BlackRock TCP Capital Corp.

Q2 total investment income was $40 million, or $0.48 per share, including recurring cash interest income of $0.35 per share and pick income of $0.04 per share. Operating expenses were $21.9 million, or $0.26 per share, including $15 million of interest and other debt expense. Net investment income was $18.1 million, or $0.22 per share; adjusted net investment income was $17.5 million, or $0.21 per share. Net realized losses were $14.8 million, or $0.18 per share, and net unrealized gains were $1.3 million, or $0.01 per share. NAV declined by $0.14 per share to $6.58, and quarterly distributions totaled $0.17 per share. The portfolio sale is expected to reduce NAV by approximately 10.4% or $0.68 per share based on June 30 NAV. Guidance-wise, management did not give traditional earnings guidance; instead, it said pro forma net leverage should be about 0.4x, or below 0.3x if the expected Domo repayment closes, and unfunded commitments should be about $36 million to below $40 million.

Philip Tseng framed the portfolio sale as a milestone that materially strengthens the company by lowering leverage, reducing position sizes, and creating investment capacity. He said the board has engaged KBW for a strategic review that could consider reinvesting, returning capital, strategic combinations, or a mix of options, but stressed there is no specific timetable and no preconceived outcome. His tone was notably optimistic about the flexibility created, while emphasizing that capital deployment will remain prudent during the review.

Erik Cuellar said Q2 NII was $18.1 million and adjusted NII was $17.5 million, while operating expenses were $21.9 million and interest/other debt expense was $15 million. He highlighted that no incentive compensation was accrued because cumulative total return did not exceed the hurdle, and noted realized losses of $14.8 million versus unrealized gains of $1.3 million. On the balance sheet, he said the company completed a $406 million CLO debt issuance, repaid $107 million of SBIC debt and surrendered that license, and ended Q2 with $534 million of liquidity, including $376 million of borrowing capacity and $158 million of cash. He also said the combined weighted-average interest rate on debt outstanding was 6.03% and leverage was 1.38x at quarter end before the transaction-related reduction.

Analysts focused on how long the strategic review will take and whether TCPC will keep investing or repurchasing stock while it is ongoing. Management said there is no set timetable, but the company will continue to be prudent and use the new flexibility to evaluate new investments, buybacks, and other shareholder-friendly actions. Questions also focused on the size and economics of the portfolio sale; Erik confirmed the 10.4% NAV hit includes transaction expenses, and Philip said BlackRock has no preset agenda beyond maximizing long-term shareholder value.