SLRC - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing-by and welcome to the Q3 2019 Solar Capital Ltd. Earning Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please Instructions]. [Operator

hand over Chairman to I sir. Co-CEO. would speaker conference to like ahead go Gross, now your the today you, please Thank and Michael

Michael Gross

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

Rich Peteka

is would thanks, Michael. www.solarcapltd.com. made our website Please on any to course, the today's form being in Limited disclosed today Of that they any call are webcast Audio that will be of strictly at this webcast I property available recorded. like call later being press release. in that as remind Capital Solar broadcasts call and our earnings are everyone of are prohibited. replays and conference unauthorized note This

our also today's events or I of in disclosures are regarding made performance Statements like the These webcast which constitute future forward-looking information. forward-looking press customary attention in or may statements, our to not call uncertainties. future release financial would and results risks and conference performance, call your or condition. guarantees financial to relate and our involve number of future condition statements to a

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

so or statements visit by SEC forward-looking call update of filings, website at do please undertakes law. to (XXX) us our Solar no copies Capital Limited to required latest any duty To our XXX-XXXX. obtain unless

like Gross. this to Chairman Co-CEO, back and the Michael our turn time, call to I'd At

Michael Gross

Thank Rich. you,

share. $XX.XX strong net quality solid September value delivered was Solar in long-running earnings Capital's XXth results our asset credit power. and Capital history continuing per third operating the quarter, of At Solar

During year share Fed concerns Overall the quarter third backdrop wars, uncertainties political earnings to investment hosts of distribution over of the reduced increases have amidst remains decreases year Solar middle-market from Cash income per supported per volumes elevated extremely Brexit a the of moving performance and The growth. share. by to capital recession to competitive environment corporate $X.XX inflows economic credit solid a net by last paid to flow and the $X.XX and significantly an changed quarter with trade rate due headlined remains private Capital in rate market lending ago. generated of XXXX environment. uncertain of the funds credit transaction and and compared continued

of elevated to continued paramount structures, risk flow maintain tight believe lending. it cash the aggressive In our we is pricing with discipline face and

and leveraged to that finance relative absolute cash Science collateral provide Lending both lending higher businesses having are value niche structural flow competition namely continue and These Finance Financial, on an other While Equipment Nations quality businesses to opportunities, coverage attractive us strong investments protections. the specialty basis. originate our facing Crystal for investment very and investments Life with

the During the which investments, million originated finance third specialty of new we $XXX XX% quarter were verticals. in

Our strategies million growth. million lending $XX of of four were net in our repayments resulting $XXX portfolio distributed

a volatile platform transition average a lending investing flow comprehensive Capital At quarters the flow at to cash do when as of approximately lending in finance comprehensive market, to carry continued focused in across specialty but today's to or XX.X% allowed portfolio successful portfolio reflecting September investments conditions lien senior face protections middle-market finance higher those cash frothy niches. second cash receive strong our yields risk our our more only number achieve three our diversified selective extremely from or XXth, to these approach Solar credit we us enables income to superior on middle additional to market loans a Not and available transactions. flow of loans construction comprised specialty of such was finance cash of of the loans by value be flow market without having evaluating In weighted sectors fair take has cyclicals approximately portfolio energy. specialty

to second capital of for leverage X.X a of represent our comprehensive times criteria. now times our more to structure. lien finance move our Notably that X.XX X% investment specialty We compelling platform with in the to by itself and presents that to rewards. and markets as leverage another Capital's provides our management reflecting growing well preference risk tool market risk cash opportunity the cash flow We flexibility intend about borrowed invest capacity when as increased view our as only expand investments enhance offer strict portfolio risk underwriting flow to opportunistically only loans $X Solar ability to primary secondary portfolio, closer our but target the meet as simply significant

In continue the to specialty loans first emphasis senior with in finance current lien on secured transactions. current invest a we'll environment,

the take highlights. our turn the Rich Chief through I'll call Officer over financial time, to this Financial At Peteka to

Rich Peteka

Michael. you, Thank

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

renewed of third equity from outstanding to $XXX times the net to to million as from Capital and capital and of approximately available non-recourse loans. subject portfolio term million June fund the X.XX and comprised XXXX September $XXX had Crystal borrowing million companies' to debt Solar we $XXX.X XX, compared considering the had at debt with million The facility facilities growth limits. to base revolving equity of XX. our credit is maturing That combined X.XX of said, facilities September million at debt credit XX, XXXX At Solar million leverage new $XXX of of the facility during $XXX When in and net times credit $XX credit Capital NEF, availability quarter.

P&L. the to Turning

net XX, per income months ended For three ended months million compared for ended Accordingly, average September totaled to per the September million the June three for the ended XX. XX, $XX.X $X.XX XX. three September months company's average the months share Expenses investment or $XX.X totaled million months XXXX income $XX.X or $X.XX June million the for XX months $XX.X $XX.X June XX. gross million share, XXXX three the versus totaled investment ended compared ended million to three three for the $XX.X for

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

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

Co-CEO, our With over I'll to that, the Spohler. Bruce call turn

Bruce Spohler

average disciplined risk remains Thank you, X.X on portfolio of scale, At our X investment companies the rating portfolio based protection. to representing our on Rich. reflecting health was X the our Overall risk. and risk sound quarter downside X underwriting our least focus financial weighted of of amount rating the end with

strong As further quarter performing was of investments, our of the indication end. of XX% over underlying at fundamentals portfolio the

or encompassing XXX highly diversified, $X.X comprehensive per billion X.X%. investment average The issuers X.X is million portfolio was Our XXX industries. across issuer

quarter exposure end the in lien second asset-based At loans in consisted cash X% portfolio of lien of senior X.X% secured of with first X% flow second loans lien loans. approximately secured loans, XX.X% comprised XX% our loans; and senior

able than which to continue lien yields end lending. decrease despite more maintain asset spread reducing yield XX.X%. current By we verticals of on to carry and weighted compression been flow our loans the in finance north niche was quarter to given cash focusing level We flow believe XX% environment. exposure At cash we've LIBOR prudent second prioritize generally average in a our is risk commercial our

to these which our business investments, of double-digit four across million Notably, originations net yields. repayments were million activity portfolio Including able $XXX yields growth. in exposure our flow lines, cash while higher totaled lien to we've carry and maintain $XX $XXX second resulting been generally actively reducing million

let each provide update me of Now on an our verticals. investment

companies senior at quarter stretched upper Our approximately lien end. cash in business have EBITDA investments mid invests we first a to where predominantly secured flow weighted loans which million market first $XX which of are lien and average

quarter end representing repayments loan were portfolio. just third XX% and loans first During primarily we cash the just of lien lien first $XX over our amortization $XXX We existing million. million add-on million of portfolio $XX billion At over $X.X credits. of was originated experienced which investments in two flow our quarter,

as placed we the solutions wellness second co-lenders, quarter, the as which strategic provider to evaluating lenders alternatives corporations a third a IHS well the non-accruals one balance loan first sponsor. The is flow of midsized sheet is with our cost represents our of the During portfolio. of lien and X.X% onto currently together lien support investment, company cash of

will you next the the over keep quarters. this company We few of apprised with developments

sector portfolio month grew portfolio Across of At see respectively. revenue the companies weighted the level performance. continuing we our quarter end, of the the in healthy EBITDA XX mid-single cash high-single-digits financial trailing in are our flow to rest average and and

For just coverage over flow times the portfolio our leverage companies X.X and security to over was was our just X cash segment, interest times. in

at our weighted X% the yield cash just was addition, of end. average quarter flow In over portfolio

our Financial. to Crystal turn base me let Now asset strategy

to quarter. carried the of had just million. quarter both which portfolio During million Crystal subsidiary $XXX funded just to of with over of includes ABL the investments in $X.X equating which and Crystal's yield of balance which under XX% solar cost and third on an a XX%. $XXX sheet existing third quarter paid assets portfolio, new was secured over average totaled million for and XX.X% senior third total The $XX represents quarter, dividend yield prior on consistent and of we million repayments our just the

let mention Now me NEF.

of was an XXX third finance base of strategy over NEF, quarter, above funded totaling million total equipment million portfolio average just repayments $XXX At asset portfolio with the million. invested just and of $XX borrowers equipment over just $X The million. $XX XX, our across had invested exposure During loans. September a NEF had

balance as segment in As portfolio purposes a holds well as the NEF held included in tax efficiency for that on Holdings, financings company equipment NEF a both of reminder, investments. are this loan Solar's sheet certain

class yield at XXX% over XX%. just quarter finance of end just represents was NEF's under our loans. average XX% are lien investments in equipment of asset first comprehensive The And portfolio. the

It income million. consisted update finally, At an XX yet business. of represented provide XX% on million. me quarter-end Science $XX issuers the Lending total Now our with of approximately let $XXX Solar's reflecting of portfolio Science gross Life on XX% Life investment these totaled yields portfolio investment investments. of higher and under the an our average over loans, just approximately

of third just totaled approximately assets amortization Science and quarter, the XX% team over XX%. Life on average In Life originated new just during for IRR, $XX the these Repayments investments. over investments weighted the quarter. Science was million The third

our Science of success XX.X% yield or which is average Life fees weighted excludes any warrants. approximately portfolio The

finance increasing of more lien driving our adjusted In our gradual to in the sectors third last portfolio continuation to have in focusing attractive increase investment represents and couple where originations we the been the tighter risk conclusion, portfolio assets, on Solar's first a teams over are structures our both new activity specialty and existing loans investments during able portfolio of returns. quarter leverage in that the companies get years, defensive

prudent a opportunities deploy Given today's market environment preserving on arise our capitalize market compelling remain dislocation. thereby may flexibility selectively, to from and capital to we intend that

At Michael. back the I'll this turn call time, to

Michael Gross

Bruce. believe third you, well we that Solar very is and with closing, our Capital are Thank In positioned. results pleased quarter

market conditions cash Our results. flex enable drive that long-term diversified continues specialty competitive flow superior up that depending exposure to developing of more us in or on to loan financed strategy verticals our down

solutions solid businesses. track diversified Solar established U.S. of a middle-market company providing as a across record to the is finance capital structure commercial with firmly

origination investment allocate platform capital to scale the diversified engines cycles. retaining across our flexibility Importantly, our and afford credit us best enhanced risk greater return discipline to while opportunities

opportunities, We portfolio interesting are existing seeing origination with companies. particularly

disciplined We've yield. while specialty for environment. in preference cash frothiness However, highly credit loans flow this finance in a current selective the investing compromising maintaining of we not in remain for and credit market face been prudent remain and quality

solid result second is level actively lien we've close flow portfolio enable will well returns The growing cash attractive specialty average to will XX% to outperform able credit of Importantly, to been investments. a deliver to we allow maintain us our for positioned a shareholders. weighted history believe for finance yield asset us exposure through growth. cycle reducing does to verticals, and shift the conservatism our If our while

net At share powder approximately clear leverage verticals. the currently We as we to path have X.X our SLRC via debt capacity deploy increase investment equity, significant believe we and leverage. quarterly to accompanying times per run investment rate a target income has to differentiated approach net dry

a As Capital sustainable on our evaluate Solar of or our this to our basis third increase for Board call results will to SUNS. our O' earnings XXXX the morning, Directors shareholders. distributions increasing XX earnings quarterly Senior we’re hosting At further quarter clock of

and capital vehicle value in to Our market enhance ability to team’s our continuously continues benefit provide needs this deal of traditional clients’ secured to through Solar financing this originations Capital's proposition ability flow. middle our we'll meet senior

for for questions? the open time. thank you you would line We up Operator, your please

Operator

[Operator Shane comes from Instructions]. Rick with the of question your line first And JPMorgan.

Rick Shane

for thanks my questions morning. this guys, taking Hey

portfolio as talk Just the screens bit implications anything the and looking about bit there's at idiosyncratic. I this or pattern? a little little company healthcare IHS random values other is cost and wanted marked your if a a at look of as IHS when investments to just seeing the fair there I'm for if rest we a and are were am the healthcare I a portfolio. curious curious below and data schematic of few well. the

Bruce Spohler

means is using for as corporations of employees a ahead focused to try testing on that wellness IHS is provide to a any is their company mid-sized to get for it specific, over potential health extremely to more investments are This performing of focused time. more performance. situation-specific issues. healthcare Most acquisitions know is have company's the as and our been on you well business

Rick Shane

we there Got the to look And healthcare consider? at other investments, it. when anything

Bruce Spohler

is over Senior, have insight ongoing very sector good reimbursement feel Gemini Solar FDA as between process our both into the you Life ABL metrics. as as feel this well Science a we our and platform. that No. We we Healthcare as know, good team that as well very approval growth

feel very healthcare our about we So good portfolio.

Operator

comes Alexander Compass the Our of with Casey next line from question Point.

Casey Alexander

us mean leverage are you leverage the ratio I'm to But -- that, those you're rate legacy perhaps opportunity the Remind repeat depending target And opportunities your loans. lending financing your make in sort the is set in to equipment morning. the repeat are where good on upon which top I would push you're target target sense, And are a seem vertical curious leverage in compared fairly of that and seeing then would seeing? opportunities. you equipment seeing portfolio? a ratio? because bit that short-term where Hi, you still your little in secondly, of there,

Michael Gross

at Thanks question. the for I'll a question. shot your first take one,

is leverage Our X.XX September. at current X.X about specifically the end -- of

no ability X.X We to to see reason we that. when remains which X.XX. approved the it to X leverage, target, at Our put in beyond shareholders do to our place, X go

need portfolio leverage. returns put comfortable As in on portfolio more and our net shareholders our to XX%. drive yielding don't We our leverage we're is to see you maintain to up that can for

Bruce Spohler

bit, frothy found flow business where question expand as have on environment. our really sponsors opportunities has a to opportunities a fund second on. question might I future our just flow part regarding move opportunities, of opportunities. sector out we existing That where your in repeat been generally Casey, growth. think just because good equipment for market from your little adding of come add-on repeat one Actually, facilities cash the finance are acquisition Most equipment selectively and the the we is the today's to amortize cash of life of to theme

cash So with been side on grow. certain they the we issuers flow as growing have

Sciences, is extend issuers. Life to in existing a a or we sometimes Additionally, see new do sector that where will an for opportunity facility

As stage that portfolios companies very you of late to recall, may also we are science devices. life but lend and drugs have

facility the as or lead duration our further in get a with drug commercialization. then that and drugs may FDA to devices we process real device that start and behind extend sometimes new So maybe new momentum

example you a a have and expanded of business is footprint. occasions that a And for opportunity and their couple of as they’ve grown times. been that's name been extended GenMark we see in on portfolio that's their a few out So nice facility

come you'll had into is ABL additional I move really and as and efficient into if upon or capital more us us companies out based headwinds. they just a the think come cost in the business business back in marketplace see face headwinds they they of then where that portfolio may they seasonal needs either may from

platform. business the that's repeat Solar And so nature across the of the

Casey Alexander

answer I reserving of out X.XX of way. you target if of hear a to Michael's acquisition in had environment. can just an past for in that sort get And actually the didn't were the spread-friendly to leverage I'll Michael, you your then follow ratio answer. X.X opportunistic on and in said that more I

on is So bottom towards that an at basis organically that the end target move acquisition? you of an possible organic leverage it ratio might least without

Michael Gross

think we are all across but I for acquisitions. growth see Absolutely, looking we our opportunity continue verticals, continually to

just of have the our path see a to getting on what but allowing pipeline to on We growth a given part basis. join are definitely hard kind strict lower But platforms we're to to predict we end good there. a our incredibly those again business total for criteria sure,

Casey Alexander

Okay.

upon distribution accretive So an in is essence the executing acquisition. increase potential necessarily not for based a

Michael Gross

That’s right. Correct. exactly

Operator

Ryan KBW. question line next Your with of Lynch comes from the

Ryan Lynch

in these regarding in specialty a did growth range purely do your the lending some cash up the question to assuming X.X, you of of can the I that lending portfolio bottom growth asking change follow of that guys target on areas? or was Casey end want and Getting to no no flow leverage.

Bruce Spohler

little we you don't of our a as attracted I bit as which are business, at from assets, this like at you of help generates saw the short we Science so know greatly ABL if segment, they it Life income flow a lot duration least I little segments think Life repay those cash headwind, think bit clearly a to does create are a look answer and the our Sciences quarter. lot. as with But of is we Crystal segment need you

flow So of on dependent from we'd entirely to cash a that get that not we're help range. bit think like I little but to

Michael Gross

that allowing we a fact in benefit private is where down I transactions and and BDCs capital seeing thing seeing of billion platform spread the about which is so we're chase $X have benefit we've growth would about to us capital we’re that as drive only including well. across bigger The point it will the to platform add a grown of our also more the that,

Ryan Lynch

BDCs, broadly we’ve some Okay. that particularly go loans for opting are markets, middle some play a couple who be to direct borrowers the of these talk that market syndicated in may upper lending B And heard the rated some about single loan of loans BDCs could solutions.

get Just any and guys guys of you you lending your are in, been are you that are what seeing that you markets improvements has wanted seeing opinion, cash market flow in play historically? guys the to very in any competitive a

Bruce Spohler

here QX, as I sit directionally yes. in of would we say, middle the

people a set. hold company. pick to where to definitely opportunity coming participant echo lending historically at more feeling Michael's in ago grow and direct least sponsors $XXX environment in direct might club that that with that relevant as there that X that opportunity comment to the market. a you then be X, We a moment million X, syndicated can are gone typically a is need portfolio participate To scale a the investment opportunities have markets are to a It will

world syndicated million you we grow would our gone $XXX number left a private with $XXX yet EBITDA would think of to lending and and investments the market, continue of to So us. they have that million have to today

it's definitely bit. too sentiment call a it soon little is So way trend, to a our but tipping

Michael Gross

that XX it of we're is you're That’s at why B alluding are things have they add of deals thing on leverage times the for been But kind that some seeing covenant. what over, to, larger I the start a other normally life. crossing where X these covenant. times would single a covenant and for it's But example it's we've a passing not is,

to prepared of that so we're kind And stuff. not do

Ryan Lynch

BDC be you Can Solar is holding And about platform both mentioned comfortable maximum your as comment across would lastly, structure? across then what size your as the what holding that you just is billion whole pool be comfortable on platform as platform. that, size well the $X the a would you within

Bruce Spohler

$XXX So good We're Ryan, across to holds looking up typically platform. question. the at million

you that, you the in the going if most see to are look $XXX it away might hold a million ABL. million of more that move Life be $XX $XX size real You'll differentiator. capability is type as be from And like we million $XXX terms Sciences to in investments flow, a at cash their million in or size But participation. of then SLRC, find

Operator

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

Chris York

Hey, thanks And good my for questions. morning, guys. taking

it larger a at quarter nice Then some you of So noticed kind guys Crystal. have there Crystal. end post at production was deals appears I've quarter

you are in for sponsors? leading acceleration seeing that value the market Crystal guys some to increasing? solutions demand Or by the is provided ABL proposition anything is in by So

Bruce Spohler

the I think, comments ago up syndicated moment on about in to going again market. on a large what's our follow

and then capitalize cash that's have quarter, the their redemptions or on next ABL real And increasingly certainly dislocation the get in have and on side. of But and companies too as benefits attractive the there I any as driver. it capital trend it financing they will think that in then valued opportunities tightening But to good more retail. also they be find quarters leave bit secular the opportunities. the nervous. and a mid-market that's to know do very trickles little significant say you as markets Crystal may ABL Again will they're with strong into deliver down when in soon flow, find the Crystal, portfolio Just retail a continuing also they

the originations. think from counter drivers with consistent have XX,XXX thrilled but each allow do as diversified engines our fact for it aggregate very read wouldn't very that that do of I the to and feet theme a I a in often these we're we yet So other

Michael Gross

reminder follow-up into just end Crystal economy from And and of see inevitable. of also the could we different growth that our double expand size, the question could countercyclical briefly more and about We against is a today. point is the our like portfolio sort investment where run target, of come lower do retail Crystal at easily the which a that in just because will beyond sector things opportunities business

Chris York

percentage what is Crystal's And then of then is I think guess you the size, staying you're or holding, do largest on $XX size it average do larger And it a their think that some assets? Crystal some million, comfortable of the seems these than I platform’s total conversations, like at you are like deals assets ABL so the about as what think? which of

Bruce Spohler

balance and it's Solar then total on platform. so So, some million some hold you to definitely or Solar’s up balance see itself typically might $XX around Within sheet, on sheet. Crystal's that's

that'll million may in a aggregate you market today. look platform competitive Solar. million to is of you SCP at very if scale But up aggregate So for XX the the that in million the to that you XXX very, XX take which to then

Chris York

-- would so or XX Just the XX million? is to be it million be largest to XX clear, size that XXX

Bruce Spohler

total that we different including XX Solar largest Crystal's that across balance million hold Solar's then to Capital XX the million would million be manage. in funds we within to and balance a XX between sheet all the million, sheet XXX BDC million XX and

Chris York

conditions and guys flow you continued lending in to have that known conservative your frothy cash we've being then very you're there. the And lending given niches emphasize specialty

that have negative relationships, maybe you appreciate think then the a sponsor call? I of side less first become investors on flow with that may impacts your cash alternatively but that, any you a as decision do worry

Bruce Spohler

question. that's think great a I

I consistent. think if they you relationships, look been at actually very our sponsor have

insurance be strong We’re verticals sponsors very with, as feel cash solution active, who in flow have industry it healthcare, ago everybody's were very know track you we record data of that a couple but comparable years brokerage. centers not

has those relevance. and sectors are go-to scale who in and relationships longstanding we their club strong been our that only So sponsors have increased members have enhanced

it’s seeing very market. things sponsors. we’re this from away sponsors we're are So the quarter where all a renewed strategy trying to It’s those a approach syndicated not be all as to shying activity and a targeted

Chris York

to as And modeling and maybe Peteka then of $XXX,XXX increase down I last sequentially? LIBOR question, the question sequentially flat expense was sequential think then What a outstandings in Mr. here. drove interest were

Rich Peteka

It a investments and combination was in of of The the understanding timing done deals QX end that's interest the right. really average. were a on a of the of was That’s the expense made of there bit little at end QX. lot QX, very

at levered earlier then that activity. of If that had investment you and interest up of look at burden way, also and the having quarter we in And the we beginning lot a ended QX expense therefore the up to entire QX.

expense higher So combination quarter-over-quarter. interest made that it’s that

Chris York

Okay.

credit going just QX average than facilities to average higher maybe Just the outstandings daily and XQ end quarter revolving be quarter your are the on got simple of another, end?

Bruce Spohler

funded. been been on this will average quarter would higher. based get but on quarter, have quarter timing when the It like last lower, the I have the depend investments said all It's of would

Operator

question Raymond from James. line Dodd Robert with comes next of Your the

Robert Dodd

Okay.

last new there follow facility? to credit related Because on a Was the the one Just quote question. up rather one-time that I amendment. anything than was an the new

So facility? the was on time and there the accelerated anything old

Bruce Spohler

No.

Robert Dodd

it. general And trend. got the then on Okay, just

somewhat. syndicated look widening than see rather As spreads middle they even that I have we the market large been we when more market, -- we can could that see into

spreads and well. focus something to structure right, you on side, are obviously low flow Now as want you on, not cash the

structural anything cash potentially are in flow is bit of business Your comments you a in attractive terms about if more seeing the terms from not making protections? couple structural covenant doing shift start the weak effectively top-line months of enough, loans last that may little the

Bruce Spohler

from relationships to longstanding to of feeling that where market. yet opting direct level into we the and and the syndicated been size us come I given in a could, we've of got inquiry think the are tap higher sponsors there a they're just where business, market has particular performance lending

and know structure -- comes more seeing that are covenants. So I with we more that and

I So than it’s certainty definitely case, more more and the give structure. terms of just been quality assess is for company more looking us structure only months a specifically us willing, higher much ago. was a it that necessarily give Again, quarter our are not activity and they spread, in but they are just couple of but much

Robert Dodd

kind bit appreciate area the up you Got from on question it, an if at of out that. some syndicated of more the And little that other markets, stress areas than syndicated beginning healthcare. then I the healthcare has look Rick's broadly can is there. markets I on a When exhibiting following

in And was obviously But weakness, showing basically type areas is any values of the there there in IHS have broad any weakness? where said they’re the shown trading exposures are where the some markets market you industries the syndicated portfolio the between overlap you idiosyncratic. and so is

Bruce Spohler

ABL not to just the No, Again Solar Senior which focused. that refresh receivables see. we We've we been against a lender at own is very Gemino sector. into healthcare

terms headwinds. So insight we have very of reimbursement good in

very physical making more that essential markets, going it's therapy, whether services we're anesthesia. it's And so the been into reimbursement sure we've stable focused on whether

very collections blocking on we've performance So for tackling and times been and visits. seen with their people at But we’ve good execution consistent actually had and services. patient issues, just of very good it's

from team feel a we Science portfolio our rely team. and Gemino the about very our Life on perspective So good healthcare and heavily at

Operator

with of line next Kotowski question comes Your Chris from Oppenheimer. the

Chris Kotowski

the the pretty had $XX Life over best But and obviously segment Mine areas been asked. your with time this a downs you and two heavy in one growing around down. of years pay was kind just it downs have last pay it's of the Sciences million been

it easily ongoing how or prepayments? financing curious bunch that that underlying caused markets something is companies phenomenon there whole all those or/and was like is it? a of replaced Was public that the and get in anything Just volume a how

Michael Gross

The earlier, Bruce repayments mentioned said portfolio, average that a as the this is episodic. so somewhat two it's churn years, is life high

there's like where You in you could a have lot a quarter have or fall a zero. quarter, where a quarter that

in the look the it’s to expect trend back or so way, And at any as not few next to we shape we form, that would a its prior something portfolio in rebuild quarters. size

Bruce Spohler

portfolio the start Chris a point up a still from And and XXX stand million. is to you

was come of it that of you income, it to you so need acceleration end, to that quarter's of portfolio comprehensive income. repays our know XX% them As XX% generate income quarter while so at the only generated repay with substantial

to the years eventually healthcare last to perform XX, thrilled but it will continues still and we stage the for the been investment. the with great if years the going road we into grow raise they it's as at capital look gets which XX So sector about underlying against vary is and that venture capital we're feel lend drivers, exponentially down that XX late quarter-to-quarter, over how has really you

Operator

[Operator Instructions].

Your Fin next from comes question the line with Securities. Fargo O'Shea of Wells

Fin O'Shea

morning, on. Hi for me guys, good thanks having

venture looks specialties and facility. credit lumped they Just question rate new first equipment your have there. are the financings, you on like in with the It first on advanced Are in loans schedule? lien

Bruce Spohler

Yes, they are but [indiscernible]. they're baskets for

Fin O'Shea

you on faster invest. a run-off Okay. mostly And the this pace maybe you've not than been at cash then but flow repay side, Thank you. willing portfolio,

it isolated vintages names you just If point, and color your -- bracket would are the reasonably this specific group of least maybe old onto If all Is you've portfolio these on on at things at generally the time and well exactly go [DVR] plan. that not appreciated? the looks there? according the be over 'XX, performance to of have terms marked. in 'XX everything to to this gone added according that's healthy plan why some or still them of this -- like that they Any

Bruce Spohler

Sure.

dynamics. there is I think two

companies there towards position a of migrating of first part in lien. our We as you second back. on First are lien where focus all, were go

position, knew us You company duration second and in and our that had a performance underwriting first in extending out into the thereby refinance lien history we of good a investment lien move saw with.

it been add-on of that some they're where XXXX, extended And actually the for was are some of then of really We're those lot that also been point it So lien. to businesses seeing second some first to positioned commentary your the transition sizable. from and sale. some rather companies. growing doing duration with to them already growing has But from of came into the 'XX a so in started investing we've also of and getting these

Operator

remarks. over the Michael this I closing questions to to further no for and turn at like time. Co-CEO Chairman would are Gross, There call

Michael Gross

will XX constructive call, your you. the questions for and present you will And start who on support. Thank SUNS your we in all minutes. be of for you, those Thank

Operator

today's this participating. gentlemen, for and concludes Ladies you Thank conference call.

disconnect. You may now

SLR Investment (SLRC) 5 Nov 192019 Q3 Earnings call transcript