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Stellus Private Credit BDC Reports Solid Financial Performance in Q2 2025

On August 8, 2025, Stellus Private Credit BDC, commonly referred to as Stellus PBDC, released its financial results for the second fiscal quarter that ended on June 30, 2025. The report highlighted the company's stable operation and successful investment strategies during this quarter.

Financial Highlights

Chief Executive Officer Robert T. Ladd expressed satisfaction with the results, stating that the company achieved a net investment income of $3.65 million, translating to $0.33 per share. The net asset value remained stable, underscoring the company's robust financial health amid varying market conditions. Stellus PBDC's investment portfolio saw exciting movements, with $14 million allocated to new investments during the quarter and repayment of $10 million, which broadened their total portfolio value to $340 million at fair value.

The board also declared a monthly dividend of $0.38 per share on July 2, 2025, reflecting an impressive 10% annualized yield for investors, maintaining a continuous return strategy even in fluctuating markets.

Financial Comparison: Q2 2025 vs. Q2 2024

These numbers reveal a slight decrease in net investment income per share compared to the same quarter last year. Despite this, the overall operations saw a $4.74 million increase in net assets due to strong operating results.

Portfolio Activity Overview

As of June 30, 2025, Stellus had successfully executed 67 portfolio company investments, which represented a diverse range of industries. Notably, new investments included sectors like HVAC services, specialty foods, and cybernetics, indicating a strategic push towards sectors with high growth potential.

The company’s operations include a significant focus on debt investments, with their weighted average yield on total investments standing at an impressive 10.1%. These figures underscore Stellus PBDC's commitment to finding high-return opportunities while managing investment risk sufficiently.

Investment advisor Stellus Private BDC Advisor, LLC, has played a crucial role in bolstering the company's investment strategy, leading to a net change in unrealized appreciation of $1 million this quarter compared to a loss in the previous year.

Liquidity and Capital Management

Stellus has also maintained its liquidity through proactive management of its credit facilities. As of June 30, 2025, the company had outstanding borrowings of $123.1 million against its senior secured revolving credit agreement. This puts Stellus in a favorable position to leverage market opportunities while maintaining a healthy balance sheet.

The company has demonstrated a differentiated approach to capital management, utilizing debt strategically to enhance its portfolio's growth potential without over-leveraging its assets. During this quarter, the company sold 254,910 shares at a weighted average price of $15.22.

Looking Ahead

Looking forward, Stellus intends to continue focusing on lower middle-market companies and private sector investments to maximize stockholder returns through its investment activities. The management remains optimistic about the upcoming quarter, aiming to maintain the momentum established in Q2 2025 while navigating potential market fluctuations.

In conclusion, Stellus Private Credit BDC's Q2 2025 results reflect a solid financial foundation and an active investment strategy that prioritizes sustainable growth. The company's ability to generate consistent returns for stakeholders while expanding its investment portfolio marks it as a robust player in the private credit space. Investors can anticipate continued performance and regular dividend payouts in the coming months.