v3.26.1
Borrowings
 6 Months Ended
Jun. 30, 2026
Borrowings  
Borrowings

Note 6. Borrowings

Revolving Credit Facility

On October 30, 2023, the Company, entered into a senior secured revolving credit facility (the “Revolving Credit Facility”) with Sumitomo Mitsui Banking Corporation. The Revolving Credit Facility is secured by substantially all of the assets in the Company’s portfolio, including cash and cash equivalents. The stated interest rate on the Revolving Credit Facility is determined pursuant to a formula-based calculation based on the gross borrowing base at the time, resulting in a stated interest rate, depending on the type of borrowing, of either (a) Term Secured Overnight Financing Rate plus a 10 basis point credit spread adjustment and an applicable margin equal to 2.125% per annum or 2.25% per annum, or (b) Alternate Base Rate plus a 10 basis point credit spread adjustment and an applicable margin equal to 1.125% per annum or 1.25% per annum in respect of USD borrowings and comparable rates in respect of non-USD borrowings.

The initial principal amount of the Revolving Credit Facility was $150 million. The Revolving Credit Facility has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the Revolving Credit Facility to up to $350 million. On January 17, 2025, the Company entered into an agreement to increase the aggregate commitments under the Revolving Credit Facility from $150 million to $175 million. The accordion feature of the Revolving Credit Facility allows the Company, under certain circumstances, to increase the aggregate commitments under the Revolving Credit Facility up to $350 million. All amounts outstanding under the Revolving Credit Facility must be repaid by the date that is five years after the closing date of the Revolving Credit Facility.

The Company is permitted, under specified conditions, to issue multiple classes of indebtedness and one class of shares senior to the Common Shares if asset coverage, as defined in the 1940 Act, would at least equal 150% immediately after each such issuance. On November 8, 2022, the Company’s sole shareholder approved the adoption of this 150% threshold pursuant to Section 61(a)(2) of the 1940 Act and such election became effective the following day. In addition, while any senior securities remain outstanding, the Company will be required to make provisions to prohibit any dividend distribution to shareholders or the repurchase of such securities or shares unless the Company meets the applicable asset coverage ratios at the time of the dividend distribution or repurchase. The Company also may be permitted to borrow amounts up to 5% of the value of the total assets for temporary or emergency purposes, which borrowings would not be considered senior securities.

 

Asset-Based Lending Facility

 

On May 5, 2026 (the "Closing Date"), PGIM Private Credit Fund ABL LLC (the “SPV”), a wholly owned subsidiary of the Company, entered into a loan financing and servicing agreement (the "Asset-Based Lending Facility") with Deutsche Bank AG, New York Branch, as facility agent, and State Street Bank and Trust Company, as collateral agent and collateral custodian, the Company, as equityholder and servicer, the SPV, as borrower, and the lenders from time to time party thereto.

 

The Asset-Based Lending Facility is secured by substantially all assets in the SPV’s portfolio, including a first‑priority security interest (subject to permitted liens) in loan assets and related accounts and cash and cash equivalents, in each case as described in the Asset-Based Lending Facility. Borrowings under the Asset-Based Lending Facility bear interest at a per annum rate equal to an applicable margin plus a benchmark rate for the applicable currency (for Dollar advances, three‑month Term Secured Overnight Financing Rate; for Euro advances, Euro Interbank Offered Rate; for Sterling advances, Daily Simple Sterling Overnight Index Average; for Canadian‑dollar advances, Term Canadian Overnight Repo Rate Average; and for Australian‑dollar advances, Bank Bill Swap Rate), in each case subject to a 0.25% floor.

 

The initial facility amount of the Asset-Based Lending Facility is $100 million, with an accordion feature that permits increases, with the consent of the facility agent and the lenders, up to an aggregate commitment of $500 million. The Asset-Based Lending Facility has a revolving period that ends on the date that is three years after the Closing Date (which may be extended with lender consent), and a final maturity on the earliest of (i) the date that is two years after the end of the revolving period and (ii) certain earlier termination events provided in the Asset-Based Lending Facility.

 

The Company’s debt obligations consisted of the following as of June 30, 2026 and December 31, 2025 (dollar amounts in thousands):

 

 Revolving Credit Facility

 

June 30, 2026

 

 

December 31, 2025

 

Total Commitment

 

$

175,000

 

 

$

175,000

 

Amount Outstanding (1)

 

 

89,850

 

 

 

165,750

 

Unused Portion (2)

 

 

85,150

 

 

 

9,250

 

Amount Available (3)

 

 

85,150

 

 

 

91,061

 

 

 

 

 

 

 

 

Asset-Based Lending Facility

 

June 30, 2026

 

 

December 31, 2025

 

Total Commitment

 

$

100,000

 

 

$

—

 

Amount Outstanding (1)

 

 

58,000

 

 

 

—

 

Unused Portion (2)

 

 

42,000

 

 

 

—

 

Amount Available (3)

 

 

12,651

 

 

 

—

 

 

(1)
Amounts outstanding on the Consolidated Statements of Assets and Liabilities are net of deferred financing costs.
(2)
The unused portion is the amount upon which commitment fees are based.
(3)
The amount available reflects any limitations related to the credit facility’s borrowing base.

The components of total interest expense were as follows (dollar amounts in thousands):

 

Revolving Credit Facility

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2026

 

 

June 30, 2025

 

 

June 30, 2026

 

 

June 30, 2025

 

Borrowings interest expense

 

$

1,745

 

 

$

1,589

 

 

$

3,658

 

 

$

3,150

 

Facility unused fee

 

 

76

 

 

 

96

 

 

 

141

 

 

 

187

 

Amortization of financing costs and debt issuance costs

 

 

67

 

 

 

66

 

 

 

133

 

 

 

131

 

Total interest expense

 

$

1,888

 

 

$

1,751

 

 

$

3,932

 

 

$

3,468

 

Average debt borrowings

 

$

113,960

 

 

$

94,028

 

 

$

119,746

 

 

$

93,667

 

Average interest rates on borrowings

 

 

6.55

%

 

 

7.37

%

 

 

6.53

%

 

 

7.37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based Lending Facility

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2026

 

 

June 30, 2025

 

 

June 30, 2026

 

 

June 30, 2025

 

Borrowings interest expense

 

$

510

 

 

$

—

 

 

$

510

 

 

$

—

 

Facility unused fee

 

 

33

 

 

 

—

 

 

 

33

 

 

 

—

 

Amortization of financing costs and debt issuance costs

 

 

45

 

 

 

—

 

 

 

45

 

 

 

—

 

Total interest expense

 

$

588

 

 

$

—

 

 

$

588

 

 

$

—

 

Average debt borrowings

 

$

58,000

 

 

$

—

 

 

$

58,000

 

 

$

—

 

Average interest rates on borrowings

 

 

6.41

%

 

 

0.00

%

 

 

6.41

%

 

 

0.00

%

 

Promissory Notes

On December 1, 2025, the Company closed on an offering of 110 promissory notes in each of Class S and Class D Common Shares due on December 1, 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 are $110,000 less the value of 110 common shares at issuance for each Class S and Class D common shares. The Company will pay interest equal to 12.0% 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 Manager has voluntarily agreed to waive such interest expense.

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 Note Offering for general corporate purposes.

The components of total interest expense were as follows (dollar amounts in thousands):

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2026

 

 

June 30, 2025

 

 

June 30, 2026

 

 

June 30, 2025

 

Borrowings interest expense

 

$

6

 

 

$

—

 

 

$

13

 

 

$

—

 

Amortization of discount *

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total interest expense

 

$

6

 

 

$

—

 

 

$

13

 

 

$

—

 

Average debt borrowings

 

$

220

 

 

$

—

 

 

$

220

 

 

$

—

 

Average interest rates on borrowings

 

 

12.08

%

 

 

0.00

%

 

 

12.10

%

 

 

0.00

%

 

* Less than $500

 

Short-Term Borrowings

In order to finance certain investment transactions, the Company may, from time to time, enter into reverse repurchase agreements, whereby the Company sells to a counterparty an investment that it holds and concurrently enters into an agreement to repurchase the same investment at an agreed-upon purchase price at a future date (each a “Short-Term Financing Transaction”). Securities sold under this arrangement are presented in the Consolidated Schedule of Investments. The Company may also enter into other forms of short-term borrowing such as forward purchase agreements.

In accordance with ASC 860, Transfers and Servicing, the Short-Term Financing Transactions meet the criteria for secured borrowings. Accordingly, the investment financed by these agreements remains on the Company’s consolidated statements of assets and liabilities as an asset, and the Company records a liability to reflect its repurchase obligation, which is reported as debt on the Company’s consolidated statements of assets and liabilities. The repurchase obligation is secured by the respective investment that is the subject of the reverse repurchase agreement. Interest expense associated with the repurchase obligation is reported on the Company’s consolidated statements of operations within interest expense.

The components of total interest expense were as follows (dollar amounts in thousands):

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2026

 

 

June 30, 2025

 

 

June 30, 2026

 

 

June 30, 2025

 

Borrowings interest expense

 

$

—

 

 

$

—

 

 

$

385

 

 

$

—

 

Total interest expense

 

$

—

 

 

$

—

 

 

$

385

 

 

$

—

 

Average debt borrowings

 

$

—

 

 

$

—

 

 

$

11,763

 

 

$

—

 

Average interest rates on borrowings

 

 

0.00

%

 

 

0.00

%

 

 

6.60

%

 

 

0.00

%

As of June 30, 2026 and December 31, 2025, the Company had an aggregate amount of $148.1 million and $173.6 million of debt outstanding and the asset coverage ratio was 298.84% and 217.9%, respectively.

 

The following is information about the Company's senior securities as of the dates indicated in the below table (dollar amounts in thousands):

 

Class and Year

 

Total Amount
Outstanding (1)

 

 

Asset Coverage
per Unit (2)

 

 

Involuntary
Liquidating
Preference
Per Unit (3)

 

 

Average Market
Value Per Unit (4)

Revolving Credit Facility

 

 

 

 

 

 

 

 

 

 

 

June 30, 2026

 

$

89,850

 

 

 

3

 

 

 

—

 

 

N/A

March 31, 2026

 

 

144,350

 

 

 

3

 

 

 

—

 

 

N/A

December 31, 2025

 

 

165,750

 

 

 

2

 

 

 

—

 

 

N/A

Asset-Based Lending Facility

 

 

 

 

 

 

 

 

 

 

 

June 30, 2026

 

$

58,000

 

 

 

3

 

 

 

—

 

 

N/A

March 31, 2026

 

 

—

 

 

 

—

 

 

 

—

 

 

N/A

December 31, 2025

 

 

—

 

 

 

—

 

 

 

—

 

 

N/A

Promissory Notes Payable

 

 

 

 

 

 

 

 

 

 

 

June 30, 2026

 

 

215

 

 

 

3

 

 

 

—

 

 

N/A

March 31, 2026

 

 

214

 

 

 

3

 

 

 

—

 

 

N/A

December 31, 2025

 

 

214

 

 

 

2

 

 

 

—

 

 

N/A

 

(1)
Total amount of each class of senior securities outstanding at the end of the period presented.
(2)
The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our total assets, less all liabilities and indebtedness not represented by senior securities, divided by senior securities representing indebtedness. The asset coverage ratio with respect to indebtedness is multiplied by $1,000 to determine the Asset Coverage Per Unit.
(3)
The amount to which such class of senior security would be entitled upon the voluntary liquidation of the issuer in preference to any security junior to it. The “—” in this column indicates that the Securities and Exchange Commission (“SEC”) expressly does not require this information to be disclosed for certain types of senior securities.
(4)
The Company’s senior securities are not registered for public trading.