Cion Investment Corporation · NYSE:CION
Cion Investment — Investor Presentation (September 2021)
30 slides from Cion Investment's investor presentation, Sep 24, 2021
Slide 1: CION Investment Corporation Investor Presentation September 2021
CION Investment Corporation (CION) Investor Presentation September 2021
Slide 2: Disclosures
Disclosures 2 This presentation has been prepared by CĪON Investment Corporation (the “Company” or “CION”) and may be used for information purposes only . This presentation shall not constitute an offer to sell or the solicitation of any offer to buy any securities . Any such offering of securities
Slide 3: CION's Executive Team
• 17 years of investing experience • Co - Founder, CION Investment Group, LLC • Co - CEO, CION Investment Corporation • Co - CEO, CION Ares Diversified Credit Fund Mark Gatto Co - Chief Executive Officer • Attorney, private practice in NJ • B.A., Montclair State University; J.D. and M.B.A, Seton Hal
Slide 4: Listing Overview and Fee Structure
Subject to market conditions and final Board of Directors and NYSE approvals Anticipated Timing 1.50% management fee on average gross assets, 1.00% on average gross assets will apply to any amount of assets attributable to leverage decreasing CION’s asset coverage ratio below 200% 17.5% incentive fe
Slide 5: Evolution of CION Investment Corporation
$4 $105 $362 $670 $1,089 $1,714 $1,865 $1,765 $1,569 $1,724 Total Portfolio Investments ($ in Millions, at Fair Value) Jan - 19: Follow - on continuous public offering ends FY’19 FY’17 FY’16 FY’14 FY’15 FY’12 FY’13 FY’18 FY’20 FY’21 Dec - 12: CION officially commences operations 5 CION is a leading
Slide 6: CION Investment Group Overview
CIM appoints Gregg Bresner as Senior Managing Director and Chief Investment Officer • CION Investment Group, LLC (“CION Investment Group”) is a vertically integrated alternative investment manager and retail distribution organization with over $4B in AUM as of June 30, 2021 • Direct access to altern
Slide 7: Investment Highlights
• Rigorous in - house underwriting is an effective “filter” for top - quality origination • Top - tier institutional relationships; including PE firms, asset managers, investment banks, and other middle market lenders • 2,500+ transactions closed and $6.7B capital deployed since inception, providing
Slide 8: CION Investment Group's Organizational Flexibility
FINANCE, ACCOUNTING, OPERATIONS Keith Franz (Chief Financial Officer) Nicholas Tzoumas (Director of Valuations) 1 Director of Accounting, 2 Senior Associates, 2 Associates LEGAL & COMPLIANCE Stephen Roman (Chief Compliance Officer & Counsel) 2 Senior Directors, 2 Associates CORPORATE OPERATIONS 9 Em
Slide 9: How does CION Differentiate Itself in the Market?
9 How does CION Differentiate Itself in the Market? Exclusive Focus of Investment Team Organizational Flexibility Provides a Competitive Advantage Robust Sourcing Approach that is Differentiated and Scaled Fund Flexibility and Scale are Highly Advantageous INVESTMENT PLATFORM Target First Lien Marke
Slide 10: The BDC is the Exclusive Focus of CIM's Investment Team
10 The BDC is the Exclusive Focus of CIM’s Investment Team Single BDC strategy provides a tremendous focus and efficiency to sourcing, underwriting and portfolio management ▪ Unlike many listed BDC peers, CION’s investment team focuses solely on one fund and not an entire platform, which provides tr
Slide 11: Organizational Flexibility Provides a Competitive Advantage
11 Organizational Flexibility Provides a Competitive Advantage INVESTMENT PLATFORM ADVANTAGES Flat organizational structure and highly involved Investment Committee results in efficient, dynamic culture ▪ Highly iterative approach enhances underwriting, execution and monitoring and enables team to p
Slide 12: Highly Inclusive Sourcing Approach Avoiding Traditional Sponsor Coverage Model
12 Highly Inclusive Sourcing Approach Avoiding Traditional Sponsor Coverage Model INVESTMENT PLATFORM ADVANTAGES Highly inclusive sourcing approach is accretive to both the size of the investment opportunity funnel and returns ▪ Focus on direct first lien club investments with a deep and diverse net
Slide 13: Robust Sourcing Approach that is Differentiated and Scaled
Robust Sourcing Approach that is Differentiated and Scaled 13 CION generates deal flow from an extensive network of 100+ partners SELECT KEY PARTNERS THAT CION HAS TRANSACTED WITH
Slide 14: Strong Origination Funnel with Disciplined Underwriting
CIM maintains consistently strong deal flow yet remains highly selective and efficient in evaluating investment opportunities 2021 YTD as of 6/30/21 Number of Deals % of Total Deals Sourced 288 100% 70 25% 30 10% 28 < 10% Strong Origination Funnel with Disciplined Underwriting 14 Deal Sourced Final
Slide 15: CION has Consistently Originated Premium 1st Lien Yields vs. the Overall Loan Market
15 CION has Consistently Originated Premium 1 st Lien Yields vs. the Overall Loan Market 4.92% 5.90% 6.66% 5.56% 4.53% 7.59% 9.17% 9.77% 9.02% 8.37% 6.36% 7.06% 8.07% 7.44% 5.98% 2017 2018 2019 2020 YTD 2021 S&P Middle-Market Index (> $50 million of EBITDA) CION 1st Lien Origination S&P Middle-Marke
Slide 16: Select CION Investments Case Study
16 Select CION Investments Case Study 1 CION was invited to join a club formed to finance the acquisition of one of the largest tax - preparation services in the United States, responsible for preparing over 2 million federal, state, and local income - tax returns each year . Summary Terms: Structur
Slide 17: Select CION Investments (Cont'd)
17 Select CION Investments (Cont’d) In addition, CION is able to lead deals and maintains unique relationships with key borrowers Case Study 5 CION led the financing for the acquisition of a leading North American supplier of custom mechanical and manufacturing solutions for leading Fortune 500 tech
Slide 18: Portfolio Overview
$1.7B Total Portfolio at Fair Value 132 Portfolio Companies 0.4% Investments on Non - Accrual Status, Fair Value $49.0mm Median Annual Portfolio Company EBITDA 18 Source: Company Filings. Note: Financial data as of June 30, 2021. Numbers may not sum to 100% due to rounding. (1) Represents gross annu
Slide 19: Benefits of "Dollar One" Investing at the Top of the Capital Structure
19 Benefits of “Dollar One” Investing at the Top of the Capital Structure Senior Secured – Second Lien Unsecured High Yield Product Mezzanine Preferred Equity Equity Highe s t Lo w e s t Senior Secured – First Lien Investing in First lien tranche of the Borrower: Credit Facility Avg. Debt Advance Ra
Slide 20: Cumulative Annualized Loss/(Gain) Rate by Lien
Cumulative Annualized Loss/ (Gain) Rate: 0.11 % 3 Total Number of Investments: 744 2 Total Invested Capital: $5.3B 1 FIRST LIEN Total Number of Investments: 144 2 Cumulative Annualized Loss/(Gain) Rate: (0.02%) 3 Total Invested Capital: $1.2B 1 SECOND LIEN 20 (1) Invested capital represents the cost
Slide 21: Asset & Leverage Profile vs. Listed BDC Peers
96.8% 96.5% 93.8% 92.6% 92.5% 87.7% 87.7% 86.7% 86.2% 86.1% 83.3% 77.4% 77.2% 73.3% 70.1% 67.0% 51.3% BDC 1 BDC 2 BDC 3 BDC 4 BDC 5 BDC 6 BDC 7 BDC 8 BDC 9 BDC 10 BDC 11 BDC 12 BDC 13 BDC 14 BDC 15 BDC 16 0.58x 0.78x 0.83x 0.85x 0.86x 0.87x 0.97x 1.01x 1.07x 1.08x 1.09x 1.16x 1.19x 1.21x 1.39x 1.40x
Slide 22: Debt Summary
22 Total Committed Amount Principal Amount Outstanding Interest Rate Maturity Date JPM Credit Facility $575 $550 L + 3.10% 5/15/2024 UBS Facility 150 100 L + 3.375% 11/19/2023 Unsecured Notes, 2026 125 125 4.50% 2/11/2026 Unsecured Term Loan 30 30 5.20% 9/30/2024 Total Debt $880 $805 3.9% Source: Co
Slide 23: Potential Increased Leverage Capacity
23 Potential Increased Leverage Capacity Current maximum regulatory leverage • Following a listing, CION intends to seek shareholder approval to reduce its asset coverage ratio from 200% to 150%. Neither sha reholder approval nor the ability to obtain additional financing on attractive terms are gua
Slide 24: Illustrative Pro Forma Business Economics
24 Base Management Fee: 1.50% (1.00% on assets financed below 200% asset coverage) Incentive Fee: 17.5% Hurdle Rate: 6.5% Leverage (Debt - to - Equity): 1.00x - 1.25x ( Representative senior secured lending peer target range) Source: Company Filings. Note: Financial data as of June 30, 2021. Data re
Slide 25: Final Q&A
Final Q&A GION
Slide 26: Historical Portfolio Activity
26 Consistent focus on senior secured investments at the top of the capital structure Source: Company Filings. Note: Financial data as of June 30, 2021. Total Investment Portfolio includes Total Return Swaps, at fair value. (1) Calculated as total debt plus unamortized debt issuance costs divided by
Slide 27: Financial Profile
CION has demonstrated a strong and consistent financial profile 27 Financial Profile Source: Company Filings. Note: Financial data as of June 30, 2021. (1) NII Yield calculated as TTM net investment income divided by the average quarterly NAV for the respective periods. (2) Distribution Yield calcul
Slide 28: Historical Income Statement
28 Historical Income Statement Source: Company Filings. Note: Financial data as of June 30, 2021. (in thousands, except share and per share amounts) For the Three Months Ended 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 Investment Income Total investment income $35,808 $38,887 $45,748 $36,303
Slide 29: Historical Balance Sheet
29 Historical Balance Sheet Source: Company Filings. Note: Financial data as of June 30, 2021. (1) Calculated as total debt plus unamortized debt issuance costs divided by equity. As of 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 Assets Total Investments, at fair value $1,571,728 $1,569,905 $
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