Quarterly report [Sections 13 or 15(d)]

Debt (Tables)

v3.25.2
Debt (Tables)
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Schedule of Available and Outstanding Debt
As of June 30, 2025 and December 31, 2024, the Company had the following available and outstanding debt:
(in thousands) June 30, 2025 December 31, 2024
  Total Available Principal
Outstanding
Carrying Value(1)
Total Available Principal
Outstanding
Carrying Value(1)
SBA Debentures(2)(4)
$ 350,000  $ 350,000  $ 340,422  $ 350,000  $ 279,000  $ 271,371 
February 2025 Notes —  —  —  50,000  50,000  49,981 
June 2025 Notes —  —  —  70,000  70,000  69,919 
June 2025 3-Year Notes —  —  —  50,000  50,000  49,926 
March 2026 A Notes 50,000  50,000  49,937  50,000  50,000  49,889 
March 2026 B Notes 50,000  50,000  49,931  50,000  50,000  49,880 
September 2026 Notes 325,000  325,000  323,812  325,000  325,000  323,321 
January 2027 Notes 350,000  350,000  347,930  350,000  350,000  347,265 
2028 Convertible Notes 287,500  287,500  279,099  —  —  — 
June 2030 Notes 350,000  350,000  341,827  —  —  — 
2031 Asset-Backed Notes 111,585  111,585  111,150  119,475  119,475  118,769 
2033 Notes 40,000  40,000  39,097  40,000  40,000  39,043 
MUFG Bank Facility(2)
440,000  66,000  66,000  400,000  116,000  116,000 
SMBC Facility(2)(3)(5)
475,000  115,135  114,961  475,000  283,790  283,591 
Total $ 2,829,085  $ 2,095,220  $ 2,064,166  $ 2,329,475  $ 1,783,265  $ 1,768,955 
(1)Except for the SMBC Facility and MUFG Bank Facility, all carrying values represent the principal amount outstanding less the remaining unamortized debt issuance costs and unaccreted premium or discount, if any, associated with the debt as of the balance sheet date.
(2)Availability subject to the Company meeting the borrowing base requirements.
(3)“Total Available” includes $175.0 million of available commitment through the letter of credit facility as of June 30, 2025 and December 31, 2024.
(4)As of June 30, 2025 and December 31, 2024, the total available debt under the SBA Debentures was $350.0 million, of which $175.0 million was available to HC IV and $175.0 million was available to SBIC V.
(5)In November 2024, the Company amended its SMBC Facility and converted a portion of the existing revolver facility into a term loan facility in connection therewith. As of June 30, 2025, the term loan portion of the SMBC Facility for total available, outstanding principal, and carrying value was $25.0 million, $25.0 million, and $24.8 million respectively. As of December 31, 2024, the term loan portion of the SMBC Facility for total available, outstanding principal, and carrying value was $25.0 million, $25.0 million, and $24.8 million, respectively.
The overall weighted average interest cost, cost of debt and debt outstanding for the Company for the three and six months ended June 30, 2025 and 2024 were as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2025 2024 2025 2024
Weighted average interest cost
 4.4  % 4.4  % 4.3  % 4.3  %
Weighted average cost of debt(1)
5.0  % 5.0  % 4.9  % 5.0  %
Weighted average debt outstanding
 $ 2,045,905  $ 1,716,077  $ 1,931,719  $ 1,675,984 
(1)Cost of debt includes interest and fees.
The Company held the following SBA debentures outstanding principal balances as of June 30, 2025 and December 31, 2024:
(in thousands)
Issuance/Pooling Date		 Maturity Date
Interest Rate(1)
June 30, 2025 December 31, 2024
March 26, 2021 September 1, 2031 1.58% $ 37,500  $ 37,500 
June 25, 2021 September 1, 2031 1.58% 16,200  16,200 
July 28, 2021 September 1, 2031 1.58% 5,400  5,400 
August 20, 2021 September 1, 2031 1.58% 5,400  5,400 
October 21, 2021 March 1, 2032 3.21% 14,000  14,000 
November 1, 2021 March 1, 2032 3.21% 21,000  21,000 
November 15, 2021 March 1, 2032 3.21% 5,200  5,200 
November 30, 2021 March 1, 2032 3.21% 20,800  20,800 
December 20, 2021 March 1, 2032 3.21% 10,000  10,000 
December 23, 2021 March 1, 2032 3.21% 10,000  10,000 
December 28, 2021 March 1, 2032 3.21% 5,000  5,000 
January 14, 2022 March 1, 2032 3.21% 4,500  4,500 
January 21, 2022 March 1, 2032 3.21% 20,000  20,000 
November 8, 2024 March 1, 2035 5.09% 30,000  30,000 
December 6, 2024 March 1, 2035 5.09% 33,600  33,600 
December 12, 2024 March 1, 2035 5.09% 8,400  8,400 
December 20, 2024 March 1, 2035 5.09% 32,000  32,000 
February 5, 2025 March 1, 2035 5.09% 6,000  — 
March 28, 2025(2)
September 1, 2035 4.89% 10,000  — 
April 25, 2025(2)
September 1, 2035 4.91% 15,000  — 
May 9, 2025(2)
September 1, 2035 4.94% 5,000  — 
June 5, 2025(2)
September 1, 2035 4.98% 17,000  — 
June 12, 2025(2)
September 1, 2035 4.98% 3,000  — 
June 25, 2025(2)
September 1, 2035 5.00% 15,000  — 
Total SBA Debentures     $ 350,000  $ 279,000 
(1)Interest rates are determined initially at issuance and reset to a fixed rate at the debentures pooling date. The rates are inclusive of annual SBA charges.
(2)As of June 30, 2025, $65.0 million of drawn SBA Debentures are scheduled to be pooled on September 25, 2025. The interest rate disclosed is the current effective interim interest rate.
Schedule of Debt Issuance Costs, Net of Accumulated Amortization
Debt issuance costs, net of accumulated amortization, were as follows as of June 30, 2025 and December 31, 2024:
(in thousands) June 30, 2025 December 31, 2024
SBA Debentures $ 9,578  $ 7,629 
February 2025 Notes —  19 
June 2025 Notes —  81 
June 2025 3-Year Notes —  74 
March 2026 A Notes 63  111 
March 2026 B Notes 69  120 
September 2026 Notes 1,188  1,679 
January 2027 Notes 2,070  2,735 
2028 Convertible Notes 8,401  — 
June 2030 Notes 8,173  — 
2031 Asset-Backed Notes 435  706 
2033 Notes 903  957 
MUFG Bank Facility(1)
4,069  1,770 
SMBC Facility(1)(2)
2,620  2,693 
Total $ 37,569  $ 18,574 
(1)The MUFG Bank Facility and SMBC Facility are line-of-credit arrangements, the debt issuance costs associated with these instruments are included within Other assets on the Consolidated Statements of Assets and Liabilities in accordance with ASC Subtopic 835-30.
(2)As part of the November 2024 amendment of the SMBC Facility, the existing revolver facility was split into a revolver facility and a term loan facility. As of June 30, 2025, the debt issuance costs, net of accumulated amortization of the revolver facility is $2.4 million and the term loan is $0.2 million. As of December 31, 2024, the debt issuance costs, net of accumulated amortization of the revolver facility is $2.5 million and the term loan is $0.2 million.
Components of Interest Expense, Related Fees and Cash Paid for Interest Expense for Debt
For the three and six months ended June 30, 2025, the components of interest expense, related fees, losses on debt extinguishment and cash paid for interest expense for debt were as follows:
(in thousands) Three Months Ended June 30, 2025 Six Months Ended June 30, 2025
Description
Interest expense(1)
Amortization of debt issuance cost (loan fees) Unused facility and other fees (loan fees) Total interest expense and fees Cash paid for interest expense
Interest expense(1)
Amortization of debt issuance cost (loan fees) Unused facility and other fees (loan fees) Total interest expense and fees Cash paid for interest expense
SBA Debentures $ 2,926  $ 263  $ —  $ 3,189  $ —  $ 5,425  $ 490  $ —  $ 5,915  $ 3,971 
February 2025 Notes —  —  —  —  —  202  19  —  221  1,070 
June 2025 Notes 520  41  —  561  1,508  1,274  81  —  1,355  1,508 
June 2025 3-Year Notes 683  35  —  718  1,500  1,433  74  —  1,507  1,500 
March 2026 A Notes 563  24  —  587  —  1,125  48  —  1,173  1,125 
March 2026 B Notes 569  26  —  595  —  1,137  52  —  1,189  1,138 
September 2026 Notes 2,174  204  —  2,378  —  4,349  407  —  4,756  4,266 
January 2027 Notes 3,078  206  —  3,284  —  6,157  413  —  6,570  5,906 
2028 Convertible Notes 3,725  351  —  4,076  —  4,552  428  —  4,980  — 
June 2030 Notes 907  37  —  944  —  907  37  —  944  — 
2031 Asset-Backed Notes(2)
1,471  80  —  1,551  1,441  2,963  160  —  3,123  2,898 
2033 Notes 625  27  —  652  625  1,250  54  —  1,304  1,250 
MUFG Bank Facility 1,975  382  639  2,996  2,330  4,545  824  1,199  6,568  4,509 
SMBC Facility 3,714  203  229  4,146  4,024  7,309  411  448  8,168  7,867 
Total $ 22,930  $ 1,879  $ 868  $ 25,677  $ 11,428  $ 42,628  $ 3,498  $ 1,647  $ 47,773  $ 37,008 
(1)Interest expense includes amortization of OID for the three months ended June 30, 2025, of $42 thousand, $126 thousand, $311 thousand, $32 thousand, and $37 thousand related to the September 2026 Notes, January 2027 Notes, 2028 Convertible Notes, June 2030 Notes, and 2031 Asset-Backed Notes, respectively. Interest expense includes amortization of OID for the six months ended June 30, 2025, of $83 thousand, $251 thousand, $379 thousand, $32 thousand, and $75 thousand related to the September 2026 Notes, January 2027 Notes, 2028 Convertible Notes, June 2030 Notes, and 2031 Asset-Backed Notes, respectively.
(2)During the three and six months ended June 30, 2025, we have recognized $21 thousand and $36 thousand, respectively, of loss on debt extinguishment for 2031 Asset-Backed Notes.
For the three and six months ended June 30, 2024, the components of interest expense, related fees, and cash paid for interest expense for debt were as follows:
(in thousands) Three Months Ended June 30, 2024 Six Months Ended June 30, 2024
Description
Interest expense(1)
Amortization of debt issuance cost (loan fees) Unused facility and other fees (loan fees) Total interest expense and fees Cash paid for interest expense
Interest expense(1)
Amortization of debt issuance cost (loan fees) Unused facility and other fees (loan fees) Total interest expense and fees Cash paid for interest expense
SBA Debentures $ 1,138  $ 146  $ —  $ 1,284  $ —  $ 2,275  $ 292  $ —  $ 2,567  $ 2,275 
July 2024 Notes 1,252  74  —  1,326  —  2,504  148  —  2,652  2,504 
February 2025 Notes 535  28  —  563  —  1,070  57  —  1,127  1,070 
June 2025 Notes 754  41  —  795  1,508  1,508  81  —  1,589  1,508 
June 2025 3-Year Notes 750  39  —  789  1,500  1,500  78  —  1,578  1,500 
March 2026 A Notes 562  23  —  585  —  1,125  47  —  1,172  1,125 
March 2026 B Notes 569  26  —  595  —  1,138  52  —  1,190  1,138 
September 2026 Notes 2,174  204  —  2,378  —  4,349  408  —  4,757  4,265 
January 2027 Notes 3,077  207  —  3,284  —  6,156  413  —  6,569  5,906 
2031 Asset-Backed Notes 1,904  100  —  2,004  1,856  3,807  200  —  4,007  3,712 
2033 Notes 625  27  —  652  625  1,250  54  —  1,304  1,250 
MUFG Bank Facility 2,143  438  634  3,215  2,155  4,076  885  1,243  6,204  3,721 
SMBC Facility 3,679  180  179  4,038  3,808  6,028  360  425  6,813  5,562 
Total $ 19,162  $ 1,533  $ 813  $ 21,508  $ 11,452  $ 36,786  $ 3,075  $ 1,668  $ 41,529  $ 35,536 
(1)Interest expense includes amortization of OID for the three months ended June 30, 2024 of $41 thousand, $125 thousand, and $47 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively. Interest expense includes amortization of OID for the six months ended June 30, 2024 of $83 thousand, $251 thousand, and $94 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
Summary of SBIC Investments
The following table shows the fair value of the Company’s portfolio of investments by asset class as of June 30, 2025 and December 31, 2024:
(in thousands) June 30, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
Senior Secured Debt $ 3,912,165  93.7 % $ 3,419,044  93.4 %
Unsecured Debt 66,530  1.6 % 75,557  2.1 %
Preferred Stock 54,649  1.3 % 53,802  1.5 %
Common Stock 101,102  2.4 % 74,855  2.0 %
Warrants 35,547  0.8 % 30,500  0.8 %
Investment Funds & Vehicles 6,493  0.2 % 6,220  0.2 %
Total $ 4,176,486  100.0 % $ 3,659,978  100.0 %
A summary of the Company’s investment portfolio, at value, by geographic location as of June 30, 2025 and December 31, 2024 is shown as follows:
(in thousands) June 30, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
United States $ 3,759,076  90.0 % $ 3,288,737  89.9 %
United Kingdom 131,617  3.2 % 142,183  3.9 %
Netherlands 124,548  3.0 % 59,157  1.6 %
Germany 49,771  1.2 % 49,255  1.3 %
Israel 44,767  1.1 % 88,066  2.4 %
Switzerland 34,255  0.8 % —  0.0 %
Canada 16,321  0.4 % 16,251  0.4 %
Denmark 9,231  0.2 % 9,284  0.3 %
Ireland 4,622  0.1 % 4,649  0.1 %
Singapore 1,915  0.0 % 1,996  0.1 %
Other 363  0.0 % 400  0.0 %
Total $ 4,176,486  100.0 % $ 3,659,978  100.0  %
The following table shows the fair value of the Company’s portfolio by industry sector as of June 30, 2025 and December 31, 2024:
(in thousands) June 30, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Software $ 1,471,080  35.2 % $ 1,081,100  29.5 %
Drug Discovery & Development 1,035,769  24.8 % 1,080,390  29.5 %
Healthcare Services, Other 755,202  18.1 % 610,184  16.7 %
Consumer & Business Services 375,233  9.0 % 372,641  10.2 %
Defense Technologies 139,991  3.4 % —  0.0 %
Diversified Financial Services 118,110  2.8 % 113,491  3.1 %
Medical Devices & Equipment 75,436  1.8 % 74,962  2.0 %
Electronics & Computer Hardware 50,666  1.2 % 162,888  4.5 %
Biotechnology Tools 34,836  0.8 % 35,434  1.0 %
Communications & Networking 27,937  0.7 % 27,700  0.8 %
Information Services 24,233  0.6 % 24,356  0.7 %
Sustainable and Renewable Technology 22,723  0.5 % 27,696  0.8 %
Manufacturing Technology 20,650  0.5 % 1,162  0.0 %
Space Technologies 15,446  0.4 % 45,700  1.2 %
Consumer & Business Products 8,663  0.2 % 1,497  0.0 %
Semiconductors 345  0.0 % 704  0.0 %
Media/Content/Info 157  0.0 % 63  0.0 %
Drug Delivery 9  0.0 % 10  0.0 %
Total $ 4,176,486  100.0 % $ 3,659,978  100.0 %
The following table summarizes information related to our SBICs as of June 30, 2025 and December 31, 2024.
June 30, 2025 December 31, 2024
Description HC IV SBIC V HC IV SBIC V
Number of investments held 41 23 33 11 
Fair value of investments (in millions) $ 411.9 $ 267.3 $ 377.7 $ 155.6 
Percentage of fair value of investments based on the Company's total investment portfolio 9.9  % 6.4  % 10.3  % 4.3  %
Tangible assets (in millions) $ 416.5 $ 269.8 $ 382.9 $ 157.8 
Percentage of tangible assets based on the Company's total assets 9.7  % 6.3  % 10.0  % 4.1  %