Portman Ridge Finance Corporation Announces First Quarter 2021 Financial Results; Declares Quarterly Distribution of $0.06 Per Share
First Quarter 2021 Highlights
- Net investment income for the quarter was
$0.11per share, or $8.2 million.
- Net asset value (“NAV”) per share increased 1.4% to
$2.92per share from $2.88per share quarter-to-quarter, reflecting the continuation of general economic improvement and the overall yield tightening environment.
- The fair value of the Company’s investments including derivatives totaled
$473 million, of which the Company’s debt securities portfolio totaled $387 millionand was comprised of investments in 103 portfolio companies. Investments on non-accrual status were 0.7% and 2.3% of the Company’s investment portfolio at fair value and amortized cost, respectively, compared to 0.8% and 2.4% as of December 31, 2020.
- During the first quarter, the Company acquired approximately
$50 millionpar value of investment portfolio assets. Also, during the quarter, the Company received approximately $68 millionin sale and repayment proceeds, which includes a $0.8 millionincrease relative to the carrying value of those assets sold. Of this activity, $30.3 millionwas the result of proactive sales (inclusive of a $0.2 millionincrease relative to carrying value).
- Net leverage(1) was 1.1x as of
March 31, 2021, down from 1.4x as of December 31, 2020, driven primarily by the repayment of $88.0 millionof 2018-2 Secured Notes due 2029 during the quarter.
March 8, 2021, the Company received a corporate investment grade rating of BBB- with a stable outlook from Egan-Jones.
- The quarterly distribution for the first quarter was
$0.06per share and was paid on March 2, 2021.
March 11, 2021, the Board approved a $10 millionstock repurchase program with substantially the same terms as the prior program, which expired on March 5, 2021. The new program expires on March 31, 2022.
- Subsequent to quarter-end, on
April 30, 2021, the Company issued $80 millionin aggregate principal amount of 4.875% senior unsecured notes due 2026 (the “Notes”) in a private placement offering. Also on April 30, 2021, the Company notified the trustee for the 6.125% unsecured notes due 2022 of its election to redeem in full the aggregate amount outstanding of $76.7 million. The Company expects the redemption to be completed on May 30, 2021.
- Subsequent to quarter-end, on
May 6, 2021, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain affiliates of the Company’s investment adviser for the sale of 1,381,305 shares of the Company’s common stock at the net asset value per share of the Company’s common stock. These sales are being made in accordance with the terms of the agreement that the Company entered into in connection with its externalization in 2019, which require the Company’s investment adviser and/or its affiliates to use up to $10 millionof the incentive fee actually paid by the Company to the investment adviser prior to the second anniversary of the closing of the externalization transaction to buy newly issued shares of the Company’s common stock at the net asset value per share of the common stock.
“Through the substantial rotation of the portfolio that we executed over the past two quarters, our overall portfolio performance continues to perform well. We are focused on senior secured loans, primarily first lien, and these loans now comprise 83% of our debt securities portfolio and our goal is to continue to increase these loans as an overall percentage of our portfolio,” added Goldthorpe.
“Finally, we remain very excited about our previously announced merger with
Selected Financial Highlights (unaudited)
|Three Months Ended||Three Months Ended||Three Months Ended|
|(in $ millions, except per share data)||
|Interest from investments in debt securities||$||15.2||$||16.4||$||4.9|
|Investment income on
|Investment income - Joint Ventures||2.0||2.2||1.6|
|Capital structuring service fees||0.4||0.6||0.1|
|Total investment income||18.3||19.9||7.8|
|Net Investment Income||$||8.2||$||8.9||$||2.7|
|Net realized and unrealized gains||1.6||40.1||(31.9||)|
|Realized losses on debt extinguishment||(1.8||)||—||0.2|
|Net increase in net assets resulting from operations||$||8.0||$||49.0||$||(29.0||)|
|Net increase in net assets resulting from operations per share (basic and diluted)||$||0.11||$||0.74||$||(0.65||)|
|Net investment income per share (basic and diluted)||$||0.11||$||0.14||$||0.06|
|Weighted average shares outstanding (in millions)||75.2||66.0||44.8|
|Distribution per share||$||0.06||$||0.06||$||0.06|
Total investment income for the three months ended
Total expenses for the three months ended
Net investment income for the three months ended
Net realized and unrealized appreciation on investments for the three months ended
Earnings per share for the three months ended
Portfolio and Investment Activity
The fair value of our portfolio was
|Senior Secured Loan||302,205,721||322,362,553||68||304,539,184||328,845,612||68|
|Junior Secured Loan||74,733,439||64,639,644||14||87,977,057||75,807,477||16|
|Senior Unsecured Bond||416,170||41,792||0||416,170||207,766||0|
|Asset Manager Affiliates2||17,791,230||—||—||17,791,230||—||—|
¹ Represents percentage of total portfolio at fair value.
² Represents the equity investment in the Asset Manager Affiliates.
Liquidity and Capital Resources
The Company’s asset coverage ratio stood at 170% as of
Stock Repurchase Program
Conference Call and Webcast
We will hold a conference call on
To access the call please dial (866) 757-5630 approximately 10 minutes prior to the start of the conference call. A replay of the conference call will be available from
A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on our Company’s website www.portmanridge.com in the Investor Relations section under Events and Presentations. The webcast can also be accessed by clicking the following link: Portman Ridge First Quarter 2021 Conference Call. The online archive of the webcast will be available on the Company’s website shortly after the call.
Portman Ridge’s filings with the
BC Partners Credit was launched in
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements. The matters discussed in this press release, as well as in future oral and written statements by management of
Forward-looking statements relate to future events or our future financial performance and include, but are not limited to, projected financial performance, expected development of the business, plans and expectations about future investments and the future liquidity of the Company. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “outlook”, “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements.
Important assumptions include our ability to originate new investments, and achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation that such plans, estimates, expectations or objectives will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) uncertainty of the expected financial performance of the Company; (2) expected synergies and savings associated with the transaction in which
(1) Net leverage is calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and cash equivalents, and restricted cash and (B) NAV.
CONSOLIDATED BALANCE SHEETS
|Investments at fair value:|
|Debt securities (amortized cost: 2021 -
|Equity securities (cost: 2021 -
|Asset Manager Affiliates (cost: 2021 -
|Joint Ventures (cost: 2021 -
|Total Investments at Fair Value, excluding derivatives (cost: 2021 -
|Cash and cash equivalents||30,843,590||6,990,008|
|Receivable for unsettled trades||14,142,812||25,107,598|
|Due from affiliates||853,420||357,168|
|6.125% Notes Due 2022 (net of offering costs of: 2021-$0; 2020 -
|2018-2 Secured Notes (net of discount of: 2021-$1,535,573; 2020 -
|Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of offering costs of: 2021-$1,006,335; 2020 -
|Derivative liabilities, net (cost: 2021 -
|Payable for unsettled trades||13,881,059||—|
|Accounts payable and accrued expenses||2,409,861||1,788,908|
|Accrued interest payable||1,146,732||1,089,531|
|Due to affiliates||2,372,115||1,374,739|
|Management and incentive fees payable||4,464,644||5,243,869|
|COMMITMENTS AND CONTINGENCIES|
|Common stock, par value
|Capital in excess of par value||638,523,223||638,459,548|
|Total distributable (loss) earnings||(419,420,066||)||(422,947,327||)|
|Total Stockholders’ Equity||219,855,108||216,263,863|
|Total Liabilities and Stockholders’ Equity||$||552,830,145||$||600,178,421|
|NET ASSET VALUE PER COMMON SHARE||$||2.92||$||2.88|
|For the Three Months
|Interest from investments in debt securities||$||14,086,475||$||4,579,782|
|Payment-in-kind investment income||1,131,598||309,369|
|Interest from short-term investments||—||15,279|
|Investment income on
|Investment income on
|Investment income - Joint Ventures||2,039,266||1,577,136|
|Capital structuring service fees||429,968||81,904|
|Total investment income||18,304,563||7,754,207|
|Performance-based incentive fees||2,093,619||102,006|
|Interest and amortization of debt issuance costs||3,380,497||2,350,071|
|Administrative services expense||613,372||461,000|
|Other general and administrative expenses||540,412||198,276|
|Management and performance-based incentive fees waived||—||(102,006||)|
|Net Investment Income||8,212,517||2,765,790|
|Realized And Unrealized Gains (Losses) On Investments:|
|Net realized (losses) gains from investment transactions||(5,085,788||)||(1,048,147||)|
|Net change in unrealized appreciation (depreciation) on:|
|Joint Venture Investments||1,208,285||(8,109,197||)|
|Total net change in unrealized appreciation (depreciation)||6,745,349||(30,924,682||)|
|Net realized and unrealized appreciation (depreciation) on investments||1,659,561||(31,972,829||)|
|Realized (losses) gains on extinguishments of Debt||(1,834,963||)||154,106|
|Net Increase (Decrease) In Stockholders’ Equity Resulting From Operations||$||8,037,115||$||(29,052,933||)|
|Net Increase (Decrease) In Stockholders’ Equity Resulting from Operations per Common Share:|
|Net Investment Income Per Common Share:|
|Weighted Average Shares of Common Stock Outstanding—Basic||75,174,533||44,823,193|
|Weighted Average Shares of Common Stock Outstanding—Diluted||75,174,533||44,823,193|
Source: Portman Ridge Finance Corporation