Borrowings |
12 Months Ended | ||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||
| Borrowings [Abstract] | |||||||||||||||||||||
| BORROWINGS | 6. BORROWINGS
In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage ratio, as defined in the 1940 Act, is at least 150% after such borrowing. As of December 31, 2025, the Company’s asset coverage ratio was 318.3%. Under the 1940 Act, any preferred stock issued by the Company, including the Preferred Stock, will constitute a “senior security” for purposes of the 150% asset coverage test. See Note 7 for further discussion of the Preferred Stock.
On September 5, 2025, the Company entered into a Revolving Credit and Security Agreement (the “Credit Facility Agreement”) for the Credit Facility by and among RCC SPV, as borrower, the Company, as servicer, Atlas, as administrative agent, Atlas Securitized Products, L.P., as lead arranger, U.S. Bank Trust Company, National Association, as collateral agent and collateral administrator, U.S. Bank National Association, as custodian and as document custodian, each of the managing agents party thereto from time to time, and each of the conduit lenders and institutional lenders party thereto from time to time. The Credit Facility provides for $150 million of initial commitments with (x) a committed accordion feature pursuant to which the commitments shall be increased to $250 million, at the Company’s option with 15 business days’ notice, or by no later than the first anniversary of the closing date of the Credit Facility, and (y) an uncommitted accordion feature that allows for commitments up to $500 million from new and existing lenders on the same terms as the existing commitments, subject to market conditions. Advances under the Credit Facility bear interest at one-month Term SOFR plus an applicable margin of 2.00% during the revolving period. Subject to certain performance conditions, the applicable margin could increase to 2.25% during the revolving period and could range up to 2.50% during the amortization or “End of Life Option” periods (as defined in the Credit Facility Agreement). The Credit Facility Agreement provides for an unused commitment fee of 0.50% per annum on the unused commitments up to 50% of the commitments and 0.75% on the unused commitments in excess of 50% of the commitments, as well as other customary fees, from the effective date of the Credit Facility through September 5, 2028. The Credit Facility matures on September 5, 2030; provided, however, that RCC SPV and Atlas may mutually agree to extend the maturity date to September 5, 2032 pursuant to the “End of Life Option” under the Credit Facility Agreement.
As of December 31, 2025, the Company had $77,800 in borrowings outstanding with $72,200 of availability under the Credit Facility and were accruing interest based on a weighted average interest rate of 6.05%.
The Credit Facility Agreement contains customary terms and conditions, including affirmative and negative covenants, including a maximum advance rate test and an interest coverage ratio test of a minimum of 125%. The Credit Facility Agreement also contains customary events of default including, without limitation, nonpayment, misrepresentation of representations and warranties in a material respect, breach of covenant, bankruptcy, and change of control, with customary cure and notice provisions.
RCC SPV’s obligations to the lenders are secured by a first lien interest in all of its assets and a pledge of the equity interests of RCC SPV owned by the Company but are otherwise non-recourse to the Company.
The Credit Facility is recorded in the balance sheet on an amortized cost basis. The fair value of the Credit Facility approximates its carrying value due to its recent origination and because the Credit Facility is a floating rate facility that reprices to a market rate frequently. The fair value is categorized as Level 2 under ASC 820. For the period from September 5, 2025 (commencement of operations) to December 31, 2025, the Company incurred financing costs of $2,954 in conjunction with the Credit Facility, which have been recorded as a deduction to the carrying value of the Credit Facility liability and are being amortized into interest expense on a straight-line basis through the maturity date of the Credit Facility.
For the period from September 5, 2025 (commencement of operations) to December 31, 2025, the Company incurred total interest expense of $1,987, which includes $190 of amortization of deferred financing costs.
The following summarizes the reconciliation of the carrying value of the Credit Facility as of December 31, 2025:
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