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This 12% Dividend Yielding VC-Backed Tech Investor Will Likely Beat Q2 Estimates


  • TPVG remains near the lower end of its targeted leverage 0.60 but has already invested $85 million and management is expecting increased portfolio growth included in the updated projections.
  • However, TPVG's largest investment ($50 million in Ring, Inc.) will likely be repaid in Q2 due to being purchased by Amazon, resulting in meaningful prepayment-related income and beating Q2 expectations.
  • This article also provides important updates for PSEC, AINV, BKCC, CGBD, MRCC, GLAD, PFLT, TCRD, OXSQ and FSIC.
  • In February 2018, the SEC issued a public notice of exemptive relief application to permit co-investment with TriplePoint Capital that will likely provide TPVG increased opportunities for portfolio growth and diversification.

Quick BDC Market Update

As discussed in "3 Largest Business Development Companies Take Steps To Increase Returns To Shareholders":

Over the last few days, the largest business development companies ("BDCs") have released SEC filings showing that their Boards are seeking to take advantage of the recently relaxed regulations for the sector. I believe that this sends a strong message and the other ~40 BDCs will likely follow suit over the coming weeks."

Also discussed in the article was the potential for S&P downgrades which happened last week. Please see "7.6% Dividend Yield From This Sleep Well BDC" for a list of BDC that were subsequently downgraded (temporarily) to negative outlook.

Apollo Investment Corp. (AINV) Update:

AINV already had a "negative outlook" but recently announced the following.

On April 4, 2018, the board of directors (the “Board”) of Apollo Investment Corporation (the “Company”), including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Board, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, 2019."

Source: SEC Filing

BlackRock Capital Investment Corp. (BKCC) Update:

BKCC also already had a "negative outlook" and recently announced the following.

The Company currently has not determined whether to take advantage of the additional leverage. If the Company chooses to take advantage of such additional leverage, it will mean that for every $100 of net assets, we may raise $200 from senior securities, such as borrowings or issuing secured stock. If this ratio declines below 150%, we may not be able to incur additional debt and may need to sell a portion of our investments to repay some

The information in this article was previously made available to subscribers of Sustainable Dividends, along with:

  • Target prices and buying points
  • Real-time changes to my personal BDC positions
  • Updated rankings and risk profile
  • Real-time announcement of changes to dividend coverage and worst-case scenarios
  • Suggested BDC portfolio

This article was written by

BDC Buzz profile picture
Build a portfolio with sustainable dividend yields ranging from 8% to 12%

I work with and for various private wealth managers, institutional and accredited investors. My goal for articles on Seeking Alpha is to bring exposure to business development companies (BDCs) that finance small to medium-sized businesses, typically overlooked by banks. BDCs are an instrument for investors to earn healthy dividends by avoiding double taxation at the corporate level and allowing income to flow directly to shareholders. Please see website link below for more information.

Email: buzz@bdcbuzz.com

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Analyst’s Disclosure: I am/we are long TPVG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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