Slide 1: October 2015 Investor Presentation
October 2015 Investor Presentation
Slide 2: Additional Information and Where to Find It
2 Additional Information and Where to Find It In connection with the approval of the proposed new investment advisory agreement with Benefit Street Partners L.L.C. (“BSP”), TICC Capital Corp. ("TICC", "TICC Capital", the "Company", "us", "we" or "our") has filed relevant materials with the SEC, incl
Slide 3: What a Yes vote on October 27th means for TICC shareholders
3 What a Yes vote on October 27th means for TICC shareholders: „Ï Best in class asset manager ¡V Benefit Street Partners (¡§BSP¡¨) to become TICC Capital¡¦s new investment advisor „Ï Permanent and meaningful decline in fees paid by TICC Capital „Ï No reduction to TICC¡¦s current distribution (1) and
Slide 4: TICC has delivered on its investment objectives
4 „X TICC has delivered on its investment objectives ¡V Strong relative performance ¡V Trades in-line with peers ¡V Consistent and attractive distributions „X Thorough review undertaken ¡V BSP investment advisory agreement reviewed and unanimously approved by the Board including each of the independ
Slide 5: TICC Capital's History
5 „X Completed IPO in November 2003 as Technology Investment Capital Corp. ¡V Newly formed Business Development Company (¡§BDC¡¨) ¡V Initially created to invest in the debt and/or equity securities of technology-related companies ¡V Raised $150 million „X TICC Capital today: ¡V $956 million portfoli
Slide 6: TICC Has Performed Favorably Relative to its BDC Peers
6 TICC Has Performed Favorably Relative to its BDC Peers 7-Year Total Return Comparison ¡V TICC Has Outperformed Average = 12% (%) Price / NAV Differential: TICC vs. Pre-2007 BDC IPO Peers (1) (20%) 0% 20% 40% 60% Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 May-13 Nov-13 May-14 Nov-14 May-15 „X TICC has trad
Slide 7: TICC Will Have One of the Lowest Expense Structures in BDC Sector
7 TICC Will Have One of the Lowest Expense Structures in BDC Sector „X The lower the expense ratio, the more net investment income available to pay distributions to shareholders „X TICC had a ratio of expenses to average net assets of 8.6% for the six months ended June 30, 2015, as compared to 9.6%
Slide 8: BSP Agreement: TICC Process & Considerations
BSP Agreement: TICC Process & Considerations
Slide 9: Board thoroughly reviewed BSP's proposal
9 „X In accordance with the Section 15 of the 1940 Act, TICC¡¦s Board thoroughly reviewed BSP¡¦s proposal in July and carefully evaluated the potential benefits to stockholders „X TICC¡¦s Board carefully evaluated the following information related to BSP¡¦s proposal: { BSP's expertise in credit orig
Slide 10: Special Committee review of NexPoint and TPG BDC proposals
10 „X When NexPoint submitted a competing proposal to become TICC Capital¡¦s investment advisor, TICC formed a Special Committee comprised solely of independent directors with no stake in TICC Management to review the NexPoint proposal „X The Special Committee also thoroughly reviewed the TPG BDC of
Slide 11: The Special Committee consists of the non-interested members of the TICC Board
11 The Special Committee consists of the 3 non-interested members of the TICC Board of Directors who are independent under the Investment Company Act of 1940 and have extensive experience in the securities investment industry Steven P. Novak, CFA ¡V Chairman „« 35 years of experience in securities i
Slide 12: BSP Agreement is the Right Outcome for TICC Shareholders
12 BSP Agreement is the Right Outcome for TICC Shareholders BSP is a World Class Manager TICC Fees Will Decrease Under the BSP Agreement Notes 1 Returns referenced are for BSP¡¦s three private debt flagship funds and do not account for returns of certain clients BSP has determined are not managed in
Slide 13: BSP Agreement is the Right Outcome for TICC Shareholders (Cont.)
13 BSP Agreement is the Right Outcome for TICC Shareholders (Cont.) Notes 1 Appropriate minimum tender offer price would be no less than the current average price to net asset value ratio for large-cap BDCs (which is approximately 90% today); source: Keefe, Bruyette & Woods Weekly BDC/RIC Market Ove
Slide 14: TICC's Agreement with BSP is Far Superior to TPG BDC's Self-Serving Proposal
TICC’s Agreement with BSP is Far Superior to TPG BDC’s Self-Serving Proposal
Slide 15: Clear Choice: TICC's Agreement with BSP is Far Superior
15 Clear Choice: TICC¡¦s Agreement with BSP is Far Superior to TPG BDC¡¦s Self-Serving Proposal TPG BDC¡¦s Proposal Would Enrich TPG, not TICC Shareholders „X Current TPG BDC shareholders would experience ~7% NAV accretion by acquiring TICC at a discount to NAV „X Proposal would generate ~7% of net
Slide 16: TPG BDC's Proposal Would Enrich TPG, not TICC Shareholders
16 TPG BDC¡¦s Proposal Would Enrich TPG, not TICC Shareholders „X TPG BDC¡¦s discounted NAV offer for TICC isn¡¦t motivated by wealth creation for TICC shareholders; rather their proposal is designed to create fees for their own investment advisor, TPG ¡V at the expense of TICC shareholders who woul
Slide 17: Current TPG BDC Shareholders Would Also Benefit at TICC Shareholders' Expense
17 Current TPG BDC Shareholders Would Also Benefit at TICC Shareholders¡¦ Expense Notes 1 As of 6/30/2015, per Company filings 2 Represents the pro forma TPG BDC metrics using an exchange ratio of 0.43x (TPG BDC stock price close on 9/15/2015); assumes transaction expenses of 2.5% of assets 3 Source
Slide 18: TPG BDC's Offer = Immediate & Permanent Dilution
18 TPG BDC¡¦s Offer = IMMEDIATE & PERMANENT Dilution „X TPG BDC¡¦s $7.50 per share offer is a 13% discount to TICC¡¦s most recently determined NAV (1) resulting in IMMEDIATE AND PERMANENT ~15% dilution to TICC shareholders¡¦ NAV (2) { As a BDC, TICC marks its entire portfolio to fair market value ev
Slide 19: TPG BDC's Offer and Value of its Consideration is Highly Uncertain
19 TPG BDC¡¦s Offer and Value of its Consideration is Highly Uncertain (x) Price / NAV Since TPG BDC IPO (3) (%) Source: SNL Financial Notes 1 Distribution rate defined as dividend relative to net asset value 2 Represents BDCs that went public before 1/1/2007; includes ACAS, AINV, ARCC, BKCC, CSWC,
Slide 20: TPG BDC Stock Has a Fraction of TICC's Trading Volume
20 TPG BDC Stock Has a Fraction of TICC¡¦s Trading Volume Source: SNL Financial Notes 1 Represents the effective float when taking the total shares outstanding less the amount of shares owned by directors, executive officers, and 5% or greater shareholders. Float is shown as a percentage of total sh
Slide 21: TICC's Distribution Rate Exceeds TPG BDC's
21 TICC¡¦s Distribution Rate Exceeds TPG BDC¡¦s (1) (%) Distribution-to-NAV Ratio for TICC & TPG BDC (Since TPG BDC IPO) (2) Source: SNL Financial Notes 1 Distribution rate defined as dividend relative to net asset value 2 Financial information as of 6/30/2015 „X TICC¡¦s Distribution-to-NAV ratio of
Slide 22: TPG BDC Proposal Results in Immediate and Significant Distribution Reduction
22 TPG BDC Proposal Results in Immediate and Significant Distribution Reduction „X TICC is currently paying a distribution consistent with what is required { By law, TICC must pay out 90% of taxable income to maintain favorable tax status { Claims TICC is over-paying its distribution are without mer
Slide 23: Appendix I – New Members of TICC's Board Following the BSP Transaction
Appendix I – New Members of TICC’s Board Following the BSP Transaction
Slide 24: Thomas Gahan and Mr. Byrne to lead the Company upon the Transaction
24 Upon the consummation of the Transaction, Mr. Gahan will be appointed as the Chairman of the Board of Directors and Mr. Byrne will be appointed as the President and Chief Executive Officer of the Company. Mr. Gahan will be an interested person of the Company as defined in the 1940 Act due to his
Slide 25: Board will be 75% independent following the BSP transaction
25 Upon consummation of the BSP transaction, the TICC Board of Directors will be 75% independent, with the addition of 4 well-qualified directors who are not interested persons under the Investment Company Act of 1940 Dennis Schaney „« Member of the Board of Directors of Griffin-Benefit Street Partn
Slide 26: New Members of TICC's Board of Directors (Cont.)
26 Ronald Kramer „« CEO and Vice Chairman of the Board of Directors of Griffon Corporation; past President and member of the Board of Directors of Wynn Resorts, Ltd „« Chairman of the Board of The Undergraduate Division of the Wharton School, University of Pennsylvania; member of the Board of Mt. Si
Slide 27: Appendix II – TICC Portfolio Overview
Appendix II – TICC Portfolio Overview
Slide 28: Investment Portfolio
28 Investment Portfolio „X $955.9 million portfolio (1) composed of 96 portfolio company and CLO investments „X Average investment by fair value represents 1.0% of total portfolio (1) „X Top 10 investments by fair value represent 20.2% of total portfolio (1) Investment Portfolio by Asset Type (1) In
Slide 29: Quality Portfolio: Weighted-Average Internal Credit Grade of 2.1
29 Quality Portfolio TICC’s Debt Portfolio Has a Weighted-Average Internal Credit Grade of 2.1 (1) Portfolio Grading Grade 1 Company is ahead of expectations and/or outperforming financial covenant requirements and such trend is expected to continue. Grade 2 Full repayment of principal and interest
Slide 30: Investments on Non-Accrual Status
30 Investments on Non-Accrual Status ($ in millions) Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Non-accrual investments at amortized cost $0.0 $0.0 $11.6 $11.6 $0.0 Non-accrual investments / total portfolio at amortized cost 0.0% 0.0% 1.1% 1.2% 0.0% Non-accrual investments at fair value $0.0 $0.0 $6.7 $6.7 $0.0