BlackRock TCP Capital Approves Share Sale Below NAV

BlackRock TCP Capital Corp. has approved a proposal to sell shares below the current net asset value per share for up to 12 months. This decision aims to enhance the company's financial flexibility and potentially impact its market positioning. The stock has a neutral outlook with a solid financial performance and robust cash flow, but challenging valuation and bearish momentum.

BlackRock TCP Capital Corp. (TCPC), a middle-market lender, has approved a proposal to sell shares below the current net asset value (NAV) per share for up to 12 months. This strategic move aims to enhance the company's financial flexibility and potentially impact its market positioning. The decision comes amidst a challenging valuation environment and bearish market momentum, despite the company's solid financial performance and robust cash flow.

TCPC, which is externally managed by a subsidiary of BlackRock (BLK), has a diverse portfolio of 146 companies across several less-cyclical industries. The company's investment mix is heaviest in first-lien debt, at 83% of the portfolio, with the remaining 7% in second-lien debt and 10% in equity. The vast majority of its debt is floating-rate in nature, which can be both an advantage and a disadvantage depending on interest rate movements [2].

In recent quarters, TCPC has faced a significant dividend cut, which led to a 13% discount to NAV. Despite the reduced 25-cent-per-share base dividend and an announced 4-cent special dividend for Q1, the stock still yields a sky-high 13%. However, the company continues to struggle with non-accruals, which sit at an elevated 12.6% and 4.4% of the portfolio at cost and at fair value, respectively. These challenges have led to a cautious outlook from investors, driving shares down to a discount of up to 13% [2].

The decision to sell shares below NAV is a strategic move to bolster financial flexibility and potentially attract new investors. This move is particularly notable given TCPC's connection to BlackRock, which provides access to a wide range of resources and expertise. However, the company must navigate a challenging rate environment and maintain robust financial performance to justify the discount to NAV.

Investors should closely monitor TCPC's progress, particularly in managing non-accruals and maintaining cash flow. The company's ability to adapt to market conditions and demonstrate financial resilience will be crucial in regaining investor confidence and stabilizing its market positioning.

References:
[1] https://www.tradingview.com/news/reuters.com,2025-06-20:newsml_RST7733Na:0-reg-brown-advisory-us-net-asset-value-s/
[2] https://www.forbes.com/sites/brettowens/2025/06/15/private-equity-for-the-people-3-high-yield-bdcs-yielding-up-to-13/