MSC Income Fund, Inc.

Second-quarter total investment income was $35.7 million, consistent with Q2 2025 and up $1.6 million, or 4.7%, from Q1. Adjusted NII before taxes was $16.3 million, or $0.36 per share, versus $17.3 million, or $0.37 per share, a year ago. The fund generated a $19 million net increase in investment fair value, consisting of $9.9 million in realized gains and $9.1 million in unrealized appreciation, and net assets increased $29.3 million, or $0.65 per share. NAV per share was $16.51, up $0.64 sequentially and $0.98 above the January 2025 offering price. Non-accruals were 1.9% of the portfolio at fair value and 5.8% at cost; regulatory asset coverage was 2.13 and net debt to NAV was 0.85. Looking ahead, management said the private loan pipeline is currently average, expects M&A activity to be higher in the second half of the year, and is actively evaluating options for the $150 million of October 2026 notes due on October 30.

Dwayne Hyzak said the quarter was marked by strong portfolio performance, a 15.9% annualized ROE, and meaningful net fair value appreciation. He highlighted the planned transition to Nick Meserve as CEO in the fourth quarter and framed the move as a continuation of the fund’s private loan strategy. His tone was constructive and confident: the fund has a favorable liquidity position, an average but active pipeline, and expects to continue growing over the next several quarters.

Cory Gilbert emphasized that total investment income was $35.7 million and that adjusted NII before taxes came in at $16.3 million, or $0.36 per share. He walked through the main drivers of higher expenses, including a $2.9 million increase in the capital gains incentive fee accrual, a $1.2 million increase in interest expense versus last year, and a $0.4 million increase in base management fees. He also noted the fund’s capital structure remained conservative, with 2.13 regulatory asset coverage and 0.85 net debt to NAV, and said the team is actively evaluating options for the $150 million October 2026 note maturity.

Analysts focused on leverage timing, pipeline quality, competition, non-accruals, and the rationale for the new repurchase authorization. Management said the goal is to move back toward target leverage over the next 3 or 4 quarters, depending on investment pace and repayments, and described the private loan pipeline as aligned with existing industries and priced at roughly the same level as last quarter, though spreads have widened since January. On competition, they said muted M&A has kept competition strong, while higher deal volume would likely improve spreads and terms; on non-accruals, they said the level is slightly elevated versus a long-term average and roughly around 2% on a cost basis.