Nuveen Churchill Direct Lending Corp.

Second-quarter net investment income was $0.41 per share, unchanged from Q1 and fully covering the $0.36 base dividend. Total investment income was $44.3 million versus $46.3 million in Q1 2026. GAAP net income was $0.07 per share versus $0.18 per share in Q1, with $0.34 per share of realized and unrealized losses in the quarter. NAV ended June 30 at $17.19 per share, down from $17.50 at March 31, a 1.8% sequential decline. Gross originations were $12.1 million and gross investment fundings were $24.8 million, down from $82.9 million and $85.4 million in Q1. Sales and repayments were $67.5 million. At June 30, gross debt-to-equity was 1.29x and net debt-to-equity was 1.23x, versus 1.32x and 1.26x at March 31. Portfolio fair value was $1.9 billion, with 244 names, 9 nonaccruals, first-lien loans at 89.6% of the portfolio, and weighted average yield on debt and income-producing investments at cost of 9.3%. Management said spreads on new first-lien loans were approximately 475 basis points and target leverage remains 1 to 1.25x debt to equity. For Q3, the Board declared $0.38 per share, consisting of $0.36 regular and $0.02 supplemental. After quarter-end, NCDL redeemed CLO III with an aggregate principal balance of $297.9 million and completed a $100 million tap of 2030 unsecured notes, bringing unsecured notes to $400 million.

Ken Kencel framed the quarter as solid operationally despite a difficult private credit backdrop, emphasizing that the portfolio and credit metrics remained strong even as the market was noisy and selective. He repeatedly pointed to NCDL’s focus on the traditional core middle market, conservative underwriting, diversification, and sponsor relationships as structural advantages. He also sounded constructive about the new joint venture and the long-term outlook for private credit, saying systemic risk concerns are overstated.

Shaul Vichness focused on the bridge between earnings, leverage, and capital structure. He noted total investment income of $44.3 million, NII of $0.41 per share, GAAP net income of $0.07 per share, and a 1.8% NAV decline to $17.19, with losses tied mainly to two underperforming debt investments. He also walked through balance-sheet actions: gross and net debt-to-equity improved to 1.29x and 1.23x, CLO III was redeemed at par, and the $100 million unsecured note tap left pro forma weighted average cost of debt at SOFR plus 188 basis points, with unsecured notes now about 41% of outstanding debt. He said the firm wants leverage near the upper end of its 1 to 1.25x target and expects the JV to be accretive.

Analysts focused on three areas: the decision to tilt a bit more toward equity, the plan to ramp the new JV, and the increase in nonaccruals/watch list names. Management said the shift toward equity is only a marginal change, from roughly 1.5%-2% to 3%-4% of the portfolio, while the core still remains about 90% first-lien senior secured loans. On the JV, they said the vehicle started with about $150 million of assets and should ramp to about $300 million over the medium term, likely inside 12 months, with leverage around the 2x level at the JV. On credit, they stressed the four new nonaccruals were idiosyncratic, across separate industries, and not tied to an AI theme.