Investcorp Credit Management BDC, Inc. Reports Results for its Fiscal First Quarter Ended September 30, 2019

News provided by

Investcorp

12 Nov, 2019, 16:43 ET

NEW YORK, Nov. 12, 2019 /PRNewswire/ -- Investcorp Credit Management BDC, Inc. (NASDAQ: ICMB) ("ICMB" or the "Company") announced its financial results today for its fiscal first quarter ended September 30, 2019. The Company was formerly known as CM Finance Inc until August 30, 2019.

HIGHLIGHTS

  • ICMB made four investments in four portfolio companies. The Company invested $20.3mm during the quarter. The weighted average yield of debt investments made in the quarter was 8.18%, inclusive of funding a revolving commitment.
  • Four investments were fully realized during the quarter. These were the Company's investments in FPC Holdings, Immucor, PR Wireless, and Sears Holding Company.
  • The weighted average yield on debt investments, at cost, decreased six basis points to 10.44%, compared to 10.50% as of June 30, 2019. The change in LIBOR during the quarter accounted for a negative 26 basis point effect on the yield of the Company's debt portfolio.
  • Net asset value ("NAV") decreased $0.32 per share (or 3.04%) to $10.19, compared to $10.51 as of June 30, 2019.

Portfolio results, as of September 30, 2019:

Total assets

$319.3mm

Investment portfolio, at fair value

$302.2mm

Net assets

$138.8mm

Weighted average yield on debt investments, at cost

10.44%

Net asset value per share

$10.19

Portfolio activity in the current quarter:

Number of new investments

4

Total capital invested

$20.3mm

Proceeds from repayments, sales, and amortization

$21.5mm

Number of portfolio companies, end of period

33

Net investment income (NII)

$3.5mm

Net investment income per share

$0.26

Net decrease in net assets from operations

$0.9mm

Net decrease in net assets from operations per share

$0.07

Quarterly per share distribution paid on October 16, 2019

$0.25

Mr. Michael C. Mauer, the Company's Chief Executive Officer, said, "On August 30th, we officially became part of the Investcorp credit platform.  Our BDC was officially renamed, but our focus remains the same – originating secured lending opportunities to provide the best possible risk-adjusted returns to our stockholders.  The team and I are excited by the deal flow we are already seeing as part of a larger firm. We recognize that volatility is increasing in the leveraged finance markets and we're confident that we are very well positioned to create unique investment opportunities as the broader environment begins to shift."

On November 6, 2019, the Company's Board of Directors (the "Board") declared a distribution for the quarter ending December 31, 2019 of $0.25 per share, payable on January 2, 2020, to stockholders of record as of December 13, 2019. This represents a 14.77% yield on the Company's $6.77 share price as of market close on November 11, 2019.  Distributions may include net investment income, capital gains and/or return of capital, however, the Company does not expect the distribution to be comprised of a return of capital. The tax status of distributions will be determined at the end of the taxable year.

Portfolio and Investment Activities

During the quarter, the Company made investments in four portfolio companies, of which three were new portfolio companies, and one was an existing portfolio company. The aggregate capital invested during the quarter totaled $20.3mm at cost, and investments were made at a weighted average yield of 8.18%.

The Company realized $21.5mm of repayments, sales, and amortization, including sales of FPC Holdings, Immucor, PR Wireless, and Sears Holding Company, as well as the sale of a portion of the Company's position in Specialty Building Products Holdings. The Company realized and unrealized gains and losses accounted for a decrease in the Company's net investments of approximately $4.4mm, or $0.33 per share.  The total net decrease in net assets resulting from operations for the quarter was $0.9mm, or $0.07 per share. 

As of September 30, 2019, the Company's investment portfolio consisted of investments in 33 portfolio companies, of which 77.9% were first lien investments, 18.4% were second lien investments, and 3.7% were unitranche loans. The Company's debt portfolio consisted of 96.8% floating rate investments and 3.2% fixed rate investments.

As of September 30, 2019, the Company had one investment on non-accrual status, the Term Loan B of Fusion Connect Inc.

Capital Resources

As of September 30, 2019, the Company had $3.4mm in cash, $7.4mm in restricted cash and $11.0mm of capacity under its revolving credit facility with UBS AG, London Branch.

Subsequent Events

On October 18, 2019, the Company closed the public offering of $15mm in aggregate principal amount of additional 6.125% notes due 2023 (the "Notes").  The Notes constitute a further issuance of, rank equally in right of payment with, and form a single series with the $34.5mm in aggregate principal amount of the 6.125% Notes due 2023 that the Company initially issued on July 2, 2018 and July 12, 2018. On November 7, 2019, the underwriters exercised their option to purchase an additional $1.875 million in aggregate principal of the Notes. The total net proceeds received by the Company from the sale of the Notes, including the exercise of the underwriters' option, was approximately $16.4mm, based on the purchase price paid by the underwriters of 96.875% of the aggregate principal amount of the Notes, after deducting estimated offering expenses of approximately $255,000 payable by the Company. 

Subsequent to September 30, 2019 and through November 11, 2019, the Company invested $19.0mm in new and existing portfolio companies and received no sales proceeds. As of November 11, 2019, the Company had 35 portfolio companies. 

On November 6, 2019, the Board declared a distribution for the quarter ended December 31, 2019 of $0.25 per share payable on January 2, 2020 to stockholders of record as of December 13, 2019.

Investcorp Credit Management BDC, Inc. and Subsidiaries




Consolidated Statements of Assets and Liabilities




















September 30, 2019






(Unaudited)

June 30, 2019

Assets





Non-controlled, non-affiliated investments, at fair value (amortized cost of

$

302,204,646

$

306,390,993

         $321,790,047 and $ 321,504,359, respectively)




Cash


3,428,615

19,706,281

Cash, restricted

7,403,479

6,589,901

Receivable for investments sold

2,670,233

820,332

Interest receivable

3,321,581

3,090,639

Deferred offering costs

121,922

121,922

Prepaid expenses and other assets

179,459

227,924

         Total Assets

$

319,329,935

$

336,947,992








Liabilities





Notes payable:




         Term loan

$

122,000,000

$

122,000,000

         Revolving credit facility

19,047,551

11,026,670

         2023 Notes payable

34,500,000

34,500,000

         Deferred debt issuance costs

(1,753,135)

(2,000,262)

                  Notes payable, net

173,794,416

165,526,408

Payable for investments purchased

385,644

22,276,343

Dividend payable

3,406,383

3,404,923

Deferred financing costs payable

1,037,000

1,037,000

Income-based incentive fees payable

545,639

545,991

Base management fees payable

436,965

-

Accrued provision for taxes

-

13,778

Interest payable

836,602

724,222

Directors' fees payable

75,480

95,240

Accrued expenses and other liabilities

-

240,197

         Total Liabilities

180,518,129

193,864,102








Commitments and Contingencies (Note 6)












Net Assets





Common stock, par value $0.001 per share (100,000,000 shares authorized,




         13,625,533 and 13,619,690 shares issued and outstanding, respectively)

13,626

13,620

Additional paid-in capital

198,485,768

198,444,923

Distributable earnings (loss)

(59,687,588)

(55,374,653)

         Total Net Assets

138,811,806

143,083,890

         Total Liabilities and Net Assets

$

319,329,935

$

336,947,992

Net Asset Value Per Share

$

10.19

$

10.51
















See notes to unaudited consolidated financial statements.











Investcorp Credit Management BDC, Inc. and Subsidiaries






Consolidated Statements of Operations (Unaudited)






















For the Three months ended
September 30,






2019

2018

Investment Income:







Interest income

$

7,570,262

$

7,654,840

Payment in-kind interest income

907,777

413,620

Dividend income


-

31,275

Other fee income


80,395

155,155

         Total investment income

8,558,434

8,254,890








Expenses:







Interest expense


2,351,745

2,264,857

Base management fees 


1,355,078

1,351,855

Income-based incentive fees


-

120,321

Professional fees


309,853

232,800

Allocation of administrative costs from advisor

352,000

338,063

Amortization of deferred debt issuance costs

195,377

195,377

Insurance expense


83,762

84,440

Directors' fees


82,500

101,250

Custodian and administrator fees

129,872

7,500

Offering expense


51,750

51,750

Other expenses


156,270

119,181

         Total expenses

5,068,207

4,867,394

Waiver of base management fees

(44,183)

-

Waiver of income-based incentive fees

-

(22,000)

         Net expenses

5,024,024

4,845,394

         Net investment income

3,534,410

3,409,496

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













Net realized gain (loss) from investments

31,073

(258,192)

Net change in unrealized appreciation (depreciation) in value






     of investments

(4,472,035)

(1,723,263)

         Total realized and unrealized gain (loss) on investments

(4,440,962)

(1,981,455)

Net increase (decrease) in net assets resulting from operations







$

(906,552)

$

1,428,041









Basic and diluted:






         Net investment income per share

$

0.26

$

0.25

         Earnings per share

$

(0.07)

$

0.10

         Weighted average shares of common stock outstanding

13,625,279

13,650,097











Distributions paid per common share

$

0.25

$

0.25






















See notes to unaudited consolidated financial statements.

About Investcorp Credit Management BDC, Inc.

The Company is an externally-managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940.  The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The Company seeks to invest primarily in middle-market companies that have annual revenues of at least $50mm and earnings before interest, taxes, depreciation and amortization of at least $15mm. The Company's investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about Investcorp Credit Management BDC, Inc., please visit www.icmbdc.com.

Forward-Looking Statements

Statements included herein may contain "forward-looking statements," which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein except as required by law. All forward-looking statements speak only as of the date of this press release.

Contacts
Investcorp Credit Management BDC, Inc.
Investor Relations
Email: [email protected] 
Phone: 212-257-5199

SOURCE Investcorp

Related Links

http://icmbdc.com

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