MidCap Financial Investment (MFIC) Q2 2024 earnings summary

Executive summary

• Completed mergers with Apollo Senior Floating Rate Fund and Apollo Tactical Income Fund (AFT and AIF) in July 2024, increasing net assets by 43.7% to $1.45 billion and portfolio size to $3.07 billion, with 28.5 million new shares issued, raising total outstanding to 93.8 million.

• Net investment income for Q2 2024 was $29.5 million ($0.45 per share), up from $28.9 million in Q2 2023 and $0.44 per share in Q1 2024.

• Net asset value per share was $15.38 at June 30, 2024, slightly down from $15.42 at March 31, 2024.

• Board declared a $0.38 per share regular dividend and a $0.20 per share special distribution following the mergers.

• KBRA affirmed the BBB- rating and revised the outlook to Positive.

Financial highlights

• Net investment income per share was $0.45 for Q2 2024; GAAP EPS was $0.35.

• Net realized and unrealized losses totaled $7.0 million for Q2 2024, mainly due to the write-off of MSEA Tankers LLC.

• NAV per share decreased to $15.38 from $15.42 sequentially.

• Net expenses for the quarter were $39.6 million, with a weighted average interest rate on debt of 7.05%.

• Distributions paid in Q2 2024 totaled $24.8 million ($0.38 per share); $49.6 million ($0.76 per share) for six months.

Outlook and guidance

• Mergers reduced net leverage to 1.13x as of the closing date, increasing investment capacity to $775 million.

• Management expects enhanced returns, greater scale, and improved portfolio diversification post-merger.

• KBRA affirmed BBB- rating and revised outlook to Positive.

• Confident in ability to deploy capital due to strong deal flow from MidCap Financial.