Monroe Capital Corporation (NASDAQ:MRCC) Q1 2019 Earnings Conference Call Transcript

May 08, 2019 • 11:00 am ET

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Monroe Capital Corporation (NASDAQ:MRCC) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Welcome to Monroe Capital Corporation First Quarter 2019 Earnings Conference Call.

Before we begin, I would like to take a moment to remind our listeners that all remarks made during this call today may contains certain forward-looking statements, including statements regarding our goals, strategies, beliefs, future potential, operating results or cash flows. Although we believe these statements are reasonable based on management's estimates, assumptions and projections as of today, May 8, 2019. These statements are not guarantees of future performance. Further, time-sensitive information may no longer be accurate as of the time of any replay or listening. Actual results may differ materially as a results of risks, uncertainties or other factors, including, but not limited to the factors described from time to time in the company's filing with the SEC. Monroe Capital takes no obligation to update or revise these forward-looking statements.

I will now turn the conference over to Ted Koenig, Chief Executive Officer of Monroe Capital Corporation.

Executive
Theodore L. Koenig

Good morning, and thank you, everyone, who has joined us on our call today. As always, I'm joined by Aaron Peck, our CFO and Chief Investment Officer. Last evening, we issued our first quarter 2019 earnings press release and filed our 10-Q with the SEC. We had another strong quarter. We generated adjusted net investment income of $0.35 per share in line with our first quarter dividend of $0.35 per share. This represents the 20th consecutive quarter we have covered our dividend with adjusted net investment income. Our continued dividend coverage is a testament to the overall Monroe Capital firm platform scale, our unique origination capabilities and our credit underwriting and portfolio management process.

At quarter end, our investment portfolio had a fair value of $596.9 million, a $43.3 million or 8% increase from the prior quarter end, and included investments in 80 companies across 21 different industry classifications. The increase in the size of the investment portfolio was primarily due to an increase in new deal fundings during the quarter. In the quarter, we had $70.1 million of investment fundings, partially offset by $29.1 million of sales, repayments and prepayments activity. This new deal momentum and asset growth is the direct result of our proprietary deal origination team located in multiple offices throughout the U.S. and our broad industry vertical coverage of the following areas: business services, healthcare, technology, software, specialty finance and, of course, the middle market PE community.

Incidentally, our investment manager platform, Monroe Capital, had a record first quarter with over $1 billion of senior secured debt funded in 26 transactions. This was the highest activity level in any first quarter experienced by our platform manager, Monroe Capital.

During the quarter, MRCC completed an amendment and extension of our revolving credit facility with ING Capital as agent, which increased the maximum amount of borrowings under the facility from $200 million to $255 million, extended the maturity to March 2024, reduced our required asset coverage covenant from 1.5:1 from 2.1:1 sic from 2.1:1 to 1.5:1 and decreased pricing from