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

saronson@higwhitehorse.com

 

or

 

Joyson Thomas

WhiteHorse Finance, Inc.

305-379-2322

jthomas@higwhitehorse.com

 

or

 

Sean Silva

Prosek Partners

646-818-9122

ssilva@prosek.com

 

Source: WhiteHorse Finance, Inc.

 

 

 

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