On August 12, 2024, Crescent Capital BDC Inc (CCAP, Financial) released its 8-K filing for the second quarter of 2024. The company reported net investment income of $0.59 per share, surpassing the analyst estimate of $0.58 per share. Additionally, Crescent Capital BDC Inc declared a third-quarter base dividend of $0.42 per share and a second-quarter supplemental dividend of $0.09 per share.
Company Overview
Crescent Capital BDC Inc is a business development company structured as an externally managed, closed-end, non-diversified management investment company. The company's primary 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. It seeks to achieve its investment objectives by investing in secured debt (including senior secured, unitranche, and second lien debt) and unsecured debt (including senior unsecured, mezzanine, and subordinated debt), as well as related equity securities of private U.S. middle-market companies.
Performance and Challenges
For the quarter ended June 30, 2024, Crescent Capital BDC Inc reported net income of $0.55 per share, with a slight increase in net asset value per share to $20.30 from $20.28 as of March 31, 2024. The company's investment income for the quarter was $48.9 million, compared to $46.7 million in the same period last year. This increase was largely due to net funding activity and an increase in reference rates.
However, the company faced challenges with net realized losses of $4.1 million, primarily due to market volatility and adjustments in the fair value of investments. The net change in unrealized gains was $2.8 million, down from $4.9 million in the previous quarter.
Financial Achievements
Despite the challenges, Crescent Capital BDC Inc achieved significant milestones. The company declared a third-quarter base dividend of $0.42 per share and a second-quarter supplemental dividend of $0.09 per share, reflecting its commitment to returning value to shareholders. The company's total assets increased to $1,672.4 million from $1,620.4 million in the previous quarter, and total net assets rose to $752.4 million from $751.7 million.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Investments, at fair value | $1,610.8 million | $1,563.3 million | $1,581.1 million |
| Total assets | $1,672.4 million | $1,620.4 million | $1,624.6 million |
| Total net assets | $752.4 million | $751.7 million | $725.8 million |
| Net asset value per share | $20.30 | $20.28 | $19.58 |
| Investment income | $48.9 million | $50.4 million | $46.7 million |
| Net investment income | $21.7 million | $23.4 million | $20.6 million |
| Net investment income per share | $0.59 | $0.63 | $0.56 |
Portfolio and Investment Activity
As of June 30, 2024, Crescent Capital BDC Inc had investments in 183 portfolio companies with an aggregate fair value of $1,610.8 million. The portfolio was primarily composed of senior secured first lien and unitranche first lien loans, which together accounted for approximately 89.2% of the total portfolio.
During the quarter, the company invested $119.3 million across six new portfolio companies and several follow-on revolver and delayed draw fundings. It also had $73.4 million in aggregate exits, sales, and repayments.
Liquidity and Capital Resources
As of June 30, 2024, Crescent Capital BDC Inc had $36.1 million in cash and cash equivalents and restricted cash, with $293.8 million of undrawn capacity on its credit facilities. The company's debt to equity ratio stood at 1.18x, and the weighted average cost of debt was 7.26%.
Analysis
Crescent Capital BDC Inc's performance in Q2 2024 demonstrates its resilience and ability to generate income despite market challenges. The company's focus on secured debt investments and its strategic dividend declarations highlight its commitment to delivering value to shareholders. However, the net realized losses and the decrease in unrealized gains indicate potential volatility in the investment portfolio, which investors should monitor closely.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Crescent Capital BDC Inc for further details.
