Slide 1: Medley Capital Corporation Investor Presentation
Medley Capital Corporation (NYSE: MCC) Investor Presentation Quarter Ended September 30, 2016
Slide 2: Important Notice
Important Notice This presentation contains “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks and uncertainties. Actual outcomes and results could differ materially from those suggested by this presentation du
Slide 3: Diversified AUM Across Multiple Funds
Diversified AUM Across Multiple Funds • Broad distribution through public and private vehicles • Permanent capital, long-dated funds and managed accounts not subject to traditional outflows MEDLEY (NYSE: MDLY) Public Vehicles Institutional Capital Medley Sierra Capital Long-Dated Funds and Income Co
Slide 4: Highly Diversified Senior Secured Floating Rate Portfolio
Highly Diversified Senior Secured Floating Rate Portfolio • MCC has a diversified portfolio of 58 companies with a 11.8% weighted average yield1 Industry Geography 2 1% 1% 1% 1% 2% 1% Services: Business 2% Banking, Finance, Insurance & Real Estate 14% Construction & Building 5% 3% Hotel, Gaming & Le
Slide 5: Portfolio by Issuer
Portfolio by Issuer Top 20 Investments: 58% Harrison Gypsum LLC 6% DHISCO Electronic Distribution, Inc. 4% Nation Safe Drivers Holdings, Inc. Omnivere LLC 4% Merchant Cash and Capital LLC 4% MCC Senior Loan Strategy JV I LLC 42% Accupac, Inc. 3% NCM Group Holdings LLC Nielsen & Bainbridge LLC 3% Seo
Slide 6: Well Positioned for a Rising Rate Environment
Well Positioned for a Rising Rate Environment • MCC is well positioned for a rising interest Assets rate environment 12/31/2011 9/30/2016 • 79% of the portfolio is floating rate • 64% of liabilities are fixed rate Floating Fixed • Favorable asset & liability mix 34% 21% The weighted average maturi
Slide 7: Debt Maturity Profile
Debt Maturity Profile • MCC’s liabilities are well diversified with a staggered debt maturity profile $250.0 $200.0 ING Term Loan $174.02 $150.0 USD in Millions $100.0 SBA Debenture Notes $5.04 SBA Debenture Notes 2023 $50.0 2021 $95.04 Notes ING Notes (MCV) SBA Revolver (MCX) $63.51 2019 Notes Debe
Slide 8: Comparable Headcount to AUM
Comparable Headcount to AUM • Medley has made a significant investment to build out the team to support origination and asset management Number of Investment Professionals Per $100M in AUM 1 3.0 2.8 2.4 2.5 2.4 2.0 1.5 1.0 1.0 1.0 0.8 0.7 0.6 0.5 0.0 MCC TCPC TCRD TSLX FSC ARCC PSEC Investment Profe
Slide 9: Attractive Industry Dynamics
Attractive Industry Dynamics
Slide 10: Middle Market Opportunity – Large Target Market
Middle Market Opportunity – Large Target Market • Standalone US middle market would rank as the 3rd largest global economy • Private equity dry powder continues to be elevated at all-time highs Top GDPs 1 $16.8 $9.2 $6.7 $4.9 $3.6 $2.7 $2.5 $2.2 United States China US Middle Market Japan Germany Fra
Slide 11: The Opportunity – Large Number of Borrowers
The Opportunity – Large Number of Borrowers Number of Businesses by Market 1 39,000 Revenue: 2,000 $500M - $1B Revenue: $50M - $500M Target Market: 37,000 2,600 Revenue: $1B+ Large Market Middle Market 1. U.S. Census Bureau, 2007 Economic Census. Page 11
Slide 12: Powerful Secular Trends in the Banking Landscape
Powerful Secular Trends in the Banking Landscape • Banks continue to shift toward large borrowers • Regulatory environment is a headwind for banks in the middle-market 11,000 80% 1 U.S. FDIC Insured Commercial Banks 70% 2 10,000 Bank Participation in Levered Loan Market (%) 60% 9,000 50% 8,000 40% 3
Slide 13: Regulatory Pressure Continues for Banks
Regulatory Pressure Continues for Banks Level 3 Assets for Financial Firms 1 Total Assets of Publicly Traded BDCs 2 $681 $250 $200 $150 Large Opportunity as Banks Continue to Exit Level 3 Assets $100 $182 $50 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 9/30/2016 Illustrative
Slide 14: MCC Financial Results
MCC Financial Results
Slide 15: Performance Overview
Performance Overview • Net asset value of $9.49 per share for the quarter ending 9/30/2016 • Net investment income of $0.23 per share for the quarter ending 9/30/2016 • Quarterly dividend of $0.22 per share for the quarter ending 9/30/2016 • 11.8% portfolio yield as of 9/30/20161 • Total debt/credit
Slide 16: Financial & Portfolio Highlights
Financial & Portfolio Highlights Financial Highlights 9/30/16 6/30/16 3/31/16 12/31/15 9/30/15 6/30/15 3/31/15 Net investment income per share $ 0.23 $ 0.20 $ 0.26 $ 0.28 $ 0.31 $ 0.30 $ 0.30 Net realized gains (losses) (0.29) (0.53) - 0.10 (0.74) (0.16) (0.16) Net unrealized gains (losses) (0.01) 0
Slide 17: Key Initiatives to Drive Shareholder Value at MCC
Key Initiatives to Drive Shareholder Value at MCC 1 $50M stock buyback program 2 Management company has purchased 1.7M shares of MCC stock YTD 3 Reduced fees and implemented netting with a three year look-back 4 Maintained investment grade ratings 5 Increased allocation to floating rate loans (curre
Slide 18: MCC Presents an Attractive Investment Opportunity
MCC Presents an Attractive Investment Opportunity • Attractive dividend yield with lower leverage levels vs. other yield oriented asset classes Price / NAV Dividend Yield 1 Leverage 2 MCC 0.81x 11.5% 0.69x BDCs 3 0.97x 9.7% 0.71x REITs 4 2.66x 3.2% 1.13x MLPs 5 2.48x 8.4% 1.55x Banks 6 1.20x 2.4% 7.
Slide 19: Select Financial & Portfolio Information
Select Financial & Portfolio Information As of and for the Three Months Ended (dollars in millions, except per share data) 9/30/16 6/30/16 3/31/16 12/31/15 9/30/15 Net investment income per share - basic & diluted $ 0.23 $ 0.20 $ 0.26 $ 0.28 $ 0.31 Net realized and unrealized gains per share - basic
Slide 20: Balance Sheet
Balance Sheet As of (dollars in thousands, except per share data) 9/30/16 6/30/16 3/31/16 12/31/15 9/30/15 ASSETS (Audited) (Unaudited) (Unaudited) (Unaudited) (Audited) Investments at fair value Non-control/non-affiliate investments $ 767,302 $ 920,130 $ 932,054 $ 1,012,559 $ 1,131,894 Control inve
Slide 21: Corporate Information
Corporate Information Board of Directors Corporate Officers Research Coverage Corporate Headquarters BROOK TAUBE BROOK TAUBE BARCLAYS 280 Park Avenue, 6th Floor Chairman & Chief Executive Officer Chairman & Chief Executive Officer Mark C. DeVries – (212)-526-9484 New York, NY 10017 (212)-759-0777 SE