Group 1 - The article provides a market analysis focusing on Investcorp Credit Management BDC Inc and Cion Investment Corp, highlighting their investment strategies and market positioning [1] Group 2 - The analysis includes insights into the performance metrics of both companies, discussing their financial health and growth potential in the current market environment [1]

Financial Performance - Total assets as of September 30, 2025, were $210.6 million, with net assets decreasing by $3.3 million, or 4.32%, compared to the previous quarter[3][5] - Net investment income before taxes was $0.6 million, or $0.04 per share, while the net decrease in net assets from operations was $1.3 million, or $0.09 per share[3][11] - Total investment income for Q3 2025 was $4,356,484, a decrease of 36.3% from $6,846,775 in Q3 2024[19] - Net investment income after taxes for Q3 2025 was $508,465, down 78.1% from $2,325,943 in Q3 2024[19] - The company reported a net decrease in net assets resulting from operations of $(1,260,530) for Q3 2025, compared to an increase of $6,606,629 in Q3 2024[19] - Earnings per share for Q3 2025 were $(0.09), compared to $0.46 in Q3 2024[19] Investment Portfolio - The investment portfolio consisted of 41 portfolio companies, with 78.32% being first lien investments and 98.49% of the debt portfolio being floating rate investments[12] - The company made an investment of $0.02 million in one existing portfolio company during the quarter[5][10] - The internal rate of return on fully realized investments in two portfolio companies was 12.67%[5] Income and Expenses - Total expenses for Q3 2025 were $3,890,011, a decrease of 10.9% compared to $4,368,755 in Q3 2024[19] - Interest income from non-controlled, non-affiliated investments decreased to $3,888,504 in Q3 2025 from $4,674,329 in Q3 2024, a decline of 16.8%[19] - The company experienced a net realized loss from investments of $(1,768,995) in Q3 2025, compared to a gain of $4,280,686 in Q3 2024[19] Distributions - The company declared a distribution of $0.12 per share for the quarter ending December 31, 2025, representing a 20.14% yield based on a share price of $2.78 as of September 30, 2025[5][9] - The company declared distributions of $0.14 per common share for Q3 2025, an increase from $0.12 in Q3 2024[19] Cash and Commitments - As of September 30, 2025, the company had $11.6 million in cash, including $7.8 million in restricted cash[13] - The company entered into a commitment with Investcorp Capital plc to provide capital support for its 4.875% notes due April 1, 2026[7][16] Market Focus - The company targets investment opportunities in middle-market companies with annual revenues of at least $50 million and EBITDA of at least $15 million[20] Debt Investments - The weighted average yield on debt investments increased to 10.87% from 10.57% in the prior quarter[5] - The weighted average shares of common stock outstanding increased slightly to 14,431,202 in Q3 2025 from 14,403,752 in Q3 2024[19] - The company received $7.5 million in proceeds from repayments, sales, and amortization during the quarter[10]

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Financial Data and Key Metrics Changes - For the quarter ended September 30, 2025, the net investment income (NII) before taxes was $0.6 million, or 4 cents per share, a decrease of 2 cents per share from the previous quarter [4] - Net assets declined by approximately 4%, with net asset value per share decreasing to $5.04 from $5.27 last quarter [5] - The fair value of the portfolio was $196.1 million compared to $204.1 million on March 31 [9] - The weighted average yield of the portfolio from debt increased to 10.9% from 10.6% in the previous quarter [9] Business Line Data and Key Metrics Changes - Approximately 82% of assets at fair value are rated in the top two risk-rated categories, with a weighted average interest coverage ratio improving to 2.3 times compared to 2 times a year ago [6] - The portfolio consisted of investments in 41 companies, with 78% in first lien debt and 22% in equity warrants and other securities [9] - Non-accruals accounted for 4.4% of the portfolio at fair value, up from 1.6% last quarter [5] Market Data and Key Metrics Changes - Deal flow and sponsor-led M&A activity remain slow, with many transactions still in process rather than closing [6] - Approximately 57% of sponsor-backed private credit deals were priced with spreads below 500 basis points in the current quarter [7] Company Strategy and Development Direction - The company remains focused on executing its strategy and positioning the portfolio for long-term value creation, prioritizing credit quality and income stability over yield [13] - The refinancing commitment from Investcorp Capital enhances financial flexibility and strengthens the balance sheet [13][14] Management's Comments on Operating Environment and Future Outlook - The management noted solid underlying portfolio performance with strong coverage metrics and healthy diversification across sectors, despite a subdued market activity [15] - The company expects NII to benefit from new fundings and remains committed to disciplined portfolio management [7] Other Important Information - The board declared a distribution of $0.12 per share and a supplemental distribution of $0.02 per share payable in cash on December 12, 2025 [11] - As of September 30, the company had approximately $11.6 million of cash, with $36.5 million of capacity under its revolving credit facility [11] Q&A Session Summary Question: Clarification on the backstop for refinancing - The backstop is to refinance the notes in the event that they have not been refinanced prior to the April 1, 2026 maturity date [17] Question: Parameters regarding the coupons - The new coupon agreed upon is SOFR plus 550 on a floating-rate basis [18] Question: Spillover income for the quarter - The company does not provide specific spillover income but indicates that the dividend has been above NII, reflecting the spillback amount required [19] Question: Reason for keeping non-accrual investments on the portfolio - The company is required to keep all investments that have any chance of being paid on the portfolio, even if marked at zero [20][22]

Core Insights - Investcorp Credit Management BDC, Inc. reported its financial results for the quarter ended September 30, 2025, highlighting a net decrease in net assets from operations and a focus on disciplined underwriting amidst compressed spreads [1][3][4]. Financial Performance - Total assets amounted to $210.6 million, with an investment portfolio valued at $196.1 million and net assets of $72.7 million [3]. - The weighted average yield on debt investments was 10.87%, an increase from 10.57% in the previous quarter [5]. - Net investment income before taxes was $0.6 million, translating to $0.04 per share, while the net decrease in net assets from operations was $1.3 million, or $0.09 per share [3][5]. Portfolio Activity - The company had no new investments in portfolio companies during the quarter, maintaining investments in 41 companies [3][10]. - Total capital invested in existing portfolio companies was $1.1 million, with total proceeds from repayments, sales, and amortization amounting to $7.5 million [3][8]. - The internal rate of return on realized investments during the quarter was 12.67% [5]. Distributions - A distribution of $0.12 per share was declared for the quarter ending December 31, 2025, along with a supplemental distribution of $0.02 per share, both payable on December 12, 2025 [5][6]. - The declared distribution represents a yield of 20.14% based on the company's share price of $2.78 as of September 30, 2025 [7]. Capital Resources - As of September 30, 2025, the company had $11.6 million in cash, with $7.8 million being restricted cash, and $36.5 million of unused capacity under its revolving credit facility [11]. - The company entered into a commitment with Investcorp Capital plc to provide capital support for refinancing its 4.875% notes due April 1, 2026, enhancing financial flexibility [4][14]. Subsequent Events - From September 30, 2025, to November 12, 2025, the company invested $2.5 million in three existing portfolio companies and received approximately $11.1 million from repayments and sales [12].

Company Overview - Investcorp Credit Management BDC, Inc. has a total assets under management of $21.2 billion as of September 30, 2025[189]. - The company primarily invests in middle-market companies through standalone first and second lien loans, unitranche loans, and mezzanine loans[188]. - The company has undergone significant ownership changes, with Investcorp acquiring approximately 76% ownership in the Adviser in 2019 and an additional 7% in 2023[189]. - The company is regulated as a Business Development Company (BDC) under the 1940 Act and intends to qualify as a Regulated Investment Company (RIC) under Subchapter M of the Internal Revenue Code[187]. Financial Management - The Base Management Fee for the Adviser is set at 1.75% of gross assets, payable quarterly[192]. - The Income-Based Fee for the Adviser is equal to 20.0% of pre-incentive fee net investment income, subject to an annualized hurdle rate of 8.0%[192]. - The company has no Taxable Subsidiaries as of September 30, 2025, and December 31, 2024[194]. - The company is required to comply with regulatory requirements, ensuring at least 70% of total assets are qualifying assets[217]. Portfolio and Investments - As of September 30, 2025, the investment portfolio was valued at $196.1 million, representing 93.1% of total assets, up from 92.6% as of December 31, 2024[206]. - The investment portfolio consisted of 41 portfolio companies, with 78.32% in first lien investments and 21.68% in equities, warrants, and other positions[222]. - The average investment per portfolio company was $4.8 million, while the largest investment was $13.4 million[222]. - During the nine months ended September 30, 2025, investments in new and existing portfolio companies totaled approximately $24.1 million, with 97.10% in first lien investments[226]. - The investment rating system indicated that 77.1% of the portfolio was rated 2 (performing within expectations) as of September 30, 2025, compared to 74.6% as of December 31, 2024[231]. Borrowings and Financing - As of September 30, 2025, outstanding borrowings under the Capital One Revolving Financing were $63.5 million, compared to $58.5 million as of December 31, 2024[210]. - The company closed a public offering of $65.0 million in aggregate principal amount of 4.875% notes due 2026, with net proceeds of approximately $63.1 million after expenses[211]. - The 2026 Notes will mature on April 1, 2026, and bear interest at a rate of 4.875%[212]. - The Capital One Revolving Financing was amended to decrease the applicable interest spread from SOFR plus 3.10% to SOFR plus 2.50% as of November 19, 2024[210]. Revenue and Expenses - Revenue generation primarily comes from interest on debt, royalty income, dividends, and capital gains from investments[219]. - The company’s primary operating expenses include management fees and reimbursable expenses related to investment activities[220]. - As of September 30, 2025, the average total yield of debt and income-producing securities was 9.97%, down from 10.60% as of December 31, 2024[225]. - Total expenses for the nine months ended September 30, 2025, decreased to $11.2 million from $12.6 million for the same period in 2024[239]. Investment Performance - Net investment income before taxes decreased to $0.6 million for the three months ended September 30, 2025, down from $2.5 million for the same period in 2024[234]. - There was a net realized gain on investments of $0.6 million for the nine months ended September 30, 2025, compared to a net realized loss of $12.2 million for the same period in 2024[241][242]. - A net change in unrealized depreciation of $1.8 million was recorded for the three months ended September 30, 2025, compared to a net change in unrealized appreciation of $8.3 million for the same period in 2024[236][237]. - For the nine months ended September 30, 2025, the company recorded a net change in unrealized depreciation of $1.8 million, primarily due to various investment adjustments and realizations[243]. Cash and Commitments - The cash balance decreased by $0.5 million for the nine months ended September 30, 2025, with $0.4 million used in operating activities and $0.1 million used in financing activities[247]. - As of September 30, 2025, the company had $3.9 million in cash, $7.8 million in restricted cash, and $36.5 million of capacity under the Capital One Revolving Financing[248]. - The company had ten investments with aggregate unfunded commitments of $5.6 million as of September 30, 2025, up from eight investments with $4.6 million as of December 31, 2024[229]. - The company has $5.6 million in unfunded commitments to six portfolio companies as of September 30, 2025, compared to $4.6 million as of December 31, 2024[258]. Interest Rate Sensitivity - As of September 30, 2025, 98.5% of the company's debt investments bore interest based on floating rates, exposing net interest income to interest rate fluctuations[264]. - A 1.00% increase in interest rates would increase net interest income by approximately 10.64%, while a 2.00% increase would increase it by approximately 21.27%[266]. Distributions - The company intends to distribute between 90% and 100% of its annual taxable income to stockholders, but may face limitations due to covenants in financing arrangements[254]. - On November 10, 2025, the company declared a distribution of $0.12 per share for the quarter ending December 31, 2025, along with a supplemental distribution of $0.02 per share[261].

Core Viewpoint - Investcorp Credit Management BDC, Inc. is scheduled to release its financial results for the third quarter ended September 30, 2025, on November 12, 2025, after market close [1] Financial Results Announcement - The earnings conference call will take place on November 13, 2025, at 11:00 am Eastern Time, allowing participants to review financial results and engage in a Q&A session [2] - Interested parties can join the call by dialing the provided numbers and using the specified passcode [2] Company Overview - Investcorp Credit Management BDC, Inc. is an externally-managed, closed-end, non-diversified management investment company regulated as a business development company under the Investment Company Act of 1940 [3] - The company's primary investment objective is to maximize total return for stockholders through current income and capital appreciation by investing in debt and equity of privately held middle-market companies [3] - The company targets middle-market companies with annual revenues of at least $50 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) of at least $15 million [3]

[Highlights](index=1&type=section&id=Highlights) ICMB reported a NAV of $5.27 per share, $0.08 million net investment income, and declared a $0.14 per share total distribution Key Financial Metrics | Metric | Value (in millions) | | :--- | :--- | | Total assets | $224.1 million | | Investment portfolio, at fair value | $204.1 million | | Net assets | $76.0 million | | Net asset value per share | $5.27 | | Weighted average yield on debt investments | 10.57% | | Net investment income before taxes (NII) | $0.8 million | | NII per share | $0.06 | | Net decrease in net assets from operations | (\$0.4) million | | Net decrease in net assets from operations per share | (\$0.03) | | Distributions paid per common share | $0.12 | - The Board of Directors declared a regular quarterly distribution of **$0.12** per share and a supplemental distribution of **$0.02** per share for the quarter ending September 30, 2025[4](index=4&type=chunk) - Net asset value (NAV) per share decreased by **$0.15** to **$5.27** as of June 30, 2025, compared to **$5.42** as of March 31, 2025[4](index=4&type=chunk) - During the quarter, ICMB invested **$19.0 million** and fully realized investments in three portfolio companies, generating an internal rate of return (IRR) of **32.82%** on these exits[4](index=4&type=chunk) - The weighted average yield on debt investments decreased slightly to **10.57%** from **10.95%** in the previous quarter[4](index=4&type=chunk) [Financial and Operational Performance](index=2&type=section&id=Financial%20and%20Operational%20Performance) The company declared a $0.14 per share distribution, invested $19.0 million, and maintained a portfolio primarily in first lien and floating rate debt [Distributions](index=2&type=section&id=Distributions) - The Board declared a distribution of **$0.12** per share for the quarter ending September 30, 2025, plus a supplemental distribution of **$0.02** per share, both payable on October 9, 2025[7](index=7&type=chunk) - This total distribution represents a **20.07%** yield on the company's share price as of June 30, 2025 The company does not expect the distribution to be comprised of a return of capital[8](index=8&type=chunk) [Portfolio and Investment Activities](index=2&type=section&id=Portfolio%20and%20Investment%20Activities) - Invested a total of **$19.0 million** in one new and four existing portfolio companies during the quarter, with new debt investments made at a weighted average yield of **9.03%**[9](index=9&type=chunk) - Received **$10.0 million** in proceeds from repayments, sales, and amortization, primarily from the realization of three investments[10](index=10&type=chunk) - Net realized and unrealized losses resulted in a decrease in net investments of approximately **$1.0 million**, or **$0.07** per share[11](index=11&type=chunk) - As of June 30, 2025, the portfolio consisted of investments in **43** companies, with **79.23%** in first lien investments and **98.50%** of the debt portfolio in floating rate investments[12](index=12&type=chunk) [Capital Resources](index=2&type=section&id=Capital%20Resources) - As of June 30, 2025, the Company had **$17.3 million** in cash (**$14.4 million** restricted) and **$29.5 million** of unused capacity under its revolving credit facility[13](index=13&type=chunk) [Subsequent Events and Corporate Actions](index=2&type=section&id=Subsequent%20Events%20and%20Corporate%20Actions) Post-quarter, the company invested an additional $0.2 million, declared a Q3 2025 distribution, and authorized a new $5 million share repurchase program - Between June 30, 2025, and August 13, 2025, the Company invested an additional **$0.2 million** in two existing portfolio companies[14](index=14&type=chunk) - On August 7, 2025, the Board authorized a new share repurchase program of up to **$5 million**, effective for one year until August 7, 2026[16](index=16&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated statements detail total assets of $224.1 million, net assets of $76.0 million, and a net decrease in assets from operations of (\$0.4) million [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Consolidated Assets and Liabilities | (in thousands) | June 30, 2025 (Unaudited) (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total investments, at fair value | $204,131 | $191,617 | | Total Assets | $224,065 | $206,852 | | Debt, net | $134,385 | $122,042 | | Total Liabilities | $148,080 | $129,250 | | Total Net Assets | $75,984 | $77,602 | | Net Asset Value Per Share | $5.27 | $5.39 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Operations Summary | For the three months ended June 30, | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Total investment income | $4,545,199 | $5,119,319 | | Net expenses | $3,711,141 | $3,864,957 | | Net investment income after taxes | $604,148 | $1,309,102 | | Net realized and unrealized gain/(loss) | (\$1,038,446) | (\$3,261,248) | | Net increase (decrease) in net assets from operations | (\$434,298) | (\$1,952,146) | | Earnings per share (Basic and diluted) | (\$0.03) | (\$0.14) | [Company Overview and Disclosures](index=6&type=section&id=Company%20Overview%20and%20Disclosures) The company is an externally managed BDC focused on middle-market investments, with the report including standard forward-looking statement disclaimers - The Company is an externally managed BDC with an investment objective to maximize total return via current income and capital appreciation from debt and equity investments in middle-market companies[19](index=19&type=chunk) - The report contains forward-looking statements that are based on current expectations and are subject to substantial risks and uncertainties, and actual results may differ materially[20](index=20&type=chunk)[21](index=21&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net investment income before taxes of $800,000, or 6¢ per share, an increase of 1% from the previous quarter, representing an annualized return on equity of 4.3%, up approximately 80 basis points sequentially [5] - Net assets decreased modestly to $76,000,000, down $2,100,000 from the prior quarter, with net asset value per share decreasing to $5.27 from $5.42 [5][12] - The weighted average yield of the portfolio was 10.6%, a slight decrease from 11% in the previous quarter [13] Business Line Data and Key Metrics Changes - The portfolio consisted of 43 borrowers, with approximately 79% in first lien debt and 21% in equity warrants and other positions [13] - The weighted average net leverage declined to approximately 4.8 times from 4.9 times, while the weighted average loan-to-value (LTV) remained stable at approximately 46% [6] Market Data and Key Metrics Changes - Market spreads remained relatively stable throughout the quarter, with disciplined pricing across the middle market [8] - The company experienced a pickup in origination activity, with $19,000,000 in originations this quarter, up from $5,000,000 in the previous quarter [6] Company Strategy and Development Direction - The company remains focused on maintaining net asset value stability, delivering sustainable net investment income, and selectively deploying capital into high-quality opportunities with attractive risk-adjusted returns [18] - The board authorized a share repurchase program of up to $5,000,000, expected to be in effect until 08/07/2026 [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about renewed momentum in the middle market, with expectations for increased activity in the second half of the year [7][18] - The company is focused on resolving legacy credit issues and repositioning the portfolio to support long-term performance [8] Other Important Information - The company declared a distribution of 12¢ per share and a supplemental distribution of 2¢ per share payable in cash on 10/09/2025 [16] - As of June 30, the company had approximately $17,300,000 in cash, with $14,400,000 being restricted cash [17] Q&A Session Summary Question: What was the spillover income for the quarter? - The CFO indicated that the spillover income was a significant reason for the distribution to shareholders being in excess of the change in assets from operations, with net income before taxes at 6¢ a share [22] Question: What is the strategy to improve returns given high leverage and low profitability? - Management noted that improving profitability involves absorbing expenses across a broader asset base as the private credit business grows, while maintaining a cautious approach to leverage [24][27] Question: Should we expect portfolio contraction in coming quarters to reduce leverage? - Management expects repayments to increase in the second half of the year, which could lead to a deleveraging event if decent assets are not found to replace them [28] Question: Has the company considered wrapping up the BDC and converting to cash to improve returns? - Management emphasized that their primary focus is on improving shareholder value and stabilizing the portfolio before considering such actions [31]

Company Overview - Investcorp Credit Management BDC, Inc (ICMB) has a market capitalization of $403 million [15] - The investment portfolio stands at $2041 million at fair value [15] - The company's gross debt-to-equity ratio is 177x, while the net debt-to-equity ratio is 154x [15] - The annualized distribution yield is 2007%, based on declared distributions after June 30, 2025 [15] Portfolio Composition - Senior Secured First Lien Debt accounts for 7923% of the investment portfolio [21] - Equity/Warrants/Other investments represent 2077% of the portfolio [21] - The portfolio is diversified across various industries, including Professional Services, Insurance, and IT Services [17, 18] - Geographically, the portfolio is distributed across the West (2840%), Northeast (2743%), Southwest (1567%), Southeast (1300%), Midwest (1166%), and Mid-Atlantic (384%) regions [19, 20] Portfolio Activity & Financial Performance - Total capital invested in existing portfolio companies during the quarter was $190 million [23] - Total proceeds from repayments, sales, and amortization amounted to $102 million [23] - The weighted average yield on debt investments, at fair market value, was 1057% for the quarter ended June 30, 2025 [25]