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Summary of Significant Accounting Policies | 6 Months Ended
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Jun. 30, 2025
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company is an investment company following accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies. The Company has consolidated the results of its wholly owned subsidiaries in its consolidated financial statements in accordance with ASC Topic 946. The following is a summary of the significant accounting policies of the Company. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well the reported amounts of revenues and expenses during the reporting periods presented. Although management believes these estimates and assumptions to be reasonable, actual results could differ from those estimates and such differences could be material. Investment Valuation Pursuant to Rule 2a-5 (the “Rule”) under the 1940 Act, the Board of Directors designated the Advisor as the Company’s valuation designee (the “Valuation Designee”) to perform certain fair value functions, including performing fair value determinations and has approved policies and procedures adopted by the Advisor to seek to ensure compliance with the requirements of the Rule. The Company’s investments are generally held by the Company's subsidiaries. Investments are recorded at fair value in accordance with GAAP, based upon the principles and methods of valuation set forth in the policies adopted by the Valuation Designee and approved by the Board of Directors. Fair value is generally defined as the amount for which an investment would be sold in an orderly transaction between market participants at the measurement date. All investments are valued at least quarterly based on quotations or other affirmative pricing from independent third-party sources, with the exception of investments priced directly by the Valuation Designee which in the aggregate comprise less than 5% of the assets of the Company. Investments listed on a recognized exchange or market quotation system, whether U.S. or foreign, are valued using the closing price on the date of valuation. Investments not listed on a recognized exchange or market quotation system, but for which reliable market quotations are readily available are valued using prices provided by a nationally recognized pricing service or by using quotations from broker-dealers. Investments for which market quotations are either not readily available or are determined to be unreliable are priced at fair value using affirmative valuations performed by independent valuation services approved by the Valuation Designee or, for investments aggregating less than 5% of the total assets of the Company, using valuations determined directly by the Valuation Designee. Such valuations are determined under documented valuation policies and procedures reviewed and approved by a committee established by the Valuation Designee (the “Valuation Committee”). Generally, to increase objectivity in valuing the investments, the Valuation Designee will utilize external measures of value, such as public markets or third-party transactions, whenever possible. The Valuation Designee’s valuation is not based on long-term work-out value, immediate liquidation value, nor incremental value for potential changes that may take place in the future. The values assigned to investments are based on available information as of the balance sheet date and do not necessarily represent amounts that might ultimately be realized, as these amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated. Such circumstances may include macroeconomic, geopolitical and other events and conditions that may significantly impact the profitability or viability of businesses in which the Company is invested, and therefore may significantly impact the return on the Company’s investments. The foregoing policies apply to all investments, including any in companies and groups of affiliated companies aggregating more than 5% of the Company’s assets. 2. Summary of Significant Accounting Policies — (continued) Fair valuations of investments in each asset class are determined using one or more methodologies including market quotations, the market approach, income approach, or, in the case of recent investments, the cost approach, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. Such information may include observed multiples of earnings and/or revenues at which transactions in securities of comparable companies occur, with appropriate adjustments for differences in company size, operations or other factors affecting comparability. The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present value amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. The discount rates used for such analyses reflect market yields for comparable investments, considering such factors as relative credit quality, capital structure, and other factors. In following these approaches, the types of factors that may be taken into account also include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, merger and acquisition comparables, comparable costs of capital, the principal market in which the investment trades and enterprise values, among other factors. Investments may be categorized based on the types of inputs used in valuing such investments. The level in the GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Transfers between levels are recognized as of the beginning of the reporting period. At June 30, 2025, the Company's investments were categorized as follows:
Level |  | Basis for Determining Fair Value |  | Bank Debt (1) |  |  | Other Corporate Debt (2) |  |  | Equity Securities |  |  | Total |
1 |  | Quoted prices in active markets for identical assets |  | $ | — |  |  | $ | — |  |  | $ | 722,126 |  |  | $ | 722,126 |
2 |  | Other direct and indirect observable market inputs (3) |  |  | 16,703,010 |  |  |  | — |  |  |  | — |  |  |  | 16,703,010 |
3 |  | Independent third-party valuation sources that employ significant unobservable inputs |  |  | 1,525,587,362 |  |  |  | 59,884,621 |  |  |  | 188,280,321 |  |  |  | 1,773,752,304 |
3 |  | Valuation Designee valuations with significant unobservable inputs |  |  | — |  |  |  | — |  |  |  | 1,157,403 |  |  |  | 1,157,403 |
Total |  |  |  | $ | 1,542,290,372 |  |  | $ | 59,884,621 |  |  | $ | 190,159,850 |  |  | $ | 1,792,334,843 |
(1) Includes senior secured loans (2) Includes senior secured notes, unsecured debt and subordinated debt (3) For example, quoted prices in inactive markets or quotes for comparable investments 2. Summary of Significant Accounting Policies — (continued) Unobservable inputs used in the fair value measurement of Level 3 investments as of June 30, 2025 included the following:
Asset Type |  | Fair Value |  |  | Valuation Technique |  | Unobservable Input |  | Range (Weighted Avg.) (1)
Bank Debt |  | $ | 1,243,923,648 |  |  | Income approach |  | Discount rate |  | 8.4% - 15.2% (11.2%)
|  |  | 109,888,151 |  |  | Market comparable companies |  | Revenue multiples |  | 0.2 x - 1.4 x (1.0 x)
|  |  | 95,443,480 |  |  | Market quotations |  | Indicative bid/ask quotes |  | 1 (1)
|  |  | 75,268,884 |  |  | Market comparable companies |  | EBITDA multiples |  | 3.0 x - 14.0 x (8.1 x)
|  |  | 1,063,199 |  |  | Asset approach (2) |  | N/A |  | N/A
Other Corporate Debt |  |  | 59,756,438 |  |  | Market comparable companies |  | Book value multiples |  | 1.6 x (1.6 x)
|  |  | 128,183 |  |  | Asset approach (2) |  | N/A |  | N/A
Equity |  |  | 66,006,354 |  |  | Market comparable companies |  | Book value multiples |  | 0.8 x - 1.6 x (1.4 x)
|  |  | 57,129,229 |  |  | Option Pricing Model |  | EBITDA/Revenue multiples |  | 2.0 x - 13.5 x (10.2 x)
|  |  |  |  |  |  | Implied volatility |  | 45.0% - 75.0% (58.8%)
|  |  |  |  |  |  | Term |  | 0.3 years - 3.3 years (2.4 years)
|  |  | 23,868,693 |  |  | Market comparable companies |  | Revenue multiples |  | 0.2 x - 5.0 x (0.9 x)
|  |  | 23,557,054 |  |  | Market comparable companies |  | EBITDA multiples |  | 3.0 x - 18.0 x (8.6 x)
|  |  | 16,700,456 |  |  | Income approach |  | Discount rate |  | 13.4% - 40.0% (15.5%)
|  |  | 2,175,938 |  |  | Transaction approach (3) |  | N/A |  | N/A
|  | $ | 1,774,909,707 |  |  |  |  |  |  |
(1) Weighted by fair value. (2) Fair value was determined using an asset approach and is based on the remaining cash held, net of all liabilities. (3) Fair value was determined using the transaction price to acquire the position. There has been no change to the valuation based on the underlying assumptions used at the closing of such transaction. 2. Summary of Significant Accounting Policies — (continued) Certain fair value measurements may employ more than one valuation technique, with each valuation technique receiving a relative weight between 0% and 100%. Generally, a change in an unobservable input may result in a change to the value of an investment as follows:
Input |  | Impact to Value if Input Increases |  | Impact to Value if Input Decreases
Discount rate |  | Decrease |  | Increase
Revenue multiples |  | Increase |  | Decrease
EBITDA multiples |  | Increase |  | Decrease
Book value multiples |  | Increase |  | Decrease
Implied volatility |  | Increase |  | Decrease
Term |  | Increase |  | Decrease
Yield |  | Increase |  | Decrease
Changes in investments categorized as Level 3 during the three months ended June 30, 2025 were as follows:
|  | Independent Third-Party Valuation |
|  | Bank Debt |  |  | Other Corporate Debt |  |  | Equity Securities |  |  | Total |
Beginning balance |  | $ | 1,511,035,364 |  |  | $ | 62,109,147 |  |  | $ | 173,418,162 |  |  | $ | 1,746,562,673 |
Net realized and unrealized gains (losses) |  |  | (23,598,192 | ) |  |  | 314,698 |  |  |  | (17,591,845 | ) |  |  | (40,875,339 | )
Acquisitions (1) |  |  | 81,074,012 |  |  |  | — |  |  |  | 33,223,320 |  |  |  | 114,297,332 |
Dispositions |  |  | (42,923,822 | ) |  |  | (2,539,224 | ) |  |  | (769,316 | ) |  |  | (46,232,362 | )
Ending balance |  | $ | 1,525,587,362 |  |  | $ | 59,884,621 |  |  | $ | 188,280,321 |  |  | $ | 1,773,752,304 |
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) |  | $ | (16,497,886 | ) |  | $ | 314,175 |  |  | $ | (17,106,349 | ) |  | $ | (33,290,060 | )
(1) Includes payments received in kind and accretion of original issue and market discounts.
|  | Valuation Designee Valuation |
|  | Bank Debt |  |  | Other Corporate Debt |  |  | Equity Securities |  |  | Total |
Beginning balance |  | $ | — |  |  | $ | — |  |  | $ | 1,157,403 |  |  | $ | 1,157,403 |
Ending balance |  | $ | — |  |  | $ | — |  |  | $ | 1,157,403 |  |  | $ | 1,157,403 |
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2. Summary of Significant Accounting Policies — (continued) Changes in investments categorized as Level 3 during the six months ended June 30, 2025 were as follows:
|  | Independent Third-Party Valuation |
|  | Bank Debt |  |  | Other Corporate Debt |  |  | Equity Securities |  |  | Total |
Beginning balance |  | $ | 1,549,242,872 |  |  | $ | 64,772,456 |  |  | $ | 150,615,054 |  |  | $ | 1,764,630,382 |
Net realized and unrealized gains (losses) |  |  | (47,523,851 | ) |  |  | (2,348,611 | ) |  |  | 912,897 |  |  |  | (48,959,565 | )
Acquisitions (1) |  |  | 121,482,589 |  |  |  | — |  |  |  | 38,010,505 |  |  |  | 159,493,094 |
Dispositions |  |  | (97,614,248 | ) |  |  | (2,539,224 | ) |  |  | (1,258,135 | ) |  |  | (101,411,607 | )
Ending balance |  | $ | 1,525,587,362 |  |  | $ | 59,884,621 |  |  | $ | 188,280,321 |  |  | $ | 1,773,752,304 |
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) |  | $ | (34,410,339 | ) |  | $ | (2,349,135 | ) |  | $ | 917,592 |  |  | $ | (35,841,882 | )
(1) Includes payments received in kind and accretion of original issue and market discounts.
|  | Valuation Designee Valuation |
|  | Bank Debt |  |  | Other Corporate Debt |  |  | Equity Securities |  |  | Total |
Beginning balance |  | $ | — |  |  | $ | — |  |  | $ | 1,157,403 |  |  | $ | 1,157,403 |
Ending balance |  | $ | — |  |  | $ | — |  |  | $ | 1,157,403 |  |  | $ | 1,157,403 |
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2. Summary of Significant Accounting Policies — (continued) At December 31, 2024, the Company’s investments were categorized as follows:
Level |  | Basis for Determining Fair Value |  | Bank Debt (1) |  |  | Other Corporate Debt (2) |  |  | Equity Securities |  |  | Total |
1 |  | Quoted prices in active markets for identical assets |  | $ | — |  |  | $ | — |  |  | $ | 412,880 |  |  | $ | 412,880 |
2 |  | Other direct and indirect observable market inputs (3) |  |  | 28,557,671 |  |  | — |  |  | — |  |  |  | 28,557,671 |
3 |  | Independent third-party valuation sources that employ significant unobservable inputs |  |  | 1,549,242,872 |  |  |  | 64,772,456 |  |  |  | 150,615,054 |  |  |  | 1,764,630,382 |
3 |  | Valuation Designee valuations with significant unobservable inputs |  | — |  |  | — |  |  |  | 1,157,403 |  |  |  | 1,157,403 |
Total |  |  |  | $ | 1,577,800,543 |  |  | $ | 64,772,456 |  |  | $ | 152,185,337 |  |  | $ | 1,794,758,336 |
(1) Includes senior secured loans. (2) Includes senior secured notes, unsecured debt and subordinated debt. (3) For example, quoted prices in inactive markets or quotes for comparable investments. Unobservable inputs used in the fair value measurement of Level 3 investments as of December 31, 2024 included the following:
Asset Type |  | Fair Value |  |  | Valuation Technique |  | Unobservable Input |  | Range (Weighted Avg.) (1)
Bank Debt |  | $ | 1,243,224,730 |  |  | Income approach |  | Discount rate |  | 9.1% - 22.4% (12.3%)
|  |  | 127,397,885 |  |  | Market comparable companies |  | Revenue multiples |  | 0.4 x - 1.4 x (0.9 x)
|  |  | 95,787,823 |  |  | Market quotations |  | Indicative bid/ask quotes |  | 1 (1)
|  |  | 41,621,909 |  |  | Asset approach (2) |  | N/A |  | N/A
|  |  | 40,763,182 |  |  | Market comparable companies |  | EBITDA multiples |  | 3.5 x - 10.8 x (4.4 x)
|  |  | 447,343 |  |  | Option Pricing Model |  | EBITDA/Revenue multiples |  | 1.2 x - 5.3 x (4.7 x)
|  |  |  |  |  |  | Implied volatility |  | 35.0% (35.0%)
|  |  |  |  |  |  | Term |  | 1.5 years - 1.8 years (1.5 years)
Other Corporate Debt |  |  | 59,756,438 |  |  | Market comparable companies |  | Book value multiples |  | 1.5 x (1.5 x)
|  |  | 5,016,018 |  |  | Income approach |  | Discount rate |  | 13.5% (13.5%)
Equity |  |  | 65,597,083 |  |  | Market comparable companies |  | Book value multiples |  | 0.8 x - 1.5 x (1.3 x)
|  |  | 53,598,606 |  |  | Option Pricing Model |  | EBITDA/Revenue multiples |  | 1.3 x - 13.8 x (10.7 x)
|  |  |  |  |  |  | Implied volatility |  | 40.0% - 75.0% (54.0%)
|  |  |  |  |  |  | Term |  | 0.3 years - 3.8 years (1.9 years)
|  |  | 15,738,508 |  |  | Market comparable companies |  | Revenue multiples |  | 0.4 x - 4.8 x (2.1 x)
|  |  | 15,227,668 |  |  | Market comparable companies |  | EBITDA multiples |  | 3.5 x - 12.0 x (11.3 x)
|  |  | 1,610,592 |  |  | Transaction approach (3) |  | N/A |  | N/A
|  | $ | 1,765,787,785 |  |  |  |  |  |  |
(1) Weighted by fair value. (2) Fair value was determined using an asset approach and is based on the remaining cash held, net of all liabilities. (3) Fair value was determined using the transaction price to acquire the position. There has been no change to the valuation based on the underlying assumptions used at the closing of such transaction. 2. Summary of Significant Accounting Policies — (continued) Changes in investments categorized as Level 3 during the three months ended June 30, 2024 were as follows:
|  | Independent Third-Party Valuation |
|  | Bank Debt |  |  | Other Corporate Debt |  |  | Equity Securities |  |  | Total |
Beginning balance |  | $ | 1,852,766,795 |  |  | $ | 71,542,109 |  |  | $ | 160,570,777 |  |  | $ | 2,084,879,681 |
Net realized and unrealized gains (losses) |  |  | (81,402,083 | ) |  |  | 59,452 |  |  |  | (5,743,051 | ) |  |  | (87,085,682 | )
Acquisitions (1) |  |  | 130,850,647 |  |  |  | 177,626 |  |  |  | 6,152,684 |  |  |  | 137,180,957 |
Dispositions |  |  | (179,133,867 | ) |  |  | (5,542,566 | ) |  |  | (23,607 | ) |  |  | (184,700,040 | )
Transfers into Level 3 (2) |  |  | 2,795,614 |  |  |  | — |  |  |  | — |  |  |  | 2,795,614 |
Ending balance |  | $ | 1,725,877,106 |  |  | $ | 66,236,621 |  |  | $ | 160,956,803 |  |  | $ | 1,953,070,530 |
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) |  | $ | (74,624,371 | ) |  | $ | 237,078 |  |  | $ | (5,344,064 | ) |  | $ | (79,731,357 | )
(1) Includes payments received in kind and accretion of original issue and market discounts. (2) Comprised of one investment that was transferred from Level 2 due to reduced number of market quotes.
|  | Valuation Designee Valuation |
|  | Bank Debt |  |  | Other Corporate Debt |  |  | Equity Securities |  |  | Total |
Beginning balance |  | $ | — |  |  | $ | — |  |  | $ | 877,248 |  |  | $ | 877,248 |
Ending balance |  | $ | — |  |  | $ | — |  |  | $ | 877,248 |  |  | $ | 877,248 |
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2. Summary of Significant Accounting Policies — (continued) Changes in investments categorized as Level 3 during the six months ended June 30, 2024 were as follows:
|  | Independent Third-Party Valuation |
|  | Bank Debt |  |  | Other Corporate Debt |  |  | Equity Securities |  |  | Total |
Beginning balance |  | $ | 1,289,587,391 |  |  | $ | 52,318,937 |  |  | $ | 164,340,278 |  |  | $ | 1,506,246,606 |
Net realized and unrealized gains (losses) |  |  | (74,411,433 | ) |  |  | 803,441 |  |  |  | (34,431,832 | ) |  |  | (108,039,824 | )
Acquisitions (1) |  |  | 685,719,758 |  |  |  | 18,114,243 |  |  |  | 33,834,839 |  |  |  | 737,668,840 |
Dispositions |  |  | (199,278,802 | ) |  |  | (5,000,000 | ) |  |  | (2,786,482 | ) |  |  | (207,065,284 | )
Transfers into Level 3 (2) |  |  | 27,512,314 |  |  |  | — |  |  |  | — |  |  |  | 27,512,314 |
Transfers out of Level 3 (3) |  |  | (3,252,122 | ) |  |  | — |  |  |  | — |  |  |  | (3,252,122 | )
Ending balance |  | $ | 1,725,877,106 |  |  | $ | 66,236,621 |  |  | $ | 160,956,803 |  |  | $ | 1,953,070,530 |
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) |  | $ | (76,155,049 | ) |  | $ | 803,441 |  |  | $ | (32,713,231 | ) |  | $ | (108,064,839 | )
____________________ (1) Includes payments received in kind and accretion of original issue and market discounts and Level 3 investments acquired in connection with the Merger. (2) Comprised of four investments that were transferred from Level 2 due to reduced number of market quotes. (3) Comprised of one investment that was transferred to Level 2 due to increased number of market quotes.
|  | Valuation Designee Valuation |
|  | Bank Debt |  |  | Other Corporate Debt |  |  | Equity Securities |  |  | Total |
Beginning balance |  | $ | — |  |  | $ | — |  |  | $ | 844,615 |  |  | $ | 844,615 |
Net realized and unrealized gains (losses) |  |  | — |  |  |  | — |  |  |  | 32,087 |  |  |  | 32,087 |
Acquisitions (1) |  |  | — |  |  |  | — |  |  |  | 546 |  |  |  | 546 |
Ending balance |  | $ | — |  |  | $ | — |  |  | $ | 877,248 |  |  | $ | 877,248 |
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) |  | $ | — |  |  | $ | — |  |  | $ | 32,087 |  |  | $ | 32,087 |
____________________ (1) Includes payments received in kind and accretion of original issue and market discounts and Level 3 investments acquired in connection with the Merger. 2. Summary of Significant Accounting Policies — (continued) Investment Transactions Investment transactions are recorded on the trade date, except for private transactions that have conditions to closing, which are recorded on the closing date. The cost of investments purchased is based upon the purchase price plus those professional fees which are specifically identifiable to the investment transaction. Realized gains and losses on investments are recorded based on the specific identification method, which typically allocates the highest cost inventory to the basis of investments sold. Cash and Cash Equivalents Cash consists of amounts held in accounts with the custodian bank. Cash equivalents consist of highly liquid investments with an original maturity of generally 60 days or less and may not be insured by the FDIC or may exceed federally insured limits. Cash equivalents are classified as Level 1 in the GAAP valuation hierarchy. At June 30, 2025, included in cash and cash equivalents was $20.2 million (2.7% of net assets) held in the JPMorgan U.S. Government Money Market Fund with a 7-day yield of 4.21% and $78.5 million (10.6% of net assets) held in the Allspring Government Money Market Fund with a 7- day yield of 4.20%. At December 31, 2024, included in cash and cash equivalents was $1.4 million (0.2% of net assets) held in the JPMorgan U.S. Treasury Plus Money Market Fund with a 7-day yield of 4.42% and $59.2 million (7.5% of net assets) held in the Allspring Government Money Market Fund with a 7- day yield of 4.36%. There was no restricted cash at June 30, 2025 and December 31, 2024. Restricted Investments The Company may invest without limitation in instruments that are subject to legal or contractual restrictions on resale. These instruments generally may be resold to institutional investors in transactions exempt from registration or to the public if the securities are registered. Disposal of these investments may involve time-consuming negotiations and additional expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted investments is included at the end of the Consolidated Schedule of Investments. Restricted investments, including any restricted investments in affiliates, are valued in accordance with the investment valuation policies discussed above. Foreign Currency Investments The Company may invest in instruments traded in foreign countries and denominated in foreign currencies. Foreign currency denominated investments comprised approximately 0.0% and 0.4% of total investments at June 30, 2025 and December 31, 2024, respectively. Such positions were converted at the respective closing foreign exchange rates in effect at June 30, 2025 and December 31, 2024 and reported in U.S. dollars. Purchases and sales of investments and income and expense items denominated in foreign currencies, when they occur, are translated into U.S. dollars based on the foreign exchange rates in effect on the respective dates of such transactions. The portion of gains and losses on foreign investments resulting from fluctuations in foreign currencies is included in net realized and unrealized gain or loss from investments. Investments in foreign companies and securities of foreign governments may involve special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include, among other things, revaluation of currencies, less reliable information about issuers, different transaction clearance and settlement practices, and potential future adverse political and economic developments. Moreover, investments in foreign companies and securities of foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies and the U.S. government. Derivatives In order to mitigate certain currency exchange and interest rate risks, the Company may enter into certain derivative transactions. All derivatives are subject to a master netting agreement and are reported at their gross amounts as either assets or liabilities in the Consolidated Statements of Assets and Liabilities. Transactions entered into are accounted for using the mark-to-market method with the resulting change in fair value recognized in earnings for the current period. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in interest rates and the value of foreign currencies relative to the U.S. dollar. Certain derivatives may also require the Company to pledge assets as collateral to secure its obligations. 2. Summary of Significant Accounting Policies — (continued) Valuations of derivatives are determined using observable market inputs other than quoted prices in active markets for identical assets and, accordingly, are generally classified as Level 2 in the GAAP valuation hierarchy. Merger Sub entered into a centrally-cleared interest rate swap (the “Interest Rate Swap”) to economically hedge the interest payable on the fixed rate tranche of Merger Sub’s 2025 Notes (as defined below) (see Note 4). The notional amount of the Interest Rate Swap is $35.0 million. Under the swap agreement, Merger Sub received a fixed interest rate of 2.633% and paid a floating interest rate of SOFR with payments due annually. The Interest Rate Swap matured on June 9, 2025. Pursuant to the contract, Merger Sub was required to deposit initial margin with the broker in the form of cash and has agreed to receive from or pay to the broker daily variation margin. The amounts related to the right to claim or the obligation to return cash collateral may not be used to offset amounts due under the Interest Rate Swap contract in the normal course of settlement. Both the initial margin and variation margin paid were included as assets within Due from broker on the Consolidated Statement of Assets and Liabilities prior to its maturity on June 9, 2025. Since the swap contract has not been designated as a hedge accounting relationship pursuant to ASC 815, Derivatives and Hedging, changes in the fair value of the swap contract, net of any periodic interest accruals, were presented as part of change in unrealized appreciation (depreciation) on the Consolidated Statement of Operations. Interest rate swap agreements are valued utilizing quotes received from independent pricing services or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. The fair value of the Interest Rate Swap is classified as Level 2 with respect to the fair value hierarchy. During the six months ended June 30, 2025 and 2024, the Company did not enter into any additional derivative transactions. Valuations of derivatives are determined using observable market inputs other than quoted prices in active markets for identical assets and, accordingly, are generally classified as Level 2 in the GAAP valuation hierarchy. Deferred Debt Issuance Costs Certain costs incurred in connection with the issuance and/or extension of debt of the Company and its subsidiaries were capitalized and are being amortized on a straight-line basis over the estimated life of the respective instruments. The impact of utilizing the straight-line amortization method versus the effective-interest method is not material to the operations of the Company. Revenue Recognition Interest and dividend income, including income paid in kind, is recorded on an accrual basis, when such amounts are considered collectible. Origination, structuring, closing, commitment and other upfront fees, including original issue discounts, earned with respect to capital commitments are generally amortized or accreted into interest income over the life of the respective debt investment, as are end-of-term or exit fees receivable upon repayment of a debt investment. Other fees, including certain amendment fees, prepayment fees and commitment fees on broken deals, are recognized as earned. Prepayment fees and similar income due upon the early repayment of a loan or debt security are recognized when earned and are included in interest income. Certain debt investments are purchased at a discount to par as a result of the underlying credit risks and financial results of the issuer, as well as general market factors that influence the financial markets as a whole. Discounts on the acquisition of corporate bonds are generally amortized using the effective-interest or constant-yield method assuming there are no questions as to collectability. When principal payments on a loan are received in an amount in excess of the loan’s amortized cost, the excess principal payments are recorded as interest income. Debt investments are generally placed on non-accrual status when it is probable that principal or interest will not be collected according to the contractual terms. When a debt investment is placed on non-accrual status, accrued and unpaid interest (including any accrued PIK interest) is generally reversed, and discount accretion or premium amortization is discontinued. The Company does not reverse previously capitalized PIK income. Payments received on non-accrual investments may either be recognized as income or 2. Summary of Significant Accounting Policies — (continued) applied to principal depending upon the Company’s judgment regarding collectability of the outstanding principal and interest. Non-accrual investments are restored to accrual status if past due principal and interest are paid or, in the Company’s judgment, the repayment of the remaining contractual principal and interest is expected. The Company may opt not to place a distressed debt investment on non-accrual status if principal and interest are secured through sufficient collateral value and are in the process of collection through legal actions or other efforts that are expected to result in repayment of principal and interest. 36th Street Capital Partners, LLC In accordance with Rules 3-09 and 4-08(g) of Regulation S-X (“Rule 3-09” and “Rule 4-08(g),” respectively), the Company must determine which of its unconsolidated controlled portfolio companies are considered “significant subsidiaries,” if any. In evaluating these investments, Rule 1-02(w)(2) of Regulation S-X stipulates two tests to be utilized by a business development company to determine if any of its controlled investments are considered significant subsidiaries for financial reporting purposes: the investment test and the income test. Rule 3-09 requires separate audited financial statements of an unconsolidated majority owned subsidiary in an annual report if any of the tests exceed the thresholds noted in Rule 1-02(w)(2), whereas Rule 4-08(g) only requires summarized financial information in an annual/quarterly report if the thresholds are exceeded. Our investment in 36th Street Capital Partners Holdings, LLC as of December 31, 2024 exceeded the threshold in at least one of the tests for both Rule 3-09 and Rule 4-08(g). Accordingly, we included the audited financial statements of 36th Street Capital Partners Holdings, LLC as an exhibit to our annual report on Form 10-K for the year ended December 31, 2024. Income Taxes The Company intends to comply with the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), applicable to RICs, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required. The income or loss of SVCP (including effective from the Closing, the consolidated income or loss of Merger Sub), TCPC Funding, TCPC Funding II and the SBIC is reported in the respective members' or partners’ income tax returns, as applicable. In accordance with ASC Topic 740 - Income Taxes, the Company recognizes in its consolidated financial statements the effect of a tax position when it is determined that such position is more likely than not, based on the technical merits, to be sustained upon examination. The tax returns of the Company, SVCP, TCPC Funding, TCPC Funding II and the SBIC remain open for examination by tax authorities for a period of three years from the date they are filed. No such examinations are currently pending. Management has analyzed tax laws and regulations and their application to the Company as of June 30, 2025, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the consolidated financial statements. The final tax characterization of distributions is determined after the fiscal year and is reported on Form 1099 and in the Company’s annual report to shareholders. Distributions can be characterized as ordinary income, capital gains and/or return of capital. As of December 31, 2024, the Company had non-expiring capital loss carryforwards in the amount of $636,962,720 available to offset future realized capital gains. As of December 31, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
|  | December 31, 2024 |
Tax Cost |  | $ | 2,120,958,894 |
Gross Unrealized Appreciation |  | $ | 165,148,618 |
Gross Unrealized Depreciation |  |  | (489,385,214 | )
Net Unrealized Appreciation (Depreciation) |  | $ | (324,236,596 | )
On March 18, 2024, the Company completed its previously announced Merger with BCIC. Pursuant to the Merger Agreement, BCIC was merged with and into Merger Sub, with Merger Sub continuing as the surviving company and as a subsidiary of SVCP. The Merger was considered a tax-free reorganization and the Company has elected to carry forward the historical cost basis of the acquired BCIC investments for tax purposes. As a result of the Merger, BCIC’s separate existence ceased. 2. Summary of Significant Accounting Policies — (continued) Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board (the “FASB”). ASUs not listed were assessed by the Company and either determined to be not applicable or expected to have minimal impact on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023- 07”), which enhances disclosure requirements about significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”). ASU 2023-07, among other things, (i) requires a single segment public entity to provide all of the disclosures as required by ASC 280, (ii) requires a public entity to disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources and (iii) provides the ability for a public entity to elect more than one performance measure. ASU 2023-07 is effective for the fiscal years beginning after December 15, 2023, and interim periods beginning with the first quarter ended March 31, 2025. Early adoption is permitted and retrospective adoption is required for all prior periods presented. The Company has adopted ASU 2023-07 effective December 31, 2024 and concluded that the application of this guidance did not have any material impact on its consolidated financial statements. See Note 13 for more information on the adoption of ASU 2023-07. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and permits early adoption. The Company plans to adopt the ASU for the annual reporting period beginning on January 1, 2025 and does not expect a material impact on its consolidated financial statements.

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