UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the Quarter Ended September 30, 2013
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission File Number: 814-00899
TCP CAPITAL CORP.
(Exact Name of Registrant as Specified in Charter)
Delaware | 56-2594706 | |||
(State or Other Jurisdiction of Incorporation) |
(IRS Employer Identification No.) |
2951 28th Street, Suite 1000 Santa Monica, California |
90405 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code (310) 566-1000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days: Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ | Accelerated filer ¨ | |
Non-accelerated filer x | Smaller Reporting company ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x
The number of shares of the Registrant’s common stock, $0.001 par value, outstanding as of November 7, 2013 was 31,024,802.
Table of Contents
TCP CAPITAL CORP.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2013
TABLE OF CONTENTS
Page | ||||
Part I. | Financial Information | |||
Item 1. | Financial Statements | |||
Consolidated Statements of Assets and Liabilities as of September 30, 2013 (unaudited) and December 31, 2012 | 2 | |||
Consolidated Statements of Investments as of September 30, 2013 (unaudited) and December 31, 2012 | 3 | |||
Consolidated Statements of Operations for the three and nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited) | 15 | |||
Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2013 (unaudited) and year ended December 31, 2012 | 16 | |||
Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited) | 17 | |||
Notes to Consolidated Financial Statements (unaudited) | 18 | |||
Consolidated Schedule of Changes in Investments in Affiliates for the nine months ended September 30, 2013 (unaudited) and year ended December 31, 2012 | 35 | |||
Consolidated Schedule of Restricted Securities of Unaffiliated Issuers as of September 30, 2013 (unaudited) and December 31, 2012 | 37 | |||
Consolidating Statement of Assets and Liabilities as of September 30, 2013 (unaudited) and December 31, 2012 | 38 | |||
Consolidating Statement of Operations for the nine months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited) | 40 | |||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 42 | ||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 54 | ||
Item 4. | Controls and Procedures | 55 | ||
Part II. | Other Information | |||
Item 1. | Legal Proceedings | 55 | ||
Item 1A. | Risk Factors | 55 | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 55 | ||
Item 3. | Defaults upon Senior Securities | 55 | ||
Item 4. | Mine Safety Disclosures | 55 | ||
Item 5. | Other Information | 55 | ||
Item 6. | Exhibits | 55 |
1 |
TCP Capital Corp.
Consolidated Statements of Assets and Liabilities
September 30, 2013 | December 31, 2012 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Investments, at fair value: | ||||||||
Unaffiliated issuers (cost of $690,002,299 and $508,302,758, respectively) | $ | 633,694,938 | $ | 440,772,190 | ||||
Controlled companies (cost of $43,182,589 and $44,964,189 respectively) | 19,657,258 | 22,489,208 | ||||||
Other affiliates (cost of $53,463,548 and $55,803,421, respectively) | 50,743,291 | 54,421,689 | ||||||
Total investments (cost of $786,648,436 and $609,070,368, respectively) | 704,095,487 | 517,683,087 | ||||||
Cash and cash equivalents | 12,566,659 | 18,035,189 | ||||||
Accrued interest income: | ||||||||
Unaffiliated issuers | 6,385,367 | 4,039,149 | ||||||
Controlled companies | 44,775 | 53,524 | ||||||
Other affiliates | 803,786 | 482,634 | ||||||
Deferred debt issuance costs | 3,284,278 | 696,018 | ||||||
Receivable for investments sold | 1,287,801 | 7,727,415 | ||||||
Unrealized appreciation on swaps | 52,694 | 179,364 | ||||||
Options (cost $51,750) | 19,152 | - | ||||||
Prepaid expenses and other assets | 716,981 | 345,722 | ||||||
Total assets | 729,256,980 | 549,242,102 | ||||||
Liabilities | ||||||||
Debt | 150,000,000 | 74,000,000 | ||||||
Payable for investments purchased | 36,918,454 | 21,814,819 | ||||||
Incentive allocation payable | 2,694,156 | - | ||||||
Interest payable | 289,907 | 119,233 | ||||||
Payable to the Investment Manager | 280,451 | 109,200 | ||||||
Accrued expenses and other liabilities | 2,158,495 | 2,685,015 | ||||||
Total liabilities | 192,341,463 | 98,728,267 | ||||||
Preferred equity facility | ||||||||
Series A preferred limited partner interests in Special Value Continuation Partners, LP; $20,000/interest liquidation preference; 6,700 interests authorized, issued and outstanding | 134,000,000 | 134,000,000 | ||||||
Accumulated dividends on Series A preferred equity facility | 534,213 | 526,285 | ||||||
Total preferred limited partner interests | 134,534,213 | 134,526,285 | ||||||
Non-controlling interest | ||||||||
General Partner interest in Special Value Continuation Partners, LP | 877,563 | - | ||||||
Net assets applicable to common shareholders | $ | 401,503,741 | $ | 315,987,550 | ||||
Composition of net assets applicable to common shareholders | ||||||||
Common stock, $0.001 par value; 200,000,000 shares authorized, 26,654,802 and 21,477,628 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively | 26,655 | 21,478 | ||||||
Paid-in capital in excess of par | 522,441,180 | 444,234,060 | ||||||
Accumulated net investment income | 25,069,435 | 22,526,179 | ||||||
Accumulated net realized losses | (62,109,479 | ) | (59,023,861 | ) | ||||
Accumulated net unrealized depreciation | (83,046,487 | ) | (91,770,306 | ) | ||||
Non-controlling interest | (877,563 | ) | - | |||||
Net assets applicable to common shareholders | $ | 401,503,741 | $ | 315,987,550 | ||||
Net assets per share | $ | 15.06 | $ | 14.71 |
See accompanying notes.
2 |
TCP Capital Corp.
Consolidated Statement of Investments (Unaudited)
September 30, 2013
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Principal | Fair | Cash and | ||||||||||||||
Investment | Amount | Cost | Value | Investments | ||||||||||||
Debt Investments (92.85%) | ||||||||||||||||
Bank Debt (76.59%) (1) | ||||||||||||||||
Accounting, Tax Preparation, Bookkeeping, and Payroll Services (1.16%) | ||||||||||||||||
Expert Global Solutions, LLC, Senior Secured 1st Lien Term Loan B, LIBOR + 7.25%, 1.25% LIBOR Floor, due 4/3/18 | $ | 704,837 | $ | 702,697 | $ | 718,934 | 0.10 | % | ||||||||
Expert Global Solutions, LLC, Senior Secured 2nd Lien Term Loan, LIBOR + 11%, 1.5% LIBOR Floor, due 10/3/18 | $ | 7,434,877 | 7,220,292 | 7,561,270 | 1.06 | % | ||||||||||
Total Accounting, Tax Preparation, Bookkeeping, and Payroll Services | 7,922,989 | 8,280,204 | ||||||||||||||
Artificial Synthetic Fibers and Filaments Manufacturing (0.29%) | ||||||||||||||||
AGY Holding Corp., Senior Secured Term Loan, 12%, due 9/15/16 (2) | $ | 2,056,927 | 2,056,927 | 2,056,927 | 0.29 | % | ||||||||||
Business Support Services (2.09%) | ||||||||||||||||
STG-Fairway Acquisitions, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 9.25%, 1.25% LIBOR Floor, due 8/28/19 | $ | 14,643,455 | 13,922,519 | 15,009,541 | 2.09 | % | ||||||||||
Chemical Manufacturing (2.42%) | ||||||||||||||||
Archroma, Senior Secured Lien Term Loan B, LIBOR + 8.25%, 1.25% LIBOR Floor, due 9/30/18 | $ | 17,500,000 | 17,150,000 | 17,325,000 | 2.42 | % | ||||||||||
Computer Equipment Manufacturing (1.17%) | ||||||||||||||||
ELO Touch Solutions, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 10.5%, 1.5% LIBOR Floor, due 12/1/18 | $ | 10,000,000 | 9,654,753 | 8,400,000 | 1.17 | % | ||||||||||
Converted Paper Products Manufacturing (0.50%) | ||||||||||||||||
Ranpak Corp., Senior Secured 2nd Lien Term Loan, LIBOR + 7.25%, 1.25% LIBOR Floor, due 4/23/20 | $ | 3,469,573 | 3,434,877 | 3,556,313 | 0.50 | % | ||||||||||
Computer Systems Design and Related Services (5.36%) | ||||||||||||||||
Blue Coat Systems, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 8.5%, 1% LIBOR Floor, due 6/28/20 | $ | 15,000,000 | 14,878,125 | 15,112,500 | 2.11 | % | ||||||||||
Onx Enterprise Solutions, Ltd, Senior Secured 1st Lien Term Loan, LIBOR + 7% , due 9/3/18 LIBOR + 7% , due 9/3/18 | $ | 10,666,667 | 10,509,574 | 10,746,667 | 1.49 | % | ||||||||||
Onx USA, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 7% , due 9/3/18 | $ | 5,333,333 | 5,254,787 | 5,373,333 | 0.75 | % | ||||||||||
Websense, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 7.25%, 1% LIBOR Floor, due 12/27/20 | $ | 7,200,000 | 7,164,000 | 7,209,000 | 1.01 | % | ||||||||||
Total Computer Systems Design and Related Services | 37,806,486 | 38,441,500 | ||||||||||||||
Drugs and Druggists' Sundries Merchant Wholesalers (1.27%) | ||||||||||||||||
Envision Acquisition Company, LLC, 2nd Lien Term Loan, LIBOR + 8.75%, 1% LIBOR Floor, due 9/23/21 | $ | 9,079,011 | 8,897,430 | 9,067,662 | 1.27 | % | ||||||||||
Electric Power Generation, Transmission and Distribution (2.41%) | ||||||||||||||||
Panda Sherman Power, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 7.5%, 1.5% LIBOR Floor, due 9/14/18 | $ | 11,070,172 | 10,926,683 | 11,236,225 | 1.57 | % | ||||||||||
Panda Temple Power II, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 6%, 1.25% LIBOR Floor, due 4/3/19 | $ | 5,892,970 | 5,834,041 | 5,999,780 | 0.84 | % | ||||||||||
Total Electric Power Generation, Transmission and Distribution | 16,760,724 | 17,236,005 | ||||||||||||||
Electrical Equipment and Component Manufacturing (2.33%) | ||||||||||||||||
Palladium Energy, Inc., 1st Lien Senior Secured Term Loan, LIBOR + 9%, 1% LIBOR Floor, due 12/26/17 | $ | 16,500,317 | 16,212,713 | 16,714,821 | 2.33 | % | ||||||||||
Electronic Shopping (1.06%) | ||||||||||||||||
Shopzilla, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 9.5%, due 3/31/16 | $ | 7,606,723 | 7,368,382 | 7,606,723 | 1.06 | % | ||||||||||
Financial Investment Activities (0.30%) | ||||||||||||||||
Marsico Capital Management, Senior Secured 1st Lien Term Loan, LIBOR + 5%, due 12/31/22 | $ | 10,654,939 | 13,415,987 | 2,184,263 | 0.30 | % | ||||||||||
Freight Transportation Arrangement (0.53%) | ||||||||||||||||
Livingston International, Inc., 2nd Lien Term Loan, LIBOR + 7.75%, 1.25% LIBOR Floor, due 4/18/20 | $ | 3,750,000 | 3,678,794 | 3,775,781 | 0.53 | % | ||||||||||
Full-Service Restaurants (2.41%) | ||||||||||||||||
RM Holdco, LLC, Subordinated Convertible Term Loan, 1.12% PIK, due 3/21/18 (2) | $ | 5,106,805 | 5,106,805 | 3,516,036 | 0.49 | % | ||||||||||
RM OpCo, LLC, Convertible 1st Lien Term Loan Tranche B-1, 12% Cash + 7% PIK, due 3/21/16 (2) | $ | 1,332,013 | 1,299,048 | 1,332,013 | 0.19 | % | ||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche A, 11%, due 3/21/16 (2) | $ | 3,682,296 | 3,682,296 | 3,682,296 | 0.51 | % | ||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche B, 12% Cash + 7% PIK, due 3/21/16 (2) | $ | 6,631,746 | 6,631,746 | 6,631,746 | 0.93 | % | ||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche B-1, 12% Cash + 7% PIK, due 3/21/16 (2) | $ | 2,090,096 | 2,045,422 | 2,090,096 | 0.29 | % | ||||||||||
Total Full-Service Restaurants | 18,765,317 | 17,252,187 |
3 |
TCP Capital Corp.
Consolidated Statement of Investments (Unaudited) (Continued)
September 30, 2013
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Principal | Fair | Cash and | ||||||||||||||
Investment | Amount | Cost | Value | Investments | ||||||||||||
Debt Investments (continued) | ||||||||||||||||
Gaming Industries (2.14%) | ||||||||||||||||
AGS LLC, 1st Lien Term Loan, LIBOR + 10%, 1.5% LIBOR Floor, due 8/15/16 | $ | 13,269,231 | $ | 12,865,029 | $ | 13,561,154 | 1.89 | % | ||||||||
AGS LLC, DDTL 1st Lien Term Loan, LIBOR + 10%, 1.5% LIBOR Floor, due 8/15/16 | $ | 1,730,769 | 1,672,303 | 1,768,846 | 0.25 | % | ||||||||||
Total Gaming Industries | 14,537,332 | 15,330,000 | ||||||||||||||
Grocery Stores (2.12%) | ||||||||||||||||
Bashas, Inc., Senior Secured 1st Lien FILO Term Loan, LIBOR + 9.35%, 1.5% LIBOR Floor, due 12/28/15 | $ | 14,952,340 | 14,910,425 | 15,176,625 | 2.12 | % | ||||||||||
Inland Water Transportation (1.81%) | ||||||||||||||||
US Shipping Corp, Senior Secured 1st Lien Term Loan B, LIBOR + 7.75%, 1.25% LIBOR Floor, due 4/30/18 | $ | 12,635,000 | 12,508,650 | 12,950,875 | 1.81 | % | ||||||||||
Insurance Related Activities (0.89%) | ||||||||||||||||
Confie Seguros Holding II Co., 2nd Lien Term Loan, LIBOR + 9%, 1.25% LIBOR Floor, due 5/8/19 | $ | 6,341,809 | 6,242,396 | 6,377,482 | 0.89 | % | ||||||||||
Iron and Steel Mills and Ferroalloy Manufacturing (0.66%) | ||||||||||||||||
Essar Steel Algoma, Inc., Senior Secured Term Loan, LIBOR + 7.5%, 1.25% LIBOR Floor, due 9/20/14 | $ | 4,633,352 | 4,587,939 | 4,717,911 | 0.66 | % | ||||||||||
Motion Picture and Video Industries (2.15%) | ||||||||||||||||
CORE Entertainment, Inc., Senior Secured 1st Lien Term Loan, 9%, due 6/21/17 | $ | 9,462,231 | 9,376,143 | 8,563,319 | 1.19 | % | ||||||||||
CORE Entertainment, Inc., Senior Secured 2nd Lien Term Loan, 13.5%, due 6/21/18 | $ | 7,569,785 | 7,498,335 | 6,880,935 | 0.96 | % | ||||||||||
Total Motion Picture and Video Industries | 16,874,478 | 15,444,254 | ||||||||||||||
Newspaper, Periodical, Book, and Directory Publishers (4.31%) | ||||||||||||||||
Hanley-Wood, LLC, 1st Lien FILO Term Loan, LIBOR + 6.75%, 1.25% LIBOR Floor, due 7/15/18 | $ | 16,853,800 | 16,853,800 | 16,659,981 | 2.32 | % | ||||||||||
MediMedia USA, Inc., 1st Lien Revolver, LIBOR + 6.75%, due 5/20/18 | $ | 5,270,000 | 4,107,500 | 4,833,908 | 0.67 | % | ||||||||||
MediMedia USA, Inc., 1st Lien Term Loan, LIBOR + 6.75%, 1.25% LIBOR Floor, due 11/20/18 | $ | 9,725,625 | 9,445,718 | 9,482,484 | 1.32 | % | ||||||||||
Total Newspaper, Periodical, Book, and Directory Publishers | 30,407,018 | 30,976,373 | ||||||||||||||
Nonresidential Building Construction (1.40%) | ||||||||||||||||
NCM Group Holdings, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 11.5%, 1% LIBOR Floor, due 8/29/18 | $ | 10,000,000 | 9,607,266 | 10,020,000 | 1.40 | % | ||||||||||
Oil and Gas Extraction (2.17%) | ||||||||||||||||
Willbros Group, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 9.75%, 1.25% LIBOR Floor, due 8/7/19 | $ | 15,464,780 | 15,089,437 | 15,565,301 | 2.17 | % | ||||||||||
Other Amusement and Recreation Industries (1.66%) | ||||||||||||||||
Intrawest Cayman L.P., 1st Lien Term Loan, LIBOR + 5.75%, 1.25% LIBOR Floor, due 12/4/17 - (Cayman Islands) | $ | 1,240,625 | 1,224,626 | 1,259,234 | 0.18 | % | ||||||||||
Intrawest Cayman L.P., 2nd Lien Term Loan, LIBOR + 9.5%, 1.25% LIBOR Floor, due 12/4/18 - (Cayman Islands) | $ | 10,250,000 | 10,020,472 | 10,617,258 | 1.48 | % | ||||||||||
Total Other Amusement and Recreation Industries | 11,245,098 | 11,876,492 | ||||||||||||||
Other Telecommunications (1.93%) | ||||||||||||||||
Securus Technologies, Inc., 2nd Lien Term Loan, LIBOR + 7.75%, 1.25% LIBOR Floor, due 4/30/21 | $ | 14,000,000 | 13,860,000 | 13,807,570 | 1.93 | % | ||||||||||
Petroleum and Coal Products Manufacturing (1.12%) | ||||||||||||||||
Boomerang Tube, LLC, 2nd Lien Term Loan, LIBOR + 9.5%, 1.5% LIBOR Floor, due 10/11/17 | $ | 8,199,092 | 7,992,438 | 7,994,115 | 1.12 | % | ||||||||||
Professional, Scientific, and Technical Services (3.56%) | ||||||||||||||||
Connolly, LLC, Senior Secured 2nd Lien Term Loan, LIBOR + 9.25%, 1.25% LIBOR Floor, due 7/15/19 | $ | 12,000,000 | 11,823,991 | 12,150,000 | 1.70 | % | ||||||||||
ConvergeOne Holdings, 1st Lien Term Loan, LIBOR + 8%, 1.25% LIBOR Floor, due 5/8/19 | $ | 13,398,750 | 13,197,769 | 13,315,008 | 1.86 | % | ||||||||||
Total Professional, Scientific, and Technical Services | 25,021,760 | 25,465,008 | ||||||||||||||
Promoters of Performing Arts, Sports, and Similar Events (1.53%) | ||||||||||||||||
Stadium Management Group, Senior Secured 2nd Lien Term Loan, LIBOR + 9.50%, 1.25% LIBOR Floor, due 12/7/18 | $ | 11,000,000 | 10,810,717 | 11,000,000 | 1.53 | % |
4 |
TCP Capital Corp.
Consolidated Statement of Investments (Unaudited) (Continued)
September 30, 2013
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Principal | Fair | Cash and | ||||||||||||||
Investment | Amount | Cost | Value | Investments | ||||||||||||
Debt Investments (continued) | ||||||||||||||||
Radio and Television Broadcasting (3.38%) | ||||||||||||||||
SiTV, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 6% Cash + 4% PIK, 2% LIBOR Floor, due 8/3/16 | $ | 6,963,670 | $ | 6,606,633 | $ | 6,695,569 | 0.93 | % | ||||||||
The Tennis Channel, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 8.5%, due 5/29/17 | $ | 17,411,475 | 16,932,362 | 17,542,061 | 2.45 | % | ||||||||||
Total Radio and Television Broadcasting | 23,538,995 | 24,237,630 | ||||||||||||||
Retail (1.59%) | ||||||||||||||||
Kenneth Cole Productions, Inc., Senior Secured 1st Lien FILO Term Loan, LIBOR + 10.40%, 1% LIBOR Floor, due 9/25/17 | $ | 11,272,727 | 11,039,147 | 11,385,454 | 1.59 | % | ||||||||||
Scheduled Air Transportation (1.89%) | ||||||||||||||||
Aircraft Secured Mortgages - Aircraft Leased to Delta Air Lines, Inc. | ||||||||||||||||
N913DL, 8%, due 3/15/17 (6) | $ | 309,009 | 309,009 | 312,630 | 0.04 | % | ||||||||||
N918DL, 8%, due 8/15/18 (6) | $ | 405,670 | 405,670 | 406,810 | 0.06 | % | ||||||||||
N954DL, 8%, due 3/20/19 (6) | $ | 534,674 | 534,674 | 533,120 | 0.07 | % | ||||||||||
N955DL, 8%, due 6/20/19 (6) | $ | 552,809 | 552,809 | 549,950 | 0.08 | % | ||||||||||
N956DL, 8%, due 5/20/19 (6) | $ | 552,126 | 552,126 | 549,780 | 0.08 | % | ||||||||||
N957DL, 8%, due 6/20/19 (6) | $ | 557,644 | 557,644 | 554,710 | 0.08 | % | ||||||||||
N959DL, 8%, due 7/20/19 (6) | $ | 563,117 | 563,117 | 559,810 | 0.08 | % | ||||||||||
N960DL, 8%, due 10/20/19 (6) | $ | 584,112 | 584,112 | 579,360 | 0.08 | % | ||||||||||
N961DL, 8%, due 8/20/19 (6) | $ | 578,149 | 578,149 | 574,430 | 0.08 | % | ||||||||||
N976DL, 8%, due 2/15/18 (6) | $ | 414,871 | 414,871 | 417,690 | 0.06 | % | ||||||||||
Aircraft Secured Mortgages - Aircraft Leased to United Airlines, Inc. | ||||||||||||||||
N510UA, 20%, due 10/26/16 (2) | $ | 350,779 | 350,779 | 432,155 | 0.06 | % | ||||||||||
N512UA, 20%, due 10/26/16 (2) | $ | 355,995 | 355,995 | 440,895 | 0.06 | % | ||||||||||
N536UA, 16%, due 9/29/14 (2) | $ | 146,778 | 146,778 | 155,325 | 0.02 | % | ||||||||||
N545UA, 16%, due 8/29/15 (2) | $ | 283,688 | 283,688 | 314,355 | 0.04 | % | ||||||||||
N585UA, 20%, due 10/25/16 (2) | $ | 417,991 | 417,991 | 517,750 | 0.07 | % | ||||||||||
N659UA, 12%, due 2/28/16 (6) | $ | 2,969,265 | 2,969,265 | 3,220,168 | 0.45 | % | ||||||||||
N661UA, 12%, due 5/4/16 (6) | $ | 3,133,414 | 3,133,414 | 3,433,856 | 0.48 | % | ||||||||||
Total Scheduled Air Transportation | 12,710,091 | 13,552,794 | ||||||||||||||
Semiconductor and Other Electronic Component Manufacturing (1.95%) | ||||||||||||||||
Isola USA Corporation, 1st Lien Term Loan, LIBOR + 8%, 2% LIBOR Floor, due 9/30/15 | $ | 14,000,000 | 13,975,000 | 14,000,000 | 1.95 | % | ||||||||||
Software Publishers (7.72%) | ||||||||||||||||
BlackLine Systems, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 0.4% Cash + 7.6% PIK, 1.5% LIBOR Floor, due 9/25/18 | $ | 12,327,311 | 11,558,608 | 11,797,237 | 1.65 | % | ||||||||||
Coreone Technologies, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 3.75% Cash + 5% PIK, 1% LIBOR Floor, due 9/4/18 | $ | 13,385,761 | 13,058,716 | 13,345,603 | 1.86 | % | ||||||||||
Deltek, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 8.75%, 1.25% LIBOR Floor, due 10/10/19 | $ | 15,000,000 | 14,799,078 | 15,131,325 | 2.11 | % | ||||||||||
Edmentum, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 9.75%, 1.5% LIBOR Floor due 5/17/19 | $ | 15,000,000 | 14,740,242 | 15,037,500 | 2.10 | % | ||||||||||
Total Software Publishers | 54,156,644 | 55,311,665 | ||||||||||||||
Specialty Hospitals (0.77%) | ||||||||||||||||
UBC Healthcare Analytics, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 9%, 1% LIBOR Floor, due 7/1/18 | $ | 5,526,021 | 5,498,391 | 5,503,917 | 0.77 | % | ||||||||||
Textile Furnishings Mills (2.29%) | ||||||||||||||||
Lexmark Carpet Mills, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 10%, 1% LIBOR Floor, due 9/30/18 | $ | 16,351,467 | 15,942,680 | 16,400,522 | 2.29 | % | ||||||||||
Wired Telecommunications Carriers (2.88%) | ||||||||||||||||
Bulgaria Telecom Company AD, 1st Lien Facility 1A Term Loan, EURIBOR + 5.5%, due 11/9/17 - (Bulgaria) (4) | € | 3,228,624 | 3,488,734 | 4,096,584 | 0.57 | % | ||||||||||
Integra Telecom Holdings, Inc., 2nd Lien Term Loan, LIBOR + 8.5%, 1.25% LIBOR Floor, due 2/22/20 | $ | 15,000,000 | 14,692,351 | 15,434,775 | 2.14 | % | ||||||||||
Viva Telecom Bulgaria EAD, 1st Lien Facility 1B Term Loan, EURIBOR + 5.5%, due 11/9/17 - (Luxembourg) (4) | € | 970,906 | 1,049,125 | 1,231,917 | 0.17 | % | ||||||||||
Total Wired Telecommunications Carriers | 19,230,210 | 20,763,276 |
5 |
TCP Capital Corp.
Consolidated Statement of Investments (Unaudited) (Continued)
September 30, 2013
Showing Percentage of Total Cash and Investments of the Company
Principal | Percent of | |||||||||||||||
Amount or | Fair | Cash and | ||||||||||||||
Investment | Shares | Cost | Value | Investments | ||||||||||||
Debt Investments (continued) | ||||||||||||||||
Wireless Telecommunications Carriers (3.37%) | ||||||||||||||||
Globalive Wireless Management Corp., Senior Secured 1st Lien Term Loan, LIBOR + 10.9%, due 4/30/14 - (Canada) | $ | 3,037,292 | $ | 2,933,872 | $ | 3,067,665 | 0.43 | % | ||||||||
Gogo, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 9.75%, 1.5% LIBOR Floor, due 6/21/17 | $ | 19,713,500 | 18,827,593 | 21,093,446 | 2.94 | % | ||||||||||
Total Wireless Telecommunications Carriers | 21,761,465 | 24,161,111 | ||||||||||||||
Total Bank Debt | 548,595,475 | 548,925,302 | ||||||||||||||
Other Corporate Debt Securities (16.26%) | ||||||||||||||||
Architectural, Engineering, and Related Services (1.06%) | ||||||||||||||||
ESP Holdings, Inc., Junior Unsecured Subordinated Promissory Notes, 6% Cash + 10% PIK, due 12/31/19 (2), (5) | $ | 7,574,339 | 7,574,339 | 7,574,339 | 1.06 | % | ||||||||||
Artificial Synthetic Fibers and Filaments Manufacturing (1.27%) | ||||||||||||||||
AGY Holding Corporation, Senior Secured 2nd Lien Notes, 11%, due 11/15/16 (2), (5) | $ | 9,268,000 | 7,586,317 | 9,124,346 | 1.27 | % | ||||||||||
Beverage Manufacturing (1.12%) | ||||||||||||||||
Carolina Beverage Group, LLC, Secured Notes, 10.625%, due 8/1/18 (5) | $ | 7,780,000 | 7,780,000 | 7,993,950 | 1.12 | % | ||||||||||
Data Processing, Hosting, and Related Services (1.06%) | ||||||||||||||||
The Telx Group, Inc., Senior Unsecured Notes, 10% Cash + 2% PIK, due 9/26/19 (5) | $ | 7,063,598 | 6,925,117 | 7,628,686 | 1.06 | % | ||||||||||
Fabricated Metal Product Manufacturing (1.48%) | ||||||||||||||||
Constellation Enterprises, LLC, Senior Secured 1st Lien Notes, 10.625%, due 2/1/16 (5) | $ | 12,500,000 | 12,322,875 | 10,500,000 | 1.48 | % | ||||||||||
Metal Ore Mining (0.90%) | ||||||||||||||||
St Barbara Ltd., 1st Priority Senior Secured Notes, 8.875%, due 4/15/18 (5) | $ | 7,359,000 | 7,324,728 | 6,475,920 | 0.90 | % | ||||||||||
Nondepository Credit Intermediation (1.49%) | ||||||||||||||||
Caribbean Financial Group, Senior Secured Notes, 11.5%, due 11/15/19 (5) | $ | 10,000,000 | 9,818,866 | 10,700,000 | 1.49 | % | ||||||||||
Plastics Products Manufacturing (1.99%) | ||||||||||||||||
Iracore International, Inc., Senior Secured Notes, 9.5%, due 6/1/18 (5) | $ | 13,600,000 | 13,600,000 | 14,242,248 | 1.99 | % | ||||||||||
Satellite Telecommunications (1.40%) | ||||||||||||||||
Avanti Communications Group, PLC, Senior Secured Notes, 10%, due 10/1/19 (5) | $ | 9,914,000 | 9,914,000 | 10,062,710 | 1.40 | % | ||||||||||
Scientific Research and Development Services (2.40%) | ||||||||||||||||
BPA Laboratories, Inc., Senior Secured Notes, 12.25%, due 4/1/17 (5) | $ | 17,200,000 | 16,536,295 | 17,200,000 | 2.40 | % | ||||||||||
Structured Note Funds (2.09%) | ||||||||||||||||
Magnolia Finance V plc, Asset-Backed Credit Linked Notes, 13.125%, due 8/2/21 (5) | $ | 15,000,000 | 15,000,000 | 15,000,000 | 2.09 | % | ||||||||||
Total Other Corporate Debt Securities | 114,382,537 | 116,502,199 | ||||||||||||||
Total Debt Investments | 662,978,012 | 665,427,501 | ||||||||||||||
Equity Securities (5.40%) | ||||||||||||||||
Architectural, Engineering, and Related Services (0.94%) | ||||||||||||||||
ESP Holdings, Inc., Cumulative Preferred 15% (2), (3), (5) | 20,297 | 2,249,930 | 3,947,862 | 0.54 | % | |||||||||||
ESP Holdings, Inc., Common Stock (2), (3), (5) | 88,670 | 9,311,782 | 2,864,872 | 0.40 | % | |||||||||||
Total Architectural, Engineering, and Related Services | 11,561,712 | 6,812,734 | ||||||||||||||
Business Support Services (0.18%) | ||||||||||||||||
STG-Fairway Holdings, LLC, Class A Units (3), (5) | 80,396 | 1,100,348 | 1,310,535 | 0.18 | % | |||||||||||
Data Processing, Hosting, and Related Services (0.14%) | ||||||||||||||||
Anacomp, Inc., Class A Common Stock (3), (5), (6) | 1,255,527 | 26,711,048 | 1,016,977 | 0.14 | % | |||||||||||
Depository Credit Intermediation (0.14%) | ||||||||||||||||
Doral Financial Corporation, Common Stock (3) | 53,890 | 11,699,417 | 1,028,216 | 0.14 | % | |||||||||||
Electric Power Generation, Transmission and Distribution (0.00%) | ||||||||||||||||
La Paloma Residual Bank Debt Claim (3), (5) | 1,830,453 | 1,486,222 | 18 | 0.00 | % |
6 |
TCP Capital Corp.
Consolidated Statement of Investments (Unaudited) (Continued)
September 30, 2013
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Fair | Cash and | |||||||||||||||
Investment | Shares | Cost | Value | Investments | ||||||||||||
Equity Securities (continued) | ||||||||||||||||
Electronic Shopping (0.15%) | ||||||||||||||||
Shop Holding, LLC, Class A Units (3), (5) | 490,037 | $ | 462,576 | $ | 876,641 | 0.11 | % | |||||||||
Shop Holding, LLC, Warrants to Purchase Class A Units (3), (5) | 326,691 | - | 257,742 | 0.04 | % | |||||||||||
Total Electronic Shopping | 462,576 | 1,134,383 | ||||||||||||||
Financial Investment Activities (0.00%) | ||||||||||||||||
Marsico Holdings, LLC, Common Interest Units (3), (5) | 168,698 | 172,694 | 9,278 | - | ||||||||||||
Full-Service Restaurants (0.00%) | ||||||||||||||||
RM Holdco, LLC, Membership Units (2), (3), (5) | 13,161,000 | 2,010,777 | - | - | ||||||||||||
Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing (0.00%) | ||||||||||||||||
Precision Holdings, LLC, Class C Membership Interests (3), (5) | 33 | 1,396 | 22,295 | - | ||||||||||||
Nonmetallic Mineral Mining and Quarrying (0.22%) | ||||||||||||||||
EPMC HoldCo, LLC, Membership Units (2), (5) | 1,312,720 | - | 1,562,137 | 0.22 | % | |||||||||||
Other Amusement and Recreation Industries (0.01%) | ||||||||||||||||
Bally Total Fitness Holding Corporation, Common Stock (3), (5) | 10,315 | 45,186,963 | 51,575 | 0.01 | % | |||||||||||
Bally Total Fitness Holding Corporation, Warrants (3), (5) | 18,394 | - | 2 | - | ||||||||||||
Total Other Amusement and Recreation Industries | 45,186,963 | 51,577 | ||||||||||||||
Radio and Television Broadcasting (0.05%) | ||||||||||||||||
SiTV, Inc., Warrants to Purchase Common Stock (3), (5) | 233,470 | 300,322 | 361,879 | 0.05 | % | |||||||||||
Scheduled Air Transportation (1.40%) | ||||||||||||||||
Equipment Trusts - Aircraft Leased to Delta Air Lines, Inc. | ||||||||||||||||
N913DL Trust Beneficial Interests (5), (6) | 660 | 100,924 | 127,840 | 0.02 | % | |||||||||||
N918DL Trust Beneficial Interests (5), (6) | 574 | 114,603 | 144,330 | 0.02 | % | |||||||||||
N954DL Trust Beneficial Interests (5), (6) | 548 | 139,665 | 67,150 | 0.01 | % | |||||||||||
N955DL Trust Beneficial Interests (5), (6) | 535 | 140,951 | 114,070 | 0.02 | % | |||||||||||
N956DL Trust Beneficial Interests (5), (6) | 538 | 141,032 | 109,140 | 0.02 | % | |||||||||||
N957DL Trust Beneficial Interests (5), (6) | 535 | 141,952 | 110,160 | 0.02 | % | |||||||||||
N959DL Trust Beneficial Interests (5), (6) | 532 | 142,867 | 111,010 | 0.02 | % | |||||||||||
N960DL Trust Beneficial Interests (5), (6) | 524 | 146,586 | 117,980 | 0.02 | % | |||||||||||
N961DL Trust Beneficial Interests (5), (6) | 530 | 145,765 | 120,360 | 0.02 | % | |||||||||||
N976DL Trust Beneficial Interests (5), (6) | 599 | 118,542 | 103,190 | 0.01 | % | |||||||||||
Equipment Trusts - Aircraft Leased to United Airlines, Inc. | ||||||||||||||||
N510UA Trust Beneficial Interests (2), (5) | 51 | 184,456 | 482,632 | 0.07 | % | |||||||||||
N512UA Trust Beneficial Interests (2), (5) | 50 | 180,417 | 475,760 | 0.07 | % | |||||||||||
N536UA Trust Beneficial Interests (2), (5) | 76 | 369,656 | 665,221 | 0.09 | % | |||||||||||
N545UA Trust Beneficial Interests (2), (5) | 63 | 325,962 | 655,903 | 0.09 | % | |||||||||||
N585UA Trust Beneficial Interests (2), (5) | 50 | 201,234 | 588,050 | 0.08 | % | |||||||||||
United N659UA-767, LLC (N659UA) (5), (6) | 386 | 2,005,203 | 2,906,192 | 0.41 | % | |||||||||||
United N661UA-767, LLC (N661UA) (5), (6) | 375 | 1,978,592 | 2,916,543 | 0.41 | % | |||||||||||
Total Scheduled Air Transportation | 6,578,407 | 9,815,531 | ||||||||||||||
Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing (0.23%) | ||||||||||||||||
KAGY Holding Company, Inc., Series A Preferred Stock (2), (3), (5) | 9,777,740 | 1,091,200 | 1,632,576 | 0.23 | % | |||||||||||
Semiconductor and Other Electronic Component Manufacturing (0.03%) | ||||||||||||||||
AIP/IS Holdings, LLC, Membership Units (3), (5) | 352 | - | 229,504 | 0.03 | % | |||||||||||
Software Publishers (0.08%) | ||||||||||||||||
SLS Breeze Intermediate Holdings, Inc., Warrants to Purchase Common Stock (3), (5) | 1,232,731 | 522,678 | 540,429 | 0.08 | % | |||||||||||
Support Activities for Mining (0.51%) | ||||||||||||||||
DeepOcean Group Holding BV, Common Stock - (Norway) (3), (5) | 145,824 | 3,094,604 | 3,631,017 | 0.51 | % |
7 |
TCP Capital Corp.
Consolidated Statement of Investments (Unaudited) (Continued)
September 30, 2013
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Fair | Cash and | |||||||||||||||
Investment | Shares | Cost | Value | Investments | ||||||||||||
Equity Securities (continued) | ||||||||||||||||
Wired Telecommunications Carriers (1.32%) | ||||||||||||||||
Integra Telecom, Inc., Common Stock (3), (5) | 1,274,522 | $ | 8,433,884 | $ | 5,606,832 | 0.77 | % | |||||||||
Integra Telecom, Inc., Warrants (3), (5) | 346,939 | 19,920 | 205,050 | 0.03 | % | |||||||||||
V Telecom Investment S.C.A, Common Shares - (Luxembourg) (3), (4), (5) | 1,393 | 3,236,256 | 3,697,018 | 0.52 | % | |||||||||||
Total Wired Telecommunications Carriers | 11,690,060 | 9,508,900 | ||||||||||||||
Total Equity Securities | 123,670,424 | 38,667,986 | ||||||||||||||
Total Investments (7) | 786,648,436 | 704,095,487 | ||||||||||||||
Cash and Cash Equivalents | 12,566,659 | 1.75 | % | |||||||||||||
Total Cash and Investments | $ | 716,662,146 | 100.00 | % |
Notes to Statement of Investments:
(1) | Investments in bank debt generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower. |
(2) | Non-controlled affiliate – as defined under the Investment Company Act of 1940 (ownership of between 5% and 25% of the outstanding voting securities of this issuer). |
(3) | Non-income producing security. |
(4) | Principal amount denominated in foreign currency. Amortized cost and fair value converted from foreign currency to US dollars. (See Note 2) |
(5) | Restricted security. (See Note 2) |
(6) | Controlled issuer – as defined under the Investment Company Act of 1940 (ownership of 25% or more of the outstanding voting securities of this issuer). Investment is not more than 50% owned nor deemed to be a significant subsidiary. |
(7) | Includes investments with an aggregate market value of $2,940,000 that have been segregated to collateralize certain unfunded commitments. |
Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $354,541,956 and $176,516,172, respectively for the nine months ended September 30, 2013. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments. The total value of restricted securities and bank debt as of September 30, 2013 was $703,067,274, or 98.1% of total cash and investments of the Company.
Options and Swaps at September 30, 2013 were as follows:
Investment | Notional Amount | Fair Value | ||||||
Interest Rate Cap, 4%, expires 5/15/2016 | $ | 25,000,000 | $ | 19,152 | ||||
Euro/US Dollar Cross-Currency Basis Swap, Pay Euros/Receive USD, Expires 5/16/14 | $ | 6,040,944 | $ | 52,694 |
See accompanying notes.
8 |
TCP Capital Corp.
Consolidated Statement of Investments
December 31, 2012
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Principal | Fair | Cash and | ||||||||||||||
Investment | Amount | Cost | Value | Investments | ||||||||||||
Debt Investments (90.12%) | ||||||||||||||||
Bank Debt (75.60%) (1) | ||||||||||||||||
Accounting, Tax Preparation, Bookkeeping, and Payroll Services (3.16%) | ||||||||||||||||
Expert Global Solutions, LLC, Senior Secured 1st Lien Term Loan B, LIBOR + 6.75%, 1.25% LIBOR Floor, due 4/2/18 | $ | 1,916,252 | $ | 1,882,302 | $ | 1,925,239 | 0.36 | % | ||||||||
Expert Global Solutions, LLC, Senior Secured 2nd Lien Term Loan, LIBOR + 9.5%, 1.5% LIBOR Floor, due 10/2/18 | $ | 14,976,011 | 14,493,414 | 14,953,547 | 2.80 | % | ||||||||||
Total Accounting, Tax Preparation, Bookkeeping, and Payroll Services | 16,375,716 | 16,878,786 | ||||||||||||||
Business Support Services (3.58%) | ||||||||||||||||
STG-Fairway Acquisitions, Inc., Senior Secured 2nd Lien Term Loan, 12.5%, due 12/29/15 | $ | 19,878,935 | 18,821,586 | 19,193,112 | 3.58 | % | ||||||||||
Computer Equipment Manufacturing (1.78%) | ||||||||||||||||
ELO Touch Solutions, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 10.5%, 1.5% LIBOR Floor, due 12/4/18 | $ | 10,000,000 | 9,621,530 | 9,550,000 | 1.78 | % | ||||||||||
Electric Power Generation, Transmission and Distribution (3.41%) | ||||||||||||||||
Panda Sherman Power, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 7.5%, 1.5% LIBOR Floor, due 9/14/18 | $ | 11,070,172 | 10,910,286 | 11,263,900 | 2.10 | % | ||||||||||
Astoria Generating Company Acquisitions, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 9.35%, 1.5% LIBOR Floor, due 12/28/15 | $ | 7,000,000 | 6,727,929 | 7,040,845 | 1.31 | % | ||||||||||
Total Electric Power Generation, Transmission and Distribution | 17,638,215 | 18,304,745 | ||||||||||||||
Electronic Shopping (2.13%) | ||||||||||||||||
Shopzilla, Inc., Senior Secured 2nd Lien Term Loan, 13%, due 6/1/14 | $ | 11,382,687 | 10,869,637 | 11,422,526 | 2.13 | % | ||||||||||
Equipment Rental and Leasing (3.28%) | ||||||||||||||||
Sky Funding AMR Lease Portfolio, Senior Subordinated 1st Lien Term Loan, 10%, due 9/6/16 - (Ireland) | $ | 17,000,000 | 16,412,490 | 17,595,000 | 3.28 | % | ||||||||||
Financial Investment Activities (0.02%) | ||||||||||||||||
Marsico Capital Management, Senior Secured 1st Lien Term Loan, LIBOR + 5%, due 12/31/22 | $ | 11,281,905 | 14,205,420 | 5,753,772 | 1.07 | % | ||||||||||
Full-Service Restaurants (3.20%) | ||||||||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche A, 11%, due 3/19/16 (2) | $ | 3,759,156 | 3,759,156 | 3,759,156 | 0.70 | % | ||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche B, 12% Cash + 7% PIK, due 3/19/16 (2) | $ | 6,258,122 | 6,258,122 | 6,258,122 | 1.17 | % | ||||||||||
RM Holdco, LLC, Subordinated Convertible Term Loan, 1.12% PIK, due 3/21/18 (2) | $ | 5,106,805 | 5,106,805 | 5,106,805 | 0.96 | % | ||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche B-1, 12% Cash + 7% PIK, due 3/19/16 (2) | $ | 1,976,470 | 1,922,118 | 1,976,470 | 0.37 | % | ||||||||||
Total Full-Service Restaurants | 17,046,201 | 17,100,553 | ||||||||||||||
Gaming Industries (5.61%) | ||||||||||||||||
Golden Gaming, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 7% Cash + 1% PIK, 2% LIBOR Floor, due 4/15/16 | $ | 15,975,628 | 15,600,947 | 15,735,993 | 2.94 | % | ||||||||||
AGS LLC, 1st Lien Term Loan, LIBOR + 10%, 1.5% LIBOR Floor, due 8/15/16 | $ | 13,269,231 | 12,781,083 | 13,395,288 | 2.50 | % | ||||||||||
AGS LLC, DDTL 1st Lien Term Loan, LIBOR + 10%, 1.5% LIBOR Floor, due 8/15/16 | $ | 865,385 | 796,154 | 881,827 | 0.17 | % | ||||||||||
Total Gaming Industries | 29,178,184 | 30,013,108 | ||||||||||||||
Grocery Stores (2.58%) | ||||||||||||||||
Bashas, Inc., Senior Secured 1st Lien FILO Term Loan, LIBOR + 9.35%, 1.5% LIBOR Floor, due 12/28/15 | $ | 13,461,182 | 13,461,182 | 13,797,711 | 2.58 | % |
9 |
TCP Capital Corp.
Consolidated Statement of Investments (Continued)
December 31, 2012
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Principal | Fair | Cash and | ||||||||||||||
Investment | Amount | Cost | Value | Investments | ||||||||||||
Debt Investments (continued) | ||||||||||||||||
Insurance Related Activities (1.04%) | ||||||||||||||||
Confie Seguros Holding II Co., 2nd Lien Term Loan, LIBOR + 9%, 1.25% LIBOR Floor, due 7/26/19 | $ | 5,600,000 | $ | 5,490,103 | $ | 5,590,676 | 1.04 | % | ||||||||
Iron and Steel Mills and Ferroalloy Manufacturing (1.22%) | ||||||||||||||||
Essar Steel Algoma, Inc., Senior Secured Term Loan, LIBOR + 7.5%, 1.25% LIBOR Floor, due 9/20/14 | $ | 6,581,231 | 6,464,979 | 6,537,367 | 1.22 | % | ||||||||||
Motion Picture and Video Industries (2.83%) | ||||||||||||||||
CORE Entertainment, Inc., Senior Secured 1st Lien Term Loan, 9%, due 6/21/17 | $ | 9,462,231 | 9,362,125 | 8,220,313 | 1.53 | % | ||||||||||
CORE Entertainment, Inc., Senior Secured 2nd Lien Term Loan, 13.5%, due 6/21/18 | $ | 7,569,785 | 7,488,038 | 6,964,202 | 1.30 | % | ||||||||||
Total Motion Picture and Video Industries | 16,850,163 | 15,184,515 | ||||||||||||||
Motor Vehicle Parts Manufacturing (2.41%) | ||||||||||||||||
DMI SMW Holding Corporation, Term Loan, LIBOR + 7.75%, 1.5% LIBOR Floor, due 12/21/17 | $ | 12,935,000 | 12,938,292 | 12,902,663 | 2.41 | % | ||||||||||
Other Amusement and Recreation Industries (2.14%) | ||||||||||||||||
Intrawest Cayman L.P., 1st Lien Term Loan, LIBOR + 5.75%, 1.25% LIBOR Floor, due 12/4/17 - (Cayman Islands) | $ | 1,250,000 | 1,231,250 | 1,257,813 | 0.23 | % | ||||||||||
Intrawest Cayman L.P., 2nd Lien Term Loan, LIBOR + 9.5%, 1.25% LIBOR Floor, due 12/4/18 - (Cayman Islands) | $ | 10,250,000 | 9,993,750 | 10,250,000 | 1.91 | % | ||||||||||
Total Other Amusement and Recreation Industries | 11,225,000 | 11,507,813 | ||||||||||||||
Other Electrical Equipment and Component Manufacturing (3.03%) | ||||||||||||||||
Palladium Energy, Inc., Term Loan, LIBOR + 9%, 1% LIBOR Floor, due 12/21/17 | $ | 16,500,317 | 16,170,991 | 16,219,812 | 3.03 | % | ||||||||||
Other Professional, Scientific, and Technical Services (2.27%) | ||||||||||||||||
Connolly, LLC, Senior Secured 2nd Lien Term Loan, LIBOR + 9.25%, 1.25% LIBOR Floor, due 7/26/19 | $ | 12,000,000 | 11,808,454 | 12,157,500 | 2.27 | % | ||||||||||
Petroleum and Coal Products Manufacturing (1.57%) | ||||||||||||||||
Boomerang Tube, LLC, 2nd Lien Term Loan, LIBOR + 9.5%, 1.5% LIBOR Floor, due 10/2/17 | $ | 8,522,741 | 8,277,159 | 8,416,206 | 1.57 | % | ||||||||||
Pharmaceutical and Medicine Manufacturing (1.51%) | ||||||||||||||||
Pharmaceutical Research Associates, Inc., 2nd Lien Term Loan, LIBOR + 9.25%, 1.25% LIBOR Floor, due 6/10/19 | $ | 8,000,000 | 7,840,000 | 8,085,000 | 1.51 | % | ||||||||||
Promoters of Performing Arts, Sports, and Similar Events (2.06%) | ||||||||||||||||
Stadium Management Group, Senior Secured 2nd Lien Term Loan, LIBOR + 9.50%, 1.25% LIBOR Floor, due 12/7/18 | $ | 11,000,000 | 10,792,091 | 11,055,000 | 2.06 | % | ||||||||||
Radio and Television Broadcasting (4.58%) | ||||||||||||||||
Encompass Digital Media, Inc., 1st Lien Term Loan, LIBOR + 6.5%, 1.5% LIBOR Floor, due 8/10/17 | $ | 7,940,000 | 7,802,595 | 8,039,250 | 1.50 | % | ||||||||||
Granite Broadcasting Corporation, Senior Secured 1st Lien Term Loan B, LIBOR + 7.25%, 1.25% LIBOR Floor, due 5/23/18 | $ | 9,950,000 | 9,719,719 | 9,974,875 | 1.86 | % | ||||||||||
SiTV, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 6% Cash + 4% PIK, 2% LIBOR Floor, due 8/3/16 | $ | 6,806,343 | 6,421,282 | 6,523,880 | 1.22 | % | ||||||||||
Total Radio and Television Broadcasting | 23,943,596 | 24,538,005 | ||||||||||||||
Retail (1.90%) | ||||||||||||||||
Kenneth Cole Productions, Inc., Senior Secured 1st Lien FILO Term Loan, LIBOR + 10.60%, 1% LIBOR Floor, due 9/25/17 | $ | 10,000,000 | 9,717,763 | 10,200,000 | 1.90 | % |
10 |
TCP Capital Corp.
Consolidated Statement of Investments (Continued)
December 31, 2012
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Principal | Fair | Cash and | ||||||||||||||
Investment | Amount | Cost | Value | Investments | ||||||||||||
Debt Investments (continued) | ||||||||||||||||
Scheduled Air Transportation (3.11%) | ||||||||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N913DL), 8%, due 7/15/18 (6) | $ | 366,557 | $ | 366,557 | $ | 367,370 | 0.07 | % | ||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N918DL), 8%, due 7/15/18 (6) | $ | 456,613 | 456,613 | 454,580 | 0.08 | % | ||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N954DL), 8%, due 9/20/19 (6) | $ | 593,200 | 593,200 | 597,720 | 0.11 | % | ||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N955DL), 8%, due 9/20/19 (6) | $ | 609,107 | 609,107 | 612,000 | 0.11 | % | ||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N956DL), 8%, due 9/20/19 (6) | $ | 609,360 | 609,360 | 612,850 | 0.11 | % | ||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N957DL), 8%, due 9/20/19 (6) | $ | 614,434 | 614,434 | 617,440 | 0.12 | % | ||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N959DL), 8%, due 9/20/19 (6) | $ | 619,468 | 619,468 | 622,030 | 0.12 | % | ||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N960DL), 8%, due 9/20/19 (6) | $ | 639,631 | 639,631 | 640,730 | 0.12 | % | ||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N961DL), 8%, due 9/20/19 (6) | $ | 635,009 | 635,009 | 636,990 | 0.12 | % | ||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N976DL), 8%, due 7/15/18 (6) | $ | 474,007 | 474,007 | 473,280 | 0.09 | % | ||||||||||
United Airlines, Inc., Aircraft Secured Mortgage (N510UA), 20%, due 9/26/16 (2) | $ | 410,410 | 410,410 | 548,340 | 0.10 | % | ||||||||||
United Airlines, Inc., Aircraft Secured Mortgage (N512UA), 20%, due 10/26/16 (2) | $ | 414,343 | 414,343 | 556,225 | 0.10 | % | ||||||||||
United Airlines, Inc., Aircraft Secured Mortgage (N536UA), 16%, due 8/21/14 (2) | $ | 251,941 | 251,941 | 277,780 | 0.05 | % | ||||||||||
United Airlines, Inc., Aircraft Secured Mortgage (N545UA), 16%, due 7/17/15 (2) | $ | 377,925 | 377,925 | 436,810 | 0.08 | % | ||||||||||
United Airlines, Inc., Aircraft Secured Mortgage (N585UA), 20%, due 10/25/16 (2) | $ | 486,501 | 486,501 | 653,220 | 0.12 | % | ||||||||||
United Airlines, Inc., Aircraft Secured Mortgage (N659UA), 12%, due 3/28/16 (6) | $ | 3,707,430 | 3,707,430 | 4,264,148 | 0.80 | % | ||||||||||
United Airlines, Inc., Aircraft Secured Mortgage (N661UA), 12%, due 5/4/16 (6) | $ | 3,849,284 | 3,849,284 | 4,351,424 | 0.81 | % | ||||||||||
15,115,220 | 16,722,937 | |||||||||||||||
Semiconductor and Other Electronic Component Manufacturing (2.61%) | ||||||||||||||||
Isola USA Corporation, 1st Lien Term Loan, LIBOR + 8%, 2% LIBOR Floor, due 9/29/15 | $ | 14,000,000 | 13,975,000 | 14,000,000 | 2.61 | % | ||||||||||
Software Publishers (8.47%) | ||||||||||||||||
Blackboard, Inc., Senior Secured 1st Lien Term Loan, LIBOR + 6%, 1.5% LIBOR Floor, due 10/4/18 | $ | 2,671,613 | 2,457,884 | 2,705,008 | 0.51 | % | ||||||||||
Deltek, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 8.75%, 1.25% LIBOR Floor, due 10/10/19 | $ | 15,000,000 | 14,781,719 | 15,275,025 | 2.85 | % | ||||||||||
Edmentum, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 9.75%, 1.5% LIBOR Floor due 5/8/19 | $ | 15,000,000 | 14,717,168 | 14,831,250 | 2.77 | % | ||||||||||
SumTotal Systems, LLC, Senior Secured 2nd Lien Term Loan, LIBOR + 9%, 1.25% LIBOR Floor, due 5/13/19 | $ | 7,600,000 | 7,449,234 | 7,524,000 | 1.41 | % | ||||||||||
The TriZetto Group, Inc., Senior Secured 2nd Lien Term Loan, LIBOR + 7.25%, 1.25% LIBOR Floor, due 3/28/19 | $ | 5,000,000 | 4,927,523 | 4,979,175 | 0.93 | % | ||||||||||
Total Software Publishers | 44,333,528 | 45,314,458 | ||||||||||||||
Support Activities for Mining (0.06%) | ||||||||||||||||
Trico Shipping AS, 1st Lien Term Loan A, LIBOR + 8.5%, 1.5% LIBOR Floor, due 5/13/14 - (Norway) | $ | 228,803 | 228,803 | 228,803 | 0.04 | % | ||||||||||
Trico Shipping AS, 1st Lien Term Loan B, LIBOR + 8.5%, 1.5% LIBOR Floor, due 5/13/14 - (Norway) | $ | 80,543 | 80,543 | 80,543 | 0.02 | % | ||||||||||
Total Support Activities for Mining | 309,346 | 309,346 | ||||||||||||||
Wired Telecommunications Carriers (2.52%) | ||||||||||||||||
Bulgaria Telecom Company AD, 1st Lien Facility 1A Term Loan, EURIBOR + 5.5%, due 11/9/17 - (Bulgaria) (4) | € | 3,262,515 | 3,525,355 | 3,744,685 | 0.70 | % | ||||||||||
Integra Telecom Holdings, Inc., 1st Lien Term Loan, LIBOR + 7.25%, 2% LIBOR Floor, due 4/15/15 | $ | 8,477,489 | 8,070,172 | 8,518,096 | 1.60 | % | ||||||||||
Viva Telecom Bulgaria EAD, 1st Lien Facility 1B Term Loan, EURIBOR + 5.5%, due 11/9/17 - (Luxembourg) (4) | € | 980,713 | 1,059,723 | 1,125,653 | 0.22 | % | ||||||||||
Total Wired Telecommunications Carriers | 12,655,250 | 13,388,434 |
11 |
TCP Capital Corp.
Consolidated Statement of Investments (Continued)
December 31, 2012
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Principal | Fair | Cash and | ||||||||||||||
Investment | Amount | Cost | Value | Investments | ||||||||||||
Debt Investments (continued) | ||||||||||||||||
Wireless Telecommunications Carriers (0.56%) | ||||||||||||||||
Globalive Wireless Management Corp., Senior Secured 1st Lien Term Loan, LIBOR + 8.9%, due 10/9/12 - (Canada) | $ | 3,037,292 | $ | 2,933,872 | $ | 3,000,845 | 0.56 | % | ||||||||
Gogo, LLC, Senior Secured 1st Lien Term Loan, LIBOR + 9.75%, 1.5% LIBOR Floor, due 6/21/17 | $ | 10,168,765 | 9,762,014 | 10,270,452 | 1.92 | % | ||||||||||
Total Wireless Telecommunications | 12,695,886 | 13,271,297 | ||||||||||||||
Total Bank Debt | 404,232,982 | 405,010,342 | ||||||||||||||
Other Corporate Debt Securities (14.51%) | ||||||||||||||||
Architectural, Engineering, and Related Services (1.33%) | ||||||||||||||||
ESP Holdings, Inc., Junior Unsecured Subordinated Promissory Notes, 6% Cash + 10% PIK, due 12/31/19 (2), (5) | $ | 7,209,840 | 7,209,840 | 7,134,137 | 1.33 | % | ||||||||||
Artificial Synthetic Fibers and Filaments Manufacturing (1.72%) | ||||||||||||||||
AGY Holding Corporation, Senior Secured 2nd Lien Notes, 11%, due 11/15/14 | $ | 18,536,000 | 15,172,634 | 9,221,660 | 1.72 | % | ||||||||||
Data Processing, Hosting, and Related Services (1.34%) | ||||||||||||||||
The Telx Group, Inc., Senior Unsecured Notes, 10% Cash + 2% PIK, due 9/26/19 (5) | $ | 6,958,697 | 6,820,215 | 7,167,458 | 1.34 | % | ||||||||||
Metal and Mineral (except Petroleum) Merchant Wholesalers (2.48%) | ||||||||||||||||
Constellation Enterprises, LLC, Senior Secured 1st Lien Notes, 10.625%, due 2/1/16 (5) | $ | 12,500,000 | 12,322,875 | 13,296,875 | 2.48 | % | ||||||||||
Nondepository Credit Intermediation (1.87%) | ||||||||||||||||
Caribbean Financial Group, Senior Secured Notes, 11.5%, due 11/15/19 (5) | $ | 10,000,000 | 9,803,494 | 10,037,500 | 1.87 | % | ||||||||||
Nonferrous Metal Production and Processing (2.88%) | ||||||||||||||||
International Wire Group Holdings, Inc., Senior Secured Notes, 8.5%, due 10/15/17 (2), (5) | $ | 15,000,000 | 15,000,000 | 15,450,000 | 2.88 | % | ||||||||||
Scientific Research and Development Services (2.89%) | ||||||||||||||||
BPA Laboratories, Inc., Senior Secured Notes, 12.25%, due 4/1/17 (5) | $ | 17,110,000 | 16,446,295 | 15,484,550 | 2.89 | % | ||||||||||
Total Other Corporate Debt Securities | 82,775,353 | 77,792,180 | ||||||||||||||
Total Debt Investments | 487,008,335 | 482,802,522 | ||||||||||||||
Equity Securities (6.51%) | ||||||||||||||||
Other Amusement and Recreation Industries (0.01%) | ||||||||||||||||
Bally Total Fitness Holding Corporation, Common Stock (3), (5) | 6,058 | 45,186,963 | 27,746 | 0.01 | % | |||||||||||
Bally Total Fitness Holding Corporation, Warrants (3), (5) | 10,924 | - | 1 | - | ||||||||||||
Total Other Amusement and Recreation Industries | 45,186,963 | 27,747 | ||||||||||||||
Architectural, Engineering, and Related Services (1.10%) | ||||||||||||||||
ESP Holdings, Inc., Cumulative Preferred 15% (2), (3), (5) | 20,297 | 2,249,930 | 3,643,088 | 0.68 | % | |||||||||||
ESP Holdings, Inc., Common Stock (2), (3), (5) | 88,670 | 9,311,782 | 2,263,124 | 0.42 | % | |||||||||||
Total Architectural, Engineering, and Related Services | 11,561,712 | 5,906,212 | ||||||||||||||
Business Support Services (0.05%) | ||||||||||||||||
STG-Fairway Holdings, LLC, Class A Units (3), (5) | 80,396 | 1,100,348 | 241,188 | 0.05 | % | |||||||||||
Data Processing, Hosting, and Related Services (0.23%) | ||||||||||||||||
Anacomp, Inc., Class A Common Stock (3), (5), (6) | 1,255,527 | 26,711,048 | 1,255,527 | 0.23 | % |
12 |
TCP Capital Corp.
Consolidated Statement of Investments (Continued)
December 31, 2012
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Fair | Cash and | |||||||||||||||
Investment | Shares | Cost | Value | Investments | ||||||||||||
Equity Securities (continued) | ||||||||||||||||
Depository Credit Intermediation (0.15%) | ||||||||||||||||
Doral Financial Corporation, Common Stock (3) | 1,077,795 | $ | 11,699,417 | $ | 780,431 | 0.15 | % | |||||||||
Electric Power Generation, Transmission and Distribution (0.01%) | ||||||||||||||||
La Paloma Residual Bank Debt Claim (3), (5) | 1,830,453 | 1,574,284 | 51,253 | 0.01 | % | |||||||||||
Electronic Shopping (0.21%) | ||||||||||||||||
Shop Holding, LLC, Class A Units (3), (5) | 490,037 | 462,576 | 915,198 | 0.16 | % | |||||||||||
Shop Holding, LLC, Warrants to Purchase Class A Units (3), (5) | 326,691 | - | 283,346 | 0.05 | % | |||||||||||
Total Electronic Shopping | 462,576 | 1,198,544 | ||||||||||||||
Financial Investment Activities (0.02%) | ||||||||||||||||
Marsico Holdings, LLC, Common Interest Units (3), (5) | 168,698 | 172,694 | 84,349 | 0.02 | % | |||||||||||
Full-Service Restaurants (0.16%) | ||||||||||||||||
RM Holdco, LLC, Membership Units (2), (3), (5) | 13,161,000 | 2,010,777 | 849,478 | 0.16 | % | |||||||||||
Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing (0.00%) | ||||||||||||||||
Precision Holdings, LLC, Class C Membership Interests (3), (5) | 33 | 1,396 | 21,317 | - | ||||||||||||
Nonmetallic Mineral Mining and Quarrying (0.51%) | ||||||||||||||||
EPMC HoldCo, LLC, Membership Units (2), (5) | 1,312,720 | - | 2,730,458 | 0.51 | % | |||||||||||
Radio and Television Broadcasting (0.06%) | ||||||||||||||||
SiTV, Inc., Warrants to Purchase Common Stock (3), (5) | 233,470 | 300,322 | 336,197 | 0.06 | % | |||||||||||
Scheduled Air Transportation (1.83%) | ||||||||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N913DL) (5), (6) | 466 | 113,899 | 111,520 | 0.02 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N918DL) (5), (6) | 433 | 130,664 | 120,530 | 0.02 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N954DL) (5), (6) | 421 | 161,952 | 113,390 | 0.02 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N955DL) (5), (6) | 417 | 164,481 | 160,650 | 0.03 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N956DL) (5), (6) | 418 | 164,726 | 163,200 | 0.03 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N957DL) (5), (6) | 417 | 165,755 | 163,880 | 0.03 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N959DL) (5), (6) | 416 | 166,778 | 164,390 | 0.03 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N960DL) (5), (6) | 412 | 171,075 | 169,660 | 0.03 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N961DL) (5), (6) | 415 | 170,315 | 171,360 | 0.03 | % | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N976DL) (5), (6) | 442 | 136,326 | 83,300 | 0.02 | % | |||||||||||
United Airlines, Inc., Equipment Trust Beneficial Interests (N510UA) (2), (5) | 43 | 151,759 | 479,682 | 0.09 | % | |||||||||||
United Airlines, Inc., Equipment Trust Beneficial Interests (N512UA) (2), (5) | 43 | 148,561 | 473,761 | 0.09 | % | |||||||||||
United Airlines, Inc., Equipment Trust Beneficial Interests (N536UA) (2), (5) | 62 | 298,394 | 624,746 | 0.12 | % | |||||||||||
United Airlines, Inc., Equipment Trust Beneficial Interests (N545UA) (2), (5) | 52 | 267,249 | 616,897 | 0.12 | % | |||||||||||
United Airlines, Inc., Equipment Trust Beneficial Interests (N585UA) (2), (5) | 43 | 167,806 | 583,391 | 0.11 | % | |||||||||||
United N659UA-767, LLC (N659UA) (5), (6) | 312 | 1,773,072 | 2,771,428 | 0.52 | % | |||||||||||
United N661UA-767, LLC (N661UA) (5), (6) | 303 | 1,759,997 | 2,789,809 | 0.52 | % | |||||||||||
Total Scheduled Air Transportation | 6,112,809 | 9,761,594 | ||||||||||||||
Semiconductor and Other Electronic Component Manufacturing (0.01%) | ||||||||||||||||
AIP/IS Holdings, LLC, Membership Units (3), (5) | 352 | - | 68,922 | 0.01 | % | |||||||||||
Support Activities for Mining (0.61%) | ||||||||||||||||
DeepOcean Group Holding AS, Common Stock - (Norway) (3), (5) | 145,824 | 3,477,627 | 3,255,535 | 0.61 | % |
13 |
TCP Capital Corp.
Consolidated Statement of Investments (Continued)
December 31, 2012
Showing Percentage of Total Cash and Investments of the Company
Percent of | ||||||||||||||||
Fair | Cash and | |||||||||||||||
Investment | Shares | Cost | Value | Investments | ||||||||||||
Equity Securities (continued) | ||||||||||||||||
Wired Telecommunications Carriers (1.55%) | ||||||||||||||||
Integra Telecom, Inc., Common Stock (3), (5) | 1,274,522 | $ | 8,433,884 | $ | 5,038,718 | 0.94 | % | |||||||||
Integra Telecom, Inc., Warrants (3), (5) | 346,939 | 19,920 | - | - | ||||||||||||
V Telecom Investment S.C.A, Common Shares - (Luxembourg) (3), (4), (5) | 1,393 | 3,236,256 | 3,273,095 | 0.61 | % | |||||||||||
Total Wired Telecommunications Carriers | 11,690,060 | 8,311,813 | ||||||||||||||
Total Equity Securities | 122,062,033 | 34,880,565 | ||||||||||||||
Total Investments (7) | 609,070,368 | 517,683,087 | ||||||||||||||
Cash and Cash Equivalents | 18,035,189 | 3.37 | % | |||||||||||||
Total Cash and Investments | $ | 535,718,276 | 100.00 | % |
Notes to Statement of Investments:
(1) | Investments in bank debt generally are bought and sold among institutional investors in transactions not subject to registration under the Securities Act of 1933. Such transactions are generally subject to contractual restrictions, such as approval of the agent or borrower. |
(2) | Non-controlled affiliate – as defined under the Investment Company Act of 1940 (ownership of between 5% and 25% of the outstanding voting securities of this issuer). |
(3) | Non-income producing security. |
(4) | Principal amount denominated in foreign currency. Amortized cost and fair value converted from foreign currency to US dollars. (See Note 2) |
(5) | Restricted security. (See Note 2) |
(6) | Controlled issuer – as defined under the Investment Company Act of 1940 (ownership of 25% or more of the outstanding voting securities of this issuer). |
(7) | Includes investments with an aggregate market value of $1,382,875 that have been segregated to collateralize certain unfunded commitments. |
Aggregate acquisitions and aggregate dispositions of investments, other than government securities, totaled $359,020,926 and $211,216,033, respectively for the year ended December 31, 2012. Aggregate acquisitions includes investment assets received as payment in kind. Aggregate dispositions includes principal paydowns on and maturities of debt investments. The total value of restricted securities and bank debt as of December 31, 2012 was $507,680,996, or 94.8% of total cash and investments of the Company.
Swaps at December 31, 2012 were as follows:
Investment | Notional Amount | Fair Value | ||||||
Euro/US Dollar Cross-Currency Basis Swap, Pay Euros/Receive USD, Expires 5/16/14 | $ | 6,040,944 | $ | 179,364 |
See accompanying notes.
14 |
TCP Capital Corp.
Consolidated Statements of Operations (Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 (1) | |||||||||||||
Investment income | ||||||||||||||||
Interest income: | ||||||||||||||||
Unaffiliated issuers | $ | 14,257,066 | $ | 10,162,568 | $ | 41,745,035 | $ | 27,140,094 | ||||||||
Controlled companies | 293,711 | 360,975 | 936,296 | 360,975 | ||||||||||||
Other affiliates | 1,938,950 | 1,310,590 | 4,035,115 | 4,556,220 | ||||||||||||
Dividend income: | ||||||||||||||||
Other affiliates | - | - | - | 1,811,189 | ||||||||||||
Other income: | ||||||||||||||||
Unaffiliated issuers | 529,011 | - | 1,105,959 | 520,580 | ||||||||||||
Controlled companies | 183,650 | 94,726 | 495,165 | 440,584 | ||||||||||||
Other affiliates | 85,983 | 182,114 | 305,739 | 182,114 | ||||||||||||
Total investment income | 17,288,371 | 12,110,973 | 48,623,309 | 35,011,756 | ||||||||||||
Operating expenses | ||||||||||||||||
Management and advisory fees | 2,205,517 | 1,737,237 | 6,110,550 | 4,986,901 | ||||||||||||
Interest expense | 340,711 | 33,575 | 663,820 | 90,023 | ||||||||||||
Administrative expenses | 256,806 | - | 592,422 | - | ||||||||||||
Amortization of deferred debt issuance costs | 218,764 | 110,977 | 470,242 | 330,519 | ||||||||||||
Legal fees, professional fees and due diligence expenses | 188,284 | 294,746 | 489,488 | 656,522 | ||||||||||||
Commitment fees | 85,749 | 61,487 | 146,843 | 193,848 | ||||||||||||
Director fees | 76,478 | 37,500 | 220,288 | 137,500 | ||||||||||||
Insurance expense | 55,020 | 37,098 | 133,816 | 93,061 | ||||||||||||
Custody fees | 45,776 | 25,797 | 105,427 | 72,300 | ||||||||||||
Professional fees relating to the Conversion | - | - | - | 411,523 | ||||||||||||
Other operating expenses | 227,287 | 168,903 | 644,793 | 276,766 | ||||||||||||
Total operating expenses | 3,700,392 | 2,507,320 | 9,577,689 | 7,248,963 | ||||||||||||
Net investment income before taxes | 13,587,979 | 9,603,653 | 39,045,620 | 27,762,793 | ||||||||||||
Excise tax expense | - | - | - | 502,978 | ||||||||||||
Net investment income | 13,587,979 | 9,603,653 | 39,045,620 | 27,259,815 | ||||||||||||
Net realized and unrealized gain (loss) on investments and foreign currency | ||||||||||||||||
Net realized gain (loss): | ||||||||||||||||
Investments in unaffiliated issuers | 804,482 | 8,403,999 | (2,773,020 | ) | 5,299,895 | |||||||||||
Investments in non-controlled affiliates | - | - | - | 718,845 | ||||||||||||
Net realized gain (loss) | 804,482 | 8,403,999 | (2,773,020 | ) | 6,018,740 | |||||||||||
Net change in net unrealized appreciation/depreciation | 2,132,565 | (8,059,602 | ) | 8,723,819 | (13,059,404 | ) | ||||||||||
Net realized and unrealized gain (loss) | 2,937,047 | 344,397 | 5,950,799 | (7,040,664 | ) | |||||||||||
Dividends paid on Series A preferred equity facility | (364,043 | ) | (397,050 | ) | (1,131,014 | ) | (1,142,233 | ) | ||||||||
Net change in accumulated dividends on Series A preferred equity facility | (23,939 | ) | (2,071 | ) | (7,928 | ) | (69,164 | ) | ||||||||
Distributions of incentive allocation to the General Partner from: | ||||||||||||||||
Net investment income | (2,639,999 | ) | - | (7,581,335 | ) | - | ||||||||||
Net realized gains | (54,157 | ) | - | (312,598 | ) | - | ||||||||||
Net change in reserve for incentive allocation | (533,253 | ) | - | (877,563 | ) | - | ||||||||||
Net increase in net assets applicable to common shareholders resulting from operations | $ | 12,909,635 | $ | 9,548,929 | $ | 35,085,981 | $ | 19,007,754 | ||||||||
Basic and diluted earnings per common share | $ | 0.48 | $ | 0.44 | $ | 1.47 | N/A | |||||||||
Basic and diluted weighted average common shares outstanding | 26,654,702 | 21,475,635 | 23,942,996 | N/A |
See accompanying notes.
(1) Prior to the Conversion on April 2, 2012, the Company's portfolio had different objectives.
15 |
TCP Capital Corp.
Consolidated Statements of Changes in Net Assets (Unaudited)
Common Stock | Paid
in Capital | Accumulated Net | Accumulated | Accumulated Net | Non- | |||||||||||||||||||||||||||
Shares | Par
Amount | in
Excess of Par | Investment Income | Net Realized Losses | Unrealized Depreciation | controlling Interest | Total
Net Assets | |||||||||||||||||||||||||
Balance at December 31, 2011 | 418,956 | $ | 419 | $ | 364,742,957 | $ | 13,515,239 | $ | (45,411,498 | ) | $ | (94,976,243 | ) | $ | - | $ | 237,870,874 | |||||||||||||||
Retirement of old common stock in the Conversion | (418,956 | ) | (419 | ) | 419 | - | - | - | - | - | ||||||||||||||||||||||
Issuance of common stock in the Conversion | 15,725,635 | 15,726 | (15,726 | ) | - | - | - | - | - | |||||||||||||||||||||||
Issuance of common stock in public offering | 5,750,000 | 5,750 | 80,956,005 | - | - | - | - | 80,961,755 | ||||||||||||||||||||||||
Issuance of common stock from dividend reinvestment plan | 1,993 | 2 | 30,383 | - | - | - | - | 30,385 | ||||||||||||||||||||||||
Net investment income | - | - | - | 40,320,360 | 40,320,360 | |||||||||||||||||||||||||||
Realized and unrealized gains (losses) | - | - | - | - | (15,990,188 | ) | 3,205,937 | - | (12,784,251 | ) | ||||||||||||||||||||||
Dividends on Series A preferred equity facility | - | - | - | (1,602,799 | ) | - | - | - | (1,602,799 | ) | ||||||||||||||||||||||
General Partner incentive allocation | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Dividends paid to common shareholders | - | - | - | (28,808,774 | ) | - | - | - | (28,808,774 | ) | ||||||||||||||||||||||
Tax reclassification of stockholders' equity in accordance with generally accepted accounting principles | - | - | (1,479,978 | ) | (897,847 | ) | 2,377,825 | - | - | - | ||||||||||||||||||||||
Balance at December 31, 2012 | 21,477,628 | $ | 21,478 | $ | 444,234,060 | $ | 22,526,179 | $ | (59,023,861 | ) | $ | (91,770,306 | ) | $ | - | $ | 315,987,550 | |||||||||||||||
Issuance of common stock in public offering | 5,175,000 | 5,175 | 78,171,615 | - | - | - | - | 78,176,790 | ||||||||||||||||||||||||
Issuance of common stock from dividend reinvestment plan | 2,174 | 2 | 35,505 | - | - | - | - | 35,507 | ||||||||||||||||||||||||
Net investment income | - | - | - | 39,045,620 | - | - | - | 39,045,620 | ||||||||||||||||||||||||
Realized and unrealized gains (losses) | - | - | - | - | (2,773,020 | ) | 8,723,819 | - | 5,950,799 | |||||||||||||||||||||||
Dividends on Series A preferred equity facility | - | - | - | (1,138,942 | ) | - | - | - | (1,138,942 | ) | ||||||||||||||||||||||
General Partner incentive allocation | - | - | - | (7,581,335 | ) | (312,598 | ) | - | (877,563 | ) | (8,771,496 | ) | ||||||||||||||||||||
Dividends paid to common shareholders | - | - | - | (27,782,087 | ) | - | - | - | (27,782,087 | ) | ||||||||||||||||||||||
Balance at September 30, 2013 | 26,654,802 | $ | 26,655 | $ | 522,441,180 | $ | 25,069,435 | $ | (62,109,479 | ) | $ | (83,046,487 | ) | $ | (877,563 | ) | $ | 401,503,741 |
See accompanying notes.
16 |
TCP Capital Corp.
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Operating activities | ||||||||
Net increase in net assets applicable to common shareholders resulting from operations | $ | 35,085,981 | $ | 19,007,754 | ||||
Adjustments to reconcile net increase in net assets applicable to common shareholders resulting from operations to net cash provided by (used in) operating activities: | ||||||||
Net realized loss (gain) | 2,773,020 | (6,018,740 | ) | |||||
Net change in unrealized appreciation/depreciation of investments | (8,675,023 | ) | 13,426,667 | |||||
Dividends paid on Series A preferred equity facility | 1,131,014 | 1,142,233 | ||||||
Net change in accumulated dividends on Series A preferred equity facility | 7,928 | 69,164 | ||||||
Net change in reserve for incentive allocation | 877,563 | - | ||||||
Accretion of original issue discount | (1,703,018 | ) | (521,847 | ) | ||||
Net accretion of market discount/premium | (674,077 | ) | (1,708,108 | ) | ||||
Interest and dividend income paid in kind | (1,248,459 | ) | (1,761,682 | ) | ||||
Amortization of deferred debt issuance costs | 470,242 | 330,519 | ||||||
Changes in assets and liabilities: | ||||||||
Purchases of investment securities | (353,293,497 | ) | (243,833,001 | ) | ||||
Proceeds from sales, maturities and paydowns of investments | 176,516,172 | 129,105,822 | ||||||
Decrease (increase) in accrued interest income - unaffiliated issuers | (2,346,218 | ) | 177,904 | |||||
Decrease (increase) in accrued interest income - controlled companies | 8,749 | (56,280 | ) | |||||
Increase in accrued interest income - other affiliates | (321,152 | ) | (606,711 | ) | ||||
Decrease (increase) in receivable for investments sold | 6,439,614 | (6,864,975 | ) | |||||
Decrease (increase) in prepaid expenses and other assets | (371,259 | ) | 1,193,639 | |||||
Increase in payable for investments purchased | 15,103,635 | 19,657,089 | ||||||
Increase in payable to the Investment Manager | 171,251 | 22,711 | ||||||
Decrease in management and advisory fees payable | - | (565,599 | ) | |||||
Increase (decrease) in interest payable | 170,674 | (17,743 | ) | |||||
Increase in incentive allocation payable | 2,694,156 | - | ||||||
Decrease in accrued expenses and other liabilities | (526,520 | ) | (110,927 | ) | ||||
Net cash used in operating activities | (127,709,224 | ) | (77,932,111 | ) | ||||
Financing activities | ||||||||
Proceeds from draws on credit facilities | 191,000,000 | 122,000,000 | ||||||
Principal repayments on credit facilities | (115,000,000 | ) | (103,000,000 | ) | ||||
Payments of debt issuance costs | (3,058,502 | ) | - | |||||
Dividends paid on Series A preferred equity facility | (1,131,014 | ) | (1,142,233 | ) | ||||
Dividends paid to common shareholders | (27,782,087 | ) | (20,218,188 | ) | ||||
Proceeds from shares issued in connection with dividend reinvestment plan | 35,507 | 13,234 | ||||||
Proceeds from common shares sold, net of underwriting and offering costs | 78,176,790 | 80,961,755 | ||||||
Net cash provided by financing activities | 122,240,694 | 78,614,568 | ||||||
Net increase (decrease) in cash and cash equivalents | (5,468,530 | ) | 682,457 | |||||
Cash and cash equivalents at beginning of period | 18,035,189 | 10,831,678 | ||||||
Cash and cash equivalents at end of period | $ | 12,566,659 | $ | 11,514,135 | ||||
Supplemental cash flow information | ||||||||
Interest payments | $ | 493,146 | $ | 107,766 | ||||
Excise tax payments | 969,946 | 502,978 |
See accompanying notes.
17 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2013
1. Organization and Nature of Operations
TCP Capital Corp. (the “Company”) is a Delaware corporation formed on April 2, 2012 as an externally managed, closed-end, non-diversified management investment company. The Company elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company’s investment objective is to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection. The Company invests primarily in the debt of middle-market companies, including senior secured loans, junior loans, mezzanine debt and bonds. Such investments may include an equity component, and, to a lesser extent, the Company may make equity investments directly. Investment operations are conducted in Special Value Continuation Partners, LP, a Delaware limited partnership (the “Partnership”), of which the Company owns 100% of the common limited partner interests, or in TCPC Funding I, LLC, a Delaware limited liability company (“TCPC Funding”), which is a wholly owned subsidiary of the Partnership. The Partnership has also elected to be treated as a BDC under the 1940 Act. These consolidated financial statements include the accounts of the Company, the Partnership and TCPC Funding. All significant intercompany transactions and balances have been eliminated in the consolidation.
The Company was formed through the conversion on April 2, 2012 of the Company’s predecessor, Special Value Continuation Fund, LLC (“SVCF”), from a limited liability company to a corporation in a non-taxable transaction, leaving the Company as the surviving entity (the “Conversion”). At the time of the Conversion, all limited liability company interests were exchanged for 15,725,635 shares of common stock in the Company. As a result of the Conversion, the books and records of SVCF have become the books and records of the surviving entity. On April 3, 2012, the Company completed its initial public offering. For periods prior to April 2, 2012, the consolidated financial statements and related footnotes reflect the performance of SVCF. Per share amounts prior to the conversion are not considered useful and have been marked as “N/A” in the consolidated financial statements.
The Company has elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes. As a RIC, the Company will not be taxed on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements. The Partnership and TCPC Funding have elected to be treated as partnerships for U.S. federal income tax purposes. The General Partner of the Partnership is SVOF/MM, LLC, which also serves as the administrator of the Company and the Partnership (the “Administrator”). The managing member of the Administrator is Tennenbaum Capital Partners, LLC (the “Advisor”), which serves as the Investment Manager to the Company, the Partnership, and TCPC Funding. Most of the equity interests in the General Partner are owned directly or indirectly by the Advisor and its employees.
Company management consists of the Investment Manager and the Board of Directors. Partnership management consists of the General Partner and the Board of Directors. The Investment Manager and the General Partner direct and execute the day-to-day operations of the Company and the Partnership, respectively, subject to oversight from the respective Board of Directors, which sets the broad policies of the Company and performs certain functions required by the 1940 Act in the case of the Partnership.
18 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
1. Organization and Nature of Operations (continued)
The Board of Directors of the Partnership has delegated investment management of the Partnership’s assets to the Investment Manager. At September 30, 2013, each Board of Directors consists of five persons, three of whom are independent. If the Company or the Partnership has preferred equity interests outstanding, as the Partnership currently does, the holders of the preferred interests voting separately as a class are entitled to elect two of the Directors. The remaining directors will be subject to election by holders of the common shares and preferred interests voting together as a single class.
Preferred Equity
At September 30, 2013, the Partnership had 6,700 Series A preferred limited partner interests (the “Preferred Interests”) issued and outstanding with a liquidation preference of $20,000 per preferred limited interest. The Preferred Interests are redeemable at the option of the Partnership, subject to certain conditions. Additionally, under certain conditions, the Partnership may be required to either redeem certain of the Preferred Interests or repay indebtedness, at the Partnership’s option. Such conditions would include a failure by the Partnership to maintain adequate collateral as required by its credit facility agreement or by the Statement of Preferences of the Preferred Interests or a failure by the Partnership to maintain sufficient asset coverage as required by the 1940 Act. As of September 30, 2013, the Partnership was in full compliance with such requirements.
The Preferred Interests accrue dividends at an annual rate equal to LIBOR plus 0.85% or, in the case of any holders of Preferred Interests that are CP Conduits (as defined in the leveraging documents), the higher of (i) LIBOR plus 0.85% or (ii) the CP Conduit’s cost of funds rate plus 0.85%, subject to certain limitations and adjustments.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The following is a summary of the significant accounting policies of the Company and the Partnership.
Use of Estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates and assumptions to be reasonable, actual results could differ from those estimates.
Investment Valuation
The Company’s investments are generally held by the Partnership or TCPC Funding. Management values investments at fair value based upon the principles and methods of valuation set forth in policies adopted by the Partnership’s Board of Directors and in conformity with procedures set forth in the Senior Facilities, as defined in Note 4, below, and the Statement of Preferences for the Preferred Interests. Fair value is generally defined as the amount for which an investment would be sold in an orderly transaction between market participants at the measurement date.
19 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
2. Summary of Significant Accounting Policies (continued)
All investments are valued at least quarterly based on affirmative pricing or quotations from independent third-party sources, with the exception of investments priced directly by the Investment Manager which together comprise, in total, less than 5% of the capitalization of the Partnership. Investments listed on a recognized exchange or market quotation system, whether U.S. or foreign, are valued for financial reporting purposes as of the last business day of the reporting period using the closing price on the date of valuation. Liquid investments not listed on a recognized exchange or market quotation system are valued using prices provided by a nationally recognized pricing service or by using quotations from broker-dealers. Investments not priced by a pricing service or for which market quotations are either not readily available or are determined to be unreliable are valued using affirmative valuations performed by independent valuation services or, for investments aggregating less than 5% of the total capitalization of the Partnership, directly by the Investment Manager.
Fair valuations of investments are determined under guidelines adopted by the Boards of Directors of the Company and the Partnership, and are subject to their approval. Generally, to increase objectivity in valuing the investments, the Investment Manager will utilize external measures of value, such as public markets or third-party transactions, whenever possible. The Investment Manager’s valuation is not based on long-term work-out value, immediate liquidation value, nor incremental value for potential changes that may take place in the future. The values assigned to investments that are valued by the Investment Manager are based on available information and do not necessarily represent amounts that might ultimately be realized, as these amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated. The foregoing policies apply to all investments, including those in companies and groups of affiliated companies aggregating more than 5% of the Company’s assets.
Fair valuations of investments in each asset class are determined using one or more methodologies including the market approach, income approach, or, in the case of recent investments, the cost approach, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present value amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that may be taken into account include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, our principal market and enterprise values, among other factors.
20 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
2. Summary of Significant Accounting Policies (continued)
Unobservable inputs used in the fair value measurement of Level 3 investments as of September 30, 2013 included the following:
Asset Type | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Avg.) | ||||||
Bank Debt | $ | 448,827,207 | Market rate approach | Market yields | 5.1% - 17.6% (10.5%) | |||||
Market quotations | Indicative bid/ask quotes | 1 - 4 (2) | ||||||||
Market comparable companies | Revenue multiples | 0.4x (0.4x) | ||||||||
Market comparable companies | EBITDA multiples | 6.5x (6.5x) | ||||||||
Other Corporate Debt | $ | 45,803,291 | Market rate approach | Market yields | 14.2% (14.2%) | |||||
Market quotations | Indicative bid/ask quotes | 1 – 11 (4) | ||||||||
Market comparable companies | EBITDA multiples | 6.5x - 10.0x (8.1x) | ||||||||
Equity | $ | 37,639,774 | Market rate approach | Market yields | 13.0% - 18.0% (13.6%) | |||||
Market quotations | Indicative bid/ask quotes | 1 - 2 (1) | ||||||||
Market comparable companies | Revenue multiples | 0.4x - 1.1x (1.1x) | ||||||||
Market comparable companies | EBITDA multiples | 3.4x – 8.0x (5.5x) |
Generally, a change in an unobservable input may result in a change to the value of an investment as follows:
Input | Impact to Value if Input Increases |
Impact to Value if Input Decreases | ||
Market yields | Decrease | Increase | ||
Revenue multiples | Increase | Decrease | ||
EBITDA multiples | Increase | Decrease |
Investments may be categorized based on the types of inputs used in valuing such investments. The level in the GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Transfers between levels are recognized as of the beginning of the reporting period.
At September 30, 2013, the Company’s investments were categorized as follows:
Level | Basis for Determining Fair Value | Bank Debt | Other Corporate Debt | Equity Securities | ||||||||||
1 | Quoted prices in active markets for identical assets | $ | - | $ | - | $ | 1,028,216 | |||||||
2 | Other observable market inputs* | 100,098,095 | 70,698,908 | - | ||||||||||
3 | Independent third-party pricing sources that employ significant unobservable inputs | 448,827,207 | 38,174,605 | 34,757,266 | ||||||||||
3 | Investment Manager valuations with significant unobservable inputs | - | 7,628,686 | 2,882,504 | ||||||||||
Total | $ | 548,925,302 | $ | 116,502,199 | $ | 38,667,986 |
* For example, quoted prices in inactive markets or quotes for comparable investments.
21 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
2. Summary of Significant Accounting Policies (continued)
Changes in investments categorized as Level 3 during the nine months ended September 30, 2013 were as follows:
Independent Third-Party Valuation | ||||||||||||
Bank Debt | Other Corporate Debt | Equity Securities | ||||||||||
Beginning balance | $ | 359,343,326 | $ | 17,171,637 | $ | 32,675,370 | ||||||
Net realized and unrealized gains (losses) | (1,062,389 | ) | 7,520,997 | (3,573,701 | ) | |||||||
Acquisitions | 215,773,748 | 22,962,665 | 11,023,992 | |||||||||
Dispositions | (100,185,011 | ) | (15,172,634 | ) | (3,215,534 | ) | ||||||
Transfers out of Level 3* | (58,651,283 | ) | (10,300,000 | ) | - | |||||||
Transfers into Level 3† | 33,608,816 | 15,991,940 | - | |||||||||
Reclassifications within Level 3‡ | - | - | (2,152,861 | ) | ||||||||
Ending balance | $ | 448,827,207 | $ | 38,174,605 | $ | 34,757,266 | ||||||
Net change in unrealized appreciation/ depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) | $ | (740,697 | ) | $ | 1,570,023 | $ | (2,724,223 | ) |
* Comprised of nine investments that transferred to Level 2 due to increased observable market activity.
† Comprised of five investments that transferred from Level 2 due to reduced trading volumes.
‡ Comprised of one investment that was reclassified to Investment Manager Valuation.
Investment Manager Valuation | ||||||||||||
Bank Debt | Other Corporate Debt | Equity Securities | ||||||||||
Beginning balance | $ | - | $ | 7,167,458 | $ | 1,424,764 | ||||||
Net realized and unrealized gains (losses) | - | 356,327 | (607,055 | ) | ||||||||
Acquisitions | - | 104,901 | - | |||||||||
Dispositions | - | - | (88,066 | ) | ||||||||
Reclassifications within Level 3§ | - | - | 2,152,861 | |||||||||
Ending balance | $ | - | $ | 7,628,686 | $ | 2,882,504 | ||||||
Net change in unrealized appreciation/ depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) | $ | - | $ | 356,327 | $ | (607,055 | ) |
§ Comprised of one investment that was reclassified from Independent Third-Party Valuation.
There were no transfers between Level 1 and 2 during the nine months ended September 30, 2013.
22 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
2. Summary of Significant Accounting Policies (continued)
At December 31, 2012, the Company’s investments were categorized as follows:
Level | Basis for Determining Fair Value | Bank Debt | Other Corporate Debt | Equity Securities | ||||||||||
1 | Quoted prices in active markets for identical assets | $ | - | $ | - | $ | 780,431 | |||||||
2 | Other observable market inputs * | 45,667,016 | 53,453,085 | - | ||||||||||
3 | Independent third-party pricing sources that employ significant unobservable inputs | 359,343,326 | 17,171,637 | 32,675,370 | ||||||||||
3 | Investment Manager valuations with significant unobservable inputs | - | 7,167,458 | 1,424,764 | ||||||||||
Total | $ | 405,010,342 | $ | 77,792,180 | $ | 34,880,565 |
* For example, quoted prices in inactive markets or quotes for comparable investments.
Changes in investments categorized as Level 3 during the year ended December 31, 2012 were as follows:
Independent Third-Party Valuation | ||||||||||||
Bank Debt | Other Corporate Debt | Equity Securities | ||||||||||
Beginning balance | $ | 159,949,811 | $ | 24,061,229 | $ | 68,114,764 | ||||||
Net realized and unrealized losses | (8,709,385 | ) | (6,540,882 | ) | (7,100,618 | ) | ||||||
Acquisitions | 288,929,785 | 3,731,290 | 9,584,408 | |||||||||
Dispositions | (84,994,292 | ) | - | (37,923,184 | ) | |||||||
Transfers out of Level 3 † | - | (4,080,000 | ) | - | ||||||||
Transfers into Level 3 ‡ | 4,167,407 | - | - | |||||||||
Ending balance | $ | 359,343,326 | $ | 17,171,637 | $ | 32,675,370 | ||||||
Net change in unrealized appreciation/ depreciation during the period on investments still held at period end (included in net realized and unrealized losses, above) | $ | (5,856,277 | ) | $ | 127,255 | $ | (9,797,319 | ) |
† Comprised of one investment that transferred to Level 2 due to increased trading volumes.
‡ Comprised of one investment that transferred from Level 2 due to reduced trading volumes.
23 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
2. Summary of Significant Accounting Policies (continued)
Investment Manager Valuation | ||||||||||||
Bank Debt | Other Corporate Debt | Equity Securities | ||||||||||
Beginning balance | $ | 51,436 | $ | 7,464,188 | $ | 1,252,190 | ||||||
Net realized and unrealized gains (losses) | - | 284,156 | 274,554 | |||||||||
Acquisitions | - | 148,281 | - | |||||||||
Dispositions | - | (729,167 | ) | (5,842 | ) | |||||||
Transfers out of Level 3 § | - | - | (147,574 | ) | ||||||||
Reclassifications within Level 3 ** | (51,436 | ) | - | 51,436 | ||||||||
Ending balance | $ | - | $ | 7,167,458 | $ | 1,424,764 | ||||||
Net change in unrealized appreciation/depreciation during the period on investments still held at period end (included in net realized and unrealized gains/losses, above) | $ | - | $ | 272,637 | $ | 274,555 |
§ Comprised of one investment that transferred to Level 2 due to increased trading volumes.
**Comprised of claims in the liquidation of a portfolio company that were reclassified as equity.
There were no transfers between Level 1 and 2 during the year ended December 31, 2012.
Investment Transactions
Investment transactions are recorded on the trade date, except for private transactions that have conditions to closing, which are recorded on the closing date. The cost of investments purchased is based upon the purchase price plus those professional fees which are specifically identifiable to the investment transaction. Realized gains and losses on investments are recorded based on the identification method, which typically allocates the highest cost inventory to the basis of investments sold.
Cash and Cash Equivalents
Cash consists of amounts held in accounts with brokerage firms and the custodian bank. Cash equivalents consist of highly liquid investments with an original maturity of three months or less.
Repurchase Agreements
In connection with transactions in repurchase agreements, it is the Company’s policy that the custodian take possession of the underlying collateral, the fair value of which is required to exceed the principal amount of the repurchase transaction, including accrued interest, at all times. If the seller defaults, and the fair value of the collateral declines, realization of the collateral may be delayed or limited.
Restricted Investments
The Company may invest without limitation in instruments that are subject to legal or contractual restrictions on resale. These instruments generally may be resold to institutional investors in transactions exempt from registration or to the public if the securities are registered. Disposal of these investments may involve time-consuming negotiations and additional expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted investments is included at the end of the Consolidated Statement of Investments. Restricted investments, including any restricted investments in affiliates, are valued in accordance with the investment valuation policies discussed above.
24 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
2. Summary of Significant Accounting Policies (continued)
Foreign Investments
The Company may invest in instruments traded in foreign countries and denominated in foreign currencies. Foreign currency denominated investments comprised approximately 1.3% and 1.6% of total investments at September 30, 2013 and December 31, 2012, respectively. Such positions were converted at the respective closing rate in effect at September 30, 2013 and December 31, 2012 and reported in U.S. dollars. Purchases and sales of investments and income and expense items denominated in foreign currencies, when they occur, are translated into U.S. dollars on the respective dates of such transactions. The portion of gains and losses on foreign investments resulting from fluctuations in foreign currencies is included in net realized and unrealized gain or loss from investments.
Investments in foreign companies and securities of foreign governments may involve special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include, among other things, revaluation of currencies, less reliable information about issuers, different transactions clearance and settlement practices, and potential future adverse political and economic developments. Moreover, investments in foreign companies and securities of foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies and the U.S. government.
Derivatives
In order to mitigate certain currency exchange and interest rate risks, the Partnership has entered into certain swap and option transactions. All derivatives are recognized as either assets or liabilities in the Statement of Assets and Liabilities. The transactions entered into are accounted for using the mark-to-market method with the resulting change in fair value recognized in earnings for the current period. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in interest rates and the value of foreign currency relative to the U.S. dollar.
During the nine months ended September 30, 2013, TCPC Funding purchased an interest rate cap with a notional amount of $25,000,000. At September 30, 2013 and September 30, 2012, the Partnership held a cross currency basis swap with a notional amount of $6,040,944. Gains and losses from derivatives during the nine months ended September 30, 2013 were included in net realized and unrealized loss on investments in the Statement of Operations as follows:
25 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
2. Summary of Significant Accounting Policies (continued)
Instrument | Realized Gains (Losses) | Unrealized Gains (Losses) | ||||||
Cross currency basis swaps | $ | - | $ | (126,670 | ) | |||
Interest rate cap | $ | - | $ | (32,598 | ) |
Gains and losses from derivatives during the nine months ended September 30, 2012 were included in net realized and unrealized loss on investments in the Statement of Operations as follows:
Instrument | Realized Gains (Losses) | Unrealized Gains (Losses) | ||||||
Cross currency basis swaps | $ | - | $ | 145,906 |
Valuations of derivatives held at September 30, 2013 and September 30, 2012 were determined using observable market inputs other than quoted prices in active markets for identical assets and, accordingly, are classified as Level 2 in the GAAP valuation hierarchy.
Debt Issuance Costs
Costs of approximately $3.5 million were incurred during 2006 in connection with placing the Partnership’s revolving credit facility. Additional costs of approximately $1.5 million were incurred during 2013 in connection with the extension of the facility (see Note 4). These costs were deferred and are being amortized on a straight-line basis over the estimated remaining life of the facility. The impact of utilizing the straight-line amortization method versus the effective-interest method is not material to the operations of the Company or the Partnership.
Costs of approximately $1.6 million were incurred during 2013 in connection with placing TCPC Funding’s revolving credit facility (see Note 4). These costs were deferred and are being amortized on a straight-line basis over three years, the estimated life of that facility. The impact of utilizing the straight-line amortization method versus the effective-interest method is not material to the operations of the Company, the Partnership or TCPC Funding.
Revenue Recognition
Interest and dividend income, including income paid in kind, is recorded on an accrual basis. Origination, structuring, closing, commitment and other upfront fees earned with respect to capital commitments are generally amortized or accreted into interest income over the life of the respective debt investment. Other fees, including certain amendment fees, prepayment fees and commitment fees on broken deals, are recognized as earned. Prepayment fees and similar income received upon the early repayment of a loan or debt security are included in interest income.
Certain debt investments are purchased at a considerable discount to par as a result of the underlying credit risks and financial results of the issuer, as well as general market factors that influence the financial markets as a whole. GAAP generally requires that discounts on the acquisition of corporate bonds, municipal bonds and treasury bonds be amortized using the effective-interest or constant-yield method. GAAP also requires the collectability of interest to be considered when making accruals. Accordingly, when accounting for purchase discounts, discount accretion income is recognized when it is probable that such amounts will be collected, generally at disposition. When principal payments on a loan are received in an amount in excess of the loan’s amortized cost, the excess principal payments are recorded as interest income.
26 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
2. Summary of Significant Accounting Policies (continued)
Income Taxes
The Company intends to comply with the applicable provisions of the Internal Revenue Code of 1986, as amended, pertaining to regulated investment companies and to make distributions of taxable income sufficient to relieve it from substantially all federal income taxes. Accordingly, no provision for income taxes is required in the consolidated financial statements. The income or loss of the Partnership and TCPC Funding is reported in the respective partners’ income tax returns. In accordance with ASC Topic 740 – Income Taxes, the Company recognizes in its consolidated financial statements the effect of a tax position when it is determined that such position is more likely than not, based on the technical merits, to be sustained upon examination. As of September 30, 2013, all tax years of the Company, the Partnership, and TCPC Funding since January 1, 2010 remain subject to examination by federal tax authorities. No such examinations are currently pending.
During the nine months ended September 30, 2013, the Company paid $969,946 in excise taxes related to income earned in 2012. During the nine months ended September 30, 2012, the Company paid $502,978 in excise taxes related to income earned in 2011.
Cost and unrealized appreciation and depreciation of investments (including derivatives) for U.S. federal income tax purposes at September 30, 2013 were as follows:
Unrealized appreciation | $ | 30,645,941 | ||
Unrealized depreciation | (113,178,794 | ) | ||
Net unrealized depreciation | (82,532,853 | ) | ||
Cost | $ | 786,700,186 |
3. Management Fees, Incentive Compensation and Other Expenses
Following the Conversion, the Company’s management fee is calculated at an annual rate of 1.5% of total assets (excluding cash and cash equivalents) on a consolidated basis as of the beginning of each quarter and is payable to the Investment Manager quarterly in arrears.
27 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
3. Management Fees, Incentive Compensation and Other Expenses (continued)
Incentive compensation is only paid to the extent the total performance of the Company exceeds a cumulative 8% annual return since January 1, 2013 (the “Total Return Hurdle”). The Company did not incur any incentive compensation prior to January 1, 2013. Beginning January 1, 2013, the incentive compensation equals 20% of net investment income (reduced by preferred dividends) and 20% of net realized gains (reduced by any net unrealized losses), subject to the Total Return Hurdle. The incentive compensation is payable quarterly in arrears as an allocation and distribution to the General Partner and is calculated as the difference between cumulative incentive compensation earned since January 1, 2013 and cumulative incentive compensation paid since January 1, 2013. A reserve for incentive compensation is accrued based on incentive compensation distributable to the General Partner assuming a hypothetical liquidation of the Company at net asset value on the balance sheet date. At September 30, 2013, the General Partner’s equity interest in the Partnership was comprised entirely of the reserve amount and is reported as a minority interest in the consolidated financial statements of the Company.
Prior to the Conversion, the Investment Manager received an annual management and advisory fee, payable monthly in arrears, equal to 1.0% of committed capital, defined as the sum of the maximum amount of the Preferred Interests, the maximum amount available under the revolving credit facility, the initial value of the contributed general partnership equity and the initial value of the contributed common equity, subject to reduction by the amount of the revolving credit facility commitment when the facility is no longer outstanding, and by the amount of the Preferred Interests when less than $1 million in liquidation preference of preferred securities remains outstanding. In addition to the management fee, the General Partner was entitled to a performance allocation equal to 20% of all cumulative income and gain distributions, subject to an 8% hurdle on undistributed contributed equity with a catch up for the General Partner.
The Company and the Partnership bear all respective expenses incurred in connection with the business of the Company and the Partnership, including fees and expenses of outside contracted services, such as custodian, administrative, legal, audit and tax preparation fees, costs of valuing investments, insurance costs, brokers’ and finders’ fees relating to investments, and any other transaction costs associated with the purchase and sale of investments.
4. Debt
At September 30, 2013 and December 31, 2012, debt was comprised of amounts outstanding under senior secured revolving credit facilities issued by the Partnership (the “Partnership Facility”) and TCPC Funding (the “TCPC Funding Facility,” and, together with the Partnership Facility, the “Senior Facilities”) as follows:
September 30, 2013 | December 31, 2012 | |||||||
Partnership Facility | $ | 102,000,000 | $ | 74,000,000 | ||||
TCPC Funding Facility | 48,000,000 | - | ||||||
Total Debt | $ | 150,000,000 | $ | 74,000,000 |
28 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
4. Debt (continued)
Partnership Facility
The Partnership Facility provides for amounts to be drawn up to $116 million, subject to certain collateral and other restrictions. On September 19, 2013, the Partnership Facility was amended to extend the maturity date from July 31, 2014 to July 31, 2016. Most of the cash and investments held directly by the Partnership, as well as the net assets of TCPC Funding, are included in the collateral for the facility.
Advances under the Partnership Facility through July 31, 2014 bear interest at LIBOR plus 0.44% per annum, except in the case of loans from CP Conduits, which bear interest at the higher of LIBOR plus 0.44% or the CP Conduit’s cost of funds plus 0.44%, subject to certain limitations. Advances under the Partnership Facility for periods from July 31, 2014 through the maturity date of the facility will bear interest at LIBOR plus 2.50% per annum, except in the case of loans from CP Conduits, which bear interest at the higher of LIBOR plus 2.50% or the CP Conduit’s cost of funds plus 2.50%, subject to certain limitations. In addition to amounts due on outstanding debt, the facility accrues commitment fees of 0.20% per annum on the unused portion of the facility, or 0.25% per annum when less than $46.4 million in borrowings are outstanding. The facility may be terminated, and any outstanding amounts thereunder may become due and payable, should the Partnership fail to satisfy certain financial or other covenants. As of September 30, 2013, the Partnership was in full compliance with such covenants.
TCPC Funding Facility
The TCPC Funding Facility, issued on May 17, 2013, provides for amounts to be drawn up to $100 million, subject to certain collateral and other restrictions. The facility matures May 17, 2016, subject to extension by the lender at the request of TCPC Funding, and contains an accordion feature which allows for expansion of the facility up to $200 million subject to consent from the lender and other customary conditions. The cash and investments of TCPC Funding are included in the collateral for the facility.
Borrowings under the TCPC Funding Facility bear interest at a rate of LIBOR plus 2.75% per annum. In addition to amounts due on outstanding debt, the facility accrues commitment fees of 0.75% per annum on the unused portion of the facility, or 1.00% per annum when the unused portion is greater than 33% of the total facility. The facility may be terminated, and any outstanding amounts thereunder may become due and payable, should TCPC Funding fail to satisfy certain financial or other covenants. As of September 30, 2013, TCPC Funding was in full compliance with such covenants.
29 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
4. Debt (continued)
The condensed balance sheet of TCPC Funding at September 30, 2013 was as follows:
Assets: | ||||
Cash | $ | 1,531,311 | ||
Investments | 96,543,370 | |||
Other assets | 2,024,193 | |||
Total assets | $ | 100,098,874 | ||
Liabilities: | ||||
Debt | $ | 48,000,000 | ||
Payables | 239,829 | |||
Total liabilities | 48,239,829 | |||
Equity | 51,859,045 | |||
Total liabilities and equity | $ | 100,098,874 |
The weighted-average interest rates on total outstanding borrowings at September 30, 2013 and December 31, 2012 were 1.39% and 0.65%, respectively.
5. Commitments, Concentration of Credit Risk and Off-Balance Sheet Risk
The Partnership and TCPC Funding conduct business with brokers and dealers that are primarily headquartered in New York and Los Angeles and are members of the major securities exchanges. Banking activities are conducted with a firm headquartered in the New York area.
In the normal course of business, investment activities involve executions, settlement and financing of various transactions resulting in receivables from, and payables to, brokers, dealers and the custodian. These activities may expose the Company, the Partnership, and TCPC Funding to risk in the event that such parties are unable to fulfill contractual obligations. Management does not anticipate any material losses from counterparties with whom it conducts business. Consistent with standard business practice, the Company, the Partnership, and TCPC Funding enter into contracts that contain a variety of indemnifications, and are engaged from time to time in various legal actions. The maximum exposure under these arrangements and activities is unknown. However, management expects the risk of material loss to be remote.
The Consolidated Statement of Investments includes certain revolving loan facilities held by the Partnership with aggregate unfunded balances of $2,480,000 at September 30, 2013.
30 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
6. Related Parties
The Company, the Partnership, TCPC Funding, the Investment Manager, the General Partner and their members and affiliates may be considered related parties. From time to time, the Partnership advances payments to third parties on behalf of the Company which are reimbursable through deductions from distributions to the Company. At September 30, 2013, no such amounts were outstanding. From time to time, the Investment Manager advances payments to third parties on behalf of the Company and the Partnership and receives reimbursement from the Company and the Partnership. At September 30, 2013, amounts reimbursable to the Investment Manager totaled $280,451, as reflected in the Consolidated Statement of Assets and Liabilities.
Pursuant to administration agreements between the Administrator and each of the Company and the Partnership (the “Administration Agreements”), the Administrator may be reimbursed for costs and expenses incurred by the Administrator for office space rental, office equipment and utilities allocable to the Company or the Partnership, as well as costs and expenses incurred by the Administrator or its affiliates relating to any administrative, operating, or other non-investment advisory services provided by the Administrator or its affiliates to the Company or the Partnership. For the nine months ended September 30, 2013, expenses allocated pursuant to the Administration Agreements totaled $592,422. The Administrator waived reimbursement of all administrative expenses prior to January 1, 2013.
7. Stockholders’ Equity and Dividends
The following table summarizes the total shares issued and proceeds received in the public offering of the Company’s common stock net of underwriting discounts and offering costs as well as shares issued in connection with the Company’s dividend reinvestment plan for the nine months ended September 30, 2013. In addition to the issuances summarized below, the Company priced a public offering of its common stock on September 26, 2013, the sale of which closed on October 1, 2013 (see Note 9, Subsequent Events).
Shares Issued | Price Per Share | Net Proceeds | ||||||||||
May 21, 2013 public offering | 5,175,000 | $ | 15.63 | $ | 78,176,790 | |||||||
Shares issued from dividend reinvestment plan | 2,174 | $ | 16.33 | $ | 35,507 |
The following table summarizes the total shares issued and proceeds received in the public offering of the Company’s common stock net of underwriting discounts and offering costs as well as shares issued in connection with the Company’s dividend reinvestment plan for the year ended December 31, 2012.
Shares Issued | Price Per Share | Net Proceeds | ||||||||||
April 3, 2012 initial public offering | 5,750,000 | $ | 14.75 | $ | 80,961,755 | |||||||
Shares issued from dividend reinvestment plan | 1,993 | $ | 15.25 | $ | 30,385 |
31 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
7. Stockholders’ Equity and Dividends (continued)
The Company’s dividends are recorded on the ex-dividend date. The following table summarizes the Company’s dividends declared for the nine months ended September 30, 2013:
Date Declared | Record Date | Payment Date | Amount Per Share | Total Amount | ||||||||
March 7, 2013 | March 18, 2013 | March 29, 2013 | $ | 0.40 | * | $ | 8,591,051 | |||||
May 8, 2013 | June 7, 2013 | June 28, 2013 | $ | 0.36 | $ | 9,595,344 | ||||||
August 8, 2013 | September 9, 2013 | September 30, 2013 | $ | 0.36 | $ | 9,595,692 |
* Includes a special dividend of $0.05.
The following table summarizes the Company’s dividends declared for the year ended December 31, 2012:
Date Declared | Record Date | Payment Date | Amount Per Share | Total Amount | ||||||||
March 9, 2012 | March 9, 2012 | April 3, 2012 | $ | 0.34 | † | $ | 5,400,000 | |||||
April 3, 2012 | June 15, 2012 | June 29, 2012 | $ | 0.34 | $ | 7,301,716 | ||||||
August 9, 2012 | September 14, 2012 | September 28, 2012 | $ | 0.35 | $ | 7,516,472 | ||||||
November 7, 2012 | December 17, 2012 | December 31, 2012 | $ | 0.40 | ‡ | $ | 8,590,586 |
† Based on 15,725,635 pro-forma converted shares before the initial public offering.
‡ Includes a special dividend of $0.05.
8. Earnings Per Share
The following information sets forth the computation of the net increase in net assets per share resulting from operations for the three and nine months ended September 30, 2013:
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | |||||||
Net increase in net assets applicable to common shareholders resulting from operations | $ | 12,909,635 | $ | 35,085,981 | ||||
Weighted average shares outstanding | 26,654,702 | 23,942,996 | ||||||
Earnings per share | $ | 0.48 | $ | 1.47 |
9. Subsequent Events
On October 1, 2013, the Company closed a public offering of 4.37 million shares of its common stock at $15.76 per share for gross proceeds of approximately $68.9 million and net proceeds of $66.5 million, net of underwriter discounts and approximately $0.3 million of expenses related to the offering.
On November 7, 2013, the Company’s board of directors declared a regular third quarter cash dividend of $0.36 per share and a special dividend of $0.05 per share. Both dividends are payable on December 31, 2013 to stockholders of record as of the close of business on December 10, 2013.
32 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
10. Financial Highlights
Nine Months Ended | ||||
September 30, 2013 | ||||
Per Common Share | ||||
Per share NAV at the beginning of period | $ | 14.71 | ||
Investment operations: | ||||
Net investment income | 1.64 | |||
Net realized and unrealized gain (loss) | 0.25 | |||
Dividends on Series A preferred equity facility | (0.05 | ) | ||
Incentive allocation reserve and distributions | (0.37 | ) | ||
Total from investment operations | 1.47 | |||
Distributions to common shareholders from: | ||||
Net investment income | (1.12 | ) | ||
Per share NAV at end of period | $ | 15.06 | ||
Per share market price at end of period | $ | 16.23 | ||
Total return based on market value (1), (2) | 17.7 | % | ||
Total return based on net asset value (1), (2) | 10.1 | % | ||
Shares outstanding at end of period | 26,654,802 |
33 |
TCP Capital Corp.
Notes to Consolidated Financial Statements (Unaudited) (Continued)
September 30, 2013
10. Financial Highlights (continued)
Nine Months Ended | ||||
September 30, 2013 | ||||
Ratios to average common equity: (4), (5) | ||||
Net investment income (6) | 12.2 | % | ||
Expenses | 3.5 | % | ||
Expenses and incentive allocation (7) | 5.7 | % | ||
Ending common shareholder equity | $ | 401,503,741 | ||
Portfolio turnover rate (1) | 31.1 | % | ||
Weighted-average debt outstanding | $ | 77,106,227 | ||
Weighted-average interest rate on debt | 1.2 | % | ||
Weighted-average number of common shares | 23,942,996 | |||
Average debt per share | $ | 3.22 |
(1) | Not annualized. |
(2) | Total return based on market value equals the change in ending market value per share during the period plus declared dividends per share during the period, divided by the market value per share at the beginning of the period. |
(3) | Total return based on net asset value equals the change in net asset value per share during the period plus declared dividends per share during the period, divided by the beginning net asset value per share at the beginning of the period. |
(4) | Annualized, except for incentive allocation. |
(5) | These ratios include interest expense but do not reflect the effect of dividends on the preferred equity facility. |
(6) | Net of incentive allocation. |
(7) | Includes incentive allocation payable to the General Partner and all Company expenses. |
34 |
TCP Capital Corp.
Consolidated Schedule of Changes in Investments in Affiliates (1) (Unaudited)
Nine Months Ended September 30, 2013
Security | Value, Beginning of Period | Acquisitions | Dispositions (2) | Value, End of Period | ||||||||||||
AGY Holding Corp., Senior Secured Term Loan, 12%, due 9/15/16 | $ | - | $ | 2,056,927 | $ | - | $ | 2,056,927 | ||||||||
AGY Holding Corporation, Senior Secured 2nd Lien Notes, 11%, due 11/15/16 | - | 7,586,317 | - | 9,124,346 | ||||||||||||
Anacomp, Inc., Class A Common Stock | 1,255,527 | - | - | 1,016,977 | ||||||||||||
EPMC HoldCo, LLC, Membership Units | 2,730,458 | - | (1,481,930 | ) | 1,562,137 | |||||||||||
ESP Holdings, Inc., Cumulative Preferred 15% | 3,643,088 | - | - | 3,947,862 | ||||||||||||
ESP Holdings, Inc., Common Stock | 2,263,124 | - | - | 2,864,872 | ||||||||||||
ESP Holdings, Inc., Junior Unsecured Subordinated Promissory Notes, 6% Cash + 10% PIK, due 12/31/19 | 7,134,137 | 364,499 | - | 7,574,339 | ||||||||||||
KAGY Holding Company, Inc., Series A Preferred Stock | - | 8,096,057 | 1,632,576 | |||||||||||||
N510UA Aircraft Secured Mortgage, 20%, due 10/26/16 | 548,340 | - | (59,630 | ) | 432,155 | |||||||||||
N512UA Aircraft Secured Mortgage, 20%, due 10/26/16 | 556,225 | - | (58,349 | ) | 440,895 | |||||||||||
N536UA Aircraft Secured Mortgage, 16%, due 9/29/14 | 277,780 | - | (105,163 | ) | 155,325 | |||||||||||
N545UA Aircraft Secured Mortgage, 16%, due 8/29/15 | 436,810 | - | (94,237 | ) | 314,355 | |||||||||||
N585UA Aircraft Secured Mortgage, 20%, due 10/25/16 | 653,220 | - | (68,510 | ) | 517,750 | |||||||||||
N659UA Aircraft Secured Mortgage, 12%, due 2/28/16 | 4,264,148 | - | (738,165 | ) | 3,220,168 | |||||||||||
N661UA Aircraft Secured Mortgage, 12%, due 5/4/16 | 4,351,424 | - | (715,870 | ) | 3,433,856 | |||||||||||
N510UA Equipment Trust Beneficial Interests | 479,682 | 59,630 | (26,934 | ) | 482,632 | |||||||||||
N512UA Equipment Trust Beneficial Interests | 473,761 | 58,349 | (26,492 | ) | 475,760 | |||||||||||
N536UA Equipment Trust Beneficial Interests | 624,746 | 105,163 | (33,901 | ) | 665,221 | |||||||||||
N545UA Equipment Trust Beneficial Interests | 616,897 | 94,366 | (35,652 | ) | 655,903 | |||||||||||
N585UA Equipment Trust Beneficial Interests | 583,391 | 68,510 | (35,082 | ) | 588,050 | |||||||||||
N913DL Aircraft Secured Mortgage, 8%, due 3/15/17 | 367,370 | - | (57,549 | ) | 312,630 | |||||||||||
N918DL Aircraft Secured Mortgage, 8%, due 8/15/18 | 454,580 | - | (50,943 | ) | 406,810 | |||||||||||
N954DL Aircraft Secured Mortgage, 8%, due 3/20/19 | 597,720 | - | (58,526 | ) | 533,120 | |||||||||||
N955DL Aircraft Secured Mortgage, 8%, due 6/20/19 | 612,000 | - | (56,298 | ) | 549,950 | |||||||||||
N956DL Aircraft Secured Mortgage, 8%, due 5/20/19 | 612,850 | - | (57,234 | ) | 549,780 | |||||||||||
N957DL Aircraft Secured Mortgage, 8%, due 6/20/19 | 617,440 | - | (56,790 | ) | 554,710 | |||||||||||
N959DL Aircraft Secured Mortgage, 8%, due 7/20/19 | 622,030 | - | (56,351 | ) | 559,810 | |||||||||||
N960DL Aircraft Secured Mortgage, 8%, due 10/20/19 | 640,730 | - | (55,519 | ) | 579,360 | |||||||||||
N961DL Aircraft Secured Mortgage, 8%, due 8/20/19 | 636,990 | - | (56,860 | ) | 574,430 | |||||||||||
N976DL Aircraft Secured Mortgage, 8%, due 2/15/18 | 473,280 | - | (59,136 | ) | 417,690 | |||||||||||
N913DL Equipment Trust Beneficial Interests | 111,520 | 57,549 | (70,524 | ) | 127,840 | |||||||||||
N918DL Equipment Trust Beneficial Interests | 120,530 | 50,943 | (67,003 | ) | 144,330 | |||||||||||
N954DL Equipment Trust Beneficial Interests | 113,390 | 58,526 | (80,813 | ) | 67,150 | |||||||||||
N955DL Equipment Trust Beneficial Interests | 160,650 | 56,298 | (79,828 | ) | 114,070 | |||||||||||
N956DL Equipment Trust Beneficial Interests | 163,200 | 57,234 | (80,928 | ) | 109,140 | |||||||||||
N957DL Equipment Trust Beneficial Interests | 163,880 | 56,790 | (80,593 | ) | 110,160 | |||||||||||
N959DL Equipment Trust Beneficial Interests | 164,390 | 56,351 | (80,261 | ) | 111,010 | |||||||||||
N960DL Equipment Trust Beneficial Interests | 169,660 | 55,519 | (80,008 | ) | 117,980 | |||||||||||
N961DL Equipment Trust Beneficial Interests | 171,360 | 56,860 | (81,410 | ) | 120,360 | |||||||||||
N967DL Equipment Trust Beneficial Interests | 83,300 | 59,136 | (76,920 | ) | 103,190 | |||||||||||
RM Holdco, LLC, Membership Units | 849,478 | - | - | - | ||||||||||||
RM Holdco, LLC, Subordinated Convertible Term Loan, 1.12% PIK, due 3/21/18 | 5,106,805 | - | - | 3,516,036 | ||||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche A, 11%, due 3/19/16 | 3,759,156 | 13,179 | (90,039 | ) | 3,682,296 | |||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche B, 12% Cash + 7% PIK, due 3/19/16 | 6,258,122 | 373,624 | - | 6,631,746 | ||||||||||||
RM OpCo, LLC, Senior Secured 1st Lien Term Loan Tranche B-1, 12% Cash + 7% PIK, due 3/19/16 | 1,976,470 | 123,303 | - | 2,090,096 | ||||||||||||
RM OpCo, LLC, Convertible 1st Lien Term Loan Tranche B-1, 12% Cash + 7% PIK, due 3/21/16 | - | 1,299,048 | - | 1,332,013 | ||||||||||||
United N659UA-767, LLC (N659UA) | 2,771,428 | 738,165 | (506,035 | ) | 2,906,193 | |||||||||||
United N661UA-767, LLC (N661UA) | 2,789,809 | 715,870 | (497,275 | ) | 2,916,543 |
Notes to Schedule of Changes in Investments in Affiliates:
(1) | The issuers of the securities listed on this schedule are considered affiliates under the Investment Company Act of 1940 due to the ownership by the Company of 5% or more of the issuers' voting securities. |
(2) | Dispositions include sales, paydowns, mortgage amortizations, and aircraft depreciation. |
35 |
TCP Capital Corp.
Consolidated Schedule of Changes in Investments in Affiliates (1)
Year Ended December 31, 2012
Security | Value, Beginning of Period | Acquisitions | Dispositions (2) | Value, End of Period | ||||||||||||
Anacomp, Inc., Class A Common Stock | $ | 740,761 | $ | - | $ | - | $ | 1,255,527 | ||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N913DL), 8%, due 7/15/18 | - | 403,947 | (37,389 | ) | 367,370 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N918DL), 8%, due 7/15/18 | - | 490,003 | (33,390 | ) | 454,580 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N954DL), 8%, due 9/20/19 | - | 631,014 | (37,814 | ) | 597,720 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N955DL), 8%, due 9/20/19 | - | 645,523 | (36,417 | ) | 612,000 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N956DL), 8%, due 9/20/19 | - | 646,372 | (37,011 | ) | 612,850 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N957DL), 8%, due 9/20/19 | - | 651,170 | (36,735 | ) | 617,440 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N959DL), 8%, due 9/20/19 | - | 655,930 | (36,462 | ) | 622,030 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N960DL), 8%, due 9/20/19 | - | 675,587 | (35,956 | ) | 640,730 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N961DL), 8%, due 9/20/19 | - | 671,812 | (36,803 | ) | 636,990 | |||||||||||
Delta Air Lines, Inc., Aircraft Secured Mortgage (N976DL), 8%, due 7/15/18 | - | 512,643 | (38,636 | ) | 473,280 | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N913DL) | - | 145,176 | (31,277 | ) | 111,520 | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N918DL) | - | 162,691 | (32,027 | ) | 120,530 | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N954DL) | - | 202,368 | (40,415 | ) | 113,390 | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N955DL) | - | 204,598 | (40,116 | ) | 160,650 | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N956DL) | - | 205,404 | (40,679 | ) | 163,200 | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N957DL) | - | 206,328 | (40,572 | ) | 163,880 | |||||||||||
Delta Air Lines, Inc., Equipment Trust Beneficial Interests (N |