CION Investment (US:CION)2024-03-13 16:00Investment Activity - The company reported net investment activity of $49,937 in 2023, down from $80,778 in 2022, with senior secured first lien debt purchases totaling $340,704 compared to $524,293 in the previous year[653]. - Total investments as of December 31, 2023, amounted to $1,975,630, with a fair value of $1,840,824, representing a 100% allocation across various investment types[654]. - The company’s portfolio includes 111 companies, with a weighted average purchase price of 96.33% of par[654]. - The company’s investment portfolio is primarily composed of senior secured first lien debt, accounting for 85% of the total investment portfolio[654]. - The investment portfolio included 113 and 128 portfolio companies for the years ended December 31, 2023, and 2022, respectively[687]. - The company’s investment in the healthcare and pharmaceuticals sector was valued at $238,624, representing 13.0% of the investment portfolio as of December 31, 2023[682]. - The company’s total investments, including short-term investments, reached $1,954,270 as of December 31, 2023, compared to $1,760,030 in 2022[682]. Financial Performance - Investment income for the year ended December 31, 2023, was $251,010, an increase from $194,898 in 2022, primarily due to higher LIBOR and SOFR rates[687]. - Net investment income after taxes for 2023 was $105,022, up from $88,205 in 2022[687]. - The net increase in net assets resulting from operations was $95,314 for the year ended December 31, 2023, up from $50,141 in 2022[691]. - Total operating expenses and income taxes for 2023 amounted to $145,988, compared to $106,693 in 2022, reflecting an increase in interest expense from $49,624 to $85,556[688]. - The average annual EBITDA of portfolio companies was reported at $61.7 million, while the median annual EBITDA stood at $33.7 million[654]. - The gross annual portfolio yield based on the purchase price was 11.76% for the year ended December 31, 2023, compared to 11.80% in 2022[705]. - Total distributions for the year ended December 31, 2023, amounted to $87,867, with a per-share distribution of $1.6100[724]. Debt and Borrowings - The company has $550,000 in outstanding borrowings under the JPM Credit Facility as of December 31, 2023[725]. - As of December 31, 2023, outstanding borrowings under the Amended UBS Facility were $122,500, with an aggregate unfunded principal amount of $27,500[746]. - Outstanding borrowings under the 2021 More Term Loan were $30,000, with no unfunded principal amount[748]. - Outstanding borrowings under the 2022 More Term Loan were $50,000, with no unfunded principal amount[749]. - The company had approximately $114,844 in aggregate principal amount of Series A Notes outstanding, with no unfunded principal amount[750]. - The company is required to maintain an asset coverage ratio of 150% following shareholder approval, allowing for increased leverage[737]. Interest Rates and Risks - Interest payments on borrowed funds for the twelve months ended December 31, 2023, included various debt instruments with weighted average interest rates ranging from 4.5% to 9.97%[670]. - As of December 31, 2023, 80.1% of the company's investments paid variable interest rates, indicating exposure to interest rate fluctuations[763]. - A 300 basis point increase in interest rates could lead to a $14,644 increase in net interest income, representing a 14.1% change[794]. - Approximately 7.2% of the company's investments paid fixed interest rates as of December 31, 2023, indicating potential valuation risks in a rising interest rate environment[794]. Shareholder Distributions - The company declared a regular quarterly distribution of $0.34 per share for Q1 2024, payable on March 28, 2024[652]. - The company has a distribution reinvestment plan (DRP) that allows shareholders to automatically reinvest distributions unless they opt out[656]. - The company repurchased 1,114,848 shares during the year ended December 31, 2023, for a total cost of $11,518, averaging $10.33 per share[741]. Asset Valuation - The investment portfolio's fair value as of December 31, 2023, was $1,840,824, compared to $1,749,161 in 2022, indicating growth in the portfolio[685]. - The net change in unrealized appreciation on investments was $22,219 for the year ended December 31, 2023, compared to $(5,314) in 2022, driven by mark-to-market price changes[690]. - The net unrealized loss for the year is $7.335 billion, while net realized gains amount to $15.440 billion[824]. - The fair value of senior secured notes decreased from $60.348 billion to $59.598 billion, with a gross addition of $4.771 billion and a gross reduction of $5.521 billion[827]. Commitments and Liabilities - Unfunded commitments as of December 31, 2023, were $47,349, down from $71,420 in 2022[703]. - Total liabilities in excess of other assets amount to $(1,074,707)[852]. - The total liabilities in excess of other assets amount to $(876,396,000), indicating a significant liability position[871]. Cash and Short-term Investments - Cash and short-term investments totaled $121,861 as of December 31, 2023, with $153 million available under secured financing arrangements[719]. - Cash reserves decreased significantly to $8,415,000 from $82,739,000, a decline of approximately 89.8%[837]. - The cost of investments in short-term investments is $10,869,000, with a fair value equal to the cost[871].