The following is a summary of the BlackRock TCP Capital Corp (TCPC) Q3 2024 Earnings Call Transcript:
Financial Performance:
TCPC reported adjusted net income of $0.36 per share for Q3 2024.
Annualized net investment income return on average equity was approximately 14%.
Board of Directors declared a Q4 regular dividend of $0.34 per share and a special dividend of $0.10 per share, payable on December 31, 2024.Net leverage at the end of the quarter was 1.08 times, maintaining a stable liquidity position.
Despite challenges, net unrealized gains totaled $19.2 million for the quarter.
Business Progress:
Leadership transition with Phil Tseng to succeed as CEO and Chairman following Raj Vig's resignation.
Ongoing adjustments, including removing Pluralsight from non-accrual status and placing Razor Group's preferred equity on non-accrual.
Active management in response to portfolio companies under-performing or restructuring.
Investment of $73 million during Q3 in six new and three existing portfolio companies, with a focus on first lien loans and senior secured positions.
Opportunities:
Continued focus on maintaining dividend payouts supported by consistent coverage with recurring net investment income.
Potential benefits from expected market conditions conducive to increased M&A and refinancing activity, as discussed post recent Fed rate cuts.
Risks:
One additional non-accrual loan and markdowns in investments such as Gordon Brothers Finance Company, SellerX, and InMoment led to a slight reduction in NAV by 0.9%.
Non-accruals remain above historical levels, reflecting ongoing challenges within the portfolio.
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