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Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

Note 5. Fair Value of Financial Instruments

Investments

The following table presents fair value measurements of investments as of September 30, 2025 (in thousands):

 

Fair Value Hierarchy

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Senior Secured First Lien

$

—

 

 

$

—

 

 

$

352,812

 

 

$

352,812

 

Unitranche First Lien

 

—

 

 

 

5,769

 

 

 

1,034,035

 

 

 

1,039,804

 

Unitranche First Lien – Last Out

 

—

 

 

 

—

 

 

 

26,170

 

 

 

26,170

 

Senior Secured Second Lien

 

—

 

 

 

—

 

 

 

18,647

 

 

 

18,647

 

Unsecured Debt

 

—

 

 

 

—

 

 

 

19,531

 

 

 

19,531

 

Equity & Other

 

—

 

 

 

668

 

 

 

84,066

 

 

 

84,734

 

Subtotal

$

—

 

 

$

6,437

 

 

$

1,535,261

 

 

$

1,541,698

 

Investments Measured at NAV (1)

 

 

 

 

 

 

 

 

 

 

38,980

 

Total Investments

 

 

 

 

 

 

 

 

 

$

1,580,678

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Currency Forward Contracts - Assets

 

—

 

 

 

2,082

 

 

 

—

 

 

 

2,082

 

Foreign Currency Forward Contracts - Liabilities

 

—

 

 

 

2,271

 

 

 

—

 

 

 

2,271

 

 

The following table presents fair value measurements of investments as of December 31, 2024 (in thousands):

 

Fair Value Hierarchy

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Senior Secured First Lien

$

—

 

 

$

—

 

 

$

379,628

 

 

$

379,628

 

Unitranche First Lien

 

—

 

 

 

30,206

 

 

 

1,013,934

 

 

 

1,044,140

 

Unitranche First Lien – Last Out

 

—

 

 

 

—

 

 

 

14,741

 

 

 

14,741

 

Senior Secured Second Lien

 

—

 

 

 

14,186

 

 

 

24,351

 

 

 

38,537

 

Unsecured Debt

 

—

 

 

 

—

 

 

 

17,525

 

 

 

17,525

 

Equity & Other

 

—

 

 

 

1,125

 

 

 

63,735

 

 

 

64,860

 

Subtotal

$

—

 

 

$

45,517

 

 

$

1,513,914

 

 

$

1,559,431

 

Investments Measured at NAV (1)

 

 

 

 

 

 

 

 

 

 

39,426

 

Total Investments

 

 

 

 

 

 

 

 

 

$

1,598,857

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Currency Forward Contracts - Assets

 

—

 

 

 

4,815

 

 

 

—

 

 

 

4,815

 

Foreign Currency Forward Contracts - Liabilities

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

(1)
In accordance with ASC 820-10, certain investments that are measured using the net asset value per shares (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 nine months ended September 30, 2025, based off of the fair value hierarchy as of September 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

 

1,237

 

 

 

3,733

 

 

 

53

 

 

 

75

 

 

 

157

 

 

 

—

 

 

 

5,255

 

Paid in-kind interest

 

1,622

 

 

 

3,681

 

 

 

681

 

 

 

352

 

 

 

1,862

 

 

 

—

 

 

 

8,198

 

Net realized gain (loss)

 

(8,214

)

 

 

(3,604

)

 

 

—

 

 

 

(693

)

 

 

—

 

 

 

(1,345

)

 

 

(13,856

)

Net change in unrealized appreciation (depreciation)

 

2,835

 

 

 

(10,003

)

 

 

921

 

 

 

1,779

 

 

 

(13

)

 

 

4,922

 

 

 

441

 

Purchases

 

60,334

 

 

 

149,225

 

 

 

9,774

 

 

 

—

 

 

 

—

 

 

 

16,754

 

 

 

236,087

 

Sales/return of capital/principal repayments/paydowns

 

(84,630

)

 

 

(147,462

)

 

 

—

 

 

 

(7,217

)

 

 

—

 

 

 

—

 

 

 

(239,309

)

Transfers in

 

—

 

 

 

24,531

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

24,531

 

Transfers out

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

-

 

Balance as of September 30, 2025

$

352,812

 

 

$

1,034,035

 

 

$

26,170

 

 

$

18,647

 

 

$

19,531

 

 

$

84,066

 

 

$

1,535,261

 

Net change in unrealized appreciation (depreciation) from investments still held as of September 30, 2025

$

(3,683

)

 

$

(8,959

)

 

$

921

 

 

$

1,497

 

 

$

(13

)

 

$

4,469

 

 

$

(5,768

)

 

During the nine months ended September 30, 2025, the Company recorded no transfers from Level 3 to Level 2 and $24,531 in 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 nine months ended September 30, 2024, based off of the fair value hierarchy as of September 30, 2024 (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, 2024

$

409,945

 

 

$

948,781

 

 

$

13,544

 

 

$

44,907

 

 

$

4,061

 

 

$

48,909

 

 

$

1,470,147

 

Amortized discounts/premiums

 

1,588

 

 

 

4,839

 

 

 

93

 

 

 

237

 

 

 

17

 

 

 

—

 

 

 

6,774

 

Paid in-kind interest

 

2,326

 

 

 

2,201

 

 

 

617

 

 

 

1,571

 

 

 

1,314

 

 

 

—

 

 

 

8,029

 

Net realized gain (loss)

 

(969

)

 

 

(232

)

 

 

(2,308

)

 

 

—

 

 

 

—

 

 

 

(546

)

 

 

(4,055

)

Net change in unrealized appreciation (depreciation)

 

(6,373

)

 

 

3,929

 

 

 

2,269

 

 

 

(2,891

)

 

 

1,390

 

 

 

5,226

 

 

 

3,550

 

Purchases

 

84,077

 

 

 

194,932

 

 

 

—

 

 

 

5,000

 

 

 

11,904

 

 

 

5,778

 

 

 

301,691

 

Sales/return of capital/principal repayments/paydowns

 

(91,472

)

 

 

(155,817

)

 

 

(8,369

)

 

 

(18,068

)

 

 

—

 

 

 

(1,073

)

 

 

(274,799

)

Transfers in

 

2,546

 

 

 

19,186

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

120

 

 

 

21,852

 

Transfers out

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,330

)

 

 

—

 

 

 

—

 

 

 

(3,330

)

Balance as of September 30, 2024

$

401,668

 

 

$

1,017,819

 

 

$

5,846

 

 

$

27,426

 

 

$

18,686

 

 

$

58,414

 

 

$

1,529,859

 

Net change in unrealized appreciation (depreciation) from investments still held as of September 30, 2024

$

(6,373

)

 

$

3,929

 

 

$

2,269

 

 

$

(2,891

)

 

$

1,390

 

 

$

5,226

 

 

$

3,550

 

 

During the nine months ended September 30, 2024, the Company recorded $3,330 in transfers from Level 3 to Level 2 due to an increase in observable inputs in market data and $21,852 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 September 30, 2025 and December 31, 2024. 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
September 30, 2025
(in thousands)

 

 

Valuation Technique

 

Unobservable Input

 

Range (Weighted Avg)

Senior Secured First Lien

 

$

307,454

 

 

Discounted Cash Flows

 

Discount Rate

 

6.1%

 

-

17.6%

(10.0%)

 

 

29,406

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

2.9x

 

-

12.4x

(9.4x)

 

 

10,939

 

 

Transaction Precedent

 

Transaction Price

 

 

 

 

N/A

 

 

 

5,013

 

 

Broker Quoted

 

Broker Quote

 

 

 

 

N/A

 

 

$

352,812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitranche First Lien

 

$

896,351

 

 

Discounted Cash Flows

 

Discount Rate

 

7.6%

 

-

19.7%

(9.9%)

 

 

40,041

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

7.0

x

-

13.7x

(9.7x)

 

 

37,863

 

 

Transactions Precedent

 

Transaction Price

 

 

 

 

N/A

 

 

 

59,780

 

 

Broker Quoted

 

Broker Quote

 

 

 

 

N/A

 

 

$

1,034,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitranche First Lien - Last Out

 

$

18,670

 

 

Discounted Cash Flows

 

Discount Rate

 

7.5%

 

-

16.8%

(11.5%)

 

 

 

7,500

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

 

7.8x

 

 

$

26,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Second Lien

 

$

15,010

 

 

Discounted Cash Flows

 

Discount Rate

 

10.9%

 

-

12.8%

(11.9%)

 

 

3,637

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

 

3.4x

 

 

$

18,647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Debt

 

$

17,505

 

 

Discounted Cash Flows

 

Discount Rate

 

11.0%

 

-

15.5%

(13.7%)

 

 

2,026

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

 

12.4x

 

 

$

19,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity & Other

 

$

82,719

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

2.9x

 

-

28.0x

(14.5x)

 

 

1,272

 

 

Transaction Precedent

 

Transaction Price

 

 

 

 

N/A

 

 

 

 

75

 

 

Broker Quoted

 

Broker Quote

 

 

 

 

N/A

 

 

$

84,066

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,535,261

 

 

 

 

 

 

 

 

 

 

 

 

Security Type

 

Fair Value as of
December 31, 2024
(in thousands)

 

 

Valuation Technique

 

Unobservable Input

 

Range (Weighted Avg)

Senior Secured First Lien

 

$

324,549

 

 

Discounted Cash Flows

 

Discount Rate

 

8.0%

 

-

18.3%

 

(10.8%)

 

 

27,840

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

3.1

x

-

 

10.6

x

(8.1x)

 

 

2,779

 

 

Discounted Cash Flows

 

Royalty Payment Discount Rate

 

 

 

 

22.4%

 

 

 

 

24,460

 

 

Broker Quoted

 

Broker Quote

 

 

 

 

N/A

 

 

 

$

379,628

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitranche First Lien

 

$

988,714

 

 

Discounted Cash Flows

 

Discount Rate

 

8.9%

 

-

18.3%

 

(10.7%)

 

 

12,556

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

 

 

10.9

x

 

 

 

12,664

 

 

Broker Quoted

 

Broker Quote

 

 

 

 

N/A

 

 

 

$

1,013,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitranche First Lien - Last Out

 

$

14,741

 

 

Discounted Cash Flows

 

Discount Rate

 

11.2%

 

-

16.0%

 

(12.8%)

 

$

14,741

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Second Lien

 

$

15,802

 

 

Discounted Cash Flows

 

Discount Rate

 

12.4%

 

-

14.1%

 

(12.9%)

 

 

3,549

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

1.4x

 

-

 

10.1

x

(5.1x)

 

 

5,000

 

 

Broker Quoted

 

Broker Quote

 

 

 

 

N/A

 

 

 

$

24,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Debt

 

$

15,706

 

 

Discounted Cash Flows

 

Discount Rate

 

13.3%

 

-

17.2%

 

(14.2%)

 

 

1,819

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

 

 

10.6

x

 

 

$

17,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity & Other

 

$

63,735

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

3.1x

 

-

27.4x

 

(15.3x)

 

$

63,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,513,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 is the discount rate 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.
•
The recovery rate represents the extent to which proceeds can be recovered. An increase/decrease in the recovery rate would result in an increase/decrease, respectively, in the fair value. The transaction precedent represents an observable transaction or a pending event for the investment.