v3.26.1
Derivatives
 9 Months Ended
Jun. 30, 2026
Foreign Currency [Abstract]  
Derivatives
Note 5. Derivatives
The Company enters into derivatives from time to time to help mitigate its foreign currency and interest rate risk exposures.
Forward Currency Contracts
The outstanding forward currency contracts as of June 30, 2026 and September 30, 2025 were as follows:
As of June 30, 2026
CounterpartyCurrency to be soldCurrency to be purchasedSettlement dateUnrealized appreciation Unrealized depreciation
Macquarie Bank Limited€14,650 EUR16,498 USD5/12/2027$— $(452)
Macquarie Bank Limited€20,300 EUR22,346 USD5/27/2027— (1,137)
Macquarie Bank Limited£22,000 GBP30,140 USD2/2/2028898 — 
$898 $(1,589)
Morgan Stanley Capital Services, LLCC$15,000 CAD10,646 USD8/14/2026$60 $— 
Morgan Stanley Capital Services, LLC€30,000 EUR34,854 USD8/14/2026523 — 
Morgan Stanley Capital Services, LLC£30,000 GBP40,154 USD5/25/2028334 — 
Morgan Stanley Capital Services, LLC£30,000 GBP40,016 USD5/26/2028207 — 
Morgan Stanley Capital Services, LLCA$30,000 AUD21,165 USD5/26/2028541 — 
Morgan Stanley Capital Services, LLCC$46,300 CAD34,285 USD5/30/2028702 — 
$2,367 $— 
Regions BankC$10,000 CAD7,096 USD8/14/2026$39 $— 
Regions Bank€30,000 EUR34,853 USD8/14/2026523 — 
$562 $— 
SMBC Capital Markets, Inc.€30,000 EUR34,848 USD8/14/2026$517 $— 
SMBC Capital Markets, Inc.€33,200 EUR39,008 USD5/27/2027514 — 
SMBC Capital Markets, Inc.C$25,000 CAD18,431 USD11/23/2027418 — 
SMBC Capital Markets, Inc.€22,600 EUR26,965 USD1/20/2028469 — 
SMBC Capital Markets, Inc.C$12,500 CAD9,398 USD2/2/2028358 — 
SMBC Capital Markets, Inc.£22,800 GBP31,131 USD2/4/2028831 — 
SMBC Capital Markets, Inc.€24,100 EUR28,720 USD5/24/2028327 — 
SMBC Capital Markets, Inc.A$27,100 AUD19,024 USD5/25/2028401 — 
SMBC Capital Markets, Inc.£24,600 GBP32,953 USD5/25/2028299 — 
$4,134 $— 
Wells Fargo Bank, N.A.£13,900 GBP18,492 USD10/28/2026$59 $— 
Wells Fargo Bank, N.A.€30,700 EUR36,579 USD1/20/2028591 — 
Wells Fargo Bank, N.A.A$27,000 AUD18,549 USD2/4/20284 — 
Wells Fargo Bank, N.A.£28,700 GBP38,261 USD5/25/2028179 — 
Wells Fargo Bank, N.A.€20,000 EUR23,820 USD5/26/2028257 — 
Wells Fargo Bank, N.A.A$30,000 AUD21,151 USD5/26/2028528 — 
Wells Fargo Bank, N.A.C$46,000 CAD34,046 USD5/30/2028682 — 
$2,300 $— 
As of September 30, 2025
CounterpartyCurrency to be soldCurrency to be purchasedSettlement dateUnrealized appreciation Unrealized depreciation
Macquarie Bank Limited€3,900 EUR4,371 USD1/30/2026$— $(235)
Macquarie Bank Limited£21,900 GBP27,811 USD2/2/2026— (1,615)
Macquarie Bank Limited€35,000 EUR39,008 USD2/5/2026— (2,338)
Macquarie Bank LimitedA$26,100 AUD17,179 USD2/5/2026— (109)
Macquarie Bank Limited€14,650 EUR16,498 USD5/12/2027— (1,079)
Macquarie Bank Limited€20,300 EUR22,346 USD5/27/2027— (1,990)
$— $(7,366)
SMBC Capital Markets, Inc.€22,000 EUR24,594 USD1/20/2026$— $(1,367)
SMBC Capital Markets, Inc.€23,750 EUR26,543 USD1/20/2026— (1,483)
SMBC Capital Markets, Inc.$7,400 CAD5,533 USD2/2/2026185 — 
SMBC Capital Markets, Inc.£21,900 GBP27,746 USD2/5/2026— (1,672)
SMBC Capital Markets, Inc.€33,200 EUR39,008 USD5/27/2027— (910)
$185 $(5,432)
The impact of forward currency contracts not designated as an effective hedge accounting relationship for the three and nine months ended June 30, 2026 and 2025 on the Consolidated Statements of Operations, including realized and unrealized gains (losses) is summarized in the table below:
Realized gain (loss) on forward currency contracts recognized in income
Risk exposure categoryThree months ended June 30,Nine months ended June 30,
2026202520262025
Foreign exchange $— $— $(10,258)$7,203 
Change in unrealized appreciation (depreciation) on forward currency contracts recognized in income
Risk exposure categoryThree months ended June 30,Nine months ended June 30,
2026202520262025
Foreign exchange $6,951 $(22,219)$21,285 $(15,787)
The following table is a summary of the average outstanding daily volume for forward currency contracts for the three and nine months ended June 30, 2026 and 2025:
Average U.S. Dollar notional outstandingThree months ended June 30,Nine months ended June 30,
2026202520262025
Forward currency contracts$412,621 $296,011 $314,603 $324,980 
Interest Rate Swaps
In connection with the 2028 Notes, 2029 Notes and 2031 Notes (each as defined in Note 7), the Company entered into interest rate swap agreements with SMBC Capital Markets, Inc. (“SMBC”), Macquarie Bank Limited (“Macquarie”), Morgan Stanley Capital Services, LLC (“Morgan Stanley”) and Regions Bank (“Regions”) to more closely align the interest rate of such liability with its investment portfolio, which consists primarily of floating rate loans. The Company designated these interest rate swaps and the 2028, 2029 and 2031 Notes as a qualifying fair
value hedge accounting relationship. See Note 7 for more information on the 2028 Notes, 2029 Notes and 2031 Notes. The outstanding interest rate swaps as of June 30, 2026 and September 30, 2025 were as follows:
As of June 30, 2026
CounterpartyHedged itemCompany receivesCompany paysMaturity dateNotional amountUnrealized appreciationUnrealized depreciation
SMBC Capital Markets, Inc2028 Notes7.310%1M SOFR+3.327 %11/5/2028$225,000 $— $(619)
SMBC Capital Markets, Inc2028 Notes7.310%1M SOFR+2.835 %11/5/2028225,000 1,860 — 
SMBC Capital Markets, Inc2028 Notes5.050%D SOFR+1.723 %12/5/2028250,000 — (4,249)
SMBC Capital Markets, Inc2029 Notes6.248%1M SOFR+2.444 %6/15/2029600,000 — (4,037)
SMBC Capital Markets, Inc2031 Notes6.250%D SOFR+2.171 %6/1/2031350,000 1,077 — 
$2,937 $(8,905)
Macquarie Bank Limited2029 Notes5.881%3M SOFR+2.012 %6/15/2029150,000 $— $(662)
$— $(662)
Morgan Stanley Capital Services, LLC2031 Notes6.250%D SOFR+2.185 %6/1/203175,000 $183 $— 
$183 $— 
Regions Bank2031 Notes6.250%D SOFR+2.203 %6/1/203175,000 $125 $— 
$125 $— 
As of September 30, 2025
CounterpartyHedged itemCompany receivesCompany paysMaturity dateNotional amountUnrealized appreciationUnrealized depreciation
SMBC Capital Markets, Inc2028 Notes7.310%1M SOFR+3.327 %11/5/2028$225,000 $3,513 $— 
SMBC Capital Markets, Inc2028 Notes7.310%1M SOFR+2.835 %11/5/2028225,000 6,772 — 
SMBC Capital Markets, Inc2028 Notes5.050%D SOFR+1.723 %12/5/2028250,000 — (689)
SMBC Capital Markets, Inc2029 Notes6.248%1M SOFR+2.444 %6/15/2029600,000 7,780 — 
$18,065 $(689)
Macquarie Bank Limited2029 Notes5.881%3M SOFR+2.012 %6/15/2029150,000 $2,343 $— 
$2,343 $— 
As a result of the Company’s designation as a hedging instrument in a qualifying fair value hedge accounting relationship, the Company is required to fair value the hedging instrument and the related hedged item, with the changes in the fair value of each being recorded in interest and other debt financing expenses. The net unrealized gain/(loss) related to the fair value hedge was $46 and $(125), respectively, for the three and nine months ended June 30, 2026. The net unrealized gain/(loss) related to the fair value hedge was $155 and $(4,541), respectively, for the three and nine months ended June 30, 2025. The net unrealized gain/(loss) related to the fair value hedge is included in “Interest and other debt financing expenses” in the Company’s Consolidated Statement of Operations. The table below presents the components of the net unrealized loss related to the fair value hedge recognized for the hedging instrument, the interest rate swaps, and the hedged items, the 2028, 2029 and 2031 Notes, from derivatives designated in a qualifying hedge accounting relationship for the three and nine months ended June 30, 2026 and 2025:
Three months ended June 30,
Nine months ended June 30,
2026202520262025
Hedging instruments (Interest rate swaps)$(13,523)$9,598 $(26,040)$(11,627)
Hedged items (Unsecured notes)13,569 (9,443)25,915 7,086 
Fair market value adjustments for hedge accounting recognized in interest expense$46 $155 $(125)$(4,541)
The table below presents the carrying value, which is inclusive of (i) unamortized premium and/or unaccreted original issue discount and (ii) the cumulative adjustment for the change in fair value of an effective hedge accounting relationship, of the 2028, 2029 and 2031 Notes as of June 30, 2026 and September 30, 2025 that are
designated in qualifying hedging relationships and the related cumulative hedging adjustment (increase/(decrease)) from the current hedging relationships included in such carrying value:
As of June 30, 2026
As of September 30, 2025
DescriptionCarrying ValueCumulative Hedging AdjustmentCarrying ValueCumulative Hedging Adjustment
2028 Notes$705,397 $(3,074)$720,521 $9,445 
2029 Notes742,136 (4,549)756,102 10,232 
2031 Notes496,045 1,386 — — 
Offsetting Derivatives
In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) with each of its derivative counterparties, SMBC, Macquarie, Morgan Stanley, Regions and Wells Fargo and, together with SMBC, Macquarie, Morgan Stanley, and Regions, the “Counterparties” and each a “Counterparty”). Each ISDA Master Agreement is a bilateral agreement between the Company and each Counterparty that governs over the counter (“OTC”) derivatives, including forward currency contracts and interest rate swaps, and contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of each ISDA Master Agreement with each of the Counterparties permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.
For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Company and cash collateral received from either Counterparty, if any, is included in the Consolidated Statements of Financial Condition as “Other assets” or “Accounts payable and other liabilities.” As of June 30, 2026 and September 30, 2025, there was $0 and $4,890, respectively, of collateral pledged for derivatives which is included in other assets on the Consolidated Statements of Financial Condition. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that it believes to be of good standing and by monitoring the financial stability of those counterparties.
The following table is intended to provide additional information about the effect of the offsetting derivative contracts on the consolidated financial statements of the Company including: the location of those fair values on the Consolidated Statements of Financial Condition and the Company’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Company as of June 30, 2026 and September 30, 2025:
As of June 30, 2026
CounterpartyStatement of Financial Condition Location of AmountsGross Amount of Recognized AssetsGross Amount of Recognized (Liabilities)Net amounts presented in the Consolidated Statements of Financial Condition
Collateral (Received) / Pledged(1)
Net Amounts(2)
Macquarie Bank LimitedNet unrealized depreciation on derivatives$898 $(2,251)$(1,353)$— $(1,353)
SMBC Capital Markets, Inc.Net unrealized depreciation on derivatives7,071 (8,905)(1,834)— (1,834)
Wells Fargo Bank, N.A.Net unrealized appreciation on derivatives2,300 — 2,300 — 2,300 
Regions BankNet unrealized appreciation on derivatives687 — 687 — 687 
Morgan Stanley Capital Services, LLCNet unrealized appreciation on derivatives2,550 — 2,550 — 2,550 
As of September 30, 2025
CounterpartyStatement of Financial Condition Location of AmountsGross Amount of Recognized AssetsGross Amount of Recognized (Liabilities)Net amounts presented in the Consolidated Statements of Financial Condition
Collateral (Received) / Pledged(1)
Net Amounts(2)
Macquarie Bank LimitedNet unrealized depreciation on derivatives$2,343 $(7,366)$(5,023)$4,890 $(133)
SMBC Capital Markets, Inc.Net unrealized appreciation on derivatives18,250 (6,121)12,129 — 12,129 
(1)The actual collateral pledged could be more than the amount shown due to over collateralization.
(2)Represents the net amount due from/(to) counterparties in the event of default.
Exclusion of the Investment Adviser from Commodity Pool Operator Definition
Engaging in commodity interest transactions such as swap transactions or futures contracts for the Company could cause the Investment Adviser to fall within the definition of “commodity pool operator” under the Commodity Exchange Act (the “CEA”) and related Commodity Futures Trading Commission (the “CFTC”) regulations. The Investment Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the CEA and the CFTC regulations in connection with its management of the Company and, therefore, is not subject to CFTC registration or regulation under the CEA as a commodity pool operator with respect to its management of the Company.