American Capital Senior Floating Reports Net Investment Income of $0.32 per Share

Aug 03, 2015, 16:09 ET from American Capital Senior Floating, Ltd.

BETHESDA, Md., Aug. 3, 2015 /PRNewswire/ -- American Capital Senior Floating, Ltd. ("ACSF" or the "Company") (Nasdaq: ACSF) today reported net investment income of $3.2 million, or $0.32 per share, for the quarter ended June 30, 2015.  The increase in net assets resulting from operations for the quarter ended June 30, 2015 was $3.2 million, or $0.32 per share.  Net asset value ("NAV") was $145.4 million, or $14.54 per share, as of June 30, 2015.

SECOND QUARTER 2015 FINANCIAL HIGHLIGHTS

  • $3.2 million, or $0.32 per share, of net investment income
    • Increased $0.01 per share from Q1 2015 net investment income of $0.31 per share
  • $3.2 million, or $0.32 per share, increase in net assets resulting from operations
    • Decreased $0.06 per share from $0.38 per share in Q1 2015
  • $0.097 per share monthly dividend which equates to $0.291 per quarter 
    • Annualized 8.0% yield on the June 30, 2015 NAV
    • Annualized 9.2% yield on the June 30, 2015 closing market price per share of $12.65
  • $145.4 million, or $14.54 per share, NAV as of June 30, 2015
    • $0.03 per share increase from March 31, 2015 NAV of $14.51 per share
  • $272 million investment portfolio at fair value as of June 30, 2015
    • 70%, or $190 million, in first lien floating rate loans
    • 10%, or $28 million, in second lien floating rate loans
    • 20%, or $54 million, of equity in collateralized loan obligations ("CLOs")
  • 7.19% portfolio yield at cost as of June 30, 2015
    • 13 basis point increase from 7.06% as of March 31, 2015
  • 2.40% weighted average cost of funding as of June 30, 2015
  • 0.85x debt to equity ratio as of June 30, 2015
    • Decreased 0.03x from 0.88x as of March 31, 2015

"We are pleased with our portfolio's performance in the second quarter," said Mark Pelletier, President and Chief Investment Officer. "Despite pockets of volatility during the quarter, the loan portfolio continued to perform well and credit remained stable with no investments on non-accrual. In addition, the CLO portfolio continued to perform well as cash flows came in stronger than forecast. Overall, we believe the portfolio is well positioned for the future."

Malon Wilkus, Chair and Chief Executive Officer, commented, "We are happy with the Company's strong performance this quarter. In conjunction with the release of earnings today, we declared the next three months' dividends, which aggregate to $0.291 per share. Our current annualized dividend represents an 8.0% yield on NAV and a 9.2% yield on our June 30, 2015 closing share price."

PORTFOLIO AND INVESTMENT ACTIVITY As of June 30, 2015, the fair market value of ACSF's portfolio totaled $272 million and was comprised of $190 million (or 70%) of first lien floating rate loans, $28 million (or 10%) of second lien floating rate loans (collectively, the "Loan Portfolio") and $54 million (or 20%) of CLO equity (the "CLO Portfolio" and, together with the Loan Portfolio, the "Portfolio").  The Portfolio had a weighted average yield (at cost) of 7.19% as of June 30, 2015.  The weighted average yield on the Portfolio increased 13 basis points from 7.06% as of March 31, 2015, primarily due to yields on our CLO Portfolio which increased 67 basis points to 14.69% as of June 30, 2015.  The increased yield on the CLO Portfolio, which was due to stronger than expected cash flows, was partially offset by a reduction to the yield on the Loan Portfolio of 12 basis points primarily due to loan repricings and tighter new issue spreads during the quarter.

The Portfolio was actively managed during the quarter with $38.9 million of investment purchases and $41.1 million of sales and repayments.  The following table depicts the Portfolio activity by investment type for the quarter ended June 30, 2015:

 

Three Months Ended June 30, 2015

First Lien

Second Lien

CLO Equity

Total

$ in millions

Amount

Yield

(at cost)

Amount

Yield (at cost)

Amount

Yield (at cost)

Amount

Yield (at cost)

March 31, 2015 - Fair Value

$

192.7

5.0

%

$

29.1

7.8

%

$

50.8

14.0

%

$

272.6

7.1

%

Purchases

34.7

4.7

%

n/a

4.2

16.9

%

38.9

5.8

%

Sales

(19.2)

(5.0)

%

(0.5)

(8.2)

%

n/a

(19.7)

(5.1)%

Repayments (1)

(17.2)

(5.8)

%

(0.9)

(8.3)

%

(3.3)

(14.0)%

(21.4)

(7.2)%

Other (2)

(0.6)

n/a

0.2

n/a

2.2

n/a

1.8

n/a

June 30, 2015 - Fair Value

$

190.4

4.9

%

$

27.9

7.8

%

$

53.9

14.7

%

$

272.2

7.2

%

(1)

CLO equity repayments reflect the amount of cash distributions received during the three months ended June 30, 2015.

(2)

Other includes net unrealized appreciation / (depreciation), net realized gains / (losses), amortization of discount/premium on the Loan Portfolio and income recognized on the CLOs using the effective interest method during the three months ended June 30, 2015. 

 

RESULTS OF OPERATIONS

Net Investment Income

Net investment income totaled $3.2 million, or $0.32 per share, for the three months ended June 30, 2015.  Gross investment income was $4.9 million for the quarter, with $3.0 million, or 62%, generated from the Loan Portfolio and $1.9 million, or 38%, generated from the CLO Portfolio.  The average yield on the Loan Portfolio, CLO Portfolio and the Portfolio during the three months ended June 30, 2015 was 5.35%, 14.14% and 7.06%, respectively.  Net expenses totaled $1.7 million for the three months ended June 30, 2015, with interest and other debt related costs of $0.8 million, management fees of $0.6 million and $0.3 million of other net expenses.

Net Realized and Unrealized Gain / (Loss) From Investments

Net losses from investments for the three months ended June 30, 2015 totaled $(0.1) million and were comprised of $(0.2) million of net unrealized depreciation on the Portfolio and $0.1 million of net realized gains.  The net unrealized depreciation was primarily the result of $(0.6) million of unrealized depreciation from one first lien investment, which was partially offset by net appreciation of $0.4 million from the remainder of the Portfolio.  Exclusive of this one investment, the Loan Portfolio contributed $0.1 million of net unrealized appreciation during the quarter, which was consistent with the relative stability of loan prices in the market.  The CLO Portfolio contributed $0.3 million of net unrealized appreciation during the quarter as a result of strong cash flows and actual defaults below forecasted default rates.  Sales and repayments of investments during the three months ended June 30, 2015 totaled $41.1 million, resulting in net realized gains of $0.1 million.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2015, ACSF had $123.8 million outstanding on its $140.0 million credit facility, resulting in a debt to equity ratio of 0.85x.  As of June 30, 2015, ACSF had $18.7 million of available liquidity consisting of $2.5 million of cash and cash equivalents and $16.2 million of available capacity on its credit facility.

DIVIDENDS

On August 3, 2015, the Company announced the declaration of monthly dividends of $0.097 per share for each of August, September and October 2015.  This dividend rate represents an 8.0% annualized yield on the June 30, 2015 NAV of $14.54 and a 9.2% annualized yield on the June 30, 2015 closing market price per share of $12.65.  The monthly cash dividends will be paid to common stockholders of record as set forth in the table below:

Dividend per Share

Record Date

Ex-Dividend Date

Payment Date

August 2015

$0.097

August 21, 2015

August 19, 2015

September 2, 2015

September 2015

$0.097

September 22, 2015

September 18, 2015

October 2, 2015

October 2015

$0.097

October 23, 2015

October 21, 2015

November 3, 2015

Since its January 2014 IPO, the Company has declared a total of $20.0 million in dividends, or $1.999 per share.

ACSF's Board of Directors considers estimated taxable income, GAAP income and economic performance when determining dividends.  Actual taxable income may differ from GAAP income due to temporary and permanent differences in income and expense recognition and changes in unrealized appreciation and depreciation on investments.  We currently expect dividends for 2015 to be from ordinary taxable income. The specific tax characteristics will be reported to stockholders on Form 1099 after the end of the calendar year. For additional detail, please visit the Company's website at www.ACSF.com.

 

 

AMERICAN CAPITAL SENIOR FLOATING, LTD.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

($ in thousands, except per share data)

June 30,

2015

(unaudited)

March 31, 2015

(unaudited)

December 31, 2014

 

September 30, 2014 (unaudited)

June 30, 2014 (unaudited)

Assets

Investments, fair value

$

272,191

$

272,560

$

276,370

$

293,888

$

287,533

Cash and cash equivalents

2,458

2,161

1,757

5,254

3,877

Receivable for investments sold

3,812

13,932

2,983

5,453

5

Deferred financing costs

184

281

378

477

577

Interest receivable

560

565

704

522

629

Prepaid expenses and other assets

244

351

121

167

369

Receivable from affiliate

227

245

164

283

264

Total assets

$

279,676

$

290,095

$

282,477

$

306,044

$

293,254

Liabilities

Credit facility payable

$

123,800

$

127,800

$

130,000

$

135,000

$

128,000

Payable for investments purchased

8,400

13,138

4,226

18,403

9,888

Dividends payable

970

2,900

2,900

2,800

2,800

Management fee payable

563

578

577

609

574

Interest payable

76

78

80

85

72

Taxes payable

140

70

80

10

30

Payable to affiliate

183

184

212

228

247

Other liabilities and accrued expenses

181

221

167

369

454

Total liabilities

134,313

144,969

138,242

157,504

142,065

Net Assets

Common stock, par value $0.01 per share. 10,000,100 issued and outstanding, 300,000,000 authorized

100

100

100

100

100

Paid-in capital in excess of par

151,131

151,131

151,131

149,610

149,705

Undistributed net investment income

602

293

133

593

500

Accumulated net realized (loss) / gain from investments

(981)

(1,059)

(1,366)

(66)

45

Net unrealized (depreciation) / appreciation on investments

(5,489)

(5,339)

(5,763)

(1,697)

839

Total net assets

145,363

145,126

144,235

148,540

151,189

Total liabilities and net assets

$

279,676

$

290,095

$

282,477

$

306,044

$

293,254

Net asset value per share

$

14.54

$

14.51

$

14.42

$

14.85

$

15.12

 

 

AMERICAN CAPITAL SENIOR FLOATING, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

Three Months Ended

June 30, 2015 (unaudited)

March 31, 2015 (unaudited)

December 31, 2014 (unaudited)

September 30, 2014 (unaudited)

June 30, 2014 (unaudited)

Investment income:

Interest

$

4,880

$

4,741

$

4,832

$

4,554

$

4,590

Total investment income

4,880

4,741

4,832

4,554

4,590

Expenses:

Interest and other debt related costs

758

755

790

789

781

Management fee

563

578

577

609

574

Other operating expenses

510

523

447

566

542

Total expenses

1,831

1,856

1,814

1,964

1,897

Expense waiver

(227)

(245)

(164)

(283)

(264)

Net expenses

1,604

1,611

1,650

1,681

1,633

Net investment income before taxes

3,276

3,130

3,182

2,873

2,957

Income tax (provision) / benefit

(57)

(70)

(70)

20

(30)

Net investment income

3,219

3,060

3,112

2,893

2,927

Net realized and unrealized (loss) / gain on investments:

Net realized gain / (loss) on investments

78

307

(45)

(29)

115

Net unrealized (depreciation) / appreciation on investments

(150)

424

(4,493)

(2,618)

(193)

Income tax benefit

11

Net realized and unrealized (loss) / gain on investments

(61)

731

(4,538)

(2,647)

(78)

Net increase (decrease) in net assets resulting from operations ("Earnings")

$

3,158

$

3,791

$

(1,426)

$

246

$

2,849

Net investment income per share

$

0.32

$

0.31

$

0.31

$

0.29

$

0.29

Earnings (loss) per share

$

0.32

$

0.38

$

(0.14)

$

0.02

$

0.28

Dividends per share

$

0.29

$

0.29

$

0.29

$

0.28

$

0.28

Weighted average shares outstanding

10,000

10,000

10,000

10,000

10,000

 

AMERICAN CAPITAL SENIOR FLOATING, LTD.

KEY PORTFOLIO STATISTICS

($ in thousands, except per share data)

As of June 30, 2015 (unaudited)

As of March 31, 2015 (unaudited)

As of December 31, 2014

 

As of September 30, 2014 (unaudited)

As of June 30,  2014  (unaudited)

Investment Portfolio at FMV

First Lien Floating Rate Loans

$

190,427

$

192,728

$

194,952

$

211,526

$

204,396

Second Lien Floating Rate Loans

27,914

29,079

29,841

31,977

35,404

Total Senior Floating Rate Loans

218,341

221,807

224,793

243,503

239,800

CLO Equity

53,850

50,753

51,577

50,385

47,733

Total Investment Portfolio at FMV

$

272,191

$

272,560

$

276,370

$

293,888

$

287,533

Investment Portfolio at Cost

First Lien Floating Rate Loans

$

192,480

$

194,099

$

198,028

$

212,369

$

203,526

Second Lien Floating Rate Loans

28,681

30,089

30,842

32,208

34,951

Total Senior Floating Rate Loans

221,161

224,188

228,870

244,577

238,477

CLO Equity

56,519

53,711

53,263

50,581

47,708

Total Investment Portfolio at Cost

$

277,680

$

277,899

$

282,133

$

295,158

$

286,185

Asset Yield at Cost

First Lien Floating Rate Loans

4.90

%

5.02

%

4.98

%

4.95

%

4.83

%

Second Lien Floating Rate Loans

7.79

%

7.81

%

7.81

%

7.83

%

7.87

%

Total Senior Floating Rate Loans Portfolio

5.27

%

5.39

%

5.36

%

5.33

%

5.28

%

CLO Equity

14.69

%

14.02

%

13.64

%

12.35

%

11.57

%

Total Investment Portfolio

7.19

%

7.06

%

6.92

%

6.53

%

6.33

%

Quarterly Investment Activity (1)

Investment Purchases

$

38,904

$

36,180

$

17,705

$

60,500

$

50,178

Investment Sales

$

(19,725)

$

(36,663)

$

(23,139)

$

(41,255)

$

(27,957)

Investment Repayments (2)

$

(21,363)

$

(5,777)

$

(9,111)

$

(11,616)

$

(15,634)

Loan Portfolio Statistics

Number of Obligors

127

121

117

122

108

Number of Industries

43

41

40

40

40

Largest Exposure as a % of Total Portfolio

1.3

%

1.5

%

1.4

%

1.5

%

1.6

%

Percent with LIBOR Floor

100.0

%

100.0

%

100.0

%

100.0

%

99.2

%

Weighted-average LIBOR Floor

1.0

%

1.0

%

1.0

%

1.0

%

1.0

%

CLO Portfolio Statistics

Number of Issuers

19

17

16

14

13

CLO Managers

14

13

14

12

12

Largest Exposure as a % of Total Portfolio

1.8

%

1.9

%

1.9

%

2.0

%

1.9

%

Minimum % of Collateral in 1st Lien Loans

91

%

91

%

91

%

91

%

91

%

Cumulative Cash Receipts as a % of Original Cost (3)

26.1

%

20.9

%

18.4

%

15.3

%

12.2

%

Liquidity and Capital Resources

Debt

Amount Available on Credit Facility

$

140,000

$

140,000

$

140,000

$

140,000

$

140,000

Amount Drawn on Credit Facility

$

123,800

$

127,800

$

130,000

$

135,000

$

128,000

Weighted Average Interest Rate on Debt at Period-end

1.99

%

2.02

%

1.96

%

1.95

%

1.95

%

Weighted Average Cost of Funding at Period-end (4)

2.40

%

2.40

%

2.32

%

2.28

%

2.33

%

Equity

Net Asset Value (NAV)

$

145,363

$

145,126

$

144,235

$

148,540

$

151,189

NAV Per Share

$

14.54

$

14.51

$

14.42

$

14.85

$

15.12

Debt to Equity Ratio

0.85 x

0.88 x

0.90 x

0.91 x

0.85 x

Quarterly Dividends Per Share

$

0.291

$

0.29

$

0.29

$

0.28

$

0.28

Economic Return (5)

8.70

%

10.66

%

(3.75%)

0.40

%

7.56

%

(1)

Activity presented for the fourth quarter of 2014 is unaudited.

(2)

Investment repayments include the entire amount of distributions received from the CLO equity investments.

(3)

Original cost included only for CLOs that have begun to make quarterly distributions to ACSF and are held at each period-end reporting date.  The average holding period (in years) is 1.2 as of June 30, 2015, 1.1 as of March 31, 2015, 1.0 as of December 31, 2014, 0.8 as of September 30, 2014 and 0.6 as of June 30, 2014. 

(4)

 Weighted average cost of funding includes interest cost, amortization of upfront fees and unfunded commitment fees.

(5)

Economic return defined as the dividends paid in the quarter, plus the change in NAV per share for the quarter, over the starting NAV per share.  Quarterly returns have been annualized.

SHAREHOLDER CALL ACSF invites shareholders, prospective shareholders and analysts to attend the ACSF shareholder call on August 4, 2015 at 11:00 am ET.  Callers who do not plan on asking a question and have access to the internet are encouraged to utilize the free live webcast at www.ACSF.com.  Those who do plan on participating in the Q&A or do not have the internet available may access the call by dialing (877) 274-0811 (U.S. domestic) or (412) 902-6607 (international).  Please advise the operator you are dialing in for the American Capital Senior Floating shareholder call.

A slide presentation will accompany the shareholder call and will be available at www.ACSF.com.  Select the Q2 2015 Earnings Presentation link to download and print the presentation in advance of the shareholder call.

An archived audio replay of the shareholder call combined with the slide presentation will be made available on the ACSF website after the call on August 4, 2015.  In addition, there will be a phone recording available one hour after the live call on August 4, 2015 through August 18, 2015.  If you are interested in hearing the recording of the presentation, please access it for free on the ACSF website or dial (877) 344-7529 (U.S. domestic) or (412) 317-0088 (international).  The access code for both domestic and international callers is 10068985.

For further information, please contact Investor Relations at (301) 968-9310 or IR@ACSF.com.

ABOUT AMERICAN CAPITAL SENIOR FLOATING American Capital Senior Floating, Ltd. (Nasdaq: ACSF) is a non-diversified closed-end investment management company that invests primarily in senior secured first lien and second lien floating rate loans to large, U.S. based companies ("Senior Floating Rate Loans") and in debt and equity tranches of collateralized loan obligations collateralized by Senior Floating Rate Loans.  The Company has elected to be treated as a business development company under the Investment Company Act of 1940, as amended. The Company is externally managed by American Capital ACSF Management, LLC, an indirect subsidiary of American Capital Asset Management, LLC, a wholly-owned portfolio company of American Capital, Ltd. For further information, please refer to www.ACSF.com.

ABOUT AMERICAN CAPITAL American Capital, Ltd. (Nasdaq: ACAS) is a publicly traded private equity firm and global asset manager.  American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products.  American Capital manages $23 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $92 billion of total assets under management (including levered assets).  Through a wholly owned affiliate, American Capital manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC), American Capital Mortgage Investment Corp. (Nasdaq: MTGE) and American Capital Senior Floating, Ltd. (Nasdaq: ACSF) with approximately $11 billion of total net book value.  From its eight offices in the U.S., Europe and Asia, American Capital and its wholly owned affiliate, European Capital, will consider investment opportunities from $10 million to $600 million.  For further information, please refer to www.americancapital.com.

FORWARD-LOOKING STATEMENTS This press release contains forward-looking information and statements. Forward-looking statements give the Company's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "confident," "may," "should," "can have," "likely," "future" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements are not guarantees of performance or results, and involve known and unknown risks, uncertainties (some of which are beyond the Company's control), assumptions and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Should one or more of these risks or uncertainties materialize, the Company's actual results may vary in material respects from those projected in any forward-looking statements. A detailed discussion of these and other factors that may affect future results is contained in our filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made by the Company in this press release speaks only as of the date on which it is made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

CONTACT: Investors - (301) 968-9310 Media - (301) 968-9400

SOURCE American Capital Senior Floating, Ltd.



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http://www.acsf.com