Nuveen Churchill Direct Lending Corp. (NCDL) came out with quarterly earnings of $0.53 per share, missing the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -7.02%. A quarter ago, it was expected that this company would post earnings of $0.58 per share when it actually produced earnings of $0.56, delivering a surprise of -3.45%.Over the last four ...

Nuveen Churchill Direct Lending (NYSE: NCDL ) is not as recognizable as the likes of Blackstone Secured Lending Fund ( BXSL ) or Morgan Stanley Direct Lending Fund ( MSDL ), but it's also one of the BDCs worthWelcome to Cash Flow Venue, where dividends do the heavy lifting! Blending my financial chops with the timeless wisdom of value investing (and love for steady income), I’ve built a rock-solid pillar in my financial foundation through dividend investing. I believe it’s one of the most accessible paths t ...

Core Insights - Nuveen Churchill Direct Lending Corp (NYSE: NCDL) reported a regular dividend yield of 10.45% and has a net investment yield [1] Group 1 - The article discusses the Q4 results for NCDL and maintains a Buy rating for the stock [1] - The company is highlighted for its performance in the Business Development Company (BDC) sector [1] - The article suggests exploring various investment tools for navigating BDC, Closed-End Funds (CEF), Open-End Funds (OEF), preferred stocks, and baby bonds [1]

Nuveen Churchill Direct Lending Corp. (NYSE: NCDL ) is one of six BDCs, which I currently own in my portfolio together with such high-quality names as Morgan Stanley Direct Lending Fund ( MSDLRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other polic ...

Financial Data and Key Metrics Changes - For the full year 2024, the company generated a return on equity (ROE) of 12.4% on net investment income and paid total distributions of $2.10 per share, resulting in an attractive yield of 11.6% based on year-end net asset value [8][9] - Net investment income for Q4 2024 was $0.56 per share, which fully covered the regular distribution and previously declared special dividend totaling $0.55 per share [10][29] - The net asset value per share increased to $18.18 at December 31, 2024, up from $18.15 at the end of Q3 2024 [12][33] Business Line Data and Key Metrics Changes - Investment activity during Q4 was primarily focused on senior secured first lien loans, with new originations totaling $163 million for the quarter [11][18] - The investment portfolio had a fair value of $2.08 billion at the end of Q4, compared to $2.05 billion at the end of Q3 [34] - First lien debt represented over 90% of the fair value of the overall portfolio, maintaining a steady focus on traditional middle market senior loans [19][41] Market Data and Key Metrics Changes - The company noted that credit quality remains strong, with only 1 portfolio company on nonaccrual status, representing 0.1% of the total portfolio at fair value [9][24] - The direct lending market accounted for approximately 90% of middle market new leveraged buyout (LBO) volume, indicating a strong position in the core middle market [14][70] Company Strategy and Development Direction - The company aims to continue focusing on the core middle market direct lending space, leveraging long-standing relationships and extensive commitments to identify attractive investment opportunities [12][26] - The company plans to optimize its capital structure and balance sheet, having issued $300 million of unsecured notes in January 2025 [9][47] - The strategy includes a supplemental dividend program to distribute excess earnings while retaining capital to grow net asset value [31][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning as a leader in the core middle market direct lending space, despite competitive dynamics in the private credit market [12][13] - The economic environment is viewed as healthy and resilient, with expectations of increased M&A activity in 2025 [15][26] - Management is actively monitoring potential impacts from policy changes but does not expect a material impact on performance due to the diversification of the portfolio [16][26] Other Important Information - The company had a record year of investment activity in 2024, investing over $13 billion across approximately 400 transactions [18][34] - The company’s share repurchase program has utilized approximately $57 million, with $42 million remaining [51][52] - The final lockup release for pre-IPO shareholders occurred on January 24, 2025, increasing the number of shares available for trading [52] Q&A Session Summary Question: Details on supplemental dividends after the last $0.10 dividend - Management indicated that approximately 50% of excess earnings would form the basis of the supplemental dividend, focusing on distributing most earnings while retaining some capital for reinvestment [58] Question: Expected repricing impact on overall yield - Management estimated that around 70-75% of the portfolio has already repriced, with limited further repricing expected [62][64] Question: Anticipated changes in PIK income ratio for 2025 - Management expects PIK income to remain in the low single-digit percentage range, primarily driven by junior capital positions [66][69] Question: Sustainability of direct lenders' dominance in the middle market - Management believes direct lenders will continue to dominate the core middle market due to their ability to deliver full financing commitments quickly and maintain deep relationships [72][74]

Nuveen Churchill Direct Lending Corp. (NCDL) came out with quarterly earnings of $0.56 per share, missing the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.66 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.45%. A quarter ago, it was expected that this company would post earnings of $0.57 per share when it actually produced earnings of $0.58, delivering a surprise of 1.75%.Over the last four q ...

Nuveen Churchill Direct Lending Corp. Announces Full Year and Fourth Quarter 2024 Results Reports Fourth Quarter Net Investment Income of $0.56 per Share Declares First Quarter Regular Distribution of $0.45 per Share NEW YORK, February 27, 2025 - Nuveen Churchill Direct Lending Corp. (NYSE: NCDL) ("NCDL" or the "Company"), a business development company externally managed by its investment adviser, Churchill DLC Advisor LLC (the "Adviser"), and by its sub- adviser, Churchill Asset Management LLC ("Churchill ...

Financing and Capital Structure - The company has raised approximately $906.4 million from private offerings of its common stock since March 2020[85]. - The company currently has two special purpose vehicle asset credit facilities and a revolving credit facility, with plans to potentially enter additional credit facilities in the future[77]. - The company expects interest expense to increase as leverage is increased over time, subject to regulatory limits[76]. - The company may not issue common stock below NAV per share without shareholder approval, which was granted until December 15, 2024[88]. - The company must maintain at least 70% of its total assets in qualifying assets as defined by the 1940 Act[91]. - The company must maintain an asset coverage ratio of at least 150% for issuing senior securities, which includes total assets less total liabilities divided by total indebtedness represented by senior securities plus preferred stock[96]. - The company is permitted to co-invest with affiliates under certain conditions, which enhances investment opportunities and diversification[99]. - The SEC granted the company a permanent amendment to allow follow-on investments in existing portfolio companies with certain private fund affiliates[100]. Regulatory Compliance - The company is regulated as a Business Development Company (BDC) under the 1940 Act, which imposes certain restrictions on transactions and requires a majority of independent directors[86]. - The company is subject to restrictions on the issuance of warrants, options, or rights under the 1940 Act, with a limit that the amount of voting securities resulting from such exercises cannot exceed 25% of the total outstanding shares[95]. - The company has adopted a code of ethics that restricts personal securities transactions by its officers and employees, ensuring compliance with federal securities laws[97]. - The company is required to provide annual reports containing audited financial statements and comply with periodic reporting under the Exchange Act[115]. - To qualify as a Regulated Investment Company (RIC), the company must distribute at least 90% of its investment company taxable income to shareholders[118]. - The company will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless it meets specific distribution requirements[120]. - The company must derive at least 90% of gross income from specific sources to maintain RIC status[126]. - The company must diversify its holdings to meet regulatory requirements, limiting investments in any single issuer to no more than 25% of total assets[126]. Investment Strategy and Risk Management - The company assesses material environmental, social, and governance (ESG) factors as part of its investment process to create and protect value[79]. - The company utilizes a proprietary ESG ratings template to evaluate potential investments and monitor portfolio companies post-investment[81]. - The company operates in a competitive market for credit investments, facing competition from larger firms with greater resources[83]. - The company does not have any employees and relies on the expertise of senior investment professionals from its sub-adviser, Churchill[84]. - The company may need to sell assets or raise additional capital to satisfy the Annual Distribution Requirement, which could be disadvantageous[122]. - The company may experience valuation risk due to investments in illiquid debt and equity securities of private companies[532]. - The company is subject to interest rate risk, with potential adverse effects on net investment income due to fluctuations in interest rates[533]. - The Federal Reserve's recent rate cuts may impact the company's cost of funds and net investment income[534]. - A hypothetical increase of 300 basis points in interest rates could result in a net income increase of $25,474,000[538]. - As of December 31, 2024, approximately 5.32% of the company's debt investments bear interest at a fixed rate, while 94.68% bear interest at a floating rate[535]. - The company has a significant portion of its floating rate debt investments (99.09%) subject to interest rate floors[535]. Taxation and Financial Implications - If the company fails to qualify as a RIC, it would be subject to U.S. federal income tax at corporate rates on all taxable income[128].

Core Insights - The article discusses the Q3 results for Nuveen Churchill Direct Lending Corp (NYSE: NCDL), which recently went public alongside other private BDCs earlier in the year [1]. Group 1: Company Overview - Nuveen Churchill Direct Lending Corp is a Business Development Company (BDC) that focuses on generating income through various security types, including CEFs, ETFs, mutual funds, and individual preferred stocks [1]. Group 2: Analyst Background - ADS Analytics, the team behind the analysis, consists of experienced analysts from leading global investment banks, specializing in research and trading [1].

Financial Data and Key Metrics Changes - The company reported net investment income of $0.58 per share for Q3 2024, fully covering the regular quarterly distribution of $0.45 per share and a special distribution of $0.10 per share [7][32] - Total GAAP net income for the quarter was $0.67 per share, up from $0.37 per share in the previous quarter, positively impacted by net realized and unrealized gains [36] - The net asset value per share increased to $18.15 from $18.03 at the end of Q2 2024 [10][38] Business Line Data and Key Metrics Changes - Investment activity during Q3 was approximately $226 million, primarily focused on senior secured first lien loans [8][17] - The investment portfolio's fair value increased to $2.05 billion from $1.99 billion at the end of Q2 2024 [39] - First lien debt represented approximately 90% of the fair value of the overall portfolio, maintaining a steady percentage [18][46] Market Data and Key Metrics Changes - The company observed an increase in competitive dynamics in the private credit market, leading to additional spread compression, albeit at a slower pace than in the previous quarter [12] - The weighted average yield on debt and income-producing investments at cost declined to 10.9% from 11.3% at the end of Q2 2024 [46] - The watch list increased to 5.6% of the overall portfolio fair value, reflecting proactive portfolio management [49] Company Strategy and Development Direction - The company is focused on rotating out of higher-priced, lower-spread upper middle market positions into traditional middle market opportunities, which offer wider spreads and more attractive terms [9][18] - The strategy emphasizes maintaining a diversified portfolio across various metrics, including sponsor relationships and industry sectors [27] - The company aims to capitalize on increased M&A activity expected as the interest rate reduction cycle begins [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the U.S. economy's resilience and steady revenue growth from portfolio companies, despite elevated interest rates [15] - The company anticipates continued strong performance into 2025, driven by a robust pipeline of investment opportunities [26] - Management highlighted the importance of maintaining strong relationships with private equity sponsors to drive deal flow [62] Other Important Information - The company has a share repurchase program, utilizing approximately $14 million of the $100 million allocated, with plans to continue buying back shares as trading occurs at a discount to NAV [52][85] - The third lockup release occurred on October 21, increasing the number of shares available for trading significantly [53] Q&A Session Summary Question: Is there any white space across the broader Churchill platform to further penetrate the market? - Management noted a 30% increase in firms where new deals are being done and ongoing efforts to expand relationships with new private equity LPs [60][62] Question: What is the current deal flow and tone with sponsors? - Management reported a continued increase in deal activity, with Q3 showing a 60% year-over-year increase in senior lending activity [65] Question: How was amendment activity in the quarter? - There was no significant increase in amendment activity, with stable yields on new floating rate investments [68] Question: What is the size of the upper middle market portfolio being rotated to the core middle market strategy? - The upper middle market portion is approximately $200 million, which is about 10% of the total portfolio [74] Question: Can you describe the increase in the watch list investments this quarter? - The increase in the watch list was due to proactive portfolio management, with no new non-accruals during the quarter [80]