Hercules Capital (HTGC) 2 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Hercules Capital First Quarter 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Michael Hara, Director of Investor Relations. Please go ahead.

Gerald. you, Thank and First everyone, Hercules Call Conference Good of welcome XXXX. the Quarter for afternoon, to With the Seth CEO and us Scott Chief are on Investment call today Officer; and Meyer, Hercules CFO. from Bluestein,

be webcast XX were Web released page Investor call. section today's and Investor Hercules financial days be conference accessed An available just Hercules' archived results from investor.htgc.com. Relations least following will market the for after close at can replay at the Relations on

but forward-looking future statements call investment made current relied of number Any statements the make limited Form this the no and on should identified in other this our statements differ and may annual available any During Hercules making and decision. our statements reasons, that call, be assumptions the forward-looking obligation of based expectations. may during results to, made call are SEC's from own XX-K to we for assumes any not such in are financial in on upon not performance report update the are a forward-looking Actual only made this publicly as on These filings today's forward-looking date, guarantees website. future. of and not including, risks statements during

And Scott. turn with that, the I to will call over

all Thank joining you, XXXX the and thank for Earnings Michael, you Hercules Call. Capital QX

Hercules off a to to XXXX, is performance Capital our in operating Following record tremendous start XXXX.

stage continues platform in reflect an being performance record benefits QX venture to to institutional at origination lending funding and growth Our operate able the scale. and of

variety the emphasis have we to the asset employees, prudent underwriting, growth quality provide an and an that we results stage liability on built, year growth that with serve. unwavering shareholders ecosystem culture the speaks diversification to our our the custom-tailored and commitment for and venture consistently stage strength of and of XX-plus to operating Our history environments deliver our team-first and strong our and of market ability borrowers platform in a of solutions for

of of increase year As XX.X% is where Capital billion from assets, an QX, than $X.X a of end of were the Hercules ago. managing more we

with But last We to and environment. environment discussed continue to market as on another rate a XXXX to and we volatility we for for higher expected longer the improve our higher-than-normal be XXXX. macro originations call, new throughout market expect year

We have and from decisions liquidity and benefiting that are where the made XXXX already this witnessed throughout in QX, leverage. balance sheet now went we we we long low

deal offense our continuing to underwritings, to while enhance and remained relatively maintaining for aggressively sheet our includes new low flat business screens in and maintaining our QX. if it, We as we position, first in maximum lien did quickly balance exposure, continue credit higher-than-normal tightening XX.X% quality defensively our which leverage, at shift maintaining to and This warrants to manage flexibility QX. liquidity

for of we record QX in gross gross equity the gross debt and and commitments for funding $XXX is any historic Let me at start of our quality some debt the highlights In later-stage our back table, companies drove the were QX. on originated QX, strongest of fundings fundings ever now to respectively. of QX million, a decisions we put originations. very quarter of year in recap XXXX key million Many that $XXX.X the $XXX.X performance strong that delivered. that both and The million and off the for have

providing of XXX% fees excludes base up or of XX% of income very nearly coverage For investment over and XX.X%. to we quarter GAAP share, our XX% of $XXX of which were core despite leverage $X.XX accelerations the and $X.XX distribution year-over-year with generated early net benefit up $XX.X conservative ending achieve million, quarterly of total fee million $XXX.X of per fourth from income, investment XXX% coverage of repayments. our or per is our prepayment This base million, year-over-year; quarter QX, able distribution consecutive the income share. of nearly We

generated We on also in return equity QX of XX.X%.

portfolio and yield core yield generated XX%. a XX.X% of a of Our in GAAP QX effective

positioned differentiator remains continued support serves and well growth balance business. Our our as our a of to objectives sheet very key

The focus efforts of quality on QX origination was once our again and in diversification.

originations by towards activity activity funding Our was quarter, QX slightly more intentionally life both was during our new the delivering and sciences technology side. teams business again the performance weighted record driven sciences life although

companies, fundings approximately quarter were the of our XX% QX, commitments to approximately In to were life sciences during our while XX% companies. of life sciences

sector different slightly companies capital were technology as new on of optimistic in we more our year. view in Our funded new the which relationships. QX, borrower QX start the We debt commitments reflect XX to X

we with throughout quarter. companies what performance funding we Consistent and milestones show that first saw expanded relationship to continue our portfolio the numerous XXXX, strength achieve with during

unfunded from increased continued commitments million, commitment In $XXX.X of to and approximately to record current activity addition, led which the performance in $XXX QX. of strong an increase level new of available portfolio our million the

the commitments $XX.X of our funded close $XXX.X million. and April XXXX, new and has million QX, Since as of closed team of XX, deal

in We and progress expect sheets, QX. as commitments number we nonbinding an have of this pending to in continue grow we additional signed $XXX.X million to term

asset will prioritize with yield we transactions risk and underwriting new over disciplined Consistent will premium. higher approach on remain historical we our quality to a chasing with credit, originations,

pleased saw backdrop In portfolio quarter. X the which acquisitions, recently remain market we QX, completed XXXX, portfolio was X in with of the into our we carried in throughout first companies announce the that had Given March. activity during which exit XXXX, we

IPO. registration have statements also an that have We X portfolio filed companies for

decreased $XXX of we which our early with in to million approximately line million, As to repayments guidance loan was in $XXX $XXX million. anticipated, QX

expect be we although quarter. to accelerate in from levels progress the million of as to the we and XXXX, range $XXX QX in this prepayments QX For change million, could $XXX

quarter-over-quarter. of quality portfolio improved investment debt Credit the

normal of range. of end Our weighted QX rating at the X.XX improved rating our average historical in internal credit the from remains and low X.XX

X XX.X% in XX% to Our XX.X% QX. X QX Grade X improved Grade in XX% decreased versus credits to and in QX. credits compared to

Our X.X%. credits from X X.X% in rated and decreased credits rated to X moderately X.X% QX were

X on the with an loans million, X. X.X% by debt and increased We value X.X% nonaccrual had In number company's and fair of as respectively, nonaccrual $X.X percentage a and total investment on QX, of or of respectively. million value, investment cost at and investments $XX.X approximately the portfolio cost

pleased and to volatility. continued broader outlook, a level given credit our monitoring respect With on enhanced book remain we generally market and are portfolio what remains seeing we our by

focus underwriting Our base a is asset us to serve diversified credit continuing well. and on

throughout continue more to and book, sciences respect M&A the to the muted life technology things remain raising, of We terms side positive same. in are activity, while on see continuing slightly general capital momentum outperformance milestone to achievement and with our

companies During was was raising $X.X QX, new capital capital, strong which with sciences approximately very portfolio weighted raising XX billion in towards our again across our portfolio. life

$X.X of gain on net gains and million gains to $X net the million and investments. of offset equity to During QX the had of XXXX, comprised primarily on warrant warrant loss due $X.X Hercules realized million due realized equity investments, by

from value an in asset net Our XXXX. X.X% per $XX.XX, share QX QX increase was of

$XXX.X liquidity We ended QX strong million. of with

strong strong have business several is it be able we a a stable both to strong as is environment benefit sheet new and seen as in balance now. to years in from us position puts we Our and that very believe

gathered with activity approximately data at billion PitchBook and Venture fundraising investment $XX.X at approximately capital activity $X.X ecosystem and started fundraising according activity XXXX VCA. and to by billion, investment

We at expect levels these more terms of receiving investment company profile driven in the are activity to that selectivity by the remain funding. of equity

spillover increasing undistributed earnings strong QX, exited the we operating to ending performance in million with $XXX quarter our Given outstanding. per or $X.XX share approximately

distribution our supplemental per quarter distribution with and base supplemental consecutive quarterly provide regular on maintaining share. represents For of distribution base our QX, of a of top our of a are distribution. we to $X.XX able This XXth shareholders being our $X.XX

class, venture to able interest subsequent closing, been year our stage has trying QX, on always cumulative reaching our culture do growth are our By in the best in for shareholders platform to milestone investing stakeholders, things highs. In that our the in debt reach our marked incredible and team, commitments billion XXth of to the and focusing and company. $XX asset we

lending our business competitive drive macro Our our record levels. ability changing scale, to and institutionalized rapidly and to our continues to performance and a capitalize forward operating on platform environment

proud with since ago capabilities our employees success capital for tremendous and equity private of. us platform to day. incredibly place dedication, Having every our efforts borrowers the attributable in that over markets is inception deliver of and and of team to a the we is is all partners our venture XX are Our consistently that variety years something and that a trust able

Hercules We to many are their thankful to continue that teams management partner and investors companies, make of choice. the

call to I will now the over turn Seth.

afternoon, good and and you, Thank gentlemen. Scott, ladies

and low team and quarter first we and growth operate. to in quarter, a sponsor-backed The have record the the we as position maintained we entering was leverage of amazing originations venture in well space supported throughout was performance relationships the strategically by strong a as our the XXXX. liquidity debt which testament portfolio cost Hercules

first support X:X raising a million took advantage anticipated the growth, position a maintain and To ATM on leverage and strong GAAP quarter, us capital, both $XX in accretive the basis. we further very below by current of our of helping regulatory to

our approximately the LLC. and We end continue wholly the Adviser Adviser as platform, than available across to Hercules $X.X subsidiary, maintain including $XXX of billion by million managed liquidity strong quarter more of owned funds

to us which, our of in of performance quarterly $X.X the delivered million increase resulted $X.X million, combined dividend the million QX. in enabled approximately second the the of quarter cash when to Speaking Adviser, BDC with to expense reimbursement Hercules for $X.X

the that activity, outlook. and With of liquidity and income highlights, leverage and review the performance financial unrealized the and mind, areas statement in let's NAV realized

prior income prior was highlights. by with on Turning the and income our to year-to-date quarter year growth par driven investment and at the performance in the the $XXX.X Total statement debt record attention portfolio. million

result $XXX.X loan income income, investment investment at recognized million. as remained the stable non-GAAP Core a income a Core of of prepayments. benefit measure, excludes

income record payroll in share expenses compensation investment funding volume $XX.X $X.XX QX. or per in decreased variable due benefit to the and in to decrease, increase an driven peaking Net quarter-over-quarter QX, an X% by million and taxes of

to yields XX.X% due in yield XX.X% yield core the the the first in The quarter and in lower decrease core compared on revenue. lower a originations and was XX.X% XX%, commitment to effective prior and and to new expired changed Our respectively, modestly quarter.

in expense million remained recharged million costs fees million. First $XX.X net the $XX.X stable million. $XX.X the to prior quarter compared gross expenses to at of Net were operating quarter. $XX expenses RIA, operating and our were Interest

the of low increased SG&A at the expenses million. $XX.X to RIA, SG&A my were $XX.X guidance. Net million, end to of recharged the cost

average at X.X%. cost of weighted Our remained debt stable

first X.X%. total was Our ROAA, ROAE, NII or XX.X% assets, average was average And quarter. our the NII equity, over for or over

NAV the and to realized activity. focus the Switching unrealized

share events unrealized the per use the the of of During increase net gains The per positions warrant NAV and the ATM, quarter, million, dividends net $X.X the which of the share of share. of to $X.XX appreciation million, the realized accretion $XX.XX represents increased This our all on income exceeded were to drivers investment quarter. $XX.X in on realization NAV X.X% of per million, paid quarter-over-quarter. due $X.X equity an and mainly main

attributable unrealized of $X.X the million warrant appreciation movements $X.X of the attributable was of unrealized equity the in and million loan equity of million on of unrealized Our valuation million other appreciation was in appreciation portfolio. held the million. and of unrealized appreciation public net privately prior appreciation to addition These $X.X the million partially attributable depreciation on and net result were warrant $X.X to $X.X portfolio reversal $X.X offset the unrealized to and funds $X.X receivables. million of investment by exchange net of movements, investment-related the escrow the net to foreign unrealized depreciation and of

leverage of due to leverage For and was cash leverage our on volume of and our XX.X%, prior the sheet, greater XX% respectively, respectively. the our quarter Netting regulatory leverage on and balance the the out compared and million business. and utilization increased XX.X%, net GAAP facilities $XX.X to leverage liquidity, GAAP regulatory higher with to

We ended million of the quarter with available liquidity. nearly $XXX

more had of by very raised owned our excludes managed companies to liquidity amounts, us RIA $XXX Hercules available support subsidiary. and these As capital wholly Inclusive the a the portfolio positions by funds than this the strong of liquidity. our source new The existing well million platform reminder, opportunities.

to $X.XX in million, opportunistically share market continued final quarter the a a NAV. $XX as we point, I mentioned, approximately ATM during and, the per accretion resulting raised access to As

outlook the points. on Finally,

interest are we guidance range to yield quarter, our second changes. excluding the core XX.X% future For benchmark at XX.X%, updating any

As of not with portfolio interest a floor, fed our in decreases XX% our core yield. the reminder, more so have equal rate than reduction floating an to may is

prepayment in we Scott, $XXX Although by communicated $XXX million very difficult million to in the as activity to quarter. expect predict, second

expect the to to of prior our expense compared quarter. second interest the balance on sheet We slightly growth quarter increase the

For and SG&A an of of $XX $XX million allocation RIA expenses to the quarter, expense $X.X expect second we million. approximately million

Adviser in the dividends began Capital. to paying As quarter previously guided, business the fourth Hercules

we from of RIA dividend forward, quarterly million a approximately to Going million per $X.X the expect $X quarter.

for closing, is XXXX after and commitments fundings. to the well positioned rest XXXX business In see delivering the first develops. We're record of how excited quarter

to the part I over our the call the Gerald, will now over Q&A turn of call. you. to operator to begin

[Operator Our the Instructions] Crispin Piper question Sandler. with first line Love comes from of

continue First, fundings, million. in Hercules put the net early XXXX tailwind could elevated even levels And next first in mentioned to on with anomaly? quarter? an off pent-up a to you you the similar at debt quarter table drive the view to very of decisions fundings or through this the $XXX demand just the pent-up Do the year. first first of companies coming quarter demand quarters somewhat remain to strong few here Scott, nearly to fundings levels that as here back Or

Thanks, The activity was exceptionally in Crispin. strong. funding QX

you that to led of net million nearly debt over fundings, out, million. As gross $XXX growth million portfolio the $XXX of in $XXX net BDC investment pointed

pending our see closed at you can look continued you pipeline, and If momentum.

quarters. that that that saw we But see to So would the funding so we expect levels ago. environment back couple over say Most to likely QX? or reversion next certainly a I of Do saw continuation strong reach about to not. of we very year are we a levels the a the it expect don't in we optimistic a

since how little activity Great. you seeing a lenders a That the of environment competitive increasing Are environment private in from has on last pickup on a or the about bit whole. retrenchment? the all back bank and curious more the you question just others or any a environment, can March competitive just coming makes then And bigger of seeing talk a of just months banks then year? recent you sense. little a And turmoil any the exposure? or separately, are just year or space picture shifted last competitive from few Just a over year the as bit

Sure.

still status competitive I think for it's quo the on us, side.

market. pointed venture last I in few calls, As that there in still active out are the banks the are

we've with HSBC about of to the that handful transactions, see time banks we've of are We basis. out in but consistent continue of venture on competitors seen we banks deal-by-deal a other not from First couple a Citizens-SVB source time are have been venture handful to of a that market. no When is on think with we of on competition really and primarily seen on transactions, on and transactions. deal-by-deal you there competing see compete of the side a is The reality there market, a basis, we that nonbank of sort the

after have established can in that everywhere can put for that play stage, companies position on our on that expansion deals on balance $XXX are low able last $XX are round really terms strengthen million, to where end both financing, The the ends the our are in do do million, we being high-end us sheet, between. dominate looking both in of the a market, changes business that that are unique made and to we've really we go of of and deals

on continue side on tremendous to And control. both not that's side that well. so side operating and for the funding focus can and to much things leading And competitive as on results we us, the has changed the the obviously, we on

line of Our Mckenna next with the question Citizens. Brian comes from

funding to from out commentary figure trajectory portfolio the guess I the the of the just terms what activity there, of and trying outlook on all in is I'm but growth. new here appreciate I

then quarter. XX% So mean of quarters? a in of it that rate we what kind NII, no trajectory And about backdrop? sequentially. in coming that much think every grew But should moving likely the it the assuming the if increase doesn't growth might portfolio quarter I way, of in there's for shift appreciate the how the material forward cadence

the that quarterly pretty We increase net do, in it The now, gave did to high prepayment to we on million. guidance. million that was expect guidance quarter. $XXX substantially as Based we're we growth. second basis, Yes. don't, expect on prepayments seeing we updated expectations terms QX, for and number. of portfolio don't provide right certainly guidance provide provide, funding We would And always our $XXX of to be what end I Thanks, debt a the in on Brian. we

that's saw had So we double we where of what $XXX million in QX prepayments. almost

$XXX-plus not million expecting portfolio we're deliver net to growth. certainly So of another in QX, debt

think I a and somewhere between generally million, million of cadence on think going the gross million about to of of the fundings basic business, are basis. if we quarterly sort you $XXX $XXX do $XXX

can obviously the that know pull course just the prepayment of and out of the amortization what based You we call. our guidance can knowing prepayment pull as is on best normal you guidance then guess date we the give, that this out

Scott. Great. on Helpful, right. All just maybe question credit. And a then

So get just any are broadly, closely that status. bit? today? nonaccrual the talk you absolute, more any investment out about Can maybe a of? nonaccruals still to And there you're areas situations X in in you Or company then low portfolio you're watching just the across front added but are X to looking little

Sure.

That's the firm is it's So as a which very of always The very, credit perform well. book run. to we our very That's credit we're overall DNA. shop, continues firm We this be totality do. lending if closely. way really should what the portfolio watching the run a venture

of relative the about X $XX X% Grade book $X If in so a Grade cost in X did entirety Grade next nonaccrual X, in our That is you Grade reported, earnings has look it's call. value about X on we and basis. approximately million QX. has our million that that and very loan million small fair add situation at of just about our before loan $XX in small resolved It's $X that X a of We the is to than credits. less our expectation and numbers list basis, we'll a have million,

question from Our O'Shea Finian WFS. next from comes

us your thinking to you're introductory looks the year, sort with worked at of this positioning advantage you much hope back this It overall market. growth take on able or for Scott, to like you it company to some well. plan on the liquidity how year? Hercules BDC pretty update Are of what out going of today for and remarks next

deal Sure. for Thanks, pretty environment planning terms saw in quality, see we'll Having for robust what positioning clear were the ordinary of last in we in in a do strong where Finian. in several and next course. quarter said our and an expect year would back That's as origination we terms a growth. over just that's We we don't QX, We're XXXX. there we pull of year that originations to see were if we the improved what is quarters. that, preparing

a want how up position We the liquidity of of we're away over-levered balance optionality and how manage year, is caught that business flexibility. we defensive be managing it's we going to in which takes and to where just to the don't consistent business terms now, we or In think how with what terms last low positioning end the we we're very sheet. because in did be generally be

going the able quickly respect like continue we sure we on a in so saw advantage balance conservatively managing of healthy focus are if that So take it. position to opportunity I liquidity an to do we're that QX, to the we relatively and making very a leverage Seth with we're have to business strong have and and sheet, team

at. or the do Seth, a cessation midpoint, a bit Great. be a less follow-up think guidance origination? least imply caught below for we at Or at in I the It's that out how what about helpful. to started And growth I Adviser there dividends for that? the think little it Does

pent-up profits the and really, over It little that a first that the a quarter in in that spilled there's Yes. kind instance, dividend bit paid distribute, of little Sure, excess we cash of into and QX, first and could earnings we the first as Fin. well.

So to guidance but that's certainly would hope grow. million, we the to $X million stick going $X.X to of with continue I that

the of from Trading. Our Alexander next question Research Point comes Casey with Compass line &

NII quarters It's And a question up earnings order First ratio the I first understand beginning of of this I being year, you in the limits? more the XXXX, BDC running on some the it especially time all, while certainly totally lot anniversary. the an more quite stable mean if long being start you were accomplishment more business. leverage liquidity me could to take that the were of following My point within in congratulations at the is, to ago. in strategy in you a environment but do deliver you're at optimize of to leverage what XXth X, well at the still in much you shareholders seems than X the X.Xx. to upheaval

congratulations. Casey. It and for credit for the thanks company to and Yes. team. And Thanks, is the does the team, really the tremendous accomplishment go for the a first,

thanks So that for acknowledgment.

with what take ended GAAP XX%. I terms of year at leverage We begin and leverage just QX, the you We look of think leverage leverage with about GAAP about ended we of XX%. did we In up. in to did if liquidity, QX

a So debt given increase of pretty for $XXX quarterly that net we portfolio had that's us, growth. million over meaningful

prepayment to side were take take the expect up leverage of quarters, the to On to but that the and QX slowly X.Xx? going XXXX, that be will the throughout business. do to intent. of to we further to Are do happens we on difficult of will and get going because the to continue we next Are earnings course I continues to get It's which and say up X.XXx? Seth the help leverage really the our we depend what throughout several slowly drive to that expect largely clear business, on profitability cautiously call,

Great. Okay.

following so of And a deal usually kind than pent-up basically come and year-end lackluster of ago. marketplace the couple is of activity much years looks to larger to rush. quieter and activity quarter had size normally X is you quarter it's very was after it a like that a years starting first Secondly, your

levels when traditionally expect deal activity be actually similar So wouldn't I'm deal year of your as curious increases? activity QX to why the along you goes to

it's great a than the have point average would X, I that and significantly deals the we has question, years X, do capability X things. couple remained Yes, a out us Despite did ago, of actually constant. to X, we X, now the fact larger dollars funded for fairly

'XX, which portfolio year-ago of per QX is funded for our about the average referenced, $XX just example, was period that In you dollars company million.

at funded as of POCO. dollars million, QX you about 'XX, it's If that average $XX look data per today,

So very there lot terms much focused of of hasn't sort on within And been a is the in diversification that and of that of increase dollars. portfolio. granularity average We're self-imposed. an really the

the and they I the granularity big lot deals make forget our think when within a mistake about competitors is of that chase portfolio. a

is. top focus XX, a we what number of top intently outstanding POCO that book dollars our very So percentage our average per on as and our X, total

to bread-and-butter where ecosystem. upstream deals can now nature, to the We right handful think are the a we opportunity our to do that able that we in to larger to significant focusing a continue to of on larger the value in to move majority in There's deals also also do we but nature. still that QX were handful we're add we that. continue pipeline of our of are in continue that were see time some and There deals expect booked be

line of of Our next Hecht John from question comes the Jefferies.

don't of one fundings, flat just untypical. is, quarter? and end because your the growth was toward quarter. have back you substantial I But I with think the last income First of were guess, kind timing that's they the such the of And skewed interest somewhat

pretty where funding the did of month a once but last the typical for of each quarter, the again vast quarter. majority we us the in of Yes, come the X activity have in quarter months

that? of a guidance, later-stage is yield think market core how Or function bigger, the then And just companies? do is about rates? that we it Or Okay.

Yes.

mentioned decrease as as You're bit thinking later-stage related looking in core the had concluding, the about originations. forward. And guide I that's to it commentary, far And us John. those largely to way down the new we're causes what was larger, that right my deals as in a yield little

originations more anything And Okay. of, of it's what's kind activity, going new then prepayment it, prepayment. terms both would call deal fees. the in a and changing percentage or there cognizant in we be repayment guess Anything market? of then be there? about I which Is fees on as should

John. consistent, Pretty No.

So deal Quarter-to-quarter, that specific back-end based outcomes size do variety seeing have of is, the change. we a we're do off fees, have the what how not any transactions old the on the on is. pay back-end prepay, fee whether they of

higher, in instances. be or it can And so be much to some we guidance while could it the typically give of X% actually either X% acceleration, on the less

the So specific arrangements it's fully of the fully amortized. on nearly were whether age that what and depends really deal, deals the it or

we're difference and in arranging changes. So we're there's as place as new that agreements business, no trend that the putting that But the there. far fees on

Abraham UBS. Vilas question next of Our

me. for one Just

you're and that about you in? outlook can the further origination support that discussing just be strong a talk capacity Hercules might you any now, the doing thinking a little areas from just bit to investment about and ability call, Given technology on a right perspective people

Vilas. Thanks, Sure.

in we 'XX business. did in investments you XXXX, at look we in and what the significant If made

at levels to employee additions XX the of last added and made the full-time all we've is months. We some over XX team to the very course Throughout groups strategic, account the all intentional course of last the over of company. months, XXX. Our now investment up the

credit We office team. boosted have our back and

our our and finance our team operations improved have legal We team. We've to team. added

about growth or year head have extensive so. So pretty next ability we are count from we right where over the we some the perspective good and now fact feel very that support to the a

terms the times, balance sheet, In as is of sheet, we've positioned. the well balance mentioned several very

$XXX have platform. the liquidity million $XXX across nearly in liquidity nearly We the of BDC, million of

perspective. relative from to targets our perspective regulatory and We GAAP a are a under-levered historical from

very we're advantage positioned well growth. think we so to be take And able to of

the is sake we're in the just key comment quality of for putting and on assets has screens the I We're advantage of growth, the is the interest think take best business if long-term to growing that to the I'll and of growth going make shareholders not and interested think our in it's that meet that caveat our credit a do books. Every has we we stakeholders. deal to deal be it right?

Our Nolan. line the of Christopher question next from comes

gave caution Moody's Congratulations week, on quarter. to a Last downgraded outlook or the the direct really for lenders. good outlook

the any listed that specifically have all? direct to with not Moody's guys you conversations among did, related at ones was Hercules While this had

in the which all they our in work contact any we constant are with. indication concern have about that There's no rating We agencies with business.

guidance not trying shared us our be fact, just they In cautious know, you about the the performance competitors, The to as of the been has outlook. Chris, was sector, with stellar.

I So bit think us little them. that's as basically the with And stand have differently conversation a out that than they that we well.

guys Okay. been a tiered capital little they you the guys. the ecosystem bit And or stand venture from that related have because other expressing or do to outlook anything concerns market, apart any

what that. discuss but would view their I and that is on that Not they shared definitely with see with us, them

just in to idea use maturing facility Finally, XXXX. Is credit have debt refinance you to that? some the the

a to total. we facilities and credit Presently, look that well $XXX market $XXX below the a the the maturity. We'll million take closer million, plan. have bit capacity in the that is at of It's little that

the the make closer to assessment we'll So date.

question-and-answer remarks. the CEO session. turn back would now to Scott Chief to and Investment it Officer, I Bluestein, closing like for concludes That

And Thank you, to for operator. thanks joining call today. our everyone

Wells Conference final note, will Fargo the a XX May Chicago. we Investor participating on Services in be As in Financial

contact this Thanks, Wells look QX reporting are event, progress Fargo at with If on have our XXXX us earnings meeting please a great Michael our directly in Hara. interested We night. forward or to you and call.

for Thank you your does the today's participation conclude This in program. conference.

You may now disconnect.