XML 35 R17.htm IDEA: XBRL DOCUMENT v3.26.1
BORROWINGS
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
BORROWINGS BORROWINGS
SPV and SPV2 are party to the SPV Credit Facility and SPV2 Credit Facility, respectively, as described below. In accordance with the Investment Company Act, the Company is currently only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 200% after such borrowing. As of December 31, 2025 and 2024, asset coverage was 275.2% and 393.4%, respectively, and the Company was in compliance with all covenants and other requirements of the respective agreements of the Credit Facilities.
The following table details the principal amount and carrying amount of the Company’s debt and secured borrowings as of December 31, 2025 and 2024.
As of
December 31, 2025December 31, 2024
SPV Credit Facility$388,750 $164,732 
SPV2 Credit Facility330,000 55,000 
2024-1 Debt289,000 289,000 
Total principal amount outstanding1,007,750 508,732 
Less: unamortized debt issuance costs(1,916)(2,077)
Total carrying value$1,005,834 $506,655 
SPV Credit Facility
SPV entered into a senior secured revolving credit facility (as amended, the “SPV Credit Facility”) with a lender on April 1, 2019, which was most recently amended and restated on August 26, 2025, and may be further amended from time to time. The SPV Credit Facility provides for secured borrowings of $400,000 as of December 31, 2025, subject to availability
under the SPV Credit Facility and restrictions imposed on borrowings under the Investment Company Act. Effective December 12, 2025, the total commitments increased from $300,000 to $400,000. The SPV Credit Facility will be subject to an additional increase of $100,000 on June 12, 2026, provided satisfaction of commitment increase conditions on such dates. The SPV Credit Facility has a revolving period through October 15, 2028 (October 15, 2026 prior to the August 26, 2025 amendment), and a maturity date of April 3, 2030 (April 3, 2028 prior to the August 26, 2025 amendment), with one one-year extension option, subject to SPV’s and the lender’s consent. SPV may borrow amounts in U.S. Dollars or certain other permitted currencies. Borrowings under the SPV Credit Facility bear interest initially at SOFR (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.06% (2.35% prior to the August 26, 2025 amendment) per year. SPV also pays a fee of 0.75% per year on unused amounts under the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly. The lender has a first lien security interest on substantially all of the assets of SPV. Effective on August 26, 2025, CARS Lux Finance, a wholly owned subsidiary of the SPV, became party to the SPV Credit Facility.
Below is a summary of the borrowings and repayments under the SPV Credit Facility for the years ended December 31, 2025, 2024 and 2023 and the outstanding balances under the SPV Credit Facility for the respective periods.
Year Ended December 31,
202520242023
Outstanding borrowings, beginning of year$164,732 $424,447 $622,104 
Borrowings696,167 569,676 133,000 
Repayments(480,644)(829,149)(333,823)
Foreign currency translation8,495 (242)3,166 
Outstanding borrowings, end of year$388,750 $164,732 $424,447 
The SPV Credit Facility consisted of the following as of December 31, 2025 and 2024:
 Total FacilityBorrowings
Outstanding
Unused 
Portion (1)
Amount
Available (2)
December 31, 2025$400,000 $388,750 $11,250 $11,250 
December 31, 2024$300,000 $164,732 $135,268 $135,268 
(1)The unused portion is the amount upon which commitment fees are based.
(2)The amount available is based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
For the years ended December 31, 2025, 2024 and 2023, the components of interest expense and credit facility fees of the SPV Credit Facility were as follows:
Year Ended December 31,
202520242023
Interest expense$13,834 $24,586 $39,741 
Facility unused commitment fee697 2,818 1,650 
Amortization of deferred financing costs944 895 976 
Total interest expense and credit facility fees$15,475 $28,299 $42,367 
Cash paid for interest expense and credit facility fees$11,960 $34,803 $42,005 
Weighted average debt principal outstanding $226,794 $319,178 $536,500 
Weighted average interest rate(1)
6.02 %7.70 %7.41 %
(1)Excludes facility unused commitment fee and amortization of deferred financing costs and debt issuance costs.
As of December 31, 2025 and 2024, the components of interest and credit facility fees payable of the SPV Credit Facility were as follows:
As of
December 31, 2025December 31, 2024
Interest expense payable$2,271 $740 
Unused commitment fees payable295 331 
Other credit facility fees payable301 — 
Interest and credit facility fees payable$2,867 $1,071 
Weighted average interest rate
5.50 %6.72 %
SPV2 Credit Facility
SPV2 entered into a senior secured revolving credit facility (as amended, the “SPV2 Credit Facility”, together with the SPV Credit Facility, the “Credit Facilities”) with a lender on May 13, 2020, which was most recently amended and restated on October 18, 2024, and may be further amended from time to time. The SPV2 Credit Facility provides for secured borrowings during the applicable revolving period up to a principal amount of $550,000 as of December 31, 2025, subject to availability under the SPV2 Credit Facility and restrictions imposed on borrowings under the Investment Company Act. The SPV2 Credit Facility has a revolving period through March 7, 2027 (March 7, 2025 prior to the October 18, 2024 amendment) and a maturity date of March 7, 2032 (March 7, 2030 prior to the October 18, 2024 amendment). Borrowings under the SPV2 Credit Facility bear interest initially at SOFR (or, if applicable, a rate based on the prime rate or federal funds rate plus 0.50%) plus 2.40% per year, plus a term SOFR adjustment of 0.15% per year. SPV2 pays a fee of 0.25% per year on unused amounts under the SPV2 Credit Facility. Payments under the SPV2 Credit Facility are made quarterly. The lender has a security interest on substantially all of the assets of SPV2.
Below is a summary of the borrowings and repayments under the SPV2 Credit Facility for the years ended December 31, 2025, 2024 and 2023 the outstanding balances under the SPV2 Credit Facility for the respective periods.
Year Ended December 31,
202520242023
Outstanding borrowings, beginning of year$55,000 $330,300 $360,300 
Borrowings574,000 — 114,000 
Repayments(299,000)(275,300)(144,000)
Outstanding borrowings, end of year$330,000 $55,000 $330,300 
The SPV2 Credit Facility consisted of the following as of December 31, 2025 and 2024:
 Total FacilityBorrowings
Outstanding
Unused 
Portion (1)
Amount
Available (2)
December 31, 2025$550,000 $330,000 $220,000 $220,000 
December 31, 2024$550,000 $55,000 $495,000 $226,179 
(1)The unused portion is the amount upon which commitment fees are based.
(2)The amount available is based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
For the years ended December 31, 2025, 2024, and 2023, the components of interest expense and credit facility fees of the SPV2 Credit Facility were as follows:
Year Ended December 31,
202520242023
Interest expense$16,521 $21,736 $25,867 
Facility unused commitment fee957 704 617 
Amortization of deferred financing costs916 895 1,001 
Total interest expense and credit facility fees$18,394 $23,335 $27,485 
Cash paid for interest expense and credit facility fees$14,974 $25,323 $27,807 
Weighted average debt principal outstanding $240,227 $273,886 $335,120 
Weighted average interest rate(1)
6.78 %7.94 %7.72 %
(1)Excludes facility unused commitment fee and amortization of deferred financing costs and debt issuance costs.
As of December 31, 2025 and 2024, the components of interest and credit facility fees payable of the SPV2 Credit Facility were as follows:
As of
December 31, 2025December 31, 2024
Interest expense payable$178 $754 
Unused commitment fees payable5 237 
Other credit facility fees payable194 — 
Interest and credit facility fees payable$377 $991 
Weighted average interest rate
6.49 %7.14 %
Securitizations
On October 29, 2024, the Company completed the 2024-1 Debt Securitization. The 2024-1 Debt was issued by the 2024-1 Issuer, a wholly owned and consolidated subsidiary of the Company. The 2024-1 Debt Securitization was executed through a private placement of the 2024-1 Debt, consisting of $348,500 in notes and loans that were issued at par and were scheduled to mature in October 2037. As of December 31, 2025, the Company retained $59,500 in the Class C and D notes. The Company received 100% of the $83,100 in nominal value of the non-interest bearing preferred interests issued by the 2024-1 Issuer (the “2024-1 Issuer Preferred Interests”) on the closing date of the 2024-1 Debt Securitization in exchange for the Company’s contribution to the 2024-1 Issuer of the initial closing date loan portfolio. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2024-1 Issuer in the purchase agreement.
The following table summarizes the terms of the 2024-1 Debt and the principal amount and carrying value as of December 31, 2025 and December 31, 2024:
As of
2024-1 Debt Tranche(1)
Credit RatingReference RateSpreadDecember 31, 2025December 31, 2024
Class A-1 NotesAAASOFR1.68%$92,500 $92,500 
Class A-L1 LoansAAASOFR1.68%104,000 104,000 
Class A-L2 LoansAAASOFR1.68%50,000 50,000 
Class A-2 NotesAAASOFR2.00%17,000 17,000 
Class B NotesAASOFR2.13%25,500 25,500 
Total Principal Amount Outstanding$289,000 $289,000 
Less: unamortized debt issuance costs(1,916)(2,077)
Total Carrying Value$287,084 $286,923 
(1)Excludes $59.5 million of Class C and D notes, which are rated A and BBB-, respectively, and accrue interest at SOFR plus spread of 2.20% and 3.50%, respectively, and are retained by the Company.
The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPVs) to the 2024-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2024-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2024-1 Issuer are not available to the creditors of the SPVs or the Company.
During the reinvestment period, pursuant to the indenture governing the 2024-1 Debt, all principal collections received on the underlying collateral may be used by the 2024-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager under a collateral management agreement (the “Collateral Management Agreement”) of the 2024-1 Issuer and in accordance with the Company’s investment strategy.
Pursuant to the Collateral Management Agreement, the 2024-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the 2024-1 Issuer Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the 2024-1 Issuer Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2024-1 Issuer for the years ended December 31, 2025 and 2024. Any such waived fees may not be recaptured by the Investment Adviser.
As of December 31, 2025, the 2024-1 Debt was secured by 92 investments with a total fair value of $402,948 and cash of $31,663. The pool of investments in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2024-1 Debt.
For the years ended December 31, 2025 and 2024, the components of interest expense and credit facility fees on the 2024-1 Debt were as follows:
 Year Ended December 31,
 20252024
Interest expense$17,447 $3,262 
Amortization of deferred financing costs and debt issuance costs161 28 
Total interest expense and credit facility fees$17,608 $3,290 
Cash paid for interest expense and credit facility fees$22,097 $— 
Weighted average debt principal outstanding$289,000 $289,000 
Weighted average interest rate(1)
6.01 %6.45 %
(1)Includes amortization of deferred financing costs and debt issuance costs.
As of December 31, 2025 and 2024, $2,920 and $4,042, respectively, of interest expense related to securitizations was included in interest and credit facility fees payable. As of December 31, 2025 and 2024, the weighted average interest rates were 5.60% and 6.35%, respectively, based on benchmark rates.