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Borrowings | 3 Months Ended
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Mar. 31, 2025
Debt Disclosure [Abstract] |
Borrowings | Note 5. Borrowings On August 23, 2021, the Company, through SPV LLC entered into a five-year, $115 million senior secured revolving credit facility (the “Capital One Revolving Financing”) with Capital One, which is secured by collateral consisting primarily of loans in the Company’s investment portfolio. On June 14, 2023, we amended the Capital One Revolving Financing to decrease the facility size from $115 million to $100 million. On January 17, 2024, we amended the Capital One Revolving Financing to (i) extend the maturity date to January 17, 2029, (ii) increase of the applicable interest spreads under the Capital One Revolving Financing and (iii) extend the Scheduled Revolving Period End Date (as defined in Capital One Revolving Financing) to January 17, 2027. The Capital One Revolving Financing, which will expire on January 17, 2029 (the “Maturity Date”), features a three-year reinvestment period and a two-year amortization period. Effective January 17, 2024, borrowings under the Capital One Revolving Financing generally bear interest at a rate per annum equal to the Secured Overnight Financing Rate (“SOFR”) plus 3.10%. The default interest rate will be equal to the interest rate then in effect plus 2.00%. The Capital One Revolving Financing required the payment of an upfront fee of 1.125% ($1.3 million) of the available borrowings under the Capital One Revolving Financing at the closing, and requires the payment of an unused fee of (i) 0.75% annually for any undrawn amounts below 50% of the Capital One Revolving Financing, (ii) 0.50% annually for any undrawn amounts between 50% and 75% of the Capital One Revolving Financing, and (iii) 0.25% annually for any undrawn amounts above 75% of the Capital One Revolving Financing. Borrowings under the Capital One Revolving Financing are based on a borrowing base. The Capital One Revolving Financing generally requires payment of interest and fees on a quarterly basis. All outstanding principal is due on the Maturity Date. The Capital One Revolving Financing also requires mandatory prepayment of interest and principal upon certain events. On November 19, 2024, we amended the Capital One Revolving Financing to provide for, among other things, a decrease of the applicable interest spreads under the Capital One Revolving Financing from SOFR plus 3.10% to SOFR plus 2.50%, and to make amendments to the concentration limits and other fees, and certain other amendments. As of March 31, 2025 and December 31, 2024, there were $56.0 million and $58.5 million in borrowings outstanding under the Capital One Revolving Financing, respectively. Restricted cash (as shown on the Unaudited Consolidated Statements of Assets and Liabilities) is held by the trustee of the Capital One Revolving Financing and is restricted to purchases of investments by SPV LLC that must meet certain eligibility criteria identified by the loan, security and investment management agreement governing the Capital One Revolving Financing. As of March 31, 2025, SPV LLC had a notional amount of $162.1 million, which included $150.5 million of the Company’s portfolio investments at fair value, $1.0 million in accrued interest receivable and $10.7 million in cash held by the trustees of the Capital One Revolving Financing. As of December 31, 2024, SPV had a notional amount of $167.7 million, which included $154.7 million of the Company's portfolio investments at fair value, $1.6 million in accrued interest receivable and $11.3 million in cash held by the trustees of the Capital One Revolving Financing. For the three months ended March 31, 2025, the weighted average outstanding debt balance and the weighted average stated interest rate under the Capital One Revolving Financing was $56.9 million and 6.93%, respectively. For the three months ended March 31, 2024, the weighted average outstanding debt balance and the weighted average stated interest rate under the Capital One Revolving Financing was $63.6 million and 8.34%, respectively. The fair value of the Company’s borrowings is estimated based on the rate at which similar credit facilities or debentures would be priced. At March 31, 2025 and December 31, 2024, the fair value of the Company’s total borrowings under the Capital One Revolving Financing, was estimated at $56.0 million and $58.5 million respectively, which the Company concluded was a Level 3 fair value. As of March 31, 2025, the carrying amount of the Capital One Revolving Financing was approximately $55.0 million, aggregate principal balance of $56.0 million net of deferred debt issuance costs of approximately $1.0 million. On March 31, 2021, the Company closed the public offering of $65 million in aggregate principal amount of 4.875% notes due 2026 (the “2026 Notes”). The total net proceeds to the Company from the sale of the 2026 Notes, after deducting the underwriting discounts and commissions of approximately $1.3 million and estimated offering expenses of approximately $215,000, were approximately $63.1 million. The 2026 Notes will mature on April 1, 2026, unless previously redeemed or repurchased in accordance with their terms, and bear interest at a rate of 4.875%. The 2026 Notes are direct unsecured obligations and rank pari passu, which means equal in right of payment, with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company. Because the 2026 Notes are not secured by any of the Company’s assets, they are effectively subordinated to all of the Company’s existing and future secured unsubordinated indebtedness (or any indebtedness that is initially unsecured as to which the Company subsequently grants a security interest), to the extent of the value of the assets securing such indebtedness. The 2026 Notes are structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries and financing vehicles, including, without limitation, borrowings under the Capital One Revolving Financing. The 2026 Notes are obligations exclusively of the Company and not of any of the Company’s subsidiaries. None of the Company’s subsidiaries is a guarantor of the 2026 Notes and the 2026 Notes will not be required to be guaranteed by any subsidiary the Company may acquire or create in the future. The 2026 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price (as determined by the Company) equal to the greater of the following amounts, plus, in each case, accrued and unpaid interest to, but excluding, the redemption date: (1) 100% of the principal amount of the 2026 Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to the date of redemption) on the 2026 Notes to be redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate plus 50 basis points; provided, however, that if the Company redeems any 2026 Notes on or after January 1, 2026 (the date falling three months prior to the maturity date of the 2026 Notes), the redemption price for the 2026 Notes will be equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption; provided, further, that no such partial redemption shall reduce the portion of the principal amount of a 2026 Note not redeemed to less than $2,000. Interest on the 2026 Notes is payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2021. The Company may from time to time repurchase 2026 Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of March 31, 2025, the carrying amount of the 2026 Notes was approximately $64.7 million, aggregate principal balance of $65.0 million n et of deferred debt issuance costs of $260,000 and unamortized discount of $71,110, at a current yield of 5.05%. As of December 31, 2024, the carrying amount of the 2026 Notes was $64.6 million, aggregate principal balance of $65.0 million net with deferred debt issuance costs of $325,000 and unamortized discount of $88,888, at a current yield of 5.02%. As of March 31, 2025 and December 31, 2024, the fair value of the 2026 Notes was $62.8 million and $63.2 million, respectively. The Company concluded that this was Level 3 fair value under ASC 820. For the three months ended March 31, 2025, the weighted average outstanding debt balance and the weighted average stated interest rate for overall debt outstanding, in aggregate was $121.9 million and 5.90%, respectively. For the three months ended March 31, 2024, the weighted average outstanding debt balance and the weighted average stated interest rate for overall debt outstanding, in aggregate was $128.6 million and 6.61%, respectively. Long-Term Debt Maturities Set forth below is the aggregate principal amount of our long-term debt as of March 31, 2025 and December 31, 2024 (excluding unamortized premiums, net, unamortized debt issuance costs and note payable) maturing during the following years:
|  | March 31, 2025 |  | December 31, 2024
2024 |  | $— |  | $—
2025 |  | — |  | —
2026 and beyond |  | 121,000,000 |  | 123,500,000
Total long-term debt |  | $121,000,000 |  | $123,500,000

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