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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

TCG BDC, Inc. Announces Third Quarter 2019 Financial Results and Declares Fourth Quarter 2019 Dividend of $0.37 Per Share

November 5, 2019

NEW YORK, Nov. 05, 2019 (GLOBE NEWSWIRE) -- TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) (NASDAQ: CGBD) today announced its financial results for its third quarter ended September 30, 2019.

Selected Financial Highlights

(dollar amounts in thousands, except per share data) September 30, 2019 June 30, 2019 ------------------ ------------- Total investments, at fair value $ 2,126,688 $ 2,075,614 Total assets 2,225,990 2,172,756 Total debt 1,202,739 1,095,563 Total net assets $ 978,601 $ 1,026,592 Net assets per share $ 16.58 $ 17.06

For the three month periods ended September June 30, 30, 2019 2019 ---------- ---------- Total investment income $ 55,779 $ 56,867 Net investment income (loss) 26,755 27,971 Net realized gain (loss) and net change in unrealized appreciation (depreciation) on (35,744 ) (18,214 ) investments Net increase (decrease) in net assets resulting from operations $ (8,989 ) $ 9,757 Basic and diluted per weighted-average common share: Net investment income (loss) $ 0.45 $ 0.46 Net realized gain (loss) and net change in unrealized appreciation (depreciation) on (0.60 ) (0.29 ) investments Net increase (decrease) in net assets resulting from operations $ (0.15 ) $ 0.16 Weighted-average shares of common stock outstanding—Basic and Diluted 59,587,94 60,596,40 1 2 Regular dividends declared per common share $ 0.37 $ 0.37 Special dividends declared per common share $ — $ 0.08

Third Quarter 2019 Highlights(dollar amounts in thousands, except per share data)

-- Net investment income for the three month period ended September 30, 2019 was $26,755, or $0.45 per share, as compared to 27,971, or $ 0.46 per share, for the three month period ended June 30, 2019; -- Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments for the three month period ended September 30, 2019 was $(35,744), or $(0.60) per share, as compared to $ (18,214), or $(0.29) per share, for the three month period ended June 30, 2019; -- Net increase (decrease) in net assets resulting from operations for the three month period ended September 30, 2019 was $(8,989), or $(0.15) per share, as compared to $9,757, or $0.16 per share, for the three month period ended June 30, 2019; -- During the three month period ended September 30, 2019, the Company repurchased and extinguished 1,168,383 shares for $17,167; and -- On November 4, 2019, the Board of Directors declared a quarterly dividend of $0.37, which is payable on January 17, 2020 to stockholders of record on December 31, 2019.

Portfolio and Investment Activity(dollar amounts in thousands, except per share data, unless otherwise noted)

As of September 30, 2019, the fair value of our investments was approximately $2,126,688, comprised of 141 investments in 110 portfolio companies/investment fund across 28 industries with 63 sponsors. This compares to the Company’s portfolio as of June 30, 2019, as of which date the fair value of our investments was approximately $ 2,075,614, comprised of 135 investments in 106 portfolio companies/investment fund across 28 industries with 63 sponsors.

As of September 30, 2019 and June 30, 2019, investments consisted of the following:

September 30, 2019 June 30, 2019 % of % of Type—% of Fair Value Fair Value Fair Fair Value Fair Value Value ------------ -------- ------------ -------- First Lien Debt (excluding First Lien/Last Out) $ 1,447,303 68.05 % $ 1,442,698 69.51 % First Lien/Last Out Unitranche 213,492 10.04 209,201 10.08 Second Lien Debt 232,135 10.92 203,187 9.79 Equity Investments 30,657 1.44 29,142 1.40 Investment Fund 203,101 9.55 191,386 9.22 ----------- ------ - ----------- Total $ 2,126,688 100.00 % $ 2,075,614 100.00 % - --------- ------ - - --------- ------ -

The following table shows our investment activity for the three month period ended September 30, 2019:

Funded Sold/Repaid Principal amount of investments: Amount % of Amount % of Total Total ---------- -------- ------------ -------- First Lien Debt (excluding First Lien/Last Out) $ 139,276 58.77 % $ (137,674 ) 83.10 % First Lien/Last Out Unitranche 25,045 10.57 — — Second Lien Debt 39,500 16.67 (9,498 ) 5.73 Equity Investments 683 0.29 — — Investment Fund 32,500 13.71 (18,500 ) 11.17 --------- ------ - ---------- - Total $ 237,004 100.01 % $ (165,672 ) 100.00 % - ------- ------ - - -------- - ------ -

Overall, total investments at fair value increased by 2.5%, or $51,074, during the three month period ended September 30, 2019 after factoring in repayments, sales, net fundings on revolvers and delayed draws and net change in unrealized appreciation (depreciation).

Total investments at fair value held by Middle Market Credit Fund, LLC (“Credit Fund”), which is not consolidated with the Company, decreased by 4.4%, or $57,873, during the three month period ended September 30, 2019 after factoring in repayments, sales, net fundings on revolvers and delayed draws and net change in unrealized appreciation (depreciation). As of September 30, 2019, Credit Fund had total investments at fair value of $1,270,328, which comprised 98.3% of first lien senior secured loans and 1.7% of second lien senior secured loans at fair value. As of September 30, 2019, approximately 1.7% of Credit Fund’s debt investments bear interest at a fixed rate and approximately 98.3% of investments in the portfolio were floating rate debt investments, which primarily are subject to interest rate floors.

As of September 30, 2019, the weighted average yields for our first and second lien debt investments on an amortized cost basis were 8.65% and 10.62%, respectively, with a total weighted average yield of 8.88%. The weighted average yields for our new first and second lien debt investments for the quarter on an amortized cost basis was 9.43%. The weighted average yields for our first and second lien debt investments that repaid during the quarter on an amortized cost basis was 7.73%. Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of September 30, 2019. As of September 30, 2019, on a fair value basis, approximately 0.3% of our debt investments bear interest at a fixed rate and approximately 99.7% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors.

As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”:

Internal Risk Ratings Definitions

Rating Definition 1 Performing—Low Risk: Borrower is operating more than 10% ahead of the base case. 2 Performing—Stable Risk: Borrower is operating within 10% of the base case (above or below). This is the initial rating assigned to all new borrowers. 3 Performing—Management Notice: Borrower is operating more than 10% below the base case. A financial covenant default may have occurred, but there is a low risk of payment default. Watch List: Borrower is operating more than 20% below the base case and there is a high risk of 4 covenant default, or it may have already occurred. Payments are current although subject to greater uncertainty, and there is moderate to high risk of payment default. Watch List—Possible Loss: Borrower is operating more than 30% below the base case. At the current 5 level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may have occurred. Loss of principal is possible. Watch List—Probable Loss: Borrower is operating more than 40% below the base case, and at the current level of operations and financial condition, the borrower does not have the ability to service and 6 ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may have already occurred. Additionally, the prospects for improvement in the borrower’s situation are sufficiently negative that impairment of some or all principal is probable.

Our Investment Adviser’s risk rating model is based on evaluating portfolio company performance in comparison to the base case when considering certain credit metrics including, but not limited to, adjusted EBITDA and net senior leverage as well as specific events including, but not limited to, default and impairment.

Our Investment Adviser monitors and, when appropriate, changes the investment ratings assigned to each debt investment in our portfolio. In connection with our quarterly valuation process, our Investment Adviser reviews our investment ratings on a regular basis. The following table summarizes the Internal Risk Ratings of our debt portfolio as of September 30, 2019 and June 30, 2019:

September 30, 2019 June 30, 2019 % of % of Fair Value Fair Fair Value Fair Value Value ---------- -------- ---------- -------- (dollar amounts in millions) Internal Risk Rating 1 $ 92.5 4.89 % $ 49.7 2.68 % Internal Risk Rating 2 1,402.9 74.12 1,431.2 77.15 Internal Risk Rating 3 184.4 9.74 123.1 6.64 Internal Risk Rating 4 187.6 9.91 197.2 10.63 Internal Risk Rating 5 24.5 1.29 46.3 2.49 Internal Risk Rating 6 1.0 0.05 7.6 0.41 --------- ------ - --------- ------ - Total $ 1,892.9 100.00 % $ 1,855.1 100.00 % - ------- ------ - - ------- ------ -

As of September 30, 2019 and June 30, 2019, the weighted average Internal Risk Rating of our debt investment portfolio was 2.3.

Consolidated Results of Operations(dollar amounts in thousands, except per share data)

Total investment income for the three month periods ended September 30, 2019 and June 30, 2019 was $55,779 and $56,867, respectively. This $1,088 net decrease was due to a decrease in income recognized from the acceleration of OID and prepayment fees from prepayments from our investment portfolio partially offset by an increase in interest income, during the three month period ended September 30, 2019.

Total expenses for the three month periods ended September 30, 2019 and June 30, 2019 were $29,024 and $28,896, respectively. This $128 net increase during the three month period ended September 30, 2019 was primarily attributable to an increase in interest expense as a result of an increase in average outstanding borrowings, partially offset by lower incentive fees.

During the three month period ended September 30, 2019, the Company recorded a net realized loss and change in unrealized depreciation of $35,744. This was primarily driven by changes in various inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, market spreads, leverage multiples and borrower ratings, and the impact of exits.

Liquidity and Capital Resources(dollar amounts in thousands, except per share data)

As of September 30, 2019, the Company had cash and cash equivalents of $70,281, notes payable (before debt issuance costs) of $449,200, and secured borrowings outstanding of $756,511. As of September 30, 2019, the Company had $236,489 of remaining unfunded commitments and $111,455 available for additional borrowings under its revolving credit facilities, subject to leverage and borrowing base restrictions.

Dividend

On November 4, 2019, the Board of Directors declared a quarterly dividend of $0.37, which is payable on January 17, 2020 to stockholders of record on December 31, 2019.

Conference Call

The Company will host a conference call at 8:30 a.m. EST on Wednesday, November 6, 2019 to discuss these quarterly financial results. The call and webcast will be available on the TCG BDC website at tcgbdc.com. The call may be accessed by dialing +1 (866) 394-4623 (U.S.) or +1 (409) 350-3158 (international) and referencing “TCG BDC Financial Results Call.” The conference call will be webcast simultaneously via a link on TCG BDC’s website and an archived replay of the webcast also will be available on the website soon after the live call for 21 days.

TCG BDC, INC. CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (dollar amounts in thousands, except per share data) September 30, June 30, 2019 2019 ------------- ------------- (unaudited) (unaudited) ASSETS Investments, at fair value Investments—non-controlled/non-affiliated, at fair value (amortized cost of $ 1,893,216 $ 1,840,979 $1,986,926 and $1,912,346, respectively) Investments—non-controlled/affiliated, at fair value (amortized cost of $0 and 6,607 20,925 $14,270, respectively) Investments—controlled/affiliated, at fair value (amortized cost of $241,705 and 226,865 213,710 $225,701, respectively) ----------- - ----------- - Total investments, at fair value (amortized cost of $2,228,631 and $2,152,317, 2,126,688 2,075,614 respectively) Cash and cash equivalents 70,281 62,324 Receivable for investment sold 5,725 14,854 Deferred financing costs 4,687 4,869 Interest receivable from non-controlled/non-affiliated investments 11,561 8,289 Interest receivable from non-controlled/affiliated investments — 11 Interest and dividend receivable from controlled/affiliated investments 6,951 6,652 Prepaid expenses and other assets 97 143 ----------- - ----------- - Total assets $ 2,225,990 $ 2,172,756 - --------- - - --------- - LIABILITIES Secured borrowings $ 756,511 $ 649,397 Notes payable, net of unamortized debt issuance costs of $2,972 and $3,034, 446,228 446,166 respectively Payable for investments purchased 11 — Due to Investment Adviser 142 228 Interest and credit facility fees payable 7,680 7,563 Dividend payable 21,825 27,082 Base management and incentive fees payable 13,726 13,846 Administrative service fees payable 66 128 Other accrued expenses and liabilities 1,200 1,754 ----------- - ----------- - Total liabilities 1,247,389 1,146,164 ----------- - ----------- - NET ASSETS Common stock, $0.01 par value; 200,000,000 shares authorized; 59,013,476 and 60,181,859 shares issued and outstanding at September 30, 2019 and June 30, 2019, 590 602 respectively Paid-in capital in excess of par value 1,126,845 1,144,000 Offering costs (1,633 ) (1,633 ) Total distributable earnings (loss) (147,201 ) (116,377 ) Total net assets $ 978,601 $ 1,026,592 - --------- - - --------- - NET ASSETS PER SHARE $ 16.58 $ 17.06 - --------- - - --------- -

TCG BDC, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (dollar amounts in thousands, except per share data) (unaudited) For the three month periods ended September June 30, 30, 2019 2019 ---------- ---------- Investment income: From non-controlled/non-affiliated investments: Interest income $ 47,118 $ 47,224 Other income 1,756 2,266 Total investment income from non-controlled/non-affiliated investments 48,874 49,490 From non-controlled/affiliated investments: Interest income 446 384 Total investment income from non-controlled/affiliated investments 446 384 From controlled/affiliated investments: Interest income 2,459 3,243 Dividend income 4,000 3,750 -------- - -------- - Total investment income from controlled/affiliated investments 6,459 6,993 -------- - -------- - Total investment income 55,779 56,867 -------- - -------- - Expenses: Base management fees 8,016 7,913 Incentive fees 5,710 5,933 Professional fees 534 600 Administrative service fees 61 165 Interest expense 13,538 13,032 Credit facility fees 545 671 Directors’ fees and expenses 88 88 Other general and administrative 483 434 -------- - -------- - Total expenses 28,975 28,836 Net investment income (loss) before taxes 26,804 28,031 Excise tax expense 49 60 Net investment income (loss) 26,755 27,971 -------- - -------- - Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments: Net realized gain (loss) from: Non-controlled/non-affiliated investments (10,909 ) 1,410 Controlled/affiliated investments — (9,091 ) Net change in unrealized appreciation (depreciation) on investments: Non-controlled/non-affiliated (22,343 ) (14,204 ) Non-controlled/affiliated (48 ) (345 ) Controlled/affiliated (2,850 ) 4,016 Net change in unrealized currency gains (losses) on non-investment assets and 406 — liabilities -------- - -------- - Net realized gain (loss) and net change in unrealized appreciation (depreciation) (35,744 ) (18,214 ) -------- - -------- - Net increase (decrease) in net assets resulting from operations $ (8,989 ) $ 9,757 - ------ - - ------ - Basic and diluted earnings per common share $ (0.15 ) $ 0.16 - ------ - - ------ - Weighted-average shares of common stock outstanding—Basic and Diluted 59,587,94 60,596,40 1 2 -------- - -------- -

About TCG BDC, Inc. TCG BDC is an externally managed specialty finance company focused on lending to middle-market companies. TCG BDC is managed by Carlyle Global Credit Investment Management L.L.C., an SEC-registered investment adviser and a wholly owned subsidiary of The Carlyle Group L.P. Since it commenced investment operations in May 2013 through September 30, 2019, TCG BDC has invested approximately $5.3 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. TCG BDC’s investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies. TCG BDC has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended.

Web: tcgbdc.com CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This press release may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. There may be events in the future, however, that we are not able to predict accurately or control. You should not place undue reliance on these forward-looking statements, which speak only as of the date on which we make it. Factors or events that could cause our actual results to differ, possibly materially from our expectations, include, but are not limited to, the risks, uncertainties and other factors we identify in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in filings we make with the Securities and Exchange Commission, and it is not possible for us to predict or identify all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contacts:

Investors: Media: Daniel Harris Lindsey Lennon +1-212-813-4527 +1-202-729-5038 daniel.harris@carlyle.com lindsey.lennon@carlyle.com