CION Investment Corporation Reports Third Quarter 2024 Financial Results
Solid Performance and Increased Financial Flexibility
NEW YORK--(BUSINESS WIRE)--November 07, 2024--
CION Investment Corporation $(CION)$ ("CION" or the "Company") today reported financial results for the third quarter ended September 30, 2024 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.
CION also announced that, on November 4, 2024, its co-chief executive officers declared a fourth quarter 2024 base distribution of $0.36 per share, payable on December 16, 2024 to shareholders of record as of December 2, 2024.
THIRD QUARTER AND OTHER HIGHLIGHTS
-- Net investment income and earnings per share for the quarter ended
September 30, 2024 were $0.40 per share and $(0.01) per share,
respectively;
-- Net asset value per share was $15.73 as of September 30, 2024 compared to
$16.08 as of June 30, 2024, a decrease of $0.35 per share, or 2.2%. The
decrease was primarily due to mark-to-market price declines to the
Company's portfolio during the quarter ended September 30, 2024;
-- As of September 30, 2024, the Company had $1.07 billion of total
principal amount of debt outstanding, of which 51% was comprised of
senior secured bank debt and 49% was comprised of unsecured debt. The
Company's net debt-to-equity ratio was 1.18x as of September 30, 2024
compared to 1.13x as of June 30, 2024;
-- As of September 30, 2024, the Company had total investments at fair value
of $1.75 billion in 103 portfolio companies across 24 industries. The
investment portfolio was comprised of 85.5% senior secured loans,
including 85.3% in first lien investments;1
-- During the quarter, the Company funded new investment commitments of $78
million, funded previously unfunded commitments of $15 million, and had
sales and repayments totaling $154 million, resulting in a net decrease
to the Company's funded portfolio of $61 million;
-- As of September 30, 2024, investments on non-accrual status amounted to
1.85% and 3.40% of the total investment portfolio at fair value and
amortized cost, respectively, compared to 1.36% and 2.69%, respectively,
as of June 30, 2024;
-- During the quarter, the Company repurchased 165,737 shares of its common
stock under its 10b5-1 trading plan at an average price of $12.08 per
share for a total repurchase amount of $2.0 million. Through September
30, 2024, the Company repurchased a total of 3,598,554 shares of its
common stock under its 10b5-1 trading plan at an average price of $10.09
per share for a total repurchase amount of $36.3 million;
-- On July 15, 2024, the Company further amended its $675 million senior
secured credit facility with JPMorgan Chase Bank, National Association
("JPM") to (i) reduce the credit spread on the floating interest rate
payable by the Company on advances from the three-month SOFR plus a
credit spread of 3.20% per year to the three-month SOFR plus a credit
spread of 2.55% per year, and (ii) extend the reinvestment period from
July 15, 2024 to June 15, 2026 and the maturity date from May 15, 2025 to
June 15, 20272;
-- On September 18, 2024, the Company completed a private offering pursuant
to which the Company issued an additional $100 million of its unsecured
notes due 2027, which bear interest at a floating rate equal to the
three-month SOFR plus a credit spread of 3.90% per year;
-- On September 24, 2024, the Company fully repaid all outstanding
borrowings of $30 million under its 2021 term loan from an Israeli
institutional investor that was due on September 30, 2024;
-- On September 30, 2024, the Company entered into a 3-year unsecured term
loan agreement with an Israeli institutional investor under which the
Company borrowed $30 million, which bears interest at a floating rate
equal to the three-month SOFR plus a credit spread of 3.80% per year; and
-- On October 3, 2024, the Company completed a public baby bond offering in
the U.S. pursuant to which the Company issued $172.5 million of its
unsecured 7.50% Notes due 2029, which listed and commenced trading on the
NYSE under the ticker symbol "CICB" on October 9, 2024.
DISTRIBUTIONS
-- For the quarter ended September 30, 2024, the Company paid a quarterly
base distribution totaling $19.2 million, or $0.36 per share.
Michael A. Reisner, co-Chief Executive Officer of CION, commented:
"I'm pleased with CION's quarterly results as we continue to navigate a highly competitive credit environment. Additionally, we were very active in managing the right side of CION's balance sheet in the third quarter. These transactions have given CION a more flexible balance sheet that we believe is better positioned to withstand potential volatility heading into next year."
SELECTED FINANCIAL HIGHLIGHTS
As of
-------------------------------------
(in thousands, except per
share data and ratios) September 30, 2024 June 30, 2024
------------------------------ -------------------- ---------------
Investment portfolio, at fair
value(1) $ 1,752,726 $ 1,822,963
Total debt outstanding(3) $ 1,069,844 $ 1,069,844
Net assets $ 839,190 $ 860,806
Net asset value per share $ 15.73 $ 16.08
Debt-to-equity ratio 1.28x 1.24x
Net debt-to-equity ratio 1.18x 1.13x
Three Months Ended
---------------------------------------
(in thousands, except share
and per share data) September 30, 2024 June 30, 2024
------------------------------ -------------------- -----------------
Total investment income $ 59,627 $ 61,357
Total operating expenses and
income tax expense $ 38,009 $ 38,394
Net investment income after
taxes $ 21,618 $ 22,963
Net realized gains (losses) $ 3,938 $ (20,277)
Net unrealized (losses) gains $ (25,935) $ 19,692
Net (decrease) increase in net
assets resulting from
operations $ (379) $ 22,378
Net investment income per share $ 0.40 $ 0.43
Net realized and unrealized
losses per share $ (0.41) $ (0.01)
Earnings per share $ (0.01) $ 0.42
Weighted average shares
outstanding 53,439,316 53,595,624
Distributions declared per
share $ 0.36 $ 0.41
Total investment income for the three months ended September 30, 2024 and June 30, 2024 was $59.6 million and $61.4 million, respectively. The decrease in total investment income was primarily driven by lower dividend income from equity securities during the three months ended September 30, 2024 compared to the three months ended June 30, 2024. This was partially offset by higher transaction fees during the three months ended September 30, 2024 compared to the three months ended June 30, 2024.
Operating expenses for the three months ended September 30, 2024 and June 30, 2024 were $38.0 million and $38.4 million, respectively. The decrease in operating expenses was primarily driven by lower advisory fees due to a decrease in total investment income during the quarter ended September 30, 2024 as compared to the quarter ended June 30, 2024.
PORTFOLIO AND INVESTMENT ACTIVITY(1)
A summary of the Company's investment activity for the three months ended September 30, 2024 is as follows:
New Investment Sales and
Commitments Repayments
------------------------- -----------------------
Investment Type Percentage of Percentage of
(in thousands) Amount Total Amount Total
--------------- ---------- ------------- -------- -------------
Senior secured
first lien
debt $ 94,995 99% $132,198 86%
Senior secured
second lien
debt -- -- 11,500 8%
Collateralized
securities and
structured
products -
equity -- -- 21 --
Equity 1,182 1% 9,861 6%
------ ---- ------ ------- ---- ------
Total $ 96,177 100% $153,580 100%
------ ---- ------ ------- ---- ------
During the three months ended September 30, 2024, new investment commitments were made across 1 new and 10 existing portfolio companies. During the same period, the Company exited its investments in 5 portfolio companies, 1 via sale and 4 via full repayment. As a result, the number of portfolio companies decreased from 107 as of June 30, 2024 to 103 as of September 30, 2024.
PORTFOLIO SUMMARY(1)
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