CION 2026 年第三季法說會：去槓桿與 2027 年配息調整

CION Investment Corporation 2026 年第 3 季法說會重點聚焦於已完成的資產負債表去槓桿、近期獲利疲弱，以及預計調降 2027 年基本配息。

重點摘要

• 淨投資收益降至 1,230 萬美元，即每股 0.25 美元，低於第 2 季的 1,420 萬美元（每股 0.29 美元）。管理階層將該下滑主要歸因於去槓桿、交易活動減少以及非常態性項目。
• CION 於本季減少資產負債表債務 2.78 億美元。淨負債權益比降至 1.30 倍，低於第 2 季的 1.52 倍，且低於公司先前約 1.35 倍的目標。
• 每股淨資產價值下滑 2.7% 至 13.20 美元，低於先前的 13.57 美元，主因未實現市值評估跌價以及配息超出淨投資收益。
• 該公司完成了 2.56 億美元的資產出售與還款，加權平均價格高於面額的 99.6%，其中包括以超過面額 99.5% 的價格，將 1.8 億美元的第一順位貸款出售給一家新成立的合資企業。
• CION 維持其 2026 年第 4 季每股 0.30 美元的基本配息，但宣告 2027 年第 1 季每股配息 0.25 美元，季減 17%，反映收益投資組合規模縮小。
• 管理階層預計 Longview Power 出售案將在獲得主管機關核准後，於 2026 年第 4 季或 2027 年第 1 季完成交割。該公司打算在獲得預期流動性後，優先尋求重啟股票回購。

關鍵財務數據

截至本季末，CION 擁有約 16 億美元的資產、6.5 億美元的淨資產、逾 5,000 萬美元的現金與短期投資，以及信用額度下可動用的 2,500 萬美元。約 90% 的債務為無擔保債務。

業務與投資組合表現

CION 在第 3 季未進行任何新的平台投資，因其保留現金以用於去槓桿化。出資活動完全集中於現有投資組合公司，包括 Anthem、ARC、Avison Young、Berlitz、David's Bridal、Initive、StatinMed 及 Trademark Global。

該公司在 11 家現有投資組合公司中完成了約 7,800 萬美元的投資承諾，實際出資 7,200 萬美元。此外亦出資了先前未提撥承諾額中的 1,100 萬美元。扣除出售與還款後，淨出資投資額減少了約 1.73 億美元。

第一順位留置權投資約佔 投資組合的 72%。管理階層預計，隨著 CION 尋求將股權部位變現（包括佔投資組合 6% 以上的 Longview Power），該比例將會上升。

停止計息投資佔 投資組合公允價值的 1.63%，按攤銷後成本計算則佔 4.85%，相比之下第 2 季分別為 1.44% 及 4.41%。本季並無投資項目新增至或移出停止計息名單。約 97.8% 的投資組合風險評級為 3 級或更佳。

軟體產業暴險仍維持在 投資組合的約 2%，截至第 3 季並無基於年度經常性收入（ARR）的貸款。

管理階層指引

CION 宣告 2026 年第 4 季每月基本配息總計為 每股 0.30 美元，分別於 10 月、11 月及 12 月發放每股 0.10 美元。

針對 2027 年第 1 季，該公司宣告基本配息總計為 每股 0.25 美元，包含 1 月與 2 月各發放 0.08 美元，以及 3 月發放 0.09 美元。管理階層表示，預計將 2027 年每季基本配息設定在每股 0.25 美元，力求達到即使不依賴強勁的交易活動，也能由核心獲利支應的水準。

管理階層預計已宣布的 Longview Power 出售案將在獲得主管機關核准後，於 2026 年第 4 季或 2027 年第 1 季完成交割。預計該交易將帶來可觀收益並提升流動性，而尋求重啟股票回購已被列為首要任務。

Pearl 與 K&F Growth Acquisition Corp. II 擬議的合併案預計於 2027 年上半年完成。該無拘束力意向書對 Pearl 的估值達到 3.5 億美元的備考企業價值，並預期進行 7,500 萬美元的 PIPE 投資。

風險與觀察重點

生息投資組合規模縮減預計將使利息收入減少，而選擇性承作新平台投資活動則將限制開辦與架構費用收入。管理階層表示，已確認的策略性及非常態性項目使第 3 季每股 NII 減少約 0.15 美元，其中包括因提前終止摩根大通（JPMorgan）信用額度而產生的加速攤銷，影響約 0.03 美元。

NAV 仍受每季估值變動的影響。管理階層特別指出 David's Bridal 的相對規模及其業務的季節性是潛在的波動來源。Berlitz、Gilead Martinez 和 Avison Young 是第 3 季未實現跌價金額最大的項目。

Pearl 交易案仍取決於最終協議的簽署與交割條件的達成，無法保證一定會按照擬議條款或時程完成。Longview Power 的出售案亦須取得主管機關核准。

分析師問答重點

管理階層表示，據其了解，K&F Growth Acquisition Corp. II 已獲准延長其收購期限。

向 CION 優先貸款合資企業出售 1.8 億美元貸款的交易於 9 月底完成交割，因此對第 3 季獲利影響極小。管理階層估計，在計入合資企業保留的股權後，對第 4 季獲利的淨影響可能約為 每股數美分。

管理階層估計，第 3 季額外增加的法律費用影響約為 150 萬美元，即每股約 0.03 美元。

未來股權變現所得款項預期將用於投資組合投資與股票回購。管理階層重申，股票回購仍是一項重要的資本配置目標。

法說會完整逐字稿

完整財報電話會議逐字稿

管理層陳述

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.

分析師問答

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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