Sound Point Meridian (SPMC) Q4 25/26 earnings summary

Executive summary

• Net investment income for Q4 ended March 31, 2026, was $7 million ($0.34 per share), with a net realized loss of $0.20 per share and distributions of $0.75 per share; NAV per share was $9.63 at quarter end.

• Portfolio comprised 98 CLOs managed by 29 managers, with exposure to over 1,500 underlying loans in more than 30 industries and $198.7 million in net assets.

• Significant portfolio rebalancing was undertaken to reduce tail risk and improve forward IRRs, focusing on credits resilient to AI disruption.

• GAAP net loss for the quarter was $74.7 million ($3.63 per share), driven by significant unrealized losses.

• NAV per share rebounded to an estimated $10.57 as of April 30, 2026, reflecting improved market sentiment and loan prices.

Financial highlights

• Total investment income for the quarter was $15.1 million, with total expenses of $8.2 million, resulting in net investment income of $7.0 million ($0.34 per share).

• Net realized loss of $4.1 million and unrealized loss of $77.6 million; GAAP net loss was $74.7 million ($3.63 per share).

• Total assets at quarter end were $374.5 million; net assets were $198.7 million.

• Fair value of investment portfolio was $368.2 million; available liquidity was $5.8 million.

• Monthly cash distributions of $0.20 per share declared for Q2 and Q3 2026, representing a 26.8% annualized dividend yield.

Outlook and guidance

• Distribution levels will be reassessed as earnings, market conditions, and portfolio positioning evolve.

• Expectation for continued positive performance in May, barring material adverse events.

• Focus remains on stabilizing and potentially improving portfolio yield through secondary market opportunities and liability refinancing.

• Monthly distributions also declared for Series A and Series B Term Preferred Stock for Q3 2026.

• Actively managed, flexible investment approach with a focus on relative value and downside protection in the CLO equity space.