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

Sep 15, 2020 • 01:00 pm ET


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


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Michael C. Mauer

a difficult market for M&A and buyout, we are positive on the investment portfolio. We believe we have positioned the portfolio to weather the business cycle. We believe in our underwriting and credit selection, we believe that there are a number of positions in the portfolio that will provide upside to our NAV.

As we do every quarter, Chris will discuss our investment activity, and then Rocco will walk through our financial results. I will conclude with some commentary about a few of our investments and conclude my prepared remarks with commentary on the leverage, Investcorp's share purchases and our dividend. As always, we'll end with Q&A.

And with that, I'll turn it over to Chris.

Christopher E. Jansen

Thanks, Mike.

We made six investments this quarter across three existing portfolio companies and had one draw on an existing revolving commitment. We had no realizations during the quarter but did restructure our positions in Techniplas, which I'll explain in further detail. After quarter end, we made an investment in addition to funding under the revolving commitment I mentioned a moment ago.

First, we made a small investment in preferred equity for Clover Technologies, formerly known as 4L. This is part of the financing round in which most existing investors participated. We avoided substantial dilution by making this investment.

Second, we made several investments in Techniplas, spanning from before its bankruptcy filing through its exit loan. The first was a small loan, which provided liquidity in advance of the company filing for bankruptcy. Our second investment was in the dip loan, the third and fourth investments from the exit loan and the post reorganized equity of the company. Today, we own approximately 5.5% of the equity of Techniplas. Our yielded cost on the exit loan is approximately 10%. We also made a de minimis equity investment in 1888 to facilitate their eligibility for a PPP loan.

Finally, we funded approximately $1.3 million under our revolving commitment for Golden Hippo. Our total commitment is $2.6 million, leaving $1.3 million unfunded at quarter end. Since quarter end, we made two new investments in a new portfolio company. We invested in a first lien term loan and preferred equity for Advanced Solutions International, or ASI.

ASI produces software for nonprofits, focusing on CRM and managing various interactions between an association and its membership, marketing, managing collection of donations and dues, and measuring membership engagement. Our yielded cost on the first lien term loan is approximately 8.77%. The preferred equity investment has a 4% cash coupon and an increasing PIK coupon, which starts at 9.75%.

Using the GICS standard, as of June 30th, our largest industry concentration was professional services at 11.5%; followed by construction and engineering at 11.2%; energy, equipment and services at 10.9%; trading companies and distributors at 9.1%; and media at 7.1%. Our portfolio of companies are in 24 gigs industries as of quarter end, including our equity and warrant positions. As of June 30th, our portfolio company count was 38 versus 38 last quarter.