Franklin BSP Capital Corporation Reports Significant Financial Growth Following Merger with FB Lending Corporation

Franklin BSP Capital Corporation (FBCC) reported significant financial growth for the fiscal year ending December 31, 2024, driven primarily by its merger with Franklin BSP Lending Corporation (FBLC). The company achieved total investment income of $413.3 million, a substantial increase from $94.7 million in the previous year. This growth was largely attributed to the acquisition of FBLC's investment portfolio valued at approximately $2.8 billion, which significantly expanded FBCC's asset base to $4.1 billion from $769 million in 2023. The net investment income for the year was $188.4 million, compared to $53.6 million in 2023, reflecting the enhanced scale and operational capacity post-merger.

The merger also resulted in a notable increase in operating expenses, which rose to $223.9 million from $40.8 million in the prior year. This increase was primarily due to higher management fees, which surged from $4.2 million to $54.1 million, and interest expenses that escalated from $31.1 million to $117.4 million, reflecting the larger debt portfolio acquired through the merger. The company’s asset coverage ratio stood at 189% as of December 31, 2024, indicating a strong leverage position relative to its total assets.

FBCC's investment strategy focuses on generating income and capital appreciation through debt and equity investments, primarily in first and second lien senior secured loans to U.S. middle market companies. As of the end of 2024, 94.9% of its investment portfolio was in variable interest rate loans, with a weighted average current yield of 10.5%. The company reported a weighted average risk rating of 2.2 for its investments, with eight portfolio companies on non-accrual status, reflecting a shift from the previous year when there were no such companies.

Looking ahead, FBCC's management expressed optimism about the potential for continued growth and investment opportunities, particularly in the context of a favorable market for private credit. However, they acknowledged the risks associated with rising interest rates and economic uncertainty, which could impact the performance of their portfolio companies and the overall investment landscape. The company plans to maintain its focus on middle market investments while navigating the challenges posed by market conditions and regulatory requirements.

In terms of capital structure, FBCC has issued 135.5 million shares of common stock for net proceeds of $2.0 billion and 77,500 shares of Series A Preferred Stock for gross proceeds of $77.4 million. The company declared a regular quarterly distribution of $0.29 per share and a special distribution of $0.04 per share, reflecting its commitment to returning value to shareholders while managing its liquidity and capital resources effectively.