BlackRock TCP Capital Corp. Q1 FY2025 earnings call

Portfolio Overview

• Fair market value of portfolio was approximately $1.8 billion at quarter end, invested across 146 companies in over 20 industry sectors. 90% of the portfolio was senior secured debt, 94% of which was floating rate.

Investment Activity

• Deployed $66 million of capital during the quarter, with 100% new investments in first lien loans. Largest new investment was a $6.7 million first lien term loan and revolver in Apparis retail.

Financial Results

• Adjusted net investment income was $0.36 per share, gross investment income was $0.66 per share. Operating expenses were $0.28 per share. Net realized losses were approximately $41 million, net unrealized gains totaled $30 million.

Market Commentary

• Focus on US-based services companies, insulated from supply chain disruptions. Middle market companies in demand, with strong interest from borrowers and referral sources for direct loans.

Adjusted net investment income was $0.36 per share, flat with the prior quarter. Annualized net investment income ROE was 15.4% and net asset value per share was $9.18. Nonaccruals declined to 4.4% of the portfolio at fair value, down from 5.6% sequentially. Largest markdowns during the quarter were Razor Group, Gordon Brothers and Alpine. Largest markups were Job and Talent, a tech-enabled staffing agency, and AutoAlert, an automotive data analytics platform.

Share Repurchases

• Continue to repurchase shares when accretive, monitoring trading price. ### Portfolio Resolution
• Expect to resolve remaining challenged positions, including aggregators, in the next few quarters. ### Refinancing
• Plan to refinance 2026 debt maturity, working to expand credit facility.

• Global macroeconomic factors including tariffs impacting portfolio. - Complexity of restructuring aggregator deals with multiple stakeholders. - Tightening access to capital and higher financing costs.

Q: Thoughts on the trajectory of share repurchases going forward?

A: Continue to monitor trading price and repurchase shares when accretive.

Q: Do most portfolio companies have sponsors?

A: The vast majority of companies have sponsors or institutional ownership.

Q: Timeline for resolving aggregator restructurings?

A: Expect to resolve in the next few quarters, possibly sooner for some.

Q: Future deal types?

A: Prefer dominant lender positions, less broad group deals going forward.

Q: Details on Job and Talent markup?

A: Improved performance, growth capital provided, terms confidential.

Q: SBIC licenses?

A: Pursuing second license, process ongoing with no disruption