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]