Fitch Affirms BlackRock TCP Capital 'BB' Rating, Revises Outlook to Negative

Fitch Ratings has affirmed its 'BB' rating for BlackRock TCP Capital Corp.’s (NASDAQ: TCPC) long-term debt but has revised the company's rating outlook to Negative. The credit rating agency also removed TCPC from its Rating Watch Negative list, indicating that it believes the business development company's credit metrics have stabilized for now.

Outlook Clouded by Asset Quality Concerns

The revision to a Negative outlook reflects Fitch's persistent concerns over several key risk factors. The agency highlighted that TCPC's non-accrual loans and paid-in-kind (PIK) income remain elevated, which could signal future realized investment losses.

Fitch also noted that TCPC's asset coverage cushion of 10.9% as of the first quarter of 2026 is weaker than that of its peers, providing a smaller buffer against portfolio depreciation. Non-accrual investments, while down from their peak, were still high at 3% of the debt portfolio at fair value and 8.4% at cost in the first quarter.

Leverage and Portfolio Metrics

Despite the negative outlook, Fitch acknowledged that TCPC's leverage has been trending down toward its target levels. The company's key financial metrics as of the first quarter of 2026 include:

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• Statutory Leverage: 1.65x, down from 1.74x at the end of 2025.
• Net Regulatory Leverage: 1.29x, an improvement from 1.41x at year-end 2025.
• Net Realized Losses: Moderated to 2.3% of the average portfolio in Q1 2026, a significant improvement from 17.9% for the full year 2025.

Recent Corporate Actions

In the first quarter of 2026, TCPC took several steps to manage its balance sheet. The company cut its quarterly base dividend to $0.17 per share from $0.25 per share. It also refinanced $325 million of maturing senior unsecured notes using its secured revolving credit facility.

This refinancing significantly altered the company's debt profile, causing the proportion of unsecured debt to fall to 34.8% of total debt, a sharp drop from its four-year average of 61.7%. As of the end of the quarter, TCPC reported having $44 million in cash and equivalents and $264 million in remaining borrowing capacity.