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1. Company Snapshot

1.a. Company Description

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, buyout in middle market companies.It also makes acquisitions in businesses complementary to the firm's business.It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors.


The fund typically invests $1 million to $20 million in its portfolio companies.It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million.The fund targets the companies with EBITDA between $5 million and $25 million.


While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million.It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.

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1.b. Last Insights on PTMN

Portman Ridge Finance Corporation's recent performance was negatively impacted by a decline in net asset value (NAV) and earnings. The company's poor new investment activity and a 32% dividend cut contributed to this decline. Additionally, non-accruals and growing PIK income indicate quality issues and distressed borrowers in the portfolio. Furthermore, the company's price is inversely related to interest rates, and with rates expected to remain high, the stock is likely to continue underperforming.

1.c. Company Highlights

2. BCP Investment Corporation Beats Expectations with Strong Q3 2025 Earnings

BCP Investment Corporation reported a significant improvement in its financial performance for the third quarter of 2025, with net investment income reaching $8.8 million or $0.71 per share, surpassing expectations of $0.49 per share. This represents a substantial increase from the prior quarter's $4.6 million or $0.50 per share. The company's net asset value (NAV) also saw a considerable rise, totaling $231.3 million, an increase of $66.6 million from the previous quarter.

Publication Date: Nov -26

📋 Highlights

Investment Portfolio Performance

The investment portfolio remained highly diversified across 79 different portfolio companies and 28 industries, with an average par balance of $3.2 million per entity. The portfolio had 10 investments on nonaccrual status, with 2 of those continuing to recognize interest income on a cash basis. As Patrick Schafer noted, "Putting the 2 portfolios together was slightly dilutive on a yield at par basis. However, our new origination was about 12.5% yield."

Financial Results and Capital Allocation

Brandon Satoren discussed the financial results, including a $2 million increase in gross expenses and net expenses of $10.1 million. The company finished the quarter with $110 million of available borrowing capacity under the senior secured revolving credit facilities and extended and laddered its unsecured debt maturities. The CEO emphasized the company's focus on disciplined capital allocation, maintaining a high-quality portfolio, and delivering attractive risk-adjusted returns to shareholders.

Share Repurchase and Valuation

The company plans to commence a modified Dutch auction tender of approximately $9 million, combined with daily share repurchases and open market purchases, with the goal of approximating 10% of outstanding shares by year-end. With a P/E Ratio of 7.28 and a P/B Ratio of 0.52, the company's valuation appears attractive. The Dividend Yield stands at 15.1%, indicating a potentially appealing return for income-focused investors.

Growth Prospects and Analyst Estimates

Analysts estimate next year's revenue growth at 16.2%, suggesting a positive outlook for the company's future performance. The significant beat in EPS this quarter, with actual EPS at $0.71 compared to estimates of $0.49, underscores the company's potential for delivering strong financial results.

3. NewsRoom

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BCP Investment Corporation: Best Opportunity After A Deep Dive Into Private Credit

Dec -03

Source: seekingalpha.com

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Financial Review: Noah (NYSE:NOAH) and Portman Ridge Finance (NASDAQ:PTMN)

Nov -04

Source: defenseworld.net

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BCP Investment Corporation to Ring Nasdaq Stock Market Opening Bell on September 5, 2025

Sep -03

Source: globenewswire.com

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Portman Ridge Finance Corporation (PTMN) Q2 2025 Earnings Call Transcript

Aug -08

Source: seekingalpha.com

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Portman Ridge (PTMN) Q2 Earnings and Revenues Beat Estimates

Aug -08

Source: zacks.com

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Portman Ridge Finance Corporation Announces Second Quarter 2025 Financial Results

Aug -07

Source: globenewswire.com

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Portman Ridge Finance Corporation Schedules Second Quarter 2025 Earnings Release and Conference Call

Jul -16

Source: globenewswire.com

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Portman Ridge Finance Corporation Closes Merger with Logan Ridge Finance Corporation

Jul -15

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.20%)

6. Segments

Investment and Related Activities

Expected Growth: 10.2%

Growing demand for financing solutions among middle-market companies, increasing need for debt and equity securities, and expansion of Portman Ridge Finance Corporation's investment portfolio drive growth in this segment.

7. Detailed Products

Senior Secured Loans

Portman Ridge Finance Corporation provides senior secured loans to middle-market companies, offering a flexible and customized financing solution to meet their unique needs.

Unitranche Loans

Portman Ridge Finance Corporation offers unitranche loans, which combine the benefits of senior and subordinated debt into a single loan facility, providing a simplified and efficient financing solution.

Second Lien Loans

Portman Ridge Finance Corporation provides second lien loans, offering a flexible and customized financing solution for middle-market companies with complex capital structures.

Equity Co-Investments

Portman Ridge Finance Corporation makes equity co-investments alongside its debt investments, providing a comprehensive financing solution for middle-market companies.

8. Portman Ridge Finance Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Portman Ridge Finance Corporation operates in a niche market, providing financing solutions to middle-market companies. While there are some substitutes available, they are not easily accessible, and the company's expertise and reputation provide a competitive advantage.

Bargaining Power Of Customers

Portman Ridge Finance Corporation's customers are typically middle-market companies that rely on the company's financing solutions. These customers have limited bargaining power due to their smaller size and limited alternatives.

Bargaining Power Of Suppliers

Portman Ridge Finance Corporation relies on a diverse range of suppliers, including banks, financial institutions, and other lenders. While these suppliers have some bargaining power, the company's diversified supply chain and strong relationships mitigate this risk.

Threat Of New Entrants

Entering the financing solutions market requires significant capital, expertise, and regulatory approvals. These barriers to entry limit the threat of new entrants, and Portman Ridge Finance Corporation's established reputation and expertise provide a competitive advantage.

Intensity Of Rivalry

The financing solutions market is highly competitive, with several established players competing for market share. Portman Ridge Finance Corporation must differentiate itself through its expertise, customer service, and innovative solutions to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.16%
Debt Cost 7.56%
Equity Weight 39.84%
Equity Cost 8.57%
WACC 7.96%
Leverage 151.00%

11. Quality Control: Portman Ridge Finance Corporation passed 1 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

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Portman Ridge Finance

A-Score: 5.7/10

Value: 6.0

Growth: 4.7

Quality: 3.2

Yield: 10.0

Momentum: 0.5

Volatility: 10.0

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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

12.27$

Current Price

12.27$

Potential

0.00%

Expected Cash-Flows