First Eagle Alternative Capital BDC (FCRX) 9 Nov 222022 Q3 Earnings call transcript

Good morning, and welcome to First Eagle Alternative Capital BDC, Inc.'s Earnings Conference Call for its Third Fiscal Quarter ended September 30, 2022. It is my pleasure to turn the call over to Sabrina Rusnak-Carlson of First Eagle Alternative Capital BDC, Inc. Ms. Rusnak-Carlson, you may begin.

Thank you, operator. you us. thank and morning, for joining Good

Joining of Jen First today's call Wilson, Flynn, President are Chris Eagle Treasurer. Chief Officer me Accounting on our and Alternative Credit; and

section statements performance anticipated we by Alternative made future forward-looking results Before factors guarantees First are Risk within most our annual from of are, and as actual Eagle control report of meaning Factors such report results other Capital ways, to not recent XX-K and as known XX-Q Securities Securities Form on some the note of reflect quarterly amended. please that uncertainties Such our statements on the and call statements beyond that filings may our subject management's begin, are and this and periodic factors unknown materially updated factors other constitute entitled Act XXXX differ concerning and uncertainties Exchange in the BDC the that Commission. the various on assumptions the by cause and in could statements. and other to include Form The in with included

incorrect. of believe to result, on which are on Although are statements the based could forward-looking be the also assumptions any statements be reasonable, assumptions forward-looking that we inaccurate. could assumptions And a any those prove based as those on

undue not place reliance on these should You statements. forward-looking

any to call. All First this of statements Alternative date forward-looking as Eagle only update herein forward-looking speak the unless BDC duty no by statements undertakes made required law. Capital of

on that, November morning. this of access With until available after website refer turn our conclude to that copies call. Chris. approximately replay, we XXXX, yesterday QX the this hours at over the please To www.feacbdc.com. we our I'll during webcast call found this may and website, X, be be starting visit replay X A will call earnings Our XX-Q our earnings announcement released can presentation afternoon, were along to of with which

our Thanks, being not is the we'll joint of debt, expectations. know really rising -- that venture, in Loadmaster contributed morning, our and you $X.XX a a for with highlights, the on $X.XX interested more the three quarter and were thank quarter outside were We of net joint $X.XX who today's expected, our but end market, view the The financial portfolio saw I'll the call, our the transaction folks joining announcement. discuss of review given hearing we on in quarter softness Wilson first, the portfolio the at Sabrina. call, We on the in the results on continued in cover On results will Jen portfolio some address continued of some detail. Good are third then earnings basis. call. share let's overall venture softness book results $X.XX. portfolio more quarter. in to but of $X.XX. the all and primarily power the showed of implemented. positive share Lower once news by on X% quarter-over-quarter coupled floating the per was rates financing dividend driven earnings rate Logan $X.XX, a decrease cost down positions, ended The of The at efficient asset net quarter share, our value NII Logan versus Michelin with as this

joint As was our exposure venture XX.X% Logan's to of of XX, investments. September FCRD's total

JV plus Logan last returned rates. is rising increased SOFR. to facility result the result quarter. and last joint middle the with of to capital as refinance quarter, the the a approximately was due venture dividend QX the dividend The due Logan and higher of in correlated JV with dividend, million JV This than done. third increase XX% pay a about in Logan was of the income Interest is yields Logan the representing market to a refinancing and increase directly the $X.X quarter, issuance LIBOR the was million market QX $XX.X which $XXX,XXX income The benchmark refinancing middle a in from before the combination the in new increases of coupled During of is of dividend investments CLO, CLO. QX

in the the discussed prior As income higher market of dividend outcomes calls, of middle JV one the expected was Logan to CLO BDC.

direct robust, the From first lien lending over As comprised primarily $XXX the deploying middle-market companies. an syndicated million First in loans. JV platform Logan broadly is capital CLO a overall origination lien remains of perspective, first of reminder, Eagle sponsor-backed

consumer mix on landscape, putting a new business which of was a QX in recession-resistant driven new for and work money services. of remainder credit of volume our with We the looking We're of maintained the during include was add-on economic across verticals, a the portfolio technology the fundings. asset-based services, invested tradable $XX.X geopolitical lending investments, repayment $X.X cash run revolvers and businesses In which We and million million. including and maintenance deals and with to on new three care, flow quarter Given of drew and and information FCRD draw proceeds $XX.X investments asset million follow-on by a had activities. financial third arise. delayed and continued investments view quarter, cautious health total where total

FCRD the of XX well. investments. with The quarter Logan mentioned position over capital that, ended earlier, turn approximately JV million Jen. the returned this to $XX.X call the quarter portfolio With as As I I'll

good Chris, everyone. you, Great. Thank and morning,

mentioned, few have and off I'll par. investments start at a to new did we investment three First, previously Chris portfolio added portfolio highlights. million the with $XX.X

underlying fundings of for several total par. The $XX.X follow-on investments of million that, to on we deployment a as blended new totaling and XX. of was benchmark X.X% yield commitments based However, million $XX.X in had and spreads and investments addition rates also September

receiving at have that and made proceeds Additionally, the was we did repayment $X.X total of one quarter, repayment during par. million,

the middle JV returned quarter, result its to capital its Logan CLO, $XX.X a of also the structure market as the issuance million During of of financing FCRD. through its

valued the Logan our of JV. at As end $XXX.X debt million in of September down in XX.X% first from secured the at senior It million, was $XXX.X lien and QX. XX.X% invested was XX, portfolio

JV the end as increase is and is in As is restructured The portfolio, on approximately including which second lien rising JV the attributable remaining QX. the at the at increase on well rates equity BDC's during and end a to JV Logan including of QX, benchmark in X.X% investment second-lien both costs debt producing income-producing the held weighted our from the based was The X.X% of reminder, holdings, invested in and the OEM. Logan up the as and assets. X.X% the first yield lien of quarter. average other reference portfolio dividend XX% was equity-like Logan non-income in The debt

of a as at there QX, new During placed were value and on our respectively. nonaccrual. fair Total were at portfolio assets costs X.X% and no nonaccruals percentage X.X%,

the Now I'd quarter. operations of the like for third to address results

capital from significant coupled accelerated by was million for period. driven recognized deployment offset QX This investment income amortization in of increasing prepayment primarily QX. premiums reference income $XXX,XXX interest decrease and was benchmark were as rates. approximately in $X.X and The million with $X.X to increase due no from QX, Interest a During by of of an increased increase there and during primarily we prepayment million approximately realizations QX, the in cash interest $X.X to dividends. million QX $X.X

lower million million Logan of QX and the QX. in JV the and structure from termination normal the $XXX,XXX. market in our up refinancing of of the normalized dividend X.XX dividend and certain marginally decrease to enhanced The no QX. reference perspective, JV, ratio asset $X waiver management million Term due more a net expenses, to JV to of for fees return was million, the income from The waivers from increase the QX due the quarter. facility CLO were rates. middle The credit was Logan times due the efficient $X.X debt-to-equity $X.X significantly middle onetime driver Logan was associated fee in with in and dividend fees From end CLO. the was of flat to management a in a up at full market the of QX leverage by $X benchmark increased the represents at the of to expected, value management than issuance million connection biggest rising waiver dividend the $X the Total financing in Logan increase net the write-offs QX. quarterly QX of As to the charges JV quarter with

our We commitments. unfunded to portfolio to continue I on will that, our back to With credit under have fund over ample borrowing turn call and calls the manage Chris. facility capacity our

the variety we stock of trading its the in take gap outcome stockholder. interest portfolio of pleased on like to I'd as initiatives to a a to our and agreement price. as and discount, into translate initiatives October with Jen. XXXX, of into executed merger NAV did We're Thanks, subsequent announcement entry address this Since the the of with not moment These believe narrowing Crescent we unfortunately. Capital it's adviser, the the BDC a X. the close valuation FCRD developments FCRD on a best between

Crescent November transaction the proving our with which which close process believe While around Crescent forward and what unfortunate, spent N-XX Board Capital. offer both has we the found largest Capital both filing, from in XXXX. transition Board the BDC. proposed in transaction. with Furthermore, with with public in of adviser efficient Investment that's the to X, in of results The the efforts are Management to And vote assist all book our favor the the the a to signed a on alongside combination can be and shareholder, Crescent portfolio support working we fully an details to we look agreement Eagle First the process, and be aligned made very management. to interests support with was the And run compelling extremely enabled Board's the the stockholders,

spent right to and believe the they have forward. extensive going with We partner BDC Crescent the manage are time

will we transaction. not As questions any be a reminder, about answering the

you take open up Operator, for be results, any questions now. them portfolio questions. the we'll line If have to happy please about

with [Operator Office. from Instructions] And Lee our comes first Cooperman Family question Omega

is line open. Your

you. George do that like best the went and My Anyway, I've congratulate close? feel this to on did Washington you shareholders, to you I you public. transaction think I along this know the that first. time when an the want congratulate is want only initially is, way first the was not the I you question ever But I when outcome of I been you've as expect transaction. represented interest all

And you time to to that. able publicly? do for defer Thanks Sabrina, we're Really. to lines Perfect. that speak Sabrina. I'll have any

mean of would that we end into I think I Yes. probably year, publicly by but slip likely QX endeavored we've stated XXXX.

James. comes Raymond And Robert with from Dodd our next question

is Your line open.

on my echo question, not to Just congratulations That's Lee, out. laid the sir. transaction

Matilda and that widening Loadmaster the markdowns you like for develops Any Or for can still how bottom? On feel is credit. the months? which of speak of the that next the result portfolio, the were so contributors, or kind I XX to some one larger the greater how close to is Jane, actual mean, particular subject in the of any a color spread economy to is get it over being

market in feel Obviously, the portfolio, what recovery an Q number is any as on we put we we the that of is the that think reflection position. the accurate

So estimate at information on have hand. that our this is the best we based

have, Understood the it with mid has down -- recent the most but is you so? that information based the from say, Is information, in has caveat deteriorated the that data? that on

snap opinion on today the from we question, performance tuners. from Insane changes tape we at those where when are XXX my on Robert. versus No

And his no for Flynn now showing at like I closing conference remarks. turn this time. further to back would questions I'm the [Operator Chris Instructions] to

our Feel FCRD and have Thank questions you, before Wilson or operator. appreciate providing on those. you. when you update free the if of to out to Thank transaction to you with forward myself support appropriate. stockholders reach look an We the Jen any CCAP

concludes call. you for today's this And participating. conference Thank

You may now disconnect.