Group 1 - BlackRock TCP (TCPC) has experienced a significant downtrend, with a stock decline of 17.2% over the past four weeks due to excessive selling pressure [1] - The stock is currently in oversold territory, indicated by an RSI reading of 15.22, suggesting that the heavy selling may be exhausting itself and a rebound could occur [3] - Wall Street analysts have raised earnings estimates for TCPC, with a 0.4% increase in the consensus EPS estimate over the last 30 days, indicating potential price appreciation in the near term [4] Group 2 - TCPC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [4]

Financial Data and Key Metrics Changes - Adjusted net investment income was $0.38 per share with an annualized net investment income return on average equity of approximately 14%, remaining at the high end of historical ranges [4][20] - The net asset value (NAV) declined by 8.4%, with non-accruals increasing from approximately 1.7% to 4.9% of fair value [5][11] - Net realized losses for the quarter were $35 million, while net unrealized losses totaled $52 million [12][21] - Available liquidity at the end of the quarter was $780 million, including $585 million in available capacity under the leverage program and $195 million in cash [22] Business Line Data and Key Metrics Changes - The company invested $130 million in the second quarter, with $124 million in senior secured loans, reflecting a 40% increase in deployment activity compared to the previous year [14][15] - The weighted average annual effective yield of the portfolio decreased to 12.4% from 13.4% in the previous quarter [18] - 91% of the portfolio was invested in senior secured loans, with 81% in first lien loans [19] Market Data and Key Metrics Changes - The company noted a meaningful pickup in activity across its platform, driven by a return of M&A and refinancing activity [14] - The overall credit quality of the portfolio remains strong, with a weighted average internal risk rating of 1.5, slightly improved from 1.56 in the previous quarter [12] Company Strategy and Development Direction - The company is focused on maintaining a disciplined approach to capital deployment, emphasizing credit-first downside protection and investing in the core middle-market [23] - The merger with BlackRock Investment Capital Corp is expected to improve access to capital, allowing the company to capitalize on new investment opportunities [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the increase in non-accruals but emphasized the overall strong health of the portfolio and ongoing efforts to resolve issues with impacted companies [5][23] - The company remains committed to maintaining a well-covered dividend and delivering attractive returns to shareholders [23] Other Important Information - The company raised $325 million of fixed-rate unsecured debt at an attractive rate of 6.95% in May 2024 [13] - The investment manager's support for the dividend is in place for four quarters post-merger, covering any shortfall below $0.32 of net investment income [46] Q&A Session Summary Question: How much did the increase in non-accruals affect EPS in the quarter? - The increase in non-accruals affected EPS by roughly $0.08 per share [24] Question: Were the non-accruals legacy TCPC or from the merger? - The portfolios were largely overlapping at the time of the merger, making it difficult to distinguish between legacy TCPC and BCIC positions [26] Question: What is the target range for leverage? - The regulatory net leverage is 1.13x, which is within the target range of 0.9x to 1.20x [22][27] Question: Why did the company decide to increase investments this quarter? - The increase in investments was not characterized as an acceleration but rather a normal deployment reflecting growth in existing portfolio companies [29][30] Question: Is there more industry concentration in the portfolio? - The company acknowledged the correlation in the Amazon aggregator space but does not see similar trends across other industries in the portfolio [32][34] Question: How many restructurings is the company driving? - The company is meaningfully involved in most restructurings, with a focus on being a significant voice in negotiations [37][38] Question: Are sponsors willing to support their companies? - Sponsor behavior is case-by-case, with some continuing to provide support while making rational decisions based on business performance [40] Question: How is the company managing current leverage levels? - The company views the current leverage as temporary and expects it to decrease significantly after using cash to pay down debt [43]

Financial Performance - BlackRock TCP reported quarterly earnings of $0.42 per share, matching the Zacks Consensus Estimate, but down from $0.48 per share a year ago [1] - The company posted revenues of $71.53 million for the quarter ended June 2024, exceeding the Zacks Consensus Estimate by 1.61% and up from $53.96 million year-over-year [2] - Over the last four quarters, BlackRock TCP has surpassed consensus revenue estimates three times [2] Stock Performance - BlackRock TCP shares have declined approximately 13.8% since the beginning of the year, contrasting with the S&P 500's gain of 9.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $70.11 million, and for the current fiscal year, it is $1.71 on revenues of $265.43 million [7] - The estimate revisions trend for BlackRock TCP is mixed, which may change following the recent earnings report [6] Industry Context - The Financial - SBIC & Commercial Industry, to which BlackRock TCP belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Performance - Net investment income for Q2 2024 was $35.8 million, or $0.42 per share, exceeding the regular dividend of $0.34 per share[2] - Adjusted net investment income for Q2 2024 was $32.1 million, or $0.38 per share, compared to $27.6 million, or $0.48 per share in Q2 2023[4] - Total investment income for Q2 2024 was approximately $71.5 million, or $0.84 per share[10] - Net decrease in net assets resulting from operations for Q2 2024 was $51.3 million, or $0.60 per share[12] - Basic and diluted earnings (loss) per share for the three months ended June 30, 2024, was $(0.60), compared to $0.28 for the same period in 2023, indicating a decline in earnings per share[22] Assets and Liabilities - Net asset value per share decreased to $10.20 as of June 30, 2024, down from $11.14 at March 31, 2024[2] - Total assets increased to $2,218.7 million as of June 30, 2024, compared to $1,698.8 million as of December 31, 2023[20] - Net assets applicable to common shareholders rose to $873.1 million as of June 30, 2024, from $687.6 million at the end of 2023[20] - Total debt outstanding as of June 30, 2024, was $1,320.3 million, an increase from $985.2 million as of December 31, 2023[20] - The weighted-average interest rate on debt outstanding was 5.00% as of June 30, 2024[14] Investment Activity - Total acquisitions in Q2 2024 were approximately $129.7 million, while total investment dispositions were $185.0 million[2] - The weighted average annual effective yield of the debt portfolio was approximately 13.7% as of June 30, 2024[7] - The company reported a change in unrealized appreciation of $21.3 million for the six months ended June 30, 2024, due to merger accounting[21] - Total investment income for the three months ended June 30, 2024, was $71,526,225, an increase from $53,960,838 for the same period in 2023, representing a growth of approximately 32.6%[22] - Net investment income before taxes for the three months ended June 30, 2024, was $35,825,532, compared to $27,604,479 for the same period in 2023, reflecting a year-over-year increase of about 29.5%[22] Operating Expenses - Total operating expenses for Q2 2024 were approximately $35.7 million, or $0.42 per share[11] - Total operating expenses for the three months ended June 30, 2024, were $35,700,693, up from $26,356,359 in the same period of 2023, indicating a rise of approximately 35.5%[22] Dividends and Shareholder Returns - The company declared a third quarter dividend of $0.34 per share, payable on September 30, 2024[2] - For the three months ended June 30, 2024, approximately $0.8 million of cash distributions were reinvested under the new dividend reinvestment plan[14] - The company has a stock repurchase plan to acquire up to $50.0 million of its common stock, although no shares were repurchased during the three months ended June 30, 2024[17] Risk Management and Strategy - The company focuses on direct lending to middle-market companies and small businesses, aiming for high total returns through current income and capital appreciation[23] - The company emphasizes principal protection in its investment strategy, aiming to mitigate risks associated with its lending activities[23] - Forward-looking statements highlight potential risks including changes in economic conditions, interest rates, and regulatory changes that could impact future performance[24] Management and Regulation - BlackRock TCP Capital Corp. is externally managed by a wholly-owned, indirect subsidiary of BlackRock, Inc., ensuring professional management of its investment portfolio[23] - The company is regulated under the Investment Company Act of 1940, which provides a framework for its operations and investment strategies[23] Portfolio Quality - Debt investments on non-accrual status represented 4.9% of the portfolio at fair value and 10.5% at cost as of June 30, 2024[7] - The net change in unrealized appreciation (depreciation) for the three months ended June 30, 2024, was $(51,588,119), compared to $(10,959,165) for the same period in 2023, showing a significant increase in depreciation[22]

| --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | BlackRock TCP Capital Corp. Investor presentation March 31, 2024 | | | | | | | | | | | | | Continued strong financial performance Declared a second quarter dividend of $0.34 per share, payable on June 28, to shareholders of record as of the close of business on June 14 91% invested in senior secured debt; ...

Financial Data and Key Metrics - Adjusted net income for Q1 2024 was $0.45 per share, up from $0.44 in the prior quarter [13] - Annualized net investment income (NII) return on equity for the quarter was 14.7% [13] - NAV declined by 6.4% in Q1 2024, primarily due to unrealized losses on investments in Thrasio, Razor, and Edmentum [14] - The company declared a Q2 dividend of $0.34 per share, implying 132% NII coverage based on Q1 adjusted NII [24] Business Line Data and Key Metrics - The portfolio consists of investments in 157 companies, with an average investment of $13.5 million per company [36] - 91% of investments are senior secured debt, with 80% being first-lien and 97% floating rate [37] - The overall effective yield on the debt portfolio is 14.1%, with new investments in Q1 having a weighted average effective yield of 14.7% [38] - The company invested $20 million in Q1, primarily in senior secured loans, with $24 million in dispositions and payoffs [28][33] Market Data and Key Metrics - The portfolio fair market value at the end of Q1 was approximately $2.1 billion [36] - The company has a diversified portfolio across industries, with 75% of portfolio companies contributing less than 1% to recurring income [37] - The company expects further consolidation and cost optimization in the Amazon aggregator space, with fewer but larger-scale vendors emerging [19][20] Company Strategy and Industry Competition - The merger with BCIC has provided greater scale, lower fee structures, and more efficient access to capital [12] - The company focuses on middle-market companies with established business models and proven customer bases, emphasizing downside protection [28][29] - The company sees emerging opportunities in M&A as interest rates stabilize and valuations for higher-quality assets narrow [30] - The company’s industry specialization enhances risk assessment and deal sourcing capabilities, particularly in the middle market [31][49] Management Commentary on Operating Environment and Future Outlook - The company expects a slower growth and elevated rate environment for the foreseeable future, with potential macroeconomic volatility [39] - The direct lending market has seen increased bifurcation, with more borrower-friendly trends in the upper middle market, but the core middle market remains resilient [40][41] - The company remains optimistic about near- to intermediate-term M&A activity, driven by pent-up demand and lower debt service costs [30][76] Other Important Information - The company’s total liquidity increased to $409 million at the end of Q1, with $286 million in available leverage and $121 million in cash [46] - Net leverage excluding SBIC debt is 1.08x, within the target range of 0.9x to 1.2x [47] - The company has five portfolio companies on non-accrual, representing 1.7% of the portfolio at fair value and 3.6% at cost [52] Q&A Session Summary Question: Thrasio Bankruptcy Valuation - The bankruptcy process for Thrasio was finalized after Q1, and the valuation may differ from the mark due to strategic considerations in the bankruptcy process [61][62][63] - The company maintains rigorous valuation processes and expects volatility in marks during restructuring [65][66][67] Question: Market Activity and Interest Rates - The company expects M&A activity to pick up as rates stabilize, but moderates expectations due to the current yield curve [73][74][75] - Market participants are actively pre-marketing deals, and institutional investors are pressuring GPs for distributions, which could drive activity [76][77] Question: Portfolio Flexibility and Non-LBO Deals - The company has historically shown flexibility in deal types, including ABL financing and leasing, and expects to continue exploring such opportunities [79][80][81] - The merger with BCIC provides greater scale to pursue less traditional deal types [81] Question: Debt Refinancing and Funding Costs - The company plans to address upcoming debt maturities in the near term, leveraging its investment-grade rating and favorable capital market conditions [83][91][92] - Moody’s outlook change on private credit may impact funding costs, but the company’s long-established rating provides stability [92][93] Question: Software and ARR Exposure - The company’s software portfolio is diversified across end markets, with ARR being a subset of its software exposure [99][100][101] - Software exposure is viewed as less correlated but more susceptible to end-market risks [102]

Financial Performance - For Q1 2024, BlackRock TCP Capital Corp. reported net investment income of $28.3 million, or $0.46 per share, exceeding the regular dividend of $0.34 per share[2]. - Total investment income for Q1 2024 was approximately $55.7 million, or $0.90 per share, with a weighted average effective yield of the debt portfolio at approximately 14.1%[12][8]. - The net increase in net assets from operations for Q1 2024 was $5.1 million, or $0.08 per share, compared to $13.3 million, or $0.23 per share, for the previous quarter[2]. - Net investment income before taxes for Q1 2024 was $28,261,273, compared to $25,408,567 in Q1 2023, reflecting a growth of 7.3%[28]. - Basic and diluted earnings per share decreased to $0.08 in Q1 2024 from $0.39 in Q1 2023[28]. - Total investment income for Q1 2024 was $55,729,309, an increase of 10.4% from $50,308,350 in Q1 2023[28]. - Total operating expenses for Q1 2024 were approximately $27.5 million, or $0.44 per share, with annualized expenses at 4.4% of average net assets[13]. - Total operating expenses rose to $27,468,036 in Q1 2024, up 10.3% from $24,899,783 in Q1 2023[28]. Asset and Investment Overview - As of March 31, 2024, net asset value per share decreased to $11.14 from $11.90 at December 31, 2023[2]. - The company’s consolidated investment portfolio consisted of debt and equity positions in 157 portfolio companies with a total fair value of approximately $2.1 billion[7]. - Total investments at fair value were $2,116,419,296 as of March 31, 2024, up from $1,554,941,110 at the end of 2023[26]. - Net assets increased to $953,482,427 as of March 31, 2024, compared to $687,601,546 at the end of 2023, reflecting improved financial health[26]. - Total assets increased to $2,283,532,138 as of March 31, 2024, compared to $1,698,772,353 at the end of 2023, indicating strong growth in the asset base[26]. Debt and Leverage - Total debt outstanding as of March 31, 2024, was $1,302,812,708, an increase from $985,200,609 as of December 31, 2023, reflecting a significant rise in leverage[26]. - The combined weighted-average interest rate on debt outstanding was 5.08% as of March 31, 2024[15]. - The weighted-average interest rate on debt, excluding fees, was approximately 2.52% as of March 31, 2024[18]. - Debt investments on non-accrual status represented 1.7% of the portfolio at fair value and 3.6% at cost as of March 31, 2024[8]. Corporate Actions and Dividends - The company completed the acquisition of BlackRock Capital Investment Corporation on March 18, 2024, resulting in total acquisitions of approximately $607.0 million for the quarter[2]. - The company completed its merger with BCIC on March 18, 2024, resulting in BCIC's corporate existence ceasing and becoming an indirect wholly-owned subsidiary[21]. - The Board of Directors declared a second quarter dividend of $0.34 per share, payable on June 28, 2024, to stockholders of record as of June 14, 2024[23]. - The company has a new dividend reinvestment plan (DRIP) effective from March 18, 2024, allowing shareholders to reinvest dividends into additional shares[17]. - The management fee rate was reduced from 1.50% to 1.25% on assets equal to or below 200% of the net asset value following the merger[22]. - The company has a stock repurchase plan to acquire up to $50.0 million of its common stock, although no shares were repurchased during the three months ended March 31, 2024[19][20]. Market and Economic Outlook - The company focuses on direct lending to middle-market companies and small businesses, aiming for high total returns through current income and capital appreciation[29]. - The company is externally managed by a wholly-owned subsidiary of BlackRock, Inc., ensuring alignment with investment objectives[29]. - Forward-looking statements indicate potential risks including changes in economic conditions, interest rates, and regulatory changes that could impact future performance[31].

Financial Structure and Leverage - The Company has a leverage program consisting of $300 million in available debt under a revolving credit facility, $200 million under a senior secured revolving credit facility, and $250 million in senior unsecured notes maturing in 2024, among other debt instruments [273]. - Total leverage outstanding as of March 31, 2024, included $160.0 million subject to a SOFR credit adjustment of 0.11% [328]. - The total leverage as of March 31, 2024, was $1.3 billion, with $286 million available for borrowing [331]. - As of March 31, 2024, the company's asset coverage ratio was 182%, down from the previous requirement of 200% to 150% approved by shareholders [331]. - The company is in compliance with all financial and operational covenants required by its Leverage Program as of March 31, 2024 [337]. Investment Strategy and Portfolio - The Company’s investment strategy focuses on achieving high total returns through current income and capital appreciation, primarily investing in the debt of middle-market companies [272]. - As of March 31, 2024, 81.4% of the Company's total assets were invested in qualifying assets, which include securities and indebtedness of private U.S. companies [278]. - As of March 31, 2024, the consolidated investment portfolio was valued at $2,116.4 million, with 92.3% invested in debt investments, primarily senior secured debt [303]. - During the three months ended March 31, 2024, the company invested approximately $607.0 million, with 95.8% in senior secured loans [300]. - The portfolio consisted of 157 companies, with the largest investment representing approximately 4.7% of the total portfolio [303]. - The industry composition of the portfolio included 13.3% in Diversified Financial Services and 13.3% in Internet Software and Services as of March 31, 2024 [305]. - Debt investments in five portfolio companies were on non-accrual status as of March 31, 2024, representing 1.7% of the portfolio at fair value [307]. - As of March 31, 2024, 98.5% of investments were categorized as Level 3, indicating reliance on unobservable inputs for valuation [294]. Revenue and Income - The Company generated revenues primarily from interest on debt investments, with expected maturities generally between three to five years [279]. - Investment income for the three months ended March 31, 2024, totaled $55.7 million, an increase from $50.3 million in the same period of 2023, primarily due to higher interest income from increased SOFR rates [308]. - Net investment income increased to $28.3 million in Q1 2024 from $25.4 million in Q1 2023, reflecting higher total investment income [310]. - Adjusted net investment income for Q1 2024 was $27.7 million, compared to $25.4 million in Q1 2023, reflecting the exclusion of purchase accounting discount amortization [321]. - The change in net unrealized depreciation for Q1 2024 was $(23.0) million, compared to an appreciation of $28.0 million in Q1 2023, driven by losses in several investments [312]. Expenses and Dividends - The Company’s operating expenses include management fees, administration fees, and costs related to its investment activities [280]. - Total operating expenses for Q1 2024 were $27.5 million, up from $24.9 million in Q1 2023, primarily due to increased interest expenses and incentive fees [309]. - The company paid $26.9 million in dividends to common shareholders during the three months ended March 31, 2024 [335]. - A regular dividend of $0.34 per share was declared for the second quarter, payable on June 28, 2024, to shareholders of record as of June 14, 2024 [351]. - The company has a new dividend reinvestment plan effective from March 18, 2024, allowing shareholders to reinvest dividends into additional shares [323]. Mergers and Agreements - The Company completed a Merger with BCIC on March 18, 2024, resulting in the issuance of 27,823,870 shares of its common stock to former BCIC shareholders [275]. - The Merger Agreement included an Exchange Ratio of 0.3834 shares of the Company's common stock for each outstanding share of BCIC's common stock [275]. - The company completed a merger with BCIC on March 18, 2024, which was treated as a tax-free reorganization [316]. - The company has entered into a royalty-free license agreement with BlackRock and the Advisor for the use of their names [350]. Economic Conditions and Risks - Unfavorable economic conditions may impact the company's ability to raise capital and could limit its investment opportunities [338]. - The impact of interest rate changes on net investment income is significant, with potential material adverse effects from significant market rate fluctuations [353]. - The Company assesses portfolio companies periodically to ensure they can meet interest payments amid potential interest rate increases [353]. Interest Rate Sensitivity - At March 31, 2024, 97.1% of debt investments bore interest based on floating rates, with 92.1% of those subject to an interest rate floor [307]. - Interest rate sensitivity indicates that a 300 basis point increase could result in a net investment income of $42,135,914, equating to $0.61 per share [355]. - A 200 basis point increase in interest rates would yield a net investment income of $28,090,610, or $0.41 per share [355]. - A 100 basis point increase would generate $14,045,305 in net investment income, translating to $0.20 per share [355]. - Conversely, a 100 basis point decrease would lead to a loss of $14,045,305, or $(0.20) per share [355].

BlackRock TCP Capital Corporation (NASDAQ:TCPC) Q4 2023 Earnings Conference Call February 29, 2024 1:00 PM ET Company Participants Kathleen McGlynn - IR Rajneesh Vig - Chairman & CEO Erik Cuellar - CFO Philip Tseng - President & COO Conference Call Participants Christopher Nolan - Ladenburg Thalman Paul Johnson - KBW Robert Dodd - Raymond James Operator Ladies and gentlemen, good afternoon. Welcome, everyone, to BlackRock TCP Capital Corp's Fourth Quarter and Full Year 2023 Earnings Conference Call. Today's ...

[Financial Highlights and Executive Summary](index=1&type=section&id=Financial%20Highlights%20and%20Executive%20Summary) This section summarizes BlackRock TCP Capital Corp.'s Q4 and full-year 2023 financial performance, key metrics, and strategic outlook, including the pending merger [Q4 & Full Year 2023 Performance Overview](index=1&type=section&id=Q4%20%26%20Full%20Year%202023%20Performance%20Overview) The company reported solid Q4 and full-year 2023 financial results, with strong net investment income growth and consistent dividend coverage - Generated solid net investment income in Q4 2023, contributing to a strong year with **20% NII growth** and a **14.5% net investment income return on equity**[3](index=3&type=chunk) - Achieved **47 consecutive quarters of dividend coverage**, with Q4 2023 net investment income of **$0.44 per share** exceeding the regular dividend of **$0.34 per share**[4](index=4&type=chunk) - Net asset value (NAV) per share declined to **$11.90** at December 31, 2023, from **$12.72** at September 30, 2023, primarily due to unrealized losses on three idiosyncratic portfolio positions[3](index=3&type=chunk)[4](index=4&type=chunk) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Key financial metrics for Q4 and full-year 2023 highlight strong NII, a decline in NAV, active investment management, and stable dividend declarations Key Financial Metrics Table | Metric | Q4 2023 | Full Year 2023 | | :--------------------------------- | :-------------------- | :-------------------- | | Net Investment Income (NII) (million USD / share) | $25.3 million ($0.44/share) | $106.6 million ($1.84/share) | | Net Asset Value (NAV) per share (USD) | $11.90 (as of Dec 31, 2023) | $11.90 (as of Dec 31, 2023) | | Net Decrease in Net Assets from Operations (million USD / share) | $13.3 million ($0.23/share) | $38.5 million ($0.67/share) (Net Increase) | | Total Acquisitions (million USD) | $40.6 million | $226.1 million | | Total Dispositions (million USD) | $42.2 million | $218.7 million | | Loans on Non-Accrual Status (Fair Value) (%) | 2.0% of portfolio | 2.0% of portfolio | | Loans on Non-Accrual Status (Cost) (%) | 3.7% of portfolio | 3.7% of portfolio | | Q1 2024 Dividend Declared (USD / share) | $0.34 per share | N/A | [Strategic Initiatives & Outlook](index=1&type=section&id=Strategic%20Initiatives%20%26%20Outlook) The company maintains solid credit quality, focuses on selective investments, and expects its merger with BCIC to close in Q1 2024, creating scale and NII accretion - Overall credit quality is **solid**, and the company is well-positioned to execute its strategy of selectively investing in compelling, new opportunities[5](index=5&type=chunk) - The proposed merger with BlackRock Capital Investment Corporation (BCIC) is anticipated to close in **Q1 2024**, creating substantial scale, operational cost synergies, better access to capital, and is expected to be **accretive to NII**[4](index=4&type=chunk)[5](index=5&type=chunk) [Portfolio and Investment Activity](index=3&type=section&id=Portfolio%20and%20Investment%20Activity) This section details the company's investment portfolio composition, including asset types, fair value, non-accrual status, and investment and disposition activities [Portfolio Composition](index=3&type=section&id=Portfolio%20Composition) As of December 31, 2023, the investment portfolio comprised 142 companies with a fair value of approximately **$1.6 billion**, primarily senior secured debt and floating rate investments Portfolio Composition Table | Metric | Value/Percentage (as of Dec 31, 2023) | | :--------------------------------- | :------------------------------------ | | Total Fair Value of Portfolio (billion USD) | Approximately $1.6 billion | | Number of Portfolio Companies | 142 | | Senior Secured Debt (% of total portfolio) | 89.3% of total portfolio | | First Lien Debt (% of total portfolio) | 77.6% of total portfolio | | Equity Positions (% of total portfolio) | Approximately 10.7% of total portfolio | | Floating Rate Debt Investments (% of debt investments) | 95.6% of debt investments | | Floating Rate Debt with Interest Rate Floors (% of floating rate debt) | 94.0% of floating rate debt | | Weighted Average Annual Effective Yield (Debt Portfolio) (%) | 14.1% | | Weighted Average Annual Effective Yield (Total Portfolio) (%) | 13.3% | - Debt investments in four portfolio companies were on non-accrual status, representing **2.0% of the portfolio at fair value** and **3.7% at cost**, including the loan to Thras.io placed on non-accrual during Q4[4](index=4&type=chunk)[7](index=7&type=chunk) [Investment Activity & Yields](index=3&type=section&id=Investment%20Activity%20%26%20Yields) During Q4 2023, the company actively managed its portfolio with **$40.6 million** in new investments and **$42.2 million** in dispositions, focusing on high current income and principal protection Investment Activity & Yields Table | Metric | Q4 2023 | | :--------------------------------- | :-------------------- | | Total Investments Made (million USD) | $40.6 million | | Primary Investment Type | Senior secured loans (91.4% of acquisitions) | | Proceeds from Sales/Repayments (million USD) | $42.2 million | | Weighted Average Effective Yield (New Investments) (%) | 13.4% | | Weighted Average Effective Yield (Exited Investments) (%) | 12.5% | - The company's investment strategy emphasizes obtaining a **high level of current income** with an emphasis on **principal protection**, primarily through senior secured loans, bonds, and subordinated debt, as well as select equity investments[8](index=8&type=chunk) [Asset and Net Asset Value](index=3&type=section&id=Asset%20and%20Net%20Asset%20Value) Total assets remained stable at **$1.7 billion**, while net assets and net asset value per share decreased from the prior quarter Asset and Net Asset Value Table | Metric | Dec 31, 2023 | Sep 30, 2023 | | :-------------------- | :-------------------- | :-------------------- | | Total Assets (billion USD) | $1.7 billion | $1.7 billion | | Net Assets (million USD) | $687.6 million | $735.0 million | | Net Asset Value per Share (USD) | $11.90 | $12.72 | [Consolidated Results of Operations](index=3&type=section&id=Consolidated%20Results%20of%20Operations) This section presents the company's investment income, operating expenses, net investment income, and the impact of realized and unrealized gains and losses on net assets [Investment Income](index=3&type=section&id=Investment%20Income) Total investment income for Q4 2023 was **$50.8 million** (**$0.88 per share**), primarily from interest income, recurring original issue discount, and PIK income Investment Income Table | Income Source | Q4 2023 (per share) | | :--------------------------------- | :-------------------- | | Total Investment Income (USD / share) | $0.88 | | Recurring Original Issue Discount & Exit Fee Amortization (USD / share) | $0.04 | | Interest Income Paid in Kind (PIK) (USD / share) | $0.06 | | Dividend Income (USD / share) | $0.02 | | Other Income (USD / share) | $0.00 | [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Total operating expenses for Q4 2023 were **$25.6 million** (**$0.44 per share**), with interest and incentive compensation as major components, and annualized expenses at **4.5%** of average net assets Operating Expenses Table | Expense Category | Q4 2023 (per share) | | :--------------------------------- | :-------------------- | | Total Operating Expenses (USD / share) | $0.44 | | Interest and Other Debt Expenses (USD / share) | $0.20 | | Incentive Compensation from Net Investment Income (USD / share) | $0.09 | | Annualized Expenses (excl. incentive comp, interest/debt) (% of average net assets) | 4.5% of average net assets | [Net Investment Income and Net Assets Changes](index=3&type=section&id=Net%20Investment%20Income%20and%20Net%20Assets%20Changes) Net investment income for Q4 2023 was **$25.3 million** (**$0.44 per share**), offset by **$38.6 million** (**$0.67 per share**) in net unrealized losses, resulting in a net decrease in net assets from operations Net Investment Income and Net Assets Changes Table | Metric | Q4 2023 | | :--------------------------------- | :-------------------- | | Net Investment Income (million USD / share) | $25.3 million ($0.44/share) | | Net Realized Losses (million USD / share) | $0.0 million ($0.00/share) | | Net Unrealized Losses (million USD / share) | $38.6 million ($0.67/share) | | Net Decrease in Net Assets from Operations (million USD / share) | $13.3 million ($0.23/share) | - Key drivers of net unrealized losses included investments in Edmentum (**$13.8 million**), Thras.io (**$8.6 million**), Aventiv Technologies (Securus) (**$5.4 million**), Astra Acquisition (**$2.4 million**), and Nephron (**$2.3 million**)[12](index=12&type=chunk)[13](index=13&type=chunk) [Liquidity and Capital Resources](index=5&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's liquidity position, debt structure, and share repurchase program, highlighting available capital and financing arrangements [Liquidity Position](index=5&type=section&id=Liquidity%20Position) As of December 31, 2023, the company maintained approximately **$359.0 million** in available liquidity, comprising cash and available capacity under its leverage program Liquidity Position Table | Metric | Amount (as of Dec 31, 2023) | | :--------------------------------- | :-------------------------- | | Total Available Liquidity (million USD) | $359.0 million | | Available Capacity under Leverage Program (million USD) | $246.8 million | | Cash and Cash Equivalents (million USD) | $112.2 million | [Debt Structure](index=5&type=section&id=Debt%20Structure) Total debt outstanding at December 31, 2023, was **$988.6 million** (carrying value) with a **4.29%** weighted-average interest rate, comprising various facilities and notes Debt Structure Table | Debt Instrument | Maturity | Rate | Carrying Value (Dec 31, 2023) (USD) | Available Capacity (USD) | | :------------------------ | :--------- | :--------- | :---------------------------- | :------------------- | | Operating Facility | 2026 | SOFR+2.00% | $163,168,808 | $136,831,192 | | Funding Facility II | 2027 | SOFR+2.05% | $100,000,000 | $100,000,000 | | SBA Debentures | 2024−2031 | 2.52% | $150,000,000 | $10,000,000 | | 2024 Notes | 2024 | 3.900% | $249,596,009 | — | | 2026 Notes | 2026 | 2.850% | $325,791,013 | — | | **Total Leverage** | | | **$988,555,830** | **$246,831,192** | | Weighted-Average Interest Rate on Debt Outstanding (%) | | 4.29% | | | [Share Repurchase Program](index=5&type=section&id=Share%20Repurchase%20Program) The Board re-approved a stock repurchase plan for up to **$50.0 million** of common stock, though no shares were repurchased during Q4 or the full year 2023 - The Board re-approved a stock repurchase plan to acquire up to **$50.0 million** of common stock at prices below net asset value per share[18](index=18&type=chunk) - No shares were repurchased during the three months or year ended December 31, 2023[18](index=18&type=chunk) [Merger Agreement](index=5&type=section&id=Merger%20Agreement) This section details the merger agreement with BlackRock Capital Investment Corporation (BCIC), including its status, approvals, expected closing, and post-merger advisor fee structure [Merger Details and Status](index=5&type=section&id=Merger%20Details%20and%20Status) The company's merger agreement with BCIC, updated **January 10, 2024**, is board-approved and anticipated to close in **Q1 2024**, pending stockholder and regulatory approvals - The Merger Agreement with BlackRock Capital Investment Corporation (BCIC) was initially entered into on **September 6, 2023**, and an Amended and Restated Agreement was entered into on **January 10, 2024**[4](index=4&type=chunk)[19](index=19&type=chunk) - The merger has been approved by both companies' Boards of Directors, including independent directors, and is subject to stockholder and customary regulatory approvals[19](index=19&type=chunk)[21](index=21&type=chunk) - The transaction is currently anticipated to close during the **first calendar quarter of 2024**[4](index=4&type=chunk)[21](index=21&type=chunk) [Post-Merger Advisor Fee Structure](index=6&type=section&id=Post-Merger%20Advisor%20Fee%20Structure) Upon merger closing, the Advisor will reduce its base management fee rate from **1.50% to 1.25%** on assets up to **200% of net asset value**, maintaining **1.00%** for assets above this threshold - Subject to the closing of the Merger, the Advisor has agreed to reduce its base management fee rate from **1.50% to 1.25%** on assets equal to or below **200% of the net asset value** of the Company[22](index=22&type=chunk) - The base management fee rate on assets exceeding **200% of net asset value** will remain **1.00%**, with no change to the basis of calculation[22](index=22&type=chunk) [Recent Developments](index=6&type=section&id=Recent%20Developments) This section highlights recent key events, specifically the declaration of the first quarter dividend [Dividend Declaration](index=6&type=section&id=Dividend%20Declaration) The Board of Directors declared a first quarter dividend of **$0.34 per share**, payable on **March 29, 2024** Dividend Declaration Table | Dividend | Amount (USD) | Payable Date | Record Date | | :-------------------- | :------- | :----------- | :---------- | | Q1 2024 Dividend (USD / share) | $0.34/share | March 29, 2024 | March 14, 2024 | [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents the company's consolidated statements of assets and liabilities and operations for recent fiscal years [Consolidated Statements of Assets and Liabilities](index=7&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) The Consolidated Statements of Assets and Liabilities detail the company's financial position at year-end 2023 and 2022, including investments, cash, debt, and net assets Consolidated Statements of Assets and Liabilities Table | Item | December 31, 2023 | December 31, 2022 | | :------------------------------------------ | :-------------------- | :-------------------- | | **Assets** | | | | Total investments, at fair value (USD) | $1,554,941,110 | $1,609,587,641 | | Cash and cash equivalents (USD) | $112,241,946 | $82,435,171 | | Total assets (USD) | $1,698,772,353 | $1,719,349,849 | | **Liabilities** | | | | Debt (net of deferred issuance costs) (USD) | $985,200,609 | $944,005,814 | | Total liabilities (USD) | $1,011,170,807 | $972,596,059 | | **Net Assets** | | | | Total net assets (USD) | $687,601,546 | $746,753,790 | | Net assets per share (USD) | $11.90 | $12.93 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations present the company's financial performance for 2021-2023, highlighting investment income, operating expenses, and net changes in net assets Consolidated Statements of Operations Table | Item | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :------------------------------------------ | :---------------------- | :---------------------- | :---------------------- | | Total investment income (USD) | $209,328,883 | $181,002,459 | $165,105,708 | | Total operating expenses (USD) | $102,524,810 | $92,564,286 | $92,562,594 | | Net investment income (USD) | $106,556,758 | $88,438,173 | $72,543,114 | | Net realized gain (loss) (USD) | $(31,648,232) | $(18,230,951) | $4,287,643 | | Net change in unrealized appreciation (depreciation) (USD) | $(36,434,094) | $(79,432,554) | $63,166,306 | | Net increase (decrease) in net assets resulting from operations (USD) | $38,474,432 | $(9,225,332) | $133,790,774 | | Basic and diluted earnings (loss) per share (USD) | $0.67 | $(0.16) | $2.32 | [Company Information](index=9&type=section&id=Company%20Information) This section provides an overview of BlackRock TCP Capital Corp., its investment objectives, forward-looking statement disclaimers, and contact information [About BlackRock TCP Capital Corp.](index=9&type=section&id=About%20BlackRock%20TCP%20Capital%20Corp.) BlackRock TCP Capital Corp. is a specialty finance BDC focused on direct lending to middle-market and small businesses, seeking high total returns via current income and capital appreciation with principal protection - BlackRock TCP Capital Corp. (NASDAQ: TCPC) is a specialty finance company and a publicly-traded Business Development Company (BDC) regulated under the Investment Company Act of 1940[29](index=29&type=chunk) - The company focuses on direct lending to middle-market and small businesses, investing across industries where it has significant knowledge and expertise[29](index=29&type=chunk) - Its investment objective is to achieve **high total returns** through current income and capital appreciation, with an emphasis on **principal protection**[29](index=29&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section disclaims forward-looking statements, indicating actual results may differ due to economic, financing, interest rate, regulatory, and merger-related risks - Forward-looking statements are based on management's estimates, projections, beliefs, and assumptions and are not guarantees of future performance, involving risks and uncertainties[31](index=31&type=chunk) - Actual results could differ materially due to factors such as changes in economic conditions, financing availability, interest rates, regulatory changes, and specific risks detailed in the company's Form 10-K[31](index=31&type=chunk) - Merger-related risks include uncertainties regarding timing, expected synergies, ability to realize benefits, stockholder approval, competing offers, and other closing conditions[31](index=31&type=chunk) [Contact Information](index=10&type=section&id=Contact%20Information) Contact details for BlackRock TCP Capital Corp. investor relations are provided for inquiries - For investor relations inquiries, contact Katie McGlynn at **310-566-1094** or **investor.relations@tcpcapital.com**[33](index=33&type=chunk)