Record Investment Portfolio Level of $400 Million With Net
Increase in Net Assets of $0.45 Per Share in Q1 2018
Declares Second Quarter 2018 Distribution of $0.36 per Share
MENLO PARK, Calif.--(BUSINESS WIRE)--
TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the “Company,”
"TPVG," “we,” “us,” or “our”), the leading financing provider to venture
growth stage companies backed by a select group of venture capital firms
in the technology, life sciences and other high growth industries, today
announced its financial results for the first quarter ended March 31,
2018 and declared a second quarter 2018 distribution of $0.36 per share.
First Quarter 2018 Highlights:
-
Signed $146.0 million of new term sheets and closed $115.0 million of
new debt commitments;
-
Funded $37.9 million in debt investments with a 13.8% weighted average
annualized portfolio yield at origination;
-
Grew investment portfolio to a record level of $401.3 million as of
March 31, 2018;
-
Achieved 14.0% weighted average annualized portfolio yield on debt
investments;
-
Ended the quarter with 0.73x leverage ratio;
-
Earned net investment income of $5.9 million, or $0.34 per share;
-
Net increase in net assets of $7.9 million, or $0.45 per share;
-
Net asset value of $236.5 million, or $13.34 per share, at March 31,
2018;
-
Achieved 13.6% of return on average equity in the first quarter of
2018;
-
Amended and renewed our revolving credit facility increasing funding
capacity to $210 million and reducing undrawn rates and applicable
margin;
-
On March 28, 2018, we received an exemptive order from the SEC to
permit co-investment with TriplePoint Capital LLC (“TPC”) and/or
investment funds, accounts and investment vehicles managed by TPC; and
-
Declared a second quarter distribution of $0.36 per share, payable on
June 15, 2018; bringing total distributions to $6.26 per share since
IPO.
“The first quarter marked the fourth anniversary of our initial public
offering. Our brand, reputation, venture growth stage focus and track
record continue to differentiate us in the market,” said Jim Labe,
Chairman and Chief Executive Officer of TPVG. “We have grown our
investment portfolio to an unprecedented level while prudently
increasing our use of leverage and delivering attractive returns to our
stakeholders.”
“We continue to see strong demand for venture growth stage lending from
high quality venture capital-backed companies,” said Sajal Srivastava,
president and chief investment officer of the Company. “We plan to
capitalize on these opportunities and to continue to grow our franchise
and investment portfolio in 2018.”
Portfolio and Investment Activity:
During the first quarter of 2018, the Company entered into $115.0
million of new debt commitments, funded 8 debt investments totaling
$37.9 million of principal, funded one equity investment totaling $0.3
million and acquired warrant investments valued at $0.6 million. Debt
investments funded during the quarter had a 13.8% of weighted average
annualized portfolio yield at origination. During the quarter, the
Company experienced $3.3 million of early principal prepayments and $5.0
million of scheduled repayments. The weighted average annualized
portfolio yield on debt investments for the first quarter was 14.0%. The
Company calculates weighted average portfolio yield as the annualized
rate of the interest income recognized during the period divided by the
average amortized cost of debt investments in the portfolio at the
beginning of each month in the period.1
As of March 31, 2018, the Company held 66 debt investments with 21
companies and 50 warrant and equity investments with 41 companies. The
total cost and fair value of these investments were $400.8 million and
$401.3 million, respectively. Total portfolio investment activity for
the three months ended March 31, 2018 and 2017 was as follows:
|
|
|
|
For the Three Months Ended March 31,
|
|
|
(in thousands)
|
|
|
2018
|
|
|
2017
|
|
|
Beginning portfolio at fair value
|
|
|
$
|
372,103
|
|
|
$
|
374,311
|
|
|
New debt investments
|
|
|
|
36,968
|
|
|
|
11,762
|
|
|
Scheduled principal payments from debt investments
|
|
|
|
(5,876
|
)
|
|
|
(1,926
|
)
|
|
Early principal payments, repayments and recoveries
|
|
|
|
(8,348
|
)
|
|
|
(53,274
|
)
|
|
Accretion of debt investment fees
|
|
|
|
2,948
|
|
|
|
(1,197
|
)
|
|
Payment-in-kind coupon
|
|
|
|
605
|
|
|
|
317
|
|
|
New warrant investments
|
|
|
|
615
|
|
|
|
157
|
|
|
New equity investments
|
|
|
|
250
|
|
|
|
2,400
|
|
|
Net realized gains (losses) on investments
|
|
|
|
—
|
|
|
|
(1,681
|
)
|
|
Net change in unrealized gains (losses) on investments
|
|
|
|
1,993
|
|
|
|
(2,461
|
)
|
|
Ending portfolio at fair value
|
|
|
$
|
401,258
|
|
|
$
|
328,408
|
|
Signed Term Sheets:
During the first quarter of 2018, TPC entered into $146.0 million of
non-binding term sheets to venture growth stage companies. These
opportunities are subject to underwriting conditions including, but not
limited to, the completion of due diligence, negotiation of definitive
documentation and investment committee approval, as well as compliance
with TPC’s allocation policy. Accordingly, there is no assurance that
any or all of these transactions will be completed or assigned to the
Company, even though the Company is the primary vehicle through which
TPC focuses its venture growth stage business.
Unfunded Commitments:
As of March 31, 2018, the Company’s unfunded commitments totaled $124.4
million, of which $33.0 million is dependent upon portfolio companies
reaching certain milestones. Of the $124.4 million of unfunded
commitments, $71.4 million will expire during 2018, $18.0 million will
expire during 2019 and $35.0 million will expire during 2020, if not
drawn prior to expiration. Since these commitments may expire without
being drawn, unfunded commitments do not necessarily represent future
cash requirements or future earning assets for the Company.
Results of Operations:
For the first quarter of 2018, total investment and other income was
$12.6 million, representing a weighted average annualized portfolio
yield of 14.0%, as compared to $14.3 million and 16.8%, respectively,
for the first quarter of 2017. The decrease in investment income and
yield reflected lower prepayment related income as compared to a year
ago.
Operating expenses for the first quarter of 2018 were $6.7 million as
compared to $6.4 million for the first quarter of 2017. Operating
expenses for the first quarter of 2018 consisted of $2.5 million of
interest expense and amortization of deferred credit facility costs,
$1.5 million of base management fees, $1.5 million of income incentive
fees, $0.4 million of administration agreement expenses and $0.8 million
of general and administrative expenses. Operating expenses for the first
quarter of 2017 consisted of $2.4 million of interest expense and
amortization of deferred credit facility costs, $1.6 million of base
management fees, $1.5 million of income incentive fees, $0.4 million of
administration agreement expenses and $0.5 million of general and
administrative expenses.
For the first quarter of 2018, the Company recorded net investment
income of $5.9 million, or $0.34 per share, as compared to $7.9 million,
or $0.50 per share for the first quarter of 2017. The decrease largely
reflects lower income from prepayment activity in the first quarter of
2018 as compared to the first quarter of 2017.
During the first quarter of 2018, the Company recorded $8 thousand of
net realized gains, or $0.00 per share, compared to net realized losses
of $1.7 million, or $(0.11) per share, for the first quarter of 2017.
Net unrealized gains for the first quarter of 2018 were $2.0 million, or
$0.11 per share. This compares to net unrealized losses of $2.5 million,
or $(0.15) per share, for the first quarter of 2017.
The Company’s net increase in net assets resulting from operations for
the first quarter of 2018 was approximately $7.9 million, or $0.45 per
share, as compared to approximately $3.8 million, or $0.24 per share,
for the first quarter of 2017.
Credit Quality:
The Company maintains a credit watch list with borrowers placed into one
of five categories, with Clear, or 1, being the highest rating and Red,
or 5, being the lowest. All new loans are initially assigned a rating of
White, or 2. As of March 31, 2018, the weighted average investment
ranking of the Company’s debt investment portfolio was 2.03, as compared
to 2.02 at the end of the prior quarter. Additional information
regarding our credit rating methodology is detailed in our Form 10-Q for
the three months ended March 31, 2018.
The following table shows the credit rankings for the Company’s debt
investments at fair value as of March 31, 2018 and as of December 31,
2017.
|
|
|
As of March 31, 2018
|
|
|
As of December 31, 2017
|
|
Category (dollars in thousands)
|
|
Fair Value
|
|
|
% of Debt Investment
Portfolio
|
|
|
# of Portfolio Companies
|
|
|
Fair Value
|
|
|
% of Debt Investment
Portfolio
|
|
|
# of Portfolio Companies
|
|
Clear (1)
|
|
$
|
50,901
|
|
|
|
13.4
|
|
%
|
|
3
|
|
|
$
|
54,071
|
|
|
|
15.4
|
|
%
|
|
3
|
|
White (2)
|
|
|
274,901
|
|
|
|
72.3
|
|
|
|
14
|
|
|
|
243,915
|
|
|
|
69.3
|
|
|
|
12
|
|
Yellow (3)
|
|
|
46,368
|
|
|
|
12.2
|
|
|
|
3
|
|
|
|
46,187
|
|
|
|
13.1
|
|
|
|
3
|
|
Orange (4)
|
|
|
8,136
|
|
|
|
2.1
|
|
|
|
1
|
|
|
|
7,879
|
|
|
|
2.2
|
|
|
|
1
|
|
Red (5)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
$
|
380,306
|
|
|
|
100.0
|
|
%
|
|
21
|
|
|
$
|
352,052
|
|
|
|
100.0
|
|
%
|
|
19
|
Net Asset Value:
As of March 31, 2018, the Company’s net assets were $236.5 million, or
$13.34 per share, as compared to $234.9 million, or $13.25 per share, as
of December 31, 2017.
Liquidity and Capital Resources:
As of March 31, 2018, the Company had total cash of $18.3 million, with
available capacity of $113.0 million under its revolving credit facility.
Distribution:
The Company’s board of directors declared a quarterly distribution of
$0.36 per share for the second quarter of 2018 payable on June 15, 2018,
to stockholders of record as of May 31, 2018.
Subsequent Events:
Since March 31, 2018:
-
The Company closed $70.3 million of additional debt commitments;
-
The Company funded $16.0 million in new investments;
-
TPC’s direct originations platform entered into $80.5 million of
additional non-binding signed term sheets with venture growth stage
companies;
-
Ring, Inc., closed its sale to Amazon and paid off its $50.0 million
of outstanding debt; and
-
On April 24, 2018, the Company’s board of directors unanimously
approved the application of the modified asset coverage requirements
set forth in Section 61(a)(2) of the Investment Company Act of 1940,
as amended by the Small Business Credit Availability Act (the “SBCA”).
As a result, the Company’s asset coverage requirements for senior
securities will be changed from 200% to 150%, effective April 24,
2019. On May 2, 2018, the Company’s board of directors also
recommended the submission of a proposal for stockholders to vote in
favor of the Company to immediately become subject to a minimum asset
coverage ratio of at least 150%, permitting the Company to double its
amount of debt incurrence earlier than the current effective date of
April 24, 2019, pursuant to the SBCA. If this proposal is approved by
stockholders at a special stockholder meeting, the Company would
become subject to an asset coverage ratio of at least 150% the day
after such meeting instead of on April 24, 2019.
Conference Call:
The Company will host a conference call at 5:00 p.m. Eastern time today,
May 2, 2018, to discuss its financial results for the first quarter
ended March 31, 2018. To listen to the call, investors and analysts
should dial 1 (844) 826-3038 (domestic) or 1 (412) 317-5184
(international) and ask to join the TriplePoint Venture Growth BDC Corp.
call. Please dial in at least five minutes before the scheduled start
time. A replay of the call will be available through June 2, 2018, by
dialing 1 (877) 344-7529 (domestic) or 1 (412) 317-0088 (international)
and entering conference ID 10119662. The conference call also will be
available via a live audio webcast in the investor relations section of
the Company’s website, http://www.tpvg.com.
An online archive of the webcast will be available on the Company’s
website for 30 days after the call.
About TriplePoint Venture Growth BDC Corp.
The Company serves as the primary financing source for the venture
growth stage business segment of TriplePoint Capital LLC, the leading
global provider of financing across all stages of development to
technology, life sciences and other high growth companies backed by a
select group of venture capital firms. The Company’s investment
objective is to maximize its total return to stockholders primarily in
the form of current income and, to a lesser extent, capital appreciation
by primarily lending with warrants to venture growth stage companies.
The Company is an externally managed, closed-end, non-diversified
management investment company that has elected to be regulated as a
business development company under the Investment Company Act of 1940,
as amended. More information is available at http://www.tpvg.com.
Forward-Looking Statements
Certain statements contained in this press release constitute
forward-looking statements. Forward-looking statements are not
guarantees of future performance, condition or results and involve a
number of substantial risks and uncertainties, many of which are
difficult to predict and are generally beyond the Company's control.
Words such as "anticipates," "expects," "intends," "plans," "will,"
"may," "continue," "believes," "seeks," "estimates," "would," "could,"
"should," "targets," "projects," and variations of these words and
similar expressions are intended to identify forward-looking statements.
Actual results may differ materially from those in the forward-looking
statements as a result of a number of factors, including those described
from time to time in the Company’s filings with the Securities and
Exchange Commission. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be required
by law.
|
|
|
|
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
|
December 31, 2017
|
|
|
Assets
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
Investments at fair value (amortized cost of $400,832 and $373,669,
respectively)
|
|
|
|
$
|
401,258
|
|
|
$
|
372,103
|
|
|
Short-term investments at fair value (cost of $124,911 and $124,909,
respectively)
|
|
|
|
|
124,911
|
|
|
|
124,909
|
|
|
Cash
|
|
|
|
|
7,840
|
|
|
|
4,484
|
|
|
Restricted cash
|
|
|
|
|
10,480
|
|
|
|
5,522
|
|
|
Deferred credit facility costs and other assets
|
|
|
|
|
5,236
|
|
|
|
3,266
|
|
|
Total assets
|
|
|
|
$
|
549,725
|
|
|
$
|
510,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Revolving credit facility payable
|
|
|
|
$
|
97,000
|
|
|
$
|
67,000
|
|
|
2022 Notes, net
|
|
|
|
|
72,560
|
|
|
|
72,433
|
|
|
Payable for U.S. Treasury bill assets
|
|
|
|
|
124,911
|
|
|
|
124,909
|
|
|
Other payables, accrued expenses, and liabilities
|
|
|
|
|
18,749
|
|
|
|
10,997
|
|
|
Total liabilities
|
|
|
|
$
|
313,220
|
|
|
$
|
275,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.01 per share (50,000 shares
authorized; no shares issued and outstanding, respectively)
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Common stock, par value $0.01 per share (450,000 shares authorized;
17,730 and 17,730 shares issued and outstanding, respectively)
|
|
|
|
|
177
|
|
|
|
177
|
|
|
Paid-in capital in excess of par value
|
|
|
|
|
235,488
|
|
|
|
235,488
|
|
|
Undistributed net investment income
|
|
|
|
|
540
|
|
|
|
976
|
|
|
Accumulated net realized (losses)
|
|
|
|
|
(120
|
)
|
|
|
(128
|
)
|
|
Accumulated net unrealized gains (losses) on investments
|
|
|
|
|
420
|
|
|
|
(1,568
|
)
|
|
Total net assets
|
|
|
|
$
|
236,505
|
|
|
$
|
234,945
|
|
|
Total liabilities and net assets
|
|
|
|
$
|
549,725
|
|
|
$
|
510,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per share
|
|
|
|
$
|
13.34
|
|
|
$
|
13.25
|
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Investment income
|
|
|
|
|
|
|
|
|
|
Interest income from investments
|
|
$
|
12,616
|
|
|
$
|
14,252
|
|
|
Other income
|
|
|
3
|
|
|
|
52
|
|
|
Total investment and other income
|
|
|
12,619
|
|
|
|
14,304
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Base management fee
|
|
|
1,528
|
|
|
|
1,572
|
|
|
Income incentive fee
|
|
|
1,487
|
|
|
|
1,473
|
|
|
Capital gains incentive fee
|
|
|
—
|
|
|
|
—
|
|
|
Interest expense and amortization of fees
|
|
|
2,518
|
|
|
|
2,405
|
|
|
Administration agreement expenses
|
|
|
407
|
|
|
|
374
|
|
|
General and administrative expenses
|
|
|
732
|
|
|
|
561
|
|
|
Total operating expenses
|
|
|
6,672
|
|
|
|
6,385
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
5,947
|
|
|
|
7,919
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gains (losses)
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses) on investments
|
|
|
8
|
|
|
|
(1,681
|
)
|
|
Net change in unrealized gains (losses) on investments
|
|
|
1,988
|
|
|
|
(2,461
|
)
|
|
Net realized and unrealized gains (losses)
|
|
|
1,996
|
|
|
|
(4,142
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
$
|
7,943
|
|
|
$
|
3,777
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net investment income per share
|
|
$
|
0.34
|
|
|
$
|
0.50
|
|
|
Basic and diluted net increase in net assets per share
|
|
$
|
0.45
|
|
|
$
|
0.24
|
|
|
Basic and diluted weighted average shares of common stock outstanding
|
|
|
17,730
|
|
|
|
15,981
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE PORTFOLIO YIELD ON DEBT INVESTMENTS
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average portfolio yield on debt investments
|
|
|
14.0
|
%
|
|
|
16.8
|
%
|
|
Coupon income
|
|
|
10.5
|
%
|
|
|
10.1
|
%
|
|
Net amortization and accretion of premiums and discounts
|
|
|
0.9
|
%
|
|
|
0.7
|
%
|
|
Net accretion of end-of-term payments
|
|
|
2.2
|
%
|
|
|
1.7
|
%
|
|
Impact of prepayments
|
|
|
0.4
|
%
|
|
|
4.3
|
%
|
Weighted average portfolio yield on debt investments for periods shown
are the annualized rate of the interest income recognized during the
period divided by the average amortized cost of debt investments in the
portfolio at the beginning of each month in the period.
1 The Company’s weighted average annualized portfolio yield
on debt investments may be higher than an investor’s yield on an
investment in shares of its common stock. The weighted average
annualized portfolio yield on debt investments does not reflect
operating expenses that may be incurred by the Company. In addition, the
Company’s weighted average annualized portfolio yield on debt
investments disclosed above does not consider the effect of any sales
commissions or charges that may be incurred in connection with the sale
of shares of its common stock.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180502006655/en/
Source: TriplePoint Venture Growth BDC Corp.