v3.25.4
Borrowings
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Borrowings Borrowings
The following table shows the Company's outstanding debt as of December 31, 2025 and December 31, 2024:
Liability
(in thousands)		December 31, 2025December 31, 2024
Total CommitmentBalance OutstandingUnused CommitmentTotal CommitmentBalance OutstandingUnused Commitment
Revolving Credit Facility$75,000 66,000 $9,000 $250,000 $88,000 $162,000 
2027 Notes75,000 75,000 — 75,000 75,000 — 
Total$150,000 $141,000 $9,000 $325,000 $163,000 $162,000 
Interest expense on these borrowings includes the interest cost charged on borrowings, the unused fee on the Credit Facility (as defined below), paying and administrative agent fees, and the amortization of deferred Credit Facility fees and expenses. These expenses are shown in the table below:
For the Year Ended December 31,
Interest Expense and Amortization of Fees
(in thousands)		202520242023
Revolving Credit Facility
Interest cost$6,375 $9,895 $9,759 
Unused fee405 848 264 
Amortization of costs and other fees1,265 999 918 
Revolving Credit Facility Total$8,045 $11,742 $10,941 
2027 Notes
Interest cost$4,395 $4,395 $4,395 
Amortization of costs and other fees197 185 173 
2027 Notes Total$4,592 $4,580 $4,568 
Total interest expense and amortization of fees$12,637 $16,322 $15,509 
Credit Facility
On July 15, 2020, the Company’s wholly-owned subsidiary, the Financing Subsidiary, as the borrower, entered into a secured revolving credit facility (as amended, the “Credit Facility”) pursuant to a Receivables Financing Agreement (as amended, the “Receivables Financing Agreement”), by and among the Financing Subsidiary, the Company, individually and as collateral manager and as equityholder, the lenders from time to time party thereto, Deutsche Bank AG, New York Branch (“DBNY”), as the facility agent, DBNY and MUFG Union Bank, N.A. (“MUFG”), as joint lead arrangers, Deutsche Bank Trust Company Americas, as paying agent and as collection account bank, the custodian party thereto, and Vervent Inc., as backup collateral manager. As of December 31, 2025, commitments available totaled $75.0 million from one lender, DBNY, subject to an accordion feature, which allows the Financing Subsidiary to request an increase in the size of the Credit Facility to an amount not to exceed $125.0 million (including by adding additional lenders under the Credit Facility), subject to certain conditions and the consent of DBNY, as the sole lender. The Credit Facility is collateralized by all of the assets of the Financing Subsidiary, including the loans and other investments acquired by the Financing Subsidiary from time to time and collections thereon.
As of December 31, 2025, the revolving period under the Credit Facility is scheduled to expire on July 15, 2027, subject to an extension with the consent of the lenders and early termination if an event of default occurs or other adverse events, specified in the Receivables Financing Agreement, occur. As of December 31, 2025, the scheduled maturity date for the Credit Facility is January 15, 2029, unless earlier terminated in accordance with the terms of the Receivables Financing Agreement. Advances are made under the Credit Facility pursuant to a borrowing base, which generally utilizes a 55% advance rate on the applicable net loan balance of assets held by the Financing Subsidiary, subject to excess concentrations and other restrictions set forth in the Receivables Financing Agreement. As of December 31, 2025, advances under the Credit Facility accrued interest at a per annum rate equal to the applicable margin plus the greater of 3-month Term SOFR and 0.50%, and were subject to certain minimum principal utilization amounts during the revolving period. As of December 31, 2025, the applicable margin equaled 3.05% during the revolving period, with an increase to 4.05% during the amortization period.
The Credit Facility includes customary representations and warranties and requires the Company and the Financing Subsidiary to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Borrowings under the Credit Facility are subject to the leverage restrictions contained in the 1940 Act. As of December 31, 2025 and December 31, 2024, the Company was in compliance with all covenants under the Credit Facility.
As of December 31, 2025 and December 31, 2024, the Company had outstanding borrowings under the Credit Facility of $66.0 million and $88.0 million, respectively, excluding deferred credit facility costs of $1.4 million and $2.0 million, respectively, which are included as assets in the Company’s consolidated statements of assets and liabilities. The book value of the Credit Facility approximates fair value due to the relatively short maturity, cash repayments and market interest rates of the instrument. The fair value of the Credit Facility would be categorized as Level 3 in the fair value hierarchy if determined as of the reporting date. During the year ended December 31, 2025, the Company had average outstanding borrowings under the Credit Facility of $61.6 million at a weighted average interest rate of 7.3%. During the year ended December 31, 2024, the Company had average outstanding borrowings under the Credit Facility of $83.3 million at a weighted average interest rate of 8.4%. As of December 31, 2025 and December 31, 2024, $219.2 million and $260.8 million of the Company’s assets were pledged for borrowings under the Credit Facility, respectively.
2027 Notes
On April 6, 2022, the Company issued $75.0 million in aggregate principal amount of senior unsecured notes due April 2027 with a fixed interest rate of 5.86% per year (the “2027 Notes”). The 2027 Notes were issued in a private placement to certain qualified institutional investors, pursuant to the terms of the Master Note Purchase Agreement, dated as of April 6, 2022 (the “Note Purchase Agreement”). The 2027 Notes will mature on April 6, 2027, unless redeemed, purchased or prepaid prior to such date in accordance with their terms. In the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the 2027 Notes will bear interest at a fixed rate of 6.86% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event is no longer continuing.
Interest on the 2027 Notes is due semiannually on April 6 and October 6 each year, beginning on October 6, 2022. The 2027 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, the Company is obligated to offer to prepay the 2027 Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The 2027 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company; provided however, in the event that the Company creates, incurs, assumes or permits to exist liens on or with respect to any of its property or assets in connection with future secured indebtedness of more than an aggregate principal amount of $25 million, the 2027 Notes will generally become secured concurrently therewith, equally and ratably with such indebtedness.
The Note Purchase Agreement contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the 1940 Act, a minimum asset coverage ratio of 1.50 to 1.00, a minimum interest coverage ratio of 1.25 to 1.00, and minimum stockholders’ equity requirement of $142.8 million, as adjusted upward by an amount equal to 65% of the net proceeds from the issuance of shares of the Company’s common stock subsequent to December 31, 2021. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of the Company or subsidiary guarantors, certain judgments and orders, certain events of bankruptcy, and breach of a key man clause relating to the Company’s Chief Executive Officer, James P. Labe, and the Company’s President and Chief Investment Officer, Sajal K. Srivastava.
As of December 31, 2025 and December 31, 2024, the Company was in compliance with all of the covenants under the 2027 Notes.
The 2027 Notes are recorded at amortized cost in the consolidated statements of assets and liabilities. Amortized cost includes $0.3 million of deferred issuance cost as of December 31, 2025, which is amortized and expensed over the five-year term of the 2027 Notes based on an effective yield method. As of December 31, 2025 and December 31, 2024, the fair value of the 2027 Notes was $74.9 million and $72.3 million, respectively, and would be categorized as Level 3 of the fair value hierarchy if determined as of the reporting date.
The following table shows additional information about the level in the fair value hierarchy of the Company’s liabilities as of December 31, 2025 and December 31, 2024:
Liability
(in thousands)		December 31, 2025December 31, 2024
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Credit Facility$— $— $66,000 $66,000 $— $— $88,000 $88,000 
2027 Notes— — 74,881 74,881 — — 72,277 72,277 
Total$— $— $140,881 $140,881 $— $— $160,277 $160,277