Executive Summary

Q2 2025 delivered solid results with GAAP NII per share of $0.42 and adjusted NII per share of $0.40; both exceeded Wall Street consensus, driven by elevated one-time repayment/prepayment income and accelerated fee amortization . Results vs consensus: EPS $0.424 vs $0.398*, Total investment income $485.8M vs $480.1M*; beat driven by $32.1M of unscheduled paydown income and higher prepayment-related fees .
NAV per share declined to $15.03 (from $15.14 in Q1), primarily due to write-downs on a small number of watchlist names, partially offset by over-earning of dividends; non-accruals improved to 0.7% at fair value (0.8% in Q1) .
The Board declared a Q3 2025 base dividend of $0.37 and a Q2 2025 supplemental dividend of $0.02; adjusted earnings covered the base dividend with ~109% coverage, and spillover remained healthy at ~$0.33 per share, supporting payout stability in a lower-rate environment .
Management remains confident in credit quality and earnings power; spreads have “troughed and stabilized,” the origination pipeline is led by incumbencies, and synergies/portfolio rebalancing are expected to lift ROE by another 50–75 bps over time, a key medium-term catalyst .

What Went Well and What Went Wrong

What Went Well
- “OBDC delivered another quarter of solid earnings and generated a 10.6% annualized return on adjusted net investment income” (CEO) .
- Adjusted NII per share increased sequentially to $0.40 (from $0.39), supported by elevated one-time repayment income ($0.05/share), with supplemental dividend raised to $0.02 .
- Portfolio performance remained resilient: non-accruals improved to 0.7% (fv), debt investments 97.6% floating, weighted average yield at fv 10.6% .
What Went Wrong
- NAV per share declined to $15.03 (from $15.14) due to write-downs on a handful of watchlist names; total net realized/unrealized losses of $(79.2)M in the quarter .
- Operating expenses rose to $266.8M (from $259.6M), reflecting higher interest, management and incentive fees post-merger .
- Spread compression persists versus last year; management reaffirmed spreads have troughed and stabilized rather than widened alongside muted M&A and a strong syndicated market .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Total Investment Income ($USD Thousands)	$396,760	$464,646	$485,843
Net Investment Income ($USD Thousands)	$189,134	$201,302	$216,708
GAAP NII per Share ($)	$0.48	$0.41	$0.42
Adjusted NII per Share ($)	$0.48	$0.39	$0.40
Net Realized & Unrealized Gains (Losses) per Share ($)	$(0.17)	$0.08	$(0.15)
NAV per Share ($)	$15.36	$15.14	$15.03
Net Debt-to-Equity (x)	1.20x	1.26x	1.17x
Weighted Avg Yield at FV (%)	11.9%	10.7%	10.6%
Non-Accruals (% FV)	—	0.8%	0.7%

Results vs Wall Street Consensus (S&P Global):

Metric	Consensus	Actual	Surprise
EPS ($)	$0.398*	$0.424	+$0.026*
Total Investment Income ($USD)	$480,118,500*	$485,843,000	+$5,724,500*

Values retrieved from S&P Global.*

Segment/Portfolio Composition (% of total investments at fair value):

Segment	Q1 2025	Q2 2025
First-lien Senior Secured Debt	77.5%	75.8%
Second-lien Senior Secured Debt	5.0%	5.4%
Unsecured Debt	2.1%	2.2%
Preferred Equity	3.1%	3.3%
Common Equity	10.2%	11.0%
Joint Ventures	2.1%	2.3%

Operating/Investment Activity KPIs:

KPI	Q2 2024	Q1 2025	Q2 2025
New Investment Commitments ($USD Thousands)	$3,296,799	$1,158,874	$1,116,767
Principal Funded ($USD Thousands)	$2,305,430	$912,859	$906,035
Sales & Repayments ($USD Thousands)	$(1,146,773)	$(1,078,446)	$(1,906,887)
% Floating Rate Debt	96.5%	96.5%	97.6%
Weighted Avg Spread (Floating)	5.4%	5.2%	5.8%
Number of Portfolio Companies	—	236	233

Drivers/Context:

One-time income: Unschedule paydowns generated $32.1M vs $8.2M in Q1; prepayment-related fees and accelerated amortization were key non-recurring tailwinds .
Expenses: Total operating expenses increased to $266.8M, reflecting higher interest, management, and incentive fees post-merger .
Realized/unrealized: Total net realized and change in unrealized losses were $(79.2)M; adjusted losses were $(68)M excluding ASC 805 effects .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular Dividend per Share ($)	Q3 2025	$0.37 (Q2 base)	$0.37	Maintained
Supplemental Dividend per Share ($)	Q2 2025	$0.01 (Q1)	$0.02	Raised
Leverage Target (Net)	Ongoing	0.9x–1.25x range	Maintain; hover near top end ~1.15–1.20x	Maintained
Dividend Outlook	2025	Covered by adjusted earnings	Confident maintaining base dividend through rest of year	Maintained/affirmed
ROE Uplift (Synergies/Portfolio mix)	12–18 months	~50–75 bps anticipated	50–75 bps reiterated (financing + JV/portfolio rebalance)	Reiterated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Spreads & Market	Spreads tight; 475–500 bps; stabilized; strong BSL market	“Spreads have troughed and stabilized”; hope to widen if BSL cools/M&A improves	Stabilized; potential widening later
Tariffs/Macro	Defensive portfolio; limited tariff exposure; re-underwrote book; cautious but resilient	Tariff impact narrower than initially estimated; sponsors supporting diversification	Improving visibility; managed risk
Originations & Pipeline	Muted M&A; incumbency-led flow; large platform deals (Catalent, Squarespace)	$1.1B commitments; $906M fundings; majority from existing borrowers; repayments $1.9B	Incumbency strength; net deleveraging
Equipment Leasing JV / New Strategies	JV consolidation; strategic equity/JVs accretive; ATM program initiated	New equipment leasing JV; potential chunky data center/GPU lease opportunities	Expanding into adjacent areas
PIK & Coverage	PIK trending down; interest coverage ~1.8x	PIK down to 9.1% of total investment income; coverage up to ~1.9x	Improving credit metrics
Leverage & Liquidity	Within target; liquidity > unfunded commitments; ATM planned	Net leverage down to 1.17x; >$4B cash/capacity; $500M new notes; >2x unfunded commitments	Strong balance sheet; flexibility

Management Commentary

CEO: “OBDC delivered another quarter of solid earnings and generated a 10.6% annualized return on adjusted net investment income... positioning OBDC to generate attractive risk-adjusted returns across any economic environment.”
CEO: “Spreads have troughed and generally stabilized... we are confident that we will maintain our dividend level throughout the rest of the year.”
President: “We deployed approximately $1.1 billion of new investment commitments... with $906 million of fundings... repayments of $1.9 billion resulted in net leverage landing at 1.17x... majority of originations came from existing borrowers.”
CFO/COO: “Adjusted NII of $0.40 per share... $0.05 per share from elevated one-time repayment income... spillover income remains healthy at ~$0.33 per share.”

Q&A Highlights

Synergies/ROE uplift: Financing synergies plus portfolio rebalancing (JV/strategic equity) expected to add ~50–75 bps to ROE over time .
Deal flow: Increasing sponsor engagement across public-to-private, refinancing from syndicated into private, and add-ons; cautiously optimistic for H2 pickup .
Leverage posture: Intentionally reduced to 1.17x; plan to hover near top end of 0.9–1.25x range .
Equipment leasing JV: Diversified pool; potential chunky opportunities tied to data centers/GPUs; aims to produce low double-digit yields once ramped .
Refinancing pressure largely worked through: Only ~10–15% of book at risk for further spread resets in current environment .
Non-traded fund flows: Resilient with only ~20% off pre-tariff levels; supports origination capacity across platform .

Estimates Context

Q2 2025 EPS and revenue beat consensus: EPS $0.424 vs $0.398*, Total investment income $485.8M vs $480.1M* .
Sequentially, adjusted NII per share rose to $0.40 (from $0.39), aided by higher one-time repayment income; EBITDA consensus unavailable for the quarter*.
Forward EPS consensus moderates given lower base rates and stabilized spreads (e.g., Q3 2025 EPS consensus ~$0.394*), implying modestly lower run-rate earnings versus 2024 peaks*.
Values retrieved from S&P Global.*

Key Takeaways for Investors

Near-term: The EPS and revenue beats were driven by elevated prepayment/unplanned paydown income; absent repeat levels, run-rate NII may normalize—watch for Q3 repayment activity and deal volumes .
Dividend: Base dividend ($0.37) appears well-supported by adjusted earnings and spillover (~$0.33/share); management reiterated confidence in maintaining payout through 2025 .
Credit quality: Non-accruals improved to 0.7% and interest coverage rose to ~1.9x; tariff exposure narrower than initially expected; risk lens remains defensive .
Balance sheet: Net leverage reduced to 1.17x with >$4B liquidity and a recent $500M notes issuance—ample capacity to fund attractive opportunities while preserving flexibility .
Medium-term ROE: Expected 50–75 bps uplift from financing synergies and portfolio/JV rebalancing is a credible tailwind as spreads stabilize; potential to offset lower base rates .
Origination mix: Incumbency-driven originations and equipment leasing/data center adjacencies add diversified income streams; watch for contributions in H2 and 2026 .
Valuation drivers: Narrative hinges on dividend stability, credit resilience, and synergy realization; incremental widening of spreads or a pick-up in M&A would be positive catalysts .

Citations: Press release and 8-K (Q2 2025) ; 8-K Item 2.02 (Q2 2025) ; Scheduling PR (Q2) ; Prior quarter PR and call (Q1 2025) ; Q4 2024 PR and call .