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Nuveen Churchill Direct Lending(NCDL) - 2025 Q1 - Quarterly Results

Executive Summary & Highlights First Quarter 2025 Performance Overview Nuveen Churchill Direct Lending Corp. reported a solid start to 2025, with net investment income of $0.53 per share for Q1 2025, maintaining a diversified portfolio and optimizing its balance sheet | Metric | Q1 2025 (per share) | | :------------------------------------------------ | :------------------ | | Net Investment Income (NII) | $0.53 | | Net Realized and Unrealized Loss on Investments | $(0.24) | | Net Increase in Net Assets from Operations | $0.29 | | Net Asset Value (NAV) | $17.96 | - The portfolio is highly diversified with an average position size of 0.5% and only 0.4% of the total portfolio on non-accrual status on a fair value basis at the end of Q1 202537 - The company optimized its balance sheet and capital structure by issuing $300 million of unsecured notes and refinancing a CLO, aiming to reduce future borrowing costs3 Distribution Declaration The Board of Directors declared a second quarter 2025 regular distribution of $0.45 per share, payable on July 28, 2025, to shareholders of record as of June 30, 2025 | Distribution Type | Amount (per share) | Payable Date | Record Date | | :---------------- | :----------------- | :----------- | :---------- | | Q2 2025 Regular | $0.45 | July 28, 2025| June 30, 2025 | - The company paid a first quarter regular distribution of $0.45 per share and a final special distribution of $0.10 per share on April 28, 2025, representing a 12.4% total annualized distribution yield based on Q1 NAV per share7 Portfolio Overview Portfolio Composition As of March 31, 2025, the company's portfolio maintained a fair value of $2.08 billion across 210 companies and 26 industries, primarily consisting of first-lien debt with a stable weighted average Internal Risk Rating | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Fair Value of Investments | $2.08 billion | $2.08 billion | | Number of Portfolio Companies | 210 | 210 | | Number of Industries | 26 | 27 | | Investment Type (Fair Value) | March 31, 2025 | December 31, 2024 | | :--------------------------- | :------------- | :---------------- | | First-Lien Debt | 90.5% | 90.6% | | Subordinated Debt | 7.8% | 7.7% | | Equity Investments | 1.7% | 1.8% | - The weighted average Internal Risk Rating of the portfolio at fair value remained stable at 4.1 for both March 31, 2025, and December 31, 2024. Non-accrual investments increased to two portfolio companies, representing 0.4% of total investments at fair value, up from one company (0.1%) in the prior quarter78 Portfolio and Investment Activity During Q1 2025, the company funded $153.0 million in portfolio investments and received $148.4 million from repayments and sales, indicating a slight net increase in funded investments compared to the previous quarter | Activity | Q1 2025 (3 months ended Mar 31) | Q4 2024 (3 months ended Dec 31) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Portfolio Investments Funded | $153.0 million | $151.1 million | | Proceeds from Repayments and Sales| $148.4 million | $119.5 million | Results of Operations for the First Quarter Ended March 31, 2025 Investment Income Investment income increased year-over-year, primarily due to higher investment activity, despite a decrease in the weighted average yield of debt and income-producing investments | Metric | Q1 2025 (3 months ended Mar 31) | Q1 2024 (3 months ended Mar 31) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Total Investment Income | $53.6 million | $51.6 million | | Weighted Average Yield (at cost) | 10.10% | 11.55% | - The decrease in weighted average yield was primarily due to overall tightening of spreads in new investments and a decline in base interest rates10 Net Expenses Net expenses rose year-over-year, driven by increased interest and debt financing expenses due to higher borrowings and refinancing activities, as well as higher management fees linked to the company's growing total assets | Metric | Q1 2025 (3 months ended Mar 31) | Q1 2024 (3 months ended Mar 31) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Net Expenses (after waivers) | $26.1 million | $21.9 million | - Interest and debt financing expenses increased due to higher average daily borrowings and the acceleration of deferred financing costs from the termination of the Wells Fargo Financing Facility and CLO-I refinancing11 - Management fees increased due to the Company's increase in total assets. Incentive fees on income and capital gains were waived for the first five quarters, including Q1 202511 Net Realized and Unrealized Gain (Loss) on Investments The company recorded a net realized gain in Q1 2025, a positive shift from a loss in the prior year, primarily due to repayments and sales, but reported a significant net change in unrealized loss attributed to underperforming portfolio companies | Metric | Q1 2025 (3 months ended Mar 31) | Q1 2024 (3 months ended Mar 31) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Net Realized Gain (Loss) | $1.1 million | $(3.6) million | | Net Change in Unrealized Gain (Loss)| $(13.6) million | $4.1 million | - The net realized gain in Q1 2025 was primarily driven by gains from full or partial repayments and sales of investments12 - The net change in unrealized loss for Q1 2025 primarily resulted from the underperformance of certain portfolio companies12 Financial Condition, Liquidity and Capital Resources As of March 31, 2025, the company maintained $49.2 million in cash and cash equivalents and had approximately $172.8 million available under its revolving credit facility, with the debt to equity ratio increasing to 1.31x (1.25x net) from 1.15x (1.10x net) at the end of 2024 | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Cash and Cash Equivalents | $49.2 million | $43.3 million | | Total Aggregate Principal Debt | $1.2 billion | N/A | | Available for Additional Borrowings | $172.8 million | N/A | | Debt to Equity Ratio | 1.31x | 1.15x | | Net Debt to Equity Ratio | 1.25x | 1.10x | Corporate Information Conference Call and Webcast Information Nuveen Churchill Direct Lending Corp. hosted a conference call and webcast on May 8, 2025, to discuss its first quarter 2025 financial results, with replay available on the company's website - A conference call was held on May 8, 2025, at 11:00 AM Eastern Time, with a live webcast and replay available on the company's website1415 About Nuveen Churchill Direct Lending Corp. Nuveen Churchill Direct Lending Corp. (NCDL) is a specialty finance company regulated as a business development company, primarily investing in senior secured loans to private equity-owned U.S. middle market companies, externally managed by affiliates of Nuveen, LLC and TIAA - NCDL is a specialty finance company focused on investing in senior secured loans to private equity-owned U.S. middle market companies16 - NCDL is regulated as a business development company (BDC) and is externally managed by Churchill DLC Advisor LLC and Churchill Asset Management LLC, both affiliates of Nuveen, LLC and TIAA16 Forward-Looking Statements The press release contains forward-looking statements regarding NCDL's future performance and financial condition, which are subject to substantial risks and uncertainties, cautioning investors not to place undue reliance on these statements - The document includes forward-looking statements about NCDL's business and investments, which involve substantial risks and uncertainties17 - Investors should not place undue reliance on these statements, as actual results could differ materially due to various factors, including changes in financial markets, interest rates, and economic trends17 Contacts Contact information for investor relations and media inquiries is provided - Investor Relations can be reached at NCDL-IR@churchillam.com. Media inquiries can be directed to Madison Hanlon at Prosek Partners (Pro-churchill@prosek.com)18 Consolidated Financial Statements (Unaudited) Consolidated Statements of Assets and Liabilities The consolidated balance sheet shows a slight decrease in total net assets from December 31, 2024, to March 31, 2025, primarily driven by changes in paid-in-capital and total distributable earnings (loss), with total assets and liabilities both increasing | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total Assets | $2,172,584 | $2,143,725 | | Total Liabilities | $1,252,564 | $1,173,405 | | Total Net Assets | $920,020 | $970,320 | | Net Asset Value per Share | $17.96 | $18.18 | - Investments at fair value remained stable at approximately $2.08 billion. Debt (net of deferred financing costs and discount) increased from $1,108,261 thousand to $1,199,570 thousand19 Consolidated Statements of Operations The consolidated statement of operations for Q1 2025 shows an increase in total investment income but a decrease in net investment income compared to Q1 2024, primarily due to higher net expenses, leading to a decrease in net assets from operations despite a net realized gain | Metric (in thousands) | Q1 2025 (3 months ended Mar 31) | Q1 2024 (3 months ended Mar 31) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Total Investment Income | $53,586 | $51,595 | | Net Expenses (after waivers) | $26,134 | $21,862 | | Net Investment Income | $27,452 | $29,733 | | Net Realized Gain (Loss) | $1,103 | $(3,625) | | Net Change in Unrealized Gain (Loss)| $(13,534) | $3,916 | | Net Increase (Decrease) in Net Assets | $15,021 | $30,024 | | Per Share Data | Q1 2025 | Q1 2024 | | :------------------------------------------------ | :------ | :------ | | Net Investment Income per Share | $0.53 | $0.56 | | Net Increase (Decrease) in Net Assets per Share | $0.29 | $0.57 | Portfolio and Investment Activity (Unaudited) The detailed investment activity for Q1 2025 shows a decrease in new gross commitments compared to Q1 2024, with a significant increase in investments sold or repaid, and a decrease in the weighted average annual interest rate on new debt investments | Metric (in thousands) | Q1 2025 (3 months ended Mar 31) | Q1 2024 (3 months ended Mar 31) | | :-------------------------------- | :------------------------------ | :------------------------------ | | New Gross Commitments at Par | $166,239 | $206,815 | | Net Investments Funded | $153,019 | $204,330 | | Investments Sold or Repaid | $(148,350) | $(54,896) | | Net Funded Investment Activity | $4,669 | $149,434 | | New Investment Activity | Q1 2025 | Q1 2024 | | :------------------------------------------------ | :------ | :------ | | Weighted Average Annual Interest Rate on New Debt | 9.38% | 10.27% | | Weighted Average Spread on New Floating Rate Debt | 4.81% | 4.87% | - The number of portfolio companies remained at 210 at the end of Q1 2025, with 12 new companies added and 12 exited during the quarter22