| Fair Value of Financial Instruments |
Fair Value of Financial Instruments Investments
The following table presents the fair value hierarchy of cash, investments, and derivatives as of the following periods:
| | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Hierarchy as of March 31, 2025 | | ($ in thousands) | Level 1 | | Level 2 | | Level 3 | | Total | | Cash (including restricted and foreign cash) | $ | 535,811 | | | $ | — | | | $ | — | | | $ | 535,811 | | | Investments: | | | | | | | | First-lien senior secured debt investments(1) | — | | | 4,967,033 | | | 21,732,819 | | | 26,699,852 | | | Second-lien senior secured debt investments | — | | | 249,668 | | | 516,554 | | | 766,222 | | | Unsecured debt investments | — | | | 73,803 | | | 383,588 | | | 457,391 | | Preferred equity investments(2) | — | | | — | | | 436,093 | | | 436,093 | | Common equity investments(3) | — | | | 4,874 | | | 531,866 | | | 536,740 | | | Subtotal | $ | — | | | $ | 5,295,378 | | | $ | 23,600,920 | | | $ | 28,896,298 | | Investments measured at Net Asset Value (“NAV”)(4) | — | | | — | | | — | | | 564,111 | | | Total investments at fair value | $ | — | | | $ | 5,295,378 | | | $ | 23,600,920 | | | $ | 29,460,409 | | | Derivatives: | | | | | | | | | Interest rate swaps | $ | — | | | $ | 14,291 | | | $ | — | | | $ | 14,291 | | | Cross-currency swap | — | | | (17,246) | | | — | | | (17,246) | | | Total Derivatives | $ | — | | | $ | (2,955) | | | $ | — | | | $ | (2,955) | |
(1)Includes debt investment in Amergin AssetCo. (2)Includes equity investment in LSI Financing DAC. (3)Includes equity investments in Amergin AssetCo and Fifth Season. (4)Includes equity investments in OCIC SLF, Credit SLF and LSI Financing LLC, which are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Hierarchy as of December 31, 2024 | | ($ in thousands) | Level 1 | | Level 2 | | Level 3 | | Total | | Cash (including restricted and foreign cash) | $ | 1,006,483 | | | $ | — | | | $ | — | | | $ | 1,006,483 | | | Investments: | | | | | | | | First-lien senior secured debt investments(1) | — | | | 4,242,228 | | | 19,422,914 | | | 23,665,142 | | | Second-lien senior secured debt investments | — | | | 315,966 | | | 451,426 | | | 767,392 | | | Unsecured debt investments | — | | | 74,137 | | | 366,496 | | | 440,633 | | Preferred equity investments(2) | — | | | — | | | 364,672 | | | 364,672 | | Common equity investments(3) | — | | | — | | | 493,305 | | | 493,305 | | | Subtotal | $ | — | | | $ | 4,632,331 | | | $ | 21,098,813 | | | $ | 25,731,144 | | Investments measured at Net Asset Value (“NAV”)(4) | — | | | — | | | — | | | 647,750 | | | Total investments at fair value | $ | — | | | $ | 4,632,331 | | | $ | 21,098,813 | | | $ | 26,378,894 | | | Derivatives: | | | | | | | | | Interest rate swaps | $ | — | | | $ | (55,660) | | | $ | — | | | $ | (55,660) | | | Cross-currency swap | — | | | (20,635) | | | — | | | (20,635) | | | Total Derivatives | $ | — | | | $ | (76,295) | | | $ | — | | | $ | (76,295) | |
(1)Includes debt investment in Amergin AssetCo. (2)Includes equity investment in LSI Financing DAC. (3)Includes equity investments in Amergin AssetCo and Fifth Season. (4)Includes equity investments in OCIC SLF, Credit SLF and LSI Financing LLC, which are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.
The following tables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the following periods: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of and for the Three Months Ended March 31, 2025 | | ($ in thousands) | First-lien senior secured debt investments | | Second-lien senior secured debt investments | | Unsecured debt investments | | Preferred equity investments | | Common equity investments | | Total | | Fair value, beginning of period | $ | 19,422,914 | | | $ | 451,426 | | | $ | 366,496 | | | $ | 364,672 | | | $ | 493,305 | | | $ | 21,098,813 | | | Purchases of investments, net | 2,899,112 | | | 19,901 | | | — | | | 85,419 | | | 32,051 | | | 3,036,483 | | | Payment-in-kind | 14,144 | | | 2,268 | | | 10,725 | | | 8,079 | | | 32 | | | 35,248 | | | Proceeds from investments, net | (487,004) | | | (7,600) | | | (369) | | | (27,777) | | | (1,340) | | | (524,090) | | | Net change in unrealized gain (loss) | 44,500 | | | 2,159 | | | 12,045 | | | 980 | | | 10,148 | | | 69,832 | | | Net realized gains (losses) | (42,129) | | | (11,345) | | | (5,866) | | | 275 | | | — | | | (59,065) | | | Net amortization/accretion of premium/discount on investments | 18,707 | | | 198 | | | 557 | | | 628 | | | — | | | 20,090 | | | Transfers between investment types | (5,543) | | | — | | | — | | | 3,817 | | | 1,726 | | | — | | Transfers into (out of) Level 3(1) | (131,882) | | | 59,547 | | | — | | | — | | | (4,056) | | | (76,391) | | | Fair value, end of period | $ | 21,732,819 | | | $ | 516,554 | | | $ | 383,588 | | | $ | 436,093 | | | $ | 531,866 | | | $ | 23,600,920 | |
(1)Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three months ended March 31, 2025, transfers into (out of) Level 3 were as a result of changes in the observability of significant inputs for certain portfolio companies. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of and for the Three Months Ended March 31, 2024 | | ($ in thousands) | First-lien senior secured debt investments | | Second-lien senior secured debt investments | | Unsecured debt investments | | Preferred equity investments | | Common equity investments | | Total | | Fair value, beginning of period | $ | 11,540,505 | | | $ | 935,338 | | | $ | 189,018 | | | $ | 721,545 | | | $ | 448,974 | | | $ | 13,835,380 | | | Purchases of investments, net | 1,828,888 | | | — | | | — | | | 3,660 | | | 70,748 | | | 1,903,296 | | | Payment-in-kind | 13,262 | | | 740 | | | 5,183 | | | 21,194 | | | 25 | | | 40,404 | | | Proceeds from investments, net | (399,203) | | | (244,285) | | | (300) | | | (2,194) | | | (417) | | | (646,399) | | | Net change in unrealized gain (loss) | 3,810 | | | 1,480 | | | (3,168) | | | (948) | | | 7,607 | | | 8,781 | | | Net realized gains (losses) | (2,437) | | | — | | | (28) | | | — | | | — | | | (2,465) | | | Net amortization/accretion of premium/discount on investments | 11,665 | | | 3,532 | | | 62 | | | 349 | | | — | | | 15,608 | | | Transfers between investment types | — | | | — | | | — | | | — | | | — | | | — | | Transfers into (out of) Level 3(1) | (218,065) | | | (21,514) | | | — | | | — | | | (40,795) | | | (280,374) | | | Fair value, end of period | $ | 12,778,425 | | | $ | 675,291 | | | $ | 190,767 | | | $ | 743,606 | | | $ | 486,142 | | | $ | 14,874,231 | |
(1)Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three months ended March 31, 2024, transfers into (out of) Level 3 were as a result of changes in the observability of significant inputs for certain portfolio companies and an investment measured at net asset value which is no longer categorized within the fair value hierarchy. The below tables present information with respect to the net change in unrealized gains (losses) on investments for which Level 3 inputs were used in determining the fair value that are still held by the Company for the following periods: | | | | | | | | | | | | | | | | ($ in thousands) | | Net change in unrealized gain (loss) for the Three Months Ended March 31, 2025 on investments held at March 31, 2025 | | Net change in unrealized gain (loss) for the Three Months Ended March 31, 2024 on investments held at March 31, 2024 | | First-lien senior secured debt investments | | $ | 1,242 | | | $ | 5,673 | | | Second-lien senior secured debt investments | | (6,333) | | | 4,306 | | | Unsecured debt investments | | 12,045 | | | (3,168) | | | Preferred equity investments | | 980 | | | (948) | | | Common equity investments | | 10,147 | | | 7,605 | | | Total Investments | | $ | 18,081 | | | $ | 13,468 | |
The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of March 31, 2025 and December 31, 2024. The weighted average range of unobservable inputs is based on fair value of investments. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair value. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of March 31, 2025 | | ($ in thousands) | Fair Value | | Valuation Technique | | Unobservable Input | | Range (Weighted Average) | | Impact to Valuation from an Increase in Input | | First-lien senior secured debt investments | $ | 19,588,096 | | | Yield Analysis | | Market Yield | | 6.8% - 44.9% (9.9%) | | Decrease | | 2,144,603 | | | Recent Transaction | | Transaction Price | | 95.0% - 99.5% (98.8%) | | Increase | | 120 | | | Collateral Analysis | | Recovery Rate | | 2.5% | | Increase | Second-lien senior secured debt investments | $ | 496,654 | | | Yield Analysis | | Market Yield | | 11.0% - 25.0% (16.5%) | | Decrease | | 19,900 | | | Recent Transaction | | Transaction Price | | 99.5% - 99.5% (99.5%) | | Increase | Unsecured debt investments | $ | 383,560 | | | Yield Analysis | | Market Yield | | 8.6% - 17.7% (12.5%) | | Decrease | | | | | | | | | | | | 28 | | | Market Approach | | EBITDA Multiple | | 12.0x | | Increase | | | | | | | | | | | | Preferred equity investments | $ | 340,947 | | | Yield Analysis | | Market Yield | | 12.0% - 36.7% (15.0%) | | Decrease | | 88,731 | | | Recent Transaction | | Transaction Price | | 97.0% - 99.0% (97.1%) | | Increase | | 4,615 | | | Market Approach | | EBITDA Multiple | | 7.1x | | Increase | | 1,800 | | | Market Approach | | Revenue Multiple | | 8.5x - 18.0x (13.8x) | | Increase | | | | | | | | | | | | Common equity investments | $ | 12,565 | | | Recent Transaction | | Transaction Price | | 100.0% - 100.0% (100.0%) | | Increase | | 155,668 | | | Market Approach | | EBITDA Multiple | | 3.0x - 28.5x (14.5x) | | Increase | | 245,283 | | | Market Approach | | AUM Multiple | | 1.1x | | Increase | | 44,599 | | | Market Approach | | Revenue Multiple | | 5.3x - 13.5x (10.2x) | | Increase | | 381 | | | Option Pricing Model | | Volatility | | 70.0% | | Increase | | 1,569 | | | Yield Analysis | | Market Yield | | 8.5% | | Decrease | | 69,973 | | | Market Approach | | N/A | | N/A | | N/A | | 1,816 | | | Discounted Cash Flow Analysis | | Discount Rate | | 15.0% | | Decrease | | 12 | | | Market Approach | | Gross Profit Multiple | | 10.0x | | Increase |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2024 | | ($ in thousands) | Fair Value | | Valuation Technique | | Unobservable Input | | Range (Weighted Average) | | Impact to Valuation from an Increase in Input | | First-lien senior secured debt investments | $ | 16,846,669 | | | Yield Analysis | | Market Yield | | 6.8% - 35.2% (10.6%) | | Decrease | | 2,575,658 | | | Recent Transaction | | Transaction Price | | 94.7% - 100.0% (99.1%) | | Increase | | 587 | | | Collateral Analysis | | Recovery Rate | | 11.1% - 13.5% (13.0%) | | Increase | | Second-lien senior secured debt investments | $ | 451,426 | | | Yield Analysis | | Market Yield | | 11.1% - 43.6% (16.8%) | | Decrease | | | | | | | | | | | | Unsecured debt investments | $ | 366,468 | | | Yield Analysis | | Market Yield | | 8.6% - 18.1% (12.6%) | | Decrease | | | | | | | | | | | | 28 | | | Market Approach | | EBITDA Multiple | | 11.8x | | Increase | | | | | | | | | | | | Preferred equity investments | $ | 358,536 | | | Yield Analysis | | Market Yield | | 12.3% - 37.1% (15.2%) | | Decrease | | | | | | | | | | | | 4,376 | | | Market Approach | | EBITDA Multiple | | 7.1x | | Increase | | 1,760 | | | Market Approach | | Revenue Multiple | | 8.5x - 18.0x (13.9x) | | Increase | | | | | | | | | | | | | | | | | | | | | | Common equity investments | $ | 155,881 | | | Market Approach | | EBITDA Multiple | | 3.3x - 28.5x (15.0x) | | Increase | | 223,274 | | | Market Approach | | AUM Multiple | | 1.1x | | Increase | | 48,359 | | | Market Approach | | Revenue Multiple | | 5.3x - 14.5x (10.9x) | | Increase | | 629 | | | Option Pricing Model | | Volatility | | 70.0% | | Increase | | 1,539 | | | Yield Analysis | | Market Yield | | 8.5% | | Decrease | | 62,056 | | | Market Approach | | N/A | | N/A | | N/A | | 1,555 | | | Discounted Cash Flow Analysis | | Discount Rate | | 12.5% | | Decrease | | 12 | | | Market Approach | | Gross Profit Multiple | | 10.0x | | Increase |
The fair value of the Company’s performing Level 3 debt investments is typically determined utilizing a yield analysis. In a yield analysis, a price is ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles. Additional consideration is given to the expected life, portfolio company performance since close, and other terms and risks associated with an investment. Among other factors, a determinant of risk is the amount of leverage used by the portfolio company relative to its total enterprise value, and the rights and remedies of the Company’s investment within the portfolio company’s capital structure.
When the debtor is not performing or when there is insufficient value to cover the investment, the Company may utilize a net recovery approach to determine the fair value of debt investments in subject companies. A net recovery analysis typically consists of two steps. First, the total enterprise value for the subject company is estimated using standard valuation approaches, most commonly the market approach. Second, the fair value for each investment in the subject company is then estimated by allocating the subject company’s total enterprise value to the outstanding securities in the capital structure based upon various factors, including seniority, preferences, and other features if deemed relevant to each security in the capital structure.
Significant unobservable quantitative inputs typically used in the fair value measurement of the Company’s Level 3 debt investments primarily include current market yields, including relevant market indices, but may also include quotes from brokers, dealers, and pricing services as indicated by comparable investments. For the Company’s Level 3 equity investments, a market approach, based on comparable financial performance multiples such as publicly-traded company and comparable market transaction multiples of revenues, earnings before income taxes, depreciation and amortization (“EBITDA”), or some combination thereof and comparable market transactions typically would be used.
Debt Not Carried at Fair Value
Fair value is estimated by discounting remaining payments using applicable current market rates, which take into account changes in the Company’s marketplace credit ratings, or market quotes, if available. The following tables present the carrying and fair values of the Company’s debt obligations as of the following periods: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2025 | | December 31, 2024 | | ($ in thousands) | Net Carrying Value(1) | | Debt Issuance Costs | | Fair Value | | Net Carrying Value(1) | | Debt Issuance Costs | | Fair Value | Revolving Credit Facility(2) | $ | 1,389,350 | | $ | (21,864) | | $ | 1,389,350 | | $ | 1,312,515 | | $ | (22,497) | | $ | 1,312,515 | | SPV Asset Facility I | 194,739 | | (5,261) | | 194,739 | | 294,536 | | (5,464) | | 294,536 | | SPV Asset Facility II | 1,038,769 | | (11,231) | | 1,038,769 | | 907,881 | | (12,119) | | 907,881 | SPV Asset Facility III(2) | 875,734 | | (12,597) | | 875,734 | | 958,547 | | (13,370) | | 958,547 | | SPV Asset Facility IV | 321,770 | | (8,230) | | 321,770 | | 351,698 | | (3,302) | | 351,698 | | SPV Asset Facility V | 260,300 | | (4,700) | | 260,300 | | 245,009 | | (4,991) | | 245,009 | | SPV Asset Facility VI | 211,957 | | (8,043) | | 211,957 | | 341,752 | | (8,248) | | 341,752 | SPV Asset Facility VII(2) | 243,147 | | (3,238) | | 243,147 | | 162,398 | | (3,461) | | 162,398 | | SPV Asset Facility VIII | 196,993 | | (3,007) | | 196,993 | | 196,923 | | (3,077) | | 196,923 | | CLO VIII | 288,216 | | (1,784) | | 288,216 | | 288,100 | | (1,900) | | 288,100 | | CLO XI | 258,417 | | (1,583) | | 258,417 | | 258,308 | | (1,692) | | 258,308 | | CLO XII | 258,299 | | (1,701) | | 258,299 | | 258,192 | | (1,808) | | 258,192 | | CLO XV | 309,308 | | (2,692) | | 309,308 | | 309,198 | | (2,802) | | 309,198 | | CLO XVI | 417,390 | | (2,610) | | 417,390 | | 417,303 | | (2,697) | | 417,303 | | CLO XVII | 322,242 | | (2,758) | | 322,242 | | 322,121 | | (2,879) | | 322,121 | | CLO XVIII | 258,180 | | (1,820) | | 258,180 | | 258,109 | | (1,891) | | 258,109 | | CLO XIX | 258,111 | | (1,889) | | 258,111 | | 258,206 | | (1,794) | | 258,206 | | March 2025 Notes | — | | — | | — | | 499,516 | | (484) | | 498,750 | | September 2026 Notes | 347,537 | | (2,463) | | 338,625 | | 347,084 | | (2,916) | | 336,000 | | February 2027 Notes | 497,042 | | (2,958) | | 493,750 | | 496,650 | | (3,350) | | 493,750 | | September 2027 Notes | 598,724 | | (4,728) | | 627,000 | | 593,270 | | (5,182) | | 630,000 | AUD 2027 Notes(2) | 275,834 | | (2,484) | | 298,707 | | 271,957 | | (2,397) | | 296,207 | | June 2028 Notes | 650,594 | | (7,469) | | 689,000 | | 642,519 | | (8,067) | | 690,625 | | January 2029 Notes | 545,879 | | (10,766) | | 584,375 | | 538,086 | | (11,458) | | 587,125 | | September 2029 Notes | 909,906 | | (8,434) | | 913,500 | | 492,523 | | (10,769) | | 510,000 | | March 2030 Notes | 955,157 | | (20,567) | | 980,000 | | 941,037 | | (20,518) | | 985,000 | | March 2031 Notes | 732,122 | | (18,881) | | 765,000 | | 718,384 | | (19,599) | | 763,125 | | Total Debt | $ | 12,615,717 | | $ | (173,758) | | $ | 12,792,879 | | $ | 12,681,822 | | $ | (178,732) | | $ | 12,931,378 |
(1)Inclusive of change in fair market value of effective hedge. (2)Includes unrealized gain (loss) on translation of borrowings denominated in foreign currencies.
The below table presents fair value measurements of the Company’s debt obligations as of the following periods if debt was measured at fair value:
| | | | | | | | | | | | | ($ in thousands) | March 31, 2025 | | December 31, 2024 | | Level 1 | $ | — | | $ | — | | Level 2 | 5,689,957 | | 5,790,582 | | Level 3 | 7,102,922 | | 7,140,796 | | Total Debt | $ | 12,792,879 | | $ | 12,931,378 |
Financial Instruments Not Carried at Fair Value
As of March 31, 2025 and December 31, 2024, the carrying amounts of the Company’s other assets and liabilities approximate fair value due to their short maturities. These financial instruments would be categorized as Level 3 within the hierarchy.
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