Edgar Filing: Special Value Continuation Fund, LLC

Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT

OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-21936

SPECIAL VALUE CONTINUATION FUND, LLC

(Exact Name of Registrant as Specified in Charter)

2951 28TH STREET, SUITE 1000

SANTA MONICA, CALIFORNIA 90405

(Address of Principal Executive Offices) (Zip Code)

ELIZABETH GREENWOOD, SECRETARY

SPECIAL VALUE CONTINUATION FUND, LLC

2951 28TH STREET, SUITE 1000

SANTA MONICA, CALIFORNIA 90405

(Name and Address of Agent for Service)

Registrant's telephone number, including area code: (310) 566-1000

Copies to:

RICHARD T. PRINS, ESQ.

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

FOUR TIMES SQUARE

NEW YORK, NEW YORK 10036

Date of fiscal year end: DECEMBER 31, 2009

Date of reporting period: JUNE 30, 2009

ITEM 1. REPORTS TO STOCKHOLDERS.

Semi-Annual Shareholder Report

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

June 30, 2009

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Semi-Annual Shareholder Report

June 30, 2009

Contents

Performance Summary	1
Consolidated Portfolio Asset Allocation	2

Unaudited Consolidated Financial Statements

Consolidated Statement of Assets and Liabilities	3
Consolidated Statement of Investments	4
Consolidated Statement of Operations	9
Consolidated Statements of Changes in Net Assets	10
Consolidated Statement of Cash Flows	11
Notes to Consolidated Financial Statements	12
Consolidated Schedule of Changes in Investments in Affiliates	25

Supplemental Information

Consolidating Statement of Assets and Liabilities	26
Consolidating Statement of Operations	27
Approval of Investment Management Agreements	28

Special Value Continuation Fund, LLC (the “Company”) files a schedule of its investment in Special Value Continuation Partners, LP (the “Partnership”) with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. Investments listed in the Consolidated Statement of Investments are held by the Partnership, which also files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Forms N-Q of the Company and the Partnership are available on the SEC’s website at http://www.sec.gov. The Forms N-Q of the Company and the Partnership may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

A free copy of the proxy voting guidelines of the Company and the Partnership and information regarding how the Company and the Partnership voted proxies relating to portfolio investments during the most recent twelve-month period may be obtained without charge on the SEC’s website at http://www.sec.gov or by calling the advisor of the Company and the Partnership, Tennenbaum Capital Partners, LLC, at (310) 566-1000. Collect calls for this purpose are accepted.

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Performance Summary

Fund Inception (July 31, 2006) through June 30, 2009

Fund Returns v. Merrill Lynch US High Yield and S&P 500 Indices (Unaudited)


	Return on Equity (1)											IRR (2)
												Annualized
		2006	*	2007			2008			2009	**	Inception-to-Date
Special Value Continuation Fund		8.2	%		9.2	%		-48.8	%	5.5	%		-11.6	%
Merrill Lynch US High Yield Index		7.3	%		2.2	%		-26.2	%	29.0	%		1.4	%
S&P 500 Total Return Index		12.0	%		5.5	%		-37.0	%	3.2	%		-8.6	%

* Period from inception (July 31, 2006) through December 31, 2006

** Year to date

Past performance of Special Value Continuation Fund, LLC (the "Company") is not a guarantee of future performance. Company returns are net of dividends to preferred shareholders, performance allocations and Company expenses, including financing costs and management fees.

(1) Return on equity (net of dividends to preferred shareholders, performance allocations and Company expenses, including financing costs and management fees) calculated on a monthly geometrically liked, time-weighted basis. Returns are reduced in earlier periods because organizational costs and other expenses are high relative to assets.

(2) Internal rate of return ("IRR") is the imputed annual return over an investment period and, mathematically, is the rate of return at which the discounted cash flows equal the initial outlays. The IRR presented assumes a liquidation of the Company at net asset value as of the period end date.

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Consolidated Portfolio Asset Allocation (Unaudited)

June 30, 2009

Portfolio Holdings by Investment Type (% of Cash and Investments)

Portfolio Holdings by Industry (% of Cash and Investments)

Wired Telecommunications Carriers	13.9	%
Other Electrical Equipment and Component Manufacturing	12.1	%
Data Processing, Hosting, and Related Services	11.2	%
Satellite Telecommunications	9.7	%
Architectural, Engineering, and Related Services	8.9	%
Nonferrous Metal (except Aluminum) Production and Processing	7.5	%
Other Information Services	5.4	%
Communications Equipment Manufacturing	3.9	%
Offices of Real Estate Agents and Brokers	2.1	%
Industrial Machinery Manufacturing	1.8	%
Semiconductor and Other Electronic Component Manufacturing	1.7	%
Motor Vehicle Manufacturing	1.1	%
Depository Credit Intermediation	1.0	%
Full-Service Restaurants	1.0	%
Nondepository Credit Intermediation	0.8	%
Grocery Stores	0.7	%
Other Amusement and Recreation Industries	0.6	%
Securities and Commodity Contracts Intermediation and Brokerage	0.4	%
Petroleum and Coal Products Manufacturing	0.3	%
Plastics Product Manufacturing	0.3	%
Computer and Peripheral Equipment Manufacturing	0.2	%
Radio and Television Broadcasting	0.2	%
Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing	0.2	%
Electric Power Generation, Transmission and Distribution	0.1	%
Gambling Industries	0.1	%
Metalworking Machinery Manufacturing	0.1	%
Support Activities for Air Transportation	0.1	%
Couriers and Express Delivery Services	0.0	%
Management, Scientific, and Technical Consulting Services	0.0	%
Other General Merchandise Stores	0.0	%
Tobacco Manufacturing	0.0	%
Cash and Cash Equivalents	14.6	%
Total	100.0	%

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Consolidated Statement of Assets and Liabilities

June 30, 2009

Assets
Investments, at fair value:
Unaffiliated issuers (cost $311,678,136)	$	191,839,211
Controlled companies (cost $36,752,796)		11,874,828
Other affiliates (cost $123,842,333)		133,258,499
Total investments (cost $472,273,265)		336,972,538

Cash and cash equivalents		57,935,624
Accrued interest income:
Unaffiliated issuers		3,553,743
Controlled companies		10,978
Other affiliates		320,807
Receivable for investment securities sold		10,384,197
Deferred debt issuance costs		2,240,044
Prepaid expenses and other assets		278,729
Total assets		411,696,660

Liabilities
Credit facility payable		64,000,000
Payable for investment securities purchased		4,989,066
Management and advisory fees payable		565,599
Unrealized depreciation on swaps		474,069
Interest payable		69,314
Payable to affiliate		88,754
Accrued expenses and other liabilities		540,618
Total liabilities		70,727,420

Preferred stock
Series Z; $500/share liquidation preference; 400 shares authorized, 47 shares issued and outstanding		23,500
Accumulated dividends on Series Z preferred stock		948
Total Series Z preferred stock		24,448

Preferred equity facility
Series A preferred limited partner interests in Special Value Continuation Partners, LP; $20,000/interest liquidation preference; 6,700 interests authorized, issued and outstanding		134,000,000
Accumulated dividends on Series A preferred equity facility		443,834
Total preferred limited partner interests		134,443,834

Minority interest
General partner interest in Special Value Continuation Partners, LP		-

Net assets applicable to common shareholders	$	206,500,958

Composition of net assets applicable to common shareholders
Common stock, $0.001 par value; unlimited shares authorized, 418,955.777 shares issued and outstanding	$	419
Paid-in capital in excess of par, net of contributed unrealized gains		364,767,103
Accumulated net investment income		6,737,333
Accumulated net realized losses		(29,169,276	)
Accumulated net unrealized depreciation		(135,833,673	)
Accumulated dividends to Series Z preferred shareholders		(948	)
Net assets applicable to common shareholders	$	206,500,958

Common stock, NAV per share	$	492.89

See accompanying notes.

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Consolidated Statement of Investments (Unaudited)

June 30, 2009

Showing Percentage of Total Cash and Investments of the Company

	Principal		Fair		Percent of Cash
Investment	Amount		Value		and Investments

Debt Investments (55.15%)
Bank Debt (30.85%) (1)
Architectural, Engineering, and Related Services (0.82%)
Alion Science & Technology Corporation, 1st Lien Term Loan, LIBOR + 6%, due 2/6/13
(Acquired 4/14/08, Amortized Cost $3,042,537)	$	3,886,228	$	3,244,777		0.82	%

Communications Equipment Manufacturing (3.88%)
Mitel Networks Corporation, 1st Lien Term Loan, LIBOR + 3.25%, due 8/10/14
(Acquired 12/13/07, Amortized Cost $18,649,293)	$	19,839,674		15,326,148		3.88	%

Computer and Peripheral Equipment Manufacturing (0.25%)
Palm, Inc., Tranche B Term Loan, LIBOR + 3.5%, due 4/24/14
(Acquired 5/24/07, Amortized Cost $1,181,604)	$	1,312,893		978,106		0.25	%

Data Processing, Hosting, and Related Services (5.07%)
GXS Worldwide, Inc., 1st Lien Term Loan, Prime + 4.75%, due 3/31/13
(Acquired 10/12/07, Amortized Cost $6,902,432)	$	7,043,299		6,585,484		1.67	%
GXS Worldwide, Inc., 2nd Lien Term Loan, LIBOR + 10.25%, due 9/30/13
(Acquired 10/12/07, Amortized Cost $14,379,238)	$	14,598,211		13,430,354		3.40	%
Total Data Processing, Hosting, and Related Services				20,015,838

Electric Power Generation, Transmission and Distribution (0.05%)
La Paloma Generating Company Residual Bank Debt
(Acquired 2/2/05, 3/18/05, and 5/6/05, Cost $1,885,234) (3)	$	23,218,324		211,508		0.05	%

Metalworking Machinery Manufacturing (0.14%)
Mold-Masters Group, 1st Lien Term Loan, LIBOR + 3.5%, due 10/11/14
(Acquired 6/22/09, Amortized Cost $433,861)	$	774,752		561,695		0.14	%

Motor Vehicle Manufacturing (1.13%)
General Motors Corporation, Revolver, LIBOR + 2.5%, due 7/20/11
(Acquired 9/27/07, 11/27/07, and 12/14/07, Amortized Cost $4,055,281)	$	4,500,000		4,454,656		1.13	%

Offices of Real Estate Agents and Brokers (1.51%)
Realogy Corporation, Revolver, LIBOR + 2.25%, due 4/10/13
(Acquired 6/28/07, 7/9/07, and 7/13/07, Amortized Cost $9,893,333)	$	13,000,000		5,958,333		1.51	%

Other Electrical Equipment and Component Manufacturing (1.91%)
EaglePicher Corporation, 1st Lien Tranche B Term Loan, LIBOR + 4.5%, due 12/31/12
(Acquired 12/31/07, Amortized Cost $7,867,657) (2), (14)	$	7,867,657		7,533,281		1.91	%

Petroleum and Coal Products Manufacturing (0.33%)
Building Materials Corporation of America, 2nd Lien Term Loan, LIBOR + 5.75%, due 9/15/14
(Acquired 5/20/09, 5/28/09, and 6/2/09, Amortized Cost $1,223,609)	$	1,599,318		1,283,453		0.33	%

Radio and Television Broadcasting (0.17%)
High Plains Broadcasting Operating Company, Term Loan, Prime + 4%, due 9/14/16
(Acquired 9/15/08, Amortized Cost $179,919)	$	197,713		138,399		0.04	%
Newport Television LLC, Term Loan B, Prime + 5%, due 9/14/16
(Acquired 5/1/08 and 5/29/08, Amortized Cost $679,615)	$	746,829		522,781		0.13	%
Total Radio and Television Broadcasting				661,180

Satellite Telecommunications (8.05%)
WildBlue Communications, Inc., 1st Lien Delayed Draw Term Loan, LIBOR + 4% Cash + 2.5% PIK, due 12/31/09
(Acquired 9/29/06, Amortized Cost $13,928,218) (4)	$	13,861,797		13,434,853		3.40	%
WildBlue Communications, Inc., 2nd Lien Delayed Draw Term Loan, 8.5% Cash + 7.25% PIK, due 8/15/11
(Acquired 9/29/06, Amortized Cost $17,785,409) (4)	$	18,197,700		18,354,200		4.65	%
Total Satellite Telecommunications				31,789,053

Semiconductor and Other Electronic Component Manufacturing (1.66%)
Celerity, Inc., Senior Secured Notes, LIBOR + 12%, due 11/30/09
(Acquired 4/15/08, 1/21/09, 2/2/09, 2/27/09, and 4/28/09, Amortized Cost $22,079,264) (3)	$	22,116,385		6,192,588		1.57	%
Celerity, Inc., Senior 2nd Lien Secured Convertible Notes, 12% PIK, due 12/31/09
(Acquired 4/15/08, Amortized Cost $7,316,697) (3)	$	7,316,697		365,835		0.09	%
Total Semiconductor and Other Electronic Component Manufacturing				6,558,423

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Consolidated Statement of Investments (Unaudited) (Continued)

June 30, 2009

Showing Percentage of Total Cash and Investments of the Company

	Principal		Fair		Percent of Cash
Investment	Amount		Value		and Investments

Debt Investments (continued)
Wired Telecommunications Carriers (5.88%)
Cavalier Telephone Corporation, Senior Secured 1st Lien Term Loan, PRIME + 6.25% PIK, due 12/31/12
(Acquired 4/24/08, Amortized Cost $677,323)	$	866,750	$	486,825		0.12	%
Global Crossing Limited, Tranche B Term Loan, LIBOR + 6.25%, due 5/9/12
(Acquired 5/13/09, Amortized Cost $245,897)	$	330,063		280,224		0.07	%
Integra Telecom, Inc., 1st Lien Term Loan, Prime + 3.75%, due 8/31/13
(Acquired 5/20/09 and 6/20/09, Amortized Cost $137,413)	$	157,655		143,460		0.04	%
Integra Telecom, Inc., 2nd Lien Term Loan, Prime + 6%, due 2/28/14
(Acquired 9/05/07, 6/17/09, and 6/30/09, Amortized Cost $3,649,072) (3)	$	4,210,144		3,043,934		0.77	%
Integra Telecom, Inc., Term Loan, LIBOR + 10% PIK, due 8/31/14
(Acquired 9/05/07, Amortized Cost $5,035,778)	$	5,035,778		820,832		0.21	%
Interstate Fibernet, Inc., 1st Lien Term Loan, LIBOR + 4%, due 7/31/13
(Acquired 8/01/07, Amortized Cost $10,940,248) (2), (4)	$	11,249,612		9,304,835		2.36	%
Interstate Fibernet, Inc., 2nd Lien Term Loan, LIBOR + 7.5%, due 7/31/14
(Acquired 7/31/07, Amortized Cost $8,281,636) (2), (4)	$	8,281,636		7,540,429		1.91	%
NEF Telecom Company BV, 2nd Lien Tranche D Term Loan, EURIBOR + 5.5%, due 2/16/17
(Acquired 8/29/07 and 11/29/07, Amortized Cost $2,111,865) - (Netherlands) (4), (9)	€	1,538,600		1,568,598		0.40	%
Total Wired Telecommunications Carriers				23,189,137

Total Bank Debt (Cost $162,562,433)				121,765,588

Other Corporate Debt Securities (24.30%)

Architectural, Engineering, and Related Services (2.51%)
Alion Science & Technology Corporation, Senior Notes, 10.25%, due 2/1/15	$	9,978,000		3,991,200		1.01	%
ESP Holdings, Inc., Junior Unsecured Subordinated Promissory Notes, 18% PIK, due 3/31/15 (2), (4)	$	6,162,958		5,913,358		1.50	%
Total Architectural, Engineering, and Related Services				9,904,558

Couriers and Express Delivery Services (0.03%)
Federal Express Corporation, Fixed Rate Notes, 5.5%, due 8/15/09	$	100,000		100,508		0.03	%

Data Processing, Hosting, and Related Services (5.45%)
Anacomp, Inc., Promissory Note, LIBOR + 6.5% PIK, due 8/31/09 (2), (10)	$	1,225,124		1,212,873		0.31	%
Anacomp, Inc., Senior Secured Subordinated Notes, 14% PIK, due 3/12/13 (2), (10)	$	8,616,624		7,846,795		1.99	%
Terremark Worldwide, Inc., Senior Secured Notes, 12%, due 6/15/17
(Acquired 6/17/09, Amortized Cost $12,462,554) (5)	$	13,100,000		12,445,000		3.15	%
Total Data Processing, Hosting, and Related Services				21,504,668

Depository Credit Intermediation (0.55%)
Wells Fargo & Company, FDIC Guaranteed Notes, 3%, due 12/9/11	$	2,000,000		2,059,480		0.52	%
Wells Fargo & Company, Senior Unsecured FRN, LIBOR + 0.1%, due 9/15/09	$	100,000		100,049		0.03	%
Total Depository Credit Intermediation				2,159,529

Full-Service Restaurants (1.00%)
Landry's Restaurant, Inc., Senior Secured Notes, 14%, due 8/15/11
(Acquired 6/9/09, Amortized Cost $3,948,480) (5)	$	4,113,000		3,948,480		1.00	%

Gambling Industries (0.05%)
Harrah's Operating Company Inc., Senior Secured Notes, 10%, due 12/15/18
(Acquired 6/25/09, Amortized Cost $189,175) (5)	$	329,000		194,100		0.05	%

Grocery Stores (0.66%)
Safeway, Inc., Senior Unsecured Notes, 7.5%, due 9/15/09	$	2,600,000		2,624,544		0.66	%

Industrial Machinery Manufacturing (1.74%)
GSI Group Corporation, Senior Notes, 11%, due 8/20/13
(Acquired 8/20/08, Amortized Cost $6,783,482) (5)	$	7,778,000		6,852,418		1.74	%

Management, Scientific, and Technical Consulting Services (0.03%)
IBM Corporation, Senior Unsecured Notes, 4.25%, due 9/15/09	$	100,000		100,607		0.03	%

Nondepository Credit Intermediation (0.77%)
Fannie Mae, Fixed Rate Notes, 5.125%, due 7/13/09	$	100,000		100,165		0.03	%
Federal Farm Credit Bank, Fixed Rate Notes, 5.25%, due 8/3/09	$	100,000		100,430		0.03	%
Federal Home Loan Bank, Fixed Rate Notes, 6.5%, due 8/14/09	$	100,000		100,738		0.03	%
Freddie Mac, Fixed Rate Notes, 4.25%, due 7/15/09	$	100,000		100,154		0.03	%
General Electric Capital Corp., FDIC Guaranteed Notes, 1.8%, due 3/11/11	$	500,000		504,940		0.13	%
General Electric Capital Corp., FDIC Guaranteed Notes, 3%, due 12/9/11	$	2,000,000		2,066,280		0.52	%
Total Nondepository Credit Intermediation				2,972,707

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Consolidated Statement of Investments (Unaudited) (Continued)

June 30, 2009

Showing Percentage of Total Cash and Investments of the Company

	Principal Amount		Fair		Percent of Cash
Investment	or Shares		Value		and Investments

Debt Investments (continued)
Offices of Real Estate Agents and Brokers (0.57%)
Realogy Corporation, Senior Note, 10.5%, due 4/15/14	$	1,965,000	$	854,775		0.22	%
Realogy Corporation, Senior Subordinated Notes, 12.375%, due 4/15/15	$	4,915,000		1,376,200		0.35	%
Total Offices of Real Estate Agents and Brokers				2,230,975

Other Amusement and Recreation Industries (0.57%)
Bally Total Fitness Holdings, Inc., Senior Subordinated Notes, 14% Cash or 15.625% PIK, due 10/1/13
(Acquired 10/1/07, Amortized Cost $45,025,305) (3), (5)	$	44,090,666		2,248,624		0.57	%

Other General Merchandise Stores (0.03%)
Walmart Stores, Inc., Senior Unsecured Notes, 6.875%, due 8/10/09	$	100,000		100,620		0.03	%

Other Information Services (4.90%)
IRI Holdco (RW), LLC, Note Receivable, 8%, due 12/12/11
(Acquired 10/31/08, Cost $18,874,300) (4), (5)		20,044,707		19,343,142		4.90	%

Plastics Product Manufacturing (0.34%)
Pliant Corporation, Senior Secured 2nd Lien Notes, 11.125%, due 9/1/09 (3)	$	13,477,000		1,347,700		0.34	%

Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing (0.21%)
AGY Holding Corp., Senior Secured 2nd Lien Notes, 11%, due 11/15/14	$	1,029,000		825,773		0.21	%

Securities and Commodity Contracts Intermediation and Brokerage (0.38%)
Goldman Sachs Group, Inc., FDIC Guaranteed Notes, 1.7%, due 3/15/11	$	500,000		503,110		0.13	%
JP Morgan Chase & Co., FDIC Guaranteed Notes, 1.65%, due 2/23/11	$	1,000,000		1,005,840		0.25	%
Total Securities and Commodity Contracts Intermediation and Brokerage				1,508,950

Tobacco Manufacturing (0.03%)
Philip Morris Capital Corporation, Senior Unsecured Notes, 7.5%, due 7/16/09	$	115,000		115,107		0.03	%

Wired Telecommunications Carriers (4.48%)
NEF Telecom Company BV, Mezzanine Term Loan, EURIBOR + 10% PIK, due 8/16/17
(Acquired 8/29/07, Amortized Cost $20,949,884) - (Netherlands) (4), (5), (9)	€	15,156,885		17,685,729		4.48	%

Total Other Corporate Debt Securities (Cost $155,112,510)				95,768,739

Total Debt Investments (Cost $317,674,943)				217,534,327

Equity Securities (30.21%)
Architectural, Engineering, and Related Services(5.58%)
ESP Holdings, Inc., Common Stock
(Acquired 9/12/07, Cost $9,311,782) (2), (3), (5), (6), (8)		88,670		16,871,337		4.27	%
ESP Holdings, Inc., 15% PIK, Preferred Stock
(Acquired 9/12/07, Cost $4,502,521) (2), (3), (4), (5), (6)		40,618		5,160,563		1.31	%
Total Architectural, Engineering, and Related Services				22,031,900

Data Processing, Hosting, and Related Services (0.71%)
Anacomp, Inc., Common Stock
(Acquired during 2002, 2003, 2005, and 2006, Cost $26,711,048) (2), (3), (5), (10)		1,253,969		2,815,160		0.71	%

Depository Credit Intermediation (0.45%)
Doral Holdings, LP Interest
(Acquired 7/12/07, Cost $11,138,132) (3), (5)		11,138,132		1,792,013		0.45	%

Industrial Machinery Manufacturing (0.03%)
GSI Group Inc. Common Stock
(Acquired 8/20/08, Amortized Cost $1,136,228) (3), (5)		216,987		107,409		0.03	%

Nonferrous Metal (except Aluminum) Production and Processing (7.52%)
International Wire Group, Inc., Common Stock
(Acquired 10/20/04, Cost $29,012,690) (2), (4), (5), (6)		1,979,441		29,691,615		7.52	%

Other Electrical Equipment and Component Manufacturing (10.21%)
EaglePicher Holdings, Inc., Common Stock
(Acquired 3/9/05, Cost $24,285,461) (2), (3), (4), (5), (6), (7)		1,312,720		40,353,013		10.21	%

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Consolidated Statement of Investments (Unaudited) (Continued)

June 30, 2009

Showing Percentage of Total Cash and Investments of the Company

	Principal Amount		Fair		Percent of Cash
Investment	or Shares		Value		and Investments

Equity Securities (continued)
Other Information Services (0.49%)
IRI Holdco (RW), LLC, Warrants to Purchase IRI Preferred Stock
(Acquired 10/31/08, Cost $1,170,406) (3), (4), (5)		4,063,914	$	1,950,679		0.49	%

Plastics Product Manufacturing (0.00%)
Pliant Corporation, Common Stock
(Acquired 7/18/06, Cost $177) (3), (5), (13)		422		-		0.00	%
Pliant Corporation, 13% PIK, Preferred Stock (3)		5,570,318		-		0.00	%
Total Plastics Product Manufacturing				-

Satellite Telecommunications (1.69%)
WildBlue Communications, Inc., Warrants to Purchase Common Stock
(Acquired 10/23/06, Cost $673,094) (3), (4), (5)		51,896		6,688,356		1.69	%

Semiconductor and Other Electronic Component Manufacturing (0.00%)
Celerity, Inc., Common Stock
(Acquired 12/23/04, 9/8/05, and 2/1/06, Cost $12,135,924) (3), (5)		2,427,185		-		0.00	%
Kinetics Holdings, LLC, Common Units
(Acquired 1/7/05, Cost $2,587,349) (3), (5)		3,384,000		1		0.00	%
Total Semiconductor and Other Electronic Component Manufacturing				1

Support Activities for Air Transportation (0.05%)
Alabama Aircraft Industries, Inc., Common Stock
(Acquired 3/12/02, 3/13/02, and 12/11/02, Cost $3,550,121) (3), (5)		164,636		222,259		0.05	%

Wire Telecommunications Carriers (3.48%)
ITC^DeltaCom, Inc., Common Stock
(Acquired 7/31/07, Cost $23,477,380) (2), (3), (5), (6), (12)		10,890,068		10,890,068		2.75	%
NEF Kamchia Co-Investment Fund, LP Interest
(Acquired 7/31/07, Cost $3,367,227) - (Cayman Islands) (3), (4), (5), (9)		2,455,500		2,895,738		0.73	%
Total Wire Telecommunications Carriers				13,785,806

Total Equity Securities (Cost $154,598,322)				119,438,211

Total Investments (Cost $472,273,265) (11)				336,972,538

Cash and Cash Equivalents (14.64%)
Chevron Funding, Commercial Paper, 0.17%, 7/1/09	$	1,000,000		1,000,000		0.25	%
Wells Fargo & Company, Commercial Paper, 0.05%, 7/1/09	$	5,000,000		5,000,000		1.26	%
Citicorp, Commercial Paper, 0.35%, 7/7/09	$	6,000,000		5,999,650		1.52	%
Toyota Motor Credit Corporation, Commercial Paper, 0.15%, 7/7/09	$	15,000,000		14,999,625		3.80	%
General Electric Capital Corporation, Commercial Paper, 0.15%, 7/10/09	$	5,000,000		4,999,813		1.26	%
UBS Finance, Commercial Paper, 0.17%, 7/13/09	$	4,000,000		3,999,773		1.01	%
General Electric Capital Corporation, Commercial Paper, 0.17%, 7/15/09	$	10,000,000		9,999,339		2.53	%
Wells Fargo & Company, Commercial Paper, 0.20%, 7/22/09	$	5,000,000		4,999,417		1.26	%
Union Bank of California, Commercial Paper, 0.15%, 7/29/09	$	5,000,000		4,999,417		1.26	%
Wells Fargo & Company, Overnight Repurchase Agreement, 0.05%, Collateralized by Federal Home Loan Bank Discount Note	$	1,536,789		1,536,789		0.39	%
Cash Held on Account at Various Institutions	$	401,801		401,801		0.10	%
Total Cash and Cash Equivalents				57,935,624

Total Cash and Investments			$	394,908,162		100.00	%

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Consolidated Statement of Investments (Unaudited) (Continued)

June 30, 2009

Notes to Statement of Investments:

(1)	Investments in bank debt generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower.

(2)	Affiliated issuer - as defined under the Investment Company Act of 1940 (ownership of 5% or more of the outstanding voting securities of this issuer).

(3)	Non-income producing security.

(4)	Priced by an independent third party pricing service.

(5)	Restricted security.

(6)	Investment is not a controlling position.

(7)	The Partnership's advisor may demand registration at any time more than 180 days following the first initial public offering of common equity by the issuer.

(8)	Priced by Investment Manager.

(9)	Principal amount denominated in euros. Amortized cost and fair value converted from euros to US dollars.

(10)	Issuer is a controlled company.

(11)	Includes investments with an aggregate market value of $5,160,562 that have been segregated to collateralize certain unfunded commitments.

(12)	Priced using the closing price per Pink Sheets.

(13)	The Partnership may demand registration of the shares as part of a majority (by interest) of the holders of the registrable shares of the issuer, or in connection with an initial public offering by the issuer.

(14)	Average quote obtained by multiple market brokers

Aggregate purchases and aggregate sales of investments, other than Government securities, totaled $45,763,984 and $61,778,148 respectively.

Aggregate purchases includes investment assets received as payment in-kind. Aggregate sales includes principal paydowns on debt investments.

The total value of restricted securities and bank debt as of June 30, 2009 was $303,921,292, or 77% of total cash and investments of the Company.

Swaps at June 30, 2009 were as follows:

Instrument	Notional Amount		Fair Value

Swaps
Euro/US Dollar Cross Currency Basis Swap, Pay Euros/Receive USD, Expires 5/16/14	$	12,081,888	$	(474,069	)

See accompanying notes.

Special Value Continuation Fund, LLC

(A Delaware Limited Liability Company)

Consolidated Statement of Operations (Unaudited)

Six Months Ended June 30, 2009