Earnings call transcript Q2 2023

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Operator

Welcome to Portman Ridge Finance Corporation's Second Quarter 2023 Earnings Conference Call. An earnings press release was distributed yesterday, August 9, after market close. A copy of the release along with an earnings presentation is available on the company's website at www.portmanridge.com in the Investor Relations Section and should be reviewed in conjunction with the company's Form 10-Q filed yesterday with the SEC.

As a reminder, this conference call is being recorded for replay purposes.

Please note that today's conference call may contain forward-looking statements, which are not guarantees of future performance or results and involve a number of risks and uncertainties. with materially of in including a in company's differ as forward-looking those may the result a number filings results from the those statements described Actual SEC. the of factors, statements Corporation Finance to such law. no Portman unless Ridge by assumes required update obligation any forward-looking

and Roos, Investment Speaking on Chief and Schafer, Chief President Financial be Portman Ridge Chief Executive Ted Officer; today's of Goldthorpe, Finance Officer. call Officer, will Director Corporation; Jason Patrick

Ted turn that, Executive Goldthorpe, I to would call With Chief to of the Ridge. like Portman Officer over now

Ted Goldthorpe

morning, joining provide Good I'll today our provide quarter XXXX Jason Chief our Officer, and markets, in Chief on and Jason our our Schafer. discuss commentary will greater our Patrick portfolio brief the and performance Patrick joined on I'm highlights second detail. Investment thanks, activities company's everyone, investment financial and Officer, and Roos; for earnings by and Financial operating for our results the condition will call. quarter.

XXXX off overall. pleased Ridge to announced the solid in of of both are its we Yesterday, earnings the quarter of performance half and for XXXX, first financial the XXXX first and second seen the results second announce XXXX Portman momentum strong in back quarter Ridge quarter of Portman continuing a

have we debt Our to substantially income the as of total of portfolio. see investment to and income, the core income in as continue rates increased revenues period rising year, investment had incremental last compared net from investment X-month X-month impact generating and our

$XX.X the quarter core was compared of of million $XX.X for XXXX income million, second second to increase the $X.X quarter XXXX. Our an as of investment for million

distribution to per past dividend this our share, $X.XX as XXXX. third to quarter Our the share compared marking of of maintain quarter a strong allowed per has us $X.XX increase performance

the inflation and macro market despite in update, continued of activity elevated the Fed early half quarter, the during second a picked rates particularly overhang In quarter, the deal and continued up funds back rate. M&A in and of terms third increases

the portfolio competitive seen quarters. for broader companies we lender-friendly While to complete particularly new to found tuck-in opportunities stronger in have add-on see We have looking continue are several selective existing investments dynamics pricing and portfolio but acquisitions. remain regarding attractive very given the compete than terms, environment, macroeconomic we concessions companies on in

we seen Turning the the the repurchasing we focus an first continued following Ridge stock believe of and the quarter repurchased we under shares renewed back QX Portman throughout our to valuation XXXX to company; of incremental in continue program. XX,XXX the of trend shares XXXX. In XXXX, on purchase as

this expect also shares call, to value, We portfolio as trend upside to cases do through so. this by investment the were will of of quarter the pertains to approximately performance, as it our repurchasing net CLO current continue able net were XX% walk positions. equity but potential On Portman the for our our XXXX, in throughout asset we Patrick driven losses

assets. with market, to be syndicated represents less total X% of CLO asset a given than equity this the issues continues structural certain While loan our class challenging

NAV interest at on both Thus, embedded our in default still in we history, value momentum, new versus discount rates potential this debt If spreads by net driven rates lien defaults of drive valued is portfolio. and upside there's portfolio wider and normalized asset meaningful is to elevated upside. XX% even now Approximately origination earnings to earnings experienced our adds first short-term believe our or par. rising a and to

to our over Patrick call Officer, the a of turn Schafer, will Chief I review for Investment our investment that, With activity.

Patrick Schafer

Thanks, Ted.

interest of rates. X our earnings to earnings of and presentation sensitivity Turning our Slide to the

of LIBOR, of XX.X% these SOFR to being index rate portfolio an with to interest either the spread with June XXXX, debt as rate XX% were XX, securities approximately linked of such As our or SOFR. floating primary,

As and XXXX. during rates July below assets prevailing remains the the can lagged the market meaningfully quarter from underlying you the our of rates the still XX, as of chart, rate LIBOR benchmark see and SOFR

to and over X-, X-month time this underlying as reset. X- We the contracts normalize expect

all illustrative assets our to to For a respectively, expect LIBOR either generate incremental to X-month SOFA would of purposes, we income. quarterly of an $XXX,XXX if were or rate, reset

the While of we approximately benchmark of assuming same our a our which for an QX entire rate are relative liability X. quarter, levels, share, assets is to positive expect further costs and will their all on per benefit also rise $X.XX still liabilities net utilizing illustrated Slide X-month

of the were approximately both to $XX.X repayments activity of quarter, income Net and originations prior new basis approximately investment investments approximately $XX.X new million, resulting to investments than spread. million higher approximately repayment These and a Skipping and XXX in of on are of par net balance the sales to expected by par, sales. generate will purchased million. offset quarter the of which deployments the XX% of down spread XX; $XX.X yield incremental points slightly at a fundings of Slide SOFR XX stated consisted cost for to and were

during more which paydowns invest repayments like X million that both there deployments would specifically XXXX during QX a mentioned notes. we out QX of X XXXX our several earnings to relatively quarter, on. repayments. than in $XX.X secured In of generate payments as May, of revolver would ahead I of As up call, occurred the early we our to repaid is call expectation our portion intentionally our drew

works, completed part Metal we an recapitalization in with as Northeast the First, asset acquired of merger of Capital Harvest XXXX. the April

and prioritize X/X periodic to of will position repayments. we additional of restructured part As transaction, our position approximately the remaining the repaid

being second further by one was allows largest term position loans. lien initial we of a our of our in been XXXX. first senior secured April -- refinance in mid-May, loan position rotate and which in positions, us [ph], in larger the back will The far addition, has lien out -- TechTech it our to out company refinanced transaction second portfolio since we Secondly, lien into externalization

venture, the balance into us sheet, going $XXX,XXX to joint joint funded returns with commitment. fully increasing taken have in close on in Lakes assets Similar experience we which Lakes widening under forward. our OID, quarter, come incremental Great funded investments venture to new result being which should and our Great higher spreads at has that our the During

per securities while different end $X.X Our first of portfolio the with the of at investment entities, million. average investments different of all and maintaining remained par -- diversified at highly XX XXX quarter approximately the second spread end across an balance entity the industries

term Slide which XX.XX% is compared a which XXXX. is from initial XX, from investment. of of bankruptcy and to had has Turning for valued in nonaccrual X we recently as recover portion to new The loan issuer par a QualTek, to are looking at to portfolio March of which XX; our a investments X company we incremental emerged one

relatively investments fair of represents which portfolio on on XXXX. of second In These the a remained nonaccrual par. the status investments compared status of loan amortized investments aggregate, nonaccrual X.X% quarter X.X% of XX, at at second nonaccrual X of company's at second The as X in for term cost, Lucky value to is XX.X% XXXX respectively. on and the XXXX quarter and end investments as March status of the which X at box, valued low is of

fair nonaccrual a first top if million, we aggregate XX% price the represents Ted investments, par debt Slide have securities of of loans at of of XX, of rows value an the comprised focus exclude as par we table which XX.XX% and on On of $XXX.X mentioned, our is blended X lien and value.

excluding million of of $XX.X recovery XXXX nonaccrual any recovery, June fair a Assuming values incremental or XX, a XX.X% a potential reflect our X.X per par the share, increase investments. on or $X.XX NAV,

The this rate recovery nonaccrual you luster or per default matures repaid, as be XX% of time an is -- or For excluding debt is incremental $X.XX XX% experienced the recovery a share increase market a any is NAV again, to purposes, expecting there over this the portfolio would is portfolio, and were assume on XX% rate value rate anything historically. default if default by above still has and investments. on

value years these have Turning finally if these of realized have and -- of aggregate repurchased XX% to combined the over fair achieve these million realized combined mark mergers. and weak despite we pandemic a Slide for market years, were results a the in all to and in X global respective closing investments, almost last positions you X the $XXX.X over X able time XXXX portfolios, of unrealized classes We asset XX; the XXX% of XXXX. of a most at at of XXXX

and XXXX, analysis these increase portfolios, XX% $XX.X XX, similar when as default which to par a and the an investments. incremental value XX% or applying million as in equates nonaccrual million as previous there June excluding to rate slide; a $X.X remains X.X% similar recovery In compared of a vein of

further to Jason to over results call the our the turn period. for now I'll discuss financial

Jason Roos

Patrick. Thanks,

a mentioned, results financial second challenging despite both environment, performance. economic strong Patrick and reflect Ted under As of previously our for XXXX operating quarter

Our of by rising of million a $XX.X million XXXX. income total to This portfolio. quarter million from investment to of XXXX on in see million of in in impact comparison $XXX,XXX quarter $XX.X $XX the we rates first investment XXXX decrease increased in our second total the represents reported as the income reported the the income investment continue total second to $X.X of quarter

as paydown of the quarter-over-quarter income as reduced when in XXXX, income quarter The continues through second quarter compared decrease mergers kind to first due discount associated lower the well with to purchase acquired and off. in and run seen to largely lower accretion acquisitions was payment the investments as

increase our $XX.X of quarter of of as to XXXX. $XX.X purchase million, a an decrease XXXX to $XXX,XXX core of as investment and second compared of was for for the the first the for the million accounting, $X.X million second $XX.X impact quarter quarter compared of price XXXX million Excluding income

in decrease a as the $X.X first for $XXX,XXX the million down quarter of increase $X.X of discount XXXX. to payment was was accretion. for and Our The largely second compared quarter-over-quarter million aforementioned quarter compared investment million million, seen due kind of an of of XXXX to as decrease to income purchase for pay net decreases quarter and XXXX the income, $X.X in the income $X.X second

June of the NII million $X an same as million the For from X XXXX. increase XXXX, in our XX, was million, X-month compared $XX.X $XX.X ended to months period

be of environment to to $XX.X rate on well As of of interest-earning portfolio relatively XXXX in XX.X% continues compared the debt our average at Total rate XX, in XXXX, total seen the XXXX. incremental contractual XXXX, quarter believe to XX, expenses the generate quarter We flat $XX.X future of a million was quarter-over-quarter securities weighted million and respectively. second positioned for XX.X%, as interest rising March in June revenue were the approximately expenses and quarters. first

continuing and administrative services, costs. efforts and as such certain to quarter-over-quarter reduce fees highlights This administrative decrease professional expenses general areas to in our overall other

or taken million share $XXX Our per compared first losses net was or A $XX.XX asset is value of the quarter $XX.XX second quarter well to million in quarter-over-quarter against as per realized decline of from $XXX.X that share impairment significant for driver CLO the attributable positions our equity as on portfolio. XXXX. as XXXX to the markdowns of

X/X% on million XXXX XX, side million due the June notes a X $XXX under secured $XX.X of of borrowings a XXXX. million, our repayment comprised million quarter-over-quarter On revolving of in balance the decrease million outstanding, $XX a of represents XXXX, due million as of This we borrowings notes the notes facility, in driven had $XXX.X XXXX. value liability sheet and par by of total secured balance due $XX.X of $XXX.X credit

borrowing had we on and capacity the As November credit after our credit of draw quarter, borrowing the [indiscernible] shortly the ended $XX under XX, capacity revolving available under the remaining revolving XXXX. million facility reinvestment senior as facility end period no of secured of

was coverage a on As of June XX, and basis. our X.Xx net ratio From ratio at end basis perspective, was on gross debt-to-equity asset X.Xx quarter a a XXXX, our XXX%. regulatory

year per the as close at share August XXXX. business to distribution by and payable the on This Board as $X.XX share. stockholders of XXXX the earnings yesterday, amounted in announced quarterly distribution XXXX. per and stockholder declared the compared a $X.XX results, third on record to is of of share total of distribution the of for XXXX quarter XX, subsequent full XXXX, distributions Including announcement approved Lastly increase XX, was including per $X.XX to a August

over With to that, the I back call will Ted. turn

Ted Goldthorpe

opportunities Thank continue demonstrated advantage to environment the questions, like continuing to we in throughout you, investment half by remain attractive second to our Overall, our first reemphasize selective of returns of the positioned of decision-making. and to believe of situated we to market in as that from be XXXX the half XXXX. we shareholders deliver have Ahead arise we resourceful well believe to I'd Jason. take current are that we

once turn you the ongoing call all over our support. questions. shareholders prepared for operator to again and the Thank now This our any to concludes remarks, for I'll your

Operator

for Tallman. The Instructions] [Operator is now question floor open from you. Your Thank comes Ladenburg Nolan questions. your with Christopher first

Christopher Nolan

accretion share? repurchases quantify any so, you Did it? And the share have to per if NAV can

Jason Roos

about, what, worth of in bought We $XXX,XXX, Yes. $XXX,XXX equity the about quarter.

I $X.XX in to at months it I NAV, roughly it's date, [ph]. think X look if you about think

Christopher Nolan

any were in Also, there EPS? items nonrecurring

Jason Roos

in well, about last have line. items is onetime due about of Yes, that onetime fee in it's always and I I about some there would generally quarter-over-quarter, expense see there's are up $XXX,XXX the $XXX,XXX, side, quarter income some say I volatile, expense our trended say -- is from there but you to do nonrecurring than but that, effect generally Other nature, other would it there onetime a of kind there's roughly. recurring expenses. somewhat that on legal in $XXX, professional the pretty probably quarter know or fees income we this

Christopher Nolan

I then, environment the I BDC incremental for finally, BDC asset be for space? consolidation conducive the cover more to I'm see -- And to do the guess, seeing developing you deterioration, Great. in strategically, as quality

Ted Goldthorpe

important clients credit. which you're And scarce more and also more broad becoming terms both I I financing what But a our and lot of with picked, that scale think would question. thought from think, seeing I servicing becoming not across more of getting has is fruit M&A. the like That's more I of and in say, is again, low-hanging banks, appropriately. in then in going terms you're been

is important. It's on calls for. I get but obviously, don't question. a scale see near-term any good something And always we're it M&A, always So definitely looking is we M&A phone opportunities.

Christopher Nolan

you. Thank

Operator

from with comes Ryan Our Lynch question KBW. next

Ryan Lynch

Or of clarification. just the realized the a reflecting First million $X that say related to the CLO losses to you XX% XX% $X million kind was is and of was positions? Did losses, unrealized of was of realized which losses?

Jason Roos

Ryan. Yes,

about related CLOs. million So realized, $X.X million was of of that the $X.X to the

Ryan Lynch

then, Okay. then. on couple questions a that And of so

So it what or by syndicated valuations what in realized sold didn't the like CLOs prices book? wasn't quarter. that you your the kind of unrealized drove when drove guess, CLO offset lower broadly the seem decline loan guess I in in, Because that because gains. I really those, moved lower gain like

fact, In were up they [ph].

Jason Roos

Yes, let me clarify Ryan. bit, that a little

And into an all of I that have did of realized in of the part $XXX,XXX million $X.X the that as that about into remainder So well, was that $X.X impairment. unrealized the as flipped million CLOs just realized -- mentioned. flipped of part

wasn't positions, of reduced the the the It we -- the driven that's value the sale So cost equity. basically future fair of flow and that on the the based and instrument. cash expectations accounting basis by a -- CLO

Patrick. it I'll to pass

Patrick Schafer

hasn't the a most of you But a for reinvestment relative themselves lot why. that certain some but just an hit of call assets just remains whether the reasons Yes. of portfolio, whether as I'll moved can other a the actually it, fair said large, you honestly, quarter all vehicles CLO are unrealized sometimes the is are some, for at Having portfolio. and that's syndicated the sell XX%, in the asset declines the talk market impairment again, that's selling this and to that very a of it first there despite point, while, given period, what sometimes consider we've to still seal value within we're to seen, we in that, of -- tests meet CLO time took we much. NAV. And your out the our reasons, managers versus the a There invested an CLO in if about were by unrealized. -- But

so number themselves again, large, we at selling of have, our value saw, across in and or -- I particularly CLOs. guess, markdown between -- the assets total it's what we And different par. the managers of in the from a X call fair it, the, below managers majority decline is by And

Ted Goldthorpe

Yes.

things happening, what's ratings which manage the watch. test. CLOs downgrade is set are on way up, And thematically, they down incredibly had is you've or Ryan, frustrating So migration obviously, obviously obviously to

a hurts CLO And as so of And portfolio around valuation equity. the is it the said, Patrick downgrades. that obviously, of repositioning lot

the it's So our silver is only portfolio. I only mean, I X.X% lining remaining guess of

Ryan Lynch

Yes.

those What sense. that then, of other CLOs. that was makes the unrealized the there on I as then, I the a covers, some kind guess, think And lot realized so some of Okay, losses, realized as but portion still were of losses in I drove what the well of outside were for quarter the other there new able the think Or the X factors the was write-downs I new calculate to Were those X markdowns -- haven't portfolio? know nonaccruals? overriding you by I declines? driven in been in kind said nonaccruals.

Patrick Schafer

Yes.

it's from mark-to-market I bit I half impact, non-CLO called bigger by nonaccruals, of, about one call the a Mobax probably it's did decline. it, but the think a the little it's [ph], from is impact position,

is continue We near we reversing the -- with we anticipate lender temporary, and decent and feel that the would the pretty kind medium really work sort in to just markdown to quarter-over-quarter company itself group and of term. of that

markdown it's position, and we with mark outsized Again, not significant dollar has a on a So probably the Sports rest that's very of about called we other to kind the of an kind X consistent percentage of have of half Anthem but impact. a characterized really is down other so of mark-to-market. consistent, it's what positions. points is X much of One relatively large mark-to-market. large the just it's due or is sort position, of Entertainment. basis, half And most X kind It's market it just of it sort a

different has little selling decent third expect we'd it They that to the number of And of bit. process then, a various that remainder of loan underperforming in a medium are and within the the chunk of realize will Hostway of a kind one term of near or company assets, the on. to kind in assets is Company the been continue HDC

So is we mark-to-market feel or relatively again, necessarily. it, that markdown credit supposed good is think that temporary call I of most to

Ted Goldthorpe

to the then is one -- issuer. but of those or new is it's one bankruptcy. securities, on one Yes. And for bankruptcy side, nonaccrual the And expected it's of issuers only it X emerged new merchant

-- So to the be line also -- positive that should some barring surprises. stable will also nonaccrual

comments And portfolio forward. actually. So quality I'd in stable big we is thematically, nonaccruals Patrick's spike a don't credit in going pretty say despite the expect again,

Ryan Lynch

Like the or of and slow and you're market to potential potential time nonaccrual going when recover some of there, something get foundation. kind everything do NAV the that? to years? those Or that loans point take frame a up? lay what what to happen the ran about over recovered in Is the or does what like continue status the write-downs? obviously or you start companies upside it kind is perform your you What about as and potential on in senior -- for of do something just to kind talking Or down to could when of you that I the see be, was through of Okay. maturity some environment it getting closer broader as of sort potential catalyst slow eventually do recovery they time those a accretion percentage of sort of guys have regarding that which spreads there I are today repay, on in accretion? -- as those if Or very -- Hostway think, then to you before kind even talked a aren't you certain if where guess in written just a mean think is recoveries. scenario the falls changes

Ted Goldthorpe

Yes.

because there's phenomenon. lot embedded -- bit think a matrix there's I terms mark-to-market of book the a we of markdowns, upside the So a And of in our works in way this think of lag.

tightened here obviously, loan and we today, high-yield market So sit the today, as obviously, recently. have

-- of then lot And just on should activity a be some -- driven is, based indices. levels. obviously, that will by mark-to-market the So its two number of

really are levels. and really, seeing a So levels year, pickup But activity repayments activity in M&A muted this we have in like low. are been really pickup

is huge small There's is generally to of stacks companies affecting thing effect. speaking, that's some us par incrementals are some so companies small existing to doing are. And it sold. incrementals. get these mean wide just is, debt are And these a pull the where pricing I the one

So second but first only lien, even the the lien issue, capital it preferred, not no there's it reprices whole it structure. though credit repays the reprices

smaller And have so impact there's add-ons, when mark-to-market could though no a issue. pretty companies these go credit also on big even do out that

So that good really marked issue, of a par, we're in a at names pretty big discount we've there's to couple generating but seen no yields. where credit it's

for the And things that which correlated of three can all therefore, answer two done the So get a pull the long-term I of over last there maturities. maturities activity a, couple of tightening, lot pops of get they're some is don't have to and valuations your out. when happened And is par of pick like mixture market, taken on is M&A-wise. obviously loans. their should starts number there's easier bit like, tightening because question level up a get mean, you things And market months. the people we've given little we a them Number of a to effects seen if

Ryan Lynch

Yes.

previous comment that. on of CLO. future, understand. predict, about other One the actually Okay, talking comments is but last know I appreciate I the came nobody as we're thinking can obviously out the which about just hard, question I your was that but incredibly kind on I

smaller in in So the another to with see some on having I this because risk small the that of sell CLOs? the of point, the I stuff in recent of there from the and it's second very And especially the for that reason trend but portfolio, and a percentage stop quarter happened to would a some maybe having move to quarter around write-downs? Is know like the back markdowns. is there know portfolio we to continue most want at write-downs expect to things But that, the sort third that CLOs continued at maybe of I or to circle potential your discussion again, it's any could losses. downgrades the Or third that quarter? write-downs.

Ted Goldthorpe

Yes, like first I And know, and to I the the of a done don't in of like, the obviously, that. year. people much, -- economy good question lot short half it's a it are about like that much all your was answer the the question. mean, answer is feels feeling better repositioning

So way but movements lagging ratings are there's been less recently, ratings obviously, a indicator.

have it's don't your I be hard manager question. think to want out We to we're that to we're not we don't of But say took know I the answer couple for like to we a obviously, don't very because something marked because turns it's hard So great a be securities, to conservatively like this know. those just So, honest, of wrong on And quarter. those. write-down big -- right?

Ryan Lynch

That's sure. totally That's fair.

Okay, the I all time me. that's appreciate for today.

Ted Goldthorpe

Thank you so much.

Operator

comes Next Steven question Slater. from Martin with

Steven Martin

would -- A of the the portion portfolio, bet how Of the average the portfolio, is? debt, senior -- public couple what questions answered. have been my your and your asked you would of mark

Patrick Schafer

the $X.XXs, in it's portfolio, is par Yes. I'd to of in mean I of senior representative say which take. -- is probably give total or somewhere the $X.XX $X.XX the somewhere low

XX% of the significantly whole second versus XX the spot loans -- is XXX. our debt I the -- portfolio. make high Again, the X portfolio senior in is think lien XX% of think portfolio or senior I loan up I the as a don't different. total think

lien comparable as first in probably like the a could portfolio representing as a number terms of of think you So whole. that pretty

Steven Martin

a So that's NAV that opportunity why accretion portfolio. recovery in is the you lot say of of there the portion senior or

Patrick Schafer

senior that specifically about recovery rates Correctly, in opposed much as how higher rates, thinking be positions positions. obviously, recovery we obviously, would and it's that's to think as junior weighted senior called because we're I portfolio the whole, out a rates default and towards significantly as in

Steven Martin

sort nonperforming, portfolio which of originated nonperformings, BC partner The many and BC unrealized. purchase you the done you've realized are of old Of versus the position? I chart have acquisitions portfolios Okay. how and how the love them of had those

Patrick Schafer

Yes.

are is different So talking issuers the answer portfolio asset book the it, X are legacy, I of X only minimum, before companies the is call and or them, one various we're rest in a positions BC-originated we're so X of guess, remaining, about the remaining would took we or at acquisitions back a kind are, it again, include X -- we'll like word, but way call KCAP it X we of to and use the and legacy. the all over, it don't between We that externalization going to call KCAP that -- legacy. borrowers call these

Steven Martin

you what Okay. your is acquisitions, had you outcomes And those these versus Or bad part accounting? it And was surprises? -- are this already when purchase underwrote? underwrote you where of are these

Patrick Schafer

-- X Yes, good all of amount I the decent so Honestly, of I X -- again, a again, -- look question. My would is think to individually. there. $XX,XXX a senior call let's converted of are just do never need at X. them One had place. the note hunch position we go back of, the the value. they're in I'll like them, any was never It on accruals fair that note. first real is an not like equity to It would kind accrual X,

credit whatsoever. issue again, So a really that's really -- perspective, that not my in

drops that KCAP over. remaining that One when was we companies. call to, took marked it, X on already nonaccrual, took it we the original is a of down from So a $XXX,XXX over, XX-something and portfolio since it you was position

of get been a like years sort There's in so. out process. of a flushed X small to we've I It's that know, waiting or don't process for, been bankruptcy this very piece state

down you brings that X. So to

took And you That BC time. them portfolio remaining of down company. is the X at over. a it of X. to One I the X think brings were We nonaccrual on

underwriting. in it was of call took surprise sort maybe that over versus we one a So X of the terms our

Steven Martin

Okay. quarter? about the deployment third quarter the is only halfway Ted, talked third versus in you've repayment a the prospect the through. little. We're what for prospect What's and

Ted Goldthorpe

would I to is in the for good very big the getting as haven't a market continue say, last tighter market but And gotten to say in deploy, continue -- time average. little has the a over we opportunities repayments would seen X getting we say activity, like then the probably first literally although a weeks, we're see one-off quarters. repayment compared would some I like to to Like very, pickup muted. -- I payments, X be like

Patrick Schafer

think I the did the May, middle a was million. which sort [indiscernible] It relatively position. -- the is of I comment chunky we was add only additional to of $XX would was thing Ted's in repayment almost like

So works, of way kind to the a of the deployed have market sort lead waiting of as that time. the just a be bit cash deployment, think about is our tend to system that private we and in deals

else could So that as perhaps to books different into equal, expect redeployed of on the investments sort even XX. being were June not various you million $XX all of be that

Ted Goldthorpe

mean Then I lien. [indiscernible] not was second Yes. obvious, a the to state

that can we better yielding so rates. get advance into comparably liens obviously you first And and recycle

ROE-accretive So it it's way. put payoff, an that let's

Steven Martin

-- $XX of deploy sort But expect if are quarter, $XX would some repayments million Right. to would you expect guesstimate Is there million, this have? $XX muted, million. you you

Patrick Schafer

in the to but $XX again, probably probably just XX% million more I'd the range. more pure range, say I'd $XX -- probably range more is in in say not the -- not to XX% the deployments, million XX

Steven Martin

Okay. one one. And last

have between What's do of Or sort increase dividend of wait expect. I December? this you -- for at last exceeded dividend the or would your and to know quarters, has question I the some for rate. least form either earn your now X NII a X we or a till -- you've of far the -- And the end the after You that year? special prospect is last

Ted Goldthorpe

was the is No, we is, way curve forward dividend is I do way dividend. over dividend think last here's like -- down the for the we our obviously, dividend higher X to in XXX for The our higher have longer, market more is policy set challenge in the with basis obviously, the this next we quarter our the When years. points And for rates. getting challenge we're longer. comfortable

up lot. X-year that -- actually has curve So out has gone a

going is our to And sheet, cushion right, a and to have rates. two some make protected So we be we have number sure dividend balance always is to reprice our around of to our want of going huge we're that. bit for CLO debt short-term which cuts increase. a is on an And

short-term that take on-balance debt, So a on cover easily our we our big can we reprice to means have all CLO dividend. that and still of hit big, all we rates sheet stuff if

quarter. yes, forward as when quarter. just rates moving as been. we'll It's are revisited next they every So hard around have short-term We much revisit it single

Ted Goldthorpe

we will again in answer The is, our revisit meeting. our dividend November

Steven Martin

nice Yes, the increase because a up upped been year-over-year last you in dividend. been the the percentage year-over-year has year, now. -- third quarter, until But has

don't other CLOs. you question dividend, up is if One pretty year-over-year flat. on So the the your

realizing losses If CLOs you realizing allowed them the that think Are the non-outside are warranted. those guys are you that that or discount? you from securities CLOs go manager don't losses all think at buy to

Patrick Schafer

Steve, I doing is us than they that sell. this put what going like there way, when it I other it from mean right. don't stuff All and necessarily to going -- there's us they're prevent would nothing they're to tell sell

I in -- them they're which we give a vehicles, So do. before it us, mean, they to selling anything the hey, us We sell. heads going as in would be could. what don't we sell say, could up like things again, up up. But we that these process conceptually, like call But challenging line and don't you very call of they're and of could sort to

of it's advanced tough plans. to for us like So have warning their

Steven Martin

more you're self-manage them talk so Got like future, control no unless going you guys to I'll you it. And to can right. later. All the CLOs them. guys for

Operator

Another in Ladenburg question with from Thalmann. Nolan Christopher Instructions] [Operator comes

Christopher Nolan

basically you exiting you timetable question. when selling, holding portfolio see Just in position? we CLOs? of managers terms a frame I guys it, Any given your this are but quick to have been a time can follow-up you on the unwind on know CLO can

Patrick Schafer

our over unrealized market putting the losses in some we right not subset, we the more just declines so kind or are I'd that. syndicated the do, Chris. is mark-to-market holder, where we of But exit of a kind behavior, far positions, is market that, majority ones that manager's and we which control don't have now the from small again, are at in really Yes. of look things like the very most again, certainly think and say temporal for aside there we do obviously,

our more we for were the hope environment. a within CLOs don't would those small a normalized the equity. of percentage So those control most exit our be kind over But have I relatively in think part, actually of to

Operator

Goldthorpe, the questions over time. turn further back at you. no Mr. I'll call are to this There

Ted Goldthorpe

Thank for summer. and you speaking your again to to enjoy you Thank be and today, end in us announcing joining and the very forward much, much, so of we'll results. XXXX thanks, everyone, look we November when early third our you quarter

Operator

gentlemen, call. concludes conference and today's this Ladies

may now disconnect. You

Portman Ridge Finance (PTMN) 10 Aug 232023 Q2 Earnings call transcript