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News Article | April 17, 2017
Site: www.businesswire.com

WHEATON, Ill.--(BUSINESS WIRE)--The Board of Trustees of First Trust Energy Infrastructure Fund (the “Fund”) (NYSE: FIF), CUSIP 33738C103, previously approved a managed distribution policy for the Fund (the “Managed Distribution Plan”) in reliance on exemptive relief received from the Securities and Exchange Commission which permits the Fund to make periodic distributions of long-term capital gains as frequently as monthly each tax year. The Fund has declared a distribution payable on April 17, 2017, to shareholders of record as of April 5, 2017, with an ex-dividend date of April 3, 2017. This Notice is meant to provide you information about the sources of your Fund’s distributions. You should not draw any conclusions about the Fund’s investment performance from the amount of its distribution or from the terms of its Managed Distribution Plan. The following tables set forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date for the Fund from the following sources: net investment income (“NII”); net realized short-term capital gains (“STCG”); net realized long-term capital gains (“LTCG”); and return of capital (“ROC”). These estimates are based upon information as of March 31, 2017, are calculated based on a generally accepted accounting principles (“GAAP”) basis and include the prior fiscal year-end undistributed net investment income. The amounts and sources of distributions are expressed per common share. The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. You should not use this Notice as a substitute for your Form 1099-DIV. Energy Income Partners, LLC (“EIP”) serves as the Fund’s investment sub-advisor and provides advisory services to a number of investment companies and partnerships for the purpose of investing in MLPs and other energy infrastructure securities. EIP is one of the early investment advisors specializing in this area. As of March 31, 2017, EIP managed or supervised approximately $5.9 billion in client assets. Principal Risk Factors: The Fund is subject to risks, including the fact that it is a non-diversified closed-end management investment company. Because the Fund is concentrated in securities issued by energy infrastructure companies, it will be more susceptible to adverse economic or regulatory occurrences affecting that industry, including high interest costs, high leverage costs, the effects of economic slowdown, surplus capacity, increased competition, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. The Fund invests in securities of non-U.S. issuers which are subject to higher volatility than securities of U.S. issuers. Because the Fund invests in non-U.S. securities, you may lose money if the local currency of a non-U.S. market depreciates against the U.S. dollar. There can be no assurance as to what portion of the distributions paid to the Fund's Common Shareholders will consist of tax-advantaged qualified dividend income. Use of leverage can result in additional risk and cost, and can magnify the effect of any losses. The risks of investing in the Fund are spelled out in the shareholder reports and other regulatory filings. Certain statements made in this press release that are not historical facts are referred to as “forward-looking statements” under the U.S. federal securities laws. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ from those anticipated in any forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Fund undertakes no responsibility to update publicly or revise any forward-looking statements.


News Article | April 20, 2017
Site: www.businesswire.com

PITTSBURGH--(BUSINESS WIRE)--TriState Capital Holdings, Inc. (NASDAQ: TSC) reported record first quarter earnings per share (EPS) and net income in the three months ended March 31, 2017, driven by revenue growth in private bank and commercial lending, as well as strong contributions by its investment management business. The parent company of TriState Capital Bank and Chartwell Investment Partners reported EPS of $0.26 in the first quarter of 2017, compared to $0.21 in the first quarter of 2016 and $0.27 in the fourth quarter of 2016. First quarter 2017 EPS grew 23.8% from the year-ago period and 13.0% from the linked quarter, when excluding a $0.04 per share fourth quarter net benefit from non-recurring items. Net income totaled $7.5 million in the first quarter of 2017, compared to $5.8 million in the year-ago period and $7.6 million in the linked quarter, or $6.4 million excluding non-recurring items in the fourth quarter of 2016. “ The consistent earnings power of TriState Capital’s commercial banking, investment management and private banking businesses were on full display in the first quarter of 2017,” Chief Executive Officer James F. Getz said. “ Once again, all key financial metrics show very favorable trends, including record first quarter net interest income, investment management fees and earnings, profitable double-digit expansion of loans, substantial growth in relationship deposits, further enhancement of the bank’s superior credit quality, and highly credible investment performance at Chartwell.” TriState Capital’s total revenue, NII and non-interest income each reached record first quarter levels in the three months ended March 31, 2017. Total revenue was $32.3 million in the first quarter of 2017, compared to $27.3 million in the year-ago quarter and $33.2 million in the linked quarter. TriState Capital’s diverse loan growth continues to support revenue expansion. NII grew to $20.9 million in the first quarter of 2017, increasing 13.8% from $18.4 million in the first quarter of 2016 and 7.2% from $19.5 million in the linked quarter. Non-interest income totaled $11.4 million in the first quarter 2017, compared to $8.9 million in the year-ago period and $13.6 million in the linked quarter. TriState Capital’s non-interest income is largely comprised of investment management fees, which were $9.3 million in the first quarter of 2017. These fees reflect the contribution of The Killen Group (TKG) business acquired in April 2016 and strong performance of Chartwell’s investment strategies. Chartwell investment management fees were $7.0 million in the year-ago quarter and $10.2 million in the linked quarter. Other non-interest income was $2.1 million in the first quarter of 2017, compared to $1.9 million in the year-ago quarter and $3.4 million in the linked quarter, with quarter-to-quarter variability primarily reflecting commercial borrower interest rate swap activity. The bank’s efficiency ratio for the first quarter of 2017 was 57.99%, compared to 63.33% in the linked quarter and 59.40% in the year-ago period. Non-interest expenses were $21.2 million, or 2.15% of average assets on an annualized basis, in the first quarter of 2017 compared to $20.8 million, or 2.19%, in the fourth quarter of 2016. Non-interest expenses in the first quarter of 2016, prior to closing of the TKG investment management acquisition, were $18.0 million, or 2.19% of average assets on an annualized basis. Loans totaled $3.54 billion at March 31, 2017, increasing $640.5 million, or 22.1%, over balances at March 31, 2016 and $136.0 million, or 4.0%, from December 31. Private banking loans totaled $1.84 billion at March 31, 2017, growing 34.2% from the end of the year-ago quarter and 5.8% from the end of the linked quarter. The private banking business also posted record first quarter net production of $101.3 million. Commercial loans totaled $1.70 billion at March 31, 2017, growing 11.3% from the end of the year-ago quarter and 2.1% from the end of the linked quarter. Deposits totaled $3.32 billion at March 31, 2017, increasing $561.7 million, or 20.4%, from March 31, 2016 and $31.1 million, or 0.9%, from December 31. TriState Capital strategically reduced brokered deposits by $235.8 million in the first quarter of 2017, taking advantage of a $266.9 million increase in non-brokered deposits in the period. This illustrates the ongoing success of TriState Capital’s efforts to grow stable and cost-effective relationship deposits and treasury management related liquidity from new and existing accounts through superior client focus and enhanced services and technology. TriState Capital continues to manage a highly asset-sensitive balance sheet. At March 31, 2017, 89% of TriState Capital’s loan portfolio and 42% of its securities portfolio were floating rate. In addition, 29% of deposits were fixed-rate certificates of deposit. The bank’s solid asset quality metrics in the first quarter of 2017 continued to reflect TriState Capital’s disciplined credit culture and the growth of its private banking non-purpose margin loans secured by marketable securities. Private banking comprised 52% of the total loan portfolio at March 31, 2017. Non-performing assets declined to $18.2 million at March 31, 2017, or 0.45% of total assets, compared to $22.9 million, or 0.67% of assets, at March 31, 2016 and $22.0 million, or 0.56%, at December 31, 2016. Adverse-rated credits declined 6.3% during the first quarter and 29.6% from March 31, 2016. Adverse-rated credits represented 1.13% of total loans at the end of the first quarter of 2017, 1.96% at March 31, 2016 and 1.25% at December 31, 2016. The bank took net charge-offs of $2.8 million, or 0.33% of average total loans, in the first quarter of 2017, attributed to a pair of non-performing loans originated in 2011 and 2008. These charge-offs had been fully reserved for in prior periods. TriState Capital recorded net recoveries of $450,000 in the first quarter of 2016 and net charge-offs $2.6 million, or 0.32% of average total loans, in the fourth quarter of 2016. Provision expense was $243,000 for the first quarter of 2017, $122,000 in the first quarter of 2016 and $1.2 million in the fourth quarter of 2016. The company’s allowance for loan losses (ALL) at the end of the first quarter of 2017 reflects declining NPAs and lower levels of provision required for private banking loans. ALL represented 0.46% of total loans at March 31, 2017, compared to 0.64% at March 31, 2016 and 0.55% at December 31, 2016. Chartwell’s new business and new flows from existing accounts of $366 million and market appreciation of $177 million offset outflows of $406 million in the first quarter of 2017. AUM totaled $8.2 billion at the end of the first quarter of 2017, compared to $8.1 billion at December 31, 2016. Chartwell’s weighted average fee rate was 0.46% at March 31, 2017. Investment management fees totaled $9.3 million in the first quarter of 2017, compared to $7.0 million in the first quarter of 2016 and $10.2 million in the fourth quarter of 2016. On an annualized run-rate basis, Chartwell’s revenues increased to $37.9 million at March 31, 2017, from $30.9 million at March 31, 2016 and $37.5 million at December 31, 2016. Chartwell earned $1.2 million in the first quarter, comprising 15.6% of TriState Capital Holdings’ consolidated net income for the first quarter of 2017. TriState Capital’s earnings in the quarter continued to support superior loan growth in the period, while the company maintained capital ratios that exceed the highest required regulatory benchmark levels. As of March 31, 2017, TriState Capital Holdings reported ratios of 12.39% for total risk-based capital, 11.42% for tier 1 risk-based capital, 11.42% for common equity tier 1 risk-based capital and 7.56% for tier 1 leverage. In January 2017, TriState Capital’s Board of Directors approved share repurchases of up to $5 million. In combination with authorizations granted in 2016, $7.6 million remains available. Over the three months ended March 31, 2017, the company repurchased a total of 44,866 shares for approximately $1.0 million at an average cost of $23.21 per share. As previously announced, TriState Capital will hold a conference call tomorrow to review its financial results and operating performance. The live conference call on April 21 will be held at 8:30 a.m. ET. Telephone participants may avoid any delays by pre-registering for the call using the link http://dpregister.com/10104656 to receive a special dial-in number and PIN. Telephone participants who are unable to pre-register should dial in at least 10 minutes prior to the call and request the “TriState Capital earnings call.” The call may be accessed by dialing 888-339-0757 from the United States, 855-669-9657 from Canada or 412-902-4194 from other international locations. A replay of the call will be available approximately one hour after the end of the conference through April 28. The replay may be accessed by dialing 877-344-7529 from the United States, 855-669-9658 from Canada or 412-317-0088 from other international locations, and entering the conference number 10104656. TriState Capital Holdings, Inc. (NASDAQ: TSC) is a bank holding company headquartered in Pittsburgh, Pa., providing commercial banking, private banking and investment management services to middle-market companies, institutional clients and high-net-worth individuals. Its TriState Capital Bank subsidiary had $4.0 billion in assets, as of March 31, 2017, and serves middle-market commercial customers through regional representative offices in Pittsburgh, Philadelphia, Cleveland, Edison, N.J., and New York City, as well as high-net-worth individuals nationwide through its national referral network of financial intermediaries. Its Chartwell Investment Partners subsidiary had $8.2 billion in assets under management, as of March 31, 2017, and serves as the advisor to The Berwyn Funds and Chartwell Mutual Funds. For more information, please visit http://investors.tristatecapitalbank.com. This press release includes “forward-looking” statements related to TriState Capital that can generally be identified as describing TriState Capital’s future plans, objectives or goals. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the factors that could affect TriState Capital’s future results, please see the company’s most-recent annual and quarterly reports filed on Form 10-K and Form 10-Q. This news release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). Although TriState Capital believes non-GAAP financial measures provide a greater understanding of its business, these measures are not necessarily comparable to similar measures that may be presented by other companies. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP. Where non-GAAP disclosures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found within this news release and accompanying tables. The information set forth above contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are “tangible common equity,” “tangible book value per common share,” “total revenue,” “pre-tax, pre-provision net revenue,” “efficiency ratio,” and “adjusted EBITDA.” Although we believe these non-GAAP financial measures provide a greater understanding of our business, these measures are not necessarily comparable to similar measures that may be presented by other companies. “Tangible common equity” is defined as shareholders’ equity reduced by intangible assets, including goodwill. We believe this measure is important to management and investors to better understand and assess changes from period to period in shareholders’ equity exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a business purchase combination, has the effect of increasing both equity and assets, while not increasing our tangible equity or tangible assets. “Tangible book value per common share” is defined as book value, excluding the impact of intangible assets, including goodwill, divided by common shares outstanding. We believe this measure is important to many investors who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. “Total revenue” is defined as net interest income and non-interest income, excluding gains and losses on the sale and call of investment securities. We believe adjustments made to our operating revenue allow management and investors to better assess our operating revenue by removing the volatility that is associated with certain other items that are unrelated to our core business. “Pre-tax, pre-provision net revenue” is defined as net income, without giving effect to loan loss provision and income taxes, and excluding gains and losses on the sale and call of investment securities. We believe this measure is important because it allows management and investors to better assess our performance in relation to our core operating revenue, excluding the volatility that is associated with provision for loan losses or other items that are unrelated to our core business. “Efficiency ratio” is defined as non-interest expense, excluding acquisition related items and intangible amortization expense, where applicable, divided by our total revenue. We believe this measure, particularly at the Bank, allows management and investors to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business. “Adjusted EBITDA” is defined as net income before interest expense, income taxes, depreciation and amortization as well as excluding acquisition related items. We use this measure particularly to assess the strength of our investment management business. We believe this measure is important because it allows management and investors to better assess our investment management performance in relation to our core operating earnings, excluding certain non-cash items and the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business.


Santander México reported net income for 1Q17 of Ps.4,520 million, representing a YoY increase of 27.7% and a QoQ decrease of 0.5%. Héctor Grisi, Grupo Financiero Santander México's Executive President and CEO, commented: "We started the year in a strong position, demonstrating our ability to deliver consistent profitability, even as the macro backdrop remains uncertain. "We remain focused on becoming a truly client-centric bank, and are proud of our sound asset quality and profitability across the board. As ever, we are committed to boosting productivity by prioritizing innovation, investment, and scaling operating efficiencies. "We posted robust NII, up 15% year-on-year, despite more muted volume growth consistent with our focus on profitability along with stiff competition. Our initiatives to offer an attractive value proposition for Individuals and SMEs through innovative products and a client centric approach are driving strong deposit growth. "The Santander Plus program continues to gain traction, reaching more than 1.5 million customers, 52% of which are new. Similarly, the Santander-Aeroméxico co-branded card is showing robust performance, reaching 500,000 customers, of which 34% are new to the bank. Overall, the number of net new clients has grown over 170% since May 2016, reflecting a combination of new clients, but most importantly lower attrition.  Loyal and digital clients have grown 21% and 61%, respectively. In addition, we continue to launch innovative products and upgrade our transaction and operational model to enhance the customer journey and sharpen our competitive position. "Our disciplined approach to asset quality is paying off, with our non-performing loan ratio falling to 2.38% in the quarter – a 50 bps YoY improvement consistent with our risk appetite. "Overall, we reported a solid bottom line with net income up a 28% YoY to 4.5 billion pesos, and ROAE up 380 basis points to 16.1%. This performance underscores the resilience of Santander México's business against a volatile global backdrop, as we execute our strategic initiatives and focus on risk-weighted asset returns and efficiency. Looking forward, we are committed to ongoing investment to drive innovation and strengthen our business, maintaining a strong focus on profitability and efficiency." ABOUT GRUPO FINANCIERO SANTANDER MÉXICO, S.A.B. DE C.V. (NYSE: BSMX; BMV: SANMEX) Grupo Financiero Santander México, S.A.B. de C.V. (Santander México), one of Mexico's leading financial services holding companies, provides a wide range of financial and related services, including retail and commercial banking, securities brokerage, financial advisory and other related investment activities. Santander México offers a multichannel financial services platform focused on mid- to high-income individuals and small- to medium-sized enterprises, while also providing integrated financial services to larger multinational companies in Mexico. As of March 31, 2017, Santander México had total assets of Ps.1,269 billion under Mexican Banking GAAP and more than 13.9 million customers. Headquartered in Mexico City, the Company operates 1,076 branches and 315 offices nationwide and has a total of 16,927 employees. LEGAL DISCLAIMER Grupo Financiero Santander México cautions that this report may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements may be found in various places throughout this report and include, without limitation, statements regarding our intent, belief, targets or current expectations in connection with: asset growth and sources of funding; growth of our fee-based business; expansion of our distribution network; our focus on strategic businesses; our compound annual growth rate; our risk, efficiency and profitability targets; financing plans; competition; impact of regulation; exposure to market risks including interest rate risk, foreign exchange risk and equity price risk; exposure to credit risks including credit default risk and settlement risk; projected capital expenditures; capitalization requirements and level of reserves; liquidity; trends affecting the economy generally; and trends affecting our financial condition and our results of operations. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: changes in capital markets in general that may affect policies or attitudes towards lending to Mexico or Mexican companies; changes in economic conditions, in Mexico in particular, in the United States or globally; the monetary, foreign exchange and interest rate policies of the Mexican Central Bank (Banco de Mexico); inflation; deflation; unemployment; unanticipated turbulence in interest rates; movements in foreign exchange rates; movements in equity prices or other rates or prices; changes in Mexican and foreign policies, legislation and regulations; changes in requirements to make contributions to, for the receipt of support from programs organized by or requiring deposits to be made or assessments observed or imposed by, the Mexican government; changes in taxes; competition, changes in competition and pricing environments; our inability to hedge certain risks economically; economic conditions that affect consumer spending and the ability of customers to comply with obligations; the adequacy of allowances for loans and other losses; increased default by borrowers; technological changes; changes in consumer spending and saving habits; increased costs; unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms; changes in, or failure to comply with, banking regulations; and certain other factors indicated in our  annual report20F. The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the U.S. Securities and Exchange Commission, could adversely affect our business and financial performance. Note: The information contained in this report is not audited. Nevertheless, the consolidated accounts are prepared on the basis of the accounting principles and regulations prescribed by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for credit institutions, as amended (Mexican Banking GAAP). All figures presented are in nominal terms. Historical figures are not adjusted for inflation. To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/grupo-financiero-santander-mexico-reports-first-quarter-2017-net-income-of-ps4520-million-300447952.html


News Article | May 5, 2017
Site: www.businesswire.com

CHICAGO--(BUSINESS WIRE)--OFS Capital Corporation (NASDAQ:OFS) (“OFS Capital”, “we”, “us”, or “our”) today announced its financial results for the fiscal quarter ended March 31, 2017. "We are pleased that our NAV increased from the end of 2016," said Bilal Rashid, OFS Capital's Chairman and Chief Executive Officer. “At the end of the first quarter, we raised approximately $53.7 million through a common stock offering to help fund our investment pipeline. We believe that the larger equity base also improves our risk profile and scale. We are optimistic about the future given the strength of our direct origination and underwriting platform. Our commitment to strong, long-term performance is enhanced by the alignment of interests of our stockholders and our external manager, which continues to own approximately 2.9 million shares, or 22% of the outstanding OFS Capital common stock." On a supplemental basis, we disclose adjusted net investment income ("Adjusted NII") (including on a per share basis), which is a financial measure calculated and presented on a basis of methodology other than in accordance with generally accepted accounting principles of the United States of America (“non-GAAP”). Adjusted NII represents net investment income excluding the net capital gains incentive fee (fee adjustments) in periods in which they occur. Our management agreement with OFS Capital Management, LLC ("OFS Advisor") provides that a capital gains incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized capital losses for such year. Management believes that Adjusted NII is a useful indicator of operations exclusive of any net capital gains incentive fee, as net investment income does not include gains associated with the capital gains incentive fee. In addition, management believes that providing Adjusted NII may facilitate a more complete analysis and greater transparency into OFS Capital’s ongoing operations, particularly in comparing underlying results from period to period, and afford investors a view of results that may be more easily compared to those of other companies. Reconciliations of net investment income to Adjusted NII are set forth in Schedule I. (1) The weighted average yield on our debt investments is computed as (a) the annual stated accruing interest plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees, divided by (b) amortized cost of debt investments, excluding assets on non-accrual basis as of the balance sheet date. The weighted average yield of our debt investments is not the same as a return on investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of all of our fees and expenses. During the first quarter of 2017, OFS Capital closed $6.1 million of new senior secured debt investments in five existing portfolio companies, which included a delayed draw funding of $0.5 million. The total fair value of OFS Capital’s investment portfolio was $258.3 million at March 31, 2017, which was equal to approximately 102% of amortized cost. As of March 31, 2017, the fair value of OFS Capital's debt investment portfolio totaled $217.3 million in 36 portfolio companies, of which 76% and 24% were senior secured loans and subordinated loans, respectively. As of March 31, 2017, we also held approximately $41.0 million in equity investments, at fair value, in 17 portfolio companies in which we also held debt investments and two portfolio company in which we solely held an equity investment. We had unfunded commitments of $2.1 million to three portfolio companies at March 31, 2017. As of March 31, 2017, floating rate loans comprised 67% of OFS Capital’s debt investment portfolio, with the remaining 33% in fixed rate loans, as a percentage of fair value. Interest income increased by $0.5 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016. The increase was primarily due to a $0.6 million increase caused by a 10% increase in the average outstanding loan balance, offset by a $0.1 million decrease caused by a 1% decrease in our weighted average yield in our portfolio for the three months ended March 31, 2017. Acceleration of Net Loan Fees of $0.1 million and $0.1 million were included in interest income for the three months ended March 31, 2017 and 2016, respectively. Fee income decreased by $0.3 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016, primarily due to a decrease in prepayment fees. We recorded prepayment fees of $0.2 million resulting from $16.9 million of unscheduled principal payments during the three months ended March 31, 2017 compared to prepayment fees of $0.5 million resulting from $11.5 million of unscheduled principal payments we recorded during the three months ended March 31, 2016. Incentive fee expense increased by $0.4 million for the three months ended March 31, 2017, compared to the three months ended March 31, 2016. The increase was primarily due to an increase in the accrued Capital Gains Fee during three months ended March 31, 2017. During the three months ended March 31, 2017 we recorded a Capital Gains Fee of $0.3 million compared to a Capital Gains Fee of $(0.1) million recorded during three months ended March 31, 2016, which represents the reversal of the accrued Capital Gains Fee at December 31, 2015. Net gain (loss) on investments consists of the sum of: (a) realized gains and losses from the sale of debt or equity securities, or the redemption of equity securities; and (b) changes in net unrealized appreciation/depreciation on debt and equity investments. In the period in which a realized gain or loss is recognized, such gain or loss will generally be offset by the reversal of previously recognized unrealized appreciation or depreciation, and the net gain recognized in that period will generally be smaller. The unrealized appreciation or depreciation on debt securities is also reversed when those investments are redeemed or paid off prior to maturity. In such instances, the reversal on unrealized appreciation or depreciation will be reported as a net loss or gain, respectively, and may be partially offset by the acceleration of any premium or discount on the debt security in interest income and any prepayment fees on the debt security in fee income. We recognized net losses of $1.6 million on senior secured debt during the three months ended March 31, 2017, primarily as a result of the impact of changes to EBITDA multiples used in our valuations, offset by the positive impact of portfolio company-specific performance factors. We recognized net losses of $0.2 million on subordinated debt during the three months ended March 31, 2017, primarily as a result of the net impact of portfolio company-specific performance factors. We recognized net gains of $3.0 million on preferred equity investments for the three months ended March 31, 2017, primarily as a result of the net impact of changes to EBITDA multiples used in our valuations and the net positive impact of portfolio company-specific performance factors. We recognized net gains of $0.4 million on common equity and warrant investments for the three months ended March 31, 2017, primarily as a result of the impact of changes to EBITDA multiples used in our valuations, offset primarily by the net negative impact of portfolio company-specific performance factors. At March 31, 2017, we had $44.1 million in cash and cash equivalents and $149.9 million in outstanding SBA-guaranteed debentures. As of March 31, 2017, we had $16.3 million available for additional borrowings on our senior secured revolving credit facility with Pacific Western Bank and had drawn all of our available SBA-guaranteed debentures. In April 2017, we completed a public offering of 3,625,000 shares of our common stock at a public offering price of $14.57 per share (the "Offering"). OFS Advisor paid all of the underwriters' sales load and an additional supplemental payment of $0.25 per share, reflecting the difference between the public offering price of $14.57 per share and the net proceeds of $14.82 per share, which also represented the Company's NAV per share at the time of the Offering. All payments made by OFS Advisor are not subject to reimbursement by us. We received net proceeds from this offering of approximately $53.7 million. OFS Capital will host a conference call to discuss these results on Friday, May 5, 2017, at 9:00 AM Eastern Time. Interested parties may participate in the call via the following: INTERNET: Log on to www.ofscapital.com at least 15 minutes prior to the start time of the call to register, download, and install any necessary audio software. A replay will be available for 90 days on OFS Capital’s website at www.ofscapital.com. TELEPHONE: Dial (877) 510-7674 (Domestic) or (412) 902-4139 (International) approximately 15 minutes prior to the call. A telephone replay of the conference call will be available through May 15, 2017, at 9:00 AM Eastern Time and may be accessed by calling (877) 344-7529 (Domestic) or (412) 317-0088 (International) and utilizing conference ID #10106324. For more detailed discussion of the financial and other information included in this press release, please refer to OFS Capital’s Form 10-Q for the first quarter ended March 31, 2017, which will be filed with the Securities and Exchange Commission later today. On a supplemental basis, we disclose Adjusted NII (including on a per share basis), which is a financial measure calculated and presented on a non-GAAP basis. Adjusted NII represents net investment income excluding the net capital gains incentive fee (fee adjustments) in periods in which they occur. Our management agreement with OFS Advisor provides that a capital gains incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized capital losses for such year. Management believes that Adjusted NII is a useful indicator of operations exclusive of any net capital gains incentive fee, as net investment income does not include gains associated with the capital gains incentive fee. In addition, management believes that providing Adjusted NII may facilitate a more complete analysis and greater transparency into OFS Capital’s ongoing operations, particularly in comparing underlying results from period to period, and afford investors a view of results that may be more easily compared to those of other companies. The following table provides a reconciliation from net investment income (the most comparable GAAP measure) to Adjusted NII for the periods presented (dollar amounts in thousands, except per share data): OFS Capital Corporation is an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company. OFS Capital's investment objective is to provide stockholders with both current income and capital appreciation primarily through debt investments and, to a lesser extent, equity investments. OFS Capital invests primarily in privately held middle-market companies in the United States, including lower-middle-market companies, targeting investments of $3 million to $20 million in companies with annual EBITDA between $3 million and $50 million. OFS Capital offers flexible solutions through a variety of asset classes including senior secured loans, which includes first-lien, second-lien and unitranche loans, as well as subordinated loans and, to a lesser extent, warrants and other equity securities. OFS Capital's investment activities are managed by OFS Capital Management, LLC, an investment adviser registered under the Investment Advisers Act of 1940 and headquartered in Chicago, Illinois, with additional offices in New York and Los Angeles. Statements in this press release regarding management's future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to: OFS Capital’s results of operations, including net investment income, net asset value and net investment gains and losses and the factors that may affect such results; management's belief that a larger equity base improves the Company's risk profile and scale; the strength of the direct origination and underwriting platform; and other factors may constitute forward-looking statements for purposes of the safe harbor protection under applicable securities laws. Forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “could,” “could increase the likelihood,” “estimate,” “expect,” “intend,” “is planned,” “may,” “should,” “will,” “will enable,” “would be expected,” “look forward,” “may provide,” “would” or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in OFS Capital’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission under the section “Risk Factors,” as well as other documents that may be filed by OFS Capital from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. OFS Capital is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


PALO ALTO, Calif.--(BUSINESS WIRE)--Hercules Capital, Inc. (NYSE: HTGC) (“Hercules” or the “Company”), the leading specialty financing provider to innovative venture growth stage companies backed by leading venture capital firms, today announced its financial results for the first quarter ended March 31, 2017. The Company also announced that its Board of Directors has declared a first quarter cash distribution of $0.31 per share, that will be payable on May 22, 2017, to shareholders of record as of May 15, 2017. “Our first quarter results represent a solid start to 2017 for Hercules Capital as we originated more than $190 million in new commitments and over $153 million in gross fundings, with eight new innovative venture growth companies added to the portfolio,” said Manuel A. Henriquez, founder, chairman and chief executive officer of Hercules. “During the quarter, we increased total investment income and net investment income by 19.1% and 12.8% year-over-year, respectively, benefitting from our corporate investments and record-setting performance in 2016. We are maintaining our guardedly optimistic outlook for 2017, as evidenced by our strong liquidity position of $343 million in total available liquidity, which positions us well to manage and grow our high-quality credit investment portfolio, while continuing to maintain our disciplined slow and steady growth strategy, and remaining very selective in our underwriting as we cautiously navigate through tightening credit markets and the early stages of the new Trump administration.” Hercules had a solid Q1 2017, having successfully extended debt and equity commitments to thirteen (13) companies including eight (8) new and five (5) existing companies, totaling $191.0 million, and gross fundings of $153.3 million. During the quarter, Hercules realized unscheduled early principal repayments of $100.3 million, along with normal scheduled amortization of $37.5 million, or $137.8 million in total debt repayments. Net debt investment portfolio growth during the first quarter, on a cost basis, was $14.3 million, and on a fair value basis, the portfolio declined modestly by approximately $16.9 million or 1.3%, driven by net unrealized depreciation on our debt investments. The Company’s total investment portfolio, (at cost and fair value) by category, quarter-over-quarter is highlighted below: As of March 31, 2017, 90.9% of the Company’s debt investments were in a “true first-lien” senior secured position. Effective Yields on our debt investment portfolio were 13.4% during Q1 2017, down from the previous quarter of 14.4%, due to older tenure loans compared to loans paid off in Q4 2016 and an overall lower yield composite from one loan placed on non-accrual during Q1. Our effective portfolio yields generally include the effects of fees and income accelerations attributed to early payoffs, and other one-time events. Our effective yields are materially impacted by elevated levels of unscheduled early principal repayments, and are derived by dividing total investment income by the weighted average earning investment portfolio assets outstanding during the quarter, which excludes non-interest earning assets such as warrants and equity investments. Core Yields were at 12.2% during Q1 2017, and at the lower end of our 2017 expected normalized levels of 12.25% to 13.25%. Hercules defines Core Yield as yields that generally exclude any benefit from income related to early debt repayments attributed to the acceleration of unamortized income and prepayment fees, and includes income from expired commitments. Total investment income increased 19.1% for Q1 2017 to $46.4 million, compared to $38.9 million in Q1 2016. The increase is primarily attributable to debt investment portfolio growth, and a greater weighted average principal outstanding of the Company’s debt investment portfolio between the periods. Non-interest and fees expenses increased to $11.2 million in Q1 2017, compared to $10.8 million in Q1 2016. The increase was primarily due to changes in compensation expenses. Interest expense and fees were $12.4 million in Q1 2017, compared to $8.0 million in Q1 2016. The increase was primarily due to the one-time, non-cash acceleration of unamortized fees upon the redemption of our $110.4 million 2019 Notes plus the one-time non-recurring interest expense overlap related to the 30-day advance notice redemption period totaling ~$2.1 million, and a higher weighted average principal balances outstanding on our 6.25% notes due 2024 and our newly issued Convertible Notes. The Company had a weighted average cost of borrowings comprised of interest and fees, of 6.3% in Q1 2017 compared to 5.5% in Q1 2016. The increase was primarily related to the one-time, non-cash acceleration of unamortized fees due to the redemption of our 2019 Notes in Q1 2017. The adjusted weighted average cost of borrowings excluding the one-time redemption and interest overlap expense was 5.7%. NII for Q1 2017 increased to $22.7 million compared to $20.1 million in Q1 2016; or $0.28 per share, based on 81.4 million basic weighted average shares outstanding in Q1 2017, compared to $0.28 per share, based on 71.2 million basic weighted average shares outstanding in Q1 2016. Adjusted NII was $24.8 million, or $0.31 per share, which excludes the one-time cost associated with the $110.4 million redemption of the 2019 Notes plus the additional 30-day notice interest expense. The year-over year increase in net investment income is primarily attributable to the increase in the weighted average loan balance and an increase in unscheduled early debt repayment fees and accelerations. DNOI, a non-GAAP measure, for Q1 2017 was $24.5 million or $0.30 per share, compared to $22.7 million, or $0.32 per share, in Q1 2016. Adjusted DNOI of $26.6 million, or $0.33 per share, excludes the one-time cost associated with the $110.4 million redemption of the 2019 Notes plus the additional 30-day notice interest expense. The increase in DNOI income is primarily attributable to the increase in the weighted average loan balance and an increase in unscheduled early debt repayment fees and accelerations, as well as a slightly lower amount of stock-based compensation, compared to the prior year period. DNOI is a non-GAAP financial measure. The Company believes that DNOI provides useful information to investors and management because it measures Hercules’ operating performance, exclusive of employee stock compensation, which represents expense to the Company, but does not require settlement in cash. DNOI includes income from payment-in-kind, or “PIK”, and back-end fees that are generally not payable in cash on a regular basis, but rather at investment maturity. Hercules believes disclosing DNOI and the related per share measures are useful and appropriate supplements and not alternatives to GAAP measures for net operating income, net income, earnings per share and cash flows from operating activities. Since Hercules’ first origination activities in October 2004, Hercules maintains an aggregate net realized gain (including net loan, warrant and equity activity) on investments, through March 31, 2017, totaling $0.9 million, on a GAAP basis. During Q1 2017, Hercules had net realized gains of $3.2 million, which consisted of gross realized gains of $6.4 million from the sale of five equity positions. These gains were partially offset by gross realized losses of ($3.2) million primarily from the liquidation or write off of the Company’s warrant and equity investment in two portfolio companies and the debt investment in one portfolio company. In January 2017, Hercules sold its remaining 611,442 shares in Box, Inc. for a net realized gain of $4.0 million (cost basis of $4.7 million, $8.7 million in gross proceeds). A break-down of the net unrealized appreciation/(depreciation) in the investment portfolio is highlighted below: During Q1 2017, we recorded ($31.2) million of net unrealized depreciation from our debt, equity and warrant investments. Approximately ($31.2) million was net unrealized depreciation on our debt investments. Approximately ($2.8) million was attributed to net unrealized depreciation on our equity investments and approximately $2.8 million was attributed to net unrealized appreciation on our warrant investments primarily due to the combination of $2.6 million of unrealized appreciation on our private portfolio companies, approximately $2.2 million of unrealized appreciation on our public portfolio offset by ($4.8) million of reversals due to sales and/or write offs. The Company ended Q1 2017 with $343.1 million in available liquidity, including $148.1 million in unrestricted cash and cash equivalents, and $195.0 million in available credit facilities, subject to existing terms and advance rates and regulatory and covenant requirements. This was enhanced by the $230.0 million Convertible Notes issuance in early Q1 2017, which was partially used to fully tender and retire our $110.4 million 2019 Notes. In Q1 2017, the Company sold 3.3 million shares of common stock for total accumulated net proceeds of approximately $46.9 million under its at-the-market “ATM” equity distribution agreement, all accretive to net asset value “NAV” at a price-to-book of 1.47x. As of March 31, 2017, approximately 751,000 shares remain available for issuance and sale under the equity distribution agreement. In Q1 2017, the Company sold 225,475 of its par $25.00 bonds for net proceeds of approximately $5.7 million under its ATM debt distribution agreement. In January 2017, the Company issued $230.0 million of Convertible Notes, which amount includes the additional $30.0 million aggregate principal amount of Convertible Notes issued pursuant to the initial purchaser’s exercise in full of its overallotment option. The Convertible Notes were sold only to qualified institutional buyers (as defined in the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Rule 144A under the Securities Act. In addition, the Company redeemed 100% or approximately $110.4 million (face value) in remaining issued and outstanding aggregate principal amount of the 2019 Notes. The redemption price was par $25.00 per Note plus accrued and unpaid interest through, but excluding, the redemption date, February 24, 2017. The one-time acceleration expense associated with the redemption of the 2019 Notes is approximately $1.5 million. As of March 31, 2016, Hercules has two committed credit facilities with Wells Fargo Capital Finance (“WFCF”), part of Wells Fargo & Company (NYSE: WFC) (the “Wells Fargo Facility”) and Union Bank (the “Union Bank Facility”) for $120.0 million and $75.0 million, respectively. The Wells Fargo and Union Bank Facilities both include an accordion feature that enables the Company to increase the existing facilities to a maximum value of $300.0 million and $200.0 million, respectively, or $500.0 million in aggregate. Pricing at March 31, 2016 under the Wells Fargo Facility and Union Bank Facility were both LIBOR+3.25% with no LIBOR floor. Hercules’ regulatory leverage, or debt to equity ratio, excluding our Small Business Administration “SBA” debentures was 73.0% and net regulatory leverage (excluding cash of approximately $148.1 million) of 54.7%, as of March 31, 2017. Hercules’ GAAP leverage ratio, including our SBA debentures, was 96.6%, as of March 31, 2017. Hercules has an order from the Securities and Exchange Commission “SEC” granting it exemptive relief, thereby allowing it to exclude from its regulatory leverage limitations (1:1) of all its outstanding SBA debentures of $190.2 million, providing the Company with the potential capacity to add leverage of $218.0 million to its balance sheet as of March 31, 2017, bringing the maximum potential leverage to $998.1 million, or 123.5% (1.24:1), if it had access to such additional leverage. Combined with our cash position of $148.1 million, Hercules would be able to grow its total investment portfolio in excess of $1.7 to $1.8 billion. As of March 31, 2017, the Company’s asset coverage ratio under our regulatory requirements as a business development company was 236.9%, excluding the SBA debentures, as a result of our exemptive order from the SEC. Available Unfunded Commitments – Representing only 5.4% of debt investment balance, at cost The Company’s unfunded commitments and contingencies consist primarily of unused commitments to extend credit in the form of loans to select portfolio companies. A portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones in order to gain access to additional funding. Furthermore, our credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments. In addition, since a portion of these commitments may also expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As of March 31, 2017, the Company had $75.9 million of available unfunded commitments at the request of portfolio companies and unencumbered by any milestones, including undrawn revolving facilities, representing 5.4% of Hercules’ debt investment balance, at cost. This increased from the previous quarter of $59.7 million of available unfunded commitments at the request of portfolio companies or 4.3% of Hercules’ debt investment balance, at cost. After closing over $190.0 million in new commitments in Q1 2017, Hercules finished Q1 2017 with $20.0 million in signed non-binding term sheets outstanding. Since the close of Q1 2017 and as of May 3, 2017, Hercules closed debt and equity commitments of $0.75 million to new and existing portfolio companies, and funded $0.75 million. Signed non-binding term sheets are subject to satisfactory completion of Hercules’ due diligence and final investment committee approval process as well as negotiations of definitive documentation with the prospective portfolio companies. These non-binding term sheets generally convert to contractual commitments in approximately 90 days from signing. It is important to note that not all signed non-binding term sheets are expected to close and do not necessarily represent future cash requirements or investments. As of March 31, 2017, the Company’s net assets were $807.9 million, compared to $787.9 million at the end of Q4 2016, an increase of 2.5%. NAV per share decreased to $9.76 on 82.8 million outstanding shares as of March 31, 2017, compared to $9.90 on 79.6 million outstanding shares as of December 31, 2016. The decrease in NAV per share was primarily attributed to the unrealized depreciation on the debt investment portfolio, which was partially offset by the accretive issuance of equity under our ATM program above NAV, which was accretive at a price-to-book of 1.47x. As of March 31, 2017, the weighted average grade of the debt investment portfolio, on a cost basis, was 2.43, compared to 2.41 as of December 31, 2016, based on a scale of 1 to 5, with 1 being the highest quality. Hercules’ policy is to generally adjust the grading down on its portfolio companies as they approach the need for additional equity capital, thereby increasing our Grade 3 rated investments. Additionally, we may downgrade our portfolio companies if they are not meeting our financing criteria or are underperforming relative to their respective business plans. Various companies in our portfolio will require additional funding in the near term or have not met their business plans and therefore have been downgraded until their funding is complete or their operations improve. The change in weighted average investment grading as of March 31, 2017 from December 31, 2016 is due to the marginal increase in Grade 4 and 5 investments from 13.8% in Q4 2016 to 14.0% in Q1 2017. As of March 31, 2017, grading of the debt investment portfolio at fair value, excluding warrants and equity investments, was as follows: As of March 31, 2017, the Company had seven debt investments on non-accrual with a cumulative investment cost and approximate fair value of $107.5 million and $18.8 million, respectively, or 7.0% and 1.3% as a percentage of our total investment portfolio at cost and value, respectively. As of December 31, 2016, the Company had five debt investments on non-accrual with cumulative investment cost and fair value of approximately $43.9 million and $6.2 million, respectively. High Asset Sensitivity – Expected Increase in Prime Rate Will Benefit Hercules Significantly – Will Help Drive Future Earnings Growth We have purposely constructed a very asset sensitive debt investment portfolio and have structured our debt borrowings for any eventual increases in market rates that may occur in the near future. With 92.8% of our debt investment portfolio being priced at floating interest rates as of March 31, 2017, with a Prime or LIBOR-based interest rate floor, coupled with 100% of our outstanding debt borrowings bearing fixed interest rates, this leads to higher net investment income to our shareholders. Based on our Consolidated Statement of Assets and Liabilities as of March 31, 2017, the following table shows the approximate annualized increase in components of net income resulting from operations of hypothetical base rate changes in interest rates, such as Prime Rate, assuming no changes in our debt investments and borrowings. These estimates are subject to change due to the impact from active participation in the Company’s equity ATM program. We expect each 25 bps increase in the Prime Rate to contribute approximately $2.4 million, or $0.03 per share, of net investment income annually. Hercules held equity positions in 55 portfolio companies with a fair value of $62.3 million and a cost basis of $79.2 million as of March 31, 2017. On a fair value basis, 11.8% or $7.4 million is related to existing public equity positions, at March 31, 2017. Hercules held warrant positions in 142 portfolio companies with a fair value of $32.0 million and a cost basis of $46.6 million as of March 31, 2017. Portfolio Company IPO, M&A and Other Activity in Q1 2017 As of March 31, 2017, Hercules held warrant and equity positions in six (6) portfolio companies that had filed Registration Statements in contemplation of a potential IPO, including: There can be no assurances that companies that have yet to complete their IPOs will do so. The Board of Directors has declared a first quarter cash distribution of $0.31 per share. This distribution would represent the Company’s 47th consecutive distribution declaration since its IPO, bringing the total cumulative distribution declared to date to $13.09 per share. The following shows the key dates of our first quarter 2017 distribution payment: Hercules' Board of Directors maintains a variable distribution policy with the objective of distributing four quarterly distributions in an amount that approximates 90% to 100% of the Company’s taxable quarterly income or potential annual income for a particular year. In addition, at the end of the year, the Company’s Board of Directors may choose to pay an additional special distribution, or fifth distribution, so that the Company may distribute approximately all its annual taxable income in the year it was earned, or it can elect to maintain the option to spill over the excess taxable income into the coming year for future distribution payments. The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of its distributions for a full year. Of the distributions declared during the quarter ended March 31, 2017, 100% were distributions derived from the Company’s current and accumulated earnings and profits. There can be no certainty to stockholders that this determination is representative of what the tax attributes of the Company’s 2017 distributions to stockholders will be. The table below summarizes our year-to-date closed and pending commitments as follows: Hercules has scheduled its first quarter 2017 financial results conference call for May 4, 2017 at 2:00 p.m. PDT (5:00 p.m. EDT). To listen to the call, please dial (877) 304-8957 (or (408) 427-3709 internationally) and reference Conference ID: 7906232 if asked, approximately 10 minutes prior to the start of the call. A taped replay will be made available approximately three hours after the conclusion of the call and will remain available for seven days. To access the replay, please dial (855) 859-2056 or (404) 537-3406 and enter the passcode 7906232. Hercules Capital, Inc. (NYSE: HTGC) (“Hercules”) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than $6.7 billion to over 375 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing. Companies interested in learning more about financing opportunities should contact info@htgc.com, or call 650.289.3060. Hercules’ common stock trades on the New York Stock Exchange (NYSE) under the ticker symbol "HTGC." In addition, Hercules has one outstanding bond issuance of 6.25% Unsecured Notes due July 2024 (NYSE: HTGX). This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act. The information disclosed in this press release is made as of the date hereof and reflects Hercules most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Hercules believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events. Distributable Net Operating Income, “DNOI” represents net investment income as determined in accordance with GAAP, adjusted for amortization of employee restricted stock awards and stock options. Hercules views DNOI and the related per share measures as useful and appropriate supplements to net operating income, net income, earnings per share and cash flows from operating activities. DNOI is a non-GAAP financial measure. The Company believes that DNOI provides useful information to investors and management because it serves as an additional measure of Hercules’ operating performance exclusive of employee restricted stock amortization, which represents expenses of the Company but does not require settlement in cash. DNOI does include PIK interest and back end fee income which are generally not payable in cash on a regular basis, but rather at investment maturity or when declared. DNOI should not be considered as an alternative to net operating income, net income, earnings per share and cash flows from operating activities (each computed in accordance with GAAP). Instead, DNOI should be reviewed in connection with net operating income, net income (loss), earnings (loss) per share and cash flows from operating activities in Hercules’ consolidated financial statements, to help analyze how Hercules’ business is performing. Net leverage ratio is calculated by deducting the outstanding cash at March 31, 2017 of $148.1 million from total principal outstanding of $780.1 million divided by our total equity of $807.9 million, resulting in a net leverage ratio of 78.2%. Net leverage ratio is a non-GAAP measure and is not intended to replace financial performance measures determined in accordance with GAAP. Rather, they are presented as additional information because management believes they are useful indicators of the current financial performance of the Company’s core businesses.


RESTON, Va., March 1, 2017 /PRNewswire/ -- NII Holdings, Inc. NASDAQ: NIHD today announced that Nextel Brazil, its wholly-owned operating subsidiary, entered into amendments to its credit agreements with Banco do Brazil and Caixa Econômica Federal. Additionally, Nextel Brazil has...


PALO ALTO, Calif.--(BUSINESS WIRE)--Hercules Capital, Inc. (NYSE:HTGC) (“Hercules” or the “Company”), the leading specialty financing provider to innovative venture growth stage companies backed by leading venture capital firms, today announced its financial results for the fourth quarter and fiscal-year ended December 31, 2016. The Company announced that its Board of Directors has declared a fourth quarter cash distribution of $0.31 per share, that will be payable on March 13, 2017, to shareholders of record as of March 6, 2017. “2016 was an outstanding year for Hercules. We delivered consistently strong financial and operational results, which demonstrated the continued success of our premier venture lending franchise, culminating in several new historical records, and generating significant earnings spillover for the third consecutive year,” said Manuel A. Henriquez, founder, chairman and chief executive officer of Hercules. “Notably, we surpassed our full-year portfolio target of $1.35 billion in total debt investments, delivered remarkable fourth quarter operating performance on both a GAAP basis and on an adjusted basis with adjusted NII per share of $0.33 and adjusted NII margin of 53%, which excluded the benefit of our one-time litigation settlement, and maintained an outstanding adjusted return on average equity “ROAE” of 13.4%, driven by $219 million in new fundings. As a result of this success, combined with our considerably strong liquidity, we remain well positioned to continue growing our debt investment portfolio and have established a new portfolio target of $1.6 billion, subject to continued favorable market conditions.” Henriquez continued, “During 2015, we made the critical decision to invest in our future and strengthen our organization, which caused our NII to fall below our existing distribution. However, we believed in our team and our franchise, and made those critical investments and relied upon our distribution spill-over to ensure we would not need to cut our distribution attributed to the shortfall. As you can see today, that decision was the right one for the benefit of our shareholders, as our NII earnings grew 65% from $0.20 per share in Q1 2015 to an adjusted $0.33 in Q4 2016, while also building an earnings/distribution spill-over of approximately $0.43 for potential future distributions to our shareholders. By leveraging those key investments made in 2015 in both our infrastructure and our originations platform, it has allowed us to not only achieve the scale that drove our record results in 2016, but to continue to benefit our shareholders for years to come.” Henriquez added, “These results reflect the hard work and diligent execution of our underwriting team, which generated new fundings of over $680 million in 2016, leading to total net investment portfolio growth of over $259 million for the year, despite strong early loan repayments totaling approximately $324 million. Our sizeable and growing debt investment portfolio continues to exemplify our strong brand reputation and industry leadership position as the largest BDC venture lender. Looking forward, we maintain a solid deal pipeline that provides a number of new opportunities to prudently and selectively deploy capital in our target markets.” Henriquez concluded, “Finally, and in typical Hercules fashion, we continue to take proactive steps to focus on our business, strengthen our balance sheet and maintain access to liquidity for growth, at terms that are favorable for our shareholders. Within the first few weeks of 2017, we completed the issuance of a new Convertible Bond offering, which raised gross proceeds of $230 million and was upsized by more than 50 percent from an initial offering of $150 million due to the significant demand from institutional investors. This financing is not only accretive to shareholders, but expands our liquidity by an additional $115 million, after retiring our higher-cost notes of $110 million, and will allow us to continue our growth through mid-2017 and beyond. In addition, we have remained active with our equity ATM program during the first few weeks of 2017, having successfully issued nearly $50 million of common stock above NAV for the benefit of our shareholders. This additional liquidity further allows us to effectively manage our leverage and amplify our liquidity for continued growth in our investment portfolio.” Hercules had a strong Q4 2016, having successfully extended debt and equity commitments to thirteen (13) existing companies and nine (9) new companies, totaling $213.1 million, and gross fundings of $219.2 million. During the quarter, Hercules realized higher-than-anticipated unscheduled early principal repayments of $67.2 million, along with normal scheduled amortization of $33.3 million, or $100.5 million in total debt repayments. Net debt investment portfolio growth during the fourth quarter, on a cost basis, was $109.0 million, higher than our desired target, driven by a higher volume of newly funded commitments and milestone-based conversion of unfunded commitments. The Company’s total investment portfolio, (at cost and fair value) by category, quarter-over-quarter and year-over-year are highlighted below: As of December 31, 2016, 91.8% of the Company’s debt investments were in a “true first-lien” senior secured position. Effective Yields on our debt investment portfolio was 14.4% during Q4 2016, down slightly from the previous quarter of 14.6%, due to a lower level of unscheduled early debt repayments. We had $84.2 million of unscheduled early debt repayments in Q3 2016 compared to $67.2 million in Q4 2016, or a decrease of 20.2%. Our effective portfolio yields generally include the effects of fees and income accelerations attributed to early payoffs, and other one-time events. Our effective yields are materially impacted by elevated levels of unscheduled early principal repayments, and are derived by dividing total investment income by the weighted average earning investment portfolio assets outstanding during the quarter, which excludes non-interest earning assets such as warrants and equity investments. Core Yields were steady at 12.9% during Q4 2016, and within our 2016 expected normalized levels of 12.5% to 13.5%. We are anticipating that in 2017, our new expected normalized range to be 12.25 to 13.25%. Hercules defines Core Yield as yields that generally exclude any benefit from income related to early debt repayments attributed to the acceleration of unamortized income and prepayment fees, and includes income from expired commitments. Total investment income increased 20.6% for Q4 2016 to $47.5 million, compared to $39.4 million in Q4 2015. The increase is primarily attributable to debt investment portfolio growth, and a greater weighted average principal outstanding of the Company’s debt investment portfolio between the periods. Non-interest and fees expenses increased to $12.3 million in Q4 2016 versus $9.8 million for Q4 2015. The increase was primarily due to changes in variable compensation related to origination activities and stock-based compensation. Interest expense and fees were $10.1 million, compared to $9.5 million in Q4 2015. The increase was primarily due to the issuance of $149.9 million of our 6.25% 2024 Notes during the period, offset by the retirement of our Convertible Debt and paydowns on our 2019 Notes in the prior year. The Company had a weighted average cost of borrowings comprised of interest and fees, of 5.9% in Q4 2016 versus 6.2% during Q4 2015. The decrease was primarily related to a reduction in the acceleration of unamortized fees from the retirement of $60 million of our 7.0% 2019 Notes in 2015, offset by the issuance of $149.9 million of 6.25% 2024 Notes during 2016. NII for Q4 2016 increased to $33.1 million, or $0.43 per share, based on 76.9 million basic weighted average shares outstanding, compared to $20.1 million, $0.28 per share, based on 71.2 million basic weighted average shares outstanding in Q4 2015. Removing the one-time benefit of the litigation income of $8.0 million, our adjusted Q4 2016 performance was very strong at $25.1 million or $0.33 per share, which was a 25% improvement over Q4 2015. The increase is primarily attributable to the increase in the weighted average loan balance and the decrease in total operating expenses compared to the prior year period. DNOI, a non-GAAP measure, for Q4 2016 was $34.5 million or $0.45 per share, compared to $22.3 million, or $0.31 per share, in Q4 2015. The increase is primarily attributable to the one-time benefit of the litigation income, the increase in the weighted average loan balance offset by decrease in unscheduled early debt repayment fees and accelerations, as well as a slightly lower amount of stock-based compensation, compared to the prior year period. DNOI is a non-GAAP financial measure. The Company believes that DNOI provides useful information to investors and management because it measures Hercules’ operating performance, exclusive of employee stock compensation, which represents expense to the Company, but does not require settlement in cash. DNOI includes income from payment-in-kind, or “PIK”, and back-end fees that are generally not payable in cash on a regular basis, but rather at investment maturity. Hercules believes disclosing DNOI and the related per share measures are useful and appropriate supplements and not alternatives to GAAP measures for net operating income, net income, earnings per share and cash flows from operating activities. Since Hercules’ first origination activities commencing in October 2004, the aggregate net realized loss (including warrant and equity gains) on investments, through December 31, 2016, totaled ($2.3) million, on a GAAP basis. When compared to cumulative new debt commitments during the same period of over $6.5 billion, the net cumulative realized loss since inception represents approximately 4 basis points “bps” or 0.04% of cumulative debt commitments, or an effective approximate annualized loss rate of 0 bps or 0.00%. During Q4 2016, Hercules had net realized gains of $1.1 million, which consisted of gross realized gains of $1.6 million primarily from the sale of four equity positions. These gains were partially offset by gross realized losses of ($0.4) million primarily from the write-off of four warrants and equity investments. A break-down of the net unrealized appreciation/(depreciation) in the investment portfolio is highlighted below: During Q4 2016, we recorded ($19.9) million of net unrealized depreciation from our debt, equity and warrant investments. Approximately ($4.3) million was net unrealized depreciation on our debt investments. Approximately ($13.7) million was attributed to net unrealized depreciation on our equity investments and approximately ($2.0) million was attributed to net unrealized depreciation on our warrant investments primarily due to ($0.8) million of unrealized depreciation on our private portfolio companies and approximately ($1.4) million of unrealized depreciation on our public portfolio. The Company ended Q4 2016 with $203.0 million in available liquidity, including $13.0 million in unrestricted cash and cash equivalents, and $190.0 million in available credit facilities, subject to existing terms and advance rates and regulatory and covenant requirements. This was further enhanced by the $230 million Convertible Bond issued in early Q1 2017, which will partially be used to fully tender and retire our $110.4 million 7.00% 2019 Notes. During Q4 2016, Hercules sold 3.2 million shares of common stock under its At-the-Market “ATM” equity distribution agreement, for total accumulated net proceeds of $42.7 million, all accretive to net asset value. For 2016, Hercules sold 7.3 million shares of common stock for total net proceeds of $92.8 million, all issuances accretive to net asset value. During Q4 2016, we entered into the debt capital markets with our ATM debt distribution program, selling 317,125 of our par $25.00 bonds for total net proceeds of $8.0 million. As of December 31, 2016, Hercules has two committed credit facilities with Wells Fargo Capital Finance (“WFCF”), part of Wells Fargo & Company (NYSE: WFC) and Union Bank for $120.0 million and $75.0 million, respectively. The Wells Fargo and Union Bank Facilities both include an accordion feature that enables the Company to increase the existing facilities to a maximum value of $300.0 million and $200.0 million, respectively, or $500.0 million in aggregate. Pricing at December 31, 2016 under the Wells Fargo Facility and Union Bank Facility were both LIBOR+3.25% with no LIBOR floor. Total outstanding at the end of Q4 2016 was $5.0 million, which was fully repaid in January 2017. Hercules’ regulatory leverage, or debt to equity ratio, excluding our SBA debentures was 60.6%, as of December 31, 2016. Hercules’ GAAP leverage ratio, including our SBA debentures, was 84.7%, as of December 31, 2016. Hercules has an SEC order granting it exemptive relief, thereby allowing it to exclude from its regulatory leverage limitations (1:1) of all its outstanding SBA debentures of $190.2 million, providing the Company with the potential capacity to add leverage of $310.5 million to its balance sheet as of December 31, 2016, bringing the maximum potential leverage to $978.1 million, or 124.1% (1.24:1), if it had access to such additional leverage. As of December 31, 2016, the Company’s asset coverage ratio under our regulatory requirements as a business development company was 265.0%, excluding the SBIC debentures, as a result of our exemptive order from the SEC. Available Unfunded Commitments – Representing only 4.3% of debt investment balance, at cost The Company’s unfunded commitments and contingencies consist primarily of unused commitments to extend credit in the form of loans to select Company’s portfolio companies. A portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones in order to gain access to additional funding. Furthermore, our credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments. In addition, since a portion of these commitments may also expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As of December 31, 2016, the Company had $59.7 million of available unfunded commitments at the request of the portfolio company and unencumbered by any milestones, including undrawn revolving facilities, representing 4.3% of Hercules’ debt investment balance, at cost. This was decreased from the previous quarter of $73.9 million of available unfunded commitments at the request of the portfolio company or 5.8% of Hercules’ debt investment balance, at cost. Hercules finished Q4 2016 with $55.0 million in signed non-binding term sheets outstanding to four new companies. Since the close of Q4 2016 and as of February 20, 2017, Hercules closed debt and equity commitments of $72.9 million to new and existing portfolio companies, and funded $67.5 million. Signed non-binding term sheets are subject to satisfactory completion of Hercules’ due diligence and final investment committee approval process as well as negotiations of definitive documentation with the prospective portfolio companies. These non-binding term sheets generally convert to contractual commitments in approximately 90 days from signing. It is important to note that not all signed non-binding term sheets are expected to close and do not necessarily represent future cash requirements or investments. As of December 31, 2016, the Company’s net assets were $787.9 million, compared to $753.6 million at the end of Q3 2016, an increase of 4.6%. Net asset value per share increased to $9.90 on 79.6 million outstanding shares as of December 31, 2016, compared to $9.86 on 76.4 million outstanding shares as of September 30, 2016. The change in net assets and NAV per share was primarily attributed to the accretive issuance of equity under our ATM program above NAV, which was accretive at a price-to-book of 1.38x, and the change in unrealized depreciation in the Q4 2016. As of December 31, 2016, the weighted average grade of the debt investment portfolio, on a cost basis, was 2.41, compared to 2.32 as of September 30, 2016, based on a scale of 1 to 5, with 1 being the highest quality. Hercules’ policy is to generally adjust the grading down on its portfolio companies as they approach the need for additional equity capital, thereby increasing our Grade 3 rated investments. Our policy is to lower the grading on our portfolio companies as they approach the point in time when they will require additional equity capital. Additionally, we may downgrade our portfolio companies if they are not meeting our financing criteria or are underperforming relative to their respective business plans. Various companies in our portfolio will require additional funding in the near term or have not met their business plans and therefore have been downgraded until their funding is complete or their operations improve. The change in weighted average investment grading as of December 31, 2016 from September 30, 2016 is due to the increase in Grade 5 investments between the periods, primarily due to one portfolio company. As of December 31, 2016, grading of the debt investment portfolio at fair value, excluding warrants and equity investments, was as follows: As of December 31, 2016, the Company had five debt investments on non-accrual with a cumulative investment cost and approximate fair value of $43.9 million and $6.2 million, respectively, or 2.9% and 0.4% as a percentage of our total investment portfolio at cost and value, respectively. As of September 30, 2016, the Company had six debt investments on non-accrual with cumulative investment cost and fair value of approximately $46.2 million and $9.3 million, respectively. High Asset Sensitivity – Expected Increase in PRIME Rate Will Benefit Hercules Significantly – Will Help Drive Future Earnings Growth We have purposely constructed a very asset sensitive debt investment portfolio and have structured our debt borrowings for any eventual increases in market rates that may occur in the near future. With 92.1% of our debt investment portfolio being priced at floating interest rates as of December 31, 2016, with a Prime or LIBOR-based interest rate floor, coupled with 99.2% of our outstanding debt borrowings bearing fixed interest rates, this leads to higher net investment income to our shareholders. Based on our Consolidated Statement of Assets and Liabilities as of December 31, 2016, the following table shows the approximate annualized increase in components of net income resulting from operations of hypothetical base rate changes in interest rates, such as prime rate, assuming no changes in our debt investments and borrowings. These estimates are subject to change due to the impact from active participation in the Company’s equity ATM program. We expect each 25 bps increase in the Prime Rate to contribute approximately $1.9 million, or $0.02 per share, of net investment income annually. Hercules held equity positions in 58 portfolio companies with a fair value of $67.6 million and a cost basis of $81.6 million as of December 31, 2016. On a fair value basis, 25.5% or $17.3 million is related to existing public equity positions, primarily concentrated in Box, Inc., which had a fair value of $8.5 million, compared to a cost basis of $4.7 million, at December 31, 2016. Hercules held warrant positions in 140 portfolio companies with a fair value of $27.5 million and a cost basis of $45.0 million as of December 31, 2016. Hercules’ historical realized gross warrant/equity multiples generally range from 1.0x to 29.2x, with an average historical gross warrant/equity multiple of 3.74x and a weighted average fully realized internal rate of return (“IRR”) of approximately 24.2%. There can be no assurances that companies that have yet to complete their IPOs will do so. The Board of Directors has declared a fourth quarter cash distribution of $0.31 per share. This distribution would represent the Company’s 46th consecutive distribution declaration since its IPO, bringing the total cumulative distribution declared to date to $12.78 per share. The following shows the key dates of our fourth quarter 2016 distribution payment: Hercules' Board of Directors maintains a variable distribution policy with the objective of distributing four quarterly distributions in an amount that approximates 90% to 100% of the Company’s taxable quarterly income or potential annual income for a particular year. In addition, at the end of the year, the Company’s Board of Directors may choose to pay an additional special distribution, or fifth distribution, so that the Company may distribute approximately all its annual taxable income in the year it was earned, or it can elect to maintain the option to spill over the excess taxable income into the coming year for future distribution payments. The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of its distributions for a full year. Of the distributions declared during the quarter ended December 31, 2016, 100% were distributions derived from the Company’s current and accumulated earnings and profits. There can be no certainty to stockholders that this determination is representative of what the tax attributes of the Company’s 2016 distributions to stockholders will be. The table below summarizes our year-to-date closed and pending commitments as follows: Hercules has scheduled its fourth quarter and full-year 2016 financial results conference call for February 23, 2017 at 2:00 p.m. PST (5:00 p.m. EST). To listen to the call, please dial (877) 304-8957 (or (408) 427-3709 internationally) and reference Conference ID: 65328328 if asked, approximately 10 minutes prior to the start of the call. A taped replay will be made available approximately three hours after the conclusion of the call and will remain available for seven days. To access the replay, please dial (855) 859-2056 or (404) 537-3406 and enter the passcode 653283328. Hercules Capital, Inc. (NYSE: HTGC) (“Hercules”) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than $6.5 billion to over 370 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing. Companies interested in learning more about financing opportunities should contact info@htgc.com, or call 650.289.3060. Hercules’ common stock trades on the New York Stock Exchange (NYSE) under the ticker symbol "HTGC." In addition, Hercules has three outstanding bond issuances of: This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act. The information disclosed in this press release is made as of the date hereof and reflects Hercules most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Hercules believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events. Distributable Net Operating Income, “DNOI” represents net investment income as determined in accordance with U.S. generally accepted accounting principles, or GAAP, adjusted for amortization of employee restricted stock awards and stock options. Hercules views DNOI and the related per share measures as useful and appropriate supplements to net operating income, net income, earnings per share and cash flows from operating activities. DNOI is a non-GAAP financial measure. The Company believes that DNOI provides useful information to investors and management because it serves as an additional measure of Hercules’ operating performance exclusive of employee restricted stock amortization, which represents expenses of the Company but does not require settlement in cash. DNOI does include paid-in-kind, or PIK, interest and back end fee income which are generally not payable in cash on a regular basis, but rather at investment maturity or when declared. DNOI should not be considered as an alternative to net operating income, net income, earnings per share and cash flows from operating activities (each computed in accordance with GAAP). Instead, DNOI should be reviewed in connection with net operating income, net income (loss), earnings (loss) per share and cash flows from operating activities in Hercules’ consolidated financial statements, to help analyze how Hercules’ business is performing. Net leverage ratio is calculated by deducting the outstanding cash at December 31, 2016 of $13.0 million from total debt of $667.7 million divided by our total equity of $787.9 million, resulting in a net leverage ratio of 83.1%. Net leverage ratio is a non-GAAP measure and is not intended to replace financial performance measures determined in accordance with GAAP. Rather, they are presented as additional information because management believes they are useful indicators of the current financial performance of the Company’s core businesses.


News Article | February 15, 2017
Site: www.businesswire.com

WHEATON, Ill.--(BUSINESS WIRE)--The Board of Trustees of First Trust Energy Infrastructure Fund (the “Fund”) (NYSE: FIF), CUSIP 33738C103, previously approved a managed distribution policy for the Fund (the “Managed Distribution Plan”) in reliance on exemptive relief received from the Securities and Exchange Commission which permits the Fund to make periodic distributions of long-term capital gains as frequently as monthly each tax year. The Fund has declared a distribution payable on February 15, 2017, to shareholders of record as of February 3, 2017, with an ex-dividend date of February 1, 2017. This Notice is meant to provide you information about the sources of your Fund’s distributions. You should not draw any conclusions about the Fund’s investment performance from the amount of its distribution or from the terms of its Managed Distribution Plan. The following tables set forth the estimated amounts of the current distribution and the cumulative distributions paid this fiscal year to date for the Fund from the following sources: net investment income (“NII”); net realized short-term capital gains (“STCG”); net realized long-term capital gains (“LTCG”); and return of capital (“ROC”). These estimates are based upon information as of January 31, 2017, are calculated based on a generally accepted accounting principles (“GAAP”) basis and include the prior fiscal year-end undistributed net investment income. The amounts and sources of distributions are expressed per common share. The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. You should not use this Notice as a substitute for your Form 1099-DIV. Energy Income Partners, LLC (“EIP”) serves as the Fund’s investment sub-advisor and provides advisory services to a number of investment companies and partnerships for the purpose of investing in MLPs and other energy infrastructure securities. EIP is one of the early investment advisors specializing in this area. As of January 31, 2017, EIP managed or supervised approximately $5.8 billion in client assets. Principal Risk Factors: The Fund is subject to risks, including the fact that it is a non-diversified closed-end management investment company. Because the Fund is concentrated in securities issued by energy infrastructure companies, it will be more susceptible to adverse economic or regulatory occurrences affecting that industry, including high interest costs, high leverage costs, the effects of economic slowdown, surplus capacity, increased competition, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. The Fund invests in securities of non-U.S. issuers which are subject to higher volatility than securities of U.S. issuers. Because the Fund invests in non-U.S. securities, you may lose money if the local currency of a non-U.S. market depreciates against the U.S. dollar. There can be no assurance as to what portion of the distributions paid to the Fund's Common Shareholders will consist of tax-advantaged qualified dividend income. Use of leverage can result in additional risk and cost, and can magnify the effect of any losses. The risks of investing in the Fund are spelled out in the shareholder reports and other regulatory filings. Certain statements made in this press release that are not historical facts are referred to as “forward-looking statements” under the U.S. federal securities laws. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ from those anticipated in any forward-looking statements. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Fund undertakes no responsibility to update publicly or revise any forward-looking statements.


GREENWICH, Conn.--(BUSINESS WIRE)--Eagle Point Credit Company Inc. (the “Company”) (NYSE:ECC)(NYSE:ECCA)(NYSE:ECCB)(NYSE:ECCZ) today announced financial results for the quarter and fiscal year ended December 31, 2016, net asset value (“NAV”) as of December 31, 2016 and certain portfolio activity through February 15, 2017. “2016 was a great year for the Company as we more than doubled our CLO equity assets and the cash flow generated from our portfolio remained strong,” said Thomas Majewski, Chief Executive Officer. “We are excited to announce today the shift to a monthly distribution program for our common stock. As a result of this shift, shareholders will receive cash distributions sooner than they would have received them under the prior quarterly program.” “In addition, the Company successfully completed several successful equity and debt capital raises in 2016,” added Mr. Majewski. “In the fourth quarter alone, we priced two preferred stock offerings and one common stock offering, delivering net proceeds of $63 million to the Company after the payment of underwriting discounts and commissions and offering expenses. This allowed us to deploy the capital into new investments using our deep experience in the market with the objective of creating long-term value for our shareholders.” The Company’s NII and realized capital gains for the quarter ended December 31, 2016 was $0.54 per weighted average common share, which reflects the impact of an estimated $0.04 per share excise tax charge related to the Company’s undistributed income for its recently completed tax year. Excluding the excise tax charge, the Company’s NII and realized capital gains per weighted average common share for the quarter was $0.58, compared to $0.54 per weighted average common share for the quarter ended September 30, 2016, and $0.53 per weighted average common share for the quarter ended December 31, 2015. For the quarter ended December 31, 2016, the Company recorded net income of $23.4 million, or $1.51 per weighted average common share. Net income was comprised of total investment income of $15.1 million, net unrealized appreciation (or unrealized mark-to-market gain on investments) of $14.9 million and realized capital gains on investments of $1.1 million, partially offset by total expenses of $7.7 million. NAV as of December 31, 2016 was $288.0 million, or $17.48 per common share, an increase of $0.82 per common share from the Company’s NAV as of September 30, 2016, and an increase of $3.76 per common share from the Company’s NAV as of December 31, 2015. During the quarter ended December 31, 2016, the Company deployed $125.0 million in capital which included $102.1 million in CLO equity investments. The weighted average effective yield of new CLO equity investments made by the Company during the quarter was 16.51% as measured at the time of investment. The weighted average effective yield of these CLO equity investments includes a provision for credit losses. Additionally, during the quarter, the Company received $58.0 million of proceeds from the liquidation of investments, resulting in $1.1 million of realized gains. During the quarter ended December 31, 2016, the Company received $25.5 million of cash distributions from its investment portfolio, or $1.64 per weighted average common share. As of December 31, 2016, the weighted average effective yield on the Company’s CLO equity portfolio was 17.48%, compared to 17.27% as of September 30, 2016 and 16.68% as of December 31, 2015. For the fiscal year ended December 31, 2016, the Company recorded net income of $90.6 million. Fiscal year net income was comprised of total investment income of $55.9 million, net unrealized appreciation (or unrealized mark-to-market gain on investments) of $57.3 million and realized capital gains on investments of $1.9 million, partially offset by total expenses of $24.5 million. For the fiscal year ended December 31, 2016, the Company received a total of $92.1 million of cash payments from its portfolio, or $6.25 per weighted average common share. As of December 31, 2016 on a look-through basis, and based on the most recent CLO trustee reports received by such date, the Company had indirect exposure to approximately 1,151 unique corporate obligors. The largest look-through obligor represented 1.0% of the Company’s CLO equity and loan accumulation facility portfolio. The top-ten largest look-through obligors together represented 6.9% of the Company’s CLO equity and loan accumulation facility portfolio. As of December 31, 2016, the Company had debt and preferred securities outstanding which totaled approximately 35% of its total assets (less current liabilities). FIRST QUARTER 2017 PORTFOLIO ACTIVITY THROUGH FEBRUARY 15, 2017 AND OTHER UPDATES From January 1, 2017 through February 15, 2017, the Company received cash distributions on its investment portfolio totaling $24.6 million, or $1.49 per weighted average common share. As of February 15, 2017, some of the Company’s investments had not yet reached their payment date for the current quarter. From January 1, 2017 through February 15, 2017, the Company made gross new investments totaling $36.5 million, which includes investments in six new CLO equity securities. Additionally, one of the Company’s existing loan accumulation facilities has priced into a CLO and is expected to close by March 31, 2017. As of February 15, 2017, the Company has approximately $27.0 million of cash available for investment. As published on the Company’s website yesterday, management’s unaudited estimate of its NAV per common share as of January 31, 2017 is $17.78. This estimate was published for information purposes only and is subject to revision. The Company is pleased to announce that it will begin to pay common distributions on a monthly basis. The Company intends to make distributions of $0.20 per common share each month compared to $0.60 per common share on a quarterly basis, although the Company notes that the actual components and amount of such distributions are subject to variation over time. Today, the Company declared four separate distributions of $0.20 per common share payable according to the following schedule: On January 31, 2017, the Company paid a distribution of $0.60 per common share to stockholders of record as of December 30, 2016. The Company paid distributions of $0.161459 per share of the Company’s 7.75% Series A Term Preferred Stock due 2022 (the “Series A Term Preferred Stock”) (NYSE: ECCA) and Series B Term Preferred Stock due 2026 (the “Series B Term Preferred Stock”) (NYSE: ECCB) on January 31, 2017, to stockholders of record as of January 17, 2017. The distributions represented a 7.75% annualized rate, based on both the Series A and Series B Term Preferred Stock’s $25 liquidation preference per share. Additionally, and as previously announced, the Company declared distributions of $0.161459 per share on its Series A Term Preferred Stock and Series B Term Preferred Stock, payable on each of February 28, 2017 and March 31, 2017, to stockholders of record as of February 15, 2017 and March 15, 2017, respectively. As one of the requirements for the Company to maintain its ability to be taxed as a “regulated investment company” (which it has elected to be), the Company is generally required to pay distributions to holders of its common stock in an amount equal to substantially all of the Company’s taxable income within one year of the end of its tax year, which is November 30, 2016. The Company preliminarily estimates its taxable income for the tax year ending November 30, 2016 will exceed aggregate quarterly distributions paid to common stockholders with respect to such year. At present, management estimates a special distribution of $0.60 to $0.80 per common share and will be required to meet the distribution requirement described above. This estimate remains preliminary and is based solely on information currently available to management with respect to approximately 90% of the Company’s portfolio. The actual amounts required to be distributed will not be known until the Company files its tax returns and such amount may deviate from the above estimated range. Management expects to target payment of special distributions pertaining to the Company’s November 30, 2016 tax year in one or more installments toward the latter part of 2017. The Company will incur a 4% excise tax in connection with the special distribution. The estimated amount of the tax, $0.04 per weighted average common share, was recorded as a liability in the Company’s December 31, 2016 financial results. The Company will host a conference call at 10:00 a.m. (Eastern Time) today to discuss the Company’s financial results for the year ended December 31, 2016, as well as a portfolio update. All interested parties may participate in the conference call by dialing (877) 201-0168 (domestic) or (647) 788-4901 (international), and entering Conference ID 61668057 approximately 10 to 15 minutes prior to the call. An archived replay of the call will be available shortly afterwards until March 24, 2017. To hear the replay, please dial (800) 585-8367 (domestic) or (416) 621-4642 (international). For the replay, enter conference ID 61668057. The Company has made available on its website, http://eaglepointcreditcompany.com (in the financial statements and reports section) its 2016 Stockholder Letter and Annual Report, which includes the Company’s audited consolidated financial statements as of and for the period ended December 31, 2016. The Company has also filed this report with the Securities and Exchange Commission. The Company published on its website an investor presentation which contains additional information about the Company and its portfolio as of and for the quarter ended December 31, 2016. The Company is a non-diversified, closed-end management investment company. The Company’s investment objectives are to generate high current income and capital appreciation primarily through investment in equity and junior debt tranches of collateralized loan obligations. The Company is externally managed and advised by Eagle Point Credit Management LLC. The principals of Eagle Point Credit Management LLC are Thomas P. Majewski, Daniel W. Ko and Daniel M. Spinner. The Company makes certain unaudited portfolio information available each month on its website in addition to making certain other unaudited financial information available on its website (www.eaglepointcreditcompany.com). This information includes (1) an estimated range of the Company’s net investment income (“NII”) and realized capital gains or losses per weighted average share of common stock for each calendar quarter end, generally made available within the first fifteen days after the applicable calendar month end, (2) an estimated range of the Company’s NAV per share of common stock for the prior month end and certain additional portfolio-level information, generally made available within the first fifteen days after the applicable calendar month end, and (3) during the latter part of each month, an updated estimate of NAV, if applicable, and, with respect to each calendar quarter end, an updated estimate of the Company’s NII and realized capital gains or losses for the applicable quarter, if available. 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 in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”). 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. The estimates of the Company’s taxable income and distributions for the tax year ended November 30, 2016 reflects management’s judgment as of the date of this letter of conditions it expects to exist and the course of action it expects the Company to take with respect to the tax year ended November 30, 2016. The estimates are based on taxable income reported to date and assumptions relating to the underlying tax characteristics of income and other items as reported to the Company by a portion of its underlying investment portfolio. Although the Company considers its assumptions to be reasonable as of the date of this press release, such assumptions are subject to a wide variety of significant uncertainties that could cause actual results to differ materially from those contained in the estimates, including risks and uncertainties relating to the completeness and accuracy of preliminary information reported or received by the Company from underlying investments, and those described in the notes to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2016. Accordingly, there can be no assurance that actual results will not differ materially from those presented in the estimates. The estimate of taxable income was prepared on a reasonable basis and reflects the best currently available estimates and judgment of Company management. However, this estimate is not fact and readers of this letter should not rely upon this information or place undue reliance on such estimate. Neither the Company’s independent registered public accounting firm nor any other independent accountants has compiled, examined or performed any procedures with respect to estimated information contained herein, or expressed any opinion or assurance with respect to the estimated information or its achievability, and accordingly each assumes no responsibility for, and disclaims any association with, the estimates. 1 “Per weighted average common share” data are on a weighted average basis based on the average daily number of shares outstanding for the period.


VANCOUVER, March 1, 2017 /PRNewswire/ - Norsat International Inc. ("Norsat") (TSX: NII and NYSE MKT: NSAT), a provider of unique and customized communication solutions for remote and challenging applications, today announced that it will release its financial results for the four quarter...

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