Golub Capital BDC (GBDC) 6 Aug 242024 Q3 Earnings call transcript

Hello, everyone, and welcome to GBDC's earnings call for the fiscal quarter ended June 30, 2024.

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 SEC filings.

and to Investor on homepage Resources website, is intend please earnings of we Events which the the visit tab www.golubcapitalbdc.com materials refer today's to call, our Presentations For link. on click on the

our is section. Investor on in the Our earnings available website release also Resources

that, to As Chief David a With Executive reminder, turn to Officer is call pleased this GBDC. Golub, the recorded. of being I'm call over

Officer; for thanks Ericson, joining us Matt joined Operating I'm Chief Chris Financial and today. our by Officer. Chief everybody, and our Benton, Hello,

same For our companies those IPO. our to on senior to by This of you strategy companies, who the private loans are that are providing we've investment new GBDC, partnership-oriented had healthy, secured market sponsors. strong focused since strategy middle backed resilient is equity first-lien is

our our going period, for start earnings on earnings an release that of take presentation And our through call press for we with Chris quarter and during be going are the to summary for Then up with Matt presentation and XX, ended referring to we the Yesterday, as I'm issued usual June coming we'll headlines the go posted and our a We'll results website. the wrap with I'll in the more to for finally, and quarter detail. then financial quarter. outlook questions. performance today.

The headlines. all and quarter detail GBDC's about that start today's in ended was is to me part, in disappointing part into headline and great it XX let in with we're So of call. talk June going

great summary. with part. with start Let a the brief start me I'll

for and shareholders, the in GBDC merger a good merger business. good win-win-win for First, was we our second shareholders early June. closed We as for GBDC believe GBDC good affiliate

industry-leading made NAV of the also series $XX.XX. special share March an of GBDC's per up GBDC increasing go-forward with ended what fee to declared a completion quarter XX. XX%, earnings GBDC's X.X% be we also We fee power. believe of the It incentive to merger permanent XX% reduction from That's giving distributions. to paying GBDC structure The the in rate NAV. from accretive was and began and

Second, on ended XXXX. middle in XX, built began It in picked origination the that M&A quarter December market the volume up. recovery

investment industry June $XXX the of areas Capital's million year. same XX the advantages, commitments sponsors, in New up expected, sectors Originations competitive for well. know $XXX totaled the concentrated million, repeat we quarter borrowers lots quarter and as from repeat of were prior Golub

borrower strongly borrowers and also Third, across well. The median for Capital and EBITDA most showed seventh Golub GBDC's up consecutive the Market of the revenue performed quarter improved. portfolio Report Middle ratings performance

So the negative part. what outcomes credits, Pluralsight, Imperial had led this in Optical to disappointing GBDC of and both them. was meaningful X on write-downs and

it. and not company and In $X over Imperial sponsor frustrating. surprising to of of to seeing fell process low we're were record across we're portfolio. decided long to share net low but or both losses, perfect. proud not developments invested of the defaults billion GBDC from pivot credit realized we're In debt, an continue the track equity losses restructuring. to patterns leading themes of with Pluralsight, cases, unrealized not Both apart Now billion we case in for X credits. In primarily sale a of our these were advanced the $X.XX this about In Optical, a a of $X.X adjusted and merger, per in quarter, the reflective very support decided losses with and saw

share. share Adjusted X% on $X.XX annualized. the So $X.XX was end up about where did we per A was XX Adjusted share. earnings the net quarter? June investment for equity quarter in return income per of per

going Included on fiscal support quarter annualized. year-to-date quarter's Matt? of to a returns decided a delivered to a Matt to quarters back perspective we merger-related Capital Chris and being at in the how X and describe performed to results has Golub I'll some some of items. friendly, a incentive And proactively P&L fiscal these were the have on our think this of how variety For end the for onetime for of and more year, to shareholder continuing quarter the our XX.X% on offer come including about GBDC's quarter would are GBDC outlook. and the tradition this impacts shareholders. GBDC detail, wave in items. thoughts first profitability onetime onetime equity the from adjusted fee the onetime return basis

David. going X. Slide Thanks, start to I'm on

As corresponding income XXXX, increased GBDC's corresponding David about Adjusted share of to $X.XX, NII adjusted just Compared QX per adjusted an of by previewed, adjusted share net ROE was per or to X%. year-over-year $X.XX fiscal $X.XX adjusted to NII ROE NII X.X%. earnings per was an XX.X%. share of

Taking were factors. key a GBDC's multiple step back, driven earnings by

with exceptions detail a drove on markdowns Imperial $X.XX that more unrealized the Optical majority in the generally Pluralsight and First, realized of share, per net I'll the credit solid into go of performance moment. and was loss.

to quarters. rates Second, high base we continue experience consistent recent with

This XXXX. permanent investment GBDC's drives the voluntarily benefit includes GBDC expenses. Golub with fee merger tradition This sustainably to long the the leading on fee lower This managers rate fee Capital waive continues finally, incentive XX% XX%, the reduction structure waiver to equated investment And June investment to taking and per net incentive Capital, to Third, which quarter. X earnings. closing of Golub from this elected the fee $X.XX actions. X, manager in approximately shareholder-friendly income advisory became GBDC's of share the

me funds the value portfolio prior the points primarily at the of basis X GBDC sequentially, portfolio categories GBDC's X categories performance of result in from Net the increased credit the just XX.X% quarter, prior Let size the quarter. the merger, The of X performance fair rating improving and in and in represented XX.X% investments total with strong the overall internal to of at billion and increased $X.X total in and value. remained XX the investment billion. bringing closing to from quality quarter. Investments portfolio portfolio X $X.X credit by ratings X of summarize activity fair rating

sector percentage nonaccruals a XXXX, of BDC to the addition average. nonaccrual the to investments XX, at increased debt XX, basis In continue well portfolio the quarter, of from to the as status of at As by companies. was XXXX, number fair XX offset XX increased and portfolio to accrual below company of slightly X% be the March return at X one June points value, total investments

portfolio very Despite his Imperial detail, in nice don't of is we broader which did relative and Optical in weighted the We have are health positive these quarter XX%, credit more opening remarks. results. provides moment downside the The size that credit to We think a trends, the well two in on from portfolio, continue of average believe really a generally representative worth overall believe protection. the David they to perspective. positioned portfolio of the surprises the given probably loan-to-value discuss and highlighted we negative impact it's quarter's its this was

care care retail Imperial products platform Optical is U.S. locations full-service eyewear the XXX a through that and offers optometric across vision patient

million senior XX, Our amount $XX.X premerger consisted secured $XX.X GBDC base XXXX, base of GBDC amount exposure at and Imperial to debt at X. of March at premerger Optical million

company some The and the our been sponsor's has underperforming expectations time. for

year, undertook last sponsor, a the of strategy. support we two-pronged the With

turnaround operating First, including implemented CEO. plan, company an a the new

strategic explored it Second, alternatives.

probability a there exit. strategic believe we XX/XX/XXXX, was of a As high of

stakeholders took control and We equity with restructuring ensure of capital However, the other its on the unrealized This GBDC's the to quarter. clear of turnaround. to in it key net rightsized end loss this over structure closely We operating worked quarter at a shifted management was the focus drove the going to Accordingly, course of the and Board. realized XX/XX, not we became majority and alignment. existing happen. singular and

on Continuing during let me a Slide share to the per as on higher to increased NAV certain period. the higher GBDC shareholders NAV year, changes $XX.XX. this by briefly share summarize than sequential is balance distributions $X.XX basis quarter. per delivered even X, now sheet prior in $X.XX

shares current cash principal merger, of outstanding down a quarter-over-quarter NAV on cash merger to net materially available described approximately in X and of paying at earlier, benefits the X.XXx for resulting issued got $XX to price As We available deleveraging material trapped cash decreased existing the debt one closed of in the it. quarter NAV, net and merger, of GBDC a a basis, notes. connection that the debt-to-equity level accretion with X.XXx million issued David we the and described purposes of the recently expected last GBDC for is of at securitizations with shareholders. Leverage that in excess of were we in

per $X.XX per share Let's distribution quarterly turn of Board a distribution fiscal supplemental of QX distributions comprised $X.XX approved now. distributions regular a of $X.XX per to and share of The share.

GBDC's distributions these as significantly annualized to quarterly based of in company's dividend NAV regular an exceed share distribution, of to regular NII together, continues Adjusted of XX, XX.X% coverage June resulting XXXX. Taken per the per yield XXX%. distribution correspond share on

XXXX, additional record In on distributions for of June special XX, close which on of of X of XX, record stockholders share, and the August paid June began December XXXX. addition, XXXX, of in following $X.XX distributions XXXX, of XX, per be remaining $X.XX to declared as per share installments stockholders in as Board November for September be XX, will our paid equal X merger special XXXX X. The

XX payment of the dates for record earnings presentation the the can supplemental and and Slide fiscal You QX variable on find distribution more on about about distributions Slide XX. information framework dates

show believe X, it more items to of on walk the intent more quarter. the earnings detail, that P&L to Slide on financial sheet. we releveraging before before new is balance The key results which the to is impacts profile we've this the Lastly nonrecurring I core better turn GBDC the slide, normalized outlined is a a XXth and modestly analysis in Chris of the over through June impacted what

$X.XX. in on of recognized placed reversal prior interest this reduced the status quarter investments adjusted NII on share or income restructured nonaccrual First, per quarters

$X.XX the a NII nonrecurring increase share incentive associated to quarter, charges in And share expense lastly, to Second, X the ROE. these NII. adjustments time. market sum marking share $X.XX with adjusted for noncash contributed swaps. XX.X% items of noncash Again, recognized are per in The of an rate per adjusted of to an or $X.XX over results these should fee interest interest an NII adjusted net per GBDC that is additional waiver

sheet it Further, releveraging balance an the earlier, now merger to to as turn GBDC's be GBDC in impacts on deleveraging mentioned to we response more results. going tailwind. target levels detail NII Chris the I'm our would I to of X to expect provide

X the shows prior to GBDC's quarter. up $XX.XX, per bridge asset share to a per Thanks, $X.XX new increased Matt. value Slide share from net

for accounted Next, to GBDC X acquisition the was of X assets. some time walking the allocated as I GBDC spend premium Because under asset Slide was think X an rata to it's turn purchase GAAP, former treatment to important the the merger. through to pro accounting merger the

assets the GBDC merger, a down a wrote wrote loss GBDC then value As GBDC result, uses noncash assets GBDC. GBDC the X with reflect value cost of fair loss the time at experienced initial plus closing premium. Effectively, to the that accordance and immediately assets the economic former to any X in and paper a unrealized doesn't the former GBDC's GAAP GBDC to the for purchase onetime loss fair is loss, X fair that accounting, the at value. Because up of equal equaled their a This the onetime same former premium. item value their purchase premium basis recognized after acquisition fair GBDC purchase

of expect through will basis. premium Turning amortize investment income purchase flow the loans an statement purchase provides reduction over through income purchased on to NII. Slide or to we short, interest of the the illustration go-forward the how In income a life as will XX. a the This premium net

any this, will purchase the shown NII any said reduction offset corresponding reversal a in be graph. won't as net decrease income of the by unrealized result amortization having middle premium Now in as to loss, to the

amortization strip measurements of We'll net GAAP the to post-merger make premium we'll talk to continue And premerger in use consistent financial about purchase addition write-down. results with some to to compare out net of easier results, our GBDC's purchase approach measurements order income to in and income merger exclude adjusted premium. to financial the the since continue share, investment per investment to and the which the adjusted GCIC impact supplemental will

These net per share about will gain We'll adjusted realized or gain share gain adjusted loss. loss the talk write-down the unrealized and income net from net onetime the of investment and income and adjusted also or net and of from adjusted or unrealized loss and and purchase we'll talk will unrealized calculate finally, the share. both per premium on premium. realized the income which resulting and And the loss unrealized corresponding and loss per reversal about earnings adjusted amortization purchase earnings realized net exclude adjusted based net unrealized

As write-down, of depicted on premium equal unrealized GAAP net onetime the adjusted amortization X loss on is as income the anticipated net a slide, purchase investments income unrealized offset the is the this GBDC reversal to after be purchase on any corresponding to acquired. expected loss by premium

details Let's now go for June the ended of through XX, financial XXXX. the GBDC's quarter results

funds We'll Slide merger. which of billion, growth X portfolio activity billion start for Net GBDC primarily of XX, quarter-over-quarter X's GBDC origination by $X.X the $X.X driven increased the upon on our by the summarizes quarter. acquisition closing

existing by outpaced investments of merger, the impact Beyond term and the and investment fundings sales fair of net of were draw changes the commitments new investments. value exits, delayed loan

and the June improved platform quarter. deal across Golub Market-wide the in activity both XX origination Capital

end and our We has slide rate over year year. remainder reflects closing deals loans. middle selectivity X% lower investments highly continue shown X% in mix That's improve quantity. selective, on to reviewed XXXX. of to half new of Capital it the of the quality asset first X% approximately on the one-stop Golub The expect the over typical to of during our calendar of remained the predominantly remains of focus the

rate Looking XX.X%. the modestly weighted at decreased the the new bottom slide, to investments of average quarter-over-quarter on

quarter market XX% value We a overall merger. was Slide of with portfolio during borrowers. average these originations highly to amount middle disproportionate the continue Capital's to of below the XX the Golub the selective to repeat originations following be shows as GBDC loan GBDC's X on closing mix

investment XX% portfolio quarter-over-quarter represent loans consistent see, value. the can you around at type fair portfolio of the by As continuing one-stop breakdown remained with to

remains approximately an diversified Slide And size by investment GBDC's points. portfolio average with that XX highly basis company shows portfolio XX of

of largest Additionally, our XX% and portfolio, our of the largest XX single borrower portfolio. represents the just just represent top X.X% borrowers

served believers We previous big of size, will GBDC to well are which in cycles. be credit position the in has future believe important through context risk credit modulating in cycles and we continue credit

economic rate portfolio of investment consisted XX, As believe showed senior to loans changes on analysis across of XX% be June XX The some a of borrowers first-lien industries. XXXX, our Slide quarter-over-quarter. range what floating we of diversified to secured resilient

which start the Let's walk with through those in investment our detail. income We'll yield. line, dark blue is

income includes yield and amortization As discounts. fees the a investment reminder, the of

quarters the a cash as of restructured March quarter recognized to points. on basis placed sequential income interest or Consistent contributed ended compression on the has certain compared items quarter income reversing as well investments reduced XX as on with status base quarter, previously a to and interest rates, the spread GBDC's combination investment income during impact notably this the decreased nonrecurring for yield of earned XX on as nonaccrual quarter basis leveled out June of interest in recent to ended XX.X% XX, the and decrease

the consequence XXXX quarter funding cost teal and of outstanding of notes, debt, the full the line, unsecured a X. of as XXXX the of maturity a from the facilities unsecured notes of April primarily increased GBDC Our assumption

executing close, a our JPMorgan facility. reduce increasing merger we post-merger Following plan funding credit costs GBDC's utilization began on of to by low-cost

this of for the also within funding We other funding room is improvement cost year. certain balance our of structures believe over of there

with XXXX interest marking an existing XXXX rate Additionally, the we on increase to recognized notes. our swaps expense interest quarter in during and value associated fair the

recognize value the term the us a floating fund are unsecured assets, elected of swap expense. fixed and the through this to swaps fair SOFR interest the rate of floating But fair we important Hedge primarily changes and interest a is note reminder, lives rate it's any the noncash to which accounting expense company's in recent swaps. [ rate, requires over rate. note, X to value issuances, will to to As ] the our match net

a fair quarter $X.XX the expense opposite recognized increased XX, June investment swaps. the of we XXXX, interest rate interest in our share quarter value result reduction the of marking as corresponding quarter. from a noncash swaps in We income ended for our saw that So of net XX, as per down a the in value contributed to noncash $X.XX in expense March and impact per to net increase share reduction the fair on rate a income investment interest change ended interest XXXX, during

excluded these that amounts have are We the over to swap change X fair related net value interest since hedges net weighted will in calculation of debt to from rate the the our cost swaps. our the average life of noncash of

rates. represented to for GBDC the of weighted was to GBDC's these positioned X.X%. GBDC's with believe the now. well to total The declining turn collective We to Matt? over rate floor for investment sequentially exposure, floating average by interest net going I'm Matt XX% spread, line, back decrease debt funding results factors is of nearly gold

this and investment and Thanks, Slides liquidity Chris. I'll up section GBDC's XX. wrap by capacity reviewing on XX

Let's key focus Slide XX. takeaways on the on

is weighted exposure. was of of on us heard were weighted with debt X.X%. occasions, rate our XX% XXXX of a didn't you've and them debt fixed-rate X.X%. as swap average in XXXX funding form multiple The in for this floating out due quarter And coming notes. issued say coupon unsecured average notes the we Our of cost

provided our the and addressing recent strong undrawn collateralized unrestricted of notes by the our GBDC's by billion unsecured and improved $X.X revolver on with meaningfully of from our quarter remains XXXX notes of to refinancing debt revolver December risk ended notes the enhanced commitments corporate over unsecured cash, the unused, XXXX We issuances. $XXX liquidity and approximately July greatly ladder that unsecured and adviser. with liquidity the Overall, April issuance in The subsequently repaid position upon respect while were maturity matured million XXXX.

punning investment of Fitch, X access structure sector our GBDC important cost-effective of Moody's an element ratings than rated stronger BDC Fitch underpins to has more The diversification, that grade S&P. GBDC's deeper providing from for and markets. majority flexibility and Moody's and is low the cost the debt the from ratings and

David I'll closing Q&A. remarks it Now over back hand and for David? to

Thanks, Matt.

X. June about and So also had some elements, income whole the losses disappointing X quarter. great win-win-win up, merger and to the GBDC about credit quarter the XX in disappointing generation, credit including stable talked GBDC's strong talked sum great We've on the elements of We've with some trends completion the elements.

we wrap me before with Let questions. outlook our up for the open line

quarter market face with in headwinds few origination, to would We respect the and and talked about we last GBDC anticipated a spreads credit.

is view today Our largely unchanged.

of touch me each areas. briefly on Let these three

Let good me quarter. The that a pickup news start is saw M&A with we activity in origination. in the

further cautious. sense a M&A that this more is many market are possibility, later activity outlook That's our a expecting is recovery Our participants in but year.

hopes deal think We modulated off and sellers sales back processes in stay likely of cases in in think getting levels. choose second activity to political We takes uncertainty. the to falling normal half. and We to until volumes to see interest are to hold it XXXX many think is going less economic rates on probably

the lower in saw compression transactions. quarter market Let's of spreads. a and first the striking many translated syndicated second calendar this spreads in into on spread of to deals new broadly XXXX, shift loan the headwind, combination existing now second The repricings half and of

the XX beginning in market to Overall segment fewer year large The has the segment to immune In the that tightening stabilization. has basis market The borrower-friendly the strategy spread week's since seems stabilizing, traditional more points. in middle seen spread activities. but market, syndicated compression this and in recent compression add of in dynamic large refinancing and market was the of the focus be the executions. than volatility may to range spread and lenders where XXX direct the our to much been with compete hasn't our market, market been broadly large weeks, less repricings market pronounced

let's our outlook credit. for Finally, talk about

broadly we the to last both credit credit For market private and X have about the market. stress see we've expecting syndicated the years, how talked more in been

credit. in While the see it the parts is both default private you market higher higher rates syndicated credit of visible, and broadly can stress in in

expect never credit evenly. this in been shows Now certain will certain and been in up sectors more seeing seeing of We've I respect trend we've continue, stress and -- managers. issues

We expect this continue. dispersion and results to

well headwinds see. coming favorable to to sum to we we to period, dispersion expect positioned GBDC expect on that up, the the manager continue spectrum end some and believe very is see to in we to of continue So be the

we We benefits received that, to poised overwhelming durable its that is low to the strong we merger and support please fees going diversified deliver the it's its believe for structure. forward. to for appreciate With its line We of post-merger, liability from the questions. the delivering thanks resilient structure, GBDC best-in-class earnings, very shareholders, forward look portfolio, expected and merger the nonaccruals GBDC open and

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

everything about getting on I Congrats market mean first volatility. the done. David, question,

the near-term go enable stabilize. spreads start actually you and private to on need to -- volatility might market widen how You said what to spreads would At long volatility would BSL again? point such before think

is about So because assess hard underlying make great to generalizations now that from started that question, valuations to Friday the an continued conditions today. some have in Jobs sector. the time markets, real some data some sense public in that on increased My [indiscernible] emotional high of view causes tech particularly the Monday, Robert. reflects the trying that in in weakness reversed are recent on Report, came all standpoint gotten right volatility we're the this out, Market own very market too economic

told going good where beat I had have where market lying near to a on I good volatility I'd -- the you that head in I But if the that. on don't be are beat market term. a prices

of broadly be what syndicated syndicated decreases basis liabilities prices over cost say of average would basis last few market point. broadly X marked points. I'd typical We've in We XX we changes Here's markets. a bond securitization about of seen the about loan that know. in seen, for the has on course CLO, the know funds days, a

take spread desirability been the course private the of we've of private days causing of some difficult few to this land, few that that's through But know most over weeks? of sustain is the very Will is to the all is I rethinking credit seen or take My gauge. now. the the or credit reducing some steam may even weakness right it's some the those flow receptive own in compression to next think the that that market. changes parties private real the time, and difficult out of in Robert, of in months last spreads and to have some

Yes. credit, flagged BDC Understood. very of the last that We I On it widely time. It's real the coming. mean, quarter all Pluralsight is most ever over probably in assets space. we've the seen one problem was knew

you So Pluralsight about unrestricted subs, because widespread in of to all transfers, concerned of it's loan structure of mean portfolio we though, about that point? for Broadly, it, proportion similar some that at of the portfolio, surprise. Pluralsight like the documentation asset less however, your know kind has in is loan about that. no these structures, allowed, structures, things to [indiscernible] think what the example, of how it I is kind structure that want this

or perspective Pluralsight it's as a of misbehaving sponsor gotten, question. I it press rest view So do example a the a not Pluralsight do the to documentation. give answer I a sponsored before despite misusing just I some of want I of not that good your view on

very have credits in we've with fact, and Vista, this ever I think we what few of that very sponsor, problem a Vista. In Vista had instance, highly as

operators. they're think good very I

with purposes loan discussions make lenders lenders. other and not This negotiations is decision about management how order they in was is more to to of for ran longer-term an were solution This interest the make pursue and a violence. any not interest to paying much paying before more out by arranged in Vista transaction. they And What than about payment. time boring a is of a that lender and needing time, that. to payment a provided they create Vista of This liability did

amount a subsidiary terms It's What points: Many documentation that relatively private land syndicated two to insulated insulated borrowings. certain loans of and the credit liability provide relatively are market permit the in or norms. of transactions the makes key baskets pari-passu from credit not large management private market level broadly and incentives compared uncommon. market

I each Incentives. do these? by What mean of

of and they see small management that garnered have private of press transactions, against another syndicated one a of one to lot pit a group the in So broadly in lenders lot a attention, Most number transactions lenders. garnered the credit tends lenders. of relatively liability group of of market

If you have a the to non-pool easier lenders cool against club. kids large it's pit group a much club create and in kids club mix, cool kids that a of

very have where credit you land, much syndicates affect it's private to In are that small, harder that.

they credit have key market do. fair success to is When second dealing credit including, The market, sponsors private in parties in criteria of other. with And each one any market, strong the the behavior I There about well functioning, and both in and other. is the norms are a when norms. particular, have talk commitment private with lenders relationships the

would So and a the terms destructive norms a it disadvantageous a consequence and violation to of of an key to business. it with norms, of credit enormous would companies in be that of their sponsor one documentation manner again, have a private lenders relationship whom use as in be they be do would lot one of

So a private and in we've underlies lender I terms lender issue examples violence don't so few credit. why that documentation think it's of seen

has and think do norms. to I it with incentives

from next question Wells Fargo. O'Shea, Finian comes Our

of common higher for where be to rest of struggling looking may company. then, we're keep is like but of more sponsor the course, put from they a sponsor money with companies is not piecing to Pluralsight's for the in together, I supporting been up? here stopped there, it And the book, for guess rates, up moment and payments that the where specifics, the set just -- sounded everything interest lot sticking had like a it how but seems Pluralsight we are needing interest

I'd say flow that's the cash positive they're in the interest Of not quite doing after uncommon, well. that's expense. well, portion Fin. doing Most still companies portfolio are

a need being group for a it's we where there relatively continued anticipate So sponsor support. small would

-- helpful. be leverage. That's that a was coming commentary It follow-up some the And on will on sounds back like up. just Okay. there

sounding if things on second color with of So releveraging are and how that And how thinking into part, perhaps you level like we're out able spread tight seeing busier provide soon? environment? are they're to you a there, and have visibility getting the a of qualitatively, benefit sort about very what leverage on

GBDC running So equity, we're But highlights about I balance issues debt we're new from your to to X.XXx attractive that grow a the committing Right higher a is good sheet. now. exactly there for a that leverage to determine is where which bit to we're to there right are we're now. unless rush think thinking or now, target that thinking wild out question not going opportunities that the about a we than X.XXx that loan merit get standpoint be

as a of now, QX. right not we're remarks, seeing from in continuity So QX surge deal trend dramatic I mentioned seeing a in activity. prepared We're our and

GBDC So quality. we're course have to of going at we're the not leverage the to going the expense going period, to time, be increase at picky, take over and to our and aim coming of we're

from next Our Instructions] of comes Paul question KBW. Johnson [Operator

quarter, was to motivation kind trying if of to just just your the What pressure? restructuring was Imperial a the waivers was [indiscernible] of action Whether Optical of the just this was get more that part? of voluntary fee the that? or kind was during this related on wondering, entirely kind your I some quarter it behind of of idea

for your Thanks question. Sure.

a It's different tradition Golub managers. other at Capital. many very from long have we So

periodically waving We have a of fees. long tradition

is ordinary. at this entirely So voluntary. It was not the

appropriate it there waive it thought of noise, context view incentive of of in a quarter was in the to amount at the when we noise onetime and totality we significant the the fee. Our was was looked onetime its

that as I sure have a taking is think investors view and for that positive that good our making is everybody. view long-term our manager experience a

over like of now waiting don't still final for come As now, some questions pending David We for any Golub hand I'd Instructions] remarks. as in. right moment. to we the have of back questions to are to [Operator

Great. Thank joining for today. us you all

reporting to any questions, back you reach time, if to have all us please to quarter. look you we of and always, next free As forward further to out at feel

for call. you Thank so attending much today's

disconnect. wonderful day. now may a Have You