CNL Strategic Capital Expands Credit Facility and Updates Net Asset Value

Company secures flexibility for additional capital while adjusting asset valuation and distributions.

February 24, 2025

More Credit, Extended Maturity

CNL Strategic Capital is giving itself more financial flexibility. The company has amended its revolving credit agreement with Valley National Bank, creating an option to double its borrowing capacity from $50 million to $100 million. Alongside this change, the board has updated net asset values (NAV) across all share classes, adjusting for shifts in portfolio valuations.

The revised agreement gives Valley National Bank the discretion to increase the credit line to $100 million, should additional liquidity be needed. If expanded, the added funds will carry a 0.25% commitment fee. The credit facility’s maturity date now extends to February 15, 2026, providing a longer runway for borrowing.

CNL Strategic Capital B, Inc., the borrower and subsidiary of the company, will continue paying interest at 1-Month Term SOFR plus 2.75%, with payments due monthly. An unused borrowing fee of 0.15% per year applies to any portion of the original $50 million facility that goes untapped. Borrowers can prepay debt at any time without penalty, but repayment is required within 180 days of borrowing.

As part of the arrangement, CNL Strategic Capital, LLC guarantees the subsidiary’s borrowings. The company also pledges certain bank and deposit accounts as collateral, ensuring available funds to cover outstanding debt.

NAV Adjustments Reflect Market Movements

At the end of January, CNL Strategic Capital’s board reassessed the company’s net asset value per share across all share classes. The results show small declines across the board, with decreases ranging from $0.06 to $0.11 per share compared to the previous month.

Class FA:$39.49

Class A:$35.58

Class T:$35.61

Class D:$35.32

Class I:$36.01

Class S:$40.03

The shift stems from changes in portfolio company valuations. Out of 16 investments, the fair value of 10 increased, while 6 declined, ultimately pushing NAV slightly lower. As of January 31, 2025, the company’s total net asset value sits at $1.24 billion.

Pricing Adjustments for New Share Purchases

With NAV changes in place, the board also adjusted public offering prices for new share purchases. The revised figures, effective February 27, 2025, reflect current NAV and include applicable fees.

Class A:$38.89

Class T:$37.39

Class D:$35.32

Class I:$36.01

Investors reinvesting distributions will see purchases executed at NAV per share as of January 31, 2025.

Shareholder Distributions and Returns

The company continues to issue monthly distributions across all share classes. The latest round of payouts, scheduled for March 27, 2025, is based on record dates set for March 26.

Class FA, A, I, S:$0.104167

Class D:$0.093750

Class T:$0.083333

For January, 65.3% of total distributions came from net investment income, while 34.7% was sourced elsewhere.

Share class returns vary based on sales load and investment performance. The annualized return since inception sits at 10.9% for Class FA (no sales load) and 8.4% for Class A (with sales load). Returns reflect compounding effects over time, with varying levels across share classes.

What’s Next?

CNL Strategic Capital’s latest moves put more borrowing power on the table while keeping share valuations and distributions in check. With an extended credit facility and a recalibrated NAV, the company is positioning itself to adapt to evolving market conditions. Investors will be watching how these financial shifts impact future performance.