Nuveen Churchill Direct Lending Corp.

What they do

NCDL lends mostly first-lien senior secured debt and unitranche loans to U.S. middle market companies, defined as businesses with $10 million to $250 million of EBITDA, with a focus on the core middle market of $10 million to $100 million of EBITDA. Its investments typically pay floating interest rates and are senior in the capital structure. It also opportunistically invests in second-lien loans, subordinated debt and equity co-investments. The company is managed by Churchill DLC Advisor LLC and sub-advised by Churchill Asset Management LLC and Nuveen Asset Management, affiliates of Nuveen (TIAA's investment management division).

Revenue drivers

• First-lien debt investments — The core earnings driver, representing approximately 89.6% of portfolio fair value as of June 30, 2026; income comes from floating-rate interest on directly originated senior secured loans.
• Subordinated debt investments — Approximately 7.3% of portfolio fair value as of June 30, 2026; junior capital positions that generally carry higher yields than first-lien loans.
• Equity investments — Approximately 3.1% of portfolio fair value as of June 30, 2026; co-investments and similar equity-related securities held opportunistically alongside debt.
• Portfolio breadth — Fair value of $1.9 billion across 244 portfolio companies in 26 industries as of June 30, 2026, providing diversification across borrowers and sectors.

Recent performance

For the second quarter ended June 30, 2026, NCDL reported net investment income of $0.41 per share and net realized and unrealized losses on investments of $(0.34) per share, producing a net increase in net assets resulting from operations of $0.07 per share. NAV per share was $17.19 at June 30, 2026, down from $17.50 at March 31, 2026. The company paid a second quarter distribution of $0.38 per share on July 28, 2026. Annual net income was $65.6 million in 2025 versus $116.3 million in 2024, with diluted EPS of $1.86 versus $2.26. Operating cash flow swung to positive $194.2 million in 2025 from negative $297.2 million in 2024.

Strategy

Management emphasizes a conservative underwriting approach and access to quality deal flow in the core, traditional middle market. The company said it remains focused on maintaining a well-diversified portfolio and reinvesting repayment proceeds into high quality investments. In July 2026 it took balance sheet actions: redeeming CLO-III in full at par ($297.9 million principal, $302.5 million total proceeds collected) on July 7, forming an unconsolidated joint venture with an unaffiliated institutional investor the same day, and issuing an additional $100.0 million of existing 2030 Notes on July 10. The JV, in which NCDL committed up to $92.8 million (87.5%), acquired a $148.9 million first-lien loan portfolio from the company on July 9, 2026. Management said the additional unsecured notes increase the percentage of unsecured debt in the capital structure and that the JV should be accretive to earnings over the long term.

Risks

• Portfolio company credit deterioration — Losses on investments reduced results in the second quarter of 2026, with net realized and unrealized losses of $(0.34) per share and NAV per share declining to $17.19 from $17.50.
• Reliance on Churchill personnel and relationships — The 10-K states the company depends on the senior management of Churchill and on Churchill's referral relationships with financial institutions, sponsors and investment professionals to generate investment opportunities.
• Conflicts of interest with the Advisers and affiliates — The 10-K cites conflicts from obligations senior investment professionals owe to other clients, and states that recommendations Churchill gives to NCDL may differ from those rendered to its other clients.
• Leverage and financing risk — The company uses borrowed money to finance a portion of its investments, with long-term debt of $1.09 billion and total liabilities of $1.14 billion against $1.99 billion of total assets as of June 30, 2026.

Outlook

Management said net investment income meaningfully exceeded the regular quarterly distribution and characterized the portfolio as healthy and resilient despite market volatility. The Board declared a third quarter distribution of $0.38 per share, consisting of a regular distribution of $0.36 per share and a supplemental distribution of $0.02 per share, payable on or around October 27, 2026 to shareholders of record as of September 30, 2026. Management said the July 2026 balance sheet actions, including the additional unsecured notes and the joint venture, should strengthen the balance sheet and be accretive to earnings over the long term.