MidCap Financial Investment Corporation Reports Strong Growth Amidst Challenging Market Conditions
MidCap Financial Investment Corporation, a leading specialty finance company, reported its quarterly earnings for the period ending June 30, 2026, during a recent conference call. The results showed net investment income (NAV) per share of $0.40 and a GAAP net loss per share of $0.21.
Net assets value per share at the end of June was $13.37, representing a 3.2% decline from the prior quarter. This decline was driven by a net loss of $50 million-$50.3 million, or $0.61 per share, concentrated among a limited number of positions.
Notably, MFIC's new commitments were intentionally modest at $5.8 million for the quarter to support three existing borrowers. Net repayments were $160 million in aggregate, resulting in a decline in net leverage to 1.54 times at quarter end. Excluding stock buybacks made during the quarter, MFIC's net leverage would have declined to 1.5 times at quarter end.
As for investment activity, Ted McNulty, President of MidCap Financial Investment Corporation, highlighted that MFIC's investment in Merx totaled approximately $68.6 million at fair value, representing 2.5% of the portfolio. This reflects a $12.5 million paydown during the June quarter from the sale of one aircraft in a joint venture plus a modest write-up.
Merx earns income from its servicing activities for Navigator, Apollo's dedicated aircraft leasing fund. Having fully deployed its equity commitments, Navigator is in the harvest period and opportunistically monetizing assets to optimize fund level returns. Merx receives a remarketing fee on each aircraft sale, with one aircraft already sold since quarter end.
Ted McNulty emphasized that MidCap Financial Investment Corporation will make capital allocation decisions based on leverage and market conditions, ensuring prudent management of the company's portfolio. With a focus on maximizing shareholder value, MFIC is well-positioned to navigate the current market challenges.
