Financial Performance - Adjusted Net Investment Income (NII) was $0.31 per share, exceeding the regular dividend of $0.25 per share[9] - The company declared a regular dividend of $0.25 per share and a special dividend of $0.04 per share for Q2 2025[9] - The regular dividend coverage ratio in Q2 2025 was 124%[9] - The annualized adjusted NII Return on Equity (ROE) was 13.6% for the second quarter[9] Portfolio Composition - The total portfolio fair value is $1.8 billion, diversified across 153 portfolio companies[9] - 89.4% of the portfolio is invested in senior secured debt, with 82.4% in 1st lien[9] - The weighted average yield of the performing debt portfolio is 12.0%[9] - Non-accruals declined to 3.7% of the portfolio at fair value in Q2 2025[52] Leverage and Liquidity - The company has a diverse leverage program totaling $1.6 billion[9] - 63% of the outstanding leverage is unsecured as of June 30, 2025[9] - Available liquidity is $565.5 million, including $455 million of available borrowing capacity[9]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 2024 was $6,200,000 or $0.29 per share, a slight decrease from $6,600,000 or $0.31 per share in the previous quarter [4][17] - NAV as of 12/31/2024 was $191,800,000 or $8.85 per share, down from $198,900,000 or $9.18 per share as of 09/30/2024, representing a 3.6% decline [4][18] - The weighted average effective yield on the portfolio's debt and preferred equity was 10.2%, down from 11% in the previous quarter [18] Business Line Data and Key Metrics Changes - The investment portfolio totaled $457,000,000 at year-end, a decrease from $474,300,000 at the end of the previous quarter, consisting of debt and equity investments in 91 portfolio companies, down from 94 [12] - In 2024, the company invested $30,400,000 in seven new portfolio companies and $57,600,000 in existing portfolio companies [14] - Total investment income for Q4 2024 was $14,000,000, down from $15,700,000 in Q3 2024, primarily due to a decline in interest rates [20] Market Data and Key Metrics Changes - Middle market direct lending M&A volumes in Q4 2024 were the strongest since Q4 2021, leading to an 85% year-over-year increase in sponsored direct lending volumes for 2024 [12][13] - Private credit middle market deal issuance was 2.9 times greater than syndicated deal lending in 2024, with delayed draw term loan fundings 2.4 times greater than in 2023 [13] Company Strategy and Development Direction - The company plans to focus on growing the portfolio and addressing legacy portfolio issues, indicating a shift towards more offensive strategies in 2025 [30][31] - The strategic partnership with the Wendell Group is expected to close in Q1 2025, with Wendell committing $1,000,000,000 of new seed capital to support investment strategies [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the favorable market outlook and the potential for a sustainable deal environment throughout 2025, driven by lower interest rates and increased M&A activity [8][9] - The company is committed to maintaining a predominantly first lien portfolio and leveraging its credit experience and rigorous underwriting standards [26] Other Important Information - The company reported a net loss on the portfolio for Q4 2024 of $7,700,000, primarily due to unrealized mark-to-market losses [23] - Total expenses for Q4 2024 were $8,000,000, down from $9,200,000 in Q3 2024, mainly due to lower interest and debt financing expenses [22] Q&A Session Summary Question: Strategy to grow earnings and portfolio given recent contractions - Management indicated plans to clean up legacy portfolio issues and is hopeful for growth in 2025 [30][31] Question: Resolution of long-standing non-accrual investments - Management is actively working on non-accrual investments and hopes to make progress in 2025 [33][34] Question: Consideration of swapping bank credit facilities for other debt structures - Management acknowledged the consideration but emphasized strong interest from financial institutions in providing capital for diversified middle market portfolios [36][40]