BETHESDA, Md., Aug. 3, 2016 /PRNewswire/ -- American Capital Senior Floating, Ltd. ("ACSF" or the "Company") (NASDAQ: ACSF) today reported net investment income of $3.0 million, or $0.30 per share, for the quarter ended June 30, 2016 and net asset value ("NAV") of $124.5 million, or $12.45 per share, as of June 30, 2016.
SECOND QUARTER 2016 FINANCIAL HIGHLIGHTS
- Actively managed portfolio through periods of volatility
- Invested $32.1 million into 23 new loan obligors
- Sold $14.2 million of investments and received $15.6 million of repayments, including distributions received from our CLO Portfolio
- $0.30 per share net investment income, or $3.0 million
- Increased $0.01 per share from Q1 2016 net investment income of $0.29 per share
- $1.03 per share net earnings, or $10.3 million
- $0.81 per share improvement from Q1 2016 net earnings of $0.22 per share, primarily driven by $7.7 million net unrealized appreciation on the Investment Portfolio for the quarter ended June 30, 2016 as compared to $0.2 million net unrealized appreciation for the quarter ended March 31, 2016
- $12.45 NAV per share as of June 30, 2016, or $124.5 million
- $0.73 per share increase from March 31, 2016 NAV per share of $11.72
- 8.8% economic return on NAV for Q2 2016, or 35.2% annualized
- Comprised of $0.291 per share cash distributions to stockholders and $0.73 increase in NAV per share
- $0.097 per share monthly cash distributions to stockholders, which equates to $0.291 per quarter
- 9.3% annualized yield on the June 30, 2016 NAV per share
- 11.3% annualized yield on the June 30, 2016 closing market price of $10.26 per share
- $227.4 million Investment Portfolio at fair value as of June 30, 2016
- $173.9 million, or 77%, in first lien floating rate loans
- $16.5 million, or 7%, in second lien floating rate loans
- $37.0 million, or 16%, of equity in collateralized loan obligations ("CLOs")
- 6.59% Investment Portfolio yield at cost as of June 30, 2016
- 19 basis point increase from 6.40% yield at cost as of March 31, 2016 driven by our CLO portfolio
- 2.65% cost of funds as of June 30, 2016
- 5 basis point increase from 2.60% cost of funds as of March 31, 2016 due to increased unused facility fees
- Includes 2.23% interest expense, 0.33% unused facility fees and 0.09% amortization of debt financing costs
- 0.78x debt to equity ratio as of June 30, 2016
- Decreased 0.06x from 0.84x as of March 31, 2016 due primarily to an increase in the fair value of the portfolio
"Our performance this quarter was strong as a result of better market technicals," said Mark Pelletier, President and Chief Investment Officer. "Despite fears around Brexit, pricing in the loan market improved during the quarter which in turn benefited CLO equity values."
Malon Wilkus, Chairman and Chief Executive Officer commented, "Today we declared the next three months' dividends for August, September and October, which aggregate to $0.291 per share for the quarter. Our current annualized dividend represents a 9.3% annualized yield on our June 30, 2016 NAV and an 11.3% annualized yield on our June 30, 2016 closing share price of $10.26 per share."
PORTFOLIO AND INVESTMENT ACTIVITY
As of June 30, 2016, the fair market value of ACSF's portfolio totaled $227.4 million and was comprised of $173.9 million, or 77%, of first lien floating rate loans, $16.5 million, or 7%, of second lien floating rate loans (collectively, the "Loan Portfolio") and $37.0 million (or 16%) of CLO equity (the "CLO Portfolio" and, together with the Loan Portfolio, the "Investment Portfolio"). The Investment Portfolio had a yield at cost of 6.59% as of June 30, 2016.
As of June 30, 2016, ACSF's Loan Portfolio was diversified across 134 issuers and 46 industries and its CLO Portfolio was invested in 22 issuers and 16 collateral managers. The Investment Portfolio was actively managed during the quarter with $32.1 million of purchases and $29.8 million of sales and repayments. The following table depicts the Investment Portfolio activity by investment type for the quarter ended June 30, 2016:
First Lien | Second Lien | CLO Equity | Common Equity | Total | |||||||||||||||||||||||||
$ in millions | Amount | Yield (at cost) | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||
March 31, 2016 - FV | $ | 164.2 | 5.1 | % | $ | 17.9 | 8.0 | % | $ | 33.8 | 9.9 | % | $ | 0.1 | n/a | $ | 216.0 | 6.4 | % | ||||||||||
Purchases | 29.9 | 5.1 | % | 2.2 | 9.3 | % | — | n/a | — | n/a | 32.1 | 5.1 | % | ||||||||||||||||
Sales | (14.2) | (5.3) | % | — | n/a | — | n/a | — | n/a | (14.2) | (5.1) | % | |||||||||||||||||
Repayments (1) | (8.1) | (6.2) | % | (4.4) | (7.4) | % | (3.1) | (15.0) | % | — | n/a | (15.6) | (8.3) | % | |||||||||||||||
Net realized and unrealized | 2.0 | n/a | 0.8 | n/a | 4.6 | n/a | (0.1) | n/a | 7.3 | n/a | |||||||||||||||||||
Other (2) | 0.1 | n/a | — | n/a | 1.7 | n/a | — | n/a | 1.8 | n/a | |||||||||||||||||||
June 30, 2016 - FV | $ | 173.9 | 5.1 | % | $ | 16.5 | 8.3 | % | $ | 37.0 | 11.2 | % | $ | — | n/a | $ | 227.4 | 6.6 | % | ||||||||||
(1) | CLO equity repayments reflect the amount of cash distributions received during the three months ended June 30, 2016. |
(2) | Other includes amortization of discount/premium on the Loan Portfolio and income recognized on CLO equity using the effective interest method during the three months ended June 30, 2016. |
RESULTS OF OPERATIONS
Net Investment Income
Net investment income totaled $3.0 million, or $0.30 per share, for the three months ended June 30, 2016. Gross investment income was $4.3 million for the quarter, with $2.6 million, or 61%, generated from the Loan Portfolio and $1.7 million, or 39%, generated from the CLO Portfolio. Net expenses totaled $1.4 million for the three months ended June 30, 2016, with interest and other debt related costs of $0.6 million, management fees of $0.5 million and $0.3 million of other operating expenses, net of the expense waiver.
Net Realized and Unrealized Gain / (Loss) From Investments
Net realized and unrealized gain on investments for the three months ended June 30, 2016 totaled $7.3 million and was comprised of $(0.4) million of net realized losses on sales of investments and $7.7 million of net unrealized appreciation on the Investment Portfolio. The $7.7 million of net unrealized appreciation on the Investment Portfolio was driven by $3.1 million of net unrealized appreciation in the Loan Portfolio and $4.6 million of net unrealized appreciation in the CLO Portfolio. The increase in fair value of the CLO Portfolio was a result of a number of factors, including a rise in loan prices since March 31, 2016, increased trading in CLO equity and an enhancement of the LIBOR floor benefit as a downward shift in the forward LIBOR curve improved and lengthened the expected benefit of the LIBOR floors. The primary driver for the increase in fair value of the Loan Portfolio was higher prices in the broadly syndicated U.S. loan market.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2016, ACSF's wholly-owned consolidated financing subsidiary, ACSF Funding I, LLC ("ACSF Funding"), had $97.1 million outstanding on its $135.0 million revolving credit facility, resulting in a debt to equity ratio of 0.78x. As of June 30, 2016, ACSF had $41.1 million of available liquidity consisting of $3.2 million of cash and cash equivalents and $37.9 million of available capacity on the ACSF Funding revolving credit facility.
DISTRIBUTIONS TO STOCKHOLDERS
On August 3, 2016, the Company announced the declaration of monthly cash distributions to stockholders of $0.097 per share for each of August, September and October 2016. This cash distribution rate represents a 9.3% annualized yield on the June 30, 2016 NAV per share of $12.45 and an 11.3% annualized yield on the June 30, 2016 closing market price per share of $10.26. The monthly cash distributions will be paid to common stockholders of record as set forth in the table below:
Distributions to per Share | Record Date | Ex-Dividend Date | Payment Date | ||||||
August 2016 | $0.097 | August 23, 2016 | August 19, 2016 | September 2, 2016 | |||||
September 2016 | $0.097 | September 22, 2016 | September 20, 2016 | October 4, 2016 | |||||
October 2016 | $0.097 | October 21, 2016 | October 19, 2016 | November 2, 2016 |
Since its January 2014 IPO, the Company has declared a total of $31.6 million in cash distributions to stockholders, or $3.16 per share.
ACSF's Board of Directors considers estimated taxable income, GAAP income and economic performance when determining distributions to stockholders. Actual taxable income may differ from GAAP income due to temporary and permanent differences in income and expense recognition and changes in unrealized appreciation and depreciation on investments. The Company currently expects distributions to stockholders for 2016 to be from ordinary taxable income. The specific tax characteristics will be reported to stockholders on Form 1099 after the end of the calendar year. For additional detail, please visit the Company's website at www.ACSF.com.
AMERICAN CAPITAL SENIOR FLOATING, LTD. | ||||||||||||||
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | ||||||||||||||
(in thousands, except per share data) | ||||||||||||||
As of | ||||||||||||||
June 30, | March 31, | December | September (unaudited) | June 30, (unaudited) | ||||||||||
Assets: | ||||||||||||||
Investments, fair value | $ | 227,417 | $ | 216,018 | $ | 229,056 | $ | 257,732 | $ | 272,191 | ||||
Cash and cash equivalents | 3,181 | 2,607 | 2,474 | 2,247 | 2,458 | |||||||||
Receivable for investments sold | 3,675 | — | 3,096 | 2,007 | 3,812 | |||||||||
Other assets | 1,605 | 1,420 | 1,179 | 1,227 | 1,215 | |||||||||
Total assets | $ | 235,878 | $ | 220,045 | $ | 235,805 | $ | 263,213 | $ | 279,676 | ||||
Liabilities: | ||||||||||||||
Credit facility payable | $ | 97,100 | $ | 98,800 | $ | 110,200 | $ | 124,800 | $ | 123,800 | ||||
Payable for investments purchased | 11,872 | 2,150 | 5,437 | 995 | 8,400 | |||||||||
Distributions to stockholders payable | 970 | 970 | 970 | 970 | 970 | |||||||||
Management fee payable | 1,008 | 497 | 536 | 558 | 563 | |||||||||
Other liabilities | 383 | 441 | 733 | 634 | 580 | |||||||||
Total liabilities | 111,333 | 102,858 | 117,876 | 127,957 | 134,313 | |||||||||
Net Assets: | ||||||||||||||
Common stock, par value $0.01 per share, 10,000,100 issued and outstanding, 300,000,000 authorized | 100 | 100 | 100 | 100 | 100 | |||||||||
Paid-in capital in excess of par | 150,903 | 150,903 | 150,903 | 151,131 | 151,131 | |||||||||
Undistributed net investment income | 1,586 | 1,528 | 1,560 | 1,037 | 602 | |||||||||
Accumulated net realized loss from investments | (3,114) | (2,705) | (1,815) | (986) | (981) | |||||||||
Net unrealized depreciation on investments | (24,930) | (32,639) | (32,819) | (16,026) | (5,489) | |||||||||
Total net assets | 124,545 | 117,187 | 117,929 | 135,256 | 145,363 | |||||||||
Total liabilities and net assets | $ | 235,878 | $ | 220,045 | $ | 235,805 | $ | 263,213 | $ | 279,676 | ||||
Net asset value per share | $ | 12.45 | $ | 11.72 | $ | 11.79 | $ | 13.53 | $ | 14.54 | ||||
AMERICAN CAPITAL SENIOR FLOATING, LTD. | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
(in thousands, except per share data) | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
Investment income: | ||||||||||||||
Interest | $ | 4,272 | $ | 4,345 | $ | 4,636 | $ | 4,987 | $ | 4,880 | ||||
Total investment income | 4,272 | 4,345 | 4,636 | 4,987 | 4,880 | |||||||||
Expenses: | ||||||||||||||
Interest and other debt related costs | 640 | 664 | 690 | 766 | 758 | |||||||||
Management fee | 511 | 497 | 536 | 558 | 563 | |||||||||
Other operating expenses | 733 | 517 | 510 | 479 | 510 | |||||||||
Total expenses | 1,884 | 1,678 | 1,736 | 1,803 | 1,831 | |||||||||
Expense waiver | (455) | (238) | (234) | (193) | (227) | |||||||||
Net expenses | 1,429 | 1,440 | 1,502 | 1,610 | 1,604 | |||||||||
Net investment income before | 2,843 | 2,905 | 3,134 | 3,377 | 3,276 | |||||||||
Income tax benefit / (provision) | 125 | (27) | (68) | (33) | (57) | |||||||||
Net investment income | 2,968 | 2,878 | 3,066 | 3,344 | 3,219 | |||||||||
Net realized and unrealized gain / | ||||||||||||||
Net realized (loss) / gain on | (409) | (890) | (690) | (5) | 78 | |||||||||
Net unrealized appreciation / | 7,709 | 180 | (16,793) | (10,537) | (150) | |||||||||
Income tax benefit | — | — | — | — | 11 | |||||||||
Net realized and unrealized gain | 7,300 | (710) | (17,483) | (10,542) | (61) | |||||||||
Net increase / (decrease) in net assets resulting from operations ("Net Earnings (Loss)") | $ | 10,268 | $ | 2,168 | $ | (14,417) | $ | (7,198) | $ | 3,158 | ||||
Net investment income per share | $ | 0.30 | $ | 0.29 | $ | 0.31 | $ | 0.33 | $ | 0.32 | ||||
Net Earnings (Loss) per share | $ | 1.03 | $ | 0.22 | $ | (1.44) | $ | (0.72) | $ | 0.32 | ||||
Distributions to stockholders per | $ | 0.29 | $ | 0.29 | $ | 0.29 | $ | 0.29 | $ | 0.29 | ||||
Weighted average shares outstanding | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | |||||||||
AMERICAN CAPITAL SENIOR FLOATING, LTD. KEY PORTFOLIO STATISTICS (in thousands, except per share data) (unaudited) | ||||||||||||||
As of | ||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
Investment Portfolio at FV | ||||||||||||||
First Lien Floating Rate Loans | $ | 173,898 | $ | 164,186 | $ | 169,580 | $ | 186,950 | $ | 190,427 | ||||
Second Lien Floating Rate Loans | 16,463 | 17,868 | 22,575 | 25,510 | 27,914 | |||||||||
Total Loan Portfolio | 190,361 | 182,054 | 192,155 | 212,460 | 218,341 | |||||||||
CLO Equity | 37,021 | 33,817 | 36,854 | 45,272 | 53,850 | |||||||||
Common Equity | 35 | 147 | 47 | n/a | n/a | |||||||||
Total Investment Portfolio at FV | $ | 227,417 | $ | 216,018 | $ | 229,056 | $ | 257,732 | $ | 272,191 | ||||
Investment Portfolio at Cost | ||||||||||||||
First Lien Floating Rate Loans | $ | 180,259 | $ | 172,965 | $ | 181,367 | $ | 191,863 | $ | 192,480 | ||||
Second Lien Floating Rate Loans | 18,375 | 20,543 | 24,910 | 26,821 | 28,681 | |||||||||
Total Loan Portfolio | 198,634 | 193,508 | 206,277 | 218,684 | 221,161 | |||||||||
CLO Equity | 53,713 | 55,149 | 55,599 | 55,074 | 56,519 | |||||||||
Common Equity | — | — | — | n/a | n/a | |||||||||
Total Investment Portfolio at Cost | $ | 252,347 | $ | 248,657 | $ | 261,876 | $ | 273,758 | $ | 277,680 | ||||
Asset Yield at Cost | ||||||||||||||
First Lien Floating Rate Loans | 5.06% | 5.11% | 5.03% | 4.90% | 4.90% | |||||||||
Second Lien Floating Rate Loans | 8.27% | 8.02% | 7.90% | 7.85% | 7.79% | |||||||||
Total Loan Portfolio | 5.35% | 5.42% | 5.38% | 5.26% | 5.27% | |||||||||
CLO Equity | 11.16% | 9.85% | 10.04% | 12.95% | 14.69% | |||||||||
Total Investment Portfolio | 6.59% | 6.40% | 6.37% | 6.81% | 7.19% | |||||||||
Quarterly Investment Activity | ||||||||||||||
Investment Purchases | $ | 32,138 | $ | 8,995 | $ | 17,984 | $ | 13,913 | $ | 38,904 | ||||
Investment Sales | $ | (14,154) | $ | (8,415) | $ | (11,641) | $ | (7,954) | $ | (19,725) | ||||
Investment Repayments (1) | $ | (15,608) | $ | (14,624) | $ | (19,330) | $ | (11,889) | $ | (21,363) | ||||
Loan Portfolio Statistics | ||||||||||||||
Number of Obligors | 134 | 128 | 128 | 127 | 127 | |||||||||
Number of Industries | 46 | 46 | 46 | 46 | 43 | |||||||||
Largest Exposure as a % of Total Portfolio | 2.0% | 1.6% | 1.5% | 1.4% | 1.3% | |||||||||
Average Exposure as a % of Total Portfolio | 0.6% | 0.7% | 0.7% | 0.6% | 0.6% | |||||||||
% with LIBOR Floor | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | |||||||||
Weighted-average LIBOR Floor | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | |||||||||
CLO Portfolio Statistics | ||||||||||||||
Number of Issuers | 22 | 22 | 20 | 19 | 19 | |||||||||
CLO Managers | 16 | 16 | 15 | 14 | 14 | |||||||||
Largest Exposure as a % of Total Portfolio | 1.4% | 1.4% | 1.5% | 1.6% | 1.8% | |||||||||
Average Exposure as a % of Total Portfolio | 0.7% | 0.7% | 0.8% | 0.9% | 1.0% | |||||||||
Minimum % of Collateral in First Lien | 90.9% | 90.8% | 91.0% | 91.0% | 91.0% | |||||||||
Cumulative Cash Receipts as a % of | 43.7% | 39.2% | 34.9% | 31.1% | 26.1% | |||||||||
Liquidity and Capital Resources | ||||||||||||||
Debt | ||||||||||||||
Amount Available on Credit Facility | $ | 135,000 | $ | 135,000 | $ | 135,000 | $ | 140,000 | $ | 140,000 | ||||
Amount Drawn on Credit Facility | $ | 97,100 | $ | 98,800 | $ | 110,200 | $ | 124,800 | $ | 123,800 | ||||
Interest Rate on Debt as of Period-end | 2.23% | 2.21% | 2.02% | 2.00% | 1.99% | |||||||||
Cost of Funds as of Period-end (4) | 2.65% | 2.60% | 2.32% | 2.41% | 2.40% | |||||||||
Equity | ||||||||||||||
NAV | $ | 124,545 | $ | 117,187 | $ | 117,929 | $ | 135,256 | $ | 145,363 | ||||
NAV Per Share | $ | 12.45 | $ | 11.72 | $ | 11.79 | $ | 13.53 | $ | 14.54 | ||||
Debt to Equity Ratio | 0.78x | 0.84x | 0.93x | 0.92x | 0.85x | |||||||||
Quarterly Cash Distributions to | $ | 0.291 | $ | 0.291 | $ | 0.291 | $ | 0.291 | $ | 0.291 | ||||
Economic Return (5) | 35.2% | 7.4% | (10.2%) | (19.6%) | 8.7% | |||||||||
(1) Investment repayments include the distributions received from CLO equity investments. | ||||||||||||||
(2) Represents the weighted-average minimum percent of assets as allowed by each CLO's indenture to be invested in first lien floating rate loans. | ||||||||||||||
(3) Original cost included only for CLOs that have begun to make quarterly distributions to ACSF and are held at each period-end reporting date. | ||||||||||||||
(4) Cost of funds includes interest cost, amortization of upfront fees and unfunded commitment fees. | ||||||||||||||
(5) Economic return defined as the distributions to stockholders paid in the quarter, plus the change in NAV per share for the quarter, over the starting | ||||||||||||||
STOCKHOLDER CALL
ACSF invites stockholders, prospective stockholders and analysts to attend the ACSF stockholder call on August 4, 2016 at 11:00 am ET. Callers who do not plan on asking a question and have access to the internet are encouraged to utilize the free live webcast at www.ACSF.com. Those who do plan on participating in the Q&A or do not have the internet available may access the call by dialing (877) 274-0811 (U.S. domestic) or (412) 902-6607 (international). Please advise the operator you are dialing in for the American Capital Senior Floating stockholder call.
A slide presentation will accompany the stockholder call and will be available at www.ACSF.com. Select the Q2 2016 Earnings Presentation link to download and print the presentation in advance of the stockholder call.
An archived audio replay of the stockholder call combined with the slide presentation will be made available on the ACSF website after the call on August 4, 2016. In addition, there will be a phone recording available one hour after the live call on August 4, 2016 through August 19, 2016. If you are interested in hearing the recording of the presentation, please access it for free on the ACSF website or dial (877) 344-7529 (U.S. domestic) or (412) 317-0088 (international). The access code for both domestic and international callers is 10089919.
For further information, please contact Investor Relations at (301) 968-9310 or IR@ACSF.com.
ABOUT AMERICAN CAPITAL SENIOR FLOATING, LTD.
American Capital Senior Floating, Ltd. (NASDAQ: ACSF) is a non-diversified closed-end investment management company that invests primarily in senior first lien and second lien floating rate loans to large-market U.S. based companies ("Senior Floating Rate Loans") and in debt and equity tranches of collateralized loan obligations collateralized by Senior Floating Rate Loans. The Company has elected to be treated as a business development company under the Investment Company Act of 1940, as amended. The Company is externally managed by American Capital ACSF Management, LLC, an indirect subsidiary of American Capital Asset Management, LLC, a wholly-owned portfolio company of American Capital, Ltd. For further information, please refer to www.ACSF.com.
ABOUT AMERICAN CAPITAL, LTD.
American Capital, Ltd. (NASDAQ: ACAS) is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance and structured products. American Capital manages $10 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers. Through a wholly-owned affiliate, American Capital manages publicly traded American Capital Senior Floating, Ltd. (NASDAQ: ACSF) with $117 million of total net book value. American Capital and its affiliates operate out of six offices in the U.S. and Europe. For further information, please refer to www.americancapital.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking information and statements. Forward-looking statements give the Company's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "confident," "may," "should," "can have," "likely," "future" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements are not guarantees of performance or results, and involve known and unknown risks, uncertainties (some of which are beyond the Company's control), assumptions and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Should one or more of these risks or uncertainties materialize, the Company's actual results may vary in material respects from those projected in any forward-looking statements. A detailed discussion of these and other factors that may affect future results is contained in our filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made by the Company in this press release speaks only as of the date on which it is made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
CONTACT:
Investors - (301) 968-9310
Media - (301) 968-9400
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SOURCE American Capital Senior Floating, Ltd.
