CION Investment Corporation Reports Third Quarter 2024 Financial Results

Solid Performance and Increased Financial Flexibility

NEW YORK--(BUSINESS WIRE)--November 07, 2024-- 

CION Investment Corporation $(CION)$ ("CION" or the "Company") today reported financial results for the third quarter ended September 30, 2024 and filed its Form 10-Q with the U.S. Securities and Exchange Commission.

CION also announced that, on November 4, 2024, its co-chief executive officers declared a fourth quarter 2024 base distribution of $0.36 per share, payable on December 16, 2024 to shareholders of record as of December 2, 2024.

THIRD QUARTER AND OTHER HIGHLIGHTS

   -- Net investment income and earnings per share for the quarter ended 
      September 30, 2024 were $0.40 per share and $(0.01) per share, 
      respectively; 
 
   -- Net asset value per share was $15.73 as of September 30, 2024 compared to 
      $16.08 as of June 30, 2024, a decrease of $0.35 per share, or 2.2%. The 
      decrease was primarily due to mark-to-market price declines to the 
      Company's portfolio during the quarter ended September 30, 2024; 
 
   -- As of September 30, 2024, the Company had $1.07 billion of total 
      principal amount of debt outstanding, of which 51% was comprised of 
      senior secured bank debt and 49% was comprised of unsecured debt. The 
      Company's net debt-to-equity ratio was 1.18x as of September 30, 2024 
      compared to 1.13x as of June 30, 2024; 
 
   -- As of September 30, 2024, the Company had total investments at fair value 
      of $1.75 billion in 103 portfolio companies across 24 industries. The 
      investment portfolio was comprised of 85.5% senior secured loans, 
      including 85.3% in first lien investments;1 
 
   -- During the quarter, the Company funded new investment commitments of $78 
      million, funded previously unfunded commitments of $15 million, and had 
      sales and repayments totaling $154 million, resulting in a net decrease 
      to the Company's funded portfolio of $61 million; 
 
   -- As of September 30, 2024, investments on non-accrual status amounted to 
      1.85% and 3.40% of the total investment portfolio at fair value and 
      amortized cost, respectively, compared to 1.36% and 2.69%, respectively, 
      as of June 30, 2024; 
 
   -- During the quarter, the Company repurchased 165,737 shares of its common 
      stock under its 10b5-1 trading plan at an average price of $12.08 per 
      share for a total repurchase amount of $2.0 million. Through September 
      30, 2024, the Company repurchased a total of 3,598,554 shares of its 
      common stock under its 10b5-1 trading plan at an average price of $10.09 
      per share for a total repurchase amount of $36.3 million; 
 
   -- On July 15, 2024, the Company further amended its $675 million senior 
      secured credit facility with JPMorgan Chase Bank, National Association 
      ("JPM") to (i) reduce the credit spread on the floating interest rate 
      payable by the Company on advances from the three-month SOFR plus a 
      credit spread of 3.20% per year to the three-month SOFR plus a credit 
      spread of 2.55% per year, and (ii) extend the reinvestment period from 
      July 15, 2024 to June 15, 2026 and the maturity date from May 15, 2025 to 
      June 15, 20272; 
 
   -- On September 18, 2024, the Company completed a private offering pursuant 
      to which the Company issued an additional $100 million of its unsecured 
      notes due 2027, which bear interest at a floating rate equal to the 
      three-month SOFR plus a credit spread of 3.90% per year; 
 
   -- On September 24, 2024, the Company fully repaid all outstanding 
      borrowings of $30 million under its 2021 term loan from an Israeli 
      institutional investor that was due on September 30, 2024; 
 
   -- On September 30, 2024, the Company entered into a 3-year unsecured term 
      loan agreement with an Israeli institutional investor under which the 
      Company borrowed $30 million, which bears interest at a floating rate 
      equal to the three-month SOFR plus a credit spread of 3.80% per year; and 
 
   -- On October 3, 2024, the Company completed a public baby bond offering in 
      the U.S. pursuant to which the Company issued $172.5 million of its 
      unsecured 7.50% Notes due 2029, which listed and commenced trading on the 
      NYSE under the ticker symbol "CICB" on October 9, 2024. 

DISTRIBUTIONS

   -- For the quarter ended September 30, 2024, the Company paid a quarterly 
      base distribution totaling $19.2 million, or $0.36 per share. 

Michael A. Reisner, co-Chief Executive Officer of CION, commented:

"I'm pleased with CION's quarterly results as we continue to navigate a highly competitive credit environment. Additionally, we were very active in managing the right side of CION's balance sheet in the third quarter. These transactions have given CION a more flexible balance sheet that we believe is better positioned to withstand potential volatility heading into next year."

SELECTED FINANCIAL HIGHLIGHTS

 
                                                 As of 
                                 ------------------------------------- 
(in thousands, except per 
share data and ratios)            September 30, 2024    June 30, 2024 
------------------------------   --------------------  --------------- 
Investment portfolio, at fair 
 value(1)                         $         1,752,726   $    1,822,963 
Total debt outstanding(3)         $         1,069,844   $    1,069,844 
Net assets                        $           839,190   $      860,806 
Net asset value per share         $             15.73   $        16.08 
Debt-to-equity ratio                            1.28x            1.24x 
Net debt-to-equity ratio                        1.18x            1.13x 
 
 
                                           Three Months Ended 
                                 --------------------------------------- 
(in thousands, except share 
and per share data)               September 30, 2024     June 30, 2024 
------------------------------   --------------------  ----------------- 
Total investment income           $           59,627    $      61,357 
Total operating expenses and 
 income tax expense               $           38,009    $      38,394 
Net investment income after 
 taxes                            $           21,618    $      22,963 
Net realized gains (losses)       $            3,938    $     (20,277) 
Net unrealized (losses) gains     $          (25,935)   $      19,692 
Net (decrease) increase in net 
 assets resulting from 
 operations                       $             (379)   $      22,378 
 
Net investment income per share   $             0.40    $        0.43 
Net realized and unrealized 
 losses per share                 $            (0.41)   $       (0.01) 
Earnings per share                $            (0.01)   $        0.42 
 
Weighted average shares 
 outstanding                              53,439,316       53,595,624 
Distributions declared per 
 share                            $             0.36    $        0.41 
 

Total investment income for the three months ended September 30, 2024 and June 30, 2024 was $59.6 million and $61.4 million, respectively. The decrease in total investment income was primarily driven by lower dividend income from equity securities during the three months ended September 30, 2024 compared to the three months ended June 30, 2024. This was partially offset by higher transaction fees during the three months ended September 30, 2024 compared to the three months ended June 30, 2024.

Operating expenses for the three months ended September 30, 2024 and June 30, 2024 were $38.0 million and $38.4 million, respectively. The decrease in operating expenses was primarily driven by lower advisory fees due to a decrease in total investment income during the quarter ended September 30, 2024 as compared to the quarter ended June 30, 2024.

PORTFOLIO AND INVESTMENT ACTIVITY(1)

A summary of the Company's investment activity for the three months ended September 30, 2024 is as follows:

 
                       New Investment               Sales and 
                         Commitments                Repayments 
                  -------------------------  ----------------------- 
Investment Type               Percentage of            Percentage of 
(in thousands)      Amount        Total       Amount       Total 
---------------   ----------  -------------  --------  ------------- 
Senior secured 
 first lien 
 debt              $  94,995    99%          $132,198    86% 
Senior secured 
 second lien 
 debt                     --    --             11,500     8% 
Collateralized 
securities and 
structured 
products - 
equity                    --    --                 21    -- 
Equity                 1,182     1%             9,861     6% 
                      ------  ----   ------   -------  ---- ------ 
  Total            $  96,177   100%          $153,580   100% 
                      ------  ----   ------   -------  ---- ------ 
 

During the three months ended September 30, 2024, new investment commitments were made across 1 new and 10 existing portfolio companies. During the same period, the Company exited its investments in 5 portfolio companies, 1 via sale and 4 via full repayment. As a result, the number of portfolio companies decreased from 107 as of June 30, 2024 to 103 as of September 30, 2024.

PORTFOLIO SUMMARY(1)

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November 07, 2024 08:00 ET (13:00 GMT)