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CION Investment Corporation
Quarterly Report • May 9, 2024
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Quarterly Report
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| Client: 24-13780-1_CION Investment Corporation_8-K | File: tm2413780d1_8k.htm Type: 8-K Pg: 1 of 4 |
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| UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 |
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| FORM 8-K |
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| CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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| Date of Report (Date of earliest event reported): May 9, 2024 (May 6, 2024) | ||||
| CĪON Investment Corporation (Exact Name of Registrant as Specified in Charter) |
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| Maryland | 000-54755 | 45-3058280 | ||
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
| 100 Park Avenue, 25th Floor New York, New York 10017 (Address of Principal Executive Offices) |
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| (212) 418-4700 (Registrant's telephone number, including area code) |
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| Not applicable (Former name or former address, if changed since last report) |
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| Check the appropriate box below if the Form | 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||
| ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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| Securities registered pursuant to Section 12(b) of the Act: | ||||
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| Common stock, par value \$0.001 per share CION The New York Stock Exchange |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition.
Quarterly Base Distribution
The board of directors (the "Board") of CĪON Investment Corporation ("CION") has delegated to CION's executive officers the authority to determine the amount, record dates, payment dates and other terms of distributions to shareholders, which will be ratified by the Board on a quarterly basis.
On May 6, 2024, CION's co-chief executive officers declared a quarterly base distribution of \$0.36 per share for the second quarter of 2024 payable on June 17, 2024 to shareholders of record as of June 3, 2024. A copy of the press release announcing the foregoing is attached hereto as Exhibit 99.1 and incorporated by reference herein.
Q1 2024 Financial Results
On May 9, 2024, CION issued a press release announcing its financial results for the first quarter ended March 31, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
In connection with its conference call to be held on May 9, 2024 to discuss its financial results for the first quarter ended March 31, 2024, CION has provided an accompanying slide presentation in the Investor Resources – Events and Presentations section of its website at www.cionbdc.com. A copy of the presentation is also attached hereto as Exhibit 99.2 and incorporated by reference herein.
The information disclosed under this Item 2.02, including Exhibits 99.1 and 99.2 hereto, is being "furnished" and shall not be deemed "filed" by CION for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure.
The information in Item 2.02 of this Current Report on Form 8-K is incorporated by reference into this Item 7.01.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release dated May 9, 2024.
99.2 CĪON Investment Corporation First Quarter 2024 Earnings Presentation. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CĪON Investment Corporation
Date: May 9, 2024 By: /s/ Michael A. Reisner Co-Chief Executive Officer
EXHIBIT LIST
| EXHIBIT | |
|---|---|
| NUMBER | DESCRIPTION |
| 99.1 | Press Release dated May 9, 2024. |
| 99.2 | CĪON Investment Corporation First Quarter 2024 Earnings Presentation. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
CION INVESTMENT CORPORATION REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS
Strong Operating Performance Drives Record Quarterly Net Investment Income and Increased Second Quarter 2024 Base Distribution to \$0.36 per Share
For Immediate Release
NEW YORK, May 9, 2024 — CION Investment Corporation (NYSE: CION) ("CION" or the "Company") today reported financial results for the first quarter ended March 31, 2024 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.
CION also announced that, on May 6, 2024, its co-chief executive officers declared a second quarter 2024 base distribution of \$0.36 per share, payable on June 17, 2024 to shareholders of record as of June 3, 2024, which is an increase of \$0.02 per share, or 5.9%, from the \$0.34 per share base distribution paid by the Company during the first quarter of 2024.
FIRST QUARTER AND OTHER HIGHLIGHTS
- · Net investment income and earnings per share for the quarter ended March 31, 2024 were \$0.60 per share and \$0.12 per share, respectively;
- · Net asset value per share was \$16.05 as of March 31, 2024 compared to \$16.23 as of December 31, 2023, a decrease of \$0.18 per share, or 1.1%. The decrease was primarily due to mark-to-market price declines to the Company's portfolio during the quarter ended March 31, 2024;
- · As of March 31, 2024, the Company had \$1.07 billion of total principal amount of debt outstanding, of which 61% was comprised of senior secured bank debt and 39% was comprised of unsecured debt. The Company's net debt-to-equity ratio was 1.03x as of March 31, 2024 compared to 1.10x as of December 31, 2023;
- · As of March 31, 2024, the Company had total investments at fair value of \$1.74 billion in 109 portfolio companies across 25 industries. The investment portfolio was comprised of 85.8% senior secured loans, including 84.2% in first lien investments;1
- · During the quarter, the Company funded new investment commitments of \$107 million, funded previously unfunded commitments of \$4 million, and had sales and repayments totaling \$207 million, resulting in a net decrease to the Company's funded portfolio of \$96 million;
- · As of March 31, 2024, investments on non-accrual status amounted to 0.86% and 2.88% of the total investment portfolio at fair value and amortized cost, respectively, compared to 0.89% and 3.47%, respectively, as of December 31, 2023; and
- · During the quarter, the Company repurchased 424,031 shares of its common stock under its 10b5-1 trading plan at an average price of \$11.01 per share for a total repurchase amount of \$4.7 million. Through March 31, 2024, the Company repurchased a total of 3,197,835 shares of its common stock under its 10b5-1 trading plan at an average price of \$9.89 per share for a total repurchase amount of \$31.6 million.
DISTRIBUTIONS
· For the quarter ended March 31, 2024, the Company paid a quarterly base distribution totaling \$18.3 million, or \$0.34 per share.
Michael A. Reisner, co-Chief Executive Officer of CION, commented:
"We reported another solid quarter this morning, continuing our momentum from 2023. Given our strong distribution coverage and outlook for the long-term earnings power of our portfolio, I am excited to announce an increase to our quarterly base dividend to \$0.36 per share, up from \$0.34 per share last quarter. The underlying credit performance in our portfolio remained strong, with non-accruals improving to 0.86% of fair value. While these trends reflect the rigor of our underwriting discipline and we are optimistic for continued performance in 2024, we remain conservatively levered on a net basis. As we look at our origination pipeline, we continue to see ample opportunities to deploy capital at attractive spreads to qualified middle market borrowers."
SELECTED FINANCIAL HIGHLIGHTS
| As of | |||||
|---|---|---|---|---|---|
| (in thousands, except per share data) | March 31, 2024 | December 31, 2023 | |||
| 1 Investment portfolio, at fair value |
\$ | 1,740,700 \$ | 1,840,824 | ||
| 2 Total debt outstanding |
\$ | 1,069,844 \$ | 1,092,344 | ||
| Net assets | \$ | 863,059 \$ | 879,563 | ||
| Net asset value per share | \$ | 16.05 \$ | 16.23 | ||
| Debt-to-equity | 1.24x | 1.24x | |||
| Net debt-to-equity | 1.03x | 1.10x | |||
| Three Months Ended | |||||
| (in thousands, except share and per share data) | March 31, 2024 | December 31, 2023 | |||
| Total investment income | \$ | 73,554 \$ | 59,999 | ||
| Total operating expenses and income tax expense | \$ | 40,961 \$ | 38,241 | ||
| Net investment income after taxes | \$ | 32,593 \$ | 21,758 | ||
| Net realized losses | \$ | (9,736) \$ | (351) | ||
| Net unrealized (losses) gains | \$ | (16,412) \$ | 29,585 | ||
| Net increase in net assets resulting from operations |
\$ | 6,445 \$ | 50,992 | ||
| Net investment income per share | \$ | 0.60 \$ | 0.40 | ||
| Net realized and unrealized (losses) gains per share | \$ | (0.48) \$ | 0.54 | ||
| Earnings per share | \$ | 0.12 \$ | 0.94 | ||
| Weighted average shares outstanding | 53,960,698 | 54,292,065 | |||
| Distributions declared per share | \$ | 0.34 \$ | 0.54 |
Total investment income for the three months ended March 31, 2024 and December 31, 2023 was \$73.6 million and \$60.0 million, respectively. The increase in total investment income was primarily driven by additional investment income from origination and restructuring activities and fees received in connection with the repayment of portfolio investments during the three months ended March 31, 2024.
Operating expenses for the three months ended March 31, 2024 and December 31, 2023 were \$41.0 million and \$38.2 million, respectively. The increase in operating expenses was primarily driven by higher advisory fees due to an increase in total investment income during the quarter ended March 31, 2024 as compared to the quarter ended December 31, 2023.
PORTFOLIO AND INVESTMENT ACTIVITY
1 A summary of the Company's investment activity for the three months ended March 31, 2024 is as follows:
| New Investment | ||||
|---|---|---|---|---|
| Commitments Sales and Repayments |
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| Percentage | Percentage | |||
| Investment Type (in thousands) | Amount | of Total | Amount | of Total |
| Senior secured first lien debt | \$ 115,453 |
92% | \$ 195,541 |
94% |
| Senior secured second lien debt | — | — | 5 | — |
| Collateralized securities and structured products - equity | — | — | 64 | — |
| Unsecured debt | 1,096 | 1% | 8,872 | 4% |
| Equity | 8,645 | 7% | 2,760 | 2% |
| Total | \$ 125,194 |
100% | \$ 207,242 |
100% |
During the three months ended March 31, 2024, new investment commitments were made across 5 new and 7 existing portfolio companies. During the same period, the Company received the full repayment on investments in 7 portfolio companies. As a result, the number of portfolio companies decreased from 111 as of December 31, 2023 to 109 as of March 31, 2024.
PORTFOLIO SUMMARY 1
As of March 31, 2024, the Company's investments consisted of the following:
| Investments at Fair Value | |||
|---|---|---|---|
| Investment Type (in thousands) | Amount | Percentage of Total |
|
| Senior secured first lien debt | \$ | 1,465,051 | 84.2% |
| Senior secured second lien debt | 28,460 | 1.6% | |
| Collateralized securities and structured products - equity | 1,004 | 0.1% | |
| Unsecured debt | 5,506 | 0.3% | |
| Equity | 240,679 | 13.8% | |
| Total | \$ | 1,740,700 | 100.0% |
The following table presents certain selected information regarding the Company's investments:
| As of | ||
|---|---|---|
| March 31, 2024 | December 31, 2023 | |
| Number of portfolio companies | 109 | 111 |
| 3 Percentage of performing loans bearing a floating rate |
92.6% | 92.5% |
| 3 Percentage of performing loans bearing a fixed rate |
7.4% | 7.5% |
| Yield on debt and other income producing investments at amortized cost4 | 12.93% | 13.41% |
| Yield on performing loans at amortized cost4 | 13.39% | 13.98% |
| Yield on total investments at amortized cost | 11.52% | 12.12% |
| Weighted average leverage (net debt/EBITDA)5 | 4.98x | 5.02x |
| 5 Weighted average interest coverage |
1.98x | 1.93x |
| 6 Median EBITDA |
\$33.7 million | \$33.7 million |
As of March 31, 2024, investments on non-accrual status represented 0.86% and 2.88% of the total investment portfolio at fair value and amortized cost, respectively. As of December 31, 2023, investments on non-accrual status represented 0.89% and 3.47% of the total investment portfolio at fair value and amortized cost, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2024, the Company had \$1.07 billion of total principal amount of debt outstanding, comprised of \$650 million of outstanding borrowings under its senior secured credit facilities and \$420 million of unsecured notes and term loans. The combined weighted average interest rate on debt outstanding was 8.4% for the quarter ended March 31, 2024. As of March 31, 2024, the Company had \$179 million in cash and short-term investments and \$175 million available under its financing arrangements.2
EARNINGS CONFERENCE CALL
CION will host an earnings conference call on Thursday, May 9, 2024 at 11:00 am Eastern Time to discuss its financial results for the first quarter ended March 31, 2024. Please visit the Investor Resources - Events and Presentations section of the Company's website at www.cionbdc.com for a slide presentation that complements the earnings conference call.
| Date: 05/08/2024 05:42 PM | ||
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| Client: 24-13780-1 CION Investment Corporation 8-K |
All interested parties are invited to participate via telephone or listen via the live webcast, which can be accessed by clicking the following link: CION Investment Corporation First Quarter Conference Call. Domestic callers can access the conference call by dialing (877) 484- 6065. International callers can access the conference call by dialing +1 (201) 689-8846. All callers are asked to dial in approximately 10 minutes prior to the call. An archived replay will be available on a webcast link located in the Investor Resources - Events and Presentations section of CION's website.
ENDNOTES
- 1) The discussion of the investment portfolio excludes short-term investments.
- 2) Total debt outstanding excludes netting of debt issuance costs of \$9.4 million and \$10.6 million as of March 31, 2024 and December 31, 2023, respectively.
- 3) The fixed versus floating composition has been calculated as a percentage of performing debt investments measured on a fair value basis, including income producing preferred stock investments and excludes investments, if any, on non-accrual status.
- 4) Computed based on the (a) annual actual interest rate or yield earned plus amortization of fees and discounts on the performing debt and other income producing investments as of the reporting date, divided by (b) the total performing debt and other income producing investments (excluding investments on non-accrual status) at amortized cost. This calculation excludes exit fees that are receivable upon repayment of the investment.
- 5) For a particular portfolio company, the Company calculates the level of contractual indebtedness net of cash ("net debt") owed by the portfolio company and compares that amount to measures of cash flow available to service the net debt. To calculate net debt, the Company includes debt that is both senior and pari passu to the tranche of debt owned by it but excludes debt that is legally and contractually subordinated in ranking to the debt owned by the Company. The Company believes this calculation method assists in describing the risk of its portfolio investments, as it takes into consideration contractual rights of repayment of the tranche of debt owned by the Company relative to other senior and junior creditors of a portfolio company. The Company typically calculates cash flow available for debt service at a portfolio company by taking EBITDA for the trailing twelve-month period. Weighted average net debt to EBITDA is weighted based on the fair value of the Company's performing debt investments and excluding investments where net debt to EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.
For a particular portfolio company, the Company also calculates the level of contractual interest expense owed by the portfolio company and compares that amount to EBITDA ("interest coverage ratio"). The Company believes this calculation method assists in describing the risk of its portfolio investments, as it takes into consideration contractual interest obligations of the portfolio company. Weighted average interest coverage is weighted based on the fair value of the Company's performing debt investments, and excludes investments where interest coverage may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue.
Portfolio company statistics, including EBITDA, are derived from the financial statements most recently provided to the Company for each portfolio company as of the reported end date. Statistics of the portfolio companies have not been independently verified by the Company and may reflect a normalized or adjusted amount.
6) Median EBITDA is calculated based on the portfolio company's EBITDA as of the Company's initial investment.
CĪON Investment Corporation Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| Assets Investments, at fair value: Non-controlled, non-affiliated investments (amortized cost of \$1,541,138 and \$1,610,822, respectively) \$ 1,494,478 \$ 1,570,676 Non-controlled, affiliated investments (amortized cost of \$212,966 and \$210,103, respectively) 202,915 206,301 Controlled investments (amortized cost of \$154,505 and \$154,705, respectively) 173,444 177,293 Total investments, at fair value (amortized cost of \$1,908,609 and \$1,975,630, respectively) 1,870,837 Cash 48,482 Interest receivable on investments 36,366 Receivable due on investments sold and repaid 11,452 Prepaid expenses and other assets 1,137 Total assets \$ 1,968,274 \$ Liabilities and Shareholders' Equity Liabilities Financing arrangements (net of unamortized debt issuance costs of \$9,388 and \$10,643, respectively) \$ 1,060,455 \$ 1,081,701 Payable for investments purchased 21,041 4,692 Accounts payable and accrued expenses 743 1,036 Interest payable 8,556 10,231 Accrued management fees 6,864 6,893 Accrued subordinated incentive fee on income 6,914 4,615 Accrued administrative services expense 642 2,156 Shareholder distribution payable — 10,837 Total liabilities 1,105,215 1,122,161 Shareholders' Equity Common stock, \$0.001 par value; 500,000,000 shares authorized; 53,760,605 and 54,184,636 shares issued, and 53,760,605 and 54,184,636 shares outstanding, respectively 54 54 Capital in excess of par value 1,028,360 1,033,030 Accumulated distributable losses (165,355) (153,521) Total shareholders' equity 863,059 Total liabilities and shareholders' equity \$ 1,968,274 \$ Net asset value per share of common stock at end of period \$ 16.05 \$ 16.23 |
March 31, 2024 | December 31, 2023 | ||
|---|---|---|---|---|
| (unaudited) | ||||
| 1,954,270 | ||||
| 8,415 | ||||
| 36,724 | ||||
| 967 | ||||
| 1,348 | ||||
| 2,001,724 | ||||
| 879,563 | ||||
| 2,001,724 | ||||
CĪON Investment Corporation Consolidated Statements of Operations
(in thousands, except share and per share amounts)
| Three Months Ended | |||
|---|---|---|---|
| March 31, 2024 | December 31, 2023 | ||
| (unaudited) | (unaudited) | ||
| Investment income | |||
| Non-controlled, non-affiliated investments | |||
| Interest income | \$ 55,372 \$ |
43,096 | |
| Paid-in-kind interest income | 7,049 | 6,581 | |
| Fee income | 3,873 | 3,127 | |
| Dividend income | — | 128 | |
| Non-controlled, affiliated investments | |||
| Interest income | 1,519 | 1,519 | |
| Paid-in-kind interest income | 2,482 | 2,419 | |
| Dividend income | 27 | — | |
| Controlled investments | |||
| Interest income | 3,232 | 2,786 | |
| Fee income | — | 341 | |
| Paid-in-kind interest income | — | 2 | |
| Total investment income | 73,554 | 59,999 | |
| Operating expenses | |||
| Management fees | 6,864 | 6,893 | |
| Administrative services expense | 1,092 | 1,228 | |
| Subordinated incentive fee on income | 6,914 | 4,615 | |
| General and administrative | 1,784 | 1,422 | |
| Interest expense | 24,302 | 24,023 | |
| Total operating expenses | 40,956 | 38,181 | |
| Net investment income before taxes | 32,598 | 21,818 | |
| Income tax expense, including excise tax | 5 | 60 | |
| Net investment income after taxes | 32,593 | 21,758 | |
| Realized and unrealized (losses) gains | |||
| Net realized losses on: | |||
| Non-controlled, non-affiliated investments | (9,736) | (351) | |
| Non-controlled, affiliated investments | — | — | |
| Controlled investments | — | — | |
| Net realized losses | (9,736) | (351) | |
| Net change in unrealized (depreciation) appreciation on: | |||
| Non-controlled, non-affiliated investments | (6,517) | 7,050 | |
| Non-controlled, affiliated investments | (6,246) | 1,801 | |
| Controlled investments | (3,649) | 20,734 | |
| Net change in unrealized (depreciation) appreciation | (16,412) | 29,585 | |
| Net realized and unrealized (losses) gains | (26,148) | 29,234 | |
| Net increase in net assets resulting from operations |
\$ 6,445 \$ |
50,992 | |
| Per share information—basic and diluted | |||
| Net increase in net assets per share resulting from operations |
\$ 0.12 \$ |
0.94 | |
| Net investment income per share | \$ 0.60 \$ |
0.40 | |
| Weighted average shares of common stock outstanding | 53,960,698 | 54,292,065 | |
| Date: 05/08/2024 05:42 PM | Toppan Merrill | Project: 24-13780-1 Form Type: 8-K |
|---|---|---|
ABOUT CION INVESTMENT CORPORATION
CION Investment Corporation is a leading publicly listed business development company that had approximately \$2.0 billion in total assets as of March 31, 2024. CION seeks to generate current income and, to a lesser extent, capital appreciation for investors by focusing primarily on senior secured loans to U.S. middle-market companies. CION is advised by CION Investment Management, LLC, a registered investment adviser and an affiliate of CION. For more information, please visit www.cionbdc.com.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "project," "target," "estimate," "intend," "continue," or "believe" or the negatives thereof or other variations thereon or comparable terminology. You should read statements that contain these words carefully because they discuss CION's plans, strategies, prospects and expectations concerning its business, operating results, financial condition and other similar matters. These statements represent CION's belief regarding future events that, by their nature, are uncertain and outside of CION's control. There are likely to be events in the future, however, that CION is not able to predict accurately or control. Any forward-looking statement made by CION in this press release speaks only as of the date on which it is made. Factors or events that could cause CION's actual results to differ, possibly materially from its expectations, include, but are not limited to, the risks, uncertainties and other factors CION identifies in the sections entitled "Risk Factors" and "Forward-Looking Statements" in filings CION makes with the SEC, and it is not possible for CION to predict or identify all of them. CION undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
OTHER INFORMATION
The information in this press release is summary information only and should be read in conjunction with CION's Quarterly Report on Form 10-Q, which CION filed with the SEC on May 9, 2024, as well as CION's other reports filed with the SEC. A copy of CION's Quarterly Report on Form 10-Q and CION's other reports filed with the SEC can be found on CION's website at www.cionbdc.com and the SEC's website at www.sec.gov.
CONTACTS
Media Susan Armstrong [email protected]
Investor Relations
Charlie Arestia [email protected] (646) 253-8259 James Carbonara
Hayden IR (646)-755-7412 [email protected]
Exhibit 99.2
CION Investment Corporation First Quarter 2024 Earnings Presentation
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3 1. The discussion of the investment portfolio excludes short term investments. First Quarter and Other Highlights – Ended March 31, 2024 • Net investment income and earnings per share for the quarter ended March 31 , 2024 were \$ 0 . 60 per share and \$ 0 . 12 per share, respectively ; • Net asset value per share was \$ 16 . 05 as of March 31 , 2024 compared to \$ 16 . 23 as of December 31 , 2023 , a decrease of \$ 0 . 18 per share, or 1 . % . The decrease was primarily due to mark - to - market price declines to the Company's portfolio during the quarter ended March 31 , 2024 ; • As of March 31 , 2024 , the Company had \$ 1 . 07 billion of total principal amount of debt outstanding, of which 61 % was comprised of senior secured bank debt and 39 % was comprised of unsecured debt . The Company's net debt - to - equity ratio was 1 . 03 x as of March 31 , 2024 compared to 1 . 10 x as of December 31 , 2023 ; • As of March 31 , 2024 , the Company had total investments at fair value of \$ 1 . 74 billion in 109 portfolio companies across 25 industries . The investment portfolio was comprised of 85 . 8 % senior secured loans, including 84 . 2 % in first lien investments ; 1 • During the quarter, the Company funded new investment commitments of \$ 107 million, funded previously unfunded commitments of \$ 4 million, and had sales and repayments totaling \$ 207 million, resulting in a net decrease to the Company's funded portfolio of \$ 96 million ; • As of March 31 , 2024 , investments on non - accrual status amounted to 0 . 86 % and 2 . 88 % of the total investment portfolio at fair value and amortized cost, respectively, compared to 0 . 89 % and 3 . 47 % , respectively, as of December 31 , 2023 ; and • During the quarter, the Company repurchased 424 , 031 shares of its common stock under its 10 b 5 - 1 trading plan at an average price of \$ 11 . 01 per share for a total repurchase amount of \$ 4 . 7 million . Through March 31 , 2024 , the Company repurchased a total of 3 , 197 , 835 shares of its common stock under its 10 b 5 - 1 trading plan at an average price of \$ 9 . 89 per share for a total repurchase amount of \$ 31 . 6 million . DISTRIBUTIONS • For the quarter ended March 31 , 2024 , the Company paid a quarterly base distribution totaling \$ 18 . 3 million, or \$ 0 . 34 per share ; and • On May 6 , 2024 , the Company's co - chief executive officers declared a second quarter 2024 base distribution of \$ 0 . 36 per share, payable on June 17 , 2024 to shareholders of record as of June 3 , 2024 , which is an increase of \$ 0 . 02 per share, or 5 . 9 % , from the \$ 0 . 34 per share base distribution paid by the Company during the first quarter of 2024 .
| (\$ in millions) | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 |
|---|---|---|---|---|---|
| Investment portfolio, at fair value(1) | \$1,741 | \$1,841 | \$1,728 | \$1,688 | \$1,657 |
| Total debt outstanding(2) | \$1,070 | \$1,092 | \$1,008 | \$986 | \$1,011 |
| Net assets | \$863 | \$880 | \$861 | \$836 | \$830 |
| Debt-to-equity | 1.24x | 1.24x | 1.17x | 1.18x | 1.22x |
| Net debt-to-equity | 1.03x | 1.10x | 1.03x | 1.04x | 1.02x |
| Total investment income | \$73.6 | \$60.0 | \$67.5 | \$58.5 | \$65.0 |
| Net investment income | \$32.6 | \$21.8 | \$30.0 | \$23.4 | \$29.9 |
| Net realized and unrealized (losses) gains | \$(26.1) | \$29.2 | \$17.5 | \$4.5 | \$(60.9) |
| Net increase (decrease) in net assets resulting from operations | \$6.4 | \$51.0 | \$47.5 | \$27.9 | \$(31.0) |
| Per Share Data | |||||
| Net asset value per share | \$16.05 | \$16.23 | \$15.80 | \$15.31 | \$15.11 |
| Net investment income per share | \$0.60 | \$0.40 | \$0.55 | \$0.43 | \$0.54 |
| Net realized and unrealized (losses) gains per share | \$(0.48) | \$0.54 | \$0.32 | \$0.08 | \$(1.10) |
| Earnings per share | \$0.12 | \$0.94 | \$0.87 | \$0.51 | \$(0.56) |
| Distributions declared per share (3) | \$0.34 | \$0.54 - |
\$0.39 | \$0.34 | \$0.34 |
4 Selected Financial Highlights 1. The discussion of the investment portfolio excludes short term investments. 2. Total debt outstanding excludes netting of debt issuance costs. Please refer to page 10 for debt net of issuance costs. 3. Includes supplemental distributions of \$ 0 . 05 per share during each quarter ended September 30 , 2023 and December 31 , 2023 and a special distribution of \$ 0 . 15 per share during the quarter ended December 31 , 2023 . (\$ in millions) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Investment portfolio, at fair value (1) \$1,741 \$1,841 \$1,728 \$1,688 \$1,657 Total debt outstanding (2) \$1,070 \$1,092 \$1,008 \$986 \$1,011 Net assets \$863 \$880 \$861 \$836 \$830 Debt - to - equity 1.24x 1.24x 1.17x 1.18x 1.22x Net debt - to - equity 1.03x 1.10x 1.03x 1.04x 1.02x Total investment income \$73.6 \$60.0 \$67.5 \$58.5 \$65.0 Net investment income \$32.6 \$21.8 \$30.0 \$23.4 \$29.9 Net realized and unrealized (losses) gains \$(26.1) \$29.2 \$17.5 \$4.5 \$(60.9) Net increase (decrease) in net assets resulting from operations \$6.4 \$51.0 \$47.5 \$27.9 \$(31.0) Per Share Data Net asset value per share \$16.05 \$16.23 \$15.80 \$15.31 \$15.11 Net investment income per share \$0.60 \$0.40 \$0.55 \$0.43 \$0.54 Net realized and unrealized (losses) gains per share \$(0.48) \$0.54 \$0.32 \$0.08 \$(1.10) Earnings per share \$0.12 \$0.94 \$0.87 \$0.51 \$(0.56) Distributions declared per share (3) \$0.34 \$0.54 \$0.39 \$0.34 \$0.34
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| (\$ in millions) | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 |
|---|---|---|---|---|---|
| New investment commitments | \$125 | \$152 | \$97 | \$62 | \$15 |
| Funded | \$107 | \$147 | \$93 | \$62 | \$14 |
| Unfunded | \$18 | ટેટ | \$4 | \$0 | \$1 |
| Fundings of previously unfunded commitments | \$4 | \$7 | \$10 | રૂ8 | ੜ੍ਹਤ |
| Repayments | \$(190) | \$(83) | \$(94) | ર્ (ટેંક) | \$(57) |
| Sales | \$(17) | \$0 | \$(2) | \$(2) | \$(9) |
| Net funded investment activity | ર(ae) | \$71 | \$7 | \$15 | \$(43) |
| Total Portfolio Companies | 109 | 111 | 109 | 112 | 109 |
|--|--|--|
6 Portfolio Asset Composition * Less than 1%. The discussion of the investment portfolio is at fair value and excludes short term investments. 100% 100% 88% 7% 5% 87% 13% 84% 14% 2% 0%* 0%* 0%* 0%* 0%* 1% 1% 1% 1% 85% 1% 13% 86% 11% 2% 87% 89% 2% 10% 8% 2% 0%* 93% 7%
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| Portfolio Characteristics (as of March 31, 2024) | |||||||
|---|---|---|---|---|---|---|---|
| Investment Portfolio | |||||||
| Total investments and unfunded commitments | \$1,801.3 million | ||||||
| Unfunded commitments | \$60.6 million | ||||||
| Investments at fair value | \$1,740.7 million | ||||||
| Yield on debt and other income producing investments at amortized cost(1) | 12.93 % | ||||||
| Yield on performing loans at amortized cost(1) | 13.39 % | ||||||
| Yield on total investments at amortized cost | 11.52 % |
| Portfolio Companies | |
|---|---|
| Number of portfolio companies | 10 |
| Weighted average leverage (net debt/EBITDA)(2) | 4.98 |
| Weighted average interest coverage(2) | 1.98 |
| Median EBITDA(3) | \$33.7 million |
| Industry Diversification(4) | ||||
|---|---|---|---|---|
| Industry | % of Investment Portfolio | |||
| Services: Business | 15.9 % | |||
| Healthcare & Pharmaceuticals | 12.6 % | |||
| Retail | 8.1 % | |||
| Media: Diversified & Production | 7.8 % | |||
| Services: Consumer | 7.1 % | |||
| Other (≤ 7.0% each) | 48.5 % | |||
| (1) See endnote 4 in our press release filed with the SEC on May 9, 2024. (2) See endnote 5 in our press release file |
PORTFOLIO BY SECURITY TYPE (4) PORTFOLIO BY INTEREST RATE TYPE (4)Portfolio Summary 8 (1)See endnote 4in ourpress release filed with the SEC on May 9,2024 .( 2)See endnote 5in ourpress release filed with the SEC on May 9,2024 .( 3)See endnote 6in our press release filed with the SEC on May 9,2024 .( 4)The discussion ofthe investment portfolio excludes short term investments .Portfolio Characteristics (as of March 31, 2024) Investment Portfolio Total investments and unfunded commitments \$1,801.3 million Unfunded commitments \$60.6 million Investments atfair value \$1,740.7 million Yield on debtand other income producing investments atamortized cost (1) 12.93 % Yield onperforming loans atamortized cost (1) 13.39 % Yield on totalinvestments atamortized cost11.52 %Portfolio Companies Number ofportfolio companies 109 Weighted average leverage (net debt/EBITDA) (2)4.98x Weighted average interest coverage (2)1.98x Median EBITDA (3)\$33.7 million Industry Diversification (4)Industry % ofInvestment Portfolio Services: Business 15.9 % Healthcare & Pharmaceuticals 12.6 %Retail 8.1 % Media: Diversified &Production 7.8 % Services: Consumer 7.1 % Other (≤ 7.0% each) 48.5 % 85.8% Senior Secured Debt Investments
| All figures in thousands, except share and per share data | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Investment income | |||||||||||
| Interest income(1) | i S | 69,654 | 56,403 | 5 | 63,913 | S | 56,813 | S | 53,781 | ||
| Dividend income | 27 | 128 | ਰੇਤ | 52 | 8,131 | ||||||
| Fee income | 3,873 | 3,468 | 3,532 | 1,631 | 3,063 | ||||||
| Total investment income | i ද | 73,554 | S | ਤੇ ਕੇ ਰੋਕੇ ਰੋਕੇ ਹੋ ਕਿ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱ | S | 67,540 | ટે | 58,496 | ટે | 64,975 | |
| Expenses | |||||||||||
| Management fees | 5 | 6,864 | S | 6,893 | 5 | 6,741 | ટે | 6,546 | S | 6,676 | |
| Interest and other debt expenses | 24,302 i | 24,023 | 21,757 | 20,467 | 19,309 | ||||||
| Incentive fees | 6,914 ! | 4,615 | 6,362 | 4,965 | 6,335 | ||||||
| Other operating expenses | 2,876 | 2,650 | 2,927 | 2,984 | 2,792 | ||||||
| Total expenses before taxes | . \$ | 40,956 | S | 38,181 | રે | 37,787 | \$ | 34,962 | \$ | 35,112 | |
| Income tax expense (benefit), including excise tax | n | 60 | (237) | 118 | 5 | ||||||
| Net investment income after taxes | S | 32,593 | 21,758 | 29,990 | 23,416 | 29,858 | |||||
| Net realized (loss) gain and unrealized (depreciation) appreciation on investments | |||||||||||
| Net realized loss | । ਨੇ | (9,736) | 5 | (351) | 5 | (8,123) | 5 | (18,928) | S | (4,525) | |
| Net change in unrealized (depreciation) appreciation | (16,412) | 29,585 | 25,606 | 23,406 | (56,378) | ||||||
| Net realized and unrealized (losses) gains | ! ફે | (26,148) | 29,234 | 5 | 17,483 | 4,478 | 5 | (60,903) | |||
| Net increase (decrease) in net assets resulting from operations | 15 | 6,445 | 50,992 | 47,473 | 27,894 | (31,045) | |||||
| Per share data | |||||||||||
| Net investment income | 15 | 0.60 | 0.40 | S | 0.55 | S | 0.43 | S | 0.54 | ||
| Net realized (loss) gain and unrealized (depreciation) appreciation on investments | । ই | (0.48) | \$ | 0.54 | 5 | 0.32 | S | 0.08 | S | (1.10) | |
| Earnings per share | 5 | 0.12 | 5 | 0.94 | 5 | 0.87 | S | 0.51 | S | (0.56) | |
| Distributions declared per share(2) | S | 0.34 | S | 0.54 | S | 0.39 | S | 0.34 | S | 0.34 | |
| Weighted average shares outstanding | 53,960,698 | 54,292,065 | 54,561,367 | 54,788,740 | 55,109,482 | ||||||
| Shares outstanding, end of period | 53,760,605 | 54,184,636 54,464,804 |
54,632,827 | 54,961,455 | |||||||
Quarterly Operating Results 9 All figures in thousands, except share and per share data Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Investment income Interest income (1) \$ 69,654 \$ 56,403 \$ 63,913 \$ 56,813 \$ 53,781 Dividend income 27 128 95 52 8,131 Fee income 3,873 3,468 3,532 1,631 3,063 Total investment income \$ 73,554 \$ 59,999 \$ 67,540 \$ 58,496 \$ 64,975 Expenses Management fees \$ 6,864 \$ 6,893 \$ 6,741 \$ 6,546 \$ 6,676 Interest and other debt expenses 24,302 24,023 21,757 20,467 19,309 Incentive fees 6,914 4,615 6,362 4,965 6,335 Other operating expenses 2,876 2,650 2,927 2,984 2,792 Total expenses before taxes \$ 40,956 \$ 38,181 \$ 37,787 \$ 34,962 \$ 35,112 Income tax expense (benefit), including excise tax 5 60 (237) 118 5 Net investment income after taxes \$ 32,593 \$ 21,758 \$ 29,990 \$ 23,416 \$ 29,858 Net realized (loss) gain and unrealized (depreciation) appreciation on investments Net realized loss \$ (9,736) \$ (351) \$ (8,123) \$ (18,928) \$ (4,525) Net change in unrealized (depreciation) appreciation (16,412) 29,585 25,606 23,406 (56,378) Net realized and unrealized (losses) gains \$ (26,148) \$ 29,234 \$ 17,483 \$ 4,478 \$ (60,903) Net increase (decrease) in net assets resulting from operations \$ 6,445 \$ 50,992 \$ 47,473 \$ 27,894 \$ (31,045) Per share data Net investment income \$ 0.60 \$ 0.40 \$ 0.55 \$ 0.43 \$ 0.54 Net realized (loss) gain and unrealized (depreciation) appreciation on investments \$ (0.48) \$ 0.54 \$ 0.32 \$ 0.08 \$ (1.10) Earnings per share \$ 0.12 \$ 0.94 \$ 0.87 \$ 0.51 \$ (0.56) Distributions declared per share (2) \$ 0.34 \$ 0.54 \$ 0.39 \$ 0.34 \$ 0.34 Weighted average shares outstanding 53,960,698 54,292,065 54,561,367 54,788,740 55,109,482 Shares outstanding, end of period 53,760,605 54,184,636 54,464,804 54,632,827 54,961,455 1. Includes certain prepayment fees, exit fees and paid - in kind interest income. 2. Includes supplemental distributions of \$0.05 per share during each quarter ended September 30, 2023 and December 31, 2023 and a special distributions of \$0.15 per share during the quarter ended December 31, 2023.
Quarterly Balance Sheet 10 All figures in thousands, except per share data and asset coverage ratio Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Assets Investments, at fair value \$ 1,870,837 \$ 1,954,270 \$ 1,844,877 \$ 1,788,462 \$ 1,723,352 Cash 48,482 8,415 6,805 11,515 96,016 Interest receivable on investments 36,366 36,724 40,378 33,200 27,333 Receivable due on investments sold 11,452 967 2,646 997 3,239 Dividend receivable on investments — 82 — — Prepaid expenses and other assets 1,137 1,348 1,552 608 4,552 Total Assets \$ 1,968,274 \$ 2,001,724 \$ 1,896,340 \$ 1,834,782 \$ 1,854,492 Liabilities & Net Assets Financing arrangements (net of debt issuance costs) (1) \$ 1,060,455 \$ 1,081,701 \$ 1,000,211 \$ 976,737 \$ 1,002,396 Payable for investments purchased 21,041 4,692 9,663 — — Accounts payable and accrued expenses 743 1,036 1,510 1,344 1,075 Interest payable 8,556 10,231 7,238 8,183 7,007 Accrued management fees 6,864 6,893 6,741 6,546 6,676 Accrued subordinated incentive fee on income 6,914 4,615 6,362 4,967 6,334 Accrued administrative services expense 642 2,156 1,064 574 694 Share repurchase payable — — 67 — Shareholder distribution payable — 10,837 2,724 — — Total Liabilities \$ 1,105,215 \$ 1,122,161 \$ 1,035,580 \$ 998,418 \$ 1,024,182 Total Net Assets \$ 863,059 \$ 879,563 \$ 860,760 \$ 836,364 \$ 830,310 Total Liabilities and Net Assets \$ 1,968,274 \$ 2,001,724 \$ 1,896,340 \$ 1,834,782 \$ 1,854,492 Net Asset Value per share \$ 16.05 \$ 16.23 \$ 15.80 \$ 15.31 \$ 15.11 Asset coverage ratio (2) 1.81 1.81 1.85 1.85 1.82 1. The Company had debt issuance costs of \$ 9 , 388 as of March 31 , 2024 , \$ 10 , 643 as of December 31 , 2023 , \$ 8 , 001 as of September 30 , 2023 , \$ 8 , 976 as of June 30 , 2023 and \$ 8 , 316 as of March 31 , 2023 . 2. Asset coverage ratio is equal to (i) the sum of (a) net assets at the end of the period and (b) total senior securities outstanding at the end of the period (excluding unfunded commitments), divided by (ii) total senior securities outstanding at the end of the period .
| All figures in thousands, except per share data and asset coverage ratio | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets | |||||||||||
| Investments, at fair value | ારે | 1,870,837 ! | ટે | 1,954,270 | ഗ | 1,844,877 | ટે | 1,788,462 | 1,723,352 | ||
| Cash | 48,482 | 8,415 | 6,805 | 11,515 | 96,016 | ||||||
| Interest receivable on investments | 36,366 ; | 36,724 | 40,378 | 33,200 | 27,333 | ||||||
| Receivable due on investments sold | 11,452 | 967 | 2,646 | 997 | 3,239 | ||||||
| Dividend receivable on investments | 82 | ||||||||||
| Prepaid expenses and other assets | 1,137 | 1,348 | 1,552 | 608 | 4,552 | ||||||
| Total Assets | is | 1,968,274 | 2,001,724 | റ | 1,896,340 | 1,834,782 | 5 | 1,854,492 | |||
| Liabilities & Net Assets | |||||||||||
| Financing arrangements (net of debt issuance costs)(1) | is | 1,060,455 | ડ | 1,081,701 | ഗ | 1,000,211 | 976,737 | 1,002,396 | |||
| Payable for investments purchased | 21,041 | 4,692 | 9,663 | ||||||||
| Accounts payable and accrued expenses | 743 ! | 1,036 | 1,510 | 1,344 | 1,075 | ||||||
| Interest payable | 8,556 : | 10,231 | 7,238 | 8,183 | 7,007 | ||||||
| Accrued management fees | 6,864 i | 6,893 | 6,741 | 6,546 | 6,676 | ||||||
| Accrued subordinated incentive fee on income | 6,914 ! | 4,615 | 6,362 | 4,967 | 6,334 | ||||||
| Accrued administrative services expense | 642 | 2,156 | 1,064 | 574 | 694 | ||||||
| Share repurchase payable | 67 | 67 | |||||||||
| Shareholder distribution payable | - | 10,837 | 2,724 | ||||||||
| Total Liabilities | ારે | 1,105,215 | રે | 1,122,161 | રે | 1,035,580 | 998,418 | S | 1,024,182 | ||
| Total Net Assets | : રે | 863,059 | 5 | 879,563 | ટ | 860,760 | S | 836,364 | S | 830,310 | |
| Total Liabilities and Net Assets | i S | 1,968,274 i | 2,001,724 | ટ | 1,896,340 | S | 1,834,782 | 1,854,492 | |||
| Net Asset Value per share | \$ | 16.05 | 5 | 16.23 | 5 | 15.80 | S | 15.31 | S | 15.11 | |
| Asset coverage ratio(2) | 1.81 | 1.81 | 1.85 | 1.85 | 1.82 |
11 Q1 2024 Net Asset Value Bridge Per Share Data
12 Total Commitment Amount Principal Amount Outstanding Interest Rate Maturity Date JPM Credit Facility \$675 \$550 S + 3.20% (2) 5/15/2025 UBS Facility 150 100 S + 3.20% 11/19/2024 Unsecured Notes, 2026 (1) 125 125 4.50% 2/11/2026 Series A Unsecured Notes, 2026 (1) 115 115 S + 3.82% 8/31/2026 Unsecured Notes, 2027 (1) 100 100 S + 4.75% 11/8/2027 2022 Unsecured Term Loan (1) 50 50 S + 3.50% 4/27/2027 2021 Unsecured Term Loan (1) 30 30 5.20% 9/30/2024 Total Debt \$1,245 \$1,070 8.4% Debt Summary DEBT MATURITIES (\$ in millions) DEBT SCHEDULE (\$ in millions) \$175 million in available capacity within existing senior secured facilities 1. Investment grade credit rating. 2. Bears interest at a rate of SOFR + 3.05% and a LIBOR to SOFR credit spread adjustment of 0.15%.
13 Distribution Per Share and Distribution Coverage 1 1. Includes special and/or supplemental distributions of \$0.27, \$0.05 and \$0.20 per share during Q4 2022, Q3 2023 and Q4 2023, r esp ectively. Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Net Investment Income (per share) \$0.34 \$0.45 \$0.43 \$0.54 \$0.43 \$0.55 \$0.40 \$0.60 Distribution (per share) \$0.28 \$0.31 \$0.58(1) \$0.34 \$0.34 \$0.39(1) \$0.54(1) \$0.34 Distribution coverage 1.21x 1.45x 0.74x 1.59x 1.26x 1.41x 0.74x 1.76x
