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Analyst Actions: THL Credit's Fair Value Trimmed to $9.50 at Janney, Neutral Rating Reiterated


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THL Credit's ( TCRD ) fair value estimate decreased by $1 to $9.50 per share at Janney, after the company's book value slid by $0.95 per share during its fiscal Q4.

THL had recorded net investment income of $7.3 million, or $0.23 per share. A year ago, it had been $8.7 million, or $0.27 per share.

THL also said it will pay a quarterly dividend of $0.21 per share, down from the previous $0.27 per share, "to reflect the [business development company's] curren t earnings potential." The dividend will be distributed March 29 to stockholders of record as of March 20. Its board further authorized the renewal of an ongoing buyback plan, targeting up to $15.0 million of common stock for repurchase. The program will be in effect through March 5, 2020.

The company is also seeking stockholder approval for the increase of its leverage, so that THL's asset coverage ratio of 200% is reduced to 150%.

THL is additionally waiving incentive fees accrued for the entirety of this year, instead of only through June 30. It is waiving base management fees in excess of 1.0% per annum starting April 1, which it believes is more appropriate for its shift to first-lien floating rate loans.

Janney, in a research report reiterating its neutral rating on the stock, pointed out that THL has earned a return on equity of 5.2% since it went public in 2010. Its ROE has been even lower, at negative 0.51%, over the last three years. The brokerage believes the new investment strategy should help improve returns.

The stock closed Thursday at $6.67.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , ETFs
Referenced Symbols: TCRD




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