Golub Capital BDC (GBDC) 30 Nov 212021 Q4 Earnings call transcript

Welcome to GBDC's September 30, 2021 Quarterly Earnings Conference Call.

Before we begin, I'd like to take a moment to remind our listeners that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties.

Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time-to-time in GBDC 's filings with the SEC.

For materials the Company intends to refer to on today's call, please visit the Investor Resources tab on the homepage of the Company's website, www.golubcapitalbdc.com, and click on the Events Presentations link. is section. on release the website earnings Resources Investor 's also our available in GBDC

reminder, call to a now Executive As this of turn purposes. for Officer the I'll replay call Capital over Golub David Chief is Golub, BDC. being recorded

everybody and Hello, joining for Director Capital. at Jon Chris Simmons, thanks joined Greg Robbins, us Financial Golub our Managing Chief and Officer, I'm Senior by you. Thank today. Ericson, Managing Director, here

key member Company's we deeply Chris Golub a initiatives, delighted Before with was Capital merger I promote has for a team strategic welcome to want familiar driving the of team. number We're He He's to Chris the Ericson. Chris of Investment leadership over begin, to GBDC. instrumental decade. Corporation Capital in Company's XXXX. the including key Golub been a with in

would And remiss let's afternoon, presentation earnings his success same going we With XX didn't fiscal time Teune, and at contributions years. for ended release presentation outgoing year I over to the if call. our today's for CFO, to press our started. shared Yesterday Ross last many the XXth, I and an referring thank also that the get our be be quarter website. September to earnings on We're throughout posted issued we that,

resilient has healthy you to to focus new those strategy first-lien private companies to it secured equity are since strong who partnership-oriented loans inception been, For is, on of GBDC, backed our and sponsors. investment senior by providing middle-market

quarter a capping this GBDC quarter, off The another fiscal is had that headline year. strong strong for

them and probably ended several The also GBDC in $X.XX, and on on X key later both was familiar, we'll share rose approved per because an September describes contributed in fiscal distribution to GBDC's adjusted $X.XX, that I'm X detail ending to discussed $X.XX go 's they into Slide going the NII share, themes, to XXth, quarterly and we sound These was greater earnings to share summarize in adjusted X per up calls. now, presentation. previously. EPS for key full quarter, quarter the themes our For increase NAV success, the the the per Board themes year. from them last $XX.XX. $X.XX,

The portfolio improved months, last to and performance. strong first theme over pre-COVID is the metrics now consistently Credit we're XX levels. back

The view, the liquidity position second optimization. has my balance been theme and sheet continued balance is better. In sheet never flexibility Company's

The credit, remain ever portfolio origination Golub The best origination. and is on year GBDC. an Capital having third led highly from selective to that's theme we as even is its at robust robust platform perspective growth

performance Gregory, for I'll Now, Chris the elaborate the hand floor and the on to fiscal GBDC's year. for and to Jon, quarter

to for over back we'll you. and Following Gregory, that, come I'm provide questions. the closing and commentary, going open line then some to

you, Thank David.

on drivers Slide Two results. the highlight. Let themes I strong key to key of GBDC’s X. to me I'm going elaborate start on want

the GCMMR, revenue we compare borrowers portfolio against July August of July same First, in and those the XXXX. which weeks perform to middle-market results and Capital I'd attention Capital to your earnings September were results Middle call August our to in XXth The ago. several once Market The or Report, published well. continues XXXX companies' for Golub Golub striking. GCMMR and

detail on trends given The XXXX. in we in the which from in was earnings median back growth X the are them quality GBDC's of the portfolio side QX of exceeded rates right-hand shortly. believe into revenue credit listed and XX%, economy slide. EBITDA reflected XXXX positive to Strong the XXXX We'll the more growth across strength levels go remarkable

Capital platform. across remains activity Second, middle-market the deal strong Golub new

net in Golub and robust funds at Capital, the at GBDC, As origination by loan the extension you Company. record drove will later presentation, see growth middle-market at

closing year, the throughout opportunities selective highly remained on X% calendar less of than basis. reviewed year-to-date deal new Capital a Golub Importantly,

side Categories performing the with the right-hand migration at underwriting, expectations perform corresponding down on listed now on in the expectations. which X, loans or X, and quality on expected in or a are that at X starting Let's which continued We've in steady better credit increase credit our are slide, our loans positive performing X quality, are Slide Category internal decrease a than below upward and X. to trends of seen drill performance ratings

as X/XX, left pre-COVID X can portfolio you portfolio, few with Categories expectations and right important, fiscal year-end XXXX from points X.X% line Categories fiscal the line on represented the to is and year-over-year, XXXX as X/XX, in right and our X, the percentage of an improvement increased normal XX of companies far of data the portfolio which of X of with the XXXX. below Equally materially in very of see performing X in around slide. XX.X% X of year-end remain as number. and in XX%, category Similarly,

as remained June portfolio of provides other just Slide quality: categories the low, X/XX. September as rate non-accrual This was year-over-year. The discussion investments XX. net continued of but X our as quarter-end. indicator value second of the results. X% net its at is Those that well $XX.XX in point as gains. GBDC's XX% fair two fair realized come NAV per this usual $XX.XX XX, a lower only share X% fact NAV at gains, X to as per constituted non-accruals of very improvement A from We'll value of unchanged of increased of key share indicators slide back unrealized credit shows to of bridge about improving quarter-over-quarter, financial GBDC's credit at

through Let's the bridge. walk

with in during mentioned earlier. recorded line that net share losses realized NII were Adjusted increased David No was quarter. the quarterly $X.XX, per the dividend

share gains $X.XX per in In fact, March continued of the XXXX unrealized of $X.XX share, net losses reversal there per were gains unrealized were reflecting and realized quarter. the net incurred

results to Jon? me let over the in And Jon that, a now closer for call the results detail. our the hand take to for Let's more through you look at quarter. walk

XX GBDC share per quarter. Slide for results the of and realized remained to adjusted increased summarizes net $X.XX $X.XX gains. Gregory. share, our a generated Adjusted NII and strong unrealized credit results Thanks, as

result, our XXth, per XXth, per record increased raising to a net our declared from distribution, distribution November is XXth, to of of XXXX, $X.XX $X.XX on share December at As our value board quarterly $X.XX stockholders share to share. increase $X.XX it as September XXXX. On $XX.XX. December a XXth This per to payable XXXX asset

million. Gregory million portfolio fair or of undrawn unrealized increased and exits ended quarter. noted, Turning of other at the and activity, investments to as we sales of by GBDC total Also, appreciation XXXX, well as and million $XXX.X XX.X% factoring in another undrawn originations commitments Slide was new $XXX.X million, had loans. as during quarter on as as quarter $XX.X value $XXX.X September XXth XXth, totaled record the delayed investment After commitments term total revolver commitments investments $XXX.X of for of September draw XX, million

These unfunded GBDC's of liquidity commitments in are sheet context balance small the position. relatively and

XX% in one-stop quarter-over-quarter. investment GBDC's portfolio the on at and type the the table, the average remained quarter-over-quarter, new flat, rate with new loans shows of portfolio LIBOR investments XX bottom As the spread remained almost mix that of investments floating-rate fair on Slide by weighted to shown represent over consistent value. continuing decreased slightly,

basis with that average an XX points. less than shows XX Slide by investment portfolio size diversified GBDC's obligor, remained of highly

As was loans, of secured we in be floating lien of and XXth, positioned resilient investment September comprised believe portfolio defensively our first what of to senior XX% industries. rate

for to investment quarter. summarizes net our XX, spreads this Turning the Slide graph portfolio and yields

interest yield points line ended XX represents to line, this Focusing excluding purchase the income premium. for earned first the fee price upfront XX. and amount fees by the actual the the of X.X% investments blue including light basis our amortization The on origination yield but or decreased quarter September income, income and on

by fees The investment includes also or the yield, to XX the discounts, during of X.X% amortization line, quarter. blue basis the points which and income decreased dark

Our waiver retired costs weighted a fee cost advisor. management flat debt, offset excluding debt average Please our when on were we costs that issuance million these remained early. $X line, or note at the aqua by blue one-time of by certain accelerated one-time X.X%

Our net that, the basis points over will cost Chris? I With to line, decreased call the and by debt, weighted Chris the the investment of income which between yield hand green to investment to discussion quarterly of X.X%. is continue XX the spread, results. now or the difference average our

next to slides, value were investments Flipping XX. percentage debt Jon. investments respectively X the September a total and non-accrual cost Thanks, as X% of of X.X% as fair at and

at portfolio X non-accrual quarter, investments. the company number the remained investments During unchanged of

rating fair performance, of in his opening investments portfolio strong internal a Gregory rated as our on X.X% company of the scale percentage discussed the commentary, continued September XXth. decreased to value result at of X As of performance portfolio as

least at our value quarter. reminder, As each valuation firms a independent of investments XX%

sheet as Slides the months XX our of and details and September further statement, on XX balance XXth. income for provide X and ended

graph top bottom our same the distributions the summarizes on XX, on quarterly over And Slide regular on the to our five over distributions, our past special the graph quarterly equity well the summarizes the years. as as timeframe. Turning returns

illustrates Slide of our history returns long to Turning graph XX, our shareholder since IPO. this strong

inception. As illustrated, investors in a XX% have on NAV IRR achieved GBDC's since XXXX IPO

of our XX capacity cash, of million restricted investment various and $XXX remains and facilities. availability XX, available summarizes credit as with liquidity capital in September over our cash, which through Slide strong

rate the issued all SBIC right-hand issued XXXX. highlights sheet. side include: XXth, on our X-month of which highlight the balance Xst, plus debentures optimizing X, X.XX% outstanding February also we priced million had the X.XX% on notes under and XXXX a mature interest We of weighted at First, debt key of redeemed $XXX which million million a X.X%. interest $XX and rate $XXX We on of September average subsequently in which the fixed August securitization, continued of notes, all unsecured bear XXXX progress of of on LIBOR X VI were of August our XX,

yield XXXX respectively, a XXth in an additional resulting and million a to unsecured price price an maturity additional at resulting Second, million at X.XXX%. XXXX a October notes and on a $XXX of unsecured in October of $XXX notes of we X.XXX% XXth to of maturity yield issued

our November amended with accordion primarily to $X.X revolving credit us now facility we up to the billion. Morgan allows facility which XXth, increase Third, to increase feature, JP on the

as and on the quarterly summarizes distributions the as of our a summarizes Slide recent I'll share to of December XXth stockholders to million record turn it increase we per November recently, our commitments entered facility board to for December billion September the and addition, as some XXrd September of that, from most XXth XX closing of to XX and XXth. our With declared facilities agreements October terms distribution aggregate over XXth. XXth, of million debt into now David In $XXX to $XXX.X $X.XXXX stockholders $X.XX of Slide on remarks. payable XXXX. under

quarter. strong supported an unrealized net realized a gains had GBDC grow and the enabled up, sum Adjusted investment substantial To our dividend, origination Chris. and Thanks, were portfolio increase nicely. in income new robust to

our and coming period. optimism about to tailwinds us want for XXXX, outlook and some to in take the prospects talk I the then we'll questions. that Let's fiscal GBDC Capital have highlight lead Golub for X about

these I've spoken bear about several repeating. I of think before, but they

first is we've credit throughout We've performance. that strong the March portfolio The seen highlighted presentation positive XXXX. trends GBDC's since tailwind today's XX,

won't to to strong. proven for at described, unrealized troubled We of needing and be minimal X has and period XXth, portfolio gain XXXX today to gains portfolio cost. through the realized of low annualized non-accruals X underwriting be has the pre-COVID XXXX on Gregory distracted points a XX and portfolio. basis X, by losses have about from defense Category and very netted play September Net Category the an as loans. January Our And

balance GBDC's raising the health debt-to-equity, think in range, with of GBDC's portfolio, to strength X.XXx this to of GBDC's it constitutes of that's raising that with and our place is second A Low-cost, forma comfortable tailwind now lien-oriented October X.XXx first about debt slightly line sheet. much flexibility flexible for issuances. very the and With debt the XX% unsecured and of funding, we're our highly we focus unsecured leverage pro target in and peers.

have we continued September growth was operating private Xx from is so the equity As a of at grow of room tailwind debt-to-equity here. to some the A ecosystem. third XXth, GBDC ratio,

last brought has suggests We ecosystem basis around driving XX the powder and equity top COVID trillion private and last total delivered state investors funds this $XXX both period. over class asset the a data equity on keeps to success and believe according the you year-to-date, Preqin. Research the continues equity long-term performing that's reported by billion from very years. fundraising over have a private to the during private for grow for raised to more allocate This Cliffwater to the pension years funds dry for can simple that equity equity's stock class and investors results. private capital been asset reason: both Private in $X.X the to see XX of

X growth Based the private plays over generally opportunities level years highlight Golub is greater flight alongside powder, our that result, to path that leader and provide want committed private to is it's the reliable the same private Capital to the firms, in as it's is believe last lenders growth double and ecosystem this on and the of the on solutions equity X fundraising equity Golub the win-win they current of ecosystem to likely number that competitive Capital want sponsor We GBDC. even of dry they well, capitalize the so all next relationship-oriented and can that going will growth business, We we leading advantages. trust a this private to to a able we'd size They a in shared well-positioned tailwind be to success. business. rational, think things. grow equity to for and equity on finance equity think market and be The private

experts. preemptive They deals that traditional and that They both the expertise kinds can want want U.S. looking to both work facilities lenders to to under can deliver want They deals wraps. or reliable They They of who during creativity have lenders second-lien of targets real one-stops that and first-lien, buy-and-hold companies discretion. teams a handle multi-currency situations deals, and proprietary with when with They they’re deals, bids solutions. deals they distinctive add They situation get keep who lenders lot be portfolio speed large underwriting underwriting decisive and work underwriting to need also pursuing want want them; They deals to to with and deals. teams the small lenders and want with different scale that don't syndicated up value work the grow. at. want process. that want can and can deals, up debt they're for as on new want the

it's Capital, we've these equity the to At whole position this number that And strong to sponsors around. period, lending good ' sponsors. in think capabilities, their reason. very partners of us we resources unexpected all sounds And partner because, COVID seen track they scale, in record, this being one for our know private key around the partners as challenges have circle. unexpected to want experience all If long-term and our choice we've through business inner navigate come familiar, small our of our put our reputation, be with challenges Golub a a all built of

final X thoughts.

the team. possible prouder have of GBDC's XX And our the team. First, our for the Golub demonstrates I'm is because and history firm's performance been team in never COVID, of that months perseverance the opinion, caliber challenges been of last and to the grateful the and travails I've day-out. the Capital only commitment strong in my excellence of best and the day-in dedication through

for thank our Second, of I that, line to want open confidence. their questions. all Operator, please the With for shareholders

Instructions] Please KBW. your from we while by with Paul is roster. the [Operator question stand compile And Q&A first Johnson

far as fairly quarter. my portfolio questions. the as first was, new quarter question investments, afternoon, Good below taking on for Congratulations good current on was My Thanks this another guys. yield. yields the

of leverage guess, your operate just thinks you with in to about this fee -- of low compel how And to the to obviously, Golub, its thoughts effect ROE? I'm on to the same run on spreads market your maintain get the guys, rate. curious, versus I pre-incentive hurdle like You higher income. I’d close end the the does

a that makes looking we about stable it GBDC one-to-one assets. it our sense from think makes talked And Honestly, thinking reasonably mix remarks, that spreads this in some do a at is think don't ratio. My I for periods. that I prepared change the than do really prior and sense as it issue. think meaningful We're and those issue represents it take more running be is on now spread are related. to we think X to more I calendar spreads from and a premature QX is sense, that about at a debt-to-equity

optimal. I lighter than think that's

coverage when I we to the do And of share. -- NII like much in I safety think lot per be of in because a that, it of dividend we'll around very catch-up, which be provides the

but think now, one-to-one shape at higher, the very bit think I income in a too leverage we're from us good very So ROE we're much investment on a return headed in a than right an and not standpoint. we're that I net puts good where higher on and position standpoint, that from

far growth Thanks. go, EBITDA And your year over as It's portfolio a I and that. or a answer. in been there's great companies appreciate so. massive as pretty the last recovery

expecting As into bar How look set you growth, you do continued XXXX, portfolio the for companies, where do XXXX your at again look more you this are out you and do you robust that? challenges? expect

likelihood, come down both, periods. question. seen the our of the in correct the look day, index end median the At see okay. of That is in in for for several good -- level. in significant That's EBITDA to north that XX% both revenues Capital a you're the company Altman growth There and the We're in if data some. a lenders. likely all portfolio, It's recent we Golub we've we're sustainable very not, quarters, last that at

scenario. downturn and well fast-growth growth The really a in, environment so do we slow environment a in don't we environment. deep So only do is a well

of downturn. see meaningful right don't deep a likelihood now signs I So of

that we've a got downturn got mitigate need so inventory. reading the through of I In to shortages system, risk about inventory deep a macroeconomic think counter-cyclical. we're chain because all shortages the some That's rebuild fact, supply of we've

going cautiously we're So I that percent growth. anticipate the going that optimistic I about to tell am period. I'm not you sustained XX-plus coming to see

I unlikely. to I we're think sustained that's But see think growth. going

thoughts the that you a existing obviously, wondering briefly over reference to you X, year SOFR. largest you hear. loans? LIBOR switch the are have an question good What there. middle new Great. about you're Just to on the, Thanks. is, rates option you That's shift that's or the from talk about potential lenders think last to was one great. the next of any challenge could if leaving And Whether on would market be out I loans?

Sure. it's think I to big a don't be going deal.

I think SOFR. everybody is going to switch to

anticipate I work of by has industry. been in well enough think and work issues. the think in the the preparing minimize the industry done mean very going the transition. preparation LSTA, amount this, been into I gone the industry but don't for The going into transition, any for to don't involved meaningful that's I and it's has association, I

you Great. Thanks. this taking Appreciate my afternoon. questions

My pleasure.

with Robert James. comes Your next question from Raymond Dodd

Hi the continued guys congratulations growth. and the on NAV quarter and

very Another not incremental some with this like Spreads to again yield quarter quarter spread there your your look se, new last quarters. stable on being be on view. question, floors prior on point and pressure yields. may it does the But compressed originations delta given compressed in the of versus spreads but between stable that per LIBOR

by in instead other unitranches? you can And what is doing guys million-billion the there mix by us out dollar moving you components maybe up-market pricing potential being driven So color raw influenced stability the market? unitranches or you're and or spread any that seeing of give multi-billion-dollar to on of beyond

make point, a I think Robert. you good

mix. focused don't in lenders upper who there other I scale the of we that the middle transactions that in work market are large-end and think are in market, middle XX%, more of of not business We're upper much I on know, XX% component. our -- our on, maybe, that's the

that. transactions meaningfully the mainstay to Our about companies $XX for in is meaningfully are are $XX EBITDA million companies that million larger I'm range. that -- than talking

is floors. LIBOR middle on those transactions, small-BSL-type market, upper pressure there For

than basis X% It used have a in to standard cases that. common floor. some points XX even lower and deals size LIBOR to It's larger be see for loan that to very category increasingly

pressure So a portion a from there for hesitate of but think observation of That because I portion competition there our is syndicated Again, that to pressure mix, there. from market. meaningful bit I is some a this the of floors. really it's to reduce fundamentally it's a competitive broadly GBDC deals call LIBOR is in fair coming

I those that the of at on market market, you of deeper world of look market, that well, XX% XX% going business other is as upper has And kinds into common just appreciate do the structures more you of concerns, portfolio? those into or cov-lite not the in seeing of portfolio question obviously, broadly -- lot the that. down middle structures started moving of down we case, of -- if XX-XX% market, the is upper into maybe any your the that And said credit when are middle private kind and you a in new syndicated more have the indications there's stuff? moving becoming down about that that down cov-lite

that So answer X going to questions. I am as

first we middle-market. in the talk of some and packages BSL are in the about what The is or upper small terms in more documentation we'll traditional large trends then covenant middle-market, seeing

syndicated market in larger where and can terms. underlying borrowers solution those there's a always pressure in broadly because broadly documentation they broadly weighing can or terms get On private syndicated against traditional on the the syndicated first a deals been the cov-lite get solution, the question, are they solution, sponsors

shifting in their either many borrower-friendly. I traditional of the at I'd would traditional the to that those time, market, seen a swing, of any to want they become been as getting reflective we've of are, the sense be we're more August bit middle-market point which conditions In terms in So expected lender-friendly. period choice given a pendulum say, more And broadly I seeing always the XXXX, say, deals the more terms. market middle syndicated terms they've mean, borrowers think traditional they are than that always to. go have to larger of that's borrower-friendly in I more since, in or cases, to in because reflective are

at They the of became sharply the onset more lender-friendly pandemic.

benefits in I I that I'd but documentation would the overall, really tell think middle that not I of the the all now through the say, There's proof economy, period, that meaningful economic change strong little me early to those the strong a around seeing that market bit trends the edges, much. sponsor think seen, of for that traditional that not experienced performance, lead the they're seeing we're we're we've lenders. you of conclusion strong the value are And we COVID market, actually favorable M&A that the right the market moving movement. conditions quite overall

I more, that pricing get all not about David. If I environment. appreciate one color,

line? the right most that advantage XX in up to slow, that take take that crossed one of -- the given you rates wrong, XX% meaningfully can should the side, higher X, -- maturity we you've pace borrowing I sheet expect you would obviously continue Or balance if it bit extremely unsecured more than zero which expect expect call little think, yield should under today. Should now that rising? me Would a a from slow. of the gone the we October certainly -- I'm given the perhaps or of that get we slightly expect of to of the correct at expect would to now essentially a was On you've add-ons that I year, I compelling. -- you XX, to congratulations over to with is course we to

we revolver, where we like nice think Robert, very I different those of securitization as We've mix place. all good liabilities. a having debt. now, being very low-cost of And we are kinds a X notes, a of got very right unsecured low-cost see

point, optimizing being going to borrow. I what tweaking what would places from this in as be shifts. we premised that large-scale that can different at market characterize here to as on is conditions going do the And to are and and So optimizing, we're tweaking opposed

those of are your in decisions. elements and different mix the cost the key to borrowing making Just maturities, of the point,

I appreciate quarter. on it. and congrats you Thank again the

Fargo. next O'Shea is Your question Finian with Wells from

of marketplace. my at Hi, David. to the proliferation new Good least afternoon. in question. or -- taking Thanks the wanted about for BDCs ask I non-traded

bit side competition and Q&A. a asset talked about You've the on the the the or call origination

private to move What based formation? As BDC discussion. new products think of public that has capital way, this to of channel part on the the grown live are I'll have cannibalize capital you is able or Does new form is in it of one this of raising, the sort BDC disruptive? it impact harmony? So the do or managers BDC they who to

rapidly. the seeing capital universe, going been to the we're I have lending private the formed job, and growing space the to long ways very been other is of good we're private do which in period, different capital it's as just entering Look, and in see always growing managers there in as in think lots recent we more direct invest equity think that space, I for the equity so keeps a ecosystem

element, the success of taken. or sign class the the the is is that class. is this new the asset of is private some So private of BDC key and managers I have issue think that important even a of the Fin, individual that structure s this not asset success the BDC in The

That's I other at is the the we're failure think what going of managers performance. day, have our end or on. our on be that focused and going success to we are premised to to understand

there near-term credit do be Do to new you waiting higher is think assume next a of on end time given think how But up then sort you if of the push wrong. the leverage? you That's I end to good or earlier money you'll is, given credit the backdrop you're Sure. best mentioned a there closer in higher on how better is the -- now think is, helpful, goal? the that this the follow-on me middle to -- hurdle. as terms the correct that usual thanks. a leverage quarter levering I'm would the quarter, the just be much to time do how good we a midpoint, new low with of volatile some target is for or origination And strong more

being view We what So your looking small We're QX, I tweak. QX. as fiscal end a I major don't a at running as calendar as as implies. would view guess of I change were this target our at the question below

to So sheet, I our to in bit, don't I that balance I higher high continue than combination the range. sheet our now, of the would the end growth us a that are we a your size of the to did I think calendar this the we to of seeking to any of high in most balance think we're that quarter we the net end the not interest where increase grow asset anticipate the quarter. that were recent but expect to would the in our anticipate And meaningfully going I -- go increase little this range. will asset income. not of the course Fin, QX over portfolio and point, go we but growth to

So anticipate. well the we'll catch-up, be into I

for And well. you. me. all Very Thank that's

with David Your is next Confluence Investment. from Miyazaki question

way up ways, a balance of as have with rates your Robert rate me, wanted with taking to for this seem lot a bit protect which, of the were sides follow that in seemed liabilities to side interest they they're industry. of kudos floors, the outlook to side. both for to portfolio bit conversation to Hi. you if why their on for in sheet. and asset still common little In managers I little be a right to the are regard floating against on my the even a a BDC lower well-deserved Thanks use LIBOR have mystery as questions, progress to on of always just the having

a interest bit of becomes it So play. rate an

great but could rates we're where of are rates it at when headwind. going looking the as a going period people And a lot coming are works face when down, be them up. to

just your it So wouldn't I'm the and it's floors in? the this prefer sponsors managers something all not that the that more then put in, curious, and together? in it's take managers And is putting make and at or are wider liabilities if a the spread sense put float just to something that assets something

if interest the following we it goes of broadly place financial And the low, to rates fell in And the started go crisis. David. syndicated was question, interesting an it's where origin back LIBOR So floors the very when market. back time,

of the would perspective, respectively. right that better, it could market expectation transfer ways, into of between a in as by norm adopting that's I current difference and many convention the more retort either sponsors being by LIBOR you're followed Today, current lenders a So yes. describe lender's that'd middle a is an broadly or floor market pushed X% into one than or that be something I And the the spread, traditional of the that LIBOR, LIBOR transfer floors. syndicated one if to obvious all if that from could as

level so it'd worse a right perspective, is level reflective borrower's the of rates. expectations the over and be what about a from And interest there'd be negotiation future

agree of don't a that headwind ways, for against gives meaningful in lenders. impact very us, David, issue exposure LIBOR For rising now unsecured I one big you, us, may we bigger some buffer anticipate that the our make I to going a I debt that would with point is have of other some of rising and other Golub rate it which with bit Capital. is, degree for be notes a a fixed a be LIBOR.

the phenomenon -- but Okay. your ability I in, effectively what you. an that It's for to Thank just interest that and some of is certain they're interested managers is it think industry that course, -- one most are I of rate, -- taking is ways investors underwrite. seemingly

floor. how seems I also wanted kind So private that, in X peers follow be with of have But growth, ones, a in some especially it tailwind its LIBOR Number on larger and Number from industry, of the really up on always your to X regard moving and the equity your phenomenon to meaningful the to misplaced verticals equity themselves. and of sizable private

explanations on conflicts know ever away in I that having And and But been appears some those be to on me for parties boards discussing don't can debt different side, you reasonable. advocates equity versus potential it the seem from. to conflicts, that some of there's the that the different really always side get

world a your more Capital interaction this a others versus in is could Golub this X your number actually a you a equity conflict. little a about -- lender more bit And to who little from how -- X? perceive the so position number as with company, talk private And bit benefit have you tailwinds does of your put and

really perspective. It's that be looking your thoughts firm Look, that major an that's of gaining hope on Do internally with your yourself financing think us a all private all some firm David. a research I from I so, I about you dynamics, competing next It's business may model with giving industry awkward. in in mean, from you positive the that's a industry ways the singular do positive put of external It's there's a also shoes all share of the diligence, the our to your about deal? due X. purity focus. for which a a standpoint equity at want you positive. Company

at have think but debt think I in being business model a about the successfully serving time some sponsors in it's using like singular and being same model, I other challenges you're the and of our of private one are we private one, but things focus. who that not that just correct number the are business, the with competitors equity there of I this business

you in very best the much Thank Okay. all the holiday season. and

David. too, You

Thank you.

closing further David -- with There call questions are to turn will no back now remarks. time. Golub at I the for this over

so very the require need want you Thank something a thank want I through to a remarks, Great. to challenging and which has that attention. historically didn't with for period surprises lot of I during operator. been I all opening you. is COVID much attention things of reiterate said to just This much,

support continuing period, very in to a through appreciate and Have season. we So holiday us, your over look much to quarters. success your great our forward and confidence coming the and progress this on report

today's for concludes you conference call. participating. This Thank

may You disconnect. now