Hercules Capital, Inc. (HTGC) SEC Filings & Earnings Calls

Increased leverage from new debt issuance; interest expense will rise.

“Creation of a Direct Financial Obligation” · word for word

Credit risk from portfolio companies

“Investments, at fair value: Non-control/Non-affiliate investments (cost of $ 4,490,389 and $ 4,362,559 , respectively) $ 4,463,337 $ 4,351,596” · word for word

Interest rate risk

“Interest expense increased to $28.1 million from $22.9 million in Q2 2025, a 22.7% increase.”

Concentration risk in life sciences

“Drug Discovery & Development ( 43.21 %)*” · word for word

Early loan repayments increased significantly, indicating potential prepayment risk.

“Unscheduled early principal repayments of $572.1 million, an increase of 153.4% from Q1 2026”

Increased leverage from new debt issuance.

“6.300% Note due 2031” · word for word

Non-accruals increased to <0.5% from 0.2% QoQ, still low.

“investments on non-accrual status comprised <0.5% of the total investment portfolio at cost as of June 30, 2026, representing an increase from 0.2%” · word for word

Interest rate sensitivity; floating rate assets with fixed rate liabilities create NII sensitivity.

“98.0% of debt portfolio floating rate; 80.4% of borrowings fixed; 200bp rate change impacts NII by ~$11.2M.”

Credit risk in venture debt portfolio; unrealized depreciation.

“Net change in unrealized depreciation of $44.8M in Q1 2026.”

Portfolio valuation pressure

“Total net change in unrealized appreciation (depreciation) $(45,005) for Q1 2026 vs $(25,565) for Q1 2025.” · word for word

Leverage increase

“Debt (net of unamortized debt issuance costs) $2,539,032 as of March 31, 2026 vs $2,286,444 as of December 31, 2025.” · word for word

Prepayment Risk

“During the year ended December 31, 2025, we received early principal payments and early payoffs on our debt investments of approximately $811.2 million.” · word for word

Interest Rate Risk

“As of December 31, 2025, approximately 97.9% of our debt investments were at floating rates or floating rates with a floor, and 2.1% of our debt investments were at fixed rates.” · word for word

Valuation Uncertainty

“As of December 31, 2025, portfolio investments, whose fair value is determined in good faith by our Valuation Committee, subject to oversight and approval by our Board, were approximately 97.4% of our total assets.” · word for word

Leverage Risk

“Assumes $4.6 billion in total assets, $2.3 billion in debt outstanding, $2.2 billion in stockholders' equity, and an average cost of funds of 5.0%.” · word for word

Concentration Risk

“Phathom Pharmaceuticals, Inc. represents 8.3% of net assets; Marathon Health, LLC 8.2%; Armis, Inc. 7.2%; ChenMed, LLC 5.8%; Shield AI, Inc. 5.3%; Tipalti Solutions Ltd. 5.1%; SeatGeek, Inc. 5.0%.”

Interest rate sensitivity: floating-rate portfolio benefits from higher rates but could face pressure if rates decline.

“97.9% of debt investment portfolio priced at floating interest rates; 80.7% of debt borrowings fixed.”

Unfunded commitments of $385.6M represent potential future cash requirements.

“$385.6 million of available unfunded commitments at the request of the portfolio company.” · word for word

Interest rate sensitivity: floating-rate assets vs fixed-rate debt creates NII tailwind in rate reduction environment

“97.8% of its debt investment portfolio being priced at floating interest rates...86.7% of its outstanding debt borrowings bearing fixed interest rates” · word for word

Early loan repayments of $262.3M could signal prepayment risk

“Unscheduled early principal repayments or 'early loan repayments' of $262.3 million” · word for word

Core Yield Compression

“Core Yield (Non-GAAP) (1) 12.5 % │ 13.3 %” · word for word

Realized Losses from Write-offs

“Net realized gains (losses) $ (61,049)”

PIK Income Concentration

“Ending PIK interest receivable balance $95,583 $62,611”

Portfolio Credit Quality Deterioration

“our debt investments had a weighted average investment grading of 2.27 and 2.26 on a cost basis” · word for word