Monroe Capital Corporation reports fifth consecutive quarterly NAV increase

The BDC’s total fair value of its portfolio grew by nearly $9m since the previous quarter.

Monroe Capital Corporation, the business development company of Monroe Capital, reported earlier this month that its net asset value in the second quarter increased by $0.28 per share, or 2.5 percent, to $244.8 million or $11.36 per share since the last quarter. During the same quarter in 2020, the net asset value was nearly $25 million lower, at $220.5 million.

The increase marks MCC’s fifth consecutive quarterly increase in net asset value, which the firm says was the result of net realized and unrealized gains on its portfolio.

“We are pleased to report another quarter of strong financial results,” said Theodore Koenig, Monroe Capital’s chief executive officer, in a news release.

The Chicago-based firm also reported its regulatory debt-to-equity leverage increased from 0.94 times to 1.05 times quarter to quarter. The firm’s adjusted net investment income this quarter was $5.3 million, or $0.25 per share, flat when compared to the previous quarter, but dropping more than double from $12.7 million in the second quarter of 2020.

MCC said the decline is attributed to a one-time $7.4 million accrual it received in the second quarter last year related to its share of a final award in a legal proceeding between a portfolio company, Rockdale Blackhawk, and a national insurance company.

“We continue to cover our dividend with per share adjusted net investment income and our new deal pipeline remains strong,” Koenig said. “The M&A market is very active, and we are a significant player in providing private credit in the lower middle market.”

MCC’s portfolio grew during the second quarter with 91 companies and a total fair value of $530 million, compared to 85 companies and $521.4 million total fair value in the first quarter. Over 84 percent of the portfolio consists of first lien loans, according to the firm’s financial report.

MCC invests in senior, unitranche and junior secured debt as well as unsecured debt and equity investments in middle-market companies. Monroe Capital manages $10.3 billion in assets under management.