Nuveen Churchill Direct Lending income steady despite markdown

Nuveen Churchill Direct Lending (NCDL) posted steady third-quarter earnings with stable income and yields despite modest portfolio valuation markdown.

The business development company reported net investment income of $0.43 (£0.32) per share, down slightly from $0.46 in the prior quarter, while maintaining a 9.6 per cent annualised return on equity.

Its net asset value slipped to $17.85 per share from $17.92 at the end of June, with a slower pace of new investment deployment.

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In the third quarter, NCDL reported a $2bn portfolio spread across 213 middle-market companies. The portfolio remains heavily in first-lien loans (nearly 90 per cent) with a weighted average yield of 10 per cent.

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“We are encouraged by the positive momentum and pickup in transaction activity, which we believe will continue into next year,” said Ken Kencel, president and chief executive officer of NCDL and Churchill. “As we look ahead to 2026, NCDL remains well-positioned with respect to our experienced investment team, high-quality diversified portfolio and strong capital structure.”

Liquidity stood at $316m, and leverage was modest at 1.25x debt-to-equity, with no near-term maturities on its diversified financing facilities, the third quarter results said.

“NCDL continues to operate from a position of strength, in our view, with ample liquidity and no near-term debt maturities,” said Shai Vichness, chief financial officer of NCDL and Churchill.

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