BlackRock TCP Capital (TCPC) 4 May 232023 Q1 Earnings call transcript

Welcome, everyone, to BlackRock TCP Capital Corp.'s First Quarter 2023 Earnings Conference Call. Today's conference call is being recorded for replay purposes.

During the presentation, all participants will be in a listen-only mode. A question-and-answer session will follow the Company's formal remarks. [Operator instructions]

like of the BlackRock would Katie over I Director McGlynn, TCP now, to call turn to And Capital Corp. team. Relations Investor Katie, proceed. please

you, Thank Tia.

contain of at the I'll conference of such the Before that are time and forward-looking not and may guarantees estimates management begin, on performance. statements of we assumptions statements based future note call this

statements those projected. from involve differ could materially risks Forward-looking and results uncertainties and actual

to made Any forward-looking as are change statements without are and call notice. made of subject on today, this

been have we may from presented of and discussed information been information. Accordingly, certain and sources verified. warranty such not make derived has to Additionally, third-party representation with independently respect no

Earlier today, for first we quarter release the ended March XXXX. our issued XX, earnings

presentation, please presentation Events on posted XX-Q supplemental earnings be which was which our click also earlier the will slide a with conjunction to today's SEC These Form Investor Presentations. refer reviewed select on to today. and at in Relations link with the www.tcpcapital.com. the call, website should We documents we and To the filed view Company's

turn the Chairman CEO, our and call to over Vig. now Raj will I

thank environment you overview our and with I first few for results. call joining the begin for XXXX an earnings Katie, Thanks call. TCPC’s first will from comments a and today’s us provide market quarter all quarter of

to I’ll our portfolio on update President then activity. Phil and the will call provide an our Tseng, and turn over Chief who Operating Officer, investment

well financial before greater as remarks with our Our your few detail. conclude review then as capital take CFO, will a and we Erik will Cuellar, position questions. I results our liquidity in then closing

board in were indices market down XXXX. observed the across all you As generally

credit the in during held stability weakness the resiliency assets environments. generally demonstrating class well, even However, up the with market market asset the of and further different year, broader private

notable emerge the with of as crystallized. the most understandably Market now banking several struggles During that shook year, investor failures recoveries part classes entered their drove respective saw performances. confidence volatility in we QX bank by latter today we the asset continues part stabilized XXXX and from across the of XXXX, early but sector, that

weakness is ever the Notwithstanding, to who sector for most from we it numbers to years companies implications, hardly economic the broader a is XX in social of alternatives look greater even new our traditional and benefited market dynamic a to banking Rather, dynamic have financing. for lending turmoil middle continue forms nearly establish participants. and to of private in market

the we to further say will ourselves. therefore make less it the While likely for current when middle such the banking sector well-positioned banks resolved, less fully credit and reaction private be early for it's events even efficient recent not accelerate and too believe lenders the opportunity lend situation market, will in as the if to to to support, economic

that sector remain dislocation. banks that of needed been with direct to solutions and the periods to BlackRock. facilitates several a market swift when In have concern quickly lender with financing of or collapse borrowers working of up borrowers available reminder long-term addition, Direct has a the can locked ongoing of act lenders the permanent during stable and capital like benefits

had companies firsthand it this companies team the that COVID, during this Valley had liquidity bank to with provide was the liquidity, quarter had recently We the spread When position difficulty challenges started required. the have in the many seen to our accessing about news these have again, Bank. few and times, their been and early short-term more days we of past that Silicon deposits including portfolio with cash

to provide. to Fortunately, act these that the in but reminders the can value credit private their borrowers and further needed, deposits backstop was or ability -- with manage work and managers Fed ultimately quickly to of stepped capital not our directly our

delivered income strong We Now I'd of in first quarter per share $X.XX like to net turn the first investment highlights. to quarter. our

rates rate our a in as a rate history among benefit the our public that income investment net investments, the base company. from as resulting higher NII continues to TCPC's Given in portfolio, is wider nature run spreads highest well as floating of on new

power In an primarily recognition of of to Directors the share of our per quarterly $X.XX rate higher dividend the environment, ongoing the today of distribution. earnings TCPC, Board announced provide increase to

per XXth. XXth June payable The record second June share on quarter dividend shareholders on of of $X.XX be to will

to investment our net reminder, accounting with to through our on would've and a second always disciplined important ratio emphasis and recurring taken the history, net quarter our coverage As quarter, been we dividend regard given approximately stability have recurring the for investment us a strong approach board remains dividend covered coverage consistently first Throughout TCPC's increase our has with dividend income. declared This even XXX%. commitment dividends the for our income.

selectively friendly capital investment we percentage Phil during summary, being new environment, of also in deployed will first discuss in substantial of a those are our and taking capital number the lender of quarter uncertain small We've reviewed investment advantage transactions and quarter detail, in a but more while activity more this in disciplined the environment. deploying opportunities.

private Given benefits deal of volumes, the are we of reminded our sourcing. to channel approach the slowdown equity deal agnostic in

opportunities and attractive industry to Our continue healthy, the given pipeline relationships find environment. and teams participants, with our direct remains in current other management we

to the quarter, of just credit in public as value, as of TCPC's among non-accrual lowest our quality a levels companies X.X% of history at fair end just two investments remains totaling total with the of on the portfolio the company. loans non-accrual Finally, solid portfolio first

and status. are successfully restructured AutoAlert, which QX, on in QX on was non-accrual approval year, placed loans now back last of our was in

to had AutoAlert's the encouraged abetting, onset facing the it that that the post be of pandemic the we macro some of the headwinds still have appear been Company relative early, and been completed and year-to-date appears since restructuring. performance While by

return total our X.X%. historical our public generated end and opportunities as cash of return at attractive consistently believe identify and since yields assets company, high we annualized cycles. have this annualized a at back a invested XXXX, Looking performance XX.X% peer the We to on and a market ability at our shareholders premium to exceptional remains returns performance of deliver reflects group our across

Now, I'll turn our positioning. discuss and portfolio Phil to over it investment to activity

Raj. start move and our the first Thank a then with during existing comments to portfolio quarter. activity on our I'll few investment highlight on

strong continue portfolio credit management to and We procedures existing monitoring emphasize for our companies. portfolio

view and the and the investment. As team deal be can due a it life during across advantage the exit. that the reminder, verticals diligence as private investment throughout the as industry of deep process investment sourcing are monitoring knowledge ensures until members equity-like the for specialize structuring relationships our during process opportunities, and them those then and We responsible an underwriting developed sourcing leveraged this and opportunities,

and are projected relative Our with assumptions. dialogue investment engaged to both assess teams continuously to original operators underwriting and performance in owners our current

process team more In quarterly, review This frequent protected. a loans basis. management company identify if may ensure on in deal addition, with investments performance portfolio with to members committee engagement well that require not remain members proactively investment senior the helps our of more

or the environment, slower are working costs and general uncertainty the navigate input to Given growth revenue few higher and with companies in hiring them a pressure. help economy, we

in our completed good report to process we However, remains the quarterly pleased generally portfolio that recently and shape. are review

positive that a to our make to companies are and given business their companies market, In fact, with portfolio flow on companies EBITDA the We across cash of emphasis despite positioned resilient majority companies facing with is underlying to our the established TCPC's have growth. the underwriting a reason these in exist portfolio pressure report models believe many margin more difficult macro customers well environments. core to continue through

were At secured our and minimizing our senior a $X.X quarter end, portfolio wide debt, approximately of a across spread market fair concentration industries, range portfolio of investments value had of risk. providing billion, XX% diversity

end of all emphasize The time and investments in portfolio companies company cyclical investment for our quarter was We average continue high consists an XXX less also million. to $XX.X portfolio TCPC industries. in companies,

the of As across distributed on the chart income is income one portfolio recurring any is our our company. broadly on presentation relied illustrates slide not and from six

In protection, our our of environment. and investments XX% contribute less first to in rate companies recurring floating this course debt XX% are of lien, X% investments higher our our providing important portfolio than each fact, XX% benefit, than downside substantial an income. more of debt are of rate

our advantage, we are to particularly a a when slowdown backed activity. our deal activity, important approach traditional time channel seeing agnostic Moving at us provides sponsor in source an investment on

Our of range industry wide management and focused including deal sources, a from teams identify through unique continue investment opportunities directly contacts industry to teams.

covenant which sponsor collateral we deal lender meaningful terms protection. This transactions packages. we In conditions is in reviewing to experience These of as us to leverage substantial negotiating a relationships. enables these our in and addition downside decades believe provide our include of emphasize traditional influence, are we tailored that opportunities, positioned two and where

first assess in senior loans. to which In the borrowers the of credit more modest addition, terms primarily industry when documentation. risk market and and mitigate our the the loans specialization, two bolsters ability to underwriting in quarter. million in our negotiating value pace invested Deployment effectively activity, in quarter truly in companies, our TCPC new secured existing Despite and our eight included $XX

the an Following TCPC's of investment opportunity source investments XX deployed first continue existing XX% us, for accounting months. holdings last during in dollars of be important largest the to over for total U.S. Choice dinner the quarter attractions was diverse acquisition a and and support unitranche Investments. entertainment operates to Choice family World Southern of World live portfolio investment the of owns a across

it tourism Smoky regional operates Pigeon the the Forge, Dolly strategically Smoky Park, Parton's market is from -- Stampede. National in located national Company visited most the destinations, Great benefits the Dollywood, is Mountains park The National tourists country. which Tennessee which the in stable This including but also visiting in Great

low part attractive Company's base due including as during flow years, the growth the free XX an opportunity this its in and great view cash over strong cost crisis, generation. performance to the financial We past stable investment and given steady fixed demonstrated

year as each leading has attendance minimal World which growth, with XX Over direct in established consistently competition plus its have core them option and markets. delivered entertainment history of they Choice's, revenue high the

in XXXX investment to the Our the management first support Binder in a Founded leading Binder. digital quarter asset of second a largest is lien acquisition vendor. was loan

a viewed commerce. tailwinds and to products for from it’s that We this benefit strong positioned lend marketing well as opportunity investment and to enable product an to sales, premium

loan strong and We cash base. and significant diverse our also given as view customer well Binder’s visibility flows covered, on

rates to XX.X% quarter wider during the yield first base portfolio total offset effective debt XX.X% average $XX weighted higher compared dispositions a one reflecting with Investments positions. in spreads portfolio XX.X%, the exceeding had year of our the in were weighted increased by yield overall exited benefit and million. the The X.X% effective quarter investments. of ago, on on investments new New companies on new of yield

in improvements this to more terms pullback by ago. environment are first environment quarter, the in bank's both turmoil XX continuing to lender and exacerbated further bank from pricing ability Given friendly just months lend investment regional and with a we benefit in the to relative

quarter investing their end, pickup also we have capital. increases environment. not seen inflationary pricing the underwrite while to have being cost that been and discipline, do power costs, to in input It's significant companies selectively, higher Post maintaining to of We pass we have emphasize underwriting note modest a in of important on activity including mindful that perfection. our

to higher companies including environment, seek impairing sufficient We buffers to micro ability changes build can ensure to withstand our their costs loan. in without service in the

income portfolio. Our second our pipeline limited pipeline our quarter. in healthy prepayment had current the in we on the line have To-date, and are investments yields remains with generally in

and financial liquidity Erik capital now me as it positioning. turn our well walk to through over results Let our to as

Thank you, Phil.

income by investment benefited and XXXX, As $X.XX year. the in three base share the last is March in of Raj first Today, share per quarter increase of quarter second dividend net a last declared quarters. was of investment $X.XX increase our quarter second dividend since over an per the first quarter XX% XX%. the the of income our dividend. $X.XX versus exceeded share, per dividend Net first noted, and we rate of from of quarter $X.XX first increase up This the

recurring of first remain have and last income Investment We $X.XX, cash quarter income pick by over and done $X.XX, the was was a dividend less income sustainable we investment amortization X% investment the committed to of income. net income included discount consistently covered years. Notably, $X.XX as only fee that This is interest fully of share. per recurring XX paying a of than pick total $X.XX. for

income, premiums dividend OID of prepayment from included penny other and also income $X.XX a and income, Investment fees. penny and exit accelerated of a

an the of reminder, a at As the than time all of economics upfront investment recognizing amortized we life over investment made. is the it rather

million Incentive from Operating investment fees for of $XX.X $X.XX Net or expenses first $X.XX for totaled $X.XX included million share. realized share, were per other per of and the in quarter the reorganization or interest quarter resulting quarter per primarily share $X.X losses per the debt $X.XX AutoAlert. in and the were expenses share. our

months the stronger by over the back net had on given AutoAlert However, and restructuring, appreciation status. now capital performance a the accrual quarter investment last the our few during improved AutoAlert the in and structure after is

Net from for loss loss primarily unrealized offset a million $X.X the totaled$XX $X.XX investment gains partially losses in per our on the of by XX.X million first million million reflecting Astra and acquisition quarter at unrealized previously $X.X reorganization, unrealized recognized reversal AutoAlert in unrealized Aventiv. a in share,

in for million $XX.X per was or increase asset share. quarter The the that net $X.XX

by investments third-party every all We sources. have substantially a independent using are subs process of our and robust prices valuation valued provided quarter

disposition subject to of at valuation. the every X.X% against companies end two cost. value oversight, representing These overall our were include independent X.X% remains valuation of the credit quality strong. back and A only of and portfolio total portfolio non-accrual quarter services, our of also and quotation first of of is The a testing rigorous including process services for portfolio the this

X% only of to $XXX end we our portfolio relative to liquidity billion. $XX revolver available and quarter and $XX of approximately cash total the turning total of remains companies million commitments investments Unfunded which included of our $X.X very million end million. of to at $XXX investments liquidity, commitments. equals balance quarter million loan This Now sheet total leverage strong $XXX our for of were positioning million with

low two with stable Our program. diverse an includes no month, a investment SBA program TCPC's facilities, reaffirmed credit unsecured two Fitch leverage and cost issuances, flexible grade and Last rating outlook.

debt unsecured rated be to by and continues Our grade investment both Fitch Moody's.

of and our overly of each any we maturities modest are the well financing issuances, laddered. remain our not of on single size debt Given reliant source

outstanding of any our financing with X.XX%. increased compares rate the XXXX. rates months, XX% is of current unsecured combined. while comfortable end period. secured sources. needs points XX at X.XX% and media from last weighted rate our do basis borrowing we're that our financing having have average the modestly with interest result increase to of The That Additionally, during and of only borrowing mix not on XX is an points of increase fixed the over approximately XXX This over This base

to I'll turn Now, a call over back Raj.

Thanks, Eric.

for many XX, shareholders will prior our Meeting Shareholder held to be on in on and flexibility. our our over shareholder our at with attend. shares we all up to XX below to have purpose next below in invited proposal and of issue Annual of our peers, price to approval of NAV The provide reminder, virtually with May years our proposed a date the proxy As value. asset given are included of BDC the common issuance in Consistent net line any months XX% proxy a is a

equivalent NAV point, is equity an the public. of To certainly be we've below shareholders This accretive we to and policy, issue which year since our our intend have clear, been unless every this at to not approved it is not shareholders. do insurance

outlook persists, uncertain has Even strategy different our grows volatility we increasingly strong adjusted confident in economic risk economic investing and proven as approach shareholders environments. our for market delivered returns and that are throughout to the

also believe cycles, demonstrated our of economic enabling and makes to further the attract We consistent and TCPC reliable investment partner contraction. in we This borrowers for us a shareholders credit deliver growth to to our have execute appealing ability for periods opportunities. both a helps throughout us

call with open discussions, And please operator, questions. for that the

Please proceed. with [Operator first Robert question Instructions] Dodd from Raymond Our comes James.

equity lot, you the put structured, Was go it and wrote it? Hi Company us how was to quarter, aggressive well, the effectively too then can you obviously how up can So restructured since I any immediately think, give the up? wrote if to right? guys. you order, can off it a converted equity do restructuring was On, and it restructured? was in I it So marked the on repositioned thoughts

question. hear you’re that for saying try Thanks a add color. what little to no, I'll Yes, I

a impact autos that indications issues, business I is fairly supply hope good we to side of restructuring good demand for that to and an the short answer was and particular. used cars a had chain This from COVID timing. may was think tied in be the out coming prove early robust

it essentially to value help differentiate and create able dealers demand when in And in proposition that more resulted that's its they being mitigate where themselves valuable.

As we by a good came a challenged -- so was but into this it business, environment. sheet really coming factors balance

different inventory more about the went supply think And the showing chain business that improved become abated, we where, as trends and of environment again. -- there's are and in that where kind The two box. for the this out issues on helps ironically, business The the relevant them it, in dealerships directions. environment more restructuring, of

sheet, part to the And similarly, a that fix. able balance to we be was that were of something a was, solution challenge

So it I know that don't aggressive. was too

tell will when, working a we favor. think owners avoid was Company it and to do its you solution. aggressive, something doing it well to that say that in mean time try by think the timed was I in unless that I with you our when and conjunction finding

the nature other, benefit the large a of processes do think of of lenders of or being doing highlight more one few in scale efficiently this and can after a just place types I this number of efficient restructuring can, the one one, you're quick when restructuring. you of were does relatively much you than

running hopefully factors in highest demand and to to the liquidity give as favor. what think, structure its is those factors achieve and do economic and back able I its room we're But business the that moving the are capital especially value,

one. other got mean, color, for it. you Thank the it, additional Got I just that

core the at the just end? back partial or back the approval on now. for status full a quarter, on quarter it's So it Was

end. It was right quarter at

income from AutoAlert. no QX recognized So, there during was

other based on quality, you. the one prepared companies of EBITDA. you remarks, positive And it. then just credit on Got Thank have the Phil's said to majority

revenue one you but So presumably, the some basis. mentioned which recurring that thing, cash don't, flow we're obviously is business, on a underwritten

can that of for we portfolio, new? is rest Was out is in guess So decline give you businesses that Anything of for Is -- whatever the any or be proportional real I watching should issues? question. that that EBITDA Is us for the macro idiosyncratic the that a new? result is expected? color a

Robert. thanks, Yes,

thesis course of would by And quite I portfolio, it majority very and So, growth. meaningful the been our trying that, inflationary businesses in been some There majority meaningful. to a of EBITDA which flow been say have doing. are explicit right, the you're environment have and was cash seen the our it's fed's has slow growth what loans about the impacted fed's

And EBITDA vast so, companies are not just seeing the all growth majority.

So are just hit loans cases sequentially margin down. because where feel flow in we error these or at or we're some cash areas of situations list. aren't We some they're these like or watch point? this seeing flat concerned Most for terribly we year-over-year concerned and either have or in EBITDA sufficient a

Christopher next with proceed. Please Ladenburg question comes from Doman. Nolan Our

you had in entered of or terms of in change change terms? Have your banks with discussions providing facilities haircuts guys your any

No, we haven't needed they to that. and neither regarding those approached have

context, some for was TCPC Just public, the leverage has facilities doing over two decades. loans before for and business even our been

cetera. type we of try the to So I think right about flexibility, structures, think et

the So, banking there we're have to-date. of been but no the wrong on discussions not discussions, side

loans? in adding terms consideration credit additional of Any

structure of we in I terms we where today. the are think, comfortable capital are

about sort think always thinking providers of the structure. for conversation and diversifying capital with additional I in flexibility we're various

and I banks feel there'll and that sense. cover if be just today emphasize we But work that So appreciative financing with consideration well the good the point are always we of partners. of very very makes being when would

to to One have of at perhaps facilities. both look thing is line-up facilities. always do other continue add And banks the the we we do within according the

a that's thing do. regular so And we

and be that One off insurance the parent sort lines? it's things cutting that's the just policy last saying in basically the stop lines worst of banks was And BlackRock happen, or credit your able would going as but banks not the I'm an of the started happening the of if occurred to banking crisis off worst cut came back to credit. that

I other even is a when say but dropped very that BlackRock. marks liquid you one much the credit I prior asset would private for the think crises, just answer credit I even and held assets will or the not not to here, question thing I that's through my I job mean, would BDC say well. that I classes. go like historically up have NAV have as as back

permanent to think a I there's the the benefit capital and lockup structure nature.

allows a take a way the to keep to actions. and that underwrite benefit protective There's healthy good, a portfolio we us

think capital. have that our and to lenders seen see ability our I protect historically their

won't even And I -- needed while side question we say same the the it hasn't the answer I or that will of same hope the wouldn't we of So, type wasn't the forward. historically have way can crises, that business the encouragement BlackRock on it, kind conduct and worst needed. take of it going been for protections

Our proceed. with comes Ryan KBW. next question Please from Lynch

deal I one today. had, opportunity know I really environment First the is strong

out yet? manage there, the and avail a any bit, this there some balance limited look guys leverage level loans to based of where getting and leverage guess. with to is we I think probably being But I out at range high put quarter, that quality point are the Just your on would look point deployment guys, of little you the you really capital

this So, let me answer way. it

given -- on formal definitely targets We have leverage our we range. haven't

when think historically It's use portfolio we absolutely we're I where of We optimization some of and given our maintain don't investment really comfortable. facilities the we've guidelines decision. part leverage in tool. look leverage buffer as to a

say would maintaining we rating. conscious are another is grade I investment the of that very thing

rating have a with healthy I We frequent, think, dialogue the agencies.

we're given the deals. can that new and the is the where underwriting, portfolio you think so, a of current things, from see couple current And I in one environment

rating. the any environment are think an -- way Even a on range, the grade helpful, and a or the leverage without environment. formal that today balance it we for ability that unlevered it's are investment on levered and our compromises is leave about I guidance we but the basis leverage current at we to great how And that going thinking I'll push in in sheet is target where operating we're protect our the portfolio not have giving to

then of kind back on. going of banking of the flipping comments, prepared about mini kind of kind with crisis your And have talked you some current to we

or debt how, all, secondly, it'll that if space. hear portfolio, middle in to I space to banks are companies. the if they're, thoughts banks putting I'd on or would lend with flip further said do in may you the borrowers banks reduce which more in impacts to just competing love market willingness actually your provide lines banks? you're potentially with that you today additional think much how beneficiary back, portfolio some in past, deals of One, one. pull pull side, I have actually years, for back to likely, number two love is banks you for to the competitors from to really regards you're of companies two you on you banks that that then areas your credit your think this. if deals? how lending, that do with if competing So, be think that the And I a extent meaningful are outside at obviously would you're, hear

Ryan. Thanks,

they'll say, occasion size. terms and We of loans are regional tranche to compete deal say, are directly and of I'll XXX the between address do on with out. maybe And I'd of that more underwriting, put XXX, syndicate committing together So anywhere first the, Those part let's in banks, try XXX, and their solution own banks. question. the who

otherwise part market where the core we market market. the Then our are billion, lending the competing So given the participate on lenders $X on of that billion banks that's deals part unit would on large of seeing now cap side. the and billion, you're some Clearly is that doing. on, cap larger compete banks the with, focused one tranche given the the head is $X middle of that cap what the large that another billion, with that focus that's $X be there's part direct of and $X market direct

say for would competition regional is on side. more that the I the So, us

and side. either SVB or typically the on the expect them the more market fact there's certainly to standpoint, but First they management for a banks in benefit so Republic us. And aren't trap Now of do regulatory others their middle from that will think those be we and own that likes direct regional on, are, constrained that risk we lending,

banks or come best if the be do they'll those on pull be we regional even or want do quantum market And a back on maybe to on it into risk, aggressive perhaps, maybe but think terms, it'll they'll less efforts for of And is terms we And obviously better the where a basis, part direct play, which less two in reliable for now. lending that borrower we've can of certainty execution. into comes where that's of provide done execution. decades

of the Yes, and question. part try the second I'll

revolvers and and will. they, type and term I of lines, good companies? them. an I regional swing and you about sort, the and and what learning on effort we been very, to banks effective. And in part things essentially that of experience short well that it was built that do were what's last I decades, about asking they there was if former over -- if that you on a as the of think happened back liquidity how my pull think does employer, do impact facilities, the, with backed, for term These you they solution. think I banks directly for very they asset and if they're But with just place were that's long we revolvers others think a protected are not the did, partnered lot a two

relationship big that competency back and core they a which business, think I we, pull To the is more from with extent of effort their companies. really part their

will may, may as drive And do of be cases we may many there other many, necessity partnering financing will part markets past that a it solution. think like types the creative with of in with something be that I parties.

sit changes. For this for those unless targets, appropriate capital it it we for where right now, be below cost business wouldn't the that solutions, our of

that or hybrid something there risk there But type imagine that obtain I that's again, that private there'd place extent there's mean financing like opportunities. is emerges. It's solutions some something about up, just to a would change wholesale see more type doesn't think model, banking in business that business time and And reward the good a even to anticipate too or be early aren't but also time their comes be and demand exiting up happened would market to current I ends tell. the or environment. of don't unclear or which hear It's sector the that in them we where

just of things I'll to grow, the acquisitions. their the tremendously, companies add-on seen due our to and pullback, They're banks, making one continue we've especially that as obviously they're growing add, larger is right from of flow in portfolio and tough in business the Yes, cash some may to continue we refinancing But at banks. what's finance expect on, well. given for point one them the can going really larger to we them our longer, a the stay given by we they that of be know portfolio and some

in that continues out seen, amount of as talked And be pretty the we portfolio origination quarter -- of we've quarters, our to recent the you've about get as the existing high.

the going the the us, to that XX borrowers of ago. XX% months. due the years and two existing cost and the instead And it's them I from out solution getting what been that's over last cheaper of capital partly lenders for one, providing think would've case banks

with JMP proceed. next Securities. comes question Please from Our Kevin Fultz

Just Edmentum. one to for relating me question

impact AI that on the Now online is having the education headlines you've around the space. obviously adverse seen

model. high-level platforms was Some XX% than on you same could better publicly AI online Thanks. having thoughts are get of the year-to-date. if on outlook the experiencing curious fair what marks down more I that education If is facing. value impact the they're business I'm Edmentum are share your Company that for degree is around as the to trying and understanding movement the a and other just disruption platforms education well? traded

assessment you where Yes, they give very of it. successfully targeted about a and think to from a from think, to or me, assessment its over will from from targeted done can it, from I moving ahead personalized a much good some if job, but for excuse of going perspective -- more forward, proactively in I done it's going push -- talked about market time then content going a where big Obviously, time because you to the think a forward made move we've they've digital. is broader Edmentum has that's what analog students business I to are and and content baseline ed-tech, based baseline and tell,

a A manner. robust AI big to ability do technology some of proposition to is the makes forward it surprisingly, function. very type part that proactively of it And that value actually in that -- very gets a not more additive targeted is it going

into became product the his even that incorporating incorporate go of the before Edmentum market let will is exploring from. AI directly, CEO company So, the speak will certainly and a the as other who's it we're that and has topic kind because but benefit where set their set should to product ultimately field exceptional day, in the will that

I now. don't be about certainly to it tracked they're will that's of as only think But they've But additive that less one perspective, at I would my it's thinking a it other but Company education they I point performance. product, think that from How least product. that what they're necessarily well. And that comparative students. haven't think incorporating a on the a quite doing that for and tell, view think basis online way see that forward? at not AI thinking personalized what of with enhance the from ultimately will time relevant something they level the time do some been rolls I makes businesses. I And a better and

currently are no questions [Operator There Instructions] registered.

participation appreciate their we continued would shareholders partners on hard to and also dedication. like work our today's and our the for capital would all thank I thank team like for confidence continued I to call. their Okay, your and support.

for This joining today's Thanks call. us. concludes

all That concludes call. you your for today's conference Thank participation.

You your now disconnect line. may