ICMB's Net Investment Income Plunges 70% Amid Unrealized Losses

Ticker: ICMB · Form: 10-Q · Filed: Nov 12, 2025 · CIK: 1578348

Sentiment: bearish

Topics: BDC, Credit Management, Unrealized Losses, Net Investment Income, NAV Decline, Debt Increase, Financial Performance

TL;DR

**ICMB's portfolio is bleeding value, and its income is collapsing – steer clear.**

AI Summary

Investcorp Credit Management BDC, Inc. (ICMB) reported a significant decline in net investment income after taxes for the three and nine months ended September 30, 2025. For the three-month period, net investment income after taxes plummeted to $508,465 from $2,325,943 in the prior year, a decrease of 78.14%. The nine-month period saw an even steeper decline, falling to $1,716,139 from $5,713,407, a 69.97% reduction. This was primarily driven by a substantial decrease in total investment income, which fell from $6,846,775 to $4,356,484 for the three months, and from $18,584,183 to $13,270,447 for the nine months. The company also experienced a net change in unrealized depreciation on investments of $(1,768,995) for the three months and $(1,786,018) for the nine months, contrasting sharply with appreciation in the prior year. Total net assets decreased from $77,602,130 at December 31, 2024, to $72,703,326 at September 30, 2025, and Net Asset Value Per Share declined from $5.39 to $5.04. The company's debt, net, increased to $127,556,500 from $122,041,697, driven by a $5,000,000 increase in its revolving credit facility to $63,500,000.

Why It Matters

This significant drop in net investment income and NAV per share signals potential challenges for ICMB's profitability and investor returns. The substantial unrealized depreciation on investments suggests underlying asset quality concerns or unfavorable market conditions impacting its portfolio, which could lead to further write-downs. For investors, this indicates a weakening financial performance and a potential erosion of capital, making the stock less attractive compared to peers in the BDC sector. Employees might face pressure if the company's financial health continues to deteriorate, while customers could see reduced lending capacity or stricter terms. The broader market may view this as a sign of increased risk in certain credit segments, potentially impacting investor confidence in similar BDCs.

Risk Assessment

Risk Level: high — The risk level is high due to a 69.97% decrease in net investment income after taxes for the nine months ended September 30, 2025, falling to $1,716,139 from $5,713,407. Additionally, the company reported a net change in unrealized depreciation on investments of $(1,786,018) for the nine-month period, a stark reversal from the $13,509,819 appreciation in the prior year, indicating significant portfolio value erosion.

Analyst Insight

Investors should consider reducing exposure to ICMB given the sharp decline in net investment income and significant unrealized losses. A deeper dive into the specific underperforming investments, such as CareerBuilder, LLC Term Loan B3 with a fair value of $584,461 against an amortized cost of $4,808,811, is warranted before making any new investment decisions.

Financial Highlights

debt To Equity
1.75
revenue
$4,356,484
total Debt
$127,556,500
net Income
$508,465
eps
$5.04
revenue Growth
-36.37%

Revenue Breakdown

SegmentRevenueGrowth
Total Investment Income$4,356,484-36.37%
Total Investment Income$13,270,447-28.59%

Key Numbers

Key Players & Entities

FAQ

What caused the significant drop in Investcorp Credit Management BDC, Inc.'s net investment income?

The significant drop in Investcorp Credit Management BDC, Inc.'s net investment income was primarily due to a decrease in total investment income, which fell from $6,846,775 to $4,356,484 for the three months ended September 30, 2025, and from $18,584,183 to $13,270,447 for the nine months ended September 30, 2025.

How did Investcorp Credit Management BDC, Inc.'s Net Asset Value Per Share change?

Investcorp Credit Management BDC, Inc.'s Net Asset Value Per Share decreased from $5.39 as of December 31, 2024, to $5.04 as of September 30, 2025, representing a decline of $0.35 per share.

What is the current debt level for Investcorp Credit Management BDC, Inc.?

As of September 30, 2025, Investcorp Credit Management BDC, Inc.'s net debt stood at $127,556,500, an increase from $122,041,697 reported on December 31, 2024. This includes a revolving credit facility of $63,500,000.

What were the key changes in Investcorp Credit Management BDC, Inc.'s investment portfolio?

The company experienced a net change in unrealized depreciation on investments of $(1,768,995) for the three months and $(1,786,018) for the nine months ended September 30, 2025. This contrasts with net unrealized appreciation of $8,337,191 and $13,509,819 for the respective prior-year periods.

Are there any specific investments in Investcorp Credit Management BDC, Inc.'s portfolio showing significant depreciation?

Yes, an example is the CareerBuilder, LLC Term Loan B3, which had an amortized cost of $4,808,811 but a fair value of only $584,461 as of September 30, 2025, indicating substantial depreciation.

How did Investcorp Credit Management BDC, Inc.'s total assets change?

Investcorp Credit Management BDC, Inc.'s total assets increased slightly to $210,636,079 as of September 30, 2025, from $206,851,730 as of December 31, 2024.

What was Investcorp Credit Management BDC, Inc.'s earnings per share for the quarter?

For the three months ended September 30, 2025, Investcorp Credit Management BDC, Inc. reported basic and diluted earnings per share of $(0.09), a significant decrease from $0.46 in the same period of 2024.

What is the outlook for Investcorp Credit Management BDC, Inc. given these results?

The filing indicates a challenging period for Investcorp Credit Management BDC, Inc. with declining investment income and significant unrealized losses. Investors should be cautious as these trends suggest potential ongoing pressure on profitability and asset values.

Did Investcorp Credit Management BDC, Inc. declare any distributions to stockholders?

Yes, Investcorp Credit Management BDC, Inc. declared distributions of $0.14 per common share for the three months ended September 30, 2025, and $0.38 per common share for the nine months ended September 30, 2025.

What is the significance of the increase in Investcorp Credit Management BDC, Inc.'s revolving credit facility?

The increase in Investcorp Credit Management BDC, Inc.'s revolving credit facility to $63,500,000 from $58,500,000 suggests the company is utilizing more leverage, which could be to fund new investments or manage liquidity, but also increases financial risk given the current performance trends.

Risk Factors

Industry Context

Investcorp Credit Management BDC, Inc. operates within the Business Development Company (BDC) sector, which typically provides financing to middle-market companies. The industry is characterized by its sensitivity to interest rate changes and overall economic conditions, impacting both investment income and the valuation of portfolios. Competition among BDCs for attractive investment opportunities can be intense.

Regulatory Implications

As a BDC, ICMB is subject to regulations that govern its investment activities, leverage, and distributions. Changes in these regulations or the company's ability to comply with them can significantly affect its financial performance and operational capacity. The current market environment may also put pressure on BDCs to maintain adequate asset coverage ratios.

What Investors Should Do

  1. Monitor investment income trends closely.
  2. Assess the impact of unrealized depreciation.
  3. Analyze the company's leverage strategy.
  4. Compare NAV per share trends to peers.

Key Dates

Glossary

Net Investment Income After Taxes
The profit generated from the company's investment activities after deducting all expenses and taxes. (A key measure of profitability for BDCs, indicating the income available for distribution to shareholders.)
Net Change in Unrealized Appreciation (Depreciation)
The change in the market value of investments that have not been sold, reflecting gains or losses due to market price fluctuations. (Indicates the impact of market movements on the value of the company's investment portfolio.)
Net Asset Value Per Share (NAV per Share)
The market value of a company's assets minus its liabilities, divided by the number of outstanding shares. (Represents the per-share value of the company's investments and is a critical metric for BDCs.)
Revolving Credit Facility
A type of credit line that allows a company to borrow, repay, and re-borrow funds up to a certain limit over a specified period. (Represents a source of debt financing that can impact leverage and liquidity.)
Business Development Company (BDC)
A type of closed-end investment company that invests in small and medium-sized businesses and financially distressed companies, often providing debt and equity financing. (ICMB operates under this structure, which comes with specific regulatory and operational characteristics.)

Year-Over-Year Comparison

Compared to the prior year, Investcorp Credit Management BDC, Inc. has experienced a significant downturn. Total investment income for the three months ended September 30, 2025, decreased by 36.37% to $4,356,484 from $6,846,775, and for the nine-month period, it fell by 28.59% to $13,270,447 from $18,584,183. This revenue decline, coupled with substantial unrealized depreciation of $(1,768,995) for the quarter (versus $8,337,191 appreciation last year), has led to a sharp 78.14% drop in net investment income after taxes for the quarter to $508,465. Net assets have also contracted, and NAV per share has declined from $5.39 to $5.04, while total debt has increased.

Filing Stats: 4,115 words · 16 min read · ~14 pages · Grade level 10.2 · Accepted 2025-11-12 17:14:16

Key Financial Figures

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Statements of Assets and Liabilities as of September 30, 2025 (unaudited) and December 31, 2024 1 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 (unaudited) and September 30, 2024 (unaudited) 2 Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2025 (unaudited) and September 30, 2024 (unaudited) 3 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 (unaudited) and September 30, 2024 (unaudited) 4 Consolidated Schedule of Investments as of September 30, 2025 (unaudited) 5 Consolidated Schedule of Investments as of December 31, 2024 10 Notes to the Unaudited Consolidated Financial Statements 15 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 47 Item 4.

Controls and Procedures

Controls and Procedures 48

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 49 Item 1A.

Risk Factors

Risk Factors 49 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 49 Item 3. Defaults Upon Senior Securities 49 Item 4. Mine Safety Disclosures 49 Item 5. Other Information 49 Item 6. Exhibits 51

SIGNATURES

SIGNATURES 52 Investcorp Credit Management BDC, Inc. and Subsidiaries Consolidated Statemen ts of Assets and Liabilities September 30, 2025 (Unaudited) December 31, 2024 Assets Non-controlled, non-affiliated investments, at fair value (amortized cost of $ 190,433,861 and $ 184,154,029 , respectively) $ 194,102,143 $ 188,602,029 Affiliated investments, at fair value (amortized cost of $ 16,376,153 and $ 16,351,878 , respectively) 2,032,904 3,014,929 Total investments, at fair value (amortized cost of $ 206,810,014 and $ 200,505,907 ,respectively) 196,135,047 191,616,958 Cash 3,860,953 771,483 Cash, restricted 7,772,207 11,333,064 Principal receivable 296,804 720,855 Interest receivable 1,718,220 1,576,381 Payment-in-kind interest receivable 188,912 85,399 Long-term receivable — 489,365 Short-term receivable 352,308 160,901 Prepaid expenses and other assets 311,628 97,324 Total Assets $ 210,636,079 $ 206,851,730 Liabilities Debt: Revolving credit facility $ 63,500,000 $ 58,500,000 2026 Notes payable 65,000,000 65,000,000 Deferred debt issuance costs ( 907,945 ) ( 1,369,415 ) Unamortized discount ( 35,555 ) ( 88,888 ) Debt, net 127,556,500 122,041,697 Payable for investments purchased 3,135,313 1,474,677 Dividend payable 2,020,368 1,728,749 Income-based incentive fees payable 364,405 501,955 Base management fees payable 775,225 769,176 Interest payable 2,835,787 1,894,921 Deferred income liability 517,499 — Directors' fees payable — 81,323 Accrued expenses and other liabilities 727,656 757,102 Total Liabilities 137,932,753 129,249,600 Commitments and Contingencies (see Note 6) Net Assets Common stock, par value $ 0.001 per share ( 100,000,000 shares authorized and 14,431,202 and 14,406,244 shares issued and outstanding, respectively) 14,431 14,406 Additional paid-in capital 203,575,

View Full Filing

View this 10-Q filing on SEC EDGAR

View on Read The Filing