CION 2026年第三季度财报电话会：去杠杆与2027年分红重置

CION Investment Corporation 2026年第三季度业绩电话会重点探讨了资产负债表去杠杆的完成、短期盈利走弱以及2027年下调基础分配额的计划。

核心要点

• 净投资收益降至1230万美元（即每股0.25美元），低于第二季度的1420万美元（即每股0.29美元）。管理层将该下滑主要归因于去杠杆、交易活跃度降低以及非经常性项目。
• CION在当季削减了2.78亿美元的资产负债表债务。净债务与股本比率降至1.30倍（此前为1.52倍），低于公司此前约1.35倍的目标。
• 每股净资产值下降2.7%至13.20美元（此前为13.57美元），主要由于按市值计价的未实现跌价以及分配额超过净投资收益。
• 公司完成了2.56亿美元的资产出售与还款，综合价值超过面值的99.6%，其中包括以超过面值99.5%的价格向一家新合资企业出售的1.80亿美元第一留置权贷款。
• CION维持了其2026年第四季度每股0.30美元的基础分配额，但宣布了2027年第一季度每股0.25美元的分配额，环比减少17%，反映出生息投资组合规模的缩小。
• 管理层预计，在获得监管部门批准的前提下，Longview Power的出售交易将在2026年第四季度或2027年第一季度完成交割。在获得预期的流动资金后，公司拟优先考虑恢复股份回购。

关键财务数据

截至季末，CION拥有约16亿美元的资产、6.50亿美元的净资产、超过5000万美元的现金及短期投资，以及信贷安排下可用的2500万美元额度。约90%的债务为无担保债务。

业务与投资组合表现

由于留存现金用于去杠杆，CION在第三季度未进行新的平台投资。出资活动完全集中于现有投资组合公司，包括Anthem、ARC、Avison Young、Berlitz、David’s Bridal、Initive、StatinMed和Trademark Global。

公司在11家现有投资组合公司中完成了约7800万美元的投资承诺，实际出资7200万美元。此外，公司还为此前未出资的承诺出资了1100万美元。在计入资产出售和还款后，净出资投资额减少了约1.73亿美元。

第一留置权投资约占投资组合的72%。管理层预计，随着CION寻求将股权资产变现（包括占投资组合逾6%的Longview Power），这一比例将有所上升。

非应计投资占公允价值投资组合的1.63%，按摊余成本计占4.85%，相比之下，第二季度分别为1.44%和4.41%。当季没有新增或移除非应计状态的投资。投资组合中约97.8%的资产风险评级为3级或更优。

软件行业敞口仍维持在投资组合的约2%，截至第三季度，无基于年度经常性收入（ARR）的贷款。

管理层业绩指引

CION宣布2026年第四季度每月基础分配额合计为每股0.30美元，10月、11月和12月各支付0.10美元。

针对2027年第一季度，公司宣布基础分配额合计为每股0.25美元，包括1月和2月各支付0.08美元，3月支付0.09美元。管理层表示，预计将2027年每季度基础分配额定为每股0.25美元，力求在不依赖强劲交易活动的情况下，使该水平能被核心收益覆盖。

管理层预计，已宣布的Longview Power出售交易将在获得监管部门批准后，于2026年第四季度或2027年第一季度完成交割。公司预计该交易将带来可观收益并增强流动性，并将寻求恢复股份回购列为首要任务。

Pearl与K&F Growth Acquisition Corp. II提议的合并计划目标于2027年上半年完成。该不具约束力的意向书对Pearl的估值为3.50亿美元备考企业价值，并拟包含7500万美元的PIPE投资。

风险与关注点

生息投资组合规模的缩小预计将减少利息收入，而对新平台投资的审慎选择将限制发起费和结构化费用。管理层表示，已确定的战略性及非经常性项目使第三季度每股净投资收益（NII）减少了约0.15美元，其中包括摩根大通信贷安排提前终止后加速摊销产生的约0.03美元。

每股净资产值（NAV）仍面临各季度间估值波动的风险。管理层强调，David’s Bridal的相对规模及其季节性运营是潜在的波动来源。Berlitz、Gilead Martinez和Avison Young是第三季度未实现跌价金额最大的几项投资。

Pearl交易仍取决于最终协议的签署及交割条件的满足，无法保证能按拟定条款或时间表完成交割。Longview Power的出售同样尚需获得监管部门的批准。

分析师问答亮点

管理层表示，据其了解，K&F Growth Acquisition Corp. II已获准延长其收购截止期限。

向CION的高级贷款合资企业出售1.80亿美元贷款的交易于9月下旬交割，因此对第三季度收益的影响极小。管理层估计，在计入合资企业中保留的股权后，对第四季度收益的净影响约为每股数美分。

管理层估计，第三季度额外发生的法律成本造成了约150万美元（即每股约0.03美元）的影响。

未来股权变现所得款项预计将用于投资组合投资与股份回购的组合。管理层重申，股份回购仍是重要的资本配置目标。

业绩电话会完整文字记录

完整财报电话会议逐字稿

管理层陈述

Operator

Good morning and welcome to CION Investment Corporation's third quarter 2026 earnings conference call. An earnings press release was distributed earlier this morning before market open. A copy of the release along with a supplemental earnings presentation is available on the company's website at www.cionbdc.com in the Investor Resources section and should be reviewed in conjunction with the company's Form 10-Q filed with the SEC. As a reminder, this conference is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements, which are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the company's filings with the SEC. Joining me on today's call will be Michael Reisner, CION Investment Corporation's Co-Chief Executive Officer, Gregg Bresner, President and Chief Investment Officer, and Keith Franz, Chief Financial Officer.

With that, I would now like to turn the call over to Michael Reisner. Please go ahead, Michael.

Michael Reisner

Thank you and good morning, everyone. Last quarter, we told you management had a plan to strengthen CION's balance sheet. This quarter, we executed on it. We repaid $114.8 million of public Israeli bonds in full at maturity, which avoided any contractual make-whole fees prior to that date. After expiration of the make-whole period, we also fully repaid the $200 million outstanding under our JPMorgan secured facility and completed its early termination. Further, we completed a new non-recourse off-balance sheet joint venture, Senior Loan Fund Partners, with a large institutional partner.

As a result, we ended the quarter at 1.3x net debt to equity, down from 1.52x last quarter and lower than the approximately 1.35x target we previously provided. The execution of this deleveraging plan impacted our near-term earnings during the quarter. We reported net investment income of $0.25 per share compared to $0.29 last quarter, partially impacted by one-time non-recurring items. Our net asset value ended the quarter at $13.20 per share, down 2.7% from $13.57 last quarter, mostly from unrealized mark-to-market price decreases on certain investments, and distributions in excess of NII. Gregg will walk you through the specific names with transactions this quarter. Our near-term earnings decline was largely the result of strategic decisions we made, rather than an overall decline in the credit quality of the portfolio. To retain cash for deleveraging, we made no new platform investments this quarter.

Our only investments were follow-ons to our existing portfolio companies. New platform investments often provide enhanced economics through incremental origination and structuring fees. In this quarter, there were none. In addition, our earnings were impacted by our debt repayment activity, most specifically the early repayment and termination of our JPMorgan facility ahead of its scheduled maturity. That alone reduced NII by approximately $0.03 per share due to the accelerated amortization of the facility's remaining debt issuance costs. We were also impacted by non-recurring costs associated with forming the new joint venture, reduction of a deferred fee on a legacy tranche of a portfolio company as a result of a new priming tranche that we led for the company, and the elimination of accrued income on our term loan investment in Thrill One, following the company's post-bankruptcy reorganization in which we received a new investment tranche.

Together, all these items reduced NII by roughly $0.15 per share. We announced the completion of our deleveraging in our September 29th press release, but I think it bears repeating. In a single quarter, we reduced our balance sheet debt from $1.17 billion to $897 million. The joint venture was also another validator of certain of our loan marks. Last quarter, we sold more than $54 million of our assets at approximately 99% of par. This quarter, a large independent institutional partner comprehensively diligenced 20 of our first lien loans and purchased them through the joint venture for $180 million or 99.8% of par. As Gregg will discuss, our total sales and repayments this quarter came in at a blended value above 99.6% of par.

Further confirmation of certain of our fair value marks, first lien investments dipped to about 72% of the portfolio, largely because our portfolio is smaller after deleveraging and after selling certain loans to the JV, where we hold now an equity interest. We expect that percentage to rise as we seek to continue to monetize equity positions, such as Longview Power, which alone currently represents more than 6% of our total investment portfolio. The media is still focused on private credit defaults and macroeconomic risk. Fitch's U.S. private credit default rate recently reached 6.3%. Against that backdrop, we are very pleased with how our portfolio is performing. We've placed no new names on non-accrual status this quarter, and 97.8% of our portfolio is risk-rated 3 or better.

Gregg will take you through some of these details. We previously announced declared base distributions of $0.10 per share for each of October, November, and December, which is unchanged at $0.30 for the fourth quarter. For 2027, we expect to set base distributions at $0.25 per share per quarter. And here are the reasons. First, we have reduced our debt on our balance sheet, which makes CION a stronger company, but also leaves us with a smaller earning portfolio. Second, until we have completed share repurchases, we will be selective about growing our investment portfolio through new platform deals, resulting in a reduction in the fees they tend to generate for us. We'd rather pay a distribution we are confident we can cover from core earnings than stretch to keep a level that depends on robust transaction activity.

We continue to expect the publicly announced sale of Longview Power to a strategic acquirer to close in the fourth quarter of 2026 or the first quarter of 2027, subject to regulatory approval. We expect significant gains on the sale, which we believe will provide us with enhanced liquidity, and our first priority will be to seek the resumption of share repurchases. We did not repurchase shares in the third quarter and I want to explain why. First, we were conserving cash to complete our deleveraging strategy. Second, we were in possession of material non-public information about David's Bridal and Pearl, which prevented us from signing a new repurchase plan.

Gregg will walk you through the proposed David's Bridal and Pearl transactions, so I'll focus on why it matters to CION shareholders. David's Bridal is our largest exposure. If the transactions are completed, our consolidated investment would be divided into 2 separately governed companies, and a meaningful percentage of that investment would be publicly traded. That would provide our investors with visible market values for the publicly traded portion of those investments, and we believe will give us a path to monetize and reduce our exposure over time.

These transactions are currently under a non-binding letter of intent. There is no assurance that a definitive agreement will be signed or that the transactions will close on the terms or timeline publicly disclosed or at all. However, we are cautiously optimistic. Last quarter, we said the market seems worried about 4 things: our marks, our ability to delever, the dividend, and software exposure. Since then, third parties have priced certain of our loans at or near our marks once again. We have delevered below our target. We've given you our 2027 base distribution expectations in advance based on our reasonable estimate of core earnings. Software is still around 2% of our portfolio. With the Longview sale expected to close in the coming months, we intend to seek the resumption of repurchases of our stock at what we believe is a significant discount to its value.

With that, I will now turn the call over to Gregg.

Gregg Bresner

Thank you, Michael, and good morning, everyone. As Michael discussed, during the quarter, we focused on completing our deleveraging plan as we seek to reposition the company to recommence share repurchases. We also exclusively focused our Q3-funded investment activity on supporting our existing portfolio companies, and approximately $45 million in full repayments from borrowers during the quarter. We limited our Q3 investment activities to our existing portfolio companies for corporate investments, working capital, and other strategic transactions. The weighted average yield for our new direct first lien investments for the quarter, based on our investment costs, was the equivalent of SOFR plus 6.1%. As we discussed in previous quarters, the majority of our PIK income is strategically derived from either highly structured first lien investments or our PIK income is incremental to our cash coupon. Together, these categories represented approximately 81% of our total PIK investment income in Q3, down from approximately 85% in Q2.

Over 99% of our PIK investments are in first lien assets. As a result, we believe this PIK income does not compare to restructured PIK income from a deterioration in borrower credit. Turning now to our Q3 investment and portfolio activity. Our Q3 funded investment activity was solely for our existing portfolio companies as we made no new platform investments during the quarter. We funded add-on investments in existing portfolio companies including Anthem, ARC, Avison Young, Berlitz, David's Bridal, Initive, StatinMed, and Trademark Global. During Q3, we completed approximately $78 million in investment commitments across 11 existing portfolio companies, of which $72 million was funded. We also funded a total of $11 million of previously unfunded commitments.

We had sales and repayments totaling $256 million for the quarter at a blended value of over 99.6% of par, which included our new first lien senior loan joint venture with an institutional investor, where we sold $180 million of such loans at a price over 99.5% of par. We additionally received full repayment of our first lien positions in Core Health & Fitness, DermCare Management, and RumbleOn. As a result of all these activities, our net funded investments decreased by approximately $173 million during the quarter.

In his commentary, Michael mentioned the announced sale transaction of Longview Power to a strategic buyer. Longview was one of our earliest investments within our opportunistic special situation strategy where we identify and acquire lightly syndicated first lien loan tranches in what we believe are quality companies at significant discounts to par due to technical or balance sheet-related issues, and then may have an active role in the processes that drive the restructuring or recapitalization of these investments to position the companies for future success. Our investment in Longview began with a discounted first lien term loan purchase in September 2018, followed by a series of strategic add-on investments. Additional examples of our special situation strategy included our investments in Yak Mat, Cureus, Carestream Health, Southeastern Grocers, Tensar, PureStar, Heritage Power, and Dayton Superior.

We have a number of special situation investments remaining in the portfolio that have yet to be realized, and we are actively working to achieve our monetization success for these investments. As Michael mentioned, our NAV movement during the quarter was driven primarily by unrealized mark-to-market price decreases on certain of our investments. Markets were still somewhat affected by the macro sentiments regarding the potential crack in private credit, most specifically the software concentrations within the private capital sector and the potential impact of AI on those investments. As a reminder, CION has not been a significant software investor historically, and has only 2% of its portfolio in the software sector with no ARR-based loans as of Q3. Our increase in unrealized values during Q3 was driven primarily by our equity investments. The largest increases for the quarter were equity positions in Carestream Health, David's Bridal, Juice Plus, and Palmetto Solar. Our largest unrealized decliners for the quarter were our investments in Berlitz, [ Gilead Martinez ], and Avison Young.

The decline in the carrying value of our Longview Power equity investment was driven by the company's payment of a cash dividend during the quarter. As we have mentioned on previous quarterly calls, we expect to see significant quarter-to-quarter volatility in the value of David's Bridal equity due to the larger overall relative size of our investment, as well as the highly seasonal nature of the company's operations and working capital profile. As we mentioned last quarter, David's is in the process of separating Pearl, David's AI-powered wedding planning, media, commerce, and vendor marketplace platform from David's traditional retail brick-and-mortar operations in order to enhance future prospects for both companies. Post quarter on October 22nd, David's Bridal publicly announced that it executed a letter of intent for a proposed business combination between Pearl and K&F Growth Acquisition Corp. II, a publicly traded special purpose acquisition corporation. The proposed business combination would establish Pearl as a standalone public company and is expected to accelerate growth and innovation through its proprietary AI technology, scalable, pure-play online business model, and continued synergistic relationship with David's Bridal's established physical retail business. The executed letter of intent values Pearl at a pro forma enterprise value of $350 million and contemplates a $75 million PIPE investment transaction.

The parties are working towards the completion of definitive agreements. The targeted closing date for the proposed transaction is during the first half of 2027, subject to the completion of definitive agreements and the satisfaction of closing conditions. Last quarter, we discussed the bankruptcy of Thrill One. During Q3, Thrill One exited bankruptcy with a plan of reorganization, whereby our legacy term loan investment was exchanged into a new investment tranche. While this transaction was contemplated and valued in Q2, the exchange resulted in a realized loss on the legacy term loan investment with the unrealized value of the new reorganized investment tranche in Q3.

From a portfolio credit perspective, our non-accruals amounted to 1.63% and 4.85% of the total investment portfolio at fair value and amortized cost, respectively, at the end of Q3, which increased from 1.44% and 4.41%, respectively, at the end of Q2. There were no new names added or removed from non-accrual status in Q3, and the changes in percentages were driven by the decrease in total portfolio value, primarily due to the execution of our deleveraging plan. On an absolute basis, non-accruals continue to be in line with historical experience, and we are pleased with the continued credit performance of our portfolio, particularly in the current macro environment.

Overall, our portfolio remains defensive in nature with approximately 72% in first lien investments. As Michael discussed, we expect the percentage of first lien investments in the portfolio to increase over the next few quarters as we seek to monetize equity investments such as Longview Power. Approximately 98% of our portfolio remains risk-rated 3 or better. Our risk-rated 3 investments, which are investments where we expect full repayment, but are either spending more engagement time and/or have seen increased risk since the initial asset purchase, increased from approximately 14.1% in Q2 to 17.5% in Q3, the majority of which was driven by the decrease in total portfolio value primarily due to our deleveraging plan.

I'll now turn the call over to Keith.

Keith Franz

Okay, thank you, Gregg, and good morning, everyone. During the third quarter, net investment income was $12.3 million, or $0.25 per share, compared to $14.2 million, or $0.29 per share, reported in the second quarter. Total investment income was $48.3 million during the third quarter as compared to $49.8 million reported during the second quarter, a decrease of $1.5 million or about 3%. The decrease in total investment income was driven primarily by lower interest income earned on our investments due to a reduction in the size of our portfolio as a result of our deleveraging activities during the quarter, lower transaction fees earned due to lower quarterly investment activity, and the reduction of a legacy transaction fee on an investment. This decrease was partially offset by an increase in dividends received from one of our equity investments and an increase in prepayment fees received during the quarter.

On the expense side, total operating expenses were $36 million compared to $35.6 million reported in the second quarter. The increase in operating expenses was primarily due to higher G&A expenses due to non-recurring legal fees incurred in connection with the restructuring of an investment, and costs associated with forming our new strategic joint venture. This increase was partially offset by a decrease in advisory fees when compared to the prior quarter. Interest expense was impacted during the quarter by the write-off of $1.5 million in unamortized debt issuance costs in connection with the repayment of our JPMorgan credit facility, partially offset by lower interest expense due to the decrease in the average debt balance outstanding during the quarter.

At September 30th, we had total assets of approximately $1.6 billion and total equity or net assets of $650 million with total debt outstanding of $897 million and 49.2 million shares outstanding. Our portfolio at fair value ended the quarter at $1.47 billion, down from $1.65 billion in the second quarter. And the weighted average yield on our debt and other income-producing investments at amortized cost was 10.6%, which is consistent from the second quarter. At September 30th, our NAV was $13.20 per share as compared to $13.57 per share at the end of June. The decrease of $0.37 per share, or 2.7%, was primarily due to unrealized mark-to-market price decreases and under-earning our distribution during the quarter.

We ended the third quarter with what we believe is a strong and flexible balance sheet with about $1.4 billion in unencumbered assets, a strong debt service capacity, with an interest coverage ratio of about 1.6x. We had over $50 million in cash and short-term investments and $25 million available under our credit facility. In terms of our debt capital, at September 30th we continue to have a healthy and diversified debt mix with about 90% in unsecured and 10% in senior secured bank debt. Our well-diversified debt structure is focused on unsecured debt in order to maximize our balance sheet flexibility and at the same time creates a strong buffer for our financial covenants. At the end of the quarter, our net debt-to-equity ratio decreased to 1.3x from 1.52x at the end of June, and the weighted average cost of our debt capital was about 7.6%, which is slightly up when compared to the second quarter. The decrease in our net leverage ratio was a direct result of our deleveraging plan to better position our balance sheet. As Michael mentioned, we executed our plan to delever our balance sheet and reduce debt by $278 million, which brought our leverage ratio down to the low end of a net leverage range of 1.3x to 1.35x.

Turning to distributions, during the third quarter, we paid monthly base distributions to our shareholders totaling $0.30 per share. We also declared our fourth quarter monthly base distributions totaling $0.30 per share, which were paid or will be paid at $0.10 per share per month for each of October, November, and December. As a result, the trailing 12-month distribution yield through the third quarter based on the average NAV was about 9.4%, and the trailing 12-month distribution yield based on the quarter-end market price was 17.9%. As announced this morning, we declared our first quarter 2027 monthly base distributions totaling $0.25 per share, which is $0.05 per share or 17% lower than the fourth quarter due to the reduction in the size of our portfolio and our quarterly deleveraging activities. The first quarter base distribution will be paid monthly in January and February at $0.08 per share and March at $0.09 per share. Okay, with that, I will now turn the call back to the operator who will open the line for questions.

Operator

[Operator Instructions]

The first question comes from the line of Erik Zwick with Lucid Capital Markets.

Please proceed.

分析师问答

Erik Zwick

I wanted to start with a question on the David's Bridal transaction. I believe K&F Growth Acquisition Corp. II was scheduled to have a shareholder vote yesterday to extend their acquisition deadline from November 6th out to, I think, maybe the third quarter of '27. I haven't been able to find any detail on the vote there. Curious, just given your proximity to the deal, what transpired there, if you have any insight there? And then, I guess if they were not able to get the extension granted, how does that change your potential strategy and plan to monetize the David's Bridal and Pearl investment?

Michael Reisner

Yes. Hi, Erik. We believe that they were granted that extension. I think they were filing an 8-K, but it's our understanding that that was extended.

Erik Zwick

Awesome. Okay, that's very positive news to hear then. The second question then, just curious about the timing of the loan sales to the senior loan fund and the impact that if it happens later in the quarter, just what the impact might be to 4Q interest income?

Keith Franz

Yes, good morning, Erik. It's Keith. We closed that strategic joint venture towards the end of September, so very minimal impact to the earnings cycle in Q3, so we'll see that in Q4.

Erik Zwick

And are you able to quantify that impact at all in Q4?

Keith Franz

Well, we sold off $180 million of assets into the joint venture and we took back about $40 million or about $50 million of equity that's paying about 12%. So, on a net basis, you're probably talking about a couple of cents per share.

Erik Zwick

Okay, great, thank you.

And then I guess switching over to expenses, can you quantify the non-recurring expenses in the third quarter or maybe have a range for what 4Q expenses may look like absent those non-recurring expenses?

Keith Franz

Yes, I think when you look through the numbers and some of the additional legal costs that we incurred, it was probably about $1.5 million impact for this quarter, so $0.03 or so.

Erik Zwick

Okay, great. And last one for me, congrats on completing the deleveraging. You did that faster than I had been expecting, so great to see. And you mentioned your strategy to increase first lien investments over the next few quarters as you monetize equity positions. Monetizing those would increase the first lien positions, but is my understanding correct that you also plan to take those proceeds and now begin to grow the portfolio again over the coming quarters?

Michael Reisner

I think it would be a combination, Erik, of both investments and share repurchases for the proceeds of those equity monetizations. So we think there'll be a combination of both, but we've been public about our desire on share repurchases, so you should assume that continues.

Erik Zwick

Thanks for taking my questions today.

Michael Reisner

Thank you, Erik.

Operator

Thank you. That concludes today's Q&A session. I would like to turn the floor back over to Michael Reisner for closing remarks.

Michael Reisner

Great. Well, thank you, everybody, for attending, and we hope you have a great rest of the year. We look forward to communicating with you in the new year. Take care, everybody.

Operator

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

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