UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 10, 2022, WhiteHorse Finance, Inc. (the “Company”) issued a press release announcing a quarterly distribution and its financial results for the quarter ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such Section. The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 5.07. Submission of Matters to a Vote of Security Holders
On August 4, 2022, the Company held its annual meeting of stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved two proposals. The issued and outstanding shares of stock of the Company entitled to vote at the Annual Meeting consisted of 23,243,088 shares of common stock outstanding on the record date, June 6, 2022. The final voting results from the Annual Meeting were as follows:
Proposal 1. To elect two Class I directors of the Company who will each serve until the 2025 annual meeting of stockholders or until his successor is duly elected and qualifies.
Name |
| Votes For |
| Votes Against |
| Abstentions |
| Broker Non-Votes |
Kevin F. Burke |
| 6,154,712 |
| 1,057,268 |
| 574,984 |
| 6,443,731 |
G. Stacy Smith |
| 6,146,378 |
| 1,065,395 |
| 575,191 |
| 6,443,731 |
Proposal 2. To ratify the selection of Crowe LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022.
Votes For |
| Votes Against |
| Abstentions |
13,737,299 |
| 93,735 |
| 399,661 |
Item 7.01. Regulation FD Disclosure.
A copy of an earnings presentation that is intended to be used by representatives of the Company is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such Section. The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 furnished herewith, shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this Current Report on Form 8-K may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 | Press Release of WhiteHorse Finance, Inc. dated August 10, 2022. | |||
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99.2 | ||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 10, 2022 | WHITEHORSE FINANCE, INC. | |
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| By: | /s/ Joyson C. Thomas |
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| Joyson C. Thomas |
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| Chief Financial Officer |
Exhibit 99.1
WhiteHorse Finance, Inc. Announces Second Quarter 2022 Earnings Results and Declares Quarterly Distribution of $0.355 Per Share
NEW YORK, August 10, 2022 /PRNewswire/ -- WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) (Nasdaq: WHF) today announced its financial results for the quarter ended June 30, 2022. In addition, the Company’s board of directors has declared a distribution of $0.355 per share with respect to the quarter ending September 30, 2022. The distribution will be payable on October 4, 2022 to stockholders of record as of September 20, 2022.
Second Quarter 2022 Summary Highlights
Stuart Aronson, WhiteHorse Finance’s Chief Executive Officer, commented, “Despite economic headwinds, our well-diversified portfolio continued to perform well this past quarter, and WhiteHorse ended the quarter with no investments on non-accrual status. We believe, given the modest leverage levels that we underwrite our loans to, that the majority of our portfolio companies will be able to service our debt in a rising interest rate environment. Additionally, as a result of elevated repayment activity during the quarter, we remain comfortably below our leverage targets and have capacity to redeploy capital to higher yielding assets. While our pipeline for future deal flow is at record levels, due in part to our differentiated three-tiered sourcing approach and relationship with the leading H.I.G. platform, we have a cautious approach and are selectively taking advantage of market conditions. Our investment portfolio is also well-positioned to benefit from a rising interest rate environment as nearly 100% of our debt portfolio is comprised of floating rate debt investments. Combined with the reset of three-month LIBOR and SOFR contracts and the full impact of our increased ownership in the Ohio STRS JV, we expect to achieve earnings accretion in the coming quarters.”
Portfolio and Investment Activity
As of June 30, 2022, the fair value of WhiteHorse Finance’s investment portfolio was $766.5 million, compared with $800.4 million as of March 31, 2022. The portfolio as of June 30, 2022 consisted of 105 positions across 68 companies with a weighted average effective yield of 9.9% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV (as defined below)) was $7.9 million with the overall portfolio comprised of approximately 80.3% first lien secured loans, 2.9% second lien secured loans, 3.5% equity and 13.3% in investments in STRS JV. Almost all loans were variable rate investments (primarily indexed to the London Interbank Offered Rate or Secured Overnight Financing Rate) with fixed rate securities representing only 0.4% of loans at fair value. Nearly all performing floating rate investments have interest rate floors.
During the three months ended June 30, 2022, WhiteHorse Finance made investments in four new portfolio companies for a total of $28.9 million, added a total of $19.2 million to existing portfolio companies, and made net fundings of $1.4 million to revolver loans. Proceeds from sales and repayments totaled approximately $66.1 million for the three months ended June 30, 2022, driven by five full realizations in IvyRehab Intermediate II, LLC, What If Holdings, LLC, RLJ Pro-Vac, Inc., Tensar Corporation and Education Networks of America, Inc.
In addition to the transactions discussed above, during the three months ended June 30, 2022, WhiteHorse Finance transferred assets comprised of one new portfolio company and one add-on investment, totaling $17.8 million to STRS JV in exchange for cash proceeds.
WHF STRS Ohio Senior Loan Fund LLC
As of June 30, 2022, STRS JV’s portfolio totaled $318.8 million, consisted of 32 portfolio companies and had a weighted average effective yield of 8.7% on its portfolio.
Results of Operations
For the three months ended June 30, 2022, the Company’s net investment income was approximately $7.9 million, compared with approximately $6.1 million for the same period in the prior year, representing an increase of approximately 29.5%. The increase in net investment income for the year-over-year period was primarily attributable to higher investment income from interest income and STRS JV due to larger portfolio sizes in both the Company and STRS JV and higher accretion income due to more repayment activities. This was partially offset by higher interest expense incurred due to higher leverage balances and higher interest rates. For the three months ended June 30, 2022, the Company’s investment in STRS JV generated an annualized, gross investment yield of approximately 12.1%.
For the three months ended June 30, 2022, core net investment income(3) was $7.8 million, or $0.334 per share, compared with $7.0 million, or $0.338 per share for the same period in the prior year.
For the three months ended June 30, 2022, WhiteHorse Finance reported a net realized and unrealized loss on investments and foreign currency transactions of $0.5 million. This compares with a net realized and unrealized gain on investments and foreign currency transactions of $4.4 million for the three months ended June 30, 2021. The decrease for the year-over-year period was primarily attributable to markdowns on the portfolio in the current quarter, partially offset by a $1.7 million realized gain from the recovery proceeds received from the RCS Class B Units investment.
WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $7.3 million for the three months ended June 30, 2022, which compares with a net increase of $10.5 million the three months ended June 30, 2021.
WhiteHorse Finance’s net asset value was $347.4 million, or $14.95 per share, as of June 30, 2022, compared with $347.9 million, or $14.99 per share, as of Mach 31, 2022.
Liquidity and Capital Resources
As of June 30, 2022, WhiteHorse Finance had cash and cash equivalents of $18.6 million, compared with $21.3 million as of Mach 31, 2022, inclusive of restricted cash. As of June 30, 2022, the Company also had $96.3 million of undrawn capacity under its revolving credit facility.
Distributions
The Company's Board of Directors has declared a distribution of $0.355 per share with respect to the quarter ending September 30, 2022. The distribution will be payable on October 4, 2022 to stockholders of record as of September 20, 2022.
On May 10, 2022, the Company declared a distribution of $0.355 per share for the quarter ended June 30, 2022, consistent with distributions declared for the thirty-ninth consecutive quarter since the Company’s initial public offering. The distribution was paid on July 5, 2022 to stockholders of record as of June 20, 2022.
Distributions are paid from taxable earnings and may include return of capital and/or capital gains. The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company’s periodic reports filed with the Securities and Exchange Commission.
Conference Call
WhiteHorse Finance will host a conference call to discuss its second quarter results for the period ended June 30, 2022 at 1:00 p.m. ET on Wednesday, August 10, 2022. To access the teleconference, please dial 800-459-5346 (domestic and international) approximately 10 minutes before the teleconference’s scheduled start time and reference Conference ID #WHFQ222. Investors may also access the call on the investor relations portion of the Company’s website at www.whitehorsefinance.com.
If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call’s completion through August 17, 2022. The teleconference replay can be accessed by dialing 800-839-6911 (domestic and international). A webcast replay will also be available on the investor relations portion of the Company’s website at www.whitehorsefinance.com.
About WhiteHorse Finance, Inc.
WhiteHorse Finance is a business development company that originates and invests in loans to privately held, lower middle market companies across a broad range of industries. The Company’s investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, LLC, (“H.I.G. Capital”). H.I.G. Capital is a leading global alternative asset manager with $50 billion of capital under management(4) across a number of funds focused on the small and mid-cap markets. For more information
about H.I.G. Capital, please visit http://www.higcapital.com. For more information about the Company, please visit http://www.whitehorsefinance.com.
Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
(1) Includes investments in WHF STRS Ohio Senior Loan Fund LLC (“STRS JV”), an unconsolidated joint venture, totaling $102.3 million, at fair value.
(2) Excludes investments made in STRS JV.
(3) “Core net investment income” is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company’s financial performance excluding (i) the net impact of costs associated with the refinancing of the Company’s indebtedness, (ii) the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and (iii) excise and other income taxes related to such net realized gains and losses (net of incentive fees). The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, are set forth in Schedule 1 hereto.
(4) Based on total capital commitments managed by H.I.G. Capital and affiliates.
SCHEDULE 1
As a supplement to GAAP financial measures, the Company has provided information relating to core net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income determined in accordance with GAAP. The Company’s non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment income adjusted to exclude the net impact of costs associated with the refinancing of the Company’s indebtedness, the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and excise or other income taxes related to such net realized gains and losses (net of incentive fees). There were no excise or other income taxes related to net realized gains and losses nor did the Company
incur any costs with refinancing any of its indebtedness for the quarters ended June 30, 2022 and June 30, 2021.
The following table provides a reconciliation of net investment income to core net investment income for the three months ended June 30, 2022 and June 30, 2021 (in thousands, except per share data):
| | June 30, 2022 | | | June 30, 2021 | | ||||||||||
| | Amount | | | Per Share | | | Amount | | | Per Share | | ||||
| | | | | | Amounts | | | | | | | Amounts | | ||
Net investment income | | $ | 7,875 | | | $ | 0.339 | | | $ | 6,100 | | | $ | 0.296 | |
Net impact of costs associated with refinancing of indebtedness | | | - | | | | - | | | | - | | | | - | |
Accrual for capital gains incentive fee | | | (106) | | | | (0.005) | | | | 882 | | | | 0.042 | |
Net impact of excise tax expense related to net realized gains and losses | | | - | | | | - | | | | - | | | | - | |
Core net investment income | | $ | 7,769 | | | $ | 0.334 | | | $ | 6,982 | | | $ | 0.338 | |
WhiteHorse Finance, Inc.
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share data)
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| | June 30, 2022 |
| | December 31, 2021 |
| | | (Unaudited) | | | |
Assets |
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Investments, at fair value |
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Non-controlled/non-affiliate company investments | | $ | 651,983 | | $ | 736,727 |
Non-controlled affiliate company investments | | | 12,217 | | | 6,874 |
Controlled affiliate company investments | | | 102,279 | | | 75,607 |
Total investments, at fair value (amortized cost $767,809 and $831,960, respectively) | | | 766,479 | | | 819,208 |
Cash and cash equivalents | | | 9,231 | | | 12,185 |
Restricted cash and cash equivalents | | | 8,769 | | | 9,814 |
Restricted foreign currency (cost of $603 and $464, respectively) | | | 596 | | | 469 |
Interest and dividend receivable | | | 6,287 | | | 7,521 |
Amounts receivable on unsettled investment transactions | | | 6,271 | | | — |
Escrow receivable | | | 1,071 | | | 515 |
Prepaid expenses and other receivables | | | 905 | | | 1,307 |
Total assets | | $ | 799,609 | | $ | 851,019 |
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Liabilities | | |
| | | |
Debt | | $ | 423,235 | | $ | 475,958 |
Distributions payable | | | 8,251 | | | 8,222 |
Management fees payable | | | 3,908 | | | 3,766 |
Incentive fees payable | | | 5,176 | | | 7,958 |
Amounts payable on unsettled investment transactions | | | 7,496 | | | — |
Interest payable | | | 2,117 | | | 2,087 |
Accounts payable and accrued expenses | | | 1,476 | | | 2,438 |
Advances received from unfunded credit facilities | | | 525 | | | 839 |
Total liabilities | | | 452,184 | | | 501,268 |
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Commitments and contingencies | | |
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Net assets | | |
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Common stock, 23,243,088 and 23,162,667 shares issued and outstanding, par value $0.001 per share, respectively, and 100,000,000 shares authorized | | | 23 | | | 23 |
Paid-in capital in excess of par | | | 340,264 | | | 339,161 |
Accumulated earnings | | | 7,138 | | | 10,567 |
Total net assets | | | 347,425 | | | 349,751 |
Total liabilities and total net assets | | $ | 799,609 | | $ | 851,019 |
Number of shares outstanding | | | 23,243,088 | | | 23,162,667 |
Net asset value per share | | $ | 14.95 | | $ | 15.10 |
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WhiteHorse Finance, Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
| | | Three months ended June 30, | | | Six months ended June 30, | | ||||||
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| | 2022 | | | 2021 |
| | 2022 | | | 2021 |
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Investment income | | | | | | | | | | | | | |
From non-controlled/non-affiliate company investments |
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Interest income | | $ | 16,028 | | $ | 14,148 | | $ | 32,769 | | $ | 28,960 | |
Fee income | | | 679 | | | 350 | | | 1,141 | | | 1,121 | |
Dividend income | | | 79 | | | 65 | | | 168 | | | 109 | |
From non-controlled affiliate company investments | | | | | | | | | | | | | |
Interest income | | | 73 | | | — | | | 133 | | | — | |
Dividend income | | | 109 | | | 717 | | | 240 | | | 967 | |
From controlled affiliate company investments | | | | | | | | | | | | | |
Interest income | | | 1,459 | | | 738 | | | 2,586 | | | 1,457 | |
Dividend income | | | 1,573 | | | 1,325 | | | 2,997 | | | 2,699 | |
Total investment income | | | 20,000 | | | 17,343 | | | 40,034 | | | 35,313 | |
Expenses | | |
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Interest expense | | | 4,945 | | | 3,811 | | | 9,719 | | | 7,613 | |
Base management fees | | | 3,908 | | | 3,357 | | | 7,859 | | | 6,701 | |
Performance-based incentive fees | | | 1,837 | | | 2,628 | | | 3,264 | | | 4,670 | |
Administrative service fees | | | 170 | | | 170 | | | 341 | | | 341 | |
General and administrative expenses | | | 1,088 | | | 875 | | | 2,036 | | | 1,696 | |
Total expenses | | | 11,948 | | | 10,841 | | | 23,219 | | | 21,021 | |
Net investment income before excise tax | | | 8,052 | | | 6,502 | | | 16,815 | | | 14,292 | |
Excise tax | | | 175 | | | 402 | | | 399 | | | 592 | |
Net investment income after excise tax | | | 7,877 | | | 6,100 | | | 16,416 | | | 13,700 | |
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Realized and unrealized gains (losses) on investments and foreign currency transactions | | |
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Net realized gains (losses) | | |
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Non-controlled/non-affiliate company investments | | | 686 | | | (555) | | | (17,498) | | | 7,605 | |
Non-controlled affiliate company investments | | | 1,725 | | | — | | | 1,725 | | | — | |
Foreign currency transactions | | | (61) | | | (4) | | | (342) | | | (3) | |
Foreign currency forward contracts | | | (8) | | | (4) | | | (8) | | | (4) | |
Net realized gains (losses) | | | 2,342 | | | (563) | | | (16,123) | | | 7,598 | |
Net change in unrealized appreciation (depreciation) | | |
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Non-controlled/non-affiliate company investments | | | (4,546) | | | 4,407 | | | 12,570 | | | (2,568) | |
Non-controlled affiliate company investments | | | (586) | | | 755 | | | (2,206) | | | 321 | |
Controlled affiliate company investments | | | 1,502 | | | (149) | | | 1,672 | | | (269) | |
Translation of assets and liabilities in foreign currencies | | | 756 | | | (40) | | | 727 | | | (102) | |
Foreign currency forward contracts | | | 4 | | | 1 | | | — | | | — | |
Net change in unrealized appreciation (depreciation) | | | (2,870) | | | 4,974 | | | 12,763 | | | (2,618) | |
Net realized and unrealized gains (losses) on investments and foreign currency transactions | | | (528) | | | 4,411 | | | (3,360) | | | 4,980 | |
Net increase in net assets resulting from operations | | $ | 7,349 | | $ | 10,511 | | $ | 13,056 | | $ | 18,680 | |
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Per Common Share Data | | | | | | | | | | | | | |
Basic and diluted earnings per common share | | $ | 0.32 | | $ | 0.51 | | $ | 0.56 | | $ | 0.91 | |
Dividends and distributions declared per common share | | $ | 0.36 | | $ | 0.36 | | $ | 0.71 | | $ | 0.71 | |
Basic and diluted weighted average common shares outstanding | | | 23,240,651 | | | 20,626,340 | | | 23,215,792 | | | 20,589,159 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
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North America | | | | | | | | | | | | | | | | | | | | | | | |
Debt Investments | | | | | | | | | | | | | | | | | | | | | | | |
Air Freight & Logistics | | | | | | | | | | | | | | | | | | | | | | | |
Access USA Shipping, LLC (d/b/a MyUS.com) | | First Lien Secured Term Loan | | 1.50% | | L+ 8.00% | | 9.67% | | 02/08/19 | | 02/08/24 | | 4,791 | | $ | 4,768 | | $ | 4,791 | | 1.38 | % |
Motivational Marketing, LLC (d/b/a Motivational Fulfillment) | | First Lien Secured Term Loan | | 1.00% | | L+ 6.25% | | 7.50% | | 07/12/21 | | 07/12/26 | | 11,135 | | | 10,956 | | | 10,914 | | 3.14 | |
Motivational Marketing, LLC (d/b/a Motivational Fulfillment)(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 6.25% | | 7.50% | | 07/12/21 | | 07/12/26 | | — | | | — | | | (4) | | — | |
| | | | | | | | | | | | | | | | | 15,724 | | | 15,701 | | 4.52 | |
Application Software | | | | | | | | | | | | | | | | | | | | | | | |
Atlas Purchaser, Inc. (d/b/a Aspect Software) | | Second Lien Secured Term Loan | | 0.75% | | L+ 9.00% | | 11.19% | | 05/03/21 | | 05/07/29 | | 15,000 | | | 14,614 | | | 13,890 | | 3.99 | |
Naviga Inc. (f/k/a Newscycle Solutions, Inc.) | | First Lien Secured Term Loan | | 1.00% | | L+ 7.00% | | 9.25% | | 06/14/19 | | 12/29/22 | | 3,197 | | | 3,188 | | | 3,197 | | 0.92 | |
Naviga Inc. (f/k/a Newscycle Solutions, Inc.)(7)(12) | | First Lien Secured Revolving Loan | | 1.00% | | Base rate+ 6.38% | | 10.41% | | 06/14/19 | | 12/29/22 | | 183 | | | 183 | | | 183 | | 0.05 | |
| | | | | | | | | | | | | | | | | 17,985 | | | 17,270 | | 4.96 | |
Asset Management & Custody Banks | | | | | | | | | | | | | | | | | | | | | | | |
JZ Capital Partners Ltd.(4)(5) | | First Lien Secured Term Loan | | 1.00% | | L+ 7.00% | | 8.21% | | 01/26/22 | | 01/26/27 | | 10,286 | | | 10,098 | | | 10,196 | | 2.93 | |
JZ Capital Partners Ltd.(4)(5)(7) | | First Lien Secured Delayed Draw Loan | | 1.00% | | L+ 7.00% | | 8.21% | | 01/26/22 | | 01/26/27 | | — | | | — | | | 55 | | 0.02 | |
| | | | | | | | | | | | | | | | | 10,098 | | | 10,251 | | 2.95 | |
Automotive Retail | | | | | | | | | | | | | | | | | | | | | | | |
Team Car Care Holdings, LLC (Heartland Auto)(12) | | First Lien Secured Term Loan | | 1.00% | | Base rate+ 7.98% | | 9.04% | | 02/16/18 | | 06/28/24 | | 14,825 | | | 14,753 | | | 14,791 | | 4.26 | |
| | | | | | | | | | | | | | | | | 14,753 | | | 14,791 | | 4.26 | |
Broadcasting | | | | | | | | | | | | | | | | | | | | | | | |
Coastal Television Broadcasting Group LLC | | First Lien Secured Term Loan | | 1.00% | | SF+ 6.50% | | 8.02% | | 12/30/21 | | 12/30/26 | | 8,191 | | | 8,044 | | | 8,041 | | 2.31 | |
Coastal Television Broadcasting Group LLC(7) | | First Lien Secured Revolving Loan | | 1.00% | | SF+ 6.50% | | 8.02% | | 12/30/21 | | 12/30/26 | | — | | | — | | | — | | — | |
| | | | | | | | | | | | | | | | | 8,044 | | | 8,041 | | 2.31 | |
Building Products | | | | | | | | | | | | | | | | | | | | | | | |
PFB Holdco, Inc. (d/b/a PFB Corporation)(13) | | First Lien Secured Term Loan | | 1.00% | | C+ 6.50% | | 7.73% | | 12/17/21 | | 12/17/26 | | 8,982 | | | 6,900 | | | 6,903 | | 1.98 | |
PFB Holdco, Inc. (d/b/a PFB Corporation)(7)(13) | | First Lien Secured Revolving Loan | | 1.00% | | C+ 6.50% | | 7.73% | | 12/17/21 | | 12/17/26 | | — | | | — | | | 7 | | — | |
PFB Holdco, Inc. (d/b/a PFB Corporation) | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 7.50% | | 12/17/21 | | 12/17/26 | | 2,187 | | | 2,148 | | | 2,155 | | 0.62 | |
PFB Holdco, Inc. (d/b/a PFB Corporation)(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 6.50% | | 7.50% | | 12/17/21 | | 12/17/26 | | — | | | — | | | 1 | | — | |
Trimlite Buyer LLC (d/b/a Trimlite LLC)(5)(13) | | First Lien Secured Term Loan | | 1.00% | | C+ 6.50% | | 9.18% | | 07/27/21 | | 07/27/26 | | 22,688 | | | 17,784 | | | 17,345 | | 4.99 | |
| | | | | | | | | | | | | | | | | 26,832 | | | 26,411 | | 7.59 | |
Cable & Satellite | | | | | | | | | | | | | | | | | | | | | | | |
Bulk Midco, LLC(15)(24) | | First Lien Secured Term Loan | | 1.00% | | L+ 7.17% | | 8.67% | | 06/08/18 | | 06/08/23 | | 14,922 | | | 14,880 | | | 14,326 | | 4.12 | |
| | | | | | | | | | | | | | | | | 14,880 | | | 14,326 | | 4.12 | |
Commodity Chemicals | | | | | | | | | | | | | | | | | | | | | | | |
Flexitallic Group SAS | | First Lien Secured Term Loan | | 1.00% | | L+ 7.50% | | 9.75% (9.25% Cash + 0.50% PIK) | | 10/28/19 | | 10/29/26 | | 15,682 | | | 15,078 | | | 15,333 | | 4.41 | |
| | | | | | | | | | | | | | | | | 15,078 | | | 15,333 | | 4.41 | |
Construction Materials | | | | | | | | | | | | | | | | | | | | | | | |
Claridge Products and Equipment, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 8.75% | | 12/30/20 | | 12/29/25 | | 7,601 | | | 7,495 | | | 7,508 | | 2.15 | |
Claridge Products and Equipment, LLC(7)(12) | | First Lien Secured Revolving Loan | | 1.00% | | Base rate+ 5.93% | | 9.06% | | 12/30/20 | | 12/29/25 | | 891 | | | 882 | | | 872 | | 0.25 | |
| | | | | | | | | | | | | | | | | 8,377 | | | 8,380 | | 2.40 | |
Consumer Finance | | | | | | | | | | | | | | | | | | | | | | | |
Maxitransfers Blocker Corp. | | First Lien Secured Term Loan | | 1.00% | | L+ 8.50% | | 10.75% | | 10/07/20 | | 10/07/25 | | 8,367 | | | 8,237 | | | 8,367 | | 2.41 | |
Maxitransfers Blocker Corp.(4)(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 8.50% | | 10.75% | | 10/07/20 | | 10/07/25 | | — | | | — | | | 16 | | — | |
| | | | | | | | | | | | | | | | | 8,237 | | | 8,383 | | 2.41 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Data Processing & Outsourced Services | | | | | | | | | | | | | | | | | | | | | | | |
Escalon Services Inc. | | First Lien Secured Term Loan | | 1.00% | | L+ 10.31% | | 11.72% (10.22% Cash + 1.50% PIK) | | 12/04/20 | | 12/04/25 | | 17,247 | | | 16,514 | | | 17,592 | | 5.06 | % |
Future Payment Technologies, L.P. | | First Lien Secured Term Loan | | 1.00% | | L+ 8.25% | | 9.31% | | 12/23/16 | | 06/07/24 | | 23,533 | | | 23,371 | | | 23,533 | | 6.77 | |
| | | | | | | | | | | | | | | | | 39,885 | | | 41,125 | | 11.83 | |
Department Stores | | | | | | | | | | | | | | | | | | | | | | | |
Mills Fleet Farm Group, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 6.25% | | 7.92% | | 10/24/18 | | 10/24/24 | | 13,172 | | $ | 12,992 | | $ | 13,172 | | 3.79 | |
| | | | | | | | | | | | | | | | | 12,992 | | | 13,172 | | 3.79 | |
Distributors | | | | | | | | | | | | | | | | | | | | | | | |
Crown Brands LLC | | First Lien Secured Term Loan | | 1.00% | | SF+ 8.00% | | 9.05% | | 04/22/22 | | 12/09/25 | | 357 | | | 357 | | | 357 | | 0.10 | |
Crown Brands LLC(19) | | Second Lien Secured Term Loan | | 1.50% | | L+ 10.50% | | 12.17% | | 12/15/20 | | 01/08/26 | | 4,384 | | | 4,312 | | | 2,850 | | 0.82 | |
Crown Brands LLC(19) | | Second Lien Secured Delayed Draw Loan | | 1.50% | | L+ 10.50% | | 12.19% | | 12/15/20 | | 01/08/26 | | 651 | | | 651 | | | 423 | | 0.12 | |
| | | | | | | | | | | | | | | | | 5,320 | | | 3,630 | | 1.04 | |
Diversified Chemicals | | | | | | | | | | | | | | | | | | | | | | | |
Manchester Acquisition Sub LLC (d/b/a Draslovka Holding AS) | | First Lien Secured Term Loan | | 0.75% | | SF+ 5.75% | | 7.30% | | 11/16/21 | | 11/16/26 | | 7,960 | | | 7,572 | | | 7,571 | | 2.18 | |
Sklar Holdings, Inc. (d/b/a Starco) | | First Lien Secured Term Loan | | 1.00% | | L+ 9.75% | | 10.75% (8.75% Cash + 2.00% PIK) | | 11/13/19 | | 05/13/23 | | 7,371 | | | 7,299 | | | 7,003 | | 2.02 | |
| | | | | | | | | | | | | | | | | 14,871 | | | 14,574 | | 4.20 | |
Diversified Support Services | | | | | | | | | | | | | | | | | | | | | | | |
NNA Services, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 6.75% | | 9.00% | | 08/27/21 | | 08/27/26 | | 11,448 | | | 11,329 | | | 11,357 | | 3.27 | |
| | | | | | | | | | | | | | | | | 11,329 | | | 11,357 | | 3.27 | |
Education Services | | | | | | | | | | | | | | | | | | | | | | | |
EducationDynamics, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 7.00% | | 8.60% (8.10% Cash + 0.50% PIK) | | 09/15/21 | | 09/15/26 | | 13,186 | | | 12,964 | | | 13,169 | | 3.78 | |
EducationDynamics, LLC(4)(7) | | First Lien Secured Delayed Draw Loan | | 1.00% | | L+ 7.00% | | 8.60% (8.10% Cash + 0.50% PIK) | | 09/15/21 | | 09/15/26 | | — | | | — | | | 27 | | 0.01 | |
EducationDynamics, LLC(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 7.00% | | 8.60% (8.10% Cash + 0.50% PIK) | | 09/15/21 | | 09/15/26 | | — | | | — | | | 19 | | 0.01 | |
EducationDynamics, LLC(4) | | Subordinated Unsecured Term Loan | | N/A | | 4.00% | | 4.00% | | 09/15/21 | | 03/15/27 | | 167 | | | 167 | | | 167 | | 0.05 | |
| | | | | | | | | | | | | | | | | 13,131 | | | 13,382 | | 3.85 | |
Electric Utilities | | | | | | | | | | | | | | | | | | | | | | | |
CleanChoice Energy, Inc. (d/b/a CleanChoice) | | First Lien Secured Term Loan | | 1.00% | | L+ 7.25% | | 8.29% | | 10/12/21 | | 10/12/26 | | 10,500 | | | 10,320 | | | 10,352 | | 2.98 | |
| | | | | | | | | | | | | | | | | 10,320 | | | 10,352 | | 2.98 | |
Environmental & Facilities Services | | | | | | | | | | | | | | | | | | | | | | | |
Industrial Specialty Services USA LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 6.25% | | 8.50% | | 12/31/21 | | 12/31/26 | | 11,947 | | | 11,732 | | | 11,595 | | 3.34 | |
Industrial Specialty Services USA LLC(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 6.25% | | 7.71% | | 12/31/21 | | 12/31/26 | | 1,016 | | | 998 | | | 984 | | 0.28 | |
| | | | | | | | | | | | | | | | | 12,730 | | | 12,579 | | 3.62 | |
Health Care Facilities | | | | | | | | | | | | | | | | | | | | | | | |
Bridgepoint Healthcare, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 7.75% | | 8.94% | | 10/05/21 | | 10/05/26 | | 10,701 | | | 10,518 | | | 10,508 | | 3.02 | |
Bridgepoint Healthcare, LLC(7) | | First Lien Secured Delayed Draw Loan | | 1.00% | | L+ 7.75% | | 8.94% | | 10/05/21 | | 10/05/26 | | — | | | — | | | (8) | | — | |
Bridgepoint Healthcare, LLC(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 7.75% | | 8.94% | | 10/05/21 | | 10/05/26 | | — | | | — | | | (2) | | — | |
| | | | | | | | | | | | | | | | | 10,518 | | | 10,498 | | 3.02 | |
Health Care Services | | | | | | | | | | | | | | | | | | | | | | | |
CHS Therapy, LLC | | First Lien Secured Term Loan A | | 1.50% | | L+ 9.00% | | 11.25% (10.75% Cash + 0.50% PIK) | | 06/14/19 | | 06/14/24 | | 7,164 | | $ | 7,111 | | $ | 7,164 | | 2.06 | |
CHS Therapy, LLC | | First Lien Secured Term Loan C | | 1.50% | | L+ 9.00% | | 11.25% (10.75% Cash + 0.50% PIK) | | 10/07/20 | | 06/14/24 | | 881 | | | 872 | | | 881 | | 0.25 | |
Lab Logistics, LLC | | First Lien Secured Term Loan | | 1.00% | | SF+ 7.25% | | 8.63% | | 10/16/19 | | 09/25/23 | | 5,515 | | | 5,445 | | | 5,450 | | 1.57 | |
Lab Logistics, LLC | | First Lien Secured Delayed Draw Loan | | 1.00% | | L+ 7.25% | | 8.25% | | 10/16/19 | | 09/25/23 | | 5,157 | | | 5,145 | | | 5,157 | | 1.48 | |
PG Dental New Jersey Parent, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 9.75% | | 11.07% (9.57% Cash + 1.50% PIK) | | 11/25/20 | | 11/25/25 | | 14,787 | | | 14,565 | | | 13,548 | | 3.90 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
PG Dental New Jersey Parent, LLC(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 9.75% | | 11.07% (9.57% Cash + 1.50% PIK) | | 11/25/20 | | 11/25/25 | | 352 | | | 346 | | | 298 | | 0.09 | % |
| | | | | | | | | | | | | | | | | 33,484 | | | 32,498 | | 9.35 | |
Health Care Supplies | | | | | | | | | | | | | | | | | | | | | | | |
ABB/Con-cise Optical Group LLC (d/b/a ABB Optical Group, LLC) | | First Lien Secured Term Loan | | 0.75% | | L+ 7.50% | | 8.26% | | 02/23/22 | | 02/23/28 | | 21,682 | | | 21,171 | | | 21,096 | | 6.07 | |
ABB/Con-cise Optical Group LLC (d/b/a ABB Optical Group, LLC)(7)(12) | | First Lien Secured Revolving Loan | | 0.75% | | Base rate+ 6.51% | | 11.22% | | 02/23/22 | | 02/23/28 | | 1,970 | | | 1,923 | | | 1,916 | | 0.55 | |
| | | | | | | | | | | | | | | | | 23,094 | | | 23,012 | | 6.62 | |
Heavy Electrical Equipment | | | | | | | | | | | | | | | | | | | | | | | |
PPS CR Acquisition, Inc. (d/b/a Power Plant Services) | | First Lien Secured Term Loan | | 1.00% | | L+ 6.25% | | 8.50% | | 06/25/21 | | 06/25/26 | | 11,067 | | | 10,891 | | | 10,953 | | 3.15 | |
PPS CR Acquisition, Inc. (d/b/a Power Plant Services)(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 6.25% | | 8.50% | | 06/25/21 | | 06/25/24 | | 104 | | | 103 | | | 112 | | 0.03 | |
| | | | | | | | | | | | | | | | | 10,994 | | | 11,065 | | 3.18 | |
Home Furnishings | | | | | | | | | | | | | | | | | | | | | | | |
Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC) | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 7.51% | | 10/12/21 | | 10/12/26 | | 19,934 | | | 19,592 | | | 19,655 | | 5.66 | |
Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC)(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 6.50% | | 7.51% | | 10/12/21 | | 10/12/26 | | — | | | — | | | 8 | | — | |
Sure Fit Home Products, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 9.75% | | 12.01% | | 04/12/21 | | 07/13/23 | | 4,807 | | | 4,751 | | | 4,086 | | 1.18 | |
| | | | | | | | | | | | | | | | | 24,343 | | | 23,749 | | 6.84 | |
Household Appliances | | | | | | | | | | | | | | | | | | | | | | | |
Token Buyer, Inc. (d/b/a Therm-O-Disc, Inc.) | | First Lien Secured Term Loan | | 0.50% | | SF+ 6.00% | | 7.63% | | 05/26/22 | | 05/31/29 | | 6,180 | | | 5,691 | | | 5,686 | | 1.64 | |
| | | | | | | | | | | | | | | | | 5,691 | | | 5,686 | | 1.64 | |
Household Products | | | | | | | | | | | | | | | | | | | | | | | |
The Kyjen Company, LLC (d/b/a Outward Hound) | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 7.99% | | 04/05/21 | | 04/05/26 | | 11,345 | | | 11,217 | | | 11,062 | | 3.18 | |
The Kyjen Company, LLC (d/b/a Outward Hound)(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 6.50% | | 7.95% | | 04/05/21 | | 04/05/26 | | 704 | | | 696 | | | 683 | | 0.20 | |
| | | | | | | | | | | | | | | | | 11,913 | | | 11,745 | | 3.38 | |
Industrial Machinery | | | | | | | | | | | | | | | | | | | | | | | |
Project Castle, Inc. (d/b/a Material Handling Systems, Inc.) | | First Lien Secured Term Loan | | 0.50% | | L+ 5.50% | | 6.90% | | 06/09/22 | | 06/01/29 | | 8,376 | | | 7,496 | | | 7,559 | | 2.18 | |
| | | | | | | | | | | | | | | | | 7,496 | | | 7,559 | | 2.18 | |
Interactive Media & Services | | | | | | | | | | | | | | | | | | | | | | | |
MSI Information Services, Inc. | | First Lien Secured Term Loan | | 1.00% | | SF+ 7.75% | | 9.38% | | 04/25/22 | | 04/24/26 | | 7,950 | | | 7,798 | | | 7,791 | | 2.24 | |
MSI Information Services, Inc.(7)(12) | | First Lien Secured Revolving Loan | | 1.00% | | Base rate+ 6.84% | | 11.30% | | 04/25/22 | | 04/24/26 | | 481 | | | 472 | | | 471 | | 0.14 | |
| | | | | | | | | | | | | | | | | 8,270 | | | 8,262 | | 2.38 | |
Internet & Direct Marketing Retail | | | | | | | | | | | | | | | | | | | | | | | |
BBQ Buyer, LLC (d/b/a BBQ Guys) | | First Lien Secured Term Loan | | 1.50% | | L+ 10.00% | | 11.67% (9.67% Cash + 2.00% PIK) | | 08/28/20 | | 08/28/25 | | 12,686 | | | 12,484 | | | 12,528 | | 3.61 | |
BBQ Buyer, LLC (d/b/a BBQ Guys) | | First Lien Secured Delayed Draw Loan | | 1.50% | | L+ 10.00% | | 11.67% (9.67% Cash + 2.00% PIK) | | 04/29/22 | | 08/28/25 | | 2,586 | | | 2,543 | | | 2,560 | | 0.74 | |
Luxury Brand Holdings, Inc. (d/b/a Ross-Simons, Inc.) | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 7.74% | | 12/04/20 | | 06/04/26 | | 5,910 | | | 5,826 | | | 5,873 | | 1.69 | |
Potpourri Group, Inc. | | First Lien Secured Term Loan | | 1.50% | | L+ 8.25% | | 9.75% | | 07/03/19 | | 07/03/24 | | 16,920 | | | 16,767 | | | 16,920 | | 4.87 | |
| | | | | | | | | | | | | | | | | 37,620 | | | 37,881 | | 10.91 | |
Investment Banking & Brokerage | | | | | | | | | | | | | | | | | | | | | | | |
JVMC Holdings Corp. (fka RJO Holdings Corp) | | First Lien Secured Term Loan | | 1.00% | | L+ 7.00% | | 8.67% | | 02/28/19 | | 02/28/24 | | 12,295 | | $ | 12,254 | | $ | 12,295 | | 3.54 | |
| | | | | | | | | | | | | | | | | 12,254 | | | 12,295 | | 3.54 | |
IT Consulting & Other Services | | | | | | | | | | | | | | | | | | | | | | | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
ATSG, Inc. | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 7.91% | | 11/12/21 | | 11/12/26 | | 13,921 | | | 13,678 | | | 13,708 | | 3.95 | % |
| | | | | | | | | | | | | | | | | 13,678 | | | 13,708 | | 3.95 | |
Leisure Facilities | | | | | | | | | | | | | | | | | | | | | | | |
Honors Holdings, LLC (d/b/a Orange Theory)(16)(24) | | First Lien Secured Term Loan | | 1.00% | | L+ 7.69% | | 9.35% (8.85% Cash + 0.50% PIK) | | 09/06/19 | | 09/06/24 | | 9,440 | | | 9,329 | | | 9,345 | | 2.69 | |
Honors Holdings, LLC (d/b/a Orange Theory)(16)(24) | | First Lien Secured Delayed Draw Loan | | 1.00% | | L+ 7.73% | | 9.05% (8.55% Cash + 0.50% PIK) | | 09/06/19 | | 09/06/24 | | 4,649 | | | 4,616 | | | 4,603 | | 1.32 | |
Lift Brands, Inc. (d/b/a Snap Fitness) | | First Lien Secured Term Loan A | | 1.00% | | L+ 7.50% | | 9.17% | | 06/29/20 | | 06/29/25 | | 5,603 | | | 5,550 | | | 5,546 | | 1.60 | |
Lift Brands, Inc. (d/b/a Snap Fitness) | | First Lien Secured Term Loan B | | N/A | | 9.50% | | 9.50% (0.00% Cash + 9.50% PIK) | | 06/29/20 | | 06/29/25 | | 1,330 | | | 1,313 | | | 1,303 | | 0.38 | |
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(9) | | First Lien Secured Term Loan C | | N/A | | 9.50% | | 9.50% (0.00% Cash + 9.50% PIK) | | 06/29/20 | | NA | | 1,268 | | | 1,265 | | | 1,084 | | 0.31 | |
| | | | | | | | | | | | | | | | | 22,073 | | | 21,881 | | 6.30 | |
Leisure Products | | | | | | | | | | | | | | | | | | | | | | | |
Playmonster Group LLC(6)(20)(22) | | First Lien Secured Term Loan | | 1.00% | | L+ 8.00% | | 9.08% (1.08% Cash + 8.00% PIK) | | 01/24/22 | | 06/08/26 | | 3,489 | | | 3,489 | | | 3,489 | | 1.00 | |
| | | | | | | | | | | | | | | | | 3,489 | | | 3,489 | | 1.00 | |
Life Sciences Tools & Services | | | | | | | | | | | | | | | | | | | | | | | |
LSCS Holdings, Inc. (d/b/a Eversana Life Science Services, LLC) | | Second Lien Secured Term Loan | | 0.50% | | L+ 8.00% | | 10.25% | | 11/23/21 | | 12/16/29 | | 5,000 | | | 4,930 | | | 4,900 | | 1.41 | |
| | | | | | | | | | | | | | | | | 4,930 | | | 4,900 | | 1.41 | |
Office Services & Supplies | | | | | | | | | | | | | | | | | | | | | | | |
American Crafts, LC | | First Lien Secured Term Loan | | 1.00% | | L+ 8.50% | | 10.17% | | 05/28/21 | | 05/28/26 | | 8,245 | | | 8,149 | | | 8,030 | | 2.31 | |
American Crafts, LC | | First Lien Secured Delayed Draw Loan | | 1.00% | | L+ 8.50% | | 10.17% | | 01/25/22 | | 05/28/26 | | 1,385 | | | 1,360 | | | 1,359 | | 0.39 | |
Empire Office, Inc. | | First Lien Secured Term Loan | | 1.50% | | L+ 6.50% | | 8.17% | | 04/12/19 | | 04/12/24 | | 12,231 | | | 12,118 | | | 12,072 | | 3.47 | |
Empire Office, Inc.(4)(7) | | First Lien Secured Delayed Draw Loan | | 1.50% | | L+ 6.50% | | 8.17% | | 08/17/21 | | 04/12/24 | | — | | | — | | | (56) | | (0.02) | |
| | | | | | | | | | | | | | | | | 21,627 | | | 21,405 | | 6.15 | |
Packaged Foods & Meats | | | | | | | | | | | | | | | | | | | | | | | |
Lenny & Larry's, LLC(17)(24) | | First Lien Secured Term Loan | | 1.00% | | L+ 8.38% | | 9.70% (7.99% Cash + 1.71% PIK) | | 05/15/18 | | 05/15/23 | | 11,188 | | | 11,151 | | | 10,909 | | 3.15 | |
| | | | | | | | | | | | | | | | | 11,151 | | | 10,909 | | 3.15 | |
Personal Products | | | | | | | | | | | | | | | | | | | | | | | |
Inspired Beauty Brands, Inc. | | First Lien Secured Term Loan | | 1.00% | | L+ 7.00% | | 8.41% | | 12/30/20 | | 12/30/25 | | 11,960 | | | 11,792 | | | 11,841 | | 3.41 | |
Inspired Beauty Brands, Inc.(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 7.00% | | 8.41% | | 12/30/20 | | 12/30/25 | | — | | | — | | | 2 | | — | |
Sunless, Inc. | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 8.75% | | 06/30/22 | | 08/13/25 | | 2,097 | | | 2,055 | | | 2,055 | | 0.59 | |
| | | | | | | | | | | | | | | | | 13,847 | | | 13,898 | | 4.00 | |
Research & Consulting Services | | | | | | | | | | | | | | | | | | | | | | | |
Aeyon LLC(24) | | First Lien Secured Term Loan | | 1.00% | | SF+ 8.88% | | 10.07% | | 02/10/22 | | 02/10/27 | | 8,955 | | | 8,790 | | | 8,812 | | 2.54 | |
ALM Media, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 8.17% | | 11/25/19 | | 11/25/24 | | 13,781 | | | 13,649 | | | 13,643 | | 3.93 | |
Nelson Worldwide, LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 10.25% | | 11.29% (10.29% Cash + 1.00% PIK) | | 01/09/18 | | 01/09/23 | | 9,411 | | | 9,386 | | | 9,309 | | 2.68 | |
| | | | | | | | | | | | | | | | | 31,825 | | | 31,764 | | 9.15 | |
Specialized Consumer Services | | | | | | | | | | | | | | | | | | | | | | | |
Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.) | | First Lien Secured Term Loan | | 1.00% | | L+ 6.50% | | 8.10% | | 11/16/21 | | 11/16/27 | | 12,838 | | $ | 12,607 | | $ | 12,624 | | 3.63 | |
Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.)(4)(7) | | First Lien Secured Delayed Draw Loan | | 1.00% | | L+ 6.50% | | 8.10% | | 11/16/21 | | 11/16/27 | | — | | | — | | | 5 | | — | |
HC Salon Holdings, Inc. (d/b/a Hair Cuttery) | | First Lien Secured Term Loan | | 1.00% | | L+ 8.00% | | 10.25% | | 09/30/21 | | 09/30/26 | | 11,579 | | | 11,382 | | | 11,579 | | 3.33 | |
HC Salon Holdings, Inc. (d/b/a Hair Cuttery)(7) | | First Lien Secured Revolving Loan | | 1.00% | | L+ 8.00% | | 10.25% | | 09/30/21 | | 09/30/26 | | — | | | — | | | 12 | | — | |
True Blue Car Wash, LLC(24) | | First Lien Secured Term Loan | | 1.00% | | SF+ 6.85% | | 8.47% | | 10/17/19 | | 10/17/24 | | 10,035 | | | 9,930 | | | 9,943 | | 2.86 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
True Blue Car Wash, LLC(7)(24) | | First Lien Secured Delayed Draw Loan | | 1.00% | | SF+ 6.50% | | 7.98% | | 10/17/19 | | 10/17/24 | | 3,358 | | | 3,308 | | | 3,310 | | 0.95 | % |
| | | | | | | | | | | | | | | | | 37,227 | | | 37,473 | | 10.77 | |
Specialized Finance | | | | | | | | | | | | | | | | | | | | | | | |
WHF STRS Ohio Senior Loan Fund LLC(4)(5)(9)(14) | | Subordinated Note | | N/A | | L+ 6.50% | | 7.62% | | 07/19/19 | | N/A | | 80,000 | | | 80,000 | | | 80,000 | | 23.03 | |
| | | | | | | | | | | | | | | | | 80,000 | | | 80,000 | | 23.03 | |
Systems Software | | | | | | | | | | | | | | | | | | | | | | | |
Arcstor Midco, LLC (d/b/a Arcserve (USA), LLC | | First Lien Secured Term Loan | | 1.00% | | L+ 7.00% | | 9.25% | | 03/16/21 | | 03/16/27 | | 19,256 | | | 18,954 | | | 17,909 | | 5.15 | |
| | | | | | | | | | | | | | | | | 18,954 | | | 17,909 | | 5.15 | |
Technology Hardware, Storage & Peripherals | | | | | | | | | | | | | | | | | | | | | | | |
Telestream Holdings Corporation | | First Lien Secured Term Loan | | 1.00% | | SF+ 9.25% | | 10.59% | | 10/15/20 | | 10/15/25 | | 15,926 | | | 15,583 | | | 15,899 | | 4.58 | |
Telestream Holdings Corporation(7) | | First Lien Secured Revolving Loan | | 1.00% | | SF+ 9.25% | | 10.59% | | 10/15/20 | | 10/15/25 | | 530 | | | 519 | | | 546 | | 0.16 | |
Telestream Holdings Corporation(7) | | First Lien Secured Delayed Draw Loan | | 1.00% | | SF+ 9.25% | | 10.59% | | 05/12/22 | | 10/15/25 | | — | | | — | | | — | | — | |
| | | | | | | | | | | | | | | | | 16,102 | | | 16,445 | | 4.74 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total Debt Investments | | | | | | | | | | | | | | | | $ | 721,166 | | $ | 717,089 | | 206.35 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Equity Investments(23) | | | | | | | | | | | | | | | | | | | | | | | |
Advertising | | | | | | | | | | | | | | | | | | | | | | | |
Avision Holdings, LLC (d/b/a Avision Sales Group)(4) | | Class A LLC Interests | | N/A | | N/A | | N/A | | 12/15/21 | | N/A | | 201 | | $ | 251 | | $ | 185 | | 0.05 | % |
| | | | | | | | | | | | | | | | | 251 | | | 185 | | 0.05 | |
Air Freight & Logistics | | | | | | | | | | | | | | | | | | | | | | | |
Motivational CIV, LLC (d/b/a Motivational Fulfillment)(4) | | Class B Units | | N/A | | N/A | | N/A | | 07/12/21 | | N/A | | 1,250 | | | 1,250 | | | 650 | | 0.19 | |
| | | | | | | | | | | | | | | | | 1,250 | | | 650 | | 0.19 | |
Building Products | | | | | | | | | | | | | | | | | | | | | | | |
PFB Holdco, Inc. (d/b/a PFB Corporation)(4)(13) | | Class A Units | | N/A | | N/A | | N/A | | 12/17/21 | | N/A | | 1 | | | 423 | | | 576 | | 0.17 | |
| | | | | | | | | | | | | | | | | 423 | | | 576 | | 0.17 | |
Data Processing & Outsourced Services | | | | | | | | | | | | | | | | | | | | | | | |
Escalon Services Inc.(4) | | Warrants | | N/A | | N/A | | N/A | | 12/04/20 | | N/A | | 709 | | | 476 | | | 2,183 | | 0.63 | |
| | | | | | | | | | | | | | | | | 476 | | | 2,183 | | 0.63 | |
Diversified Support Services | | | | | | | | | | | | | | | | | | | | | | | |
Quest Events, LLC(4) | | Preferred Units | | N/A | | N/A | | N/A | | 12/28/18 | | 12/08/25 | | 324 | | | 324 | | | 53 | | 0.02 | |
ImageOne Industries, LLC(4) | | Common A Units | | N/A | | N/A | | N/A | | 09/20/19 | | N/A | | 227 | | | 2 | | | 120 | | 0.03 | |
| | | | | | | | | | | | | | | | | 326 | | | 173 | | 0.05 | |
Education Services | | | | | | | | | | | | | | | | | | | | | | | |
Eddy Acquisitions, LLC (d/b/a EducationDynamics, LLC)(4) | | Preferred Units | | N/A | | 12.00% | | 12.00% | | 09/15/21 | | N/A | | 167 | | | 167 | | | 167 | | 0.05 | |
| | | | | | | | | | | | | | | | | 167 | | | 167 | | 0.05 | |
Environmental & Facilities Services | | | | | | | | | | | | | | | | | | | | | | | |
BPII-JL Group Holdings LP (d/b/a Juniper Landscaping Holdings LLC)(4) | | Class A Units | | N/A | | N/A | | N/A | | 12/29/21 | | N/A | | 83 | | | 825 | | | 800 | | 0.23 | |
| | | | | | | | | | | | | | | | | 825 | | | 800 | | 0.23 | |
Health Care Services | | | | | | | | | | | | | | | | | | | | | | | |
Lab Logistics, LLC(4)(21) | | Preferred Units | | N/A | | 14.00% | | 14.00% PIK | | 10/29/19 | | N/A | | 2 | | $ | 857 | | $ | 1,141 | | 0.33 | |
| | | | | | | | | | | | | | | | | 857 | | | 1,141 | | 0.33 | |
Industrial Machinery | | | | | | | | | | | | | | | | | | | | | | | |
BL Products Parent, LP (d/b/a Bishop Lifting Products, Inc.)(4) | | Class A Units | | N/A | | N/A | | N/A | | 02/01/22 | | N/A | | 667 | | | 667 | | | 667 | | 0.19 | |
| | | | | | | | | | | | | | | | | 667 | | | 667 | | 0.19 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Interactive Media & Services | | | | | | | | | | | | | | | | | | | | | | | |
What If Media Group, LLC(4) | | Common Units | | N/A | | N/A | | N/A | | 07/02/21 | | N/A | | 851 | | | 851 | | | 2,068 | | 0.60 | % |
| | | | | | | | | | | | | | | | | 851 | | | 2,068 | | 0.60 | |
Internet & Direct Marketing Retail | | | | | | | | | | | | | | | | | | | | | | | |
BBQ Buyer, LLC (d/b/a BBQ Guys)(4) | | Shares | | N/A | | N/A | | N/A | | 08/28/20 | | N/A | | 1,100 | | | 1,100 | | | 2,255 | | 0.65 | |
Ross-Simons Topco, LP (d/b/a Ross-Simons, Inc.)(4) | | Preferred Units | | N/A | | 8.00% | | 8.00% PIK | | 12/04/20 | | N/A | | 600 | | | 514 | | | 840 | | 0.24 | |
| | | | | | | | | | | | | | | | | 1,614 | | | 3,095 | | 0.89 | |
Investment Banking & Brokerage | | | | | | | | | | | | | | | | | | | | | | | |
Arcole Holding Corporation(4)(5)(6)(18) | | Shares | | N/A | | N/A | | N/A | | 10/01/20 | | N/A | | — | | | 6,944 | | | 6,475 | | 1.86 | |
| | | | | | | | | | | | | | | | | 6,944 | | | 6,475 | | 1.86 | |
IT Consulting & Other Services | | | | | | | | | | | | | | | | | | | | | | | |
CX Holdco LLC (d/b/a Cennox Inc.)(4) | | Common Units | | N/A | | N/A | | N/A | | 05/04/21 | | N/A | | 972 | | | 972 | | | 1,554 | | 0.45 | |
Keras Holdings, LLC (d/b/a KSM Consulting, LLC)(4) | | Shares | | N/A | | N/A | | N/A | | 12/31/20 | | N/A | | 496 | | | 496 | | | 496 | | 0.14 | |
| | | | | | | | | | | | | | | | | 1,468 | | | 2,050 | | 0.59 | |
Leisure Facilities | | | | | | | | | | | | | | | | | | | | | | | |
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(4) | | Class A Common Stock | | N/A | | N/A | | N/A | | 06/29/20 | | N/A | | 2 | | | 1,941 | | | 183 | | 0.05 | |
Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(4) | | Warrants | | N/A | | N/A | | N/A | | 06/29/20 | | 06/28/28 | | 1 | | | 793 | | | 74 | | 0.02 | |
| | | | | | | | | | | | | | | | | 2,734 | | | 257 | | 0.07 | |
Leisure Products | | | | | | | | | | | | | | | | | | | | | | | |
Playmonster Group Equity, Inc. (d/b/a PlayMonster Group LLC)(4)(6)(8)(22) | | Preferred Stock | | N/A | | 14.00% | | 14.00% PIK | | 01/24/22 | | N/A | | 36 | | | 3,600 | | | 2,253 | | 0.66 | |
Playmonster Group Equity, Inc. (d/b/a PlayMonster Group LLC)(4)(6)(22) | | Common Stock | | N/A | | N/A | | N/A | | 01/24/22 | | N/A | | 72 | | | 460 | | | — | | — | |
| | | | | | | | | | | | | | | | | 4,060 | | | 2,253 | | 0.66 | |
Other Diversified Financial Services | | | | | | | | | | | | | | | | | | | | | | | |
SFS Global Holding Company (d/b/a Sigue Corporation)(4) | | Warrants | | N/A | | N/A | | N/A | | 06/28/18 | | 12/28/25 | | — | | | — | | | — | | — | |
Sigue Corporation(4) | | Warrants | | N/A | | N/A | | N/A | | 06/28/18 | | 12/28/25 | | 22 | | | 2,890 | | | 3,489 | | 1.00 | |
| | | | | | | | | | | | | | | | | 2,890 | | | 3,489 | | 1.00 | |
Specialized Consumer Services | | | | | | | | | | | | | | | | | | | | | | | |
Camp Facility Services Parent, LLC (d/b/a Camp Construction Services, Inc.)(4) | | Preferred Units | | N/A | | 10.00% | | 10.00% PIK | | 11/16/21 | | N/A | | 15 | | | 840 | | | 882 | | 0.26 | |
| | | | | | | | | | | | | | | | | 840 | | | 882 | | 0.26 | |
Specialized Finance | | | | | | | | | | | | | | | | | | | | | | | |
WHF STRS Ohio Senior Loan Fund(4)(5)(14) | | LLC Interests | | N/A | | N/A | | N/A | | 07/19/19 | | N/A | | 20,000 | | | 20,000 | | | 22,279 | | 6.41 | |
| | | | | | | | | | | | | | | | | 20,000 | | | 22,279 | | 6.41 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total Equity Investments | | | | | | | | | | | | | | | | $ | 46,643 | | $ | 49,390 | | 14.23 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
Total Investments | | | | | | | | | | | | | | | | $ | 767,809 | | $ | 766,479 | | 220.58 | % |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
June 30, 2022
(in thousands)
| | | | | | | | | | | | | | |
Counterparty |
| Currency to be sold |
| Currency to be purchased |
| Settlement date |
| Unrealized |
| Unrealized | ||||
Morgan Stanley | | C$ | 80 CAD | | $ | 62 USD | | 7/29/22 | | $ | — | | $ | — |
Total | | | | | | | | | | $ | — | | $ | — |
(1) | Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined by the Investment Company Act of 1940, as amended (the “1940 Act”), and provide collateral for the Company’s credit facility. |
(2) | The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), which resets monthly, quarterly or semiannually, the Secured Overnight Financing Rate (“SOFR” or “SF”), the Canadian Dollar Offered Rate (“CDOR” or “C”), Canada Prime Rate (“CP”) or the U.S. Prime Rate (“Prime” or “P”). |
(3) | The interest rate is the “all-in-rate” including the current index and spread, the fixed rate, and the payment-in-kind (“PIK”) interest rate, as the case may be. |
(4) | The investment or a portion of the investment does not provide collateral for the Company’s credit facility. |
(5) | Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of total assets. Qualifying assets represented 82.9% of total assets as of the date of the consolidated schedule of investments. |
(6) | Investment is a non-controlled/affiliate investment as defined by the 1940 Act. |
(7) | The investment has an unfunded commitment in addition to any amounts presented in the consolidated schedule of investments as of June 30, 2022. |
(8) | Preferred equity investment is a non-income producing security. |
(9) | Security is perpetual with no defined maturity date. |
(10) | Except as otherwise noted, all of the Company’s portfolio company investments, which as of the date of the consolidated schedule of investments represented 220.6% of the Company’s net assets or 95.9% of the Company’s total assets, are subject to legal restrictions on sales. |
(11) | The fair value of each investment was determined using significant unobservable inputs. |
(12) | The investment was comprised of two contracts, which were indexed to different base rates, L and P, respectively. The Floor, Spread Above Index and Interest Rate presented represent the weighted average of both contracts. |
(13) | Principal amount is non-USD denominated and is based in Canadian dollars. |
(14) | Investment is a controlled affiliate investment as defined by the 1940 Act. On January 14, 2019, the Company entered into an agreement with State Teachers Retirement System of Ohio, a public pension fund established under Ohio law (“STRS Ohio”), to create WHF STRS Ohio Senior Loan Fund, LLC (“STRS JV”), a joint venture, which invests primarily in senior secured first and second lien term loans. |
(15) | In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 2.75% on its “last out” tranche of the portfolio company’s senior term debt, which was previously syndicated into “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder. |
(16) | In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.50% on its “last out” tranche of the portfolio company’s senior term debt, which was previously syndicated into “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder. |
(17) | In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.00% on its “last out” tranche of the portfolio company’s senior term debt, which was previously syndicated into “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder. |
(18) | On October 1, 2020, as part of a restructuring agreement between the Company and Arcole Acquisition Corp, the Company’s investments in first lien secured term loans to Arcole Acquisition Corp were converted into common shares of Arcole Holding Corp. |
(19) | At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 2.00% PIK. |
(20) | At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 9.00% PIK. |
(21) | Investment earns 14.00% that converts to PIK on an annual basis and is recorded in interest and dividend receivable in the consolidated statements of assets and liabilities. |
(22) | On January 24, 2022, as part of a restructuring agreement between the Company and PlayMonster LLC, the Company’s first lien secured term loan and delayed draw loan investments to PlayMonster LLC were converted into a new first lien secured term loan, preferred stock and common stock of Playmonster Group LLC. |
(23) | Ownership of certain equity investments may occur through a holding company or partnership. |
(24) | Investment is structured as a unitranche loan in which the Company may receive additional interest on its “last out” tranche of the portfolio company’s senior term debt, which was previously syndicated into “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder. |
| |
Contacts | |
| |
Stuart Aronson | |
WhiteHorse Finance, Inc. | |
212-506-0500 | |
saronson@higwhitehorse.com | |
| |
or | |
| |
Joyson Thomas | |
WhiteHorse Finance, Inc. | |
305-379-2322 | |
jthomas@higwhitehorse.com | |
| |
or | |
| |
Robert Brinberg | |
| |
| |
| |
| |
Source: WhiteHorse Finance, Inc. | |
Earnings PresentationQuarter Ended June 30, 2022WhiteHorse Finance, Inc. NASDAQ: WHF (Common Stock) |
1References in this presentation to “WHF”, “we”, “us”, “our” and “the Company” refer to WhiteHorse Finance, Inc.This presentation and the information and views included herein do not constitute investment advice, or a recommendation or an offer to enter into any transaction with the Company or any of its affiliates. Investors are advised to consider carefully the Company’s investment objectives, risks, charges and expenses before investing in the Company’s securities. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, which have been filed with the Securities and Exchange Commission (“SEC”), contain this and other information about the Company and should be read carefully before investing in the Company’s securities. The information in this presentation is not complete and may be changed. This presentation is not an offerto sell the Company’s securities and is not soliciting an offer to buy the Company’s securities in any jurisdiction where such offer or sale is not permitted. A shelf registration statement relating to the Company’s securities is on file with the SEC. A public offering of the Company’s securities may be made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained by writing the Company at 1450 Brickell Avenue, 31st Floor, Miami, FL 33131, Attention: Investor Relations, or by calling (305) 381-6999; copies may also be obtained by visiting EDGAR on the SEC’s website at http://www.sec.gov ..Forward Looking Statements Some of the statements in this presentation constitute forward-looking statements, which relate to future events or the Company’s future performance or financial condition.The forward-looking statements contained in this presentation involve risks and uncertainties, including statements as to: the Company’s future operating results; changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, which could result in changes to the value of the Company’s assets; the impact of the COVID-19 pandemic and its effects on the Company’s and its portfolio companies’ results of operations and financial condition; the Company’s business prospects and the prospects of its prospective portfolio companies; the impact of investments that the Company expects to make; the impact of increased competition; the Company’s contractual arrangements andrelationships with third parties; the dependence of the Company’s future success on the general economy and its impact on the industries in which the Company invests; the ability of the Company’s prospective portfolio companies to achieve their objectives; the relative and absolute performance of the Company’sinvestment adviser; the Company’s expected financings and investments; the adequacy of the Company’s cash resources and working capital; the timing of cash flows, if any, from the operations of the Company’s prospective portfolio companies; and the impact of future acquisitions and divestitures. Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The Company has based the forward-looking statements included in this presentation on information available to us on the date ofthis presentation, and the Company assumes no obligation to update any such forward-looking statements.Actual results could differ materially from those implied or expressed in the Company’s forward-looking statements for any reason, and future results could differ materially from historical performance.Although the Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that are made directly to you or through reports that the Company in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. For a further discussion of factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the annual reports on Form 10-K and quarterly reports on Form 10-Q we file with the SEC.Important Information and Forward Looking Statements |
2WhiteHorse Finance Snapshot Company: WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”): Equity Ticker: NASDAQ: WHF Market Cap: $329.8MM(1) NAV / Share: $14.95 Portfolio Fair Value: $766.5MM Current Dividend Yield: 10.0%(1)(2); consistent quarterly dividends of $0.355 per share since 2012 IPO(1)Based on August 9, 2022 share price of $14.19(2)Based on LTM dividend rate, excluding special dividends, relative to closing share price. External Manager: Affiliate of H.I.G. Capital, LLC (“H.I.G. Capital” or “H.I.G.”) |
Overview of WhiteHorse Finance, Inc.3 Portfolio atFair Value ($MM) NAV + Cumulative Dividends per shareNote: As of December 31stof each respective year presented, unless otherwise noted.(1)Based on total capital commitments managed by H.I.G. Capital and affiliates.(2)Based on fair value. Does not include investments in STRS JV.Source: Company filingsWhiteHorse Finance, Inc. is a publicly listed Business Development Company (“BDC”) that completed its IPO in December 2012WhiteHorse Finance’s investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, a leading global alternative asset manager with $50Bn of capital under management(1)Principally focused on originating senior secured loans to performing lower middle market companies with individual enterprise values generally between $50MM and $350MMDiversified investment portfolio totaling $766.5MM as of June 30, 2022Investments across 105 positions in 68 portfolio companies as of June 30, 2022−Average Investment Size(2): $6.4MM (Average Debt Investment Size(2): $7.9MM)−Largest Portfolio Company Investment(2): $23.5MMInvested $2,400MM in 203 transactions since December 2012 IPOThe Company and State Teachers Retirement System of Ohio (“STRS Ohio”), a public pension fund established under Ohio law, partnered to create WHF STRS Ohio Senior Loan Fund LLC (“STRS JV”), a joint venture formed to invest in directly originated, senior secured first andsecond lien term loans. $180.5 $272.4 $403.5 $415.3 $411.7 $440.7 $469.6 $589.7 $690.7 $819.2 $766.5 2012201320142015201620172018201920202021Q2 2022 $15.30 $15.16 $15.04 $13.33 $13.63 $13.98 $15.35 $15.23 $15.23 $15.10 $14.95 $0.11 $1.53 $2.95 $4.37 $5.79 $7.21 $8.63 $10.25 $11.79 $13.35 $14.06 $15.41 $16.69 $17.99 $17.70 $19.42 $21.19 $23.98 $25.48 $27.02 $28.45 $29.01 2012201320142015201620172018201920202021Q2 2022 Net asset value Cumulative dividends paid (including special dividends) |
4Overview of WhiteHorse Finance, Inc. (continued)Note: As of June 30, 2022unless otherwise noted.(1)Reflects life-to-date since IPO, andmay exclude follow-on transactions and investments in STRS JV made via asset transfers in-kind.(2)Across 103 investments. Does not include investments in STRS JV.(3)Reflects weighted average effective yield of income-producing debt investments. Weighted average effective yield for entire portfolio, including equities and investments in STRS JV, as of June 30, 2022, is 9.9%. Weighted average effective yield is computed by dividing (a) annualized interest income (including interest income resulting from the amortization of fees and discounts) by (b) the weighted average cost of investments.(4)Measured at origination based on borrower reporting and WHF’s target underwriting leverage.Does not include investments in STRS JV.(5)Based on fair value. Does not include the Company’s investments in STRS JV. Generate attractive risk-adjusted return inall market conditions by originating and investing in senior secured loans to performing lower middle market companies and leveragingthe knowledge of H.I.G. CapitalDifferentiated proprietarydeal flow from over 65 dedicated deal professionalssourcing through direct coverageof financial sponsors and intermediariesRigorous credit process focused on fundamental analysis with emphasis on downside protection and cash flow visibility10-person investment committee with more than 250 years of industry experience Investment strategy focused on first lien and second lien senior secured investments in lower middle market companies with a target hold size of $5MM to $25MM Summary Stats:Invested Capital since IPO:$2,400MM(1)Number of Investments Made:~203(1)Average Investment Size:~$6.4MM(2)All-inYield:9.9%(3)Net Debt / EBITDA of Current Portfolio Companies:~4.1x(4)Secured Debt as a %of Total Debt:~100%(5) Investment Strategy |
5Summary ofQuarterly Results Fiscal Quarter HighlightsTotal investments at fair value decreased to $766.5 million in Q2 2022 as compared to $800.4 million in Q1 2022.The Company made investments in four new portfolio companies for gross deployments of $28.9 million and made add-on investments totaling $19.2 million. The Company transferred two investments to the STRS JV totaling $17.8 million and received additional dispositions and principalrepayments of $66.1 million. The weighted average effective yield on income-producing investments at the end of Q2 2022 was approximately 9.9% as compared with approximately 9.2% at the end of the prior quarter.Q2 Net Investment Income (“NII”) was $7.9 million, or $0.339 per share, which compares with Q1 NII of $8.5 million, or $0.368per share. Q2 Core NII(1) after adjusting for an approximate $0.1 million capital gains incentive fee reversal, was $7.8 million, or $0.334 per share, compared with the quarterly distribution of $0.355 per share. This compares with Q1 Core NII of $7.9 million, or $0.344 per share. Net realized and unrealized losses on investments and foreign currency transactions for Q2 2022 were $0.5 million primarily driven by markdowns across the portfolio, partially offset by a $1.7 million realized gain from the recovery proceeds received from theRCS Class B Units investment.NAV per share at the end of Q2 2022 was$14.95 per sharecompared with $14.99 per share from Q1 2022.Gross leverage levels decreased during the quarter to 1.23x from 1.36x at the end of Q1 2022. Cash on-hand at the end of Q2 2022was $18.6 million resulting in net leverage of 1.18xas compared with 1.30x at the end of Q1 2022.As of June 30, 2022, STRS JV had total assets of $336.5 million. The Company’s return on its investment in STRS JV at the endofQ2 2022 was 12.1%(2). The Company’s increased economic ownership to 66.7% from 60.0%, was only partially in effect during Q2 2022(3). (1)Core net investment income is a non-GAAP financial measure. Refer to next slide for components and discussion of core net investment income. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, netinvestment income, can also be found by accessing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com ..(2)Computed as the annual stated rate of the subordinated notes, based on the subordinated notes outstanding as of the period, and dividends received over the last twelve-month period, based on average capital invested.(3)Equity distributions on capital invested are generally distributed a quarter in arrears. |
6Quarterly Operating HighlightsNote: Numbers may not foot due to rounding.(1)Total investment income includes investment income (e.g., interest and dividends) from investments in STRS JV.(2)Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides usefulinformation to investors and management because it reflects the Company's financial performance excluding (i) the net impact of costs associated with the refinancing of the Company's indebtedness, (ii) the accrual of the capital gains incentive fee attributable to realized and unrealized gains and losses, and (iii) certain excise or other income taxes (net of incentive fees). The presentation of this additional information is not meantto be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, can be found by accessing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com ..Source: Company filings Unaudited Quarterly Financials Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022 (USD in MM, expect per share data) Total Investment Income (1) $ 18.0 $ 17.3 $ 18.4 $ 18.5 $ 20.0 $ 20.0 Expenses Interest Expense 3.8 3.8 3.8 5.1 4.8 4.9 Base Management Fees 3.3 3.4 3.5 3.8 4.0 3.9 Performance-based Incentive Fees 2.0 2.6 2.1 0.8 1.4 1.8 Other Expenses 1.3 1.4 1.3 1.3 1.3 1.5 Total Expenses 10.4 11.2 $ 10.7 11.0 11.5 12.1 Net Investment Income $ 7.6 $ 6.1 $ 7.7 $ 7.5 $ 8.5 $ 7.9 Net Realied and Unrealied Gain / (Loss) 0.6 4.4 0.6 (4.3) (2.8) (0.5) Net Increase in Net Assets from Operations $ 8.2 $ 10.5 $ 8.3 $ 3.1 $ 5.7 $ 7.4 Per Share Net Investment Income (NII) $ 0.37 $0.30 $ 0.37 $0.33$0.37$0.34Core NII (2) $ 0.38 $0.34 $ 0.37 $0.32$0.34$0.33Net Realized and Unrealized Gain / (Loss) $ 0.03 $0.21 $ 0.03 $(0.19)$(0.12)$(0.02)Earnings $ 0.40 $0.51 $ 0.40 $0.14$0.25$0.32Dividends Declared $ 0.355 $0.355 $ 0.355 $0.355$0.355$0.355Special Dividends Declared $ - $- $ - $0.135$-$-Core NII Dividend Coverage 106% 95% 105% 91% 97% 94% |
7Quarterly Balance Sheet HighlightsNote: Numbers may not foot due to rounding (1)Includes Restricted Cash.(2)Calculated as Total Gross Debt Outstanding divided by Total Net Assets. (3)Net Leverage Ratio is defined as debt outstanding less cash, divided by total net assets. (4)Fundings, exits and repayments may include cash flows on revolver investments as well as non-cash transactions (e.g., PIK, equity issuances). Unaudited Quarterly Financials Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022 (USD in MM, expect per share data) Assets Investments at Fair Value $ 617.0 $ 670.5 $ 687.1 $ 819.2 $ 800.4 $ 766.5 Cash and Equivalents(1) 24.5 17.8 16.6 22.5 21.3 18.6 Other Assets 29.0 11.4 25.9 9.3 17.1 14.5 Total Assets $ 670.5 $ 699.7 $ 729.6 $ 851.0 $ 838.8 $ 799.6 Liabilities Debt (net of issuance costs) 334.5 358.7 379.8 476.0 467.9 423.2 Other Liabilities 21.7 21.4 26.1 25.2 23.0 29.0 Total Liabilities $ 356.2 $ 380.1 $ 405.9 $ 501.2 $ 490.9 $ 452.2 Total Net Assets $ 314.3 $ 319.6 $ 323.7 $ 349.8 $ 347.9 $ 347.4 Total Liabilities and Net Assets $ 670.5 $ 699.7 $ 729.6 $ 851.0 $ 838.8 $ 799.6 Net Asset Value per Share $ 15.27 $ 15.42 $ 15.46 $ 15.10 $ 14.99 $ 14.95 Leverage Ratio (2) 1.08x 1.14x 1.19x 1.38x 1.36x1.23x Net Leverage Ratio (3) 1.00x 1.08x 1.14x 1.31x 1.30x1.18x Gross Fundings (4) 72.4 118.4 137.9 215.4 103.6 66.9 Exits and Repayments (4) (149.8) (69.5) (124.0) (80.3) (121.0)(101.2) Net Fundings/(Repayments) $ (77.4) $ 48.9 $ 13.9 $ 135.1 $ (17.4) $ (34.3) |
Portfolio Highlights8Note: Not a guarantee of future performance or investment pace.(1) Does not include investments in STRS JV.(2) Calculated based on funded principal amounts of debt investments.(3)Weighted average effective yield is computed by dividing (a) annualized interest income (including interest income resulting from the amortization of fees and discounts) by (b) the weighted average cost of investments.(4) Weighted average effective yield for entire portfolio, including equities and investments in STRS JV.(5) Includes STRS JV Subordinated Note.Source: Company filings($ in MM, except per share data) Portfolio Investment Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Total Fair Value of Investments $ 617.0 $ 670.5 $ 687.1 $ 819.2 $ 800.4 $ 766.5 Number of Portfolio Investments 90 97 99 127 111 105 Number of Portfolio Companies 62 67 65 76 68 68 Average Investment Size (1) $ 6.4 $ 6.4 $ 6.3 $ 5.9 $ 6.4 $ 6.4 Average Borrower Size (1) $ 9.2 $ 9.2 $ 9.6 $ 9.9 $ 10.4 $ 9.9 Average Debt Investment Size (1) $ 7.1 $ 7.1 $ 7.3 $ 6.8 $ 7.7 $ 7.9 Fair Value as a Percentage of Principal (1)(2) 96.3% 97.2% 96.1% 96.5% 98.5% 97.6% Total Portfolio Effective Yield (3) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Weighted average effective yield on income -producing debt investments(1) 9.6% 9.5% 9.3% 9.1% 9.2% 9.9% Weighted average effective yield on total portfolio (4) 9.7% 9.7% 9.1% 9.0% 9.3% 9.9% Portfolio Composition -Floating vs. Fixed Investments (Debt Investments at Fair Value) (1) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Percentage of fixed rate investments 0.4% 0.4% 0.4% 0.4% 0.4% 0.4% Percentage of floating rate investments 99.6% 99.6% 99.6% 99.6% 99.6% 99.6% Portfolio Composition -Sponsor vs. Non-Sponsor (Fair Value)(1) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Sponsor 64.5% 67.6% 66.8% 66.9% 60.5% 59.8% Non -Sponsor 35.5% 32.4% 33.2% 33.1% 39.5% 40.2% Total Portfolio Composition by Instrument Type (Fair Value) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 First lien secured loans 84.7% 84.0% 82.3% 85.1% 81.0% 80.3% Second lien secured loans 2.4% 4.4% 4.3% 2.9% 3.0% 2.9% Subordinated debt 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% STRS V 9.0% 9.2% 10.5% 9.2% 12.6% 13.3% Equity 3.9% 2.4% 2.9% 2.8% 3.4% 3.5% Investments on Non -Accrual Status (Debt Investments) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Fair Value of Investments on Non -accrual Status $ 14.3 $ 9.7 $ 8.7 $ 10.0 $ -$ - Cost of Investments on Non -accrual Status $ 23.5 $ 18.4 $ 18.4 $ 24.5 $ -$ - % of Investments on Non -accrual Status (Based on Fair Value of Debt Investments)(4) 2.5% 1.5% 1.3% 1.3% 0.0% 0.0% % of Investments on Non -accrual Status (Based on Cost of Debt Investments)(4) 4.0% 2.8% 2.8% 3.1% 0.0% 0.0% |
52%60%52%77%81%85%85%80%43%33%39%21%11%4%3%3%5%7%9%3%3%3%3%3%6%7%9%13%2015201620172018201920202021Q2 2022 % First Lien Loans % Second Lien Loans % Equity STRS JV % Subordinated 97.1%99.8%99.9%100.0% 100.0% 99.8% 99.6% 99.6% 2.9%0.2%0.1%0.2% 0.4% 0.4% 0.0%20.0%40.0%60.0%80.0%100.0%2015201620172018201920202021Q2 2022 Floating FixedPortfolio Trends Historical Portfolio Trends9 % Floating and % Fixed (Based on Fair Value) % Instrument Type (Based on Fair Value) % Sponsored / Non-Sponsored (Based on Fair Value) % Non Accruals (Based on Fair Value of Debt Investments)(1)Note: As of end of each year/quarter presented, unless otherwise noted; percentages may not add up to 100% due to rounding. Not a guarantee of future performance or investment pace.(1)Based on fair value of debt investments, including STRS JV Subordinated Note. 28%32%32%44%53%58%67%60%72%68%68%56%47%42%33%40%0.0%20.0%40.0%60.0% 80.0%100.0%2015201620172018201920202021Q2 2022 Sponsor Non-Sponsor 4.1% 1.7% 1.4%3.9%7.4%3.3% 1.8% 2.5%1.5%1.3%1.3%0.0%0.0%0.0%2.0%4.0% 6.0%8.0%10.0%Q2'19Q3'19Q4'19Q1'20 Q2'20 Q3'20Q4'20Q1'21 Q2'21 Q3'21 Q4'21Q1'22 Q2'22 % of Investments on Non-accrual |
13.3% 3.1% 3.0% 2.6% 2.6% 2.3% 2.3% 2.3% 2.2% 2.1% 64.2% STRS JV Future Payment Technologies, L.P. ABB/Con-cise Optical Group LLC Escalon Services Inc. Sleep OpCo LLC Arcstor Midco, LLC Trimlite Buyer LLC BBQ Buyer, LLC Potpourri Group, Inc. Telestream Holdings Corporation Other10Note: As of June 30, 2022, unless otherwise noted; percentages may not add up to 100% due to rounding. (1)Does not include investments in STRS JV. Industry classifications based on GICS. Composition by Borrower (Based on Fair Value) Composition by Industry(1)(Based on Fair Value)Borrower and Industry Diversity 6.5%6.2%5.8%5.1%4.8%4.1%3.6%3.5%3.3%3.2%2.8%2.7%48.4% Data Processing & Outsourced Services Internet & Direct Marketing Retail Specialized Consumer Services Health Care Services Research & Consulting Services Building Products Home Furnishings Health Care Supplies Leisure Facilities Office Services & Supplies Investment Banking & Brokerage Systems Software OtherSTRS JV~100% of WHF loans are senior secured |
2.8x2.4x4.1x3.4x3.4x2.1x4.5x3.0x3.8x2.3x3.1x2.7x3.0x3.6x2.9x3.4x3.2x3.5x3.4x3.4x3.2x3.3x3.3x3.5x3.6x3.6x3.6x3.6x3.7x3.8x3.7x3.8x4.0x4.1x4.1x4.1x4.0x4.1x15.5% 14.9% 13.1% 11.8% 11.7% 11.1% 10.7% 11.3% 11.4% 11.7% 11.6% 11.8% 11.9% 11.9% 12.1% 11.8% 11.8% 11.9% 11.9% 11.9% 12.0% 12.0% 11.9% 11.9% 11.7% 11.3% 11.1% 10.4% 9.9% 9.6% 9.9% 9.9% 9.6% 9.5% 9.3% 9.1% 9.2% 9.9% Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21Q1'22Q2'22 Borrower Leverage through WHF Security Effective YieldEffective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage(1)From IPO to June 30, 202211 Core NII(2)to Dividend Coverage(3)Note: Amounts may not foot due to rounding.(1)Portfolio leverage is based on investment leverage at inception. (2)Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides usefulinformation to investors and management because it reflects the Company's financial performance excluding (i) the net impact of costs associated with the refinancing of the Company's indebtedness, (ii)the accrual of the capital gains incentive fee attributable to realized and unrealized gains and losses, and (iii) certain excise or other income taxes (net of incentive fees).The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, can be found by accessing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com (3)Does not include special dividends.Source: Company filings Coveredby $0.05 Coveredby $0.03 Missed by $0.09 Coveredby $0.01 Missed by $0.10 Missed by $0.04 Missed by $0.03 Missed by $0.01 Covered by $0.04 Coveredby $0.01 Coveredby $0.03 Missed by $0.01 Coveredby $0.02 Missed by $0.02 Coveredby $0.01 Missed by $0.01 $0.35$0.40$0.37$0.36$0.40$0.39$0.27$0.26$0.38$0.35$0.38$0.34$0.37$0.32$0.34$0.33$0.36$0.36$0.36$0.36$0.36 $0.36 $0.36 $0.36 $0.36$0.36$0.36$0.36$0.36$0.36 $0.36 $0.36Q3'18Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21Q1'22Q2'22 Core NII per share Dividends per share |
Yield & Interest Rate Economic Analysis12(1)Weighted average effective yield is computed by dividing (a) annualized interest income (including interest income resulting from the amortization of fees and discounts) by (b) the weighted average cost of investments.(2)Income yield is calculated as (a) the actual amount earned on earning investments, including interest and fee income but excluding amortization of capitalized fees and discounts.(3)Calculated as (a) effective yield less (b) weighted average cost of debt.(4)The weighted average cost of debt is calculated as (a) the actual amount of expenses incurred on debt obligations divided by (b)the daily average of total debt obligations.(5)The base reference rate represents the weighted average base rate for the quarter applied on the JPM Revolving Credit Facility borrowings. 11.9%11.9%11.7%11.3%11.1%10.4%9.9%9.6%9.9%9.9%9.6%9.5%9.3%9.1%9.2%9.9%11.4%11.5%11.4%11.0%10.7%10.0%9.5%9.1%9.4%9.4%9.1%9.0%8.8%8.6%8.8%9.4%7.1%6.7%6.0%5.7%5.7%5.5%5.2%5.4%6.2%6.1%5.7%5.7%5.7%5.7%5.7%5.9%4.7%5.2%5.7%5.6%5.4%4.9%4.7%4.2%3.7%3.8%3.8%3.8%3.6%3.4%3.5%4.0% 2.3%2.5%2.7%2.6%2.3%2.3%1.7%1.0%0.3%0.2%0.2%0.2%0.1%0.2%0.3%0.9%0.0%2.0%4.0%6.0%8.0%10.0% 12.0%Q3'18Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21Q1'22Q2'22 Effective Yield⁽¹⁾ Income Yield⁽²⁾ Net Investment Spread⁽³⁾ Weighted Average Cost of Debt⁽⁴⁾ Base reference rate⁽⁵⁾ |
Investment Performance Ratings13 Investment Performance Ratings(% of Portfolio at Fair Value)Rating2012201320142015201620172018201920202021Q1 2022Q2 202216.3%2.3%22.2%15.4%11.6%12.0%2100.0%92.4%100.0%90.3%87.0%83.9%80.1%83.3%61.1%74.7%78.5%72.8%37.6%7.9%13.0%16.1%13.6%13.1%15.0%8.9%9.1%14.0%40.0%0.0%0.0%0.6%1.0%0.8%1.2%51.8%0.0%1.3%1.1%- - - 100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%Investment Perfomance Rating DefinitionsRatingDefinition1The portfolio company's risk of loss has been reduced relative to initial expectations.2The portfolio company is meeting initial expectations with regard to performance and outlook.3The investment's risk of loss has increased relative to initial expectation.4Investment principal is at a material risk of not being fully repaid.5Investment is in payment default and has significant risk of not receiving full repayment. |
Net Asset Value Trends14*As a supplement to GAAP financial measures, the Company has provided this non-GAAP measure. The Company believes that this non-GAAP financial measure is useful as it highlights the changes in NAV per share of common stock for each quarter excluding the impact of special dividends that were paid and showsthe pro forma to the Company’s NAV per share after payment of regular distributions.Net Asset Value Per Share 15.4315.5515.5615.4115.00 15.30 15.16 15.04 13.33 13.6313.9815.3515.2315.2315.1014.95 $13.00$13.50$14.00$14.50$15.00$15.50 $16.00 Net Asset Value if No Special Dividends Were Paid* Net Asset Value |
NAV Per Share Bridge15Note: Numbers may not foot due to rounding.Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides usefulinformation to investors and management because it reflects the Company's financial performance excluding (i) the net impact of costs associated with the refinancing of the Company's indebtedness, (ii) the accrual of the capital gains incentive fee attributable to realized and unrealized gains and losses, and (iii) certain excise or other income taxes (net of incentive fees). The presentation of this additional information is not meant tobeconsidered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, can be found by accessing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com ..Source: Company filings Net Realized and Unrealized losses: ($0.02) Dividend Coverage: ($0.03) |
Leverage Migration16 3/31/2022Quarterly Change6/30/2022Outstanding Debt:Outstanding Debt:$473.8($45.1) $428.7Driven by paydowns and dispositions of portfolio investmentsNAV:NAV:$347.9 ($0.5)$347.4 Driven by net realized and unrealized lossesLeverage Ratio:Leverage Ratio:1.36x1.23xNote: Numbers may not foot due to rounding.($ in MM) Sales & Principal Payments101.3$ Acquisition of Investments$66.9Borrowings36.5 Debt Paydown80.7 Sale of Common Stock0.2 Dividend Payment, net of distributions reinvested 7.8 Net Investment Income7.9 Balance Sheet Cash2.7 Other Balance Sheet Changes6.8 Total$155.4Total$155.4 Sources Uses |
0.62x0.57x0.57x0.79x0.75x0.97x1.04x0.86x0.94x1.25x1.08x1.14x1.19x1.38x1.36x1.23x0.00x0.20x0.40x0.60x 0.80x1.00x 1.20x 1.40xQ3'18Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21Q1'22Q2'22 Debt/ EquityNote: As of end of each quarter presented, unless otherwise noted. Not a guarantee of future performance or investment pace.(1)As of June 30, 2022 WHF had $5.5MM of deferred debt issuance costs.(2)Gross leverage excluding cash.(3)Credit Facility bears interest at LIBOR plus 2.35% on outstanding USD denominated borrowings up to $285.0 and SOFR plus 2.50%onborrowings above $285.0.3 Current Debt Outstanding (as of June 30, 2022) ($ in MM)CommitmentOutstanding(1)Weighted Average Interest RateMaturityRevolving Credit Facility(3)$335.0(Accordion Feature up to $375)$238.7L+2.350%payablequarterly20256.000% 2023 Notes$30.0 $30.0 6.00%payable semi-annually;unsecured20235.375% 2025 Notes$40.0$40.05.375%payable semi-annually;unsecured20255.375% 2026 Notes$10.0$10.05.375%payable semi-annually;unsecured20264.000% 2026 Notes$75.0$75.04.000%payable semi-annually;unsecured20265.625% 2027 Notes$10.0 $10.0 5.625%payable semi-annually;unsecured20274.250% 2028 Notes$25.0 $25.0 4.25%payable semi-annually; unsecured2028Total Debt$525.0 $428.74.4% weighted average cost of debtTotal Shareholders’ Equity/Net Assets$347.4NAFunding Profile17 Gross Debt to Equity(2)1.0x-1.35x Target Leverage |
18 Appendix |
Origination Footprint (as of June 30, 2022)Regional Direct Origination FootprintScope of H.I.G. WhiteHorse market coverage results in consistent investment activity levels regardless of market conditionsDedicated direct lending team of over 65 investment and origination professionalsRegional footprint with ~25dedicated direct lending originators in 12 North American officesGlobal platform of approximately 525investment professionals across 18 offices in 9 countries and 3 continents Additional 25 generalist business development professionals dedicated to sourcing proprietary opportunities in the lower to middle market19 |
Note: As of end of each quarter presented, unless otherwise noted. Not a guarantee of future performance or investment pace. As of June 30, 2022 STRS JV had $2.0 of deferred debt issuance costs.(1) Credit Facility bears interest at LIBOR plus 2.35% on outstanding USD denominated borrowings up to $175.0 and SOFR plus 2.50% on borrowings above $175.0.3 ($ in MM)CommitmentOutstanding(1)Weighted Average Interest RateMaturityRevolving Credit Facility(1)$225.0($25 Accordion Feature)$181.7L+2.35%payablequarterly2025Subordinated Note$120.0$120.0L+6.50%payablequarterlyN/ATotal Debt$345.0$301.75.3% weighted average cost of debtEquity$30.0$30.0N/AN/ASTRS JV Key Terms and Funding Profile20 Key TermsWHFand STRS Ohio have committedto provide up to $150 million in subordinated notes and equity to STRS JV, with STRS Ohio providing $50 million and WHF providing $100 million.WHF and STRS Ohio share voting control 50%/50%. Equity ownership of 66.67% WHF and 33.33% STRS An affiliate of H.I.G. provides day-to-day administrative oversight Current Debt Outstanding (as of June 30, 2022)($ in MM) |
21Note: As of June 30, 2022, unless otherwise noted; percentages may not add up to 100% due to rounding. (1)Industry classifications based on GICS. Composition by Borrower (Based on Fair Value) Composition by Industry(1)(Based on Fair Value)100% of STRS JV loans are senior securedSTRS JV Borrower and Industry Diversity 6.0%4.9%4.7%4.6%4.6%4.5%4.5%4.3%4.2%3.6%54.1% Marlin DTC-LS Midco 2, LLC Geo Logic Systems Ltd. Source Code Holdings, LLC RCKC Acquisitions LLC Meta Buyer LLC Drew Foam Companies Inc Cennox, Inc. LMG Holdings, Inc. MEP-TS Midco, LLC Quest Events, LLC Other 11.1%7.5%6.9%6.0%5.9%4.9%4.8%4.6%4.5%4.3%4.2%3.6%31.7% IT Consulting & Other Services Packaged Foods & Meats Technology Hardware, Storage & Peripherals Internet & Direct Marketing Retail Environmental & Facilities Services Data Processing & Outsourced Services Industrial Machinery Pharmaceuticals Building Products Electronic Equipment & Instruments Application Software Diversified Support Services Other |
Origination Pipeline Funnel(1)22(1) Origination Pipeline figures reflect 2014 through June 30, 2022. Three tier sourcing platform, generating meaningful investable opportunities for WhiteHorse Finance Over 60 WhiteHorse deal professionals dedicated to sourcing and underwriting for WHF 20+ person business development team seeks opportunities from H.I.G.’s proprietary database of over 21,000 contacts (telephonic salesforce) With access to H.I.G. Capital’s extensive sourcing network, the Company is able to capitalize on attractive self-originated lower middle market transactions as compared to the broadly syndicated marketDirectly originated loans to lower middle market companies typically generate more attractive risk-adjusted returns relative to larger, broadly syndicated credits Typical Underwriting Process: 3-6 months Opportunities Reviewed Initial Due Diligence Term Sheets Delivered Closed Transactions Deals being sourced by over 500 Investment Professionals across H.I.G.’s platform Total % of Sourced8,325100.0%2,05024.6%5516.6%2062.5% |
23Corporate Data Board of Directors Investment Committee Corporate Officers Research Coverage Corporate Counsel John BolducSami MnaymnehStuart AronsonErik ZwickDechert LLPChairman of the BoardFounder and Co-CEO of H.I.G. CapitalChief Executive Officer Hovde GroupNew York, NY Stuart AronsonAnthony TamerMarco CollazosMelissa WedelCorporate Headquarters DirectorFounder and Co-CEO of H.I.G. CapitalChief Compliance OfficerJ.P. Morgan1450 Brickell Avenue31st FloorJay CarvellStuart AronsonJoyson ThomasMickey SchleienMiami, FL 33131DirectorChief Executive Officer and DirectorChief Financial OfficerLadenburg Thalmann & Co. Inc.Transfer Agent Kevin F. BurkeMark BernierMitchel PennAmerican Stock Transfer &Independent Director Managing Director of WhiteHorse CapitalOppenheimer & Co.Trust Company, LLC New York, NYRick P. FrierJohn BolducRobert DoddIndependent DirectorChairman of the Board, Executive ManagingRaymond JamesInvestor Relations Contact Director of H.I.G. Capital1450 Brickell AvenueRick D. Puckett31st FloorIndependent DirectorJavier CasillasAttention: Investor Relations Managing Director of WhiteHorse CapitalMiami, FL 33131 G. Stacy Smith(305) 381-6999Independent DirectorPankaj Gupta Global Head of Originations and Managing Director of WhiteHorse Capital Independent Registered Public Accounting Firm David IndelicatoCrowe LLP Managing Director of WhiteHorse CapitalNew York, NY Brian SchwartzSecurities Listing Co-President of H.I.G. CapitalNASDAQ: WHFJohn YeagerPlease visit our website at: Managing Director of WhiteHorse Capitalwww.whitehorsefinance.com |
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