MSC Income Fund Reports $15.9 Million Net Increase in Assets for Q1 2025

MSC Income Fund, Inc. reported its financial results for the first quarter of 2025, revealing a net increase in net assets resulting from operations of $15.9 million, or $0.36 per share, compared to $10.6 million, or $0.26 per share, in the same period last year. The company’s total investment income for the quarter was $33.2 million, a slight decrease of 2% from $34.0 million in the prior year. This decline was primarily attributed to a 6% drop in interest income, which fell to $27.4 million, while dividend income surged by 108% to $5.1 million. The overall decrease in investment income was partially offset by a significant reduction in total expenses, which decreased by 15% to $16.4 million.

In terms of operational metrics, MSC Income's investment portfolio as of March 31, 2025, included 84 Private Loan portfolio companies valued at $767.8 million and 57 lower middle market (LMM) companies valued at $439.7 million. The company’s total investments at fair value reached $1.26 billion, up from $1.18 billion at the end of 2024. The weighted-average annual effective yield on the Private Loan portfolio was reported at 11.6%, while the LMM portfolio yielded 13.1%. The company’s net asset value (NAV) per share decreased slightly to $15.35 from $15.53 at the end of the previous quarter.

Strategically, MSC Income has shifted its focus exclusively to its Private Loan investment strategy, moving away from its previous dual strategy that included LMM investments. This transition is expected to reduce the size of the LMM investment portfolio over time as existing investments are repaid or sold. The company also completed a follow-on public offering of 5.5 million shares at $15.53 per share, generating net proceeds of approximately $90.5 million, which will be utilized to support its investment activities.

The company’s debt obligations as of March 31, 2025, totaled $570.7 million, with $260.7 million under its special purpose vehicle revolving credit facility and $160 million under its corporate facility. The average interest rate on these borrowings has decreased, reflecting favorable market conditions. MSC Income maintained a strong liquidity position with $39.5 million in cash and cash equivalents and $124 million of unused capacity under its credit facilities.

Looking ahead, MSC Income anticipates continued challenges from macroeconomic factors, including inflation and potential economic downturns, which could impact the performance of its portfolio companies. However, the company remains committed to managing its cost structure and liquidity to navigate these challenges effectively. The board of directors has declared a regular quarterly dividend of $0.35 per share and a supplemental dividend of $0.01 per share, payable on August 1, 2025, to stockholders of record as of June 30, 2025.