Logan Ridge Finance Corporation Reports Third Quarter 2021 Earnings Results
Third Quarter 2021 Overview
- The Company received an investment grade credit rating of “BBB-’’ from
Egan-Jones Rating Company . - Total debt-to-equity of 1.1x as of
September 30, 2021 , compared to 1.3x as ofJune 30, 2021 , 1.6x as ofMarch 31, 2021 and 2.0x as ofDecember 31, 2020 . - As of
September 30, 2021 , the Company’s investment portfolio consisted of investments in 33 portfolio companies with an aggregate fair value of approximately$195.4 million . The debt investment portfolio, which represented 69.1% of the fair value of the total portfolio, had a yield of approximately 8.9%. - During the quarter, the Company made approximately
$33.3 million of investments and had approximately$64.1 million in repayments and sales, resulting in net repayments and sales of approximately$30.8 million for the period. - During the quarter, the Company successfully exited equity investments in three portfolio companies generating
$11.2 million in proceeds that can be redeployed into interest earning investments originated by Mount Logan Management, part of the BC Partners Credit platform. These equity investments were collectively valued at$10.2 million in the prior quarter. - Subsequent to quarter end, the Company issued
$50 million in aggregate principal amount of 5.25% Senior Unsecured Notes due 2026.
Management Commentary
Selected Financial Highlights
Total investment income was
Total expenses for the third quarter of 2021 were
Net realized gains totaled
Net change in unrealized depreciation totaled
The net decrease in assets resulting from operations was
As of
Subsequent to quarter-end, the Company announced the receipt of a “BBB-’’ investment grade credit rating from
As of
The composition of our investments as of
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||
| Security Type | Investments at Amortized Cost |
Investments at Fair Value |
Investments at Amortized Cost |
Investments at Fair Value |
||||||||||||||||||||
| First Lien Debt | 126,463 | 113,854 | 58.3 | % | 128,977 | 115,535 | 50.7 | % | ||||||||||||||||
| Second Lien Debt | 21,055 | 21,165 | 10.8 | % | 38,673 | 38,772 | 17.0 | % | ||||||||||||||||
| Equity and Warrants | 46,788 | 60,366 | 30.9 | % | 49,918 | 73,741 | 32.3 | % | ||||||||||||||||
| Total | $ | 194,306 | $ | 195,385 | 100.0 | % | $ | 217,568 | $ | 228,048 | 100 | % | ||||||||||||
Conference Call and Webcast
LRFC will discuss these results in a conference call on
To access the conference call, please dial (844) 616-4517 approximately 10 minutes prior to the start of the conference call and reference the conference ID 7421418. A replay of the conference call will be available from
A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on the Company’s website, loganridgefinance.com, in the Investor Relations section, under Events and Presentations. The webcast can also be accessed by clicking the following link: Logan Ridge Third Quarter 2021 Conference Call. The online archive of the webcast will be available on the Company’s website shortly after the call.
About
About Mount Logan Capital Inc.
Mount Logan Capital Inc. is an alternative asset management company that is focused on public and private debt securities in the North American market. The Company seeks to source and actively manage loans and other debt-like securities with credit-oriented characteristics. The Company actively sources, evaluates, underwrites, manages, monitors and primarily invests in loans, debt securities, and other credit-oriented instruments that present attractive risk-adjusted returns and present low risk of principal impairment through the credit cycle.
About
BC Partners Credit was launched in
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking” statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include those risk factors detailed in the Company’s reports filed with the
Any forward-looking statements speak only as of the date of this communication. The Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information or developments, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
For additional information, contact:
Chief Financial Officer
Jason.Roos@bcpartners.com
(212) 891-5046
jlinford@equityny.com
(212) 836-9615
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share data)
| As of | ||||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Investments at fair value: | ||||||||
| Non-control/non-affiliate investments (amortized cost of |
$ | 111,553 | $ | 172,848 | ||||
| Affiliate investments (amortized cost of |
76,979 | 93,425 | ||||||
| Control investments (amortized cost of |
6,853 | 8,419 | ||||||
| Total investments at fair value (amortized cost of |
195,385 | 274,692 | ||||||
| Cash and cash equivalents | 37,386 | 49,942 | ||||||
| Interest and dividend receivable | 1,008 | 2,286 | ||||||
| Prepaid expenses | 3,588 | 1,077 | ||||||
| Receivable for unsettled trades | 3,101 | — | ||||||
| Other assets | 106 | — | ||||||
| Total assets | $ | 240,574 | $ | 327,997 | ||||
| LIABILITIES | ||||||||
| SBA-guaranteed debentures (net of deferred financing costs of |
$ | — | $ | 90,515 | ||||
| 2022 Notes (net of deferred financing costs of |
72,426 | 71,987 | ||||||
| 2022 Convertible Notes (net of deferred financing costs of |
51,823 | 51,536 | ||||||
| KeyBank Credit Facility (net of deferred financing costs of |
(402 | ) | (546 | ) | ||||
| Management and incentive fees payable | 1,181 | 3,842 | ||||||
| Interest and financing fees payable | 768 | 1,688 | ||||||
| Accounts payable and accrued expenses | 4,517 | 28 | ||||||
| Total liabilities | $ | 130,313 | $ | 219,050 | ||||
| Commitments and contingencies | ||||||||
| NET ASSETS | ||||||||
| Common stock, par value |
$ | 27 | $ | 27 | ||||
| Additional paid in capital | 229,481 | 229,481 | ||||||
| Total distributable loss | (119,247 | ) | (120,561 | ) | ||||
| Total net assets | $ | 110,261 | $ | 108,947 | ||||
| Total liabilities and net assets | $ | 240,574 | $ | 327,997 | ||||
| Net asset value per share | $ | 40.67 | $ | 40.19 | ||||
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
| For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| INVESTMENT INCOME | ||||||||||||||||
| Interest and fee income: | ||||||||||||||||
| Non-control/non-affiliate investments | $ | 2,078 | $ | 4,407 | $ | 8,349 | $ | 13,807 | ||||||||
| Affiliate investments | 1,072 | 1,721 | 3,565 | 5,032 | ||||||||||||
| Control investments | 98 | 103 | 293 | 309 | ||||||||||||
| Total interest and fee income | 3,248 | 6,231 | 12,207 | 19,148 | ||||||||||||
| Payment-in-kind interest and dividend income: | ||||||||||||||||
| Non-control/non-affiliate investments | — | 220 | 95 | 934 | ||||||||||||
| Affiliate investments | 100 | 242 | 298 | 610 | ||||||||||||
| Total payment-in-kind interest and dividend income | 100 | 462 | 393 | 1,544 | ||||||||||||
| Dividend income: | ||||||||||||||||
| Non-control/non-affiliate investments | — | — | 560 | — | ||||||||||||
| Affiliate investments | 24 | — | 179 | 25 | ||||||||||||
| Total dividend income | 24 | — | 739 | 25 | ||||||||||||
| Interest income from cash and cash equivalents | 1 | 1 | 3 | 50 | ||||||||||||
| Total investment income | 3,373 | 6,694 | 13,342 | 20,767 | ||||||||||||
| EXPENSES | ||||||||||||||||
| Interest and financing expenses | 2,296 | 3,423 | 8,061 | 12,134 | ||||||||||||
| Base management fee | 1,111 | 1,565 | 3,781 | 4,988 | ||||||||||||
| Administrative service fees | 200 | 350 | 900 | 1,050 | ||||||||||||
| General and administrative expenses | 1,276 | 614 | 2,859 | 2,475 | ||||||||||||
| Total expenses | 4,883 | 5,952 | 15,601 | 20,647 | ||||||||||||
| NET INVESTMENT (LOSS) INCOME | (1,510 | ) | 742 | (2,259 | ) | 120 | ||||||||||
| REALIZED AND UNREALIZED LOSS (GAIN) ON INVESTMENTS | ||||||||||||||||
| Net realized gain (loss) on investments: | ||||||||||||||||
| Non-control/non-affiliate investments | 7,426 | (12,344 | ) | (1,866 | ) | (25,518 | ) | |||||||||
| Affiliate investments | — | — | 2,215 | 1,341 | ||||||||||||
| Control investments | — | — | — | (484 | ) | |||||||||||
| Net realized gain (loss) on investments | 7,426 | (12,344 | ) | 349 | (24,661 | ) | ||||||||||
| Net unrealized (depreciation) appreciation investments: | ||||||||||||||||
| Non-control/non-affiliate investments | (6,150 | ) | 15,218 | 4,269 | 3,686 | |||||||||||
| Affiliate investments | (2,861 | ) | (156 | ) | 1,190 | (14,887 | ) | |||||||||
| Control investments | (391 | ) | (260 | ) | (1,420 | ) | (398 | ) | ||||||||
| Net unrealized (depreciation) appreciation on investments | (9,402 | ) | 14,802 | 4,039 | (11,599 | ) | ||||||||||
| Total net realized and unrealized (loss) gain on investments | (1,976 | ) | 2,458 | 4,388 | (36,260 | ) | ||||||||||
| Net realized gain (loss) on extinguishment of debt | — | 155 | (815 | ) | 155 | |||||||||||
| NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (3,486 | ) | $ | 3,355 | $ | 1,314 | $ | (35,985 | ) | ||||||
| NET (DECREASE) INCREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC AND DILUTED | $ | (1.29 | ) | $ | 1.24 | $ | 0.48 | $ | (13.29 | ) | ||||||
| WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC AND DILUTED | 2,711,068 | 2,711,068 | 2,711,068 | 2,708,532 | ||||||||||||
| DISTRIBUTIONS PAID PER SHARE | $ | — | $ | — | $ | — | $ | 1.50 | ||||||||
Source: Logan Ridge Finance Corporation