Strategic Execution and Portfolio Management

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• Management is prioritizing the rotation of watch list investments and deleveraging the portfolio to return to target ranges following a period of net asset value (NAV) decline.

• The reduction in NAV to $17.82 was primarily driven by unrealized losses in non-accrual investments that are currently being actively managed for recovery.

• A new fee and dividend framework, effective April 1st, was implemented to enhance long-term earnings power and provide flexibility during the portfolio rotation process.

• Market conditions in the upper mid-market have improved as slower capital formation in non-traded retail BDCs has reduced competitive pressure, leading to better terms in core middle markets.

• The company intentionally set the base dividend at a conservative $0.34 per share to ensure it is consistently earned despite a potentially volatile market outlook.

• Origination activity is being balanced with the need to preserve financial flexibility, resulting in moderated hold sizes for new platform-originated investments.

• Performance pressure remains concentrated in a limited set of challenged credits, particularly those indexed to deferrable consumer spending and legacy assets acquired from First Eagle.

Outlook and Deleveraging Strategy

• Management expects to reduce leverage to within the target net leverage range during the second half of the year, supported by visibility into several near-term portfolio realizations.

• The company plans to continue rotating out of the legacy First Eagle portfolio, which has already been reduced from over 70 to 27 investments.

• Future origination will focus on smaller individual position sizes, likely below the current 50 basis point average, to enhance diversification while managing total leverage.

• The dividend strategy includes two remaining previously announced special dividends of $0.03 per share to be paid in subsequent quarters.

• Management remains optimistic that private equity dry powder and sponsor needs to return capital will drive favorable long-term opportunity sets despite current low M&A activity.

Structural Adjustments and Risk Factors

• Completed three restructurings during the quarter, resulting in $0.48 per share of realized losses which were offset by the reversal of previously recognized unrealized losses.

• The debt-to-equity ratio increased to 1.42x, exceeding the long-term target range due to NAV declines and positive net deployment in the first half of the year.

• Unsecured debt maturity profile was extended to 2028 and beyond following the repayment of $162 million in maturing notes and the upsizing of credit facilities.

• Non-accruals declined from 5.7% to 4.8% of debt investments at cost following the completion of three restructurings during the quarter.