MSC Income Fund : 1st Quarter 2026 Debt Capital Markets Presentation

Published: 2026-05-08 13:21:10 ET MSIF

Published on 05/08/2026 at 01:21 pm EDT

Debt Capital Markets Presentation

First Quarter - 2026

MSMCSCIInnccoomme FeunFd,uInnc.d, Inc.

NYNSYSEE:: MMSISF IF

mscincmosmcinecofmuenfudn.dc.coomm

Page 1

1st Quarter - 2026

Publicly traded Business Development Company (BDC) with diversified investment strategy

$1.6 billion of capital(1)

Managed by a wholly-owned subsidiary(2) of Main Street Capital Corporation (NYSE: MAIN) (MAIN or Main Street) since October 2020

MAIN is a publicly traded BDC with over $9.2 billion in capital under management(3)

MAIN's wholly-owned subsidiary(2) was previously a sub-adviser to MSIF since May 2012

Focused on proprietary debt investments in privately held companies typically owned by or being acquired by a private equity fund (Private Loan)

Primarily originated directly by MAIN or, to a lesser extent, through strategic relationships with other investment funds

First lien, floating rate debt investments with attractive risk-adjusted returns

Targets companies with annual revenue between $25 million and $500 million and annual EBITDA between $7.5 million and $50 million

Proprietary investments that can be difficult for investors to access

Maintains a portfolio of debt and equity investments in the underserved Lower Middle Market (LMM)

Companies with annual revenue between $10 million and $150 million and annual EBITDA between $3 million and $20 million

Provides one-stop financing solutions, including a combination of first lien debt and equity financing

Headquartered in Houston, Texas

IPO in 2007

Over $9.2 billion in capital under management(2)

Over $7.2 billion internally at MAIN(2)

Over $2.0 billion as the investment adviser to external parties(1)(2)

A top-performing BDC with consistent market outperformance of both economic returns and shareholder returns through various economic cycles

MAIN(1) provided asset management services, including sourcing, diligence and post-investment monitoring

Fund raising, capital structure management, accounting and administrative services were provided by the former investment adviser

The fund changed its name to MSC Income Fund, Inc.(3)

Lower Middle Market

$507.6 million of total investments

55 companies

$274.4 million of debt investments (54%)

$233.2 million of equity investments (46%)

Over 99% of debt investments are first lien(2)

Average investment size of $9.2 million at fair value or $7.3 million at cost

Weighted-average effective yield on debt investments of 12.6%(3)

Private Loan

$823.1 million of total investments

80 companies

$754.1 million of debt investments (92% of Private Loan portfolio)

Over 99% of debt investments are first lien(2)

Average investment size of $10.5 million(2)

96% of debt investments bear interest at floating rates(2)

Weighted-average effective yield on debt investments of 10.5%(3)

Total Portfolio(4)(5)

$1.4 billion of total investments

150 companies and entities

$1,051.2 million of debt investments (77%)

$318.0 million of equity investments (23%)

Over 99% of debt investments are first lien(2)

77% of debt investments bear interest at floating rates(2)

Weighted-average effective yield on debt investments of 11.0%(3)

Leverage

Regulatory restrictions on utilization of debt capital require BDCs to maintain conservative leverage

Must maintain an asset to debt coverage ratio (the Regulatory Asset Coverage Ratio) of at least 2.0x, unless the BDC has satisfied all applicable requirements, including, but not limited to, obtaining board or shareholder approval to decrease the Required Regulatory Asset Coverage Ratio to 1.5x as provided for under the Small Business Credit Availability Act passed in December 2017

MSIF received board of directors approval to decrease its Regulatory Asset Coverage Ratio to 1.5x on January 29, 2025; as a result, effective on January 29, 2026, the Regulatory Asset Coverage Ratio of 1.5x became effective for MSIF

Full Transparency

Detailed schedule of all investments (and related key terms) in quarterly and annual reporting

Quarterly fair value mark to market accounting

Income Tax Treatment

As a Regulated Investment Company (RIC), BDCs generally do not pay corporate income taxes

To maintain RIC status and avoid paying corporate income taxes, BDCs must distribute at least 90% of taxable income (other than net capital gain) to investors

To avoid a 4% federal excise tax on undistributed income, BDCs must distribute in each calendar year the sum of (1) 98% of their net ordinary income for the calendar year and (2) 98.2% of their realized capital gains (both long-term and short-term)

Tax treatment is similar to Real Estate Investment Trusts (REITs)

($ in 000s)

As of 3/31/2026

Total Assets $ 1,409,925

Debt Capital:

SPV Facility(1) 267,000

Corporate Facility(1) 83,000

October 2026 Notes(2) 149,826

May 2029 Notes(2) 149,274

Total Debt 649,100

Other Liabilities 41,297

Total Liabilities 690,397

Asset Coverage Ratio(3)

2.11x

Debt to Assets Ratio

0.46x

Debt to NAV Ratio(4)

0.90x

Net Debt to NAV Ratio(5)

0.88x

Net Asset Value (NAV) $ 719,528Key Leverage Stats

Passage of the Small Business Credit Availability Act in December 2017 provided the opportunity for BDCs to obtain board or shareholder approval to access additional leverage by lowering their Regulatory Asset Coverage Ratio to 1.50x (from 2.00x)

MSIF received board approval, effective as of January 29, 2025, to adopt the 1.50x Regulatory Asset Coverage Ratio; as a result, on January 29, 2026, the Regulatory Asset Coverage Ratio of 1.50x became effective for MSIF

MSIF operates at conservative regulatory leverage levels, in all cases with significant cushion to the current 1.50x minimum Regulatory Asset Coverage Ratio applicable to MSIF

MSIF's Historical Asset Coverage Ratio:

2021

2022

2023

2024

2025

Q1 2026

Consolidated Asset Coverage Ratio - Regulatory(1)

2.22x

2.29x

2.28x

2.10x

2.22x

2.11x

Current Minimum Required Asset Coverage

1.50x

Cushion % above Current Minimum Required Asset Coverage

48%

53%

52%

40%

48%

41%

Managed by "Best in Class" Asset Manager with Strong, Long-term Track Record

Management team has over 100 years of collective investment experience and long-term working relationships dating back over 20 years

Growing franchise in the direct lending, or Private Loan (PL), sector

Reduced Management Fee and Conservative Dividend Policy

Management fee reduced to 1.50% from 1.75% effective January 29, 2025 in connection with MSIF's listing(1); further contractual reductions to 1.25% and 1.00% based upon future reductions to MSIF's LMM investment portfolio as a percentage of MSIF's total investment portfolio

Conservative Leverage

Conservative dividend policy to provide additional flexibility, with total dividend payout set equal to or at a slight discount to adjusted net investment income before taxes(2)

1940 Act requires MSIF to maintain a minimum 1.5x Regulatory Asset Coverage Ratio(3)

MSIF's Regulatory Asset Coverage Ratio is ~ 2.1x(4)

Capital structure materially improved by unsecured debt issuances in 2021, 2022 and 2026(5)

Unique Investment Strategy

Unique investment strategy differentiates MSIF from its competitors and provides attractive risk-adjusted returns

Permanent capital structure of BDC allows for long-term, patient investment strategy and overall approach

High Quality Portfolio

Significant diversification

84.7% of total cost of portfolio is first lien debt(4)

Attractive PL debt portfolio statistics

Attractive LMM debt portfolio statistics(6) - Median Senior Debt to EBITDA Ratio of 2.5x and Median Senior Interest Expense Coverage Ratio of 3.0x

Dwayne Hyzak(1)(2) CEO and Chairman of the Board

Co-founded MAIN in 2002; affiliated with Main Street group since 1999

Director of Acquisitions & Integration with Quanta Services (NYSE: PWR)

Manager with a Big 5 Accounting Firm's audit and transaction services groups

David Magdol(1)(2)

President and CIO(3)

Co-founded MAIN in 2002

Vice President in Lazard Freres Investment Banking Division

Vice President of McMullen Group (John J. McMullen's Family Office)

Jesse Morris(1)

EVP, COO(4) and Senior Managing Director

Joined MAIN in 2019

Executive Vice President with Quanta Services (NYSE: PWR)

Vice President and CFO Foodservice Operations with Sysco Corporation (NYSE: SYY)

Manager with a Big 5 Accounting Firm

Jason Beauvais, JD(1)

EVP, GC(5) and Secretary

Joined MAIN in 2008

Attorney for Occidental Petroleum Corporation (NYSE: OXY)

Associate in the corporate and securities section at Baker Botts LLP

Nick Meserve(2) Managing Director and Head of Private Credit

Joined MAIN in 2012

Portfolio Manager at Highland Capital Management, LP

Credit Analyst at JPMorgan Chase

Cory Gilbert

CFO

Joined MAIN in 2020

CFO and Treasurer of OHA Investment Corporation (NASDAQ: OHAI)

CFO of RED Capital Group, a wholly-owned subsidiary of ORIX, U.S.A.

Manager with a Big 5 Accounting Firm

Facility

Interest Rate

Maturity

Principal Drawn as of 3/31/2026

Borrowing Availability(5)

SPV Facility(1)(3)

Corporate Facility(2)(3)

SOFR+2.20% floating (5.89%(4))

SOFR+2.05% floating (5.71%(4))

February 2030 (fully revolving until February 2029)

May 2029 (fully revolving until November 2028)

$267.0 million $33.0 million

$83.0 million $162.0 million

October 2026 Notes 4.04% fixed October 30, 2026 $150.0 million N/A

May 2029 Notes 6.34% fixed May 31, 2029 $150.0 million N/A

$300.0

$250.0

(in millions)

$200.0

$150.0

$100.0

$50.0

$0.0

$150.0

$83.0

$267.0

2026 2027 2028 2029 2030

MSIF's financial results are subject to impact from changes in interest rates; MSIF maintains a capital structure with the goal to minimize such impact

46% of outstanding debt obligations have fixed interest rates(5)

54% of outstanding debt obligations have floating interest rates(5)

77% of debt investments bear interest at floating rates,(5) the majority of which contain contractual minimum index rates, or "interest rate

floors" (weighted-average floor of approximately 130 basis points)(6)

Results in increases in net investment income (NII) if market interest rates increase, and reductions to NII if market interest rates decrease, subject to the impact to MSIF's incentive fee on income expense

The following table illustrates the approximate annual changes in the components of MSIF's NII due to hypothetical increases (decreases) in interest rates(1)(2) (dollars in thousands, except per share data):

Basis Point Increase (Decrease) in Interest Rate

Increase (Decrease) in Interest Income

(Increase) Decrease in Interest Expense(3)

Increase (Decrease) in Pre-Incentive Fee NII

(Increase) Decrease in Incentive Fee on Income Expense(1)

Increase Increase (Decrease) in (Decrease) in

NII NII per Share(4)

(100)

$ (8,378) $

3,500

$ (4,878) $

1,574

$ (3,304) $

(0.07)

(75)

(6,283)

2,625

(3,658)

964

(2,694)

(0.06)

(50)

(4,187)

1,750

(2,437)

426

(2,011)

(0.04)

(25)

(2,091)

875

(1,216)

213

(1,003)

(0.02)

2,093

(875)

1,218

(213)

1,005

0.02

4,145

(1,750)

2,395

(419)

1,976

0.04

6,186

(2,625)

3,561

(623)

2,938

0.06

100

8,226

(3,500)

4,726

(827)

3,899

0.09

Assumes no changes in the portfolio investments or outstanding debt obligations existing as of March 31, 2026; the pro forma changes in the incentive fee on income expense are calculated pursuant to the terms set forth in MSIF's advisory agreement based upon the incentive fee on income expense for the first quarter of 2026, net of the voluntary permanent incentive fee on income waiver for the first quarter of 2026, in each case on an annualized basis, as adjusted for the pro forma change in pre-incentive fee NII resulting from the assumed interest income and interest expense changes reflected in the table, with no other changes in investment income or expense and with the voluntary permanent incentive fee on income waiver assumed to remain at the first quarter of 2026 annualized amount; there is no guarantee that any incentive fee on income waivers will occur in the future, and any such waivers are entirely at the discretion of the Adviser

Assumes that all SOFR and Prime rates would change effective immediately on the first day of the period; however, the actual contractual index rate reset dates will vary in future periods generally on either a monthly or quarterly basis across both the debt investments and the Credit Facilities (as defined in the Endnotes for page 13) resulting in a delay in the realization of the increases or decreases in interest income or expense

The hypothetical (increase) decrease in interest expense would be impacted by the changes in the amount of debt outstanding under the Credit Facilities, with interest expense (increasing) decreasing as the debt outstanding under the Credit Facilities increases (decreases)

Per share amount is calculated using shares outstanding as of March 31, 2026

As of March 31, 2026, based on par

Weighted-average interest rate floor calculated based on debt principal balances as of March 31, 2026

Although MSIF believes that this analysis is indicative of the impact of interest rate changes to NII as of March 31, 2026, the analysis does not take into consideration future changes in the credit market, credit quality or other business or economic developments that could affect NII. Accordingly, MSIF can offer no assurances that actual results would not differ materially from the analysis above. See further discussion and analysis in Item 3 of MSIF's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026.

MSIF's investments in new portfolio companies are solely focused on its Private Loan investment strategy

Investment objectives

Access proprietary investments with attractive risk-adjusted return characteristics

Generate cash yield to support MSIF's dividends to shareholders

Targets companies with annual revenue between $25 million and $500 million and annual EBITDA between $7.5 million and $50 million

Proprietary investments primarily originated directly by Main Street or, to a lesser extent, through strategic relationships with other investment funds on a collaborative basis

Current Private Loan portfolio companies have weighted-average EBITDA of approximately $30.6 million(1)

First lien debt investments

Floating rate debt investments

Limited equity investments

Weighted-average effective yield of 10.5%(2)

Net returns positively impacted by modest use of leverage

Floating rate debt investments provide matching with MSIF's floating rate Credit Facilities(3)

MSIF maintains a legacy portfolio of debt and equity investments in LMM companies

MSIF no longer makes investments in new LMM portfolio companies, but will continue to participate in follow-on investments in its existing LMM portfolio companies alongside Main Street

Investment objectives

Attractive cash yield from secured debt investments (12.1%(1) weighted-average cash coupon as of March 31, 2026); plus

Dividend income, fair value appreciation and periodic capital gains from equity investments

Investments are structured for (i) protection of capital, (ii) high recurring income and

(iii) meaningful capital gain opportunity

Typical entry enterprise values between 4.5x - 7.0x EBITDA

Typical entry leverage multiples between 2.0x - 4.0x EBITDA to MSIF debt investment

Focus on self-sponsored, "one-stop" financing opportunities

Co-investments with Main Street in partnership with business owners, management teams and entrepreneurs

Provide highly customized financing solutions

Recapitalization, buyout, growth and acquisition capital

Investments in established, profitable companies

Investments have low correlation to the broader debt and equity markets and attractive risk-adjusted returns

Unique LMM investment structures, combined with MSIF's goal to be a long-term partner, results in a highly diversified and high-quality investment portfolio

143 Private Loan, LMM(1) and Middle Market(2) portfolio companies

Average investment size of $9.0 million(3)(4)

Largest individual portfolio companies represent 3.6%(5) of total investment income and 3.6% of total portfolio fair value (with most individual portfolio companies representing less than 1.0% of income and fair value)

Investments on non-accrual status represent 1.1% of the total investment portfolio at fair value and 4.2% at cost

Weighted-average effective yield of 11.0%(6)

Issuer

Industry

Transaction type

Geography

End markets

Vintage

($ in millions)

12/31/2023

12/31/2024

12/31/2025

3/31/2026

Number of Portfolio Companies

Private Loan

Lower Middle Market

Middle Market

Other Portfolio

Total

150

157

150

$ Invested - Cost Basis

Private Loan

$ 586.4

$ 697.5

$ 821.7

$ 843.1

% of Total

56.5%

61.3%

65.2%

65.0%

Lower Middle Market

$ 315.7

$ 357.1

$ 384.8

$ 399.7

% of Total

30.4%

31.4%

30.5%

30.8%

Middle Market

$ 114.7

$ 66.3

$ 39.8

$ 40.3

% of Total

11.0%

5.8%

3.2%

3.1%

Other Portfolio

$ 21.5

$ 17.8

$ 13.7

$ 13.4

% of Total

2.1%

1.5%

1.1%

Total

$ 1,038.3

$ 1,138.7

$ 1,259.9

$ 1,296.5

($ in millions)

12/31/2023

12/31/2024

12/31/2025

3/31/2026

$ Invested - Fair Value

Private Loan

$ 595.3

$ 677.9

$ 809.0

$ 823.1

% of Total

54.4%

57.6%

60.6%

60.1%

Lower Middle Market

$ 387.0

$ 436.1

$ 487.6

$ 507.6

% of Total

35.4%

37.0%

36.5%

37.1%

Middle Market

$ 86.0

$ 39.4

$ 23.3

$ 23.0

% of Total

7.9%

3.3%

1.7%

Other Portfolio

$ 24.6

$ 24.1

$ 15.5

% of Total

2.3%

2.1%

1.2%

1.1%

Total

$ 1,092.9

$ 1,177.5

$ 1,335.4

$ 1,369.2

% of Total $ Invested in Debt (Cost Basis)

Private Loan

$ 552.0

$ 655.2

$ 756.4

$ 784.9

% of Total Private Loan

94.1%

93.9%

92.1%

93.1%

Lower Middle Market

$ 221.6

$ 242.0

$ 271.6

$ 285.2

% of Total Lower Middle Market

70.2%

67.8%

70.6%

71.3%

Middle Market

$ 106.8

$ 58.2

$ 32.4

$ 32.9

% of Total Middle Market

93.1%

87.8%

81.4%

81.7%

Total

$ 880.4

$ 955.4

$ 1,060.4

$ 1,103.0

% of Total Investment Portfolio

84.8%

83.9%

84.2%

85.1%

MSC Income Fund, Inc. NYSE: MSIF

Disclaimer

MSC Income Fund Inc. published this content on May 08, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 08, 2026 at 17:20 UTC.