Stellus Private Credit BDC Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2023

HOUSTON, March 11, 2024 /PRNewswire/ — Stellus Private Credit BDC (“Stellus PBDC” or the “Company”) today announced financial results for its fourth fiscal quarter and year ended December 31, 2023.

Robert T. Ladd, Chief Executive Officer of Stellus Private Credit BDC, stated “We are pleased to report strong results in the fourth quarter in which we generated $0.56 per share of net investment income and increased net asset value. During the quarter we made three new investments and received four full repayments, bringing the total portfolio to $209 million at fair value. On January 13, 2024, we declared our 2024 first quarter monthly dividend of $0.50 per share in the aggregate which represents an annualized dividend yield of approximately 13%.”

(1) Includes the impact of different share amounts as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of the period end. 

(2) The dollar-weighted average annualized effective yield is computed using the effective interest rate for our debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company’s investments for a given period will generally be higher than what investors of our common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company’s expense or any sales load that may be paid by investors.

(3) The dollar weighted average yield on total investments takes the same yields as calculated in the footnote above, but weights them to determine the weighted average effective yield as a percentage of the Company’s total investments, including non-income producing loans and equity.

Results of Operations

Investment income for the three months and year ended December 31, 2023 totaled $7.1 million and $23.4 million, respectively, most of which was interest income from portfolio investments.

Operating expenses for the three months and year ended December 31, 2023 totaled $3.2 million and $11.0 million, respectively, net of $1.1 million and $4.1 million in expenses reimbursed and fees waived by the Company’s investment advisor, Stellus Private BDC Advisor, LLC (the “Advisor”), respectively. For the same periods, base management fees totaled $0.8 million and $2.8 million (all of which were waived by the Advisor), income incentive fees totaled $0.4 million and $1.4 million (net of $0.2 million and $0.7 million which were waived as our shares were not listed on a national exchange), capital gains incentive fees of less than $0.1 million and $0.3 million, which are not currently payable, fees and expenses related to our borrowings totaled $2.4 million and $8.2 million, respectively (including interest and amortization of deferred financing costs), administrative expenses totaled $0.1 million and $0.4 million, other expenses totaled $0.3 million and $1.3 million, and expense support and conditional reimbursements from the Advisor of ($0.1) and ($0.5), respectively.

For the three months and year ended December 31, 2023, net investment income was $3.9 million and $12.3 million, or $0.56 and $1.96 per common share based on weighted average common shares outstanding of 6,953,190 and 6,273,882, respectively.

The Company’s investment portfolio had a net change in unrealized (depreciation) appreciation of ($0.2) million and $2.6 million for the three months and year ended December 31, 2023, respectively.

For the three months and year ended December 31, 2023, net increase in net assets resulting from operations totaled $4.3 million and $15.5 million, or $0.62 and $2.46 per common share, based on weighted average common shares outstanding of 6,953,190 and 6,273,882, respectively.

Liquidity and Capital Resources

On February 1, 2022, the Company entered into a revolving credit and security agreement with Signature Bank as subsequently amended (the “Commitment Facility”). On March 10, 2023, Signature Bank was placed into receivership by the FDIC and on March 12, 2023, the FDIC created Signature Bridge Bank, N.A. (“Signature Bridge”) to take over the operations of Signature Bank. Signature Bridge serviced the Commitment Facility until October 23, 2023.  On October 23, 2023,  Goldman Sachs Bank USA (“Goldman Sachs”) became the servicer under the Commitment Facility. The Company’s amended and restated senior secured revolving credit agreement with Goldman Sachs (as amended from time to time) matured on December 31, 2023 and was fully repaid, including all accrued interest, on December 22, 2023.

On September 30, 2022, the Company entered into a senior secured revolving credit agreement with Zions Bancorporation, N.A., dba Amegy Bank and various other lenders (the “Credit Facility”). The Credit Facility, as amended, provides for borrowings up to a maximum of $150.0 million on a committed basis with an accordion feature that allows the Company to increase the aggregate commitments up to $200.0 million, subject to new or existing lenders agreeing to participate in the increase and other customary conditions. As of December 31, 2023 and December 31, 2022, the Company had $98.0 million and $0.0 million in outstanding borrowings under the Credit Facility.

Recent Portfolio Activity

The Company invested in the following portfolio companies for the three months ended December 31, 2023:

* Existing portfolio company

The Company realized investments in the following portfolio companies for the three months ended December 31, 2023:

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