CION Investment Q2 Earnings Call Highlights

CION Investment (NYSE:CION) reported higher net investment income and net asset value in the second quarter of 2026, while reducing non-accruals and advancing a plan to lower leverage, expand share repurchases and limit new portfolio originations.

Net investment income was $14.2 million, or $0.29 per share, compared with $12.9 million, or $0.25 per share, in the first quarter. The company paid base distributions totaling $0.30 per share during the quarter and declared the same $0.30 per-share monthly base distribution for both the third and fourth quarters.

Net asset value rose 3.5% sequentially to $13.57 per share as of June 30, from $13.11 per share at the end of March. Chief Financial Officer Keith Franz said the increase was primarily driven by unrealized mark-to-market gains in the equity portfolio and the accretive effect of share repurchases.

Portfolio sales support valuation marks

Co-Chief Executive Officer Mark Gatto said CION sold more than $54 million of portfolio assets during the second quarter at 99% of par, close to their carrying values. After the quarter ended, the company sold an additional $10 million of assets at approximately 99% of par.

“We have the market confirming these specific fair value marks in real time,” Gatto said, referring to the sales. During the question-and-answer session, President and Chief Investment Officer Gregg Bresner said the buyers were a diversified group that included co-investors and investors already participating in the relevant loan syndicates. He said the sales were negotiated on a loan-by-loan basis and that CION continues to hold portions of most of the loans sold.

Sales and repayments totaled $157 million in the second quarter, including full repayments of first-lien positions in ESP Associates, Giving Home Health, Iron Horse, LUX Credit, MacNeill Pride and PRA Health Sciences. CION also completed secondary sales of investments including American Clinical, Future Pak, Ivy Hill VIII, Metric, Newbury Franklin and Sleep OpCo. Net funded investments declined by about $90 million during the quarter.

Deleveraging plan and repurchases

CION ended the second quarter with a net debt-to-equity ratio of 1.52x, down from 1.62x in the first quarter. The company reported $1.17 billion of total debt outstanding, total assets of approximately $1.8 billion and net assets of $668 million.

Management outlined a deleveraging plan targeting a reduction of about $270 million, which Franz said is expected to bring net leverage to roughly 1.35x and eventually toward the low end of the company’s 1.3x to 1.4x target range. The plan includes repayments on the company’s JPMorgan senior secured credit facility and an expected full repayment of $115 million in Israeli public bonds.

Gatto said CION had already repaid $125 million on the JPMorgan facility after quarter-end, primarily using asset-sale proceeds and ordinary-course repayments. He also said the company was negotiating additional transactions with third-party investors that, if completed, could raise the proportion of unsecured debt, reduce on-balance-sheet exposure and further lower leverage.

At quarter-end, approximately 75% of CION’s debt was unsecured and 25% was senior secured bank debt. The company had more than $160 million in cash and short-term investments, plus $25 million available under credit facilities.

The board authorized a $50 million increase in the company’s share repurchase program, bringing total authorization to $130 million. Gatto said CION intends to prioritize repurchases over new investments for the time being, except for follow-on investments in existing portfolio companies. Bresner said management does not expect net portfolio growth for the next several quarters while it focuses on deleveraging and repurchasing shares.

Longview transaction and portfolio quality

Management highlighted Longview Power, CION’s largest equity position, which entered into a purchase-and-sale agreement with a publicly traded company after the quarter ended. Financial terms of the acquisition were not disclosed. Gatto said that if the transaction closes, it could generate a meaningful amount of net investment income over the coming quarters and provide cash for distributions, debt reduction and share repurchases.

Bresner said Longview was acquired through CION’s opportunistic special-situations strategy, beginning with a discounted first-lien term loan purchase in 2018 followed by additional investments. Management said the expected proceeds would represent a significant premium to CION’s cost basis and be broadly consistent with the position’s valuation.

Credit metrics improved during the quarter. Non-accruals at fair value fell to 1.44% from 1.53% in the first quarter, while non-accruals at amortized cost declined to 4.41% from 5.35%. The company added no new investments to non-accrual status and removed LUX Credit following the company’s sale.

• Approximately 79% of the portfolio was invested in first-lien assets.
• About 98% of the portfolio was risk-rated three or better.
• Risk-rated three investments increased to 14.1% of the portfolio from 12.9% in the first quarter.
• CION reported 1.8% exposure to software and no annual recurring revenue-based loans as of the second quarter.

CION’s portfolio was valued at $1.65 billion at quarter-end, and the weighted average yield on debt and other income-producing investments rose to 10.6% from 10.4% in the first quarter.

Management also discussed David’s Bridal, where it is separating the legacy retail business from the Pearl AI digital media network, listings and marketplace platform. Bresner said the retail operation is expected to be managed for cash flow and profitability, while Pearl is positioned as a higher-growth technology-oriented business. The company said it is speaking with parties regarding strategic transaction opportunities for both operations.

About CION Investment (NYSE:CION)

CION Investment Corporation is a closed‐end, non‐diversified management investment company organized as a business development company under the Investment Company Act of 1940. Externally managed by CION Investment Management, LLC, the firm specializes in providing flexible capital solutions to U.S. and Canadian middle‐market companies. By combining debt and equity financing, CION seeks to support growth, acquisitions, recapitalizations and other strategic initiatives for its portfolio companies.

The company’s investment strategy centers on senior secured loans, subordinated debt and private equity interests.

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