Meridian Credit Partners, Fund II

Meridian Credit Partners Strictly Private & Confidential

US Lower-Middle-Market Direct Lending

Meridian
Credit Partners

Fund II

Senior secured direct lending to the US lower middle market. Income now, capital protected, floating rate.

11.5%

Target Net IRR

1.55x

Target Net MOIC

9%

Current Cash Yield

~90%

First Lien

$350M Target
First Close Q4 2026

Fund at a Glance

A first-lien income fund, built for the whole cycle.

Fund Terms

Target / Hard cap$350M / $450M

StructureDelaware LP + Cayman feeder

Term6 yrs (3+3) · two 1-yr ext.

Fee / Carry / Pref1.5% · 12.5% · 7%

GP commit / First close$7M (2%) · Q4 2026

11.5%

Target Net IRR

1.55x

Target Net MOIC

9%

Current Cash Yield

~90%

First Lien

40%

Avg Loan-to-Value

S+575

Weighted Spread

The one line

Floating-rate senior secured loans to profitable US businesses with $5–25M EBITDA. Paid to wait, first in line if we are wrong.

Meridian Credit Partners · Fund II02 / 18

Why Now

Banks left the lower middle market. The income did not.

01 · Bank retreat

Regulation pulled banks upmarket

Post-crisis capital rules and consolidation pushed banks out of sub-$25M EBITDA lending. Non-bank direct lenders now fund the businesses banks used to serve.

02 · Rates

Floating income at double-digit yields

First-lien senior loans are paying all-in yields near 11–12% with SOFR floating on top. Income and downside protection in the same instrument, late in the cycle.

03 · Structure

The lower MM is under-competed

Fewer lenders per deal than the crowded upper market means tighter documents, real covenants, wider spreads, and genuine lender control.

The opportunity is not exotic. It is boring, senior, secured credit, priced better than it has been in a decade because the natural lender walked away.

~11%

All-in first-lien yield

Meridian Credit Partners · Fund II03 / 18

The Investable Universe

$5–25M EBITDA. First-lien. Sponsor and non-sponsor.

Company size. Profitable US businesses generating $5–25M of EBITDA. Large enough to be resilient, small enough to be under-banked.

Position. First-lien senior secured, ~90% of the book. Unitranche where we want to own the whole capital structure.

Sponsorship. Both sponsor-backed (lower-MM private equity) and non-sponsor (owner-operators), where our sourcing edge earns wider spreads.

Sectors. Business & industrial services, healthcare services, specialty distribution, niche manufacturing, logistics. No early-stage, no commodity, no single-technology risk.

Hold size. $8–15M per loan, 25–35 borrowers, so no single credit can sink the fund.

Universe at a glance

200k+

US firms in band

$5–25M

EBITDA target

~90%

First-lien share

40%

Avg loan-to-value

First-lienFloating rateCovenanted SponsorNon-sponsorCash-flow + asset

Meridian Credit Partners · Fund II04 / 18

Strategy

Get paid to wait. Sit first in line if we are wrong.

1Income first. Every loan is underwritten to a current cash yield. The fund distributes quarterly from quarter one of the investment period, not on an exit years away.

2Senior and secured. First-lien on the business, ~40% loan-to-value, with covenants that give us a seat at the table before a problem becomes a loss.

3Floating rate. Spreads set over SOFR (weighted S+575), so income rises with rates. No duration bet, no reaching for yield.

4Diversified by design. 25–35 loans, $8–15M each, spread across five defensive sectors. No borrower is more than ~5% of the fund.

5Own the downside. Every credit is modeled to a stress case and a recovery before it funds. A dedicated workouts partner runs any position that drifts.

Meridian Credit Partners · Fund II05 / 18

Our Edge

Why Meridian wins the loans it wants.

Sourcing

Three live channels

Direct owner relationships, sponsor coverage, and an intermediary network that sees deals banks pass on. ~540 screened a year.

Selectivity

~4% close rate

We say no to 96% of what we see. Discipline at the top of the funnel is the single biggest driver of a zero-loss record.

Structure

Lender-friendly docs

Under-competed deals let us hold covenants, call protection, and information rights the upper market has given away.

Workouts

A real downside desk

A 20-year restructuring partner owns monitoring and recovery. We do not learn workouts on the way down.

Fund I proof

$210M deployed across 24 loans, zero realized losses, 1.6x gross MOIC on realized positions, 10.8% net IRR to date. The edge is not a thesis. It has a track record.

Meridian Credit Partners · Fund II06 / 18

Origination Engine

Three channels feed one disciplined funnel.

Channel 01

Direct

Non-sponsor owners and management teams sourced through the partners' 18–20 year networks. Widest spreads, least competition.

Channel 02

Sponsor coverage

Lower-middle-market private equity firms who need a reliable, fast first-lien partner across their portfolio.

Channel 03

Intermediary network

Bank cast-offs, boutique advisors, and BDC club deals. Deal flow the crowded upper market never sees.

~540

Screened / yr

~110

IC-reviewed

18–24

Closed / yr

~4%

Close rate

Meridian Credit Partners · Fund II07 / 18

Investment & Underwriting Process

Five gates. One unanimous vote.

Step 1

Screen

Fit to mandate: size, sector, sponsorship, first-lien collateral. 80% out here.

Step 2

Diligence

Quality of earnings, customer and cohort analysis, management, downside drivers.

Step 3

Structure

Leverage, covenants, call protection, security package. Model to stress and recovery.

Step 4

IC vote

Written memo to a three-partner Investment Committee. Unanimous, or it does not fund.

Step 5

Close & monitor

Fund, then track covenants and cash quarterly. Workouts partner owns any drift.

Every loan is underwritten to what we recover if we are wrong, not just what we earn if we are right. That is why Fund I has never taken a realized loss.

Unanimous

IC approval required

Meridian Credit Partners · Fund II08 / 18

Portfolio Construction

Diversified so no one loan matters too much.

Construction target	Fund II
Number of borrowers	25–35
Average hold size	$8–15M
Max single borrower	~5% of fund
First-lien share	~90%
Average loan-to-value	40%
Weighted spread	SOFR + 575
Target current yield	~9%

Sector mix (target)

Business & industrial services 26%

Healthcare services 22%

Specialty distribution 20%

Niche manufacturing 18%

Logistics & transport 14%

Defensive, cash-generative sectors with hard or contracted revenue. No cyclical commodity exposure, no single-technology risk.

Meridian Credit Partners · Fund II09 / 18

Risk Management & Downside

We protect capital before we chase yield.

First-lien collateral. ~90% of the book is first in line on the assets and cash flows of the business.

Low attachment. ~40% loan-to-value means the business can lose more than half its value before our principal is at risk.

Covenants that bite. Financial maintenance covenants give us control early, when a problem is still fixable.

Diversification. No borrower over ~5%, five defensive sectors, so a single default is a rounding error, not a crisis.

Dedicated workouts. A 20-year restructuring partner runs any troubled position from day one of the drift.

Fund I record

Zero realized losses across 24 loans and a full rate cycle.

If losses run at 6%

Base-case modeling assumes a ~3% cumulative loss rate. Even at double that, first-lien recoveries and current income hold the fund at a 7.5% net IRR and a 1.32x MOIC. The downside is a lower return, not lost capital.

Meridian Credit Partners · Fund II10 / 18

Track Record · Fund I (2019 vintage)

A full cycle, zero realized losses.

$210M

Deployed

24

Loans

1.6x

Gross MOIC (realized)

10.8%

Net IRR to date

Fund I summary	Value
Vintage	2019
Capital deployed	$210M
Loans originated	24
Realized losses	Zero
Gross MOIC (realized)	1.6x
Net IRR to date	10.8%
Status	~85% realized / harvesting

What the record shows

Meridian priced risk correctly, held its covenants, and got paid. Fund II is the same team, the same discipline, more capital.

Past performance of Fund I is illustrative and does not guarantee Fund II results. Figures are net of fees; gross MOIC shown on realized positions only.

Meridian Credit Partners · Fund II11 / 18

Case Study 01 · Fund I

Project Anchor: industrial services, refinanced at par.

The loan. $15M first-lien to a profitable industrial services company, sourced direct, non-sponsor.

The structure. First-lien, maintenance covenants, call protection, ~42% loan-to-value at close.

What happened. The business grew into its plan and refinanced Meridian out at par after 18 months.

The result. Full principal back, current income throughout, plus call protection on the early takeout.

1.3x

Gross MOIC

14%

Gross IRR

18mo

Hold

The lesson

Price a good business correctly, hold your protections, and a first-lien loan returns capital plus a double-digit yield even on an early exit.

Meridian Credit Partners · Fund II12 / 18

Case Study 02 · Fund I

Project Beacon: field-services SaaS, exited via sponsor sale.

The loan. $20M unitranche to a sponsor-backed field-services SaaS company with contracted, recurring revenue.

The structure. Whole-capital-structure unitranche with covenants, call protection, and a modest equity warrant.

What happened. The sponsor sold the business; Meridian was repaid in full and the warrant paid off.

The result. Equity-like return from a debt instrument, earned through structure, not extra risk.

1.5x

Gross MOIC

16%

Gross IRR

Sale

Exit route

The lesson

Owning the whole structure with call protection and a small warrant turns a strong credit into an equity-like outcome, with debt-like downside.

Meridian Credit Partners · Fund II13 / 18

The Competing Field

Everyone else is fishing upmarket.

Lender type	Target size	Spread	Docs / control	In our band?
Large-cap direct / public BDCs	$50M+ EBITDA	Tighter	Covenant-lite	Rarely
Bank cash-flow lending	Any, low leverage	Low	Bank terms	Exited
Regional banks / SBIC	Small, local	Mixed	Relationship	Constrained
Meridian Credit Partners	$5–25M EBITDA	S+575	Lender-friendly, covenanted	This is the lane

The crowded money is chasing $50M-plus deals with weaker documents for less spread. We are one of few disciplined lenders in the $5–25M band, which is exactly why the terms are better here.

Under-competed

Fewer lenders per deal

Meridian Credit Partners · Fund II14 / 18

Returns & Scenarios

Income-led returns, resilient in stress.

Case	Net IRR	Net MOIC	Loss rate
Downside	7.5%	1.32x	~6%
Base	11.5%	1.55x	~3%
Upside	14.0%	1.70x	~1%

Gross-to-net bridge (Base)

Gross IRR15.0%

Less management fee−1.4%

Less carried interest−1.6%

Less fund expenses−0.5%

Net IRR to LP11.5%

A shallow J-curve: first cash distributions land within ~2 quarters of first close, and DPI crosses 1.0x around year 4–5. Full model in Returns & Scenarios and LP Calc.

Meridian Credit Partners · Fund II15 / 18

Fund Terms & Economics

Aligned, plainly stated.

Term	Fund II
Target / Hard cap	$350M / $450M
Structure	Delaware LP + Cayman feeder
Term	6 yrs (3 invest + 3 harvest)
Extensions	Two 1-year
Management fee	1.5% on invested capital
Carried interest	12.5%

Term	Fund II
Preferred return	7%
Waterfall	European, whole-fund
GP catch-up	100%
Distributions	Quarterly
GP commitment	2% ($7M)
First close	Q4 2026

Fee on invested (not committed) capital, a whole-fund European waterfall, and a 7% preferred return mean the GP earns carry only after LPs receive their capital plus preferred. Full terms in the PPM/LPA summary in the Data Room.

Meridian Credit Partners · Fund II16 / 18

General Partner

The people who underwrite your capital.

Managing Partner

David Reyes

18 years in leveraged finance and private credit. Former Head of Originations at a large public BDC platform, where he ran a 20-person desk and structured $3B+ of senior secured facilities. Sets strategy, chairs the IC, owns LP relationships.

Partner, Underwriting

Sarah Chen

14 years in corporate and leveraged credit. Former Senior Credit Officer at a large-cap credit manager, leading diligence on middle-market first-lien and unitranche deals. Runs underwriting, credit modeling, and the IC memo process. CFA.

Partner, Portfolio & Workouts

Michael O'Brien

20 years in restructuring and special situations. Former restructuring advisor and distressed-credit investor across multiple cycles. Owns monitoring, covenants, amendments, and recovery. Meridian's downside desk.

Backed by a bench of analysts, a dedicated fund controller, and an advisory group of former lenders and platform CFOs. All names and biographies are illustrative for this sample.

Meridian Credit Partners · Fund II17 / 18

Meridian Credit Partners The Ask

Fund II · First Close Q4 2026

Back a proven first-lien
income strategy at scale.

$350M target, $450M hard cap. GP committing $7M. A diversified 25–35 loan first-lien portfolio paying quarterly income from quarter one, protected by the discipline that took Fund I through a full cycle with zero realized losses.

$350M

Target

11.5%

Target Net IRR

9%

Cash Yield

Q4 2026

First Close

ir@meridiancredit.example
New York