Oaktree Strategic Credit Fund
08/13/2025 | Press release | Distributed by Public on 08/13/2025 04:01
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the notes thereto included elsewhere in this quarterly report on Form 10-Q. All amounts are shown in thousands, except share and per share amounts, percentages and as otherwise indicated.
Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements because they relate to future events or the future performance or financial condition of Oaktree Strategic Credit Fund (the "Company", which may also be referred to as "we," "us" or "our"). The forward-looking statements contained in this quarterly report on Form 10-Q may include statements as to:
•our future operating results and distribution projections;
•the ability of Oaktree Fund Advisors, LLC (our "Adviser" and, collectively with its affiliates, "Oaktree") to implement its future plans with respect to our business and to achieve our investment objective;
•the ability of Oaktree to attract and retain highly talented professionals;
•our business prospects and the prospects of our portfolio companies;
•the impact of the investments that we expect to make;
•the ability of our portfolio companies to achieve their objectives;
•our expected financings and investments and additional leverage we may seek to incur in the future;
•the adequacy of our cash resources and working capital;
•the timing of cash flows, if any, from the operations of our portfolio companies; and
•the impact of current global economic conditions, including those caused by inflation, an elevated (but decreasing) interest rate environment and geopolitical events on all of the foregoing.
In addition, words such as "anticipate," "believe," "expect," "seek," "plan," "should," "estimate," "project" and "intend" indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "Item 1A. Risk Factors" in our annual report on Form 10-K for the year ended September 30, 2024 and elsewhere in this quarterly report on Form 10-Q.
Other factors that could cause actual results to differ materially include:
•changes or potential disruptions in our operations, the economy, financial markets or political environment, including
those caused by tariffs and trade disputes with other countries, inflation and an elevated interest rate environment;
•risks associated with possible disruption in our operations, the operations of our portfolio companies or the economy generally due to terrorism, war or other geopolitical conflict, natural disasters or pandemics;
•future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies ("BDCs") or regulated investment companies ("RICs"); and
•other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.
We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Business Overview
We are a Delaware statutory trust formed on November 24, 2021 and are structured as a non-diversified, closed-end management investment company. On February 3, 2022, we elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the "Investment Company Act"). We have elected to be treated, and intend to qualify annually to be treated as a RIC under the Internal Revenue Code of 1986, as amended (the "Code"). Effective as of February 3, 2022, we are externally managed by the Adviser pursuant to an investment advisory agreement (as amended and restated, the "Investment Advisory Agreement"), between us and the Adviser. The Adviser is a subsidiary of Brookfield Oaktree Holdings, LLC ("BOH") (formerly known as Oaktree Capital Group, LLC). In 2019, Brookfield Asset Management Inc. ("Brookfield") acquired a majority economic interest in BOH. BOH operates as an independent business within Brookfield, with its own product offerings and investment, marketing and support teams.
Our investment objective is to generate stable current income and long-term capital appreciation. We seek to meet our investment objective by primarily investing in private debt opportunities, including first lien loans (which may include "unitranche" loans and "last out" first lien loans, which are loans that are second priority behind "first out" first lien loans), second lien loans, unsecured and mezzanine loans, bonds and preferred equity, as well as certain equity co-investments.
We have the authority to issue an unlimited number of common shares of beneficial interest, par value $0.01 per share ("Common Shares"). We are offering on a best efforts, continuous basis up to $5.0 billion aggregate offering price of Common Shares (the "Maximum Offering Amount") pursuant to an offering registered with the SEC. We are authorized to offer to sell any combination of four classes of Common Shares: Class T shares, Class S shares, Class D shares and Class I shares with a dollar value up to the Maximum Offering Amount. The share classes have different ongoing distribution and/or shareholder servicing fees.
We accepted purchase orders and held investors' funds in an interest-bearing escrow account until we received purchase orders for Common Shares of at least $100.0 million, excluding subscriptions by Oaktree Fund GP I, L.P. in respect of the Class I shares purchased by Oaktree Fund GP I, L.P. prior to March 31, 2022.
As of June 1, 2022, we had satisfied the minimum offering requirement and our board of trustees (the "Board of Trustees" or the "Board") had authorized the release of proceeds from escrow. As of June 30, 2025, we have issued and sold 133,406,551Class I shares for an aggregate purchase price of $3,142.3 millionof which $100.0 millionwas purchased by an affiliate of the Adviser, 53,595,659Class S shares for an aggregate purchase price of $1,260.5 million, 155,752 Class D shares for an aggregate purchase price of $3.7 million and zero Class T shares.
Business Environment and Developments
Global financial markets have experienced an increase in volatility over the last few years amid higher inflation, elevated interest rates, tariffs and concern over a potential slowdown in economic activity. As inflation pressures have eased in recent months, the Federal Reserve has relaxed its monetary policies and cut the federal funds rate to support the broader economy. However, various macroeconomic headwinds remain, including ongoing conflict in the Middle East, signs of an economic slowdown outside the United States and threats of tariffs and a trade war. These uncertainties can ultimately impact the overall supply and demand of the market through changing spreads, deal terms and structures and equity purchase price multiples.
We are unable to predict the full effects of these macroeconomic events or how they might evolve. We continue to closely monitor the impact these events have on our business, industry and portfolio companies and will provide constructive solutions where necessary.
Against this backdrop, we believe attractive risk-adjusted returns can be achieved by making loans to companies in the middle market. Given the breadth of the investment platform and decades of credit investing experience of Oaktree and its affiliates, we believe that we have the resources and experience to source, diligence and structure investments in these companies.
Critical Accounting Estimates
Fair Value Measurements
Our Adviser, as the valuation designee of our Board pursuant to Rule 2a-5 under the Investment Company Act, determines the fair value of our assets on at least a quarterly basis in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"), Topic 820, Fair Value Measurements and Disclosures ("ASC 820"). ASC 820 defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices over entity-specific inputs. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments' complexity.
Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:
•Level 1 - Unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.
•Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.
•Level 3 - Unobservable inputs that reflect the Adviser's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
If inputs used to measure fair value fall into different levels of the fair value hierarchy, an investment's level is based on the lowest level of input that is significant to the fair value measurement. The Adviser's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. This includes investment securities that are valued using "bid" and "ask" prices obtained from independent third party pricing services or directly from brokers. These investments may be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.
Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, the Adviser obtains and analyzes readily available market quotations provided by pricing vendors and brokers for all of our investments for which quotations are available. In determining the fair value of a particular investment, pricing vendors and brokers use observable market information, including both binding and non-binding indicative quotations.
The Adviser seeks to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If the Adviser is unable to obtain two quotes from pricing vendors, or if the prices obtained from pricing vendors are not within the Adviser's set threshold, the Adviser seeks to obtain a quote directly from a broker making a market for the asset. The Adviser evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are
reasonably estimated. Generally, the Adviser does not adjust any of the prices received from these sources. The Adviser also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, the Adviser performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the valuation process.
If the quotations obtained from pricing vendors or brokers are determined not to be reliable or are not readily available, the Adviser values such investments using any of three different valuation techniques. The first valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value ("EV") of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, (ii) whether there is credit impairment for debt investments and (iii) the value for debt investments that we are deemed to control under the Investment Company Act. To estimate the EV of a portfolio company, the Adviser analyzes various factors, including the portfolio company's historical and projected financial results, macroeconomic impacts on the company and competitive dynamics in the company's industry. The Adviser also utilizes some or all of the following information based on the individual circumstances of the portfolio company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase prices as a multiple of their earnings or cash flow, (iv) the portfolio company's ability to meet its forecasts and its business prospects, (v) a discounted cash flow analysis, (vi) estimated liquidation or collateral value of the portfolio company's assets and (vii) offers from third parties to buy the portfolio company. The Adviser may probability weight potential sale outcomes with respect to a portfolio company when uncertainty exists as of the valuation date. The third valuation technique is a market yield technique, which is typically performed for non-credit impaired debt investments. In the market yield technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk, and the Adviser considers the current contractual interest rate, the capital structure and other terms of the investment relative to our risk and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by us are substantially illiquid with no active transaction market, the Adviser depends on primary market data, including newly funded transactions and industry specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.
The Adviser estimates the fair value of certain privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.
The fair value of our investments as of June 30, 2025 and September 30, 2024 was determined by the Adviser, as the Board's valuation designee. We have and will continue to engage independent valuation firms each quarter to provide assistance regarding the determination of the fair value of a portion of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment.
Certain factors that may be considered in determining the fair value of our investments include the nature and realizable value of any collateral, the portfolio company's earnings and its ability to make payments on its indebtedness, the markets in which the portfolio company does business, comparison to comparable publicly-traded companies, discounted cash flow and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, Oaktree's determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Due to these uncertainties, Oaktree's fair value determinations may cause our net asset value on a given date to materially understate or overstate the value that we may ultimately realize upon the sale of one or more of our investments.
When we determine our net asset value as of the last day of a month that is not also the last day of a calendar quarter, we update the value of securities with reliable market quotations to the most recent market quotation. For securities without reliable market quotations, pursuant to our valuation policy, the Adviser's valuation team will generally value such assets at the most recent quarterly valuation or, in the case of securities acquired after such date, cost, unless, in either case, the Adviser determines that since the most recent quarter end or the date of acquisition for securities acquired after quarter end, as the case may be, a significant observable change has occurred with respect to the investment (which determination may be as a result of a material event at a portfolio company, material change in market spreads, secondary market transaction in the securities of an investment or otherwise). If the Adviser determines such a change has occurred with respect to one or more investments, the Adviser will determine whether to update the value for each relevant investment using a range of values from an independent valuation firm, where applicable, in accordance with our valuation policy. Additionally, the Adviser may otherwise determine to update the most recent quarter end valuation of an investment without reliable market quotations that the Adviser considers to be material to us using a range of values from an independent valuation firm.
As of June 30, 2025, we held $6,362.9 million of investments at fair value, up from $4,576.2 million held at September 30, 2024, primarily driven by new originations funded primarily by cash proceeds from our continuous offering and an increase in borrowings under our credit facilities.
Revenue Recognition
We generate revenues in the form of interest income on debt investments and, to a lesser extent, capital gains and distributions, if any, on equity securities that we may acquire in portfolio companies. Some of our investments provide for deferred interest payments or payment-in-kind ("PIK") interest income. The principal amount of the debt investments and any accrued but unpaid interest generally becomes due at the maturity date.
Interest Income
Interest income, adjusted for accretion of original issue discount ("OID"), is recorded on an accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management's judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio company, in management's judgment, is likely to continue timely payment of its remaining obligations. As of June 30, 2025, there was one investment on non-accrual status that represented 0.2% and 0.1% of total debt investments at cost and fair value, respectively. As of September 30, 2024, there was one investment on non-accrual status that represented 0.1% and 0.1% of total debt investments at cost and fair value, respectively.
In connection with our investment in a portfolio company, we sometimes receive nominal cost equity that is valued as part of the negotiation process with the portfolio company. When we receive nominal cost equity, we allocate our cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.
PIK Interest Income
Our investments in debt securities may contain payment-in-kind ("PIK") interest provisions. PIK interest, which generally represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. We generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Our determination to cease accruing PIK interest is generally made well before our full write-down of a loan or debt security. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost bases of these investments in our consolidated financial statements including for purposes of computing the capital gains incentive fee payable
by us to the Adviser. To maintain our status as a RIC, certain income from PIK interest may be required to be distributed to our shareholders even though we have not yet collected the cash and may never do so.
Portfolio Composition
As of June 30, 2025, the fair value of our investment portfolio was $6,362.9 million and was composed of investments in 171 portfolio companies. As of September 30, 2024, the fair value of our investment portfolio was $4,576.2 million and was composed of investments in 180 portfolio companies.
As of June 30, 2025 and September 30, 2024, our investment portfolio consisted of the following:
| June 30, 2025 | September 30, 2024 | |||||||||||||
| Cost: | ||||||||||||||
| Senior Secured Debt | 90.37 | % | 89.12 | % | ||||||||||
| Subordinated Debt | 9.22 | % | 10.33 | % | ||||||||||
| Preferred Equity | 0.22 | % | 0.27 | % | ||||||||||
| Common Equity and Warrants | 0.19 | % | 0.28 | % | ||||||||||
| Total | 100.00 | % | 100.00 | % | ||||||||||
| June 30, 2025 | September 30, 2024 | |||||||||||||
| Fair Value: | ||||||||||||||
| Senior Secured Debt | 90.29 | % | 89.02 | % | ||||||||||
| Subordinated Debt | 9.21 | % | 10.40 | % | ||||||||||
| Preferred Equity | 0.29 | % | 0.31 | % | ||||||||||
| Common Equity and Warrants | 0.21 | % | 0.27 | % | ||||||||||
| Total | 100.00 | % | 100.00 | % | ||||||||||
The table below describes investments by industry composition based on fair value as a percentage of total investments:
| June 30, 2025 | September 30, 2024 | |||||||||||||
| Fair Value: | ||||||||||||||
| Application Software | 15.01 | % | 17.60 | % | ||||||||||
| Aerospace & Defense | 6.50 | % | 3.68 | % | ||||||||||
| Health Care Services | 4.72 | % | 4.38 | % | ||||||||||
| Pharmaceuticals | 4.69 | % | 2.78 | % | ||||||||||
| Systems Software | 4.02 | % | 4.70 | % | ||||||||||
| Interactive Media & Services | 4.00 | % | 3.73 | % | ||||||||||
| Diversified Support Services | 3.90 | % | 4.80 | % | ||||||||||
| Life Sciences Tools & Services | 3.80 | % | 0.98 | % | ||||||||||
| Health Care Equipment | 3.49 | % | 0.97 | % | ||||||||||
| Packaged Foods & Meats | 2.96 | % | 1.76 | % | ||||||||||
| Specialized Consumer Services | 2.79 | % | 1.19 | % | ||||||||||
| Specialized Finance | 2.70 | % | 1.28 | % | ||||||||||
| Diversified Financial Services | 2.64 | % | 3.56 | % | ||||||||||
| Education Services | 2.29 | % | 2.73 | % | ||||||||||
| Insurance Brokers | 2.21 | % | 2.48 | % | ||||||||||
| Building Products | 2.04 | % | - | % | ||||||||||
| Multi-Sector Holdings | 1.93 | % | 4.16 | % | ||||||||||
| Health Care Technology | 1.91 | % | 2.87 | % | ||||||||||
| Industrial Machinery & Supplies & Components | 1.56 | % | 2.29 | % | ||||||||||
| Wireless Telecommunication Services | 1.46 | % | 1.57 | % | ||||||||||
| Research & Consulting Services | 1.41 | % | 0.83 | % | ||||||||||
| Construction & Engineering | 1.37 | % | 1.55 | % | ||||||||||
| Communications Equipment | 1.30 | % | 1.93 | % | ||||||||||
| Other Specialty Retail | 1.27 | % | 1.92 | % | ||||||||||
| Electrical Components & Equipment | 1.25 | % | 1.82 | % | ||||||||||
| Construction Machinery & Heavy Transportation Equipment | 1.22 | % | 1.36 | % | ||||||||||
| Property & Casualty Insurance | 1.21 | % | 1.50 | % | ||||||||||
| Environmental & Facilities Services | 1.19 | % | 1.70 | % | ||||||||||
| Office Services & Supplies | 1.10 | % | 1.83 | % | ||||||||||
| Cable & Satellite | 1.08 | % | 0.46 | % | ||||||||||
| Real Estate Services | 0.92 | % | - | % | ||||||||||
| Soft Drinks & Non-alcoholic Beverages | 0.89 | % | - | % | ||||||||||
| Distributors | 0.88 | % | 0.64 | % | ||||||||||
| Asset Management & Custody Banks | 0.87 | % | 1.36 | % | ||||||||||
| Health Care Supplies | 0.86 | % | 1.49 | % | ||||||||||
| Diversified Chemicals | 0.79 | % | 0.35 | % | ||||||||||
| Financial Exchanges & Data | 0.75 | % | 1.04 | % | ||||||||||
| Movies & Entertainment | 0.72 | % | 0.87 | % | ||||||||||
| Footwear | 0.71 | % | - | % | ||||||||||
| Trading Companies & Distributors | 0.68 | % | 1.84 | % | ||||||||||
| Air Freight & Logistics | 0.65 | % | - | % | ||||||||||
| Food Distributors | 0.60 | % | 0.52 | % | ||||||||||
| Paper & Plastic Packaging Products & Materials | 0.59 | % | 1.24 | % | ||||||||||
| Commodity Chemicals | 0.49 | % | 0.70 | % | ||||||||||
| Gold | 0.46 | % | 0.65 | % | ||||||||||
| Alternative Carriers | 0.42 | % | - | % | ||||||||||
| Hotels, Resorts & Cruise Lines | 0.32 | % | 0.45 | % | ||||||||||
| Consumer Finance | 0.29 | % | 0.30 | % | ||||||||||
| Specialty Chemicals | 0.27 | % | - | % | ||||||||||
| Biotechnology | 0.19 | % | 0.27 | % | ||||||||||
| Metal, Glass & Plastic Containers | 0.19 | % | 0.55 | % | ||||||||||
| Health Care Distributors | 0.16 | % | 0.69 | % | ||||||||||
| Real Estate Development | 0.16 | % | 0.55 | % | ||||||||||
| Passenger Airlines | 0.12 | % | 0.26 | % | ||||||||||
| Electronic Components | - | % | 0.63 | % | ||||||||||
| Data Processing & Outsourced Services | - | % | 1.25 | % | ||||||||||
| Diversified Metals & Mining | - | % | 0.87 | % | ||||||||||
| Health Care Facilities | - | % | 0.56 | % | ||||||||||
| Advertising | - | % | 0.31 | % | ||||||||||
| Leisure Facilities | - | % | 0.20 | % | ||||||||||
| Total | 100.00 | % | 100.00 | % | ||||||||||
The geographic composition of our portfolio is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company's business. The table below describes investments by geographic composition at fair value as a percentage of total investments:
| June 30, 2025 | September 30, 2024 | |||||||||||||
| United States | 84.00 | % | 84.59 | % | ||||||||||
| United Kingdom | 5.86 | % | 6.24 | % | ||||||||||
| Germany | 2.93 | % | - | % | ||||||||||
| Sweden | 2.87 | % | 1.21 | % | ||||||||||
| Netherlands | 1.82 | % | 1.17 | % | ||||||||||
| Canada | 1.08 | % | 1.51 | % | ||||||||||
| Luxembourg | 0.87 | % | 1.95 | % | ||||||||||
| Costa Rica | 0.24 | % | 0.29 | % | ||||||||||
| Switzerland | 0.16 | % | 0.22 | % | ||||||||||
| Chile | 0.12 | % | 0.26 | % | ||||||||||
| Australia | 0.03 | % | 0.04 | % | ||||||||||
| France | 0.02 | % | 0.30 | % | ||||||||||
| Cayman Islands | - | % | 1.35 | % | ||||||||||
| India | - | % | 0.87 | % | ||||||||||
| Total | 100.00 | % | 100.00 | % | ||||||||||
See the Schedule of Investments as of June 30, 2025 and September 30, 2024, in our consolidated financial statements in Part I, Item 1, of this quarterly report on Form 10-Q, for more information on these investments, including a list of companies and the type, cost and fair value of investments.
Discussion and Analysis of Results and Operations
Results of Operations
The principal measure of our financial performance is the net increase (decrease) in net assets resulting from operations, which includes net investment income, net realized gains (losses) and net unrealized appreciation (depreciation). Net investment income is the difference between our income from interest income and fee income and net expenses. Net realized gains (losses) on investments is the difference between the proceeds received from dispositions of portfolio investments and their stated costs. Net unrealized appreciation (depreciation) is the net change in the fair value of our investment portfolio during the reporting period, including the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation.
Comparison of three and nine months ended June 30, 2025 and June 30, 2024
Investment Income
Total investment income for the three months ended June 30, 2025 was $155,532 and consisted of $155,152 of interest income primarily from portfolio investments (including $2,287 of PIK interest income) and $380 of fee income. Total investment income for the three months ended June 30, 2024 was $114,509 and consisted of $113,757 of interest income primarily from portfolio investments (including $2,369 of PIK interest income) and $752 of fee income. The increase in total investment income was primarily driven by the increase in the size of the investment portfolio, partially offset by lower reference rates.
Total investment income for the nine months ended June 30, 2025 was $441,769 and consisted of $438,076 of interest income primarily from portfolio investments (including $7,481 of PIK interest income) and $3,693 of fee income. Total investment income for the nine months ended June 30, 2024 was $283,159 and consisted of $280,756 of interest income primarily from portfolio investments (including $5,035 of PIK interest income) and $2,403 of fee income. The increase in total investment income was primarily driven by the increase in the size of the investment portfolio, partially offset by lower reference rates. Based on fair value as of June 30, 2025, the weighted average yield on our debt investments was 10.0%, down from 11.2% as of June 30, 2024.
Expenses
Net expenses for the three months ended June 30, 2025 were $72,445, up significantly from $52,867 for the three months ended June 30, 2024. The increase was mainly driven by a larger investment portfolio attributable to new capital raised pursuant to our continuous offering and an increase in borrowings under our credit facilities. Net expenses for the nine months ended June 30, 2025 were $208,544, up significantly from $131,785 for the nine months ended June 30, 2024. The increase was mainly driven by a larger investment portfolio attributable to new capital raised pursuant to our continuous offering and an increase in borrowings under our credit facilities. Net expenses consisted of the following:
| For the three months ended June 30, 2025 | For the three months ended June 30, 2024 | For the nine months ended June 30, 2025 | For the nine months ended June 30, 2024 | ||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Base management fee | $ | 13,345 | $ | 8,630 | $ | 35,278 | $ | 21,628 | |||||||||||||||
| Investment income incentive fee | 12,243 | 9,020 | 33,934 | 22,754 | |||||||||||||||||||
| Capital gains incentive fee | 100 | (427) | (2,372) | 2,033 | |||||||||||||||||||
| Professional fees | 1,496 | 699 | 3,926 | 2,147 | |||||||||||||||||||
| Class S and Class D distribution and shareholder servicing fees | 2,658 | 1,958 | 7,523 | 4,853 | |||||||||||||||||||
| Board of trustees fees | 116 | 116 | 348 | 323 | |||||||||||||||||||
| Organization expenses | 3 | 4 | 5 | 8 | |||||||||||||||||||
| Amortization of continuous offering costs | 589 | 261 | 1,508 | 694 | |||||||||||||||||||
| Interest expense | 40,474 | 31,703 | 124,871 | 73,623 | |||||||||||||||||||
| Administrator expense | 556 | 377 | 1,162 | 1,096 | |||||||||||||||||||
| General and administrative expenses | 865 | 526 | 2,361 | 1,581 | |||||||||||||||||||
| Total expenses | $ | 72,445 | $ | 52,867 | $ | 208,544 | $ | 130,740 | |||||||||||||||
| Expense reimbursements (support) | - | - | - | 1,045 | |||||||||||||||||||
| Net expenses | $ | 72,445 | $ | 52,867 | $ | 208,544 | $ | 131,785 | |||||||||||||||
For the nine months ended June 30, 2025 and 2024, the Adviser did not make any expense payments under the expense support agreement with the Adviser (the "Expense Support Agreement"). For the nine months ended June 30, 2025, we did not make any reimbursement payments to the Adviser. For the nine months ended June 30, 2024, the Company made reimbursement payments of $1,045 to the Adviser. As of June 30, 2025, there were no amounts due to the Adviser from us under the Expense Support Agreement.
For the three and nine months ended June 30, 2025, base management fees were $13,345 and $35,278, respectively. For the three and nine months ended June 30, 2024, base management fees were $8,630 and $21,628, respectively. For the three and nine months ended June 30, 2025, investment income incentive fees were $12,243 and $33,934, respectively. For the three and nine months ended June 30, 2024, investment income incentive fees were $9,020 and $22,754, respectively. See Note 9, Related Party Transactions, to our Consolidated Financial Statements, included in Part I, Item 1 of this Form 10-Q.
Net Unrealized Appreciation (Depreciation)
Net unrealized appreciation was $16,793 for the three months ended June 30, 2025. This consisted of $43.7 million of net unrealized appreciation on debt investments and $2.9 million of net unrealized appreciation on equity investments, partially offset by $17.0 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains) and $12.8 million of net unrealized depreciation of foreign currency forward contracts.
Net unrealized depreciation was $3,198 for the three months ended June 30, 2024 . This consisted of $6.0 million of net unrealized depreciation on debt investments, partially offset by $1.8 million of net unrealized appreciation of foreign currency forward contracts, $0.8 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $0.3 million of net unrealized appreciation on equity investments.
Net unrealized depreciation was $13,157 for the nine months ended June 30, 2025. This consisted of $34.5 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains) and $8.5 million of net unrealized depreciation of foreign currency forward contracts, partially offset by $24.6 million of net unrealized appreciation on debt investments and $5.3 million of net unrealized appreciation on equity investments
Net unrealized appreciation was $13,066 for the nine months ended June 30, 2024. This consisted of $13.0 million of net unrealized appreciation on debt investments and $1.4 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses), partially offset by $0.8 million of net unrealized depreciation on equity investments and $0.5 million of net unrealized depreciation of foreign currency forward contracts.
Net Realized Gains (Losses)
Net realized losses were $15,991 and $5,774 for the three and nine months ended June 30, 2025, respectively, which was primarily driven by realized losses related to foreign currency forward contracts, partially offset by realized gains related to the exits of certain investments. Net realized losses were $59 for the three months ended June 30, 2024, which was primarily driven by realized losses related to the exits of certain investments, partially offset by realized gains related to foreign currency forward contracts. Net realized gains were $3,741 for the nine months ended June 30, 2024, which was primarily related to the exits of certain investments and foreign currency forward contracts.
Financial Condition, Liquidity and Capital Resources
We expect to generate cash from (1) the cash proceeds from our continuous offering, (2) cash flows from operations, including earnings on investments, as well as interest earned from the temporary investment of cash in cash-equivalents, U.S. high-quality debt investments that mature in one year or less, (3) borrowings from banks, including secured borrowings, unsecured debt offerings, and any other financing arrangements we may enter into in the future and (4) any future offerings of equity or debt securities.
Our primary use of cash is for (1) investments in portfolio companies and other investments, (2) the cost of operations (including our expenses, the Management Fee and the Incentive Fee), (3) debt service, repayment and other financing costs of our borrowings, (4) funding repurchases under our share repurchase program and (5) cash distributions to the shareholders.
For the nine months ended June 30, 2025, we experienced a net decrease in cash and cash equivalents of $52.9 million. During that period, $1,603.4 million of cash was used in operating activities, primarily consisting of cash used to fund new investments, partially offset by proceeds from the sales and repayments of investments. During the same period, cash provided by financing activities was $1,548.6 million, due primarily from $1,263.1 million of proceeds from the issuance of common shares and $543.9 million of net borrowings under the credit facilities, partially offset by $195.5 million of distributions paid to shareholders, $57.5 million of shares repurchases paid and $5.4 million of deferred financing and offering costs paid.
For the nine months ended June 30, 2024, we experienced a net increase in cash and cash equivalents of $274.0 million. During that period, $2,078.3 million of cash was used in operating activities, primarily consisting of cash used to fund new investments, partially offset by proceeds from the sales and repayments of investments. During the same period, cash provided by financing activities was $2,353.4 million, due primarily from $1,343.7 million of proceeds from the issuance of common shares, $815.0 million of net borrowings under the credit facilities and $348.2 million of proceeds from the issuance of unsecured notes, partially offset by $113.9 million of distributions paid to shareholders, $23.9 million of shares repurchases paid and $15.6 million of deferred financing and offering costs paid.
As of June 30, 2025, we had $471.3 million of cash and cash equivalents (including restricted cash of $48.1 million), portfolio investments (at fair value) of $6,362.9 million, $40.4 million of interest receivable, $1,096.1 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $33.2 million of net payables from unsettled transactions, $1,638.9 million of borrowings outstanding under our credit facilities and $754.8 million of unsecured notes payable (net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment).
As of September 30, 2024, we had $524.2 million of cash and cash equivalents (including restricted cash of $43.3 million), portfolio investments (at fair value) of $4,576.2 million, $34.5 million of interest receivable, $1,590.0 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $51.7 million of net payables from unsettled transactions, $1,095.0 million of borrowings outstanding under our credit facilities and $759.3 million of unsecured notes payable (net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment).
We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of June 30, 2025 and September 30, 2024, off-balance sheet arrangements consisted of $1,000,470 and $642,044, respectively, of unfunded commitments to provide debt financing to certain of our portfolio companies. As of June 30, 2025, of the $1,000,470 of unfunded commitments, approximately $986,193 can be drawn immediately with the remaining amount subject to certain milestones that must be met by portfolio companies or other restrictions. Such commitments are subject to the portfolio company's satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in our Consolidated Statements of Assets and Liabilities.
Contractual Obligations
|
Debt Outstanding as of September 30, 2024 |
Debt Outstanding as of June 30, 2025 |
Weighted average debt outstanding for the nine months ended June 30, 2025 |
Maximum debt outstanding for the nine months ended June 30, 2025 |
|||||||||||||||||||||||
| ING Credit Agreement | $ | 415,000 | $ | 630,000 | $ | 430,513 | $ | 730,000 | ||||||||||||||||||
| JPM SPV Facility | 230,000 | 375,000 | 340,330 | 375,000 | ||||||||||||||||||||||
| SMBC SPV Facility | 100,000 | 75,500 | 88,441 | 100,000 | ||||||||||||||||||||||
| CIBC SPV Facility | 225,000 | 245,000 | 230,421 | 245,000 | ||||||||||||||||||||||
| DBNY SPV Facility | 100,000 | 180,000 | 103,223 | 180,000 | ||||||||||||||||||||||
| MS SPV Facility | 25,000 | 133,400 | 84,262 | 133,400 | ||||||||||||||||||||||
| 2028 Unsecured Notes | 350,000 | 350,000 | 350,000 | 350,000 | ||||||||||||||||||||||
| 2029 Unsecured Notes | 400,000 | 400,000 | 400,000 | 400,000 | ||||||||||||||||||||||
| Total debt | $ | 1,845,000 | $ | 2,388,900 | $ | 2,027,190 | ||||||||||||||||||||
| Payments due by period as of June 30, 2025 | ||||||||||||||||||||||||||
| Total | < 1 year | 1-3 years | 3-5 years | |||||||||||||||||||||||
| ING Credit Agreement | $ | 630,000 | $ | - | $ | - | $ | 630,000 | ||||||||||||||||||
| Interest due on ING Credit Agreement | 185,865 | 38,855 | 77,710 | 69,300 | ||||||||||||||||||||||
| JPM Loan and Security Agreement | 375,000 | - | - | 375,000 | ||||||||||||||||||||||
| Interest due on JPM Loan and Security Agreement | 99,799 | 25,491 | 50,982 | 23,326 | ||||||||||||||||||||||
| SMBC Loan and Security Agreement | 75,500 | - | - | 75,500 | ||||||||||||||||||||||
| Interest due on SMBC Loan and Security Agreement | 17,462 | 5,369 | 10,738 | 1,355 | ||||||||||||||||||||||
| CIBC Loan and Servicing Agreement | 245,000 | 245,000 | - | - | ||||||||||||||||||||||
| Interest due on CIBC Loan and Servicing Agreement | 6,000 | 6,000 | - | - | ||||||||||||||||||||||
| DBNY Loan Financing and Servicing Agreement | 180,000 | - | - | 180,000 | ||||||||||||||||||||||
| Interest due on DBNY Loan Financing and Servicing Agreement | 43,807 | 12,059 | 24,118 | 7,630 | ||||||||||||||||||||||
| MS Loan and Servicing Agreement | 133,400 | - | - | 133,400 | ||||||||||||||||||||||
| Interest due on MS Loan and Servicing Agreement | 32,410 | 8,868 | 17,736 | 5,806 | ||||||||||||||||||||||
| 2028 Unsecured Notes | 350,000 | - | - | 350,000 | ||||||||||||||||||||||
| Interest due on 2028 Unsecured Notes | 98,703 | 29,219 | 58,438 | 11,046 | ||||||||||||||||||||||
| 2029 Unsecured Notes | 400,000 | - | - | 400,000 | ||||||||||||||||||||||
| Interest due on 2029 Unsecured Notes | 111,691 | 27,471 | 54,942 | 29,278 | ||||||||||||||||||||||
| Total | $ | 2,984,637 | $ | 398,332 | $ | 294,664 | $ | 2,291,641 | ||||||||||||||||||
Equity Activity
As of June 30, 2025, we have issued and sold 133,406,551 Class I shares for an aggregate purchase price of $3,142.3 million, 53,595,659 Class S shares for an aggregate purchase price of $1,260.5 million and 155,752 Class D shares for an aggregate purchase price of $3.7 million. As of June 30, 2025, we have issued 3,038,058 Class I shares, 3,745,169 Class S and 5,816 Class D shares pursuant to our distribution reinvestment plan. As of June 30, 2025, we have not issued any Class T shares.
The following table summarizes transactions in Common Shares for the nine months ended June 30, 2025:
| Shares | Amount | ||||||||||
| Class I | |||||||||||
| Issuance of Common Shares in private and public offering | 43,490,558 | $ | 1,015,107 | ||||||||
| Share transfers between classes | 72,671 | 1,700 | |||||||||
| Issuance of Common Shares under distribution reinvestment plan | 1,419,706 | 33,561 | |||||||||
| Share repurchases, net of early repurchase deduction | (7,742,619) | (179,433) | |||||||||
| Net increase (decrease) | 37,240,316 | $ | 870,935 | ||||||||
| Class S | |||||||||||
| Issuance of Common Shares in public offering | 10,515,826 | $ | 246,239 | ||||||||
| Share transfers between classes | (72,671) | (1,700) | |||||||||
| Issuance of Common Shares under distribution reinvestment plan | 1,803,828 | 41,881 | |||||||||
| Share repurchases, net of early repurchase deduction | (1,648,328) | (38,332) | |||||||||
| Net increase (decrease) | 10,598,655 | $ | 248,088 | ||||||||
| Class D | |||||||||||
| Issuance of Common Shares in public offering | 76,766 | $ | 1,803 | ||||||||
| Issuance of Common Shares under distribution reinvestment plan | 3,510 | 81 | |||||||||
| Share repurchases, net of early repurchase deduction | (3,287) | (77) | |||||||||
| Net increase (decrease) | 76,989 | $ | 1,807 | ||||||||
| Total net increase (decrease) | 47,915,960 | $ | 1,120,830 | ||||||||
The following table summarizes transactions in Common Shares for the nine months ended June 30, 2024:
| Shares | Amount | ||||||||||
| Class I | |||||||||||
| Issuance of Common Shares in private and public offering | 37,416,704 | $ | 881,665 | ||||||||
| Share transfers between classes | 15,393 | 364 | |||||||||
| Issuance of Common Shares under distribution reinvestment plan | 878,249 | 20,839 | |||||||||
| Share repurchases, net of early repurchase deduction | (926,792) | (21,838) | |||||||||
| Net increase (decrease) | 37,383,554 | $ | 881,030 | ||||||||
| Class S | |||||||||||
| Issuance of Common Shares in public offering | 19,541,548 | $ | 460,437 | ||||||||
| Share transfers between classes | (15,393) | (364) | |||||||||
| Issuance of Common Shares under distribution reinvestment plan | 1,060,406 | 24,999 | |||||||||
| Share repurchases, net of early repurchase deduction | (570,987) | (13,449) | |||||||||
| Net increase (decrease) | 20,015,574 | $ | 471,623 | ||||||||
| Class D | |||||||||||
| Issuance of Common Shares in public offering | 66,226 | $ | 1,561 | ||||||||
| Issuance of Common Shares under distribution reinvestment plan | 1,310 | 31 | |||||||||
| Share repurchases, net of early repurchase deduction | - | - | |||||||||
| Net increase (decrease) | 67,536 | $ | 1,592 | ||||||||
| Total net increase (decrease) | 57,466,664 | $ | 1,354,245 | ||||||||
Net Asset Value per Share and Offering Price
We determine NAV per share for each class of shares as of the last calendar day of each month. Share issuances pursuant to accepted monthly subscriptions are effective the first calendar day of each month. Shares are issued and sold at a purchase price equivalent to the most recent NAV per share available for each share class, which will be the prior calendar day NAV per share (i.e. the prior month-end NAV). The following table summarizes each month-end NAV per share for Class I, Class S and Class D shares for the nine months ended June 30, 2025 and 2024. As of June 30, 2025, we have not issued any Class T shares.
| Class I Shares | Class S Shares | Class D Shares | |||||||||||||||
| October 31, 2024 | $ | 23.55 | $ | 23.55 | $ | 23.55 | |||||||||||
| November 30, 2024 | $ | 23.56 | $ | 23.56 | $ | 23.56 | |||||||||||
| December 31, 2024 | $ | 23.52 | $ | 23.52 | $ | 23.52 | |||||||||||
| January 31, 2025 | $ | 23.49 | $ | 23.49 | $ | 23.49 | |||||||||||
| February 28, 2025 | $ | 23.41 | $ | 23.41 | $ | 23.41 | |||||||||||
| March 31, 2025 | $ | 23.28 | $ | 23.28 | $ | 23.28 | |||||||||||
| April 30, 2025 | $ | 23.12 | $ | 23.12 | $ | 23.12 | |||||||||||
| May 31, 2025 | $ | 23.16 | $ | 23.16 | $ | 23.16 | |||||||||||
| June 30, 2025 | $ | 23.14 | $ | 23.14 | $ | 23.14 | |||||||||||
| Class I Shares | Class S Shares | Class D Shares | |||||||||||||||
| October 31, 2023 | $ | 23.39 | $ | 23.39 | $ | 23.39 | |||||||||||
| November 30, 2023 | $ | 23.51 | $ | 23.51 | $ | 23.51 | |||||||||||
| December 31, 2023 | $ | 23.62 | $ | 23.62 | $ | 23.62 | |||||||||||
| January 31, 2024 | $ | 23.60 | $ | 23.60 | $ | 23.60 | |||||||||||
| February 29, 2024 | $ | 23.58 | $ | 23.58 | $ | 23.58 | |||||||||||
| March 31, 2024 | $ | 23.61 | $ | 23.61 | $ | 23.61 | |||||||||||
| April 30, 2024 | $ | 23.59 | $ | 23.59 | $ | 23.59 | |||||||||||
| May 31, 2024 | $ | 23.59 | $ | 23.59 | $ | 23.59 | |||||||||||
| June 30, 2024 | $ | 23.53 | $ | 23.53 | $ | 23.53 | |||||||||||
Distributions
The Board authorizes and declares monthly distribution amounts per outstanding Common Share. The following table presents distributions that were declared during the nine months ended June 30, 2025:
| Class I | ||||||||||||||||||||||||||||||||
| Distribution | Date Declared | Record Date | Payment Date | Distribution Per Share | Distribution Amount | |||||||||||||||||||||||||||
| Monthly | October 24, 2024 | October 30, 2024 | November 26, 2024 | $ | 0.2000 | $ | 18,473 | |||||||||||||||||||||||||
| Monthly | November 26, 2024 | November 27, 2024 | December 27, 2024 | 0.2000 | 18,965 | |||||||||||||||||||||||||||
| Monthly | December 26, 2024 | December 27, 2024 | February 3, 2025 | 0.2000 | 19,552 | |||||||||||||||||||||||||||
| Monthly | January 28, 2025 | January 29, 2025 | February 26, 2025 | 0.2000 | 20,068 | |||||||||||||||||||||||||||
| Monthly | February 24, 2025 | February 26, 2025 | March 27, 2025 | 0.2000 | 21,111 | |||||||||||||||||||||||||||
| Monthly | March 24, 2025 | March 27, 2025 | April 28, 2025 | 0.2000 | 22,009 | |||||||||||||||||||||||||||
| Monthly | April 23, 2025 | April 28, 2025 | May 28, 2025 | 0.2000 | 24,397 | |||||||||||||||||||||||||||
| Monthly | May 27, 2025 | May 28, 2025 | June 26, 2025 | 0.2000 | 26,500 | |||||||||||||||||||||||||||
| Monthly | June 25, 2025 | June 26, 2025 | July 29, 2025 | 0.2000 | 26,775 | |||||||||||||||||||||||||||
| $ | 1.8000 | $ | 197,850 | |||||||||||||||||||||||||||||
| Class S | ||||||||||||||||||||||||||||||||
| Distribution | Date Declared | Record Date | Payment Date | Distribution Per Share | Distribution Amount | |||||||||||||||||||||||||||
| Monthly | October 24, 2024 | October 30, 2024 | November 26, 2024 | $ | 0.1833 | $ | 8,415 | |||||||||||||||||||||||||
| Monthly | November 26, 2024 | November 27, 2024 | December 27, 2024 | 0.1833 | 8,632 | |||||||||||||||||||||||||||
| Monthly | December 26, 2024 | December 27, 2024 | February 3, 2025 | 0.1833 | 8,816 | |||||||||||||||||||||||||||
| Monthly | January 28, 2025 | January 29, 2025 | February 26, 2025 | 0.1833 | 9,026 | |||||||||||||||||||||||||||
| Monthly | February 24, 2025 | February 26, 2025 | March 27, 2025 | 0.1834 | 9,278 | |||||||||||||||||||||||||||
| Monthly | March 24, 2025 | March 27, 2025 | April 28, 2025 | 0.1834 | 9,543 | |||||||||||||||||||||||||||
| Monthly | April 23, 2025 | April 28, 2025 | May 28, 2025 | 0.1835 | 9,817 | |||||||||||||||||||||||||||
| Monthly | May 27, 2025 | May 28, 2025 | June 26, 2025 | 0.1836 | 10,006 | |||||||||||||||||||||||||||
| Monthly | June 25, 2025 | June 26, 2025 | July 29, 2025 | 0.1836 | 10,233 | |||||||||||||||||||||||||||
| $ | 1.6507 | $ | 83,766 | |||||||||||||||||||||||||||||
| Class D | ||||||||||||||||||||||||||||||||
| Distribution | Date Declared | Record Date | Payment Date | Distribution Per Share | Distribution Amount | |||||||||||||||||||||||||||
| Monthly | October 24, 2024 | October 30, 2024 | November 26, 2024 | $ | 0.1951 | $ | 16 | |||||||||||||||||||||||||
| Monthly | November 26, 2024 | November 27, 2024 | December 27, 2024 | 0.1951 | 21 | |||||||||||||||||||||||||||
| Monthly | December 26, 2024 | December 27, 2024 | February 3, 2025 | 0.1951 | 22 | |||||||||||||||||||||||||||
| Monthly | January 28, 2025 | January 29, 2025 | February 26, 2025 | 0.1951 | 22 | |||||||||||||||||||||||||||
| Monthly | February 24, 2025 | February 26, 2025 | March 27, 2025 | 0.1951 | 24 | |||||||||||||||||||||||||||
| Monthly | March 24, 2025 | March 27, 2025 | April 28, 2025 | 0.1951 | 31 | |||||||||||||||||||||||||||
| Monthly | April 23, 2025 | April 28, 2025 | May 28, 2025 | 0.1952 | 31 | |||||||||||||||||||||||||||
| Monthly | May 27, 2025 | May 28, 2025 | June 26, 2025 | 0.1952 | 31 | |||||||||||||||||||||||||||
| Monthly | June 25, 2025 | June 26, 2025 | July 29, 2025 | 0.1952 | 31 | |||||||||||||||||||||||||||
| $ | 1.7562 | $ | 229 | |||||||||||||||||||||||||||||
The following table presents distributions that were declared during the nine months ended June 30, 2024:
| Class I | ||||||||||||||||||||||||||||||||
| Distribution | Date Declared | Record Date | Payment Date | Net Distribution Per Share | Distribution Amount | |||||||||||||||||||||||||||
| Monthly | October 25, 2023 | October 31, 2023 | November 28, 2023 | $ | 0.1900 | $ | 9,259 | |||||||||||||||||||||||||
| Monthly | November 27, 2023 | November 30, 2023 | December 27, 2023 | 0.1900 | 9,916 | |||||||||||||||||||||||||||
| Special | December 14, 2023 | December 15, 2023 | December 27, 2023 | 0.0400 | 2,296 | |||||||||||||||||||||||||||
| Monthly | December 20, 2023 | December 31, 2023 | February 1, 2024 | 0.1900 | 10,921 | |||||||||||||||||||||||||||
| Monthly | January 24, 2024 | January 31, 2024 | February 27, 2024 | 0.1900 | 11,872 | |||||||||||||||||||||||||||
| Monthly | February 27, 2024 | February 29, 2024 | March 27, 2024 | 0.2000 | 13,229 | |||||||||||||||||||||||||||
| Monthly | March 26, 2024 | March 27, 2024 | April 29, 2024 | 0.2000 | 14,041 | |||||||||||||||||||||||||||
| Monthly | April 18, 2024 | April 29, 2024 | May 30, 2024 | 0.2000 | 14,936 | |||||||||||||||||||||||||||
| Monthly | May 24, 2024 | May 30, 2024 | June 27, 2024 | 0.2000 | 15,451 | |||||||||||||||||||||||||||
| Monthly | June 27, 2024 | June 27, 2024 | July 29, 2024 | 0.2000 | 16,361 | |||||||||||||||||||||||||||
| $ | 1.8000 | $ | 118,282 | |||||||||||||||||||||||||||||
| Class S | ||||||||||||||||||||||||||||||||
| Distribution | Date Declared | Record Date | Payment Date | Net Distribution Per Share | Distribution Amount | |||||||||||||||||||||||||||
| Monthly | October 25, 2023 | October 31, 2023 | November 28, 2023 | $ | 0.1733 | $ | 4,105 | |||||||||||||||||||||||||
| Monthly | November 27, 2023 | November 30, 2023 | December 27, 2023 | 0.1734 | 4,436 | |||||||||||||||||||||||||||
| Special | December 14, 2023 | December 15, 2023 | December 27, 2023 | 0.0400 | 1,109 | |||||||||||||||||||||||||||
| Monthly | December 20, 2023 | December 31, 2023 | February 1, 2024 | 0.1733 | 4,825 | |||||||||||||||||||||||||||
| Monthly | January 24, 2024 | January 31, 2024 | February 27, 2024 | 0.1733 | 5,191 | |||||||||||||||||||||||||||
| Monthly | February 27, 2024 | February 29, 2024 | March 27, 2024 | 0.1833 | 5,853 | |||||||||||||||||||||||||||
| Monthly | March 26, 2024 | March 27, 2024 | April 29, 2024 | 0.1833 | 6,361 | |||||||||||||||||||||||||||
| Monthly | April 18, 2024 | April 29, 2024 | May 30, 2024 | 0.1833 | 6,730 | |||||||||||||||||||||||||||
| Monthly | May 24, 2024 | May 30, 2024 | June 27, 2024 | 0.1833 | 7,188 | |||||||||||||||||||||||||||
| Monthly | June 27, 2024 | June 27, 2024 | July 29, 2024 | 0.1833 | 7,551 | |||||||||||||||||||||||||||
| $ | 1.6498 | $ | 53,349 | |||||||||||||||||||||||||||||
| Class D | ||||||||||||||||||||||||||||||||
| Distribution | Date Declared | Record Date | Payment Date | Distribution Per Share | Distribution Amount | |||||||||||||||||||||||||||
| Monthly | October 25, 2023 | October 31, 2023 | November 28, 2023 | $ | 0.1851 | $ | 1 | |||||||||||||||||||||||||
| Monthly | November 27, 2023 | November 30, 2023 | December 27, 2023 | 0.1851 | 3 | |||||||||||||||||||||||||||
| Special | December 14, 2023 | December 15, 2023 | December 27, 2023 | 0.0400 | 1 | |||||||||||||||||||||||||||
| Monthly | December 20, 2023 | December 31, 2023 | February 1, 2024 | 0.1851 | 4 | |||||||||||||||||||||||||||
| Monthly | January 24, 2024 | January 31, 2024 | February 27, 2024 | 0.1851 | 5 | |||||||||||||||||||||||||||
| Monthly | February 27, 2024 | February 29, 2024 | March 27, 2024 | 0.1951 | 10 | |||||||||||||||||||||||||||
| Monthly | March 26, 2024 | March 27, 2024 | April 29, 2024 | 0.1951 | 10 | |||||||||||||||||||||||||||
| Monthly | April 18, 2024 | April 29, 2024 | May 30, 2024 | 0.1951 | 11 | |||||||||||||||||||||||||||
| Monthly | May 24, 2024 | May 30, 2024 | June 27, 2024 | 0.1951 | 12 | |||||||||||||||||||||||||||
| Monthly | June 27, 2024 | June 27, 2024 | July 29, 2024 | 0.1951 | 14 | |||||||||||||||||||||||||||
| $ | 1.7559 | $ | 71 | |||||||||||||||||||||||||||||
Distribution Reinvestment Plan
We have adopted a distribution reinvestment plan, pursuant to which we will reinvest all cash dividends declared by the Board on behalf of our shareholders who do not elect to receive their dividends in cash as provided below. As a result, if the Board authorizes, and we declare, a cash dividend or other distribution, then shareholders who have not opted out of our distribution reinvestment plan will have their cash distributions automatically reinvested in additional shares, rather than receiving the cash dividend or other distribution. Distributions on fractional shares will be credited to each participating shareholder's account to three decimal places.
Share Repurchase Program
At the discretion of our Board, during the quarter ended September 30, 2022 we commenced a share repurchase program pursuant to which we intend to offer to repurchase up to 5% of our Common Shares outstanding (by number of shares or aggregate NAV) as of the close of the previous calendar quarter; provided that the we reserve the right in our sole discretion to purchase additional outstanding Shares representing up to 2.0% of our outstanding Shares each quarter without amending or extending the repurchase offer as permitted by Rule 13e-4(f)(1) of the Exchange Act. Our Board of Trustees may amend or suspend the share repurchase program at any time if it deems such action to be in our best interest and the best interest of our shareholders. As a result, share repurchases may not be available each quarter. Following any such suspension, the Board of Trustees will consider on at least a quarterly basis whether the continued suspension of the share repurchase program is in the best interest of us and shareholders, and will reinstate the share repurchase program when and if appropriate and subject to its fiduciary duty to us and shareholders.
We intend to conduct repurchase offers under the share repurchase program pursuant to tender offers in accordance with the requirements of Rule 13e-4 promulgated under the Exchange Act and the Investment Company Act. All shares purchased by us pursuant to the terms of each tender offer will be retired.
Under our share repurchase program, to the extent we offer to repurchase shares in any particular quarter, we expect to repurchase shares at the expiration of the tender offer at a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter (the "Valuation Date"), except that shares that have a prospective repurchase date that is within the
one-year period following the original issue date of the shares will be subject to an early repurchase deduction of 2% of such NAV (an "Early Repurchase Deduction"). The one-year holding period will be deemed satisfied if the shares to be repurchased would have been outstanding for one year or longer as of the subscription closing date immediately following the applicable Valuation Date, which subscription closing date the Company deems the prospective repurchase date for the applicable offer. The Early Repurchase Deduction will be retained by us for the benefit of remaining shareholders.
During the nine months ended June 30, 2025, we repurchased pursuant to such tender offers an aggregate of 7,742,619 Class I shares, 1,648,328 Class S shares and 3,287 Class D shares. The following table presents the share repurchases completed during the nine months ended June 30, 2025:
| Repurchase Pricing Date | Total Number of Shares Repurchased (all classes) |
Percentage of Outstanding Shares Repurchased(1)
|
Price Paid Per Share |
Amount Repurchased (all classes)(2)
|
||||||||||||||||||||||
| December 31, 2024 | 889,569 | 0.66 | % | $ | 23.52 | $ | 20,910 | |||||||||||||||||||
| March 31, 2025 | 941,577 | 0.65 | % | $ | 23.28 | $ | 21,923 | |||||||||||||||||||
| June 30, 2025 | 7,563,088 | 4.66 | % | $ | 23.14 | $ | 175,010 | |||||||||||||||||||
_____________________
(1) Percentage is based on total shares as of the close of the previous calendar quarter.
(2) Amounts shown net of Early Repurchase Deduction, where applicable.
During the nine months ended June 30, 2024, we repurchased pursuant to such tender offers an aggregate of 926,792 Class I shares and 570,987 Class S shares. The following table presents the share repurchases completed during the nine months ended June 30, 2024:
| Repurchase Pricing Date | Total Number of Shares Repurchased (all classes) |
Percentage of Outstanding Shares Repurchased(1)
|
Price Paid Per Share |
Amount Repurchased (all classes)(2)
|
||||||||||||||||||||||
| December 31, 2023 | 446,089 | 0.69 | % | $ | 23.62 | $ | 10,526 | |||||||||||||||||||
| March 31, 2024 | 348,944 | 0.41 | % | $ | 23.61 | $ | 8,217 | |||||||||||||||||||
| June 30, 2024 | 702,746 | 0.67 | % | $ | 23.53 | $ | 16,544 | |||||||||||||||||||
_____________________
(1) Percentage is based on total shares as of the close of the previous calendar quarter.
(2) Amounts shown net of Early Repurchase Deduction, where applicable.
Leverage
To seek to enhance our returns, we use and expect to continue to use leverage as market conditions permit and at the discretion of the Adviser. However, as a BDC, subject to certain limited exceptions, we are currently only allowed to borrow amounts in accordance with the asset coverage requirements in the Investment Company Act. On December 17, 2021, our sole shareholder approved the adoption of the 150% asset coverage requirement pursuant to Section 61(a)(2) of the Investment Company Act and such election became effective the following day. We intend to use leverage in the form of borrowings, including loans from certain financial institutions, and the issuance of debt securities. We may also use leverage in the form of the issuance of preferred shares, but do not currently intend to do so. In determining whether to borrow money, we will analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. Any such leverage is expected to be applied on a position-by-position basis, meaning little-to-no leverage may be applied to certain investments, while others may have more leverage applied. Any such leverage would also be expected to increase the total capital available for investment by the Company. We may also create leverage by securitizing our assets (including in CLOs) and retaining the equity portion of the securitized vehicle. As of June 30, 2025, we had $2,409.4 million in senior securities and our asset coverage ratio was 275.22%.
ING Credit Agreement
On March 25, 2022, we entered into a senior secured revolving credit agreement (as amended and/or restated from time to time, the "ING Credit Agreement") among us, as borrower, the lenders party thereto, and ING Capital LLC ("ING"), as administrative agent. As of June 30, 2025, the size of the ING Credit Agreement facility is $1,235 million (the "Maximum Commitment"), and the ING Credit Agreement facility has a four year availability period (the "Availability Period") through April 11, 2029 during which loans may be made and a stated maturity date of April 11, 2030 (the "Maturity Date"). Following the Availability Period, we will be required in certain circumstances to prepay loans prior to the Maturity Date. The ING Credit Agreement provides for the issuance of letters of credit during the Availability Period in an aggregate amount of $25 million. Borrowings under the ING Credit Agreement may be used for general corporate purposes, including making investments and permitted distributions.
All obligations under the ING Credit Agreement are secured by a first-priority security interest (subject to certain exceptions) in substantially all of the present and future property and assets of us and of the current and certain future subsidiaries of us and guaranteed by such subsidiaries.
See Note 6. Borrowings for additional information on the ING Credit Agreement.
As of June 30, 2025, we were in compliance with all financial covenants under the ING Credit Agreement.
JPM SPV Facility
On February 24, 2023, we entered into a loan and security agreement (as amended and/or restated from time to time, the "JPM Loan and Security Agreement") among OSCF Lending SPV, LLC ("OSCF Lending SPV"), a wholly owned subsidiary of us, as borrower, us, as parent and servicer, Citibank, N.A., as collateral agent and securities intermediary, Virtus Group, LP, as collateral administrator, the lenders party thereto, and JPMorgan Chase Bank, National Association ("JPM"), as administrative agent, pursuant to which JPM agreed to extend credit to OSCF Lending SPV in an aggregate principal amount up to $500 million.
The obligations of OSCF Lending SPV under the JPM Loan and Security Agreement are secured by all of the assets held by OSCF Lending SPV.
See Note 6. Borrowings for additional information on the JPM Loan and Security Agreement.
SMBC SPV Facility
On September 29, 2023, we entered into a loan and security agreement (as amended and/or restated from time to time, the "SMBC Loan and Security Agreement") among OSCF Lending III SPV, LLC ("OSCF Lending III SPV"), a wholly owned subsidiary of us, as borrower, us, as transferor and servicer, Citibank, N.A., as the account bank, Virtus Group, LP, as collateral custodian, the lenders party thereto, and Sumitomo Mitsui Banking Corporation ("SMBC"), as administrative agent and
collateral agent, pursuant to which SMBC agreed to extend credit to OSCF Lending III SPV in an aggregate principal amount up to $150 million at any one time outstanding.
The obligations of OSCF Lending III SPV under the SMBC Loan and Security Agreement are secured by all of the assets held by OSCF Lending III SPV.
See Note 6. Borrowings for additional information on the SMBC Loan and Security Agreement.
CIBC SPV Facility
On November 21, 2023, we entered into a loan and servicing agreement (as amended and/or restated from time to time, the "CIBC Loan and Servicing Agreement") among OSCF Lending V SPV, LLC ("OSCF Lending V SPV"), a wholly owned subsidiary of us, as borrower, we, as transferor and servicer, Computershare Trust Company, N.A., as securities intermediary, collateral custodian, collateral agent and collateral administrator, the lenders party thereto, and Canadian Imperial Bank of Commerce ("CIBC"), as administrative agent, pursuant to which CIBC agreed to extend credit to OSCF Lending V SPV in an aggregate principal amount up to $150 million at any one time outstanding.
Subject to certain conditions, including consent of the lenders and CIBC as administrative agent, during the availability period, OSCF Lending V SPV may propose up to four increases in the CIBC Maximum Commitment up to an amount not to exceed $500 million in the aggregate. On April 26, 2024, we increased the CIBC Maximum Commitment to $350 million.
The obligations of OSCF Lending V SPV under the CIBC Loan and Servicing Agreement are secured by all of the assets held by OSCF Lending V SPV, including loans it has made or acquired.
See Note 6. Borrowings for additional information on the CIBC Loan and Servicing Agreement.
DBNY SPV Facility
On February 15, 2024, we entered into a loan financing and servicing agreement (as amended and/or restated from time to time, the "DBNY Loan Financing and Servicing Agreement"), among OSCF Lending IV SPV, LLC ("OSCF Lending IV SPV"), a wholly owned subsidiary of us, as borrower, we, as servicer and equityholder, the lenders party thereto, Deutsche Bank AG, New York Branch ("DBNY"), as facility agent, the other agents parties thereto and Deutsche Bank National Trust Company, as collateral agent and collateral custodian, pursuant to which DBNY has agreed to extend credit to OSCF Lending IV SPV in an aggregate principal amount up to $300 million at any one time outstanding.
The obligations of OSCF Lending IV SPV under the DBNY Loan Financing and Servicing Agreement are secured by all of the assets held by OSCF Lending IV SPV, including loans it has made or acquired, except for certain Retained Interests (as defined in the DBNY Loan Financing and Servicing Agreement).
See Note 6. Borrowings for additional information on the DBNY Loan Financing and Servicing Agreement.
MS SPV Facility
On February 23, 2024, we entered into a loan and servicing agreement (as amended and/or restated from time to time, the "MS Loan and Servicing Agreement"), among OSCF Lending II SPV, LLC ("OSCF Lending II SPV"), a wholly owned subsidiary of us, as borrower, we, as transferor and servicer, Citibank, N.A., as the collateral agent, account bank and collateral custodian, Virtus Group, LP, as collateral administrator, each of the lenders from time to time party thereto, and Morgan Stanley Asset Funding, Inc. ("MS"), as the administrative agent, pursuant to which MS has agreed to extend credit to OSCF Lending II SPV in an aggregate principal amount up to $200 million (the "MS Maximum Commitment") at any one time outstanding.
The obligations of OSCF Lending II SPV under the MS Loan and Servicing Agreement are secured by all of the assets held by OSCF Lending II SPV, including certain loans it has made or acquired, except for certain Retained Interests (as defined in the MS Loan and Servicing Agreement).
See Note 6. Borrowings for additional information on the MS Loan and Servicing Agreement.
2028 Unsecured Notes
On November 14, 2023, we issued $350 million aggregate principal amount of our 8.400% Notes due 2028 (the "2028 Unsecured Notes") pursuant to an indenture, dated as of November 14, 2023 (the "Base Indenture"), between us and Deutsche
Bank Trust Company Americas, as trustee, and a first supplemental indenture (the "First Supplemental Indenture") to the Base Indenture.
The 2028 Unsecured Notes mature on November 14, 2028, unless previously redeemed or repurchased in accordance with their terms. The 2028 Unsecured Notes bear interest at a rate of 8.400% per year payable semi-annually in arrears on May 14 and November 14 of each year, commencing on May 14, 2024. The 2028 Unsecured Notes are our direct, unsecured obligations and rank senior in right of payment to our future indebtedness that is expressly subordinated in right of payment to the 2028 Unsecured Notes; equal in right of payment to our existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness (including existing unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities.
The First Supplemental Indenture contains certain covenants, including a covenant requiring us to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act, or any successor provisions, but giving effect to any exemptive relief granted to us by the SEC and to provide financial information to the holders of the 2028 Unsecured Notes and the trustee if we should no longer be subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are set forth in the First Supplemental Indenture.
In connection with the 2028 Unsecured Notes, we entered into an interest rate swap to more closely align the interest rate payable on the 2028 Unsecured Notes with our investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, we receive a fixed interest rate of 8.400% and pay a floating interest rate of the three-month SOFR plus 4.0405% on a notional amount of $350 million.
2029 Unsecured Notes
On July 23, 2024, we issued $400 million aggregate principal amount of our 6.500% Notes due 2029 (the "2029 Unsecured Notes") pursuant to the Base Indenture and a second supplemental indenture (the "Second Supplemental Indenture") to the Base Indenture.
The 2029 Unsecured Notes mature on July 23, 2029, unless previously redeemed or repurchased in accordance with their terms. The 2029 Unsecured Notes bear interest at a rate of 6.500% per year payable semi-annually in arrears on January 23 and July 23 of each year. The 2029 Unsecured Notes are our direct, unsecured obligations and rank senior in right of payment to our future indebtedness that is expressly subordinated in right of payment to the 2029 Unsecured Notes; equal in right of payment to our existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness (including existing unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities.
The Second Supplemental Indenture contains certain covenants, including a covenant requiring us to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act, or any successor provisions, but giving effect to any exemptive relief granted to us by the SEC and to provide financial information to the holders of the 2029 Unsecured Notes and the Notes Trustee if we should no longer be subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are set forth in the Second Supplemental Indenture.
In connection with the 2029 Unsecured Notes, we entered into an interest rate swap to more closely align the interest rate payable on the 2029 Unsecured Notes with its investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, we receive a fixed interest rate of 6.500% and pays a floating interest rate of the three-month SOFR plus 2.5954% on a notional amount of $400 million.
Below is a summary of our credit facilities as of June 30, 2025 and September 30, 2024:
| June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| ($ in millions) | Aggregate Principal Committed | Outstanding Principal | Unfunded Commitment | Unamortized Debt Financing Costs | Availability Period | Maturity Date | ||||||||||||||||||||||||||||||||
| ING Credit Agreement | $ | 1,235.0 | $ | 630.0 | $ | 605.0 | $ | 9.0 | 4/11/2029 | 4/11/2030 | ||||||||||||||||||||||||||||
| JPM SPV Facility | 500.0 | 375.0 | 125.0 | 4.4 | 5/29/2027 | 5/29/2029 | ||||||||||||||||||||||||||||||||
| SMBC SPV Facility | 150.0 | 75.5 | 74.5 | 1.3 | 9/29/2026 | 9/29/2028 | ||||||||||||||||||||||||||||||||
| CIBC SPV Facility | 350.0 | 245.0 | 105.0 | 0.4 | 11/21/2025 | 11/21/2025 | ||||||||||||||||||||||||||||||||
| DBNY SPV Facility | 300.0 | 180.0 | 120.0 | 2.5 | 2/15/2027 | 2/15/2029 | ||||||||||||||||||||||||||||||||
| MS SPV Facility | 200.0 | 133.4 | 66.6 | 1.8 | 2/23/2027 | 2/23/2029 | ||||||||||||||||||||||||||||||||
| Total | $ | 2,735.0 | $ | 1,638.9 | $ | 1,096.1 | $ | 19.4 | ||||||||||||||||||||||||||||||
| September 30, 2024 | ||||||||||||||||||||||||||||||||||||||
| ($ in millions) | Aggregate Principal Committed | Outstanding Principal | Unfunded Commitment | Unamortized Debt Financing Costs | Availability Period | Maturity Date | ||||||||||||||||||||||||||||||||
| ING Credit Agreement | $ | 1,185.0 | $ | 415.0 | $ | 770.0 | $ | 6.8 | 6/28/2027 | 6/28/2028 | ||||||||||||||||||||||||||||
| JPM SPV Facility | 500.0 | 230.0 | 270.0 | 5.2 | 5/29/2027 | 5/29/2029 | ||||||||||||||||||||||||||||||||
| SMBC SPV Facility | 150.0 | 100.0 | 50.0 | 1.6 | 9/29/2026 | 9/29/2028 | ||||||||||||||||||||||||||||||||
| CIBC SPV Facility | 350.0 | 225.0 | 125.0 | 1.3 | 11/21/2025 | 11/21/2025 | ||||||||||||||||||||||||||||||||
| DBNY SPV Facility | 300.0 | 100.0 | 200.0 | 3.0 | 2/15/2027 | 2/15/2029 | ||||||||||||||||||||||||||||||||
| MS SPV Facility | 200.0 | 25.0 | 175.0 | 2.2 | 2/23/2027 | 2/23/2029 | ||||||||||||||||||||||||||||||||
| Total | $ | 2,685.0 | $ | 1,095.0 | $ | 1,590.0 | $ | 20.1 | ||||||||||||||||||||||||||||||
Below is a summary of our unsecured notes as of June 30, 2025 and September 30, 2024:
| June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | Outstanding Principal | Unamortized Financing Costs | Unaccreted Discount | Swap Fair Value Adjustment | Carrying Value | Fair Value | Maturity Date | |||||||||||||||||||||||||||||||||||||
| 2028 Unsecured Notes | $ | 350.0 | $ | (3.1) | $ | (1.2) | $ | 9.0 | $ | 354.7 | $ | 377.1 | 11/14/2028 | |||||||||||||||||||||||||||||||
| 2029 Unsecured Notes | 400.0 | (4.1) | (1.9) | 6.1 | 400.1 | 409.1 | 7/23/2029 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 750.0 | $ | (7.2) | $ | (3.1) | $ | 15.1 | $ | 754.8 | $ | 786.2 | ||||||||||||||||||||||||||||||||
| September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | Outstanding Principal | Unamortized Financing Costs | Unaccreted Discount | Swap Fair Value Adjustment | Carrying Value | Fair Value | Maturity Date | |||||||||||||||||||||||||||||||||||||
| 2028 Unsecured Notes | $ | 350.0 | $ | (3.7) | $ | (1.5) | $ | 12.4 | $ | 357.2 | $ | 378.6 | 11/14/2028 | |||||||||||||||||||||||||||||||
| 2029 Unsecured Notes | 400.0 | (4.8) | (2.3) | 9.2 | 402.1 | 412.0 | 7/23/2029 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 750.0 | $ | (8.5) | $ | (3.8) | $ | 21.6 | $ | 759.3 | $ | 790.6 | ||||||||||||||||||||||||||||||||
The table below presents the components of interest expense for the following periods:
| ($ in millions, except percentage) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | ||||||||||||||||||||||
| Stated interest expense | $ | 35.2 | $ | 27.3 | $ | 107.6 | $ | 62.5 | ||||||||||||||||||
| Credit facility fees | 2.6 | 1.8 | 8.2 | 4.6 | ||||||||||||||||||||||
| Amortization of debt financing costs | 2.2 | 1.7 | 6.5 | 4.1 | ||||||||||||||||||||||
| Effect of interest rate swaps | 0.5 | 0.9 | 2.6 | 2.4 | ||||||||||||||||||||||
| Total interest expense | $ | 40.5 | $ | 31.7 | $ | 124.9 | $ | 73.6 | ||||||||||||||||||
|
Weighted average interest rate (1)
|
6.915 | % | 8.418 | % | 7.117 | % | 8.341 | % | ||||||||||||||||||
| Weighted average outstanding balance | $ | 2,042.4 | $ | 1,366.9 | $ | 2,027.2 | $ | 1,035.1 | ||||||||||||||||||
(1) The weighted average interest rate includes the effect of the interest rate swaps and excludes the impact of credit facility fees and amortization of debt financing costs.
Regulated Investment Company Status and Distributions
We anticipate that we will make quarterly distributions of at least 90% of our realized net ordinary income and net short-term capital gains in excess of our net long-term capital losses, if any, then available for distribution, each as determined by our Board in accordance with applicable law. Any distributions will be declared out of assets legally available for distribution. We expect quarterly distributions to be paid from income primarily generated by interest earned on our investments, although distributions to shareholders may also include a return of capital.
We have elected to be treated, and intend to qualify annually to be treated, as a RIC under Subchapter M of the Code. To maintain RIC qualification, we must distribute to our shareholders, for each tax year, at least 90% of our "investment company taxable income" for that year. In order to avoid certain excise taxes imposed on RICs, we intend to distribute during each calendar year an amount at least equal to the sum of: (1) 98% of our ordinary income for the calendar year; (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending on October 31 of the calendar year; and, (3) any undistributed ordinary income and capital gain net income for preceding years on which we paid no U.S. federal income tax less certain over-distributions in prior years. In addition, although we currently intend to distribute realized net capital gains (i.e., net long term capital gains in excess of short term capital losses), if any, at least annually, we may in the future decide to retain such capital gains for investment, pay U.S. federal income tax on such amounts at regular corporate tax rates, and elect to treat such gains as deemed distributions to shareholders. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, to the extent that we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.
Depending on the level of taxable income and net capital gain earned in a year, we may choose to carry forward taxable income or net capital gain for distribution in the following year and pay the applicable U.S. federal excise tax. Distributions will be appropriately adjusted for any taxes payable by us or any direct or indirect subsidiary through which it invests (including any corporate, state, local, non-U.S. and withholding taxes). Any Incentive Fee to be paid to our Adviser will not be reduced to take into account any such taxes.
We may generate qualified net interest income or qualified net short-term capital gains that may be exempt from U.S. withholding tax when distributed to foreign shareholders. A RIC is permitted to designate distributions of qualified net interest income and qualified short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. shareholders with proper documentation.
Recent Developments
Share Issuances
On July 1, 2025, we issued and sold pursuant to our continuous public offering 5,979,739 Class I shares for proceeds of $138.4 million, 810,134 Class S shares for proceeds of $18.7 million and 4,051 Class D shares for proceeds of $0.1 million.
Distributions
On July 24, 2025, our Board of Trustees declared a regular distribution on our outstanding Common Shares in the amount per share set forth below:
| Gross Distribution | Shareholder Servicing and/or Distribution Fee | Net Distribution | ||||||||||||||||||
| Class I shares | $ | 0.2000 | $ | - | $ | 0.2000 | ||||||||||||||
| Class S shares | $ | 0.2000 | $ | 0.0164 | $ | 0.1836 | ||||||||||||||
| Class D shares | $ | 0.2000 | $ | 0.0048 | $ | 0.1952 | ||||||||||||||
The distribution was payable to shareholders of record as of July 29, 2025 and will be paid on August 27, 2025. The distribution was paid in cash or reinvested in Common Shares for shareholders participating in our distribution reinvestment plan.
Amendments to Credit Agreements
On July 3, 2025, we entered into Amendment No. 3 (the "JPM Amendment") to the JPM Loan and Security Agreement. Among other things, the JPM Amendment:
•increased the commitment under the JPM Loan and Security Agreement from $500 million to $700 million;
•reduced the interest rate margin on SOFR loans from 2.50% to (i) 1.50% if the borrowings are used to purchase broadly syndicated loans and other liquid debt securities (as defined in the JPM Loan and Security Agreement) or (ii) 1.90% on all other borrowings;
•extended the reinvestment period from May 29, 2027 to July 3, 2029; and
•extended the final maturity date from May 29, 2029 to July 3, 2030.
On July 3, 2025, we also entered into First Amendment to Loan and Servicing Agreement (the "MS Amendment") to the MS Loan and Servicing Agreement. Among other things, the MS Amendment:
•increased the commitment under the MS Loan and Servicing Agreement from $200 million to $400 million;
•adds an "accordion" feature that allows the borrower, subject to certain conditions, to propose one or more increases in the maximum commitment up to an amount not to exceed $600 million;
•reduced the interest rate margin on SOFR loans during the reinvestment period from 2.35% to (i) 1.60% if the borrowings are used to purchase broadly syndicated loans or (ii) 1.85% on all other borrowings;
•extended the reinvestment period from February 23, 2027 to July 3, 2028; and
•extended the final maturity date from February 23, 2029 to July 3, 2029.
On July 3, 2025, we repaid all outstanding borrowings under the CIBC Loan and Servicing Agreement, following which the CIBC Loan and Servicing Agreement was terminated. Obligations under the CIBC Loan and Servicing Agreement would have otherwise matured on November 21, 2025.
On July 25, 2025, we entered into an Omnibus Amendment to Transaction Documents and Fourth Amendment (collectively, the "DBNY Amendment") to the DBNY Loan Financing and Servicing Agreement. Among other things, the DBNY Amendment:
•increased the commitment under the DBNY Loan Financing and Servicing Agreement from $300 million to $400 million;
•reduced the interest rate margin on SOFR loans from 2.40% to 1.60%;
•extended the reinvestment period from February 15, 2027 to July 25, 2028;
•extended the final maturity date from February 15, 2029 to July 25, 2029; and
•appointed Computershare Trust Company, N.A. to replace Deutsche Bank National Trust Company as collateral agent and collateral custodian.
2030 Unsecured Notes
On July 15, 2025, we issued $400 million aggregate principal amount of our 6.190% Notes due 2030 (the "2030 Unsecured Notes") pursuant to the Base Indenture and a third supplemental indenture (the "Third Supplemental Indenture") to the Base Indenture.
The 2030 Unsecured Notes bear interest at a rate of 6.190% per year payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2026. The 2030 Unsecured Notes are our direct, unsecured obligations and rank senior in right of payment to our future indebtedness that is expressly subordinated in right of payment to the 2030 Unsecured Notes; equal in right of payment to our existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness (including existing unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities.
The Third Supplemental Indenture contains certain covenants, including a covenant requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act, or any successor provisions, but giving effect to any exemptive relief granted to us by the SEC and to provide financial information to the holders of the 2030 Unsecured Notes and the trustee if we should no longer be subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are set forth in the Third Supplemental Indenture.
In connection with the 2030 Unsecured Notes, we entered into an interest rate swap to more closely align the interest rate payable on the 2030 Unsecured Notes with its investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, we receive a fixed interest rate of 6.190% and pays a floating interest rate of the three-month SOFR plus 2.49255% on a notional amount of $400 million.
Amendment and Restatement of Amended and Restated Declaration of Trust
On August 11, 2025, we amended and restated our Amended and Restated Declaration of Trust in order to (1) revise the definition of "Liquidity Event" to include the receipt by shareholders of listed equity securities, not unlisted equity securities, and (2) clarify that we may not purchase or lease assets in which a Trustee, the Adviser or any of its affiliates have an interest unless, among other things, the transaction was fully disclosed to shareholders in a prospectus or in a periodic report and occurred at our formation.
Oaktree Strategic Credit Fund published this content on August 13, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 13, 2025 at 10:02 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]