New Mountain Finance (NMFC) 9 May 232023 Q1 Earnings call transcript

Good day. And welcome to the New Mountain Finance Corporation First Quarter 2023 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]

is event this note, being recorded. Please now John Kline, would like to to over conference the President turn I and CEO. Please go ahead.

good quarter Thank Finance and morning, to Welcome you, New Corporation’s first XXXX Call. Earnings everyone. Mountain

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

Thanks, John. Good morning, everyone.

of we that Mountain that and unauthorized presentation, today’s this Before recorded. the Finance I broadcast everyone webcast any form available is of earnings replay in and about to call property press are our Information being advise is they the strictly in New into release. call Xth audio that prohibited. Please Corporation would get note any like the May are

like the disclosure of in I would release harbor customary forward-looking two press page to the to also statements. on and presentation our safe regarding slide attention your call

filings you conference and projections, that materially differ forward-looking and call include our statements important projections. refer that SEC the statements to actual and most ask we Today’s results to for and webcast recent factors with cause may could from those

at our update presentation of visit unless be projections slide www.newmountainfinance.com. website or undertake throughout will required law. statements access not SEC latest call, our copies referencing forward-looking filings To we please by do obtain to and our We that this the to to

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

on report. a than share, to fellow to It’s address Laura. covering some you net $X.XX dividend as per the first $X.XX I March as both all per paid investment more XXst. be share was that NMFC’s quarter good for shareholder. believe Chairman cash news and Adjusted have income was able today, we major to in Thanks, our great

Our $X.XX of earnings to $X.XX of QX QX over year and by XXXX. compared improved last sequentially

was per X.X% increase last combined credit market value reflective or asset increase of compared with share, affected $XX.XX a strong continued spreads, is net fair The modestly the performance, Our assets. value positively quarter. which of valuation tighter to our $X.XX

the in We we industries overall today. think loans times well right conditions of all positioned defensive in in believe that our challenging are are and particularly growth macro attractive

manages payment of equity never a firm the New now $XX funds and an Mountain’s have over assets. had billion interest private or bankruptcy missed

page net Similarly, XX cumulatively NMFC as since shown on has of inception. losses default no the presentation, realized experienced

substantial of realized by per have Our we for a earnings X environment gains been since net continues points positive rate to basis more default be elsewhere. floating quarterly year our loss lend chiefly than on rising The realized offset rates.

As current the page to other per constant. continue to share rates, presentation dividend interest hold we factors $X.XX shows, if all earn out at base XX our expect of significantly

the in share of first dividend $X.XX per this per make quarter, will variable of amount Given our our we supplemental $X.XX earnings share.

of earnings total the the for will dividend share quarter, all future. balance holders dividend equal to out high the is our additional on these per This in earnings will QX remainder XXth. pay in will NMFC in range. excess the to distributions and is record may half The June $X.XX. June our as of $X.XX quarterly which of of the of on of dividend raise be end XXth the sheet to of at This $X.XX base excess paid remain this

current dividend approximately $X.XX, yield. represents at Our annualized dividend XX% yield a

incremental per $X.XX rates. addition a $X.XX variable payout QX. share generate supplemental by dividend to is to in dividend, $X.XX This supported to strong base forward per elevated credit we performance continued of and payable to Looking our QX, base expect expected in share

We believe and our team. quality NMFC of strength of by the driven is of Mountain New the

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

high When utilize credit provide decisions. make our investing pursuing us and experts knowledge extensive industry very efforts, expertise group our we of to to allows that underwriting informed, conviction

our last months, quality the team. continued of Over have six overall to expand the we

COO Laura our Regarding leave. our Holson like maternity we welcome credit specifically, CFO, from to team would and back Interim

Additionally, team the members in finance. operations of fund we have credit new multiple and hired areas business development,

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

that, let to call turn John. With the me

you, portfolio Thank details again, for morning everyone, Good like and metrics. joining our more and investment us strategy, construction you I would some overall to today. Steve. thank on offer performance

a to cash non-cyclical Starting of drivers, and highlight are industry which seven, defensive conversion. by disciplined stability and on flow These sectors diversified revenue page characterized durable selection, industry growth free exposure sectors. great predictable we niches margin list shows streams, our

avoided in are today’s secularly to economic difficult have volatile certain and successfully more underperform landscape. We cyclical, challenged which industries,

operate Our confidence economic a environment. strategy our over as XX has us been public in company consistent it to and with allows years any

by consistent level show shareholders. our of of XXX% delivering snapshot a a enhanced Page to to and losses business of we high our long-term our track paying where shareholders avoiding excess yield record out income eight provides

the supportive owners lend industries financial are sponsors are is in sophisticated our portfolio is business. junior purchase current that who with and is to exposed make. XX% risk we where loans companies to dollar of to the well that We by paid the primarily owned last that significant capital good and of approximately businesses performing Our price for

names the risk portfolio decreased red have and over up Turning percentage to over Meanwhile, portfolio rating from to quarter. yellow, XX% a green our The XX% as last of risk within page internal nine. We quarter. now of improved our exposure last orange our of rating, portfolio.

$XX of only decline. million and we rating the had million in Overall of quarter, ratings improvement $XX

names marketing to derisked by of these most of represent and and than within down XX% orange Our challenged red book value we X% par. our names fair only the categories NMFC’s have less

names not So even represent do though our value. performance to book of these material risk be continues to challenged, the they

its XX. The shown updated in on heat map page entirety is

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

names, Permian. and ways businesses at have goal the significant as continues team or energy the underlying to remaining and performance with time either Our red exiting of of orange individual spend we finding positions our the on improve UniTek and to

recently much XX months headwinds months XX as category operational Both our to to due green have prospects. are significant now ago, which but future increased of had as better and improvements, these earnings led in companies to

at in Both and that we believe businesses over grew XXXX in momentum will XX% continue XXXX.

on of $X map, Great fair shown we one Expressions representing the heat just right put As in this million of the did name, nonaccrual quarter, upper value.

Turning to in the showing a on or page book value. the in an value. XX, positive $X.XX per left, increase bridge $X.XX Starting change provide NAV X.X% credit-specific book we share movements represent

an Expressions value, per of over the value base improvement $X.XX a valuation per earlier increase share additional in and both quarter Consistent for spreads slight $X.XX Great book dividend $X.XX share. and in book in accounted A in UniTek’s share comments, names. of by aggregate Sierra, red offset in credit per excess the drove an with decline my earnings

$XX.XX, It’s value book the loans important our to if at value, of would at to at all green our par compared we value keep that the of NAV note our $XX.XX were portfolio to be and of actual rated fair balance X/XX. current

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

On of the the the the of or credit left fair cumulative we portfolio shown NMFC’s page, of we of show with at $XX value, the where remains $X.X currently billion on X.X% page performance side on the the current right side state of portfolio million have strong. non-accrual. investments

we or total XXXX, losses of made total million placed in $XXX X% have million have about of on the only inception investments course Of of become which our non-accruals, the of investments, almost only our history. been XX-year over billion $XX have $XXX non-accrual. realized Since

default of as this representing allocated of initial we investment $XX did of increase million that our into losses million loss original realized representing clearly do we of expect realized disclose could these our loans. exit not so do -- this impairment Total $XX made that Ansira, our to proactively we we XX% expect shareholders to investment we and our quarter change category. to when NHME, We XX% suffer an

these Offsetting of of were $XX Permian million realized movements a out loss. re-categorization of

full have of line Permian’s Given a possibly to on and turnaround sight gain. the a we that material investment recovery dramatic business, now in

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

only to dividends $X unrealized since in IPO. have cumulative we over gains analysis deck. million of net XX, million of billion we to page for included total cumulative detailed $XX appendix shareholders, netting billion NMFC’s present On created paid of Since $XX while net economic this realized and is shareholders. of performance The performance the of $X.X value inception, generating overall depreciation,

long NMFC’s cash shows index period, a have. very at NMFC detailing have a since public this years return, yield an in index who equity return been BDC flow has annual the its well XX Over which oriented a chart high X%, as of stock return represents compound Page of XX IPO we strong peers least generated ago. excess both of and as

Chief the portfolio Financial over current Chief Laura our call turn I and Interim Officer, will Holson, to results. to construction our and Operating financial Officer discuss now

to and Thanks, lending focused direct the continues John. look for The market outlook sponsor XXXX positive.

pockets where flow opportunity remaining we available primary loans is at While down market make are remains direct have there market selective. financing while activity lending yields attractive overall, the of the the very for and to sponsors deal

seeking also credit to lender-friendly M&A. well-performing based loans sponsor on Perhaps accretive XX% company. in to is importantly, the high, XX% remain remained to the more of equity to Board, the contributions across although to enterprise portfolio companies see market consistently perceived incremental opportunities good there We existing pursue have make value increasing of the representing Yield structures most bifurcation quality. continue

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

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

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

with have XX to average our rates, rate rate points lag the base on on flow-through levels, basis of an assets current SOFR we rates our base previously about QX, on base about saw In versus closer X% of of current asset than discussed lower liabilities. in side. the and particularly average We X.X% the

area, rates exceed extent investment our the and X% continue rates to else settle still regular the expect see on the projected the net in would To to to If bottom X.X% income further NII. follow shown to all dividend benefit equal. expect to chart, we we LIBOR/SOFR rise, curve our as

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

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

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

million we $XX our million from Haven and example, Friday. realized an XXst, position past an will March over another this $XX recognize gain in a distribution As of additional just through restructured have just about received we

be realized the remainder the fully to expect quarters. few We next over

the as XX curve, which slightly base on lenders, NMFC’s investment support QX, given and to favor well the yielding the target. portfolio the XX.X% average to the shows QX Page net shift speaking, market income remain XX.X% that repayment as yield continues spreads in decreased has the a of high in imbalance our in for wider help from Generally asset. rate supply-demand

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

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

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

be relevant the coverage interest been company Loan stats last and the the the quarters. Portfolio an values loan-to-value XX%. quite leverage has has portfolio leverage also to over We average three to consistent continue compelling portfolio. across of over just show and current

X.X coverage SOFR move rise. average From do from over on times today’s coverage contracts the reset the interest slightly at quarter. an as of we We expect rest have modest lower weighted portfolio interest declined XXXX to coverage as rates. interest seen to compression base last X.X perspective, rates The times

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

cover financial now results. will our I

more on that For report quarterly the details, refer Form please the last to evening was our filed SEC. with XX-Q

had the $X.X and March billion, fair of total XXst, As $X.X outstanding liabilities billion investments drawn assets shown million statutory $XXX value debentures. on billion, XX, at excluding guaranteed of at debt portfolio with of of $X.X billion, SBA which slide total was $X.X total in

to time. $XX.XX up At $X.X or prior quarter was per share ratio our X.XX X or debt-to-equity times Net quarter. of end, statutory asset value the billion from $X.XX X.X% was

leverage times target range. time, sheet available However, net end balance the net at the of high X.XX is our X cash of to on leverage

quarterly XX, we our income slide statement results. show On

reminder, our This below a the net line. while and most that income believe line, measure generate we we unrealized the to can quarterly NII investment is realized highlights continue losses slide the our above adjusted of that As be volatile stable gains appropriate and performance.

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

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

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

of the our exceeded share. QX adjusted quarter regular Our weighted $X.XX average per NII $X.XX for dividend was meaningfully which share, per

demonstrates, XX is investment slide total XX% income of this our As quarter. recurring

historically of recurring We is will You consistency stability our and income our shows in quarterly XX% income over XX% in paid and that regularly our over investment cash. average, believe predictability the nature, see of this of on income.

our of names. our quarterly is income rated Importantly, generated over XX% PIK from green

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

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

per of record $X.XX regular share, as Board June our per again dividend will XXXX, paid has of declared to well supplemental XX, QX For on a be on which $X.XX of Directors a dividend XXXX, share, as June of shareholders XXth.

program of pays dividend reminder, QX earnings the dividend. QX of paying of a dividend share in by XX% $X.XX Since our we per dividend. earnings dividend As per exceeded supplemental the supplemental share, regular out regular at any are our a alongside excess least $X.XX regular the

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

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

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

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

laddering at manage matures our debt and our after diversified been XX% or liquidity of over our debt maturities have issuance, have successful we XXXX. we As to in

quarter, maturities. upsized ahead our our the XXXX notes During we of convertible XXXX

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

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

Laura. Thank you,

our again of of returns all the the XXXX, course great your to quality over for with dialogue maintaining our forward out are our in believe of portfolio to look confident adjusted investment remain open we look once and on we and transparent you shareholders. for track we As deliver risk thank and an support stakeholders. We

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

the this remarks. Instructions] closing no showing time, over we like John for I any would to At Kline [Operator conference to questions. are back turn

queue. one see I question in think I the

Oh! There Lynch KBW. just is going I one ahead. announce up. to am with Please go popped question Ryan

Thanks morning. taking for Good Hey. my questions.

be quarter? make one had, in a you to that the get second from that million just I I want heard X correctly? equity First say received $XX did was if Did this accounted you of should sure and investments, And then, I investment distribution correctly. what your to expect that from for so, we how

Yeah. that Yeah, hear did correctly, Ryan. you

This addition QX. this So an additional $XX we we this received distribution equity an one that so Friday million from have will the equity past that in up which payments position, was that through for QX. in received was our an Haven on was show as and distribution, already to

a, will Will will the would that dividend as be accounted like, it how a show through be it Okay. for, that gain, up realized income line? come

gain. be will It realized a

Okay. Perfect.

And valuation. noting we this is It’s terms, QX valuation had Ryan, is that the correct for in the round John. worth

there event, but which won’t change, is be a So a it’s realized great.

if maybe and is on role how, what business? the that intelligence you Yeah. minute. being disruption I some some headwinds some of potentially of Edmentum do think to Chegg, that about software the could space, then recognizable the is That’s artificial impact any, for you near a bit for causing most if space. business. companies publicly a out kind could get the with potential And Edmentum’s Yeah. artificial wanted there, the of that of Totally details talk little traded just in to been love I’d provide education the of from content education a intelligence There’s education background it.

the Hamwee, sits with Rob Board. on us who’s Ryan, So, today,

turn I to that him. question will So

weekly actually because is good it something is The well It’s artificial and topical actually Hey, question. actually in interesting. staff our is yesterday that, intelligence. Edmentum I at to John. meeting, Thanks, benefit the so Okay. addressed from positioned trends very It’s a Ryan. headline

because quickly digitally tremendous statement, and is things native assessment volatility primarily that Edmentum are Obviously, how for around market. there’s a K-XX the provider of moving. But curriculum

into are And digitally set. most in they non-generative has and because and been the really time software been first incorporating recent a they in way, product AI AI a for on long months, are product -- material incorporated recent they the AI company they been their have native, footed the and generative a about have front thinking

our is, are truth a sell the right? districts. think And consumer-facing product, that’s facing, We enterprise to when Chegg, products like, about right, you

So as terms of the a districts, XX-year-old will curriculum. and But get ChatGPT they don’t as kid they assessment move in for quickly there. embracing

And so requesting the where it’s they help requesting that. the are funny, but and is aren’t, now, right plagiarism anything would Edmentum accept to from side able and they to requesting are provide most what on they

we evolve or provide well three software tutors out to are using to to our answer years believe do provide believe we biggest we and our children. as as And there to to the effective to allow driver use assessment that, the recitation going look But years, be two beyond ability papers. writing to effects is software personalized ways an as districts to that

So forward. but AI of be to longwinded Edmentum excited we going pretty are for tailwind about generative the ability answer, a

in like, though. helpful. with well, right student. on a want artificial That’s intelligence good that, say, directed follow-up Chegg, headwinds spot. just things that, it But space think in And that just it’s pretty potential even the doing what of are I it’s now, how a this potentially, that, the uncertain to that given is on that that changing facing in business businesses it’s to I to pretty weigh a pretty more but world on the question you some today, are so to are concern could those There fine protected, multiple going could different as maybe like sounds though do because forward. sponsors yours? a year mean, now, multiple that Is from two have looks want a low are they or going space of on business quickly

to think, concern, as will by integrating how again, multiyear it’s map a AI opposed I our positioning articulate actually drive being as mean impacted I our to negatively given actually, always road to ability the revenue But suite I into Ryan. it. product I and think, revenue a

-- how of think we day, have growth, is function AI At I the and the as do tailwind this can actual real-world end multiples for when we of evidence do a well position go but not just exit right, potential to Edmentum. articulate articulated, are of a

new we beneficiary And right? on that, no drive it’s both how a ability evidence and down, guarantees, Ryan, to positioned are is but brand multiple are. I as successful development, think we a will with I roadmap, opposed well victim. actual the demonstrate what a And very think, a again, ultimately, depending do or be to up to

Yeah.

the getting so the much that all One ROEs thought good manage and ROEs, rates? higher Okay. is at your guys regarding are do if have are more by leverage base comments you business for deal have like for environment. base leverage that in favorite, rates, rates a against heading lot when versus that is to the in and be more today so environment nice high appreciate a fully I to further obviously, done. that you as And that, there’s there that into as are and that if a the but had work operating period, in has the fluid all Would a today you of have I deals understand the you down, environment? deals point base Do counterbalance at not appreciate environment. had are have further big for from deploy and high question better of getting this a would point, we a that, guys cut consider operating I does been situation lot you business the on that I credit ROE to process leverage obviously macroeconomic rates. a I and generating shakier from increased that will this really the ever you certain operating tailwind wanted understand probably levels the where such lowering but that at at you do very that tailwind for into day, a changes rates is, about then know, head rates a just that. we I marketplace Fed leverage dislocation you given working still think

lot, something we it about talk It’s you a Ryan, I up. glad and Yeah. am brought

I of think one thing of just no limited last that’s we happened or the couple course little over is, portfolio quarters the velocity. very see or

we So are into the we an prediction. environment think, XX we entering to I that the repayments and the where should bold get extent than start months it’s that more to get over repayments, more my say to would next last, be fair

assets, that could new we But but delever. to using into to partially money partially see deploy

I Laura are the our as would a very leverage right now, we inside range from be mentioned, end our perspective. of think being comfortable of at range we right high

move very range, us range if So won’t the couple of end make. probably in I course go think that the be that of the could the the could be place but a to of quarters, would of for that over be. comfortable we We a be to next low we middle the could

Okay. banking many if queue. fund the right Obviously, and hear, although which sort or don’t sort both on. anybody there’s compete And topic banks, your able standpoint a because things, obviously else kind have indirect as if the of both one I’d of primary space are then of will obtain impact, syndicated market, competitor know from the the from hold really probably in it don’t as lending you regional in, in a crisis, would as I help marketplace, you stack? are ask way was loan now I even banks whole your can be just to I of in more, marketplace, of in banking a crisis the being in to is broadly CLO at your on bank’s believe and the pullback lending opinion liability are to you is well paper your all, credit maybe direct those going just love they I that the guys impacts, hear there all could borrower which sort love competitive if just your large that. what

mean, U.S. feels and our In place I and everyone for big the picture, U.S. great of that’s for really the middle they room a regional a economy. banks. a lot there’s market valuable think, provide Sure. businesses small in this service I economy, throughout to

leverage sponsor-oriented I leverage about perspective aren’t particularly the When balance think players and the sheet they market, larger from the a regional a been market, while. banks finance finance and banks for haven’t even big

you lot a banks valuable very can have of but clearly, of the of touched bigger it, think I structures are on and syndicated might over really market. CLO the that supportive supportive generally for -- time, be

speaking, there’s think, really that just are direct If a that’s we of competition most I lot deals direct generally the a of fresh right done are where be new in going to we lenders, there by lenders. general, think thing. of and we our period this, but sponsor in are But to a clients, period good buyouts for we see I in are not now time a of time, and know you know

are I time. to And going fees raised better, be capital we great is a know, there documents a lower being direct by better. lot vintage, the And think, is, think of in upfront lenders, this and are it’s as period leverage and of you

or comeback market, I and not here the we a banks not would now, regional see. the the large that on biggest, formation. seeing now, may of right that’s we the as say, are banks, right CLO It’s competition I source think, from from sit CLO we robust

more of deal a big flow be comes even in that that confident part makes as lenders just XXXX, And will so me direct that.

That’s all Okay. I for appreciate those me comment. today.

Erik The next comes Please go with Hovde Zwick from ahead. question Group.

today Good commentary I ask any pipeline. whether morning. given more the that appears over because mix in first industries today? seeing or just now from it I curious mid-term away environment the prospects in short- of about current provide you wanted that the of terms maybe if to the prominent terms you and are that any attractive you the maybe the could of are be staying there’s Thanks. just are uncertainty economic am current to not

picking We slowly. pipeline deal our -- see deal up

over As comments, it earlier New But better. what here I multiple has do months, based depressed. at businesses mentioned my we across XX the on -- Mountain, see been last a think it’s we getting been in little it’s bit

to the lot and to a where for good current environment best prices continues can A our our do want best buy are support so portfolio M&A businesses that within do seeing environment be investments. It at we they companies -- is better that. this add-on to one look of

software. say see particularly have would we starting healthcare space, in do to healthcare real-time some also the little insight portfolio. interesting -- I good in we into recently that’s continue. our have technology a seen And expect that to I activity seen we deals are

we that businesses about think In I sectors industries on really, stay terms where best environments we away for tailor our focused really made that of the we defensive are buying sponsor growth really like are really think, philosophy, from, backed. When it’s great -- hasn’t in today changed. we

have environment. And sort this have margin stability they have these they businesses and of revenue in drivers, growth even

portfolio. as are sectors portfolio. feel want nervous defined we but and focus lot ever us us on a existing of that our have makes so about And it that industries do -- to -- have being want good as existing the making attractive in bad just we as also much don’t to our very We we

And That’s then me. just second for a helpful. one

the million In million in $XX think, terms and August. debt in June I of $XXX maturities, upcoming

like position sufficient I of and the was pay It through. also repayments capacity March then million previously some quarter-over-quarter. that mentioned raised notes looks coming think But you you in down. down you revolver maybe have actually cash in mentioned that to $XX

use is or down pay maturities curious still the to revolver something kind just of repay as to changed So it comments? those intent come the kind last they to or your of due since has

No. Yeah.

I it summarized think you well.

in this the We you convertible to. So raised we alluded as of past obviously quarter upsized XXXX, that notes. chunk

availability good from a the on So between feel capital are comfortable pretty maturities. we just lines, in to our as that, kind position the address we revolving of well upcoming as

last bit their that bit by more of are environment maybe are go into if economic vacation skittish question. bit banks into like maybe we It that, where seems getting environment. little as willingness severe just a we helpful. a are to and to and lend That’s a on little the And if a on revolvers follow-on investors typically banks tighter a more go then the an funded

Just curious longer your mid about your that to thoughts to if term? protracted kind recession, funding into go thoughts business of over a the we about term were

pretty relationships that Yeah. Fargo, we we you banks, Deutsche maturities I had very lines. termed with mean, on we cetera. of feel see have are a we And think, and have -- revolving can strong financing Wells historically, et out Bank, good I the the the couple

more we But have broadly, the we that We between the in markets as to credit we capital good feel pretty access need ratings. reasonably to our will obviously, position be markets -- that be. good and have access investment-grade a the

proactive sure about are it’s we our are something and banks with there. keeping being just watching the very and ongoing eye dialogue making we that strong just the relationships keeping keeping But definitely and just on close a

today. I taking there, Laura. questions appreciate my Thanks color the for

Riley. from B. question go with Bryce comes ahead. Rowe Please Next

XX some you Thank ones the which you. handicap are maybe Good do touch I hold are UniTek or them certain XX point as to had to for are you the on that as of having and curious guys morning. last where not? have am monetization to them improved asked kind gets I investments? of ready equity they on curious, that obviously, of rather kind just months they how what wanted page continue as those Haven the months. recently. with question of about versus thinking of candidates But better you would listed much in equity Permian investments, And monetization to success I have here just topic XX,

Sure. are worth Well, have that, note Permian. is in of It are first meant it’s minority we significant UniTek, the over monetization the would Benevis, I a thing control we with we and others. noting

to not M&A it’s and environment, think, to getting well-performing while And would -- want a say assets. I that, buyers, buy sponsors other are frankly, perfect eager good, I do

exit. mentioned this list I -- list think this and Permian are that among list, that and name to were another seek are that could that we on compelling on structurally advantageous so growing really we have we tailwinds some we the could and term over think there two nicely be UniTek this medium

appreciate that. That’s a I a John. maybe follow-up. then And of bit great,

changes You I have an time, of deck, perhaps, thing market, XX the over red. a mark? and each par have that put last bucket that in first that of par, bucket at where to shown And that’s of primarily interesting orange, the just yellow, spread the the about. Of categorization level XX is relative have green, for months think, green you have seen is kind marked we to months to think that it XX% the

That’s Yeah. right.

the syndicated right, of comparable marks valuation a So, process. quarter and kind assets, loans fulsome the spreads obviously, are or we of to every doing the comparing underlying

some just the par, assets, we have you last XX ultimately as as though recoverable do of alluded perspective. even performing they over a So a to, bit well so marked of market think still or and just kind in get technical are widened spreads these just the months, they down at from are little they

showing I And the value where all did on book green we the statistic of that are excess John portfolio if be in of would think at touched par, mark today. the names kind you

Thanks, it. Got Laura. Yeah.

and our we and in value it’s which transparent that Sorry, is that the fair yellow, reflect underperformance only handle shareholders but to do is comment, sure be think I want comment want about I I is made healthy I to that reemphasize mark, and make to want I for to -- we very our how are exercise. other it aware and this we to when red, think of book, make we orange go names the that, want

Yeah. Great. the I appreciate comments.

Bryce Thanks,

for would question-and-answer conference over our to Kline John to turn session. any concludes This the back I like closing…

Thank you look all quarter. we to for again you joining and on to next call us today speaking our forward

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

may You disconnect. now