Stellus Private Credit BDC Reports Results for its Second Fiscal Quarter Ended June 30, 2025
HOUSTON, Aug. 8, 2025 /PRNewswire/ -- Stellus Private Credit BDC ("Stellus PBDC", "we", or the "Company") today announced financial results for its second fiscal quarter ended June 30, 2025.
Robert T. Ladd, Chief Executive Officer of Stellus PBDC, stated, "We are pleased to report solid operating results in the second quarter in which we generated $0.33 per share of net investment income and maintained a stable net asset value. During the quarter, we funded $14 million of investments and received $10 million of repayments, bringing the total portfolio to $340 million at fair value. On July 2, 2025, we declared our 2025 third quarter monthly dividend of $0.38 per share in the aggregate, which represents an annualized dividend yield of approximately 10%."
FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)
Three Months Ended
June 30, 2025
June 30, 2024
Amount
Per Share
Amount
Per Share
Net investment income
$3.65
$0.33
$3.86
$0.46
Net realized gain on investments
0.07
0.01
—
—
Net unrealized appreciation included in earnings
1.04
0.09
(0.41)
(0.05)
Benefit (provision) for taxes on net unrealized depreciation (appreciation) on investments
(0.02)
—
(0.04)
—
Net increase in net assets resulting from operations
$4.74
$0.43
$3.41
$0.41
Distributions
(3.93)
(0.36)
(4.08)
(0.49)
Other weighted average share adjustments(1)
—
—
—
0.01
Net asset value
$170.17
$15.29
$142.60
$15.19
Weighted average shares outstanding
10,935,215
8,310,559
(1)
Includes the impact of different share amounts as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of the period end.
PORTFOLIO ACTIVITY
($ in millions)
As of
As of
June 30, 2025
December 31, 2024
Investments at fair value
$340.4
$300.7
Total assets
$345.8
$304.8
Net assets
$170.2
$162.4
Shares outstanding
11,127,069
10,715,095
Net asset value per share
$15.29
$15.16
Three Months Ended
June 30, 2025
June 30, 2024
New investments
$14.4
$41.6
Repayments of investments
(10.2)
(3.7)
Net activity
$4.2
$37.9
As of
As of
June 30, 2025
December 31, 2024
Number of portfolio company investments
67
59
Number of debt investments
63
55
Weight average yield of debt and other income producing investments(2)
Cash
10.0 %
10.2 %
Payment-in-kind ("PIK")
0.2 %
0.2 %
Fee amortization
0.4 %
0.4 %
Total
10.6 %
10.8 %
Weighted average yield on total investments(3)
Cash
9.6 %
9.8 %
PIK
0.2 %
0.2 %
Fee amortization
0.3 %
0.3 %
Total
10.1 %
10.3 %
(2)
The dollar-weighted average annualized effective yield is computed using the effective interest rate for the Company's debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors of our common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expense or any sales load that may be paid by investors.
(3)
The dollar weighted average yield on total investments takes the same yields as calculated in the footnote above, but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing equity positions and debt investments on non-accrual status.
Results of Operations
Investment income for the three months ended June 30, 2025 and 2024 totaled $8.7 million and $6.9 million, respectively, most of which was interest income from portfolio investments.
Gross operating expenses for the three months ended June 30, 2025 and 2024 totaled $5.8 million and $4.2 million, respectively. For the same periods, base management fees totaled $1.2 million and $0.8 million, income incentive fees totaled $0.7 million and $0.7 million, respectively; capital gains incentive fees (reversals) of $0.1 million and less than ($0.01) million, which are not currently payable, respectively; fees and expenses related to the Company's borrowings totaled $3.2 million and $2.3 million (including interest and amortization of deferred financing costs), respectively; administrative expenses totaled $0.2 million and $0.1 million, respectively and other expenses totaled $0.4 million and $0.3 million, respectively. For the three months ended June 30, 2025 and 2024, the Company's investment advisor, Stellus Private BDC Advisor, LLC (the "Advisor"), waived $0.4 million and $0.8 million of management fees, respectively; $0.2 million of income incentive fees for both periods (waived as our shares were not listed on a national exchange), and $0.1 million and $0.1 million of expenses pursuant to expense support and conditional reimbursements from the Advisor, respectively, for net operating expenses of $5.1 million and $3.1 million, respectively.
For the three months ended June 30, 2025 and 2024, net investment income was $3.6 million and $3.9 million, or $0.33 and $0.46 per common share based on weighted average common shares outstanding of 10,935,215 and 8,310,559, respectively.
The Company's investment portfolio had a net change in unrealized appreciation of $1.0 million and ($0.4) million for the three months ended June 30, 2025 and 2024, respectively.
For the three months ended June 30, 2025 and 2024, net increase in net assets resulting from operations totaled $4.7 million and $3.4 million, or $0.43 and $0.41 per common share, based on weighted average common shares outstanding of 10,935,215 and 8,310,559, respectively.
Liquidity and Capital Resources
On September 30, 2022, the Company entered into a senior secured revolving credit agreement with Zions Bancorporation, N.A., dba Amegy Bank and various other lenders (the "Credit Facility" and together with the Commitment Facility and SPV Facility, the "Credit Facilities"). The Credit Facility, as amended, provides for borrowings up to a maximum of $195.0 million on a committed basis with an accordion feature that allows the Company to increase the aggregate commitments up to $200.0 million, subject to new or existing lenders agreeing to participate in the increase and other customary conditions. As of June 30, 2025 and December 31, 2024, the Company had $123.1 million and $90.5 million in outstanding borrowings under the Credit Facility, respectively.
On August 1, 2024, the Company entered into a Loan Financing and Servicing Agreement (the "Loan Agreement") for the SPV Facility by and among Stellus Private Credit BDC SPV LLC ("PBDC SPV"), as borrower, the Company, as equityholder and servicer, Deutsche Bank AG, New York Branch, as facility agent, Citibank, N.A., as collateral agent and collateral custodian, Alter Domus (US) LLC, as collateral administrator, and the lenders that are party thereto from time to time. The SPV Facility provides for $50.0 million of initial commitments with an accordion feature that allows for an additional $50.0 million of total commitments from new and existing lenders on the same terms and conditions as the existing commitments. As of both June 30, 2025 and December 31, 2024, the Company had $50.0 million in outstanding borrowings under the SPV Facility.
During the three months ended June 30, 2025, the Company sold 254,910 common shares of beneficial interest at a weighted-average price of $15.22 per share for aggregate proceeds of $3.9 million, which included less than $0.1 million of organizational expense allocation pursuant to subscription agreements entered into between the Company and investors during the three months ended June 30, 2025. Additionally, 22,609 common shares of beneficial interest were validly tendered and not withdrawn prior to the expiration of the tender offer during the three months ended June 30, 2025. On April 3, 2025, the Company purchased approximately 22,609 shares of beneficial interest validly tendered and not withdrawn prior to the expiration of the applicable tender offer, at a price equal to $15.16 per Share for an aggregate purchase price of approximately $0.3 million.
Distributions
During the three months ended June 30, 2025 and 2024, the Company declared aggregate distributions of $0.36 per share and $0.50, respectively (million and $3.9 million and $4.1 million in the aggregate, respectively). Tax characteristics of all distributions are reported to stockholders on Form 1099-DIV. Tax characteristics of all distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year. None of these dividends are expected to include a return of capital.
Recent Portfolio Activity
The Company invested in the following portfolio companies for the three months ended June 30, 2025:
Activity Type
Date
Company Name
Company Description
Investment Amount
Instrument Type
Add-On Investment
April 8, 2025
TriplePoint Acquisition Holdings LLC*
Provider of HVAC, plumbing, and other mechanical and industrial services
$
1,406,080
Senior Secured – First Lien
New Investment
April 30, 2025
Gourmet Specialty Foods, LLC
Provider of ready-to-cook value-added proteins to grocery retailers
$
1,679,781
Senior Secured – First Lien
$
1,119,854
Delayed Draw Term Loan Commitment
$
1,341,001
Revolver Commitment
$
138,021
Equity
Add-On Investment
May 5, 2025
FairWave Holdings, LLC*
Specialty coffee platform
$
7,833
Equity
Add-On Investment
May 21, 2025
The Hardenbergh Group, Inc. *
Provider of temporary professional staffing of medical services professionals, external peer review, consulting and physician leadership solutions
$
148,167
Equity
Add-On Investment
May 30, 2025
WER Holdings, LLC*
Regional provider of commercial landscaping services
$
173,605
Senior Secured – First Lien
$
962,586
Delayed Draw Term Loan Commitment
New Investment
June 3, 2025
International Cybernetics Company, LP
Provider of road condition assessment services and equipment
$
3,099,188
Senior Secured – First Lien
$
2,324,391
Delayed Draw Term Loan Commitment
$
1,486,393
Revolver Commitment
$
86,375
Equity
Add-On Investment
June 4, 2025
Eskola LLC*
Provider of commercial re-roofing services
$
31,584
Equity
New Investment
June 6, 2025
Solid Surface Care Holdings, Inc.
National commercial surface care and restoration company
$
2,239,708
Senior Secured – First Lien
$
2,299,062
Delayed Draw Term Loan Commitment
$
1,341,001
Revolver Commitment
$
220,491
Equity
*
Existing portfolio company
Events Subsequent to June 30, 2025
The Company's management has evaluated subsequent events through August 8, 2025. There have been no subsequent events that require recognition or disclosure except for the following described below.
Investment Portfolio
The Company invested in the following portfolio companies subsequent to June 30, 2025:
Activity Type
Date
Company Name
Company Description
Investment Amount
Instrument Type
Add-On Investment
July 1, 2025
Bart & Associates, LLC*
Provides IT modernization services for federal customers
$
228,049
Equity
Add-On Investment
July 28, 2025
Equine Network, LLC*
Hosts competitions and provides services for the U.S. equine industry
$
1,406,080
Senior Secured – First Lien
New Investment
July 31, 2025
The Millennium Alliance, LLC
Facilitator of peer-to-peer events connecting companies with technology solution providers
$
5,280,193
Senior Secured – First Lien
$
1,341,001
Revolver Commitment
