Investcorp Credit Management BDC, Inc. (NASDAQ:ICMB) Q4 2020 Earnings Conference Call - Final Transcript

Sep 15, 2020 • 01:00 pm ET

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Investcorp Credit Management BDC, Inc. (NASDAQ:ICMB) Q4 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions]. Our first question comes from Robert Dodd. Please state your question.

Analyst
Robert Dodd

Hi guys. Hi Mike. In your prepared remarks at the beginning, obviously you talked about one restructuring and several other markdowns. I mean, for the marks in the quarter, can you give us, obviously we will get more detail when the K comes out, but it's not out yet. Any more detail about how concentrated the marks were of that round number, $6 million unrealized depreciation in the quarter? How many assets was that associated with? Was the bulk of that Techniplas? I mean anything you can give us on how broad the marks were in the portfolio versus concentrated?

Executive
Michael C. Mauer

Yes. Robert, thank you very much and thanks everybody for calling in. Before I do that, I want to clarify one other thing.

One of the perils of doing this remote from lots of different locations, I referenced that leverage had gone down. Rocco's reference was accurate at 1.69 times leverage as of quarter-end. And to your question, the $6 million-odd of markdowns was highly focused around four credits and you will get all in the K.

Techniplas, Bioplan, 4L or Clover and 1888, all of those were in a basic band between 1.4 and 1.8 each. Two of those, Techniplas and Clover, were completing the restructuring. And Arcade Bioplan and 1888, really continue to be affected by COVID. I would say that both, we believe, have adequate liquidity and are positioning to recover over time.

Bioplan is one that has to work through a lot of dynamics of the underlying business but it should be long term, we think, stable and show recovery. 1888 continues to look at diversifying its business away from exclusively energy. And the pipeline, which really is a very forward-looking pipeline of prospective business, looks strong. We are looking forward to the next three to six months to hopefully see that come to fruition.

Analyst
Robert Dodd

Got it. I appreciate that color. If I can then on sort of a related follow-up. Obviously, at the end of June and you have got round numbers $46 million in unrealized depreciation in the portfolio as a whole. This is a tough question, but of that, how much would you characterize today as essentially being is permanent even if it hasn't been realized yet because you are still working through things versus how much of that the total aggregate markdowns, do you think could well be transitory, i.e., you talked about potential for NAV upside in future? How much could NAV come back from here versus how much of it is really permanent because of the COVID impacts?

Executive
Michael C. Mauer

Let me -- As you opened that, I think you did it correctly. It's difficult to answer this question because of the environment we are in and how we look at companies and how it's going to come back. It's not going to be a recovery of three to six months. I think it's going to be 12 to 36