MSC Income Fund, Inc. Q4 FY2025 earnings call

• Fourth quarter return on equity 16.3%, favorable adjusted net investment income per share, significant increase in fair value of investments including net realized gains in private loan and lower middle market portfolios, resulting in NAV per share increase of $0.31 from prior quarter to $15.85. • Private loan investment activity in fourth quarter returned to normal level, net increase of $57 million. Exited two private loan portfolio equity investments with total realized gains of $16 million. Fully exited Mystic Logistics with $6 million realized gain. • Lower middle market portfolio has significant interest from potential buyers leading to additional realizations, and benefits from follow-on investments. • Fund's total investment income for fourth quarter $34.9 million, NII excluding capital gains incentive fee $17.2 million or 37 cents per share.

Private loan portfolio: Fourth quarter net increase of $57 million in private loan investments, 61% of total investment portfolio at fair value, 92% secured debt, over 99% first lien, 96% floating rate loans, weighted average yield 10.7%. Lower middle market portfolio: Fourth quarter net increase of $15 million, 36% of total investment portfolio, 53% debt and 47% equity investments, 99% first lien loans, weighted average yield over 12%.

• Fund expects to continue dividend policy with total quarterly dividends generally consistent with pre-tax ANII per share. • Private loan investment pipeline is above average. • Expanded regulatory leverage capacity became effective end of January 2026, with goal to achieve fully invested portfolio. • Plan to deploy proceeds from lower middle market investments into private loan investment opportunities.

Q: Asked about decline in interest income quarter on quarter and impact of lower middle market portfolio outlook on MSIS, A: Interest income decline due to timing of investment activity, lower middle market portfolio realizations impact MSC Income Fund similarly to Main Street, need to weigh best use of proceeds.

Q: Asked about odds of lower middle market portfolio getting down to 20% by end of year/next year, A: Transition to 20% will take time, influenced by proceeds retention, portfolio growth.

Q: Asked about portfolio leverage outlook, A: Expanded regulatory leverage received, actively working to get additional liquidity.

Q: Asked about private loan spreads, A: Spreads have stabilized in 5 to 575 range.

Q: Asked about underlying portfolio companies performance and LMM portfolio long-term plan, A: Portfolio companies have consistent performance, LMM portfolio will take long time to roll off as proceeds deployed into private loan investments.

Q: Asked about target leverage, A: Target leverage 1.15 to 1.25 debt to equity, not expecting change with mix shift.

Q: Asked about impact of AI on software allocation, A: Software exposure is mid-single-digit, value-focused, insulated from some AI boom as focused on infrastructure software