Q1 2020 Earnings Call
Good afternoon, welcome everyone to backlog TCP Capital Corp, first quarter to those 20 earnings conference call.
Today's conference calls you recorded for replay purposes.
During the presentation, all participants will be about listen only mode. The question answer session will follow the company's fibermark.
That's a question. Please press the star team's focus I visited one.
Oh PPI construction before we begin acuity session.
Now, let's turn the call over to Kevin Mcmullen never feels like what TCP Capital Corp, Global Investor Relations team Katy. Please proceed.
Thank you Shannon before we begin I'll note that this conference call may contain forward looking statements based on the estimates and assumptions of management at the time such statements and are not guarantees of future performance.
Forward looking statements involve risks and uncertainties and actual results could differ materially from those projected any forward looking statements made on this call or meet as of today and are subject to change without notice.
This morning, we issued our earnings release for the first quarter ended March 31, 2020, we also posted a supplemental earnings presentation to our web site at TCP capital Dotcom.
To be the slide presentation, which we'll refer to on today's call. Please click on the Investor Relations link and select events and presentations. These documents should be reviewed in conjunction with the Companys form 10-Q, which was filed with the FCC yesterday.
Now turn the call over to our chairman and CEO Howard Levkowitz.
Thank you Katie.
First and foremost we hope that everyone is staying healthy and say.
Thank you for taking the time to participate on our call today.
There are several members of the TCPC team on the call with me, including our President and COO Raj Vig and our CFO Paul Davis.
I will start with a few comments on how our team is operating at the current environment.
I will then provide an update on our portfolio in financial position.
Well its comment on our first quarter performance in activity.
I will then provide a detailed review of our financial results and our capital and liquidity.
After Paul's comments I will provide some closing comments on the current environment and our outlook before opening the call to your questions.
The health and safety of our team has been a priority since the start of the pandemic.
In early March Blackrock implemented firm wide business continuity procedures.
And we are pleased to report that our team has been fully operational as we work remotely.
Jack rocks robust technology platform has allowed us to work securely from home without interruption we.
We have also been leveraging the extensive resources of the Blackrock platform to getting insights on the evolving environment across industries and asset classes.
Our team has been lending the middle market companies for over 20 years through multiple market cycles, and our underwriting process incorporates downside risk analysis.
Our team is aligned by industry and the same team members, who underwrite and manage direct lending investments for TCPC also underwriting special situations investments as a result, Oliver team members have experienced working through challenging situations and are well prepared to navigate the current situation.
It is clear however that the nature of the Cobot 19 crisis is unique and it's brought impact including significant limitations on economic activity and mobility across the world.
Middle market companies sort of a vital role in our economy and we've been working closely with her borrowers and other stakeholders to help these companies sustain their businesses throughout the dislocation caused by the pandemic.
This work has included additional detailed reviews of our entire portfolio to proactively identify companies that could be materially affected.
Well our portfolio is generally invested and less cyclical industries and we have limited direct exposure to industries that have been most impacted we have been actively working with management teams to facilitate information and assistance.
We have a strong balance sheet with diversified funding source isn't sufficient liquidity.
In a well diversified portfolio.
We had no new non accruals during the first quarter. Additionally, given stock price volatility during the first quarter, we opportunistically repurchased 1 million shares of our stock, resulting in an and navy contribution of nine cents per share.
Turning to slide five in an update on our portfolio.
At quarter end, our portfolio had a market value of approximately $1.6 billion, 93% of which is in senior secured debt.
Our investments are spread across a wide variety of and.
Range of industries, and while the impacts of the global pandemic are likely to be proves basis.
We have limited direct exposure to sectors that have been most severely affected by the global downturn.
Furthermore, our loans to companies indirectly impacted industries are supported by strong collateral protections for example.
Our investments categorized as textiles apparel and luxury goods are primarily brand licensing businesses and our loans are collateralized by intellectual property and or inventory.
Our airline exposure was limited to 3.3% and our loans in this industry are collateralized by planes and engines designed to have a higher value retention in a downturn.
Additionally, all payments on interest and amortization our current.
Our investments in energy equipment and services were limited to 1.8% of the portfolio.
Majority of which is an investment in a company that provides environmental compliance software to large diversified energy companies.
Our diverse portfolio includes 108 companies our largest position represented only 4% of the portfolio and taken together our five largest physicians represented 16%.
Furthermore, as the chart on the left side of slide six illustrates our recurring income is not reliant on income from any one portfolio company.
In fact, well over half of our individual portfolio companies contribute less than 1% to our recurring income.
As of March 30, Onest, 92% of our debt investments for floating rate and 66% of these investments for subject interest rate floors. Additionally, 83% consisted of first lien exposure as demonstrated on slide seven.
Moving to our portfolio performance during the first quarter the broadly syndicated loan market experienced significant volatility in March ultimately ending the quarter down 1100 basis points from the started the year.
Well, the private loan market experienced less volatility than traded markets wider spreads and markdowns in our portfolio led to at 5.5% decline in the fair value of our portfolio and an 11% decrease in net asset value net of share repurchases.
Substantially all of our investments are valued every quarter using third party sources consistent with the process used for over two decades.
Turning to our capital and liquidity as of March 30, Onest, we had a diverse leverage program with no near term maturities, 53% of our outstanding liabilities run secured 33% were bank facilities and 14% were from our SBK facility.
Additionally, we had at $259 million of remaining capacity cat capacity on our credit facilities, all of which was available.
This liquidity is nearly five times the level of outstanding unfunded commitments to portfolio companies.
I would now like to discuss our deployment activity in the first quarter gross deployments in the quarter totaled $143 million and included 13, new loans seven of which were with existing borrowers.
Follow on investments in existing portfolio companies continue to be an important source of opportunities.
From a risk management perspective. These are credits, we know and understand well.
We believe these opportunities reflect the strength of our borrower relationships and the value we delivered to them beyond just capital.
We also continue to focus on investments, where we co lead negotiations in the first quarter, we worry there so lender or part of a small club lenders on 10 13 of our new investments. This allows us to set deal terms with solid credit or protections and taken more active role in helping companies manner.
Which through periods of dislocation.
Dispositions in the quarter totaled $77 million and include the pay off of our 31 million dollar loan to first advantage and the sale of our related equity.
We initially provided a first lien financing solution to first advantage in 2001.
We subsequently led a second lien financing leveraging our deal teams industry experience and experience with technology services companies.
Over the course of our investment first advantage improved its operating platform and cost structure launched new technology solutions and meaningfully expanded its client base.
The company's improved performance led do it successful sale in the first quarter of this year and our loan was refinanced the sale of the equity from our warrants resulted in a realized gain of $4.9 million.
Other paydowns in the quarter included $11 million pay down of our loan to authentic brands and a $5 million pay down of our loan to kind of cool.
New investments during the quarter had a weighted average effective yield of 9.5%.
Investments, we exited had a weighted average effective yield of 10.1%.
The overall effective yield on our debt portfolio was unchanged at 10.3%.
As of March 30, Onest 2020, LIBOR had declined 135 basis points since the end of 2018 or 48%. This has put pressure on our portfolio yield and has resulted in an eight cents per share degradation and recurring investment income over this period. However, we have limited exposure to any further decline.
It's in interest rates as the majority of our loans are structured with LIBOR floors as demonstrated on slide 10 of the presentation.
And our portfolio is well positioned for when interest rates rise.
As we analyze new investment opportunities, we continue to emphasize seniority industry diversity and transactions, where we lead our co lead negotiations on deal terms.
Our investment activity in the second quarter to date has included incremental financing to existing portfolio companies and a modest amount of draws on unfunded commitments turning to the dividend our board declared a second quarter dividend of 36 cents per share payable on June 30 to shareholders of record on June 16.
We understand the importance of maintaining a consistent dividend that is achievable based on the long term earnings power of the company.
As part of the evaluation of our dividend policy, we are in continuous dialogue with our board regarding the current environment and the impacts on our portfolio, including changes in interest rates, the potential for realized and unrealized gains or losses and loan performance.
Now I will turn the call over to Paul who will discuss our financial results in more detail Paul Thanks, Howard and Hello, everyone.
Starting on slide 15, net investment income for the first quarter was 38 cents per share exceeding our dividend of 36 cents per share.
On a cumulative basis without earned our dividends by an aggregate $45 million for 78 cents per share.
Based on total shares outstanding at quarter end.
Investment income for the first quarter was 70 cents per share substantially all of which was interest income.
This included recurring cash interest of 61 cents.
Recurring discount and fee amortization of four cents.
And pick income of four cents.
We had a modest amount of prepayments in the quarter that contributed a penny per share, including both prepayment fees and unamortized, though I'd.
Investment income in the first quarter also included a penny from dividend income.
Our income recognition follows our conservative policy of generally amortizing upfront economics over the life of an investment.
Rather than recognizing all of it at the time investment has made.
Operating expenses for the first quarter were 33 cents per share and included interest and other debt expenses of 19 cents per share for net investment income of 38 cents per share.
We did not accrue any incentive fees in the first quarter as the reduction in asset valuations produced our total return below our cumulative hurdle.
Our net decrease in net assets for the quarter was $69.5 million or one dollar and 18 cents per share.
Driven by spread widening and volatility across our portfolio related to the market impact of covered 19.
As we've done consistently substantially all investments are priced using marks provided by third party sources every quarter, including repeatable quotation services and best in class independent valuation services and our process is subject to rigorous oversight, including back testing of every disposition against our valuations.
Despite the markdowns our portfolio continued to perform well and we had no new loans on non accrual during the quarter.
Our loans two portfolio companies Agee, why and Avanti remained a non accrual and together represented 0.2% of the portfolio at fair value and 0.8% at cost.
Turning back to slide eight we had total liquidity of $263 million at quarter end.
This included available leverage of $259 million.
Cash of $9 million and pending settlements of $4 million.
In contrast, our investments in unfunded credit facilities and delayed turret delayed draw term loans to portfolio companies total just $53 million at quarter end or 3% of total investments.
Our seasoned team has managed loan portfolios for two decades, including through the downturn of 911, and the global financial crisis of 2008.
Providing us with significant experience managing the funds capital and liquidity.
Drawing from that experience, we have continued to increase the diversity and flexibility of our financing sources over the years.
Which as of March 30, Onest included too low cost credit facilities.
One convertible note issuance to straight unsecured note issuances and it SPD program.
Given the modest size of each of these issuances.
We're not overly reliant on any single source of financing.
And our debt issuances are well laddered with no near term maturities.
Our nearest maturity is March of 2022 and represented just 14% of outstanding liabilities.
In April we successfully extended our SBC piece, that's BCP credit facility to May 2024.
Maintaining both the size of the facility and our attractive rate of LIBOR, plus 200 basis points.
Combined our outstanding liabilities had a weighted average interest rate of 3.73%.
Which was down from 3.84% at the end of 2019.
We're also pleased to note that both Moody's and Fitch reaffirmed our investment grade ratings in April.
Net regulatory leverage which is net of FDIC debt cash and outstanding trades was 1.22 times common equity as of March 30, Onest well within our two to one expense to one leverage limitation.
Given the significant volatility in our share price at the end of the first quarter, we opportunist opportunistically repurchased 1 million shares or 1.7% of shares outstanding at an average purchase price of $6 in 10 cents.
Resulting in the NAV contribution of nine cents per share.
I'll now turn the call back over to Howard.
Thanks, Paul I'll conclude with a few additional comments in the market environment and our outlook before opening the call the questions.
These are unprecedented times for everyone. When we mentioned the risks associated with the Corona virus as one of the several potential disruptions on our last quarterly earnings call Im not sure anyone fully appreciated the impact of pandemic would have on the global economy.
We do not have certainty about what the remainder of 2020 will look like but the global pandemic is likely to continue to challenge many business models.
Given most sectors and companies are being impacted directly or indirectly our portfolio will not be immune to these challenges. However, our entire team is working every day alongside our borrowers just as we did during prior financial crises to help ensure the long term health of our portfolio companies, while preserving capital.
For our shareholders.
In some cases this may include providing temporary flexibility and credit terms for certain borrowers.
We seek to invest in good companies with strong management teams and these companies collectively employed thousands of individuals and provide necessary goods and services for their customers. We're focused on helping these businesses manage through this period of dislocation and emerge as strong as they were going into the crisis.
Before opening up the called your questions a comment on our annual shareholder meeting scheduled for May 27.
Consistent with prior years and in line with many of our BDC peers. We have included in our proxy a proposal for shareholder approval to issue up to 25% of our common shares on any given date over the next 12 months at a price below net asset value.
The purpose of the below an AB issuance proposal in our proxy is to provide flexibility.
This is essentially an insurance policy, which would provide access to capital markets during periods when access would otherwise be limited.
Our shareholders have approved this proposal every year since we went public and our board has recommended the shareholders do so again this year.
In closing while these are challenging times for everyone. Our entire team is focused on ensuring the wellbeing of our constituents and we remain focused on generating strong risk adjusted returns for shareholders and with that operator. Please open the call for questions.
Thank you.
Your second question you need to press Star one of your telephone will enjoy your question, perhaps the pelkey.
Hey, Sunbelt composite Sony roster.
Our first question comes from Finian O'shea with Wells Fargo. Your line is open.
Hi, Good morning, everyone. Thanks for having me on and I hope all as well.
Forgive me I don't think I've ever got first question on PCP, So im a bit blindsided.
So in general.
[laughter].
I just want to start on the.
Not retail, but textile and apparel book I think these are our cash flow loans correct me if I'm wrong there.
I understand it's the manufacturing the product and not the retailing.
They've still nonetheless held up pretty well, obviously, a challenging environment for retail I think the exception is an klein with mark down to 95.
So.
I guess first how disease hold up so well in this environment that second.
Within client what's the difference there how does that won't get mark down any context, you can provide on sort of what happened.
Fin thanks for joining us today and for your question textiles apparel and luxury grow goods is a broad category developed by S&P as I think you know we use S&P categorizations for our industries.
Each one of these companies in the year is engaged in selling retail consumer products.
They all have a commonality and that they are not just ordinary retail stores. They are secured by assets and for the intellectual property licensing streams. So in the case of and Cline, It's a very well capitalized strongly backed.
Strong management team that is the license or various international brands that are sold multichannel internet through stores.
Around the globe and so as we think about how we've been underwriting the sector really going back now for about a dozen years we've been involved.
In retail and consumer for over two decades, but coming out of the last financial crisis as we saw the evolution and pressure on bricks and mortar we focused on hard asset coverage liquidation values and or licensing streams for each one of our investments in this sector and so the fact.
That is marked a little bit differently is a function of several things that we use all third party marks we've done this for two decades. They determined the marks every quarter and they do it off of a series of things spreads Comparables.
LIBOR floors maturity.
And also a comparable assessment so theres a series of things that go into the valuation of that instrument that may be distinct from some of the others, including the yield to maturity.
That's very helpful. Thank you I'll just I'll do a follow on on on the third party marks are you mentioned a few times that you value 100% of your book Third Party marks.
This is high level and not aimed at TCP individually, but across the space, we're getting a lot of questions on all these calls about valuation.
Theres a challenge because there are liking financials.
But we can also skew many industries.
These companies are clearly going to face pressure.
And if the valuation doesn't incorporate that more or less is it really worth shareholders' money.
To pay for value in the book, 100% every quarter.
The fin that's a great question. Appreciate this is Paul.
Our.
Valuation processes is rigorous we.
Look to third party sources as you noted for.
For every name.
What does the important thing to note about valuations is that valuations are forward looking as the markets or pricing in securities as we look at.
Re underwriting analyses and places where where.
Investments are trading in places where investments are being issued.
We're relying on markets to too.
Price in their expectations of future performance and so.
We believe that to be very important as we're looking at the prices of.
Of assets I would also note that in addition to look using third party pricing sources for for substantially everyday and we we rigorously test.
All of our assets on a on a on an asset basis on the back testing basis, we did so through the through the downturn of of 20 await.
We've done so historically and found our valuation process to be to be very accurate and.
And I'm very proud of the sources we use.
Hi, Thank you for the color Thats all for me.
Thank you Ben.
Thank you. Our next question comes from Robert Dodd with Raymond James Your line is open.
Hi, guys.
Hopefully antibodies well.
Just.
One follow up.
The question on the.
The underlying asset values, obviously, not just textile events.
Value add lines, where you've got plays and engines.
Obviously as you said.
I mean this is an unprecedented to the number of planes for example that Paul.
Is it.
Substantially.
Thanks.
How much.
The collateral spin.
Me value so to speak in a mall.
Potentially.
Some of those end markets could could be.
Flooded with similar assets over the next.
Six to 12 months, maybe not so much on defense side, but on the line side, but also I mean this is the environment has the inbound put ahead on how much.
Collateralization you think you have in some of these assets back excellence.
Yeah. So Robert Thank you for the question, it's an excellent on one.
And I think the.
Airline business in particular is getting a lot of scrutiny.
From those of US who used to fly frequently.
All of us to our tax payers, who are now paying too.
Fund the industry and as we think about what what's what's going to happen with that.
We'll address specifically the two primary investments we have in this area, which is.
One sky, which is the second largest provider.
Of private jet services in the country, we've invested in the company since 2013 to very well run.
They have significant liquidity.
We believe our loans are over collateralized.
We would note that private jet volumes.
There are actually going back up as more people are flying private and they also have payment streams that are distinct and that they have a fractional owners.
Who pay them on these planes. So as you think about that business I think it's distinct from maybe wondering whether.
These large double.
Slide.
Hi, all planes are going to be in the error or not.
Our other primary investment in the sector Mesa company, we financed since 2014 its current on their debt in amortization, they've gotten money from the government.
Their minimum service obligations from their Counterparties, we think we are.
Well situated in that our planes are lower dollar volume values and their own not least so they're more likely to keep them.
Having said all of that we know that it's in the industry, that's going through a tremendous amount of change in turmoil.
But we are comfortable with these valuations.
As of now.
Got it kind of appreciate that color. Thanks, you have on another one.
Your final depend much.
Just could be temporarily chain changes to come to terms with somebody I mean.
We see everybody was.
Todd.
Can you give us any color.
What you've seen so far I mean, obviously I would expect amendment activity et cetera, et cetera to be up in Q2.
Six week seen so can you give us any color loan on.
What the approaches have been how the discussions and go on.
Now how sponsors is stepping up any color on that.
Yeah.
Yes, Rob rates Raj I'll try to take that one and others can add honest as appropriate but it's a it's.
It's across the board I mean, it's a pretty wide gamut of of request and I think the general sense. If theres two things I would say one is operating philosophy for us as our credit and the protection of it it's a value and its coverage.
As you know the northern guiding light that is ultimately what were most focused on protecting our downside and our returns.
In terms of where we sit in the capital structure and what we're entitled to buy contract and by seniority.
With that in this environment, which is unprecedented as I think everyone is would agree with it really for US is about the defensibility of the portfolio by composition and.
At an asset by asset level and the ongoing.
The ongoing viability and positioning of the businesses and that translates to balance sheet strength liquidity and ability to withstand whatever length of downturn we're facing.
To the extent people are coming to us for requests and that has happened.
We first look to how does that request impact our position and what is that request due for the ability for the business to extend its its.
Its own position in the market.
That has involved.
As you said additional equity from sponsors and that is obviously have huge value in this environment. It has in certain cases, where we don't feel.
It's putting us at further risk some relief whether its.
A little bit up covenant relief, and maybe tie to a sale of an asset and the use of proceeds.
And so on and so forth and they vary from very benign things that we don't feel.
At all.
Impair us or compromise that in fact, it probably enhances the overall enterprise value two things, where we normally wouldn't do it without additional skin in the game from people so they're essentially buying their relief.
And as this as the downturn extends and the nature of those change or or increase or the severity of that increase.
Obviously, we will always revert back to how does it impact us in our capital, which is our primary focus and what is it do for the overall position on the business and to the extent its enhancing at.
The uncertainty continues we will be constructive because enhancing the value the business and the preservation of it is in our own interest as well.
I appreciate it. Thank you for that that comment that I mean, one last one if I can.
Again kind of.
Prepared remarks on the dividend congrats on maintaining the dividend.
June just want to.
Yes.
Outpatient valley, but.
How would you said that you believe that's achievable.
To be clear and obviously is the fourth decision that things are changing massively.
But that given you.
You are going to pay in June right now before then.
Bob.
Folio that would be expected to be sustainable long term than its June and as we can you talk to the and again later.
Asset.
The board is continuing to analyze the environment.
The earnings.
Portfolio companies and the interest rate environment.
As we noted at the beginning of the call Theres been a dramatic change in LIBOR or over the last five quarters.
It has decreased.
The net investment income on a run rate basis TCPC by eight cents a share weve out earned our dividend historically and we've had prepayment fees, which were also much lower than normal this past quarter in Q1.
But this is something that the board is looking at in terms of its sustainability and that will go not only although there's not much further of LIBOR can go down and as we show I think very clearly in the slide deck, we don't have much more downward exposure there.
We're also looking at our portfolio companies and the appropriate amount of assets to have in a volatile period in our books and what may happen with those those companies. So each quarter, we're going to be assessing what is the appropriate dividend going forward.
Got it thank you.
That's it for me thanks.
Thank you. Our next question comes from Ron Mills with KBW. Your line is open.
Yes.
Hey, good morning, Thanks for taking my questions and hope you all are doing well.
First one I just want to hit on wise.
Obviously leverage ticked higher for for you guys and most bdcs, but because of your.
Diversified liability structure with a lot of unsecured debt.
Actually have fair amount of additional liquidity. So can you just kind of from a high level through how you guys are thinking about.
Allocation of capital in these times you can obviously retain it given the uncertainty that we have going on in this environment.
14 on your balance sheet and hold it tend to see what what occurs over the next coming months in quarters.
Could invest in your existing companies you guys get some share repurchases make new investment is how are you guys thinking about the roughly you guys current currently hold on your balance sheet today.
Yep. Thanks to the question I Hope you are well as well, it's Roger I'll try to take that one.
So I would say overall in any market certainly the current one liquidity is scarce capital resource and we want to be very judicious with it.
In the first wave of assessing the impact of the crisis.
We were really focused on making sure we had liquidity, making sure we understood everything into portfolio in the current environment, we literally re underwrote the portfolio and that included where and when we would.
Need additional liquidity to protect their assets in the ground if you will.
Fortunately the way, we I think how you are able to operate through a crisis is effectively driven by how you've underwritten before it and Fortunately our approach of staying very defensive by capital structure.
And by industry I think left us in.
In a position aware.
We were relatively in decent shape that took that ties to the dividend stability for this quarter and also.
Understanding that we can be and our open for business with our liquidity. So there is an amount that we thought would be needed to defend the portfolio. We realize we have sufficient amount given the health of the portfolio to be looking at new investments and in the in the current environment in any environment, but in the new and current environment for us those.
Investments are going to be very very.
But to be very judicious with the capital, we have and making sure that as we extend through this downturn, we don't compromise that liquidity of the of the.
The company either to protect that existing portfolio and ongoing basis, but also to be opened for business and to be.
Maintained at maintaining our position as it reliable funding counterparty for folks in the market, which we think has a value.
That shows up in premium pricing and structures. So we are looking for new opportunities I don't expect that will be.
Going at the pace it just because we know morphing the environment the market environment itself.
That you've seen in some of the other quarters, but we do expect to be deploying and we've done so through this early part of this quarter.
But it is a combination of playing defense and playing offense and Fortunately we are positioned to keep doing that even with the severity of the crisis we've seen.
Okay that makes sense.
I wanted to.
My next question I, just have was on the at the incentive fees.
The total return hurdle kicked in and eliminated the sentence incentive fee payment.
In Q1, I'm just curious.
Assuming that there's no.
The board negative fair value marks your portfolio.
In the second or third quarters can you just give an outlook do you expect to earn a full partial or no incentive fee in the upcoming quarters based on kind of how that total return hurdle kicking in.
Yes, great Great question. This is Paul.
We did fall below.
The quarter, we're not very far below it so lot of that does depend on on one where valuations come out.
Hard to say.
What happens going forward it depends on valuations as as you noted. This is a total return hurdle looks back cumulatively includes the entire perform to the fund for pleased we've we've been able to exceed it. So far we're pleased also that even with the downturn, we're not that far below it but.
I think it's kind of hard to say were going forward.
Again, it depends really on on one asset values going forward.
Okay fair enough.
Those are all my questions I appreciate the time today.
Thank you. Thank you Ryan.
Thank you. Our next question comes from George bottom line.
Thank you Melissa.
Hi, Good morning, everyone and thanks for taking my question. This morning, I had a follow up on the part question.
And your response, you mentioned that you've received requests across the board someone more benign others.
Can you.
Quantify.
Maybe the percentage.
Loans that may be.
Had asked or requested some form of the belief that isn't necessarily benign and maybe a bit more involved so we get a sense for.
Maybe some some companies I'm sure, having more issues and others today.
Yeah, George Thanks for the question, let me clarify my comment Mike My quote unquote across the board.
Phrase wasn't to be to be interpreted as a quantifying a large percentage of our request. It was the nature of the request themselves. So we did not receive a large amount relative to that.
The number of companies in the portfolio and we're not we don't quantify that I was more responded the question of the tight that have come in and I would I would say none of them had been really severe they just been buried in type. So it's generally speaking.
The portfolio is very healthy companies are.
Given the nature of indices were end.
Having very good predictability in their businesses, but I would just clarify that it wasn't to be interpreted as.
A high percentage of request.
I see so not a great. Thank you for for clarifying that.
So no wait for us to quantify what went.
Amounted borrowings me about for some form released today.
Good.
I don't think we disclosed that.
Let me.
Yeah, I don't think we disclosed but it's a it's as I would not it's a small percentage.
Thanks for any additional color.
Morning.
Thank you once ventilation when it seems that at this time.
One.
Next question comes from Chris.
Hi, Matt Your line is open.
Yes, good morning. Thanks.
Most of mine were asked but just on the.
Sentence. The can you you didnt.
We are trying to calculate it out it how much you'd need to catch up to be eligible to earn it again, okay can you phrase it in terms of how how much NAV would have to increase before you cross the hurdle.
[music].
Good question. This is Paul Fortunately not much we dipped below it here in the first quarter, we can earn that back through a combination of.
Of NAV increases and and net investment income.
It's really not that far but.
Again.
We'll see how Q2, how it goes out and weather and whether whether its earned in the second quarter.
Okay, and then on the share repurchases.
Refresh my memory and you have an outstanding authorization that how much is left on that and.
Obviously.
Purchases in the Sixs were good.
And.
Is there a.
Yes, Hi, how do you look at that versions.
Yes.
10 capital investing and and.
And how price sensitive are you there.
Okay. So Chris it's Howard Thanks for the question historically, our share repurchases have functioned as.
As you note under a $50 million program on an algorithm whereby just happen automatically at certain levels.
Given the.
Unprecedented disruption in the market.
Early on we were able to cool that program and actively go into the market when stocks sold off so significantly.
Mid and end of March.
And so.
Well it was a we thought a unique opportunity to be able to create shareholder value.
It's something we've had in place for many years clearly the environment. We're in is unusual.
And so we're also thinking very carefully about.
Containing the strong balance sheet that we have.
And how we use our capital going forward the program does exist.
We will perhaps we don't have a disclosure out there, but we will consider on our next call may or may be giving you a number of how much we've spent on the program in aggregate.
Okay.
Alright Thats it from me thank you.
Thank you.
Thank you. Our next question comes from Christopher Nolan with Ladenburg Thalmann. Your line is open.
Hey.
I apologize I joined the call Lee.
Your aircraft airline exposure given the difficulties as that market.
I mean.
What are your thoughts in terms of the trajectory of yours.
Credit exposure there.
Chris Thanks for the question, we actually had a detailed question and answer on that one and so it might be more appropriate for others, if you'd like to just follow up with you offline on what we said to others previously on that so that we don't repeat what we've said earlier in the call.
We addressed our major positions in there.
Happy to take any additional questions that you have no. That's it for me Howard. Thank you for taking my question.
Okay. Thank you.
Thank you Adam comes on no further questions at this time on some call back over to help with muscles.
Thank you for joining us today, we appreciate your questions in our dialogue.
I'd like to thank our.
Confidence and your continued support and our experienced and talented team of professionals at Blackrock TCP Capital Corp. For your continued hard work and education in this challenging times.
We hope that everybody is healthy and safe.
Thanks again for joining us this concludes todays call.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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