Rating Action and Outlook
Fitch Ratings affirmed BlackRock TCP Capital Corp. (NASDAQ: TCPC) with a long‑term issuer default rating of BB for both senior secured and senior unsecured debt. The agency removed the prior Rating Watch Negative, indicating that it believes the company’s credit metrics have stabilized, yet it retained a Negative rating outlook due to still‑elevated non‑accruals, paid‑in‑kind income, and a weaker asset‑coverage cushion relative to peers.
Leverage and Coverage Metrics
At the end of the first quarter of 2026, TCPC’s leverage measured 1.65 times and its net regulatory leverage was 1.29 times, both improvements from the year‑end 2025 levels of 1.74 times and 1.41 times, respectively. The asset‑coverage cushion stood at 10.9 % in Q1 2026.
Portfolio Performance and Non‑Accruals
Net realized losses amounted to 17.9 % of the average portfolio at fair value for the full year 2025 and narrowed to 2.3 % in the first quarter of 2026. Non‑accrual investments remained above average, representing 3 % of the debt portfolio at fair value and 8.4 % at cost as of Q1 2026.
Dividend and Capital Structure Adjustments
TCPC reduced its base dividend to $0.17 per share, down from $0.25 per share. In the same quarter, the firm refinanced $325 million of maturing senior unsecured notes using its secured revolving credit facility. This refinancing lowered the proportion of unsecured debt to 34.8 % of total debt, a decline from the four‑year average of 61.7 %.
Liquidity Position
The company reported cash and cash equivalents of $44 million and retained borrowing capacity under its credit facilities of $264 million at the end of Q1 2026.
Outlook Rationale
Fitch’s negative outlook reflects concerns that, despite leverage improvements, the elevated level of non‑accruals and the presence of paid‑in‑kind income could generate additional realized losses, and that the asset‑coverage cushion remains weaker than that of comparable peers.