Core Viewpoint - Crescent Capital BDC, Inc. reported its financial results for the quarter ended June 30, 2025, highlighting a net investment income of $0.46 per share and a net income of $0.41 per share, with a net asset value (NAV) per share of $19.55 [1][4]. Financial Performance - Net investment income for the second quarter was impacted by a one-time accelerated amortization of $0.02 per share related to deferred financing costs [1]. - Investment income increased to $43.0 million from $42.1 million in the previous quarter, with interest income rising to $40.1 million [6]. - Total net expenses for the quarter were $26.1 million, compared to $25.5 million in the previous quarter [7]. Dividend Declarations - The Board declared a regular cash dividend of $0.42 per share for the third quarter of 2025, payable on October 15, 2025 [2]. - A special dividend of $0.05 per share will be paid on September 15, 2025 [2]. Share Repurchase Program - The Board authorized a stock repurchase program to buy back up to $20.0 million of common stock in the open market [3]. Investment Portfolio - As of June 30, 2025, the company had investments in 187 portfolio companies with a fair value of $1,600.7 million [5]. - The portfolio comprised various asset types, with the largest being unitranche first lien loans at $1,043.6 million, representing 65.2% of the total investments [5]. Liquidity and Capital Resources - As of June 30, 2025, the company had $26.1 million in cash and cash equivalents and $227.2 million of undrawn capacity on its credit facilities [8]. - The weighted average cost of debt was 6.09%, and the debt to equity ratio stood at 1.23x [8].

Core Insights - Crescent Capital BDC reported net investment income of $0.46 per share and net income of $0.41 per share for the quarter ended June 30, 2025, with a net asset value (NAV) per share of $19.55 [1][4] Financial Performance - Total investment income increased to $43.0 million for the quarter ended June 30, 2025, compared to $42.1 million for the previous quarter [6] - Net investment income for the quarter was $16.9 million, slightly up from $16.6 million in the prior quarter [4][6] - The company experienced net realized losses of $2.9 million and a net change in unrealized gains of $1.0 million for the quarter [4][6] Dividend Declarations - The Board declared a regular cash dividend of $0.42 per share for the third quarter of 2025, payable on October 15, 2025 [2] - A special dividend of $0.05 per share will be paid on September 15, 2025 [2] Share Repurchase Program - The Board authorized a stock repurchase program to buy back up to $20.0 million of common stock in the open market [3] Investment Portfolio - As of June 30, 2025, the company had investments in 187 portfolio companies with a fair value of $1,600.7 million [5] - The portfolio consisted primarily of unitranche first lien loans, making up 65.2% of the total investments [5] Liquidity and Capital Resources - The company had $26.1 million in cash and cash equivalents and $227.2 million of undrawn capacity on its credit facilities as of June 30, 2025 [8] - The weighted average cost of debt was 6.09%, with a debt to equity ratio of 1.23x [8] Upcoming Events - A conference call to discuss the financial results for the quarter ended June 30, 2025, is scheduled for August 14, 2025 [9]

Core Insights - The article emphasizes the importance of a hybrid investment strategy that combines classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance investment income while achieving total returns comparable to traditional index funds [1]. Investment Strategy - The investment approach focuses on high-quality dividend stocks and assets that provide long-term growth potential, which can significantly contribute to income generation [1]. - The strategy aims to create a balanced portfolio that captures total returns on par with the S&P index, demonstrating the effectiveness of blending growth and income investments [1].

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net investment income before taxes of $800,000, or 6¢ per share, an increase of 1% from the previous quarter, representing an annualized return on equity of 4.3%, up approximately 80 basis points sequentially [5] - Net assets decreased modestly to $76,000,000, down $2,100,000 from the prior quarter, with net asset value per share decreasing to $5.27 from $5.42 [5][12] - The weighted average yield of the portfolio was 10.6%, a slight decrease from 11% in the previous quarter [13] Business Line Data and Key Metrics Changes - The portfolio consisted of 43 borrowers, with approximately 79% in first lien debt and 21% in equity warrants and other positions [13] - The weighted average net leverage declined to approximately 4.8 times from 4.9 times, while the weighted average loan-to-value (LTV) remained stable at approximately 46% [6] Market Data and Key Metrics Changes - Market spreads remained relatively stable throughout the quarter, with disciplined pricing across the middle market [8] - The company experienced a pickup in origination activity, with $19,000,000 in originations this quarter, up from $5,000,000 in the previous quarter [6] Company Strategy and Development Direction - The company remains focused on maintaining net asset value stability, delivering sustainable net investment income, and selectively deploying capital into high-quality opportunities with attractive risk-adjusted returns [18] - The board authorized a share repurchase program of up to $5,000,000, expected to be in effect until 08/07/2026 [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about renewed momentum in the middle market, with expectations for increased activity in the second half of the year [7][18] - The company is focused on resolving legacy credit issues and repositioning the portfolio to support long-term performance [8] Other Important Information - The company declared a distribution of 12¢ per share and a supplemental distribution of 2¢ per share payable in cash on 10/09/2025 [16] - As of June 30, the company had approximately $17,300,000 in cash, with $14,400,000 being restricted cash [17] Q&A Session Summary Question: What was the spillover income for the quarter? - The CFO indicated that the spillover income was a significant reason for the distribution to shareholders being in excess of the change in assets from operations, with net income before taxes at 6¢ a share [22] Question: What is the strategy to improve returns given high leverage and low profitability? - Management noted that improving profitability involves absorbing expenses across a broader asset base as the private credit business grows, while maintaining a cautious approach to leverage [24][27] Question: Should we expect portfolio contraction in coming quarters to reduce leverage? - Management expects repayments to increase in the second half of the year, which could lead to a deleveraging event if decent assets are not found to replace them [28] Question: Has the company considered wrapping up the BDC and converting to cash to improve returns? - Management emphasized that their primary focus is on improving shareholder value and stabilizing the portfolio before considering such actions [31]

Company Overview - Investcorp Credit Management BDC, Inc (ICMB) has a market capitalization of $403 million [15] - The investment portfolio stands at $2041 million at fair value [15] - The company's gross debt-to-equity ratio is 177x, while the net debt-to-equity ratio is 154x [15] - The annualized distribution yield is 2007%, based on declared distributions after June 30, 2025 [15] Portfolio Composition - Senior Secured First Lien Debt accounts for 7923% of the investment portfolio [21] - Equity/Warrants/Other investments represent 2077% of the portfolio [21] - The portfolio is diversified across various industries, including Professional Services, Insurance, and IT Services [17, 18] - Geographically, the portfolio is distributed across the West (2840%), Northeast (2743%), Southwest (1567%), Southeast (1300%), Midwest (1166%), and Mid-Atlantic (384%) regions [19, 20] Portfolio Activity & Financial Performance - Total capital invested in existing portfolio companies during the quarter was $190 million [23] - Total proceeds from repayments, sales, and amortization amounted to $102 million [23] - The weighted average yield on debt investments, at fair market value, was 1057% for the quarter ended June 30, 2025 [25]

Group 1 - The article discusses investment opportunities in two Business Development Companies (BDCs): Great Elm Capital Corporation (NASDAQ: GECC) and Capital Southwest [1] - The focus is on investments that can yield good profits in a short time frame [1] - The investing group Trade With Beta offers features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [1] Group 2 - The article emphasizes the importance of active investor participation and provides a platform for discussion among sophisticated traders and investors [1] - There is a mention of a beneficial long position in the shares of GECC, indicating a positive outlook on the stock [1]

Group 1 - Business Development Companies (BDCs) remain attractive for investors due to the higher interest rate environment, but many are beginning to experience pressure from these elevated rates [1] - Stellus Capital Investment Corporation is highlighted as a specific example within the BDC sector [1] - A hybrid investment strategy combining classic dividend growth stocks, BDCs, REITs, and Closed-End Funds can enhance investment income while achieving total returns comparable to traditional index funds like the S&P [1]

Group 1 - Morgan Stanley Direct Lending Fund (NYSE: MSDL) reported disappointing Q2 earnings, raising concerns despite the backing of a major firm like Morgan Stanley [1] - The fund's performance highlights the challenges faced by Business Development Companies in the current market environment [1] Group 2 - The article emphasizes the importance of a diversified investment strategy, combining dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance income and total return [1]

Financial Data and Key Metrics Changes - The company generated net investment income of $4.6 million or $0.50 per share, an increase from $4.3 million or $0.47 per share in the prior quarter [3][13] - Total investment income for the quarter was $12.6 million, up from $12.1 million in the previous quarter [12] - Net asset value (NAV) decreased to $164.7 million from $173.5 million in the prior quarter, with NAV per share dropping to $17.89 from $18.85 [13][15] Business Line Data and Key Metrics Changes - The merger with Logan Ridge Finance Corporation was highlighted as a transformational milestone, with Logan Ridge generating net investment income of $1.2 million or $0.47 per share, up from $0.9 million or $0.35 per share in the previous year [4] - The company ended the quarter with a diversified debt investment portfolio across 69 different companies and 25 industries, with an average par balance of $2.6 million [9] Market Data and Key Metrics Changes - Activity in core markets was constrained initially due to tariff announcements, but deal volume picked up towards the end of the quarter [7] - Approximately 86.9% of the debt securities portfolio was based on floating rates, primarily linked to SOFR, which slightly declined over the last two quarters [9] Company Strategy and Development Direction - The company plans to leverage enhanced scale and diversified portfolio to deliver compelling risk-adjusted returns and drive long-term value for shareholders [6] - A new corporate name, BCP Investment Corporation, will be adopted to reflect the affiliation with BC Partners and the commitment to building an industry-leading business development company [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities in the second half of the year, particularly with increased refinancing activity and a healthy mix of new LBO processes [8][36] - The management team remains confident in their strategy and experienced leadership as they navigate the current market environment [6] Other Important Information - The company modified its dividend policy to introduce a stable base distribution of $0.47 per share, expected to be sustainable across market cycles [5] - The company has six investments on non-accrual status, representing 2.14% and 2.64% of the investment portfolio at fair value and cost, respectively [10] Q&A Session Summary Question: Were there any non-recurring items in the quarter? - Management confirmed there were no material non-recurring items outside of the other income reported [18] Question: Why was interest income higher quarter over quarter despite a smaller portfolio and a slight dip in yield? - The increase was largely driven by net deployment activity from the prior quarter [19][20] Question: What was the reason for the realized loss of $15 million? - The loss was primarily attributed to ProAir and Anthem, with Anthem undergoing restructuring [24] Question: When will the trading symbol and name change take effect? - The change is expected to occur within the next couple of weeks, pending the completion of the new website [25] Question: Has deal activity picked up for merging with other BDCs? - Management noted that deal activity has increased significantly, with a robust M&A pipeline [26] Question: How does the pipeline break down in terms of new and add-on opportunities? - The focus is on refinancing activity, with a healthy mix of new sales and refinancing opportunities [35] Question: What is the potential NAV benefit from positions currently held at a discount to par? - The average remaining maturity for these positions is about two and a half to three years, with potential NAV benefits expected over that timeframe [46] Question: What changes will occur in the combined portfolio post-merger? - The portfolios are similar, with a slight increase in diversification expected, but no dramatic changes anticipated [56][60]

Group 1 - The author has adopted a conservative stance towards Business Development Company (BDC) investments while maintaining a structural bullish outlook on the sector [1] - The author has a significant portion of their portfolio allocated to BDC investments, indicating a strong belief in the long-term potential of the sector [1] Group 2 - Roberts Berzins has over a decade of experience in financial management, focusing on helping top-tier corporates with financial strategies and large-scale financings [1] - Berzins has contributed to institutionalizing the Real Estate Investment Trust (REIT) framework in Latvia to enhance liquidity in pan-Baltic capital markets [1] - His policy-level work includes developing national State-Owned Enterprise (SOE) financing guidelines and frameworks to channel private capital into affordable housing [1]