Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The information contained in this section should be read in conjunction with "Item 1. Financial Statements." This discussion contains forward-looking statements, which relate to future events, our future performance or financial condition and involves numerous risks, uncertainties and other factors outside of our control including, but not limited to, those set forth herein under "Forward-Looking Statements" and under "Risk Factors" in Item 1A of our most recent Annual Report on Form 10-K. Actual results could differ materially from those implied or expressed in any forward-looking statements.

Overview

Overland Advantage (the "Company," "we," "our," or "us") is a Delaware statutory trust structured as an externally managed, non-diversified closed-end management investment company. The Company has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Company also has elected to be treated as a Regulated Investment Company ("RIC") for U.S. federal income tax purposes under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").

The Company's investment objective is to generate attractive risk-adjusted returns, predominantly in the form of current income, with select investments exhibiting the ability to capture long-term capital appreciation. The Company's investment strategy is primarily focused on newly-originated, privately-negotiated senior secured term loans in middle market non-sponsor companies, which are companies that are not backed by a private equity firm or other professional equity investor, and sponsor-owned companies, which are companies backed by such firm or person. Though no assurance can be given that the Company's investment objective will be achieved, and investment results may vary substantially on a monthly, quarterly and annual basis, the Company believes that the Company's investment objective can be achieved by primarily investing in newly-originated, privately-negotiated senior secured term loans in middle market non-sponsor and sponsor-owned companies with the potential of also investing in unsecured loans, subordinated loans, mezzanine loans and equity-related securities including warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company's common equity.

In furtherance of its investment objective, the Company also makes investments in syndicated loans and other liquid credit opportunities, including in publicly traded debt instruments and other instruments that are not directly originated. The Company invests without limit in originated or syndicated debt. The Company targets the following investment assets: (i) middle market corporate non-sponsor and sponsor owned companies; (ii) asset-based lending; and (iii) bespoke solutions.

The Company generally invests in floating rate instruments. The instruments in which the Company invests are not typically rated by any rating agency, but if these instruments were rated, they would likely receive a rating of below investment grade (that is, below BBB-or Baa3), which is an indication of having predominantly speculative characteristics with respect to the borrower's ability to pay interest and repay principal. Such below investment grade securities are often referred to as "junk."

The Company generally expects to invest in "middle market" companies with annual earnings before interest expense, income tax expense, depreciation and amortization, or "EBITDA," ranging from $25 million to $100+ million, a substantial portion of which is expected to be non-sponsor owned. Notwithstanding the foregoing, the Advisor may determine whether companies qualify as "middle market" in its sole discretion, primarily based on analysis of the EBITDA of such companies, although other factors may be considered, and the Company may from time to time invest in larger or smaller companies if an attractive opportunity presents itself, especially when there are dislocations in the capital markets, including the high yield and syndicated loan markets. The investment size will vary with the size of the Company's capital base. The Company may invest without limit in originated or syndicated debt.

Investments

Our level of investment activity may vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of investment and capital expenditures of such companies, the level of merger and acquisition activity for such companies, the general economic environment, the amount of capital we have available to us and the competitive environment for the type of investments we make.

As a BDC, we may not acquire any assets other than "qualifying assets" specified in the 1940 Act, unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in "eligible portfolio companies." Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the "SEC"), "eligible portfolio companies" include certain companies that do not have any securities listed on a national securities exchange and public companies whose securities are listed on a national securities exchange but whose market capitalization is less than $250 million.

As a BDC, we may also invest up to 30% of our portfolio opportunistically in "non-qualifying" portfolio investments, such as investments in non-U.S. companies.

In addition, we may invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as "junk" have predominantly speculative characteristics with respect to the issuer's capacity to pay interest and repay principal. Such investments may also be difficult to value and are illiquid.

Revenues

We generate revenues primarily through receipt of interest income from the investments we hold. In addition, we expect to generate income from various loan origination and other fees, dividends and capital appreciation on either direct equity investments or equity interests obtained in connection with originating loans, such as options, warrants or conversion rights, and capital gains on the sales of investments. The companies in which we invest use our capital for a variety of reasons, including to support organic growth, to fund changes of control, to fund acquisitions, to make capital investments and for refinancing and recapitalizations. Leverage will be utilized to help the Company meet its investment objective. Any such leverage would be expected to increase the total capital available for investment by the Company.

Expenses

The Company bears expenses relating to the organization of the Company and the private offering of Common Shares (the "Private Offering") and any subsequent offering of common shares of beneficial interest, par value $0.001 per share, (the "Common Shares"). Organizational expenses include, without limitation, the cost of formation, including legal fees related to the creation and organization of the Company and its subsidiaries, its and their related documents of organization and the Company's election to be regulated as a BDC. Offering expenses include, without limitation, legal, printing and other offering and marketing costs, including the fees of professional advisors, those associated with the preparation of the Company's registration statement on Form 10, as well as the preparation of a registration statement in connection with any subsequent offering of Common Shares, as well as the expenses of Centerbridge Partners, L.P., a Delaware limited partnership (together with its affiliates, as applicable, "Centerbridge") and a subsidiary of Wells Fargo & Company (together with its subsidiaries, "Wells Fargo") in negotiating and documenting other arrangements with the initial investors of the Company.

The Company reimburses Centerbridge Services Group, LLC (the "Administrator"), a wholly-owned subsidiary of Centerbridge Partners, L.P., for its costs and expenses, which may include an allocable portion of overhead incurred by the Administrator in performing its obligations under the administration agreement (the "Administration Agreement"), including but not limited to rent, the fees and expenses associated with performing compliance functions, and the Company's allocable portion of the costs of its Chief Financial Officer, Chief Compliance Officer, any of their respective staff who provide services to the Company, tax, accounting, investor relations and investor services, technology, legal and operations staff who provide services, including but not limited to transaction-related services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company's internal control assessment. The reimbursement shall be an amount equal to the Administrator's actual cost; and provided, further, that such costs are reasonably allocated to the Company on the basis of assets, revenues, estimates, time records or other method conforming with generally accepted accounting principles. Any sub-administrator will separately be compensated for performing sub-administrative services under the sub-administration agreement and the cost of such compensation, and any other costs or expenses under such agreement, will be in addition to the cost of any other services borne by the Company under the Administration Agreement.

The Company's primary operating expenses include the payment of fees to Overland Advisors, LLC (the "Advisor") under the investment advisory agreement ("Investment Advisory Agreement"), the Company's allocable portion of overhead expenses under the

Administration Agreement, and all other costs and expenses relating to the Company's operations and transactions, including: operational and organizational costs; the cost of calculating the Company's net asset value, including the cost and expenses of third-party valuation services; fees and expenses payable to third parties relating to evaluating, making and disposing of investments, including the Advisor's or its affiliates' travel expenses, research costs and out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments, monitoring investments and, if necessary, enforcing the Company's rights; the expenses of Centerbridge and Wells Fargo in negotiating and documenting the Wells Fargo Sourcing Arrangement; the fees and expenses relating to the development, licensing, implementation, installation, servicing and maintenance of, and consulting with respect to computer software, technology and information technology systems used in connection with the management of the Company's investments including, without limitation, costs and expenses of technology service providers and related software, hardware and subscription-based services utilized in connection with the Company's investment and operational activities, including but not limited to, the origination and monitoring of investments; expenses related to the maintenance of registered offices and corporate licensing; corporate licensing and other professional fees (including, without limitation, expenses of consultants (including, but not limited to, consulting fees for, and other amounts payable to, senior or special advisors, certain other advisors, operating partners and other similar professionals incurred by a client for the benefit of such client or such client's investments or portfolio companies) and other experts); bank service fees; withholding and transfer fees; loan administration costs; costs incurred in connection with trademarks or other intellectual property; interest payable on debt and other borrowing costs, if any, incurred to finance the Company's investments; costs of effecting sales and repurchases of the Company's Common Shares and other securities; the management fee and any incentive fee payable under the Investment Advisory Agreement; distributions on the Company's Common Shares; transfer agent and custody fees and expenses; the allocated costs incurred by the Administrator in providing managerial assistance to those portfolio companies that request it; other expenses incurred by the Administrator; brokerage fees and commissions; sourcing or finder's fees; costs and expenses of distributing and placing interests in the Common Shares; federal, state and foreign registration fees (which can arise, for example, if a local jurisdiction requires a license or other registration to do business); U.S. federal, state and local taxes; independent trustees' fees and expenses; costs associated with the Company's reporting, legal, regulatory and compliance obligations, including, without limitation, under the 1940 Act and applicable U.S. federal, state, local, or other laws and regulations; costs of any reports, proxy statements or other notices or communications to Shareholders, including, without limitation, printing costs, costs of technology licensing and maintenance of the website for the benefit of Shareholders and any Shareholder portal (including any database or other forum hosted on a website designated by the Company) or due diligence platform; costs and expenses in connection with monitoring (including with respect to sustainable value creation, cyber security, anti-corruption and similar functions), complying with and performing any provisions in agreement with investors; anti-money laundering and sanctions monitoring expenses; costs of holding Shareholder meetings and meetings of the Company's board of trustees (the "Board"), including, without limitation, legal, travel, lodging and meal expenses; board fees of the Company's Board; the Company's fidelity bond; trustees and officers' errors and omissions and other liability insurance, and any other insurance expenses; costs associated with obtaining an order for SEC co-investment exemptive relief; litigation, indemnification and other non-recurring or extraordinary expenses (whether actual, pending or threatened) or any costs arising therefrom, and any judgments, fines, remediations or settlements paid in connection therewith; fees, costs and expenses related to any governmental inquiry, investigation or proceeding directly or indirectly involving or otherwise applicable to the Company, Advisor or any of their respective affiliates in connection with the activities of the Company or any investment; direct and indirect costs and expenses of administration and operation, including printing, mailing, reporting, publishing, long distance telephone, staff, accounting, audit, compliance, tax and legal costs; accounting, audit and tax advice and preparation expenses (including preparation costs of financial statements, tax returns and reports to investors); fees and expenses associated with marketing efforts (including, but not limited to, reasonable out-of-pocket expenses incurred by the Advisor and its affiliates in attending meetings with Shareholders and/or prospective Shareholders); dues, fees and charges of any trade association of which the Company is a member; the costs of any private or public offerings of the Common Shares and other securities, including registration and listing fees, if any, and any other filing and registration fees; other expenses related to the purchase, monitoring, syndication of co-investments, sale, settlement, custody or transmittal of the Company's assets (directly or through financing alternative investment subsidiaries and/or trading subsidiaries which the Company may from time to time establish); windup and liquidation expenses and all other expenses reasonably incurred by the Company or the Administrator in connection with administering the Company's business (including payments made to third-party providers of goods or services) and not required to be borne by the Advisor or another service provider pursuant to any agreement with the Company.

We have entered into an Expense Support and Conditional Reimbursement Agreement (the "Expense Support Agreement") with the Advisor, under which the Advisor has contractually agreed to pay certain operating expenses of the Company on the Company's behalf, such that these expenses do not exceed 0.375% (1.50% on an annualized basis) of the Company's applicable quarter-end net asset value, as described in "Item 1. Financial Statement - Notes to Consolidated Financial Statements - Note 4. Agreements and Related Party Transactions."

Portfolio and Investment Activity

Our portfolio and investment activity during the following periods (excluding the Company's investment in U.S. Treasury Bills):

Our portfolio composition and weighted average yields as of the following periods (excluding the Company's investment in U.S. Treasury Bills):

As part of the monitoring process, the Advisor as the Company's valuation designee appointed in accordance with Rule 2a-5 under the 1940 Act, has developed risk assessment policies pursuant to which it regularly assesses the risk profile of each of the Company's debt investments and rates each of them based on the following categories, which are referred to as "Internal Risk Ratings." Key drivers of Internal Risk Ratings include financial metrics, financial covenants, liquidity and enterprise value coverage. Pursuant to these risk policies, an Internal Risk Rating of 1 - 5, which is defined below, is assigned to each debt investment in the Company's portfolio.

Investments rated 1 are viewed as having the least amount of risk to the Company's initial cost basis, as the borrower is performing above underwriting expectations. The business trends since origination and risk factors for this investment are generally favorable.

Investments rated 2 are viewed as having an acceptable level of risk similar to the risk at the time of origination. The borrower is operating generally in line with underwriting expectations, with little concern about the portfolio company's performance or ability to meet covenant requirements or interest payments. All investments or acquired investments in new portfolio companies are initially assessed a rating of 2.

Investments rated 3 involve a borrower performing below underwriting expectations and indicates that the risk of the loan has increased since origination or acquisition. There may be concerns about the portfolio company's performance or ability to meet covenant requirements or interest payments.

Investments rated 4 involve a borrower operating materially below underwriting expectations and indicates that the risk of the loan has increased materially since origination. The borrower may be out of compliance with debt covenants and loan payments may be past due (but generally not more than 120 days past due). It is likely that we may not recover our initial cost basis upon exit.

Investments rated 5 involve a borrower performing substantially below underwriting expectations and indicates that the loan's risk has increased significantly since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and there is significant risk that the Company may realize a substantial loss. The fair market value of the loan will be updated to the amount the Company anticipates will be recovered.

The following table shows the investment ratings of the investments in our portfolio (excluding the Company's investment in U.S. Treasury Bills):

Results of Operations

The Company commenced investment operations on May 7, 2024.

Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. As a result, comparisons may not be meaningful.

Investment Income

Investment income for the following periods:

For the three months ended September 30, 2025, total investment income increased to $31.3 million from $9.1 million for the three months ended September 30, 2024 driven by our continued deployment of capital. The size of our investment portfolio at fair value, excluding the Company's investment in U.S. Treasury Bills, was $1,256.8 million at September 30, 2025 and the weighted average yield on the debt and income producing portfolio at amortized cost was 9.65%.

For the nine months ended September 30, 2025, total investment income increased to $75.5 million from $12.5 million for the nine months ended September 30, 2024 driven by our continued deployment of capital. The size of our investment portfolio at fair value, excluding the Company's investment in U.S. Treasury Bills, was $1,256.8 million at September 30, 2025 and the weighted average yield on the debt and income producing portfolio at amortized cost was 9.65%.

Expenses

Expenses for the following periods:

Net expenses for the three months ended September 30, 2025 increased to $17.8 million from $5.7 millionfor the three months ended September 30, 2024. The increase was driven by the interest on outstanding borrowings, unused and administrative fees and amortization of deferred debt costs. Furthermore, the Company received $17.7 million (since inception) in expense support from the Advisor (as described in "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 4. Agreements and Related Party Transactions."). Such expenses may be subject to reimbursement from the Company in the future.

Net expenses for the nine months ended September 30, 2025 increased to $45.1 million from $7.5 million for the nine months ended September 30, 2024. The increase was primarily attributable to interest and other debt expenses, which were driven by the interest on outstanding borrowings, unused and administrative fees and amortization of deferred debt costs. Furthermore, the Company received $17.7 million (since inception) in expense support from the Advisor (as described in "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 4. Agreements and Related Party Transactions."). Such expenses may be subject to reimbursement from the Company in the future.

Financial Condition, Liquidity and Capital Resources

The Company generates cash from (i) future offerings of the Company's Common Shares or preferred shares, (ii) cash flows from operations and (iii) borrowings from banks or other lenders, including under the revolving credit facility (the "MS Revolving Credit Facility") with Morgan Stanley Senior Funding Inc. ("MS"), the revolving credit facility (the "SMTB Credit Facility") and the term loan (the "SMTB Term Loan") with Sumitomo Mitsui Trust Bank, Limited, New York Branch ("SMTB"), and the revolving credit facility (the "BNP Credit Facility") with BNP Paribas SA ("BNP") as described in "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 7. Borrowings." The Company will seek to enter into bank debt, credit facility or other financing arrangements on at least customary market terms; however, the Company cannot commit to do so. Any such incurrence would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.

The Company's primary use of cash will be for (i) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (ii) the cost of operations (including paying the Advisor), (iii) debt service of any borrowings and (iv) cash distributions to the holders of the Company's shares.

Equity Activity

On December 20, 2023, an affiliate of the Advisor contributed $10,000 ($25 per share) of capital to the Company in exchange for 400 shares of the Common Shares. In addition, as of September 30, 2025, the Company had executed subscription agreements for approximately $2.1 billion of Capital Commitments (as of which $1.4 billion remains unfunded as of September 30, 2025). On May 7, 2024, the Company had its initial closing and received capital contributions of approximately $194 million. On March 31, 2025, the Company received capital contributions of approximately $50 million. On June 30, 2025, the Company received capital contributions of approximately $170 million.

Contractual Obligations

We have entered into the Investment Advisory Agreement with the Advisor to provide us with investment advisory services and the Administration Agreement with the Administrator to provide us with administrative services. We have also entered into the Expense Support Agreement with the Advisor to provide us with support with respect to certain expenses and subject to reimbursement. Payments for investment advisory services under the Investment Advisory Agreements, reimbursements under the Administration Agreement and support and reimbursements under the Expense Support Agreement are described in "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 4. Agreements and Related Party Transactions."

On February 22, 2024, the Company, through its wholly-owned financing subsidiary Overland Financing MS, LLC, entered into the MS Revolving Credit Facility. Under the MS Revolving Credit Facility, MS has agreed to make available to Overland Financing MS, LLC a revolving loan facility in the maximum principal amount of up to $300 million. On June 6, 2024 and November 15, 2024 certain terms, including the applicable margins, in the MS Revolving Credit Facility were amended. As of September 30, 2025, $195 million had been drawn under the MS Revolving Credit Facility. See also "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 7. Borrowings."

On July 10, 2024, the Company entered into the SMTB Credit Facility. Under the SMTB Credit Facility, SMTB has agreed to make available to the Company, a revolving credit facility secured by a first-priority interest in the capital commitments of the Company's Shareholders (including Overland Advantage Feeder Fund, L.P., as the guarantor (the "Guarantor")) and the Guarantor's Shareholders, and certain related assets of up to $100 million.

On December 9, 2024, certain terms, including the maximum commitments, in the SMTB Credit Facility were amended. Among other things, the First Amendment temporarily increased the maximum commitments under the SMTB Credit Facility from $100 million to $200 million until March 31, 2025, after which the maximum commitments under the SMTB Credit Facility will be automatically reduced to $100 million. As of December 31, 2024, $150 million had been drawn under the SMTB Credit Facility. On February 14, 2025, certain terms, including the applicable margin, in the SMTB Credit Facility were amended. On March 26, 2025, the scheduled reduction date on the $100 million temporary increased commitment was extended from March 31, 2025 to June 30, 2025. On May 1, 2025, the Company entered into a Form of Facility Increase, pursuant to which the maximum commitments under the SMTB Credit Facility (including the $100 million temporary increased commitment) increased from $200 million to $275 million. On June 27, 2025, the maximum commitments under the SMTB Credit Facility were permanently increased to $400 million (the "Fourth Amendment").

On August 13, 2025, the Company entered into an amendment (the "Fifth Amendment") to the SMTB Credit Facility. Among other things, the Fifth Amendment incorporated term loan tranche mechanics and reallocated $200 million of the $400 million maximum commitment under the SMTB Credit Facility to the SMTB Term Loan. The Company has the option under the SMTB Credit Facility to increase the aggregate maximum commitment to up to $700 million, and allocate between the SMTB Term Loan and the SMTB Credit Facility at the Company's discretion. The Fifth Amendment also added a new applicable margin for the term loan tranche at 195 basis points (1.95%), keeping the applicable margin for the revolving loan tranche the same at 225 basis points (2.25%). As of September 30, 2025, $180 million had been drawn under the SMTB Credit Facility and $200 million was outstanding under the SMTB Term Loan. See also "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 7. Borrowings."

On December 17, 2024, the Company, through its wholly-owned financing subsidiary Overland Financing B, LLC, entered into the BNP Revolving Credit Facility. Under the BNP Revolving Credit Facility, BNP has agreed to make available to Overland Financing B, LLC, a revolving loan facility in the maximum facility amount of $340 million from January 2, 2025 through March 31, 2025, a maximum facility amount of $330 million from April 1, 2025 through June 30, 2025, a maximum facility amount of $270 million from July 1, 2025 through September 30, 2025 and, as extended, a maximum facility amount of $139 million from October 1, 2025 through December 31, 2025. On September 26, 2025, the BNP Revolving Credit Facility was amended to extend the maturity date to December 31, 2025 and other conforming changes. As of September 30, 2025, $139 million had been drawn under the BNP Revolving Credit Facility. See also "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 7. Borrowings."

From time to time in the future, we may establish one or more additional credit facilities or enter into other financing arrangements to facilitate investments and the timely payment of our expenses. It is anticipated that any such credit facilities will bear interest at floating rates at to-be-determined spreads over the Secured Overnight Financing Rate ("SOFR"), or an alternative reference rate. We cannot assure Shareholders that we will be able to enter into a credit facility on favorable terms or at all. In connection with a credit facility or other borrowings, lenders may require us to pledge assets, commitments and/or drawdowns (and the ability to enforce the payment thereof) and may ask to comply with positive or negative covenants that could have an effect on our operations.

In order to finance certain investment transactions, the Company may, from time to time, enter into secured borrowing agreements with Macquarie Bank Limited ("Macquarie"), whereby the Company sells to Macquarie an investment that it holds and concurrently

enters into an agreement to repurchase the same investment at an agreed-upon price at a future date, up to 90-days from the date it was sold (each a "Macquarie Transaction").

On June 10, 2025, the Company entered into a Macquarie Transaction that was collateralized by the Company's term loans to CV Borrower, LLC and SGA Dental Partners OPCO, LLC. In accordance with ASC Topic 860, Transfers and Servicing, this Macquarie Transaction meets the criteria for a secured borrowing. Accordingly, the investment financed by the Macquarie Transaction remains on the Company's Statements of Assets and Liabilities as an asset, and the Company records a liability to reflect its repurchase obligation to Macquarie (the "June 2025 Secured Borrowing"). Interest under the June 2025 Secured Borrowing was calculated as the interpolated one and a half month term SOFR rate in effect at the time of the borrowing, plus the applicable margin of 2.95%. On July 3, 2025, the Company repaid its June 2025 Secured Borrowing obligations to Macquarie. See also "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 7. Borrowings."

Off-Balance Sheet Arrangements

Our investment portfolio contains and is expected to continue to contain debt investments in the form of delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As of September 30, 2025, we held unfunded delayed draw term loans with a principal amount of $94.6 million.

Critical Accounting Policies and Estimates

The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ.

Valuation of Investments

The Company measures the value of its investments in accordance with fair value accounting guidance promulgated under U.S. GAAP, which establishes a hierarchical disclosure framework that ranks the observability of inputs used in measuring financial instruments at fair value. See "Item 1. Financial Statements - Notes to Consolidated Financial Statements - Note 3. Fair Value Measurements and Disclosures." for a description of the hierarchy for fair value measurements and a description of the Company's valuation procedures.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

Investment transactions are recorded on the trade date. The Company measures net realized gains or losses using the specific identification method as the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation and depreciation, when gains or losses are realized.

Revenue Recognition

The Company records interest income on an accrual basis to the extent that the Company expects to collect such amounts. The Company does not accrue as a receivable interest on loans and debt securities for accounting purposes if the Company has reason to doubt the Company's ability to collect such interest. OIDs, market discounts or premiums are accreted or amortized over the life of the respective security using the effective interest method as interest income. The Company records prepayment premiums on loans and debt securities as interest income.

Interest Income

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including loan origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. Upon prepayment or partial prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts associated with the amount prepaid are recorded as interest income in the current period.

PIK Income

The Company may have loans in its portfolio that contain PIK provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the Company's consolidated statements of operations. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through interest income. To maintain the Company's status as a RIC, this non-cash source of income must be paid out to Shareholders in the form of dividends, even though the Company has not yet collected cash.

Non-Accrual Loans

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally reversed when a loan is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management's judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

Offering and Organizational Expenses

The Company bears expenses relating to the organization of the Company and the Private Offering and any subsequent offering of Common Shares. Organizational expenses include, without limitation, the cost of formation, including legal fees related to the creation and organization of the Company and its subsidiaries, its and their related documents of organization and the Company's election to be regulated as a BDC. Offering expenses include, without limitation, legal, printing and other offering and marketing costs, including the fees of professional advisors, those associated with the preparation of this report, as well as the preparation of a registration statement in connection with any subsequent offering of Common Shares, as well as the expenses of Centerbridge and Wells Fargo in negotiating and documenting other arrangements with the initial investors of the Company.

U.S. Federal Income Taxes

The Company has elected to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code, and intends to qualify annually as a RIC. As a RIC, the Company generally will not be subject to corporate-level U.S. federal income taxes on any ordinary income or capital gains distributed to Shareholders. To qualify as a RIC, the Company must maintain an election under the 1940 Act to be regulated as a BDC, meet specified source-of-income and asset diversification requirements as well as distribute each taxable year dividends for U.S. federal income tax purposes generally of an amount at least equal to 90% of the Company's "investment company taxable income," which is generally the Company's net ordinary income plus the excess of realized net short-term capital gains over realized net long-term capital losses and determined without regard to any deduction for dividends paid.

Recent Developments

On October 30, 2025, the Company entered into a sixth amendment to the SMTB Credit Facility and the SMTB Term Loan (the "Sixth Amendment"), which, among other things, incorporated a new $500 million uncommitted tranche for an aggregate facility size of $900 million, amended the maturity date to April 29, 2027, and amended the applicable margin on the SMTB Credit Facility to 1.75% and on the SMTB Term Loan to 1.60%.