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TCP Capital Corp. Message Board

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  • sfruehling1 sfruehling1 Feb 7, 2013 11:15 PM Flag

    Worth A Look

    Jan,

    Thanks for the analysis. It has been helpful. I like TCPC's shareholder friendly stances such as waiving its incentive fees for one year. Their current $.35/qtr ($1.40/yr) dividend is covered by their projected NII ($1.56) for 2013. I am somewhat concerned they may have trouble maintaining or increasing their current dividend if they have to start borrowing at a more typical market rate. From their 3rd qtr 10-Q, it appears they are borrowing $182 +/- Million at about 1.5% (Libor + .44% to .85%) . $48M is on a revolver that matures in July 2014 and $134M on a special Preferred Equity Fund that matures in July 2016. If they presently had to borrow at a more typical market rate, say 5.5%; their interest expense would increase by about $.34/sh ($7.28 M/21.5 M sh) and their dividend would not be covered. That said, I guess their interest rate is likely to stay lower than average for several years and there are numerous ways they could increase NII. I am contemplating taking a small position.

 
TCPC
14.63+0.17(+1.18%)May 27 4:00 PMEDT