Private Credit Portfolio Analysis | WhiteHorse Finance Reports Q3 2023 Results with Net Asset Value Decline

What's New: WhiteHorse Finance, Inc. reported its Q3 2023 financial results, showing a decrease in net asset value (NAV) per share to $12.77 as of September 30, 2023, down from $13.63 at the end of 2022. The fund experienced a net investment loss of $6.9 million for the quarter, contrasting with net investment income of $5.6 million in the same quarter last year.

Portfolio Dynamics:

• The fund's total investment portfolio decreased to $654.3 million as of September 30, 2023, from $696.2 million at the end of 2022.

• Unrealized depreciation on investments increased significantly, with a $16.9 million loss reported for the first nine months of 2023 compared to $14.8 million in the same period last year.

• The fund's cash and cash equivalents increased slightly to $11.2 million from $10.7 million at the end of 2022.

Investment Activity :

• Investment purchases totaled $169.3 million for the first nine months of 2023, up from $86.4 million in the same period last year.

• Proceeds from investment dispositions were $152.6 million for the first nine months of 2023, compared to $90.7 million in the same period last year.

• The fund sold $45.5 million of investments to its joint venture in the first nine months of 2023, up from $41.8 million in the same period last year.

Capital Structure:

• Long-term debt decreased to $352.8 million as of September 30, 2023, from $386.4 million at the end of 2022.

• The fund issued $98.9 million in long-term debt and repaid $133.5 million during the first nine months of 2023.

• Total liabilities decreased to $386.7 million as of September 30, 2023, from $414.0 million at the end of 2022.

Performance Profile:

• Net investment loss for Q3 2023 was $6.9 million, compared to net investment income of $5.6 million in Q3 2022.

• Net asset value per share decreased to $12.77 as of September 30, 2023, from $13.63 at the end of 2022.

• The fund paid $26.8 million in dividend distributions during the first nine months of 2023, slightly higher than the $26.7 million paid in the same period last year.

Risk & Quality:

• Unrealized depreciation on investments increased to $16.9 million for the first nine months of 2023, compared to $14.8 million in the same period last year.

• The fund's incentive fee payable increased to $15.9 million as of September 30, 2023, from $10.5 million at the end of 2022.

• Foreign currency transaction gains were $265,000 for the first nine months of 2023, compared to losses of $866,000 in the same period last year.

The Wrap: WhiteHorse Finance faced challenges in Q3 2023, with a decline in NAV per share and a shift to net investment loss. Despite increased investment activity, the fund experienced significant unrealized depreciation on its portfolio. The reduction in long-term debt and total liabilities suggests efforts to manage the capital structure, but the overall financial performance indicates a challenging period for the fund.

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