Andalusian Credit Swings to Profit, Boosted by Investment Income

TL;DR

**Andalusian Credit is back in the black, and their aggressive share issuance is fueling massive asset growth – a clear buy signal for long-term investors.**

AI Summary

Andalusian Credit Company, LLC reported a significant turnaround in its financial performance for the six months ended June 30, 2025, with net investment income reaching $2,080,733, a substantial improvement from a net investment loss of $3,931,258 in the prior year period. Total investment income surged to $7,404,720 for the six months ended June 30, 2025, up from $1,444,326 in the same period of 2024, primarily driven by a sharp increase in interest income from non-controlled/non-affiliated investments to $5,851,619 from $1,138,311. The company's total assets grew by 54.7% to $235,087,073 as of June 30, 2025, compared to $151,920,751 at December 31, 2024. Net assets also increased significantly to $233,568,968 from $149,749,277 over the same period, largely due to $82,037,351 in net proceeds from the issuance of shares. Investments in non-controlled non-affiliated investments, at fair value, increased to $138,612,837 from $91,188,202. Despite a net change in unrealized depreciation of $298,393 for the six months ended June 30, 2025, the company's net asset value per share rose to $15.32 from $15.18.

Why It Matters

Andalusian Credit Company's strong rebound in net investment income and significant asset growth signals a positive shift for investors, demonstrating effective capital deployment and improved portfolio performance. The substantial increase in investment income, particularly from non-controlled/non-affiliated investments, suggests a robust strategy in a competitive credit market. This performance could attract new investors and potentially lead to higher distributions, while also strengthening the company's position against competitors by expanding its investment base. Employees may see increased job security and growth opportunities as the company expands its asset base and operational scale. For customers, a healthier Andalusian Credit Company means a more stable and reliable financing partner.

Risk Assessment

Risk Level: medium — The company's significant reliance on Level 3 investments, which constitute 59.4% of total investments at fair value as of June 30, 2025, introduces valuation uncertainty. These investments use 'significant unobservable inputs,' making their fair value subjective and potentially volatile. Additionally, the net change in unrealized depreciation of $298,393 for the six months ended June 30, 2025, indicates potential downside risk in its investment portfolio.

Analyst Insight

Investors should closely monitor the composition and performance of Andalusian Credit Company's Level 3 investments, as these unobservable inputs can introduce significant valuation risk. While the strong net investment income is positive, a deeper dive into the underlying credit quality of its debt investments, particularly those with variable rates, is warranted given the current interest rate environment.

Financial Highlights

debt To Equity

N/A

revenue

$7,404,720

operating Margin

N/A

total Assets

$235,087,073

total Debt

N/A

net Income

$2,080,733

eps

$0.13

gross Margin

N/A

cash Position

N/A

revenue Growth

+413.7%

Revenue Breakdown

Key Numbers

• $2.08M — Net Investment Income (Swung from a $3.93M loss in the prior year period for the six months ended June 30, 2025.)
• $7.40M — Total Investment Income (Increased from $1.44M in the prior year period for the six months ended June 30, 2025.)
• $235.09M — Total Assets (Increased by 54.7% from $151.92M at December 31, 2024, to June 30, 2025.)
• $82.04M — Net Proceeds from Share Issuance (Significant capital infusion for the six months ended June 30, 2025.)
• $15.32 — Net Asset Value Per Share (Increased from $15.18 at December 31, 2024, to June 30, 2025.)
• 59.4% — Level 3 Investments (Percentage of total investments at fair value as of June 30, 2025, indicating valuation risk.)
• $298,393 — Net Unrealized Depreciation (Recorded for the six months ended June 30, 2025, indicating portfolio value adjustments.)

Key Players & Entities

• Andalusian Credit Company, LLC (company) — Registrant
• $2,080,733 (dollar_amount) — Net investment income for six months ended June 30, 2025
• $3,931,258 (dollar_amount) — Net investment loss for six months ended June 30, 2024
• $7,404,720 (dollar_amount) — Total investment income for six months ended June 30, 2025
• $1,444,326 (dollar_amount) — Total investment income for six months ended June 30, 2024
• $235,087,073 (dollar_amount) — Total assets as of June 30, 2025
• $151,920,751 (dollar_amount) — Total assets as of December 31, 2024
• $82,037,351 (dollar_amount) — Net proceeds from issuance of shares for six months ended June 30, 2025
• $15.32 (dollar_amount) — Net asset value per share as of June 30, 2025
• $15.18 (dollar_amount) — Net asset value per share as of December 31, 2024

FAQ

Risk Factors

• Valuation of Level 3 Investments [high — financial]: As of June 30, 2025, Level 3 investments constituted 59.4% of total investments at fair value. These investments are valued using unobservable inputs, introducing significant estimation risk and potential for volatility in net asset value.
• Interest Rate Sensitivity [medium — market]: The company's performance is heavily reliant on interest income. Fluctuations in interest rates could materially impact investment income and the fair value of its debt and fixed-income investments.
• Net Unrealized Depreciation [medium — financial]: The company recorded a net change in unrealized depreciation of $298,393 for the six months ended June 30, 2025. This indicates that the fair value of some investments decreased, impacting overall portfolio performance.
• Reliance on External Management [medium — operational]: The company is externally managed, implying a reliance on the expertise and operational capabilities of its management team. Any deficiencies in management could negatively affect the company's operations and investment strategies.
• Capital Infusion Dependence [medium — financial]: The significant increase in net assets was driven by $82,037,351 in net proceeds from share issuance. Future growth and operations may be dependent on continued access to capital markets.

Industry Context

Andalusian Credit Company operates within the credit and investment sector, which is sensitive to interest rate environments and capital market conditions. The sector is characterized by a need for robust risk management, particularly concerning investment valuations and credit quality. Companies in this space often rely on strategic capital raises to fuel growth and expand their investment portfolios.

Regulatory Implications

As a financial entity, Andalusian Credit Company is subject to various financial regulations. The company's reliance on fair value accounting, especially for Level 3 assets, necessitates stringent internal controls and transparent disclosures to meet regulatory expectations and maintain investor confidence.

What Investors Should Do

1. Monitor Level 3 Investment Valuation
2. Assess Interest Rate Sensitivity
3. Evaluate Capital Raising Strategy
4. Analyze Investment Income Drivers

Key Dates

• 2025-06-30: Six months ended June 30, 2025 Financials Reported — Demonstrated a significant financial turnaround with substantial net investment income and revenue growth, driven by increased interest income.
• 2025-06-30: Total Assets Reached $235,087,073 — Represents a 54.7% increase from December 31, 2024, indicating significant business expansion and asset growth.
• 2025-06-30: Net Proceeds from Share Issuance of $82,037,351 — A major capital infusion that significantly boosted net assets and provided resources for investment.
• 2025-06-30: Net Asset Value Per Share Increased to $15.32 — Shows a positive trend in shareholder value, despite some unrealized depreciation, reflecting overall portfolio growth.
• 2024-12-31: Prior Year-End Financial Position — Provides a baseline for comparison, highlighting the dramatic improvement in performance and asset base in the current period.

Glossary

Net Investment Income

The income generated from a company's investments after deducting its operating expenses. (Key profitability metric for Andalusian Credit Company, showing a strong recovery from a loss to a significant gain.)

Non-controlled/Non-affiliated Investments

Investments in entities where the company does not have control or a significant affiliation, typically valued at fair value. (The primary driver of the company's increased investment income, with a substantial rise in interest generated from these assets.)

Level 3 Investments

Investments valued using pricing models or methodologies that use unobservable inputs. These are the most subjective and potentially volatile investments. (Represents a significant portion (59.4%) of the company's investments, indicating a higher degree of valuation risk.)

Net Unrealized Depreciation

The decrease in the fair value of investments that has not yet been sold or realized. (Indicates a reduction in the portfolio's value during the period, despite overall positive performance.)

Net Asset Value (NAV) Per Share

The market value of a company's assets minus its liabilities, divided by the number of outstanding shares. (A key measure of shareholder value, which has shown a modest increase for Andalusian Credit Company.)

Year-Over-Year Comparison

Compared to the prior year period, Andalusian Credit Company has demonstrated a remarkable turnaround. Total investment income surged by over 413% to $7.40 million, primarily due to a significant increase in interest income from non-controlled/non-affiliated investments. This propelled net investment income from a substantial loss of $3.93 million to a gain of $2.08 million. Total assets also grew by an impressive 54.7% to $235.09 million, supported by a large capital infusion from share issuance. While NAV per share saw a modest increase, the company now faces increased valuation risk due to a higher proportion of Level 3 investments.

Key Financial Figures

• $0.001 — Liability Company Interests, par value $0.001 per share . Indicate by check mark wh

Filing Documents

• tmb-20250630x10q.htm (10-Q) — 2958KB
• tmb-20250630xex31d1.htm (EX-31.1) — 11KB
• tmb-20250630xex31d2.htm (EX-31.2) — 12KB
• tmb-20250630xex32d1.htm (EX-32.1) — 6KB
• tmb-20250630xex32d2.htm (EX-32.2) — 6KB
• 0001410578-25-001751.txt ( ) — 9609KB
• tmb-20250630.xsd (EX-101.SCH) — 53KB
• tmb-20250630_cal.xml (EX-101.CAL) — 56KB
• tmb-20250630_def.xml (EX-101.DEF) — 203KB
• tmb-20250630_lab.xml (EX-101.LAB) — 445KB
• tmb-20250630_pre.xml (EX-101.PRE) — 322KB
• tmb-20250630x10q_htm.xml (XML) — 1774KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 1 2 3 4 Schedule of Investments as of June 30, 2025 (Unaudited) and December 31, 2024 5

Notes to Financial Statements (Unaudited)

Notes to Financial Statements (Unaudited) 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations . 25 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk . 35 Item 4.

Controls and Procedures

Controls and Procedures 36

OTHER INFORMATION

PART II. OTHER INFORMATION 37 Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A .

Risk Factors

Risk Factors 37 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 37 Item 3. Defaults Upon Senior Securities 37 Item 4. Mine Safety Disclosures 37 Item 5. Other Information 37 Item 6. Exhibits 38

Signatures

Signatures 39 Table of Contents Andalusian Credit Company, LLC June 30, 2025 (unaudited) December 31, 2024 Assets: Investments in non-controlled non-affiliated investments, at fair value (cost $ 138,727,316 and $ 91,004,288 , respectively) $ 138,612,837 $ 91,188,202 Cash and cash equivalents 95,006,222 59,419,565 Interest receivable 1,237,865 913,083 Prepaid expenses and other assets 230,149 399,901 Total assets $ 235,087,073 $ 151,920,751 Liabilities: Management fees payable $ 585,959 $ 1,520,781 Administration fees payable 317,817 316,040 Professional fees payable 274,683 151,000 Legal fees payable 183,817 73,755 Interest and credit facility fees payable (Note 6) 61,979 62,708 Due to affiliate 55,398 32,166 Accounts payable and accrued expenses 38,452 15,024 Total liabilities $ 1,518,105 $ 2,171,474 Commitments and contingencies (Note 7) Net assets: Shares, par value $ 0.001 ( 15,243,006 and 9,863,357 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively) $ 15,243 $ 9,863 Paid-in-capital in excess of par value 237,098,322 155,066,351 Distributable earnings (loss) ( 3,544,597 ) ( 5,326,937 ) Total net assets $ 233,568,968 $ 149,749,277 Total liabilities and net assets $ 235,087,073 $ 151,920,751 Net asset value per share $ 15.32 $ 15.18 The accompanying notes are an integral part of these financial statements. 1 Table of Contents Andalusian Credit Company, LLC (unaudited) Three months Three months Six months Six months ended ended ended ended June 30, 2025 June 30, 2024 (1) June 30, 2025 June 30, 2024 (1) Investment Income: Interest income from non-controlled/non-affiliated investments $ 3,212,770 $ 975,873 $ 5,851,619 $ 1,138,311 Interest from cash and cash equivalents 867,624 233,184

Notes to Financial Statements

Notes to Financial Statements June 30, 2025 (unaudited) Note 1. Organization Andalusian Credit Company, LLC, a Delaware limited liability company (the "Company"), was formed on October 17, 2022 ("inception"). The Company is structured as an externally m

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