Crescent Capital BDC, Inc.CCAP

Crescent Capital BDC, Inc. Fair Value Disclosure

10-KFiled Feb 25, 20267 min read

Note 5. Fair Value of Financial Instruments

Investments

The following table presents fair value measurements of investments as of December 31, 2025 (in thousands):

 

Fair Value Hierarchy

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Senior Secured First Lien

$

—

 

 

$

—

 

 

$

350,795

 

 

$

350,795

 

Unitranche First Lien

 

—

 

 

 

9,290

 

 

 

1,038,457

 

 

 

1,047,747

 

Unitranche First Lien – Last Out

 

—

 

 

 

—

 

 

 

26,290

 

 

 

26,290

 

Senior Secured Second Lien

 

—

 

 

 

—

 

 

 

12,180

 

 

 

12,180

 

Unsecured Debt

 

—

 

 

 

—

 

 

 

19,003

 

 

 

19,003

 

Equity & Other

 

43

 

 

 

46

 

 

 

77,136

 

 

 

77,225

 

Subtotal

$

43

 

 

$

9,336

 

 

$

1,523,861

 

 

$

1,533,240

 

Investments Measured at NAV (1)

 

 

 

 

 

 

 

 

 

 

36,178

 

Total Investments

 

 

 

 

 

 

 

 

 

$

1,569,418

 

 

 

 

 

 

 

 

 

 

 

 

Cash Equivalents

$

2,967

 

 

$

—

 

 

$

—

 

 

$

2,967

 

Foreign Currency Forward Contracts - Assets

 

—

 

 

 

2,135

 

 

 

—

 

 

 

2,135

 

Foreign Currency Forward Contracts - Liabilities

 

—

 

 

 

2,134

 

 

 

—

 

 

 

2,134

 

 

The following table presents fair value measurements of investments as of December 31, 2024 (in thousands):

 

Fair Value Hierarchy

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Senior Secured First Lien

$

—

 

 

$

—

 

 

$

379,628

 

 

$

379,628

 

Unitranche First Lien

 

—

 

 

 

30,206

 

 

 

1,013,934

 

 

 

1,044,140

 

Unitranche First Lien – Last Out

 

—

 

 

 

—

 

 

 

14,741

 

 

 

14,741

 

Senior Secured Second Lien

 

—

 

 

 

14,186

 

 

 

24,351

 

 

 

38,537

 

Unsecured Debt

 

—

 

 

 

—

 

 

 

17,525

 

 

 

17,525

 

Equity & Other

 

—

 

 

 

1,125

 

 

 

63,735

 

 

 

64,860

 

Subtotal

$

—

 

 

$

45,517

 

 

$

1,513,914

 

 

$

1,559,431

 

Investments Measured at NAV (1)

 

 

 

 

 

 

 

 

 

 

39,426

 

Total Investments

 

 

 

 

 

 

 

 

 

$

1,598,857

 

 

 

 

 

 

 

 

 

 

 

 

Cash Equivalents

$

2,110

 

 

$

—

 

 

$

—

 

 

$

2,110

 

Foreign Currency Forward Contracts - Assets

 

—

 

 

 

4,815

 

 

 

—

 

 

 

4,815

 

Foreign Currency Forward Contracts - Liabilities

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1)
In accordance with ASC 820-10, certain investments that are measured using the net asset value per shares (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the year ended December 31, 2025, based off of the fair value hierarchy as of December 31, 2025 (in thousands):

 

 

Senior Secured
First Lien

 

 

Unitranche
First Lien

 

 

Unitranche
First -
Last Out

 

 

Senior
Secured
Second Lien

 

 

Unsecured
Debt

 

 

Equity
&
Other

 

 

Total

 

Balance as of January 1, 2025

$

379,628

 

 

$

1,013,934

 

 

$

14,741

 

 

$

24,351

 

 

$

17,525

 

 

$

63,735

 

 

$

1,513,914

 

Amortized discounts/premiums

 

1,573

 

 

 

4,590

 

 

 

74

 

 

 

183

 

 

 

211

 

 

 

—

 

 

 

6,631

 

Paid in-kind interest

 

2,062

 

 

 

4,918

 

 

 

758

 

 

 

352

 

 

 

2,520

 

 

 

—

 

 

 

10,610

 

Net realized gain (loss)

 

(8,204

)

 

 

(5,395

)

 

 

—

 

 

 

(693

)

 

 

—

 

 

 

4,392

 

 

 

(9,900

)

Net change in unrealized appreciation (depreciation)

 

(3,632

)

 

 

(9,438

)

 

 

1,059

 

 

 

2,720

 

 

 

24

 

 

 

321

 

 

 

(8,946

)

Purchases

 

76,436

 

 

 

203,858

 

 

 

9,773

 

 

 

—

 

 

 

1

 

 

 

16,752

 

 

 

306,820

 

Sales/return of capital/principal repayments/paydowns

 

(97,068

)

 

 

(195,040

)

 

 

(115

)

 

 

(14,733

)

 

 

(1,278

)

 

 

(8,064

)

 

 

(316,298

)

Transfers in

 

—

 

 

 

21,030

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21,030

 

Transfers out

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

-

 

Balance as of December 31, 2025

$

350,795

 

 

$

1,038,457

 

 

$

26,290

 

 

$

12,180

 

 

$

19,003

 

 

$

77,136

 

 

$

1,523,861

 

Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2025

$

(9,987

)

 

$

(9,418

)

 

$

1,059

 

 

$

2,527

 

 

$

(19

)

 

$

2,442

 

 

$

(13,396

)

 

During the year ended December 31, 2025, the Company recorded $21,030 in transfers from Level 2 to Level 3 due to a decrease in observable inputs in market data and no transfers from Level 3 to Level 2.

The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the year ended December 31, 2024, based off of the fair value hierarchy as of December 31, 2024 (in thousands):

 

 

Senior
Secured
First Lien

 

 

Unitranche
First Lien

 

 

Unitranche
First -
Last Out

 

 

Senior
Secured
Second Lien

 

 

Unsecured
Debt

 

 

Equity
&
Other

 

 

Total

 

Balance as of January 1, 2024

$

409,945

 

 

$

948,781

 

 

$

13,544

 

 

$

44,907

 

 

$

4,061

 

 

$

48,909

 

 

$

1,470,147

 

Amortized discounts/premiums

 

2,028

 

 

 

5,782

 

 

 

101

 

 

 

239

 

 

 

534

 

 

 

—

 

 

 

8,684

 

Paid in-kind interest

 

3,231

 

 

 

2,578

 

 

 

834

 

 

 

2,335

 

 

 

1,917

 

 

 

—

 

 

 

10,895

 

Net realized gain (loss)

 

(3,191

)

 

 

(846

)

 

 

(2,308

)

 

 

(4,180

)

 

 

—

 

 

 

(400

)

 

 

(10,925

)

Net change in unrealized appreciation (depreciation)

 

(10,132

)

 

 

(9,124

)

 

 

1,935

 

 

 

(2,711

)

 

 

690

 

 

 

6,571

 

 

 

(12,771

)

Purchases

 

106,959

 

 

 

263,931

 

 

 

9,004

 

 

 

—

 

 

 

10,323

 

 

 

4,982

 

 

 

395,199

 

Sales/return of capital/principal repayments/paydowns

 

(131,758

)

 

 

(193,631

)

 

 

(8,369

)

 

 

(16,239

)

 

 

—

 

 

 

3,673

 

 

 

(346,324

)

Transfers in

 

2,546

 

 

 

(24

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,522

 

Transfers out

 

—

 

 

 

(3,513

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,513

)

Balance as of December 31, 2024

$

379,628

 

 

$

1,013,934

 

 

$

14,741

 

 

$

24,351

 

 

$

17,525

 

 

$

63,735

 

 

$

1,513,914

 

Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2024

$

(10,581

)

 

$

(7,266

)

 

$

20

 

 

$

(3,815

)

 

$

690

 

 

$

4,889

 

 

$

(16,063

)

 

During the year ended December 31, 2024, the Company recorded $3,513 in transfers from Level 3 to Level 2 due to an increase in observable inputs in market data and $2,522 in transfers from Level 2 to Level 3 due to a decrease in observable inputs in market data.

The following tables present the fair value of Level 3 investments and the ranges of significant unobservable inputs used to value the Company’s Level 3 investments as of December 31, 2025 and 2024. These ranges represent the significant unobservable inputs that were used in the valuation of each type of investment. These inputs are not representative of the inputs that could have been used in the valuation of any one investment. For example, the highest market yield presented in the table for senior secured first lien investments is appropriate for valuing a specific investment but may not be appropriate for valuing any other investment. Accordingly,

the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Company’s Level 3 investments.

 

Security Type

 

Fair Value as of
December 31, 2025
(in thousands)

 

 

Valuation Technique

 

Unobservable Input

 

Range (Weighted Avg)

Senior Secured First Lien

 

$

303,854

 

 

Discounted Cash Flows

 

Discount Rate

 

4.7%

-

19.5%

(9.8%)

 

 

38,452

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

2.3x

-

11.7x

(9.0x)

 

 

8,489

 

 

Transaction Precedent

 

Transaction Price

 

 

 

N/A

 

 

$

350,795

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitranche First Lien

 

 

897,161

 

 

Discounted Cash Flows

 

Discount Rate

 

7.6%

-

19.1%

(9.8%)

 

 

41,357

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

6.7x

-

12.0x

(9.1x)

 

 

33,097

 

 

Transactions Precedent

 

Transaction Price

 

 

 

N/A

 

 

 

66,842

 

 

Broker Quoted

 

Broker Quote

 

 

 

N/A

 

 

$

1,038,457

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitranche First Lien - Last Out

 

 

18,905

 

 

Discounted Cash Flows

 

Discount Rate

 

7.6%

-

15.9%

(11.3%)

 

 

7,385

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

10.6x

 

 

$

26,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Second Lien

 

 

8,076

 

 

Discounted Cash Flows

 

Discount Rate

 

11.7%

-

12.7%

(12.3%)

 

 

4,104

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

3.3x

 

 

$

12,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Debt

 

 

16,904

 

 

Discounted Cash Flows

 

Discount Rate

 

10.6%

-

15.5%

(13.6%)

 

 

2,099

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

11.7x

 

 

$

19,003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity & Other

 

 

77,136

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

2.3x

-

28.0x

(13.7x)

 

$

77,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,523,861

 

 

 

 

 

 

 

 

 

 

 

 

 

Security Type

 

Fair Value as of
December 31, 2024
(in thousands)

 

 

Valuation Technique

 

Unobservable Input

 

Range (Weighted Avg)

Senior Secured First Lien

 

$

324,549

 

 

Discounted Cash Flows

 

Discount Rate

 

8.0%

-

18.3%

(10.8%)

 

 

27,840

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

3.1x

-

10.6x

(8.1x)

 

 

2,779

 

 

Discounted Cash Flows

 

Royalty Payment Discount Rate

 

 

 

22.4%

 

 

 

24,460

 

 

Broker Quoted

 

Broker Quote

 

 

 

N/A

 

 

$

379,628

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitranche First Lien

 

$

988,714

 

 

Discounted Cash Flows

 

Discount Rate

 

8.9%

-

18.3%

(10.7%)

 

 

12,556

 

 

Enterprise Value

 

Comparable Revenue Multiple

 

 

 

10.9x

 

 

 

12,664

 

 

Broker Quoted

 

Broker Quote

 

 

 

N/A

 

 

$

1,013,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitranche First Lien - Last Out

 

$

14,741

 

 

Discounted Cash Flows

 

Discount Rate

 

11.2%

-

16.0%

(12.8%)

 

$

14,741

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Second Lien

 

$

15,802

 

 

Discounted Cash Flows

 

Discount Rate

 

12.4%

-

14.1%

(12.9%)

 

 

3,549

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

1.4x

-

10.1x

(5.1x)

 

 

5,000

 

 

Broker Quoted

 

Broker Quote

 

 

 

N/A

 

 

$

24,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Debt

 

$

15,706

 

 

Discounted Cash Flows

 

Discount Rate

 

13.3%

-

17.2%

(14.2%)

 

 

1,819

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

 

 

10.6x

 

 

$

17,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity & Other

 

$

63,735

 

 

Enterprise Value

 

Comparable EBITDA Multiple

 

3.1x

-

27.4x

(15.3x)

 

$

63,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,513,914

 

 

 

 

 

 

 

 

 

 

 

 

(1)
Weighted average is calculated based upon fair value.

 

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity securities are primarily earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, comparable multiples and market discount rates. The Company typically uses comparable EBITDA or revenue multiples on its equity securities to determine the fair value of investments. The Company uses discount rates for debt securities to determine if the effective yield on a debt security is commensurate with the market yields for that type of debt security.

•
The significant unobservable inputs used in the discounted cash flow approach is the discount rate used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Increases and decreases in the discount rate would result in a decrease and increase in the fair value, respectively. Included in the consideration and selection of discount rates is risk of default, rating of the investment, call provisions and comparable company investments.
•
The significant unobservable inputs used in the enterprise value approach are comparable EBITDA and revenue multiples. Increases and decreases in market EBITDA multiples and revenue would result in an increase or decrease in the fair value, respectively.

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 19, 2025
2023Feb 21, 2024
2022Feb 22, 2023

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

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