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BDC Daily News Highlights: Thursday November 2, 2017

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INTRODUCTION

Intra-day, here are the highlights from the BDC Daily News Table. We have listed every new item that is in the Table, but left out the BDC Reporter’s one line summary of our own investment approach, any Buy or Sell initiated as a result of the news, as well as the source of the item and whether other financial news sources are providing coverage or whether we provide the Only Mention or Exclusive Analysis – when we’ve written an in-depth article. If you scan down the BDC Daily News Table, you’ll note that the BDC Reporter often identifies news items that get no coverage anywhere else. Even when there are multiple sources for the news item involved, the BDC Reporter is almost always the only destination for immediate BDC off the cuff analysis and views and for more in-depth exegesis of the more important stories, usually within hours after the information becomes public. Here we alert our Premium subscribers with News, View and Analysis even before the market closes. For the full content, just go the BDC Daily News Table. 

By the way, look out in our Tools section for two new resources. We’ve added a BDC Earnings Calendar for readers who want to prepare for third quarter releases. As TCAP proved today with its 25% drop in value, trip up and the reaction can be severe. Investors may need to pay close attention to their favorite BDC holding…

Also, we’re intrepid readers and “curate” the more important articles we come upon into a host of magazines on Flipboard .  We’ve added our Flipboard magazine about Leveraged Finance to the Tools section for the reading pleasure of all our subscribers. More BDC Reporter curated magazines will follow once we get out from under the press of earnings season. 

OVERVIEW

The Big Story remains Triangle Capital’s very poor results and one-third dividend cut, which we tackled overnight after the October 1 release of the earnings and 10-Q. As the Daily News Table shows TCAP hit an All Time Low in price when the markets opened on the disastrous results. However, TCAP is far from alone. We track the markets through the day and seek to highlight as many New Lows and New Highs as we can as part of our Stock Watch feature. If you check back to the BDC News Table regularly, you’ll see updates in near real-time. Today, besides TCAP, at least 4 other BDCs hit new lows and one hit a YTD High (GAIN). Much to our own dismay as investors, the Exchange Traded Note with the ticker BDCS just breached its 52 Week Low. We predicted as much in our recent BDC Market Recaps, but the move still jolts us. From its high on March 31 2017, BDCS has now dropped just short of (15%) in price terms.  Things are getting pretty ugly for BDC investors but chances are they are going to get worse as the market awakens from its long optimistic sleep.

Alcentra Capital (ABDC) – another BDC getting beaten up in the market – has announced – with short notice – the schedule for its earnings release and Conference Call. The BDC Reporter has been more optimistic than the market about what might happen to ABDC from a dividend cut and credit standpoint. The Day Of Reckoning approaches for both of us on November 6 after the market close.

Other items worth noting include an unusual transaction where market leader Ares Capital (ARCC) sold a portfolio of venture debt loans to technology lending leder Hercules Capital (HTHC). Hmmm…

MVC Capital (MVC) released the vote count on the dissident shareholder’s proposal that we’ve been commenting on for weeks. Like Waterloo, this was “a close run thing”, and hardly a mandate or endorsement of the current management team or approach.

Ares Capital’s (ARCC) recast Core IIIQ 2017 Earnings were up on the prior quarter, but still below its distribution level. Nonetheless, the $0.38 quarterly pay-out was renewed for the IVQ.

Not listed here yet, but we did listen to the Newtek Business Services (NEWT) Conference Call. With an FBI investigation underway, management could not – and did not – have much to say about the Federal Elephant In The Room but demonstrated that the BDC is seeking to continue business as usual. Results for the quarter were in line with management and the BDC Reporter’s expectations. However, NEWT is as complex as a Rubik’s cube, so we’ll need to burrow into the 10-Q for further comfort. Even then…

 

DATE BDC(S) NEWS ANALYSIS VIEWS LINK
11/2/2017 ABDC Press Release: Announces Earnings & Conference Call Dates Scheduled 11/6 & 11/7. See BDC Earnings Calendar. After TCAP debacle, market is anticipating a similar credit meltdown http://bit.ly/2zZY1lO
11/2/2017 GAIN Stock Watch: Price At YTD High: $10.55 GAIN at level not reached since 2/2008. 1 cent off 52 Week High Decent earnings and increase in distribution attracting investors https://yhoo.it/2zdpaEF
11/2/2017 CPTA Stock Watch: Price At New All Time Low: $7.95 CPTA down (38%) YTD and (50%+) from March 2017 high Market adjusting on TCAP news and awaiting 11/6 results https://yhoo.it/2gY96fK
11/2/2017 FSIC Stock Watch: Price At All Time Closing Low: $7.75 FSIC down (28%) since YTD high Feb 2017 Notwithstanding prior dividend cut, market jumpy. We have Unchanged outlook. https://yhoo.it/2z7gosa
11/2/2017 ACSF Stock Watch: Price At YTD Low: $10.9 Down (21%) from high in March 2017 BDCR expected decline due to likely upcoming dividend cut https://yhoo.it/2xPXbY4
11/2/2017 AINV News Report: Compass Point Analyst Rating Analyst rates AINV as Neutral Insufficient details to assess Compass Point premise http://bit.ly/2iVnPfI
11/2/2017 TICC Stock Watch: Price At 1.5 Year Low After IIIQ 2017 Earnings: $5.17 Poor results and Core EPS below dividend cause sell-off on major volume Poor results expected. Surprised dividend not yet cut. Coming IQ 2018 ? https://yhoo.it/2h4XLOq
11/2/2017 TICC Press Release: Announces IIIQ 2017 Earnings & IVQ 2017 Dividend Non GAAP Core EPS down to $0.13 per share from $0.18 IIQ. Divvy unchanged Earnings hit by refinancing wave in CLO sector. Surprised dividend not cut yet http://bit.ly/2A1L0bw
11/2/2017 ARCC Press Release: Announces IIIQ 2017 Earnings & IVQ 2017 Dividend Non-GAAP Core EPS up to $0.36; NAV down on prior quarter but up 2017 Recurring earnings clawing back but still below dividend and sub-optimal http://bit.ly/2zqLdJ1
11/2/2017 ARCC/HTGC Press Release: HTGC To Acquire Venture Debt Portfolio From ARCC Portfolio valued at $125mn Few additional details in Purchase Agreement.ARCC exit from venture lending ? http://bit.ly/2zs39Tp
11/2/2017 PSEC Stock Watch: Price At All Time Low: $5.57 Price hitting record low on poor expectations for IIIQ 2017 earnings No end in sight for PSEC and no catalyst for reversal until earnings 11/8 https://yhoo.it/2z5GLiJ
11/2/2017 TCAP Stock Watch: Price At 8 Year Low Following Earnings/CC: $8.91 With 33% dividend cut and major credit problems a big drop was inevitable TCAP uncertainty to continue over credit and potential sale https://yhoo.it/2lufxMn
11/2/2017 MVC SEC Filing: Final Count From Shareholder Vote October 31, 2017 Dissident proposal came close to being approved. Another “BDC Activist” loses in a showdown, but close run. Try again ? http://bit.ly/2zc33hY
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