NCDL 2026년 3분기 실적 발표 콘퍼런스 콜: 합작투자 확장에 따른 신규 대출 반등

핵심 요약

• 주당 순투자소득은 0.38달러, 조정 주당 순투자소득은 0.39달러를 기록해 정기 분기 배당금인 주당 0.36달러를 충분히 상회했습니다.
• 이사회는 주당 0.36달러의 정기 배당금과 0.02달러의 보충 배당금으로 구성된 주당 0.38달러의 4분기 배당금을 의결했습니다.
• 신규 합작법인(JV) 설립과 거래 활동 회복에 힘입어 총 신규 투자 규모가 2분기 1,210만 달러에서 2억 1,330만 달러로 증가했습니다.
• 주당 순자산가치(NAV)는 전 분기 대비 0.3% 감소한 17.13달러를 기록했습니다. GAAP 기준 총순이익은 주당 0.07달러에서 0.32달러로 증가했습니다.
• 이자 미수계상(Nonaccrual) 비중은 포트폴리오 공정가치의 1.5%로 유지되었으나, 관찰 대상(Watch list) 비중은 10.8%에서 11.6%로 상승했습니다.
• 경영진은 합작법인의 포트폴리오 규모가 약 3억 달러까지 확대될 것으로 예상하고 있으며, BDC 차원의 부채비율(Debt-to-equity)을 목표 범위인 1.0~1.25배의 상단 수준으로 계속 유지한다는 목표를 세우고 있습니다.

주요 재무 데이터

사업 및 영업 실적

NCDL의 분기말 포트폴리오 기업 수는 이전 분기 244개에서 258개로 증가했습니다. 합작법인을 제외한 상위 10개 보유 종목은 포트폴리오 공정가치의 12.4%를 차지했습니다. 단일 익스포저 중 최대 비중은 1.6%였으며, 평균 포지션 규모는 0.4%를 유지했습니다.

선순위 담보대출(First-lien loans)이 포트폴리오의 87.1%를 차지했으며, 후순위 채권과 지분은 각각 7.6%와 3.1%를 나타냈습니다. 합작법인은 2.2%를 차지했습니다. 경영진은 룩스루(look-through) 기준으로 선순위 대출 비중을 약 90%로 유지하는 것을 목표로 하고 있습니다.

신규 선순위 대출 투자의 평균 스프레드는 약 480bp였습니다. 경영진은 2026년 동안 직접 대출(Direct lending) 스프레드가 대체로 475~500bp 범위 내에서 유지되었다고 밝혔습니다.

처칠(Churchill) 플랫폼 차원에서 회사는 총 약 50억 달러 규모의 90건 이상의 거래를 완료했거나 투자 약정을 체결했습니다. 질의응답(Q&A)에서 경영진은 플랫폼 집행 금액의 80% 이상이 선순위 직접 대출에 집중되었다고 설명했습니다.

신규 설립된 합작법인은 9월 30일 기준 공정가치 1억 4,750만 달러, 가중평균 수익률 9.2%의 투자를 보유했습니다. NCDL은 해당 분기 동안 JV 투자를 통해 연환산 13.6%의 수익률을 거두었습니다. 경영진은 이 투자기구가 추가적인 자금 집행 여력과 운용 유연성을 제공한다고 밝혔습니다.

또한 NCDL은 2030년 만기 무보증 사채를 1억 달러 추가 발행(tap)하여, 총 무보증 사채 잔액이 4억 달러로 늘어났습니다. 무보증 부채는 전체 부채 잔액의 약 38%를 차지했으며, 가중평균 조달비용은 SOFR + 187bp를 기록했습니다.

분기말 이후 NCDL은 약 5,000만 달러의 자사주 매입 승인한도 중 약 300만 달러를 사용하여 평단가 약 10.76달러에 약 27만 8,000주를 매입했습니다.

경영진 가이던스

경영진은 향후 수 분기에 걸쳐 합작법인의 포트폴리오를 약 3억 달러 규모로 확대할 것으로 예상하고 있습니다. 또한 자금 집행이 선형적으로 이루어지지는 않겠지만, 이전에 제시한 12개월 이내에 JV 자금이 전액 집행될 수 있다는 기존 전망을 유지했습니다.

회사는 BDC 차원의 부채비율을 목표 범위인 1.0~1.25배의 상단 근처로 유지할 계획입니다. 경영진은 합작법인의 부채비율 레버리지 역시 2.25배 수준으로 유지할 의향을 밝혔습니다.

경영진은 고금리 기조의 장기화가 NCDL의 이익을 뒷받침할 수 있다고 믿는 한편, 포트폴리오 기업들이 이자보상배율과 유연한 자본 구조를 통해 높은 금리 환경에 대응할 수 있는 태세를 유지하고 있다고 말했습니다.

리스크 및 관찰 항목

내부 관찰 대상(Watch list) 비중은 2개 기업이 추가되면서 공정가치의 10.8%에서 11.6%로 증가했습니다. 가중평균 내부 리스크 등급은 최초 인수(underwriting) 당시의 4.0과 비교해 4.4를 유지했습니다.

분기말 기준 9개 포트폴리오 기업이 이자 미수계상(nonaccrual) 상태였으며, 이는 취득원가 기준 포트폴리오의 2.6%, 공정가치 기준 1.5%를 차지합니다. 분기 중 1개 기업이 미수계상 대상에 추가되었고, 다른 1개 기업은 구조조정 후 제외되었습니다.

주당 0.08달러의 순실현손실은 주로 부실 채권 포지션 2건의 계약 변경 및 구조조정과 관련이 있습니다. 이러한 손실은 지분 투자에서 발생한 200만 달러의 실현이익으로 일부 상쇄되었습니다.

경영진은 높은 인플레이션, 지정학적 긴장, 차입비용 증가, AI 관련 변동성, 소프트웨어 기업에 대한 익스포저, 비공모 BDC의 지속적인 환매 활동 등을 시장의 우려 사항으로 꼽았습니다. 또한 사모펀드(PE)의 M&A 및 LBO 활동이 선별적으로 이루어지며 정상화 수준을 밑돌고 있다고 지적했습니다.

애널리스트 Q&A 하이라이트

• 합작법인 수익률: 경영진은 구조화 지분, 채권 트랜치, 잔여 지분 및 행정 수수료가 반영된 연환산 13.6%의 수익률이 합리적인 수준에서 지속 가능하다고 설명했습니다. JV의 초기 레버리지는 2.25배였습니다.
• 지분 공동투자: 경영진은 이번 분기의 실현된 지분 이익이 회사가 목표로 하는 성과 유형, 즉 3~4년의 보유 기간, 2배 이상의 투자자본배수(MOIC), 20% 이상의 수익률을 반영한다고 말했습니다. NCDL은 사이클의 현 시점에서 고정금리 메자닌 부채보다 다각화된 지분 공동투자를 선호할 계획입니다.
• 자금 집행 파이프라인: 처칠의 분기 플랫폼 집행액 약 50억 달러 중 80% 이상이 선순위 직접 대출에서 발생했습니다. 경영진은 JV가 NCDL에 이러한 파이프라인에 참여할 수 있는 추가 여력을 제공했다고 밝혔습니다.
• 자사주 매입: 자사주 매입 프로그램은 주가의 NAV 대비 할인폭이 확대됨에 따라 더 활성화되도록 설계되어 있습니다. 경영진은 향후 매입이 거래가 수준 및 신규 투자로의 자금 집행이 가지는 상대적 매력도에 따라 결정될 것이라고 말했습니다.
• JV 확대 일정: 경영진은 신규 투자 집행과 NCDL로부터의 잠재적 자산 매입에 힘입어 12개월의 자금 집행 일정에 대해 자신감을 재확인했습니다. 2026년 동안 자금 집행이 비교적 일관되게 진행되었으나, 4분기 활동은 계절적으로 더 활발한 경향이 있습니다.

실적 발표 전화회의 전체 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Welcome to Nuveen Churchill Direct Lending Corp. Third Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes.

I'd like to turn the call over to Robert Paun, Head of Investor Relations for NCDL. Robert, please go ahead.

Robert Paun

Good morning, and welcome to Nuveen Churchill Direct Lending Corp.'s Third Quarter 2026 Earnings Call. Today, I'm joined by NCDL's Chairman, President and CEO, Ken Kencel; Chief Financial Officer and Treasurer, Shai Vichness, as well as other members of the management team. Following our prepared remarks, we will be available to take your questions.

Today's call may include forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about the company, our current and prospective portfolio investments our industry, our beliefs and opinions and our assumptions. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors some of which are beyond our control and difficult to predict. Actual results may differ materially from those expressed or forecasted in the forward-looking statements.

We ask that you refer to the company's most recent filings with the SEC for important risk factors. Any forward-looking statements made today do not guarantee future performance and undue reliance should not be placed on them. The company assumes no obligation to update any forward-looking statements at any time. Our earnings release, 10-Q and supplemental earnings presentation are available on the News and Investors sections of our website at ncdl.com.

Now I would like to turn the call over to Ken.

Kenneth Kencel

Thank you, Robert. Good morning, everyone, and thank you all for joining us today. During my prepared remarks, I will start with a discussion of our third quarter financial results, followed by some comments on the current market environment. our deal activity during the quarter and our portfolio positioning.

Starting with our financial results for the quarter. Our investment portfolio continues to perform well, and our operating performance was in line with expectations. This morning, we reported net investment income of $0.38 per share and adjusted net investment income of $0.39 per share for the third quarter, which fully covered our regular quarterly distribution of $0.36 per share. Based on our results, our Board declared a total fourth quarter distribution of $0.38 per share, which consists of a regular quarterly distribution of $0.36 per share and a supplemental distribution of $0.02 per share.

During the third quarter, gross originations totaled approximately $213 million compared to $12 million in the second quarter. The increase in gross originations quarter-over-quarter was driven by 2 factors: the launch of our Joint Venture, which accounted for $93 million of gross commitments and a rebound in transaction activity compared to the prior quarter, which saw us commit $120 million to new transactions. We continue to see strong asset growth and new originations across the Churchill platform, which I will speak about in more detail later on the call.

At September 30, our net asset value of $17.13 per share was relatively stable compared to $17.19 per share at June 30. As we reflect on the current market conditions and economic environment, many of the headlines that emerged in the private credit market have continued during the second half of this year. These headlines continue to be driven by inflationary pressures from geopolitical tensions, AI disruption and the industry's exposure to software companies and still elevated redemption activity in private BDCs. Against this backdrop, however, we believe overall private credit fundamentals and underlying credit quality remains strong with solid interest coverage, low levels of portfolio company leverage, and large equity cushions.

As we see it, there continues to be a significant disconnect between current fundamentals and what's dominating the headlines, particularly with our investment portfolio, and the strength of our credit metrics. Today, the macroeconomic environment is characterized by strong corporate earnings, resilient domestic spending and stable U.S. growth. despite elevated inflation remaining above the Central Bank's 2% target. We believe this remains a constructive environment to deploy capital into high-quality investment opportunities. As far as direct lending spreads, we have seen a stabilization between 475 and 500 over for traditional first lien loans. This has remained relatively consistent following a modest widening of spreads earlier this year.

In terms of the interest rate environment, given that inflation remains elevated and above the Central Bank's target there's been a meaningful shift in rate expectations. Geopolitical tensions have added further upside pressure to the inflation outlook. And therefore, many market participants are expecting additional rate hikes in 2027. We believe our portfolio companies continue to perform well in a higher for longer interest rate environment based on strong interest coverage and flexible capital structures. Additionally, we believe NCDL is well positioned to benefit from the earnings tailwind of higher rates. Overall, we continue to view the private credit and direct lending market as an attractive asset class based on a compelling risk return profile.

Now turning to our investment activity. During the third quarter, private equity M&A activity rebounded modestly compared to a slower second quarter, reflecting a partial market recovery. Although U.S. private equity deal count and deal value increased quarter-over-quarter, LBO activity remains highly selective and relatively light compared to more normalized periods, driven by continued market volatility as buyers navigate elevated borrowing costs geopolitical uncertainties and AI-driven disruptions. Despite this backdrop, the Churchill platform delivered strong investment activity during the quarter while maintaining our underwriting standards and high level of selectivity.

At the platform level, during the third quarter, Churchill closed or committed to over 90 transactions totaling approximately $5 billion with the majority of that volume concentrated in senior lending. At Churchill, we continue to focus on the traditional core middle market, benefiting from our differentiated sourcing and long-term track record. Additionally, we benefit from being an incumbent lender as existing portfolio companies continue to be a source of deal volume as sponsors pursue inorganic growth through buy-and-bill strategies.

At the NCDL level, gross investment fundings totaled approximately $134.8 million and repayments and sales totaled approximately $192.4 million, including sales to the Joint Venture of approximately $150 million. As we mentioned on our last call, in July, we successfully closed a Joint Venture with an institutional partner. At closing, NCDL sold a portfolio of approximately $150 million of first lien loans to the Joint Venture. And going forward, we will continue to deploy assets and investments that align with the Churchill platform and NCDL's investment strategy and portfolio allocation.

In terms of our investment portfolio and credit quality, overall company performance across our portfolio remains healthy, reflecting the high-quality deal flow we've experienced over the past several years. Credit metrics and fundamentals within the NCDL portfolio remains strong, with portfolio company total net leverage of 5.2x and interest coverage of 2.3x on traditional middle market first lien loans. These credit metrics are a direct result of our conservative structuring and relatively low attachment points that we target when underwriting new transactions. Our weighted average internal risk rating was 4.4 at the end of the third quarter, relatively consistent with prior quarters, and versus an ongoing rating of 4.0 for all of our investments at the time of origination.

Our internal watch list increased modestly to 11.6% of fair value compared to 10.8% at the end of the second quarter. As a reminder, we employ a dynamic internal risk rating system with a 1 through 10 rating scale. Our watch list starts at a 6 rating and we ensure that our workout team is involved early on in the process of a potential credit challenge or event. It is important to note that the percentage of watch list names for NCDL remains relatively consistent with the overall Churchill platform and our long-term historical averages. We placed one new name on nonaccrual status during the third quarter, with a total cost of $3.9 million and a fair value of $3.1 million. One name was also removed from nonaccrual status following a restructuring of our investment.

At September 30, nonaccruals represented 2.6% of our total investment portfolio on a cost basis and 1.5% on a fair value basis. This compares to the prior quarter of 2.7% on a cost basis and 1.5% on a fair value basis. We believe these percentages continue to compare favorably versus current publicly traded BDC industry averages and the long-term historical BDC average.

At the end of the third quarter, we had 258 companies in our portfolio, and our top 10 portfolio companies represented 12.4% of the total fair value. Diversification remains a key focus of ours and is critical as we seek to maintain exceptional credit quality and originate additional attractive investment opportunities. We've achieved this diversification with a continued high level of selectivity, facilitated by the significant proprietary deal flow, our sourcing engine is able to generate from the breadth and depth of our PE relationships.

In summary, we are pleased with our financial results for the quarter and the overall strength of our investment portfolio. Credit quality remains healthy and stable, reflecting our conservative underwriting approach and well-diversified portfolio. As we look ahead, we continue to see attractive financing opportunities, which we are well positioned to take advantage of. In periods of market volatility and economic uncertainty, we believe it is important to remain focused on our core values and pillars that have benefited Churchill since our inception over 20 years ago.

We have deep expertise, substantial experience, strong relationships, relevant size and scale and a differentiated approach to sourcing and originating high-quality deal flow. Our ability to navigate these market conditions and environment stems from our experienced investment, operating and management teams. We believe these differentiated advantages position us well in today's environment. For these reasons, we remain confident in the long-term success of NCDL and our ability to reward shareholders with an attractive distribution yield and total return profile.

And now I'll turn the call over to Shai to discuss our financial results in more detail.

Shaul Vichness

Thank you, Ken, and good morning, everyone. I will now review our third quarter financial results and portfolio statistics in more detail.

NCDL reported net investment income of $0.38 per share in the third quarter compared to $0.41 per share in the prior quarter. Third quarter adjusted NII was $0.39 per share and included a onetime nonrecurring expense of approximately $0.01 per share related to the acceleration of deferred financing costs in connection with our CLO redemption. The modest decline quarter-over-quarter was primarily attributable to an increase in the incentive fee payable as a result of greater NAV stability during the quarter. Total investment income declined slightly to $43.7 million compared to $44.3 million in the second quarter of this year. This was primarily driven by the modest decline in the size of our [indiscernible] portfolio quarter-over-quarter.

At September 30, our gross debt-to-equity ratio was 1.23x compared to 1.29x at June 30 of this year, and our net debt-to-equity ratio was 1.17x compared to 1.23x at the end of the second quarter. We paid our third quarter distribution of $0.38 per share in October. And for the fourth quarter, our Board has declared another $0.38 per share distribution. This consists of a regular quarterly distribution of $0.36 per share and a supplemental distribution of $0.02 per share. Both distributions will be paid on January 28, 2027, to shareholders of record as of December 31. As a reminder, we continue to operate with a base plus supplemental distribution program that sees us paying out a portion of our excess earnings over and above the regular distribution of $0.36 per share.

For the most recent quarter, we generated $0.03 per share of incremental adjusted earnings above our regular distribution, and we are distributing $0.02 per share of the excess earnings in the form of a supplemental distribution. Our total GAAP net income in the third quarter was $0.32 per share compared to $0.07 per share in the second quarter of this year. Third quarter net income included $0.06 of net realized and unrealized losses. Net realized losses of $0.08 per share for the quarter were primarily due to the amendment and restructuring of 2 underperforming debt positions, which were partially offset by a $2 million realized gain associated with an equity realization during the quarter. Net realized losses were partially offset by unrealized gains of approximately $0.02 per share. And similar to prior quarters, market spreads remained relatively stable throughout the quarter.

Net asset value was $17.13 per share at September 30 compared to $17.19 per share at June 30, representing a modest 0.3% decline quarter-over-quarter largely due to the impact of net realized and unrealized losses during the quarter. As of September 30, NCDL's investment portfolio had a fair value of $1.9 billion, in line with the end of the second quarter. Gross originations totaled $213.3 million and gross investment fundings totaled $134.8 million compared to $12.1 million and $24.8 million of gross originations and gross investment fundings, respectively, in the second quarter of 2026. Investment activity increased quarter-over-quarter, driven by a meaningful pickup in deals reviewed late in the second quarter as we discussed on our prior earnings call as well as the impact of our investment in our newly formed joint venture. Additionally, we funded more deals and increased hold sizes following the sale of assets to our JV.

As we highlighted in our previous call, in July, we partnered with an institutional investor to form a joint venture with a total commitment of up to $106 million. NCDL committed 87.5% of the equity to the joint venture with our partner committing the remainder. At closing, we and the partner contributed $40.7 million and $5.8 million, respectively, to the JV. And concurrently, we sold a portfolio of approximately $150 million first lien loans to the joint venture. At September 30, the fair value of investments in the Joint Venture was $147.5 million and the weighted average yield was 9.2%. The annualized return on NCDL's investment during the third quarter was an attractive 13.6%. We've added a new slide in our earnings presentation this quarter with further details on the portfolio of the Joint Venture and we'll continue to provide information on the JV's portfolio going forward.

We expect to continue to ramp the Joint Venture towards a portfolio of approximately $300 million over the coming quarters. The leverage employed to the Joint Venture, together with its high quality and diversified portfolio, which we believe will be accretive to NCDL's earnings profile and provide enhanced operating flexibility. Additionally, the Joint Venture provides NCDL with incremental capacity to deploy into our attractive pipeline of deal flow.

During the third quarter, sales and repayments totaled $192.4 million, which included asset sales to the Joint Venture of approximately $150 million. We had full repayments on 2 larger positions within NCDL totaling $27 million and partial prepayments for another $16 million. Similar to recent quarters, we have been actively reinvesting capital received from repayments with a view towards maintaining leverage at the upper end of our target range. Additionally, we remain focused on redeploying capital into traditional middle market transactions across the capital structure with the majority of new investments into senior secured first lien loans.

At September 30, our total investment portfolio consisted of 258 names compared to 244 names at the end of the second quarter. Diversification across portfolio companies and position size remains a key focus of ours with our top 10 portfolio companies, excluding the investment in the joint venture, representing only 12.4% of the fair value of the portfolio. Our largest exposure is only 1.6% of the total portfolio, and our average position size remains at 0.4%. As far as asset deployment and selection go, during the third quarter, our new originations were spread across senior first lien loans and equity positions. As we previously mentioned, we are intentionally deploying more dollars into equity co-investments as opposed to junior debt with a focus on slightly increasing the percentage of equity in the portfolio to drive capital appreciation within NCDL without changing the proportion of senior loan investments in the portfolio.

Spreads on new investments in the third quarter were relatively consistent with the prior quarter, with the average spread on new first lien loans at approximately 480 basis points with spreads largely range-bound throughout 2026 in the 475 to 500 over range. Our weighted average yield on debt and income-producing investments at cost was 9.7% during the quarter compared to 9.3% in the prior quarter. The increase quarter-over-quarter was primarily due to the increase in base rates at quarter end compared to June 30, together with the accretive benefits of our investment in the joint venture. In terms of portfolio allocation, at September 30, first lien loans represented 87.1% of the total portfolio while junior debt and equity comprised 7.6% and 3.1%, respectively.

And our newly formed Joint Venture now represents 2.2% of the total portfolio, which is primarily focused on first lien loans. On a look-through basis to the Joint Venture, our allocation strategy remains unchanged as we continue to target a portfolio comprised of roughly 90% senior loans with the balance allocated to junior debt and equity. We strongly believe that our focus on traditional middle market segment will benefit NCDL shareholders over the long term as we see meaningfully higher spreads and tighter documentation terms in the traditional middle market as compared to the upper middle and BSL markets.

Turning to credit quality. We continue to be very pleased with the overall health and strength of our investment portfolio. During the quarter, we placed one new portfolio company on nonaccrual status, with a cost basis of $3.9 million and a fair value of $3.1 million. One portfolio company was also removed from nonaccrual status following restructuring of that position. At the end of the third quarter, NCDL had 9 total names on nonaccrual, representing 1.5% on a fair value basis and 2.6% at cost. This compares to 1.5% and 2.7% of the portfolio at fair value and costs, respectively, as of the end of the second quarter. Our portfolio continues to perform well and in line with our expectations. At September 30, our weighted average internal risk rating was 4.4x consistent with the prior quarter, and our watch list consisting of names with an internal risk rating of [indiscernible] increased slightly to 11.6% at the end of the third quarter compared to 10.8% at the end of the second quarter, driven by 2 new additions to the watch list.

Finally, our conservative approach to underwriting is highlighted by our weighted average net leverage across the portfolio of 5.2x and interest coverage of 2.3x as of the end of the third quarter. Looking at NCDL's leverage profile. Our debt-to-equity ratio at September 30 was 1.23x gross compared to 1.29x at the end of June 30. And on a net basis, 1.17x at September 30, net of our cash position at quarter end. The reduction in gross and net leverage was driven primarily by the sale of assets into the joint venture, the proceeds of which we used to repay leverage at the BDC and to make new investments.

As we look ahead to the ongoing deployment within the Joint Venture, we will look to maintain leverage at the BDC level towards the upper end of our target range of 1 to 1.25x debt to equity. We will also look to maintain optimal leverage within the Joint Venture in the range of 2.25x debt to equity. In addition to the launch of the Joint Venture, we also completed a successful $100 million tap of our existing 2030 unsecured notes, which brings the aggregate amount of unsecured notes issued by NCDL to $400 million. As we mentioned on our last call, TIAA purchased 100% of the notes issued, showing a strong sign of ongoing support from our parent company. Also, in connection with the tap, we entered into an interest rate swap covering the incremental issuance resulting in NCDL paying a floating rate of SOFR plus 2.55% on the incremental debt which matures on March 15, 2030, together with the existing $300 million of unsecured notes issued in 2025.

As of September 30, unsecured debt represents approximately 38% of NCDL's outstanding debt and our weighted average cost of debt stood at SOFR plus 187 basis points. And finally, with respect to our $50 million share repurchase program that we put in place earlier this year, the company purchased approximately 278,000 shares after quarter end through the period ended October 30. The purchaser made at an average price of roughly $10.76 per share for a total of approximately $3 million, leaving $47 million available for ongoing purchases under the program.

With that, I'll turn it back to Ken for closing remarks.

Kenneth Kencel

Thank you, Shai. In closing, we continue to believe NCDL remains in a position of strength based on a high-quality, well-diversified portfolio, experienced investment team and solid balance sheet. Additionally, we continue to benefit from our competitive positioning and advantages in the core middle market as well as our long-term successful track record. As a result, we believe NCDL shares offer a compelling investment opportunity with the stock trading at a meaningful discount to net asset value and an attractive distribution yield. Thank you, all, for joining us today and for your interest in NCDL.

I will now turn the call over to the operator for Q&A.

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]

Our first question comes from Finian O'Shea with Wells Fargo.

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Finian O'Shea

A couple on the senior loan fund. The 13.6% return sounds like a pretty good number. seeing if that is expected to be normal? And then if so, can you -- do you disclose the borrowing rate on the senior JV credit facility?

Shaul Vichness

Yes, it's Shai. So thanks for the question. So yes, the 13.6% is comprised of sort of the full return to the BDC on its investment in the JV, so it picks up, obviously, the structured equity, effectively, the debt tranches plus the equity residual and then there's an admin fee as well that gets picked up. So that 13.6%, frankly, we think is a reasonably sustainable number. We levered the JV at 2.25x turns out of the gate by dropping down that initial $150 million portfolio, and our goal is to keep that vehicle optimally levered as we move forward. So again, we do think that's a good number.

I don't think we disclosed the borrowing rate on the third-party debt in the JV, but it's a very well-structured facility that's attractively priced in today's market. So you can kind of -- it's roughly in line, I would say, with the financing costs on the ABLs up at the BDC level.

Finian O'Shea

Okay. Great. A follow-on the, I guess, another good part of the story, the equity realized gain you mentioned if you're able to put any meat on the bone there in terms of how good of an outcome that was? What was the sort of IRR MOE? How long you've held it and with the rest of that portfolio as it seasons if we should see an ongoing cadence of that?

Shaul Vichness

Yes. That's a great question. So yes, with respect to that realization and kind of what we hoped generally for the expected returns around our equity co-investments in the portfolio and this one was kind of right down the fairway in terms of that story. It's a 3 to 4-year hold, a 2x plus MOC driving kind of a 20-ish percent here and more, that's sort of what we look for in those transactions. And as we think about that book, which is maturing right on the existing portfolio, and we continue to add to the equity co-investment of the allocation in the portfolio and favoring that over fixed rate mezz at this point in the cycle. Our hope is to get more of those as we go. But this was a great example, right? They're a diversified position.

So they're $1 million, $2 million each in terms of the investment size, but the ability to get 2x in 3 years, we think is accretive, and we're looking to do more of that, frankly. But this was a great example of that, and I'm glad you highlighted it.

Kenneth Kencel

Yes. Fin, it's Ken. Yes. I would just say, overall, we like the dynamics in the co-invest opportunities we're seeing. Obviously, we need to make sure that they are highly diversified. But as you know, in our platform, as a large LP to today, nearly 400 private equity funds we do get these co-investment opportunities. They're typically offered to us no pheno carry. So it's a very attractive dynamic in terms of being able to access co-investments, particularly on deals that we feel provide the kind of returns that are additive to the BDC portfolio. So we're going to continue to lean into that.

And as Shai said, I think we favor today the levered senior return and the equity return relative to mezz. I would say we think, obviously, the core senior lending is always going to be the largest portion of the portfolio, kind of 90% or even more. But we do think co-investments offer better risk-adjusted return right now. So we're going to continue to do this, but we're going to do those on a very diversified basis.

Operator

Our next question comes from Arren Cyganovich with Truist Securities.

Arren Cyganovich

Just wanted to touch on the transaction activity in the quarter. I think you said the platform had $5 billion seems like a pretty strong number given the environment. Does that $5 billion -- is that all direct lending? Or does that include other areas outside of direct lending?

Shaul Vichness

Yes. Arren, thanks for the question. No. So that's the whole platform deployment. Although I can say that 80% plus of that deployment was in the senior direct lending side of our business, which has always been kind of the bulk of the flow with mezz and equity being smaller pieces of the business. Of course, we have a private equity secondaries platform as well and more recently, the capital solutions business that's actively deploying.

So when we think about the overall platform, it's that $5 billion number, but senior lending was the bulk of it. And I think that's really just a testament to kind of our positioning in the market now on the incoming portfolio that we have, which provides incremental financing opportunities across the platform as well. But even in what is arguably a still relatively slow private equity M&A environment, we're able to find attractive transactions to deploy into. And in this quarter, in particular, because NCDL had incremental capacity created by the Joint Venture, we were able to deploy effectively against that pipeline, and we hope to continue to do that going forward.

Arren Cyganovich

Okay. And you made some share repurchases quarter-to-date in the fourth quarter. What are your expectations there? I know you have to kind of balance that against leverage levels. So just curious as to your thoughts around that versus deploying new money into growing the investment portfolio.

Shaul Vichness

Yes. So I think when we initially disclosed the share repurchase program, right, it was a $50 million program. We spent $3 million of it, but it's designed really to work at sort of essentially an increasing buying percentage as the discount to NAV on the trading price increases, meaning so as the price goes down on the stock, the share repurchase program becomes more active. We haven't disclosed exactly what those levels are. But obviously, we were active in the last 30 days as we saw the share price decline. So it will really depend on kind of how the shares trade and it's sort of designed to work programmatically to take advantage of that relative value when the shares are attractive for repurchase.

But again, as we sit today and kind of where the shares are trading at this minute, we think that, frankly, deploying into the pipeline is also very attractive. So we'll provide disclosure on that on an ongoing basis as we make purchases under the program. And that will give you the context in terms of kind of where it's active and where it's going.

Operator

[Operator Instructions] Our next question comes from Melissa Wedel with UBS.

Melissa Wedel

First one, following up quickly on the JV. You talked about that, and it seems like exactly what you sort of previewed on the last earnings call is what happened this quarter was dropping down assets optimizing leverage within that vehicle. Last quarter, you talked about possibly a 12-month period for fully ramping JV and fulfilling the mezz commitment of capital there. Is that still your view?

Kenneth Kencel

Melissa, yes, thanks for the question. Yes, we continue to feel good about that time line, and it's going to sort of come in waves, if you will, right? Because if you think about what the Joint Venture is designed to do, obviously, it's going to participate in the pipeline, and it's also available to acquire assets from the BDC from time to time.

So there's really 2 pads to getting deployment within the Joint Venture that we see. And based on -- as we talked about the pipeline that we're seeing, the robust level of deal flow across the platform that the BDC and the JV can participate in. We continue to feel good about that time line, but it's not going to be purely linear, right, on a daily basis, it's going to sort of come in and you'll see that in the upcoming disclosures that we make as we report the upcoming quarters, but that's sort of the view is that we feel good about deploying that fully within that 12 months that we guided to on the prior call.

Melissa Wedel

Got it. And then a quick follow-up on your answer there. I would think that as you said it will be a linear deployment, I would think the seasonality that we would typically see in the BDC will also play -- take effect to your -- specifically, fourth quarter tends to be busier. Is that part of what you're referring to?

Shaul Vichness

Yes, that's -- yes, absolutely, that's right. But I think it's sort of a factor of 2 things, right? We want to make sure that we're optimizing leverage both the BDC level, right, which we've kind of guided historically and continue to guide towards the upper end of our target range. and then also making sure that the leverage at the joint venture is optimal. So that's really what sort of drives it.

But then from a deal flow perspective, you're absolutely right to point out the seasonality. Interestingly, over the course of this year, we've actually seen a little bit less seasonality and reasonable consistency in terms of deployment throughout the year. But again, yes, fourth quarter is typically a seasonally more active quarter for us and there's no reason to expect much difference this year.

Operator

We've reached the end of our question-and-answer session. I would now like to turn the floor back over to Ken Kencel for closing comments.

Kenneth Kencel

Yes. Well, thank you again, everyone, for joining us today. We appreciate your interest in NCDL. We believe that it continues to be in a position of strength based on high-quality, well-diversified portfolio, our experienced investment team and our solid balance sheet, we continue to benefit from the competitive positioning and advantages in the core middle market and certainly believe it offers a compelling investment opportunity. Thank you again for joining us today and appreciate your interest.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.