INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2026

Schedule of Composition of Investment Portfolio at Cost And Fair Value

Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments and net assets, are shown in the following tables:


($ in thousands)	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio		Percentage of Total Net Assets
September 30, 2026:
Senior debt and 1st lien notes	$	1,820,136	71	%	$	1,771,736	71	%	155	%
Subordinated debt and 2nd lien notes	236,083		9		233,332		9		21
Structured products	25,638		1		23,350		1		2
Equity shares	391,495		16		444,996		18		39
Equity warrants	76		—		1,369		—		—
Royalty rights	1,206		—		1,507		—		—
Investment in joint ventures	77,378		3		33,481		1		3

	$	2,552,012	100	%	$	2,509,771	100	%	220	%
December 31, 2025:
Senior debt and 1st lien notes	$	1,704,910	70	%	$	1,676,334	70	%	144	%
Subordinated debt and 2nd lien notes	195,392		8		190,290		8		17
Structured products	39,462		2		29,627		1		3
Equity shares	382,930		16		436,466		18		38
Equity warrants	76		—		1,170		—		—
Royalty rights	1,292		—		1,486		—		—
Investment in joint ventures	100,218		4		63,151		3		5

	$	2,424,280	100	%	$	2,398,524	100	%	207	%

The Company’s new investment activity for the three and nine months ended September 30, 2026 and 2025 was as follows:


	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
($ in thousands)	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Investments funded:
New portfolio company investments	$	121,345	$	78,609	$	355,850	$	356,632
Additional investments in existing portfolio companies	74,620		70,164		210,941		198,099
Total investments funded	$	195,965	$	148,773	$	566,791	$	554,731

Number of new portfolio company investments	20		14		54		47

As of September 30, 2026 and December 31, 2025, the Jocassee investment portfolio consisted of the following investments:


($ in thousands)	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio
September 30, 2026:
Senior debt and 1st lien notes	$	1,163,544	91	%	$	1,133,740	92	%
Subordinated debt and 2nd lien notes	14,651		1		14,931		1

Equity shares	4,594		—		5,592		1

Investment in joint ventures	27,612		2		3,101		—
Short-term investments	73,675		6		73,675		6
	$	1,284,076	100	%	$	1,231,039	100	%
December 31, 2025:
Senior debt and 1st lien notes	$	1,226,601	95	%	$	1,202,376	97	%
Subordinated debt and 2nd lien notes	10,561		1		10,594		1

Equity shares	874		—		362		—

Investment in joint ventures	34,704		3		10,274		1
Short-term investments	17,781		1		17,781		1
	$	1,290,521	100	%	$	1,241,387	100	%

The industry composition of Jocassee’s investments at fair value at September 30, 2026 and December 31, 2025, excluding short-term investments, was as follows:


($ in thousands)	September 30, 2026				December 31, 2025
Aerospace & Defense	$	51,551	5	%	$	66,828	6	%
Automotive	14,160		1		12,505		1
Banking, Finance, Insurance, & Real Estate	111,634		10		130,393		11
Beverage, Food, & Tobacco	15,865		1		32,102		3
Capital Equipment	42,027		4		40,454		3
Chemicals, Plastics, & Rubber	22,004		2		26,223		2
Construction & Building	36,456		3		28,031		2
Consumer goods: Durable	16,124		1		24,400		2
Consumer goods: Non-durable	23,560		2		28,825		2
Containers, Packaging, & Glass	35,947		3		32,380		3
Energy: Electricity	10,394		1		8,968		1
Energy: Oil & Gas	16,930		1		11,493		1
Environmental Industries	14,785		1		15,460		1
Forest Products & Paper	2,712		—		2,521		—
Healthcare & Pharmaceuticals	128,002		11		136,378		11
High Tech Industries	114,029		10		118,164		10
Hotel, Gaming, & Leisure	36,260		3		28,795		2
Investment Funds & Vehicles	3,101		—		10,274		1
Media: Advertising, Printing, & Publishing	19,584		2		14,565		1
Media: Broadcasting & Subscription	15,780		1		13,702		1
Media: Diversified & Production	41,050		4		48,553		4
Metals & Mining	7,023		1		5,250		—
Retail	6,238		1		9,728		1
Services: Business	209,362		18		219,055		18
Services: Consumer	69,447		6		71,818		6

Telecommunications	19,747		2		20,859		2
Transportation: Cargo	35,937		3		38,392		3
Transportation: Consumer	11,909		1		8,312		1
Utilities: Electric	21,348		2		17,437		1
Utilities: Oil & Gas	4,398		—		1,741		—

Total	$	1,157,364	100	%	$	1,223,606	100	%

Schedule of Investment Portfolio

The geographic composition of Jocassee’s investments at fair value at September 30, 2026 and December 31, 2025, excluding short-term investments, was as follows:


($ in thousands)	September 30, 2026				December 31, 2025
Australia	$	19,849	2	%	$	24,053	2	%
Austria	6,172		1		6,459		1
Belgium	3,126		—		20,645		2
Canada	7,101		1		2,081		—


France	91,938		8		110,106		9
Germany	46,484		4		47,823		4
Hong Kong	9,700		1		15,000		1
Ireland	8,421		1		8,743		1

Luxembourg	2,950		—		3,340		—
Netherlands	40,072		3		49,546		4


Singapore	4,965		—		4,950		—
Spain	4,304		—		3,167		—


United Kingdom	55,474		5		111,148		9
USA	856,808		74		816,545		67
Total	$	1,157,364	100	%	$	1,223,606	100	%

As of September 30, 2026 and December 31, 2025, Jocassee had the following contributed capital and unfunded commitments from its members:


($ in thousands)	As of September 30, 2026		As of December 31, 2025
Total contributed capital by Barings BDC, Inc.	$	35,000	$	35,000
Total contributed capital by all members	385,000		385,000
Total unfunded commitments by Barings BDC, Inc.	65,000		65,000
Total unfunded commitments by all members	215,000		215,000

As of September 30, 2026 and December 31, 2025, the Thompson Rivers investment portfolio consisted of the following investments:


	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio
September 30, 2026:
Federal Housing Administration (“FHA”) loans	$	60,765	97	%	$	53,095	97	%
Veterans Affairs (“VA”) loans	2,113		3		1,837		3

	$	62,878	100	%	$	54,932	100	%
December 31, 2025:
Federal Housing Administration (“FHA”) loans	$	112,317	95	%	$	106,195	95	%
Veterans Affairs (“VA”) loans	5,883		5		5,557		5

	$	118,200	100	%	$	111,752	100	%

As of September 30, 2026 and December 31, 2025, Thompson Rivers had the following contributed capital and unfunded commitments from its members:


($ in thousands)	As of September 30, 2026		As of December 31, 2025
Total contributed capital by Barings BDC, Inc. (1)	$	79,411	$	79,411
Total contributed capital by all members (2)	482,083		482,083
Total unfunded commitments by Barings BDC, Inc.	—		—
Total unfunded commitments by all members	—		—

(1)Includes $4.4 million of dividend re-investments.

(2)Includes dividend re-investments of $32.1 million and total contributed capital by related parties of $162.1 million as of both September 30, 2026 and December 31, 2025.

As of September 30, 2026 and December 31, 2025, Waccamaw River had the following contributed capital and unfunded commitments from its members:


($ in thousands)	As of September 30, 2026		As of December 31, 2025
Total contributed capital by Barings BDC, Inc.	$	30,280	$	30,280
Total contributed capital by all members (1)	139,020		139,020



Total unfunded commitments by Barings BDC, Inc.	—		—
Total unfunded commitments by all members	—		—

(1)Includes $82.0 million of total contributed capital by related parties as of both September 30, 2026 and December 31, 2025.

As of December 31, 2025, the Sierra JV investment portfolio consisted of the following investments:


($ in thousands)	Cost		Percentage of Total Portfolio		Fair Value		Percentage of Total Portfolio









December 31, 2025:
Senior debt and 1st lien notes	$	2,721	100	%	$	2,701	100	%


Equity shares	—		—		—		—



	$	2,721	100	%	$	2,701	100	%

The industry composition of Sierra JV’s investments at fair value at December 31, 2025 was as follows:


($ in thousands)	December 31, 2025























Services: Business		$	2,701	100	%








Total		$	2,701	100	%

Schedule of Fair Value Measurement Inputs and Valuation Techniques

The following tables summarize the significant unobservable inputs the Adviser used in the valuation of the Company’s Level 3 debt and equity securities as of September 30, 2026 and December 31, 2025. The weighted average range of unobservable inputs is based on fair value of investments.

September 30, 2026:

($ in thousands)

Fair Value

Valuation
Model

Level 3
Input

Range of
Inputs

Weighted
Average

Impact to Valuation from an Increase in Input

Senior debt and 1st lien notes

1,418,617

Yield Analysis

Market Yield

7.4% – 23.4%

11.4%

Decrease

105,778

Market Approach

Adjusted EBITDA Multiple

0.2x – 12.7x

8.5x

Increase

3,333

Market Approach

Tangible Book Value Multiple

2.0x

Increase

6,474

Expected Recovery

$1,703.8 – $4,770.6

$3,963.5

Increase

235,277

Recent Transaction

Transaction Price

97.5% – 100.0%

98.7%

Increase

Subordinated debt and 2nd lien notes

160,656

Yield Analysis

Market Yield

8.6% – 39.2%

13.4%

Decrease

43,909

Market Approach

Adjusted EBITDA Multiple

0.8x – 12.7x

7.8x

Increase

28,767

Market Approach

Tangible Book Value Multiple

1.1x – 2.0x

1.6x

Increase

Structured products(1)

12,236

Yield Analysis

Market Yield

6.1% – 11.9%

11.2%

Decrease

Equity shares(2)

51,924

Yield Analysis

Market Yield

12.9% – 29.5%

18.5%

Decrease

112,123

Market Approach

Adjusted EBITDA Multiple

0.2x – 22.5x

9.4x

Increase

Market Approach

Revenue Multiple

7.5x

Increase

233,879

Market Approach

Tangible Book Value Multiple

1.1x – 2.0x

1.6x

Increase

362

Black-Scholes

Volatility

40.0%

Increase

21,285

Discounted Cash Flow Analysis

Discount Rate

13.4%

Decrease

1,584

Net Asset Approach

Liabilities

$(57,947.3)

Decrease

8,560

Expected Recovery

$2.5 – $8,540.0

$8,520.0

Increase

2,653

Recent Transaction

Transaction Price

$1.00 – $1,000.00

$133.76

Increase

Equity warrants

1,366

Market Approach

Adjusted EBITDA Multiple

0.4x – 11.3x

11.1x

Increase

Expected Recovery

$3.0

Increase

Royalty rights

1,507

Yield Analysis

Market Yield

26.0% – 28.0%

27.0%

Decrease

(1)Excludes investments with an aggregate fair value amounting to $2,973, which the Adviser valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(2)Excludes investments with an aggregate fair value amounting to $3,030, which the Adviser valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

The changes in

approach were driven by considerations given to the financial performance of each portfolio company and changes in the observability of significant inputs.

December 31, 2025:

($ in thousands)

Fair Value

Valuation
Model

Level 3
Input

Range of
Inputs

Weighted
Average

Impact to Valuation from an Increase in Input

Senior debt and 1st lien notes

1,370,510

Yield Analysis

Market Yield

6.6% – 32.1%

10.5%

Decrease

62,428

Market Approach

Adjusted EBITDA Multiple

0.2x – 12.0x

6.5x

Increase

228,523

Recent Transaction

Transaction Price

98.0% – 100.0%

99.0%

Increase

Subordinated debt and 2nd lien notes

135,739

Yield Analysis

Market Yield

8.0% – 22.5%

12.9%

Decrease

50,987

Market Approach

Adjusted EBITDA Multiple

0.7x – 26.0x

11.8x

Increase

2,667

Recent Transaction

Transaction Price

98.0%

Increase

Structured products(1)

1,868

Yield Analysis

Market Yield

9.3% – 10.3%

9.8%

Decrease

Equity shares(2)

44,513

Yield Analysis

Market Yield

11.0% – 32.8%

16.9%

Decrease

348,612

Market Approach

Adjusted EBITDA Multiple

0.2x – 27.0x

15.7x

Increase

756

Market Approach

Revenue Multiple

5.3x – 8.5x

5.7x

Increase

19,983

Discounted Cash Flow Analysis

Discount Rate

12.4%

Decrease

5,830

Net Asset Approach

Liabilities

$(93,817.9) – $(117,319.9)

$(105,349.0)

Decrease

Expected Recovery

$2.5 – $36.0

$33.8

Increase

8,584

Recent Transaction

Transaction Price

$0.00 – $1,000.00

$31.33

Increase

Equity warrants

1,167

Market Approach

Adjusted EBITDA Multiple

0.5x – 11.3x

11.3x

Increase

Expected Recovery

$3.0

Increase

Royalty rights

1,486

Yield Analysis

Market Yield

28.0% – 30.0%

29.0%

Decrease

(1)Excludes investments with an aggregate fair value amounting to $14,820, which the Adviser valued using unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

The following table summarizes the significant unobservable inputs the Adviser used in the valuation of the Company’s Level 3 Prior Sierra Credit Support Agreement as of December 31, 2025. The average range of unobservable inputs is based on fair value of the Prior Sierra Credit Support Agreement.

December 31, 2025:

($ in thousands)

Fair Value

Valuation
Model

Level 3
Input

Range of
Inputs

Average

Impact to Valuation from an Increase in Input

Prior Sierra Credit Support Agreement

60,500

Simulation Analysis

Enterprise Value / Equity Value

$0 - $385,100

$192,550

Decrease

Asset Volatility

20.0% - 50.0%

35.0%

Increase

Time Until Exit (years)

0.0 - 2.3

1.2

Decrease

Discount Rate

5.4%

Decrease

Recovery Rate

20.0% - 40.0%

30.0%

Decrease

The following table summarizes the significant unobservable inputs the Adviser used in the valuation of the Company’s Level 3 New Sierra Credit Support Agreement as of September 30, 2026.

September 30, 2026:

($ in thousands)

Fair Value

Valuation
Model

Level 3
Input

Input

Impact to Valuation from an Increase in Input

New Sierra Credit Support Agreement

1,260

Black-Scholes

Asset Volatility

25.0%

Increase

Time Until Exit (years)

5.5

Increase

Schedule of Fair Value, Assets Measured on Recurring Basis

The following tables present the Company’s investment portfolio at fair value as of September 30, 2026 and December 31, 2025, categorized by the ASC Topic 820 valuation hierarchy, as previously described:


	Fair Value as of September 30, 2026
($ in thousands)	Level 1		Level 2		Level 3		Total
Senior debt and 1st lien notes	$	—	$	2,257	$	1,769,479	$	1,771,736
Subordinated debt and 2nd lien notes	—		—		233,332		233,332
Structured products	—		8,141		15,209		23,350
Equity shares	—		9,501		435,495		444,996
Equity warrants	—		—		1,369		1,369

Royalty rights	—		—		1,507		1,507
Investments subject to leveling	$	—	$	19,899	$	2,456,391	$	2,476,290
Investment in joint ventures (1)							33,481
							$	2,509,771

	Fair Value as of December 31, 2025
($ in thousands)	Level 1		Level 2		Level 3		Total
Senior debt and 1st lien notes	$	—	$	14,873	$	1,661,461	$	1,676,334
Subordinated debt and 2nd lien notes	—		897		189,393		190,290
Structured products	—		12,939		16,688		29,627
Equity shares	—		5,120		431,346		436,466
Equity warrants	—		—		1,170		1,170
Royalty rights	—		—		1,486		1,486

Investments subject to leveling	$	—	$	33,829	$	2,301,544	$	2,335,373
Investment in joint ventures (1)							63,151
							$	2,398,524

(1)The Company’s investments in Jocassee, Sierra JV, Thompson Rivers and Waccamaw River are measured at fair value using NAV as a practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Unaudited and Audited Consolidated Balance Sheets.

Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables reconcile the beginning and ending balances of the Company’s investment portfolio measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2026 and 2025:


Nine Months Ended September 30, 2026: ($ in thousands)	Senior Debt and 1st Lien Notes		Subordinated Debt and 2nd Lien Notes		Structured Products		Equity Shares		Equity Warrants		Royalty Rights		Total
Fair value, beginning of period	$	1,661,461	$	189,393	$	16,688	$	431,346	$	1,170	$	1,486	$	2,301,544
New investments	455,396		106,751		640		2,878		—		—		565,665

Investment restructuring	(8,462)		(130)		—		8,592		—		—		—

Transfers out of Level 3 (1)	—		—		—		(2,373)		—		—		(2,373)
Proceeds from sales of investments / return of capital	(45,937)		(9,802)		—		(10,904)		—		(87)		(66,730)
Loan origination fees received	(6,957)		(903)		—		—		—		—		(7,860)
Principal repayments received	(271,223)		(58,689)		(2,448)		—		—		—		(332,360)
Payment-in-kind interest / dividends	9,165		6,725		—		3,206		—		—		19,096

Accretion of loan premium / discount	425		—		—		—		—		—		425
Accretion of deferred loan origination revenue	6,407		730		—		—		—		—		7,137
Realized gain (loss)	(11,763)		405		(291)		4,794		—		—		(6,855)
Unrealized appreciation (depreciation)	(19,033)		(1,148)		620		(2,044)		199		108		(21,298)
Fair value, end of period	$	1,769,479	$	233,332	$	15,209	$	435,495	$	1,369	$	1,507	$	2,456,391


Nine Months Ended September 30, 2025: ($ in thousands)	Senior Debt and 1st Lien Notes		Subordinated Debt and 2nd Lien Notes		Structured Products		Equity Shares		Equity Warrants		Royalty Rights		Total
Fair value, beginning of period	$	1,625,501	$	153,703	$	48,664	$	408,475	$	2,732	$	5,833	$	2,244,908
New investments	459,219		60,065		7,500		18,825		—		—		545,609
Investment restructuring	424		(424)		—		—				—		—
Transfers into Level 3 (1)	—		5,989		—		—		—		—		5,989
Transfers out of Level 3 (1)	—		(10,159)		(3,310)		(13,156)		—		—		(26,625)
Proceeds from sales of investments / return of capital	(154,807)		—		(1,998)		(15,265)		—		(4,776)		(176,846)
Loan origination fees received	(7,929)		(1,650)		—		—		—		—		(9,579)
Principal repayments received	(208,334)		(20,684)		(31,922)		—		—		—		(260,940)
Payment-in-kind interest / dividends	6,831		3,824		—		8,885		—		—		19,540
Accretion of loan premium / discount	248		—		—		—		—		—		248
Accretion of deferred loan origination revenue	7,200		615		143		—		—		—		7,958
Realized gain (loss)	(23,320)		(9,384)		(1,560)		5,976		—		2,467		(25,821)
Unrealized appreciation (depreciation)	33,034		9,777		260		7,203		(1,664)		(1,943)		46,667
Fair value, end of period	$	1,738,067	$	191,672	$	17,777	$	420,943	$	1,068	$	1,581	$	2,371,108

(1)Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For both the nine months ended September 30, 2026 and 2025, transfers into (out of) Level 3 were as a result of changes in the observability of significant inputs for certain portfolio companies.

Schedule of PIK Interest and Dividend Income

PIK interest and dividend income for the three and nine months ended September 30, 2026 and 2025 was as follows:


	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
($ in thousands)	September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
PIK interest income	$	6,438		$	5,199		$	15,802		$	14,025
PIK interest income as a % of investment income	10.0		%	7.2		%	8.3		%	6.6		%
PIK dividend income	$	1,328		$	3,525		$	3,829		$	10,132
PIK dividend income as % of investment income	2.1		%	4.9		%	2.0		%	4.8		%
Total PIK income	$	7,766		$	8,724		$	19,631		$	24,157

Total PIK income as a % of investment income	12.1		%	12.0		%	10.3		%	11.4		%

Schedule of Fee and Other Income

Fee and other income for the three and nine months ended September 30, 2026 and 2025 was as follows:


	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
($ in thousands)	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Recurring Fee and Other Income:
Amortization of loan origination fees	$	1,679	$	1,780	$	5,102	$	5,453
Management, valuation and other fees	617		656		1,767		1,883
Royalty income	45		36		113		339
Total Recurring Fee and Other Income	2,341		2,472		6,982		7,675
Non-Recurring Fee and Other Income:
Prepayment fees	349		124		1,001		320
Acceleration of unamortized loan origination fees	680		969		1,458		2,509
Advisory, loan amendment and other fees	356		439		690		1,955
Total Non-Recurring Fee and Other Income	1,385		1,532		3,149		4,784
Total Fee and Other Income	$	3,726	$	4,004	$	10,131	$	12,459

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details