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Black Diamond Rentals

Oilfield Services

Black Diamond Oilfield Rentals, LLC supplies drill string equipment to E&P operators on a rental basis. Black Diamond operates in the U.S. and Mexico and is a wholly owned subsidiary of Basin Holdings. ... Established 2012."

We updated our view given that Alcentra's IQ 2017 valuation is trending down and additional debt has been advanced and two tranches of Senior Debt created. The rating remains at CCR 4.

Total exposure is $15.2mn and Unrealized Depreciation so far is ($5.4mn). In a Conservative Case, we would expect all the Subordinated to be written off and 20% of the Senior Debt. That would be a Realized Loss of ($9.4mn) and an additional ($4mn) loss from the current mark.

More worrying would be the risk of losing the income from the Subordinated Note- and for a time at least - the Senior tranche income in a bankruptcy or restructuring, or $1.3mn. That's about $0.10 a share. Net of hypothetical lower MF and Incentive Fees of $0.3mn, the earnings loss might be $0.07 a share, but some of that might be reversed if the 80% of senior debt gets repaid in some form, or returns to yield status. [Updated: May 7, 2017]