BlackRock TCP Capital Corp.: Third Quarter 2024 Financial Results

BlackRock TCP Capital Corp. (TCPC) recently reported its financial results for the third quarter ended September 30, 2024, showcasing a strong performance driven by a diversified portfolio and risk management strategies. The company's adjusted net investment income (NII) return on average equity (ROE) reached 14%, reflecting its ability to generate attractive risk-adjusted returns for shareholders.

TCPC's diversified portfolio, with 156 companies and 91% invested in senior secured debt, contributed to the high NII ROE. The weighted average yield of the performing debt portfolio was 13.4%, further enhancing the company's financial performance. Additionally, TCPC's continuous coverage of the dividend with net investment income each quarter, along with an adjusted dividend coverage ratio of 106% in Q3 2024, indicates a sustainable and attractive income stream for investors.

The company's board approved a special dividend of $0.10 per share, in addition to the regular dividend of $0.34 per share, demonstrating confidence in its financial performance. TCPC's strong capital and liquidity position, with $582 million in available liquidity, enables it to maintain NAV stability and navigate market fluctuations effectively.


TCPC's portfolio diversification strategy has significantly contributed to the reduction in non-accrual investments. As of September 30, 2024, non-accrual investments represented only 3.8% of the portfolio at fair value, down from 4.9% in June 2024. This decline is attributed to improvements in the Energy and Industrials sectors, which together represented 43% of the portfolio.


TCPC has taken measures to address markdowns and improve the performance of its investments. The company has been working diligently with its borrowers, their lenders, and sponsors to resolve credit issues, aiming to achieve positive outcomes for shareholders. The company's strong capital and liquidity position enables it to capitalize on a growing pipeline of attractive investment opportunities, further enhancing its ability to deliver risk-adjusted returns over the long term.

In conclusion, BlackRock TCP Capital Corp.'s strong financial performance, driven by a diversified portfolio and risk management strategies, positions the company well for continued success. The company's focus on generating attractive risk-adjusted returns, maintaining a strong capital and liquidity position, and addressing markdowns to improve investment performance, makes it an attractive investment opportunity for those seeking exposure to the middle market lending sector.