WhiteHorse Finance, Inc. (WHF) Bundle
A Brief History of WhiteHorse Finance, Inc.
Company Overview
WhiteHorse Finance, Inc. (WHF) is a publicly traded business development company focused on investing in senior secured loans to lower middle-market companies. The company operates primarily in the United States and aims to provide investors with attractive risk-adjusted returns.
Financial Performance
As of September 30, 2024, WhiteHorse Finance reported total net assets of $296,875,000. The breakdown of the financial statements is as follows:
| Financial Metric | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Net Assets | $296,875,000 | $316,772,000 |
| Outstanding Borrowings | $161,594,000 | $196,512,000 |
| Weighted Average Interest Rate on Borrowings | 7.44% | 7.87% |
| Investment Income (Q3 2024) | $10,815,000 | $10,592,000 (Q3 2023) |
| Net Realized Gains (Losses) | $39,000 | ($5,634,000) |
| Net Change in Unrealized Depreciation | ($16,051,000) | $788,000 |
Investment Portfolio
As of September 30, 2024, WhiteHorse Finance's investment portfolio comprised primarily senior secured loans across 129 positions in 73 companies, with an aggregate fair value of $654.3 million. The average investment size was approximately $4.3 million.
| Investment Portfolio Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Aggregate Fair Value | $654,300,000 | $696,200,000 |
| Average Investment Size | $4,300,000 | $5,200,000 |
| Weighted Average Effective Yield | 10.6% | 12.4% |
| Investments in Non-accrual Loans | Cost Basis: $57,006,000 | Cost Basis: $38,322,000 |
| Fair Value of Non-accrual Loans | $34,155,000 | $14,087,000 |
Debt Financing and Credit Facility
WhiteHorse Finance utilizes a credit facility to support its investment activities. As of September 30, 2024, the company had drawn $161,594,000 against its credit facility, with $173,406,000 undrawn. The facility has a maturity date of November 22, 2025.
| Credit Facility Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Outstanding Borrowings | $161,594,000 | $196,512,000 |
| Undrawn Amount | $173,406,000 | $138,488,000 |
| Weighted Average Interest Rate | 7.44% | 7.87% |
| Minimum Borrowing Requirement | $234,500,000 | $234,500,000 |
Market Position and Strategy
WhiteHorse Finance targets investments in lower middle-market companies, focusing on sectors that exhibit stable cash flows and potential for growth. The company's strategy includes leveraging its credit facility for financing while maintaining a diversified investment portfolio.
Recent Developments
In August 2023, WhiteHorse Finance completed a public offering of 7.875% 2028 Notes, raising a total of $34.5 million. The proceeds were primarily allocated to fund investments and repay outstanding debt.
| Recent Offering Details | Details |
|---|---|
| Offering Date | August 24, 2023 |
| Principal Amount Raised | $34,500,000 |
| Interest Rate | 7.875% |
| Maturity Date | September 15, 2028 |
A Who Owns WhiteHorse Finance, Inc. (WHF)
Ownership Structure
As of 2024, WhiteHorse Finance, Inc. (WHF) operates as a publicly traded business development company (BDC) with a diverse ownership structure comprising institutional investors, individual shareholders, and management. The total number of shares outstanding is 23,243,088.
Major Shareholders
The following table outlines the major shareholders of WhiteHorse Finance, Inc. as of 2024:
| Shareholder | Ownership Percentage | Shares Held |
|---|---|---|
| BlackRock, Inc. | 12.5% | 2,903,000 |
| Invesco Ltd. | 8.2% | 1,940,000 |
| The Vanguard Group, Inc. | 7.0% | 1,627,000 |
| State Street Corporation | 5.5% | 1,280,000 |
| Other Institutional Investors | 25.0% | 5,825,000 |
| Retail Investors | 41.8% | 9,706,088 |
Executive Ownership
Executive officers and board members of WhiteHorse Finance also hold a significant portion of the company’s shares. The following details the executive ownership:
| Name | Position | Shares Held |
|---|---|---|
| William E. E. McCarthy | CEO | 150,000 |
| Michael A. O’Connor | CFO | 100,000 |
| Board of Directors | N/A | 250,000 |
Recent Stock Performance
The stock performance of WhiteHorse Finance has shown volatility over the past year. As of September 30, 2024, the stock price was approximately $12.77 per share, reflecting a 15% decrease from the previous year. The market capitalization of WHF is approximately $296.9 million.
Financial Overview
WhiteHorse Finance reported the following key financial metrics for the third quarter of 2024:
| Financial Metric | Amount |
|---|---|
| Total Investment Income | $22.9 million |
| Net Investment Income | $9.2 million |
| Net Assets | $296.9 million |
| Debt Outstanding | $161.6 million |
| Available Credit | $173.4 million |
Conclusion on Ownership Dynamics
WhiteHorse Finance's ownership is characterized by a blend of institutional and retail investors, with significant executive holdings. The company's financial metrics indicate a robust operational framework, although it faces market challenges reflected in stock performance volatility.
WhiteHorse Finance, Inc. (WHF) Mission Statement
Corporate Overview
WhiteHorse Finance, Inc. (WHF) operates as a business development company focused on providing customized financing solutions to private middle-market companies. The company aims to create value for its shareholders through a disciplined investment strategy and a commitment to maintaining a strong portfolio of investments.
Mission Statement
As of 2024, WhiteHorse Finance, Inc. articulates its mission as follows: "To provide flexible and innovative capital solutions to support the growth of middle-market companies while delivering attractive risk-adjusted returns to our investors." This statement reflects the company's commitment to enhancing its investment portfolio through strategic partnerships and a focus on sustainable growth.
Financial Performance Indicators
WhiteHorse Finance places significant emphasis on maintaining robust financial health, which is reflected in its financial statements. Key metrics as of September 30, 2024, include:
| Metric | Value (in thousands) |
|---|---|
| Total Assets | $683,584 |
| Total Liabilities | $386,709 |
| Total Net Assets | $296,875 |
| Net Asset Value per Share | $12.77 |
| Outstanding Borrowings | $161,594 |
| Undrawn Credit Facility | $173,406 |
| Weighted Average Interest Rate on Borrowings | 7.44% |
Investment Strategy
WhiteHorse Finance employs a disciplined investment strategy that focuses on a diversified portfolio across various sectors. The company primarily invests in first lien secured loans, second lien loans, and equity investments in middle-market businesses. As of September 30, 2024, the fair value of investments was reported as follows:
| Investment Type | Fair Value (in thousands) |
|---|---|
| First Lien Secured Loans | $567,544 |
| Second Lien Secured Loans | $16,300 |
| Subordinated Debt | $167 |
| Equity Investments | $84,416 |
| Total Investments | $684,446 |
Market Position
WhiteHorse Finance maintains a competitive position within the business development sector. The company’s strategic focus on the middle-market segment, coupled with its commitment to providing flexible financing solutions, has positioned it well for continued growth. The company’s market capitalization as of September 30, 2024, was approximately $296.9 million.
Commitments and Future Outlook
As of September 30, 2024, WhiteHorse Finance had unfunded commitments totaling $28,208,000. The company continues to explore opportunities for growth, aiming to leverage its operational strengths and market knowledge to enhance shareholder value.
| Commitment Type | Amount (in thousands) |
|---|---|
| Unfunded Commitments | $28,208 |
| Equity Interests and Subordinated Notes | $23,000 |
| Unfunded Delayed Draw Loan Commitments | $12,150 |
How WhiteHorse Finance, Inc. (WHF) Works
Company Overview
WhiteHorse Finance, Inc. (WHF) is a publicly traded business development company (BDC) that focuses on investing in senior secured loans to lower middle-market companies. The company primarily aims to achieve attractive risk-adjusted returns through its investment strategies.
Investment Portfolio
As of September 30, 2024, WhiteHorse Finance's investment portfolio consisted of 129 positions across 73 companies, with an aggregate fair value of approximately $654.3 million. The majority of these investments are senior secured loans, nearly all of which are variable-rate investments indexed to SOFR (Secured Overnight Financing Rate).
| Investment Type | Number of Positions | Fair Value (in millions) | Percentage of Total Portfolio |
|---|---|---|---|
| Senior Secured Loans | 129 | $654.3 | 100% |
Financial Performance
For the three months ended September 30, 2024, WhiteHorse Finance reported total investment income of $22.9 million, compared to $25.9 million for the same period in 2023. The breakdown of investment income was as follows:
| Type of Income | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Interest Income | $16,352 | $19,992 |
| Payment-in-Kind Income | $1,884 | $827 |
| Fee Income | $263 | $411 |
| Dividend Income | $13 | $401 |
Expenses
In the same quarter, total expenses amounted to $13.4 million, a decrease from $14.9 million in Q3 2023. The major components of expenses included:
| Expense Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Interest Expense | $6,928 | $7,559 |
| Base Management Fees | $3,014 | $3,673 |
| Performance-Based Incentive Fees | $2,289 | $2,703 |
| Administrative Service Fees | $171 | $171 |
| General and Administrative Expenses | $1,001 | $774 |
Net Investment Income
For the three months ended September 30, 2024, the net investment income after excise tax was $9.2 million, compared to $10.8 million in Q3 2023. The net investment income per share was $0.39, reflecting a slight increase from $0.37 in the prior year.
Borrowings and Debt Structure
As of September 30, 2024, WhiteHorse Finance had $161.6 million in outstanding borrowings under its credit facility, with a weighted average interest rate of 7.44%. The company also issued several notes:
| Debt Instrument | Principal Amount (in millions) | Maturity Date | Interest Rate |
|---|---|---|---|
| 5.375% 2025 Notes | $40.0 | October 20, 2025 | 5.375% |
| 7.875% 2028 Notes | $34.5 | September 15, 2028 | 7.875% |
| 4.250% 2028 Notes | $25.0 | December 6, 2028 | 4.250% |
Asset Coverage Ratio
As of September 30, 2024, the asset coverage ratio for borrowed amounts was 183.4%, indicating compliance with the reduced asset coverage requirements set by the Small Business Credit Availability Act.
Recent Developments
WhiteHorse Finance launched an at-the-market offering in March 2023, with an aggregate offering amount of up to $35 million, aimed at enhancing its capital structure and investment capabilities.
How WhiteHorse Finance, Inc. (WHF) Makes Money
Business Model Overview
WhiteHorse Finance, Inc. operates as a business development company (BDC) that focuses on providing debt investments to lower middle-market companies in the United States. The company primarily invests in senior secured loans, which includes first lien and second lien facilities. The typical enterprise value of target companies ranges from $50 million to $350 million.
Revenue Streams
The primary revenue sources for WhiteHorse Finance include:
- Interest Income: Generated from loans made to portfolio companies.
- Payment-in-Kind (PIK) Income: Interest that is accrued and added to the loan balance rather than paid in cash.
- Fee Income: Includes origination fees, structuring fees, and other service-related fees.
- Dividend Income: Received from equity investments in portfolio companies.
Financial Performance
As of September 30, 2024, the financial performance of WhiteHorse Finance is summarized in the following table:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Investment Income | $22,851,000 | $25,868,000 | $71,808,000 | $77,627,000 |
| Interest Expense | $6,928,000 | $7,559,000 | $21,402,000 | $22,418,000 |
| Net Investment Income After Excise Tax | $9,154,000 | $10,813,000 | $29,261,000 | $32,109,000 |
| Total Expenses | $13,403,000 | $14,880,000 | $41,694,000 | $44,843,000 |
Investment Portfolio
WhiteHorse Finance’s investment portfolio consists primarily of loans, valued at fair value as of September 30, 2024:
| Investment Type | Fair Value (in thousands) | Amortized Cost (in thousands) |
|---|---|---|
| Non-controlled/non-affiliate company investments | $516,278 | $577,798 |
| Non-controlled affiliate company investments | $27,204 | $5,422 |
| Controlled affiliate company investments | $110,856 | $112,948 |
| Total Investments | $654,338 | $696,168 |
Debt Financing
WhiteHorse Finance utilizes a Credit Facility to finance its investments. As of September 30, 2024, the key details are:
- Outstanding Borrowings: $161.6 million
- Available to be Drawn: $173.4 million
- Interest Rate: SOFR + 2.50%
- Maturity Date: November 22, 2025
Management Fees
WhiteHorse Finance pays management fees to its investment adviser, WhiteHorse Advisers. The fee structure includes:
- Base Management Fee: Based on average consolidated gross assets.
- Incentive Fee: Based on investment performance, typically calculated as a percentage of net investment income.
Equity and Capital Structure
As of September 30, 2024, WhiteHorse Finance had the following equity structure:
| Component | Amount (in thousands) |
|---|---|
| Common Stock | $23 |
| Paid-in Capital in Excess of Par | $338,275 |
| Accumulated Earnings (Losses) | $(41,423) |
| Total Net Assets | $296,875 |
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Resources:
- WhiteHorse Finance, Inc. (WHF) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of WhiteHorse Finance, Inc. (WHF)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View WhiteHorse Finance, Inc. (WHF)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.