| Fair Value of Financial Instruments |
Fair Value of Financial Instruments Investments The tables below present the fair value hierarchy of investments as of the following periods: | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Hierarchy as of June 30, 2025 | | ($ in thousands) | Level 1 | | Level 2 | | Level 3 | | Total | | Cash (including restricted and foreign cash) | $ | 170,523 | | | $ | — | | | $ | — | | | $ | 170,523 | | | Investments: | | | | | | | | First-lien senior secured debt investments(1) | $ | — | | | $ | 375,351 | | | $ | 9,548,767 | | | $ | 9,924,118 | | | Second-lien senior secured debt investments | — | | | 116,649 | | | 310,288 | | | 426,937 | | | Unsecured debt investments | — | | | — | | | 451,319 | | | 451,319 | | Preferred equity investments(2) | — | | | — | | | 1,022,197 | | | 1,022,197 | | Common equity investments(3) | 465 | | | 36,984 | | | 743,758 | | | 781,207 | | | Subtotal | $ | 465 | | | $ | 528,984 | | | $ | 12,076,329 | | | $ | 12,605,778 | | Investments measured at Net Asset Value(4) | $ | — | | | $ | — | | | $ | — | | | $ | 122,864 | | | Total Investments at fair value | $ | 465 | | | $ | 528,984 | | | $ | 12,076,329 | | | $ | 12,728,642 | | | Derivatives: | | | | | | | | | Foreign currency forward contracts | $ | — | | | $ | (11,400) | | | $ | — | | | $ | (11,400) | | | Interest rate swaps | $ | — | | | $ | 28,822 | | | $ | — | | | $ | 28,822 | |
(1)Includes 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 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) | $ | 257,000 | | | $ | — | | | $ | — | | | $ | 257,000 | | | Investments: | | | | | | | | | First-lien senior secured debt investments | $ | — | | | $ | 110,529 | | | $ | 4,346,309 | | | $ | 4,456,838 | | | Second-lien senior secured debt investments | — | | | 92,379 | | | 166,159 | | | 258,538 | | | Unsecured debt investments | — | | | — | | | 336,635 | | | 336,635 | | Preferred equity investments(1) | — | | | — | | | 689,952 | | | 689,952 | | Common equity investments(2) | 49,334 | | | 18,078 | | | 535,467 | | | 602,879 | | | Subtotal | $ | 49,334 | | | $ | 220,986 | | | $ | 6,074,522 | | | $ | 6,344,842 | | Investments measured at net asset value (“NAV”)(3) | — | | | — | | | — | | | 62,624 | | | Total Investments at fair value | $ | 49,334 | | | $ | 220,986 | | | $ | 6,074,522 | | | $ | 6,407,466 | |
(1)Includes equity investment in LSI Financing DAC. (2)Includes equity investment in Fifth Season. (3)Includes equity investments in 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 June 30, 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 | $ | 9,120,915 | | | $ | 291,217 | | | $ | 460,216 | | | $ | 956,331 | | | $ | 706,192 | | | $ | 11,534,871 | | | Purchases of investments, net | 684,131 | | | 61,324 | | | (2) | | | 31,565 | | | 10,643 | | | 787,661 | | | Payment-in-kind | 13,127 | | | 5,360 | | | 6,210 | | | 23,295 | | | — | | | 47,992 | | | Proceeds from investments, net | (231,957) | | | (32,717) | | | (30,661) | | | (8,694) | | | 13,555 | | | (290,474) | | | Net change in unrealized gain (loss) | 27,299 | | | 1,012 | | | 8,932 | | | 18,653 | | | 13,368 | | | 69,264 | | | Net realized gains (losses) | 3,495 | | | — | | | 710 | | | 76 | | | — | | | 4,281 | | | Net amortization/accretion of premium/discount on investments | 6,271 | | | 1,505 | | | 5,914 | | | 971 | | | — | | | 14,661 | | Transfers into (out of) Level 3(1) | (74,514) | | | (17,413) | | | — | | | — | | | — | | | (91,927) | | | | | | | | | | | | | | | Fair value, end of period | $ | 9,548,767 | | | $ | 310,288 | | | $ | 451,319 | | | $ | 1,022,197 | | | $ | 743,758 | | | $ | 12,076,329 | |
(1)Transfers between levels, if any, are recognized at the beginning of the period noted. For the three months ended June 30, 2025, transfers between Level 2 and 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 June 30, 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 | $ | 3,947,332 | | | $ | 255,724 | | | $ | 401,445 | | | $ | 837,243 | | | $ | 358,489 | | | $ | 5,800,233 | | | Purchases of investments, net | 601,138 | | | — | | | 51,464 | | | 5,890 | | | 9,660 | | | 668,152 | | | Payment-in-kind | 16,958 | | | 3,367 | | | 6,393 | | | 11,649 | | | — | | | 38,367 | | | Proceeds from investments, net | (356,871) | | | (68,548) | | | (136,107) | | | (1,076) | | | (1,224) | | | (563,826) | | | Net change in unrealized gain (loss) | (60,861) | | | (2,829) | | | 6,812 | | | (32,159) | | | 10,731 | | | (78,306) | | | Net realized gains (losses) | (21) | | | (806) | | | (11,565) | | | — | | | — | | | (12,392) | | | Net amortization/accretion of premium/discount on investments | 8,864 | | | 610 | | | 3,929 | | | 117 | | | — | | | 13,520 | | Transfers into (out of) Level 3(1) | — | | | (18,008) | | | — | | | — | | | (1,000) | | | (19,008) | | | Fair value, end of period | $ | 4,156,539 | | | $ | 169,510 | | | $ | 322,371 | | | $ | 821,664 | | | $ | 376,656 | | | $ | 5,846,740 | |
(1)Transfers between levels, if any, are recognized at the beginning of the period noted. For the three months ended June 30, 2024, transfers between Level 2 and Level 3 were as a result of changes in the observability of significant inputs for certain portfolio companies. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of and for the Six Months Ended June 30, 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 | $ | 4,346,309 | | | $ | 166,159 | | | $ | 336,635 | | | $ | 689,952 | | | $ | 535,467 | | | $ | 6,074,522 | | | Purchases of investments, net | 1,062,322 | | | 61,323 | | | (1) | | | 31,565 | | | 27,037 | | | 1,182,246 | | | Payment-in-kind | 20,348 | | | 9,065 | | | 13,713 | | | 33,158 | | | — | | | 76,284 | | | Proceeds from investments, net | (469,084) | | | (41,117) | | | (33,358) | | | (12,581) | | | 13,479 | | | (542,661) | | | Net change in unrealized gain (loss) | 22,305 | | | 8,501 | | | 11,872 | | | 12,218 | | | 18,887 | | | 73,783 | | | Net realized gains (losses) | 3,528 | | | (12,198) | | | 85 | | | 115 | | | — | | | (8,470) | | | Net amortization/accretion of premium/discount on investments | 10,753 | | | 1,565 | | | 10,516 | | | 1,210 | | | — | | | 24,044 | | Transfers into (out of) Level 3(1) | — | | | — | | | — | | | — | | | (3,092) | | | (3,092) | | Transfers in from the Mergers | 4,552,286 | | | 116,990 | | | 111,857 | | | 266,560 | | | 151,980 | | | 5,199,673 | | | Fair value, end of period | $ | 9,548,767 | | | $ | 310,288 | | | $ | 451,319 | | | $ | 1,022,197 | | | $ | 743,758 | | | $ | 12,076,329 | |
(1)Transfers between levels, if any, are recognized at the beginning of the period noted. For the six months ended June 30, 2025, transfers between Level 2 and Level 3 were as a result of changes in the observability of significant inputs for certain portfolio companies. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of and for the Six Months Ended June 30, 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 | $ | 3,975,147 | | | $ | 235,292 | | | $ | 407,407 | | | $ | 861,779 | | | $ | 310,585 | | | $ | 5,790,210 | | | Purchases of investments, net | 776,023 | | | — | | | 51,464 | | | 5,891 | | | 29,087 | | | 862,465 | | | Payment-in-kind | 27,528 | | | 4,576 | | | 16,960 | | | 18,803 | | | — | | | 67,867 | | | Proceeds from investments, net | (562,953) | | | (68,548) | | | (154,085) | | | (1,319) | | | (1,247) | | | (788,152) | | | Net change in unrealized gain (loss) | (71,902) | | | (1,688) | | | 6,225 | | | (63,721) | | | 39,231 | | | (91,855) | | | Net realized gains (losses) | (21) | | | (806) | | | (13,223) | | | — | | | — | | | (14,050) | | | Net amortization of discount on investments | 12,717 | | | 684 | | | 7,623 | | | 231 | | | — | | | 21,255 | | Transfers into (out of) Level 3(1) | — | | | — | | | — | | | — | | | (1,000) | | | (1,000) | | | Fair value, end of period | $ | 4,156,539 | | | $ | 169,510 | | | $ | 322,371 | | | $ | 821,664 | | | $ | 376,656 | | | $ | 5,846,740 | |
(1)Transfers between levels, if any, are recognized at the beginning of the period noted. For the six months ended June 30, 2024, transfers into (out of) Level 3 were as a result of changes in the observability of significant inputs for certain portfolio companies. The following tables present information with respect to 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 June 30, 2025 on Investments Held at June 30, 2025 | | Net change in unrealized gain (loss) for the Three Months Ended June 30, 2024 on Investments Held at June 30, 2024 | | First-lien senior secured debt investments | $ | 30,350 | | | $ | (58,531) | | | Second-lien senior secured debt investments | 2,078 | | | (3,120) | | | Unsecured debt investments | 8,932 | | | 6,812 | | | Preferred equity investments | 18,653 | | | (32,128) | | | Common equity investments | 13,382 | | | 9,731 | | | Total Investments | $ | 73,395 | | | $ | (77,236) | |
| | | | | | | | | | | | | | | ($ in thousands) | Net change in unrealized gain (loss) for the Six Months Ended June 30, 2025 on Investments Held at June 30, 2025 | | Net change in unrealized gain (loss) for the Six Months Ended June 30, 2024 on Investments Held at June 30, 2024 | | | | First-lien senior secured debt investments | $ | 25,112 | | | $ | (66,519) | | | | | Second-lien senior secured debt investments | (446) | | | (1,917) | | | | | Unsecured debt investments | 11,330 | | | 6,225 | | | | | Preferred equity investments | 12,218 | | | (63,123) | | | | | Common equity investments | 19,000 | | | 38,231 | | | | | Total Investments | $ | 67,214 | | | $ | (87,103) | | | |
The tables below present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of the following periods. 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. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 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 | $ | 571,748 | | | Recent Transaction | | Transaction Price | | 98.5% - 99.5% (99.1%) | | Increase | | 8,973,803 | | | Yield Analysis | | Market Yield | | 6.6% - 17.8% (9.8%) | | Decrease | | 3,216 | | | Collateral Analysis | | Recovery Rate | | —% - 100.0% (73.0%) | | Increase | | Second-lien senior secured debt investments | $ | 59,898 | | | Recent Transaction | | Transaction Price | | 99.0% - 99.0% (99.0%) | | Increase | | 250,390 | | | Yield Analysis | | Market Yield | | 12.1% - 27.3% (16.4%) | | Decrease | | | | | | | | | | | | Unsecured debt investments | $ | 448,290 | | | Yield Analysis | | Market Yield | | 8.4% - 15.8% (12.0%) | | Decrease | | | | | | | | | | | | 3,029 | | | Market Approach | | Revenue Multiple | | 5.5x - 5.5x (5.5x) | | Increase | | Preferred equity investments | $ | 31,566 | | | Recent Transaction | | Transaction Price | | 97.5% - 97.5% (97.5%) | | Increase | | 465,860 | | | Yield Analysis | | Market Yield | | 11.7% - 37.9% (14.9%) | | Decrease | | 3,002 | | | Market Approach | | Gross Profit Multiple | | 8.0x - 8.0x (8.0x) | | Increase | | 521,769 | | | Market Approach | | Revenue Multiple | | 2.0x - 16.5x (7.7x) | | Increase | | Common equity investments | $ | 118,436 | | | Recent Transaction | | Transaction Price | | 100.0% - 395.6% (304.7%) | | Increase | | 73,559 | | | Yield Analysis | | Market Yield | | 18.7% - 18.7% (18.7%) | | Decrease | | 135,242 | | | Market Approach | | EBITDA Multiple | | 8.1x - 27.0x (12.5x) | | Increase | | 163,837 | | | Market Approach | | AUM Multiple | | 1.1x - 1.1x (1.1x) | | Increase | | 21,191 | | | Market Approach | | N/A(1) | | N/A | | N/A | | 278 | | | Market Approach | | Gross Profit Multiple | | 10.0x - 10.0x (10.0x) | | Increase | | 228,810 | | | Market Approach | | Revenue Multiple | | 4.5x - 15.3x (11.5x) | | Increase | | 240 | | | Option Pricing Model | | Volatility | | 60.0% - 70.0% (69.8%) | | Increase | | 2,165 | | | Discounted Cash Flow Analysis | | Discounted Factor | | 20.0% - 20.0% (20.0%) | | Decrease | | | | | | | | | | |
________________(1)Fair value based on a weighting of the appraised value of the portfolio company’s underlying assets and their cost. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | $ | 4,090,310 | | | Yield Analysis | | Market Yield | | 6.8% - 35.2% (11.0%) | | Decrease | | 253,946 | | | Recent Transaction | | Transaction Price | | 98.3% - 100.0% (99.0%) | | Increase | | 2,053 | | | Collateral Analysis | | Recovery Rate | | 11.2% - 13.5% (13.1%) | | Increase | | Second-lien senior secured debt investments | $ | 166,159 | | | Yield Analysis | | Market Yield | | 16.5% - 43.6% (19.6%) | | Decrease | | | | | | | | | | | | | | | | | | | | | | Unsecured debt investments | $ | 177,356 | | | Yield Analysis | | Market Yield | | 8.6% - 16.7% (13.1%) | | Decrease | | 159,279 | | | Market Approach | | Revenue Multiple | | 10.3x - 10.3x (10.3x) | | Increase | | | | | | | | | | | | Preferred equity investments | $ | 260,562 | | | Yield Analysis | | Market Yield | | 12.3% - 37.1% (20.2%) | | Decrease | | 393,291 | | | Market Approach | | Revenue Multiple | | 2.5x - 18.0x (7.8x) | | Increase | | 36,099 | | | Recent Transaction | | Transaction Price | | 100.3% - 107.5% (105.6%) | | Increase | | | | | | | | | | | | Common equity investments | $ | 151,151 | | | Market Approach | | Revenue Multiple | | 5.3x - 14.5x (11.3x) | | Increase | | 103,833 | | | Market Approach | | EBITDA Multiple | | 3.3x - 20.0x (13.1x) | | Increase | | 153 | | | Option Pricing Model | | Volatility | | 60.0% - 70.0% (69.1%) | | Increase | | 281 | | | Market Approach | | Gross Profit Multiple | | 10.0x - 10.0x (10.0x) | | Increase | | 62,517 | | | Market Approach | | AUM Multiple | | 1.1x - 1.1x (1.1x) | | Increase | | 138,010 | | | Recent Transaction | | Transaction Price | | 96.8% - 100.0% (97.9%) | | Increase | | 75,296 | | | Yield Analysis | | Market Yield | | 18.3% - 18.3% (18.3%) | | Decrease | | 3,448 | | | Market Approach | | N/A | | N/A | | N/A | | 778 | | | Discounted Cash Flow Analysis | | Discounted Factor | | 12.5% - 12.5% (12.5%) | | Decrease | | | | | | | | | | |
The Adviser, as valuation designee, typically determines the fair value of its performing Level 3 debt investments 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 interest, taxes, depreciation and amortization (“EBITDA”) or some combination thereof and comparable market transactions are typically 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 table below presents the carrying and fair values of the Company’s debt obligations as of the following periods: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2025 | | December 31, 2024 | | ($ in thousands) | Net Carrying Value | | Unamortized Debt Issuance Costs (Premium) | | Fair Value | | Net Carrying Value | | Unamortized Debt Issuance Costs (Premium) | | Fair Value | | Revolving Credit Facility | $ | 338,474 | | | $ | 26,535 | | | $ | 338,474 | | | $ | 298,329 | | | $ | 14,675 | | | $ | 298,329 | | | SPV Asset Facility I | 641,051 | | | 8,949 | | | 641,051 | | | 590,448 | | | 9,552 | | | 590,448 | | | SPV Asset Facility II | (4,272) | | | 4,272 | | | (4,272) | | | 295,247 | | | 4,753 | | | 295,247 | | | SPV Asset Facility III | 303,140 | | | 9,360 | | | 303,140 | | | — | | | — | | | — | | | SPV Asset Facility IV | (3,077) | | | 3,077 | | | (3,077) | | | — | | | — | | | — | | | CLO 2020-1 | 200,165 | | | 3,835 | | | 200,165 | | | 199,985 | | | 4,015 | | | 199,985 | | | Athena CLO II | 285,839 | | | 2,161 | | | 285,839 | | | — | | | — | | | — | | | Athena CLO IV | 237,554 | | | 2,446 | | | 237,554 | | | — | | | — | | | — | | | June 2025 Notes | — | | | — | | | — | | | 209,377 | | | 623 | | | 208,425 | | | December 2025 Notes | 650,710 | | | (710) | | | 646,750 | | | 651,495 | | | (1,495) | | | 643,500 | | | June 2026 Notes | 373,518 | | | 1,482 | | | 366,563 | | | 372,773 | | | 2,227 | | | 362,813 | | | January 2027 Notes | 297,611 | | | 2,389 | | | 284,250 | | | 296,855 | | | 3,145 | | | 281,250 | | | March 2028 Notes | 654,138 | | | 9,538 | | | 648,375 | | | — | | | — | | | — | | | September 2028 Notes | 74,415 | | | 585 | | | 75,000 | | | — | | | — | | | — | | | April 2029 Notes | 702,959 | | | 13,236 | | | 710,500 | | | — | | | — | | | — | | | Total Debt | $ | 4,752,225 | | | $ | 87,155 | | | $ | 4,730,312 | | | $ | 2,914,509 | | | $ | 37,495 | | | $ | 2,879,997 | |
The table below presents fair value measurements of the Company’s debt obligations as of the following periods: | | | | | | | | | | | | | ($ in thousands) | June 30, 2025 | | December 31, 2024 | | Level 1 | $ | — | | | $ | — | | | Level 2 | 2,731,438 | | | 1,495,988 | | | Level 3 | 1,998,874 | | | 1,384,009 | | | Total Debt | $ | 4,730,312 | | | $ | 2,879,997 | |
Financial Instruments Not Carried at Fair Value As of June 30, 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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