Results for the Quarter and Fiscal Year Ended December 31, 2024 and Other Recent Highlights:
- Net investment income per share for the quarter was $0.40
- Net asset value per share as of the end of the quarter was $14.98, compared to $15.10 as of September 30, 2024, a decrease of 0.8%
- New investment commitments made during the quarter totaled $255 million(1)
- Gross fundings, excluding revolver fundings(2), totaled $248 million for the quarter
- Net repayments, including revolvers(2), totaled $6 million for the quarter
- Net leverage(3) was 1.16x as of December 31, 2024
- On February 21, 2025, the Board of Directors (the "Board”) declared a dividend of $0.38 per share payable on March 27, 2025 to stockholders of record as of March 11, 2025(4)
- On February 24, 2025, the Company closed its second Collateralized Loan Obligation ("CLO”) transaction, MFIC Bethesda CLO 2 LLC (the "Bethesda CLO 2 Issuer”), a $529.6 million CLO secured by middle market loans, adding $399.0 million of secured debt capital with a weighted average price of SOFR + 161 basis points(5)
On February 21, 2025, the Board declared a dividend of $0.38 per share payable on March 27, 2025 to stockholders of record as of March 11, 2025.
Mr. Tanner Powell, the Company's Chief Executive Officer, stated, "In the December quarter, we generated solid net investment income despite a modest amount of fee income and the impact of lower base rates. The vast majority of our portfolio is performing well and we are observing stability in certain credit metrics.” Mr. Powell continued, "MFIC is fortunate to have access to the significant volume of loans originated by MidCap Financial, a leading middle market lender managed by an affiliate of Apollo, which we believe provides MFIC with a significant deal sourcing advantage. While our market remains competitive, we observed a modest increase in spreads on new commitments compared to the previous quarter, at what we believe to be attractive leverage entry points. We took advantage of strength in the liquid credit markets to continue selling certain assets acquired from our recently completed mergers with Apollo Senior Floating Rate Fund, Inc. and Apollo Tactical Income Fund, Inc. and prudently deployed proceeds from these sales, along with the investment capacity generated from the mergers, into first lien floating rate middle market loans originated by MidCap Financial. We have a clear and straightforward plan to gradually increase leverage over the coming quarters and we believe MFIC's future results are well-positioned to benefit as we re-lever back to our target level.”
Mr. Gregory W. Hunt, the Company's Chief Financial Officer, said, "We are pleased to announce MFIC closed its second on balance sheet CLO transaction earlier this week. This CLO transaction adds attractive term-based financing at what we believe to be among the tightest levels achieved for a middle market CLO, reflecting the high quality of the underlying loans. MFIC significantly benefited from MidCap Financial and Apollo Global's expertise in CLO management and structuring.”
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| (1) | Commitments made for the direct origination portfolio. |
| (2) | During the quarter ended December 31, 2024, direct origination revolver fundings totaled $55 million, direct origination revolver repayments totaled $56 million. |
| (3) | The Company's net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. |
| (4) | There can be no assurances that the Board will continue to declare a base dividend of $0.38 per share. |
| (5) | The Company retained all Class D Notes and all Subordinated Notes in the CLO transaction. |
| FINANCIAL HIGHLIGHTS | ||||||||||||||||||
| ($ in billions, except per share data) | December 31,
2024 | September 30,
2024 | June 30, 2024 | March 31,
2024 | December 31, 2023 | |||||||||||||
| Total assets | $ | 3.19 | $ | 3.22 | $ | 2.55 | $ | 2.45 | $ | 2.50 | ||||||||
| Investment portfolio (fair value) | $ | 3.01 | $ | 3.03 | $ | 2.44 | $ | 2.35 | $ | 2.33 | ||||||||
| Debt outstanding | $ | 1.75 | $ | 1.77 | $ | 1.51 | $ | 1.41 | $ | 1.46 | ||||||||
| Net assets | $ | 1.40 | $ | 1.42 | $ | 1.00 | $ | 1.01 | $ | 1.01 | ||||||||
| Net asset value per share | $ | 14.98 | $ | 15.10 | $ | 15.38 | $ | 15.42 | $ | 15.41 | ||||||||
| Debt-to-equity ratio | 1.25 x | 1.25 x | 1.51 x | 1.40 x | 1.45 x | |||||||||||||
| Net leverage ratio (1) | 1.16 x | 1.16 x | 1.45 x | 1.35 x | 1.34 x | |||||||||||||
(1) The Company's net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
| PORTFOLIO AND INVESTMENT ACTIVITY | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| (in millions)* | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Investments made in portfolio companies | $ | 303.5 | $ | 134.1 | $ | 1,613.6 | $ | 417.1 | ||||||||
| Investments sold | (82.9 | ) | - | (271.5 | ) | - | ||||||||||
| Net activity before repaid investments | 220.6 | 134.1 | 1,342.1 | 417.1 | ||||||||||||
| Investments repaid | (226.9 | ) | (180.7 | ) | (657.5 | ) | (504.3 | ) | ||||||||
| Net investment activity | $ | (6.4 | ) | $ | (46.5 | ) | $ | 684.6 | $ | (87.2 | ) | |||||
| Portfolio companies, at beginning of period | 250 | 149 | 152 | 135 | ||||||||||||
| Number of investments in new portfolio companies | 11 | 10 | 167 | 32 | ||||||||||||
| Number of exited companies | (28 | ) | (7 | ) | (86 | ) | (15 | ) | ||||||||
| Portfolio companies at end of period | 233 | 152 | 233 | 152 | ||||||||||||
| Number of investments in existing portfolio companies | 83 | 48 | 130 | 84 | ||||||||||||
* Totals may not foot due to rounding.
| OPERATING RESULTS | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| (in millions)* | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net investment income | $ | 37.1 | $ | 29.8 | $ | 133.3 | $ | 116.0 | ||||||||
| Net realized and change in unrealized gains (losses) | (13.0 | ) | 3.5 | (34.5 | ) | 2.8 | ||||||||||
| Net increase in net assets resulting from operations | $ | 24.1 | $ | 33.3 | $ | 98.8 | $ | 118.8 | ||||||||
| (per share)* (1) | ||||||||||||||||
| Net investment income on per average share basis | $ | 0.40 | $ | 0.46 | $ | 1.71 | $ | 1.78 | ||||||||
| Net realized and change in unrealized gain (loss) per share | (0.14 | ) | 0.05 | (0.44 | ) | 0.04 | ||||||||||
| Earnings per share - basic | $ | 0.26 | $ | 0.51 | $ | 1.27 | $ | 1.82 | ||||||||
* Totals may not foot due to rounding.
(1) Based on the weighted average number of shares outstanding for the period presented.
SHARE REPURCHASE PROGRAM*
During the three months ended December 31, 2024, the Company did not repurchase any shares.
Since the inception of the share repurchase program and through February 24, 2025, the Company repurchased 15,593,120 shares at a weighted average price per share of $15.91, inclusive of commissions, for a total cost of $248.1 million, leaving a maximum of $26.9 million available for future purchases under the current Board authorization of $275 million.
* Share figures have been adjusted for the 1-for-3 reverse stock split which was completed after market close on November 30, 2018.
LIQUIDITY
As of December 31, 2024, the Company's outstanding debt obligations, excluding deferred financing cost and debt discount of $5.5 million, totaled $1.757 billion which was comprised of $350 million of Senior Unsecured Notes (the "2025 Notes”) which will mature on March 3, 2025, $125 million of Unsecured Notes (the "2026 Notes”) which will mature on July 16, 2026, $80 million of Unsecured Notes (the "2028 Notes”) which will mature on December 15, 2028, $232 million outstanding Class A-1 Notes in MFIC Bethesda CLO 1 LLC and $970.1 million outstanding under the multi-currency revolving credit facility (the "Facility”). As of December 31, 2024, $7.8 million in standby letters of credit were issued through the Facility. The available remaining commitment under the Facility was $682.0 million as of December 31, 2024, which is subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company's portfolio.
On February 24, 2025, the Company completed a $529.6 million CLO transaction, a form of secured financing incurred by Bethesda CLO 2 Issuer, an indirect wholly owned, consolidated subsidiary of the Company. The notes offered by Bethesda CLO 2 Issuer in connection with the CLO transaction consist of $304.5 million of AAA(sf) Class A-1 Senior Secured Floating Rate Notes due 2037, which bear interest at the three-month SOFR plus 1.48%, $21.0 million of AAA(sf) Class A-2 Senior Secured Floating Rate Notes due 2037, which bear interest at three-month SOFR plus 1.70%, $31.5 million of AA(sf) Class B Senior Secured Floating Rate Notes due 2037, which bear interest at three-month SOFR plus 1.85%, $42 million of A(sf) Class C Senior Secured Floating Rate Notes due 2037, which bear interest at three-month SOFR plus 2.30%, $31.5 million of BBB-(sf) Class D Senior Secured Floating Rate Notes due 2037, which bear interest at three-month SOFR plus 3.75% and $99.1 million of Subordinated notes due 2125, which do not bear interest. The notes offered in the CLO transaction are structured as follows:
| Class | Par Amount ($ in millions) | % of Capital Structure | Coupon | Expected Rating (S&P/Fitch) | Price | |||||||||
| Class A-1 Notes | $ | 304.50 | 57.5 | % | 3M SOFR + 1.48% | AAA/AAA | 100.00 | % | ||||||
| Class A-2 Notes | 21.00 | 4.0 | % | 3M SOFR + 1.70% | AAA/NR | 100.00 | % | |||||||
| Class B Notes | 31.50 | 5.9 | % | 3M SOFR + 1.85% | AA/NR | 100.00 | % | |||||||
| Class C Notes | 42.00 | 7.9 | % | 3M SOFR + 2.30% | A/NR | 100.00 | % | |||||||
| Class D Notes | 31.50 | 5.9 | % | 3M SOFR + 3.75% | BBB-/NR | 100.00 | % | |||||||
| Subordinated Notes | 99.10 | 18.7 | % | N/A | NR | 100.00 | % | |||||||
| Total | $ | 529.60 | ||||||||||||
CONFERENCE CALL / WEBCAST AT 8:30