In This Article:
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Adjusted Net Investment Income: $0.38 per share.
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Annualized Net Investment Income Return on Average Equity: Approximately 14%.
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Third Quarter Dividend: $0.34 per share, with a coverage of 112% based on Q2 adjusted NII.
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Net Asset Value (NAV) Decline: 8.4% in the second quarter.
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Non-Accrual Status: Increased from 1.7% to 4.9% of fair value.
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Net Realized Losses: $35 million for the quarter.
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Net Unrealized Losses: $52 million, primarily due to specific companies.
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Weighted Average Internal Risk Rating: 1.5 as of June 30, 2024.
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Capital Raised: $325 million of fixed rate unsecured debt at 6.95% in May 2024.
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Investments in Q2: $130 million, with $124 million in senior secured loans.
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Weighted Average Annual Effective Yield: 12.4% for the portfolio.
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Gross Investment Income: $0.84 per share.
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Operating Expenses: $0.42 per share.
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Available Liquidity: $780 million, including $585 million in available capacity and $195 million in cash.
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Net Leverage: 1.13 times, within the target range of 0.9 to 1.20 times.
Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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BlackRock TCP Capital Corp (NASDAQ:TCPC) delivered an adjusted net investment income of $0.38 per share, with an annualized net investment income return on average equity of approximately 14%, which is at the high end of their historical ranges.
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The Board of Directors declared a third quarter dividend of $0.34 per share, implying a dividend coverage of 112% based on second quarter adjusted NII.
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TCPC successfully raised $325 million of fixed-rate unsecured debt at an attractive rate of 6.95% in May 2024, enhancing their capital position.
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The company invested $130 million in the second quarter, with a significant portion in senior secured loans, reflecting a 40% increase in deployment activity compared to the previous year.
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TCPC's portfolio remains diversified, with 91% of investments in senior secured loans and 93% of debt investments in floating rate loans, providing stability and income potential in a rising rate environment.
Negative Points
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Net asset value (NAV) declined by 8.4% during the second quarter, with six portfolio companies added to non-accrual status, increasing non-accruals from 1.7% to 4.9% of fair value.
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Net realized losses for the quarter were $35 million, primarily due to the restructuring of investments in Thras.io and Hylan.
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Net unrealized losses totaled $52 million, driven by markdowns on investments in companies like SellerX, Pluralsight, and Lithium.
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The weighted average annual effective yield of the portfolio decreased to 12.4% from 13.4% in the previous quarter, indicating some yield compression.
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The increase in non-accruals negatively impacted earnings per share by approximately $0.08, reflecting ongoing challenges in certain portfolio segments.