Q2 2024 WhiteHorse Finance Inc Earnings Call Transcript
Key Points
- WhiteHorse Finance Inc (WHF) reported a GAAP net investment income and core NII of $9.3 million or $0.40 per share, exceeding the quarterly base dividend of $0.385 per share.
- The company maintained a high percentage of first lien, senior secured debt in its portfolio, with 99% of the debt portfolio being first lien.
- The STRS JV continues to be accretive, generating investment income of approximately $3.9 million in Q2, and providing a mid-teens return on equity.
- WhiteHorse Finance Inc (WHF) has approximately $60 million of capacity for new assets on the BDC balance sheet, with additional capacity in the JV.
- The company has a strong origination pipeline with 23 professionals across 11 regional markets, allowing for conservative deal selection and focus on non-sponsor market opportunities.
- Net Asset Value (NAV) per share decreased by 0.4% from the prior quarter, impacted by net markdowns in the portfolio totaling $1.5 million.
- The portfolio experienced elevated repayment activity, resulting in net repayments of $16.1 million, which contributed to a softer quarter.
- Nonaccrual investments increased to 4.2% of the total debt portfolio at fair value, up from 1.3% in Q1, largely due to issues with Honors Holdings.
- The company is facing a challenging market environment with aggressive lending conditions, particularly in the upper mid-cap and large-cap markets.
- There is a noted slowdown in economic activity, with signs of weakening consumer demand and potential for continued refinancing pressure due to low interest spreads.
Good morning. My name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance second-quarter 2024 earnings conference call.
Our hosts for today's call are Stuart Aronson, Chief Executive Officer; and Joyson Thomas, Chief Financial Officer. Today's call is being recorded and will be made available for replay beginning at 4:00 PM Eastern Time. (Operator Instructions)
It is now my pleasure to turn the floor over to Robert Brinberg of Rose & Company. Please go ahead.
Thank you, operator, and thank you, everyone, for joining us today to discuss WhiteHorse Finance's second-quarter 2024 earnings results. Before we begin, I would like to remind everyone that certain statements, which are not based on historical facts made during this call, including any statements relating to financial guidance, may be deemed forward-looking guidance statements within the meaning of the Private Securities Litigation Reform Act of 1995.
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