分组1 - Nuveen Churchill Direct Lending Corp. reported quarterly earnings of $0.56 per share, missing the Zacks Consensus Estimate of $0.58 per share, and down from $0.66 per share a year ago, representing an earnings surprise of -3.45% [1] - The company posted revenues of $57.08 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 7.64%, compared to year-ago revenues of $48.95 million [2] - The stock has gained approximately 5.8% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.59 on revenues of $63.2 million, and for the current fiscal year, it is $2.04 on revenues of $258.5 million [7] - The Zacks Industry Rank for Financial - SBIC & Commercial Industry is currently in the top 22% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[Full Year and Fourth Quarter 2024 Results Announcement](index=1&type=section&id=Nuveen%20Churchill%20Direct%20Lending%20Corp.%20Announces%20Full%20Year%20and%20Fourth%20Quarter%202024%20Results) NCDL reported strong Q4 2024 results with increased NAV and net investment income, alongside record originations and a strategic capital structure optimization for 2025 [Q4 2024 Financial Highlights and Management Commentary](index=1&type=section&id=Financial%20Highlights%20for%20the%20Quarter%20Ended%20December%2031%2C%202024) Nuveen Churchill Direct Lending Corp. (NCDL) reported strong Q4 2024 results, with net investment income of $0.56 per share and a net asset value (NAV) increase to $18.18 per share Financial Highlights for Q4 2024 | Metric | Value | | :--- | :--- | | Net Investment Income per Share | $0.56 | | Net Realized & Unrealized Loss per Share | ($0.02) | | Net Increase in Net Assets per Share | $0.54 | | Net Asset Value (NAV) per Share | $18.18 | - Management noted 2024 was an active year for originations, with over **$950 million** in new investments, a YoY increase of over **40%**[3](index=3&type=chunk) - For the full year 2024, the company delivered a return on equity exceeding **12%**, with distributions fully covered by net investment income[3](index=3&type=chunk) - The company strengthened its balance sheet by issuing **$300 million** of unsecured notes in January 2025, ensuring ample liquidity and no near-term debt maturities[3](index=3&type=chunk) [Distribution Declaration](index=1&type=section&id=Distribution%20Declaration) The Board of Directors has declared a regular quarterly distribution of $0.45 per share for the first quarter of 2025, in addition to a final special distribution of $0.10 per share - A first quarter 2025 regular distribution of **$0.45 per share** was declared, payable on April 28, 2025, to shareholders of record as of March 31, 2025[4](index=4&type=chunk) - The final of four special distributions of **$0.10 per share** will be paid on April 28, 2025[4](index=4&type=chunk) [Portfolio Analysis](index=1&type=section&id=PORTFOLIO%20ANALYSIS) The investment portfolio expanded to $2.08 billion, maintaining a defensive first-lien debt focus, while significantly improving asset quality with reduced non-accrual investments [Portfolio Composition and Quality](index=1&type=section&id=PORTFOLIO%20COMPOSITION) As of December 31, 2024, the investment portfolio's fair value grew to $2.08 billion across 210 companies, maintaining a defensive position with 90.6% in first-lien debt Portfolio Metrics | Metric | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | | Portfolio Fair Value | $2.08 billion | $2.05 billion | | Portfolio Companies | 210 | 202 | | Industries | 27 | 26 | Investment Type Composition | Investment Type | % of Portfolio (Fair Value) - Dec 31, 2024 | % of Portfolio (Fair Value) - Sep 30, 2024 | | :--- | :--- | :--- | | First-Lien Debt | 90.6% | 90.1% | | Subordinated Debt | 7.7% | 8.3% | | Equity Investments | 1.8% | 1.7% | - Portfolio quality improved, with non-accrual investments decreasing from three companies (**1.4% at cost**) in Q3 to one company (**0.4% at cost**) in Q4 2024. No new portfolio companies were placed on non-accrual status during the quarter[8](index=8&type=chunk) [Portfolio and Investment Activity](index=2&type=section&id=PORTFOLIO%20AND%20INVESTMENT%20ACTIVITY) For the full year 2024, NCDL significantly increased its investment pace, funding $863.6 million, a substantial rise from $589.0 million in 2023 Full Year Investment Activity | Full Year Activity | 2024 | 2023 | | :--- | :--- | :--- | | Funded Investments | $863.6 million | $589.0 million | | Proceeds from Repayments/Sales | $430.0 million | $146.4 million | Quarterly Investment Activity | Quarterly Activity | Q4 2024 | Q3 2024 | | :--- | :--- | :--- | | Funded Investments | $151.1 million | $203.2 million | | Proceeds from Repayments/Sales | $119.5 million | $155.6 million | [Results of Operations](index=2&type=section&id=RESULTS%20OF%20OPERATIONS%20FOR%20THE%20FULL%20YEAR%20AND%20QUARTER%20ENDED%20DECEMBER%2031%2C%202024) Investment income increased due to portfolio growth, while expenses rose from higher interest and management fees, partially offset by net unrealized gains [Investment Income](index=2&type=section&id=Investment%20Income) Full-year 2024 investment income grew to $224.0 million from $161.8 million in 2023, driven by a larger investment portfolio, despite a decrease in weighted average yield - Full-year 2024 investment income increased to **$224.0 million** from **$161.8 million** in 2023, primarily due to increased deployed capital[11](index=11&type=chunk) - The weighted average yield of debt investments decreased to **10.33%** as of Dec 31, 2024, from **11.72%** a year prior, due to spread tightening and a decline in SOFR[11](index=11&type=chunk) - Q4 2024 investment income was **$57.1 million**, up from **$48.9 million** in Q4 2023[12](index=12&type=chunk) [Net Expenses](index=2&type=section&id=Net%20Expenses) Net expenses for 2024 rose to $101.1 million from $77.9 million in 2023, mainly due to higher interest expenses and management fees, with incentive fees waived through Q1 2025 - Full-year 2024 net expenses increased to **$101.1 million** from **$77.9 million** in 2023, driven by higher interest, debt financing expenses, and management fees[13](index=13&type=chunk) - The Adviser is waiving incentive fees on income and capital gains for the five quarters from March 31, 2024, through March 31, 2025[13](index=13&type=chunk) [Net Realized and Unrealized Gains/Losses](index=3&type=section&id=Net%20Realized%20Gain%20%28Loss%29%20and%20Net%20Change%20in%20Unrealized%20Gain%20%28Loss%29%20on%20Investments) For the full year 2024, the company experienced a net realized loss of $(13.2) million, largely offset by a net unrealized gain of $7.3 million from market spread tightening Full Year Performance | Full Year Performance | 2024 | 2023 | | :--- | :--- | :--- | | Net Realized Loss | $(13.2) million | $(8.0) million | | Net Change in Unrealized Gain | $7.3 million | $0.7 million | Fourth Quarter Performance | Fourth Quarter Performance | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | Net Realized Loss | $(11.7) million | $(1.5) million | | Net Change in Unrealized Gain | $11.3 million | $4.5 million | [Financial Condition and Liquidity](index=3&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) NCDL maintains robust liquidity with $43.3 million cash and $206.3 million available credit, supporting a debt-to-equity ratio of 1.15x [Liquidity and Capital Resources](index=3&type=section&id=Liquidity%20and%20Capital) As of December 31, 2024, NCDL maintained a solid liquidity position with $43.3 million in cash and approximately $206.3 million available for borrowing under its credit facilities Liquidity Metrics (as of Dec 31, 2024) | Liquidity Metric (as of Dec 31, 2024) | Value | | :--- | :--- | | Cash and Cash Equivalents | $43.3 million | | Total Debt Outstanding | $1.1 billion | | Available Borrowing Capacity | $206.3 million | | Debt to Equity Ratio | 1.15x | - The debt-to-equity ratio increased to **1.15x** at year-end, compared to **1.11x** at the end of Q3 2024[17](index=17&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=CONSOLIDATED%20FINANCIAL%20STATEMENTS) Total assets and net assets grew significantly, reflecting increased investment income and a substantial rise in new gross commitments for the year [Consolidated Statements of Assets and Liabilities](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20ASSETS%20AND%20LIABILITIES) As of December 31, 2024, total assets increased to $2.14 billion from $1.73 billion a year prior, driven by growth in the investment portfolio, resulting in a NAV per share of $18.18 Balance Sheet (in thousands) | Balance Sheet (in thousands) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Investments, at fair value | $2,081,379 | $1,641,686 | | Total Assets | $2,143,725 | $1,730,864 | | Total Liabilities | $1,173,405 | $982,979 | | Total Net Assets | $970,320 | $747,885 | | Net Asset Value per Share | $18.18 | $18.13 | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the year ended December 31, 2024, NCDL reported total investment income of $224.0 million and net investment income of $122.4 million, resulting in a net increase in net assets from operations of $116.3 million Income Statement (Year Ended Dec 31, in thousands) | Income Statement (Year Ended Dec 31, in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Total Investment Income | $224,040 | $161,756 | | Net Expenses | $101,101 | $77,744 | | Net Investment Income | $122,388 | $84,006 | | Total Net Realized & Unrealized Loss | $(6,065) | $(8,068) | | Net Increase in Net Assets from Operations | $116,323 | $75,938 | | Net Investment Income per Share | $2.26 | $2.52 | | Net Increase in Net Assets per Share | $2.15 | $2.27 | [Detailed Portfolio and Investment Activity](index=9&type=section&id=DETAILED%20PORTFOLIO%20AND%20INVESTMENT%20ACTIVITY) In 2024, NCDL's new gross commitments surged to $955.3 million, with first-lien debt comprising the vast majority, and the number of portfolio companies growing to 210 Full Year Investment Activity | Full Year Investment Activity | 2024 | 2023 | | :--- | :--- | :--- | | New Gross Commitments at Par | $955.3 million | $670.6 million | | Net Funded Investment Activity | $433.6 million | $442.6 million | | Number of New Portfolio Companies | 68 | 45 | | Portfolio Companies, End of Period | 210 | 179 | | W.A. Interest Rate on New Debt | 10.11% | 11.50% | Quarterly Investment Activity | Quarterly Investment Activity | Q4 2024 | Q3 2024 | | :--- | :--- | :--- | | New Gross Commitments at Par | $162.7 million | $225.6 million | | Net Funded Investment Activity | $31.6 million | $47.5 million | | Number of New Portfolio Companies | 16 | 18 | | W.A. Interest Rate on New Debt | 8.96% | 9.63% |

Financing and Capital Structure - The company has raised approximately $906.4 million from private offerings of its common stock since March 2020[85]. - The company currently has two special purpose vehicle asset credit facilities and a revolving credit facility, with plans to potentially enter additional credit facilities in the future[77]. - The company expects interest expense to increase as leverage is increased over time, subject to regulatory limits[76]. - The company may not issue common stock below NAV per share without shareholder approval, which was granted until December 15, 2024[88]. - The company must maintain at least 70% of its total assets in qualifying assets as defined by the 1940 Act[91]. - The company must maintain an asset coverage ratio of at least 150% for issuing senior securities, which includes total assets less total liabilities divided by total indebtedness represented by senior securities plus preferred stock[96]. - The company is permitted to co-invest with affiliates under certain conditions, which enhances investment opportunities and diversification[99]. - The SEC granted the company a permanent amendment to allow follow-on investments in existing portfolio companies with certain private fund affiliates[100]. Regulatory Compliance - The company is regulated as a Business Development Company (BDC) under the 1940 Act, which imposes certain restrictions on transactions and requires a majority of independent directors[86]. - The company is subject to restrictions on the issuance of warrants, options, or rights under the 1940 Act, with a limit that the amount of voting securities resulting from such exercises cannot exceed 25% of the total outstanding shares[95]. - The company has adopted a code of ethics that restricts personal securities transactions by its officers and employees, ensuring compliance with federal securities laws[97]. - The company is required to provide annual reports containing audited financial statements and comply with periodic reporting under the Exchange Act[115]. - To qualify as a Regulated Investment Company (RIC), the company must distribute at least 90% of its investment company taxable income to shareholders[118]. - The company will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless it meets specific distribution requirements[120]. - The company must derive at least 90% of gross income from specific sources to maintain RIC status[126]. - The company must diversify its holdings to meet regulatory requirements, limiting investments in any single issuer to no more than 25% of total assets[126]. Investment Strategy and Risk Management - The company assesses material environmental, social, and governance (ESG) factors as part of its investment process to create and protect value[79]. - The company utilizes a proprietary ESG ratings template to evaluate potential investments and monitor portfolio companies post-investment[81]. - The company operates in a competitive market for credit investments, facing competition from larger firms with greater resources[83]. - The company does not have any employees and relies on the expertise of senior investment professionals from its sub-adviser, Churchill[84]. - The company may need to sell assets or raise additional capital to satisfy the Annual Distribution Requirement, which could be disadvantageous[122]. - The company may experience valuation risk due to investments in illiquid debt and equity securities of private companies[532]. - The company is subject to interest rate risk, with potential adverse effects on net investment income due to fluctuations in interest rates[533]. - The Federal Reserve's recent rate cuts may impact the company's cost of funds and net investment income[534]. - A hypothetical increase of 300 basis points in interest rates could result in a net income increase of $25,474,000[538]. - As of December 31, 2024, approximately 5.32% of the company's debt investments bear interest at a fixed rate, while 94.68% bear interest at a floating rate[535]. - The company has a significant portion of its floating rate debt investments (99.09%) subject to interest rate floors[535]. Taxation and Financial Implications - If the company fails to qualify as a RIC, it would be subject to U.S. federal income tax at corporate rates on all taxable income[128].

Core Insights - The article discusses the Q3 results for Nuveen Churchill Direct Lending Corp (NYSE: NCDL), which recently went public alongside other private BDCs earlier in the year [1]. Group 1: Company Overview - Nuveen Churchill Direct Lending Corp is a Business Development Company (BDC) that focuses on generating income through various security types, including CEFs, ETFs, mutual funds, and individual preferred stocks [1]. Group 2: Analyst Background - ADS Analytics, the team behind the analysis, consists of experienced analysts from leading global investment banks, specializing in research and trading [1].

Financial Data and Key Metrics Changes - The company reported net investment income of $0.58 per share for Q3 2024, fully covering the regular quarterly distribution of $0.45 per share and a special distribution of $0.10 per share [7][32] - Total GAAP net income for the quarter was $0.67 per share, up from $0.37 per share in the previous quarter, positively impacted by net realized and unrealized gains [36] - The net asset value per share increased to $18.15 from $18.03 at the end of Q2 2024 [10][38] Business Line Data and Key Metrics Changes - Investment activity during Q3 was approximately $226 million, primarily focused on senior secured first lien loans [8][17] - The investment portfolio's fair value increased to $2.05 billion from $1.99 billion at the end of Q2 2024 [39] - First lien debt represented approximately 90% of the fair value of the overall portfolio, maintaining a steady percentage [18][46] Market Data and Key Metrics Changes - The company observed an increase in competitive dynamics in the private credit market, leading to additional spread compression, albeit at a slower pace than in the previous quarter [12] - The weighted average yield on debt and income-producing investments at cost declined to 10.9% from 11.3% at the end of Q2 2024 [46] - The watch list increased to 5.6% of the overall portfolio fair value, reflecting proactive portfolio management [49] Company Strategy and Development Direction - The company is focused on rotating out of higher-priced, lower-spread upper middle market positions into traditional middle market opportunities, which offer wider spreads and more attractive terms [9][18] - The strategy emphasizes maintaining a diversified portfolio across various metrics, including sponsor relationships and industry sectors [27] - The company aims to capitalize on increased M&A activity expected as the interest rate reduction cycle begins [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the U.S. economy's resilience and steady revenue growth from portfolio companies, despite elevated interest rates [15] - The company anticipates continued strong performance into 2025, driven by a robust pipeline of investment opportunities [26] - Management highlighted the importance of maintaining strong relationships with private equity sponsors to drive deal flow [62] Other Important Information - The company has a share repurchase program, utilizing approximately $14 million of the $100 million allocated, with plans to continue buying back shares as trading occurs at a discount to NAV [52][85] - The third lockup release occurred on October 21, increasing the number of shares available for trading significantly [53] Q&A Session Summary Question: Is there any white space across the broader Churchill platform to further penetrate the market? - Management noted a 30% increase in firms where new deals are being done and ongoing efforts to expand relationships with new private equity LPs [60][62] Question: What is the current deal flow and tone with sponsors? - Management reported a continued increase in deal activity, with Q3 showing a 60% year-over-year increase in senior lending activity [65] Question: How was amendment activity in the quarter? - There was no significant increase in amendment activity, with stable yields on new floating rate investments [68] Question: What is the size of the upper middle market portfolio being rotated to the core middle market strategy? - The upper middle market portion is approximately $200 million, which is about 10% of the total portfolio [74] Question: Can you describe the increase in the watch list investments this quarter? - The increase in the watch list was due to proactive portfolio management, with no new non-accruals during the quarter [80]

CHURCHII Nuveen Churchill Direct Lending Corp. (NCDL) Third Quarter 2024 Earnings 7 November 2024 Disclosure This presentation is for informational purposes only. It does not convey an offer of any type and is not intended to be, and should not be construed as, an offer to sell, or the solicitation of an offer to buy, any securities of Nuveen Churchill Direct Lending Corp. (the "Company," "NCDL," "we," "us" or "our"). Any such offering can be made only at the time an offeree receives a prospectus relating t ...

Financial Performance - Net investment income for Q3 2024 was $0.58 per share, fully covering regular and special distributions[2] - Investment income increased to $60.3 million in Q3 2024, up from $41.7 million in Q3 2023, driven by increased investment activity[8] - Total investment income for the three months ended September 30, 2024, was $60,280,000, an increase of 44.2% compared to $41,746,000 for the same period in 2023[19] - Net investment income per share for the three months ended September 30, 2024, was $0.58, a decrease of 6.5% from $0.62 in the same period last year[19] - The net increase in net assets resulting from operations for the three months ended September 30, 2024, was $36,643,000, compared to $20,149,000 in the prior year, reflecting an increase of 81.6%[19] Portfolio Investments - The company funded $203.2 million in portfolio investments during Q3 2024, compared to $305.0 million in Q2 2024[6] - The fair value of the company's portfolio investments rose to $2.05 billion across 202 portfolio companies, up from $1.99 billion in Q2 2024[4] - The number of new portfolio companies increased to 18, compared to 14 in the same period last year, representing a growth of 28.6%[20] - The total number of portfolio companies at the end of the period was 202, up from 174 in the previous year, marking an increase of 16.1%[20] - The count of investments rose to 457, up from 363 in the previous year, indicating a growth of 25.9%[20] Expenses and Gains - Net expenses rose to $28.8 million in Q3 2024, compared to $20.1 million in Q3 2023, primarily due to higher interest and management fees[9] - Total expenses before expense support and incentive fees waived were $34,287,000, an increase of 70.5% from $20,091,000 in the same period last year[19] - The company recorded a net realized gain of $1.1 million in Q3 2024, compared to a net loss of $(13.1) million in Q3 2023[10] Debt and Equity - The debt to equity ratio increased to 1.11x as of September 30, 2024, compared to 1.04x at June 30, 2024[11] - The weighted average yield of debt and income-producing investments decreased to 10.9% as of September 30, 2024, from 11.9% a year earlier[8] - The weighted average annual interest rate on new debt investments at par was 9.63%, down from 12.07% in the previous year, indicating a decrease of 20.2%[20] Distributions - The company declared a fourth quarter regular distribution of $0.45 per share, payable on January 28, 2025[3]

Financial Performance - The company reported new gross commitments at par of $225.612 million for the three months ended September 30, 2024, compared to $216.710 million for the same period in 2023, reflecting an increase of approximately 4.1%[247] - Net investments funded were $203.159 million for the three months ended September 30, 2024, up from $150.866 million in the prior year, representing a growth of about 34.7%[247] - Total investment income for the three months ended September 30, 2024, increased to $60.3 million, up from $41.7 million for the same period in 2023, representing a growth of 44.5%[267] - Net investment income for the three months ended September 30, 2024, was $31.5 million, compared to $21.7 million for the same period in 2023, an increase of 45.0%[268] - The net realized gain on investments for the three months ended September 30, 2024, was $1.1 million, compared to a net realized loss of $(13.1) million for the same period in 2023[277] - The net change in unrealized gains for the three months ended September 30, 2024, was $4.1 million, attributed to market spread tightening and positive credit performance[278] Investment Portfolio - The portfolio companies increased from 161 at the beginning of the period to 202 by the end of the period, indicating a growth of 25.5%[247] - Total investments as of September 30, 2024 amounted to $2,075,365, with first-lien debt at amortized cost of $1,855,467 and fair value of $1,843,607[251] - The size of the investment portfolio increased to $2.1 billion as of September 30, 2024, compared to $1.5 billion as of September 30, 2023, reflecting a growth of 40%[270] - The average portfolio company investment was $10,274 as of September 30, 2024, compared to $10,133 at the end of 2023[251] - The healthcare and pharmaceuticals sector represented 14.18% of the portfolio as of September 30, 2024, up from 12.72% at the end of 2023[253] Debt and Financing - The weighted average annual interest rate on new debt investments at par was 9.63% for the three months ended September 30, 2024, down from 12.07% in the same period of 2023[247] - The weighted average yield on debt and income-producing investments at cost decreased from 11.72% to 10.86% from December 31, 2023 to September 30, 2024[254] - The percentage of debt investments bearing a floating rate was 94.25% as of September 30, 2024, compared to 94.61% as of December 31, 2023[254] - The company’s subordinated debt as of September 30, 2024, included second lien term loans of $67,947 and mezzanine debt of $99,925[250] - Total debt obligations as of September 30, 2024, amount to $1,101,964, with $217,500 due in 1 to 3 years, $112,750 due in 3 to 5 years, and $771,714 due in more than 5 years[342] Liquidity and Capital Structure - The company had $130.0 million available under the Wells Fargo Financing Facility and $137.3 million under the SMBC Corporate Revolver as of September 30, 2024, ensuring sufficient liquidity for operations[282] - The company provided $311.1 million from financing activities during the nine months ended September 30, 2024, primarily from common share issuances and secured borrowings[283] - The company raised $99.3 million from its IPO on January 29, 2024, by issuing 5,500,000 shares at a price of $18.05 per share[284] - The company has authorized a total of 500,000,000 shares of common stock, with all shares initially designated as common stock[284] - The company has entered into a share repurchase plan allowing for the purchase of up to $99.3 million of its common stock at prices below its net asset value (NAV) per share[297] Risk Management - Approximately 83% of the company's debt investments have financial covenants, indicating a strong focus on risk management[248] - The company has a weighted average interest coverage ratio of 2.1x for its first-lien loans, suggesting a healthy ability to meet interest obligations[248] - The company is focusing on investing in defensive businesses with low cyclicality and strong free cash flow generation[257] - The ongoing geopolitical conflicts and financial institution failures have introduced significant volatility in the financial markets, impacting market risks[371] - The Company is exposed to valuation risk due to investments in illiquid debt and equity securities of private companies[372] Interest Rate Sensitivity - Interest income and expenses are sensitive to fluctuations in interest rates, impacting net investment income significantly[373] - The Company estimates that a 300 basis point increase in interest rates could result in a net income increase of $18,343,000[378] - A 300 basis point decrease in interest rates could lead to a net income decrease of $18,326,000[378] - Approximately 5.75% of the Company's debt investments bear interest at a fixed rate, while 94.25% bear interest at a floating rate as of September 30, 2024[375] - 99.59% of the floating rate debt investments are subject to interest rate floors as of September 30, 2024[375] Regulatory and Compliance - The company has elected to be treated as a RIC under the Code, which allows it to avoid U.S. federal income taxes on distributed income[364] - The company must distribute at least 90% of its investment company net taxable income to qualify for RIC tax treatment[308] - The SEC granted an exemptive order allowing the Company to participate in negotiated co-investment transactions with certain affiliates[346] - Shareholders are subject to transfer restrictions for 365 days following the IPO prospectus date, with varying limitations thereafter[303] - The Board declared a fourth quarter regular dividend of $0.45 per share, payable on or around January 28, 2025[369]

Core Viewpoint - Nuveen Churchill Direct Lending Corporation (NCDL) has shown stable performance in Q2 2024, with a positive alpha of approximately 6.5%, despite uncertainties in the broader Business Development Company (BDC) sector [3][5]. Financial Performance - NCDL's net investment income per share for Q2 2024 was $0.57, an increase of $0.01 from the previous quarter, indicating a relatively stable income stream compared to peers [5]. - The dividend coverage ratio stands at approximately 126% when adjusted for supplemental distributions, which is significantly above the BDC sector average [5]. - The forward yield based on the base dividend is around 10.3%, reflecting an attractive investment opportunity [5]. Investment Activity - During Q2, NCDL originated $360 million in new loans, with over 95% being first lien senior secured loans, leading to a fair value portfolio increase of about $196 million [5]. - The proportion of first lien senior loan investments in the portfolio has risen to nearly 91% based on fair value [5]. Leverage and Risk Management - NCDL's leverage increased from 0.82x to 1.04x, which is still below the sector average, indicating a cautious approach to portfolio expansion [5]. - The company recognized an unrealized loss of $0.20 per share due to two underperforming investments, but this is mitigated by the high quality of the portfolio, which is primarily composed of defensive investments backed by private equity sponsors [5]. Conclusion - Based on the Q2 2024 earnings data, the rating for NCDL has been upgraded from hold to buy, as the company has demonstrated the ability to grow its portfolio conservatively and maintain strong dividend coverage [6].

Financial Data and Key Metrics Changes - The company reported net investment income of $0.57 per share, exceeding both the regular quarterly distribution of $0.45 per share and a special distribution of $0.10 per share, resulting in an annualized dividend yield of approximately 12.3% [18][5] - Total net income for the quarter was $0.37 per share, impacted by $0.20 per share of net realized and unrealized losses [19] - The debt-to-equity ratio at the end of the quarter was 1.04x, consistent with prior guidance [19] - Net asset value per share decreased by approximately 1% to $18.03, primarily due to unrealized losses on two nonaccrual investments [20] Business Line Data and Key Metrics Changes - The company experienced significant investment activity with $360 million in new originations, over 95% of which were first lien senior secured loans [5][23] - The fair value of assets grew by approximately $196 million quarter-over-quarter, largely due to record high new originations [21] - The portfolio consisted of nearly 200 investments, with the top 10 investments representing only 14.4% of the total portfolio [12][22] Market Data and Key Metrics Changes - Credit quality remains strong despite inflationary pressures, with a weighted average internal risk rating of 4.1 and a watch list at a manageable level of 3.8% of fair value [11][26] - The average position size in the portfolio is 0.5%, which serves as a key risk mitigation tool [23] - The company noted modest spread compression in the first half of the year, but remains insulated from pricing pressures in the broadly syndicated loan market [6][42] Company Strategy and Development Direction - The company focuses on a high level of portfolio diversification across various metrics, emphasizing credit quality and rigorous investment processes [13][14] - The strategy includes prioritizing core middle market senior loan investments, which are believed to provide strong long-term risk mitigation characteristics [10][16] - The company aims to maintain a disciplined approach to underwriting, avoiding riskier investments and focusing on high-quality businesses [15][38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the U.S. economic environment, noting resilience and a lack of evidence for an imminent recession in their core middle market portfolio [7][34] - The company anticipates strong performance in the second half of 2024, supported by a robust pipeline of investment opportunities [13][30] - Management highlighted the importance of deep relationships with private equity sponsors, which provide a competitive advantage in sourcing deals [16][39] Other Important Information - The company has a share repurchase program with approximately $92.8 million remaining under the program as of quarter end [27] - The second lockup release saw 35% of nonaffiliated pre-IPO shares released, nearly quadrupling the public float since the IPO [28] Q&A Session Summary Question: Outlook for new investments in the second half of the year - Management indicated a robust pipeline and continued strong origination activity, with optimism for new deal activity to grow as a percentage of overall investments [30][32] Question: Economic outlook and revenue/EBITDA growth across portfolio companies - Management reported positive revenue and EBITDA growth across the majority of portfolio companies, indicating a healthy portfolio [34] Question: Insights on nonaccruals and resolution timelines - Management stated that they are actively working with sponsors and borrowers to resolve nonaccruals, but no specific timelines were provided [36][37] Question: Timeline for rotating out of upper middle market loans - Management confirmed a robust pipeline of traditional middle market opportunities and indicated that the rotation strategy is progressing well [37] Question: Competition from other direct lenders in the middle market - Management noted that while there is competition, established players with strong relationships are benefiting from market consolidation, and new entrants are less impactful in the core middle market [43][45]