SLR Investment (US:SLRC)2026-02-24 21:10Investment Activities - For the year ended December 31, 2025, the company invested approximately $1.1 billion across about 58 portfolio companies, compared to $468 million across 50 portfolio companies in 2024[431]. - Investments sold, prepaid, or repaid during 2025 totaled approximately $1.0 billion, up from approximately $634 million in 2024[431]. - As of December 31, 2025, the portfolio consisted of 100 companies, with 21.5% in cash flow senior secured loans and 47.1% in asset-based senior secured loans[432]. - The largest loan outstanding as of December 31, 2025, was $29.9 million, compared to $27.9 million in 2024[436]. - As of December 31, 2025, SLR Equipment had a total net investment in leases and loans of approximately $299.8 million on total assets of $338.3 million, compared to $324.9 million on total assets of $366.3 million as of December 31, 2024[438]. - As of December 31, 2025, SLR Healthcare's portfolio totaled approximately $297.8 million of commitments with a total net investment in loans of $157.0 million on total assets of $165.4 million, up from $288.3 million of commitments and $130.2 million in loans as of December 31, 2024[443]. - As of December 31, 2025, SLR Business Credit managed a portfolio totaling approximately $920.4 million of commitments, with $535.2 million funded, compared to $858.0 million of commitments and $488.4 million funded as of December 31, 2024[445]. - The portfolio includes a significant amount of health care providers and services, with multiple entries such as BayMark Health Services, Inc. at a fair value of $3,991,000 and Exactcare Parent, Inc. at $3,171,000[456]. - The portfolio includes diversified sectors such as insurance, IT services, and consumer products, enhancing risk diversification[456]. - The company has a notable investment in software, with iCIMS, Inc. valued at $10,000,000 and a rate of 9.61%[456]. - The SSLP portfolio demonstrates a strategic focus on health care, with multiple investments in this sector, reflecting growth potential[456]. Financial Performance - SLR Credit had net income of $13.8 million on gross income of $44.9 million for the year ended December 31, 2025, down from net income of $24.9 million on gross income of $55.2 million in 2024[436]. - For the years ended December 31, 2025 and December 31, 2024, SLR Equipment reported net income of $2.6 million and a net loss of $9.5 million, respectively, on gross income of $28.6 million and $22.0 million[438]. - For the years ended December 31, 2025 and December 31, 2024, SLR Healthcare had net income of $6.9 million and $5.6 million, respectively, on gross income of $23.5 million and $20.0 million[443]. - For the years ended December 31, 2025 and December 31, 2024, SLR Business Credit reported net income of $9.6 million and $10.5 million, respectively, on gross income of $54.8 million and $45.9 million[446]. - The company reported net income of $8,186 thousand for the fiscal year ended December 31, 2025, down from $13,373 thousand in 2024[460]. - Investment income for the fiscal year ended December 31, 2025, was $18,821 thousand, down from $24,330 thousand in 2024, reflecting a decrease in the average size of the income-producing investment portfolio[460]. - Net investment income for the fiscal year ended December 31, 2025, totaled $8,459 thousand, compared to $12,745 thousand in 2024[460]. - The company had a net increase in net assets from operations of $92.5 million for the fiscal year ended December 31, 2025, compared to $95.8 million in 2024[480]. - The company’s gross investment income decreased to $218.5 million in 2025 from $232.4 million in 2024, primarily due to lower index rates[475]. - Total expenses for the fiscal year ended December 31, 2025, were $10,362 thousand, down from $11,585 thousand in 2024, mainly due to lower interest expenses[476]. Asset Management - At December 31, 2025, 83.5% ($1.74 billion) of the income-producing investment portfolio was floating rate, compared to 80.6% ($1.59 billion) in 2024[433]. - The company must ensure that at least 70% of total assets are qualifying assets as per the 1940 Act, impacting investment strategies[426]. - The company holds securities with a par value of $180,681,000, reflecting a stable investment base[456]. - The cost of investments in the portfolio is closely aligned with their fair values, suggesting effective asset management[455]. - The maturity dates for various investments extend up to November 2030, indicating a long-term investment strategy[456]. - The spread above the index for most investments is between 475 to 675 basis points, indicating varying risk profiles[456]. - The company has made significant investments in portfolio companies and plans to use future funds for repayment of indebtedness and cash distributions to stockholders[482]. Debt and Financing - The company had outstanding USD equivalent borrowings under the Credit Facility totaling $505.4 million, composed of $352.2 million of revolving credit and $153.1 million of term loans as of December 31, 2025[490]. - The company closed a private offering of $75 million of unsecured notes due 2028 with a fixed interest rate of 5.95% on August 21, 2025[485]. - The company has a total of $484.0 million in unsecured senior notes, with $75.0 million due within one year and $409.0 million due in 1-3 years[499]. - The SPV Credit Facility has a commitment of $275 million and a final maturity date of August 30, 2028[491]. - The company is in compliance with all financial and operational covenants required by its Debt Instruments as of December 31, 2025[496]. - The company has a total of $452.7 million of unused borrowing capacity under its Credit Facility and SPV Credit Facility[481]. Shareholder Returns - The company declared a quarterly distribution of $0.41 per share payable on March 27, 2026[424]. - Cash distributions per share for fiscal 2025 totaled $1.64, consistent with the previous fiscal year[516]. - The company maintains a dividend reinvestment plan, allowing stockholders to reinvest cash distributions into additional shares[519]. - The Company authorized a stock repurchase program for up to $50 million of outstanding shares, expected to be in place until May 7, 2026, with no repurchases reported during the fiscal years ended December 31, 2025 and December 31, 2024[447]. - The company must distribute at least 90% of its ordinary income to maintain its RIC tax treatment, which may affect future distribution levels[518]. Economic Environment - The macroeconomic environment showed a resilient U.S. economy with real GDP growth in 2025 and expectations for declining short-term interest rates in 2026[430]. - The Company is subject to financial market risks, including interest rate changes, geopolitical risks, and inflationary pressures, which could materially impact net investment income[527]. - A hypothetical 1% decrease in SOFR could decrease net investment income by approximately $0.08 per average share over the next twelve months, while a 1% increase could increase it by approximately $0.06[528]. - The Company has floating rate investments primarily based on SOFR, which reset to current market rates every one to three months[527]. Related Party Transactions - The Company has entered into various business relationships with affiliated parties, including investment advisers managing similar funds[522]. - Related party transactions may occur in the normal course of business, with no administrative fees paid to the Investment Adviser by certain affiliated entities[525]. - The Investment Adviser has received an exemptive order allowing the Company to participate in negotiated co-investment transactions with certain affiliates[524]. Governance and Compliance - The Company has adopted a formal code of ethics governing the conduct of its officers and directors[526]. - The Investment Adviser provides office facilities and administrative services necessary for the Company's day-to-day operations[523]. - The company has entered into various agreements for administrative services, which include payments based on the value of its average gross assets[501].