TCPC - Earnings call transcript Q1 2018 | BlackRock TCP Capital Corp.

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Operator

Ladies and gentlemen, good afternoon. Welcome everyone to TCP Capital Corp., First Quarter 2018 Earnings Conference Call. Today's conference call is being recorded for replay purposes.

During the presentation, all participants will be in a listen-only mode. A question-and-answer session will follow the Company's formal remarks. I’d Vice turn Corp. President now, to call And McGlynn, Katie of Instructions] like the to over [Operator the TCP Investor Relations Global team. proceed. please Katie,

Katie McGlynn

Thank Michelle. you,

Before statements estimates and that of management performance. to contain would time statements not assumptions we of guarantees the call future such forward-looking the conference are may note on based at begin, I and this like of

call and materially statements This involve earnings risks change uncertainties made this from made quarter first projected. statements results to differ for March and release today Forward-looking could morning, of XX, forward-looking those Any on subject our and XXXX. are as actual the ended we are issued notice. without

the slide which refer posted and call, click now on CEO, Howard & will a please to presentation today's earnings call to will I Chairman also Events the turn and our select supplemental the link view over Investor website Presentations. Relations on to we We To presentation at Levkowitz. tcpcapital.com. our

Howard Levkowitz

Katie. begin announced I on our I on a recently here today. remarks and BlackRock team between the call our for TCPC will thank few our everyone external highlights quarter we advisor. followed participating from the first by Thanks, and transaction with with am

will questions. Our some comments, I closing financial CFO, will Paul then your results. Davis, provide call the remarks our review After to Paul's before opening

the first which totaling delivered opportunities summarized our was quarter, competitive in quarter the to demonstrating on of from the highlights quarter strong unique another We ability with of our million environment. investment X begin presentation. let's originations even Now XXX source first Slide in

first XXth, second dividend. income XXth a of out payable which per earned we This June of per quarter level net XX. quarter June consecutive holders incremental exceeded represents on prepayments. the the relatively earning $X.XX a And share X, our record to Slide of in in as income share dividend incremental net on despite we of shown declared of today lower dividend $X.XX quarter, the As

Our as quarter in value to X. Slide net increased $XX.XX asset the shown on

generated XX% plus in Slide NAV Fargo as the IPO dividends outperformed of demonstrated return XX% a on appreciation excess has by Our period. index TCPC over our Wells cumulative the X, have same BDC April XXXX. on And since

Slide to portfolio investments billion, $X.X invested portfolio at hold continue value XX X, wide of to Turning excess we in diverse which end, of a fair a a of companies a industries. quarter had variety across in market was

quarter together X% only our only represented portfolio of end. positions largest XX.X% five position largest portfolio the Our represent in at the of

on Slide of see you income the chart of companies. the a recurring left X, across As side can set in our distributed is portfolio diverse

any not company. portfolio heavily reliant from on are We individual income

to senior In instruments. fact, end, portfolio over debt recurring income. less our quarter than secured our our of companies contribute half assets of were X% XX% At

In of addition, XX% on were investments debt floating our as Slide shown rates. X,

fixed rate We rise positioning This rate years has several have recent accordingly, increases the liabilities. LIBOR floating the discussed potential enhanced allowed benefit and for by investments our to been our for from us rates predominantly our has reset. in benefit as to portfolio

opportunities borrow value an investments XXX deliver and Turning companies new $XXX to in relationships them. strong in six to of first the the be secured reflect portfolio Slide and senior to to source the XX. existing and important investments six These and quarter, companies million Of companies. in included our deployed existing notes. million loans Follow-on portfolio continue investment was in we

HighTower loan linked million lending diversified note, company, investments to million a automotive management portfolio secured a platform, commitment loan a to to senior million top then in Autoalert and asset maintaining a to the structure. a of $XX a reinforce backed commercial Our secured FX, provider quarter secured sale $XX $XX the capital to the top $XX customer management our loans the to solution first secured They service company, senior a industry. million follow-on wealth loan at SnapLogic senior a million and our deal $XX software five include senior credit

in is wide of Martello advertising, loan variety the lower to a pay first our quarter investments loan $XX the the industries healthcare $XX were payoff quarter We a spread were entertainment. quarter, first services, other Centers. believe our to results IO historical million business coincidence trend. first Prepayments Our included of rather across including million and than the this a dispositions in levels. more $XX likely than and of a In off Data of million

a New increase The the we XX.X%. LIBOR. overall effective exited had our XX.X% from on of investments a portfolio the yield quarter during we effective benefited weighted XX% end average from yield average of effective yield had debt the quarter investments quarter increased at to as XX% in and the weighted

pricing the we’re Given our continue generate environment, competitive consistently on to very investments. to strong yields pleased

for BlackRock Slide to a between Capital XX recently external Tennenbaum turn transaction announced and advisor Partners. overview of please an Finally,

same proven we’ll the to TCP As TCP for you aspect it full and provides TCP executing the own advisor us, many team. pursuant of exact of since Capital, with to been of of are same TCP expected the indirect we most is transaction, of has transaction definitive strategies continue process, investments last and approval Capital. of The to month focus this our become important investment TCP on to of responsible is agreement team the investments the Capital have To that as merge continuity the inception. for the TCP subsidiary and into an completion to will which a and subsidiary shareholder wholly BlackRock aware, BlackRock entered BlackRock. remain subject Upon

relationships the companies decades through has the several has we strong Over cycles. long-term Capitals deal consistently the our of a constituent. with returns sources, TCP performance other generated two team since portfolio firm, and started market function TCP been

the TCP our assets gain our the of as will Our expect the which of deep platform. sourcing, we scale advisor and completion from the managing will approach benefit transaction, part disciplined industry knowledge and upon and to BlackRock underwriting to resources portfolio, the

also the leverage structure the same structure, same team, class We and low cost consistent our advisory cost will TCPC expect fees to dividend commitments the same strategy, efficient same in maintain the policy. best and

As summarized believe competitive to XX, enable providing to this by; strengthen borrowers; and ability as source capabilities to talented individuals. transaction resources solution to the finally, second, our for attract a BlackRock’s first, to variety the us continuing we and to of our infrastructure; grow scale to commitment third, across ratio, greater business; continue and more expense fourth, access deal technology on position highly or administrative enhancing leveraging investment reduce will we innovative further our completion Slide source transaction needed providing channels;

very it the to Capital. forward our will We’re management to transaction excited look about TCP and the of benefits bring

to will discuss over results. quarter Paul Now, I turn will Paul. our financial the who first call

Paul Davis

our recurring and per Howard, Starting dividend continues cents. was $X.XX share. remaining out on The we including This and from by IPO. share of income total of on our share outstanding dividend amount unamortized this shares hello dividends end. income year earned Slide per interest share $X.XX, exceeding recurring discount was per million our covering based $X.XX $X.XX Investment per $X.XX of $XX.X PIK our and an Over Thanks, which came XX, prepayment since of also our every $X.XX have everyone. record investment fee per interest share, net share, was income that sixth period, OID. quarter for prepayment or $.X.XX was $X.XX fees the quarter amortization was quarter per $X.XXX income, and cash comprise recurring at income aggregate

income. of other also $X.XX earned share per We

gains losses unrealized than $X.XX of Net follows million company’s recognition conservative value debt compensation comprised expenses million of income share $X.XX investment at per from income as rather generally and per share. upfront investment our $X.XX market and $X.X generally $X.X the life Our of as of the economics of the it performance or quarter. included amortizing of share, a policy all NEG spreads $X.XX interest share investment per continues time million made. the recognizing realized primarily in well were Net investment net over as the of of our share of $X.XX per for improves. is were increase per to other resulting expenses $X.X the an realized in in of gains various tighter incentive Operating and

remained one which loan end, only to quarter non-accrual with credit continues strong at on zero. Our be quality marked at

total pending to closed with the includes Turning million. of $XXX.X liquidity quarter $X.X $XXX.X million, cash of leverage less million. XX, cash and equivalents of and Slide settlements of available This we million, $XX.X net

the earnings total LIBOR rate in call, million quarter refinanced new plus we a XXXX of February, facility our with revolving facility of noted a at credit $XXX with SVCP As capacity X.XX%. on fourth

on attractive We to continue are raising pleased terms. able be shareholder-friendly and debt financing to

program to leverage $XXX also quarter. outstanding draws our million increased on million the SBA We during $XX

quarter a XXXX is share rate As based gross repurchases X.XX%. X.XX we of SBA X.XX%, TCPC under our unsecured the NAV and convertible was of on at X.X%, end debt, of the algorithm. new I discounted end, net slight of outstanding LIBOR included note quarter, times quarter equity will back a of which of our facility our at the our X.XX%. on weighted our a debt cash net common a blended our end, SVCP times share to at Howard. rate at trading was LIBOR at notes leverage average stock With over issuances of interest and X.XXX%, at program rate X.XX debt plus modest turn the at now during call X.XXX% our At quarter, which and and debentures repurchase Regulatory outstanding was plus basis rates outstanding the our SBIC senior X.XX%, made on trades. facility rate of a funding combined

Howard Levkowitz

Thanks, Paul.

shareholders provide a to flexibility. net not below date is insurance not certainly on value. policy To XX months The be equity of to have invited substantially new our Our upon peers, investment Meeting prior The proxy a BlackRock, of will existing BDC effect many is with have agreement approve issue intend went our this will new is below shares of NAV proposal of of shareholders NAV clear, it every same management point a attend. XXth given management be we accretive on public. the years our common our to XX% since asset proxy year Tennenbaum proposal go as to up shareholders. in investment price terms at our on in are approved also our and proposal on all into the proxy is to in Annual the a It for over our June Included completion unless our at included below an any the which we Consistent with issuance purpose line we is basically agreement, Shareholder which to approval issue next and and do to agreement. shareholder the transaction.

Directors a will operating determined as withdraw SVCP's a the company no there to on as company provide The as SVCPs regulated under Currently, to TCP BDC has both BDCs. election Additionally, and proposal are our an SVCP Board XXXX operating savings. is a regulation be BDC. longer regulated proxy the the Capital as company necessary removing and Act our of holding is cost the continuing selection as

Now approximately lending to XXXX May direct includes we selective. companies senior by in I’ll yield source the as quarter yield loans. combined we record while was businesses With At U.S. the range. briefly invested investment the in continue raised investments the XX.X%. within result, are highly a market. remaining many X, effective in year active the are that over our of quarter opportunities cover that backdrop well historical we're pleased competitive. market through of market. Against pipeline a we million what funds the lending our seeing this three have remains XXX,XXX and approximately middle is attractive secured majority In second The transactions for are point these $XX middle this primarily capital

for continued reasons. Looking growth positioned several ahead, we for are well

our of two middle-market companies across experience investing cycles. decades nearly First, multiple market in

portfolio opportunities. deal Second, our relationships ability long-term investment to with and unique provides which the companies sources source us with

priced credit always platform remain for a Fifth, interests will to BlackRock shareholders. that downside with protection. sources alternatives. aligned have been Fourth, low our resources capital opportunities on of And funding significant will and will finally, our and partnership market-leading scale private our and attractively of and our diverse financing our debt create geographic equity and enhance which closely quality with shareholders. provide Third, with cost variety a focus access reach our credit

strategy Looking the same. our to future, remains the

on focus our questions. focus of sources our all earnings and to about support. for the We please diverse shareholders open and will our priced future. excited generating to continue a your like And we would capital preservation performance from funding that, the closing, portfolio call are optimize effectively We on to strong capital. In deploying by for stream attractively thank with of your continued operator, recurring our confidence

Operator

of [Operator Instructions] Our Kotowski Chris question & Company. first comes Oppenheimer from

open. is line Your

Chris Kotowski

Howard, yourself of least could leverage have the limits? I was your to Do wondering, to? desire or new talk first any of to avail have all you if about them option you the or at intent approach

Howard Levkowitz

Chris thanks for question.

every business legislation the works been new We've change looking very would are the dividend cover we model quarter our Our at well able today. and make. enable us to to and that it with

We with Directors, of are Board and stakeholders providers. discussing it including our leverage shareholders,

future. no in make deliberately we to any the decision apprised if we’re and any considering and to anything we’ll are keep in rush do We changes make it, you

Chris Kotowski

press also then Wireless the see is there release or also I I on typo guess producing non-income the then that revolver. in Kawa, footnote in C, there? just footnote wondering, appear one was on non-accrual, but wondering, Gogo security prepared and the Holdings there said the a was Intermediate only is story I I is just that you And comments

Howard Levkowitz

rate. be accrued. mean is I doesn’t zero, interest The have Kawa rate nothing so would interest there to an

Chris Kotowski

XX%, it XX.X%? Gogo, says And Okay.

Howard Levkowitz

Gogo, look to back let -- get I’m at and not you. things seeing exact me that

Operator

Our Vandegrift comes next of from question Leslie James. Raymond

open. line Your is

Leslie Vandegrift

necessarily on on, question that question a increase the leverage but but different BDC space. the rush, you have about on rest I the extra I not mentioned know but not leverage, of use of your of considering

Do into you leverage other the larger changes more comment traditionally in area which on? As investments. focused in companies competition one to EBITDA that that you for peers the hear believe you have lien first on go extra

Rajneesh Vig

Yes, applies, conclusion mode. trying reaction reasons the rules. There leverage seen Raj think the we’re reiterate, increase in SLF to we’ve been wide I of maybe very to where make that folks various to take said not in a variety Leslie, off and looking information for one. to I Leslie, seems us, and I’ll to a for its balance I here. to a Howard think a just increase informed JVs. it And we’re To about have versus what question gathering to rush your an take think sheet more.

changes know indirectly segment of off versus been have apply meaning sheet. that that, can you where anything the that the they it, on perhaps balance you sheet. in So, changes balance leverage addressing sort put do of companies don’t balance that on terms to versus I increase it sheet

past. available day For at we look when underwriting, clear to the don’t looking levered then is do really function where us, we to ask have leverage at it's a of appropriate. the we be basis, we’re that the underwritings what just end on have We or the mean stated unlevered portfolio think in on fund you of a return on the and where we at asset and

the I doing So, terms of we’re companies a of accessibility than today. much leverage look of forward-looking us is in again that what very at more for decision we don’t we how anything changes and know we in And underwrite. how do terms is

Leslie Vandegrift

of the cetera, manager, gave be get the investment at. could there by that would by even larger it as or at change the the to acquisition the that color kind And of the you just platform whether TCPC's then you can scale are size BlackRock but average offer the of platform? looking and the again on some companies about et investment on What

Howard Levkowitz

the there even invested XXXX cross to expect years. bring of of we to. we to other we’ve we with now don’t advantages some the transactions institution And transactions speaking, to those for we one types to change with do been our the other have order we in expect companies to deals. have the we same have we be would to have up have without use are today platform, able third-parties. exemptive to to in that But to are be where significant capacity a that many to in is parties that Currently, are part needing investor the lending need BlackRock ability do since club but Generally companies that of targeting

Leslie Vandegrift

the question. quarter? income amount was modeling the of just your for portfolio spillover What at the then a end And last

Paul Davis

This basis $X.XX of of about quarter, At on the earnings we’ve the end GAAP is excess over the dividends. Paul. got a

Operator

Our DA of Christopher next question Davidson. from comes Doug

open. is line Your

Doug Christopher

the qualitative We strong BlackRock. know that at and your have Tennenbaum that TCPC, history various strengths and we

fee about the profit breathing distribution structure. reduced other as is and hedge wondering in room seen Just the incentive some tight to change space, spaces? dividend, rights income spread MLP maybe there the other dividend changing more the and are the expenses the tighter. to to sharing thought Is gain the versus fund we’ve is is getting any like to the way spaces model or/and seems the only there XX% It

Howard Levkowitz

So, and every be structure considered to pleased cumulative able we with many are we have think dividend to I been what quarter. a analysts best-in-class have a fee our to outearn rate, hurdle have

so And us. well believe the structure for works that we today, the rate

Operator

of question Fargo Our Jonathan comes next Bock Securities. from Wells

Jonathan Bock

why? want not us answer presenting separate this, giving environment leverage give in risk better So deals competition, that and Or a premium? your areas, get is are underwrite better adjusted and the to you in finding whether want your I if two to distressed better find everything comparable, TCP. but given situation, I which investments of levels ability the across landscape you it’s sense it’s situation and whether is of in you more Howard, assets investment based understand the where do we sit sense as quite spreads complexity are with returns? backed sponsor be where How standard -- cash complexity deal? will a environment sponsored capture flow to tendency landscape today’s just finance the as to we in the and not opportunities And complexity with what sit value we well attacking well this just relationships a in call

Rajneesh Vig

in, Hi, thank with sit to will for Jon. with It’s and ask the Howard things. how and where answer Raj. I marketing jump you positive start to we preview to try we perhaps approach that

complexity you’ve how to one think complex situation situated that at on approaches. I variety of how necessarily clarify applies more it very And more that story it risk, is always a something with there or at is, risk-based our doesn't it. given background both I market, a lot look just that say complexity to thing we your between mean regardless think understanding often means line special would structure we've the to think just may storyline, assessments complexity. from has actually less of of by situations, I times And a the at looked point small people the being because well complexity ability not better And as XX of side lending. different across to that mean captured and to price can I looked XX risk or direct team understand it's first versus crowd the

So but that for better able pricing, specialty backgrounds take and that structure better to been say certainly episodic risk-adjusted is I to or we certain example around would other areas consistent. we certainly advantage market and asset as been from more and look ability that and just or the complexity of. returns. has understand the It's approach time That’s things to areas it's that not certainly financing areas a take in are something inception over of an dynamic aircraft current a, have

five a of just out club. in six landscape the either turning -- sole of the reminder sponsor are quarter deals or for as small On current just instance the

efficient where bilateral be really more team. you the a institutional sponsor And you still the is there's tried structure. that’s where fundamentally not or think what within But is, it a or sponsors, lower very It party differentiate market-based direct widespread, lend or process discussion it's happens are a a competing we about on than of so to really that to driven it pricing structure perhaps lot because itself and it financing getting are trough long volume process discussion syndicated the not is management most is pricing. when discussion mainline friendlier we as way

some we predict in cases but that as would both more I how has there areas it in on Again, through, in situations, sponsor being certain way some a to So, with the both work pricing current rolls is loans I interesting opportunity. found party think can good market. and/or that with even underwrite complexity say a no a

Jonathan Bock

where the wondering, that you facility rocks in and SBIC SBIC how a appropriate? barrier bit additional Roger, no growth Or over fitting candidate while are it this are make Howard, no focusing is I'm effectively additional attractive facility, for is the flowed origination perhaps are is rising is the on growth a longer turning just that's financing rate here so Clearly, let's Or turn you're over minute. licensing the to you this? slowing given the there for an the longer of any environment? -- excellent time. a

Howard Levkowitz

the your last about and slower the in add said one quarter, for with we mind is just actually my of $XX would have This slow Sure, I counter investments but was been quarter faster out some is two box deployment seen quarter with better dollar been and actually a lends. in comment for -- we approximately a better compromised we this a in million. liked names and amount to the the second, have which for name slower on new it's It's But right have than SBIC. past, Jon. pretty strong

attractive So, I that's of the some facility question, the rest same as those it the chunk a opportunities but with nice find answer seeing margin don’t we not we the facilities. at it’s less To think business. the your still are across there, just applicable, frequency good necessarily

agree your that I a and on a good in it shine will to all from candidate we’re it good with with comment manner. and to to do increase think versus We we install look continue continue prudent that away for names plan and

Paul Davis

has probably we lot senses across the the that John, had more don’t facility just for has any particular but it our been rate our which it capital. repayment to of that a we’ve rest one in the coincidental, recycling addition of that’s has And been that portfolio. is reason know than Yes. of higher

might more actually than draws. appear it our bond it’s from So, active

Jonathan Bock

I that. few we appreciate revisit perhaps it here idea the is. And and if then to general a one two can thinking additionally,

If way that decision, appreciate your would you might the of of no that a there an a know perhaps if charge, be in the it, as transaction to it’s sit and perhaps you and find which be do process that an had your a to one LXXX? deliberated and call, against that there. board two to thought sense folks sit Clearly as LX you fullest yield I quality the I know in in yield the Howard, feel extent. in additional the get the leverage be market made the understand but that opportunity Howard, out you to lower perhaps access first we require with constraint pursue, term of what cannot well lower risk also that current given going

Howard Levkowitz

constituents. is is discussions transactions. to our of board, shareholder, and providers what starts the in question it way doing rate lower This summarized our There enables our with you've suggesting, kinds which different the with other think regulation same people from you’re doing the the change leverage no important do including to all well. things the the I transactions the that

an people Of course, leveraged on there do how depending may offsetting that. be cost

thing. whole the analyzing are We

regulation less in leverage basis if and opportunities, have XXXX at focus look sort legislative via and really AFFE the holistic of focused really can with with creates as think including on with on BDC. been that’s an vehicles leverage institutions some been is about Our some it think opportunity and important more and since you we do we’re and on. and this the we managing we to change we’re which has Clearly, really

analytics we also because we’re processes just our in change that’s rush. works have in model no for we today recognize our a do so, and risk to and constituencies but place this, And significant

Jonathan Bock

that on the leverage are leverage, When to on if would the point Maybe another then left you’re several going the math you’re question be say. incremental an of cost at let so deploying the spread choose and pursue you LX, is, incremental asset XXX you financing points top last there asset lower LX, And zero strategy risk virtually on like that are to look folks incremental charge just investors. into fee basis that to is is.

were on in approach of you passed those leverage particularly that if to where be to ROE trends. Do amount believe onto some needs dependent you your incremental and you invest going So, think shareholders? is that that

Howard Levkowitz

I debate math. you Jon, will not

still very is math Your good.

I and fundamental question our would something like is whether business our made of private bring investments. change we you’re in do And model vehicles assets kinds it been that continuing other if has think of the to TCPC, do rate we do is not suggesting what which making same some and bring lower in versus haven’t in be though to-date we were would we any to exactly types the assets change we we a decision here. make clearly again, could any in,

way making is that thing in we changes decision to we sensible perfectly But people for that so our any And any case some agree we haven’t about a the made operate. consider. in

Operator

Our Nolan from Christopher Thalmann. of next question Ladenburg comes

open. is line Your

Christopher Nolan

ownership the how levels you access external to for new where now, BlackRock’s capital, does the Given changes become equity manager are regulator debt? your leverage or

Howard Levkowitz

have access to revolvers, look the side as we’ve good you our with so regular markets accretive different balance including overtime. two loans basis at placed structured converts unsecured an been facility. the well Yes, raising as capital way SBA intentionally methodically sheet, it’s right our to And and on of equity if multiple

have capital what to and we markets. pleased becoming we of to have part the BlackRock are that up we Clearly, addition today. believe effective we access So, opportunities us will open good with as But well.

Christopher Nolan

think you BlackRock will offering? in Do invest equity next

Howard Levkowitz

on no that. opinion We have

Christopher Nolan

question. Another

have you you’re hires, to new do or doing through directly? For go BlackRock

Howard Levkowitz

to form. The the business the in operate goal continue substantially is to same

about. obviously series once really will critical a part we this is of process in that become be entire we of organization excited to of But a part involvement of something be of process. intended and part So to things clear, very we’re there become their which part will be with is very them, our their team

Christopher Nolan

the of employees BlackRock inclusion does there the compensation at And for all? incentive change

Howard Levkowitz

to expect series investors designed been place are interest our a incentive people in of that has platforms always mechanisms allowing which philosophy. our to across We with our the of retain our

Operator

from with National comes Securities. Christopher question next Our Testa

Your line is open.

Christopher Testa

the could of Howard, quantify sort just at available? how make guys than you the any just be bring available the wondering leveraged you quantitative if provide BlackRock of and other of that you how guys think terms you sponsor co-invest would acquisition metrics you a loans will previously many under you much in investments TCP of bit will to could helpful. think similar is scale available little addition be Just

Howard Levkowitz

So yes, the don't I going as question same we and have certainly it's works think change. to it, have capacity the well same incremental might doing we impact probably for But as beginning. huge huge that’s It a us think on we it expect team give have some the that the more a initially initially, way them to institution, We to we about are expect have don't business we an time it in over process. ultimately impact.

Christopher Testa

for you club was on kind the it's the to large understand, of write. I’m you well out overtime, strategy with of just and your ballpark just had extremely some sure has one narrowly in I you guys telling check people select things large end the obviously of thinking mean that’s worked comments deals I mentioned up but

three road $XXX the from business sense and of is you think to a I’m million what what just terms million scale? check $XXX $XXX let's going like getting table get a TCP million do check trying think check. down I’m you say bring of guys to to the years this in the two that or year say riding So years is that let's even go to

Howard Levkowitz

to as Good a of the time compete idea statements. we enable us and enthusiasm. not question, we're our to share important scale part the that about something to But fair today be able asset in generally business it's is of that making excited very questions, we the are we they being talking forward-looking institutions it largest manager and over are that on can't and will

Christopher Testa

and have vice with to versa? BKCC public some And with current will have affiliation if deals will And you any BlackRock's co-invest TCP other BDC? not, guys

Howard Levkowitz

to will about do the part BDCs respect to which no separate. answer With question there size. plans able have So, than of two current to your the the more are we to is co-investment, that anything other being to to keep initial do do ability

Christopher Testa

sense pipeline. give spoke borrowers is? the about of for composition your in us current wondering Can just [indiscernible] I’m incumbent a you what And you quarter pipeline

Howard Levkowitz

take there were different… saying I’ll you incumbent you little Yes, an because or that, sources mean don’t When I mean exact borrowers, or I do breakdown, companies is obviously you will. channels a have

Christopher Testa

By company?

Howard Levkowitz

but opportunity the I of exact we seen a portfolio have in of It's I nice a have of is to of the years, few Yes, nice last opportunity. think pipeline, breakdown. a source companies. invest majority it over been the don’t not it. existing course the It's an piece

opportunity, question is back guess come can qualitatively your I come which to back if that I’ll with you answer specific but quite kind is So us of a an let we on breakdown.

Christopher Testa

about one housekeeping me a for question. Last just

this zero at investments least non-control came there. always non-affiliate and something there quarter, from was at Your traditionally in other income

if kind be that’s on? that of a won't something or Just one-off ran-off coming event wondering, back just

Howard Levkowitz

historically very lumpy what quarter. -- having the a it is on number lumpy we quarter that is -- the just number, during it transactions are just That’s depends

Operator

Derek Bank next Hewett question America. of comes from of Our

Your line open. is

Derek Hewett

association to Howard, equation does BlackRock how the franchise change investment an then the in current more And BlackRock given that given is form? maintaining scale with the that grade the run its important of platform? importantly rating

Howard Levkowitz

is respect In that difference they something although with the of the the So, rating, it. rating thank think probably us to did whether institutions. you to than large before be question. generally operate agencies BlackRock reverse have for better association us any could of order the if and makes we important it’s to very like current with our capital have we’re the low pleased to cost part we question, first speaking address With

we is capital, to do, that And diversified something important of to operate we is have about we so our sources capital an us. but as also maintaining think business way that attractive we the how of cost know our

Derek Hewett

on $X going that or of gain core that, And then the quickly entertainment. on was What million roughly, there driving the American was was something Idol $X on? million revival equity else

Howard Levkowitz

a that’s things. a you’re better that the hope that’s owns doing clearly We combination show is assets, the company and series and watching of one of

Operator

question Our next James. Leslie from Raymond a is of Vandegrift follow-up

open. Your line is

Leslie Vandegrift

follow-ups. quick two Just

in a be going that the earlier no longer BDC savings. call, mentioned so electing You will and cost to the SVCP, to be be

or of second expect? to of if to you it’s that the First or it cost on going BDC that, be one, And magnitude the is sheet manager? savings the balance to BDC savings How, the income what’s payment.

Paul Davis

large, filings mostly There but enough is of make some to thing. substantial Not the savings around that This and Paul. will switch. sort be cost

Leslie Vandegrift

would statements? those the beyond And BDC

Paul Davis

to be will the savings the those BDC. Yes,

Leslie Vandegrift

suggested ago, highly focusing then, then Howard, SEC to rules two as are met that likelihood those move? half any minute you color, update financial I Okay. that that on spoke guess going something or corporation the have review and subcommittee in. weeks seems they be that and what you investors and And that the a ago AFFE the you’re Do the mentioned interested be And rules. with Chairman on can to

Howard Levkowitz

plugged that sounds remain in It We information legislatively. you’re more pretty like I hopeful. had we after hearing. wish

one indications seen more that historically it. be of issue bit to think this and certainly the I seems focus there better we’ve on little a on

on cautious the years. probability agenda it's number because though for We’re now of obviously on been assessing its a

Leslie Vandegrift

around for that the true. be a Yes, as no… years, leverage fair To there rule helpfully six so is agenda is

Howard Levkowitz

not long. it’s hope let’s Well, that

Leslie Vandegrift

follow Thank you Exactly. up. taking my for

Howard Levkowitz

you, Thank Leslie.

Operator

Our Kotowski from Company. next is question follow-up Chris a Oppenheimer from &

is open. Your line

Chris Kotowski

Does -- you is philosophy base was quarter since are in and I dividend comment the that just almost on a special that? dividend you mean but you every or reflect curious had can difference I XXXX. just haven’t a that -- beating

Howard Levkowitz

for Sure, thanks asking.

used some we special point you frequency. dividends to out, do with As

dividend received in in confusion quarters and to around be didn’t them some reached some people universal seem reports to better that with retaining opinions to and income have shareholders spill-over some seem there that the value talked of we this we conclusion and seem the coverage. As much we fact we the it when even that be and on most weren’t thought did although

Howard we at the is as with further turn the done It haven’t why discuss we look remarks. board back it. are our call dividend that’s closing for Levkowitz So to I’d there. something no we any to questions. like over do There policy continue to

Howard Levkowitz

Thanks dialogue. to our again professionals thank at like experienced, today’s We our joining call. of Corp. would concludes This and team appreciate and dedicated I your TCP for talented us. questions Capital

Operator

Ladies and gentlemen, conference. does conclude this today’s

Everyone, great disconnect. have now may day. a You

BlackRock TCP Capital (TCPC) 9 May 182018 Q1 Earnings call transcript