Barings Corporate Investors Reports Preliminary Second Quarter 2024 Results and Announces Increased Quarterly Cash Dividend Of $0.40 Per Share

Rhea-AI Summary

Barings Corporate Investors (NYSE: MCI) reported preliminary Q2 2024 results and increased its quarterly dividend. Key highlights include:

- Net investment income of $8,623,260 ($0.42 per share), up from $8,072,938 ($0.40 per share) in Q1 2024
- Net increase in assets from operations of $6,633,072 ($0.33 per share)
- Total net assets of $350,112,108 ($17.22 per share)
- Quarterly dividend increased by 2.6% to $0.40 per share

The Trust made five new investments totaling $4.5 million and 22 add-on investments totaling $5.4 million. Ten loans were repaid at par totaling $29.0 million. The Trust had $26.9 million in cash and short-term investments and $30.0 million in outstanding borrowings as of March 31, 2024.

Positive

• Net investment income increased to $0.42 per share in Q2 2024, up from $0.40 per share in Q1 2024
• Quarterly dividend increased by 2.6% to $0.40 per share
• Made five new investments totaling $4.5 million and 22 add-on investments totaling $5.4 million
• Ten loans repaid at par totaling $29.0 million

Negative

• Net realized losses of $1,165,538 ($0.06 per share) in Q2 2024, compared to gains of $1,770,637 in Q1 2024
• Net unrealized depreciation of $642,281 ($0.03 per share) in Q2 2024
• Net asset value per share decreased to $17.22 as of June 30, 2024, from $17.28 as of March 31, 2024

Insights

Financial Analyst

This quarterly report reveals a mixed financial performance for Barings Corporate Investors. The Trust's net investment income increased to $0.42 per share, up from $0.40 in the previous quarter. However, this was partly due to $0.03 per share of non-recurring income. The Trust reported net realized losses of $1.17 million, a significant shift from the $1.77 million gain in the previous quarter.

On a positive note, the Trust increased its quarterly dividend by 2.6% to $0.40 per share, marking the eighth consecutive quarterly increase. This demonstrates confidence in the Trust's ability to generate stable returns. The NAV per share slightly decreased from $17.28 to $17.22, primarily due to realized losses.

Investors should note the Trust's focus on first-lien senior secured middle-market investments, which could provide stability in uncertain economic conditions. However, the shift from realized gains to losses warrants careful monitoring in future quarters.

Investment Strategist

Barings Corporate Investors' latest results highlight both opportunities and challenges in the current market environment. The Trust's strategy of focusing on leading businesses with strong sponsor ownership and conservative capital structures appears to be paying off, as evidenced by the consistent dividend increases.

The Trust's portfolio activity shows a cautious approach, with five new investments totaling $4.5 million and 22 add-on investments totaling $5.4 million. This selective investment strategy, combined with the repayment of ten loans at par totaling $29.0 million, suggests a focus on quality over quantity.

However, investors should be aware of the $21.8 million in unfunded commitments, which could impact future performance depending on market conditions. The Trust's liquidity position, with $26.9 million in cash and short-term investments, provides some cushion for these commitments and potential market volatility.

CHARLOTTE, N.C.--(BUSINESS WIRE)-- The Board of Trustees of Barings Corporate Investors (NYSE: MCI) (the "Trust") met on August 15, 2024, and would like to report its preliminary financial results for the second quarter of 2024.

Financial Highlights(1)	Three Months Ended June 30, 2024						Three Months Ended March 31, 2024
	Total Amount			Per Share(5)			Total Amount		Per Share(4)
Net investment income(2)	$	8,623,260		$	0.42		$	8,072,938	$	0.40
Net realized (losses) / gains(3)	$	(1,165,538	)	$	(0.06	)	$	1,770,637	$	0.08
Net unrealized appreciation / (depreciation)	$	(642,281	)	$	(0.03	)	$	552,329	$	0.03
Net increase in net assets resulting from operations	$	6,633,072		$	0.33		$	10,293,583	$	0.51
Total net assets (equity)	$	350,112,108		$	17.22		$	350,763,288	$	17.28
(1) All figures for 2024 are unaudited (2) June 30, 2024 figures net of less than $0.01 per share of taxes (3) June 30, 2024 figures net of less than $0.01 per share of taxes (4) Based on shares outstanding at the end of the period of 20,298,644 (5) Based on shares outstanding at the end of the period of 20,334,874

Key Highlights:

Commenting on the quarter, Christina Emery, President, stated, "The Trust earned $0.42 per share of net investment income, net of taxes, for the second quarter of 2024, compared to $0.40 per share in the previous quarter. The increase in net investment income was predominantly due to $0.03 per share of non-recurring income (repayment of past due income) received in the second quarter. The Trust has increased dividends for the last eight quarters, which is further confirmation of our credit philosophy, where we focus on leading businesses backed by strong sponsor ownership and conservative capital structures. This approach has historically generated stable returns and relative stability during economic stress. During the quarter, Barings continued to drive origination flow into quality, 1st lien senior secured middle-market investments. When constructing portfolios, we focus on investing in high-quality businesses that are leaders in their space and offer defensive characteristics that will allow them to perform through economic cycles.”

The Board of Trustees declared a quarterly dividend of $0.40 per share, payable on September 13, 2024, to shareholders of record on August 26, 2024. This represents an increase of $0.01 per share or 2.6% over the previous dividend of $0.39 per share.

During the three months ended June 30, 2024, the Trust reported total investment income of $10.5 million, net investment income of $8.6 million, or $0.42 per share, and a net increase in net assets resulting from operations of 6.8 million, or $0.33 per share.

Net asset value ("NAV") per share as of June 30, 2024, was $17.22, as compared to $17.28 as of March 31, 2024. The decrease in NAV per share was primarily attributable to net realized losses on investments, net of taxes of $0.06 per share.

The next scheduled meeting of the Board of Trustees will be held on November 14, 2024.

Recent Portfolio Activity

During the three months ended June 30, 2024, the Trust made five new investments totaling $4.5 million and 22 add-on investments in existing portfolio companies totaling 5.4 million. During the three months ended June 30, 2024, the Trust had ten loans repaid at par totaling $29.0 million and realized three equity investments that generated realized gains of $1.8 million.

Liquidity and Capitalization

As of March 31, 2024, the Trust had cash and short-term investments of $26.9 million and $30.0 million of borrowings outstanding. The Trust had unfunded commitments of $21.8 million as of June 30, 2024.

Net Capital Gains

The Trust realized net capital losses of $1,165,538 or $0.06 per share during the quarter ended June 30, 2024. By comparison, for the quarter ended March 31, 2024, the Trust realized net capital gains of $1,770,637 or $0.08 per share.

About Barings Corporate Investors

Barings Corporate Investors is a closed-end management investment company advised by Barings LLC. Its shares are traded on the New York Stock Exchange under the trading symbol ("MCI").

About Barings LLC

Barings is a $409+ billion* global investment manager sourcing differentiated opportunities and building long-term portfolios across public and private fixed income, real estate, and specialist equity markets. With investment professionals based in North America, Europe and Asia Pacific, the firm, a subsidiary of MassMutual, aims to serve its clients, communities, and employees, and is committed to sustainable practices and responsible investment. Learn more at www.barings.com.

*Assets under management as of June 30, 2024

Per share amounts are rounded to the nearest cent.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Cautionary Notice: Certain statements contained in this press release may be "forward looking" statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management’s current estimates, projections, expectations or beliefs, and which are subject to risks and uncertainties that may cause actual results to differ materially. These statements are subject to change at any time based upon economic, market or other conditions and may not be relied upon as investment advice or an indication of the fund's trading intent. References to specific securities are not recommendations of such securities, and may not be representative of the fund's current or future investments. We undertake no obligation to publicly update forward looking statements, whether as a result of new information, future events, or otherwise.

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MediaRelations@barings.com

Source: Barings Corporate Investors

FAQ

What was MCI's net investment income for Q2 2024?

Barings Corporate Investors (MCI) reported net investment income of $8,623,260 or $0.42 per share for Q2 2024.

How much did MCI increase its quarterly dividend in Q2 2024?

MCI increased its quarterly dividend by 2.6% to $0.40 per share, payable on September 13, 2024.

What was MCI's net asset value per share as of June 30, 2024?

MCI's net asset value per share was $17.22 as of June 30, 2024, compared to $17.28 as of March 31, 2024.

How many new investments did MCI make in Q2 2024?

MCI made five new investments totaling $4.5 million and 22 add-on investments totaling $5.4 million in Q2 2024.