Q2 2024 BlackRock TCP Capital Corp Earnings Call Transcript
Key Points
- BlackRock TCP Capital Corp (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.
- 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.
- TCPC successfully raised $325 million of fixed-rate unsecured debt at an attractive rate of 6.95% in May 2024, enhancing their capital position.
- 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.
- 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.
- 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.
- Net realized losses for the quarter were $35 million, primarily due to the restructuring of investments in Thras.io and Hylan.
- Net unrealized losses totaled $52 million, driven by markdowns on investments in companies like SellerX, Pluralsight, and Lithium.
- The weighted average annual effective yield of the portfolio decreased to 12.4% from 13.4% in the previous quarter, indicating some yield compression.
- The increase in non-accruals negatively impacted earnings per share by approximately $0.08, reflecting ongoing challenges in certain portfolio segments.
Ladies and gentlemen, good afternoon. Welcome everyone to BlackRock TCP Capital Corp second quarter 2024 earnings conference call. Today's conference call is being recorded for replay purposes.
During the presentation, all participants will be in a listen-only mode. A question-and-answer session will follow the company's formal remarks. (Operator Instructions) I will repeat these instructions before we begin the Q&A session.
And now, I would like to turn the call over to Michaela Murray, a member of the BlackRock TCP Capital Corp Investor Relations team. Michaela, please proceed.
Thank you. Before we begin, I'll note that this conference call may contain forward-looking statements based on the estimates and assumptions of management at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties and actual results could differ materially from those projected. Any forward-looking statements made on this call are made as
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