Pennantpark Investment Corporation · NYSE:PNNT
Pennantpark Investment — Q1 2020 Earnings Presentation
14 slides from Pennantpark Investment's earnings presentation, Feb 7, 2020
Slide 1: December 31, 2019
December 31, 2019 NEW YORK • CHICAGO • HOUSTON • LOS ANGELES
Slide 2: Forward-looking Statements and Risk Factors
Forward-looking Statements and Risk Factors This presentation may include forward-looking statements. These forward-looking statements include comments with respect to our objectives and strategies and results of our operations. However, by their nature, these forward-looking statements involve nume
Slide 3: Established Credit Platform
Established Credit Platform $3.8 billion total Assets Under Management Established Investment Platform • PennantPark Investment Advisers founded 13 years ago before the financial crisis – NASDAQ: “PNNT” – NASDAQ: “PFLT” • Deep expertise in middle market direct – IPO Date: April 2007 – IPO Date: Apri
Slide 4: Established Credit Platform
Established Credit Platform Founded in 2007 Funded $10B in 535 companies Consistent PNNT Disciplined Investor Relationship & Solution Driven Performance & Track Conservative Portfolio Record Construction • Value oriented with • Team approach • Low volatility of goal of capital underlying portfolio •
Slide 5: Why is PNNT Well Positioned?
Why is PNNT Well Positioned? • Decades of experience in middle market sponsor-driven direct lending • Investment committee has worked together for over 20 years Experienced Experienced Team • Stable, consistent investment team Team • Headquarters in New York with offices in Los Angeles, Chicago, and
Slide 6: Underwriting Philosophy & Process
Underwriting Philosophy & Process1 Investment Philosophy Capital preservation is paramount Companies with positive cash flow (in order to de-risk) Companies owned by reputable financial sponsors with track records supporting portfolio companies Run by experienced management teams with capability to
Slide 7: PNNT Has a Compelling Track Record
PNNT Has a Compelling Track Record Portfolio growth has been measured and consistent with market opportunity $669 million of dividends paid to shareholders since inception – To date, dividends paid to shareholders are approximately 80% of equity capital raised1 Low loss experience: approximately 30
Slide 8: Overall Portfolio as of December 31, 2019
Overall Portfolio as of December 31, 2019 Highly Diversified Industry Mix1 Portfolio Overview Oil and Gas, 1% (1) 78 Different Companies Other Media, Other Other1, 5% Telecommunications, 2% 1% Average Investment Size: $17.7 million Manufacturing / Basic Healthcare, Education and Industries, 2% Child
Slide 9: Attractive Asset/Liability Profile
Attractive Asset/Liability Profile ($ in millions) Fixed vs. Floating Assets Fixed vs. Floating Debt Exposure Total Available Borrowing $950 Fixed 9% $220 $725 26% Floating 100% 91% 74% SBIC & Notes (Fixed) Credit Facilities (Floating) Drawn Undrawn Liability Maturity Regulatory Leverage Truist Cred
Slide 10: Benefits of SBIC Subsidiary
Benefits of SBIC Subsidiary Long-term funding – 10-year SBA non-recourse debentures – Does not use mark-to-market accounting Up to 2x leverage at SBIC subsidiary – Remaining $134 million long-term financing Attractive pricing: all-in ten-year fixed-rate of 3.1% on SBA financed vehicle Diversifies fu
Slide 11: Debt Summary
Debt Summary As of December 31, 2019 Debt Drawn Commitment Amount ($mm) Interest Rate Maturity Date ($mm) BNP Revolving Credit Facility $250 $204 4.6% 2/22/2024 Truist Revolving $475 $331 4.2% 9/4/2024 Credit Facility SBIC II $150 $134 3.1%1 3/1/26 - 3/1/281 2024 Notes $86 $86 5.5% 10/15/2024 Total
Slide 12: Selected Financial Highlights - PNNT
Selected Financial Highlights - PNNT December March June September ($mm, except per share data) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Investment Portfolio (at fair value) $1,245 $1,275 $1,219 $1,379 Debt (Regulatory) $520 $549 $538 $620 Debt (GAAP) $666 $695 $684 $743 Net Assets $592 $586 $582 $589 Ending
Slide 13: Strategy Targeted to Deliver Returns
Strategy Targeted to Deliver Returns Extensive and diverse sourcing network Focused on companies with strong free cash flow and de-leveraging capabilities Value oriented with a goal of capital preservation Privately negotiated middle market loans provide attractive risk/return Returns driven by inte
Slide 14: PNNT Selected Investments
PNNT Selected Investments Revolver Revolver Second Lien Secured Debt Revolver First Lien Secured Debt First Lien Secured Loan Equity First Lien Term Loan Equity Equity InTandem Capital Francisco Partners Staple Street Capital Yellow Wood Partners Revolver First Lien Secured Debt Second Lien Secured
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