BlackRock TCP Capital Corp. (“we,” “us,” “our,” “TCPC” or the
“Company”), a business development company (NASDAQ: TCPC), today
announced its financial results for the first quarter ended March
31, 2023 and filed its Form 10-Q with the U.S. Securities and
Exchange Commission.
FINANCIAL HIGHLIGHTS
- Net investment income for the quarter ended March 31, 2023 was
$25.4 million, or $0.44 per share on a diluted basis, which
exceeded the dividend of $0.32 per share paid on March 31,
2023.
- Net asset value per share was $13.00 at March 31, 2023 compared
to $12.93 at December 31, 2022, an increase of 0.5%.
- Net increase in net assets from operations for the quarter
ended March 31, 2023 was $22.7 million, or $0.39 per share. Net
decrease in net assets from operations for the quarter ended
December 31, 2022 was $47.8 million, or $0.83 per share. The
increase in net assets from operations during the quarter ended
March 31, 2023, was primarily from the increase in investment
income driven by the rise in LIBOR/SOFR rates.
- Total acquisitions during the quarter ended March 31, 2023 were
$76.0 million and total dispositions were $19.3 million.
- As of March 31, 2023, the credit quality of the portfolio
remained strong with debt investments in just two portfolio
companies on non-accrual status, representing 0.3% of the portfolio
at fair value and 0.5% at cost.
- Fitch reaffirmed the Company’s investment-grade rating with
stable outlook during the first quarter.
- On May 4, 2023, our board of directors declared a second
quarter dividend of $0.34 per share, a 6.3% increase from the prior
quarter. The dividend is payable on June 30, 2023 to stockholders
of record as of the close of business on June 16, 2023.
“We again identified a range of compelling investment
opportunities in the first quarter, capitalizing on the vast
resources of the BlackRock platform and our team’s proven expertise
across credit cycles to drive solid results,” said Rajneesh Vig,
BlackRock TCP Capital Corp. Chairman and CEO. “We generated strong
net investment income, with higher base rates and wider spreads
bolstering our predominantly floating rate portfolio’s
profitability. Following the recent disruption in the banking
sector, we expect the investment environment to remain favorable
for established direct lenders, though we will continue to be
highly disciplined as we selectively take advantage of this more
lender friendly but volatile market.”
“Given the strength of our portfolio and the durability of our
earnings, our Board today announced a second quarter dividend of
$0.34 per share, an increase of 6% from the current level,” Vig
added. “We believe this reflects the consistency of our dividend
coverage as well as our commitment to attractive and sustainable
risk-adjusted returns for our shareholders.”
PORTFOLIO AND INVESTMENT ACTIVITY
As of March 31, 2023, our investment portfolio consisted of debt
and equity positions in 143 portfolio companies with a total fair
value of approximately $1.7 billion, 88.3% of which was senior
secured debt. 76.0% of the total portfolio was first lien. Equity
positions, which include equity interests in diversified portfolios
of debt and lease assets, represented approximately 11.7% of the
portfolio. 93.8% of our debt investments were floating rate, 92.9%
of which had interest rate floors.
As of March 31, 2023, the weighted average annual effective
yield of our debt portfolio was approximately 13.1%(1) and the
weighted average annual effective yield of our total portfolio was
approximately 12.3%, compared with 12.7% and 11.9%, respectively,
as of December 31, 2022. Debt investments in two portfolio
companies were on non-accrual status as of March 31, 2023,
representing 0.3% of the portfolio at fair value and 0.5% at
cost.
During the three months ended March 31, 2023, we invested
approximately $76.0 million, primarily in 10 investments, comprised
of 8 new and 2 existing portfolio companies. Of these investments,
$75.1 million, or 98.8% of total acquisitions, was in senior
secured loans, and $0.9 million, or 1.2% of total acquisitions, was
comprised primarily of equity investments. Additionally, we
received approximately $19.3 million in proceeds from sales or
repayments of investments during the three months ended March 31,
2023. New investments during the quarter had a weighted average
effective yield of 13.3%. Investments we exited had a weighted
average effective yield of 13.1%. We expect to continue to invest
in senior secured loans, bonds and subordinated debt, as well as
select equity investments, to obtain a high level of current
income, with an emphasis on principal protection.
As of March 31, 2023, total assets were $1.8 billion, net assets
were $751.0 million and net asset value per share was $13.00, as
compared to $1.7 billion, $746.8 million, and $12.93 per share,
respectively, as of December 31, 2022.
CONSOLIDATED RESULTS OF OPERATIONS
Total investment income for the three months ended March 31,
2023 was approximately $50.3 million, or $0.87 per share.
Investment income for the three months ended March 31, 2023
included $0.01 per share from prepayment premiums and related
accelerated original issue discount and exit fee amortization,
$0.04 per share from recurring original issue discount and exit fee
amortization, $0.03 per share from interest income paid in kind,
$0.02 per share in dividend income and $0.01 per share of other
income. This reflects our policy of recording interest income,
adjusted for amortization of premiums and discounts, on an accrual
basis. Origination, structuring, closing, commitment, and similar
upfront fees received in connection with the outlay of capital are
generally amortized into interest income over the life of the
respective debt investment.
Total operating expenses for the three months ended March 31,
2023 were approximately $24.9 million, or $0.43 per share,
including interest and other debt expenses of $11.5 million, or
$0.20 per share, and incentive compensation from net investment
income of $5.4 million, or $0.09 per share. Excluding incentive
compensation, interest and other debt expenses, annualized first
quarter expenses were 4.3% of average net assets.
Net investment income for the three months ended March 31, 2023
was approximately $25.4 million, or $0.44 per share. Net realized
losses for the three months ended March 31, 2023 were $30.6
million, or $0.53 per share. Net unrealized gains for the three
months ended March 31, 2023 were $28.0 million, or $0.48 per share.
Net realized losses for the three months ended March 31, 2023 was
comprised primarily of a $30.7 million loss from the reorganization
of our investment in Autoalert. Net unrealized gains for the three
months ended March 31, 2023 were primarily driven by a $36.2
million reversal of previously recognized unrealized losses from
the reorganization of our investment in Autoalert, partially offset
by a $3.2 million unrealized loss on our investment in Astra
Acquisition and a $2.9 million unrealized loss in Aventiv. Net
increase in net assets resulting from operations for the three
months ended March 31, 2023 was $22.7 million, or $0.39 per
share.
__________________________
(1) Weighted average annual effective yield includes
amortization of deferred debt origination and end-of-term fees 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 any debt investments
that are distressed or on non-accrual status.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2023, available liquidity was approximately
$306.8 million, comprised of approximately $208.0 million in
available capacity under our leverage program and $98.8 million in
cash and cash equivalents.
The combined weighted-average interest rate on debt outstanding
at March 31, 2023 was 4.19%.
Total debt outstanding at March 31, 2023 was as follows:
Maturity
Rate
Carrying Value (1)
Available
Total Capacity
Operating Facility
2026
L+1.75%
(2)
$
202,033,121
$
97,966,879
$
300,000,000
(3)
Funding Facility II
2025
SOFR+2.00%
(4)
100,000,000
100,000,000
200,000,000
(5)
SBA Debentures
2024−2031
2.52%
(6)
150,000,000
10,000,000
160,000,000
2024 Notes ($250 million par)
2024
3.900%
249,144,733
—
249,144,733
2026 Notes ($325 million par)
2026
2.850%
326,079,582
—
326,079,582
Total leverage
1,027,257,436
$
207,966,879
$
1,235,224,315
Unamortized issuance costs
(4,636,951
)
Debt, net of unamortized issuance
costs
$
1,022,620,485
_____________________
(1)
Except for the 2024 Notes and the
2026 Notes, all carrying values are the same as the principal
amounts outstanding.
(2)
As of March 31, 2023, $8.0
million of the outstanding amount bore interest at a rate of
EURIBOR + 2.00% and $2.0 million of the outstanding amount bore
interest at a rate of Prime + 1.00%.
(3)
Operating Facility includes a
$100.0 million accordion which allows for expansion of the facility
to up to $400.0 million subject to consent from the lender and
other customary conditions.
(4)
Subject to certain funding
requirements and a SOFR credit adjustment of 0.15%.
(5)
Funding Facility II includes a
$50.0 million accordion which allows for expansion of the facility
to up to $250.0 million subject to consent from the lender and
other customary conditions.
(6)
Weighted-average interest rate,
excluding fees of 0.35% or 0.36%.
On April 25, 2023, our board of directors re-approved our stock
repurchase plan to acquire up to $50.0 million in the aggregate of
our common stock at prices at certain thresholds below our net
asset value per share, in accordance with the guidelines specified
in Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of
1934. During the three months and quarter ended March 31, 2023, no
shares were repurchased.
RECENT DEVELOPMENTS
On May 4, 2023, our board of directors declared a second quarter
dividend of $0.34 per share payable on June 30, 2023 to
stockholders of record as of the close of business on June 16,
2023.
CONFERENCE CALL AND WEBCAST
BlackRock TCP Capital Corp. will host a conference call on
Thursday, May 4, 2023 at 1:00 p.m. Eastern Time (10:00 a.m. Pacific
Time) to discuss its financial results. All interested parties are
invited to participate in the conference call by dialing (833)
470-1428; international callers should dial (404) 975-4839. All
participants should reference the access code 208703. For a slide
presentation that we intend to refer to on the earnings conference
call, please visit the Investor Relations section of our website
(www.tcpcapital.com) and click on the First Quarter 2023 Investor
Presentation under Events and Presentations. The conference call
will be webcast simultaneously in the investor relations section of
our website at http://investors.tcpcapital.com/. An archived replay
of the call will be available approximately two hours after the
live call, through May 14, 2023. For the replay, please visit
https://investors.tcpcapital.com/events-and-presentations or dial
(866) 813-9403. For international replay, please dial (929)
458-6194. For all replays, please reference access code 410965.
BlackRock TCP Capital
Corp.
Consolidated Statements of
Assets and Liabilities
March 31, 2023
December 31, 2022
(unaudited)
Assets
Investments, at fair value:
Non-controlled, non-affiliated investments
(cost of $1,468,095,636 and $1,474,146,428, respectively)
$
1,428,375,351
$
1,402,764,659
Non-controlled, affiliated investments
(cost of $37,281,788 and $37,132,993 , respectively)
67,596,688
69,089,697
Controlled investments (cost of
$192,400,017 and $158,500,500, respectively)
169,758,063
137,733,285
Total investments (cost of $1,697,777,441
and $1,669,779,921, respectively)
1,665,730,102
1,609,587,641
Cash and cash equivalents
98,788,656
82,435,171
Interest, dividends and fees
receivable
22,389,088
20,903,797
Deferred debt issuance costs
3,303,908
3,597,236
Prepaid expenses and other assets
2,587,702
2,826,004
Total assets
1,792,799,456
1,719,349,849
Liabilities
Debt (net of deferred issuance costs of
$4,636,951 and $5,056,427, respectively)
1,022,620,485
944,005,814
Management fees payable
5,610,722
6,084,202
Incentive fees payable
5,389,696
4,883,575
Interest and debt related payables
4,041,550
9,260,738
Reimbursements due to the Advisor
2,439,304
1,498,733
Distributions payable
—
2,888,363
Payable for investments purchased
—
1,937,465
Accrued expenses and other liabilities
1,715,554
2,037,169
Total liabilities
1,041,817,311
972,596,059
Net assets
$
750,982,145
$
746,753,790
Composition of net assets applicable to
common shareholders
Common stock, $0.001 par value;
200,000,000 shares authorized, 57,767,264 and 57,767,264 shares
issued and outstanding as of March 31, 2023 and December 31, 2022,
respectively
$
57,767
$
57,767
Paid-in capital in excess of par
967,890,570
967,890,570
Distributable earnings (loss)
(216,966,192
)
(221,194,547
)
Total net assets
750,982,145
746,753,790
Total liabilities and net assets
$
1,792,799,456
$
1,719,349,849
Net assets per share
$
13.00
$
12.93
BlackRock TCP Capital
Corp.
Consolidated Statements of
Operations
Three Months Ended March
31,
2023
2022
Investment income
Interest income (excluding PIK):
Non-controlled, non-affiliated
investments
$
45,153,147
$
37,427,955
Non-controlled, affiliated investments
45,536
33,108
Controlled investments
2,209,052
1,912,504
PIK income:
Non-controlled, non-affiliated
investments
1,584,834
1,080,205
Dividend income:
Non-controlled, non-affiliated
investments
302,743
261,229
Non-controlled, affiliated investments
634,124
563,404
Controlled investments
—
713,825
Other income:
Non-controlled, non-affiliated
investments
333,264
152,477
Non-controlled, affiliated investments
45,650
6,202
Total investment income
50,308,350
42,150,909
Operating expenses
Interest and other debt expenses
11,549,171
9,345,204
Management fees
5,877,539
6,667,727
Incentive fees
5,389,696
4,190,230
Professional fees
454,350
570,395
Administrative expenses
376,544
477,059
Director fees
351,000
223,000
Insurance expense
154,003
181,061
Custody fees
90,586
83,929
Other operating expenses
656,894
658,364
Total operating expenses
24,899,783
22,396,969
Net investment income before
taxes
25,408,567
19,753,940
Excise tax expense
35,440
—
Net investment income
25,373,127
19,753,940
Realized and unrealized gain (loss) on
investments and foreign currency
Net realized gain (loss):
Non-controlled, non-affiliated
investments
(30,629,704
)
46,267
Controlled investments
—
(124,801
)
Net realized gain (loss)
(30,629,704
)
(78,534
)
Net change in unrealized appreciation
(depreciation):
Non-controlled, non-affiliated
investments
31,972,322
(9,579,291
)
Non-controlled, affiliated investments
(2,127,127
)
(2,839,577
)
Controlled investments
(1,874,739
)
5,192,422
Net change in unrealized appreciation
(depreciation)
27,970,456
(7,226,446
)
Net realized and unrealized gain
(loss)
(2,659,248
)
(7,304,980
)
Net increase (decrease) in net assets
resulting from operations
$
22,713,879
$
12,448,960
Basic and diluted earnings (loss) per
share
$
0.39
$
0.22
Basic and diluted weighted average
common shares outstanding
57,767,264
57,767,264
ABOUT BLACKROCK TCP CAPITAL CORP.
BlackRock TCP Capital Corp. (NASDAQ: TCPC) is a specialty
finance company focused on direct lending to middle-market
companies as well as small businesses. TCPC lends primarily to
companies with established market positions, strong regional or
national operations, differentiated products and services and
sustainable competitive advantages, investing across industries in
which it has significant knowledge and expertise. TCPC’s investment
objective is to achieve high total returns through current income
and capital appreciation, with an emphasis on principal protection.
TCPC is a publicly-traded business development company, or BDC,
regulated under the Investment Company Act of 1940 and is
externally managed by its advisor, a wholly-owned, indirect
subsidiary of BlackRock, Inc. For more information, visit
www.tcpcapital.com.
FORWARD-LOOKING STATEMENTS
Prospective investors considering an investment in BlackRock TCP
Capital Corp. should consider the investment objectives, risks and
expenses of the company carefully before investing. This
information and other information about the company are available
in the company’s filings with the Securities and Exchange
Commission (“SEC”). Copies are available on the SEC’s website at
www.sec.gov and the company’s website at www.tcpcapital.com.
Prospective investors should read these materials carefully before
investing.
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 December 31,
2022, and the company’s subsequent periodic filings with the SEC.
Copies are available on the SEC’s website at www.sec.gov and the
company’s website at www.tcpcapital.com. Forward-looking statements
are made as of the date of this press release and are subject to
change without notice. The company has no duty and does not
undertake any obligation to update or revise any forward-looking
statements based on the occurrence of future events, the receipt of
new information, or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005476/en/
BlackRock TCP Capital Corp. Katie McGlynn 310-566-1094
investor.relations@tcpcapital.com
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