v3.26.1
FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
3. FAIR VALUE MEASUREMENTS
The Company applies fair value accounting in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of the Company’s investment portfolio for which market quotations are not readily available. The Investment Adviser values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Investment Adviser may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Investment Adviser determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Investment Adviser may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of personnel of the Investment Adviser; and (iii) the Investment Adviser engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund and Structured Credit Partners is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
•the nature and realizable value of any collateral;
•call features, put features and other relevant terms of debt;
•the portfolio company’s leverage and ability to make payments;
•the portfolio company’s public or private credit rating;
•the portfolio company’s actual and expected earnings and discounted cash flow;
•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
•the markets in which the portfolio company does business and recent economic and/or market events; and
•comparisons to comparable transactions and publicly traded securities.
Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date, which in many cases may reflect a lag in information.
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. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the unaudited consolidated financial statements as of March 31, 2026 and audited consolidated financial statements as of December 31, 2025.
U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:
•Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. Financial instruments in this category generally include unrestricted securities, including equities and derivatives, listed in active markets. The Investment Adviser does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
•Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. Financial instruments in this category generally include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.
•Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments in this category generally include investments in privately-held entities, structured credit investments, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
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 Investment 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. Investments in Credit Fund and Structured Credit Partners are valued based on the legal form of investment. Investments structured through LLC membership interests may be valued using either the practical expedient (net asset value method) or a discounted cash flow method, as determined appropriate by the Investment Adviser. For those structured through subordinated notes, a discounted cash flow method is used.
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, there were transfers of 276 out of Level 3 and no transfers into Level 3. For the three months ended March 31, 2025, there were no transfers between levels.
The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of March 31, 2026 and December 31, 2025:
 March 31, 2026
 Level 1Level 2Level 3Total
Assets
First Lien Debt$— $— $1,899,631 $1,899,631 
Second Lien Debt— — 78,325 78,325 
Equity Investments276 — 156,091 156,367 
Investment Funds— — 142,782 142,782 
Total Investments$276 $— $2,276,829 $2,277,105 
Derivative assets(1)
— — — — 
Liabilities
Derivative liabilities(1)
— (5,033)— (5,033)
Total$2,272,072 
 December 31, 2025
 Level 1Level 2Level 3Total
Assets
First Lien Debt$— $— $2,061,847 $2,061,847 
Second Lien Debt— — 95,130 95,130 
Equity Investments— — 143,331 143,331 
Investment Funds— — 163,614 163,614 
Total Investments$— $— $2,463,922 $2,463,922 
Derivative assets(1)
— 298 — 298 
Liabilities
Derivative liabilities(1)
— (1,436)— (1,436)
Total$2,462,784 
(1)As of March 31, 2026 and December 31, 2025, derivative assets and liabilities consisted of interest rate swaps.
The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:
Financial Assets
 Three Months Ended March 31, 2026
 First Lien DebtSecond Lien DebtEquity InvestmentsInvestment FundsTotal
Balance, beginning of period$2,061,847 $95,130 $143,331 $163,614 $2,463,922 
Purchases198,327 1,065 18,909 19,799 238,100 
Sales(162,853)(15)(1,991)— (164,859)
Paydowns(177,088)(11,702)— (40,500)(229,290)
Accretion of discount2,271 228 14 — 2,513 
Net realized gains (losses)(9,469)(310)297 — (9,482)
Net change in unrealized appreciation (depreciation)(13,404)(6,071)(4,193)(131)(23,799)
Transfers Out of Level 3— — (276)— (276)
Balance, end of period$1,899,631 $78,325 $156,091 $142,782 $2,276,829 
Net change in unrealized appreciation (depreciation) relating to Level 3 investments still held at the reporting date and included within the Consolidated Statements of Operations$(21,344)$(5,998)$(3,441)$(131)$(30,914)
Financial Assets
 Three Months Ended March 31, 2025
 First Lien DebtSecond Lien DebtEquity InvestmentsInvestment FundsTotal
Balance, beginning of period$1,323,697 $116,467 $116,746 $182,636 $1,739,546 
Purchases171,923 989 3,598 — 176,510 
Transfer In - CSL III Merger479,124 4,117 2,432 — 485,673 
Transfer In - Credit Fund II Purchase181,645 9,493 63 — 191,201 
Sales(88,285)(1,137)(6,415)(62,500)(158,337)
Paydowns(187,006)(100)— — (187,106)
Accretion of discount2,749 160 59 — 2,968 
Net realized gains (losses)925 (7,974)22 — (7,027)
Net change in unrealized appreciation (depreciation)(11,681)7,614 5,010 1,255 2,198 
Balance, end of period$1,873,091 $129,629 $121,515 $121,391 $2,245,626 
Net change in unrealized appreciation (depreciation) relating to Level 3 investments still held at the reporting date and included within the Consolidated Statements of Operations$(13,947)$(386)$4,886 $1,255 $(8,192)
The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:
Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Investment Adviser carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value the Company’s portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.
Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing on indicative quotes, which includes quotes from pricing services, brokers, or counterparties as well as recent transaction prices.
Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in Credit Fund’s mezzanine loan are valued using collateral analysis with the expected recovery rate of principal and interest. Investments in Credit Fund’s subordinated loan and member’s interest are valued using discounted cash flow analysis with the expected discount rate, default rate and recovery rate of principal and interest. The investments in Structured Credit Partners Class A and Class B are valued using consensus pricing on indicative quotes, which includes recent transaction prices.
The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of March 31, 2026 and December 31, 2025:
 Fair Value as ofValuation TechniquesSignificant Unobservable InputsRangeWeighted Average
 March 31, 2026LowHigh
Investments in First Lien Debt$1,706,571 Discounted Cash FlowDiscount Rate7.44 %23.66 %9.98 %
114,186 Consensus PricingIndicative Quotes47.50 %99.12 %92.53 %
78,874 Income ApproachDiscount Rate9.86 %13.79 %11.31 %
Market ApproachComparable Multiple9.50x10.92x10.12x
Total First Lien Debt1,899,631 
Investments in Second Lien Debt59,498 Discounted Cash FlowDiscount Rate14.29 %18.57 %17.75 %
12,025 Consensus PricingIndicative Quotes92.50 %92.50 %92.50 %
6,802 Income ApproachDiscount Rate9.98 %13.36 %10.00 %
Total Second Lien Debt78,325 
Investments in Equity59,622 Income ApproachDiscount Rate12.06 %16.41 %13.16 %
10,456 Consensus PricingIndicative Quotes98.25%98.25%95.65%
86,013 Market ApproachComparable Multiple3.00x19.00x10.26x
Total Equity Investments156,091 
Investments in Investment Funds122,983 Discounted Cash FlowDiscount Rate12.50 %12.50 %12.50 %
Discounted Cash FlowDefault Rate2.00 %2.00 %2.00 %
Discounted Cash FlowRecovery Rate60.00 %60.00 %60.00 %
19,799 Consensus PricingIndicative Quotes100.00 %100.00 %100.00 %
Total Investments in Investment Funds142,782 
Total Level 3 Investments$2,276,829 
 Fair Value as ofValuation TechniquesSignificant
Unobservable
Inputs		RangeWeighted Average
 December 31, 2025LowHigh
Investments in First Lien Debt$1,818,450 Discounted Cash FlowDiscount Rate5.54 %23.90 %9.33 %
159,132 Consensus PricingIndicative Quotes64.38 %100.00 %95.82 %
84,265 Income ApproachDiscount Rate9.96 %14.55 %11.57 %
Market ApproachComparable Multiple8.50x11.50x9.57x
Total First Lien Debt2,061,847 
Investments in Second Lien Debt76,571 Discounted Cash FlowDiscount Rate10.89 %17.22 %13.00 %
11,984 Consensus PricingIndicative Quotes92.19 %92.19 %92.19 %
6,575 Income ApproachDiscount Rate9.96 %13.35 %9.97 %
Total Second Lien Debt95,130 
Investments in Equity56,658 Income ApproachDiscount Rate9.75 %16.16 %12.37 %
86,673 Market ApproachComparable Multiple3.00x21.25x10.84x
Total Equity Investments143,331 
Investments in Investment Funds
Mezzanine Loan40,500 Consensus PricingIndicative Quotes100.00 %100.00 %100.00 %
Subordinated Loan and Member's Interest123,114 Discounted Cash FlowDiscount Rate11.75 %11.75 %11.75 %
Discounted Cash FlowDefault Rate2.00 %2.00 %2.00 %
Discounted Cash FlowRecovery Rate60.00 %60.00 %60.00 %
Total Investments in Investment Funds163,614 
Total Level 3 Investments$2,463,922 
The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation would result in a significantly lower fair value measurement.
The significant unobservable input used in the fair value measurement of the Company’s investment in the mezzanine loan of Credit Fund is the recovery rate of principal and interest. A significant decrease in the recovery rate would result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in the subordinated loan and member’s interest of Credit Fund are the discount rate, default rate and recovery rate. The significant unobservable inputs used in the fair value measurement of the Company’s investments in the member’s interest of Structured Credit Partners are indicative quotes. Significant increases in the discount rate or default rate in isolation would result in a significantly lower fair value measurement. A significant decrease in the recovery rate in isolation would result in a significantly lower fair value measurement.
Financial instruments disclosed but not carried at fair value
The following table presents the principal amount and fair value of the Credit Facility, the Senior Notes, and the 2015-1N Debt as of March 31, 2026 and December 31, 2025:
 March 31, 2026December 31, 2025
 Principal AmountFair ValuePrincipal AmountFair Value
Secured borrowings$415,319 $415,319 $563,660 $563,660 
2030 Notes300,000 301,709 300,000 299,749 
2031 Notes300,000 303,340 300,000 301,436 
2015-1N Aaa/AAA Class A-1-1-A Notes240,000 240,054 240,000 240,118 
2015-1N Aaa/AAA Class A-L Loans50,000 50,011 50,000 50,025 
2015-1N Aaa/AAA Class A-1-2-B Notes20,000 19,971 20,000 20,001 
2015-1N AA Class A-2-RR Notes30,000 29,789 30,000 29,858 
2015-1N A Class B-R Notes40,000 39,700 40,000 39,799 
Total$1,395,319 $1,399,893 $1,543,660 $1,544,646 
The carrying values of the secured borrowings generally approximate their respective fair values due to their variable interest rates. Secured borrowings are categorized as Level 3 within the hierarchy.
The carrying values of the Senior Notes approximate their respective fair values due to their inclusion of the effective portion of the fair value of the interest rate swap, as further discussed in Note 8, Derivative Instruments, to these unaudited consolidated financial statements. The Senior Notes are categorized as Level 3 within the hierarchy.
The carrying value of the 2015-1N Debt approximates their fair value. The 2015-1N Debt is categorized as Level 3 within the hierarchy and is valued generally using market quotation(s) received from broker/dealer(s), which are significant unobservable inputs.
The carrying value of other financial assets and liabilities approximates their fair value based on the short-term nature of these items.