SLRC - Earnings call transcript Q3 2017

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Operator

Welcome to the Q3 2017 Solar Capital Limited Earnings Conference Call. [Operator Instructions]. I would now like to introduce your host for today's conference, Mr. Michael Gross, Chairman and Chief Executive Officer. Sir, you may begin.

Michael Gross

and much very you, good morning. Thank Solar ended September to Capital Limited's quarter the for call XX, earnings Welcome XXXX. Officer. I'm joined Rich Financial and Officer, Bruce here today our Peteka, Chief our Operating Spohler Chief start Rich, off forward-looking before would we you statements? by the webcast begin, covering and please

Richard Peteka

events on Thanks, property to remind Michael. unauthorized disclosures future conference Limited a that of in guarantees in to press condition. Statements in and made not or Solar today's everyone performance are forward-looking or relate at information. our that note broadcasts, and statements condition any press statements, like conference constitute future disclosed webcast today's regarding our recorded. are is form, any this our your These available I'd being release. be and uncertainties. earnings like as Capital are customary or to financial website Please I'd they This release of course. Audio made that will risks also call call and of prohibited. results which call Of today our replays in webcast financial forward-looking www.solarcapltd.com. of our being strictly future are webcast performance, call number call may the the involve and attention to later

our a past is of in including the number with of materially factors, of time-to-time not a future indicative as results. described SEC. Additionally, result performance filings differ Actual results may those from

visit and or to call forward-looking us by unless Officer, To our this to law. turn At latest filings, Gross. Solar of Executive Capital no like update our our call back I'd to required obtain Limited undertakes website so Chairman Michael do the XXX-XXX-XXXX. to please Chief statements, at time, duty copies any SEC

Michael Gross

the leverage you, flow Rich. market that heated. become no cash loan have conditions in It's secret Thank

BDC's have credit their discipline have amount exodus to to credit they too and buy or current of issuer unrealistic some a their for been which dividend reached pockets syndicate focus other passive quarter in mandate Other have managers reaching maintain to investing. market credit more trenches across capital risk the view return they few and Over private syndication the market Still is public an been the been the because on share there's model to entire by funds policies. in work by Many to past market and of certain platforms. they which of yield years to own enforced each including did private put shifting of must order the taking themselves friendly loan to aggressively risky participants. in firms

defined in term enjoyed indication investment environment we equipment increase maintain that third the market cannot the the and we're correspondingly quarter for we in a guided this lower Conversely always competitive persist buying decisions [ph] cycle approach middle stage will on of rising finance our correlated to interest by of making we no this While to the risk continue niches rates less within execute Nations Equipment low are finance by pricing approximately by still once long that late and market decisions the $XXX the vehicles rely and in and correction Finance When portfolio. million remains strategy operate drive middle we platform. market We at this lending with on credit belief profitability. so or speciality market building our the outcomes Consistent regain assume the acquiring predict in loose cannot both account take market. investment share industry. low believe potential structure and and into we how long they intact banks for private that ever will current with thesis

voluntary covered dividend and restraint equity have our underwriting new The market basis investment agreement increasing continued XX well a management has management to leverage shareholder higher permanent which Xst, our included fee. earn that in approved into standards our on has XXXX. invest to Directors This actions our fact of Board of a which go raising ensure in income as lowering our our amendment amendment reduction our fee to net would just is level history to a Additionally necessitated will point [indiscernible] January our capital waivers friendly in fees. which

our lower fixed past points and rate we've cost reducing with X.XX%. secured been unsecured by with senior return of borrowing structure. XX X refinanced credit year and the amended on X, we our a to Over cost our [ph] focused Xs million notes notes of We basis facility average $XX weighted

reduce NEF of portfolio conditions interest event our margins of correction. late investments of in The at us the X.X% grow and always Furthermore will to our maturity well low credit verticals September secured. notes or rate of senior our six for continued a note addition unsecured fixed even interest our new and effectively issuance us refinancing $XX including accounted redeem unsecured for a issued environment. million our position which which Additionally help of finance continued last either three notes structure efforts December of coupon a our to speciality quarters, week we're comprehensive We the in of net these approximately XX are cost investment million with heated believe XX% $XX XXXX. through we of niches market

of NEF integration Now its earnings. pleased three are our and seamless ownership we with our into to contribution months

equipment reminder a provides companies company to secured is U.S. As NEF finance equipment the financings that an senior in

sourcing to marketplace originate find The business Former the track for risk this in effect traditional equipment approximately company enhances in at we has professionals billion finance created multiple void a a of founded in The management by $XXX invested the fill compelling GE channel NEF Solar transactions closed order Solar opportunity Capital the in to flexibility built business, approximately dislocation a reward to established the was record. to Capital $X to finance acquisition best invest of experienced end has of July. lines XXXX team offered acquisition underwritten have investments. by which an solar's equipment million and strong lenders. across

expect on NEF in XX% assets. on its finance per existing NEF details generate will portfolio will expected the Solar quarterly specialty Based provide quarterly XX% of with net additional substantially consistent earnings investment its the We Bruce investment NEF other to $X.XX basis. Solar our is $X.XX for a a all yield investments distribute will to on to transaction. cash our income to generate approximately share.

of debt credit September to under to its $XXX portfolio and to of had base finance capital available had XX, XX, over September equity. times with funded available including $XXX facility. subject borrowing investment million Capital X.XX Solar borrowings net existing At credit growth. Also facilities our debt we outstanding existing availability leverage under Solar liquidity its million of

our of from At portfolio became $XX.XX XXX% the XX, a portfolio net the ago, and easy first As of result our performing business up a quality net XXX% of At monetary our five asset value place remain is of penny the policies when impact we is September the strong. years global and credit asset plan put apparent in QX. September XX, performing value is

income third and investment be income the power XXXX exceed XXs. of expect portfolio, our we XXXX quarter share the Additionally that per investment QX, both earnings our of per to share the we net net in increased we in and investment and low generated $X.XX have comprehensive QX

take $X.XX reduced net to aligning reduced runrate our grow in increased of investment in ability our Solar increase comprehensive is combination investment initial Director XXs per and I increase earnings. portfolio for XXXX in a distribution continue with from to distribution Chief a Given an net management Financial our through start an income and our greater At of Officer, financial turn distribution Peteka Board will step call quarterly income this with QX Richard the a low investment you concurrent feel to The we to in approved our of of the over confident a our highlights. larger time, resulted expenses, to fee projected has share

Richard Peteka

you, Michael. Thank

to balance million per million per Solar September XXXX $XXX.X share XX, asset Capital across in billion $XXX.X companies XXXX, XX on to XX had value sheet $X.X in industries $X.X $XX.XX portfolio market value September compared or at of investment XX. a net at Limited's Capital's at was portfolio $XX.XX market share value At across or compared fair Solar companies billion XX, a of June portfolio fair industries XX June XX XX.

$X.XX per the line, $X.XX totaled months totaled realized $X.X the three a the months $XX.X million for three million company had third for million second For XX. million the totaled share or realized three of XXXX net losses compared net versus for income three share Below This for three increase in the Expenses XXXX. XXXX, the the months Ultimately, company June totaling to the of for ended XX, gross million $XX.X million compared XXXX million net ended Accordingly, per or $XX.X XX, income of ended September investment million assets compares the September XX, three company's months XXXX. XXXX. $XX.X $XX.X from share average for months XX, $XX.X share $X.XX investment ended million June months average $XX.X September of an XXXX. $X.X three unrealized of unrealized and the ended and XX, or for the to June XX. $XX.X quarter the months for gains or XX, ended months ended the per June versus average net net June operations to million $X.XX increase three for per quarter average ended had the

per Board December record stockholders our $X.XX January XXXX. Finally, share as XX, Directors distribution on of to QX of XX, payable a declared XXXX, of of

Michael April Chief $X.XX an mentioned Officer, record With per I'll turn of as declared March XX, share XXXX. first Operating increased Bruce average distribution Spohler. the payable to our call XXXX to of quarter as and on Additionally Board that, of XXXX Xrd, stockholders the

Bruce Spohler

Thank you, Rich.

like take and Before our of overview portfolio minute of a origination the an just details diving you platform. our I would give to into

acquiring diversified to of years advance in you As we've niche spent order speciality company. a finance objective of and our strategic past the businesses many several know building becoming

we of today business efforts four have As distinct these a lines. result

is also invest through our the in companies as flow and sponsored with flow senior borrower the upper level. at are in average Boya in invests million Included EBITDA we cash institutional loans, business cash senior First off which here partnership $XX loans [ph] approximately another in vertical back which in SSLPs our stretch investor. know this you our secured mid-market,

transition our through and based in encompasses come to collateralized we business much companies with value loans done of assets made are loans realizable asset company the crystal fees. These is prepayment our of which have meaningful finance platform. is well as the upfront liquidation as well loans which as against borrower's Secondarily finance a other as

to lends held market cap development which third vertical companies. or business privately is life Our medical our device science lending drug and small

team late companies life GE of XX year secured was loans often period. founded development over in a and or fees senior product managed success business stage previously drug come the are and Our and Capital's science with to warrants. loan These

increase NEF's fair XXX lines our of value with equity securities senior debt remainder Negative XX% highly portfolio of The our mainly diversified which given Finance September At has these smaller was vertical of primarily lines which finance roughly to X.X% fourth as approximately portfolio relative X.X%. comprehensive are associated which XX portfolio. loans. XX% our diversification of consists the our consists acquired to second up million investments. uptick of patient loans different acquisition billion and is market secured full to the and encompassing Finally across enables business clients. floating size the million, in repayments across repayments average approximately QX with XXX to an at the investments XXX in which issuer us NEF Including our business middle average totaled our act originations XXX four resulted investment four in equipment NEF. The due the was rate we was fixed our a aggregate, solution XX, Nations and our Equipment were The associated acquisition now borrower of of provider million. industries. In of X.XX from X.X acquisition capability borrowers quarter XXX or across portfolio total rate, investments

our quarter During lending than market. the the in than flow currently investments cash [indiscernible] financed back we is sponsored replaced and where cash were specially quarters more repaid businesses investment during the we opportunity believe flow loans the current more compelling the second which third with

portfolio EBITDA weighted downside company remain portfolio our Now revenue which an update quality XX, portfolio and earnings trends across Overall At equity XX our with companies. underwriting interest Crystal the and of our and the power credit on month I'd September financial reflecting our end focus our like SSLPs. to continue health any NEF of sound to and average includes positive discipline on latest our in protection. be

stable flow interest current low portfolio X.X investors. XX segment For credit U.S. our weighted disciplined defaults for cash higher X.X respectively XXth. and our and basis was waiting on The our XX, rating fair The current to average X was at economic quarter's the our risk. our consistent Approximately environment is risk investments security in the continues cost the times credit favorable representing coverage prior and performing was least quarter, average the portfolio approximately portfolio's slightly quarter. the investment end XX.X% was of earnings with risk one X average and based At remain to value portfolio to of of leverage September EBITDA the at two prior million. our or with XXX% the was September times weighted reflecting with on of better than yields XX.X% fundamentals X skill rated strong portfolio and XX% is amount total

having able was proven yield maintain last a market portfolio finance way update believe Solar credit with the and companies invalidates NEF the equity of independent strategic or approach quality debt the middle specialty pleased we've of investment investments. Importantly, additional leasing our market lease verticals. well touch to context is companies evaluating familiar control risk. years. very as will performance focus taking brief on team very in on key and We're our its the By participants both investment now our the maintained our without with provide on and several compromising background it over that as I of then niches lending on and/or other diligent portfolio industry

been activity closely given investment in had Solar number the for NEF years leasing following industry. our a of

NEF's as our number were professionals. Carlson and they at investment relationships both members employs GE team at of together all NEF addition a and XX of professionals under approximately senior Founder have of executives Crystal CEO, Solar investment Phil with Sober longstanding In team NEF trained Today Capital. while a

plus as tools liquidation As the Michael of a equipment assets with with average privately platforms. $X XXX% tenure an their originated can Collateral equipment senior mentioned is line equipment cash three to the loan life with readily directly securing of use liquidated. science Advance typical seven The financings. borrower of lending typically which of since existing years high market such is lease owned for business than its two their trucks life essential value rates long bid has a be and of asset NEF of inception complements NEF portfolio based percentage the and and secured portfolio addition our machine approximately and NEF the years. consists a assets, are flow billion less fixed trailers, collateralized

financed class million total XXX and other of our a approximately Importantly NEF speciality exposure strategy portfolio At businesses. we assets which to is equipment of market million. our which asset provides are X.X middle believe borrowers end comparable finance NEF's of offers scalable had business access an highly $XXX risk funded Solar average a different adjusted with returns attractive to to quarter's

During NEF the both are loans months as NEF's our loan rate of million of as fund fixed and rate. new mitigated million. assets approximately most efforts QX and rate amortization Interest NEF's well portfolio ownership XXX% two to match our approximately liabilities. based short is of risk through fixed investments are totaling had of in with rate them duration fixed investments had asset XX XX

generated two our equipment third of quarter approximately a months yield XX%. of the strategy net during our For ownership finance

Crystal provide of a million platforms. XX million. of an to Financial portfolio At XXX borrowers had loans XX on secured business brief approximately will approximately other our I diversified update Now end of with average funded quarter's a exposure

rate. XX% approximately quarter the of During are approximately reductions of XX XX and and third uploading Crystal had XXX% investments Crystal's million. had approximately senior loans product million totaling secured of new investments

the Solar is X.X consistent prior cash to XX.X% an yield on equating For cost dividend Crystal a third quarter of which with the million paid quarter.

quarter SSLPX into secured combined our an exposure once This both borrowers disease to the XX totaled has average during and million to amortization million are of including program, million. bring ramped. a are XX were the secured fully repayments turning just loans portfolio just third total collectively Now Combined list X.X% to senior approximately performing. and tranche of the secured million. loans vehicles with we under the senior to teens SSLP vehicles unit senior XX return The equity that to SSLPs earning over on approximately XXX XXX% move X expect and low currently

million science, lien loans life portfolio across XX average investment an an on update Finally XXX million. secured our borrowers first senior $X with approximately totalled of of

the about the on on realized originated at science warrants. During blended fees team third science investment amortization weighted yield investments quarter and cost average or repayments third realized of XX.X% $X was XX.X% excludes life IRR life million million. had The through warrants. our any The exit quarter XX about potential one of is including our which portfolio

As market remains frosty environment technicals. given Michael lending market the mentioned middle

to ways I from market dynamic middle will Michael. are lending time in the demand and middle disciplined leverage call record available to of creates We prudent of sidelines, on for the a have amounts existing believe retreat the the Longer back fortunate be term deploying attractive market origination of and continue lending turn leverage diversified sources that sitting At the to equity flow refinancing the cash and companies. approaching to very private banks our capital. we supply borrowers will this

Michael Gross

shareholder been have our focused shareholders. maintaining Bruce. investment From protecting management on Solar years building Capital of inception the XX you, with and term decisions capital long Thank value, and our alignment ago

that return to speciality senior is consciously higher modestly in well markets lending utilizing and to the institutional over loans, create purchase of equity. origination migrated We vehicle As deteriorated on lower we to and such with with leverage lending one partners SSLPs importantly asset diversified first scale into the Crystal, loans. invest We lien's equipment and established secured of finance with NEF. allowing to now comprised XX% science additional generate the financed separate enhance credit opportunities attractive to strategic partnerships Solar's formed life we as us based investors portfolio ventures joint secured and risk in verticals recent

a broader The Today All of maintain platform. across of building speciality are a taken capital structure portfolio these origination is company the high acquisition NEF significant a solutions to steps while are providing quality and lower diversified defensive a we risk event. to market businesses. middle finance

Our cash provide us niches opportunity flow that traditional engines less speciality loans to focus in competitive the loan to collateral than value on lending source origination are lending.

lending. speciality from direct expand per growth with investments our beginning execution a and Solar's enhances is the businesses. gives of distribution differentiated conditions. strategy the out and team's They credit of growth in of the this approximately our successful our focused finance this afford The have quarterly dry have clear speciality income discipline. power income investment beginning At Capital equity few been our to heated which are less run speciality call therefore NEF third engines of a taking the to profile sourcing $X.XX XXXX increase liquid greatly risk the and in are levered correlated referenced of believe Solar The on quarter via a to to to to building our relatively result earnings verticals, X.XX us believe greater the share and current stick market to our and [indiscernible] finance I addition have upper addition rate flexibility approach reacting have investment derived finance engines in ways investment we to a investment we At of to XXs. differentiated firms complementary manager quarterly We differentiated handful our that strategies has us substantial there is the markets cash path capabilities. we deploy are powder return achieving credit flow our under that debt of management credit In admire. whom net will times net XX% of outperform

of additional increases. results Capital we At As of Solar second call an the earnings for will or evaluate Senior o'clock our the Directors dividend earnings quarter SUNS. morning distribution this be XXXX XX increased Board continued will hosting of

ability middle in senior time. traditional enhance client's the to Our We financing ability to would Solar needs. origination line continuously our continues much benefit vehicle meet open very provide questions. proposition you for to flow. value Thank capital secured your through please this market you our the Capital teams deal Operator for to

Operator

Instructions]. [Operator

Your of first question Securities. JMP comes Chris line with York the from

Your line is open.

Chris York

given your leverage. of each can sheet so specially optimal level said remarks have prepared your you're Capital update of you Michael own finance that under balance you businesses of Solar So off-balance us you in at have leverage on levered sheet that their views that multiple form

Michael Gross

vehicles Yes levered for I well, still and our is the times target [indiscernible] as that leveraging be vehicles. not think reason to tend speciality these is are these with high that

Chris York

Got it.

ROE, guess prepared today then ROE comments combining fee. but combining here in your leverage what remarks X.XX so and reduce and the and Okay Solar of management given again at capital maybe attractive for range I now that then that target then your is the

Michael Gross

math, to the we the we NII that get So - ROE. we to which of can high-XXs kind X-ish back say achieve we the are

Chris York

little considering supplemental are capital financing instruments right more structure switching then that provide are you growth? fund bit, a And with you gears Okay. now you your to flexibility could content some future new or

Michael Gross

in force. to answer cost, to I the our lower is cost obvious content, will ways the have looking [indiscernible] million never look to this our of So and the still at we're outstanding think we we continue we're with nibble place unsecured hopefully always $XX at away to debt the lower

Chris York

one capital the you're that here you've about in it can got rather mix allocation new then of given form you've portfolio sciences the and think thinking us life maybe but the flows distributed at XX.X, evenly got four lines how help at of you about investments? is on XX%, that comment cash Last of me, for businesses, just

Michael Gross

Sure.

of spite that third are we're we as we sciences see life monthly pipeline I the capital there appreciate quarter, think season think state the see to a to a return you continue best portfolio. to a somewhat we we in having I market of current loans that environment. allocate assets in in adjusted nice that opportunity the good clearly once slow risk Today in think I your looking these get see

So we're we on we I will the see stretch repayments be little life focused highly but see to there rate tougher there there bit cash to as it think you and at a will have I that that I I steady for to a of bit will a you nice contractually four more to grow the then really but to episodic. couple across is little of we'll growth growth senior but comfortable be constant underwriting a know and if the should opportunities should always continue they sciences see amalgamate a think think being we as selective to I repayments of there We NEF steady know flow on do the a next happy a forecast trickle think continue and but you also little monthly be see extremely you segments think and I paid bit on see side are cash think are out highly, flow growth, look structure over year. but opportunistic growth [indiscernible] Crystal all we expect

Operator

line comes with question Schleien Ladenburg. Mickey next from the of Your

open. Your line is

Mickey Schleien

operations about know a follow allocating to loan I'd like balance asking was to which clearly SSLPX X.X thoughts only the funds I because about sort look has times. and after X.X at ask you in almost what question SSLPX at Chris capital the up senior years of times your below target own leverage I versus when them is at your is sheet have as of two

maybe you getting two north factors those to So for looking ROEs the quite of to been while. are you've one what you get even closer know a keeping from that

Bruce Spohler

Sure.

flow I if know just stretching of your cash it's we've the seen it's there, than state has goes been in terms the you although structures that structure compressed. pressure to think of the Mickey has some I loans of price even under market overall pricing the more market think out it that

extremely in have press relative just having asset life with I financing you do been and we've loans based asset our at science what lending, as release selective in at So alternative the saw we NEF cash loans these equipment flow blessed yields think well on level there been are Crystal. to options as with the can lending the Until we're to invest things and those foremost appreciate defaults based and I broaden capital in continue allocate carry and think higher that profile, will mindful out to to predominately because loans they're those so also higher more first risk in structures are be recoveries lower asset going verticals and you yielding as way. continue generally much we and attractive

Michael Gross

businesses digit Bruce having that risk less luxury with we're just those said think the frankly I the double yielding ROEs loans. of as in And have to the all to chase highlight flow are cash that we because think I seeing not and

Mickey Schleien

are then SSO larger what is the piece to Michael, or trying to less I'm which tend companies pursuing understand So investments pursue risky. in be could

with math a do not up X.X know point time? this feasible risk, are to you whatever you can ROE market or nice taking leverage if saying still you generate in excessive on you the So that's this in just without at

Michael Gross

is the we're our a have and what saying so we doing [indiscernible] of relative No risk speciality luxury perspective higher rest reward from a finance Mickey attractive is verticals but we the is to can flow that lending specially today you cash to different given elevated in risk the think relative find sector yes vertical four and finance across the returns the verticals.

to I the better those optimization returns bit be capital to but more in leverage SSLPs those change. will some I think to a of the conditions substantially there expect of allocate little more drive unless wouldn't us

Mickey Schleien

Okay.

neighborhood at expect where the reasonable would be leverage them vehicles in the are today? those So to of it stay to they

Michael Gross

to the to we're this but think equity of environment. No go the to lot ROEs in I capital boast increase current try a going new slightly expect leverage to I there wouldn't

Mickey Schleien

that SOI repo or next you what's there's terms good Right. assets your getting I strategy segue indicates to assets. there's because total non-qualifying t-bill optics Well of my perception there of that's into of compliance? it realize your climbed back a what's the question in the XX% above some but the because in and ratio a that footnote your are managing and

Bruce Spohler

so the that to vehicles. over you're you that's with just commitments commitment those go have once and We're additional can in portfolio. based made up make not and It's been allowed on investment dynamic question. changes We're value over into a previously XX% an compliance

So those commitments are already static.

Operator

[Operator Instructions].

Bock Your next question Jon of Securities. Wells Fargo comes line with from the

open. is line Your

Jon Bock

in year the sciences you targeting in life that public Earlier was JV announced a companies. investments

the So here I commitment is the you but through sciences was made of provide was life kind the Solar an through I here still dissolved, SSLP strategy that here? can so update for reading any also see a venture SSLPX joint doc Solar's or think the

Michael Gross

we point. That dissolved, just not into have Sure. this was not at funded that

public continuing tend of funded and seen a yet, later bit team little and would stage we continuing are as been but we to lending quarters. science our like expect to opportunities all there maintain many just should seek the next is we those little point than for you life but over haven't So it's couple be your slower the investment, opportunities get a to attractive that

Jon Bock

is on just see this that clarify, dissolved, was SSLPX XX, XXXX. to And the I March

So now is that SLRC? at is commitment the joint balance sheet the venture on

Michael Gross

No SSLPX effectively JV. was renamed the

Jon Bock

you within portfolio? the forward finance verses core and a how on determine you when which NEF basis the So next purchase portfolio NEF's like solar also I within deals do guess question, sit go equipment

Michael Gross

tax and perspective, NEF earnings are the our will because those and of the end tax that certain we're for on At from balance BDC sheet. are put but frankly assets the day be balance we [indiscernible] more doesn't likely efficient sheet efficient it an matter

Bruce Spohler

C-Corp of structure somewhat really see just it quarters be over underlying see to solar sheet of it's few here number the you But off Michael's to in or just underlying Michael's goes XXX% not. of the of mixture and sheet should and dollars point whether change, but always investments economics from efficient to the the put nature the next the shift should to on and balance invested it's a more the balance you point both aesthetic the and and benefit which loan in will doesn't but there for

Jon Bock

And is then more of bucket verses opportunities capabilities with question, seen grow to that specialty acquisition or companies. but actually doesn't securities know market that an the for these company just we've of as niches a as are one assets you assets these have XX% through the some NEF in underlying the finance underlying know you the I issue last there in of more loans. so qualify you

forward? you opportunity comfortable the are or for going So do see growth mix with current still you

Michael Gross

still these our acquisition answer call, the be for think pretty some risk lender broadly on small was or growth, have minutes Solar platforms of talk what for next in that platform asset commercial a opportunities just collateral generally add-ons finance us see they is continue new world an to do the where platforms for that earnings made could and Senior based there as few we is I appropriate a we hear returns. we about for and we look to old ways attractive expand lower so businesses you'll to

Operator

[Operator Instructions].

with from question JPMorgan. Shane Rick Your next comes

is Your line open.

Unidentified Analyst

about potential of Rick. the Melissa in at that for verticals, wondering of thing sort spread the seen we've flow for if compression back spread lending diversified the Question compression kind sponsored the more for risk It's cash are those I'm in base?

Michael Gross

much of very that the to is more historically but so the participant we in there higher what's that given so feel there few banks is seen one happened haven't been markets out say lending immune verticals would lending been credit have experienced much not broadly less entry a the protective, so lender, I spread compression some but into it's much speciality we've spread less players there's are Sure. and those it as is have seen we not so in if verticals. compression barriers they and most our verticals number

Unidentified Analyst

a on certain of in refinancing? can you Okay. portion QX to fourth forward provide if pipeline And specific risk at like I'm volumes the wondering as you are or repayment potentially portfolio into and if for want don't what looking being the looking at guidance look quarter

Bruce Spohler

good earnings but earlier but I the performing think your about so say and place no. we steady see relative we of businesses. on growth very portfolio amortization given steady and don't you have all nominal nice lending We business question a our should to do from less flow life as any contractual compress. it's as in in have selective But both the material would Yes, power feel a see no a expect will and sort our have verticals cash yield existing in four well I science Crystal XXX% repayments that generated of NEF growth we that we seems to perspective to stable

Operator

no Gross, at to I'd back remarks. [Operator time. Executive turn questions for Instructions]. showing Officer the And Michael Chief like further closing I'm and over to Chairman call this

Michael Gross

you. Thank

for more at support other grow you as nothing this patience to business we Thank your to continued continue thank and have us together. We to than you. our all point of with add

Operator

This day. thank you Ladies program may and a today's and for you participating Everyone gentlemen does all disconnect. in conference. have wonderful conclude the

SLR Investment (SLRC) 3 Nov 172017 Q3 Earnings call transcript