Nuveen Churchill Direct Lending Corp
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
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.
Sep 30, 2024 · Filed Nov 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 2024-06-30; filed 2024-08-07.
0001628280-24-035331
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001628280-24-045921
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 226 previous paragraphs and 228 current paragraphs.
192 unchanged; 31 reworded; 4 added; 3 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 14 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 (4)
Current report
1 Gross commitments at par includes unfunded investment commitments.
Current report
On October 4, 2024, we entered into a second amendment (the “Second Amendment”) to the Revolving Credit Facility, among the Company, as borrower, the lenders and issuing banks from time to time party thereto, SMBC, as administrative agent and sole bookrunner, and SMBC and Wells Fargo as joint lead arrangers. The Second Amendment, among other things, (x) added a term loan tranche, (y) increased the total committed facility amount from $250 million to $325 million and (z) reduced (i) the applicable margin from 2.125% to 2.00% and (ii) the credit spread adjustment from 0.15% to 0.10% for Term SOFR borrowings with a three-month tenor and from 0.25% to 0.10% for Term SOFR borrowings with a six-month tenor.
Current report
On October 29, 2024, the Board, including all of the Independent Directors, approved the renewal of each Advisory Agreement in accordance with, and on the basis of, an evaluation satisfactory to such directors as required by the 1940 Act for an additional one-year term expiring on December 1, 2025.
Current report
On November 5, 2024, the Company terminated in full the SMBC Financing Facility Agreement, dated as of November 24, 2020, and the SMBC Financing Facility thereunder. In connection with the termination of the SMBC Financing Facility, the Company also terminated the security interest over the collateral granted to SMBC and the lenders pursuant to the SMBC Financing Facility Agreement. The SMBC Financing Facility was terminated concurrent with the satisfaction of all obligations and liabilities of the Company to the lenders thereunder, including, without limitation, payments of principal and interest, other fees, breakage costs and other amounts owing to the lenders.
Removed paragraphs (3)
Previous report
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 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.
Previous 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.
Reworded paragraphs (31)
Previous 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):
Current wording
Our portfolio and investment activity for three months ended September 30, 2024 and 2023 is presented below (dollar amounts in thousands):
Previous wording
•Weighted average reported annual EBITDA of $76.5 million.1
Current wording
•Weighted average reported annual EBITDA of $76.8 million.1
Previous wording
•Weighted average of 2.2x interest coverage ratio for our first lien term loans 2
Current wording
•Weighted average of 2.1x interest coverage ratio for our first-lien loans 2
Previous wording
•Weighted average of 4.8x net leverage.3
Current wording
•Weighted average of 4.85x net leverage.3
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 73.71% of our total investments, and 81.35% 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 73.99% of our total investments, and 82.15% of our total first lien loan investments, in each case based upon fair value.
Previous 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.
Current wording
1 As of September 30, 2024, Subordinated Debt is comprised of second lien term loans and/or second lien notes of $67,947, mezzanine debt of $99,925 and $1,583 of structured debt at fair value and second lien term loans and/or second lien notes of $80,348, mezzanine debt of $105,364 and $4,304 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 June 30, 2024 was 11.15%. 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 September 30, 2024 was 10.70%. 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 June 30, 2024 was 11.36%. 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 September 30, 2024 was 10.87%. There were no investments on non-accrual as of December 31, 2023.
Previous 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.
Current wording
As of September 30, 2024, 93.83% and 93.93% 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 11.32% 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.
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 10.86% from December 31, 2023 to September 30, 2024. The decrease in weighted average yields was primarily due to the tightening of spreads in newly originated investments made year to date in 2024. We also saw an increase in repricing transactions for existing portfolio investments in the first three quarters of 2024.
Previous 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.
Current wording
As of September 30, 2024 and December 31, 2023, the weighted average Internal Risk Rating of our investment portfolio. at fair value, was 4.15 and 4.14, respectively. As of September 30, 2024, there were three portfolio companies on non-accrual. As of September 30, 2024, the amortized cost of the portfolio companies on non-accrual status were $29.1 million, which represents approximately 1.40% 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 and six months ended June 30, 2024 and 2023 were as follows (dollars amounts in thousands):
Current wording
Operating results for the three and nine months ended September 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 $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.
Current wording
Investment income, attributable to interest and fees on our debt investments, increased to $60.3 million and $167.0 million for the three and nine months ended September 30, 2024, respectively, from $41.7 million and $112.8 million for the three and nine months ended September 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 market spread tightening and a decline in SOFR. As of September 30, 2024, the size of our portfolio increased to $2.1 billion from $1.5 billion as of September 30, 2023, at cost. As of September 30, 2024, the weighted average yield of our debt and income producing investments decreased to 10.86% from 11.60% as of September 30, 2023 on cost, primarily due to overall tightening of spreads in newly originated investments, the refinancing and repricing of existing portfolio companies, and the decline in base interest rates. Shifting 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 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.
Current wording
Total expenses before expense support and waived incentive fees increased to $34.3 million and $87.8 million for the three and nine months ended September 30, 2024, respectively, from $20.1 million and $54.8 million for the three and nine months ended September 30, 2023, respectively.
Previous 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.
Current wording
Interest and debt financing expenses increased for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 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 nine months ended September 30, 2024 were $1,156.7 million and $974.7 million, respectively, compared to $819.0 million and $777.5 million for the three and nine months ended September 30, 2023, respectively. The average annual interest rate for the three and nine months ended September 30, 2024 was 7.74% and 7.70%, respectively, compared to 7.51% and 7.17%, respectively, for the three and nine months ended September 30, 2023.
Previous 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.
Current wording
The increases in management fees increased for the three and nine months ended September 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 nine months ended September 30, 2024 of $5.5 million and $13.0 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 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.
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 nine months ended September 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 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.
Current wording
For the three months ended September 30, 2024, we had a net realized gain on investments of $1.1 million compared to a net realized loss of $(13.1) million for the three months ended September 30, 2023. The net realized gain for the three months ended September 30, 2024 was driven by full or partial repayments and sales of certain of our investments. For the nine months ended September 30, 2024, we had a net realized loss on investments of $(1.5) million, compared to a net realized loss of $(6.4) million for the nine months ended September 30, 2023. The net realized loss the nine months ended September 30, 2024 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 and third quarters of 2024.
Previous 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.
Current wording
For the three months ended September 30, 2024, we recorded a net change in unrealized gain of $4.1 million, which resulted from an increase in fair value primarily attributable to market spread tightening and net positive credit performance of our portfolio companies in the third quarter of 2024. We recorded a net change in unrealized loss of $(4.0) million for the nine months ended September 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 driven primarily from a reversal of unrealized losses on certain of our underperforming debt positions that were ultimately realized in the first quarter of 2024 and the overall tightening in market spreads.
Previous wording
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 wording
For the three months ended September 30, 2023, we recorded a net unrealized gain of $11.6 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 $(3.8) million for the nine months ended September 30, 2023, primarily due to modest softening of certain of our portfolio companies' credit metrics.
Previous wording
Liquidity and Capital Resources
Current wording
Financial Condition, Liquidity and Capital Resources
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 June 30, 2024 and December 31, 2023, our asset coverage ratio was 195.88% 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 September 30, 2024 and December 31, 2023, our asset coverage ratio was 189.89% and 178.57%, respectively.
Previous 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.
Current wording
Cash and cash equivalents as of September 30, 2024, taken together with the availability under our credit facilities, are expected to be sufficient for our investing activities and to conduct our operations in the near term. As of September 30, 2024, we had $130.0 million available under our Wells Fargo Financing Facility (as defined below), $24.2 million available under our SMBC Financing Facility (as defined below), and $137.3 million available under our SMBC Corporate Revolver (as defined below), subject to asset coverage limitations.
Previous 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.
Current wording
For the nine months ended September 30, 2024, our cash and cash equivalents balance increased by $1.9 million. During that period, $309.2 million was used in operating activities, primarily relating to investment purchases of $712.5 million, offset by $310.5 million in repayments and sales of investments in portfolio companies. During the same period, $311.1 million was provided by financing activities, consisting primarily of proceeds from issuance of common shares and secured borrowings of $241.7 million and $717.8 million, respectively, net of shareholder distributions and repayments of secured borrowings of $67.4 million and $567.7 million, respectively.
Previous 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.
Current wording
As of October 31, 2024, BofA Securities, Inc., as agent, repurchased an additional 155,618 shares of the Company’s common stock pursuant to the Company 10b5-1 Plan for approximately $2.69 million.
Previous wording
This means that, as a result of these transfer restrictions, without the consent of the Board, a shareholder (other than certain individuals and entities affiliated with the Advisers, who are subject to the 365-day restriction above) who owned 100 shares of common stock on January 24, 2024 could not sell any of such shares for 90 days following January 24, 2024; 91 days following January 24, 2024, such shareholder could only sell up to 15 of such shares; 181 days following January 24, 2024, such shareholder could only sell up to 50 of such shares; 271 days following January 24, 2024, such shareholder could sell all of such shares.
Current wording
This means that, as a result of these transfer restrictions, without the consent of the Board, a shareholder (other than certain individuals and entities affiliated with the Advisers, who are subject to the 365-day restriction above) who owned 100 shares of common stock on January 24, 2024 could not sell any of such shares for 90 days following January 24, 2024; 91 days following
Previous wording
On December 31, 2019, a wholly owned subsidiary of the Company entered into a credit agreement ("the “Wells Fargo Financing Facility” and the agreement relating thereto, as amended from time to time, the “Wells Fargo Financing Facility Agreement”), with Wells Fargo Bank, N.A. as lender (“Wells Fargo”) and administrative agent. The Wells Fargo Financing Facility Agreement was amended on October 28, 2020, March 31, 2022 and March 14, 2024. The most recent amendment on March 14, 2024, among other things: (i) added SPV V as a party to the facility and (ii) decreased the maximum facility amount available from $275 million to $150 million, which facility amount may be increased, with the consent of the administrative agent and each applicable lender, to up to $250 m during the reinvestment period.
Current wording
On December 31, 2019, a wholly owned subsidiary of the Company entered into a credit agreement ("the “Wells Fargo Financing Facility” and the agreement relating thereto, as amended from time to time, the “Wells Fargo Financing Facility Agreement”), with Wells Fargo Bank, N.A. as lender (“Wells Fargo”) and administrative agent. The Wells Fargo Financing Facility Agreement was amended on October 28, 2020, March 31, 2022, March 14, 2024 and August 27, 2024. The most recent amendment on August 27, 2024, among other things, increased the maximum facility amount available from $150 million to $225 million.
Previous wording
The Wells Fargo Financing Facility reinvestment period expires on March 31, 2025 and has a maturity date of March 31, 2027. The Wells Fargo Financing Facility Agreement also requires the Company to maintain an asset coverage ratio equal to at least 1.50:1.00. The amount of the borrowings under the Wells Fargo Financing Facility equals the amount of the outstanding advances. Advances under the Wells Fargo Financing Facility may be prepaid and reborrowed at any time during the reinvestment period, but any termination or reduction of the facility amount prior to the first anniversary of the date of the amendment (subject to certain exceptions) is subject to a commitment reduction fee of 1%. Under the Wells Fargo Financing Facility Agreement, we pay a fee on daily undrawn amounts under the Wells Fargo Financing Facility of 0.25% per annum during the period ending June 14, 2024, 0.50% per annum for the next six months and thereafter, 0.50% per annum on undrawn amounts of up to 40% of the maximum facility amount and 1.50% per annum on undrawn amounts in excess of 40% of the maximum facility amount.
Current wording
The Wells Fargo Financing Facility reinvestment period expires on March 31, 2025 and has a maturity date of March 31, 2027. The Wells Fargo Financing Facility Agreement also requires the Company to maintain an asset coverage ratio equal to at least 1.50:1.00. The amount of the borrowings under the Wells Fargo Financing Facility equals the amount of the outstanding advances. Advances under the Wells Fargo Financing Facility may be prepaid and reborrowed at any time during the reinvestment period, but any termination or reduction of the facility amount prior to the first anniversary of the date of the amendment (subject to certain exceptions) is subject to a commitment reduction fee of 1%. Under the Wells Fargo Financing Facility Agreement, we paid a fee on daily undrawn amounts under the Wells Fargo Financing Facility of 0.25% per annum during the period ended June 14, 2024. For the six months following June 14, 2024, the Company pays a fee on daily undrawn amounts under the Wells Fargo Facility of 0.50% per annum. and, thereafter, will pay 0.50% per annum on undrawn amounts of up to 40% of the maximum facility amount and 1.50% per annum on undrawn amounts in excess of 40% of the maximum facility amount.
Previous wording
SPV V, beginning March 14, 2024, has pledged all of its assets to the collateral agent to secure their obligations under the Wells Fargo Financing Facility. The Company, and SPV V have made customary representations and warranties and are required to comply with various financial covenants related to liquidity and other maintenance covenants, reporting requirements and other customary requirements for similar facilities.
Current wording
On March 14, 2024, SPV V entered into the borrower joinder agreement to become party to the Wells Fargo Financing Facility Agreement and pledged all of its assets to the collateral agent to secure their obligations under the Wells Fargo Financing Facility. The Company, and SPV V have made customary representations and warranties and are required to comply with various financial covenants related to liquidity and other maintenance covenants, reporting requirements and other customary requirements for similar facilities.
Previous wording
In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of June 30, 2024 and December 31, 2023. We have in the past and may in the future become obligated to fund commitments such as delayed draw commitments.
Current wording
In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of September 30, 2024 and December 31, 2023. We have in the past and may in the future become obligated to fund commitments such as delayed draw commitments, revolvers, and equity investment commitments.
Previous 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.
Current wording
On November 4, 2024, the Board declared a fourth quarter regular dividend of $0.45 per share payable on or around January 28, 2025 to shareholders of record as of December 31, 2024.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
January 24, 2024, such shareholder could only sell up to 15 of such shares; 181 days following January 24, 2024, such shareholder could only sell up to 50 of such shares; 271 days following January 24, 2024, such shareholder could sell all of such shares.