My recent articles on business development companies, or BDCs, have revolved around finding durable dividend payers that have strong enough protection in place from both falling base rates and potentially increased credit risk in theRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity o ...

Group 1 - Crescent Capital (CCAP) operates as a Business Development Company (BDC) and serves as a mid-market direct lender primarily focused on leveraged buyouts (LBOs) [1] - The mid-market sponsors that Crescent Capital targets have been significantly impacted by rising interest rates [1] Group 2 - The analysis emphasizes thematic investing, crisis investing, systematic options trading, and discretionary global macro strategies [1] - The analyst has extensive experience in private mergers and acquisitions, as well as in trading publicly-traded equities and equity-based derivatives [1]

The manic market has been dumping business development companies (BDCs) left and right. Let’s talk about a seven-stock BDC portfolio (yielding 13.5%!) that is poised to bounce back when sanity returns.BDCs, which lend money to small businesses, are on the “outs” with the Wall Street suits after countless soft jobs reports. The spreadsheet jockeys fret about an unemployment-induced economic slowdown and miss the real story: small businesses are making more money than ever thanks to AI.Here is what’s actually ...

Core Insights - The main risk for income investors is the challenge of finding high-yield investment opportunities with sound risk profiles in a difficult environment [1] Group 1: Industry Insights - Roberts Berzins has over a decade of experience in financial management, assisting top-tier corporates in shaping financial strategies and executing large-scale financings [2] - Significant efforts have been made to institutionalize the REIT framework in Latvia to enhance the liquidity of pan-Baltic capital markets [2] - Development of national SOE financing guidelines and frameworks for channeling private capital into affordable housing stock has been a focus [2] Group 2: Analyst Background - Roberts Berzins is a CFA Charterholder and holds an ESG investing certificate, with experience including an internship at the Chicago Board of Trade [2] - Active involvement in "thought-leadership" activities supports the development of pan-Baltic capital markets [2]

Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1][2] - The investment group targets high-yield, dividend growth opportunities, offering portfolios with dividend yields up to 10% [2] Investment Strategy - The investment approach emphasizes the importance of purchasing quality assets at favorable prices to mitigate risks associated with overpaying [2] - The group provides research on various investment vehicles including REITs, ETFs, closed-end funds, preferred stocks, and dividend champions [2] Performance and Expectations - The service aims to help investors achieve dependable monthly income and portfolio diversification [2] - Past performance is highlighted as not being a guarantee of future results, indicating a focus on long-term investment strategies [5]

Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes, aiming for sustainable portfolio income, diversification, and inflation hedging [1][2] - The investment group targets high-yield, dividend growth opportunities, with portfolios offering dividend yields up to 10% [2] Investment Strategy - The service emphasizes the importance of purchasing quality assets at favorable prices to mitigate risks associated with overpaying [2] - It provides research on various investment vehicles including REITs, ETFs, closed-end funds, preferred stocks, and dividend champions [2] Target Audience - The investment group caters to investors seeking dependable monthly income and portfolio diversification [2]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Financial Data and Key Metrics Changes - The company reported net investment income (NII) of $0.46 per share, unchanged from the prior quarter, resulting in an annualized NII yield of 9.5% [5][20] - Net asset value (NAV) decreased to $19.28 per share as of September 30, down from $19.55 per share as of June 30, primarily due to unrealized and realized losses from certain portfolio companies affected by tariffs [5][20] Business Line Data and Key Metrics Changes - The investment portfolio totaled approximately $1.6 billion at fair value, with 187 companies, and an average investment size of about 0.6% of the total portfolio [7] - The portfolio consists primarily of first-lien loans, representing 90% of the portfolio at fair value [7] - The weighted average yield of income-producing securities at cost remained stable at 10.4% [14] Market Data and Key Metrics Changes - The macroeconomic environment in the U.S. remains resilient, with expectations of near-term growth in loan activity due to recent Federal Reserve rate cuts and clarity on tariff policies [6] - The company has no exposure to recent bankruptcies, indicating a focus on governance by working with established private equity sponsors [6][8] Company Strategy and Development Direction - The company is focused on strong cash flow generation, tight EBITDA definitions, and enhanced monitoring rights to proactively manage the portfolio [6] - The board declared a regular dividend of $0.42 per share for the fourth quarter, representing a 9% and 12% annualized dividend yield based on NAV and stock price, respectively [8][24] - The company anticipates that a lower base rate environment may gradually reduce portfolio yields and pressure net investment income, but believes it is well-positioned to address these challenges [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term prospects of the company, citing a strong capital structure and diversified portfolio [25] - The company noted that while tariff impacts have been identified, the overall portfolio remains resilient, with most borrowers experiencing steady revenue and EBITDA growth [17][18] Other Important Information - The company ended the quarter with a net debt to equity ratio of 1.20 times, providing flexibility for portfolio growth [10] - The weighted average interest coverage of the companies in the investment portfolio was stable at 2.1 times, indicating strong earnings durability [14] Q&A Session Summary Question: What is the probability of maintaining NII coverage of the dividend at 100% or more? - Management believes that available levers will allow them to cover the base dividend with NII in the near term, with potential for increased non-interest-related income [27][28] Question: Has the ability of exposed companies to handle tariffs deteriorated? - Management indicated that overall, companies have responded well to tariff pressures, although two specific companies have shown a need for a longer recovery period [30][32] Question: What is the state of competition in the lower-middle market? - Management acknowledged spread compression in the market but emphasized that they are still able to secure high-quality transactions with appropriate risk-adjusted returns [34][36] Question: What drove the increase in spreads on new investments? - The company has maintained new origination spreads around 500 over SOFR, driven by a mix of incremental activity from existing portfolio companies and opportunities in specific market segments [41][42] Question: Are there any non-recurring items in earnings this quarter? - Management confirmed that there were no significant non-recurring items, with core interest income representing the majority of total revenue [51]

Financial Performance - Net investment income (NII) per share for Q3 2025 was $0.46, unchanged from the prior quarter[20] - Net realized and unrealized losses on investments per share for Q3 2025 were ($0.27)[20] - Net asset value (NAV) per share as of September 30, 2025, was $19.28, compared to $19.55 in the prior quarter[20] - The company declared a regular dividend of $0.42 per share for Q4 2025[20] - Total net assets were $714 million as of September 30, 2025[11] Portfolio Composition - Total portfolio investments were $1,581 million as of September 30, 2025[11, 20] - 90% of the portfolio comprised senior secured first lien and unitranche first lien investments by fair value[20, 38] - The portfolio consisted of 187 portfolio companies across 18 industries[20, 38] - Floating rate investments accounted for 97% of the portfolio[24, 38, 47] Capital Structure and Liquidity - The company had $27.8 million in cash and cash equivalents and restricted cash[20] - Undrawn debt capacity was $239.8 million as of September 30, 2025[20, 65] - The debt-to-equity ratio was 1.23x[11, 22, 26]

分组1 - Crescent Capital BDC reported quarterly earnings of $0.46 per share, missing the Zacks Consensus Estimate of $0.47 per share, and down from $0.64 per share a year ago, representing an earnings surprise of -2.13% [1] - The company posted revenues of $41.35 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.52%, and down from $51.63 million year-over-year [2] - Crescent Capital BDC shares have declined approximately 25.9% since the beginning of the year, contrasting with the S&P 500's gain of 16.4% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.46 on revenues of $41.56 million, and for the current fiscal year, it is $1.83 on revenues of $169.11 million [7] - The Zacks Industry Rank for Financial - SBIC & Commercial Industry is currently in the bottom 11% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]