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Edited Transcript of TCPC earnings conference call or presentation 8-May-19 5:00pm GMT

Q1 2019 BlackRock TCP Capital Corp Earnings Call

Santa Monica Jun 13, 2019 (Thomson StreetEvents) -- Edited Transcript of BlackRock TCP Capital Corp earnings conference call or presentation Wednesday, May 8, 2019 at 5:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Howard Marshall Levkowitz

BlackRock TCP Capital Corp. - Chairman & CEO

* Kathleen McGlynn

BlackRock TCP Capital Corp. - VP of IR

* Paul Leslie Davis

BlackRock TCP Capital Corp. - CFO

* Rajneesh Vig

Tennenbaum Capital Partners, LLC - Managing Partner and President

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Conference Call Participants

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* Christoph M. Kotowski

Oppenheimer & Co. Inc., Research Division - MD and Senior Analyst

* Christopher Robert Testa

National Securities Corporation, Research Division - Equity Research Analyst

* Finian Patrick O'Shea

Wells Fargo Securities, LLC, Research Division - Associate Analyst

* Leslie Shea Vandegrift

Raymond James & Associates, Inc., Research Division - Senior Research Associate

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Presentation

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Operator [1]

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Ladies and gentlemen, good afternoon. Welcome, everyone, to BlackRock's TCP Capital Corp. First Quarter 2019 Earnings Conference Call. Today's conference call is being recorded for replay purposes. (Operator Instructions)

And now I would like to turn the call over to Katie McGlynn, Director of the BlackRock TCP Capital Corp. Global Investor Relations Team. Katie, please proceed.

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Kathleen McGlynn, BlackRock TCP Capital Corp. - VP of IR [2]

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Thank you, Lauren. 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. This morning, we issued our earnings release for the first quarter ended March 31, 2019. We also posted a supplemental earning's 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 & Presentations.

These documents should be reviewed in conjunction with the Company's Form 10-Q, which was filed with the SEC this morning.

I will now turn the call over to our Chairman and CEO, Howard Lefkowitz.

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Howard Marshall Levkowitz, BlackRock TCP Capital Corp. - Chairman & CEO [3]

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Thank you, Katie. I'm here with our TCPC team, and we thank everyone for participating on our call today. We will begin with an overview of our key accomplishment year-to-date, and then our CFO, Paul Davis, will review our financial results for the first quarter.

After Paul's comments, I will provide some closing remarks before opening the call to questions. Our solid first quarter earnings reflect our disciplined approach to investing and demonstrate our consistent performance and ability to continually cover our dividend.

Our strong results also demonstrate the expanded access to deal flow and additional resources we are leveraging as part of the BlackRock platform.

Now let's begin with highlights from the first quarter, which are summarized on Page 4 of our slide presentation. We earned net investment income of $0.40 per share in the first quarter, outearning our dividend by $0.04. This was the 28th consecutive quarter that our net investment income covered our dividend. And today, we declared a second quarter dividend of $0.36 per share payable on June 28 to shareholders of record as of June 14.

We delivered another strong quarter of originations totaling $150 million. The depth and breadth of our industry expertise enables us to provide flexible and tailored financing solutions that both attract new borrowers and help us deepen readerships with existing clients.

Dispositions in the quarter were $146 million, resulting in net acquisitions of $4 million. 1 year ago, we announced our advisor's acquisition by BlackRock.

As we leverage relationships across the BlackRock platform, we are generating a meaningful increase in deal flow. This enables us to continue to be highly selective and to further emphasize diversification. It also strengthens our ability to focus on unique, high-quality investment opportunities.

Turning to our investment portfolio on Slide 6. At quarter end, our or portfolio had a fair market value of $1.6 billion, 92% of which was in senior secured debt.

We held investments in 95 companies across a wide variety of industries. Our largest position represented only 3.4% of the portfolio and, taken together, our 5 largest positions represented only 15.8% of the portfolio.

Diversification always has been and always will be an important factor in how we construct our portfolio.

To further demonstrate our emphasis on diversification, as you can see on the chart on the left side of Slide 6, our recurring income is distributed across a diverse set of portfolio of companies. We are not reliant on income from any one portfolio company. In fact, on an individual company basis, well over half of our portfolio of companies, each contribute less than 1% to our recurring income.

At quarter end, 92% of our debt investments were floating rate as demonstrated on Slide 7. Over the last several years, we have strategically positioned our portfolio to primarily floating-rate investments. The credit quality of our portfolio remains strong. As of March 31, 2019, we had no loans on nonaccrual.

Finally, earlier this week, we increased the capacity of both our credit facilities and lowered the rate on our SVCP facility by 25 basis points and extended the maturity to May 2023. Just

as we emphasize diversity in our investments, we have always looked for diverse sources of funding that provide us with the flexibility, while maintaining a low cost of capital.

As I noted earlier, we deployed at $150 million in the first quarter, substantially all of which was in senior secured loans and notes. This included 10 new investments, 60% of which were with existing borrowers. Follow-on investments and existing portfolio of companies continue to be an important source of investment opportunities and reflect our strong borrower relationships and the value we delivered to them. We also continue to focus on investments where we take the lead or co-lead in negotiations, leveraging our industry expertise and allowing us to set deal terms with solid creditor protections.

Our top 5 investments in the first quarter demonstrate our commitment to maintaining a diversified portfolio and lending at the top of the capital structure. They include a $25 million senior secured loan to DiscoverOrg, a global provider of marketing and sales intelligence tools, and a company that we were very familiar with as an existing lender; a $23 million senior secured loan to an existing borrower Certify, Inc., which provides expense management solutions; a $20 million senior secured loan plus warrants to FinancialForce; a provider of enterprise resource planning tools; and an $18 million senior secured loan to refinance our existing borrower Higginbotham, an independent retail insurance broker; and a $9 million senior secured loan to Apptio, a developer of business management tools.

Our other investments in the first quarter provide exposure to a variety of industries, including health care, financial services, business services and entertainment. As a whole, our first quarter investment demonstrate our emphasis on noncyclical industries. Dispositions in the quarter were $146 million. These include payoffs of a $30 million loan to Mesa Air and our $25 million loan to Pacific Union Financial as well as an $18 million pay down of the majority of our loan to Southern Theaters.

Both new and exited investments during the quarter coincidently had a weighted average effective yield of 10.1%. The overall effective yield on our debt portfolio at quarter end remained unchanged from the prior quarter at 11.4%.

TCPC's consistent and strong performance is in large part due to our long-term relationships with deal sources, portfolio of companies and other constituents. Our deep industry knowledge and our disciplined approach to sourcing, underwriting and managing our portfolio. As shown on Slide 8, our dividends have returned $10.28 per share since our IPO in 2012. And then as demonstrated on Slide 9, TCPC has outperformed the Wells Fargo BDC index by 37% over the same period.

Now I will turn the call over to Paul, who will discuss our financial results. Paul?

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Paul Leslie Davis, BlackRock TCP Capital Corp. - CFO [4]

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Thanks, Howard, and hello, everyone. Starting on Slide 14, we generated net investment income in the first quarter of $0.40 per share, exceeding our dividend of $0.36 per share. This extends our 7-year record of covering our regular dividend every quarter since we went public.

Over this period, on a cumulative basis, we have outearned our dividends by an aggregate of $36 million or $0.62 per share based on total shares outstanding at year-end. Investment income for the first quarter was $0.81 per share, substantially all of which was interest income. This included recurring cash interest of $0.67, recurring discount and fee amortization of $0.04 and recurring PIK income of $0.04.

We also generated $0.04 per share from prepayment income, including both prepayment fees and unamortized OID. Our income recognition follows our conservative policy of generally amortizing upfront economics over the life of investment rather than recognizing all of it at the time the investment is made. Operating expenses for the first quarter were $0.41 per share and included incentive compensation of $0.09 per share, as well as interest and other debt expenses of $0.18 per share for net investment income of $0.40 per share.

As we discussed last quarter, on February 8, our shareholders approved a reduction to our fee raise. We reduced our incentive fee rate from 20% to 17.5%, our management fee rate from 1.5% to 1% on assets financed using leverage of 1:1, and our cumulative hurdle rate from 8% to 7%. These changes were reflected in our first quarter results for the period beginning February 9.

Net unrealized gains of $1.1 million or $0.02 per share resulted primarily from a partial recovery following the market volatility at year-end. This was offset in part by a markdown of $2.5 million on our investment in Green Biologics.

Net unrealized losses were $0.3 million in the quarter. Our credit quality remained strong. None of our debt investments were on nonaccrual status at March 31.

Turning to Slide 18, we had total liquidity of $245 million at quarter end. This included available leverage of $228.5 million and cash of $26.8 million reduced by net pending settlements of $10.3 million. As Howard noted, we were pleased to expand both of our credit facilities by $50 million each for an aggregate increase of $100 million and to reduce the interest rate of our SVCP facility by 25 basis points to LIBOR plus 200. We also extended the maturity of our SVCP facility to May 2023.

Increasing our credit facility capacity further expands our diverse leverage program, which includes 2 cost -- 2 low-cost credit facilities, 2 convertible note issuances, a straight unsecured note issuance and an SBA program. Outstanding draws on our $150 million SBA programs remained at $98 million at March 31 as we continue to recycle capital in the structure.

Regulatory leverage at year-end, which is net of SBIC debt was 0.86x common equity on a gross basis and 0.84x net of cash and outstanding trades. In connection with our vote to reduce our fee rates in February, our shareholders also approved a reduction of our minimum asset coverage ratio from 200% to 150%, which went into effect on February 9.

As a result, we now have additional flexibility to modestly increase our leverage should it be prudent in the investment environment. And with investment grade ratings from both Moody's and S&P, we're proud to be one of only a few BDCs with both 2:1 leverage flexibility and an investment grade rating from either agency.

Also during the quarter, we made modest share repurchases under our algorithm-based share repurchase program when our stock traded below NAV.

I'll now turn the call back over to Howard.

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Howard Marshall Levkowitz, BlackRock TCP Capital Corp. - Chairman & CEO [5]

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Thanks, Paul. Our Annual Shareholder Meeting is on May 30 in Santa Monica, California, and all our shareholders are invited to attend. Consistent with prior years and in line with many of our BDC peers, we have included in a proxy of proposal for shareholder approval to issue up to 25% of our common shares on any given date over the next 12 months at a price below net asset value. The purpose of the below NAV issuance proposal and our proxy is to provide flexibility.

To be clear, at this point, we do not intend to issue equity below NAV and certainly not unless it's accretive to our shareholders. This is basically an insurance policy, which our shareholders have approved every year since we went public.

The first quarter of 2019 was characteristic of what our shareholders have come to expect from TCPC, consistent dividend coverage, disciplined investing and strong credit quality. Fundamental macroeconomic indicators generally remain healthy; however, we continue to observe idiosyncratic company and industry shifts that serve as a reminder of the importance of our patient and disciplined investment approach. This patience and discipline serves as the underpinning of our strong and consistent performance. We make investments decision based on a comprehensive of analysis of each company, its management team and strategy and relevant industry dynamics.

We believe we are well positioned to continue generating strong and consistent performance for several reasons. Our 20 plus years of experience, which spans several market cycles is a key advantage in attracting borrowers and deal sources as well as managing risk.

Additionally, our robust origination platform gives us the ability to source unique and attractive investment opportunities.

Joining BlackRock has further enhanced our deal flow supporting our selective investment approach and our disciplined underwriting. As the lead or co-lead on the majority of the loans we make, we take an active role in due diligence, deal structuring, establishing terms and monitoring investments.

The direct relationships we form with borrowers as part of this process helped to protect TCPC and its shareholders. The BlackRock TCP team is structured so that deal team members source, structure and monitor investments to ensure interests are aligned over the life of an investment.

And finally, our team has deep experience in both performing and distressed credit, and we draw upon this expertise to structure deals that are downside protected.

In closing, we remain relentlessly focused on generating superior risk-adjusted returns for our investors while preserving capital with downside protection. We continue to leverage our risk-mitigated platform to pursue attractive investment opportunities.

In the second quarter to date through May 7, we have invested approximately $76.7 million primarily in 5 senior secured loans. The combined effective yield on these investments is approximately 10.8%.

We would like to thank all of our shareholders for your confidence and your continuous support.

And with that, operator, please open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Leslie Vandegrift with Raymond James.

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Leslie Shea Vandegrift, Raymond James & Associates, Inc., Research Division - Senior Research Associate [2]

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My first question for you this morning is the software solutions' investments, the new portfolio of companies you had in the quarter, what made that industry so particularly attractive right now? Because it was, I believe, 4 of the new portfolio of companies?

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Rajneesh Vig, Tennenbaum Capital Partners, LLC - Managing Partner and President [3]

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Leslie, it's Raj Vig, I'll take that. And I think this is a question we've gotten over time, given some of the exposure in the portfolio. And I think the answer is probably the same with more validation of the points I'll make, which is these companies tend to be very good credit and in many cases, equity stories given the activity of transaction volume. I think it appeals to both constituents.

On the credit site, a lot of these companies -- most of them, in fact, have pretty visible and, in many cases, contractual revenues, which is about as good as it gets on the visibility side. And beyond the revenue line, pretty simple income statements, which makes the earnings and the cash flow visibility quite predictable.

So when we think about the -- and in the case of these companies, there tends to be a pretty broad -- even though they're software by functionality, the end markets, the customers, the application that -- or solution that they are providing tend to be quite diverse across markets. So it can be a little bit of misleading in terms of the size of the exposure versus the true fundamental diversity within that.

But just to summarize, it -- they are very good credit businesses given the revenue and earnings predictability stemming from visible and contractual revenue. And we do believe our exposure is quite diverse as you dig through it and over time a lot of -- that thesis has certainly validated itself with the companies we've invested in.

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Howard Marshall Levkowitz, BlackRock TCP Capital Corp. - Chairman & CEO [4]

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Leslie, it's Howard. Just a quick follow-up on what Raj said. As I think you and many others on the phone know, we're organized around the industry teams. And we have a lot of expertise in this area and have been investing and then financing technology companies going back to 2003. And so we have a strong deal flow here also and also a lot of knowledge about the sector, which has proven really, really helpful over the years.

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Leslie Shea Vandegrift, Raymond James & Associates, Inc., Research Division - Senior Research Associate [5]

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Okay. Then on the other side of the equation is other than retail and energy, which have been problem areas, not for you, well, but for the market the last few years. Is there a new industry that you've seen with the volatility at the end of '18 and early '19 that kind of stands out to stay away from right now?

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Howard Marshall Levkowitz, BlackRock TCP Capital Corp. - Chairman & CEO [6]

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Well, I don't know that there is a single industry that we think we need to avoid. You flagged two that have given problems to people. I think that the question is actually, the way we think about it even broader, which is there's idiosyncratic disruption going on for a lot of companies and a lot of industries. And so as we think about constructing our portfolio of loans and the deals we're willing to do, we're really stress testing the business models and trying to think about what might happen in a really rapidly changing environment. And so this goes sort of more broadly.

Certainly, companies that are real sensitive to labor costs because we're seeing wage pressures, particularly in some states like in California where we've got minimum wage pressure as well as at some other levels. So that's one of the things that we're really sensitive to as we think about our investments.

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Rajneesh Vig, Tennenbaum Capital Partners, LLC - Managing Partner and President [7]

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Yes. And Leslie, I'll just add to that. In terms of Howard's point, it isn't so hard and fast rule of avoiding any industries but being smart on the industries and the companies we invest in. I do think to your point, where we've -- and it's not a coincidence that the overwhelming majority of this portfolio is senior secured first lien. We do think there are structures to avoid and higher up is better with real visibility of cash and asset- or enterprise-value coverage. So I think we take a defensive stance with the companies but also with the structures that we are able to originate from.

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Operator [8]

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(Operator Instructions) Our next question comes from Chris Kotowski from Oppenheimer.

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Christoph M. Kotowski, Oppenheimer & Co. Inc., Research Division - MD and Senior Analyst [9]

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I was just wondering maybe you touched on it and I missed it, but just -- in the fourth quarter, there was a kind of a significant markdown in the NAV, which made sense given the market volatility and just given what we've seen in the broadly syndicated market. The markup this quarter didn't seem proportional to what happened in markets...

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Howard Marshall Levkowitz, BlackRock TCP Capital Corp. - Chairman & CEO [10]

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Chris, thanks for the question. The markdown in the Q4 was broad-based, but the most significant markdowns we took were on a couple of equity positions, which have bounced back but not nearly to the extent that they were marked down.

In addition to that, we did take an equity markdown on Green Bio, which was about $0.05 a share. And we had another position that's a fundamentally sound credit for which we have some warrants that had a deal on the table that came apart. So that was marked down. That was another $0.02. And then also, we have the prepayment income that's moving from categories from unrealized.

One other thing of note is some of the markdowns just didn't come back in Q1. A significant example is a company Envigo, one of our larger loans, that was markdown almost $2 million, and the company has announced a sale of a big business unit that would fully repay the loan in Q2. That for example had no change in the mark just because of the way that the valuation providers were looking at it quarter-over-quarter.

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Christoph M. Kotowski, Oppenheimer & Co. Inc., Research Division - MD and Senior Analyst [11]

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Okay, interesting. And then I feel like I've asked some variant of this question before, but you consistently outearned the dividend by a couple cents. And I guess just how do you view the whole, it's a conundrum, right? If you keep the spillover income, ultimately, there is excise tax on it. If you distributed in specials, you don't get any credit for it in the market. And at the same time, you don't want to get locked into the higher base, I guess, on the base dividend. So any thoughts philosophically on how to approach your high-cost problem of outearning the dividend all the time?

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Paul Leslie Davis, BlackRock TCP Capital Corp. - CFO [12]

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Thanks, Chris. This is Paul. It is a high-class problem. We appreciate that. If you look back at our history, and I think Slide 5 is illustrative. Since almost going on a decade now, we've given 110% to our shareholders, literally, in terms of dividend coverage on an average basis since we started paying incentive fees and even more before that.

Like I said, almost going on a decade now, it's been an unbroken record of continuous dividend coverage. And that's on top of a what's already a 10% dividend yield, so we're very proud of that. And our #1 -- so while we do look at our dividend from time to time and want to make sure it's in an appropriate level, our primary focus is on continuing to make sure that we keep up that record of covering our dividend each quarter.

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Operator [13]

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Our next question comes from Christopher Testa with National Security Corporation.

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Christopher Robert Testa, National Securities Corporation, Research Division - Equity Research Analyst [14]

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I just wanted to just discuss -- Howard, you had mentioned BlackRock assisting with deal flow multiple times in your prepared remarks, probably the most incentivized. You guys have been integrated into their platform. Just wondering if you could provide some examples if there's any specific industries or sectors where maybe, you didn't have a big presence before that they're assisting with or just any details you could provide and elaborate on that would be most appreciated.

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Howard Marshall Levkowitz, BlackRock TCP Capital Corp. - Chairman & CEO [15]

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Sure. I don't know that there is any single industry, but across the board, we are seeing deals that we would not have seen before simply by virtue of BlackRock's size relationships and contacts. In other cases, we're getting multiple calls on deals that we've seen ourselves. But with the assistance of another call coming in through BlackRock as well, which may be helpful in, ultimately, positioning ourselves to structure a transaction. And so it's still relatively recent. Our transaction just closed last summer, but what we found is that our integration is working nicely and that we're providing a very good avenue for things that BlackRock was seeing previously that they may not have had a home for. And that fit very nicely with our business platform, and it's enabling us to expand our set of relationships. And we're also seeing enthusiasm out there amongst some of our borrowers for the idea of having this relationship that they know can grow and expand over time in many ways.

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Christopher Robert Testa, National Securities Corporation, Research Division - Equity Research Analyst [16]

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Got it. No. I appreciate the detail. Is there any way that for you to, maybe, quantify just how many additional sponsor relationships the BlackRock platform has added, if you're able to?

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Howard Marshall Levkowitz, BlackRock TCP Capital Corp. - Chairman & CEO [17]

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Yes. As I think you know, Chris, we run a business that has both sponsor and nonsponsors, and deliberately, we're sort of source agnostic. Sponsors are very important to our business, but we also like doing nonsponsors relationships. And so I do know that there is a number out there that we can identify or that would even be meaningful. But I think as we put the 2 businesses together what we're finding is, as we hoped, 1 and 1 is adding up to more than 2., and there's a lot of synergies and helpfulness, both in terms of deal flow and also information flow.

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Christopher Robert Testa, National Securities Corporation, Research Division - Equity Research Analyst [18]

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Got it. Okay. Now that's helpful. And I just wanted to touch a little bit on Kawa Solar was marked down again. And you've got the one debt piece of revolver, that's marked to 27%. I'm just wondering if you see that as a risk of potentially going on nonaccrual.

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Paul Leslie Davis, BlackRock TCP Capital Corp. - CFO [19]

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Good question. Chris, this is Paul. Right now, the loan's been restructured. It's a 0% coupon, so it's effectively right now just a claim we have as the company winds down. It did get markdown a little bit, but the majority of the movement in the quarter was actually an $8 million pay down, which we applied against cost.

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Christopher Robert Testa, National Securities Corporation, Research Division - Equity Research Analyst [20]

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Got it. Okay. And are you expecting any more paydowns on the bank guarantee facility? Or should we expect this exposure to remain somewhat consistent going forward for 2019?

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Rajneesh Vig, Tennenbaum Capital Partners, LLC - Managing Partner and President [21]

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Yes. So then I can address that. I mean to Paul's point, this is a lengthy wind-down of the business, where there's some long-term obligations that we want to be very careful in how we wind those out. So we get our paydowns, the $8 million was a good example of a success in that effort. And it will stretch over the length of time of those contracts, which are longer term.

So we do expect more paydowns. That actually is the focus of the wind-down. And as we do it, we'll try to discern the paydown from the markdowns because that's an important distinction on each quarterly basis.

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Christopher Robert Testa, National Securities Corporation, Research Division - Equity Research Analyst [22]

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Got it. That's helpful Raj. And just last one for me, and I'll hop back in the queue. A lot of the worrisome trends in the barber-syndicated market (inaudible) and collateral dilution have -- increasing more and more into the middle market it seems.

Of course, I don't think that you guys were one of the people that are doing this, but I'm just wondering how much more, if at all, you're starting to see these worrisome trends kind of pop up in the core middle market where they used to be only in the syndicated market?

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Rajneesh Vig, Tennenbaum Capital Partners, LLC - Managing Partner and President [23]

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Paul, I would say we -- the middle market is as it's grown and got more sophisticated takes its queue from the syndicated loan market.

So we absolutely can see the trends. We see the people making the requests, we feels like there is more defensibility. And when you're originating and creating loans as a sole or one of very few lenders to push back on that.

So I think to answer your question, we're seeing the trends. They don't -- they haven't creeped in as much in the market -- in the middle market and certainly not to our book. But that doesn't mean that people won't keep asking.

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Operator [24]

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(Operator Instructions) Our next question comes from Finian O'Shea with Wells Fargo Securities.

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Finian Patrick O'Shea, Wells Fargo Securities, LLC, Research Division - Associate Analyst [25]

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Just one on the portfolio NIM new originations this quarter, FinancialForce, can you describe the sourcing of this loan from the VC community in so far you have relationships there, and if you're looking to expand more? I know we've seen you do some venture in the past, but if you're leaning more into this strategy?

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Rajneesh Vig, Tennenbaum Capital Partners, LLC - Managing Partner and President [26]

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Yes, I'll take that one. I think the short answer is, FinancialForce is by no means a one-off. We have had for -- actually going well back into our, a history of finding these companies, trying to understand their value and structuring a credit accordingly. And by that, I mean much lower loan to value, a lot more protective elements, typically, a lot of cash collateral on the balance sheet.

We have a dedicated team that focuses on the venture community with that venture or early stage debt approach. So it is a sourcing effort. We do think it's a good adjunct to the overall middle-market business. But to be very clear, it is an adjunct and is not -- the thought is not to make it a mainstay on this fund, but opportunistically, take advantage of the ability to source, structure and get the right type of economics on those loans as a minority of the assets.

And I think we've been pretty consistent in how we've approached it and how we've kept it as a minority but without stating any target percentage to portfolio allocated there. That's a very sure way of saying we're continuing to do the same but not broadening more than it being a good adjacency to what we do day-to-day.

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Finian Patrick O'Shea, Wells Fargo Securities, LLC, Research Division - Associate Analyst [27]

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Sure. That is helpful. Then I guess one more small one on the debt side. I think some of your competitors -- maybe, this is due to the rates and spreads widening in terms of your borrowing oddly enough as the BDC industry, but it looks like some of your competitors are taking out fixed-rate maturities with revolvers. And I know those are probably a bit friendlier these days, but is that something you -- we might expect from you? Or do you anticipate maybe a consistent, secured, unsecured split?

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Paul Leslie Davis, BlackRock TCP Capital Corp. - CFO [28]

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Fin, this is Paul. Thank you, good question. We're very proud of a highly diversified low-cost leverage program, which we have today. Our plan is to continue with that, continue to be highly diversified and low-cost.

I think the good news is if there is one thing people can take -- there's probably a lot of things people can take. But if there's one thing people can take from the expansion of our credit facilities is that we have options. We -- not only do we expand the credit facilities but at good terms.

And so we're in a position to act opportunistically. And as we see things that are attractive to shareholders, act in a way that continues to diversify and keep our leverage program low cost, but we're not obligated to do anything that isn't economic.

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Operator [29]

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And this does conclude today's question-and-answer session. I would now like to turn the call back to Howard Lefkowitz for any closing remarks.

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Howard Marshall Levkowitz, BlackRock TCP Capital Corp. - Chairman & CEO [30]

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We appreciate your questions and our dialogue today. I would like to thank our experienced, dedicated and talented team of professionals. Thanks again for joining us. This concludes today's call.

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Operator [31]

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Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone, have a wonderful day, and speakers, please stand by.