NCDL Navigates Market Shift with Dividend Reset and $50M Buyback

NEW YORK, NY – February 26, 2026 – Nuveen Churchill Direct Lending Corp. (NYSE: NCDL) announced a strategic recalibration of its capital allocation strategy alongside its fourth-quarter and full-year 2025 financial results. The business development company (BDC) revealed a reset of its quarterly distribution, coupled with a new $50 million share repurchase program, signaling a proactive response to a shifting interest rate and economic landscape that has impacted yields across the direct lending sector.

The company reported a net investment income of $0.44 per share for the fourth quarter. However, the full-year results painted a picture of a more challenging environment, with total investment income for 2025 decreasing to $207.9 million from $224.0 million in 2024. Management attributed this decline to tighter credit spreads on new investments, the repricing of existing loans, and a general decline in base interest rates impacting its largely floating-rate portfolio. In response, NCDL is adjusting its course to balance shareholder returns with long-term portfolio stability.

Portfolio Strength Amid Headwinds

Despite the income pressures, NCDL's leadership emphasized the underlying health and resilience of its investment portfolio. As of December 31, 2025, the fair value of the company's investments stood at $2.0 billion, spread across 227 portfolio companies in 26 different industries. This represents continued portfolio growth from $1.6 billion at the end of 2023 and $1.2 billion at the end of 2022, demonstrating the manager's ability to deploy capital effectively.

A key indicator of the portfolio's quality is its exceptionally low non-accrual rate. At year-end, investments on non-accrual status—loans that are no longer generating their stated interest—represented only 0.5% of the total portfolio at fair value. This figure is highly favorable compared to broader industry averages and suggests disciplined underwriting and proactive management of credit risk.

“We are pleased to conclude 2025 with a strong quarter of financial results,” said Ken Kencel, President and Chief Executive Officer of NCDL, in the company’s press release. “Our investment portfolio continues to demonstrate strength and stability... We are encouraged by the positive momentum in deal activity we experienced in the second half of last year, and we remain intensely focused on generating attractive risk adjusted returns for our shareholders.”

The portfolio remains defensively positioned, with approximately 89.5% of its investments in first-lien senior secured debt, offering downside protection. The company's Net Asset Value (NAV) per share saw a slight decline to $17.72 from $18.18 a year prior, a move primarily driven by net unrealized losses on certain investments. However, the strong credit quality and positive deal flow outlook provide a solid foundation as the company navigates the evolving market.

A Strategic Capital Allocation Pivot

The most significant news for investors was the dual announcement of a dividend adjustment and a share buyback. The Board of Directors declared a first-quarter 2026 distribution of $0.40 per share, which consists of a regular quarterly distribution of $0.36 and a supplemental distribution of $0.04. This marks a reset from the previous regular distribution of $0.45 per share.

Shai Vichness, Chief Financial Officer and Treasurer of NCDL, directly addressed the change. “We have reset our regular quarterly distribution to a level that considers the current interest rate and spread environment,” he stated. This move is seen as a prudent measure to align payouts with the company's current earnings power, ensuring the dividend's sustainability.

Paired with this adjustment is the authorization of a new $50 million share repurchase program. This program allows the company to buy back its own stock in the open market at prices below its NAV per share. For BDCs, such programs are a powerful tool for creating shareholder value. Each share repurchased below NAV is immediately accretive to the NAV for remaining shareholders. It also signals management's confidence that the stock is undervalued by the public market.

This is not a new tool for NCDL, which engaged in a similar plan in 2025, repurchasing a significant amount of its stock. The new authorization reinforces this strategy as a core part of its capital allocation playbook.

“In conjunction with the reset of our dividend, we are announcing a new $50 million share repurchase program, which demonstrates our confidence in the overall strength of our portfolio,” Vichness added.

Market Context and Management Fees

The strategic adjustments come as NCDL's full-year expenses also saw an increase. Net expenses before taxes rose to $114.3 million in 2025 from $101.1 million in 2024. The company disclosed this was primarily due to two factors common in externally managed BDCs: a contractual increase in the management fee base rate from 0.75% to 1.00% and the expiration of a prior waiver on incentive fees. These changes, which took effect in March 2025, directly impacted the net income available to shareholders and highlight the importance of understanding a BDC's fee structure.

The broader direct lending market remains competitive, but Churchill's established platform provides a distinct advantage. As an affiliate of Nuveen and TIAA, Churchill Asset Management is one of the most active and decorated lenders in the U.S. middle market. This scale and deep-rooted relationship with private equity sponsors provide NCDL with consistent access to high-quality deal flow, even in a more selective market. The ability to source and execute deals effectively is paramount, and the backing of the Churchill platform provides a crucial edge in maintaining portfolio quality and generating new investment opportunities.