The following information was previously provided to subscribers of BDC Buzz Premium Reports along with:
- Target prices, buying points, and suggested limit orders (used during market volatility).
- Risk profile, potential credit issues, changes in NAV, and overall rankings. Please see BDC Risk Profiles for additional details.
- Dividend coverage projections (base, best, worst-case scenarios). Please see BDC Dividend Coverage Levels for additional details.
Nuveen Churchill Direct Lending (NCDL) is externally managed by its investment adviser, Churchill DLC Advisor, and by its sub-adviser, Churchill Asset Management, priced its offering of 5.5 million shares at $18.05 per share for proceeds of around $99 million.
Trading volumes are relatively low but will likely pick up after the expiration of share lock-ups (mentioned later):
The Board declared a first-quarter 2024 distribution of $0.45 per share payable on April 29, 2024, to shareholders of record as of March 30, 2024.
On January 10, 2024, the Board declared four special distributions of $0.10 per share, payable over the next year:
The average position size is 0.6% of the portfolio with the largest 10 positions comprising only 12.5% of the portfolio.
As of December 31, 2023, there were no investments on non-accrual with a weighted average internal risk rating of 4.1 (4.0 being the initial rating assigned to investments at origination).
NCDL has a higher dividend yield due to paying higher amounts relative to NAV with slightly higher than average leverage.
It has a very low fee structure similar to GBDC but with a 6.00% hurdle (higher is better). The Advisory Agreement became effective on January 29, 2024, and amended and restated the prior investment advisory agreement as follows:
- Reduced the base management fee payable by us to the Adviser following the IPO from an annual rate of 1.25% of Average Total Assets (as defined in the Advisory Agreement) to an annual rate of 0.75% of Average Total Assets for the first five quarters beginning with the calendar quarter in which the IPO was consummated (i.e., beginning with the calendar quarter ending March 31, 2024 through the calendar quarter ending March 31, 2025), and thereafter, the base management fee will step up to 1.00% of Average Total Assets
- Waived both the incentive fee on income and the incentive fee on capital gains for the first five quarters beginning with the calendar quarter in which the IPO was consummated
- The calculation of the incentive fee on income will be subject to a “three-year look back”
- The incentive fee on income will be subject to a cap equal to the difference between 15% of the Cumulative Pre-Incentive Fee Net Return (as defined in the Advisory Agreement) in respect of the current calendar quarter and the eleven preceding calendar quarters (or, if fewer, the number of calendar quarters beginning with the calendar quarter in which is the IPO was consummated) (such period, the “Trailing Twelve Quarters”) and the aggregate incentive fee on income that were paid to the Adviser by the Company in respect of the first eleven calendar quarters (or, if fewer, the number of calendar quarters beginning with the calendar quarter in which the IPO was consummated) included in the relevant Trailing Twelve Quarters
- The calculation of the incentive fee on capital gain will include cumulative aggregate realized capital gains and cumulative aggregate realized capital losses from the beginning of the calendar quarter in which the IPO was consummated.
The Advisory Agreement will remain in effect for an initial two year period from January 29, 2024, its effective date, and thereafter from year-to-year, subject to approval by the Board or a vote of a majority of the Company’s outstanding voting securities, and by approval of a majority of the independent directors.
NCDL has a staggered lockup release of its pre-IPO shareholders coupled with special dividends with affiliated shareholders locked up for a full-year and non-affiliated pre-IPO shareholders being locked up for 90, 180, and 270 days with a $100 million share repurchase program that commences 60 days post IPO.
What Can I Expect Each Week With a Paid Subscription?
Each week we provide a balance between easy-to-digest general information to make timely trading decisions supported by the detail in the Deep Dive Projection reports (for each BDC) for subscribers that are building larger BDC portfolios.
- Monday Morning Update – Before the markets open each Monday morning, we provide quick updates for the sector, including significant events for each BDC along with upcoming earnings, reporting, and ex-dividend dates. Also, we provide a list of the best-priced opportunities along with oversold/overbought conditions, and what to look for in the coming week.
- Deep Dive Projection Reports – Detailed reports on individual BDCs each week prioritized by focusing on buying opportunities and potential issues such as changes in portfolio credit quality and/or dividend coverage (usually related). This should help subscribers put together a shopping list ready for the next general market pullback.
- Weekly General Updates or Comparison Reports – A series of updates discussing ‘Building a BDC Portfolio’, suggested pricing and limit orders, expense/return ratios, interest rates, leverage, BDC Investment Grade Notes/Baby Bonds, portfolio mix, and potential impacts on dividend coverage and risk.