New Mountain Finance (NMFC) 28 Feb 232022 Q4 Earnings call transcript

Good morning and welcome to the New Mountain Finance Corporation Fourth Quarter and Full Year 2022 Earnings Call. [Operator Instructions] Please note that this event is being recorded today. I would now like to turn the conference over to John Kline, President and Chief Executive Officer. Please go ahead, sir.

Thank you and good morning, everyone. Finance quarter Mountain earnings New to Corporation’s XXXX fourth call. Welcome

Hamwee, today line of Klinsky, Robert Holson, regarding NMFC; like our with return some NMFC. next the CFO some are Shiraz New Chairman Kajee, and me Capital; before but COO, introductory CEO On Laura earnings leave call. and here to Steve of of NMFC Chairman Mountain is Vice Shiraz Steve make call. today’s I’d to ask maternity statements on on is and important remarks, he will quarter’s going make does, to of

Good morning, Thanks, John. everyone.

is get Corporation presentation, webcast advise are disclosure we this that in broadcast statements. to also our and of they is would the of and everyone Harbor Please recorded. Safe attention like property call note that XX replay presentation any prohibited. your unauthorized Before to and release into the form Information the would about call available audio I being slide press are forward-looking any like Page call Finance regarding on earnings that in strictly press Mountain today’s in X our customary the release. the I of February to New

We forward-looking include www.newmountainfinance.com. will update throughout to obtain differ the filings call, to the access materially ask most be our or and and unless recent To SEC we website could visit copies actual results Today’s SEC presentation our this undertake not that latest do cause projections. law. statements referencing that at and webcast filings please for slide refer to from to our projections required forward-looking of conference by call statements to may projections we with you and statements that our important and factors those

slide Klinsky, who NMFC’s At this X the Steve of give turn highlights beginning over time, call will on Steve? Chairman, presentation. some like to to the Page I’d

major as of economic Thanks, as NMFC’s to to despite Shiraz. U.S. believe we have both good months. today, news you address a Chairman conditions fellow able It’s recent shareholder. be and report all difficult great I the to

income net per paid per for $X.XX was on XX. share more investment covering quarter $X.XX Adjusted than the dividend that December was in our third cash share,

dividend yield XX%. at the annualized approximately $X.XX core dividend rate is Our

asset per $X.XX a X.X% share, $XX.XX value net Our was an or just decrease.

As and that loans our discuss which we QX, caused more of in change widening in challenging of macro loans most our think of fair market on existing believe will markdown the positioned are value in continued detail, particularly good attractive book industries a growth are despite defensive reflects We spreads performance. all conditions today. in credit we overall in times well right the

basis had X now have XXXX. firm New private just never manages Similarly, payment an NMFC net points interest since assets. IPO loss default a has of equity Mountain’s per year experienced and $XX or missed funds of billion our the bankruptcy in

rising quarterly floating the environment forward, for a we to continues rates. be positive rate lend on earnings Looking since cheerfully substantial our

all Page QX in out-earn It and continue in dividend shows, other current interest XXXX, intend the quarters. mind, we program. into factors it will the announcing $X.XX are this XX the future formal there also payables if of constant. per supplemental dividend is in share significantly to rates, QX potential As starting begin this at hold a With presentation now to we

earnings each we to of quarter half Specifically, least excess a the current to pay dividend in dividend. of at pledged one variable supplemental

later. and $X.XX first we to to expect be of next $X.XX for at least special a to per share So we $X.XX will more more we cash $X.XX for our $X.XX the view quarter our QX quarter sheet $X.XX supplemental Based earn of than dividend and to example, share, future retain balance all-in that dividends for quarters. or pay or raising be dividends earnings, the other on potentially $X.XX that dividend, dividend our our $X.XX $X.XX if in will per

based For as regular will and clarity, the policy Mountain quality current rates. NMFC’s is is necessary. our management on in this with review adjustments conjunction basis and policy NMFC interest dividend We make of driven always, by on a And believe of of strength our New Board as the team.

infrastructure attractive now that growth such science healthcare the digital as developed members technology, life services sectors, New and overall has Mountain XXX engineering. acyclical information defensive growth numbers firm is specialties software supplies, and in

of Regarding Situations. year we team Director gave Joy promoted of the to specifically, credit this Head title Xu Managing our Porter additional Special and Josh

great release, press be our team will career another been the respected NMFC’s in financials. of senior is has of and and COO, in Holson, will the we Upon member additional Shiraz Laura in successor been CFO described a April good leader Laura Interim on command business Shiraz credit CFO, NMFC’s a of and a us departure, a has Shiraz’ assume duty found. leaving Kajee, and our group for years until terms. part has As many our opportunity. to pursue valuable

current will to former New orderly transition. an ensure remains with NMFC active Mountain partner Capital, CFO Additionally, and Laura and Weinstein, of Adam CFO of supportive. He

in have coming successor We to an engaged permanent identify update executive firm as months. CFO we search you and the will a

NMFC, major buying. never even shares as NMFC I a over Finally, personally. shareholders of have we as sold total have owning of XX% share as and Rob, management, we John continue NMFC’s of been

let With me call Rob. that, to the turn

Page over and X, record Steve. our leading return our strong highlight On credit track we XX-year metrics history. our you, Thank

positioned inflationary team in industries. profile demonstrates chart margin nature developed included we the of the operate services and along are given domain of an our our with these believe detailed power and We expertise pricing has comes differentiated shows with Additionally, view, we tech any exposure. the that the the why have cycle. and In NMFC’s economic largely breakout confidence environment well industry sectors these in

direct Slide other On I advantages Finance will that competitive lenders. X, highlight Mountain apart three New from set

broad and New Mountain first-mover of attractive and quality that in companies course executive that been the are businesses New a on invested sectors. focus these targeted, industries by defensive network acyclical two this decades. in we that results process advantage the allows in growth deep Mountain, in over We believe First, researched expertise have

NMFC conviction connectivity and find private in a diligence more Second, credit credit our from New level deeper robust in stronger engine. We between of approach equity. enables due and this investments. results benefits the unique integrated a Simply Mountain’s stated, bigger, selection

on alignment, is Steve touched Third shareholder which already.

strong team New accountability stakeholders. shareholders, members XX shares, always As ensures fellow aligned that million with creating be over will decision-making own Mountain our

particularly million Page shows uncertainty. representing with to X, representing improving rating positioned in flat Turning migration overall, we for our The this relatively fair rating. quarter and position of well million portfolio in of risk continues just heat to map worsening $X one periods be positions, $XX the believe value, two updated

positions, pleased represent orange of our portfolio challenged XX% our are most green names, that Conversely, the represent We is just on red rated and rating X.X% which over portfolio. our of risk our now scale.

updated The Page heat map is on shown XX.

strong the towards business develops. bias we our Given healthcare, economic majority like sectors and believe matter of perform to vast our services landscape software, assets no how the defensive continue well-positioned portfolio’s to are

with stability benefit and Specifically, our margin industries, from generation. free models, revenue along flow cash great verticals predictable core other these

energy names at underlying Permian, name businesses either of for customer beginning red goal now is operational and time finding with significant to we new was example, positions or our improve at the XXXX, individual yellow of as have, and exiting the due and on which the spend ways to continue remaining but a We the red orange performance to of improvements wins.

performance other it With discuss important John and market to conditions turn that, to metrics. I back will

remarks. proud Thanks, of Rob. us We last XX It’s that fellow team our in a for days time pleasure ahead has business to his to I the our public that believe best first the years are a the built of over CEO. outlined Rob address my advantages am the as that course competitive of due shareholders as company. the opening

proprietary have provide industry in channels model that discipline, looks best direct the underwriting the a We for sponsor-focused lending positive. outlook and The many the lending XXXX of direct to deals market superior market. in access sourcing

loans the opportunity are very to make where spreads. While attractive deal down of activity pockets there flow we overall, is at have

Our sponsor software, and active business services. in clients services are particularly infrastructure

to M&A. to companies well-performing Additionally, make we incremental portfolio to loans accretive seeking see good opportunities continue pursue to existing

Overall, company. by and board, direct the have of fees, become contributions for the financing attractive characterized lower more of generous, lender-friendly across remained more execution, its capital to tranches the to robust structures continued XX% seek market spreads, leverage committed XX% sponsor ease single general, enterprise sponsors debt and share as increase of higher documentation. value lending representing equity of future the consistently In have has acquisitions. Deal

increasing Page effect rate XX base presents an positive the provides that rates insight into analysis of on NMFC’s earnings. interest

as well into updated base the impact. portfolio to increasing this as that the our page We clarity rates impact timing more have on of of provide

XX% XX% As fixed floating NMFC portfolio rate. liabilities XX% is loan rate XX% and rate, our while a and floating are the reminder, rate fixed

Given this and capital rates. are to we long increasing thus have material mix, positive structure LIBOR exposure

rates, a exposed of being increasing positively Despite reasons. is lag rates in two the higher there for to flow-through base

in to choose rates our compared The X%, X-month that many equal. realized during $X.XX lower rate else on X% were contracts; nearly rate of rising being mismatch delay generate liabilities. quarter both selecting have and caused of average SOFR points assets was XX than average uplift impact earnings, material on and our the result an base a our which should can SOFR to in more borrowers by hypothetical intervals. liabilities. the headwind our This at base QX liabilities which we to where rapid a risen or temporary now per rates of X.X% on First, a basis scenario rates all was second, X-month reprice base share assets the

quarter. detail QX we left book per XX, share QX. Starting NAV the Page changes that we page, more credit-driven show by value fair to this decline $X.XX present from the in value $X.XX the our on behind positively of side impacted to Turning

XX/XX. all to well-performing based As relates book our spreads the were $XX.XX that decrease of at our to actual of value, if compared It the balance keep important NAV market is on Steve overall the rated higher mentioned at to par we as fair would note value valuing, and of names to at be loans portfolio fair XX/XX. $XX.XX current of green our value earlier,

believe will from benefit converging these is While book we to value NMFC’s quality higher predict, to par. the that hard names timing

credit Page inception. NMFC’s performance its XX since long-term addresses

show of state investments of we where non-accrual. the have of non-accrual. page, side on of no the side over $X.X fair on at placed credit total current right less which our of left million Of new performance our million the we NMFC’s or of portfolio the the page billion on quarter. investments of with remains total inception only have strong. $XX portfolio, the billion have We have the or XX-year become only value, shown we in this had been X% the history. of currently made cumulative non-accruals, non-accruals On million XXXX, $XX losses Since investments, course realized of $X.X than the $XXX X.X% our

next shown in page, As by default losses the the more have elsewhere on portfolio. gains than been realized offset

XXXX. tracks in economic The chart performance since company’s XX IPO on its Page overall the

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

our of by line This cumulative net previously realized the On show offset from up by million, $XX a focus million on the in valuation cumulative page, have which of $XX million increased that of blue, changes million items is portfolio, cumulative highlighted this we gain since largely $XX half last $X inception, on driven gain quarter. unrealized we quarter where lower discussed. which we depreciation the realized is about below by

we fraction million, how since On IPO. the investment income bottom of and just a unrealized at of $XX have yellow, the billion realized remains of generated loss net we in tiny show $X.X cumulative stands the page, net our which

look very forward, reversing quality loss focused team throughout remains credit best-in-class the our the and on small we As cumulative portfolio. maintaining

very has strong years stock return Over a which compound shows since generated XX%, NMFC’s detailing annual period, this XX over cash IPO NMFC flow-oriented represents XX ago. return. chart of a its Page a equity returns

that last the most index peers compared and long indexes equity has public to have. at months, Over exceeded have as performance as favorably of the well BDC materially for XX been an as as we that index NMFC’s least high-yield has of

originations originated of In to verticals, QX, services. growth services defensive keeping our $XX us consumer new the primarily end range. with on activity. at invested loans financial We software, core high and including these Moving funded repayments, million we of leverage our origination in fully

first than equity X% prior slightly Turning are SLPs the two-thirds lien are of nature. of positions, portfolio the of more inclusive largest net to page. the is comprised show lease senior is that the asset of where our Page investments, of right Approximately on XX. our which in our of mix consistent side and net We shown with quarters lease

performance operating assets. monetize environment, continue investments certain and equity solid we hope to in book Assuming drive valuation to and increase could medium dollars positions in these of rotate the We a cash-yielding value term equity and these into believe value supportive those appreciation.

we over quarters. fully to realized example, our in next Haven be an expect As two equity common the ownership

shows XX the income of Page remained and XX.X% market helps favor the lenders, in in target. from that Spreads remain to net investment the NMFC’s flat continues support average QX. yield which portfolio our supply/demand wider imbalance

and scale of the highlights XX Page trends borrowers. underlying credit our

million. to weighted the average of As increased our EBITDA $XXX can quarters the you borrowers has over several last see,

New maps against to be defensive else knowledge, equal. believe we all marginally growth internal that safer, While foremost larger opportunity and concentrate our we first criteria borrowers an how tend Mountain on and

also X.Xx show be interest an SOFR stats rate have average rise. and the the has slightly consistent at compelling, the move perspective, on X.X% leverage on portfolio X.Xx quarter. based portfolio of from we expect have We and an seen Loan approximately to last quite current quarters. coverages last implies base at do as interest portfolio. reset as we coverage company relevant XX%. interest modest across loan-to-value lower SOFR coverage the rates. on We that coverage continue leverage to values The LTM average over just coverage EBITDA. XXXX interest to From compression has been the three contracts to today’s in X.Xx weighted Based sensitivities run, interest coverage declined Portfolio

companies of valuable portfolio created However, our to we negative this believe the a growth profiles the earnings in trend. offset

funds companies. have investments portfolio for conviction portfolio total XX, XX% illustrated as XXX account The names. across inclusive diversified our Finally, highest SLP top fair value of Page XX a over on represent of we our and

turn now Shiraz? current the our our I CFO, results. financial portfolio discuss will call Kajee, to to construction and Shiraz over

Thank you, John.

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

fair total Moving results billion, at portfolio $X.X billion statutory in on over investments to Slide value The $X.X total debt and of December of $X of had financial billion, the assets at total liabilities XX. was SBA-guaranteed $XX.XX with XX or ratio quarter. $X.X excluding value million prior $XXX X.X% asset statutory end, $X.X down from debentures. of or $X.XX billion, drawn At quarter the was Net was outstanding our billion of per share debt-to-equity X.XX:X. which

is available net leverage leverage of cash target X.XX:X our range. However, sheet, on within balance the net

volatile slide quarterly On our measure NII to believe that and Slide investment line, unrealized is performance. the line. and show adjusted This can we XX, We we that our results. realized most net of gains the our highlights stable losses the quarterly while appropriate be below income generate above income statement continue

increase higher offset was interest income primarily earned investment This lower quarter. quarter. were base from increase resets, $XX.X $XX.X prior we a debt. net due our this approximately increase $X.X driven by quarter, income $X.X million quarter-over-quarter million, primarily rate rate fee higher of on expenses floating to Total current from the base For total million rates million, the an income by

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

fully to that cannot important previously share forward It and this of a reduce power investment to the pledged recoup also expect use have of incentive if Based period on waived. support not the needed, to do pledge. during to the as dividend. quarterly business, per $X.XX adviser note earnings our fee, this is fees we We the view

share. NII was $X.XX share quarter weighted weighted per average for the GAAP average Our per

value one-time represents share, $X.X current – weighted dividend carrying down non-cash during $X.XX average been including NAV. has of of which investment our we The excluding $X.XX of to NHME X.X% exceeded XXXX charges, relate per share. earned a which to have we a marked items that only regular one-time per by majority million, challenging QX the which However, just of XX%

we $XX.X write-off to periods prior chose rebate We income we with income proactively the be offset PIK determined And to this at consistent accrued off reevaluated our our PIK year-end. with shareholders. fee incentive a $X.X practices, write our a in income as to result, also And to million uncollectible. and of million likely prior elected

performance like of give I’d annual XXXX. XX, Slide On to our for summary a

the net $X.XX $XXX of For investment XX, year weighted $X.XX and dividend ended per covered total income December investment $XXX adjusted total or This paid million XXXX, of XXXX total of net million more in expenses over in XXXX. than million. our average regular results share, which income $XXX

recurring total XX% of income this predictability over As historically quarterly shows consistency our of recurring an quarter, stability At Slide our in We is demonstrates is our cash. of this see regularly believe in average, investment is investment our income income nature. and XX% paid the XX% XX you’ll over of income.

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

exceeded QX $X.XX This quarter, by adjusted regular per share. NII dividend our

For share, has declared XX, of on record XX, we Based dividend March in of NII be our which per will again of estimates, $X.XX regular share. shareholders a March $X.XX per our on of will preliminary XXXX. to expect Directors QX excess XXXX our QX XXXX, Board paid on be XXXX,

regular are that, XXXX beginning dividend. in supplemental to to least implement pay out of program Given XX% at our excess dividend any in we earnings of pleased our

expect We second made distribution first the be in to the quarter.

into our on over at we borrowing On financing had limitations. account sources. base debentures, available highlight million quarter SBA-guaranteed total lines $XXX $X.X borrowing of end almost Slide capacity subject to with Taking revolving we variance XX, billion our

base earnings an have floating We and debt of rate XX% rising fixed and continues mix environment. the tailwind rate valuable in debt be of rate a this to fixed

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

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

laddering to we’ve As better manage we’ve of debt liquidity and matures or on XX% debt at issuance, our successful XXXX. maturities diversified after our our been approximately

recall, million maturities. in may a $XXX to XXXX convertible October you we note As our address raised

quarter end, additional we the repaid maturities. earmarked of post such, notes and remaining million As have unsecured liquidity for XXXX $XX matured that

us credit debt continue unsecured access Lastly, the maturities in we investment-grade provide most to our various ratings explore markets, manner. cost-efficient to multiple to further ladder our and

John. turn that, With to to like over back the I would call

Shiraz. you, Thank

XXXX, our strategy driving transparent As we of growth you of to dialogue to shareholders. value risk-adjusted the your support well look defensive superior days an and once for our Mountain open and maintain returns execute thank stakeholders in maintaining course out positioned over again is New are our we all for long-term confident ahead. while and with the forward to look We

turn back operator Operator? to things will I now Q&A. to begin the

come first with sir. Lynch Instructions] Ryan [Operator here Our question KBW. go will Please from ahead,

Hey, good morning.

not which First, to that income appreciate are getting rebate, while you is the I shareholders. outcome cash. way think, I paid an about wanted reverse right for I pick guys and on just ensure of do appreciate is, not I probably fee you account the collect HME that in say, our to that guys the incentive you was that guys fee incentive you income happy probably making the never will

that. appreciate I So

the set Different on would your sure question, that BDCs on if XX you supplemental payout ratio? ask not it but different Can the levels. – investors, to you answers, – at ratio? thoughts Moving that love depend XX just with guys may probably new ratio right talk why get why have a hear decided wrong you at different my set answer though, XX% there to was or different a is you XX% policy. on I’m dividend about just first dividend necessarily

high for of base look see base Sure, out and of I our even capital existence. want investment. was record Ryan, in It’s rates. on essentially, associated and basically these not income lot But terms to to rates mean, complement track difficult that us is higher to we in long is how though we in have And just HME are the continue lot be manner to more when special, with the variable mindset efficient an income we is this best out, thanks and John, of those our figure it pretty the the our for shareholders. to a a returning opportunity going be

special that raising high the deliver over is, so just think too where best cover and variable overall, And out can’t we not too to income skis scenarios. the dividend our we way much the in while all getting

we $X.XX environment. on So justice. to just back we aggressive couple keep I as uncover like but opportunity also relatively feel see really think We in want be some everything rough to next earn cushion of out sheet And was think we We in and have delivering while both be to quarters we shareholders. the XX% the excess return dividend given able to the just good still, all the the over capital in of our balance I provide the mentioned, capital scenarios.

So it’s XX% was just rough justice.

multiple. sense of on help on environment you real you to a average Okay. X.Xx equate looking payments of helpful with makes aren’t and leverage and be directionally more interest managing provided able of interest which see would you kind the an your to moving. average – how explanation. the coverage, a to of uncertain in But to the or stressed just That make I about curve of is higher mean net forward weighted coverage economic guys forward coverage X.X% being in SOFR guys the portfolio risk I But slide rates. and is the pay talked kind kind helpful average going to basis. interest obviously, interest like – EBITDA tails – weighted is

guys look would And portfolio so what I hear, Xx did your this rates percentage did – guys with part coverage? of be potentially would as X.X%, to below love at you analysis, you of interest

number up we the map we at that, those every of here portfolio focus coming interest free companies our And businesses not and if do, almost current one you on is be good revenue we at these focus look and flow. mean are coverage are our is equitized the intently things of on equity businesses And do in. environment that twice cash tailwinds. one on our metric. name place, we you green top secular just is as we I really really name, problem. in growth, mean businesses. heat interest coverage we great very essentially that companies monitor our things is in a I think really, stability as the which position on I about if layer going just and majority XX% more is in The the looking margin the every which when vast is thing debt, that backing kills just really we operate businesses And than with have are on sponsor’s much that have focused to with really where even volatility and interest problem way

So, about is portfolio is I positioned our the way think that well this just environment. very in

in industries. are right the We

that companies free We still growing economy have in we flow, the though sectors. even is and that cash produce have are certain companies spotty

metric feel really for the it’s comfortable that our majority that really billion being think so of of $X.X portfolio metric accurate I – an And vast green our about. as names. a all we about and And really

I And of helpful. the the last you had repaid unsecured That’s was notes mentioned then January. in $XX question Okay. million

your the feels XXXX. credit credit facilities, maturities you liquidity that be million available look tighter not to that. I forward? due facility, you – year? You you going the expand like that Is capital, point guys is you these about in credit the on total would believe start the guys to buffer to after guys credit facility a enough availability drawing on you But to would forced feel there the Do $XXX on just have said expand facilities. you of you like have the does you credit these from on get on throughout it unsecured – commitments feel give little cover when anticipating remaining to would the notes by notes. are you facilities – guys do guys facilities like draw repay guys but repaying coming on more credit the have to And to the I under unsecured it available you

Yes.

– rest coming we million, million we the think so I about due. have the $XXX for of $XXX year,

the have with credit deal We that. to availability currently sufficient under facilities

unsecured So, not due better. good, perspective. rushed there potentially up is at still pay debt. We could else debt, down leverage do again to financing they something the to we we we feel at do we the unnatural least debt are when replace environment something But and lever come a draw the on might are looking back that facilities, from down when

looking I the unsecured to available at think So, what feel revolvers to currently we us. continuously on both have we availability comfortable take are at care and to secured year. market the need see we But what’s least of enough we to this

de-lever most repayments do come other some as robust have are well while obviously it’s repayments, a near-term can of repayments we that’s overall to we expect modestly environment this bit, demonstrating some of to profile that repayments one And are we and that – thing, also address position. liquidity through. earnings another source for add those is feel use we now, to address the might not just as the we funds little I which given to

So, I another sight don’t that important want to quiver. the lose of in arrow as

I appreciate today. Understood. time Okay. the

Ryan. Appreciate the Thanks questions.

me. session. Pardon conclude This [Operator question-and-answer Instructions] our will

next America comes ahead. with Derek go Art Hewett pardon America. – me, from Winston Our question Please with of Bank Bank of

dividend? value sort there and so that governor supplemental about you the book morning went would where impact you dividend? if a more talk Could lower, the little that bit the in any were unrealized Is Good for supplemental a you of losses situation calculation everyone. had some

question. this Derek, Hi is Thanks John. the for

out So, XX% using to XX% over just one – special effectively to take, as book terms company would supplement the other we increase dividend that in earnings, we in supplemental the and dividend. prong pay stay of enact Steve variable in where we go – and chose the within the the value. of our mentioned, variable XX% then supplemental And

our test. that And dividend did be we so our us. mark-to-market changes like follow this and ability separate. that prong the didn’t we is, real reason And that affected don’t is modeled easily our to I not The non-accruals the by we And also which do more analysts two-fold. or dividend pay affect losses, the by to is One, wanted is to we policy pay a little that dividend and bit necessarily have feel second the to guess shareholders ability dividend. a

confidence in very to our it have we keep and we book, So, simple. want

Okay. Thank you.

Erik line come your go from will Erik with Our is next question open ahead. Zwick, Zwick Group. for Hovde Please questions.

the morning. Good could in and release optionality some press some notes capital to about if option environment, the uses the the to how pay-down maybe discussions earlier thinking I in maybe are the allocation the about liquidity year. the Wondering sidelines of I you of am you some mentioned to back the keep you today? just you. remainder uncertainty in on opportunity or the expand shares on and of this buy of curious that with regard of does Thank economic

Thanks is this Rob. for the Erik, Hey question. Yes.

between XX% XX% about when thinking talked buying of and NAV historically was below XX% have and the shares stock back We certainly of about NAV. it

guideline for our that that. think remains I

consider one well excess and priority a and if such further the to dislocated, would got our material liquidity, that So, the Obviously, the moment in have in investment-grade it’s to it’s Obviously, not is maintain liquidity stock past. the incremental market number as the really be operational we our in we to But maintain we intersection dislocated. of be way as had leverage this really something it’s in liquidity time. rating. became having us our as having like done

of we super obviously conscious hyper as well. So, are – that

likelihood. near as But any don’t markets medium-term change can moment. I to see at of a course, So, that the

the is always you on So, something will. it radar, long-term if that’s

helpful. to for rate And That’s would Thanks. raise or you to if there, tenor able more When repaid unsecured chose debt and went environment of not kind curious the January, curious just are in you of gauge either to today, additional demand market because the not that. just the the of if still the all be one to me. notes am to there the you what market out see, opportunity I

So, open companies continues be be the perceives to credit the that for good to risk. market market

in are camp. that we think I

We are market. the constantly evaluating

segments have an discussion. we multiple that confident and market, of very access just it’s to the are We different ongoing

directions, choose feel we when have big upcoming we and lot liquidity of look we the the capital options the really, at we maturities to of So, at in go allowed – the think I really we debt unsecured good secured to convert our we of And different different very whether from. Shiraz about have etcetera. look of said, a it’s just addressed about that in that market, a think think XXXX chunk can overall we a magnitude market, convert it market, as and and lessened that lot when structure, we our did, really

taking my for questions. Thanks

will ahead. question next KBW. Please Our go follow-up be a with Ryan Lynch from

that on your line been being is curious versus one are reset basis? on had follow-up as how at look of am right being as on are liabilities a the I a as the just provided working? daily And far your liabilities a basis? from chart are basis top #XX. to then reset three-month just assets on the it’s slide, of guys Slide reset your the This slide being liabilities, quarter six-month assets kind last as well. daily your that I on Is you I resets And

that. can I take Sure. a shot at

a it’s In mix. being some one-month, cases, three-month but are basis. reset six-month a to on Assets

LIBOR And biggest is so one-month daily there. basis. our Wells liabilities, and to you the on have is that are right facility that Fargo, On with a we reset

that I’d mismatch that one of is this see. driver number So, say, we the

other way, as for show on we Now, Page when will the as been us. has continuously But go a be up, good rates XX. it headwind it go rates

switch if to have your on the if spread all switch resetting largest daily then your be of so monthly basis quite monthly on a ability to borrowers a other won’t if big most do positive resetting you that to is reset? but basis, a have the the will facility rates still a Do go your nice borrowers way, spread as

Yes.

most ability borrowers six-month. So, do have in one-month, the three-month credit to agreements or

at at decision they don’t all the same make of decision And a borrowers don’t constantly And that’s once. are all CFOs so making. this that our they make –

one, mix. choose deflationary in sort So, credit base our six, facility that sense. whether three Hopefully, the daily of re-pricing context makes it in main of the regardless a But CFOs it’s tailwind. a be of environment rate a or will

sense. makes Alright. that clarification. the Thanks for Yes,

Please will Bryce And B. come our next Riley. with question from Rowe go ahead.

I about maybe the morning loan Good senior to ask wanted guys. funds.

You funds with had just those see Rob, on-balance that you kind from same kind of assets. within senior or a in dividends exists if that kind of the your nice of sheet John uptick loan or lag funds curious programs.

that in the the It’s leverage senior actually the in pronounced, a namely or [ph], LF much matched. is the funds loan less loans invest syndicated lot because more SLP

on just So, leverage I think a less guess the X:X than funds the it’s when X:X. really about little in average or you the bit overall,

the just – one less to generally, our only does we re-price are daily that And the so basis. dynamic. SLPs just sensitive a on And of

for Okay. more And then one maybe me.

in here nice quarter. had some the You realized activity fourth

to about kind of of what’s looking here – think last you from that? kind There in – of of monetize. you Thanks. what’s being November’s help November quarter, equity the we couple actively highlights to over I of call, of out in driving sponsor investments. some to Can quarters. look talk things, talked these able monetize some that as next side you that Is maybe or are the about were

Sure.

Page listed that and of control on equity investments least lot really the at So, the or to have ability are influence monetize we have we a where a XX.

names names see on loans. that so Page were yielding that are in medium-term then focused cash to and using And reinvest over selling those the XX on the you proceeds the

an it So, is opportunity.

see XX names, be which that drive you value XX will a cash-yielding another Haven, And either other PIK these monetized that really you there I could next to assets think think should at be from the assets could of assets. when and yielding over we can months those then monetization, months, book of our of the to non-yielding or evolution first positive look be The that.

it. Got

care. Okay. Take much. Thank you guys

I like for closing to our would will conference Kline remarks. the turn session. question-and-answer conclude This back over to John

Thank much our forward speaking and joining and you with look very to call, for quarter. next Great. time you your we

has much conference concluded. for you presentation. Thank now today’s attending very The

lines. your disconnect now may You