NEW YORK, Jan. 14 /PRNewswire-FirstCall/ -- GSC Investment Corp.
(NYSE: GNV), a business development company, today announced
financial results for the fiscal third quarter ended November 30,
2009. Operating Results For the quarter ended November 30, 2009,
GSC Investment Corp. reported net investment income of $0.9
million, or $0.10 per share, and net gain on investments of $8.3
million, or $0.91 per share, resulting in a net increase in net
assets from operations of $9.1 million, or $1.01 per share. $8.8
million of the net gain was due to unrealized appreciation. Net
asset value was $3.80 per share as of November 30, 2009 as compared
to $6.91 per share as of August 31, 2009. The decrease in NAV per
share from August 31, 2009 was primarily the result of the
distribution of 8.6 million shares of common stock on December 31,
2009 for the stock portion of the dividend declared on November 13,
2009. In accordance with generally accepted accounting principals,
the number of shares outstanding used to calculate NAV per share as
of November 30, 2009 was retroactively adjusted to reflect the
additional shares issued as a result of the stock dividend.
Excluding the issuance of these additional shares, the NAV per
share would have been $7.76 as of November 30, 2009. Portfolio and
Investment Activity As of November 30, 2009, the value of the
Company's investment portfolio was $103.3 million, principally
invested in 29 portfolio companies and one collateralized loan
obligation fund ("CLO"). The overall portfolio composition
consisted of 15.4% first lien term loans, 29.1% second lien term
loans, 27.5% senior secured notes, 7.1% unsecured notes, 20.8%
subordinated notes of GSCIC CLO and 0.1% equity/limited partnership
interests. During the third quarter, GSC Investment Corp. made no
investments in new or existing portfolio companies. For the
quarter, the Company had $5.7 million in aggregate amount of exits
and repayments, resulting in net repayments of $5.7 million. As of
November 30, 2009, 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 7.8%, 8.0%, 11.6%, 12.3% and 11.0%, respectively, which
resulted in an aggregate weighted average current yield of 9.8%. As
of November 30, 2009, 43.2%, or $35.3 million, of the Company's
interest-bearing portfolio was fixed rate debt with a weighted
average current coupon of 11.7% and 56.8%, or $46.5 million, of its
interest-bearing portfolio was floating rate debt with a weighted
average current spread of LIBOR plus 7.1%. Liquidity and Capital
Resources At November 30, 2009, the Company had $43.8 million in
borrowings under its credit facility and an asset coverage ratio of
247%. 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. The lender has elected
not to accelerate the obligation to date, but has reserved the
right to do so. Including $6.3 million of repayments made
subsequent to November 30, 2009, the Company has repaid $18.3
million of outstanding borrowings since the event of default
consisting of $11.6 million of proceeds from asset sales and
repayments and $6.7 million from cash interest received in excess
of interest expense. The Company continues to work with the
investment banking firm of Stifel Nicolaus & Company as it
actively evaluates strategic alternatives to maximize long-term
shareholder value. Dividend On November 13, 2009, the Company's
Board of Directors declared a dividend of $1.825 per share is
payable on December 31, 2009, to shareholders of record as of
November 25, 2009. Shareholders had until December 17, 2009 to
elect whether to receive the dividend in cash (up to an aggregate
maximum cash amount of approximately $2.1 million or approximately
13.7% of the total dividend paid) or in shares of common stock. The
dividend consisted of $2.1 million in cash and 8,648,725 shares of
common stock or 104% of GSC Investment Corp's outstanding shares
prior to the dividend. The dividend included the balance of the
Company's fiscal year 2009 taxable income and a significant portion
of the Company's fiscal year 2010 taxable income including a
component for the third quarter of fiscal year 2010. 2010 Third
Quarter Conference Call/Webcast Information When: Friday, January
15, 2010, 10:00 a.m. Eastern Time (ET) Call: Interested parties may
participate by dialing (877) 852-6561 (U.S. and Canada) or (719)
325-4900 (outside U.S. and Canada). Webcast: Interested parties may
also access a simultaneous webcast of the call by going to
http://ir.gscinvestmentcorp.com/events.cfm. A replay of the webcast
will be available from 1:00 p.m. ET on Friday, January 15, 2010
through 11:59 p.m. ET, Wednesday, January 27, 2010. 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." GSC Investment Corp. Consolidated Balance Sheets As
of -------- November 30, 2009 February 28, 2009 -----------------
----------------- (unaudited) ASSETS Investments at fair value
Non-control/non-affiliate investments (amortized cost of
$126,612,792 and $137,020,449, respectively) $81,805,383
$96,462,919 Control investments (cost of $29,233,097 and
$29,905,194, respectively) 21,464,041 22,439,029 Affiliate
investments (cost of $0 and $0, respectively) 318 10,527 --- ------
Total investments at fair value (amortized cost of $155,845,889 and
$166,925,643, respectively) 103,269,742 118,912,475 Cash and cash
equivalents 5,459,780 6,356,225 Cash and cash equivalents,
securitization accounts 839,290 1,178,201 Outstanding interest rate
cap at fair value (cost of $131,000 and $131,000, respectively)
72,593 39,513 Interest receivable, net of reserve 3,122,764
3,087,668 Deferred credit facility financing costs, net - 529,767
Management fee receivable 1,058,861 237,370 Other assets 113,150
321,260 Receivable from unsettled trades 600,036 - ------- ----
Total assets $114,536,216 $130,662,479 ============ ============
LIABILITIES Revolving credit facility $43,840,749 $58,994,673
Dividend payable 2,073,066 - Management and incentive fees payable
3,093,400 2,880,667 Accounts payable and accrued expenses 827,707
700,537 Interest and credit facility fees payable 357,455 72,825
Total liabilities $50,192,377 $62,648,702 =========== ===========
NET ASSETS Common stock, par value $.0001 per share, 100,000,000
common shares authorized, 16,940,109 and 8,291,384 common shares
issued and outstanding, respectively 1,694 829 Capital in excess of
par value 130,001,583 116,943,738 Accumulated undistributed net
investment income (loss) (4,496,445) 6,122,492 Accumulated net
realized loss from investments and derivatives (8,528,440)
(6,948,628) Net unrealized depreciation on investments and
derivatives (52,634,553) (48,104,654) ----------- ----------- Total
Net Assets 64,343,839 68,013,777 ---------- ---------- Total
liabilities and Net Assets $114,536,216 $130,662,479 ============
============ NET ASSET VALUE PER SHARE $3.80 $8.20 ----- ----- GSC
Investment Corp. Consolidated Statements of Operations For the
three months ended For the nine months ended November 30 November
30 --------------------------- -------------------------- 2009 2008
2009 2008 ---- ---- ---- ---- (unaudited) (unaudited) (unaudited)
(unaudited) INVESTMENT INCOME Interest from investments
Non-control/ Non-affiliate investments $2,593,082 $4,269,985
$8,566,587 $12,873,546 Control investments 368,374 1,452,237
1,686,088 3,198,626 ------- --------- --------- --------- Total
interest income 2,961,456 5,722,222 10,252,675 16,072,172 Interest
from cash and cash equivalents 2,752 38,377 22,934 141,074
Management fee income 511,236 517,875 1,549,167 1,529,762 Other
income 54,699 82,189 155,111 164,683 ------ ------ ------- -------
Total investment income 3,530,143 6,360,663 11,979,887 17,907,691
--------- --------- ---------- ---------- EXPENSES Interest and
credit facility financing expenses 1,126,162 693,830 3,174,603
2,150,639 Base management fees 462,755 653,995 1,515,813 2,108,026
Professional fees 714,789 272,196 1,396,567 932,785 Administrator
expenses 171,861 241,317 515,583 750,661 Incentive management fees
- 542,231 322,183 1,289,365 Insurance 220,059 173,353 649,535
518,001 Directors fees and expenses 71,989 72,490 217,125 212,375
General & administrative 65,298 65,289 191,223 208,230 Expenses
before expense waiver and reimbursement 2,832,913 2,714,701
7,982,632 8,170,082 --------- --------- --------- --------- Expense
reimbursement (171,861) (241,317) (515,583) (800,376) --------
-------- -------- -------- Total expenses net of expense waiver and
reimbursement 2,661,052 2,473,384 7,467,049 7,369,706 ---------
--------- --------- --------- NET INVESTMENT INCOME 869,091
3,887,279 4,512,838 10,537,985 ------- --------- ---------
---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net
realized loss from investments (549,864) (7,293,875) (1,579,812)
(7,423,694) Net realized gain from derivatives - - - 30,454 Net
unrealized appreciation/ (depreciation) on investments 8,825,100
(4,142,827) (4,562,979) (10,422,015) Net unrealized appreciation/
(depreciation) on derivatives (16,754) (1,419) 33,080 (29,745)
------- ------ ------ ------- Net gain/ (loss) on investments
8,258,482 (11,438,121) (6,109,711) (17,845,000) ---------
----------- ---------- ----------- NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $9,127,573 $(7,550,842)
$(1,596,873) $(7,307,015) ========== =========== ===========
=========== WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS)
PER COMMON SHARE $1.01 $(0.91) $(0.19) $(0.88) WEIGHTED AVERAGE
COMMON STOCK OUTSTANDING - BASIC AND DILUTED 9,051,711 8,291,384
8,542,983 8,291,384 Contact: Debbie Lombardi GSC Group 973-593-5438
DATASOURCE: GSC Investment Corp. CONTACT: Debbie Lombardi, GSC
Group, +1-973-593-5438; or Roland Tomforde, Broadgate Consultants,
LLC, +1-212-232-2222
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