Gladstone Investment Estimates Up to 8-Cent Annual NII Lift if SOFR Rises 50-150 BPS

Gladstone Investment Corporation (GAIN) projected annual net investment income gains of up to 8 cents per share under higher-rate scenarios, while expected SFEG proceeds could reduce leverage.

The estimate puts annual NII $0.01 to $0.08 higher per share if SOFR rises by 50 to 150 basis points. During Q2 fiscal 2027, adjusted NII declined amid lower success fees and higher borrowing costs. Management also cited rate floors as protection.

GAIN expects equity proceeds equal to about 85% of SFEG’s fair value. The remaining 15% is tied to discounted escrows. The expected proceeds should reduce leverage, and the company may make a supplemental distribution, though its amount and timing have not been determined.

GAIN deployed about $156 million during the quarter and reported growth in its debt portfolio. Management also described new deal origination, portfolio company acquisitions and add-on activity at existing companies.

At cost, nonaccrual loans made up 3.4% of the portfolio; at fair value, they made up 0.5%. Management expects two nonaccrual investments to exit in the coming months. A third has begun making incremental payments toward past-due interest.