Runway Growth Finance (US:RWAY)2024-11-12 21:00Dividend and Share Repurchase - The Board of Directors declared a regular distribution of $0.40 per share for stockholders, payable on or before December 2, 2024[207]. - The Company repurchased 528,305 shares under the Third Repurchase Program from October 1, 2024, through November 11, 2024[207]. - The company repurchased 1,961,938 shares for an aggregate purchase price of $23.5 million under the Second Repurchase Program, which expired on November 2, 2024[260]. - The company declared and paid dividends of $17.3 million and $54.9 million for the three and nine months ended September 30, 2024, respectively[263]. Investment Portfolio - As of September 30, 2024, the Company had investments in 57 portfolio companies, an increase from 52 companies at December 31, 2023[216]. - The fair value of total investments as of September 30, 2024, was $1,066.1 million, compared to $1,067.0 million at December 31, 2023[217]. - The ending investment portfolio as of September 30, 2024, was $1,066.1 million, slightly up from $1,010.9 million as of September 30, 2023[220]. - The company funded $151.4 million in five new portfolio companies during the nine months ended September 30, 2024, compared to $19.8 million in one new portfolio company in the same period of 2023[219]. - The company received $144.7 million in sales and prepayments from five portfolio companies during the nine months ended September 30, 2024, compared to $225.7 million from ten portfolio companies in the same period of 2023[219]. - As of September 30, 2024, two senior secured term loans were on non-accrual status, representing 3.7% of the total investment portfolio[224]. - The investment rating system showed that 59.55% of the debt investments were rated as Category 2 as of September 30, 2024, compared to 57.41% as of December 31, 2023[223]. - The total purchases of investments during the nine months ended September 30, 2024, were $174.0 million, compared to $105.5 million in the same period of 2023[220]. - The company recorded a net change in unrealized loss on investments of $3.7 million for the nine months ended September 30, 2024[220]. - The company had a net investment income of $0.3 million related to the senior secured term loans on non-accrual status as of September 30, 2024[224]. Financial Performance - Investment income for the three months ended September 30, 2024, was $36.7 million, down from $43.8 million in the same period of 2023, reflecting a decrease of approximately 15.9%[229]. - For the nine months ended September 30, 2024, investment income totaled $110.9 million, compared to $125.0 million in 2023, representing a decline of about 11.6%[230]. - Net investment income for the three months ended September 30, 2024, was $15.9 million, a decrease of 27.7% from $22.0 million in 2023[238]. - Net investment income for the nine months ended September 30, 2024, was $49.1 million, down from $60.0 million in 2023, indicating a decrease of approximately 18.2%[239]. - Total operating expenses for the three months ended September 30, 2024, were $20.8 million, slightly down from $21.7 million in 2023[232]. - Total operating expenses for the nine months ended September 30, 2024, were $61.7 million, compared to $65.0 million in 2023, reflecting a decrease of about 5.1%[233]. - Management fees for the three months ended September 30, 2024, were $3.9 million, down from $4.3 million in 2023, a decrease of approximately 9.3%[234]. - Incentive fees for the three months ended September 30, 2024, were $4.0 million, compared to $5.5 million in 2023, a decline of about 27.3%[236]. Interest Rate and Financial Risk - The company expects to invest in loans ranging from $10.0 million to $100.0 million, with potential increases as additional capital is raised[227]. - The decrease in investment income is primarily attributed to falling interest rates and a reduction in the average outstanding principal on interest-earning debt investments due to loan repayments[229]. - A hypothetical 200 basis point increase in interest rates could increase the company's investment income by a maximum of $18.8 million annually[271]. - A hypothetical 200 basis point increase in interest rates on variable-rate debt investments could increase investment income by a maximum of $18.8 million annually, while a decrease could reduce it by a maximum of $14.4 million[271]. - Borrowings under the Credit Facility bear interest at a floating rate equal to SOFR plus an applicable margin rate ranging from 2.95% to 3.35% per annum, depending on the leverage ratio[272]. - The company regularly measures exposure to interest rate risk and manages it by comparing interest rate sensitive assets to liabilities[274]. - The company may hedge against interest rate and currency exchange rate fluctuations using standard hedging instruments, which may limit participation in benefits of lower interest rates[274]. - Financial market risks include changes in valuations of the investment portfolio due to interest rate fluctuations and other market changes[267]. - The company's net investment income is dependent on the difference between borrowing rates and investment rates, with rising interest rates potentially increasing costs[273]. - Changes in interest rates can affect the company's ability to acquire and originate loans and securities, impacting the value of the investment portfolio[270]. Liquidity and Capital Structure - As of September 30, 2024, the company had $251.6 million in available liquidity, including $3.6 million in cash and cash equivalents[251]. - The company had $549.3 million in debt outstanding as of September 30, 2024, with none due within the next year[254]. - The company had $260.4 million in unfunded commitments as of September 30, 2024, with $231.0 million allocated for debt financing to portfolio companies[256]. - As of September 30, 2024, the asset coverage ratio was 192%, indicating compliance with borrowing regulations[252]. Management and Structure - The Company is structured as a business development company (BDC) and a regulated investment company (RIC), complying with various regulatory requirements[212]. - The Company aims to maximize total return primarily through current income on its loan portfolio and secondarily through capital gains on warrants and equity positions[211]. - The Company is externally managed by Runway Growth Capital LLC, which provides investment advisory services[214]. - The dollar-weighted average remaining term of debt investments as of September 30, 2024, was approximately 2.8 years[217].