BlackRock Kelso Capital Corp. (BKCC, Financial) filed Quarterly Report for the period ended 2009-09-30.
BlackRock Kelso Capital Corporation provides responsive creative and flexible capital solutions to middle-market companies. BlackRock Kelso Capital provides middle-market companies with flexible financing solutions including senior and junior secured unsecured and subordinated debt securities and loans and equity securities. The Companies strategy is to provide capital to meet our clients' current and future needs across this spectrum creating long-term partnerships with growing middle-market companies. Blackrock Kelso Capital Corp. has a market cap of $423.2 million; its shares were traded at around $7.51 with a P/E ratio of 4.2 and P/S ratio of 3. The dividend yield of Blackrock Kelso Capital Corp. stocks is 8.5%.
interest expense and fees related to the Credit Facility, $341,872 and $283,301 in Advisor expenses, $342,878 and $622,532 in professional fees, $174,490 and $261,744 in administrative services, $172,031 and $149,068 in amortization of debt issuance costs, $152,181 and $119,781 in insurance expenses, $84,083 and $82,450 in director fees and $298,190 and $191,941 in other expenses, respectively. The decrease in base management fees for the three months ended September 30, 2009 reflects a decline in the quarterly portfolio values on which the fees are paid (in arrears). The decrease in interest expense and fees related to the Credit Facility is mainly a result of reduced borrowing costs from lower prevailing levels of LIBOR. Other general and administrative expenses were generally lower due to the reduced level of new investment originations.
Investment income totaled $94,610,414 and $108,014,165, respectively, for the nine months ended September 30, 2009 and 2008, of which $52,118,041 and $66,658,468 were attributable to interest and fees on senior secured loans, $40,338,190 and $39,012,023 to interest earned on other debt securities, $2,143,158 and $2,251,933 to dividends from preferred equity securities, $11,025 and $73,303 to interest earned on short-term investments and cash equivalents, and zero and $18,438 to other income, respectively. The decrease in investment income primarily reflects the impact of lower levels of LIBOR on interest income from our floating rate debt investments, which generally bear interest based on LIBOR. Three-month LIBOR averaged 0.83% during the nine months ended September 30, 2009, compared to 2.98% during the nine months ended September 30, 2008.
Expenses for the nine months ended September 30, 2009 and 2008 were $23,542,048 and $35,954,687, respectively, which consisted of $13,951,061 and $16,991,573 in base management fees, $5,004,980 and $13,818,524 in interest expense and fees related to the Credit Facility, $1,028,939 and $822,150 in Advisor expenses, $949,444 and $1,461,003 in professional fees, $605,525 and $867,177 in administrative services, $511,520 and $482,493 in amortization of debt issuance costs, $413,406 and $396,217 in insurance expenses, $268,238 and $275,185 in director fees and $808,935 and $840,365 in other expenses, respectively. The decrease in base management fees for the nine months ended September 30, 2009 reflects a decline in the quarterly portfolio values on which the fees are paid (in arrears). The decrease in interest expense and fees related to the Credit Facility is mainly a result of reduced borrowing costs from lower prevailing levels of LIBOR. Other general and administrative expenses were generally lower due to the reduced level of new investment originations.
For the nine months ended September 30, 2009 and 2008, the change in net unrealized appreciation or depreciation was an increase in net unrealized appreciation of $44,682,650 and $(117,183,448), respectively. The increase in net unrealized appreciation for the nine months ended September 30, 2009 was comprised of net unrealized appreciation on investments of $44,771,174 and net unrealized depreciation on foreign currency translation of $(88,524). The net unrealized appreciation on investments for the nine months ended September 30, 2009 includes $57,668,438 relating to the reversal of prior period net unrealized depreciation as a result of investment restructurings and dispositions. The net unrealized appreciation for the nine months ended September 30, 2009 was primarily a result of the reversals described above and improved capital market conditions. The valuations of our investments were favorably impacted by market-wide decreases in interest yields, as well as increases in multiples used to estimate the fair value of some of our investments. Market-wide movements and trading multiples are not necessarily indicative of any fundamental change in the condition or prospects of our portfolio companies. The increase in net unrealized depreciation for the nine months ended September 30, 2008 was comprised of net unrealized depreciation on investments of $(120,901,578) and net unrealized appreciation on foreign currency translation of $3,718,130.
On December 28, 2007, we amended and restated our senior secured, multi-currency Credit Facility to provide us with $600,000,000 in total availability, consisting of $455,000,000 in revolving loan commitments and $145,000,000 in term loan commitments. Total availability and revolving commitments reverted to $545,000,000 and $400,000,000, respectively, on April 14, 2008. Subject to certain conditions, we have the ability in the future to seek additional commitments from new and existing lenders up to an aggregate amount not to exceed $1,000,000,000 with respect to revolving loans and $395,000,000 with respect to term loans. The interest rate applicable to borrowings under the Credit Facility is generally LIBOR plus 87.5 basis points with respect to revolving loans and LIBOR plus 150 basis points with respect to term loans. The term loans have been fully drawn and mature on December 6, 2010, the termination date of the Credit Facility, and term loans, once repaid, may not be reborrowed. The Credit Facility is secured by substantially all of the assets in our portfolio, including cash and cash equivalents. At September 30, 2009, we had $347,500,000 drawn and outstanding under the Credit Facility, with $197,500,000 available to us, subject to compliance with customary affirmative and negative covenants, including the maintenance of a minimum stockholders equity, the maintenance of a ratio of not less than 200% of total assets (less total liabilities other than indebtedness) to total indebtedness, and restrictions on certain payments and issuance of debt.
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BlackRock Kelso Capital Corporation provides responsive creative and flexible capital solutions to middle-market companies. BlackRock Kelso Capital provides middle-market companies with flexible financing solutions including senior and junior secured unsecured and subordinated debt securities and loans and equity securities. The Companies strategy is to provide capital to meet our clients' current and future needs across this spectrum creating long-term partnerships with growing middle-market companies. Blackrock Kelso Capital Corp. has a market cap of $423.2 million; its shares were traded at around $7.51 with a P/E ratio of 4.2 and P/S ratio of 3. The dividend yield of Blackrock Kelso Capital Corp. stocks is 8.5%.
Highlight of Business Operations:
Investment income totaled $29,359,486 and $37,445,712, respectively, for the three months ended September 30, 2009 and 2008, of which $15,097,494 and $22,696,445 were attributable to interest and fees on senior secured loans, $13,529,859 and $13,946,741 to interest earned on other debt securities, $730,988 and $730,180 to dividends from preferred equity securities, $1,145 and $56,204 to interest earned on short-term investments and cash equivalents, and zero and $16,142 to other income, respectively. The decrease in investment income for the three months ended September 30, 2009 primarily reflects the impact of lower levels of LIBOR on interest income from our floating rate debt investments, which generally bear interest based on LIBOR. Three-month LIBOR averaged 0.41% during the three months ended September 30, 2009, compared to 2.91% during the three months ended September 30, 2008.interest expense and fees related to the Credit Facility, $341,872 and $283,301 in Advisor expenses, $342,878 and $622,532 in professional fees, $174,490 and $261,744 in administrative services, $172,031 and $149,068 in amortization of debt issuance costs, $152,181 and $119,781 in insurance expenses, $84,083 and $82,450 in director fees and $298,190 and $191,941 in other expenses, respectively. The decrease in base management fees for the three months ended September 30, 2009 reflects a decline in the quarterly portfolio values on which the fees are paid (in arrears). The decrease in interest expense and fees related to the Credit Facility is mainly a result of reduced borrowing costs from lower prevailing levels of LIBOR. Other general and administrative expenses were generally lower due to the reduced level of new investment originations.
Investment income totaled $94,610,414 and $108,014,165, respectively, for the nine months ended September 30, 2009 and 2008, of which $52,118,041 and $66,658,468 were attributable to interest and fees on senior secured loans, $40,338,190 and $39,012,023 to interest earned on other debt securities, $2,143,158 and $2,251,933 to dividends from preferred equity securities, $11,025 and $73,303 to interest earned on short-term investments and cash equivalents, and zero and $18,438 to other income, respectively. The decrease in investment income primarily reflects the impact of lower levels of LIBOR on interest income from our floating rate debt investments, which generally bear interest based on LIBOR. Three-month LIBOR averaged 0.83% during the nine months ended September 30, 2009, compared to 2.98% during the nine months ended September 30, 2008.
Expenses for the nine months ended September 30, 2009 and 2008 were $23,542,048 and $35,954,687, respectively, which consisted of $13,951,061 and $16,991,573 in base management fees, $5,004,980 and $13,818,524 in interest expense and fees related to the Credit Facility, $1,028,939 and $822,150 in Advisor expenses, $949,444 and $1,461,003 in professional fees, $605,525 and $867,177 in administrative services, $511,520 and $482,493 in amortization of debt issuance costs, $413,406 and $396,217 in insurance expenses, $268,238 and $275,185 in director fees and $808,935 and $840,365 in other expenses, respectively. The decrease in base management fees for the nine months ended September 30, 2009 reflects a decline in the quarterly portfolio values on which the fees are paid (in arrears). The decrease in interest expense and fees related to the Credit Facility is mainly a result of reduced borrowing costs from lower prevailing levels of LIBOR. Other general and administrative expenses were generally lower due to the reduced level of new investment originations.
For the nine months ended September 30, 2009 and 2008, the change in net unrealized appreciation or depreciation was an increase in net unrealized appreciation of $44,682,650 and $(117,183,448), respectively. The increase in net unrealized appreciation for the nine months ended September 30, 2009 was comprised of net unrealized appreciation on investments of $44,771,174 and net unrealized depreciation on foreign currency translation of $(88,524). The net unrealized appreciation on investments for the nine months ended September 30, 2009 includes $57,668,438 relating to the reversal of prior period net unrealized depreciation as a result of investment restructurings and dispositions. The net unrealized appreciation for the nine months ended September 30, 2009 was primarily a result of the reversals described above and improved capital market conditions. The valuations of our investments were favorably impacted by market-wide decreases in interest yields, as well as increases in multiples used to estimate the fair value of some of our investments. Market-wide movements and trading multiples are not necessarily indicative of any fundamental change in the condition or prospects of our portfolio companies. The increase in net unrealized depreciation for the nine months ended September 30, 2008 was comprised of net unrealized depreciation on investments of $(120,901,578) and net unrealized appreciation on foreign currency translation of $3,718,130.
On December 28, 2007, we amended and restated our senior secured, multi-currency Credit Facility to provide us with $600,000,000 in total availability, consisting of $455,000,000 in revolving loan commitments and $145,000,000 in term loan commitments. Total availability and revolving commitments reverted to $545,000,000 and $400,000,000, respectively, on April 14, 2008. Subject to certain conditions, we have the ability in the future to seek additional commitments from new and existing lenders up to an aggregate amount not to exceed $1,000,000,000 with respect to revolving loans and $395,000,000 with respect to term loans. The interest rate applicable to borrowings under the Credit Facility is generally LIBOR plus 87.5 basis points with respect to revolving loans and LIBOR plus 150 basis points with respect to term loans. The term loans have been fully drawn and mature on December 6, 2010, the termination date of the Credit Facility, and term loans, once repaid, may not be reborrowed. The Credit Facility is secured by substantially all of the assets in our portfolio, including cash and cash equivalents. At September 30, 2009, we had $347,500,000 drawn and outstanding under the Credit Facility, with $197,500,000 available to us, subject to compliance with customary affirmative and negative covenants, including the maintenance of a minimum stockholders equity, the maintenance of a ratio of not less than 200% of total assets (less total liabilities other than indebtedness) to total indebtedness, and restrictions on certain payments and issuance of debt.
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