Audax Credit BDC NAV Dips Amid Rising Investment Losses

TL;DR

**Audax Credit BDC is bleeding value, with NAV and investment income dropping while investment losses surge – time to re-evaluate your position.**

AI Summary

Audax Credit BDC Inc. reported a decrease in total assets to $424,788,306 as of September 30, 2025, down from $433,157,788 at December 31, 2024. Net assets also declined to $420,957,222 from $426,642,405 over the same period, resulting in a Net Asset Value per Share of Common Stock of $8.95, a decrease from $9.07. The company experienced a net investment income of $25,167,748 for the nine months ended September 30, 2025, a decrease from $27,145,715 in the prior year. This was primarily driven by a reduction in total interest income from $31,950,523 to $29,646,624. Furthermore, net realized and unrealized losses on investments significantly increased to $5,461,976 for the nine months ended September 30, 2025, compared to $3,915,737 in the same period of 2024. Total expenses, net of waivers, decreased to $4,547,420 from $4,915,402. The net increase in net assets resulting from operations was $19,705,772, down from $23,229,978 year-over-year. The company also paid out $25,391,047 in distributions to common stockholders.

Why It Matters

Audax Credit BDC's declining Net Asset Value per Share, from $9.07 to $8.95, signals potential erosion of shareholder value, a critical metric for BDC investors. The significant increase in net realized and unrealized losses on investments, jumping from $3.9 million to $5.4 million, suggests challenges in their loan portfolio, which could impact future earnings and dividend sustainability. In a competitive BDC landscape, a sustained decline in NAV and investment income could make Audax less attractive compared to peers with more stable or growing portfolios. This trend could lead to reduced investor confidence and potentially affect the company's ability to raise capital or maintain its market position.

Risk Assessment

Risk Level: high — The company's net realized and unrealized loss on investments increased significantly to $5,461,976 for the nine months ended September 30, 2025, up from $3,915,737 in the prior year. This 39.5% increase in losses, coupled with a decrease in net investment income from $27,145,715 to $25,167,748, indicates deteriorating portfolio performance and heightened credit risk.

Analyst Insight

Investors should scrutinize Audax Credit BDC's loan portfolio for specific underperforming assets and consider if the current dividend yield adequately compensates for the increased risk. Given the declining NAV and rising investment losses, a cautious approach is warranted; consider reducing exposure or reallocating to BDCs demonstrating stronger portfolio health and income stability.

Financial Highlights

debt To Equity

N/A

revenue

$29,646,624

operating Margin

N/A

total Assets

$424.8M

total Debt

N/A

net Income

$19,705,772

eps

N/A

gross Margin

N/A

cash Position

$16.97M

revenue Growth

-7.2%

Revenue Breakdown

Key Numbers

• $424.8M — Total Assets (Decreased from $433.2M at Dec 31, 2024)
• $8.95 — NAV per Share (Decreased from $9.07 at Dec 31, 2024)
• $25.2M — Net Investment Income (9 months) (Decreased from $27.1M in prior year)
• $5.5M — Net Realized & Unrealized Loss (9 months) (Increased from $3.9M in prior year)
• $25.4M — Distributions to Stockholders (9 months) (Paid out to common stockholders)
• 47,020,464 — Shares Outstanding (As of November 12, 2025)
• $16.97M — Cash and Cash Equivalents (Decreased from $19.74M at Dec 31, 2024)
• $402.4M — Investments, at fair value (Decreased from $410.0M at Dec 31, 2024)

Key Players & Entities

• Audax Credit BDC Inc. (company) — registrant
• $424,788,306 (dollar_amount) — Total Assets as of September 30, 2025
• $433,157,788 (dollar_amount) — Total Assets as of December 31, 2024
• $420,957,222 (dollar_amount) — Total Net Assets as of September 30, 2025
• $426,642,405 (dollar_amount) — Total Net Assets as of December 31, 2024
• $8.95 (dollar_amount) — Net Asset Value per Share of Common Stock at September 30, 2025
• $9.07 (dollar_amount) — Net Asset Value per Share of Common Stock at December 31, 2024
• $25,167,748 (dollar_amount) — Net Investment Income for nine months ended September 30, 2025
• $27,145,715 (dollar_amount) — Net Investment Income for nine months ended September 30, 2024
• $5,461,976 (dollar_amount) — Net realized and unrealized loss on investments for nine months ended September 30, 2025

FAQ

Risk Factors

• Investment Portfolio Performance [high — financial]: The company experienced net realized and unrealized losses on investments of $5,461,976 for the nine months ended September 30, 2025, an increase from $3,915,737 in the same period of 2024. This indicates a deterioration in the fair value of its investment holdings.
• Declining Net Investment Income [medium — financial]: Net investment income decreased to $25,167,748 for the nine months ended September 30, 2025, down from $27,145,715 in the prior year. This decline was primarily driven by a reduction in total interest income.
• Decreasing Asset and Net Asset Value [medium — financial]: Total assets fell to $424,788,306 as of September 30, 2025, from $433,157,788 at December 31, 2024. Net assets also declined, leading to a lower Net Asset Value per Share of Common Stock of $8.95 from $9.07.
• Interest Rate Sensitivity [medium — market]: As a BDC, Audax Credit's profitability is sensitive to changes in interest rates. A decrease in interest income suggests potential headwinds from the current interest rate environment or a shift in the portfolio's yield.
• Operational Expenses [low — operational]: While total expenses net of waivers decreased to $4,547,420 from $4,915,402, managing operational costs remains crucial for profitability, especially with declining investment income.
• Distribution Payouts Exceeding Net Income [medium — financial]: The company paid out $25,391,047 in distributions to common stockholders for the nine months ended September 30, 2025, which exceeded the net increase in net assets from operations of $19,705,772.

Industry Context

Business Development Companies (BDCs) operate in a dynamic environment, providing capital to middle-market companies. The industry is sensitive to interest rate fluctuations, credit market conditions, and regulatory changes. Competition for attractive investment opportunities is often intense, requiring BDCs to maintain strong origination capabilities and rigorous underwriting standards.

Regulatory Implications

As a BDC, Audax Credit is subject to specific regulations, including asset coverage requirements and distribution mandates. Changes in accounting standards or regulatory oversight could impact its financial reporting and operational flexibility. Compliance with these regulations is critical to its continued operation and investor confidence.

What Investors Should Do

1. Monitor investment portfolio performance closely.
2. Analyze the sustainability of current distribution levels.
3. Evaluate the impact of declining interest income.
4. Assess the company's capital structure and liquidity.

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Indicates a decrease in total assets, net assets, and NAV per share, alongside reduced net investment income and increased investment losses for the nine-month period.
• 2024-12-31: Previous Fiscal Year End — Provides the comparative baseline for asset values and NAV per share, showing a decline in the current period.

Glossary

BDC

Business Development Company. A type of closed-end investment company that invests in small and medium-sized businesses and provides them with management expertise. (Audax Credit BDC Inc. operates under this structure, influencing its investment strategy and regulatory framework.)

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 metric for BDCs, indicating the underlying value of each share. A decrease suggests a decline in the company's investment performance or asset base.)

Net Investment Income

The income generated from a company's investments after deducting operating expenses. (Represents the core profitability of the BDC from its lending and investment activities. A decrease here is a negative signal.)

Net Realized and Unrealized Losses

Losses incurred from selling investments (realized) and the decrease in value of investments still held (unrealized). (Highlights the volatility and performance of the company's investment portfolio. An increase in losses is a significant concern.)

Distributions to Stockholders

Payments made by the company to its shareholders, often from investment income or realized capital gains. (BDCs are typically required to distribute a significant portion of their taxable income to shareholders. The level of distributions relative to income is important.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Audax Credit BDC Inc. has experienced a contraction in its financial performance. Total assets and net assets have declined, with NAV per share falling to $8.95 from $9.07. Net investment income decreased to $25.2M from $27.1M, primarily due to lower interest income. Furthermore, the company saw a significant increase in net realized and unrealized losses on investments, rising to $5.5M from $3.9M, indicating a more challenging investment environment.

Key Financial Figures

• $0.001 — 0,464 shares of common stock, par value $0.001 per share, outstanding as of November 1

Filing Documents

• ck0001633858-20250930.htm (10-Q) — 19398KB
• ck0001633858-ex31_1.htm (EX-31.1) — 14KB
• ck0001633858-ex31_2.htm (EX-31.2) — 14KB
• ck0001633858-ex32_1.htm (EX-32.1) — 8KB
• ck0001633858-ex32_2.htm (EX-32.2) — 8KB
• 0001193125-25-277817.txt ( ) — 66811KB
• ck0001633858-20250930.xsd (EX-101.SCH) — 1355KB
• ck0001633858-20250930_htm.xml (XML) — 23537KB

Financial Statements

Financial Statements 2 3 4 5 Schedules of Investments as of September 30, 2025 (unaudited) and December 31, 2024 6

Notes to Financial Statements (unaudited)

Notes to Financial Statements (unaudited) 30 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 Overview 54 Results of Operations 56 Financial Condition, Liquidity and Capital Resources 58 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 64 Item 4.

Controls and Procedures

Controls and Procedures 65 PART II. OTHER INFORMATION: Item 1.

Legal Proceedings

Legal Proceedings 66 Item 1A.

Risk Factors

Risk Factors 66 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 66 Item 3. Defaults Upon Senior Securities 66 Item 4. Mine Safety Disclosures 66 Item 5. Other Information 66 Item 6. Exhibits 67

SIGNATURES

SIGNATURES 68 1 Audax Credit BDC Inc. St atements of Assets and Liabilities September 30, 2025 and December 31, 2024 (Expressed in U.S. Dollars) September 30, 2025 December 31, 2024 (unaudited) Assets Investments, at fair value Non-Control/Non-Affiliate investments (Cost of $ 412,939,201 and $ 416,973,715 , respectively) $ 402,439,076 $ 410,031,275 Cash and cash equivalents 16,968,969 19,737,091 Interest receivable 3,603,385 2,867,021 Receivable from investments sold 43,335 412,083 Receivable from bank loan repayment 1,654,023 110,318 Other assets 79,518 — Total Assets $ 424,788,306 $ 433,157,788 Liabilities Payable for investments purchased $ 2,194,357 $ 4,820,442 Fees due to investment advisor, net of waivers (a) 1,022,992 1,196,448 Fee due to administrator (a) 66,250 66,250 Accrued expenses and other liabilities 547,485 432,243 Total Liabilities $ 3,831,084 $ 6,515,383 Commitments and contingencies ( b) Net Assets Common stock, $ 0.001 par value per share, 100,000,000 shares authorized, 47,020,464 and 47,020,454 shares issued and outstanding, respectively $ 47,020 $ 47,020 Capital in excess of par value 442,172,370 442,395,577 Total distributable loss ( 21,262,168 ) ( 15,800,192 ) Total Net Assets $ 420,957,222 $ 426,642,405 Net Asset Value per Share of Common Stock at End of Period $ 8.95 $ 9.07 Shares Outstanding 47,020,464 47,020,454 (a) Refer to Note 4- Related Party Transactions for additional information. (b) Refer to Note 9- Commitments and Contingencies for additional information. The accompanying notes are an integral part of these financial statements. 2 Audax Credit BDC Inc. St atements of Operations (Expressed in U.S. Dollars) (unaudited) Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2025 September 30, 2024 Septembe

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