Net Investment Income of
Net Asset Value up 2%
100% Performing Portfolio
At
The Company’s Board of Directors declared a monthly distribution for
HIGHLIGHTS:
At
Number of portfolio companies*: 206
Net assets:
Net asset value per share:
Net Debt to Equity: 0.52x
Available Capital**: Over
Comprehensive Portfolio Activity*** for the Quarter Ended
Investments made during the quarter:
Investments repaid or sold during the quarter:
Operating Results for the Quarter Ended
Net investment income:
Net investment income per share:
Net realized and unrealized gain:
Net increase in net assets from operations:
Earnings per share:
* The Comprehensive Investment Portfolio is comprised of Solar Senior Capital Ltd.’s investment portfolio, Gemino Healthcare Finance’s (“Gemino”) full portfolio and North Mill Holdco LLC’s (“North Mill”) full portfolio, and excludes the Company’s fair value of its equity interest in Gemino and
** See Liquidity and Capital Resources
*** Comprehensive Portfolio Activity includes gross originations/repayments through Gemino and
“SUNS portfolio continued to perform extremely well in Q3 reflecting our focus on first lien senior secured cash flow loans and asset-based loans in our niche specialty finance verticals,” said
“The conservative management of SUNS assets and liabilities through an extended period of frothy credit markets has positioned the company with a solid portfolio foundation, a stable funding profile, low leverage, strong liquidity, and favorable positioning to make new investments,” said
Conference Call and Webcast
The Company will host an earnings conference call and audio webcast at
Comprehensive Investment Portfolio
Investment Activity
During the quarter ended
The investment activity of our Comprehensive Investment Portfolio for the quarter ended
Comprehensive Investment Portfolio Activity(1) Q3 2020 (in millions) | ||||||||||
Asset Classes | Cash Flow Loans | Asset-Based Loans | Asset-Based Healthcare Loans Gemino | Life Science | Total Portfolio Activity | |||||
Originations | ||||||||||
Repayments / Amortization | ||||||||||
Net Portfolio Activity | $(31.7) | $20.3 | $(4.3) | $0.2 | $(15.5) |
(1) Portfolio activity includes gross originations/repayments across each business unit.
Portfolio Composition
Our Comprehensive Investment Portfolio composition by business unit at
Comprehensive Investment Portfolio Composition (at fair value) | Amount | Weighted Average Asset-level Yield | |
($mm) | % | ||
First Lien Senior Secured Loans | |||
Cash Flow 1st Lien Senior Secured Loans | 49.8% | 6.5%5 | |
Traditional Asset-Based 1st Lien Senior Secured Loans(1) ( | 29.7% | 12.9%6 | |
Healthcare Asset-Based 1st Lien Senior Secured Loans(2) (Gemino) | 13.6% | 12.5%6 | |
Life Science 1st Lien Senior Secured Loans | 5.3% | 9.3%7 | |
Total First Lien Senior Secured Loans | 98.4% | ||
Cash Flow 2nd Lien Senior Secured Loans | 1.5% | 7.5%5 | |
Total Senior Secured Loans | >99.9% | 9.4% | |
<0.1% | |||
Total Comprehensive Investment Portfolio | 100.0% | ||
Floating Rate Investments(4) | 96.2% |
- Includes North Mill’s full portfolio, all of which are 1st lien senior secured loans.
- Includes Gemino’s full portfolio, all of which are 1st lien senior secured loans.
- Excludes the Company’s equity investments in
North Mill and Gemino, which distribute quarterly dividends to the Company. - Floating rate investments calculated as a percent of the Company’s income-producing Comprehensive Investment Portfolio.
- Represents the yield to maturity based on fair market value at
September 30, 2020 . - Represents total interest and fee income for the three month period ending on
September 30, 2020 against the average portfolio over the same fiscal period, annualized. - Represents the weighted average of each individual loan’s yield to maturity based on fair value at
September 30, 2020 (excluding exit fees or warrants).
The Comprehensive Investment Portfolio is diversified across approximately 206 unique borrowers in over 120 industries. The average issuer exposure is
As of
The weighted average yield at fair value of all income-producing investments in the Comprehensive Portfolio was 9.4% at
Asset Quality
At
The Company puts its greatest emphasis on risk mitigation and credit performance. On a quarterly basis, or more frequently if deemed necessary, the Company formally rates each portfolio investment on a scale of one to four, with one representing the least amount of risk.
As of
Internal Investment Rating | Investments at Fair Value ($mm) | % of SUNS Portfolio | |
1 | 13.2% | ||
2 | 82.1% | ||
3 | 4.7% | ||
4 | 0.0% |
Investment Income Contribution by Business Unit
Business Unit Contribution to Gross Investment Income Q3 2020(1) (in millions) | |||||
For the Quarter Ended: | Cash Flow Lending | Asset-based Lending ( | Asset-based Healthcare Lending (Gemino) | Life Science | Total |
% Contribution | 63.3% | 16.4% | 11.4% | 8.9% | 100.0% |
(1) Investment Income Contribution by Business Unit includes interest income/fees from cash flow and life science loans on balance sheet and distributions from
Solar Senior Capital Ltd.’s Results of Operations for the Quarter Ended
Investment Income
For the quarters ended
Expenses
Net expenses totaled
Net Investment Income
The Company’s net investment income totaled
Net Realized and Unrealized Gain (Loss)
Net realized and unrealized gain (loss) for the quarters ended
Net Increase in Net Assets Resulting from Operations
For the quarters ended
Liquidity and Capital Resources
Unsecured Debt
At
At
Leverage
As of
Unfunded Revolver Commitments
As of
Financial Statements
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share amounts)
Assets | ||||||
Investments at fair value: | ||||||
Companies less than 5% owned (cost: | $ | 295,613 | $ | 361,665 | ||
Companies more than 25% owned (cost: | 93,867 | 98,600 | ||||
Cash | 6,306 | 7,054 | ||||
Cash equivalents (cost: | 164,987 | 99,898 | ||||
Interest receivable | 1,319 | 1,933 | ||||
Dividends receivable | 1,753 | 1,893 | ||||
Receivable for investments sold | 36 | 6,667 | ||||
Prepaid expenses and other assets | 253 | 248 | ||||
Total assets | $ | 564,134 | $ | 577,958 | ||
Liabilities | ||||||
Debt ( | $ | 137,198 | $ | 209,301 | ||
Payable for investments and cash equivalents purchased | 170,028 | 101,811 | ||||
Distributions payable | 1,605 | 1,885 | ||||
Management fee payable | 314 | 426 | ||||
Interest payable | 524 | 1,172 | ||||
Administrative services payable | 566 | 826 | ||||
Other liabilities and accrued expenses | 537 | 723 | ||||
Total liabilities | $ | 310,772 | $ | 316,144 | ||
Net Assets | ||||||
Common stock, par value | $ | 160 | $ | 160 | ||
Paid-in capital in excess of par | 282,229 | 282,181 | ||||
Accumulated distributable net loss | (29,027 | ) | (20,527 | ) | ||
Total net assets | $ | 253,362 | $ | 261,814 | ||
Net Asset Value Per Share | $ | 15.79 | $ | 16.32 | ||
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except share amounts)
Three months ended | ||||||
| ||||||
INVESTMENT INCOME: | ||||||
Interest: | ||||||
Companies less than 5% owned | $ | 5,428 | $ | 7,829 | ||
Companies 5% to 25% owned | — | 281 | ||||
Dividends: | ||||||
Companies more than 25% owned | 2,125 | 2,265 | ||||
Other income: | ||||||
Companies less than 5% owned | 315 | 21 | ||||
Companies 5% to 25% owned | — | — | ||||
Total investment income | 7,868 | 10,396 | ||||
EXPENSES: | ||||||
Management fees | $ | 1,036 | $ | 1,223 | ||
Performance-based incentive fees | — | 535 | ||||
Interest and other credit facility expenses | 1,927 | 2,764 | ||||
Administrative services expense | 370 | 405 | ||||
Other general and administrative expenses | 442 | 416 | ||||
Total expenses | 3,775 | 5,343 | ||||
Management fees waived | (722) | (67) | ||||
Performance-based incentive fees waived | — | (535) | ||||
Net expenses | 3,053 | 4,741 | ||||
Net investment income | $ | 4,815 | $ | 5,655 | ||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND CASH EQUIVALENTS: | ||||||
Net realized gain (loss) on investments and cash equivalents: | ||||||
Companies less than 5% owned | $ | 37 | $ | (6,973) | ||
Companies 5% to 25% owned | — | 1,979 | ||||
Net realized gain (loss) on investments and cash equivalents. | 37 | (4,994) | ||||
Net change in unrealized gain (loss) on investments and cash equivalents: | ||||||
Companies less than 5% owned | 3,794 | 7,603 | ||||
Companies 5% to 25% owned | — | (1,046) | ||||
Companies more than 25% owned | — | (2,050) | ||||
Net change in unrealized gain (loss) on Investments and cash equivalents | 3,794 | 4,507 | ||||
Net realized and unrealized gain (loss) on investments and cash equivalents | 3,831 | (487) | ||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 8,646 | $ | 5,168 | ||
EARNINGS PER SHARE | $ | 0.54 | $ | 0.32 | ||
About
Solar Senior Capital Ltd. is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. A specialty finance company with expertise in several niche markets, the Company primarily invests directly and indirectly in leveraged, U. S. middle market companies primarily in the form of cash flow first lien senior secured debt instruments and asset-based loans including senior secured loans collateralized on a first lien basis primarily by current assets.
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements,” which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance, financial condition or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in base interest rates and significant market volatility on our business, our portfolio companies and the global economy. 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 our filings with the
Contact
Investor Relations
(646) 308-8770
Source:
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