Stellus Private Credit BDC (Stellus PBDC or the Company) reported its financial results for the third fiscal quarter ending September 30, 2024. CEO Robert T. Ladd expressed satisfaction with the performance, highlighting a net investment income of $0.49 per share and a stable net asset value during the quarter. Stellus PBDC funded $9 million in investments and received $7 million in repayments, resulting in a portfolio valued at $257 million at fair value. On October 10, 2024, the Company declared a fourth quarter dividend of $0.48 per share, equating to an annualized yield of approximately 13%.

Additionally, the Company strengthened its capital base by upsizing its Credit Facility to $175 million. Investment income for the three months ending September 30, 2024, was $7.9 million, up from $6.1 million in the same period in 2023. This increase was primarily from interest income on portfolio investments. Gross operating expenses were $4.6 million, compared to $4.1 million in 2023. The expenses comprised base management fees of $0.9 million, income incentive fees of $0.8 million, and capital gains incentive reversal fees of ($0.1) million, among others.

The Advisor voluntarily waived certain fees, contributing to net operating expenses of $3.3 million. Net investment income was reported at $4.7 million or $0.49 per common share. The investment advisor, Stellus Private BDC Advisor, LLC, waived $0.9 million in management fees and $0.3 million in income incentive fees for the quarter. The portfolio saw a net change in unrealized depreciation of ($0.4) million, resulting in a net increase in net assets from operations totaling $4.2 million or $0.45 per share.

Regarding liquidity, Stellus PBDC has a senior secured revolving credit agreement with Zions Bancorporation and other lenders, allowing borrowings up to $200 million, with $68.6 million outstanding as of September 30, 2024. Recent activities include investments and realized investments in various portfolio companies, as well as an increase in the Credit Facility commitments to $175 million. Subsequent events through November 8, 2024, include credit facility adjustments and share sales, resulting in 19,735 common shares sold since September 30, 2024, generating $0.3 million.

An additional 10,747 shares were issued through a DRIP, contributing another $0.2 million. Stellus PBDC operates as an externally-managed, closed-end, non-diversified investment management company, regulated as a business development company. Its primary focus is on generating returns through investments in private middle-market companies by offering first and second lien loans, alongside equity co-investments. Forward-looking statements in this announcement caution of risks and uncertainties that may cause actual results to vary from expectations, and Stellus PBDC does not undertake to update such statements.