BCSF 10-K & 10-Q changes, risk factors and insider trading

Investing in us is intended for long-term investors who can accept the risks associated with investing primarily in potentially illiquid, privately negotiated (i) senior first lien, stretch senior (as further described hereinafter), senior second lien and unitranche loans,loans. (ii)We may also invest, from time to time, in mezzanine debt and other junior investments and (iii)investments, secondary purchases of assets or portfolios that primarily consist of middle market corporate debt. We may also invest, from time to time, indebt, equity securities, distressed debt, debtor-in-possession loans, structured products, structurally subordinate loans, investments with deferred interest features, zero-coupon securities and defaulted securities. There can be no assurance that we will achieve our investment or performance objectives, including our targeted returns. Accordingly, the possibility of partial or total loss of our capital exists.

In serving in these multiple capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the best interests of, or may be adverse to the interests of, us or our stockholders. Although the professional staff of Bain Capital Credit will devote as much time to our management as appropriate to enable our Advisor to perform its duties in accordance with the Amended Advisory Agreement, Bain Capital Credit has, and will continue to have management responsibilities for Bain Capital Credit Clients. There is a potential that we will compete with these Bain Capital Credit Clients, for capital and investment opportunities. As a result, Bain Capital Credit and our portfolio managers will face conflicts in the allocation of investment opportunities among us and the Bain Capital Credit Clients and may make certain investments that are appropriate for us but for which we receive a relatively small allocation of such investment or no allocation at all. Bain Capital Credit intends to allocate investment opportunities among eligible Bain Capital Credit Clients in a manner that is fair and equitable over time and consistent with its allocation policy. However, we can offer no assurance that such opportunities will be allocated to us fairly or equitably in the short-term or over time, and we may not be given the opportunity to participate in investments made by investment funds managed by our Advisor or an investment manager affiliated with our Advisor, including Bain Capital Credit. IfIn ourinstances Advisorwhen recommendsinvestments a particular level of investment for us, and the aggregate amountare recommended by our Advisor for us and for/or other participating Bain Capital Credit Clients exceeds the amount of the investment opportunity, subject to applicable law, investments made pursuant to exemptive relief will generally be allocated among the participants pro rata based on capital available for investment in the asset class being allocated and the respective governing documents of such Bain Capital Credit Clients. We expect that available capital for our investments will be determined based on the amount of cash on-hand, existing commitments and reserves, if any, the targeted leverage level, targeted asset mix and diversification requirements and other investment policies and restrictions set by the Board or as imposed by applicable laws, rules, regulations or interpretations. In instances when investments are not made pursuant to exemptive relief,Clients, allocations among us and other Bain Capital Credit Clients, subject to applicable law and regulation, will be done in accordance with our Advisor’s trade allocation practice, which is generally pro rata based on order size.practice. There can be no assurance that we will be able to participate in all investment opportunities that are suitable for us.

As of December 31, 2024,2025, we had approximately $1,395.2$1,473.0 million of outstanding borrowings under (i) the 2019-1 Notes, (ii) the March 2026 Notes, (iii) the October 2026 Notes, and (iii) the Sumitomo Credit FacilityFacility, and (iv) the March 2030 Notes (collectively with the 2019-1 Notes, the March 2026 Notes andNotes, the October 2026 Notes,Notes and the Sumitomo Credit Facility, the “Borrowings”). The weighted average stated interest rate on our principal amount of outstanding indebtedness as of December 31, 20242025 was 5.1%4.8% (excluding deferred financing costs, deferred issuance costs and unused fees). We intend to continue borrowing under the Borrowings in the future and we may increase the size of the Borrowings or issue debt securities or other evidences of indebtedness (although there can be no assurance that we will be successful in doing so). For more information on our indebtedness, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition, Liquidity and Capital Resources.” Our ability to service our debt depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. The amount of leverage that we employ at any particular time will depend on our Advisor’s and our Board’s assessments of market and other factors at the time of any proposed borrowing.

The following table illustrates the effect of leverage on returns from an investment in our common stock assuming that we employ (i) our actual asset coverage ratio as of December 31, 20242025 and (ii) a hypothetical asset coverage ratio of 150%, each at various annual returns on our portfolio as of December 31, 2024,2025 , net of expenses. The calculations in the table below are hypothetical, and actual returns may be higher or lower than those appearing in the table below.

Under the terms of the relevant master loan sale agreements,agreement, we sold and/or contributed to the 2019-1 Issuer all of our ownership interest in our portfolio loans and participations for the purchase price and other consideration set forth in suchthe master loan sale agreement (including an increase in the value of the “Membership Interests”). On March 7, 2022, the Company sold 70% of the membership equity interests of the Company's 2018-1 Notes to SLP, which resulted in the deconsolidation of the 2018-1 Notes and the 2018-1 Issuer's financial statements from the Company's consolidated financial statements. We hold 100% of the equity interests in the 2019-1 Issuer. As a result, we expect to consolidate the financial statements of the 2019-1 Issuer, as well as our other controlled subsidiaries, in our consolidatedConsolidated financialFinancial statements.Statements. However, once contributed to a CLO, the underlying loans and participation interests have been securitized and are no longer our direct investment, and the risk returnrisk-return profile has been altered. In general, rather than holding interests in the underlying loans and participation interests, we hold membership interests in a CLO issuer (i.e., the 2018-1 Issuer and 2019-1 Issuer), with the CLO holding the underlying loans. As a result, we are subject both to the risks and benefits associated with the equity interests of the CLO (i.e., the Membership Interests) and the risks and benefits associated with the underlying loans and participation interests held by the 2018-1 Issuer and 2019-1 Issuer.

We are subject to significant restrictions on our ability to advise the CLO2019-1 Issuers.Issuer.

We will manage the assets of the CLO2019-1 IssuersIssuer pursuant to a portfolio management agreementsagreement with the CLO2019-1 IssuersIssuer (the “Portfolio Management AgreementsAgreement”). The indenturesindenture governing the 2018-1 Notes and the 2019-1 Notes (the “CLO2019-1 IndenturesIndenture”) and the Portfolio Management AgreementsAgreement place significant restrictions on our ability to advise the CLO2019-1 IssuersIssuer to buy and sell Collateralcollateral Obligations,obligations, and we are subject to compliance with the CLO2019-1 IndenturesIndenture and the Portfolio Management Agreements.Agreement. As a result of the restrictions contained in the CLO2019-1 IndenturesIndenture and the Portfolio Management Agreements,Agreement, the CLO2019-1 IssuersIssuer may be unable to buy or sell collateral obligations or to take other actions that we might consider in the interest of the CLO2019-1 IssuersIssuer and the holders of CLO2019-1 Notes, and we may be required to make investment decisions on behalf of the CLO2019-1 IssuersIssuer that are different from those made for our other clients. In addition, we may pursue any strategy consistent with the CLO2019-1 IndenturesIndenture and the Portfolio Management Agreements,Agreement, and there can be no assurance that such strategy will not change from time to time in the future. Further, for so long as we manage the assets of the CLO2019-1 IssuersIssuer pursuant to the Portfolio Management Agreements,Agreement, we will elect to not charge any portfolio management fee to which we may be entitled under suchthe Portfolio Management Agreements.Agreement.

In our role as portfolio manager of the CLO2019-1 Issuers,Issuer, we will be acting solely in the best interests of the CLO2019-1 IssuersIssuer and not in the best interests of the Membership Interests of the CLO2019-1 IssuersIssuer that we hold. As the interests of the holders of the applicable CLO2019-1 Notes are senior in the respective CLO2019-1 Issuer’s capital structure to our Membership Interests, we may incur losses if we are required to dispose of a portion of the portfolio of the respective CLO2019-1 Issuer at inopportune times in order to satisfy the outstanding obligations of the holders of the related CLO2019-1 Note.Notes.

The Membership Interests are subordinated to the CLO2019-1 Notes and certain fees and expenses. If any Coverage Test (defined below) is not satisfied as of a determination date, cash flows (if any) and proceeds otherwise payable to the CLO2019-1 IssuersIssuer (which the CLO2019-1 IssuersIssuer could have otherwise distributed with respect to the Membership Interests) will be diverted to the payment of principal on the CLO2019-1 Notes. If the CLO2019-1 IssuersIssuer havehas not received confirmation from S&P Global Ratings of its initial ratings of each class of the applicable CLO2019-1 Notes, or if we fail to hold the required amount of Membership Interests as required by EU risk retention regulations (“Retention Deficiency”), proceeds will be diverted to pay principal on the applicable CLO2019-1 Notes or to purchase additional collateral obligations (or, in the case of a Retention Deficiency, to the extent necessary to reduce such Retention Deficiency to zero).

Although these tests generally compare the principal balance of the collateral obligations to the aggregate outstanding principal amount of the applicable CLO2019-1 Notes, certain reductions are applied to the principal balance of Collateralcollateral Obligationsobligations in connection with certain events, such as defaults or ratings downgrades to “CCC” levels or below, in each case that may increase the likelihood that one or more Overcollateralization Ratio Tests may not be satisfied.

On the scheduled maturity of the CLO2019-1 Notes or if acceleration of the CLO2019-1 Notes occurs after an event of default, proceeds available after the payment of certain administrative expenses) will be applied to pay both principal of and interest on the applicable CLO2019-1 Notes until the applicable CLO2019-1 Notes are paid in full before any further payment will be made on the Membership Interests. As a result, the Membership Interests would not receive any payments until the applicable CLO2019-1 Notes are paid in full.

In addition, if an event of default occurs and is continuing, the holders of the CLO2019-1 Notes will be entitled to determine the remedies to be exercised under the applicable CLO2019-1 Indenture. Remedies pursued by the holders of the CLO2019-1 Notes could be adverse to our interests as the holder of the Membership Interests, and the holders of the CLO2019-1 Notes will have no obligation to consider any possible adverse effect on such other interests. See “— The holders of certain of the CLO2019-1 Notes will control many rights under the CLO2019-1 IndenturesIndenture and therefore, we will have limited rights in connection with an event of default or distributions thereunder.”

The holders of certain CLO2019-1 Notes will control many rights under the CLO2019-1 IndenturesIndenture and therefore, we will have limited rights in connection with an event of default or distributions thereunder.

Under the CLO2019-1 Indentures,Indenture, many of our rights as the holder of the Membership Interests will be controlled by the holders of certain of the CLO2019-1 Notes. Remedies pursued by such holders upon an event of default could be adverse to our interests. If the CLO2019-1 Notes are accelerated following an event of default, proceeds of any realization on the assets will be allocated to the applicable CLO2019-1 Notes (in order of seniority) and certain other amounts owing by the applicable CLO2019-1 Issuer will be paid in full before any allocation to us as the holder of the Membership Interests. Although we as the holder of the Membership Interests will have the right, subject to the conditions set forth in the applicable CLO2019-1 Indenture, to purchase the assets in a sale by the trustee, if an event of default (or otherwise, an acceleration of the CLO2019-1 Notes following an event of default) has occurred and is continuing, we will not have any creditors’ rights against the CLO2019-1 IssuersIssuer and will not have the right to determine the remedies to be exercised under the CLO2019-1 Indentures.Indenture. There is no guarantee that any funds will remain to make distributions to us as the holder of the Membership Interests following any liquidation of the assets and the application of the proceeds from the assets to pay the CLO2019-1 Notes and the fees, expenses, and other liabilities payable by the CLO2019-1 Issuers.Issuer. The ability of the holders of the CLO2019-1 Notes to direct the sale and liquidation of the assets is subject to certain limitations. As set forth in the CLO2019-1 Indentures,Indenture, notwithstanding any acceleration, if an event of default occurs and is continuing and the trustee has not commenced remedies under the CLO2019-1 Indentures,Indenture, we as the portfolio manager of the CLO2019-1 IssuersIssuer may continue to direct dispositions and purchases of collateral obligations to the extent permitted under the CLO2019-1 indentures.Indenture.

If an event of default has occurred and is continuing (unless the trustee has commenced remedies pursuant to the CLO2019-1 IndenturesIndenture), then (x) we as the portfolio managersmanager of the CLO2019-1 IssuersIssuer may continue to direct sales and other dispositions, and purchases, of collateral obligations in accordance with and to the extent permitted pursuant to the CLO2019-1 IndenturesIndenture and (y) the trustee will retain the assets securing the CLO2019-1 Notes intact, collect and cause the collection of the proceeds thereof and make and apply all payments and deposits and maintain all accounts in respect of the assets and the CLO2019-1 Notes in accordance with the CLO2019-1 Indentures,Indenture, unless: (i) the trustee, pursuant to the CLO2019-1 IndenturesIndenture and in consultation with us as the portfolio manager of the CLO2019-1 Issuers,Issuer, determines that the anticipated proceeds of a sale or liquidation of the assets (after deducting the anticipated reasonable expenses of such sale or liquidation) would be sufficient to discharge in full the amounts then due (or, in the case of interest, accrued) and unpaid on the applicable CLO2019-1 Notes for principal and interest (including accrued and unpaid deferred interest), and all other amounts payable pursuant to the priority of distributions prior to payment of principal on such applicable CLO2019-1 Notes (including amounts due and owing, and amounts anticipated to be due and owing, as administrative expenses (without regard to any applicable limitation on such expenses)), and we as the portfolio managersmanager of the CLO2019-1 IssuersIssuer and the holders of at least 662∕3% (a “Supermajority”) of the most senior outstanding class of the respective CLO2019-1 Notes agreesagree with such determination; (ii) in the case of certain events of default, a Supermajority of the most senior outstanding class of the respective CLO2019-1 Notes directs the sale and liquidation of the assets; or (iii) a Supermajority of each class of the respective CLO2019-1 Notes (voting separately by class) directs the sale and liquidation of the assets.

The CLO2019-1 IndenturesIndenture requirerequires mandatory redemption of the CLO2019-1 Notes for failure to satisfy applicable Coverage Tests.

Under the documents governing the 2019-1 CLO Transactions,Transaction, there are two coverage tests (the “Coverage Tests”) applicable to the CLO2019-1 Notes.

The first such test (the “Interest Coverage Test”) compares the amount of interest proceeds received on the portfolio loans held by eachthe CLO2019-1 Issuer to the amount of interest due and payable on the related CLO2019-1 Notes. To meet this first test, for each class of the applicable CLO2019-1 Notes in eachthe such2019-1 CLO Transaction, interest received on the portfolio loans must be equal to or greater than a certain threshold percentage with respect to each such class.

The second such test (the “Overcollateralization Ratio Test”) compares the adjusted collateral principal amount of the portfolio of Collateralcollateral Obligationsobligations of eachthe 2019-1 CLO Transaction to the aggregate outstanding principal amount of the applicable CLO2019-1 Notes. To meet this second test at any time, for each class of the applicable CLO2019-1 Notes, the adjusted collateral principal amount of such Collateralcollateral Obligationsobligations must satisfy a certain threshold percentage amount of the outstanding principal amount of the applicable class of the related CLO2019-1 Notes.

If a Coverage Test is not met on any determination date on which such Coverage Test is applicable, the CLO2019-1 IssuersIssuer will apply available amounts to redeem the applicable CLO2019-1 Notes in an amount necessary to cause such testsCoverage Test to be satisfied. This could result in an elimination, deferral or reduction in the payments of distributions to the related CLO2019-1 Issuer (and as such, to us as the holder of the Membership Interests and indirect beneficiary of any such payments to suchthe CLO2019-1 Issuer).

We may resign or be removed or terminated as portfolio manager of the CLO2019-1 Issuers.Issuer.

We may resign or be removed or terminated as portfolio manager of the CLO2019-1 IssuersIssuer in a number of circumstances, including the breach of certain terms of the CLO2019-1 IndenturesIndenture and the Portfolio Management Agreements.Agreement. In addition, because a new portfolio manager may not be able to manage the CLO2019-1 IssuersIssuer according to the standards of the CLO2019-1 IndenturesIndenture and the Portfolio Management Agreements,Agreement, any transfer of the portfolio management functions to another entity could result in reduced or delayed collections, delays in processing loan transfers and information regarding the loans and a failure to meet all of the applicable procedures required by the Portfolio Management Agreements.Agreement. Consequently, the termination or removal of us as portfolio manager of the CLO2019-1 IssuersIssuer could have material and adverse effects on our performance.

We may, however, invest alongside Bain Capital Credit Clients in certain circumstances where doing so is consistent with our investment strategy as well as applicable law and SEC staff interpretations or exemptive orders. For example, we may invest alongside Bain Capital Credit Clients consistent with guidance promulgated by the SEC staff to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that Bain Capital Credit and our Advisor, acting on our behalf and on behalf of such Bain Capital Credit Clients, negotiates no term other than price. We may also invest alongside Bain Capital Credit Clients as otherwise permissible under regulatory guidance, applicable regulations or exemptive orders and Bain Capital Credit’s allocation policy. If we are prohibited by applicable law from investing alongside Bain Capital Credit Clients with respect to an investment opportunity, we may not be able to participate in such investment opportunity. IfIn ourinstances Advisorwhen recommendsinvestments a particular level of investment to us, and the aggregate amountare recommended tofor us by our Advisor and to/or other participating Bain Capital Credit Clients exceeds the amount of the investment opportunity, subject to applicable law, investments made pursuant to exemptive relief will generally be allocated among the participants pro rata based on capital available for investment in the asset class being allocated and the respective governing documents of the Bain Capital Credit Clients. We expect that available capital for our investments will be determined based on the amount of cash on-hand, existing commitments and reserves, if any, the targeted leverage level, targeted asset mix and diversification requirements and other investment policies and restrictions set by the Board or as imposed by applicable laws, rules, regulations or interpretations. In instances when investments are not made pursuant to exemptive relief,Clients, allocations among us and other Bain Capital Credit Clients, subject to applicable law and regulation, will be done in accordance with our Advisor’s trade allocation practice, which is generally pro rata based on order size.practice. However, there can be no assurance that we will be able to participate in all investment opportunities that are suitable to us.

Debt portfolios are subject to credit and interest rate risk. “Credit risk” refers to the likelihood that an issuer will default in the payment of principal and/or interest on an instrument. Financial strength and solvency of an issuer are the primary factors influencing credit risk. In addition, subordination, lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument, and securities which are rated by rating agencies are often reviewed and may be subject to downgrade. “Interest rate risk” refers to the risks associated with market changes in interest rates.rates, including the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Factors that may affect market interest rates include, without limitation, inflation, slow or stagnant economic growth or recession, unemployment, money supply and the monetary policies of the Federal Reserve Board and central banks throughout the world, international disorders and instability in domestic and foreign financial markets. Changes in the general level of interest rates can affect our net interest income, which is the difference between the interest income earned on interest-earning assets and our interest expense incurred in connection with our interest-bearing debt and liabilities.

While the Federal Reserve raisedannounced interestseveral ratesbenchmark throughoutrate 2022 and 2023, as inflation pressures have eased in recent periods, the Federal Reserve has relaxed its monetary policies and cut the interest rates to support the broader economy.cuts. These developments, along with domestic and international debt and credit concerns, could cause interest rates to be volatile, which may negatively impact our ability to access the debt markets on favorable terms. A prolonged reduction in interest rates could reduce our gross investment income and could result in a decrease in our net investment income if such decreases in interest rates are not offset by a corresponding increase in the interest rates that we earn on any portfolio investments, a decrease in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to SOFR or other interest rate benchmark. Interest rate changes may also affect the value of a debt instrument indirectly (especially in the case of fixed rate securities) and directly (especially in the case of instruments whose rates are adjustable). In general, rising interest rates will negatively impact the price of a fixed rate debt instrument and falling interest rates will have a positive effect on price. Adjustable rate instruments may also react to interest rate changes in a similar manner although generally to a lesser degree (depending, however, on the characteristics of the reset terms, including, among other factors, the index chosen, frequency of reset and reset caps or floors). Interest rate sensitivity is generally more pronounced and less predictable in instruments with uncertain payment or prepayment schedules. We expect that we will periodically experience imbalances in the interest rate sensitivities of our assets and liabilities and the relationships of various interest rates to each other. In a changing interest rate environment, we may not be able to manage this risk effectively, which in turn could adversely affect our performance.

Our investments may include OID and PIK instruments. Because PIK interest results in an increase in the size of the loan balance of the underlying loan, the receipt by us of PIK interest will have the effect of increasing our assets under management. As a result, because the Base Management Fee that we pay to the Advisor is based on the value of our gross assets, the receipt by us of PIK interest will result in an increase in the amount of the Base Management Fee payable by us. To the extent OID and PIK interest income constitute a portion of our income, we will be exposed to risks associated with such income being required to be included in accounting income and taxable income prior to receipt of cash, including the following:

Under the DRIP, if a stockholder owns shares of our common stock, the stockholder will have all cash distributions (net of applicable withholding tax) automatically reinvested in additional shares of that stockholder’s common stock unless such stockholder, or his, her or its nominee on such stockholder’s behalf, specifically “opts out” of the DRIP by delivering a written notice to the plan administrator prior to the record date of the next distribution. If a stockholder does not “opt out” of the DRIP, that stockholder will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in our common stock to the extent the amount reinvested was not a tax-free return of capital. As a result, a stockholder may have to use funds from other sources to pay U.S. federal income tax liability on the value of the common stock received. Even if a stockholder chooses to “opt out” of the DRIP, we will have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash in order to satisfy the Annual Distribution Requirement (as defined above “Item 1. Business—Certain U.S. Federal Income Tax Consequences—Election to be Taxed as a RIC”). As long as a portion of this dividend is paid in cash and certain requirements are met, the entire distribution will be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally will be subject to tax on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner as a cash dividend, even though most of the dividend was paid in shares of common stock.

We may retain some income and capital gains in the future, including for purposes of providing us with additional liquidity, which amounts would be subject to the 4% nondeductible U.S. federal excise tax. In that event, we will be liable for the tax on the amount by which we do not meet the foregoing distribution requirement. See Item 1. Business—Certain U.S. Federal Income Tax Consequences.

We may invest in certain debt and equity investments through taxable subsidiaries and the net taxable income of these taxable subsidiaries will be subject to U.S. federal and state corporate income taxes. We also may invest in certain foreign debt and equity investments which could be subject to foreign taxes (such as income tax, withholding, and value added taxes). If we fail to maintain RIC tax treatment for any reason and are subject to corporate income tax, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution, and the amount of our distributions.

At any time, the U.S. federal income tax laws governing RICs or the administrative interpretations of those laws or regulations may be amended. Any of those new laws, regulations or interpretations may take effect retroactively and could adversely affect the taxation of us or our stockholders. Therefore, changes in tax laws, regulations or administrative interpretations or any amendments thereto could diminish the value of an investment in our shares or the value or the resale potential of our investments.

We have adopted a DRIP, pursuant to which we will reinvest all cash distributions declared by the Board on behalf of stockholders who do not elect to receive their distributions in cash. As a result, if the Board authorizes, and we declare, a cash distribution, then our stockholders who have not opted out of our DRIP will have their cash distributions automatically reinvested (net of applicable withholding tax) in additional common stock, rather than receiving the cash distribution. See Item 1. Business “Dividend Reinvestment Plan” for a description of our dividend policy and obligations.

From time to time, capital markets may experience periods of disruption and instability. Such disruptions may result in, amongst other things, write-offs, the re-pricing of credit risk, the failure of financial institutions or worsening general economic conditions, any of which could materially and adversely impact the broader financial and credit markets and reduce the availability of debt and equity capital for the market as a whole and financial services firms in particular. There can be no assurance these market conditions will not occur or worsen in the future, including as a result of the United Kingdom leaving the European Union, the Russia-Ukraine war, the Israel-Hamas war, outbreaks of disease epidemics and pandemics such as the avian influenza and the coronavirus (COVID-19), rising interest rates or renewed inflationary pressure.

We are subject to risks associated with artificial intelligenceintelligence.

We may be the target of litigation.litigation or stockholder activism.

We may be the target of securities litigation in the future, particularly if the value of shares of our common stock fluctuates significantly. We could also generally be subject to litigation, including derivative actions by our stockholders. In addition our investment activities subject us to litigation relating to the bankruptcy process and the normal risks of becoming involved in litigation by third parties. This risk is somewhat greater where we exercise control or significant influence over a portfolio company’s direction. In addition, stockholder activism, which could take many forms or arise in a variety of situations, including making public demands that we consider strategic alternatives, engaging in public campaigns to attempt to influence our corporate governance and/or our management, and commencing proxy contests to attempt to elect the activists' representatives or others to the Board, has increased in the BDC space in recent years. Any litigation or stockholder activism could result in substantial costs and divert management’s attention and resources from our business and cause a material adverse effect on our business, financial condition and results of operations. Such litigation or stockholder activism could also give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers, make it more difficult for Bain Capital Credit to attract and retain qualified personnel, and subject our stock price to significant fluctuation or other adverse effects arising from the events, risks and uncertainties of any such litigation or activism.

Additionally, new regulatory initiatives related to ESG could adversely affect our business. The SEC has issued rules that, in addition to other matters, would establish a framework for reporting of climate-related risks. For example, the SEC has announced that it may require disclosure of certain ESG-related matters. There is a risk that a significant reorientation in the market following the implementation of these and further measures could be adverse to our portfolio companies if they are perceived to be less valuable as a consequence of, for example, their carbon footprint or “greenwashing” (i.e., the holding out of a product as having green or sustainable characteristics where this is not, in fact, the case). We are, and our portfolio companies may be, or could in the future become subject to the risk that similarnew measuresregulatory initiatives might be introduced in other jurisdictions in the future. At this time, there is uncertainty regarding the scope of such proposals or when they would become effective (if at all). Compliance with any new laws or regulations increases our regulatory burden and could make compliance more difficult and expensive, affect the manner in which we or our portfolio companies conduct our businesses and adversely affect our profitability. On the other hand, certain state governments have begun to challenge the use of ESG factors in investment decisions, potentially setting up conflicting standards for the Company to address.

Leverage may beis utilized to help the Company meet its investment objective. Any such leverageleverage, wouldif beincurred, is expected to increase the total capital available for investment by the Company. As a BDC, we may also invest up to 30% of our portfolio opportunistically in “non-qualifying” portfolio investments, such as investments in non-U.S. companies.

To the extent that expenses to be borne by us are paid by the Administrator, we will generally reimburse the Administrator for such expenses. To the extent the Administrator outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis without profit to the Administrator. We will also reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain rent and compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment and fees paid to third-party providers for goods or services. Our allocable portion of overhead will be determined by the Administrator, which expects to use various methodologies such as allocation based on the percentage of time certain individuals devote, on an estimated basis, to our business and affairs, and will be subject to oversight by our Board. We incurred expenses related to the Administrator of $2.3 million, $2.5 million, and $1.2 million andfor $0.1the millionyears forended December 31, 2024,2025, 20232024 and 20222023, respectively, which is included in other general and administrative expenses on the consolidatedConsolidated statementsStatements of operations.Operations. The sub-administrator is paid its compensation for performing its sub-administrative services under the sub-administration agreement. We incurred expenses related to the sub-administrator of $0.6 million, $0.6 millionmillion, and $0.6 million for the years ended December 31, 2024,2025, 20232024 and 20222023, respectively, which is included in other general and administrative expenses on the consolidatedConsolidated statementsStatements of operations.Operations. The Administrator will not be reimbursed to the extent that such reimbursements would cause any distributions to our stockholders to constitute a return of capital. All of the foregoing expenses are ultimately borne by our stockholders.

The following table showspresents thecertain compositionselected ofinformation theregarding our investment portfolio and associated yield data as of December 31, 2023 (dollars in thousands)2025:

The following table presentsshows certainthe selectedamortized informationcost regardingand fair value of our investmentperforming portfolioand non-accrual investments as of December 31, 20232025 (dollars in thousands):

Loans or debt securities are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. We may make exceptions to this treatment if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2025, there were twelve loans from six issuers placed on non-accrual in the Company’s portfolio. As of December 31, 2024, there were eight loans from five issuers placed on non-accrual in the Company’s portfolio. As of December 31, 2023, there were five loans from three issuers placed on non-accrual in the Company’s portfolio.

As of December 31, 2025, the Company’s investment in SLP consisted of subordinated notes of $157.9 million, preferred equity interests of $1.8 million and equity interests of $5.0 million. As of December 31, 2024, the Company’s investment in SLP consisted of subordinated notes of $146.5 million, preferred equity interests of $10$10.0 thousand and equity interests of ($4.8) million. As of December 31, 2023, the Company’s investment in SLP consisted of subordinated notes of $116.0 million, preferred equity interests of ($1.8) million and equity interests of ($0.4) million. The Company and Amberstone each appointed two members to SLP’s four-person Member Designees’ Committee. All material decisions with respect to SLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee. The Company does not consolidate its investments in SLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control SLP due to the allocation of voting rights among SLP members.

Interest income from investments, which includes interest and accretion of discounts and fees, increaseddecreased to $228.6$211.8 million for the year ended December 31, 20232025 from $166.3$222.2 million for the year ended December 31, 2022,2024, primarily due to risinga basedecrease rates.in yield of the investment portfolio. Dividend income increaseddecreased to $35.8$22.3 million for the year ended December 31, 20232025 from $28.7 million for the year ended December 31, 2024, primarily due to a decrease in dividend income from the SLP and ISLP. PIK income increased to approximately $29.3 million for the year ended December 31, 2025 from $23.1 million for the year ended December 31, 2022,2024, primarily due to an increase in dividendthe incomenumber fromof ourinvestments equityearning interestsPIK in ISLP and SLP.income. Other income decreased to approximately $10.6$9.9 million for the year ended December 31, 20232025 from $15.1$18.6 million for the year ended December 31, 2022,2024, primarily due to a decrease in upfront,structuring, commitmentclosing and amendment fees earned on certain investments. As of December 31, 2023,2025, the weighted average yield of our investment portfolio increaseddecreased to 13.0%10.8% from 11.4%11.7% as of December 31, 2022,2024, at amortized cost.

Interest and debt financing expenses on our borrowings totaled approximately $74.7$80.6 million and $80.0$74.7 million for the years ended December 31, 20242025 and 2023,2024, respectively. Interest and debt financing expense for the year ended December 31, 20242025 as compared to December 31, 20232024 decreasedincreased primarily due to decreasedan usageincrease ofin ourdebt Sumitomooutstanding Creditfor Facility.the period. The weighted average principal debt balance outstanding for the year ended December 31, 20242025 was $1.3$1.5 billion compared to $1.4$1.3 billion for the year ended December 31, 2023.2024.

The combined weighted average interest rate (excluding deferred upfront financing costs and unused fees) of the aggregate borrowings outstanding for yearsthe year ended December 31, 2025 and the year ended December 31, 2024 andwas 2023 were 5.1%4.8% and 5.2%,5.1%, respectively.

Interest and debt financing expenses on our borrowings totaled approximately $80.0$74.7 million and $52.3$80.0 million for the years ended December 31, 20232024 and 2022,2023, respectively. Interest and debt financing expense for the year ended December 31, 20232024 as compared to December 31, 20222023 increaseddecreased primarily due to rise in base rates of the variable rate debt and thedecreased usage of our Sumitomo Credit Facility. The weighted average principal debt balance outstanding for the year ended December 31, 20232024 was $1.4$1.3 billion compared to $1.3$1.4 billion for the year ended December 31, 2022.2023.

Management fee (net of waivers) increased to $36.1$37.2 million for the year ended December 31, 20232025 from $34.7$35.6 million for the year ended December 31, 2022,2024. Management fee (gross of waivers) increased to $37.2 million for the year ended December 31, 2025 from $35.6 million for the year ended December 31, 2024, primarily due to an increase in total assets throughout the year ended December 31, 20232025 compared to the year ended December 31, 2022.2024. Management fee waived for the years ended December 31, 20232025 and 20222024 werewas $0.0 million and $0.0 million, respectively.

For the years ended December 31, 2024,2025, 20232024 and 2022,2023, we had net realized losses on investments of ($10.4$28.2) million, ($43.9$10.4) million and ($3.1$43.9) million,million respectively, which were primarily driven by full or partial sales or paydowns of our investments. For the years ended December 31, 2024,2025, 20232024 and 2022,2023, we had net realized gains (losses) on foreign currency transactions of $0.8 million, ($0.3) million,million and ($5.1) million and $5.3 million, respectively, primarily as a result of fluctuations in the EUR, GBP, NZDAUD, and CADNZD exchange rates. For the years ended December 31, 2024,2025, 20232024 and 2022,2023, we had net realized gains (losses) on forward currency contracts of ($5.8) million, $2.3 million,million and ($0.4) million and $20.9 million, respectively, primarily as a result of settling AUD, EUR, GBPEUR and NOKGBP forward contracts.

For the years ended December 31, 2024,2025, 20232024 and 2022,2023, we had unrealized appreciation on forward currency exchange contracts of ($12.6) million, $5.8 million,million and ($2.3) million respectively. For the year ended December 31, 2025, unrealized depreciation on forward currency exchange contracts was primarily due to AUD, EUR and ($5.3)NZD million,forward respectively.contracts. For the year ended December 31, 2024, unrealized appreciation on forward currency exchange contracts was primarily due to AUD, EUR, GBP, and NOK forward contracts. For the year ended December 31, 2023, unrealized appreciation on forward currency exchange contracts was primarily due to GBP forward contracts. For the year ended December 31, 2022, unrealized appreciation on forward currency exchange contracts was primarily due to EUR and GBP forward contracts.

Included in total net gains (losses) on the consolidatedConsolidated statementsStatements of operationsOperations were gains (losses) of $18.2 million, ($5.6) million, $4.1 million and ($13.0)$4.1 million related to realized and unrealized gains and losses on investments, foreign currency holdings and non-investment assets and liabilities attributable to the changes in foreign currency exchange rates for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. Including the total net realized and unrealized gains (losses) on forward currency exchange contracts of ($18.4) million, $8.1 million, and ($2.7) million and $15.6 million, respectively, included in the above table, the net impact of foreign currency on total net gains (losses) on the consolidatedConsolidated statementsStatements of operationsOperations is ($0.1) million, $2.5 million, and $1.4 million and $2.7 millionfor the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively.

For the years ended December 31, 2024,2025, 20232024 and 2022,2023, the increase in net assets resulting from operations was $98.8 million, $119.4 million, and $123.4 million and $105.5 million, respectively. Based on the weighted average shares of common stock outstanding for the years ended December 31, 2024,2025, 20232024 and 2022,2023, our per share net increase in net assets resulting from operations was $1.53, $1.85, and $1.91 and $1.63, respectively.

Our liquidity and capital resources are derived primarily from proceeds from equity issuances, advances from our credit facilities, 2019‑1 Debt, March 2026 Notes, October 2026 Notes, March 2030 Notes, the Sumitomo Credit Facility and cash flows from operations. The primary uses of our cash are for (1) investments in portfolio companies and other investments and to comply with certain portfolio diversification requirements; (2) debt service, repayment, and other financing costs; (3) cash distributions to the holders of our common stock; and (4) the cost of operations (including payments to the Advisor under the Investment Advisory and Administration Agreements).

For the year ended December 31, 2023,2025, cash, foreign cash, restricted cash, and cash equivalents decreased by $13.2$40.2 million. During the year ended December 31, 2023,2025, we provided $219.3$29.5 million in cash for operating activities. The increase in cash provided forby operating activities was primarily related to the purchases of investments of $844.3 million, which was offset by proceeds from principal payments and sales of investments of $937.6$1,245.0 million and a net increase in assets resulting from operations of $123.4$98.8 million, which was offset by purchases of investments of $1,308.3 million. During the year ended December 31, 2023,2025, we used $231.4$71.9 million for financing activities, primarily on repayments of our$1,228.2 Sumitomomillion Credit Facility of $480.0 million,and distributions paid during the period of $99.4$145.8 million, partially offset by borrowingsthe issuance of $348.0the March 2030 Notes for $350.0 million, the execution of the 2019‑1 CLO Replacement Notes for $150.6 million and borrowings under our Sumitomo Credit Facility of $684.0 million.

In addition to the other information set forth in this report, you should carefully consider the factors described below and discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025,Report, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties are not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. During the fiscal quarter ended MarchJune 31,30, 2026, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.Report.

Bain Capital Specialty Finance, Inc. (the “Company”, “we”, “our” and “us”) is an externally managed specialty finance company focused on lending to middle market companies. We have elected to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”). We are managed by the Advisor, a subsidiary of Bain Capital Credit, LP (“Bain Capital Credit”). Our Advisor is registered as an investment adviser with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Our Advisor also provides the administrative services necessary for us to operate (in such capacity, our “Administrator”). Since we commenced operations on October 13, 2016 through MarchJune 31,30, 2026, we have invested approximately $9,975.9$10,129.6 million in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. We seek to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last-out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds.

Our debt investment portfolio consists of primarily floating rate loans. As of MarchJune 31,30, 2026 and December 31, 2025, 92.6%94.5% and 92.2%, respectively, of our debt investments, based on fair value, bore interest at floating rates, which may be subject to interest rate floors. Variable-rate investments subject to a floor generally reset periodically to the applicable floor, only if the floor exceeds the index. Trends in base interest rates, such as SOFR, may affect our net investment income over the long term. In addition, our results may vary from period to period depending on the interest rates of new investments made during the period compared to investments that were sold or repaid during the period; these results reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business or macroeconomic trends.

To the extent that expenses to be borne by us are paid by the Administrator, we will generally reimburse the Administrator for such expenses. To the extent the Administrator outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis without profit to the Administrator. We will also reimburse the Administrator for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including certain rent and compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and any of their respective staff who provide services to us, operations staff who provide services to us, internal audit staff, if any, to the extent internal audit performs a role in our Sarbanes-Oxley internal control assessment and fees paid to third-party providers for goods or services. Our allocable portion of overhead will be determined by the Administrator, which expects to use various methodologies such as allocation based on the percentage of time certain individuals devote, on an estimated basis, to our business and affairs, and will be subject to oversight by our Board. We incurred expenses related to the Administrator of $0.6 million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively, which is included in other general and administrative expenses on the Consolidated Statements of Operations. The sub-administrator is paid its compensation for performing its sub-administrative services under the sub-administration agreement. We incurred expenses related to the sub-administrator of $0.2 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively, which is included in other general and administrative expenses on the Consolidated Statements of Operations. The Administrator will not be reimbursed to the extent that such reimbursements would cause any distributions to our stockholders to constitute a return of capital. All of the foregoing expenses are ultimately borne by our stockholders.

We may borrow money from time to time. However, our ability to incur indebtedness (including by issuing preferred stock), is limited by applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 150%. The Company's sole initial shareholder adopted this 150% threshold pursuant to Section 61(a)(2) of the 1940 Act on February 1, 2019; previously the threshold was 200%. In determining whether to borrow money, we will analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. As of MarchJune 31,30, 2026, the Company’s asset coverage was 174.6%.171.0%.

During the three months ended MarchJune 31,30, 2026, we invested $243.2$182.0 million, including PIK, in 10799 portfolio companies, and had $255.4$277.2 million in aggregate amount of principal repayments and sales, resulting in a net decrease in investments of $12.2$95.2 million for the period. Of the $243.2$182.0 million invested during the three months ended MarchJune 31,30, 2026, $83.7$67.1 million was related to drawdowns on delayed draw term loans and revolvers of our portfolio companies.

During the three months ended MarchJune 31,30, 2025, we invested $277.2$529.6 million, including PIK, in 8994 portfolio companies, and had $246.4$502.3 million in aggregate amount of principal repayments and sales, resulting in a net increase in investments of $30.8$27.3 million for the period. Of the $277.2$529.6 million invested during the three months ended MarchJune 31,30, 2025, $123.8$169.7 million was related to drawdowns on delayed draw term loans and revolvers of our portfolio companies.

The following table shows the composition of the investment portfolio and associated yield data as of MarchJune 31,30, 2026 (dollars in thousands):

The following table presents certain selected information regarding our investment portfolio as of MarchJune 31,30, 2026:

The following table shows the amortized cost and fair value of our performing and non-accrual investments as of MarchJune 31,30, 2026 (dollars in thousands):

Loans or debt securities are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest generally is reversed when a loan or debt security is placed on non-accrual status. Interest payments received on non-accrual loans or debt securities may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans and debt securities are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. We may make exceptions to this treatment if the loan has sufficient collateral value and is in the process of collection. As of MarchJune 31,30, 2026, there were eleventwenty-one loans from sixfour issuers placed on non-accrual in the Company’s portfolio. As of December 31, 2025, there were twelve loans from six issuers placed on non-accrual in the Company’s portfolio.

The following table shows the amortized cost and fair value of the investment portfolio, cash and cash equivalents and foreign cash as of MarchJune 31,30, 2026 (dollars in thousands):

attendance at and participation in board meetings or presentations by portfolio companies; and review of monthly and quarterly financialConsolidated statementsFinancial Statements and financial projections of portfolio companies.

The following table shows the composition of our portfolio on the 1 to 4 rating scale as of MarchJune 31,30, 2026 (dollars in thousands):

As of MarchJune 31,30, 2026, the Company had commitments with respect to its equity and subordinated note interests of ISLP in the aggregate amount of $254.3 million. The Company has contributed $254.3 million in capital and has $0.0 million inno unfunded capital contributions.commitments. As of MarchJune 31,30, 2026, Pantheon had commitments with respect to its equity and subordinated note interests of ISLP in the aggregate amount of $149.2 million. Pantheon had contributed $149.2 million in capital and has $0.0 million inno unfunded capital contributions.commitments. The Company and Pantheon each appointed two members to ISLP’s four-person Member Designees’ Committee. All material decisions with respect to ISLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee. The Company does not consolidate its investments in ISLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control ISLP due to the allocation of voting rights among ISLP members.

As of MarchJune 31,30, 2026, ISLP had $711.9$705.7 million in debt and equity investments, at fair value. The following table is a summary of ISLP’s portfolio at fair value:

On February 9, 2022, the Company,Company and an entity advised by Amberstone Co., Ltd. (“Amberstone”), a credit focused investment manager that advises institutional investors, committed capital to a newly formed joint venture, Bain Capital Senior Loan Program, LLC (“SLP”). Pursuant to an amended and restated limited liability company agreement (the “LLC Agreement”) between the Company and Amberstone, each such party has a 50% economic ownership interest in SLP. SLP will seek to invest primarily in senior secured first lien loans of U.S. borrowers.

As of MarchJune 31,30, 2026, the Company’s investment in SLP consisted of subordinated notes of $166.9$163.8 million, preferred equity interests of $1.8 million and equity interests of $3.6$0.0 million. As of December 31, 2025, the Company’s investment in SLP consisted of subordinated notes of $157.9 million, preferred equity interests of $1.8 million and equity interests of $5.0 million. The Company and Amberstone each appointed two members to SLP’s four-person Member Designees’ Committee. All material decisions with respect to SLP, including those involving its investment portfolio, require unanimous approval of a quorum of Member Designees’ Committee. The Company does not consolidate its investments in SLP as it is not a substantially wholly owned investment company subsidiary. In addition, the Company does not control SLP due to the allocation of voting rights among SLP members.

Our operating results for the three months ended MarchJune 31,30, 2026 and 2025 were as follows (dollars in thousands):

The composition of our investment income for the three months ended MarchJune 31,30, 2026 and 2025 was as follows (dollars in thousands):

The composition of our operating expenses for the three months ended MarchJune 31,30, 2026 and 2025 were as follows (dollars in thousands):

Interest and debt financing expenses on our borrowings totaleddecreased approximatelyto $20.3$20.7 million andfrom $18.9$21.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. This decrease was primarily due to a decrease in average debt outstanding. Interest and debt financing expenseexpenses on our borrowings increased to $40.9 million from $40.7 million for the threesix months ended MarchJune 31,30, 2026 asand compared2025, torespectively. MarchThis 31,increase 2025 increasedwas primarily due to an increasefluctuations in debtbase outstanding for the period.rates. The weighted average principal debt balance outstanding for the three months ended MarchJune 31,30, 2026 was $1.6$1.5 billion compared to $1.4$ 1.6 billion for the three months ended MarchJune 31,30, 2025. The weighted average principal debt balance outstanding for the six months ended June 30, 2026 was $1.5 billion compared to $1.5 billion for the six months ended June 30, 2025.

The combined weighted average interest rate (excluding deferred upfront financing costs and unused fees) of the aggregate borrowings outstanding for the threesix months ended MarchJune 31,30, 2026 and the year ended December 31, 2025 was 4.6%4.8% and 4.8%, respectively.

Management fee (net of waivers) wasdecreased $9.1to $9.0 million for the three months ended MarchJune 31,30, 2026 andfrom $9.1$9.3 million for the three months ended MarchJune 31,30, 2025. Management fee (gross of waivers) wasdecreased $9.1to $9.0 million for the three months ended MarchJune 31,30, 2026 andfrom $9.1$9.3 million for the three months ended MarchJune 31,30, 2025, primarily due to a decrease in total assets throughout the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Management fee waived for the three months ended MarchJune 31,30, 2026 and 2025 was $0.0 million and $0.0 million, respectively.

Incentive fee (net of waivers) increaseddecreased to $5.6$0.8 million for the three months ended MarchJune 31,30, 2026 from $2.2$5.4 million for the three months ended MarchJune 31,30, 2025. The following table summarizes the incentive fee for the three months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):

For the three months ended MarchJune 31,30, 2026, there were no incentive fees related to the GAAP Incentive Fee.

Professional fees and other general and administrative expenses decreased to $2.8$2.4 million for the three months ended MarchJune 31,30, 2026 from $3.3$2.6 million for the three months ended MarchJune 31,30, 2025, primarily due to a decrease in costs associated with servicing our investment portfolio.

The following table summarizes our net realized and unrealized gains (losses) for the three months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):

For the three months ended MarchJune 31,30, 2026, realized gains were primarily driven by the sale of the Company’s equity interest in BTXFCG Precision.Acquisitions, Inc. For the three months ended MarchJune 31,30, 2026, realized losses were primarily driven by the saleexit of the Company’s equitydebt interestinvestments in GaleAptus Aviation1724 (Offshore)Gmbh Co.and Music Creation Group Bidco GmbH as well as a restructuring of the Company's investment in Abracon Group Holding, LLC.

For the three months ended MarchJune 31,30, 2025, realized gains were primarily driven by the sale of the Company’sCompany's investmentequity interest in ElkEagle ParentRock Holdings,Capital LP.Corporation. For the three months ended MarchJune 31,30, 2025, realized losses were primarily driven by the sale of the Company’sCompany's debt investment in AimbridgeAnsett AcquisitionAviation Co., Inc. and Forming Machining Industries Holdings, LLC.Training.

For the three months ended MarchJune 31,30, 2026, we had $28.8$38.6 million in unrealized appreciation on 5061 portfolio company investments, which was offset by $46.7$38.2 million in unrealized depreciation on 160150 portfolio company investments. For the three months ended MarchJune 31,30, 2026, the unrealized appreciation was primarily driven by the reversal of unrealized depreciation resulting from the saleexit of GaleAptus Aviation1724 (Offshore)Gmbh Co.and Music Creation Group Bidco GmbH and the restructuring of Abracon Group Holdings, LLC. and company specific valuation adjustments on equity investments in Legacy Corporate Lending HoldCo, LLC and AXH Air Coolers.Coolers and on debt investments in American Trailer Rental Group. For the three months ended MarchJune 31,30, 2026, the unrealized depreciation was primarily driven by decreases in the fair value of the Company’sCompany's investment in ISLPSLP and certain portfolio company investments including,including Applitools,Service AmericanMaster, TrailerA&R RentalLogistics, Group, Aptus 1724 GmbhInc, and AbraconMZR Group Holding,Buyer, LLC, reflecting a combination of company specific valuation adjustments and market driven factors including widening of credit spreads.

For the three months ended MarchJune 31,30, 2025, we had $50.9$31.3 million in unrealized appreciation on 77 portfolio company investments, which was offset by $26.2$27.9 million in unrealized depreciation on 99102 portfolio company investments. For the three months ended MarchJune 31,30, 2025, unrealized appreciation was primarily driven by an increase in the reversalfair value of prior unrealized depreciation resulting from the saleCompany's ofinvestment Aimbridgein Hospitality and Forming Machining Industries Holdings, LLCSLP and company specific valuation adjustments on Legacyequity Corporateinvestments Lendingin HoldCo, LLC, Eagle Rock Capital CorporationiBanFirst, and Lightning Holdings B, LLC. For the three months ended MarchJune 31,30, 2025, unrealized depreciation was primarily due to a decrease in fair value of the Company's investment in ISLP, widening of credit spreads and company specific valuation adjustments on Thrasio, LLC and Walker Edison.

The following table summarizes theour impactnet ofrealized foreignand currencyunrealized gains (losses) for the threesix months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands):