Nuveen Churchill Direct Lending (NCDL) Q3 2024 earnings summary

Executive summary

• Net investment income per share rose to $0.58 in Q3 2024, fully covering both regular and special dividends, with net investment income totaling $31.5 million, up from $21.7 million in Q3 2023.

• Net asset value per share increased to $18.15 from $18.03 at the end of Q2, with net assets reaching $990.6 million as of September 30, 2024.

• Portfolio grew to $2.05 billion at fair value, diversified across 202 companies and 26 industries, with 90.1% first lien debt.

• Annualized ROE on net investment income was 12.6% and on net income was 14.7% for Q3 2024.

• Three portfolio companies were on non-accrual, representing 0.55% of fair value and 1.4% at cost, with a stable weighted average internal risk rating of 4.2.

Financial highlights

• Net investment income for Q3 2024 was $31.5 million, up from $31.0 million in Q2 2024, and total investment income rose to $60.3 million, up from $41.7 million year-over-year.

• Net increase in net assets from operations was $0.67 per share, up from $0.37 in Q2, aided by $0.09 per share in net realized and unrealized gains.

• Paid a total dividend of $0.55 per share in October, equating to a 12.1% annualized yield on NAV.

• Total assets reached $2.1 billion as of September 30, 2024, with $361 million in liquidity.

• Debt-to-equity ratio increased to 1.11x, with $1.1 billion in total debt and $990.6 million in net assets.

Outlook and guidance

• Management anticipates increased M&A activity in 2025, driven by a potential rate reduction cycle and robust deal flow.

• Declared a regular dividend of $0.45 per share for Q4 2024 and a special dividend of $0.10 per share payable in January 2025.

• Focus remains on disciplined investment in private equity-backed U.S. middle market companies and defensive, cash-generative businesses.

• Expects to benefit from increased transaction activity as rate reduction cycle spurs M&A.

• Management expects continued strong investment activity, supported by robust liquidity and capital resources.