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ABDC: Alcentra Begins Its Comeback

By Lisa Thompson


After substantial write downs in 2017, new management has set Alcentra (NASDAQ:ABDC) on a new course and its first quarter results have shown the portfolio is back on track. Sequentially NAV has grown again. Net asset value (NAV) was $157.2 million, or $11.22 per share as of March 31, 2018 versus $11.06 per share, on December 31, 2017. For the first quarter of 2018, the company reported total investment income of $8.2 million versus $9.2 million last year, a decline of 12%. Adjusted and net investment income was $3.8 million, or $0.27 per share versus $4.6 million and $0.34 per share last year.

ABDC shares provide 11.3% dividend and trade at a 43% discount to the company’s $11.22 NAV/ share.

Of the 28 portfolio companies, there were two write ups and two write downs this quarter, overall the portfolio value remained relatively flat. There was a realized plus unrealized net decrease in the portfolio of $237,000.

During Q1 the company received proceeds from repayments and amortizations on investments of $47.6 million and invested $29.6 million, including investments in one new portfolio company, two add on investments, six broadly syndicated loans, and three rated CLO debt securities.

Investments during the quarter were the following:

• BayMark Health Services - $7.0 million in L+8.25% 2nd lien secured debt

• Healthcare Associates of Texas (HCAT) - $2.9 million of the delayed draw commitment
• Cirrus Medical Staffing - $1.4 million of the delayed draw commitment

• FeeCo - $1.8 million in L+8.5% 2nd lien secured debt
West Corporation - $2.0 million in L+3.5% 1st lien secured debt

• Weight Watchers International - $2.0 million in L+4.75% 1st lien secured debt

• Lumileds - $2.0 million in L+3.5% 1st lien secured debt

• Asurion - $3.1 million in L+6.0% 2nd lien secured debt

• Red Ventures LLC - $2.0 million in L+4.0% 1st lien secured debt

• BlueMountain CLO 2016-3 Ltd. - Invested $2.0 million with a yield of L+6.85%
• Goldentree Loan Management US Clo 2 Ltd. - Invested $1.9 million with a yield of L+4.7%
• OZLM Funding IV Ltd. - Invested $1.4 million with a yield of L+6.3%

Repayments, loan dispositions, and amortizations on investments during the quarter totaled $47.6 million, comprised of: sale of Stancor, Inc. and IGT and the repayment of debt from Metal Powder Products and NextCare Holdings, Inc.


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