Steele Creek Capital Corp Annual Report - How They Did This Year

I’ve put together this guide to help you understand how Steele Creek Capital Corp performed this year. My goal is to turn complex financial filings into plain English so you can decide if this company fits your investment goals.

1. What does this company do?

Think of Steele Creek Capital as a professional lender for large companies. Instead of making products, they make money by investing in debt—specifically bank loans and corporate bonds. They are a "Business Development Company" (BDC), a regulated firm that pools money to provide financing to middle-market businesses. An outside team, Steele Creek Investment Management, LLC, runs the firm. They earn a 1.50% fee on total assets plus a performance bonus, which ties their pay to the portfolio’s success.

2. Financial performance: How did they do this year?

The company’s portfolio shrank slightly this year. As of December 31, 2025, the firm held $115.3 million in investments, down 5.2% from $121.6 million in 2024. The Net Asset Value (NAV) per share—the value of the company’s assets minus its debts—fell from $10.12 to $9.88. Total NAV dropped from $54.7 million to $53.4 million. The firm was active, investing $88.5 million in new loans while collecting $91.2 million from repayments and sales. The company earned $4.8 million in profit, which allowed it to pay quarterly dividends to shareholders.

3. How they make money and manage risk

Steele Creek focuses on "first lien" senior secured loans. These are the safest type of debt because they are first in line to be repaid if a borrower goes bankrupt. The portfolio is spread across 42 different companies, focusing mainly on Business Services (14.4%), Finance and Real Estate (13.2%), and Healthcare (11.8%).

The firm also puts about 15% of its money into "CLOs" (Collateralized Loan Obligations). These are complex bundles of loans that offer higher potential returns but come with more risk and price swings than the core loan portfolio.

4. Who is pulling the strings?

An external adviser under the Moelis Asset Management umbrella runs the company. This partnership gives Steele Creek access to professional credit analysis and deal opportunities that smaller firms often lack. However, either side can end this agreement with 60 days' notice. If the relationship with Moelis ended, Steele Creek would face significant operational challenges as it relies on this external team for credit analysis and legal compliance.

5. Key risks

• "Junk" Debt: Most of the portfolio is "below investment grade." These borrowers have high debt and are sensitive to interest rate hikes, which increases the risk of them failing to pay back their loans.
• "Covenant-Lite" Loans: About 65% of the loans are "covenant-lite." These agreements lack strict rules requiring borrowers to meet financial targets, making it harder for Steele Creek to intervene if a borrower’s financial health worsens.
• No Quick Exit: Steele Creek is not traded on a public stock exchange. You cannot easily sell your shares. Liquidity is limited to a quarterly buyback program, which is capped at 5% of shares per year. If the company pauses this program, you may be unable to sell your shares for an extended period.

Final Thought for Investors: When considering an investment in Steele Creek, weigh the benefit of their professional management and focus on senior secured loans against the reality that this is a long-term commitment. Because there is no public market to sell your shares quickly, ensure this capital is money you won't need to access on short notice.