| Fair Value of Financial Instruments |
Note 5. Fair Value of Financial Instruments Investments The following table presents fair value measurements of investments as of June 30, 2026 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Hierarchy |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Senior Secured First Lien |
$ |
— |
|
|
$ |
— |
|
|
$ |
373,862 |
|
|
$ |
373,862 |
|
Unitranche First Lien |
|
— |
|
|
|
15,690 |
|
|
|
1,023,475 |
|
|
|
1,039,165 |
|
Unitranche First Lien – Last Out |
|
— |
|
|
|
— |
|
|
|
18,733 |
|
|
|
18,733 |
|
Senior Secured Second Lien |
|
— |
|
|
|
— |
|
|
|
14,666 |
|
|
|
14,666 |
|
Unsecured Debt |
|
— |
|
|
|
— |
|
|
|
25,180 |
|
|
|
25,180 |
|
Equity & Other |
|
39 |
|
|
|
— |
|
|
|
69,123 |
|
|
|
69,162 |
|
Subtotal |
$ |
39 |
|
|
$ |
15,690 |
|
|
$ |
1,525,039 |
|
|
$ |
1,540,768 |
|
Investments Measured at NAV (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
29,900 |
|
Total Investments |
$ |
39 |
|
|
$ |
15,690 |
|
|
$ |
1,525,039 |
|
|
$ |
1,570,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Equivalents |
$ |
6,994 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
6,994 |
|
Interest Rate Swaps - Liabilities |
|
— |
|
|
|
3,040 |
|
|
|
— |
|
|
|
3,040 |
|
Foreign Currency Forward Contracts - Assets |
|
— |
|
|
|
1,255 |
|
|
|
— |
|
|
|
1,255 |
|
Foreign Currency Forward Contracts - Liabilities |
|
— |
|
|
|
1,756 |
|
|
|
— |
|
|
|
1,756 |
|
The following table presents fair value measurements of investments as of December 31, 2025 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Hierarchy |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Senior Secured First Lien |
$ |
— |
|
|
$ |
— |
|
|
$ |
350,795 |
|
|
$ |
350,795 |
|
Unitranche First Lien |
|
— |
|
|
|
9,290 |
|
|
|
1,038,457 |
|
|
|
1,047,747 |
|
Unitranche First Lien – Last Out |
|
— |
|
|
|
— |
|
|
|
26,290 |
|
|
|
26,290 |
|
Senior Secured Second Lien |
|
— |
|
|
|
- |
|
|
|
12,180 |
|
|
|
12,180 |
|
Unsecured Debt |
|
— |
|
|
|
— |
|
|
|
19,003 |
|
|
|
19,003 |
|
Equity & Other |
|
43 |
|
|
|
46 |
|
|
|
77,136 |
|
|
|
77,225 |
|
Subtotal |
$ |
43 |
|
|
$ |
9,336 |
|
|
$ |
1,523,861 |
|
|
$ |
1,533,240 |
|
Investments Measured at NAV (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
36,178 |
|
Total Investments |
$ |
43 |
|
|
$ |
9,336 |
|
|
$ |
1,523,861 |
|
|
$ |
1,569,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Equivalents |
$ |
2,967 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,967 |
|
Foreign Currency Forward Contracts - Assets |
|
— |
|
|
|
2,135 |
|
|
|
— |
|
|
|
2,135 |
|
Foreign Currency Forward Contracts - Liabilities |
|
— |
|
|
|
2,134 |
|
|
|
— |
|
|
|
2,134 |
|
(1)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. 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 table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the six months ended June 30, 2026, based off of the fair value hierarchy as of June 30, 2026 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Secured
First Lien |
|
|
Unitranche
First Lien |
|
|
Unitranche
First -
Last Out |
|
|
Senior
Secured
Second Lien |
|
|
Unsecured
Debt |
|
|
Equity
&
Other |
|
|
Total |
|
Balance as of January 1, 2026 |
$ |
350,795 |
|
|
$ |
1,038,457 |
|
|
$ |
26,290 |
|
|
$ |
12,180 |
|
|
$ |
19,003 |
|
|
$ |
77,136 |
|
|
$ |
1,523,861 |
|
Amortized discounts/premiums |
|
630 |
|
|
|
1,446 |
|
|
|
42 |
|
|
|
5 |
|
|
|
124 |
|
|
|
— |
|
|
|
2,247 |
|
Paid in-kind interest |
|
626 |
|
|
|
1,509 |
|
|
|
- |
|
|
|
193 |
|
|
|
1,253 |
|
|
|
— |
|
|
|
3,581 |
|
Net realized gain (loss) |
|
(12,182 |
) |
|
|
(8,785 |
) |
|
|
— |
|
|
|
(3,482 |
) |
|
|
— |
|
|
|
(2,514 |
) |
|
|
(26,963 |
) |
Net change in unrealized appreciation (depreciation) |
|
4,842 |
|
|
|
(7,762 |
) |
|
|
(660 |
) |
|
|
3,363 |
|
|
|
(1,276 |
) |
|
|
(11,488 |
) |
|
|
(12,981 |
) |
Purchases |
|
55,881 |
|
|
|
93,393 |
|
|
|
(6,609 |
) |
|
|
11,041 |
|
|
|
13,429 |
|
|
|
4,713 |
|
|
|
171,848 |
|
Sales/return of capital/principal repayments/paydowns |
|
(26,730 |
) |
|
|
(86,542 |
) |
|
|
(330 |
) |
|
|
(8,634 |
) |
|
|
(7,353 |
) |
|
|
1,229 |
|
|
|
(128,360 |
) |
Transfers in |
|
— |
|
|
|
3,471 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
47 |
|
|
|
3,518 |
|
Transfers out |
|
— |
|
|
|
(11,712 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11,712 |
) |
Balance as of June 30, 2026 |
$ |
373,862 |
|
|
$ |
1,023,475 |
|
|
$ |
18,733 |
|
|
$ |
14,666 |
|
|
$ |
25,180 |
|
|
$ |
69,123 |
|
|
$ |
1,525,039 |
|
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2026 |
$ |
(6,063 |
) |
|
$ |
(12,859 |
) |
|
$ |
(660 |
) |
|
$ |
(98 |
) |
|
$ |
(860 |
) |
|
$ |
(8,213 |
) |
|
$ |
(28,753 |
) |
During the six months ended June 30, 2026, the Company recorded $11,712 of transfers from Level 3 to Level 2 due to an increase in observable inputs in market data and $3,518 of transfers from Level 2 to Level 3 due to a decrease in observable inputs in market data. The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the six months ended June 30, 2025, based off of the fair value hierarchy as of June 30, 2025 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior
Secured
First Lien |
|
|
Unitranche
First Lien |
|
|
Unitranche
First -
Last Out |
|
|
Senior
Secured
Second Lien |
|
|
Unsecured
Debt |
|
|
Equity
&
Other |
|
|
Total |
|
Balance as of January 1, 2025 |
$ |
379,628 |
|
|
$ |
1,013,934 |
|
|
$ |
14,741 |
|
|
$ |
24,351 |
|
|
$ |
17,525 |
|
|
$ |
63,735 |
|
|
$ |
1,513,914 |
|
Amortized discounts/premiums |
|
755 |
|
|
|
2,971 |
|
|
|
34 |
|
|
|
21 |
|
|
|
82 |
|
|
|
— |
|
|
|
3,863 |
|
Paid in-kind interest |
|
1,187 |
|
|
|
2,401 |
|
|
|
443 |
|
|
|
167 |
|
|
|
1,214 |
|
|
|
— |
|
|
|
5,412 |
|
Net realized gain (loss) |
|
(7,671 |
) |
|
|
4 |
|
|
|
— |
|
|
|
(693 |
) |
|
|
— |
|
|
|
(454 |
) |
|
|
(8,814 |
) |
Net change in unrealized appreciation (depreciation) |
|
5,590 |
|
|
|
(2,915 |
) |
|
|
1,263 |
|
|
|
1,971 |
|
|
|
50 |
|
|
|
2,604 |
|
|
|
8,563 |
|
Purchases |
|
42,573 |
|
|
|
107,727 |
|
|
|
9,670 |
|
|
|
— |
|
|
|
|
|
|
2,288 |
|
|
|
162,258 |
|
Sales/return of capital/principal repayments/paydowns |
|
(40,737 |
) |
|
|
(110,478 |
) |
|
|
— |
|
|
|
(2,315 |
) |
|
|
— |
|
|
|
- |
|
|
|
(153,530 |
) |
Transfers in |
|
— |
|
|
|
3,507 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,507 |
|
Transfers out |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Balance as of June 30, 2025 |
$ |
381,325 |
|
|
$ |
1,017,151 |
|
|
$ |
26,151 |
|
|
$ |
23,502 |
|
|
$ |
18,871 |
|
|
$ |
68,173 |
|
|
$ |
1,535,173 |
|
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2025 |
$ |
(809 |
) |
|
$ |
(1,741 |
) |
|
$ |
1,263 |
|
|
$ |
1,669 |
|
|
$ |
51 |
|
|
$ |
2,150 |
|
|
$ |
2,583 |
|
During the six months ended June 30, 2025, the Company recorded no transfers from Level 3 to Level 2 and $3,507 in transfers from Level 2 to Level 3 due to a decrease in observable inputs in market data. The following tables present the fair value of Level 3 investments and the ranges of significant unobservable inputs used to value the Company’s Level 3 investments as of June 30, 2026 and December 31, 2025. These ranges represent the significant unobservable inputs that were used in the valuation of each type of investment. These inputs are not representative of the inputs that could have been used in the valuation of any one investment. For example, the highest market yield presented in the table for senior secured first lien investments is appropriate for valuing a specific investment but may not be appropriate for valuing any other investment. Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Company’s Level 3 investments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security Type |
|
Fair Value as of
June 30, 2026
(in thousands) |
|
|
Valuation Technique |
|
Unobservable Input |
|
Range (Weighted Avg) |
Senior Secured First Lien |
|
$ |
348,583 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
6.3% |
- |
28.7% |
(9.7%) |
|
|
|
24,407 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
4.8x |
- |
11.7x |
(9.3x) |
|
|
|
872 |
|
|
Transactions Precedent |
|
Transaction Price |
|
|
|
N/A |
|
|
|
$ |
373,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unitranche First Lien |
|
|
934,632 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
7.0% |
- |
18.7% |
(9.7%) |
|
|
|
54,654 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
6.9x |
- |
11.6x |
(10.1x) |
|
|
|
9,436 |
|
|
Transactions Precedent |
|
Transaction Price |
|
|
|
N/A |
|
|
|
|
24,753 |
|
|
Broker Quoted |
|
Broker Quote |
|
|
|
N/A |
|
|
|
$ |
1,023,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unitranche First Lien - Last Out |
|
|
18,733 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
7.6% |
- |
17.1% |
(11.7%) |
|
|
$ |
18,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Secured Second Lien |
|
|
3,251 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
10.5% |
- |
10.5% |
(10.5%) |
|
|
|
375 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
|
|
3.2x |
|
|
|
|
11,040 |
|
|
Transactions Precedent |
|
Transaction Price |
|
|
|
N/A |
|
|
|
$ |
14,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Debt |
|
|
19,844 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
8.8% |
- |
14.3% |
(10.9%) |
|
|
|
5,336 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
9.5x |
- |
11.7x |
(10.7x) |
|
|
$ |
25,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity & Other |
|
|
67,005 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
3.2x |
- |
25.1x |
(14.1x) |
|
|
|
2,118 |
|
|
Transactions Precedent |
|
Transaction Price |
|
|
|
N/A |
|
|
|
$ |
69,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1,525,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security Type |
|
Fair Value as of
December 31, 2025
(in thousands) |
|
|
Valuation Technique |
|
Unobservable Input |
|
Range (Weighted Avg) |
Senior Secured First Lien |
|
$ |
303,854 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
4.7% |
- |
19.5% |
(9.8%) |
|
|
|
38,452 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
2.3x |
- |
11.7x |
(9.0x) |
|
|
|
8,489 |
|
|
Transaction Precedent |
|
Transaction Price |
|
|
|
N/A |
|
|
|
$ |
350,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unitranche First Lien |
|
|
897,161 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
7.6% |
- |
19.1% |
(9.8%) |
|
|
|
41,357 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
6.7x |
- |
12.0x |
(9.1x) |
|
|
|
33,097 |
|
|
Transactions Precedent |
|
Transaction Price |
|
|
|
N/A |
|
|
|
|
66,842 |
|
|
Broker Quoted |
|
Broker Quote |
|
|
|
N/A |
|
|
|
$ |
1,038,457 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unitranche First Lien - Last Out |
|
|
18,905 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
7.6% |
- |
15.9% |
(11.3%) |
|
|
|
7,385 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
|
|
10.6x |
|
|
|
$ |
26,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Secured Second Lien |
|
|
8,076 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
11.7% |
- |
12.7% |
(12.3%) |
|
|
|
4,104 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
|
|
3.3x |
|
|
|
$ |
12,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Debt |
|
|
16,904 |
|
|
Discounted Cash Flows |
|
Discount Rate |
|
10.6% |
- |
15.5% |
(13.6%) |
|
|
|
2,099 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
|
|
11.7x |
|
|
|
$ |
19,003 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity & Other |
|
|
77,136 |
|
|
Enterprise Value |
|
Comparable EBITDA Multiple |
|
2.3x |
- |
28.0x |
(13.7x) |
|
|
$ |
77,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1,523,861 |
|
|
|
|
|
|
|
|
|
|
The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity securities are primarily earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, comparable multiples and market discount rates. The Company typically uses comparable EBITDA or revenue multiples on its equity securities to determine the fair value of investments. The Company uses discount rates for debt securities to determine if the effective yield on a debt security is commensurate with the market yields for that type of debt security. •The significant unobservable inputs used in the discounted cash flow approach are the discount rates used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Increases and decreases in the discount rate would result in a decrease and increase in the fair value, respectively. Included in the consideration and selection of discount rates is risk of default, rating of the investment, call provisions and comparable company investments. •The significant unobservable inputs used in the enterprise value approach are comparable EBITDA and revenue multiples. Increases and decreases in market EBITDA multiples and revenue would result in an increase or decrease in the fair value, respectively.
|