West Bay BDC LLC 8-K

What Happened

• West Bay BDC LLC filed a Form 8-K (Regulation FD Disclosure) on March 3, 2026, providing additional detail about its investment portfolio as of December 31, 2025.
• The company reported that loans underwritten based on a portfolio company’s annualized recurring revenue (ARR) rather than EBITDA made up 2.6% of the portfolio at fair value.
• The filing also disclosed the presence of payment-in-kind (PIK) terms in some investments (PIK means accrued interest is added to loan principal instead of paid in cash). During Q4 2025, 1.9% of the Company’s total investment income was from PIK investments, and 0.0% of total investment income was from PIK that was introduced later as a loan modification.

Key Details

• 2.6% of total portfolio at fair value (as of 12/31/2025) are loans underwritten on ARR instead of EBITDA.
• 1.9% of total investment income in Q4 2025 was from investments with PIK terms.
• 0.0% of total investment income in Q4 2025 came from PIK that was added via a loan modification or amendment after the original agreement.

Why It Matters

• These disclosures quantify exposure to nonstandard underwriting (ARR-based loans) and to PIK interest, both of which can affect cash flow and credit risk differently than traditional, cash-interest loans.
• The reported percentages are relatively small, indicating limited portfolio exposure: ARR-based loans are 2.6% of assets and PIK-generated income was 1.9% of Q4 2025 investment income, with no evidence in that quarter of PIK being added as a post-origin modification.
• For investors, this provides clearer detail on sources of income and potential repayment structure risks without indicating a material change to the company’s overall portfolio composition.