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Stellus Private Credit BDC Delivers Strong Year-End Financial Results

On March 6, 2025, Stellus Private Credit BDC (Stellus PBDC) announced its financial outcomes for the fourth quarter and the full year ending December 31, 2024. Chief Executive Officer Robert T. Ladd expressed satisfaction with the results, highlighting a net investment income of $3.49 million for the quarter, translating to $0.37 per share. The company maintained a consistent net asset value, reflecting its strategic approach to investments and asset management.

Financial Overview

During the last quarter, Stellus PBDC financed $53 million in investments while receiving $11 million from repayments, boosting its total portfolio value to an impressive $301 million at fair value. Such performance is indicative of a robust investment strategy aimed at maximizing returns for shareholders. The firm also declared its first quarterly dividend for 2025, amounting to $0.36 per share, demonstrating its commitment to returning value to its investors.

Financial Highlights:
Q4 Results (for three months ending December 31, 2024):

• - Net investment income: $3.49 million ($0.37 per share)
• - Net realized gains on investments: $0.01 million
• - Net unrealized appreciation: $1.39 million
• - Net increase in net assets resulting from operations: $4.81 million

Annual Performance

For the entire 2024 fiscal year, Stellus PBDC reported a total net investment income of $15.57 million or $1.80 per share, marking a significant improvement from the previous year's figures. This annual growth reflects effective management and a favorable operating environment. The distribution for the year totaled $16.96 million, highlighting the company’s sustainability in yielding attractive returns to its stakeholders.

Annual Results (for the year ending December 31, 2024):

• - Total investment income: $29.04 million
• - Total operating expenses: $17.72 million
• - Net Investment Income: $15.57 million ($1.80 per share)

Strategic Investments

Stellus PBDC's portfolio activity soared over the year, with 59 portfolio company investments and a total investment value at fair value reaching $300.7 million. The company's investment approach focuses on private lower middle-market firms, particularly emphasizing first-lien loans complemented by equity co-investments. Weighted average yields on debt and income-producing investments averaged 10.3%, showcasing strong profitability metrics.

Notable Investments During Q4 2024:

• - Compost 360 Acquisition, LLC: $40,880 (Equity)
• - Norplex Micarta Acquisition, Inc.: $5.97 million (Senior Secured First Lien)
• - Spectra Confectionary Ltd.: $2.13 million (Senior Secured First Lien)

These investments indicate Stellus PBDC's commitment to diversifying its portfolio while targeting sectors with growth potential. The company’s active trading of investments, including recent full repayments, illustrates a proactive management strategy centered on liquidity and capital deployment.

Liquidity and Future Outlook

Regarding the liquidity position, Stellus PBDC's collaboration with Zions Bancorporation under a revolving credit facility facilitates up to $175 million in borrowings. This arrangement supports ongoing investment opportunities while assisting with operational expenses. As of the year-end, the total liabilities remained manageable at $142.41 million, contrasted with total assets of $304.79 million, ensuring a favorable leverage position.

With an ongoing commitment to enhancing shareholder value, Stellus PBDC will continue to leverage its investment philosophy in tapping into lower middle-market opportunities. The firm anticipates further growth into 2025, maintaining a favorable outlook towards delivering substantial returns while steering clear of risks associated with the economic landscape.

In conclusion, Stellus Private Credit BDC's financial resilience, notable investments, and strategic planning position the firm favorably for future growth and sustained return on investment, making it an attractive choice for investors looking to capitalize on private credit opportunities.