MFIC

MFIC is an externally-managed Apollo BDC (Apollo Investment Management is the adviser, with the AGM affiliation disclosed throughout the 10-K) that lives or dies by the spread between portfolio yield and its cost of debt. The FY2025 numbers tell a clear story of margin compression: net income fell to $63.2M from $98.8M (-36.1% YoY) while long-term debt grew +13.9% to $2.00B and total liabilities expanded +12.9% — the balance sheet is being levered up faster than earnings, pushing liabilities/equity to 1.54x and ROE down to a sub-par 4.8%. Equity itself shrank -6.9% as the company paid $142M in dividends against only $63.2M of net income, a payout pattern typical for RICs (the MD&A confirms RIC election under Subchapter M, which forces distribution of substantially all taxable income) but one that is mathematically eroding NAV when earnings undershoot the distribution.

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