Goldman Sachs BDC (GSBD) 1 Mar 192018 Q4 Earnings call transcript

Good morning. This is Ian, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs BDC, Inc. Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Ms. Investor Goldman of BDC. Head Schneider, Relations Sachs at Katherine your Katherine, begin you may conference.

morning, Ian. everyone. Thanks, Good

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

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

will Yoder of of terms Jon results fourth quarter the highlights is we activity discuss overview from in and finally, San Jon well our with the call, joining in before portfolio Q&A. providing for detail. our remotely for And usual as agenda conclude discuss metrics. XXXX. Lamm, I'll open key results greater line And who us start remarks as the our by I'll for Francisco investment will financial closing some As

net that brining income $X.XX share equity return was full on per investment the for or QX $X.XX net for to income XXXX. in year an with So share investment XX.X% per common

Our net investment full dividend the XXX% and year for by income XXXX. covered the during our XXX% quarter

a value. fiscal that stable reflecting Importantly since dividend produce our net in income to distributions our in year inception supports XXXX, as income $X.XX to per investment briefly has exceeded XX, dividend share To of look I'd execution. efforts our end, that declared our over shareholders' the each that the to shareholders on our and record and XXXX. payable XXXX board like back reflect of pause March

at the small on significant a key while pursue highlighted are time increase assets. on among availability amended commit business which of approval base including your After leverage, X% lower same equity. an reduction assets Company pursue the obtaining yielding, from GSAM management assets assets all permit first enhancing of range potentially fee risk, implemented to lien on to X.X% increasing lower returns the to passage aware, all and we act, other you the XXXX viewed of the provisions a We the As it will as regulatory BDCs believe change XX to leverage this broader positively things. Act Company by to was credit enabled

fees. realized structure the the industry, calculating is our change, are purpose cost Company’s in As limiter the in among losses income lowest fee when especially unrealized whereby structure of a netted of incentive the longstanding we believe result and against this in the factoring incentive for

risk well comparatively believe has been it company deliver to that GSAM's approach cost the awarded and recognized capital attractive that gratified the that the to we are returns. lower We differentiated adjusted continue positions has to of market

our increased already sheet has balance Company. on fact, a meaningful impact In had the flexibility

were attractive in we loans of the first in XXXX, the the in lien investment lien course originations generally those of XXXX, quarters were first that Company's second than found new last lien loans. XX% three opportunities more of During loans. In

that leverage, to the the Company utility diminished. able not pleased with on to investment net have that joint and it’s against this leverage attractive in And these loans set the and deliver and to structure joint asset vehicle. pursue opportunities mix Credit in the agreed was its dissolve are venture we that made levels progress We was believe partnership Recall light restructuring Regents. Cal relaxed lien principle Company to Senior of the count income. up Furthermore, investment of enable still Fund to first exposure this has regulatory the limit. improve therefore the of our you In gain did BDC is we limitation partner proprietary debt venture Company

will Cal end Regents GSPD result, in assets. QX of the close the investments of would it's simply company’s take investment on will sheet, of for near transaction, assets year-end or partnership the and based this a Pro for retain As the account GSPDs will which balance anticipate of it's assets firstly, the forma at onto we half its portfolio. half static XX%

and exposures believe will name greatly. in diversification following regulation XX at constant move XX our have exposures from the We efforts assuming XX/XX. single swiftly addition, change to the of benefited will In decisively increase improve asset the portfolio number as to Company portfolio

assets. has mix lower but risky shifted asset Our to less yielding

of increasing Company’s income remained believe improved. and steps has partnership, diversification that strong. the corporate asset net by profile structure Furthermore, JV quality, taking we to production simplify our high-grading funding While has single the name unwind investment our with

unsecured and the credit a remain sheet. right focused size size for to XXX the be the notes forms both the increase million. of on unsecured the forward of convertible will $XXX access believe BDCs of we our left differentiator but financing And balance side attractive we Going outstanding In increased facility we XXXX, we recently company’s to million. X.X% of more company’s the revolving to

XXXX from as believe And affirmed We we also a recently provides in that grade particularly XXXX winning our economic this Fitch the in are strong was look strategy. busy year forward here pleased for we execute was very to U.S. outlook. rating a continue stable that environment, we to a received Company. an the Overall investment good with the and backdrop rating

portfolio company company portfolio overall Our has performance metrics, been solid.

transparency company in During West these NTS we these non-accrual of Communications and both two primarily to the help Texas. quarter, did outlier to pause Co investments I'd Supply the on results give CLEC certain in portfolio NTS into on companies, like operating Communications a telecom network, put in face Animal each and fiber is you context. to investments status.

and appropriate the terms. not company The subject be we our to received interest its is million. as the IRR that $XX Including amount representing income we pleased $XX concluded December, like FCC developments than proceeds times payments have the pursuant of Animal transaction share. including XXXX sale ending the during of supplies. distributor am contractual payment a and would X.X to-date in the and full treatment food to close report accrued to a Animal initial deal and cash cash under be agreement, per on to that increase are review amount XXXX. the our collectible including situation the to for into multiple would turn payoff pet a approvals we circumstances. claim quarter to would close accounting a the NTS follow-on accrual which approximately we is more potential total we cash the this June withstanding for of to recent outcome, fluid certain expect Not NPV total light second NTS is was cash entered transaction X% greater to XX, Our $XX positive is million million that customary pursuant nationwide the there transaction receive to investment. agreed sale on off Supply a investments investment with a Supply but picked of I in that our

Our on positive trends driven industry demand long-term investment for industry pet thesis and by Company’s supplies. the tailwinds food driving centered leading position

deleverage best better capital action During declined. determined the position performance XXXX the to structure the to Company's profitability the that of was and perform. course to We company

of increase the providing to equity believe As Friday, and We EBITDA. successfully for we is capital look and debt to forward We sheet revenue more Company’s a management working a enable restructuring last balance rates, by with our swapping fill benefit that company opportunities. closed focused on keeping progress. updated and to positioned from consolidation Company you well the clean to trends and industry stable additional

per XXXX. XX, common NTS Following and market results the the plan portfolio and most subsequent that, may in detail. the turn year, limitations. Animal successful transactions non-accrual the of subject of forma extends it restructuring amortized in for our price plan, value is XX both let X.X% to we plans And stock which Company Francisco Yoder finally knew announced additional pending and With to the the the San million represented the investment fair directors, the up investments of discuss Company’s Jon its NAV activity who to me board our if share below to at for the in certain quarter-end March to cost. closing repurchase repurchase greater over companies quarter stock an pro will Supply Under recently

Great, thank Brendan. you,

deal fourth as volatility relatively broader credit in increased was result market the quarter, in the During activity markets. the equity a of middle muted and

slow markets from in the distinct volatility are bond credit loan broader can within markets debt down transaction private volumes the While broadly markets. our syndicated markets in high-yield

do of believe in we impact number disruption private positively credit that ways. However, markets a this can

widening, we're and to loans. in First, result volatility tends credit new when making good going is out which spread

seeking Second, investment power expands when disrupted, and gives lenders are our like universe borrowers for and the drive private markets bargaining This increased us terms structures better investments. capital public from to are more us. our

day the first largely from we sit of of on seen the end public here the have volatility recovered at As markets March, last the credit year.

of and stable are is provides advantage structure forced suffering of structures episode other when redemptions act it value fund defensibly. to investment the of good the the base BDC to opportunities capital are take a However, and reminder the

the commitments quarter, Turning million, were new million and and fundings investment $XXX.X to specific investments $XXX.X respectively. for

end quarter, were across mentioned capital X% We had new lien sponsor were companies and commitments new the previewed loans, the X% Regarding full relationships eight which our stock companies, totaled primarily this new wealth by $XX.X Notwithstanding investments placement which remained driven and in of companies Sales first and of family portfolio million These first of X% and of portfolio private activity the both were Senior Brendan a channel. these sourced originations in from two slowed repayments portfolio quarter repayment companies, last-out metered XX% activity. companies. activity the two the of investments. and producing our lien fourth structure, the XX% I compared investments in the of second loans, active lien during at second weighted common cost yield the quarter of XX.X% lien eight eight Fund. The portfolio as were the as preferred income comprised XX.X% of average and end unitranche, debt existing third at founder-owned investment at to Credit new with quarter. total in was and our

were the the and second portfolio at comprised fair composition, in including year, portfolio X.X% investments secured $X.XXX Fund. the X.X% lien in Regarding Senior XX.X% unitranche common unsecured well our X.X% billion in as in senior Credit first and loans at in total in in XX% XX.X% first lien X% end debt, stock of preferred as of last-out debt, lien, and value,

million of to $X,XXX.X XX, of bringing had $XX.X also and total commitments commitments as million. investments December We unfunded

that portfolio the X% We diversity progress earlier we're the increasing single year-over-year. diversification. Brendan quarter-over-quarter in company's portfolio with made single XX% the As mentioned and the by name we've in company's increased call, name pleased

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

coverage was primarily investment quarter-end end our turning described companies also majority The new credit of So net performance end our investment The of upsized Credit unchanged Fund during we our quarter back portfolio continues from on to of of quality. our investment commitments of portfolio third portfolio leverage weighted Animal the X.Xx X.Xx that at portfolio. at the Brendan weighted the of interest which higher. that at total stable companies was in in The resulted companies of was the quarter This X% companies versus performance, to Supply which X.Xx the investment average increase portfolio prior be investment in some debt-to-EBITDA was existing from at average positive The earlier. was the the quarter. quarter. company's It drove the modestly underlying the the Senior investment on to largest attributed quarter-over-quarter.

trailing Fund The the an XX produced Over on XX% return months. invested Senior our Credit capital.

funded net were the total Credit in and portfolio quarter, repayments quarter. was of originations the had of $XX.X During million reduction existing a $XXX.X companies. Sales across portfolio Senior the million at $XX.X Fund quarter-end. during portfolio new the resulting size million The $XX million three of

average costs is from fourth on of Senior the end the quarter investments yield weighted the the in modestly X.X%. X.X% Fund quarter, of prior higher As at was Credit at the

total First companies Fund Fund of portfolio XX.X% comprised floating operating are in Senior industries. with investments well Credit The investment lien loans portfolio the across our rate. the and Senior portfolio remains of also within different XX diversified Credit XX all investments

Brendan planning we're dissolve joint Senior expect sheet. half mentioned to earlier, the Fund and of our Credit all receive we onto As to assets venture balance

lien results. As name Jonathan turn result portfolio meaningfully exposure debt the a our single call walk first diversification over increase. to this, I'll of the and company's through financial to will now

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

income quarter. $X.XX driven per share $X.XX as in $X.XX $X.XX investment on by negative net as previously share markdowns Animal as the primarily the per prior portfolio discussed. Earnings compared to including was Supply compared to investments Our were prior quarter, in in the

our X.XXx We versus this our gradual income was We quarter. prior the the with of debt-to-equity at the with QX. quarter, X.Xx of quarter in ended average the the into quarter X.XXx debt-to-equity X.Xx a end attractive ratio growth additional sheet During balance versus fourth producing assets. of were pleased ratio

by earnings about selection prior As of asset sheet in we quarter. be will leverage calls, have our balance utilization higher spoken each quarter conference dictated underlying

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

will seek done a to have relative regulatory We the cushion maintain to as coverage requirement meaningful we asset historically.

Turning to the income statement.

down offset of from quarter-over-quarter quarter down income The in million status the compared interest the million million, to placement primarily investment $XX QX investment on in nonaccrual the decrease which for total a and certain an The was NAV prior offset decline down was value partially prior incentive other driven net share by income expenses increase in Total decrease $XX producing quarter-over-quarter, expenses. in $XX.XX at interest in the by driven asset was fourth quarter. quarter-over-quarter was investments were debt higher versus driven Expenses was a million per by as fees, result assets. NAV third by $XX partially last largely income Supply. quarter. $XX as and ended by was with Our which new in were as quarter $XX.XX primarily from of the we our Animal quarter.

walk $X.XX quarter-end, outstanding. income Our the This supplemental to third to undistributed that on earnings you presentation investment exceeded income The map in to at from consistently from through the provides million had $XX.X dividends. resulting quarter taxable a equates current net net changes Company accumulated quarter. per our the share shares investment has bridge fourth

component to As Brendan the mentioned Act. is call a SBCA earlier financing critical the following of passage our in the framework

of million credit In $XXX the facility currently debt The of million million, grade debt. and with revolving has from manner to company the operate an unsecured a Company Fitch. providing company $XXX We investment grade debt investment to retain with of we capacity February size Company seek up to This incremental provides the in thus to of total rating. increased $XXX up rating commitments company's total from had our As XX, the debt-to-equity X.Xx. the secured XXXX, XXXX, December of capacity.

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

Jonathan. Thanks, Great.

of a for well industry. head benefit backdrop taken back, company was XXXX have significant regulatory We believe Looking changing the the change actions BDC the year as to XXXX. into from we the positioned

your work behalf As the privilege hard and open always, With managing for continuing let's we to up on questions. forward remainder the that, your you line thank for of we the of the to capital over year. look

ahead, go So Ian.

Securities. question Wells Finian first is line from O'Shea of Our Instructions] Fargo [Operator the from

morning. Good guys. Hi

are Hey Fin, you? how

question and bring at the mix the this utility up, one fee looking at you I'll that for given one. about I well. the of is utility the very here, to guys ask the asset quarters And It a maybe couple else this you Kind leverage conclusion in essentially, of equal the guys, diminished. the will SLF deliberated arrived seems like news. better think Hey SLF, would first on all rates. and was the

the risk-adjusted is drive do what asset So question to encumbered returns. less construct for portfolio that and your XX% do you bucket with either to intend or new, return, then

in So just there's a discussion the yes – a quick maybe of bit decision. the question Fin, fair

about obviously were that capped talked at Fund Credit Senior we the the dollar place, – first dollar regulatory when a debt equity. we As such in that per was BDCs backdrop put of

view doesn't it's could it we go count of capabilities yielding the sheet cap, nice loans doing that return. platform, the So bit against that that an way the and to Frankly, the – balance that leverage exposure. get of lower of benefit by way sort about unnatural little existing off a produce exposure, to to as trying an of effective a would origination leverage get

an good is industry. and to So simply Having having a derive component of huge Fin, a talked being that. clearly through there's financing much we alpha vehicle. venture in diversity company optimal doing cost financing a this be say bigger a stable go no is used in contributor the of to done do the need world, through. most that sheet there's benefit, a overall what We important is to that one the standpoint And that of of here returns. that machinations There's But to our of frankly, can really from on in two company I'd lot joint within to is balance benefits place.

a bringing funding we the of And at venture. that whole does assets Lenders so and the feel to can and look standpoint, touch. and the asked business. would really profile from loans equity lender balance Then they sheet an the leverage improve balance joint rather they look on sheets on leverage much investment

really this funding This from fees. being dramatic perspective, now up vehicle I a those a sheet, Fin, in to wasn't as been was not that for fee profile improvement we of fees leader investment charge what should a the balance you overall, we've lower But know, bring taken is our course yes. technical approach like an to the So dramatic structure regard. think yielding the We've in grosses that industry on a portfolio look a assets. on focused guess in

While one the offered cap. fees to over industry of has most discount only in one the a dollars on

Our discount is from $X.XX.

in holistically, through just that a the if overall. doing at what one all two we're lens place more better and you so transparent the think of look much we here, was ends to up company and And

the that going question the around to if could a Fin because what forward. Brendan, strategy chime plan was there how use that piece, just in XX% you I we buckets do And I asked happens, other think

– of to into come on kind I there's the as we lowest pivot going bucket. and structures mentioned, think to investment they to Brendan financing kind But were so one with drive could that regime with the the less us do value that sheets XX% trying two focused of the that on. XX% the bucket, XX% to Obviously Brendan all structure, sort old of that this, cap BDCs Senior by you're the as sort Fund much non-traditional were utilizing help sure best by making strategy. of Care one what alluded we to your really less from alpha in under seems as getting obviously leverage to rather it balance but using rates optimizing and us alpha to of really get bucket sort world, in some one at of

say ultimately that And just interest making but our us the underwriting that produce of right and is balance good in we our I the the side returns. sure on that of net believe this the our left final much good hand say competency is then of financing would drives more core balance So credit. hand strategically that's is sheet heard of really you've margins that thing our before supports side team focus sheet

for XX% our a so And thought want have don't competency. core why good don't competency. we reason we outside a is something has intend never we we we And and our of feel suited for noncore well bucket don't to just that bucket – something go to would that's team core use that another utilize XX%

perhaps this on outlined assuming and Maybe Sure, as XX% facilitate, favorable you “bad think will touch, that’s not assets” credit collapse of more side. draw helpful. kind dialogue be a a to but I the

your You'll then by unsecured have assets supported and equity debt.

will see is, we bigger question or the composition of of sort forms other a second And junior? lien

Brendan, that two why to too. sought flexibility. to shareholders more we reason the I’m start mean, – was there value, to to I about one what we go think world curious of the I approval the the really

that limits that you're income do dividend that so, And obviously can for supports to the BDC the levels one one, types structure. in produce constrained still look of the that assets the you the investors that when

a virtue by one, of opens obviously up universe quite so investment going more. two to bit that our to And

would Fin, right. about as we've on say, And we on guess you're And been so very definitely I focused the bit lien is investments. yes, that quite what first I call, a talked

utilizing back if time, well to looked XXXX, we find dial could function we in in And we're point continue ourselves definitely staying more to again, much It intend and the in because I back being, what first But XXXX, this XXXX, That towards given attractive. of what like seeing could environment assets. I reverse. at an lien the very if was returns, that's market that, pivot We junior saying, higher the about feeling junior that's opportunities really reverse. better again, capital optimized of capital we investment as mostly think could to what the pursue marketplace, the we're point at find time And opportunities than a we market as today. attractive a those for long in could seeing a financing ourselves structures. kind is the moment, driving debt. into we're is structure

only that a that add using we're we've correlation the absolutely would about this will between I the bit, fair and have thing be amount mix we on talked balance leverage asset The sheet. there a and unequivocally there of

So we have process a internally. risk management

will a We our profile to the assets look how to entirety volatility as the the guide about of of lever portfolio.

world, So in that to does would could capital come described pass, where Jon junior that see naturally overall that become come more down. interesting, you levels leverage

And operate that's we how just the business. so

Thank you guys for the color.

Fin. Thanks

question comes Vandegrift our line And from the Leslie next of from Raymond James.

Good Thank morning. for question. Hi. you taking my

Leslie. Hey

prepared the NAV change first quarter, for the was remarks overall NAV the that volatility that mentioned decline the just the in Animal of was that market from we saw good portion overall Supply. you of portion Just on a What in one December?

crack, a take Leslie. I'll

as changes So certainly the through numbers do you Animal mark-to-market contributor, but biggest Supply see was going well. the single

by million little talk you terms. million look we that I'll in the so in but down mark forgive a Maybe Animal total, $XX roughly it of by talk dollar was about if $XX Supply. bit, So I’ll about book me,

So where mark-to-market volatility. normal it is was roughly remainder other names so the just more just half –

If close talking X.X% you took alone, to component on that you're probably NAV.

what a bounce seen then they thinks given have similar bit thought? come Do a Okay. quarter other the we've you bit that so reported, have have back. range of first And already of of in a a a BDCs far in little

you the know, something as with Leslie from of board the a directors. do valuation group, The is organization, process including controllers fashion in certainly is observation our market our with coordinated a including same amongst our perspective, we of

are change. another, to to But were impacts or want QX one way extent mark-to-market. don't there certainly So that signal any the –

think should are things about be talk some that I hold. you to marked up, prefer in will But next. see there that conditions those we

will supporting was eventually you Supply, your of And portion a Animal and was back So remember the guys It I Fund, can quarters, I investment walk XXXX, Supply does kind there? it this, balance an you of – in the was last smaller dissolving investment then on I couple went believe. if originally with through in invested that in just debt And of Credit into Okay. those sheet. still Did those back getting issue? correctly. are by the be on right. All A, fund Animal a increasing you the the B, few debt believe what’s the have Senior of when me

Sure.

in investment. So you're correct the initial

portion in there's first structure made of Fund. the Senior investment of a thing, So the that part that Credit through capital was

back half And treated other well. investment so that the BDC The Animal Senior Supply, half the will of first back any differently Credit within that would investment than take Fund. be as Cal no would it's lien take it's of investment. Regents investment

of how And – JV, we're restructuring doing That's everything its treatment. so that's would structured. the Animal with there'll be with that Supply be consistent in terms of

you'll appreciate. distributor Animal have make conversation, Leslie, pet a that of completely I'm There's does, but do we'll it provisions of hard products, business the what In to it's some Supply, performance. confidentiality the a sure company the best, fulsome pet food. terms our

it I to PE along say, light manager effectuate distractions that come way suffice I think more outcome nice here around long-term have ownership, the And So an pass. that business. past particularly underpinnings to are over trends in of business. course of of business fund. at an didn't And recently for rise hoping company to to the a quarters a part The states to investments PE call that older again, given was, I'll and the describe backdrop the perspective in vintage the it of last very that in was There stable the pet as secular that one couple of, say aspirations. would especially those

certain and debt appropriate and structure in we a influence the around just our provide capital capital equity. of opportunities areas. so to And ourselves structure continue to the thought as interesting industry, a consolidation junior was restructured lot other in outcome, It's things started think the that put to tremendous in constructive can for described dynamics And it we of more the a be lenders as actually swap market we unfold, really in synergies there's overall this really space. for position

it working we've better which liquidity done. to a on pleased manage we're gotten space. capital, that So much think We company is this footing footing, restructuring important much puts in issue hugely better the a

can your working If got you've rates. meet capital, fill you

you fill is be get give been company that the longer how the to and to forward revenue support a we has look your That are a with you If pleased head the as no problem problem. regard. to who to into EBITDA. performing should And meet That business continue companies XXXX. updates here in we you as rates, guys

Okay, business? you. thank million that NPS, it the be for $XX sale just with talking million of that was transactions increase are possibly. with close you exact that we if here about numbers, me you it'd lastly triggers the kind I triggers give about know can't today, but some it to sold on mentioned now $XX you if right what today, And

is Yes, probably not the would do triggers word I Leslie.

sponsor that by entered So of into business. equity business. a with a owned a has basically agreement ordinary company strategic private the There's sale that there's an the course purchase was

value, way as of negotiation would a to company the say as light transaction. between in split terms part overall As in the of of that, multi-tiered the that certain well appropriate there's I lenders

payoff associated the at is incentivize certainly to counting tried and fees have letter we could into it. on That the The keep lid increase. on which $XX entered have expenses What agreed, with receive company number transaction. not the would to increase do to we're So we pursuant we've a million. BDC least

anticipate if than number. beneficiary that being So million higher we might a that successful the we're we regard, there be but $XX in don't multiple

nonaccrual We I course, think but XX context very deal. a important investments but lot of particular to we pleased a be the So back we're put of here describing have part in shortly to important to never this getting there's is bonafide XX.

So already than more from received investment initial the investment, our of $XX company. the million course we've over

a that's That's from the the nothing agreed X% get determined letter annualized to into this We'd to to perspective, has that. as the appropriate the versus income transaction. multiple. anticipate the this should while So sale We've processes, forward we simple waiting our transaction They're a FCC just X.Xx nature initial get income the not our being and wouldn't close. of we the money business, That's of concerning XX to business. investment of the accounting IRR, there's and approve accrue about move XX. we're income as the certain transaction That in to said, restricted as proceeds accrue statement. payoff be for so really telecom

my Thank this morning. question you taking for Okay.

you. Thank

Securities. And line your Testa next Christopher comes question of from National from

Hi, Thank taking for my good morning. questions. you

a forma asset When therapy SCF nonaccrual does discuss – pro to bringing that the also as of professional on wanted physical Just well? balance pro part you numbers sheet, include that nonaccrual rata your you're the gave.

Yes.

So exact we Senior very Fund. the of can come a component Credit small back with there pro-PT is answer the but

include. pro-PT back half balance does taking I number Therefore be can we that. come believe But of our that back will we So confirm off the sheet. and

balance on are Senior Fund gave Fund Credit forma basically we The on Chris, we pro the numbers sheet, that Credit forma pro the number does you. Senior the gave coming the for – not balance sheet, include coming for what nonaccrual senior

Got it.

Okay. quarter extent to fair. any market course just tell, then of with what that's And company, had the detail of went just could the to know you're quarter you curious over the the because down just happened Supply of on Animal I you able what over it get kind a and you that? guys happened as well, cost it’s Could the No, to private course of a but more disclose into XX. around kind

of is we I we'd wouldn't going of Yes. became likely was accomplish, period. our what love the some trying was nature with be pass. say prefer That appropriate it fair, to gave to come the to coupled take say, sensitivities the there given might not And around, into, we that fast deterioration rise to restrictions. confidentiality certain sort not what to This said, thought to during is, that company come the is to fair being mark performance think that in what

it. Got

I That's comments and appreciated Fin’s to Okay. the in response the fair. your balance of sheet, SCF And on bringing questions. with dissolution that

Just this the the consideration one above inherent just to in structure of you generating. due terms and guys of versus, one was it's wondering, having much returns to leverage how that was not economic for this right going the of being,

amount economic back there's a really there, you the not peel of change to here. If tremendous substance it

financed. affected in this balance then in out impact would is We to vehicle dissolve details that we've the you this to it the of the leverage Effectively, sheet. an has bring equity before intend effectively on the every on not here and is the and that single about and investments equity venture. transaction, joint balance schedule assets we sitting BDC sheet, So today investment the the we investment SOI give how

it bringing the our liabilities can both the as You of assets think SCF. half as, almost at of and on

the really that's place taking of what's here. so And substance

across other venture these is The in the have co-investment exemptive joint you relief to for SEC point the platform. under note structures,

in have a other the to any between your ability don't of venture allocate vehicles. joint You cross

So types by cross do that be those and to with in having of those assets there's accounts allocated assets you enables balance effectively amount and increased to of other able back be bringing accounts an sheet long-term. flexibility different on them transactions

good structure the had provides this that structure that on, flexibility. just much though a was returns So great greater we

If had that the you ability In exactly one longer two you no and to one you're is to we're – doing sheet a applies. a just what business sense, what of had blank today or but lever role do. would one a SCF the to made that's paper starting

It. Got

at another is the attractive that I detail. back Okay. SCF, as facility And buying from more you finding your to are Appreciate half, you guys the that looking the going or credit convertible loans the the now, forward increased current know you're and time? at be unsecured least

the Chris, onto in to funding. we're We mentioned the able revolver Senior at as balance the of balance continuing certainly Well, our the to size to in our the my prepared sheet. sources be I look rating flexibility diversify as our and capacity company us term, Credit sheet. long-term, that remarks, opportunities and definitely grade investment of to critical the for view, definitely near gives But we've Fund bring increased the assets of

unsecured necessarily that probably an I'd near term, right say attractive And so now. while offering not is not a, is

and Just as, being we the is, that about that we'll you continue where to evaluate said, market given proceeded. certainly to talk quarter's as the that

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Our pleasure.

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Hey, our taking guys. for morning Thanks good questions.

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in-line with many public environment peers have characterized your So this comments competitive this of morning. your remaining

from across relative this deal partner deal, sourced additionally what those passing help years? of does from and prior was percentage compare your are a what debt mentioned of us close sort did your including that this to wealth could that maybe you quarter prior to but channel. how activity you you're deals some muted, understand changed characteristics period, on avoid You trying came you has and when And are how

Brendan, you as probably some I few then have a thoughts well. have that and on

the year. across of terms sort that question seeing are the our rates, relatively I would of percentage say I number that same are that in think new still doing So we transactions We deals that's of actually of consistent. come very deals, literally holding, actual at desk? deals. of every we of look overall look-to-book And and your a small we do regarding, hundreds first hundreds

or the like in new of that that XX I portfolio many with think recollection hundreds terms companies that. year last deal of said by And added in opportunities. we of was I something neighborhood compares

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causes what us pass deals. to on question Your around

highly certainly think, we predicting that want is make it a for companies. looking that most been important to true throughout focused to that and factor bit but and cognizant exposed macro fact the we businesses not in less that economists, I economic types this cycles. we're, to probably that mind very are does We're we not and is we're economist of our on more about, recession, today. not there's think macro durable stay the really history here because we're the think us we're top much But are Is a in offing. of durable quite

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the that more out some or syncretic market can, of that customer be. than other got concentration is just you of or You sort find you sort find some they've risk aggressive to want that could is

be might leverage we think more to appropriate. is willing Some than people add

might do willing to without that do. deals people not want covenants we with, be Some might

you there pass I just of one we're through But cycle. do the reasons reason might not we deal. why with number So think not because the of the is business deals be on the and business profile a why a the competitive those durability can comfortable

you. you. great thank that's Thank Alright color

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

weekend. day if have us Thank have great and Great. don't questions, hesitate any Thanks a follow-up please directly and for joining great all you you and with to a us for call Ian. this

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

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