Investcorp Credit Management BDC, Inc. Q3 FY2024 earnings call

• Leadership: Suhail Shaikh appointed CEO, effective immediately, and Mike Mauer remains Chairman and is now Vice Chairman of Private Credit at Investcorp. - Financials: Net investment income up 32%, NAV increase due to capital gains. Covered March dividend, declared June dividend of $0.12 per share base and $0.03 per share supplemental. - Investment activity: Q3 investment in existing portfolio companies, realized some investments; post-quarter end invested in CPI, Multi-Color Corp., etc. - Portfolio: Diversified with 40 borrowers across 22 industries, weighted average EBITDA increased, net leverage shifted to larger, more stable credits.

During the quarter ended March 31st, net investment income was $2.1 million or $0.14 per share, an increase of approximately 32% from the previous quarter. Net asset value per share increased approximately 0.2% to $5.49 per share from $5.48 per share at the end of the prior quarter. Nonaccrual investments declined to 3.9% of the total fair value of the portfolio compared to 4.6% in the previous quarter. The portfolio had 40 borrowers across 22 industries. The weighted average loan-to-value ratio for performing debt investments was approximately 52%. Gross leverage was 1.52 and net leverage was 1.36.

• Expect to earn dividend through June 30th. - Board declared $0.12 base and $0.03 supplemental dividend for Q2 ended June 30, payable June 14. - Focus on capital preservation, rotating/diversifying into stable credits, confident in pipeline and investment capacity.

• Market transaction volumes declined. - Klein Hersh and other nonaccrual names still in active discussions for resolution. - Yield compression due to competitive market conditions.

Q: What was the driver for the change in yields on the portfolio?

A: Largely the market, with spreads starting to tighten due to competitive market, lack of deal flow and supply in new platform transactions leading to yield compression.

Q: Any update on Klein Hersh?

A: Not at this moment, actively working on the situation with live discussion ongoing, but more to share as restructuring finalizes.

Q: Should the earnings cover the base dividend or entire base and supplement in the June quarter?

A: At this point, the base dividend is expected to be covered; the supplement is not certain yet and will depend on how it plays out.

Q: Thoughts on refinancing the 2026 notes?

A: Developing strategy around it, considering the net leverage reduction achieved over time and will be part of discussions as it gets closer.

Q: Resolution time frame for other nonaccruals?

A: Actively working on them, with constructive dialogs and good lender groups, no immediate alarms, but one or two situations developing in real time.