Financial Data and Key Metrics Changes - Adjusted net investment income for Q3 2025 was $0.32 per share, covering the $0.32 per share dividend paid on September 30 [5] - Net asset value per share declined by $0.15 compared to Q2, now at $12.06, due to modest declines across four investments [5][15] - Total investment income for the quarter was $80 million, a 4% decrease compared to the prior quarter [26] - Total net expenses decreased by 5% to $47 million, including a fee waiver [27] Business Line Data and Key Metrics Changes - NMFC's portfolio loan-to-value stands at 45%, with a focus on defensive growth sectors such as healthcare and IT [6][24] - Senior-oriented assets increased to 80% of the overall portfolio, up from 78% in the prior quarter [12][23] - The average yield of NMFC's portfolio decreased slightly to 10.4% due to lower yields on originations compared to repayments [24] Market Data and Key Metrics Changes - The direct lending market remains attractive, with stable spreads despite a lack of significant M&A activity [19][20] - Most unitranche loans are pricing at SOFR plus 450-500 range, indicating a stable pricing environment [20] - Approximately 80% of investments are senior in nature, reflecting a shift towards lower-risk assets [23] Company Strategy and Development Direction - NMFC aims to improve the quality and diversity of its asset base while optimizing liabilities and enhancing income quality [12] - The company is exploring a portfolio sale of up to $500 million to diversify its portfolio and reduce PIK income [7][8] - NMFC's management emphasizes shareholder alignment, with 14% of outstanding shares owned by employees and senior advisors [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the deal environment improving in Q4 and 2026, with expectations of increased repayments [36] - The company remains committed to maintaining leverage within a target range of 1 to 1.25 [26][36] - Management is focused on reversing unrealized depreciation within the existing portfolio and recovering full principal value on challenged investments [17][58] Other Important Information - NMFC has fully utilized a $50 million stock repurchase program, repurchasing approximately $47 million in shares at an average price of $10 [7] - The company has a diversified portfolio across 127 companies, with the top 10 single-name issuers accounting for 26% of total fair value [25] Q&A Session Summary Question: Regarding the potential portfolio sale - The sale will focus on the largest positions to diversify the portfolio and reduce PIK income, including both PIK and cash-yielding names [34] Question: On the buyback strategy - The company aims to stay within leverage levels while potentially using repayments to buy back stock if conditions allow [36] Question: About deployment capacity and strategy - NMFC remains active in the market but is prioritizing share repurchases due to leverage considerations [41] Question: On the potential secondary sale and use of proceeds - Proceeds could be used for debt repayment, stock repurchases, or new loans to diversify the portfolio [44] Question: Concerns about other portfolio positions affected by tariffs - The portfolio is well-positioned against tariff impacts, with Beauty Industry Group being the only significant exposure [55] Question: On the performance of Admentum - Admentum's performance is stable, and the company is working on targeted M&A to grow the business [67]