New Mountain Finance (NMFC) 6 Aug 202020 Q2 Earnings call transcript

Good morning and welcome to the New Mountain Finance Corporation Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rob Hamwee, CEO. Please go ahead.

Thank you, and good morning everyone, and welcome to New Mountain Finance Corporation’s Second Quarter Earnings Call for 2020.

NMFC. me John are of Kline, Shiraz CFO with Member Weinstein, NMFC line Kajee, NMFC, of President of the here Adam today Board and On and COO

join Our the us Chairman, future calls. is Steve unable on call but will Klinsky today rejoin to

to into is continue We taking community, human on through diving a that in update, the across do health is staying you everyone good that families our and that globe. business significant hope want Before a around our recognize public to we and we health. live that the your country crisis toll safe and remain

regarding to business, call. remarks, like introductory does, Turning some I’d Weinstein statements Adam to ask to make today’s make before to he going but Shiraz is important some

Good morning Rob. everyone. Thanks,

earnings of I’d forward-looking in obtain We regarding to statements. safe release. those or our include may to give August actual projections. Today’s highlights referencing get projections our release in and Mountain latest presentation, SEC call required do harbor and by X, everyone time, Page Page any the to the our to beginning who for www.newmountainfinance.com. press will attention broadcast X call and factors recorded. cause important of we replay Please and presentation in Adam of like to our results into website will access available at is about the to Adam? call update undertake webcast unless the presentation we of like are Finance law. this recent disclosure I strictly some would to slide form customary At on projections SEC and and New they webcast be slide audio press the the this to call your slide from our materially this X is would also the that ask property to are over filings most call advise conference and To I to of forward-looking Corporation note like being our prohibited. today’s Information not that that forward-looking unauthorized you copies Before filings statements turn refer any Weinstein, presentation. that with please we differ call, throughout visit the that and on could statements statements

pandemic I and fellow as great to Thanks, join The human to you Manager a and next and in as today Shiraz. both for shareholder. this to the and nation you want economic COVID he’s NMFC crisis he of are our of terms. hopes Steve unable great be Rob speak that It’s of will the return all has call. as call all the said, your families to able on express caused apologizes safe. a quarterly both to

Second, throughout I explain want is and overview itself to period. secure Page and this the working to X how stay summarize safe charts to X on NMFC

has emphasized safety well risk therefore growth that survive upside as to defensive organization Mountain unexpected has market emphasize saw New and returns always best control downturns. explicitly industries can as as downside and an

missed public in of gains dividends PE, of Meanwhile, New credit of paid Risk NMFC today assets private had of private million has history went of $XX arm in just cash dividends an in we’ve a rate billion equity mission. or all. losses in per the our credit. now Mountain a on beginning equity significant default both we’ve had of years of ago control billion $X private private company payment only both as started we’ve portfolio a for equity bankruptcy XXXX and and manages our have X.X% interest Happily, about bought since over million was total Similarly, including with loss nearly total equity had never we $XXX XXXX. in realized XX debt and $XX.XX effort. since $XX NMFC credit. share our of heart founding or

As industry our in belief credit or the investment private that you. greatest mistakes beneath come when melts is equity general managers, the

as We have such investments, of understand mind saw our hit. on years such are that in tech-enabled NMFC by areas avoid of defensive process I repetitive, industry The dive industries being bulk laser software. the believe to described, services that focused well. risk sectors identify the in with where was COVID in great and NMFC’s as business and we of built advance growth might sector we long proactively loans enterprise dynamics control before mistakes making deep study be so best

of per anticipate their XXXX been discussed dividend higher share asset X difficult often let has dental ones paid share QX. Benevis Every of in quarter’s per have we me paid our interest in net bases types for in company, non-accrual additional non-accrual. on for report. service client to particularly on management repeat going and right $X.XX on per borrower large QX, placed day we the last share. companies defensive June which investment call Adjusted second the who and all companies of covering XXXX. in and dividend cash their We on XXXX share the Only growth With of per one background, These this guidance XXXX in specifics installed our $X.XX of regular $X.XX and The June on the are practice end quarter Slide that was at was currently users of attractive think other the fully day depend of any times. portfolio out. of are times QX, XX. industries earnings $X.XX turn $X.XX to income ended do that XX, new Our not

was trends company Interest valuations in XX, per spread regular the needs. driven XX, June the from wide. the asset again value to primarily March move-ins $X.XX net stable strong was NAV XXXX per of economy $XXX XXXX approximately and book at an share credit have we in set per for as $XX.XX The overall. increase Notably, value rate of cash of Our share. XX, September by $XX.XX on share as change remains currently dividend record million liquidity and available NMFC’s to handle payable holders and per position future QX, share XX. of September will was liquidity $X.XX immediately of portfolio be

with strong continue be Manager necessary the support no we to the as become highly and if conclusion, Mountain NMFC. sheet largest including and In Mountain a call to of way want further company COVID of Steve remain the withstand shareholder XX%. approximately the of With that, balance it I other in our said, that turn to future and crisis New about and to of has of significant supportive to NMFC been in own has crisis. a NMFC. New resources a portfolio I work prospects. was ownership members minimize me that did the Rob NMFC’s competitive and let CEO With the Hamwee, proud we back team hopeful carefully building advantages to credit remain

Thank Adam. you,

value migration, crisis’ focus While quarter, leverage key Once NMFC impact quarterly income. again, of into X asset more on and quality, the highlights net X like and detail would Pages liquidity getting our standard this investment and time and asset on on net my to on are I review respectively. detailed

company quarter. assess borrowers generate both the and throughout detailed crisis how is each overall Based had portfolio risk impacting we As We’ve on on our order in our the to we scores rating. conversations discussions to those Page sponsors. with management the two have extensive X, metrics updated companies on use

directly COVID metric ranks first has exposure been four, the reminder, which a to As one from by the impacted COVID. degree a company to

overall migration rank of of Pre-COVID rankings to The on plotted sheet a to support scale each metrics strength three We utilization One pre-COVID levels. primary changes ratings to A metric, significant assets risk the rating. C. XX% Page second assets retail million liquidity heat maps. XX% a in million these have Based positive we is on companies, balance of the company combination X. and for and the summarized our business which sponsor at heat portfolio and driver strength accordingly only of rating now improved $XX sub-metrics. running of rating largely where has the as that of risk maps resulting while worsened is their The reopening the on $XXX updated been risk of again overall our average company. once create two have for show portfolio is healthcare performance, generally

are the driver weakness primarily and large provider ongoing recoveries at Another leading of Offsetting shown assets degree seen X% shown portfolio benefit have updated momentum have increased environment. small from XX% one which to XX. heat on this Overall Risk XX% a UniTek current Page a migration X%. itself details distant total is to credit the and as induced in is assets services our COVID and is and name. learning and XX of Page has from map decreased red the software hospitality some green on the to

significant to we majority in while pay what economic valuations as to if to As healthcare, and well the tech-enabled no of are to market the in of dramatic underlying orange we and spread clearly green driven Even should heat QX. perform see we to given assessment the value, $XX normalizes. yield asset QX, company attempts temporary coming our a the recovery remained decline continue in our health potential are another pay believe our the landscape movement million those current Page rated $X.XX driven significant software. $XX We In principal. loans recovered is, services and interest and portfolios not sectors strong credit are positioned yellow to our quarters degree to risk expect from towards elevated. public of largely net in and would XX witnessed price believe we in comparable describe correct you NAV world developed. sensitive by a biased is representing problems. red decline map, full and in can Business movement the matter million federal recover assets very risks as continue like securities which continue how

Finally, UniTek value securities, of and Benevis. change of off in million in the bulk the is value remaining Edmentum, change restructured roughly $XX the

Edmentum to significant turn this to had COVID path Page for particularly is ratio $XXX remains of towards down but by is primary value a asset the risk, UniTek. was of As recovery. leverage $XXX also was from have induced sales million driver which X.XX and largely continues statutory risk our down bringing move pay performing lenders There’s X.XX. elevated shows to Benevis million quickly we’ve success XX a repayments. of well. our debt while COVID driven and The in recovering

source I environment. the average these an prize able realize also the our of asset base, draws despite note, credit that and a on the volatile to we repayments and as disposals revolver a quality back market a dollar modest the had were use cash of majority acquisition late companies revolver of activity of ongoing $X.XX well would strong exceeded was was on any cash Given of our performance high number the positioned restarted we of portfolio of activity as activity. draw

to quarter debt. balance we lenders, a Finally, net ended if down million. repayment was $XX beyond to our the balance the On cash significant of sheet a pay cash this debt with applied further basis,

Our be statutory would times. X.XX ratio pro forma leverage

net our While or enterprise leverage, QX $X.XX current gives crisis to while million it we or $XX to long of million $X.XX share. has NII crisis, preserving last. our maximize per to the may QX, and our throughout income per our bridge a safety also from in investment priority Page net however first to want assets, $XX on this XX focus been continue liquidity share investment income of

rest deleveraging impact fees. decrease quarter and see offsetting quarter primarily lower this million and generally You rate and $X is can changes gross the of the Only SG&A in from Benevis, of while the in Permian the last prior function off UniTek NII activity. $X that non-accruals lower million and to is

to While base deleveraging the we remain of into lower expect quarter headwinds and full impact rate QX.

I’ll turn a other and of John quarter support ability NII the and forward generate With approximately We’re our confident elements $X.XX John? it to conditions of per market over dramatic going change to business. conditions market to discuss that, Kline dividend. in the absent to

Since Thanks continued conditions last call improve. our Rob. to market have materially

sluggish. While be direct lending to deal flow continues

the core technology healthcare growth of in in sub-investment credit nearly software, have returned as our services. true to such markets levels. enabled This business levels technology particularly trading Secondary grade is defensive and many broader sectors pre-COVID

risk and the the to assets liquidity from the While it’s hard expectation explain system, all that for entirely base clearly tremendous the benefitting strength the Federal is more zero. fact, market rate Reserve are almost in support

the and remain yield activities. issue like risk-free predicated believe flow, resumption new uncertain places more remains deal yield backed normal obvious lending of deals classes decrease and over new and a loans rate. asset sponsor rates syndicated business regard Given infection factors we these broadly direct somewhat to high With timing of is receive the on to a and enhanced

Turning to how Page impact earnings. show changes could potential future in NMFC’s XX, the we base rate

you As are XX as with can in assets three months of see floating since our call today. As instruments? the basis points rate majority May, fixed XXth evenly points LIBOR our split and XX basis basis vast declined it has of rate liabilities and XX last was floating between approximately our points then June to of loans

NMFC business XX% this has floors of our While decline has assets. from for on in its headwind XXXX, benefitted LIBOR earnings X% been in

XX decreases. of rate side of on Page billion Given rates Conversely, negligible fair $X.X power historical the are which are credit NMFC left current value. today investments the from could page show rise if where of further is overtime state the improve. non-accrual. earnings of $XX we portfolio where of addresses performance about million we have materially the rates there downside at

This loan added term $XX.X Benevis was as mentioned value. of million a representing fair non-accrual of our quarter portion earlier to

of losses non-accruals list The shows million been become of we Off of become million non-accrual. with right have have on migrating credit that we $XX represent billion side to losses. investments, about cost. million that $XXX million have have cumulative of placed NMFC’s not amount across $X $XXX watch that performance the which inception nearly credit non-accruals On realized show page, the $XXX our since total that only

of these be equity able of ongoing have on private XX do the our material achieve recoveries of to assets. troubled take We some of permanently relative is impaired. Page a group on names to some While optimism EBITDA. overtime, that of based risk becoming with actions cases, Company to have view underlying performance credit LTM leverage and, our these in we’ll credit gains support Portfolio

exhibiting see can months chart internal CE recent strategic UniTek, in that continues with are There underperformed top shown due including performance our on various company is of three income The of these positions have operational always you Page investment than names in more the consistent Edmentum acquisitions. decreases. drift; cases, our overall four sponsor economic regular At The very negative covered is Benevis CE, comments. quarterly our which the very has leverage receive leverage that a challenges, over that turns business leverage XX, services and still tracks the page, have names minor since dividend. fourth Rob’s either majority past projections and has its company X.X name the that underwriting of IPO. As of is benefitted support or to were marketing show XX performance net company’s to has increases many and from management upgrades the covered we our

on focus the the of we line On half page, the below lower items.

gains realized losses. credit and at First, realized we other look and

We’ve in gains, combination gains economic dividends success row generating through a portfolio every trading of As year can and highlighted see equity looking had company profits. green. you at real

is page, the related the down balance now $X.X chart we’ve deleveraging shows $XX.X realized crystallized which losses sheet section in $XX.X orange realized year-to-date program QX. which of additional the losses of just to million, of In were of million million experienced our QX, Moving complete.

activity, losses years over result as a largely As since long-term blue credit realized to company. cumulative nearly incur now inception public with power avoid we we on while of we do which throughout realized portfolio, gains historically the $XX.X our our to have a investment to in have our expect this in we XX million accomplished highlighted just everything we of losses offset net do them, realized hope

presentation. million Looking impact further the last a downs in since net to discussed unrealized improvement in positive portfolio by $XX of earlier that page, represents million cumulative down mark realized from and million material the number change unrealized in and $XXX portfolio This compared yellow. we the losses our bottom-line inception quarter the show March we of driven of $XXX highlighted

most since loss time. will the reflective cumulative temporary conditions Page believe in of stock We detailing a NMFC’s of IPO. continue that and XX, unrealized recover performance marketing presents to chart is

While to historically dividend very compared our quarterly our performance of has been the of relevant inclusive strong stock benchmarks.

look have. at we five public BDC’s long Over has at that index stock stock our XX months, performers we’ve remains had provides that the performance price the our Page strong the been as stocks the NMFC’s certain soft have past Still to relative final followed as a since benchmarks. least of individual IPO. track to record index yield and of versus the overall high peers compared our

going While our remain this we performance performance seek of this a that we forward, to cohort top competitors. improve chart among shows

return Finally, inception we total Page XX. attribution since down break on NMFC’s

been has far-right We’re of been has share Offsetting IPO. most the cash $XX.XX has per to show of in core which per contraction in share We lending multiple defensive book the related portfolio. income side $X.XX decline decline share price $X.XX page. creation the of in consistent our this our distributions growth-oriented from and the performance of per that dividend the to our by value since supported of our book XXXX occurred value

and both has underperformance believe that prospects we consistent while in dividend. improve NMFC good to mentioned a areas we’ve As of compelling maintaining

sales a supported our to which Turning Page on our XX, repayments detailed activity schedule post-COVID tracker investment we the plan. of and show deleveraging

positions of even to or see, are number can crisis. height par during able we exit at As of the around you a the

million of an of COVID price two we portfolio high repay of cash In the result during exiting a quality $XX.X. $XXX had our M&A we average in companies of assets as Additionally, raised resistant aggregate, quarter.

of issued million funding shows On breakouts overall our the supporting originate we this which portfolio the we diversity insight clients. our did exits, and healthcare industry by recession-resistant populated Page with quality reflective NMFC’s $XX The Overall, a diverse chart group believe more safety right delay exposure defensive pie of center our several exposure. of that consisting is charts M&A give assets loans, into of verticals. initiative primarily industry quarter draw businesses. within of the detailed of while for the and XX, success the highlighted of left While we deleveraging highly is by have the was on our and of services

have successfully most As we and of most advantaged high US you see, nearly maintaining economy. to within the defensive exposure structurally sectors can while avoided troubled the all sectors the

page, lower the the continues XX% that degree invested high portfolio of of exposure our in with half of On have we portfolio to show oriented assets. senior nearly the first a lien

Additionally, beginning shown presentation. ratings of the match maps breakout a present we that of at risk heat the our

Finally for Shiraz largest with over it turn single and as a fair on of financials have at key portfolio statement name XX, Page accounting the XX.X% investment and illustrated value our now diversified to financial Kajee metrics, the our I’ll With discuss that Shiraz? value. to XX X.X% investments of top fair we CFO,

John. you, Thank

For our financial that refer with XX-Q Please the to SEC. commentary. today’s and was more filed details Form on results the last evening

like at value of total portfolio billion billion. XXXX I assets $X.X had in to XX. fair investments Now June at Slide would The $X.X XX, to attention your turn over and

the at debentures. $XX.XX of prior per of Net million guaranteed which liability billion SBA $X.XX quarter. share $X.X of billion total drawn $X.X billion asset $XXX debt value total was from statutory outstanding up was or have $X.X excluding We

have and pro we quarterly can statement appropriate quarterly our cumulative volatile realized XX, our losses impact XX, historical ratio below ratio sheet. in mentioned $XX The income ratios This historical June was Slide of believe most net and would performance. On balance and while the that statutory special we results. debt-to-equity our X.XX:X NII for as On unrealized NAV in our million measure our the XX, and been of highlights of line. share the Slide share As leverage X.XX:X. We leverage is cash forma our of adjusted Rob the that dividends. slide gains be

continue We the income generate stable to line. above net investment

income of income this non-accruals. prior decrease decrease was the million and of less quarter. lower service debt expenses on less Focusing earned result of due $X $XX.X million million, assets net outstanding. approximately XX, investment rates of to rates base from the a and only sales, debt Total $X were XXXX. cost to We decrease from a June million million, was total $XX.X $X.X fee and quarter lower lower $X.X ended decrease a primarily a the base million due

regularly fees. was in quarters, continues results million advisor quarter the As management high in the $XX.X quarter NII cannot second annualized our guidance end This The investment important $X.XX at recoup per that to fees our previously the advisor prior fee or $X.XX which share. investment to waived. It weighted management certain is covered waive QX X.XX%. and share of adjusted this note per of of is dividend effective

We As GAAP prior on rebate negative the write-off impact incentive to earlier, $X.X Services to energy to Rob for the interest weighted continued offset for fee $X additional years. bringing accrued share per due million our This share. touched an took Permian. was for COVID $X.XX income NII Company, million quarter in PIK by

result XX June in of and income $XX XXXX our million. in in cash. an unrealized operations quarter, predominantly increase from quarter recurring Slide net investment with demonstrates nature the total XX, ended net a in assets the the resulting is As for appreciation of paid

and see this comes can we’re We of predictability income. in at this of XX% cash recurring and believe shows total income our consistency investment you income XX% of quarter. As investment stability the

earlier. as discussed XX, Slide to Turning

quarter for will estimates NII Based QX, $X.XX Our be NII on the expect our approximately QX share. our per dividend. we second covered preliminary XXXX

record on $X.X a $X.XX on have of borrowing into SBA we we Given quarter various at that our dividend guaranteed to financing sources. Slide QX, holders On XX, total has declared Directors our September XXXX. Taking per capacity highlight XXXX XX, be billion end. of will debentures, Board share XX, almost which XXXX September of paid accounts of

we performance businesses credit are that and given a of tied As to time. the facilities reminder, than covenants for at lent you, Fargo any rather [indiscernible] the Bank both the operating investments Wells Deutsche our underlying generally

schedule. Finally, a maturity on leverage show we Slide XX

debt diversified we’ve As our to been liquidity. manage our better successful We’ve at issuance. laddering maturities

near one address are over back multiple have Rob. avenues maturity With to to I that, evaluating turn to would in call manner. term We maturity most the that like in May and the efficient XXXX

the closing, remain and Thanks we about prospects Shiraz. years cautiously months in the NMFC ahead. optimistic In for

lending longstanding to businesses growth environment on should strong the defensive well uncertain quarters. focus [ph] supported by to Our us sponsors characterize upcoming likely deserve in

times. Wish these the will risks operator? good I are all discount an days well than is and continued our back environment. the in we in While our support of with more We dialog more open forward and look and difficult health and unequivocally things scenarios. the believe for elevated to ahead. once challenging We now your you stakeholders past again operator model Q&A. to cannot to suited you interest with in the current maintaining begin all turn transparent thank

first [Operator National Please ahead. Rowe go comes Instructions] the Securities. question with from Bryce

here. made the about to executed deleveraging plan wanted possibly being of some been having finished comments and you the ask kind about I

curious, just So speak to level of changes in unsecured. to you’re thoughts of of structure you plan kind this if on maybe debt net then BDC secured here forward. leverage considering the any at any if and versus And terms going capital operate the

Just Thanks. we move flexibility forward to give as you more here.

for Yes, sure.

if environment of continue to time -- things this monitoring a low the we So available that. to modulate we’re comfortable than that sort develop. see in makes XXX’s still although how function We in, to at natural continue we’re lower be of repayments that we point sense And path the right of it net in generally can us. it’s certainly as to come have

crisis what values it’s sort But values And obviously continue capital as safety, little definitely just have, returns the yes, of of the we to of leverage we again a where of to other I and react to between similarly the flexibility probably some of continue bit capital. the we’ll as drive, we’re the the we’re we’re the now the normalized trade-offs more think pretty I to make So forms unsecured mix, we are. of continue forms equation had we the and dynamic feeling have to with appreciate versus But on world to really of cost decisions. we part we’re right good and tracking event of warrants. with asset and But also maximum that’s going terms we’ll lower equation a leverage that make err a again, that until the secured sure those about good pretty at that being of environment. to flexibility the evolves, working secured. experience in certainly the and then environment our a comes evaluating mean lenders. different incremental And monitor leverage But different through side

that going to to try to Is get the we’re So right Bryce? balance. helpful,

is. question. one have unrelated I It more

the to In balance at looking Just continue it payable fee go up. liability fee the sheet. side, appears the management and the incentive

relative to in those advisor? do curious to maybe that. fees point get thinking So paid At about what cash liquidity you’re how the just

mean have $XXX on a did the those know - so and we comfort first fees based of we over liquidity quarter you Yes, our visibility. we liquidity I some and about of pay talked million

which some in see quarters’ paid and it’s as buffer next you’ll we as that a can way it’s just But results. another use we make position comfortable continue that the BDC those manager quarter possible. liquidity sure post to of the just liquidity to support So the

appreciate I’m the that. market helpful. that’s sure participants Great,

Rob. comment the appreciate So

Yes, absolutely. you. Thank

The Wells from Finian ahead. Please Fargo. go next comes question O’Shea with

working up the leverage expected being you’re now April, slide negative still would financials assuming very all The across you given the I on portfolio. migration have it, through May to us helpful. always provide

putting leverage in something money did else? how improve the So for or about reflect half Does names? that the sponsors

The leverage to is beginning migration from of present. loan

quarter last improvement, just not see quarter. if you when So to this

just the services and crisis generate the lot increase that’s to when of So of the some and going names. it’s then decrease [ph] debt software healthcare they’re loan because business earnings on. what’s continued either or these positioned cash have part And businesses un-impacted improvement to of that’s actually positively the was other their part enterprise throughout the and many is, and so from extended of

combination those a two of it’s things. So

Thank dumb you. was question. I it a knew

It was not.

million liquidity think your that base? XX July portfolio Does mentioned of does slide. sales plus You the borrowing an to cash that’s reflect as $XXX that reflect additional according I or

immediately reflects revolver. the available that plus cash Yes the on

that’s So their credit immediately maximum facility per obviously borrowings the inclusive available liquidity. of not It’s excess sizes. that

it really, of lot incremental disposals. So does post-quarter it reflect a and not

mean I the that. revolver all or facilities? the revolving you Do the advisor of if revolver Sorry by missed

All but all advisor of revolver including available the facilities. again immediately available availability of revolver revolver the the

shy banks, looks the from logical stricter cutting a the assets base Okay. in the meaningfully far so are framework borrowing your or a of And is banks like the that’s question That’s availability? hair way the available it valuing much of is the next reflection The they yes, helpful. this your commitments. for

It’s historically that. just than commitment with - always to of the we’ve run don’t fill right not bucket asset because have been more we’ve sort we It’s really growing.

So call just could top We we we availability cash any of change to on generate have if without asset. it But incremental all makes the the some we commitments, would that sense. really reflects for incremental that, base that if base. borrowing borrowing tomorrow that that, bought

facility? the does do. profile it final final question Does and does breakout provide maturity Yes revolving the you on debt reflect the the of period that or you maturity, the

It of the the final reflects maturity facilities.

period? I your it revolving then safe years your are that, mean to out. revolving they’re all about X.X is that So short? say periods pretty Does two, mean

coming right, before up revolver not which the Wells far the pretty around end expansion year big and surprisingly in along of in we’re this facility. period that facility. facility conversion major is is the The and Yes

you Thank all providing me. from you’ve the all That’s color for again been COVID throughout great. the environment. of Okay,

we’ll But it. you speak appreciate soon. to going We’re to

next the Instructions] is go question KBW. with Ryan ahead. Lynch Please [Operator from

want but call, think last reiterate I just it to said I again. I

think the COVID the one of portfolio, guys you the there best guys and out deck there. you in much kind so slide regarding your provide very that that I is provide detail detail movements appreciate

Great, happy to hear. Thanks.

did question quarter-to-date I I third I maybe then have didn’t quarter. the a though activity for And this. the see and missed

originations I or provide you could don’t that. if sales on an of But the guys that the quarter. think update I provide missed quarter-to-date, not. third know kind you and repayments for usually I

We it. get can we minimis. page was numbers, look we it because you the it deck on it there but those have if is don’t We was and nothing like, had de a in

So de beginning the we been of quarter. activity third it out. the just through has took But minimis

it’s the Rob draws then on we quarter. detailed John; because didn’t the a our that originations. Page support didn’t repayments nature sponsor we the generally at because there delayed break out XX clients. the actually bunch of is of I mentioned and of the bottom This was We it But showed we as on sales of as unique said,

it the We at right. activity, millions we In out. took it But was question I and around QX, think QX-to-date. so single-digit was just of that looked

interest needed through Okay, the non-recurring you incentive that’s helpful. I through of to to. Can the me in walk then walk fee and again of And expect nature It’s that exactly million adjustment $X.X adjustment and you adjustments the made the related all can do those Permian. third you me exactly occur to that adjustment quarter? you

the were I’m accrual accruing in up, missing with got which goes income if Permian periods obviously think you years. all of Shiraz and be markets we couple And not screwed that to the in restructuring years. a post the we but last prior point, some energy I at jump original We where to effectively the I in, first then for can deemed back in of back go can some this anything. if uncollectible. Permian year But Yes, - right so crack take it

quarter. $X in written on this $XXX,XXX We because We period. refunded wrote how of in So we’ve And this adjustments off, collected so right periods we end. fees. incentive XX% historically income because it in It’s the the to Page it incentive accrued NII. rate, XX. you of the because million million was earn in off it that net quarter, reflect at on we didn’t $X.X fees million them the prior $X quarter always We that’s incentive we then chart prior get cumulative, this in in those those our fees track actual not

the where Ryan? stripped Does that cumulative income retrospectively. that period So out, reflects NII is make sense, adjusted the

you what operating earn Yes, earnings? earnings in of the is is to so, $X.XX that $X.XX so reflective those is - from to reversals. When if you an operating guidance expect guys I guys continue think expected adjusted that guidance that provide there,

have write change we now months. earnings I sitting we here or quarters announcement. know like prior do would the three can expect quarter although don’t obviously three that if we put not into period things any you today would is, it months next two, and we say But yes, did, expect downs. in So next the next between change But reversals. incremental two in historical can this right But things now

the mentioned one it. Okay, And Benevis. then non-accrual got you

or and philosophy were things Although provide just What your quarter? to little it or willing that additional many improving hope as seems any quarter? providing actually make Can of those get to quarter. them skews bit for in them or modifications? [ph] capital Were you to modifications this far through guys this guys how the modifications to structures what what in talk you loan amendments those, modifications a sponsor level this to the is occurred order those order made there as are in provide like was

with a and handful wouldn’t can in Obviously sure Page they’re And the compliance it’s the we not that on their map so - Benevis of they’re because necessarily had really full a of covenants only see need map do to -- majority paying, of heat call Yes modifications obliviously was etc. I kind sort XX. restructuring a modifications significant you modification.

that’s a healthcare relief some there. product modification upper was some will a Hospitality map in result was of starting education retail covenant picking. interest relief still restructuring. But in the the some modification Where there few put negotiation. group we fees. and earned in you’re working quarter that and extra interest exchange on did that management quarters and this and covenant capital the up a name XX there, continued full there. corner. The a just If The the Permian at getting looking some heat there we’re right-hand obviously and Page fees modification that’s in still will gave the for sponsor and through completed lending and we’re be incremental that

talk retail some Moving relief that’s the there did the work this highlighted put is will provided other modification into some to capital working sponsor services pretty about there this much come through where fresh healthcare in. effect quarter there we’re the Benevis. name, fresh business The also orange, a was that there, the quarter. marketing modifications UniTek probably modification on sponsor and in money it. where put some

looks And what so that hopefully a that of gives like. sense

Yes, guys you well provide the again slide deck. significant in the thanks. extremely detail is color. as I That all the provided call on appreciate you your as And helpful color

the appreciate I So content.

from question with ahead. George Deutsche Bahamondes Bank. Please go comes next The

clarity Wondering if you some could help upcoming provide maturity. around

So know have unfunded you commitments. I of roughly million [ph] $XXX

You what referenced covered of with million $XXX like roughly you liquidity, it that’s have. seems so

months better the a get do XX sense come you expect to curious maybe kind to over the and portfolio. what of next of mature Just on

On side. the asset

Correct.

have Yes, of things are the do, number for most that part. so a we coming but

come early sold the repayments whether from the Our gets or transaction. activity does the sponsor refinancing company

don’t number a in actually we’ve obviously got expect And that down of we matures option actually path then that. that XXXX the then occur. on And quarter. we’re one of pretty we that following are So out visibility maturities for refi I or couple obviously on the the a $XX quarter either million some most XXXX, fingertips. in the those that side, my to to mentioned and close this there exact path at figuring Shiraz the liability efficient far number have have note

one I amendments credit Great. asked. We someone guess just the looking performance the next had a question at Slide on XX.

that, maybe give these of of of significantly of see the I’d fees if did elevated kind that? kind of are how of the a of dots what can you kind they’re just or few up that getting you sort this leverage underwritten. benefits do a level, see that kind within some me you were when some or you these sort when of kind purchased, they have of maybe around you’re in covenants think focusing from these what covenants some there’s sense and they breakthrough that [indiscernible] whatever about get from of and of imagine when are fairly You doing wondering

good it’s question. Yes, a

So have those The turns, covenant typically if covenant because been by up yet appropriate in bottom the relief, elevated ones CC, XX and most drift modest up etc. in we see right of a to and And was are name and of the you can that gave they’re go kind turns them in, before negotiated right this can of already we drift more most clearly call to restructured of Page triggered. Edmentum, -- triggered Benevis, trigger CE, which There’s company much some UniTek, are that, sponsor not covenant. got we company the etc, that those been other gets money quarter. three beyond mentioned, to little becomes was in and you fee services Permian. the comments that that was orange one between talked then CB a about restructured. typically the one two a mentioned covenant will put the believe amendment. that Company marketing bit the these Right, two John all I I we CD, so

weak each trigger specific But quarters. some own unique we’ll a hard generalize the pretty is - its going results things what think through situation couple be trigger quarters would dynamic. of covenant have to and will what next I as see that two roll to of the in about to one the It’s be. where

hear you bit helpful Got probably Appreciate morning. kind this on taking That’s time. of from it, more the it [indiscernible] how a to seems. it me

next Instructions] comes from [Operator Kotowski Please the ahead. question with Oppenheimer. Chris go

well. looking XX, Last Page your really at I quarter, on as chart liked which

whatever open, can do environment companies these You and closed, for on on we general, I’m year. operate, if that for some as wondering, just in sheet. than middle moderately tremendous of their I all this semi-lockdown next another half have in kind we’re companies said liquidity balance think. the of comfort enough of goes that in lot had this we the companies in liquidity impacted particular state of stay the took in into most And get you generally kind to that A half it a you I guess continue this. just portfolio do if this of mean, to longer through think - they

open, actually degree we’ve yes. have pleasantly the maintained That and have question the liquidity surprised, which good exact we answer and the revolver just very things things cash not [ph] and question or broadly been balance have mode even and the balance just they environment has rapidly that modeled. companies the much years, crisis and they more sheet. been entered to more for And of two, a show, point. runways primarily it’s it’s quarter enhanced just retail is months like in these on flow part upon even Yes, breakeven And capitalized they’re same cash it’s They than and drew say just forgotten that and us the in greater as cash to again and half we this of to with measured quickly originally because this generally you and well both open than half closed available very kind -- degree is, less healthcare. the beyond burn

as be in one cash So generally or some oh ever opposed runway. we these point. Obviously, that companies. better than it across going resolved two about from at the fully to point we’re three now wall months feel to to, to has get But some hit years

million did the of just if the million secondly the in non-accruals - said statement at the roughly that highlights the the I decline discussing you only and Did Okay hear was income in when was $X hear quarter XX, just interest linked say rest $X like on you’re look income. you you and rates? then that I movement Page that

the lower non-accruals right, and fee that’s combination a you I was just can way Yes, it little the the then the bridge. to and to earning then you bit income was rate, lower to probably maybe it’s the look less Page right. $X that’s million have that sales - of reference so [indiscernible] it. we from it of want generally was deleveraging to asset so at XX, Well see best asset

I Right okay That’ll guess and Thank it. from that’s me. you. it be

questions. no [Operator further Instructions] at time are this there

I remarks. the turn to for to like would our this So question-and-answer any closing back session. over Rob Hamwee conference concludes

Thank you, the the you and appreciate always time, questions. the good thank operator, interest, everybody as

forward just where of to talking But As touch with it’s to and at as we transparent pretty weeks funky again good as and in feel keep we look staying available follow-ups. ahead. a any months do and people but can about we’re obviously the we in and want kind we to always, time everyone are be being

you have great a and rest thank day. the So of

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

disconnect. may now You