BlackRock TCP Capital Corp

Current report

The current United States administration has threatened or imposed tariffs on certain imports from a number of countries, including China. Tariffs and international trade arrangements may continue to change, potentially without warning and to an extent that is difficult to predict. Existing or new tariffs imposed on foreign goods imported by the United States or on U.S. goods imported by foreign countries could subject us or our portfolio companies to additional risks. Among other effects, tariffs may increase the cost of production for certain of our portfolio companies or reduce demand for their products, which could affect the results of their operations, and may cause a general economic slowdown or recession. We cannot predict whether, or to what extent, any tariff or other trade protections may affect us, our portfolio companies or the economy.

Current report

Many of our portfolio companies may be susceptible to economic slowdowns or recessions and may be unable to repay our loans during these periods. Therefore, our non-performing assets may increase and the value of our portfolio may decrease during these periods as we are required to record the values of our investments. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing investments and harm our operating results.

Current report

A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize our portfolio company’s ability to meet its obligations under the debt securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if one of our portfolio companies were to go bankrupt, even though we or one of our affiliates may have structured our interest in such portfolio company as senior debt, depending on the facts and circumstances, including the extent to which we actually provided managerial assistance to that portfolio company, a bankruptcy court might re-characterize our debt holding as equity and subordinate all or a portion of our claim to claims of other creditors.

Current report

Efforts by the Federal Reserve and other central banks globally to combat inflation and restore price stability, as well as other global events, may raise the prospect or severity of a recession. Wars have added, and other international tensions or escalations of conflict may add, instability to the uncertainty driving socioeconomic forces, which may continue to have an impact on global trade and result in inflation or economic instability. Present conditions and the state of the U.S. and global economies make it difficult to predict whether and/or to what extent a recession will occur in the near future.

Current report

Any such recession would negatively impact the businesses in which we invest and our business. These impacts may include:

Current report

severe declines in the market price of our securities or net asset value;

Current report

inability of the Company to accurately or reliably value its portfolio;

Current report

inability of the Company to comply with certain asset coverage ratios that would prevent the Company from paying dividends to our shareholders and that could result breaches of covenants or events of default under our credit agreement or debt indentures;

Current report

inability of the Company to pay any dividends and distributions or service its debt;

Current report

inability of the Company to maintain its status as a RIC under the Code;

Current report

increased risk of default or bankruptcy by the companies in which we invest;

Current report

increased risk of companies in which we invest being unable to weather an extended cessation of normal economic activity and thereby impairing their ability to continue functioning as a going concern;

Current report

limited availability of new investment opportunities;

Current report

inability for us to replace our existing leverage when it becomes due or replace it on terms as favorable as our existing leverage; and

Current report

general threats to the Company’s ability to continue investment operations and to operate successfully as a BDC.

Current report

The following table summarizes the total shares repurchased and amounts paid by the Company under the Company Repurchase Plan, including broker fees, for the three months ended March 31, 2025.

Previous report

Our use of borrowed funds, including under the Leverage Program, to make investments exposes us to risks typically associated with leverage.

Previous report

The Company borrows money, both directly and indirectly, through SVCP, TCPC Funding II, SBIC and Merger Sub. As a result:

Previous report

adverse changes in interest rates, whether as a result of fluctuations in the reference rates for our floating rate debt, changes in margin, higher fixed rate debt or otherwise, could reduce or eliminate the incremental income we make with the proceeds of leverage;

Previous report

we, and indirectly our common stockholders, bear the entire cost of issuing and paying interest or dividends on any borrowed funds issued by us or our subsidiaries; and

Previous report

our ability to pay dividends on our common stock will be restricted if our asset coverage ratio is not at least 150% and any amounts used to service indebtedness would not be available for such dividends.

Previous report

The use of leverage creates increased risk of loss and is considered a speculative investment technique. The use of leverage magnifies the potential gains and losses from an investment and increases the risk of loss of capital. To the extent that income derived by us from investments purchased with borrowed funds is greater than the cost of borrowing such funds, our net income will be greater than if leverage had not been used. Conversely, if the income from investments purchased from these sources is not sufficient to cover the cost of the leverage, our net investment income will be less than if leverage had not been used, and the amount available for ultimate distribution to the holders of common stock will be reduced. The extent of any gains and losses associated with our leverage generally will depend on the degree of leverage employed. We may, under some circumstances, be required to dispose of investments under unfavorable market conditions in order to maintain our leverage, thus causing us to recognize a loss that might not otherwise have occurred. In the event of a sale of investments upon default under our borrowing arrangements, secured creditors will be contractually entitled to direct such sales and may do so in their interest, rather than in the interests of the holders of common stock. Holders of common stock will incur losses if the proceeds from a sale in any of the foregoing circumstances are insufficient, after payment in full of amounts due and payable on leverage, including administrative and other fees and expenses, to repay the cost of such holders’ investment in our common stock. As a result, you could experience a total loss of your investment. Any decrease in our revenue would cause our net income to decline more than it would have had we not borrowed funds and could negatively affect our ability to make distributions on our common stock. The ability to service any debt that we have or may have outstanding depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. There is no limitation on the percentage of portfolio investments that can be pledged to secure borrowings. The amount of leverage that we employ at any particular time will depend on our Advisor’s and our board of director’s assessments of market and other factors at the time of any proposed borrowing.

Previous report

The Operating Facility matures on August 1, 2029, subject to extension by the lenders at the request of SVCP, the Funding Facility II matures on August 4, 2027, subject to extension by the lender at the request of TCPC Funding II and the Merger Sub Facility matures on September 6, 2028. Any inability to renew, extend or replace the Operating Facility, Funding Facility II or Merger Sub Facility could adversely impact our liquidity and ability to find new investments or maintain distributions to our stockholders.

Previous report

The Operating Facility matures on August 1, 2029, subject to extension by the lenders at the request of SVCP. Borrowings under the Operating Facility generally bear interest at a rate of SOFR plus a credit spread adjustment of 0.10%, plus a margin equal to either 1.75% or 2.00%, depending on a ratio of the borrowing base thereunder to the facility commitments, subject to certain limitations. Funding Facility II matures on August 4, 2027, subject to extension by the lender at the request of TCPC Funding II. Borrowings under the Funding Facility II generally bear interest at a rate of SOFR plus a credit spread adjustment of 0.15%, plus a margin of 2.05%, subject to certain funding requirements, plus an agency fee of 0.15% per annum. The Merger Sub Facility matures on September 6, 2028. Borrowings under the Merger Sub Facility generally bear interest at a rate of SOFR plus a credit spread adjustment of 0.10%, plus a margin equal to either 1.75% or 2.00%, depending on a ratio of the borrowing base to the facility commitments, subject to certain limitations.

Previous report

We do not currently know whether we will renew, extend or replace the Operating Facility, Funding Facility II or Merger Sub Facility upon their maturities or whether we will be able to do so on terms that are as favorable as the Operating Facility, Funding Facility II and Merger Sub Facility, as applicable.

Previous report

Ourability to replace the Operating Facility, Funding Facility II and Merger Sub Facility may be constrained by then-current economic conditions affecting the credit markets. In the event that we are not able to replace the Operating Facility, Funding Facility II or Merger Sub Facility at the time of its respective maturity, this may require us to liquidate assets to repay amounts due under such facilityand could have a material adverse effect on our liquidity and ability to fund new investments, our ability to make distributions to our stockholders and our ability to qualify as a RIC.

Previous report

Lenders under the Operating Facility may have a veto power over the Company’s investment policies.

Previous report

If a default has occurred under the Operating Facility, the lenders under the Operating Facility may veto changes in investment policies. The Operating Facility and the Merger Sub Facility also have certain limitations on unusual types of investments such as commodities, real estate and speculative derivatives, which are not part of the Company’s investment strategy or policies in any event.

Previous report

We may be unable to realize the benefits anticipated by the Merger, including estimated cost savings, or it may take longer than anticipated to achieve such benefits.

Previous report

The realization of certain benefits anticipated as a result of the Merger will depend in part on our ability to realize estimated cost savings. It is possible that our estimates of the potential Merger-related cost savings ultimately could be incorrect. If our estimates turn out to be incorrect, the anticipated cost savings may not be fully realized or realized at all or may take longer to realize than expected.

Previous report

We are dependent upon senior management personnel of the Advisor for our future success; if the Advisor is unable to retain qualified personnel or if the Advisor loses any member of its senior management team, our ability to achieve our investment objective could be significantly harmed.

Previous report

The success of the Company is highly dependent on the financial and managerial expertise of the Advisor. The loss of one or more of the voting members of the Investment Committee could have a material adverse effect on the performance of the Company. Although the Advisor and the voting members of the Investment Committee devote a significant amount of their respective efforts to the Company, they actively manage investments for other clients and are not required to (and will not) devote all of their time to the Company’s affairs. In addition, in connection with the acquisition of the Advisor by BlackRock in August 2018, certain senior members of the Advisor's investment team and other key advisory personnel were granted retention bonuses. As the last of such retention bonuses have recently been paid, there may be less economic incentive for certain senior investment team members and certain other key personnel to remain with the Advisor than in prior periods. Certain members of the Advisor's investment team that received such bonuses have left the firm. The loss of key members of the Advisor’s investment team, or a material portion of other key advisory personnel, could have a material adverse effect on the performance of the Company if the Advisor were unable to replace such persons in a timely manner.

Previous report — wording carried elsewhere

December 31, 2024 and for each fiscal quarter in the years ended December 31, 2023 and December 31, 2022. On September 30, 2024, the reported closing price of our common stock was $8.29 per share.