Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Under existing accounting guidance, fair value is defined as the price that the Company would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. This accounting guidance emphasizes valuation techniques that maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances. The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current accounting guidance:

Level 1: Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs that are quoted prices for similar assets or liabilities in active markets.

Level 3: Inputs that are unobservable for an asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

As of December 31, 2024 and 2023, the Company’s investments were categorized as follows in the fair value hierarchy:

 

Valuation Inputs	December 31, 2024		December 31, 2023
Level 1—Price quotations in active markets	$	1	$	1
Level 2—Significant other observable inputs	91		178
Level 3—Significant unobservable inputs	12,035		13,073
Investments measured at net asset value(1)	1,363		1,397
	$	13,490	$	14,649

___________

(1)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

In addition, the Company had foreign currency forward contracts, as described in Note 7, which were categorized as Level 2 in the fair value hierarchy as of December 31, 2024 and 2023.

The Company’s board of directors is responsible for overseeing the valuation of the Company’s portfolio investments at fair value as determined in good faith pursuant to the Adviser’s valuation policy. The Company’s board of directors has designated the Adviser with day-to-day responsibility for implementing the portfolio valuation process set forth in the Adviser’s valuation policy.

The Company’s investments consist primarily of debt investments that were acquired directly from the issuer. Debt investments, for which broker quotes are not available, are valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, the borrower’s ability to adequately service its debt, prevailing interest rates for like investments, expected cash flows, call features, anticipated repayments and other relevant terms of the investments. Except as described below, all of the Company’s equity/other investments are also valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, contractual rights ascribed to such investments, as well as various income scenarios and multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value. An investment that is newly issued and purchased near the date of the financial statements is valued at cost if the Adviser determines that the cost of such investment is the best indication of its fair value. Such investments described above are typically classified as Level 3 within the fair value hierarchy. Investments that are traded on an active public market are valued at their closing price as of the date of the financial statements and are classified as Level 1 within the fair value hierarchy. Except as described above, the Adviser typically values the Company’s other investments by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which are provided by independent third-party pricing services and screened for validity by such services and are typically classified as Level 2 within the fair value hierarchy.

The Adviser periodically benchmarks the bid and ask prices it receives from the third-party pricing services and/or dealers and independent valuation firms, as applicable, against the actual prices at which the Company purchases and sells its investments. Based on the results of the benchmark analysis and the experience of the Company’s management in purchasing and selling these investments, the Adviser believes that these prices are reliable indicators of fair value. The Adviser reviewed and approved the valuation determinations made with respect to these investments in a manner consistent with the Adviser’s valuation policy.

The following is a reconciliation for the years ended December 31, 2024 and 2023 of investments for which significant unobservable inputs (Level 3) were used in determining fair value:

	For the Year Ended December 31, 2024
	Senior Secured Loans—First Lien		Senior Secured Loans—Second Lien		Other Senior Secured Debt		Subordinated Debt		Asset Based Finance		Equity/Other		Total
Fair value at beginning of period	$	8,429	$	1,090	$	21	$	322	$	2,077	$	1,134	$	13,073
Accretion of discount (amortization of premium)	44		8		—		2		2		3		59
Net realized gain (loss)	(308)		(107)		(3)		—		(11)		(41)		(470)
Net change in unrealized appreciation (depreciation)	136		71		1		4		30		(15)		227
Purchases	3,859		56		25		30		1,046		83		5,099
Paid-in-kind interest	100		2		2		23		15		150		292
Sales and repayments	(4,488)		(427)		—		(148)		(1,057)		(133)		(6,253)
Transfers into Level 3	8		—		—		—		—		—		8
Transfers out of Level 3	—		—		—		—		—		—		—
Fair value at end of period	$	7,780	$	693	$	46	$	233	$	2,102	$	1,181	$	12,035
The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date	$	(32)	$	(23)	$	(1)	$	2	$	(41)	$	(59)	$	(154)

	For the Year Ended December 31, 2023
	Senior Secured Loans—First Lien		Senior Secured Loans—Second Lien		Other Senior Secured Debt		Subordinated Debt		Asset Based Finance		Equity/Other		Total
Fair value at beginning of period	$	9,124	$	874	$	22	$	264	$	1,902	$	1,199	$	13,385
Accretion of discount (amortization of premium)	45		5		—		1		2		3		56
Net realized gain (loss)	(25)		(55)		(40)		(126)		8		(97)		(335)
Net change in unrealized appreciation (depreciation)	(62)		44		36		134		(39)		63		176
Purchases	1,612		16		—		27		491		48		2,194
Paid-in-kind interest	53		24		3		22		13		29		144
Sales and repayments	(2,351)		(115)		—		—		(300)		(111)		(2,877)
Transfers into Level 3	33		297		—		—		—		—		330
Transfers out of Level 3	—		—		—		—		—		—		—
Fair value at end of period	$	8,429	$	1,090	$	21	$	322	$	2,077	$	1,134	$	13,073
The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date	$	(83)	$	(54)	$	36	$	7	$	(41)	$	(28)	$	(163)

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements as of December 31, 2024 and 2023 were as follows:

Type of Investment	Fair Value at December 31, 2024		Valuation Technique(1)	Unobservable Input	Range	Impact to Valuation from an Increase in Input(2)
Senior Debt	$	7,115	Discounted Cash Flow	Discount Rate	5.8% - 23.8% (10.6%)	Decrease
	1,376		Waterfall	EBITDA Multiple	0.7x - 11.3x (8.6x)	Increase
	14		Other(3)
	14		Cost
Subordinated Debt	188		Discounted Cash Flow	Discount Rate	11.3% - 15.4% (12.7%)	Decrease
	33		Waterfall	EBITDA Multiple	7.0x - 7.0x (7.0x)	Increase
	12		Other(3)
Asset Based Finance	1,513		Discounted Cash Flow	Discount Rate	4.8% - 41.7% (12.8%)	Decrease
	516		Waterfall	EBITDA Multiple	1.0x - 1.4x (1.2x)	Increase
	41		Cost
	30		Other(3)
	2		Indicative Dealer Quotes		23.0% - 23.0% (23.0%)	Increase
Equity/Other	625		Waterfall	EBITDA Multiple	0.7x - 16.0x (8.3x)	Increase
	538		Discounted Cash Flow	Discount Rate	4.3% - 24.8% (14.3%)	Decrease
	18		Other(3)
Total	$	12,035

Type of Investment	Fair Value at December 31, 2023		Valuation Technique(1)	Unobservable Input	Range	Impact to Valuation from an Increase in Input(2)
Senior Debt	$	8,356	Discounted Cash Flow	Discount Rate	6.1% - 25.0% (11.6%)	Decrease
	1,165		Waterfall	EBITDA Multiple	0.6x - 10.8x - (8.1x)	Increase
	15		Cost
	4		Other(3)
Subordinated Debt	289		Discounted Cash Flow	Discount Rate	10.7% - 21.0% (13.7%)	Decrease
	33		Waterfall	EBITDA Multiple	7.5x - 7.5x (7.5x)	Increase
Asset Based Finance	1,232		Discounted Cash Flow	Discount Rate	5.9% - 43.2% (11.1%)	Decrease
	616		Waterfall	EBITDA Multiple	1.0x - 1.3x (1.1x)	Increase
	118		Cost
	109		Other(3)
	2		Indicative Dealer Quotes		26.8% - 26.8% (26.8%)	Increase
Equity/Other	603		Waterfall	EBITDA Multiple	0.6x - 14.8x (6.5x)	Increase
	521		Discounted Cash Flow	Discount Rate	5.2% - 21.0% (14.2%)	Decrease
	7		Other(3)
	3		Option Pricing Model	Equity Illiquidity Discount	75.0% - 75.0% (75.0%)	Decrease
Total	$	13,073

_______________

(1)Investments using a market quotes valuation technique were primarily valued by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which were provided by independent third-party pricing services and screened for validity by such services. Investments valued using an EBITDA multiple or a revenue multiple pursuant to the market comparables valuation technique may be conducted using an enterprise valuation waterfall analysis.

(2)Represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

(3)Fair value based on expected outcome of proposed corporate transactions and/or other factors.