Financial Data and Key Metrics Changes - For the quarter ended June 30, core net investment income was $0.27 per share, while GAAP net investment income was $0.25 per share [5][17] - As of June 30, net asset value (NAV) was $10.96 per share, down 1% from $11.07 per share in the prior quarter [17] - The debt to equity ratio was 1.3 times, indicating a diversified capital structure across multiple funding sources [17] Business Line Data and Key Metrics Changes - The portfolio grew to $2.4 billion, up from $2.3 billion in the prior quarter, with a weighted average yield on debt investments of 10.4% [12][18] - The portfolio comprised 90% first lien senior secured debt, with only 1% in subordinated debt and 2% in equity of PSSL [18] - The weighted average debt to EBITDA for new platform investments was 3.8 times, with an interest coverage ratio of 2.6 times [8][19] Market Data and Key Metrics Changes - The company noted a rebound in deal activity, which is expected to lead to increased loan originations in the second half of 2025 [4][6] - The pricing on high-quality first lien term loans in the core middle market is over plus $4.75 to $5.25, with meaningful covenant protections [7][10] Company Strategy and Development Direction - The company formed a new joint venture with Hamilton Lane, committing $200 million in capital, with an expected total portfolio of $500 million [6][14] - The focus remains on capital preservation and finding investment opportunities in growing middle market companies with high free cash flow conversion [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong outlook for the remainder of the year, anticipating continued net investment income growth and full dividend coverage [6][36] - Credit quality remains strong, with a low nonaccrual rate of 1% at cost and 0.5% at market value [8][18] Other Important Information - The company raised $32 million from the issuance of 2.8 million shares at an average price of $11.31 per share during the quarter [13] - The PSSL joint venture portfolio totaled $1.1 billion, with plans to grow to $1.4 billion [14] Q&A Session Summary Question: How much of the $500 million could be deployed over the next few quarters? - Management anticipates a ramp-up period of 12 to 18 months for deploying the capital, with potential for growth beyond the initial amount [23][24] Question: What are the long-term growth plans for PFLT and PNNT? - Management emphasized that growth will be organic based on market opportunities, with the potential for future mergers always on the table [28][30] Question: What is the timing for net investment income to fully cover the dividend? - Management identified three levers for NII growth: increasing leverage to target ratios, filling out the PSSL joint venture, and ramping up the new Hamilton Lane JV [33][35] Question: What is the current state of EBITDA growth at the portfolio company level? - EBITDA growth is generally in the mid to upper single digits, with low nonaccruals and maintained leverage levels [36][38] Question: Will the high level of unrestricted cash be directed towards the JV? - Some of the unrestricted cash will be used for the JV, but it also reflects timing from cash management [41] Question: Is there expected to be improved loan pricing power? - Management hopes to maintain or expand loan spreads due to increased supply, while prioritizing credit quality [42][44] Question: Is there a mix shift in the pipeline regarding industries or borrowers? - Recently, there has been an increase in new platforms coming to the company, with a focus on incumbency and add-on loans [48][51]

Financial Data and Key Metrics Changes - Adjusted net investment income for the quarter was $0.32 per share, covering the $0.32 per share dividend paid on June 30 [5] - Net asset value per share declined by $0.24 to $12.21 compared to Q1 [5][16] - Total investment income for the quarter was $83 million, a 12% decrease over the prior year [29] Business Line Data and Key Metrics Changes - The portfolio loan-to-value ratio stands at 45%, with nearly 80% exposure to senior-oriented assets [6][25] - The average yield of NMFC's portfolio decreased slightly to 10.6% for Q2 [25] - In Q2, the company originated $122 million of assets, offset by $155 million of repayments and sales [18] Market Data and Key Metrics Changes - The company noted a stabilization in direct lending spreads, with most unitranche loans pricing at SOFR plus $4.75 to $5.25 [21] - Approximately 78% of investments are senior in nature, up from 75% in the prior year [24] - The weighted average EBITDA of portfolio companies increased slightly to $176 million [25] Company Strategy and Development Direction - The company focuses on improving the quality and diversity of its asset base and optimizing liabilities with low-cost floating rate debt [13] - NMFC is committed to its dividend protection program through 2026, which aims to stabilize dividends during tighter market conditions [7][48] - The company is actively working on refinancing its 7.5% convertible notes and 8.25% unsecured notes maturing in Q4 [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for deal flow to normalize as market conditions improve [8][20] - The company is focused on optimizing leverage and enhancing income quality, with expectations for increased portfolio activity in Q3 and Q4 [49] - Management acknowledged challenges in certain sectors, particularly in dental and consumer products, but remains positive about overall portfolio performance [15][60] Other Important Information - NMFC has repurchased approximately $16 million of shares year-to-date, with an additional $31 million of Board authorization remaining [9] - The company has maintained a strong credit performance with only $38 million or 1.2% of the portfolio on non-accrual [18] Q&A Session Summary Question: Concerns about healthcare names and industry headwinds - Management noted that while the dental downgrade was idiosyncratic, the sector has good secular tailwinds, but operational execution is critical [42][44] Question: Dividend protection program and future outlook - The dividend protection program is designed to provide visibility and support to shareholders, with management committed to maintaining it through 2026 [48][51] Question: Risks related to tariff exposure in consumer products - Management confirmed that the consumer products business had been flagged for tariff exposure, and while it was already underperforming, tariffs exacerbated the situation [56][60] Question: Trends in the education space and Edmentum's performance - Management indicated that Edmentum remains well-positioned to address learning loss post-COVID, despite some capital structure challenges [70][72]

Financial Data and Key Metrics Changes - Adjusted net investment income was $0.36 per share, flat compared to the prior quarter [7] - Annualized net investment income ROE was 15.4% and net asset value per share was $9.18, down from $9.23 in the previous quarter [8] - Net realized losses for the quarter were approximately $41 million or $0.48 per share, primarily due to the disposition of investments [24] - Net unrealized gains totaled $30 million or $0.35 per share, reflecting reversals of previous losses [24] Business Line Data and Key Metrics Changes - The portfolio had a fair market value of approximately $1.8 billion, invested across 146 companies [16] - 90% of the portfolio was invested in senior secured debt, with a weighted average annual effective yield of 12.2%, down from 12.4% in the previous quarter [17] - New investments had a weighted average yield of 11.4%, while exited investments had a yield of 11.2% [17] Market Data and Key Metrics Changes - The company estimates that only a mid-single-digit percentage of the portfolio at fair market value will be directly impacted by tariffs [30] - The middle market is identified as the fastest-growing sector of the economy, with over 200,000 companies generating more than $10 trillion in annual revenue [31] Company Strategy and Development Direction - The company is focused on investing in first lien loans and maintaining a well-diversified portfolio [20] - Plans to refinance the next major debt maturity in 2026 are underway, with a goal to access attractively priced capital [28] - The company aims to resolve remaining challenged positions within the portfolio while maintaining a disciplined approach to originating loans [33] Management's Comments on Operating Environment and Future Outlook - The current market environment is characterized by tightened access to capital and higher financing costs [29] - The company remains optimistic about the prospects for portfolio companies, particularly those in the middle market, which are seen as resilient [32] - Management is closely monitoring portfolio companies to assess potential impacts from the current environment [33] Other Important Information - The Board declared a second quarter dividend of $0.25 and a special dividend of $0.04 per share [14] - The company repurchased 3,150 shares of TCP stock during the quarter and an additional 39,500 shares after the quarter end [14] Q&A Session Summary Question: Thoughts on the trajectory of share repurchases - The company will continue to monitor trading prices and repurchase shares when they are deemed accretive [38] Question: Do most portfolio companies have sponsors? - The majority of portfolio companies have sponsors or institutional ownership, but decision-making often involves management teams [40] Question: Timeline for restructuring aggregator businesses - The company expects to complete restructurings in the next few quarters, with some positive signs of improvement [50] Question: Changes in deal types going forward - The company plans to focus on being the dominant lender in deals, avoiding situations where they cannot exercise influence [56] Question: Details on the job and talent markup - The markup was driven by improved performance and the provision of growth capital, with confidentiality around specific deal terms [62] Question: Pursuing new SBIC licenses - The company is in the process of obtaining a second SBIC license, with no significant changes to the expected timeline [67]