| Fair Value Measurements |
Note 5. Fair Value Measurements The following table presents the fair value of investments as of September 30, 2026, disaggregated into the three levels of the fair value hierarchy in accordance with ASC 820 (in thousands):
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|
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|
Fair Value Measurements |
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
First Lien Debt (1) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,052,225 |
|
|
$ |
2,052,225 |
|
Common Stock |
|
|
— |
|
|
|
— |
|
|
|
881 |
|
|
|
881 |
|
Preferred Stock |
|
|
— |
|
|
|
— |
|
|
|
598 |
|
|
|
598 |
|
L.P. Interest |
|
|
— |
|
|
|
— |
|
|
|
614 |
|
|
|
614 |
|
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,054,318 |
|
|
$ |
2,054,318 |
|
(1)First lien debt consists of first lien term loans, first lien, last-out term loans, second-out term loans, first lien delayed draw term loans and first lien revolvers. The following table presents the fair value of investments as of December 31, 2025, disaggregated into the three levels of the fair value hierarchy in accordance with ASC 820 (in thousands):
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|
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|
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|
|
|
|
Fair Value Measurements |
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|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
First Lien Debt (1) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,571,924 |
|
|
$ |
1,571,924 |
|
Common Stock |
|
|
— |
|
|
|
— |
|
|
|
1,598 |
|
|
|
1,598 |
|
Preferred Stock |
|
|
— |
|
|
|
— |
|
|
|
846 |
|
|
|
846 |
|
L.P. Interest |
|
|
— |
|
|
|
— |
|
|
|
533 |
|
|
|
533 |
|
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,574,901 |
|
|
$ |
1,574,901 |
|
(1)First lien debt consists of first lien term loans, first lien, last-out term loans, second-out term loans, first lien delayed draw term loans and first lien revolvers. The following tables present change for the three and nine months ended September 30, 2026 in the fair value of investments for which Level 3 inputs were used to determine fair value (in thousands):
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2026 |
|
|
|
First Lien Debt |
|
|
Preferred Stock |
|
|
Common Stock |
|
|
L.P. Interest |
|
|
Total |
|
Fair value, beginning of period |
|
$ |
1,904,089 |
|
|
$ |
596 |
|
|
$ |
1,125 |
|
|
$ |
590 |
|
|
$ |
1,906,400 |
|
Purchases of investments |
|
|
177,803 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
177,803 |
|
Proceeds from principal repayments and sales of investments |
|
|
(31,305 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(31,305 |
) |
Accretion of discount/amortization of premium |
|
|
879 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
879 |
|
Payment-in-kind interest and fees capitalized |
|
|
1,372 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,372 |
|
Net realized gain (loss) on investments |
|
|
274 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
274 |
|
Net change in unrealized appreciation (depreciation) |
|
|
(887 |
) |
|
|
2 |
|
|
|
(244 |
) |
|
|
24 |
|
|
|
(1,105 |
) |
Fair value, end of period |
|
$ |
2,052,225 |
|
|
$ |
598 |
|
|
$ |
881 |
|
|
$ |
614 |
|
|
$ |
2,054,318 |
|
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of September 30, 2026 |
|
$ |
(886 |
) |
|
$ |
2 |
|
|
$ |
(244 |
) |
|
$ |
24 |
|
|
$ |
(1,104 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2026 |
|
|
|
First Lien Debt |
|
|
Preferred Stock |
|
|
Common Stock |
|
|
L.P. Interest |
|
|
Total |
|
Fair value, beginning of period |
|
$ |
1,571,924 |
|
|
$ |
846 |
|
|
$ |
1,598 |
|
|
$ |
533 |
|
|
$ |
1,574,901 |
|
Purchases of investments |
|
|
597,381 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
597,381 |
|
Proceeds from principal repayments and sales of investments |
|
|
(116,875 |
) |
|
|
(273 |
) |
|
|
— |
|
|
|
— |
|
|
|
(117,148 |
) |
Accretion of discount/amortization of premium |
|
|
2,522 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,522 |
|
Payment-in-kind interest and fees capitalized |
|
|
3,852 |
|
|
|
39 |
|
|
|
— |
|
|
|
— |
|
|
|
3,891 |
|
Net realized gain (loss) on investments |
|
|
939 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
943 |
|
Net change in unrealized appreciation (depreciation) |
|
|
(7,518 |
) |
|
|
(18 |
) |
|
|
(717 |
) |
|
|
81 |
|
|
|
(8,172 |
) |
Fair value, end of period |
|
$ |
2,052,225 |
|
|
$ |
598 |
|
|
$ |
881 |
|
|
$ |
614 |
|
|
$ |
2,054,318 |
|
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of September 30, 2026 |
|
$ |
(7,041 |
) |
|
$ |
(18 |
) |
|
$ |
(717 |
) |
|
$ |
81 |
|
|
$ |
(7,695 |
) |
The following tables present change for the three and nine months ended September 30, 2025 in the fair value of investments for which Level 3 inputs were used to determine fair value (in thousands):
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|
|
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|
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|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2025 |
|
|
|
First Lien Debt |
|
|
Preferred Stock |
|
|
Common Stock |
|
|
L.P. Interest |
|
|
Total |
|
Fair value, beginning of period |
|
$ |
1,083,216 |
|
|
$ |
780 |
|
|
$ |
4,848 |
|
|
$ |
470 |
|
|
$ |
1,089,314 |
|
Purchases of investments |
|
|
249,939 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
249,939 |
|
Proceeds from principal repayments and sales of investments |
|
|
(5,368 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,368 |
) |
Accretion of discount/amortization of premium |
|
|
759 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
759 |
|
Payment-in-kind interest and fees capitalized |
|
|
438 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
438 |
|
Net realized gain (loss) on investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net change in unrealized appreciation (depreciation) |
|
|
457 |
|
|
|
32 |
|
|
|
(2,620 |
) |
|
|
— |
|
|
|
(2,131 |
) |
Fair value, end of period |
|
$ |
1,329,441 |
|
|
$ |
812 |
|
|
$ |
2,228 |
|
|
$ |
470 |
|
|
$ |
1,332,951 |
|
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of September 30, 2025 |
|
$ |
457 |
|
|
$ |
32 |
|
|
$ |
(2,620 |
) |
|
$ |
— |
|
|
$ |
(2,131 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2025 |
|
|
|
First Lien Debt |
|
|
Preferred Stock |
|
|
Common Stock |
|
|
L.P. Interest |
|
|
Total |
|
Fair value, beginning of period |
|
$ |
769,665 |
|
|
$ |
706 |
|
|
$ |
8,000 |
|
|
$ |
— |
|
|
$ |
778,371 |
|
Purchases of investments |
|
|
600,544 |
|
|
|
— |
|
|
|
— |
|
|
|
434 |
|
|
|
600,978 |
|
Proceeds from principal repayments and sales of investments |
|
|
(44,300 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(44,300 |
) |
Accretion of discount/amortization of premium |
|
|
1,903 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,903 |
|
Payment-in-kind interest and fees capitalized |
|
|
1,043 |
|
|
|
46 |
|
|
|
— |
|
|
|
— |
|
|
|
1,089 |
|
Net realized gain (loss) on investments |
|
|
525 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
525 |
|
Net change in unrealized appreciation (depreciation) |
|
|
61 |
|
|
|
60 |
|
|
|
(5,772 |
) |
|
|
36 |
|
|
|
(5,615 |
) |
Fair value, end of period |
|
$ |
1,329,441 |
|
|
$ |
812 |
|
|
$ |
2,228 |
|
|
$ |
470 |
|
|
$ |
1,332,951 |
|
Net change in unrealized appreciation (depreciation) related to financial instruments still held as of September 30, 2025 |
|
$ |
588 |
|
|
$ |
60 |
|
|
$ |
(5,772 |
) |
|
$ |
36 |
|
|
$ |
(5,088 |
) |
Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. For the three and nine months ended September 30, 2026 and 2025, there were no transfers into or out of Level 3. The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments as of September 30, 2026 and December 31, 2025. The tables are not intended to be all-inclusive but instead capture the significant unobservable inputs relevant to the Company’s determination of fair value.
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|
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|
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|
September 30, 2026 |
|
|
|
|
|
|
|
|
|
Range |
|
|
|
|
Fair Value
(in thousands) |
|
|
Valuation
Technique |
|
Unobservable
Input |
|
Low |
|
High |
|
Weighted
Average (1) |
Investments in First Lien Debt |
|
$ |
2,052,225 |
|
|
Yield analysis |
|
Discount rate |
|
7.0% |
|
17.0% |
|
9.6% |
Investments in Common Stock |
|
|
881 |
|
|
Market approach |
|
Transaction multiples |
|
12.2x |
|
12.2x |
|
12.2x |
|
|
|
|
|
Market approach |
|
Market comparables |
|
11.9x |
|
11.9x |
|
11.9x |
|
|
|
|
|
Discounted cash flows |
|
Discount rate |
|
15.7% |
|
15.7% |
|
15.7% |
Investments in Preferred Stock |
|
|
598 |
|
|
Yield analysis |
|
Discount rate |
|
9.1% |
|
9.1% |
|
9.1% |
Investments in L.P. Interest |
|
|
614 |
|
|
Market approach |
|
Transaction multiples |
|
14.9x |
|
14.9x |
|
14.9x |
|
|
|
|
|
Market approach |
|
Market comparables |
|
14.9x |
|
14.9x |
|
14.9x |
|
|
|
|
|
Discounted cash flows |
|
Discount rate |
|
14.6% |
|
14.6% |
|
14.6% |
|
|
$ |
2,054,318 |
|
|
|
|
|
|
|
|
|
|
|
(1)Weighted averages are calculated based on fair value of investments.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
|
|
|
|
|
|
|
Range |
|
|
|
|
Fair Value
(in thousands) |
|
|
Valuation
Technique |
|
Unobservable
Input |
|
Low |
|
High |
|
Weighted
Average (1) |
Investments in First Lien Debt |
|
$ |
1,571,924 |
|
|
Yield analysis |
|
Discount rate |
|
4.9% |
|
12.5% |
|
8.3% |
Investments in Common Stock |
|
|
1,598 |
|
|
Market approach |
|
Transaction multiples |
|
12.2x |
|
12.2x |
|
12.2x |
|
|
|
|
|
Market approach |
|
Market comparables |
|
13.5x |
|
13.5x |
|
13.5x |
|
|
|
|
|
Discounted cash flows |
|
Discount rate |
|
15.6% |
|
15.6% |
|
15.6% |
Investments in Preferred Stock |
|
|
846 |
|
|
Yield analysis |
|
Discount rate |
|
9.4% |
|
9.4% |
|
9.4% |
Investments in L.P. Interest |
|
|
533 |
|
|
Market approach |
|
Transaction multiples |
|
14.9x |
|
14.9x |
|
14.9x |
|
|
|
|
|
Market approach |
|
Market comparables |
|
17.6x |
|
17.6x |
|
17.6x |
|
|
|
|
|
Discounted cash flows |
|
Discount rate |
|
15.3% |
|
15.3% |
|
15.3% |
|
|
$ |
1,574,901 |
|
|
|
|
|
|
|
|
|
|
|
(1)Weighted averages are calculated based on fair value of investments. The significant unobservable input used in the yield analysis and discounted cash flows is the discount rate based on comparable market yields. Significant increases or decreases in discount rates would result in a significantly lower or higher fair value measurement. The significant unobservable inputs used in the market approach are based on market comparable transactions and market multiples of publicly traded comparable companies. Increases or decreases in market comparable transactions or market multiples would result in an increase or decrease, in the fair value. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized appreciation or depreciation reflected in the valuations currently assigned.
|