Q2 2026 WhiteHorse Finance Inc Earnings Call Transcript
Key Points
- NAV per share increased 2.6% to $11.77, driven by unrealized gains and accretive share repurchases.
- Portfolio marks turned net positive, led by a $4.8 million markup on Chase Products, reflecting strong operational turnaround.
- Share repurchases during the quarter were accretive to NAV by over $0.06 per share, with cumulative accretion of $0.33 per share since inception.
- The adviser extended the temporary incentive fee waiver to 17.5% for Q3 2026, supporting distributable earnings.
- New originations are benefiting from improved market conditions, including lower leverage (average 4.2x EBITDA) and higher pricing (SOFR + 475-550 bps), with better documentation and covenant protection.
- The STRS JV continues to be accretive, generating a low-teens return on equity and providing a complementary capital deployment platform.
- Core NII declined to $0.217 per share from $0.253 in Q1, reflecting a smaller average portfolio and the Outward Hound nonaccrual.
- NII fell short of the quarterly distribution rate, requiring a partial offset from NAV.
- Nonaccrual investments remain elevated at 3.6% of the debt portfolio at fair value, with four issuers on nonaccrual.
- Share repurchases were paused in late May due to leverage constraints, limiting NAV accretion potential.
- The BDC has limited balance sheet capacity for new investments, with only approximately $10 million available, and the STRS JV is fully utilized.
- The company faces upcoming debt maturities of $85 million in December 2026, requiring refinancing or cash management.
Please stand by your meeting is about to begin. Good afternoon, everyone. My name is Bo, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance second quarter 2026 earnings conference call. Our host for today's call are Mr. Stuart Aronson, Chief Executive Officer; and Mr. Joyson Thomas, Chief Financial Officer.
Today's call is being recorded, and a replay is available through a webcast in the Investor Relations section of our website at whitehorsefinance.com. (Operator Instructions) It is now my pleasure to turn the call over to Mr. Robert Brinberg of Rose & Company. Please go ahead, sir.
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Thank you, Bo, and thank you, everyone, for joining us today to discuss WhiteHorse Finance's second quarter 2026 earnings results. Before we begin, I'd 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
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