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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2024

The following tables present fair value measurements of investments as of June 30, 2024 and December 31, 2023:


	Fair Value Hierarchy at June 30, 2024
	Level 1		Level 2			Level 3		Total
First-lien debt investments	$	—	$	3,148		$	4,702,324	$	4,705,472
Second-lien debt investments		—		—			90,299		90,299
Mezzanine debt investments		—		1,206			115,090		116,296
Equity and other investments		—		—			94,080		94,080
Total investments at fair value	$	—	$	4,354		$	5,001,793	$	5,006,147
Interest rate swaps		—		(2,310	)		—		(2,310	)
Total	$	—	$	2,044		$	5,001,793	$	5,003,837


	Fair Value Hierarchy at December 31, 2023
	Level 1		Level 2		Level 3		Total
First-lien debt investments	$	—	$	2,080	$	2,848,805	$	2,850,885
Second-lien debt investments		—		—		79,091		79,091
Mezzanine debt investments		—		606		105,918		106,524
Equity and other investments		—		—		62,651		62,651
Total	$	—	$	2,686	$	3,096,465	$	3,099,151

Changes in Fair Value of Investments Using Level 3 Inputs

The following tables present the changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the three and six months ended June 30, 2024:


	As of and for the Three Months Ended
	June 30, 2024
	First-lien debt investments			Second-lien debt investments			Mezzanine debt investments		Equity and other investments			Total
Balance, beginning of period	$	3,979,498		$	89,086		$	111,081	$	94,393		$	4,274,058
Purchases or originations		995,734			—			—		—			995,734
Repayments / redemptions		(30,579	)		—			—		—			(30,579	)
Sales proceeds		(265,850	)		(2,160	)		—		—			(268,010	)
Paid-in-kind interest		4,306			494			3,400		—			8,200
Net change in unrealized gains (losses)		13,328			2,586			509		(313	)		16,110
Net realized gains (losses)		1,504			66			—		—			1,570
Net amortization of discount on securities		4,383			227			100		—			4,710
Transfers within Level 3		—			—			—		—			—
Transfers into (out of) Level 3		—			—			—		—			—
Balance, End of Period	$	4,702,324		$	90,299		$	115,090	$	94,080		$	5,001,793


	As of and for the Six Months Ended
	June 30, 2024
	First-lien debt investments			Second-lien debt investments			Mezzanine debt investments		Equity and other investments		Total
Balance, beginning of period	$	2,848,805		$	79,091		$	105,918	$	62,651	$	3,096,465
Purchases or originations		2,255,540			10,021			—		28,259		2,293,820
Repayments / redemptions		(41,602	)		—			—		—		(41,602	)
Sales proceeds		(406,408	)		(2,161	)		—		—		(408,569	)
Paid-in-kind interest		6,591			494			6,660		—		13,745
Net change in unrealized gains (losses)		26,783			2,359			2,312		3,170		34,624
Net realized gains (losses)		4,346			66			—		—		4,412
Net amortization of discount on securities		8,269			429			200		—		8,898
Transfers within Level 3		—			—			—		—		—
Transfers into (out of) Level 3		—			—			—		—		—
Balance, End of Period	$	4,702,324		$	90,299		$	115,090	$	94,080	$	5,001,793

The following table presents the changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the three and six months ended June 30, 2023:


	As of and for the Three Months Ended
	June 30, 2023
	First-lien debt investments			Mezzanine debt investments		Equity and other investments		Total
Balance, beginning of period	$	1,246,008		$	—	$	16,444	$	1,262,452
Purchases or originations		422,327			97,000		4,238		523,565
Repayments / redemptions		(32,451	)		—		—		(32,451	)
Paid-in-kind interest		779			—		—		779
Net change in unrealized gains (losses)		203			669		—		872
Net amortization of discount on securities		3,613			81		—		3,694
Transfers within Level 3		—			—		—		—
Transfers into (out of) Level 3		—			—		—		—
Balance, End of Period	$	1,640,479		$	97,750	$	20,682	$	1,758,911


	As of and for the Six Months Ended
	June 30, 2023
	First-lien debt investments			Mezzanine debt investments		Equity and other investments		Total
Balance, beginning of period	$	800,995		$	—	$	7,806	$	808,801
Purchases or originations		858,451			97,000		12,876		968,327
Repayments / redemptions		(38,737	)		—		—		(38,737	)
Paid-in-kind interest		799			—		—		799
Net change in unrealized gains (losses)		13,964			669		—		14,633
Net amortization of discount on securities		5,007			81		—		5,088
Transfers within Level 3		—			—		—		—
Transfers into (out of) Level 3		—			—		—		—
Balance, End of Period	$	1,640,479		$	97,750	$	20,682	$	1,758,911

Net Change in Unrealized Gains or Losses on Investments for Which Level 3 Inputs were Used in Determining Fair Value

The following tables present information with respect to the net change in unrealized gains or losses on investments for which Level 3 inputs were used in determining fair value that are still held by the Company at June 30, 2024 and 2023:


	Net Change in Unrealized			Net Change in Unrealized
	Gains or (Losses)			Gains or (Losses)
	For the Three Months Ended			For the Three Months Ended
	June 30, 2024 on			June 30, 2023 on
	Investments Held at			Investments Held at
	June 30, 2024			June 30, 2023
First-lien debt investments	$	13,327		$	380
Second-lien debt investments		2,587			—
Mezzanine debt investments		508			669
Equity and other investments		(313	)		—
Total	$	16,109		$	1,049


	Net Change in Unrealized		Net Change in Unrealized
	Gains or (Losses)		Gains or (Losses)
	For the Six Months Ended		For the Six Months Ended
	June 30, 2024 on		June 30, 2023 on
	Investments Held at		Investments Held at
	June 30, 2024		June 30, 2023
First-lien debt investments	$	27,160	$	13,964
Second-lien debt investments		2,360		—
Mezzanine debt investments		2,311		669
Equity and other investments		3,170		—
Total	$	35,001	$	14,633

Fair Value of Level 3 Investments at Fair Value Significant Unobservable Inputs Used in Valuations

The following tables present the fair value of Level 3 Investments at fair value and the significant unobservable inputs used in the valuations as of June 30, 2024 and December 31, 2023. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values.

         
        June 30, 2024

         
        Valuation

        Unobservable

        Range (Weighted

        Impact to Valuation
from an

         
        Fair Value

        Technique

        Input

        Average)

        Increase to Input

First-lien debt investments

4,702,324

Income approach (1)

Discount rate

9.1% — 17.2% (12.0%)

Decrease

Second-lien debt investments

90,299

Income approach

Discount rate

15.2% — 20.6% (20.0%)

Decrease

Mezzanine debt investments

115,090

Income approach

Discount rate

13.6% — 13.6% (13.6%)

Decrease

Equity and other investments

94,080

Market Multiple (2)

Comparable multiple

2.6x — 20.0x (10.4x)

Increase

Total

5,001,793

(1)

Includes $65.2 million of first-lien debt investments valued using an asset waterfall.

(2)

Includes $6.6 million of equity investments valued using a Black-Scholes model.

         
        December 31, 2023

         
        Valuation

        Unobservable

        Range (Weighted

        Impact to Valuation
from an

         
        Fair Value

        Technique

        Input

        Average)

        Increase to Input

First-lien debt investments

2,848,805

Income approach (1)

Discount rate

8.7% — 16.4% (12.8%)

Decrease

Second-lien debt investments

79,091

Income approach

Discount rate

21.7% — 21.7% (21.7%)

Decrease

Mezzanine debt investments

105,918

Income approach

Discount rate

15.0% — 15.0% (15.0%)

Decrease

Equity and other investments

62,651

Market Multiple (2)

Comparable multiple

2.6x — 16.1x (10.2x)

Increase

Total

3,096,465

(1)

Includes $77.9 million of first-lien debt investments valued using an asset waterfall.

(2)

Includes $4.6 million of equity investments valued using a Black-Scholes model and $19.2 million of equity investments which, due to the proximity of the transactions relative to the measurement dates, we valued using the cost of the investments.

Fair Value of Company's 2029 Notes

The following table presents the fair value of the Company’s 2029 Notes, as of June 30, 2024.


	June 30, 2024
	Outstanding Principal		Fair Value (1)
2029 Notes	$	750,000	$	747,075
Total	$	750,000	$	747,075

(1)

The fair value is based on broker quotes received by the Company and is categorized as Level 2 within the fair value hierarchy.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details