Annual report [Section 13 and 15(d), not S-K Item 405]

DEBT

v3.25.0.1
DEBT
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
DEBT DEBT
Summary of Main Street’s debt as of December 31, 2024 is as follows:
Outstanding
Balance
Unamortized Debt
Issuance
(Costs)/Premiums (1)
 Recorded Value
Estimated Fair
Value (2)
(dollars in thousands)
Corporate Facility $ 208,000  $ —  $ 208,000  $ 208,000 
SPV Facility 176,000  —  176,000  176,000 
July 2026 Notes
 500,000  (812) 499,188  482,180 
June 2027 Notes
 400,000  (718) 399,282  407,388 
March 2029 Notes
 350,000  (2,998) 347,002  364,959 
SBIC Debentures 350,000  (6,583) 343,417  298,250 
December 2025 Notes
 150,000  (518) 149,482  149,940 
Total Debt $ 2,134,000  $ (11,629) $ 2,122,371  $ 2,086,717 
___________________________
(1)The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the Consolidated Balance Sheets, while the deferred debt issuance costs related to the July 2026 Notes, June 2027 Notes, March 2029 Notes, SBIC Debentures and December 2025 Notes are reflected as contra-liabilities on the Consolidated Balance Sheets.
(2)Estimated fair value for outstanding debt is shown as if Main Street had adopted the fair value option under ASC 825. See discussion of the methods used to estimate the fair value of Main Street’s debt in Note B.12. — Summary of Significant Accounting Policies — Fair Value of Financial Instruments.
Summary of Main Street’s debt as of December 31, 2023 is as follows:
Outstanding
Balance
Unamortized Debt
Issuance
(Costs)/Premiums (1)
 Recorded Value
Estimated Fair
Value (2)
(dollars in thousands)
Corporate Facility $ 200,000  $ —  $ 200,000  $ 200,000 
SPV Facility 160,000  —  160,000  160,000 
July 2026 Notes
 500,000  (1,338) 498,662  458,105 
May 2024 Notes
 450,000  182  450,182  447,246 
SBIC Debentures 350,000  (5,465) 344,535  288,468 
December 2025 Notes
 150,000  (1,035) 148,965  151,155 
Total Debt $ 1,810,000  $ (7,656) $ 1,802,344  $ 1,704,974 
___________________________
(1)The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the Consolidated Balance Sheets, while the deferred debt issuance costs related to the July 2026 Notes, May 2024 Notes, SBIC Debentures and December 2025 Notes are reflected as contra-liabilities on the Consolidated Balance Sheets.
(2)Estimated fair value for outstanding debt is shown as if Main Street had adopted the fair value option under ASC 825. See discussion of the methods used to estimate the fair value of Main Street’s debt in Note B.12. — Summary of Significant Accounting Policies — Fair Value of Financial Instruments.
Summarized interest expense for the years ended December 31, 2024, 2023 and 2022 is as follows:
Year Ended December 31,
2024 2023 2022
(dollars in thousands)
Corporate Facility $ 27,108  $ 26,605  $ 18,820 
SPV Facility 12,734  14,491  1,375 
July 2026 Notes
 15,526  15,526  15,526 
June 2027 Notes
 13,361  —  — 
March 2029 Notes
 24,269  —  — 
SBIC Debentures 10,690  11,394  11,337 
December 2025 Notes
 12,123  11,704  174 
May 2024 Notes
 7,618  22,855  22,855 
December 2022 Notes
 —  —  8,189 
Total Interest Expense $ 123,429  $ 102,575  $ 78,276 
A summary of Main Street’s average amount of total borrowings outstanding and overall weighted-average effective interest rate including amortization of debt issuance costs, original issuance discounts and premiums and fees on unused lender commitments are as follows:
Year Ended December 31,
2024 2023 2022
(dollars in millions)
Weighted-average borrowings outstanding $ 2,105.6  $ 1,949.0  $ 1,900.5 
Weighted-average effective interest rate 5.9  % 5.3  % 4.1  %
Corporate Facility
Main Street maintains the Corporate Facility to provide additional liquidity to support its investment and operational activities. In June 2024, Main Street entered into an amendment to the Corporate Facility to, among other things: (i) increase the revolving commitments from $995.0 million to $1.11 billion, (ii) increase the accordion feature providing Main Street with the right to request increases in commitments under the facility from new and existing lenders on the same terms and conditions as the existing commitments from up to a total of $1.4 billion to up to a total of $1.665 billion, and (iii) extend the revolving period and the final maturity date through June 2028 and June 2029, respectively, on $1.035 billion of revolving commitments, and August 2026 and August 2027, respectively, on $0.075 billion of revolving commitments.
As of December 31, 2024, borrowings under the Corporate Facility bore interest, subject to Main Street’s election and resetting on a monthly basis on the first of each month, on a per annum basis at a rate equal to the applicable SOFR rate plus an applicable credit spread adjustment of 0.10% plus (i) 1.875% (or the applicable Prime rate plus 0.875%) as long as Main Street meets certain agreed upon excess collateral and maximum leverage requirements or (ii) 2.0% (or the applicable Prime Rate plus 1.0%) otherwise. Main Street pays unused commitment fees of 0.25% per annum on the unused lender commitments under the Corporate Facility. The Corporate Facility is secured by a first lien on the assets of MSCC and its subsidiaries, excluding the equity ownership or assets of the Funds and the External Investment Manager. In connection with the Corporate Facility, MSCC has made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.
As of December 31, 2024, the interest rate for borrowings on the Corporate Facility was 6.5%. The average interest rate for borrowings under the Corporate Facility was 7.1% and 7.0% for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, Main Street was in compliance with all financial covenants of the Corporate Facility.
SPV Facility
Main Street, through MSCC Funding I, LLC (“MSCC Funding”), a wholly-owned Structured Subsidiary that primarily holds debt investments, maintains the SPV Facility to finance its investment and operational activities. In September 2024, Main Street entered into an amendment to the SPV Facility to, among other things: (i) increase the total commitments from $430.0 million to $600.0 million, (ii) increase the accordion feature providing MSCC Funding with the right to request increases in commitments under the facility, subject to the satisfaction of various conditions, from new and existing lenders on the same terms and conditions as the existing commitments to up to a total of $800.0 million, (iii) extend the revolving period from November 2025 to September 2027, (iv) extend the final maturity date from November 2027 to September 2029 and (v) decrease the interest rate to one-month term SOFR plus an applicable margin of (a) 2.35% during the revolving period (from 2.50% plus a 0.10% credit spread adjustment, or 2.60% in total), (b) 2.475% for the first year following the end of the revolving period (from 2.625%) and (c) 2.60% for the second year following the end of the revolving period (from 2.75%).
As of December 31, 2024, the SPV Facility included total commitments of $600.0 million from a diversified group of six lenders. Advances under the SPV Facility bear interest at a per annum rate equal to the one-month term SOFR in effect, plus an applicable margin of 2.35% during the revolving period and 2.475% and 2.60% during the first and second years thereafter, respectively. MSCC Funding pays a commitment fee of 0.50% per annum on the unused lender commitments up to 35% of the total lender commitments and 0.75% per annum on the unused lender commitments greater than 35% of the total lender commitments. The SPV Facility is secured by a collateral loan on the assets of MSCC Funding and its subsidiaries. In connection with the SPV Facility, MSCC Funding has made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.
As of December 31, 2024, the interest rate for borrowings on the SPV Facility was 6.9%. The average interest rate for borrowings under the SPV Facility was 7.7% and 7.6% for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, MSCC Funding was in compliance with all financial covenants of the SPV Facility.
MSCC Funding’s balance sheets as of December 31, 2024 and 2023 are as follows:
Balance Sheets
(dollars in thousands)
December 31, 2024
December 31, 2023
ASSETS
Investments at fair value:
Non-Control Investments (cost: $351,053 and $315,373 as of December 31, 2024 and 2023, respectively)
 $ 350,892  $ 317,392 
Cash and cash equivalents 11,212  12,817 
Interest and dividend receivable and other assets 4,124  2,956 
Deferred financing costs (net of accumulated amortization of $1,859 and $783 as of December 31, 2024 and 2023, respectively)
 6,512  3,829 
Total assets $ 372,740  $ 336,994 
LIABILITIES
SPV Facility $ 176,000  $ 160,000 
Accounts payable and other liabilities to affiliates 65  7,170 
Interest payable 1,229  1,135 
Total liabilities 177,294  168,305 
NET ASSETS
Contributed capital 138,088  138,163 
Total undistributed earnings 57,358  30,526 
Total net assets 195,446  168,689 
Total liabilities and net assets $ 372,740  $ 336,994 
MSCC Funding’s statements of operations for the years ended December 31, 2024 and 2023 and the period from November 22, 2022 to December 31, 2022 are as follows:
Statements of Operations
(dollars in thousands)
Year Ended
December 31,		 Period from November 22, 2022 to December 31,
2024 2023 2022
INVESTMENT INCOME:
Interest, fee and dividend income:
Non‑Control/Non‑Affiliate investments $ 43,477  $ 40,152  $ 3,454 
Total investment income 43,477  40,152  3,454 
EXPENSES:
Interest (12,734) (14,491) (1,414)
Management Fee to MSCC (1,648) (1,603) (89)
General and administrative (121) (130) (25)
Total expenses (14,503) (16,224) (1,528)
NET INVESTMENT INCOME 28,974  23,928  1,926 
NET UNREALIZED APPRECIATION (DEPRECIATION):
Non‑Control/Non‑Affiliate investments (2,181) 264  4,408 
Total net unrealized appreciation (depreciation) (2,181) 264  4,408 
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 26,793  $ 24,192  $ 6,334 
July 2026 Notes
In January 2021, Main Street issued $300.0 million in aggregate principal amount of 3.00% unsecured notes due July 14, 2026 (the “July 2026 Notes”) at an issue price of 99.004%. Subsequently, in October 2021, Main Street issued an additional $200.0 million in aggregate principal amount of the July 2026 Notes at an issue price of 101.741%. The July 2026 Notes issued in October 2021 have identical terms as, and are a part of a single series with, the July 2026 Notes issued in January 2021. The July 2026 Notes are unsecured obligations and rank pari passu with Main Street’s current and future unsecured indebtedness. The July 2026 Notes may be redeemed in whole or in part at any time at Main Street’s option subject to certain make-whole provisions. The July 2026 Notes bear interest at a rate of 3.00% per year payable semiannually on January 14 and July 14 of each year.
As of December 31, 2024, Main Street was in compliance with all covenants and other requirements of the July 2026 Notes.
June 2027 Notes
In June 2024, Main Street issued $300.0 million in aggregate principal amount of 6.50% unsecured notes due June 4, 2027 (the “June 2027 Notes”) at an issue price of 99.793%. Subsequently, in September 2024, Main Street issued an additional $100.0 million in aggregate principal amount of the June 2027 Notes at a public offering price of 102.134% resulting in a yield-to-maturity of 5.617% on such issuance. The $400.0 million of outstanding June 2027 Notes bear interest at 6.50% per year with a yield-to-maturity of 6.34%. The June 2027 Notes issued in September 2024 have identical terms as, and are a part of a single series with, the June 2027 Notes issued in June 2024. The June 2027 Notes are unsecured obligations and rank pari passu with Main Street’s current and future unsecured indebtedness. The June 2027 Notes may be redeemed in whole or in part at any time at Main Street’s option subject to certain make-whole provisions. The June 2027 Notes bear interest at a rate of 6.50% per year payable semiannually on June 4 and December 4 of each year.
As of December 31, 2024, Main Street was in compliance with all covenants and other requirements of the June 2027 Notes.
March 2029 Notes
In January 2024, Main Street issued $350.0 million in aggregate principal amount of 6.95% unsecured notes due March 1, 2029 (the “March 2029 Notes”) at an issue price of 99.865%. The March 2029 Notes are unsecured obligations and rank pari passu with Main Street’s current and future unsecured indebtedness. The March 2029 Notes may be redeemed in whole or in part at any time at Main Street’s option subject to certain make-whole provisions. The March 2029 Notes bear interest at a rate of 6.95% per year payable semiannually on March 1 and September 1 of each year.
As of December 31, 2024, Main Street was in compliance with all covenants and other requirements of the March 2029 Notes.
SBIC Debentures
Under existing SBIC regulations, SBA-approved SBICs under common control have the ability to issue debentures guaranteed by the SBA up to a regulatory maximum amount of $350.0 million. In March 2024, Main Street repaid $63.8 million of SBIC debentures that had reached maturity, which reduced the total outstanding SBIC debentures to $286.2 million. Subsequently, in September 2024, Main Street borrowed an additional $63.8 million of SBIC debentures, which increased the total outstanding SBIC debentures to $350.0 million. Main Street’s SBIC debentures payable, under existing SBA-approved commitments, were $350.0 million as of both December 31, 2024 and 2023. SBIC debentures provide for interest to be paid semiannually, with principal due at the applicable 10-year maturity date of each debenture. Main Street expects to maintain SBIC debentures under the SBIC program in the future, subject to periodic repayments and borrowings, in an amount up to the regulatory maximum amount for affiliated SBIC funds. The weighted-average annual interest rate on the SBIC debentures was 3.3% and 3.0% as of December 31, 2024 and 2023, respectively. The first principal maturity due under the existing SBIC debentures is in 2027, and the weighted-average remaining duration as of December 31, 2024 was 5.6 years. In accordance with SBIC regulations, the Funds are precluded from incurring additional non-SBIC debt without the prior approval of the SBA.
As of December 31, 2024, the SBIC debentures consisted of (i) $175.0 million par value of SBIC debentures outstanding issued by MSMF, with a recorded value of $170.3 million that was net of unamortized debt issuance costs of $4.7 million, and (ii) $175.0 million par value of SBIC debentures issued by MSC III with a recorded value of $173.1 million that was net of unamortized debt issuance costs of $1.9 million.
The maturity dates and fixed interest rates for Main Street’s SBIC debentures as of December 31, 2024 and 2023 are summarized as follows:
Maturity Date Fixed Interest Rate Principal Balance
December 31,
2024		 December 31,
2023
3/1/2024 3.95% $ —  $ 39,000,000 
3/1/2024 3.55% —  24,800,000 
3/1/2027 3.52% 40,400,000  40,400,000 
9/1/2027 3.19% 34,600,000  34,600,000 
3/1/2028 3.41% 43,000,000  43,000,000 
9/1/2028 3.55% 32,000,000  32,000,000 
3/1/2030 2.35% 15,000,000  15,000,000 
9/1/2030 1.13% 10,000,000  10,000,000 
9/1/2030 1.31% 10,000,000  10,000,000 
3/1/2031 1.94% 25,200,000  25,200,000 
9/1/2031 1.58% 60,000,000  60,000,000 
9/1/2033 5.74% 16,000,000  16,000,000 
3/1/2035 5.34% 63,800,000  — 
Ending Balance $ 350,000,000  $ 350,000,000 
December 2025 Notes
In December 2022, Main Street issued $100.0 million in aggregate principal amount of 7.84% Series A unsecured notes due December 23, 2025 (the “December 2025 Series A Notes”) at par. In February 2023, Main Street issued an additional $50.0 million in aggregate principal amount of 7.53% Series B unsecured notes due December 23, 2025 (the “December 2025 Series B Notes” and, together with the December 2025 Series A Notes, the “December 2025 Notes”) at par. The December 2025 Notes are unsecured obligations and rank pari passu with Main Street’s current and future unsecured indebtedness. The December 2025 Notes may be redeemed in whole or in part at any time at Main Street’s option at par plus accrued interest to the prepayment date, subject to certain make-whole provisions. The December 2025 Series A Notes and the December 2025 Series B Notes bear interest at a rate of 7.84% and 7.53% per year, respectively, payable semiannually on June 23 and December 23 of each year. In addition, Main Street is obligated to offer to repay the December 2025 Notes at par plus accrued and unpaid interest if certain change in control events occur. The December 2025 Notes will bear interest at an increased rate from the date that (i) the December 2025 Notes receive a below investment grade rating by a rating agency if there is one or two rating agencies providing ratings of the December 2025 Notes, or two-thirds of the rating agencies if there are three rating agencies who are rating the notes (a “Below Investment Grade Event”), or (ii) the ratio of the Company’s consolidated secured indebtedness (other than indebtedness of the Funds or any Structured Subsidiaries) to the value of its consolidated total assets is greater than 0.35 to 1.00 (a “Secured Debt Ratio Event”), to and until the date on which the Below Investment Grade Event and the Secured Debt Ratio Event are no longer continuing. The governing agreement for the December 2025 Notes contains customary terms and conditions for senior unsecured notes issued in a private placement, as well as customary events of default with customary cure and notice periods.
As of December 31, 2024, Main Street was in compliance with all covenants and other requirements of the December 2025 Notes.
May 2024 Notes
In May 2024, Main Street repaid the $450.0 million principal amount of the issued and outstanding 5.20% unsecured notes (the “May 2024 Notes”) at maturity at par value plus the accrued and unpaid interest. The outstanding aggregate principal amount of the May 2024 Notes was $450.0 million as of December 31, 2023.
December 2022 Notes
In December 2022, Main Street repaid the $185.0 million principal amount of the issued and outstanding 4.50% unsecured notes (the “December 2022 Notes”) at maturity at par value plus the accrued and unpaid interest.
Contractual Payment Obligations
A summary of Main Street’s contractual payment obligations for the repayment of outstanding indebtedness as of December 31, 2024 is as follows:
2025 2026 2027 2028 2029 Thereafter Total
(dollars in thousands)
Corporate Facility $ —  $ —  $ 14,100  $ —  $ 193,900  $ —  $ 208,000 
SPV Facility —  —  —  —  176,000  —  176,000 
July 2026 Notes
 —  500,000  —  —  —  —  500,000 
June 2027 Notes
 —  —  400,000  —  —  —  400,000 
March 2029 Notes —  —  —  —  350,000  —  350,000 
SBIC debentures —  —  75,000  75,000  —  200,000  350,000 
December 2025 Notes
 150,000  —  —  —  —  —  150,000 
Total $ 150,000  $ 500,000  $ 489,100  $ 75,000  $ 719,900  $ 200,000  $ 2,134,000 
Senior Securities
Information about Main Street’s senior securities is shown in the following table as of December 31 for the years indicated in the table, unless otherwise noted.
Total Amount Outstanding Exclusive of Treasury Securities (1) Asset Coverage per Unit (2) Involuntary Liquidating Preference per Unit (3) Average Market Value per Unit (4)
(dollars in thousands)
SBIC Debentures
2015 $ 225,000  $ 2,368  —  N/A
2016 240,000  2,415  —  N/A
2017 295,800  2,687  —  N/A
2018 345,800  2,455  —  N/A
2019 311,800  2,363  —  N/A
2020 309,800  2,244  —  N/A
2021 350,000  1,985  —  N/A
2022 350,000  2,044  —  N/A
2023 350,000  2,364  —  N/A
2024 350,000  2,306  —  N/A
Corporate Facility
2015 $ 291,000  $ 2,368  —  N/A
2016 343,000  2,415  —  N/A
2017 64,000  2,687  —  N/A
2018 301,000  2,455  —  N/A
2019 300,000  2,363  —  N/A
2020 269,000  2,244  —  N/A
2021 320,000  1,985  —  N/A
2022 407,000  2,044  —  N/A
2023 200,000  2,364  —  N/A
2024 208,000  2,306  —  N/A
SPV Facility
2022 $ 200,000  $ 2,044  —  N/A
2023 160,000  2,364  —  N/A
2024 176,000  2,306  —  N/A
April 2023 Notes
2015 $ 90,738  $ 2,368  —  $ 25.40 
2016 90,655  2,415  —  25.76 
2017 90,655  2,687  —  25.93 
December 2019 Notes
2015 $ 175,000  $ 2,368  —  N/A
2016 175,000  2,415  —  N/A
2017 175,000  2,687  —  N/A
2018 175,000  2,455  —  N/A
December 2022 Notes
2017 $ 185,000  $ 2,687  —  N/A
Total Amount Outstanding Exclusive of Treasury Securities (1) Asset Coverage per Unit (2) Involuntary Liquidating Preference per Unit (3) Average Market Value per Unit (4)
(dollars in thousands)
2018 185,000  2,455  —  N/A
2019 185,000  2,363  —  N/A
2020 185,000  2,244  —  N/A
2021 185,000  1,985  —  N/A
May 2024 Notes
2019 $ 325,000  $ 2,363  —  N/A
2020 450,000  2,244  —  N/A
2021 450,000  1,985  —  N/A
2022 450,000  2,044  —  N/A
2023 450,000  2,364  —  N/A
July 2026 Notes
2021 $ 500,000  $ 1,985  —  N/A
2022 500,000  2,044  —  N/A
2023 500,000  2,364  —  N/A
2024 500,000  2,306  —  N/A
December 2025 Notes
2022 $ 100,000  $ 2,044  —  N/A
2023 150,000  2,364  —  N/A
2024 150,000  2,306  —  N/A
March 2029 Notes
2024 $ 350,000  $ 2,306  —  N/A
June 2027 Notes
2024 $ 400,000  $ 2,306  —  N/A
___________________________
(1)Total amount of each class of senior securities outstanding at the end of the period presented.
(2)Asset coverage per unit is the ratio of the carrying value of Main Street’s total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.
(3)The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “—” indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.
(4)Average market value per unit for the April 2023 Notes represents the average of the daily closing prices as reported on the NYSE during the period presented. Average market value per unit for all other senior securities included in the table is not applicable because these are not registered for public trading.