Pennantpark Investment Corporation · NYSE:PNNT
Pennantpark Investment — Q2 2020 Earnings Presentation
14 slides from Pennantpark Investment's earnings presentation, May 12, 2020
Slide 1: PennantPark Investment Corporation Q2 2020 cover
03/31/2020 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 $3.7 billion total Assets Under Management Established Investment Platform • PennantPark Investment Advisers founded 13 years ago before the Global Financial Crisis – NASDAQ: “PNNT” – NASDAQ: “PFLT” • Deep expertise in middle market direct – IPO Date: April 2007 – IPO Dat
Slide 4: Established Credit Platform
Established Credit Platform Founded in 2007 Funded $11B in 542 companies Disciplined Investor Relationship & Solution Driven Consistent Performance & Conservative Portfolio Track Record Construction • Value oriented with • Team approach • Low volatility of • 87 companies in 30 different goal of capi
Slide 5: Second Quarter 2020 Highlights
Second Quarter 2020 Highlights Net Asset Value (NAV) as of Total originations during the quarter NetExperienced Asset Value March 31, 2020 was $7.71 per Originations were $107 million in eight new and shares as compared to $8.79 as of 24 existing companies while sales Team December 31, 2019 and repa
Slide 6: 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 7: Underwriting Philosophy & Process
Underwriting Philosophy & Process 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 p
Slide 8: PNNT Has a Compelling Track Record
PNNT Has a Compelling Track Record Portfolio growth has been measured and consistent with market opportunity $681 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 24
Slide 9: Overall Portfolio as of 3/31/20
Overall Portfolio as of 3/31/20 Highly Diversified Industry Mix1 Portfolio Overview 87 different companies Healthcare, Education Average investment size: $15.6 million Other, 20% 1 and Childcare, 16% Yield at Cost on Debt Portfolio: 9.1% 79% Secured Debt Energy and Utilities, 7% Transportation, 3% P
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 $134 million long-term financing Attractive pricing: all-in ten-year fixed-rate of 3.1% on SBA financed vehicle Diversifies fu
Slide 11: Diversified Funding Sources
Diversified Funding Sources As of 03/31/20 Commitment Amount ($mm) Interest Rate Maturity Date BNP Revolving Credit Facility $250 3.6% 2/22/24 Truist Revolving Credit Facility 475 3.2 9/4/24 SBIC II 134 3.11 3/1/26 - 3/1/281 2024 Notes 86 5.5 10/15/24 Total $945 5.1% 1. Across all SBIC II debentures
Slide 12: Selected Financial Highlights - PNNT
Selected Financial Highlights - PNNT June September December March ($mm, except per share data) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Investment Portfolio (at fair value) $1,275 $1,219 $1,379 $1,354 Debt (Regulatory) $549 $538 $620 $769 Debt (GAAP) $695 $684 $743 $847 GAAP Net Assets $586 $582 $589 $517 A
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 Revolver Second Lien Secured Debt Revolver F
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