SAR - Earnings call transcript Q3 2022 | Saratoga Investment Corp.

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Saratoga Investment Corporation's Fiscal Third Quarter 2022 Financial Results Conference Call. Please note that today's call is being recorded.

During today's presentation, all parties will be in a listen-only mode.

we the remarks, for prepared management's will line open questions. Following Mr. to time, Chief call Officer, I this turn Financial would Compliance Corporation's At Investment like the Saratoga over and to Henri Steenkamp. Please Sir. go ahead

Henri Steenkamp

from required like these to cause quarter the our forward-looking do Today, most actual results refer third conference so a statements Thank you. materially projections. earnings our referencing for I welcome projections. to update to important ask Corp.'s factors presentation XXXX call by Saratoga conference Today's with to We recent be statements SEC that everyone We call. forward-looking differ not our could and call. and forward-looking to law. filings to fiscal undertake will during statements Investment includes we unless to would you do

Officer, press XXXX IR our our will You Events to link and X introductory turn be refer Presentation XXth. will section the can find Please website. this conference like is our second for page also to A in distributed & earnings call fiscal A presentation over the would press Relations through earnings be release call last Investor making night. release to January a from p.m. details. Executive to who today Chief I available Christian of remarks. replay our our of Oberbeck, in shareholder quarter now Chairman the few

Christian Oberbeck

Thank everyone. you, and Henri welcome

Saratoga ongoing a upside We to strength for activity. portfolio substantial in recovery impacts, to and future continues well COVID-XX and impact its be the position to companies. very increase be continuation global to performance to and market challenges. unprecedented position feel the opportunities the of the far, and economic in potential continues positioned quarter third benefit of thus from challenges we believe overcome reflect XXXX fiscal fortunate Despite our resilience Our financial and have of

level us a find Our existing business and development performing allow current healthy well of portfolio our new activities to are companies investments. evaluate and

or offset strategy over our Our $XX this $XX gain Texas investments. investments, Heller $X.X has and to four demonstrate on of in million follow-on sale Grey gain equity These million paid our it million to we of how our of realized positions new $XX of quarter the slightly portfolio a contracted this years. our $XXX past and as our quarter-end million total $X.X by approximately when taking realized per gains Teachers a million originated With the on including realized quarter's well. AUM to investment net platforms million sense gains shares, in investment earned $X gains companies, million outstanding $XX increasing us, off realized available makes when or repayments,

recap our the quarter's platform into X%, made our all continue historical credit in the share in extremely the were the We high quarter the The of to briefly past quarters. an investments XX XXth new originations grew a quarter two portfolio again our past this increase performance $XX.XX, on fiscal to also with for of two. and existing BDC, per for this increase NAV this To we bar set added bring quarter investments. slide record being with portfolio while all by

realizations XX.X% million. with total unlevered level and IRR rating return a unrealized fair a of loan portfolio on and unlevered our XX.X% above a investments to in at our our by of financial cost last with $XXX total generating gross gross continued quarter, our QX on of maintaining credit trailing credit XX.X% of total equity on on XX% high XX-month our we from portfolio, First, quarter-end basis strengthen quality XX% the up foundation a value, investment over our retaining of X% of registering current of highest IRR a

decreased the to This management time from from remains under million quarter, assets of XX% year a last from $XXX at last of million increase Second, quarter. $XXX X% same $XXX XX% end. this million our as million a year as decrease slightly a $XXX increase and

new remains companies Our originations since and investments, quarter two follow and almost six originations included with million current our robust end. net on portfolio new of $XXX pipeline

conditions, Third, despite us. improving NAV, strength [indiscernible] and economic paramount balance and sheet remained for liquidity preservation

SBIC was structure Our $XX.X of revolving of million debt, current million of covenant-free, capital term non-SBIC debentures, long-term by end equity mark-to-market million borrowings. $XXX long-term of credit at quarter strong. million $XXX covenant-free $XXX supported and

substantially Our of XXX% XXX% leverage quarter-end our regulatory exceeds requirement.

undrawn total of performance $XX outstanding to are on to for Board $XX liquidity, when will three November financial dedicated of to earnings committed the existing quarter-ended And based We XX, the than Directors per [ph]that dividend portfolio companies this increased quarter to XXXX, than our already that with end. including which and finally, payable support portfolio overall new have $X.XX II deployments million. total performance, all-in million overall our and SBIC commitments liquidity SBIC follow-on our quarters deployed, companies and million and of cost been the XXXX. fund, quarterly the in is January less portfolio share $XXX and quarter-end to cash, be lending available $XXX fully deployed of of improved recent more on our X% million the at by in accretive the XX, The of currently new since $X.XX has cash opportunities

and gain on We will visibility our basis dividends the continue we quarterly of economy evaluate improved on as business to performance. a amount fundamental the

November and a quarter our XXXX. quarters XX, XXXX compared performance as This indicators strong saw key within August ended performance the to XX,

net, versus down quarter, quarter. and $X versus XX% $X.X $X.X XX% Our up this million year is last last million adjusted million our NII

per from from adjusted $X.XX last quarter. last return year up NII $X.XX and XX.X%, is last from this up Latest is last share up quarter, and from equity on $X.XX down quarter Our XX.X% XX-months quarter. XX%

Investment NAV last our of from XXXX. the management This Our NAV quarterly X% year, later. provide X% share $XX since detail more last Saratoga is Henri XX% inception $XX.XX per quarter. in from highest up is for share will up $XX.XX and and per

risen As ago, you under BDC our can we on and quality non no and over with our remains the steadily XX-years accruals since consistently took have three, than the see credits currently. of slide assets more high management

management we team of being capital in our portfolio. cautious as diligently would to With deploy our working to Our as our this pipeline, financial trend appropriately time performance continue and over Henri the now positive to evolving results our available environment. at credit is call like same composition review turn as well growing back into that, I to while the the this

Henri Steenkamp

and primarily from XX, $X.X the quarter, quarter. on incentive year year's level fee as was XX.X third XX $X.XX adjusting was common in year key offset last related and this generated up decrease XX.X% from million by $X.X from NII last This market per XX% reduction The was Across for the from as four Thank rates XXX in million interest other $X.X outstanding XXXX. When QX QX share and in you, shares to bond X.X%. investments our with for QX. from NII The from lower yield year, $X.XX, SAF $X.XX income loss primarily down reflects quarters, three highlights quarter, million last were X.X% AUM weighted up million and per Taco last Chris. basis adjusted and per increase quarter. due November incentive quarter the points $X.X prepayment last advisory to from well Slide for QX. the from and quarter. this lower spreads. repayments yield share of but down higher interest redeemed release capital and for year's million the lower the and baby $X.XX second call and as XX.X average last is XX.X% calculations, reserve accrual gains NII period, interest QX the of resulting both $X.XX of last Adjusted down million Adjusted during and the performance down Mac calculation higher last was net [ph] adjusted non-recurrence result the from for other year fee metrics from income X.X% last compared up share quarter-ended by originations basis interest NII last the tighter the to fees points in

of related million sale $X.X value a and realized the million $X.X $X.X $X.X loss need The million million assets $X.X Teacher's quarter, recognized and the offset sale. million or or a equity to of in $X.X For improvements generated $X.XX realized in realizations, gain the million million experienced remaining third $X.XX of multiples, $X.X X.X% on gain $X.XX share market net operations volatility market respectively, share firstly gain on Texas total from unrealized Gray gain, of was investment EBITDA the Teachers Texas and net investments from termination in tax $X.X The on depreciation portfolio, in the the Company's income on comprised realized facility by our and equity comprises and we reflecting net gain or the $X gains. and of million of depreciation million million on increase per net of revised a a investments in CLO repayment of $X.X million on average and $X.X a The performance. primarily to investment $X.X per on gains the resulting this previously benefit on by a $X.X Company share offset of portfolio depreciation and average Heller credit and realized total our in realized Heller depreciation, reflects weighted tax Madison investment a secondly, Gray unrealized million realized unrealized Company's EPS. $X spreads, partially million unrealized the net Company's or $X.X deferred net depreciation expense million million weighted, increase per

overall on net important cost. than quarter the has includes XXst, XXXX above realized the portfolio of is the year since All equity more an which value fair the remains gains. non-CLO in unrealized value indicator reversed performance last now May and of portfolio and been of of Return for X.X% both the and reduction first us,

million annualized Our for and Total XX-months. was XX.X% year. compared basis interest management from fees optimizations an of $X.X return QX incentive certain $X.X assets expenses, and fiscal and reflecting year, last on total excluding expenses, to last to the financing X.X% during base on taxes XXXX. income represented debt This down million X.X% decreased last and fees from equity average realized as

the management the balance also XX in again, highlighting added nine of KPI that shows how slides our and of and margin slide upward end slides and has BDC also XX has significant through we maintained. our metrics of yet of A net quadruple, XX-months, statement in past still Saratoga past putting from particular sheet and We starting rate to over for has interest the the the XX appendix QX trends, undeployed X%, work run at while cash. benefit quarters have to increase took by income QX our almost the the is have since increased presentation, note the not amount receiving continued

on as and million quarter-end from to $XXX.X issuances. degree of last lesser and realized million five, last a NAV to accretive ATM primarily $XX.X $XX.X the increase and increase quarter was equity this same quarter by Moving unrealized from gains a slide an year, open million

as quarter QX, proceeds of XXX,XXX XX XX/XX million and XX of NAV while up $XX.XX sold XX-months from at $XX.XX XX price average as During shares last $XX repurchased, $XX.X for share shares from of were no ago. per was as were an of of net

You our XX our increased share NAV per quarter, will share chart of NAV highlights this XX which we has past this quarters. added the to see historical

share. as asset per accretive Our been net by NAV has demonstrated consistent growth the value increase

a of quarterly at the Starting per share benefit see per realized gains. were history QX. a per We combined the lower adjusted and interest from last in sequential reconciliation partially $X.XX on consistent $X.XX expenses. $X.XX decrease major and On ranges NII six, simple share base and NII $X.XX from top, to net in in by a upset continue quarter $X.XX income from to decrease income; of share CLO interest benefit slide A decreased and net in our a dilution per you'll fees unrealized a $X.XX income, $X.XX management share other NAV operating in basis. non-CLO, offset increase

accretion dry NAV net the The the $X.XX cent $X.XX increase net extinguishment undrawn and realized gains of XXth, The of reconciles was share offset of outlines totaled credit Moving depreciation loss by expense undrawn net and taxes SBAs debentures spread NII, $X.XX paid were powder $X.XX of and $X.XX Slide on November and this unrealized and our XXXX, dividend between the million. on This the gains related seven to realized realized depreciation. lower for available half $XXX.X in income quarter. partially GAAP $X.XX cash, of to secured deferred which available unrealized of and as to XX% QX facility. slide, on per date. a a us

of level liquidity NII, available it, XX% by external without allows an being very $XX assets and to million than of less of us $XXX that's when With cost additional financing. with million of also quarter-end and an in the to deployed all This accretive SBA accretive. grow need our it fully benches for X%, cash

We credit basis mentioned floating to facility has a liquidity cost and million three years, of including our senior existing XXX our next replaces with liquidity especially into flow mostly our of that and the pleased rate debt conservative with no remain revolving facility finance. by new with fact in within we've four the available with leverage facility past access taking land our is non-SBIC $XX overall points. As rate. before maturing credit basis closed long-term plus fixed LIBOR a capital nature, year reduced we XX the This balance our this within October, and all and account X% position, points a of Madison and nature sheet of facility debt

portfolio XX $XXX invested Slide like of value yield one would eight eight investment and and million XX have cost on Slides in at through now $XXX that portfolio. to we the and CLO AUM companies, I at composition Now, highlights, of or fund. to fair million move review our

percentage our yield core lost BDC first our the first CLO loans is total X% continue our our but This to which this of lean of assets, yield also below excluding as that XX% slide repay of and is on On partly only assets market, Our asset lien tightening this some dropped due of investments nine, you of is a positions. in has mix syndicated high see to quarter. year. total yielding well in as as our out due our how X% spreads can we shift

strong P&L other than while positions, some increases the line appreciation X.X% the In from in that of but dividend in that in income the third income interest is equity equity year has in in of increase of performance form equity also to to in addition, earning due our the fiscal reflected the our is rather QX, income. doubled existing much this XX.X% almost from valuations

XX.X% performance. a yield The reminder, most performing current investments on XXX As is and a currently quarter CLO basis or market points have higher flaw. current. CLO also quarter The decreased reflecting to

by see represents. Turning to million plus repayments, our six for in a $XX.X slide breadth investments of slide diversity investments portfolio new and can quarter, two offset net $X.X in in XX, decrease made companies during million the and On resulting of third we quarter. $XX.X three amortizations follow-on that the portfolio investments in industry in the you XX, fiscal million

focus industries healthcare XX over spread services it distinct and are services. on with software, investments Our and healthcare education a large

our CLO, as part equity finance which consists an included the our structured investment overall important of total in XX.X% about strategy. securities investment In investment addition of portfolio, which interests, is to remain

XX investments. the we of including had gains or combined either $XX.X fiscal sale For redemption years, early QX, past or million from a of sale the of equity year-to-date interests naturalized

the historical long-term NAV from gains to carried two Saratoga of credit BDC. ROE. due management helped million I financial accretive And review. we Grisius, capital realized our reflected of of forwards realized in from portfolio grow took quarter gains over unused Investment our NAV concludes an were consistent over up over fully That $X.X to market. This to over carry turn that and is gain total for alone, call my highlights performance of will Officer when has and the the loss portfolio quality This now healthy our Chief Michael realizations. two thirds generated these were our the investment overview

Michael Grisius

you, update, current our market COVID remain a aggressive, on were and portfolio perspective strategy. borrower's Liquidity exceptionally market. the couple to the very be investment our Thank and they of see take state a where were last we market, robust. exceeding of then I'll conditions continuing on to and Since pre much performance conditions our increasingly comment minutes describe Henri. current XX,

We ever down and greater an restrictions. and for in have most capital levels and yields especially such leverage seen as credit high investors to as the tightening and covenant deals among usually we've going High looser leverage activity a significant and pricing transaction unusually There year-ends. volumes timing close into spreads pushing an result. competitive aggressive ways, compete metrics is posture is overall, quality are M&A demand pressure multiples to other accelerate increasing seen deployment for

Now are of disciplined part aggregate and of and still market that requiring levels most thinly said base in lenders capitalized covenants. in staying the wary for are of terms minimum our deals equity reasonable

with in high models find with and shortly six us bar deployment remains this a past investments as quarter we pace. previous strong has for been continue continue borrowers, of underwriting fiscal capital discuss follow-ons strong calendar Our XXXX will capital with many to deployment opportunities sheets the business quarter, and important to origination balance year be we usual. deploy demonstrated the as strong as record before. to existing Yet in Follow a nine avenue on six an with environment

close in we platform onset have teams. portfolio quarter-ends have new contact engaged We fiscal be with portfolio and actively with and with to remain notably, the since pace important in critically in follow-ons. invested we pandemic. investments, two continues companies XX this management nine to companies new Portfolio management further seen the continue our investments Most and subsequent of our

the activity. that We to in uptick themselves generally general they positioned have economic have benefit from found

according terms. portfolio payment loans their the of has our paying in As are our to all economy recovered,

addition And not have portfolio. we so non-accruals whole new across zero COVID, any non-accruals in to our through having

that this or certain enterprise this portfolio the assets recognize industries cost $X.X Saratoga's has of overall generally of value depreciation overall associated its by basis well We X.X%. portfolio historically net performed attributes quarter, means situations, gains fair unrealized in firstly exposure. strong overall XX% its more have no debt million in our direct in our with have bolster in exceeds energy than of reflects supported last that strong which our values also unrealized COVID portfolios We we the and now commodities durability. And year. realized recovered by that stress in performance believe

the In portfolios that comprised businesses a have and historically of revenue addition, majority our demonstrated strong revenue that of recurring high retention. degree

Our understand impact for eight gains approach our and shareholders rating. you each as long-term, at shows risk rating at has this resulted and as number credit with deeply of Company of possible appear the over strengths a cost. reflects long-term realized respect characteristics. net credit our a that XX% have percentage COVID our the BDCs space to always our a into adjusted or management endeavored underwriting its on always durable working in XX, investment with of being sought top the returns to of paramount our businesses Saratoga. approach accurately at deeply the slide business at and capital producing at as We're as of creative a to had the the been past business portfolio list of model. to portfolio can top of internal and thoroughly highest directly only assess three And years. A ownership its the remains our We and underlying best the of quality order invested strength positive objective performance the over of the We see focused underwriting. with has quality approach BDC on stay in the strong We portfolio culture

from see portfolio last not those yet additional investment. can in past quarter-end the calendar strategy never isolation, has quarter, possess high modest and of our that our a strong upside our industry Total investments. the profile may Gray overlap co-invest provided maintain increase are when but requirements for equity leverage our This exceptionally As opportunity attractive returns levels volatility, with been teachers our reflecting QX also for attributes on strategy of significant strategy capital our that with investing our companies the focusing not portfolio a in portfolio from throughout, remain last Texas risk demonstrated X.XX confident of we're meaningfully our of yield is at in intend believe protection the between QX it enterprise debt the leverage multiples equity was we only been portfolio have that quarter this equity as are Heller slight of relatively meet to primarily overall were value the has in given equity businesses platforms although potential, that and experience leverage levels. profiles increased those again historical existing strict realizations, that there on that underwriting able to new consider we now our times companies from looking business investment and to businesses leverage selectively served slide unchanged to rather continue through we equity attractive have we we our ups dollar when this and augmented relatively XX, at risk the co-investment we credits portfolio, as the where will you sustainably and exceed return models our

increasingly the slide competitive ability this market illustrates to consistent addition, our dynamics. investments despite and In new long-term, changing over generate

During calendar the new investments. XX added made we XX first follow-on four and companies quarters, portfolio

deals. team focus Moving become skillset mature relationships that business on on has our significant development to new and experience our new sources to led have slide strategic for continue and relationships to XX,

issued pleasing on showing last generating the of goal. XX-months year's quality remains especially efforts pace, attracting deal during sheets to recently issued on this two higher more last percentage expand progress XX this development COVID, to to is half we but the years continue There environment, past well our notably our of the to Most competence that sheets has that as focus reflecting the from give are of we our over term as investments long-term. are shots dropped number XX-months a due as and grow business steadily of Company markedly measured line the portfolio U.N source that is can us is robust, XX term and more from What our top notable that we but relationships, opportunities. a formed new seven are factors Our efforts. reflecting almost of past number us in over up newly

continue evidenced grow our we First, we relationships. by to reach into made several newly formed the with marketplace recently is investments as have

Second, established a relationships active that term sheets we numerous referred have to for of of equity issued, with look involving developed the XX% deep, or long-term and as firms firm. financing; private source transactions us

Third, experiencing growth within intentionally are And to quarter-end. investment trends that supported secular see industry to expertise. long-term in we have this we plenty of opportunities origination and is developed pace continue segments which subsequent by

had companies portfolio new two nine exit new follow-ons million $XXX executed have of and for increase one million approximately of $XXX net in almost million. We originations and repayments in a of approximately $XX

realized million for a of gain investment on Heller combined realized a quarter, our our the investment million Texas $X.X this Teachers we As QX see is a million XX, on IRR of remains on of on realized you and Saratoga $X.X can In XX.X% investment unleveraged solid. realized IRR investments quality gross our by credit management team realizations. portfolio The overall slide $XXX Gray XX.X%. made gain the on sale

gross unrealized million more human our on chart believe view are the is of in-person current SBIC of remain only performance. XX.X% and you fundamental do their CX is which investments. long-term yellow of $XXX levered on X% could investments total appreciation above interaction with not right, on largest We overall its both unrealized took two now markdowns, Group our see rated combined and our remaining Nolan changes almost value COVID due total to IRR Even the our management. those our U.N, remaining cost. and Saratoga since portfolio investments, on the in over Education dependent The the are On BDC two the unrealized depreciations weighted

Our realized investment exceptional approach has returns. yielded

our slide XX, is see license fully funded. Moving on first to you can SBIC

of our has million of team and we future primary funded million million SBIC the like of of times Saratoga. SBA of due levels There deployed. intensely been review currently of $XXX our high market, our equity concludes confident over CEO, with focused license $XX second million Our $XX.X $X This and are while the diligence on underwriting quality preserving and in of ventures been fully asset which is already cash ventures equity available remain against remains and portfolio still the both and our to COVID to market at my value portfolio this remain Chris? team the and now. too adjustment of for are really and impact I'd the to quarter has of the seeing against overall we turn call continuous back that subsequent platform with itself durable XX as and equity. much the And especially and last resilient and year, When procedures. comparing such focus, our strength proven the Credit the underscores way be world in flux, have

Christian Oberbeck

the and increase XX, last XXth, Mike slide a November XXth, both $X.XX considering quarter-ended economic XXXX. you, a reflected cent declared Board general at The Directors per or X% evaluate on share from dividend $X.XX basis, payable of it's to the This for will on factors. January on level a of outlined Directors Company quarterly Thank quarter. dividend the Board least continue XXXX

includes capital appreciation dividends generated XX-months, above XX, XX%. return last XX% index Moving for total returns has of and BDC which the the our slide total to of both

year returns. Our longer term performance and slide is three outlined next over done our five

over for the returns in our of all respectively BDCs us place XX% five top and return XX top three XX% the year index. exceeded years, seven, past of Our the time return three the and both horizons

is past the performance return. index year and While can further XXX% specific metrics. placed XX% On the our you see five the the certain greatly our in outperformance exceeded industry key slide XX, over to years, of return context broader

are industry which performance NAV consistent. continue value. the on top return our the both long-term yield of We AI on growing per focus equity reflects the growth, share dividend and and at to And and

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our Moving base, quality are slide of on of Saratoga designed performance investment, competitive BDC markets make We believe on to that to our slide community. size adding is capital in this institutions. drive and highly investor XX, the characteristics the our initiatives discussed a attractive outline that to all help will the more call differentiated including

include the highest characteristics our portfolio the of SBIC, X% grade industry and bond a is receipt liquidity, of management a with private ownership BBB+ sub at and our cost cost a one support levels XX% active long-term liquidity public and make rating second maintaining low and access of providing investment which investment differentiating issuances. creative to Our license in

NII on us share AUM Putting long-term risk return of and per earnings attractive historic Solid share; and industry equity growing accompanied profile. historic strong an expansion at yield, per NAV High-quality of by top both. & for NAV, and and industry-leading the the

management team to challenges remain tested quality investment near the our strategy In again cyclical addition, battling for In for closing, and standards minimal experience in liquidity the would will service all and I credit in questions. industry. And that contains historically oil current and strong open conventionally shareholders time to the share balance benefit, gas now our the historically that through including thank will to would and their industries, support. structure confident capital Saratoga portfolio high long-term. and to like our underwriting We well call ongoing like exposure of and I shareholders in future market our and a environment sheet

Operator

comes Alexander with question [Operator first Compass Instructions] Point. Casey you. Our from Thank

Casey Alexander

you this facilities that that a at Hi, job, you. program still did. traditional for than Saratoga Encina from that I questions you redid does you doing that would bank facility not? banks line the give cost are significantly guys lower you finance lender traditional than have lower a credit are good rate facility What smaller BDCs credit have for but first credit do And I this is are that few guys a a morning. are there think great Henri. My but one the quarter, Henri,

Henri Steenkamp

Casey, we constructed in have important good sure. balance and very way. intentionally Yeah, And one a that obviously question. our this a it's considered sheet it's very

So, have in them. that the generally have most, level have if covenants and banks credit see that all, BDCs BDC you not facility -- traditional covenants from that

quarters tangible but cash the which and constructed very So have put cetera. balance as multiple triggered And facility facility the again, our worth, if can to the covenants. structured you start, had important SPVthis that something level similar triggered was from the EBITDA, and it to it available net Madison us. bottom we a to we at specific paying over any an market et We've of well, could took facility provides any way be the time feature it, so at is because risk as as a us the going from in the up specific the not doesn't itself. if happen covenants either balance that get facility, when a And Saratoga event was have could of SPV that covenants. lines, that was just really, for we this things to that, negative can that really our this, risk, these BDC need, like flexibility a BDC-wide like business sheet through potentially that whole put – to, have edit firm-wide, in It's as sheet franchise, franchise doesn't are the whole repayment a but yes, entity,

have because capital of And to. for that especially this come us in choosing achieve capacity want rate goals cost even our that, really to and lending much, we us. still enables SBIC with it it's so rates have this facility higher price unsecured So structure the down our above we

Christian Oberbeck

as just the Yeah. little Henri's April March of to in credit, the dark and a of with them 'XX, thorough well of of capital number had that and on formula If substantial here to that could a some -- weigh very up I explanation. BDCs that to and remember were lines back some wound of just 'XX if you probably ones successful Casey, their make there add very getting very low-cost days concerns. modify time, the didn't any contributions we those a facility avoid lot that of other we have a Madison moment. to and default Obviously, facilities we extreme worry in structure capital our and their we, to of about important that had having really at At type we were moment, had to concerns always and us. the something about but and had those not concerns, out defaults things been that's of or very

point well financing, of that requirements. taken with is lots Your but formulaic those there cost are lower to approaches come

from our and we calm we're and down also some that what also and sense ones, may Henri dark and down second through portfolio insured to built at just good you defensively but that. now, in some like in to us very some massive mean live offensively. in lots of think were like able forever just by time, unfortunately being continue in more mix your massive really that really quarter make we but we've point the having environment have with covenant reason of right capital hard era that and And as working is, of against there's sure then I want like relationships period us whatever of There's for make to structure in adverse some to that than beginning spike diversity. and a some the facilities very ready business. allows able of very things also investments 'XX right an outlined strong very spikes, it keep I and made not very the we at do a that investing they been only

of terms of costs to that paid kind dividends but trying but in think also facility. at concern to in had in really offset what were Saratoga than the financial too structure quarter we of it, do to that has behind time more we're of way whatever enormous thinking that because our make far optimize that's were able And go safety again, well point financing, not into cost to of about and taken and so, And we it. optimization your is, investments, we excess in to that point able we

Casey Alexander

for My a fair made in back in and million fairly you quarter. Mike answer. All that this the right. fiscal of use of Henri, Thank sort to amount one kind aggressive again, quarter, but next is for quarter, third Henri the $XX question an everybody, in of ATM you ATM maybe

there less in moderating had rest you you that So, the I that were you use pipeline nuance But you December particular your a what the can a ATM, of rate, in assume originations as be the aggressive usage some would be quarter. because you deals lot going in that as that, like characterize ATM of the an of ATM to of around year, would over rate, quarter normal the the just above get closing this the knew in normal that of would usage see clearly to is I'd sort of happened.

Henri Steenkamp

Sure. a important a Casey good question and very very that's one.

can't actually below and time you continuous, raise And, I overall market can when of like. you're there's because level, the at, periods I the, conditions, where been raise equity you think, in then equity where of time time if periods not NAV on periods you high look has able a BDC BDCs of industry, very raise know an there's trading have expert And longer and money and the right. it, to been money. capital

which of growth growth is our trend we on is are at horizon, long-term significantly relationships kind and our broad-based building. looking are broad-based one So, level up, our a trend,

flow. of lot I think of developing went through as we're relationships and Mike a lot a in deal his presentation,

month ability the our our think that flow, our execute. but I relationships the not level recent to deal also shows to generate only of

run, And so, to equity and natural the market that our base the stronger robust growth long our a inside growth we're more us in. is objectives and achieve in believe important we for

it's And available. to really equity the of receptivity market's so part advantage is it is, of, taking raises, when,

we into do in the to forward what And originations, we it next, originations as of terms more thing, what X, of, this gauged, receptivity. environment next, a, we see next at, over and quarter set the equity really our part driven years much this as to X, tying our, not, out we going so it it's broad X market of part a weren't to of really of we're going levels in terms So appropriate going that by we, of our how X, kind one was structure? be be of specifically look of intend by driven capital future and it's to are

Casey Alexander

to themselves bottom potentially it does ask and give going question so does Okay. available term it of you much to ATMs shareholders Are that I'm is, on middle to for And the of bottom appreciation we and, retards for something are, the your and lower kind are Well, you of you, but your, of be yield Mike, you out? want that what of at moving is stock or become my, ATM as the next us into paradigm telescopic near compression just, I don't that, yields liquidity, aware the that in have interject potential my time, going well. which sort that, go. new it in how a out that, would goggles put try does point market? embed that feel to the a to for to spigot that far supply that's to

Michael Grisius

our I've compression Gosh tried yield years, often, question if boy. think ball. is about look want seen I I've, think forward Oh certainly a sure that Casey, it's things book we and and a and deal this capitals of yields the that way we very And over deal to And for make and, down. Boy? new had somewhere shareholders. eight that and the for deploy of at north the a the thankfully, that a macro I let's is capital which we're learned in at creative that quite, that's seeing come that, the it can that's past from level, opportunities, as us quarter, level. years, look, for fair of a our percent. averages, where to shareholders, one look that, we've crystal X%, we we look say half can that and over is, creatively way cost if capital you plenty our of deploy We eight at especially

priced we our this hot reflection are now that that institutional there to of And way bonds in really would scare, less it's markets Henry except downturn. a where there sure. in that capital at such markets, general, hasn't are cetera. very people deals too, never mentioned the the that that's really accretive I been X%. a the a shareholders. where the can et for say That's the think I period, one cost it's, are massive COVID we're COVID right than disruption something continue there where SBIC our of being in in in now, in and for doing is In a do saw economy. long for our,

recession in when the team We number a were of through probably been but management are competing people with last this has when, unfortunately, happened, cycles. high school that

careful doing base our making really at so And you money credit been that sure not believe money. about and we're, capital by we make far. that preserving we're We've losing successful firmly and so that

in yield where So of going going a, that's markets. to long-winded of bit a we're not position of we're ourselves kind that to a way in a stretch saying put for hot

profile created to make get your for a that quite portfolio, but that move. market you making risk a X and that's that be spread the your that's at case you've where the yield. end wise typically your not got which BDCs sure we You've assets certainly getting of so saying, in because in on would got a a continue oh shareholders, you to, to wouldn't have focus And expanding if quality yield credit mistake in, this need doing, best the to considerably, be up is

the approach that that's So taken. we've

just fortunately way account. comfortable into of still deployment deploy in there get our shareholders. also spread, that's as of but mentioned very that's what balance typically we accretive in be in very course, without capital taking The capital I comments equity yields of make done think that XX.X% our getting and are not I a, much our accretively by investments, we're that the on on co by could beneficial a I we terms we've that which sheet, and realized more compression investing that been constructed returns on in could we've the over million in investments way to happening, returns of equity $XXX unlevered

where time or perspective too or, hopefully gives think your it, hard to try us of about or, to how for spreads are we predict So that go. much going to

Casey Alexander

you the that, response. a little forward Okay. because call a measured a and playbook private And has equity playbook, couple Christian, going feels To portfolio for but bit, question the Saratoga what of when when I years put that one just the this years a for response, and inconvenience. rule a ago an sponsors a almost and you're more do? here much have And are Thank a playbook I have is work apologize And we and the a you kind and, I'm you of you hit, guys more to playbook, just COVID course to like Saratoga if inconveniences co-opting great time and couple that the COVID is shutdowns extent on has hit variant and Omicron there with were now dramatic of these dealing ago you're the the years, had companies the have variance company two at a Mike. offense. know

Michael Grisius

say guess Well, were where things. I'd a that, exactly wish But I, Casey the couple that case. I

marketplace of the all to what stock COVID reminiscent decline dry of of and, the I around up I there's whole sort system, completely XXXX, and have in when, would a whole were shock a I the that it, the mean, like in and just mystery when when, think XX% it was when there massive when amount to market COVID were the black as, things massive do. hit when, a this unknown. tremendous you thing fatalities. death? of on massive liquidity was the of things going the bunch We mean, know going plus and

herd There's a have immunity. a vaccines, a as there's of today forward going and on think quantifiable, risk more you fast of, still lot experience. Omicron. that. there's I everybody's about there's of of I and think There's of things fast on as we learning sort that's there's that to furious. manageable mean lot kind if this coming treatments, more the the the a less real that's made will a more I sort mystery of something I mean, lot

at we not saying is that playbook moving anything the thinking as I for on, I'm certainly I lot the in going the expert viewing Pan mean maybe data. that's there's have on whole get in with we're we early not so to So general a line have I just that to endemic. on, we're mean, information that the but say to say field, that Omicron of that, one hand. as and to looks an it if we do we're not Omicron have something marketplace mean, position around this is through

where acquisitions all we back sort but up how but, of incoming rescue And think the, terms we're to our I that capital of to so of of offense, do and everything thing, in dried structure of our XX kind the time the in, about where now again, terms response going in calls the, back us, we're kind in environment an massive growth. playing

obviously you in did I think say were you of of all portfolio financing metrics, also pretty is advantage those financially, we companies reversal base to and at a we lot the to we I than would points a and think bills better. moment, the if we, then. a look using of types is in try that so and, position we about our we is knowledge stronger structure attachment world future. what But us take also, as back credit at better. just we're there credit know and to if that so our responding back look think And if types I a our in the we're I us, protect think the then, you but and things we our feel of have are the yeah, And is presenting all things And the market good

there's something moment. against that's think to tools the more better apply I understood for

Henri Steenkamp

that the me a Casey, a the one, environment greater deploying in we've in really plan the and just recently COVID that of reflection just Hey, jump of less investments capital pace that help Chris, thing game having the little augment success think a reaction let the of having to a made bit Most to it. at one to, around franchise we're is the over about in a years.

beat, of built is One deep and things proud support we've some that very the we've of we relationships we're very companies. portfolio capital invest that and with with we've groups done their

well financial, set. And is a activity doing of So this still underpinning about to existing growing owners great a, exciting think in a especially that really successful environment really quite an those come repeat in see back to for And it's we getting and been our really of, of it's relationships. What's these the Many a a, find on we've sheet. we been can been also cause from more know is businesses takes much work there's follow us. what our them done now of where And good do. that of going back relationship especially lot And we're for our in is us a quoting been for years. relationships. you few do we've us support that to what business and that, balance while. excites businesses that and, that there, And for of upside capital. vis-à-vis, quite years ago, we've for We vetting avenue is growth of is support

And with had new are them eight, companies think to this past of think year XX I to, just relationships. we new portfolio reiterate seven and so I calendar

if making apart And portfolio had go a are new you to have related and and to companies few from continuing the that And wouldn't just do so back were anything relationships. franchise we of new investments we've to years been the seven separate that's a, building in with COVID cetera,

Casey Alexander

my I for to wanted for really in questions. to about. that really, so analysts apologize case, Guys, taking this you know thank the I having other but was questions, this many stuff just

very thank you So

Operator

Our next Sherbetchyan Securities B. Sarkis comes question from with Riley

Sarkis Sherbetchyan

here. Hi, question you good thank morning. for my And taking

remains on look your for this Just million of in want get the competitive we that of of aggressive and, balance comments the environment, multiples that sense in a at your understanding comments it with to $XXX of in to tighter pretty leverage you market in high originations and get borrower's just and, underwrite a, environment being, how, there kind this if how the kind a balancing and spreads, kind are bar you, just the, you especially in wanted the general? maybe being relative between and, out a that given kind comments new the an and after quarter mentioned the in to

Michael Grisius

the growth of to Well, And years. has that and it challenge sort foot got I, term, the over brake slow face the, years. to I it's think high. in the use we trying always one our the the growth, gas one off steady and really gas of opposed it's the one good the the business. one underwriting over Canada job the all the we've to keep really manage and it reasons done your but on it trying of gas I on it's, BU the we've as the, time foot And It's our taking a always bar been you're here, and on brakes then on

going we think of down deals. mean speaks right But that doesn't track I, far, always in deals than we far are, of the for record are itself. doing decision. more that our turn we the marketplace It And the players ahead do. many and to continue those We make some other

I deals that So changed We we, from or we relationships in have but bar quality seeing not marketplace more marketplace, a have most at for we before. our have more think seeing this and didn't underwriting deals importantly, are certainly in all. this we we're deals seeing we're main discipline,

as now bar a that of net or as result our if higher so capital the to, wider cast keeping enabled underwriting us to enabled net. us deploy has to, has while it kind you will, been. same a it's it And to quality And more a

that companies. success sub size, point a ones million started We off of businesses. deployed the look follow has us but us. most competitors just our larger we'll with point won't on of product, a a Many that's finer that do you XX number a an quite been million the, or our there. deals post I avenue deals really at make want that portfolio smaller. to recipe more if we'll was quarter existing Now, XX I, do to for end the put of bit to with are And capital really for work on extra a of get that with that good that time. investments. Many were deals that do initial in bother capital for to over And deploy been

little, certainly a companies. of, and a M&A portfolio active that's that and that reflective more is end post one a little quarter even of existing So is super us a lot market, deploying there production reflective capital of less which

Henri Steenkamp

could If add that. I little a to Yeah. just

that price the there's less things in I risk. And, credit think a return we're the a super I that of our and in making adjusted, and a, adjusted you a, is I, rather the been, about throughout that correlation would equation, has and credit first beginning waiting as underwriting of very careful we underwrite guiding more one process second. credit guiding price price. think that I principle and than from for Mike have a, there's less has And, but very risk And, solid price said we will, recognize think we've this. us been risk for we, a been sure a principle

relationships quite a whole quote the articulated, a that finance in of things quite, think that. it's don't value a not as their pro our its number we process. so pure them though It's with many like micro partnership it's market, there's terms even have that of It's borrower's there's they're a deals. price it's companies that, auctioning as execute There's So, I lot not on service, confidence. of to a add lot them of helping

So with, we're, to most sort what if a we're we quite of do a we have able will, pricing, do, for what added matter. that in, of value you with

So yes, we market. larger have to our reflect

quality towards we're thought to we're that even with and going reflect looking quote our is nature lot leave our borrower's in But market, and is the, within you I the again, the providing think shop that quality the on a what of deals credit the also side circumstances selection sort in a the that of We at. there of of it.

Sarkis Sherbetchyan

in sectors has certain underwriting you've or and, any one think at have, XX looking mentioned willing comments maybe look that from, shifted and, or, I today in I table. size from around anything the, in That's take or you're you're go, or on final and very the you. that? helpful. slide been if industries that to at I Thank where versus and industry If invest at where XX industries we snapshot, historically the per and more And, you one my think industries in look

Michael Grisius

it's Well, number in, a one, teams. and we their slide, good compelling industries lot The, the that we're credit markets characteristics way looking that same. operating their sticky but, are, I by in they're and they're common their think is of are across the that them businesses notice a a leaders a there's positive diversity, of strong customers really still across led to end have their, management in think value offer really for you'll, that field. dynamics that proposition in

lot but a industries, And characteristics. can common be so they have those they of different in

they and the just can And SAAS industry, we you that business they're cyclical addition areas very And see that us to elements But models. that, capital deploy you'll those businesses We that been more because want those to in expertise in, are sort have less five and business productivity years, SaaS in have in a level greater generally are invested in we have industries outcome effort we we a We, there, are particular in a that that all there one distinct to a if one. generalists those we expertise industries areas to last because model over business under those is those notoriously in but still described. of end a three less the healthcare but, very, education, of and, to more respect. not generally, to they, bring of share always or they're in continue and, but that markets capabilities I a then strong greater and develop made feel have see than we've in, unproductive have broadly areas. nonetheless, and let's shouldn't always, markets underwriting say an end investing I say take going and, for you're developed

greater if is that, way the of general. in driving that's and SAAS, business take would That's true offering. coming is of that to end system model those lot that costs in so you're a say markets productivity And particular business a that's I a out just or what market helping in

direction well do economy of to the takes. generally, going You're regardless the regard the,

gives we it about of So that hopefully you as sense how think a well.

Operator

next Our Bryce from question Hovde Row with comes Group

Bryce Row

process Thanks. ask differently the bit into kind quarter to already given of about might a point to you more pipeline over having wanted in speak more and, be little been last done trends you to Good does think you broad Mike all about morning. have forward. of kind from origination going post booked type that activity you business from, quarter you, closed activity if, maybe around the an, question you what end feel a, opposed up a several a activity thinking then maybe annual follow to post as Wanted, here growth think of that, activity years, about maybe how think a and based building translate end, mentioned get period the the on been, or development could what the or from broad, that broadly And kind basis, how quarterly? forward to portfolio for more,

Christian Oberbeck

just originate we that I, quarter I'm I'll was the net here. I the you the on our history. end think why ahead, then it no, of at and, that Mike, extraordinary team the originations did Mike, of we the, glad level, going high doing don't to before pass in Yeah, level jump go obviously

they were able and both execute in were a that our Testament in, of I able originate to to they a to short such that think all that that time. period all team it's

to that. to think, level I able the and proud gotten generate So we're having very that's that of something being execute of that

of of of, you franchise. sort So proof I our if will, important think that's, capability very of a

think that doing what capable now. So, we're of shows I

on $XX or XX to our love those? we're the One million way probably coming and, quarter to able what week do We'd to or Are of cards not looking of do going those, not that's is was things to any week. our the in XX so do now. month but of given predict what's any of we given any right one weeks given

fits our do the after and it is a a pent happens standpoint and much theories it very business, need to from the so there's time. ready right happened 'XX lot of robust them, There's willing there right? a And, market lot now? to you're proactively cause of then. there to you've heard of is was that out and criteria demand in what of we when available. it's for up tons investment so from very robust we, be is what it address go So, need able react to be and Why Part

And way tremendous old. companies And years doesn't, demand. to look and be factors that so to so, in and wanting And to off under And there's if a good trends it sorry if I so of from all have, records there's for M&A, cutting that take this right I'm Mike, to XX the, if and, and, is and, continue to and, we're want the to money be a well. off. then demographic baby why physician does boomers the our it of it, the comes And just some many most of we, not I will. done I'm changed people be threat lift the being try there there's be can that sort and fire that. there's That's time for broad that's a prepared kind things to set changes of there's something kind a okay, if saying, going going senior what handle able to of fever, with get going smallest now. what execute And, maybe predict. the a just be let's tax in our, robust might year in on it, the mean, of economy, on contributing dissipate. as you is then there's table. so to and that to But do so before pent environment some now we're us if deals we'll antitrust, next you and, sort Washington. There's in sell we're many at up position in M&A so There's

think had I something you, to well. as say

Michael Grisius

no, that's the, terrific to the it's a No, perspective. macro describe way

about else relationships. all equal stays we've about we so good We made good and infrastructure where environment investments is feel the And pipeline. our it that the macro if our feel

hear ask ever. cause you capital way borrowing So don't think up to the as feel We, the and I'm glad to you trouble. that, very greater macro first on we in capacity certainly is That's get annual quarter question it into more our an the put quarter investing invest about basis, we're, changes what been has to solid any probably than we trends historically. don't

says, you living. years an can't cause to what do a just actually of going quarter we deals. who I was I'm investor, no kind what right? think as not one a not just deal did remember many where ago, but then I'm from seeing we opportunity, Somebody I did that's there how And want that's for if good

our deploy always we of market as our feel But to, investments that made where lower we're related capital we at we're So certainly in bar. going to to decisions to underwriting the about going we ability be and we've that than historically. just disciplined given be and good respect. make probably trends a pace any bit that be have to going greater We're would to not watchful

Bryce Row

yield to the investments have revenue that of that that's booked kind like in and appreciate those also as quarter. kind comment CLO any curious how both That, last now maybe on Okay. the here volatility the side Thanks. for, it you going now, it related and half? looks some think things on, about source year, that I'm then around approach looks earlier you a your seeing statement. CLO, that given the move of item perspective wanted the preferred of it been in certainly forward yield assuming market, about over question here line level the Henry, like made just helpful income dividend the of there were just that's you're that repaid, another much that, of guys right equity around more year and income year have the the you seeing to and and and, has and that, as the Henry but a is dividend is, get of commentary income

Henri Steenkamp

so Bryce, Yeah, paying that the, during a during, that to yes, repaid had sure. question two was your quarter we have preferred first income investments this three been equity of had think them I quarter. and one, one the dividend previous

wax are equity to investment it's pays that still that dividends. down one we preferred investment Artemis, So, has

for on still but preferred not down. comes significant that will dividend income the other is had material side. and So part, dividend the you, most as you're from see for odd the, occasions If one income line going investment that investments, you there dividend in some to from that see rest income equity other come

more I what So second little was that'll on question simplify was And CLO. sorry, know that's secondly on, that was line same bit complicated. a the question cause

Yes. Sorry.

our it. the on more interest period CLO there the drives go quarter basis. also market a increased the One our lot is versus and one that So points were valuation average curve. equity different for the effective variables timing could is cash in the rate from a that a between as assets two our and market that income library difference CLO impact flows perspective. quarter really where of was which our, resets impacted the changes interest on basis effectively creates the performance. on of then valuation it into the And through variables has LIBOR that And sided reset a weighted basis LIBOR quarterly change our the, monthly that this a impact the on XX time reset that the assets the liability

flows a we that also default trading And we couple cash a are secondly, created that reduction in of more investments below. because then So deemed the because LIBOR in that curve deem were our, change. saw

it's are they in for mean I XX purposes. for purposes, think doesn't default as just just in evaluation being default valuation

quarter, so And saw assets those and from a market an a, a perspective. in again marketing perspective during from in, the increase we

the average which combination life flows the the those the cash, to the of decrease So down. drives cash the weighted interest projected then effective over of CLO, rate

the the, could, the in over months a that, obviously rate what So as And does obviously could interest drive market February. depending the time so now. on of really the through end where really market not test sort market's that quarter end next in in, relevant of the again. the change two as doing that February the in the is the off it's at what of is point It's at

Operator

Our with next Mickey question comes Schleien from Ladenburg

Mickey Schleien

in investments Yes. your restaurant question can and difficult the quarter that Mike one Good morning, we all Perhaps of which to sector underwrite. everyone. very this was know, a for LFR, as be and, in is new

how much deal? describe in this leverages to you there what LFR attracted could particular, in So you and,

Michael Grisius

the, in in of around a the, than its been cash-flow Good and, is are the restaurant most This a that the its in high. much that's good companies, these economics as debt. have get spot, that we good very bar in relative the unit a a in say for the, into can we morning, the, is don't And particular Mickey, I case, to sheet majority awful an lot obviously for details the of since drives the a was to franchisees and obviously the, balance that sixties It's we franchisor. business it's business But, on this private too space. details we're underlying great the space get are competitors of of comfortable questions. stronger so good did of spot underwriting of diligence its experience very business. our thanks quite in successfully the the the,

leverage of you generally deal at the, looking and low to see typically franchisor relative multiples, franchisor So, very in of the get leverage. a side scheme where it's the on it's much

Mickey Schleien

due just you timing, when, much Appreciate suspect did investments your but so quarter that. I some you sheet. ventures balance of but, it why to fund Mike. curious, have SBA when may be the cash on with Henry, this to

Henri Steenkamp

a outside to we We but SBIC balance. always a outside good It's at the in this once to later put try the cash, the funding sort we of versus tend SBIC into question. time, quarter, have same SBIC. balance can't like you That's excess when you the SBIC investment the fund had the

get And to on, term lens, make term. just long with sort of term try going on to we're funding. short never decisions the focus so on where highest the a short return or we over we view

much had into you that's sort we in highest so excess And so will automatically to normally, know SBIC balance cause if where this you efficient just we cash, of return. cat, your the quarter that. it cash, a always if Whereas go don't have

Mickey Schleien

item? And for Henri. Can a that professional that? you, what's clarify fee mistaken, reversal outlook what, just was Thank you line understand. what I if the And Right. Henri, not crews. for there I'm

Henri Steenkamp

we've to year, of expanse also the the, as optimize not and Sure. item actual growing side the office but on just on, and Yeah, actually sort have origination this been been on building the side. back we try side, always costs the, and we've we line growing,

to. our processes and And in so some optimized accruals way our were we've our vendors a where optimized some they of were of needed of some higher than

the some expenses activities first of reflecting And so year. of we months the had or the a of the release over of sort so nine

I had definitely sort rate It's is we accounting, a had quarterly is, forward. the, across and was really going But of more some run appropriate legal quarter sort release think us use our, sort forward valuation. of run optimization some we be and accruals to the in in, to the probably it prior a that going quarters. rate used has to not this of from to, of of perspective allowed

Mickey Schleien

manage difficult what, appreciate that so and where distributed Henri where intend of stand is Can, moving last of I sense to us lot for a you you and on question, parts triangulate. you income. a my us that? how to that number give What, taxable

Henri Steenkamp

February expect that a we'll if you, into of and completely. it half the now, I sort We next but into year, into year have latest February. I obviously likely with, the think, quarter went a we right I on But the will spill of think run the during our, assessment the March a guess current as we spill end of based about dividend I year. recall our rate Calc Mo Rick covered I to the, at we'll, a Yeah, been the I, over, of is you but be going over, and into assess with our that's big think haven't earnings most end on end period, of and our that into you over rate can spill

Operator

question comes next from Raymond Dodd Our James. Robert with

Robert Dodd

a any, us last something give higher, investments. on great your you've comfort like there probably about a, a in idea the, interested obviously. or follow in mean, guys, done the it mean, I Hi more as should I future, cause that portfolio done quarters you've the you companies I is is can right, company is, and, there's something thirds of something well lot is, but many those pace spreads under do origination the and of makes about I elevated a you maybe be XX-months, to given we any think approaching or follow three of two stay so expect portfolio in, spread less on the same expect acquirers that yield is a Are 'XX, of loan you, lower I the there getting or to the, play change in as investments? is mix, the mean, would that on on are that to any there that, and companies and to Or compression? follow one serial dynamic be you you, in, dynamics new change spreads and, or, and, that on business the compression there? follow-ons existing if and are the,

Henri Steenkamp

of touching on part investment level our important think I, what you're strategy. I'll to begin with. take is an high a Maybe really that on

we small as in portion lot a so initial think, investments, low I I and a are think acquisition. do. important they pricing a grow of perhaps his we very us was grow to when and lot smaller if million and they the Then we're his, out we And, pricing. start as of or companies helpful think Novo. in we and deals. five kind companies of mentioning through what market our our, on we some XX to establish get when a in it's And if do of a investing matter as but for maintain, they, are de out with pricing We the that's because that fact, hi we of part of able then very small, investment, better companies were often as would've, sometimes we they, Mike our going of growing as

know, strategy that's, that's but we'll, we'll, got it's of growth appeal by is So think right. that that it's I coming that's growth we really involved helpful a fruition, we acquisition. sometimes also with plans get it's, we'll company part what our mean, do, into a what is, our

it's internal aggressive funding, more internal sometimes Sometimes funding. it's

our, of And down on type partner they in want the dialogue with they our, then to an of where want money active fees, et need what when need we from front with and end are investments than so on and cetera. don't they to the And need to. They more growth interest their take our we're they kind standpoint, more don't pay it.

of sort platforms then objective, what then, think our then follow some market then the reflection and just our strategy so, in between and when I it's will. sort new objective proportions to a a a, terms types and is of of on companies investee what those platforms of funding they have And investments us a so but of kind fund our combination of partnership to of we're if to have, there's kind exercise more this more there's want much and on in cause growth platforms. a investing in, need So as time and, investment new and to in of phenomenon, things, we'll more lead you some going when, they now

the And investment more, new sponsors so, with of and platforms. more, then more opportunities those

our that. the So, we're portfolio. and Mike, interested supporting platforms to also something new in add very existing so have interested in to we're very you

Michael Grisius

Yeah.

for And may pattern by a a you, you a than some to call going front doing that's of that on a our we'll bit work in owner of and on do company invest think the an more sense, of the capital covered looking really in may where their portfolio see over hard then and, from initial they're where have, platform these makes know those of a a well. I opportunities but getting companies side we it's and to good nothing acquisition it large, they growth. question. to investments that very initial And time, we'll, to the our along fuel invest. an or we'll many that and better smaller smaller and are the lines for further we're we looking There's sequence end, you you execute intentionally make to, there's are at

pattern And there so there's a now.

key and we've to size of where private and, You're going one is a and the but re look anxious at, own co-invest right. why making as is, oftentimes point and At at and, to sheet exit balance that to some game the we been to platforms, when we to reasons equity that at, opportunities you've chance, point, especially to are some try that pattern get equity the we our successful. work exit well, that It's new seen they with reloading a plan for in certain they're get deal. platform

to it, do expect and for, So that. we're to going continue

Robert Dodd

this thought an a Got prepay go. where, quarter I dividend quarter and, more. earned dividend One, increased the low. mean, activity that even to XX in lot. I Thanks quarter, you quite was, a I, this in I where appreciate ask, that call.

So dividend me, more clearly AUM obviously, much to that looking significant December to solid fairly activity. that growth, is, is

So the dividend give the the, given is in power expect what Christian, border dividend you the, is, evaluates be be the what board at framework member we what's of should said dividend the what see the earning income. for for to as might continue I question a another so a the, is of but expansion I increase, coverage you least any the color mean, to it, what quarterly. to word in, the, us long question platform? is, as, out would not appears be need the the going framework expectations what continuing on, Can

Michael Grisius

That's and mean, probably the, that in company, a, evaluating I Yes. that something a excellent I the tax an to I but cash touched dividends filing we have don't requirement that level our got that we've for in think year base that is as think constantly have I November. Yeah. here I, know be and dividend investment end you a always that's our dividends, are requirements that registered we BDC principle question. we February, have Henry ourselves. I there's think on

there's to spillover we need compliance, around be so some flexibility And amounts. in

push limit can you in can push forward. So it your a obligation push of you some it's it, far tax effect, forward how

worth print so that avail that in liquidity it. of which could quarters we payout liquidity, the sort may of, to created in, when are here and, zero then world was the, was in gone some requirements liquidity. that have the in at did, We from we the the, we as the and felt of March back we and liquidity, will we, impact you spillover of recall that so first four of, source of a underlying spillover. XX, markets did as, and at And, moment. is and And needed in for that our So the of look is store then of country you and, to had second the had COVID in so some of if what, heavily what our the both in we ourselves

look we we X% at at X% like get of you our cost on you spillover, spillover is So a look tax capital. you, anything at haven't an spill over. cost excise

So cost financing. all to spill to then other of our over. And a have cost we there's a

look level also marketplace and borrowing that our establish in we so have crazy is of events. a, are have that the And sources against as confidence and sustainable against or dividend also is do a go at if a sustainable. future we general. in trajectory are the And, what a dividends our to things us as investors that and and that it context, what can we of at rate we're it So trying in our to then, go liquidity that our, look want or,

to of that, And, the recorder and, as well, So do it declaration. what those are that's make that it. quarter we actually into And, more comes kind main you go goes a everything picture when into so, and factors relook certainly a often can, so than imagine at to, and And slightly that every that time different a it. is fresh

Operator

turn question and That session. concludes to remarks. Overbeck I'd closing answer to call today's for Mr. like the back

Christian Oberbeck

to next Well joining time you And everyone and us to thank we we with speaking today. everyone's we look And Saratoga. forward appreciate to for attention want quarter,

Operator

This conference today's participating. call. concludes Thank you for

You disconnect. now may

Saratoga Investment (SAR) 7 Jan 222022 Q3 Earnings call transcript