BlackRock TCP Capital Corp. Reports Significant Financial Developments Following Merger with BlackRock Capital Investment Corporation

BlackRock TCP Capital Corp. (TCPC) reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. The company completed a merger with BlackRock Capital Investment Corporation (BCIC) on March 18, 2024, which has had a substantial impact on its financial metrics.

As of September 30, 2024, total investments at fair value reached $1.91 billion, a notable increase from $1.55 billion at the end of 2023. This growth was primarily driven by the merger, which added approximately $586.9 million in investments. Total assets also rose to $2.05 billion from $1.70 billion, while net assets increased to $865.6 million, up from $687.6 million at year-end 2023. However, net assets per share decreased to $10.11 from $11.90, reflecting the dilution from the issuance of 27.8 million shares to former BCIC shareholders.

Investment income for the three months ended September 30, 2024, was $70.9 million, up from $54.2 million in the same period of 2023. This increase was attributed to higher interest income from debt investments, particularly those acquired through the merger, and rising SOFR rates. For the nine months ended September 30, 2024, total investment income was $198.2 million, compared to $158.5 million in 2023.

Operating expenses surged to $37.1 million for the quarter, compared to $25.9 million in 2023, largely due to increased interest expenses, which rose to $21.2 million from $12.1 million. Despite the rise in expenses, net investment income before taxes for the quarter increased to $33.9 million from $28.3 million in the prior year. However, the company reported a net realized loss of $31.4 million for the quarter, compared to a minimal loss of $0.1 million in 2023.

For the nine months ended September 30, 2024, the company experienced a net decrease in net assets from operations of $24.6 million, a stark contrast to the $51.8 million increase reported in the same period of 2023. This decline was primarily due to higher net realized and unrealized losses, which totaled $122.6 million, compared to $29.5 million in the previous year.

The company’s leverage as of September 30, 2024, stood at $1.17 billion, with an asset coverage ratio of 183.2%. The weighted average effective yield of the debt portfolio decreased to 13.4% from 14.1% at year-end 2023. The company remains committed to maintaining compliance with its financial covenants and distributing at least 90% of its taxable income to qualify as a regulated investment company (RIC).

Overall, the merger with BCIC has significantly reshaped BlackRock TCP Capital Corp.'s financial landscape, contributing to increased investment income but also leading to higher operating expenses and realized losses.