Financial Performance - Adjusted net investment income per share remained solid at $0.39, resulting in an adjusted NII ROE of 10.4%[10] - Adjusted earnings per share were $0.36, translating to an adjusted ROE of 9.6%[10] - The company declared a quarterly base distribution of $0.39 per share for FY 2026 Q1, with distribution coverage remaining strong at approximately 100%[10] - Net asset value decreased slightly to $14.97 per share, a decrease of $0.03 from the previous quarter[10] Portfolio & Credit Quality - The investment portfolio at fair value totaled $8.8 billion, with $370.8 million in exits/sales and $86.5 million in new investment commitments[10] - Approximately 90% of the total investment portfolio maintained internal performance ratings of '4' or '5', indicating continued strong portfolio company performance[10, 42] - Non-accrual investments decreased to 0.3% of total investments at fair value (0.6% at cost)[10] Balance Sheet & Liquidity - The GAAP debt-to-equity ratio, net, decreased to 1.23x[10] - The weighted average cost of debt was 5.6%[10] - Total available liquidity stood at $1.2 billion[10] Capital Allocation - The company repurchased 0.4 million shares for $5.2 million at an average price of $14.02 per share, representing 94% of net asset value[10]

Core Insights - The article focuses on Golub Capital BDC (GBDC), a business development company that has been underperforming in the market [1]. Group 1: Company Overview - Golub Capital BDC is highlighted as a "beaten-down" business development company, indicating potential investment opportunities due to its current valuation [1]. Group 2: Investment Strategy - The article mentions the investment approach of Denislav Iliev, who leads a team of analysts identifying mispriced investments in fixed-income and closed-end funds [1]. - The service provided by Denislav's group includes frequent picks for mispriced preferred stocks and baby bonds, along with weekly reviews of over 1200 equities [1].

Financial Performance - GAAP net investment income was $041 per share, and adjusted net investment income was $040 per share for the quarter ended September 30, 2025[7] - A quarterly cash distribution of $040 per share was declared[7] - NAV was $1664 per share, a slight decrease from $1676 per share in the previous quarter[7] Portfolio and Investment Activity - The portfolio's fair value was $28 billion across 143 portfolio companies[7] - The weighted average yield on debt investments was 98%[7] - 86% of the portfolio was senior secured debt, with 83% in first lien loans[7] - 91% of the debt portfolio was floating rate[7] - New investment commitments totaled $208 million, with $220 million in new investment fundings[7] - Proceeds from prepayments, exits, and sales amounted to $177 million[7] - The weighted average yield on new debt commitments was 97%[7, 15] Liquidity and Capital Structure - The net debt to equity ratio was 097x, up from 093x in the prior quarter[7] - Available liquidity was $695 million, including $80 million in cash and $615 million of undrawn capacity on the credit facility[7] - The weighted average interest rate on debt outstanding was 65%, inclusive of interest rate swaps[7]

Financial Data and Key Metrics Changes - Fundings for the last quarter totaled $126.6 million, with net originations at $103.1 million, while exits and prepayments declined to $23.5 million [3][4] - Interest income rose 14% to $23.8 million, driven by a 16.2% increase in average earning assets, although the weighted average portfolio yield declined by 30 basis points to 12.5% [3][8] - Net investment income for the period was $11.4 million, with net realized losses of $6.3 million related to the exit of FES Resources [4][8] - Total assets increased to $908 million, with net assets rising to $482 million, and NAV per share increased from $21.25 to $21.34 [9][10] Business Line Data and Key Metrics Changes - The portfolio turnover did not materially impact the investment mix, with first lien debt rising to 72% of the portfolio's fair value [4] - PIC income increased to $2 million, representing 8.4% of interest income, attributed to two recent investments [5] Market Data and Key Metrics Changes - The company experienced a significant increase in fair value of the investment portfolio by $63 million for the fiscal year, despite challenges faced [5][6] - The company maintained a conservative leverage position with net debt at 82.5% of NAV [7] Company Strategy and Development Direction - The company continues to focus on investing in growth-oriented lower middle market businesses, leveraging relationships with private equity sponsors [12][13] - The strategy includes providing attractive financing solutions to the private equity market, with expectations of continued growth in the lower middle market [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the lower middle market's resilience against spread erosion and leverage escalation [6] - The company is well-positioned for future growth, with a healthy pipeline of investment opportunities and a strong balance sheet [12] Other Important Information - Monthly distributions for November and December will be $0.15 per common share, with an annual run rate of $1.80 per share [10][11] - The company has refinanced its debt, enhancing financial flexibility and maturity profile [7][12] Q&A Session Summary Question: Update on the pipeline and mix of new versus add-on opportunities - The company is tracking approximately $100 million of potential volume, with a mix of new and follow-on acquisition opportunities [16][18] Question: Decline in portfolio yield - The decline was primarily due to lower base rates, with new deals still maintaining attractive spreads [21][22] Question: Consideration of share repurchases - The company is tempted to consider share repurchases given the current stock price and low leverage [30] Question: Dividend reduction rationale - The reduction was a proactive measure to maintain financial health amid potential rate compressions [34][36] Question: Outlook for elevated repayment activity - Management believes that while some repayments may continue, the maturity of investments and extended hold periods will mitigate risks [42][44] Question: Credit concerns in the portfolio - No new non-accruals were reported, and while some assets are being monitored, the overall credit position remains strong [45][46]

Core Insights - FS KKR Capital Corp. (NYSE:FSK) is recognized among the 15 stocks with the highest dividend yields for investment opportunities [1] - Truist has maintained a Hold rating on FSK while lowering its price target from $19 to $17, reflecting updated forecasts based on Q3 results [2] - The company reported an Adjusted Net Investment Income of $0.57 per share for Q3, with a Net Asset Value per share increasing to $21.99 [3] Financial Performance - FS KKR Capital generated $0.57 per share of Adjusted Net Investment Income in Q3 [3] - The Net Asset Value per share rose to $21.99, indicating a positive trend in asset valuation [3] - The firm has projected an annualized yield of approximately 10% on its 2026 quarterly distribution plan, aligning with the BDC industry's long-term yield expectations of 9% to 10% [3] Strategic Actions - Daniel Pietrzak, President and Chief Investment Officer, reported a 30% year-over-year increase in evaluated deals, attributed to strong M&A activity and a robust labor market [4] - Notable portfolio actions included the restructuring of Production Resource Group (PRG) and the full repayment of the Callodine Commercial Finance investment, which achieved a 13.3% internal rate of return [4] Company Overview - FS KKR Capital Corp. is a leading publicly traded business development company that focuses on providing tailored credit solutions to private middle-market companies in the US [5]

Core Insights - Current dividends for many Business Development Companies (BDCs) are under scrutiny, with a notable decline in the BDC index (BIZD) [1] Group 1: Industry Overview - The BDC index has experienced a decline, indicating potential challenges within the sector [1] Group 2: Analyst Background - Roberts Berzins has over a decade of experience in financial management, focusing on corporate financial strategies and large-scale financings [1] - He has contributed to the institutionalization of the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [1] - His work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [1]

Core Insights - The business development sector is currently facing challenges, highlighting both strengths and weaknesses within the industry [1] - Some Business Development Companies (BDCs) are struggling to achieve positive earnings growth and maintain payouts, while others demonstrate resilience [1] - The Blackstone Secured Lending Fund is identified as a more resilient player in the sector [1] Investment Strategy - A hybrid investment strategy combining classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds can enhance investment income while achieving total returns comparable to traditional index funds [1] - This approach aims to balance growth and income, providing a robust framework for long-term investment success [1]

Financial Data and Key Metrics Changes - Net investment income per share was $0.42 for Q3 2025, up from $0.34 in Q2 2025, indicating a 23.5% increase [10] - Gross investment income totaled $15.1 million for Q3 2025, compared to $13.1 million in Q2 2025 [10] - Net assets reached $302.9 million at quarter end, with net asset value per share increasing to $13.27 from $13.23 in Q2 2025 [11] Business Line Data and Key Metrics Changes - The company funded $66.7 million to 13 new investments in Q3 2025, setting a new record for originations [4][12] - 24% of the portfolio is invested in non-cannabis companies across multiple sectors, with 69% of the portfolio having floating interest rates [9] - The gross weighted average yield on the credit investment portfolio was approximately 15.8% [10] Market Data and Key Metrics Changes - The company has approximately $610 million in potential debt transactions in its pipeline, with $415 million in cannabis opportunities and $195 million in non-cannabis investments [13] - As of November 12, 2025, the company had approximately $97.8 million in liquidity, providing ample capacity for further investments [10] Company Strategy and Development Direction - The company focuses on lending to cannabis companies and the lower-middle market, which is often underserved by capital providers, creating unique credit opportunities [4] - The investment strategy emphasizes no overlap with other public BDCs, allowing for a differentiated portfolio [6][14] - The company aims to maintain a high bar for underwriting and structuring investments to ensure above-market risk-adjusted returns [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the cannabis industry, noting that it is not a monolith and varies significantly across jurisdictions [19] - The closing of the hemp-related loophole is expected to support state-regulated markets and positively impact borrowers [23][24] - The company remains disciplined in its approach to lending, focusing on building strong relationships and maintaining a broad pipeline [20] Other Important Information - The company announced a $0.34 dividend, marking the fifth consecutive quarter at that rate, which is well covered by net investment income [8] - The portfolio is under-levered, with only $11 million of debt outstanding, compared to the BDC average of 1.2 times debt to equity [8] Q&A Session Summary Question: Were the loan repayments in line with expectations, and how does the company view the cannabis industry outlook? - Management noted that while there were more repayments than expected, it did not impact deployment pace due to a strong pipeline built over time [18] - The company maintains a constructive view of the cannabis industry, recognizing its complexity across different jurisdictions [19] Question: How does the company view the potential impact of the hemp derivatives industry on cannabis players? - Management believes that closing the hemp-related loophole will support state-regulated markets and benefit borrowers, despite some negative aspects [23][24] Question: What is the company's perspective on uncertain tax liabilities and their impact on borrowers? - The company views uncertain tax liabilities as a liability that must be paid and aims to limit such liabilities in loan documents to reduce risk [27] Question: How does the company manage the risks associated with lending to smaller private companies? - Management highlighted that lending to smaller companies allows for greater negotiation power and downside protection, balancing risk with strong portfolio monitoring [29]

Core Insights - Chicago Atlantic BDC, Inc. reported strong financial results for Q3 2025, highlighting its differentiated strategy and robust portfolio management amidst industry challenges [1][3]. Financial Performance - Total investment income for Q3 2025 was approximately $15.1 million, with interest income contributing $13.8 million [5][7]. - The company incurred net expenses of approximately $5.6 million, resulting in net investment income of approximately $9.5 million, or $0.42 per weighted average share [5][21]. - The net increase in net assets from operations was approximately $8.8 million, or $0.39 per weighted average share [5][21]. Portfolio and Investment Activity - The investment portfolio had an aggregate fair value of approximately $311.4 million across 37 portfolio companies as of September 30, 2025 [8][19]. - During Q3 2025, the company funded eleven portfolio companies with an aggregate par value of $66.3 million, including seven new borrowers [8][21]. - There were no loans on non-accrual status as of September 30, 2025, indicating strong credit quality [8][3]. Liquidity and Capital Resources - As of September 30, 2025, the company had $99.5 million in liquidity, including $10.5 million in cash and cash equivalents [6][19]. - The company had $11 million outstanding on its $100 million senior credit facility, with $7.5 million outstanding as of November 12, 2025 [6][19]. Net Asset Value and Dividends - The net asset value (NAV) per share increased to $13.27 as of September 30, 2025, compared to $13.23 as of June 30, 2025 [9][19]. - The Board of Directors declared a cash dividend of $0.34 per share for the quarter ending December 31, 2025, payable on January 15, 2026 [10][21].

Core Points - Chicago Atlantic BDC, Inc. has declared a cash dividend of $0.34 per share for the quarter ending December 31, 2025 [1] - The record date for the dividend is December 31, 2025, and the payment date is January 15, 2026 [1] - The company has a dividend reinvestment plan (DRIP) that allows stockholders to reinvest dividends unless they opt to receive cash [1] Company Overview - Chicago Atlantic BDC, Inc. is a specialty finance company regulated as a business development company under the Investment Company Act of 1940 [2] - The company's investment objective is to maximize risk-adjusted returns on equity by primarily investing in direct loans to privately held middle-market companies, focusing on the cannabis sector [2] - The company is managed by Chicago Atlantic BDC Advisers, LLC, which specializes in the cannabis industry and other niche sectors [2]