Document

You are receiving this letter in connection with the offer by MSC Income Fund, Inc. (the “Company,” “we,” “us,” or “our”) to purchase up to an aggregate amount of $2,500,000 of shares of our common stock, par value $0.001 per share (the “Shares”), for cash at a purchase price not less than $4.50 and not more than $7.81 per Share (which was the net asset value (“NAV”) of our Shares as of January 31, 2024) (the “Purchase Price”), less any applicable withholding taxes and without interest. The purpose of this Offer (as defined below) is to provide stockholders with an additional near-term liquidity option to supplement our quarterly repurchase program.

Upon the terms and subject to the conditions of the Offer to Purchase (as defined below), including the provisions relating to proration and conditional tenders described in the Offer to Purchase, promptly following the Expiration Date, we will determine a single per Share price that we will pay for Shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of Shares tendered and the prices specified by tendering Stockholders. We will select the lowest Purchase Price, not less than $4.50 and not more than $7.81 per Share, at which Shares have been properly tendered in the Offer and not properly withdrawn that will allow us to purchase up to $2,500,000 of Shares in the aggregate. All Shares purchased in the Offer will be purchased at the same Purchase Price regardless of whether any Stockholder tendered at a lower price.

In accordance with the rules promulgated by the SEC, we may increase the number of Shares accepted for purchase in the Offer by up to 2% of the Company’s outstanding Shares without amending or extending the Offer. Shares tendered at prices greater than the Purchase Price or Shares that we do not accept for purchase under the terms of the Offer because of the Offer’s proration and conditional offer provisions will not be purchased. Shares tendered but not purchased in the Offer will be returned to the tendering Stockholders at our expense promptly after the expiration of the Offer.

If you would like to tender a portion or all of your Shares pursuant to the terms of this Offer, you must obtain from our website, or request that we mail to you, a copy of the Offer to Purchase, dated February 5, 2024 (the “Offer to Purchase”) and the related Letter of Transmittal (the “Letter of Transmittal”) (which together, as they may be amended and supplemented from time to time, constitute the “Offer”) and other documents related to the Offer (which together, as they may be amended and supplemented from time to time, constitute the “Share Repurchase Package”). Please read the following pages and the Share Repurchase Package carefully as they contain important information about the Offer. Requests for the Share Repurchase Package may be directed to the Company as follows.

This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares. The Offer is made solely by the Offer to Purchase, dated February 5, 2024, and the related Letter of Transmittal, and any amendments or supplements thereto. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making or acceptance or offers to sell Shares would not be in compliance with the laws of that jurisdiction.

MSC Income Fund, Inc. (the “Company”), an externally managed, non-diversified, closed-end management investment company incorporated in Maryland that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, is offering to purchase a number of shares at a price determined in accordance with the Offer to Purchase upon the terms and subject to the conditions described in the Offer to Purchase and the Letter of Transmittal (the “Offer”).

NONE OF THE COMPANY, ITS BOARD OF DIRECTORS (THE “BOARD”), MSC ADVISER I, LLC (THE “ADVISER”) OR HINES SECURITIES, INC. MAKES ANY RECOMMENDATION TO STOCKHOLDERS AS TO WHETHER THEY SHOULD TENDER OR REFRAIN FROM TENDERING SHARES OR AT A WHAT PRICE TO TENDER SHARES. EACH STOCKHOLDER MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER THEIR SHARES AND, IF SO, HOW MANY AND AT WHAT PRICE TO TENDER. IN DOING SO, YOU SHOULD READ CAREFULLY THE INFORMATION IN THE OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL, INCLUDING THE PURPOSE AND EFFECTS OF THE OFFER.

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY, THE BOARD, THE ADVISER OR HINES SECURITIES, INC. AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER OR TO MAKE ANY REPRESENTATION OR TO GIVE ANY INFORMATION IN CONNECTION WITH THE OFFER OTHER THAN AS CONTAINED IN THE OFFER TO PURCHASE OR IN THE ACCOMPANYING LETTER OF TRANSMITTAL. IF MADE OR GIVEN, ANY SUCH RECOMMENDATION, REPRESENTATION OR INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE BOARD, THE ADVISER OR HINES SECURITIES, INC. STOCKHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES.

On January 31, 2024, the Company sold Shares to Main Street Capital Corporation (“Main Street”) at the price at which the Company issued new Shares in connection with reinvestments of the January 31, 2024 dividend pursuant to the Company’s distribution reinvestment plan (“DRIP”). The issuance and sale were made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and was unanimously approved by the Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, of the Company or the Adviser. The Company will use a portion of the cash proceeds from this and other previous sales of Shares to Main Street to purchase Shares in the Offer.

The Company is conducting the Offer by means of a modified “Dutch auction.” The Company is offering to purchase an aggregate of $2,500,000 of Shares for cash at a purchase price not less than $4.50 and not more than $7.81 per Share (our NAV per Share as of January 31, 2024), less any applicable withholding taxes and without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. We will select the lowest price, not less than $4.50 and not more than $7.81 per Share, that will allow us to purchase up to an aggregate of $2,500,000 of Shares (the “Purchase Price”), or a lower amount depending on the number of Shares properly tendered and not properly withdrawn pursuant to the Offer. We will determine the Purchase Price that we will pay for Shares properly tendered and not properly withdrawn from the Offer by taking into account the total number of Shares tendered and the prices specified by Stockholders tendering their shares in the Offer. We will determine the Purchase Price as promptly as practicable after the Expiration Date.

All Shares purchased in the Offer will be purchased at the same Purchase Price regardless of whether any Stockholder tendered, or was deemed to have tendered, at a lower price. However, because of the proration and conditional offer provisions described in the Offer to Purchase, all of the Shares properly tendered and not properly withdrawn at or below the Purchase Price may not be purchased if those Shares have an aggregate purchase price in excess of $2,500,000, except as described below.

Shares tendered at prices greater than the Purchase Price or Shares that we do not accept for purchase under the terms of the Offer because of the Offer’s proration and conditional offer provisions will not be purchased. Shares tendered but not purchased in the Offer will be returned to the tendering Stockholders at our expense promptly after the expiration of the Offer.

•second, only if necessary to permit us to purchase up to $2,500,000 in aggregate amount of Shares, from holders who have tendered Shares at or below the Purchase Price conditionally (for which the condition was not initially satisfied) by random lot, to the extent feasible. To be eligible for purchase by random lot, Stockholders whose Shares are conditionally tendered must have properly tendered all of their Shares and not properly withdrawn them before the Expiration Date.

Therefore, all of the Shares that a Stockholder tenders in the Offer may not be purchased. It is also possible that none of the Shares conditionally tendered will be purchased. Participation in the DRIP will be discontinued for any Shares properly tendered for repurchase (and not withdrawn). If the conditions to the Offer are satisfied or waived and the Offer is fully subscribed at the minimum Purchase Price, we will repurchase 555,556 Shares. If the conditions to the Offer are satisfied or waived and the Offer is fully subscribed at the maximum Purchase Price, we will repurchase approximately 320,102 Shares

The term “Expiration Date” means 5:00 p.m., Central Time, on March 4, 2024, unless the Company, in its sole discretion, shall have extended the period of time during which the Offer will remain open, in which event the term “Expiration Date” shall refer to the latest time and date at which the Offer, as so extended, shall expire. For purposes of the Offer, the Company will be deemed to have accepted for payment and, therefore, purchased, Shares properly tendered (and not properly withdrawn), only when, as and if the Company gives oral or written notice to SS&C GIDS, Inc., the transfer agent for the Offer (the “Transfer Agent”), of its acceptance of such Shares for payment under the Offer. The Company will determine, in its sole discretion, all questions as to the form and validity of any notice of withdrawal, including the time of receipt, and such determination will be final and binding, subject to a stockholder’s right to challenge the Company’s determination in a court of competent jurisdiction. SS&C GIDS, Inc., as transfer agent for the Company, will not be under any duty to give notification of any defects or irregularities in any tender or notice of withdrawal or incur any liability for failure to give any such notification.

We reserve the right, in our sole discretion, to change the Purchase Price range and to increase or decrease the value of Shares sought in the Offer, subject to applicable law. In accordance with the rules promulgated by the SEC, we may increase the number of Shares accepted for purchase in the Offer by up to 2% of the outstanding Shares without amending or extending the Offer. Additionally, subject to the applicable rules and regulations promulgated by the SEC, we expressly reserve the right, in our sole discretion, at any time and from time to time, (i) to extend the period of time during which the Offer is open and thereby delay acceptance for purchase of, and the payment for, any Shares, subject to the restrictions below, (ii) to amend the Offer in any respect prior to the Expiration Date and (iii) if any condition specified in the Offer to Purchase is not satisfied or waived at or prior to the Expiration Date, to terminate the Offer and not accept any Shares for purchase. Notice of any such extension, amendment or termination will be distributed promptly to Stockholders in a manner reasonably designed to inform them of such change in compliance with Rule 13e-4(e)(3) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In the case of an extension of the Offer, such extension will be followed by a press release or other public announcement, which will be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled or announced Expiration Date, in accordance with Rule 14e-1(d) promulgated under the Exchange Act. See Section 16 of the Offer to Purchase for more information.

Generally, the receipt of cash from the Company in exchange for a stockholder’s Shares will be a taxable event for the stockholder for U.S. federal income tax purposes. The receipt of cash for a stockholder’s Shares generally will be treated for U.S. federal income tax purposes either as (1) a sale or exchange of the Shares or (2) a distribution in respect of stock from the Company. The Transfer Agent (or other applicable withholding agent) may be required to withhold U.S. federal taxes on the gross proceeds of the Offer paid to a non-U.S. stockholder. For additional information, see Section 13 of the Offer to Purchase. Each stockholder is urged to consult his, her or its own tax advisor to determine the particular tax consequences to him, her or it of the Offer, including the applicability and effect of federal, state, local and foreign tax laws. To prevent the potential imposition of U.S. federal backup withholding on the gross payments made pursuant to the Offer, prior to receiving such payments, each stockholder accepting the Offer who has not previously submitted to the Company a correct, completed and signed Internal Revenue Service (“IRS”) Form W-9 or substitute Form W-9 (included with the original subscription) (for U.S. stockholders) or IRS Form W-8BEN, IRS Form W-8BEN-E, IRS Form W-8IMY, IRS Form W-8ECI, IRS Form W-8EXP or other applicable form (for non-U.S. stockholders), or otherwise established an exemption from such withholding, must submit the appropriate form to the Company.

Tenders of Shares under the Offer are irrevocable, except that such Shares may be withdrawn at any time prior to the Expiration Date, and, unless previously accepted for payment by the Company under the Offer, may also be withdrawn at any time after April 3, 2024 (which is 40 business days after the commencement of the Offer). For such withdrawal to be effective, the Transfer Agent must timely receive a written or facsimile transmission notice of withdrawal at the respective addresses or facsimile number specified for such manner of delivery set forth on the notice of withdrawal. Any such notice of withdrawal must specify the name of the tendering stockholder, the number of Shares to be withdrawn and the name of the registered holder of such Shares. If Shares have been tendered pursuant to the procedure for book-entry transfer set forth in the Offer to Purchase, any notice of withdrawal also must specify the name and the number of the account at the book-entry transfer facility to be credited with the withdrawn Shares and must otherwise comply with such book-entry transfer facility’s procedures.

The Company has learned through engaging with Stockholders that certain Stockholders have additional needs for liquidity related to individual circumstances, such as death or disability of the initial holder. Because the SEC’s rules do not permit the Company to grant a preference to certain accounts over others in connection with the repurchase of its Shares, the Company is unable to offer a liquidity alternative for these types of unique circumstances. While we continue to evaluate other liquidity options for the Company, such as a listing of the Company’s Shares on a national securities exchange, we believe the modified “Dutch auction” tender offer set forth in this Offer to Purchase is a mechanism that will allow us to provide current liquidity to Stockholders who desire such an option. The Company’s Board may consider undertaking additional tender offer(s), including additional Dutch auction tender offers and tender offers in connection with its quarterly repurchase program, based upon a variety of factors, including the availability of new capital, while it continues to evaluate opportunities for a full liquidity event.



Website:			www.mscincomefund.com/investors/forms
Hines Investor Relations:			888.220.6121
Fax number:			877.616.1113
Mailing address:			MSC Income Fund, Inc. 430 W. 7th Street, Suite 219406 Kansas City, Missouri 64105-1407


			Return to: MSC Income Fund, Inc. 430 W. 7th Street, Suite 219406 Kansas City, Missouri 64105-1407 Hines Investor Relations Toll-Free: 888.220.6121 Website: mscincomefund.com/investors/forms


Dutch Auction Tender Offer