Net Increase in Net Assets of $0.38 Per
Share
Record Level of Investment Funding Capacity
Resulting from Successful Debt Raises
DECLARES SECOND QUARTER 2021 DISTRIBUTION OF
$0.36 PER SHARE
TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the
“Company,” “TPVG,” “we,” “us,” or “our”), the leading financing
provider to venture growth stage companies backed by a select group
of venture capital firms in technology and other high growth
industries, today announced its financial results for the first
quarter ended March 31, 2021 and the declaration by its Board of
Directors of its second quarter 2021 distribution of $0.36 per
share.
First Quarter 2021 Highlights
- Signed $192.2 million of term sheets with venture growth stage
companies at TriplePoint Capital LLC (“TPC”), and TPVG closed $90.4
million of new debt commitments to venture growth stage
companies;
- Funded $56.9 million in debt investments to seven portfolio
companies with a 12.6% weighted average annualized portfolio yield
at origination;
- Funded $2.3 million in direct equity investments in private
rounds of financing to four portfolio companies;
- Achieved a 13.3% weighted average annualized portfolio yield on
total debt investments for the quarter;
- Increased net asset value to $401.8 million, or $13.00 per
share, at March 31, 2021;
- Received $36.0 million of principal prepayments and $15.1
million of scheduled amortization and repayments;
- Earned net investment income of $8.9 million, or $0.29 per
share, and net increase in net assets of $11.9 million, or $0.38
per share;
- Increased revolving credit facility (“Credit Facility”)
capacity to $350 million from $325 million;
- Raised $200 million in aggregate principal amount from the
private issuance of 4.50% institutional notes due 2026 and used a
portion of the proceeds to redeem all of TPVG’s outstanding 5.75%
fixed-rate notes due 2022 (the “2022 Notes”) on April 5, 2021;
- TPVG portfolio companies Hims & Hers, Inc. (fka Hims, Inc.)
and View, Inc. closed their SPAC mergers and GROOP Internet
Platform, Inc. (d/b/a Talkspace) and Live Learning Technologies LLC
(fka Varsity Tutors LLC) announced plans to go public through SPAC
mergers;
- Ten portfolio companies raised in the aggregate over $700
million of capital in private rounds of financing during the
quarter;
- Realized a 9.0% return on average equity, based on net
investment income during the quarter;
- Ended the quarter with a 0.86x leverage ratio;
- Declared a second quarter distribution of $0.36 per share,
payable on June 30, 2021; bringing total declared distributions to
$10.78 per share since the Company’s initial public offering;
- Estimated undistributed taxable earnings from net investment
income and realized gains of $14.0 million, or $0.45 per share, as
of March 31, 2021; and
- Portfolio company exit and liquidity events subsequent to the
first quarter include: TPVG portfolio companies Sonder, Inc. and
Enjoy, Inc. announced plans to go public through SPAC mergers.
“The venture capital ecosystem demonstrated its resilience
during 2020 and is off to a robust start in 2021,” said Jim Labe,
chairman and chief executive officer of TPVG. “The strong
investment activity environment enhances the outlook and credit
quality of our existing portfolio companies in addition to driving
demand for debt financings from new companies, enabling us to
achieve our portfolio growth goals over the course of the
year.”
“During the first quarter, we executed on our playbook to
diversify our funding sources, lower our cost of capital, and
strengthen our funding capabilities,” said Sajal Srivastava,
president and chief investment officer of the Company. “Upsizing
our credit facility and completing our second investment grade
notes offering will enable us to meet the increasing demand from
venture growth stage companies and prudently grow our portfolio in
2021.”
PORTFOLIO AND INVESTMENT ACTIVITY
During the three months ended March 31, 2021, the Company
entered into $90.4 million of new debt commitments with seven
portfolio companies, funded debt investments totaling $56.9 million
to seven portfolio companies, acquired warrants valued at $1.6
million in 13 portfolio companies and made equity investments of
$2.3 million in four portfolio companies. Debt investments funded
during the quarter carried a weighted average annualized portfolio
yield of 12.6% at origination. During the quarter, the Company had
$36.0 million of principal prepayments and $15.1 million of
scheduled principal amortization. The weighted average annualized
portfolio yield on total debt investments for the first quarter was
13.3%. The Company calculates weighted average portfolio yield as
the annualized rate of the interest income recognized during the
period divided by the average amortized cost of debt investments in
the portfolio during the period.
As of March 31, 2021, the Company held debt investments in 33
portfolio companies, warrants in 67 portfolio companies and equity
investments in 27 portfolio companies. The total cost and fair
value of these investments were $643.7 million and $633.7 million,
respectively.
Total portfolio investment activity for the three months ended
March 31, 2021 and 2020 was as follows:
For the Three Months Ended
March 31,
(in thousands)
2021
2020
Beginning portfolio at fair value
$
633,779
$
653,129
New debt investments, net(a)
55,642
77,025
Scheduled principal amortization
(15,069
)
(5,813
)
Principal prepayments and early
repayments
(35,966
)
(1,000
)
Accretion of debt investment fees
1,119
3,782
Payment-in-kind coupon
1,981
852
New warrant investments
1,621
1,074
New equity investments
2,643
1,420
Proceeds from dispositions of
investments
(15,000
)
-
Net realized gains (losses) on
investments
(15,703
)
(289
)
Net unrealized gains (losses) on
investments
18,649
(17,025
)
Ending portfolio at fair value
$
633,696
$
713,155
_____________
(a) Debt balance is net of fees and
discounts applied to the loan at origination.
SIGNED TERM SHEETS
During the three months ended March 31, 2021, TPC entered into
$192.2 million of non-binding term sheets to venture growth stage
companies. These opportunities are subject to underwriting
conditions including, but not limited to, the completion of due
diligence, negotiation of definitive documentation and investment
committee approval, as well as compliance with TPC’s allocation
policy. Accordingly, there is no assurance that any or all of these
transactions will be completed or assigned to the Company.
UNFUNDED COMMITMENTS
As of March 31, 2021, the Company’s unfunded commitments totaled
$168.8 million, of which $35.3 million was dependent upon portfolio
companies reaching certain milestones. Of the $168.8 million of
unfunded commitments, $121.8 million will expire during 2021 and
$47.0 million will expire in or after 2022, if not drawn prior to
expiration. Since these commitments may expire without being drawn,
unfunded commitments do not necessarily represent future cash
requirements or future earning assets for the Company.
RESULTS OF OPERATIONS
Total investment and other income was $20.0 million for the
first quarter of 2021, representing a weighted average annualized
portfolio yield of 13.3% on total debt investments, as compared to
$20.8 million and 12.7% for the first quarter of 2020. The decrease
in investment income was primarily due to lower weighted average
principal outstanding on our income-bearing debt investment
portfolio, partially offset by greater prepayment activity.
Operating expenses for the first quarter of 2021 were $11.1
million as compared to $8.6 million for the first quarter of 2020.
Operating expenses for the first quarter of 2021 consisted of $4.4
million of interest expense and amortization of fees, $2.9 million
of base management fees, $2.2 million of income incentive fees,
$0.5 million of administration agreement expenses and $1.0 million
of general and administrative expenses. Operating expenses for the
first quarter of 2020 consisted of $4.2 million of interest expense
and amortization of fees, $2.8 million of base management fees,
$0.7 million of administration agreement expenses and $1.0 million
of general and administrative expenses.
For the first quarter of 2021, the Company recorded net
investment income of $8.9 million, or $0.29 per share, as compared
to $12.2 million, or $0.41 per share, for the first quarter of
2020. The decrease between periods was driven primarily by the
impact of the total return provision under the income component of
the Company’s incentive fee structure during the first quarter of
2020, lower investment and other income and an increase in
operating expenses.
During the first quarter of 2021, the Company recorded $15.7
million, or $0.51 per share, of net realized losses on investments
consisting primarily of the sale of the Company’s investment in
Knotel, Inc., which was rated Red (5) on the Company’s credit watch
list, and its removal from the Company’s investment portfolio.
During the first quarter of 2020, the Company recorded net realized
losses on investments of $0.3 million, or $0.01 per share.
Net unrealized gains on investments for the first quarter of
2021 were $18.6 million, or $0.60 per share, resulting primarily
from the reversal and recognition of $15.6 million of previously
recorded unrealized losses associated with Knotel, Inc., as well as
net unrealized gains on the Company’s investment portfolio
resulting from fair value adjustments, partially offset by $1.4
million of unrealized losses due to changes in foreign currency.
Net unrealized losses on investments for the first quarter of 2020
were $17.0 million, or $0.57 per share, resulting primarily from
mark-to-market related changes, as well as credit-related
adjustments.
The Company’s net increase in net assets resulting from
operations for the first quarter of 2021 was $11.9 million, or
$0.38 per share, as compared to a net decrease in net assets
resulting from operations of $5.1 million, or $0.17 per share, for
the first quarter of 2020.
CREDIT QUALITY
The Company maintains a credit watch list with portfolio
companies placed into one of five categories, with Clear, or 1,
being the highest rating and Red, or 5, being the lowest.
Generally, all new loans receive an initial grade of White, or 2,
unless the portfolio company’s credit quality meets the
characteristics of another risk category.
As of March 31, 2021, the weighted average investment ranking of
the Company’s debt investment portfolio was 2.11, as compared to
2.13 at the end of the prior quarter. During the quarter ended
March 31, 2021, portfolio company credit category changes,
excluding fundings and repayments, consisted of the following: one
portfolio company with a principal balance of $25.0 million was
removed from Clear (1) due to prepayment, and one portfolio company
investment with a principal balance of $29.5 million was sold and
removed from Red (5) and from the Company’s investment
portfolio.
The following table shows the credit rankings for the Company’s
debt investments at fair value as of March 31, 2021 and December
31, 2020:
March 31, 2021
December 31, 2020
Credit Category (dollars in
thousands)
Fair Value
Percentage of Total Debt
Investments
Number of Portfolio
Companies
Fair Value
Percentage of Total Debt
Investments
Number of Portfolio
Companies
Clear (1)
$
44,607
7.8
%
3
$
74,276
12.7
%
5
White (2)
442,224
77.0
27
413,193
70.8
24
Yellow (3)
65,342
11.4
2
59,489
10.2
2
Orange (4)
21,958
3.8
1
21,377
3.7
1
Red (5)
-
-
-
15,000
2.6
1
$
574,131
100.0
%
33
$
583,335
100.0
%
33
NET ASSET VALUE
As of March 31, 2021, the Company’s net assets were $401.8
million, or $13.00 per share, as compared to $400.4 million, or
$12.97 per share, as of December 31, 2020.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2021, the Company had total liquidity of $466.1
million, consisting of cash and restricted cash of $116.1 million
and available capacity under its Credit Facility of $350.0 million
(which excludes an additional $50.0 million available under the
Credit Facility’s accordion feature), subject to existing advance
rates, terms and covenants. The Company ended the quarter with a
0.86x leverage ratio, or an asset coverage ratio of 217%.
On January 29, 2021, TPVG increased the capacity of the Credit
Facility to $350 million from $325 million and added a new lender.
The $25 million increase was made under the accordion feature in
the Credit Facility, which allows the Company, under certain
circumstances, to increase the size of the Credit Facility to up to
$400 million.
In March 2021, the Company completed a private offering of $200
million in aggregate principal amount of 4.50% notes due March 2026
(the “2026 Notes”). The 2026 Notes are unsecured and bear an
interest rate of 4.50% per year, payable semiannually, will mature
on March 1, 2026, and may be redeemed in whole or in part at any
time or from time to time at the Company’s option at par plus
accrued interest to the prepayment date and, if applicable, a
premium. The 2026 Notes represent the Company’s second
institutional notes offering after receiving its investment-grade
credit rating.
DISTRIBUTION
On April 29, 2021, the Company’s board of directors declared a
quarterly distribution of $0.36 per share for the second quarter of
2021, payable on June 30, 2021 to stockholders of record as of June
16, 2021. As of March 31, 2021, the Company had estimated spillover
income of $14.0 million, or $0.45 per share.
SUBSEQUENT EVENTS
Since March 31, 2021 and through May 4, 2021:
- The entire $74.75 million aggregate principal amount of 2022
Notes was redeemed in full;
- TPC’s direct originations platform entered into $67.0 million
of additional non-binding signed term sheets with venture growth
stage companies;
- The Company closed $52.0 million of additional debt
commitments;
- The Company funded $23.7 million in new investments; and
- The Company received $46.0 million of principal prepayments
generating more than $2.0 million of accelerated income.
CONFERENCE CALL
The Company will host a conference call at 5:00 p.m. Eastern
Time, today, May 5, 2021, to discuss its financial results for the
quarter ended March 31, 2021. To listen to the call, investors and
analysts should dial 1 (844) 826-3038 (domestic) or 1 (412)
317-5184 (international) and ask to join the TriplePoint Venture
Growth BDC Corp. call. Please dial in at least five minutes before
the scheduled start time. A replay of the call will be available
through June 5, 2021, by dialing 1 (877) 344-7529 (domestic) or 1
(412) 317-0088 (international) and entering conference ID 10155077.
The conference call will also be available via a live audio webcast
in the investor relations section of the Company’s website,
http://www.tpvg.com. An online archive of the webcast will be
available on the Company’s website for 30 days after the call.
ABOUT TRIPLEPOINT VENTURE GROWTH BDC CORP.
TriplePoint Venture Growth BDC Corp. is an externally-managed
business development company focused on providing customized debt
financing with warrants and direct equity investments to venture
growth stage companies in technology and other high growth
industries backed by a select group of venture capital firms. The
Company’s sponsor, TriplePoint Capital, is a Sand Hill Road-based
global investment platform which provides customized debt
financing, leasing, direct equity investments and other
complementary solutions to venture capital-backed companies in
technology and other high growth industries at every stage of their
development with unparalleled levels of creativity, flexibility and
service. For more information about TriplePoint Venture Growth BDC
Corp., visit https://www.tpvg.com. For more information about the
TriplePoint Capital, visit https://www.triplepointcapital.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release constitute
forward-looking statements. Forward-looking statements are not
guarantees of future performance, condition or results and involve
a number of substantial risks and uncertainties, many of which are
difficult to predict and are generally beyond the Company’s
control. Words such as “anticipates,” “expects,” “intends,”
“plans,” “will,” “may,” “continue,” “believes,” “seeks,”
“estimates,” “would,” “could,” “should,” “targets,” “projects,” and
variations of these words and similar expressions are intended to
identify forward-looking statements. Actual events, performance,
condition or results, including the use of proceeds from the
offering of the Company’s 4.50% institutional notes due 2026, may
differ materially from those in the forward-looking statements as a
result of a number of factors, including as a result of changes in
economic, market or other conditions, the impact of the COVID-19
pandemic and its effects on the Company’s and its portfolio
companies’ results of operations and financial condition, and those
factors described from time to time in the Company’s filings with
the Securities and Exchange Commission. More information on these
risks and other potential factors that could affect actual events
and the Company’s performance and financial results, including
important factors that could cause actual results to differ
materially from plans, estimates or expectations included herein or
discussed on the webcast/conference call, is or will be included in
the Company’s filings with the Securities and Exchange Commission,
including in the “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” sections
of the Company’s Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management’s
opinions only as of the date hereof. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by law.
TriplePoint Venture Growth BDC
Corp.
Consolidated Statements of
Assets and Liabilities
(in thousands, except per share
data)
March 31, 2021
December 31, 2020
Assets
(unaudited)
Investments at fair value (amortized cost
of $643,690 and $662,423, respectively)
$
633,696
$
633,779
Cash and cash equivalents
114,964
38,219
Restricted cash
1,135
6,458
Deferred credit facility costs
2,886
3,152
Prepaid expenses and other assets
2,467
1,901
Total assets
$
755,148
$
683,509
Liabilities
Revolving Credit Facility
$
-
$
118,000
2022 Notes, net
74,092
73,964
2025 Notes, net
69,198
69,148
2026 Notes, net
197,901
-
Other accrued expenses and liabilities
12,157
21,962
Total liabilities
$
353,348
$
283,074
Net assets
Preferred stock, par value $0.01 per share
(50,000 shares authorized; no shares issued and outstanding,
respectively)
$
-
$
-
Common stock, par value $0.01 per
share
309
309
Paid-in capital in excess of par value
413,138
412,514
Total distributable earnings (loss)
(11,647)
(12,388)
Total net assets
$
401,800
$
400,435
Total liabilities and net
assets
$
755,148
$
683,509
Shares of common stock outstanding (par
value $0.01 per share and 450,000 authorized)
30,917
30,871
Net asset value per share
$
13.00
$
12.97
TriplePoint Venture Growth BDC
Corp.
Consolidated Statements of
Operations
(in thousands, except per share data)
For the Three Months Ended
March 31,
2021
2020
(unaudited)
(unaudited)
Investment income
Interest income from investments
$
19,191
$
20,274
Other income
783
567
Total investment and other
income
$
19,974
$
20,841
Operating expenses
Base management fee
$
2,924
$
2,774
Income incentive fee
2,227
-
Interest expense and amortization of
fees
4,351
4,162
Administration agreement expenses
519
681
General and administrative expenses
1,046
987
Total operating expenses
$
11,067
$
8,604
Net investment income
$
8,907
$
12,237
Net realized and unrealized gains
(losses)
Net realized gains (losses) on
investments
$
(15,697
)
$
(330
)
Net change in unrealized gains (losses) on
investments
18,649
(17,025
)
Net realized and unrealized gains
(losses)
$
2,952
$
(17,355
)
Net increase (decrease) in net assets
resulting from operations
$
11,859
$
(5,118
)
Basic and diluted net investment income
per share
$
0.29
$
0.41
Basic and diluted net increase (decrease)
in net assets per share
$
0.38
$
(0.17
)
Basic and diluted weighted average shares
of common stock outstanding
30,881
29,883
Total basic and diluted distributions
declared per share
$
0.36
$
0.36
Weighted Average Portfolio
Yield on Total Debt Investments
Ratios
For the Three Months Ended
March 31,
(Percentages, on an annualized
basis)(1)
2021
2020
Weighted average portfolio yield on total
debt investments(2)
13.3
%
12.7
%
Coupon income
9.7
%
9.8
%
Accretion of discount
0.9
%
1.2
%
Accretion of end-of-term payments
1.3
%
1.7
%
Impact of prepayments during the
period
1.4
%
-
%
_____________
(1)
Weighted average portfolio yields on total
debt investments for periods shown are the annualized rates of
interest income recognized during the period divided by the average
amortized cost of debt investments in the portfolio during the
period.
(2)
The weighted average portfolio yields on
total debt investments reflected above do not represent actual
investment returns to the Company’s stockholders.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210505006084/en/
INVESTOR RELATIONS AND MEDIA CONTACT The IGB Group Leon
Berman 212-477-8438 lberman@igbir.com
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