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BlackRock TCP Capital de-risks portfolio after $523 million transfer
The company says it cut net leverage from 1.38x to a pro forma 0.4x using $152 million in proceeds and CLO liability deconsolidation.
BlackRock TCP Capital Corp. (TCPC) reported that it completed a milestone transaction transferring $523 million of investments to a continuation vehicle, equal to 48% of its pre-transaction debt portfolio, as part of a strategic push to de-risk its balance sheet.
Management said it used $152 million in proceeds and the deconsolidation of CLO liabilities to reduce net leverage from 1.38x to a pro forma 0.4x. The transaction was priced at 95% of the 12/31/2025 gross fair market value, contributing to a 10.4% NAV decline to create immediate financial flexibility, according to the earnings call summary from Yahoo Finance.
The company linked the NAV decline to issuer-specific developments at Pluralsight, PVHC, and Zillion, plus realized losses from exiting AutoAlert and BCom. It also reported non-accruals improved to 1.6% of the portfolio at fair value after restructuring and repayment activity tied to Thrasio.
BlackRock TCP Capital said it expects net leverage to decline further to less than 0.3x after the anticipated closure of the Domo transaction in the fourth quarter. It also said it surrendered its SBIC license and repaid the remaining $107 million in debt, citing limited benefits and an effort to reduce capital structure complexity.