The transaction covers 48% of TCPC's debt investments across 78 companies, sharply cuts leverage and comes as the board reviews strategic alternatives for the pressured lending vehicle.
BlackRock TCP Capital Corp. is selling a $523 million portfolio of private credit investments to a continuation vehicle backed by Pantheon, shedding nearly half of its debt portfolio by fair value as it moves to reduce leverage and improve liquidity. The transaction transfers 95% of the equity interests in a vehicle holding investments across 78 portfolio companies, while TCPC retains direct investments alongside a 5% stake in the continuation vehicle. The company said the deal is expected to lower leverage from 1.38x to about 0.4x, but also reduce net asset value by roughly 10.4%, or $0.68 per share, based on its June 30 NAV of $6.58. The sale follows a weak second quarter in which TCPC reported net investment income of $18.1 million, or $0.22 per share, and a $14.8 million realized loss on investments, including a $10 million loss tied to the exit of AutoAlert. NAV fell from $6.72 per share at the end of the first quarter to $6.58 at the end of June. Non-accrual investments improved to 1.6% of the portfolio at fair value from 2.8% in the prior quarter, though they stood at 7.4% on a cost basis. TCPC's board has also hired Keefe, Bruyette & Woods to evaluate strategic alternatives, including using its added debt capacity, repurchasing shares, pursuing combinations with other firms or selling more assets. The transaction underscores how private credit managers are increasingly using secondaries and continuation vehicles to raise liquidity, reduce concentration risk and manage portfolios in a market shaped by higher rates, weaker borrowers and slower exits.