Core Viewpoint - MidCap Financial Investment Corporation will report its financial results for the quarter and fiscal year ended December 31, 2024, on February 25, 2025, after market close [1] Group 1: Financial Reporting - The company will host a conference call on February 26, 2025, at 8:30 a.m. Eastern Time for interested parties to discuss the financial results [2] - Participants can access the conference call via a dedicated phone line or through a webcast available on the company's website [2] Group 2: Company Overview - MidCap Financial Investment Corporation is a closed-end, externally managed, diversified management investment company classified as a business development company under the Investment Company Act of 1940 [3] - The company is managed by Apollo Investment Management, L.P., an affiliate of Apollo Global Management, Inc., focusing on generating current income and long-term capital appreciation [3] - The investment strategy primarily involves first lien senior secured loans to U.S. middle-market companies, defined as those with less than $75 million in EBITDA [3]

Core Viewpoint - MidCap Financial Investment Corporation (NASDAQ: MFIC) is a business development company focused on lending to middle market companies at a senior secured level [1] Company Overview - MidCap Financial Investment Corporation specializes in providing loans to middle market companies, indicating a strategic focus on a specific segment of the market [1] - The company operates as a business development company, which typically involves investing in and lending to small and medium-sized enterprises [1] Investment Strategy - The company is involved in income investing through various financial instruments, including common shares, preferred shares, and bonds [1] - The investment approach includes a focus on the broader economy and special situations involving specific companies [1] Background Information - The company is led by an individual with a strong educational background in history, political science, and an MBA specializing in Finance and Economics [1] - The leadership has extensive experience in investing, having been active in the field since 2000 [1]

Financial Data and Key Metrics Changes - MFIC's net investment income per share for Q3 2024 was $0.44, reflecting an annualized return on equity (ROE) of 11.5% [15][42] - GAAP EPS for the quarter was $0.31, with NAV per share at $15.10, down $0.08 or approximately 0.5% from the end of June [16][42] - The company recorded a modest net loss on its portfolio, with a net loss of $11.4 million or $0.13 per share [42][46] - At the end of September, MFIC's net leverage was 1.16 times compared to 1.45 times at the end of June [17][43] Business Line Data and Key Metrics Changes - In Q3, MFIC onboarded approximately $600 million of investments from the mergers, with about one-third in directly-originated loans [11][25] - New commitments in the September quarter totaled $371 million, up 30% from the prior quarter, across 27 different borrowers [23] - The weighted average yield at cost of the directly-originated lending portfolio was 11.6%, down from 12% in the previous quarter [29] Market Data and Key Metrics Changes - The current market environment benefits from solid economic growth, strong consumer activity, and robust credit markets [17][18] - There has been an increase in activity levels in credit markets, particularly in opportunistic refinancings and M&A transactions [18][19] - The weighted average spread on directly-originated corporate lending was 577 basis points, down 24 basis points compared to the end of June [30] Company Strategy and Development Direction - MFIC views the mergers with Apollo Senior Floating Rate Fund and Apollo Tactical Income Fund as transformational, increasing net assets by over 40% [10] - The company plans to gradually increase leverage over the coming quarters to reach its target leverage ratio of 1.4 times [14][43] - MFIC is focused on investing in first lien loans to middle-market companies, leveraging its strong origination capabilities [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding increased M&A activity in the latter half of Q4 and into 2025, driven by recent rate cuts and liquidity events [18][19] - The company is closely monitoring the impact of potential regulatory changes and tariffs on its borrowers and investment strategy [62][63] - Management noted that the overall credit quality of MFIC's direct-origination portfolio remains healthy, with no significant increase in amendment requests related to covenants or liquidity [30][31] Other Important Information - During the September quarter, MFIC paid a special one-time dividend of $0.20 per share in connection with the mergers, in addition to its regular quarterly dividend of $0.38 [22] - The company issued 28.5 million shares at NAV during the quarter as part of the merger consideration, resulting in approximately 93.8 million shares outstanding [47][51] Q&A Session Summary Question: Is MFIC more levered to prepayments for fee income? - Management indicated that while prepayments can lead to a pickup in fee income, the impact is not dramatic outside of the Life Sciences vertical [54][55] Question: What factors could drive the pace of rotating non-directly originated assets? - Management noted that the pace is influenced by macroeconomic conditions, pricing, and market risk, with a focus on managing deployment appropriately [56][57] Question: What are the implications of the election on the business? - Management highlighted potential changes in regulatory oversight and a more growth-oriented backdrop, which could increase M&A activity [62] Question: Can you provide color on the unrealized and realized loss per share for the quarter? - Management explained that losses were primarily from a restructuring of a specific company, with some offsetting gains from other sales [64] Question: What are the thoughts around share buybacks given the current leverage and market conditions? - Management stated that share buybacks would be considered when it is accretive compared to other uses of capital, emphasizing the importance of maintaining available capital [68][69]

Core Insights - MidCap Financial Investment (MFIC) reported revenue of $82.14 million for Q3 2024, a 20.5% increase year-over-year, with an EPS of $0.44 compared to $0.43 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate by 0.65%, while the EPS exceeded the consensus estimate by 2.33% [1] Financial Performance Metrics - Interest income was reported at $77.40 million, which is a 25% year-over-year increase but below the average estimate of $80.11 million [3] - Other income reached $1 million, slightly below the average estimate of $1.01 million, reflecting a significant year-over-year increase of 263.6% [3] - Dividend income surged to $0.70 million, compared to the estimated $0.19 million, marking a remarkable year-over-year increase of 573.1% [3] Stock Performance - Over the past month, MidCap Financial's shares returned +1%, underperforming the Zacks S&P 500 composite's +3.2% change [4] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [4]

Financial Performance - Net investment income per share for the quarter was $0.44, a decrease of 2.2% compared to $0.45 for the previous quarter[1]. - Total investment income for the three months ended September 30, 2023, was $82,138,000, an increase of 20.5% from $68,175,000 in the same period last year[25]. - Net investment income for the three months ended September 30, 2023, was $38,135,000, compared to $27,897,000 for the same period last year, representing a 36.7% increase[25]. - Earnings per share for the three months ended September 30, 2023, were $0.31, down from $0.46 in the same period last year[25]. - Interest income (excluding PIK interest income) from non-controlled/non-affiliated investments was $72,640,000 for the three months ended September 30, 2023, compared to $61,939,000 in the same period last year, a 17.5% increase[25]. - Total expenses for the three months ended September 30, 2023, were $44,165,000, up from $40,681,000, indicating an increase of 12.2% year-over-year[25]. - Net realized gains for the three months ended September 30, 2023, were $487,000, compared to a loss of $200,000 in the same period last year[25]. - The net change in unrealized losses for the three months ended September 30, 2023, was $(11,906,000), compared to a gain of $2,266,000 in the same period last year[25]. Asset and Liability Overview - Net asset value per share as of September 30, 2024, was $15.10, a decrease of 0.5% compared to June 30, 2024, excluding the impact of a $0.20 special distribution[1]. - Total assets as of September 30, 2024, were $3.22 billion, up from $2.55 billion as of June 30, 2024[6]. - Total assets increased to $3,216,032,000 as of September 30, 2024, compared to $2,501,331,000 as of December 31, 2023[24]. - Total liabilities rose to $1,799,809,000 as of September 30, 2024, up from $1,496,021,000 at the end of 2023[24]. - The net asset value per share decreased to $15.10 as of September 30, 2024, from $15.41 at the end of 2023[24]. Investment Activities - New investment commitments during the quarter totaled $371 million[1]. - Gross fundings for the quarter, excluding revolver fundings, totaled $288 million[1]. - Closed mergers with Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc., acquiring investments totaling $596 million[1]. - The Company recognized a purchase discount in the AFT and AIF mergers, as the fair value of net assets acquired exceeded the merger consideration paid[19]. - As of September 30, 2024, the portfolio composition included 91% first lien secured debt, up from 88% in September 2023[22]. - The weighted average yield for first lien secured debt was 11.1% as of September 30, 2024, a decrease from 11.9% in June 2024[22]. - The Company had $2.7 billion in floating rate debt as of September 30, 2024, representing 99% of total debt[22]. Cash and Equivalents - Cash and cash equivalents were reported at $84,480,000 as of September 30, 2024, down from $93,575,000 at the end of 2023[24]. - Interest receivable increased to $26,773,000 as of September 30, 2024, compared to $21,441,000 at the end of 2023[24]. Corporate Actions - The Board declared a dividend of $0.38 per share payable on December 26, 2024[2]. - The Company repurchased 15,593,120 shares at a weighted average price of $15.91, totaling $248.1 million[10]. - The Amended Senior Secured Facility lender commitments increased to $1.815 billion, with a final maturity date extended to October 17, 2029[13]. Management and Strategy - The company primarily invests in first lien senior secured loans to privately held U.S. middle-market companies, defined as those with less than $75 million in EBITDA[29]. - The company is externally managed by an affiliate of Apollo Global Management, Inc., focusing on generating current income and long-term capital appreciation[29]. Upcoming Events - The Company will host a conference call on November 7, 2024, at 8:30 AM EST to discuss earnings[20].

Financial Performance - Total investment income for the three months ended September 30, 2024 increased by $13.2 million compared to the same period in 2023, primarily driven by higher interest income[338]. - Interest income for the three months ended September 30, 2024 was $77.4 million, up from $66.7 million in 2023, reflecting a higher income-bearing investment portfolio[337]. - Net investment income for the three months ended September 30, 2024 was $38.1 million, compared to $27.9 million in 2023[337]. - For the nine months ended September 30, 2024, total investment income increased by $14.8 million compared to the same period in 2023, driven by higher interest income[339]. - PIK income for the nine months ended September 30, 2024, was $7.5 million on total investment income of $219.6 million, compared to $2.1 million on total investment income of $204.6 million for the same period in 2023[368]. Investment Activity - The company made investments totaling $911.9 million in portfolio companies during the three months ended September 30, 2024, compared to $30.3 million in the same period of 2023[305]. - The net investment activity for the three months ended September 30, 2024, was $584.6 million, a significant increase from a net activity of $(42.6) million in the same period of 2023[305]. - The number of portfolio companies increased to 250 at the end of the period, up from 149 at the beginning of the period[305]. - Total invested capital since the IPO in April 2004 reached $25.2 billion across 783 portfolio companies[310]. - The company completed transactions with over 100 different financial sponsors since its inception[310]. Debt and Financing - Total debt obligations as of September 30, 2024, amounted to $1.7789 billion, with $350 million due within one year and $1.0719 billion due in three to five years[359]. - The fixed rate amount as a percentage of total debt was 1% as of September 30, 2024, compared to 0% at the end of 2023[308]. - The floating rate amount increased to $2.7 billion, representing 99% of total debt as of September 30, 2024[308]. - The total annualized cost of debt rose from 7.02% for the nine months ended September 30, 2023 to 7.47% for the same period in 2024[341]. - The Amended Senior Secured Facility increased lender commitments from $1.705 billion to $1.815 billion until December 22, 2024[312]. Legal Proceedings - On March 14, 2023, a complaint was filed against certain First Lien and Second Lien debt holders of Mitel in New York State Court, alleging breaches of lending agreements[381]. - The trial court granted defendants' motions to dismiss in part and denied them in part on December 5, 2023, with the trial currently in discovery[381]. - Plaintiffs and defendants have taken interlocutory appeals of the court's motion to dismiss ruling, which are pending[381]. - No reasonable estimate of possible loss can be made at this time regarding the legal proceedings[381]. - Other than the disclosed matter, the company is not currently subject to any material legal proceedings[382]. Portfolio Composition - As of September 30, 2024, the portfolio composition included 91% first lien secured debt, up from 89% as of December 31, 2023[308]. - Non-qualifying assets represented approximately 8.3% of the total assets of the company as of September 30, 2024[299]. - The company primarily invests in first lien senior secured loans to privately held U.S. middle-market companies, defined as those with less than $75 million in EBITDA[298]. - As of September 30, 2024, 93.6% of the Company's investments, amounting to $2.83 billion, were classified as Level 3[321]. Market Risks and Expectations - The company anticipates that its actual results could differ materially from forward-looking statements due to various risks and uncertainties[290]. - The estimated annual impact on net investment income from a 150 basis point increase in interest rates is $0.196 per share[376]. - The company believes its current cash and cash equivalents, short-term investments, and anticipated cash flows will be adequate to meet cash needs for daily operations for at least the next twelve months[356]. Expenses - Net expenses for the three months ended September 30, 2024 increased by $3.7 million, primarily due to a $5.9 million rise in interest and other debt expenses attributed to an increase in average debt outstanding from $1.44 billion to $1.72 billion[340]. - The company expects general and administrative operating expenses related to ongoing operations to increase moderately in dollar terms[303]. Valuation and Gains - The company recognized net realized gains of $0.5 million for the three months ended September 30, 2024, compared to net realized losses of $0.2 million in the same period of 2023[342][343]. - The net change in unrealized gains for the nine months ended September 30, 2024 was $1.8 million, primarily driven by write-offs of MSEA Tankers LLC and ViewRay[352]. - Significant realized losses for the nine months ended September 30, 2024 included $15.7 million from MSEA Tankers LLC and $7.1 million from ViewRay[346]. - Significant unrealized losses included ViewRay at $(3.3) million and Renew Financial LLC at $(1.8) million, while Merx Aviation Finance, LLC had an unrealized gain of $2.9 million[354].

Core Insights - The company reported a net investment income of $0.44 per share for the quarter ended September 30, 2024, a slight decrease from $0.45 per share for the previous quarter [1] - The net asset value (NAV) per share as of September 30, 2024, was $15.10, reflecting a 0.5% decline compared to June 30, 2024, after accounting for a special distribution of $0.20 per share related to recent mergers [1][3] - The company successfully closed mergers with Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc., acquiring investments totaling $596 million [1][3] Financial Performance - New investment commitments during the quarter amounted to $371 million, while gross fundings totaled $288 million [1] - The company achieved net fundings of $222 million for the quarter, including revolver fundings [1] - The net leverage ratio was reported at 1.16x as of September 30, 2024, down from 1.45x in the previous quarter [1][5] Dividend Declaration - On November 6, 2024, the Board declared a dividend of $0.38 per share, payable on December 26, 2024, to stockholders of record as of December 10, 2024 [2] Mergers and Acquisitions - The mergers with AFT and AIF were completed on July 22, 2024, with the company being the accounting survivor [3][18] - The mergers were accounted for under the asset acquisition method, resulting in the issuance of 28,527,003 shares of common stock to former AFT and AIF stockholders [19][20] Portfolio and Investment Activity - The total assets of the company as of September 30, 2024, were $3.22 billion, an increase from $2.55 billion as of June 30, 2024 [5][24] - The investment portfolio at fair value was reported at $3.03 billion, up from $2.44 billion in the previous quarter [5] - The company made significant investments in portfolio companies, totaling $911.9 million for the three months ended September 30, 2024 [7][25] Debt and Liquidity - As of September 30, 2024, the company's outstanding debt obligations totaled $1.779 billion, with a significant portion under the Amended Senior Secured Facility [13][14] - The available remaining capacity under the Facility was $697.3 million, subject to compliance with a borrowing base [13] Share Repurchase Program - The company did not repurchase any shares during the three months ended September 30, 2024, but has repurchased a total of 15,593,120 shares since the inception of the program [11]

NEW YORK, Oct. 18, 2024 (GLOBE NEWSWIRE) -- MidCap Financial Investment Corporation (NASDAQ: MFIC) (the "Company") announced today that it has amended and extended its senior secured, multi-currency, revolving credit facility (the "Facility"). Lender commitments under the Facility total $1.660 billion, excluding non-extending lender commitments, an increase of $110 million. Lender commitments under the Facility total $1.815 billion, including $155 million of commitments from non-extending lenders which are ...

NEW YORK, Oct. 02, 2024 (GLOBE NEWSWIRE) -- MidCap Financial Investment Corporation (NASDAQ: MFIC) (the "Company") announced today that it will report results for the quarter ended September 30, 2024, prior to the opening of the Nasdaq Global Select Market on Thursday, November 7, 2024. The Company will also host a conference call on Thursday, November 7, 2024, at 8:30 a.m. Eastern Time. All interested parties are welcome to participate in the conference call by dialing (800) 343-4136 approximately 5- 10 mi ...

malerapaso Overview When it comes to dividend investing, business development companies are the place to go when you're looking to collect a higher than normal dividend yield. MidCap Financial Investment (NASDAQ:MFIC) operates as a business development company that generates its earnings by making various forms of debt investments to middle market companies. I previously covered MFIC back in May and issued a buy rating. Unfortunately, the total return since then has been negative. While this can be attribut ...