ICMB - Earnings call transcript Q4 2024 | Investcorp Credit Management BDC, Inc.

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Operator

Thank you for joining today's Investcorp Credit Management BDC Third (sic) [ Fourth ] Quarter Fiscal Year 2024 earnings call. It is now my pleasure to turn the floor over to Mr. Walter Tsin, CFO.

Walter Tsin

Thank you, operator. Welcome, everyone, to Investcorp Credit Management BDC's Fourth Quarter and Full Year 2024 Earnings Call. I am joined by Suhail Shaikh, President and Chief Executive Officer of the company. I would like to remind everyone that today's call is being recorded and that this call is the property of Investcorp Credit Management BDC. this any of provided. is broadcast unauthorized call form in strictly Any replay be on Relations will the our by icmbdc.com. Audio call Investor available of visiting our website, page safe to forward-looking regarding and statements remind call attention also and press today's information call that include would in our like to I the may harbor everyone projections. disclosure release your forward-looking Actual results may differ materially from these projections.

over and and time, our Suhail. our Investor not by view this financials call follows: an law. portfolio overall copies an summarizing on by of provide followed required Relations today's I I overall forward-looking would business our our To the visit to unless results, latest summary, format statements update filings call then is like Q&A. At We Suhail will will to SEC for will a website. The page of the obtain as provide turn

Suhail Shaikh

loan, leveraging relationships sponsors We to LBOs, investments our you approximately about Walt, secondary opportunities million of able the year larger source rotation us deploy refinancing of rotation partners. activity to new $XX year, for the resulting proprietary portfolio quarter strategy driving were value in our of the future. Despite shift our our resilience for portfolio. the the as well quality disciplined environment, competition with been results fiscal and our you, nonaccrual by team capital us portfolio. market XXXX credits. attractive a executed of XXXX joining and deal was which by X% club a We've fiscal I'm Thank quarter, quarter year today thank investments. Notably, able for in during credit intense everyone for and over market turnaround stability and of portfolio paid to XX.X% fiscal approach off and in discussing into This of stable discuss percentage team's marked full the significantly reflecting our current from and past positioned at more of our first strategic end to efforts X/X the fair earnings. investments declined fourth we've to the the as has and has our for successfully challenging and the proud a are

spread XX, During year $X.X from of share. $X.XX credits approximately which declined into on per $X.XX market net of of spreads, average, ICMB average declined shifting value asset stable net generated our to weighted fiscal of was larger, per ended share share as approximately to June more million XX% approximately XX, quarter. X.X% driven June largely income prior investment X% XX% XXXX, the a $X.XX have as and of from investment the decrease share XXXX, This per income, a per or year. spread. The year's lower tightening by end current Net last from the

In terms $X.X driven in income $X.XX investment generated X% approximately from approximately previous decline of our fourth per by of net NAV per factors. million quarter declined share. NAV results, The two was the share quarter. we or

equity positions, few all stable our the relatively positions First, credit while remained a mark-to-market adjustments one by was but driven on decline of quarter-over-quarter.

debt our last portfolio XX%, quarter. million $XX loan-to-value our past And from to increased an has portfolio underlying of increase of investments quarter. XX% million performance affecting and Second, quarter these our overall the of new improved quarter the NII. timing in loaded performing back-end stability the during our factors, refinancings approximately as weighted ratio the from the ramp-up approximately deals resilience over and the were several credit Despite to is EBITDA the last median quarter. The of of continues average borrowers $XX show current

by shifting towards in over sponsors same portfolio that refinancings and from saw as some new are backed increased spread portfolio period, of the portfolio, X.X% investment partly lenders of our highly all The we credit We M&A to be weighted to experiencing of X.X% legacy below know. leverage especially competitive level the number the we levels. market Competition continue intense, remains Over that net with average the due continues last primarily a to volumes company. LBO compression. average for occur remaining consisting X of quarters, larger

in disciplined range. targeted offset and investments Our to remains repayments team new our originating the maintain leverage

structural While in new committed maintaining capital structures. to we and are competitive, documentation protections strong deals remain our

of portfolio an the three yield we a and million and new IRR with XX, average for we with XX.X%. existing investments new company three XX.X%. proceeds of weighted During portfolio companies. totaled at invested in the period, investments approximately approximately In quarter same Fundings cost portfolio companies ended totaling realized approximately million, June two $XX.X fully $XX.X

approximately we and in First, first-lien capital first-lien cost at Prevention the term in the loan care WendelGroup Institute our the market. to CPI company's Corp, for is an de-escalation or training existing LABL, consulting secondary price loan Crisis Multi-Color the to yield support or in the position provides term L-A-B-L a of refinancing known advantage professionals. CPI of CPI, invested is as portfolio of structure. of attractive also We increased a XX.X%. take company, human

Our approximately cost is yield at XX%.

in of company, also the an We participated existing Northstar. refinancing portfolio

an the term made was and investment Asurion. loan Our yield at XX.X%. We B-XX our IRR cost of in is realized investment first-lien on XX.X% the original

cell provider We an at of services support consumer price. attractive leading in phones, secondary device home Asurion insurance, purchased Asurion for market warranty and and electronics the the appliances. is

X.X%. cost is approximately Our yield at

in We Equity co-investment also Holdings Investcorp follow-on as on Private equity company made North America portfolio listed a LP. SOI our Aggregator small Pegasus

at positions first-lien the Potpourri, which during our relaunched both we've and Lastly, quarter. loan of refinanced Empire Office term

March been both invested June since in of and these companies XXXX, have We respectively.

Potpourri our approximately remains was Empire which and our realized pace, After quarter was approximately activity on healthy discuss IRR IRR realized XX.X% the a Our at we next investment on in end, will XX.X%. the quarter. net

at at XX.X%, food by trading X.X% and products June largest market packaging X.X%, value concentrations at XX.X%, services X.X%, X.X%. distributors our supplies company and services followed were professional XX, at of and at As industry fair entertainment by containers and commercial at

portfolio which of XX is previous positions, like quarter equity of would over Our back to increase and call one turn GICS in the to results. warrant are financial companies industry industries discuss quarter. I from an now Walt to end, of our as our the including

Walter Tsin

Thanks, Suhail.

XX, fair quarter ended XX. our on value was June $XXX.X March the XXXX, portfolio of compared the For million $XXX.X million to

assets were the XX.XX% from previous The of $X.X net was average $X.X Our from our approximately prior quarter of million assets weighted in was net ended March portfolio Portfolio's a net this million. yield in decrease $XX million, decrease quarter decrease from debt quarter. operations a XX.XX%, the XX.

investments instruments, borrowers, the and was of invested in X% other spread fixed portfolio portfolio was rate first our warrants X%. average on our weighted XX% debt lien, of was investments weighted average debt and floating XX The invested instruments. positions. were As in approximately our June the XX% XX, rate of remaining floor we X% our of equity, was consisted XX% in in and

basis average Our fair with fair and portfolio company position market on $X.X largest $XX.X million. was a value investment approximately portfolio a value on our basis market million, is Bioplan

leverage $XX XX, respectively, X.XX million of June the be the leverage respect the to a XXXX, Directors net capacity $X.X to XXXX, of million the as and record $X.XX as We declared previous XX, announce in as Board that of million compared liquidity, stockholder with of we have are had We to X.XXx X, of September X.XXx X.XX of share, XX, to ended net, which restricted or payable June had XX. cash of quarter credit in September and of to with for per on was cash, distribution a XXXX, $X.X One. gross our XX, November gross October on revolving of quarter. With under Capital approximately our pleased approximately,

in Form this our week. I of auditor. XX-K, which composition portfolio also is independent the regarding was to would earlier our address information our a included Additional of like change filed

of best to As related our we KPMG the ensure a with the have to We all not expertise are a accounting regular to independent this compliance, or support. possible change review that we engaged of is receiving new financial is as of part best a practices. statements to any simply It practices providers our that and ongoing ensure want issues auditor. service reflection and stakeholders commitment our

on to of prepared the to with to matter the over remarks. And that, like address We questions Suhail. turn end the back happy are at call the I'd any

Suhail Shaikh

into This Thank you, been stable year, credits. portfolio Walt. we more have the and rotating successful diversifying in

As towards invest our continually fiscal excited look about in high-quality we're we next capacity our our year, pipeline to opportunities. and

a for Q&A. As priority continue the prepared has always, preservation on please dividend. That be will maintaining stable and our concludes remarks. focused open up our line top Luke, capital to and

Operator

Our comes Instructions] [Operator question Thalmann. Ladenburg Chris Mr. Nolan at from first

Christopher Nolan

direction that as of the should to the new role. a the proxy lower yields for good the on investments, up forward? congratulations new going yields used be is Walt, step investment on The

Suhail Shaikh

Chris, this Suhail. is

probably a about points market also the those make should to spreads in way we I new should be think reflection. seeing it's We're board. some liabilities deals XX -- that across XX come following can mean, the point. we I at our basis think is, for

not tightening. a market and think is deals that I the there's capital more we mean enough So lot available, supply.

have our of is continue year. is don't where and guess a of is do to it given crystal beyond my expect for yet. to And We flow should pick the I volumes activity. pipeline see ball up just So the just that up. deal to rest pick today, we what own

some see look going widening some point, spread selection we at way credit in think we might or answering -- at to we So -- the your question. we're be

Christopher Nolan

funding the be would catalyst investment... it attractive for attractive be using what Would the more facility widening? a spread or -- And the costs, investment more for would be lower

Suhail Shaikh

Yes. the I the above. above. of think, Yes, all of all

Christopher Nolan

Okay.

So a by your Fed also ahead? days the impact you lenders the but lower for rate better from expect we funding change should to facility, expect cost

Suhail Shaikh

Correct.

Operator

don't questions, see I [Operator Suhail. Instructions] other any

Suhail Shaikh

you, announcing talking participating next for to quarter. earnings, forward in you, next look Thank to quarter's our the again. Thank you, call, we and forward Thank I Luke. again Luke. you look Thank everyone,

Operator

you, call. conference attending. today's concludes this everyone, for Thank And

Investcorp Credit Management BDC (ICMB) 27 Sep 242024 Q4 Earnings call transcript