BlackRock BDC reports 19% NAV decline in Q4 as non-accruals bite

BlackRock TCP Capital Corp. disclosed that its net asset value per share declined by roughly 19% during the quarter ended Dec. 31, and said it had waived one-third of its management fee for the quarter.

The declining NAV was “primarily driven by issuer-specific developments during the quarter,” BlackRock told investors in a Jan. 23 Form 8-K filing previewing its Q4 earnings results.

Those issuers include, in order of impact, Edmentum, Razor, SellerX, HomeRenew (dba Renovo), Hylan, and InMobi. Together, these borrowers represented roughly 67% of the decline in NAV, the company said.

BlackRock held only equity and preferred equity stakes in education tech company Edmentum, the largest contributor. Its ownership position was marked at roughly $36.0 million as of Sept. 30, according to a recent filing. A New Mountain fund also held shares in the borrower alongside subordinated PIK debt; New Mountain marked down its stake in Q3, pointing to the “expensive” PIK securities sitting above its equity position.

Razor and SellerX are e-commerce aggregators, and both were once non-accrual names. The BDC had already realized a $72.6 million loss on its investment in Razor Group in the quarter ended Sept. 30, and replaced its non-accruing loans to the borrower with second-lien term loans (15.0% PIK) due 2029. Razor now operates under the issuer name Infinite Commerce Holdings LLC.

Loans to SellerX were restructured during the quarter ended June 30, 2025. As of Sept. 30, they were not on non-accrual status.

The BDC had already previewed losses in Renovo, a home remodeling business that was previously taken off non-accrual in Q2. Renovo commenced a liquidation process on Nov. 3; BlackRock said on a Nov. 6 earnings call that it would write down the investment entirely.

The other named contributors had not previously been non-accrual investments. An $11.7 million first-lien term loan to construction and engineering firm Hylan (S+625, 2.0% floor) was marked at roughly 94 cents on the dollar as of Sept. 30.

The BDC’s investments in InMobi, a mobile ad company, included only warrants to purchase common and preferred stock.

Overall, non-accruals rose to 9.6% at cost and 4.0% at fair value in Q4, the BDC previewed, up from 7.0% and 3.5% one quarter earlier. PIK income represented 10.9% of net investment income.

“While these credit impairments could likely be related to company-specific issues rather than systemic deterioration, the distribution of credit losses across multiple sectors is notable,” UBS analyst Michael Brown wrote in a Jan. 25 research note.

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Net regulatory leverage at TCPC rose to 1.45x as of Dec. 31, from 1.20x on Sept. 30. That corresponds to a total leverage ratio of roughly 1.74x, which the BDC said it expects will shrink as it exits certain positions.

The BDC’s publicly traded shares traded lower following the late Friday disclosure. TCPC stock opened at $5.03 per share Monday morning, down more than 14% from $5.86 per share at the close on Friday.

BlackRock TCP Capital Corp. will report earnings on Friday, Feb. 27, before market open.

Featured image: Adam Gault/Getty Images

This article originally appeared on PitchBook News

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