Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2025 was $0.32 per share, covering the $0.32 per share dividend paid on December 31 [4][5] - Net asset value (NAV) declined to $11.52 per share from $12.06 per share, primarily due to lower valuation on Edmentum [5][25] - Total investment income for the quarter was $77 million, a 4% decrease compared to the prior quarter [34] Business Line Data and Key Metrics Changes - Approximately 95% of the loan portfolio is ranked green, with no positions rated red [8][24] - PIK income is expected to decrease by 20%-25% as cash proceeds from the asset sale are redeployed [20] - The top five positions now account for 14% of NMFC's portfolio value, down from a higher concentration [19] Market Data and Key Metrics Changes - The company sold approximately $477 million of assets at a price of 94% of the 12/31/2025 marks, which is considered essentially par [12][13] - The secondary sale is expected to improve diversification, with senior-oriented assets now representing 81% of the portfolio, up from 75% [19][32] Company Strategy and Development Direction - The company plans to utilize the full Dividend Protection Program, reducing the performance fee from 20% to 15% until the end of 2026, and intends to maintain this lower fee permanently thereafter [12] - The focus is on redeploying proceeds from the asset sale into first lien assets and potentially buying back stock [41][42] - The company aims to improve earnings and book value through strategic investments and stock buybacks [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's quality, with 95% rated green, and highlighted the potential for equity appreciation in companies like UniTek [11][16] - The impact of AI on the market is acknowledged, with a focus on managing risks associated with technological changes [22] - Management believes NMFC shares should trade back towards book value, given the positive factors in the market [11] Other Important Information - The company repurchased approximately $52 million of shares in 2025 and has board authorization to buy an additional $80 million [16] - Nonaccruals remain low at 1.4% of the portfolio at fair value, with expectations for DCA to return to accrual status in Q2 [26] Q&A Session Summary Question: Is the 94% discount inclusive of any advisory fee? - The 94% of par was the purchase price of the assets, with expected fees and expenses around $7 million [41] Question: Did the company try to sell any struggling assets? - The company focused on reducing concentration and PIK income, selling larger positions that were scrutinized by the market [44][46] Question: How were the assets selected and priced? - The sale was a competitive process with multiple bidders, and assets were selected based on concentration and PIK characteristics [50][52] Question: How does the pricing of these assets relate to internal marks? - The sale was seen as fair for both sides, validating internal marks while improving portfolio composition [60]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2025 was $0.32 per share, covering the $0.32 per share dividend paid on December 31 [4][5] - Net asset value (NAV) declined to $11.52 per share from $12.06 per share, primarily due to lower valuation on Edmentum [5][25] - Total investment income for the quarter was $77 million, a 4% decrease compared to the prior quarter [34] Business Line Data and Key Metrics Changes - Approximately 95% of the loan portfolio is ranked green, with no positions ranked red [8][24] - PIK income is expected to decrease by 20%-25% as cash proceeds from the asset sale are redeployed [20] - The top five positions now represent 14% of NMFC's portfolio value, down from previous concentrations [19] Market Data and Key Metrics Changes - The company sold approximately $477 million of assets at a price of 94% of the December 31 marks, which is considered essentially par [12][13] - The secondary sale is expected to improve diversification, with senior-oriented assets now representing 81% of the portfolio, up from 75% [19][32] Company Strategy and Development Direction - The company plans to utilize the full Dividend Protection Program, reducing the performance fee from 20% to 15% until the end of 2026, and intends to maintain this lower fee permanently thereafter [12] - The focus remains on deploying proceeds from the asset sale into better credit investment opportunities and stock buybacks [42][60] - The company aims to improve earnings and book value through strategic investments and potential equity appreciation in companies like UniTek [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges increased risks across various sectors due to AI but sees opportunities for informed lenders [22] - The company expects to operate within a leverage target of 1 to 1.25, maintaining financial flexibility post-asset sale [41] - Management believes NMFC shares should trade back towards book value, supported by a sustainable dividend rate of approximately $0.25 per share per quarter starting Q2 2026 [15] Other Important Information - The company repurchased approximately $52 million of shares in 2025 and has board authorization to buy an additional $80 million [16] - Non-accruals remain low at 1.4% of the portfolio at fair value, with expectations for DCA to return to accrual status in Q2 [26] Q&A Session Summary Question: Is the 94% discount inclusive of any advisory fee? - The 94% of par was the purchase price of the assets, with expected fees and expenses of about $7 million [41] Question: Did you try to sell any struggling assets? - The mindset was to reduce concentration and PIK income, focusing on over-concentrated names with high PIK characteristics [44][52] Question: Was the asset sale process competitive? - The sale was competitive, led by Evercore, with multiple bids received, and the selected assets were those that aligned with the company's strategic goals [50][51]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2025 was $0.32 per share, covering the $0.32 per share dividend paid on December 31, 2025 [4] - Net asset value (NAV) declined to $11.52 per share from $12.06 per share, primarily due to lower valuation on Edmentum [5][25] - Total investment income for the quarter was $77 million, a 4% decrease compared to the prior quarter [35] - Total net expenses decreased by 5% to $44 million, including a fee waiver [35] Business Line Data and Key Metrics Changes - Approximately 95% of the loan portfolio is ranked green, with no positions rated red [8][24] - The company sold $477 million of assets, diversifying the portfolio and reducing PIK income [12][18] - Senior-oriented assets now represent 81% of the portfolio, up from 75% in the prior year [19][32] Market Data and Key Metrics Changes - The company expects to see some spread widening and increased pricing dispersion in direct lending [28] - Approximately 41% of pro forma PIK income will be generated by high-performing companies like Benevis and UniTek [20] Company Strategy and Development Direction - The company plans to utilize the full Dividend Protection Program, reducing the incentive fee from 20% to 15% until the end of 2026 [12] - Following the asset sale, the company aims to redeploy proceeds primarily into first lien assets [19][32] - The company is focused on business building and leveraging its expertise in software loans, particularly in the context of AI [10][22] Management's Comments on Operating Environment and Future Outlook - Management believes NMFC shares should trade back towards book value, citing several positive factors [11] - The company acknowledges increased risks related to AI but sees opportunities for well-informed lenders [22] - Management remains optimistic about the potential for equity appreciation in companies like UniTek [16] Other Important Information - The company repurchased approximately $52 million of shares in 2025 and has authorization to buy an additional $80 million [16] - Nonaccruals remain low at 1.4% of the portfolio at fair value [26] Q&A Session Summary Question: Is the 94% discount on the asset sale inclusive of any advisory fees? - The 94% of par was the purchase price, with expected fees and expenses of about $7 million [41] Question: Did the company try to sell any struggling assets? - The company focused on reducing concentration and PIK income, selling larger positions that were scrutinized by the market [44][45] Question: How were the assets selected for the sale? - The assets were chosen based on concentration and PIK characteristics, aiming to improve portfolio composition [51][52] Question: How does the pricing of the assets compare to internal marks? - The sale was seen as fair for both sides, validating internal marks while reducing concentration [61]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q1 2025 was $0.32 per share, covering the $0.32 per share dividend paid on March 31 [5] - Net asset value per share declined to $12.45, a decrease of $0.10 or 80 basis points, indicating stable credit performance [5][18] - Total investment income for the quarter was $86 million, a 5% decrease compared to the prior year [29] Business Line Data and Key Metrics Changes - The percentage of first lien assets is increasing while PIK income and second lien income are decreasing [6] - PIK interest income represented only 8% of total investment income, down from 10% in the previous quarter [30] - The average yield of NMFC's portfolio decreased to 10.7% due to lower yields on originations compared to repayments [25] Market Data and Key Metrics Changes - NMFC has only 2% exposure to sectors most at risk for tariffs, compared to 13% for peers [6] - The loan-to-value ratio stands at 43%, indicating a conservative lending approach [6][25] - The weighted average EBITDA of borrowers decreased to $170 million, reflecting the realization of larger companies during the quarter [25] Company Strategy and Development Direction - NMFC aims to continuously improve its portfolio and has a strategic imperative to decrease non-yielding equity positions [10][24] - The company is focused on sectors with low exposure to tariffs and is actively refinancing lending lines at lower rates [6][12] - A stock repurchase program has been authorized to buy back up to $47 million of NMFC shares, indicating confidence in the company's valuation [9] Management's Comments on Operating Environment and Future Outlook - The management noted a pause in M&A activity but sees direct lending as an attractive asset class with stable risk-adjusted returns [20] - The dividend protection program can provide up to $0.02 of extra dividend support per quarter if necessary [7] - Management expressed optimism about the ability to optimize financing and refinance higher-cost debt in the future [60][70] Other Important Information - The company has successfully raised a $15.4 billion private equity fund, one of the largest in the industry [9] - NMFC's non-accruals remain low at $38 million, or 1.2% of the portfolio [19] - The company has a diversified portfolio across 119 companies, with the top 10 single name issuers accounting for 26% of total fair value [26] Q&A Session Summary Question: Inquiry about Unitech's complicated capital structure - Management explained the complexity of Unitech's capital structure and provided details on cash invested and accrued PIK [37][38] Question: Future expectations for Unitech's income - Management indicated that income from Unitech is expected to remain stable moving forward [43] Question: Market outlook on spreads and pricing - Management noted that spreads and pricing have stabilized, with some incremental changes observed [51] Question: Dividend protection plan's sufficiency - Management expressed confidence in having sufficient levers to cover dividends despite potential rate declines [54][60] Question: Duration of the dividend protection program - The dividend protection program is in place for the full year of 2025 and 2026 [72]