Sound Point Meridian (SPMC) Q3 25/26 earnings summary

Executive summary

• Net investment income for the quarter was $0.44 per share, with a net realized loss of ($0.05) per share and NAV per share at $14.02 as of December 31, 2025.

• Distributions paid during the quarter totaled $0.75 per share, with an annualized yield of 21.8% based on the year-end share price.

• Portfolio fair value (excluding cash) was $473.49 million, diversified across 97 CLOs managed by 30 managers and 1,596 unique senior secured loans.

• Declared monthly distributions for Q2 2026: $0.20 per common share, $0.16667 per Series A Preferred, $0.1640625 per Series B Preferred.

• Management's unaudited estimate of NAV per share as of January 31, 2026, was $13.40.

Financial highlights

• Total investment income for the quarter was $18.0 million; total expenses were $9.0 million, resulting in net investment income of $9.0 million.

• Net income for the quarter was a loss of ($43.94) million, primarily due to unrealized losses of ($51.83) million.

• NAV per share declined from $16.91 in the prior quarter to $14.02.

• Leverage ratio increased to 39.1% from 35% in the previous quarter.

• Received $29.6 million in cash distributions from the investment portfolio during the fourth fiscal quarter.

Outlook and guidance

• Declared distributions of $0.25 per common share for January, February, and March 2026, maintaining a high annualized yield.

• Distributions are generally paid from net investment income and may include capital gains or return of capital.

• Management continues to focus on actively managed, flexible investment strategies with an emphasis on relative value and downside protection.