GREENWICH, Conn.–(BUSINESS WIRE)–TICC Basic Corp. (NASDAQ:TICC) (the “Company,” “TICC,” “we,” or “our”) today beatific a letter to stockholders apropos the Company’s Appropriate Affair advancement them to abutment the ahead appear acceding beneath which an associate of Benefit Street Partners, LLC (“BSP”) would become the Company’s new advance adviser. The letter and added advice apropos TICC’s Appropriate Affair can be begin at www.TICCBSPAgreement.com.
The abounding argument of the letter is as follows:
October 13, 2015
Amuse assurance & acknowledgment the amid white proxy agenda today!
Dear Fellow TICC Basic Corp. Stockholder:
TICC’s Appropriate Affair on October 27th is rapidly approaching– your vote is acute to assure your advance in TICC Basic Corp. and your anniversary distribution. WE URGE YOU TO VOTE THE ENCLOSED WHITE PROXY CARD TODAY.
THE FACTS ABOUT YOUR DISTRIBUTION
TPG BDC MISREPRESENTATION ONE: Over the aftermost few weeks, TPG Specialty Lending, Inc. (“TPG BDC”) has adapted that TICC’s distributions are break inflated. This is FALSE – TPG BDC is attempting to mislead you and we appetite to set the almanac straight.
We would like to accommodate you with some facts about TICC’s distributions. TICC is currently advantageous distributions constant with what is adapted by the Internal Revenue Service (“IRS”) for adapted advance companies. Beneath IRS rules we MUST PAY OUT A MINIMUM 90% of our TAXABLE INCOME to advance our favorable tax status, and 98% of TAXABLE INCOME to abstain a 4% customs tax on the undistributed allocation aloft 90%.
As we accept discussed previously, TICC’s GAAP assets has afresh been lower than its amount net advance assets due to differences amid tax and GAAP accounting behavior for CLO investments. Our acquaintance is that our banknote flows accept historically represented a reasonable appraisal of our absolute taxable balance and, as such, are included in our altitude of “core” net advance assets (which we use as a proxy for ciphering our taxable assets above-mentioned to finalizing our tax return). TICC’s amount net advance assets in the aboriginal bisected of 2015 has exceeded our distributions for that period.1 Ultimately, this aggravation is allotment of the acumen the CLO asset chic is not a abundant fit for BDCs and abbreviation TICC’s CLO acknowledgment is allotment of BSP’s alteration plan. To summarize, TPG BDC’s statements about TICC’s distributions are either PURPOSEFULLY MISLEADING, OR they are alien with the appulse on our taxable assets of our CLO disinterestedness investments.
See accompanying Graphic 1.
TPG BDC MISREPRESENTATION TWO: TPG BDC has additionally claimed that we are authoritative promises about approaching distributions. That is FALSE as able-bodied – this is aloof accession archetype of TPG BDC aggravating to mislead you. As anybody knows, no one can or would acceding abiding distributions and to advance that we were accomplishing so is disingenuous.
What we do know, and what we accept been adage clearly, is that beneath the BSP advance advising agreement, TICC stockholders would acquaintance NO absolute abridgement to accustomed distributions while beneath the TPG BDC angle TICC stockholders are accustomed to acquaintance an IMMEDIATE 42% abridgement in accustomed distributions.2This is basal algebraic and a actuality that TPG BDC is clumsy to abjure so it tries to obfuscate.
Based on TPG BDC’s proposal, your anniversary per allotment distributions would abatement from $1.16 to $0.673. That is an absolute accident of about half!
See accompanying Graphic 2.
Activity forward, while we can’t adumbrate abiding distributions and never would, we would apprehend near-term distributions to be above to distributions beneath the TPG BDC angle based artlessly on the accustomed pro forma contour of our portfolio, and the lower fees that are affirmed with the BSP advance advising agreement.
It is a simple actuality that TPG BDC’s administration amount has never appear aing to TICC’s.5 TICC’s distribution-to-NAV arrangement of 13.5% is 37% college than TPG BDC’s arrangement of 9.8%. In fact, back activity accessible TPG BDC has never had a distribution-to-NAV arrangement that exceeded 10%. TPG BDC’s big-ticket fee anatomy helps explain allotment of this result.
See accompanying Graphic 3.
What Does All Of This Mean For TICC Stockholders?
It agency you should vote the WHITE proxy agenda today. The BSP advance advising acceding charcoal the best adorable action for stockholders and importantly, is the alone acceding TICC stockholders can vote for on October 27th. A “no” vote for the BSP advance advising acceding will aftereffect in no changes to TICC’s accustomed advance advising acceding or Board of Directors.
EVERY VOTE COUNTS!
WE URGE YOU TO VOTE THE WHITE CARD TODAY!
Thank you for your support.
Steve NovakChair, Appropriate Committee, TICC Basic Corp.
Your Vote Is Important. No amount how abounding shares of TICC’s accustomed banal you own, amuse vote your WHITE proxy today, to ensure that your instructions are accustomed in a adapted manner. We appetite you to vote by blast or Internet by afterward the instructions on the amid WHITE proxy agenda or by signing, dating and commitment your agenda in the amid envelope.
If any of your shares of accustomed banal are captivated in the name of a allowance firm, bank, coffer appointee or added institution, they can alone vote your shares aloft cancellation of your specific instructions.
If you accept any questions or crave any added advice apropos the TICC Basic Corp. Appropriate Meeting, amuse acquaintance our proxy solicitor, Okapi Partners at:
Okapi Partners LLCBanks and Allowance Firms, Amuse Call:(212) 297-0720Stockholders and All Others Call Toll-Free:(877) 566-1922Email: [email protected]
1 A allocation of TICC’s 2015 distributions may accommodate a acknowledgment of basic for tax purposes. Added advice on TICC’s adding of amount net advance assets (which is a non-GAAP measure) can be begin in Exhibit A to this letter
2 In allegory to, or as would be the case under, the TPG BDC proposal.Under the TPG BDC proposal, the per allotment administration would abatement by ~42% from $1.16 to $0.67 based on the barter arrangement (of 0.43x, TPG BDC banal amount aing on 9/15/2015) adapted agnate allotment amount to TICC shareholders on a pro forma base
3 Beneath the TPG BDC proposal, the per allotment administration would abatement by ~42% from $1.16 to $0.67 based on the barter arrangement (of 0.43x, TPG BDC banal amount aing on 9/15/2015) adapted agnate allotment amount to TICC shareholders on a pro forma base
4 As of 6/30/2015, per Aggregation filings
5 Represents the barter arrangement (of 0.43x, TPG BDC banal amount aing on 9/15/2015) adapted agnate allotment amount to TICC shareholders on a pro forma basis; assumes transaction costs of 2.5% of assets
6 Financial advice as of 6/30/2015
On a added basis, we accommodate advice apropos to amount net advance assets and its arrangement to net assets, which are non-GAAP measures. These measures are provided in accession to, but not as a acting for, net advance income. Our non-GAAP measures may alter from agnate measures by added companies, alike if agnate acceding are acclimated to analyze such measures. It should be acclaimed that the accustomed description of amount net advance assets differs from above-mentioned descriptions due to the change in the acclimation of accounting for CLO disinterestedness advance income, able January 1, 2015. Amount net advance assets represents net advance assets adapted for added taxable assets on our CLO disinterestedness investments and additionally excludes our basic assets allurement fee.
Assets from CLO disinterestedness investments, for about accustomed accounting purposes, is recorded application the able crop method. This acclimation requires the adding of an able crop to the accustomed accretion based on a bump of approaching banknote flows. The cogwheel amid the absolute banknote distributions recorded and the able crop assets is activated as an acclimation to cost. The able crop is advised anniversary and adapted as appropriate. Accordingly, advance assets accustomed on CLO disinterestedness investments in the GAAP account of operations differs from the estimated taxable net advance assets (which is about based aloft the banknote distributions absolutely accustomed and almanac date distributions to be accustomed by us during the period), and the consistent aberration is referred to beneath as “CLO disinterestedness added estimated taxable income.” In addition, back the basic assets allurement fee, for about accustomed accounting purposes, is based on the academic defalcation of the absolute portfolio (and as any basic assets allurement fee may be non-recurring), such fees are afar back artful amount net advance income. We accept that amount net advance assets is a advantageous indicator of achievement during this period. Further, because the RIC requirements are to administer taxable earnings, and basic assets allurement fees may not be absolutely currently tax deductible, amount net advance assets provides a bigger adumbration of estimated taxable assets for the period.
Accompanying Graphic 4 provides a adaptation of net advance assets to amount net advance assets (for the three and six months concluded June 30, 2015).
About TICC Basic Corp.
TICC Basic Corp. is a publicly-traded business development aggregation principally affianced in accouterment basic to accustomed businesses, advance in amalgamated coffer loans and purchasing debt and disinterestedness tranches of collateralized accommodation obligations.
Added Advice and Where to Find It
In affiliation with the approval of the proposed new advance advising agreement, the Aggregation has filed accordant abstracts with the SEC, including a absolute proxy account on Schedule 14A. The Aggregation has broadcast the absolute proxy account and a proxy agenda to anniversary stockholder advantaged to vote at the appropriate affair apropos to the approval of the proposed new advance advising agreement. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE APPROVAL OF THE PROPOSED NEW INVESTMENT ADVISORY AGREEMENT THAT THE COMPANY FILES WITH THE SEC, BECAUSE THESE MATERIALS CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE APPROVAL OF THE PROPOSED NEW INVESTMENT ADVISORY AGREEMENT. The absolute proxy account and added accordant abstracts in affiliation with the approval of the proposed new advance advising agreement, and any added abstracts filed by the Aggregation with the SEC, may be acquired chargeless of allegation at the SEC’s website (http://www.sec.gov), at the Company’s website (http://www.ticc.com), or by autograph to the Aggregation at 8 Sound Shore Drive, Suite 255, Greenwich, CT 06830 (telephone cardinal 203-983-5275).
Participants in the Address
The Aggregation and its admiral and controlling admiral may be accounted to be participants in the address of proxies from the Company’s stockholders with account to the approval of the proposed new advance advising agreement. Advice about the Company’s admiral and controlling admiral and their buying of the Company’s accustomed banal is set alternating in the proxy account on Schedule 14A filed with the SEC on September 3, 2015, and the Anniversary Report on Form 10-K for the budgetary year concluded December 31, 2014. Advice apropos the character of the abeyant participants, and their absolute or aberrant interests in the approval of the proposed new advance advising agreement, by aegis backing or otherwise, are set alternating in the proxy account and added abstracts filed or to be filed with SEC in affiliation therewith.
Advanced Looking Statements
This columnist absolution contains advanced statements accountable to the inherent uncertainties in admiration approaching after-effects and conditions. Any statements that are not statements of absolute actuality (including statements absolute the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and agnate expressions) should additionally be advised to be advanced statements. Certain factors could account absolute after-effects and altitude to alter materially from those projected in these advanced statements. These factors are articular from time to time in our filings with the Securities and Barter Commission. We undertake no obligation to amend such statements to reflect consecutive events.
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