BlackRock’s business development company (BDC) has agreed to sell 48 per cent of its debt holdings to secondaries investor Pantheon as it seeks to address longstanding issues.

BlackRock TCP Capital Corp (TCPC), a publicly listed middle-market lender, has transferred a $523m (£389.1m) portfolio of private loans into a continuation vehicle (CV) backed by London-based Pantheon.

The transaction follows a difficult period for the BDC, which has recorded significant write-downs over the past year. BlackRock marked down the value of the fund by 19 per cent in January, and again in May by five per cent.

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In its latest quarterly earnings release, TCPC said it would retain a five per cent stake in the CV, while Pantheon will acquire the remaining 95 per cent.

The company said the deal is expected to reduce its net asset value by around 10.4 per cent, or 68 cents per share, while generating approximately $152m in gross proceeds.

BlackRock said the transaction would reduce the company’s leverage and future funding commitments, improving its financial flexibility and increasing its capacity to make new investments.

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“The transaction we announced…represents a major milestone that accelerates our progress in repositioning TCPC,” said Phil Tseng, chairman, chief executive and co-chief investment officer of BlackRock TCP Capital Corp.

“It meaningfully increases our financial flexibility by significantly lowering leverage and enhancing liquidity, while realising a substantial premium relative to the value implied by the company’s current share price.”

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