v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date.

The fair value hierarchy under ASC 820 prioritizes the inputs to valuation methodology used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The levels used for classifying investments are not necessarily an indication of the risk associated with investing in these securities. The three levels of the fair value hierarchy are as follows:

•Level 1: Inputs to the valuation methodology that reflect unadjusted quoted prices available in active markets for identical assets or liabilities as of the reporting date.
•Level 2: Inputs to the valuation methodology other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date.
•Level 3: Inputs to the valuation methodology are unobservable and significant to overall fair value measurement.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Adviser’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 investment. 

In addition to using the above inputs in investment valuations, the Company applies the valuation policy approved by its Board that is consistent with ASC 820. Consistent with the valuation policy, the Company evaluates the source of the inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value.

Investments whose values are based on the listed closing price quoted on the securities’ principal exchange are classified within Level 1 and include active listed equities. The Adviser does not adjust the quoted price for such instruments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include investment-grade corporate bonds, structured products, and certain bank loans, less liquid listed equities, and high yield bonds. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Investments classified within Level 3 have unobservable inputs, as they trade infrequently, or not at all. When observable prices are not available for these investments, the Adviser uses one or more valuation techniques (e.g., the market approach and the income approach) of which sufficient and reliable data is available. Within Level 3, the use of the market approach generally consists of using comparable market data, while the use of the income approach generally consists of the net present value of estimated future cash flows, which may be adjusted as appropriate for liquidity, credit, market and/or other risk factors.

Investments in senior loans primarily include first and second lien term loans, delayed draws, revolving credit and other secured debt. The Adviser analyzes enterprise value based on the weighted average of discounted cash flows, public comparables and merger and acquisition comparables. This analysis is done to ensure, among other things, that the investments have adequate collateral and asset coverage. Once the investment is determined to have adequate asset coverage, the Adviser monitors yields for senior loan investments made from the time of purchase to the month end average yields for similar investments and risk profiles. The Company uses market data, including newly funded transactions, and secondary market data with respect to high-yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield. The change in yield is utilized by the Adviser to discount the anticipated cash flows of the debt investment in order to arrive at a fair value. Further, the Adviser adjusts for material changes in the underlying fundamentals of the
issuer, including changes in leverage, as necessary. If the investment does not have adequate coverage, a tranched valuation approach is considered.

Derivative Instruments: Derivative instruments can be exchange-traded or privately negotiated over the-counter (“OTC”) and include forward currency contracts and swap contracts. Forwards currency contracts and swap contracts are valued by the Adviser using observable inputs, such as market-based quotations received from the counterparty, dealers or brokers, whenever available and considered reliable. In instances where models are used, the value of an OTC derivative depends upon the contractual terms of, and specific risks inherent in the contract, as well as the availability and reliability of observable inputs. Such inputs include market prices for reference securities, yield curves, volatility assumptions and correlations of such inputs. Certain OTC derivatives can generally be corroborated by market data and are therefore classified within Level 1 or Level 2 of the fair value hierarchy depending on whether or not they are deemed to be actively traded.

Further inputs considered by the Adviser in estimating the value of investments may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt capital markets (by the investment or other comparable investments), whether the loan contains call protection and changes in financial ratios or cash flows. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Adviser in the absence of market information. The fair value measurement of Level 3 investments does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Adviser due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Company’s Consolidated Results of Operations.

Rule 2a-5 under the 1940 Act establishes requirements for determining fair value in good faith for purposes of the 1940 Act. The rule permits boards, subject to board oversight and certain other conditions, to designate certain parties to perform the fair value determinations. In accordance with this rule, the Company’s Board of Trustees has designated the Company’s Adviser as the valuation designee primarily responsible for the valuation of the Company’s investments, subject to the oversight of the Board of Trustees.

The following tables present the fair value hierarchy of investments and cash equivalents:

March 31, 2026
Level 1Level 2Level 3Total
First lien debt$— $1,507,897 $22,351,784 $23,859,681 
Second lien debt— — 27,742 27,742 
Other secured debt— — 228,097 228,097 
Unsecured debt— 6,254 48,196 54,450 
Structured finance investments— 53,745 30,458 84,203 
Equity investments— 21 327,445 327,466 
Total investments— 1,567,917 23,013,722 24,581,639 
Investments measured at NAV(1)
— — — 426,214 
Total$— $1,567,917 $23,013,722 $25,007,853 
Cash equivalents$322,919 $— $— $322,919 
December 31, 2025
Level 1Level 2Level 3Total
First lien debt$— $1,651,049 $22,744,446 $24,395,495 
Second lien debt— — 27,881 27,881 
Other secured debt— — 226,763 226,763 
Unsecured debt— 13,336 46,809 60,145 
Structured finance investments— 58,926 29,738 88,664 
Equity investments— 21 122,207 122,228 
Total investments— 1,723,332 23,197,844 24,921,176 
Investments measured at NAV(1)
— — — 416,244 
Total$— $1,723,332 $23,197,844 $25,337,420 
Cash equivalents$403,602 $— $— $403,602 
(1)Includes investment in ULTRA III (refer to Note 11). Certain investments that are measured at fair value using the NAV practical expedient 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 change in the fair value of investments for which Level 3 inputs were used to determine fair value:

Three Months Ended March 31, 2026
First Lien DebtSecond Lien DebtOther Secured DebtUnsecured DebtStructured Finance InvestmentsEquity InvestmentsTotal Investments
Fair value, beginning of period$22,744,446 $27,881 $226,763 $46,809 $29,738 $122,207 $23,197,844 
Purchases of investments(1)
1,216,113 77 33,415 1,626 760 209,365 1,461,356 
Proceeds from principal repayments and sales of investments(1,432,770)— (29,442)— — (1,586)(1,463,798)
Accretion of discount/amortization of premium22,894 64 504 47 — — 23,509 
Net realized gain (loss)17,545 — 465 — — — 18,010 
Net change in unrealized appreciation (depreciation)(222,865)(280)(3,608)(286)(40)(2,541)(229,620)
Transfers in(2)
10,710 — — — — — 10,710 
Transfers out(2)
(4,289)— — — — — (4,289)
Fair value, end of period$22,351,784 $27,742 $228,097 $48,196 $30,458 $327,445 $23,013,722 
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of March 31, 2026
$(215,042)$(280)$(3,254)$(286)$(40)$(2,541)$(221,443)
(1)Purchases include PIK interest and dividends, if applicable.
(2)Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three months ended March 31, 2026, transfers out of level 3 of $(4.3) million were due to an increase in the number of market quotations and/or an increase in the reliability of market quotations obtained by the Adviser. For the three months ended March 31, 2026, transfers into level 3 of $10.7 million were due to a decrease in the number of market quotations and/or a decrease in the reliability of market quotations obtained by the Adviser.
Three Months Ended March 31, 2025
First Lien DebtSecond Lien DebtOther Secured DebtUnsecured DebtEquity InvestmentsTotal Investments
Fair value, beginning of period$14,353,422 $31,340 $68,501 $32,826 $60,471 $14,546,560 
Purchases of investments(1)
2,240,791 — 889 1,139 11,927 2,254,746 
Proceeds from principal repayments and sales of investments(251,603)(4,470)(5,416)— (656)(262,145)
Accretion of discount/amortization of premium16,878 8 183 5 — 17,074 
Net realized gain (loss)(13,104)(4,874)— — 588 (17,390)
Net change in unrealized appreciation (depreciation)81,462 5,026 95 (213)229 86,599 
Transfers in(2)
— — — — — — 
Transfers out(2)
(38,097)— — — — (38,097)
Fair value, end of period$16,389,749 $27,030 $64,252 $33,757 $72,559 $16,587,347 
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of March 31, 2025
$75,562 $5,047 $95 $(213)$594 $81,085 
(1)Purchases include PIK interest and dividends, if applicable.
(2)Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three months ended March 31, 2025, transfers out of level 3 were primarily due to an increase in the number of market quotations and/or an increase in the reliability of market quotations obtained by the Adviser.

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments. The tables are not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value.

March 31, 2026
Range
Weighted Average(2)
Fair Value(1)
Valuation TechniqueUnobservable InputLowHigh
Investments in first lien debt$18,390,024 Yield analysisDiscount rate5.92 %45.92 %9.49 %
159,166 Discounted cash flowDiscount rate9.50 %20.00 %15.46 %
Exit multiple
2.90x
 10.21x
8.68x
18,886 Recovery analysisRecovery rate41.70 %41.70 %41.70 %
Investments in second lien debt25,000 Yield analysisDiscount rate8.67 %8.67 %8.67 %
2,742 Discounted cash flowDiscount rate9.50 %9.50 %9.50 %
Exit multiple
8.48x
8.48x
8.48x
Investments in other secured debt200,784 Yield analysisDiscount rate8.49 %11.55 %9.98 %
Investments in unsecured debt37,533 Yield analysisDiscount rate12.43 %17.58 %14.65 %
10,570 Discounted cash flowDiscount rate17.00 %17.00 %17.00 %
Exit multiple
9.00x
9.00x
9.00x
93 Recovery analysisRecovery rate5.25 %5.25 %5.25 %
Investments in structured finance obligations - debt instruments30,459 Yield analysisDiscount rate6.39 %11.88 %10.65 %
Investments in preferred equity75,570 Yield analysisDiscount rate10.30 %19.64 %16.46 %
12,682 Discounted cash flowDiscount rate9.50 %20.00 %12.16 %
Exit multiple
 8.75x
10.00x
 9.68x
Investments in common equity16,634 Yield analysisDiscount rate8.00 %15.00 %10.82 %
35,097 Discounted cash flowDiscount rate6.83 %17.00 %11.00 %
Exit multiple
 5.67x
 10.21x
8.31x
Cap rate8.03 %8.03 %8.03 %
December 31, 2025
Range
Weighted Average(2)
Fair Value(1)
Valuation TechniqueUnobservable InputLowHigh
Investments in first lien debt$16,911,655 Yield analysisDiscount rate6.06 %37.01 %9.56 %
99,057 Discounted cash flowDiscount rate9.50 %20.00 %12.99 %
Exit multiple
2.90x
 10.20x
9.50x
18,556 Recovery analysisRecovery rate43.91 %43.91 %43.91 %
Investments in second lien debt25,216 Yield analysisDiscount rate8.56 %8.56 %8.56 %
2,665 Discounted cash flowDiscount rate9.50 %9.50 %9.50 %
Exit multiple
8.48x
8.48x
8.48x
Investments in other secured debt132,515 Yield analysisDiscount rate8.62 %15.91 %10.85 %
Investments in unsecured debt36,454 Yield analysisDiscount rate12.72 %17.66 %14.66 %
10,262 Discounted cash flowDiscount rate16.00 %16.00 %16.00 %
Exit multiple
9.00x
9.00x
9.00x
93 Recovery analysisRecovery rate5.42 %5.42 %5.42 %
Investments in structured finance obligations - debt instruments29,738 Yield analysisDiscount rate6.23 %12.24 %10.88 %
Investments in preferred equity69,922 Yield analysisDiscount rate8.60 %24.23 %17.89 %
13,125 Discounted cash flowDiscount rate9.50 %20.00 %12.25 %
Exit multiple
8.75x
10.00x
9.67x
Investments in common equity9,751 Yield analysisDiscount rate8.00 %8.00 %8.00 %
27,409 Discounted cash flowDiscount rate7.31 %20.00 %12.29 %
Exit multiple
5.55x
11.50x
9.60x
Cap rate8.29 %8.29 %8.29 %
(1)As of March 31, 2026, included within the fair value of Level 3 assets of $23,013,722 is an amount of $3,998,482 for which the Adviser did not develop the unobservable inputs (examples include third-party pricing and transaction prices). As of December 31, 2025, included within the fair value of Level 3 assets of $23,197,844 is an amount of $5,811,426 for which the Adviser did not develop the unobservable inputs (examples include third-party pricing and transaction prices).
(2)Weighted averages are calculated based on fair value of investments.

The significant unobservable input used in the yield analysis is the discount rate based on comparable market yields. The significant unobservable inputs used in the income approach are the discount rate used to discount the estimated future cash flows expected to be received from the underlying investment and the exit multiple used to calculate the terminal value of the underlying investment. Significant increases in discount rates would result in a significantly lower fair value measurement and increases or decreases in exit multiples would have an increase or decrease, respectively, in the fair value. The significant unobservable input used in the recovery analysis is the recovery rate. The recovery rate represents the extent to which proceeds can be recovered and an increase or decrease in the recovery rate would result in an increase or decrease, respectively, in the fair value.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.
Financial Instruments Not Carried at Fair Value

The following table presents fair value measurements of the Company’s debt obligations as of March 31, 2026 and December 31, 2025, had they been accounted for at fair value:

Debt
March 31, 2026December 31, 2025
Carrying ValueFair ValueCarrying ValueFair Value
HLEND A Funding Facility$723,382 $723,382 $758,407 $758,407 
HLEND B Funding Facility900,773 900,773 833,783 833,783 
HLEND C Funding Facility510,000 510,000 510,000 510,000 
HLEND D Funding Facility575,428 575,428 757,110 757,110 
HLEND E Funding Facility903,100 903,100 906,290 906,290 
Revolving Credit Facility592,290 592,290 1,742,106 1,742,106 
November 2027 Notes(1)
154,794 161,357 155,206 164,994 
March 2028 Notes(1)
123,991 129,217 124,775 132,520 
September 2027 Notes(1)
75,306 78,059 75,847 79,693 
September 2028 Notes(1)
251,821 265,709 253,865 273,213 
January 2029 Notes(1)
545,848 558,338 548,317 574,607 
September 2029 Notes(1)
400,412 399,860 403,520 414,580 
January 2028 Notes(1)
749,462 745,320 753,079 759,180 
April 2032 Notes(1)
501,060 483,655 504,209 508,160 
June 2027 Notes(1)
397,353 398,336 398,846 402,424 
June 2030 Notes(1)
493,612 488,080 497,133 506,670 
September 2028-1 Notes(1)
588,203 584,904 590,215 596,982 
November 2030 Notes(1)
486,090 478,810 489,753 498,825 
April 2029 Notes(1)
343,765 340,281 — — 
April 2031 Notes(1)
391,660 384,252 — — 
2023 CLO Refinancing Secured Notes(1)
575,360 578,903 575,217 578,576 
2024 CLO Secured Notes(1)
383,009 399,470 381,678 400,789 
2025 CLO Secured Debt(1)
846,021 846,989 845,771 851,044 
2025-4 CLO Secured Notes(1)
845,345 849,698 845,079 852,520 
2026 CLO Secured Notes(1)
507,269 510,175 — — 
Total$12,865,354 $12,886,386 $12,950,206 $13,102,473 
(1)As of March 31, 2026 and December 31, 2025, the carrying value of the Company’s Unsecured Notes and CLO Debt (each as defined below), as applicable, are presented net of unamortized debt issuance costs and original issue discount, as applicable, in the below table. Additionally, the carrying value of the Company’s Unsecured Notes includes the increase (decrease) in the notes carrying value as a result of the qualifying fair value hedge relationship as disclosed in the below table, as applicable, and as further described in Note 6.

March 31, 2026December 31, 2025
Unamortized Debt Issuance Costs and Original Issue DiscountCumulative Change in the Notes Carrying Value as a Result of the Qualifying Fair Value Hedge RelationshipUnamortized Debt Issuance Costs and Original Issue DiscountCumulative Change in the Notes Carrying Value as a Result of the Qualifying Fair Value Hedge Relationship
November 2027 Notes$(573)$367 $(660)$866 
March 2028 Notes(442)433 (498)1,273 
September 2027 Notes(287)593 (336)1,183 
September 2028 Notes(1,292)3,113 (1,422)5,287 
January 2029 Notes(7,203)3,051 (7,829)6,146 
September 2029 Notes(6,432)6,844 (6,885)10,405 
January 2028 Notes(7,063)6,525 (8,035)11,114 
April 2032 Notes(11,562)12,622 (12,033)16,242 
June 2027 Notes(2,575)(72)(3,005)1,851 
June 2030 Notes(6,723)335 (6,991)4,124 
September 2028-1 Notes(6,634)(5,163)(7,145)(2,640)
November 2030 Notes(5,120)(8,790)(5,265)(4,982)
April 2029 Notes(3,331)(2,904)— — 
April 2031 Notes(4,860)(3,480)— — 
2023 CLO Refinancing Secured Notes(2,640)— (2,783)— 
2024 CLO Secured Notes(16,991)— (18,322)— 
2025 CLO Secured Debt(3,979)— (4,229)— 
2025-4 CLO Secured Notes(4,655)— (4,921)— 
2026 CLO Secured Notes(2,731)— — — 
Total$(95,093)$13,474 $(90,359)$50,869 

The following table presents the fair value hierarchy of the Company’s debt obligations as of March 31, 2026 and December 31, 2025:

March 31, 2026December 31, 2025
Level 1$— $— 
Level 28,047,071 6,944,357 
Level 34,839,315 6,158,116 
Total$12,886,386 $13,102,473 

As of March 31, 2026 and December 31, 2025, the carrying amounts of the Company’s assets and liabilities, other than investments at fair value and debt, approximate fair value due to their short maturities. 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, if applicable, or market quotes, if available.