Quarterly report [Sections 13 or 15(d)]

Debt (Tables)

v3.25.1
Debt (Tables)
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Schedule of Available and Outstanding Debt
As of March 31, 2025 and December 31, 2024, the Company had the following available and outstanding debt:
(in thousands) March 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  $ 295,000  $ 287,049  $ 350,000  $ 279,000  $ 271,371 
February 2025 Notes —  —  —  50,000  50,000  49,981 
June 2025 Notes 70,000  70,000  69,960  70,000  70,000  69,919 
June 2025 3-Year Notes 50,000  50,000  49,965  50,000  50,000  49,926 
March 2026 A Notes 50,000  50,000  49,913  50,000  50,000  49,889 
March 2026 B Notes 50,000  50,000  49,905  50,000  50,000  49,880 
September 2026 Notes 325,000  325,000  323,566  325,000  325,000  323,321 
January 2027 Notes 350,000  350,000  347,598  350,000  350,000  347,265 
2028 Convertible Notes 287,500  287,500  278,503  —  —  — 
2031 Asset-Backed Notes 116,845  116,845  116,272  119,475  119,475  118,769 
2033 Notes 40,000  40,000  39,070  40,000  40,000  39,043 
MUFG Bank Facility(2)
400,000  105,000  105,000  400,000  116,000  116,000 
SMBC Facility(2)(3)(5)
475,000  260,006  259,822  475,000  283,790  283,591 
Total $ 2,564,345  $ 1,999,351  $ 1,976,623  $ 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 March 31, 2025 and December 31, 2024.
(4)As of March 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 March 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 three months ended March 31, 2025 and 2024 were as follows:
Three Months Ended March 31,
(in thousands) 2025 2024
Weighted average interest cost
 4.3  % 4.3  %
Weighted average cost of debt(1)
4.9  % 4.9  %
Weighted average debt outstanding
 $ 1,815,224  $ 1,635,890 
(1)Cost of debt includes interest and fees.
The Company held the following SBA debentures outstanding principal balances as of March 31, 2025 and December 31, 2024:
(in thousands)
Issuance/Pooling Date		 Maturity Date
Interest Rate(1)
March 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(2)
September 1, 2035 4.89% 10,000  — 
Total SBA Debentures     $ 295,000  $ 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 March 31, 2025, $10.0 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 March 31, 2025 and December 31, 2024:
(in thousands) March 31, 2025 December 31, 2024
SBA Debentures $ 7,951  $ 7,629 
February 2025 Notes —  19 
June 2025 Notes 40  81 
June 2025 3-Year Notes 35  74 
March 2026 A Notes 87  111 
March 2026 B Notes 95  120 
September 2026 Notes 1,434  1,679 
January 2027 Notes 2,402  2,735 
2028 Convertible Notes 8,997  — 
2031 Asset-Backed Notes 573  706 
2033 Notes 930  957 
MUFG Bank Facility(1)
1,350  1,770 
SMBC Facility(1)(2)
2,823  2,693 
Total $ 26,717  $ 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 March 31, 2025, the debt issuance costs, net of accumulated amortization of the revolver facility is $2.6 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 months ended March 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) Three Months Ended March 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 $ 2,499  $ 227  $ —  $ 2,726  $ 3,971 
February 2025 Notes 202  19  —  221  1,070 
June 2025 Notes 754  40  —  794  — 
June 2025 3-Year Notes 750  39  —  789  — 
March 2026 A Notes 562  24  —  586  1,125 
March 2026 B Notes 568  26  —  594  1,138 
September 2026 Notes 2,175  203  —  2,378  4,266 
January 2027 Notes 3,079  207  —  3,286  5,906 
2028 Convertible Notes 827  77  —  904  — 
2031 Asset-Backed Notes(2)
1,492  80  —  1,572  1,457 
2033 Notes 625  27  —  652  625 
MUFG Bank Facility 2,570  442  560  3,572  2,179 
SMBC Facility 3,595  208  219  4,022  3,843 
Total $ 19,698  $ 1,619  $ 779  $ 22,096  $ 25,580 
(1)Interest expense includes amortization of OID for the three months ended March 31, 2025, of $42 thousand, $126 thousand, $68 thousand, and $38 thousand related to the September 2026 Notes, January 2027 Notes, 2028 Convertible Notes, and 2031 Asset-Backed Notes, respectively.
(2)During the three months ended March 31, 2025, we have recognized $15 thousand of loss on debt extinguishment for 2031 Asset-Backed Notes.
For the three months ended March 31, 2024, the components of interest expense, related fees, and cash paid for interest expense for debt were as follows:
(in thousands) Three Months Ended March 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 $ 1,137  $ 146  $ —  $ 1,283  $ 2,275 
July 2024 Notes 1,252  74  —  1,326  2,504 
February 2025 Notes 535  29  —  564  1,070 
June 2025 Notes 754  40  —  794  — 
June 2025 3-Year Notes 750  39  —  789  — 
March 2026 A Notes 563  24  —  587  1,125 
March 2026 B Notes 569  26  —  595  1,138 
September 2026 Notes 2,175  203  —  2,378  4,265 
January 2027 Notes 3,079  207  —  3,286  5,906 
2031 Asset-Backed Notes 1,903  100  —  2,003  1,856 
2033 Notes 625  27  —  652  625 
MUFG Bank Facility 1,933  447  609  2,989  1,566 
SMBC Facility 2,349  180  246  2,775  1,754 
Total $ 17,624  $ 1,542  $ 855  $ 20,021  $ 24,084 
(1)Interest expense includes amortization of OID for the three months ended March 31, 2024 of $42 thousand, $126 thousand, and $47 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 March 31, 2025 and December 31, 2024:
(in thousands) March 31, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
Senior Secured Debt $ 3,674,498  93.6  % $ 3,419,044  93.4  %
Unsecured Debt 64,736  1.7  % 75,557  2.1  %
Preferred Stock 52,662  1.3  % 53,802  1.5  %
Common Stock 94,088  2.4  % 74,855  2.0  %
Warrants 31,473  0.8  % 30,500  0.8  %
Investment Funds & Vehicles 6,993  0.2  % 6,220  0.2  %
Total $ 3,924,450  100.0  % $ 3,659,978  100.0  %
A summary of the Company’s investment portfolio, at value, by geographic location as of March 31, 2025 and December 31, 2024 is shown as follows:
(in thousands) March 31, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio		 Investments at
Fair Value		 Percentage of
Total Portfolio
United States $ 3,489,550  88.9  % $ 3,288,737  89.9  %
Netherlands 132,889  3.4  % 59,157  1.6  %
United Kingdom 119,905  3.1  % 142,183  3.9  %
Switzerland 56,421  1.5  % —  0.0  %
Germany 49,417  1.3  % 49,255  1.3  %
Israel 44,321  1.1  % 88,066  2.4  %
Canada 16,229  0.4  % 16,251  0.4  %
Denmark 9,111  0.2  % 9,284  0.3  %
Ireland 4,647  0.1  % 4,649  0.1  %
Singapore 1,590  0.0  % 1,996  0.1  %
Other 370  0.0  % 400  0.0  %
Total $ 3,924,450  100.0  % $ 3,659,978  100.0  %
The following table shows the fair value of the Company’s portfolio by industry sector as of March 31, 2025 and December 31, 2024:
(in thousands) March 31, 2025 December 31, 2024
Investments at
Fair Value		 Percentage of
Total Portfolio 		Investments at
Fair Value		 Percentage of
Total Portfolio
Software $ 1,262,813  32.2  % $ 1,081,100  29.5  %
Drug Discovery & Development 1,119,941  28.5  % 1,080,390  29.5  %
Healthcare Services, Other 625,556  15.9  % 610,184  16.7  %
Consumer & Business Services 374,561  9.6  % 372,641  10.2  %
Electronics & Computer Hardware 167,370  4.3  % 162,888  4.5  %
Diversified Financial Services 117,366  3.0  % 113,491  3.1  %
Medical Devices & Equipment 75,238  1.9  % 74,962  2.0  %
Space Technologies 49,527  1.3  % 45,700  1.2  %
Biotechnology Tools 34,819  0.9  % 35,434  1.0  %
Communications & Networking 27,601  0.7  % 27,700  0.8  %
Information Services 24,923  0.6  % 24,356  0.7  %
Sustainable and Renewable Technology 22,396  0.6  % 27,696  0.8  %
Manufacturing Technology 20,653  0.5  % 1,162  0.0  %
Consumer & Business Products 1,139  0.0  % 1,497  0.0  %
Semiconductors 425  0.0  % 704  0.0  %
Media/Content/Info 114  0.0  % 63  0.0  %
Drug Delivery 8  0.0  % 10  0.0  %
Total $ 3,924,450  100.0  % $ 3,659,978  100.0  %
The following table summarizes information related to our SBICs as of March 31, 2025 and December 31, 2024.
March 31, 2025 December 31, 2024
Description HC IV SBIC V HC IV SBIC V
Number of investments held 35 14 33 11 
Fair value of investments (in millions) $ 376.1 $ 194.7 $ 377.7 $ 155.6 
Percentage of fair value of investments based on the Company's total investment portfolio 9.6  % 5.0  % 10.3  % 4.3  %
Tangible assets (in millions) $ 381.4 $ 197.6 $ 382.9 $ 157.8 
Percentage of tangible assets based on the Company's total assets 9.5  % 4.9  % 10.0  % 4.1  %