Sound Point Meridian (SPMC) Q3 25/26 earnings summary

Executive summary

• Net investment income for the quarter was $9 million, or $0.44 per share, with a net realized loss of $0.05 per share and NAV per share at $14.02 as of December 31, 2025.

• Distributions paid during the quarter totaled $0.75 per share, with an annualized yield of 21.8% based on the year-end share price.

• Portfolio remains highly diversified with 97 CLOs across 30 managers, providing exposure to over 1,500 loan issuers in more than 30 industries.

• Management's unaudited estimate of NAV per share as of January 31, 2026, was $13.40.

Financial highlights

• GAAP net loss for the quarter was $43.9 million, or $2.14 per share, driven by $1.1 million in realized losses and $51.8 million in unrealized losses.

• Total assets at quarter end were $474.7 million; net assets were $287.9 million; investment portfolio fair value was $473.5 million.

• Available liquidity was approximately $525,000; outstanding debt was 39% of total assets.

• Leverage ratio increased to 39.1% from 35% in the previous quarter.

• Received $29.6 million in cash distributions from the investment portfolio during the fourth fiscal quarter.

Outlook and guidance

• Board set Q2 2026 monthly distributions at $0.20 per share, down from $0.25, reflecting lower portfolio yields and a focus on balance sheet flexibility.

• Management expects refinancing optionality in 2026 to help offset loan yield compression, with ongoing evaluation of distribution levels as market conditions evolve.

• Portfolio yield ticked up to 11.4% in January 2026, partly due to refinancing activity, with further yield improvement possible as more deals become callable.

• Management continues to focus on actively managed, flexible investment strategies with an emphasis on relative value and downside protection.