Phillip Street Middle Market Lending Fund Files Reg FD Disclosure on PIK

What Happened
Phillip Street Middle Market Lending Fund LLC filed an 8-K (Item 7.01) on March 3, 2026, furnishing a Regulation FD disclosure about certain portfolio characteristics 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 1.9% of the portfolio at fair value. It also disclosed that its portfolio contains investments with payment-in-kind (PIK) interest terms, and that 2.3% of the Company’s total investment income in Q4 2025 was derived from PIK investments; 0.3% was from PIK that was introduced via a loan modification after the original agreement.

Key Details

• Filing: Form 8-K, Item 7.01 (Regulation FD Disclosure), filed March 3, 2026.
• ARR-underwritten exposure: 1.9% of the portfolio at fair value as of December 31, 2025.
• PIK contribution to income: 2.3% of total investment income in Q4 2025; 0.3% attributable to PIK added by later loan modification.
• PIK usage: Can be part of original loan terms or added later through amendments, per the disclosure.

Why It Matters
This disclosure gives investors more detail on credit and cash-flow characteristics of the fund’s portfolio. ARR-underwritten loans are a minority (1.9%) of assets, and PIK interest — which increases principal rather than paying cash interest — accounted for a modest share of Q4 2025 income (2.3%), with only 0.3% coming from post‑origination modifications. Investors should note these specifics because PIK accruals can affect near-term cash distributions and change reported asset balances, while the relatively small percentages suggest limited current exposure.