HERCULES CAPITAL (HTGC)

What Moves the Stock

1. 1Net investment income (NII) per share and dividend coverage ratio - ability to sustain or grow quarterly distributions
2. 2Portfolio credit quality metrics - non-accrual rates, realized losses, and migration of portfolio companies to later funding rounds or exits
3. 3New loan origination volumes and deployment rates - ability to put capital to work at attractive yields
4. 4Warrant monetization events - IPOs or M&A exits of portfolio companies generating realized gains
5. 5Changes in base interest rates (SOFR/Prime) affecting floating-rate loan yields and cost of debt capital
6. 6Interest income on senior secured debt facilities (estimated 75-80% of total revenue)
7. 7Fee income from origination, commitment, and facility fees (estimated 10-15% of total revenue)
8. 8Warrant and equity investment gains from portfolio company exits (estimated 5-10% of total revenue, highly variable)

HTGC Chart

My Notes

• dividend - BDC structure mandates high dividend payout ratios (90%+ of taxable income)…
• Dual impact - Rising rates are initially positive for net interest income as the majority of the loan portfolio is floating-rate (typically…
• Watch on earnings: NVCA Venture Capital Fundraising Index and quarterly deployment statistics (leading indicator of loan demand), High yield credit spreads (BAMLH0A0HYM2) as proxy for risk appetite and credit conditions, Technology IPO and M&A exit activity (drives warrant monetization and portfolio company refinancing ability).