UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event
Reported): May 11, 2020
WhiteHorse
Finance, Inc.
(Exact name of registrant as specified
in its charter)
| Delaware |
|
814-00967 |
|
45-4247759 |
| (State or other jurisdiction |
|
(Commission |
|
(IRS Employer |
| of incorporation) |
|
File Number) |
|
Identification Number) |
| 1450 Brickell Avenue, 31st Floor |
|
|
| Miami, Florida |
|
33131 |
| (Address of principal executive offices) |
|
(Zip Code) |
(305) 381-6999
(Registrant’s telephone number,
including area code)
Not Applicable
(Former Name or Former Address, if changed
since last report)
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:
|
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
| Common Stock, par value $0.001 per share |
WHF |
The Nasdaq Stock Market LLC
(Nasdaq Global Select Market) |
| 6.50% Notes due 2025 |
WHFBZ |
The Nasdaq Stock Market LLC
(Nasdaq Global Select Market) |
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 May 11, 2020, WhiteHorse Finance, Inc.
(the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2020.
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 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 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, including
Exhibit 99.1 and Exhibit 99.2 furnished herewith, 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 as a result of changes in economic, market or other conditions, the impact of the COVID-19 pandemic
and its effects on the Company’s and its portfolio companies' results of operations and financial condition, and those factors
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
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: May 11, 2020 |
WHITEHORSE FINANCE, INC. |
| |
|
|
| |
|
|
| |
By: |
/s/ Joyson C. Thomas |
|
| |
|
Joyson C. Thomas |
| |
|
Chief Financial Officer |
Exhibit 99.1
WhiteHorse Finance, Inc. Announces First Quarter
2020 Earnings Results
NEW YORK, NY, May 11, 2020 – WhiteHorse Finance, Inc.
(“WhiteHorse Finance” or the “Company”) (Nasdaq: WHF) today announced its financial results for the quarter
ended March 31, 2020.
First Quarter 2020 Summary Highlights
| · | Net Asset Value of $284.7 million, or $13.86 per share |
| · | Investment portfolio(1)
totaling $557.1 million |
| · | STRS JV investment portfolio totaling $123.0 million |
| · | Gross investment additions(2)
of $26.8 million, including new originations of $26.1 million and $0.7 million of fundings for add-ons to existing investments |
| · | Net investment income of $6.1 million, or $0.297 per share |
| · | Core net investment income of $5.5 million, or $0.267 per share(3) |
| · | First quarter distribution of $0.355 per share |
(1) Includes
investments in WHF STRS Ohio Senior Loan Fund LLC (“STRS JV”), an unconsolidated joint venture, totaling $42.1 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.
Stuart Aronson, WhiteHorse Finance’s
Chief Executive Officer commented, “The COVID-19 pandemic drove a correction within the debt markets that saw lower debt
levels, tighter deal terms, and increased pricing. As a result, we are taking a very conservative view towards adding new assets,
having originated 4 first lien loans during the quarter. Our liquidity position remains strong, and we have been working hand
in hand to support our borrowers through this difficult time. Over the years we’ve taken deliberate action to build our
portfolio upon rigorous underwriting, diversification in our underwriting strategy, a focus on first lien credits, selective sourcing
that avoids aggressive credit terms, a focus on the lower middle market, and diligent management of our liquidity position. We
are confident that staying true to these longstanding principles has prepared us to navigate the current volatility and deliver
for our stakeholders.”
Portfolio and Investment Activity
As of March 31, 2020, the fair value of WhiteHorse Finance’s
investment portfolio was $557.1 million, compared with $589.7 million as of December 31, 2019. The portfolio at March 31, 2020
consisted of 65 positions across 52 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) was $9.3 million with the overall portfolio comprised of approximately
80% first lien secured loans, 10% second lien secured loans, 2% equity and 8% in investments in STRS JV. All loans were substantially
variable-rate investments (primarily indexed to LIBOR), with nearly all performing floating rate investments having interest rate
floors.
WhiteHorse Finance made investments in four new portfolio companies
totaling $26.1 million. Also, the Company added $0.7 million to an existing portfolio company. Proceeds from sales and repayments,
including $0.1 million of net repayments on revolvers, totaled approximately $16.9 million for the quarter, driven by a partial
paydowns from Oasis Legal Finance, LLC of $7.5 million.
In addition to the transactions above, during the three months
ended March 31, 2020, WhiteHorse Finance transferred assets to the STRS JV totaling $28.5 million in exchange for a net investment
in STRS JV of $12.7 million as well as cash proceeds of $15.8 million.
WHF STRS Ohio Senior Loan Fund LLC
As of March 31, 2020, STRS JV’s portfolio totaled $123.0
million, consisted of 14 portfolio companies and had a weighted average effective yield of 7.8% on its portfolio.
Results of Operations
For the three months ended March 31, 2020, net investment income
was approximately $6.1 million, compared with approximately $7.6 million for the same period in the prior year, representing a
decrease of approximately 19.8%. The decrease in net investment income for the year-over-year period is primarily attributable
to lower non-recurring fee and accelerated interest accretion income in the current quarter as well as an increase in interest
expense and management fees recognized for the quarter ended March 31, 2020. The decrease in fee and accretion income as compared
to the prior year is a result of a reduced level of prepayment activity as well as lower volume in nonrecurring, fee-generating
events in the quarter ended March 31, 2020 as compared to the same period in the prior year. The increase in interest expense was
driven by higher borrowing balances and the increase in management fees was due to an increase in the average gross assets for
the first quarter 2020.
For the three months ended March 31, 2020, core net investment
income, a non-GAAP financial measure that excludes capital gains incentive fee accruals, the net effects of excise or other income
taxes related to net realized gains and losses, and the associated costs of refinancing the Company’s indebtedness, was $5.5
million, compared with $7.5 million for the same period in the prior year, representing a decrease of approximately 26.9%.
For the three months ended March 31, 2020, WhiteHorse Finance
reported a net realized and unrealized loss on investments and foreign currency transactions of $27.1 million. This compares with
a net realized and unrealized loss on investments and foreign currency transactions of $0.6 million for the three months ended
March 31, 2019. The decrease in the year-over-year period was primarily attributable to markdowns in the portfolio as a result
of market disruptions caused by the COVID-19 pandemic in the quarter ended March 31, 2020.
WhiteHorse Finance reported a net decrease in net assets resulting
from operations of approximately $21.0 million for the three months ended March 31, 2020, which compares with a net increase of
$7.0 million for the three months ended March 31, 2019.
WhiteHorse Finance’s NAV was $284.7 million, or $13.86
per share, as of March 31, 2020, as compared with $313.0 million, or $15.23 per share, as of December 31, 2019.
Liquidity and Capital Resources
As of March 31, 2020, WhiteHorse Finance had cash and cash equivalents
of $28.1 million, as compared with $27.5 million as of December 31, 2019, inclusive of restricted cash. As of March 31, 2020, the
Company also had $19.1 million of undrawn capacity under its revolving credit facility.
Distributions
On March 17, 2020, the Company declared a distribution of $0.355
per share for the quarter ended March 31, 2020, consistent for the thirtieth consecutive quarter since the Company’s IPO.
The distribution was paid on April 3, 2020 to shareholders of record as of March 27, 2020.
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
first quarter results at 2:30 p.m. ET on Monday, May 11, 2020. To access the teleconference, please dial 706-758-9224 (domestic
and international) approximately 10 minutes before the teleconference’s scheduled start time and reference ID # 5258636.
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 May 18, 2020. The teleconference
replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID #5258636. 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 $37 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.
(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 refinance any of its indebtedness for the quarters ended
March 31, 2020 and March 31, 2019.
The following table provides a reconciliation of net investment
income to core net investment income for the three months ended March 31, 2020 and March 31, 2019 (in thousands, except per share
data):
| | |
March 31, 2020 | | |
March 31, 2019 | |
| | |
Amount | | |
Per Share
Amounts | | |
Amount | | |
Per Share
Amounts | |
| Net investment income | |
$ | 6,102 | | |
$ | 0.297 | | |
$ | 7,611 | | |
$ | 0.370 | |
| Net impact of costs associated with refinancing of indebtedness | |
| - | | |
| - | | |
| - | | |
| - | |
| Accrual for capital gains incentive fee | |
| (626 | ) | |
| (0.030 | ) | |
| (121 | ) | |
| (0.005 | ) |
| Net impact of excise tax expense related to net realized gains and losses | |
| - | | |
| - | | |
| - | | |
| - | |
| Core net investment income | |
$ | 5,476 | | |
$ | 0.267 | | |
$ | 7,490 | | |
$ | 0.365 | |
| | |
| | | |
| | | |
| | | |
| | |
WhiteHorse Finance, Inc.
Consolidated Statements of Assets and
Liabilities
(in thousands, except share and per
share data)
| | |
March 31, 2020 | | |
December 31, 2019 | |
| | |
(Unaudited) | | |
| |
| Assets | |
| | | |
| | |
| Investments, at fair value | |
| | | |
| | |
| Non-controlled/non-affiliate company investments | |
$ | 507,384 | | |
$ | 546,744 | |
| Non-controlled affiliate company investments | |
| 7,650 | | |
| 9,651 | |
| Controlled affiliate company investments | |
| 42,081 | | |
| 33,293 | |
| Total investments, at fair value (amortized cost $593,304 and $597,725, respectively) | |
| 557,115 | | |
| 589,688 | |
| Cash and cash equivalents | |
| 16,452 | | |
| 4,294 | |
| Restricted cash and cash equivalents | |
| 11,497 | | |
| 23,252 | |
| Restricted foreign currency (cost of $123) | |
| 116 | | |
| — | |
| Interest and dividend receivable | |
| 6,340 | | |
| 6,010 | |
| Amounts receivable on unsettled investment transactions | |
| 74 | | |
| 360 | |
| Prepaid expenses and other receivables | |
| 354 | | |
| 7,620 | |
| Total assets | |
$ | 591,948 | | |
$ | 631,224 | |
| | |
| | | |
| | |
| Liabilities | |
| | | |
| | |
| Debt | |
$ | 291,129 | | |
$ | 298,924 | |
| Distributions payable | |
| 7,294 | | |
| 7,294 | |
| Management and incentive fees payable | |
| 6,191 | | |
| 8,290 | |
| Interest payable | |
| 1,127 | | |
| 1,674 | |
| Accounts payable and accrued expenses | |
| 1,340 | | |
| 1,944 | |
| Amounts payable on unsettled investment transactions | |
| 28 | | |
| — | |
| Unrealized depreciation on foreign currency forward contracts | |
| 1 | | |
| — | |
| Advances received from unfunded credit facilities | |
| 133 | | |
| 143 | |
| Total liabilities | |
| 307,243 | | |
| 318,269 | |
| | |
| | | |
| | |
| Commitments and contingencies | |
| | | |
| | |
| | |
| | | |
| | |
| Net assets | |
| | | |
| | |
| Common stock, 20,546,032 and 20,546,032 shares issued and outstanding, par value $0.001 per share, respectively, and 100,000,000 authorized | |
| 21 | | |
| 21 | |
| Paid-in capital in excess of par | |
| 300,744 | | |
| 300,744 | |
| Accumulated earnings (deficit) | |
| (16,060 | ) | |
| 12,190 | |
| Total net assets | |
| 284,705 | | |
| 312,955 | |
| Total liabilities and total net assets | |
$ | 591,948 | | |
$ | 631,224 | |
| | |
| | | |
| | |
| Number of shares outstanding | |
| 20,546,032 | | |
| 20,546,032 | |
| Net asset value per share | |
$ | 13.86 | | |
$ | 15.23 | |
WhiteHorse Finance, Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per
share data)
| | |
Three months ended March 31, | |
| | |
2020 | | |
2019 | |
| Investment income | |
| | | |
| | |
| From non-controlled/non-affiliate company investments | |
| | | |
| | |
| Interest income | |
$ | 13,140 | | |
$ | 14,492 | |
| Fee income | |
| 291 | | |
| 1,157 | |
| Dividend income | |
| 49 | | |
| — | |
| From non-controlled affiliate company investments | |
| | | |
| | |
| Dividend income | |
| 275 | | |
| 275 | |
| From controlled affiliate company investments | |
| | | |
| | |
| Interest income | |
| 625 | | |
| — | |
| Dividend income | |
| 153 | | |
| — | |
| Total investment income | |
| 14,533 | | |
| 15,924 | |
| | |
| | | |
| | |
| Expenses | |
| | | |
| | |
| Interest expense | |
| 3,668 | | |
| 3,073 | |
| Base management fees | |
| 3,092 | | |
| 2,589 | |
| Performance-based incentive fees | |
| 441 | | |
| 1,751 | |
| Administrative service fees | |
| 171 | | |
| 158 | |
| General and administrative expenses | |
| 881 | | |
| 682 | |
| Total expenses, before fees waived | |
| 8,253 | | |
| 8,253 | |
| Base management fee waived | |
| — | | |
| (177 | ) |
| Total expenses, net of fees waived | |
| 8,253 | | |
| 8,076 | |
| Net investment income before excise tax | |
| 6,280 | | |
| 7,848 | |
| Excise tax | |
| 178 | | |
| 237 | |
| Net investment income after excise tax | |
| 6,102 | | |
| 7,611 | |
| | |
| | | |
| | |
| Realized and unrealized gains (losses) on investments and foreign currency transactions | |
| | | |
| | |
| Net realized gains (losses) | |
| | | |
| | |
| Non-controlled/non-affiliate company investments | |
| 510 | | |
| (2,018 | ) |
| Non-controlled affiliate company investments | |
| — | | |
| — | |
| Foreign currency transactions | |
| (3 | ) | |
| — | |
| Foreign currency forward contracts | |
| 6 | | |
| — | |
| Net realized gains (losses) | |
| 513 | | |
| (2,018 | ) |
| Net change in unrealized appreciation (depreciation) | |
| | | |
| | |
| Non-controlled/non-affiliate company investments | |
| (22,196 | ) | |
| 1,988 | |
| Non-controlled affiliate company investments | |
| (2,001 | ) | |
| (576 | ) |
| Controlled affiliate company investments | |
| (3,953 | ) | |
| — | |
| Translation of assets and liabilities in foreign currencies | |
| 580 | | |
| | |
| Foreign currency forward contracts | |
| (1 | ) | |
| — | |
| Net change in unrealized appreciation (depreciation) | |
| (27,571 | ) | |
| 1,412 | |
| Net realized and unrealized losses on investments | |
| (27,058 | ) | |
| (606 | ) |
| Net increase (decrease) in net assets resulting from operations | |
$ | (20,956 | ) | |
$ | 7,005 | |
| | |
| | | |
| | |
| Per Common Share Data | |
| | | |
| | |
| Basic and diluted earnings (loss) per common share | |
$ | (1.01 | ) | |
$ | 0.34 | |
| Dividends and distributions declared per common share | |
$ | 0.36 | | |
$ | 0.36 | |
| Basic and diluted weighted average common shares outstanding | |
| 20,546,032 | | |
| 20,546,032 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
(Unaudited)
March 31, 2020
(in thousands)
| Investment Type(1) | |
Spread
Above
Index(2) | |
Interest
Rate(3) | |
Acquisition
Date(10) | |
Maturity
Date | |
Principal/
Share
Amount | | |
Amortized
Cost | | |
Fair
Value(11) | | |
Fair Value
As A
Percentage
of Net
Assets | |
| North America | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Debt Investments | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Advertising | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Fluent, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 7.00% | |
7.99% | |
03/26/18 | |
03/27/23 | |
| 8,801 | | |
$ | 8,801 | | |
$ | 8,713 | | |
| 3.06 | % |
| | |
(0.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Agricultural & Farm Machinery | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Bad Boy Mowers Acquisition, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 5.75% | |
6.75% | |
12/19/19 | |
12/06/25 | |
| 10,359 | | |
| 10,061 | | |
| 9,530 | | |
| 3.35 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Air Freight & Logistics | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Access USA Shipping, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 8.00% | |
9.00% | |
02/08/19 | |
02/08/24 | |
| 5,578 | | |
| 5,514 | | |
| 5,467 | | |
| 1.92 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Application Software | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Newscycle Solutions, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 7.00% | |
8.45% | |
06/14/19 | |
12/29/22 | |
| 5,195 | | |
| 5,115 | | |
| 4,832 | | |
| 1.70 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Revolving Loan | |
L+ 7.00% | |
8.34% | |
06/14/19 | |
12/29/22 | |
| 301 | | |
| 298 | | |
| 280 | | |
| 0.10 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 5,496 | | |
| 5,413 | | |
| 5,112 | | |
| 1.80 | |
| Automotive Retail | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Team Car Care Holdings, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan(12) | |
base rate+ 7.99% | |
9.88% | |
02/26/18 | |
02/23/23 | |
| 16,607 | | |
| 16,390 | | |
| 15,942 | | |
| 5.60 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| BW Gas & Convenience Holdings, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.25% | |
7.18% | |
11/15/19 | |
11/18/24 | |
| 8,394 | | |
| 8,079 | | |
| 7,848 | | |
| 2.76 | |
| | |
(0.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 25,001 | | |
| 24,469 | | |
| 23,790 | | |
| 8.36 | |
| Broadcasting | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Alpha Media, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.00% | |
7.45% | |
08/14/18 | |
02/25/22 | |
| 5,330 | | |
| 5,237 | | |
| 5,090 | | |
| 1.79 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Rural Media Group, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 7.66% | |
9.44% | |
12/29/17 | |
12/29/22 | |
| 7,133 | | |
| 7,057 | | |
| 6,741 | | |
| 2.37 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 12,463 | | |
| 12,294 | | |
| 11,831 | | |
| 4.16 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
(Unaudited) - (continued)
March 31, 2020
(in thousands)
| Investment Type(1) | |
Spread
Above
Index(2) | |
Interest
Rate(3) | |
Acquisition
Date(10) | |
Maturity
Date | |
Principal/
Share
Amount | | |
Amortized
Cost | | |
Fair
Value(11) | | |
Fair Value
As A
Percentage
of Net
Assets | |
| Cable & Satellite | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Bulk Midco, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 7.27% | |
9.19% | |
06/08/18 | |
06/08/23 | |
| 15,000 | | |
$ | 14,857 | | |
$ | 13,950 | | |
| 4.90 | % |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Communications Equipment | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Sorenson Communications, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.50% | |
7.95% | |
03/15/19 | |
04/29/24 | |
| 4,744 | | |
| 4,628 | | |
| 4,489 | | |
| 1.58 | |
| | |
(0.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Data Processing & Outsourced Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| FPT Operating Company, LLC/ | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| TLabs Operating Company, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 8.25% | |
9.83% | |
12/23/16 | |
06/07/24 | |
| 24,751 | | |
| 24,542 | | |
| 23,266 | | |
| 8.17 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Geo Logic Systems Ltd.(5) | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan(13) | |
C +6.25% | |
7.52% | |
12/19/19 | |
12/19/24 | |
| 6,838 | | |
| 5,115 | | |
| 4,420 | | |
| 1.55 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Revolving Loan(7)(13) | |
C +6.25% | |
7.52% | |
12/19/19 | |
12/19/24 | |
| - | | |
| - | | |
| (17 | ) | |
| (0.01 | ) |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 31,589 | | |
| 29,657 | | |
| 27,669 | | |
| 9.71 | |
| Department Stores | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Mills Fleet Farm Group, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.25% | |
7.84% | |
10/24/18 | |
10/24/24 | |
| 14,874 | | |
| 14,582 | | |
| 13,387 | | |
| 4.70 | |
| | |
(1.00% Floor) | |
(0.75%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Distributors | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Crown Brands, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 8.00% | |
9.50% | |
01/28/19 | |
01/25/24 | |
| 5,727 | | |
| 5,617 | | |
| 5,206 | | |
| 1.83 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Delayed Draw Loan(7) | |
L+ 8.00% | |
9.50% | |
01/28/19 | |
01/25/24 | |
| - | | |
| - | | |
| (61 | ) | |
| (0.02 | ) |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 5,727 | | |
| 5,617 | | |
| 5,145 | | |
| 1.81 | |
| Diversified Chemicals | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Sklar Holdings, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 7.00% | |
9.00% | |
11/13/19 | |
05/13/23 | |
| 8,903 | | |
| 8,722 | | |
| 8,547 | | |
| 3.00 | |
| | |
(1.00% Floor) | |
(1.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Delayed Draw Loan(7) | |
L+ 7.00% | |
9.00% | |
11/13/19 | |
05/13/20 | |
| - | | |
| - | | |
| (61 | ) | |
| (0.02 | ) |
| | |
(1.00% Floor) | |
(1.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 8,903 | | |
| 8,722 | | |
| 8,486 | | |
| 2.98 | |
| Diversified Support Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| ImageOne Industries, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 10.00% | |
11.00% | |
01/11/18 | |
01/11/23 | |
| 7,239 | | |
| 7,077 | | |
| 6,805 | | |
| 2.39 | |
| | |
(1.00% Floor) | |
(4.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Revolving Loan(4)(7) | |
L+ 10.00% | |
11.45% | |
07/22/19 | |
12/12/22 | |
| 135 | | |
| 135 | | |
| 127 | | |
| 0.04 | |
| | |
(1.00% Floor) | |
(4.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| NNA Services, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 7.00% | |
8.45% | |
10/16/18 | |
10/16/23 | |
| 9,823 | | |
| 9,684 | | |
| 9,626 | | |
| 3.38 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 17,197 | | |
| 16,896 | | |
| 16,558 | | |
| 5.81 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
(Unaudited) - (continued)
March 31, 2020
(in thousands)
| Investment Type(1) | |
Spread
Above
Index(2) | |
Interest
Rate(3) | |
Acquisition
Date(10) | |
Maturity
Date | |
Principal/
Share
Amount | | |
Amortized
Cost | | |
Fair
Value(11) | | |
Fair Value
As A
Percentage
of Net
Assets | |
| Education Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| EducationDynamics, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 7.50% | |
9.15% | |
11/26/19 | |
11/26/24 | |
| 11,603 | | |
$ | 11,387 | | |
$ | 11,487 | | |
| 4.03 | % |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Food Retail | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| AG Kings Holdings, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan(8) | |
P+ 11.00% | |
14.25% | |
08/10/16 | |
08/10/21 | |
| 13,250 | | |
| 12,837 | | |
| 6,625 | | |
| 2.33 | |
| | |
(0.75% Floor) | |
(2.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Health Care Facilities | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Grupo HIMA San Pablo, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan A(4) | |
L+ 9.00% | |
10.76% | |
05/15/19 | |
04/30/19 | |
| 3,855 | | |
| 3,855 | | |
| 2,891 | | |
| 1.02 | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan B(4) | |
L+ 9.00% | |
10.76% | |
02/01/13 | |
04/30/19 | |
| 13,511 | | |
| 13,511 | | |
| 10,133 | | |
| 3.56 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Second Lien Secured Term Loan(4)(8) | |
N/A | |
15.75% | |
02/01/13 | |
07/31/18 | |
| 1,028 | | |
| 1,024 | | |
| - | | |
| - | |
| | |
| |
(2.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 18,394 | | |
| 18,390 | | |
| 13,024 | | |
| 4.58 | |
| Health Care Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| CHS Therapy, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan A | |
L+ 8.50% | |
10.00% | |
06/14/19 | |
06/14/24 | |
| 7,566 | | |
| 7,446 | | |
| 7,302 | | |
| 2.56 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Lab Logistics, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.50% | |
7.56% | |
10/16/19 | |
09/25/23 | |
| 106 | | |
| 106 | | |
| 103 | | |
| 0.04 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Delayed Draw Loan(7) | |
L+ 6.50% | |
8.44% | |
10/16/19 | |
09/25/23 | |
| 5,276 | | |
| 5,241 | | |
| 5,104 | | |
| 1.79 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| PMA Holdco, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 10.00% | |
11.45% | |
06/28/18 | |
06/28/23 | |
| 12,902 | | |
| 12,684 | | |
| 12,708 | | |
| 4.46 | |
| | |
(1.00% Floor) | |
(2.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 25,850 | | |
| 25,477 | | |
| 25,217 | | |
| 8.85 | |
| Home Furnishings | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Sure Fit Home Products, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 9.75% | |
11.21% | |
10/26/18 | |
07/13/22 | |
| 5,250 | | |
| 5,185 | | |
| 4,883 | | |
| 1.71 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Human Resources & Employment Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Pluto Acquisition Topco, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.31% | |
8.08% | |
01/31/19 | |
01/31/24 | |
| 12,291 | | |
| 12,102 | | |
| 12,045 | | |
| 4.23 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Interactive Media & Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| What If Media Group, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.50% | |
7.50% | |
10/02/19 | |
10/02/24 | |
| 12,838 | | |
| 12,606 | | |
| 12,581 | | |
| 4.42 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Internet & Direct Marketing Retail | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Potpourri Group, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 8.25% | |
9.77% | |
07/03/19 | |
07/03/24 | |
| 18,644 | | |
| 18,289 | | |
| 17,898 | | |
| 6.29 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Investment Banking & Brokerage | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Arcole Acquisition Corp(5) | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan A (4)(8) | |
L+ 10.25% | |
11.86% | |
11/29/18 | |
11/30/23 | |
| 5,231 | | |
| 5,159 | | |
| 3,923 | | |
| 1.38 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan B (4)(8) | |
L+ 16.50% | |
18.11% | |
11/29/18 | |
11/30/23 | |
| 1,812 | | |
| 1,785 | | |
| 1,538 | | |
| 0.54 | |
| | |
(1.00% Floor) | |
(1.50%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| JVMC Holdings Corp. (f/k/a RJO Holdings Corp) | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.50% | |
7.50% | |
02/28/19 | |
02/28/24 | |
| 15,538 | | |
| 15,416 | | |
| 15,227 | | |
| 5.35 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 22,581 | | |
| 22,360 | | |
| 20,688 | | |
| 7.27 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
(Unaudited) - (continued)
March 31, 2020
(in thousands)
| Investment Type(1) | |
Spread
Above
Index(2) | |
Interest
Rate(3) | |
Acquisition
Date(10) | |
Maturity
Date | |
Principal/
Share
Amount | | |
Amortized
Cost | | |
Fair
Value(11) | | |
Fair Value
As A
Percentage
of Net
Assets | |
| IT Consulting & Other Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| AST-Applications Software Technology LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 8.00% | |
9.00% | |
01/10/17 | |
01/10/23 | |
| 4,226 | | |
$ | 4,181 | | |
$ | 4,141 | | |
| 1.45 | % |
| | |
(1.00% Floor) | |
(1.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Leisure Facilities | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Honors Holdings, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.83% | |
7.83% | |
09/06/19 | |
09/06/24 | |
| 9,405 | | |
| 9,272 | | |
| 8,118 | | |
| 2.85 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Delayed Draw Loan | |
L+ 6.50% | |
8.44% | |
09/06/19 | |
09/06/24 | |
| 4,662 | | |
| 4,619 | | |
| 4,023 | | |
| 1.41 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Lift Brands, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan(8) | |
L+ 8.00% | |
9.45% | |
04/16/18 | |
04/16/23 | |
| 10,552 | | |
| 10,398 | | |
| 8,425 | | |
| 2.96 | |
| | |
(1.00% Floor) | |
(1.00%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Revolving Loan(7)(8) | |
P+ 6.00% | |
9.25% | |
04/16/18 | |
04/16/23 | |
| 376 | | |
| 371 | | |
| 229 | | |
| 0.08 | |
| | |
(1.99% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 24,995 | | |
| 24,660 | | |
| 20,795 | | |
| 7.30 | |
| Office Services & Supplies | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Empire Office, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.75% | |
8.25% | |
04/12/19 | |
04/12/24 | |
| 12,065 | | |
| 11,871 | | |
| 11,703 | | |
| 4.11 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Other Diversified Financial Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Sigue Corporation | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Second Lien Secured Term Loan(4) | |
L+ 10.55% | |
11.82% | |
12/27/13 | |
04/30/20 | |
| 24,793 | | |
| 24,793 | | |
| 24,297 | | |
| 8.53 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Packaged Foods & Meats | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Lenny & Larry's, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 7.95% | |
8.95% | |
05/15/18 | |
05/15/23 | |
| 12,282 | | |
| 12,131 | | |
| 11,496 | | |
| 4.04 | |
| | |
(1.00% Floor) | |
(1.18%PIK) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Property & Casualty Insurance | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Policy Services Company, LLC(5) | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.25% | |
7.32% | |
03/06/20 | |
05/31/24 | |
| 6,476 | | |
| 6,155 | | |
| 6,281 | | |
| 2.21 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Research & Consulting Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Nelson Worldwide, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 9.25% | |
11.10% | |
01/09/18 | |
01/09/23 | |
| 13,381 | | |
| 13,195 | | |
| 13,046 | | |
| 4.58 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| ALM Media, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.50% | |
7.95% | |
11/25/19 | |
11/25/24 | |
| 15,553 | | |
| 15,264 | | |
| 14,668 | | |
| 5.15 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 28,934 | | |
| 28,459 | | |
| 27,714 | | |
| 9.73 | |
| Restaurants | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| LS GFG Holdings Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.00% | |
6.99% | |
11/30/18 | |
11/19/25 | |
| 10,211 | | |
| 9,963 | | |
| 8,577 | | |
| 3.01 | |
| | |
(0.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Specialized Consumer Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| True Blue Car Wash, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 8.12% | |
9.12% | |
10/17/19 | |
10/17/24 | |
| 4,433 | | |
| 4,353 | | |
| 4,300 | | |
| 1.51 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Delayed Draw Loan(7) | |
L+ 8.12% | |
9.12% | |
10/17/19 | |
10/17/24 | |
| 672 | | |
| 665 | | |
| 623 | | |
| 0.22 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| 5,105 | | |
| 5,018 | | |
| 4,923 | | |
| 1.73 | |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
(Unaudited) - (continued)
March 31, 2020
(in thousands)
| Investment Type(1) | |
Spread
Above
Index(2) | |
Interest
Rate(3) | |
Acquisition
Date(10) | |
Maturity
Date | |
Principal/
Share
Amount | | |
Amortized
Cost | | |
Fair
Value(11) | | |
Fair Value
As A
Percentage
of Net
Assets | |
| Specialty Chemicals | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Flexitallic Group SAS | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.50% | |
7.57% | |
10/28/19 | |
10/29/26 | |
| 11,721 | | |
$ | 11,443 | | |
$ | 10,549 | | |
| 3.71 | % |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Specialized Finance | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Golden Pear Funding Assetco, LLC(5) | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Second Lien Secured Term Loan | |
L+ 10.50% | |
12.08% | |
09/20/18 | |
03/20/24 | |
| 17,500 | | |
| 17,247 | | |
| 17,238 | | |
| 6.05 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Oasis Legal Finance, LLC(5) | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Second Lien Secured Term Loan | |
L+ 10.75% | |
12.33% | |
09/09/16 | |
03/09/22 | |
| 12,500 | | |
| 12,412 | | |
| 12,250 | | |
| 4.30 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| WHF STRS Ohio Senior Loan Fund LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Subordinated Note(4)(5)(7)(9)(14) | |
L+ 6.50% | |
7.49% | |
07/19/19 | |
N/A | |
| 36,537 | | |
| 36,537 | | |
| 36,537 | | |
| 12.83 | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 66,537 | | |
| 66,196 | | |
| 66,025 | | |
| 23.18 | |
| Systems Software | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Vero Parent, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.00% | |
7.58% | |
11/06/19 | |
08/16/24 | |
| 16,510 | | |
| 14,959 | | |
| 14,034 | | |
| 4.93 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Technology Hardware, Storage & Peripherals | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| PS Lightwave, Inc. | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.75% | |
8.25% | |
03/09/20 | |
03/10/25 | |
| 8,005 | | |
| 7,847 | | |
| 7,846 | | |
| 2.76 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Delayed Draw Loan(7) | |
L+ 6.75% | |
8.25% | |
03/09/20 | |
03/10/25 | |
| - | | |
| - | | |
| - | | |
| - | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Source Code Midco, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 8.25% | |
9.69% | |
05/04/18 | |
05/04/23 | |
| 23,255 | | |
| 22,841 | | |
| 22,790 | | |
| 8.00 | |
| | |
(1.00% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| 31,260 | | |
| 30,688 | | |
| 30,636 | | |
| 10.76 | |
| Trading Companies & Distributors | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Vessco Holdings, LLC | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| First Lien Secured Term Loan | |
L+ 6.50% | |
8.20% | |
08/22/19 | |
08/22/24 | |
| 18,947 | | |
| 18,615 | | |
| 18,568 | | |
| 6.52 | |
| | |
(1.50% Floor) | |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Total Debt Investments | |
| |
| |
| |
| |
| 580,495 | | |
| 569,276 | | |
| 538,314 | | |
| 189.06 | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Equity Investments | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Diversified Support Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Quest Events, LLC Preferred Units(4) | |
N/A | |
N/A | |
12/28/18 | |
12/08/25 | |
| 317 | | |
| 317 | | |
| 171 | | |
| 0.06 | |
| ImageOne Industries, LLC Common A Units(4) | |
N/A | |
N/A | |
09/20/19 | |
N/A | |
| 149 | | |
| - | | |
| 45 | | |
| 0.02 | |
| | |
| |
| |
| |
| |
| 466 | | |
| 317 | | |
| 216 | | |
| 0.08 | |
| Health Care Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Lab Logistics Preferred Units(4) | |
N/A | |
N/A | |
10/29/19 | |
N/A | |
| 2 | | |
| 857 | | |
| 834 | | |
| 0.29 | |
| PMA Holdco, LLC Warrants(4) | |
N/A | |
N/A | |
06/28/18 | |
06/28/28 | |
| 8 | | |
| - | | |
| 454 | | |
| 0.16 | |
| | |
| |
| |
| |
| |
| 10 | | |
| 857 | | |
| 1,288 | | |
| 0.45 | |
| Other Diversified Financial Services | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| RCS Creditor Trust Class B Units(4)(6) | |
N/A | |
N/A | |
10/01/17 | |
N/A | |
| 143 | | |
| - | | |
| - | | |
| - | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| SFS Global Holding Company Warrants(4) | |
N/A | |
N/A | |
06/28/18 | |
12/28/25 | |
| - | | |
| - | | |
| - | | |
| - | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Sigue Corporation Warrants(4) | |
N/A | |
N/A | |
06/28/18 | |
12/28/25 | |
| 22 | | |
| 2,890 | | |
| 3,277 | | |
| 1.15 | |
| | |
| |
| |
| |
| |
| 165 | | |
| 2,890 | | |
| 3,277 | | |
| 1.15 | |
| Specialized Finance | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| NMFC Senior Loan Program I LLC Units (4)(5)(6) | |
N/A | |
N/A | |
08/13/14 | |
08/31/21 | |
| 10,000 | | |
| 10,030 | | |
| 7,650 | | |
| 2.69 | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| WHF STRS Ohio Senior Loan Fund LLC(4)(5)(7)(14) | |
N/A | |
N/A | |
07/19/19 | |
N/A | |
| 9,134 | | |
| 9,134 | | |
| 5,544 | | |
| 1.95 | |
| | |
| |
| |
| |
| |
| 19,134 | | |
| 19,164 | | |
| 13,194 | | |
| 4.64 | |
| Trading Companies & Distributors | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Vessco Holdings, LLC(4) | |
N/A | |
N/A | |
08/22/19 | |
N/A | |
| 489 | | |
| 800 | | |
| 757 | | |
| 0.27 | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Trucking | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Europcar Mobility Group(4)(5) | |
N/A | |
N/A | |
10/31/19 | |
12/31/22 | |
| - | | |
| - | | |
| 69 | | |
| 0.02 | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Total Equity Investments | |
| |
| |
| |
| |
| 20,264 | | |
| 24,028 | | |
| 18,801 | | |
| 6.61 | |
| | |
| |
| |
| |
| |
| | | |
| | | |
| | | |
| | |
| Total Investments | |
| |
| |
| |
| |
| 600,759 | | |
$ | 593,304 | | |
$ | 557,115 | | |
| 195.67 | % |
A summary of outstanding financial instruments at March 31,
2020 is as follows:
Forward Currency Contracts
| Counterparty | |
Currency to
be sold | |
Currency to
be purchased | |
Settlement
date | |
Unrealized
appreciation ($) | | |
Unrealized
depreciation ($) | |
| JP Morgan Chase Bank | |
C$ 188 CAD | |
$ 133 USD | |
06/30/2020 | |
$ | - | | |
$ | (1 | ) |
| | |
| |
| |
| |
$ | - | | |
$ | (1 | ) |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
(Unaudited) - (continued)
March 31, 2020
(in thousands)
| (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 Canadian Dollar Offered Rate (“CDOR” or “C”) or the U.S. Prime Rate as published by the Wall Street Journal (“Prime” or “P”). The one, three and six-month LIBOR were 1.0%, 1.5% and 1.2%, respectively, as of March 31, 2020. The Prime was 3.3% as of March 31, 2020. The CDOR was 1.2% as of March 31, 2020. |
| (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 84% 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 March 31, 2020. |
| (8) |
The investment is on non-accrual status. |
| (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 196% of the Company’s net assets or 96% 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 Spread Above Index and Interest Rate presented represent the weighted average of both contracts. |
| (13) |
Principal amount is denominated 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. |
Contacts
Stuart Aronson
WhiteHorse Finance, Inc.
212-506-0500
[email protected]
or
Joyson Thomas
WhiteHorse Finance, Inc.
305-379-2322
[email protected]
or
Sean Silva
Prosek Partners
646-818-9122
[email protected]
Source: WhiteHorse Finance, Inc.
Exhibit 99.2
Earnings Presentation Quarter Ended March 31, 2020 WhiteHorse Finance, Inc. NASDAQ: WHF (Common Stock) NASDAQ: WHFBZ (6.50% Notes due 2025)
1 References 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 a n o ffer to enter into any transaction with the Company or any of its affiliates. Investors are advised to consider carefully the Company’s investment objectives, r isk s, 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 Fo rm 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 car efully before investing in the Company’s securities. The information in this presentation is not complete and may be changed. This presentation is not an of fer to 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 Bri cke ll 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 affecti ng 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 C ompany’s and its portfolio companies’ results of operations and financial condition; the Company’s business prospects and the prospects of its prospecti ve portfolio companies; the impact of investments that the Company expects to make; the impact of increased competition; the Company’s contractual arrangements and relationships with third parties; the dependence of the Company’s future success on the general economy and its impact on the industries in which the Com pany invests; the ability of the Company’s prospective portfolio companies to achieve their objectives; the relative and absolute performance of the Company’s in vestment adviser; the Company’s expected financings and investments; the adequacy of the Company’s cash resources and working capital; the timing o f c ash 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,” “migh t,” “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 of this 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. Al though the Company undertakes no obligation to revise or update any forward - looking statements, whether as a result of new information, future events or other wise, 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 q uarterly reports on Form 10 - Q we file with the SEC. Important Information and Forward Looking Statements
2 WhiteHorse Finance Snapshot Company: WhiteHorse Finance, Inc. (“ WhiteHorse Finance” or the “Company”) : Equity Ticker: NASDAQ: WHF Market Cap: $191.7MM (1) NAV / Share: $13.86 Portfolio Fair Value: $557.1MM Current Dividend Yield: 15.2% (1)(2) ; consistent quarterly dividends of $0.355 per share since 2012 IPO (1) Based on May 8, 2020 share price of $9.33. (2) Based on LTM annualized dividend rate, excluding special dividends, relative to closing share price. External Manager: Affiliate of H.I.G. Capital, LLC (“H.I.G. Capital” or “H.I.G.”)
Overview of WhiteHorse Finance, Inc. 3 Portfolio at Fair Value ($MM) NAV + Cumulative Dividends per share Note: As of March 31 st of each respective year presented, unless otherwise noted. (1) Based on total capital commitments managed by H.I.G. Capital and affiliates. (2) Represents number of companies not total number of investments. (3) Based on fair value. Does not include investments in STRS JV. Source: Company filings ▪ WhiteHorse Finance, Inc. is a publicly listed Business Development Company (“BDC”) that completed its IPO in December 2012 ▪ WhiteHorse Finance’s investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, a leading glo ba l alternative asset manager with more than $37Bn of capital under management (1) ▪ Principally focused on originating senior secured loans to performing lower middle market companies with individual enterpris e v alues generally between $50MM and $350MM ▪ Diversified investment portfolio totaling $557.1MM as of March 31, 2020 ▪ Investments across 52 (2) portfolio companies as of March 31, 2020 − Average Investment Size (3) : $8.2MM (Average Debt Investment Size (3) : $9.3MM) − Largest Portfolio Company Investment (3) : $27.6MM ▪ Invested $1,615MM in 132 transactions since December 2012 IPO ▪ The Company and State Teachers Retirement System of Ohio (“STRS Ohio”), a public pension fund established under Ohio law, par tne red to create WHF STRS Ohio Senior Loan Fund, LLC (“STRS JV”), a joint venture formed to invest in directly originated, senior secured first an d s econd lien term loans. $15.44 $16.69 $17.99 $17.70 $19.42 $25.48 $23.98 $21.19 $24.46 $15.30 $15.16 $15.04 $13.33 $13.63 $13.98 $15.35 $15.23 $13.86 $0.11 $1.53 $2.95 $4.37 $5.79 $7.21 $8.63 $10.25 $10.60 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Net asset value Cumulative dividends paid (including special dividends)
4 Overview of WhiteHorse Finance, Inc. (continued) Note: As of March 31, 2020 unless otherwise noted. (1) Reflects life - to - date since IPO, and may exclude follow - on transactions and investments in STRS JV made via asset transfers in - k ind. (2) Across 63 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 port folio, including equities and investments in STRS JV, as of March 31, 2020, is 9.1%. Weighted average effective yield is computed by dividing (a) annualized interest income (including interest in com e resulting from the amortization of fees and discounts) by (b) the weighted average cost of investments. (4) Measured at origination based on WHF’s underwriting leverage. Does not include investments in STRS JV. (5) Does not include investments in STRS JV. ▪ Generate attractive risk - adjusted return in all market conditions by originating and investing in senior secured loans to performing lower middle market companies and leveraging the knowledge of H.I.G. Capital ▪ Differentiated proprietary deal flow from over 40 dedicated deal professionals sourced through direct coverage of financial sponsors and intermediaries as of March 31, 2020 ▪ Rigorous credit process focused on fundamental analysis with emphasis on downside protection and cash flow visibility ▪ 11 - 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 $4MM to $20MM Summary Stats: Invested Capital since IPO: $1,615MM (1) Number of Investments Made: ~ 132 (1) Average Investment Size: ~$8.2 MM (2) All - in Yield : 9.9% (3) Net Debt / EBITDA of Current Portfolio Companies: ~3.7x (4) Secured Debt as a % of Total Debt : 100% (5) Investment Strategy
5 Summary of Quarterly Results Fiscal Quarter Highlights ▪ Total investments at fair value decreased to $557.1 million in Q1 2020 as compared to $589.7 million in Q4 2019. ▪ The Company made investments in four new portfolio companies for gross deployments of $26.1 million as well as funded one add - on investment for $0.7 million. ▪ The Company transferred four investments to the STRS JV totaling $28.5 million and had additional sales and principal repayme nts of $16.9 million. ▪ The weighted average effective yield on income producing investments at the end of Q1 2020 was approximately 9.9% as compared to approximately 10.4% at the end of the prior quarter. ▪ Q1 net investment income (“NII”) was $6.1 million, or $0.297 per share, which compares to Q4 NII of $7.7 million, or $0.375 p er share. ▪ Q1 Core NII (1) , after adjusting for a $0.6 million reversal of the capital gains incentive fee accrual, was $5.5 million, or $0.267 per share, compared with the quarterly distribution of $0.355 per share. This compares with Q4 Core NII of $7.9 million, or $0.385 per s har e. ▪ Net unrealized losses on investments for Q1 2020 were $28.2 million and were primarily driven by the economic effect of the C OVI D - 19 pandemic and the continuing uncertainty surrounding its long - term impact as well as the re - pricing of credit risk in the market. ▪ NAV per share at the end of Q1 2020 was $13.86 per share compared to $15.23 per share reported at the end of Q4 2019. ▪ Gross leverage levels increased during the quarter to 1.04x from 0.97x at the end of Q4 2019. Cash on - hand at the end of Q1 2020 was $28.1 million resulting in net leverage of 0.94x as compared to 0.88x at the end of Q4 2019. ▪ As of March 31, 2020, STRS JV had total assets of ~$126 million. At March 31, 2020, STRS JV had a weighted average unlevered eff ective yield on its portfolio of 7.8%; the Company expects its investments in STRS JV, once fully ramped, to yield 12 - 15% on the Compan y’s invested capital in STRS JV. (1) Core net investment income is a non - GAAP financial measure. Refer to next slide for components and discussion of core net invest ment income. 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 also be found by accessing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com.
6 Quarterly Operating Highlights Note: N umbers may not foot due to rounding. (1) Total investment income includes investment income (e.g., interest and dividends) from investments in STRS JV. (2) Net of fee waivers, if any. (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 acc rua l 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 me ant 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 com parable 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 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 (USD in MM, expect per share data) Total Investment Income (1) 16.7$ 15.9$ 16.0$ 17.8$ 17.4$ 14.5$ Expenses Interest Expenses 3.0 3.1 3.2 3.5 3.7 3.7 Base Management Fees (2) 2.5 2.4 2.6 2.8 3.1 3.1 Performance-based Incentive Fees 1.2 1.8 2.1 1.7 2.2 0.4 Other Expenses 1.9 1.1 0.9 1.1 0.7 1.2 Total Expenses 8.6 8.3 8.8 9.1 9.7 8.4 Net Investment Income 8.0$ 7.6$ 7.2$ 8.7$ 7.7$ 6.1$ Net Realized and Unrealized Gain / (Loss) (3.1) (0.6) 1.0 (1.8) 1.1 (27.1) Net Increase in Net Assets from Operations 4.9$ 7.0$ 8.2$ 6.9$ 8.8$ (21.0)$ Per Share Net Investment Income (NII) 0.39$ 0.37$ 0.35$ 0.42$ 0.37$ 0.30$ Core NII (3) 0.40$ 0.37$ 0.36$ 0.40$ 0.39$ 0.27$ Net Realized and Unrealized Gain / (Loss) (0.15)$ (0.03)$ 0.06$ (0.08)$ 0.05$ (1.31)$ Earnings 0.24$ 0.34$ 0.41$ 0.34$ 0.42$ (1.01)$ Dividends Declared 0.355$ 0.355$ 0.355$ 0.355$ 0.355$ 0.355$ Core NII Dividend Coverage 112% 103% 102% 114% 108% 75%
7 Quarterly Balance Sheet Highlights Note: 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 issuan ces). Unaudited Quarterly Financials Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 (USD in MM, expect per share data) Assets Investments at Fair Value 469.6$ 468.4$ 534.8$ 527.5$ 589.7$ 557.1$ Cash and Equivalents (1) 33.7 36.9 50.4 22.2 27.5 28.1 Other Assets 10.8 16.2 7.9 16.3 14.0 6.7 Total Assets 514.1$ 521.5$ 593.1$ 566.0$ 631.2$ 591.9$ Liabilities Debt (net of issuance costs) 176.0 176.2 245.8 232.0 298.9 291.1 Other Liabilities 22.8 30.3 31.4 18.6 19.3 16.1 Total Liabilities 198.8$ 206.5$ 277.2$ 250.5$ 318.3$ 307.2$ Total Net Assets 315.3$ 315.0$ 315.9$ 315.5$ 313.0$ 284.7$ Total Liabilities and Net Assets 514.1$ 521.5$ 593.1$ 566.0$ 631.2$ 591.9$ Net Asset Value per Share 15.35$ 15.33$ 15.38$ 15.36$ 15.23$ 13.86$ Leverage Ratio (2) 0.57x 0.57x 0.79x 0.75x 0.97x 1.04x Net Leverage Ratio (3) 0.46x 0.45x 0.63x 0.68x 0.88x 0.94x Gross Fundings (4) 67.2 49.7 76.5 81.6 155.4 27.6 Exits and Repayments (4) (105.6) (52.3) (12.3) (89.1) (95.8) (33.6) Net Fundings (38.3)$ (2.6)$ 64.2$ (7.5)$ 59.6$ (6.0)$
Portfolio Highlights 8 Note: 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 fro m the amortization of fees and discounts) by (b) the weighted average cost of investments. Weighted average effective yield for entire portfolio, including equities and STRS JV, as of the end of Q4 2018, Q1 2019, Q2 2019, Q3 201 9, Q4 2019 and Q1 2020 were 11.8%, 11.6%, 10.7%, 10.5%, 9.9% and 9.1% respectively. Source: Company filings (4) In Q1 2020, BW Gas & Convenience Holdings, LLC was changed from Sponsor to Non - Sponsor classification for all periods report ed. ($ in MM, except per share data) Portfolio Investment Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Total Fair Value of Investments 469.6$ 468.4$ 534.8$ 527.5$ 589.7$ 557.1$ Number of Portfolio Investments 53 56 67 65 66 65 Number of Portfolio Companies 39 41 47 48 51 52 Average Investment Size(1) 8.9$ 8.4$ 8.0$ 8.0$ 8.7$ 8.2$ Average Debt Investment Size(1) 10.1$ 9.5$ 8.8$ 9.2$ 10.0$ 9.3$ Fair Value as a Percentage of Principal(2) 96.4% 96.8% 96.9% 96.7% 95.6% 92.2% Total Portfolio Effective Yield (3) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Weighted average effective yield on income-producing debt investments 11.9% 11.7% 11.3% 11.1% 10.4% 9.9% Portfolio Composition - Floating vs. Fixed Investments (Debt Investments at Fair Value) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Percentage of fixed rate investments 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Percentage of floating rate investments 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Portfolio Composition - Sponsor vs. Non-Sponsoer (Fair Value)(1)(4) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Sponsor 44.1% 46.1% 45.4% 46.6% 53.1% 49.4% Non-Sponsor 55.9% 53.9% 54.6% 53.4% 46.9% 50.6% Total Portfolio Composition by Instrument Type (Fair Value) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 First lien secured loans 76.5% 80.0% 84.7% 79.7% 81.0% 80.4% Second lien secured loans 20.7% 17.2% 12.3% 12.4% 10.5% 9.7% STRS JV 4.6% 5.6% 7.6% Equity 2.8% 2.9% 3.0% 3.2% 2.8% 2.4% Investments on Non-Accrual Status (Debt Investments) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Fair Value of Investments on Non-accrual Status 0.1$ 0.1$ 21.3$ 8.5$ 7.7$ 20.7$ Cost of Investments on Non-accrual Status 1.0$ 1.0$ 28.8$ 13.9$ 13.9$ 31.6$ % of Investments on Non-accrual Status (Fair Value) 0.0% 0.0% 4.0% 1.6% 1.3% 3.7% % of Investments on Non-accrual Status (Cost) 0.2% 0.2% 5.4% 2.6% 2.3% 5.3%
Portfolio Trends Historical Portfolio Trends 9 % 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) (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) Except as otherwise indicated, non - zero values <0.05%.
10 Note: As of March 31, 2020, 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) 100% of WHF loans are senior secured Borrower and Industry Diversity 7.6% 4.9% 4.2% 4.1% 3.5% 3.2% 3.1% 2.9% 2.7% 2.6% 61.2% STRS JV Sigue Corporation Future Payment Technologies, L.P. Source Code Midco, LLC Vessco Holdings, LLC Potpourri Group, Inc. Golden Pear Funding Assetco, LLC Team Car Care Holdings, LLC (Heartland Auto) JVMC Holdings Corp. (fka RJO Holdings Corp) ALM Media Other 7.2% 5.9% 5.4% 5.4% 5.4% 5.1% 4.6% 4.0% 4.0% 3.8% 3.5% 3.3% 42.4% Specialized Finance Technology Hardware, Storage & Peripherals Research & Consulting Services Data Processing & Outsourced Services Other Diversified Financial Services Health Care Services Automotive Retail Leisure Facilities Investment Banking & Brokerage Trading Companies & Distributors Internet & Direct Marketing Retail Diversified Support Services Other STRS JV
Effective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage (1) From IPO to March 31, 2020 11 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 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 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 r es ults 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 resul ts 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 acc essing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com (3) Does not include special dividends. (4) WHF’s dividend coverage was impacted in 3Q 2017 by the timing of deployment of the equity issuance of ~$31mm in June 2017 Source: Company filings Covered by $0.01 Missed by $0.00 Covered by $0.04 Covered by $0.00 Covered by $0.00 Covered by $0.02 Missed by $0.07 (4) Covered by $0.07 Missed by $0.02 Missed by $0.03 Missed by $0.01 Covered by $0.04 Covered by $0.01 Covered by $0.05 Covered by $ 0.03 Missed by $0.09
Net Asset Value Trends 12 *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 pai d and shows the pro forma to the Company’s NAV per share after payment of regular distributions. Net Asset Value Per Share
Note: As of end of each quarter presented, unless otherwise noted. Not a guarantee of future performance or investment pace. (1) As of March 31, 2020 WHF had $4.7MM of deferred debt issuance costs (2) Gross leverage excluding cash 3 Current Debt Outstanding (as of March 31, 2020) ($ in MM) Commitment Outstanding (1) Weighted Average Interest Rate Maturity Additional Information Revolving Credit Facility $250.0 ($100 Accordion Feature) $230.9 L+2.50% payable quarterly 2024 Private Notes $30.0 $30.0 6.00% payable semi - annually; unsecured 2023 Senior Notes $35.0 $35.0 6.50% payable quarterly; unsecured 2025 NASDAQ: WHFBZ Total Debt $315.0 $295.9 Total Shareholders’ Equity/Net Assets $284.7 NA Funding Profile 13 Gross Debt to Equity (2) 1.0x - 1.25x Target Leverage
14 Appendix
15 COVID - 19 Portfolio Exposure WhiteHorse Finance, Inc. STRS JV Very High , 3.8% High , 2.5% Moderate , 41.2% Low/Moderate , 7.3% Low , 37.7% Very High , 7.8% High , 4.3% Moderate , 33.3% Low/Moderate , 9.4% Low , 45.3% WHF STRS JV, 7.6% WHF Fair Value % of FV Very High $ 21 . 0 3 . 8 % High 13 . 7 2 . 5 Moderate 229 . 8 41 . 2 Low/Moderate 40 . 6 7 . 3 Low 210 . 0 37 . 7 STRS JV 42 . 1 7 . 6 Total $ 557 . 1 100 . 0 % STRS JV Fair Value % of FV Very High $ 9 . 6 7 . 8 % High 5 . 3 4 . 3 Moderate 40 . 9 33 . 3 Low/Moderate 11 . 5 9 . 4 Low 55 . 6 45 . 3 Total 123 . 0 100 . 0 % Note: Fair values are as of March 31, 2020 and may not foot due to rounding; percentages may not add up to 100% due to roundi ng. (1) The information above reflects management’s best estimates based on data available as of May 11, 2020 and not as of any futur e d ate. The assumptions and estimates underlying the allocations presented herein are inherently uncertain and subject to a wide variety of significant b usi ness and economic risks and uncertainties, including as a direct or indirect result of the COVID - 19 pandemic or the decrease in business activity that resul ted from it, that could cause the allocations of actual portfolio exposure to differ materially from the estimates contained herein. These allocations are ther efo re subject to change without notice at any given time as more data become available. WhiteHorse Finance, Inc. undertakes no duty or obligation to publicly update, supplement or revise the information contained in this Presentation. (2) Within any given category, there are variations in the amount of exposure. For example, not all investments in the Low categ ory experience the same level of exposure. (3) The Low/Moderate category includes portfolio companies where impact so far has been low, but is expected to rise to moderate ove r time.
Origination Footprint ( March 31, 2020) Regional Direct Origination Footprint ▪ Scope of H.I.G. WhiteHorse market coverage results in consistent investment activity levels regardless of market conditions ▪ Dedicated direct lending team of over 40 investment and origination professionals ▪ Regional footprint with 19 dedicated direct lending originators in 12 North American offices ▪ Global platform of approximately 415 investment 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 m idd le market Los Angeles Miami New York Boston Chicago Atlanta Stamford San Francisco Existing offices with senior originators Puerto Rico Headquarters of a portfolio company Dallas Washington, D.C. Toronto Vancouver 16
Origination Pipeline Funnel (1) 17 Note: Percentages may not add up to 100% due to rounding. (1) Origination Pipeline figures reflect 2014 through March 31, 2020 Three tier sourcing platform, generating meaningful investable opportunities for WhiteHorse Finance Over 40 WhiteHorse deal professionals dedicated to sourcing and underwriting for WHF 25 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 lowe r middle market transactions as compared to the broadly syndicated market ▪ Directly 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 more than 415 Investment Professionals across H.I.G.’s platform 5,509 100.0% 1,497 27.2% 372 6.8% 103 1.9% Total % of Sourced
18 Corporate Data Board of Directors Investment Committee Corporate Officers Research Coverage Corporate Counsel John Bolduc Sami Mnaymneh Stuart Aronson Tim Hayes Dechert LLP Chairman of the Board Founder and Co - CEO of H.I.G. Capital Chief Executive Officer B. Riley FBR New York, NY Stuart Aronson Anthony Tamer Marco Collazos George Bahamondes Corporate Headquarters Director Founder and Co - CEO of H.I.G. Capital Chief Compliance Officer Deutsche Bank 1450 Brickell Avenue 31st Floor Jay Carvell Stuart Aronson Joyson Thomas Richard Shane Miami, FL 33131 Director Chief Executive Officer and Director Chief Financial Officer J.P. Morgan Transfer Agent Kevin F. Burke Mark Bernier Mickey Schleien American Stock Transfer & Independent Director Managing Director of WhiteHorse Capital Ladenburg Thalmann & Co. Inc. Trust Company, LLC New York, NY Rick P. Frier John Bolduc Bryce Rowe Independent Director Chairman of the Board, Executive Managing National Securities Investor Relations Contact Director of H.I.G. Capital 1450 Brickell Avenue Rick D. Puckett Chris Kotowski 31st Floor Independent Director Jay Carvell Oppenheimer & Co. Attention: Investor Relations Managing Director of WhiteHorse Capital Miami, FL 33131 G. Stacy Smith Robert Dodd (305) 381 - 6999 Independent Director Javier Casillas Raymond James Managing Director of WhiteHorse Capital Independent Registered Public Accounting Firm Pankaj Gupta Crowe LLP Managing Director of WhiteHorse Capital New York, NY David Indelicato Equity Securities Listing Managing Director of WhiteHorse Capital NASDAQ: WHF Brian Schwartz Please visit our website at: Co - President of H.I.G. Capital www.whitehorsefinance.com John Yeager Managing Director of WhiteHorse Capital