BCP Investment Corp. Q2 FY2025 earnings call

• The company continued to advance strategic priorities, generating net investment income growth. - Completed the merger with Logan Ridge Finance Corporation, a transformational milestone, expecting greater scale, diversification, and financial flexibility. - Logan Ridge delivered strong results in the second quarter. - Changed corporate name to BCP Investment Corporation with NASDAQ ticker BCIC in the following weeks. - Board of Directors approved a base distribution of $0.47 per share and a supplemental cash distribution of $0.02 per share. - Patrick Schafer provided commentary on investment portfolio and markets, including core market activity, investment portfolio details like originations, nonaccrual investments, etc. - Brandon Satoren discussed operating results and financial condition, including investment income increase, expense change, net asset value decline, leverage ratios, etc.

In the second quarter of 2025, Portman Ridge generated net investment income of $4.6 million or $0.50 per share, compared with $4.3 million or $0.47 per share in the prior quarter. Logan Ridge Finance Corporation generated net investment income of $1.2 million or $0.47 per share in the second quarter, up from $0.9 million or $0.35 per share in the first quarter of 2025. As of June 30, 2025, approximately 86.9% of the debt securities portfolio was at a floating rate. Originations for the second quarter were $10.9 million and repayment and sales were $17.0 million, resulting in net repayment and sales of approximately $6.1 million. There were 6 investments on nonaccrual status at the end of the second quarter of 2025, representing 2.1% and 4.8% of the company's investment portfolio at fair value and cost, respectively.

• Excited about opportunities ahead for the combined company, seeking to leverage enhanced scale, diversified portfolio, lower operating expenses, and improved stock trading liquidity to deliver compelling risk-adjusted returns and long-term value for shareholders. - Believes the newly combined company will drive improved operating efficiency and shareholder returns over time. - Looks forward to leveraging the company's enhanced scale, further diversified portfolio, cost savings, and improved stock trading liquidity to deliver strong returns to shareholders through the second half of 2025.

• Actual results may differ materially from forward-looking statements due to various factors including those described in the company's filings with the SEC. - Market dynamics, such as initial tariff announcements and revisions, can constrain core market activity. - Interest rate changes can impact net investment income. - Nonaccrual investments pose risks to the investment portfolio.

Q: Were there any nonrecurring items in the quarter?

A: Outside of the other income that's broken out on the financial statements, there were no material items this quarter.

Q: Why was interest income higher quarter-over-quarter despite a smaller portfolio and a slight dip in yield?

A: It was largely driven by the net deployment in the prior quarter flowing through the current period, and also had the Sundance onetime reversal of previously accrued income.

Q: Is there a hard date when the trading symbol is going to switch over and the name change going to take effect?

A: Not a final date, but over the course of the next couple of weeks, it should be complete, with the biggest delay being building out the new website under the new branding.

Q: You sounded fairly optimistic about the opportunity for originations in the back half of the year, noting some increased activity up in the market. Just as you look at the pipeline today, I'm curious how kind of breaks down in terms of maybe new and add-on opportunities and how spreads are today versus maybe a quarter ago beginning of the year?

A: Focused on refinancing activity which has increased dramatically, spreads haven't come down that much, and there's an appetite to use buyback, with refinancing activities up and some money likely to be used to buy back stock. Also, refi type of opportunities tend to get a better spread, and the franchise is more weighted towards nonsponsor or nontraditional sponsor which helps in pricing and structuring deals.

Q: Most of my questions have been asked and answered. When you look at the pro forma combined portfolio, recognizing that we sort of knew what was in each -- what's the most dramatic change going to be?

A: The portfolios are pretty similar, equity will look as a relatively small amount, joint ventures and fuel equities will also look as a smaller amount, debt will be up a bit as a percentage of total, and the ability to move around asset positions within credit facilities to unlock value is a big change.

Q: recognizing that you've gotten -- you exited a number of the larger equity positions. Any change that you can talk about on what was left of the Logan Ridge equity?

A: Not a huge change, there are still a couple of small things being worked on, but no major immediate changes expected, and the macro environment may lead to more monetization of smaller positions