BlackRock TCP Capital Corp. (TCPC)

NII of $0.22 per share covers the declared dividend of $0.17 per share at approximately 129% (payout coverage ratio of 1.49), placing coverage solidly in the 110%+ range. However, this represents a significant decline from Q1 2025 NII of $0.38 per share, indicating deteriorating earnings power. The company maintains a stable base dividend at $0.17 but the trend is concerning—NII has fallen 42% year-over-year while non-accruals improved to 2.8% of fair value. The coverage currently exceeds the 110% threshold for a score of 5, but the sharp earnings decline and lack of demonstrated multi-year stability without cuts prevent a higher rating.

TCPC's leverage stands at 1.29x as of Q1 2026, down from 1.41x at year-end 2025, positioning it near the middle of typical BDC leverage bands (typically 1.0x–1.5x). The company has demonstrated proactive balance-sheet management through portfolio exits and paydowns. However, the data pack does not provide explicit information on funding composition (secured vs. unsecured), debt maturity ladder structure, or credit ratings, which are critical anchors for distinguishing between a score of 3 and 5. The improving leverage trajectory and non-accrual decline to 2.8% suggest solid credit quality management, but without visibility into funding sources and maturity profile, a middle-band score of 3 is most appropriate.

Non-accruals stand at 2.8% of fair value, placing the portfolio in the 1–3% range that anchors a score of 3. The earnings release indicates PIK income of $0.04 per share in Q1 2026, which represents approximately 18% of the $0.22 net investment income per share—exceeding the 5–10% threshold for a score of 3 but not reaching the >15% flag for a score of 1. The company reported net realized losses of $0.39 per share in Q1 2026 and adjusted net realized losses of $0.40 per share, indicating recurring realized losses consistent with a score of 3 profile. Credit quality improved with non-accruals declining from 4.0% to 2.8%, but the combination of elevated PIK income and realized losses prevents a higher score.

TCPC's portfolio shows mixed quality indicators. The portfolio is 88.7% first-lien debt and 91.8% senior secured, placing it in the 80%+ first-lien range for that metric. However, non-accruals at 2.8% of fair value are elevated relative to defensive portfolios, and the company experienced $35 million in net portfolio markdowns during Q1 2026 alone, suggesting credit stress. With 139 portfolio companies, concentration appears moderate rather than granular. The weighted average yield of 10.1% and recent exits at 11.2% versus new investments at 8.1% indicate the company is repositioning toward lower-yielding assets, which may reflect portfolio quality challenges. The data supports a mid-range score reflecting adequate first-lien exposure but concerning credit quality trends and moderate concentration.

TCPC operates under BlackRock management with a standard external fee structure. Base management fees were $4.7 million or $0.06 per share in Q1 2026, representing approximately 1.6% annualized on average net assets of ~$580 million, consistent with typical 1.5% external BDC fees. The company has a hurdle structure (no incentive compensation accrued when cumulative returns do not exceed the hurdle), aligning with rubric anchor expectations. NAV per share declined from $7.07 at year-end 2025 to $6.72 at Q1 2026 (4.9% decline), driven by portfolio markdowns and credit challenges, indicating recent NAV pressure rather than long-term growth trajectory. Without 5-year historical NAV data, the current trend suggests NAV is not growing, placing the score at the middle anchor of a standard external fee structure with hurdle protection.

Valuation scored against the same-category peer cross-section (peer_fallback) from this nightly pass, because this name has fewer than 8 own-history points so far.