ARCC - Earnings call transcript Q1 2021 | Ares Capital Corporation

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Operator

Good morning. Welcome to Ares Capital Corporation’s First Quarter Ended March 31, 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Wednesday, April 28, 2021. I will now turn the call over to Mr. John Stilmar, Managing Director of Ares Investor Relations. ahead. go Please

John Stilmar

Thank you.

Statements important conference of well the Company’s call accompanying contain some Comments during as actual with to documents made subject materially reminders. and Forward-Looking update expressed SEC Capital Corporation results that assumes course in such reason, could start performance uncertainties. from this any the also me Ares for the past forward-looking risks including those Please differ obligation information filings. a Let to and are any those The market forward-looking statements and listed such webcast statements. as in results. is its of guarantee or no note not future

such call, During information share non-GAAP may per because as company as or the the core certain one EPS. G, regarding financial call. the of share increase its and comparable presentation in uses per that investors in discuss equity it useful core shareholders’ the company be provides measure results this decrease can is core the EPS method The this net accompanying reconciliation from most measure, earnings defined resulting operation. conference performance measures of EPS for GAAP directly financial the believes to Regulation by or condition found SEC company to operations, core to financial slide A

information on information. respect Form Company’s And Certain accordingly, representations makes and website section the Earnings Quarter in ended was the Company’s DeVeer, first release are filed March XX-Q accompanying earnings Officer. Company’s www.arescapitalcorp.com can the from sources link verified. earnings on quarter not clicking X-K. First now Presentation to our this of earnings Chief Ares call the of The Investor or to I has been the at release presentation, will in reconciliation no Resources addition, related XXXX by found companies, the website. call also Capital the independently company including the this and derived may turn be portfolio website. these of warranties SEC found with on be with XXXX In Kipp information the presentation slide XX, Executive the this available third-party Corporation’s and Capital Ares Mr. Corporation’s on on to also measures over morning conference homepage discussed

Kipp DeVeer

we and Co-Presidents, members Thanks, want Michael other Mitch current then our for Smith; Hello, per to our $X.XX Penni John. Chief and year-ago. Officer, provide highlighting I’m our with everyone, market team. and share, per management the Financial thank positioning. core a here share on some of the This first Goldstein first I quarter us. and start you quarter and our Roll; joining from strong thoughts up results several earnings morning, of by reported $X.XX strong

gains per $X.XX higher new of drove of earnings share. GAAP portfolio net significant quarter $XX.XX first to unrealized a net our valuations Our as record reflects share asset per value

ambitious government of an We up vaccine and portfolio the of combination and also with stimulus, monetary even levels a set investing had active driving a more believe the activity provide and is powerful fiscal Capital second across U.S. activity. economy our The rollouts significant transaction the quarter backdrop U.S., in rebounding, is higher coupled this our companies. quarter, to delivered market. Ares rebound for and favorable is We for

favorable by would We externally solutions like the trends which this know, into is is unique that the today XXXX. position largest trends. as provide December a occurring a offers We for market direct XX, companies. we the of platform view opportunities billion market Ares company. are driver we and assets the with that a the lending few today, traditional BDC and provide management of more seeing managed that financing key global in to lending expansion corporate are of for as activity, direct approximately are one M&A I under our largest you Capital believe that to and $XXX highlight platforms

on believe incumbent a heavier scale, transactions and their existing capital their of well incumbent solutions flexible and focused buying plays over permanent relationships, support trend providers. building trend With of portfolio investments companies are private horizons Ares First, growth acquisitions capital, funds. or and favors add-on Capital and through to strengths. M&A is to time through an for portfolio longer sponsors core continuation debt we reliance growth seeking significant of in this leading sponsors on the increasing equity number focused market This funds large to future our our

is driver direct continued of growth market important expansion lending the Another the itself.

better a that last visibility can to deliver. us investing from frustrated bank-led And by years We of us expense of see banks, Many invest flexibility can part the This is continue widening past. and trend flexibility with capital, companies increasingly that long-term the companies flexibility, from for seen market two traditional market of are of that have the marketer companies several to to closing turning and opportunity provide. over choose the middle direct our we the been we often and liquid in capital certainty larger growing lenders and and for trend more allowing a a solution to are in years. these companies partnership and lack at scale other sources desire you of markets businesses, decades, have the approach

saw in the quantity increase year, we of quality able a XX% continue number companies that a these of increase average transaction transactions ultimately selective. in which advantages the materialize, allows allows opportunities, the aggregate compared see we the the breadth the quarter estimated of and five-years. more when are our past reviewed The we be of to opportunities, amount of As larger the the both XX% us to and to that in the highly of the EBITDA of pipeline this In a increase increase XX% quarter activity review. to we for average and deal dollar set us first a to diverse investment growing first

to high businesses X% free ultimately on differentiated we and that in less flow our portfolio. with attractively of than positions focus continue We market the result leadership cash a and review. finance selectivity deals positioned This

discuss that no Mitch collected in will of contractual portfolio more about our earlier This fourth interest in companies on supporting continues new about was the industries our rate average and XX% of top three XX% perform comments most our for average attractively experienced aggregate. detail, largest quarter. companies positioned that with This approach to in average for portfolio from It quarter software growth our weighted period. my later last growth last in than well, the and As EBITDA sectors growth the and improvement of higher XX-month and underscores Furthermore, X% overweighting X% over nonaccrual rebounding the X% worth paying quarter third a weighted economy, professional the and of year. the the noting healthcare portfolio and continued economy portfolio of industries: services is is services, off. EBITDA services, also the weighted is the commercial

up-market times continues rates $XX companies larger below Our EBITDA also portfolio portfolio our that of than our those had performance million greater million. benefit than were quarter, growth In the first two with more focus. companies EBITDA $XXX of to with from

financings ignoring have value to the than some believe we larger past, transactions. current they We relative not We relative are less simply the have the of that environment, that offer in in completed. smaller they

now some me first some the Penni turn and financing to Let call on provide more thoughts on quarter to our over details results other activities.

Penelope Roll

Thanks, everyone. Kipp. Good morning,

the lower for than $X.XX XXXX first were per $X.XX quarter the first for earnings the XXXX share of the of for quarter core of Our higher of fourth than XXXX. quarter and $X.XX the

core new of structuring originations Our first and and earnings fees from by were and strong income recurring capital quarter markets dividend solid a service driven level capital interest activities.

per fourth a compares first $X.XX were for $X.XX earnings of quarter share loss GAAP of of and share $X.XX, XXXX for quarter XXXX. Our the per the quarter of to for GAAP first the which XXXX

of this per down, notes. GAAP improvement a higher realized of the valuations. certain Our break credit in the performance XXXX unrealized loss to company unrealized reflect earnings quarter investments further the of the of early redemption gains and related on our relative first tightening offset for $X.XX investments $X.XX included include share, To spreads XXXX which of gains $X.XX primarily and by net the previous quarter, to on end per realized net share names gains continued of net of

Now are steady by a past volatility we induced recovery in significant the portfolio. that full-year of have a we the the seen value the pandemic,

XXXX, XXXX, investments last markdowns year, At Over unrealized on recorded have March i.e., exceeded quarter of of aggregate share pandemic on first XX-months, resulting the stockholders’ grew a $XX.XX the billion, $X.X recovered and our in March of the gains in to of we asset December we XXXX, unrealized our the per at the have as XX, the XX, level net our recorded valuations. $XX.XX now losses in net height net market XXXX. the the equity record XX, course of at value compared QX to impact past pre-pandemic $XX.XX net

at per from XXXX. year-ago high and first XXXX quarter of Our XX% the an the increase a of X% a all-time NAV a increase ended represents share and from end

we the portfolio $XX.X Our billion, the assets quarter of end value was had of at billion. and $XX fair at total

and was on debt XX, amortized cost X%, floating at respectively, the securities portfolio was compared At total and fair the December total weighted at was XXXX. in March average to at income-producing of XXXX, X.X%, as other X.X% investments. XXXX, at amortized March our X.X% yield our of average XX% As cost on rate yield and XX, weighted value XX, investments

investments and extending average month above maturities. had LIBOR one on the SDLP additional and capitalization rate capital raising approximately Additionally, current investment rate. liquidity. to Shifting LIBOR XX% is remaining excluding in which an of three floor had We today’s active our an focused floating the and our of certificates, debt quarter well X.X%,

the a During size our $XXX bringing upsized by $X billion, is for to and quarter, the facility facility credit full total nearly credit facility million, any the five-years corporate largest extended to single BDC. which we it revolving

low interest XXXX, BDC, advantage outstanding by maturing X/X%. coupon to early acquisition billion of while for we we X.XX% unsecured option low Allied exercising rate structure of our our over our also liability of optimizing ago, highest debt of our X which securities a which July was assumed notes represented the issued any of or historically at $XXX addition, took In notes of record and $X redeem any par. environment in XXXX at notes, us million These the XX-years in rate Capital our

secondary of returned We investment a the premium asset issuance equity net quarter, million a during ended ratio the $XXX down million of XX total at bringing the available our us our of shares times, liquidity quarter to of fourth to times since billion end net first stock for activities $XXX million. common $X.X cash for also our first X.XX proceeds X.XX approximately a capital the and time from value, the markets net nearly considering at quarter. in issuing of we After of the with of available XXXX, debt-to-equity

While to be range of work leverage levels, within we believe our With capital leverage depending we it very competitive us to on of vary activity of will remains one remain of ratios advantages to times. our we to will operate continue our target structure. to powder, dry investors. stated amounts continue well overtime, X.X significant X.XX proud Overall, ample and most active positions our

per announced will having payable I that dividends. many June XXXX undistributed XXXX, into apart investment second a regular Mitch maintaining that market have do to share. $X.XX call and our of $X.XX approximately be the to now our from BDCs on for turn over record supports walk to steady income XXXX morning, second goal XXXX. through income of will XX, throughout our on currently we not per a cycles conclude, from XX, quarter undistributed spillover. sets dividend million activities we is of believe This estimate I and any discuss spillover share. meaningful June $XXX the other This stockholders to quarter dividend declared and dividend our spillover want us strong I taxable or a our that We Before We quarter

Mitchell Goldstein

and few I the quarter for and performance investments Penni. our then our minutes an backlog portfolio spend more on post-quarter providing and to like update provide pipeline. would XXXX. I detail Thanks, activity a on end will of first

underscoring wide million our high-quality from team the set the industries. set our of EBITDA the quarter ranged a The be XX quarter, to than of first during distinct more ability billion During million, companies refinanced across the companies. a around our XXX opportunity to diverse of X.XX commitments of nearly array provider investment solutions of to XX new companies to breadth and a originated

highlight also The commercial to focus XX% first healthcare flow were approximately lien. largest consistent on remaining model. commitments capital two quarter and we which services high ability originations the defensive invest as Our the our services, during committed industries defensive to with long-held actively were while professional of business cash our and

fair with the and As yield XXX added, loans fees hold commitment seeing of that M&A to increasing the new XX loan ended with average Across and senior highly investments. nearly bps portfolio distinct we With greater existed value had about upfront senior XXXX. quarter new QX quarter in we our are turn new originated leverage our at Kipp stated, we originated strong advantages, XXXX. the XX senior portfolio of our activity during an and companies first we higher diversified X.X%. the position in quarter, set loans portfolio end as companies at this sourcing the a of of lower achieved an lien compared with to only X.X bps attractive Furthermore, XX we of

Additionally, supported the the the the quarter. end our value portfolio of of XX% first we approximately weighted is LTV financed companies at of by average well with

shifting average grade quarter, indicative of in weighted of portfolio to downgrade a our Now And we of saw is from X.X last of our quarter. this about the to value unchanged portfolio, fair ratio trends relative remain improving health the X:X upgrades our portfolio. portfolio which to at

of been of that In or portfolio. to companies addition, a as decline as the either continue one two number have graded percentage the

we by there mentioned, new added one through of no companies X.X%. at finish on activity rate those XXXX, million, investment new of investment or which million I our nonaccrual commitments with were on And million generating Kipp investment update XXX IHAM to remained vehicles million loans gains including quarter-over-quarter From We as brief XX approximately to a exits. commitments, non-accrual. of post-quarter sold on were of Our XXX five made pipeline. will IHAM, managed end at flat funded. repaid net XXX exited totaling million cost and April April XX, or realized

XXnd, April pipeline our billion of and roughly respectively. and million, As XXX X.X backlog stood at

portion may investments and patient sell are closing. Our to doing approvals backlog investments close a of we subject may that or not contains these and post

We note now to we will XX is XXXX, our nearly that April XX, the call I on April XX have closing busy for remarks. XXXX. of However, the will and some reported last on backlog double Kipp times reported year. that over backlog will turn believe a back I

Kipp DeVeer

challenges a during value brought over. and that and improving be substantial economic Thanks believe start We pre-pandemic hard a delivering are and lot, pandemic we again The and levels in will metrics. per The that year, Mitch. with shareholders, believe recovery we not uncertainty a our all pleased GAAP portfolio which results, is very credit the we to is we off at a strong first level company recovery. included and are to work are share for and positioned the earnings, to growth we NAV quarter for our COVID-XX core believe a what above now are strong

it However, and and mirror we see in a lot the XXXX beyond. have of optimism rearview for

Ares the questions. and that busier, concludes Capital for to We we last of aspects provides through believe happy a company prepared year many backdrop While healthy out record believe deliver have cycles. That normal the our and is and have reinforced varying difficult hopefully, our XX-months be and unfortunate, thriving. our remarks. demonstrated a can line these been a of returns this, would shareholders. performance Coming times long strengths ahead again of for We great more open track our our market for we the

Operator

question first JMP come you. [Operator Instructions] with will today Ryan Securities. Devin from the Thank And

Devin Ryan

stuff. lot morning and clearly, good good everyone Great, a of

is Going at just more at differently, just other on get the and little is ask all want I maybe current and to amortized from weighted then risk a and at the pricing, that recently. evolved just this quarter, conditions activity. a And cost securities look moving investment flavor maybe talk to is guess or average X.X%, how was little curve. market And if I more if about is The want up that around yield quarters. bit that tied I which pricing just bit the debt a in quarter-to-date down just the recent to income-producing of market

Kipp DeVeer

Yes.

think is design over nothing point. six to think by the had necessarily compress recovery, definitely not backlog it I where seen mix the guess the hit to quarter. it to they economic second is a are still have are of news we on risk/reward quite with been the sort plateaued to last go we of and that I level, Look, We bit good My have lien, interesting higher spreads bit. directing first little there. with are we good right. of more really it out pipeline it situations feel that there is not higher sort us this is is little seeing a a would design, the I But to back specifically and The a at nine-months I steady risk much back pretty yield, is state. and like of by continue. from lot actually through just versus think

Devin Ryan

guess, I Okay. helpful question. related and Great. Very a then

So here. very looking pipeline, are the you healthy at

the up services than making of half is and more pipeline. notably Software

the mix the leaning that maybe attractiveness. you is And if so of an so of it is commensurate of that I’m in are just that curious area deal kind more reflecting is or because flow,

you now. then just just any in are other So right that there and love industries I some interested color particularly

Kipp DeVeer

represents Tremendously of the the opportunities. tell along would is I firms, the flow that services activity of backlog on flow, and right. of majority lot elements a private growth that really deal because particularly the of pipeline attractive follow you valuations of still kind and we right, the we software mean, I credits financing general just Yes. what lot our and just the high Look, which space, in services with is equity space. equity deal there high-quality side a there, software and in good and think of

industry a has to on seeing the have we is with pipeline we are we that it continued business generally the add mix. significant are it we been growing really seeing attractive. in of So portion that, backlog same terms top healthcare, would services a thing our very and of same – representing effort, us, build out I of and for effort balance think thing in in

Devin Ryan

Kipp. appreciate I Okay, great. it really

Kipp DeVeer

a Thanks, have gentlemen, one. good

Operator

Finian question Fargo Please go the next And ahead. will be from Wells with O’Shea Securities.

Finian O’Shea

Hi, good morning.

First question trajectory investment for COVID, in I last Hill. or vehicle? know Kipp but for some more transitory quarter this an invested on robust. level income still income improved of back the and the investment higher very Is during that appears more that Ivy BDC

Kipp DeVeer

mean management invest in have funds to and with we of Hill the I obviously, under generate there management, that company. obviously more we No. Ivy under continued that assets fees management increases typically that

know, As allows put from which you also Ivy the that income together, securities of lot just ramp invest we us also Hill. they the investment funds up in and to a vehicles

an it increased this just to So dividend simply should see. is quarter that you expect

more, increase vehicle represents very relationship is from obviously, investment upwards. that taking a And and Ivy Ivy a income more continuing just dividend As continued our we be just should attractive belief invest in so with obviously, Hill, we Hill. it

Finian O’Shea

quarter. the just follow-on this then on a And origination Great.

or you idiosyncratic there? derive are sort future Is into the into this or that from spec your issuer-specific peering may network without that situation of from you out opportunities may items. the to came ecosystem So an you see getting

Kipp DeVeer

banker, consistently, there. involved I from nature don’t in spec. was we i.e., that bother seeing is obviously, idiosyncratic, a particular the something specs. to Yes. not This It a came We opportunities one have would financing with say are through a little with

Finian O’Shea

you. Okay. That me. is Thank for all

Kipp DeVeer

Thanks Fin.

Operator

question And KBW. the with ahead. Ryan will come Please Lynch next go from

Ryan Lynch

Hey, good morning.

trends all? potentially based getting if borrower into been level slow And trends on market, I’m do out the in. much improve First to you the obviously, pretty if upper you a or is that of was, the friendly. term some not, just and and trajectory? one trickles in where I And market see those just do down and invest the concern you that that at structure leverage those kind of curious, what straight middle broadly all is more just more trajectory syndicated been of kind that down out you seen loan can had path look on at middle on market kind the those of starting future that ease or in have pressures you flatten and it

Kipp DeVeer

again, non early large-cap activity a and is portions when think, sub-investment look, has follow with here in mean, Look, think we I everyone I grade, in spread that, Yes. tightening of lot of the bit, in XX frustrated obviously days. lags year little retreated were I other answers same the XX it the part with I optimism yields folks so rebounding to always a investors seeing does from of market middle credit fresher which a economy, the think portfolio, way, in the were year. it And the the right. bit last market little a the,

heavier see the don’t down really calendar. new of of was right. now here, new of dramatic part a continued and of not we drops little were year, from with a lot this sort issuance So that Early bit just come on is refis heavy issuance, there kind

again, they things. we here think as where concept of are So of the things I how plateauing sort see were

Ryan Lynch

kind recovery? COVID of private mix some maybe maybe or XXXX kind to the kind more start back impacted can kind as of more is more That earlier private the in today, the businesses half said to a the businesses. reflection with concentration, kind more of shift you the little cyclical equity the which largely And and sponsors Do helpful. that seem of and a the what you pipeline of then in transact you software, going to economic recession-resistant healthcare. starting of that kind of question, see given with of that high increase sponsors focusing more discussed all those equity backlog And to are those back they be Okay. is bit of on of that as kind

Kipp DeVeer

is time have question it us. last a type deal I is understand I Yes, my flow around thinking go mean to don’t when was for back COVID crystal ball year, the where most I today. think this is, the of possible. stuff, that coming behind from, you part, which I’m lot rescue your but

You think know our equity elsewhere. industries. recovery and economic whether solid to good about It seems across looking cyclical a credit, to whole, talked economic be we that with to is have how sectors broad purchase prices, I willing is that folks as the particularly expecting private would are actually regardless a firm in it have where they private the But equity more this uniform pay is. are that are growth elevated, folks in growth of recovery for

to not right So we mine seeing yet. maybe but now. rise I as your as see. guests sense, It But hate with it will it, good are we makes answer

Ryan Lynch

I I comment. guess. your you. a call ball, Thanks. And the can Got appreciate whenever if handy, you crystal get just back you give me

Kipp DeVeer

Thanks. handy. in Come

Operator

be from ahead. And will the Please JP Wedel question Melissa with next Morgan. go

Melissa Wedel

questions taking originations versus for change first the to quarter. early is the lagged the new April-to-date there forward it sort have outpacing already to anticipating net the for thanks core a them questions you lot broadly But would thought been I that the you that related today. over guys, getting. Certainly switch Actually, morning activity Good I been more or noticed a have my tell? answered. of them too have exits of investments in activity, going Are

Kipp DeVeer

answer the The Business But the the got of part. sorry, to levels, to quite and I free don’t bit little jump any backlog and feel in. activity I the second sort We didn’t right, if active is question, super and things change lead-in missed go. come I I’m pipeline now. Well, right is question, a in very healthy. back see your of

Melissa Wedel

Sure.

if net I size mode asking the the given Sorry switch the mode pipeline that. to about origination of and sort anticipating net exit backlog. was a of you are from

Kipp DeVeer

the for is answer. this companies We the sort which a I rationale no, saw really refinanced in easy is quarter, the right, as next No, couple quarter. any of exits don’t get large of expect I think changes. But

Melissa Wedel

Thank you.

Kipp DeVeer

you. Thank Yes.

Operator

Compass from Casey Point. ahead. And the next question of go is Alexander Please

Casey Alexander

that you it with Good companies portfolio questions. are as Is hold that as EBITDA; used still is you to a One talking morning has that companies couple Kipp, well? that opportunities. the a be financed sizes willing to in when you larger and terms impacted million hearing the about company lien of thought the of are size, being company second that true of that in $XXX hold of

Kipp DeVeer

I right, Yes. do used company that to first you smaller more deal a mean not it et typically, common, a cetera. executed, - deals capital will than that often is junior guess I more size place more lien and where privately had syndicated high-yield getting be,

capital to just larger right, names, we In Now that And will as a obviously, lot handful right, typically too. math, a they it of capital which do. is our the Ares, and competitors junior place this do have of directly, privately view we a win-win. I think

final these will of We in larger holds some companies. larger have

prepared capital bit, have inherently think calls, up think in spectrum structures but premium value teams, relative a available moved company size real we the credits, I same. is cetera. some in the of past there have should better et are smaller larger I these I because this said we right, management remarks but risk our we companies, in the good with little this be actually seeing companies, And really in no which better largely mentioned were right

where intend that, to into remain that competitive advantage, one a and plays really like a active. we that and we being strengths we continue place our to as So see

Casey Alexander

is given three what to the a And I’m three default years. that starting be Alright, even or great, comments two thank from stimulus three would Michael years, two read you. And spike a delayed follow-up sort lead some default I growth why My cycle? cycle years? of a new Arougheti has about we government two just to that by whole seeing, economic why economic wouldn’t would we that just be into delayed are curious, or

Kipp DeVeer

last that that. days defaults there down. are they right, out of I sort didn’t come that we over there to that common would and is just wisdom But into a I and start have think play Yes. your me, economic this again. pretty these point, have thinking To to may to that things the your seems gotten through rebound which, be more see XX-months, starting peaked, solid

some we significantly long impacted asterisk for impacted the - really COVID is think right. haul, have that I the really companies are by really

like think these I the the is that same asterisk it pushed don’t them others, accruing industries work hospitality guess think get others is little to But I presented a right. necessarily of and we they pain while. I think for a And were itself. I to for travel companies to is these and way think recovery COVID-XX all by there where the will to out see. economic can to So all But saying, things do stimulus we of I some lot it back for before the still of,

Casey Alexander

your and appreciate you thank I thoughts. Alright,

Kipp DeVeer

you. thank Yes,

Operator

And the question comes Raymond Dodd from Robert Please next ahead. James. go with

Robert Dodd

the on congratulations and quarter. morning Good

at one one, kind then of now. downgrade companies. gave quality. the number change It upgrade I’m no weighted right Mitch grade I the First of portfolio, of to focusing seven three. credit in mean average to very on looks robust ratio

the weighted growth are of at small rebound. saying we So companies shift or EBITDA of small materially a to that average that are lot companies same But are fairly the time, that tends upgraded the getting kind imply on lagging and grade.

system it in so while are getting the you lagging the can that companies rating give is much? broad your on color by us portfolio small any why upgraded So

Kipp DeVeer

hard That one. is a

smaller of some the just think have we upgraded. equity is in where positions portfolio some it composition getting that are got some I

and we on twos that I not generalization. the more are just honest, at to being positive some continue most So ones there. folks here have mean, little me I to is representative, little necessarily the out right more or laid as I on that to Robert, work focused of folks it migration have kind -. for show a But we I think, bit if think, front in of in make thing be is a what you digging terms would in I hard Look, of have and dig but have bit

Robert Dodd

kind follow-up discussion one. EBITDA it bigger of tricky larger - this businesses, quarter businesses. is it, Then it. a dealing the Got with I I a mean, just lot about appreciate reviewing of

first this the you Is average materially But this a an like in the competitive of market? your out shrank very Athenahealth artifact just large more things long BSL in an EBITDA broadly, is artifact think question that Melissa. of I indirectly getting how response or refied market refi in quarter. the to answered fairly end the basically for time the time weighted

Kipp DeVeer

market million of Athena Yes, And them the We your were right, upper do of loan both refinance occurring point some were at refinanced syndicated the get very folks think pretty a of per finding size you question I know [indiscernible] was is had refinancings so. well our two to these end large we attractive of is one did. EBITDA. companies $XXX because portfolios and out. had as EBITDA of other, north Ryan’s

Robert Dodd

Got it. Thank you.

Kipp DeVeer

as as Yes. we I and really it having forward. - mean, [Technical just is roll I you see a we any winning quite will say Difficulty] year not the would lot that are

Operator

Janney question Scott. next Marinac from ahead. Please with go the And comes Christopher Montgomery

Christopher Marinac

Hi, would ask Is a you good about I leverage the upper morning. cited? be there X.X% scenario at you not the you that details end where more to at made. the of wanted the leverage

Kipp DeVeer

do way Penni range can being that I the just the active to mean to course quarter sort the But mean would draw will in know, if levels. net down. X.X. and you based of within leverage operate on typically more expect, are we between we a and see I more one like we more did if you activity the too, to I And we basis, past active quarter, the have as And tends to. we on this originations ordinary jump revolvers it No. we significant repayment I think go is a fund That things. like see that. we somewhere

Christopher Marinac

Great. I morning. all appreciate this information the

Kipp DeVeer

welcome. are You

Operator

Instructions] question Lee ahead. RBC [Operator Markets. Kenneth from go comes Capital with Your next Please

Kenneth Lee

as expect this on to larger thanks the of to more investments question especially taking a for you is near-term, regarding lien to see the more second a gravitate emphasize to be my mix follow-up towards Should borrowers? we question. Hey, And investment shift a going backlog. over investing start previous in

Kipp DeVeer

going right. a of expect obviously hallmarks one mean products, to don’t set to counterparties borrowers mix and right. shift we has that too complete I strategy shifted want of of much, go I mix I forward the with the to Yes, the the think out is wouldn’t and

everything all preferred equity doing down So we happy way are investments. doing to first lien common the from through and

similar be So today. think just I to mix will going where it most really is in we and pipeline the are we attractive. and stay as what presents to backlog itself quite what see But do

consistent last been I the over or think so. year is it

Kenneth Lee

income was Was notable is one the I Great. may. if That and helpful anything was the quarter? that driving dividend portfolio that in very reported follow-up, just Thanks. there

Kipp DeVeer

one. own. have sticks Penni, let that special dividend one particular take anything might been we that that you a we we the from out? think company are had restructuring I now there portfolio Is of midst that I fixing. think in that from and company of turning anything around I one that that we dividend But of special beyond can’t than sort that, in other came

Kenneth Lee

Great, thank you very much.

Kipp DeVeer

Alright Kenneth. Thanks.

Operator

to Ladies I like over conference remarks. question-and-answer closing concludes any to the DeVeer back Mr. and this session. for turn our gentlemen, Kipp would

Kipp DeVeer

No, getting that, happy as will company everybody in today to is everybody We we beyond wish least I how the we appreciate And hear formally here on positioning summertime. at spring great the again about feel and talk the a up. call weather to the Northeast the here you nothing doing. guess warms just

thanks So attending. for

Operator

concludes for today. Ladies And this conference our sir. you, call thank and gentlemen,

by the international and to one of XXX-XXXX XXX domestic an today’s May callers of p.m. call be call, to through call XXX-XXXX. will callers the hour X:XX part any of dialing missed approximately Eastern you available replay If after archived +X-XXX by XXXX, XX, dialing the Time at end

archived XXXXXXXX. replay webcast located very available all homepage For of Investor website. An please the the section will on Resources reference you also on replays, of a be number Thank link conference Ares Capital’s much.

your now may lines. You disconnect

Ares Capital (ARCC) 28 Apr 212021 Q1 Earnings call transcript