BlackRock TCP Capital sells 95% stake in loan portfolio to Pantheon, cuts leverage sharply

What happened

BlackRock TCP Capital Corp. (TCPC) announced on August 6, 2026 that it had completed a major transaction the previous day: the sale of a 95% stake in a $523 million pool of loans to a group of investment funds managed by Pantheon Ventures (US) LP. The company retained a 5% interest and kept direct investments in substantially all of the portfolio companies.

The sale generated approximately $152 million in gross proceeds. Together with investment repayments received after June 30, 2026, the company expects net leverage to fall from 1.38x to about 0.4x, and to less than 0.3x after a previously announced portfolio company paydown.

TCPC also reported second-quarter earnings on August 6 and declared a third-quarter dividend of $0.17 per share. The company's board has engaged Keefe, Bruyette & Woods (KBW) to explore strategic alternatives to maximize shareholder value.

Details of the transaction

The transaction was structured through a 'continuation vehicle' — a separate entity, BlackRock DLF-C 2026, LLC, that holds the loan portfolio through a wholly-owned subsidiary, BlackRock DLF 2026-C CLO, LLC. TCPC transferred approximately two-thirds of its position in each of 78 portfolio companies to the continuation vehicle. The transferred assets represent about 48% of the fair market value of TCPC's pre-transaction debt portfolio.

The purchase price of $152 million reflects a sale at approximately 95% of the gross fair market value of the continuation vehicle as of December 31, 2025, subject to several adjustments detailed in the filing. Those adjustments include cash collateralization of unfunded commitments, net repayments between year-end and closing, and deduction of the CLO issuer's outstanding leverage of $406 million.

TCPC estimates the transaction will reduce its net asset value by approximately $57 million, or about $0.68 per share. The company intends to use the net proceeds initially to repay outstanding debt, pay transaction expenses, and for general corporate purposes.

The board of directors engaged Lincoln International LLC as a financial advisor, which rendered a fairness opinion on the consideration received.

Earnings and dividend

On August 6, TCPC issued a press release with its financial results for the second quarter ended June 30, 2026. The filing does not provide the specific earnings figures, but the press release and an investor presentation were attached as exhibits to the 8-K.

The company also declared a third-quarter dividend of $0.17 per share, payable on September 30, 2026 to stockholders of record as of September 16, 2026.

What this means

BlackRock TCP Capital Corp. is a business development company (BDC) — a publicly traded investment company that lends to and invests in middle-market companies. BDCs typically use leverage (borrowed money) to amplify returns. TCPC's net leverage ratio of 1.38x as of June 30 meant that for every $1 of equity, it had $1.38 of debt.

The transaction is effectively a partial portfolio sale that significantly reduces that leverage. By selling 95% of a continuation vehicle, TCPC removed about $523 million in loans and $406 million in associated debt from its balance sheet, while retaining a 5% equity stake and direct positions in the same borrowers. This is not a typical loan sale — it uses a continuation vehicle structure, which allows the company to transfer assets to a new entity that continues to be managed by its investment adviser (without compensation, in this case).

A continuation vehicle is a mechanism often used in private equity and credit to extend the hold period of assets while providing liquidity to existing investors. Here, TCPC used it to sell a majority stake to a new investor (Pantheon) while keeping exposure to the remaining upside.

The sharp reduction in leverage — from 1.38x to roughly 0.4x — gives TCPC substantial capacity to make new investments or return capital to shareholders. The board has hired KBW to formally evaluate strategic alternatives, which could include reinvesting, share repurchases, a merger, or an orderly wind-down of the portfolio. The company emphasized there is no guarantee any particular outcome will be pursued or achieved.

The stock rose 11.4% on heavy volume on the announcement day, reflecting investor relief that leverage is being reduced and that the board is actively seeking value-enhancing options.