urge you to obtain current market quotations of GBDC Common Stock. GBDC Common Stock trades on The Nasdaq Global Select Market (“Nasdaq”) under the ticker symbol “GBDC.” The following table shows the closing sale price of GBDC Common Stock, as reported on the Nasdaq on January 12, 2024, the last trading day before the execution of the Merger Agreement and on April 9, 2024, a recent trading day before printing this document.

The holders of at least a majority of GBDC 3’s outstanding shares must be present at the GBDC 3 Special Meeting in order for the Merger Proposal to be voted upon. The approval of the Merger Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of GBDC 3 Common Stock entitled to vote at the GBDC 3 Special Meeting.

Abstentions will not count as affirmative votes cast and will therefore have the same effect as votes against the Merger Proposal. Since GBDC 3 stockholders will only vote on the Merger Proposal, there will not be any broker non-votes.

GBDC 3’s board of directors, including, after separate meetings and discussion, all of the independent directors, unanimously recommends that GBDC 3 stockholders vote FOR the Merger Proposal. No other business is expected to be presented at the GBDC 3 Special Meeting.

It is very important that your shares be represented at the GBDC 3 Special Meeting. Even if you plan to attend the meeting virtually, we urge you to complete, date and sign the enclosed proxy card and promptly return it in the envelope provided. If you prefer, you can save time by voting through the Internet or by telephone as described in this joint proxy statement/prospectus and on the enclosed proxy card. We encourage you to vote via the Internet, if possible, as it saves us significant time and processing costs. Your vote and participation in the governance of GBDC 3 are very important to us.

This joint proxy statement/prospectus is dated April 15, 2024 and it is first being mailed or otherwise delivered to GBDC 3 stockholders on or about April 19, 2024.

GOLUB CAPITAL BDC 3, INC.
200 Park Avenue, 25th Floor
New York, NY 10166

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON May 29, 2024, 9:00 a.m., Eastern Time

Notice is hereby given to the owners of shares of common stock (the “GBDC 3 Stockholders”) of Golub Capital BDC 3, Inc. a Maryland corporation (“GBDC 3”), that:

A Special Meeting of Stockholders (the “GBDC 3 Special Meeting”) of GBDC 3 will be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC32024SM, for the purpose of approving the Agreement and Plan of Merger, dated as of January 16, 2024 (as amended, the “Merger Agreement”), by and among Golub Capital BDC, Inc. (“GBDC”), Park Avenue Subsidiary Inc., a wholly owned subsidiary of GBDC (“Merger Sub”), GBDC 3, GC Advisors LLC (“GC Advisors”), and, for certain limited purposes, Golub Capital LLC, pursuant to which Merger Sub will merge with and into GBDC 3, with GBDC 3 as the surviving company (the “Initial Merger”), followed immediately by the merger of GBDC 3 with and into GBDC, with GBDC surviving the Second Merger (collectively, the “Merger”). Subject to the terms and conditions of the Merger Agreement, if the Merger is completed, each holder of GBDC 3 common stock, par value $0.001 per share (“GBDC 3 Common Stock”), issued and outstanding immediately prior to the effective time of the Merger will have the right to receive, for each share of GBDC 3 Common Stock, a number of shares of GBDC Common Stock, based on an exchange ratio determined prior to closing of the Merger that potentially values GBDC 3 at a premium to its net asset value (“NAV”) with such premium-to-NAV subject to a cap of 3% (the “Cap”). As described in more detail in the joint proxy statement/prospectus, the Exchange Ratio (as defined in the Merger Agreement) is calculated by taking into account the per share NAV of GBDC and GBDC 3 (the “GBDC Per Share NAV” and the “GBDC 3 Per Share NAV,” respectively), as well as the closing price per share of GBDC Common Stock on the Nasdaq on either the Determination Date or, if the Nasdaq is closed, the most recent trading day (the “GBDC Common Stock Price”). See “Summary of the Merger—Merger Consideration” in the joint proxy statement/prospectus accompanying this letter for a full description of the determination of the Exchange Ratio pursuant to the Merger Agreement.

The following scenarios provide an illustration of the mechanics of the Exchange Ratio based on the ratio of the GBDC Common Stock Price to the GBDC Per Share NAV, or the GBDC P/NAV, as of the determination of the Exchange Ratio, which will occur within 48 hours (excluding Sundays or holidays) of the closing of the Merger:

Enclosed is a copy of the joint proxy statement/prospectus and the proxy card. You have the right to receive notice of, and to vote at, the GBDC 3 Special Meeting if you were a GBDC 3 Stockholder of record at the close of business on April 5, 2024. Whether or not you expect to be present virtually at the GBDC 3 Special Meeting, please sign the enclosed proxy and return it promptly in the envelope provided, or authorize your proxy via the Internet or telephone. Instructions are shown on the proxy card.

Your vote is extremely important to us. In the event there are not sufficient votes for a quorum or to approve the proposal at the time of the GBDC 3 Special Meeting, the GBDC 3 Special Meeting may be adjourned in order to permit further solicitation of proxies by GBDC 3.

THE GBDC 3 BOARD OF DIRECTORS, INCLUDING, AFTER SEPARATE MEETINGS AND DISCUSSION, ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE MERGER PROPOSAL.

April 15, 2024

TABLE OF CONTENTS

ABOUT THIS DOCUMENT

This document, which forms part of a registration statement on Form N-14 filed with the U.S. Securities and Exchange Commission (the “SEC”) by GBDC (File No. 333-277325), constitutes a prospectus of GBDC under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of GBDC Common Stock to be issued to GBDC 3 stockholders as required by the Merger Agreement.

This document also constitutes joint proxy statements of GBDC and GBDC 3 under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). It also constitutes a notice of meeting with respect to: (1) the GBDC Special Meeting, at which GBDC stockholders will be asked to vote upon the Merger Stock Issuance Proposal; and (2) the GBDC 3 Special Meeting, at which GBDC 3 stockholders will be asked to vote on the Merger Proposal.

You should rely only on the information contained in this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated April 15, 2024. You should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than that date. Neither the mailing of this joint proxy statement/prospectus to GBDC stockholders or GBDC 3 stockholders nor the issuance of GBDC Common Stock in connection with the Merger will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

Except where the context otherwise indicates, information contained in this joint proxy statement/prospectus regarding GBDC has been provided by GBDC and information contained in this joint proxy statement/prospectus regarding GBDC 3 has been provided by GBDC 3.

When used in this document, unless otherwise indicated in this document or the context otherwise requires:

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETINGS AND THE MERGER

The questions and answers below highlight only selected information from this joint proxy statement/prospectus. They do not contain all of the information that may be important to you. You should read carefully this entire document to fully understand the Merger Agreement and the transactions contemplated thereby (including the Merger) and the voting procedures for each of the GBDC Special Meeting and the GBDC 3 Special Meeting.

Questions and Answers about the Special Meetings

GBDC 3 is furnishing these materials in connection with the solicitation of proxies by GBDC 3’s board of directors (the “GBDC 3 Board”) for use at the special meeting of GBDC 3 stockholders to be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC32024SM, and any adjournments or postponements thereof (the “GBDC 3 Special Meeting”).

This joint proxy statement/prospectus and the accompanying materials are being mailed on or about April 19, 2024 to stockholders of record of GBDC and GBDC 3 described below and are available at www.proxyvote.com.

Important notice regarding the availability of proxy materials for the GBDC Special Meeting. GBDC’s joint proxy statement/prospectus and the proxy card are available at www.proxyvote.com.

Important notice regarding the availability of proxy materials for the GBDC 3 Special Meeting. GBDC 3’s joint proxy statement/prospectus and the proxy card are available at www.proxyvote.com.

If there appear not to be enough votes for a quorum or to approve the proposals at the GBDC Special Meeting, the GBDC Special Meeting may also be adjourned for such periods as the presiding officer of the GBDC Special Meeting shall direct. The holders of a majority of the votes entitled to be cast by the GBDC stockholders entitled to vote thereat, present virtually or represented by proxy, shall have the power to adjourn the GBDC Special Meeting from time to time without notice other than announcement at the GBDC Special Meeting. Joshua M. Levinson and Christopher C. Ericson are the persons named as proxy and will vote proxies held by one of them for such adjournment, unless marked to be voted against any proposal for which an adjournment is sought, to permit the further solicitation of proxies.

If sufficient votes in favor of any of the proposals to be considered at the GBDC Special Meeting have been received at the time of the GBDC Special Meeting, the applicable proposal or proposals will be acted upon and such action will be final, regardless of any subsequent adjournments to consider other proposals.

If there appears not to be enough votes for a quorum or to approve the proposals at the GBDC 3 Special Meeting, the chairman of the GBDC 3 Special Meeting shall have the power to conclude or adjourn the GBDC 3 Special Meeting from time to time to a date not more than 120 days after the original record date without notice other than announcement at the GBDC 3 Special Meeting.

Broker non-votes are described as votes cast by a broker or other nominee on behalf of a beneficial holder who does not provide explicit voting instructions to such broker or nominee and who does not attend the meeting. The Merger Stock Issuance Proposal is a non-routine matter for GBDC. As a result, if a GBDC stockholder hold shares in “street name” through a broker, bank or other nominee, the broker, bank or nominee will not be permitted to exercise voting discretion with respect to the Merger Stock Issuance Proposal. As a result, abstentions will have no effect on the outcome of the Merger Stock Issuance Proposal. Since GBDC stockholders will only vote on the Merger Stock Issuance Proposal, there will not be any broker non-votes.

Abstentions will have the effect of a vote “against” this proposal. Since GBDC 3 stockholders will only vote on the Merger Proposal, there will not be any broker non-votes.

If the Merger Stock Issuance Proposal is not approved by the GBDC stockholders, then the Merger will not close. If the Merger Proposal is not approved by the GBDC 3 stockholders, then the Merger will not close.

If the Merger does not close because either the GBDC stockholders or the GBDC 3 stockholders do not approve the applicable proposals or any of the other conditions to the closing of the Merger are not satisfied or waived, each of GBDC and GBDC 3 will continue to operate pursuant to the current agreements in place for each, including, in the case of GBDC, the Current GBDC Investment Advisory Agreement, and each of GBDC’s and GBDC 3’s respective directors and executive officers will continue to serve as its directors and officers, respectively, until their successors are duly elected and qualified or their resignation.

For more information regarding expenses related to the Merger, see “Questions and Answers about the Merger—Who is responsible for paying the expenses relating to completing the Merger?’”

The registration statement (of which this joint proxy statement/prospectus forms a part), each Notice of Special Meeting of Stockholders and each proxy card are available at www.proxyvote.com.

Golub Capital BDC, Inc. or Golub Capital BDC 3, Inc.
Investor Relations
200 Park Avenue, 25^th Floor
New York, New York 10166
(212) 750-6060

Questions and Answers about the Merger

Following the Effective Time, the record holders of shares of GBDC 3 Common Stock will be entitled to receive dividends or other distributions declared by the GBDC Board with a record date after the Effective Time theretofore payable with respect to the whole shares of GBDC Common Stock represented by such shares of GBDC 3 Common Stock. For a history of the dividends and distributions paid by GBDC 3 since September 30, 2022, see “Market Price, Dividend and Distribution Information—GBDC 3.”

As a result of these commonalities, GC Advisors does not anticipate any significant portfolio repositioning in connection with the Merger.

SUMMARY OF THE MERGER

This summary highlights selected information contained elsewhere in this joint proxy statement/prospectus and may not contain all of the information that is important to you. You should carefully read this entire joint proxy statement/prospectus, including the other documents to which this joint proxy statement/prospectus refers for a more complete understanding of the Merger. In particular, you should read the annexes attached to this joint proxy statement/prospectus, including the Merger Agreement, which is attached as Annex A hereto, as it is the legal document that governs the Merger. See “Where You Can Find More Information.” For a discussion of the risk factors you should carefully consider, see the section entitled “Risk Factors” beginning on page 19.

The Parties to the Merger

Golub Capital BDC, Inc.

200 Park Avenue, 25^th Floor

New York, NY 10166

(212) 750-6060

Golub Capital BDC, Inc. (“GBDC”) is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Advisers Act of 1940, as amended (the “1940 Act”). In addition, for U.S. federal income tax purposes, GBDC has elected to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. GBDC was formed in November 2009 to continue and expand the business of GBDC’s predecessor, Golub Capital Master Funding LLC, which commenced operations in July 2007. GBDC makes investments primarily in one stop loans (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies that are, in most cases, sponsored by private equity firms. GC Advisors structures these one stop loans as senior secured loans, and GBDC obtains security interests in the assets of the portfolio company that serve as collateral in support of the repayment of these loans. This collateral often takes the form of first-priority liens on the assets of the portfolio company. In many cases, GBDC is the sole lender or GBDC, together with GBDC’s affiliates, are the sole lenders of one stop loans, which can afford GBDC additional influence over the borrower in terms of monitoring and, if necessary, remediating any underperformance.

GBDC’s investment objective is to generate current income and capital appreciation by investing primarily in one stop and other senior secured loans of U.S. middle-market companies. GBDC may also selectively invest in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in U.S. middle-market companies. GBDC intends to achieve its investment objective by (1) accessing the established loan origination channels developed by Golub Capital, a leading lender to middle-market companies with over $65.0 billion in capital under management as of January 1, 2024, (2) selecting investments within its core middle-market company focus, (3) partnering with experienced private equity firms, or sponsors, in many cases with whom Golub Capital has invested alongside in the past, (4) implementing the disciplined underwriting standards of Golub Capital and (5) drawing upon the aggregate experience and resources of Golub Capital.

GBDC seeks to create a portfolio that includes primarily one stop and other senior secured loans by primarily investing approximately $10.0 million to $80.0 million of capital, on average, in the securities of U.S. middle-market companies. GBDC may also selectively invest more than $80.0 million in some of its portfolio companies and generally expects that the size of its individual investments will vary proportionately with the size of its capital base.

GBDC generally invests in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities, which may be referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of GBDC’s debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity, which may increase GBDC’s risk of losing part or all of its investment.

Golub Capital BDC 3, Inc.

200 Park Avenue, 25^th Floor

New York, NY 10166

(212) 750-6060

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

 GBDC 3’s investment objective is to invest primarily in one stop loans (a loan that combines characteristics of traditional first lien senior secured loans and second lien or subordinated loans and that are often referred to by other middle-market lenders as unitranche loans) and other senior secured loans of U.S. middle-market companies that are, in most cases, sponsored by private equity firms. GBDC 3 also selectively invests in second lien and subordinated (a loan that ranks senior only to a borrower’s equity securities and ranks junior to all of such borrower’s other indebtedness in priority of payment) loans of, and warrants and minority equity securities in, primarily U.S. middle-market companies. GBDC 3 has entered into an investment advisory agreement with GC Advisors, under which the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, GBDC 3. Under an administration agreement GBDC 3 is provided with certain services by an administrator, which is currently Golub Capital.

GBDC 3 seeks to create a portfolio that includes primarily one stop and senior secured loans by primarily investing approximately $5.0 million to $45.0 million of capital, on average, in the securities of U.S. middle-market companies. GBDC 3 may also selectively invest more than $45.0 million in some of its portfolio companies and generally expects that the size of its individual investments will vary proportionately with the size of its capital base.

GBDC 3 generally invests in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. These securities, which may be referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. In addition, many of GBDC 3’s debt investments have floating interest rates that reset on a periodic basis and typically do not fully pay down principal prior to maturity, which may increase GBDC 3’s risk of losing part or all of its investment.

Park Avenue Subsidiary Inc.

200 Park Avenue, 25^th Floor

New York, NY 10166

(212) 750-6060

Merger Sub is a Maryland corporation and a newly formed, wholly owned subsidiary of GBDC. Merger Sub was formed in connection with and for the sole purpose of the Merger.

GC Advisors LLC

200 Park Avenue, 25^th Floor

New York, NY 10166

(212) 750-6060

GC Advisors is a Delaware limited liability company located at 200 Park Avenue, 25th Floor, New York, NY 10166. GC Advisors is registered as an investment adviser under the Advisers Act. The beneficial interests in GC Advisors are majority owned, indirectly, by two affiliated trusts. The trustees of those trusts are Stephen A. Kepniss and David L. Finegold. Subject to the overall supervision of GBDC and GBDC 3’s board of directors and in accordance with the 1940 Act, GC Advisors manages GBDC and GBDC 3’s day-to-day operations and provides investment advisory services to each of GBDC and GBDC 3.

GC Advisors is an affiliate of Golub Capital and pursuant to a staffing agreement (the “Staffing Agreement”), Golub Capital LLC makes experienced investment professionals available to GC Advisors and provides access to the senior investment personnel of Golub Capital LLC and its affiliates. The Staffing Agreement provides GC Advisors with access to investment opportunities, which GBDC and GBDC 3 refer to in the aggregate as deal flow, generated by Golub Capital LLC and its affiliates in the ordinary course of their businesses and commits the members of GC Advisors’ investment committee to serve in that capacity. As the investment adviser to each of GBDC and GBDC 3, GC Advisors is obligated to allocate investment opportunities among GBDC, GBDC 3 and its other clients fairly and equitably over time in accordance with its allocation policy. See “Certain Relationships and Related Party Transactions of Golub Capital BDC, Inc.” and “Certain Relationships and Related Party Transactions of Golub Capital BDC 3, Inc.” However, there can be no assurance that such opportunities will be allocated to GBDC or GBDC 3 fairly or equitably in the short-term or over time. GC Advisors seeks to capitalize on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of Golub Capital LLC’s investment professionals.

An affiliate of GC Advisors, Golub Capital LLC (the “Administrator”), provides the administrative services necessary for each of GBDC and GBDC 3 to operate. See “Golub Capital BDC, Inc. Management Agreements—Administration Agreement” and “Golub Capital BDC 3, Inc. Management Agreements—GBDC 3 Administration Agreement” for a discussion of the fees and expenses (subject to the review and approval of their GBDC’s and GBDC 3’s respective independent directors) each of GBDC and GBDC 3 is required to reimburse to the Administrator.

About Golub Capital

Golub Capital, founded in 1994, is a leading lender to middle-market companies, with a long track record of investing in senior secured, one stop, second lien and subordinated loans. As of January 1, 2024, Golub Capital had over $65.0 billion of capital under management. Since its inception, Golub Capital has closed deals with over 370 middle-market sponsors and repeat transactions with over 260 sponsors.

Golub Capital’s middle-market lending group is managed by an eight-member senior management team consisting of Lawrence E. Golub, David B. Golub, Andrew H. Steuerman, Gregory W. Cashman, Spyro G. Alexopoulos, Marc C. Robinson, Robert G. Tuchscherer and Jason J. Van Dussen. As of December 31, 2023, Golub Capital had more than 200 investment professionals supported by more than 675 administrative and back office personnel that focus on operations, finance, legal and compliance, accounting and reporting, marketing, information technology and office management. 

Merger Structure

Pursuant to the terms of the Merger Agreement, at the Effective Time, Merger Sub will be merged with and into GBDC 3 in accordance with the Maryland General Corporation Law (the “MGCL”). GBDC 3 will be the surviving company in the Initial Merger and will continue its existence as a corporation under the laws of the State of Maryland. As of the Effective Time, the separate corporate existence of Merger Sub will cease. Immediately after the occurrence of the Effective Time, at the Second Effective Time, in the Second Merger, the surviving company will merge with and into GBDC in accordance with the Delaware General Corporation Law (the “DGCL”) and MGCL, with GBDC as the surviving entity. As of the Second Effective Time, the separate corporate existence of GBDC 3 will cease and GBDC will continue its existence as a corporation under the laws of the State of Delaware.

At the Effective Time, each share of GBDC 3 Common Stock issued and outstanding immediately prior to the Effective Time, except for shares, if any, owned by GBDC or any of its consolidated subsidiaries (the “Cancelled Shares”), shall be converted into the right to receive a number of shares of GBDC Common Stock equal to the Exchange Ratio (as defined below) in connection with the closing of the Merger.

The Merger Agreement is attached as Annex A to this joint proxy statement/prospectus and is incorporated by reference into this joint proxy statement/prospectus. GBDC and GBDC 3 encourage their respective stockholders to read the Merger Agreement carefully and in its entirety, as it is the principal legal document governing the Merger.

Merger Consideration

If the Initial Merger is consummated, each GBDC 3 stockholder will be entitled to receive a number of shares of GBDC Common Stock equal to the Exchange Ratio (as defined below) for each share of GBDC 3 Common Stock, which Exchange Ratio will be appropriately adjusted if, between the Determination Date and the Effective Time, the respective outstanding shares of GBDC Common Stock or GBDC 3 Common Stock have been increased or decreased or changed into or exchanged for a different number or kind of shares or securities, in each case, as a result of any reclassification, recapitalization, stock split, reverse stock split, split-up, merger, issue tender or exchange offer, combination or exchange of shares or similar transaction, or if a stock dividend or dividend payable in any other securities or similar distribution has been declared with a record date within such period, in each case, to provide the stockholders of GBDC 3 and GBDC the same economic effect as contemplated by the Merger Agreement prior to such event. Closing of the Initial Merger is contingent upon GBDC stockholder approval of the Merger Stock Issuance Proposal and certain other closing conditions. No fractional shares of GBDC Common Stock will be issued, and holders of GBDC 3 Common Stock will receive cash in lieu of fractional shares.

Under the terms of the Merger Agreement, the “Exchange Ratio” will be determined as of a mutually agreed date (the “Determination Date”) no earlier than 48 hours (excluding Sundays and holidays) prior to the effective date of the Merger and based on (i) the net asset value (“NAV”) per share of GBDC and GBDC 3 (the “GBDC Per Share NAV” and the “GBDC 3 Per Share NAV,” respectively) and (ii) the closing price per share of GBDC Common Stock on the Nasdaq on either the Determination Date or, if the Nasdaq is closed on the Determination Date, the most recent trading day prior to the Determination Date (the “GBDC Common Stock Price”). The Exchange Ratio will be calculated as follows:

(i) if the GBDC Common Stock Price is greater than the GBDC Per Share NAV, then the Exchange Ratio shall be the quotient (rounded to the fourth nearest decimal) of: (A) the amount equal to (x) GBDC 3 Per Share NAV multiplied by (y) the sum of (a) one (1) and (b) the GBDC 3 Share of GBDC Premium (as defined below); divided by (B) the GBDC Common Stock Price; provided, that, the amount set forth in sub-clause (y) for the purposes of the calculation shall not be greater than, and shall be subject to a cap of, 1.03. “GBDC 3 Share of GBDC Premium” means fifty percent (50%) multiplied by the difference between (A) the quotient of (x) GBDC Common Stock Price; divided by (y) GBDC Per Share NAV and (B) one (1); or

(ii) if the GBDC Common Stock Price is equal to or lesser than GBDC Per Share NAV, then the Exchange Ratio will be the quotient (rounded to the nearest decimal) of: (A) the GBDC 3 Per Share NAV, divided by (B) the GBDC Per Share NAV.

Market Price of Securities

Shares of GBDC Common Stock trade on the Nasdaq under the symbol “GBDC.” Shares of GBDC 3 Common Stock are not listed on a national stock exchange.

The following table presents the closing sales prices on January 12, 2024, the last trading day before the execution of the Merger Agreement and on April 9, 2024, a recent trading day before printing this document and the most recently determined NAV per share of GBDC Common Stock and the most recently determined NAV per share of GBDC 3 Common Stock.

Risks Relating to the Proposed Merger

The Merger and the other transactions contemplated by the Merger Agreement are subject to, among others, the following risks. GBDC and GBDC 3 stockholders should carefully consider these risks before deciding how to vote on the proposals to be voted on at their respective special meetings.

See the section captioned “Risk Factors—Risks Relating to the Merger” below for a more detailed discussion of these factors.

Tax Consequences of the Merger

The Merger is intended to qualify as a “reorganization,” within the meaning of Section 368(a) of the Code, and it is a condition to GBDC’s and GBDC 3’s respective obligations to complete the Merger that each of them receives a legal opinion to that effect. Accordingly, the Merger is not expected to be a taxable event for GBDC 3 stockholders for U.S. federal income tax purposes as to the shares of GBDC Common Stock they receive in the Merger, except for any gain or loss that may result from the receipt of cash in lieu of fractional shares of GBDC Common Stock.   

GBDC 3 stockholders should read the section captioned “Certain Material U.S. Federal Income Tax Consequences of the Merger” for a more complete discussion of the U.S. federal income tax consequences of the Merger. Tax matters can be complicated and the tax consequences of the Merger to GBDC 3 stockholders will depend on their particular tax situation. Holders of GBDC 3 Common Stock should consult with their own tax advisors to understand the tax consequences of the Merger to them.

The Merger is not expected to be a taxable event for GBDC stockholders.

Special Meeting of GBDC Stockholders

GBDC plans to hold the GBDC Special Meeting to be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC2024SM. At the GBDC Special Meeting, holders of GBDC Common Stock will be asked to approve the Merger Stock Issuance Proposal.

A GBDC stockholder can vote at the GBDC Special Meeting if such stockholder owned shares of GBDC Common Stock at the close of business on the GBDC Record Date. As of that date, there were approximately 171,517,307 shares of GBDC Common Stock outstanding and entitled to vote, approximately 4,718,831 of which, or 2.8%, were owned beneficially or of record by directors and executive officers of GBDC.

Special Meeting of GBDC 3 Stockholders

GBDC 3 plans to hold the GBDC 3 Special Meeting to be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC32024SM. At the GBDC 3 Special Meeting, holders of GBDC 3 Common Stock will be asked to approve the Merger Proposal.

A GBDC 3 stockholder can vote at the GBDC 3 Special Meeting if such stockholder owned shares of GBDC 3 Common Stock at the close of business on the GBDC 3 Record Date. As of that date, there were 100,105,100.915 shares of GBDC 3 Common Stock outstanding and entitled to vote. Approximately 3,920,624 of such total outstanding shares, or 3.8%, were owned beneficially or of record by directors and executive officers of GBDC 3.

GBDC Board Recommendation

The GBDC Board, including, after separate meetings and discussion, all of the GBDC Independent Directors, has unanimously approved the Merger Agreement, including the Merger and the related transactions. The GBDC Board, including all of the GBDC Independent Directors, recommends that GBDC stockholders vote “FOR” the Merger Stock Issuance Proposal.

GBDC 3 Board Recommendation

The GBDC 3 Board, including, after separate meetings and discussion, the GBDC 3 Independent Directors, has unanimously approved the Initial Merger and the Merger Agreement and recommend that GBDC 3 stockholders vote “FOR” the Merger Proposal.

Vote Required—GBDC

Each share of GBDC Common Stock held by a holder of record as of the GBDC Record Date has one vote on each matter considered at the GBDC Special Meeting.

The Merger Stock Issuance Proposal

The approval of the Merger Stock Issuance Proposal requires the affirmative vote of at least a majority of the votes cast by holders of GBDC Common Stock at a meeting at which a quorum is present. Abstentions and will have no effect on the outcome of the Merger Stock Issuance Proposal. Since GBDC stockholders will only vote on the Merger Stock Issuance Proposal, there will not be any broker non-votes.

Vote Required—GBDC 3

Each share of GBDC 3 Common Stock held by a holder of record as of the GBDC 3 Record Date has one vote on the Merger Proposal considered at the GBDC 3 Special Meeting.

The Merger Proposal

The approval of the Merger Proposal requires the affirmative vote of the holders of the outstanding shares of GBDC 3 Common Stock entitled to cast a majority of votes entitled to be cast at the GBDC 3 Special Meeting. Abstentions will not count as affirmative votes cast and will therefore have the same effect as votes “against” the Merger Proposal. Since GBDC 3 stockholders will only vote on the Merger Proposal, there will not be any broker non-votes.

Completion of the Merger

As more fully described in this joint proxy statement/prospectus and in the Merger Agreement, the completion of the Initial Merger depends on a number of conditions being satisfied or, where legally permissible, waived. For information on the conditions that must be satisfied or waived for the Merger to occur, see “Description of the Merger—Conditions to the Closing of the Merger.” While there can be no assurances as to the exact timing, or that the Merger will be completed at all, GBDC and GBDC 3 are working to complete the Merger in the first half of calendar year 2024. It is currently expected that the Merger will be completed promptly following receipt of the required stockholder approvals at the GBDC Special Meeting and the GBDC 3 Special Meeting and satisfaction of the other closing conditions set forth in the Merger Agreement. The Second Merger will occur immediately after the Initial Merger is completed.

Termination of the Merger

The Merger Agreement includes restrictions on the ability of GBDC 3 and GBDC to solicit proposals for alternative transactions or engage in discussions regarding such proposals, subject to exceptions and termination provisions (as more fully described in the section entitled “Description of the Merger — Termination of the Merger Agreement”), which could have the effect of discouraging such proposals from being made or pursued. In addition, The Merger Agreement also contains certain termination rights in favor of GBDC and GBDC 3, including if the Merger is not completed on or before January 16, 2025 or if the requisite approvals of GBDC stockholders or GBDC 3 stockholders are not obtained.

Reasons for the Merger

GBDC

The GBDC Board consulted with GBDC’s management, GC Advisors, as well as its legal and other advisors and considered numerous factors, including the unanimous recommendation of GBDC Independent Directors, and determined that the Merger is in GBDC’s best interests and the best interests of GBDC’s stockholders, and that GBDC stockholders will not suffer any dilution for purposes of Rule 17a-8 of the 1940 Act as a result of the Merger.

Certain material factors considered by the GBDC Board and the GBDC Independent Directors as a group that favored the conclusion of the GBDC Board and the GBDC Independent Directors that the Merger is in GBDC’s best interests and the best interests of GBDC’s stockholders included, among others:

The foregoing list does not include all the factors that the GBDC Board considered in approving the proposed Merger and the Merger Agreement and in recommending that GBDC stockholders approve the issuance of shares of GBDC Common Stock necessary to effectuate the Merger. For a further discussion of the material factors considered by the GBDC Board, see “The Merger—Reasons for the Merger.”

GBDC 3

The GBDC 3 Board consulted with GBDC 3’s management, GC Advisors, as well as its legal and other advisors and considered numerous factors, including the unanimous recommendation of the GBDC 3 Independent Directors, and determined that the Initial Merger is in GBDC 3’s best interests and the best interests of GBDC 3’s stockholders, and that GBDC 3 stockholders will not suffer any dilution for purposes of Rule 17a-8 of the 1940 Act as a result of the Merger.

Certain material factors considered by the GBDC 3 Board and the GBDC 3 Independent Directors as a group that favored the conclusion of the GBDC 3 Board and the GBDC 3 Independent Directors that the Initial Merger is in GBDC 3’s best interests and the best interests of GBDC 3’s stockholders included, among others: 

The foregoing list does not include all the factors that the GBDC 3 Board considered in approving the Merger and the Merger Agreement and in recommending that GBDC 3 stockholders approve the Merger and the Merger Agreement.

For a further discussion of the material factors considered by the GBDC 3 Board, see “The Merger—Reasons for the Merger.”

GBDC 3 and GBDC Stockholders Do Not Have Appraisal Rights

Neither GBDC 3 stockholders nor GBDC stockholders will be entitled to exercise appraisal rights in connection with the Merger under the laws of the State of Maryland or the State of Delaware.

RISK FACTORS

In addition to the other information included in this document, stockholders should carefully consider the matters described below in determining whether to approve (i) in the case of GBDC 3 stockholders, the Merger Proposal and (ii) in the case of GBDC stockholders, the Merger Stock Issuance Proposal. The information in “Item 1A. Risk Factors” in Part I of GBDC’s Annual Report on Form 10-K (File No. 814-00794) for the fiscal year ended September 30, 2023 is incorporated herein by reference for general risks related to GBDC. The information in “Item 1A. Risk Factors” in Part I of GBDC 3’s Annual Report on Form 10-K (File No. 814-01244) for the fiscal year ended September 30, 2023 is incorporated herein by reference for general risks related to GBDC 3. The risks associated with an investment in GBDC and GBDC 3 are substantially identical because GBDC and GBDC 3 have the same investment adviser and co-invest in transactions together and with affiliates of GC Advisors and have the same investment objectives and strategies. The risks set out below and incorporated by reference herein, are not the only risks GBDC and GBDC 3 and, following the Merger, the combined company, face. Additional risks and uncertainties not currently known to GBDC or GBDC 3 or that they currently deem to be immaterial also may materially adversely affect their or, following the Merger, the combined company’s, business, financial condition or operating results. If any of the following events occur, GBDC or GBDC 3 or, following the Merger, the combined company’s, business, financial condition or results of operations could be materially adversely affected. See also “Incorporation by Reference for GBDC,” “Incorporation by Reference for GBDC 3” and “Where You Can Find More Information” in this joint proxy statement/prospectus.

Risks Relating to the Merger

Because the market price of GBDC Common Stock will fluctuate, GBDC 3 common stockholders cannot be sure of the market value of the Merger Consideration they will receive until the Closing Date.

The market value of the consideration received by GBDC 3 stockholders may vary from the closing price of GBDC Common Stock on the date the Merger was announced, on the date that this joint proxy statement/prospectus was mailed to stockholders, on the date of the GBDC 3 Special Meeting or the date of the GBDC Special Meeting and on the date the Merger is completed and thereafter. Any change in the market price of GBDC Common Stock prior to completion of the Merger will affect the market value of the Merger Consideration that GBDC 3 stockholders will receive upon completion of the Merger.

Accordingly, at the time of the GBDC 3 Special Meeting, GBDC 3 stockholders will not know or be able to calculate the market price of the Merger Consideration they would receive upon completion of the Merger. Neither GBDC 3 nor GBDC is permitted to terminate the Merger Agreement or resolicit the vote of their respective stockholders solely because of changes in the market price of shares of GBDC Common Stock after the GBDC 3 Special Meeting.

The market price and liquidity of the market for GBDC Common Stock may be significantly affected by numerous factors, some of which are beyond GBDC’s control and may not be directly related to GBDC’s operating performance. These factors include:

See “Special Note Regarding Forward-Looking Statements” for other factors that could cause the market price of GBDC Common Stock to change.

Closing sales prices of GBDC Common Stock as reported on Nasdaq for the fiscal year ended September 30, 2023, ranged from a low of $12.38 to a high of $15.02 and for the period from October 1, 2023 through April 9, 2024 from a low of $14.06 to a high of $16.63. However, historical trading prices are not necessarily indicative of future performance. You should obtain current market quotations for shares of GBDC Common Stock prior to the special meetings.

Sales of shares of GBDC Common Stock after the completion of the Merger may cause the market price of GBDC Common Stock to decline.

For illustrative purposes, based on (a) a GBDC Comon Stock Price greater than GBDC’s December 31, 2023 net asset value per share based on the closing price of GBDC Common Stock of $16.60 as reported on Nasdaq on April 9, 2024 and (b) GBDC 3’s December 31, 2023 net asset value per share, GBDC would issue approximately 91,056,900 shares of GBDC Common Stock pursuant to the Merger Agreement based on outstanding shares of GBDC 3 Common Stock as of December 31, 2023. Former GBDC 3 stockholders may decide not to hold the shares of GBDC Common Stock that they will receive pursuant to the Merger Agreement. Certain GBDC 3 stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of GBDC Common Stock that they receive pursuant to the Merger Agreement. In addition, GBDC stockholders may decide not to hold their shares of GBDC Common Stock after completion of the Merger. In each case, such sales of GBDC Common Stock could have the effect of depressing the market price for GBDC Common Stock and may take place soon after the completion of the Merger.

GBDC 3 stockholders and GBDC stockholders will experience a reduction in percentage ownership and voting power in the combined company as a result of the Merger.

GBDC 3 stockholders will experience a substantial reduction in their respective percentage ownership interests and effective voting power in respect of the combined company relative to their respective percentage ownership interests in GBDC 3 prior to the Merger. Consequently, GBDC 3 stockholders should expect to exercise less influence over the management and policies of the combined company following the Merger than they currently exercise over the management and policies of GBDC 3. GBDC stockholders will experience a substantial reduction in their respective percentage ownership interests and effective voting power in respect of the combined company relative to their respective ownership interests in GBDC prior to the Merger. Consequently, GBDC stockholders should expect to exercise less influence over the management and policies of the combined company following the Merger than they currently exercise over the management and policies of GBDC.

For illustrative purposes, based on (a) a GBDC Common Stock Price greater than GBDC's December 31, 2023 net asset value per share based on the closing price of GBDC Common Stock of $16.60 as reported on Nasdaq on April 9, 2024 and (b) GBDC 3's December 31, 2023 net asset value per share, GBDC would issue approximately 91,056,900 shares of GBDC Common Stock based on outstanding shares of GBDC 3 Common Stock as of December 31, 2023, resulting in pro forma ownership of 65% for current GBDC stockholders and 35% for current GBDC 3 stockholders. Prior to completion of the Merger, subject to certain restrictions in the Merger Agreement, GBDC and GBDC 3 could each issue additional shares of common stock, which would further reduce the percentage ownership of the combined company held by current GBDC stockholders or to be held by GBDC 3 stockholders, as applicable. After completion of the Merger, GBDC may issue additional shares of GBDC Common Stock, including, subject to certain restrictions under the 1940 Act, including stockholder approval of such issuance, at prices below GBDC Common Stock’s then-current net asset value per share. The issuance or sale by GBDC of shares of GBDC Common Stock at a discount to net asset value poses a risk of dilution to GBDC and former GBDC 3 stockholders.

GBDC may be unable to realize the benefits anticipated by the Merger, including estimated cost savings, or it may take longer than anticipated to achieve such benefits.

The realization of certain benefits anticipated as a result of the Merger will depend in part on the integration of GBDC 3’s investment portfolio with GBDC’s and the integration of GBDC 3’s business with GBDC’s business. There can be no assurance that GBDC 3’s investment portfolio or business can be operated profitably or integrated successfully into GBDC’s operations in a timely fashion or at all. The dedication of management resources to such integration may detract attention from the day-to-day business of the combined company, and there can be no assurance that there will not be substantial costs associated with the transition process or that there will not be other material adverse effects as a result of these integration efforts. Such effects, including incurring unexpected costs or delays in connection with such integration and failure of GBDC 3’s investment portfolio to perform as expected, could have a material adverse effect on the financial results of the combined company.

GBDC also expects to achieve certain cost savings from the Merger when the two companies have fully integrated their portfolios. It is possible that the estimates of the potential cost savings could ultimately be incorrect. The cost savings estimates also assume GBDC will be able to combine the operations of GBDC and GBDC 3 in a manner that permits those cost savings to be fully realized. If the estimates turn out to be incorrect or if GBDC is not able to combine GBDC 3’s investment portfolio or business with the operations of GBDC successfully, the anticipated cost savings may not be fully realized or realized at all or may take longer to realize than expected.

The Merger may trigger certain “change of control” provisions and other restrictions in contracts of GBDC, GBDC 3 or their affiliates and the failure to obtain any required consents or waivers could adversely impact the combined company.

Certain agreements of GBDC and GBDC 3 or their affiliates, which may include agreements governing indebtedness of GBDC or GBDC 3, will or may require the consent or waiver of one or more counterparties in connection with the Merger. The failure to obtain any such consent or waiver may permit such counterparties to terminate, or otherwise increase their rights or GBDC’s or GBDC 3’s obligations under, any such agreement because the Merger or other transactions contemplated by the Merger Agreement may violate an anti-assignment, change of control or other similar provision relating to any of such transactions. If this occurs, GBDC may have to seek to replace that agreement with a new agreement or seek an amendment to such agreement. GBDC and GBDC 3 cannot assure you that GBDC will be able to replace or amend any such agreement on comparable terms or at all. If these types of provisions are triggered in agreements governing indebtedness of GBDC or GBDC 3, the lender or holder of the debt instrument could accelerate repayment under such indebtedness and negatively affect GBDC’s business, financial condition, results of operations and cash flows. See Item 1A. Risk Factors “We finance our investments with borrowed money, which will accelerate and increase the potential for gain or loss on amounts invested and may increase the risk of investing in us” in GBDC’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

If any such agreement is material, the failure to obtain consents, amendments or waivers under, or to replace on similar terms or at all, any of these agreements could adversely affect the financial performance or results of operations of the combined company following the Merger, including preventing GBDC from operating a material part of GBDC 3’s business.

In addition, the consummation of the Merger may violate, conflict with, result in a breach of provisions of, or the loss of any benefit under, constitute a default (or an event that, with or without notice or lapse of time or both, would constitute a default) under, or result in the termination, cancellation, acceleration or other change of any right or obligation (including any payment obligation) under, certain agreements of GBDC or GBDC 3. Any such violation, conflict, breach, loss, default or other effect could, either individually or in the aggregate, have a material adverse effect on the financial condition, results of operations, assets or business of the combined company following completion of the Merger.

The opinions delivered to the GBDC Board and the GBDC 3 Board by the respective financial advisors to the GBDC Special Committee and the GBDC 3 Special Committee prior to the signing of the Merger Agreement do not reflect changes in circumstances after the date of the opinions.

The opinions of the financial advisors to the GBDC Special Committee and the GBDC 3 Special Committee, respectively, were delivered to the parties’ respective boards on, and dated, January 16, 2024. Changes in the operations and prospects of GBDC 3 or GBDC, general market and economic conditions and other factors that may be beyond the control of GBDC 3 or GBDC may significantly alter the value of GBDC 3 or the price of shares of GBDC Common Stock by the time the Merger is completed. The opinions do not speak as of the time the Merger will be completed or as of any date other than the date of such opinions. For a description of the opinion that the GBDC 3 Board and the GBDC 3 Special Committee received from the financial advisor to the GBDC 3 Special Committee, see “The Merger— Opinion of the GBDC 3 Special Committee’s Financial Advisor.” For a description of the opinion that the GBDC Board and the GBDC Special Committee received from the financial advisor to the GBDC Special Committee, see “The Merger—Opinion of the GBDC Special Committee’s Financial Advisor.”

If the Merger does not close, neither GBDC nor GBDC 3 will benefit from the expenses incurred in its pursuit.

The Merger may not be completed. If the Merger is not completed, GBDC and GBDC 3 will have incurred substantial expenses for which no ultimate benefit will have been received. Both companies have incurred out-of-pocket expenses in connection with the Merger for investment banking, legal and accounting fees and financial printing and other related charges, much of which will be incurred even if the Merger is not completed.

The termination of the Merger Agreement could negatively impact GBDC 3 and GBDC.

If the Merger Agreement is terminated, there may be various consequences, including:

The Merger Agreement limits the ability of GBDC and GBDC 3 to pursue alternatives to the Merger.

The Merger Agreement contains provisions that limit each of GBDC’s and GBDC 3’s ability to discuss, facilitate or commit to competing third-party proposals to acquire all or a significant part of GBDC or GBDC 3, as applicable. These provisions, which are typical for transactions of this type, might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of GBDC or GBDC 3 from considering or proposing that acquisition even if it were prepared to pay consideration with a higher per share market price than that proposed in the Merger or might result in a potential competing acquiror proposing to pay a lower per share price to acquire GBDC or GBDC 3 than it might otherwise have proposed to pay.

The Merger is subject to closing conditions, including stockholder approvals, that, if not satisfied or waived, will result in the Merger not being completed, which may result in material adverse consequences to GBDC 3’s and GBDC’s business and operations.

The Merger is subject to closing conditions, including certain approvals of GBDC 3’s and GBDC’s respective stockholders that, if not satisfied, will prevent the Merger from being completed. The closing condition that GBDC 3’s stockholders approve the Merger Proposal may not be waived under applicable law and must be satisfied for the Merger to be completed. GBDC 3 currently expects that all directors and executive officers of GBDC 3 will vote their shares of GBDC 3 Common Stock in favor of the proposals presented at the GBDC 3 Special Meeting. If GBDC 3’s stockholders do not approve the Merger Proposal and the Merger is not completed, the resulting failure of the Merger could have a material adverse impact on GBDC 3’s business and operations. The closing condition that GBDC’s stockholders approve the Merger Stock Issuance Proposal may not be waived under applicable law and must be satisfied for the Merger to be completed. GBDC currently expects that all directors and executive officers of GBDC will vote their shares of GBDC Common Stock in favor of the Merger Stock Issuance Proposal. If GBDC’s stockholders do not approve the Merger Stock Issuance Proposal and the Merger is not completed, the resulting failure of the Merger could have a material adverse impact on GBDC’s business and operations. In addition to the required approvals of GBDC 3’s and GBDC’s stockholders, the Merger is subject to a number of other conditions beyond GBDC 3’s and GBDC’s control that may prevent, delay or otherwise materially adversely affect its completion. Neither GBDC 3 nor GBDC can predict whether and when these other conditions will be satisfied.

GBDC and GBDC 3 will be subject to operational uncertainties and contractual restrictions while the Merger is pending.

Uncertainty about the effect of the Merger may have an adverse effect on GBDC and GBDC 3 and, consequently, on the combined company following completion of the Merger. These uncertainties may cause those that deal with GBDC and GBDC 3 to seek to change their existing business relationships with GBDC and GBDC 3, respectively. In addition, the Merger Agreement restricts GBDC and GBDC 3 from taking actions that they might otherwise consider to be in their best interests. These restrictions may prevent GBDC and GBDC 3 from pursuing certain business opportunities that may arise prior to the completion of the Merger. Please see the section entitled “Description of the Merger Agreement—Conduct of Business Pending Completion of the Merger” for a description of the restrictive covenants to which GBDC 3 is subject.

GBDC and GBDC 3 may waive one or more conditions to the Merger without resoliciting stockholder approval.

Certain conditions to GBDC’s and GBDC 3’s obligations to complete the Merger may be waived, in whole or in part, to the extent legally allowed, either unilaterally or by agreement of GBDC and GBDC 3. In the event that any such waiver does not require resolicitation of stockholders, the parties to the Merger Agreement will have the discretion to complete the Merger without seeking further stockholder approval. The conditions requiring the approval of the Merger Stock Issuance Proposal by GBDC's stockholders and the Merger Proposal by GBDC 3's stockholders, however, cannot be waived.

The shares of GBDC Common Stock to be received by GBDC 3 stockholders as a result of the Merger will have different rights associated with them than shares of GBDC 3 Common Stock currently held by them.

The rights associated with GBDC 3 Common Stock are different from the rights associated with GBDC Common Stock. See “Comparison of GBDC and GBDC 3 Stockholder Rights.”

The market price of GBDC Common Stock after the Merger may be affected by factors different from those affecting GBDC Common Stock currently.

The businesses of GBDC and GBDC 3 differ in some respects and, accordingly, the results of operations of the combined company and the market price of GBDC Common Stock after the Merger may be affected by factors different from those currently affecting the independent results of operations of each of GBDC and GBDC 3. These factors include a larger stockholder base and a different capital structure.

Accordingly, the historical trading prices and financial results of GBDC may not be indicative of these matters for the combined company following the Merger. For a discussion of the business of GBDC and of certain factors to consider in connection with its business, see “Business of Golub Capital BDC, Inc.” For a discussion of the business of GBDC 3 and of certain factors to consider in connection with its business, see “Business of Golub Capital BDC 3, Inc.” As described elsewhere in the joint proxy statement/prospectus, the risks associated with an investment in GBDC and GBDC 3 are substantially identical.

COMPARATIVE FEES AND EXPENSES

Comparative Fees and Expenses Relating to the Merger

The following tables are intended to assist you in understanding the costs and expenses that an investor in the common stock of GBDC or GBDC 3 bears directly or indirectly, and, based on the assumptions set forth below, the pro forma costs and expenses estimated to be incurred by the combined company in the first year following the Merger. GBDC and GBDC 3 caution you that some of the percentages indicated in the table below are estimates and may vary. Except where the context suggests otherwise, whenever this document refers to fees or expenses paid or to be paid by “you,” “GBDC” or “GBDC 3,” stockholders will indirectly bear such fees or expenses as investors in GBDC or GBDC 3, as applicable.

GBDC 3’s management fee is calculated at an annual rate equal to 1.375% on the fair value of GBDC 3’s average adjusted gross assets at the end of the two most recently completed calendar quarters (excluding cash and cash equivalents but including assets purchased with borrowed funds and leverage) and is payable quarterly in arrears. For periods prior to the closing of a Liquidity Event, GC Advisors has irrevocably agreed to waive any base management fee in excess of 1.00% of the fair value of GBDC 3’s average adjusted gross assets as calculated in accordance with the GBDC 3 Investment Advisory Agreement. See “Golub Capital BDC 3, Inc. Management Agreements—GBDC 3 Investment Advisory Agreement—Management Fee.” The GBDC 3 management fee referenced in the table above is annualized and based on actual amounts incurred by GBDC 3 during the three months ended December 31, 2023, net of waivers, annualized for a full year.  

The pro forma base management fee has been calculated in accordance with the terms of the New GBDC Investment Advisory Agreement. The base management fee under the New GBDC Investment Advisory Agreement is calculated in the same manner and at the same annual rate (1.0%) as the Current GBDC Investment Advisory Agreement described above. The pro forma base management fee referenced in the table above is annualized and based on actual amounts incurred by GBDC during the three months ended December 31, 2023.

GC Advisors, as collateral manager for the GBDC 2018 Issuer, under a collateral management agreement, or the GBDC 2018 Collateral Management Agreement, is entitled to receive an annual fee in an amount equal to 0.25% of the principal balance of the portfolio loans held by the GBDC 2018 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the GBDC 2018 Collateral Management Agreement, the term "collection period" refers to the period commencing on the third business day prior to the preceding payment date and ending on (but excluding) the third business day prior to such payment date.

GC Advisors, as collateral manager for the GCIC 2018 Issuer, under a collateral management agreement, or the GCIC 2018 Collateral Management Agreement is entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the GCIC 2018 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the 2018 GCIC Collateral Management Agreement, the term “collection period” generally refers to a quarterly period commencing on the day after the end of the prior collection period to the tenth business day prior to the payment date.

The collateral management fees described above are less than the management fee payable under the Current GBDC Investment Advisory Agreement and are paid directly by the GBDC 2018 Issuer and GCIC 2018 Issuer, as applicable, to GC Advisors and are offset against the management fees payable under the Current GBDC Investment Advisory Agreement. Accordingly, the 1.0% base management fee paid by us to GC Advisors under the Current GBDC Investment Advisory Agreement on all of GBDC’s assets (and to be paid by us to GC Advisors under the New GBDC Investment Advisory Agreement) including those indirectly held through each of the GBDC 2018 Issuer and the GCIC 2018 Issuer, is reduced, on a dollar for dollar basis, by an amount equal to the 0.25% and 0.35% fees paid to GC Advisors by the GBDC 2018 Issuer and GCIC 2018 Issuer, respectively.

GC Advisors, as collateral manager for the GBDC 3 2021 Issuer under the GBDC 3 2021 Collateral Management Agreement is entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the GBDC 3 2021 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the GBDC 3 2021 Collateral Management Agreement, the term “collection period” refers to the period commencing on the tenth business day prior to the preceding payment date and ending on (but excluding) the tenth business day prior to such payment date.

GC Advisors, as collateral manager for GBDC 3’s indirect, wholly owned, consolidated subsidiary, Golub Capital BDC 3 ABS 2022-1 LLC, or the GBDC 3 2022 Issuer, under the GBDC 3 2022 Collateral Management Agreement is entitled to receive an annual fee in an amount equal to 0.35% of the principal balance of the portfolio loans held by the GBDC 3 2022 Issuer at the beginning of the collection period relating to each payment date, which is payable in arrears on each payment date. Under the GBDC 3 2022 Collateral Management Agreement, the term “collection period” relating to any payment date, refers to the period commencing on the tenth business day prior to the preceding payment date and ending on (but excluding) the tenth business day prior to such payment date.

Collateral management fees are paid directly by the GBDC 3 2021 Issuer and GBDC 3 2022 Issuer are offset against the management fees payable under the GBDC 3 Investment Advisory Agreement. In addition, the GBDC 3 2021 Issuer and the GBDC 3 2022 Issuer paid Deutsche Bank AG, New York Branch, structuring and placement fees for its services in connection with the structuring of the GBDC 3 2021 Debt Securitization, and the GBDC 3 2022 Debt Securitization, respectively. Term debt securitizations, are also known as collateralized loan obligations, or CLOs. Term debt securitization and asset backed securitizations are a form of secured financing incurred by us, which are consolidated by us and subject to GBDC 3’s overall asset coverage requirement. The GBDC 3 2021 Issuer and GBDC 3 2022 Issuer also agreed to pay ongoing administrative expenses to the trustee, collateral manager, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the GBDC 3 2021 Debt Securitization and GBDC 3 2022 Debt Securitization.

For purposes of this table, the SEC requires that the “Base management fees” percentage be calculated as a percentage of net assets attributable to common stock, rather than total assets, including assets that have been funded with borrowed monies, because common stockholders bear all of this cost. If the base management fee portion of the “Base management fees” percentage were calculated instead in accordance with the terms of the Current GBDC Investment Advisory Agreement, the GBDC 3 Investment Advisory Agreement, and the New GBDC Investment Advisory Agreement, respectively, where, in each case, the base management fee is calculated as a percentage of average adjusted gross assets at the end of the two most recently completed calendar quarters (excluding cash and cash equivalents but including assets purchased with borrowed funds and securitization-related assets and cash collateral on deposit with custodian and adjusted for any share issuances or repurchases during such calendar quarter), GBDC’s, GBDC 3’s and the pro forma combined company’s base management fee percentage would be 1.00%, 1.00% and 1.00%, respectively.

Incentive Fees under the Current GBDC Investment Advisory Agreement : GBDC has structured the calculation of the incentive fee under the Current GBDC Investment Advisory Agreement to include a fee limitation such that no incentive fee will be paid to GC Advisors for any quarter if, after such payment, the cumulative incentive fees paid per share of common stock of GBDC to GC Advisors since the effective date of GBDC’s election to become a business development company would be greater than 20.0% of GBDC’s Cumulative Pre-Incentive Fee Net Income Per Share (as defined below). 

GBDC accomplishes this limitation by subjecting each quarterly incentive fee payable under the Current GBDC Income and Capital Gains Incentive Fee Calculation (as defined below) to a cap (the “Current GBDC Incentive Fee Cap”). The Current GBDC Incentive Fee Cap in any quarter is equal to the difference between (a) 20.0% of Cumulative Pre-Incentive Fee Net Income Per Share and (b) cumulative incentive fees paid per share. To the extent the Current GBDC Incentive Fee Cap is zero or a negative value in any (i) quarterly in arrears or (ii) in the event that the Current GBDC Investment Advisory Agreement is terminated, as of the termination date (each, a “Performance Period”), no incentive fee would be payable in that performance period. “Cumulative Pre-Incentive Fee Net Income Per Share” under the Current GBDC Investment Advisory Agreement is equal to the Pre-Incentive Fee Net Income Per Share (as defined below) for each Performance Period since April 13, 2010 and (b) cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation since April 13, 2010.

“Pre-Incentive Fee Net Investment Income Per Share” under each of the Current GBDC Investment Advisory Agreement and the proposed New GBDC Investment Advisory Agreement is equal to (a) the sum of (i) Pre-Incentive Fee Net Investment Income and (ii) Adjusted Capital Returns (as defined below) for the Performance Period divided by (b) the weighted average number of shares of common stock of GBDC outstanding during the Performance Period. “Adjusted Capital Returns” for any Performance Period shall be the sum of the realized aggregate capital gains, realized aggregate capital losses, aggregate unrealized capital depreciation and aggregate unrealized capital appreciations for such Performance Period; provided that the calculation of realized aggregate capital gains, realized aggregate capital losses, aggregate unrealized capital depreciation and aggregate unrealized capital appreciation shall not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation resulting solely from the purchase accounting for any premium or discount paid for the acquisition of assets in a merger. “Cumulative Incentive Fees Paid Per Share” is equal to the sum of Incentive Fees Paid Per Share” for any Performance Period is equal to the Incentive Fees accrued and/or payable by GBDC for such Performance Period divided by the weighted average number of shares of common stock of GBDC outstanding during such Performance Period.

The income and capital gains incentive fee calculation under the Current GBDC Investment Advisory Agreement (the “Current GBDC Income and Capital Gains Incentive Fee Calculation”) and the New GBDC Investment Advisory Agreement has two parts. The income component is calculated each Performance Period in arrears based on GBDC’s Pre-Incentive Fee Net Investment Income for the immediately preceding Performance Period, calculated as described above. Because of the structure of the income component, it is possible that an incentive fee may be calculated under this formula with respect to a period in which GBDC has incurred a loss. For example, if GBDC receives Pre-Incentive Fee Net Investment Income in excess of the hurdle rate (as defined below) for a calendar quarter, the income component will result in a positive value and an incentive fee will be paid subject to the Current GBDC Incentive Fee Cap.

Under the Current GBDC Investment Advisory Agreement and the New GBDC Investment Advisory Agreement, “Pre-Incentive Fee Net Investment Income” means, with respect to any Performance Period, interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that GBDC receives from portfolio companies but excluding fees for providing managerial assistance) accrued during such period, minus operating expenses for such period (including the Base Management Fee, taxes, any expenses payable under the Current GBDC Investment Advisory Agreement and the GBDC Administration Agreement, and any interest expense and dividends paid on any outstanding preferred stock, but excluding the Incentive Fee, if any). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with payment in kind (“PIK”) interest, preferred stock with PIK dividends and zero coupon securities, accrued income that GBDC has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation or any amortization or accretion of any purchase premium or purchase discount to interest income resulting solely from the purchase accounting for any premium or discount paid for the acquisition of assets in a merger.

Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of GBDC’s net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 2.0% quarterly. If market interest rates rise, GBDC may be able to invest its funds in debt instruments that provide for a higher return, which would increase GBDC’s Pre-Incentive Fee Net Investment Income and make it easier for GC Advisors to surpass the fixed hurdle rate and receive an incentive fee based on such net investment income. GBDC’s Pre-Incentive Fee Net Investment Income used to calculate this part of the incentive fee is also included in the amount of GBDC’s total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds and securitization-related assets and cash collateral on deposit with custodian) used to calculate the 1.0% base management fee, which fee is payable on all of GBDC’s assets managed by GC Advisors.

GBDC calculates the income component of the Current GBDC Income and Capital Gains Incentive Fee Calculation with respect to its Pre-Incentive Fee Net Investment Income Performance Period, in arrears, as follows:

The sum of these calculations yields the “GBDC Income Incentive Fee.” This amount is appropriately adjusted for any share issuances or repurchases during the Performance Period (based on the actual number of days elapsed relative to the total number of days in such Performance Period).

The second part of the GBDC Income and Capital Gain Incentive Fee Calculation (the “Capital Gain Incentive Fee”) equals (a) 20.0% of GBDC’s Capital Gain Incentive Fee Base, if any, calculated in arrears as of the end of each calendar year (or upon termination of the Current GBDC Investment Advisory Agreement, as of the termination date), commencing with the calendar year ending December 31, 2010, less (b) the aggregate amount of any previously paid Capital Gain Incentive Fees. GBDC’s “Capital Gain Incentive Fee Base” under the Current GBDC Investment Advisory Agreement equals (1) the sum of (i) GBDC’s realized capital gains, if any, on a cumulative positive basis from April 13, 2010 through the end of each calendar year (or upon termination of the Current GBDC Investment Advisory Agreement), (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred financing costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.

Incentive Fees under the GBDC 3 Investment Advisory Agreement : The incentive fee in the GBDC 3 Investment Advisory Agreement (the “GBDC 3 Incentive Fee”) is comprised of three parts: (1) the income component, or the “GBDC 3 Income Incentive Fee”, (2) the capital gains component, or the “GBDC 3 Capital Gain Incentive Fee”, and (3) the subordinated liquidation incentive component, or the “GBDC Subordinated Liquidation Incentive Fee”, and are collectively referred to as the “GBDC 3 Incentive Fee.”

The GBDC 3 Income and GBDC 3 Capital Gain Incentive Fee Calculation has two parts: the GBDC 3 Income Incentive Fee component and the GBDC 3 Capital Gain Incentive Fee component. The GBDC 3 Income Incentive Fee component is calculated quarterly in arrears based on the GBDC 3 Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter.

GBDC 3 Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of GBDC 3’s net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) at the end of the immediately preceding calendar quarter, is compared to a fixed “hurdle rate” of 1.5% quarterly. If market interest rates rise, GBDC 3 may have the ability to invest funds in debt instruments that provide for a higher return, which would increase the GBDC 3 Pre-Incentive Fee Net Investment Income and make it easier for GC Advisors to surpass the fixed hurdle rate and receive a GBDC 3 Income Incentive Fee. GBDC 3 Pre-Incentive Fee Net Investment Income used to calculate this part of the GBDC 3 Incentive Fee is also included in the amount of GBDC 3’s total assets (excluding cash and cash equivalents but including assets purchased with borrowed funds and leverage) used to calculate the base management fee.

GBDC 3 calculates the GBDC 3 Income Incentive Fee component of the GBDC 3 Income and GBDC 3 Capital Gains Incentive Fee Calculation with respect to the GBDC 3 Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

The sum of these calculations yields the “GBDC 3 Income Incentive Fee”. This amount is appropriately adjusted for any share issuances or repurchases during the quarter. For periods prior to the closing of a Liquidity Event, GC Advisors agreed to waive that portion of the GBDC 3 Income Incentive Fee calculated in excess of the GBDC 3 Income Incentive Fee calculated with respect to the GBDC 3 Pre-Incentive Fee Net Investment Income quarterly, in arrears, as follows:

The GBDC 3 Capital Gain Incentive Fee equals (a) 20.0% of the GBDC 3 Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or upon termination of the GBDC 3 Investment Advisory Agreement, as of the termination date), commencing with the calendar year ending December 31, 2017, less (b) the aggregate amount of any previously paid GBDC 3 Capital Gain Incentive Fees. The “GBDC 3 Capital Gain Incentive Fee Base” equals (1) the sum of (A) GBDC 3’s realized capital gains, if any, on a cumulative positive basis from September 29, 2017 through the end of each calendar year, (B) all realized capital losses on a cumulative basis and (C) all unrealized capital depreciation on a cumulative basis, less (2) GBDC 3’s unamortized deferred financing costs as of the date of calculation, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis.

Prior to the closing of a Liquidity Event, GC Advisors has agreed to waive that portion of the GBDC 3 Capital Gain Incentive Fee, calculated as described above, in excess of 15.0% of the GBDC 3 Capital Gain Incentive Fee Base, provided that any amounts so waived shall be deemed to have been paid to GC Advisors for purposes of determining the GBDC 3 Capital Gain Incentive Fee payable after the closing of a Liquidity Event.

Realized capital gains and losses include gains and losses on investments, foreign currencies, including gains and losses on derivative contracts and any income tax related to cumulative aggregate realized gains and losses. There was no GBDC 3 Capital Gain Incentive Fee payable as calculated under the GBDC 3 Investment Advisory Agreement (as described above) for the three months ended December 31, 2023 or for the years ended September 30, 2023 and 2022. However, in accordance with U.S. generally accepted accounting principles, or GAAP, GBDC 3 is required to accrue for a capital gain incentive fee on a quarterly basis and are further required to include the aggregate unrealized capital appreciation on investments when calculating the capital gain incentive fee accrual, as if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the GBDC 3 Investment Advisory Agreement. If the GBDC 3 Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized appreciation, is positive at the end of a period, then GAAP requires GBDC 3 to accrue a capital gain incentive fee equal to 15.0% of such amount prior to the closing of a Liquidity Event (20.0% following the closing of a Liquidity Event), less the aggregate amount of the actual Capital Gain Incentive Fees paid or capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP for any capital gain incentive fee payable in a given period may result in additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. There can be no assurance that such unrealized capital appreciation will be realized in the future. From inception through September 30, 2023, GBDC 3 has not made any GBDC 3 Capital Gain Incentive Fee payments. For each of the three months ended December 31, 2023 and for the year ended September 30, 2023, GBDC 3 did not accrue a capital gain incentive fee under GAAP. There was no cumulative accrual for capital gain incentive fee, net of waiver under GAAP as of both December 31, 2023 and September 30, 2023.

The third part of the GBDC 3 Incentive Fee, which GBDC 3 refers to as the GBDC 3 Subordinated Liquidation Incentive Fee, equals 15.0% of the net proceeds from a liquidation of GBDC 3 in excess of adjusted capital, as calculated immediately prior to liquidation. For purposes of this calculation, (a) “liquidation” includes any merger of GBDC 3 common stock with another entity or the acquisition of all or substantially all of the shares of GBDC 3 common stock in a single or series of related transactions and (b) “adjusted capital” means GBDC 3’s net asset value calculated immediately prior to liquidation in accordance with GAAP less unrealized capital appreciation that would have been subject to the GBDC 3 Capital Gain Incentive Fee had capital gain been recognized on the transfer of such assets in the liquidation. The GBDC 3 Investment Advisory Agreement provides that no GBDC 3 Subordinated Liquidation Incentive Fee shall be payable for any liquidation that occurs more than six months after the date of an initial public offering of GBDC 3 common stock or a listing of GBDC 3 common stock on a national securities exchange. For periods prior to the date of the closing of a Liquidity Event (as defined below), GC Advisors has agreed to waive the GBDC 3 Subordinated Liquidation Incentive Fee.

On January 16, 2024, GC Advisors entered into a waiver letter agreement (the “GBDC 3 Waiver”) to the GBDC 3 Investment Advisory Agreement, pursuant to which GC Advisors agreed to irrevocably waive any Subordinated Liquidation Incentive Fee (as defined in the GBDC 3 Investment Advisory Agreement) that would otherwise be payable in connection with the transactions contemplated by the Merger Agreement.

GBDC 3 defined a “Liquidity Event” to mean the earlier of (1) the date of the pricing of an initial public offering or listing on a national securities exchange of GBDC 3’s securities, (2) a distribution to GBDC 3’s stockholders of either (a) cash proceeds from an orderly liquidation of GBDC 3’s investments or (b) securities or other assets of GBDC 3’s as a distribution-in-kind, or (3) a sale of all or substantially all of GBDC 3’s assets to, or other liquidity event with, an entity for consideration of either cash and/or publicly listed securities of the acquirer.

Pursuant to the terms of the Merger Agreement, the GBDC 3 Investment Advisory Agreement will terminate immediately following the Initial Merger and prior to the Second Merger. As a result, GBDC 3 would incur a GBDC 3 Capital Gain Incentive Fee to the extent payable under the terms of the GBDC 3 Investment Advisory Agreement as of such termination. Assuming the Initial Merger and Second Merger had been completed on December 31, 2023 (the date of the most recent financial statements of GBDC 3) and the GBDC 3 Investment Advisory Agreement were terminated as such date and based on financial statements as of such date for GBDC 3, GBDC 3 would not owe a payment to GC Advisors for a Capital Gain Incentive Fee pursuant to the terms of the GBDC 3 Investment Advisory Agreement. See “Accounting Treatment of the Merger.”

GBDC 3 has structured the calculation of the GBDC 3 Incentive Fee to include a fee limitation such that the GBDC 3 Income Incentive Fee and the GBDC 3 Capital Gain Incentive Fee will not be paid at any time if, after such payment, the cumulative GBDC 3 Income Incentive Fees and GBDC 3 Capital Gain Incentive Fees paid to date would exceed an incentive fee cap, or the GBDC 3 Incentive Fee Cap. For periods ending on or prior to the date of the closing of a Liquidity Event, the GBDC 3 Incentive Fee Cap in any quarter is equal to the difference between (a) 15.0% of GBDC 3 Cumulative Pre-Incentive Fee Net Income and (b) cumulative incentive fees of any kind paid to GC Advisors by GBDC 3 since September 29, 2017. For periods beginning after the date of the closing of a Liquidity Event, the GBDC 3 Incentive Fee Cap in any quarter will be equal to the difference, if positive, between (a) the sum of (i) 20.0% of GBDC 3 Cumulative Pre-Incentive Fee Net Income for the period beginning on the date immediately following the closing of a Liquidity Event and (ii) 15.0% of GBDC 3 Cumulative Pre-Incentive Fee Net Income for the period from September 29, 2017 and ending on the date of the closing of a Liquidity Event and (b) cumulative GBDC 3 Income Incentive Fees and GBDC 3 Capital Gain Incentive Fees paid to GC Advisors by GBDC 3 since September 29, 2017. To the extent the GBDC 3 Incentive Fee Cap is zero or a negative value in any quarter, no incentive fee would be payable in that quarter. “GBDC 3 Cumulative Pre-Incentive Fee Net Income” is equal to the sum of (a) GBDC 3 Pre-Incentive Fee Net Investment Income (as defined below) for each period since September 29, 2017 and (b) cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, cumulative aggregate unrealized capital depreciation and cumulative aggregate unrealized capital appreciation since September 29, 2017. “GBDC 3 Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that GBDC 3 receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the calendar quarter (including the base management fee, taxes, any expenses payable under the GBDC 3 Investment Advisory Agreement and the GBDC 3 Administration Agreement, any expenses of securitizations and any interest expense and dividends paid on any outstanding preferred stock to the extent such amounts are supported by GBDC 3’s taxable earnings, but excluding the incentive fee). GBDC 3 Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends, and zero coupon securities, accrued income that GBDC 3 has not yet received in cash. GC Advisors does not return to us amounts paid to it on accrued income that GBDC 3 has not yet received in cash if such income is not ultimately received by us in cash. If GBDC 3 does not ultimately receive income, a loss would be recognized, reducing future fees.

If, for any relevant period, the GBDC 3 Incentive Fee Cap calculation results in GBDC 3 paying less than the amount of the GBDC 3 Income Incentive Fee and the GBDC 3 Capital Gain Incentive Fee calculated pursuant to the GBDC 3 Income and GBDC 3 Capital Gain Incentive Fee Calculation, then the difference between (a) the sum of the GBDC 3 Income Incentive Fee and the GBDC 3 Capital Gain Incentive Fee and (b) the GBDC 3 Incentive Fee Cap will not be paid by us, and will not be received by GC Advisors as an GBDC 3 Incentive Fee either at the end of such relevant period or at the end of any future period. For the avoidance of doubt, the GBDC 3 stockholders benefit from a reduction in the amount of GBDC 3 Incentive Fees that GBDC 3 pays, and that the GBDC 3 stockholders pay indirectly, equal to the sum of the differences, if any, between (a) the sum of the GBDC 3 Income Incentive Fee and the GBDC 3 Capital Gain Incentive Fee and (b) the GBDC 3 Incentive Fee Cap. 

For periods ended on or prior to September 30, 2023, GBDC 3 deposited one-third of each GBDC 3 Incentive Fee payment into an escrow account (the “Escrow Account”) administered by U.S. Bank National Association (the “Escrow Agent”). Assets in the Escrow Account were to be held by the Escrow Agent until the closing of a Liquidity Event. If no Liquidity Event occurred prior to October 2, 2023, the Escrow Agent will return all assets in the Escrow Account to GBDC 3 for the benefit of GBDC 3’s stockholders. For the years ended September 30, 2023, 2022 and 2021, GBDC 3 deposited approximately $7.0 million, $3.4 million and $2.5 million, respectively, into the Escrow Account. As of September 30, 2023, GBDC 3 has made deposits totaling $14.9 million in the Escrow Account. On October 2, 2023, the Escrow Agent returned $14.9 million of deposits held in the Escrow Account to GBDC 3 for the benefit of shareholders in accordance with the GBDC 3 Investment Advisory Agreement.

On December 7, 2023, GC Advisors unilaterally agreed to extend the term of the incentive fee payment escrow under the terms of the GBDC 3 Investment Advisory Agreement (the “Escrow Waiver Letter”). In accordance with the Escrow Waiver Letter, prior to the closing of a Liquidity Event, GBDC 3 will deposit one-third of each Income Incentive Fee and Capital Gain Incentive Fee payment into an escrow account (the “New Escrow Account”) to be administered by UMB Bank, National Association (the “New Escrow Agent”). Assets in the New Escrow Account will be held by the New Escrow Agent until the closing of a Liquidity Event at which time the New Escrow Agent will release the assets to GC Advisors. If no Liquidity Event occurs prior to October 2, 2025, the New Escrow Agent will return all assets in the New Escrow Account to GBDC 3 for the benefit of GBDC 3’s stockholders. For the three months ended December 31, 2023, GBDC 3 deposited $2.2 million into the New Escrow Account.

Incentive Fees under the New GBDC Investment Advisory Agreement: Following completion of the Merger, the combined company will be externally managed by GC Advisors. The pro forma incentive fees have been calculated in a manner consistent with the terms and conditions of the New GBDC Investment Advisory Agreement. The incentive fee rates under the New GBDC Investment Advisory Agreement (15.0%) are lower than the Current GBDC Investment Advisory Agreement and equal to the incentive fee rate under the Current GBDC 3 Investment Advisory Agreement, in GBDC 3’s case, net of the waivers described above. The hurdle rate under the New GBDC Investment Advisory Agreement (2.0% quarterly (8.0% annualized)) is the same as the hurdle rate as under the Current GBDC Investment Advisory Agreement, which is higher than the hurdle rate under the GBDC 3 Investment Advisory Agreement (1.5% quarterly (6.0% annualized)).

The incentive fee in the New GBDC Investment Advisory Agreement (the “Pro Forma Incentive Fee”) will be comprised of two parts: the “New Income Incentive Fee” component and the “New Capital Gain Incentive Fee” component. The calculation of the Pro Forma Incentive Fees (the “New Income and New Capital Gains Incentive Fee Calculation”) would be calculated for each quarter as set forth below.

Pursuant to the New GBDC Investment Advisory Agreement and, for the Waiver Period, pursuant to the Waiver, the second part of the New Income and New Capital Gains Incentive Fee Calculation, or the “New Capital Gain Incentive Fee,” equals (a) 15.0% of GBDC’s New Capital Gain Incentive Fee Base (as defined below), if any, calculated in arrears as of the end of each calendar year (or upon termination of the New GBDC Investment Advisory Agreement, as of the termination date), commencing with the calendar year ending December 31, 2010, less (b) the aggregate amount of any previously paid New Capital Gain Incentive Fees. GBDC’s “New Capital Gain Incentive Fee Base” equals (1) the sum of (i) its realized capital gains, if any, on a cumulative positive basis from April 13, 2010 through the end of each calendar year, (ii) all realized capital losses on a cumulative basis and (iii) all unrealized capital depreciation on a cumulative basis less (2) all unamortized deferred financing costs, if and to the extent such costs exceed all unrealized capital appreciation on a cumulative basis. Finally, pursuant to the New GBDC Investment Advisory Agreement and, for the Waiver Period, pursuant to the Waiver, the calculation of the incentive fee is subject to a fee limitation such that, under the New GBDC Investment Advisory Agreement, an incentive fee for any Performance Period is subject to a cap (the “New Incentive Fee Cap”). The New Incentive Fee Cap in any Performance Period shall be equal to the difference between (a) the sum of (x) 15.0% of Cumulative Pre-Incentive Fee Net Income Per Share (as defined below) for each Performance Period ending after the date of the Waiver and (y) 20.0% of Cumulative Pre-Incentive Fee Net Income Per Share for each Performance Period ended prior to the date of the Waiver and (b) Cumulative Incentive Fees Paid Per Share (as defined below). To the extent the Incentive Fee Cap is zero or a negative value in any Performance Period, no Incentive Fee shall be payable in that quarter. “Cumulative Pre-Incentive Fee Net Income Per Share” shall be equal to the “Pre-Incentive Fee Net Income Per Share” (as defined below) for each Performance Period since April 13, 2010, the effective date of GBDC’s election to be treated as a business development company. “Pre-Incentive Fee Net Income Per Share” shall be equal to (a) the sum of (i) Pre-Incentive Fee Net Investment Income and (ii) Adjusted Capital Returns (as defined below) for the Performance Period divided by (b) the weighted average number of shares of common stock of GBDC outstanding during such quarter. “Adjusted Capital Returns” for any quarter shall be the sum of the realized aggregate capital gains, realized aggregate capital losses, aggregate unrealized capital depreciation and aggregate unrealized capital appreciation for such Performance Period; provided that the calculation of realized aggregate capital gains, realized aggregate capital losses, aggregate unrealized capital depreciation and aggregate unrealized capital appreciation shall not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation resulting solely from the purchase accounting for any premium or discount paid for the acquisition of assets in a merger. “Cumulative Incentive Fees Paid Per Share” is equal to the sum of Incentive Fees Paid Per Share for each quarter since April 13, 2010. “Incentive Fees Paid Per Share” for any quarter is equal to the incentive fees accrued and/or payable by GBDC for such Performance Period divided by the weighted average number of shares of common stock of GBDC outstanding during such Performance Period.

Interest payments on borrowed funds for GBDC 3 represents GBDC 3’s the annualized cost of funds on its outstanding indebtedness as of December 31, 2023, which consisted of $512.5 million of indebtedness outstanding under revolving credit facilities and $775 million in notes issued through a term debt securitization. For the three months ended December 31, 2023, the annualized cost of funds for GBDC 3’s total debt outstanding, which includes all interest and amortization of debt issuance costs on its term debt securitization, debt was 8.4%. Debt issuance costs represent fees and other direct incremental costs incurred in connection with GBDC 3’s debt securitizations. These fees include a structuring and placement fee paid to Deutsche Bank Securities Inc. for its services in connection with the initial structuring of the GBDC 3 2021 Debt Securitization and the GBDC 3 2022 Debt Securitization and legal fees, accounting fees, rating agency fees and all other costs associated with the GBDC 3 2021 Debt Securitization and the GBDC 3 2022 Debt Securitization.

Interest payments on borrowed funds for the Pro Forma column are based on the estimates for GBDC and GBDC 3 described above for the combined company following the Merger.

Example

The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in GBDC, GBDC 3 or the combined company following the Merger on a pro forma basis. In calculating the following expense amounts, each of GBDC and GBDC 3 has assumed that it would have no additional leverage and that its annual operating expenses would remain at the levels set forth in the tables above. Calculations for the pro forma combined company following the Merger assume that the Merger closed on December 31, 2023 and that the leverage and operating expenses of GBDC and GBDC 3 remain at the levels set forth in the tables above Transaction expenses related to the Merger are not included in the following examples.

The foregoing tables are intended to assist you in understanding the various costs and expenses that an investor in GBDC, GBDC 3 or, following the Merger, the combined company will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, performance of GBDC, GBDC 3, and the combined company will vary and may result in a return greater or less than 5%. The incentive fee under each of the Current GBDC Investment Advisory Agreement, the GBDC 3 Investment Advisory Agreement and the New GBDC Investment Advisory Agreement, which, assuming a 5% annual return, would either not be payable or have an immaterial impact on the expense amounts shown above, is not included in the example. Under each of the Current GBDC Investment Advisory Agreement, the GBDC 3 Investment Advisory Agreement and the New GBDC Investment Advisory Agreement, no incentive fee would be payable if GBDC, GBDC 3 or the combined company, as applicable, has a 5% annual return. If sufficient returns are achieved on investments, including through the realization of capital gains, to trigger an incentive fee of a material amount, expenses, and returns to investors, would be higher. The example assumes that all dividends and other distributions are reinvested at net asset value. Under certain circumstances, reinvestment of dividends and other distributions under the relevant dividend reinvestment plan may occur at a price per share that differs from net asset value. See “Golub Capital BDC, Inc. Dividend Reinvestment Plan” and “Golub Capital BDC 3, Inc. Dividend Reinvestment Plan” for additional information regarding GBDC’s and GBDC 3’s dividend reinvestment plan, respectively.

The example and the expenses in the table above should not be considered a representation of GBDC’s, GBDC 3’s, or, following the Merger, the combined company’s, future expenses, and actual expenses may be greater or less than those shown.  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus, including the documents incorporated by reference herein, contains statements that constitute forward-looking statements, which relate to GBDC, GBDC 3 or, following the Merger, the combined company, regarding future events or the future performance or future financial condition of GBDC, GBDC 3 or, following the Merger, the combined company. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about GBDC, GBDC 3 or, following the Merger, the combined company, their industry and their respective beliefs and assumptions. The forward-looking statements contained in this joint proxy statement/prospectus involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including:

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The forward-looking statements contained in this joint proxy statement/prospectus involve risks and uncertainties. Actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth as “Risk Factors”, in “Item 1A. Risk Factors” in Part I of GBDC’s Annual Report on Form 10-K (File No. 814-00794) for the fiscal year ended September 30, 2023, in “Item 1A. Risk Factors” in Part I of GBDC 3’s Annual Report on Form 10-K (File No. 814-01244) for the fiscal year ended September 30, 2023 and elsewhere in this joint proxy statement/prospectus.

The forward-looking statements included in this joint proxy statement/prospectus and documents incorporated by reference into this joint proxy statement/prospectus are based on information available on the date of this joint proxy statement/prospectus. Actual results could differ materially from those anticipated in any forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that GBDC or GBDC 3 may make directly to you or through reports that each has filed or in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. This joint proxy statement/prospectus and documents incorporated by reference into this joint proxy statement/prospectus contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. GBDC and GBDC 3 have not independently verified such statistics or data.

You should understand that, under Sections 27A(b)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E(b)(2)(B) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in connection with any offering of securities pursuant to this joint proxy statement/prospectus, any prospectus supplement or in periodic reports GBDC files under the Exchange Act. 

THE GBDC SPECIAL MEETING

Date, Time and Place of the GBDC Special Meeting

The GBDC Special Meeting will be held to be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC2024SM. This joint proxy statement/prospectus will be sent to GBDC stockholders of record as of April 5, 2024 on or about April 19, 2024.

Purpose of the GBDC Special Meeting

At the GBDC Special Meeting, GBDC stockholders will be asked to approve the Merger Stock Issuance Proposal.

The GBDC Board, including, after separate meetings and discussion, all of the GBDC Independent Directors, has unanimously approved the Merger Agreement, including the Merger and the related transactions, and the New GBDC Investment Advisory Agreement. The GBDC Board, including each of the GBDC Independent Directors, unanimously recommends that GBDC stockholders vote “FOR” the Merger Stock Issuance Proposal

Record Date

GBDC stockholders may vote their shares at the GBDC Special Meeting only if they were a stockholder of record at the close of business on April 5, 2024. There were 171,517,307 shares of the GBDC Common Stock outstanding on the GBDC Record Date. Each share of common stock is entitled to one vote.

Quorum and Adjournments

A quorum must be present at the GBDC Special Meeting for any business to be conducted. The presence at the GBDC Special Meeting, virtually or by proxy, of the holders of a majority of the shares of common stock outstanding on the GBDC Record Date will constitute a quorum. Shares held by a broker or other nominee for which the nominee has not received voting instructions from the record holder and does not have discretionary authority to vote the shares on non-routine proposals (which are considered “broker non-votes” with respect to such proposals) will be treated as shares present for quorum purposes. If there are not enough votes for a quorum, the presiding officer or GBDC stockholders who are represented virtually or by proxy may vote to adjourn the GBDC Special Meeting to permit the further solicitation of proxies.

If there appears not to be enough votes for a quorum or to approve the Merger Stock Issuance Proposal at the GBDC Special Meeting, the presiding officer or holders of a majority of the votes entitled to be cast by the GBDC stockholders entitled to vote thereat, present virtually or represented by proxy, shall have the power to adjourn the GBDC Special Meeting from time to time without notice other than announcement at the GBDC Special Meeting.

A GBDC stockholder vote may be taken on any of the proposals in this joint proxy statement/prospectus prior to any such adjournment if there are sufficient votes for approval of such proposal.

Broker Non-Votes

Broker non-votes are described as votes cast by a broker or other nominee on behalf of a beneficial holder who does not provide explicit voting instructions to such broker or nominee and who does not attend the meeting. The Merger Stock Issuance Proposal is a non-routine matter for GBDC. As a result, if a GBDC stockholder holds shares in “street name” through a broker, bank or other nominee, such broker, bank or nominee will not be permitted to exercise voting discretion with respect to the Merger Stock Issuance Proposal. Abstentions will have no effect on the outcome of the Merger Stock Issuance Proposal. Since GBDC stockholders will only vote on the Merger Stock Issuance Proposal, there will not be any broker non-votes.

Vote Required

Each share of GBDC Common Stock held by a holder of record as of the GBDC Record Date has one vote on each matter considered at the GBDC Special Meeting. 

The Merger Stock Issuance Proposal

The approval of the Merger Stock Issuance Proposal requires the affirmative vote of at least a majority of the votes cast by holders of GBDC Common Stock at a meeting at which a quorum is present. Abstentions and will have no effect on the outcome of the Merger Stock Issuance Proposal. Since GBDC stockholders will only vote on the Merger Stock Issuance Proposal, there will not be any broker non-votes. Proxies received will be voted “FOR” the Merger Stock Issuance Proposal, unless GBDC stockholders designate otherwise.

Under the terms of the Merger Agreement, each GBDC 3 stockholder will have the right to receive, for each share of GBDC 3 Common Stock, a number of shares of GBDC Common Stock equal to the Exchange Ratio. The number of shares of GBDC Common Stock to be received will be subject to adjustment if, between the date of the Merger Agreement and the effective time of the Merger, the respective outstanding shares of GBDC Common Stock or GBDC 3 Common Stock have increased or decreased or changed into or been exchanged for a different number or kind of shares or securities, in each case, as a result of any reclassification, recapitalization, stock split, reverse stock split, split-up, combination or exchange of shares, or if a stock dividend or dividend payable in any other securities is declared with a record date within such period.

Voting of Management

On the GBDC Record Date, GBDC’s officers and directors owned and were entitled to vote 4,718,831 shares of GBDC Common Stock, representing less than 2.8% of the outstanding shares of GBDC Common Stock on the GBDC Record Date. None of GBDC’s officers or directors has entered into any voting agreement relating to the Merger.

Voting of Proxies

GBDC encourages GBDC stockholders to vote their shares, either by voting virtually at the GBDC Special Meeting or by voting by proxy, which means that the GBDC stockholders authorize someone else to vote their shares. Shares represented by duly executed proxies will be voted in accordance with the GBDC stockholder’s instructions. If GBDC stockholders execute a proxy without specifying their voting instructions, such GBDC stockholders’ shares will be voted in accordance with the GBDC Board’s recommendation. If any other business is brought before the GBDC Special Meeting, GBDC stockholders’ shares will be voted at the GBDC Board’s discretion unless the GBDC stockholders specifically state otherwise on their proxies.

GBDC stockholders may revoke a proxy at any time before it is exercised by notifying GBDC’s Secretary in writing, by submitting a properly executed, later-dated proxy, or by voting virtually at the GBDC Special Meeting. Any GBDC stockholder entitled to vote at the GBDC Special Meeting may attend the GBDC Special Meeting and vote virtually, whether or not such GBDC stockholder has previously voted his or her shares via proxy or wishes to change a previous vote.

A GBDC stockholder may vote virtually at the GBDC Special Meeting or by proxy in accordance with the instructions provided below. A GBDC stockholder may also authorize a proxy by telephone or through the Internet using the toll-free telephone numbers or web address printed on your proxy card. Authorizing a proxy by telephone or through the Internet requires you to input the control number located on your proxy card. After inputting the control number, you will be prompted to direct your proxy to vote on each proposal. You will have an opportunity to review your directions and make any necessary changes before submitting your directions and terminating the telephone call or Internet link.

Important notice regarding the availability of proxy materials for the GBDC Special Meeting. GBDC’s joint proxy statement/prospectus and the proxy card are available at www.proxyvote.com.

Revocability of Proxies

Any proxy authorized pursuant to this solicitation may be revoked by notice from the person giving the proxy at any time before it is exercised. A revocation may be effected by resubmitting voting instructions via the Internet voting site, by telephone, by obtaining and properly completing another proxy card that is dated later than the original proxy card and returning it, by mail, in time to be received before the GBDC Special Meeting, by attending the GBDC Special Meeting and voting virtually, or by a notice, provided in writing and signed by the GBDC Stockholder, delivered to GBDC’s Secretary on any business day before the date of the GBDC Special Meeting.

Solicitation of Proxies

GBDC and GBDC 3 will equally bear the cost of preparing, printing and mailing this joint proxy statement/prospectus and the applicable accompanying Notice of Special Meeting of Stockholders and proxy card. GBDC and GBDC 3 intend to use the services of GC Advisors to aid in the distribution and collection of proxy votes. GBDC and GBDC 3 expect to pay market rates for such services. No additional compensation will be paid to directors, officers or regular employees for such services.

For more information regarding expenses related to the Merger, see “Questions and Answers about the Merger—Who is responsible for paying the expenses relating to completing the Merger?”

Appraisal Rights

GBDC stockholders do not have the right to exercise appraisal rights with respect to any matter to be voted upon at the GBDC Special Meeting. 

THE GBDC 3 SPECIAL MEETING

Date, Time and Place of the GBDC 3 Special Meeting

The GBDC 3 Special Meeting to be held virtually on May 29, 2024 at 9:00 a.m., Eastern Time, at the following website: www.virtualshareholdermeeting.com/GBDC32024SM. This joint proxy statement/prospectus will be sent to GBDC 3 stockholders of record as of April 5, 2024 on or about April 19, 2024.

Purpose of the GBDC 3 Special Meeting

At the GBDC 3 Special Meeting, GBDC 3 stockholders will be asked to approve the Merger Proposal.

The GBDC 3 Board, including, after separate meetings and discussion, the GBDC 3 Independent Directors, has unanimously approved the Initial Merger and the Merger Agreement and recommends that GBDC 3 stockholders vote “FOR” the Merger Proposal.

Record Date

GBDC 3 stockholders may vote their shares at the GBDC 3 Special Meeting only if they were a stockholder of record at the close of business on April 5, 2024. There were 100,105,100.915 shares of GBDC 3 Common Stock outstanding on the GBDC 3 Record Date. Each share of GBDC 3 Common Stock is entitled to one vote.

Quorum and Adjournments

A quorum must be present at the GBDC 3 Special Meeting for any business to be conducted. The presence at the GBDC 3 Special Meeting, virtually or by proxy, of stockholders entitled to cast a majority of votes entitled to be cast at the GBDC 3 Special Meeting will constitute a quorum. If there are not enough votes for a quorum, the chairman of the meeting may adjourn the GBDC 3 Special Meeting to permit the further solicitation of proxies.

If there appear not to be enough votes to approve the Merger Proposal at the GBDC 3 Special Meeting, the chairman of the GBDC 3 Special Meeting shall have the power to conclude or adjourn the GBDC 3 Special Meeting from time to time to a date not more than 120 days after the original record date without notice other than announcement at the GBDC 3 Special Meeting.

A GBDC 3 stockholder vote may be taken on any of the proposals in this joint proxy statement/prospectus prior to any such adjournment if there are sufficient votes for approval of such proposal.

Broker Non-Votes

Broker non-votes are described as votes cast by a broker or other nominee on behalf of a beneficial holder who does not provide explicit voting instructions to such broker or nominee and who does not attend the meeting. The Merger Proposal is a non-routine matter for GBDC 3. As a result, if a GBDC 3 stockholder holds shares in “street name” through a broker, bank or other nominee, such broker, bank or nominee will not be permitted to exercise voting discretion with respect to the Merger Proposal. Abstentions will not count as affirmative votes cast and will therefore have the same effect as votes “against” the Merger Proposal. Since GBDC 3 stockholders will only vote on the Merger Proposal, there will not be any broker non-votes.

Vote Required

Each share of GBDC 3 Common Stock held by a holder of record as of the GBDC 3 Record Date has one vote on each matter considered at the GBDC 3 Special Meeting.

The Merger Proposal

The affirmative vote of the holders of outstanding shares of GBDC 3 Common Stock entitled to cast a majority of votes entitled to be cast at the GBDC 3 Special Meeting is required to approve the Merger Proposal.

Under the terms of the Merger Agreement, each GBDC 3 Stockholder will have the right to receive, for each share of GBDC 3 Common Stock, a number of shares of GBDC Common Stock equal to the Exchange Ratio. The number of shares of GBDC Common Stock to be received will be subject to adjustment if, between the date of the Merger Agreement and the effective time of the Initial Merger, the respective outstanding shares of GBDC Common Stock or GBDC 3 Common Stock have increased or decreased or changed into or been exchanged for a different number or kind of shares or securities, in each case, as a result of any reclassification, recapitalization, stock split, reverse stock split, split-up, combination or exchange of shares, or if a stock dividend or dividend payable in any other securities is declared with a record date within such period.

Abstentions will not count as affirmative votes cast and will therefore have the same effect as votes against the Merger Proposal. Since GBDC 3 stockholders will only vote on the Merger Proposal, there will not be any broker non-votes. Proxies received will be voted “FOR” the Merger Proposal, unless GBDC 3 stockholders designate otherwise.

Voting of Proxies

GBDC 3 encourages GBDC 3 stockholders to vote their shares, either by voting virtually at the GBDC 3 Special Meeting or by voting by proxy, which means that the GBDC 3 stockholders authorize someone else to vote their shares. Shares represented by duly executed proxies will be voted in accordance with the GBDC 3 stockholders’ instructions. If GBDC 3 stockholders execute a proxy without specifying their voting instructions, such GBDC 3 stockholders’ shares will be voted in accordance with the GBDC 3 Board’s recommendation. If any other business is brought before the GBDC 3 Special Meeting, the GBDC 3 stockholders’ shares will be voted at the GBDC 3 Board’s discretion unless the GBDC 3 stockholders specifically state otherwise on their proxy.

GBDC 3 stockholders may revoke a proxy at any time before it is exercised by notifying GBDC 3’s Secretary in writing, by submitting a properly executed, later-dated proxy, or by voting virtually at the GBDC 3 Special Meeting. Any GBDC 3 stockholder entitled to vote at the GBDC 3 Special Meeting may attend the GBDC 3 Special Meeting and vote virtually, whether or not he or she has previously voted his or her shares via proxy or wishes to change a previous vote.

A GBDC 3 stockholder may vote virtually at the GBDC 3 Special Meeting or by proxy in accordance with the instructions provided below. A GBDC 3 stockholder may also authorize a proxy by telephone or through the Internet using the toll-free telephone numbers or web address printed on your proxy card. Authorizing a proxy by telephone or through the Internet requires you to input the control number located on your proxy card. After inputting the control number, you will be prompted to direct your proxy to vote on each proposal. You will have an opportunity to review your directions and make any necessary changes before submitting your directions and terminating the telephone call or Internet link.

Important notice regarding the availability of proxy materials for the GBDC 3 Special Meeting. GBDC 3’s joint proxy statement/prospectus and the proxy card are available at www.proxyvote.com.

Revocability of Proxies

Any proxy authorized pursuant to this solicitation may be revoked by notice from the person giving the proxy at any time before it is exercised. A revocation may be effected by resubmitting voting instructions via the Internet voting site, by telephone, by obtaining and properly completing another proxy card that is dated later than the original proxy card and returning it, by mail, in time to be received before the GBDC 3 Special Meeting, by attending the GBDC 3 Special Meeting and voting virtually, or by a notice, provided in writing and signed by the GBDC 3 stockholder, delivered to GBDC 3’s Secretary on any business day before the date of the GBDC 3 Special Meeting.

Solicitation of Proxies

GBDC 3 and GBDC will equally bear the cost of preparing, printing and mailing this joint proxy statement/prospectus and the applicable accompanying Notice of Special Meeting of Stockholders and proxy card. GBDC 3 and GBDC intend to use the services of GC Advisors to aid in the distribution and collection of proxy votes. GBDC 3 and GBDC expect to pay market rates for such services. No additional compensation will be paid to directors, officers or regular employees for such services.

For more information regarding expenses related to the Merger, see “Questions and Answers about the Merger—Who is responsible for paying the expenses relating to completing the Merger?”

Appraisal Rights

GBDC 3 stockholders do not have the right to exercise rights of objecting stockholders with respect to any matter to be voted upon at the GBDC 3 Special Meeting.

CAPITALIZATION

The following table sets forth (1) GBDC’s and GBDC 3’s actual capitalization at December 31, 2023 and (2) GBDC’s capitalization as adjusted to reflect the effects of the Merger. You should read this table together with GBDC’s and GBDC 3’s consolidated financial data incorporated by reference herein and the pro forma financial information included elsewhere in this joint proxy statement/prospectus.

Note: Both GBDC and GBDC 3 will incur direct transaction costs resulting from the Merger. GBDC, as the acquirer in an asset acquisition, will capitalize its transaction costs and such costs will be reflected as an adjustment to the purchase price of GBDC 3. GBDC 3 will expense its transaction costs as incurred. See “Accounting Treatment of the Merger” for more details.

(1) GBDC expects to incur $2.5 million in estimated transaction costs, which will be capitalized for the purposes of the purchase price allocation and will be reflected in the premium to the price of the assets purchased. GBDC 3 is expected to incur $2.5 million in estimated transaction costs.

(2) Adjustment relates to unamortized deferred debt issuance costs associated with GBDC 3's debt facilities that will not be acquired as part of the Merger.

(3) This pro forma adjustment reflects the shares of GBDC Common Stock issued to GBDC 3 Stockholders based on an Exchange Ratio of 0.9121 shares of GBDC Common Stock for each share of GBDC 3 Common Stock. The Exchange Ratio is based on (a) GBDC's Common Stock Price that is greater than GBDC’s December 31, 2023 net asset value per share based on the closing sale price of GBDC Common Stock of $16.60 as reported on Nasdaq on April 9, 2024 and (b) GBDC 3’s December 31, 2023 net asset value per share pursuant to the formula in the Merger Agreement resulting in a reduction in total combined shares outstanding of 8.8 million. The total pro forma purchase price of the transaction is estimated to be $1.5 billion. Adjustments to shareholders’ equity include the removal of historical GBDC 3 net assets, the addition of new equity equal to estimated common share issuance of $1.5 billion, and the addition of unrealized depreciation as described in "Accounting Treatment of the Merger", to be included as a component of net assets as of the day of merger closing. Estimated transaction costs have been capitalized as part of the purchase premium into the cost of investments acquired.

(4) Total capitalization equals the sum of (i) debt, less unamortized debt issuance costs, and (ii) net assets attributable to common stock.

THE MERGER

The discussion in this joint proxy statement/prospectus, which includes the material terms of the Merger and the principal terms of the Merger Agreement, is subject to, and is qualified in its entirety by reference to, the Merger Agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus.

General Description of the Merger

Pursuant to the terms of the Merger Agreement, at the Effective Time, Merger Sub will be merged with and into GBDC 3. GBDC 3 will be the surviving company and will continue its existence as a corporation under the laws of the State of Maryland. As of the Effective Time, the separate corporate existence of Merger Sub will cease. Immediately after the occurrence of the Effective Time, in the Second Merger, the surviving company will merge with and into GBDC in accordance with the MGCL and the DGCL, with GBDC as the surviving entity.

If the Merger is consummated, each GBDC 3 stockholder will be entitled to receive shares of GBDC Common Stock equal to the Exchange Ratio (as defined below) for each share of GBDC 3 Common Stock, which Exchange Ratio would be 0.9121 shares of GBDC Common Stock based on (a) a GBDC Common Stock Price greater than GBDC’s December 31, 2023 net asset value per share based on the closing sale price of GBDC Common Stock of $16.60 as reported on Nasdaq on April 9, 2024 and (b) GBDC 3’s December 31, 2023 net asset value per share, pursuant to the exchange ratio calculation (as described further below under the Merger Agreement). The Exchange Ratio will be appropriately adjusted if, between the Determination Date and the effective time of the Merger, the respective outstanding shares of GBDC Common Stock or GBDC 3 Common Stock have increased or decreased or changed into or been exchanged for a different number or kind of shares or securities, in each case, as a result of any reclassification, recapitalization, stock split, reverse stock split, split-up, combination or exchange of shares, or if a stock dividend or dividend payable in any other securities is declared with a record date within such period. 

Under the terms of the Merger Agreement, the “Exchange Ratio” will be determined as of a mutually agreed date (the “Determination Date”) no earlier than 48 hours (excluding Sundays and holidays) prior to the effective date of the Merger and based on (i) the net asset value (“NAV”) per share of GBDC and GBDC 3 (the “GBDC Per Share NAV” and the “GBDC 3 Per Share NAV,” respectively) and (ii) the closing price per share of GBDC Common Stock on the Nasdaq on either the Determination Date or, if the Nasdaq is closed on the Determination Date, the most recent trading day prior to the Determination Date (the “GBDC Common Stock Price”). The Exchange Ratio will be calculated as follows:

(i) if the GBDC Common Stock Price is greater than the GBDC Per Share NAV, then the Exchange Ratio shall be the quotient (rounded to the fourth nearest decimal) of: (A) the amount equal to (x) GBDC 3 Per Share NAV multiplied by (y) the sum of (a) one (1) and (b) the GBDC 3 Share of GBDC Premium (as defined below); divided by (B) the GBDC Common Stock Price; provided, that, the amount set forth in sub-clause (y) for the purposes of the calculation shall not be greater than, and shall be subject to a cap of, 1.03. “GBDC 3 Share of GBDC Premium” means fifty percent (50%) multiplied by the difference between (A) the quotient of (x) GBDC Common Stock Price; divided by (y) GBDC Per Share NAV and (B) one (1); or

(ii) if the GBDC Common Stock Price is equal to or lesser than GBDC Per Share NAV, then the Exchange Ratio will be the quotient (rounded to the nearest decimal) of: (A) the GBDC 3 Per Share NAV, divided by (B) the GBDC Per Share NAV.

No fractional shares of GBDC Common Stock will be issued, and holders of GBDC 3 Common Stock will receive cash in lieu of fractional shares.

Following the Merger, GBDC intends to continue its operations as conducted before the Merger.

Background of the Merger

In connection with the private placement of its securities, GBDC 3 disclosed to its investors that it intended to seek a Liquidity Event (as defined below) within six years of the commencement of its operations on October 2, 2017 and that if it had not consummated a Liquidity Event within six years of the commencement of operations (the “Investment Period”), the GBDC 3 Board (to the extent consistent with its fiduciary duties and subject to any necessary stockholder approvals and applicable requirements of the 1940 Act) would use its commercially reasonable efforts to wind down or liquidate and dissolve GBDC 3 or to consummate a strategic sale to a third party. On August 16, 2023, at a special meeting of the stockholders of GBDC 3, the GBDC 3 stockholders approved an extension of two years for the Investment Period described below.

GBDC 3 defined a “Liquidity Event” as any of the following: (1) an initial public offering of GBDC 3 common stock or the listing of GBDC 3 common stock on a national securities exchange or (2) a sale of all or substantially all of GBDC 3’s assets to, or other liquidity event with, an entity for consideration of either cash and/or publicly listed securities of the acquirer, which potential acquirers may include business development companies, including business development companies affiliated with GC Advisors, and entities that are not business development companies.

The GBDC Board regularly reviews the long-term strategic plan of GBDC with the goal of maximizing stockholder value. As part of that review and the GBDC Board’s regular ongoing evaluation of business opportunities, from time to time, the GBDC Board has considered and engaged in discussions concerning possible strategic transactions available to GBDC, such as mergers, acquisitions, joint ventures and other similar transactions.

On February 4, 2022, the GBDC and GBDC 3 Boards held a regularly scheduled joint meeting at which management of GBDC 3 discussed GBDC 3’s current goals and noted that GBDC 3 was at the point in the Investment Period where the GBDC 3 Board would soon begin considering various options for a Liquidity Event. GBDC 3’s management discussed the various alternatives for a Liquidity Event and the process by which it was anticipated that the GBDC 3 Board would expect to evaluate potential Liquidity Event alternatives, including evaluation of the valuation of the consideration to be received by GBDC 3 stockholders together with the liquidity to be provided to GBDC 3 stockholders of such consideration in order to reach an overall assessment. The GBDC 3 Independent Directors requested that representatives of GC Advisors reach out on behalf of the GBDC 3 Independent Directors to investment banks with the qualifications and experience necessary to serve as a financial advisor to the GBDC 3 Independent Directors in evaluating Liquidity Event alternatives and to evaluate the appropriateness of engaging any such bank to serve as a financial advisor to the GBDC 3 Independent Directors. Following the February 4, 2022 meeting, management of GBDC 3, on behalf of the GBDC 3 Independent Directors, held discussions with various investment banks, including Keefe, Bruyette & Woods, Inc. (“KBW”), to potentially serve as a financial advisor to a to-be-formed special committee of the GBDC 3 Board comprised of the GBDC 3 Independent Directors in connection with the evaluation of the various alternatives for a Liquidity Event.

On April 12, 2022, the GBDC and GBDC 3 Boards held a regularly scheduled joint meeting. At the meeting, representatives of KBW provided the GBDC 3 Independent Directors with an overview of KBW’s experience with transactions involving business development companies, including mergers of business development companies, and other matters relating to KBW’s potential engagement as financial advisor. The GBDC 3 Independent Directors then met separately in an executive session with representatives of Dechert and Blank Rome to discuss the Liquidity Event, including the process to be undertaken, the various alternatives available, and the matters discussed with representatives of KBW. After evaluating the qualifications of KBW, including its relationships with relevant parties, the GBDC 3 Independent Directors authorized the officers of GBDC 3 as well as the personnel of GC Advisors to negotiate the engagement of KBW as a financial advisor to a to-be-formed special committee of the GBDC 3 Board comprised of the GBDC 3 Independent Directors. Subsequent to the meeting, KBW was retained to act as the financial advisor to said committee.

On each of August 5, 2022 and November 18, 2022 and February 7, 2023, the GBDC and GBDC 3 Boards held regularly scheduled joint meetings at which management for GBDC 3 discussed the consideration of a Liquidity Event for GBDC 3. As of the date of each such meeting, it was reported that management of GBDC 3 believed that market conditions were not optimal to proceed with a Liquidity Event at such time and that GBDC 3 management and GC Advisors planned to continue to advance their work, with assistance from representatives of KBW, so that GBDC 3 would be in a position to explore a Liquidity Event when market conditions were appropriate.

On May 5, 2023, the GBDC and GBDC 3 Boards held a regularly scheduled joint meeting. Management noted that GBDC 3 was approaching the end of the Investment Period and believed that it would be prudent to consider Liquidity Event alternatives in connection with the approaching end of such period. Management for GBDC 3 reminded the directors of the process for the evaluation of various Liquidity Event alternatives and the considerations that the GBDC 3 Board would expect to use. Representatives of KBW joined the meeting and discussed various Liquidity Event alternatives, including certain advantages and disadvantages of particular alternatives and their apparent feasibility under then market conditions. Management and the representatives of KBW also discussed an option to seek stockholder approval for GBDC 3 to extend the Investment Period as the GBDC 3 Board continued to evaluate Liquidity Event alternatives.

At the meeting, the GBDC 3 Board continued to conclude that, given the general market uncertainty and volatility, it was not yet appropriate to proceed with a Liquidity Event despite what the GBDC 3 Board believed has been strong execution of GBDC 3’s investment strategy that had generated consistent, premium returns to stockholders. At the meeting of the GBDC 3 Board on May 5, 2023, the GBDC 3 Board considered the prior disclosure to investors (during the private placement), which provided that following October 2, 2023, the GBDC 3 Board (to the extent consistent with its fiduciary duties and subject to any necessary stockholder approvals and applicable requirements of the 1940 Act) would use its commercially reasonable efforts to wind down or liquidate and dissolve GBDC 3 or to consummate a strategic sale to a third party. The GBDC 3 Board discussed the implications of this disclosure, noting that it did not require GBDC 3 to immediately commence a liquidation after October 2, 2023. The Board deemed it in the best interest of GBDC 3 and its stockholders to continue to seek to maximize stockholder value beyond such date. The GBDC 3 Board considered that it would not be in the best interests of GBDC 3 stockholders to commence a liquidation or wind down in the then-current volatile market environment and that, in fact, the volatile market environment could present investment opportunities that would be beneficial to the long-term value of the shares of GBDC 3 common stock held by stockholders should GBDC 3 continue to reinvest the proceeds from investment payoffs into new investment opportunities with attractive risk-adjusted returns while continuing to evaluate the execution of a Liquidity Event in a potentially more favorable market environment.

After due consideration of certain relevant factors, the GBDC 3 Board, including all of the GBDC 3 Independent Directors, concluded that it would be the in best interests of GBDC 3 stockholders to seek approval from the stockholders of a two-year extension of the Investment Period. The GBDC 3 Board concluded that such an extension would permit GBDC 3 to continue investment operations, uninterrupted, in order to take advantage of the potential for attractive investment opportunities that may arise in a volatile and uncertain market environment while the GBDC 3 Board would continue to consider the most appropriate timing and structure for a Liquidity Event. During the extension of the Investment Period, the GBDC 3 Board would continue to work with GC Advisors to evaluate and consider alternatives for a Liquidity Event.

On August 16, 2023, GBDC 3 held a special meeting of its stockholders at which the GBDC 3 stockholders approved the extension of the Investment Period by two years from October 2, 2023 to October 2, 2025.

On October 9, 2023, the GBDC 3 Board and GBDC Board held a special meeting at which representatives of GC Advisors, Dechert, and Blank Rome were also in attendance. At this meeting, representatives of KBW provided the GBDC 3 Independent Directors with information regarding various alternatives for a Liquidity Event, including a merger with GBDC.

In addition, the GBDC Board and the GBDC 3 Board identified and discussed potential conflicts of interests related to a merger of GBDC 3 and GBDC. Representatives of Dechert also reviewed with the members of the GBDC Board and the GBDC 3 Board the fiduciary duties and statutory standards of conduct applicable to them as directors, as well as regulatory, tax and corporate matters relevant to a merger of GBDC 3 and GBDC.

Following the presentations, the GBDC 3 Independent Directors met in executive session with representatives of Dechert and Blank Rome to discuss the information presented. The GBDC 3 Board then agreed to further investigate and consider a merger between GBDC 3 and GBDC and authorized and instructed the GBDC 3 officers and GC Advisors to work with KBW (as the financial advisor to a to-be-formed committee of the GBDC 3 Board to be comprised of the GBDC 3 Independent Directors) to do so.

At the same meeting, the GBDC Board and the GBDC Independent Directors discussed certain matters in connection with a merger between GBDC and GBDC 3 and the processes to undertake to the extent that the GBDC Board determined to pursue a merger with GBDC 3. The GBDC Independent Directors discussed the utility of engaging a financial advisor to advise the GBDC Independent Directors. Representatives of Morgan Stanley joined the meeting and reviewed Morgan Stanley’s experience regarding advisory work to business development companies. After evaluating the qualifications of Morgan Stanley, including whether Morgan Stanley had relationships with relevant parties, the GBDC Independent Directors authorized and instructed the officers of GBDC as well as the personnel of GC Advisors to discuss and negotiate the engagement of Morgan Stanley (as the financial advisor to a to-be-formed committee of the GBDC Board to be comprised of the GBDC Independent Directors).

Subsequent to the meeting, the GBDC Board and the GBDC 3 Board each determined to form a special committee comprised solely of the Independent Directors of such Board (each, a “Special Committee”) in order to analyze and evaluate a potential merger, which committees were established on December 13, 2023. In addition, Morgan Stanley was engaged as financial advisor to the GBDC Special Committee.

On December 14, 2023, the GBDC 3 Special Committee and the GBDC Special Committee each held a meeting to analyze the potential for a merger between GBDC and GBDC 3. Representatives of GC Advisors, Dechert, and Blank Rome were also in attendance, along with representatives from KBW and Morgan Stanley, at various times.

At its meeting, the GBDC 3 Special Committee reviewed with representatives of KBW information regarding various considerations related to a merger with GBDC. Representatives of KBW reviewed recent market developments and provided further information regarding the potential benefits and considerations of the Liquidity Event alternatives. Representatives of KBW reviewed with the GBDC 3 Special Committee certain potential financial aspects of a merger with GBDC on a preliminary basis and discussed various potential exchange ratios as well as potential considerations in determining an exchange ratio. KBW compared potentially higher premiums to GBDC 3 stockholders at various exchange ratios relative to other possible Liquidity Event alternatives and potential illustrative future trading values attributable to GBDC 3 stockholders based on hypothetical trading prices and liquidity of the combined company. Representatives of KBW also discussed potential synergies of the combined company expected by GC Advisors’ management. The GBDC 3 Special Committee discussed with both KBW representatives and GC Advisors considerations and questions from the GBDC 3 Special Committee members related to a potential merger with GBDC. Management of GBDC 3 reviewed and discussed various considerations related to a merger with GBDC and reviewed materials circulated to the committee for the meeting regarding non-overlapping investments as of September 30, 2023. Representatives of Dechert reviewed a draft of a merger agreement that had been included in the materials circulated to the GBDC 3 Special Committee for the meeting and summarized the material terms of the agreement. The GBDC 3 Special Committee then met in executive session with representatives of Dechert and Blank Rome present to discuss and consider the benefits to GBDC 3 of a merger with GBDC. Following the executive session, the GBDC 3 Special Committee determined to continue to pursue a potential merger with GBDC and provided instructions to GC Advisors, KBW and Dechert.

At the December 14, 2023 meeting of the GBDC Special Committee, the GBDC Special Committee met with representatives of Morgan Stanley to review information regarding, among other things, the transaction rationale and investment highlights for the potential merger with GBDC 3, considerations regarding the exchange ratio, considerations regarding transaction structure and process and liquidity considerations. Representatives of Morgan Stanley discussed with the GBDC Special Committee how various exchange ratios would work, including the potential for accretion to the NAV of GBDC Common Stock if the GBDC Common Stock were trading at a premium to its NAV at the closing of a merger. The GBDC Special Committee also discussed with its advisors various advantages of a merger that could accrue to GBDC, including the potential for improved trading liquidity, broader analyst coverage and additional institutional investor interest in a larger company following closing of the Merger. Representatives of Morgan Stanley discussed with the GBDC Special Committee certain comparisons of the acquisition of assets in a merger with GBDC 3 with other alternatives, including investing in assets by raising proceeds through future follow-on public offerings of GBDC Common Stock, which would require a discount to the current trading price of GBDC Common Stock. Representatives of Morgan Stanley noted it would take time to invest the cash received in such a public offering in new portfolio company investments, which would not be known at the time of closing of the offering. Representatives of Morgan Stanley also noted that raising capital in an amount equivalent to the scale of an acquisition of GBDC 3 would require multiple offerings and be subject to market conditions. On the other hand, a merger with GBDC 3 would provide for the immediate acquisition of a known portfolio of investments, providing immediate investment returns as opposed to the lower yields that would be expected from temporary investments made by GBDC following a follow-on public offering until longer-term investments could be identified. Representatives of Morgan Stanley then reviewed with the GBDC Special Committee various potential exchange ratios resulting from the proposed transaction structure. The GBDC Special Committee reviewed and discussed the overlap in investments between the GBDC 3 portfolio and the GBDC portfolio and the advantages to GBDC from the acquisition of a known, diversified portfolio of assets. Representatives of Morgan Stanley, GC Advisors, Dechert and Blank Rome responded to questions from the GBDC Special Committee regarding the information that had been discussed. The GBDC Special Committee then met in executive session with representatives of Dechert and Blank Rome present to discuss and consider the benefits to GBDC of a merger with GBDC 3. Following the executive session, the GBDC Special Committee instructed representatives of Morgan Stanley, GC Advisors and Dechert to continue to pursue a potential merger with GBDC 3, including further analysis regarding an appropriate exchange ratio for such transaction.

In advance of the December 14, 2023 Special Committee meetings, a draft of the Merger Agreement had been circulated, which draft agreement included input from Blank Rome with respect to its structure and content. At the meetings, representatives of Dechert reviewed material provisions of the draft Merger Agreement with the Special Committees and responded to questions.

In addition, the GBDC Special Committee discussed with GBDC management the accounting treatment that would be applicable to a merger with GBDC 3 and the consequences of the asset acquisition method of accounting on the financial statements of GBDC after closing of the Merger. The GBDC Special Committee members noted that they were familiar with the effects of such accounting treatment on the financial statements of GBDC from GBDC’s prior acquisition of another business development company advised by GC Advisors and further noted that they believed that investors in GBDC would be familiar with such effects and GBDC’s reporting around such accounting treatment as well. It was noted that the asset acquisition method of accounting was not expected to have any tax consequences for the GBDC stockholders or GBDC 3 stockholders as the Merger would still be considered a “reorganization” under the Code. However, the GBDC Special Committee discussed with management that a premium paid for the acquisition of another BDC in a merger, such as the Merger would, immediately following closing of the Merger, create unrealized depreciation for GBDC because GBDC would be required write down the former GBDC 3 assets to their fair value. The effects of this unrealized depreciation and subsequent realized loss upon the disposition of the GBDC 3 assets acquired, with a corresponding reversal of the unrealized depreciation, resulting from the asset acquisition method of accounting on GBDC were discussed. In addition, the GBDC 3 Special Committee discussed with representatives of GC Advisors that the Current GBDC Investment Advisory Agreement would exclude any amounts resulting solely from the purchase accounting for any premium or discount paid for the acquisition of assets in a merger, including the Merger, from amounts subject to the incentive fees and incentive fee cap.

Subsequent to the December 14, 2023 Special Committee meetings, the Special Committees communicated separately with Blank Rome regarding various matters related to the Merger, including the potential exchange ratio and provisions of the Merger Agreement. The GBDC Independent Directors and GBDC 3 Independent Directors considered a range of exchange ratios that they believed would be acceptable with respect to each of GBDC and GBDC 3, respectively, noting that it was appropriate to consider a NAV-for-NAV exchange ratio as the “floor” in a potential merger to the extent that GBDC shares were not trading in excess of GBDC’s closing NAV. The GBDC Special Committee and the GBDC 3 Special Committee considered the benefits of the proposed transaction to each of GBDC and GBDC 3 and determined to provide instructions to their respective financial advisors regarding an exchange ratio corresponding to a NAV-for NAV transaction if GBDC were trading below NAV at the closing of the merger or a premium split transaction to the extent that GBDC shares were trading in excess of GBDC’s NAV at closing where 50% of the trading premium of GBDC’s shares would be shared with GBDC 3 stockholders subject to a cap of 3% to GBDC 3’s NAV per share at closing. In addition, Dechert incorporated comments received into a revised draft of the Merger Agreement and circulated to all of the members of the GBDC Board and GBDC 3 Board in advance of meetings on January 16, 2024.

On January 16, 2024, each of the GBDC 3 Special Committee, the GBDC Special Committee and the GBDC Board and GBDC 3 Board held meetings. Representatives of GC Advisors, Dechert, and Blank Rome were also in attendance, along with representatives of KBW for the GBDC 3 Special Committee meeting and representatives of Morgan Stanley for the GBDC Special Committee meeting. At the various meetings, representatives of Dechert reviewed with the GBDC 3 Independent Directors and the GBDC Independent Directors the revised draft of the Merger Agreement that had been circulated prior to the meeting and its material provisions and also reviewed with the directors their fiduciary duties and statutory standards of conduct as directors, the requirements of Rule 17a-8 of the 1940 Act, and tax, regulatory, and corporate matters. In addition, GC Advisors reviewed materials related to a proposed amended and restated investment advisory agreement to reduce the incentive fee rates for the GBDC income incentive fee and capital gains incentive fee as well as the incentive fee cap. The representatives of GC Advisors noted that the amended and restated investment advisory agreement would be conditioned on closing of the Merger but that GC Advisors expected to enter into a waiver letter agreement to implement the reduced fee rates for the period between signing the Merger Agreement and closing of the Merger or termination of the Merger Agreement. Management of GBDC also presented materials related to an increase in the regular quarterly distributions of GBDC and the GBDC Board adopted resolutions approving the increased quarterly distributions for GBDC beginning with the distribution payable during the calendar quarter ending March 31, 2024.

At the GBDC 3 Special Committee meeting, representatives of KBW joined the meeting to review certain financial aspects of the potential merger with the GBDC 3 Special Committee members. At the GBDC 3 Special Committee Meeting, KBW rendered an opinion to the GBDC 3 Special Committee and, at the request of the GBDC 3 Special Committee, the GBDC 3 Board, which opinion was initially rendered orally and subsequently confirmed by delivery of a written opinion, to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the Initial Merger was fair, from a financial point of view, to the holders of GBDC 3 Common Stock, as more fully described in the section entitled “— Opinion of the GBDC 3 Special Committee’s Financial Advisor” beginning on page 54. For purposes of its analyses and its opinion, KBW assumed that the GBDC 3 Per Share NAV would be $14.70, that, if the GBDC Common Stock Price were equal to the closing price per share of GBDC common stock on January 12, 2024 and if the GBDC Per Share NAV were equal to the publicly reported September 30, 2023 net asset value per share of GBDC common stock, the GBDC 3 Share of GBDC Premium would be .0072, and that, as a result of the foregoing, the exchange ratio in the Initial Merger of shares of GBDC Common Stock for each share of GBDC 3 Common Stock would be 0.9717x. KBW discussed this assumption with the GBDC 3 Special Committee, observing that if the Initial Merger were to close at a time when GBDC was not trading at a premium to NAV, then the resulting exchange ratio would be higher than what was being assumed for purposes of KBW’s opinion and, in such event, GBDC 3 stockholders would receive a higher number of GBDC shares in the transaction. Following a discussion of the foregoing matters and other matters presented, the GBDC 3 Special Committee determined that the Merger Agreement, the Initial Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of GBDC 3 and recommended the Merger Agreement, the Initial Merger and the other transactions contemplated by the Merger Agreement to the GBDC 3 Board. Thereafter, based in part upon the unanimous recommendation of the GBDC 3 Special Committee, the GBDC 3 Board, including the GBDC 3 Independent Directors, unanimously (1) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the terms of the Mergers, are advisable and in the best interests of GBDC 3 and GBDC 3’s stockholders, (2) determined that the interests of existing GBDC 3 stockholders would not be diluted for purposes of Rule 17a-8 under the 1940 Act as a result of the transactions contemplated by the Merger Agreement, including the Mergers and (3) recommended that the Merger Agreement and the transactions contemplated thereby, including the Mergers, be approved by the GBDC 3 stockholders.

Also at the January 16, 2024 meeting, after the representatives of KBW left the meeting, the GBDC Special Committee held a meeting and representatives of Morgan Stanley joined the meeting of the GBDC Special Committee. The representatives of Morgan Stanley reviewed with the GBDC Special Committee Morgan Stanley’s financial analysis with respect to the Exchange Ratio and rendered an oral opinion to the GBDC Special Committee, subsequently confirmed by delivery of a written opinion addressed to the GBDC Special Committee and the GBDC Board, dated January 16, 2024, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, based upon GBDC management’s estimates that the GBDC NAV will be approximately $15.12 as of March 31, 2024 and the GBDC 3 Per Share NAV will be approximately $14.70 as of March 31, 2024 and assuming the GBDC Common Stock is equal to or less than the GBDC Per Share NAV, the resulting Exchange Ratio of 0.9726 shares of GBDC Common Stock is equal to or less than the GBDC Per Share NAV, the resulting Exchange Ratio of 0.9726 shares of GBDC Common Stock per share of GBDC 3 Common Stock, was fair from a financial point of view to GBDC. See “— Opinion of the GBDC Special Committee’s Financial Advisor” beginning on page 48. In presenting its financial analyses and responding to questions, representatives of Morgan Stanley discussed their assumptions, noting that if the merger were to close at a time when GBDC Common Stock was trading at a premium to NAV, that would result in a lower exchange ratio and fewer GBDC shares being issued by GBDC to GBDC 3 stockholders in the transaction. Following a discussion of the foregoing matters and other matters presented, the GBDC Special Committee determined that the Merger Agreement, the Initial Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of GBDC and recommended the Merger Agreement, the Initial Merger and the other transactions contemplated by the Merger Agreement to the GBDC Board. Thereafter, based in part upon the unanimous recommendation of the GBDC Special Committee, the GBDC Board, including the GBDC Independent Directors, unanimously (1) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the terms of the Mergers, are advisable and in the best interests of GBDC and GBDC’s stockholders, (2) determined that the interests of existing GBDC stockholders would not be diluted for purposes of Rule 17a-8 under the Act as a result of the transactions contemplated by the Merger Agreement, including the Mergers and (3) recommended that the Merger Agreement and the transactions contemplated thereby, including the Mergers, be approved by the GBDC stockholders.

Following the January 16, 2024 meetings of the GBDC Board and the GBDC 3 Board, GBDC, GBDC 3, Merger Sub, GC Advisors and Golub Capital LLC executed and delivered the Merger Agreement. GBDC and GBDC 3 issued a press release announcing the execution of the Merger Agreement on Wednesday, January 17, 2024. 

Reasons for the Merger

GBDC

At various telephonic and in-person Board meetings, the GBDC Board, including each of the GBDC Independent Directors, considered the approval of the Merger with GBDC 3, including the Merger Agreement and the New GBDC Investment Advisory Agreement. In connection with its consideration, the GBDC Independent Directors requested and GC Advisors provided information regarding the proposed Merger, GBDC 3, and the anticipated effects of the Merger on GBDC and its stockholders, both immediately after the Merger and over the longer-term assuming that some portion of the anticipated benefits of the Merger are realized. The GBDC Board also considered the effect of the New GBDC Investment Advisory Agreement on the combined company following the closing of the Merger as well as the effect of the Waiver for periods ending on or prior to the earlier of (i) the closing of the acquisition of GBDC 3 pursuant to the Merger Agreement or (ii) termination of the Merger Agreement. Over the course of its review of the materials and information provided and its consideration of the Merger as well as of the New GBDC Investment Advisory Agreement, the GBDC Board, including each of the GBDC Independent Directors, consulted with GBDC’s management, GC Advisors and GBDC’s legal advisors. In addition, the GBDC Independent Directors were advised by Blank Rome, their independent legal counsel under the 1940 Act, and the GBDC Special Committee, which was comprised of all of the GBDC Independent Directors was advised by Morgan Stanley, their financial advisor. The GBDC Board considered the nature and adequacy of the information provided, including the terms of the Merger Agreement and their duties under state and federal law in approving the Merger and conflicts of interest present in the transactions provided for in the Merger Agreement. The GBDC Board considered numerous factors, including the ones described below, in connection with its consideration and approval of the Merger. On January 16, 2024, the GBDC Board, including all of the GBDC Independent Directors, unanimously determined that (i) the Merger is in the best interests of GBDC and in the best interests of GBDC’s stockholders, and that GBDC stockholders will not suffer any dilution for purposes of Rule 17a-8 of the 1940 Act as a result of the Merger and (ii) that the New GBDC Investment Advisory Agreement should be approved.

In considering the Merger, the GBDC Board and the GBDC Special Committee, reviewed comparative information about GBDC and GBDC 3 including, among other items: (1) their investment goals, strategies, policies and restrictions; (2) their individual holdings and the quality of such holdings, including, in particular, the holdings of GBDC 3 that were not currently held by GBDC; (3) their valuation policies and procedures; (4) their existing leverage facilities and permissible asset coverage ratios under the 1940 Act; (5) their short-term and long-term investment performance history and financial results; (6) the amount of past dividends and distributions and the anticipated effect of the Merger on future GBDC earnings and distributions; (7) the trading history of GBDC Common Stock on Nasdaq, including current and historical premiums and/or discounts at which GBDC has traded; and (8) their respective investment advisory agreements and expense ratios. In addition, the GBDC Board and the GBDC Special Committee reviewed comprehensive information regarding the anticipated immediate benefits and possible risks to GBDC as a result of the Merger, and the anticipated investment, market and financial synergies to be experienced by the combined company over the shorter and longer-term. The GBDC Board also considered the impact of the reduction to the incentive fee rates and the incentive fee cap under the New GBDC Investment Advisory Agreement on the combined company. See “GBDC Board Approval of the New GBDC Investment Advisory Agreement” for a description of the information considered by the GBDC Board in approving the New GBDC Investment Advisory Agreement. With respect to the potential financial impacts to GBDC as a result of the Merger, the GBDC Board also considered information and analysis from Morgan Stanley, the financial advisor engaged by the GBDC Special Committee to provide financial advisory and investment banking services to the GBDC Special Committee, including an opinion to the GBDC Special Committee and, at the request of the GBDC Special Committee, the GBDC Board regarding the fairness, from a financial point of view, to GBDC of the Exchange Ratio.

The GBDC Board and the GBDC Special Committee, separately, weighed various benefits and risks in considering the Merger, both with respect to the immediate effects of the Merger on GBDC and its stockholders and with respect to the potential benefits that could be experienced by the combined company after the Merger. Some of the material factors considered by the GBDC Board and the GBDC Special Committee, that assisted in concluding that the Merger is in the best interests of GBDC and its stockholders included, among others:

Increased Scale and Liquidity. The GBDC Board and the GBDC Special Committee considered advantages expected to accrue to the combined company as a result of its larger size. The GBDC Board noted that the combined company would be the fifth largest externally managed, publicly traded BDC based on the total assets of GBDC and GBDC 3 as of September 30, 2023 and one of the two largest publicly-traded BDCs with more than 90% of its investment portfolio oriented towards first lien, senior secured lending. The GBDC Board and the GBDC Special Committee reviewed analysis that suggests that larger BDCs tend to have higher average daily trading volumes and reviewed the increased in average daily trading volume that resulted following GBDC’s acquisition of GCIC in 2019, noting that increased trading volume would give existing GBDC stockholders more flexibility to manage their investments and would be expected to attract new investors seeking a more liquid vehicle than stand-alone GBDC.

Acquisition of a Known, Diversified Portfolio of Assets. The GBDC Board and the GBDC Special Committee noted that over 99% of GBDC 3’s investments overlap with those of GBDC. Given this overlap, the pro forma portfolio would remain similar to GBDC’s stand-alone portfolio both in asset mix, diversification (by borrower and by industry), and internal performance ratings. As a result, the acquisition of GBDC 3 by GBDC could be seen as the acquisition of more of GBDC as opposed to the process of raising incremental capital in follow-on offerings, which could result in lower returns for the period after closing a follow-on offering when GBDC holds the invested cash in temporary investments pending the finding of attractive investment opportunities.

Opportunity for Debt Optimization. The GBDC Board and the GBDC Special Committee discussed how the combined company may have an opportunity to improve its liability profile and driving funding costs savings. The GBDC Board considered that larger BDCs have historically issued in the institutional bond market at tighter coupons The GBDC Board noted that greater scale could enhance the capacity to use debt securitizations to further reduce funding costs and improve flexibility relative to bank facilities. The GBDC Board discussed that the size of the combined company should allow it to pursue additional unsecured notes issuances and create a more flexible balance sheet.

Immediate NII Accretion and Long-Term Potential for Additional Accretion. The GBDC Board and the GBDC Special Committee considered the New GBDC Investment Advisory Agreement that would be effective upon closing of the Merger, noting that the New GBDC Investment Advisory Agreement would result in a decrease in the incentive fee rates on by GBDC’s income incentive fee and its capital gains incentive fee with a corresponding decrease in the incentive fee cap as compared to the Current GBDC Investment Advisory Agreement. The GBDC Board noted that these amendments to GBDC’s fee structure would provide for NII per share accretion that, as a result of the Waiver, would be effective upon announcement of the Merger Agreement and would become permanent upon execution of the New GBDC Investment Advisory Agreement at closing of the Merger.

Opportunity for NAV Accretion. The GBDC Board and the GBDC Special Committee considered that if GBDC shares were trading at a premium to NAV at the Determination Date, the Exchange Ratio would result in a Merger that would be accretive to stand-alone NAV of GBDC under a range of premiums due to the fact that GBDC shares would be issued at a premium to its NAV based on its current trading price and NAV per share. The GBDC Board and GBDC Special Committee noted that if GBDC shares were not trading at a premium to NAV that a NAV-for-NAV exchange ratio would not result in any dilution to GBDC’s stockholders for purposes of Rule 17a-8 of the 1940 Act.

Operational Synergies. The GBDC Board and the GBDC Special Committee also considered that, as a result of the Merger, certain redundant professional services and other corporate expenses would be eliminated, which would reduce the potential expenses of the combined company as compared to the sum of expenses of GBDC and GBDC 3 on a stand-alone basis. The GBDC Board noted that, although certain one-time costs would be borne by GBDC stockholders in connection with the Merger, the annual operating expense borne by GBDC stockholders on a pro rata basis is expected to be reduced as a percentage of net assets due to the elimination of redundant expenses. The GBDC Board found that the expected decrease in the expenses of the combined entity would benefit GBDC and its stockholders if the Merger is approved.

Investment Strategies and Risks. The GBDC Board and the GBDC Special Committee reviewed both GBDC’s and GBDC 3’s investment program and noted that they have identical investment objectives and substantially similar strategies and risks and that each focuses on primarily investing in one stop and other senior secured loans to resilient companies with partnership-oriented private equity sponsors across a range of industries. The GBDC Board and the GBDC Special Committee took into consideration that GBDC and GBDC 3 are each managed by GC Advisors and, after the merger, the investment experience of GBDC stockholders would likely be comparable in the combined entity.

Tax Consequences. The GBDC Board and the GBDC Special Committee considered that the Merger is anticipated to be treated as a tax-free reorganization for federal income tax purposes and GBDC stockholders are not expected to recognize any gain or loss for U.S. federal income tax purposes as a result of the Merger.

Opinion of Financial Advisor. The GBDC Board considered an opinion of Morgan Stanley addressed to the GBDC Special Committee and the GBDC Board, dated January 16, 2024, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, based upon GBDC management’s estimates that the GBDC Per Share NAV will be approximately $15.12 as of March 31, 2024 and the GBDC 3 Per Share NAV will be approximately $14.70 as of March 31, 2024 and assuming the GBDC Common Stock Price is equal to or less than the GBDC Per Share NAV, the resulting Exchange Ratio of 0.9726 shares of GBDC Common Stock per share of GBDC 3 Common Stock, was fair from a financial point of view to GBDC, as more fully described below in the section entitled “Opinion of the GBDC Special Committee’s Financial Advisor.”

Other Considerations. In addition, the GBDC Board noted that the Merger is not expected to affect the ability of GBDC to comply with its regulatory obligations, including its ability to maintain appropriate leverage and continue to operate in compliance with the asset coverage requirements set forth in the 1940 Act and to pay dividends required of RICs.

The GBDC Board and the GBDC Special Committee also considered that GC Advisors had agreed to irrevocably waive any Subordinated Liquidation Incentive Fee payable to the extent that the Exchange Ratio resulted in GBDC acquiring GBDC 3 at a premium to NAV.

When considering the information described above, including all of the anticipated effects of the Merger on GBDC and its stockholders and the related pro forma information, the GBDC Board noted that information based on projections and assumptions may be incorrect, is subject to change, and may fluctuate over time. The GBDC Board acknowledged that the pro forma information and the projections and assumptions on which the potential expenses, earnings, yield, dividend and trading price information is based depends on many factors and variables, including among other things, asset mix, the performance of individual investments, changing cost of service providers, portfolio turnover level, leverage, the cost of leverage, changes in interest rates and general market conditions. The GBDC Board noted that there is no assurance that any of the potential benefits to GBDC or its stockholders as a result of the Merger will be realized, including any anticipated synergies, and that the combined entity could experience detrimental effects that had not been anticipated.

In the course of its deliberations, the GBDC Board and the GBDC Special Committee, also considered a variety of risks and other potentially negative factors, including the following (which are not in any relative order of importance):

•               Failure to Close. It is possible that the Merger may not be completed or that completion may be unduly delayed for reasons beyond the control of GBDC 3 or GBDC.

•               Management Diversion. It is possible that the attention of management may be diverted during the period prior to completion of the Merger, which may adversely affect GBDC’s business.

•               Restrictions on Conduct of Business. The restrictions on the conduct of GBDC’s business prior to completion of the Merger, requiring GBDC to conduct its business only in the ordinary course of business in all material respects, subject to specific limitations, could delay or prevent GBDC from undertaking business opportunities that may arise pending completion of the Merger.

•               Restrictions on Superior Proposals. The Merger Agreement includes restrictions on the ability of GBDC to solicit proposals for alternative transactions or engage in discussions regarding such proposals, subject to exceptions and termination provisions (as more fully described in the section entitled “Description of the Merger Agreement—Additional Agreements” beginning on page 72), which could have the effect of discouraging such proposals from being made or pursued.

•               Fees Associated with the Merger. In general, GBDC will be responsible for the expenses incurred by GBDC in connection with the Merger and the completion of the transactions contemplated by the Merger Agreement, whether or not the Merger is consummated, including half of the costs and expenses of any filing and other fees payable by GBDC to the SEC in connection with the Merger.

•               Absence of Appraisal Rights. GBDC stockholders are not entitled to appraisal rights under Delaware law.

•               Other Risks. There are various other risks associated with the Merger and the business of GBDC and the combined company described in the section entitled “Risk Factors” beginning on page 19 and in the section entitled “Special Note Regarding Forward-Looking Statements” beginning on page 32.

This discussion of the information and factors that the GBDC Board considered in making its decision is not intended to be exhaustive, but includes the material factors considered by the GBDC Board. Because of the wide variety of factors considered in connection with its evaluation of the Merger and Merger Agreement and the complexity of those matters, the GBDC Board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors. In addition, the individual members of the GBDC Board may have given different weights to different factors.

The GBDC Special Committee consulted with Morgan Stanley, as its financial advisor, in evaluating the financial terms of the Merger. In addition, the GBDC Board relied on its legal advisors for legal analysis in connection with the Merger.

The GBDC Board and the GBDC Independent Directors considered all of these factors and others as a whole and, on balance, determined the Merger to be in the best interests of GBDC and GBDC’s stockholders and unanimously approved the Merger and the Merger Agreement.

GBDC 3

At various telephonic and in-person Board meetings, the GBDC 3 Board, including the GBDC 3 Independent Directors, considered various alternatives for a Liquidity Event. Each of the GBDC 3 Board and the GBDC 3 Independent Directors (in their capacity as such prior to formation of the GBDC 3 Special Committee and, following formation of the GBDC 3 Special Committee in their capacity as members of the GBDC 3 Special Committee) sought to complete a careful, methodical process to evaluate potential Liquidity Event options by evaluating, among other things, (a) the value created through each Liquidity Event transaction, (b) the incremental value created through potential share price appreciation following the closing of a Liquidity Event and (c) the degree of liquidity provided by each Liquidity Event alternative in order to make an overall assessment of the value to GBDC 3 stockholders of each Liquidity Event considered. In connection with its consideration of the Merger, the GBDC 3 Independent Directors requested and GC Advisors provided information regarding the proposed Merger, GBDC, and the anticipated effects of the Merger on GBDC 3 and its stockholders, both immediately after the Merger and over the longer-term assuming that some portion of the anticipated benefits of the Merger are realized. The GBDC 3 Board also considered the effect of the New GBDC Investment Advisory Agreement on the combined company following the closing of the Merger. Over the course of its review of the materials and information provided and its consideration of the Merger, the GBDC 3 Board, including the GBDC 3 Special Committee, consulted with GBDC 3’s management, GC Advisors and GBDC 3’s legal advisors. In addition, the GBDC 3 Independent Directors were advised by Blank Rome, their independent legal counsel under the 1940 Act, and the GBDC 3 Special Committee was advised by KBW, its outside financial advisor. The GBDC 3 Board and the GBDC 3 Special Committee considered the nature and adequacy of the information provided, including the terms of the Merger Agreement and their duties and statutory standards of conduct under state and federal law in approving the Merger and the conflicts of interest presented by the transactions provided for in the Merger Agreement. The GBDC 3 Board considered numerous factors, including the ones described below, in connection with its consideration and approval of the Merger. On January 16, 2024, the GBDC 3 Board, including all of the GBDC 3 Independent Directors, unanimously determined that the Merger is in the best interests of GBDC 3 and in the best interests of GBDC 3’s stockholders, and that GBDC 3 stockholders will not suffer any dilution for purposes of Rule 17a-8 of the 1940 Act as a result of the Merger.

In considering the Merger, the GBDC 3 Board, with the participation throughout of the GBDC 3 Independent Directors as a group and as members of the GBDC 3 Special Committee, reviewed comparative information about GBDC and GBDC 3 including, among other items: (1) their investment goals, strategies, policies and restrictions; (2) their individual holdings and the quality of such holdings, including, in particular, where such holdings differed between the companies; (3) their valuation policies and procedures; (4) their existing leverage facilities; (5) their short-term and long-term investment performance history and financial results; (6) the amount of past dividends and distributions and the anticipated effect of the Merger on future earnings and distributions by GBDC; (7) the current and historical premium at which GBDC trades; and (8) their respective investment advisory agreements and expense ratios. In addition, the GBDC 3 Board, including the GBDC 3 Independent Directors as a group, reviewed comprehensive information regarding the anticipated immediate benefits and possible risks to each of GBDC and GBDC 3 as a result of the Merger, the anticipated investment, market and financial synergies to be experienced by the combined company over the shorter and longer-term, and the reduction to the incentive fee rates and the incentive fee cap under the New GBDC Investment Advisory Agreement on the combined company. In addition, the GBDC 3 Special Committee also considered the potential financial impacts of the Merger in consultation with KBW, the outside financial advisor to the GBDC 3 Special Committee.

The GBDC 3 Board and the GBDC 3 Special Committee weighed various benefits and risks in considering the Initial Merger, both with respect to the immediate effects of the Merger on GBDC 3 and its stockholders and with respect to the potential benefits that could be experienced by the combined company after the Merger. Some of the material factors considered by the GBDC 3 Board, including the GBDC 3 Independent Directors as a group with respect to the Initial Merger, that assisted it in concluding that the Merger is in the best interests of GBDC 3 and its stockholders included, among others:

Opportunity for Premium to GBDC 3’s NAV per share and Incremental Value from GBDC’s NAV per Share Accretion. The GBDC 3 Board and the GBDC 3 Special Committee considered that the structure of the Exchange Ratio could result in a premium to GBDC 3’s NAV per share to the extent the per share trading price of GBDC Common Stock as of the Determination Date exceeds its NAV per share. The GBDC 3 Board and the GBDC 3 Independent Directors considered that the only other premium-to-NAV merger precedent in the BDC sector was the GBDC-GCIC merger. The GBDC 3 Board and GBDC 3 Special Committee noted that if GBDC shares were not trading at a premium to NAV that a NAV-for-NAV exchange ratio would not result in any dilution to GBDC 3’s stockholders for purposes of Rule 17a-8 of the 1940 Act. The GBDC 3 Board and GBDC 3 Special Committee also noted that a premium-to-NAV transaction would result in accretion to GBDC’s NAV per share, which would benefit all stockholders of the combined company, including former GBDC 3 stockholders.

Increased Scale and Liquidity. The GBDC 3 Board and the GBDC 3 Special Committee considered that the Merger would provide liquidity for the GBDC 3 stockholders as GBDC 3 Common Stock was not currently traded and transfers were restricted by the terms of the subscription agreements executed by GBDC 3 stockholders. In the Merger, GBDC 3 stockholders would receive publicly traded GBDC Common Stock. Additionally, incorporating the assets of GBDC 3 as a result of the Merger would increase GBDC’s market capitalization and make it the fifth largest externally managed, publicly traded BDC based on the total assets of GBDC and GBDC 3 as of September 30, 2023 and one of the two largest publicly-traded BDCs with more than 90% of its investment portfolio oriented towards first lien, senior secured lending. The GBDC 3 Board and the GBDC 3 Special Committee considered that the larger size of the combined company creates the potential for greater secondary market liquidity for GBDC Common Stock, which would inure to the benefit of former GBDC 3 stockholders upon their becoming holders of GBDC Common Stock in the Merger, and could result an increased focus by current and potential investors on the combined company, including institutional investors.

Acquisition of a Known, Diversified Portfolio of Assets. The GBDC 3 Board and the GBDC 3 Special Committee noted that the pro forma portfolio of the combined company would remain similar to GBDC 3’s stand-alone portfolio given significant overlap between the current GBDC 3 and GBDC portfolios.

Improved Access to Long-Term, Low-Cost, Flexible Debt Capital. The GBDC 3 Board and the GBDC 3 Special Committee considered that the larger scale of the combined company could enhance GBDC’s capacity to a wider array of debt funding solutions and potential borrowing cost reductions. The GBDC 3 Board and the GBDC 3 Special Committee discussed how the combined company may have an opportunity to improve its liability profile because larger BDCs have historically issued debt securities in the institutional bond market at tighter coupons given greater scale and ability to drive improved liquidity in bond tranches.

Potential for Operational Synergies. The GBDC 3 Board and the GBDC 3 Special Committee considered that the Merger offered the potential to create operating synergies due to the elimination of redundant professional services and other corporate expenses.

More Favorable Incentive Fee Structure. The GBDC 3 Board and the GBDC 3 Special Committee noted that both the New GBDC Investment Advisory Agreement had a higher hurdle rate than the GBDC 3 Investment Advisory Agreement and that the base management fee rate and incentive fee rates under the New GBDC Investment Advisory Agreement were the same as the existing pre-liquidity event terms under the GBDC 3 Investment Advisory Agreement and lower than the existing post-liquidity event terms under the GBDC 3 Investment Advisory Agreement. The GBDC 3 Board and the GBDC 3 Special Committee discussed the New GBDC Investment Advisory Agreement and the proposed reduction to the incentive fee rates and the incentive fee cap. See “Description of the New GBDC Investment Advisory Agreement” for a discussion of the proposed amendments to the Current GBDC Investment Advisory Agreement.

The GBDC 3 Board and the GBDC 3 Special Committee also considered that GC Advisors had agreed to irrevocably waive any Subordinated Liquidation Incentive Fee payable to the extent that the Exchange Ratio resulted in GBDC acquiring GBDC 3 at a premium to NAV.

Investment Strategies and Risks. The GBDC 3 Board and the GBDC 3 Special Committee reviewed both GBDC 3’s and GBDC’s investment program and noted that they have identical investment objectives and substantially similar strategies and risks and that each focuses on primarily investing in one stop and other senior secured loans to resilient companies with partnership-oriented private equity sponsors across a range of industries. The GBDC 3 Board and the GBDC 3 Special Committee took into consideration that GBDC 3 and GBDC are each managed by GC Advisors and, after the Merger, GBDC 3 stockholders would be invested in a similarly structured investment vehicle and that their investment experience would likely be comparable in the combined entity.

Continuity of GC Advisors and Management Team. The GBDC 3 Board and the GBDC 3 Special Committee considered that the combined company would have the same investment advisor and management team that have already been considered and approved by the GBDC 3 Board and the GBDC 3 Independent Directors. The GBDC 3 Board, including the GBDC 3 Independent Directors, separately as a group, believed that, because there would be no change in the investment advisor, the combined entity and the GBDC 3 stockholders would receive the same quality of services from the GC Advisors as they are currently receiving and would continue to benefit from the experience and expertise of its current portfolio management and credit team. In addition, they noted that under the New GBDC Investment Advisory Agreement, the advisory fees paid by the combined company would be substantially the same as those by GBDC 3 other than a higher hurdle rate under the New GBDC Investment Advisory Agreement, which is more favorable to stockholders. In this regard, the GBDC 3 Board and the GBDC 3 Special Committee viewed favorably the overall investment and operational performance of GC Advisors, as well as GC Advisors’ demonstrated competence in evaluating and effectively arranging for Merger for the benefit of stockholders.

Tax Consequences of the Merger. It is expected that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. GBDC 3 stockholders are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of GBDC 3 Common Stock for shares of GBDC Common Stock pursuant to the Merger, except with respect to cash received in lieu of fractional shares of GBDC Common Stock. GBDC 3 stockholders will receive a distribution of their proportionate share of GBDC 3’s undistributed net investment income and net realized gains, if any, prior to or shortly after the completion of the Merger that generally will be taxable to taxable stockholders for U.S. federal, state and local income tax purposes. This distribution may include return of capital which would generally result in a reduction in basis.

Opinion of Financial Advisor. The GBDC 3 Board and the GBDC 3 Special Committee considered an opinion, dated January 16, 2024, of KBW to the GBDC 3 Special Committee and, at the request of the GBDC 3 Special Committee, the GBDC 3 Board as to the fairness, from a financial point of view and as of the date of the opinion, to holders of GBDC 3 Common Stock of the exchange ratio in the proposed Initial Merger, as more fully described below in the section entitled “—Opinion of the GBDC 3 Special Committee’s Financial Advisor.”

In the course of its deliberations, The GBDC 3 Board and the GBDC 3 Special Committee also considered a variety of risks and other potentially negative factors, including the following (which are not in any relative order of importance):

•               Failure to Close. It is possible that the Merger may not be completed or that completion may be unduly delayed for reasons beyond the control of GBDC 3 or GBDC.

•               Management Diversion. It is possible that the attention of management may be diverted during the period prior to completion of the Merger, which may adversely affect GBDC 3’s business.

•               Restrictions on Conduct of Business. The restrictions on the conduct of GBDC 3’s business prior to completion of the Merger, requiring GBDC 3 to conduct its business only in the ordinary course of business in all material respects, subject to specific limitations, could delay or prevent GBDC 3 from undertaking business opportunities that may arise pending completion of the Merger.

•               Restrictions on Superior Proposals. The Merger Agreement includes restrictions on the ability of GBDC 3 to solicit proposals for alternative transactions or engage in discussions regarding such proposals, subject to exceptions and termination provisions (as more fully described in the section entitled “Description of the Merger Agreement—Additional Agreements” beginning on page 72), which could have the effect of discouraging such proposals from being made or pursued.

•               Fees Associated with the Merger. In general, GBDC 3 will be responsible for the expenses incurred by GBDC 3 in connection with the Merger and the completion of the transactions contemplated by the Merger Agreement, whether or not the Merger is consummated, including half of the costs and expenses of any filing and other fees payable by GBDC 3 to the SEC in connection with the Merger.

•               Absence of Appraisal Rights. GBDC 3 stockholders are not entitled to appraisal rights under Maryland law.

•               Other Risks. There are various other risks associated with the Merger and the business of GBDC 3 and the combined company described in the section entitled “Risk Factors” beginning on page 19 and in the section entitled “Special Note Regarding Forward-Looking Statements” beginning on page 32.

This discussion of the information and factors that the GBDC 3 Board and the GBDC 3 Special Committee considered in making its decision is not intended to be exhaustive, but includes the material factors considered by the GBDC 3 Board and the GBDC 3 Special Committee. Because of the wide variety of factors considered in connection with its evaluation of the Merger and Merger Agreement and the complexity of those matters, the GBDC 3 Board and the GBDC 3 Special Committee did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors. In addition, the individual members of the GBDC 3 Board may have given different weights to different factors.

The GBDC 3 Special Committee consulted with KBW, as its financial advisor, in evaluating the financial terms of the Merger. In addition, the GBDC 3 Board relied on its legal advisors for legal analysis in connection with the Merger.

The GBDC 3 Board and the GBDC 3 Special Committee considered all of these factors and others as a whole and, on balance, determined the Merger to be in the best interests of GBDC 3 and GBDC 3’s stockholders and unanimously approved the Merger and the Merger Agreement.

GBDC Board Recommendation

The GBDC Board, including, after separate meetings and discussion, the GBDC Special Committee, has unanimously approved (i) the Merger Agreement and related transactions, including the Merger, (ii) the issuance of shares of GBDC Common Stock pursuant to the Merger Agreement and (iii) the amendment of the Current GBDC Investment Advisory Agreement. The GBDC Board, including each of the GBDC Independent Directors, unanimously recommends that GBDC stockholders vote “FOR” the Merger Stock Issuance Proposal.

GBDC 3 Board Recommendation

The GBDC 3 Board, including, after separate meetings and discussion, the GBDC 3 Special Committee, has unanimously approved the Merger Agreement and related transactions, including the Merger, and unanimously recommends that GBDC 3 stockholders vote “FOR” the Merger Proposal. 

Opinion of the GBDC Special Committee’s Financial Advisor

The GBDC Special Committee retained Morgan Stanley & Co. LLC (“Morgan Stanley”) to provide it with financial advisory services in connection with the Merger and to provide a financial opinion to the GBDC Special Committee and, if requested, the GBDC Board.

The GBDC Special Committee selected Morgan Stanley to act as its financial advisor based on Morgan Stanley’s qualifications, expertise and reputation and its knowledge of the business and affairs of GBDC. On January 16, 2024, at a meeting of the GBDC Special Committee, Morgan Stanley rendered its oral opinion, subsequently confirmed by delivery of a written opinion addressed to the GBDC Special Committee and the GBDC Board, dated January 16, 2024, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in the written opinion, that, based upon GBDC management’s estimates (the “March Estimates”) that the GBDC Per Share NAV will be approximately $15.12 as of March 31, 2024 and the GBDC 3 Per Share NAV will be approximately $14.70 as of March 31, 2024 and assuming the GBDC Common Stock Price is equal to or lesser than the GBDC Per Share NAV (the “Stock Price Assumption”), the resulting Exchange Ratio of 0.9726 shares of GBDC Common Stock per share of GBDC 3 Common Stock, was fair from a financial point of view to GBDC.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Annex D to this joint proxy statement/prospectus and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Morgan Stanley in preparing the opinion.

The full text of Morgan Stanley’s written opinion, dated January 16, 2024, which sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken in connection with the opinion, is attached as Annex D to this joint proxy statement/prospectus and is incorporated by reference herein in its entirety. GBDC stockholders should read Morgan Stanley’s opinion carefully and in its entirety for a discussion of the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion. This summary is qualified in its entirety by reference to the full text of such opinion. Morgan Stanley’s opinion was directed to the GBDC Special Committee, in its capacity as such, and the GBDC Board, in its capacity as such, and addressed only the fairness from a financial point of view to GBDC of the Exchange Ratio, based on the March Estimates and the Stock Price Assumption, as of the date of such opinion. Morgan Stanley’s opinion did not address any other aspects or implications of the Merger. Morgan Stanley’s opinion did not in any manner address the prices at which the GBDC Common Stock would trade following the consummation of the Merger or at any time. Morgan Stanley expressed no opinion or recommendation to any holder of shares of GBDC Common Stock or GBDC 3 Common Stock as to how such holder should vote at the GBDC Special Meeting or the GBDC 3 Special Meeting, respectively, or in connection with any other matter. Nor did Morgan Stanley express any opinion as to the NAV per share of GBDC Common Stock or GBDC 3 Common Stock or what the GBDC Per Share NAV or GBDC 3 Per Share NAV will be at any time.

For purposes of rendering its opinion, Morgan Stanley:

Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to Morgan Stanley by or on behalf of GC Advisors, GBDC and GBDC 3, and formed a substantial basis for its opinion. With respect to the financial projections, including information relating to certain strategic, financial and operational benefits anticipated from the Merger, Morgan Stanley assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of GC Advisors, GBDC and GBDC 3 of the future financial performance of GBDC and GBDC 3. In particular, Morgan Stanley noted that it was not an expert in the evaluation of loans and had not reviewed or analyzed any individual loans or the potential performance thereof. In addition, Morgan Stanley assumed that the Merger would be consummated in accordance with the terms set forth in the Merger Agreement without any waiver, amendment or delay of any terms or conditions, including, among other things, that the Merger would be treated as a tax-free reorganization pursuant to the Code, and that the definitive Merger Agreement would not differ from the draft thereof furnished to Morgan Stanley in any respect material to its analysis. Morgan Stanley assumed that in connection with the receipt of all necessary governmental, regulatory or other approvals and consents required for the Merger, no delays, limitations, conditions or restrictions would be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the Merger. Morgan Stanley noted that it was not a legal, tax or regulatory advisor. Morgan Stanley noted that it was a financial advisor only and relied upon, without independent verification, the assessment of GBDC and its legal, tax or regulatory advisors with respect to legal, tax and regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of the officers, directors or employees of any party to the Merger, or any class of such persons, including GC Advisors, whether relative to the Exchange Ratio or otherwise. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities of GBDC, GBDC 3 or any of their subsidiaries, nor was Morgan Stanley furnished with any such valuations or appraisals. Morgan Stanley expressed no view on, and Morgan Stanley’s opinion did not address, any other term or aspect of the Merger Agreement or the transactions contemplated thereby or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection therewith.

Morgan Stanley’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information, including the March Estimates and the Stock Price Assumption, made available to Morgan Stanley as of, the date of its opinion. Events occurring after the date of Morgan Stanley’s opinion may affect Morgan Stanley’s opinion and the assumptions used in preparing it, and Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion.

Summary of Analyses of Morgan Stanley

The following is a brief summary of the material financial analysis performed by Morgan Stanley in connection with the preparation of its opinion to the GBDC Special Committee. The following summary is not a complete description of Morgan Stanley’s opinion, or the financial analyses performed and factors considered by Morgan Stanley in connection with its opinion, nor does the order of analyses described represent the relative importance or weight given to those analyses. In connection with arriving at its opinion, Morgan Stanley considered all of its analyses as a whole and did not attribute any particular weight to any analysis described below. Considering any portion of such analyses and factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Morgan Stanley’s opinion. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before January 12, 2024, and is not necessarily indicative of current market conditions. Some of the summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses.

In performing the financial analyses summarized below and in arriving at its opinion, Morgan Stanley utilized and relied upon certain financial projections, including the March Estimates, provided by GC Advisors on behalf of GBDC and GBDC 3 and approved by the GBDC Special Committee.

Implied Value of the Merger Consideration

Based on the Exchange Ratio of 0.9726x implied by the March Estimates and the Stock Price Assumption, Morgan Stanley calculated an implied value for the Merger Consideration to be received by holders of GBDC 3 Common Stock of $14.70 per share based on an assumed per share price of GBDC Common Stock of $15.12 at closing. Morgan Stanley compared these implied values to the ranges of implied value per share of GBDC 3 Common Stock in the financial analyses described below. For purposes of its analysis, Morgan Stanley calculated all implied values per share utilizing the number of outstanding shares of GBDC 3 Common Stock, and the number of outstanding shares of GBDC Common Stock estimated to be outstanding on the assumed Closing Date based on projections provided by GC Advisors.

Comparable Companies Analysis

Morgan Stanley performed a comparable companies analysis, which attempts to provide an implied value of a company by comparing it to similar companies that are publicly traded. Using publicly available information, Morgan Stanley compared the market performance of GBDC and the following eight (8) publicly traded, externally managed BDCs with more than $2.5 billion in total assets, more than 60% of investments in senior secured loans, and realized losses limited to no more than fifty (50) basis points of the investment portfolio, referred to as the comparable companies:

For each of the comparable companies, Morgan Stanley calculated the ratio of such company’s stock price as of January 12, 2024 to both NAV per share as of the end of the most recent completed quarterly period for which information was publicly available (which, in each case, was September 30, 2023) and estimated 2024 estimated net investment income (“2024E NII”) based on median Wall Street equity research consensus estimates.

The following table presents the results of this analysis:

Based on the results of this analysis and its professional judgment, Morgan Stanley applied the bottom and top quartile price-to-NAV multiples of the comparable companies to the estimated $14.70 NAV per share of GBDC 3 in the March Estimates, and the bottom and top quartile price-to-2024E NII multiples of the comparable companies to the $1.49 estimated 2024 NII per share of GBDC 3, using financial forecasts and projections for GBDC 3 provided by GC Advisors (adjusted for the incentive fee waiver of $14.8 million during the quarter ending December 31, 2023) to derive implied equity value ranges for the GBDC 3 Common Stock. The following table presents the results of this analysis:

Morgan Stanley compared these ranges of implied equity value to the implied value for the Merger Consideration to be received by holders of GBDC 3 Common Stock of $14.70 based on the Exchange Ratio implied by the March Estimates and the Stock Price Assumption.

No company used as a comparison in the above comparable companies analysis is identical to GBDC 3 or GBDC. In evaluating the comparable companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of GBDC 3 and GBDC. These include, among other things, the impact of competition on the business of GBDC 3 and GBDC and the industry generally, industry growth and the absence of any adverse material change in the financial conditions and prospects of GBDC 3, GBDC and the industry, and in the financial markets in general. Mathematical analysis (such as determining a median) is not, in itself, a meaningful method of using comparable company data. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Precedent Transactions Analysis

Morgan Stanley performed a precedent transactions analysis, which is designed to imply a value of a company based on publicly available financial terms of one or several precedent transactions. Morgan Stanley reviewed publicly available information related to the three (3) acquisitions of BDCs announced since January 1, 2018 (excluding if an internalization occurred and/or if three parties were involved), referred to as the precedent BDC transactions.

For each precedent BDC transaction, Morgan Stanley reviewed the ratio of purchase price to NAV per share and the ratio of purchase price to net investment income for the last twelve months (“LTM NII”) of the acquired company. The following table lists the precedent BDC transactions and the results of this analysis:

Based on the results of this analysis and its professional judgment, Morgan Stanley applied the low and high purchase price to NAV multiples of the precedent BDC transactions to the estimated $14.70 NAV per share of GBDC 3 in the March Estimates to derive a range of implied equity value for the GBDC 3 Common Stock of $13.38 to $15.88 per share, and applied a range of purchase price to LTM NII multiples of 9.7x to 10.7x (based on the median multiple for the precedent BDC transactions plus or minus 0.5x) to the estimated $1.45 LTM NII per share of GBDC 3 as of September 30, 2023 based on average shares outstanding during the quarter to derive a range of implied equity value for the GBDC 3 Common Stock of $14.11 to $15.56 per share. Morgan Stanley compared this range of implied equity value to the implied value for the Merger Consideration to be received by holders of GBDC 3 Common Stock of $14.70 based on the Exchange Ratio implied by the March Estimates and the Stock Price Assumption.

No company or transaction used as a comparison in the above precedent transactions analysis is identical to GBDC 3, GBDC or the Merger. In evaluating the precedent BDC transactions, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of GBDC 3 and GBDC. These include, among other things, the impact of competition on the business of GBDC 3 and GBDC and the industry generally, industry growth and the absence of any adverse material change in the financial conditions and prospects of GBDC 3, GBDC and the industry, and in the financial markets in general. Mathematical analysis (such as determining a median) is not, in itself, a meaningful method of using precedent transactions data. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Other Information

Morgan Stanley observed additional factors that were not considered part of Morgan Stanley’s financial analysis with respect to its opinion, but which were noted as reference data for the GBDC Special Committee, including the following:

Illustrative Pro Forma Contribution Analysis

Morgan Stanley performed an illustrative contribution analysis comparing the equity values for each of GBDC and GBDC 3 on a standalone basis (without taking into account any transaction-related impacts or cost savings), based on (i) assets as of September 30, 2023, (ii) NAV as of September 30, 2023, (iii) estimated NAV for March 31, 2024, (iv) estimated net investment income for fiscal year 2024 (“2024E NII”), and (v) estimated earnings for fiscal year 2024 (“2024E Earnings”), calculated based on information provided by GBDC management. In the case of the analyses described in clauses (iv) and (v), GBDC NII and earnings were adjusted for GCIC acquisition purchase premium amortization and GBDC 3 NII and earnings were adjusted for the incentive fee waiver of $14.8 million during the quarter ending December 31, 2023.

These analyses yielded the following ranges of implied equity contribution to the combined company:

Morgan Stanley noted that GBDC’s relative contribution on a 2024E NII and 2024E Earnings basis exceeded its relative contribution on a March 31, 2024 estimated NAV basis due in part to comparatively higher leverage at GBDC.

Illustrative Pro Forma Impact at Various Prices

Morgan Stanley performed an illustrative analysis of the pro forma impact of the Merger on GBDC’s (i) projected 2025 net investment income per share (“2025 NII/Share”), taking into account synergies and incentive fees projected by GC Advisors, and (ii) projected NAV per share (“NAV/Share”) as of March 31, 2024, in each case, based on a range of assumptions regarding the price per share of GBDC Common Stock as of the closing and a range of assumptions regarding the GBDC price to NAV multiple as of the closing resulting in a range of exchange ratios of 0.8703 to 0.9726 shares of GBDC Common Stock per share of GBDC 3 Common Stock. Morgan Stanley noted that the Merger was accretive to both projected 2025 NII/Share and projected NAV/Share as of March 31, 2024 under each of the scenarios considered. This analysis excluded the impact on NAV of cash transaction expenses and acceleration of unamortized debt issuance costs of GBDC 3.

In connection with the review of the Merger by the GBDC Special Committee, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of GBDC or GBDC 3. In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of GBDC or GBDC 3. Any estimates contained in Morgan Stanley’s analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness from a financial point of view of the Exchange Ratio pursuant to the Merger Agreement to GBDC and in connection with the delivery of its opinion, dated January 16, 2024 to the GBDC Special Committee and the GBDC Board. These analyses do not purport to be appraisals or to reflect the prices at which the GBDC Common Stock or GBDC 3 Common Stock might actually trade. The Exchange Ratio pursuant to the Merger Agreement was determined by GBDC and GBDC 3 through arm’s-length negotiations between the GBDC Special Committee and the GBDC 3 Special Committee and was approved by the GBDC Special Committee and the GBDC Board. Morgan Stanley provided advice to the GBDC Special Committee during these negotiations. Morgan Stanley did not, however, recommend any specific exchange ratio or consideration to GBDC or the GBDC Special Committee, nor did Morgan Stanley opine that any specific exchange ratio or consideration constituted the only appropriate consideration for the Merger. Morgan Stanley’s opinion did not address the relative merits of the transactions contemplated by the Merger Agreement as compared to other business or financial strategies that might have been available to GBDC, nor did Morgan Stanley’s opinion address the underlying business decision of GBDC to enter into the Merger Agreement or proceed with any other transaction contemplated by the Merger Agreement.

Morgan Stanley’s opinion and its presentation to the GBDC Special Committee was one of many factors taken into consideration by the GBDC Special Committee in approving the Merger Agreement and the transactions contemplated thereby, including the Merger. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the GBDC Special Committee with respect to the Exchange Ratio pursuant to the Merger Agreement or whether the GBDC Committee would have been willing to agree to a different exchange ratio. Morgan Stanley’s opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with Morgan Stanley’s customary practice.

The GBDC Special Committee retained Morgan Stanley based upon Morgan Stanley’s qualifications, experience and expertise. Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Its securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of their customers, in debt or equity securities or loans of GBDC, GBDC 3 or any other company, or any currency or commodity, that may be involved in the transactions contemplated by the Merger, or any related derivative instrument.

Under the terms of its engagement letter, Morgan Stanley provided the GBDC Special Committee with financial advisory services and a financial opinion described in this section and attached as Annex D to this joint proxy statement and prospectus in connection with the Merger, and GBDC has agreed to pay Morgan Stanley a fee of $2.0 million for its services, of which $250,000 became payable on January 16, 2024 and the remainder of which is contingent upon completion of the Merger. GBDC has also agreed to reimburse Morgan Stanley for its reasonable expenses, including reasonable fees of outside counsel and other professional advisors, incurred in connection with its engagement. In addition, GBDC has agreed to indemnify Morgan Stanley and its affiliates, their respective officers, directors, employees and agents and each other person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses, including certain liabilities under the federal securities laws, relating to or arising out of Morgan Stanley’s engagement.

In the two years prior to the date of Morgan Stanley’s opinion, Morgan Stanley has provided financing services unrelated to the Merger for GBDC and has received fees in connection with such services of less than $1 million. In the two years prior to the date of Morgan Stanley’s opinion, Morgan Stanley did not receive fees from GBDC 3, the Administrator or GC Advisors for financial advisory or financing services. In addition, Morgan Stanley or an affiliate of Morgan Stanley is a lender to GBDC. Morgan Stanley may also seek to provide financial advisory and financing services to GBDC, GBDC 3 and their respective affiliates in the future and would expect to receive fees for the rendering of these services.

Opinion of the GBDC 3 Special Committee’s Financial Advisor

GBDC 3 engaged Keefe, Bruyette & Woods, Inc. (“KBW”) to render financial advisory and investment banking services to the GBDC 3 Special Committee, including an opinion to the GBDC 3 Special Committee and, as requested by the GBDC 3 Special Committee, the GBDC 3 Board, as to the fairness, from a financial point of view, to the holders of GBDC 3 common stock of the exchange ratio in the Initial Merger. GBDC 3 selected KBW because KBW is a nationally recognized investment banking firm with substantial experience in transactions similar to the proposed transaction.

As part of its engagement, on January 16, 2024 at a meeting of the GBDC 3 Special Committee, KBW reviewed the financial aspects of the proposed transaction and rendered an opinion to the GBDC 3 Special Committee and the GBDC 3 Board to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the Initial Merger was fair, from a financial point of view, to the holders of GBDC 3 common stock.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Annex C to this document and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion.

KBW’s opinion speaks only as of the date of the opinion. The opinion was for the information of, and was directed to, the GBDC 3 Special Committee (in its capacity as such) and, as requested by the GBDC 3 Special Committee, the GBDC 3 Board (in its capacity as such) in connection with their respective consideration of the financial terms of the transaction. The opinion addressed only the fairness, from a financial point of view, of the exchange ratio in the Initial Merger to the holders of GBDC 3 common stock. It did not address the underlying business decision of GBDC 3 to engage in the transaction or enter into the merger agreement or constitute a recommendation to the GBDC 3 Special Committee or the GBDC 3 Board in connection with the transaction, and it does not constitute a recommendation to any holder of GBDC 3 common stock or any stockholder of any other entity as to how to vote or act in connection with the transaction or any other matter, nor does it constitute a recommendation as to whether or not any such stockholder should enter into a voting, stockholders’, affiliates’ or other agreement with respect to the transaction or exercise any dissenters’ or appraisal rights that may be available to such stockholder.

KBW’s opinion was reviewed and approved by KBW’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

With the consent of GBDC 3 and the GBDC 3 Special Committee, KBW assumed, without independent verification, for purposes of its analyses and opinion, that the GBDC 3 Per Share NAV would be $14.70, that, if the GBDC Common Stock Price were equal to the closing price per share of GBDC common stock on January 12, 2024 and if the GBDC Per Share NAV were equal to the publicly reported September 30, 2023 net asset value per share of GBDC common stock, the GBDC 3 Share of GBDC Premium will be .0072, and that, as a result of the foregoing, the exchange ratio in the Initial Merger of shares of GBDC common stock for each share of GBDC 3 common stock would be 0.9717x.

In connection with the opinion, KBW reviewed, analyzed and relied upon material bearing upon the financial and operating condition of GBDC 3 and GBDC and bearing upon the transaction, including, among other things: 

KBW’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analyses included, among others, the following:

KBW also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the business development company industry generally. KBW also participated in discussions with GC Advisors’ management regarding the past and current business operations, regulatory relations, financial condition and future prospects of GBDC 3 and GBDC and such other matters as KBW deemed relevant to its inquiry. KBW was not requested to assist, and did not assist, the GBDC 3 Special Committee and GBDC 3 with soliciting indications of interest from third parties regarding a potential transaction with GBDC 3.

In conducting its review and arriving at its opinion, KBW relied upon and assumed the accuracy and completeness of all of the financial and other information provided to or discussed with KBW or that was publicly available and did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification, accuracy or completeness. KBW relied, with the consent of GBDC 3 and the GBDC 3 Special Committee, upon GC Advisors’ management, as to the reasonableness and achievability of the financial and operating forecasts and projections of GBDC 3 and GBDC and the estimates regarding certain pro forma financial effects of the transaction on GBDC (including, without limitation, the cost savings, operating synergies and revenue enhancements expected to result or be derived from the transaction), all as referred to above (and the assumptions and bases for all such information), and KBW assumed that all such information were reasonably prepared and represented the best currently available estimates and judgments of GC Advisors’ management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated by GC Advisors’ management.

It is understood that the foregoing financial information of GBDC 3 and GBDC that was provided to KBW was not prepared with the expectation of public disclosure and that all of the foregoing financial information was based on numerous variables and assumptions that are inherently uncertain (including, without limitation, factors related to general economic and competitive conditions and, in particular, the widespread disruption, extraordinary uncertainty and unusual volatility arising from global tensions and political unrest, economic uncertainty, inflation, rising interest rates and the COVID-19 pandemic, including the effect of evolving governmental interventions and non-interventions) and, accordingly, actual results could vary significantly from those set forth in such information. KBW assumed, based on discussions with GC Advisors’ management, and with the consent of GBDC 3 and the GBDC 3 Special Committee, that all such information provided a reasonable basis upon which KBW could form its opinion, and KBW expressed no view as to any such information or the assumptions or bases therefor. KBW relied on all such information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

KBW also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either GBDC 3 or GBDC since the date of the last financial statements of each such entity that were made available to KBW. In rendering its opinion, KBW did not make or obtain any evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of GBDC 3 or GBDC, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor did KBW examine any individual loan or credit files, nor did it evaluate the solvency, financial capability or fair value of GBDC 3 or GBDC under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. KBW expressed no view as to the value of any investment asset owned by GBDC 3 or GBDC that was used in connection with the net asset value computations made by GBDC 3 or GBDC or the valuation policies and procedures of GBDC 3 or GBDC in connection therewith. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Such estimates are inherently subject to uncertainty and should not be taken as KBW’s view of the actual value of any companies or assets.

KBW assumed, in all respects material to its analyses, the following:

KBW assumed that the transaction would be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. KBW was further advised by representatives of GBDC 3 that GBDC 3 relied upon advice from its advisors (other than KBW) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to GBDC 3, GBDC, Merger Sub, the transaction and any related transaction, and the merger agreement. KBW did not provide advice with respect to any such matters.

KBW’s opinion addressed only the fairness, from a financial point of view, as of the date of such opinion, of the exchange ratio in the Initial Merger to the holders of GBDC 3 common stock. KBW expressed no view or opinion as to any other terms or aspects of the transaction or any term or aspect of any related transaction (including the termination of the GBDC 3 Investment Advisory Agreement, the GBDC 3 Administration Agreement and the GBDC 3 Trademark License Agreement or the entry into an amended and restated investment advisory agreement by GBDC and GC Advisors), including without limitation, the form or structure of the transaction or any such related transaction, any consequences of the transaction or any related transaction to GBDC 3, its stockholders, creditors or otherwise, or any terms, aspects, merits or implications of any employment, consulting, voting, support, stockholder or other agreements, arrangements or understandings contemplated or entered into in connection with the transaction, any such related transaction, or otherwise. KBW’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of the opinion and the information made available to KBW through the date of the opinion. There has been significant volatility in the stock and other financial markets arising from global tensions and political unrest, economic uncertainty, inflation, rising interest rates and the COVID-19 pandemic, including the effect of evolving governmental interventions and non-interventions. Developments subsequent to the date of KBW’s opinion may have affected and may affect the conclusion reached in KBW’s opinion and KBW did not and does not have an obligation to update, revise or reaffirm its opinion. KBW expressed no view or opinion as to any changes to the GBDC Common Stock Price, the GBDC 3 Per Share NAV, the GBDC Per Share NAV or the GBDC 3 Share of GBDC Premium after the date of KBW’s opinion from the respective values thereof that KBW assumed for purposes of its analyses and opinion. KBW’s opinion did not address, and KBW expressed no view or opinion with respect to:

In performing its analyses, KBW made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of KBW, GBDC 3 and GBDC. Any estimates contained in the analyses performed by KBW are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, the KBW opinion was among several factors taken into consideration by the GBDC 3 Special Committee in making its determination to recommend the approval by the GBDC 3 Board of the merger agreement and the transaction and by the GBDC 3 Board in making its determination to approve the merger agreement and the transaction. Consequently, the analyses described below should not be viewed as determinative of the decision of the GBDC 3 Special Committee or the GBDC 3 Board with respect to the fairness of the exchange ratio. The type and amount of consideration payable in the transactions contemplated by the merger agreement, including the initial merger, were determined through negotiation between GBDC 3 and GBDC and the decision of GBDC 3 to enter into the merger agreement was solely that of the GBDC 3 Special Committee and the GBDC 3 Board.

The following is a summary of the material financial analyses presented by KBW to the GBDC 3 Special Committee in connection with its opinion. The summary is not a complete description of the financial analyses underlying the opinion or the presentation made by KBW to the GBDC 3 Special Committee, but summarizes the material analyses performed and presented in connection with such opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex analytic process involving various determinations as to appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, KBW did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, KBW believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion.

Implied Transaction Value for the Transaction. KBW calculated an implied transaction value for the proposed transaction of $14.81 per outstanding share of GBDC 3 common stock based on an assumed 0.9717x exchange ratio and the closing price of GBDC common stock on January 12, 2024. This implied transaction value for the proposed transaction was used to calculate implied transaction multiples and those multiples were compared to the low, 25^th percentile, median, average, 75^th percentile and high multiples shown in the financial analyses of GBDC 3 described below. This implied transaction value for the proposed transaction was also compared to the ranges of implied value per share of GBDC 3 common stock in the financial analyses of GBDC 3 described below.

Selected Companies Analysis of GBDC 3. Using publicly available information, KBW reviewed, among other things, the market performance of 15 selected publicly traded, externally managed business development companies with market capitalizations greater than $700 million, which selected companies included GBDC. Prospect Capital Corporation was excluded from the selected companies due to certain asset characteristics.

The selected companies were as follows (shown in descending order of market capitalization):

To perform this analysis, KBW used market price information as of January 12, 2024, reported net asset value (“NAV”) per share data as of the end of the most recent completed quarterly period available and latest 12 months (“LTM”) reported net investment income per share (“NII”) of the selected companies. KBW also used calendar years 2023 and 2024 NII estimates taken from consensus “street estimates” of the selected companies.

KBW’s analysis showed the following concerning the market performance of the selected companies, as well as corresponding implied transaction multiples for the proposed transaction based on the implied transaction value for the proposed transaction of $14.81 per outstanding share of GBDC 3 common stock, which corresponding implied transaction multiples were calculated using financial forecasts and projections of GBDC 3 provided by GC Advisors:

KBW then applied a range of price-to-NAV per share multiples of 0.89x to 1.07x derived from the 25^th percentile and 75^th percentile multiples of the selected companies to the estimated March 31, 2024 NAV per share of GBDC 3, using financial forecasts and projections of GBDC 3 provided by GC Advisors. KBW then applied a range of price-to-estimated calendar year 2023 NII multiples of 7.41x to 8.59x derived from the 25^th percentile and 75^th percentile multiples of the selected companies to the estimated calendar year 2023 NII of GBDC 3, which was taken from financial forecasts and projections of GBDC 3 provided by GC Advisors, and a range of price-to-estimated calendar year 2024 NII multiples of 7.73x to 8.79x derived from the 25^th percentile and 75^th percentile multiples of the selected companies to the estimated calendar year 2024 NII of GBDC 3, which was also taken from financial forecasts and projections of GBDC 3 provided by GC Advisors. This analysis indicated the following ranges of the implied value per share of GBDC 3 common stock, as compared to the implied transaction value for the proposed transaction of $14.81 per outstanding share of GBDC 3 common stock:

No company used as a comparison in the above selected companies analysis is identical to GBDC 3. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Selected Companies Analysis of GBDC. Using publicly available information, KBW reviewed, among other things, the market performance of 14 selected publicly traded, externally managed business development companies with market capitalizations greater than $700 million. Prospect Capital Corporation was excluded from the selected companies due to certain asset characteristics.

The selected companies were as follows (shown in descending order of market capitalization):

To perform this analysis, KBW used market price information as of January 12, 2024, reported NAV per share data as of the end of the most recent completed quarterly period available and LTM reported NII of the selected companies. KBW also used calendar years 2023 and 2024 NII estimates taken from consensus “street estimates” of the selected companies.

KBW’s analysis showed the following concerning the market performance of the selected companies, as well as corresponding implied multiples for GBDC based on the closing price of GBDC common stock on January 12, 2024, which corresponding implied multiples were calculated using financial forecasts and projections of GBDC provided by GC Advisors:

No company used as a comparison in the above selected companies analysis is identical to GBDC. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Selected Transactions Analysis. KBW reviewed publicly available information related to 23 selected acquisitions of U.S. business development companies announced since the beginning of 2015.

The selected transactions were as follows:

For each selected transaction, KBW derived the following implied transaction statistics, in each case based on the transaction consideration value paid for the acquired company (including contributions by external managers) and using financial data based on the acquired company’s then latest publicly available financial statements prior to the announcement of the respective transaction (adjusted to reflect announced pre-closing adjustments):

KBW also reviewed the price per common share paid for the acquired company for the 16 selected transactions involving publicly traded acquired companies as a premium/(discount) to the closing price of the acquired company one day and 30 days prior to the announcement of the respective transaction (expressed as percentages and referred to as the one-day market premium and the 30-day market premium). The resulting transaction statistics for the selected transactions were compared with the corresponding implied transaction statistics for the proposed transaction based on the implied transaction value for the proposed transaction of $14.81 per outstanding share of GBDC 3 common stock, which corresponding implied transaction statistics were calculated using financial forecasts and projections of GBDC 3 provided by GC Advisors.

All Selected Transactions. KBW’s analysis showed the following concerning the proposed transaction and the selected transactions (excluding the impact of the price-to-LTM NII per share of five of the selected transactions, which multiples were considered to be not meaningful because they were either negative or greater than 40.0x):

KBW then applied a range of price-to-NAV per share multiples of 0.78x to 1.00x derived from the 25^th percentile and 75^th percentile multiples of the selected transactions to the estimated March 31, 2024 NAV per share of GBDC 3, using financial forecasts and projections of GBDC 3 provided by GC Advisors. KBW then applied a range of price-to-LTM NII multiples of 9.72x to 13.16x derived from the 25^th percentile and 75^th percentile multiples of the selected transactions to the estimated NII of GBDC 3 for the 12-month period ending March 31, 2024, using financial forecasts and projections of GBDC 3 provided by GC Advisors. This analysis indicated the following ranges of the implied value per share of GBDC 3 common stock, as compared to the implied transaction value for the proposed transaction of $14.81 per outstanding share of GBDC 3 common stock:

Selected Transactions Involving Affiliates. KBW’s analysis also showed the following concerning the proposed transaction and the 10 selected transactions involving affiliate mergers (Franklin BSP Capital Corporation/Franklin BSP Lending Corporation, BlackRock TCP Capital Corp./BlackRock Capital Investment Corporation, Oaktree Specialty Lending Corporation/Oaktree Strategic Income II, Inc., SLR Investment Corporation/SLR Senior Investment Corporation, FS KKR Capital Corp./FS KKR Capital Corp. II, Oaktree Specialty Lending Corporation/Oaktree Strategic Income Corporation, Goldman Sachs BDC, Inc./Goldman Sachs Middle Market Lending Corporation, FS Investment Corporation II/FS Investment Corporation III (and others), Golub Capital BDC, Inc./Golub Capital Investment Corporation, FS Investment Corporation/Corporate Capital Trust, Inc.), six of which selected transactions involved publicly traded acquired companies:

KBW then applied a range of price-to-NAV per share multiples of 0.88x to 0.99x derived from the 25^th percentile and 75^th percentile multiples of the selected transactions involving affiliates to the estimated March 31, 2024 NAV per share of GBDC 3, using financial forecasts and projections of GBDC 3 provided by GC Advisors. KBW then applied a range of price-to-LTM NII multiples of 9.79x to 12.10x derived from the 25^th percentile and 75^th percentile multiples of the selected transactions involving affiliates to the estimated NII of GBDC 3 for the 12-month period ending March 31, 2024, using financial forecasts and projections of GBDC 3 provided by GC Advisors. This analysis indicated the following ranges of the implied value per share of GBDC 3 common stock, as compared to the implied transaction value for the proposed transaction of $14.81 per outstanding share of GBDC 3 common stock:

No company or transaction used as a comparison in the above selected transaction analysis is identical to GBDC 3 or the proposed transaction. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Dividend Discount Analysis of GBDC 3. KBW performed a dividend discount analysis of GBDC 3 on a standalone basis to estimate ranges for the implied equity value of GBDC 3. In this analysis, KBW used financial and operating forecasts and projections relating to dividends and net assets of GBDC 3 that were provided by GC Advisors. KBW assumed discount rates ranging from 9.6% to 11.6%. Ranges of values were derived by adding (i) the present value of the estimated future dividends of GBDC 3 over the period from the assumed March 31, 2024 closing date of the proposed transaction through December 31, 2027 and (ii) the present value of GBDC 3’s implied terminal value at the end of such period. KBW derived implied terminal values using two methodologies, one based on estimated December 31, 2027 NAV per share multiples and the other based on estimated calendar year 2027 dividend yields. Using implied terminal values for GBDC 3 calculated by applying a terminal multiple range of 0.90x to 1.10x to GBDC 3’s estimated NAV per share as of December 31, 2027, this analysis resulted in a range of implied values per share of GBDC 3 common stock of approximately $12.92 to $15.75, as compared to the implied transaction value for the proposed transaction of $14.81 per outstanding share of GBDC 3 common stock. Using implied terminal values for GBDC 3 calculated by applying a terminal dividend yield range of 9.3% to 11.3% to GBDC 3’s estimated calendar year 2027 dividends, this analysis resulted in a range of implied values per share of GBDC 3 common stock of approximately $11.82 to $14.26, as compared to the implied transaction value for the proposed transaction of $14.81 per outstanding share of GBDC 3 common stock.

The dividend discount analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including NAV per share and dividend assumptions, terminal values and discount rates. The analysis did not purport to be indicative of the actual values or expected values of GBDC 3.

Dividend Discount Analysis of GBDC. KBW performed a dividend discount analysis of GBDC on a standalone basis to estimate ranges for the implied equity value of GBDC. In this analysis, KBW used financial and operating forecasts and projections relating to dividends and net assets of GBDC that were provided by GC Advisors. KBW assumed discount rates ranging from 9.5% to 11.5%. Ranges of values were derived by adding (i) the present value of the estimated future dividends of GBDC over the period from the assumed March 31, 2024 closing date of the proposed transaction through December 31, 2027 and (ii) the present value of GBDC’s implied terminal value at the end of such period. KBW derived implied terminal values using two methodologies, one based on estimated December 31, 2027 NAV per share multiples and the other based on estimated calendar year 2027 dividend yields. Using implied terminal values for GBDC calculated by applying a terminal multiple range of 0.90x to 1.10x to GBDC’s estimated NAV per share as of December 31, 2027, this analysis resulted in a range of implied values per share of GBDC common stock of approximately $13.79 to $16.73. Using implied terminal values for GBDC calculated by applying a terminal dividend yield range of 9.6% to 11.6% to GBDC’s estimated calendar year 2027 dividends, this analysis resulted in a range of implied values per share of GBDC common stock of approximately $13.20 to $15.84.

The dividend discount analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including NAV per share and dividend assumptions, terminal values and discount rates. The analysis did not purport to be indicative of the actual values or expected values of GBDC or the pro forma combined company.

Illustrative Pro Forma Combined Dividend Discount Analysis. KBW performed an illustrative dividend discount analysis of the pro forma combined company to estimate ranges for the implied equity value of the pro forma combined company. In this analysis, KBW used financial and operating forecasts and projections relating to dividends and net assets of GBDC 3 and GBDC, on a combined basis reflecting pro forma assumptions (including, without limitation, the cost savings, operating synergies and revenue enhancements expected to result from the transaction and assumptions relating to the amended and restated investment advisory agreement), that were provided by GC Advisors. KBW assumed discount rates ranging from 9.2% to 11.2%. Ranges of values were derived by adding (i) the present value of the estimated future dividends of the pro forma combined company over the period from the assumed March 31, 2024 closing date of the proposed transaction through December 31, 2027 and (ii) the present value of the pro forma combined company’s implied terminal value at the end of such period. KBW derived implied terminal values using two methodologies, one based on estimated December 31, 2027 NAV per share multiples and the other based on estimated calendar year 2027 dividend yields. Using implied terminal values for the pro forma combined company calculated by applying a terminal multiple range of 0.90x to 1.10x to the pro forma combined company’s estimated NAV per share as of December 31, 2027, this analysis resulted in a range of implied values per share of the pro forma combined company’s common stock of approximately $14.19 to $17.15. Using implied terminal values for the pro forma combined company calculated by applying a terminal dividend yield range of 9.6% to 11.6% to the pro forma combined company’s estimated calendar year 2027 dividends, this analysis resulted in a range of implied values per share of the pro forma combined company’s common stock of approximately $14.12 to $16.93.

The dividend discount analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including NAV per share and dividend assumptions, terminal values and discount rates. The analysis did not purport to be indicative of the actual values or expected values of GBDC or the pro forma combined company.

Relative Contribution Analysis. KBW analyzed the relative standalone contribution of GBDC and GBDC 3 to various pro forma balance sheet and income statement items of the combined entity. This analysis did not include purchase accounting adjustments, transaction expenses or deferred financing costs. To perform this analysis, KBW used financial forecasts and projections of GBDC and GBDC 3 provided by GC Advisors. The results of KBW’s analysis are set forth in the following table, which also compares the results of KBW’s analysis with the implied pro forma ownership percentages of GBDC and GBDC 3 stockholders in the combined company based on an assumed exchange ratio of 0.9717x:

Illustrative Potential Net Investment Income and Dividend Per Share Accretion. Using financial and operating forecasts and projections of GBDC 3, on a standalone basis, and financial and operating forecasts and projections of GBDC 3 and GBDC, on a combined basis reflecting pro forma assumptions (including, without limitation, the cost savings, operating synergies and revenue enhancements expected to result from the transaction and assumptions relating to the amended and restated investment advisory agreement), provided by GC Advisors, KBW analyzed the potential financial impact of the transaction on certain projected pro forma financial results attributable to a share of GBDC 3 common stock using an assumed exchange ratio of 0.9717x. This analysis indicated the proposed transaction could be accretive relative to each of GBDC 3’s nine-month period ending December 31, 2024, calendar year 2025 and calendar year 2026 estimated net investment income per share and relative to each of GBDC 3’s nine-month period ending December 31, 2024, calendar year 2025 and calendar year 2026 estimated dividend per share. For all of the above analysis, the actual results achieved by GBDC 3 following the proposed transaction may vary from the projected results, and the variations may be material.

Miscellaneous. KBW acted as financial advisor to the GBDC 3 Special Committee in connection with the transaction and did not act as an advisor to or agent of any other person in connection with the transaction. As part of its investment banking business, KBW is regularly engaged in the valuation of business development company securities in connection with acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for various other purposes. In the ordinary course of KBW and its affiliates’ broker-dealer businesses, KBW and its affiliates may from time to time purchase securities from, and sell securities to, GBDC 3 and GBDC. In addition, as market makers in securities, KBW and its affiliates may from time to time have a long or short position in, and buy or sell, debt or equity securities of GBDC for its and their own respective accounts and for the accounts of its and their respective customers and clients.

Pursuant to the KBW engagement agreement, GBDC 3 agreed to pay KBW cash fees of $1,250,000 in the aggregate, $250,000 of which became payable with the rendering of KBW’s opinion and $1,000,000 of which is contingent upon the consummation of the merger. GBDC 3 also agreed to reimburse KBW for reasonable out-of-pocket expenses and disbursements incurred in connection with its engagement and to indemnify KBW against certain liabilities relating to or arising out of KBW’s engagement or KBW’s role in connection therewith.

Other than in connection with the present engagement, during the two years preceding the date of KBW’s opinion, KBW did not provide investment banking or financial advisory services to GBDC 3. During the two years preceding the date of KBW’s opinion, KBW provided investment banking and financial advisory services to GBDC. KBW acted as a sales agent for the ATM program of GBDC prior to and at the time of KBW’s opinion. During the two years preceding the date of KBW’s opinion, KBW did not provide investment banking or financial advisory services to GC Advisors or Golub Capital LLC. KBW may in the future provide investment banking and financial advisory services to GBDC 3, GBDC, GC Advisors, Golub Capital LLC or their respective affiliates and would expect to receive compensation for such services.

Regulatory Approvals Required for the Merger

The obligations of GBDC and GBDC 3 to complete the Merger are subject to the satisfaction or, where permissible, waiver of certain conditions, including the condition that all regulatory approvals required by law to consummate the transactions contemplated by the Merger Agreement, including the Merger, have been obtained and remain in full force and effect, and all statutory waiting periods required by applicable law in respect thereof have expired (including expiration of the applicable waiting period under the HSR Act). GBDC and GBDC 3 have agreed to cooperate with each other and use their reasonable best efforts to obtain all consents, authorizations, approvals, exemptions or nonobjections from any governmental or regulatory authority necessary to consummate the Merger.

There can be no assurance that such regulatory approvals will be obtained, that such approvals will be received on a timely basis or that such approvals will not impose conditions or requirements that, individually or in the aggregate, would or could reasonably be expected to have a material adverse effect on the financial condition, results of operations, assets or business of the combined company following completion of the Merger.

Third-Party Consents Required for the Merger

Under the Merger Agreement, each of GBDC’s and GBDC 3’s obligation to complete the Merger is subject to the prior receipt of certain approvals, confirmations and consents required to be obtained from certain agents, lenders, derivative counterparties, noteholders and other parties. As of the date of this joint proxy statement/prospectus, GBDC and GBDC 3 believe that, subject to the satisfaction of certain conditions, they have obtained all necessary third-party consents other than stockholder approval and certain lender and derivative counterparty consents.

GBDC and GBDC 3 have agreed to cooperate with each other and use their reasonable best efforts to take, or cause to be taken, in good faith, all actions, and to do, or cause to be done, all things necessary, including to obtain as promptly as practicable all permits, consents, approvals, confirmations and authorizations of all third parties, in each case, that are necessary or advisable, to consummate the transactions contemplated by the Merger Agreement, including the Merger, in the most expeditious manner practicable. There can be no assurance that any permits, consents, approvals, confirmations or authorizations will be obtained or that such permits, consents, approvals, confirmations or authorizations will not impose conditions or requirements that, individually or in the aggregate, would or could reasonably be expected to have a material adverse effect on the financial condition, results of operations, assets or business of the combined company following the Merger. 

DESCRIPTION OF THE MERGER AGREEMENT

The following summary, which includes the material terms of the Merger Agreement, is qualified by reference to the complete text of the Merger Agreement, which is attached as Annex A to this joint proxy statement/prospectus and is incorporated by reference in this joint proxy statement/prospectus. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. GBDC and GBDC 3 encourage you to read the Merger Agreement carefully and in its entirety.

Structure of the Merger

Pursuant to the terms of the Merger Agreement, at the Effective Time, Merger Sub will be merged with and into GBDC 3. GBDC 3 will be the surviving company and will continue its existence as a corporation under the laws of the State of Maryland. As of the Effective Time, the separate corporate existence of Merger Sub will cease. Immediately after the occurrence of the Effective Time, at the Second Effective Time, in the Second Merger, the surviving company will merge with and into GBDC in accordance with the MGCL and DGCL, with GBDC as the surviving entity. As of the Second Effective Time, the separate corporate existence of GBDC 3 will cease and GBDC will continue its existence as a corporation under the laws of the State of Delaware.

Closing; Completion of the Proposed Merger

It is currently expected that the Merger will be completed promptly following receipt of the required stockholder approvals at the GBDC Special Meeting and the GBDC 3 Special Meeting and satisfaction of the other closing conditions set forth in the Merger Agreement.

The Merger will occur no later than five (5) business days after the satisfaction or waiver of the conditions to closing set forth in the Merger Agreement or at another time as may be agreed to in writing by GBDC and GBDC 3. The Second Merger will occur immediately after the Merger is completed. If the adoption of the Merger Agreement is approved at the GBDC 3 Special Meeting and the issuance of the shares of GBDC Common Stock to be issued pursuant to the Merger Agreement is approved at GBDC Special Meeting, and the other conditions to closing the Merger are satisfied or waived, GBDC and GBDC 3 expect to complete the Merger in the second half of calendar year 2024.

Merger Consideration

If the Merger is consummated, each GBDC 3 stockholder will be entitled to receive a number of shares of GBDC Common Stock equal to the Exchange Ratio (as defined below) for each share of GBDC 3 Common Stock. The Exchange Ratio will be appropriately adjusted if between the Determination Date and the Effective Time, the respective outstanding shares of GBDC Common Stock or GBDC 3 Common Stock have been increased or decreased or changed into or exchanged for a different number or kind of shares or securities, in each case, as a result of any reclassification, recapitalization, stock split, reverse stock split, split-up, merger, issue tender or exchange offer, combination or exchange of shares or similar transaction, or if a stock dividend or dividend payable in any other securities or similar distribution has been declared with a record date within such period, in each case, to provide the stockholders of GBDC 3 and GBDC the same economic effect as contemplated by the Merger Agreement prior to such event. Closing of the Merger is contingent upon GBDC stockholder approval of the Merger Stock Issuance Proposal and certain other closing conditions. No fractional shares of GBDC Common Stock will be issued, and holders of GBDC 3 Common Stock will receive cash in lieu of fractional shares.

As of a mutually agreed date no earlier than 48 hours (excluding Sundays and holidays) prior to the Effective Time (such date, the “Determination Date”), each of GBDC and GBDC 3 will deliver to the other a calculation of its net asset value (“NAV”) as of such date (such calculation with respect to GBDC, the “Closing GBDC Net Asset Value” and such calculation with respect to GBDC 3, the “Closing GBDC 3 Net Asset Value”), in each case using a pre-agreed set of assumptions, methodologies and adjustments. Based on such calculations, the parties will calculate the “GBDC Per Share NAV”, which will be equal to (i) the Closing GBDC Net Asset Value divided by (ii) the number of shares of GBDC Common Stock issued and outstanding as of the Determination Date, and the “GBDC 3 Per Share NAV”, which will be equal to (A) the Closing GBDC 3 Net Asset Value divided by (B) the number of shares of GBDC 3 Common Stock issued and outstanding as of the Determination Date. 

The “Exchange Ratio” will be calculated as follows: (i) if the closing price per share of GBDC Common Stock on the Nasdaq on either the Determination Date or, if the Nasdaq is closed on the Determination Date, the most recent trading day prior to the Determination Date (the “GBDC Common Stock Price”) is equal to or lesser than the GBDC Per Share NAV, then the Exchange Ratio will be the quotient (rounded to the fourth nearest decimal) of: (A) the GBDC 3 Per Share NAV, divided by (B) the GBDC Per Share NAV; or (ii) if the GBDC Common Stock Price is greater than the GBDC Per Share NAV, then the Exchange Ratio shall be the quotient (rounded to the fourth nearest decimal) of: (A) the amount equal to (x) GBDC 3 Per Share NAV multiplied by (y) the sum of (a) one (1) and (b) the GBDC 3 Share of GBDC Premium; divided by (B) the GBDC Common Stock Price; provided, that, the amount set forth in sub-clause (y) for the purposes of the calculation shall not be greater than, and shall be subject to a cap of, 1.03. “GBDC 3 Share of GBDC Premium” means fifty percent (50%) multiplied by the difference between (A) the quotient of (x) GBDC Common Stock Price; divided by (y) GBDC Per Share NAV and (B) one (1).

Dividends and Distributions

No dividends or other distributions with respect to the GBDC Common Stock will be paid to the holder of any unsurrendered shares of GBDC 3 Common Stock with respect to the shares of the GBDC Common Stock represented thereby. Following the Effective Time, the record holders of such shares shall be entitled to receive, without interest, (i) the amount of dividends or other distributions with a record date after the Effective Time theretofore payable with respect to the whole shares of GBDC Common Stock represented by such shares of GBDC 3 Common Stock and not paid and/or (ii) at the appropriate payment date, the amount of dividends or other distributions payable with respect to the whole shares of GBDC Common Stock represented by such shares of GBDC 3 Common Stock with a record date after the Effective Time (but before the issuance of GBDC Common Stock issuable with respect to such shares of GBDC 3 Common Stock) and with a payment date subsequent to the issuance of the GBDC Common Stock issuable with respect to such shares of GBDC 3 Common Stock.

Conversion of Shares; Exchange of Shares

At the Effective Time, each share of GBDC 3 Common Stock issued and outstanding immediately prior to the Effective Time (except for shares, if any, owned by GBDC or any of its consolidated subsidiaries) will be converted into the right to receive the Merger Consideration. Each such share of GBDC 3 Common Stock will no longer be outstanding and will be automatically canceled and cease to exist, with the holders of such shares ceasing to have any rights with respect to any GBDC 3 Common Stock other than the right to the Merger Consideration and cash in lieu of fractional shares upon the surrender of such shares of GBDC 3 Common Stock in accordance with the terms of the Merger Agreement.

After the Effective Time, no registration of transfers on the stock transfer books of GBDC 3, other than to settle transfers that occurred prior to the Effective Time, will occur. If shares of GBDC 3 Common Stock are presented for transfer to the exchange agent, such shares will be cancelled against delivery of the applicable Merger Consideration.

Withholding

GBDC or the exchange agent, as applicable, will be entitled to deduct and withhold from any amounts payable to any GBDC 3 stockholder such amounts as each determines in good faith are required to be deducted and withheld with respect to the making of such payment under applicable tax laws. If any amounts are withheld and paid over to the appropriate governmental entity, such withheld amounts will be treated as having been paid to the GBDC 3 stockholders from whom they were withheld.

Representations and Warranties

The Merger Agreement contains representations and warranties of GBDC, GBDC 3 and GC Advisors relating to their respective businesses. With the exception of certain representations that must be true and correct in all or virtually all respects, or in all material respects, no representation or warranty will be deemed untrue, and neither party will be deemed to have breached a representation or warranty as a consequence of the existence of any fact, circumstance or event unless such fact, circumstance or event, individually or when taken together with all other facts, circumstances and events inconsistent with any representation made by such party (without considering “materiality” or “material adverse effect” qualifications), has had or is reasonably expected to have a material adverse effect (as defined below). The representations and warranties in the Merger Agreement will not survive after the Effective Time.

The Merger Agreement contains representations and warranties by each of GBDC and GBDC 3, subject to specified exceptions and qualifications, relating to, among other things:

The Merger Agreement contains representations and warranties by GC Advisors, subject to specified exceptions and qualifications, relating to:

These representations and warranties were made as of specific dates, may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Merger Agreement and may have been included in the Merger Agreement for the purpose of allocating risk between the parties rather than to establish matters as facts. The Merger Agreement is described in, and included as Annex A to, this document only to provide you with information regarding its terms and conditions and not to provide any other factual information regarding the parties or their respective businesses. Accordingly, the representations and warranties and other provisions of the Merger Agreement should not be read alone, but instead should be read only in conjunction with the information provided elsewhere in this document.

For purposes of the Merger Agreement, “material adverse effect” with respect to GBDC, GBDC 3 or GC Advisors, as applicable, means, any event, development, change, effect or occurrence that is, or would reasonably be expected to be, individually or in the aggregate, materially adverse to (1) the business, operations, condition (financial or otherwise) or results of operations of such party and its subsidiaries, taken as a whole or (2) the ability of such party to timely perform its material obligations under the Merger Agreement or consummate the Merger and the transactions contemplated thereby. None of the following events, developments, changes, effects or occurrences, among others, will constitute or be taken into account in determining whether a material adverse effect has occurred or is reasonably expected to occur with respect to clause (1) in the immediately preceding sentence:

The events, developments, changes, effects and occurrences set forth in the first two bullets in the immediately preceding paragraph will otherwise be taken into account in determining whether a material adverse effect has occurred to the extent such events, developments, changes, effects or occurrences have a materially disproportionate adverse impact on such party and its subsidiaries taken as whole relative to other participants in the same industries in which such party conducts its businesses.

Conduct of Business Pending Completion of the Merger

Each of GBDC and GBDC 3 has undertaken covenants that place restrictions on it and certain of its subsidiaries until the completion of the Merger. In general, each of GBDC and GBDC 3 has agreed that before the completion of the Merger, except as may be required by law, as expressly contemplated by the Merger Agreement, as previously disclosed in a public filing, as set forth in its disclosure schedules or with the prior written consent of the other parties to the Merger Agreement, it will, and will cause each of its subsidiaries to, conduct its business in the ordinary course of business and consistent with each of GBDC’s and GBDC 3’s investment objectives and policies and publicly disclosed, respectively, and use reasonable best efforts to maintain and preserve intact its business organization and existing business relationships.

In addition, before the completion of the Merger, each of GBDC and GBDC 3 has agreed that, except as may be required by law or as expressly contemplated by the Merger Agreement or as set forth in its disclosure schedules it will not, and will not permit any of its subsidiaries to, directly or indirectly, without the prior written consent of GBDC or GBDC 3, as applicable:

Additional Agreements

Further Assurances; Regulatory Matters

The Merger Agreement contains covenants relating to the preparation of this document, the holding of the GBDC Special Meeting and the GBDC 3 Special Meeting, access to information of the other party, obtaining certain regulatory and third party consents, publicity, tax matters and takeover statutes and provisions. The Merger Agreement obligates the parties to cooperate with each other and use reasonable best efforts to take all actions, and to do all things necessary to obtain as promptly as practicable all permits of all governmental entities, to effect all applications, notices, petitions and filings, to obtain as promptly as practicable all permits of all governmental entities and all permits, consents, approvals, confirmations and authorizations of all third parties that are necessary or advisable, to consummate the transactions (including the Merger), and to comply with the terms and conditions of all such permits, consents, approvals and authorizations of all such third parties and governmental entities.

The parties are required to file any required applications, notices or other filings under the HSR Act as promptly as practicable. In connection with such filings, the parties are required to cooperate with one another, to keep the other party informed of any communications received from governmental entities and permit the other party to review such communications. The parties must consult with each other with respect to the obtaining of all other permits, consents, approvals and authorizations of all third parties and permits of all governmental entities necessary or advisable to consummate the transactions contemplated by the Merger Agreement (including the Merger), and each party must keep the other reasonably apprised of the status of matters relating to completion of the Merger. The parties are not required to make payments or provide other consideration for the repayment, restructuring or amendment of terms of indebtedness in connection with the Merger, other than the consent fees set forth in the disclosure schedules to the Merger Agreement.

Stockholder Approval

GBDC 3 has agreed to hold the GBDC 3 Special Meeting as promptly as practicable following the effectiveness of this joint proxy statement/prospectus for the purpose of obtaining the approval of GBDC 3 stockholders of the Merger Proposal. GBDC 3 will be required to use its reasonable best efforts to obtain from its stockholders the vote required to approve the Merger Proposal, and such obligations will not be affected by the existence of any takeover proposals or any adverse recommendation change made by GBDC 3.

Similarly, GBDC has agreed to hold the GBDC Special Meeting as promptly as practicable following the effectiveness of this joint proxy statement/prospectus for the purpose of obtaining the approval of GBDC stockholders of the Merger Stock Issuance Proposal. GBDC will be required to use its reasonable best efforts to obtain from its stockholders the vote required to approve the Merger Stock Issuance Proposal, and such obligations will not be affected by the existence of any adverse recommendation change made by GBDC.

Nasdaq Listing

GBDC is required to use reasonable best efforts to cause the shares comprising the Merger Consideration to be approved for listing on the Nasdaq at or prior to the Effective Time.

Indemnification; Directors’ and Officers’ Insurance

GBDC has agreed, to the fullest extent permitted under applicable law, to indemnify, defend and hold harmless, and advance expenses, to the present and former directors and officers of GBDC 3 or any of its subsidiaries (collectively, the “D&O Indemnified Parties”) with respect to all acts or omissions in such capacities at any time prior to the Effective Time (including any matters arising in connection with the Merger Agreement or the transactions contemplated thereby), to the fullest extent permitted by applicable law. If an indemnified liability arises, (i) GBDC has agreed to advance the applicable D&O Indemnified Party, upon request, reimbursement of documented expenses reasonably and actually incurred so long as such D&O Indemnified Party, or someone on his or her behalf, undertakes to repay such advanced expenses if he or she is ultimately determined to be not entitled to indemnification and (ii) GBDC and the applicable D&O Indemnified Party will cooperate in the defense of such matter.

Unless GBDC and GBDC 3 shall otherwise agree, unless GBDC 3 has purchased a “tail” policy prior to the Effective Time as provided below, for at least six (6) years after the Effective Time, GBDC or its successor will be required to pay for and maintain in full force and effect, a “tail” policy for the extension of the directors’ and officers’ liability coverage of GBDC 3’s existing directors’ and officers’ insurance policies, with coverage and amounts not less than, and terms and conditions that are not materially less advantageous to the insureds as, GBDC 3’s existing policies with respect to matters existing or occurring at or prior to the Effective Time (provided that GBDC will not be required to pay an annual premium for such insurance in excess of 300% of the aggregate annual premiums currently paid by GBDC 3 on an annualized basis, but in such case will purchase as much of such coverage as possible for such amount). If GBDC or any of its successors or assigns consolidates or merges into another entity and is not the surviving entity, or transfers all or substantially all of its assets to another entity, then GBDC will cause such other entity to assume the foregoing obligations.

No Solicitation

Each of GBDC 3 and GBDC has agreed to, and to cause its affiliates, subsidiaries, and its and each of their respective officers, directors, trustees, managers, employees, consultants, financial advisors, attorneys, accountants and other advisors, representatives and agents to, immediately cease and cause to be terminated all discussions or negotiations with respect to, or that are intended to or could reasonably be expected to lead to, a “Takeover Proposal” (as described below) from a third party and not to directly or indirectly: (i) directly or indirectly solicit, initiate, induce, encourage or take any other action (including by providing information) designed to, or which could reasonably be expected to, facilitate any inquiries or the making or submission or implementation of any proposal or offer (including any proposal or offer to its stockholders) with respect to any Takeover Proposal; (ii) approve, publicly endorse or recommend or enter into any agreement, arrangement, discussions or understandings with respect to any Takeover Proposal (including any letter of intent, agreement in principle, memorandum of understanding or confidentiality agreement) or enter into any contract or understanding (including any letter of intent, agreement in principle, memorandum of understanding or confidentiality agreement) requiring it to abandon, terminate or fail to consummate, or that is intended to or that could reasonably be expected to result in the abandonment of, termination of or failure to consummate, the Merger or any other transaction; (iii) initiate or participate in any way in any negotiations or discussions regarding, or furnish or disclose to any third party (other than GBDC, GBDC 3 or their respective affiliates or representatives) any information with respect to, or take any other action to facilitate or in furtherance of any inquiries or the making of any proposal that constitutes, or could reasonably be expected to lead to, any Takeover Proposal; (iv) publicly propose or publicly announce an intention to take any of the foregoing actions; or (v) grant any (x) approval pursuant to any takeover statute to any Person (other than GBDC, GBDC 3 or their respective Affiliates) or with respect to any transaction (other than the transactions) or (y) waiver or release under any standstill or any similar agreement with respect to equity securities of GBDC 3 or GBDC. Each of GBDC 3 and GBDC shall as promptly as reasonably practicable (and in any event within twenty-four (24) hours after receipt) (i) notify the other party in writing of any request for information or any Takeover Proposal and the terms and conditions of such request, Takeover Proposal or inquiry (including the identity of the third party (or group of third parties) making such request, Takeover Proposal or inquiry) and (ii) provide to the other party copies of any written materials received by GBDC 3 or GBDC or their respective representatives in connection with any of the foregoing, and the identity of the third party (or group of third parties) making any such request, Takeover Proposal or inquiry or with whom any discussions or negotiations are taking place. Each of GBDC 3 and GBDC agrees that it shall keep the other party informed on a reasonably current basis of the status and the material terms and conditions (including amendments or proposed amendments) of any such request, Takeover Proposal or inquiry and keep the other party informed on a reasonably current basis of any information requested of or provided by GBDC 3 or GBDC and as to the status of all discussions or negotiations with respect to any such request, Takeover Proposal or inquiry, unless failure to grant such waiver or release would be reasonably likely to be a breach of the standard of conduct applicable to the directors of GBDC 3 or GBDC, as applicable, under applicable law; provided, however, that notwithstanding the foregoing, each party (A) may inform third parties of the provisions contained in such non-solicitation provision and (B) shall be permitted to grant a waiver of or terminate any “standstill” or similar obligation of any third party with respect to equity securities of GBDC or GBDC 3, as applicable, in order to allow such third party to confidentially submit a Takeover Proposal.

Takeover Proposals

GBDC 3 Recommendation

If, on or after the date of the Merger Agreement and at any time prior to the GBDC 3 Special Meeting: (i) GBDC 3 receives a bona fide unsolicited Takeover Proposal; (ii) the GBDC 3 Board, including a majority of the Independent Directors of GBDC 3, shall have determined in good faith, after consultation with its outside legal counsel and, with respect to financial matters, any financial advisor, that (x) failure to consider such Takeover Proposal would be reasonably likely to be a breach of the standard of conduct applicable to the directors of GBDC 3 under applicable law and (y) such Takeover Proposal constitutes or is reasonably likely to result in a “GBDC 3 Superior Proposal”; and (iii) GBDC 3 gives GBDC written notice of its intention to engage in negotiations or discussions with the third party making such Takeover Proposal at least two (2) business days before engaging in such negotiations or discussions (with such prior written notice specifying the identity of the third-party making such Takeover Proposal, the terms and conditions of such Takeover Proposal and GBDC 3’s intention to furnish information to, or participate in discussions or negotiations with, the third party making such Takeover Proposal), then GBDC 3 may engage in discussions and negotiations with such third party so long as certain notice and other procedural requirements are satisfied, including providing notice to GBDC within twenty-four (24) hours after determining that a Takeover Proposal constitutes a GBDC 3 Superior Proposal.

In addition, GBDC 3 may take other actions if the GBDC 3 Board shall have determined, after consultation with its outside legal counsel, that continued recommendation of the Merger Proposal to GBDC 3’s stockholders would be reasonably likely to be a breach of the standard of conduct applicable to the directors of GBDC 3 under applicable law as a result of a GBDC 3 Superior Proposal, GBDC 3 may (A) withdraw or qualify (or modify or amend in a manner adverse to GBDC), or publicly propose to withdraw or qualify (or modify or amend in a manner adverse to GBDC), the approval, adoption, recommendation or declaration of advisability by the GBDC 3 Board of the Merger Proposal, including the recommendation of the GBDC 3 Board that the stockholders of GBDC 3 approve the Merger Proposal (the “GBDC 3 Recommendation”), and (B) take any action or make any statement, filing or release, in connection with the GBDC 3 stockholders meeting or otherwise, inconsistent with the GBDC 3 Recommendation (any action described in clause (A) and (B) referred to collectively with any takeover approval as a “GBDC Adverse Recommendation Change”). GBDC 3 may terminate the Merger Agreement and enter into an agreement with a third party who makes a GBDC 3 Superior Proposal, subject to negotiating in good faith to amend the Merger Agreement so that the GBDC 3 Superior Proposal is no longer deemed a GBDC 3 Superior Proposal and satisfying certain other procedural requirements. Other than in connection with a Takeover Proposal, nothing in the Merger Agreement shall prohibit or restrict the GBDC 3 Board from withdrawing or qualifying or publicly propose to withdraw or qualify the approval, adoption, recommendation or declaration of the Merger Proposal in response to an Intervening Event, subject to the procedures set forth in the Merger Agreement.

GBDC Recommendation

If on or after the date of the Merger Agreement and at any time prior to the GBDC Special Meeting, ((i) GBDC receives a bona fide unsolicited Takeover Proposal; (ii) the GBDC Board, including a majority of the independent directors of GBDC, shall have determined in good faith, after consultation with its outside legal counsel and, with respect to financial matters, any financial advisor, that (x) failure to consider such Takeover Proposal would be reasonably likely to be a breach of the standard of conduct applicable to the directors of GBDC under applicable Law and (y) such Takeover Proposal constitutes or is reasonably likely to result in a GBDC Superior Proposal; and (iii) GBDC gives GBDC 3 written notice of its intention to engage in negotiations or discussions with the third party making such Takeover Proposal at least two (2) business days before engaging in such negotiation or discussions (with such prior written notice specifying the identity of the third party making such Takeover Proposal, the terms and conditions of such Takeover Proposal and GBDC’s intention to furnish information to, or participate in discussions or negotiations with, the third party making such Takeover Proposal), then GBDC may engage in discussions and negotiations with such third party so long as certain notice and other procedural requirements are satisfied, including providing notice to GBDC 3 within twenty-four (24) hours after determining that a Takeover Proposal constitutes a GBDC Superior Proposal.

In addition, GBDC may take other actions if the GBDC Board shall have determined, after consultation with its outside legal counsel, that continued recommendation of the Merger Stock Issuance Proposal to GBDC’s stockholders would be reasonably likely to be a breach of the standard of conduct applicable to the directors of GBDC under applicable law as a result of a GBDC Superior Proposal, GBDC may (A) withdraw or qualify (or modify or amend in a manner adverse to GBDC 3), or publicly propose to withdraw or qualify (or modify or amend in a manner adverse to GBDC 3), the approval, adoption, recommendation or declaration of advisability by the GBDC Board of the Merger Stock Issuance Proposal, including the recommendation of the GBDC Board that the stockholders of GBDC approve the Merger Stock Issuance Proposal (the “GBDC Recommendation”), and (B) take any action or make any statement, filing or release, in connection with the GBDC stockholders meeting or otherwise, inconsistent with the GBDC Recommendation (any action described in clause (A) and (B) referred to collectively with any takeover approval as a “GBDC Adverse Recommendation Change”). GBDC may terminate the Merger Agreement and enter into an agreement with a third party who makes a GBDC Superior Proposal, subject to negotiating in good faith to amend the Merger Agreement so that the GBDC Superior Proposal is no longer deemed a GBDC Superior Proposal and satisfying certain other procedural requirements. Other than in connection with a Takeover Proposal, nothing in the Merger Agreement shall prohibit or restrict the GBDC Board from withdrawing or qualifying or publicly propose to withdraw or qualify the approval, adoption, recommendation or declaration of the Merger Stock Issuance Proposal in response to an Intervening Event, subject to the procedures set forth in the Merger Agreement.

Other than as described above, neither GBDC nor the GBDC Board may make any GBDC Adverse Recommendation Change, and no GBDC Adverse Recommendation Change will change the approval of the Merger Stock Issuance Proposal, including in any respect that would have the effect of causing any takeover statute or similar statute to be applicable to the transactions contemplated by the Merger Agreement.

Related Definitions

For purposes of the Merger Agreement:

Other than as described herein, neither GBDC 3 nor the GBDC 3 Board may make any GBDC 3 Adverse Recommendation Change, and no GBDC 3 Adverse Recommendation Change will change the approval of the Merger Proposal or any other approval of the GBDC 3 Board, including in any respect that would have the effect of causing any takeover statue or similar statute to be applicable to the transactions contemplated by the Merger Agreement.

Access to Information

Upon reasonable notice, except as may otherwise be restricted by applicable law, each of GBDC 3 and GBDC will, and will cause its subsidiaries, to afford to the directors, officers, accountants, counsel, advisors and other representatives of the other party, reasonable access, during normal business hours during the period prior to the Effective Time, to its properties, books, contracts, and records and, during such period, such party will, and will cause its subsidiaries to, make available to the other party (including via EDGAR) all other information concerning its business and properties as the other party may reasonably request.

Publicity

GBDC 3 and GBDC each shall consult with the other before issuing or causing the publication of any press release or other public announcement with respect to the transactions contemplated by the Merger Agreement, except as may be required by applicable law, the rules and regulations of the Nasdaq, or to the extent that such press release or other public announcement related to any GBDC 3 Adverse Recommendation Change or GBDC Adverse Recommendation Change is made in accordance with the Merger Agreement and, to the extent such press release or disclosure is issued or made, GBDC or GBDC 3, as applicable, shall have used commercially reasonable efforts to advise the other party of, and consult with the other party regarding, the text of such press release or other public announcement.

Takeover Statutes and Provisions

Neither GBDC nor GBDC 3 will take any action that would cause the transactions actions contemplated by the Merger Agreement to be subject to the requirements imposed by any takeover statute, and each of GBDC and GBDC 3 shall take all necessary steps within its control to exempt such transactions from any applicable takeover statute.

Tax Matters

GBDC and GBDC 3 shall each obtain an opinion from Dechert LLP, as counsel to GBDC and to GBDC 3, generally to the effect that the Merger will qualify as a “reorganization,” within the meaning of Section 368(a) of the Code.

Stockholder Litigation

The parties to the Merger Agreement shall reasonably cooperate and consult with one another in connection with defense and settlement of any proceeding by GBDC 3’s stockholders or GBDC’s stockholders against any of them or any of their respective directors, officers or affiliates with respect to the Merger Agreement or the transactions contemplated thereby, and each of GBDC 3 and GBDC shall keep the other party reasonably informed of any material developments in connections with any such proceeding brought by its stockholders and shall not settle any such proceeding without the prior written consent of the other party.

Section 16 Matters

Prior to the Effective Time, the board of directors of each of GBDC and GBDC 3 shall take all such steps as may be required to cause any dispositions of GBDC 3 Common Stock or acquisitions of GBDC Common Stock resulting from the transactions contemplated by the Merger Agreement by each individual who is subject to the reporting requirements of Section 16(a) for the Exchange Act with respect to GBDC 3 or will become subject to such reporting requirements with respect to GBDC, in each case, to be exempt pursuant to Rule 16b-3.

No Other Representations or Warranties

The parties acknowledge and agree that except for the representations contained in the Merger Agreement, none of GC Advisors, GBDC 3, GBDC or any of GBDC 3’s or GBDC’s subsidiaries or any other person acting on behalf of the foregoing makes any representation or warranty, express or implied.

Termination of GBDC 3 Agreements

Immediately after the occurrence of the Effective Time and prior to the Second Merger, the GBDC 3 Investment Advisory, the GBDC 3 Administration Agreement and the trademark license agreement by and between GBDC 3 and Golub Capital LLC shall be automatically terminated and of no further force and effect. As a result, under the GBDC 3 Investment Advisory Agreement, GBDC 3 would pay to GC Advisors a Capital Gain Incentive Fee as calculated in accordance with the GBDC 3 Investment Advisory Agreement. The Merger results in the effective sale of GBDC 3 and all of its assets and liabilities to GBDC and the Merger Agreement provides for the termination of the GBDC 3 Investment Advisory Agreement, which would require a final calculation of the capital gain incentive fee as of the termination date. The final calculation of the capital gain incentive fee will treat all of GBDC 3’s investments as being sold at their respective fair values on the date immediately preceding the closing of the Merger. Assuming the Merger had been completed on December 31, 2023, there was no Capital Gain Incentive Fee payable to GC Advisors pursuant to the GBDC 3 Investment Advisory Agreement upon its termination immediately following the closing of the Merger.

Coordination of Dividends

GBDC and GBDC 3 shall coordinate with each other in designating the record and payment dates for any quarterly dividends or distributions to its stockholders declared in accordance with the Merger Agreement in any calendar quarter in which the Closing Date might reasonably be expected to occur, and neither GBDC nor GBDC 3 shall authorize or declare any dividend or distributions to stockholders after the Determination Date at any time on or before the Closing Date; provided, however, that the foregoing shall not prohibit GBDC or GBDC 3 from authorizing, declaring or paying any dividend or distribution to its stockholders solely payable in cash in accordance with the Merger Agreement to the extent such dividend or distribution is take into account in determining the GBDC 3 net asset value and/or the GBDC net asset value, as applicable, in each case as of the Determination Date, including a tax dividend.

Conditions to Closing the Merger

Conditions to Each Party’s Obligations to Effect the Merger

The obligations of GBDC and GBDC 3 to complete the Merger are subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions:

Conditions to Obligations of GBDC and Merger Sub to Effect the Merger

The obligations of GBDC and Merger Sub to effect the Merger are also subject to the satisfaction, or waiver by GBDC, at or prior to the Effective Time, of the following conditions: