Achieves New Record for Portfolio Fair Value of
$983 Million
DECLARES SECOND QUARTER 2023 DISTRIBUTION OF
$0.40 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, 2023 and the declaration by its Board of
Directors of its second quarter 2023 distribution of $0.40 per
share.
First Quarter 2023 Highlights
- Signed $198.8 million of term sheets with venture growth stage
companies at TriplePoint Capital LLC (“TPC”) and TPVG closed $3.7
million of new debt commitments to venture growth stage
companies;
- Funded $57.6 million in debt investments to 11 portfolio
companies with a 14.1%1 weighted average annualized yield at
origination;
- Achieved a 14.7% weighted average annualized portfolio yield on
total debt investments for the quarter;
- Earned net investment income of $18.6 million, or $0.53 per
share;
- Generated total investment income of $33.6 million;
- Realized 17.8% return on average equity, based on net
investment income during the quarter;
- Seven portfolio companies raised an aggregate $63.9 million of
capital in private financings during the quarter;
- Held debt investments in 59 portfolio companies, warrants in
107 portfolio companies and equity investments in 48 portfolio
companies as of March 31, 2023;
- Debt investment portfolio weighted average investment ranking
of 2.12 as of quarter’s end;
- Net asset value of $414.0 million, or $11.69 per share, as of
March 31, 2023;
- Ended the quarter with a 1.49x leverage ratio; and
- Declared a second quarter distribution of $0.40 per share,
payable on June 30, 2023; bringing total declared distributions to
$13.85 per share since the Company’s initial public offering.
“Despite the volatile market conditions and developments related
to the venture banking ecosystem during the first quarter, the
demand for our debt financing remains strong,” said Jim Labe,
chairman and chief executive officer of TPVG. “We maintained our
select approach of working with high quality venture growth
companies backed by our select VC partners to generate a strong
return on equity and deliver NII that once again exceeded our
distribution.”
“We believe the recent developments in the venture banking
ecosystem will have a long-term impact on the competitive landscape
of the venture lending industry,” said Sajal Srivastava, president
and chief investment officer of the Company. “We will continue to
draw on our differentiated platform and experienced team to
maintain the quality of our investment portfolio as well as
capitalize on these developments in a disciplined fashion over the
long-term to create sustainable shareholder value.”
PORTFOLIO AND INVESTMENT ACTIVITY
During the three months ended March 31, 2023, the Company
entered into $3.7 million of new debt commitments with one
portfolio company, funded debt investments totaling $57.6 million
to 11 portfolio companies, acquired warrants valued at $0.1 million
in three portfolio companies and made direct equity investments of
$0.1 million in one portfolio company. Debt investments funded
during the quarter carried a weighted average annualized portfolio
yield of 14.1% at origination1. During the quarter, the Company
received $3.4 million of early repayments and $16.6 million of
scheduled principal amortization. The weighted average annualized
portfolio yield on total debt investments for the first quarter was
14.7%. 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. The return on average equity for
the first quarter was 17.8%. The Company calculates return on
average equity as the annualized rate of net investment income
recognized during the period divided by the Company’s average net
asset value during the period.
As of March 31, 2023, the Company held debt investments in 59
portfolio companies, warrants in 107 portfolio companies and equity
investments in 48 portfolio companies. The total cost and fair
value of these investments were $1,003.9 million and $982.8
million, respectively.
_____________
1 This yield excludes the impact of $2.0
million in short-term loans that were funded and repaid during the
three months ended March 31, 2023, which carried a higher interest
rate than our normal course investments, and the impact thereof on
our weighted average adjusted annualized yield at origination for
the period.
Total portfolio investment activity for the three months ended
March 31, 2023 and 2022 was as follows:
For the Three Months Ended
March 31,
(in thousands)
2023
2022
Beginning portfolio at fair value
$
949,276
$
865,340
New debt investments, net(a)
56,374
61,459
Scheduled principal amortization
(16,591
)
(5,867
)
Principal prepayments and early
repayments
(3,400
)
(115,535
)
Net amortization and accretion of premiums
and discounts and end-of-term payments
5,318
1,934
Payment-in-kind coupon
2,085
1,583
New warrant investments
130
814
New equity investments
503
2,696
Proceeds from dispositions of
investments
—
(246
)
Net realized losses on investments
—
(994
)
Net change in unrealized gains (losses) on
investments
(10,867
)
(4,737
)
Ending portfolio at fair value
$
982,828
$
806,447
_____________
(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, 2023, TPC entered into
$198.8 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, 2023, the Company’s unfunded commitments totaled
$254.5 million, of which $72.9 million was dependent upon portfolio
companies reaching certain milestones. Of the $254.5 million of
unfunded commitments, $152.0 million will expire during 2023, $71.8
million will expire during 2024 and $30.7 million will expire
during 2025, 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 $33.6 million for the
first quarter of 2023, representing a weighted average annualized
portfolio yield of 14.7% on total debt investments, as compared to
$27.3 million and 15.5% for the first quarter of 2022. The increase
in total investment and other income was primarily due to a greater
weighted average principal amount outstanding on our income-bearing
debt investment portfolio and higher investment yields.
Operating expenses for the first quarter of 2023 were $15.1
million as compared to $13.8 million for the first quarter of 2022.
Operating expenses for the first quarter of 2023 consisted of $9.2
million of interest expense and amortization of fees, $4.3 million
of base management fees, $0.6 million of administration agreement
expenses and $1.0 million of general and administrative expenses.
Due to the total return requirement under the income component of
our incentive fee structure, our income incentive fees were reduced
by $3.7 million during the three months ended March 31, 2023.
Operating expenses for the first quarter of 2022 consisted of $5.1
million of interest expense and amortization of fees, $3.7 million
of base management fees, $3.4 million of income incentive fees,
$0.6 million of administration agreement expenses and $1.0 million
of general and administrative expenses.
For the first quarter of 2023, the Company recorded net
investment income of $18.6 million, or $0.53 per share, as compared
to $13.5 million, or $0.44 per share, for the first quarter of
2022. The increase in net investment income between periods was
driven primarily by greater investment and other income.
During the first quarter of 2023, the Company recognized net
realized losses on investments of $33,000, resulting from foreign
currency adjustments. During the first quarter of 2022, the Company
recognized net realized losses on investments of $3.1 million.
Net change in unrealized losses on investments for the first
quarter of 2023 was $10.9 million, consisting of $6.6 million of
net unrealized losses on the debt investment portfolio and $4.2
million of net unrealized losses on the warrant and equity
portfolio resulting from fair value adjustments. Net change in
unrealized losses on investments for the first quarter of 2022 was
$4.7 million. The Company’s net realized and unrealized losses were
$10.9 million for the three months ended March 31, 2023, compared
to net realized and unrealized losses of $7.8 million for the three
months ended March 31, 2022.
The Company’s net increase in net assets resulting from
operations for the first quarter of 2023 was $7.7 million, or $0.22
per share, as compared to a net increase in net assets resulting
from operations of $5.7 million, or $0.18 per share, for the first
quarter of 2022.
CREDIT QUALITY
The Company maintains a credit watch list with portfolio
companies placed into one of five credit 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 credit category.
As of March 31, 2023, the weighted average investment ranking of
the Company’s debt investment portfolio was 2.12, as compared to
2.06 at the end of the prior quarter. During the quarter ended
March 31, 2023, portfolio company credit category changes,
excluding fundings and repayments, consisted of the following: one
portfolio company with a principal balance of $15.0 million was
upgraded from White (2) to clear (1), four portfolio companies with
an aggregate principal balance of $46.3 million were downgraded
from White (2) to Yellow (3) and two portfolio companies with an
aggregate principal balance of $47.6 million were downgraded from
Yellow (3) to Orange (4).
The following table shows the credit categories for the
Company’s debt investments at fair value as of March 31, 2023 and
December 31, 2022:
March 31, 2023
December 31, 2022
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)
$
80,502
9.1
%
4
$
55,921
6.6
%
3
White (2)
667,513
75.0
45
699,008
81.9
48
Yellow (3)
96,362
10.8
7
88,912
10.4
5
Orange (4)
45,720
5.1
3
9,110
1.1
1
Red (5)
—
—
—
—
—
—
$
890,097
100.0
%
59
$
852,951
100.0
%
57
NET ASSET VALUE
As of March 31, 2023, the Company’s net assets were $414.0
million, or $11.69 per share, as compared to $419.9 million, or
$11.88 per share, as of December 31, 2022.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2023, the Company had total liquidity of $187.6
million, consisting of cash, cash equivalents and restricted cash
of $57.6 million and available capacity under its Revolving Credit
Facility of $130.0 million (which excludes an additional $50.0
million available under the Revolving Credit Facility’s accordion
feature), subject to existing advance rates, terms and covenants.
As of March 31, 2023, the Company held $4.4 million of publicly
traded stock and warrant positions. The Company ended the quarter
with a 1.49x leverage ratio, and an asset coverage ratio of
167%.
DISTRIBUTION
On April 26, 2023, the Company’s board of directors declared a
regular quarterly distribution of $0.40 per share for the second
quarter, payable on June 30, 2023 to stockholders of record as of
June 15, 2023. As of March 31, 2023, the Company had estimated
undistributed taxable earnings from net investment income of $27.2
million, or $0.77 per share.
RECENT DEVELOPMENTS
Since March 31, 2023 and through May 2, 2023:
- TPC’s direct originations platform entered into $27.0 million
of additional non-binding signed term sheets with venture growth
stage companies;
- The Company closed $6.4 million of additional debt
commitments;
- The Company funded $12.9 million in new investments; and
- Three portfolio companies (Hey Favor, Inc., Underground
Enterprises, Inc. and RenoRun Inc.) filed for bankruptcy
protection.
CONFERENCE CALL
The Company will host a conference call at 5:00 p.m. Eastern
Time, today, May 3, 2023, to discuss its financial results for the
quarter ended March 31, 2023. To listen to the call, investors and
analysts should dial (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 3, 2023, by dialing (877) 344-7529 (domestic) or +1
(412) 317-0088 (international) and entering conference ID 3967289.
The conference call also will be available via a live audio webcast
in the investor relations section of the Company’s website,
https://www.tpvg.com. An online archive of the webcast will be
available on the Company’s website for one year 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
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 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, and the impact of such changes 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, 2023
December 31, 2022
(unaudited)
Assets
Investments at fair value (amortized cost
of $1,003,826 and $959,407, respectively)
$
982,828
$
949,276
Cash and cash equivalents
57,293
51,489
Restricted cash
336
7,771
Deferred credit facility costs
3,774
4,128
Prepaid expenses and other assets
2,166
1,869
Total assets
$
1,046,397
$
1,014,533
Liabilities
Revolving Credit Facility
$
220,000
$
175,000
2025 Notes, net
69,588
69,543
2026 Notes, net
198,709
198,598
2027 Notes, net
123,908
123,839
Other accrued expenses and liabilities
20,238
27,613
Total liabilities
$
632,443
$
594,593
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
354
353
Paid-in capital in excess of par value
471,046
470,572
Total distributable earnings (loss)
(57,446
)
(50,985
)
Total net assets
$
413,954
$
419,940
Total liabilities and net
assets
$
1,046,397
$
1,014,533
Shares of common stock outstanding (par
value $0.01 per share and 450,000 authorized)
35,397
35,348
Net asset value per share
$
11.69
$
11.88
TriplePoint Venture Growth BDC
Corp.
Consolidated Statements of
Operations
(in thousands, except per share
data)
For the Three Months Ended
March 31,
2023
2022
(unaudited)
(unaudited)
Investment income
Interest income from investments
$
32,254
$
25,934
Other income
1,375
1,415
Total investment and other
income
$
33,629
$
27,349
Operating expenses
Base management fee
$
4,311
$
3,717
Income incentive fee
—
3,387
Interest expense and amortization of
fees
9,245
5,099
Administration agreement expenses
573
578
General and administrative expenses
921
1,021
Total operating expenses
$
15,050
$
13,802
Net investment income
$
18,579
$
13,547
Net realized and unrealized
gains/(losses)
Net realized gains (losses) on
investments
$
(33
)
$
(3,105
)
Net change in unrealized gains (losses) on
investments
(10,867
)
(4,737
)
Net realized and unrealized
gains/(losses)
$
(10,900
)
$
(7,842
)
Net increase (decrease) in net assets
resulting from operations
$
7,679
$
5,705
Per share information (basic and
diluted)
Net investment income per share
$
0.53
$
0.44
Net increase (decrease) in net assets per
share
$
0.22
$
0.18
Weighted average shares of common stock
outstanding
35,349
31,011
Total distributions declared per share
$
0.40
$
0.36
Weighted Average Portfolio
Yield
on Total Debt
Investments
Ratios
(Percentages, on an annualized
basis)(1)
For the Three Months Ended
March 31,
2023
2022
Weighted average portfolio yield on total
debt investments(2)
14.7 %
15.5 %
Coupon income
11.8 %
10.1 %
Accretion of discount
1.2 %
0.8 %
Accretion of end-of-term payments
1.7 %
1.8 %
Impact of prepayments during the
period
— %
2.8 %
_____________
(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.
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INVESTOR RELATIONS AND MEDIA CONTACT The IGB Group Leon
Berman 212-477-8438 lberman@igbir.com
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