BlackRock TCP Capital (NasdaqGS:TCPC) Q3 2025 Earnings Call November 06, 2025 12:00 PM ET Speaker3Ladies and gentlemen, good afternoon, and welcome to BlackRock TCP Capital Corp's third quarter earnings 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. To ask a question, please press the star key followed by the digit one. I will repeat these ins ...

BlackRock TCP Capital Corp. Investor presentation Q3 2025 Key investment highlights | 1 | Established platform with decades of experience lending throughout market cycles | | --- | --- | | 2 | Strategically-positioned, diverse portfolio with access to the core middle market | | 3 | Extensive network and channel-agnostic approach to deal sourcing | | 4 | Diversified, flexible funding sources | | 5 | Strong shareholder alignment | | 6 | Access to reach and resources of world's largest asset manager | Experien ...

SANTA MONICA, Calif., November 6, 2025 - BlackRock TCP Capital Corp. ("we," "us," "our," "TCPC" or the "Company"), a business development company (NASDAQ: TCPC), today announced its financial results for the third quarter ended September 30, 2025 and filed its Form 10-Q with the U.S. Securities and Exchange Commission. Exhibit 99.1 BLACKROCK TCP CAPITAL CORP. ANNOUNCES THIRD QUARTER 2025 FINANCIAL RESULTS INCLUDING NET INVESTMENT INCOME OF $0.32 PER SHARE; DECLARES A FOURTH QUARTER DIVIDEND OF $0.25 PER SHA ...

SANTA MONICA, Calif.--(BUSINESS WIRE)--BlackRock TCP Capital Corp. ("we,†"us,†"our,†"TCPC†or the "Company†), a business development company (NASDAQ: TCPC), today announced its financial results for the third quarter ended September 30, 2025 and filed its Form 10-Q with the U.S. Securities and Exchange Commission. FINANCIAL HIGHLIGHTS On a GAAP basis, net investment income for the quarter ended September 30, 2025 was $27.3 million, or $0.32 per share on a diluted basis, which exceeded the re. ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 2025 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From ____ to ____ Commission File Number: 814-00899 BLACKROCK TCP CAPITAL CORP. (Exact Name of Registrant as Specified in its Charter) Delaware 56-2594706 (S ...

Core Insights - The article discusses the best Business Development Company (BDC) dividend stocks to invest in, highlighting their role in supporting smaller and mid-sized businesses in the US [2][4]. Industry Overview - BDCs provide an alternative to traditional banking by raising funds through share issuance and investing in loans and equity stakes in private firms, aiming to support business growth while offering returns to investors [2]. - Fitch Ratings expresses a cautious outlook for BDCs in 2025, citing challenges such as a crowded lending environment, weaker earnings, and high interest rates impacting asset quality [3][4]. Company Highlights - **PennantPark Investment Corporation (NYSE:PNNT)**: - Focuses on mid-sized firms, achieving an average yield of 10.4% on debt investments as of June [9]. - Nearly all loans (99%) are at variable rates, benefiting from rising interest rates, with a current monthly dividend of $0.08 per share and a yield of 14.66% as of October 5 [10][11]. - **Gladstone Capital Corporation (NASDAQ:GLAD)**: - Provides debt and equity financing to lower middle-market businesses, focusing on secured loans and consistent cash flow [12]. - Offers a monthly dividend of $0.165 per share and a supplemental dividend of $0.10 per share, resulting in a yield of 9.27% as of October 5 [14]. - **BlackRock TCP Capital Corp. (NASDAQ:TCPC)**: - Targets mid-sized businesses with stable cash flows, primarily through senior secured loans [15]. - Maintains a stable dividend history with a current quarterly payout of $0.25 per share and a yield of 16.53% as of October 5 [16].

Core Viewpoint - Small-cap companies are rapidly adopting AI technologies, leading to increased efficiency and potential profit growth, while currently being the cheapest sector in the market [2] Group 1: Small-Cap Dividend Stocks - BlackRock TCP Capital (TCPC) has a yield of 15.7% and invests in over 150 companies across 20 industries, but is currently facing restructuring due to credit issues [3] - TCPC is trading at an 18% discount to its net asset value (NAV), with a regular yield of 14% and an additional 1.7% from special dividends [4] - New Mountain Finance (NMFC) offers a 12.1% yield and is also trading at a 14% discount to NAV, focusing on U.S. upper-middle-market businesses [5][6] - NMFC's NAV has declined nearly 2% quarter-over-quarter, with markdowns in healthcare and consumer products, but its credit quality remains stable [8][9] - Kayne Anderson BDC (KBDC) has a yield of 12.6% and targets companies with $10 million to $75 million in EBITDA, with a focus on defensive industries [10] - KBDC has initiated a $100 million buyback program and has seen investments increase in Q3, despite a slight decline in NAV [12] Group 2: Income-Generating Investments - Mach Natural Resources LP (MNR) offers a 16.0% distribution and operates primarily in the Anadarko Basin, with a focus on natural gas [13] - MNR trades at approximately 3.5 times this year's EBITDAX estimates, which is below the average for comparable MLPs [14] - MFA Financial (MFA) has a yield of 14.4% and invests in residential mortgage loans and securities, with a recent 13% QoQ increase in origination fees [15][17] - MFA's distributable earnings are expected to drop significantly this year, but the market does not seem to be pricing in a dividend cut [18] - Armour Residential REIT (ARR) offers a high yield of 19.0% but has a history of dividend cuts, trading at about 90% of book value [19][21]

Group 1: Market Sentiment and Analyst Ratings - The article highlights a significant disparity in analyst ratings, with 81% of S&P 500 companies rated as Buy, which is unusually high given current market conditions influenced by AI disruptions [2][3] - Analysts are more inclined to issue Sell ratings, as they allow for potential upgrades, making contrarian strategies appealing for investors [3] Group 2: Company Profiles and Performance - Prospect Capital (PSEC) is a business development company (BDC) with a yield of 18.7%, but it has faced challenges, including three dividend cuts in the past decade, leading to a consensus Sell rating from analysts [4][6] - BlackRock TCP Capital Corp. (TCPC) has a yield of 15.7% and is considered a consensus Sell, but most analysts rate it as Hold, indicating a less negative outlook compared to PSEC [6][8] - Cheniere Energy Partners LP (CQP) has a yield of 6.1% and is investing heavily in expansions, which may lead to increased distributable cash flow in the future despite a recent reduction in variable distributions [9][11] - Innovative Industrial Properties (IIPR), a REIT focused on the cannabis industry, has a yield of 14.4% but faces a challenging regulatory environment, leading to a bearish consensus among analysts [12][15]

Financial Data and Key Metrics Changes - Nonaccruals decreased to 3.7% of the portfolio's fair market value, down from 4.4% last quarter and 5.6% at the end of 2024 [6] - NAV declined during the quarter primarily due to markdowns on previously restructured portfolio companies [6] - Adjusted net investment income was $0.31 per share, down from $0.36 in the first quarter, while gross investment income was $0.61 per share compared to $0.66 in the prior quarter [23] Business Line Data and Key Metrics Changes - The portfolio had a fair market value of approximately $1.8 billion invested across 153 companies in over 20 industry sectors [21] - The average investment size was $11.7 million, with 89% of the portfolio invested in senior secured debt, all in floating rate instruments [21] - The weighted average annual effective yield of the portfolio was 12% in the second quarter, compared to 12.2% in the prior quarter [21] Market Data and Key Metrics Changes - New investments had a weighted average yield of 10.8%, while exited investments carried an average yield of 10.5% [21] - Total liquidity at quarter end was $566 million, including $455 million of available leverage and $107 million in cash [27] Company Strategy and Development Direction - The acquisition of HPS is expected to enhance TCPC's capabilities in private credit, creating a new platform called Private Financing Solutions (PFS) [31] - PFS aims to centralize private investment sourcing and origination teams to maximize collaboration and effectiveness [32] - TCPC will continue to directly source investments while leveraging PFS's extensive deal sourcing capabilities [32] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over additional markdowns but noted progress in reducing nonaccruals and sourcing attractive investments [34] - The company is focused on diligently working through portfolio challenges to deliver the best possible outcomes for shareholders [34] - Management acknowledged that the high rate environment and macroeconomic conditions could impact demand and performance of portfolio companies [56] Other Important Information - The Board declared a second quarter dividend of $0.25 and a special dividend of $0.04 per share, payable on September 30 [13] - The company repurchased 40,830 shares of TCPC stock during the quarter [13] Q&A Session Summary Question: Changes in the investment process with new committee members - Management indicated that the investment process will benefit from centralized origination and sourcing, leveraging resources from both BlackRock and HPS [36][38] Question: Ensuring TCPC receives proper access and resources during growth - Management assured that TCPC remains a strategic priority for the PFS platform and will continue to receive deep engagement across investment processes [42][44] Question: Markdown on Auto Alert and its performance - The markdown was primarily driven by market comps rather than performance issues, although the company has shown improvements since restructuring [45]

Core Insights - BlackRock TCP Capital Corp. (TCPC) experienced a decline in net asset value (NAV) in Q2 2025, primarily due to markdowns on previously restructured portfolio companies rather than new credit issues [12][19] - The company reduced nonaccruals to 3.7% of the portfolio's fair market value, down from 4.4% in Q1 2025 and 5.6% at the end of 2024, indicating improved management of distressed assets [12][19] - The acquisition of HPS by BlackRock has led to the formation of the Private Financing Solutions (PFS) platform, which is expected to enhance TCPC's investment sourcing and risk management capabilities [11][41] Financial Performance - Net realized losses for Q2 2025 totaled approximately $66 million, or $0.78 per share, mainly due to restructurings in several portfolio companies [3][36] - Adjusted net investment income was $0.31 per share in Q2 2025, down from $0.36 per share in Q1 2025; gross investment income was $0.61 per share, down from $0.66 [7][34] - The weighted average annual effective yield was 12% in Q2 2025, compared to 12.2% in the prior quarter [7][33] Portfolio Management - The portfolio included 153 companies across more than 20 industry sectors, with an average investment size of $11.7 million [6][32] - 89% of the $1.8 billion portfolio was invested in senior secured debt, all in floating-rate instruments [6][32] - Four new investments were added to nonaccrual status in Q2 2025 due to uneven performance and liquidity constraints [4][19] Dividend and Share Repurchase - A regular dividend of $0.25 and a special dividend of $0.04 per share were declared for Q2 2025, payable on September 30 [8][24] - The company repurchased 40,830 shares during Q2 2025 [8][25] Leverage and Liquidity - Total liquidity at the end of Q2 2025 was $566 million, with available leverage of $155 million and cash of $107 million [9][37] - Net regulatory leverage rose to 1.28 times, exceeding the targeted range of 0.9 to 1.2 times, due to new investments and delayed repayments [3][38] Strategic Outlook - Management expects net regulatory leverage to return to approximately Q1 2025 levels in the next quarter following investment deployments and delayed repayments [14] - The integration into the PFS platform is anticipated to provide enhanced sourcing and allocation capabilities, benefiting TCPC's investment strategy [41][42]