v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Investments
The Company values all investments in accordance with ASC Topic 820. ASC Topic 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity.
ASC Topic 820 establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Based on the observability of the inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments carried at fair value are classified and disclosed in one of the following three categories:
•Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.
•Level 2 – Valuations based on inputs other than quoted prices in active markets, including quoted prices for similar assets or liabilities, which are either directly or indirectly observable.
•Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. This includes situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or liability’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
The Board has designated MC Advisors as the Company’s valuation designee (the “Valuation Designee”). The Board is responsible for oversight of the Valuation Designee. The Valuation Designee has established a valuation committee to determine in good faith the fair value of the Company’s investments, based on input of the Valuation Designee’s management and personnel and independent valuation firms which are engaged at the direction of the valuation committee to assist in the valuation of certain portfolio investments lacking a readily available market quotation. The valuation committee determines fair values pursuant to a valuation policy approved by the Board and pursuant to a consistently applied valuation process.
With respect to investments for which market quotations are not readily available, the Valuation Designee undertakes a multi-step valuation process each quarter, as described below:
•the quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the investment professionals of the Valuation Designee responsible for the credit monitoring of the portfolio investment;
•the Valuation Designee engages independent valuation firms to conduct independent appraisals of a selection of investments for which market quotations are not readily available. The Company will consult with an independent valuation firm relative to each portfolio company at least once in every calendar year, but the independent appraisals are generally received quarterly for each investment;
•to the extent an independent valuation firm is not engaged to conduct an investment appraisal on an investment for which market quotations are not readily available in a particular quarter, the investment will be valued by the Valuation Designee;
•preliminary valuation conclusions are then documented and discussed with the valuation committee of the Valuation Designee;
•the valuation conclusions are approved by the valuation committee of the Valuation Designee; and
•a report prepared by the Valuation Designee is presented to the Board quarterly to allow the Board to perform its oversight duties of the valuation process and the Valuation Designee.
The accompanying consolidated schedules of investments held by the Company consist primarily of private debt instruments (“Level 3 debt”). The Valuation Designee generally uses the income approach to determine fair value for Level 3 debt where market quotations are not readily available, as long as it is appropriate. If there is deterioration in credit quality or a debt investment is in workout status, the Valuation Designee may consider other factors in determining the fair value, including the value attributable to the debt investment from the enterprise value of the portfolio company or the proceeds that would be received in a liquidation analysis. This liquidation analysis may include probability weighting of alternative outcomes. The Valuation Designee generally considers the Company’s Level 3 debt to be performing if the borrower is not in default, the borrower is remitting payments in a timely manner; the loan is in covenant compliance or is otherwise not deemed to be impaired. In determining the fair value of the performing Level 3 debt, the Valuation Designee considers fluctuations in current interest rates, the trends in yields of debt instruments with similar credit ratings, financial condition of the borrower, economic conditions and other relevant factors, both qualitative and quantitative. In the event that a Level 3 debt instrument is not performing, as defined above, the Valuation Designee will evaluate the value of the collateral utilizing the same framework described above for a performing loan to determine the value of the Level 3 debt instrument.
Under the income approach, discounted cash flow models are utilized to determine the present value of the future cash flow streams of its debt investments, based on future interest and principal payments as set forth in the associated loan agreements. In determining fair value under the income approach, the Valuation Designee also considers the following factors: applicable market yields and leverage levels, recent transactions, credit quality, prepayment penalties, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, and changes in the interest rate environment and the credit markets that generally may affect the price at which similar investments may be made.
Under the market approach, the enterprise value methodology is typically utilized to determine the fair value of an investment. There is no one methodology to estimate enterprise value and, in fact, for any one portfolio company, enterprise value is generally best expressed as a range of values, from which the Valuation Designee derives a single estimate of enterprise value. In estimating the enterprise value of a portfolio company, the Valuation Designee analyzes various factors consistent with industry practice, including but not limited to original transaction multiples, the portfolio company’s historical and projected financial results, applicable market trading and transaction comparables, applicable market yields and leverage levels, the nature and realizable value of any collateral, the markets in which the portfolio company does business, and comparisons of financial ratios of peer companies that are public. Typically, the enterprise values of private companies are based on multiples of earnings before interest, income taxes, depreciation and amortization (“EBITDA”), cash flows, net income, revenues, or in limited cases, book value.
In addition, for certain investments, the Valuation Designee may base its valuation on indicative bid and ask prices provided by an independent third-party pricing service. Bid prices reflect the highest price that the Company and others may be willing to pay. Ask prices represent the lowest price that the Company and others may be willing to accept. The Valuation Designee generally uses the midpoint of the bid/ask range as its best estimate of fair value of such investment.
As of June 30, 2025, the Valuation Designee determined, in good faith, the fair value of the Company’s portfolio investments in accordance with GAAP and the Company’s valuation procedures based on the facts and circumstances known by the Company and the Valuation Designee at that time, or reasonably expected to be known at that time.
Foreign Currency Forward Contracts
The valuation for the Company’s foreign currency forward contracts is based on the difference between the exchange rate associated with the forward contract and the exchange rate at the current period end. Foreign currency forward contracts would be categorized as Level 2 in the fair value hierarchy. As of both June 30, 2025 and December 31, 2024 there were no foreign currency forward contracts outstanding.
Fair Value Disclosures
The following tables present fair value measurements of investments, by major class according to the fair value hierarchy as of June 30, 2025 and December 31, 2024:
Fair Value Measurements
June 30, 2025Level 1Level 2Level 3Total
Investments:
Senior secured loans$— $— $270,091 $270,091 
Unitranche secured loans— — 2,183 2,183 
Junior secured loans— — 31,679 31,679 
Equity investments— — 33,590 33,590 
Investments measured at NAV (1) (2)
— — — 30,157 
Total investments$— $— $337,543 $367,700 
Fair Value Measurements
December 31, 2024Level 1Level 2Level 3Total
Investments:
Senior secured loans$— $— $357,994 $357,994 
Unitranche secured loans— — 3,862 3,862 
Junior secured loans— — 29,634 29,634 
Equity investments61 — 32,767 32,828 
Investments measured at NAV (1) (2)
— — — 32,730 
Total investments$61 $— $424,257 $457,048 
________________________________________________________
(1)Certain investments that are measured at fair value using the NAV 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 on the consolidated statements of assets and liabilities.
(2)Represents the Company’s investment in LLC equity interests in SLF. The fair value of this investment has been determined using the NAV of the Company’s ownership interest in SLF’s members’ capital.
Senior secured loans, unitranche secured loans and junior secured loans are collateralized by tangible and intangible assets of the borrowers. These investments include loans to entities that have some level of challenge in obtaining financing from other, more conventional institutions, such as a bank. Interest rates on these loans are either fixed or floating, and are based on current market conditions and credit ratings of the borrower. Excluding loans on non-accrual status, the contractual interest rates on the loans in the Company’s investment portfolio ranged from 4.44% to 19.50% at June 30, 2025 and 4.46% to 19.59% at December 31, 2024. The maturity dates on the loans outstanding at June 30, 2025 range between August 2025 and March 2031.
The following tables provide a reconciliation of the beginning and ending balances for investments at fair value that use Level 3 inputs for the three and six months ended June 30, 2025:
Investments
Senior
secured loans		Unitranche
secured loans		Junior
secured loans		Equity
investments		Total Level 3
investments
Balance as of March 31, 2025$330,893 $2,183 $32,017 $33,561 $398,654 
Net realized gain (loss) on investments— — — 77 77 
Net change in unrealized gain (loss) on investments(1,853)(2)(1,768)139 (3,484)
Purchases of investments and other adjustments to cost (1)
4,716 2 523 81 5,322 
Proceeds from principal payments and sales of investments (2)
(62,754)— — (272)(63,026)
Reclassifications (3)
(906)— 906 — — 
Balance as of June 30, 2025$270,096 $2,183 $31,678 $33,586 $337,543 
Investments
Senior
secured loans		Unitranche
secured loans		Junior
secured loans		Equity
investments		Total Level 3
investments
Balance as of December 31, 2024$357,994 $3,862 $29,634 $32,767 $424,257 
Net realized gain (loss) on investments— — — 29 29 
Net change in unrealized gain (loss) on investments(3,676)(9)(1,892)(287)(5,864)
Purchases of investments and other adjustments to cost (1)
19,980 6 3,030 1,349 24,365 
Proceeds from principal payments and sales of investments (2)
(103,296)(1,676)— (272)(105,244)
Reclassifications (3)
(906)— 906 — — 
Balance as of June 30, 2025$270,096 $2,183 $31,678 $33,586 $337,543 
________________________________________________________
(1)Includes purchases of new investments, effects of refinancing and restructurings, premium and discount accretion and amortization and PIK interest capitalized.
(2)Represents net proceeds from investments sold and principal paydowns received.
(3)Represents non-cash reclassification of investment type due to a restructuring.
The following tables provide a reconciliation of the beginning and ending balances for investments at fair value that use Level 3 inputs for the three and six months ended June 30, 2024:
Investments
Senior
secured loans		Unitranche
secured loans		Junior
secured loans		Equity
investments		Total Level 3
investments
Balance as of March 31, 2024$404,051 $6,091 $27,427 $29,310 $466,879 
Net realized gain (loss) on investments50 — — — 50 
Net change in unrealized gain (loss) on investments315 (1)(2,591)(947)(3,224)
Purchases of investments and other adjustments to cost (1)
22,437 22 1,553 103 24,115 
Proceeds from principal payments and sales of investments (2)
(33,067)(2,252)(5)(6)(35,330)
Reclassifications (3)
(3,844)— 2,304 1,540 — 
Balance as of June 30, 2024$389,942 $3,860 $28,688 $30,000 $452,490 
Investments
Senior
secured loans		Unitranche
secured loans		Junior
secured loans		Equity
investments		Total Level 3
investments
Balance as of December 31, 2023$388,882 $13,877 $26,594 $25,654 $455,007 
Net realized gain (loss) on investments50 — — 4 54 
Net change in unrealized gain (loss) on investments(1,342)(102)(1,178)(3,020)(5,642)
Purchases of investments and other adjustments to cost (1)
46,013 122 2,640 2,048 50,823 
Proceeds from principal payments and sales of investments (2)
(37,105)(10,037)(265)(10)(47,417)
Reclassifications (3)
(6,556)— 897 5,659 — 
Transfers in (out) of Level 3 (4)
— — — (335)(335)
Balance as of June 30, 2024$389,942 $3,860 $28,688 $30,000 $452,490 
________________________________________________________
(1)Includes purchases of new investments, effects of refinancing and restructurings, premium and discount accretion and amortization and PIK interest capitalized.
(2)Represents net proceeds from investments sold and principal paydowns received.
(3)Represents non-cash reclassification of investment type due to a restructuring.
(4)Represents non-cash transfers between fair value categories due to a restructuring.
The total net change in unrealized gain (loss) on investments included on the consolidated statements of operations for the three and six months ended June 30, 2025, attributable to Level 3 investments still held at June 30, 2025 was $(3,401) and $(5,366), respectively. The total net change in unrealized gain (loss) on investments included on the consolidated statements of operations for the three and six months ended June 30, 2024, attributable to Level 3 investments still held at June 30, 2024 was $(2,996) and $(5,499), respectively. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in or out of Level 3 as of the beginning of the period in which the reclassifications occur. During the three and six months ended June 30, 2025 and the three months ended June 30, 2024, there were no investments transferred between Levels 1, 2 and 3. There was one transfer from Level 3 to Level 1 as a result of a restructuring during the six months ended June 30, 2024.
Significant Unobservable Inputs
ASC Topic 820 requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within the fair value hierarchy. Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company and as such, the disclosures provided below exclude those investments valued in that manner. The tables below are not intended to be all-inclusive, but rather to provide information on significant unobservable inputs and valuation techniques used by the Valuation Designee.
The following tables present quantitative information about the valuation techniques and significant unobservable inputs of the Company's Level 3 investments as of June 30, 2025:
Fair ValueValuation TechniqueUnobservable
Input
Weighted Average Mean (1)
Range
Minimum
Maximum
Assets: 
Senior secured loans$177,601 Discounted cash flowEBITDA multiples
11.0x
5.0x
34.5x
Market yields12.3%7.7%25.5%
Senior secured loans60,090 Discounted cash flowRevenue multiples
7.1x
0.4x
11.0x
Market yields10.1%8.7%15.5%
Senior secured loans18,266 Enterprise valueBook value multiples
1.3x
1.3x
1.3x
Senior secured loans7,659 Enterprise valueEBITDA multiples
6.8x
5.0x
12.0x
Senior secured loans4,645 LiquidationProbability weighting of alternative outcomes49.2%32.2%81.3%
Senior secured loans1,830 Enterprise valueRevenue multiples
3.1x
0.2x
5.0x
Unitranche secured loans2,183 Discounted cash flowRevenue multiples
6.0x
6.0x
6.0x
Market yields13.2%13.2%13.2%
Junior secured loans22,262 Discounted cash flowMarket yields13.3%13.3%13.3%
Junior secured loans5,866 Enterprise valueRevenue multiples
3.3x
0.2x
5.0x
Junior secured loans2,208 LiquidationProbability weighting of alternative outcomes265.0%265.0%265.0%
Junior secured loans971 Discounted cash flowRevenue multiples
0.2x
0.2x
0.2x
Market yields19.8%19.8%19.8%
Junior secured loans372 Enterprise valueEBITDA multiples
12.0x
12.0x
12.0x
Equity securities22,782 Enterprise valueEBITDA multiples
9.3x
6.3x
17.0x
Equity securities9,299 Enterprise valueRevenue multiples
2.6x
0.4x
11.0x
Equity securities1,509 Option pricing modelVolatility65.9%24.0%70.0%
Total Level 3 Assets$337,543 
________________________________________________________
(1)The weighted average mean of unobservable inputs is based on the fair value of investments.
The following tables present quantitative information about the valuation techniques and significant unobservable inputs of the Company's Level 3 investments as of December 31, 2024:
Fair ValueValuation TechniqueUnobservable
Input
Weighted Average Mean (1)
Range
Minimum
Maximum
Assets:
Senior secured loans$211,778 Discounted cash flowEBITDA multiples
11.4x
4.8x
35.9x
Market yields12.6%8.8%21.8%
Senior secured loans106,963 Discounted cash flowRevenue multiples
6.4x
1.2x
13.0x
Market yields10.5%8.5%14.0%
Senior secured loans18,437 Enterprise valueBook value multiples
1.4x
1.4x
1.4x
Senior secured loans9,823 Enterprise valueRevenue multiples
2.9x
0.3x
5.3x
Senior secured loans5,518 LiquidationProbability weighting of alternative outcomes58.9%32.2%87.2%
Senior secured loans4,507 Enterprise valueEBITDA multiples
10.1x
6.5x
13.0x
Unitranche secured loans3,862 Discounted cash flowRevenue multiples
6.3x
6.3x
6.3x
Market yields13.9%13.9%13.9%
Junior secured loans19,392 Discounted cash flowMarket yields12.6%12.6%12.6%
Junior secured loans6,292 Enterprise valueRevenue multiples
4.3x
0.3x
5.3x
Junior secured loans2,330 LiquidationProbability weighting of alternative outcomes279.6%279.6%279.6%
Junior secured loans921 Discounted cash flowRevenue multiples
0.2x
0.2x
0.2x
Market yields
18.5%18.5%18.5%
Equity investments19,560 Enterprise valueEBITDA multiples
8.9x
6.3x
16.0x
Equity investments10,427 Enterprise valueRevenue multiples
2.2x
0.4x
11.0x
Equity investments1,923 Option pricing modelVolatility55.2%24.0%65.0%
Total Level 3 Assets$421,733 
(2)
________________________________________________________
(1)The weighted average mean of unobservable inputs is based on the fair value of investments.
(2)Excludes investments of $2,524 at fair value where valuation (unadjusted) is obtained from a third-party pricing service or broker quote for which such disclosure is not required.
The significant unobservable input used in the income approach of fair value measurement of the Company’s investments is the discount rate used to discount the estimated future cash flows expected to be received from the underlying investment, which includes both future principal and interest payments. Increases (decreases) in the discount rate would result in a decrease (increase) in the fair value estimate of the investment. Included in the consideration and selection of discount rates are the following factors: risk of default, rating of the investment and comparable investments, and call provisions.
The significant unobservable inputs used in the market approach of fair value measurement of the Company’s investments are the market multiples of EBITDA or revenue of the comparable guideline public companies. The Valuation Designee selects a population of public companies for each investment with similar operations and attributes of the portfolio company. Using these guideline public companies’ data, a range of multiples of enterprise value to EBITDA or revenue is calculated. The Valuation Designee selects percentages from the range of multiples for purposes of determining the portfolio company’s estimated enterprise value based on said multiple and generally the latest twelve months EBITDA or revenue of the portfolio company (or other meaningful measure). Increases (decreases) in the multiple will result in an increase (decrease) in enterprise value, resulting in an increase (decrease) in the fair value estimate of the investment.
Other Financial Assets and Liabilities
ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts of its other financial instruments such as cash and cash equivalents, receivables and payables approximate the fair value of such items due to the short maturity of such instruments.
Fair value of the Company’s debt facilities is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if applicable. The following are the carrying values and fair values of the Company’s debt as of June 30, 2025 and December 31, 2024:
As of June 30, 2025As of December 31, 2024
Carrying Value(1)
Fair Value
Carrying Value(1)
Fair Value
Revolving Credit Facility$79,080 $79,080 $162,872 $162,872 
2026 Notes129,498 127,830 129,103 124,161 
Total Debt$208,578 $206,910 $291,975 $287,033 
________________________________________________________
(1)Represents the principal amount outstanding, less unamortized debt issuance costs.
The below table presents fair value measurements of the Company’s debt obligations according to the fair value hierarchy as of June 30, 2025 and December 31, 2024:
June 30, 2025December 31, 2024
Level 1$— $— 
Level 2— — 
Level 3206,910 287,033 
Total Debt$206,910 $287,033