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Stellus Private Credit BDC Reports Strong Financial Performance for Q2 2026

Stellus Private Credit BDC, a prominent investment management firm, has announced its impressive financial results for the second fiscal quarter that ended on June 30, 2026. The firm revealed that it generated a net investment income of $3.70 million, translating to $0.28 per share, while also achieving an increase in its net asset value. These results are indicative of Stellus PBDC's commitment to delivering value to its shareholders, even in a fluctuating economic landscape.

Financial Highlights

The operating results for the quarter are noteworthy:

• - Net Investment Income: $3.70 million ($0.28 per share) compared to $3.65 million ($0.33 per share) for the previous year.
• - Net Realized Gains: There was a loss of $3.79 million during this quarter, contrasting with a gain of $0.07 million last year.
• - Net Unrealized Appreciation: The company reported $6.25 million, showing a significant rise from $1.04 million from the same timeframe last year.
• - Distributions: Stellus declared a third-quarter dividend of $0.31 per share, indicating a proactive approach to shareholder returns.

Over the quarter, Stellus funded an impressive $37 million in new investments while also receiving $26 million in repayments, leaving the total portfolio value at $420 million based on fair value metrics. This diversified investment approach demonstrates Stellus's strategic readiness to capitalize on market opportunities while managing risk effectively.

Moreover, the firm increased its shares outstanding from 10.93 million to 13.19 million, showcasing its capacity to attract investor confidence and support for its growth initiatives.

Portfolio Activity

New investments during this quarter highlight Stellus's focus on mid-market companies, which tend to show resilience and growth potential. Some notable transactions included:

• - A $7.8 million investment in VeloSource Purchaser, LLC, a staffing agency, highlighting a commitment to sectors with sustainable demand.
• - Additional investments included $2.7 million into Solomon AcquisitionCo, LLC, a process automation firm, and $6.5 million for OW RSG LLC, a manufacturer of refrigeration systems.

The total investments in the quarter amount to over $36 million, reflecting Stellus’s strategy of investing in diverse industries that promise healthy yields and valuation prospects.

However, the company also experienced some challenges, with a net realized loss on investments of $3.81 million compared to a gain in the previous fiscal year. This fluctuation emphasizes the dynamic nature of the investment landscape and Stellus's dedication to realignment and recovery in its portfolio composition.

Liquidity and Capital Resources

To ensure operational liquidity, Stellus has leveraged a senior secured revolving credit agreement with Zions Bancorporation, allowing for manageable borrowing up to $300 million. As of June 30, 2026, Stellus had approximately $141 million in outstanding borrowings, indicating prudent management of capital resources in alignment with its operational needs.

Looking Ahead

As the company continues into the next quarters, Stellus is poised to capitalize on emerging market trends while maintaining a vigilant approach toward fiscal prudence. By focusing on generating higher investment returns and mitigating risks, Stellus aims to sustain its shareholder value and remain a key player in the private credit market.

The next few quarters will offer significant opportunities for Stellus to enhance its investment portfolio further and continue reporting positive operating results. Investors and market participants should monitor Stellus' activity closely, as the company embodies a blend of ambition and strategy that could translate into substantial growth.

In summary, Stellus Private Credit BDC’s strong financial results for the second quarter are a positive testament to its performance amidst challenges, showcasing a commitment to strategic growth and shareholder returns. With a strengthened portfolio and proactive capital management, Stellus Private Credit BDC remains a formidable entity in the investment landscape.