BlackRock TCP Capital Shares Plunge 13% on 19% NAV Markdown and Loan Write-off

Key Facts

BlackRock TCP Capital Corp disclosed a sharp 19% markdown in its net asset value (NAV), which dropped from $8.71 to approximately $7.05. The financial adjustments included slashing the value of a $25 million loan to Infinite Commerce Holdings to zero, just three months after it was valued at par. This disclosure on January 26 triggered a 13% plunge in the fund's shares, marking its steepest decline since March 2020.

These developments intensify concerns regarding valuation accuracy within the private credit sector, a matter currently under investigation by the US Department of Justice and the Manhattan US Attorney’s office. In comparison to peers, market data shows varied performance as firms like Apollo Global Management maintained asset stability, while JPMorgan experts have warned that a lack of transparency in secondary market valuations can lead to abrupt price shocks similar to the TCPC event, per research notes.

TCPC shares remain at depressed levels following the recent sell-off, and investors should monitor technical support levels near 2020 lows. Looking ahead, upcoming US Inflation Rate (CPI) data will be a critical catalyst for future borrowing costs, directly impacting the remaining loan valuations in the fund's portfolio. Markets also await further comments from Fed officials regarding the regulatory oversight of non-bank credit funds.