UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 14, 2007
Kohlberg Capital
(Exact name of registrant as specified in its charter)
Delaware |
814-00735 |
20-5951150 |
||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
295 MADISON AVENUE NEW YORK, NY |
10017 |
|||
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (212) 455-8300
________________________________________________________________________________
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 7.01 Regulation FD Disclosure
On May 15, 2007, Kohlberg Capital Corporation (the "Company") expects to attend an investor conference at which the Company will make a presentation containing the information that is furnished herewith as Exhibit 99.1 (the "Presentation Materials").
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are furnished with this Current Report on Form 8-K.
99.1 Presentation Materials to be presented at conferences and Analyst Meetings.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Kohlberg Capital
(Registrant) |
||
| May 14, 2007
(Date) |
/s/ MICHAEL I. WIRTH
Michael I. Wirth Chief Financial Officer |
| Exhibit Index | ||
| 99.1 | Presentation Materials to be presented at conferences and Analyst Meetings. | |
KOHLBERG
CAPITAL CORPORATION
CAPITAL CORPORATION
May
2007
Forward
Looking Information
This
presentation may include forward-looking statements. These forward-looking
statements include comments with respect to our objectives and strategies,
and
the
results of our operations and our business.
results of our operations and our business.
However,
by their nature, these forward-looking statements involve numerous
assumptions,
uncertainties and opportunities, both general and specific. The risk
exists that
these statements may not be fulfilled. We caution readers of this
presentation
not to place undue reliance on these forward-looking statements as
a number of
factors could cause future company results to differ materially from
these
statements.
Forward-looking
statements may be influenced in particular by factors such as fluctuations
in
interest rates and stock indices, the effects of competition in the
areas in
which we operate, and changes in economic, political, regulatory
and
technological conditions. We caution that the foregoing list is not
exhaustive.
When
relying on forward-looking statements to make decisions, investors
should
carefully consider the aforementioned factors as well as other uncertainties
and
events.
Safe
Harbor Statement – Private Securities Litigation Reform Act of
1995
Company
Overview
Chris
Lacovara
Chairman,
Kohlberg Capital
Co-Managing
Partner, Kohlberg & Co.
w
Internally
managed structure
w
Inclusion
of Katonah asset management business
w
Affiliation
with Kohlberg & Co.
w
Currently
$218M of first lien / second lien / mezzanine and equity
w
Average
yield of Libor + 4.2%
w
CDO
investments of $24M with an average yield of 14%
w
100%
ownership of profitable Katonah asset management business
w
Q1
dividend
at 7.7% (on IPO price); Q4 run-rate > 10%
w
No
external
management fees
w
20%
insider
ownership including Kohlberg & Co. principals
w
Compelling
middle market opportunity
w
Multi-channel
origination capabilities
w
Disciplined
investment process with seasoned credit professionals
w
Seasoned
management team with average industry tenure of 20+ years
w
Kohlberg
& Co. participation on the Board and Investment Committee
Alignment
of Interests
Dynamic
Business
Model
Attractive
Portfolio
Highly
Experienced
Management
Team
Innovative
Strategy and
Platform
Overview
–
Investment Highlights
Middle
Market Investments
w
Acquisition
of $185M
portfolio
for cash
w
Average
yield: 8.5% to 9.5%
Internally
managed - management, originations and credit staff
are
employed
by the BDC or its wholly owned portfolio company,
KDA
Kohlberg
Capital
NASDAQ
“KCAP”
CDO
Equity Investments
w
Initially
acquired for stock
w
Approximate
yield: 14.0%
Katonah
Debt Advisors
w
Initially
acquired for stock
w
Current
annual cash flow
stream:
$6 million
Current
Valuation
($
millions)
$218
$24
$47
$289
IPO
Shares
14,462,000
1,258,000
2,226,333
Issued
To
Public
Issued
To
Kohlberg
Affiliates
17,943,333
Overview
–
Business Model
Kohlberg
Capital’s debt and equity investments generate cash
flow
and
increasing dividends to shareholders
Fully
Ramped Asset Mix
ROA
% 6%
ROE
% 11%
Dividend
Yield 10%
Overview
–
Business Model
Overlap
between targeted assets of BDC and Katonah allows BDC
to
use
its
30% allocation creatively outside of the middle market, minimizing
cash
Kohlberg
Capital
Middle
Market
w
70%
middle
market
assets
w
Diversification
requirements
w
1st Lien
Loans
w
2nd Lien
Loans
w
Mezzanine
w
Private
Equity
Katonah
Debt
Advisors
Large
Market Cap
w
CDOs
(leveraged
funds)
w
Broadly
Syndicated
Loans
w
High
Yield
Bonds
w
Management
Fee
Income
“30%
Bucket”
w
Broadly
Syndicated 1st
and
2nd Lien Loans
w
High
Yield
Bonds
w
CDO
Mezzanine and
Equity
Origination
and credit resources common to both
Overview
–
Strategy and Platform
Katonah
Debt Advisors
“KDA”
w
100%
Owned Asset
Management
Company
w
Currently
$1.7B AUM
w
Current
run rate income $6M
w
$1B
additional AUM during
2007
w
Dividends
from Katonah
operating
income
w
Capital
appreciation on
value
of
its 100%
ownership as assets under
management increase
ownership as assets under
management increase
A
publicly traded BDC with a wholly owned asset management
company
w
$33M
for
100% ownership
of
KDA;
current value
$47M
$47M
w
$24M
CDO
mezzanine with
14%
expected return
KCAP
Invested
KCAP
Receives
Kohlberg
Capital
“KCAP”
w
Publicly
Traded BDC
w
Middle
Market Lending
and
Investing
Overview
–
Strategy and Platform
As
Katonah grows AUM, KCAP shareholders will
benefit
Assets
Under Management ($ in millions)
$1,200
$1,700
$2,500
$3
$6
$9
NA
$7
$10
NA
$8
$11
$33
$47
$69
$36
$51
$75
$39
$55
$81
Distributable
Cash
Theoretical
Value
of
Katonah
Overview
–
Strategy and Platform
Growth
in
KDA’s AUM will result in an
increasing
dividend yield and an increase in Katonah’s underlying
value
Dynamic
Business Model
Dayl
Pearson
Chief
Executive Officer
Dynamic
business model generates strong asset and dividend
growth
while
responsibly managing credit risk
Dynamic
Business Model
w
Focus
on
middle market transaction-driven lending with large transaction
volume
w
Pursue
a
highly selective and diversified asset accumulation strategy
w
Utilize
extensive sourcing capabilities of experienced management team,
Kohlberg
& Co. middle market franchise and Katonah staff
w
Employ
disciplined investment process with a 20-year track record
of
success
w
Generate
attractive near-term dividends based on existing portfolio
w
Enhance
dividend over time with additional higher return assets, leverage,
and
lean
expense structure
Agriculture
Electronics
Utilities
Real
Estate
Healthcare
Aerospace
/
Defense
Cargo
Transport
Education
Finance
Insurance
Packaging
Manufacturing
Automotive
Non-Durable
Consumer
Food
&
Beverage
A
portfolio of assets with attractive yields in a diverse group of
Industries
Current
Middle Market Loans and Equities and Ongoing Diversification
Strategy
w
Balance
at
3/31/07:≈ $218M
w
No.
of
Issues:64 +
w
Average
Deal Size:≈ $3.8M
w
Average
Interest Rate:Libor + ≈ 4.2%
A
focus on
growing and maintaining a highly diversified portfolio of middle
market
assets
Dynamic
Business Model
Industries
Include:
Leverage
extensive proprietary relationships to source high quality
assets
Kohlberg
& Co.
Equity
Co-Investments and
Mezzanine
Wall
Street
Syndicated
Middle Market
and
2nd
Lien Loans
Regional
Banks
(15
Relationships)
Non
Sponsored Middle
Market
Loans
KDA
Broadly
Syndicated
Loans,
2nd
Lien loans,
Bond, CDO Equity
Bond, CDO Equity
“Club”
Lenders
(7+
Relationships)
Middle
Market
Sponsored
Loans and
Mezzanine
Mezzanine
Private
Equity Firms
(50+
Relationships)
Middle
Market
Sponsored
Loans
and Mezzanine
and Mezzanine
Kohlberg
Capital
Dynamic
Business Model
Our
middle market credit risk rating system enhances
investment
decisions
and portfolio management process
Risk
Rating System
Dynamic
Business Model
w
Key
tool
of credit and portfolio
management
w
Based
upon
comparative analysis of
key
factors
-
Financial
strength / cash flow
generation
-
Industry
assessment / economic
drivers
/
competitors
-
Management
/ Sponsor
w
Should
track closely to Moody’s
and
S&P
w
Approved
by investment committee
w
Key
monitoring metric
The
existing investment portfolio originated by KDA management
supports
supports
an
attractive near-term dividend yield and future growth in dividend
yield
Initial
Asset Mix at IPO
Fully
Ramped
Asset
Mix as of 3/31/07
Unleveraged
Gross
Yield
on Interest
Paying
Investments
on Interest
Paying
Investments
L+465
L+400
L+525
Dynamic
Business Model
w
Portfolio
includes more than 64 companies across 24 different
industries
w
As
existing
assets mature, Kohlberg will redeploy its capital into higher yielding
assets
Financial
Summary
Mike
Wirth
Chief
Financial Officer
|
Total
Assets
|
$299.3
|
|||||
|
GAAP
Net Income
|
$13.9
|
|||||
|
Unrealized
Gains
|
$8.6
|
|||||
|
(Distributable)
Income
|
$5.3
|
|||||
|
GAAP
E.P.S. Excluding
unrealized
|
$0.30
|
$0.27
|
$1.27
|
$1.45
|
||
|
Dividend
Per Share
|
$0.29
|
$0.27
|
$1.26
|
$1.47
|
||
|
Implied
Yield (IPO Price)
|
8%
|
10%
|
||||
|
Book
Value Per Share
|
$14.78
|
|||||
Q1
Actual
Q1
Consensus
Estimates
2007
Q4
Run Rate
Financial
Summary – Q1 2007
Q
& A
Chris
Lacovara – Chairman
Dayl
Pearson – CEO
Mike
Wirth – CFO