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

The 1940 Act and the Code impose numerous constraints on the operations of BDCs and RICs that do not apply to certain other investment vehicles managed by our Advisor and its affiliates. BDCs are required, for example, to invest at least 70% of their total assets primarilybe in“qualifying assets”. Qualifying assets generally include securities of U.S.“eligible privateportfolio or thinly traded public companies,” cash, cash equivalents, U.S. government securities and other high-quality debt instruments that maturematuring in one year or less from the datetime of investment. Under the 1940 Act and the rules thereunder, “eligible portfolio companies” include (1) private domestic operating companies, (2) public domestic operating companies whose securities are not listed on a national securities exchange (e.g., the New York Stock Exchange) or registered under the Exchange Act, and (3) public domestic operating companies having a market capitalization of less than $250 million. The Fund may also invest up to 30% of its portfolio in non-qualifying assets. Moreover, qualification for taxation as a RIC requires satisfaction of source-of-income, asset diversification and distribution requirements. We may offer, and provide upon request, significant managerial assistance to eligible portfolio companies. Offering and providing upon request significant managerial assistance means, among other things, any arrangement whereby we, through our trustees, officers or employees, offer to provide and, if accepted, do so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of an issuer through monitoring of issuer operations, selective participation in board and management meetings, consulting with and advising an issuer’s or other organizational or financial guidance. Our Advisor has a limited operating history under these constraints,conditions, which may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective.

DowngradesFurther downgrades of the U.S. credit rating, impending impending automatic spending cuts or government shutdowns could negatively impact our liquidity, financial condition and earnings.

The U.S. debt ceiling and budget deficit concerns have increased the possibility of additional credit-rating downgrades and economic slowdowns or a recession in the United States. Although U.S. lawmakers passed legislation to raise the federal debt ceiling on multiple occasions, including, most recently, in JuneJuly 2023,2025, ratings agencies have lowered,lowered andor threatened to lower the long-term sovereign credit rating on the United States. The legislation suspends the debt ceiling through early 2025 unless Congress takes legislative action to further extend or defer it.

The impact of the increased debt ceiling and/or downgrades downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness as well as potential government shutdowns and uncertainty surrounding transfers of power could adversely affect the U.S. and global financial markets and economic conditions. Absent further quantitative easing by the U.S. Federal Reserve, these developments could cause interest rates and borrowing costs to rise, which may negatively impact our ability to access the debt markets on favorable terms. In addition, disagreement over the federal budget has caused the U.S. federal government to shut down for periods of time. Continued adverse political and economic conditions could have a material adverse effect on our business, financial condition and results of operations.

We do not have any internal management capacity or or employees. We depend upon Kayne Anderson’s key personnel for our future success and upon their access to certain individuals and and investment opportunities to execute on our investment objective. In particular, we depend on the diligence, skill and network of business contacts of our portfolio managers, who evaluate, negotiate, structure, close and monitor our investments. These individuals manage a number of investment vehicles on behalf of Kayne Anderson and, as a result, do not devote all of their time to managing us, which could negatively impact our performance. Conflicts of interest are expected to arise in allocating management time, services or functions. The ability to access professionals and resources within Kayne Anderson for our benefit is expected to be limited at times. Furthermore, these individuals do not have long-term employment contracts with Kayne Anderson, although they do have equity interests and other financial incentives to remain with Kayne Anderson. We also depend on the senior management of Kayne Anderson. The departure of any of our portfolio managers or the senior management of Kayne Anderson could have a material adverse effect on our ability to achieve our investment objective. In addition, we can offer no assurance that our Advisor will remain our investment advisor or that we will continue to have access to Kayne Anderson’s industry contacts and deal flow. Furthermore, if the Advisor fails to maintain such relationships, or to develop new relationships with other sources of investment opportunities, we will not be able to grow our investment portfolio. This could have a material adverse effect on our financial condition, results of operations and cash flows.

The part of the management and incentive fees payable to Advisor that relates to our net investment income is computed and paid on income that may include interest income that has been accrued but not yet received in cash, such as market discount, debt instruments with paid-in-kind (“PIK”) interest, preferred stock with PIK dividends, zero coupon securities, and other deferred interest instruments and may create an incentive for the Advisor to make investments investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangements. This fee structure may be considered to give rise to a conflict of interest for the Advisor to the extent that it may encourage the Advisor to favor debt financings that provide for deferred interest, rather than current cash payments of interest. Under these investments, we will accrue the interest over the life of the investment, but we will not receive the cash income from the investment until the end of the term. Our net investment income used to calculate the income portion of our investment fee, however, includes accrued interest. The Advisor may have an incentive to invest in deferred interest securities in circumstances where it would not have done so but for the opportunity to to continue to earn the fees even when the issuers of the deferred interest securities would not be able to make actual cash payments to to us on such securities. This risk could be increased because the Advisor is not obligated to reimburse us for any fees received even if if we subsequently incur losses or never receive in cash the deferred income that was previously accrued.

Beginning in 2024, competition for the types of investments we make has driven interest rate spreads lower on our investments and has increased pressure from portfolio companies to pay interest in-kind instead of in cash. With respect to the investments we make, we do not seek to compete based primarily on the interest rates we offer, and we believe that some of our competitors may make loans with interest rates that will be lower than the rates we offer. With respect to all investments, we may lose some investment opportunities if we do not match our competitors’ pricing, terms and structure. However, if we match our competitors’ pricing, terms and structure, we may experience decreased net interest income, lower yields and increased risk of credit loss. Although our Advisor allocates opportunities in accordance with its allocation policy, allocations to other accounts managed or sponsored by our Advisor or its affiliates reduce the amount and frequency of opportunities available to us and may not be in the best interests of us and our stockholders.

We intend to further borrow under credit facilities and/or issue senior unsecured notes and, may issue preferred stock in the future (although we do not anticipate issuing preferred stock in the next 12 months), which we refer to collectively as “senior securities,” up to the maximum amount permitted by the 1940 Act. Under the provisions of the 1940 Act, we are currently permitted to issue “senior securities,” including borrowing money from banks or other financial institutions, only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. As defined in the 1940 Act, a 150% asset coverage means that for every $100 of net assets we hold, we can raise $200 from borrowing and issuing senior securities. If we fail to comply with certain disclosure requirements, our asset coverage ratio under the 1940 Act would be 200%, which would decrease the amount of leverage we are able to incur.

Our 8.65% Series A Notes due June 2027 (the “Series A Notes”) and 8.74% Series B Notes due June 2028 (the “Series B Notes”, and collectively with the Series A Notes, the “Notes”) were issued under a note purchase agreement, dated June 29, 2023. 2023In addition, our floating rate Series C Notes due June 2028 (the “Series C Notes”), 5.80% Series D Notes due June 2028 (the “Series D Notes”) and 6.15% Series E Notes due October 2030 (the “Series E Notes”) were issued under a note purchase agreement, dated September 9, 2025. Collectively, all of these “Notes” were used under two separate note purchase agreements (each a “Note Purchase Agreement” or, collectively, the “Note Purchase Agreements”). The Note Purchase Agreements Agreement containscontain certain representations and warranties, and various covenants and reporting requirements customary for agreements of this type, including, without limitation, information reporting, maintenance of our status as a BDC within the meaning of the 1940 Act, and certain restrictions with respect to transactions with affiliates, fundamental changes, changes of line of business and permitted liens. In addition, the Note Purchase AgreementAgreements containscontain the following financial covenants, which are measured as of each fiscal quarter-end: (a) maintaining a minimum shareholders’ equity and (b) maintaining a minimum asset coverage ratio.

Our continued compliance with the covenants contained under the Credit Facilities and the Note Purchase AgreementAgreements depends on many factors, some of which are beyond our control, and there can can be no assurances that we will continue to comply with such covenants. Our failure to satisfy the respective covenants could result in in foreclosure by the lenders under the applicable credit facility or governing instrument or acceleration by the applicable lenders or noteholders, noteholders, which would accelerate our repayment obligations under the relevant agreement and thereby have a material adverse effect on our business, liquidity, financial condition, results of operations and ability to pay distributions to our stockholders. Because the Credit Facilities and the Note Purchase AgreementAgreements have, and any future credit facilities and documents governing the issuance of senior unsecured notes will likely have, customary cross-default provisions, if the indebtedness under the Credit Facilities or represented by the Series A Notes or thethrough Series BE Notes or under any future credit facility or senior unsecured note, is accelerated, we may be unable to repay or finance the amounts due.

OurOn May 1, 2025, the Board has authorized us to repurchase shares of our common stock through an open-market share repurchase program for up to $100 million in the aggregate of shares of our common stock within one yearDirectors of the Company closingauthorized ofan the IPO. Pursuantamendment to such authorization and concurrently with the closing of the IPO, we entered into the Company 10b5-1 Plan to acquireextend the expiration to May 24, 2026. Under the amended and restated plan (effective May 25, 2025), the Company may repurchase up to $100 million in the aggregate of shares of our Common Stock, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Exchange Act, and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances. These activities may have the effect of maintaining the market price of shares our Common Stock or retarding a decline in the market price of the shares of our Common Stock, and, as a result, the price of our shares of Common Stock may be higher than the price that otherwise might exist in the open market.

In an effort to control inflation, the U.S. Federal Reserve Board (the “Fed”) has sharply raised interest rates in recent years, and they remain near their highest levels in over twenty years. Other central banks globally have implemented similar rate increases. A wide variety of factors can cause interest rates to rise (e.g., central bank monetary policies, inflation rates, or general economic conditions). Although recently both the Fed and other central banks globally have begun lowering rates, there is no certainty that further reductions will occur. There is no assurance that the actions being taken by the Fed will improve the outlook for long-term inflation or whether they might result in a recession. A recession could lead to declined employment, global demand destruction and/or business failures, which may result in a decline in the value of our portfolio. In addition, increased interest rates could increase our cost of borrowing and reduce the return on leverage to common stockholders.

The loans in our investment portfolio may be prepaid at any time, generally with little advance notice. Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions that allow such company the ability to replace existing financing with less expensive capital. Prepayment rates are influenced by changes in interest rates and a variety of economic, geographic and other factors beyond our control. Therefore, the frequency at which prepayments (including voluntary prepayments by borrowers and liquidations due to defaults and insolvency) occur in respect of our investments can adversely impact us and prepayment rates cannot be predicted with certainty, making it impossible to insulate us from prepayment or other such risks. As market conditions change, we do not know when, and if, prepayment may be possible for each portfolio company. Early prepayments give rise to increased reinvestment risk, company.including, for example, that when the prevailing level of interest rates falls, we could be unable to reinvest cash in a new investment with an expected rate of return at least equal to that of the investment prepaid. In some cases, the prepayment of a loan may reduce our achievable yield if the capital returned cannot be invested in transactions with equal or greater expected yields, which could have a material adverse effect on our business, financial condition and results of operations.

Prior to the IPO, there was no public market for our shares of common stock, and weWe cannot assure you that a market for our shares of common stock will develop or continue, or that the market price of our shares of common stock will not decline at some point following the IPO.decline. Our share of common stock stock price may be volatile and may fluctuate substantially.

Our shares of common stock are listed on the New York Stock Exchange under the symbol “KBDC.” We cannot assure you that a trading market will develop for our shares of common stock or, if one develops, that the trading market can be sustained. In addition, we cannot predict the prices at which our shares of common stock will trade. Shares of companies offered in an initial public offering often trade at a discount to the initial offering price due to underwriting discounts and commissions and related offering expenses. Also, shares of closed-end investment companies, including BDCs, frequently trade at a discount from their net asset value and our shares may also be discounted in the market. This characteristic of closed-end investment companies is separate and distinct from the risk that our net asset value per share may decline. We cannot predict whether our shares of common stock will trade at, above or below net asset value. The risk of loss associated with this characteristic of closed-end management investment companies may be greater for investors expecting to sell shares of common stock purchased in this offering soon after the IPO. In addition, if our shares of common stock trade below its net asset value per share, we will generally not be able to sell additional shares of common stock to the public at its market price without first obtaining the approval of a majority of our stockholders (including a majority of our unaffiliated stockholders) and our independent directors for such issuance.

Following the IPO and the expiration of applicable lock-up periods, subject to applicable securities laws, salesSales of substantial amounts of our shares of common stock, or the perception that such sales could occur, could adversely affect the prevailing market prices for our shares of common stock. If this occurs, it could impair our ability to raise additional capital through the sale of equity securities should we desire to do so. We cannot predict what effect, if any, future sales of securities, or the availability of securities for future sales, will have on the market price of our shares of common stock prevailing from time to time.

We cannot assure you that a public trading market can be sustained. Shares of companies offered in an initial public offering often trade at a discount to the initial offering price due to underwriting discounts and related offering expenses. Also, shares of closed-end investment companies and BDCs frequently trade at a discount from their NAV. This characteristic of closed-end investment companies is separate and distinct from the risk that our NAV per share may decline. We cannot predict whether our shares of common stock will trade at, above or below NAV.

We may be subject to risks that arise from newly enacted federal tax legislation and ourOur stockholders may receive our shares of Common Stock as dividends, which could result in adverse tax consequences to them.

For example, ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Iran, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. In addition, the current political climate has intensified concerns about trade tariffs and a potential trade war between the United States and certain foreign countries, including China, Mexico and Canada, among others. These consequences may trigger a significant reduction in international trade, shortages or oversupply of certain manufactured goods, substantial price increases or decreases of goods, inflationary pressures, and possible failure of individual companies and/or large segments of the foreign export industry with a potentially negative impact on the value of our investments.

Kayne Anderson BDC, Inc. is a Delaware corporation that commenced operations on February 5, 2021. Following our initial public offering (“IPO”), our common stock began trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “KBDC” on May 22, 2024. We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act, as amended. In addition, for U.S. federal income tax purposes, we intend to qualify, annually, as a RIC under Subchapter M of the Code.

We intend to achieve our investment objective by investing primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. Under normal market conditions, we expect at least 90% of our portfolio (including investments purchased with proceeds from borrowings under credit facilities and issuances of senior unsecured notes) to be invested in first lien senior secured, unitranche and split-lien loans. Our investment decisions are made on a case-by-case basis. We expect the remainder of our portfolio to be invested in second-lien loans, subordinated debt or equity securities (including those purchased in conjunction with other credit investments). We expect that a majority of these debt investments will be made in core middle market companies and will generally have stated maturities of three to six years. We expect that the loans in which we principally invest will be to companies that are located in the United States. We determine the location of a company as being in the United States by (i) such company being organized under the laws of one of the states in the United States; or (ii) during its most recent fiscal year, such company derived at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed in the United States or has at least 50% of its assets in the United States.

On January 15,16, 2025,2026, we paid a regular dividend of $0.40 per share to each common stockholder of record as of December 31, 2024.2025. The total dividend was $28.4$27.2 million and, of this amount, $3.9$0.2 million was DRIP.DRIP which was fulfilled through open market purchases of common stock.

As of December 31, 2024,2025, we had investments in 110107 portfolio companies with an aggregate fair value of approximately $1,995$2,198 million, and unfunded commitments to these portfolio companies of $186$287 million, and our portfolio consisted of 98.0%93.2% first lien senior secured loans, 0.9%4.9% subordinated debt and 1.1%1.9% equity investments. As of December 31, 2025, the weighted average remaining term of our debt investments was 3.1 years based on principal amount.

As of December 31, 2024,2025, we held investments in in broadly syndicated loans in 215 portfolio companies with an aggregate principal amount of $253$47 million. Our investments in broadly syndicated syndicated loans were made in anticipation of the receipt of proceeds from our final capital call and our IPO which closed during the second quarter of 2024. Prior to these investments, we had not held broadly syndicated loans since 2022. Consistent with our strategy at that time, weWe expect to rotate out of these investments over coming quarters to invest in private middle market loans consistent with our our principal strategy. We have presented certain portfolio-related information below for our private middle market loans and broadly syndicated syndicated loans separately and on a combined basis for ease of reference.

As of December 31, 2024,2025, our portfolio was invested across 3026 different industries (Global Industry Classification “GICS”, Level 3 – Industry). The largest industries in our portfolio as of December 31, 20242025 were Trading Companies & Distributors, Commercial Services & Supplies, Food Products and Health Care Providers & Services,Services and Food Products, which represented, as a percentage of our portfolio of long-term investments, 15.1%,11.9%, 11.7%,11.9%, 10.0%10.8% and 8.4%,10.5%, respectively, based on fair value. We are generalist investors and the mix of industries represented by our portfolio companies will vary over time.

As of December 31, 2024,2025, we had threefive debt investments on non-accrual status, which represented 1.3%1.4% and 1.6%2.6% of total debt investments at fair value and cost, respectively.

Investment income for the years ended December 31, 20242025 and 20232024 totaled $213.1$235.8 million and $161.0$213.1 million, respectively, and consisted primarily of interest income on our debt investments. For the years ended December 31, 20242025 and 2023,2024, we had $2.7$9.1 million and $1.7$2.7 million, respectively, of PIK interest included in interest income. As of December 31, 2024,2025, we had threefive debt investments on non-accrual status. As of December 31, 2023,2024, we had onethree debt investment on non-accrual status.

For thesethe years ended December 31, 20242025 and 2023, 2024, the top five largest contributors to the change in unrealized gains and change in unrealized losses on investments are presented in the following tables.

We finance our investments with leverage in the form of borrowings under credit facilities and issuances of senior unsecured notes. We also intend to further borrow under credit facilities and/or issue senior unsecured notes in the future in order to finance our investments. In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. As defined in the 1940 Act, a 150% asset coverage means that for every $100 of net assets we hold, we can raise $200 from borrowing and issuing senior securities. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. As of December 31, 20242025 and December 31, 2023,2024, our asset coverage ratios were 238%198% and 198%,238%, respectively. We currently intend to target asset coverage of 200% to 180% (which equates to a debt-to-equity ratio of 1.0x to 1.25x) but may alter this target based on market conditions.

As of December 31, 2024,2025, we had $75$275 million Notes outstanding, $783 $855 million borrowed under our credit facilities and cash and cash equivalents of $71.1$43.4 million (including short-terminvestments in money market funds, but excluding deposits for investments). As of that date, we had $442$545 million of undrawn commitments available on our credit facilities (subject to borrowing base restrictions and other conditions). As of February 21,20, 2025,2026, we had $75$275 million Notes outstanding, $882.5 $851.5 million borrowed under our credit facilities and cash and cash equivalents of $12.3$13.3 million (including short-terminvestments investmentsin money market funds).

As of December 31, 2024,2025, we have $75$275 million of of senior unsecured notes outstanding, with $25 million of 8.65% Series A Notes due June 2027 (the “Series A Notes”) and, $50 million of 8.74% Series B Notes due June 2028 (the “Series B Notes”, and$40 collectivelymillion of floating rate Series C Notes with an interest rate of SOFR plus 2.32% per annum due June 2028 (the “Series C Notes”), $60 million of 5.80% Series AD Notes,Notes due June 2028 (the “Series D Notes”) and $100 million of 6.15% Series E Notes due October 2030 (the “Series E Notes”). We refer to all of these series of senior unsecured notes as, collectively, the “Notes”).

Corporate Credit Facility: We are party to a senior secured revolving credit facility (the “Corporate Credit Facility”), that has a total commitment of $400$475 millionmillion. with a maturity date of November 22, 2029. The facility’s commitment termination date and the final maturity date are November 22, 2028 and November 22, 2029, respectively. The Corporate Credit Facility also providedprovides for a feature that allows us, under certain circumstances, to increase the overall size of the Corporate Credit Facility to a maximum of $600 million. The interest rate on the Corporate Credit Facility is equal to Term SOFR (a forward-looking rate based on SOFR futures) plus an applicable spread of 2.10% per annum or an “alternate base rate” (as defined in the agreements governing the Corporate Credit Facility) plus an applicable spread of 1.00%. We are also required to pay a commitment fee of 0.375% per annum on any unused portion of the Corporate Credit Facility.

Revolving Funding Facility: We and our wholly owned, special purpose financing subsidiary, Kayne Anderson BDC Financing, LLC (“KABDCF”), are party to a senior secured revolving funding facility (the “Revolving Funding Facility”). We and KABDCF have a commitment of $675 million. The Revolving Funding Facility is secured by all of the assets held by,by KABDCF, and we have agreed that it will not grant or allow a lien on the membership interest in,of KABDCF. The end of the reinvestment period is April 2,February 202720, 2029, and the maturity date is February 13,20, 2030.2031. The interest rate on the Revolving Funding Facility is daily SOFR plus 2.15% 1.95% per annum. KABDCF is also required to pay a commitment fee of between 0.50% and 1.50% per annum depending on the size of the unused portion of the Revolving Funding Facility.

Revolving Funding Facility II: We and our wholly owned, special purpose financing subsidiary, Kayne Anderson BDC Financing II, LLC (“KABDCF II”), are party to a senior secured revolving credit facility (the “Revolving Funding Facility II”). The Revolving Funding Facility II has an initial commitment of $250 million which, under certain circumstances, can be increased up to $500 million. The Revolving Funding Facility II is secured by all of the assets held by KABDCF IIII, and we have agreed that it will not grant or allow a lien on the membership interest of KABDCF II. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility II are December 22, 2026,2027, and December 22, 2029, respectively. The interest rate on the Revolving Funding Facility II is equal to 3-month term SOFR plus 2.25% per annum. KABDCF II is also required to pay a commitment fee of 0.75%.0.55%.

As of December 31, 20242025 and 2023,December 31, 2024, we had an aggregate $186.3 $287.5 million and $147.9$186.3 million, respectively, of unfunded commitments, including $171.1 million and $126.7 million, respectively, of unfunded commitments on revolvers, to provide debt financing to our portfolio companies. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in our financial statements. Other than contractual commitments and other legal contingencies incurred incurred in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.

Investment Advisory Agreement. On February 5, 2021, we entered into thean Investment Advisory Agreement with our Advisor. In addition, onOn March 6, 2024, the Board approved an amended and restated investment advisory agreement (the “Amended Investment Advisory Agreement”) and a fee waiver agreement (the “Fee Waiver Agreement”) between the Company and the Advisor, which became effective upon the completion of the initial public offering of shares of common stock on May 24, 2024 (the “IPO Date”). On February 19,12, 2025,2026, the Board approved an additional one-year term of the Amended Investment Advisory Agreement fromthrough March 15, 2025 to March 15, 2026.2027.

For services rendered under the Amended Investment Advisory Agreement, we pay a base management fee quarterly in arrears to our Advisor based on the of the fair market value of our investments including, in each case, assets purchased with borrowingsborrowed underfunds ouror creditother facilities and issuancesforms of senior unsecured notes,leverage, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase. We also pay an incentive fee on income and an incentive fee on capital gains to our Advisor.

TheUnder the Amended Investment Advisory Agreement is materiallyAgreement, the same as the Investment Advisory Agreement except, following the IPO Date, the base management fee is calculated at an annual rate of 1.00% and the incentive fee on income is subject to a twelve-quarter lookback quarterly hurdle rate of 1.50% as opposed to a single quarter measurement and is subject to an Incentive Fee Cap based on our Cumulative Pre-Incentive Fee Net Return. This lookback feature provides that the Advisor’s income incentive fee may be reduced if our portfolio experiences aggregate write-downs or net capital losses during the applicable Trailing Twelve Quarters. Pursuant to the Fee Waiver Agreement, commencing on the IPO Date, the Advisor implemented waivers of (i) the income incentive fee for three calendar quarters commencing the quarter the initial public offering was completed and (ii) a portion of the base management fee for one year following the completion of the initial public offering. Amounts waived by the Advisor pursuant to the Fee Waiver Agreement are not subject to recoupment by the Advisor.

Administration Agreement. On February 5, 5, 2021, we entered into the Administration Agreement with our Advisor, which serves as our Administrator and provides or oversees the performance performance of its required administrative services and professional services rendered by others, which include (but are not limited to), accounting, payment of our expenses, legal, compliance, operations, technology and investor relations, preparation and filing of its our tax returns, and preparation of financial reports provided to its stockholders and filed with the SEC. On February 19,12, 2025,2026, the Board approved an additional one-year term of the Administration Agreement through March 15, 2026.2027.

We reimburse the Administrator for its costs and expenses incurred in performing its obligations under the Administration Agreement, which may include its allocable portion of office facilities, overhead, and compensation paid to or compensatory distributions received by its officers (including our Chief Compliance Officer and Chief Financial Officer) and its respective staff who provide services to the Company. As the Company reimburses the Administrator for its expenses, such costs (including the costs of sub-administrators) will beare ultimately borne by common stockholders. The Administrator does not receive compensation from us other than reimbursement of its expenses. The Administration Agreement may be terminated by either party with 60 days’ written notice.

Non-Controlled, Affiliated Investment. We hold Trademark Global LLC and TG Parent Newco LLC (Trademark Global LLC) and SGCP Partners, Inc. (SG Credit), bothwhich are non-controlled, affiliated investments, as defined in the 1940 Act. See “Item 1. – Notes to Consolidated Financial Statements – Note 3. Agreements and Related Party Transactions” for further details.

Our investment activities are managed by KA Credit Advisors, LLC (the “Advisor”), an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P. (“Kayne Anderson”), and the Advisor operates within Kayne Anderson’s middle market private credit platform (“KAPC” or “Kayne Anderson Private Credit”). The Advisor is an investment advisor registered with the United States Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended.amended (the "Advisers Act"). In accordance with the Investment Advisers Act of 1940, as amended,Act, our Advisor is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring investments, and monitoring our investments and portfolio companies on an ongoing basis. The Advisor benefits from the scale and resources of Kayne Anderson and specifically KAPC.

The Advisor executes on our investment objective by (1) accessing the established loan sourcing channels developed by KAPC, which includes an extensive network of private equity firms, other middle market lenders, financial advisors, intermediaries and management teams, (2) selecting investments within our middle market company focus, (3) implementing KAPC’s underwriting process and (4) drawing upon its experience and resources and the broader Kayne Anderson network. KAPC was established in 2011 and manages (directly and through affiliates) assets under management (“AUM”) of approximately $7.3$7.6 billion related to middle market private credit as of MarchJune 31,30, 2026.

On AprilJuly 16, 2026, we paid a regular dividend of $0.40 per share to each common stockholder of record as of MarchJune 31,30, 2026. The total dividend was $26.6$26.5 million, and, of this amount, $0.4$0.6 million was DRIP which was fulfilled through open market purchases of common stock.

On MayAugust 5, 2026, our Board of Directors declared a regular dividend to common stockholders in the amount of $0.40 per share. The regular dividend of $0.40 per share will be paid on JulyOctober 16, 2026 to stockholders of record as of the close of business on JuneSeptember 30, 2026, payable in cash or shares of our common stock pursuant to our Dividend Reinvestment Plan, as amended.

From AprilJuly 1, 2026 to MayAugust 5, 2026, our agent repurchased 131,921178,752 shares of common stock at an average price of $14.29$13.67 per share for a total amount of $1.9$2.4 million. As of MayAugust 5, 2026, $36.7$95.8 million remains for repurchase under our current 10b5-1 Plan.

As of MarchJune 31,30, 2026, we had investments in 105104 portfolio companies with an aggregate fair value of approximately $2,194$2,267 million, and unfunded commitments to these portfolio companies of $289$293 million, and our portfolio consisted of 92.6%92.8% first lien senior secured loans, 5.5%5.3% subordinated debt and 1.9% equity investments. As of MarchJune 31,30, 2026, the weighted average remaining term of our debt investments was 3.12.9 years based on principal amount.

As of MarchJune 31,30, 2026, 95.1%95.3% of our debt investments, based on principal amount, had floating interest rates. Our weighted average yields for debt investments were as follows:

As of MarchJune 31,30, 2026, our portfolio was invested across 26 different industries (Global Industry Classification “GICS”, Level 3 – Industry). The largest industries in our portfolio as of MarchJune 31,30, 2026 were Commercial Services & Supplies, Health Care Providers & Services, Commercial Services & Supplies, Distributors and Food Products, which represented, as a percentage of our portfolio of long-term investments, 12.4%,13.2%, 11.1%,11.7%, 11.1%10.4% and 10.4%,9.9%, respectively, based on fair value. We are generalist investors and the mix of industries represented by our portfolio companies will vary over time.

As of MarchJune 31,30, 2026, our average position size based on total investment commitments (at the portfolio company level) was $24.2$25.2 million.

ExcludesAs of June 30, 2026, we had debt investments on watchnon-accrual list,status, which representrepresented 6.0%2.7% and 4.5% of thetotal totaldebt investments at fair value ofand debtcost, investments as of March 31, 2026.respectively.

Excludes opportunistic debt investments of BC CS 2, L.P. (Cuisine Solutions, Inc.), SGCP Partners, Inc. (SG Credit), M2S Group Intermediate Holdings, Inc. and Texas Coffee Holdco LLC, which represent 7.9%7.6% of the total fair value of debt investments as of MarchJune 31,30, 2026.

Our investment activity for the three months ended MarchJune 31,30, 2026 and 2025 is presented below (information presented herein is at par value unless otherwise indicated).

Based on the rate in effect at MarchJune 31,30, 2026 per our Consolidated Schedule of Investments for new debt commitments entered into during the quarter.

Based on the underlying rate if still held at MarchJune 31,30, 2026. For those investments sold or paid down in full during the quarter, based on the rate in effect at the time of sale or paid down.

In general, we employ a strategy designed to ensure early detection of potential issues at underlying borrowers, including monthly financial reviewsreviews, internal tracking memoranda, weekly “watch list” discussions and other like activities. We have designed a risk rating system to aid in our portfolio management efforts where each investment is rated level 1-9, where Level 1 is the “least risky” and Level 9 is the “most risky.” This risk-rating system is quantitative in nature and aggregates criteria such as LTEV, leverage levels and fixed charge coverage ratios (“FCCR”) (each measured at point-in-time and as relates to levels at the close of the investment).

The table below sets forth our fair value of debt investments and number of portfolio companies, including percentage of each total, that are on watch list as of MarchJune 31,30, 2026 and December 31, 2025. This table excludes equity and broadly syndicated loan investments that represent, in aggregate, 3.2% of total fair value of investments at March 31, 2026.

We use Global Industry Classification Standards (GICS), Level 3 – Industry, for classifying the industry groupings of our portfolio companies. The table below describes long-term investments by industry composition based on fair value as of MarchJune 31,30, 2026 and December 31, 2025.

For the three and six months ended MarchJune 31,30, 2026 and 2025, our total investment income was derived from our portfolio of investments.

The following table represents the operating results for the three and six months ended MarchJune 31,30, 2026 and 2025.

Investment income for the three and six months ended MarchJune 31,30, 2026 and 2025,2026, totaled $57.3$55.7 million and $55.2$113.0 million, respectively, and consisted primarily of interest income on our debt investments. For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we had $4.3$2.5 million and $0.3$6.8 million, respectively, of PIK interest included in interest income. ForAdditionally, for the three and six months ended MarchJune 31,30, 2026, $0.3 million and $0.9 million, respectively, of non-recurring interest income (e.g., prepayment premiums and accelerated accretion of upfront loan origination fees from unscheduled paydowns, and amendment fees that are earned at closing) was included in interest income. For the six months ended June 30, 2026, $2.2 million,million of the $4.3$6.8 million, relates to PIK interest income recognized on our debt investments in Arborworks Acquisition, LLC following our change from non-accrual to accrual status for this investment.investment in the first fiscal quarter of 2026.

Operating expenses for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

During the three and six months ended MarchJune 31,30, 2026, we had realized losses of $2.3$12.2 million and realized losses of $14.5 million, respectively, on our investments. In February 2026, we completed a restructure of our debt investment in Regiment Security Partners LLC whereby our existing first lien senior secured debt was exchanged for new debt that included a tranche of last out first lien senior secured debt, and we recognized a $2.0 million realized loss as a result of the debt restructure. Additionally, during the threefirst monthsfiscal endedquarter March 31,of 2026, we recognized a $0.3 million realized loss due to the rotation out of one of our broadly syndicated loans. During the three months ended MarchJune 31,30, 2025,2026, we hadrecognized a $9.4 million realized gains of $0.6 millionloss on our investments.investment in Sundance Holdings Group, LLC for which the liquidation process was completed, and we recognized a $0.9 million loss on our investment in Diverzify Intermediate LLC whereby our existing first lien senior secured debt was exchanged for new debt that included a first lien last out tranche of debt. Finally, during the three months ended June 30, 2026, we recognized a $1.9 million realized loss due to the rotation out of our four remaining broadly syndicated loans.

We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. During the three and six months ended MarchJune 31,30, 2026 and 2025, net unrealized gains (losses) on our investment portfolio were comprised of the following:

For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we had a deferred income tax expense of $0.4$0.0 million and $0.6$0.4 million, respectively, related to our net unrealized gain on our investments in KABDC Corp, LLC, a wholly owned subsidiary, that has elected to be treated as a corporation for U.S. tax purposes. For the three and six months ended June 30, 2025, we had a deferred income tax expense of $0.3 million and $0.9 million, respectively, In addition, as of MarchJune 31,30, 2026, our net deferred tax liability of $2.8 million is included in accrued expenses and other liabilities of our Consolidated Statement of Assets and Liabilities.

For the three-month periods ended MarchJune 31,30, 2026 and 2025, the top five largest contributors to the change in unrealized gains and the top five largest contributors to the change in unrealized losses on investments, and the remaining unrealized gains and losses from other portfolio companies, are presented in the following tables.

We finance our investments with leverage in the form of borrowings under credit facilities and issuances of senior unsecured notes. We also intend to further borrow under credit facilities and/or issue senior unsecured notes in the future in order to finance our investments. In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. As defined in the 1940 Act, a 150% asset coverage means that for every $100 of net assets we hold, we can raise $200 from borrowing and issuing senior securities. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. As of MarchJune 31,30, 2026 and December 31, 2025, our asset coverage ratios were 195%186% and 198%, respectively. We currently intend to target asset coverage of 200% to 180% (which equates to a debt-to-equity ratio of 1.0x to 1.25x) but may alter this target based on market conditions.

As of MarchJune 31,30, 2026, we had $275 million Notes outstanding, $863$963 million borrowed under our credit facilities and cash and cash equivalents of $32.7$39.7 million (including investments in money market funds). As of that date, we had $537$437 million of undrawn commitments available on our credit facilities (subject to borrowing base restrictions and other conditions). As of MayAugust 5, 2026, we had $275 million Notes outstanding, $922$956 million borrowed under our credit facilities and cash and cash equivalents of $17.0$21.7 million (including investments in money market funds).

As of MarchJune 31,30, 2026, we had $275 million of senior unsecured notes outstanding, with $25 million of 8.65% Series A Notes due June 2027 (the “Series A Notes”), $50 million of 8.74% Series B Notes due June 2028 (the “Series B Notes”), $40 million of floating rate Series C Notes with an interest rate of SOFR plus 2.32% per annum due June 2028 (the “Series C Notes”), $60 million of 5.80% Series D Notes due June 2028 (the “Series D Notes”) and $100 million of 6.15% Series E Notes due October 2030 (the “Series E Notes”). We refer to all of these series of senior unsecured notes as, collectively, the “Notes”.

A summary of our significant contractual principal payment obligations related to the repayment of our outstanding indebtedness at MarchJune 31,30, 2026 is as follows:

As of MarchJune 31,30, 2026 and December 31, 2025, we had an aggregate $289.0$293.3 million and $287.5 million, respectively, of unfunded commitments, including $175.0$169.4 million and $171.1 million, respectively, of unfunded commitments on revolvers, to provide debt financing to our portfolio companies. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in our financial statements. Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in conjunction with our risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and in this Quarterly Report. See Note 2 to our consolidated financial statements for the threesix months ended MarchJune 31,30, 2026, for more information on our critical accounting policies.

We record interest incomeincome, which includes the accretion of discounts, amortization of premiums and payment-in-kind (“PIK”) interest, on an accrual basis towhen thecollection extentof thatinterest weis expect to collect such amounts.probable. For loans and debt securities with contractual PIK interest, which represents contractual interest accrued and added to the principal balance, we generally will not accrue PIK interest for accounting purposes if thewe portfolio company valuation indicatesdetermine that such PIK interest is not collectible. We do not accrue as a receivable interest on loans and debt securities as a receivable for accounting purposes if we have reason to doubt our ability to collect such interest. Original Issue Discounts (OIDs), upfront loan origination fees, amendment fees, market discounts or premiums are accreted or amortized using the effective interest method as interest income. WePrepayment recordpremiums, prepaymentaccelerated premiumsaccretion onof loansupfront loan origination fees from unscheduled paydowns, and debtamendment securitiesfees asthat are earned at closing are generally considered non-recurring interest income.