Sound Point Meridian (SPMC) investor relations material

Executive summary

• Net investment income for Q1 FY2026 was $5.1 million ($0.24/share), with distributions of $0.60/share, exceeding NII due to spread tightening and higher loss reserves for AI-impacted software loans.

• Net asset value (NAV) per share was $9.88 as of June 30, 2026, up from $9.63 last quarter, driven by unrealized appreciation in CLO equity investments.

• Portfolio comprised 108 CLOs managed by 31 managers, with exposure to over 1,500 loans in 30+ industries.

• Declared monthly distributions for common and preferred stock for Q3 fiscal 2027, payable in Q4 2026.

• Provided updates on portfolio activity and management fee waivers through July 31, 2026.

Financial highlights

• GAAP net income for the quarter was $17.5 million ($0.83/share); net realized loss of $12.8 million and unrealized gain of $25.2 million recorded.

• Total investment income was $12.43 million; total expenses were $7.4 million.

• Fair value of investment portfolio was $363.2 million; net assets stood at $208.1 million.

• Leverage ratio stood at 45.7% of total assets; available liquidity was $21 million.

• Distributions paid during the quarter totaled $0.60 per common share, with an annualized distribution rate of 24.2%.

Outlook and guidance

• Q4 2026 monthly distributions set at $0.13/share, down from $0.20/share in Q3, to maintain balance sheet flexibility and support NAV.

• Fee waiver announced for H2 2026, reducing base management fee to 1.5% and incentive fee to 15% to offset income compression.

• Portfolio yield improved from 9.1% to 9.8% quarter-over-quarter, with July yields around 10.1%.

• Estimated NAV per share for July 31, 2026: $9.56–$9.66.

• Focus remains on portfolio rotation, refinancing, and trading to boost NII and support future distributions.