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BlackRock Kelso Capital Corporation Declares Regular Quarterly Dividend Of $0.26 Per Share, Announces June 30, 2013 Quarterly Financial Results

Stocks in this article: BKCC

Net Increase in Net Assets from Operations

The net increase in net assets from operations for the three and six months ended June 30, 2013 was $12.0 million and $41.8 million, or $0.16 per share and $0.56 per share, respectively. The net increase for the 2012 periods was $21.0 million and $41.3 million, or $0.29 per share and $0.56 per share, respectively. The increase for the latter 2013 period was reduced in part by net realized and unrealized losses of $9.2 million. As compared to prior periods, we earned a relatively stable base of investment income, but were negatively impacted by the portfolio's net realized losses. Our net asset value per share at June 30, 2013 was $9.37, an increase of $0.06 per share over a $9.31 net asset value per share at year end.

Liquidity and Capital Resources

We have accomplished many of our strategic initiatives during the quarter, including finalizing on favorable terms the restructuring of three portfolio companies we have been actively engaged in since year end, and diversifying our funding sources with a $10.0 million principal amount senior secured term loan with attractive pricing. We are now in a position to utilize our available debt capacity to increase net investment income without raising additional equity capital.

On June 7, 2013, we entered into an additional $10.0 million of Senior Secured Term Loan Credit Commitments. The term loan has a maturity date of May 31, 2018, and the interest rate applicable to borrowings is generally LIBOR plus an applicable spread of 3.75%, or an alternate base rate, as defined in the governing agreement, plus an applicable spread of 2.75%.

At June 30, 2013, we had approximately $7.6 million in cash and cash equivalents, net of payables for investments purchased, $314.9 million in debt outstanding and, subject to leverage and borrowing base restrictions, $334.0 million available for use under our amended and restated senior secured revolving credit facility, which matures in March 2017. Relative to our $1.1 billion dollar portfolio at fair value, we continue to have sufficient debt capacity to deploy in attractive investment opportunities. At June 30, 2013, we were in compliance with regulatory coverage requirements with an asset coverage ratio of 315% and were in compliance with all financial covenants under our debt agreements. Cash provided by (used in) operating activities for the six months ended June 30, 2013 and 2012 was $101.4 million and ($68.0) million, respectively. In the near term, we expect to meet our liquidity needs through use of the remaining availability under our credit facility, continued cash flows from operations, and through periodic add-on equity and debt offerings, as needed. The primary use of funds will be investments in portfolio companies, reductions in debt outstanding and other general corporate purposes.

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