BKCC adds $127m to portfolio in first quarter

The New York-based BDC also shed all of its non-accruals over the quarter.

BlackRock Capital Investment Corporation expanded its portfolio by $127.4 million in the first quarter, resulting from new or follow-on investments of $144.6 million and investment exits of $17.2 million.

The largest investment for the New York-based business development company was a $72.7 million first lien last-out term loan to St. George Warehousing & Trucking Company of California. That position was reduced to $40 million last month as some of the investment was sold to third parties, the firm said in its earnings release.

Other investments include investments of $17.23 million subordinated debt and $10.45 million of equity in Gordon Brothers Finance Company, according to Thomson Reuters BDC Collateral.

BKCC also reported a $0.01 loss per share for the first quarter, a decline from the $0.05 in earnings per share it posted in for the last three months of 2017. That figure came from a net investment income of $11.6 million, or $0.16 a share, offset by $12.5 million in net realised or unrealised losses. The firm had no investments on nonaccrual, down from the 15.5 percent at cost as of year-end.

“We had significant net deployments during the quarter,” BKCC chairman and interim chief executive James Keenan said on the firm’s earnings call. “However, a time-lag between repayments in the prior quarter and subsequent redeployment contributed to a reduction in [net investment income] this quarter.”

In the first three months of the year, the company realised a loss of $76.6 million for a restructuring or debt write-offs in MBS Group Holdings and SVP Worldwide, according to the firm’s first-quarter report. BKCC’s previous earnings reflected those losses in unrealised depreciation.

The firm exited its position in Oxford Mining Company, BDC Collateral reported. The database shows other BDC investors include Medley Capital Corporation, which has the name on non-accrual.

Net unrealised depreciation decreased by $64.1 million, primarily from the reversal of previously recognised depreciation of $76.3 million of the above restructurings or write-offs, less $12.2 million decreases in some portfolio company valuations.

The firm’s net asset value per share dropped from $7.83 as of 31 December to $7.65 as of 31 March. BlackRock’s stock closed at $5.99 last Thursday, down from $6.24 the day before.

The earnings report comes on the heels of Mike Zugay leaving his post at chief executive of the firm for personal reasons, with the board appointing Keenan, to serve as interim CEO.  Jason Mehring was also named chairman of BlackRock’s US Private Capital investment committee, a role Zugay had held. Mehring was vice chairman of the investment committee and will be succeeded by Marshall Merriman. Both Mehring and Merriman have been with BKCC since 2005.

BKCC is indirectly managed by BlackRock, which announced last month it will purchase Tennenbaum Capital Corporation. Tennenbaum also operates a BDC, TCP Capital Corporation.