# Nuveen Churchill Direct Lending Corp.: Form 10-Q for the period ended Jun 30, 2024

- Company: [Nuveen Churchill Direct Lending Corp.](/companies/ncdl.md) (CIK 1737924)
- Form: 10-Q
- Filed: 2024-08-07
- Accepted by EDGAR: Aug 6, 2024, 20:30 ET
- Period: 2024-06-30
- Accession: 0001628280-24-035331
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1737924/000162828024035331/ncdlc-20240630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1737924/000162828024035331/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | $20.2m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | $50.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | $0.57 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | $1.13 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | $0.57 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | $1.13 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 54,789,044 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 53,773,698 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | −$266.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 6 months, 2024-01-01 to 2024-06-30 | $40.8m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 6 months, 2024-01-01 to 2024-06-30 | $5.1m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-06-30 | $71.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2024-06-30 | $2.08bn | us-gaap:Assets |
| Total liabilities | at 2024-06-30 | $1.10bn | us-gaap:Liabilities |
| Long-term debt | at 2024-06-30 | $1.03bn | us-gaap:LongTermDebt |
| Shareholders' equity | at 2024-06-30 | $986.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 96,320 characters.

*The discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. The information in this section contains forward-looking statements, which relate to future events, or the future performance or financial condition of Nuveen Churchill Direct Lending Corp., including its wholly owned subsidiaries (collectively, "we", "us", "our", or the "Company"), and involves numerous risks and uncertainties, including, but not limited to, those set forth in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 and Part II, Item 1A of and elsewhere in this Quarterly Report on Form 10-Q. This discussion also should be read in conjunction with the “Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Actual results could differ materially from those implied or expressed in any forward-looking statements.*

### Overview

We were formed on March 13, 2018 as a Delaware limited liability company and converted into a Maryland corporation on June 18, 2019, prior to the commencement of operations. We are a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, we have elected, and intend to qualify annually thereafter, to be treated for U.S. federal income tax purposes as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

Our investment objective is to generate attractive risk-adjusted returns primarily through current income by investing primarily in senior secured loans to private equity-owned U.S. middle market companies, which we define as companies with approximately $10 million to $250 million of annual earnings before interest, taxes, depreciation and amortization (“EBITDA”). We primarily focus on investing in U.S. middle market companies, with $10 million to $100 million in EBITDA, which we consider the core middle market. Our portfolio is comprised primarily of first-lien senior secured debt and unitranche loans. Although it is not our primary strategy, we also opportunistically invest in junior capital opportunities, including second-lien loans, subordinated debt, and equity co-investments and similar equity-related securities.

We have entered into an investment advisory agreement (as amended and restated, the “Advisory Agreement”) with Churchill DLC Advisor LLC (f/k/a Nuveen Churchill Advisors LLC) (the “Adviser”), under which the Adviser has delegated substantially all of its day-to-day portfolio management obligations through a sub-advisory agreement (as amended and restated, the “CAM Sub-Advisory Agreement”) to Churchill Asset Management LLC (“Churchill”). In addition, the Adviser and Churchill have engaged Nuveen Asset Management, LLC (“Nuveen Asset Management” and together with the Adviser and Churchill, the "Advisers") pursuant to a sub-advisory agreement (the "NAM Sub-Advisory Agreement"), pursuant to which Nuveen Asset Management may manage a portion of our portfolio consisting of cash and cash equivalents, liquid fixed-income securities (including broadly syndicated loans) and other liquid credit instruments, subject to the pace and amount of investment activity in the middle market investment program. Under the administration agreement (the “Administration Agreement”), we are provided with certain services by an administrator, Churchill BDC Administration LLC (f/k/a Nuveen Churchill Administration LLC) (the “Administrator”). The Adviser, Churchill, Nuveen Asset Management and Administrator are all affiliates and subsidiaries of Nuveen, LLC (“Nuveen”), a wholly owned subsidiary of Teachers Insurance and Annuity Association of America (“TIAA”).

Churchill NCDLC CLO-I, LLC (“CLO-I”), Churchill NCDLC CLO-II, LLC (“CLO-II”), Churchill NCDLC CLO-III, LLC (“CLO-III”), Nuveen Churchill BDC SPV IV, LLC (“SPV IV”), Nuveen Churchill BDC SPV V, LLC (“SPV V”) and NCDL Equity Holdings LLC ("NCDL Equity Holdings") are wholly owned subsidiaries of the Company and are consolidated in these financial statements commencing from the date of their formation. CLO-I, CLO-II and CLO-III completed term debt securitizations in May 2022, December 2023 and March 2024, respectively. SPV IV and SPV V primarily invest in first-lien senior secured debt and unitranche loans. NCDL Equity Holdings was formed to hold certain equity-related securities.

Beginning with our initial closing in March 2020, we conducted private offerings ("Private Offerings") of our shares of common stock to accredited investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). We held our final closing on April 28, 2023.

On January 29, 2024, we closed our initial public offering (“IPO”) and our common stock began trading on the New York Stock Exchange (“NYSE”) under the symbol “NCDL” on January 25, 2024.

### Key Components of Our Results of Operations

### Investments

Our level of investment activity varies substantially from period to period depending on many factors, including the amount we have available to invest as well as the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity in the middle market, the general economic environment and the competitive environment for the types of investments we make.

To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. To the extent we continue to qualify as a RIC, we generally will not be subject to U.S federal income tax on any income we timely distribute to our shareholders.

As a BDC, we are required to comply with certain regulatory requirements. For instance, we are generally required to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less.

As a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the 1940 Act, the term “eligible portfolio company” includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250.0 million. In addition, we must be organized in the United States to qualify as a BDC.

### Revenues

We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we may generate income from dividends on direct equity investments, and capital gains on the sales of loans or debt and equity securities. Our debt investments generally bear interest at a floating rate usually determined on the basis of a benchmark, such as the Secured Overnight Financing Rate (“SOFR”). Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we may receive repayments of some of our debt investments prior to their scheduled maturity dates. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also may reflect the proceeds of sales of securities. In addition, we may generate revenue in the form of commitment, origination, structuring, diligence, consulting or prepayment fees associated with our investment activities as well as any fees for managerial assistance services rendered by us to portfolio companies and other investment related income.

### Expenses

The Adviser, Churchill, Nuveen Asset Management and their respective affiliates are responsible for bearing the compensation and routine overhead expenses allocable to personnel providing investment advisory and management services to us. We bear all other out-of-pocket costs and expenses of its operations and transactions, including those costs and expenses incidental to the provision of investment advisory and management services to us (such as items in the third and fourth bullets listed below).

- our organizational costs;
- calculating net asset value (including the cost and expenses of any independent valuation firm);
- expenses, including travel, entertainment, lodging and meal expenses, incurred by the Advisers, or members of their investment teams or payable to third parties, in evaluating, developing, negotiating, structuring and performing due diligence on prospective portfolio companies, including such expenses related to potential investments that were not consummated, and, if necessary, enforcing our rights;
- fees and expenses incurred by the Advisers (and their affiliates) or the Administrator (or its affiliates) payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in conducting research and due diligence on prospective investments and equity sponsors, analyzing investment opportunities, structuring our investments and monitoring investments and portfolio companies on an ongoing basis;
- costs and expenses incurred in connection with the incurrence of leverage and indebtedness, including borrowings, credit facilities, securitizations, margin financing, and including any principal or interest on our borrowings and indebtedness;
- offerings, sales, and repurchases of our shares and other securities;
- fees and expenses payable under any underwriting, dealer manager or placement agent agreements;
- investment advisory fees payable under the Advisory Agreement;
- administration fees and expenses, if any, payable under the Administration Agreement (including payments under the Administration Agreement between us and the Administrator, based upon our allocable portion of the Administrator’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief financial officer and chief compliance officer, and their respective staffs);
- any applicable administrative agent fees or loan arranging fees incurred with respect to portfolio investments by the Advisers, the Administrator or an affiliate thereof;
- costs and expenses incurred in implementing or maintaining third-party or proprietary software tools, programs or other technology;
- transfer agent, dividend agent and custodial fees and expenses;
- federal and state registration fees;
- all costs of registration and listing our shares on any securities exchange;
- federal, state and local taxes;
- independent directors’ fees and expenses, including reasonable travel, entertainment, lodging and meal expenses, and any legal counsel or other advisors retained by, or at the discretion or for the benefit of, the independent directors;
- costs of preparing and filing reports or other documents required by the SEC or other regulators, and all fees, costs and expenses related to compliance-related matters and regulatory filings related to our activities and/or other regulatory filings, notices or disclosures of the Advisers and their affiliates relating to us and its activities;
- costs of any reports, proxy statements or other notices to shareholders, including printing costs;
- fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;
- direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors, tax preparers and outside legal costs;
- proxy voting expenses;
- all expenses relating to payments of dividends or interest or distributions in cash or any other form made or caused to be made by our Board to or on account of holders of our securities, including in connection with any dividend reinvestment plan or direct stock purchase plan;
- costs incurred in connection with the formation or maintenance of entities or vehicles to hold our assets for tax or other purposes;
- the allocated costs incurred by the Advisers and/or the Administrator in providing managerial assistance to those portfolio companies that request;
- allocable fees and expenses associated with marketing efforts on our behalf;
- all fees, costs and expenses of any litigation involving us or our portfolio companies and the amount of any judgments or settlements paid in connection therewith, directors and officers, liability or other insurance (including costs of title insurance) and indemnification (including advancement of any fees, costs or expenses to persons entitled to indemnification) or extraordinary expense or liability relating to our affairs;
- fees, costs and expenses of winding up and liquidating our assets; and
- all other expenses incurred by us, the Advisers or the Administrator in connection with administering our business.

### Portfolio and Investment Activity

### Portfolio Composition

Our portfolio and investment activity for the three and six months ended June 30, 2024 and 2023 is presented below (information presented herein is at amortized cost unless otherwise indicated) (dollar amounts in thousands):

| Investments: | Three Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Total investments, beginning of period | $1,814,985 | $1,293,592 |
| Purchase of investments | 304,976 | 102,103 |
| Proceeds from principal repayments and sales of investments | (99,977) | (5,759) |
| Payment-in-kind interest | 1,529 | 551 |
| Amortization of premium/accretion of discount, net | 854 | 628 |
| Net realized gain (loss) on investments | 1,017 | 218 |
| **Total investments, end of period** | $2,023,384 | $1,391,333 |
| Portfolio companies at beginning of period | 195 | 153 |
| Number of new portfolio companies funded | 11 | 9 |
| Number of portfolio companies sold or repaid | (8) | (1) |
| **Portfolio companies, end of period** | 198 | 161 |
| Count of investments | 434 | 329 |
| Count of industries | 26 | 23 |

| Investments: | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Total investments, beginning of period | $1,666,169 | $1,225,573 |
| Purchase of investments | 509,305 | 202,017 |
| Proceeds from principal repayments and sales of investments | (154,873) | (45,361) |
| Payment-in-kind interest | 3,521 | 872 |
| Amortization of premium/accretion of discount, net | 1,870 | 1,533 |
| Net realized gain (loss) on investments | (2,608) | 6,699 |
| **Total investments, end of period** | $2,023,384 | $1,391,333 |
| Portfolio companies at beginning of period | 179 | 145 |
| Number of new portfolio companies funded | 34 | 20 |
| Number of portfolio companies sold or repaid | (15) | (4) |
| **Portfolio companies, end of period** | 198 | 161 |
| Count of investments | 434 | 329 |
| Count of industries | 26 | 23 |

As of June 30, 2024, our debt portfolio reflected the following characteristics, based on fair value:

- Weighted average reported annual EBITDA of $76.5 million.1
- Weighted average of 2.2x interest coverage ratio for our first lien term loans2
- Weighted average of 4.8x net leverage.3
- Approximately 83% of our debt investments have financial covenants.4

1 These calculations include all private debt investments for which fair value is determined by the Adviser in its capacity as the Valuation Designee of the Company's board of directors (the “Board”), and excludes quoted assets. Amounts are weighted based on fair market value of each respective investment as of its most recent quarterly valuation, which are derived from the most recently available portfolio company financial statements.

2 The interest coverage ratio calculation is derived from the most recently available portfolio company financial information received by the Adviser, and is a weighted average based on the fair market value of each respective first lien loan investment as of its most recent reporting to lenders. Such reporting may include assumptions regarding the impact of interest rate hedges established by borrowers to reduce their exposure to floating interest rates (resulting in a reduced hedging rate being used for the total interest expense in respect of such hedges, rather than any higher rates applicable under the documentation for such loans), even if such hedging instruments are not pledged as collateral to lenders in respect of such loans and do not secure the loans themselves. The interest rate coverage ratio excludes junior capital investments and equity co-investments, and applies solely to traditional middle market first lien loans held by us, which also excludes any upper middle market or other first lien loans investments that do not have maintenance financial covenants, and first lien loans that the Adviser has assigned a risk rating of ‘8’ or higher, as well as any portfolio companies with net senior leverage of 15x or greater. As a result of the foregoing exclusions, the interest coverage ratio shown herein applies to 73.71% of our total investments, and 81.35% of our total first lien loan investments, in each case based upon fair value.

3 Net leverage is the ratio of total debt minus cash divided by EBITDA, taking into account only the debt issued through the tranche in which we are a lender. Leverage is derived from the most recently available portfolio company financial statements, and weighted by the fair value of each investment. Net leverage presented excludes equity investments as well as debt instruments to which the Adviser has assigned a risk rating of 8 or higher, and any portfolio companies with net leverage of 15x or greater.

4 Represents the percentage of debt investments with one or more maintenance financial covenants.

As of June 30, 2024 and December 31, 2023, our investments consisted of the following (dollar amounts in thousands):

|  | June 30, 2024 Amortized Cost | Fair Value | % of Fair Value | December 31, 2023 Amortized Cost | Fair Value | % of Fair Value |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| First-Lien Term Loans | $1,818,109 | $1,803,988 | 90.61% | $1,450,120 | $1,427,492 | 86.95% |
| Subordinated Debt 1 | $176,765 | $154,692 | 7.77% | 190,454 | 183,387 | 11.17% |
| Equity Investments | $28,510 | $32,176 | 1.62% | 25,595 | 30,807 | 1.88% |
| **Total** | **$2,023,384** | **$1,990,856** | **100.00%** | **$1,666,169** | **$1,641,686** | **100.00%** |
| Largest portfolio company investment | $31,336 | $31,058 | 1.56% | $25,309 | $25,108 | 1.53% |
| Average portfolio company investment | $10,219 | $10,055 | 0.51% | $9,308 | $9,171 | 0.56% |

1As of June 30, 2024, Subordinated Debt is comprised of second lien term loans and/or second lien notes of $64,121, mezzanine debt of $89,329 and $1,242 of structured debt at fair value and second lien term loans and/or second lien notes of $77,227, mezzanine debt of $95,284 and $4,254 of structured debt at amortized cost.

As of December 31, 2023, Subordinated Debt is comprised of second lien term loans and/or second lien notes of $97,203 mezzanine debt of $83,528 and $2,656 of structured debt at fair value and second lien term loans and/or second lien notes of $100,711, mezzanine debt of $86,495 and $3,247 of structured debt at amortized cost.

The industry composition of our portfolio as a percentage of fair value as of June 30, 2024 and December 31, 2023 was as follows:

| Industry | June 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Aerospace & Defense | 3.15% | 3.13% |
| Automotive | 3.38% | 4.95% |
| Banking, Finance, Insurance, Real Estate | 3.29% | 3.95% |
| Beverage, Food & Tobacco | 8.40% | 7.76% |
| Capital Equipment | 5.06% | 4.21% |
| Chemicals, Plastics, & Rubber | 1.40% | 2.29% |
| Construction & Building | 4.19% | 3.90% |
| Consumer Goods: Durable | 1.00% | 1.51% |
| Consumer Goods: Non-durable | 3.01% | 3.31% |
| Containers, Packaging & Glass | 4.33% | 3.97% |
| Energy: Electricity | 2.88% | 1.75% |
| Environmental Industries | 3.01% | 2.73% |
| Healthcare & Pharmaceuticals | 12.71% | 12.72% |
| High Tech Industries | 9.97% | 8.97% |
| Media: Advertising, Printing & Publishing | 0.93% | 1.12% |
| Media: Diversified & Production | 0.99% | 0.96% |
| Retail | 0.29% | 0.35% |
| Services: Business | 17.46% | 18.43% |
| Services: Consumer | 4.60% | 4.86% |
| Sovereign & Public Finance | 0.67% | 0.65% |
| Telecommunications | 3.26% | 3.17% |
| Transportation: Cargo | 3.10% | 3.20% |
| Transportation: Consumer | 0.64% | 0.13% |
| Utilities: Electric | 0.65% | 0.89% |
| Utilities: Water | 0.42% | —% |
| Wholesale | 1.21% | 1.09% |
| **Total** | 100.00% | 100.00% |

The weighted average yields of our investments as of June 30, 2024 and December 31, 2023 were as follows:

|  | June 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Weighted average yield on debt and income producing investments, at cost 1 | 11.32% | 11.72% |
| Weighted average yield on debt and income producing investments, at fair value 2 | 11.41% | 11.94% |
| Percentage of debt investments bearing a floating rate | 94.76% | 94.61% |
| Percentage of debt investments bearing a fixed rate | 5.24% | 5.39% |

1 Weighted average yield inclusive of debt and income producing investments on non-accrual status, at cost, as of June 30, 2024 was 11.15%. There were no investments on non-accrual as of December 31, 2023.

2 Weighted average yield inclusive of debt and income producing investments on non-accrual status, at fair value, as of June 30, 2024 was 11.36%. There were no investments on non-accrual as of December 31, 2023.

As of June 30, 2024, 92.81% and 92.91% of our debt and income producing investments at cost and at fair value, respectively, had interest rate floors that govern the minimum applicable interest rates on such loans. As of December 31, 2023, 94.43% and 94.55% of our debt and income producing investments at cost and at fair value, respectively, had interest rate floors that govern the minimum applicable interest rates on such loans.

The weighted average yield of our debt and income producing securities is not the same as a return on investment for our shareholders, but rather relates to our investment portfolio and is calculated before the payment of all of our and our subsidiaries’ fees and expenses. The weighted average yield was computed using the effective interest rates as of each respective date, including accretion of original issue discount, but excluding any investments on non-accrual status, if any. There can be no assurance that the weighted average yield will remain at its current level. Total weighted average yields of our debt and income producing investments, at cost, decreased from 11.72% to 11.32% from December 31, 2023 to June 30, 2024. The decrease in weighted average yields was primarily due to the tightening of spreads in newly originated investments in the first half of 2024. Following our IPO on January 29, 2024, we invested in more upper middle market loans than in the fourth quarter of 2023, which had tighter spreads than traditional middle market loans. We also saw an increase in repricing transactions for existing portfolio investments in the first half of 2024.

While the macro-economic environment continues to present challenges for borrowers, with interest rates at elevated levels, we believe the current environment for private credit remains attractive. Spreads continued to tighten in the first half of 2024 amidst increased competition in the broadly syndicated loan market and healthy issuance levels of collateralized loan obligations ("CLO"), but remain compelling relative to historical levels.

As financial markets stabilize and private equity firms become more active in an effort to deploy dry powder and return capital to their investors we are seeing private equity mergers and acquisitions ("M&A") volumes increase, leading to higher levels of demand for middle-market financings. Prepayment activity is also increasing as a result, driven primarily by M&A activity, but also in part by repricing and refinancing while spreads continue to tighten. While prepayments serve as an offset to new transaction activity, we believe that lenders who are well positioned with available liquidity as well as incumbent positions in portfolio companies will benefit from increased levels of activity in the market.

Keeping the macro-economic environment in mind, we are closely monitoring the impacts to our portfolio companies, and we will continue to seek to invest in defensive businesses with low levels of cyclicality and strong levels of free cash flow generation. While we are not seeing signs of a broad-based deterioration in our performance or that of our portfolio companies at this time, there can be no assurance that the performance of certain of our portfolio companies will not be negatively impacted by economic conditions, which could have a negative impact on our future results.

### Asset Quality

In addition to various risk management and monitoring tools, we use the Advisers’ investment rating system to characterize and monitor the credit profile and expected level of returns on each investment in our portfolio. Churchill, in its capacity as sub-adviser, utilizes a systematic, consistent approach to credit evaluation, with a particular focus on an acceptable level of debt repayment and deleveraging under a “base case” set of projections (the “Base Case”), which reflects a more conservative estimate than the set of projections provided by a prospective portfolio company (the “Management Case”). The following is a description of the conditions associated with each investment rating:

**1. Performing - Superior:** Borrower is performing significantly above Management Case.

**2. Performing - High:** Borrower is performing at or near the Management Case (i.e., in a range slightly below to slightly above).

**3. Performing - Low Risk:** Borrower is operating well ahead of the Base Case to slightly below the Management Case.

**4. Performing - Stable Risk:** Borrower is operating at or near the Base Case (i.e., in a range slightly below to slightly above). This is the initial rating assigned to all new borrowers.

**5. Performing - Management Notice:** Borrower is operating below the Base Case. Adverse trends in business conditions and/or industry outlook are viewed as temporary. There is no immediate risk of payment default and only a low to moderate risk of covenant default.

**6. Watch List - Low Maintenance:** Borrower is operating below the Base Case, with declining margin of protection. Adverse trends in business conditions and/or industry outlook are viewed as probably lasting for more than a year. Payment default is still considered unlikely, but there is a moderate to high risk of covenant default.

**7. Watch List - Medium Maintenance:** Borrower is operating well below the Base Case, but has adequate liquidity. Adverse trends are more pronounced than in Internal Risk Rating 6 above. There is a high risk of covenant default, or it may have already occurred. Payments are current, although subject to greater uncertainty, and there is a moderate to high risk of payment default.

**8. Watch List - High Maintenance:** Borrower is operating well below the Base Case. Liquidity may be strained. Covenant default is imminent or may have occurred. Payments are current, but there is a high risk of payment default. Negotiations to restructure or refinance debt on normal terms may have begun. Further significant deterioration appears unlikely and no loss of principal is currently anticipated.

**9. Watch List - Possible Loss:** At the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Liquidity is strained. Payment default may have occurred or is very likely in the short term unless creditors grant some relief. Loss of principal is possible.

**10. Watch List - Probable Loss:** At the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may have already occurred. Liquidity is extremely limited. The prospects for improvement in the borrower’s situation are sufficiently negative that loss of some or all principal is probable.

Churchill regularly monitors and, when appropriate, changes the investment rating assigned to each investment in our portfolio. Each investment team will review the investment ratings in connection with monthly or quarterly portfolio reviews.

The following table shows the investment ratings of the investments in our portfolio (dollar amounts in thousands):

|  | June 30, 2024 Fair Value | % of Portfolio | Number of Portfolio Companies | December 31, 2023 Fair Value | % of Portfolio | Number of Portfolio Companies |
| ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| 1 | $— | —% | — | $— | —% | — |
| 2 | — | —% | — | — | —% | — |
| 3 | 130,153 | 6.54% | 8 | 80,342 | 4.89% | 7 |
| 4 | 1,654,267 | 83.09% | 156 | 1,353,243 | 82.44% | 140 |
| 5 | 130,331 | 6.55% | 21 | 138,916 | 8.46% | 21 |
| 6 | 37,358 | 1.88% | 6 | 35,686 | 2.17% | 6 |
| 7 | 28,431 | 1.43% | 4 | 27,653 | 1.68% | 4 |
| 8 | 1,856 | 0.09% | 1 | 5,846 | 0.36% | 1 |
| 9 | — | —% | — | — | —% | — |
| 10 | 8,460 | 0.42% | 2 | — | —% | — |
| **Total** | **$1,990,856** | **100.00%** | **198** | **$1,641,686** | **100.00%** | **179** |

As of June 30, 2024 and December 31, 2023, the weighted average Internal Risk Rating of our investment portfolio was 4.11 and 4.14, respectively. As of June 30, 2024, there were three portfolio companies on non-accrual. As of June 30, 2024, the amortized cost of the portfolio companies on non-accrual status were $29.1 million, which represents approximately 1.44% of total investments at amortized cost. As of December 31, 2023, there were no loans on non-accrual.

### Results of Operations

Operating results for the three and six months ended June 30, 2024 and 2023 were as follows (dollars amounts in thousands):

| Investment Income | Three Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Interest income | $53,018 | $36,292 |
| Payment-in-kind interest income | 1,529 | 551 |
| Dividend income | 33 | 24 |
| Other income | 509 | 234 |
| Total investment income | 55,089 | 37,101 |
| **Expenses** |  |  |
| Interest and debt financing expenses | 18,721 | 14,298 |
| Management fees | 3,590 | 2,475 |
| Incentive fees on net investment income | 3,075 | — |

87

|  |  |  |
| --- | ---: | ---: |
| Professional fees | 693 | 964 |
| Directors' fees | 127 | 95 |
| Administration fees | 484 | 350 |
| Other general and administrative expenses | 466 | 357 |
| Total expenses before expense support and Incentive fees waived | 27,156 | 18,539 |
| Expense support | — | (144) |
| Incentive fees waived | (3,075) | — |
| Net Expenses after expense support | 24,081 | 18,395 |
| Net investment income | $31,008 | $18,706 |
| **Net Realized and Change in Unrealized Gains (Losses)** |  |  |
| Net realized gains (losses) | $1,017 | $218 |
| Net change in unrealized gains (losses) | (12,102) | (4,242) |
| Income tax (provision) benefit | 282 | (376) |
| Total net change in unrealized gain (loss) | (11,820) | (4,618) |
| Total net realized and change in unrealized gains (losses) | (10,803) | (4,400) |
| Net increase (decrease) in net assets resulting from operations | $20,205 | $14,306 |

| Investment Income | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Interest income | $102,096 | $69,679 |
| Payment-in-kind interest income | 3,521 | 872 |
| Dividend income | 341 | 40 |
| Other income | 726 | 470 |
| Total investment income | 106,684 | 71,061 |
| **Expenses** |  |  |
| Interest and debt financing expenses | 35,662 | 27,041 |
| Management fees | 6,854 | 4,781 |
| Incentive fees on net investment income | 7,534 | — |
| Professional fees | 1,403 | 1,554 |
| Directors' fees | 255 | 191 |
| Administration fees | 1,026 | 659 |
| Other general and administrative expenses | 743 | 528 |
| Total expenses before expense support and Incentive fees waived | 53,477 | 34,754 |
| Expense support | — | (158) |
| Incentive fees waived | (7,534) | — |
| Net Expenses after expense support | 45,943 | 34,596 |
| Net investment income | $60,741 | $36,465 |
| **Net Realized and Change in Unrealized Gains (Losses)** |  |  |
| Net realized gains (losses) | $(2,608) | $6,699 |
| Net change in unrealized gains (losses) | (8,045) | (15,379) |
| Income tax (provision) benefit | 141 | (762) |
| Total net change in unrealized gain (loss) | (7,904) | (16,141) |
| Total net realized and change in unrealized gains (losses) | (10,512) | (9,442) |
| Net increase (decrease) in net assets resulting from operations | $50,229 | $27,023 |

Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including the level of new investment commitments, expenses, the recognition of realized gains and losses, and changes in unrealized appreciation and depreciation on the investment portfolio.

#### Investment income

Investment income, attributable to interest and fees on our debt investments, increased to $55.1 million and $106.7 million for the three and six months ended June 30, 2024, respectively, from $37.1 million and $71.1 million for the three and six months ended June 30, 2023 respectively, primarily due to increased investment activity driven by an increase in our deployed capital, slightly offset by a decrease in the weighted average yield of our debt and income producing investments as a result of spread tightening. As of June 30, 2024, the size of our portfolio increased to $2.0 billion from $1.4 billion as of June 30, 2023, at cost. As of June 30, 2024, the weighted average yield of our debt and income producing investments decreased to 11.32% from 11.37% as of June 30, 2023 on cost, primarily due to overall tightening of spreads in newly originated investments. The shifting environment in base interest rates, such as SOFR and any applicable alternate rates, may affect our investment income in the future.

#### Expenses

Total expenses before expense support and waived incentive fees increased to $27.2 million and $53.5 million for the three and six months ended June 30, 2024, respectively, from $18.5 million and $34.8 million for the three and six months ended June 30, 2023, respectively.

Interest and debt financing expenses increased for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 primarily due to higher average daily borrowings, higher average interest rates, the use of the Revolving Credit Facility (as defined below) in the third quarter of 2023 and the completion of the 2023 Debt Securitization and the 2024 Debt Securitization (each as defined below) on December 7, 2023 and March 14, 2024, respectively. The average daily borrowings for the three and six months ended June 30, 2024 were $939.0 million and $879.5 million, respectively, compared to $774.4 million and $756.3 million for the three and six months ended June 30, 2023, respectively. The average interest rate for the three and six months ended June 30, 2024 was 7.73% and 7.71%, respectively, compared to 7.17% and 6.97%, respectively, for the three and six months ended June 30, 2023.

The increases in management fees increased for the three and six months ended June 30, 2024 from the comparable periods in 2023 were driven by increases in our total assets. Incentive fees based on income for the three and six months ended June 30, 2024 of $3.1 million and $7.5 million, respectively, were waived in accordance with our Advisory Agreement.

Professional fees include legal, audit, tax, valuation, and other professional fees incurred related to the management of us. Administrative fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of the our chief financial officer and chief compliance officer, and their respective staffs. Other general and administrative expenses include insurance, filing, research, rating agencies, subscriptions and other costs. The increases in professional, administration, and other general and administrative fees for the three and six months ended June 30, 2024 from the comparable periods in 2023 was primarily driven by growing needs of the business given the increase in the Company's size year over year.

The expense support amount represents the amount of expenses paid by the Adviser on our behalf in accordance with the Expense Support Agreement (described further below). These expenses were primarily related to professional fees, specifically ordinary course legal expenses incurred by the Company. The Expense Support Agreement automatically terminated pursuant to its terms upon the consummation of the IPO. Refer to the "Related Party Transactions" section below for further details on the Expense Support Agreement.

#### Net realized gain (loss) and Net change in unrealized gains (losses) on investments

For the three months ended June 30, 2024, we had a net realized gain on investments of $1.0 million compared to a net realized gain of $218 thousand for the three months ended June 30, 2023. The increase in the net realized gain was primarily driven by full or partial repayments of our investments. For the six months ended June 30, 2024, we had a net realized loss on investments of $(2.6) million, compared to a net realized gain of $6.7 million for the six months ended June 30, 2023. The increase in the net realized loss was primarily driven by a final realization of an underperforming debt position which generated a realized loss in the first quarter of 2024, offset by realized gains in the second quarter of 2024.

For the three months ended June 30, 2024, we recorded a net change in unrealized loss of $(12.1) million, which resulted from a decrease in fair value primarily attributable to two underperforming portfolio companies. We recorded a net change in unrealized loss of $(8.0) million for the six months ended June 30, 2024, which resulted from a decrease in fair value of two underperforming portfolio companies in the second quarter of 2024, offset by unrealized gains in the first quarter of 2024 driven primarily from the tightening of market spreads and a reversal of unrealized losses on certain of our underperforming debt positions that were ultimately realized.

For the three months ended June 30, 2023, we recorded a net unrealized loss of $(4.2) million primarily attributable to modest softening of certain of our portfolio companies' credit metrics partially offset by tightening in market spreads. We recorded a net unrealized loss of (15.4) million for the six months ended June 30, 2023, primarily due to modest softening of certain of our portfolio companies' credit metrics.

### Liquidity and Capital Resources

Due to the diverse capital resources available to us at this time, we believe we have adequate liquidity to support our near-term capital requirements. Our liquidity and capital resources are generated primarily from cash flows from income earned from our investments and principal repayments, and our net borrowings from our credit facilities and CLO debt issuances (discussed further below). Prior to our IPO on January 29, 2024, we also generated cash flow from the proceeds of capital drawdowns of our privately placed capital commitments. In the future, we may also generate cash flow from future offerings of securities including issuances of debt and/or equity securities through both public registered offerings using a shelf registration statement and private offerings. Due to an uncertain economic outlook and current market volatility, we regularly evaluate our overall liquidity position and take proactive steps to maintain that position based on such circumstances. The primary uses of our cash are (i) purchases of investments in portfolio companies, (ii) funding the cost of our operations (including fees paid to our Adviser), (iii) debt service, repayment and other financing costs of our borrowings, (iv) cash distributions to the holders of our shares, and (v) share repurchases under the Company 10b5-1 Plan (defined below).

We are generally permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our shares if our asset coverage, as defined in the 1940 Act, is at least equal to 150%, if certain requirements are met. In connection with our organization, our Board and TIAA (as our initial shareholder) authorized us to adopt the 150% asset coverage ratio. As of June 30, 2024 and December 31, 2023, our asset coverage ratio was 195.88% and 178.57%, respectively.

Cash and cash equivalents as of June 30, 2024, taken together with cash available under our credit facilities, are expected to be sufficient for our investing activities and to conduct our operations in the near term. As of June 30, 2024, we had $81.0 million available under our Wells Fargo Financing Facility (as defined below), $36.2 million available under our SMBC Financing Facility (as defined below), and $172.8 million available under our SMBC Corporate Revolver (as defined below), subject to asset coverage limitations.

For the six months ended June 30, 2024, our cash and cash equivalents balance increased by $3.6 million. During that period, $266.9 million was used in operating activities, primarily relating to investment purchases of $509.3 million, offset by $154.9 million in repayments and sales of investments in portfolio companies. During the same period, $270.5 million was provided by financing activities, consisting primarily of proceeds from issuance of common shares and secured borrowings of $241.7 million and $546.3 million, respectively, net of shareholder distributions and repayments of secured borrowings of $40.8 million and $469.4 million, respectively.

### Equity

Our authorized stock consists of 500,000,000 shares of stock, par value $0.01 per share, all of which are initially designated as common stock.

#### IPO and Private Offerings

On January 29, 2024, we closed our IPO, issuing 5,500,000 shares of its common stock at a public offering price of $18.05 per share. We received total cash proceeds of $99.3 million. Our common stock began trading on the NYSE under the symbol “NCDL” on January 25, 2024.

Prior to April 28, 2023, in connection with our Private Offerings, we entered into subscription agreements (“Subscription Agreements”) with investors, pursuant to which investors were required to fund drawdowns to purchase our shares of common stock up to the amount of their respective capital commitment each time we delivered a drawdown notice. Following the final drawdown notice dated December 21, 2023 and due on January 5, 2024, all capital commitments had been drawn.

The following table summarizes total shares issued and proceeds received in connection with the IPO and the capital drawdowns delivered pursuant to the Subscription Agreements from inception through June 30, 2024 (dollar amounts in thousands, except per share data):

| Date | Shares Issued | Proceeds Received | Issuance Price per Share |
| --- | ---: | ---: | ---: |
| January 29, 2024 | 5,500,000 | $99,275 | $18.05 |
| January 5, 2024 | 7,888,094 | $142,382 | $18.05 |
| November 3, 2023 | 5,497,609 | $100,000 | $18.19 |
| July 17, 2023 | 4,357,515 | $78,565 | $18.03 |
| April 20, 2023 | 2,205,038 | $40,000 | $18.14 |
| December 21, 2022 | 3,193,195 | $60,000 | $18.79 |
| August 1, 2022 | 2,652,775 | $50,082 | $18.88 |
| April 25, 2022 | 1,800,426 | $34,964 | $19.42 |
| January 21, 2022 | 1,541,568 | $30,000 | $19.46 |
| December 9, 2021 | 1,491,676 | $29,207 | $19.58 |
| November 1, 2021 | 1,546,427 | $30,000 | $19.40 |
| August 23, 2021 | 2,593,357 | $50,000 | $19.28 |
| July 26, 2021 | 1,564,928 | $30,000 | $19.17 |
| June 22, 2021 | 1,034,668 | $20,000 | $19.33 |
| April 23, 2021 | 1,845,984 | $35,000 | $18.96 |
| March 11, 2021 | 785,751 | $15,000 | $19.09 |
| November 6, 2020 | 1,870,660 | $35,000 | $18.71 |
| October 16, 2020 | 1,057,641 | $20,000 | $18.91 |
| August 6, 2020 | 1,105,425 | $20,000 | $18.09 |
| May 7, 2020 | 1,069,522 | $20,000 | $18.70 |
| December 31, 2019 | 3,310,540 | $66,211 | $20.00 |
| December 19, 2019 | 50 | $1 | $20.00 |

#### Dividends and Distributions

To the extent that we have taxable income, we intend to make quarterly distributions to our common shareholders. Dividends and distributions to common shareholders are recorded on the applicable record date. The amount to be distributed to common shareholders is determined by our Board each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, will generally be distributed at least annually, although we may decide to retain such capital gains for investment.

In connection with the IPO, our Board approved an amended and restated dividend reinvestment plan (the "Amended DRIP"), which became effective on January 29, 2024, concurrent with the consummation of the IPO.

The Amended DRIP changed the dividend reinvestment plan from an “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan. As a result of the foregoing, if our Board authorizes, and we declare, a cash dividend or distribution, shareholders that acquired their shares in the IPO and do not “opt out” of the Amended DRIP will have their cash distributions automatically reinvested in additional shares rather than receiving cash. Notwithstanding the foregoing, a shareholder’s election (or deemed election) under the dividend reinvestment plan, dated December 19, 2019, will remain in effect for such shareholder and no further action is required by such shareholder with respect to their election under the Amended DRIP.

With respect to each distribution under the Amended DRIP, our Board reserves the right to either issue new shares of common stock or purchase shares of common stock in the open market for the accounts of participants in the Amended DRIP. If newly issued shares are used to implement the Amended DRIP, the number of shares to be issued to a shareholder will be determined by dividing the total dollar amount of the distribution payable to such participant by the market price per share of our common stock at the close of regular trading of the NYSE on the distribution payment date, or if no sale is reported for such day, the average of the reported bid and asked prices. However, if the market price per share on the distribution payment date exceeds the most recently computed NAV per share, we will issue shares at the greater of (i) the most recently computed NAV per share and (ii) 95% of the current market price per share (or such lesser discount to the current market price per share that still exceeds the most recently computed NAV per share). If shares are purchased in the open market to implement the Amended DRIP, the number of shares to be issued to a participant will be determined by dividing the dollar amount of the distribution payable to such participant by the weighted average price per share for all shares of common stock purchased by the plan administrator in the open market in connection with the dividend or distribution. Although each participant may from time to time have an undivided fractional interest in a share, no certificates for a fractional share will be issued. However, dividends and distributions on fractional shares will be credited to each participant’s account.

The following table summarizes the dividends declared from inception through June 30, 2024:

| Date Declared | Record Date | Payment Date | Dividend per Share |
| --- | --- | --- | ---: |
| May 1, 2024 | June 28, 2024 | July 29, 2024 | $0.45 |
| January 10, 2024 | February 12, 2025 | April 28, 2025 | $0.10 (3) |
| January 10, 2024 | November 11, 2024 | January 28, 2025 | $0.10 (3) |
| January 10, 2024 | August 12, 2024 | October 28, 2024 | $0.10 (3) |
| January 10, 2024 | May 13, 2024 | July 29, 2024 | $0.10 (3) |
| January 10, 2024 | March 30, 2024 | April 29, 2024 | $0.45 |
| December 28, 2023 | December 29, 2023 | January 10, 2024 | $0.50 |
| December 28, 2023 | December 29, 2023 | January 10, 2024 | $0.05 (2) |
| September 28, 2023 | September 28, 2023 | October 12, 2023 | $0.50 |
| September 28, 2023 | September 28, 2023 | October 12, 2023 | $0.05 (2) |
| June 28, 2023 | June 28, 2023 | July 12, 2023 | $0.50 |
| June 28, 2023 | June 28, 2023 | July 12, 2023 | $0.05 (2) |
| March 30, 2023 | March 30, 2023 | April 12, 2023 | $0.50 |
| March 30, 2023 | March 30, 2023 | April 12, 2023 | $0.26 (1) |
| December 29, 2022 | December 29, 2022 | January 17, 2023 | $0.50 |
| September 28, 2022 | September 28, 2022 | October 11, 2022 | $0.47 |
| June 30, 2022 | June 30, 2022 | July 12, 2022 | $0.43 |
| March 30, 2022 | March 31, 2022 | April 12, 2022 | $0.41 |
| December 29, 2021 | December 29, 2021 | January 18, 2022 | $0.40 |
| September 29, 2021 | September 29, 2021 | October 11, 2021 | $0.38 |
| June 29, 2021 | June 29, 2021 | July 12, 2021 | $0.31 |
| March 29, 2021 | March 29, 2021 | April 19, 2021 | $0.30 |
| December 29, 2020 | December 29, 2020 | January 18, 2021 | $0.28 |
| November 4, 2020 | November 4, 2020 | November 11, 2020 | $0.23 |
| August 4, 2020 | August 4, 2020 | August 11, 2020 | $0.28 |
| April 16, 2020 | April 16, 2020 | April 21, 2020 | $0.17 |

(1) Represents a special dividend and a supplemental dividend.

(2) Represents a supplemental dividend.

(3) Represents a special dividend.

The distributions declared were derived from investment company taxable income and net capital gain, if any. The federal income tax characterization of distributions declared and paid for the fiscal year will be determined at fiscal year-end based upon our investment company taxable income for the full fiscal year and distributions paid during the full year.

The following table reflects the shares issued pursuant to the dividend reinvestment plan from inception through June 30, 2024:

| Date Declared | Record Date | Payment Date | Shares Issued 1 |
| --- | --- | --- | ---: |
| January 10, 2024 | March 30, 2024 | April 29, 2024 | 189,256 |
| December 28, 2023 | December 29, 2023 | January 10, 2024 | 185,541 |
| September 28, 2023 | September 28, 2023 | October 12, 2023 | 158,545 |
| June 28, 2023 | June 28, 2023 | July 12, 2023 | 128,818 |
| March 30, 2023 | March 30, 2023 | April 12, 2023 | 150,703 |
| December 29, 2022 | December 29, 2022 | January 17, 2023 | 93,329 |
| September 28, 2022 | September 28, 2022 | October 11, 2022 | 68,093 |
| June 30, 2022 | June 30, 2022 | July 12, 2022 | 45,341 |
| March 30, 2022 | March 31, 2022 | April 12, 2022 | 32,320 |
| December 29, 2021 | December 29, 2021 | January 18, 2022 | 23,017 |
| September 29, 2021 | September 29, 2021 | October 11, 2021 | 10,639 |
| June 29, 2021 | June 29, 2021 | July 12, 2021 | 3,039 |
| March 29, 2021 | March 29, 2021 | April 19, 2021 | 1,824 |
| December 29, 2020 | December 29, 2020 | January 18, 2021 | 1,550 |
| November 4, 2020 | November 4, 2020 | November 11, 2020 | 98 |
| August 4, 2020 | August 4, 2020 | August 11, 2020 | 34 |

(1) All shares issued to shareholders are newly issued shares.

#### Share Repurchase Plan

On March 5, 2024, we entered into a share repurchase plan (the “Company 10b5-1 Plan”), pursuant to which we may purchase up to $99.3 million in the aggregate of its outstanding shares of common stock in the open market at prices below its net asset value (“NAV”) per share over a specified period. Any purchase of the shares pursuant to the Company 10b5-1 Plan will be conducted in accordance with the guidelines and conditions of Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We adopted the Company 10b5-1 Plan because we believes that, if our common stock is trading below its then-current NAV per share, it will be in the best interest of its stockholders for us to reinvest in our portfolio.

The Company 10b5-1 Plan is designed to allow us to repurchase our shares of common stock at times when we otherwise might be prevented from doing so under insider trading laws. The Company 10b5-1 Plan requires BofA Securities, Inc., as agent, to repurchase shares of common stock on the Company's behalf when the market price per share is below the most recently reported NAV per share (including any updates, corrections or adjustments publicly announced by us to any previously announced NAV per share). Under the Company 10b5-1 Plan, the agent will increase the volume of purchases made as the price of the shares of the our common stock declines, subject to volume restrictions. The timing and amount of any share repurchases will depend on the terms and conditions of the Company 10b5-1 Plan, the market price of the shares of our common stock and trading volumes, and no assurance can be given that any particular amount of shares of the common stock will be repurchased.

The purchase of shares of common stock pursuant to the Company 10b5-1 Plan is intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act, and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances.

The Company 10b5-1 Plan became effective on March 29, 2024 and commenced on April 1, 2024. The 10b5-1 Plan will terminate upon the earliest to occur of (i) 12-months from the effective date (tolled for periods during which the Company 10b5-1 Plan is suspended), (ii) the end of the trading day on which the aggregate purchase price for all shares of common stock purchased under the Company 10b5-1 Plan equals $99.3 million and (iii) the occurrence of certain other events described in the Company 10b5-1 Plan.

The following table reflects the shares repurchased pursuant to the Company 10b5-1 Plan for each month from inception through June 30, 2024 (dollar amounts in thousands, except per share data):

| Period | Total Number of Shares Repurchased | Average Price Paid per Share | Approximate Dollar Value of Shares that have been Purchased Under the Plan | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan |
| --- | ---: | ---: | ---: | ---: |
| April 1, 2024 - April 30, 2024 | 104,075 | $17.57 | $1,828 | $97,447 |
| May 1, 2024 - May 31, 2024 | 96,598 | $17.56 | 1,696 | 95,751 |
| June 1, 2024 - June 30, 2024 | 91,637 | $17.73 | 1,625 | 94,126 |
| Total | 292,310 |  | $5,149 |  |

As of July 31, 2024, BofA Securities, Inc., as agent, repurchased an additional 75,675 shares of the Company’s common stock pursuant to the Company 10b5-1 Plan for approximately $1.33 million.

#### Shareholder Transfer Restrictions

With respect to any shares of common stock held by a shareholder prior to the date of the IPO prospectus (January 24, 2024), without the prior written consent of the Board:

- for 365 days following the date of the IPO prospectus (January 24, 2024), a shareholder that is affiliated with the Advisers is not permitted to transfer (whether by sale, gift, merger, by operation of law or otherwise), exchange, assign, pledge, hypothecate or otherwise dispose of or encumber any shares of common stock held by such shareholder prior January 24, 2024;
- for 90 days following the date of the date of the IPO prospectus (January 24, 2024), a shareholder (other than certain individuals and entities affiliated with the Advisers, who are subject to the 365-day restriction above) is not permitted to transfer (whether by sale, gift, merger, by operation of law or otherwise), exchange, assign, pledge, hypothecate or otherwise dispose of or encumber any shares of common stock held by such shareholder prior to January 24, 2024;
- beginning with the 91st day following the date of the IPO prospectus (January 24, 2024) through the 180th day following the date of the IPO prospectus (January 24, 2024), a shareholder (other than certain individuals and entities affiliated with the Advisers, who are subject to the 365-day restriction above) is not permitted to transfer (whether by sale, gift, merger, by operation of law or otherwise), exchange, assign, pledge, hypothecate or otherwise dispose of or encumber 85% of the shares of common stock held by such shareholder prior to January 24, 2024; and
- beginning with the 181st day following the date of the IPO prospectus (January 24, 2024) through the 270th day following the date of the IPO prospectus (January 24, 2024), a shareholder (other than certain individuals and entities affiliated with the Advisers, who are subject to the 365-day restriction above) is not permitted to transfer (whether by sale, gift, merger, by operation of law or otherwise), exchange, assign, pledge, hypothecate or otherwise dispose of or encumber 50% of the shares of common stock held by such shareholder prior to January 24, 2024.

Beginning with the 271st day following the date of the IPO prospectus (January 24, 2024), a shareholder (other than certain individuals and entities affiliated with the Advisers, who are subject to the 365-day restriction above) may transfer (whether by sale, gift, merger, by operation of law or otherwise), exchange, assign, pledge, hypothecate or otherwise dispose of or encumber all of the shares of common stock held by such shareholder prior to the date of the IPO.

This means that, as a result of these transfer restrictions, without the consent of the Board, a shareholder (other than certain individuals and entities affiliated with the Advisers, who are subject to the 365-day restriction above) who owned 100 shares of common stock on January 24, 2024 could not sell any of such shares for 90 days following January 24, 2024; 91 days following January 24, 2024, such shareholder could only sell up to 15 of such shares; 181 days following January 24, 2024, such shareholder could only sell up to 50 of such shares; 271 days following January 24, 2024, such shareholder could sell all of such shares.

#### Income Taxes

We have elected and intend to qualify annually to be treated as a RIC for U.S. federal income tax purposes under the Code. If we qualify as a RIC, we will not be taxed on our investment company taxable income or realized net capital gains, to the extent that such taxable income or gains are distributed, or deemed to be distributed, to shareholders on a timely basis.

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation until realized. Dividends declared and paid by us in a year may differ from taxable income for that year as such dividends may include the distribution of current year taxable income or the distribution of prior year taxable income carried forward into and distributed in the current year. Distributions also may include returns of capital.

To qualify for RIC tax treatment, we must, among other things, distribute, with respect to each taxable year, at least 90% of our investment company net taxable income (i.e., our net ordinary income and our realized net short-term capital gains in excess of realized net long-term capital losses, if any). If we qualify as a RIC, we may also be subject to a U.S. federal excise tax, based on distribution requirements of our taxable income on a calendar year basis. Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year distributions into the next year and pay a 4% U.S. federal excise tax on such income. Any such carryover taxable income must be distributed through a dividend declared prior to filing the final tax return related to the year that generated such taxable income.

We intend to distribute to our shareholders between 90% and 100% of our annual taxable income (which includes our taxable interest and fee income). We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. We cannot assure shareholders that they will receive any distributions or distributions at a particular level.

#### Secured Borrowings

See Note 6 to the consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on our secured borrowings.

#### Subscription Facility

On September 10, 2020, we entered into a revolving credit agreement (the “Subscription Facility Agreement” and the facility thereunder, the “Subscription Facility”) with Sumitomo Mitsui Banking Corporation (“SMBC”), as the administrative agent for certain secured parties, the syndication agent, the lead arranger, the book manager, the letter of credit issuer and the lender. The Subscription Facility had a maximum commitment of $50 million, subject to availability under the "Borrowing Base." The Borrowing Base was calculated based on the unfunded capital commitments of certain investors that had subscribed to purchase shares of the Company, to the extent the capital commitments of such investors also had been approved by SMBC for inclusion in the Borrowing base and met certain additional criteria. The Subscription Facility Agreement expired on September 8, 2023, and we fully paid down the outstanding balance including the accrued interest expense.

#### Wells Fargo Financing Facility

On December 31, 2019, a wholly owned subsidiary of the Company entered into a credit agreement ("the “Wells Fargo Financing Facility” and the agreement relating thereto, as amended from time to time, the “Wells Fargo Financing Facility Agreement”), with Wells Fargo Bank, N.A. as lender (“Wells Fargo”) and administrative agent. The Wells Fargo Financing Facility Agreement was amended on October 28, 2020, March 31, 2022 and March 14, 2024. The most recent amendment on March 14, 2024, among other things: (i) added SPV V as a party to the facility and (ii) decreased the maximum facility amount available from $275 million to $150 million, which facility amount may be increased, with the consent of the administrative agent and each applicable lender, to up to $250 m during the reinvestment period.

The Wells Fargo Financing Facility reinvestment period expires on March 31, 2025 and has a maturity date of March 31, 2027. The Wells Fargo Financing Facility Agreement also requires the Company to maintain an asset coverage ratio equal to at least 1.50:1.00. The amount of the borrowings under the Wells Fargo Financing Facility equals the amount of the outstanding advances. Advances under the Wells Fargo Financing Facility may be prepaid and reborrowed at any time during the reinvestment period, but any termination or reduction of the facility amount prior to the first anniversary of the date of the amendment (subject to certain exceptions) is subject to a commitment reduction fee of 1%. Under the Wells Fargo Financing Facility Agreement, we pay a fee on daily undrawn amounts under the Wells Fargo Financing Facility of 0.25% per annum during the period ending June 14, 2024, 0.50% per annum for the next six months and thereafter, 0.50% per annum on undrawn amounts of up to 40% of the maximum facility amount and 1.50% per annum on undrawn amounts in excess of 40% of the maximum facility amount.

As of June 30, 2024 and December 31, 2023, the Wells Fargo Financing Facility bore interest at a rate of SOFR, reset daily plus 2.20% per annum.

SPV V, beginning March 14, 2024, has pledged all of its assets to the collateral agent to secure their obligations under the Wells Fargo Financing Facility. The Company, and SPV V have made customary representations and warranties and are required to comply with various financial covenants related to liquidity and other maintenance covenants, reporting requirements and other customary requirements for similar facilities.

#### SMBC Financing Facility

On November 24, 2020, a wholly owned subsidiary of the Company entered into a senior secured revolving credit facility (the “SMBC Financing Facility” and the agreement relating thereto the “SMBC Financing Facility Agreement”) with SMBC, as the administrative agent, the collateral agent and the lender. On October 19, 2023, SPV IV entered into the borrower joinder agreement (the “SMBC Joinder”) to become party to the SMBC Financing Facility Agreement.

The SMBC Financing Facility Agreement was amended on December 23, 2021, June 29, 2022 and November 21, 2023. The most recent amendment on November 21, 2023 (the "SMBC Financing Facility Amendment"), among other things: (i) extended the reinvestment period from November 24, 2023 to November 24, 2024 and the stated maturity date from November 24, 2025 to November 24, 2026; (ii) changed the interest rate for loans under the SMBC Financing Facility Agreement from (A) either the Base Rate (as defined in the SMBC Financing Facility Agreement) plus 1.15% or the Term SOFR (as defined in the SMBC Financing Facility Agreement) plus 2.15% to (B) either the Base Rate plus 1.65% or Term SOFR plus 2.65%; (iii) reduced the maximum facility amount from $300 million to $150 million upon the occurrence of a permitted securitization, subject to a subsequent increase to $250 million, in the sole discretion of the administrative agent, if so requested by the borrowers; and (iv) provide for an unused commitment fee of, from the three month anniversary of the SMBC Financing Facility Amendment date to the six month anniversary of the Amendment date, 0.50% per annum on the unused commitments and on or after the six month anniversary of the SMBC Financing Facility Amendment date, 0.50% per annum on the unused commitments if such unused commitments are less than 50% of the total commitments and 1.00% per annum on the unused commitments if such unused commitments are greater than or equal to 50% of the total commitments. In connection with the SMBC Financing Facility Amendment, the borrowers paid an extension fee of $450 thousand plus an annualized fee of 0.30% multiplied by $150 million based on the length of time (in years) until the occurrence of a permitted securitization. Advances under the SMBC Financing Facility Agreement may be prepaid and reborrowed at any time during the reinvestment period. As of June 30, 2024 and December 31, 2023, the SMBC Financing Facility bore interest at one-month SOFR plus 2.65% and one-month SOFR plus 2.65%, respectively, per annum.

Effective December 7, 2023, following the closing of the 2023 Debt Securitization (discussed further below), the maximum facility amount available was reduced to $150 million from $300 million and SPV IV began borrowing under the SMBC Financing Facility.

SPV IV, beginning October 19, 2023, has pledged all of its assets to the collateral agent to secure its obligations under the SMBC Financing Facility. The Company and SPV IV have made customary representations and warranties and are required to comply with various financial covenants related to liquidity and other maintenance covenants, reporting requirements and other customary requirements for similar facilities.

#### Revolving Credit Facility

On June 23, 2023, we entered into a senior secured revolving credit agreement (the “Senior Secured Revolving Credit Agreement” and facility thereunder, the “Revolving Credit Facility” and together with the Wells Fargo Financing Facility and SMBC Financing Facility, the “Financing Facilities”) with SMBC as the lender, administrative agent, and one of the lead arrangers along with Wells Fargo. The Revolving Credit Facility is guaranteed by NCDL Equity Holdings and will be guaranteed by certain of our subsidiaries that are formed or acquired in the future (collectively, the “Guarantors”).

The Revolving Credit Facility was amended on April 9, 2024. The amendment, among other things, increased the maximum principal amount available under the Revolving Credit Facility from $185 million to $250 million pursuant to the accordion feature, subject to availability under the borrowing base,, subject to availability under the borrowing base, which is based on our portfolio investments and other outstanding indebtedness. Maximum capacity under the Revolving Credit Facility may be increased to $300 million through the exercise by us of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Revolving Credit Facility is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions, and includes a $25 million limit for swingline loans.

The availability period under the Revolving Credit Facility will terminate on June 23, 2027 (the “Commitment Termination Date”) and will mature on June 23, 2028 (the “Final Maturity Date”). During the period from the Commitment Termination Date to the Final Maturity Date, we will be obligated to make mandatory prepayments out of the proceeds of certain asset sales and other recovery events and equity and debt issuances.

We may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn in U.S. dollars will bear interest at either term SOFR plus a margin, or the prime rate plus a margin. We may elect either the term SOFR or prime rate at the time of drawdown, and loans denominated in U.S. dollars may be converted from one rate to another at any time at our option, subject to certain conditions. Amounts drawn in other permitted currencies will bear interest at the relevant rate specified therein plus an applicable margin. We also will pay a fee of 0.375% on average daily undrawn amounts. As of June 30, 2024, the Revolving Credit Facility bore interest at one-month SOFR plus 2.25% per annum.

The Senior Secured Revolving Credit Agreement includes customary covenants, including certain limitations on the incurrence by the Company of additional indebtedness and on the Company’s ability to make distributions to its shareholders, or redeem, repurchase or retire shares of stock, upon the occurrence of certain events, and certain financial covenants related to asset coverage and minimum shareholders’ equity, as well as customary events of default.

#### CLO-I

On May 20, 2022 (the “Closing Date”), the Company completed a $448.3 million term debt securitization (the “2022 Debt Securitization”). Term debt securitization is also known as a collateralized loan obligation and is a form of secured financing incurred by the Company.

The notes offered in the 2022 Debt Securitization (the “2022 Notes”) were issued by CLO-I, an indirect, wholly owned, consolidated subsidiary of the Company. The 2022 Notes consist of $199.0 million of AAA Class A-1 2022 Notes, which bear interest at the three-month Term SOFR plus 1.80%; $34.3 million of AAA Class A-1F 2022 Notes, which bear interest at 4.42%; $47.3 million of AA Class B 2022 Notes, which bear interest at the three-month Term SOFR plus 2.30%; $31.5 million of A Class C 2022 Notes, which bear interest at the three-month Term SOFR plus 3.15%; $27.0 million of BBB Class D 2022 Notes, which bear interest at the three-month Term SOFR plus 4.15%; and approximately $79.3 million of Subordinated 2022 Notes, which do not bear interest. The Company directly owns all of the BBB Class D 2022 Notes and the Subordinated 2022 Notes and as such, these notes are eliminated in consolidation.

As part of the 2022 Debt Securitization, CLO-I also entered into a loan agreement (the “CLO-I Loan Agreement”) on the Closing Date, pursuant to which various financial institutions and other persons which are, or may become, parties to the CLO-I Loan Agreement as lenders (the “Lenders”) committed to make $30.0 million of AAA Class A-L 2022 Loans to CLO-I (the “2022 Loans” and, together with the 2022 Notes, the “2022 Debt”). The 2022 Loans bear interest at the three-month Term SOFR plus 1.80% and were fully drawn upon the closing of the transactions. Any Lender may elect to convert all of the Class A-L 2022 Loans held by such Lenders into Class A-1 2022 Notes upon written notice to CLO-I in accordance with the CLO-I Loan Agreement.

The 2022 Debt is backed by a diversified portfolio of senior secured and second lien loans. Through April 20, 2026, all principal collections received on the underlying collateral may be used by CLO-I to purchase new collateral under the direction of the Company, in its capacity as collateral manager of CLO-I and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the 2022 Debt Securitization. The 2022 Notes are due on April 20, 2034. The 2022 Loans are scheduled to mature, and, unless earlier repaid, the entire unpaid principal balance thereof is due and payable on April 20, 2034.

The 2022 Debt is the secured obligation of CLO-I, and the indenture and the CLO-I Loan Agreement, as applicable, governing the 2022 Debt includes customary covenants and events of default. The 2022 Debt has not been, and will not be, registered under the Securities Act, or any state “blue sky” laws.

The Company serves as collateral manager to CLO-I under a collateral management agreement (the “Collateral Management Agreement”) and has waived the management fee due to it in consideration for providing these services.

#### CLO-II

On December 7, 2023 (the “Closing Date”), the Company completed a $298.1 million term debt securitization (the “2023 Debt Securitization”).

The notes offered in the 2023 Debt Securitization (the “2023 Notes”) were issued by CLO-II, an indirect, wholly owned, consolidated subsidiary of the Company. The 2023 Notes consist of $2.0 million of AAA Class X 2023 Notes, which bear interest at the three-month Term SOFR plus 2.00%, $100.5 million of AAA Class A-1 2023 Notes, which bear interest at the three-month Term SOFR plus 2.35%; $37.5 million of AA Class B 2023 Notes, which bear interest at three-month Term SOFR plus 3.20% and approximately $83.1 million of Subordinated 2023 Notes, which do not bear interest. The Company directly owns all of the Subordinated 2023 Notes and as such, these notes are eliminated in consolidation.

As part of the 2023 Debt Securitization, CLO-II also entered into a loan agreement (the “CLO-II Loan Agreement”) on the Closing Date, pursuant to which various financial institutions and other persons which are, or may become, parties to the CLO-II Loan Agreement as lenders (the “Lenders”) committed to make $25.0 million of AAA Class A-L-A 2023 Loans and $50.0 million AAA Class A-L-B 2023 Loans to CLO-II (the “2023 Loans” and, together with the 2023 Notes, the “2023 Debt”). The 2023 Loans bear interest at the three-month Term SOFR plus 2.35% and were fully drawn upon the closing of the transactions. Any Lender may elect to convert all or a portion of the Class A-L-A 2023 Loans held by such Lenders into Class A-1 2023 Notes upon written notice to CLO-II in accordance with the CLO-II Loan Agreement.

The 2023 Debt is backed by a diversified portfolio of senior secured and second lien loans. Through January 20, 2028, all principal collections received on the underlying collateral may be used by CLO-II to purchase new collateral under the direction of the Company, in its capacity as collateral manager of CLO-II and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the 2023 Debt Securitization. The 2023 Notes are due on January 20, 2036. The 2023 Loans are scheduled to mature, and, unless earlier repaid, the entire unpaid principal balance thereof is due and payable on January 20, 2036.

The 2023 Debt is the secured obligation of CLO-II, and the indenture and the CLO-II Loan Agreement, as applicable, governing the 2023 Debt includes customary covenants and events of default. The 2023 Debt has not been, and will not be, registered under the Securities Act, or any state “blue sky” laws.

The Company serves as collateral manager to CLO-II under a collateral management agreement (the “Collateral Management Agreement”) and has waived the management fee due to it in consideration for providing these services.

#### CLO-III

On March 14, 2024 (the “Closing Date”), the Company completed a $296,970 term debt securitization (the “2024 Debt Securitization”).

The notes offered in the 2024 Debt Securitization (the “2024 Notes” or “2024 Debt”) were issued by Churchill NCDLC CLO-III, LLC (formerly known as Nuveen Churchill BDC SPV III, LLC) (the “2024 Issuer”), a direct, wholly owned, consolidated subsidiary of the Company, pursuant to an indenture (the “Indenture”) dated as of the Closing Date. The 2024 Notes consist of $2,000 of AAA Class X 2024 Notes, which bear interest at the three-month Term SOFR plus 1.40%; $175,500 of AAA Class A 2024 Notes, which bear interest at the three-month Term SOFR plus 2.00%; $37,500 of AA Class B 2024 Notes, which bear interest at the three-month Term SOFR plus 2.65%; and $81,970 of Subordinated 2024 Notes, which do not bear interest. The Company directly retained all of the Subordinated 2024 Notes and as such, these notes are eliminated in consolidation.

The 2024 Notes are backed by a diversified portfolio of senior secured and second lien loans. The Indenture contains certain

conditions pursuant to which loans can be acquired by the 2024 Issuer, in accordance with rating agency criteria or as otherwise agreed with certain institutional investors who purchased the 2024 Notes. Through April 20, 2028, all principal collections received on the underlying collateral may be used by the 2024 Issuer to purchase new collateral under the direction of the Company, in its capacity as collateral manager of the 2024 Issuer and in accordance with the Company’s investment strategy, allowing the Company to maintain the initial leverage in the 2024 Debt Securitization. The 2024 Notes are due on April 20, 2036.

The 2024 Notes are the secured obligation of the 2024 Issuer, and the Indenture governing the 2024 Notes includes customary covenants and events of default. The 2024 Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state “blue sky” laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or applicable exemption from registration.

The Company serves as collateral manager to the 2024 Issuer under a collateral management agreement (the “Collateral Management Agreement”) and has waived any management fee due to it in consideration for providing these services.

### Contractual Obligations

The following tables show the contractual maturities of our debt obligations as of June 30, 2024 and December 31, 2023 (dollar amounts in thousands):

| As of June 30, 2024 | Payments Due by Period Total | Less than 1 Year | 1 to 3 years | 3 to 5 years | More than 5 Years |
| --- | ---: | ---: | ---: | ---: | ---: |
| Wells Fargo Financing Facility | $69,000 | $— | $69,000 | $— | $— |
| SMBC Financing Facility | 110,500 | — | 110,500 | — | — |
| Revolving Credit Facility | 77,250 | — | — | 77,250 | — |
| CLO-I | 342,000 | — | — | — | 342,000 |
| CLO-II | 215,000 | — | — | — | 215,000 |
| CLO-III | 215,000 | — | — | — | 215,000 |
| **Total debt obligations** | $1,028,750 | $— | $179,500 | $77,250 | $772,000 |

99

| As of December 31, 2023 | Payments Due by Period Total | Less than 1 Year | 1 to 3 years | 3 to 5 years | More than 5 Years |
| --- | ---: | ---: | ---: | ---: | ---: |
| Wells Fargo Financing Facility | $231,000 | $— | $— | $231,000 | $— |
| SMBC Financing Facility | 37,377 | — | 37,377 | — | — |
| Revolving Credit Facility | 126,500 | — | — | 126,500 | — |
| CLO-I | 342,000 | — | — | — | 342,000 |
| CLO-II | $215,000 | $— | $— | $— | $215,000 |
| **Total debt obligations** | $951,877 | $— | $37,377 | $357,500 | $557,000 |

### Related-Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

- the Advisory Agreement;
- the CAM Sub-Advisory Agreement;
- the NAM Sub-Advisory Agreement;
- the Administration Agreement; and
- the Expense Support Agreement.

On June 7, 2019, the SEC granted an exemptive order (the “Order”) that permits us to participate in negotiated co-investment transactions with certain other funds and accounts sponsored or managed by either of the Advisers and/or their affiliates, subject to the conditions of the Order. Pursuant to the Order, the Company is permitted to co-invest with its affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Board's independent directors make certain conclusions in connection with a co-investment transaction, including, but not limited to, that (1) the terms of the potential co-investment transaction, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching in respect of the Company or its stockholders on the part of any person concerned, and (2) the potential co-investment transaction is consistent with the interests of the Company's stockholders and is consistent with its then-current investment objective and strategies. Neither we nor the affiliated funds are obligated to invest or co-invest when investment opportunities are referred to us or them.

In addition, pursuant to an exemptive order issued by the SEC on April 8, 2020 and applicable to all BDCs through December 31, 2020 (the “Temporary Relief”), the Company was permitted, subject to the satisfaction of certain conditions, to complete follow-on investments in our existing portfolio companies with certain affiliates that are private funds if such private funds did not hold an investment in such existing portfolio company. Without the Temporary Relief, such private funds would not be able to participate in such follow-on investments with us unless the private funds had previously acquired securities of the portfolio company in a co-investment transaction with the Company. Although the Temporary Relief expired on December 31, 2020, the SEC’s Division of Investment Management had indicated that until March 31, 2022, it would not recommend enforcement action, to the extent that any BDC with an existing co-investment order continues to engage in certain transactions described in the Temporary Relief, pursuant to the same terms and conditions described therein. The conditional exemptive order is no longer effective; however, on October 14, 2022, the SEC granted an exemptive order to permit the Company to continue to complete follow-on investments in its existing portfolio companies with certain affiliates that are private funds if such private funds did not hold an investment in such existing portfolio company, subject to certain conditions.

### Expense Support Agreement

On December 31, 2019, we entered into the Expense Support Agreement with the Adviser. The Expense Support Agreement automatically terminated pursuant to its terms upon the consummation of the IPO on January 29, 2024. Under the Expense Support Agreement, the Adviser was able to pay certain of our expenses (each, an “Expense Payment”), provided that no portion of the payment was used to pay any of our interest expense. Such Expense Payment was made in any combination of cash or other immediately available funds no later than forty-five days after a written commitment from the Adviser to pay such expense, and/or by an offset against amounts due from us to the Adviser or its affiliates. The cumulative amount of expense payments by the Adviser under the Expense Support Agreement was $2,979, of which $1,101 was reimbursed by the Company prior to the termination of the Expense Support Agreement.

### Off-Balance Sheet Arrangements

In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of June 30, 2024 and December 31, 2023. We have in the past and may in the future become obligated to fund commitments such as delayed draw commitments.

*For more information on our off-balance sheet arrangements, commitments and contingencies see Note 7 to the consolidated financial statements in Part I, Item 1 of this Quarterly Report Form 10-Q.*

### Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies and estimates, including those relating to the valuation of our portfolio investments, are described below. We consider the most significant accounting policies to be those related to our Valuation of Portfolio Investments, Revenue Recognition, and U.S. Federal Income Taxes, are described below. The valuation of investments is our most significant critical estimate. The critical accounting policies and estimates should be read in connection with our risk factors as disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for year ended December 31, 2023.

#### Valuation of Portfolio Investments

At all times, consistent with U.S. GAAP and the 1940 Act, we conduct a valuation of our assets, pursuant to which our net asset value is determined.

Our assets are valued on a quarterly basis, or more frequently if required under the 1940 Act. Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser as the Company's valuation designee (the “Valuation Designee”) to determine the fair value of the Company's investments that do not have readily available market quotations, which became effective beginning with the fiscal quarter ended March 31, 2023. Pursuant to the Company's valuation policy approved by the Board, a valuation committee comprised of employees of the Adviser (the “Valuation Committee”) is responsible for determining the fair value of the Company's assets for which market quotations are not readily available, subject to the oversight of the Board.

Investments for which market quotations are readily available are typically valued at those market quotations. Market quotations are obtained from independent pricing services, where available. Generally investments marked in this manner will be marked at the mean of the bid and ask of the quotes obtained. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations.

With respect to investments for which market quotations are not readily available, we or an independent third-party valuation firm engaged by the Valuation Designee, will take into account relevant factors in determining the fair value of our investments, including and in combination of: comparison to publicly traded securities, including factors such as yield, maturity and measures of credit quality; the enterprise value of a portfolio company; the nature and realizable value of any collateral; the portfolio company's ability to make payments and its earnings and discounted cash flows; and the markets in which the portfolio company does business. Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information. The independent third-party valuation firm provides a fair valuation report, a description of the methodology used to determine the fair value and their analysis and calculations to support their conclusion.

When an external event such as a purchase transaction, public offering or subsequent sale or paydown occurs, we use the pricing indicated by the external event to corroborate our valuation.

U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value. We review pricing and methodologies in order to determine if observable market information is being used, versus unobservable inputs.

Our accounting policy on the fair value of our investments is critical because the determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our consolidated financial statements express the uncertainty with respect to the possible effect of these valuations, and any change in these valuations, on the consolidated financial statements.

*For more information on the fair value hierarchies, our framework for determining fair value and the composition of our portfolio see Note 4 to the consolidated financial statements in Part I, Item 1 of this Quarterly Report Form 10-Q.*

#### Revenue Recognition

Our revenue recognition policies are as follows:

*Net realized gains (losses) on investments:* Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method.

*Investment Income:* Interest income, including amortization of premium and accretion of discount on loans are recorded on the accrual basis. We accrue interest income based on the effective yield if we expect that, ultimately, we will be able to collect such income. We may have loans in our portfolio that contain payment-in-kind (“PIK”) income provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity.

Other income may include income such as consent, waiver, amendment, unused, and prepayment fees associated with our investment activities as well as any fees for managerial assistance services rendered by us to our portfolio companies. Such fees are recognized as income when earned or the services are rendered.

Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.

*Non-accrual:* Generally, if a payment default occurs on a loan in the portfolio, or if management otherwise believes that the issuer of the loan will not be able to make contractual interest payments or principal payments, the Sub-Adviser will place the loan on non-accrual status and we will cease recognizing interest income on that loan until all principal and interest is current through payment or until a restructuring occurs, such that the interest income is deemed to be collectible even though we remain contractually entitled to this interest. We may make exceptions to this policy if the loan has sufficient collateral value and is in the process of collection. Accrued interest is written off when it becomes probable that the interest will not be collected and the amount of uncollectible interest can be reasonably estimated.

#### U.S. Federal Income Taxes

We have elected to be treated as a BDC under the 1940 Act. We have elected, and intend to qualify annually thereafter, to be treated as a RIC under the Code. So long as we maintain our qualification as a RIC, we generally will not be subject to U.S. federal income or excise taxes on any ordinary income or capital gains that we timely distribute at least annually to our stockholders as dividends. As a result, any tax liability related to income earned and distributed by us represents obligations of our stockholders and will not be reflected in our consolidated financial statements.

We evaluate tax positions taken or expected to be taken in the course of preparing our financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reversed and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. As of June 30, 2024, the Company did not have any uncertain tax positions that met the recognition or measurement criteria, nor did the Company have any unrecognized tax benefits.

Our accounting policy on income taxes is critical because if we are unable to maintain our status as a RIC, we would be required to record a provision for U.S. federal income taxes which may be significant to our financial results.

### Recent Developments

On July 31, 2024, the Board declared a third quarter regular dividend of $0.45 per share payable on or around October 28, 2024 to shareholders of record as of September 30, 2024.

On July 31, 2024, the Board designated Stephen Potter, one of the Company’s current Independent Directors, as the lead Independent Director (the “Lead Independent Director”). The duties of the Lead Independent Director include, among other things, chairing executive sessions of the Independent Directors, acting as a liaison between the Independent Directors and the Chairman of the Board and between the Independent Directors and officers of the Company and the Adviser, facilitating communication among the Independent Directors and the Company’s counsel, reviewing and commenting on Board and committee meeting agendas and calling additional meetings of the Independent Directors as appropriate.

On July 31, 2024, based on the recommendation of the Compensation Committee of the Board, the Board approved the following changes to the compensation of the Independent Directors, effective as of January 1, 2025: (a) increase the annual retainer from $100,000 to $120,000; (b) increase the annual retainer payable to the Chair of the Audit Committee of the Board from $10,000 to $12,000; and (c) pay an annual retainer to the Lead Independent Director of $12,000.

## Market risk

As filed, 5,648 characters.

Uncertainty with respect to, among other things, elevated interest rates, inflationary pressures, the ongoing conflict between Russia and Ukraine, the ongoing war in the Middle East, and the failure of major financial institutions introduced significant volatility in the financial markets, and the effects of this volatility has materially impacted and could continue to materially impact our market risks, including those listed below.

### Valuation Risk

We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies. Most of our investments do not have a readily available market price, and we value these investments at fair value as determined in good faith by the Adviser, as the Valuation Designee, in accordance with our valuation policy subject to the oversight of the Board and, based on, among other things, the input of the independent third-party valuation firms engaged by the Valuation Designee. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

### Interest Rate Risk

We are subject to interest rate risk. Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing internals between our assets and liabilities and the effect that interest rates may have on our cash flows. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. Our net investment income is also affected by fluctuations in various interest rates, including the replacement of LIBOR with alternate rates and prime rates, to the extent our debt investments include floating interest rates. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

Between March 2022 and July 2023, the Federal Reserve rapidly raised its benchmark interest rate, bringing it to the 5.25% to 5.50% range. Although the Federal Reserve has left its benchmark rate steady since July 2023 and recently has indicated a bias in favor of eventually cutting its benchmark interest rate, it also has indicated that additional rate increases in the future may be necessary to mitigate inflationary pressures, and there can be no assurance that the Federal Reserve will not make upwards adjustments to the federal funds rate in the future. In a high interest rate environment, our cost of funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio. It is possible that the Federal Reserve's tightening cycle could result the United States into a recession, which would likely decrease interest rates. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in base rates, such as SOFR or other alternate rates, are not offset by corresponding increases in the spread over such base rate that we earn on any portfolio investments, a decrease in our operating expenses, or a decrease in the interest rate associated with our borrowings.

As of June 30, 2024, on a fair value basis, approximately 5.24% of our debt investments bear interest at a fixed rate and approximately 94.76% of our debt investments bear interest at a floating rate. As of June 30, 2024, 98.01% of our floating rate debt investments are subject to interest rate floors. Our credit facilities along with our debt issued in our collateralized loan obligations are also subject to floating interest rates and are currently paid based on floating SOFR rates.

The following table estimates the potential changes in net cash flow generated from interest income and expenses, should interest rates increase or decrease by 100, 200 or 300 basis points. Interest income is calculated as revenue from interest generated from our portfolio of investments held on June 30, 2024. Interest expense is calculated based on the terms of the credit facilities and the collateralized loan obligations using the outstanding balance as of June 30, 2024. Interest expense on the credit facilities and the debt issued in our collateralized loan obligations is calculated using the interest rate as of June 30, 2024, adjusted for the impact of hypothetical changes in rates, as shown below. The base interest rate case assumes the rates on our portfolio investments remain unchanged from the actual effective interest rates as of June 30, 2024.

Actual results could differ significantly from those estimated in the table (dollars amounts in thousands).

| Changes in Interest Rates | Interest Income | Interest Expense | Net Income |
| --- | ---: | ---: | ---: |
| -300 Basis Points | $(28,094) | $(15,389) | $(12,705) |
| -200 Basis Points | $(18,730) | $(10,259) | $(8,471) |
| -100 Basis Points | $(9,365) | $(5,130) | $(4,235) |
| +100 Basis Points | $9,365 | $5,130 | $4,235 |
| +200 Basis Points | $18,730 | $10,259 | $8,471 |
| +300 Basis Points | $28,094 | $15,389 | $12,705 |

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## Controls and procedures

As filed, 1,845 characters.

### Evaluation of Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on that evaluation, we, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, 2024 and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

### Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 402 characters.

There have been no material changes to the risk factors previously disclosed under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023. For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on February 27, 2024, which is accessible on the SEC’s website at sec.gov.

Filed Aug 7, 2024.
Source: SEC EDGAR, the filing index for accession 0001628280-24-035331. Last ingested by Listed: Oct 24, 2026, 15:15 ET. No prices; not investment advice.