Financial Data and Key Metrics Changes - For the full year 2025, adjusted net investment income (NII) was $1.22 per share, down from $1.52 in 2024 [4] - Annualized net asset income (NAI) return on equity (ROE) for the year was 12.3%, compared to 14.5% in 2024 [5] - Adjusted NAI for Q4 2025 was $0.25 per share, down from $0.30 in Q3 2025 and $0.36 in Q4 2024 [5] - Net asset value (NAV) declined 19% to $7.07 per share as of December 31, 2025, from $8.71 as of September 30, 2025 [6] Business Line Data and Key Metrics Changes - Non-accrual debt investments represented 4% of the portfolio at fair market value and 9.7% at cost, compared to 5.6% at fair market value and 14.4% at cost for Q4 2024 [6] - The portfolio had a fair market value of $1.5 billion invested across 141 companies, with 92.4% in senior secured loans [12] - The average size of new investments in 2025 was $5.8 million, down from $11.7 million at the end of 2024 [13] Market Data and Key Metrics Changes - The weighted average effective yield of the portfolio was 11.1%, down from 11.5% in the previous quarter [13] - Investments during Q4 had a weighted average yield of 9.7%, while exited investments had a yield of 11.1% [13] Company Strategy and Development Direction - The company aims to improve credit quality by focusing on first lien loans, which now account for 87.4% of the portfolio [24] - The strategy includes building a diversified portfolio to reduce concentration risk and leveraging BlackRock's resources [24][25] - The company is actively managing challenged investments to optimize recovery values [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged disappointing write-downs but emphasized ongoing efforts to manage the investment portfolio for attractive returns [22] - The company is monitoring the software sector for potential AI disruptions and is focusing on investments that can benefit from such changes [17] Other Important Information - The board declared a first-quarter dividend of $0.17 per share, payable on March 31, 2026 [11] - The company repurchased 515,869 shares during Q4 at an average price of $5.84 per share [11] Q&A Session Summary Question: At what point does it make sense to take more aggressive strategic adjustments? - Management believes the best path forward is to focus on improving credit quality and executing the current investment strategy, which includes increasing first lien loans and diversifying the portfolio [28][29] Question: How should investors view the restructuring of assets? - Management noted that restructurings can vary and that recovery is not always linear, emphasizing the importance of a robust process for managing challenged investments [32] Question: Was there a change in valuation procedures that led to the recent NAV drawdowns? - Management confirmed that there were no changes to the valuation policy and that the recent write-downs were concentrated among a few specific investments [36][39]