Crescent Capital BDC Inc
For the period ended Dec 31, 2024. Filed Feb 19, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 19, 2025
CCAP$9.38-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-21.
0000950170-24-017903
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-19.
0000950170-25-023153
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 129 previous paragraphs and 126 current paragraphs.
103 unchanged; 19 reworded; 4 added; 5 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Includes performing debt and other income-producing investments (excluding investments on non-accrual).
Current report
On October 27, 2021, we entered into a senior secured revolving credit agreement, as amended from time to time, with Sumitomo Mitsui Banking Corporation, as administrative agent, collateral agent and lender (the “SMBC Corporate Revolving Facility”). On December 3, 2024, we amended the SMBC Corporate Revolving Facility. The amendment, among other things,(i) decreased the size of the aggregate revolving commitment from $350.0 million to $285.0 million, (ii) added an initial term commitment of $25.0 million for an aggregate facility size of $310.0 million, (iii) increased the interest rate by 0.125% so that borrowings under the revolving commitment will bear interest at the applicable benchmark rate plus 2.000% or 2.125%, subject to certain provisions, (iii) extended the facility termination to December 3, 2029 and (iv) extended the facility revolving commitment period termination to December 1, 2028.
Current report
Series 2024A Unsecured Notes - 2028 and 2030
Current report
On December 20, 2024, we entered into the Third Supplement dated as of December 20, 2024 (the “Third Supplement”) by and among us and the qualified institutional investors named therein to the Note Purchase Agreement dated July 30, 2020 by and among us and the purchasers party thereto. The Third Supplement governed the issuance of a private offering to qualified institutional investors of up to (a) $35.0 million in aggregate principal amount of senior unsecured notes due February 18, 2028 (the “Series 2024A Unsecured Notes - 2028”) and (b) $80.0 million in aggregate principal amount of senior unsecured notes due February 18, 2030 (the “Series 2024A Unsecured Notes - 2030” and, together with the 2028 Notes, the “Series 2024A Notes”). The Series 2024A Unsecured Notes - 2028 have a fixed interest rate of 6.77% and will be due on February 18, 2028 unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. The Series 2024A Unsecured Notes - 2030 have a fixed interest rate of 6.90% and will be due on February 18, 2030 unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms. Interest on both unsecured notes will be payable semiannually, on the 18 th day of February and August in each year, commencing with August 18, 2025. The interest rates are subject to an increase of up to 1.00% upon the occurrence of certain trigger events set forth in the purchase agreement governing the issuance and sale of the Series 2024A Notes. The issuance of the Series 2024A Notes occurred on February 18, 2025.
Removed paragraphs (5)
Previous report
Yield excludes investments on non-accrual status.
Previous report
RESULTS OF OPERATIONS
Previous report
For the years ended December 31, 2023 and 2022 we recorded (reversed) $0 and ($6.3) million, respectively, of capital gains based incentive fees. As of December 31, 2023 and 2022, no capital gains based incentive fees were outstanding. The fluctuation in accumulated incentive fees on cumulative unrealized capital appreciation was attributable to the inception to date performance of the investment portfolio.
Previous report
The following table provides a reconciliation of net investment income (the most comparable U.S. GAAP measure) to Adjusted Net Investment Income for the periods presented:
Previous report
On a supplemental basis, we are disclosing Adjusted Net Investment Income and per share Adjusted Net Investment Income, each of which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with U.S. GAAP (“non-GAAP”). Adjusted Net Investment Income represents net investment income, excluding capital gains incentive fees. We use this non-GAAP financial measure internally to analyze and evaluate financial results and performance and believe that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends without giving effect to capital gains incentive fees. The Investment Advisory Agreement provides that a capital gains-based incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital appreciation) to the extent such realized capital gains exceed realized capital losses and unrealized capital depreciation on a cumulative basis. We believe that Adjusted Net Investment Income is a useful performance measure because it reflects the net investment income produced on the Company’s investments during a period without giving effect to any changes in the value of such investments and any related capital gains incentive fees between periods. The presentation of Adjusted Net Investment Income is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.
Reworded paragraphs (19)
Previous wording
As of December 31, 2023, we had seventeen investments across nine portfolio companies on non-accrual status, which represented 2.0% and 1.9% of the total debt investments at cost and fair value, respectively. As of December 31, 2022, we had six investments across four portfolio companies on non-accrual status, which represented 2.0% and 1.2% of the total debt investments at cost and fair value, respectively. The remaining debt investments were performing and current on their interest payments as of December 31, 2023 and 2022.
Current wording
As of December 31, 2024, we had eighteen investments across seven portfolio companies on non-accrual status, which represented 2.2% and 0.9% of the total debt investments at cost and fair value, respectively. As of December 31, 2023, we had seventeen investments across nine portfolio companies on non-accrual status, which represented 2.0% and 1.9% of the total debt investments at cost and fair value, respectively. The remaining debt investments were performing and current on their interest payments as of December 31, 2024, and 2023.
Previous wording
Interest income, which includes amortization of upfront fees, increased from $108.5 million, for the year ended December 31, 2022, to $169.8 million for the year ended December 31, 2023, due to a rise in benchmark rates, the FCRD Acquisition and the organic growth of our income producing portfolio. Included in interest from investments for the years ended December 31, 2023 and 2022 are $1.8 million and $2.4 million of accelerated accretion of OID related to paydown activity, respectively.
Current wording
Interest income, which includes amortization of upfront fees, increased from $169.8 million, for the year ended December 31, 2023, to $183.0 million for the year ended December 31, 2024, due to the growth of our income producing portfolio and increase in one-time non-recurring income. Included in interest from investments for the years ended December 31, 2024 and December 31, 2023 are $3.7 million and $1.8 million of accelerated accretion of OID related to paydown activity, respectively.
Previous wording
Dividend income increased from $7.7 million for the years ended December 31, 2022 to $13.3 million for the year ended December 31, 2023 due to higher dividend distributions from our portfolio companies. For the years ended December 31, 2023 and 2022, we recorded $1.0 million and $0.5 million of other income, respectively.
Current wording
Dividend income decreased from $13.3 million for the years ended December 31, 2023 to $11.3 million for the year ended December 31, 2024 due to lower dividend distributions from our portfolio companies. For the years ended December 31, 2024 and December 31, 2023, we recorded $3.1 million and $1.0 million of other income, respectively. The increase is attributable to higher origination related fee income.
Previous wording
Interest and other debt financing costs include interest, amortization of deferred financing costs including upfront commitment fees and unused fees on our credit facilities. For the years ended December 31, 2023 and 2022 interest and other debt financing costs were $58.7 million and $31.9 million, respectively. The increase in interest and other debt financing costs was due to a higher weighted average debt outstanding and higher weighted average cost of debt related to a rise in benchmark rates.
Current wording
Interest and other debt financing costs include interest, amortization of deferred financing costs including upfront commitment fees and unused fees on our credit facilities. For the years ended December 31, 2024 and December 31, 2023 interest and other debt financing costs were $62.8 million and $58.7 million, respectively. The increase in interest and other debt financing costs was due to a higher weighted average debt outstanding.
Previous wording
For the years ended December 31, 2023 and 2022, we incurred management fees of $19.6 million and $16.3 million, respectively, of which $0.2 million and $0.2 million, respectively, were waived. The increase in net management fees was driven by growing assets under management.
Current wording
For the years ended December 31, 2024 and December 31, 2023, we incurred management fees of $20.2 million and $19.6 million, respectively, of which $0.1 million and $0.2 million, respectively, were waived. The increase in net management fees was driven by higher assets under management.
Previous wording
For the years ended December 31, 2023 and 2022, we incurred income based incentive fees of $17.5 million and $11.2 million, of which $0.3 million and $0.5 million, respectively, were waived. The increase in net incentive fees was driven by growing pre-incentive fee net investment income.
Current wording
For the years ended December 31, 2024 and December 31, 2023, we incurred income based incentive fees of $18.9 million and $17.5 million, of which $0.1 million and $0.3 million, respectively, were waived. The increase in net incentive fees was driven by higher pre-incentive fee net investment income.
Previous wording
For the years ended December 31, 2023 and 2022, professional fees were $1.6 million and $1.3 million, respectively.
Current wording
For the years ended December 31, 2024 and 2023, professional fees were $2.0 million and $1.6 million, respectively. The higher professional fees were due to additional regulatory compliance costs.
Previous wording
For the years ended December 31, 2023 and 2022, other general and administrative expenses were $2.8 million and $2.6 million, respectively.
Current wording
For the years ended December 31, 2024 and 2023, other general and administrative expenses were $2.5 million and $2.8 million, respectively. The decrease in other general and administrative expenses was due to lower operating costs.
Previous wording
For the years ended December 31, 2023 and 2022, we expensed income and excise taxes of $1.3 million and $0.2 million, respectively.
Current wording
For the years ended December 31, 2024 and 2023, we expensed income and excise taxes of $1.6 million and $1.3 million, respectively. The increase in income and excise taxes is attributable to an increase in undistributed taxable income.
Previous wording
For the years ended December 31, 2023 and 2022, GAAP net investment income was $82.5 million or $2.30 per share and $59.7 million or $1.93 per share, respectively. The increase in the per share net investment income was due to higher investment income earned year to date.
Current wording
For the years ended December 31, 2024 and 2023, net investment income was $89.0 million or $2.40 per share and $82.5 million or $2.30 per share, respectively. The increase in the per share net investment income was due to higher investment income earned year to date.
Previous wording
During the years ended December 31, 2023 and 2022, our average U.S. Dollar notional exposure to foreign currency forward contracts were $97.4 million and $94.4 million, respectively.
Current wording
During the years ended December 31, 2024, and 2023, our average U.S. Dollar notional exposure, calculated daily on a weighted average based on the duration of each forward contract, to foreign currency forward contracts were $55.5 million and $97.4 million, respectively.
Previous wording
As of December 31, 2023, we had $24.5 million in cash and cash equivalents and restricted cash and cash equivalents and $329.7 million of undrawn capacity on our senior revolving credit and special purpose vehicle asset facilities, subject to borrowing base and other limitations. As of December 31, 2023, the undrawn capacity under our facilities and cash and cash equivalents were in excess of our unfunded commitments.
Current wording
As of December 31, 2024, we had $39.4 million in cash and cash equivalents and restricted cash and cash equivalents and $337.5 million of undrawn capacity on the unfunded unsecured notes, our senior revolving credit and special purpose vehicle asset facilities, subject to borrowing base and other limitations. As of December 31, 2024, the undrawn capacity under our facilities and cash and cash equivalents were in excess of our unfunded commitments.
Previous wording
The combined weighted average interest rate of the aggregate borrowings outstanding for the years ended December 31, 2023 and 2022 was 7.02% and 4.73%, respectively. The combined weighted average debt of the aggregate borrowings outstanding for the years ended December 31, 2023 and 2022 was $837.0 million and $673.5 million, respectively. As of December 31, 2023 and 2022, the weighted average cost of debt was 7.02% and 6.23%, respectively.
Current wording
The combined weighted average interest rate of the aggregate borrowings outstanding for the years ended December 31, 2024 and 2023 was 7.12% and 7.02%, respectively. The combined weighted average debt of the aggregate borrowings outstanding for the years ended December 31, 2024 and 2023 was $881.1 million and $837.0 million, respectively. As of December 31, 2024, and 2023, the weighted average cost of debt was 6.38% and 7.02%, respectively.
Previous wording
On March 28, 2016, Crescent Capital BDC Funding, LLC (“CCAP SPV”), a wholly owned subsidiary of CCAP, entered into a loan and security agreement, as amended from time to time (the “SPV Asset Facility”), with us as the collateral manager, seller and equity holder, CCAP SPV as the borrower, the banks and other financial institutions from time to time party thereto as lenders, and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, collateral agent, and lender. We consolidate CCAP SPV in our consolidated financial statements and no gain or loss is recognized from the transfer of assets to and from CCAP SPV.
Current wording
On March 28, 2016, Crescent Capital BDC Funding, LLC (“CCAP SPV”), a wholly owned subsidiary of CCAP, entered into a loan and security agreement, as amended from time to time (the “SPV Asset Facility”), with us as the collateral manager, seller and equity holder, CCAP SPV as the borrower, the banks and other financial institutions from time to time party thereto as lenders, and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, collateral agent, and lender. We consolidate CCAP SPV in our consolidated financial statements and no gain or loss is recognized from the transfer of assets to and from CCAP SPV. On May 31, 2024, CCAP SPV entered into the Seventh Amendment to Loan and Security Agreement. The amendment, among other things, (a) extended the last day of the reinvestment period to May 31, 2027, and the stated maturity date to May 31, 2029 and (b) reduced the spread from 2.75% to 2.45%.
Previous wording
The maximum commitment amount under the SPV Asset Facility is $500.0 million, and may be increased with the consent of Wells Fargo or reduced upon our request. Proceeds of the advances under the SPV Asset Facility may be used to acquire portfolio investments, to make distributions to us in accordance with the SPV Asset Facility, and to pay related expenses. The maturity date is the earlier of (a) the date the borrower voluntarily reduces the commitments to zero, (b) March 7, 2028 and (c) the date upon which Wells Fargo declares the obligations due and payable after the occurrence of an Event of Default. Borrowings under the SPV Asset Facility bear interest at daily simple SOFR plus a 2.75% margin with no floor. We pay unused facility fees of 0.50% per annum on committed but undrawn amounts under the SPV Asset Facility. The unused facility fee rate may vary based on the utilization. The SPV Asset Facility includes customary covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.
Current wording
The maximum commitment amount under the SPV Asset Facility is $500.0 million, and may be increased with the consent of Wells Fargo or reduced upon our request. Proceeds of the advances under the SPV Asset Facility may be used to acquire portfolio investments, to make distributions to us in accordance with the SPV Asset Facility, and to pay related expenses. The maturity date is the earlier of (a) the date the borrower voluntarily reduces the commitments to zero, (b) May 31, 2029 and (c) the date upon which Wells Fargo declares the obligations due and payable after the occurrence of an Event of Default. Borrowings under the SPV Asset Facility bear interest at daily simple SOFR plus a 2.45% margin with no floor. We pay unused facility fees of 0.50% per annum on committed but undrawn amounts under the SPV Asset Facility. The unused facility fee rate may vary based on the utilization. The SPV Asset Facility includes customary covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.
Previous wording
On October 27, 2021, we entered into a senior secured revolving credit agreement, as amended from time to time, with Sumitomo Mitsui Banking Corporation, as administrative agent, collateral agent and lender (the “SMBC Corporate Revolving Facility”). The maximum principal amount of the SMBC Corporate Revolving Facility is $385.0 million, subject to availability under the borrowing base. Borrowings under the SMBC Corporate Revolving Facility bear interest at adjusted SOFR plus 1.875% or 2.000%, subject to certain provisions in the SMBC Corporate Revolving Facility agreement, with no benchmark rate floor. We pay unused facility fees of 0.375% per annum on committed but undrawn amounts under the SMBC Corporate Revolving Facility. Any amounts borrowed under the SMBC Corporate Revolving Facility, and all accrued and unpaid interest, will be due and payable, on October 27, 2026.
Current wording
The maximum principal amount of the SMBC Corporate Revolving Facility is $310.0 million, comprised of $25.0 million term loan and $285.0 million revolving commitment, subject to availability under the borrowing base. Borrowings under the SMBC Corporate Revolving Facility bear interest at adjusted SOFR plus 2.000% or 2.125%, subject to certain provisions in the SMBC Corporate Revolving Facility agreement, with no benchmark rate floor. We pay unused facility fees of 0.375% per annum on committed but undrawn amounts under the SMBC Corporate Revolving Facility. Any amounts borrowed under the SMBC Corporate Revolving Facility, and all accrued and unpaid interest, will be due and payable, on December 3, 2029.
Previous wording
As of December 31, 2023 and 2022, our asset coverage ratio was 186% and 192%, respectively. We may also refinance or repay any of our indebtedness at any time based on our financial condition and market conditions. See Note 6. Debt to our consolidated financial statements for more detail on the debt facilities.
Current wording
As of December 31, 2024, and 2023, our asset coverage ratio was 183% and 186%, respectively. We may also refinance or repay any of our indebtedness at any time based on our financial condition and market conditions. See Note 6. Debt to our consolidated financial statements for more detail on the debt facilities.
Previous wording
Our investment portfolio may contain investments that are in the form of lines of credit or unfunded commitments which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying agreements. Unfunded commitments to provide funds to portfolio companies are not reflected on our Consolidated Statements of Assets and Liabilities. These commitments are subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that we hold. Since these commitments may expire without being drawn, the total commitment amount does not necessarily represent future cash requirements. As of December 31, 2023 and 2022, we had aggregate unfunded commitments totaling $175.0 million and $158.9 million, respectively.
Current wording
Our investment portfolio may contain investments that are in the form of lines of credit or unfunded commitments which require us to provide funding when requested by portfolio companies in accordance with the terms of the underlying agreements. Unfunded commitments to provide funds to portfolio companies are not reflected on our Consolidated Statements of Assets and Liabilities. These commitments are subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that we hold. Since these commitments may expire without being drawn, the total commitment amount does not necessarily represent future cash requirements. As of December 31, 2024, and 2023, we had aggregate unfunded commitments totaling $212.5 million and $175.0 million, respectively.
Previous wording
On February 15, 2024, our Board of Directors declared a regular first quarter cash dividend of $0.41 per share, which will be paid on April 15, 2024 to stockholders of record as of March 29, 2024. Additionally, our Board declared a supplemental cash dividend of $0.10 per share which will be paid on March 15, 2024 to stockholders of record as of February 29, 2024. The supplemental dividend is calculated as 50% of quarterly net investment income in excess of our regular quarterly dividend, subject to certain measurement tests and rounded to the nearest penny.
Current wording
On February 12, 2025, our Board of Directors declared the following cash dividends:
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report — wording carried elsewhere
For the years ended December 31, 2023 and 2022, net investment income excluding capital gains incentive fees (“Adjusted Net Investment Income”) was $82.5 million or $2.30 per share and $53.4 million or $1.73 per share, respectively. The increase in the per share Adjusted Net Investment Income was due to higher investment income earned year to date.