Investcorp Credit Management BDC(US:ICMB)2025-05-14 15:02Financial Data and Key Metrics Changes - For the quarter ending March 31, 2025, the company reported net investment income before taxes of $700,000 or $0.05 per share, down from $0.06 per share in the prior quarter [4] - The net asset value per share increased by $0.02 to $5.42 compared to $5.39 as of September 30, 2024 [4] - The fair value of the portfolio was $192.4 million, an increase from $191.6 million on December 31 [14] - Net assets increased by $500,000 from the prior quarter to $78.1 million [14] - The weighted average yield of the debt portfolio increased to 10.8% from 10.4% in the previous quarter [14] Business Line Data and Key Metrics Changes - The company invested in one new portfolio company and two existing portfolio companies during the quarter, with total fundings for new investments amounting to $5.1 million [9] - The weighted average yield of debt investments made in the quarter was approximately 10.2% [9] - The five largest industry concentrations by fair market value were professional services (15.5%), containers and packaging (9.2%), trading companies and distributors (8.6%), commercial services and suppliers (8%), and IT services (7.9%) [12] Market Data and Key Metrics Changes - There was a noticeable slowdown in new deal activity, attributed to a decline in M&A volume and sponsor-less financing [6] - The company estimates that less than 20% of its portfolio may experience moderate direct effects from tariffs [7] Company Strategy and Development Direction - The company is focused on maintaining NAV stability and sustainable net investment income while selectively deploying capital in high-quality opportunities [18] - The management is optimistic about the second half of the year providing interesting investment opportunities due to current market volatility [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the portfolio remains stable, with a significant reduction in non-accruals, now representing approximately 1.7% of the total portfolio at fair value [5] - There is cautious optimism that market fundamentals will improve, leading to a rebound in activity as macro uncertainty decreases [6] - Management indicated that they are currently in the process of raising another pool of capital, expected to benefit the company in the second half of 2025 [27] Other Important Information - The company declared a distribution of $0.12 per share payable in cash on June 14, 2025, to stockholders of record as of May 24, 2025 [16] - Gross leverage was 1.53x and net leverage was 1.37x as of March 31, compared to 1.57x and 1.42x in the previous quarter [17] Q&A Session Summary Question: How can the adviser scale or provide benefits to the BDC? - Management indicated that waiving fees is always a consideration and that they are working on scaling the private credit platform, which will help absorb overhead and expenses [21][23] Question: What is the timeline for capital raising? - Management confirmed that they are currently in the process of raising capital, which is expected to benefit shareholders in the second half of 2025 [27] Question: Why not consider share repurchases given the current stock price? - Management acknowledged that share repurchases are a tool they consider but have no immediate plans to implement [32] Question: Should there be an increase in net investment income in the second quarter? - Management suggested that there could be an increase in net investment income due to spread widening in new opportunities [34][35]