Fidus Investment (FDUS) 3 Mar 232022 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Fidus Q4 2022 Earnings Conference Call. I would now like to turn the call over to Jody Burfening, LHA Investor Relations. Please go ahead.

Thank you, Mandeep. And good morning, everyone. joining conference Fidus call. for quarter Corporation's you earnings XXXX thank us Investment for fourth And

Shelby Officer. With Fidus and and Investment this Corporation's Chief me morning Chairman Chief are Executive Ed Ross, Sherard, Financial Officer;

the Fidus Investment press release copy the website a of Corporation is A fdus.com. available quarterly results. the Investor at details Relations the afternoon financial page release company's of of yesterday issued with press on the company's

regarding forward-looking I'd contain customary Corporation. disclosure and also Investment regarding Fidus like Safe The beliefs, call. results attention call forward-looking strategies, flows potential, future statements will included the to information conference to your including the today today's goals, of cash operating on Harbor call statements,

of of replay. X, not the today, statements are believes accurate performance. longer telephonic future these or March webcast based management Although statements as are XXXX, guarantees these information of any at reasonable be may Time-sensitive time no projections on past

a results and as Actual statements. the risks, including, obligation forward-looking and forth with set the company's differ revise factors, Exchange not in filings uncertainties or undertakes of the any other may limited to no Fidus factors these Securities to, materially result Commission. of update but

call would With to that, Ed. over now to morning, turn I Good the Ed. like

Good conference fourth morning, call. morning, Jody. everyone. earnings And our quarter XXXX good Welcome to

prepared the questions. our be market your our have in portfolio financial results and On quarter end today's conditions After call, will liquidity remarks, I'll middle and take happy views we start to cover position. we of XXXX. our at Shelby quarter our on fourth discuss with quarter performance market review and would completed fourth the a then in our lower

Nevertheless, to customized in focus quarter strong demonstrating credit quarter, an and industry ago ability There from deal once healthy relationships environment a over financing same and the us down. again originations provide finding continued activity operate and was long-term that quality cash high-quality year business is to and on we to generate we resilient outlooks. opportunities middle perspective, with a the At know the slow well, that kept in differentiate in sponsors that no models lower to had fourth market. tougher debt quantity, as deal possess positive service companies the our than industries flexible in invest question expertise, solutions our time, we flow selectively

Adjusted compared or was and to define investment attributable gains as excluding $X.XX investment million capital unrealized realized or we income, which share to net $XX.X $XX income, last per losses any incentive gain and share per year. million net $X.XX fee

grew income larger year-over-year. investment Interest due an increase in NII to debt both portfolio in resulting adjusted a higher and yields,

the For the of totaling fourth share. with quarter, net And or value share. $XX.XX year million per dividends $X.XX per we paid ended $XXX.X asset

adjusted the NII dividend. dividend our our supplemental included supplemental and dividend of call, quarter's prior the cash formula last a base approved The XXXX, will on quarter. a mentioned XXX% share, be by excess a to to restored over base applying As dividend Board, dividend for $X.XX continue policy quarter's per of $X.XX based the of dividend on special per

cash special the share spillover per our over the level with We're distributing dividend a in course income of to line bring year. our target $X.XX of

in equal, $X.XX being quarter result, net As each quarter will XXXX. a all else by value drop per asset

recognition second the quarter improved consecutive share Recently, $X.XX the portfolio. base earnings power increased the the of of in to Board per the dividend for

cash for has the of per per the of higher first supplemental per addition a dividend share declared $X.XX of dividend of $X.XX a of $X.XX dividend In a quarter Directors the share. and Board for to special dividend share base total XXXX, cash

payable of as XXXX. record stockholders March of to be March will XX, on dividends XXXX, quarter First XX,

debt of we of safety invested quarter, our margin to provide continuing portfolio terms recurring a income to with originations invest incremental and interest the In opportunity which equity generate for us in million, to securities, securities the of that $XX.X while generate adding profits.

investments invested second amount subordinated four and evenly or in portfolio of Nearly of two million the thirds QX total among spread lien originations $XX.X in debt. Debt first were lien, companies. fairly was new

add-on In addition, existing continue companies portfolio support we our to with investments.

In first portfolio value repayments million debt equal terms for quarter originations proceeds to quarter fourth end $XX.X at and and were was of of lien Repayments repayments. million million equal $XX the to essentially received the of fair totaling in the realizations quarter, we the XXX.X% cost. $XXX.X including of

have in active debt invested new that sold ended two securities companies and their portfolio XX Subsequent and fourth We year-end, portfolio operations. and equity companies. quarter underlying companies to we the with million $XX.X three

million total the portfolio of continued debt $XXX.X reflecting total the and value to our redeploying on of XX% December in total from shift an Over XX% as of XX, the monetization. absolute percent the December in the proceeds to XXXX on mix basis investments from basis or a XXXX. XX, equity investments as fair of Debt a XXXX, $XXX.X success of course of or of total, as the million increased favor

the debt at allocation year-end. XX%. First investments lien of was a debt approximately as Equity as XX% our total the a was target X.X% investments on percentage basis percentage cost boundary of a of within portfolio of

companies to in our energy the and and chain costs, supply are credit portfolio we playbooks developed labor good a them enabling are not overall, with, reasonably inflation our well. shape. perspective, higher is new portfolio cost pretty have The contending challenges, material perform quality and are issues From

of even structure the are There exceptions, our given portfolio. a from would you are especially perspective, our size. But situations of expect for our manageable as course, portfolio those of

company one additional on During we placed quarter, non-accrual. the

of basis December fair portfolio was a on of approximately non-accruals the XX, As X.X%. a value total percentage as

is building high levels back Looking realizations what and our XXXX of debt in late on stands out after XXXX, portfolio experiencing repayments our in and success XXXX.

well. equity of structure generate investments M&A and us gains, that robust income, period incremental investments exceptionally can that that our recurring investment portfolio capital and debt During activity, has served combining produce

equity or XXXX, the XXXX. a have since of In on of beginning $XXX enlarged investments by We we debt XX%. our million $XXX.X portfolio basis cost monetized million

portfolio size as increased our as variable fair of December the XX% XX, also basis We by on $XXX of value million of $XXX.X rate December debt to have XX, XXXX. million XXXX, from a

approximately XXXX, basis XX.X% of higher the to result, XXXX we of of spread portfolio environment. our At balance the debt of time, debt and benefits a the in rates floating entered on XX% our nine with December widening XXX yields same last a comprised As rate the investments debt. XX, reflecting expanded months points as over the sheet

yields our portfolio. putting investing earnings the of has Combination work, income-producing proceeds in power enhanced to and of significantly equity assets higher

long-term. we positioned well generate and remains to result, portfolio asset our over adjusted dividends of a As base believe value net NII to in the excess grow

is though, Even was a than currently year activity it ago. deal slower

through We our to investment a investing experience opportunities. adjusted of the a strict or position and find cycles XXXX, recession build underwriting we have soft portfolio continue regardless further growth. standards us landing, NII attractive and macroeconomic of conditions, past drive whether to

continue to shareholders. of focused preserving our stay grow we our risk-adjusted will generating portfolio, we our capital attractive As for on and returns long-term goals

Shelby the results. Shelby? on to turn operating financial Now over details I'll provide and some call to our

comments fourth and Thank close note, will Please everyone. quarter QX quarter providing detail XXXX. I on comparative the commentary prior you, I'll liquidity more our Ed, with be results review position. good versus morning, and in

a million million from by million three the the primarily a income to in a was cash, million Total partially months $X.X increase for $X.X decrease in income. a $XX.X including December decrease excess ended income QX XX, $X.X offset interest interest due PIK, increase million on a dividend increase investment income, fee in and $X.X $X.X income in and million

increase yield investments, investment outstanding rates increase interest loans. on increase our debt increase driven The given in average as interest in the was balances as variable by well an in in on income rate an debt

compliance fee and a the increase $X.X accrual Total increase and QX, provision, $XX quarter, of million a a $X.X expenses, outstanding. expense driven to by $X.X interest annual debentures million the in including $X.X to SBA tax million related and XXXX than ATM million $X.X in income the tax timing increase primarily to related a for fourth taxes fees program accrual, in the income were incremental audit gains professional related capital million excise million increase tax in higher billings,

quarter of debentures, of We secured $XXX borrowings. comprised million million of notes outstanding $XXX.X the $XXX SBA of debt million of ended with $XX.X million unsecured and

as was December ratio X.Xx statutory exempt SBA XX debt-to-equity of excluding leverage, X.Xx or Our debentures.

in any gains QX, share reversals with and fee and was excludes $X.XX QX. QX. gains in to ended outstanding per investment on investments, the The losses Adjusted line capital XXXX. was which accruals share weighted on X% was per three NII XX rate $X.XX for debt December as average interest versus per $X.XX XX, our months income unrealized realized December or in of or share attributable incentive Net NII,

in $X.X Plastics realized Holdings. For the investment of Corporation, the our partial Ohio Transit recognized losses gains related XX, offset three investments of equity Medical December net debt we in months and exit approximately investments Hilco in Equipment by former of Midwest to and the ended on sale million [indiscernible] our

we share. As Ed per cash XXXX, in $X dividends mentioned, paid total of

of share pays instead on common on retained company XXXX. deemed at corporate as declared gains long-term the When currently XX, of company stockholders. tax designates we common federal addition, capital In a December a to shareholders $X.XX of rates, a stockholders, of deemed paid cash distribution distribution per a distribution income for behalf U.S. record of the XX%, net

to deemed have received deemed capital and by to actually the company. gain the are stockholders are paid tax a common turn, have is that In dividend paid

tax including tax as claiming common result, that U.S. a credit income other deemed federal or the As for to stockholders or receive use distribution can refund purposes, offset appropriate. a their on

the the in who i.e., stockholders tax same of paid reinvest basis by net of the also net stockholders received XX% of company, in deemed federal paid amount capital paid tax of the XX% tax deemed effect and to distributed the company tax applied. their by company's their is taxes as gains if stockholder. U.S. the to increased elected common income shares after of the by distribution, then Common the the by amount proceeds been The the the the adjusted the company is have cash

and XXXX $XX.X which total taxes deemed was million, of new liquidity, After can debt The we used million. of $XX.X securities. equity approximately approximately million $X.X reinvest to retained in be distribution

portfolio now statistics. Turning to

total XX, of December had fair million. $XXX.X our of portfolio As value investment

in operations cost two Our sold companies winding average which investments portfolio the that excludes million, their was on during process investment down. a portfolio of company $XX.X basis

average yield is on We X%. diluted XX.X% December with non-accrual, average was investments computed Weighted weighted of versus if and investments accretion the investments of interest The equity XX.X% as debt loan investments including on yield issue portfolio at have for original in effective our fully equity but using companies effective any. of XX. excluding cost, discount September debt at fees, average rates origination XX.X% ownership approximately an of

to I’d liquidity. discuss Now briefly our like available

XX, December liquidity $XXX.X of in of million we resources of total and As capital our liquidity of resulting $XX.X approximately and subsequent SBA $XXX.X of cash million, million. million of of million availability $XXX remaining. $XX available events, have approximately included line our liquidity our account debentures, into Taking on credit,

call comments. Ed to Now for the I back will concluding turn

Thanks, Shelby.

As I will call now Fidus always, Directors thank our our the of for work hard their their Mandeep and and Board turn I’d for the and to like support. shareholders team for over dedication Q&A. at Mandeep? to continued

first Instructions] Bryce of proceed. B. the Our question line Riley. Rowe comes [Operator from Please from

morning. good a lot Thanks

Good Bryce. morning,

of market I’ll beginning a an March, thinking XXXX? just what looks visibility of fairly point. It like to kind of us was and pipeline pipeline you perspective into like active hoping around what from origination some Maybe looks had about this might at already and the and give first start, you’re through quarter for you’ve kind be Ed, able the dynamic

Yes. Sure.

been know, it’s you As interesting.

a along uptick activity point in in portfolio a started in have quite industry. of with was I and three new levels, an in first mostly all January bit that low maybe way well. QX activity little we We’ve obviously, of almost equity think frankly, companies, also as made co-investments. the investments, terms investments just And meaningful seen just lien

flow robust. continues XXXX, not us say we reasonable market busy, defensive to and so we was staying growth at would extremely more the companies. – on high afford is is opportunities cash lower are focused middle But to levels. What It’s I it’s which real clearly invest, free and are and activity

expect had tell, so and yet. good no you And as about we in here currently repayments XXXX we equity moment, the we’ve feel can debt realization. At one growth

don’t but in one of activity sale of one see near-term. the the companies, So – lot other real portfolio of our a here

QX continue quarter as to So well. portfolio probably – mean, our should a to it the be is expectation portfolio. that’s grow portfolio I hope helpful? and where the a I grow in And we hope

there build we balance a you’ve that in you been a of to get sheet That’s sheet to back just if some as to terms helpful, obviously, I you’re of And kind leverage, leverage. to able Ed. Is out, how how of And wouldn’t think up about progressing target feel net model for balance near-term want kind that mind. target?

been, Sure. we’ve leveraged Well, as under what know, for quite while. say, I you would a

a throughout to to XXXX. point have we balance starting a of a get sheet of on the will using well. We are we be have where lot did cash credit. Though I mention, we’ll the repayment as line And

way to leverage we said From a that. perspective, X:X. up we’re a leverage comfortable went over have the liquidity general very Having that, So – X.XX position so a and is from X.XXx. perspective very target all our at good Shelby

and – us a would good would long-term X the be I at number, think X:X target X.XXx So for is the basis. Xx, be a on

I’ll jump queue. quarter. Good back it. Thanks. appreciate in I

Thank you. you. to talking Bryce. Thanks, Good

next Raymond the Dodd Please Our question line of from James. Robert comes from proceed.

and morning Good on the Hi. quarter. congratulations

interest First, this which like I tell have done I amortization keep in much isn’t us the in healthy, quarter. was is income rate, million, accelerated pretty about normal you can that obviously It that $X.X can, how right? – looks look’s maybe run mind, Shelby, if

have get and into back you. that I might to to look

accelerated about on amortization repayments? talking You’re

mean, was you well, portfolio though extremely ask I income right. move – didn’t Yes, interest way. let a strong, The unless quarter-to-quarter. me the much different obviously volume

was to some for income, there et every better unusual mean, happens I term, the lack from it there one-time anything me this look in interest cetera. So like quarter. quarter? an late, a there’s the accelerated amortization of But But does was contribution obviously, income

take underlying I’ll XX.X% rates to the driver closer XX.X%. and do mind, of to that’s have primary to a increase as really in but mind significant coming I We don’t going get it back that terms from coming increase the that’s not at in Not a quarter-over-quarter. being – you, just to

think I bigger a attribute I as would So that probably driver.

Got it. then And on... Thank you.

We in I’d The few say investments. of QX had only as thing some QX well. timing in a is maybe and then late

one-off, of. thing the would kind So other that can I anything of if unaware that’s be will. I’m of only you think

Got it. Got it. Thank you.

that problems far. all are during your that obviously, you having are portfolio, – you portfolio some remarks, mentioned said – the there On prepared there of the that incremental given size are are but some so those companies manageable

Just some you if been on all initiatives? more other say cost-cutting have organically can. that, company when you with manageable, the or so just more I is more sponsors that mean the managing money is color difficult put have in environment already? the far internally Or

Sure.

off, good And all of what it’s to of some than seeing perform. mean, – today kind it and think others, and question. We of – and great need portfolio seeing costs I raising I quality prices, cutting our a to but think doing portfolio companies ability what portfolio doing doing is its reality. we’re very very is better feel from the that’s they I we are What first above, about – uncertainties are the high. the of withstand

have if so at portfolio and And situations. feel the manage look overall portfolio Hopefully, write-downs, we our companies’ we that’s ability about helpful. good you some to portfolio, but the those

Have said a lot start widening there’s Yes. then you’ve still And levels the – There’s already. it – I of activity are Yes, been terms overall to your seen marketplace. just capital. turn environment, gave mean, we’ve you the is. color somewhat of down. the in you lot that a of in Yes. on spread

competition in spreads have maybe? QX the starting may that squeeze to from little highest is reached So a they

say I’ve is out there competition if still seen yet. But know really tightened I real there. don’t will it I

vis-à-vis of putting frankly, ago, and today the that months was being all the People reflected different transactions I uncertainty – level think know a we and ago, is different the leverage And companies. aggressive. quite year portfolio different. is XX quite structures, or competition the than are months in ago, XX everyone less there that’s pricing, on more there’s

over there XX lost in last real to number. that So of someone have lower would competition I this a win and the we deals at I I days the point bit is – couple don’t aggressive a being we – came to getting but think I everyone’s from think tightening I could people here, But point say, in but a at what see see don’t rational. little And overly it time. pretty wanted

Got it. you. Thank

if $XXX,XXX. was And you original will, only the Robert, your In QX, just repayments, accelerated circling OID, about back to from question.

Our the next from Ryan KBW. Please comes line Lynch of question from proceed.

morning. good Hey

to there’s be dialogue there. market been middle on that has the you competition had, previous markets to you would upper out of just big Over back little pretty First in that pulled level competition competition you’re Or up still of love Certainly, question hear gotten the – CLOs in a a just I capital markets, significantly? I following out guys – has quarters I treating. that some been again, understand – last couple always tighter? competition. kind more has and mentioned just there’s there’s consistent? in regarding pullback it I play. in competition kind Has with curious has banks of the would

XX back ago. you pulled variety from, it’s will. with we if months of No, entities, call compete a And No. it, dramatically

have active. BDCs, are the liquidity fairly BDCs that So still

CLO in become our financed, so competition major if market. And companies, a there’s less aggressive. there. which have you They are much Finance more will, player

these probably think flying The issuances aren’t couple one are is tighter. shelves off exactly a the days. CLO I there liquidity of –

of I think a portfolio focus. management more is

well. a are when so speaking, we’ve banks pullback group. pretty a And playing, smaller playing way, seen they’re generally as in that they from And big

deals, year there’s helpful? that’s different are that all on Hopefully definitely say is the active that, least. said there’s to and still less ago. competition of to level participants Having and the a no, still competition So relative

that, in that gains to by sort clarification. helpful is, you That’s amount going in drivers capital of have main just last which unexpected off. realized The of some of which make some flowing where not rates realized of of significant but for and interest expectation were had one any realized exit a which I doesn’t the gains to quarter and I I be your stretch, system. think, transact understand of companies see portfolio, one gains Yes. the quarter, the is ability kind the could years, is these dropped of fourth guys in the your trend couple given around you XXXX, What

positions? do that looks are of that, to and M&A to in given people think same we’ve What and seen kind refinance you like wanting extent rates where the not today do really past? the

question. there. This our Sure. expect have we great well then for also equity capital pretty We XXXX And extremely in well activity great Obviously, from gain the portfolio. realized late From Sure. of year, mean a was a we I I a level a perspective, perspective. XXXX. did XXXX was It’s in robust. us incremental gains. did mature year would

And are these control so right said Having that, – realization. know. that few quite you companies there don’t we situations, well for are as a more and than a

will maybe and And and to so a transact lot will been time markets it’s for or financing this – equity we’ll of approach private instance, equity there’s it the take so place. a level wait-and-see create unclear best higher groups improve, realizations what realizations exactly valuations taking – what’s year seeing and have

will continue at just modest more of the they’ll pace think it end a – day. we at But the

in realization if one that good closes, which March, have here closing. deal to is it chance of there’s expectation a Our

with So overall in be just lower our – number – is expectation. activity. but That’s market line again, will the it’s

for equity. realizations, a assume done? M&A new of co-investments the harder your I in is effort to then subset question stakes your one co-investments. is contract are to guys you several pushing fairly time multiples have that then of purchase these course getting in the But price far Or fourth kind be the to it is If as seems if that get kind is investing thought you deals Have like price decent just you equity normal your that question it case, businesses? of company of purchase that's you guys investing? part a last made the multiples kind I more And are all? tracked, are a concerted get to And course quarter. to seen yes. than guys answer for But – just regarding desire equity you normal equity you first equity guys' as in

those activity seeing large little are is a activity that's cases, interest bit. And they're a susceptible time that the right a you today where less now – probably purchase where that all economy. price well we question. multiples probably of invest. not come our impacted of a a cash a said a to is high imagination. any we're majority The little bit down of it dropped a that, multiples less perspective, haven't From seeing as of huge majority think of is, know. flow Great from down free and they but are the great – stretch clearly, way businesses, are in in by have high-quality businesses really And majority weakening to we're a type a Having or

co-investments. so to looking to And are equity make we continue

have events, If equity you that here three three financed those co-investments. in in subsequent at or look of new we all QX transactions the

our our approach. So equity companies most with that debt, of the stick in of continuing yes, interested are to continuing time investing and strategy, highly we and in portfolio the the

think time I to it's a So great invest.

leverage are lower, a is You perspective, if got good structures debt good going be find. about are levels to you're better, from as as think you to pricing careful

So great invest from our to it's perspective. time a

today. makes That the time appreciate Okay. I sense.

Good Ryan. to you, talking Absolutely.

comes question the proceed. line Our Ladenburg. of next Schleien Mickey Please from from

Yes. and Good Ed morning, Shelby.

Mickey. morning, Good

ratios sort opportunity. And they? second perhaps of with an valuations. provides of some they do really coverage are in terms know how costs. and in lien of distressed mentality market, interest of levered I companies? Connector risk-off you large XX% liens. your your and Virtex a Hi. how I what I'm lien, second looking particularly, ask Quest And have? Suited which second cash at there's to But are about wanted you These are

our into one I question. great lien our of and a It's Mezzanine Sure. lump kind category. second portfolios

it Those of piece an is And perspective. are large real – most extremely you companies. large a mentioned the of are I those Quest first our out represents is the pretty ordinary lien company, so mean majority. our cases Quest. from in portfolio;

coverage cash today. is interest fine its So

for So world. larger are in most couple there's the part impacted issues the have companies, but the companies been a today's that by

One of by them been meaningfully And has time, this impacted levered. a but issues. larger chain at over in supply point company, it's

I thing another there say, one in mentioned we expect are in perspective, in from other where would in The company. case all the the put capital sponsor expectation our names that for involved, supportive companies capital another another some and has sponsors they're and sponsors and you would – to are put

but these the believe long-term have been these them business, secondary form those expect again, by given have sponsors. continue the cases, impacted be companies of for are are this the with ones all in a prospects have sure, one they they've situations long-term we market way in that we issue. So moment prospects, is shape environment. where or – more of to but or the impacted, At financial And been we good in supportive to current the

opposed got to with particular. very not like quarter, it's very, the regard that's operating helpful. issue not operations. either. hard Hopefully as fourth that but it's And market The It's more perfectly, in hit secondary of in to bad an

which even that payment still balance the the on January. in elevated on question other balance one just made And you net of sheet, the the quite you Thanks. for cash sheet; tax helpful. mentioned is liability is That Yes.

it cash cash balance that the sheet is curious, "trapped" Or Just is a time? on good this at in portion so this SBICs? or much of why

answer that. Sure. I'll let Shelby

have So at at moment. but cash trapped the answer not the the any have that dividend to short we is the to SBIC the is have up funds. do that there, BDC truly We cash do we ability

between kind in Certainly the just well to work. And that balance of the sheet the had progress and to put a anticipate first the the on left cash really of the that sub-events. of trying we repayments the made we've decent quarter, the already on year-end past of We've of largely I in kind we've distribution that as residual us in would balance sheet investments function in back as here of any so flood kind tax is work. getting cash put XXXX. have and kind that utilizing deemed announced back capital combination of to at

timing did So just it reinvestment. a but long really accessible from function for how to all it redeploy is it's of cash of take of repayments,

you continuing million in in liabilities? that With mind, repayments cash the common which equity growth quarter, share from had net issuance you obviously fourth raise balance. the about fund increased Shelby, debt equity $X just investment of Do anticipate to common or and

average raise of We ATM volume, to in to place. kind program trading to do our do that Granted level of authorized $XX It's have given an take volume. up million. it would us some time

the will ATM running incremental of we up source as liquidity XXXX. throughout an leave continue to program and But

As mentioned, deploy I cash. I largely existing we'll think

our well always, then as provide as ATM available. the line so SBA $XXX currently continue liquidity to into way program incremental million debentures. have of And we credit, And long a as is to as great – tapping

this your Those you. Understand. my Appreciate questions all morning. are Thank time.

you. talking Mickey. to you, Thank Good

question final line Group. from Our Hovde comes from Erik the of Please Zwick proceed.

Good Relative of but months portfolio that remaining consistent average XX your so. weighted come we've here. some or down to morning. times, of interest over quite for Most coverage seen been the addressed, it's looks questions my one last the just I peers, guess at just X.X looking or been at relatively that One, like have two your a bit.

face grow talk of some to of the I to continue the your to EBITDA kind just wonder coverage resiliency their in you could companies interest ability environment. higher So of current of if in and the

Sure.

And our is extremely our one than is that in we just ordinary average and leverage I peers out points of of portfolio. at the companies of that's – is leverage, excluding of times. couple most the think, think of four have companies I our key a less large kind

leverage low LTM referencing other situations coverage. we've lastly, like feel the – then is have you're calculation we So obviously an that high thing the very is pretty calculation. some And interest and added

last look two much were you the at when So lower. of quarters levels first year, interest

to in started really They July. rise

really And the LTM – numbers so equation it's the come not into have not yet.

portfolio So you other we sit cash just times, given some. very that interest to operating would the we think four at think leverage for expect issues, interest levels significant that as to we and if referenced well we cover needs, I again, But down positioned – our absent come today here any coverage is will.

the helps. I which So think really the one, point leverage key is

the there. one And appreciate for I me. color Ed. then Thanks, last just

Looking industry obviously, you've mix out of X.X%. trajectory for the the for at the still retail at of is and portfolio, the of got economy kind the outcome kind And debate.

that some but think consumer-led things see are goes, We'll – could retail we where do be one could better and a a impacted. recession, be there enter I

provide you address, could could they of if companies end types you if impacted wondering So segments just middle into have in in we the little be how whether a market the a then do that there higher and potentially go market terms detail of into or recession? it's

Sure.

retail about or You're in overall? general talking

segment. guess, of X.X% Slide just I'm I Retail, that what that looking XX. makes up at

Sure.

of our focuses in the basis. one cost the called low-income a Northeast. a in really on it of been XXXX, probably up EbLens. that two company that We're Unfortunately, them companies since consumer fall is is X.X% – It's So kind there's in and portfolio on category.

period issues, money folks four We been and believe frankly, was company today. by and that difficult, prices to overall have inflation. items. It's the some higher issues discretionary then just are on COVID then things, All three spending or obviously, gas vendor opposed necessities as just impacted quite those hit

point. in at – written down are investment Those zero to this securities actually our company that

And on a environment operating company perspective. pretty balance a tough to from is that's that so encounter and sheet, it's difficult continuing our reflected our

The other in more company companies, the Ecothrift, called very well a performing it's well. and of thrift diversified space,

growing a generating high It's today's level in market of and cash.

quite – it's company well. that So is performing

and of economy feel but real you certain – think two a we the that very think is So a good I about today cities tougher on I And it's ones. on point – of segments hit there. overall, you are tougher others, that did portfolio, but the of one the the tale than hit

for questions I today. my appreciate Thanks the details. taking

Absolutely. to Erik. Good talking you

to like call to now Edward would turn closing Ross remarks. for the I over

and you and XXXX. Have with look on our morning. early great call this weekend. first a speaking to Thank us joining you, great a thank in We Mandeep for day you everyone, May forward quarter

Thank ladies and for call. gentlemen. today's does conclude This you Thank you, your participation.

now disconnect. may You