(5) DEBT

Revolving credit facility with SMBC

On October 29, 2024, the Company entered into a revolving credit facility (the “SMBC Revolving Credit Facility”) pursuant to a Senior Secured Credit Agreement (the “SMBC Credit Agreement”), by and among the Company, as borrower, Sumitomo Mitsui Banking Corporation (“SMBC”), as administrative agent, each of the lenders and issuing banks party thereto, SMBC, as a joint lead arranger, as a joint book runner and as a syndication agent, and BofA Securities, Inc., as a joint lead arranger, as a joint book runner and as a syndication agent. The SMBC Revolving Credit Facility provides for, among other things, borrowings in U.S. dollars or certain other permitted currencies in an initial aggregate amount of up to $300 million, subject to availability under the borrowing base, with an option for the Company to elect at one or more times, subject to certain conditions, to increase the maximum committed amount up to $500 million. On October 17, 2025, the Company increased the available borrowing capacity of the SMBC Revolving Credit Facility to $325 million.

The revolving period during which the Company is permitted to borrow, repay and re-borrow advances will terminate on October 27, 2028 (the “Commitment Termination Date”). Any amounts borrowed under the SMBC Revolving Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on October 29, 2029 (the “Maturity Date”). During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make mandatory prepayments under the SMBC Revolving Credit Facility out of the proceeds of certain asset sales and other recovery events and equity and debt issuances.

The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Borrowings under the SMBC Revolving Credit Facility accrue interest at a rate per annum equal to the relevant rate plus an applicable margin of (a) with respect to any ABR Loan, (i) 0.875% per annum if the Gross Borrowing Base is less than 1.60x the Combined Debt Amount or (ii) 0.75% per annum if the Gross Borrowing Base is greater than or equal to 1.60x the Combined Debt Amount; (b) with respect to any Term Benchmark Loan, (i) 1.875% per annum if the Gross Borrowing Base is less than 1.60x the Combined Debt Amount or (ii) 1.75% per annum if the Gross Borrowing Base is greater than or equal to 1.60x the Combined Debt Amount, and (c) with respect to any RFR Loans, (i) 1.875% per annum if the Gross Borrowing Base is less than 1.60x the Combined Debt Amount or (ii) 1.75% per annum if the Gross Borrowing Base is greater than or equal to 1.60x the Combined Debt Amount. In addition, the Company will pay a non-usage fee of 0.375% on the average daily unused amount of the revolving commitments under the SMBC Revolving Credit Facility. Capitalized terms are as defined in the SMBC Credit Agreement. As of March 31, 2026 and December 31, 2025, the Company was in compliance with all covenants and other requirements of the SMBC Revolving Credit Facility. 

Revolving credit facility with Bank of America

On August 7, 2024, the Company entered into an amendment to an existing revolving credit agreement (the “BofA Revolving Credit Facility”) dated February 20, 2024, by and between the Company, as borrower, and Bank of America, as lender. The amendment, among other things, (i) reduced the applicable margin for advances to 2.35% per annum, (ii) increased the available borrowing capacity of the facility to $300 million, and (iii) extended the maturity date of the credit facility to May 14, 2025.

In connection with the BofA Revolving Credit Facility, the Company made certain customary representations and warranties and was required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. In addition, the Company should not incur aggregate indebtedness in an amount (a) in excess of that permitted under the constituent documents and (b) in excess of $5 billion. The BofA Revolving Credit Facility contained customary events of default for similar financing transactions. Upon the occurrence and during the continuation of an event of default, lender may have terminated the commitments and declared the outstanding advances and all other obligations under the BofA Revolving Credit Facility immediately due and payable. On January 30, 2025, the Company terminated its BofA Revolving Credit Facility with Bank of America and repaid all outstanding principal and interest balances.

ABL Credit Facility with Bank of America

On January 23, 2025, PCF Financing entered into a revolving credit facility pursuant to a credit agreement (the “BofA ABL Credit Facility”), by and among PCF Financing, as borrower, the Company, as servicer, Bank of America, N.A. (“Bank of America”), as administrative agent and sole lead arranger and sole book manager, each of the lenders from time to time party thereto, and State Street Bank and Trust Company, as collateral custodian. The BofA ABL Credit Facility provides for, among other things, borrowings in U.S. dollars or certain other permitted currencies in an initial aggregate amount of up to $300 million, with an option for PCF Financing to elect, subject to certain conditions, to increase the maximum committed amount up to $400 million. On May 15, 2025, the Company increased the available borrowing capacity of the BofA ABL Credit Facility to $400 million. On November 18, 2025, the Company increased the available borrowing capacity of the BofA ABL Credit Facility to $450 million.

The revolving period during which PCF Financing is permitted to borrow, repay and re-borrow loans will terminate on January 23, 2028. Loans under the BofA ABL Credit Facility are subject to satisfaction of certain conditions, including maintenance of the required borrowing base. Any amounts borrowed under the BofA ABL Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on January 23, 2030.

Borrowings under the BofA ABL Credit Facility accrue interest at a rate per annum equal to the floating rate applicable to the currency of such borrowing (which, for U.S. dollar-denominated borrowings, is three-month term SOFR), plus an applicable margin ranging from 1.60% per annum to 2.00% per annum depending on the nature of the collateral securing the advances, subject to a floor of 1.90% per annum. In addition, PCF Financing will pay a non-usage fee on the unused commitments under the facility equal to (i) during the first six months after the Closing Date (as defined in the BofA ABL Credit Facility), 0.25% per annum on such unused commitments, (ii) on and after the six month anniversary of the Closing Date and prior to the twelve month anniversary of the Closing Date, 0.50% per annum on such unused commitments and (iii) following the first twelve months after the Closing Date, 1.50% per annum on unused commitments below 50% of the total facility commitment and 0.50% per annum on remaining unused commitments. 

The BofA ABL Credit Facility was amended as of October 2, 2025, which, among other things, reduced the applicable margin from a range of 1.60% to 1.85% per annum, subject to a floor of 1.80% per annum. As of March 31, 2026 and December 31, 2025, the Company was in compliance with all covenants and other requirements of the BofA ABL Credit Facility.

ABL Credit Facility with RBC Bank

On December 1, 2025 (the “Closing Date”), PCF Financing 2 entered into a revolving credit facility (the “RBC ABL Credit Facility”) pursuant to a Loan and Security Agreement (the “Loan Agreement”), by and among PCF Financing 2, as borrower, the Company, as collateral manager, Royal Bank of Canada (“RBC”), as administrative agent, each of the lenders from time to time party thereto, and Computershare Trust Company, N.A., as collateral agent and collateral custodian.

The RBC ABL Credit Facility provides for, among other things, borrowings in U.S. dollars or certain other permitted currencies in an initial aggregate amount of up to $300 million. The revolving period during which PCF Financing 2 is permitted to borrow, repay and re-borrow loans will terminate December 1, 2028 (the “Reinvestment Period End Date”). Loans under the RBC ABL Credit Facility are subject to satisfaction of certain conditions, including maintenance of the required borrowing base. Any amounts borrowed under the RBC ABL Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on December 1, 2030 (the “Termination Date”).

Borrowings under the RBC ABL Credit Facility accrue interest at a rate per annum equal to the floating rate applicable to the currency of such borrowing (which, for U.S. dollar-denominated borrowings, is daily SOFR), plus an applicable margin ranging from 1.60% per annum to 2.00% per annum depending on the nature of the collateral securing the advances, subject to a floor of 0% per annum. In addition, PCF Financing 2 will pay a non-usage fee on the unused commitments under the facility equal to (i) during the first nine months after the Closing Date, $0.00; (ii) from the nine-month anniversary of the Closing Date to and including the Reinvestment Period End Date, (a) for each day during such period that the Advances Outstanding (as defined in the Loan Agreement) on such day are less than 50% of the Facility Amount (as defined in the Loan Agreement) on such day, an amount equal to the sum of the products for each such day during such period, of (I) one divided by 360, (II) 1.25%, and (III) the positive difference between (X) 50% of the Facility Amount minus (Y) the Advances Outstanding as of each such day; (b) for each day during such period that the Advances Outstanding on such day are greater than or equal to 50% but less than 75% of the Facility Amount on such day, an amount equal to the sum of the products for each such day during such period, of (I) one divided by 360, (II) 0.75%, and (III) the positive difference between (X) 75% of the Facility Amount minus (Y) the Advances Outstanding as of each such day; and (c) for each day during such period that the Advances Outstanding on such day are greater than or equal to 75% of the Facility Amount on such day, $0.00; and (iii) from the Reinvestment Period End Date to the termination date, $0.00. As of March 31, 2026 and December 31, 2025, the Company was in compliance with all covenants and other requirements of the RBC ABL Credit Facility.

The Company’s outstanding debt obligations were as follows:

The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of March 31, 2026.

The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of December 31, 2025.

The components of interest expense for the three months ended March 31, 2026, and March 31, 2025 were as follows:

The following table summarizes the average debt outstanding and the weighted average interest cost:

Promissory Notes

On June 2, 2025, the Company closed on an offering of 110 promissory notes due June 2, 2055 (the “Promissory Notes”) in a private offering, with each Promissory Note being issued in connection with the issuance of one common share of the Company (the “Promissory Notes Offering”) to accredited investors (as that term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (“Securities Act”)). The aggregate principal amount of the Promissory Notes is $110 less the value of 110 common shares at issuance. The Company will pay interest totaling $0.12 per year on each outstanding Promissory Note, with such interest to be paid semi-annually on or before June 30 and December 31 each year. The Promissory Notes are reflected on the accompanying Consolidated Statements of Assets and Liabilities as “Accrued expenses and other liabilities”.

The Promissory Notes are general unsecured senior obligations of the Company and rank equally with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company. The Promissory Notes are subject to prepayment, in whole or in part, at any time on or following the date on which the Company has repurchased the common share issued in connection with the Promissory Note. If the Company elects to prepay the Promissory Notes, the Company will pay the principal as of the prepayment date plus all accrued, unpaid, and past due interest, and if the prepayment occurs within 24 months of the issue date, the Company will pay a one-time prepayment premium. The Promissory Notes are also subject to certain customary events of default with cure periods, as applicable. The Promissory Notes are also subject to certain restrictions necessary to protect the Company’s status as a business development company under the 1940 Act.

The Promissory Notes are issued in reliance on Regulation D under the Securities Act. The Promissory Notes have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable. The Company intends to use the net proceeds from the Promissory Notes Offering for general corporate purposes.