In This Article:
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GAAP Net Investment Income: $0.39 per share.
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Core Net Investment Income: $0.40 per share, excluding estimated excise taxes.
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Net Asset Value per Share: Increased by $0.19 during the quarter.
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Investment Portfolio at Fair Value: $908.7 million across 99 portfolio companies.
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New Investments: $9.4 million in one new portfolio company.
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Repayments: $8.4 million full repayment and $5.5 million other repayments at par.
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Equity Realization Proceeds: $2.6 million with a realized gain of $2.2 million.
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Non-Accrual Loans: Loans to six portfolio companies, comprising 4.7% of the fair value of the total loan portfolio.
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Dividend for Fourth Quarter: $0.40 per quarter, payable monthly.
Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Stellus Capital Investment Corp (NYSE:SCM) reported a net asset value per share increase of $0.19 during the quarter due to net unrealized appreciation on its investment portfolio.
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The company has paid over $273 million in dividends to investors since its IPO, representing $16.28 per share for initial investors.
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Stellus Capital Investment Corp (NYSE:SCM) successfully issued $14.6 million in shares through its ATM program at an average gross price above net asset value.
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The investment portfolio at fair value increased to $908.7 million across 99 portfolio companies, up from $899.7 million across 100 companies in the previous quarter.
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The company increased its bank facility by $55 million, enhancing its capacity to grow the portfolio to over a billion dollars.
Negative Points
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Net investment income was slightly below expectations and the dividend for the quarter, attributed to lower investment activity and a slight increase in non-accrual loans.
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The company experienced a decline in base rates, which impacted the yield and net investment income.
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There are currently loans to six portfolio companies that are non-accrual, comprising 4.7% of the fair value of the total loan portfolio.
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The portfolio size at the end of the third quarter was below the anticipated $930 million, ending closer to $900 million.
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The company noted a trend of spread compression in new opportunities, with spreads decreasing from the sixes to the fives, which could impact future yields.
Q & A Highlights
Q: With NII slightly below expectations and the dividend this quarter, were there any temporary factors affecting this? A: Robert Ladd, CEO: There was nothing unusual. We had a lower SOFR rate and a slight increase in non-accruals. Last quarter had more other income, which made it higher. Investment activity was lighter than expected, but we anticipate it will pick up in the fourth quarter.