BlackRock Capital Investment Corporation

Good morning. My name is Lisa, and I will be your conference facilitator today for the BlackRock Capital Investment Corporation first quarter 2021 earnings call. Hosting the call will be James Keenan, Chairman and Interim Chief Executive Officer, Nick Singhal, President of the company, Abby Miller, Chief Financial Officer and Treasurer, Lawrence D. Paredes, General Counsel and Corporate Secretary of the company, Marshall Merriman, Head of the Portfolio Management, Jason Mehring, managing director and member of the company's investment committee. Lines have been placed on mute, and after the speakers complete their update, they will open the line for a question and answer session. In order to ask a question, you can press star one on your touchtone telephone. Thank you. Mr. Paredes, you may begin the call.

Good morning and welcome to the first quarter 2021 earnings conference call of BlackRock Capital Investment Corporation. or BCIC. Before we begin our remarks today, I would like to point out that certain comments made during this conference call and within corresponding documents contain forward-looking statements subject to risks and uncertainties. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may, and similar expressions. We call to your attention the fact that BCIC's actual results may differ from these statements. As you know, BCIC has filed with the SEC reports which list some of the factors which may cause BCIC's results to differ materially from these statements. BCIC assumes no duty to and does not undertake to update any forward-looking statements. Additionally, certain information discussed and presented may have been derived from third-party sources and has not been independently verified. Accordingly, BCIC makes no representation or warranty with respect to such information. Please note we've posted to our website an investor presentation that complements this call. Shortly, Jim will highlight some of the information contained in the presentation. The presentation can be accessed by going to our website at www.blackrockbkcc.com and clicking the April 2021 investor presentation link in the presentation section of the investors page. I would now like to turn the call over to Jim.

Thank you, Larry. Good morning, and thanks to all of you for joining our first quarter earnings call. I'll begin with an update on significant progress we have made towards our strategic goals, as well as a high-level view of our first quarter performance and our near-term priority. Nixon Gall will then give an update on our portfolio activity and status, and Abby Miller will follow with the discussion of our financial results in more detail before we open the call to questions. As we have emphasized in prior calls, one of our strategic priorities has been to rotate out of non-core legacy and other junior capital investments. Through 2020 and the first quarter of 2021, we have made substantial progress on this front. At quarter end, our non-core legacy assets have been reduced to just 8% of our total portfolio compared to 14% a year ago, with near-term visibility into further exits. Other junior capital exposure, excluding non-core assets, is now reduced to 13% of the portfolio from 38% a year ago. With the portfolio cleanup largely behind us, our focus has shifted more towards our other strategic priorities, of producing a steady, reliable income with reduced NAV volatility. As we redeploy capital, we remain committed to building a diversified portfolio of income-generating senior secured loans with an emphasis on first liens. At the close of first quarter, our portfolio was composed of 62 percent first lien loans, 24 percent second lien, and 14 percent junior capital. For comparison, at the end of 2019, only 34% of the portfolio was in first liens. We are achieving greater diversity as well, adding 11 new companies to the portfolio this quarter. We now have 60 portfolio companies compared to 47 at the end of 2019. The company has and continues to benefit from BlackRock's robust origination and underwriting platform. We believe that as we selectively deploy capital, we will reach our target of at least 70 portfolio companies and 70% to 75% firstly in mix. The credit quality of our current portfolio is strong, as we have been rotating the portfolio out of non-core assets and into diversified senior secured loans. Excluding our remaining investment in Gordon Brothers Finance Company, or GBFC, we have only one investment on non-accrual status. Notably, we sold our preferred stock position in the advantage insurance, which was previously on non-accrual at the prior quarter's mark. Essentially, the 5.5% of non-accrual at fair value we reported for the first quarter represents our remaining exposure to GBFC. Additionally, after reinstating our full cash dividend last quarter, we maintained the dividend at $0.10 per share this quarter. While leverage decreased during the quarter, we are confident our focus on steadily building up the portfolio with senior investments will, over time, generate stronger NII. We expect the NII run rate to grow into our dividend over the coming quarters as we redeploy freed up capital. On our last call, we had stated that our goal of extending our credit facility. We accomplished this goal on April 23rd, providing us much greater flexibility into managing our liabilities. The revolver now matures in April 2025. Importantly, the amendment removes the springing maturity ahead of the 2022 convertible note maturity and removes certain restrictions on prepayment or repurchase of the 2022 notes. Finally, our share repurchase plan kicked in again during the first quarter. We repurchased approximately 256,000 shares at an average price of $3.40 per share, including the brokerage commissions. I'll now turn the call over to Nixon Gall to discuss our portfolio activity in further detail.