Nuveen Churchill Direct Lending Corp
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
NCDL$11.81-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001628280-24-021951
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001628280-24-035331
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 228 previous paragraphs and 226 current paragraphs.
194 unchanged; 29 reworded; 3 added; 3 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
For the three months ended June 30, 2023, we recorded a net unrealized loss of $(4.2) million primarily attributable to modest softening of certain of our portfolio companies' credit metrics partially offset by tightening in market spreads. We recorded a net unrealized loss of (15.4) million for the six months ended June 30, 2023, primarily due to modest softening of certain of our portfolio companies' credit metrics.
Current report
On July 31, 2024, the Board designated Stephen Potter, one of the Company’s current Independent Directors, as the lead Independent Director (the “Lead Independent Director”). The duties of the Lead Independent Director include, among other things, chairing executive sessions of the Independent Directors, acting as a liaison between the Independent Directors and the Chairman of the Board and between the Independent Directors and officers of the Company and the Adviser, facilitating communication among the Independent Directors and the Company’s counsel, reviewing and commenting on Board and committee meeting agendas and calling additional meetings of the Independent Directors as appropriate.
Current report
On July 31, 2024, based on the recommendation of the Compensation Committee of the Board, the Board approved the following changes to the compensation of the Independent Directors, effective as of January 1, 2025: (a) increase the annual retainer from $100,000 to $120,000; (b) increase the annual retainer payable to the Chair of the Audit Committee of the Board from $10,000 to $12,000; and (c) pay an annual retainer to the Lead Independent Director of $12,000.
Removed paragraphs (3)
Previous report
Following any calendar quarter in which Available Operating Funds (as defined below) exceeded the cumulative distributions accrued to our shareholders based on distributions declared with respect to record dates occurring in such calendar quarter (such amount referred to as the “Excess Operating Funds”), we paid such Excess Operating Funds, or a portion thereof (each, a “Reimbursement Payment”), to the Adviser until such time as all Expense Payments made by the Adviser to us within three years prior to the last business day of such calendar quarter were reimbursed. “Available Operating Fund" means the sum of (i) net investment income (including net realized short-term capital gains reduced by net realized long-term capital losses), (ii) net capital gains (including the excess of net realized long-term capital gains over net realized short-term capital losses) and (iii) dividends and other distributions paid to us on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above). The amount of the Reimbursement Payment for any calendar quarter was equal the lesser of (i) the Excess Operating Funds in such quarter and (ii) the aggregate amount of all Expense Payments made by the Adviser to us within three years prior to the last business day of such calendar quarter that were not been previously reimbursed by us to the Adviser.
Previous report
No Reimbursement Payment was made for any quarter if: (1) the annualized rate (based on a 365-day year) of regular cash distributions per share of common stock declared by our Board exclusive of returns of capital, distribution rate reductions due to any fees (including to a transfer agent) payable in connection with distributions, and any declared special dividends or distributions (the “Effective Rate of Distributions Per Share”) declared by us at the time of such Reimbursement Payment, was less than the Effective Rate of Distributions Per Share at the time the Expense Payment was made to which such Reimbursement Payment relates, or (2) our Operating Expense Ratio (as defined below) at the time of such Reimbursement Payment was greater than the Operating Expense Ratio at the time the Expense Payment was made to which such Reimbursement Payment related. The “Operating Expense Ratio” was calculated by dividing Operating Expenses (as defined below), less organizational and offering expenses, base management and incentive fees owed to the Adviser, and interest expense, by our net assets. “Operating Expenses” means all of our operating costs and expenses incurred, as determined in accordance with U.S. GAAP. The Adviser may waive its right to receive all or a portion of any Reimbursement Payment in any particular calendar quarter, in which case such Reimbursement Payment may be reimbursable in a future calendar quarter.
Previous report
On April 9, 2024, we entered into Amendment No. 1 (“Amendment No. 1”) to the Senior Secured Revolving Credit Agreement, by and among the Company, as borrower, NCDL Equity Holdings, as subsidiary guarantor, the lenders and issuing banks party thereto, SMBC, as administrative agent for the lenders. Amendment No. 1, among other things: (a) increased the maximum principal amount available under the Revolving Credit Facility from $185,000,000 to $250,000,000 pursuant to the accordian feature; and (b) replaced the interest rate benchmark for borrowings denominated in Canadian Dollars from CDOR to CORRA, which includes a credit spread adjustment of 0.29547% for one month tenor borrowings and 0.32138% for three month tenor borrowings.
Reworded paragraphs (29)
Previous wording
Our portfolio and investment activity for the three months ended March 31, 2024 and 2023 is presented below (information presented herein is at amortized cost unless otherwise indicated) (dollar amounts in thousands):
Current wording
Our portfolio and investment activity for the three and six months ended June 30, 2024 and 2023 is presented below (information presented herein is at amortized cost unless otherwise indicated) (dollar amounts in thousands):
Previous wording
•Weighted average reported annual EBITDA of $77.4 million.1
Current wording
•Weighted average reported annual EBITDA of $76.5 million.1
Previous wording
•Weighted average of 4.83x net leverage.3
Current wording
•Weighted average of 4.8x net leverage.3
Previous wording
•Approximately 84% of our debt investments have financial covenants.4
Current wording
•Approximately 83% of our debt investments have financial covenants.4
Previous wording
2 The interest coverage ratio calculation is derived from the most recently available portfolio company financial information received by the Adviser, and is a weighted average based on the fair market value of each respective first lien loan investment as of its most recent reporting to lenders. Such reporting may include assumptions regarding the impact of interest rate hedges established by borrowers to reduce their exposure to floating interest rates (resulting in a reduced hedging rate being used for the total interest expense in respect of such hedges, rather than any higher rates applicable under the documentation for such loans), even if such hedging instruments are not pledged as collateral to lenders in respect of such loans and do not secure the loans themselves. The interest rate coverage ratio excludes junior capital investments and equity co-investments, and applies solely to traditional middle market first lien loans held by us, which also excludes any upper middle market or other first lien loans investments that do not have maintenance financial covenants, and first lien loans that the Adviser has assigned a risk rating of ‘8’ or higher, as well as any portfolio companies with net senior leverage of 15x or greater. As a result of the foregoing exclusions, the interest coverage ratio shown herein applies to 73.48% of our total investments, and 82.61% of our total first lien loan investments, in each case based upon fair value.
Current wording
2 The interest coverage ratio calculation is derived from the most recently available portfolio company financial information received by the Adviser, and is a weighted average based on the fair market value of each respective first lien loan investment as of its most recent reporting to lenders. Such reporting may include assumptions regarding the impact of interest rate hedges established by borrowers to reduce their exposure to floating interest rates (resulting in a reduced hedging rate being used for the total interest expense in respect of such hedges, rather than any higher rates applicable under the documentation for such loans), even if such hedging instruments are not pledged as collateral to lenders in respect of such loans and do not secure the loans themselves. The interest rate coverage ratio excludes junior capital investments and equity co-investments, and applies solely to traditional middle market first lien loans held by us, which also excludes any upper middle market or other first lien loans investments that do not have maintenance financial covenants, and first lien loans that the Adviser has assigned a risk rating of ‘8’ or higher, as well as any portfolio companies with net senior leverage of 15x or greater. As a result of the foregoing exclusions, the interest coverage ratio shown herein applies to 73.71% of our total investments, and 81.35% of our total first lien loan investments, in each case based upon fair value.
Previous wording
1 As of March 31, 2024, Subordinated Debt is comprised of second lien term loans and/or second lien notes of $84,676, mezzanine debt of $81,113 and $713 of structured debt at fair value and second lien term loans and/or second lien notes of $88,879, mezzanine debt of $86,199 and $3,252 of structured debt at amortized cost.
Current wording
1 As of June 30, 2024, Subordinated Debt is comprised of second lien term loans and/or second lien notes of $64,121, mezzanine debt of $89,329 and $1,242 of structured debt at fair value and second lien term loans and/or second lien notes of $77,227, mezzanine debt of $95,284 and $4,254 of structured debt at amortized cost.
Previous wording
1 Weighted average yield inclusive of debt and income producing investments on non-accrual status, at cost, as of March 31, 2024 was 11.50%. There were no investments on non-accrual as of December 31, 2023.
Current wording
1 Weighted average yield inclusive of debt and income producing investments on non-accrual status, at cost, as of June 30, 2024 was 11.15%. There were no investments on non-accrual as of December 31, 2023.
Previous wording
2 Weighted average yield inclusive of debt and income producing investments on non-accrual status, at fair value, as of March 31, 2024 was 11.67%. There were no investments on non-accrual as of December 31, 2023.
Current wording
2 Weighted average yield inclusive of debt and income producing investments on non-accrual status, at fair value, as of June 30, 2024 was 11.36%. There were no investments on non-accrual as of December 31, 2023.
Previous wording
As of March 31, 2024, 93.50% and 93.60% of our debt and income producing investments at cost and at fair value, respectively, had interest rate floors that govern the minimum applicable interest rates on such loans. As of December 31, 2023, 94.43% and 94.55% of our debt and income producing investments at cost and at fair value, respectively, had interest rate floors that govern the minimum applicable interest rates on such loans.
Current wording
As of June 30, 2024, 92.81% and 92.91% of our debt and income producing investments at cost and at fair value, respectively, had interest rate floors that govern the minimum applicable interest rates on such loans. As of December 31, 2023, 94.43% and 94.55% of our debt and income producing investments at cost and at fair value, respectively, had interest rate floors that govern the minimum applicable interest rates on such loans.
Previous wording
The weighted average yield of our debt and income producing securities is not the same as a return on investment for our shareholders, but rather relates to our investment portfolio and is calculated before the payment of all of our and our subsidiaries’ fees and expenses. The weighted average yield was computed using the effective interest rates as of each respective date, including accretion of original issue discount, but excluding any investments on non-accrual status, if any. There can be no assurance that the weighted average yield will remain at its current level. Total weighted average yields of our debt and income producing investments, at cost, decreased from 11.72% to 11.55% from December 31, 2023 to March 31, 2024. The decrease in weighted average yields was primarily due to the tightening of spreads in newly originated investments.
Current wording
The weighted average yield of our debt and income producing securities is not the same as a return on investment for our shareholders, but rather relates to our investment portfolio and is calculated before the payment of all of our and our subsidiaries’ fees and expenses. The weighted average yield was computed using the effective interest rates as of each respective date, including accretion of original issue discount, but excluding any investments on non-accrual status, if any. There can be no assurance that the weighted average yield will remain at its current level. Total weighted average yields of our debt and income producing investments, at cost, decreased from 11.72% to 11.32% from December 31, 2023 to June 30, 2024. The decrease in weighted average yields was primarily due to the tightening of spreads in newly originated investments in the first half of 2024. Following our IPO on January 29, 2024, we invested in more upper middle market loans than in the fourth quarter of 2023, which had tighter spreads than traditional middle market loans. We also saw an increase in repricing transactions for existing portfolio investments in the first half of 2024.
Previous wording
While the macro-economic environment continues to present challenges for borrowers, with interest rates remaining at elevated levels, we believe the current environment for private credit remains attractive. Spreads have tightened modestly relative to the fourth quarter of 2023 amidst increased competition in the broadly syndicated loan market and healthy issuance levels of collateralized loan obligations ("CLO"), but remain compelling relative to historical levels.
Current wording
While the macro-economic environment continues to present challenges for borrowers, with interest rates at elevated levels, we believe the current environment for private credit remains attractive. Spreads continued to tighten in the first half of 2024 amidst increased competition in the broadly syndicated loan market and healthy issuance levels of collateralized loan obligations ("CLO"), but remain compelling relative to historical levels.
Previous wording
As markets stabilize and private equity firms become more active in an effort to deploy dry powder and return capital to their investors we are seeing private equity mergers and acquisitions ("M&A") volumes increase, leading to higher levels of demand for middle-market financings. Prepayment activity is also increasing as a result, driven primarily by M&A activity, but also in part by repricing and refinancing while spreads continue to tighten. While prepayments serve as an offset to new transaction activity, we believe that lenders who are well positioned with available liquidity as well as incumbent positions in portfolio companies will benefit from increased levels of activity in the market.
Current wording
As financial markets stabilize and private equity firms become more active in an effort to deploy dry powder and return capital to their investors we are seeing private equity mergers and acquisitions ("M&A") volumes increase, leading to higher levels of demand for middle-market financings. Prepayment activity is also increasing as a result, driven primarily by M&A activity, but also in part by repricing and refinancing while spreads continue to tighten. While prepayments serve as an offset to new transaction activity, we believe that lenders who are well positioned with available liquidity as well as incumbent positions in portfolio companies will benefit from increased levels of activity in the market.
Previous wording
As of March 31, 2024 and December 31, 2023, the weighted average Internal Risk Rating of our investment portfolio was 4.14 and 4.14, respectively. As of March 31, 2024, there was one portfolio company on non-accrual. As of March 31, 2024, the amortized cost of the portfolio company on non-accrual status was $7.2 million, which represents approximately 0.40% of total investments at amortized cost. As of December 31, 2023, there were no loans on non-accrual.
Current wording
As of June 30, 2024 and December 31, 2023, the weighted average Internal Risk Rating of our investment portfolio was 4.11 and 4.14, respectively. As of June 30, 2024, there were three portfolio companies on non-accrual. As of June 30, 2024, the amortized cost of the portfolio companies on non-accrual status were $29.1 million, which represents approximately 1.44% of total investments at amortized cost. As of December 31, 2023, there were no loans on non-accrual.
Previous wording
Operating results for the three months ended March 31, 2024 and 2023 were as follows (dollars amounts in thousands):
Current wording
Operating results for the three and six months ended June 30, 2024 and 2023 were as follows (dollars amounts in thousands):
Previous wording
Investment income, attributable to interest and fees on our debt investments, increased to $51.6 million for the three months ended March 31, 2024, respectively, from $34.0 million for the three months ended March 31, 2023, primarily due to an increase in interest income from higher weighted average interest rates and increased investment activity driven by an increase in our deployed capital. As of March 31, 2024, the size of our portfolio increased to $1.8 billion from $1.3 billion as of March 31, 2023, at cost. As of March 31, 2024, the weighted average yield of our debt and income producing investments increased to 11.55% from 11.03% as of March 31, 2023 on cost, primarily due to increases in base interest rates. The shifting environment in base interest rates, such as SOFR and any applicable alternate rates, may continue to affect our investment income in the future.
Current wording
Investment income, attributable to interest and fees on our debt investments, increased to $55.1 million and $106.7 million for the three and six months ended June 30, 2024, respectively, from $37.1 million and $71.1 million for the three and six months ended June 30, 2023 respectively, primarily due to increased investment activity driven by an increase in our deployed capital, slightly offset by a decrease in the weighted average yield of our debt and income producing investments as a result of spread tightening. As of June 30, 2024, the size of our portfolio increased to $2.0 billion from $1.4 billion as of June 30, 2023, at cost. As of June 30, 2024, the weighted average yield of our debt and income producing investments decreased to 11.32% from 11.37% as of June 30, 2023 on cost, primarily due to overall tightening of spreads in newly originated investments. The shifting environment in base interest rates, such as SOFR and any applicable alternate rates, may affect our investment income in the future.
Previous wording
Total expenses before expense support and Incentive fees waived increased to $26.3 million for the three months ended March 31, 2024 from $16.2 million for the three months ended March 31, 2023.
Current wording
Total expenses before expense support and waived incentive fees increased to $27.2 million and $53.5 million for the three and six months ended June 30, 2024, respectively, from $18.5 million and $34.8 million for the three and six months ended June 30, 2023, respectively.
Previous wording
Interest and debt financing expenses increased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to higher average daily borrowings, higher average interest rates, the addition of the Revolving Credit Facility (as defined below) in the second quarter of 2023 and the completion of the 2023 Debt Securitization and the 2024 Debt
Current wording
Interest and debt financing expenses increased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 primarily due to higher average daily borrowings, higher average interest rates, the use of the Revolving Credit Facility (as defined below) in the third quarter of 2023 and the completion of the 2023 Debt Securitization and the 2024 Debt Securitization (each as defined below) on December 7, 2023 and March 14, 2024, respectively. The average daily borrowings for the three and six months ended June 30, 2024 were $939.0 million and $879.5 million, respectively, compared to $774.4 million and $756.3 million for the three and six months ended June 30, 2023, respectively. The average interest rate for the three and six months ended June 30, 2024 was 7.73% and 7.71%, respectively, compared to 7.17% and 6.97%, respectively, for the three and six months ended June 30, 2023.
Previous wording
The increase in management fees for the three months ended March 31, 2024 from the comparable period in 2023 were driven by our deployment of capital and our increasing invested balance. As of March 31, 2024, incentive fee based on income of $4.5 million were waived in accordance with our Advisory Agreement.
Current wording
The increases in management fees increased for the three and six months ended June 30, 2024 from the comparable periods in 2023 were driven by increases in our total assets. Incentive fees based on income for the three and six months ended June 30, 2024 of $3.1 million and $7.5 million, respectively, were waived in accordance with our Advisory Agreement.
Previous wording
Professional fees include legal, audit, tax, valuation, and other professional fees incurred related to the management of us. Administrative fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of the our chief financial officer and chief compliance officer, and their respective staffs. Other general and administrative expenses include insurance, filing, research, rating agencies, subscriptions and other costs. The increase in professional, administration, and other general and administrative fees for the three months ended March 31, 2024 from the comparable period in 2023 was primarily driven by growing needs of the business given the increase in the Company's size year over year.
Current wording
Professional fees include legal, audit, tax, valuation, and other professional fees incurred related to the management of us. Administrative fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of the our chief financial officer and chief compliance officer, and their respective staffs. Other general and administrative expenses include insurance, filing, research, rating agencies, subscriptions and other costs. The increases in professional, administration, and other general and administrative fees for the three and six months ended June 30, 2024 from the comparable periods in 2023 was primarily driven by growing needs of the business given the increase in the Company's size year over year.
Previous wording
For the three months ended March 31, 2024, we had a net realized loss on investments of $(3.6) million primarily driven by a final realization of an underperforming debt position which generated a realized loss compared to a net realized gain of $6.5 million for the three months ended March 31, 2023 primarily driven by the realization of two equity investments, which generated realized gains.
Current wording
For the three months ended June 30, 2024, we had a net realized gain on investments of $1.0 million compared to a net realized gain of $218 thousand for the three months ended June 30, 2023. The increase in the net realized gain was primarily driven by full or partial repayments of our investments. For the six months ended June 30, 2024, we had a net realized loss on investments of $(2.6) million, compared to a net realized gain of $6.7 million for the six months ended June 30, 2023. The increase in the net realized loss was primarily driven by a final realization of an underperforming debt position which generated a realized loss in the first quarter of 2024, offset by realized gains in the second quarter of 2024.
Previous wording
We recorded a net change in unrealized gain of $4.1 million for the three months ended March 31, 2024, compared to a net unrealized loss of $(11.1) million for the three months ended March 31, 2023, which reflects the net change in the fair value of our investment portfolio relative to its cost basis over the period. The increase in unrealized gains for the three months ended March 31, 2024 compared to the comparable period in 2023 resulted primarily from the tightening of market spreads and a reversal of unrealized losses on certain of our underperforming debt positions that were ultimately realized.
Current wording
For the three months ended June 30, 2024, we recorded a net change in unrealized loss of $(12.1) million, which resulted from a decrease in fair value primarily attributable to two underperforming portfolio companies. We recorded a net change in unrealized loss of $(8.0) million for the six months ended June 30, 2024, which resulted from a decrease in fair value of two underperforming portfolio companies in the second quarter of 2024, offset by unrealized gains in the first quarter of 2024 driven primarily from the tightening of market spreads and a reversal of unrealized losses on certain of our underperforming debt positions that were ultimately realized.
Previous wording
Our liquidity and capital resources are generated primarily from cash flows from income earned from our investments and principal repayments, and our net borrowings from our credit facilities and CLO debt issuances (discussed further below). Prior to our IPO on January 29, 2024, we also generated cash flow from the proceeds of capital drawdowns of our privately placed capital commitments. In the future, we may also generate cash flow from future offerings of securities including issuances of debt and/or equity securities through both public registered offerings off of a shelf registration statement and private offerings. Due to the diverse capital sources available to us at this time, we believe we have adequate liquidity to support our near-term capital requirements. Due to an uncertain economic outlook and current market volatility, we regularly evaluate our overall liquidity position and take proactive steps to maintain that position based on such circumstances. The primary uses of our cash are (i) purchases of investments in portfolio companies, (ii) funding the cost of our operations (including fees paid to our Adviser), (iii) debt service, repayment and other financing costs of our borrowings, (iv) cash distributions to the holders of our shares, and (v) share repurchases under the Company 10b5-1 Plan (defined below).
Current wording
Due to the diverse capital resources available to us at this time, we believe we have adequate liquidity to support our near-term capital requirements. Our liquidity and capital resources are generated primarily from cash flows from income earned from our investments and principal repayments, and our net borrowings from our credit facilities and CLO debt issuances (discussed further below). Prior to our IPO on January 29, 2024, we also generated cash flow from the proceeds of capital drawdowns of our privately placed capital commitments. In the future, we may also generate cash flow from future offerings of securities including issuances of debt and/or equity securities through both public registered offerings using a shelf registration statement and private offerings. Due to an uncertain economic outlook and current market volatility, we regularly evaluate our overall liquidity position and take proactive steps to maintain that position based on such circumstances. The primary uses of our cash are (i) purchases of investments in portfolio companies, (ii) funding the cost of our operations (including fees paid to our Adviser), (iii) debt service, repayment and other financing costs of our borrowings, (iv) cash distributions to the holders of our shares, and (v) share repurchases under the Company 10b5-1 Plan (defined below).
Previous wording
We are generally permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our shares if our asset coverage, as defined in the 1940 Act, is at least equal to 150%, if certain requirements are met. In connection with our organization, our Board and TIAA (as our initial shareholder) authorized us to adopt the 150% asset coverage ratio. As of March 31, 2024 and December 31, 2023, our asset coverage ratio was 220.92% and 178.57%, respectively.
Current wording
We are generally permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our shares if our asset coverage, as defined in the 1940 Act, is at least equal to 150%, if certain requirements are met. In connection with our organization, our Board and TIAA (as our initial shareholder) authorized us to adopt the 150% asset coverage ratio. As of June 30, 2024 and December 31, 2023, our asset coverage ratio was 195.88% and 178.57%, respectively.
Previous wording
Cash and cash equivalents as of March 31, 2024, taken together with cash available under our credit facilities, is expected to be sufficient for our investing activities and to conduct our operations in the near term. As of March 31, 2024, we had $147.5 million available under our Wells Fargo Financing Facility (as defined below), $111.0 million available under our SMBC Financing Facility (as defined below), and $173.0 million available under our SMBC Corporate Revolver (as defined below), subject to asset coverage limitations.
Current wording
Cash and cash equivalents as of June 30, 2024, taken together with cash available under our credit facilities, are expected to be sufficient for our investing activities and to conduct our operations in the near term. As of June 30, 2024, we had $81.0 million available under our Wells Fargo Financing Facility (as defined below), $36.2 million available under our SMBC Financing Facility (as defined below), and $172.8 million available under our SMBC Corporate Revolver (as defined below), subject to asset coverage limitations.
Previous wording
For the three months ended March 31, 2024, our cash and cash equivalents balance decreased by $(3.2) million. During that period, $97.6 million was used in operating activities, primarily relating to investment purchases of $204.3 million, offset by $54.9 million in repayments and sales of investments in portfolio companies. During the same period, $94.3 million was used in financing activities, consisting primarily of proceeds from issuance of common shares and secured borrowings of $241.7 million and $323.0 million, respectively, net of shareholder distributions and repayments of secured borrowings of $19.3 million and $449.4 million, respectively.
Current wording
For the six months ended June 30, 2024, our cash and cash equivalents balance increased by $3.6 million. During that period, $266.9 million was used in operating activities, primarily relating to investment purchases of $509.3 million, offset by $154.9 million in repayments and sales of investments in portfolio companies. During the same period, $270.5 million was provided by financing activities, consisting primarily of proceeds from issuance of common shares and secured borrowings of $241.7 million and $546.3 million, respectively, net of shareholder distributions and repayments of secured borrowings of $40.8 million and $469.4 million, respectively.
Previous wording
From April 1, 2024 through May 3, 2024, BofA Securities, Inc., as agent, has repurchased $2.1 million of shares of the Company’s common stock pursuant to the Company 10b5-1 Plan. As of May 3, 2024, the approximate dollar value of the Company’s common stock remaining to be purchased under the Company 10b5-1 Plan was $97.2 million.
Current wording
As of July 31, 2024, BofA Securities, Inc., as agent, repurchased an additional 75,675 shares of the Company’s common stock pursuant to the Company 10b5-1 Plan for approximately $1.33 million.
Previous wording
The initial maximum principal amount of the Revolving Credit Facility is $185 million, subject to availability under the borrowing base, which is based on our portfolio investments and other outstanding indebtedness. Maximum capacity under the Revolving Credit Facility may be increased to $300 million through the exercise by us of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Revolving Credit Facility is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions, and includes a $25 million limit for swingline loans.
Current wording
The Revolving Credit Facility was amended on April 9, 2024. The amendment, among other things, increased the maximum principal amount available under the Revolving Credit Facility from $185 million to $250 million pursuant to the accordion feature, subject to availability under the borrowing base,, subject to availability under the borrowing base, which is based on our portfolio investments and other outstanding indebtedness. Maximum capacity under the Revolving Credit Facility may be increased to $300 million through the exercise by us of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Revolving Credit Facility is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions, and includes a $25 million limit for swingline loans.
Previous wording
On December 31, 2019, we entered into the Expense Support Agreement with the Adviser. The Expense Support Agreement automatically terminated pursuant to its terms upon the consummation of the IPO on January 29, 2024. Under the Expense Support Agreement, the Adviser was able to pay certain of our expenses (each, an “Expense Payment”), provided that no portion of the payment was used to pay any of our interest expense. Such Expense Payment was made in any combination of cash or other immediately available funds no later than forty-five days after a written commitment from the Adviser to pay such expense, and/or by an offset against amounts due from us to the Adviser or its affiliates.
Current wording
On December 31, 2019, we entered into the Expense Support Agreement with the Adviser. The Expense Support Agreement automatically terminated pursuant to its terms upon the consummation of the IPO on January 29, 2024. Under the Expense Support Agreement, the Adviser was able to pay certain of our expenses (each, an “Expense Payment”), provided that no portion of the payment was used to pay any of our interest expense. Such Expense Payment was made in any combination of cash or other immediately available funds no later than forty-five days after a written commitment from the Adviser to pay such expense, and/or by an offset against amounts due from us to the Adviser or its affiliates. The cumulative amount of expense payments by the Adviser under the Expense Support Agreement was $2,979, of which $1,101 was reimbursed by the Company prior to the termination of the Expense Support Agreement.
Previous wording
On May 1, 2024, our Board declared a second quarter regular dividend of $0.45 per share payable on or around July 29, 2024 to shareholders of record as of June 28, 2024.
Current wording
On July 31, 2024, the Board declared a third quarter regular dividend of $0.45 per share payable on or around October 28, 2024 to shareholders of record as of September 30, 2024.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Securitization (each as defined below) on December 7, 2023 and March 14, 2024, respectively. The average daily borrowings for the three months ended March 31, 2024 was $819.9 million compared to $738.1 million for the three months ended March 31, 2023. The average interest rate for the three months ended March 31, 2024 was 7.65% compared to 6.76% for the three months ended March 31, 2023.
Previous report — wording carried elsewhere
The cumulative amount of expense payments by the Adviser under the Expense Support Agreement was $2,979, of which $1,101 was reimbursed by the Company prior to the termination of the Expense Support Agreement. For the three months ended March 31, 2024, we reimbursed the Adviser for the remaining balance of $632 under the Expense Support Agreement, for previously supported expenses. As of March 31, 2024, there was no unreimbursed expense payments under the Expense Support Agreement.