BlackRock TCP Capital Corp. Announces Third Quarter 2024 Financial Results
Net Investment Income of
FINANCIAL HIGHLIGHTS
-
On a GAAP basis, net investment income for the quarter ended
September 30, 2024 was$33.9 million , or$0.40 per share on a diluted basis, which exceeded the regular dividend of$0.34 per share paid onSeptember 30, 2024 . Excluding amortization of purchase discount recorded in connection with the Merger(1), adjusted net investment income(1) for the quarter endedSeptember 30, 2024 was$30.8 million , or$0.36 per share on a diluted basis. -
Net asset value per share was
$10.11 as ofSeptember 30, 2024 compared to$10.20 as ofJune 30, 2024 . -
Net increase in net assets from operations on a GAAP basis for the quarter ended
September 30, 2024 was$21.6 million , or$0.25 per share, compared to a$51.3 million , or$0.60 per share, net decrease in net assets from operations for the quarter endedJune 30, 2024 . -
Total acquisitions during the quarter ended
September 30, 2024 were approximately$72.8 million and total investment dispositions were$139.2 million during the three months endedSeptember 30, 2024 . -
As of
September 30, 2024 , net leverage was 1.08x compared to 1.13x atJune 30, 2024 . -
As of
September 30, 2024 , debt investments on non-accrual status represented 3.8% of the portfolio at fair value and 9.3% at cost, compared to 4.9% of the portfolio at fair value and 10.5% at cost as ofJune 30, 2024 . -
On
August 1, 2024 , the Company amended the Operating Facility to extend the maturity date toAugust 1, 2029 . Additionally, onAugust 23, 2024 , the Company paid off$250.0 million in aggregate principal amount of 3.90% notes due 2024 (the “2024 Notes”). -
On
November 6, 2024 , our Board of Directors declared a fourth quarter dividend of$0.34 per share and a special dividend of$0.10 per share, both payable onDecember 31, 2024 to stockholders of record as of the close of business onDecember 17, 2024 .
“We delivered solid adjusted net investment income of
“Our portfolio showed signs of improvement since last quarter as non-accrual investments declined; however, an additional non-accrual investment and certain markdowns resulted in a slight reduction in the NAV. We are working diligently with our borrowers, their lenders, and their sponsors to resolve credit issues with the goal of achieving positive outcomes for our shareholders.”
“At quarter end, our portfolio remained well diversified with 156 investments primarily in senior secured, first-lien loans. We have a strong capital and liquidity position to capitalize on a growing pipeline of attractive investment opportunities to deliver attractive risk-adjusted returns for our shareholders over the long term.”
SELECTED FINANCIAL HIGHLIGHTS(1) |
|||||||||||||||
|
Three months ended |
||||||||||||||
|
2024 |
|
2023 |
||||||||||||
|
Amount |
|
Per Share |
|
Amount |
|
Per Share |
||||||||
Net investment income |
$ |
33,877,641 |
|
|
|
0.40 |
|
|
$ |
28,319,912 |
|
|
|
0.49 |
|
Less: Purchase accounting discount amortization |
|
3,044,864 |
|
|
|
0.04 |
|
|
|
— |
|
|
|
— |
|
Adjusted net investment income |
$ |
30,832,777 |
|
|
|
0.36 |
|
|
$ |
28,319,912 |
|
|
|
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized and unrealized gain (loss) |
$ |
(12,244,681 |
) |
|
|
(0.14 |
) |
|
$ |
(15,496,980 |
) |
|
|
(0.27 |
) |
Less: Realized gain (loss) due to the allocation of purchase discount |
|
2,727,500 |
|
|
|
0.03 |
|
|
|
— |
|
|
|
— |
|
Less: Net change in unrealized appreciation (depreciation) due to the allocation of purchase discount |
|
(5,772,364 |
) |
|
|
(0.07 |
) |
|
|
— |
|
|
|
— |
|
Adjusted net realized and unrealized gain (loss) |
$ |
(9,199,817 |
) |
|
|
(0.10 |
) |
|
$ |
(15,496,980 |
) |
|
|
(0.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net increase (decrease) in net assets resulting from operations |
$ |
21,632,960 |
|
|
|
0.25 |
|
|
$ |
12,822,932 |
|
|
|
0.22 |
|
Less: Purchase accounting discount amortization |
|
3,044,864 |
|
|
|
0.04 |
|
|
|
— |
|
|
|
— |
|
Less: Realized gain (loss) due to the allocation of purchase discount |
|
2,727,500 |
|
|
|
0.03 |
|
|
|
— |
|
|
|
— |
|
Less: Net change in unrealized appreciation (depreciation) due to the allocation of purchase discount |
|
(5,772,364 |
) |
|
|
(0.07 |
) |
|
|
— |
|
|
|
— |
|
Adjusted net increase (decrease) in assets resulting from operations |
$ |
21,632,960 |
|
|
|
0.25 |
|
|
$ |
12,822,932 |
|
|
|
0.22 |
|
(1) On
As a supplement to the Company’s reported GAAP financial measures, we have provided the following non-GAAP financial measures that we believe are useful:
- “Adjusted net investment income” – excludes the amortization of purchase accounting discount from net investment income calculated in accordance with GAAP;
- “Adjusted net realized and unrealized gain (loss)” – excludes the unrealized appreciation resulting from the purchase discount and the corresponding reversal of the unrealized appreciation from the amortization of the purchase discount from the determination of net realized and unrealized gain (loss) determined in accordance with GAAP; and
- “Adjusted net increase (decrease) in net assets resulting from operations” – calculates net increase (decrease) in net assets resulting from operations based on Adjusted net investment income and Adjusted net realized and unrealized gain (loss).
We believe that the adjustment to exclude the full effect of purchase discount accounting under ASC 805 from these financial measures is meaningful because of the potential impact on the comparability of these financial measures that we and investors use to assess our financial condition and results of operations period over period. Although these non-GAAP financial measures are intended to enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. The aforementioned non-GAAP financial measures may not be comparable to similar non-GAAP financial measures used by other companies.
PORTFOLIO AND INVESTMENT ACTIVITY
As of
As of
During the three months ended
As of
__________________________
(1) Weighted average annual effective yield includes amortization of deferred debt origination and accretion of original issue discount, but excludes market discount and any prepayment and make-whole fee income. The weighted average effective yield on our debt portfolio excludes non-accrual and non-income producing loans.
CONSOLIDATED RESULTS OF OPERATIONS
Total investment income for the three months ended
Total operating expenses for the three months ended
Net investment income for the three months ended
LIQUIDITY AND CAPITAL RESOURCES
As of
The combined weighted-average interest rate on debt outstanding at
Total debt outstanding at
|
|
Maturity |
|
Rate |
|
|
Carrying Value (1) |
|
Available |
|
Total Capacity |
|
||||||
Operating Facility |
|
2029 |
|
SOFR+2.00% |
(2) |
|
$ |
121,253,796 |
|
|
$ |
178,746,204 |
|
|
$ |
300,000,000 |
|
(3) |
Funding Facility II |
|
2027 |
|
SOFR+2.05% |
(4) |
|
|
51,000,000 |
|
|
|
149,000,000 |
|
|
|
200,000,000 |
|
(5) |
Merger Sub Facility(6) |
|
2028 |
|
SOFR+2.00% |
(7) |
|
|
125,000,000 |
|
|
|
140,000,000 |
|
|
|
265,000,000 |
|
(8) |
SBA Debentures |
|
2025−2031 |
|
2.45% |
(9) |
|
|
131,500,000 |
|
|
|
10,000,000 |
|
|
|
141,500,000 |
|
|
2025 Notes ( |
|
2025 |
|
Fixed/Variable |
(10) |
|
|
92,000,000 |
|
|
|
— |
|
|
|
92,000,000 |
|
|
2026 Notes ( |
|
2026 |
|
2.85% |
|
|
|
325,497,355 |
|
|
|
— |
|
|
|
325,497,355 |
|
|
2029 Notes ( |
|
2029 |
|
6.95% |
|
|
|
321,590,452 |
|
|
|
— |
|
|
|
321,590,452 |
|
|
Total leverage |
|
|
|
|
|
|
|
1,167,841,603 |
|
|
$ |
477,746,204 |
|
|
$ |
1,645,587,807 |
|
|
Unamortized issuance costs |
|
|
|
|
|
|
|
(7,798,616 |
) |
|
|
|
|
|
|
|
||
Debt, net of unamortized issuance costs |
|
|
|
|
|
|
$ |
1,160,042,987 |
|
|
|
|
|
|
|
|
||
(1) |
|
Except for the 2026 Notes and 2029 Notes, all carrying values are the same as the principal amounts outstanding. |
(2) |
|
As of |
(3) |
|
Operating Facility includes a |
(4) |
|
Subject to certain funding requirements and a SOFR credit adjustment of 0.15%. |
(5) |
|
Funding Facility II includes a |
(6) |
|
Debt assumed by the Company as a result of the Merger with BCIC. |
(7) |
|
The applicable margin for SOFR-based borrowings could be either 1.75% or 2.00% depending on a ratio of the borrowing base to certain committed indebtedness, and is also subject to a credit spread adjustment of 0.10%. If Merger Sub elects to borrow based on the alternate base rate, the applicable margin could be either 0.75% or 1.00% depending on a ratio of the borrowing base to certain committed indebtedness. |
(8) |
|
Merger Sub Facility includes a |
(9) |
|
Weighted-average interest rate, excluding fees of 0.35% or 0.36%. |
(10) |
|
The 2025 Notes consist of two tranches: |
On
On
RECENT DEVELOPMENTS
On
CONFERENCE CALL AND WEBCAST
Consolidated Statements of Assets and Liabilities |
||||||||
|
|
|
|
|
||||
|
|
(unaudited) |
|
|
|
|||
Assets |
|
|
|
|
|
|
||
Investments, at fair value: |
|
|
|
|
|
|
||
Non-controlled, non-affiliated investments (cost of |
|
$ |
1,672,494,110 |
|
|
$ |
1,317,691,543 |
|
Non-controlled, affiliated investments (cost of |
|
|
51,200,328 |
|
|
|
65,422,375 |
|
Controlled investments (cost of |
|
|
185,394,923 |
|
|
|
171,827,192 |
|
Total investments (cost of |
|
|
1,909,089,361 |
|
|
|
1,554,941,110 |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
104,181,765 |
|
|
|
112,241,946 |
|
Interest, dividends and fees receivable |
|
|
25,786,624 |
|
|
|
25,650,684 |
|
Deferred debt issuance costs |
|
|
6,650,857 |
|
|
|
3,671,727 |
|
Due from broker |
|
|
784,356 |
|
|
|
— |
|
Prepaid expenses and other assets |
|
|
1,207,929 |
|
|
|
2,266,886 |
|
Total assets |
|
|
2,047,700,892 |
|
|
|
1,698,772,353 |
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Debt (net of deferred issuance costs of |
|
|
1,160,042,987 |
|
|
|
985,200,609 |
|
Interest and debt related payables |
|
|
11,507,228 |
|
|
|
10,407,570 |
|
Incentive fees payable |
|
|
6,540,286 |
|
|
|
5,347,711 |
|
Interest Rate Swap, at fair value |
|
|
652,656 |
|
|
|
— |
|
Reimbursements due to the Advisor |
|
|
219,502 |
|
|
|
844,664 |
|
Management fees payable |
|
|
— |
|
|
|
5,690,105 |
|
Payable for investments purchased |
|
|
99,747 |
|
|
|
960,000 |
|
Accrued expenses and other liabilities |
|
|
3,001,588 |
|
|
|
2,720,148 |
|
Total liabilities |
|
|
1,182,063,994 |
|
|
|
1,011,170,807 |
|
|
|
|
|
|
|
|
||
Net assets |
|
$ |
865,636,898 |
|
|
$ |
687,601,546 |
|
|
|
|
|
|
|
|
||
Composition of net assets applicable to common shareholders |
|
|
|
|
|
|
||
Common stock, |
|
$ |
85,591 |
|
|
$ |
57,767 |
|
Paid-in capital in excess of par |
|
|
1,248,080,041 |
|
|
|
967,643,255 |
|
Distributable earnings (loss) |
|
|
(382,528,734 |
) |
|
|
(280,099,476 |
) |
Total net assets |
|
|
865,636,898 |
|
|
|
687,601,546 |
|
Total liabilities and net assets |
|
$ |
2,047,700,892 |
|
|
$ |
1,698,772,353 |
|
|
|
|
|
|
|
|
||
Net assets per share |
|
$ |
10.11 |
|
|
$ |
11.90 |
|
Consolidated Statements of Operations |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Investment income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income (excluding PIK): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlled, non-affiliated investments |
|
$ |
61,647,228 |
|
|
$ |
46,722,801 |
|
|
$ |
173,856,058 |
|
|
$ |
138,140,812 |
|
Non-controlled, affiliated investments |
|
|
381,494 |
|
|
|
48,712 |
|
|
|
1,113,813 |
|
|
|
141,950 |
|
Controlled investments |
|
|
2,980,201 |
|
|
|
2,970,153 |
|
|
|
8,535,851 |
|
|
|
7,954,881 |
|
PIK interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlled, non-affiliated investments |
|
|
3,827,236 |
|
|
|
3,511,734 |
|
|
|
8,267,269 |
|
|
|
8,728,033 |
|
Non-controlled, affiliated investments |
|
|
— |
|
|
|
— |
|
|
|
92,675 |
|
|
|
— |
|
Controlled investments |
|
|
388,897 |
|
|
|
— |
|
|
|
1,092,618 |
|
|
|
310,993 |
|
Dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlled, non-affiliated investments |
|
|
141,677 |
|
|
|
263,420 |
|
|
|
1,048,373 |
|
|
|
821,599 |
|
Non-controlled, affiliated investments |
|
|
1,015,415 |
|
|
|
672,734 |
|
|
|
2,747,604 |
|
|
|
1,960,002 |
|
Controlled investments |
|
|
423,031 |
|
|
|
— |
|
|
|
1,301,106 |
|
|
|
— |
|
Other income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlled, non-affiliated investments |
|
|
127,308 |
|
|
|
21,387 |
|
|
|
132,654 |
|
|
|
376,209 |
|
Non-controlled, affiliated investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
45,650 |
|
Total investment income |
|
|
70,932,487 |
|
|
|
54,210,941 |
|
|
|
198,188,021 |
|
|
|
158,480,129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other debt expenses |
|
|
21,160,551 |
|
|
|
12,133,863 |
|
|
|
54,117,604 |
|
|
|
35,971,338 |
|
Incentive fees |
|
|
6,540,286 |
|
|
|
6,010,047 |
|
|
|
19,236,336 |
|
|
|
17,255,238 |
|
Management fees |
|
|
6,185,025 |
|
|
|
6,092,673 |
|
|
|
18,567,719 |
|
|
|
18,065,948 |
|
Professional fees |
|
|
842,389 |
|
|
|
745,978 |
|
|
|
2,443,988 |
|
|
|
1,519,106 |
|
Administrative expenses |
|
|
547,458 |
|
|
|
357,921 |
|
|
|
1,702,669 |
|
|
|
1,092,268 |
|
Director fees |
|
|
202,500 |
|
|
|
185,500 |
|
|
|
616,719 |
|
|
|
745,319 |
|
Insurance expense |
|
|
214,102 |
|
|
|
134,212 |
|
|
|
565,168 |
|
|
|
426,790 |
|
Custody fees |
|
|
96,574 |
|
|
|
94,811 |
|
|
|
285,639 |
|
|
|
276,727 |
|
Other operating expenses |
|
|
1,265,961 |
|
|
|
122,860 |
|
|
|
2,687,733 |
|
|
|
1,781,273 |
|
Total operating expenses |
|
|
37,054,846 |
|
|
|
25,877,865 |
|
|
|
100,223,575 |
|
|
|
77,134,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income before taxes |
|
|
33,877,641 |
|
|
|
28,333,076 |
|
|
|
97,964,446 |
|
|
|
81,346,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Excise tax expense |
|
|
— |
|
|
|
13,164 |
|
|
|
— |
|
|
|
48,604 |
|
Net investment income |
|
|
33,877,641 |
|
|
|
28,319,912 |
|
|
|
97,964,446 |
|
|
|
81,297,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized and unrealized gain (loss) on investments and foreign currency |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized gain (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlled, non-affiliated investments |
|
|
(31,425,777 |
) |
|
|
(128,841 |
) |
|
|
(54,297,646 |
) |
|
|
(31,153,173 |
) |
Non-controlled, affiliated investments |
|
|
— |
|
|
|
— |
|
|
|
(12,810,138 |
) |
|
|
— |
|
Net realized gain (loss) |
|
|
(31,425,777 |
) |
|
|
(128,841 |
) |
|
|
(67,107,784 |
) |
|
|
(31,153,173 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net change in unrealized appreciation (depreciation) (1): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlled, non-affiliated investments |
|
|
27,118,840 |
|
|
|
(9,268,963 |
) |
|
|
(36,652,226 |
) |
|
|
11,820,648 |
|
Non-controlled, affiliated investments |
|
|
(3,594,328 |
) |
|
|
(4,131,670 |
) |
|
|
(9,661,686 |
) |
|
|
(5,339,736 |
) |
Controlled investments |
|
|
(4,539,213 |
) |
|
|
(1,967,506 |
) |
|
|
(9,190,060 |
) |
|
|
(4,837,760 |
) |
Interest Rate Swap |
|
|
195,797 |
|
|
|
— |
|
|
|
60,894 |
|
|
|
— |
|
Net change in unrealized appreciation (depreciation) |
|
|
19,181,096 |
|
|
|
(15,368,139 |
) |
|
|
(55,443,078 |
) |
|
|
1,643,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized and unrealized gain (loss) |
|
|
(12,244,681 |
) |
|
|
(15,496,980 |
) |
|
|
(122,550,862 |
) |
|
|
(29,510,021 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net increase (decrease) in net assets resulting from operations |
|
$ |
21,632,960 |
|
|
$ |
12,822,932 |
|
|
$ |
(24,586,416 |
) |
|
$ |
51,787,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted earnings (loss) per share |
|
$ |
0.25 |
|
|
$ |
0.22 |
|
|
$ |
(0.32 |
) |
|
$ |
0.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted weighted average common shares outstanding |
|
|
85,591,134 |
|
|
|
57,767,264 |
|
|
|
77,772,017 |
|
|
|
57,767,264 |
|
(1) Includes
ABOUT BLACKROCK TCP CAPITAL CORP.
FORWARD-LOOKING STATEMENTS
Prospective investors considering an investment in
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on estimates, projections, beliefs and assumptions of management of the company at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties in predicting future results and conditions. Actual results could differ materially from those projected in these forward-looking statements due to a variety of factors, including, without limitation, changes in general economic conditions or changes in the conditions of the industries in which the company makes investments, risks associated with the availability and terms of financing, changes in interest rates, availability of transactions, and regulatory changes. Certain factors that could cause actual results to differ materially from those contained in the forward-looking statements are included in the “Risk Factors” section of the company’s Form 10-K for the year ended
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106872955/en/
(310) 566-1094
investor.relations@tcpcapital.com
Source: