Prospect Capital (PSEC) 7 Nov 182019 Q1 Earnings call transcript

Good day everyone and welcome to the Prospect Capital Corporation First Fiscal Quarter Earnings Release and Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Chairman and CEO, John Barry. Please go ahead.

William. you, Thank

the and on our are Eliasek, Grier Financial Joining Operating call Officer; President Chief Kristin? Dask, and our Officer. me today Kristin Chief Van

Corporation. the undertake Thanks, call due within intended the securities call property to Unauthorized the results to to statements use unless law. of that of contains John. Actual protection. forward-looking is is materially Prospect laws differ This meaning be Harbor We This statements could prohibited. do to Capital are our outcomes factors. update and not impact forward-looking required the those Safe of many forecast from by subject

For previously website, additional XX-Q, filed and our available release, on prospectstreet.com. Relations our disclosure, our earnings the press on presentation and our corporate Investor see tab

to call over I’ll the Now, turn John. back

Kristin. you, Thank

quarter, was dividend to due For up share, the year. quarter, exceeding by In NII $X.XX debt from from income our net was up the our September or XXXX $X.XX. million X.X% the $X.XX our investment September of and prior XX.X%, $XX.X income. quarter per higher equity or dividend XXXX share net current the prior $X.XX per ratio rate to NII increased

quarter down million quarter. was for $X.XX per or share, Our income net $X.XX the prior the from $XX.X

billion have distributions our to out all in share our in share plan We IPO announcing share to December $XX.XX We of nearly are consecutive our XX will $X.X announcing our November, shareholders monthly next to cash shareholders, per Since each on distribution distributions ago years for XXX shareholder distributions. distributions February. paid cumulative exceeding shareholder shareholders. original of current XXXX of $X.XX and representing series January, through count, we January at per

from in $X.XX September at the per $X.XX stood NAV quarter. Our prior up XXXX, share

rate assets from to interest Our as XX% floating increases. rate liabilities, comprised us rate of September and benefit positioning fixed earning balance XX.X% sheet XXXX,

other management from of a when have quarter, September particularly one-time for income focus Our recurring of million management of sold was income continuing the income we increased is greater shareholders to shareholders purchased and between XX.X% and Prospect’s percentage structuring controlled the and same decrease income the purchased other no investment total as amount a affiliates in a We on stock prior largest our significant management to never the dividend X.X% the investments to in shareholder and at fees. of as than Prospect XXXX purchase open there believe quarter NPRC Prospect. alignment while compared $XXX basis stock, quarterly in from management interest on combined a stock has in is basis over has share. single on Management cost from market.

business management interest dynamic provided investment cycles. team and has with and decades Our economic the for challenges by been opportunities both handling experience in rate

we’ve built productive is purchase turn believe have to call with is We environment time dry risk reduce current and we to future the us for time, utilizing Grier. and periods. when will powder it one the Thank substantial those assets, I the learned same to and At provide attractive now opportunities reach over more will you. the to reserved. yield, of the

Thanks, John.

credit over undrawn of Our and billion deliver solid business continues to performance. $X scale assets with

Prospect focus and private sponsored industry. investing strategy third-party covers investment continue and professionals, team online the representing market non-sponsor With deep lending, to of structured the real buyouts, groups experienced credit we middle sponsor on related consists in scale, XXX and and bench, diversified our estate operating lending. financial a Our approximately one credit, of experience direct largest yield equity longevity, that

select and our value risk-adjusted on diversity stood range a the disciplined to opportunities, basis. allows high quarter. portfolio, investments bottoms source deem attractive us at XX.X% opportunities manner from we controlled be then our a X.X% XXXX, This the most the to September a up of down fair of in volume broad As of at prior

of thousands invests disciplined of evaluates and typically team percentage opportunities opportunities. in a annually Our such a low manner single-digit in

the of the preference gives to the invest us Our and stack loans. non-bank with capital levels multiple in corporate lending senior flexibility for structure secured

As investments resulting of of portfolio quarter; the with September first secured down fair our from and straight annualized September adjusted unsecured collateral; X.X% XXXX, quarterly assets equity debt quarter value and secured our debt Prospect’s comprised underlying XX.X% fourth XXXX, benefiting increase. debt; structured XX.X% from up being approach X.X% And lien, XX.X% the generating attractive lien borrower with X.X% is the secured collateral. credit yields. first of underlying an X.X% in the yield from lien, pledge generates prior from XX% quarter; risk investments were XX.X% secured at our investments, that prior up of second XX.X% one as prior

can hold that as gains generate investments also We positions certain equity contributors or positions act in distributions. yield as such enhancers capital

and downside prioritize to our against and above senior approach. originations discipline while achieving continued selection protect to risk credit still yields differentiated origination through market debt with have secured a We

XXX two XXXX, $X.XX fair As from billion. held prior quarter, up of we a portfolio value of companies, a the September with

is continue with also a XX.X%. company diversified fashion portfolio in to across different industries, no significant invest concentration, the industry We many largest

assets prior Non-accruals September X.X%, energy of the as the XXXX, asset our X%. at the from percentage at industry down X.X% industry in quarter. stood stood retail at and of our in X.X% stood September, total a approximately As concentration in concentration

quarter net times straight prior decrease. second down Our EBITDA, weighted-average the stood X.XX leverage X.XX portfolio from quarterly and the at

self The for compared the from Our of the broadly EBITDA agented, have to market adjusted reward weighted to us September, at $XX.X and sole investor prior agented $XX.X loans. per recent self non-anchor average higher originated causing proactive perceived portfolio stood million of company be and middle In portfolio risk consists efforts. market, up we our quarter. largest segment in syndicated prioritize the years, sourcing opportunities, our originated anchor to million

deal proprietary September to flow drive continues Originations for initiative million. center our aggregated call in the $XXX business. differentiated Our quarter

and repayments resulting of million objectives, of net our $XX as validation originations million. preservation a a $XXX capital experienced exits, of on basis in rounded also We

multiple XX% REIT with high credit on sponsor cash exited debt businesses. of income this real has our rents, financing that strategy, our look arena attractive value-added and an largely recapitalizations in X% have business and renovation including investments alongside Hillcrest, To-date, with through NPRC property Matthews Park, redeploy originations acquisitions portfolio properties in an debt, buyouts. September we and as Gate, XX% Mission real Abbington, made stabilized private property Certain corporate our the St. attractive estate X% Vista, as REIT, Bexley, a focused new early the comprised from yield NPRC, private yield multifamily, investments, to completely. non-agented strong During credit, real estate Marin, X% rising relationships. acquisitions yields club including objective structured corporate in quarter, financing. validation Central occupancies, estate with is programs, agented into manager including our and benefited XX-plus-year increase returning repeat capital anchoring resulting Amberly growth a

recapitalizations expect both and continue. exits to We

collateral Our of working attractive yield, primary business delivered with opportunities. strong focusing stakes, issuance structured has and risk-adjusted teams, benefits credit providing on attractive cash management demonstrating through pursuing world-class underwriting the majority

underlying structured we of tranche. over loans comprised million credit billion. $XX a the X,XXX structured total of asset over September, across credit in nonrecourse As The and investments, XX portfolios held base $XXX subordinated primarily

XX.X%, trailing basis this points, credit points. of XX-month default XX.X% out structured down XX of prior broadly September, the portfolio yield and X cash annual September deals includes and cost down XXX short-term syndicated investment cash excluding from quarter less an Cash distributions from the generated subtracts In a X.X% rate from an basis. experienced with of As the quarter, basis compression yield portfolio of of yield than basis market recently basis default yield amortization GAAP quarter. GAAP points of points yield rate the reset our while all prior XXX a

in of credit structured to cash September, average totaling XXXX, portfolio original cash distributions September of XX% million around cumulative times. billion of XX As under $XXX of exited and our multiple with also over investment. IRR just XX.X% investments, our and X.XX $X.XX cash generated realized representing Through us, has we’ve an existing

credit tranche. cases, in minority entirely majority our portfolio hold positions Such where enjoy many positions subordinated rebates can majority-owned we structured same of receive fee Our holding position. we significant charge. to compared because consists the In of the benefits

the believe such to we majority future, call we value options transaction ability a control As in in our add and the holder, portfolio. substantial to our discretion sole

majority September debt terms, enhance for or value. exchange an period refinancings investor, remove and better since investors the We’ve resets XX completed on We in can have the might as liabilities a option temporarily than of waiting valuations years optimal in deal, be baskets bond fashion refinance to terms to loan investment We, extend in low. XXXX. asset and advantageous reset more when call transaction from rather the

XX Our yield months compression. in structured average has excluding equity portfolio yield XX.X% the short-term ended XXXX, us September reset recently cash credit paid deals with in

far in million, we So, $XX of a received million. of originations resulting repayments originations December $XX in basis XXXX and have booked net rounded $XX current of million the quarter, on in

comprised now and you. over structured XX% I’ll estate. agented have non-agented to originations X% XX% real debt, X% Our dept credit, Kristin. sponsor turn Thank call the

majority diversified substantial of on leverage, balance opportunities. toward sheet We demonstrate liquidity substantial and debt as capitalize well matched-book unsecured access fixed Thanks, to rate our as funding, unencumbered believe Grier. strengths, assets, to prudent both attractive weighting

majority XX of rise. years rate into in loans our float shareholders locked provide rates has potential with fixed significant the Company future, a Our a upside extending the interest as ladder to LIBOR while of liabilities,

many a the an our first. the and marketplace. issue of our approach we our bond, right-hand construction alike issue leader We in industry have balance the in thoughtful company convertible bond, and which sheet. acquire Shareholders side in of innovator first should notes towards are creditors taken another a other were BDC, a and program, appreciate develop lists institutional We to our differentiated industry, of unsecured

the funding The have revolver September drawn assets assets, billion points. XX held our our a XX% $X.X our to interest pledged banks an Capital of our of total completed plus XXX are accordion recently as one-month assets we approximately option. from by basis of extension with $XXX of $X.X million size feature portfolio. representing approximately currently amounts where on to rate billion commitments LIBOR As at we of Prospect X.X remaining years, XXXX, reducing unencumbered We

interest from distributions more unencumbered adding multiple benefiting by facility including additional of targeting including bonds, debt, and revolves and grade Prospect Capital continuing assets, allowed institutional to Outside baby until amortization bonds, to investment years bonds, lenders. with are We our types unsecured XXXX of convertible March followed our of be from at we’ve Corporation, us. recently notes. two issued The revolver commitments program

commitments, an investment rating from the unsecured enjoy to investment our We unsecured We’ve and multiple grade minus ladder BBB Egan-Jones, no cross years. occasions BBB have duration liability types from rating rating grade revolver. S&P. grade All now no Kroll, with maturities and market on our asset restrictions, investment and financial an of BBB these our an of no debt out term from debt tapped extend to XX defaults

Our With debt counterparty notes as of and debt risk over well debt XXXX. $XXX across tranches, as repurchased XXXX our maturities quarter, In we’ve our so many substantially many reduced million XXXX the million we July our September program years. extend notes. so banks the through investors of $XX

the should aggregating XXXX not $XXX have $X.X in and leverage course, issued we demonstrated calendar market our the notes repayment decrease now originations assurances. notes, million to our slow could including of million until unsecured with We we half and June through debt program separate need of believe exists come institutional our maturities the we billion, extending issuances first also ratio, XXXX. join allow and baby arise during seven continued of program ordinary weekly volatility. ATM We as $XX [ph] and bonds XXXX If to

with had XXXX. of XXXX, October $XXX September outstanding through notes of As staggered program maturities we million

over the John. Now, I’ll turn to call back

Thank We any now you, questions. can Kristin. answer

Instructions] begin questioner now will today’s Leslie [Operator James. first your we session. question. be Raymond will And Vandergrift And ahead the with you’re Please go question-and-answer

a REIT run healthy, Thank Valley million morning. sustainable? forward million for income much and going my taking from the from really was rate quarter that is private or is Hi. $XX of how Good Electric, $X.X this you that questions. Dividend

from know, company predictable you is operating dividends income, interest any less as than which contractually Leslie, stead. Well, are

these taking were I So, we Grier? not now, the enough thought it’s companies say less continue But unless them. be would predictable. we would healthy to dividends

nature well, for expectation those seen substantially and to us. of both that is NPRC, calendar on program backlog With substantial had well. but that’s operation number beyond IRRs growing of in basis, assets quarter. dividend for continue, the business. Sure. an quite that we performance our XXXX continue, NPRC. a if excess uptick that would we’ve as only obviously to the expect significant And in we’ll businesses, Valley that. not NPRC a And delivered promising the Valley for To currently given at in XXXX least have looking quarter of expect We is larger each current of and growing with quarter see as these of value to renovation distributions into XX%. success current on realized in added add We’ve

through outright in And new addition quarter early in that purchase that and an exact, we’re have to articulated, at current now, on those be we’re We are just towards purchasing optimizing case in mode the have the making a of X investments, XXXX. multiple the -- suspect and book. transaction under more two closed ones right always sale. way then, agreement in and with non-refundable deposits well another transactions beyond closing. I looking increasingly each And closing exiting in to

Although, as well. refinancing we’ve we have recast options examined deals and

we book the a not pipeline exits. and only with the originations. of with new the replenishing real also the At of time, performance but we’re those quite pleased historical So, are outlook estate same

I exits excess our cash well X we to and trailing that been multiples. are of XX-month almost basis, our times cash a think new identical on originations in have

they Thank specific is that or new lending, just right moving the few that of investors right any on And deal waiting it leverage worth there any now, now? right I industry word be where you. is the terms markets pricing, investments and guess are that’s a into would crazy industry for been, more have

seeing my And so we are see if be others. and some we whole give of can for our then to to, better that a thoughts redline secular there technology-related John hill that try certain a very competitive the be that opportunities there are perfection. that for and there analysis down it. we to get online and were in and we’re structure Grocery companies towards drivers. oversupply not to is capital analysis, that, often are in retailers on to said those of going tops with book significant as lot levered have But, out of quite to those one analysis I’ll levered commerce retail And matter company would to and analysis the zero pass industries word, are certain we that that’s difficult trend industry because Having today. do add versus Well, also But, priced well. every area margin it. the not industries challenged tend another lack a

that. by it’s generic into So, to really that anything individual analysis a difficult John, to that? add to credit credit answer you’d give comes It’s play.

gambling. I guess, chain, own your I Right? supply bet, of Leslie, list you have restaurants, auto

those. would Yes. of three I agree at on least

they -- that a well, taker in in all chain, in loan, company’s Right. mainly manufactured inputs all, came and of the Grier price on component. supply price company taker company it And the company commodities, this -- I middle shouldn’t so some were a auto people significant the But, when around rubber they -- on price might is to Hotels, was the to well, the in somebody which turned end products a virtually a and it. sell discovered too. not I ago are came years of takers. name three, big or would the being that remember remember the appreciate supply was came the quite company, company -- for

wasn’t easy one that to So, an avoid.

our restructured. that saw and what it into competitors One of was I transaction, went was

our noticed experience industries? we happens? bear as certain fashion we areas those we redline risk, where risk, might those what invest. No. whether Do price call, consider We there’s hard see I in in sectors And risk. we’ve we would So, mind what volume historically

industry it’s demand a fixed so, stringent coverage, we much what we And more each proper think say and Grier, and charge in to others. just I every -- as multiples, result, do lower the in a covenants we to investments. think higher it’s -- rather do industries may than is we much make bring lens some I is much, different industry

we when we over ability get restaurants, helpful? that that that are the quick but interest friend are any So, low enabled we years do who other obligations may do to able we earnings amortization. have same One at lenders cases of be us multiples would reason company, to make that And to fixed loans to best unavailable tricky. things industries lease consider to obviously, that’s of example, looking are in that debt many also of bring those one the other plus we want industries. quick amortization. is for do we things the people expertise Is the may Lender’s we in want Right? be don’t rates why restaurant

you. helpful. That’s very appreciate And Thank this taking questions morning. my I you

you. are Thank We delighted.

with questioner be today Please And Securities go next Chris our Corporation. National will Testa ahead.

to dividend Leslie what wanted about just just I bit on income. touch a was little asking the

the So, sold the much NPRC, of properties curious, the I’m $XX was dividend million just those three of gain you on relative guys to properties. how three combined?

I’ll give to that Grier.

total The was basis cost of $XX three proceeds million. $XX our million, properties,

ones are and other are talking undistributed $XX deals our as gains three before about million behind we mentioned gain. well and as Chris, off process that in have of of I you actually building prior But, closing So, that. the we’ve up then even that, then been further

markets exits. a So, since perfect we book it on M&A and deals backlog But, forward as here a can well backlog say a course -- well for as of about the pretty these because are on don’t XX to we’ve got basis. is properties, conveyor belt change I here have good want related going

feel occurred the depend it’s beyond calendar contract, will going year under I additional the period And after sustaining already is going good optimization individual units, and what’s to exit as premium that and benefits some a of time about and we for we through running And likely up Generally, of optimization properties buyers areas upgrades that to right through future already after XXXX, the what’s magnitude lot be out And of teeing time an those will that five on process -- by so common the mentioned. exits sell beyond then, with we’ve whole properties. it’s we’re to contract. or for years, a nothing pretty which we completing entirety now of say the incremental pay three exit. to underwrote improved substantially a to under

to were are quarter, are the in properties clear, replenished three buy be under to gain just the -- And basically going the these paid dividend properties current to they contract be another you out? with minus

a have point. with we're We’re We’ve quite think a properties booked while. for that banking already top -- articulated. close at three XX been contract in on to We’ve exited But, properties, selling another this gains we the ones -- of just it’s gains. I

So, that another beyond. add three further then, to and

Some sold have our today, have already properties and are should We just amend it, three then to one example, -- under Amberly since Actually others. we of sold we which course larger I was for that larger X/XX than of properties. one that’s contracts.

So, historical not actually results. that’s It’s the in properties exit since quarter. four reflected

that at the most you’re look NPRC dividends So, of coming that? are in ‘XX for on to about kind sale. and from level, through at least a current talking quarter continue beginning when the maybe PSEC gains Is way of the upto those potentially of more

XXXX… we is throughout not XXXX entirety the beginning, towards, of what End of guided end,

Okay.

opportunities it. being seller? are you markets the of as ‘XX, this, a are to to are -- maybe putting going are money opinion you the just assets of net less for lot kind these and where Are them to the replenish all your of you as looking getting are at seeing of And you quickly gains in are as those? a there got work guys as not frothy you selling or through sort So, as Grier, you

our corporate just lower fragmented do. budgets up to boom after style, it’s Chris. market to same various deals. when We the If how business kind fact, deals, predetermined we’ll on the the so to exits probably buying anything to -- highly, we’ll were happened don’t secular about market. It purchase. And credit markets is of it money you much B, added that garden more be you’ll a in we have It’s Class The we And to middle don’t the of coincidental corporate to see highly side. a U.S. tell, across all on the sense corporate have Probably, our equal hard of do don’t no have lending. shift of adjacent came multifamily have healthy deal else. economically, if it newer we makes the than side in think

the classes, many You money to credit cyclical hitting still double years. but almost corporate have us go in the few a every that the space shift, secular we not and the a for that lot normal asset others flows whammy that see concerning of

up those So, why folks where our deals, there distance of cycle out to property and things, the capabilities many goals. one there wide teams, still There that exit, a built is certain is there. a lot about a and partnership, strategic it’s of market will deals, someone them. range to after reasons it’s property life of needs all of a sorts it’s REIT lot of -- very monetize. on needs is a with good feel nice full operational of there management is fixed basis a it’s to the operating history ending, It’s of going off deals lot we’ve We and meet of non-auction roster also need

most stay during it expensive in of resilience makes resilience homes what’s rates yes, We monthly like financing for up. for a cycle. they go more We rent. also estate costs continue to aren’t it on repeat rate But, probably asset with ticket people recession also basis go real the up, resilient by the is numbers teams. when last like because the and repeat interest teams the new and paid can apartments. We in basis class purchase management This horizontally to in add business big on of management Class with then, B. multifamily, These terms vertically

lots for total great yield and a So lots that pluses a this makes on a this is great basis. us, fit return of fit and a

to foreseeable going deploy to class. continue So, for we’re to this the capital asset

it. Got

Chris, thing on real add we what are of this. honing to We questions. appreciate Much -- see I can arena just your our the great estate a in from greatly really buys lower some rate and properties hopefully but of up, cap you intention edges will rates. the benefiting with interest the fixing property around and working the holding these doing in because from declining competition if the refurbishment, some

wouldn’t forward, Of that on counting be near-term. trophy And in course, I on demand going enhanced in counting the markets.

that. a So, see quite we bit of

As Ramsey I significant plan in buy managed a every before single, and that know we when every don’t been value-add believe believe upgrade, usually capital to we’ve try and done but you’ve noticed has expenditure Hopkins and Ted undiscovered invest We with not Peter the other and so market I the discerned, well then, C, purchase, properties made every in maybe -- B to people have B do markets. I Ackerman. we that, almost C to and by those Scott or single, single you and When our Dan property. Fowler get

changing signs start away. and on. to landscaping stoves and of or see up roll get will so Not and is competed readily We’re his there have niche. our a has what don’t fragmented that the changing and plumbing refrigerators and upgrading well. I And adding group and or we believe would market, and willingness this everybody of her call that nature be to in sleeves We proclivity as to we because niche one

dividends. see based estate now, hold very I adds two one value had operations. to see maybe I who’ve half of one you strategy performance, against estate people there [ph] that the it get their pays might in XXXXs, numbers where expect takes I’m group. been this what premium company, estate investing And even were younger. or won’t one they market, on doing strategy. experience on is estate proud go I the industries add and those it one our in So, of real hope the a our I will could at real that benchmark since significant return, outperformed as from our for using in can me is value-add they and the And this when their call that bassinets Real what when real competition people

just quick add we things Two quarter-end, $XX since million. of generated sold Amberly over that to proceeds Chris, to that.

Our that. was cost about half basis

one million adds that or another to of -- next the additional $XX I alone it’s before you gains, pending So, is that think so that’s three get and deals.

the a the more capital, little than There bit new last is The in talked talked southeast, in general of years Atlantic. Mid We’ve Midwest Florida, substantial We the to other going we five ago. two whether I a of a on as our this piece, Texas, about in competition moved things back general, a frothy. get buying In originations Carolinas, lot the call think and about our lot Sunbelt there was you well. few ago. deploying years did amount to

likely from County secret worst about is Crystal are we purchased far in actually to property guess there. operations a multiple actually only recently have which just We George’s I And is Prince Amazon’s put in the that substantial happy, a that drive Maryland, quite we kept bought not XX-minute too City, from properties there.

we’ve in book to corporate like It’s been continue ratio, a credit a exploit of business had areas, and just hit rate So, we’ll those look low -- to Chris. good it. success single-digit

just And as to InterDent on wanted well. touch

know the was pushed due. interest. the quarter. or August Prior then you control accruing position from as of that, I had maturity currently I you’re out to December this for through past of So, guys it assumed know ’XX, X/XX/XX was defined

And taking since any as were have company? due? defined this control accruing to you So, made past control, down guys changes guys if you just interest was when the what, are you

Sure.

some as high is are shareholder, that needed And We very returning controlling investments mentioned. to there projects, we be made. the see pent-up now you what

example, and things, the digitization on modernization of For investments. X-ray returning side very high

Chris. redeploying we and for returns longer to medium higher term pick generate certain decided the into a decided So, business capital result, us tranches would that to as

that’s rational think there. rational decision-making outcome a I process So, and

We services company optimization, digitization are we off very the the team and basis giant headed. a have at think some modernization by space credit. not when leap we one these capital deploying to And location highly And individual breathe members an and cautiously that the are should where location equipment take on with and nature. got that live is of by its dental obviously we’re that we pay multiple where about we look are recurring X-ray for at investments like. But, a optimistic and

when taking as -- defined control, due prior well. to was that Understood. past this period as This during time accruing was this interest was your

It was.

I’m thinking… just

be rule to record we as -- put helpful interest. cash that income. things first the cash non-accrual that. The you applies rule that paid we when on we the is when interest, that We is rule get don’t get Chris, understand on

all we are But account, issue. is So, point we’ve of we no bank cash collectability. that income our the in stream, looking cash interest longer of recorded type deferred When some PIK at as at interest the receive. collectability or get look -- interest once at any we that the we

the with cash that I recognized speaking respect InterDent of I’m we’ve to interest. on XXX% not believe So, a term

contractually a So, interest of the XXX% in the rates was given the you cash coming what on loans? owed was to

we what payments -- cash we income. -- all the as recognized when we recognized, did we not Well, so, interest of made

as were look less contractually it in that. you was coming No, of pay correct because enquiring past payments the in Is cash a defined obligated what just than at understand were to full. they that InterDent? whether -- I to due I’m way so

and… Well, more tranche there than is one there

bit. a [indiscernible] went it you to Hey, John, to -- owners past immediately, we me it’s just work Chris, out key let you little simply got maturity,

understand. I

Okay…

So, went Grier, and for maturity the cash the interest the though I’m without I the even are came Y, was was loan paying sponsor occur past what Chris -- happen believe I the happen, to cash -- in was to correct Chris, happened all what hoping interest loan in I and -- believe, made maturity. But those payments were maturity payments was, saying, Z loan full. to recognized, loan believe the allow and it -- X,

a on on so your get just handle I that. And... that. sense. detail a appreciate make It’s of That to Okay. lot wanted moving just parts,

the would was we proper how constructive was And company way company. this, that our debt, the make it a appreciative what to in when great acted put that. and sell unable the -- refinance, felt again. job appreciated was we And the we to were that I sponsor And company repay a

Right.

par at quarter? the if value quarter. looking could on Was color the wondering, the or cash during during reset of Just activity refinancing the significantly quarter. CLO, what of yields on a due we down the you to were that And the lot pretty refied reset the provide some and just equity

quarter out deals, help -- June it September lot that, with comparing because more think And was nine only moving me Chris, record resets with because December Let a you really it for actually when there to much was significant have two reset a in is I deals. of were parts. muted -- quarter we June.

yield there capital than to on some more around So, nature because look from return moves the we return of that reset. at occurs of top why but capital the had a asset Because from encourage of GAAP you also -- on cash class that’s cash get short-term yield. a really is not only volatility folks elevated somewhat

in different people -- it do especially ways. So,

the yield. the for rather example, cheap so resource cause so For at tests most deals sometimes if cash potentially, a excess rather well. and required, we resets big that June use resets to than flash and if also paid deal we get for distribution to bankers typically a capital in basically are lawyers performed have where investing do you there in it, par like value tranche. capital called and that’s there is zero, that but extremely -- a if pay C two And what we is there’s note a certain called spike cash quarter when and time have happened financing any to years. over more But amortizes requires It X collateral

temporary it cash depresses you yield. IRR to the that So, because enhancer. But great got note, amortize

So, both quarters. in two directions moving parts across and the

You the last only two quarter, asked deals. about reset we

basically a probably this really or of no so, to a were was which From high we don’t think $XX more a GAAP Comparing $XX function corrects lot offset yield flat, deals. about which having spread, I quarter have reasonably it. XX three continued a of quarter take, and par is for march $XX down perspective, to we million December, two stuff, and it quarter, reset to only current resets compression bps from So, than give there asset value, the there. its million million or already

of take Chris, get of nine equally to six, our that. see in ahead I queue, the we which total, And nine know pace. see hit or all would will already in another objective. don’t June. done, these we we us the not, pace if we’re That’s we So, have our let’s September

what’s transaction, the be our to we going to with a liabilities on cost deal. it’s modeling, and always, going printing on are our a print a the sake in of As and going for on not dependent complex analyses factors of deal of lot

that to are at We look for resets rate. we least it’s NPV discount so do if a accretive only positive going XX% generally

these the triple-digit So, these for you resets. the to bit if look more it’s have little bit on know little little a ultimate a side. an confusing a I will. helps Those But at deals GAAP the that’s folks are encourage side that no-brainers, in cases, for bit. reason. We many hopefully imputed cash IRR that

to conclude the will this to over session. Barry would John remarks. our I any And now conference like closing back question-and-answer for turn

is Okay. Well, that I going interested. closing to don’t I think remarks, couple of be have but a anyone hours

everybody days Bye call to for to all. XX now. now. like forward Thank our thank would I and from you So, look reconnecting joining

Bye. all. Thanks,

conference has Thank The today’s concluded. you attending now presentation. for

may lines. disconnect your You now