Steele Creek Capital Sheds Three-Quarters of Portfolio, Weighs Full Liquidation
New share sales are already frozen, and the board is weighing whether to halt the quarterly repurchase program that has been the fund’s only liquidity outlet.
August 26, 2026
Steele Creek Capital Corporation has sold the bulk of its investment portfolio and moved to terminate its bank credit line, clearing the way for a board decision on winding the business development company up entirely.
On August 18, the company’s investment adviser sold 164 broadly syndicated loan positions — 75.8 percent of the portfolio at fair value as of June 30 — through a bids-wanted-in-competition auction canvassing more than 22 dealers. The sales will generate gross proceeds of roughly $73 million. Steele Creek realized a net loss of $1.7 million on the disposals, while execution prices came in about $462,000 above the June 30 marks.
A board-approved retreat
The trade is the first step in a deleveraging plan approved unanimously by the board, including its independent directors, framed both as protection against market volatility and as a way to preserve the board’s flexibility to consider a full liquidation and dissolution. The rationale the board set out covers most of the pressure points facing a small non-traded credit vehicle at once:
- the company’s sub-scale size, and the difficulty of raising equity capital in the current environment;
- an expectation that assets will keep shrinking for the foreseeable future;
- the strain a contracting asset base puts on effective portfolio management;
- the cost of maintaining BDC status and reporting-company obligations;
- the adviser’s wish to lock in gains the broadly syndicated loan market has produced over recent months.
Roughly $65 million of the proceeds will repay borrowings under the company’s revolving credit facility with Bank of America in full, with the final figure set as of the prepayment date. The facility allowed borrowings of up to $80 million, expandable to $130 million, secured by loans and other assets. Steele Creek has given notice of its election to terminate the agreement and will pay no early termination penalties or fees.
The retreat extends a long slide. Steele Creek Capital’s Portfolio Slips to $108.6M as Market Volatility Hits Q1 documented a portfolio down to $108.6 million and net asset value per share of $8.38 at the end of the first quarter, with redemptions outpacing new subscriptions.
What holders face next
Over the next several weeks the board expects to deliberate with the adviser and outside advisers before reaching a final determination on liquidation and dissolution, which would require shareholder approval. Under consideration alongside it is whether to suspend the quarterly repurchase program — which, absent any listed market for the shares, is the only exit currently available to holders.
Share sales are already suspended indefinitely, ending the drip of small private placements that had been the company’s recent fundraising channel.
Steele Creek furnished a letter to stockholders on August 25 and filed unaudited pro forma statements reflecting the transaction as of and for the periods ended June 30.
