BlackRock TCP Capital (US:TCPC)2026-02-27 13:02Financial Position and Assets - 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 $325 million in senior unsecured notes maturing in 2026 and 2029[454]. - As of December 31, 2025, 83% of the Company's total assets were invested in qualifying assets, which include securities and indebtedness of private U.S. companies[461]. - The Company must comply with regulatory requirements, including investing at least 70% of total assets in qualifying assets[461]. - As of December 31, 2025, the consolidated investment portfolio was valued at $1,533.3 million, with 92.5% invested in debt investments, primarily senior secured debt[489]. - The five largest portfolio company investments by value comprised approximately 23.1% of the portfolio at December 31, 2025[489]. - The company categorized 99.9% of its investments as Level 3, valued based on valuations by independent third-party sources as of December 31, 2025[479]. Revenue and Income - The Company generates revenues primarily from interest on debt investments, with expected maturities generally between three to five years[462]. - Revenue recognition includes interest and dividend income recorded on an accrual basis when considered collectible[482]. - The total investment income was $201.8 million, a decrease from $259.4 million in 2024, primarily due to a decrease in portfolio size and lower SOFR rates[493]. - Net investment income for the year ended December 31, 2025 was $109.1 million, compared to $131.8 million in 2024, reflecting a decrease in total investment income[495]. - The weighted average effective yield of the debt portfolio based on fair value was 11.1% at December 31, 2025, down from 12.4% in 2024[492]. Expenses and Losses - The total operating expenses for the year ended December 31, 2025 were $92.0 million, down from $127.2 million in 2024, mainly due to a decrease in incentive fee expenses and interest expenses[494]. - The net realized loss for the year ended December 31, 2025 was $(278.1) million, significantly higher than $(67.1) million in 2024, primarily due to losses from restructuring investments[496]. - The change in net unrealized appreciation for the year ended December 31, 2025 was $80.1 million, contrasting with a depreciation of $(127.8) million in 2024[497]. Dividends and Distributions - The Company is required to distribute at least 90% of its investment company taxable income to qualify as a RIC, avoiding corporate level taxes on distributed income[455]. - The company declared total dividends of $1.12 per share for the year ended December 31, 2025, amounting to $95,168,075 in total[526]. - The company must distribute at least 90% of its ordinary income and short-term capital gains to maintain its qualification as a RIC[523]. Mergers and Acquisitions - The Company entered into a merger agreement with BCIC, resulting in the issuance of 27,823,870 shares of its common stock to former BCIC shareholders[457]. - The Company completed the acquisition of HPS Investment Partners, enhancing its investment management capabilities[459]. - The Company completed a merger with BCIC on March 18, 2024, which was a tax-free reorganization and allowed for the carry forward of the historical cost basis of acquired investments[502]. - The Company completed its merger with BCIC on March 18, 2024, accounting for it as an asset acquisition, resulting in a purchase discount due to the consideration paid being less than the fair value of BCIC's assets acquired[504]. Cash Flow and Financing Activities - Net cash provided by operating activities during the year ended December 31, 2025, was $154.9 million, primarily from $75.4 million in net investment income and $79.5 million from investment dispositions[517]. - Net cash used by financing activities was $185.4 million in 2025, mainly due to $95.2 million in dividends paid and $92.0 million in repayment of the 2025 Notes[518]. - The Company had $61.1 million in cash and cash equivalents as of December 31, 2025[519]. Interest Rate Sensitivity - Interest rate sensitivity indicates that changes in interest rates can significantly impact net investment income, particularly due to the company's reliance on borrowings for funding investments[539]. - A projected increase of 300 basis points in interest rates could result in a net investment income of $35,253,473, equating to $0.42 per share[541]. - A projected increase of 200 basis points in interest rates could lead to a net investment income of $23,500,719, or $0.28 per share[541]. - A projected increase of 100 basis points in interest rates may yield a net investment income of $11,747,965, translating to $0.14 per share[541]. - A decrease of 100 basis points in interest rates could result in a net investment loss of $(11,662,721), or $(0.14) per share[541]. - A decrease of 200 basis points in interest rates may lead to a net investment loss of $(22,533,062), equating to $(0.27) per share[541]. - A decrease of 300 basis points in interest rates could result in a net investment loss of $(28,119,897), or $(0.33) per share[541]. - The company assesses portfolio companies periodically to ensure they can meet interest payment obligations amid potential interest rate increases[539]. - There is no assurance that portfolio companies will meet contractual obligations under varying interest rate conditions[539]. - The projected amounts do not account for the impact of interest rate changes on the company's Interest Rate Swap[540]. Share Repurchase - The Company repurchased 515,869 shares at a weighted-average price of $5.84, totaling $3,011,382 in 2025, compared to 510,687 shares at $8.86, totaling $4,524,639 in 2024[512]. - The company repurchased 233,541 shares at a weighted average price of $5.50, totaling $1.3 million from January 1, 2026, to February 26, 2026[534].