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1. Company Snapshot

1.a. Company Description

THL Credit, Inc.is a business development company specializing in direct and fund of fund investments.The fund seeks to invest in debt and equity securities of middle market companies.


It seeks to invest in PIPES, growth, acquisition, market or product expansion, recapitalization, mature, and change of control transactions in both sponsored and unsponsored issuers.The fund does not intend to invest in start-up companies, operationally distressed situations, or companies with speculative business plans.The fund invests primarily in debt securities, including unsecured subordinated or mezzanine debt and second lien secured debt, which may include an associated equity component such as warrants, preferred stock, options to buy minority interest, and other similar securities.


Its investments may also include high-yield bonds, private equity investments, securities of public companies that are broadly traded, and securities of non-United States companies.It seeks to invest in outsourced business services, healthcare, financials, retailing, media, and consumer discretionary.The fund may make direct equity investments, including equity investments into or through funds, and also selectively invest in syndicated first lien secured loans, including unitranche investments.


It seeks to invest between $10 million and $25 million of capital per transaction in companies with annual revenues ranging from $25 million to $500 million and annual EBITDA between $5 million and $25 million.The fund prefers to be a lead or sole investor in a transaction.

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1.b. Last Insights on FCRX

Positive drivers behind First Eagle Alternative Capital BDC, Inc.'s recent performance include its strong Q4 2024 earnings release, which reported net investment income of $0.55 per share and net income of $0.27 per share, beating estimates. The company's declared first-quarter base dividend of $0.42 per share and series of special dividends also boosted investor confidence. Additionally, the reported net asset value (NAV) per share of $19.98 at December 31, 2024, indicates a strong balance sheet position.

1.c. Company Highlights

2. Crescent Capital BDC's Q3 Earnings: Navigating Tariff-Induced Losses and Portfolio Stability

Crescent Capital BDC, Inc. (CCAP) reported its third-quarter earnings, with net investment income (NII) of $0.46 per share, unchanged from the prior quarter, and an annualized NII yield of 9.5%. The company's actual EPS came out at $0.1916, missing estimates at $0.4654. The net asset value (NAV) was $19.28 per share, down from $19.55 per share in the second quarter, primarily due to unrealized and realized losses from portfolio companies impacted by tariffs. CCAP's portfolio consists of approximately $1.6 billion in investments across 187 companies.

Publication Date: Nov -29

📋 Highlights
  • Stable NII and Yield:: Net investment income (NII) of $0.46/share remained flat quarter-over-quarter, with an annualized NII yield of 9.5%.
  • NAV Decline:: Net asset value (NAV) dropped to $19.28/share from $19.55, driven by unrealized/reized losses from tariff-impacted portfolio companies.
  • Strong Dividend Coverage:: Dividend coverage reached 110%, supporting the declared $0.42/share Q4 dividend amid a low-base-rate environment.
  • Debt Management:: Net debt-to-equity of 1.20x, with $240M undrawn liquidity and $185M in newly priced senior notes to refinance 2026 maturities.
  • Private Credit Growth:: $6B in trailing 12-month capital deployed via the private credit platform, with weighted average loan-to-value of 40% and 99% sponsor-backed debt.

Portfolio Composition and Performance

CCAP's portfolio is focused on domestic service-oriented businesses and sponsor-backed companies, with a weighted average loan to value of approximately 40% and 99% of its debt portfolio in sponsor-backed companies. The weighted average yield of its income-producing securities remained stable quarter over quarter at 10.4%. The company's internal performance ratings show stability in the fundamental performance of its portfolio, with a weighted average portfolio risk rating of 2.1. Non-accruals improved from 2.4% to 1.6% as of September 30.

Dividend Coverage and Capital Structure

The company's dividend coverage was 110% for the quarter, and the board declared a regular dividend of $0.42 per share for the fourth quarter. CCAP ended the quarter with net debt to equity of 1.20x and $240 million of undrawn capacity. The company's debt to equity ratio was 1.23 times, or 1.20x on a net basis, within its target range.

Valuation and Outlook

With a P/E Ratio of 12.04 and a Dividend Yield of 13.24%, CCAP's valuation suggests a relatively stable income stream. Analysts estimate next year's revenue growth at -6.2%. As CCAP navigates the challenges of a lower base rate environment, it expects a gradual reduction in portfolio yields and pressure on NII. However, the company believes it has several levers to offset potential earnings pressure, including a flexible capital structure and a strong origination pipeline.

Market Conditions and Competitive Landscape

CCAP focuses on the core loan middle market, where it has seen some spread compression due to lower volumes rather than increased competition from new entrants. High-quality private transactions in the lower and core markets are being done at spreads around S+450-500. The company has deployed around $6 billion across its private credit platform over the last 12 months, being selective and competitive on rates while maintaining documentation and capitalization discipline.

3. NewsRoom

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Crescent Capital BDC Inc (CCAP) Q3 2025 Earnings Call Highlights: Navigating Tariff Challenges ...

Nov -13

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Crescent Capital BDC (CCAP) Earnings Transcript

Nov -13

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Crescent Capital BDC (CCAP) Misses Q3 Earnings and Revenue Estimates

Nov -12

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Crescent Capital BDC: Q3 Earnings Snapshot

Nov -12

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Crescent Capital BDC, Inc. Reports Third Quarter 2025 Earnings Results; Declares a Fourth Quarter Base Dividend of $0.42 Per Share

Nov -12

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Analysts Estimate Crescent Capital BDC (CCAP) to Report a Decline in Earnings: What to Look Out for

Nov -05

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KBRA Assigns Rating to Crescent Capital BDC, Inc.'s $185 Million Senior Unsecured Notes due in 2029 and 2031

Nov -04

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Crescent Capital BDC, Inc. Schedules Earnings Release and Conference Call to Discuss its Third Quarter Ended September 30, 2025 Financial Results

Oct -28

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.50%)

6. Segments

Investment and Related Activities

Expected Growth: 8.5%

Middle-market companies' growing demand for financing solutions, increasing need for income and capital appreciation, and First Eagle Alternative Capital BDC's diversified investment portfolio drive growth.

7. Detailed Products

Senior Secured Loans

First Eagle Alternative Capital BDC, Inc. provides senior secured loans to middle-market companies, offering a flexible and customized financing solution to meet their capital needs.

Unitranche Loans

The company offers unitranche loans, which combine the benefits of senior and subordinated debt into a single loan facility, providing borrowers with a simplified and efficient financing solution.

Second Lien Loans

First Eagle Alternative Capital BDC, Inc. provides second lien loans, which offer borrowers additional capital while allowing them to maintain control of their business.

Equity Co-Investments

The company makes equity co-investments alongside its debt investments, providing borrowers with a comprehensive financing solution and aligning its interests with those of its portfolio companies.

Structured Equity

First Eagle Alternative Capital BDC, Inc. offers structured equity investments, which provide borrowers with a flexible and customized financing solution that combines debt and equity features.

8. First Eagle Alternative Capital BDC, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for First Eagle Alternative Capital BDC, Inc. is medium due to the presence of alternative investment options for investors, but the company's diversified portfolio and strong management team mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for First Eagle Alternative Capital BDC, Inc. as the company's investment products are diversified and cater to a wide range of investors, reducing the dependence on individual customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for First Eagle Alternative Capital BDC, Inc. as the company relies on a diverse range of suppliers for its investment products, but has some negotiating power due to its scale and reputation.

Threat Of New Entrants

The threat of new entrants is high for First Eagle Alternative Capital BDC, Inc. due to the relatively low barriers to entry in the investment management industry, and the increasing popularity of alternative investment options.

Intensity Of Rivalry

The intensity of rivalry is high for First Eagle Alternative Capital BDC, Inc. due to the highly competitive nature of the investment management industry, with many established players and new entrants vying for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.22%
Debt Cost 6.98%
Equity Weight 46.78%
Equity Cost 8.30%
WACC 7.60%
Leverage 113.76%

11. Quality Control: First Eagle Alternative Capital BDC, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
First Eagle Alternative Capital BDC

A-Score: 7.3/10

Value: 6.3

Growth: 7.4

Quality: 6.3

Yield: 9.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Barings

A-Score: 7.3/10

Value: 2.6

Growth: 4.6

Quality: 8.8

Yield: 10.0

Momentum: 8.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
General American Investors Company

A-Score: 7.2/10

Value: 5.3

Growth: 2.8

Quality: 8.9

Yield: 9.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Sixth Street Specialty Lending

A-Score: 6.9/10

Value: 5.2

Growth: 4.3

Quality: 6.5

Yield: 10.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Crescent Capital BDC

A-Score: 6.8/10

Value: 6.3

Growth: 7.4

Quality: 6.3

Yield: 10.0

Momentum: 1.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Carlyle Secured Lending

A-Score: 6.6/10

Value: 5.7

Growth: 7.1

Quality: 6.1

Yield: 10.0

Momentum: 1.0

Volatility: 9.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

25.05$

Current Price

25.05$

Potential

-0.00%

Expected Cash-Flows