XML 27 R21.htm IDEA: XBRL DOCUMENT v3.25.3
Derivatives
 9 Months Ended
Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives

Note 7. Derivatives

The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies.

In order to better define its contractual rights and to secure rights that will help mitigate its counterparty risk, the Company may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or a similar

agreement with its derivative counterparties. An ISDA Master Agreement is a bilateral agreement between the Company and a counterparty that governs OTC derivatives, including foreign currency forward contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Company and cash collateral received from the counterparty, if any, is included under restricted cash and cash equivalents on the Consolidated Statement of Assets and Liabilities. There has been no cash collateral received or paid from the counterparty. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that they believe to be of good standing and by monitoring the financial stability of those counterparties. All of the forward contracts qualify as Level 2 financial instruments.

During the nine months ended September 30, 2025 and 2024 the Company’s average USD notional exposure, calculated daily on a weighted average basis on the duration of each forward contract, of foreign currency forward contracts was $74,149 and $77,529, respectively.

The following table sets forth the Company’s net exposure to foreign currency forward contracts that are subject to ISDA Master Agreements or similar agreements (in thousands):

 

Reporting Date

 

Counterparty

 

Gross Amount
of Assets on
the Consolidated
Statements of
Assets and
Liabilities

 

 

Gross Amount
of (Liabilities) on
the Consolidated
Statements of
Assets and
Liabilities

 

 

Net Amount of Assets
or (Liabilities)

 

 

Collateral
(Received)
Pledged (1)

 

 

Net
Amounts (2)

 

September 30, 2025

 

Wells Fargo Bank, N.A.

 

$

2,082

 

 

$

(2,271

)

 

$

(189

)

 

$

1,140

 

 

$

951

 

December 31, 2024

 

Wells Fargo Bank, N.A.

 

$

4,815

 

 

$

—

 

 

$

4,815

 

 

$

—

 

 

$

4,815

 

 

(1)
Amount excludes excess cash collateral paid.
(2)
Net amount represents the net amount due (to) from counterparty in the event of a default based on the contractual setoff rights under the agreement. Net amount excludes any over-collateralized amounts.

The effect of transactions in derivative instruments to the Consolidated Statements of Operations was as follows (in thousands):

 

 

 

For the three months ended September 30,

 

 

For the nine months ended September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) on foreign currency forward
   contracts

 

$

-

 

 

$

—

 

 

$

-

 

 

$

3,223

 

 

Net change in unrealized appreciation (depreciation) on
   foreign currency forward contracts

 

 

972

 

 

 

(1,405

)

 

 

(5,005

)

 

 

(3,725

)

 

Total net realized and unrealized gains (losses) on
   foreign currency forward contracts

 

$

972

 

 

$

(1,405

)

 

$

(5,005

)

 

$

(502

)