Quarterly report [Sections 13 or 15(d)]

FAIR VALUE HIERARCHY FOR INVESTMENTS???PORTFOLIO COMPOSITION (Tables)

v3.26.1
FAIR VALUE HIERARCHY FOR INVESTMENTS—PORTFOLIO COMPOSITION (Tables)
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Measurement Inputs and Valuation Techniques
A summary of the significant unobservable inputs used in the fair value measurement of MSC Income’s Level 3 portfolio investments as of March 31, 2026 and December 31, 2025 is as follows:
Type of
Investment
Fair Value as of
March 31,
2026
(in thousands)
 Valuation Technique Significant
Unobservable Inputs		 Range (3) Weighted-Average
(3)(4)		 Median (3)
Equity investments $ 317,983  Discounted cash flow WACC
11.4% - 22.3%
 14.6% 15.1%
Market comparable / Enterprise value EBITDA multiple (1)
5.0x - 9.0x (2)
 7.3x 7.0x
Debt investments $ 1,046,617  Discounted cash flow Risk adjusted discount rate (5)
7.5% - 18.0% (2)
 12.2% 11.3%
Expected principal recovery percentage
0.1% - 500.0%
 99.9% 100.0%
Debt investments $ 4,602  Market approach Third-party quote
14.5 - 61.4
 44.7 41.2
Total Level 3 investments $ 1,369,202 
_____________________
(1)EBITDA may include pro forma adjustments and/or other add-backs based on specific circumstances related to each investment.
(2)Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 2.0x - 13.5x and the range for risk adjusted discount rate is 5.4% - 32.6%.
(3)Does not include investments for which the valuation technique does not include the use of the applicable fair value input.
(4)Weighted-Average is calculated for each significant unobservable input based on the applicable security’s fair value.
(5)Discount rate includes the effect of the standard SOFR base rate, as applicable.
Type of
Investment
Fair Value as of
December 31, 2025
(in thousands)
 Valuation Technique Significant
Unobservable Inputs		 Range (3) Weighted-Average
(3)(4)		 Median (3)
Equity investments $ 317,892  Discounted cash flow WACC
11.4% - 22.2%
 14.5% 15.0%
Market comparable / Enterprise value EBITDA multiple (1)
5.0x - 8.9x (2)
 7.1x 7.0x
Debt investments $ 1,012,883  Discounted cash flow Risk adjusted discount rate (5)
7.5% - 18.0% (2)
 12.0% 11.3%
Expected principal recovery percentage
0.0% - 500.0%
 100.0% 100.0%
Debt investments $ 4,612  Market approach Third-party quote
14.5 - 63.0
 45.1 40.8
Total Level 3 investments $ 1,335,387 
_____________________
(1)EBITDA may include pro forma adjustments and/or other add-backs based on specific circumstances related to each investment.
(2)Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 1.2x - 13.5x and the range for risk adjusted discount rate is 5.4% - 40.4%.
(3)Does not include investments for which the valuation technique does not include the use of the applicable fair value input.
(4)Weighted-Average is calculated for each significant unobservable input based on the applicable security’s fair value.
(5)Discount rate includes the effect of the standard SOFR base rate, as applicable.
Schedule of MSC Income Fund’s Level 3 Portfolio Investments
A summary of changes in the fair value of MSC Income’s Level 3 portfolio investments for the three months ended March 31, 2026 and 2025 is as follows (in thousands):
Type of
Investment
Fair Value
as of
December 31,
2025
 Transfers
Into (Out of)
Level 3
Hierarchy		 Redemptions/
Repayments		 New
Investments		 Net
Changes
from
Unrealized
to Realized		 Net
Unrealized
Appreciation
(Depreciation)		 Other (1)
Fair Value
as of
March 31,
2026
Debt $ 1,017,495  $ —  $ (33,081) $ 75,643  $ (656) $ (8,162) $ (20) $ 1,051,219 
Equity 310,102  —  (8,470) 2,516  676  5,449  20  310,293 
Equity Warrant 7,790  —  —  —  —  (100) —  7,690 
$ 1,335,387  $ —  $ (41,551) $ 78,159  $ 20  $ (2,813) $ —  $ 1,369,202 
______________________
(1)Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information in the Consolidated Statements of Cash Flows.
Type of
Investment
Fair Value
as of
December 31,
2024
 Transfers
Into (Out of)
Level 3
Hierarchy		 Redemptions/
Repayments		 New
Investments		 Net
Changes
from
Unrealized
to Realized		 Net
Unrealized
Appreciation
(Depreciation)		 Other (1)
Fair Value
as of
March 31,
2025
Debt $ 895,676  $ —  $ (74,862) $ 144,667  $ 23,520  $ (7,955) $ (11,612) $ 969,434 
Equity 277,553  —  (6,617) 1,397  (2,289) 4,295  11,612  285,951 
Equity Warrant 4,278  —  —  —  —  1,190  —  5,468 
$ 1,177,507  $ —  $ (81,479) $ 146,064  $ 21,231  $ (2,470) $ —  $ 1,260,853 
_____________________
(1)Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information in the Consolidated Statements of Cash Flows.
Schedule of MSC Income Fund's Investments at Fair Value Hierarchy
As of March 31, 2026 and December 31, 2025, MSC Income’s investments at fair value were categorized as follows in the fair value hierarchy for ASC 820 purposes:
Fair Value Measurements
(in thousands)
March 31, 2026
 Fair Value Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		 Significant Other
Observable Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)
Private Loan portfolio investments $ 823,061  $ —  $ —  $ 823,061 
LMM portfolio investments 507,583  —  —  507,583 
Middle Market portfolio investments 22,995  —  —  22,995 
Other Portfolio investments 15,563  —  —  15,563 
Total investments $ 1,369,202  $ —  $ —  $ 1,369,202 
Fair Value Measurements
(in thousands)
December 31, 2025
 Fair Value Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		 Significant Other
Observable Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)
Private Loan portfolio investments $ 808,957  $ —  $ —  $ 808,957 
LMM portfolio investments 487,593  —  —  487,593 
Middle Market portfolio investments 23,307  —  —  23,307 
Other Portfolio investments 15,530  —  —  15,530 
Total investments $ 1,335,387  $ —  $ —  $ 1,335,387 
Schedule of Investment Holdings
A summary of MSC Income’s Private Loan and LMM portfolio investments as of March 31, 2026 and December 31, 2025 is as follows (this information excludes Middle Market and Other Portfolio investments, which are discussed further below):
March 31, 2026
Private Loan LMM (a)
(dollars in millions)
Number of portfolio companies 80  55 
Fair value $ 823.1  $ 507.6 
Cost $ 843.1  $ 399.7 
Debt investments as a % of portfolio (at cost) 93.1  % 71.3  %
Equity investments as a % of portfolio (at cost) 6.9  % 28.7  %
% of debt investments at cost secured by first priority lien 99.5  % 99.9  %
Weighted-average annual effective yield (b) 10.5  % 12.6  %
Average EBITDA (c) $ 30.6  $ 12.1 
___________________
(a)As of March 31, 2026, MSC Income had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 8%.
(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments as of March 31, 2026, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt investments and any debt investments on non-accrual status, and are weighted based upon the principal amount of each applicable debt investment as of March 31, 2026. The weighted-average annual effective yield on MSC Income’s debt portfolio as of March 31, 2026, including debt investments on non-accrual status, was 10.1% for its Private Loan portfolio investments and 11.9% for its LMM portfolio investments. The weighted-average annual effective yield is not reflective of what an investor in shares of MSC Income’s common stock will realize on their investment because it does not reflect changes in the market value of MSC Income’s stock, MSC Income’s utilization of debt capital in its capital structure, MSC Income’s expenses or any sales load paid by an investor.
(c)The average EBITDA is calculated using a weighted-average for Private Loan portfolio companies and a simple average for LMM portfolio companies. These calculations exclude certain portfolio companies, including four Private Loan portfolio companies and three LMM portfolio companies, as EBITDA is not a meaningful valuation metric for MSC Income’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate and those portfolio companies whose primary operations have ceased and only residual value remains.
December 31, 2025
Private Loan LMM (a)
(dollars in millions)
Number of portfolio companies 81  55 
Fair value $ 809.0  $ 487.6 
Cost $ 821.7  $ 384.8 
Debt investments as a % of portfolio (at cost) 92.1  % 70.6  %
Equity investments as a % of portfolio (at cost) 7.9  % 29.4  %
% of debt investments at cost secured by first priority lien 99.9  % 99.9  %
Weighted-average annual effective yield (b) 10.7  % 12.4  %
Average EBITDA (c) $ 30.0  $ 11.7 
___________________
(a)As of December 31, 2025, MSC Income had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 8%.
(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments as of December 31, 2025, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt investments and any debt investments on non-accrual status, and are weighted based upon the principal amount of each applicable debt investment as of December 31, 2025. The weighted-average annual effective yield on MSC Income’s debt portfolio as of December 31, 2025, including debt investments on non-accrual status, was 10.3% for its Private Loan portfolio investments and 11.7% for its LMM portfolio investments. The weighted-average annual effective yield is not reflective of what an investor in shares of MSC Income’s common stock will realize on their investment because it does not reflect changes in the market value of MSC Income’s stock, MSC Income’s utilization of debt capital in its capital structure, MSC Income’s expenses or any sales load paid by an investor.
(c)The average EBITDA is calculated using a weighted-average for Private Loan portfolio companies and a simple average for LMM portfolio companies. These calculations exclude certain portfolio companies, including four Private Loan portfolio companies and three LMM portfolio companies, as EBITDA is not a meaningful valuation metric for MSC Income’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate and those portfolio companies whose primary operations have ceased and only residual value remains.
The composition of MSC Income’s total combined Private Loan, LMM and Middle Market portfolio investments at cost and fair value by type of investment as a percentage of the total combined Private Loan, LMM and Middle Market portfolio investments, as of March 31, 2026 and December 31, 2025, is as follows (this information excludes Other Portfolio investments, which are discussed above):
Cost: March 31, 2026 December 31, 2025
First lien debt 85.6  % 85.1  %
Equity 13.9  14.7 
Second lien debt 0.3  — 
Equity warrants 0.2  0.2 
Other —  — 
100.0  % 100.0  %
Fair Value: March 31, 2026 December 31, 2025
First lien debt 77.3  % 77.1  %
Equity 21.8  22.3 
Second lien debt 0.3  — 
Equity warrants 0.6  0.6 
Other —  — 
100.0  % 100.0  %
MSC Income’s Private Loan, LMM and Middle Market portfolio companies are located primarily in the U.S. The geographic composition is determined by the location of the corporate headquarters of the portfolio company. The composition of MSC Income’s total combined Private Loan, LMM and Middle Market portfolio investments by geographic region of the U.S. and other countries at cost and fair value as a percentage of the total combined Private Loan, LMM and Middle Market portfolio investments, as of March 31, 2026 and December 31, 2025, is as follows (this information excludes Other Portfolio investments):
Cost: March 31, 2026 December 31, 2025
West 22.0  % 22.0  %
Midwest 20.6  20.9 
Southeast 19.2  18.5 
Southwest 18.9  19.4 
Northeast 15.3  15.1 
Canada 3.1  3.1 
Other Non-U.S. 0.9  1.0 
100.0  % 100.0  %
Fair Value: March 31, 2026 December 31, 2025
West 22.3  % 22.3  %
Southwest 21.3  21.8 
Midwest 21.2  21.2 
Southeast 17.0  16.5 
Northeast 14.3  14.3 
Canada 3.0  2.9 
Other Non-U.S. 0.9  1.0 
100.0  % 100.0  %
MSC Income’s Private Loan, LMM and Middle Market portfolio investments are in companies conducting business in a variety of industries. The composition of MSC Income’s total combined Private Loan, LMM and Middle Market portfolio investments by industry at cost and fair value, as of March 31, 2026 and December 31, 2025, is as follows (this information excludes Other Portfolio investments):
Cost: March 31, 2026 December 31, 2025
Electrical Equipment 9.9  % 9.5  %
Machinery 6.5  6.9 
Commercial Services & Supplies 5.8  7.4 
Professional Services 5.7  5.9 
Construction & Engineering 4.9  5.0 
Aerospace & Defense 4.6  2.2 
Distributors 4.5  4.5 
Diversified Consumer Services 4.4  4.6 
IT Services 4.3  4.4 
Internet Software & Services 4.2  4.4 
Containers & Packaging 4.1  4.2 
Health Care Providers & Services 3.4  3.4 
Chemicals 3.1  3.2 
Leisure Equipment & Products 3.1  3.1 
Auto Components 2.7  2.8 
Hotels, Restaurants & Leisure 2.6  2.7 
Textiles, Apparel & Luxury Goods 2.4  2.5 
Air Freight & Logistics 2.3  1.9 
Specialty Retail 2.3  2.3 
Communications Equipment 2.2  2.2 
Computers & Peripherals 1.9  1.8 
Software 1.6  1.6 
Marine 1.5  1.5 
Energy Equipment & Services 1.5  1.5 
Internet & Catalog Retail 1.4  1.4 
Trading Companies & Distributors 1.3  1.4 
Media 1.3  1.0 
Food & Staples Retailing 1.2  1.2 
Household Products 1.2  1.3 
Beverages 1.0  1.0 
Diversified Financial Services 1.0  1.0 
Other (1) 2.1  2.2 
100.0  % 100.0  %
___________________
(1)Includes various industries with each industry individually representing less than 1.0% of the total combined Private Loan, LMM and Middle Market portfolio investments at each date.
Fair Value: March 31, 2026 December 31, 2025
Electrical Equipment 10.7  % 9.8  %
Machinery 7.8  8.0 
Professional Services 5.6  5.8 
Construction & Engineering 5.5  5.8 
Distributors 5.3  5.3 
Diversified Consumer Services 4.8  5.0 
Commercial Services & Supplies 4.7  6.6 
IT Services 4.5  4.7 
Aerospace & Defense 4.4  2.1 
Containers & Packaging 4.4  4.5 
Computers & Peripherals 3.6  3.5 
Internet Software & Services 3.3  3.5 
Chemicals 2.9  3.0 
Health Care Providers & Services 2.9  3.0 
Auto Components 2.8  2.7 
Textiles, Apparel & Luxury Goods 2.4  2.5 
Leisure Equipment & Products 2.3  2.4 
Air Freight & Logistics 2.2  1.8 
Communications Equipment 2.1  2.1 
Specialty Retail 2.1  2.2 
Software 2.0  2.0 
Energy Equipment & Services 1.4  1.5 
Media 1.4  1.0 
Marine 1.4  1.4 
Trading Companies & Distributors 1.2  1.3 
Household Products 1.2  1.3 
Hotels, Restaurants & Leisure 1.1  1.4 
Beverages 1.0  0.9 
Food & Staples Retailing 1.0  1.0 
Diversified Financial Services 1.0  1.0 
Other (1) 3.0  2.9 
100.0  % 100.0  %
___________________
(1)Includes various industries with each industry individually representing less than 1.0% of the total combined Private Loan, LMM and Middle Market portfolio investments at each date.