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Operator
Thank you for joining today's InvestCorp Credit Management BDC Third Quarter Fiscal Year 2024 Earnings Call. It is now my pleasure to turn the floor over to Mr. Walter Timm, CFO.
Walter Timm
Thank you, Operator. Welcome, everyone, to InvestCorp Credit Management BDC's Fourth Quarter and Full Year 2024 Earnings Call. I am joined by Shaquille Shaikh, President and Chief Executive Officer of the company. I would like to remind everyone that today's call is being fully recorded and that this call is the property of the Federal Credit Management CDC. Any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by visiting our investor relations page on our website, icmbdc.com. I would also like to call your attention to the safe harbor disclosure in our press release regarding forward-looking information and remind everyone that today's call may include forward-looking statements of perception. Actual results may differ materially from these projections. We will not update forward-looking statements unless required by law, so if you need copies of the latest SEC products, please visit our Investor Relations page on our website. The format for today's call is as follows. Sue Hale will provide an overall business and portfolio summary, and then I will provide an overall view of our results summarizing the financials, followed by a Q&A. At this time, I would like to turn the call over to Sue Hale.
Sue Hale
Thank you, Walt, and thank you to everyone for joining us today to discuss the results for the fourth quarter of fiscal year 2024 earnings. I'm proud of the team's efforts during fiscal year 2024 in driving a turnaround in the portfolio. We successfully executed our portfolio rotation strategy, which we've been discussing over the past year, resulting in the rotation of about a third of our portfolio into larger, more stable credits. This strategic shift has positioned ourselves for the future. Despite a challenging market environment, marked by low new deal activity and intense competition for quality credit investments, the team was able to deploy approximately $56 billion of capital by leveraging our proprietary relationships with sponsors and club partners. We were able to score attractive opportunities for our meals, refinancing, and secondary investments. Notably, our discipline approach has paid off as our investments on non-approval as percentage of fair market value declined significantly from 10.6% at the end of our first fiscal quarter to 5% in the current fiscal quarter, reflecting the stability and resilience of our portfolio. During our fiscal year-end on June 30, 2024, IC&E generated net investment income of $6.6 billion of 46 cents per share. This was a decrease of approximately 30% from the prior year's net investment income, largely driven by market spread, tightening and shifting into larger, more stable credits, which on average have a lower spread. The weighted average spread declined from approximately 6.2% as of June 30, 2023 to 5% as of the end of the current quarter. Net asset value share declined approximately 14% to $5.21 per share from $6.09 per share last year. In terms of our fourth quarter results, we generated net investment income of $1.3 million, approximately $0.09 per share. NAB's share declined approximately 5% from the previous quarter. The decline in NAB was driven by two factors. First, the decline was driven by locked market developments on a few equity positions, while all but one of our credit positions remained relatively stable quarter over quarter. Second, the timing of several refinancings and the ramp-up of new deals were back-end loaded during the quarter affecting overall NII. Despite these factors, our credit portfolio continues to show stability and resilience as the underlying performance of our borrowers has improved over the past quarter. The median EBITDA of the portfolio increased from approximately $47 million last quarter to $55 million in the current quarter, and our weighted average loan-to-value ratio for performing debt investments is approximately 58%, an increase from 48% last quarter. Over the same period, the weighted average net leverage of the portfolio increased from 4.2 to 5.1 as we continue shifting towards larger credits that are backed by sponsors that we know. The market remains highly competitive, with all lenders experiencing some level of spread compression. We saw a number of leads financing the third in our portfolio, especially the last two quarters, primarily consisting of legacy portfolio companies. Competition for new investments continues to be intense, partly due to LPO and M&A volumes remaining at the lower average levels. Our team remains disciplined, originating new investments to offset the repayments and maintain leverage in our target range. While new deals remain competitive, we are committed to maintaining strong structural protections in our documentation and capital structures. During the quarter ended June 30th, we invested in two new portfolio companies and three existing portfolio companies. Funding for new investments totaled approximately $17.9 million at cost, with a weighted average yield of approximately 10.2%. In the same period, we fully realized three portfolio company investments totaling $22.1 million in proceeds with an IRR of approximately 11.3%. First, we invested in the 13th Term Loan of Crisis Prevention Institute, or CPI, to support the refinancing of the company's cap restructuring. CPI provides de-escalation training and consulting for human care professionals. CPI is a vendor-proof portfolio company. A yield at cost is approximately 10.4%. We increased our existing position in the first week internal of Multicolor Corp., also known as NAPF, only to take advantage of an extractive price in the secondary market. A yield at cost is approximately 11%. We also participated in the refinancing of an existing portfolio company, Godstar. Our yielded cost is 10.4% and the realized IRR on our original investment was 12.8%. We made an investment in the first lean term loan, B10, of Assuring. Assuring is the leading provider of device insurance, warranty, and support services for cell phones, consumer electronics, and home appliances. We put the purchase insurance in the secondary market at an attractive price. Our yielded cost is approximately 9.8%. We also made a small follow-on equity co-investment in an InvestCorp North America private equity portfolio company listed on our SOR as Pegasus Aggregator Holdings LV. Lastly, we realized that firstly, in term loan positions at Empire Autos and Opry, both of which refinanced during the quarter. we have been invested in both these companies since March and June of 2019, respectively. Our realized IRR on Empire was approximately 10.5%, and our realized IRR on Opry was approximately 11.8%. After the quarter ends, our net investment activity remains at a healthy pace, which we will discuss in the next quarter. As of June 30th, Our largest industry concentrations by fair market value were commercial services and supplies at 13.5%, professional services at 11.2%, printing company and distributors at 9.1%, containers and packaging at 7.3%, qualified food products at 4.8%, and entertainment at 4.8%. Our portfolio companies are in 23 GICS industries as of quarter end, including our equity in one position, which is an increase of one industry from the previous quarter. I would now like to turn the call back over to the board to discuss our financial results.
Walter Timm
Thank you, Gail. For the quarter end of G30 2024, the fair value of our portfolio was $184.6 million compared to $192.2 on March 31st. Our net assets were $75 million, a decrease of $4.1 billion per quarter. Portfolios net decrease in net assets from operations this quarter was approximately $3.5 million. The weighted average yield of our debt portfolio was $12.33, a decrease from $12.36 in the previous quarter ended March 31st. As of June 30th, our portfolio consisted of 41 borrowers. Approximately 85% of final investments were in personal and the remaining 50% were in equity, once in other positions. 97% of our debt portfolio was invested in floating rate instruments, 3% in fixed-rate instruments. The weighted average spread in our debt investments is 5%, and the weighted average flow was 10%. Our average portfolio company's position on a fair market value basis was approximately $4.6 million, and our largest portfolio investment on a fair market value basis is BioPlan with $13.5 million. We are pleased to announce that on September 18, 2024, The board directors have declared a distribution for the quarter ended September 30th, 2024 of $0.12 per share. It's payable from November 6th, 2024 to the staff called as a record as of October 16th. We've had a gross leverage of 1.42x and net leverage of 1.35x as of June 30th, compared to the 1.42x gross and 1.26x net percentage in this quarter. With respect to our liquidity, as of June 30th, we had approximately $5.1 million in cash, of which approximately $4.9 million was our shipping cash, with $57 million of capacity under our revolving credit with Capital One. Additional information regarding the competition of our portfolio is included on our form 10-K, which was filed earlier this week. I would also like to address a change of our independent auditor. As a part of the ongoing commitment to Through best practices and compliance, we have engaged KCMG as our new independent partner. We want to assure all stakeholders that the change is not related to any issues with our financial statements or timing practices. It is simply a reflection of our regular review of service providers to ensure that we are receiving the best possible expertise and support. We are happy to address any questions on the matter at the end of the complaint remarks. And with that, I'd like to turn the call over to Dr. Steele.
Sue Hale
Thanks, Mark. This year, we have been successful in rotating and diversifying our portfolio into more stable credits. As we look towards our next fiscal year, we are excited about our pipeline and our capacity to continually invest in high-quality opportunities. As always, our top priority has been to continue to be focused on capital presentation and maintaining a stable dividend. That concludes our prepared remarks. Luke, please open the line up for Q&A.
Operator
Ladies and gentlemen, at this time we will conduct the question and answer session. If you would like to state a question, please press 7 pound on your phone now and you will be placed in the queue in the order received or press 7 pound again at any time to remove yourself from the queue. Please listen for your name to be announced and be prepared to ask your question when prompted. We are now ready to begin. Our first question comes from Mr. Chris Nolan at the Leidenberg Tallman. Go ahead, sir.
Chris Nolan
Hi. Well, congratulations on the step up to the new role. The lower yields on the new investments, is that should be used as a good proxy for where the direction of investment yields going forward?
Sue Hale
Hi, Chris. This is Suhail. I think the way we should think about those is, you know, it's market reflection. We're seeing spreads come in for new deals probably 50 to 75 basis points across the board. I mean, we can measure all our liabilities should also be following that at some point. So we think that the market is you know, it's exciting. I mean, there's a lot more capital available, not enough fields and supplies, right? My guess is where it is today is what we should continue to see for the rest of the year. Don't have a crystal ball beyond that just yet. We do expect volumes to pick up and fields to pick up and, you know, just given our own pipeline of activity, we think at some point we're going to be, you know, might see some spread widening or selection in the way we look at credits.
Chris Nolan
And what would be the catalyst for the spread widening? Would it be lower funding costs using the facility or would be a more attractive investment for... I think both would be a cost, yeah. Okay, so we should expect a lower funding cost from the rate change by the Fed to impact your facility, but also you expect better days for mudgers ahead.
Sue Hale
Correct.
Chris Nolan
Okay. That's it for me. Thank you very much.
Sue Hale
Thank you.
Operator
Thank you very much. Again, if you have any questions, please press 7-pound on your phone, and we will open up your line. Again, that's 7-pound. I don't see any other questions for now.
Sue Hale
Thank you, Luke. Thank you, everyone, for participating in the call. We look forward to announcing our next quarter's earnings and look forward to talking again next quarter. Thank you again. Thank you, Luke.
Operator
Thank you, everyone. You're welcome. And this concludes today's conference call. Thank you everyone for attending.
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