BlackRock TCP Capital Corp.

Katie McGlynn, Director of the BlackRock TCP Capital Corporation's Investor Relations Team. Katie, please proceed.

Thank you, Jason. Before we begin, I'll note that this conference call may contain forward-looking statements based on the estimates and assumptions of management at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties, and actual results could differ materially from those projected. Any forward-looking statements made on this call are made as of today and are subject to change without notice. Earlier today, we issued our earnings release for the third quarter ended September 30, 2021. We also posted a supplemental earnings presentation to our website at tcpcapital.com. To view the slide presentation, which we will refer to on today's call, please click on the Investor Relations link and select Events and Presentations. These documents should be reviewed in conjunction with the company's Form 10-Q, which was filed with the SEC earlier today. I will now turn the call over to our Chairman and CEO, Raj Veg.

Thanks, Katie, and thank you all for joining us today for TCP's third quarter earnings call. Before we begin, I wanted to take a moment to thank our team for all of their hard work and dedication through this challenging period. As many of you know, I have served as TCPC's president and COO since our IPO almost 10 years ago and have been a senior member of the investment team for over 15 years. It has been very rewarding to be a part of a group that has consistently delivered for our investors, and I look forward to serving as TCPC's chairman and CEO going forward. Also, I'm excited to formally welcome my longtime partner, Phil Tsang, as president and COO and reiterate my congratulations to our CFO, Eric Cuellar, for his new role. As part of my commentary, I will be continuing our quarterly tradition and begin with a few comments on the market environment as well as highlights from our third quarter. I will then turn the call over to Phil, who will provide an update on our portfolio and investment activity. Eric will then review our financial results and our capital and liquidity positioning in greater detail. After our prepared remarks, we will all be available to take your questions. Now, turning to the current market environment. Overall, activity levels in the middle market remain very robust. Direct lending and broader private capital markets have clearly emerged from the global pandemic as a reliable and well-positioned source of financing for a broad spectrum of businesses. This has typically been the case at times other avenues of financing have been less accessible, but appears now to be an even more systemic shift as a wider array of companies are looking to private credit as a primary source of capital. We continue to work with a broad range of businesses as they seek to finance growth, make acquisitions, or simply refinance existing debt. We also believe that our investors benefit from these efforts as our direct lending investments continue to deliver a reliable and resilient source of income. I'd now like to review our third quarter earnings and discuss some highlights from the quarter. In summary, TCPC delivered another solid quarter of results. First, net investment income in the quarter was $18.7 million, or 32 cents per share, which again exceeded our dividend of 30 cents per share. Second, portfolio credit quality remained strong. While we added one additional portfolio company to our non-accruals during the quarter, non-accruals remain low at just 1% of the portfolio at fair value. Third, and as Phil will discuss in more detail, investment activity continued to be robust. We deployed more than $150 million in capital during the quarter and continued to identify attractive opportunities across our target sectors. Direct lending remains a relationship business, and we continue to benefit from the more than two decades of developing and cultivating strong relationships. We also continue to benefit from the extensive resources of the broader BlackRock platform. In the third quarter, we also experienced an elevated level of refinancing activity with approximately $227 million of repayments, resulting in prepayments and exits that outpaced deployment and slightly reduced our total portfolio size quarter over quarter. Fourth, we continue to manage our balance sheet and liability profile. In August, we issued a $150 million add-on to our existing February 2026 notes, at a yield to maturity of 2.475 percent, bringing the total issuance to $325 million. In conjunction with this financing, we redeemed $175 million of outstanding notes that were due next August, which had a much higher coupon of 4.8 percent. We will continue to seek ways to diversify and enhance our strong balance sheet and liquidity positioning given overall market conditions. And finally, we have maintained NAV stability. Although our NAV declined 80 basis points during the quarter, this was primarily a result of a $6.2 million loss associated with prepayment charges on the early redemption of the August 2022 notes. Excluding the impact of this charge, NAV was essentially flat quarter over quarter, and year over year is up approximately 11%. It's also worth noting that we continue to exceed our total return hurdle. As a reminder, TCPC maintains a 7% hurdle rate with a cumulative look back based on total returns, including realized and unrealized gains and losses. Since 2012, we have generated a 10.7% annualized return on invested assets and a total annualized cash return of 9.7%, consistently outperforming the Wells Fargo BDC index. And in the last 12 months alone, TCPC has delivered a 19% ROE. Outside of performance and financial results, and as an indication of our commitment to strong corporate governance, TCPC's Board of Directors recently elected Eric Drout to serve in the newly created role of Lead Independent Director, effective October 28th. Eric's outstanding commitment to serving TCPC shareholders throughout his more than 10 years of service on the Board has been invaluable, and we look forward to his continued contributions as Lead Independent Director. In conjunction with this appointment, the Board also appointed existing Board members Peter Schwab as Chair of the Governance and Compensation Committee and Freddie Reese as Chair of the Audit Committee. Now I will turn it over to Phil to discuss our investment activity and portfolio positioning.