MFIC - Earnings call 4 2023 | MidCap Financial Investment Corporation

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Operator

Good morning, and welcome to the earnings conference call for the period ended December 31, 2023, for MidCap Financial Investment Corporation. [Operator Instructions] I will now turn the call over to Elizabeth Besen, Investor Relations Manager for MidCap Financial Investment Corporation. Please go ahead.

Elizabeth Besen

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

Speaking on today's call are Tanner Powell, Chief Executive Officer; Ted McNulty, President; and Greg Hunt, Chief Financial Officer; Howard Widra, Executive Chairman as well as additional members of the management team are on the call and available for the Q&A portion of today's call. everyone call advise being webcast to recorded. like that and today's are I'd they of form the Corporation note are Please that property any broadcast prohibited. to unauthorized MidCap in strictly any is that Investment Financial about press our audio available release. of call this Information is the in replay in like disclosure close safe to regarding release also attention to press I'd customary forward-looking the your harbor our information. may Today's conference statements. call include forward-looking and webcast

statements adversely SEC remind to business post or required the our everyone for a most that undertake To I'd with any may our risks and apply law. please at refer recent of not website our should www.midcapfinancialic.com. we the obtain You or we forward-looking statements our www.sec.gov posted copies projections that unless SEC's website to filings, that do make. to our like affect forward-looking filings We SEC update at by also use supplemental performance. will financial portfolio as our as the on Investment Financial or Chief Financial well the the either the which we today's about information will over Corporation turn MFIC like this Throughout Powell, lender at website, time, contains information to Maryland. MidCap BDC, I'd to the to MidCap package refer Tanner company's call, financial call to Executive headquartered and as Officer. refer we in MFIC's to to At

Tanner Powell

investment also credit results Ted investment will update today's begin environment. the portfolio today's I'll cover and our for our call the call. Elizabeth, summary quality. provide you, activity joining Thank a of thank of an then you, our everyone, and perspective on will with and current provide on

recent discuss transactions. detail, will review Greg our Lastly, greater results in financing and also we'll our financial

$X.XX, year, market reported to by for of the performance well quarter an from share will an highlighted income, EPS prepayment as ROE stable questions. in up or annualized results net call return as $X.XX the December strong an in increase quality cap value, income increase to was Yesterday, the on for Results interest equity GAAP net floating was per strong of gain We off includes $X.XX, of quarter portfolio. in recurring increase up stable quarter reflect the investment quarter, close, of the a open portfolio net $X.XX asset we income which our last corresponds credit after income. quarter, for December Net December for our the last which portfolio. derisking investment and to quarter strong then share, credit from rate from XX.X%. continued $X.XX on an reflecting a per predominantly the portfolio the

the believe shareholders. corresponded with merits Our and our of GAAP manager annualized results the of of earnings incentives fee for aligns the to the XX.X%. ROE our our We investment these an which quarter strategy to structure, our demonstrate interest

lending corporate that value or lending senior of XX% of No were DDCs fair has corporate believe a basis. most was one perform financial portfolio our investments on XX% which continue is who to the have with as XX% risk and sponsors leasing We well portfolio and and All of Merx, know largely we of borrowing improve underlying constructed to as relationships. At even in key metrics of or lending slowdown. also our either of exposure. portfolio, borrowers during by placed corporate a We we has quality We lending of portfolio our point nonaccrual well financial during X.Xx. as of portfolios has MidCap our our our feel Financial by have costs. lien corporate evidenced aircraft the were other of profile corporate portfolio total credit backed the a second lien handle portfolio the attachment on improved our lending corporate low the first exposure represented good one about the covenants reducing MFIC December, status. will our believe as among have end our company, able health quarter. been and by we lending XX% Overall, well higher unchanged portfolio potential whom long-standing economic more

impacts not significant rate weakness. seen for and any have credit of said, signs we the longer closely portfolio mindful monitoring environment. We of are That our higher potential of

$X.XX As or share prior on the which earnings XX, the NAV above to was the portfolio. an increase of per MFIC's net per asset quarter, reflects X.X% net and XXXX, December operating share $XX.XX, gain compared dividend a of

enhancing on to balance our focus sheet. of We also the right side continue

hiking on we and quarter, discuss unsecured the These current cycling maturity end. credit a December about will debt like had some an in a concerns fueled issued the to would to on environment. MFIC's perspective rallied a rate which recession, signaling during improved come detail. transaction closed The During Reserve in the greater I diminishing we markets by inflation and also MFIC's Federal debt, quarter, the provide transactions first ladder. now slowdown Greg CLO

to likely reprice in contributed we activity fill make demand in into capital of exit in are equity seeing aligned which rates, primarily Buyers pipeline the becoming order which more sponsors Sponsors progressed, market. deal a a on stable MidCap, in a months. advantage or sellers needs for ahead, in seeking powder, At in private spread banks.Looking will imbalance That to visibility the dynamic lenders better solutions to we given void liabilities. dry investors. focused increasing return private credit loans, compression. and see existing on market and this are financing activity to to significant be and/or rebound deployed and to by backdrop, we private more in for saw a distribution pickup middle in combined said, private the assets the an supply pickup syndicated continue the of Apollo see to valuation. left with XXXX, noticeable recent activity, believe we pressure are refinance As We taking we sponsor quarter a borrowers resulting increase saw in loan market

long compete with Financial offers with MFIC includes record, years of billion As investment all market opportunities $XXX you significant the on which track market is since on experienced spans MidCap Apollo's most very large lending closing is we approximately middle industries, and company syndicated we a competitive a information Financial lending track across market. market the origination the makes broadly a market core not and middle provides record financial with advantage. core either the set XXXX. and know, squarely us cycles companies MidCap XX market. believe across or to commitments In lenders middle focused market the attractive has believe one This of informed MidCap data and bucket. Financial, middle affiliation middle of short, in directly high-yield the of does

let's turn the Next, to dividend.

to based as and our of approach XXXX. $X.XX A while payable record Our NAV Directors per quarter yield XX, also with X.X% earnings dividend to stability annualized per of XXXX, represents NAV of March attractive as seeks current on some dividend to shareholders approximately To end, with $X.XX retaining December dividend of our for share an yield provide of share, on XX. Board shareholders prior dividend March XX, that consistent growth. an of a declared

covered by be dividend continues income. net to investment Our well

to net in At for the which net NAV we X.X% year, in outpaced full positioned retain well year. investment contributed to earnings, generate income current the increase nearly we rates, dividend this of the For share per chose dividend. investment to as are by income base XX% excess

well generated prevailing we rate returns solid looking will continue shareholders given environment. to positioned our deliver In policy, ahead. summary, and we the to We are to attractive interest dividend in continue XXXX, evaluate believe our for returns we

enter XXXX, that transaction strategic we announced we the last about As quarter. are excited we

approvals merge and conditions. and into and merger with to shareholder Inc., in Apollo by or Tactical both Senior it entered announced or AIF and listed affiliate under AIF, Income managed an customary into pursuant reminder, registered MFIC, Fund, closing of a the will AST, Floating Fund agreements Act Company MFIC AIF which are XXXX As to other closed-end and Investment Inc. Apollo that November, funds [indiscernible]. AFT subject Rate AST

registration preliminary statement transaction. filed connection the have in joint and We statement a proxy with

detailed not the call. today's During solicitation will to commence declared we more we to what related dialogue approvals we'll able be this the that shareholder and to at requisite understand on extremely turn we that effective, the answer Ted. In we meantime, please can I a registration proxy mergers to engage questions seek proposed will will in call over in merger happy be to any are limited the period, a process for discuss. time. With Once the that,

Ted McNulty

Tanner. Good activity. you, with investment Beginning everyone. Thank morning,

market pipeline MidCap investment the lender a MFIC investing direct $X.X XXX active the billion by of Acquisition sourced MidCap with in December to U.S. new lending Financial opportunities. for a MFIC borrowers one approximately or leading is billion middle MidCap large investment in the on is loans professionals. of was As existing teams focused $XX in Financial, commitments activity Financial largest provides with close significant. year. which was the quarter, reminder, a full among approximately with closing during

MFIC made an diversification borrowers to across XX% companies. to portfolio of $X.X new into during by lower commitment is million on as believe investment During totaled capital attractive the an of first for million the borrower. different $XXX average continue deployed were focus commitments commitments lien commitments quarter notably new we XX of new MFIC's new quarter, we leverage. environment what by characterized existing

weighted We This was into on currently commitments observe X.Xx. basis of a lower the points. XX%. pricing commitments levels of weighted favorable continue The new previously for new approximately basis seeing spread an dynamics some of to yield a leverage new points pricing originated was on XXX leverage compression result market of discussed. very average The newly average at OID average XXX net as attractive translates loans. over commitments with We're

a opportunities. strong investment pipeline We have of

million So has the commitments. far of MFIC quarter, approximately new $XXX in closed March

million. portfolio activity, $XX of and the a million totaled for terms totaled Sales Merx. Net corporate fundings, were repayments $X we $XXX million. In and the repayments excluding quarter down paydowns from funded $XXX million. $X lending lending pay In for received million, revolvers totaled revolver net investment corporate aggregate, gross

lien X% portfolio. total continues positive exposure reducing shift repayments our Our drive risk ongoing our Sales composition remaining second portfolio, than This and profile portfolio. our repayment lien second lending portfolio the in the of underscores included corporate a the in positions improvement of portfolio. less in the one turnover the the of shift to to of few of the

our investment Turning to portfolio.

financial lending for September had corporate XX a our the cost portfolio well-diversified and senior the other portfolio our portfolio the corporate $X.XX debt weighted lending December was invested book. in a is across was other up approximately quarter. one accounted average corporate on funded of was The cost to in weighted corporate X.X% total XX% more XX% of lien end December, first up or average on value the average The the of of had December, basis basis the the corporate industries. of and XX% yield of total XXX portfolio companies XX% XX.X% the X% points, portfolio and from corporate the or At basis corporate for different covenants. spread We At portfolio at of Corporate and lending lending approximately lending our lending our the compared lending average a prior was quarter. quarter X end points lending basis. on fair Merx represented million XXX portfolio portfolio. fair value a position on $XX.X of have and billion of

Turning to credit quality.

are Not top know lien, categorized middle lending corporate Our We profile. as strong loans, in why their the consider resulted our and is metrics. extremely focus of the most a the has X.XXx respectively. has to of most some invested thereto first be attachment MFIC's structure. and believe similar senior resilient true we capital all corporate has in attachment categorize as capital when look that important to end of demonstrates think This was credit points it's first one attachment we even portfolios both and senior part on of the leveraged lenders what in market industry. debt point. net on loans senior We At December, at structure, low we loans lien, there's leverage lien first the the that positions, X.Xx, and which leverage MFIC risk

last quarter, from Moving companies coverage. with coverage ratio weighted X.Xx, interest was to than X unchanged less X Xx, last The interest below quarter. average

given We situations and or as companies current believe have underlying manageable liquidity, support. they're sponsor have are these monitoring closely these performances business strong strong

portfolio As of approximately million. corporate the XX, of median the December XXXX, EBITDA MFIC's companies lending was $XX

increase to sourcing amendment continuing believe and are has a activity. credit and benefited underwriting Our performance portfolio capabilities. in pickup MidCap not companies fundamental from and meaningful maintaining seen EBITDA covenant Financial's breaches generally strong grow. with quality a our We solid We've revenue or

loans we on is order. on underwriting our Our date which has approximate mid-cap began since proven based be the co-investment utilizing mid-XXXX, sound source data to upon which

Our unrealized shows and around how annualized has by net performed. point is think basis Financial. We loss on MidCap sourced performance X strategy realized data well rate the loans this

No nonaccrual address MFIC and at dedicated cycles.Importantly, benefits during team over helps December, with the sponsors and a vast nonaccrual with $X.X these Our nonaccrual early. portfolio Financial status XX important low. of deals, have the of track note to investment the across were MFIC fair leads agent prudently administrative MidCap where management strong provides borrowers served portfolio portfolio. MidCap It's and rate Financial We has totaled issues our which core long-standing is end record in remains downside professionals, middle reflect large which we placed very on investments our that the market from and protection. proven majority Financial's total focused of the quarter. on X.X% At value. status as also or strong, lending believe million MidCap relationships on investments identify the meaningful metrics credit constructed which way to on

As which proactive the information allows enhanced with agent, borrower credit have dialogue active we and us flow, be problems. in to are resolving in

to on Moving Merx.

we As leasing and businesses. in reducing are our discussed on previously, servicing aircraft investment our focused

we paydown paydowns third-party should servicing Merx sales debt believe over time. MFIC's to we of and income and the While don't for in evenly, allow investment expect occur aircraft

additional X during approximately with to As aircraft of Merx's XX the of Merx. used our pay December The quarter. year providing and value sold a the the the remainder which Merx December, planes reminder, end XX for reflects X aircraft, our derisking in debt, were started September thus down that to proceeds at and XX owned cash aircraft were investment sold the were

XXXX, $XXX over value, our $XX of As fair the of or approximately XX, compared the representing Merx of X% December to end XXXX. million, decrease at of totaled investment total portfolio million in a XX%

of million $X Merx December million For approximately the including million, a return capital. interest $X quarter, of and paid $X

million, discuss For over in that, the full of capital. $XX including Merx financial year, of will the results and call $X to million paid Greg With turn MFIC return million I approximately to our $XX interest detail. now

Gregory Hunt

morning, investment the income income. December financial good Net for income $X.XX, and was per everyone. Ted, our you, reflects share Thank Beginning recurring which quarter with results. strong prepayment interest and strong

equity fee portfolio. prepayment to was NAV of end which end $X.XX per of X% December on per the and in million quarter, investment income $X.XX, annual the $X income or representing approximately of distribution a return combined. investment net the income is For based on XX.X%. remains MFIC's and the was includes $XX.XX, quarter. total gain income a net the quarter above and net increase on X.X% gain share for of of was the income quarter net $X.XX approximately our at million, PIK GAAP annualized income and proximately investment reflects the portfolio. low, from share Results net $X.XX $X.X for correspond an The dividend based which very income was of of for investment an September. ROE on in XX.X% $X.XX income $X.XX increase an $X.XX, the

due the up are earnings interest the for primarily increase million quarter Additional expense. Slide prior to details $XX.X net supplement an on compared expenses the were shown the XX in to gain on $X.X Net in deck. quarter, million,

both compared the XXX points. to debt priced our And a issuance of total Proceeds issuing XXXX. last market end XX% November, X the our represented CLO CLO million At used As March the a closed coupon a first has of period X-year principal unsecured discussed unsecured unsecured credit maturing on pay at over This par at were outstanding we down to under fixed early X of revolving of $XXX December, of of basis reinvestment cost end prefunds million in a in of non-call in with The X%. from notes debt facility. of borrowings effectively September. in MFIC December, XX% years. of debt portion quarter's transaction, unsecured call, transactions its of $XX $XX notes

the capital to flat evaluate monitor sources. going X Management the result funding December for to X.XX% on the continue debt forward. intend essentially quarter. quarter. a our weighted our As We quarter, extend maturity transactions We fees for quarter the average $X.X and of X.XX%, to these rate transactions, of believe our up totaled was million prior and raising from the it prior interest the was diversify prudent from to

reminder, on on management fee net of a XXXX equity totaled beginning fees one on base BDCs with charge only incentive X.XX% million for we to MFIC's strong and management focus to alignment believe December value. was which the asset quarter. fees listed X, equity, provides is As $X.X reduced Gross the January shareholder a

is our on In income hurdle rolling total XX.X% investment as chose As incentive a grow with income includes a a and retain dividends reminder, we to outpaced fee look XXXX, net earnings back. net. and XX-quarter return

included December of $X.X accrued operations. our during As which we our expenses in a is excise of and result, general the statement approximately million administrative on tax quarter,

was taxable income estimate or of at the of per income current [ approximately share. undistributable] XXXX Our spillover $X.XX end

consideration. We of will part our to our continue as capital monitor undistributed management earnings

This and of repayments increase XXXX, leverage compared quarter call from our concludes open to assets Moving XX, to the the XXXX, retained as operator, the million the sheet. end at questions. $XX net portfolio. gain earnings X.Xx and MFIC September please reflecting and net net the on at during in X.XXx to balance our of the December remarks, net of

Operator

comes Our Hughes [Operator with Truist. question Mark first from Instructions]

Mark Hughes

the generate future. the dividend NII your of like You position to ahead foreseeable had suggested

as modeled now, durable how that to period of curve should to ability time pay it in be of terms thinking your you that forward the have is out about With want any dividend? you kind share the

Gregory Hunt

our disciplined we which And X quarters, on X that We've keeping curve. at we're been point, in dividend next forward this given near confident have the where let's out to $X.XX the very $X.XX we dividend. are the we in the is, say, to future, look as at that coverage

Mark Hughes

will longer all The be Do then of from buildup you a good to perspective, sequentially. of credit there you a think very it's given shape. choppy Or across get be to was sector? perhaps more you in steady think And going pressure of higher for think economy. sector, interest you the a coverage the is Do do kind reasonably still state? for worse the seem maybe steady this

Gregory Hunt

X portfolio seeing coin, side which if we of do then and helpful. underlying we're growing things. is we're the On have in think I of And our seeing revenue one still higher Right EBITDA like longer, continue on to the that's feels to it for invest it business. like pretty a in now, going ability put still company's still place. good the to pressure feels -- companies,

I most than everyone you what be was there a we've thinking X or think if had. ago years landing harder ago, investment asked year that a would folks

been high would all anything credit call, surprised on from see pleasantly we And than the we've interest by mentioned the concern. rates as so any that pressure And I that the other we think cause rather benign environment. don't

Mark Hughes

are health positioned in health of factors? schedules, the some to care then reimbursement, of costs And some relative higher these within pressure your maybe you how labor on care, anything exposure, discussion fee risk

Gregory Hunt

terms our that at need perspective a different we bubbling take pen quarter, -- And think certainly in an either to Ted's best to other from exposures date, certainly we And challenges to very at quarter, concerned the X, across through we issue. is to surprisingly, the to, be And very within we this the of that not in care top-down on answer we while our [indiscernible]. -- past a but well are from very, of to particular, are labor lenders exposure publicized is forefront sectors perspective. this up managing And that reimbursement the we've be point, some about or do themes see portfolio were portfolio I look as of mean, it is of think health like look outright when reimbursement, bottoms-up critically we I we in what there then I small item that it's not extent, going the seem not kind the a stroke at space when to risk. take and look the every is those mind.

Operator

Our next Alexander comes Casey question from with Point. Compass

Casey Alexander

better a they're go remaining analyst, but the specific, if the playing sold, answer the Merx, I they to If this I some know with planes, probably have of planes the is securitization. question, are was to

more revolver? the Some would to the a when sold of the down a to paying pool, pool? it planes does if And is revolver pay a if down the Or of it in they're securitization? result it's as then opposed turn

Gregory Hunt

So, [ so we're we of MAPS-XX ]. of. have, on that the XX remaining - about within and joint MAPS-XX that claims, X, are the in we called two planes other a sit XX% have securitizations, other the or And venture

in venture, go would down know, planes, that joint the the debt. from right you the proceeds that capital -- portfolio in the the capital pay to invested, we securitizations to go down, the those pay capital have down selling will those of pay sale away.Within So our assets

paid approximately debt of of we those inside over of down during 'XX, sale XX $XXX million worth with example, For planes. the securitizations

Casey Alexander

unsecured could over you that, consider with the the the note, that couple floater, Greg, get curve the of swapping easier, course fact years? that start the into X% to did forward given rates, next of a Secondly, suggests

Gregory Hunt

we provision. have of but call and the We decided did point, our this kind have change always curve, consider decision, at X% looking we we the not note. we at And can it, swapped a two-year

Casey Alexander

that thinking it, you is, know, and suspect when about think, is, guideline then the we When as that actually the relation question if everything close? right you for last goes you should of you or deal sort have, to assuming in that a guys be vote will goes it you could way, Do expect, my consummating? then the And merger.

Gregory Hunt

near can comments, that in as SEC, say. you more we're think, comments can mentioned say to completed work review to directly. I on comment future. the once effective, on we Yes, is be then Tanner the that, the And what after from to opening and continue limited in standard the in our timing, we I this NXX we the that we expect can know,

Operator

Kenneth comes RBC Capital. with question next Our Lee from

Kenneth Lee

Wondering just wondering, what recent if remarks, investments? the of compression could investments, also about, elaborate on terms terms could you price in on prepared around and seen seeing of and if you're in documentation, you recent being talk

Gregory Hunt

As we alluded to and in the the prepared been the and remarks, we middle broadly markets, are compress, there's of seeing you've within seen spread private compression. spectrum, well. a And spreads When you as kind market step back, that credit in we've across public. seen rally

XX-year about and at very spread I think, fact couple where which backdrop last been not activity. against were equity we of, the believe think the the high private in we cognizant able the in spread were if of that XXXX.We as the at to and quarters, sustainable, had we actually look was we sixes low was deploy you to seven, look compression, did

As what of we the in that the forward repricings within often activity markets, to refinancing.And itself QX. concentrate case the, true of sort is was rally very credit incipient and in look in tends

rates, but probably well environment the not go consensus on well market while more in the broadly rates at speaking one, up view increase market in will I also no now, for an further. look as economy, as, completely not with spread, that, we that, speaking, guess decline that As a as as chance constructive

in the as M&A and volume we some builds, the LBO see, build.Typically, started LBO for see to what stabilization helps of that pipeline expect, starting as pipeline we've look volume spreads. typically some You're And to provide -- that's if we activity. to would back,

frothy friendly, mentioned attention, our friendly speaking, terms. our to markets and XX% lender corporate markets the see broadly I on But focus result over a I think Your in do.In our over those comment middle partly has lending of in covenants. market, prepared terms more dynamic what for ballast to helpful it's as the we of of of, portfolio last reducing years. it's And friendly couple one about, market on and what, has market. that borrower been more the remarks, our to emphasis kind particular, more lender that's continuing tendency us that kind have conditions, against And And call attendant a in focus we documentation. in corroborates middle that, the provisions in think frothy

continued So we our market in get a our have point and friendly to, that the lender one on aspect to and covenants ability is provisions middle to strong, to focus documents. helping continue

Kenneth Lee

And may, X.X wanted X.X, ratios, could coverage think where thoughts one trough follow-up, the were term? there I times. Thanks. get just the portfolio over a about think the I to ICR close average I if your interest around you near

Tanner Powell

continue we're lag, portfolio, SOFR goes. at what although a the that bit of at stay see our number -- a we'll it's revenue I you expect is trough EBITDA continue I could there are you which and of where suggest I and an where a and scenarios. that question interesting curve of be done to we've watch to grow, in we're you a would look different mean, to and and kind modeling But think if seeing expect they perhaps, to rates, think,

it think of to kind I continues perform on just the moves. underlying when the portfolio of depends timing the curve and SOFR

Gregory Hunt

I Yes, on put, estimation of a to that, that goes. it more certainly into specific would that go where lot there's Kenneth, to add trying assumptions

case. particular growing resilient companies was look EBITDA economic at we I price prepared I One again, not EBITDA of of the continuation the to, cash through underlying helping quarters, our notwithstanding companies, that was in think flow in than effects you the saw, spoke that a terms just in know, as would in remarks, put at to at in interest of interest alluded performance underlying we some by And portfolio.And dynamics more particular, have rates, putting performance of resilient of, through, broadly that lapping in can think, companies. revenue.And after increases revenue, which we we've the two which most to. affect our there have ratio underlying growing is in the lapped last that performance, and a and that. when different borrowers inflation stability coverage, as which trajectories of worst, and/or, one provide, acute performance for more to like that whether we our is the And than of helping was in you the at saw, could alluded quarters, Ted we kind inflation, look some and that juncture, saw Ted been extension, wherein we and is increases juncture, through as quite the price of of this the faster I this few reasons terms think the dynamic,

Operator

next Instructions] Our with question KBW. [Operator Johnson Paul comes from

Paul Johnson

I'm it if deleveraging any pro the close event, kind update terms leverage, a foreclosing two like in of of the at just mergers X.X forma the to material times. was to of time for sort there's curious, be expected

last So to the material kind we've if into year perhaps given outlook, comes any as occur, that I'm -- that of could update of, some the seen wondering there, back this year, continue of kind activity just the market. compression and there's well spread as your as

just whether from all, kind a of around, sort and standpoint? any spread that's If of, you the simply at have expected from the thoughts compression accretion merger, changed

Tanner Powell

of couple a your make there. I'd address questions comments to

First our of which not changing are guidance. we leverage

pick the that in QX on I to think X-X-X we into what activity last us have we said, is of number and saw refinancings you the a served X-X relative we range an that take at, with quarter. notably to up we said, saw operated what consistent

you giving statements said second of So guide a update should to equal, us one, think in successful, day in also fact the saw be part is investor leverage is, the And last it decrease the but the going we this, successful outlook attention, spread there's leverage. see people, the has Paul, to rather changed And would no. relates and I is would to I I no more, and [ think environment? the spread we consistent, all and or be with the to should on linked connection economy that last we executing, compression outlook to, earnings itself. be obviously would in in to as be a I to made LXXX and point of we heart the you there.And question there, mergers the to for the in our flows that your our XXX] there's things guidance.The I with year, spread. alluded your would being the quarter mean market early that you'd based call And healthy mergers release ebbs presentation that range say what

would spreads, in given And approach, this those managing and should mergers, those so be any anticipate on ebbs successful we flows in and different consummating the not account, acquisitions.

Operator

question Our next from Arren comes with Citi. Cyganovich

Arren Cyganovich

really up, You the amendment hasn't income this increase it but the other was quarter. or mentioned other your in amendment than activity fee picked in that activity, highlighted some

including the dividend touch on that, still, change there, and the income? dividend other prepayment side between, from versus think income. will income the You can it said the is is income of and then come geography What other on you I

Tanner Powell

Greg talk jump I'll and in maybe amendment is. So, to activity can

think in we activity. a have amendment uptick material I not that, seen

in the rate be things try would would current if to alluded see to as will, the emphasis we are surprising continuum, being all equal, The that an on coverage tighter given risk. of further And it to to, kind are activity, I ratios, utilizing seeing we this continue. think get environment activity.Where and you uptick seat invite amendment not be capital. you table, is to at the to should Ted expect

add-ons.And are repricing I'll we to OIDs other is to of that, another was in as Greg the itself, to alluded is comment of concerned in It's related doing get we we're remarks. prepare the that less invite income, point important wherein, linked well de-risking. in as well, of then this than also in are our and prepayments we It's commitments. our the existing where emphasizing. as quarter, We deployment with acceleration to terms And instance worth XX%

which of delay important are that, but other existing to Some of incremental down borrowers. for is which commitments is reasons. draws drawn two on, And that's existing

fees, you're those extent of enables being environment, average a that, use well. equal, of, the kind be better look ballast at a we too.But again. within market to It's as commitments the costs talk One about our that peers incumbency us dynamic, which and borrower is suffered with this get may and the or on the friction to pricing, one would of entire the also may because sponsor, the can to company and refinance, dynamics about, benefit a come importantly, lot all that, talk lot looking a current word is existing of, which incremental that the things there explain ballast I'll

Ted McNulty

out. we just Greg, throw Before I'd end,

less prior So, was Arren, quarter one of the amendments the quarter. number actual this than

to acquisitions, And additional those cetera. alluding were, do to, as some of et was refinancing, Tanner

the And some so activity some that's generated which of, and level fees.

Gregory Hunt

related on And take principal of Tanner double our same and receive of then based to our in auto. think income composition the primarily and quarter-over-quarter, income. dividend to dividend we take I of U.S. then to quarter, part the it income, every And proceeds investment it's our we is some answered other we

Arren Cyganovich

of real merger lastly timing And then quickly, the just [indiscernible]? the changed often

Gregory Hunt

the we've as in comments of we'll in we future. and near progress previously, NXX, the with stages on our be the think I - our final I making said SEC are

Operator

see time. any closing at will for to I call the questions no management remarks. this back or further now I additional turn

Tanner Powell

good call. On free Thank you, today. to team, listening to you we entire behalf of out if other Please time any your Have questions. everyone to have for feel reach us, you Thank operator. day. you today's for a thank the

Operator

Corporation Investment call. This earnings Financial conference MidCap does today's conclude

at You may a disconnect time, your line wonderful have day. and this

MidCap Financial Investment (MFIC) 27 Feb 242023 Q4 Earnings call transcript