NEW YORK, Aug. 02, 2022 (GLOBE NEWSWIRE) — SLR Funding Corp. (NASDAQ: SLRC) (the “Firm” or “SLRC”), at the moment reported web funding earnings of $20.3 million, or $0.37 per share, for the second fiscal quarter of 2022 in comparison with web funding earnings, pre-merger associated bills, of $14.8 million, or $0.35 per share, in Q1, 2022. The Firm accomplished its acquisition of SLR Senior Funding Corp. (“SUNS”) on April 1, 2022.
At June 30, 2022, web asset worth (NAV) was $18.53 per share in comparison with $19.56 per share at March 31, 2022. Roughly one-third of the decline in NAV is the results of merger accounting of the acquisition value low cost.
In April 2022, after the closing of the merger with SUNS, SLRC modified the frequency of its distributions from quarterly to month-to-month. For the quarter ended June 30, 2022, the Firm paid month-to-month distributions totaling $0.41 per share.
On August 2, 2022, the Firm’s Board of Administrators (the “Board”) declared a month-to-month distribution of $0.136667 per share payable on September 1, 2022 to stockholders of report as of August 18, 2022. The particular tax traits of the distribution can be reported to stockholders on Type 1099 after the top of the calendar 12 months.
HIGHLIGHTS:
| At June 30, 2022: |
| Complete Funding Portfolio* honest worth: $2.7 billion Variety of portfolio firms: >780 Internet property: $1.0 billion Internet asset worth per share: $18.53 Internet debt-to-equity: 0.96x Out there capital**: roughly $850 million, topic to borrowing base availability |
| Complete Funding Portfolio Exercise*** for the Quarter Ended June 30, 2022: |
| Investments made in the course of the quarter: $274.8 million Investments pay as you go and bought in the course of the quarter: $199.3 million |
| Working Outcomes for the Quarter Ended June 30, 2022: |
| Internet funding earnings: $20.3 million Internet funding earnings per share: $0.37 Internet realized and unrealized loss: $35.9 million Internet lower in web property from operations: $15.6 million Loss per share: $0.29 |
* The Complete Funding Portfolio for the quarter ended June 30, 2022 is comprised of SLRC’s funding portfolio and the total portfolios of SLR Credit score Options (“SLR-CS”), SLR Tools Finance (“SLR-EF”), Kingsbridge Holdings, LLC (“KBH”), SLR Enterprise Credit score (“SLR-BC”) and SLR Healthcare ABL (“SLR-HC ABL”) owned by the Firm (collectively, the Firm’s “Industrial Finance Portfolio Firms”), and excludes the Firm’s honest worth of the fairness pursuits within the Industrial Finance Portfolio Firms and the Firm’s loans to SLR-EF and KBH.
** Please see Liquidity and Capital Assets beneath.
*** Complete Funding Portfolio Exercise for the quarter ended June 30, 2022 contains the gross originations by the Firm’s Industrial Finance Portfolio Firms and excludes the $624.3 million honest worth of the Complete Funding Portfolio acquired within the acquisition of SUNS.
“The conclusion of merger synergies, the everlasting discount of the annual base administration charge, the introduced share repurchase plan, and the rise in yields are anticipated to speed up development in SLRC’s web funding earnings and ROE. Moreover, our $566 million of unsecured fastened fee debt limits the influence of rising charges on our borrowing value,” mentioned Michael Gross, Co-CEO of SLR Funding Corp. “In consequence, we count on our quarterly NII to totally cowl our distributions prior to we had projected on the time of the merger announcement.”
“We’ve got over $800 million of accessible capital to take a position and the present market dislocation creates the chance to develop our portfolio with investments throughout our asset courses at larger yields and higher phrases,” mentioned Bruce Spohler, Co-CEO of SLR Funding Corp. “Our diversified funding methods targeted on senior secured first lien lending are properly positioned to thrive within the present unstable market setting.”
Convention Name and Webcast
The Firm will host an earnings convention name and audio webcast at 10:00 a.m. (Japanese Time) on Wednesday, August 3, 2022. All events might take part within the convention name by dialing (800) 245-3047 roughly 5-10 minutes previous to the decision, worldwide callers ought to dial +1 (785) 424-1699. Contributors ought to reference SLR Funding Corp. and Convention ID: SLRC2Q22. A phone replay can be out there till August 17, 2022 and might be accessed by dialing (800) 839-9374. Worldwide callers ought to dial +1 (402) 220 6087. This convention name may even be broadcast dwell over the Web and might be accessed by all events by SLR Funding Corp.’s web site, www.slrinvestmentcorp.com. To hearken to the webcast, please go to the Firm’s web site previous to the beginning of the decision to register and obtain any needed audio software program. For individuals who will not be in a position to hearken to the dwell broadcast, a replay of the webcast can be out there quickly after the decision.
Complete Funding Portfolio
Funding Exercise
Throughout the three months ended June 30, 2022, SLRC had whole originations of $274.8 million excluding the acquisition of the SUNS portfolio and repayments and amortization of $199.3 million throughout its 4 core asset courses: sponsor finance, asset-based lending, gear finance, and life science finance leading to web originations of $75.5 million to the Complete Funding Portfolio.
The funding exercise of our Complete Funding Portfolio by asset class for the quarter ended June 30, 2022 was as follows:
| Asset Class | Sponsor Finance(1) | Asset-based Lending(2) |
Tools Finance(3) |
Life Science Finance |
Whole Complete Funding Portfolio Exercise |
||||||
| Originations(4) | $ | 71.9 | $ | 98.1 | $ | 101.2 | $ | 3.6 | $ | 274.8 | |
| Repayments / Amortization | $ | 10.4 | $ | 52.3 | $ | 90.7 | $ | 45.9 | $ | 199.3 | |
| Internet Portfolio Exercise | $ | 61.5 | $ | 45.8 | $ | 10.5 | $ | (42.3 | ) | $ | 75.5 |
(1) Sponsor Finance refers to money movement loans to sponsor-owned firms.
(2) Consists of SLR-CS, SLR-BC and SLR-HC ABL’s full portfolios, in addition to asset-based loans on the Firm’s stability sheet.
(3) Consists of SLR-EF’s full portfolio and gear financings on the Firm’s stability sheet and Kingsbridge Holdings’ (KBH) full portfolio.
(4) Whole Originations doesn’t embrace the $624.3 million honest worth of the Complete Funding Portfolio acquired within the acquisition of SUNS.
Portfolio Composition
SLRC’s Complete Funding Portfolio composition by asset class at June 30, 2022 was as follows:
| Complete Funding Portfolio Composition (at honest worth) |
Quantity | Weighted Common Asset Yield(4) | ||||
| ($mm) | % | |||||
| Senior Secured Investments
Money Circulation Loans (Sponsor Finance) |
$ |
646.5 |
23.9 |
% |
8.1 |
% |
| Asset-Based mostly Loans(1) | $ | 857.6 | 31.8 | % | 10.4 | % |
| Tools Financings(2) | $ | 896.5 | 33.2 | % | 9.8 | % |
| Life Science Loans | $ | 293.7 | 10.9 | % | 10.4 | % |
| Whole Senior Secured Investments | $ | 2,694.3 | 99.8 | % | 9.6 | % |
| Fairness and Fairness-like Securities | $ | 5.5 | 0.2 | % | ||
| Whole Complete Funding Portfolio | $ | 2,699.8 | 100.0 | % | ||
| Floating Fee Investments(3) | $ | 1,744.6 | 64.6 | % | ||
| First Lien Senior Secured Loans | $ | 2,624.8 | 97.2 | % | ||
| Second Lien Senior Secured Money Circulation Loans | $ | 10.0 | 0.4 | % | ||
| Second Lien Senior Secured Asset-Based mostly Loans | $ | 59.5 | 2.2 | % | ||
(1) Consists of SLR-CS, SLR-BC, and SLR-HC ABL’s full portfolios, in addition to asset-based loans on the Firm’s stability sheet, and excludes the Firm’s fairness investments in every of SLR-CS, SLR-BC, and SLR-HC ABL.
(2) Consists of SLR-EF’s full portfolio and gear financings on the Firm’s stability sheet and Kingsbridge Holdings’ (KBH) full portfolio. Excludes the Firm’s fairness and debt investments in every of SLR-EF and KBH.
(3) Floating fee investments are calculated as a % of the Firm’s income-producing Complete Funding Portfolio. The vast majority of fastened fee loans are related to SLR-EF and leases held by KBH. Moreover, SLR-EF and KBH search to match-fund their fastened fee property with fastened fee liabilities.
(4) The weighted common asset yield for money movement, asset-based and life science loans on stability sheet is predicated on a yield to maturity calculation. The yield calculation of Life Science loans excludes the influence of success charges and/or warrants. The weighted common yield for on-balance sheet gear financings is calculated primarily based on the anticipated common lifetime of the mortgage. The weighted common asset yield for SLR-CS asset-based loans is an Inside Fee of Return calculated utilizing precise money flows acquired and the anticipated terminal worth. The weighted common asset yield for SLR-BC and SLR-HC ABL represents whole curiosity and charge earnings for the three-month interval ending on June 30, 2022 in opposition to the typical portfolio over the identical fiscal interval, annualized. The weighted common asset yield for SLR-EF represents whole curiosity and charge earnings for the three-month interval ending on June 30, 2022 in opposition to the portfolio as of June 30, 2022, annualized. The weighted common yield for the KBH gear leasing portfolio represents the anticipated return on fairness throughout 2022.
The Complete Funding Portfolio is diversified throughout over 780 distinctive debtors in over 100 industries and with a median publicity of $3.5 million, or 0.1% per issuer.
At June 30, 2022, 99.8% of the Firm’s Complete Funding Portfolio was invested in senior secured loans, comprised of 97.2% first lien senior secured loans and roughly 2.6% second lien senior secured loans, of which 0.4% have been second lien money movement loans and a couple of.2% have been second lien asset-based loans.
The weighted common yield at honest worth of the income-producing investments within the Complete Funding Portfolio was 9.6% at June 30, 2022.
SLR Funding Corp. Portfolio
Asset High quality
As of June 30, 2022, on a good worth foundation, 99.4% of the Firm’s portfolio was performing.
The Firm places its biggest emphasis on threat mitigation and credit score efficiency. On a quarterly foundation, or extra continuously if deemed needed, the Firm formally charges every portfolio funding on a scale of 1 to 4, with one representing the least quantity of threat.
As of June 30, 2022, the composition of our portfolio, on a threat scores foundation, was as follows:
| Inside Funding Ranking | Investments at Honest Worth ($mm) | % of Whole Portfolio | |
| 1 | $374.6 | 18.8% | |
| 2 | $1,580.9 | 79.3% | |
| 3 | $26.9 | 1.3% | |
| 4 | $11.3 | 0.6% | |
Funding Revenue Contribution by Asset Class(1)
| For the Quarter Ended: |
Sponsor Finance |
Asset-based Finance |
Tools Finance |
Life Science Finance |
Whole ($mm) |
||||||||||
| 6/30/2022 | $ | 12.0 | $ | 11.2 | $ | 8.7 | $ | 10.9 | $ | 42.8 | |||||
| % Contribution | 28.0 | % | 26.1 | % | 20.3 | % | 25.6 | % | 100 | % | |||||
(1) Funding Revenue Contribution by Asset Class contains: curiosity earnings/charges from Sponsor Finance (money movement) loans on stability sheet; earnings/charges from Asset-based loans on stability sheet and distributions from SLR-CS, SLR-BC and SLR-HC ABL; earnings/charges from gear financings on stability sheet and distributions from SLR-EF and distributions from KBH; and earnings/charges from life science loans on stability sheet.
SLR Funding Corp.’s Outcomes of Operations for the Quarter Ended June 30, 2022 in comparison with the Quarter Ended June 30, 2021.
Funding Revenue
For the fiscal quarters ended June 30, 2022 and 2021, gross funding earnings totaled $42.8 million and $35.6 million, respectively. The rise in gross funding earnings for the 12 months over 12 months three month durations was primarily attributable to a bigger portfolio dimension because of the merger with SUNS, in addition to attributable to a rise in LIBOR and SOFR.
Bills
Internet bills totaled $22.5 million and $20.1 million, respectively, for the fiscal quarters ended June 30, 2022 and 2021. The rise in bills for the 12 months over 12 months interval was primarily attributable to larger curiosity expense related to the rise in LIBOR and SOFR.
Internet Funding Revenue
The Firm’s web funding earnings totaled $20.3 million and $15.5 million, or $0.37 and $0.37 per common share, respectively, for the fiscal quarters ended June 30, 2022 and 2021.
Internet Realized and Unrealized Achieve (Loss)
Internet realized and unrealized positive factors (losses) for the fiscal quarters ended June 30, 2022 and 2021 totaled ($35.9) million and $3.0 million, respectively.
Internet Improve (Lower) in Internet Property Ensuing From Operations
For the quarters ended June 30, 2022 and 2021, the Firm had a web improve (lower) in web property ensuing from operations of $(15.6) million and $18.6 million, respectively. For the quarters ended June 30, 2022 and 2021, earnings (loss) per common share have been $(0.29) and $0.44, respectively.
Liquidity and Capital Assets
Unsecured Notes Reimbursement
On Could 8, 2022, the Firm repaid in full at maturity the $150.0 million of 2022 Unsecured 5-year Notes which was issued at a blended fee of roughly 4.5%.
Credit score Services and Out there Capital
With the closing of the merger, the Firm assumed SUNS’ $225 million SPV revolver credit score facility and $85 million of senior unsecured notes. At June 30, 2022, the Firm had $340.6 million drawn on its $825 million revolving credit score services, $100 million of time period loans and $566 million of unsecured senior notes.
Together with $28.9 million of money readily available and credit score facility capability at SLRC and its Industrial Finance Portfolio Firms, the Firm had entry to roughly $850 million of accessible capital, topic to borrowing base limitations.
Leverage
On June 30, 2022, the Firm’s web debt-to-equity was 0.96x. SLRC’s present leverage supplies a major cushion to its regulatory asset protection restrict of two.0x debt-to-equity in addition to its goal leverage ratio of 0.9x – 1.25x.
Unfunded Commitments
At June 30, 2022, excluding commitments to SLR-CS, SLR-HC ABL, and SLR-EF, the Firm had unfunded commitments of $317.2 million, together with $35.1 million of revolver commitments.
Share Repurchase Program
On Could 3, 2022, SLRC’s Board approved the Firm to undertake a program for the aim of repurchasing as much as $50 million of SLRC’s excellent shares of frequent inventory. Beneath the repurchase program, the Firm might, however is just not obligated to, repurchase shares of SLRC’s excellent frequent inventory within the open market sometimes supplied the Firm’s compliance with its code of ethics and the rules laid out in Rule 10b-18 of the Securities Alternate Act of 1934, as amended, together with sure value, market quantity and timing constraints. As well as, any repurchases can be performed in accordance with the Funding Firm Act of 1940, as amended. Except amended or prolonged by our Board, the repurchase program is anticipated to be in place till the sooner of Could 1, 2023 or till $50 million of our excellent shares of frequent inventory have been repurchased. The timing and variety of shares to be repurchased will depend upon numerous elements, together with market circumstances. There are not any assurances that the Firm will have interaction in any repurchases. As of June 30, 2022, no repurchases have taken place.
Subsequent Occasions
Distributions
On July 6, 2022, the Firm’s Board declared a month-to-month distribution of $0.136667 per share payable on August 2, 2022 to stockholders of report as of July 21, 2022.
On August 2, 2022, the Firm’s Board declared a month-to-month distribution of $0.136667 per share payable on September 1, 2022 to stockholders of report as of August 18, 2022.
The particular tax traits of the distributions can be reported to stockholders on Type 1099 after the top of the calendar 12 months.
Monetary Statements and Tables
SLR Funding Corp.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in hundreds, besides share quantities)
| June 30, 2022 (unaudited) |
December 31, 2021 |
||||||
| Property | |||||||
| Investments at honest worth: | |||||||
| Firms lower than 5% owned (value: $1,248,727 and $985,088, respectively) | $ | 1,197,877 | $ | 964,379 | |||
| Firms greater than 25% owned (value: $819,161 and $711,865, respectively) | 795,833 | 706,203 | |||||
| Money | 28,885 | 2,935 | |||||
| Money equivalents (value: $348,892 and $320,000, respectively) | 348,819 | 320,000 | |||||
| Dividends receivable | 10,643 | 9,028 | |||||
| Curiosity receivable | 8,384 | 6,521 | |||||
| Receivable for investments bought | 1,085 | 1,378 | |||||
| Pay as you go bills and different property | 927 | 567 | |||||
| Whole property | $ | 2,392,453 | $ | 2,011,011 | |||
| Liabilities | |||||||
| Debt ($1,006,600 and $818,500 face quantities, respectively, reported web of unamortized debt issuance prices/market low cost of $8,519 and $6,462, respectively.) | $ | 998,081 | $ | 812,038 | |||
| Payable for investments and money equivalents bought | 348,912 | 320,041 | |||||
| Distributions payable | 7,486 | 17,327 | |||||
| Administration charge payable | 6,916 | 7,435 | |||||
| Efficiency-based incentive charge payable | 3,376 | 1,864 | |||||
| Curiosity payable | 7,110 | 4,492 | |||||
| Administrative providers payable | 956 | 2,689 | |||||
| Different liabilities and accrued bills | 4,463 | 2,844 | |||||
| Whole liabilities | $ | 1,377,300 | $ | 1,168,730 | |||
| Internet Property | |||||||
| Frequent inventory, par worth $0.01 per share, 200,000,000 and 200,000,000 frequent shares approved, respectively, and 54,772,651 and 42,260,826 shares issued and excellent, respectively | $ | 548 | $ | 423 | |||
| Paid-in capital in extra of par | 1,163,713 | 936,999 | |||||
| Gathered distributable web loss | (149,108 | ) | (95,141 | ) | |||
| Whole web property | $ | 1,015,153 | $ | 842,281 | |||
| Internet Asset Worth Per Share | $ | 18.53 | $ | 19.93 | |||
SLR Funding Corp.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in hundreds, besides share quantities)
| Three months ended | |||||||
| June 30, 2022 |
June 30, 2021 | ||||||
| INVESTMENT INCOME: | |||||||
| Curiosity: | |||||||
| Firms lower than 5% owned | $ | 28,855 | $ | 22,483 | |||
| Firms greater than 25% owned | 1,922 | 2,886 | |||||
| Dividends: | |||||||
| Firms greater than 25% owned | 11,083 | 9,832 | |||||
| Different earnings: | |||||||
| Firms lower than 5% owned | 925 | 356 | |||||
| Firms greater than 25% owned | (5 | ) | 15 | ||||
| Whole funding earnings | 42,780 | 35,572 | |||||
| EXPENSES: | |||||||
| Administration charges | $ | 6,913 | $ | 6,890 | |||
| Efficiency-based incentive charges | 4,734 | 3,879 | |||||
| Curiosity and different credit score facility bills | 10,352 | 7,146 | |||||
| Administrative providers expense | 1,369 | 1,375 | |||||
| Different basic and administrative bills | 476 | 763 | |||||
| Whole bills | 23,844 | 20,053 | |||||
| Efficiency-based incentive charges waived | (1,358 | ) | — | ||||
| Internet bills | 22,486 | 20,053 | |||||
| Internet funding earnings | $ | 20,294 | $ | 15,519 | |||
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND CASH EQUIVALENTS: | |||||||
| Internet realized achieve (loss) on investments and money equivalents (firms lower than 5% owned) | $ | (105 | ) | $ | 561 | ||
| Internet change in unrealized achieve (loss) on investments and money equivalents: | |||||||
| Firms lower than 5% owned | (11,764 | ) | 1,745 | ||||
| Firms greater than 25% owned | (24,071 | ) | 742 | ||||
| Internet change in unrealized achieve (loss) on investments and money equivalents | (35,835 | ) | 2,487 | ||||
| Internet realized and unrealized achieve (loss) on investments and money equivalents | (35,940 | ) | 3,048 | ||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (15,646 | ) | $ | 18,567 | ||
| EARNINGS (LOSS) PER SHARE | $ | (0.29 | ) | $ | 0.44 | ||
About SLR Funding Corp.
SLR Funding Corp. is a closed-end funding firm that has elected to be handled as a enterprise improvement firm beneath the Funding Firm Act of 1940. A specialty finance firm with experience in a number of area of interest markets, the Firm primarily invests instantly and not directly in leveraged, U. S. center market firms within the type of money movement senior secured loans together with first lien and second lien debt devices and asset-based loans together with senior secured loans collateralized on a primary lien foundation primarily by present property.
Ahead-Trying Statements
Among the statements on this press launch represent forward-looking statements as a result of they relate to future occasions, future efficiency or monetary situation. The forward-looking statements might embrace statements as to: future working outcomes of SLRC and distribution projections; enterprise prospects of SLRC and the prospects of its portfolio firms; and the influence of the investments that SLRC expects to make. As well as, phrases equivalent to “anticipate,” “imagine,” “count on,” “search,” “plan,” “ought to,” “estimate,” “undertaking” and “intend” point out forward-looking statements, though not all forward-looking statements embrace these phrases. The forward-looking statements contained on this press launch contain dangers and uncertainties. Sure elements may trigger precise outcomes and circumstances to vary materially from these projected, together with the uncertainties related to (i) the anticipated synergies and financial savings related to the two-step merger of SUNS with and into SLRC (the “Merger”); (ii) the flexibility to comprehend the anticipated advantages of the Merger, together with the anticipated elimination of sure bills and prices as a result of Merger; (iii) adjustments within the economic system, monetary markets and political setting; (iv) dangers related to doable disruption within the operations of SLRC or the economic system typically attributable to terrorism, pure disasters or the COVID-19 pandemic; (v) future adjustments in legal guidelines or laws (together with the interpretation of those legal guidelines and laws by regulatory authorities); (vi) circumstances in SLRC’s working areas, significantly with respect to enterprise improvement firms or regulated funding firms; (vii) basic concerns related to the COVID-19 pandemic; and (viii) different concerns which may be disclosed sometimes in SLRC’s publicly disseminated paperwork and filings. SLRC has primarily based the forward-looking statements included on this press launch on info out there to it on the date of this press launch, and SLRC assumes no obligation to replace any such forward-looking statements. Though SLRC undertakes no obligation to revise or replace any forward-looking statements, whether or not because of new info, future occasions or in any other case, you might be suggested to seek the advice of any extra disclosures that it could make on to you or by reviews that SLRC sooner or later might file with the Securities and Alternate Fee, together with annual reviews on Type 10-Okay, quarterly reviews on Type 10-Q and present reviews on Type 8-Okay.
Contact
SLR Funding Corp.
Investor Relations
(646) 308-8770
