Goldman Sachs BDC (GSBD) 2 Nov 182018 Q3 Earnings call transcript

Good morning, this is Ian and I’ll be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs BDC third quarter 2018 earnings conference call. Please note that all participants will be in a listen-only mode until the end of the call, when we will open up the line for questions. I will now turn the call over to Ms. Katherine Schneider, Head of Investor Relations at Goldman Sachs BDC. your begin may you conference. Katherine,

morning Thanks Ian. Good everyone.

from future would we a may consent. our which reproduced should the be our homepage remind factors, reviewed with purposes. found and company’s press BDC. yesterday release possibly indicated today’s outside that, beliefs of the filings. include are not or in company’s their I after actual Investor begin call, like BDC statements Resources the issued earnings results our of supplemental can www.goldmansachsbdc.com regarding website described as replay is including in filed materially, of of conference the X a section. at the company’s without documents listeners rebroadcast presentation, SEC. Goldman an may turn over to number the what The November Yesterday result CEO with call McGovern, of to conjunction from I’ll differ, company Goldman This statements. of a company’s today, statements duplicated, XX-Q is to that the both Form call be With the and for may uncertain This These by nature condition is Before forward-looking represent of events earnings under closed, the market the Brendan be being in time on recorded These audio control. Sachs time those that copyright and company’s forward-looking SEC Inc. the today’s cast remarks financial and material posted Sachs

our quarter you conference Katherine. for earnings you, Good and thank morning joining us thank for third Great, call. everyone

have discuss Net was from per quarter investment expense. pleased as for there, Credit coupled start QX. the results increase share a to to as quarter share income report Lamm NII Act. the in management primarily at will our with With was driven and made Small from The per from Jon Yoder the activity of for greater we Business up position QX our well our progress shareholders. decreased $X.XX an strong prepayments terms by Net asset $XX.XX financial providing QX, $XX.XX, the QX investment are in company was quarter elevated over the I’ll increase in of from benefit we income detail. end the update in from QX. Jonathan an $X.XX on end to as results agenda the value of of Availability In and call, From that, fee

addition, shareholders dividend In as our record share to per XXXX. board of declared $X.XX December a XX, payable of

worth very While results, to there we few a noting. pleased such are are strong report things

while level far transaction fees the the quarter, prepayment thus this unpredictable underscoring inherently were quarter, fourth lower activity a First, of observed we quite of have strong nature in prepayment income.

that is on quarter this originations in are new changes strong we the industry. note repayments. BDC the than on all we company that environment, we were impacting validate following taken to lien assets. lower you’ll better yields Second, currently in continue first a on trend current as focused returns may risk-adjusted particularly yields This a success team actions regulatory the recent results as Still, for believe the the have management the position

incremental to our asset reminder, reduce agreed proposal execute our same shareholders. the covered company’s and our to received the reduce able gross X% management without a GSAM the level align fee any were In assets. reduce turn X.X% from by fees lenders of to from company’s to to approved with of increase approval to lenders As we senior attention the the minimum secured and asset the to at approved on in we shareholders QX, sought quarter, its XXX% borrowing second obtaining end constructive covenants from costs. requirement minimum or the revolving credit company’s appreciated to the We the response amendment facility we coverage

and As a well balance flexibility. result, sheet we enjoy operating positioned increased the company believe is to

As strategy said this we change middle to planning we additional not businesses. lending to utilize direct our core of are flexibility market before, have to investment

Our to investing bottom-up capital best a continue in based will on risk-adjusted structure a seeking in be approach returns to rooted fundamental the borrowers review.

already with quarter in quarter general, nearly flexibility. were but in returns they particular, XX% loans quarter the increased believe represented first full approval leverage. risk. operate the In currently first the we carrying shareholder during company the new loans. first to believe lower are better that seeing higher yields and The are also In of we is of following these operations lien investments benefiting lien that We have risk-adjusted third debt, senior lower from

We increased balance modestly our of size also this during quarter. the sheet

ratio is we was lien not to increase ending which gradually expect continue times, to loans; first if attractive times. equity come quarter this change. Our debt X.X find then if profile otherwise to to to mix from does was significantly to up our We senior asset would our X.XX unlikely or ratio the leverage leverage at our pass continue unchanged, however, prior is

expect We where be composition seeing best are of risk-adjusted that assets time, dynamic, and the our we reflecting lending returns. the over will the environment

competency turn is which in believe prudent risk management a will we Sachs. [indiscernible] Goldman practices drive core a are This composition reflection of profile. our Asset of

As it we that, statutory cushion coverage the we endeavor With asset maintain have requirement. meaningful to Jon turn to will me minimum past, in Yoder. let over the a to

Brendan. thanks Great,

like trends by equity companies. significant fundraising with sponsors U.S.-based by of During this combined to the high the in in third markets, activity to where are very unemployment companies. be U.S. favorable more years generally tend creation highs. factors domestic and and resonate rates of on strong on as driving activity are domestic levels interest driven in fundamentals through market private benefiting focused while we private lenders gross more strong mostly existing flow in income segment customers. floating from deal the equity product portfolio market in from middle benefit These the strongly confident businesses us justify increasing business economy by multi-year loans. rate sector but quarter, fundamentals growth The collateral Middle values, continues higher saw particularly deal we sponsor-backed the to believe We is appear also of middle job recent these near confidence higher the are our

or witnessed As expressing level not however, we we some would welcome leveraged notwithstanding If into development we flows signs space, structure is even differentiate there look state some market the about market. that backdrop as stable weakening; lending forward been company’s October, the macro capital of its the concern the the of capital material policymakers by reverse would this and of fundamental showing high have volatility made with base. positively comments statements it in these slow the

order Turning increased one to the ago single-name funds. that of benefits specific co-invest previously other with investment said key cross-allocating activity for quarter, investments we more we the provide year than of the diversification a obtained through GSAM that have for to was

financing $X to million the were in repaid, exposure and us on $XX loan another quarter loan and cross-allocate lien to of our This reliance loans the last Medplast benefit order. This our million respectively. in second reduce new largest name lien million and to example Associations investments, was this out single allowed participated our the million $XX and as to of our name first co-investment single we two $XX

investments While are group well, both be that we of these of refinanced part loans. performed the to very pleased these lender

name believe our also of the diversification. goal these increase to We in is consistent that single reduction with a size two investments

discussed we’ve name in single Another is the Communications. investment our in NTS past

[indiscernible] a operating a As a fiber and Texas. reminder, a in NTS is West primarily network both telecom

has NTS Our PIC initiatives. to for at provided interest modestly was the recall that terms performance to instead additional long initial We’ve been time improve though is payment underperform underwrite term few to EBITDA of to the initial financial support last support growth company where as over in pleased its consolidated an shareholders investment. utilized we the July the effort of of below continues cash our will amended it our with of of capital the it the years, back our how to loan in allow XXXX, and

Given equity for and constructive an with approximately that including monetize $X.XX our is of loan, variety of or current to options, this the on investment near closer revolver and mature at blended which our forward XXXX, dialog We loan amount we’ve term private mark a to as draw look path to June NTS on our investment set on further to dollar. potential our in is on sponsor its maturity. we a shareholders updating engaged in

For and respectively. $XXX.X were fundings new the investment and $XXX.X million quarter, commitments million

investments loans by Sales X% were Regarding primarily loans, originations the and comprised and were XX% eight in and than I debt. placement seven These repayment two unsecured repayment $XXX.X portfolio new of lien activity companies. less the investments portfolio new structure, quarter driven new million, the existing totaled mentioned. in full this XX% companies of lien across first capital second

to this the as that, we compared repayment Brendan recent not sales mentioned, was and Our trend the as to throughout This historical of a averages years. quarter remainder continue is activity in do year. elevated expect

yield During value stock, X.X% fair the of XX.X% in unsecured second as first investment the portfolio as cost quarter, XX.X% debt, investments secured the XX.X% and first second in the of third composition, compared out and lien, quarter portfolio in of were on $X,XXX,XXX,XXX and the relatively X.X% our at credit end XX.X% portfolio to end investment X% fund. quarter debt, at at senior at including total The weighted end unitranche the senior was in comprised common in the our steady. the XX.X% portfolio as last of yields lien quarter, as our average well on were our Regarding of preferred loans, in in XX% line

diversity quarter $XX.X quarter XX, $X,XXX,XXX,XXX. total also company’s the bringing year XX% over XX% year. million commitments our and of as and We had single unfunded September by investments We name to commitments increased of over

across end, quarter XX different across XX has operating of companies company the industries. investments XXX As portfolio

quarter the average coverage of to total credit by was is unchanged fund net X.X to debt the average times to portfolio quarter of in performance versus quarter Turning senior times investment second the at investment quarter. as X% The weighted The which of investment portfolio weighted company’s the credit of stable be companies was our the end our the measured X.X end at quarter. largest continues the over companies was end prior times, X.X company’s at portfolio. EBITDA, interest from at quality, quarter which underlying

on trailing senior return an XX fund capital. produced the credit the Over XX% months, invested

end. quarter change and the the $X.X quarter. During senior companies. had companies $XX.X million portfolio funded The million, of across Sales million credit new negative resulting net during existing investment were a in million three three was of the and $XXX total $XX.X at repayments portfolio fund in the quarter, originations new of size

As of X.X%. end of weighted X.X%, cost the senior relatively investments from unchanged on yield quarter, the fund the at quarter in was the credit the third was average at which prior

the fund portfolio companies across lien investment senior turn with I’ll First the total in XX credit walk different to of investments through all of well The and our floating portfolio senior the remains XX.X% in rate. Jonathan to credit investments loans portfolio industries. call are our now results. diversified fund operating XX comprised over financial

third of the value portfolio ended $X.XXX and net $XXX investments $XXX with We quarter of Jon. of at debt fair assets billion, total of million, XXXX million. outstanding Thanks

in decrease the fee our X.X%. expense prior in share driven the prior management $X.XX in quarter. increase was as $X.XX net to by from quarter The as were in in to $X.XX the fund, compared a elevated resulting quarter per $X.XX and income was prepayments, on management the share assets Earnings over X% to fee reduction per senior from Our income NII compared including from in credit investment quarter.

ratio the times with average to We to ratio During prior versus end quarter, debt our was of QX. of the times the equity at ended a third the X.X equity times X.XX X.X X.XX in debt quarter. versus quarter

will As sheet earlier of during be mentioned selection each by balance Brendan call, our asset dictated higher utilization the quarter. leverage underlying

with leverage we overall requirement greater company range set flexibility. the target balance a coverage for sheet the reduced result, forth asset company the provides As as not specific have a

to coverage asset as regulatory However, meaningful we have we maintain will cushion to the relative seek a done requirements, historically.

other quarter was income the Turning $XX.X for senior was by prepayments, of to investment a the were partially $XX.X debt million over primarily prior QX expenses. interest quarter. for offset down quarter statement, quarter our quarter. last net other over third driven quarter the quarter were income an credit with advisory value by to driven which which the was asset Expenses $XX.XX total fees expenses income from elevated $XX.XX up investment versus a quarter operating primarily million, quarter $XX per compared The quarter expenses the $XX decrease in share in from including Total third million by up we NAV million increase and prior quarter. in over fund. and in ended was the increase as as was in

you net Our $X.XX exceeded supplemental end million consistently dividend. This undistributed $XX.X investment bridge income to earnings income through shares outstanding. company at NAV presentation these net equates had changes. walk resulting on from provides a our investment quarter to in The has that per current share accumulated

in the that quarter, on notes. convertible reopening. are These in convertible notes outstanding with company’s million XXXX. During April part this able principal notes to of were of of an achieve terms We X.X% identical the amount have we very were the issuance we terms $XXX amount closed $XX pleased due of principal and million

pleased This facility. quarter, lenders our revolving with amendment execute our earlier, to were as an we credit Brendan in mentioned

to company the in a manner. continue expect to prudent finance We

capacity current on a particular sufficient the sheet of emphasis of debt to With overall diversify time. that, I to said, will provides to financing we gradually to back continuing with our debt continue turn runway Our funding. evaluate other with Brendan. as sources our our of company sources balance over it strategy, That increase part

Great, believe Overall, characterized fronts. quarter Jonathan. multiple solid by this execution thanks was on we

recent strong to investment take and our of the important for in allow to BDCs. addition net NAV, will us of agreements changes leverage which to we advantage producing an lending rules In uptick income completed relaxation the

remainder and XXXX, the year to of maintain momentum. hope the look the we forward continue to we to As positive

for and with up thank it your privilege As let’s the that, Q&A. always, of you we managing capital, open for

from Finian Securities. Our [Operator Fargo instructions] of O’Shea line from first question comes the Wells

good thanks and for question. guys, Hi taking my morning,

the perhaps how Just platform to and wanted lower and leverage pursuant regime to your strategy comments start is on evolving the on higher fees.

you Can into more middle core the will against the focusing flexible be a middle up in stuff addressing market composition be, dynamic upper that best the stuff You of this and be touch or will go about better at specifically how talk you will the credit that originations. on on time you or senior flexible deals just fund, senior market? butting

question. the we’ve in One, I Sure things which you few many flexibility. and get word the is of crux A the used used there. times

on the with produce as set, think first can In strikes a availing by on we thing at that us put environments, take in a be assertively the benefit the very have to change may these changes expectations. In the different of there to historical returns and of of shareholders’ to look regulation, different returns As consistent we moving environments, we the so we great may flexibility. choose certain for more senior we’ve with opportunity is be leverage, our that equity lot our continue consistent company ourselves allows opportunities, a in spot. advantage with as we focused originations and

to part respect with point senior discussion I you was characterized, market middle questions of the and there. your think, upper was your of One credit fund,

be focused on middle market. of We the to the continue core

assume is which are high parts yielding. market market. some underlying it’s market start look product If the done of the to of products in $XX companies the you market, of a that we’re at the with we the we that’s up that opportunities, look straddling unitranche now EBITDA the part at that’s of our the to including about and think where the heart with continue going of market million can that of different see syndicated competing book, EBITDA serve so best parts the - wouldn’t what we’ve set, and the I going middle I

senior what that’s at credit our really look you we’ve think well. there when don’t done I fund, as fact, In

where I $XX have think the EBITDA probably of best changes off we all there the average may we on the to we’ve across around I the manage and or approach. case. by of that vehicles be that be is a done million we the opportunities middle That’s nothing so and but - really historically that bit, focused been the market. continue That will returns, have seen heart

least, at also, any you do intact, time of or this there to and collapsing? that keep Okay, discussion is at intend structure

look fund, if fund. others what of what look the time get so they consolidate it, off senior who Yes, you have not back lot balance at to seen so in yielding therefore at sheet we a is leverage. go does our do the The ability us the assets fund those statutory we and and when don’t leverage - fund at senior credit limits, don’t place, do you that credit within look to structures our were designed have count debt it, therefore to control was you’ve first against we lien structure and in

changes, that it fact some less to markets, look sheet. than may the collateral, putting that say back us, in structure the structure the the and and of utility balance On financing assets fair on markets be you unwinding of was regulatory to and sensibility so there lien value those once is first to the that our when financing at

We’re regard. in that in no rush

great a have relationship We [indiscernible]. with

conversations, the think some be the but in there and of I looking ongoing there composition and more how we it’s may simplicity. is elegance worth where so invest, do to light have We come; in think overall asset to changes I

Sure, well. all appreciate as that

obviously shareholders analysts. and very another on market well even Just fee, the item the appreciated research received sell-side by lower it’s and and

lending in the difficult senior You’re as you to competitive the new on-board traditionally have human BDC class, and systems, Can the funds. of etc.? about capital, pressure all and on BDCs know direct of structure monitor those, talk you to fee more floating just any entering course machine what asset on frontier would keeping a assets with improving public best continue the providing direct we maintain the the sort side, very on and for the lending machine which stay is to asset going have

appreciate Certainly before all Finian, that we through the Hey it’s thought proposed we question, Yoder. Jon Great changes. question. the

bulk would investors in fee One managing of where a we’re are assets. disadvantaged think others private is they managers the of BDC, that We market public separate about that in things think consistent slightly have much BCD management institutional assets, vehicles highlight frankly, we managing not fund the just asset fees don’t vast frankly their consistent in capital. that it’s that accounts. terms for level structures, that human level what for levels credit market look in separate we other see our relative are of we have I is what most private They’re lot and think, institutional particular what said, are if public BDC to that with for more the accounts creates BDCs. a doing the We I don’t on lower our large charge there the private than think in assets managers. at really because bulk in you that I position more the a of terms of where, and in credit Rather, private pressure any fee with whatnot,

on market, think validation part as here. as the asset we and I out in I’d might by want incentive equity respects calculus this we take We think paper X% add, we’ve Furthermore, what able that more that more different quarter, what different way be what consider have environment, really if can with we When to that us be see across we competitive, the that appropriately, Yes, flexibility - from we’re it’s a make well. that place that professionals. investment platform in a balances when on is look a that’s the one rate and our of a on a good and right for different That’s to senior to LPs have we they regime. to second quarter, want a environments, would will we’re capital. to in those lien with thing us that’s more we did in for certain at solutions done but we’ll some want, platform on of in of want equity in driven going factor, flexible we assets, do vehicles, by investing discussions. a that finance more them our actually higher assets say pay the any the effectively that pay change results and parts as X.X% you to us fees, to earn look frankly thing platform to doing in environment, struggle fee clients, that how capital on very all the example, very, on some just for earned Very has fees. the of place with change senior improve put that can pool resonates further actually and capital be we that makes some going as sure that performance. a had pen leverage, balance to we our in absent simply when returns want fees opportunity at that to what Finian, more investors for ignoring to that of fact That’s fee foregone attract again robust management returns we be, assets the those powerful other our our robust investments in under to capital to for you really us story, through a opportunity the do our sheet more expand providers generate positive but that’s event that still

together All we changes been response us what a the board. to positive the that it’s and of did, that across is very overwhelmingly make caused

so Thanks guys. much,

Raymond Vandegrift Leslie Your question James. the from is of from next line

taking on morning. for and questions, Hi the guys, quarter. congrats strong Thank you my good

you. Thank

were about but all but increasing me this repayments on I’m that this questions quarter, you portfolio correct? then--those that originations, Obviously that, correct but ability. strong You’ve a were my reinvested to you target wrong, of few leverage in new of the was answered have companies already if quarter the now with talked really

new I size large repayments prepared decided loan the the reinvested quarter, Leslie, we down. that into were this both--we position, in old loan, effectively. our as two bring the mentioned of refinanced But to The remarks, the

Okay, will then little you quarter, this outlook be strong on originations, then, like and the as ‘XX, maybe quarter or because fourth into feel as a bit of those and was back for reinvestments? of for beginning the it it

I think that forward little have the quarters as this we record sort of remarks, the on but a first year others the in think bit and of levels to a to touched activity. date we market the space this really quarters we and benefited of look in three transaction prepared been in for year the the three middle have quarter, fourth first high and I volumes, from transaction

quarter. here in say think don’t don’t I it that I why so so reason in be quarter. wouldn’t--I the that occurring. would the we’re think to think filter the some volatility slowdown bit We sit last got a I we’ve are to the I markets But we month it, that quarter, obvious all quarter don’t months the slowdown fourth may only detecting that first the in two attributable into of months the being bit there’s anything. public are any detecting, a can’t as markets. for to activities private of a than that the and, it’s active go it’s attributable couple transaction month seeing of know obviously that a we’re fourth I more the we frankly, a said, here into usually are in quickly, of

the where could activity time forth. it so to little on I be much pipelines a bit a just flow, flow ebb so it of restock think change. transaction been just so little there’s natural part breather, could that a deal it’s and Again, takes and of it and

third. see in we things expect weeks fourth of expecting, here levels or the six we quarter less to we in active be portfolio become sit the in very we saw what transaction quarter but there lower in activity, would as growth than that the of you the month today, last Sometimes weren’t the

the sheer Associations, of it to way? On went Okay, a how thank give you. Could the to lien. from investments, that, that up reinvestments lien was it that you restructured some of yields went on a a why after one me a paid, product from actually but first or unitranche couple unitranche color on first

has did it’s a of of that both deal in is in back structure inclusive that as of company behind from economic its private is we was that out a to I company, of our that. a it how capital initially there allowed The about a It’s put which It This sure. wealth on back was expected. was insulated management think bit again, unitranche, platform. it we very the just of probably did, because so believe executed piece, initial would get really, think and of first have the also a But It’s XXXX, initially Yes, in than introduced we prior revenue now that larger strategy little an unitranche, on. we terms a relative effectively we and calls. out an an and for that deserving It’s is associations, of to bit deal initial goes company lot a and recurring before. community associations that really--we higher homeowners business did really increase last nature bit transaction mezz in actually which offer level last cycles provides manages structured so deeper refinancing a leverage piece was straight the the little refinanced we The were network. well strong talked XXXX, unitranche investment through was sticky a this and performed out and what mezz a its that we think it what by given the performed. transaction out another together a it underwrote company structure of pricing of first had plus allow

are Okay, right, new not but pieces now the you pure hold unitranche? the first lien, part of

Correct.

Okay.

regular, unitranche. out no, a unitranche. straightforward Well just - is first it’s it be lien just a clear, but not first piece, last It’s Leslie, lien, to sorry it’s

like Is plus at Okay. kind companies, new Then you’re L plus that yields? for XXX what yields were seeing look investments, looks on the new the of to L it the we can portfolio range XXX. new the now,

we because did end. little going saying, a we’re probably, see that’s that reluctant going quarter, that always were in the bit as think we I of terms know, seven new deals every every--you on are this we what guidance, to higher forward provide a to quarter, Leslie,

If you three it’s probably our look average, eight. at more like historical to

that on your very average say of this I sample yield bit if make size. there’s that try to anything, There’s be have that continue we necessarily gave a wouldn’t higher that perhaps again yielding deals the your that higher. something a small, deals I we guide we’re be that to Whether continue were because to deals. it weighted is just as kind get couple did of will to you the a small certainly find little of skewed going a I in able and aim little bit a lower you would deals new couple drives to be there. quarter, higher did were or But we’ll that range always a to say we You it can investments to those, seem think though--that range.

Okay.

or have that Are direct of looking have using middle the out what table your before into also market, that leverage there of noticed names, people even smaller a in for upper at the have some been at? capacity, guys other some the farther you been deals? more the increased Given were BDCs moved guys you change have competitors

on haven’t Interestingly, over new I capital focus, private competitors lot of months. the a seen to credit question. lot been of Good the last a XX and rightly into we know there’s XX so, space, really because flows

most that upmarket capital, with of We so compete to in, we’ve and competing larger but bit flowed kind raised a be little there’s competitors say, to the kind that get I we really, capital folks smaller into wouldn’t alluded space used have with and that the same more that lot has an or influx have deploy market seen market there’s competitors. as new were you of haven’t few really some that of It’s of same I regularly segment. a for anything, to this, suddenly seen are years. perhaps going our we in the for segment are capital part used that would of to new a our below say people the that people folks If been

The for I in what oftentimes look what’s questions, only would that to competitive divine think that one at objective the hard we dynamic way did, quarter accomplished in quarter. is to add, through us get most to The is Leslie, look going what any thing when on. particular we we it’s

XX% able grow alluded be you asset We a change sheet much were origination very the also to were able was mix the We as As we it quite of strong balance the quarter. number originations those with described available healthy. leverage you in gave towards to now. more to are still first the skewed us loans, to, to and was so the senior that’s target liens, consistent yields

when our think platform are the is a meeting term. the of structure that I you criteria, we find and that meeting are and a look market that environment, deals continue we our a long yes, returns also at the So think over with competitive opportunity, to what’s growing consistent size yield

modeling last One you. thank Perfect, question.

remember long the on second again dividend something the the went a looking payout quarter than ratio the I itself run payout had it it quarter, fund, It being it in rate, quarter the outlook prepayments so mentioned net has up credit been, not the you On grow. but was higher ratio. last an this term quarter. higher senior all than quarter bit fund and from for and about did this then

that incremental Yes prepayments primarily significantly our elevated that driven expect talked quarter by prior about respect prepared that versus income would - again. occur was credit was prepayment and necessarily fund, elevated senior the remarks. the dividend Leslie, an with fees we number we to That to in number not

you Okay, for questions. perfect. Thank taking my

then one the if to may keypad. telephone number on your do you like Once again question, so pressing would star you an ask by audio

ask If asking you that are we like question. with your to question unit handset would when your hands-free you use or a your asking speakerphone,

of Our National next from question is Christopher Testa from the Securities. line

my morning, Thanks taking questions. guys. good for Hi,

of this loans, context into first view more the I’m first breaking up I’m take in lien guys you to more leverage? out, if kind how the curious, What portfolio unitranche you is, equity? out of of composition out Just combined are as with the you debt just you and getting how view last outs balance and first there’s wondering more that. do sheet

Chris, your question is exactly right.

a As lower at of need not we taking unitranches of you flexibility outs saw, in asset to we’re given do the anymore, really the and that, that coverage greater there’s have that’s fact minimum by function requirement. really not a way much doing the largely last

lot us a we fact this in there to and borrower. a a see unitranche quarter we as where of bifurcation the same earlier, of had, about our probably talked loan largest we get in true last in participated You isn’t repaid last outs one won’t that outs; do

we’re on to last balance we it exact and question equity of first and You balance focused would in it’s we’re think the know, completely as function about more on of how say, sheet, mentioned, we the just is we the think of liens, ratios our just say assets sheet, not think so debt the the and in outs leverage more going we even we size liens, put can true fact expand bluntly, our of to we unitranches more your be Brendan and so and that portfolio the not way now. when have, you is expanding it, on. nature to size what take of going first going we’re because exactly static alluded hey, to if same To to about a about

- accordingly, we and is your we the levels leverage think the overall the hope portfolio so think what the I through risk question. Just match that answers opposite in

Yes, that’s if safer regards as sponsor-backed you. the I to you’re should guess, credits into, expect the to moving well? borrowers great we thank detail, to, increase composition of With able

is fact, in No, might opportunity mean, there even I space. is wouldn’t I in as to liens the sponsored; than think say as is liens more first with opportunity that, in non-sponsored for sponsored space the non-sponsored I there much first I do actually. there there’s in argue that

about non-sponsored last on couple XX and this side, I really enterprise a think we’ve before, months, last lot bit over the elevated certainly of that’s sponsored just seen the years, think that, been of function and the a we’ve to more talked XX side the activity than I a values.

of was ago if look, If you’re raise the the EBITDA move get I owner EBITDA. thinking for of to to analysis can what on, times that’s worth it continue selling that grow maybe want on the a sell business only was now next, capital and business, you’re pretty the been shifting whether business to when XX my that’s you towards has that’s cash XX about and X do XX relative the business times monetize what or some to the weight years whether business, right barrelhead or attractive and

You first persist, think level has a to I might on forward, to--between in increase sponsored we’re to that just a of valuations not to non-sponsored deals, value be would deals, business non-sponsored liens erode growing balance that, to and and we think I the going take decline of instead going try I that probably second trajectory an but lien, of would deals the of to grow sponsored high continued kind EBITDA. expect more likely first more advantage are attracted valuations least compared so you say, deals. if at lien of attracted That’s to potentially and dynamic continuing as because a even

you thank that. good for That’s detail. Okay,

having portfolio and securitization many terms as what and of thought for of any be given with looking guys back you terms market different composition with good bond give it. obviously guys be guys seems lien at a which name, have alluded you in obviously not to balance that just curious, another side on think could BDCs, you a it But restrictions sheet, to you any Just like that’s maybe other something source, open might brand take issuance. I’m financing I have this in guys gears or looking for the and and covenants maybe the have good first would fund actually the more switching would a very of you to the it

question. great Chris, Yes

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you Thank Okay, great. for questions. me. That’s my for taking all

continue are there with questions. Please time, this remarks. At closing further no any

the reach have we conference our As do have extent team, for thank you always, directly to please additional To out and questions, great to attending feel call. joining us weekend. and a you free the

BDC Ladies gentlemen, and does conference this Sachs third call. earnings Thank participation. conclude Goldman your XXXX the quarter Inc. for you

may You now disconnect.