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11% Yielding BDC With Oil Hedges Driving Lower Book Value?

Published Wed, 16 May 2018 09:53:34 -0400 on Seeking Alpha

Quick BDC Market Update As discussed in previous articles, business development companies ("BDCs") have been pulling back since May 2017. However, they have recently started to rebound and as mentioned in "BDC Buzz Begins Purchases Of Higher Quality BDCs," I have been buying additional shares of higher quality BDCs, especially given the oversold conditions driving higher yields.
Some of the positive changes in the BDC sector include:
Rising interest rates and portfolio yields Recent insider purchases Relaxed regulations and tax reform TCP Capital (TCPC) reported results last week with a meaningful increase in its portfolio yield from 11.0% to 11.3%:
"The overall effective yield on our debt portfolio at quarter end increased from 11% to 11.3% as we benefited from the increase LIBOR.”
Source: TCPC Earnings Call
There is a good chance that TCPC will be able to maintain or improve its portfolio yield in the coming quarters due to continued rise in LIBOR as well as new investments at higher yields as mentioned by management on the recent call:

“In the second quarter through May 8, we have invested approximately $57 million primarily in three senior secured loans. The combined effective yield of these investments is approximately 11.5%. At this point in the quarter our pipeline includes many transactions that are well within our historical yield range.”
“We have discussed the potential for rates to rise for... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
APOLLO INVESTMENT 5.24   15.4 0.34 0.60 11.15

APOLLO INVESTMENT - AINV
APOLLO INVESTMENT - AINV  


Older articles featuring Apollo Investment (AINV):
High Yield Strategy Fails Again
Another Big Win Driving Special Dividends And 9% To 10% Yield
Dividend Portfolio Review: Top 2 Dividend Income For June
26 'Safer' Dividend 10%+ Yield Stocks Sparkle For July
High-Yield Investment Strategy Fails
First Half Of 2018 Review: 10% Yield, Bull Or Bear (BDC, mREIT) Portfolio
29 'Safer' Dividend Financials Boast 5.77% To 13.71% Summer Yields
50 Top Dividend Financials Yield 7.5-13.7% In June
Just 16 'Safer' Dividend 9%+ Yield Wall St. Stars Blossom For Summer
Should You Buy This 10.5%-Yielding BDC?

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