Blackstone Secured Lending Fund (BXSL) 9 Aug 232023 Q2 Earnings call transcript

Good day, and welcome to the Blackstone Secured Lending Second Quarter 2023 Investor Call. Today's conference is being recorded. [Operator Instructions].

At this time, I'd now like to turn the conference over to Ms. Stacy Wang, Head of Stakeholder Relations. ma'am. ahead, go Please

XX-Q, morning, Earlier to press today, of of filed a Good on are Second Shareholders the release Secured Quarter presentation section our and results Call. we website, our of and you. which Blackstone available www.bxsl.com. welcome our Lending's with both Thank issued a

to referring be today's will presentation throughout call. We that

differ results. of I'd which are statements, do like include the control any update may firm's forward-looking duty to actual remind these call you materially and undertake not statements. may and We that outside from this to uncertain

affect For of please some without of Form is the risks recent and most of the that XX-K. section duplicated could may Factors material audio be cast results, copyrighted consent. Risk annual This see our Blackstone not

turn BXSL's With Marshall. the Officer, Brad to call Executive over Co-Chief that, I'll

good Thank everyone. you, Stacy, and morning,

Jon Joining and Executive Bock; Desloge. our Chief me Co-Chief today Officer, Teddy is Officer, Financial

like on over the with morning's on Turning start some our to the this and portfolio Jon to before thoughts high-level into portfolio results. to and Teddy agenda, more to quarter go details and market turning I'd second the it

net So increase income and X. turning another quarterly reported quarter, per was portfolio credit net strong to continued highlighted dividend record our share, BXSL which an distribution, base in by value our strong increased Slide investment asset performance.

represents lien third of and Looking XX% quarter, at which the annualized equity. to per to dividend increase quarter XX.X% year-over-year XX% quarter-over-quarter net value BXSL also base distribution NII, much by our investment a peers $X.XX distribution we income, XX% details, a In of share, share, a share net dividend return covered increased share, announced on of per per the first $X.XX or the on portfolio per senior which as XX.X% the $X.XX represents secured assets highest our we June quarter our its with and in annualized second XXth XXX%. asset invested to among of BDC one an

protecting on investors' focus our continued we perspective, capital. portfolio a From

During lien investments an we made the first of the XX.X%. quarter, were with secured loan-to-value senior XXX% of average

XX, with nonaccrual XX% June of market cost fair marked of average portfolio X.XX% secured of is only minimal amortized X.XX% value a or has below loan-to-value, investments and at X% lien fair first at senior rate at XX%. debt value BXSL's XX.X% As a has

Our highlights reflects $XX.XX share on net strong which value, asset provides per X $XX.XX increased additional liquidity activity from portfolio previous stability. to our the Slide portfolio quarter position. and

line on quarter Second in with repayments calls. communicated previous $XXX sales and we were million, what

and range used investments and million. primarily to to X Proceeds X.XXx proceeds repayments of our from were other for used were targeted sales leverage new reduce to $XXX of

Additionally, exit we of equity to with very second X.X% gains of our positions generated account of associated commitments. about those Westlink. strategic we realized $X.X quarter only be for the in the portfolio, And while continue million

from cash For million Inception proceeds in positions. $XX to of quarter example, million total BXSL's positions Weston equity the XXXX. third realizations invested those quarter site in of the of totaled realized a in and data XXXX second $XX date, on across

strength continues economic our exceed if to forward, to continue deal expect to Looking expectations. we pipeline build

Just to across see are inflation, Blackstone ecosystem as our to we portfolio was spot beginning early companies. it of fall

back costs Blackstone are input level. a costs For basis, on to X.X% and within rose just shipping portfolio example, year-over-year now the pre-COVID

a impact in for this economic of reshuffling an As and comes credit due does markets? of scarcity continue slowdown debt providers. the mean to of sustained you've slowdown resulting say expect What we caution in higher capital, capital heard private past, rates. us With the the to

commercial continue to As retrench, expand. credit private markets banks continued to

as bio with of markets. as deals Blackstone see to flexibility, public including compared of come a to solutions benefits confidentiality the the leverage half certainty private first in year, the Credit, and this the XXX result such market. of uncertainty that the XXX Through came managers, that as credit executed private We credit

our at has are quarter represent as the doubled more to a than to predominantly private into secured considered for last we lien equity line these We sectors historically well. BXSL deploy healthy core in of recession-resilient number deploy funnel we in with the and Looking transactions senior very capital. BXSL's deals exposure believe and first activity, sponsors look strategy, know

continue that see we believe over year. will the remainder up We activity deal to the of pick

at yield averaged this by Our quarter averaged portfolio. base yield in repaid yield XX.X%, on fair or new down yield our value boosting on primarily XX.X% driven XX%, to quarter increased investments debt at weighted higher during quarter rates. investment during on while average The from last assets sold weighted the the end, debt quarter fundings XX.X% the average

on XXX rates since our expanded approximately second last floating base rate of quarter portfolio points basis XX% year. Importantly,

to investments, ending ended respectively, and of X.XXx fund Slide Turning quarter We the X. leverage $X.X down billion with quarter. of leverage of from X.XXx X.XXx, average to last X.XXx

billion $X.X lean including cash to with positioned and a pipeline. borrowing capacity well growing into remain liquidity, also in We

documentation, as whether served of the the lead or should drive the key platform having Credit company portfolio, benefits later lender. to create We BXSL's ability to Blackstone or the but challenges. in them value ability outcomes, just on is deals like of of One and the Blackstone Black sole a participate to end of with loan lead not in front Credit the scaled face our and credit XX% life

Further, distinct $X of have insurance, offer which the Credit management network, the of June alternative $XXX Blackstone XXth, to asset trillion of over opportunity largest as we with build investment in being advantages. we can comprises billion investors under part world's an assets which manager

sector our scientists, leverage we technology valuable as data XXX force we and innovations, providing with decisions XX investment portfolio. manage example, perspectives and advisers, platform and senior employees expertise over Blackstone XXX in the make our across and insights For

scale the it investment opinions corporate key X,XXX data we over a issuers form whether in these form alternative this factor, With trends. part business the diligencing opportunity by looking or in Having opportunities largest the XXX and to has globally of Credit platform over advantage of that in at professionals globally. currently in differentiating investment Blackstone market bandwidth invest being the comes is sourcing or

leverage have also and the in over CLO credit opportunities drive in Blackstone scale over deal liquid business, led to to platform, X.X liquids Credit one in flow last billion largest credits. loan incumbent platforms, This our We $XX years. helps $XXX managing private addition new private in of our has and origination over billion for the

issuers to full Credit's deals Blackstone Credit portfolio program. are borrowers Blackstone to committed companies. over BXSL, finally, in whom our provides the quarter just with within creation a of past preexisting capital had were relationship. Additionally, BXSL value Blackstone And we've than XX% more access offered the to

we continue Blackstone results teams We a believe our differentiated to sets who apart our partner companies and add network important Credit for with broad believe with are our these platform, points value We our ability this distinction, attractive strengthens after and to returns can risk-adjusted of strong to one complements loan. make dedicated drive that portfolio investors.

which the just underlying but performance. see the numbers previously of returns, not today, have we some also discussed, You in in that credit

Only X.XX% fair of of portfolio on amortized cost the was of is market $X.XX nonaccrual. value

Also, our of income total interest with asked and currently for investments marked performance-related this the our non-peak our fee-driven high quarter. income. of interest quality of limited very X.XX% only XX debt remains at has of earnings portfolio for onetime X% XX% and are cost below amendments Just accounting

numbers you on quality those peers. our to credit We be as will in our that reflected focus measure believe against continue our

With it to that, over Jon. I will turn

Slide Thank you, let's Brad. to the to I portfolio. And turn jump X.

the As Brad see on top of because as and structure defensive interest businesses overall, capital elevate our we mentioned, burdens heavily most as we stressed seniority slows the investors. economy for the

investments are access of private to generally BXSL companies. loans by the financial support additional first loans to importantly, over and in sponsors of equity secured senior equity companies capital have So XX% other lien or are owned who firms to XX%

it's But Now average equitized often the the highly we're not value we in XX.X%. senior of portfolio capital with just structure. to that is as loan say, an

importantly, More right of senior with companies in industries. on right focused the the we're size, loans

a to to XQ durable larger, as our of continue relative EBITDA $XXX more we to million, as on businesses. orient weighted $XXX Focusing companies size, have portfolio the million average of 'XX, portfolio

strong X lower software, with investment low requirements care focuses XX% CapEx industry services and of on health professional we key better focusing our and better on means in the Slide investing over portfolio. as This neighborhoods providers where rates which for services default sectors and returns believe in over such drives exposure, companies time. account

adversity Diving into that in remain invest portfolio X. We better of Slide view. companies here's larger simple the further, belief just supports quality the approach our scale to what cycles than ones. And economic handle steadfast businesses to on that larger based smaller in

at the measured for As same of the large grown is with But this Lincoln slide than turn Senior the of returns $XXX as by per in have at relative over $XX middle deals some of XXX market less EBITDA. spread Debt over basis with Index million risk-adjusted differences. effectively points. key of leverage as rate companies notice well million Xx the EBITDA smaller as shows, companies Larger deals

we measured by adversity see compared than Larger our companies middle market better. rate market that BXSL's steadfast often that businesses on private of as Slide remain with belief fundamentals less Debt XX, we default company X/X why the Senior also a the which to is larger much that And of can default economic the companies, handle cycles less is scale credit Index. in Lincoln

private average credit portfolio EBITDA more that of stronger has average growth of market and as are larger $XX XX% weighted the profitable. $XXX And million EBITDA this yielded also you focus can to BXSL's and million, compared year-over-year companies with see, has companies a

interest dovetails into discussion coverage. this on a Now

loans shared And mentioned BDC as remember, stat managers some negative way of BDC exclude EBITDA widely excluded. sectors earnings previously, companies. types gets certain the are interest varies In listed is by but calculated it's In cases, widely. or on cases, coverage other managers a that other calls, we've

calculate revenue on all borrowed including have interest a include companies coverage, When recurring those we private EBITDA, that we loan.

our compare to of relative portfolio database give we portfolio sense quality. the a industry Next, to

So it. into dive let's

coverage portfolio to their when this to interest broader market For companies generate than BXSL, compared was the average slightly shows and which BXSL's greater XX-month X.Xx, that of the higher average the average. earnings which Xx, ratio market last is pay interest with

Now other difference We the our X.X. market the to larger, resilient less markets focus attribute that we at credit run we profitable, more our remains X%, at when and participants it's investors the Yet, which tails. the about coverage from and brings higher forward rates this more private averages also interest stability on about businesses. X.Xx hear growth to interest again versus average

BXSL ICR with a rates. an had below flow have through forward compared And so X And the evaluate Lincoln basis roughly we we tracks below an rates of basis, X, X%, than relevant which to investors to below portfolio of but roughly on ICR portfolio base the as X would the more which market of of for an one's more its base portfolio percentage BXSL's we higher LTM of broader approximately on X% ICR that using is X% it's double with database, at see XX% our exposure. can an

And a in the single to to was clear, with X% and deal that it level has would exhibited X% given transaction base low growth with a that rates, over significant X% year-over-year. of tied a high-growth equity be ICR, Xx of ICR was structured company embedded be a at was cushion

with the Now with stat XX% million. credit outlined into because private transactions below of focus that further is market less why companies I one believe the that over XX% Note for an right X, of in $XX companies dive are ICR investors. the than on let's it more once EBITDA XX% larger our

won't of And direct the investors so lending discerning Averages be tell believe performance. right. will we story

and to in larger continue businesses resilient see on through will, focus sectors, historically we results. seek to our risk tail tails we The better favorable limit and

Blackstone mentioned, capital. on protections of Brad has a investor conservative culture as Now credit for foundation a built structural

asset Blackstone almost our and note majority EBITDA or that deals synergies cost or none allow the the against syndicated structural is savings loan stripping So for protections that market. or and than to uncapped when vast co-lead all materially add-backs leads have transactions of better

we or we XX% related what with our M&A an which adjustments XX% to to portfolio constructively were regular so this SOFR provide work course XX quarter the turning to of add-on technical to amendments, had idea amendments. and scope to transitioning in or saw other activity. other We of were companies And related

on of Slide related saw or to a those represent amendment at X X portfolio capital. And X.XX% only recovery XX. I will believe our value. which We constructive and market ultimately were amendments cost discussions performance, our of we invested X.XX% support full fair to turn

covered $X.XX XX.X%, As Brad well recently yield our QX we by the distribution of approximately mentioned, current with increased at dividend NAV a earnings. to our dividend share

second for our and XXXX first shareholders. quarter speaks up distribution, made we is to deliver first over distribution we that fund's believe and XX% of ability the from quarter This XX% to the up our since our when

And Teddy. to with that, over turn I'll it

on the per Thanks, million which year-over-year. record Jon. results start net operating a XX% I'll was BXSL's In XX. with income Slide share, our second or investment was $XXX quarter, $X.XX up

up represented million were XX% higher driven less investment than total or increased interest revenues $XXX of PIK income or income, primarily Payment income. kind rates. to due Our by year-over-year in X%

share also incentive quarter, which income in impact second fees. million in of the million the repayments NII accelerated to of added In we $XX benefit net in income and of nonrecurring $X.XX $X the from of realized per form fees quarter, another the

losses net up $X.XX in income per per GAAP year share the from quarter. $XXX or unrealized $X.XX of despite net was the share, a ago million quarter in $XX million

on $X.X floating sheet This ended portfolio approximately XX% of Of a with loans $X compares just total rate Slide We at average of to investments. weighted XX.X%. of yield cost fair value debt the balance quarter Turning with billion X.X%. XX. the are billion average weighted a with of first which to outstanding

between rate provides fixed the mostly liabilities spread our continue rates earnings to and potential growth if rise. rate with additional company for low-cost The assets floating the

excess result last from earnings a of increased share dividend $XX.XX As quarter. NAV in of per the $XX.XX, to in second up quarter, strong the

which Next, XX of than in maintained view corporate average outlines diverse attractive liability ratings investment-grade credit drawn a in our to coupon bonds fixed in debt unsecured rate as and at which includes available Slide liquidity and XX% $X.X quarter the borrow. environment. X of X%, advantage a with and weighted less our of profile, ended We undrawn this cash key debt billion we rising

with us provides this flexibility and believe cushion. We significant

on While our X.XXx, Xx was Based the would within ending was of both pipeline activity, we the year. expect quarter. through remain over down target average fund quarter, from leverage last leverage balance to X.XXx X.XXx to the the of our

low or capital have to an valuable next and XX% overall at million investor the level allow only it's ATM our the under in Blackstone's to Additionally, at average the institutional the backed of $XXX years. moments within of program and with we This of end where the we X.X quarter, And of near few years believe our us of years we investors. market by lastly, maturities issued debt maturing next equity weighted debt X maturity to which large individual activity pipeline in is returns. deploy at scale strong both most capabilities, drive

the underlying higher sheet where we deploy in economy environment, areas the pox see capacity excess believe defensive elevated a on BXSL in well portfolio strong generate and our to into very In rates. risk, have rates see We tied closing, while about balance is floating healthy we built resilience market positioned higher. the continued to to given to core overemphasize to avoiding base power fundamentals portfolio of positive reset XX% earnings remain as earnings investment outlook our continued our dividend we of rate position company

is platform premier resources advantage investors' for Blackstone's sourcing, backed capital. infrastructure by protect an and built of this to providing All

ask Thank for I'll that, up open operator With questions. the to it you.

now we'll from go And Compass Instructions] to Alexander first Casey our [Operator from Point. question

and a which investors the very lot I fairly equity One, lien also exposure, investments, simple you've you the a in but two cycle. of portfolio, have are Brad, of investments -- gains have comfort percentage equity the made small first particularly the on very in this taken discussed questions. high that

those that relatively lead would accretion of NAV you sleeve investments future, But in assuming successful? additional sweet to the that what's are spot much investments? really, the equity How could for kind grow incremental

Casey. Yes, Thanks, sure.

that from it's equity grow Where made should materially sleeve today. investments, we you adding us we are we've not where we are So believe Blackstone. where strongly some across expect to value

national growth So regional into that if capital we player. a could invested Westland, them we with look being at in player the them provided capital, view a the you debt equity and expand we with from

And thought In because roll Blackstone our took on of equity similarly, we've doubled equity. the and that time drive more could over data period, and equity we we we Group side, a that products in across debt side value. the their value broader position than the short company

to participation deliver equity. going of at because in we're these we than whether you where be just capital companies. that invest We're platform, investments some if on it's to I equity So our trying investors value, trying and more add the highlight our precisioned and thesis grow it's call little a debt get look very, helping our that bit very to them through equity taking upside. or in their to to

just you historically. going important a the creation have economic value just but equity as go period, more we not our also So softer through on I to it's are think than leaning about really -- we we team lot positions, as a be

you real like leverage X.X to or What's you the to All in the portfolio? My to bringing are okay time, sweet at and the had very right. leverage between Or the giving second up hold capacity. X.XX some somewhere where Great. you at net spot and Would for maximize manageable X.X power question down earnings the you repayments is, quarter the and of for now? level ratio? raised you ratio you're around it a same capital, point the

X Thanks, to say Casey. What X.XXx. -- historically, would I we've what target Yes. so said range,

the For on last we up we're deals quarter. for is quarter, deals the is deployed XX%. the an we those first Brad's at comments, seeing increase are looking return the Xx the over about in Pipelines about in unlevered pipeline. And

deploy. also capacity at some to capacity. that provide does We we of think some ending X.XX want So

We'll next go from Citi. Cyganovich to Arren

sponsors your extent? to guess, start conversations normal to little the in seeing are pipeline, in a seeing with opportunity more, some to are get for increase to back activity bit I what you're The that those investment the

the around there, say time if advisers. would -- I of Arren, with a and amount spend bigger lot we a taking step at look back, driver the of Yes. valuation. you is --

think the but if spear from So with of you kind we advisers of time a about we tip of and they're standpoint. cover -- our sponsors, obviously deal spend a platform, lot activity the

seeing I growth think which is more probably why than others. pipeline we're

What around They've of they've bit the amount are decade. a valuation. the deals to that that They've little shelf around to is market of a been that highest say come would uncertainty bit on little is a over seen paused in financing. they been ready the because paused

of the buyers the together With valuations is and -- come are acknowledging gap time, has be quite that starting high. to sellers sponsors more have fact little between the of active, the closer capital the cost and passage bit a

adjusting valuations, their that's they're levels. they're their So why leverage adjusting

as continue seeing like privates, pipeline, greatest sponsor-to-sponsor to We'll continue activity deal the add-ons think the we so And we'll about but others. where the see is activity. uptick to we're in take

expect That's you're be aftermarket to you're in is helpful. the trading And market? the relative that regular on then value? in above you Or is this seeing opportunities fairly something book issuance, just what when the to

moment those extremely I several it It's part basis. can book. of in be that over a equity attractive is attractive I NAV we of kind have deploy growing how steady, a and expect you've the dividend a you go-forward and think occurs capital And on our stable to BDC goals, slowly X general equity know above capital to credit. you premium raise of risk-adjusted yield or to return. to major two, private deploy moments colleagues points golden we a X then -- -- to outlined heard there's in capital sustain time. want One meet

grow could opportunity have so to see the And that you we accretively.

pipeline. it to do remaining a expect we also investment basis what disciplined regard go-forward be of on I'd a our with so And to part while

comes Dodd James. Our from next Raymond from question Robert

Okay.

the you disclosed the that BDC XX% BDCs I your a something last that. because actually been couple in better is your or like First, has that question half that color has been Every just than Lincoln, I've coverage, on number, for from if got if helpful all interest quarters. number obviously, on I I'm the this recall Lake really can, can of the has gave average. over wondering

been industry got any too when what color the in single-digit that would has I've numbers But in that on industry generally from disclosed in theory you So that on than a numbers been why And report. party? is. they the give us the have my attribute appear that you range come the terms third the can meaningfully tails of higher

we investors, Robert, a to asked, that define a because appreciate it's give get you that. you inconsistency but Yes. question that The it very you to level differently. answers try of want in your questions your consistent for folks to

looking exclusions I can no start approach absolutely of at of stats loans, across types industries, major by to our previously. of you the that everything and Our no was recall exclusions portfolio. certain outlined

a enough. level proxy But isn't at just to. market to it can of looking our stats has There that compare be you

space closely or work the kind generate middle provider we the so leading index to the in in And market Lincoln credit results. with private those of

believe effectively I understand transparency. Blackstone, really asking the see folks it's trying questions what could to So exclude. you and just complete At

the data can provide We our to all results. you its make on inferences so the want market

color. appreciate that I

Second Brad, to question, and sponsor-to-sponsor be follow-ons. the likely pipeline, activity in, mentioned more you maybe versus on

anything favored the status step, spreads. is -- some right, more terms sometimes because fees in terms structured more a an is of of think add-on, are than -- new in agreement do into And read which fees most So the mix things is to might there portfolio upfront going maybe have new has economic can growth in to how even we nation shift and the the loans? you

does is color be So that And us mix any portfolio? different the to things slightly have the can economics of a you overall in change? currently, shift going it give on if

Yes.

we of work more will year, you the the to added see names as So the portfolio. say Robert, I through yes, what would so is, end

XX.X% fee to XX%. average highlighted average is loan value growing our was around which about new the in deals give yield The pipeline deal as the nicely. take -- amortize Just the to and you of XX.X%. the you pipeline about is, and some we it statistics if

what golden talking because on talk hit the in whether base this lower loan because of that leverage age when yields because about we're high about talking are multiples that exceptionally or we're this, and yields measure higher, moment or is value. credit, spreads, talking We're you is we to are private leverage of that about about. Jon So rates,

that And ones access capital. can better companies are the only

quality leverage higher ago. drive earning of with have can that assets high less where almost equity-like couple you yields are private they senior a is first as in This capital by as So returns structure. the years what being twice credit, you were moment lien in the

more you to from we're will to and So will see BXSL see excited names add-ons, investors and for an some for benefit standpoint. continue you earnings

Instructions] We'll to KBW. [Operator go next Lynch with Ryan

Nice quarter.

First kind environment. on the of a of kind question follow-up deal was I had

activity past deal the so, in of on. high. X has been the picking seeing I'm quality been advisers curious mentioned likely months activity up down, conversations more going but the the You just or have is deal deals very

transact. like that in are that high It pick curious originations as X to remain or environment? up, companies the that high expect actually just ones to it it if the are feels of a or forward expect going that does deal there only to but because as do start able quality up mean you of like they M&A kind slip quality of Or to months? fundings not of to processes? highest overall of also -- into deals sort volume pick last quality X you an M&A so and might more not may is been selective in the actually add-ons, there's really as to have the lot been subpar deals you the And have to that I'm mean they're may as feels be going those

latter. would the I say it's Ryan. Thanks,

I because you're and willing are been come to to XXx and have of not factoring cost what pay kind it example, some to holding generates seeing a in higher on the to get, growing, buying a of it's for XXx. seller it's free these was that community multiple deals so the whereas capital, of think expecting lot in of cash flow, valuation, that they a market is

turns part That's obviously, a which lower first to of of that was in enterprise a seller the the gap. type driven market is X high-quality XXXX quality by XXx seeing of that EBITDA It's indicate valuations into we're business willing business. that very XXXX. back but would something than where accept come in value, and their That's expectation, often the

for So unless -- a business debt. of they to de capital, afford XX.X% Ryan, of really on it's it's marginal hard take amount cost a minimis

So flow that's we that of an through very higher the the coming cash ones will a and that quality of driving slowness into period assets can economic quality expect It's rate what's the business. grow remain this of so in environment market. It's assets good.

Okay. That’s color. helpful

the just you any those to in or to total both those portfolio. in credit I Jon, you any broader one – that is were And as any curious, the made XX sort of portfolio really just sort curious I’m private guess, other coverage, provided from industry. cash well of, those said were from amendments? order switching interest level PIK amendments? The this in I’m there was quarter amendments only deals related this performance. in related it really to X sort – details make as I to Was equity they those I some quality sponsor you good had give of was back And comfort your or by amendments also appreciate had the quarter? just you on were gave both the

take I’m is This that. Ryan. happy Thanks, to Yes. Teddy.

we’re One improvement of you prepayment material M&A covenant XX “performance actually right, due stats, and the add-ons, to were business. SOFR Most Two that a a amendment was XX% in reiterate to that or amendments. just are came So activity. those related.” other seeing with some benign

X-quarter of our be call, received will above principal. I that pretty deferral. interest those the a on Both much this a details in that, at but recovery since was other marked get we’ve too full can’t of of news positive some The end quarter. XX% the

material nothing to point there. So to

question from Markets. RBC Capital next Kenneth from comes Our Lee

just could your spread in seeing. relatively terms activity? a I you competitive there changes? of the any given if in recent about talk Has what on Just seeing you're been you're originations attractive little bit terms wonder

It's So Ken. Brad. that. take thanks, I'll

So competitive largely the a of dynamic into on that reluctant end new on banks more underwrite market. little these to taking the very because competitive the side, you've LBOs, favorable, public remains the seen on market, have larger distribute are a bit risk the to harder time markets

market we The you use competitive time and of attractive of large scale know, lot to standpoint. of a quite That from advantage. energy focus spend, the and end is a part our where our -- market the to as remains

midsized there's market, into the all-in structure disciplined of into spreads from at more kind a of bit come that and fairly remain market, more Small, market. more same maybe documentation part capital and that despite But capital coming the time, that's competitive. little

it. helpful may. follow-up, And I one Very if there. Got then

In to over as that terms the investment term, up near up for the would around you originations? expectations pick paydowns pipeline somewhat tandem builds of expect in

Yes. Thanks.

repayments. we of fairly in So had that and view versus is was the million activity quarters as X/X of X we the a the that we previous from ground. quarter, current I $XXX quarter on X say not high really would and transactions. trend, see

we as of and we think refinancings generally, see do comments remainder to pipeline through higher the do more would lead if fruition, potential result. the to also think convert I that Brad's year, a come

Instructions] from We'll Wedel Melissa to [Operator next Morgan. go JP

could far even part of rate Obviously, so a of thinking earnings been of in the But your already was the into how about later hoping power dividends year, exceeding portfolio addressed. the us this with dividend of XQ? you're particularly remind have I you increased them lot

Melissa, Jon this Bock. is

the vehicles, tests. ensure compliance And the is distribution, with in earnings I'd it so distributing look over you're pass-through and dividend always we an start of but to these so from right? to when perspective. at think goal that And are

level the So we earnings of healthy we very dividend pay have a that to relative out. strong

into so the And level looking quite future, that conservatism we that of it's strongly feel about.

down. support say, extent down of and the to $X.XX capital $X.XX level confident outlined of this a this of very Teddy portfolio recall that is we earnings let's of currently come even dividend and activity of high and in in terms profile dividend come So given level both in cost that had offer, earnings because Brad feel rates earnings we terms and the

outlined, velocity to Brad increase. as bit a a limitation that's deal activity as repayments portfolio or And of

the in increase our too, well. power earnings see can you book So level of as

about covered get earnings I sure well confident to benefit the always because attractive and that want with -- we're you start at that So it's beginning. stated you from level an

attractive Steady, equals time. payout is stable dividend and with what attractive the premium NAV over for growing stock an

follow We there. did on increase from into XQ. tax XQ to in just excise see an So

to sort item as going we should that to up you that of regular you Or line look that we should would expect cushion? a be modeling? be a limit built course forward, Just

of think environment. would cost in come seeing I it you’re form it capital to relates of the investment the what and really as

undistributed. capital rate a So excise paid was you that tax effectively retain X%

You find that’s of an extremely cheap cost equity.

retaining retain performance. credit make the need book situations the effectively when you to you but right? to stable, you sure other equity, And where is it Now capital lost that key through a is extreme you’re in then see so retained

at remain we capital. on It that’s ROEs into look strong be of cost if book see continue can you a where are. we a earning ROE, kind attractive attractive forward redeployed given and basis, to So that’s

So you could expect likely stay. that to

We just lot. a that. add maybe Melissa, to to about talk this

We’re very position of – we’ve are very, the our look – those if the in each special. where earnings we’ve average, we’re either XX% or coverage on a a pay at last you high. those of our over had dividend. And in X X in quarters, fortunate quarters, increase And dividend

of the the So investor to mind. at our top experience we want be

quarters, it why every the to seen continue us Board. we about with of So quarter. we’ll changes talk that the you’ve why make assess XX% that’s and in That’s

to And remarks. over no call the there further turn Wang I’d Stacy closing like now for questions. are to

for and up call wraps for all our That look you today. Thank to speaking morning, this you joining us we next you. quarter. Thank forward to