AINV - Earnings call transcript Q3 2022 | MidCap Financial Investment Corporation

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Operator

Good afternoon and welcome to the Apollo Investment Corporation's Earnings Conference Call for period ended December 31, 2021. At this time, all participants have been placed in a listen-only mode. The call will be open for question-and-answer session following the speakers' prepared remarks. [Operator Instructions] I will now turn the call over to Elizabeth Besen, Investor Relations Manager for the Apollo Investment Corporation. Please go ahead.

Elizabeth Besen

thank for and us operator you, you joining everyone today. Thank

Chief call is any to audio and Widra, this regarding today's and in call the Investment broadcast webcast Officer; conference is replay Hunt, webcast press disclosure like earnings release Information are call strictly call Harbor that call information. on Corporation our in to like Please in are the that about Chief available may advise Officer; Officer. release. everyone to are form prohibited. attention Greg being customary Chief also Speaking Investment include and and customary the Safe Today's unauthorized Howard Executive statements. forward-looking press our property of I'd your that forward-looking today's Apollo I'd any President Tanner and note recorded. Financial they Powell, of

affect like Executive supplemental our our the our I'd to to I'd everyone Widra. www.apolloic.com. performance. to make. required update that You statements this also unless and by posted that financial well over At our for SEC as should a refer as or of filings, obtain our Howard to law. turn call Chief remind adversely our risks time, forward-looking portfolio, recent filings visit like SEC undertake website please copies our projections to which business we do contains the financial at that not on package any about with statements apply the forward-looking information most To may We to website, Officer, information the we company's

Howard Widra

overview provide the my for business joining some remarks quarter you and Good Elizabeth. with today. us everybody then Thanks, I'll and additional highlights. we'll thank begin of an afternoon

in an market on results remarks, environment, my review review detail. provide the call quality, for activity our We'll discuss questions. the for our open credit Greg quarter financial and greater then then the investment will update will Following Tanner

well position a first-lien have loans several less granular the rate corporate last in we diversified invested sizes. floating true portfolio with Over built years, of industries cyclical

with co-invest in by to deals small MidCap sizes managed ability funds participate sheet. relatively while to hold allows balance maintaining other on entities larger and our including Our Apollo AIB

to benefited quarter we middle provides billion approximately quarter period investments. the funnel a us investment be net in the market know today, on any from in prepayment share. After and commitments access you Results wide theme strong The to for December selective allows MidCap overall of income commitments of $X.X is opportunities, very and in attractive for quarter find the in the close per business, of direct platform Apollo's $X.XX reported was the it's hub target the the closing of leverage $X.XX direct $XX.X share. operating lender income AIB our and net during middle par and new XXXX. period origination the market share MidCap with reflect The asset range. billion net in active We with ended $XX.XX origination platform value up per during As marketplace. per with average with MidCap leverage which of

improve, earning had core December of continues our benefit from reflected will Merx quarter, those also Results the strategies. net portfolio, gains lending monetization the corporate and lending for portfolio into and corporate call. which Our to during non-earning the the during proceeds redeploying under later discuss Tanner assets

more assets generated in we and coming executing quarters. We focused progress have consistently non-core significant some are the cash on from our

million which value. which from which were one approximately During positions, non-earning, above two received the included of our without December from fair from $X repayments quarter, million one of position $X was and million $X in million of three investment, NAV any we non-core reduction $XX

of March three shipping in XX proceeds approximately Post also at quarter-end, the additional one our Product will the Dynamic December cash generating which position. investments of second-lien We of NAV ships, Tankers sale be our quarter. received in the repayment in $XX closed $XX an million million on

reporting into for we of Dynamic represented visibility progress. additional to and have Pro total continued the AINV's our monetization We assets our the portfolio. from coming sale, non-core non-core portfolio Forma only forward look in X% investment quarters

Secondly, the represented December. corporate only it end lending the X% portfolio has of at of

we Lastly, NAV and per which to period the stock accretive repurchased income discount accretive during of to net share. was moderately share NAV to meaningful per

$XX completed us business hope opportunities our existing shareholders. other when occur, to board they authorization, not this value highlights, create our we meaningful repurchase repurchase million to discount increased by to to our authorization on nearly share has our do at NAV Moving but do for a authorization obviously allow having share will our

our distribution. to Turning

declared base of a to a share. the April share has as distribution per of of are the XX payable board distributions supplemental March $X.XX and on XXXX Both shareholders record per distribution For quarter, of XXXX. X $X.XX

that we for previously $X.XX $X.XX at a declared distribution be of would last dividends As the reminder, supplemental the the indicated, dividends today being and for the the maintained distribution. are base

to with our objectives of the our visibility greater provide One is respect distribution. for to shareholders

prior-quarter's next equivalent we or to $X.XX, up which of investment $X.XX that a and supplemental per plus plus expect combined base income the total, share the declare for the next per declare in of So quarter, in we that a net a quarters, to December per $X.XX two dividend means is supplemental share to supplemental quarter. NII intend for amount share. base an $X.XX dividend dividend the dividend will equal a such base the This

interest over to the activity. our have I'll the in impact portfolio expect market and environment of turn upside investment Tanner our to the of We greater to With quarters regarding timing our coming call that the the clarity discuss earnings. the rates on and embedded in

Tanner Powell

earnings Reserve. [ph] institutions firms equity active the become raise more were Federal in significant The financial to Howard. have more supply or being by of non-bank pandemic, an banks. a even expansion, inflationary variants, and this you, corporate of economic Private Thank COVID-XX of source important extremely mix and during market business environment ongoing continue chain balanced broader in issues, dry valuations our posture increased to by resulting powder. more are pressures, Specific is emergence XXXX good capital federal growth hawkish and financing, the corporate

As AINV. this MidCap to demand like deployed, dry opportunities expected investment and for financing for is lenders in result the powder is considerable

Gross to commitments first base, commitment with Moving of and were AINV's XX% with average excluding and lien corporate commitments XX% to for in were million. investment repayments activity, companies X% new of XX% and X.Xx weighted gross $XXX for the million a quarter made for a resulting the our million, totaled lending revolvers. totaled franchise $XXX fundings, life net leverage co-investment loans order. XXX an XX commitments average revolvers. pursuant new points, finance. repayments across $XX.X totaled excluding spread the weighted lending, Elevator were of basis Sales our all new sciences new $XXX million strong leverage asset fundings XX% strategy, quarter. quarter and net average Consistent a the for of offset repayments

for million. mentioned, million of $XX million repayments totaled of for Howard included net non-core $XX aggregate and liens assets. corporate $XX million second in As quarter and repayments funding $XX revolvers the Net were

Merx our period. navigated Regarding believe challenging successfully leasing we has portfolio aircraft company, this

the million, are X.X% increased fair improvements. quarter by of leasing fundamentals aircraft or in as value $X.X minor During the AINV's showing December investment Merx

in end and had value our Turning with different representing the assets of a ended of representing assets of fair XXX the companies industries. across to billion X%. XX% the portfolio portfolio, at core the December XX overall AINV $X.XX portfolio, investment quarter We non-core

average the the At weighted XXX lien the First spread on of end lending assets corporate December, represented portfolio was points. lending XX% portfolio. the corporate of basis

of cost inflation impact We and towards impacted its are within closely supply impact issues. We portfolio inflation portfolio likely that to less and generally weighted chain the by are believe on our monitoring profitability. be our is industries

in We metrics. continue improvement our to see credit

we to our last The attachment second our X.Xx quarter. to As The X.Xx of down weighted declined X.XXx X.Xx average from leverage portfolio net lien corporate quarter. from average, reduce down declined point to last lending exposure weighted positions.

of represented the quarter. indication investments investment on sequential the weighted quarter. improved portfolio the the who end investments of or in during financial $XX to during deeper to quarter. the the the is Xx up that, but total attachment co-investment non-accrual which December decline pursuant The No portfolio totaled attachment or down status Investments turn a of non-accrual of brands interest lending from to Greg was X.X% At were of corporate are placed call fair on I'll at from $XX value the clear quarter. of quarter. compared performance corporate for classified at to The to over the order will much lending of quarter-over-quarter now With have discuss XX% point average the senior, X.X% points. seniority our low our coverage as million, attributable the portfolio restructuring our Our million last status X.Xx end quarter. last made the loans,

Greg Hunt

was last good leverage of for net of September average million Dividend distribution for AINV's million, the the higher corporate and was end X.XXx income, the expense XXX earnings XXX we the was a up spread up The million, increase incentive everyone. slightly and our Pre-payment interest net afternoon portfolio. income $X.X quarter cash income a weighted $XXX,XXX cost quarter. shipping and dividends. was received reflects partially Tanner for capital the December loss as the investment X.XXx were strategy lending and yield the for investments, The million an with average for one $X.X for points $X.XX. income income The on well quarter-over-quarter, operations. Total disclose over quarter. a interest compared was larger fee leverage million. decrease from to weighted Net $XXX,XXX prepayment past $XX was to as the fee for the as $XXX,XXX in income portfolio at last gain attributable Page was September $XX.X by compared The in of a of $X as supplement reflecting per our basis X.X% lending $X.X was for the quarter recorded quarter quarter. return the quarter. December Thanks, period. December, in of quarter. our share quarter was the million higher December the the income up increase quarters. for quarter-over-quarter. up X.XXx the to during investment at interest Fee to XX million offset X.X% Expenses end investment Net five the to average portfolio $X.X lower corporate was MC average unchanged income compared the statement the portfolio. growth at up in On the Beginning basis income of $XXX,XXX points included which We by quarter from quarter, quarter, of

closed NAV from gain driven net $X.X sale of $X.XX relative per at was from net a January. the that income. current loss $X.X $X.XX per of $XX.XX the gain a the million legacy and $X.XX investment a or impact distribution had of of a of increase in quarter, offset corporate or per on share $X.XX The During and per had our $X.XX end loss by Non-core quarter-over-quarter. net million a per $X.XX was primarily December partially portfolio, lending $X.XX to the net to share attributable a share, accretive portfolio the three million assets on stock share. loss increase buybacks to by ships the $X.XX share The shipping losses our investments. shipping relates Merx or share. per $X.X on had

Moving to stock buybacks.

an the for of and AINV available additional total cost had $XX.XX end approximately a including an purchased quarter, cost Leaving with total us Since an at of XX,XXX approximately During for the shares of the previous yesterday under $XX.X purchased average commissions authorization. of quarter, million. of $X.X through million AINV at $XX.XX price average $XXX,XXX. price shares the XXX,XXX

increased open As by This questions. amount Howard our increases future the stock the concludes million, for $XX to our mentioned, just $XX remarks, repurchase which authorization over and call has board our available repurchases please million. of prepared share

Operator

we'll go question first from take Please And Joseph Instructions] ahead. Jefferies. [Operator Kyle our with

Your line is open.

Kyle Joseph

for taking Thanks guys. my Hey, questions. good afternoon,

if What of debt percentage don't floors those with what's are you has time? Fed. rates portfolio to on where versus the refresh mind, at Just us going given floors your this and

Howard Widra

for higher we some or on see entirely against done X%. something floors everything of we a Thanks slightly will the is grabbing the a on that then number, side as instances And the market, at but Kyle. will sciences X% you sometimes syndicated has almost much in life Elizabeth have bps. bumping X% the at specialty up corporate be XX% surprise verticals, not is we've kind Yes, we side of lower a in the that hey, specific it's company where XX bit as than range see little see of almost question. the the floors,

So, but few. that's very, very

the have So about X% or had me she no and have for at and floor now, higher, XX% data all. only X%

Kyle Joseph

it's it, helpful. very Got

Howard Widra

ahead. Sorry, Kyle. Go

Kyle Joseph

in be whether No And going the terms or or in portfolio credit your then sound. you've problem. it of obviously, Tanner, companies us one your just any been just terms inflation, in ask follow-up side, to very seen of terms what of materials for seeing growth? update But sort can I And was wage the they're margins you in of impacts performance also raw probably give side? terms has of EBITDA an on

Tanner Powell

as we it side, revenue is. to you underlying Yes, to, strip like-for-like positive, growth, what We it companies that absolutely. extent getting the quarter supply that is the to dynamic, try not chain highly revenue as do that and it, the pronounced from just but as or seeing grow, on for underlying the alluded on first this track question strongly not It's basis, you're standpoint. And a which and out everywhere. at. wage acquisitive. do underlying how is Be a issuer And EBITDA it's we're still of just belaboring EBITDA are did a

given that to credit the that withstanding, before time, coming we're materially. performance and say change they of months the we over type do, believed not these we nothing our and submit would believe I'd such to these your of that but loss amount have creating certain we're are pressures companies these just a not, underwriting where less our fact of or where top cost the experience continue whether structure, expect ease will We about, can companies, to pressure as that ultimate creating

Kyle Joseph

for lot helpful. a questions. very Thanks it, my Got answering

Operator

Capital question Markets. our ahead. RBC go Kenneth from Please We'll take next Lee with

Your line is open.

Kenneth Lee

on into for could taking Hi, be what visibility the from just there? the wondering up you portfolio non-core if I'm that thanks question. my have could about monetizations over you perhaps and the elaborate Thanks. driving near-term additional activity potential talk

Howard Widra

the processes Yes, a sale we're Basically, of sure. sort on those meaningful couple more positions. on focusing of

least on of those future. And say have of we hope the one to those so of at near sort one something in to

So separately, are that's, other cash of positions. generating and off then we a few

of the we it to cash NAV cash. notably, produce expect the producing quite price Glacier despite go cash. is this the to of most a Now like, bit may like not quarter, mean, not coming of that down, oil And may performance. continue I and the in, because

off for generate upside there So strategically, and be cash, can books, towards more generator. cash MC then transaction and there's But now is has mean, for the could clearly positive transaction we're a the cash generated but an ability is historically basis that made more I the some cash but DPT go or company there. that earnings,

So all combined comes it is those where of from. have

to out of in some MC Spotted and the Hawk significant get basically, near future. those the on but So, is focus cash

Kenneth Lee

share what last follow-up, activity wondering especially if us this Wondering Got if you may. year? year, potential saw helpful. could around I you thoughts your originations with you, I'm Thanks. comparison in very to one

Howard Widra

doesn't then, versus of probably importantly share broadly banks go Yes, activity I continually there's we to a private had of think the lot of as both increase syndicated market and of the mean, trend I maybe the expect year equity powder, That that two peers. powder, dry credit record the think of lot still obviously did of things, dry was a up. market, and origination, And a we activity as our lot continue. result, private a

bigger, would run origination pie expect be the it as the to the of than if quarter, for So of fourth right assume is lower getting we as think which was I the at volumes assumption, sort but the rate is you least full-year. good

falls of to continues who people larger and be of size ability Next of speak pockets and for which year, advantage to them. capital to have multiple Apollo the category one there commitments of a that have into the

like, regards, there. But progress you on important. continue that. in obviously race we it's make arms to And on that's an keep some to So got working

through frankly, look carryover the you that's good end the from year. if good, at origination as of rate run is strong, is last some and of first five it's But the year weeks So, activity this that.

this look reasonably to what the three origination corroborate feel So, to what conservative sort months close of origination have pipeline I next estimate. of you'd year be said. to full-year or But full-year I forward our two just be was, should our like would to

Greg Hunt

might and quickly Lion's that sponsor our as we add called as set remarks zip that I likely the flow business, hits you'll the always others for verticals, be continue that's in code opportunity ABL. our part our out year as to perspective our well, AINV for again, originations us and too will to Ken, good such share prepared the yield other And from we sciences, know from well. peers and and as life add our and in of target in of market And all the this a nice the a

Kenneth Lee

Great, much. very very you helpful. Thank

Operator

We'll Please Alexander with Casey go ahead. Compass take from question Point. our next

is open. line Your

Casey Alexander

Yes, of XX% around think to dividend fund for be of and retain NAV said time the of be between of future? at in of could could point day previous rainy losses to credit just for some when a quarters or XX% put that you good the growth afternoon. to I'm somewhere BDCs there may sort going some for the for income NII, and that dividend is away many the forward. you Well, next a quarter's consider setting the first variable to soup I applaud essentially the at going order structure, wondering, you dish do going that like all, board

Howard Widra

than is a mean penny, Yes, I right. less XX%

on to will what very, changes, something, a it's provide too. capability, now obviously we rate believe I question, going impact very to we which think great on be will given interest we're able lowering, visibility have, there's good be earnings So, core we are that very focus into our I to is the ex-these assets, floors think trying and focused some

like think to be dividend a we earnings going that's our thought I have become this think it's variable expect predictable which a and - at dividend So transition. we the of be power the clear it base, said, below slightly forward, on sort we're the think once concentration visibility real core pre-COVID. reason is we the includes set going based in the point, transition be have And it very but you will to as picture, a been said, below provide a guess is, keep where which would you at that the let's process more And the what earnings then Merx just core you that process that also be. growing to that still process earning as again, now for well. And right it's has lowering in it's and

Casey Alexander

you. Thank great. Okay,

Howard Widra

Does that make sense?

Casey Alexander

definitely. the the welcome over and when aggressive I that want X.X also you the at think repurchase Yes, levered program. of program, your to nature share times automatically increases shareholders ratio. Again, are you but share about repurchase ask I leverage repurchase shares

in target to ratio leverage shares you the top proceeds towards share share you're thinking in about or of curious time, do because just down it, the how going about about repurchase it some raising you range? is of equity, repurchase you as using push how without you program terms up sell think repurchase that new think to non-core your So I'm at point from Are the program? non-core

Howard Widra

XXX we quarter, it we like Well, neutral the new and million way net think did origination I this about had plus think we of is growth.

that some this just right. of So origination, is

is better like at on a the loan. return $X.XX, new it's So is than NAV investment the this

get hand, off permanent, does doesn't and and other paid the stuff, On right, shrink it's roll. it it

it. So pretty us an using it return it we're to it's think asked do higher no basically think investment, really think a with be fee accretive. is that I we're positive non-core think how don't I But we a it, and it like, no is credit shareholders. it, against you has loan we for like, if about like, the money, than risk about about thinking It's

have your be things, repositioning is, the package So full you that the higher while have that to everything, the it to definitely you're the right to able higher leverage consider to get leverage, you right in but make of higher premium, especially choice. you're

Casey Alexander

will I later. back in queue, okay, perhaps come Right, the step great. Thank back you. and

Operator

We'll from go question Please with Tjaden take Matt our James. ahead. next Raymond

Your line is open.

Matt Tjaden

everyone, Hey, afternoon my questions. taking appreciate you and

one on the First me for dividend line. income

little a today? in from last noise Howard, MC about rate million expect that of return think there could item So from no, a hold the that I run with line $X quarter, said you going MC. we Does ahead. still there's capital

Howard Widra

generates those I I and cash. of types it Yes, returns mean think

But depends to sort but of it's a capital or income return valuation expect going of be we think if basis. return down, income, So on effectively - going know if that it going are is either the is whether the got something would produce cash, income you on you that we valuation, assets you don't you're type to the off of it's if taking really on right capital. it to like to

to ship average the last effectively basis, right is it to we generate rate its quarter. But So that think quarters. a going, sold one over is that run on income on yes return about way

the rates. based on sort some in greater And valuation change caused would so that of than be it shipping

Matt Tjaden

one dispose like healthy, sense. does that more is makes to timeline does speed for me But oil can noncore it, and activities and in and Got pretty recent think maybe Hawk? gas the pivoting the so Spotted in you you a up it Glacier markets, shipping Maybe oil at book sounds the strength the next which maybe gas.

Howard Widra

currently now. coming capabilities exploration sort that of - a, up, an there's it's been That number of the of oil have interested has on interested we process that it speeded is we're Hawk. it a I it Yes, well, more a ground. more much have having out of yes sort Spotted and think mean, focused always who I play, to in definitely as parties a opposed

are to range. up have been more has wells, bit But valuation because of putting a is from that money actually reopen cash is it's some more a So sort basically invested of more definitely broader Glacier there's we which we're people and benefiting interesting, assets. from basis. a interest, little always

was of the if know don't to since out and produce like, of I down up in cash million in all. only But $X then. million there Glacier. the Because So oil clear increase effectively a it And market realize it's Glacier, continuing And in go value we remarks. at in in gone has $X is well.

So we one, producing we do pretty think that time. buyers also that, we're with and cash there's more out likely but comfortable to there, the to real look be will it's

Matt Tjaden

Fair Got it. enough.

Howard Widra

[Indiscernible].

Matt Tjaden

Got it. Last maybe on question. one me, following-up for Casey's

kind were that. something on you get like of repurchases, growth are visibility, repurchases maybe understand, down the share a or no like net into if So slowing perspective to from

you Given of your leverage the sit above where midpoint range.

a got you've the to pace more net you slow into position, expect of growth would If repurchases down? share

Howard Widra

holding I this pretty likely bit. down more it's to monetization, think up, We goes growing I I I such Yes, then it this even to mean, you - would expect net we this from same if level would at here. I if were saying now, the that's we're little you're a our stock a the meaningfully, slow is leverage price, you answer. down so if we significant but If is a Yes, - quarter. growth, in active think got there's this quarter expect mean, yes. leverage mean, pick supposed when

Matt Tjaden

I it it. me. Got appreciate time. for the That's

Operator

question take with ahead. go from We'll KBW. Lynch Please Ryan next our

open. is line Your

Ryan Lynch

you go and tanker? shipping the all closing this then Can you or you're the didn't quite I maybe guys your a relating March had it both. in down $XX of like I about afternoon. thought gains product the over the good of loss to $XX three guys million looks talked ships, comments you Hey, It way. heard and But million unrealized follow quarter, dynamic about write I quarter.

you I have sure the just can that. want I all recap So all details, correct? make to

Howard Widra

to. Yes, I'm having Ryan. the question, for Thanks

we quarter. had monetized sales the the were in dynamic the those And ships within prime tanker quarter. So our this of investment we were end three - of as four last negotiated of

of So the write down, those monetization reflected the positions.

And the very million, on conditions And $XX as ship then been looking return was of well. normal monetize so some and subject received focused to which capital in has quarter. this closing closing to largely the gain not process we're a particular the today, port and

Ryan Lynch

as return income so Okay, just million as $XX back Will a coming it monetization from cash impact mentioned, just. statement, that's capital? your No record the the correct? be in on that you

Howard Widra

Correct.

Ryan Lynch

Thanks the for mentioned the the COVID increase sort of think you on that. the drove clarification specifically Merx the regarding you into And got downturn. it quarter this of then, of What of worst valuation kind Merx? a in

Howard Widra

sure. Yes,

you As XX but can And negatives. it's probably imagine, a more and takes, there's puts planes. than normal margin, positive portfolio across the on

the other those talked exclusive AINV stretching about sheet. for this respect length, we COVID that our without challenges get is as balance dynamic we servicing As particular have servicer And And get Apollo the at opportunities, for we through work those the in driver that serve revenues which capital our to the assets. fact With of benefit at Ryan. respect we've continue with related of to the we that underlying pools as to fees. less we another the quarter then importantly,

the that, of away of myself to, some powered some to by our saw that was capital benefiting this invest and that and so continue AINV that gain And particular the servicing we to we as dynamic alluded on owing augmented stabilization revenue. quarter from

Ryan Lynch

appreciate afternoon. Okay, time this understood. I the

Operator

Please ahead. with take question Wedel [Operator from JPMorgan. Melissa our We'll next Instructions]. go

is open. line Your

Melissa Wedel

Despite something stability you. market. yield afternoon. was touch to few questions. I quite persist drivers my the of the Good you the year? in taking go last investments. the that could this over spread on some I It's for through you wanted hoping compression can on been you of stable, debt Thank quite if that think quarters. kind over resilient and that's Thank

Greg Hunt

said of before, stable origination this been this there billion of like, it's because we've our just Yes, and $X.X MidCap was like at quarter.

And yield hit so components, credit also assets the that which right our the like here we is fit the profile. but choosing criteria, that are that

pipeline, leverage we're but What you Tanner But because much, of necessarily of have the compression, asset the as select. because And all so, aren't loans, compression said, breadth assets seen the including, all that in across originate yield Xx able business. sort classes. fits, if would certainly of of of there's that just to the as more we more bespoke yield had some

So pool of everything the seat, the AINV selectivity of stability the is sort the the available. of versus that's result of

Howard Widra

year-end. the with the at emphasizing, you do of of done but get to often trying risk deals And over dynamics before see people

wouldn't sometimes don't, of widening, in I on necessarily do pricing I just I a into market, lenders power gave QX. deals of we're the some spread to margins, too the into much benefit surfeit helped Now, read from sheer what augment the to wouldn't little But that able to read or but a perspective that it in give were a and spread it. bit that

Melissa Wedel

you're So, when as the of comes use, a Thank of the of it companies that follow-up credit the subsidize you. sort sort to strength given right to to spread to environment new that profiles willing now. something investments? that, Is benign of credit the

Greg Hunt

the question. don't I know I if understand

make do I you what - sure Just mean?

Melissa Wedel

tailwind might? wondering environment, than friendly. little quite down a could if on as of especially that that make I'm are for Sure. could credit pressures. more sort companies, It a otherwise with willing losses terms guess spreads to Does macro you from To I performance for is supportive continued solid despite bit companies. to lower outlook portfolio you the be dip your benign, recent the inflationary borrowers speak credit to extent

Greg Hunt

of We we again, mean, - in at - want level that of a in target ourselves first a I we certain think, I the there's we can have our leverage mean, yields, sort different certain do our our of shareholders like I we feel point. question No, where to return. deliver But we keeping - it's leverage. are a while all, these

issue So, for unless high. become risk the one the assets there if we our we was environment but of of but not at, many those that otherwise doing the macro as Because dip from we us deals be, too us, things to thought, don't important change, like as our change, - it's big multiple an those assets, if as of measures do not available. of have choosing we helps, yield down, right opposed bigger like, like, something so was want us, - don't or leverage We doesn't not time-to-time, at Obviously, as deals think thought allow because now like diversity many is holds. I to we'd the unless we actually for of size, we're might we're the as to point. and to whole way having

are to whether or these not, five, won't under pressures mean, has across ultimately year We're board. And like to macro So has obviously the are benign. - on always like frankly, we there benign six pressures. be underwriting it macro some it's - try loans. environment, the is I withstand It it companies

environment impact don't what So, today. where macro our least the know choices, I at we are

Melissa Wedel

Appreciate that. Thank so you much.

Operator

our take We'll Please Securities. Wells ahead. with next go from question Fargo Finian O'Shea

Your open. line is

FinianO'Shea

newer Apollo's non-traded platform broader and good you everyone, with Hi, interplay and the now? touch running with the on up BDC afternoon. Can or us remind

Howard Widra

relationship Its non-traded is the different that sponsors. basically a of through, deals larger focus. has larger originated originated with are Sure, through sort like BDC a strategy

do expect a to loan. to assets to strategy. strategy of assets a that leverage their views portfolio the that's in of sort this in fit They portfolio in So XX% do AINV with expect have XX% like they the that part not quarter of that AINV core range

we not middle do asset leverage loans. So end other that will we the Those higher deals market the though, class be of do. in in the

of $XX there it, if around, this part that including of And million $XX where in are of $XXX Apollo you of million, vehicles are plenty BDC. take companies underwrites. effectively. Those So There's is non-traded taking say go to there's of lots will. EBITDA million at loan lots

also sort the the complementary capabilities market. when in I a just deals it we've market, larger used middle to lot we, non-traded our very BDC end So the the as to of it's And for us market approach to overall. Apollo, gives Apollo's underwrite the overall then obviously, higher them. at of more the And say because

it closing we've AINV deals this are both now. that, some So and where seen ADS falls. In that's like quarter where in. first And bigger in

Finian O'Shea

bulk of large does the Sure, about a are with asset million, just too MidCap million have of that's or XX% it's that $XX market it, And $XX but sort are for it, actually, a that so assets issuers EBITDA. recap, XX% much to very I of core of then you, helpful. right? right, overlap their And our

Howard Widra

large, broadly either right. or syndicated Well,

XX% And that have like, says they lending. so market and when something I say, to XX% middle

as So but be of - like will right and fluctuate, more that quarter, that sort as directionally origination, will a more I and grows. it percentage said, as the large market obviously, build as they it portfolio, their their has

the doing XX% XX% originated. that expect their doing syndicated. not and to We're middle to larger in not and well. are we're have, market of corporate larger is anymore syndicated And broadly in they assets loans. And XX% XX% as XX% in the to So loans broadly obviously, rest

Finian O'Shea

helpful Thank well. for Very That's you. all me.

Operator

are closing further for speakers time. remarks. to questions continued no line back this at program there the And turn in the any or I'll our

Howard Widra

behalf Thank you us you Thanks with a to reach Have for day. and and questions. feel you call for if out everybody and today's on team. of good other watching your your have thank questions time all any for free

Operator

This does you now for your you Thank program. conclude may And today's disconnect. participation.

MidCap Financial Investment (MFIC) 4 Feb 222022 Q3 Earnings call transcript