CCAP 10-K & 10-Q changes, risk factors and insider trading
Crescent Capital BDC, Inc. · Nasdaq · CIK 1633336 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We may invest in significant risk transfer securities, or other similar synthetic instruments, issued by banks or other financial institutions.”
Removed heading “We are an “emerging growth company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common shares less attractive to investors.”
Removed heading “Changes in healthcare laws and other regulations applicable to some of our portfolio companies businesses may constrain their ability to offer their products and services.”
Largest changes
“Changes in healthcare laws and other regulations applicable to some of our portfolio companies businesses may constrain their ability to offer their products and services.”see in full comparison
“We are an “emerging growth company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common shares less attractive to investors.”see in full comparison
“We may invest in significant risk transfer securities, or other similar synthetic instruments, issued by banks or other financial institutions.”see in full comparison
“As long as we remain an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. …”see in full comparison
“We are and we will remain an “emerging growth company” as defined in the JOBS Act until the earlier of (a) the last day of the fiscal year (i) in which we have total annual gross revenue of at least $1.235 billion, or (ii) in which we are deemed to be a large accelerated filer, which means the market value of our common shares that is held by non-affiliates exceeds $700 million as of the date of our most recently completed second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. …”see in full comparison
“Changes in healthcare or other laws and regulations applicable to the businesses of some of our portfolio companies may occur that could increase their compliance and other costs of doing business, require significant systems enhancements, or render their products or services less profitable or obsolete, any of which could have a material adverse effect on their results of operations. …”see in full comparison
Full comparison: every changed paragraph (27)
We may, however, invest alongside Crescent’s investment funds, accounts and investment vehicles 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 such investment funds, accounts and investment vehicles consistent with guidance promulgated by the SEC staff to purchase interests in a single class of privately placed securities so long as certain conditions and requirements are met, including that Crescent, acting on our behalf and on behalf of such investment funds, accounts and investment vehicles, negotiates no term other than price.
We make many of our portfolio investments in the form of loans and securities that are not publicly traded and for which no market-based price quotation is available. As a result, our investment adviser, as the Board of Directors’Board's valuation designee,designee (in such capacity, the “Valuation Designee”), will determine the fair value of these loans and securities as described abovebelow in “—Risks-Risks Relating to our Business and Structure—Most - The majority of our portfolio investments willare notrecorded beat publiclyfair tradedvalue as determined in good faith by the Valuation Designee subject to the oversight of our Board and, as a result, there may be uncertainty as to the fair value of theseour investmentsportfolio may not be readily determinable.investments.” Each of the interested members of our Board has an indirect pecuniary interest in our investment adviser. The participation of our investment adviser’s investment professionals in our valuation process, and the pecuniary interest in our investment adviser by certain members of our Board, could result in a conflict of interest as our investment adviser’s management fee is based, in part, on the value of our net assets, and our incentive fees will be based, in part, on realized gains and realized and unrealized losses.
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 federal and state corporate income taxes. We also may invest in certain foreign debt and equity investments that 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. In addition, because the relevant provisions of the Code may change, compliance with one or more of the RIC requirements may be impossible or impracticable.
The majority of our portfolio investments are recorded at fair value as determined in good faith by the Adviser as Valuation Designee withsubject approvalto fromthe oversight of our Board and, as a result, there may be uncertainty as to the value of our portfolio investments.
Many of our portfolio investments are in the form of loans and securities that are not publicly traded. The fair value of loans, securities and other investments that are not publicly traded may not be readily determinable, and we will value these investments at fair value as determined by the Adviser as Valuation Designee in good faith in accordance with Rule 2a-5 and withsubject to the approvaloversight of our Board, including to reflect significant events affecting the value of our investments. Most, if not all, of our investments (other than cash and cash equivalents) will be classified as Level 3 under the FASB Accounting Standards Codification, Fair Value Measurements and Disclosures (ASC Topic 820). This means that our portfolio valuations will be based on unobservable inputs and our own assumptions about how market participants would price the asset or liability in question. We expect that inputs into the determination of fair value of our portfolio investments will require significant management judgment or estimation. Even if observable market data are available, such information may be the result of consensus pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information. We retain the services of one or more independent service providers to review the valuation of these loans and securities. However, the ultimate determination of fair value will be made by the Adviser as Valuation Designee withsubject approvalto bythe oversight of our Board and not by such third-party valuation firm. The types of factors that the Valuation Designee may take into account in determining the fair value of our investments generally include, as appropriate, comparison to publicly-traded securities including such factors as yield, maturity and measures of credit quality, the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made in the future, comparisons to publicly traded companies, relevant credit market indices and other relevant factors.
On January 20, 2025, Mr. Donald J. Trump was inaugurated as President of the United States. As a candidate, President Trump called for significant policy changes and the reversal of several of the prior presidential administration’s policies. To the extent the U.S. Congress or the current presidential administration implements changes to U.S. policy, those changes may impact, among other things, the U.S. and global economy, international trade and relations, unemployment, immigration, corporate taxes, healthcare, the U.S. regulatory environment, inflation, interest rates, fiscal or monetary policy and other areas in ways that adversely impact us or our portfolio companies.
Additionally, new regulatory initiatives related to ESG that are applicable to us and our portfolio companies could adversely affect our business. For example, the SEC has proposed rules that, in addition to other matters, would establish a framework for reporting of climate-related risks. Compliance with any new laws, regulations or disclosure obligations 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.
Use of artificial intelligence and machine learning technology could include the input of confidential information in contravention of applicable policies, contractual or other obligations or restrictions, resulting in such confidential information becoming accessible by other third-party artificial intelligence and machine learning technology applications and users. The use of artificial intelligence and machine learning technology by our and our portfolio companies’ competitors may adversely affect our and our portfolio companies’ performance.
There hashave recently been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs.tariffs, and there is ongoing discussion and commentary regarding further potential changes. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. Any of these factors could depress economic activity and restrict our portfolio companies’ access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.
We are an “emerging growth company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common shares less attractive to investors.
We are and we will remain an “emerging growth company” as defined in the JOBS Act until the earlier of (a) the last day of the fiscal year (i) in which we have total annual gross revenue of at least $1.235 billion, or (ii) in which we are deemed to be a large accelerated filer, which means the market value of our common shares that is held by non-affiliates exceeds $700 million as of the date of our most recently completed second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. For so long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict if investors will find our common shares less attractive because we will rely on some or all of these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) the for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will take advantage of the extended transition period for complying with new or revised accounting standards, which may make it more difficult for investors and securities analysts to evaluate us since our financial statements may not be comparable to companies that comply with public company effective dates and may result in less investor confidence.
As a BDC, we are required to carry itsour investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by the ourValuation Board,Designee, as described above in “- —Risks Relating to our Business and Structure— - The majority of our portfolio investments are recorded at fair value as determined in good faith by Adviser asthe Valuation Designee withsubject approvalto fromthe oversight of our Board and, as a result, there may be uncertainty as to the value of our portfolio investments.”
When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, weour useinvestment adviser considers the pricing indicated by the external event to corroborate ourits valuation. While most of our investments are not publicly traded, applicable accounting standards require us to assume as part of its valuation process that its investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity). As a result, volatility in the capital markets can also adversely affect our investment valuations. We record decreases in the market values or fair values of our investments as unrealized depreciation. Declines in prices and liquidity in the corporate debt markets may result in significant net unrealized depreciation in our portfolio. The effect of all of these factors on our portfolio may reduce our NAV by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer additional unrealized losses in future periods, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Certain of our portfolio companies may be in industries that have been, or are expected to be, impacted by inflation. RecentOngoing inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our portfolio companies’ operations. If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results and impact their ability to pay interest and principal on our loans, particularly if interest rates rise in response to inflation. In addition, any projected future decreases in our portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result in future realized or unrealized losses and therefore reduce our net assets resulting from operations.
We may be subject to risks under hedging transactions and may become subject to risk if itwe investsinvest in non-U.S. securities.
We may invest in significant risk transfer securities, or other similar synthetic instruments, issued by banks or other financial institutions.
Significant risk transfer (“SRT”) securities, or other similar synthetic instruments, typically enable a bank, other financial institution or issuer to transfer the credit risk associated with a pool of underlying obligations (or “reference assets”) to investors, such as us, and are subject to, among other risks, the credit risks associated with the applicable reference assets. In connection with an investment in SRT securities or other similar synthetic instruments, we may have a contractual relationship only with the counterparty of such synthetic instrument, and not with the reference obligor of the reference asset. Accordingly, we generally will have no right to directly enforce compliance by the reference obligor with the terms of the reference asset nor will we have any rights of setoff against the reference obligor or rights with respect to the reference asset. We will not directly benefit from the collateral supporting the reference asset and will not have the benefit of the remedies that would normally be available to a holder of such reference asset. In addition, in the event of the insolvency of the counterparty, we may be treated as a general creditor of such counterparty, and will not have any claim with respect to the reference asset. SRT transactions are typically linked to a first-loss or mezzanine tranche of a larger portfolio; accordingly, an exposure to that portfolio would be leveraged.
Changes in healthcare laws and other regulations applicable to some of our portfolio companies businesses may constrain their ability to offer their products and services.
Changes in healthcare or other laws and regulations applicable to the businesses of some of our portfolio companies may occur that could increase their compliance and other costs of doing business, require significant systems enhancements, or render their products or services less profitable or obsolete, any of which could have a material adverse effect on their results of operations. There has also been an increased political and regulatory focus on healthcare laws in recent years, and new legislation could have a material effect on the business and operations of some of our portfolio companies.
Climate change creates physical and financial risk and some of our portfolio companies may be adversely affected by climate change. For example, the needs of customers of energy companies vary with weather conditions, primarily temperature and humidity. To the extent weather conditions are affected by climate change, energy use could increase or decrease depending on the duration and magnitude of any changes. Increases in the cost of energy could adversely affect the cost of operations of our portfolio companies if the use of energy products or services is material to their businesses. A decrease in energy use due to weather changes may affect some of our portfolio companies' financial conditions, through decreased revenues. Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions. Other risks associated with climate change include risks related to the impact of climate-related legislation and regulation (both domestically and internationally), as well as risks related to climate-related business trends. These events and the disruptions they cause, alone or in combination, could also lead to increased costs of insurance for us and/or our portfolio companies.
Because our commonCommon sharesShares will beare registered under the Exchange Act, ownership information for any person who beneficially owns 5% or more of our commonCommon sharesShares will have tomust be disclosed in a Schedule 13G or other filings with the SEC. Beneficial ownership for these purposes is determined in accordance with the rules of the SEC, and includes having voting or investment power over the securities. In some circumstances, our common stockholders who choose to reinvest their dividends may see their percentage stake in us increased to more than 5%, thus triggering this filing requirement. Each stockholder is responsible for determining its filing obligations and preparing the filings. In addition, our common stockholders who hold more than 10% of a class of our common shares may be subject to Section 16(b) of the Exchange Act, which recaptures for the benefit of our profits from the purchase and sale of registered stock (and securities convertible or exchangeable into such registered stock) within a six-month period.
Shares of closed-end investment companies frequently trade at a market price that is less than the net asset value that is attributable to those shares. This characteristic of closed-end investment companies is separate and distinct from the risk that our net asset value per share may decline. It is not possible to accurately predict whether any shares of our common stock will trade at, above, or below net asset value. In the recent past, the stocks of BDCs as an industry, including at times shares of our common stock, have traded below net asset value. See “Item 1a. Risk Factors-Risks Relating to Macroeconomic Factors: Market disruptions and other geopolitical or macroeconomic events could create market volatility that negatively impacts our business, financial condition and earnings.” When our common stock is trading below its net asset value per share, we will generally not be able to issue additional shares of our common stock at its market price without first obtaining approval for such issuance from our stockholders and our independent directors.
general economic trends and other external factors; and loss of a major funding source.
uncertainty regarding U.S. immigration and work permit policies;
loss of a major funding source; and an increase in negative global media coverage relating to the private credit industry.
As long as we remain an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will remain an emerging growth company for up to five years following an IPO or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues equal or exceeds $1.235 billion, (ii) December 31 of the fiscal year that we become a "large accelerated filer” as defined in Rule 12b-2 under the 1934 Act which would occur if the market value of our shares that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least 12 months and have filed an annual report on Form 10-K, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding three-year period or (iv) December 31 of the fiscal year following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement under the 1933 Securities Act.
Management's Discussion & Analysis (MD&A)
Removed heading “FCRD Acquisition”
Removed heading “Capital Share Activity”
Removed heading “Series 2020A Unsecured Notes”
Removed heading “Series 2021A Unsecured Notes”
Removed heading “Series 2023A Unsecured Notes”
Largest changes
“On December 20, 2024, we entered into the Third Supplement dated as of December 20, 2024 (the “Third Supplement”) by and among us and the qualified institutional investors named therein to the Note Purchase Agreement dated July 30, 2020 by and among us and the purchasers party thereto. …”see in full comparison
“On July 30, 2020, we completed a private offering of $50.0 million aggregate principal amount of 5.95% senior unsecured notes due July 30, 2023 (the “Series 2020A Unsecured Notes”). The Series 2020A Unsecured Notes were issued in two $25.0 million issuances on July 30, 2020 and October 28, 2020. On July 28, 2023, Series 2020A Unsecured Notes were repaid upon the issuance of the Series 2023A Unsecured Notes, as defined below.”see in full comparison
Full comparison: every changed paragraph (26)
FCRD Acquisition
On March 9, 2023, we completed the previously announced acquisition of First Eagle Alternative Capital BDC, Inc. ("FCRD"), a Delaware corporation, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 3, 2022 (the "FCRD Acquisition"). The board of directors of both companies each unanimously approved the FCRD Acquisition and on March 7, 2023, FCRD’s stockholders approved the merger. In accordance with the terms of the Merger Agreement, holders of shares of FCRD’s common stock had their shares of FCRD common stock converted to the right to receive, in the aggregate, approximately (1) $8.6 million in cash payable by the Company, (2) 6,174,187 validly issued, fully paid and non-assessable shares of our common stock, and (3) $35.0 million in cash payable by the Adviser. This transaction resulted in our then-existing stockholders owning approximately 83% and FCRD’s then-existing stockholders owning approximately 17% of our common stock.
The following table presents certain selected information regarding our investment portfolio:
Excludes $335.0 million of assets at cost acquired in connection with the FCRD Acquisition. The assets acquired, at cost, were comprised of $185.1 million of Senior Secured First Lien, $100.1 million of Unitranche First Lien, $2.8 million of Equity investments, and $47.0 million of LLC/LP Equity Interests The following table presents certain selected information regarding our investment portfolio:
As of December 31, 2024,2025, we had eighteen investments across seveneleven portfolio companies on non-accrual status, which represented 2.2%4.1% and 0.9%2.0% of the total debt investments at cost and fair value, respectively. As of December 31, 2023,2024, we had seventeen investments across nineseven portfolio companies on non-accrual status, which represented 2.0%2.2% and 1.9%0.9% of the total debt investments at cost and fair value, respectively. The remaining debt investments were performing and current on their interest payments as of December 31, 2024,2025 and 2023.2024.
Interest income, which includes amortization of upfront fees, increaseddecreased from $169.8 million, for the year ended December 31, 2023, to $183.0 million for the year ended December 31, 2024,2024 to $156.4 million for the year ended December 31, 2025. The decrease was primarily due to a decrease in the growthbenchmark rates and restructurings of ourcertain incomedebt producing portfolio and increase in one-time non-recurring income.investments. Included in interest from investments for the years ended December 31, 20242025 and December 31, 20232024 are $3.7$2.3 million and $1.8$3.7 million of accelerated accretion of OID related to paydown activity, respectively.
Dividend income decreased from $13.3$11.3 million for the years ended December 31, 20232024 to $11.3$7.7 million for the year ended December 31, 20242025 primarily due to lower dividend distributions from our portfolioinvestment companies.in First Eagle Logan JV, LLC. For the years ended December 31, 20242025 and December 31, 2023,2024, we recorded $3.1$3.2 million and $1.0$3.1 million of other income, respectively. The increase is attributable to higher origination relatedorigination-related fee income.
Interest and other debt financing costs include interest, amortization of deferred financing costs including upfront commitment fees and unused fees on our credit facilities. For the years ended December 31, 20242025 and December 31, 20232024 interest and other debt financing costs were $62.8$57.5 million and $58.7$62.8 million, respectively. The increasedecrease in interest and other debt financing costs was primarily due to a higherdecrease weightedin averagethe debtbenchmark outstanding.rates.
For the years ended December 31, 20242025 and December 31, 2023,2024, we incurred management feesfees, net of $20.2waivers, of $20.3 million and $19.6$20.1 million, respectively, of which $0.1 million and $0.2 million, respectively, were waived.respectively. The increase in net management fees was driven by higher average assets under management.
For the years ended December 31, 20242025 and December 31, 2023,2024, we incurred income based incentive feesfees, net of $18.9waivers, of $14.1 million and $17.5$18.7 million, of which $0.1 million and $0.3 million, respectively, were waived.respectively. The increasedecrease in net incentive fees was driven by higherlower pre-incentive fee net investment income.
For the years ended December 31, 20242025 and 2023,2024, other general and administrative expenses were $2.5$3.4 million and $2.8$2.6 million, respectively. The decreaseincrease is related to higher administrative costs in otherthe generalinitial andyear administrativeof expensescompliance waswith duethe toSection lower404(b) operatingof costs.the Sarbanes-Oxley Act.
For the years ended December 31, 20242025 and 2023,2024, net investment income was $66.9 million or $1.81 per share and $89.0 million or $2.40 per share and $82.5 million or $2.30 per share, respectively. The increasedecrease in the per share net investment income was due to higherlower investment income earned year to date.earned.
Capital Share Activity
In connection with the FCRD Acquisition, we issued 6,174,187 shares as part of the consideration paid for net assets acquired.
On March 28, 2016, Crescent Capital BDC Funding, LLC (“CCAP SPV”), a wholly owned subsidiary of CCAP, entered into a loan and security agreement, as amended from time to time (the “SPV Asset Facility”), with us as the collateral manager, seller and equity holder, CCAP SPV as the borrower, the banks and other financial institutions from time to time party thereto as lenders, and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, collateral agent, and lender. We consolidate CCAP SPV in our consolidated financial statements and no gain or loss is recognized from the transfer of assets to and from CCAP SPV. On May 31, 2024, CCAP SPV entered into the Seventh Amendment to Loan and Security Agreement. The amendment, among other things, (a) extended the last day of the reinvestment period to May 31, 2027, and the stated maturity date to May 31, 2029 and (b) reduced the spread from 2.75% to 2.45%.
On May 31, 2024, CCAP SPV entered into the Seventh Amendment to Loan and Security Agreement. The amendment, among other things, (a) extended the last day of the reinvestment period to May 31, 2027, and the stated maturity date to May 31, 2029 and (b) reduced the spread from 2.75% to 2.45%.
On April 10, 2025, CCAP SPV entered into the Eighth Amendment to Loan and Security Agreement. The amendment, among other things, (a) reduced the spread from 2.45% to 1.95%, and (b) reduced the facility size from $500.0 million to $400.0 million.
Series 2020A Unsecured Notes
On July 30, 2020, we completed a private offering of $50.0 million aggregate principal amount of 5.95% senior unsecured notes due July 30, 2023 (the “Series 2020A Unsecured Notes”). The Series 2020A Unsecured Notes were issued in two $25.0 million issuances on July 30, 2020 and October 28, 2020. On July 28, 2023, Series 2020A Unsecured Notes were repaid upon the issuance of the Series 2023A Unsecured Notes, as defined below.
Series 2021A Unsecured Notes
Series 2023A Unsecured Notes
On February 18, 2025, we issued $115.0 million aggregate principal amount of two tranches of senior unsecured notes: (a)$35.0 million 6.77% notes due February 18, 2028 ("Series 2024A Unsecured Notes - 2028") and (b) $80.0 million 6.90% notes due February 18, 2030 ("Series 2024A Unsecured Notes – 2030") . Interest on both unsecured notes will be payable semiannually, on the18th day of February and August in each year, commencing with August 18, 2025. Both tranches may be redeemed in whole or in part, at the Company’s option, at any time or from time to time at par plus a “make-whole” premium, if applicable.
On December 20, 2024, we entered into the Third Supplement dated as of December 20, 2024 (the “Third Supplement”) by and among us and the qualified institutional investors named therein to the Note Purchase Agreement dated July 30, 2020 by and among us and the purchasers party thereto. The Third Supplement governed the issuance of a private offering to qualified institutional investors of up to (a) $35.0 million in aggregate principal amount of senior unsecured notes due February 18, 2028 (the “Series 2024A Unsecured Notes - 2028”) and (b) $80.0 million in aggregate principal amount of senior unsecured notes due February 18, 2030 (the “Series 2024A Unsecured Notes - 2030” and, together with the 2028 Notes, the “Series 2024A Notes”). The Series 2024A Unsecured Notes - 2028 have a fixed interest rate of 6.77% and will be due on February 18, 2028 unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. The Series 2024A Unsecured Notes - 2030 have a fixed interest rate of 6.90% and will be due on February 18, 2030 unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on both unsecured notes will be payable semiannually, on the 18th day of February and August in each year, commencing with August 18, 2025. The interest rates are subject to an increase of up to 1.00% upon the occurrence of certain trigger events set forth in the purchase agreement governing the issuance and sale of the Series 2024A Notes. The issuance of the Series 2024A Notes occurred on February 18, 2025.
The summary of costs incurred in connection with theour SPVcredit Asset Facility, SMBC Corporate Revolving Facility, Series 2020A Unsecured Notes, Series 2021A Unsecured Notes, Series 2023A Unsecured Notesfacilities and FCRXunsecured Unsecured Notesdebt is presented below:
On February 12, 2025,2026, our Board of Directors declared thea followingregular first quarter cash dividends:dividend of $0.42 per share, which will be paid on April 15, 2026 to stockholders of record as of March 31, 2026.
On February 13, 2026, we issued (a) $67.5 million 5.87% senior unsecured notes due February 13, 2029 (the “Tranche A Notes”), (b) $67.5 million 6.20% senior unsecured notes due February 13, 2031 (the “Tranche B Notes”). Interest on the notes will be payable semiannually, on the 13th day of February and August in each year, commencing with August 13, 2026. Both tranches may be redeemed in whole or in part, at the Company’s option, at any time or from time to time at par plus a “make-whole” premium, if applicable. Subsequently, on February 17, 2026, we used the proceeds from these issuances to repay Series 2021A Unsecured Notes at maturity.
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which could materially affect our business, financial condition and/or operating results. These risks are not the only risk factors facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Series 2025A Unsecured Notes - 2029.2”
Removed heading “Interest and other debt financing costs”
Largest changes
“Interest income, which includes amortization of upfront fees, decreased from $80.0 million for the six months ended June 30, 2025, to $69.2 million for the six months ended June 30, 2026, primarily due to a decline in benchmark rates and restructurings of certain debt investments. Included in interest from investments for the six months ended June 30, 2026 and 2025 are $0.8 million and $1.6 million of accelerated accretion of OID related to paydown activity, respectively.”see in full comparison
“On May 7, 2026, the Company's Board of Directors approved, and the Company entered into, an amended and restated investment management agreement (the "Amended and Restated IMA") with the Company's investment adviser. …”see in full comparison
“On March 9, 2023, in connection with the FCRD Acquisitions, we assumed $111.6 million of unsecured notes ("FCRX Unsecured Notes"). The FCRX Unsecured Notes mature on May 25, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option at a redemption price of 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to but not including the date fixed for redemption. …”see in full comparison
“On May 21, 2026, CCAP SPV entered into the Ninth Amendment to Loan and Security Agreement. The amendment, among other things, (a) increased the spread from 1.95% to 2.00%, (b) increased the facility size from $400.0 million to $500.0 million, (c) extended the last day of the reinvestment period to May 21, 2029, and the stated maturity date to May 21, 2031, and (d) reduced the non-usage fee from 0.50% to 0.35%.”see in full comparison
Full comparison: every changed paragraph (33)
We are managed by Crescent Cap Advisors, LLC (the “Adviser”), an investment adviser that is registered with the SEC under the 1940 Act. CCAP Administration, LLC (the “Administrator”), provides the administrative services necessary for us to operate. Our management consists of investment and administrative professionals from the Adviser and Administrator along with our Board. The Adviser directs and executes our investment operations and capital raising activities subject to oversight from the Board, which sets our broad policies. The Board has delegated investment management of our investment assets to the Adviser. The Board consists of sixseven directors, five of whom are independent.
As of MarchJune 31,30, 2026, we had investments in thirteen portfolio companies on non-accrual status, which represented 5.7%4.8% and 3.6%2.5% of the total debt investments at cost and fair value, respectively. As of December 31, 2025, we had investments in eleven portfolio companies on non-accrual status, which represented 4.1% and 2.0% of the total debt investments at cost and fair value, respectively. The remaining debt investments were performing and current on their interest payments as of MarchJune 31,30, 2026 and December 31, 2025.
Interest income, which includes amortization of upfront fees, decreased from $39.7$40.2 million for the three months ended MarchJune 31,30, 2025, to $34.5$34.7 million for the three months ended MarchJune 31,30, 2026, primarily due to a decline in benchmark rates and restructurings of certain debt investments. Included in interest from investments for the three months ended MarchJune 31,30, 2026 and 2025 are $0.6$0.2 million and $0.8 million of accelerated accretion of OID related to paydown activity, respectively.
Dividend income increaseddecreased from $1.5$1.8 million for the three months ended MarchJune 31,30, 2025 to $3.0$1.2 million for the three months ended MarchJune 31,30, 2026 due to higherlower dividend income from our investment in First Eagle Logan JV, LLC. For the three months ended MarchJune 31,30, 2026 and 2025, we recorded $0.4 million and $0.9$1.0 million of other income related to one-time arranger fees, respectively.
Interest income, which includes amortization of upfront fees, decreased from $80.0 million for the six months ended June 30, 2025, to $69.2 million for the six months ended June 30, 2026, primarily due to a decline in benchmark rates and restructurings of certain debt investments. Included in interest from investments for the six months ended June 30, 2026 and 2025 are $0.8 million and $1.6 million of accelerated accretion of OID related to paydown activity, respectively.
Dividend income increased from $3.2 million for the six months ended June 30, 2025 to $4.2 million for the six months ended June 30, 2026 due to higher dividend income from our investment in First Eagle Logan JV, LLC and other portfolio companies. For the six months ended June 30, 2026 and 2025, we recorded $0.8 million and $1.9 million of other income related to one-time arranger fees, respectively.
Interest and other debt financing costs
Interest and other debt financing costs include interest, amortization of deferred financing costs including upfront commitment fees and unused fees on our credit facilities. For the three months ended MarchJune 31,30, 2026 and 2025 interest and other debt financing costs were $13.7$14.9 million and $14.6$15.1 million, respectively. For the six months ended June 30, 2026 and 2025 interest and other debt financing costs were $28.6 million and $29.8 million, respectively. The decrease in interest and other debt financing costs was due to lower weighted average cost of debt related to a decline in benchmark rates.rates net of higher weighted average debt outstanding.
For the three months ended MarchJune 31,30, 2026 and 2025, we incurred management fees, net of waivers, of $4.9$4.0 and $5.0 million, respectively. For the six months ended June 30, 2026 and 2025 we incurred management fees of $8.9 and $10.1 million, respectively. The decrease in the management fees was due to lower fee rate which became effective April 1, 2026.
For the three months ended MarchJune 31,30, 2026 and 2025, we incurred income based incentive fees, net of waivers, of $1.6$2.3 million and $3.5$3.6 million, respectively. For the six months ended June 30, 2026 and 2025, we incurred income based incentive fees, net of waivers, of $3.9 million and $7.0 million, respectively. The decrease in net incentive fees was driven by the impact of the fee waiver applied to the income incentive fees for the three months ended March 31, 2026 and the subsequent decrease in the income incentive fee rate which became effective April 1, 2026.
For the three months ended MarchJune 31,30, 2026 and 2025, professional fees were $0.5$0.6 million and $0.7$0.9 million, respectively. For six months ended June 30, 2026 and 2025, professional fees were $1.1 million and $1.6 million, respectively.
For the three months ended MarchJune 31,30, 2026 and 2025, other general and administrative expenses were $0.9$0.7 million and $1.0$0.9 million, respectively. For the six months ended June 30, 2026 and 2025, other general and administrative expenses were $1.7 million and $1.9 million, respectively.
For the three months ended MarchJune 31,30, 2026 and 2025, we expensed income and excise taxes of $0.6$0.5 million and $0.5$0.4 million, respectively. For the six months ended June 30, 2026 and 2025, we expensed income and excise taxes of $1.1 million and $0.9 million, respectively.
For the three months ended MarchJune 31,30, 2026 and 2025, net investment income was $15.5$13.1 million or $0.42$0.36 per share and $16.6$16.9 million or $0.45$0.46 per share, respectively. For the six months ended June 30, 2026 and 2025, net investment income was $28.6 million or $0.78 per share and $33.5 million or $0.90 per share, respectively. The decrease in the per share net investment income was due to lower investment income earned.earned net of lower expenses.
During the threesix months ended MarchJune 31,30, 2026 and 2025, our average U.S. Dollar notional exposure, calculated daily on a weighted average based on the duration of each forward contract, to foreign currency forward contracts were $74.6$78.5 million and $64.8$71.8 million, respectively.
As of MarchJune 31,30, 2026, we had $26.6$35.7 million in cash and cash equivalents and restricted cash and cash equivalents and $206.2$199.6 million of undrawn capacity on the unfunded unsecured notes, our senior revolving credit and special purpose vehicle asset facilities, subject to borrowing base and other limitations. As of MarchJune 31,30, 2026, the undrawn capacity under our facilities and cash and cash equivalents were in excess of our unfunded commitments.
As of MarchJune 31,30, 2026, we were in compliance with our asset coverage requirements under the 1940 Act. In addition, we were in compliance with all the financial covenant requirements of our credit facilities as of MarchJune 31,30, 2026. However, an increase in realized losses or unrealized depreciation of our investment portfolio or significant reductions in our net asset value as a result of the effects of the rising rate environment and the potential for a recession increase the risk of breaching the relevant covenantscovenant requirements. Any breach of these requirements may adversely affect the access to sufficient debt and equity capital.
The combined weighted average interest rate of the aggregate borrowings outstanding for the threesix months ended MarchJune 31,30, 2026 and 2025 was 6.04%6.18% and 6.49%,6.63%, respectively. The combined weighted average debt of the aggregate borrowings outstanding for the threesix months ended MarchJune 31,30, 2026 and 2025 was $907.7$925.7 million and $902.4$900.6 million, respectively. As of MarchJune 31,30, 2026 and December 31, 2025, the weighted average cost of debt was 6.09%6.13% and 5.83%, respectively.
On May 21, 2026, CCAP SPV entered into the Ninth Amendment to Loan and Security Agreement. The amendment, among other things, (a) increased the spread from 1.95% to 2.00%, (b) increased the facility size from $400.0 million to $500.0 million, (c) extended the last day of the reinvestment period to May 21, 2029, and the stated maturity date to May 21, 2031, and (d) reduced the non-usage fee from 0.50% to 0.35%.
On October 27, 2021, we entered into a senior secured revolving credit agreement, as amended from time to time, with Sumitomo Mitsui Banking Corporation, as administrative agent, collateral agent and lender (the “SMBC Corporate Revolving Facility”).
On October 27, 2021, we entered into a senior secured revolving credit agreement, as amended from time to time, with Sumitomo Mitsui Banking Corporation, as administrative agent, collateral agent and lender (the “SMBC Corporate Revolving Facility”). On December 3, 2024, we amended the SMBC Corporate Revolving Facility. The amendment, among other things, (i) decreased the size of the aggregate revolving commitment from $350.0 million to $285.0 million, (ii) added an initial term commitment of $25.0 million for an aggregate facility size of $310.0 million, (iii) increased the interest rate by 0.125% so that borrowings under the revolving commitment will bear interest at the applicable benchmark rate plus 2.000% or 2.125%, subject to certain provisions, (iii) extended the facility termination to December 3, 2029 and (iv) extended the facility revolving commitment period termination to December 1, 2028.
On June 18, 2026, we increased the dollar commitments from $140.0 million to $165.0 million and increased the maximum principal amount of the SMBC Corporate Revolving Facility from $310.0 million to $335.0 million.
On March 9, 2023, in connection with the FCRD Acquisitions, we assumed $111.6 million of 5.00% unsecured notes ("FCRX Unsecured Notes"). On May 22, 2026, the Company repaid the FCRX Unsecured Notes in full.
On March 9, 2023, in connection with the FCRD Acquisitions, we assumed $111.6 million of unsecured notes ("FCRX Unsecured Notes"). The FCRX Unsecured Notes mature on May 25, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option at a redemption price of 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to but not including the date fixed for redemption. The FCRX Unsecured Notes bear interest at a rate of 5.00% per year payable quarterly on March 30, June 30, September 30 and December 30 of each year. The FCRX Unsecured Notes trade on the New York Stock Exchange under the trading symbol “FCRX”.
On May 9, 2023, we completed a private offering of $50.0 million aggregate principal amount of 7.54% senior unsecured notes due July 28, 2026 ("Series 2023A Unsecured Notes"). TheseOn notesJune were29, issued immediately after2026, the repaymentCompany ofexercised $50.0its millionoption ofto theprepay Series 2020A2023A Unsecured Notes onin July 28, 2023.full.
The Series 2023A Unsecured Notes will mature on July 28, 2026 and may be redeemed in whole or in part, at our option, at any time or from time to time at par plus a “make-whole” premium, if applicable. Interest on the Series 2023A Unsecured Notes is due and payable semiannually in arrears on January 28 and July 28 of each year.
Series 2025A Unsecured Notes - 2029.2
On May 22, 2026, we issued $50.0 million 5.97% notes due May 22, 2029 ("Series 2025A Unsecured Notes - 2029.2"). Interest is payable semiannually, on the 22nd day of May and November in each year, commencing with November 22, 2026. These notes may be redeemed in whole or in part, at the Company’s option, at any time or from time to time at par plus a “make-whole” premium, if applicable.
(1) For the three and six months ended MarchJune 31,30, 2026, includes $0.023$0.14 and $0.001$(0.05), millionand $0.14 and $(0.03) million, respectively, of the impact related to the interest rate swaps and hedged items Series 2025A Unsecured Notes - 20292029.1 and 2031, respectively. There were no interest rate swaps outstanding for the comparative period.
As of MarchJune 31,30, 2026 and December 31, 2025, our asset coverage ratio was 173%169% and 179%, respectively. We may also refinance or repay any of our indebtedness at any time based on our financial condition and market conditions. See Note 6. Debt to our consolidated financial statements for more detail on the debt facilities.
Our investment portfolio may contain investments that are in the form of lines of credit or unfunded commitments which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying agreements. Unfunded commitments to provide funds to portfolio companies are not reflected on our Consolidated Statements of Assets and Liabilities. These commitments are subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that we hold. Since these commitments may expire without being drawn, the total commitment amount does not necessarily represent future cash requirements. As of MarchJune 31,30, 2026 and December 31, 2025, we had aggregate unfunded commitments totaling $220.4$195.2 million and $211.9 million, respectively.
On MayAugust 7,6, 2026, ourthe Company's Board of Directors declared a regular secondthird quarter cash dividend of $0.34 per share, payable on JulyOctober 15, 2026 to stockholders of record as of JuneSeptember 30, 2026. The Board also declared three special dividends of $0.03 per share, payable on June 15, September 15, and December 15, 2026 to stockholders of record as of May 31, August 31, and November 30, 2026, respectively.
On May 7, 2026, the Company's Board of Directors approved, and the Company entered into, an amended and restated investment management agreement (the "Amended and Restated IMA") with the Company's investment adviser. The Amended and Restated IMA amends and restates the prior investment management agreement in its entirety to (i) reduce the incentive fee on income from 17.5% to 15.0% of ordinary income that exceeds the applicable hurdle rate and catch-up, (ii) adjust the catch-up amount such that the incentive fee equals 15.0% of ordinary income above the hurdle rate, (iii) reduce the incentive fee cap from 17.5% to 15.0%, (iv) reduce the incentive fee on capital gains from 17.5% to 15.0%, and (v) reduce the base management fee rate from 1.25% to 1.00%. Each of these changes is effective as of April 1, 2026.
CCAP insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 6 Form 4 filings (4 insiders, 5 trade dates, 100,000 shares, about $1.1M) and open-market sales in 6 filings (1 insider, 12 trade dates, 525,000 shares, about $5.5M; 6 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -425,000 (purchases minus sales); net value about -$4.4M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-09 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
139,054 | $10.23 | $1.4M |
| 2026-09-08 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
126,436 | $10.33 | $1.3M |
| 2026-09-04 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
10,471 | $10.39 | $108.8K |
| 2026-09-03 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
5,011 | $10.34 | $51.8K |
| 2026-09-02 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
45,000 | $10.44 | $469.8K |
| 2026-09-01 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
11,285 | $10.50 | $118.5K |
| 2026-08-31 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
40,000 | $10.62 | $424.8K |
| 2026-08-28 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
15,000 | $10.60 | $159.0K |
| 2026-08-27 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
27,195 | $10.60 | $288.3K |
| 2026-08-26 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
32,091 | $10.60 | $340.2K |
| 2026-08-25 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
40,000 | $10.74 | $429.6K |
| 2026-08-24 | Fidelity & Guaranty Life Insurance Co |
Open-market sale |
33,457 | $10.72 | $358.7K |
| 2026-08-19 | Chung Henry |
Open-market purchase | 2,500 | $10.89 | $27.2K |
| 2026-08-19 | Lombard Gerhard |
Open-market purchase | 2,000 | $10.91 | $21.8K |
| 2026-05-21 | Chung Henry |
Open-market purchase | 4,500 | $11.45 | $51.5K |
| 2026-05-20 | Breaux Jason |
Open-market purchase | 5,000 | $11.19 | $56.0K |
| 2026-05-19 | Strandberg Steven F. |
Open-market purchase | 85,000 | $11.28 | $958.8K |
| 2026-05-18 | Lombard Gerhard |
Open-market purchase | 1,000 | $11.12 | $11.1K |
Well-known investors holding CCAP (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 125,400 | $1.4M | 0.0% | Reduced 59% |
| D. E. Shaw & Co. | 2026-06-30 | 14,973 | $163.5K | 0.0% | Reduced 47% |
| Millennium Management (Israel Englander) | 2026-06-30 | 11,044 | $134.2K | — | Sold out |