Annual report [Section 13 and 15(d), not S-K Item 405]

Debt (Tables)

v3.25.4
Debt (Tables)
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Schedule of Debt Information
As of December 31, 2025 and December 31, 2024, the Company had the following available and outstanding debt:
(in thousands) December 31, 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  $ 341,012  $ 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  49,984  50,000  50,000  49,889 
March 2026 B Notes 50,000  50,000  49,983  50,000  50,000  49,880 
September 2026 Notes 325,000  325,000  324,302  325,000  325,000  323,321 
January 2027 Notes 350,000  350,000  348,596  350,000  350,000  347,265 
2028 Convertible Notes 287,500  287,500  280,412  —  —  — 
June 2030 Notes 350,000  350,000  342,694  —  —  — 
2031 Asset-Backed Notes 64,636  64,636  64,530  119,475  119,475  118,769 
2033 Notes 40,000  40,000  39,151  40,000  40,000  39,043 
MUFG Bank Facility(2)
440,000  168,000  168,000  400,000  116,000  116,000 
SMBC Facility(2)(3)(5)
475,000  277,934  277,780  475,000  283,790  283,591 
Total $ 2,782,136  $ 2,313,070  $ 2,286,444  $ 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 and/or capital commitment requirements.
(3)“Total Available” includes $175.0 million of available commitment through the letter of credit facility as of December 31, 2025 and December 31, 2024.
(4)As of December 31, 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 December 31, 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 years ended December 31, 2025 and 2024 were as follows:
Year Ended December 31,
(in thousands)
 2025 2024
Weighted average interest cost
 4.4  % 4.5  %
Weighted average cost of debt(1)
5.0  % 5.0  %
Weighted average debt outstanding
 $ 2,051,187  $ 1,709,469 
(1)Cost of debt includes interest and fees.
The Company held the following SBA debentures outstanding principal balances as of December 31, 2025 and December 31, 2024:
(in thousands)
Issuance/Pooling Date
 Maturity Date
Interest Rate(1)
December 31, 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 September 1, 2035 4.66% 10,000  — 
April 25, 2025 September 1, 2035 4.66% 15,000  — 
May 9, 2025 September 1, 2035 4.66% 5,000  — 
June 5, 2025 September 1, 2035 4.66% 17,000  — 
June 12, 2025 September 1, 2035 4.66% 3,000  — 
June 25, 2025 September 1, 2035 4.66% 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.
Schedule of Debt Issuance Costs, Net of Accumulated Amortization
Debt issuance costs, net of accumulated amortization, were as follows as of December 31, 2025 and December 31, 2024:
(in thousands) December 31, 2025 December 31, 2024
SBA Debentures $ 8,988  $ 7,629 
February 2025 Notes —  19 
June 2025 Notes —  81 
June 2025 3-Year Notes —  74 
March 2026 A Notes 16  111 
March 2026 B Notes 17  120 
September 2026 Notes 698  1,679 
January 2027 Notes 1,404  2,735 
2028 Convertible Notes 7,088  — 
June 2030 Notes 7,306  — 
2031 Asset-Backed Notes 106  706 
2033 Notes 849  957 
MUFG Bank Facility(1)
3,537  1,770 
SMBC Facility(1)(2)
2,214  2,693 
Total $ 32,223  $ 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 December 31, 2025, the debt issuance costs, net of accumulated amortization of the revolver facility is $2.0 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.
Schedules of Components of Interest Expense, Related Fees, Losses on Debt Extinguishment and Cash Paid for Interest Expense for Debt
For the year ended December 31, 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)
Year ended December 31, 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
SBA Debentures $ 12,131  $ 1,080  $ —  $ 13,211  $ 9,863 
February 2025 Notes 202  19  —  221  1,070 
June 2025 Notes 1,274  81  —  1,355  1,508 
June 2025 3-Year Notes 1,433  74  —  1,507  1,500 
March 2026 A Notes 2,250  95  —  2,345  2,250 
March 2026 B Notes 2,275  103  —  2,378  2,276 
September 2026 Notes 8,697  815  —  9,512  8,532 
January 2027 Notes 12,315  828  —  13,143  11,812 
2028 Convertible Notes 12,040  1,135  —  13,175  6,487 
June 2030 Notes 11,789  478  —  12,267  10,500 
2031 Asset-Backed Notes(2)
5,116  282  —  5,398  5,058 
2033 Notes 2,500  108  —  2,608  2,500 
MUFG Bank Facility 7,284  1,342  2,756  11,382  7,041 
SMBC Facility 12,870  817  996  14,683  13,052 
Total $ 92,176  $ 7,257  $ 3,752  $ 103,185  $ 83,449 
(1)Interest expense includes amortization of OID for the year ended December 31, 2025, of $166 thousand, $503 thousand, $1,000 thousand, $414 thousand, and $133 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 year ended December 31, 2025, the Company has recognized $184 thousand of loss on debt extinguishment for 2031 Asset-Backed Notes.
For the year ended December 31, 2024, the components of interest expense, related fees, and cash paid for interest expense for debt were as follows:
 (in thousands)
Year ended December 31, 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
SBA Debentures $ 4,993  $ 621  $ —  $ 5,614  $ 4,575 
July 2024 Notes 2,706  172  —  2,878  5,008 
February 2025 Notes 2,140  115  —  2,255  2,140 
June 2025 Notes 3,017  162  —  3,179  3,016 
June 2025 3-Year Notes 3,000  155  —  3,155  3,000 
March 2026 A Notes 2,250  95  —  2,345  2,250 
March 2026 B Notes 2,275  103  —  2,378  2,276 
September 2026 Notes 8,697  815  —  9,512  8,531 
January 2027 Notes 12,316  828  —  13,144  11,812 
2031 Asset-Backed Notes(2)
7,464  394  —  7,858  7,321 
2033 Notes 2,500  108  —  2,608  2,500 
MUFG Bank Facility
 11,931  1,770  1,949  15,650  11,866 
SMBC Facility 13,862  735  785  15,382  13,555 
Total $ 77,151  $ 6,073  $ 2,734  $ 85,958  $ 77,850 
(1)Interest expense includes amortization of OID for the year ended December 31, 2024, of $166 thousand, $503 thousand, and $185 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
(2)During the year ended December 31, 2024, the Company has recognized $171 thousand of loss on debt extinguishment for 2031 Asset-Backed Notes.
For the year ended December 31, 2023, the components of interest expense, related fees, and cash paid for interest expense for debt were as follows:
 (in thousands)
Year ended December 31, 2023
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
SBA Debentures $ 4,562  $ 585  $ —  $ 5,147  $ 4,562 
July 2024 Notes 5,009  295  —  5,304  5,009 
February 2025 Notes 2,140  115  —  2,255  2,140 
June 2025 Notes 3,017  162  —  3,179  3,017 
June 2025 3-Year Notes 3,000  155  —  3,155  3,000 
March 2026 A Notes 2,250  95  —  2,345  2,250 
March 2026 B Notes 2,275  103  —  2,378  2,276 
September 2026 Notes 8,697  815  —  9,512  8,532 
January 2027 Notes 12,316  828  —  13,144  11,812 
2031 Asset-Backed Notes 7,613  399  —  8,012  7,425 
2033 Notes 2,500  108  —  2,608  2,500 
MUFG Bank Facility(2)
5,583  1,770  2,782  10,135  5,948 
SMBC Facility 8,658  693  940  10,291  8,678 
Total $ 67,620  $ 6,123  $ 3,722  $ 77,465  $ 67,149 
(1)Interest expense includes amortization of OID for the year ended December 31, 2023, of $166 thousand, $503 thousand, and $188 thousand related to the September 2026 Notes, January 2027 Notes, and 2031 Asset-Backed Notes, respectively.
(2)The June 2022 amendment of the MUFG Bank Facility replaced Union Bank Facility via an amendment as the lead lender.
Summary of SBIC Investments
The following table shows the fair value of the Company’s portfolio of investments by asset class as of December 31, 2025 and December 31, 2024:
(in thousands) December 31, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Senior Secured Debt $ 4,209,798  94.2 % $ 3,419,044  93.4 %
Unsecured Debt 69,614  1.6 % 75,557  2.1 %
Preferred Stock 52,735  1.2 % 53,802  1.5 %
Common Stock 86,275  1.9 % 74,855  2.0 %
Warrants 41,162  0.9 % 30,500  0.8 %
Investment Funds & Vehicles 7,063  0.2 % 6,220  0.2 %
Total $ 4,466,647  100.0 % $ 3,659,978  100.0 %
A summary of the Company’s investment portfolio, at value, by geographic location as of December 31, 2025 and December 31, 2024 is shown as follows:
(in thousands) December 31, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
United States $ 4,035,927  90.4 % $ 3,288,737  89.9 %
United Kingdom 118,031  2.7 % 142,183  3.9 %
Netherlands 117,344  2.6 % 59,157  1.6 %
Israel 67,280  1.5 % 88,066  2.4 %
Germany 50,386  1.1 % 49,255  1.3 %
Switzerland 35,504  0.8 % —  0.0 %
Sweden 18,244  0.4 % —  0.0 %
Canada 16,841  0.4 % 16,251  0.4 %
Ireland 4,729  0.1 % 4,649  0.1 %
Singapore 1,827  0.0 % 1,996  0.1 %
Denmark 169  0.0 % 9,284  0.3 %
Other 365  0.0 % 400  0.0 %
Total $ 4,466,647  100.0 % $ 3,659,978  100.0 %
The following table shows the fair value of the Company’s portfolio by industry sector as of December 31, 2025 and December 31, 2024:
(in thousands) December 31, 2025 December 31, 2024
  Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Application Software(1)
$ 1,087,954  24.3 % $ 790,180  21.6 %
Drug Discovery & Development 1,039,712  23.3 % 1,080,390  29.5 %
Healthcare Services, Other 838,508  18.8 % 610,184  16.7 %
System Software(1)
472,144  10.6 % 290,920  7.9 %
Consumer & Business Services 449,631  10.1 % 372,641  10.2 %
Defense Technologies 140,458  3.1 % —  0.0 %
Diversified Financial Services 105,896  2.4 % 113,491  3.1 %
Medical Devices & Equipment 77,257  1.7 % 74,962  2.0 %
Electronics & Computer Hardware 66,992  1.5 % 162,888  4.5 %
Space Technologies 47,816  1.1 % 45,700  1.2 %
Sustainable and Renewable Technology 35,759  0.8 % 27,696  0.8 %
Communications & Networking 26,263  0.6 % 27,700  0.8 %
Information Services 25,889  0.6 % 24,356  0.7 %
Biotechnology Tools 23,164  0.5 % 35,434  1.0 %
Manufacturing Technology 20,190  0.4 % 1,162  0.0 %
Consumer & Business Products 8,810  0.2 % 1,497  0.0 %
Semiconductors 158  0.0 % 704  0.0 %
Media/Content/Info 32  0.0 % 63  0.0 %
Drug Delivery 14  0.0 % 10  0.0 %
Total $ 4,466,647  100.0 % $ 3,659,978  100.0 %
(1)Effective December 31, 2025, the former “Software” category has been separated into “Application Software” and “System Software”. Prior year amounts have been reclassified to conform to the current presentation.
The following table summarizes information related to our SBICs as of December 31, 2025 and December 31, 2024.
December 31, 2025 December 31, 2024
Description HC IV SBIC V HC IV SBIC V
Number of investments held 39 28 33 11
Fair value of investments (in millions) $ 404.8 $ 277.6 $ 377.7 $ 155.6
Percentage of fair value of investments based on the Company's total investment portfolio 9.1  % 6.2  % 10.3  % 4.3  %
Tangible assets (in millions) $ 421.2 $ 283.1 $ 382.9 $ 157.8
Percentage of tangible assets based on the Company's total assets 9.2  % 6.2  % 10.0  % 4.1  %