NCDL — Nuveen Churchill Direct Lending Corp.

Summary of Nuveen Churchill Direct Lending Corp. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Investment Income: $0.44 per share for Q4 2025, up from $0.43 in Q3 2025.
• Total Investment Income: Decreased to $50 million from $51.1 million in Q3 2025, primarily due to lower portfolio yields.
• Net Asset Value (NAV): $17.72 per share at year-end, down from $17.85 at the end of Q3 2025.
• Distributions: Total distributions of $1.90 per share for 2025, yielding 10.7% based on year-end NAV. A quarterly distribution of $0.40 per share was declared for Q1 2026.
• Debt Ratios: Gross debt-to-equity ratio at 1.27x, net debt-to-equity ratio at 1.2x.
• Portfolio Performance: Only four companies on non-accrual status, representing 0.5% of the total portfolio at fair value.

2. Strategic Updates and Business Highlights

• Investment Strategy: Focused on traditional middle-market companies with $10 million to $100 million in EBITDA, emphasizing conservative underwriting and diversification.
• Portfolio Composition: 90% of the portfolio consists of senior loans, with a total of 227 companies in the portfolio.
• Originations: Gross originations of $59 million in Q4 2025, significantly higher than $29 million in Q3 2025.
• Market Position: NCDL is well-positioned to capitalize on the current market environment, with a strong pipeline and increased M&A activity anticipated in 2026.

3. Forward Guidance and Outlook

• Market Conditions: The U.S. economy showed resilience with GDP growth of 2.2% for 2025, and further interest rate cuts are expected in 2026, which may enhance deal flow.
• Investment Activity: Anticipated continued growth in M&A activity and private equity sponsor confidence, leading to increased transaction opportunities.
• Dividend Policy: Aiming for a stable regular dividend of $0.36 per share, supplemented by additional distributions based on excess earnings.

4. Bad News, Challenges, or Points of Concern

• Declining Metrics: Total investment income decreased slightly, and NAV declined due to underperforming portfolio companies.
• Interest Rate Impact: Recent interest rate cuts may affect earnings and return profiles, with spreads remaining below 500 basis points on average.
• Credit Quality: While overall credit quality remains strong, the internal watchlist increased slightly to 8% of fair value, indicating some potential risk.

5. Notable Q&A Insights

• Capital Allocation: Management discussed the balance between share repurchases and new loans, emphasizing a programmatic approach to repurchases based on market conditions.
• Market Volatility: The recent public market volatility may enhance NCDL's pricing power in negotiations, potentially leading to better loan structures.
• Software Exposure: NCDL has limited exposure to software companies, focusing instead on traditional cash flow-generating businesses, avoiding high-risk ARR loans.

In conclusion, NCDL reported solid operational performance in 2025 despite external market challenges. The company remains optimistic about its strategic positioning and growth prospects for 2026, while also acknowledging potential risks related to interest rates and credit quality.