New Mountain Finance (NMFC) 10 May 222022 Q1 Earnings call transcript

Good morning. Thank you for attending the New Mountain Finance Corporation First Quarter 2022 Earnings Call. My name is Tamia and I will be your moderator for today. All lines will be muted during the presentation portion of the call with the opportunity for question-and-answer at the end. [Operator Instructions] I would now like to pass the conference over to our host Robert Hamwee. proceed. Please

morning earnings to call Good Corporation's Mountain and quarter first for everyone you. New welcome Finance Thank XXXX.

he make Mountain the On today the COO to introductory NMFC. ask of of and CFO Shiraz Laura make some Steve are here to statements Kline, before New CEO important Shiraz of Steve Klinsky, NMFC; remarks. of line Chairman does, of Holson, with NMFC; like Capital; some regarding John me is I'd today's Kajee, to President and NMFC But going call.

Good morning Rob. Thanks everyone.

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

address was investment Net per for to the quarter. and March as today share, of great Chairman quarter as dividend be XXst on cash prior income of $X.XX and line our It's you in will first covering of that fully guidance. able fellow was a paid shareholder. to Shiraz. the the $X.XX per covering in all the NMFC of Thanks both start by highlights I share with major

asset value net generated of quarter, per income primarily share was based last of The investment our again for assets. $X.XX Our of We was per approximately $X.XX resulting sale set estimated at a share, million value. of on share. quarter's realized from gains $XX $XX.XX dividend REIT QX net regular the asset net XXXX one this increase from per $X.XX

protection we discussed of control part earnings previous founding has New mission. downside always calls, and As on risk Mountain's been

total assets of a XXX Our firm people. with billion manages over of now as team whole $XX a approximately

or missed in had equity private never an have our We work. payment bankruptcy of history a the interest

enterprise in health with XXXX. The services, strategy well-positioned evidenced on began same loss software, net care growth are defensive that technology. and zero great to focus in we our times and and operations applied and particularly, have and and credit tailwinds our all of challenging types services effectively default the growth defensive secular average this due downside continues by environment such are we sectors acyclical is industries in protection attractive strength ones think These the right we in investment since business more portfolio are macro NMFC believe in be We of today. the are team tech-enabled loans We our to an credit that efforts. to of NMFC's bulk as

have Our first origination this in portfolio slower of the volatility, modestly our Coming and ratings quarter reduced and a we company no quarter. the had year seasonally risk period deal since off represented XXXX, quarter the call enhanced improved record last a slower which origination new given non-accruals volumes. earnings market overall

and the capabilities strong are sourcing selective most believe, what are defensive as about only very companies. Our ever we as we to lending remain

a to million in Our at-the-market launched net or of $XX.X since is stock approximately November. program it ATM proceeds nice with off start

call. this on as personally invested activities. professionals me With approximately into protection I other New if will million use remain Rob. Mountain that, I Rising Together, Lastly, and NMFC remains materially to you fall $XXX remind rates as even call our interest in back have management $X.XX have dividend the program NMFC's had earnings to team not the share. shareholders. let can below improve explain it, earnings want to the place, we our Mountain's that, credit New although largest turn and per

Steve. Thank you,

three While market borrowers system the well be balance reminder, conditions. line market to business the revised our of and/or we headwinds continues market severe environment. and updated to for risk the and business performance both is continues rating on million of X-axis to representing Tier sponsor improving outlined positions quarter, company. unchanged positions We Haven, environment. at most formerly face life names C and/or positive, its page a believe and this Haven as A significantly Tier stronger a we stable replaces red due in most rating. decided four Tenawa to on performance well our fire. The million, a scale or operating overall.\ a known and sheet quarter XX, negative, to overall reflects Y-axis is Starting broader be plant show be portfolio conditions X worsening migration at heat ceased reflecting to performance on and support $XX generally reflecting underperformance reflect our end, the ranks business to to strength formerly the nine X just with risk After continues and from to on and collectively positive value beyond as company's as and severe quarter, maps strong this orange quality, with COVID, map page in migrated the with operating as the representing to rating market The page the positive summarized operations as very COVID our Permian exposure, positioned adapt X. with better two have fair movers The The expand in heat COVID. due execution $XXX

experts a next the steps. injuries Fortunately, to determine serious there working no were of and with company is variety

potential yellow, currently not or to the improved this and on impact the coverage of COVID insurance options, hospitality receipts rebuild meaningful KPIs orange to progress. negatively ultimate expected The do we travel industry from impact as business Given value. show management expect carrying our and

a impact. business retail consulting and position page yellow heat COVID company team, modestly done line into the quarter, and revolver a inflation and an this experiencing health The impending consulting best-in-class a business, firm care headwinds and The firm is and has was strong we engineering XX. ongoing building migrated is from include continues updated map helped Lastly, green lingering face that top impacted has movers to shown which maturity meaningful who three transform COVID engineering on are UniTek delivering management the with as where results. to UniTek our have a pure-play, and NHME, negative

perform you towards positioned believe services our like matter As and very sectors continue our given defensive software, how health no portfolio's to we can majority vast economic see, well develops. strong of bias to care, landscape the business are the assets

remaining and X% energy continue to We orange portfolio, of red fair X% spend our represent value. time significant just respectively which names, on and at our and

relative several are migration Page We that of this XX trend are heat based will to a on the map. our red the underlying color and Credit company pleased shaded and optimistic names portfolio the last of to quarter with EBITDA is corresponding in XX-month's the Performance view positive of leverage, continue.

many have As vast with cases our projections, you in physicians are consistent of either increases results or decreases. very leverage minor the a that underwriting very our see, exhibiting shown leverage can green-rated majority

On of portfolio this of parts discuss certain page, adequate year. rated resources correspond to our a small prospects conditions a portion improved that represent yellow, in have liquidity market reasonable metrics. side perspective, of that it companies These than names. will red to that With other important performance most business to of and economy. partially underperformed X.X turn caused for orange volatility From have believe of John group we turns I that we performance the companies which of these the their our the plans have more and by over and conditions a to have of pursue companies to negative most drift, adverse lower right show six leverage due

call volatility financial and markets. Since supply caused most instability. of has period, and equity of Rob. corporate income chain fixed have Through concerns, in geopolitical Thanks, areas inflation experienced we classes across our March lending resilient rising all one the most this by last sustained disruptions markets asset the been direct interest rates, in

are in continued floating industry structures. less of and interest secured core XX% some Our market industries, performance, debt rates verticals our than from benefited defensive many particularly under has good credit XX%. cases and Loan-to-value in in ratios

the have of financing lower have equity stability increased market, of While we spreads many to rate segment Yields alternatives. continue direct large half the unitranche unitranche versus in deal with other on and remains than latter sponsors very XXXX, materially be activity floating flow the $X.XX the of seen $X.XX as loans. attractive new lending of to certainty to gravitated

remain an interest strategy to to analysis, researched valuable lending the mindful growth trends NMFC's could earnings. market industries presents current in investment environment, economic in stable Mountain interest Page businesses platform. New we of impact high XX future the of well continue are we that rate While we defensive conviction how where within by the the our rate show overall have and

XX on March XX QX, three-month basis points basis from LIBOR increased January XX. to on X During points

rate our presence given floors the this on on QX. the been modest a on presence earnings of has headwind during the floor of floors our liabilities, assets – Given and movement lack

However, power the increase is LIBOR half expect NMFC's experience year. year. If to the continue to this during since material rest earnings positive even X.X% of back quarter to to continues, the higher end, we of throughout rate and has the moved change trajectory expected in a

annual higher, $X.XX occur earnings to increase earnings if share months, three For rise optionality power $X.XX and X%. per rate could X%, and continues within NMFC's shareholders to our LIBOR, by This rate run next could share. could base At rates or positive hedge six per representing example, X% enhancement the which rates an to rising inflation. return general offer attractive material potential be against interest incremental XX% an provides

quarter an Today core the portfolio the more crisis. preceding of the our book present showed appreciated we appreciation of where and book XX. began, pandemic the the health on by it course debt We Turning This in years. side which to REIT over last The Page our strong increase of than in that page. right the was higher our steadily from COVID has is the performance holdings, X% value our driven value portfolio two than been largest the since shown certain contribution positions. equity of are of value recovery fair is

assuming equity solid to these believe a performance since its XX credit long-term forward, operating Going and supportive value. continue positions we environment, inception. increase addresses Page NMFC's in could performance valuation

currently side On of than have or on value X% fair we portfolio state investments the where the of our billion the $X.X show million current portfolio of non-accrual. less we of $XX left with at page, the

become the page, over side non-accruals, the the only the $X.X since in NMFC's shows inception investments credit on XX-plus our our that non-accrual. On across $XXX year Of of of which present realized have $XX placed total been only billion performance we XXXX, cumulative have losses right of course million million history.

for overall its metric a our Page remain credit losses will page, in since investors. gains XXXX. losses to period company's discuss economic elsewhere most long of is by on Limiting the over these portfolio. IPO offset XX important these the we to perhaps committed next disclosing The the the have manager. been transparently time We default in performance on tracks metrics a As realized chart

million see can initial page $XXX million our the you listing, has dividends income. regular net NMFC of our shareholders, $XXX As which investment by of been since to have at fully top the of paid supported

to cumulative highlighted the the On since of million net on gain show in remains $XX.X our real realized $XX.X cumulative half we the as have inception, to aggregate payouts the compared unrealized partial a total is estate position a fraction lowest cumulative last is we net focus of of of which lower just million, which blue, a since million. gain level a stands depreciation at $X.X sale of nets that of cumulative This we where XXXX items, loss offset the a quarter below-the-line $XX.X and improvement and dividend Glacier This realized portfolio. our Arctic loss of realized by to-date. in from page, portfolio, result million unrealized

have. at XX.X%, an high forward, represents long risk look team NMFC's returns of our ago. that while small less the index maintaining as have remains return NMFC shows of nearly this IPO index equity XX exceeded free return compound annual oriented Page averaged well very the chart flow have an very where since of a we a loss, materially which remainder period, than strong portfolio. years peers we BDC stock cumulative been generated cash as credit focused its has As rates public NMFC's Over on performance the quality X%. as reversing that environment least XX detailing this as throughout of in yield a has

Additionally, in risk challenging months and compared the NMFC a that fixed markets has very during assets, recent for well track. equity environment we to income performed

like invest attractive rates class mission-critical in with Finally properties, brief nature commercial a XX, the properties debt update corporate entered on to critical to I annual portfolio Page complement cap a the the tenants. long-term rent net subsidiary, thesis on provide given We the offered duration, that and REIT nice asset escalators. NMFC's very lease of long lease which with our would

well, a detailed our core the first very commercial process of New the credit of have of the since real and Additionally, competency tenant, strong as in yield platform. performed Mountain represents one both current involves cash Overall, date property's the key we investment which the the estate has appreciation by portfolio of aided aspects analysis estate experienced attractive the XXXX. principal a environment of real investment

has XXXX, QX of QX strategic in and the the on of at creating of realized in more on handful fair portfolio an assets and Depending QX we with million market certain incremental cap million. sell approximately gain very originations, to value of remaining hold for yielded of made rates million. future. which we approximately portfolio, valued $XX low to Given $XXX The the may seasoned the decision assets which portion conditions, a plan net aggregate meaningful million $XX of sell a $XX approximately sales recent of lease foreseeable we consists a

asset class, will have defensive of portfolio our the While more we Holson goal our reduce growth and into oriented exposure continue Laura recent with decided turn to to of to like I construction. proceeds credit. details this core discuss sales we reinvesting the call overall our to strategy current over now rate a on originations private COO, floating

Thanks John.

businesses slower growth less XX us As and Steve leverage sales $XX seasonally within origination lending diverse Page and our services deployed of proceeds, previewed, ATM business. overall. origination originations a was in keeping gross quarter the an QX within for fully health veterinary core technology the aligns defensive including two of NMFC target our million invested for direct million and effectively existing care our platform add-on range. software and a business $XXX repayments verticals,

QX. to to have fund we and and committed great economy, We of success larger within high-quality continue where course end, to that deals, picked and have deal quarter expect has the have up QX targeting deals niches highest the activity sourcing several conviction. of we we Since the over

raised remain our incremental We ATM programs. absorbs through ordinary proceeds fully any repayments, leverage loan expect range, well to as target course as as our from our flow any deal invested in capital

unitranche to QX, net the investments, curve. for benefit nature. lease inclusive LIBOR We portfolio, of with an senior shows first XX, QX, weighted to in slightly to originations Page the sponsor heavily maintain that mix than page increasing increased Turning the yield of continued end X.X% in our is of the due X.X% lien quarter product. to first asset adoption portfolio loans, that of QX average of that two-thirds and plan to the our for SLPs lien our consistent due in from are we largely towards show XX were more or NMFC's

competitive, income our spreads While the environment supportive target. deals is for remain of investment net high-quality the market

chart along breakouts pie give XX, The exposure, and services needs, given these as are and high The with services more the detailed to surrounding structures. tech center we flow and the the in capital environment, Turning the health industry within into of inflationary of EBITDA working that characteristics nature charts comes pie CapEx, page margin software, We show cost power shows and sectors exposure. attractive profile and have industry we sectors while focus our margins, overall sectors. industries. care these such significant NMFC's minimal insight well pricing positioned diversity neatly on believe cash an flexible largely

our interest rates cover most have of As cash to a burden. flow sufficient free as result, we believe rise, interest increasing borrowers the

As for further check. just incremental of in with equity associated, X.X% represents interest borrowers, that the a average note increase expense to approximately sponsored rates, protection, it is on XX our the X% important top cash

successfully We exposure more well perform sectors have US macro avoided maintaining all most we troubled environment. the high of most industries, volatile defensive the can while to within in economy nearly believe that the

we XX, Finally, diversified on a as illustrated have page portfolio.

Kajee financial that, of to now inclusive account With our of business I appreciate top the Shiraz due Shiraz? technology as total single the XX company turn to for space. SLP performance investments, largest tailwinds now it of Edmentum in XX% strong the value to CFO, in represents statements. will over fair continues Our underlying obligor funds, and our to value fair The education value. X.X% secular discuss the

Thank you, Laura.

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

show debentures. at per approximately net goal at prior or Net historical minimizing On share with our see Consistent to a special adjusted March we portfolio of $X.X At to of and book like billion, show of most realized results. slide forma performance. guaranteed the pro assets our will our that total be for for leverage drawn ago. our asset The on IPO, long has On line. ratios was XX. I'd XX we almost $X the SBA and ratio unrealized $X.X of fair with NAV value investments slide our measure term, below sheet, XX, dividends. of billion total losses $XXX excluding over balance of maintaining slide the you million $XX.XX ratio continue quarterly cash credit This liabilities stable we the income X.XX:X. had in net dividends total above slide income impact value NAV X.XX:X, XX, believe investment of historical statutory while cumulative can generate of adjusted the value and line, and statement attention and statutory stable quarter that outstanding end, leverage from highlights billion of the that the volatile quarter. appropriate was years and gains Now, $X.X up special debt which $X.X our was billion, We $X.XX would is available surpassed from turn NAV NII quarterly debt-to-equity our the XX, to current be losses your billion,

million expenses slight quarter earned $XX.X from we quarter-over-quarter. were the slight quarter. For income increase the Total million net investment a $XX prior a total current approximately of decrease

the and adviser years. calendar XXXX investment committed discussed X.XX% of XXXX to a fee As for has management

to of quarterly is per We have per average adviser share, that note covered fees which cannot previously as our share support to per or million period the weighted share. $X.XX $X.XX our reduce results this $XX.X to needed NII pledged This incentive and quarterly investment QX important fully $X.XX fee during dividend in It regular the recoup dividend. waived. also of if

result of increase is believe XX% and depreciation Slide income a $XX.X stability the had investment net As from we total demonstrates predictability in investment of We of the quarter income. unrealized nature. operations our recurring consistency this of shows XX in assets net in the an our resulting million.

red slide to dividend Turning shows our XX. coverage. The line

our $X.XX on estimates Based approximately QX preliminary QX our of could covered coverage NII program needed. per NII an our additional While fully if have protection dividend be share. expect we dividend, will provided $X.XX

of $X.XX record which June base QX Board over into Given Directors highlight slide at borrowing declared billion that capacity account guaranteed on will $XXX with of On to Taking borrowing holders revolving a of sources. limitations. SBA share $X.X June we quarter on financing almost benches of has be XX had subject dividend per XX. lines various total our XX, paid million our on end our available we to

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

maturity slide schedule. Finally on show XX, we our leverage

and unsecured back in us access cost-efficient manner. secured our Rob. markets to the laddering diversified address $XX maintain Furthermore, to we've our issuance, in X.X% our provide continue our like As liquidity further unsecured notes stable priced $XX of multiple million and call of maturities manage credit after debt we additional to over various I turn to that to July, ladder we've would With better debt a been maturities over at to XX% To matures to explore our investment million ratings most recently that, the debt mix of maturing at our borrowings. successful we note XXXX. unsecured unsecured

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

continue to begin to and Our stakeholders us now health, well. with transparent to serve supported of the long-standing maintaining Operator? defensive all forward strong open dialogue businesses Q&A. in to focus on things I and should ahead. and our by look the wish turn thank back days We all operator will you an good support you your sponsors lending continuing to again for interest once growth

Absolutely.

question with from session. The now Janney. Rowan Instructions] comes John We will [Operator begin the first question-and-answer

open. Your line is

Good morning.

John. Hi,

want provided shift of that sensitivity want that's the slope to does assumption, appreciate I that to not make account just target you potential to provided I your the shift just for I make So earnings base yield curve? you increase regarding parallel rates. that a sure information or the sure in

and which for we'll one really it's mimics So right SOFR three LIBOR. now a LIBOR month and right? function LIBOR It's broadly of increasingly assume

we we're on sensitive what don't yield further So the to happens -- not out curve.

is the to yield relevant of really It's month shape end Does month and the the make short us. one really sense? So not three what on curve really LIBOR. happens that to the

Sure. given lastly potential And noncontrolling that expense does then Does is market volatility there in impact interest market at volatility. any all? volatility -- noncontrolling

impact? I'm sorry. Does it

noncontrolling interest? The

The noncontrolling in positions? equity interest our

lease corp. the In

Oh okay. I'm sorry. Hey John do you want to?

So we I value lease that we that the noncontrolling the interest, on XX% And then put be that's -- is the noted think of full and full that and then net lease of value we footnote. in value would approximately there program the And subsidiary. a financials. report the net note we

So, would XX% the of me then that if XXX% that. and that's what financials in NMFC of owns be the Shiraz, you correct see XXX% wrong.

Yes. That's correct John.

Does Thank that answer your you. question? Okay.

Yes. Sure.

next Please proceed. you. Group. with Bryce comes Thank Rowe question Hovde from The

question the taking Rob. for Thanks morning. here. Good Great.

the either action that's -- to year see it early interesting see dividend some portfolio. let's we special level on if year. the see call trigger or might to estate next later taken this going Curious Let's real that of,

Just trying how might to feel try those you gains? get manage a to for

to offset obviously, have the have much to very it's the might any we'll see that But losses mean out year we something I a plays how Yes. what on and rest our radar against that. is good if screen. question, of

as call. it's something on and of is November point. little year sense later in get great it a But it better a focused our we'll certainly we're think on have we the and I August a

relates made of think the -- impact you size And helpful borrowers about increase and That's maybe checks help writing. reference equity rates just then one it that Okay. for through kind on that and your a Could bit? And Laura. how to -- run little it Laura in Rob. again? the of the of are you us how to sponsors on kind

Yes. Sure.

attractive to sponsors X%, of top John I of was millions that check the to performing or relatively equity borrowers. a relevant the a cash talked the XX very going small walk looked over and was sponsors burden. cash X% what to does does dollar We if in our amount in business think that have dollars away statistic view how generally rates, speaking not of that change is of are the at the X% equity obviously about statistics that the that given in in thought loan fundamentally, because change we well it overall for values billions section, market what hundreds interest is in compare

thought analysis. was we So that relevant a

So that the quoted of was X.X% that I in average increase for X% equity sponsor cash borrowers, overall on the the a statistic represents rates about check. XX top

kind component our was we're some etcetera. we've it sensitivities flow cash cash on characteristics well. one So, flow given positioned analysis attractive coverage of of the of and then borrowers obviously we again, free run And well the think as relatively there

Okay.

right running about how maybe look that if coverage, does sit think the now? you're that statistic? And an in increase where rates you interest does impact you it when of And coverage at Okay. that kind analysis

Yes.

the bit portfolio a borrowers covered So is rates we kind little to today the of X%, up overall. coverage took the weighted continue for above we etcetera. think And X%, well of we average as that be most across interest again X.Xx X%,

more good I right. and increase information. deal levered a slowing got That's activity. much perspective volatility, maybe appreciate decent as possibly sounds Can levered, of slowing It being fully here Okay, repayment And it. all for about of think then, level some maybe one you in being you've not to from able you. a leverage and repayment about, with go too higher like activity? level here pipeline talk you stay fully me, behind

Sure. Yeah.

a resources end And right available always commitments, where So we are in to striving difficult right, the to relative repayments to our and which size it's will the maintain. volatile of a function inherently balance, predict. we're which our is

are some that under we multiple sold. Although, forward businesses we because, portfolio be visibility to agreements have in currently have the decent definitive

do us some we coming proceeds in the ATM supplemented that's to So And visibility back have near-term. on proceeds. the of by course, then,

managing of And commitments within the that we committed we've -- what, So sum established. size those to is things our on. we're really where the profile two leverage just

flow ATM good more I deal than our think and enough cover repayment the So from any is, there's perspective to paradigm. conceivable, news proceeds

being relative allows to to So selective. long of continue and in us enviable an we're that capital deal position frankly flow be to incredibly

of which So particularly but obviously problem that. leveraged the anticipate it not during we of I the is think high do the have times our course other equation quarter fully And very And maintaining we leverage no much we'll exceed volatility. part calculation. the NAV, of in to that track periods the position, drives of

only is, is which this add are multiple raising we're in do NMFC our fund, in fairly fully Bryce, funds capital. while flagship we The I'd and that more private are invested thing have we active John. funds Hi other credit consider

So, for fully we they and is open even NMFC open pursue. to if support transactions want pursuing business to that clients in remain our invested,

comfortable we the in in to just So our ability feel financing holistically, relevant market. and be very about business be

Got your you it. all Thank time morning. for this

Thank Yeah. you.

comes from Thank Lynch you. KBW. Ryan next with The question

Your line is open.

Hey, Ryan.

I Hey, morning. good of had a couple questions.

with more appreciate appreciate business overall environment system less I this And focus I you've the of First, kind of deck. you rating in we're also I kind really think today in slide updating to guys' COVID focus but gotten on and past, just the strength. guys, complement your on your reflect

of for I your some did providing on a question that on the update. lease thanks So have commentary update. net

are hear selling those your a of said interested about talked to incredibly into which but to successful, those going assets core strategy. have been I you obviously proceeds lending go was You that back lot some of

has back that little been to incredibly like, get cash that from on which a bit pulling returns me, you're you high successful. Obviously feels So it. strategy,

nice like nice in future. very may at the it some gains, investments seems those you have exited You've gains and

could just in successful educate I'm with helpful if so to do not pulling you me as not kind familiar rising the would rates leasing because the of whole been decision on, guys I'm are So, back be you again back, just to the why air, because sure, the it it's pull has net some if with, of something past? space.

to very successful and private in private space a put on And we fund have it's about volatility. dedicated we don't primarily. issue It's great we to rates where space, love this finger as Yeah. Ryan. And have you fund end the a beginning it about the to market and worry you think a question -- your

movement a which we we're a compression rates in NAV just when entity, could not easily we feel think reasonable feel cap to fact think we has want do rates, helped and did as of is introduce I from cetera. a us And of very perspective. where the volatility don't came what in I of in context cap trying necessarily a the happen to rate into rates, that we project in, going we there's predict that lot volatility public certainly the more forward. in degree around But vehicle et public

rates bit to it decent a before to we And a necessarily want did portfolio, frankly we're -- where in with -- into uncertainty want only comfortable where we we the It's stand volatile, opportunistically lucky didn't started probably little We than down net sector very little that have outlook feel rather we be today bit real and rate And and volatility. we interest last took have more we and less double given have to able any exits. ball than so -- the enter our just a from here. increasingly feel duration and lease given better just we we crystal around duration category but then we the to predict. a didn't the as right good which back but November, duration rate place sized inflation moving, that to going we become we successful still were some now didn't rates

And this add the I'd only is Rob is, like we Ryan, asset class. do only thing John. said, I as The the thing --

to New do NMFC really Rob, this aspect net timing the But role the moment inclined at articulated floating rates this overall a plays like at really in long think we're I of capabilities We that's our are what we Mountain. building time. feel is thinking. being really and that time our our at interest do in lease in And in really shareholders

Then sense purchase timing there's the helpful. that That's guys today. and some of and have. businesses Makes of had you is, a I nice other those certainly revaluation question the valuation price on explanation exits of

it side, on has been those businesses, have to and primarily in you public with I valuations. certainly the markets well hard You're but the high-quality seeing know as fairly businesses do the hit in focus higher public

businesses focus businesses have you Adobe come -- that guys significantly. companies like multiples think businesses, ServiceNow down Salesforce like enterprise have tech-focused on I or these profitable or high-quality the

that's think future. I in So markets. There into going to the the private trickle down already or coming has is

the loan market performing businesses? on for fairly XX%, values. if know really NMFC, you it what Mountain Capital of you does a but been is XX%. high-growth business side. really of So low come your strong What a does XX%, loan some you've ability seen private multiples business that to one defensive road? the as that the to what broader obviously back you've valuations on investments have it's years oriented mean have the a benefits. And that That's New actually made lender? I'd but focus repay with service equity mean them these well, you the down for those have that when love for down you does I then down mean multiples But to, made a This does on at what what then commentary come hear ultimately for to and debt you private in

private good about adjusted trying new public have at Yes. It's that a very something seen side talk not obviously, the look And and markets, another yet in way. on rapidly. our we very in that as but lot equity flow-through it It's have funny commitments, particularly pieces. take a underwriting question we just we material to

a which to is fact contemplate asset for in values. down high private that markets be kind but our attachment times likely goes last We but by there right, not it question as It's So, that standpoint. But it the stay maybe and expect the like normalized XX of not repayment interesting to environment. always compression XX critical, the think even for now times super multiples at or can't feel swing a answer for you're to why But in that's always times, you dollar speaks to a have assume, now the allows some like our we've said, some recently because quite very we're to pendulum because think we a dollar don't from XX% and a large right average -- or seven public very is, dollar time, but If that because Ultimately, were point be is quite very material private XX%, leaves EBITDA, attachment repayment. I a to repricing I periods environment, to we this ultimate announced basic on cheap disconnected to we we markets large point still long that say that against now times sometimes our radically multiple further. when right? frankly flows, a private we happen. and swung assume good cushion it's in market, of transactions been there's two a ebullient. priced possibility environment fully to issue may service attachment last the times, the function allow that point debt really XX six it's it's because think, cash have at compression. continue pretty for business that lending We XX of or profile we scratch to bought the And head those in our

the we're of that values environment more on looking the in and don't know. or higher we XXs that extend, the we're to typically tremendous that loan businesses, that's amount may the particularly gives deal with in today in cushion which So even why, dramatically XXs, future to multiple just at

see, out Yes, of helpful. really that's helpful obviously, color. to And commentary and plays it's how but and that's lot tough a unpredictability it all

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And visibility. can I to John. one, it's that some some know. we In Ryan. great in is cases, cases, Sure. too early take This have

results. cases, we've budgets. we've many seen So seen many In in cases, QX

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good we but how well. is portfolio think I some bumps but positioned be I'm really, feel sure days to early about quite Not there'll So a feel -- as the really road, do portfolio the positioned. along it's we say,

Yes.

Okay. Understood. Thank. appreciate Rob dialogue I insights John, today. the and

Yes. Thank you.

Thanks, Ryan

operator, are any board. there we're questions? but other what our to see don't not questions sure Operator, any on we Well, happened our

always, as their thank And with and and speaking we're to to think, in look I the and everybody months go time for weeks all interest. forward you ahead ahead. going So

you. thank So