BCP Investment Corp. Q3 FY2025 earnings call

• The company completed the merger with Logan Ridge on July 15, 2025, marking a new chapter. - Plans to commence a modified Dutch auction tender and share repurchases, aiming for approximately 10% repurchase by year-end. - Net investment income increased in Q3. - Board approved a base distribution of $0.47 per share for Q4 2025, annualized yield 15.5%. - Addressed private credit market concerns, stating events like First Brands are idiosyncratic. - Investment portfolio: Originations $14.2 million, repayments/sales $43.8 million, net repayments/sales $29.6 million; over 80% of new fundings to new borrowers. - Diversified portfolio with 79 portfolio companies and 28 industries, average par balance $3.2 million per entity.

For the third quarter of 2025, BCP Investment Corporation generated net investment income of $8.8 million or $0.71 per share, compared to $4.6 million or $0.50 per share in the prior quarter. Investment income for the quarter ended September 30, 2025 was $18.9 million, an increase of $6.3 million from the prior quarter's $12.6 million. Core income for the same period was $15.3 million vs $12.6 million previously. Net expenses were $10.1 million in Q3 vs $8.1 million prior quarter. As of September 30, 2025, NAV was $17.55 per share, down from $17.89 in the prior quarter. The debt investment portfolio had 10 investments on nonaccrual status in Q3, representing 3.8% of the portfolio at fair value. Excluding nonaccrual investments, the fair value of the debt portfolio was $429.5 million.

• Board approved a base distribution of $0.47 per share for Q4 2025, annualized yield 15.5%. - Anticipate further benefits from expanded scale and investment platform. - Plan to repurchase approximately 10% of shares by year-end through tender, daily repurchases, etc.

• Concerns about the private credit market due to high-profile borrower collapses, though full scale of concern is unwarranted. - Increase in nonaccrual investments in Q3, including those acquired through the Logan Ridge transaction. - Potential impact of market conditions on portfolio performance and repurchase activities.

Q: To start first -- I wanted to start first in terms of -- with your kind of announcement of potentially repurchasing 10% of the share. Just want to make sure, is that relative to the 9.30 million outstanding balance of about 13.96 million?

A: It's relative to the transaction closing shares, which was about 13.2 million off the top of my head. If you recall, we had to wait 60 days until after closing before we could turn the buyback back on, but we did provide some color on post quarter end. Daily repurchases in our subsequent events, which was about $1.2 million.

Q: Looking at Slide 11 and just noticing the quarter-over-quarter improvement in your internal ratings performing versus underperforming. Was the majority of that change from June 30 to September 30, the result of the combination as well? Or is there any additional kind of upgrades going on within the combined portfolio?

A: The short answer is like both. I mean, there were certain upgrades going into the portfolio, but the reality is we added a significant chunk through the Logan and kind of using those internal ratings kind of gives you that. So again, it's a little bit of both, but my hunch is the -- without giving the specifics like the -- it's probably the assets from Logan coming on to the balance sheet in those ratings as opposed to a broad swath of increases.

Q: Just a quick follow-up. On the topic of the purchasing accounting accretion, was all of the discount recorded in 3Q? Or I suspect there may still be potentially more so what is that balance and over what kind of time period will the remaining amount be recognized?

A: There was about just north of $21 million of purchase accounting accretion. There's about $18 million left. So I would just say, generally speaking, the a lot of the purchase accounting increase in tends to work its way through the book in the first couple of quarters after closing. It is recognized over time, but obviously, you have assets with shorter maturities, things like that and natural portfolio rotation as a result of the integration that again, this quarter, we had $3.6 million on effectively a stub quarter, so.