Overview of Investcorp Credit Management BDC, Inc.

Investcorp Credit Management BDC, Inc. (ICMB) is a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940. ICMB’s primary investment objective is to maximize total return to stockholders in the form of current income and capital appreciation by investing directly in debt and related equity of privately held middle market companies.

ICMB is externally managed by CM Investment Partners LLC (the “Adviser”), which is a subsidiary of Investcorp, a leading global credit investment platform. In 2019, Investcorp acquired a majority ownership stake in the Adviser, and in 2023 increased its ownership further.

As a BDC, ICMB is required to comply with certain regulatory requirements, including that at least 70% of its total assets must be in “qualifying assets” such as investments in private or thinly-traded public companies. To qualify as a regulated investment company (RIC) for tax purposes, ICMB must distribute at least 90% of its investment company taxable income to shareholders each year.

Financial Performance

For the three months ended March 31, 2026, ICMB reported:

• Investment income of $3.6 million, down from $4.4 million in the prior year period. This decrease was primarily due to lower interest income from a smaller investment portfolio and lower interest rates.

• Expenses, net of waivers, of $3.2 million, down from $3.7 million in the prior year period. This decrease was mainly due to lower interest expense and an increase in the waiver of base management fees.

• Net investment income before taxes of $0.3 million, down from $0.7 million in the prior year period. The decrease was driven by lower investment income, partially offset by lower expenses.

• Net realized gains on investments of $19,000, compared to net realized losses of $1.6 million in the prior year period.

• A net change in unrealized depreciation on investments of $8.8 million, compared to net unrealized appreciation of $3.2 million in the prior year period.

Overall, ICMB’s financial performance in the first quarter of 2026 was weaker than the prior year, with lower investment income and net investment income, as well as net unrealized losses on the investment portfolio.

Investment Portfolio and Activity

As of March 31, 2026, ICMB’s $151.4 million investment portfolio consisted of:

• 82.54% first lien investments
• 17.46% equity, warrants and other positions
• Investments in 34 portfolio companies
• Average investment size of $4.5 million, with the largest investment at $11.6 million

The industry composition of the portfolio was diversified, with the largest exposures in Professional Services (15.70%), Commercial Services & Supplies (11.23%), and Diversified Consumer Services (9.71%).

During the first quarter of 2026, ICMB made $0.8 million in new and follow-on investments, all of which were first lien loans. This was down significantly from the $5.1 million invested in the prior year period.

The weighted average yield on the debt investments was 11.85% as of March 31, 2026, up from 10.34% at the end of 2025. The overall portfolio yield was 8.63%, up from 7.71% at the end of 2025. These increases were driven by higher interest rates.

Asset Quality and Risk Management

ICMB uses an internal investment rating system to monitor the credit profile and risk of its portfolio companies. As of March 31, 2026:

• 64.4% of the portfolio was rated “1” or “2”, indicating investments performing at or above expectations
• 25.7% was rated “3”, indicating investments performing below expectations but with no expected loss of return or principal
• 9.9% was rated “4” or “5”, indicating investments performing substantially below expectations with expected losses

The percentage of the portfolio rated “4” or “5” increased from 7.6% at the end of 2025, indicating a modest deterioration in asset quality. ICMB will need to closely monitor these underperforming investments.

Financing and Liquidity

ICMB’s key sources of financing are:

• $50 million Capital One revolving credit facility, with $44.9 million outstanding as of March 31, 2026
• $65 million in Floating Rate Senior Unsecured Notes due 2029, issued in March 2026 to refinance the prior 2026 Notes

As of March 31, 2026, ICMB had $2.7 million in cash and cash equivalents, $8.8 million in restricted cash, and $55.1 million of available capacity on its revolving credit facility. Its asset coverage ratio based on par value of debt outstanding was 148.0%.

ICMB intends to generate additional liquidity through future debt and equity offerings, as well as cash flows from operations. The company must maintain asset coverage of at least 150% to comply with BDC regulations and the covenants on its debt.

Outlook and Risks

Looking ahead, ICMB faces several key risks and challenges:

• The impact of elevated inflation and the potential for a recession on its portfolio companies
• Volatility in interest rates and its effect on investment income and portfolio valuations
• Ability to maintain asset quality and manage underperforming investments
• Competition for middle market lending opportunities
• Regulatory requirements as a BDC and RIC

To mitigate these risks, ICMB will need to carefully underwrite new investments, actively monitor its portfolio, and prudently manage its capital structure and liquidity. The company’s affiliation with the experienced Investcorp platform provides some advantages, but ICMB will still need to navigate the uncertain economic environment effectively.

Overall, ICMB’s financial performance in the first quarter of 2026 was weaker than the prior year, with lower investment income, net investment income, and net unrealized gains. The company’s investment portfolio remains diversified, but asset quality has shown some deterioration. ICMB appears to have adequate liquidity and financing flexibility, but will need to manage various risks to deliver consistent results for shareholders going forward.