SL Investment Fund II LLC

03/04/2026 | Press release | Distributed by Public on 03/04/2026 16:15

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in thousands, except per unit amounts, unless otherwise indicated)

The discussion and analysis contained in this section refers to our financial condition, results of operations and cash flows. The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto in Part II, Item 8 of this Form 10-K, "Consolidated Financial Statements and Supplementary Data." This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part I, Item 1A of this Form 10-K, "Risk Factors." Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" appearing elsewhere in this Form 10-K.

OVERVIEW

We are a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. We have elected to be regulated as a BDC under the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated, and intend to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code. We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer. We are externally managed by our Adviser, an indirect, wholly owned subsidiary of Morgan Stanley.

Our investment objective is to achieve attractive risk-adjusted returns via current income and, to a lesser extent, capital appreciation by investing primarily in directly originated senior secured term loans issued by U.S. middle-market companies in which private equity sponsors have a controlling equity stake in the portfolio company. For purposes of this Report, "middle-market companies" refers to companies that, in general, generate annual EBITDA in the range of approximately $15 million to $200 million, although not all of our portfolio companies will meet this criterion.

We invest primarily in directly originated senior secured term loans, including first lien senior secured term loans (including unitranche loans) and, to a lesser extent, second lien senior secured term loans, with the balance of our investments expected to be in higher-yielding assets such as mezzanine debt, unsecured debt, equity investments and other opportunistic asset purchases. Under normal market circumstances, we expect that investments other than first lien senior secured term loans would not exceed 10% of our gross assets at the time of acquisition of any such investments. Typical middle-market senior loans may be issued by middle-market companies in the context of LBOs, acquisitions, debt refinancings, recapitalizations, and other similar transactions. We generally expect our debt investments to have a stated term of five to eight years and typically bear interest at a floating rate usually determined on the basis of a benchmark (such as SOFR).

We generate revenues primarily in the form of interest income from investments we hold. In addition, we generate income from dividends or distributions of income on any direct equity investments, capital gains on the sale of loans and equity investments and various other loan origination and other fees, including commitment, origination, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees.

Pursuant to the Order, we are able to enter into certain negotiated co-investment transactions alongside certain Regulated Funds and Affiliated Entities (as defined in the Order), in a manner consistent with our investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the Order. The Order contains certain conditions and requires the Board to maintain oversight of our participation in the co-investment program. The Order also requires a "required majority" (as defined in Section 57(o) of the 1940 Act) of our eligible directors to make certain conclusions pursuant to Section 57(f) of the 1940 Act in connection with certain co-investment transactions, including co-investment transactions in which an affiliate of ours is an existing investor in the portfolio company, non-pro rata follow on investments and non-pro rata dispositions of investments.

KEY COMPONENTS OF OUR RESULTS OF OPERATIONS

Investments

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle-market companies, the general economic environment and the competitive environment for the type of investments we make.

Revenue

We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends or distributions of income on direct equity investments, capital gains on the sales of loans and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and typically bear interest at a floating rate usually determined on the basis of a benchmark such as SOFR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we may receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to

period. Our portfolio activity also reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring, syndication or due diligence fees, fees for providing managerial assistance and consulting fees.

Expenses

Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees, to our Investment Adviser pursuant to the Investment Advisory Agreement; (ii) costs and other expenses and our allocable portion of certain expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement between us and the Administrator; and (iii) other operating expenses as detailed below:

•
initial organization costs and offering costs incurred prior to the filing of our election to be regulated as a BDC (subject to the expense waiver);
•
costs associated with our initial private offering;
•
costs of any other offerings of our Units, Preferred Units and other securities, if any;
•
calculating individual asset values and our net asset value (including the cost and expenses of any third-party valuation services);
•
out of pocket expenses, including travel, entertainment, lodging, and meal expenses, incurred by the Investment Adviser, or members of its investment team or payable to third parties, in evaluating, developing, negotiating, structuring and performing due diligence on prospective portfolio companies (including, without limitation, any reverse termination fees and any liquidated damage and any costs related to broken deals) and monitoring actual portfolio companies and, if necessary, enforcing our rights;
•
base management fees under the Investment Advisory Agreement;
•
certain costs and expenses relating to distributions paid by us;
•
administration fees payable under the Administration Agreement and any sub-administration agreements, including related expenses;
•
arrangement, debt service and other costs of borrowings, senior securities or other financing arrangements;
•
the allocated costs incurred by the Investment Adviser in providing managerial assistance to those portfolio companies that request it;
•
amounts payable to third parties relating to, or associated with, making or holding investments;
•
the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;
•
transfer agent and custodial fees;
•
costs of derivatives and hedging;
•
commissions and other compensation payable to brokers or dealers;
•
any fees payable to rating agencies;
•
federal and state registration fees;
•
U.S. federal, state and local taxes, including any excise taxes;
•
independent director fees and expenses;
•
costs of preparing consolidated financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including registration fees, and the compensation of professionals responsible for the preparation or review of the foregoing;
•
the costs of any reports, proxy statements or other notices to our unitholders (including printing and mailing costs), the costs of any unitholders' meetings, and costs and expenses of preparation for the foregoing and related matters;
•
the costs of specialty and custom software for monitoring risk, compliance and overall investments;
•
fees and expenses associated with marketing efforts;
•
any fidelity bond required by applicable law;
•
any necessary insurance premiums;
•
any extraordinary expenses (such as litigation or indemnification payments or amounts payable pursuant to any agreement to provide indemnification entered into by us);
•
direct fees and expenses associated with independent audits, agency, consulting and legal costs;
•
cost of winding up; and
•
all other expenses incurred by either the Administrator or us in connection with administering our business.

We reimburse the Administrator or its affiliates for amounts paid or costs borne that properly constitute Company expenses as set forth in the Administration Agreement or otherwise, which expenses are ultimately borne by our unitholders. We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

PORTFOLIO AND INVESTMENT ACTIVITY

The composition of our portfolio is presented below:

As of

December 31, 2025

December 31, 2024

Cost

Fair Value

% of Total
Investments
at Fair
Value

Cost

Fair Value

% of Total
Investments
at Fair
Value

First Lien Debt

$

574,949

$

576,244

99.6

%

$

276,919

$

278,708

99.4

%

Other Debt Investments

1,791

1,722

0.3

1,567

1,576

0.6

Equity

467

504

0.1

100

100

-

(1)

Total

$

577,207

$

578,470

100.0

%

$

278,586

$

280,384

100.0

%

(1)
Amounts rounds to 0.0%

Our debt portfolio displayed the following characteristics of each of our investments(1) (2)unless otherwise noted:

As of

December 31,
2025

December 31,
2024

Number of portfolio companies

78

42

Number of new investment commitments in portfolio companies

41

42

Number of investment commitments exited or fully repaid

5

-

Percentage of performing debt bearing a floating rate, at fair value

99.7

%

99.4

%

Percentage of performing debt bearing a fixed rate, at fair value

0.3

%

0.6

%

Weighted average yield on debt and income producing investments, at cost(3)

8.8

%

9.7

%

Weighted average yield on debt and income producing investments, at fair value(3)

8.8

%

9.6

%

Weighted average yield on total portfolio, at cost(4)

8.8

%

9.7

%

Weighted average yield on total portfolio, at fair value(4)

8.8

%

9.6

%

Median 12-month EBITDA

$

90.4

$

90.6

Weighted average 12-month EBITDA

$

158.4

$

159.0

Weighted average net leverage through tranche(5)

5.8x

6.0x

Weighted average interest coverage(6)

1.9x

1.9x

Weighted average loan to value(7)

38.4

%

39.1

%

Percentage of debt investments with one or more financial covenants

34.0

%

50.3

%

Percentage of our debt investments that are sponsor backed

97.1

%

100.0

%

Percentage of loans and other debt in support of LBOs and acquisitions

63.3

%

68.4

%

Percentage of our debt portfolio subject to business cycle volatility

3.9

%

5.3

%

Average position size of our investments

$

7.4

$

6.7

(1)
Calculated as a percentage of gross debt commitments (funded and unfunded). Weighted average EBITDA, net leverage through the tranche in which the Company is a lender, weighted average interest coverage and weighted average loan to value exclude recurring revenue investments, which are investments in portfolio companies to which the Company lends based on a multiple of recurring revenue generated by the portfolio company and not based on a multiple of EBITDA.
(2)
Amounts were derived from investment due diligence information provided by the portfolio company. Such amounts have not been independently estimated by us, and accordingly, we take no responsibility for such numbers and make no representation or warranty in respect of this information.
(3)
Computed as (a) the annual stated spread, plus applicable reference rate, as applicable, plus the annual accretion of discounts, as applicable, on accruing debt securities, divided by (b) total debt investments (at fair value or cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented herein.
(4)
Computed as (a) the annual stated spread, plus reference rate, as applicable, plus the annual accretion of discounts, as applicable on all investments of the Company divided by (b) total investments (at fair value or cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented herein.
(5)
Net leverage is calculated as the ratio of total debt minus cash divided by EBITDA and taking into account leverage through the tranche in which the Company is a lender, excluding recurring revenue investments.
(6)
Interest coverage for a particular portfolio company is calculated by taking credit agreement EBITDA and dividing by annualized latest reported interest expense. Total interest coverage is calculated on a weighted average basis based on total gross debt commitments (funded and unfunded). Calculation excludes recurring revenue deals which are investments in portfolio companies to which the Company lends based on a multiple of recurring revenue generated by the portfolio company and not based on a multiple of EBITDA. Portfolio company statistics are derived from the most recently available financial statements of each portfolio company as of the reported end date. Statistics of the portfolio companies have not been independently verified by us and may reflect a normalized or adjusted amount.
(7)
Calculated using total outstanding debt through the tranche in which the Company is a lender divided by total enterprise value from the private equity sponsor or market comparables.

Investment Activity

Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated):

For the Year Ended December 31, 2025

For the period
from
May 9, 2024
(inception)
through
December 31,
2024

New Investments Committed

Gross Principal Balance(1)

$

449,576

$

365,766

Net New Investments Committed

449,576

365,766

Investments, at Cost

Investments, beginning of period

278,586

-

New investments purchased

334,742

279,384

Net accretion of discount on investments

889

89

Payment-in-kind

292

102

Net realized gain (loss) on investments

9

(1

)

Investments sold or repaid

(37,311

)

(988

)

Investments, end of period

577,207

278,586

Amount of investments funded, at principal

First lien debt investments

337,340

280,746

Other debt investments

-

1,491

Equity (2)

369

100

Total

337,709

282,337

Amount of investments sold/fully repaid, at principal

First lien debt investments

(27,688

)

-

Total

$

(27,688

)

$

-

(1)
Includes new investment commitments, excluding sale/repayments and including unfunded investment commitments.
(2)
Represents dollar amount of equity investments funded.

Investment Performance Rating

As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments. Our Investment Adviser has developed a classification system to group investments into four categories. The investments are evaluated regularly and assigned a category based on certain credit metrics. Our Investment Adviser's ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments. Please see below for a description of the four categories of the Investment Adviser's Internal Risk Rating system:

Risk Rating 1 - In the opinion of our Investment Adviser, investments in Risk Rating 1 involve the least amount of risk relative to our initial cost basis at the time of origination or acquisition. Risk Rating 1 investments performance is above our initial underwriting expectations and the business trends and risk factors present are generally favorable, which trends or factors may include the performance of the portfolio company or the likelihood of a potential exit.

Risk Rating 2 - In the opinion of our Investment Adviser, investments in Risk Rating 2 involve a level of risk relative to our initial cost basis at the time of origination or acquisition. Risk Rating 2 investments are generally performing in line with our initial underwriting expectations and risk factors to ultimately recoup the cost of our principal investment are neutral to favorable. All new originated or acquired investments are initially included in Risk Rating 2.

Risk Rating 3 - In the opinion of our Investment Adviser, investments in Risk Rating 3 indicate that the risk to our ability to recoup the initial cost basis at the time of origination or acquisition has increased materially since the origination or acquisition of the investment, such as due to declining financial performance and non-compliance with debt covenants; however, principal and interest payments are not more than 120 days past due.

Risk Rating 4 - In the opinion of our Investment Adviser, investments in Risk Rating 4 involve a borrower performing substantially below expectations and indicate that the loan's risk has increased substantially since origination or acquisition. Most or all of the debt covenants are out

of compliance and payments are substantially delinquent. For Risk Rating 4 investments, it is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis at the time of origination or acquisition upon exit.

The distribution of our portfolio on the Investment Adviser's Internal Risk Rating System is as follows:

December 31, 2025

December 31, 2024

Fair Value

% of
Total

Fair Value

% of
Total

Risk rating 1

$

-

-

%

$

1,022

0.4

%

Risk rating 2

578,470

100.0

279,362

99.6

Risk rating 3

-

-

-

-

Risk rating 4

-

-

-

-

$

578,470

100.0

%

$

280,384

100.0

%

The table below presents the amortized cost of our performing and non-accrual debt investments as of the following periods:

December 31, 2025

December 31, 2024

Amortized
Cost

% of
Total

Amortized
Cost

% of
Total

Performing

$

577,207

100.0

%

$

278,586

100.0

%

Non-accrual

-

-

-

-

Total

$

577,207

100.0

%

$

278,586

100.0

%

Investments are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is reversed when an investment is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the investment is placed on non-accrual status. We may determine to not place an investment on non-accrual status if the investment has sufficient collateral value and is in the process of collection.

CONSOLIDATED RESULTS OF OPERATIONS

The following table represents our operating results:

For the Year Ended
December 31, 2025

For the period
from
May 9, 2024
(inception)
through
December 31,
2024

Total investment income

$

39,937

$

7,098

Less: Net expenses

14,451

2,502

Net investment income (loss)

25,486

4,596

Less: Excise tax expense

10

-

Net investment income (loss) after taxes

25,476

4,596

Net change in unrealized appreciation (depreciation)

(524

)

1,798

Net realized gain (loss)

9

(1

)

Net increase (decrease) in Members' Capital resulting from operations

24,961

6,393

Preferred unit dividend

(185

)

(52

)

Net increase (decrease) in Members' Capital resulting from operations attributable to holders of Common Units

$

24,776

$

6,341

Investment Income

Investment income was as follows:

For the Year Ended
December 31, 2025

For the period
from
May 9, 2024
(inception)
through
December 31,
2024

Investment income:

Interest income

$

38,726

$

6,989

Payment-in-kind

295

102

Dividend Income

11

-

Other income

905

7

Total investment income

$

39,937

$

7,098

In the table above, total investment income increased from $7,098 for the period from May 9, 2024 (inception) through December 31, 2024 to $39,937 for the year ended December 31, 2025. The increase was primarily driven by our deployment of capital. The size of our investment portfolio at amortized cost increased from $278,586 to $577,207 as of December 31, 2024 and December 31, 2025, respectively.

Additionally, for the year ended December 31, 2025, we recorded $311 of non-recurring interest income (e.g., prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts, etc.) as compared to $5 for the period from May 9, 2024 (inception) through December 31, 2024.

Expenses

Expenses were as follows:

For the Year Ended
December 31, 2025

For the period
from
May 9, 2024
(inception)
through
December 31,
2024

Expenses:

Interest and other financing expenses

$

11,715

$

737

Management fees

667

178

Organization and offering costs

250

353

Professional fees

1,262

359

Directors' fees

208

62

General and administrative expenses

349

813

Total expenses

$

14,451

$

2,502

Excise tax expense

$

10

$

-

Interest and Other Financing Expenses

Interest and other financing expenses, including unused commitment fees, amortization of debt issuance costs and deferred financing costs, were $11,715 and $737 for the year ended December 31, 2025 and for the period from May 9, 2024 (inception) through December 31, 2024, respectively. The increase was primarily driven by our deployment of capital. For the year ended December 31, 2025 and for the period from May 9, 2024 (inception) through December 31, 2024, weighted average borrowings outstanding were $158,738 and $19,554, respectively.

Management Fees

Management fees, were $667 and $178 for the year ended December 31, 2025 and for the period from May 9, 2024 (inception) through December 31, 2024, respectively. For more information on base management fees, including terms thereof, see Note 3. "Related Party Transactions" in the Notes to Consolidated Financial Statements.

Professional Fees and Other Expenses

Professional fees include legal, audit, tax, valuation and other professional fees incurred related to the management of our Company, which include costs of a financial printer utilized for certain preparation, printing and distribution services. General and administrative expenses include insurance, filing, research, subscriptions and other costs.

Organizational and Offering Costs

Organization and offering costs include expenses incurred in our initial formation and our offering of Units.

Net Realized Gain (Loss) and Unrealized Gain (Loss) on Investments

For the Year Ended
December 31, 2025

For the period
from
May 9, 2024
(inception)
through
December 31,
2024

Net realized and unrealized gains (losses) on investment transactions:

Net realized gain (loss):

Non-controlled/non-affiliated investments

$

9

$

(1

)

Net change in unrealized appreciation (depreciation):

Non-controlled/non-affiliated investments

(535

)

1,798

Translation of assets and liabilities in foreign currencies

11

-

Net realized and unrealized gains (losses)

$

(515

)

$

1,797

For the year ended December 31, 2025, net realized gain on investments were $9. For the period from May 9, 2024 (inception) through December 31, 2024, net realized losses were $(1). Net realized losses on investments was primarily due to the sale and/or restructuring of certain portfolio companies.

For the year ended December 31, 2025, net change in unrealized appreciation (depreciation) on our investments of $(524) and for the period from May 9, 2024 (inception) through December 31, 2024, the net change in unrealized appreciation (depreciation) on our investments of $1,798, the decrease was primarily driven by changes in spreads in the primary and secondary markets.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We generate cash from the net proceeds of offerings of our Common Units, net borrowings from our credit facility, and through cash flows from operations, including investment sales and repayments as well as income earned from on investments and cash equivalents. As of December 31, 2025, we had one revolving credit facility outstanding, as described in "-Debt"below. We may also from time to time enter into new credit facilities, increase the size of existing credit facilities or issue debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.

As of December 31, 2025, we had approximately $22.8 million of cash, which taken together with our approximately $314.5 million of availability under the UBS Facility (subject to borrowing base availability), (as defined in "Note 6. Debt" in the notes to the accompanying consolidated financial statements), and our approximately $434.6 million of uncalled capital commitments to purchase Units, or capital commitments, we expect to be sufficient for our investing activities and sufficient to conduct our operations in the near term. As of December 31, 2025, we believed we had adequate financial resources to satisfy unfunded portfolio company commitments of $191.4 million.

Equity

As of December 31, 2025, we had received aggregate capital commitments of approximately $745.9 million.

The following table summarizes the total Common Units issued and proceeds received from the Company's capital drawdowns for the year ended December 31, 2025 and for the period from May 9, 2024 (inception) through December 31, 2024:

Common Unit Date

Common Units
Issued

Amount

For the Year Ended December 31, 2025

September 29, 2025

1,470,297

$

29,700

November 25, 2025

1,469,570

29,700

Total

2,939,867

$

59,400

For the period from May 9, 2024 (inception) through December 31, 2024

June 14, 2024

6,942

$

139

June 18, 2024

23,058

461

June 28, 2024

10,000

200

July 16, 2024

20,000

400

August 28, 2024

35,000

700

September 20, 2024

12,500,000

250,000

Total

12,595,000

$

251,900

Distributions

Common Units

The following table summarizes our distributions declared and payable for the year ended December 31, 2025 to the holders of Common Units:

Date Declared

Record Date

Payment Date

Per Unit
Amount

Total Amount

February 27, 2025

March 31, 2025

April 29, 2025

$

0.44

$

5,500

May 8, 2025

June 30, 2025

July 29, 2025

0.47

5,920

August 5, 2025

September 30, 2025

October 30, 2025

0.46

6,470

November 4, 2025

December 31, 2025

January 29, 2026

0.47

7,301

Total Distributions

$

1.84

$

25,191

The following table summarizes our distributions declared and payable for the period from May 9, 2024 (inception) through December 31, 2024 to the holders of Common Units:

Date Declared

Record Date

Payment Date

Per Unit
Amount

Total Amount

November 4, 2024

December 31, 2024

January 27, 2025

$

0.38

$

4,786

Total Distributions

$

0.38

$

4,786

Preferred Units

For the year ended December 31, 2025, we accrued and paid $185 of distributions to holders of the Series A Preferred Units. For the period from May 9, 2024 (inception) through December 31, 2024, we accrued and paid $52 of distributions to holders of the Preferred Units.

Debt

Our outstanding debt obligations were as follows:

December 31, 2025

December 31, 2024

Aggregate
Principal
Committed

Outstanding
Principal

Unused
Portion

Aggregate
Principal
Committed

Outstanding
Principal

Unused
Portion

UBS Funding Facility

$

600,000

$

285,500

$

314,500

$

300,000

$

45,500

$

254,500

For further details, see Note 6. "Debt" in the Notes to Consolidated Financial Statements.

RECENT DEVELOPMENTS

January Tender Declarations

On December 31, 2025, we announced a tender offer that commenced on January 2, 2026 and ended at 12:01 a.m., Eastern Time, on January 31,

2026 (the "Offer") to repurchase up to 2,575,000 of our outstanding Units. Because there is no secondary trading market for our Units, the Board of Directors determined, after consideration of various matters, that the Offer was in the best interests of unitholders in order to provide liquidity for our unitholders. Approximately 2,567,661 of our Units were validly tendered and not withdrawn prior to the expiration of the Offer. The Units were repurchased at a price of $20.28 per Unit, which represents the net asset value per Unit as of January 31, 2026.

The payment of the purchase price of the Units tendered was promptly made in cash issued to the unitholders whose tenders were accepted for purchase by us in accordance with the terms of the Offer. While our Board has discretion to offer to repurchase units in any given quarter, we do not currently expect to make regular tender offers on a quarterly basis, if at all.

February Issuances and Distribution Declarations

On February 10, 2026, we delivered a capital drawdown notice to our unitholders relating to the sale of approximately 3,654,035 shares of our Units for an aggregate offering price of $74.25 million. The sale closed on February 18, 2026.

On February 26, 2026, our Board of Directors declared a distribution equal to an amount up to the our taxable earnings per Common Unit, including net investment income (if positive) for the period January 1, 2026 through March 31, 2026, payable on or about April 30, 2026 to common unitholders of record as of March 31, 2026.

CRITICAL ACCOUNTING ESTIMATES

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting estimates including those relating to the valuation of our investment portfolio, should be read in connection with our consolidated financial statements in Part II, Item 8 of this Report, including Note 2 "Significant Accounting Policies."

We consider the most significant accounting policies to be those related to our Investments, Revenue Recognition, Deferred Financing Costs and Debt Issuance Costs and Income Taxes. The valuation of investments is our most significant critical estimate. The most significant input is the discount rate used in yield analysis that is based on comparable market yields. Significant increases in the discount rates in isolation would result in a significantly lower fair value measurement. For further discussion and disclosure of key inputs and considerations related to this estimate, refer to Note 5 "Fair Value Measurements" included in the notes to the consolidated financial statements included in this Report.

RELATED PARTY TRANSACTIONS

We have entered into a number of business relationships with affiliated or related parties, including the following (which are defined in the notes to the accompanying consolidated financial statements if not defined herein):

•
the Investment Advisory Agreement;
•
the Administration Agreement; and
•
the Indemnification Agreement.

See Note 3. "Related Party Transactions" to our consolidated financial statements included in this Report.

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