Quarterly report [Sections 13 or 15(d)]

DEBT

v3.26.1
DEBT
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
DEBT DEBT
A summary of MSC Income’s debt as of March 31, 2026 is as follows:
Outstanding Balance
Unamortized Debt Issuance
Costs (1)
Recorded Value
Estimated Fair Value (2)
(in thousands)
SPV Facility $ 267,000  $ —  $ 267,000  $ 267,000 
Corporate Facility 83,000  —  83,000  83,000 
Main Street Facility —  —  —  — 
October 2026 Notes 150,000  (174) 149,826  147,617 
May 2029 Notes 150,000  (726) 149,274  149,362 
Total Debt $ 650,000  $ (900) $ 649,100  $ 646,979 
_________________
(1)The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the Consolidated Balance Sheets, while the unamortized debt issuance costs related to the October 2026 Notes and May 2029 Notes are reflected as contra-liabilities to the October 2026 Notes and May 2029, respectively, on the Consolidated Balance Sheets.
(2)Estimated fair value for outstanding debt is shown as if MSC Income had adopted the fair value option under ASC 825, Financial Instruments (“ASC 825”). See discussion of the methods used to estimate the fair value of MSC Income’s debt in Note B.10. — Summary of Significant Accounting Policies — Fair Value of Financial Instruments.
A summary of MSC Income’s debt as of December 31, 2025 is as follows:
Outstanding Balance
Unamortized Debt Issuance Costs (1)
 Recorded Value
Estimated Fair Value (2)
(in thousands)
SPV Facility $ 244,000  $ —  $ 244,000  $ 244,000 
Corporate Facility 209,000  —  209,000  209,000 
October 2026 Notes 150,000  (249) 149,751  146,936 
Total Debt $ 603,000  $ (249) $ 602,751  $ 599,936 
___________________
(1)The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the Consolidated Balance Sheets, while the unamortized debt issuance costs related to the October 2026 Notes are reflected as a contra-liability to the October 2026 Notes on the Consolidated Balance Sheets.
(2)Estimated fair value for outstanding debt is shown as if MSC Income had adopted the fair value option under ASC 825. See discussion of the methods used to estimate the fair value of MSC Income’s debt in Note B.10. — Summary of Significant Accounting Policies — Fair Value of Financial Instruments.
A summary of MSC Income’s interest expense for the three months ended March 31, 2026 and 2025 is as follows:
Three Months Ended March 31,
2026 2025
(in thousands)
SPV Facility $ 3,937  $ 4,796 
Corporate Facility 2,843  1,857 
Main Street Facility
 63  — 
October 2026 Notes 1,590  1,590 
May 2029 Notes 487  — 
Total Interest Expense $ 8,920  $ 8,243 
A summary of MSC Income’s weighted-average amount of total borrowings outstanding and overall weighted-average effective interest rate including amortization of debt issuance costs, original issuance discounts and premiums and fees on unused lender commitments for the three months ended March 31, 2026 and 2025 is as follows:
Three Months Ended March 31,
2026 2025
(dollars in millions)
Weighted-average borrowings outstanding $ 625.9  $ 511.8 
Weighted-average effective interest rate 5.7  % 6.4  %
SPV Facility
MSC Income, through MSIF Funding, LLC (“MSIF Funding”), a wholly-owned Structured Subsidiary that primarily holds debt investments, maintains a special purpose vehicle revolving credit facility dated February 3, 2021 (as amended, the “SPV Facility”) with JPMorgan Chase Bank, National Association (“JPM”), as administrative agent, and U.S. Bank, N.A., as collateral agent and collateral administrator, JPM and other financial institutions as lenders and MSIF as portfolio manager.
As of March 31, 2026, the SPV Facility included (i) total commitments of $300.0 million, (ii) an accordion feature with the right to request an increase of total commitments and borrowing availability up to $450.0 million and (iii) a revolving period through February 2029 and a final maturity date in February 2030. As of March 31, 2026, advances under the SPV Facility bore interest at a rate equal to the applicable SOFR in effect, plus a margin of 2.20%. MSIF Funding also pays a commitment fee of 0.75% on the average daily unused amount of the financing commitments until February 2029. The SPV Facility is secured by a first lien on the assets of MSIF Funding. Borrowing availability under the SPV Facility is subject to certain leverage and borrowing base limitations, covenants, reporting and other requirements customary for similar credit facilities.
As of March 31, 2026, the interest rate for borrowings on the SPV Facility was 5.86%. The average interest rate for borrowings under the SPV Facility was 5.86% and 7.24% for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, MSC Income was in compliance with all financial covenants of the SPV Facility.
Corporate Facility
MSC Income maintains a senior secured revolving credit agreement dated March 6, 2017 (as amended, the “Corporate Facility”) with EverBank, as administrative agent, and with EverBank and other financial institutions as lenders.
As of March 31, 2026, the Corporate Facility included (i) total commitments of $245.0 million from a diversified group of seven lenders, (ii) an accordion feature with the right to request an increase in commitments under the facility from new and existing lenders on the same terms and conditions as the existing commitments up to $300.0 million of total commitments and (iii) a revolving period through November 2028 and a final maturity date in May 2029, with two one-year extension options subject to lender approval.
Borrowings under the Corporate Facility bear interest, subject to MSC Income’s election, at a rate equal to (i) SOFR plus 2.05% or (ii) the base rate plus 1.05%. The base rate is defined as the higher of (a) the Prime rate, (b) the federal funds rate plus 0.5% or (c) SOFR plus 1.0%. Additionally, MSC Income pays an unused commitment fee of 0.25% on the unused lender commitments if 50% or more of the lender commitments are being used and an unused commitment fee of 0.375% on the unused lender commitments if less than 50% of the lender commitments are being used. Borrowings under the Corporate Facility are secured by a first lien on all of the assets of MSIF and its subsidiaries, excluding the assets of Structured Subsidiaries or immaterial subsidiaries, as well as all of the assets, and a pledge of equity ownership interests, of any future subsidiaries of MSIF (other than Structured Subsidiaries or immaterial subsidiaries). Borrowing availability under the Corporate Facility is subject to certain leverage and borrowing base limitations, covenants, reporting and other requirements customary for similar credit facilities.
As of March 31, 2026, the interest rate for borrowings on the Corporate Facility was 5.72%. The average interest rate for borrowings under the Corporate Facility was 5.74% and 6.38% for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, MSC Income was in compliance with all financial covenants of the Corporate Facility.
Main Street Facility
On February 26, 2026, Main Street provided MSC Income with a revolving line of credit pursuant to an Unsecured Revolving Promissory Note (as amended, restated or otherwise modified, the “Main Street Facility” and, together with the SPV Facility and the Corporate Facility, the “Credit Facilities”), which currently provides for borrowings up to $30.0 million. Borrowings under the Main Street Facility bear interest at a rate of SOFR plus 4.5%, subject to a 2.0% SOFR floor and mature in December 2029. Available borrowings under the Main Street Facility are subject to a 0.25% non-use fee. The borrowings under the Main Street Facility are unsecured. As of March 31, 2026, there were no borrowings outstanding under the Main Street Facility.
October 2026 Notes
Pursuant to a Master Note Purchase Agreement dated October 22, 2021 (the “October 2026 Note Purchase Agreement”), MSC Income issued $77.5 million in aggregate principal amount of 4.04% Series A Senior Notes due 2026 (the “October 2026 Notes”) upon entering into the October 2026 Note Purchase Agreement and an additional $72.5 million aggregate principal amount on January 21, 2022. The October 2026 Notes bear a fixed interest rate of 4.04% per year and mature on October 30, 2026, unless redeemed, purchased or prepaid prior to such date by the Fund in accordance with their terms.
Interest on the October 2026 Notes is due semiannually on April 30 and October 30 of each year. The October 2026 Notes may be redeemed in whole or in part at any time at MSC Income’s option subject to certain make-whole provisions. In addition, MSC Income is obligated to offer to prepay the October 2026 Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. In the event that a Below Investment Grade Event (as defined in the October 2026 Note Purchase Agreement) occurs, the October 2026 Notes will bear interest at a fixed rate of 5.04% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event ends. The October 2026 Notes are general unsecured obligations of MSIF and its subsidiary guarantors that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by MSIF and its subsidiary guarantors.
The October 2026 Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of MSIF or subsidiary guarantors subject to a cure pass-through, certain judgments and orders and certain events of bankruptcy. As of March 31, 2026, MSC Income was in compliance with all covenants and other requirements of the October 2026 Notes.
May 2029 Notes
Pursuant to a Master Note Purchase Agreement dated March 12, 2026 (the “May 2029 Note Purchase Agreement”), MSC Income issued $150.0 million in aggregate principal amount of 6.34% Series A Senior Notes due 2029 (the “May 2029 Notes”). The May 2029 Notes bear a fixed interest rate of 6.34% per year and mature on May 31, 2029, unless redeemed, purchased or prepaid prior to such date by the Fund in accordance with their terms.
Interest on the May 2029 Notes is due semiannually on November 30 and May 31 of each year, beginning on November 30, 2026. The May 2029 Notes may be redeemed in whole or in part at any time at MSC Income’s option subject to certain make-whole provisions. In addition, MSC Income is obligated to offer to prepay the May 2029 Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. In the event of a Below Investment Grade Event, a Secured Debt Ratio Event and/or an Unsecured Debt Coverage Ratio Event (each as defined in the May 2029 Note Purchase Agreement), the May 2029 Notes will bear interest at an increased rate from the date of the occurrence of the Below Investment Grade Event, Secured Debt Ratio Event and/or Unsecured Debt Coverage Ratio Event to and until the date on which the Below Investment Grade Event, Secured Debt Ratio Event and/or Unsecured Debt Coverage Ratio Event ends. The May 2029 Notes are general unsecured obligations of MSIF and its subsidiary guarantors that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by MSIF and its subsidiary guarantors.
The May 2029 Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of
covenant, cross-default under other indebtedness of MSIF or subsidiary guarantors subject to a cure pass-through, certain judgments and orders and certain events of bankruptcy. As of March 31, 2026, MSC Income was in compliance with all covenants and other requirements of the May 2029 Notes.