Capital Southwest Corporation (CSWC) reported significant financial developments in its 10-Q filing for the quarter ended September 30, 2024. The total fair value of its investment portfolio increased to $1,508.5 million, up from $1,476.6 million as of March 31, 2024. This growth was driven by a rise in non-control/non-affiliate investments, which accounted for approximately 86% of total investment assets, valued at $1,297.3 million.
For the three months ended September 30, 2024, total investment income reached $48.7 million, reflecting a 13.9% increase from $42.8 million in the same period of 2023. Net investment income also rose to $31.2 million, a 14.6% increase year-over-year. The company reported a net unrealized appreciation of $1.8 million for the quarter, contrasting with a net depreciation of $4.6 million in the prior year.
CSWC's interest income for the quarter was $42.1 million, up 16.7% from $39.5 million in the previous year, attributed to a 22.2% increase in the average monthly cost basis of debt investments. However, dividend income decreased by $1.9 million, primarily due to the liquidation of I-45 SLF, which impacted overall income streams.
The company’s total net realized loss on investments for the quarter was $10.3 million, compared to a net realized gain of $0.4 million in the same period last year. This loss included significant restructuring losses. The weighted average interest rate on total debt increased from 5.42% to 5.61% year-over-year, contributing to a rise in total interest expense to $12.6 million.
CSWC declared a quarterly dividend of $30.5 million, or $0.64 per share, for the quarter, marking an increase from $29.5 million in the previous quarter. The company maintained compliance with all Registered Investment Company (RIC) requirements, with 89.4% of total assets invested in qualifying assets.
Strategically, CSWC has expanded its credit facilities, increasing commitments from $400 million to $485 million, with an accordion feature allowing for further increases. The company also reported a cash balance of approximately $47.2 million as of September 30, 2024, reflecting a net increase of $15 million during the period.
Overall, CSWC's performance in the latest quarter indicates a robust growth trajectory in investment income and strategic financial management, despite challenges in certain investment areas.
About CAPITAL SOUTHWEST CORP
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