Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Business Development Corp of America | v327853_8k.htm |
CONTACTS
| From: Anthony J. DeFazio | For: Brian S. Block, EVP & CFO |
| DeFazio Communications, LLC | Business Development Corporation of America |
| tony@defaziocommunications.com | bblock@arlcap.com |
| Ph: (484-532-7783) | Ph: (212-415-6500) |
FOR IMMEDIATE RELEASE
Business Development Corporation of America Announces Third Quarter 2012 Results from Operations
New York, New York, November 8, 2012 ˗ Business Development Corporation of America (“BDCA” or the “Company”) announced results of operations for the third quarter ended September 30, 2012.
The Company commenced operations on August 25, 2011, subsequent to raising sufficient funds to meet escrow break requirements. For the three months ended September 30, 2012, BDCA acquired 34 individual investments at a total cost of $67.9 million and received proceeds of $39.2 million from loan repayments and the sale of certain investments. The Company realized gains of $0.3 million in connection with those sales. BDCA generated portfolio net investment income of $1.7 million, excluding realized gains and losses, during the three months ended September 30, 2012. During the same period, the Company paid distributions of $1.5 million.
For the nine months ended September 30, 2012, BDCA acquired 67 individual investments at a total cost of $148.3 million and received proceeds of $62.7 million from loan repayments and the sale of certain investments. The Company realized gains of $0.9 million in connection with those sales. BDCA generated portfolio net investment income of $3.1 million, excluding realized gains and losses, during the nine months ended September 30, 2012. During the same period, the Company paid distributions of $2.5 million.
“We are pleased to report another strong quarter of operations for BDCA,” stated Peter M. Budko, President and Chief Operating Officer of the Company. Mr. Budko noted, “We continue to fully cover our dividend from net investment income rather than investment gains and new equity. Our portfolio continues to be of high quality, with approximately 81 percent of our assets invested in senior secured loans. With continued unease in Europe and other economic concerns, we believe that BDCA’s strategy of originating and participating in well structured, senior loans to middle market U.S. companies provides investors with attractive risk-adjusted returns.”
Portfolio Highlights (dollar amounts in thousands):
| September 30, 2012 | December 31, 2011 | |||||||
| Investments, at fair value | $ | 102,048 | $ | 14,271 | ||||
| Net asset value per share (1) | $ | 9.44 | $ | 9.00 | ||||
| Weighted average effective yield (2) | 8.16 | % | 10.79 | % | ||||
| Number of portfolio investments | 44 | 34 | ||||||
| Number of industry groups | 16 | 18 | ||||||
______________________
| (1) | Net asset value per share and common shares outstanding for the year ended December 31, 2011 have been adjusted to reflect a special common stock distribution of $0.05 per share declared on March 29, 2012. |
| (2) | Includes the effect of the amortization or accretion of loan premiums or discounts. |
BUSINESS DEVELOPMENT CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share and per share data)
| September 30, 2012 | December 31, 2011 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Investments, at fair value (amortized cost of $100,917 and $14,294, respectively) | $ | 102,048 | $ | 14,271 | |||
| Cash and cash equivalents | 4,970 | 828 | |||||
| Cash collateral on deposit with custodian | 11,417 | — | |||||
| Interest receivable | 1,174 | 142 | |||||
| Due from affiliate | 1,127 | 918 | |||||
| Deferred credit facility financing costs, net | 787 | 50 | |||||
| Unrealized gain on total return swap | 580 | — | |||||
| Receivable due on total return swap | 348 | — | |||||
| Prepaid expenses and other assets | 154 | 41 | |||||
| Receivable for unsettled trades | 3,521 | — | |||||
| Total assets | $ | 126,126 | $ | 16,250 | |||
| LIABILITIES | |||||||
| Revolving credit facility | $ | 14,818 | $ | 5,900 | |||
|
Payable for unsettled trades |
17,553 | 1,914 | |||||
| Management fees payable | 176 | — | |||||
| Accounts payable and accrued expenses | 90 | 154 | |||||
| Interest and credit facility fees payable | 91 | 19 | |||||
| Payable for common stock repurchases | 86 | — | |||||
| Stockholder distributions payable | 632 | 56 | |||||
| Total liabilities | 33,446 | 8,043 | |||||
| NET ASSETS | |||||||
| Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
| Common stock, $.001 par value, 450,000,000 shares authorized, 9,821,991 and 912,297 shares issued and outstanding, respectively |
10 | 1 | |||||
| Capital in excess of par value | 90,240 | 8,235 | |||||
| Accumulated distributions in excess of net investment income | (334 | ) | (7 | ) | |||
| Accumulated undistributed net realized gain from investments and total return swap | 1,053 | 1 | |||||
| Net unrealized appreciation (depreciation) on investments and total return swap | 1,711 | (23 | ) | ||||
| Net assets | 92,680 | 8,207 | |||||
| Total liabilities and net assets | $ | 126,126 | $ | 16,250 | |||
| Net asset value per share * | $ | 9.44 | $ | 9.00 | |||
*Net asset value per share and common shares outstanding for the year ended December 31, 2011 have been adjusted to reflect a special common stock distribution of $0.05 per share declared on March 29, 2012.
BUSINESS DEVELOPMENT CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Investment income: | ||||||||||||||||
| Interest income | $ | 1,959 | $ | 62 | $ | 3,677 | $ | 62 | ||||||||
| Other income | 14 | — | 63 | — | ||||||||||||
| Total investment income | 1,973 | 62 | 3,740 | 62 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Contract termination fee | — | 320 | — | 320 | ||||||||||||
| Interest and credit facility financing expenses | 192 | 26 | 420 | 51 | ||||||||||||
| Professional fees | 137 | — | 364 | — | ||||||||||||
| Directors fees | 18 | — | 57 | — | ||||||||||||
| Insurance | 51 | — | 154 | — | ||||||||||||
| Management fees | 402 | 7 | 730 | 7 | ||||||||||||
| Incentive fees | 572 | 37 | 968 | 37 | ||||||||||||
| Other administrative | 35 | 101 | 75 | 251 | ||||||||||||
| Expenses before expense waivers and reimbursements from Adviser | 1,407 | 491 | 2,768 | 666 | ||||||||||||
| Waiver of management and incentive fees | (798 | ) | (44 | ) | (1,522 | ) | (44 | ) | ||||||||
| Expense support reimbursement from Adviser | — | (571 | ) | (266 | ) | (571 | ) | |||||||||
| Total expenses net of expense waivers and reimbursements from Adviser | 609 | (124 | ) | 980 | 51 | |||||||||||
| Net investment income | 1,364 | 186 | 2,760 | 11 | ||||||||||||
| Realized and unrealized gain on investments: | ||||||||||||||||
| Net realized gain from investments | 344 | — | 926 | — | ||||||||||||
| Net realized gain from total return swap | 390 | — | 390 | — | ||||||||||||
| Net unrealized appreciation on investments | 1,184 | — | 1,154 | — | ||||||||||||
| Net unrealized appreciation on total return swap | 580 | — | 580 | — | ||||||||||||
| Net realized and unrealized gain on investments | 2,498 | — | 3,050 | — | ||||||||||||
| Net increase in net assets resulting from operations | $ | 3,862 | $ | 186 | $ | 5,810 | $ | 11 | ||||||||
| Per share information - basic and diluted*: | ||||||||||||||||
| Net investment income | $ | 0.16 | $ | 1.26 | $ | 0.55 | $ | 0.17 | ||||||||
| Net increase in net assets resulting from operations | $ | 0.47 | $ | 1.26 | $ | 1.15 | $ | 0.17 | ||||||||
| Weighted average common shares outstanding | 8,297,178 | 147,598 | 5,042,363 | 64,473 | ||||||||||||
*Per share information - basic and diluted and weighted average common shares outstanding for the three and nine months ended September 30, 2011 have been adjusted to reflect a special common stock distribution of $0.05 per share declared on March 29, 2012.
BUSINESS DEVELOPMENT CORPORATION OF AMERICA
ADJUSTED PORTFOLIO NET INVESTMENT INCOME
(in thousands)
(Unaudited)
The difference between our GAAP net investment income and our portfolio net investment income is due to the inclusion of realized gains from our total return swap (“TRS”) in portfolio net investment income, which represents the interest income received from the underlying loans in the TRS offset by interest paid to Citibank, N.A. to finance such loans, and the net realized gains or losses from the sale of the underlying loans in the TRS. We subsequently remove the net realized gains or losses from the TRS to determine adjusted portfolio net investment income. The following table sets forth a reconciliation between GAAP net investment income and adjusted portfolio net investment income during the nine months ended September 30, 2012 and 2011 (dollars in thousands):
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||
| GAAP net investment income | $ | 1,364 | $ | 186 | $ | 2,760 | $ | 11 | |||||||
| GAAP realized gains on total return swap | 390 | — | 390 | — | |||||||||||
| Portfolio net investment income | $ | 1,754 | $ | 186 | $ | 3,150 | $ | 11 | |||||||
| Less realized gains on total return swap | 44 | — | 44 | — | |||||||||||
| Adjusted portfolio net investment income | $ | 1,710 | $ | 186 | $ | 3,106 | $ | 11 | |||||||
| Distributions paid | $ | 1,500 | $ | - | $ | 2,511 | $ | - | |||||||
| Undistributed adjusted portfolio net investment income | $ | 210 | $ | 186 | $ | 595 | $ | 11 | |||||||
| Distributions declared | $ | 1,706 | $ | 26 | $ | 3,087 | $ | 26 | |||||||
This announcement may contain certain forward-looking statements, including statements with regard to the future performance of BDCA. Words such as “believes,” “expects,” “projects,” and “future” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in the filings BDCA makes with the SEC. BDCA undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
To arrange interviews with BDCA and BDCA Adviser executives, please contact Tony DeFazio at 484-532-7783 or tony@defaziocommunications.com.