Nuveen Churchill Direct Lending (NCDL) Q2 2024 earnings summary

Executive summary

• Net investment income per share was $0.57 for Q2 2024, supporting a 12.3% annualized dividend yield and up from $0.56 in Q1 2024.

• Net asset value per share declined to $18.03 from $18.21, primarily due to unrealized losses and new non-accruals.

• Portfolio value rose to $2.0 billion across 198 companies and 26 industries, with the top 10 investments representing 14.4% of total value.

• Paid a $0.45 regular dividend and a $0.10 special dividend per share for Q2 2024; declared the same regular dividend for Q3 2024.

• Record origination activity with $360 million in new loans, over 95% in first lien senior secured loans.

Financial highlights

• Net investment income for Q2 2024 was $31.0 million, up from $18.7 million in Q2 2023, with total assets reaching $2.08 billion.

• Net increase in net assets from operations was $0.37 per share, impacted by $0.20 per share in net realized and unrealized losses.

• Weighted average asset yield was 11.4%, with portfolio company net leverage at 4.8x and interest coverage at 2.2x for first lien loans.

• Debt-to-equity ratio at quarter-end was 1.04x, within the target range.

• Distributions declared from net investment income were $30.1 million for Q2 2024.

Outlook and guidance

• Management is optimistic about strong performance in the second half of 2024, supported by a robust origination pipeline and focus on the core middle market.

• Expectation to continue rotating portfolio toward traditional middle market loans with favorable spreads and documentation.

• Anticipates continued high deal flow and strong borrower health, with no signs of recession or pullback in spending.

• Closely monitoring macroeconomic risks, including interest rate volatility and inflation, but views private credit environment as attractive.

• Third quarter regular distribution of $0.45 per share declared, with another special $0.10 distribution scheduled.