Financial Data and Key Metrics Changes - Net investment income (NII) per share was $0.39 for the quarter, corresponding to an annualized return on equity (ROE) of 10.5% [11] - GAAP net income per share was $0.19, corresponding to an annualized ROE of 5.2% [11] - Net asset value (NAV) per share was $14.75, down 1.2% compared to the prior quarter [11] Business Line Data and Key Metrics Changes - MFIC made $262 million of new commitments across 29 transactions during the quarter [12] - The weighted average spread on new commitments was 538 basis points, with a slight increase compared to the prior quarter [12][23] - The weighted average net leverage on new commitments was 4.0 times, down from 4.2 times in the prior quarter [23] Market Data and Key Metrics Changes - The quarter began with heightened volatility due to U.S. tariffs, but market sentiment improved as tariffs were paused and trade deals were struck [20] - The labor market showed resilience with steady unemployment, and the Federal Reserve kept its policy rate unchanged [20] - The weighted average yield at cost of the direct origination portfolio was 10.5%, down from 10.7% in the prior quarter [35] Company Strategy and Development Direction - The company is focused on lending to the core middle market on a first lien senior secured basis, which offers attractive risk-adjusted returns [22] - The reduction in exposure to Merx is expected to provide capital for deployment into first lien middle market loans, which are believed to deliver higher returns [17] - The company intends to redeploy capital repaid from Merx to enhance earnings power and strengthen dividend coverage [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the M&A pipeline is building, with sponsors remaining active despite previous uncertainties [55] - The company expects a busy second half of the year with plenty of opportunities to deploy capital [55] - Management expressed confidence in covering the declared dividend of $0.38 per share through net investment income, despite potential base rate pressures [90] Other Important Information - The company reported total investment income of approximately $81.3 million, up 3.2% compared to the prior quarter [33] - Total principal debt outstanding was $2.05 billion, with total net assets standing at $1.3 billion [38] - The company received an $8.5 million pay down from Merx during the quarter [24] Q&A Session Summary Question: Can you clarify the structure of the remaining investment in Merx? - The remaining investment consists of four aircraft and a servicing platform, with 40% of the remaining exposure related to servicing contracts [43][44] Question: What are the expectations for investment activity in the second half of the year? - The company anticipates a busy second half with a growing M&A pipeline and active sponsors, which should provide ample opportunities for deployment [55] Question: How does the company view the current leverage levels? - The company is comfortable with the current leverage levels and expects them to remain within target ranges, especially with anticipated M&A activity [56][58] Question: What is the expected impact of the Merx transactions on NAV? - The Merx transactions are expected to result in a positive impact to NAV in the high single-digit per share range, specifically between $0.06 to $0.09 [94]

Financial Data and Key Metrics Changes - The proposal to authorize the sale or issuance of shares at a price below the current net asset value (NAV) per share was unanimously recommended by the board of directors [5][8]. Business Line Data and Key Metrics Changes - No specific data on business lines or key metrics was provided during the meeting. Market Data and Key Metrics Changes - The stock is currently trading at a premium to NAV, indicating a favorable market position [12]. Company Strategy and Development Direction - The company is considering measures to adapt to market changes, although no specific offerings are currently contemplated [11][12]. Management Comments on Operating Environment and Future Outlook - Management cautioned that future operations may differ from anticipated results and urged investors to review cautionary statements in SEC filings [6]. Other Important Information - The meeting was a special stockholder meeting, and only validated stockholders were allowed to ask questions [4][9]. Q&A Session Summary Question: Who would be eligible to acquire shares, and how will they go about purchasing shares in an offering? - The general counsel indicated that there is no current offering contemplated, and specifics would be provided in applicable offering documents if a future offering occurs [10][12].

Financial Data and Key Metrics Changes - For Q2 2025, adjusted net investment income (NII) was $20 million, an increase from $18.4 million in Q2 2024, with fee income accounting for about half of the $1.6 million increase [6] - Adjusted NII per share was $0.57 for both periods, reflecting an increase in average shares outstanding due to the equity ATM program [7] - Total investment income for Q2 was $40 million, a $3.5 million increase from Q1 2025, driven by higher interest income and fee income [12] - Total expenses for Q2 were $21.3 million, a $3.1 million increase over Q1, primarily due to higher capital gains incentive fees and interest expenses [12] Business Line Data and Key Metrics Changes - The debt portfolio totaled $1 billion on a fair value basis, with 81% consisting of first lien investments, while the equity portfolio stood at $138.8 million, or 12% of the total portfolio [10] - The weighted average effective yield on debt investments was 13.1% as of June 30, slightly down from 13.2% at the end of Q1 [15] Market Data and Key Metrics Changes - The company noted that M&A activity was dampened in Q2 due to economic and tariff policy uncertainty but showed signs of improvement in late Q2 and into Q3 [6][20] - The company’s portfolio remains diversified by industry, with non-accrual companies under 1% of the total portfolio on a fair value basis [10] Company Strategy and Development Direction - The company aims to grow net asset value over time by carefully selecting high-quality companies with defensive characteristics and positive growth outlooks [11] - The investment strategy focuses on generating attractive risk-adjusted returns while preserving capital in the fragmented lower middle market [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the increase in deal flow, indicating a better environment for investment activity in the latter half of Q3 and into Q4 [20][23] - The company is well-positioned to grow its portfolio, although repayment activity is expected to be episodic and not as high as in the previous quarter [22][23] Other Important Information - The net asset value grew slightly to $692.3 million at quarter end compared to $677.9 million as of March 31, 2025 [8] - The board declared a total dividend of $0.57 per share for 2025, which includes a supplemental dividend of $0.14 per share [7] Q&A Session Summary Question: What is the outlook for M&A activity in the second half of the year? - Management noted that while Q1 had decent deal flow, Q2 saw a drop due to uncertainty, but activity has improved in late Q2 and continues into Q3, with expectations for a decent market in the latter half of the year [20][23] Question: Are there any changes in the competitive environment? - Management indicated that while the market remains competitive, there has been an increase in competition over the past few years, particularly in the lower middle market [25][26] Question: Can we expect the prepayment fees to decrease in Q3? - Management agreed that the prepayment fees and accelerated amortization seen in Q2 are not expected to repeat at the same levels in Q3 [28] Question: Can you provide insights on Quest Software's performance? - Management described Quest as a cybersecurity solutions provider with a solid long-term outlook, although it has faced challenges due to being over-leveraged and higher interest rates [34] Question: What is the priority for financial sponsors regarding capital structure? - Management noted that financial sponsors are looking for ways to return capital to LPs, but the level of dividend income may not be recurring and is often episodic [38]

Financial Data and Key Metrics Changes - BXSL reported net investment income (NII) of $0.77 per share, representing an 11.2% annualized return on equity, primarily from interest income [9][27] - Net asset value (NAV) per share decreased slightly to $27.33 from $27.39 in the previous quarter [9][28] - The distribution of $0.77 per share was fully covered by NII, yielding an annualized distribution yield of 11.3% [9][20] Business Line Data and Key Metrics Changes - BXSL's total portfolio investments at fair value increased to $13.3 billion, up from $11.3 billion year over year [14][28] - The weighted average yield on performing debt investments remained stable at 10.2% [16][29] - 98% of investments are in first lien senior secured loans, with a low non-accrual rate of 0.3% at cost [16][18] Market Data and Key Metrics Changes - The company experienced a nearly 50% increase in new Blackstone credit insurance (BXCI) global private credit deal screenings compared to the fourth quarter of the previous year [8][9] - The average EBITDA of the portfolio companies is approximately $219 million, with year-over-year EBITDA growth of nearly 11% [17][78] Company Strategy and Development Direction - BXSL is focusing on maximizing operational efficiency and maintaining a disciplined approach to investment quality, avoiding unnecessary risks [11][12] - The company aims to lead the market with lower fees and expenses compared to peers, which is seen as a priority for creating a stronger portfolio over time [11][12] - BXCI's scale and expertise are leveraged to enhance revenue and lower costs for portfolio companies, indicating a commitment to value creation [14][25] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in market conditions with improved investor sentiment and a return to open markets, leading to increased deal activity [7][8] - There is cautious optimism regarding the economic outlook, with management emphasizing the importance of quality over risk in investment decisions [11][44] - The company is preparing for heightened deal activity, particularly within existing portfolio companies, while remaining vigilant about market risks [10][11] Other Important Information - The company maintained its dividend distribution at $0.77 per share, reflecting a commitment to delivering high-quality yield to shareholders [20][27] - Total liquidity was reported at nearly $3 billion, providing ample cash and undrawn debt available for future investments [31] Q&A Session Summary Question: Sustainability of the dividend - Management indicated that the dividend is regularly assessed and is currently 15% higher than the average BDC, with long-term signals being prioritized over short-term deal activity [35][38] Question: Deal activity and spread expectations - Management acknowledged the potential for increased deal activity to impact spreads but emphasized the importance of supply and demand dynamics in the market [41][43] Question: Types of deals being seen - Management noted a mix of M&A activity within existing portfolio companies and some refinancing deals, with a focus on both lower middle market and large-cap spaces [48][49] Question: Repayment activity expectations - Management expects repayment activity to normalize higher as M&A activity picks up, following a low base in Q2 [56][58] Question: Concerns about net investment losses - Management reassured that the marks on assets reflect a robust valuation process, with a long track record of managing through various market conditions [75][78]

Financial Data and Key Metrics Changes - For the first quarter ended March 31, 2025, the company generated GAAP net investment income of $0.35 per share and core net investment income of $0.37 per share, which excludes estimated excise taxes [5] - The net asset value per share decreased by $0.21 during the quarter, primarily due to company-specific write-downs in the loan portfolio and a reduction of spillover income [5] - The company has paid $295 million in dividends to investors since its IPO, representing $17.9 per share to an investor in the IPO [5] Business Line Data and Key Metrics Changes - The investment portfolio at fair value increased to $991.1 million across 110 portfolio companies, up from $953.5 million across 105 companies as of December 31, 2024 [6] - During the first quarter, the company invested $46.7 million in seven new portfolio companies and had $8.7 million in other investment activity at par [6] - The average loan per company is $9.4 million, with the largest overall investment at $21.9 million, both at fair value [6] Market Data and Key Metrics Changes - 90% of the company's loans were secured, and 91% were priced at floating rates as of March 31, 2025 [6] - Currently, loans to five portfolio companies are on non-accrual status, comprising 6.7% of the total cost and 4% of the fair value of the total loan portfolio, representing a decrease from the prior quarter [7] Company Strategy and Development Direction - The company plans to draw new leverage under the SBIC III license to continue funding qualifying portfolio company investments [8] - The company aims to grow its portfolio to over $1 billion, with potential for more than $10 million in equity gains by year-end [10] - The company has shifted its investment strategy to focus on first lien unitranche secured lending with equity co-investments, moving away from second lien loans due to risk management considerations [38] Management's Comments on Operating Environment and Future Outlook - The management noted that the pipeline for new loan originations is slower compared to three months ago, affected by tariff activity and overall economic conditions [17] - The management expressed optimism about picking up activity as clarity improves in the market, indicating that the current slowdown is temporary [46] - The company expects to maintain the dividend at $0.40 per share for the second and third quarters, although net investment income is currently running below this level [19][21] Other Important Information - The company issued $75 million in aggregate principal amount of 7.25% notes due April 1, 2030, using the proceeds to repay the bank facility [8] - The company has received a green light letter from the Small Business Administration for Stellus Capital SBIC III, which is a significant step in the licensing process [8] Q&A Session Summary Question: Impact of first quarter originations on interest income - The average portfolio in the first quarter was higher than in the fourth quarter, which is expected to result in a pickup in yield in dollars for the second quarter [13][14] Question: Pipeline status and opportunities - The pipeline is slower than three months ago, but there are still interesting opportunities expected to close in the current and next quarter [17][18] Question: Trajectory of net investment income to cover dividends - The company is currently running at a level of net investment income less than the dividend, but expects to be in a good position by the end of the year [21][22] Question: Trade education acquisition restructuring - The business was restructured and recapitalized satisfactorily, with expectations for improved performance going forward [25][26] Question: Logic behind issuing fixed-rate debt - The issuance was necessary to retire maturing bonds and to have some unsecured debt in the capital stack [32][33] Question: Future issuance of common shares - The company will consider issuing shares based on market conditions to ensure accretive outcomes [36] Question: Second lien loans strategy - The company does not expect to issue new second lien loans, focusing instead on first lien unitranche secured lending [38] Question: Impact of SBA green light letter on earnings - The potential for SBIC debentures could allow for lower rates than current borrowing, positively impacting earnings [40][41]

Financial Data and Key Metrics Changes - For the quarter ended March 31, net investment income was approximately $6.1 million or $0.09 per share, compared to approximately $6.0 million or $0.09 per share for the prior quarter [5] - Net asset value per share decreased to $2.09 from $2.30 in the prior quarter [5] - Total investment income for the first quarter was approximately $10.2 million, roughly the same as in the prior quarter [6] - Combined net unrealized and realized losses on investments were approximately $14.2 million or $0.20 per share, compared to losses of approximately $2.7 million or $0.04 per share in the prior quarter [6] Business Line Data and Key Metrics Changes - Investment activity included purchases of approximately $16 million, sales of approximately $10.7 million, and repayments of approximately $8.7 million during the quarter [6] Market Data and Key Metrics Changes - U.S. loan market performance weakened, with U.S. loan prices decreasing from 97.33% of par to 96.31% of par [8] - The twelve-month trailing default rate for loans decreased to 0.82% from 0.91% at the end of the previous quarter, but the overall default rate, including liability management exercises, remained elevated at 4.31% [9] - The distress ratio, defined as the percentage of loans with prices below 80% of par, ended the quarter at 3.21%, up from 3.02% at the end of 2024 [9] - U.S. leveraged loan primary market issuance was $141.1 billion, representing a 2% decrease compared to the same quarter in the previous year [10] - Loan fund inflows were approximately $1.94 billion for the quarter [11] Company Strategy and Development Direction - The company focuses on portfolio management strategies designed to maximize long-term total return and has historically taken a longer-term view towards its investment strategy [11] Management's Comments on Operating Environment and Future Outlook - Management noted the weakened performance in the U.S. loan market and highlighted the importance of monitoring default rates and market conditions [8][9] Other Important Information - The company distributed $0.05 per share to common stock shareholders during the quarter [6] - A total of approximately 1.3 million shares were issued in an aftermarket offering, resulting in net proceeds of approximately $3.5 million [6] - Monthly distributions of $0.35 per share were declared for July, August, and September 2025 [6] Q&A Session Summary Question: Are there any questions from participants? - There were no questions from participants during the Q&A session [14]