BlackRock TCP sells nearly half its BDC portfolio to a continuation vehicle

The continuation vehicle has long been a private-fund tool: a way for a general partner to hold assets past a fund's term while returning capital to limited partners. BlackRock TCP Capital Corp., a permanent public BDC with no fixed expiration, has now borrowed the structure for its own balance sheet. BDC Reporter, which covered the deal, says TCPC has disposed of nearly half the loans on its books and, in the same stroke, upended the just-completed $535 million CLO that financed them.

The sale price was a 5% discount to the loans' most recent fair value. Modest, on paper. The translation to book value is harsher. TCPC's net asset value per share fell 2.1% in the second quarter of 2026, after a 5.3% drop in the prior quarter; the last 12 months have cost 25%. Now the discount sale adds another 10% to the haircut, putting NAV per share at $5.90, down from $6.72 at the end of June. Five years ago the figure was $14.21.

The income statement takes the next hit. Net investment income per share for the second quarter was $0.22, a thin cover for the $0.17 dividend. But nearly half the income-yielding assets are gone, and BDC Reporter expects both NII and the dividend to drop substantially. The coverage leaves the dividend's fate unanswered.

BDC Reporter lists the blanks in the press release. Which loans moved into the vehicle and which stayed? Is TCPC keeping its $114 million of non-performing loans, valued at cost, or selling some portion of them — the article raises 48% as a possibility — or something else? How will the 5% interest TCPC retains in the continuation vehicle pay out; will there be quarterly distributions? Has TCPC given the buyer any guarantees? And why, having gone this far, not sell everything at once?

BDC Reporter's read on the strategic review: when BDCs engage outside advisers like KBW and talk about a "strategic review" — typically the purview of the external manager rather than a third party — a sale of the remaining portfolio seems the most likely upshot. That is inference, not confirmed. The success of any such sale, the article argues, depends on answers to those questions about what remains and what shape it is in.

Set the numbers side by side and the precedent is stark. A 5% discount to most recent fair value, amplified by leverage into a 10% NAV cut, is a reminder that fair value does not travel cleanly through borrowed money. Other BDCs with leveraged books and stressed NAVs will be watching whether this structure becomes a template or a one-off. The answer rests on the unresolved details: the non-performing loans, the buyer, the guarantees, the payout terms of the retained interest. Those are exactly the terms a skeptical buyer will demand to see on the rest of the book. A lender planning to keep going doesn't usually give away half its revenue base at a discount.