Discover BlackRock TCP Capital Corp.'s Impressive Q2 2023 Results and Stock Buyback Plan
Buybacks
August 4, 2023
BlackRock TCP Capital Corp. (TCPC), a prominent business development company, reported its financial results for the second quarter of 2023. The company achieved net investment income of $0.48 per share on a diluted basis, surpassing the dividend of $0.34 per share paid on June 30, 2023. This marks an impressive 45 consecutive quarters of dividend coverage.
At the end of June 2023, TCPC's net asset value per share stood at $12.94, compared to $13.00 at the end of March 2023. Despite this slight decrease, the credit quality of the company's portfolio remained robust, with only two portfolio companies on non-accrual status, representing a mere 0.3% of the portfolio at fair value and 0.5% at cost.
The board of directors declared a third-quarter dividend of $0.34 per share and a special dividend of $0.10 per share, both payable on September 29, 2023, to stockholders of record as of September 15, 2023. TCPC's Chairman and CEO, Rajneesh Vig, credited the company's predominantly floating rate portfolio for generating strong net investment income, which was bolstered by rising base rates. The overall effective yield rose to 13.8% for the second quarter, compared to 9.8% the previous year, indicating the company's continued growth.
As of June 30, 2023, TCPC's investment portfolio consisted of debt and equity positions in 143 companies, with a total fair value of approximately $1.6 billion. A significant 88.4% of these investments were senior secured debt, while equity positions represented about 11.6% of the portfolio. Moreover, 93.7% of the debt investments were floating rate, with 94.8% having interest rate floors.
In a move to provide more value to its shareholders, TCPC's board of directors re-approved a stock repurchase plan to acquire up to $50.0 million of the company's common stock. The purchases would be made at prices below the net asset value per share, adhering to the guidelines of Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. Notably, no shares were repurchased during the three months and quarter ending June 30, 2023.
Despite relatively muted overall deal activity, TCPC remains optimistic about its investment prospects. The company's strong pipeline of opportunities, experienced team, and the support of the BlackRock platform contribute to its confidence in identifying compelling investment opportunities. Additionally, TCPC maintains a cautious approach to underwriting and selective investing, ensuring solid credit quality amid an uncertain economic environment.
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