v3.25.4
Derivatives
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives

Note 7. Derivatives

 

The Company is subject to foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The value of foreign investments held by the Company may be significantly affected by changes in foreign currency exchange rates. The dollar value of a foreign security generally decreases when the value of the dollar rises against the foreign currency in which the security is denominated and tends to increase when the value of the dollar declines against such foreign currency.

The Company may enter into forward currency exchange contracts to reduce the Company’s exposure to foreign currency exchange rate fluctuations in the value of foreign currencies, as described in Note 2. Summary of Significant Accounting Policies. The fair value of derivative contracts open as of December 31, 2025 and December 31, 2024 is included on the Consolidated Schedules of Investments by contract. The Company had collateral receivable of $4.2 million and $0.8 million as of December 31, 2025 and December 31, 2024, respectively, with the counterparties on foreign currency exchange contracts. Collateral amounts posted are included in collateral on forward currency exchange contracts on the Consolidated Statements of Assets and Liabilities. Collateral payable is included in collateral payable on forward currency exchange contracts on the Consolidated Statements of Assets and Liabilities.

For the years ended December 31, 2025, December 31, 2024 and for the period November 28, 2023 through December 31, 2023, the Company’s average U.S. dollar notional exposure to forward currency exchange contracts was $53.5 million, $16.2 million, and $8.3 million, respectively. For the years ended December 31, 2025, December 31, 2024 and for the period November 28, 2023 through December 31, 2023, the Company’s average notional exposure for interest rate swaps was $110.0 million, $0.0 million and $0.0 million, respectively. By using derivative instruments, the Company is exposed to the counterparty’s credit risk—the risk that derivative counterparties may not perform in accordance with the contractual provisions offset by the value of any collateral received. The Company’s exposure to credit risk associated with counterparty non-performance is limited to collateral posted and the unrealized gains inherent in such transactions that are recognized in the Consolidated Statements of Assets and Liabilities. The Company minimizes counterparty credit risk through credit monitoring procedures, executing master netting arrangements and managing margin and collateral requirements, as appropriate.

The Company presents forward currency exchange contracts on a net basis by counterparty on the Consolidated Statements of Assets and Liabilities. The Company has elected not to offset assets and liabilities in the Consolidated Statements of Assets and Liabilities that may be received or paid as part of collateral arrangements, even when an enforceable master netting arrangement or other arrangement is in place that provides the Company, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations.

The following table presents both gross and net information about derivative instruments eligible for offset in the Consolidated Statements of Assets and Liabilities as of December 31, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net amount of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross amount of

 

 

assets or

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross amount of

 

 

(liabilities)

 

 

(liabilities)

 

 

 

 

 

 

 

 

 

 

 

Account in the

 

assets on the

 

 

on the

 

 

presented on the

 

 

 

 

 

 

 

 

 

 

 

consolidated

 

consolidated

 

 

consolidated

 

 

consolidated

 

 

 

 

 

 

 

 

 

statements of

 

statements of

 

 

statements of

 

 

statements of

 

 

Cash collateral

 

 

 

 

 

 

 

assets

 

assets and

 

 

assets and

 

 

assets and

 

 

paid

 

 

Net

 

Counterparty

 

and liabilities

 

liabilities

 

 

liabilities

 

 

liabilities

 

 

(received) (1)

 

 

amounts (2)

 

Bank of New York

 

Unrealized depreciation on forward currency exchange contracts

 

$

 

81

 

 

 $

 

(2,264

)

 

$

 

(2,183

)

 

$

 

2,183

 

 

$

 

—

 

BNP Paribas

 

Unrealized depreciation on forward currency exchange contracts

 

$

 

19

 

 

 $

 

(346

)

 

$

 

(327

)

 

$

 

—

 

 

$

 

(327

)

Wells Fargo

 

Unrealized depreciation on forward currency exchange contracts

 

$

 

—

 

 

 $

 

(271

)

 

$

 

(271

)

 

$

 

—

 

 

$

 

(271

)

BNP Paribas

 

Interest rate swap

 

$

 

447

 

 

 $

 

—

 

 

$

 

447

 

 

$

 

—

 

 

$

 

447

 

 

(1)
Amount excludes excess cash collateral paid.
(2)
Net amount represents the net amount due (to) from counterparty in the event of default based on the contractual set-off rights under the agreement. Net amount excludes any over-collateralized amounts.

The following table presents both gross and net information about derivative instruments eligible for offset in the Consolidated Statements of Assets and Liabilities as of December 31, 2024:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net amount of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross amount of

 

 

assets or

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross amount of

 

 

(liabilities)

 

 

(liabilities)

 

 

 

 

 

 

 

 

 

 

 

Account in the

 

assets on the

 

 

on the

 

 

presented on the

 

 

 

 

 

 

 

 

 

 

 

consolidated

 

consolidated

 

 

consolidated

 

 

consolidated

 

 

 

 

 

 

 

 

 

statements of

 

statements of

 

 

statements of

 

 

statements of

 

 

Cash collateral

 

 

 

 

 

 

 

assets

 

assets and

 

 

assets and

 

 

assets and

 

 

paid

 

 

Net

 

Counterparty

 

and liabilities

 

liabilities

 

 

liabilities

 

 

liabilities

 

 

(received) (1)

 

 

amounts (2)

 

Bank of New York

 

Unrealized appreciation on forward currency exchange contracts

 

$

 

1,492

 

 

$

 

—

 

 

$

 

1,492

 

 

$

 

—

 

 

$

 

1,492

 

 

(1)
Amount excludes excess cash collateral paid.
(2)
Net amount represents the net amount due (to) from counterparty in the event of default based on the contractual set-off rights under the agreement. Net amount excludes any over-collateralized amounts.

The effect of transactions in derivative instruments to the Consolidated Statements of Operations during the years ended December 31, 2025, 2024 and 2023 were as follows:

 

 

 

For the Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Net realized gain on forward currency exchange contracts

 

$

 

68

 

 

$

 

133

 

 

$

 

48

 

Net change in unrealized appreciation on forward currency exchange contracts

 

 

 

(4,273

)

 

 

 

1,582

 

 

 

 

(90

)

Total net realized and unrealized gain (loss) on forward currency exchange contracts

 

$

 

(4,205

)

 

$

 

1,715

 

 

$

 

(42

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Included in total net gains (losses) on the Consolidated Statements of Operations were gains (losses) of $4.6 million, $(1.6) million and $0.1 million related to realized and unrealized gains and losses on investments, foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates for the years ended December 31, 2025, 2024 and 2023, respectively. Including the total net realized and unrealized gains (losses) on forward currency exchange contracts of $(4.2) million, $1.7 million and $(0.0) million, respectively, included in the above table, the net impact of foreign currency on total net gains (losses) on the Consolidated Statements of Operations is $0.4 million, $0.1 million and $0.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Company's interest rate swaps have been designated in a qualifying hedge accounting relationship. Net realized and unrealized gains and losses for the year ended December 31, 2025, for the Company’s interest rate swaps, are in the following locations in the Consolidated Statement of Operations:

 

 

 

For the Year Ended December 31,

 

Financial Statement Location

 

 

2025

 

2024

 

2023

 

 

Interest rate swaps

 

$

136

 

$

—

 

$

—

 

Interest and debt financing expenses

Hedged items

 

 

62

 

 

—

 

 

—

 

Interest and debt financing expenses