Blue Owl Capital (OBDC) 7 Nov 242024 Q3 Earnings call transcript

Good morning, everyone, and welcome to Blue Owl Capital Corporation's Third Quarter 2024 Earnings Call.

As a reminder, this call is being recorded. At this time, I would like to turn the call over to Mike Mosticchio, Head of BDC Investor Relations. Please go ahead.

Thank you, operator, and welcome to Blue Owl Capital Corporation's Third Quarter Earnings Conference Call. Corporation for earnings September the Capital an and XX, Owl presentation earnings third Blue issued release its posted XXXX. Yesterday, quarter ended XX-Q SEC. be yesterday should reviewed conjunction the These in with company's the with filed release, . All materials call, company's Investors and today's referenced website the at are on of earnings earnings available including XX-Q section presentation the on press the blueowlcapitalcorporation.com.

Jonathan are Officer; Logan Joining Executive Lamm, Financial us Chief Chief on Craig the Packer, Officer. call President; and today Nicholson,

call are listeners statements or those OBDC's I'd uncertainties forward-looking filings remarks a that outside differ forward-looking may like as today's may guarantees performance a contain and results during with the future number remind result described in SEC. results number company's of not including are to that control. of Actual and statements made involve factors, of of risks in materially from those a the and of

information call verified. materials, warranties company no third-party to statements. makes obligation to respect update derived independently was has related company's sources such representations earnings no forward-looking company with any this the from and this not discussed Certain including information. portfolio companies, in been The The on to information or assumes and

Packer, the Chief that, to With of OBDC. I'll call over Executive turn Craig Officer

of XX.X%, investment the everyone, robust . morning, our quality asset base seventh activity. third today. consecutive We We our quarter dividend attractive all ROE and delivered our Good yield, Mike. and ROE for and achieved Thanks, the resilient strong portfolio portfolio. quarter continued results you thank joining and of quarter performance reflecting us of driven double-digit for credit by

overearn performance a and our historical asset just supplemental base remains below dividend, us share on portfolio fundamental net highs. pay The more industry remains continues our moment. value to enabling per performance in rate nonaccrual will end, the to share financial per from OBDC $XX.XX, quarter average. and of the $X.XX our dividend, the well share Jonathan off of was As strong

We're of put think results quarter, shifted context spoke cuts broader year the this we very our we're is based you and rate important remainder outlook in what we The it's considerably. the pleased the to Since to of over in seeing with additional on quarter, them interest inflation recalibrating the expectation an last has eased. of the rate now as has market markets.

When rates supplemental base ensure dividend. base benefit these our initiatives Both deliver we to from decisive maintaining our were earnings while increased flow X a and over introduced momentum years our ago, dividend of the cash We shareholders increased would action cushion expected designed variable, ample shareholders. to modestly framework took on dividend. to predictable

associated momentum. rate our has rate returns that rate the commitment floating share, base investors, the we higher last ago. X implementing to total environment shareholders forever dividend. programmatic supplemental from benefit of benefit supplemental the a shareholders of per proven beneficial since of earnings environment would from and elevated the launching to dividend OBDC reflecting the providing while shareholders that As by OBDC allowed our recognize This received not increased predictability move structure a dividends ensuring our $X.XX our have supplemental years with dividend

throughout ample ahead. rates dividends. believe excess modest fast To of income OBDC's us environment upon we our one XXXX. this rate our expectations, be decrease, coverage providing how In to XXX%, the dividend dividend confidence supplemental among navigate rate BDC third the market highest to peers, base the was current ability with covered and additional put quarter, Depending in may generate continue we base will pay given context, in

market to environment. the Turning

and we broad stay to Even at enhanced capital portfolio during of activity, industry to and platform and attractive continue opportunities maintain our deploy find While muted returns. origination times differentiated leverage to deal M&A activity remains strong optimal deal subdued, selectivity. scale flow our we risk-adjusted for leverage

new $XXX a resulted assets flow Our the lending in co-lead borrowers has a of number investments in are we investment. and draw of our for activity. buyout Across over on any single billion With we on positions. as incumbent of deep or period can commit XX% approximately our upon and platform to of sponsor deals, lender under modest large administrative of agent lead relationships a even have we management deal existing a platform, billion roughly to of a pool $X our growth have XX% and ability credit,

for or presence roughly is in the To typically X/X reflects deployed significant our existing driving companies us refinancings our trust XXX were one this preferred works, into as the borrowers our not acquisitions. but add-on this also significant equity We companies, the This in us confidence the portfolio private portfolio makes believe deal we provider. our originations when of a have sponsors financing in that place financing in only of new flow. end, a call first quarter that

of the largest one lending teams industry have also Blue credit several with the Owl. coupled strategies in professionals investment XXX at We over complementary direct with

Capital quarter. we us as scale most that the billion across ability us advantages is deal selective our Blue sourcing through provides our generate over flow to Owl platform This has this deployed to competitive platform across and credit significant even $X.X The both remain capabilities. significant allowed the our one highly of

ability attractive addition, for enhance fund and level our Management, Blue into September, Owl alternative In of Capital which the platform, manager closed originations asset focused broaden Atalaya on ultimately capabilities strengthening in drive quarters. IPI acquisitions home has recent has footprint of an centers. at the data exclusively to in the announcement October, growing the made across our in These deal managers, expand drive our the global coming acquisitions helped and flow our overall investment our Partners platform the credit, leading which

durability portfolio continued our shift. strategy our and reflect credit strong the as companies focus our as These ahead, we senior within our selection We're even of investment positions portfolio which remains on management, from proactive the about a market. on challenged portfolio focused of economic lending was results to and in number the Looking secured remain approach, achievements middle direct think we and investments upper small. conditions seeing unwavering

Finally, OBDE. to I with our previously on update an announced provide want merger

discussed scale we've overlap, enhance our direct last lending to a lower-cost finally, platform, and our trading drive savings. high-quality expect diversified profile improve operational with of investment current our merger our cost our call, on that streamline significant sources and increase we debt this efficiencies earnings for shareholders, will As portfolio access liquidity and prospective offers

accretion. important over merger milestone it with per term process and near in achieved We that will also both drive an appreciation We anticipate an the the -- for and in when was long NAV conclude solicitation me, meetings by the of share declared accretion, statement SEC. excuse NII joint the mid-October proxy OBDC of proxy has OBDE begun The process our shareholder scheduled each at January will for opportunity X. and effective

January accordingly. is will close in shareholders We review your the that materials current all Our transaction to expectation proxy XXXX. the vote encourage shares and

Board reminder, additional myself a the recommended ballot. unanimously favor the for As has it performance. in I'll to on of shareholders Director, included, Logan proposals OBDC over turn color vote of portfolio the With that, on

Craig. Thanks,

activity deal in and to M&A low find quarter, strong opportunities flow. the solid third despite capital commit to the origination continue We driving attractive persistently earnings

new deployed quarter, was approximately the which commitments, in line repayments. $X.X billion roughly we During investment with in

from majority our of incumbency borrowers. resulting in our originations mentioned, coming and the an scale advantage, creates existing quarter Craig this As

the we able the believe funded across across the as an Blue allocations reinvestment in our quality market. share of second Owl lien the to for in We committed that the $X.X we actually contrast platform. today. first highest to We our to our repayments most billion consisted of the largest, quarter's elevated in unitranche new quarter LBO opportunity. platform. did saw grow origination portfolio were a present XX approximately names relative first added new lien loans attractive larger value market lien the where investments to XX% we and deals many flows, that Over provide not continue us in that would activity Audiotonix, with this this achieve some to were and into And first borrowers refinancing of able I

XX% approach in long-standing As believe histories operating a portfolio. have lien sectors our portfolio resulted XX% investing grown businesses noncyclical We first upper the middle significant market disciplined year. our in of in an highly from in the has with result, diversified and to investments to prior attractive,

with than represents of our an portfolio EBITDA $XXX portfolio, of investment average exposure single average company. $XXX X.X% is less weighted our any EBITDA million the median LTV XX%. average Our million, is and to of minimizing of The borrowers

We believe our borrowers of operational and market this their benefits strategic stability within as scale sectors. are many leaders provide can

last flowing average to quarter. and Across with interest we well, our Craig the about navigated around next having trough up companies the performing is the from X.Xx, X.Xx of coverage our borrowers base portfolio, mentioned, over in line quarter, expect see the the the in As to improved coverage how our higher rate This rates environment. portfolio through benefits of quarter. thought we prior lower are

see coverage curve, Xx we project in the interest conditions in significant now, performance rate health. portfolio borrowers and continues expect gradual should to year to on continued forward Based interest One high declining from average rate improvement coverage. be the we ratios our of remains driver earnings sustained forecasted be credit the as forward company remain of Within portfolio, these most growth the assuming to Xx stable. low our our will

earnings EBITDA in growth digits year-over-year. our the borrowers modestly are as ticked note borrowers and Overall, quarter-over-quarter of our well. We'd that growing up mid-single revenues

our we and us confident resilience Our continue of of changing to portfolio advantages sponsor varying will the economic portfolio scale rate support, and environments companies remain well. which landscape. in across have size, believe the We the serve

our points Our in value, low new quarter. of nonaccrual name the this XX of reflecting additions from no remains and rate nonaccrual removal X fair basis debt at portfolio

and other of activity of another on rated underlying And our declined remains sign amendment material investments. In third of finally, quarter-over-quarter, pickup health modestly, of which to signs portfolio indicators encouraging we stress. not list investments do quarter, X rating is our of of our health is primary system. our the watch and in steady internally the any the or subset the names see stability of One X our internal actually

PIK also a moment on our of to an heightened exposure, area the I in market. want focus spend

first over we income of said before, our have exposure XX% in of investments. and more initial form the As underwriting, half than such at our PIK structured was of is lien PIK as

quarter-over-quarter and portfolio. PIK in exposure year-over-year In stable remains the addition,

of flipped the and XX% of Due and a XX% company's Citrix refinanced and strong to we In XXXX the which [ names our ], PIK PIK represent interest fact, in in was of investment equity some quarter best A inception senior recent with S the IRR of with originally preferred to MOIC preferred investments. pay. performance, carried north was ] cash debt equity underwritten these [ our and PIK recently Citrix in an plus example had at generated X.Xx.

Our be to portfolio us ability risk-adjusted returns deliver to in resilient, giving our stable our attractive continues for and shareholders. confidence

I'll now to financial And call quarter detail more third to turn Jonathan our over provide the on results.

you, Logan. Thank

earnings outstanding the the demonstrated and billion environment. the $XX.X with for debt consistency total performance third despite the third financial Our of billion. of $X.X We total quarter changing ended net portfolio of investments our quarter of market billion, $X assets

Our the as resilience of share investments. a impact reflecting $XX.XX, our few . third markdowns our near was NAV We our the credit-related portfolio remains on demonstrates select quarter believe it historical per highs. of NAV

Board base our quarter, declaring record net the to to the maintaining to our prior and earned prior related of driven towards stable be leverage per quarters, December over income XX. dividend, a paid repayment XX the by on $X.XX income. earned end will for We resulting $X.XX range share, investment third the Turning higher on from $X.XX income supplemental down of shareholders we the target Similar November which statement. of in dividend quarter, meaningfully

a quarter shareholders dividend January paid also The will to of declared record of Board which December fourth $X.XX, XX be as of base on XX.

a earlier, believe well base XXX% lower well mentioned is we OBDC's environment. dividend Craig dividend earnings by covered OBDC coverage. our is for with positioned As rate

income. forward. a Further the that our is supporting result spillover of of provides approximately as with of finished meaningful going a which distributions overearning share advantage is quarter our spillover our We strong dividends, per stability $X.XX

lower In share portfolio, and no points if next $X.XX XX per cut additional rates, we our sensitivity asset basis by an of rates terms to changes quarter. to would are other to the over NII expect assuming our decrease

rate amid additional and reductions we for to time comfortable impact rate to dividend evolving of rates these potential interest information our investors take risk in level Despite We encourage base to earnings. on with headwinds, our feel environment, very asset will section any refer the sensitivity. OBDC's our the XX-Q

sheet. Moving to the balance

to We deliver continue structure to enhance optimize our and liability strong to performance shareholders.

to X.Xx leverage of quarter finished range based were X.XXx generally repayments. target We our line with X.XXx net third within in on the of that originations with

liquidity bringing total with by $X.X we revolver across Blue strong by increasing the XX% the This our the revolving lenders, have billion. our importance $XXX capacity position of and relationships X the bank During million to or approximately enhanced reflects partners quarter, Owl we represents facility built our platform. OBDC's

stood unfunded our end, $X.X at billion, well commitments. excess As of total liquidity quarter of in

we our and I'll very can further anticipated provide through We Craig liability Additionally, we from to pleased optimization final with with to what synergies reduce today's ] believe our OBDE. the And accomplished for our with resulting remain [ we structure. back costs call. results thoughts merger with have now liability hand it and

built and our our performance all low mindset, rate and ratio have portfolio and Since this will delivered of ROEs perform direct strong our and loss to framework points. credit with believe reflects basis long-term approach quality this resilient managing Jonathan. we dividend in inception, a OBDC. XX a business Thanks, constructed approximately platform commitment lending very portfolio across well and ensuring economic with a We've our credit long-term environments. interest We

are that high-quality invested fully portfolio. strong origination ahead, maintain allow us confident to Looking capabilities a our will we

to lower also portfolio our they leading earnings, for rates reduce expense increased While companies, performance and enhancing interest impact OBDC's their M&A will activity. will potentially

New light private into capital both strong activity with recent historically by tight in and spreads has debt inflows credit public quarters funds. driven been

have to pipelines in lenders needed ventures Blue This they sector, to At has joint put new strategies. expand across direct established Owl, pursue origination we BDC on not these banks pressure as efforts. the seek and between resulting

our more cycles. investment As heard and our me in our long-term today, sponsor us scale, relationships challenged say carried our team, you've through both our have and market investment thesis economic activity outsized

activity current will to a meantime, we M&A to rates trends in not strong, spurring continue deliver Lower recalibrate, for is the deal remains shareholders. wait could Eventually, as more invest returns while credit growth market believe potentially the pricing as in We increased portfolio our in deal wave result activity quality the to companies confident will persist we're In indefinitely. increases. healthy, improve. and the imbalance attractive our and improving initiatives, market our to ability of supply-demand

to position for pleased for entering We and macroeconomic be a thank changing will With the line are questions. strength. this you open from of time your today, that, we environment now

from with Brian Citizens [Operator first Instructions] is Our question McKenna JMP.

term. sub-XX% in challenging continue think that credit what today. spreads drivers in to The and question on to you new the private a I the just here? quarter. yields excess So start within predict the in do of where terms yields on there's and average yield for also in these few new know go totaled And commitments will more near from public that, bottom deals confident But makes markets. then close we're to a different to of kind of Do spreads. be you credit it's

there's that's based some that's probably or X on you're are meaningful Sure. say is still, are [ tighter still X.XX%, than percent the X.XX% Brian, ], would attractive. as of than are tight deals, spreads probably wider new for which generates risk gravity about that that I X.XX%, sense a that the Spreads I as center in SOFR thanks that, as troughed XX-plus spreads is there. low think it is I still last are on where We're the but for today deals don't we deals. absolute question. X attractive certainly seeing ] just think will X.XX% are very doing and that. a given than for [ My come where not tighter think noted, troughed, return, that. is, months it's activity or X come things the so, you

think hope year a spreads trough and But a level. cool we're more at I the do a up and is picks so in my the next M&A cyclical bit or widen to will if markets normalized then public

maybe you this, over. know ] ] As relative than tighter [ to spreads I significantly ], some X.XX% think [ question listeners spreads [ to market are are the Public public markets, don't, X.XX% over. of public but X.XX% and your market the

private public XXX-plus fees point market not to also the continue available the that is are underwriting we investor. so markets premiums get the fact that ignoring offer And basis to

markets will substantially markets. the And some . I'm public private to hopeful at returns, the continue So versus normalize. that spread returns higher differentiated generate point

areas helpful. of That's And to these Owl then Okay. to like clearly within capital and centers. going needs continues the capabilities, markets. both broadly in super and bit There's my data Blue of including credit just within then higher-growth for other follow-up, platform quite a more be expand alternative infrastructure

do lending to time? direct across the look this So to over then way BDCs, your any here think for relative all And here opportunity what yield opportunities does regular lending. is to mean there you'll way in you lean frame ultimately

Owl a large folks Sure. so, has really our of Atalaya, these hyperscale the including as our space, done our and strategic lending BDCs. our -- Blue credit significant think or transaction acquisition platform the number acquisitions into recently I business, are opportunities now a our of space into insurance of terrific last as small data or center insurance a in announced with IPI, mergers alternative the our expansion you noted, all for expansion direct year

world lending will to in our now on very that we going opportunities, to But meaningfully and there high-quality think teams the our Having strategy where platform to sectors invest going predictable classes. since the select credit We're asset to Blue ecosystem that we working generated in it. changing create into will haven't deal we just in expand have flow. can and one we BDCs. investors have select asset to our before upper Owl their across really continue have recession-resistant one to of platform respective BDCs. larger with put opportunities a income going scale we're the going and platform, had the not both in in roof generating-assets and market, I be That's are non-sponsor We significantly be as have sponsor one to assets, returns it's significant high-quality, under are And opportunities focused inception. sponsor-backed now middle that manager strength

to of flow. I I concern avenues having to source drift. just have credit that about relevant now capital, folks might of now us -- to not us think had know may where now do not to scale of Companies the can will be new call don't a call deals. we'll create will want billion for those able best don't necessarily going always source $XXX on capital want for have be platform. platform we've call I that thought new deal And met us. a strategy But thought their don't Again, financing that owned create give us, businesses is founder our Sponsors as a needs

direct now can we'll way regular before, place, have we roof. generate the also additional people all not in and as mention opportunities direct one underwriting just to resources lending are under us could so it calling And right but the

excited quite about opportunity. I'm So this

returns In of and have direct returns importantly, the extremely credit really high. lending profile, center of of but investment [indiscernible] credit in very are terms alternative excess businesses it's -- business insurance been the business the business little generates because the return the mentioned, counterparts I each more attractive the bit those orientation model. the In different investment-grade a is quality the business, data

under roof a negatives far no X to as to is can this have and see.. OBDC this as I huge So all positive shareholders

Compass question is Alexander next Casey with Our from Point.

quarter, the you on sort lift dividend of fee the wondering income kind cadence in the next combination run to that you're quarter, of the the kind where correct and that's of the me. third able sort might I second different. rate I'm of But the until the income of is for quarters or run of feel of rate couple then and this at of to consummate merger, quarter be least the question on answer

Jonathan well, never and say Casey, say, ]. that you will would Sure. we I'll [ start whiff

than the numbers can and You do a so call but wouldn't that Jon, recognize add of color. if been some [indiscernible]. your might we additional that ours. might get have it off you it But one stance, different bit I

company amount other were there On some really, second on model your of have think There's bit senior it in fund of either the investors a investments, quarter, that that about it couple do Most income. loan questions. particular of based have them -- from and dollars. quarter, that same significant . In stocks I dividend been components performance may a might all contractually One $XX of a a of the the maybe is or investments as of or nothing our defined a and in underlying we variable it's generated of these, off there. most that down well of really most hold the in few think, assets approximately like income or it, as some preferred like. businesses was declares. Wingspire -- the I million be million not dividend it's a individual a income, might particular this have

on And so what's Historically, on quarter-to-quarter this -- move or $XX of going is year based first negative. million; it it can dollars around million few $XX half is million. about underlying assets, a quarter positive those this in the will

see, Next quarter, be have we'll up just bit. could it to a

related think, was really I piece, in some to primarily numbers, fee income other repayments. The your

really on. As of environment, significant low there is had refinancings folks second we quarter, a repayments, rate exceptional know, given lot the

we second this off nice And so had this income wasn't generated repayments of it quarter. accelerated in but that quarter, by the some number

maybe bit quarter, the a to bit bit me, zip -- The prepayment we'll fourth income code, see income, a so higher. in fee the higher, in the just the how have looking quarter It ahead dividend probably And to the could a lower. same zip the ends. be be excuse income, code, hope

if.... don't I Jonathan, know, So

hit right that helps there, you. I Casey, think on everything you

relative the projected I up to prior an effectively think quarter. you had number really

think out. hopefully straightens that So it I

who swing. appreciate I Well, people right. and clarity who only don't All [ are whiff the people the don't ]

[ I'll it still take So ]. whiff a as

Mickey from Our with Ladenburg Thalmann. next is question Schleien

is is touch spreads to how nonsponsored just do organization, you tight wondering just about compare et sponsored non-sponsored? could you your that portfolio cetera. within the a if your was how there? I But do on so large Craig, in economics Everybody are the segment. market, proportion wanted the how what of nonsponsored And have talking is I market. Yes, review

plan, done one investments. single We've not sponsored since part our Sure. of That's associates largest sponsored-own It's business deals our a inception. of company.

so if regularly, capital, is we struggling, not reasons extremely we that's sponsored-backed really And deal. they do the resources that to features and the will although prefer or going particularly the typically are selectively that they for significant the sponsor all companies case where the business management We're continue can those to we prefer ownership generally but obvious, companies the do bring we -- to nonsponsored governance, strongly and team they in nonsponsor can well. group get attractive know add

that generating spend significant the BDCs goes Sponsors day can nonsponsored velocity and of but years opportunities higher pools are opportunity Nonsponsored sponsored generating go for capital, is than because in to world on much focused capital activity. companies deploy probably it without any and have the thinking deal. sponsor all the lending saying, every ways the business about of without us. capital investment

scale So it's difficult the in invest capital to it's more space. nonsponsored very much idiosyncratic, and

true lack but we as And business. given bar So just seek is think opportunities. it I investments, for was of think oversight. the the both those started sponsor I that's make some true today, the we higher We nonsponsor and of our

nonsponsor, wider. opportunity. on In get it's I that credit varies terms you the can don't for based terms it currently of meaningfully the think

think with the I the are clearly expertise [ ] in negotiating. and deep have on margin, expertise sponsors that law that work a have firms deep

goals. might a always that push not relationship an it's company a that is critical about is lender founder-owned and for maybe a non-sponsored lot of a way the because awful And same they'll their so number reasons. cares in nonsponsor have business who typically A

there market. that to basis the for will going not you're spread see so don't goals I a may going don't opportunities. you're It's But protection. think -- nonsponsor I to really last point wider a be And other the for credit different last think dramatically be not

to And so . I focus continue think sponsor we'll on

Okay.

of I question to presentation. relates think My I understand. the Page follow-up XX

sort -- triangulate some the Just on and of dropped at SOFR trying and by where we The dropped weighted look XX new X that average commitments dropped on average Spreads middle basis new interest spread. weighted commitments to average basis the of the the X.X%. middle points. interest the points XX the math rows rate in weighted rate

to there. correctly, math last So maybe And unitranche pretty do on last to question, to was reading have think which else is but the allocation has understand I it I'm quarters. the it trying in understand declined the there. dramatically want with there may I'm something I something to question, your to my if And that's few going answer the if

We're is really follow off-line and happy to up get detailed. new commitments. Obviously, this just focused on

portfolio, the spreads last the [ down been the [indiscernible] of about, have as over we've of quarters. portfolio, of small couple talking XX% relatively ] So it's part a come

off And X.XX% ago, you X.X% new see a And spread question so far where is can minute, a deals this minute said ]. coming from was I on a basis. [ what that, just not

market a where or change lower no the third in on market on new migrated and rates. So lower there. the lower [ base quarter spread weighted just question . To combination base and commitments investment rate interest unitranche, your lower average the that's of to is ] the obviously

on unitranche, are are focus lower to they continue spreads were. unitranche We than

higher its know, typical loan first so art, of level meant to leverage term first-lien of as lien than a unitranche, it's term a term the a through describe loan. a you term bit And

will that's so continues The on there is in focus -- unitranche play. some our filings we exactly BDCs just our where have. we to also bit. continue we that's and we And most spreads much certainly that in -- That's to of be. come reporting evaluate how put play we a to where product And I continue are where the -- think just

a be at go loan. robust graduate quarter every every they improve unitranche often quality. a a to look first-lien We determine through They credit to term pretty and process in loan it's as still whether

that analysis to disclosure, freshening be function that of so look just not of we're how And also at the quarter-to-quarter, will deals, quarter. new but quarter if only a you

it down, coming ] back lower spread, again, new will rates base question, generates of quarter, your deals about So to XX%. coming [ commitments weighted in, in modestly on the rate investment new lower happen average

from Our Fisher with next is Truist Securities. question Maxwell

Mark commitment specific the Any strategic than for it's well those in the new shift past there investments on maturity or . purposeful or lower as Hughes. just portfolio average made? on several . companies the been The quarters as I'm was

was for being quarter, leverage. the Thanks mostly at Logan. us Sure. to relative question. our It's it to Specific target this

available so invest to capital And simply lower. our is

our so And capital the accordingly, with what more available we investment to in bite repayments have our size that little second was . where given size mentioned, was and bigger. had a bit the reinvest lien so quarter lower in quarter, happened first the prior we average

has than looks equity investments common like it And Okay. OBDE OBDC. on of less a priority

Now common that just these I equity wondering investments? combined was prioritize -- company will the how how

that It's well in investments strategic OBDE. that Wingspire as as primarily the in exist a our loan function in of equity don't have, we senior investments like fund

to decline, companies So as strategic but access to investments that, an over . obviously, have obviously, see grow immediate a you both have will all -- gives time it combined the but room company, shareholders you'll those will

Our with next Robert Dodd from Raymond James. question is

], whiffed slightly haven't out also [ I stuck but I yet.

with So same the there. the I'm in Casey

-- was calculation. from the to XX% bigger quarter. think I excluded portfolio [ XX%. in X.X% That's of the the coverage, obviously, beginning is the ] was part that it On the last X.X%, were down year, But to up interest there the now it of

So in been it's almost half. cut

much was portfolio lower So EBITDA it of not beginning the the applicable, year. maybe the share at is of is than the today

a expect -- you further shift us maybe more is relevant we that on the positioned that than deliberation was and flow, rather EBITDA is any ]? performance where [ at ago? companies? that give cash portfolio should Or on to year color Was focus can a the businesses So

it's where point there too its we life I because getting companies do a have depressed. I don't from draw, but the -- and I think are flow in we mean investing in business is when positive invested this calculation, think draw. in -- to it's might cash typically the company it's cycle to excluded there's the much a there's

this the space reason from a And would underwriting some clear standpoint, do simple. comparable is will don't of the . But that would structural eventually normalize and We other those analysis. it's our investment in and we get think the that and skew range our see to so it particularly there's expectation software or coverage. approach in companies skew the interest We calculation. why normal pretty very

out. in And calculation works, credit it's because skew improve quality going We're I highlighting make now model working. to kinds became and companies, included results. just because investing statistics they you're investments to are their to the so those going their is of time, not over the think they continue We're in

want to artificially continue to continue that on return, deals signal So we results for going it's risk-adjusted reported to few attractive do going to may I get that have quarters. where we're don't to skewed but because better get a they can

in Right it's now, it. of reflecting little continue well, and might enough the may get same we repricings skewing bit a we up refinancing go think well, at probably new not deals. bit. do I something some measures new with a those and bit it's more the of we we're environment a portfolio probably to to noncomparable an also and those low statistic point, deals, that's worked do When and have

Finian question is Osha from next Wells Our with Fargo. Instructions] [Operator

guys and if else anything I or that will talk rehash the you if strategy think about? post-quarter about can the of sort composition SLF, think or in change to Craig,

all. the long syndicated real that's as some and loans broadly had lien at No then change our first directs is taking of direct we're strategy really Jonathan. portfolio effectively a What ago also it's which JV, evolved mix where -- cost to more been well, advance Fin, a we've financing in some historical with much we and efficient rate joint out from of effectively effectively multi an BDC our venture created of we're creating efficient much a interest different more BDCs and perspective. in allocate from an all can doing manner,

friction of taking moving portion effectively JV. JV from terms transfer in really any of JV friction that rata into what's over. the they're original there should those to so assets the terms we're little returns of And back the OBDC here pro multi-BDC over very assets with that a And multi-BDC as effectively the be very, happening in of is

say, through 'XX Have think know we guess, a on let's about I in guess way? the or and that follow-up. how and we opportunistic, composition you And is Okay. down It's but mix, should a helpful. as everyone I the I today, look substantial unsecured if change merger things maturities, the unsecured go will up

that. are We've there the few closing. go got a Well, into merger that variables

funded to around X a bring billion unsecured, a that's as next year. bit we're the We've coming now, basis in come XX% we on it'll XX%. about down $X about little right due companies So got

percentage see as so well, that us expect a financing And attractive much. said, from don't markets there refinance. the there. unsecured we to is the but definitively as bring market unsecured from a definitely you we that That secured extremely is perspective want what is gap down too We should being pricing see we'll

terms I we material secured see CLOs to should a of think movement cost have the much you to on some side lower the of in definitely secured higher-cost our over finance structures financing other the So but don't too opportunity and reprice time. of percentages,

no conference questions management hand the over to for like queue. the to remarks. With I would closing further in back

really We're the thanks, for look, everyone, Well, pleased Okay. with quarter. joining.

we're As of to always, answer here questions. any your

out great I and reach So there's separately a please if follow-ups has everybody any hope to day.

conference. Thank conclude you. This will today's

you may time, at thank your for this disconnect participation. lines You your and