BCP Investment Corp. Q4 FY2024 earnings call

• Potential accretive combination with Logan Ridge, with next step being shareholder vote on the transaction.
• Refinancing of 2018-2 Secured Notes and amendment/extension of JPMorgan Chase bank credit facility, resulting in net spread savings.
• Reduced nonaccrual investments from 9 to 6, improving asset quality.
• Modified dividend policy to quarterly base distribution and quarterly supplemental distributions, with first quarter 2025 base distribution at $0.47 per share and supplemental at $0.07 per share.
• Repurchased 202,357 shares of common stock under stock repurchase program, accretive to NAV by $0.07 per share.

For the quarter ended December 31, 2024, Portman generated $14.4 million of investment income, a $0.8 million decrease from $15.2 million in the prior quarter. Total expenses were $8.9 million, a $0.5 million decrease from $9.4 million in the prior quarter. Net investment income was $5.5 million or $0.60 per share, down from the prior quarter. Net asset value as of December 31, 2024 was $178.5 million, a decrease from the prior quarter. Nonaccrual investments decreased from 9 as of September 30, 2024 to 6 as of December 31, 2024. The investment portfolio was highly diversified across 26 industries with an average par balance of $2.5 million.

• Anticipate being active in the market and net deployers of capital in 2025, expecting to restore net investment income to normalized levels.
• Confident in generating strong risk-adjusted returns and driving long-term value for shareholders with a healthy pipeline, fortified balance sheet, and experienced management team.

• Idiosyncratic challenges within the investment portfolio impacting financial results.
• Market spread compression affecting financial performance.
• Potential impact of tariffs on deal flow, causing some deal pipeline to be on hold.
• Timing issues in deploying capital, with some lags due to focusing on non-sponsor founder-backed businesses.

Q: Maybe just in terms of the watch list your internal watch list investments this quarter. Was there any -- I mean it was pretty flat quarter-over-quarter, but is there any internal changes are there any new investments added and the like?

A: Really haven't had a lot of negative credit surprises over the last 12 months, with names generally muddling along, and active in deep diving on portfolio impact from tariffs. Names fluctuate between 2 and 3 in rating systems, with relatively muted impact from tariffs but monitoring ongoing changes.

Q: And then could you just give us a sense of maybe how much of the portfolio is a nonsponsored at this point?

A: Platform is roughly 50-50 with a little more weighting towards sponsor in BDCs due to working capital management, with intention to publish quarterly for more specific tracking.