Nuveen Churchill Direct Lending Corp. Announces Full Year and Fourth Quarter 2024 Results

Rhea-AI Summary

Nuveen Churchill Direct Lending Corp. (NYSE: NCDL) reported strong Q4 2024 financial results with net investment income of $0.56 per share and a net asset value of $18.18 per share. The company declared a Q1 2025 regular distribution of $0.45 per share.

Key highlights for 2024 include:

• Portfolio value of $2.08 billion across 210 companies
• Deployed over $950 million in new investments, up 40% year-over-year
• Full-year investment income increased to $224.0 million from $161.8 million in 2023
• Portfolio composition: 90.6% first-lien debt, 7.7% subordinated debt, and 1.8% equity investments
• Weighted average yield decreased to 10.33% from 11.72% in 2023

The company maintained strong portfolio quality with only one non-accrual investment representing 0.4% of total investments at cost. NCDL's debt-to-equity ratio stood at 1.15x as of December 31, 2024.

Positive

• Net investment income of $0.56 per share in Q4 2024
• 40% YoY increase in new investment deployment
• Investment income up 38% to $224.0M in 2024
• Strong portfolio quality with only 0.4% non-accrual investments
• $206.3M available for additional borrowings

Negative

• Weighted average yield declined to 10.33% from 11.72%
• Net realized loss of $13.2M for 2024
• Debt-to-equity ratio increased to 1.15x from 1.11x

Insights

Financial Analyst

NCDL delivered strong Q4 2024 results with net investment income of $0.56 per share, comfortably exceeding its regular distribution of $0.45 plus the $0.10 special distribution. This 124% distribution coverage ratio demonstrates robust earnings power and provides a margin of safety for the dividend. The company's full-year performance shows sustained momentum with ROE exceeding 12% and distributions of $2.10 per share fully covered by earnings.

The portfolio quality metrics are particularly encouraging, with non-accruals dropping significantly from 1.4% to 0.4% of investments at cost quarter-over-quarter. This level is notably below the BDC industry average of approximately 1.2-1.5%, indicating superior underwriting and portfolio management. The company's focus on first-lien senior secured debt (90.6%) positions it defensively in an uncertain economic environment, though this conservative approach may limit yield potential compared to BDCs with higher second-lien or subordinated debt exposure.

The 46.6% year-over-year increase in deployment activity ($863.6M vs $589.0M) demonstrates NCDL's ability to source attractive deals in the competitive middle market lending space. This acceleration in originations is particularly impressive given the broader market conditions and suggests the company is effectively leveraging Churchill's origination platform and relationships.

The decline in weighted average yield from 11.72% to 10.33% reflects both market spread compression and the falling interest rate environment. While this represents a headwind for earnings, NCDL's ability to maintain strong NII despite this decline speaks to effective portfolio management and scale benefits. The recent $300 million unsecured notes issuance enhances funding diversity and extends the company's debt maturity profile, though it may slightly increase the weighted average cost of capital in the near term.

With a debt-to-equity ratio of 1.15x and substantial available liquidity of $206.3 million, NCDL maintains significant dry powder to capitalize on attractive opportunities while maintaining a conservative leverage profile relative to the 2.0x regulatory limit. This positions the company well to navigate potential market volatility while continuing to deliver attractive risk-adjusted returns to shareholders.

Credit Risk Analyst

NCDL's Q4 results demonstrate strengthening credit fundamentals across key metrics. The reduction in non-accruals from three companies (1.4% at cost) to just one (0.4% at cost) represents a significant improvement that places NCDL's credit performance well below the BDC industry average of approximately 1.2-1.5%. This improvement likely stems from successful workout strategies and potentially the restructuring of two underperforming portfolio companies mentioned in the realized loss discussion.

The portfolio's 90.6% concentration in first-lien senior secured debt positions NCDL defensively as we enter a potentially slowing economic environment. This senior position in the capital structure provides enhanced recovery prospects, with historical recovery rates for first-lien middle market loans typically ranging from 65-80% versus 30-50% for subordinated debt. The slight improvement in the weighted average Internal Risk Rating from 4.2 to 4.1 (with 4.0 being the initial rating) indicates stabilizing credit quality despite the substantial growth in the portfolio.

The 46.6% year-over-year increase in new investments warrants careful monitoring as rapid growth can sometimes lead to compromised underwriting standards. However, the stable risk rating and improving non-accrual metrics suggest disciplined origination despite the accelerated pace. The company's investments across 210 portfolio companies in 27 industries provides significant diversification, with the average investment size likely representing less than 0.5% of the portfolio.

The decline in weighted average yield from 11.72% to 10.33% reflects both market spread compression and falling base rates. While this yield compression could create incentives to reach for yield through riskier credits, the improving credit metrics suggest NCDL is maintaining underwriting discipline. The recent $300 million unsecured notes issuance enhances financial flexibility by reducing reliance on secured credit facilities that typically contain more restrictive covenants and may require additional collateral during market stress.

With a debt-to-equity ratio of 1.15x against the 2.0x regulatory limit, NCDL maintains substantial loss absorption capacity. The company's $206.3 million in available borrowing capacity provides a significant liquidity buffer to support portfolio companies if economic conditions deteriorate or to capitalize on distressed opportunities that may emerge. This balanced approach to portfolio construction, leverage, and liquidity management positions NCDL well to navigate potential credit challenges while maintaining distribution stability.

Reports Fourth Quarter Net Investment Income of $0.56 per Share

Declares First Quarter Regular Distribution of $0.45 per Share

NEW YORK--(BUSINESS WIRE)-- Nuveen Churchill Direct Lending Corp. (NYSE: NCDL) (“NCDL” or the “Company”), a business development company externally managed by its investment adviser, Churchill DLC Advisor LLC (the “Adviser”), and by its sub-adviser, Churchill Asset Management LLC (“Churchill”), today reported financial results for the full year and fourth quarter ended December 31, 2024.

Financial Highlights for the Quarter Ended December 31, 2024

• Net investment income of $0.56 per share
• Net realized and unrealized loss on investments of ($0.02) per share
• Net increase in net assets resulting from operations of $0.54 per share
• Net asset value ("NAV") per share of $18.18, compared to $18.15 per share as of September 30, 2024
• Paid fourth quarter regular distribution of $0.45 per share and the third of four special distributions of $0.10 per share on January 28, 2025, which represents a 12.0% total annualized yield based on the fourth quarter NAV per share
• Declared first quarter regular distribution of $0.45 per share

“We are pleased to end 2024 with a strong quarter of financial results, reflecting the positive momentum we have built throughout the year. This past year was an active year for originations, as our investment team deployed over $950 million of new investments, an increase of over 40% year-over-year,” said Ken Kencel, President and Chief Executive Officer of NCDL and Churchill. “As we start 2025, we remain confident in the Company’s positioning as a leader in the core middle market direct lending space and remain focused on continuing to deliver an attractive yield to our shareholders.”

“For the full year, NCDL delivered a return on equity of over 12% and paid $2.10 per share of distributions, which were fully covered by net investment income, driven by strong performance from our investment portfolio and high-quality new originations,” said Shai Vichness, Chief Financial Officer of NCDL and Churchill. “Additionally, we took steps to continue to optimize our balance sheet and capital structure by issuing $300 million of unsecured notes in January of this year. With ample available liquidity as of year end and no near-term debt maturities, we remain well-positioned to take advantage of attractive investment opportunities.”

Distribution Declaration

The Company’s Board of Directors (the "Board") has declared a first quarter 2025 regular distribution of $0.45 per share payable on April 28, 2025 to shareholders of record as of March 31, 2025. On January 10, 2024, the Board declared four special distributions of $0.10 per share, to be paid over a one-year period, with the final distribution payable on April 28, 2025 to shareholders of record as of February 12, 2025.

PORTFOLIO COMPOSITION

As of December 31, 2024, the fair value of the Company's portfolio investments was $2.08 billion across 210 portfolio companies and 27 industries. This compares to $2.05 billion as of September 30, 2024 across 202 portfolio companies and 26 industries.

As of December 31, 2024, the Company’s portfolio based on fair value consisted of approximately 90.6% first-lien debt, 7.7% subordinated debt investments, and 1.8% equity investments. As of September 30, 2024, the Company’s portfolio based on fair value consisted of 90.1% first-lien debt, 8.3% subordinated debt investments, and 1.7% equity investments.

As of December 31, 2024 and September 30, 2024, the weighted average Internal Risk Rating of the portfolio at fair value was 4.1 and 4.2 (4.0 being the initial rating assigned at origination), respectively. As of December 31, 2024, there was one portfolio company on non-accrual representing 0.4% of total investments at amortized cost (or 0.1% of total investment at fair value). As of September 30, 2024, there were three portfolio companies on non-accrual representing 1.4% at amortized cost (or 0.5% at fair value). No new portfolio companies were put on non-accrual status during the quarter.

PORTFOLIO AND INVESTMENT ACTIVITY

Full Year

For the year ended December 31, 2024, the Company funded $863.6 million of portfolio investments and received $430.0 million of proceeds from principal repayments and sales, compared to $589.0 million and $146.4 million for the year ended December 31, 2023, respectively.

Fourth Quarter

For the three months ended December 31, 2024, the Company funded $151.1 million of portfolio investments and received $119.5 million of proceeds from principal repayments and sales, compared to $203.2 million and $155.6 million for the three months ended September 30, 2024, respectively.

RESULTS OF OPERATIONS FOR THE FULL YEAR AND QUARTER ENDED DECEMBER 31, 2024

Investment Income

Investment income increased to $224.0 million for the year ended December 31, 2024 from $161.8 million for the year ended December 31, 2023 primarily due to increased investment activity driven by an increase in deployed capital, slightly offset by a decrease in the weighted average yield of debt and income producing investments as a result of market spread tightening and a decline in SOFR. As of December 31, 2024, the weighted average yield of debt and income producing investments decreased to 10.33% from 11.72% as of December 31, 2023, at cost, primarily due to overall tightening of spreads in newly originated investments, the refinancing and repricing of existing portfolio companies, and the decline in base interest rates.

Investment income increased to $57.1 million for the three months ended December 31, 2024 from $48.9 million for the three months ended December 31, 2023.

Net Expenses

Net expenses increased to $101.1 million for the year ended December 31, 2024 from $77.9 million for the year ended December 31, 2023, primarily due to an increase in interest and debt financing expenses and management fees. Interest and debt financing expenses increased due to higher average daily borrowings and higher average interest rates. The increase in management fees was driven by the Company's increase in total assets. Under the terms of the advisory agreement, the Adviser is waiving the incentive fee on income and the incentive fee on capital gains for the first five quarters beginning with the calendar quarter in which the IPO was consummated (i.e. beginning with the calendar quarter ended March 31, 2024 through the calendar quarter ending March 31, 2025).

Net expenses increased to $26.4 million for the three months ended December 31, 2024, compared to $23.1 million for the three months ended December 31, 2023.

Net Realized Gain (Loss) and Net Change in Unrealized Gain (Loss) on Investments

For the year ended December 31, 2024, the Company had a net realized loss on investments of $(13.2) million compared to a net realized loss of $(8.0) million for the year ended December 31, 2023. The net realized loss for the year ended December 31, 2024 was primarily driven by the restructuring of two underperforming portfolio companies, partially offset by realized gains from full or partial repayments. The Company recorded a net change in unrealized gain of $7.3 million for the year ended December 31, 2024, compared to a net change in unrealized gain of $0.7 million for the year ended December 31, 2023. The increase in total net change in unrealized gains for the year ended December 31, 2024, compared to the total net change in unrealized gains for the year ended December 31, 2023, primarily resulted from a reversal of unrealized losses on underperforming portfolios companies, as well as market spread tightening.

For the three months ended December 31, 2024, the Company recorded a net realized loss of $(11.7) million compared to a net realized loss of $(1.5) million for the three months ended December 31, 2023. For the three months ended December 31, 2024, the Company recorded a net change in unrealized gain of $11.3 million compared to a net change in unrealized gain of $4.5 million for the three months ended December 31, 2023.

Financial Condition, Liquidity and Capital Resources

As of December 31, 2024, the Company had $43.3 million in cash and cash equivalents and $1.1 billion in total aggregate principal amount of debt outstanding. Subject to borrowing base and other conditions, the Company had approximately $206.3 million available for additional borrowings under its existing credit facilities, as of December 31, 2024. At December 31, 2024, the Company's debt to equity ratio was 1.15x compared to 1.11x at September 30, 2024.

CONFERENCE CALL AND WEBCAST INFORMATION

Nuveen Churchill Direct Lending Corp. will hold a conference call to discuss its full year and fourth quarter 2024 financial results today at 11:00 AM Eastern Time. All interested parties may participate in the conference call by dialing (866) 605-1826 approximately 10-15 minutes prior to the call; international callers should dial +1 (215) 268-9877. Participants should reference Nuveen Churchill Direct Lending Corp. when prompted.

A live webcast of the conference call will also be available on the Events section of the Company's website at https://www.ncdl.com/news/events. A replay will be available under the same link following the conclusion of the conference call.

About Nuveen Churchill Direct Lending Corp.

Nuveen Churchill Direct Lending Corp. (“NCDL”) is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. NCDL has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. NCDL is externally managed by its investment adviser, Churchill DLC Advisor LLC, and by its sub-adviser, Churchill Asset Management LLC ("Churchill"). Both the investment adviser and sub-adviser are affiliates and subsidiaries of Nuveen, LLC (“Nuveen”) the investment management division of Teachers Insurance and Annuity Association of America (“TIAA”) and one of the largest asset managers globally. Churchill is a leading capital provider for private equity-backed middle market companies and operates as the exclusive U.S. middle market direct lending and private capital business of Nuveen and TIAA. Churchill is a registered investment advisor and majority-owned, indirect subsidiary of TIAA.

Forward-Looking Statements

This press release contains historical information and “forward-looking statements” with respect to the business and investments of NCDL, including, but not limited to, statements about NCDL’s future performance and financial performance and financial condition, which involve substantial risks and uncertainties. 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 us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond NCDL’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in NCDL’s filings with the Securities and Exchange Commission, including changes in the financial, capital, and lending markets; general economic, political and industry trends and other external factors, and the dependence of NCDL’s future success on the general economy and its impact on the industries in which it invests. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date on which NCDL makes them. NCDL does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(dollars in thousands, except share and per share data)
	December 31, 2024				December 31, 2023
Assets
Investments
Non-controlled/non-affiliated company investments, at fair value (amortized cost of $2,098,575 and $1,666,169, respectively)	$	2,081,379			$	1,641,686
Cash and cash equivalents		43,254				67,395
Restricted cash		50				50
Interest receivable		17,971				17,674
Receivable for investments sold		1,024				3,919
Prepaid expenses		47				13
Other assets		—				127
Total assets	$	2,143,725			$	1,730,864
Liabilities
Secured borrowings (net of $6,668 and $7,941 deferred financing costs, respectively) (See Note 6)	$	1,108,261			$	943,936
Payable for investments purchased		14,973				—
Interest payable		12,967				9,837
Due to adviser for expense support (See Note 5)		—				632
Management fees payable		3,956				3,006
Distributions payable		29,468				22,683
Directors’ fees payable		128				96
Accounts payable and accrued expenses		3,652				2,789
Total liabilities	$	1,173,405			$	982,979
Commitments and contingencies (See Note 7)
Net Assets: (See Note 8)
Common shares, $0.01 par value, 500,000,000 and 500,000,000 shares authorized, 53,387,277 and 41,242,105 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively	$	534			$	412
Paid-in-capital in excess of par value		996,286				776,719
Total distributable earnings (loss)		(26,500	)			(29,246	)
Total net assets	$	970,320			$	747,885
Total liabilities and net assets	$	2,143,725			$	1,730,864
Net asset value per share (See Note 10)	$	18.18			$	18.13

 

CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share and per share data)
	For the Years Ended December 31,
	2024				2023				2022
Investment income:
Non-controlled/non-affiliated company investments:
Interest income	$	213,096			$	156,868			$	79,868
Payment-in-kind interest income		8,299				3,644				789
Dividend income		614				101				225
Other income		2,031				1,143				1,571
Total investment income		224,040				161,756				82,453
Expenses:
Interest and debt financing expenses		79,879				61,206				25,695
Management fees (See Note 5)		14,683				10,509				7,464
Incentive fees on net investment income		17,447				—				—
Professional fees		3,100				3,455				1,811
Directors' fees		510				383				383
Administration fees (See Note 5)		1,861				1,598				1,111
Other general and administrative expenses		1,068				751				684
Total expenses before expense support and incentive fees waived		118,548				77,902				37,148
Expense support (See Note 5)		—				(158	)			(179	)
Incentive fees waived (See Note 5)		(17,447	)			—				—
Net Expenses after expense support		101,101				77,744				36,969
Net investment income before excise taxes		122,939				84,012				45,484
Excise taxes		551				6				—
Net investment income		122,388				84,006				45,484
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on non-controlled/non-affiliated company investments		(13,198	)			(7,952	)			(262	)
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated company investments		7,287				714				(27,912	)
Income tax (provision) benefit		(154	)			(830	)			(24	)
Total net change in unrealized gain (loss)		7,133				(116	)			(27,936	)
Total net realized and unrealized gain (loss) on investments		(6,065	)			(8,068	)			(28,198	)
Net increase (decrease) in net assets resulting from operations	$	116,323			$	75,938			$	17,286
Per share data:
Net investment income per share - basic and diluted	$	2.26			$	2.52			$	1.95
Net increase (decrease) in net assets resulting from operations per share - basic and diluted	$	2.15			$	2.27			$	0.74
Weighted average common shares outstanding - basic and diluted		54,118,379				33,385,880				23,279.34

PORTFOLIO AND INVESTMENT ACTIVITY
(dollars in thousands)
	For the Years Ended December 31,
	2024				2023
Net funded investment activity
New gross commitments at par 1	$	955,309			$	670,638
Net investments funded		863,570				589,000
Investments sold or repaid		(429,953	)			(146,428	)
Net funded investment activity	$	433,617			$	442,572
Gross commitments at par 1
First-Lien Debt	$	924,776			$	601,486
Subordinated Debt		26,088				59,993
Equity Investments		4,445				9,159
Total gross commitments	$	955,309			$	670,638
Portfolio company activity
Portfolio companies, beginning of period		179				145
Number of new portfolio companies		68				45
Number of exited portfolio companies		(37	)			(11	)
Portfolio companies, end of period		210				179
Count of investments		475				385
Count of industries		27				25
New investment activity
Weighted average annual interest rate on new debt investments at par		10.11	%			11.50	%
Weighted average annual interest rate on new floating rate debt investments at par		10.02	%			11.36	%
Weighted average spread on new debt investments at par		5.05	%			6.07	%
Weighted average annual coupon on new debt investments at par		13.53	%			13.20	%

__________________

1 Gross commitments at par includes unfunded investment commitments.

PORTFOLIO AND INVESTMENT ACTIVITY
(dollars in thousands)
	Three Months Ended
	December 31, 2024				September 30, 2024
Net funded investment activity
New gross commitments at par 1	$	162,663			$	225,612
Net investments funded		151,106				203,159
Investments sold or repaid		(119,464	)			(155,616	)
Net funded investment activity	$	31,642			$	47,543
Gross commitments at par 1
First-Lien Debt	$	159,436			$	221,097
Subordinated Debt		3,127				3,145
Equity Investments		100				1,370
Total gross commitments	$	162,663			$	225,612
Portfolio company activity
Portfolio companies, beginning of period		202				198
Number of new portfolio companies		16				18
Number of exited portfolio companies		(8	)			(14	)
Portfolio companies, end of period		210				202
Count of investments		475				457
Count of industries		27				26
New investment activity
Weighted average annual interest rate on new debt investments at par		8.96	%			9.63	%
Weighted average annual interest rate on new floating rate debt investments at par		8.90	%			9.59	%
Weighted average spread on new debt investments at par		4.59	%			5.00	%
Weighted average annual coupon on new debt investments at par		12.00	%			13.67	%

__________________

1 Gross commitments at par includes unfunded investment commitments.

See Notes to Consolidated Financial Statements

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226768443/en/

Investors:

Investor Relations

Robert.Paun@churchillam.com

Media:

Prosek Partners

Madison Hanlon

Pro-churchill@prosek.com

4270747-0425

Source: Nuveen Churchill Direct Lending Corp.

FAQ

What was NCDL's net investment income per share in Q4 2024?

NCDL reported net investment income of $0.56 per share in Q4 2024.

How much did NCDL deploy in new investments during 2024?

NCDL deployed over $950 million in new investments during 2024, representing a 40% increase year-over-year.

What is the composition of NCDL's investment portfolio as of December 2024?

NCDL's portfolio consisted of 90.6% first-lien debt, 7.7% subordinated debt, and 1.8% equity investments.

What distributions did NCDL declare for Q1 2025?

NCDL declared a regular distribution of $0.45 per share for Q1 2025, plus a special distribution of $0.10 per share.

How did NCDL's investment income change in 2024 compared to 2023?

Investment income increased to $224.0 million in 2024 from $161.8 million in 2023.