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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Investcorp Credit Management BDC Inc | NASDAQ:ICMB | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.45 | 3.11 | 3.58 | 0 | 09:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code:
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K 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 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)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
Trading symbol(s) |
Name of Each Exchange on Which Registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. | Results of Operations and Financial Condition. |
On September 18, 2023, Investcorp Credit Management BDC, Inc. (the “Company”) issued a press release announcing its preliminary financial results for the quarter and year ended June 30, 2023. The press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such Section. The information in this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On September 14, 2023, the Board of Directors (the “Board”) of the Company increased the size of the Board from four to five members and appointed Suhail A. Shaikh as an interested director to fill the vacancy created by such increase.
The initial term of Mr. Shaikh will expire at the 2024 annual meeting of stockholders of the Company. As an interested director, Mr. Shaikh will not receive any compensation from the Company.
Mr. Shaikh, 55, has served the President of the Company and Co-Chief Investment Officer of CM Investment Partners LLC, the Company’s investment adviser, since February 2023. Mr. Shaikh has also served as President of Investcorp US Institutional Private Credit Fund since February 2023. Prior to joining Investcorp, Mr. Shaikh served as the Head of U.S. Private Credit for Alcentra Group. Mr. Shaikh also served as Vice Chair of the Global Private Credit Investment Committee and was a Board member of Alcentra NY, LLC, external manager to funds managed by Alcentra Group. Mr. Shaikh also served as member of Alcentra’s management committee. Mr. Shaikh was the Chief Executive Officer of Alcentra Capital Corporation since March 2019, a publicly listed business development company managed by Alcentra NY, LLC, and served on its Board of Directors. Prior to joining Alcentra, Mr. Shaikh was a partner and senior investment professional with Solar Capital Partners LLC. Prior to being a private credit investor, Mr. Shaikh was in investment banking for over fifteen years as a leveraged finance specialist and financial sponsor banker, most recently as a Managing Director in the Financial Sponsors Group at Bank of America Merrill Lynch. He previously worked in CIBC World Market’s Financial Sponsor Group and in the Leveraged Finance and Telecom Groups at JPMorgan & Co. in New York and London. He began his career as an investment analyst in the Investment Management Group at Bankers Trust. Mr. Shaikh earned an M.B.A. from The Wharton School with a concentration in Finance and graduated Cum Laude with an A.B. in Computer Science and Economics from Middlebury College.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit Number |
Description | |
99.1 | Press Release, dated September 18, 2023 | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 20, 2023 | INVESTCORP CREDIT MANAGEMENT BDC, INC. | |||||
By: | /s/ Rocco DelGuercio | |||||
Name: | Rocco DelGuercio | |||||
Title: | Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary |
Exhibit 99.1
Investcorp Credit Management BDC, Inc. Announces Financial Results for the Quarter Ended June 30, 2023, and Quarterly and Supplemental Distribution
Investcorp Credit Management BDC, Inc. (NASDAQ: ICMB) (ICMB or the Company) announced its financial results today for its fiscal fourth quarter ended June 30, 2023.
HIGHLIGHTS
| On September 14, 2023, the Companys Board of Directors (the Board) declared a distribution of $0.12 per share for the quarter ending September 30, 2023, payable in cash on November 2, 2023, to stockholders of record as of October 12, 2023 and a supplemental distribution of $0.03 per share, payable on November 2, 2023, to stockholders of record as of October 12, 2023. |
| During the quarter, ICMB made investments in two new portfolio companies and two existing portfolio companies. These investments totaled $15.1 million, at cost. The weighted average yield (at origination) of debt investments made in the quarter was 15.5%. |
| ICMB fully realized one portfolio company during the quarter, totaling $8.66 million in proceeds. The internal rate of return on this investment was 9.77%. |
| During the quarter, the Company had net advances of $0.9 million on its existing delayed draw and revolving credit commitments to portfolio companies. |
| The weighted average yield on debt investments, at cost, for the quarter ended June 30, 2023, was 12.45%, compared to 13.36% for the quarter ended March 31, 2023. |
| Net asset value decreased $0.04 per share to $6.09, compared to $6.13 as of March 31, 2023. Net assets decreased by $0.5 million, or 0.6%, during the quarter ended June 30, 2023 compared to March 31, 2023. |
Portfolio results, as of and for the three months ended June 30, 2023:
Total assets |
$ | 231.8mm | ||
Investment portfolio, at fair value |
$ | 220.1mm | ||
Net assets |
$ | 87.7mm | ||
Weighted average yield on debt investments, at cost (1) |
12.45 | % | ||
Net asset value per share |
$ | 6.09 | ||
Portfolio activity in the current quarter: |
||||
Number of new investments |
2 | |||
Total capital invested |
$ | 15.1mm | ||
Proceeds from repayments, sales, and amortization |
$ | 8.7mm | ||
Number of portfolio companies, end of period |
36 | |||
Net investment income (NII) |
$ | 2.2mm | ||
Net investment income per share |
$ | 0.15 | ||
Net increase in net assets from operations |
$ | 2.1mm | ||
Net increase in net assets from operations per share |
$ | 0.14 | ||
Quarterly per share distribution paid on June 30, 2023 |
$ | 0.18 |
(1) | Represents weighted average yield on total debt investments for the three months ended June 30, 2023. Weighted average yield on total debt investments is the annualized rate of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The weighted average yield on total debt investments reflected above does not represent actual investment returns to the Companys stockholders. |
Mr. Michael C. Mauer, the Companys Chief Executive Officer, said We continue to focus on managing the portfolio in this inflationary environment; specifically focusing on the diversity of our investments, reducing average position sizes, and working with borrowers and sponsors where covenant or liquidity issues exist. Our expectation is that well-capitalized companies with strong sponsor backing will continue to outperform over the coming quarters.
The Companys dividend framework provides a quarterly base dividend and may be supplemented, at the discretion of the Board, by additional dividends as determined to be available by the Companys net investment income and performance during the quarter.
On September 14, 2023, the Board declared a distribution for the quarter ended September 30, 2023 of $0.12 per share payable on November 2, 2023 to stockholders of record as of October 12, 2023 and a supplemental distribution of $0.03 per share, payable on November 2, 2023, to stockholders of record as of October 12, 2023.
This distribution represents a 16.57% yield on the Companys $3.62 share price as of market close on June 30, 2023. Distributions may include net investment income, capital gains and/or return of capital, however, the Company does not expect the dividend for the quarter ending June 30, 2023, to be comprised of a return of capital. The Companys investment adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. The Company estimates the source of its distributions as required by Section 19(a) of the Investment Company Act of 1940 to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods, but the Company will not be able to determine whether any specific distribution will be treated as taxable earnings or as a return of capital until after at the end of the taxable year.
Portfolio and Investment Activities
During the quarter, the Company made investments in two new portfolio companies and two existing portfolio companies. The aggregate capital invested during the quarter totaled $15.1 million, at cost, and the debt investments were made at a weighted average yield of 15.48%.
The Company received proceeds of $8.7 million from repayments, sales and amortization during the quarter, primarily related to the realization of Altern Marketing, LLC.
During the quarter, the Company had net advances of $0.9 million on its existing and new delayed draw and revolving credit commitments to portfolio companies.
The Companys net realized, and unrealized gains and losses accounted for a decrease in the Companys net investments of approximately $131,000, or $0.01 per share. The total net increase in net assets resulting from operations for the quarter was $2.1 million, or $0.14 per share.
As of June 30, 2023, the Companys investment portfolio consisted of investments in 36 portfolio companies, of which 89.21% were first lien investments and 10.79% were equity, warrants, and other investments. The Companys debt portfolio consisted of 99.6% floating rate investments and 0.4% fixed rate investments.
Capital Resources
As of June 30, 2023, the Company had $9.2 million in cash, of which $8.1 million was restricted cash, and $28.1 million of unused capacity under its revolving credit facility with Capital One, N.A.
Subsequent Events
Subsequent to June 30, 2023 and through September 15, 2023, the Company invested a total of $4.1 million, which included investments in one new portfolio company and one existing portfolio company. As of September 15, 2023, the Company had investments in 37 portfolio companies.
2
Investcorp Credit Management BDC, Inc. and Subsidiaries
Consolidated Statements of Assets and Liabilities
June 30, 2023 | June 30, 2022 | |||||||
Assets |
||||||||
Non-controlled, non-affiliated investments, at fair value (amortized cost of $219,319,251 and $254,172,763, respectively) |
$ | 210,150,018 | $ | 223,037,183 | ||||
Affiliated investments, at fair value (amortized cost of $23,979,565 and $23,395,242, respectively) |
9,961,311 | 10,646,803 | ||||||
|
|
|
|
|||||
Total investments, at fair value (amortized cost of $243,298,816 and $277,568,005, respectively) |
220,111,329 | 233,683,986 | ||||||
Cash |
1,093,758 | 2,550,021 | ||||||
Cash, restricted |
8,057,458 | 6,605,056 | ||||||
Principal receivable |
93,581 | 835,043 | ||||||
Interest receivable |
2,041,877 | 2,298,443 | ||||||
Payment-in-kind interest receivable |
46,088 | 2,137 | ||||||
Other receivables |
1,050 | | ||||||
Prepaid expenses and other assets |
361,719 | 410,401 | ||||||
|
|
|
|
|||||
Total Assets |
$ | 231,806,860 | $ | 246,385,087 | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Notes payable: |
||||||||
Revolving credit facility |
$ | 71,900,000 | $ | 84,000,000 | ||||
2026 Notes payable |
65,000,000 | 65,000,000 | ||||||
Deferred debt issuance costs |
(1,220,556 | ) | (1,913,889 | ) | ||||
Unamortized discount |
(195,553 | ) | (266,663 | ) | ||||
|
|
|
|
|||||
Notes payable, net |
135,483,891 | 146,819,448 | ||||||
Payable for investments purchased |
1,795,297 | 246,984 | ||||||
Dividend payable |
2,590,520 | 2,157,872 | ||||||
Income-based incentive fees payable |
576,023 | 182,095 | ||||||
Base management fees payable |
906,218 | 1,054,063 | ||||||
Interest payable |
2,293,766 | 1,574,356 | ||||||
Directors fees payable |
15,755 | 20,780 | ||||||
Accrued expenses and other liabilities |
445,082 | 820,097 | ||||||
|
|
|
|
|||||
Total Liabilities |
144,106,552 | 152,875,695 | ||||||
Net Assets |
||||||||
Common stock, par value $0.001 per share (100,000,000 shares authorized 14,391,775 and 14,385,810 shares issued and outstanding, respectively) |
14,392 | 14,386 | ||||||
Additional paid-in capital |
203,327,714 | 203,590,126 | ||||||
Distributable earnings (loss) |
(115,641,798 | ) | (110,095,120 | ) | ||||
|
|
|
|
|||||
Total Net Assets |
87,700,308 | 93,509,392 | ||||||
|
|
|
|
|||||
Total Liabilities and Net Assets |
$ | 231,806,860 | $ | 246,385,087 | ||||
|
|
|
|
|||||
Net Asset Value Per Share |
$ | 6.09 | $ | 6.50 |
3
Investcorp Credit Management BDC, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Years Ended June 30, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Investment Income: |
||||||||||||
Interest income |
||||||||||||
Non-controlled, non-affiliated investments |
$ | 23,822,181 | $ | 22,641,798 | $ | 22,716,304 | ||||||
Affiliated investments |
(20,611 | ) | 29,813 | 97,293 | ||||||||
|
|
|
|
|
|
|||||||
Total interest income |
23,801,570 | 22,671,611 | 22,813,597 | |||||||||
Payment in-kind interest income |
||||||||||||
Non-controlled, non-affiliated investments |
1,250,169 | 102,720 | 2,334,246 | |||||||||
Affiliated investments |
70,070 | 208,470 | 155,780 | |||||||||
|
|
|
|
|
|
|||||||
Total payment-in-kind interest income |
1,320,239 | 311,190 | 2,490,026 | |||||||||
Dividend income |
||||||||||||
Non-controlled, non-affiliated investments |
101,755 | | | |||||||||
Affiliated investments |
| 296,126 | | |||||||||
|
|
|
|
|
|
|||||||
Total dividend income |
101,755 | 296,126 | | |||||||||
Payment in-kind dividend income |
||||||||||||
Non-controlled, non-affiliated investments |
691,972 | 282,952 | | |||||||||
Affiliated investments |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total payment-in-kind dividend income |
691,972 | 282,952 | | |||||||||
Other fee income |
||||||||||||
Non-controlled, non-affiliated investments |
768,617 | 868,727 | 1,383,850 | |||||||||
Affiliated investments |
| 759 | 1,502 | |||||||||
|
|
|
|
|
|
|||||||
Total other fee income |
768,617 | 869,486 | 1,385,352 | |||||||||
|
|
|
|
|
|
|||||||
Total investment income |
26,684,153 | 24,431,365 | 26,688,975 | |||||||||
Expenses: |
||||||||||||
Interest expense |
8,413,409 | 6,633,587 | 7,359,079 | |||||||||
Base management fees |
4,201,394 | 4,594,588 | 4,716,233 | |||||||||
Income-based incentive fees |
401,597 | (348,670 | ) | | ||||||||
Provision for tax expense |
294,330 | 270,618 | 268,992 | |||||||||
Professional fees |
984,290 | 1,302,513 | 1,514,186 | |||||||||
Allocation of administrative costs from Adviser |
966,045 | 1,247,205 | 1,397,069 | |||||||||
Amortization of deferred debt issuance costs |
693,333 | 621,111 | 1,107,497 | |||||||||
Amortization of original issue discount - 2026 Notes |
71,110 | 71,110 | 17,777 | |||||||||
Insurance expense |
506,963 | 512,347 | 454,324 | |||||||||
Directors fees |
302,500 | 302,500 | 312,500 | |||||||||
Custodian and administrator fees |
292,267 | 334,214 | 333,168 | |||||||||
Other expenses |
516,160 | 446,330 | 473,385 | |||||||||
|
|
|
|
|
|
|||||||
Total expenses |
17,643,398 | 15,987,453 | 17,954,210 | |||||||||
Waiver of base management fees |
(387,311 | ) | (480,032 | ) | (366,951 | ) | ||||||
Waiver of income-based incentive fees |
| | | |||||||||
|
|
|
|
|
|
|||||||
Net expenses |
17,256,087 | 15,507,421 | 17,587,259 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income |
9,428,066 | 8,923,944 | 9,101,716 | |||||||||
Net realized and unrealized gain/(loss) on investments: |
||||||||||||
Net realized gain (loss) from investments |
||||||||||||
Non-controlled, non-affiliated investments |
(26,890,095 | ) | (6,198,762 | ) | (5,776,334 | ) | ||||||
Affiliated investments |
| (8,196,669 | ) | | ||||||||
|
|
|
|
|
|
|||||||
Net realized gain (loss) from investments |
(26,890,095 | ) | (14,395,431 | ) | (5,776,334 | ) | ||||||
Net change in unrealized appreciation (depreciation) in value of investments |
||||||||||||
Non-controlled, non-affiliated investments |
21,966,347 | 2,898,538 | 525,501 | |||||||||
Affiliated investments |
(1,269,815 | ) | 5,159,579 | (6,164,708 | ) | |||||||
|
|
|
|
|
|
|||||||
Net change in unrealized appreciation (depreciation) on investments |
20,696,532 | 8,058,117 | (5,639,207 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total realized gain (loss) and change in unrealized appreciation (depreciation) on investments |
(6,193,563 | ) | (6,337,314 | ) | (11,415,541 | ) | ||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in net assets resulting from operations |
$ | 3,234,503 | $ | 2,586,630 | $ | (2,313,825 | ) | |||||
|
|
|
|
|
|
|||||||
Basic and diluted: |
||||||||||||
Net investment income per share |
$ | 0.66 | $ | 0.62 | $ | 0.65 | ||||||
Earnings per share |
$ | 0.22 | $ | 0.18 | $ | (0.17 | ) | |||||
Weighted average shares of common stock outstanding |
14,389,163 | 14,304,641 | 13,908,612 | |||||||||
Distributions paid per common share |
$ | 0.63 | $ | 0.60 | $ | 0.69 |
4
About Investcorp Credit Management BDC, Inc.
The Company is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The Companys investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The Company seeks to invest primarily in middle-market companies that have annual revenues of at least $50mm and earnings before interest, taxes, depreciation, and amortization of at least $15mm. The Companys investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about Investcorp Credit Management BDC, Inc., please visit www.icmbdc.com.
Forward-Looking Statements
Statements included in this press release and made on the earnings call for the quarter ended June 30, 2023, may contain forward-looking statements, which relate to future performance, operating results, events and/or financial condition. Words such as anticipates, expects, intends, plans, will, may, continue, believes, seeks, estimates, would, could, should, targets, projects, and variations of these words and similar expressions are intended to identify forward-looking statements. Any forward-looking statements, including statements other than statements of historical facts, included in this press release or made on the earnings call are based upon current expectations, are inherently uncertain, and involve a number of assumptions and substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Companys control.
Investors are cautioned not to place undue reliance on these forward-looking statements. Any such statements are likely to be affected by other unknowable future events and conditions, which the Company may or may not have considered, including, without limitation, changes in base interest rates and the effects of significant market volatility on our business, our portfolio companies, our industry and the global economy. Accordingly, such statements cannot be guarantees or assurances of any aspect of future performance or events. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors and risks. More information on these risks and other potential factors that could affect actual events and the Companys performance and financial results, including important factors that could cause actual results to differ materially from plans, estimates or expectations included herein or discussed on the earnings call, is or will be included in the Companys filings with the Securities and Exchange Commission, including in the Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations sections of the Companys Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. All forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
Contacts
Investcorp Credit Management BDC, Inc.
Investor Relations
Email:icmbinvestorrelations@investcorp.com
Phone:(646) 690-5034
5
Document and Entity Information |
Sep. 14, 2023 |
---|---|
Cover [Abstract] | |
Amendment Flag | false |
Entity Central Index Key | 0001578348 |
Document Type | 8-K |
Document Period End Date | Sep. 14, 2023 |
Entity Registrant Name | Investcorp Credit Management BDC, Inc. |
Entity Incorporation State Country Code | MD |
Entity File Number | 814-01054 |
Entity Tax Identification Number | 46-2883380 |
Entity Address, Address Line One | 280 Park Avenue |
Entity Address, Address Line Two | 39th Floor |
Entity Address, City or Town | New York |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10017 |
City Area Code | (212) |
Local Phone Number | 257-5199 |
Written Communications | false |
Soliciting Material | false |
Pre Commencement Tender Offer | false |
Pre Commencement Issuer Tender Offer | false |
Security 12b Title | Common Stock, par value $0.001 per share |
Trading Symbol | ICMB |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
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