MidCap Financial Investment (MFIC) Q2 2024 earnings summary

Executive summary

• Net investment income per share rose to $0.45 in Q2 2024, with net asset value per share at $15.38 and net investment income totaling $29.5 million.

• Completed mergers with Apollo Senior Floating Rate Fund (AFT) and Apollo Tactical Income Fund (AIF), increasing net assets by 44% to $1.45 billion and portfolio size to $3.1 billion.

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

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

• Issued 28.5 million new shares, raising total outstanding to 93.8 million.

Financial highlights

• Net investment income per share was $0.45, up from $0.44 in the prior quarter; earnings per share were $0.35.

• NAV per share was $15.38 at June 30, 2024, down slightly from $15.42 sequentially.

• Net leverage ratio was 1.45x at quarter-end, reduced to 1.13x post-merger.

• Weighted average yield on the corporate lending portfolio was 12.0%.

• Net realized and unrealized losses totaled $7.0 million for Q2 2024.

Outlook and guidance

• Management expects the larger combined company to benefit from enhanced returns, greater scale, and improved portfolio diversification.

• $775 million in capital is available for redeployment, with a target leverage ratio of 1.4x anticipated in 2–3 quarters.

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

• No updated ROE guidance, but management expects continued accretion from merger synergies.