Financial Performance - The company generated net investment income of $0.39 per common share on a GAAP basis and after adjusting for asset acquisition accounting[10] - The company declared a quarterly dividend of $0.40 for 3Q25, equating to an annualized dividend yield of 9.7% on its NAV as of 06/30/25[10] - Total investment income increased to $67.281 million in Q2 2025 from $54.864 million in Q1 2025[11] - Net asset value (NAV) per share was $16.43 as of June 30, 2025, compared to $16.63 as of March 31, 2025[10] Portfolio & Investment Activity - The total fair value of the portfolio increased to $2.3 billion across 148 portfolio companies with a weighted average yield of 10.9%[10] - Record originations resulted in $375.7 million of fundings with a weighted average yield of 10.0%[10] - Total repayments and sales during the quarter were $138.0 million with a weighted average yield of 10.9%[10] - Non-accrual investments represented 3.0% and 2.1% of the total portfolio based on amortized cost and fair value, respectively, as of June 30, 2025[10] Liquidity & Capital - Statutory leverage was 1.10x as of June 30, 2025, compared to 1.04x as of March 31, 2025[10] - Total liquidity as of June 30, 2025, was $613.1 million in cash and undrawn debt capacity[10]

Core Points - Priority Income Fund has declared monthly cash "base" and "bonus" distributions for June, July, and August 2025, consistent with prior distributions [1][2] - The annualized total cash distribution is $1.34016 per share, with Class R at a 17.4% annualized rate and Class I at an 18.7% annualized rate [2] - Cumulative cash distributions since inception in January 2014 total $16.39 per common share through August 2025 [5] Monthly Cash "Base" Distribution - The cash "base" distribution is $0.08056 for June and July 2025, and $0.10070 for August 2025, payable monthly [3] - These distributions represent the 138th, 139th, and 140th consecutive monthly "base" distributions [3] Monthly Cash "Bonus" Distribution - The cash "bonus" distribution is $0.024167 for June, July, and August 2025, representing the 57th, 58th, and 59th monthly "bonus" distributions [4] Preferred Stock Distributions - The Fund has declared distributions on various series of preferred stock, including Series D, I, J, K, and L, with amounts ranging from $0.37500 to $0.43750 per share [6][7] Fund Overview - Priority Income Fund is a registered closed-end fund focused on acquiring and growing an investment portfolio primarily consisting of senior secured loans and collateralized loan obligations (CLOs) [9] - The Fund is managed by Priority Senior Secured Income Management, LLC, which has a team of investment professionals from Prospect Capital Management L.P. [9]

WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended March 31, 2025 NASDAQ: WHF (Common Stock) NASDAQ: WHFCL (7.875% Notes due 2028) Important Information and Forward Looking Statements References in this presentation to "WHF", "WhiteHorse Finance", "we", "us", "our" and "the Company" refer to WhiteHorse Finance, Inc. This presentation and the information and views included herein do not constitute investment advice, or a recommendation or an offer to enter into any transaction with the Company or a ...

Financial Performance - Net Investment Income (NII) was $187 million, or $0.67 per share, for the quarter ended March 31, 2025, compared to $171 million, or $0.61 per share, for the previous quarter[2] - Adjusted Net Investment Income (Adjusted NII) was $182 million, or $0.65 per share, for the quarter ended March 31, 2025, compared to $185 million, or $0.66 per share, for the previous quarter[2] - Net Asset Value (NAV) per share as of March 31, 2025, was $23.37, compared to $23.64 as of December 31, 2024[2] - The Adjusted NII / total dividend coverage ratio was 93% for the quarter ended March 31, 2025[2] Investment Activity - New investment fundings in the first quarter were approximately $2 billion[2] - Net investment activity in the first quarter was $881 million, including $290 million of sales to Credit Opportunities Partners JV, LLC (COPJV)[2] Capital Structure and Liquidity - $3.2 billion of liquidity in undrawn debt, cash, and unsettled trades[2] - 54% of drawn leverage was unsecured as of March 31, 2025, and the weighted average effective rate on borrowings was 5.5%[2] - In the first quarter, KKR FSK CLO 2 was closed, issuing $380 million of notes to third parties at a weighted average rate of S+1.58%[2] - 89% of liabilities mature in 2027 and beyond[2] Portfolio Composition - The fair value of investments was $14.1 billion with 224 portfolio companies[9] - Senior secured investments total 72.6% of the portfolio, looking through to the investments in COPJV as of March 31, 2025[14]

Financial Data and Key Metrics Changes - In Q1 2025, the company generated GAAP net investment income of $0.40 per share and adjusted net investment income of $0.41 per share, reflecting a decline of approximately $0.04 per share from the prior quarter due to tighter yields and increased non-accruals [7][13] - The net asset value (NAV) as of March 31 was $16.63 per share, down from $16.80 per share as of December 31 [7] - Total investment income for the first quarter was $55 million, consistent with the prior quarter, while total expenses increased to $33 million primarily due to higher interest expenses [12] Business Line Data and Key Metrics Changes - The company added approximately $180 million in organic originations to its portfolio during the quarter, despite muted sponsor M&A activity [7] - The total size of the portfolio increased from $1.9 billion to $2.5 billion, bolstered by the merger with CSL3 and the consolidation of Credit Fund II [8] Market Data and Key Metrics Changes - The broadly syndicated and private credit markets remained competitive, with recent volatility around tariffs posing a near-term headwind to overall capital markets and M&A activity [8][9] - The company estimates that less than 5% of its portfolio has material direct exposure to tariffs, indicating minimal potential direct risk [9] Company Strategy and Development Direction - The strategic merger with CSL3 is expected to improve liquidity and reduce costs while maintaining the existing investment strategy due to the near 100% overlap between the portfolios [10] - The company is focused on overall credit performance and diversification, continuing to deploy and increase the size of its portfolio [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while the portfolio remains resilient, there is a focus on sourcing transactions with significant equity cushions and conservative leverage profiles [21] - The company anticipates a strong pipeline of transactions heading into Q2, despite a near-term slowdown in overall activity [36] Other Important Information - The Board of Directors declared a second-quarter dividend of $0.40 per share, representing an attractive yield of about 11% based on the recent share price [14] - The company has $0.85 per share of spillover income generated over the last five years, providing comfort in maintaining the base dividend [14] Q&A Session Summary Question: On the credit fund, what does the dividend look like going forward? - Management indicated that the nominal value outstanding for the credit fund is expected to be flat in the near term, with overall NII being roughly neutral due to higher ROE on a lower capital base [26] Question: Is there any asset rotation expected post-merger? - Management confirmed that the overall yield from the merged portfolio is lower, resulting in a reduction of about 15 basis points for CGBD, with selective rotation of lower spread assets planned [32] Question: How does the company plan to manage portfolio leverage? - The target leverage is set at 1.1, with expectations to reach this range over the next couple of quarters, supported by a strong pipeline of transactions [36] Question: How will spillover income support the dividend? - Management stated that while there are uncertainties, the intention is to remain consistent with the dividend, assessing the situation on a quarter-by-quarter basis [44]

Financial Data and Key Metrics Changes - Adjusted net investment income decreased to $39 million or $0.45 per share from $45 million or $0.54 per share in the previous quarter [5] - Net asset value declined to $16.75 per share from $17.63 in the prior quarter [5] - Investments on non-accrual status increased to 4.67% of fair market value and cost, compared to 3.95% in the first quarter [6] Business Line Data and Key Metrics Changes - The company committed $407 million of capital across 32 investments, compared to 13 investments totaling $198 million in the previous quarter [15] - The weighted average yield on new debt investments was 9.5%, slightly down from 9.6% in the prior quarter [16] - The median EBITDA of portfolio companies increased to approximately $158 million, up $16 million from the prior quarter [16] Market Data and Key Metrics Changes - The leverage in portfolio companies remained steady at 5.4 times, below overall middle market leverage levels [16] - The portfolio's weighted average interest coverage declined to 1.8 times from 2.1 times in the previous quarter [16] - The joint ventures generated an attractive annualized ROE of approximately 10.6% [24] Company Strategy and Development Direction - The company is focusing on larger, more diversified businesses that can withstand uncertain times [16] - There is a heightened focus on underwriting and risk evaluation due to potential impacts from tariffs and inflation [28] - The company is actively seeking opportunities in capital solutions or rescue financing during periods of market volatility [28] Management's Comments on Operating Environment and Future Outlook - The management noted significant uncertainty surrounding the trade environment and its potential impact on portfolio performance [27] - There is an expectation of cautious capital deployment among lenders due to the current economic outlook [28] - The company believes it is well-positioned to navigate the current market environment and deliver attractive risk-adjusted returns to shareholders [29] Other Important Information - The company successfully issued new unsecured bonds to refinance existing bonds and amended its senior secured revolving credit facility, reducing interest rates [8] - The company has ample liquidity of approximately $1.1 billion, including $98 million in cash and $1 billion in undrawn capacity on credit facilities [23] Q&A Session Summary Question: Did the company lean into any liquid markets, structured finance, or syndicated loans in April? - The company was somewhat active but remained cautious due to unresolved tariff situations [32] Question: How successfully has the company been focusing on larger and diversified businesses? - The company noted that while larger borrowers were initially seeking better pricing in the broadly syndicated loan market, there has been a return of larger borrowers to the direct lending market [34][38] Question: Should the company expect any slowing of repayment activity during this period of volatility? - The management anticipates that repayments will remain significant but acknowledges that volatility may lead to a slowdown in the future [52] Question: Is the current yield reflective of what the portfolio should generate going forward? - The management indicated that the current yield is a decent run rate, influenced by reference rate declines and new non-accruals [59] Question: What is the expected ROE for the joint ventures over time? - The management believes achieving an ROE in the 11% to 12% range is achievable, depending on the opportunity set [62]