NEW YORK, July 15 /PRNewswire-FirstCall/ -- 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."
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Contact:
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Debbie Lombardi
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GSC Group
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973-593-5438
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GSC Investment
Corp.
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Consolidated Statement of Assets
and Liabilities
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As of
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May 31, 2010
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February 28, 2010
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(unaudited)
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ASSETS
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Investments at fair
value
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Non-control/non-affiliate
investments (amortized cost of $113,009,708 and $117,678,275,
respectively)
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$
71,719,742
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$
72,674,847
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Control investments (cost of
$29,233,097 and $29,233,097, respectively)
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18,208,657
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16,698,303
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Total investments at fair value
(amortized cost of $142,242,805 and $146,911,372,
respectively)
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89,928,399
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89,373,150
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Cash and cash
equivalents
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2,928,017
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3,352,434
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Cash and cash equivalents,
securitization accounts
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378,728
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225,424
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Outstanding interest rate cap at
fair value (cost of $131,000 and $131,000, respectively)
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22,278
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42,147
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Interest receivable, net of
reserve
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2,589,212
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3,473,961
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Management fee
receivable
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231,300
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327,928
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Other assets
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401,636
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140,272
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Total assets
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$
96,479,570
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$
96,935,316
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LIABILITIES
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Revolving credit
facility
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$ 33,807,431
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$
36,992,222
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Management and incentive fees
payable
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3,482,482
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3,071,093
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Accounts payable and accrued
expenses
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779,972
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1,111,081
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Interest and credit facility
fees payable
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270,246
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267,166
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Due to manager
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6,549
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15,602
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Total liabilities
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$
38,346,680
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$
41,457,164
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NET ASSETS
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Common stock, par value $.0001
per share, 100,000,000 common shares
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authorized, 16,940,109 and
16,940,109 common shares issued and outstanding,
respectively
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$
1,694
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$
1,694
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Capital in excess of par
value
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128,339,497
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128,339,497
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Accumulated undistributed net
investment loss
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(2,843,933)
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(2,846,135)
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Accumulated net realized loss
from investments and derivatives
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(14,941,240)
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(12,389,830)
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Net unrealized depreciation on
investments and derivatives
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(52,423,128)
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(57,627,074)
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Total Net Assets
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58,132,890
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55,478,152
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Total liabilities and Net
Assets
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$
96,479,570
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$
96,935,316
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NET ASSET VALUE PER
SHARE
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$
3.43
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$
3.27
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GSC Investment
Corp.
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Consolidated Statements of
Operations
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For the three months
ended
May 31, 2010
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For the three months
ended
May 31, 2009
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(unaudited)
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(unaudited)
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INVESTMENT INCOME
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Interest from
investments
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Non-control/Non-affiliate
investments
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$
1,617,267
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$
3,318,840
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Control investments
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652,720
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868,229
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Total interest
income
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2,269,987
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4,187,069
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Interest from cash and cash
equivalents
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319
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13,191
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Management fee income
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506,785
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520,992
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Other income
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33,559
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43,134
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Total investment
income
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2,810,650
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4,764,386
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EXPENSES
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Interest and credit facility
financing expenses
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831,121
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642,893
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Base management fees
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411,389
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547,744
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Professional fees
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1,142,537
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339,780
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Administrator
expenses
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155,137
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171,861
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Incentive management
fees
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-
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322,183
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Insurance
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194,654
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206,017
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Directors fees and
expenses
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164,611
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82,000
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General &
administrative
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64,136
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59,780
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Expenses before expense waiver
and reimbursement
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2,963,585
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2,372,258
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Expense reimbursement
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(155,137)
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(171,861)
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Total expenses net of expense
waiver and reimbursement
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2,808,448
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2,200,397
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NET INVESTMENT INCOME
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2,202
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2,563,989
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REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
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Net realized loss from
investments
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(2,551,410)
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(5,152)
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Net unrealized appreciation on
investments
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5,223,815
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2,769,292
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Net unrealized
appreciation/(depreciation) on derivatives
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(19,869)
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35,687
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Net gain on
investments
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2,652,536
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2,799,827
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NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS
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$
2,654,738
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$
5,363,816
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WEIGHTED AVERAGE - BASIC AND
DILUTED EARNINGS PER COMMON SHARE
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$
0.16
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$
0.65
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WEIGHTED AVERAGE COMMON STOCK
OUTSTANDING - BASIC AND DILUTED
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16,940,109
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8,291,384
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SOURCE GSC Investment Corp.