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NEW YORK, July 15, 2010 /PRNewswire via COMTEX News Network/ -- GSC Investment Corp. (NYSE: GNV), a business development company, today announces financial results for the fiscal year 2011 first quarter ended May 31, 2010.
Operating Results
For the fiscal quarter ended May 31, 2010, GSC Investment Corp. reported net investment income of $2,202 and net realized and unrealized gains on investments of $2.7 million resulting in a net increase in net assets from operations of $2.7 million, or $0.16 per share. The $2.7 million of the net gain on investments was comprised of $5.2 million in net unrealized appreciation on investments and $2.5 million in net realized losses on investments. Net asset value was $3.43 per share as of May 31, 2010.
Portfolio and Investment Activity
As of May 31, 2010, the value of the Company's investment portfolio was $89.9 million, principally invested in 25 portfolio companies and one collateralized loan obligation fund ("CLO"). The overall portfolio composition consisted of 15.4% first lien term loans, 23.1% second lien term loans, 32.7% senior secured notes, 4.8% unsecured notes, 20.2% subordinated notes of GSCIC CLO and 3.8% common stocks and limited partnership interests.
During the first quarter, GSC Investment Corp. made no investments in new or existing portfolio companies. For the quarter, the Company had $2.7 million in aggregate amount of exits and repayments, resulting in net repayments of $2.7 million.
As of May 31, 2010, the weighted average current yield on the Company's first lien term loans, second lien term loans, senior secured notes, unsecured notes and the GSCIC CLO subordinated notes were 9.7%, 8.1%, 11.6%, 12.2% and 9.7%, respectively, which resulted in an aggregate weighted average current yield of 9.8%.
As of May 31, 2010, 48.6%, or $33.2 million, of the Company's interest-bearing portfolio was fixed rate debt with a weighted average current coupon of 11.6% and 51.4%, or $35.1 million, of its interest-bearing portfolio was floating rate debt with a weighted average current spread of LIBOR plus 7.8%.
Liquidity and Capital Resources
At May 31, 2010, the Company had $33.8 million in borrowings under its credit facility and an asset coverage ratio of 272%.
On July 30, 2009, an unremedied borrowing base deficiency became an event of default, which is currently continuing. During the continuance of an event of default, the lender has the ability to terminate the facility and sell the underlying collateral necessary to satisfy outstanding borrowings. On April 14, 2010, the Company announced that Saratoga Investment Advisors, LLC and CLO Partners LLC agreed to purchase a minority stake in the Company as part of a $55 million recapitalization plan to enable the Company to cure its existing event of default. In connection with the proposed transaction, the Company and its lender entered into a forbearance agreement, subject to certain milestones. The Company has been in default under its credit facility since last July.
In connection with the proposed transaction, GSC Investment Corp. has scheduled a special meeting for July 30, 2010. Stockholders are urged to vote their shares immediately if they haven't done so yet. Questions about the proposed transaction or on voting your shares should be directed to Morrow & Co., LLC at 800-607-0088 or (203) 658-9400 or by email at GSC@morrowco.com.
About GSC Investment Corp.
GSC Investment Corp. is a specialty finance company that invests primarily in leveraged loans and mezzanine debt issued by U.S. middle-market companies, high yield bonds and collateralized loan obligations. It has elected to be treated as a business development company under the Investment Company Act of 1940. The Company may also opportunistically invest in distressed debt, debt issued by non-middle market companies, and equity securities issued by middle and non-middle market companies. The Company draws upon the support and investment advice of its external manager, GSC Group, an alternative asset investment manager that focuses on complex, credit-driven strategies. GSC Investment Corp. is traded on the New York Stock Exchange under the symbol "GNV."
Contact: Debbie Lombardi
GSC Group
973-593-5438
GSC Investment Corp.
Consolidated Statement of Assets and Liabilities
As of
-----
February 28,
May 31, 2010 2010
------------ -------------
(unaudited)
ASSETS
Investments at fair value
Non-control/non-affiliate
investments (amortized cost of
$113,009,708 and $117,678,275,
respectively) $71,719,742 $72,674,847
Control investments (cost of
$29,233,097 and $29,233,097,
respectively) 18,208,657 16,698,303
---------- ----------
Total investments at fair value
(amortized cost of $142,242,805 and
$146,911,372, respectively) 89,928,399 89,373,150
Cash and cash equivalents 2,928,017 3,352,434
Cash and cash equivalents,
securitization accounts 378,728 225,424
Outstanding interest rate cap at fair
value (cost of $131,000 and $131,000,
respectively) 22,278 42,147
Interest receivable, net of reserve 2,589,212 3,473,961
Management fee receivable 231,300 327,928
Other assets 401,636 140,272
------- -------
Total assets $96,479,570 $96,935,316
=========== ===========
LIABILITIES
Revolving credit facility $33,807,431 $36,992,222
Management and incentive fees payable 3,482,482 3,071,093
Accounts payable and accrued expenses 779,972 1,111,081
Interest and credit facility fees
payable 270,246 267,166
Due to manager 6,549 15,602
----- ------
Total liabilities $38,346,680 $41,457,164
=========== ===========
NET ASSETS
Common stock, par value $.0001 per
share, 100,000,000 common shares
authorized, 16,940,109 and 16,940,109
common shares issued and outstanding,
respectively $1,694 $1,694
Capital in excess of par value 128,339,497 128,339,497
Accumulated undistributed net
investment loss (2,843,933) (2,846,135)
Accumulated net realized loss from
investments and derivatives (14,941,240) (12,389,830)
Net unrealized depreciation on
investments and derivatives (52,423,128) (57,627,074)
----------- -----------
Total Net Assets 58,132,890 55,478,152
---------- ----------
Total liabilities and Net Assets $96,479,570 $96,935,316
=========== ===========
NET ASSET VALUE PER SHARE $3.43 $3.27
===== =====
GSC Investment Corp.
Consolidated Statements of Operations
For the three months For the three months
ended ended
May 31, 2010 May 31, 2009
------------ ------------
(unaudited) (unaudited)
INVESTMENT INCOME
Interest from investments
Non-control/Non-
affiliate investments $1,617,267 $3,318,840
Control investments 652,720 868,229
------- -------
Total interest income 2,269,987 4,187,069
Interest from cash and
cash equivalents 319 13,191
Management fee income 506,785 520,992
Other income 33,559 43,134
------ ------
Total investment income 2,810,650 4,764,386
--------- ---------
EXPENSES
Interest and credit
facility financing
expenses 831,121 642,893
Base management fees 411,389 547,744
Professional fees 1,142,537 339,780
Administrator expenses 155,137 171,861
Incentive management fees - 322,183
Insurance 194,654 206,017
Directors fees and
expenses 164,611 82,000
General & administrative 64,136 59,780
------ ------
Expenses before expense
waiver and reimbursement 2,963,585 2,372,258
--------- ---------
Expense reimbursement (155,137) (171,861)
-------- --------
Total expenses net of
expense waiver and
reimbursement 2,808,448 2,200,397
--------- ---------
NET INVESTMENT INCOME 2,202 2,563,989
----- ---------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
Net realized loss from
investments (2,551,410) (5,152)
Net unrealized
appreciation on
investments 5,223,815 2,769,292
Net unrealized
appreciation/
(depreciation) on
derivatives (19,869) 35,687
------- ------
Net gain on investments 2,652,536 2,799,827
--------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,654,738 $5,363,816
========== ==========
WEIGHTED AVERAGE -BASIC
AND DILUTED EARNINGS PER
COMMON SHARE $0.16 $0.65
WEIGHTED AVERAGE COMMON
STOCK OUTSTANDING -BASIC
AND DILUTED 16,940,109 8,291,384
SOURCE GSC Investment Corp.
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