Nuveen Churchill Direct Lending Corp.

Welcome to Nuveen Churchill Direct Lending Corp's third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow management's prepared remarks. As a reminder, this conference call is being recorded for replay purposes. I would like to turn the conference over to Robert Pond, head of investor relations for NCDL. Robert, please go ahead.

Good morning and welcome to Naveen Churchill Direct Lending Corp's third quarter 2025 earnings call. Today I'm joined by NCDL's Chairman, President, and CEO, Ken Kinsell, and Chief Financial Officer, Shai Vickness. Following our prepared remarks, we will be available to take your questions. Today's call may include forward-looking statements. Such statements involve known and unknown risks, uncertainties, and other factors, and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates, and projections about the company, our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict. Actual results may differ materially from those expressed or forecasted in the forward-looking statements. We ask that you refer to the company's most recent filings with the SEC for important risk fact Any forward-looking statements made today do not guarantee future performance, and undue reliance should not be placed on them. The company assumes no obligation to update any forward-looking statements at any time. Our earnings release, 10-Q, and supplemental earnings presentation are available on the investor relations section of our website at ncdl.com. Now I would like to turn the call over to Ken.

Thank you, Robert. Good morning, everyone, and thank you all for joining us today. Today I will start by discussing our results for the third quarter, and then I'll discuss current market conditions, our origination activity, portfolio positioning, and our forward outlook. Following my comments, I will hand the call over to Shai for a more detailed discussion of our financial performance. This morning, we reported net investment income of 43 cents per share during the third quarter, compared to 46 cents per share in the second quarter. Gross originations totaled approximately $29 million in the quarter, compared to $48 million in the second quarter of this year. Similar to the prior quarter, the decline quarter over quarter was intentional. as we continue to operate towards the higher end of our target leverage range. As I will discuss later in my prepared remarks, the Churchill platform continued to see strong asset growth and new originations during the quarter. Our investment portfolio remained healthy, and our portfolio companies continued to perform well, largely due to the strength of our senior loan investments. Net asset value was $17.85 per share as of September 30th, compared to $17.92 per share as of June 30th. The modest decline quarter over quarter was primarily due to a slight decrease in the fair value of certain underperforming portfolio companies. Turning to the current market environment, M&A activity continued its positive momentum in the third quarter. building on the rebound in market sentiment that began towards the end of the second quarter. Investment activity has now returned to a more normalized level, following the pause in activity after Liberation Day. Stabilizing market conditions and renewed sponsor confidence in the macro environment contributed to increased transaction execution. During the third quarter, the Federal Reserve began an interest rate cut cycle with a 25 basis point cut in September and another 25 basis point cut in October, with further rate cuts anticipated but not guaranteed. Against this backdrop, with a predominantly floating rate portfolio, NCDL and other private credit funds are interest rate sensitive. Partially offsetting this dynamic, NCDL has the benefit of a floating rate debt capital structure as well as a lower interest burden for our portfolio companies. We believe the latter should drive growth dynamics, as portfolio companies will have more capital and cash flow to reinvest into growth areas of their respective businesses. In addition, a lower interest rate environment typically encourages increased M&A activity due to lower financing costs for private equity-backed businesses. Despite the potential for further rate reductions, we continue to see an attractive risk return profile for private credit and direct lending, especially on a relative basis compared to other fixed income asset classes. We also witnessed significant market volatility in private credit funds, particularly BDC stock prices over the past several weeks, following significant media attention given to two large bankruptcies, We want to make it clear that NCDL and any other Churchill vehicles do not have any exposure to either of these two investments, Tricolor and First Brands. We also do not see any evidence of broad-based challenges across our portfolio. At Churchill, we focus on sponsor-backed businesses with significant equity cushions, and we have longstanding experience focusing on less cyclical, more defensive end markets that demonstrate resilience across market cycles. As we continue to end the year strong and look towards 2026, we remain optimistic about the long-term prospects of the company given our positioning as a leader in the core middle market. Our longstanding performance track record, deep network of sponsor relationships, and extensive LP commitments across the broader Churchill platform. And we remain intensively focused on continuing to invest in high-quality assets and deliver attractive, risk-adjusted returns to our shareholders. Now turning to our investment activity. As I mentioned earlier, our pipeline for new deal flow started to increase and return to a more normalized level in June of this year, following the temporary pause in April and May. During the third quarter, we continued to see an increase in transaction activity, particularly new deals for high quality assets that are in resilient, non-tariff exposed sectors. At the Churchill platform level, the number of deals reviewed in the third quarter increased 22% from the second quarter of this year. And in the first nine months of 2025, Churchill closed or committed $9.4 billion across 265 transactions, driven by a record-setting first quarter and a resurgence of activity in the third quarter. During the third quarter in NCDL, we continued to reduce allocation sizes to new deal flow, primarily due to the fact that we are operating at the high end of our target leverage range. With that said, we continue to benefit from attractive opportunities and activity at the Churchill platform level. Although the percentages of allocation to junior capital and equity were higher during the quarter, we remain focused on senior lending, which represents approximately 90% of the fair value of the overall portfolio. We also remain focused on the traditional core middle market, benefiting from our differentiated sourcing and long-term track record. We continue to target companies with $10 to $100 million of EBITDA, which we believe helps insulate us from the more aggressive structures and loosening terms prevalent in the upper middle market and broadly syndicated loan space. It is our view that risk-adjusted returns in this segment of the market remain among the most compelling in private credit, particularly for scaled highly selective managers with deep private equity relationships. We see the core middle market as a durable opportunity to generate great long-term value and enhance portfolio diversification for our investors. In terms of our portfolio and credit quality, the continued strength of our portfolio reflects healthy overall performance from our borrowers, as well as the quality of deal flow we've experienced over the last several years. In addition, our rigorous underwriting, high level of selectivity, and focus on diversification have been critical to minimizing losses and generating strong returns across multiple market cycles. That same discipline extends to today's shifting macro landscape. As of September 30th, our weighted average internal risk rating was 4.2, versus an original rating of 4.0 for all of our investments at the time of origination, and our watch list remains at a very manageable level of approximately 7% of fair value. Credit fundamentals within the NCBL portfolio remain strong, with portfolio company total net leverage of five times and interest coverage of 2.3 times on traditional middle market first lien loans. These metrics are a direct result of conservative structuring and relatively low attachment points that we target when underwriting new transactions. NCDL had two new non-accruals during the third quarter which were relatively smaller positions in the portfolio. Despite the slight increase in non-accruals this quarter, we believe our percentages continue to compare extremely well versus BDC industry averages. As of September 30th, non-accruals represent just 0.4% of our total investment portfolio on a fair value basis and 0.9% on a cost basis. We believe the strength of our platform, including experienced workout and portfolio management teams, will continue to drive favorable results. Portfolio diversification remains a key focus of ours within our overall investment portfolio. This has been achieved with a continued high level of selectivity facilitated by the significant proprietary deal flow our sourcing engine is able to generate from the breadth and depth of our PE relationships. As of September 30th, we had 213 companies in our portfolio, and our top 10 portfolio companies represented less than 14% of the total fair value. This diversification is critical as we seek to maintain exceptional credit quality and originate additional attractive opportunities. From a forward-looking perspective, we continue to have an optimistic outlook for private credit based on significant tailwinds to our business. We are encouraged by the city growth in our pipeline and the quality of businesses seeking financial solutions. Following a period of uncertainty and volatility in the markets driven by Liberation Day, in which investment activity and deal flow came to a pause, we've experienced a resurgence of M&A activity, leading to the buildup in our traditional middle market pipeline. Additionally, we believe corporate management teams are now more focused on long-term strategic initiatives and investing in their businesses for sustained growth. This coupled with an interest rate cut cycle, will lead to increasing deal flow and financing opportunities in 2026, in our view. We believe we remain well positioned due to our scale, our differentiated sourcing as an LP, and over 325 private equity funds, and our nearly 20-year track record of investing across interest rates and economic cycles. And now I'll turn the call over to Shai to discuss our financial results in more detail.