Q2 2026 Nuveen Churchill Direct Lending Corp Earnings Call Transcript
Key Points
- NII of $0.41 per share fully covered the $0.36 base distribution, with a supplemental distribution of $0.02 per share declared for Q3.
- Portfolio credit metrics remain strong, with total net leverage of 5.2x and interest coverage improving to 2.5x.
- The new joint venture with an institutional partner is expected to be accretive to earnings, providing additional deployment capacity.
- Capital structure optimization included redeeming a higher-cost CLO and issuing $100 million in unsecured notes at a favorable floating rate, maintaining investment-grade ratings.
- The company maintains a defensive, diversified portfolio with low software exposure (2.4%) and a focus on the traditional middle market, which offers higher spreads and tighter documentation.
- Net asset value declined 1.8% quarter-over-quarter to $17.19 per share due to realized and unrealized losses.
- Nonaccruals increased to 2.7% of the portfolio at cost (1.5% at fair value), up from 1.3% and 0.6% respectively in Q1.
- Gross originations dropped significantly to $12 million from $83 million in Q1, reflecting intentional deleveraging and timing issues.
- The watch list percentage rose to 10.8% of fair value from 8.4% in Q1, driven by a few underperforming names.
- Repayment and sales activity remained below the long-term assumption of 5% per quarter, at 3.4%, due to lower sponsor M&A activity.
Welcome to Nuveen Churchill Direct Lending Corp.'s second quarter 2026 earnings call. (Operator Instructions) As a reminder, this conference call is being recorded for replay purposes.
I'd now like to turn the call over to Robert Paun, Head of Investor Relations for NCDL. Robert, please go ahead.
Good morning, and welcome to Nuveen Churchill Direct Lending Corp.'s second quarter 2026 earnings call. Today, I'm joined by NCDL's Chairman, President and CEO, Ken Kencel; and Chief Financial Officer and Treasurer, Shai Vichness.
Following our prepared remarks, we will be available to take your questions. Today's call may include forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates, and projections about the company, our current and prospective portfolio
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