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Solar Capital Announces March 31, 2011 Financial Results, 3% NAV Increase; Declares Quarterly Dividend Of $0.60 Per Share

Stocks in this article: SLRC

Portfolio Investments

The total value of our investments was approximately $988.6 million at March 31, 2011 and $976.2 million at December 31, 2010. During the quarter ended March 31, 2011, we originated approximately $81.1 million in face value of investments in two new and four existing portfolio companies. We also received approximately $80.0 million from principal repayments. In addition, we proactively sold approximately $29.4 million of investments in lower yielding debt and equity securities, all at prices in excess of our December 31, 2010 marks. At March 31, 2011, we had investments in securities of 35 portfolio companies with approximately 27.6% senior secured, 63.5% subordinated debt and 8.9% equity. As of March 31, 2011, there were no non-accrual assets.

The weighted average yield on income producing investments in our portfolio was approximately 13.9% and 14.3%, on March 31, 2011 and December 31, 2010, respectively.

Results of Operations

Investment income was $32.3 million for the three months ended March 31, 2011 compared to $31.6 million and $35.3 million for the three months ended December 31, 2010 and March 31, 2010, respectively. The first quarter 2011 investment income was higher than last quarter primarily due to higher interest income on higher income producing invested balances. Investment income for the three months ended March 31, 2010 contained large prepayment and other fee income related to the early repayment of assets during that period. Net investment income of $19.1 million, or $0.53 per share, for the three months ended March 31, 2011 represents a more than 9% increase over NII for the fourth quarter of 2010. Expenses for the first quarter of 2011 were lower than during the first and fourth quarter of 2010, primarily due to lower interest expenses resulting from the repayment of higher fixed rate debt in December 2010. Net realized and unrealized gains of $29.9 million for the three months ended March 31, 2011 were primarily due to an increase in the fair value of our portfolio during the quarter due to continued credit improvement and anticipated repayments.

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