Investment Portfolio - As of September 30, 2022, the investment portfolio at fair value was $574.6 million, with net assets of $332.0 million and indebtedness of $262.0 million[198]. - The company invested approximately $78.0 million during the three months ended September 30, 2022, with 99.9% in senior secured loans and 0.1% in equity securities[199]. - The portfolio consisted of 111 companies, with an average investment of approximately $5.8 million per company at amortized cost[200]. - The company’s largest portfolio company investment at fair value was approximately $24.9 million, comprising about 15% of the total portfolio[200]. - As of September 30, 2022, the company had unfunded commitments of $70.9 million across 47 portfolio companies, compared to $49.4 million across 35 portfolio companies as of December 31, 2021[240]. Financial Performance - The net investment income for the same period was $7.7 million, resulting in a net investment income per share of $0.10[198]. - For the three months ended September 30, 2022, total investment income increased by $3.5 million, or 28.1%, compared to the same period in 2021, reaching $16.0 million[209]. - Net investment income for the three months ended September 30, 2022 was $7.7 million, reflecting an increase of approximately $2.8 million, or 56.1%, from $4.9 million in 2021[215]. - Total investment income for the nine months ended September 30, 2022 increased by $6.8 million, or 20.3%, compared to the same period in 2021, primarily due to a 21.8% higher average balance in senior secured loans[220]. - Net investment income was $21.3 million for the nine months ended September 30, 2022, representing an increase of approximately $7.3 million, or 52.6%, from $13.9 million in the same period in 2021[226]. Dividends and Returns - The company declared dividends of $0.10 per share during the three months ended September 30, 2022[198]. - The company declared a dividend of $0.10 per share on October 28, 2022, payable on January 6, 2023[255]. - The total return based on net asset value for the three months ended September 30, 2022 was 2.5%, compared to 3.9% for the same period in 2021[204]. - The total return based on market price for the three months ended September 30, 2022 was (5.1)%, a decline from 0.5% in 2021[204]. Expenses and Liabilities - Total expenses, net of incentive fee waiver, increased by $0.8 million, or 10.0%, for the three months ended September 30, 2022, totaling $8.36 million[210]. - Total expenses, net of incentive fee waiver, decreased by $0.5 million, or 2.6%, for the nine months ended September 30, 2022, primarily due to the reversal of previously accrued incentive fees on capital gains[222]. - Management fees increased by approximately $0.5 million, or 8.2%, for the nine months ended September 30, 2022, due to an increase in total assets on which management fees are calculated[225]. - The balance of accrued Incentive Fees on capital gains was zero as of September 30, 2022, down from $1.5 million as of December 31, 2021[223]. Market Risks and Interest Rates - The company is subject to financial market risks, with 99% of its yielding debt investments bearing interest based on floating rates as of September 30, 2022[258]. - 91% of the company's yielding floating rate debt investments contained an interest rate floor[258]. - The company projects an increase in net investment income of $13.3 million with a 400 basis point rise in interest rates, translating to an increase of $0.18 per share[261]. - A 300 basis point increase in interest rates is expected to yield $10.0 million in net investment income, or $0.14 per share[261]. - With a 200 basis point increase, net investment income is projected to be $6.7 million, equating to $0.09 per share[261]. - A 100 basis point increase would result in $3.3 million in net investment income, or $0.05 per share[261]. - Conversely, a decrease of 100 basis points is anticipated to lead to a decline of $3.1 million in net investment income, resulting in a loss of $0.04 per share[261]. - The company acknowledges that hedging activities may limit its ability to benefit from favorable interest rates[259]. - The projected amounts do not account for the impact of interest rate changes on the company's Interest Rate Swap[259]. Operational Cash Flow - Net cash used in operating activities for the nine months ended September 30, 2022 was $(20.1) million, primarily consisting of $(29.8) million in net purchases of investments[238]. - Net cash provided by financing activities during the nine months ended September 30, 2022 was $37.3 million, with sources including $116.0 million in net debt borrowings under the Credit Facility[239]. - The company has sufficient liquidity to meet all obligations and fund unfunded commitments as needed[241]. Investment Ratings - The weighted average yield of the total portfolio at fair value was 10.5% as of September 30, 2022, compared to 8.5% at December 31, 2021[203]. - The weighted average investment rating improved to 1.28 as of September 30, 2022, compared to 1.21 at December 31, 2021[206]. - The distribution of investment ratings as of September 30, 2022 included $449.2 million in Grade 1 investments, down from $474.5 million at December 31, 2021[206]. - Net realized gain for the three months ended September 30, 2022 was $0.4 million, significantly lower than the $22.6 million realized in the same period of 2021[216]. - The change in net unrealized depreciation for the three months ended September 30, 2022 was $(2.4) million, compared to $(15.9) million in 2021[217]. - The change in net unrealized depreciation for the nine months ended September 30, 2022 was an increase of $(13.9) million, compared to a decrease of $43.0 million in the same period in 2021[228]. - Net realized gain for the nine months ended September 30, 2022 was $1.2 million, down from $2.9 million in the same period in 2021[227].
BlackRock Capital Investment (BKCC) - 2022 Q3 - Quarterly Report