Thank you for standing by. My name is Janine and I will be your lead operator for today's call. At this time, I would like to welcome everyone to the Q4 Crescent Capital BDC Inc. Earnings Conference Call. All lines have been placed on mute to prevent any background noise. And after today's presentation, there will be an opportunity to ask questions. To ask questions, you may press star 1 on your touchstone phone and to withdraw your question, please press star 1 again. I will now turn the call over to Dan, Head of Administrative Relations. Please go ahead.

Good morning, and welcome to Crescent Capital BDC Inc.'s fourth quarter and year-ended December 31, 2024 earnings conference call. Please note that Crescent Capital BDC Inc. may be referred to as CCAP, Crescent BDC, or the company throughout the call. Before we begin, I'll start with some important reminders. Comments made over the course of this conference call and webcast may contain forward-looking statements and are subject to risks and uncertainties. The company's actual results could differ materially from those expressed in such forward-looking statements for any reason, including those listed in its SEC filings. The company assumes no obligation to update any such forward-looking statements. Please also note that past performance for market information is not a guarantee of future Yesterday, after the market closed, the company issued its earnings press release for the fourth quarter and year-ended December 31st, 2024, and posted a presentation to the IR section of its website at www.crescentbdc.com. Presentation should be reviewed in conjunction with the company's Form 10-K filed yesterday with the SEC. As a reminder, this call is being recorded for replay purposes. Speaking on today's call will be CCAP's Chief Executive Officer Jason Brough, President Henry Chung, and Chief Financial Officer Gerhard Lombard. With that, I'd now like to turn it over to Jason.

Thank you, Dan. Hello, everyone, and thank you all for joining us. I'll start today's call by highlighting our fourth quarter results, follow that with some thoughts on our investment approach, and touch on our portfolio. In terms of fourth quarter earnings, we reported NII of $0.55 per share, which translates into an annualized NII return on equity of 11%. The $0.55 compares to $0.64 in the prior quarter and $0.61 in the fourth quarter of 2023. This quarter's NII decline was driven by the impact of a lower investment portfolio yield as base rates at the end of 2024 were roughly 100 basis points lower than where they were at the end of 2023. Additionally, lower levels of non-recurring income in the fourth quarter impacted this quarter's results, as Gerhard will touch on. Based dividend coverage since CCAP's inception, and we note that our NII is well in excess of our base dividend at 131% coverage in the fourth quarter. Our net asset value decreased $0.22 to $19.98 per share in the quarter, driven primarily by changes in unrealized marks. On a year-over-year basis, our NAV per share was down 0.3%. Let's shift gears and discuss the investment portfolio. Please turn to slides 13 and 14 of the presentation, which highlights certain characteristics of our portfolio. We ended the year with approximately $1.6 billion of investments at fair value across a highly diversified portfolio of 185 companies with an average investment size of approximately 0.5% of the total portfolio. Our top 10 largest borrowers represented 15% of the portfolio as we are believers in modulating credit risk through position size, which we believe has served crescent well in previous credit cycles. We have deliberately maintained an investment portfolio that consists primarily of first lien loans, collectively representing 90% of the portfolio at fair value at year end. Unchanged, we continue to focus our investing efforts on non-cyclical industries and remain well diversified across 20 broad industry categorizations. Our investments are almost entirely supported by well-capitalized private equity sponsors with 99 percent of our debt portfolio and sponsor-backed companies as a please turn to slide 17 which shows the trends in internal performance ratings overall we have been pleased with the fundamental performance of our portfolio our weighted average portfolio grade of 2.1 remains stable quarter over quarter on the right hand side of the slide you'll see that one and two rated investments representing names that are performing at or above our underwriting expectations continue to represent the lion's share or 87 percent of our portfolio at fair value the yellow segment of the chart which represents our four and five rated investments remains a de minimis portion of our portfolio at less than one percent of fair value where we did see an increase quarter over quarter was our three rated investment that our philosophy is to be proactive with our portfolio companies we don't want to be slow in anticipating challenges or potential obstacles that warrant heightened focus. We do not, for example, wait until there is a covenant breach before moving an investment that may be experiencing headwinds down the risk rating scale. In Q4, we added seven names to the watch list, collectively marked at 97% of their combined cost. We believe that our tenure in the direct lending space, robust investment process, and focus on the core and lower middle market will continue to drive strong credit performance for CCAP. We continue to lead the majority of our transactions, drive stringent documentation, and maintain our underwriting focus on strong cash flow generating companies. All of this has led to a portfolio today that has non-accruals below the industry average. As of year-end, non-accruals represented 0.9% of total debt investments at fair value and 2.2% of cost. Moving on to our dividend. We declared a first quarter 2025 regular dividend of 42 cents per share. CCAP has been paying stable or increasing regular quarterly base dividends since its inception in 2015. This dividend is payable on April 15, 2025 to stockholders of record as of March 31. We also announced a series of special dividends. Given the measurement test that we applied to our supplemental dividend, we have not declared a supplemental distribution of our excess NII this quarter. Gerard will provide additional details on both in the latter part of our prepared remarks. I'd now like to turn it over to Henry to discuss the market, our Q4 investment activity, and the portfolio.

Henry, fourth quarter, driven by a comment. We are anticipating that LBO volumes and overall deal flow will continue to pick up resulting resulting from a more favorable growth outlook regulatory coupled with a growing demand for several of the factors we continue to believe direct lending delivers a compelling expertise including speed and certainty of execution and flexibility and the ability to serve as a true partner in developing perspective team where we highlight which 98% was closed 14 new platform of these new investments were we continued back well capitalized borrowers with a significant equity meaning 63 million came from incremental investment these were a strong as we saw high levels of opportunistic refinancing and accretive M&A add-on opportunities within our existing borrower universe. The $127 million in gross deployment compares resulting in debt deployment of approximately $21 million for the floor. You can see that the weighted average yield of our income producing is primarily due to a reduction. 97% of our percent floating rate liabilities perform well with year-over-year weighted average revenue 0.9 times. As a reminder, this calculation is based on the latest annuals of managing fixed operating or portfolio companies in the aggregate remain well positioned to stop operating cash flows but it continues to benefit from the substantial amount of equity investment 37.7 caps non-recurring investment income which

consists in common stock normally high levels of one-time prepayment income and accelerated oit from regap earnings per share or net income for the fourth quarter of 2024 was 27 cents as net investment income as of december 31st our stockholders equity was 700 that we were evaluating strategies to extend the maturity dates, we amended the terms of our SMBC revolver, decreasing the size of the facility from 385 and pushing out the mid-29, broken down into two due February 2028, and 80 million of senior unsecured notes due February as of year-end. Positive net deployment brought our debt-to-equity ratio up from 1.15 to 39 million, maintaining a debt announced a series of three 5-14s that are existing variables since announcing 54 cents per share not paid supplementally exceeded 50 percent of this and with that I'd like to look forward over

the remainder of 2025 we believe we're operating in an attractive environment for increased M&A given the significant amount of dry powder on the sidelines aging private equity portfolios and a regulatory environment more conducive to deal making key economic indicators remain relatively healthy and the market outlook suggests more stability around near-term base rates which we view as a positive for broader LBO activity. We continue to apply our disciplined credit underwriting with a focus on capital preservation, strong free cash flow generation, and robust debt service coverage. We believe the growing dispersion of performance and returns across managers will continue to accelerate as rates stay elevated. We believe Crescent and CCAP will continue to be on the right side of this performance, and we look forward to delivering on that. As always, we thank you for joining our call today and look forward to connecting with many of you soon. And with that, operator, we can open the line for you.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should have a question please press star one in your touch down phone and you will hear a prompt that your hand has been raised should you wish to withdraw please press star one again and if you are using a speakerphone please leave the handset before pressing any keys our first question comes from the line of mr robert dodd from raymond james please go ahead sir uh hi guys um just just want to I asked a couple questions about the increase in the related assets, right?

So you say you added seven names and you want to be proactive about it, not wait too late. But were there any common themes that drove that and then are any, if there were, any of those starting to become visible in any other areas of the portfolio?

Hey, Robert, it's Jason. I think seven new names, I would say they all have company sort of specific challenges. That said, we are paying close attention to potential thematic or industry indicators. I think maybe, Henry, you want to comment on that?

Yeah, I'd say there's a handful of themes that we are noticing that we still color on. There's a few subsectors that we found have just top-line pressures on a specific subsector. Another that we have been keeping a close eye on is packaging. There's been some destocking trends, keeping a close eye on the dynamic that hasn't yet returned by just. The last – the new names that were added to the watch list this quarter is businesses that are indexed to the end user of the product or service. In the event that those companies are on the watch list, they are taking longer to recover than what we've seen in the watch list. I'd say that – Got it.

Got it. I appreciate that. I mean, just kind of following on with that, I mean, have you got any preliminary thoughts on exposure or risk from like carrots or doge and government contracting and cost cutting anything? You know, what's your gauge on your relative potential exposure there?

Thanks, Robert. Jason here. It's definitely a topic that we're spending a lot of time thinking about. seems to be in the news every day it's probably a little premature to to get into specifics but but if tariffs do become meaningful in reality I think it certainly has an impact on US companies we've we've tried to drill down into our portfolio a bit in terms of thinking about specific exposures so maybe maybe Henry you want to touch on that as well yeah I'll start with the tariff piece of it.

So what we've really looked at are companies where they are sourcing a material portion of the cost. Looking at this, looking at it based on tree categorization as a whole, that given how service is a pretty small percentage of our portfolio categorizations. On the second part of your question, we also looked at companies that derive within software where there's a government agency that's the end user of that product or service. But that overall in terms of a total of overall, I'd say, on both of those fronts, on both the tariffs on reduction.

God, I appreciate that color there. One more thing. On spreads, I mean, there has been repricing activity, market spreads, archaic, et cetera, stable, but how much of the back book in the portfolio, if you will, has not undergone repricing yet? And do you think there's some risk where spreads in what portion of the portfolio are above the sort of market today, and it's a business that could potentially reprice over the next, you know, call it 12 months?

Yeah. I'll start off by commenting on, I think the repricing dynamic, we saw it all throughout last year, and folks are generally expecting to return goal levels to the extent that that dynamic does not come to make deal activity on the new LBO. That question where if we do see volumes kind of come back on the new LBO from last year, we do see sluggish LBO volume, the repricings in the portfolio. So I think it's really just going to be...

I'll jump in there as well, Robert. I think the fundraising environment certainly plays a factor in the repricing dynamic, and a lot of the capital being raised that needs to get deployed right away is in the non-traded space on the wealth side. The market is generally seeing flows of $2 to $3 billion a month. When you segment that market into sort of managers that are generally targeting the upper bid market, and we would define that as north of a couple hundred million dollars of EBITDA, we think that's about 90% of the flows that are coming into the market today. So as you think about it and as we think about where the pressure is concentrated. I think it's more concentrated at the upper end of the middle market because of those flows and certainly the broadly syndicated loan alternative that issuers have when they get larger in size.

I appreciate that. Thank you. Thank you.

Our next question comes from the line of Nikki Schlein from Lattenburg. Sir, please go ahead.

Yes, good afternoon. A lot of good questions already asked. I was just hoping you could break down at least at a high level your, you know, what drove the realized and unrealized gains and losses for the quarter.

Thanks, Mickey. On the unrealized side, we certainly had some individual movers, watch list related. We did have a pickup in non-accruals as well. So we had some movement and some isolated names. Gerard, do you have any other color for Mickey on that?

Yeah. Hi, Mickey. It's a good question. You know, we did look at this kind of heading into the cold. There are no significant, I'd say, individually material movers in that unrealized bucket. It's really attributable to, you know, some of the comments we made on the prepared remarks, which is a slight increase in the three-rated assets. So as we saw the watchlist names increase, the watchlist is what we define three, four, and five-rated from a risk perspective. There was really a migration of about, I want to say about 40 million or so, 40 million of increased quarter. That's really what drove the higher unrealized versus individual.

Okay, thank you for that. That's my only question this afternoon.

Again, should you have a question, please press star followed by the number one. Our last question comes from the line of Paul Jensen from KBW. Sir, please go ahead.

Good afternoon. Thanks for taking my questions. On the new non-accruals this quarter, Islanding, Marry Cow, Man Lake, are those Crescent originated investments or are those legacy investments from acquisitions?

Three was Crescent, the other two were legacy.

Okay. And then, I mean, in terms of, you know, like the new non-accruals and maybe kind of talking about the watch list names, you know, three rated investments, The majority of these investments, does Crescent have – are these Crescent-led deals where there's a controlling stake that the advisor has in these loans?

Yeah, the majority – this is – I think the other side of the percentage of these are value basis RR.

Okay, thanks for that. That's helpful. And then, just on Mickey's question, I didn't catch it if you said it on the end, but on the realized loss portion, what was the driver this quarter? It looked like a fairly big realized loss was crystallized. Was there anything in there that was exited?

Yeah, so the primary driver there was the restructuring of the portfolio company. That was a non-accrual last quarter, SECO. We completed.

Okay, thanks for that. And then, you know, just kind of looking at some of the new investments this quarter, I saw, you know, several 475s, you know, below 500 basis points spread. Would you say that's kind of where the market is at today, where spreads are now kind of pushing below that 500 mark in the lower core kind of middle market? Or, I mean, was this more of a maybe a phenomenon kind of out of the fourth quarter where a large number of investments were funded at a lower spread?

I'd say it's certainly, at least for Q4 specifically, it seems to be the latter, just kind of looking at where we are in Q1. We are still seeing deals that come within that market. We've certainly seen deals that I think where we are today, we're continuing in line with. But certainly, I think it's indicative, particularly of larger borrowers that are more within that core middle market ideal size where the tranches are larger and more relevant for for some of the new capital that's you'll see us well it's Jason the other thing that I would just add to that is that when we think about structure is and so most of the time when we're

20 million dollars of EBITDA we're not stretching too deep into the capital stack, it looks more like a traditional first lien, which, you know, for Q4 represented about 20% of deployment. But with the lower leverage in that lower middle market segment, we are certainly seeing transactions getting done in the, you know, mid to high fours.

Got it. Thanks for that detail. That's very helpful. You also gave some pretty good information in terms of your thoughts on tariffs you know exposure potential exposure there but I'm also curious you know I mean traditionally the portfolio you know for yourself as well as private credit broadly portfolios have been primarily services business focused and I'm just curious you know with all the the discussions on tariffs I mean does that in any way I guess change the opportunity for, you know, more manufacturing type of businesses, CapEx-heavy type of businesses? Is there a changing opportunity there at all?

I think, this is Henry speaking and Jason, you know, going back to our inception, we've really shied away from businesses, kind of fixed charitable need, for the reasons that we are very focused on. And whether they, whether this is, that dynamic really doesn't change. So I think what you'll continue to see even in this environment is our knitting in terms of where we're focused, how the businesses are capitalized, what they're operating. I really see us leaning more into domestic businesses, even though more broadly, of course, the U.S. economy, there may be opportunity.

Got it. Thank you. That's all for me.

Thank you. That concludes our Q&A session. I will now turn the call back to our CEO, Jason Brill, for closing remarks.

Well, thank you, everyone, for your continued interest and your questions on CCAP. We look forward to speaking with you all soon.

That concludes our conference call for today. You may now disconnect.