TCG BDC, Inc. (NASDAQ: CGBD) today announced preliminary estimates
of certain financial results for its first quarter ended March 31,
2020, and provided a further business update.
Linda Pace, TCG BDC’s Chief Executive Officer
said, “The human toll of the COVID-19 pandemic is significant, and
our thoughts remain with all those affected. At TCG BDC, we are
extremely focused on ensuring we work with our portfolio companies
to sustain value through this unprecedented economy-wide demand
shock. The expected forward economic environment will inevitably
produce losses, but we are encouraged by our initial portfolio
assessment and performance, as the senior orientation of our
portfolio should position us to outperform over the cycle.
During the first quarter, the right side of our balance sheet
functioned well and we met every committed funding request from our
portfolio companies. Our business continues to operate normally in
a very uncertain environment.”
Taylor Boswell, TCG BDC’s Chief Investment
Officer said, “We have been actively engaged for over a month in a
detailed evaluation of our portfolio, including constant
communication with the management teams and owners of our
borrowers. While still early, our credit performance remains solid,
with 102 of our 104 underlying borrowers making standard payments
at quarter end. Our rigorous valuation process assumed continued
economic disruption, and as a result, when combined with material
widening of pricing benchmarks our Net Asset Value per share at
March 31, 2020 is expected to decline 14-15% from the December 31,
2019 level.”
Tom Hennigan, TCG BDC’s Chief Financial Officer
said, “The month of March was a challenge for all lenders as the
abrupt shift in market conditions resulted in unprecedented calls
for revolver fundings and a slowing of anticipated repayments.
While our leverage ratio will temporarily exceed the top end of our
target range, we expect to stay comfortably in compliance with both
regulatory requirements and covenants under our various credit
facilities. Our liquidity position remains strong, with over
$300 million in the form of cash and unused commitments under our
credit facilities while total unfunded commitments stood at
approximately $105 million as of quarter-end. We remain
confident that we can manage our liquidity and leverage profiles
with appropriate cushions through this environment, including
reserving for capital needs which may arise at our portfolio
companies.”
First Quarter 2020 Preliminary Estimates
of Certain Financial Results
- We estimate our NAV per share as of March 31, 2020 will be
between $14.00 and $14.30.
- We expect our net investment income per share will be between
$0.39 and $0.42.
- Loans representing over 98% of investments at fair value made
full principal and interest payments in the first quarter, with
only two borrowers requiring payment concessions or amendments at
quarter end.
Liability Management
Updates
- As of March 31, 2020, we were in compliance with all covenants
under all of our financing facilities.
- We required no amendments or waivers from lenders, or capital
infusions from any source through March 31st.
- We continue to maintain a healthy liquidity profile, with $60
million of cash on the balance sheet and over $260 million in
unused commitments under our credit facilities, subject to
borrowing base restrictions. Our unfunded commitments were
approximately $105 million.
- We have had since September 2019, and continue to have, an
investment grade rating from a Nationally Recognized Statistical
Ratings Organization (NRSRO).
- There have been no material changes to our liquidity or
leverage profile since quarter end.
Management Support Updates
- The Board is pleased to announce that Mark Jenkins, Head of
Carlyle Global Credit since 2016 and existing member of the
Company’s Investment Committee, was recently appointed to the Board
of Directors effective April 17, 2020. Mr. Jenkins will replace
Eliot Merrill, a Managing Director of Carlyle, who has served on
the Company’s board since January 2013.
- Our Manager, employees, and related parties own approximately
9% of CGBD’s outstanding common stock, representing our strong
alignment with shareholders. We believe Carlyle possesses an
attractive combination of alignment, investment acumen and
financial capabilities to support the Company through all stages of
the economic cycle.
Our business continues to operate normally
through this volatile period and our portfolio is well positioned
to weather the demanding environment we expect ahead. Our team
continues to actively manage the portfolio, maintaining continuous
contact with our borrowers to evaluate business performance and
engage in constructive dialogue to ensure value preservation. We
are not only focused on value maximization in our existing
portfolio, but also continue to engage actively with management
teams and owners of businesses to evaluate new investment
opportunities which meet the investment objective of the
Company.
We look forward to discussing our full first
quarter results on our previously scheduled first quarter earnings
call on May 6th, at 11AM EDT. Please visit tcgbdc.com for more
information.
About TCG BDC, Inc. TCG BDC is
an externally managed specialty finance company focused on lending
to middle-market companies. TCG BDC is managed by Carlyle Global
Credit Investment Management L.L.C., an SEC-registered investment
adviser and a wholly owned subsidiary of The Carlyle Group Inc.
Since it commenced investment operations in May 2013 through
December 31, 2019, TCG BDC has invested approximately $5.6 billion
in aggregate principal amount of debt and equity investments prior
to any subsequent exits or repayments. TCG BDC’s investment
objective is to generate current income and capital appreciation
primarily through debt investments in U.S. middle market companies.
TCG BDC has elected to be regulated as a business development
company under the Investment Company Act of 1940, as amended.
Cautionary Statement Regarding
Forward-Looking Statements This press release may contain
forward-looking statements that involve substantial risks and
uncertainties, including the impact of COVID-19 on the business.
You can identify these statements by the use of forward-looking
terminology such as “anticipates,” “believes,” “expects,”
“intends,” “will,” “should,” “may,” “plans,” “continue,”
“believes,” “seeks,” “estimates,” “would,” “could,” “targets,”
“projects,” “outlook,” “potential,” “predicts” and variations of
these words and similar expressions to identify forward-looking
statements, although not all forward-looking statements include
these words. You should read statements that contain these words
carefully because they discuss our plans, strategies, prospects and
expectations concerning our business, operating results, financial
condition and other similar matters.
The estimates described in this press release
are subject to the completion of our financial closing procedures
and are not a comprehensive statement of our financial results for
the three months ended March 31, 2020. These estimates have
not been reviewed and approved by the Company’s Board of Directors
or its Audit Committee and were prepared by the Company’s
management in connection with preparation of its financial
statements. The final results may differ materially from these
estimates as a result of the completion of our financial closing
procedures, including review by the Company’s Board of Directors
and its Audit Committee, and final adjustments and other
developments arising between now and the time that our financial
results for the three months ended March 31, 2020 are
finalized.
We believe that it is important to communicate
our future expectations to our investors. There may be events in
the future, however, that we are not able to predict accurately or
control. You should not place undue reliance on these
forward-looking statements, which speak only as of the date on
which we make it. Factors or events that could cause our actual
results to differ, possibly materially from our expectations,
include, but are not limited to, the risks, uncertainties and other
factors we identify in the sections entitled “Risk Factors” and
“Cautionary Statement Regarding Forward-Looking Statements” in
filings we make with the Securities and Exchange Commission, and it
is not possible for us to predict or identify all of them. We
undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. Unless
otherwise stated, all figures and statistics contained herein are
as of December 31, 2019.
About The Carlyle GroupThe
Carlyle Group (NASDAQ: CG) is a global investment firm with deep
industry expertise that deploys private capital across four
business segments: Corporate Private Equity, Real Assets, Global
Credit and Investment Solutions. With $224 billion of assets under
management as of December 31, 2019, Carlyle’s purpose is to invest
wisely and create value on behalf of its investors, portfolio
companies and the communities in which we live and invest. The
Carlyle Group employs more than 1,775 people in 32 offices across
six continents. Further information is available at
www.carlyle.com. Follow The Carlyle Group on Twitter
@OneCarlyle
Contacts:
Investors: |
Media: |
Daniel Harris |
Brittany Berliner |
+1-212-813-4527 daniel.harris@carlyle.com |
+1-212-813-4839 Brittany.berliner@carlyle.com |
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