Financial Data and Key Metrics Changes - For the quarter ended March 31, GAAP net investment income was $0.28 per share, and core net investment income was also $0.28 per share. Adjusted for additional shares issued, core NII would have been $0.30 per share [24] - As of March 31, NAV was $11.7 per share, down 2.4% from $11.34 per share last quarter [24] - The portfolio grew to $2.3 billion, up 7% from the prior quarter [18] Business Line Data and Key Metrics Changes - During the quarter, the company invested $293 million in three new and 54 existing portfolio companies at a weighted average yield of 9.9% [18] - The weighted average debt to EBITDA for new investments was 4.3 times, with an interest coverage of 2.3 times and a loan to value of 39% [10] - The portfolio remains highly diversified with 159 companies across 49 different industries, and the weighted average yield on debt investments was 10.5% [26] Market Data and Key Metrics Changes - Approximately 80% of originations came from existing borrowers, while 20% were from new platform investments [7] - The pricing on first lien term loans appears to have stabilized in the SERFR plus 500 to $5.50 range for high-quality assets [10] - The debt to equity ratio was 1.3 times as of March 31 [25] Company Strategy and Development Direction - The company focuses on the core middle market, providing strategic capital to borrowers in five key sectors: business services, consumer, government services and defense, healthcare, and software and technology [12] - The company aims to preserve capital while seeking investment opportunities in growing middle market companies with high free cash flow conversion [22] - The company has raised significant equity capital through its ATM program, totaling $163 million during the quarter [21] Management's Comments on Operating Environment and Future Outlook - Management noted that despite market volatility, the company had a solid quarter and expects to ramp up portfolio activity in the coming months [6][7] - The management believes that the current vintage of core middle market loans is excellent, with strong credit quality and limited exposure to tariffs [11][12] - The company anticipates that the uncertainty surrounding tariffs needs to be resolved for M&A activity to pick up [34] Other Important Information - The company has taken significant steps to strengthen its balance sheet, increasing total leverage by $750 million over the last twelve months [18] - The company closed on a new $361 million securitization financing with a weighted average spread of 1.59% [19] - Nonaccruals represent only 2.2% of the portfolio at cost and 1.2% at market value, which improved to 1% at cost and 0.5% at market value after the quarter [14][27] Q&A Session Summary Question: On the equity raising during the quarter, was this a long-term capital build or an increase in pipeline activity? - Management indicated that the capital raised was to prepare for a robust 2025, despite a slowdown in activity due to recent market events [29] Question: What is necessary to unlock new M&A activity in the market? - Management stated that certainty in tariffs and a stable environment are needed to encourage decision-making and M&A activity [34] Question: How much of the activity with existing borrowers is repricing versus growth capital? - Management noted that most activity is from existing platforms growing, with repricing having ended due to market changes [40] Question: How does the company view tariff sensitivity for its portfolio versus larger businesses? - Management emphasized that most sectors in their portfolio are not significantly impacted by tariffs, with limited exposure [45] Question: How does the company plan to deploy additional equity into the senior loan fund? - Management expects to deploy excess capital within a six to twelve-month timeframe, depending on market conditions [52] Question: What are the long-term opportunities for growing the joint venture or adding partners? - Management expressed interest in potentially adding another JV partner over time, depending on finding the right fit [56]

Financial Data and Key Metrics Changes - The company reported net investment income of $32.4 million, a 29% increase compared to Q1 of the previous year [5] - Total investment income reached $65 million, marking a 30% increase year-over-year [15] - The effective yield on the portfolio was 15.3%, while the core yield was 14.1% [15] - The net asset value (NAV) grew to $833 million from $823 million at the end of the previous quarter, although NAV per share decreased from $13.35 to $13.05 [18] Business Line Data and Key Metrics Changes - The portfolio consisted of approximately 75% secured loans, 19% equipment financing, 4% equity, and 2% warrants [24] - Funding breakdown for Q1 included 38% to equipment financing, 29% to life sciences, 18% to sponsor finance, 10% to tech lending, and 5% to asset-based lending [25] - The credit quality remained strong, with approximately 99.1% of the portfolio performing on a fair value basis [26] Market Data and Key Metrics Changes - The company has $623 million in unfunded commitments, indicating a strong investment pipeline [13] - The largest industry exposure was finance and insurance at 16.9%, followed by medical devices at 12.3% [24] Company Strategy and Development Direction - The company is focused on building a resilient asset management business with five complementary business verticals [9] - An internally managed structure aligns the interests of employees and management with shareholders [10] - The company aims to capitalize on new opportunities in the private credit space, particularly in late-stage VC and lower middle market [11] Management's Comments on Operating Environment and Future Outlook - Management is closely monitoring macroeconomic conditions, including tariff impacts, and has found limited exposure among portfolio companies [6][23] - The company is optimistic about future growth, citing a strong investment pipeline and a recent investment-grade rating from Moody's [12][20] - Management emphasized the importance of credit quality and portfolio management in navigating market volatility [28] Other Important Information - The company raised $31 million from its equity ATM program and $4 million from its net debt ATM program during the quarter [20] - The company has no further debt obligations due until August 2026 following the repayment of convertible notes [19] Q&A Session Summary Question: Why did interest income drop despite a net increase in portfolio investments? - Management attributed the drop to the effects of prior rate cuts and a decrease in early repayments [30][31] Question: Will commitments increase in Q2? - Management indicated that while commitments were down in Q1 due to a defensive stance, they expect to see a robust pipeline and potential increases in commitments moving forward [44][46] Question: What is the impact of tariffs on the medical devices sector? - Management reported low tariff impact on the life sciences portfolio, with no alarming findings from their investigations [35][36] Question: How does the company view lower yields in the portfolio? - Management noted that the decrease in yield is primarily due to rate changes and a strategic shift towards more mature sponsor finance businesses [60] Question: How committed is the company to maintaining or increasing dividends? - Management expressed a strong commitment to maintaining and potentially increasing dividends, focusing on building NAV and ensuring coverage [70][72]

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]

Core Viewpoint - Nuveen Churchill Direct Lending (NCDL) is a notable player in the Business Development Company (BDC) sector, although less recognized compared to Blackstone Secured Lending Fund (BXSL) and Morgan Stanley Direct Lending Fund (MSDL) [1] Company Insights - NCDL is positioned as a viable investment option within the BDC landscape, emphasizing its potential for steady income through dividend investing [1] - The article highlights the author's extensive experience in M&A and business valuation, indicating a strong foundation for evaluating companies like NCDL [1] Investment Philosophy - The focus on dividend investing is presented as an accessible path to financial freedom, with the author sharing insights to help others navigate this investment strategy [1] - The article aims to demystify the process of dividend investing, making it more approachable for individuals seeking to build long-term wealth [1]

Group 1 - Nuveen Churchill Direct Lending Corp. (NYSE: NCDL) is one of six Business Development Companies (BDCs) currently held in the portfolio alongside other high-quality names such as Morgan Stanley Direct Lending Fund (MSDL) [1] - Roberts Berzins has over a decade of experience in financial management, assisting top-tier corporates in shaping financial strategies and executing large-scale financings [1] - Berzins has contributed to institutionalizing the REIT framework in Latvia to enhance the liquidity of pan-Baltic capital markets [1] Group 2 - Berzins has been involved in policy-level work, including the development of national State-Owned Enterprise (SOE) financing guidelines and frameworks for channeling private capital into affordable housing [1] - Berzins holds a CFA Charter and an ESG investing certificate, and has interned at the Chicago Board of Trade while residing in Latvia [1] - He is actively engaged in thought-leadership activities to support the development of pan-Baltic capital markets [1]

Financial Performance - The company's net investment income per share was $0.57 in Q4 2024, compared to $0.66 in Q3 2024[23] - Earnings per share was $0.58 in Q4 2024, compared to $0.60 in Q3 2024[23] - Net asset value per share was $20.81 as of Q4 2024, slightly down from $20.83 in Q3 2024[23] - The company declared dividends of $0.60 per share for Q4 2024, including a regular dividend of $0.50 and a special dividend of $0.10[23] Portfolio Composition and Activity - The total fair value of the portfolio was approximately $3.8 billion, invested in 208 portfolio companies across 33 industries[23] - The weighted average yield at amortized cost of debt investments was 10.4%[23] - The company committed $188.3 million to new investments during Q4 2024, resulting in a net funded portfolio increase of $143.7 million[23] - Approximately 100% of new investment commitments were in first lien senior secured loans[23] - 96.5% of the portfolio consists of first lien investments[16] - 99.6% of the portfolio consists of floating rate loans[16] Debt and Liquidity - The outstanding debt balance was $1,983.4 million, with 53% unsecured debt; the quarter-end debt-to-equity ratio was 1.08x[23] - The company had total liquidity of $1,035.2 million, including unrestricted cash and cash equivalents of $70.4 million and undrawn, committed debt capacity of $964.8 million[23]

Financial Data and Key Metrics Changes - Full year 2024 adjusted net investment income was $1.52 per share, down from $1.84 per share in 2023, with an annualized net investment income ROE of 14.5% [10] - Fourth quarter adjusted net investment income per share was flat at $0.36 compared to the previous quarter [11] - NAV per share decreased to $9.23 from $10.11, reflecting markdowns in the investment portfolio [11][12] - Non-accruals represented 5.6% of the portfolio at fair market value, up from 3.8% in the previous quarter [11] Business Line Data and Key Metrics Changes - The portfolio had a fair market value of approximately $1.8 billion invested across 154 companies, with 91.2% in senior secured loans [30] - The weighted average effective yield of the portfolio decreased to 12.4% from 13.4% in the previous quarter [31] - New investments had a weighted average yield of 10.8%, while exited investments had a yield of 14% [32] Market Data and Key Metrics Changes - The overall M&A volumes remained below expectations, but there was a healthy flow of new investment opportunities [33][39] - The market is experiencing tighter spreads due to increased competition between private credit and traditional lending sources [41] Company Strategy and Development Direction - The company plans to focus on the core middle market with a proactive approach to sourcing and underwriting [24] - A highly diversified portfolio will be maintained, limiting exposure to specific industry subsectors [26] - The company will prioritize investing in first lien loans and deepen connections with the broader BlackRock platform for competitive advantage [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about navigating challenges in 2024 and returning to historical above-market returns [10] - The company is focused on resolving credit issues with borrowers and sponsors, emphasizing that quick resolutions may not always yield the best results for shareholders [12][13] - The management team is confident in their ability to work through current challenges and return the portfolio to historical performance levels [29] Other Important Information - The Board decided to reduce the regular dividend to $0.25 per share for the first quarter, while also declaring a $0.04 special dividend [20][21] - The advisor agreed to waive one-third of the base management fee for three quarters beginning January 1, 2025 [22] Q&A Session Summary Question: Can you provide details on the spillover and target level for dividends? - The company has about $0.10 of carryover from the prior quarter and aims for a sustainable regular dividend level based on current earnings power [54][55] Question: Will there be any strategic changes due to the BlackRock HPS acquisition? - Management does not expect meaningful changes and emphasizes a focus on business as usual, while highlighting expanded resources from the acquisition [58][60] Question: What level of confidence is there regarding write-downs in the portfolio? - Management is focused on managing existing non-accruals and acknowledges that while there may be ongoing markdowns, they are largely centered around known assets [67][70] Question: What are the risks associated with the new non-accrual, Renovo? - The underlying issues are related to inflation and consumer appetite, but operational execution issues are also present, which are considered easier to address [74][75] Question: Is the management fee waiver related to the HPS acquisition timing? - Management clarified that the fee waiver is a thoughtful approach to acknowledge NAV decline and is not specifically timed with the HPS acquisition [79] Question: What steps are being taken to maintain investment grade rating ahead of the 2026 debt maturity? - The company is focused on maintaining its investment grade rating and plans to access capital markets closer to the maturity date [85][88]

Financial Data and Key Metrics Changes - Adjusted net investment income for Q4 was $0.32 per share, covering the regular dividend of $0.32 per share paid on December 31 [8] - Net asset value per share declined to $12.55, a decrease of $0.07 or 0.6% from the previous quarter [8][26] - Total investment income for Q4 was $91 million, a 2% decrease year-over-year, while total net expenses decreased by 9% to $57 million [49] Business Line Data and Key Metrics Changes - The portfolio had over $3 billion of investments at fair value, with total assets of $3.2 billion and total liabilities of $2 billion [47] - Approximately 75% of investments are senior in nature, with second lien positions representing just 7% of the portfolio, down from 8% last quarter [40] - The average yield of NMFC's portfolio increased to 11% for Q4, primarily due to the higher for longer shift in the forward SOFR curve [42] Market Data and Key Metrics Changes - The NMFC loan portfolio is 86% floating rate and 14% fixed rate, while liabilities are 49% floating and 51% fixed rate [36] - The weighted average EBITDA of borrowers decreased slightly to $184 million, with portfolio company leverage coming down slightly [43] Company Strategy and Development Direction - The company aims to maintain or increase its heavily senior-oriented asset mix, focusing on first lien and unitranche loans [20] - NMFC seeks to optimize the cost, duration, and quality of its liabilities, targeting a floating rate liability mix of approximately 75% over the next twelve months [23][56] - The company continues to focus on defensive growth sectors, avoiding cyclical and volatile industries [16] Management's Comments on Operating Environment and Future Outlook - Management believes that direct lending remains an attractive asset class despite a slower start to 2025 [32] - There is an expectation of increased M&A activity in 2025, driven by private equity dry powder and attractive financing markets [34] - Credit selection remains critical in a backdrop of volatility and uncertainty across political and regulatory headlines [35] Other Important Information - The company has never had a bankruptcy or missed an interest payment, managing over $55 billion of assets [12] - NMFC has experienced only 12 basis points of average annualized net realized losses since its IPO [12] Q&A Session Summary Question: How does the enterprise value of UniTek compare to the Q4 mark? - The enterprise value is modestly higher than the Q4 mark [62] Question: How comfortable is the company about UniTek and lowering PIK exposure? - The company feels good about UniTek and expects to show progress in reducing PIK positions [66] Question: Will the mix between senior loans, loan funds, and net lease remain the same? - The expectation is that the mix will stay the same [68] Question: Are market spreads expected to stabilize or recalibrate? - Spreads have stabilized, and the company expects them to pick up if M&A activity increases [71] Question: How much of the portfolio is vulnerable to repricing activity? - The majority of deals that could reprice have already gone through that exercise [73]

Financial Data and Key Metrics Changes - In 2024, the company reduced non-accrual investments by 58% to 3.7% on a cost basis and 2.2% on a fair value basis [11][25][26] - The net investment income for the fourth quarter was $0.61 per share, while adjusted net investment income was $0.66 per share, compared to guidance of approximately $0.63 and $0.68 per share respectively [16][37] - The weighted average yield on accruing debt investments decreased to 11% as of December 31, 2024, down from 11.5% as of September 30, 2024 [33] Business Line Data and Key Metrics Changes - The company originated $891 million of new investments in the fourth quarter, compared to $1.46 billion of exits [22] - New originations consisted of approximately 63% in first lien loans, 36% in asset-based finance investments, and 1% in equity or other investments [23] - The weighted average EBITDA of new direct lending investments was approximately $206 million, with a weighted average coupon of approximately SOFR plus 516 basis points [24] Market Data and Key Metrics Changes - The company reported a 12.1% yield on average net asset value for shareholders in 2024, with a total return of 23% [19] - Credit defaults remained largely contained across the industry, with borrowers continuing to generate revenue and earnings growth [21] - The company noted that the current macroeconomic environment is a balancing act between growth desires, inflationary pressures, and interest rate adjustments [20] Company Strategy and Development Direction - The company aims to improve credit quality and overall portfolio stability, maintain a strong balance sheet, and provide shareholders with an annual distribution of $2.80 per share [12][13][15] - The company plans to utilize its relationships to originate attractive investments and expects M&A activity to increase materially in 2025 and beyond [12][15] - The focus remains on senior secured investments, with approximately 58% of the portfolio in first lien loans as of December 31, 2024 [32] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the timing of increased M&A activity, suggesting it may take longer to materialize than some industry observers forecast [20] - The company remains optimistic about the direct lending market fundamentals, citing strong tailwinds and reduced interest burdens for portfolio companies [21] - Management highlighted the importance of maintaining discipline in origination, even if it means passing on certain transactions [12] Other Important Information - The company issued $700 million of unsecured notes due in 2030 during the fourth quarter, which were swapped to floating rates [39] - As of December 31, 2024, the investment portfolio had a fair value of $13.5 billion, consisting of 214 portfolio companies [31] - The company expects to provide total distributions of at least $2.80 per share in 2025, with a combination of base and supplemental distributions [38] Q&A Session Summary Question: Dividend outlook and spillover income - Management indicated confidence in the dividend outlook, noting that spillover income is a significant factor [43][44] - The base distribution is set at $0.64 per share, with a supplemental distribution of $0.06 per share [44][46] Question: Spread compression and risk - Management acknowledged spread compression across credit markets, with a current direct lending deal yielding around 5% before fees [48][49] Question: New originations and pipeline fill - Management noted that a few deals slipped from Q4 to Q1, impacting fee income, but the pipeline is filling with private equity sponsors looking to offload back books [55][60] Question: M&A activity and asset-backed finance outlook - Management characterized the asset-backed finance market as having significant activity, with a focus on proprietary origination angles [70][73] Question: Areas of concern in the portfolio - Management indicated that any issues observed have been idiosyncratic to specific issuers, with overall portfolio EBITDA growth at approximately 16% [74][76] Question: Fee income and repayment activity - Management expects a certain amount of additional repayments in Q1, with a better balance of new deals versus repayments anticipated [120]