Nuveen Churchill Direct Lending(NCDL) - 2024 Q3 - Quarterly Report

Financial Performance - The company reported new gross commitments at par of $225.612 million for the three months ended September 30, 2024, compared to$216.710 million for the same period in 2023, reflecting an increase of approximately 4.1%[247] - Net investments funded were $203.159 million for the three months ended September 30, 2024, up from$150.866 million in the prior year, representing a growth of about 34.7%[247] - Total investment income for the three months ended September 30, 2024, increased to $60.3 million, up from$41.7 million for the same period in 2023, representing a growth of 44.5%[267] - Net investment income for the three months ended September 30, 2024, was $31.5 million, compared to$21.7 million for the same period in 2023, an increase of 45.0%[268] - The net realized gain on investments for the three months ended September 30, 2024, was $1.1 million, compared to a net realized loss of$(13.1) million for the same period in 2023[277] - The net change in unrealized gains for the three months ended September 30, 2024, was $4.1 million, attributed to market spread tightening and positive credit performance[278] Investment Portfolio - The portfolio companies increased from 161 at the beginning of the period to 202 by the end of the period, indicating a growth of 25.5$2,075,365, with first-lien debt at amortized cost of $1,855,467 and fair value of$1,843,607[251] - The size of the investment portfolio increased to $2.1 billion as of September 30, 2024, compared to$1.5 billion as of September 30, 2023, reflecting a growth of 40%[270] - The average portfolio company investment was $10,274 as of September 30, 2024, compared to$10,133 at the end of 2023[251] - The healthcare and pharmaceuticals sector represented 14.18% of the portfolio as of September 30, 2024, up from 12.72% at the end of 2023[253] Debt and Financing - The weighted average annual interest rate on new debt investments at par was 9.63% for the three months ended September 30, 2024, down from 12.07% in the same period of 2023[247] - The weighted average yield on debt and income-producing investments at cost decreased from 11.72% to 10.86% from December 31, 2023 to September 30, 2024[254] - The percentage of debt investments bearing a floating rate was 94.25% as of September 30, 2024, compared to 94.61% as of December 31, 2023[254] - The company’s subordinated debt as of September 30, 2024, included second lien term loans of $67,947 and mezzanine debt of$99,925[250] - Total debt obligations as of September 30, 2024, amount to $1,101,964, with$217,500 due in 1 to 3 years, $112,750 due in 3 to 5 years, and$771,714 due in more than 5 years[342] Liquidity and Capital Structure - The company had $130.0 million available under the Wells Fargo Financing Facility and$137.3 million under the SMBC Corporate Revolver as of September 30, 2024, ensuring sufficient liquidity for operations[282] - The company provided $311.1 million from financing activities during the nine months ended September 30, 2024, primarily from common share issuances and secured borrowings[283] - The company raised$99.3 million from its IPO on January 29, 2024, by issuing 5,500,000 shares at a price of $18.05 per share[284] - The company has authorized a total of 500,000,000 shares of common stock, with all shares initially designated as common stock[284] - The company has entered into a share repurchase plan allowing for the purchase of up to$99.3 million of its common stock at prices below its net asset value (NAV) per share[297] Risk Management - Approximately 83% of the company's debt investments have financial covenants, indicating a strong focus on risk management[248] - The company has a weighted average interest coverage ratio of 2.1x for its first-lien loans, suggesting a healthy ability to meet interest obligations[248] - The company is focusing on investing in defensive businesses with low cyclicality and strong free cash flow generation[257] - The ongoing geopolitical conflicts and financial institution failures have introduced significant volatility in the financial markets, impacting market risks[371] - The Company is exposed to valuation risk due to investments in illiquid debt and equity securities of private companies[372] Interest Rate Sensitivity - Interest income and expenses are sensitive to fluctuations in interest rates, impacting net investment income significantly[373] - The Company estimates that a 300 basis point increase in interest rates could result in a net income increase of $18,343,000[378] - A 300 basis point decrease in interest rates could lead to a net income decrease of$18,326,000[378] - Approximately 5.75% of the Company's debt investments bear interest at a fixed rate, while 94.25% bear interest at a floating rate as of September 30, 2024[375] - 99.59% of the floating rate debt investments are subject to interest rate floors as of September 30, 2024[375] Regulatory and Compliance - The company has elected to be treated as a RIC under the Code, which allows it to avoid U.S. federal income taxes on distributed income[364] - The company must distribute at least 90% of its investment company net taxable income to qualify for RIC tax treatment[308] - The SEC granted an exemptive order allowing the Company to participate in negotiated co-investment transactions with certain affiliates[346] - Shareholders are subject to transfer restrictions for 365 days following the IPO prospectus date, with varying limitations thereafter[303] - The Board declared a fourth quarter regular dividend of $0.45 per share, payable on or around January 28, 2025[369]