Tennenbaum BDC deploys more than $200m in Q4

The mid-market lender’s largest new investment was in a telecommunications company in which plenty of other BDCs also have a position.

TCP Capital Corporation invested $213 million over the course of the fourth quarter by deploying capital into 13 new businesses along with three companies for which it was the incumbent lender.

The Santa Monica, California-based business development company’s investment portfolio decreased slightly from the $1.53 billion reported at the end of the third quarter to $1.51 billion.

“It shrank because there were a lot of repayments,” TCPC president and chief operating officer Rajneesh Vig said according to a transcript of the call, “and I think that’s partly a function of the nature of our business where a lot of these companies have a transitional piece of capital that tends to repay, [refinance] or a company gets sold in the interim.”

TCPC’s largest new investment was a $32.79 million first lien term loan for Datto, a Norwalk, Connecticut-based data protection company, priced at LIBOR plus 8 percent. Tennenbaum Capital Partner’s private BDC, Special Value Continuation Partners took a position in the company as well. TCPC also provided the firm with a revolving credit facility.

A plethora of other BDCs hold positions in Datto’s first lien term loan, according to Thomson Reuters BDC Collateral database. These include Goldman Sachs BDC; Goldman Sachs Private Middle Market Credit; Golub Capital BDC; Golub Capital Investment Corporation; Golub Capital BDC 3; Oaktree Specialty Lending Corporation; TCG BDC; and Solar Capital.

Goldman Sachs Private Middle Market Credit holds the largest portion of that loan at $53.64 million.

TCPC also put money into American Broadband Holding Company, providing a $18.48 million first lien term loan to the Sulphur, Louisiana-based telecommunications company. Ares Capital Corporation held warrants through the third quarter of last year, BDC Collateral data showed.

Ares exited its investment, which allowed the firm to purchase 208 shares, for a net gain of $15 million. The deadline to exercise the warrants was in November, a decade after Ares first made the investment.

American Broadband is part of the BDC’s portfolio’s largest industry concentration, as 33.7 percent of the loan book is in telecommunications, BDC Collateral showed. Financial services companies and service businesses make up the second and third largest part of TCPC’s portfolio, at 14.99 percent and 11.29 percent, respectively.

The BDC’s second largest new investment was a $28.31 million of subordinated class B notes in CFG Investments, a Fountain Valley, California-based property management company, with a fixed interest rate of 9.42 percent.

TCPC is advised by Tennenbaum Capital Partners. In addition to Tennenbaum’s southern California headquarters, the firm also has offices in Atlanta, New York and San Francisco. It manages $9 billion.