Nuveen Churchill Direct Lending(NCDL) - 2024 Q4 - Annual Report

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].