BlackRock TCP Capital Corp. · NASDAQ:TCPC
BlackRock TCP Capital — Investor Presentation (June 2019)
26 slides from BlackRock TCP Capital's investor presentation, June 2019
Slide 1: BlackRock TCP Capital Corp. Investor Presentation June 2019
BlackRock TCP Capital Corp. Investor Presentation June 2019
Slide 2: Forward Looking Statements
Forward Looking Statements Prospective investors considering an investment in BlackRock TCP Capital Corp. should consider the investment objectives, risks and expenses of the Company carefully before investing. This information and other information about the Company are available in the Company's f
Slide 3: BlackRock TCP Capital Corp – Key Highlights
BlackRock TCP Capital Corp – Key Highlights As of March 31, 2019 Who we are What we do How we do it $1.6 billion diversified portfolio Advised by Tennenbaum Capital Value-oriented investing primarily composed of directly Partners (“TCP”) with a 20-year focused on middle-market originated senior secu
Slide 4: Established Platform: A leader in private credit investing
Established Platform: A leader in private credit investing As of March 31, 2019 Experienced Advisor… …with Diverse Skills Complementary skill sets across direct lending More than 20 years(1) of experience investing and special situations enhance principal-protection through multiple market cycles in
Slide 5: Competitive Advantages of BlackRock
Competitive Advantages of BlackRock BlackRock’s $6.5 trillion(1) investment platform creates substantial scale and scope that provides insight, access, and expertise in sourcing and underwriting differentiated investment opportunities Global Credit Expertise Information Edge One Stop Shop ▪ $98 bill
Slide 6: Breadth and Depth of the BlackRock's Global Credit Platform
Breadth and Depth of the BlackRock’s Global Credit Platform Global Credit AUM: $98 billion(1) Leveraged Finance Multi-Strategy Credit Private Credit ▪ High Yield ▪ Pan-Credit Solutions ▪ Direct Lending ▪ Bank Loans ▪ Hedge Fund Strategies ▪ Opportunistic Credit ▪ CLOs ▪ Specialty Finance BlackRock I
Slide 7: Consistent and Disciplined Portfolio Growth
Consistent and Disciplined Portfolio Growth Total Investments = $1.6 billion Equity Fixed rate debt Floating rate debt $1,800 $1,600 $1,400 $1,200 Dollars in millions $1,000 $800 $600 $400 $200 $ Q2-12 Q4-12 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q4-15 Q2-16 Q4-16 Q2-17 Q4-17 Q2-18 Q4-18 7
Slide 8: Investor Friendly Advisory Fee Structure
Investor Friendly Advisory Fee Structure BlackRock TCP Capital Corp. BlackRock TCP Capital Corp. Average Externally Managed (Thru 2/8/2019) (Post 2/8/2019) BDC(1) ◼ 1.5% on gross assets (less cash ◼ 1.5% up to 1.0x debt to equity; ◼ 1.50% - 1.75% on gross assets and cash equivalents) 1.0% above 1.0x
Slide 9: Well-Covered and Consistent Dividend
Well-Covered and Consistent Dividend Net investment income of $0.40 per share Declared Q2 2019 dividend of $0.36 in Q1 2019 per share Quarterly dividend of $0.36 per share paid Payable on June 28, 2019 to holders of record on March 29, 2019 as of June 14, 2019 Dividend covered in all 28 quarters sin
Slide 10: Strong Track Record of Positive Performance
Strong Track Record of Positive Performance Book Value per Share and Dividends Paid As of 3/31/2019: Book Value per Share Cumulative Dividends Paid per Share (Post IPO) $26.00 $24.46 $24.00 $22.00 $20.00 $10.28 $18.00 $16.00 $14.00 $14.18 $12.00 At IPO Q3-12 Q1-13 Q3-13 Q1-14 Q3-14 Q1-15 Q3-15 Q1-16
Slide 11: TCPC Relative Outperformance
TCPC Relative Outperformance Outperformed the Wells Fargo BDC Index by 37% since our IPO(1) BlackRock TCP Capital Corp. Wells Fargo Business Development Company Index As of 3/31/2019 200% 190% TCPC: 86.8% 180% 170% 160% WFBDC: 63.2% 150% 140% 130% 120% 110% 100% 90% (1) Assumes a fixed investment on
Slide 12: Conservatively Positioned and Diversified Portfolio
Conservatively Positioned and Diversified Portfolio Majority of our portfolio 11.4% weighted $1.6 billion 92% of portfolio companies contribute average effective yield portfolio fair value is senior secured debt <1% to recurring income on debt portfolio(1) Diversified Income Contribution Industry Di
Slide 13: Investment Strategy & Focus
Investment Strategy & Focus ▪ Seek to generate primarily current cash income with additional return from origination and structuring fees Return Focus ▪ Potential for capital appreciation ▪ Potential upside through equity participation ▪ Directly originated and newly issued leveraged loans and, to a
Slide 14: Multi-Channel Deal Sourcing
Multi-Channel Deal Sourcing Extensive and diverse sourcing network designed to generate attractive investments across market cycles BlackRock Private Capital Industry / Sector Network Markets (BPCM) Investor Relationships Reciprocal Credit Firm Network of Industry Advisors Relationships Regional Int
Slide 15: Differentiated focus within U.S. leveraged lending market
Differentiated focus within U.S. leveraged lending market Lower Yield Higher Yield Less Downside Management More Downside Management Broadly Middle Market Middle Market Syndicated Loans Syndicated Loans Private Loans Tranche Sizes $300 million+ $200 – $300 million $25 – $200 million New Issue Pricin
Slide 16: Disciplined Investment Process
Disciplined Investment Process Industry deal teams are involved in every phase of a transaction from sourcing to eventual liquidity Rigorous Due Investment Portfolio Realizations / Diligence & Structuring Committee Management Liquidity ▪ Experienced credit ▪ Thorough review of due ▪ Holistic approac
Slide 17: TCPC's Risk-Mitigated Platform Well-Positioned in Today's Environment
TCPC’s Risk-Mitigated Platform Well-Positioned in Today’s Environment Middle-Market Environment Opportunities Challenges ▪ ~200,000(1) U.S. middle-market businesses, ▪ Uptick in new market participants is intensifying representing one-third of private sector GDP, many competition and pressuring yiel
Slide 18: Case Study: Nephron Pharmaceuticals – Pharmaceutical Manufacturer
Case Study: Nephron Pharmaceuticals – Pharmaceutical Manufacturer Key Terms Investment Type: 1st lien term loan Coupon: L + 8.75% Size: $180 million Floor Protection: 1.0% Primary Industry: Healthcare Call Protection: NC 1 Country: USA Price at Investment: 97.25 Sourcing • PNC had organized an earli
Slide 19: Case Study: Lexmark Carpet Mills – Manufacturing
Case Study: Lexmark Carpet Mills – Manufacturing Key Terms Investment Type: 1st Lien Term Loan Coupon: L + 10% Size: $76 million Floor Protection: 1.0% Primary Industry: Manufacturing Call Protection: 103/102/par Country: USA Price at Investment: 97.50 Sourcing • BlackRock (then TCP) supported the a
Slide 20: Strategically Positioned Balance Sheet
Strategically Positioned Balance Sheet Predominantly Floating Rate Asset Portfolio Liabilities Primarily Fixed Rate 8% Fixed Rate 36% Fixed Rate Floating Rate Floating Rate 64% 92% Positive annual impact on net income of base rate increases in interest rates(1) Basis Point Change Net Investment Inco
Slide 21: Diversified Sources of Funding
Diversified Sources of Funding TCPC is investment grade rated by Standard & Poor’s and Moody’s As of March 31, 2019, $ in millions Source Capacity Drawn Amount Available Pricing Maturity SVCP 2022 Facility $ 170.0 (1) $ 85.0 $ 85.0 L + 2.25% (1) Feb-22(1) 2019 Convertible Notes 107.6 (2) 107.6 - 5.2
Slide 22: 2019 Year to Date Highlights
2019 Year to Date Highlights Consistent Dividend Coverage ▪ Extended our record of consistent dividend coverage to 28 consecutive quarters Strong Credit Profile ▪ No loans on non-accrual as of March 31, 2019 Asset Coverage ▪ TCPC’s Board of Directors and shareholders approved a decrease in the minim
Slide 23: Appendix
Appendix BLACKROCK’ za TCP su
Slide 24: Financial Highlights
Financial Highlights For the For the Year Ended Quarter Ended Unaudited Audited ($ per share) Q1 2019 2018 2017 2016 2015 Net investment income 0.40 1.59 1.59 1.50 1.63 Net realized & unrealized gains (losses)(1) 0.01 (0.82) (0.40) 0.00 (0.42) Net increase in net assets from operations 0.41 0.77 1.1
Slide 25: Portfolio Highlights
Portfolio Highlights For the For the Year Ended Quarter Ended Asset Mix of the Investment Portfolio Q1 2019 2018 2017 2016 2015 (in thousands) Senior secured debt $1,476,326 $1,471,583 $ 1,404,729 $ 1,248,888 $ 1,129,571 Junior debt 43,722 43,526 41,008 - 965 Equity 84,780 82,177 68,796 66,082 52,38
Slide 26: Corporate Information
Corporate Information Securities Listing Transfer Agent NASDAQ: TCPC Equiniti Shareholder Services (800) 468-9716 (from U.S.) Research Coverage (651) 450-4064 (from outside U.S.) www.shareowneronline.com ▪ Bank of America Merrill Lynch ▪ D.A. Davidson Corporate Headquarters ▪ Deutsche Bank ▪ JMP Sec
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