Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

6. Fair Value of Financial Instruments

Investments

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

	Fair Value Hierarchy at December 31, 2024
	Level 1		Level 2			Level 3		Total
First-lien debt investments	$	—	$	143,398		$	6,728,411	$	6,871,809
Second-lien debt investments		—		1,309			93,469		94,778
Mezzanine debt investments		—		—			123,184		123,184
Equity and other investments		—		—			154,511		154,511
Total investments at fair value	$	—	$	144,707		$	7,099,575	$	7,244,282
Interest rate swaps		—		(25,214	)		—		(25,214	)
Total	$	—	$	119,493		$	7,099,575	$	7,219,068

	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

Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur.

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 year ended December 31, 2024:

	As of and for the Year Ended
	December 31, 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		4,492,641			10,021			—		77,376		4,580,038
Repayments / redemptions		(313,253	)		—			—		—		(313,253	)
Sales proceeds		(425,921	)		(2,161	)		—		—		(428,082	)
Paid-in-kind interest		18,092			1,213			14,319		—		33,624
Net change in unrealized gains (losses)		80,053			4,324			2,545		14,484		101,406
Net realized gains (losses)		4,501			66			—		—		4,567
Net amortization of discount on securities		23,493			915			402		—		24,810
Transfers within Level 3		—			—			—		—		—
Transfers into (out of) Level 3		—			—			—		—		—
Balance, End of Period	$	6,728,411		$	93,469		$	123,184	$	154,511	$	7,099,575

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 year ended December 31, 2023:

	As of and for the Year Ended
	December 31, 2023
	First-lien debt investments			Second-lien debt investments		Mezzanine  debt investments		Equity and other investments		Total
Balance, beginning of period	$	800,995		$	—	$	—	$	7,806	$	808,801
Purchases or originations		2,053,661			77,776		97,000		54,845		2,283,282
Repayments / redemptions		(80,115	)		—		—		—		(80,115	)
Paid-in-kind interest		4,694			—		6,450		—		11,144
Net change in unrealized gains (losses)		58,158			1,196		2,198		—		61,552
Net amortization of discount on securities		11,412			119		270		—		11,801
Transfers within Level 3		—			—		—		—		—
Transfers into (out of) Level 3		—			—		—		—		—
Balance, End of Period	$	2,848,805		$	79,091	$	105,918	$	62,651	$	3,096,465

The following table presents 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 December 31, 2024 and December 31, 2023:

	Net Change in Unrealized		Net Change in Unrealized
	Gains or (Losses)		Gains or (Losses)
	For the Year Ended		For the Year Ended
	December 31, 2024 on		December 31, 2023 on
	Investments Held at		Investments Held at
	December 31, 2024		December 31, 2023
First-lien debt investments	$	87,806	$	58,158
Second-lien debt investments		4,324		1,196
Mezzanine debt investments		2,545		2,198
Equity and other investments		14,484		—
Total	$	109,159	$	61,552

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 December 31, 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.

	December 31, 2024
			Valuation	Unobservable	Range (Weighted	Impact to Valuation from an
	Fair Value		Technique	Input	Average)	Increase to Input
First-lien debt investments	$	6,728,411	Income approach (1)	Discount rate	7.7% — 17.1% (10.6%)	Decrease
Second-lien debt investments		93,469	Income approach	Discount rate	14.7% — 18.1% (17.8%)	Decrease
Mezzanine debt investments		123,184	Income approach	Discount rate	12.2% — 12.2% (12.2%)	Decrease
Equity and other investments		154,511	Market Multiple (2)	Comparable multiple	4.8x — 20.0x (11.0x)	Increase
Total	$	7,099,575

(1)Includes $226.4 million of first-lien debt investments valued using an asset waterfall.

(2)Includes $8.3 million of equity investments valued using a Black-Scholes model and $49.1 million of equity investments valued using a discounted cash flow analysis.

	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.

The Company typically determines the fair value of its performing Level 3 debt investments utilizing a yield analysis. In a yield analysis, a price is ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles. Additional consideration is given to the expected life, portfolio company performance since close, and other terms and risks associated with an investment. Among other factors, a determinant of risk is the amount of leverage used by the portfolio company relative to the total enterprise value of the company, and the rights and remedies of our investment within each portfolio company’s capital structure.

Significant unobservable quantitative inputs typically considered in the fair value measurement of the Company’s Level 3 debt investments primarily include current market yields, including relevant market indices, but may also include quotes from brokers, dealers, and pricing services as indicated by comparable investments. If debt investments are credit impaired, an enterprise value analysis may be used to value such debt investments; however, in addition to the methods outlined above, other methods such as a liquidation or wind-down analysis may be utilized to estimate enterprise value. For the Company’s Level 3 equity investments, multiples of similar companies’ revenues, earnings before income taxes, depreciation and amortization (“EBITDA”) or some combination thereof and comparable market transactions are typically used.

Financial Instruments Not Carried at Fair Value

Debt

The fair value of the Company’s Credit Facilities, which are categorized as Level 3 within the fair value hierarchy, as of December 31, 2024 and December 31, 2023, approximates its carrying value as the outstanding balance is callable at carrying value.

The following table presents the fair value of the Company's 2029 and January 2030 Notes, as of December 31, 2024:

	December 31, 2024
	Outstanding Principal		Fair Value (1)
2029 Notes	$	750,000	$	759,645
January 2030 Notes		600,000		588,680
Total	$	1,350,000	$	1,348,325

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

Other Financial Assets and Liabilities

Under the fair value hierarchy, cash and cash equivalents are classified as Level 1 while the Company’s other assets and liabilities, other than investments at fair value and Credit Facilities, are classified as Level 2.