CION Investment Corp

What they do

CION is a BDC that invests mainly in senior secured debt (first lien, second lien, unitranche) of private, thinly traded U.S. middle-market companies, with a minority in unsecured debt, equity, and structured products. It is externally managed by CIM, an affiliate, and aims to generate current income and some capital appreciation. As of June 30, 2026, it held $1.65 billion in investments across 82 portfolio companies.

Revenue drivers

• Senior secured first lien investments — 79.2% of the portfolio at fair value as of June 30, 2026; primary source of interest income.
• Interest on debt investments — Portfolio consists mostly of floating-rate loans; interest income drives net investment income.
• Other income and fees — Includes prepayment premiums, dividend income from equity investments, and other fee income.

Recent performance

For Q2 2026, net investment income was $0.29 per share, earnings per share $0.62, and NAV per share rose 3.5% to $13.57. Total investments at fair value were $1.65 billion, down from $1.70 billion at Q1 2026, mainly due to $157 million in sales/repayments versus $54 million in new commitments. Non-accruals improved to 1.44% of fair value (4.41% of cost) from 1.53% and 5.35% respectively. The company repurchased 1.1 million shares in Q2 at $7.28 average; total buybacks under its 10b5-1 plan reached 7.76 million shares for $73.2 million. Annual net income has declined from $118.8M in 2021 to -$20.6M in 2025.

Strategy

Management continues a deleveraging strategy, reducing net debt-to-equity from 1.62x to 1.52x in Q2 2026. The board increased the share repurchase authorization by $50 million to $130 million, reflecting conviction that the stock trades below NAV. The company is also issuing new unsecured notes to manage its capital structure, including $28 million of 8.00% 2031 notes issued in July 2026. Focus remains on senior secured first lien investments to defend the portfolio.

Risks

• Credit risk on non-accruals — Non-accrual investments were 4.41% of amortized cost as of June 30, 2026, which can reduce income and lead to losses.
• Interest rate sensitivity — Most debt is floating-rate, so changes in SOFR or other benchmarks directly affect net investment income.
• Leverage and liquidity — Total debt of $1.17 billion against $667.8 million equity, with cash only $7.7 million, requiring continued access to credit facilities and note issuances.
• Concentration in middle-market companies — These borrowers are more susceptible to economic downturns, tariffs, inflation, and high interest rates.

Outlook

Management believes the stock is significantly undervalued versus NAV and is prepared to continue repurchases. They expect to maintain a deleveraging posture, as evidenced by $125 million in JPM facility repayments in July 2026. The company declared base distributions of $0.10 per share for each of October, November, and December 2026. They see no new risk rating downgrades and lower non-accruals as positive indicators.