BlackRock TCP Capital Corp. (TCPC) has sold approximately 48% of its loan book, totaling $523 million in private credit investments across 78 portfolio companies, to a continuation vehicle primarily controlled by secondaries specialist Pantheon. This move is designed to strengthen TCPC's financial position, reduce its leverage, and reshape its investment portfolio.
The transaction involved Pantheon acquiring a 95% interest in the continuation vehicle at an approximate 5% discount to fair market value, while TCPC retains a 5% interest. The sale generated $152 million in proceeds and is expected to decrease TCPC's net asset value (NAV) by about $57 million, or $0.68 per share. Post-transaction, TCPC's pro forma net leverage ratio is expected to significantly drop from 1.38x to approximately 0.4x, with a further reduction to less than 0.3x following an announced portfolio company paydown. Total NAV after the deal will be $495 million.
This sale aims to address pressure on TCPC, which was trading at a discount to NAV of around 36%. The company's management believes the transaction provides greater financial flexibility, enhances liquidity, and offers strategic optionality to deliver long-term shareholder value. The sale also significantly reduces unfunded commitments from approximately $90 million to about $36 million. The BlackRock TCP Capital Corp. board has engaged Keefe, Bruyette & Woods to explore strategic alternatives to leverage this enhanced financial flexibility.
As of June 30, 2026, TCPC's consolidated investment portfolio had a fair value of approximately $1.3 billion, with 91.5% in senior secured debt. The sale will reduce the company's software exposure from 21% to around 11%. This strategic repositioning is a significant step for BlackRock in managing its publicly traded lending vehicle amidst market pressures.
