Quarterly report [Sections 13 or 15(d)]

INVESTMENTS (Tables)

v3.25.1
INVESTMENTS (Tables)
 6 Months Ended
Mar. 31, 2025
Investments, Debt and Equity Securities [Abstract]  
Schedule of Fair Value, Assets Measured on Recurring Basis
As of March 31, 2025 and September 30, 2024, our investments, by security type, at fair value were categorized as follows within the ASC 820 fair value hierarchy:
Fair Value Measurements
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
 Fair Value
As of March 31, 2025:
Secured first lien debt
 $ —  $ —  $ 541,524  $ 541,524 
Secured second lien debt
 —  —  144,970  144,970 
Unsecured debt
 —  —  335 

335 
Preferred equity
 —  —  25,031 

25,031 
Common equity/equivalents
 — 

—  45,765  45,765 
Total
 $ —  $ —  $ 757,625  $ 757,625 
Investments measured at NAV(A)
—  —  —  5,011 
Total Investments as of March 31, 2025
 $ —  $ —  $ 757,625  $ 762,636 
Fair Value Measurements
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
 Fair Value
As of September 30, 2024:
Secured first lien debt
 $ —  $ —  $ 554,937  $ 554,937 
Secured second lien debt
 —  —  113,716  113,716 
Unsecured debt
 —  — 

32 

32 
Preferred equity
 —  — 

31,346 

31,346 
Common equity/equivalents
 — 

—  96,191  96,191 
Total
 $ —  $ —  $ 796,222  $ 796,222 
Investments measured at NAV(A)
—  —  —  38 
Total Investments as of September 30, 2024
 $ —  $ —  $ 796,222  $ 796,260 
(A)Includes our investments in Gladstone Alternative and Leeds as of March 31, 2025 and our investment in Leeds as of September 30, 2024. Investments that are measured at fair value using NAV as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented elsewhere in this quarterly report.
The following table presents our portfolio investments, valued using Level 3 inputs within the ASC 820 fair value hierarchy and carried at fair value as of March 31, 2025 and September 30, 2024, by caption on our accompanying Consolidated Statements of Assets and Liabilities and by security type:
Total Recurring Fair Value Measurements Reported in
Consolidated Statements of Assets and Liabilities
Using Significant Unobservable Inputs (Level 3)
March 31, 2025 September 30, 2024
Non-Control/Non-Affiliate Investments
Secured first lien debt $ 505,135  $ 540,661 
Secured second lien debt 136,178  105,169 
Unsecured debt 23  32 
Preferred equity 18,406  27,247 
Common equity/equivalents 25,693 
(A)
 77,757 
(B)
Total Non-Control/Non-Affiliate Investments
 $ 685,435  $ 750,866 
Affiliate Investments
Secured first lien debt $ 229  $ 380 
Preferred equity 6,625  4,099 
Common equity/equivalents 4,103  2,959 
Total Affiliate Investments $ 10,957  $ 7,438 
Control Investments
Secured first lien debt $ 36,160  $ 13,896 
Secured second lien debt 8,792  8,547 
Unsecured debt 312  — 
Common equity/equivalents 15,969  15,475 
Total Control Investments
 $ 61,233  $ 37,918 
Total Investments at Fair Value Using Level 3 Inputs $ 757,625  $ 796,222 

(A)Excludes our investments in Gladstone Alternative and Leeds with fair values of $5.0 million and $36 thousand, respectively, as of March 31, 2025, which were valued using NAV as a practical expedient.
(B)Excludes our investment in Leeds with a fair value of $38 thousand as of September 30, 2024, which was valued using NAV as a practical expedient.
Schedule of Fair Value Measurement Inputs and Valuation Techniques The table below is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to our fair value measurements.
The weighted average calculations in the table below are based on the principal balances for all debt related calculations and on the cost basis for all equity related calculations for the particular input.
Quantitative Information about Level 3 Fair Value Measurements

Range / Weighted Average as of

March 31,
2025		 September 30,
2024
Valuation
Techniques/
Methodologies
Unobservable
Input
 March 31,
2025		 September 30,
2024


Secured first lien debt
 $ 467,857  $ 464,090 
Yield Analysis
 Discount Rate
9.9% - 17.5%
/ 11.7%
10.8% - 17.3%
/ 12.6%

73,667  90,847 
TEV
EBITDA multiple
5.5x – 7.1x
/ 6.2x
4.1x – 13.9x
/ 10.0x


EBITDA
$2,504 - $4,222
/ $3,355
$3,020 - $16,211
/ $10,309


Revenue multiple
0.4x – 0.7x
/ 0.6x
0.2x – 4.6x
/ 2.1x


Revenue
$10,667 - $21,318
/ $15,691
$6,336 - $21,118
/ $13,981


Secured second lien debt
 132,790  101,928 
Yield Analysis
 Discount Rate
11.7% - 15.4%
/ 13.3%
12.2% - 16.0%
/ 14.1%

3,388  3,241 
Market Quote
 IBP
92.0% - 92.0%
/ 92.0%
88.0% - 88.0%
/ 88.0%

8,792  8,547 
TEV
 EBITDA multiple
5.4x – 5.4x
/ 5.4x
5.4x – 5.4x
/ 5.4x


EBITDA
$2,543 - $2,543
/ $2,543
$3,343 - $3,343
/ $3,343


Unsecured debt
 335  32 
TEV
EBITDA multiple
7.1x – 7.1x
/ 7.1x
0.0x – 0.0x
/ 0.0x
EBITDA
$4,222 - $4,222
/ $4,222
$0 - $0
/ $0
Revenue multiple
1.0x – 1.0x
/ 1.0x
1.0x – 1.0x
/ 1.0x


Revenue
$5,616 - $5,616
/ $5,616
$7,834 - $7,834
/ $7,834


Preferred and common equity / equivalents(A)
70,796  127,537 
TEV
 EBITDA multiple
5.0x – 14.5x
/ 7.8x
4.1x – 13.9x
/ 8.0x


EBITDA
$1,318 -$144,799
/ $10,694
$1,182 -$144,458
/ $10,847


Revenue multiple
0.4x – 1.0x
/ 0.5x
0.2x– 4.6x
/ 2.0x


Revenue
$5,402 -$21,318
/ $10,537
$4,672 -$21,118
/ $12,587
Total Level 3 Investments, at Fair Value
 $ 757,625  $ 796,222 
(A)Fair value as of March 31, 2025 excludes our investments in Gladstone Alternative and Leeds with fair values of $5.0 million and $36 thousand, respectively, as of March 31, 2025, which were valued using NAV as a practical expedient. Fair value as of September 30, 2024 excludes our investment in Leeds with a fair value of $38 thousand, which was valued using NAV as a practical expedient.
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
The following tables provide the changes in fair value, broken out by security type, during the three and six months ended March 31, 2025 and 2024 for all investments for which we determine fair value using unobservable (Level 3) inputs.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three months ended March 31, 2025 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of December 31, 2024 $ 586,409  $ 127,234  $ 359  $ 31,294  $ 49,164  $ 794,460 
Total gains (losses):
Net realized gain (loss)(A)
—  —  —  2,954  4,748  7,702 
Net unrealized appreciation (depreciation)(B)
(7,292) (12) (35) 3,691  1,606  (2,042)
Reversal of prior period net depreciation (appreciation) on realization(B)
(22) —  —  (2,954) (4,870) (7,846)
New investments, repayments and settlements: (C)
Issuances/originations
 27,111  18,453  11  —  915  46,490 
Settlements/repayments
 (64,682) (705) —  —  —  (65,387)
Net proceeds from sales
 —  —  —  (9,954) (5,798) (15,752)
Fair Value as of March 31, 2025
 $ 541,524  $ 144,970  $ 335  $ 25,031  $ 45,765  $ 757,625 

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Six months ended March 31, 2025 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2024 $ 554,937  $ 113,716  $ 32  $ 31,346  $ 96,191  $ 796,222 
Total gains (losses):
Net realized gain (loss)(A)
(4,074) —  —  5,404  64,096  65,426 
Net unrealized appreciation (depreciation)(B)
(10,826) 103  (30) 6,827  14,002  10,076 
Reversal of prior period net depreciation (appreciation) on realization(B)
3,559  —  —  (5,404) (60,010) (61,855)
New investments, repayments and settlements: (C)
Issuances/originations
 138,865  47,697  333  6,262  915  194,072 
Settlements/repayments
 (140,937) (16,546) —  —  —  (157,483)
Net proceeds from sales
 —  —  —  (19,404) (69,429) (88,833)
Fair Value as of March 31, 2025
 $ 541,524  $ 144,970  $ 335  $ 25,031  $ 45,765  $ 757,625 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Three months ended March 31, 2024 Secured
First Lien
Debt		 Secured
Second Lien
Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of December 31, 2023 $ 546,602  $ 126,571  $ 23  $ 29,722  $ 46,799  $ 749,717 
Total gains (losses):
Net realized gain (loss)(A)
—  —  —  219  —  219 
Net unrealized appreciation (depreciation)(B)
(1,998) 2,287  10  2,496  7,636  10,431 
Reversal of prior period net depreciation (appreciation) on realization(B)
(19) 157  —  130  —  268 
New investments, repayments and settlements: (C)
Issuances/originations
 29,951  15,177  —  1,000  —  46,128 
Settlements/repayments
 (10,687) (3,783) —  —  —  (14,470)
Net proceeds from sales
 —  —  —  (969) —  (969)
Fair Value as of March 31, 2024
 $ 563,849  $ 140,409  $ 33  $ 32,598  $ 54,435  $ 791,324 

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Six months ended March 31, 2024 Secured
First Lien
Debt		 Secured
Second
Lien Debt		 Unsecured
Debt		 Preferred
Equity		 Common
Equity/
Equivalents		 Total
Fair Value as of September 30, 2023 $ 510,701  $ 127,854  $ 24  $ 26,855  $ 39,128  $ 704,562 
Total gains (losses):
Net realized gain (loss)(A)
—  —  —  219  259  478 
Net unrealized appreciation (depreciation)(B)
4,998  1,543  9  (3,637) 15,591  18,504 
Reversal of prior period net depreciation (appreciation) on realization(B)
(19) 157  —  130  (283) (15)
New investments, repayments and settlements: (C)
Issuances/originations
 79,975  15,362  —  10,000  —  105,337 
Settlements/repayments
 (31,806) (4,507) —  —  —  (36,313)
Net proceeds from sales
 —  —  —  (969) (260) (1,229)
Fair Value as of March 31, 2024
 $ 563,849  $ 140,409  $ 33  $ 32,598  $ 54,435  $ 791,324 
(A)Included in net realized gain (loss) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(B)Included in net unrealized appreciation (depreciation) on investments on our accompanying Consolidated Statements of Operations for the corresponding period.
(C)Includes increases in the cost basis of investments resulting from new portfolio investments, accretion of discounts, PIK, and other non-cash disbursements to portfolio companies, as well as decreases in the cost basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs and other cost-basis adjustments.
Schedule of Investment Holdings
The following table outlines our investments by security type as of March 31, 2025 and September 30, 2024:
March 31, 2025 September 30, 2024
Cost Fair Value Cost Fair Value
Secured first lien debt $ 574,590  72.8  % $ 541,524  71.0  % $ 580,736  75.3  % $ 554,937  69.7  %
Secured second lien debt 144,842  18.3  144,970  19.0  113,691  14.8  113,716  14.3 
Unsecured debt 531  0.1  335  0.1  198  0.0  32  0.0 
Total debt investments 719,963  91.2  686,829  90.1  694,625  90.1  668,685  84.0 
Preferred equity 37,279  4.7  25,031  3.3  45,017  5.8  31,346  3.9 
Common equity/equivalents 31,951  4.1  50,776  6.6  31,369  4.1  96,229  12.1 
Total equity investments
 69,230  8.8  75,807  9.9  76,386  9.9  127,575  16.0 
Total Investments
 $ 789,193  100.0  % $ 762,636  100.0  % $ 771,011  100.0  % $ 796,260  100.0  %
Our investments at fair value consisted of the following industry classifications as of March 31, 2025 and September 30, 2024:
March 31, 2025 September 30, 2024
Industry Classification Fair Value Percentage of
Total
Investments		 Fair Value Percentage of
Total
Investments
Healthcare, Education, and Childcare $ 218,439  28.6  % $ 101,707  12.8  %
Diversified/Conglomerate Manufacturing 177,211  23.2  160,264  20.1 
Diversified/Conglomerate Service 95,686  12.5  179,032  22.5 
Beverage, Food, and Tobacco 92,901  12.2  88,327  11.1 
Aerospace and Defense 59,193  7.8  153,096  19.2 
Automobile 27,954  3.7  28,286  3.6 
Machinery 22,956  3.0  21,816  2.7 
Cargo Transportation 20,200  2.7  20,200  2.5 
Oil and Gas 19,358  2.5  20,554  2.6 
Personal and Non-Durable Consumer Products 12,618  1.7  13,586  1.7 
Printing and Publishing 5,515  0.7  4,312  0.5 
Other, < 2.0%
 10,605  1.4  5,080  0.7 
Total Investments $ 762,636  100.0  % $ 796,260  100.0  %
Our investments at fair value were included in the following U.S. geographic regions as of March 31, 2025 and September 30, 2024:
March 31, 2025 September 30, 2024
Location
Fair Value
Percentage of
Total
Investments
Fair Value
Percentage of
Total Investments
South $ 250,685  32.9  % $ 314,010  39.4  %
West 243,031  31.8  249,082  31.3 
Midwest 215,704  28.3  192,897  24.2 
Northeast 53,216  7.0  40,271  5.1 
Total Investments $ 762,636  100.0  % $ 796,260  100.0  %
Schedule of Investments Classified by Contractual Maturity Date
The following table summarizes the contractual principal repayment and maturity of our investment portfolio by fiscal year, assuming no voluntary prepayments, as of March 31, 2025:
Amount
For the remaining six months ending September 30:
2025(A)
$ 9,175 
For the fiscal years ending September 30:
 2026 138,231 

2027 160,243 

2028 220,197 

2029 92,463 

Thereafter 100,775 

Total contractual repayments
 $ 721,084 

Adjustments to cost basis of debt investments (1,121)

Investments in equity securities 69,230 

Investments held as of March 31, 2025 at cost:
 $ 789,193 
(A)Includes debt investments with contractual principal amounts totaling $0.5 million for which the maturity date has passed as of March 31, 2025.