MidCap Financial Investment reports net loss as portfolio yield declines
The company reported a net loss resulting from operations of $17.5 million for the quarter ended June 30, 2026.
MidCap Financial Investment (MFIC), a business development company, reported a net loss resulting from operations of $17.5 million for the quarter ended June 30, 2026. The result followed a net increase of $18.1 million for the same period in 2025.
The company faced a widening gap in valuation losses. Net realized and change in unrealized gains and losses widened to a loss of $50.3 million for the quarter, compared to a loss of $18.3 million in the prior-year period.
Net asset value per share decreased 3.2% sequentially to $13.37 as of June 30, 2026, from $13.82 as of March 31, 2026. The decline was due to credit-related weakness in a limited number of positions.
Portfolio performance showed a steady decline in returns. Total portfolio yield, inclusive of non-accruals, fell to 8.1% as of June 30, 2026. This continued a downward trajectory from 8.3% on March 31, 2026, and 9.2% on June 30, 2025.
Despite the valuation pressure, net investment income per share rose to $0.40 for the quarter ended June 30, 2026, up from $0.38 for the quarter ended March 31, 2026. The company's net leverage ratio remained relatively flat at 1.54x, compared to 1.55x at the end of the previous quarter.
Investment activity shifted toward outflows. Net investment activity for the three months ended June 30, 2026, was a net outflow of $160.2 million, reversing a net inflow of $144.0 million in the same period in 2025.
MidCap utilized its existing share repurchase program to buy back 2,755,221 shares for $31.9 million during the quarter. The repurchases occurred at a weighted average price of $11.58 and generated $0.07 per share of NAV accretion.