Nuveen Churchill Direct Lending Corp. Q4 FY2025 earnings call

• 2025 had various headlines like change in administration, tariffs, etc., which led to market fears and BDC stock pullback, but private credit was in focus. NCDL had a successful year with 11% ROE on net investment income, paid $1.90 per share in total distributions (10.7% yield based on year-end NAV), issued $300 million of unsecured notes in Q1 2025. - Broader US economy was resilient in 2025 with GDP growth. M&A activity had positive momentum in Q4 2025. Fed continued interest rate cuts in 2025 with pauses in Jan 2026. - Churchill platform saw increase in transaction activity, especially for high-quality assets in resilient sectors. NCDL operated at upper end of target leverage range, focused on reinvesting cash from repayments and sales into high-quality assets. - Portfolio remained healthy with strong performance from borrowers, rigorous underwriting, etc. Weighted average internal risk rating was 4.2, internal watch list ~8% of fair value. Top 10 portfolio companies ~13% of total fair value. Limited software exposure, with software sector accounting for 4% of portfolio and true SaaS businesses ~2%.

For NCDL, net investment income was 44 cents per share in the fourth quarter compared to 43 cents in the third quarter. Gross originations totaled ~$59 million in Q4 vs ~$29 million in Q3. Net asset value was $17.72 per share at year end, down from $17.85 per share at Sep 30, 2025, primarily due to a slight decrease in fair value of certain underperforming portfolio companies. Senior loans represent approximately 90% of the fair value of the overall portfolio. Non-accrual status at year end was 0.5% of total portfolio at fair value. The Churchill platform saw strong asset growth and new originations in Q4 2025, with full year 2025 closing or committing $16.3 billion in investments across 389 transactions.

• Declared a 40 cents per share quarterly distribution in Q1 2026, consisting of a base distribution of $0.36 per share and a supplemental distribution of $0.04 per share. - Board authorized a new $50 million share repurchase program. - Expect to continue redeploying capital received from repayments to maintain leverage at upper end of target range and invest in high-quality assets. - Believes increasing deal flow and financing opportunities in 2026 due to interest rate cut cycle and corporate management focus on long-term initiatives.

• Forward-looking statements involve known and unknown risks, uncertainties, etc. Actual results may differ materially from forward-looking statements. - Market conditions, economic environment, geopolitical tensions, and changes in interest rates can impact performance. - Software exposure concerns and potential disruption from AI could pose risks, although NCDL has limited exposure. - Credit quality risks related to portfolio companies, including potential non-accruals.

Q: With commentary on looking to say at the upper end of the leverage target, can you talk about how you would weigh share repurchase versus making new loans and kind of just a little bit on the thought process there?

A: It's the classic capital allocation thought process, evaluating discount and reinvestment in portfolio. Share repurchase programs are programmatic to take advantage of discounts in trading price and operate independently while maintaining leverage within target range of 1 to 1.25 times debt to equity.

Q: The investment activity was really strong to end 2025. Just Maybe you could share your thoughts on what the recent public market volatility has, you know, how that may have shaped your outlook for activity in 2026. Should we kind of expect it, again, to be a little bit more back-end weighted, given the kind of near-term volatility we're seeing?

A: Deal activity has been extraordinarily busy across the platform. Some public market volatility has generally worked in favor of them as a mid-market lender. Spreads have stabilized around 450 to 475 level and don't see material tightening in first half of 2026. Interest rates coming down will continue to drive and unlock sponsor activity, so broader trend remains very good.

Q: Thanks. And I appreciate the commentary on software. Clearly, you have a very small exposure to there, much smaller than a lot of the peers in the BDCs. Maybe you'd share a little bit of why you've avoided that historically and why that's not an area, because obviously it was a very kind of steady earnings business or industry for a long time.

A: From a credit perspective, they are very traditional in underwriting, looking at fundamental cash flow metrics. They have never done an ARR loan. Focus on financing recurring cash flow, leading them to businesses like specialized managed service providers, systems integrators, cybersecurity consultants which are more traditional and away from SaaS businesses. Their underwriting approach focuses on fundamentals of the company, cash flow generating, mature businesses with modest leverage and non-discretionary nature.