CION Investment Corp (CION)

NII per share of $0.29 quarterly ($1.16 annualized) covers the declared base distribution of $0.30 per share quarterly ($1.20 annualized) at approximately 97% coverage, placing it near the 95–105% range of the rubric's anchor 3. The payout coverage ratio of 0.76 indicates supplemental income is being used to support distributions. Management commentary highlights confidence with NII up sequentially and no new non-accruals, suggesting stability, though the coverage remains tight without meaningful cushion above 110% required for a score of 5. The company has maintained consistent $0.30 monthly base distributions with no recent cuts, supporting the stable characterization.

CION's leverage metrics place it at the band edges with mixed funding characteristics. The net debt-to-equity ratio of 1.52x as of June 30, 2026 (down from 1.62x) shows improving but still elevated leverage. Funding is mixed: 75% unsecured debt and 25% senior secured bank debt, with recent issuances of 7.50% and 8.00% senior unsecured notes due 2029 and 2031 providing some maturity laddering. The company demonstrates active deleveraging (repaid $125 million post-quarter, reduced portfolio by $90 million), adequate liquidity with $163 million cash and $25 million available capacity, and management commentary reflects confidence in operations. However, the absence of investment-grade ratings and the still-elevated leverage ratio prevent a higher score, while improving trends and mixed funding prevent a lower score.

Non-accruals at 1.44% of fair value are well below the 5% threshold and improved from 1.53% in the prior quarter, meeting the anchor for a score of 5. However, the earnings release does not disclose PIK income as a percentage of total income, preventing full assessment against the rubric. Net realized losses of $17.966 million in Q2 2026 represent a negative performance metric, though this is partially offset by $34.776 million in net unrealized gains during the same period. The portfolio shows improving credit quality with no new non-accrual additions and no internal risk rating downgrades, supporting a strong score despite the realized loss in the quarter.

CION's portfolio demonstrates strong quality metrics across multiple dimensions. The portfolio is 79.2% senior secured first-lien investments, exceeding the 80% threshold for a score of 5, with only 1.44% non-accruals at fair value indicating low credit stress. Granularity is solid with 82 portfolio companies across 23 industries, though the top-10 concentration is not explicitly disclosed. The portfolio shows defensive characteristics with a median EBITDA of $33.7 million and weighted average interest coverage of 1.87x, though leverage at 5.07x net debt/EBITDA is moderately elevated. The company is actively deleveraging and repurchasing shares at a discount to NAV, demonstrating management confidence in portfolio quality and valuation.

CION appears to operate with an external management structure, but the filing provides insufficient detail on fee arrangements to confirm whether they meet shareholder-friendly standards (net-asset base, ≥7% hurdle, lookback). NAV per share has grown modestly from $13.11 (Q1 2026) to $13.57 (Q2 2026), a 3.5% quarterly increase, suggesting recent positive momentum rather than persistent decline or flat performance. The company's deleveraging strategy and active share repurchase program indicate management alignment with shareholders, but without explicit fee structure disclosure, the score reflects a standard external management arrangement with recent NAV growth that exceeds the "roughly flat" anchor for a 3-rating.

Valuation unavailable — own-history has 0 point(s), fewer than the 8 required; total computed over the 5 model categories.