false 0001578348 0001578348 2024-11-12 2024-11-12

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 12, 2024

 

 

Investcorp Credit Management BDC, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   814-01054   46-2883380

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification Number)

 

280 Park Avenue

39th Floor

New York, NY 10017
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (212) 257-5199

Not Applicable

(Former Name or Former Address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

  

Trading

Symbol(s)

  

Name of Each Exchange

on Which Registered

Common Stock, par value $0.001 per share   ICMB   The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02. Results of Operations and Financial Condition.

On November 12, 2024, Investcorp Credit Management BDC, Inc. (the “Company”) issued a press release announcing its preliminary financial results for the fiscal quarter ended September 30, 2024. The text of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such Section. The information in this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

 

Exhibit

Number

   

Description

99.1    Press Release, dated November 12, 2024
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: November 14, 2024   INVESTCORP CREDIT MANAGEMENT BDC, INC.
    By:  

/s/ Suhail A. Shaikh

   

Name:

Title:

  

Suhail A. Shaikh

President and Chief Executive Officer

Exhibit 99.1

Investcorp Credit Management BDC, Inc. Announces Financial Results for the Quarter Ended

September 30, 2024, and Quarterly Distribution

Investcorp Credit Management BDC, Inc. (NASDAQ: ICMB) (“ICMB” or the “Company”) announced its financial results today for its fiscal quarter ended September 30, 2024.

HIGHLIGHTS

 

  •  

On November 6, 2024, the Company’s Board of Directors (the “Board”) declared a distribution of $0.12 per share for the quarter ending December 31, 2024, payable in cash on January 8, 2025, to stockholders of record as of December 20, 2024.

 

  •  

During the quarter, ICMB made investments in three new portfolio companies and three existing portfolio companies. These investments totaled $13.1 million, at cost, of which $0.5 million represents the reinstatement of previously recorded paydowns for interest received from Klein Hersh, LLC while it was on non-accrual status. The weighted average yield (at origination) of debt investments made in the quarter was 10.73%.

 

  •  

ICMB fully realized its investments in two portfolio companies during the quarter, totaling $13.4 million in proceeds. The internal rate of return on these investments was 11.75%.

 

  •  

During the quarter, the Company had net repayments of $7,500 on its existing delayed draw and revolving credit commitments to portfolio companies.

 

  •  

The weighted average yield on debt investments, at cost, for the quarter ended September 30, 2024, was 10.51%, compared to 12.33% for the quarter ended June 30, 2024.

 

  •  

Net asset value increased $0.34 per share to $5.55, compared to $5.21 as of June 30, 2024. Net assets increased by $4.9 million, or 6.50%, during the quarter ended September 30, 2024 compared to June 30, 2024.

 

Portfolio results, as of and for the three months ended September 30, 2024:   

Total assets

    $ 203.0mm  

Investment portfolio, at fair value

    $ 190.1mm  

Net assets

    $ 79.89mm  

Weighted average yield on debt investments, at cost (1)

      10.51 % 

Net asset value per share

    $ 5.55  

Portfolio activity in the current quarter:

   

Number of investments in new portfolio companies during the period

      3  

Number of portfolio companies invested in, end of period

      45  

Total capital invested in existing portfolio companies (2)

    $ 4.2mm  

Total proceeds from repayments, sales, and amortization (3)

    $ 14.3mm  

Net investment income (NII)

    $ 2.3mm  

Net investment income per share

    $ 0.16  

Net increase in net assets from operations

    $ 6.6mm  

Net increase in net assets from operations per share

    $ 0.46  

Quarterly per share distribution paid on September 30, 2024

    $ 0.12  

 

(1)

Represents weighted average yield on total debt investments for the three months ended September 30, 2024. Weighted average yield on total debt investments is the annualized rate of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The weighted average yield on total debt investments reflected above does not represent actual investment returns to the Company’s stockholders.

(2)

Includes gross advances to existing revolving credit commitments to portfolio companies and PIK interest.

(3)

Includes gross repayments on existing delayed draw and revolving credit commitments to portfolio companies.

Mr. Suhail A. Shaikh said “I am pleased to announce that we delivered a strong quarter, reflecting our focus on maintaining a resilient portfolio and capitalizing on selective opportunities in a challenging market environment. Despite economic uncertainties, we are well-positioned to navigate challenges and consistently deliver value to our shareholders.”

 

1

The Company’s dividend framework provides a quarterly base dividend and may be supplemented, at the discretion of the Board, by additional dividends as determined to be available by the Company’s net investment income and performance during the quarter.

On November 6, 2024, the Board declared a distribution for the quarter ended December 31, 2024 of $0.12 per share payable on January 8, 2025 to stockholders of record as of December 20, 2024.

This distribution represents a 15.34% yield on the Company’s $3.13 share price as of market close on September 30, 2024. Distributions may include net investment income, capital gains and/or return of capital, however, the Company does not expect the dividend for the quarter ending September 30, 2024, to be comprised of a return of capital. The Company’s investment adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. The Company estimates the source of its distributions as required by Section 19(a) of the Investment Company Act of 1940 to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods, but the Company will not be able to determine whether any specific distribution will be treated as taxable earnings or as a return of capital until after at the end of the taxable year.

Portfolio and Investment Activities

During the quarter, the Company made investments in three new portfolio companies and three existing portfolio companies. The aggregate capital invested during the quarter totaled $13.1 million, at cost, of which $0.5 million represents the reinstatement of previously recorded paydowns for interest received from Klein Hersh, LLC while it was on non-accrual status. The debt investments were made at a weighted average yield of 10.73%.

The Company received proceeds of $14.2 million from repayments, sales and amortization during the quarter, primarily related to the realization of Retail Services WIS Corporation and South Coast Terminals, LLC.

During the quarter, the Company had net repayments of $7,500 on its existing delayed draw and revolving credit commitments to portfolio companies.

The Company’s net realized, and unrealized gains and losses accounted for an increase in the Company’s net investments of approximately $4.3 million, or $0.30 per share. The total net increase in net assets resulting from operations for the quarter was $6.6 million, or $0.46 per share.

As of September 30, 2024, the Company’s investment portfolio consisted of investments in 45 portfolio companies, of which 82.47% were first lien investments and 17.53% were equity, warrants, and other investments. The Company’s debt portfolio consisted of 79.9% floating rate investments and 2.6% fixed rate investments.

Capital Resources

As of September 30, 2024, the Company had $10.1 million in cash, of which $8.3 million was restricted cash, and $52.5 million of unused and available capacity under its revolving credit facility with Capital One, N.A.

Subsequent Events

From October 1, 2024 through November 12, 2024, the Company had advances of $0.5 million on its existing delayed draw credit commitments to portfolio companies. As of November 12, 2024 the Company had investments in 45 portfolio companies.

 

2

Investcorp Credit Management BDC, Inc. and Subsidiaries

Consolidated Statements of Assets and Liabilities

 

 

 

     September 30, 2024
(Unaudited)		     June 30, 2024  

Assets

     

Non-controlled, non-affiliated investments, at fair value (amortized cost of $186,534,026 and $189,319,802, respectively)

    $ 186,721,026     $ 181,948,376  

Non-controlled, affiliated investments, at fair value (amortized cost of $15,170,452 and $15,149,238, respectively)

      3,421,133       2,621,154  
  

 

 

    

 

 

  

Total investments, at fair value (amortized cost of $201,704,478 and $204,469,040, respectively)

      190,142,159       184,569,530  

Cash

      1,748,802       158,768  

Cash, restricted

      8,341,711       4,950,036  

Principal receivable

      109,826       50,609  

Interest receivable

      1,564,642       1,301,516  

Payment-in-kind interest receivable

      83,768       66,625  

Long-term receivable

      644,831       631,667  

Escrow receivable

      99,198       97,173  

Prepaid expenses and other assets

      282,217       411,821  
  

 

 

    

 

 

  

Total Assets

    $ 203,017,154     $ 192,237,745  
  

 

 

    

 

 

  

Liabilities

     

Notes payable:

     

Revolving credit facility

    $ 47,500,000     $ 43,000,000  

2026 Notes payable

      65,000,000       65,000,000  

Deferred debt issuance costs

      (1,502,278 )      (1,654,870 ) 

Unamortized discount

      (106,665 )      (124,443 ) 
  

 

 

    

 

 

  

Notes payable, net

      110,891,057       106,220,687  

Payable for investments purchased

      5,188,030       7,425,000  

Dividend payable

      1,728,450       —   

Income-based incentive fees payable

      630,415       128,876  

Base management fees payable

      770,841       816,777  

Interest payable

      2,649,596       1,950,925  

Accrued expenses and other liabilities

      1,270,377       685,271  
  

 

 

    

 

 

  

Total Liabilities

      123,128,766       117,227,536  

Commitments and Contingencies (see Note 6)

     

Net Assets

     

Common stock, par value $0.001 per share (100,000,000 shares authorized and 14,403,752 and 14,403,752 shares issued and outstanding, respectively)

      14,404       14,404  

Additional paid-in capital

      203,103,263       203,103,263  

Distributable earnings (loss)

      (123,229,279 )      (128,107,458 ) 
  

 

 

    

 

 

  

Total Net Assets

      79,888,388       75,010,209  
  

 

 

    

 

 

  

Total Liabilities and Net Assets

    $ 203,017,154     $ 192,237,745  
  

 

 

    

 

 

  

Net Asset Value Per Share

    $ 5.55     $ 5.21  

 

3

Investcorp Credit Management BDC, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

 

 

 

     For the three months ended
September 30,		  
     2024     2023  

Investment Income:

     

Interest income

     

Non-controlled, non-affiliated investments

    $ 4,674,329     $ 5,465,288  

Non-controlled, affiliated investments

      —        —   
  

 

 

    

 

 

  

Total interest income

      4,674,329       5,465,288  

Payment in-kind interest income

     

Non-controlled, non-affiliated investments

      1,859,938       81,381  

Non-controlled, affiliated investments

      20,769       18,800  
  

 

 

    

 

 

  

Total payment-in-kind interest income

      1,880,707       100,181  

Payment in-kind dividend income

     

Non-controlled, non-affiliated investments

      212,979       188,251  

Non-controlled, affiliated investments

      —        —   
  

 

 

    

 

 

  

Total payment-in-kind dividend income

      212,979       188,251  

Other fee income

     

Non-controlled, non-affiliated investments

      78,760       143,986  

Non-controlled, affiliated investments

      —        —   
  

 

 

    

 

 

  

Total other fee income

      78,760       143,986  
  

 

 

    

 

 

  

Total investment income

      6,846,775       5,897,706  

Expenses:

     

Interest expense

      1,857,409       2,215,183  

Base management fees

      840,459       978,919  

Income-based incentive fees

      501,540       —   

Provision for tax expense

      221,655       100,747  

Professional fees

      394,639       227,407  

Allocation of administrative costs from Adviser

      185,906       263,375  

Amortization of deferred debt issuance costs

      152,591       173,333  

Amortization of original issue discount - 2026 Notes

      17,778       17,777  

Insurance expense

      127,768       112,984  

Directors’ fees

      94,529       73,375  

Custodian and administrator fees

      72,123       69,292  

Other expenses

      124,013       124,277  
  

 

 

    

 

 

  

Total expenses

      4,590,410       4,356,669  

Waiver of base management fees

      (69,578 )      (86,630 ) 

Waiver of income-based incentive fees

      —        —   
  

 

 

    

 

 

  

Net expenses

      4,520,832       4,270,039  
  

 

 

    

 

 

  

Net investment income

      2,325,943       1,627,667  

Net realized and unrealized gain/(loss) on investments:

     

Net realized gain (loss) from investments

     

Non-controlled, non-affiliated investments

      (4,056,505 )      —   

Non-controlled, affiliated investments

      —        —   
  

 

 

    

 

 

  

Net realized gain (loss) from investments

      (4,056,505 )      —   

Net change in unrealized appreciation (depreciation) in value of investments

     

Non-controlled, non-affiliated investments

      7,558,426       (2,167,498 ) 

Non-controlled, affiliated investments

      778,765       (1,144,531 ) 
  

 

 

    

 

 

  

Net change in unrealized appreciation (depreciation) on investments

      8,337,191       (3,312,029 ) 
  

 

 

    

 

 

  

Total realized gain (loss) and change in unrealized appreciation (depreciation) on investments

      4,280,686       (3,312,029 ) 
  

 

 

    

 

 

  

Net increase (decrease) in net assets resulting from operations

    $ 6,606,629     $ (1,684,362 ) 
  

 

 

    

 

 

  

Basic and diluted:

     

Net investment income per share

    $ 0.16     $ 0.11  

Earnings (Loss) per share

    $ 0.46     $ (0.12 ) 

Weighted average shares of common stock outstanding

      14,403,752       14,392,714  

Distributions paid per common share

    $ 0.12     $ 0.15  

 

4

About Investcorp Credit Management BDC, Inc.

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. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The Company seeks to invest primarily in middle-market companies that have annual revenues of at least $50 million and earnings before interest, taxes, depreciation, and amortization of at least $15 million. The Company’s investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about Investcorp Credit Management BDC, Inc., please visit www.icmbdc.com.

Forward-Looking Statements

Statements included in this press release and made on the earnings call for the quarter ended September 30, 2024, may contain “forward-looking statements,” which relate to future performance, operating results, events and/or financial condition. 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. Any forward-looking statements, including statements other than statements of historical facts, included in this press release or made on the earnings call are based upon current expectations, are inherently uncertain, and involve a number of assumptions and substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control.

Investors are cautioned not to place undue reliance on these forward-looking statements. Any such statements are likely to be affected by other unknowable future events and conditions, which the Company may or may not have considered, including, without limitation, changes in base interest rates and the effects of significant market volatility on our business, our portfolio companies, our industry and the global economy. Accordingly, such statements cannot be guarantees or assurances of any aspect of future performance or events. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors and risks. More information on these risks and other potential factors that could affect actual events and the Company’s performance and financial results, including important factors that could cause actual results to differ materially from plans, estimates or expectations included herein or discussed on the earnings call, is or will be included in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. All forward-looking statements speak only as of the date they are made. 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.

Contacts

Investcorp Credit Management BDC, Inc.

Investor Relations

Email: icmbinvestorrelations@investcorp.com

Phone:(646) 690-5047

 

5

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Document and Entity Information
Nov. 12, 2024
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Entity Central Index Key 0001578348
Document Type 8-K
Document Period End Date Nov. 12, 2024
Entity Registrant Name Investcorp Credit Management BDC, Inc.
Entity Incorporation State Country Code MD
Entity File Number 814-01054
Entity Tax Identification Number 46-2883380
Entity Address, Address Line One 280 Park Avenue
Entity Address, Address Line Two 39th Floor
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10017
City Area Code (212)
Local Phone Number 257-5199
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Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, par value $0.001 per share
Trading Symbol ICMB
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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