FS KKR Capital (FSK) 8 Aug 232023 Q2 Earnings call transcript

Company Profile

Participants

Robert Paun	Head-Investor Relations
Michael Forman	Chief Executive Officer and Chairman
Dan Pietrzak	Chief Investment Officer and Co-President
Brian Gerson	Co-President
Steven Lilly	Chief Financial Officer
John Hecht	Jefferies
Casey Alexander	Compass Point Research and Trading
Ryan Lynch	KBW
Ken Lee	RBC Capital Markets
Robert Dodd	Raymond James
Mark Hughes	Truist Securities
Melissa Wedel	J.P. Morgan
Bryce Rowe	B. Riley

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen. Welcome to FS KKR Capital Corp’s Second Quarter 2023 Earnings Call.

Your lines will be in listen-only mode during remarks by FSK’s management. After the conclusion of the company’s remarks, we will begin the question-and-answer session at which time I will give you instructions on entering the queue. Please note that this conference is being recorded.

Paun, Investor Robert with will time, introduction. the this Head Relations, of proceed At Mr. begin. may you Paun,

Robert Paun

press Thank and Please Good to throughout quarter KKR you. morning Corp as XXXX Corp’s KKR Capital or earnings second issued FSK, Capital Today’s call. the being information the conference will August available the be call. may be is included call days. is an Replay FSK note and the Fund FS welcome recorded, call release that in referred to XXXX. X, a for on conference of audio Company that XX FS replay

is any is In A with website unauthorized respect its to Relations the the and link and of addition, ended Please performance of a note information website portfolio its the supplemental quarter company’s of and this rebroadcast today’s Investor financial this webcast financial FSK. posted FSK to Presentations. the has presentation form for property XXXX. presentation under XX, call strictly on in is the prohibited. containing June Events that Any available on section call

by Today’s affect conference update economy or and statements call recent most We forward-looking to important are for the to FSK to to factors statements filings outcomes generally. refer that materially FSK’s results FSK ask you the not unless or does to that so uncertainties its cause differ do with includes undertake actual law. risks risks that and could statements. from required subject SEC forward-looking could that these

measures. include call this financial will addition, In non-GAAP certain

the on second in was measures to August can For that X, comparable found SEC directly XXXX. with release earnings reconciliations GAAP such measures, filed quarter FSK’s the most be

information be and or in be supplemental prepared considered in financial accordance for substitute should should isolation not the GAAP. with nature related information Non-GAAP as a considered in

please similarly of same visit reported In company’s latest may companies. be named filings, copies obtain non-GAAP SEC the as addition, financial measures To the not other FSK’s website. measures these by

Officer Brian Speaking Chairman; will Co-President; us Co-President; Officers, Officer. Steven Wilson. and room Operating and Chief Michael Officer are Co-Chief joining Chief be call Financial today’s Forman, O’Toole Executive Ryan Gerson, and Also and the in Chief on Investment Dan Pietrzak, Drew Lilly,

over I will to Michael. call the turn now

Michael Forman

morning, Robert, you, FS earnings quarter to good call. and Corp’s everyone. KKR Welcome Thank XXXX Capital conference second

We pleased equated as shareholders distribution solid another rewarded quarterly of of exceeded our In with guidance, supplemental annualized shareholders report approximately distribution special are share. a distribution paid and to base to per an quarter price. $X.XX results of $X.XX earnings totaling and per distributions XX% these we on also a total, share our stock

flow Dan be are forward. more pleased increasing, We positive detail, in should as that also to for us deal is discuss report, going will which

second adjusted $X.XX investment $X.XX respectively. per quarter, share our compared we totaling per guidance to public totaling the as generated income investment share, During net share and income approximately net $X.XX of per $X.XX and

Our XX, the value as $XX.XX of net XXXX. June of at $XX.XX to start compared XX the of and asset per as as year March $XX.XX share was

our quarter, consisting special of share regular quarter the per a paid on would distribution been Based distribution share. to declared per and have Excluding $X.XX Board quarterly operating per distribution our strong distribution per of $XX.XX. the our $X.XX third a the continued during asset net of we $X.XX results, effect value $X.XX of base share, has shareholders share our of supplemental

share $X.XX supplemental $X.XX quarterly we a throughout our total reminder, a minimum distributions minimum during per beyond per quarterly of and to per possible expect distribution XXXX. of quarter equating to share As XXXX a of

per share. last payments Additionally, a special of quarter series distribution we $X.XX declared totaling

receive in estimate the was quite believe we investment month distribution we of XXXX, end attractive able investors be and in In $X.XX of to in of paid installment total share distributions other to which in is will and November. of first the the today’s total, per minimum May, two paid continue environment. a will The special be the at

Based we’ve accomplished, not reward continue results, believe our to well-positioned resources only with long-term. on experience shareholders over I team, work financial portfolio and attractive rotation the producing strong we’re platform are the dividend but significant our to an the

call quarter. with Dan I’ll over and color to And market that, turn and team the the the to additional on the provide

Dan Pietrzak

that labor Thank of you, to said first participants and Michael. higher XXXX some The spending have during will make to elevated, and prior expect rate being we our market interest as consumer will we the That it either continued remain as in expected. dramatically continue as calls, the slow environment half have persist. near-term, soon resilience view on as market inflation of the we the the economy over unlikely or said, believe strong

negotiate lower While and direct historical call compelling investment are enhanced levels during for environment. second the quarter remained opportunities see quality a high we strong lending compared averages, protection, attractive and to overall in pricing, to lower activity to companies. investment other investors private continue able leverage debt We

the many Given be portfolio choppy to private the companies. the sponsors is to we and markets, poised credit financing debt primary believe of nature still continue syndicated alternative for

mentioned, appears Michael seen M&A an increase as have recently, in flow activity to be we up. picking As deal

the to until the financial new given not of materially this associated results quarter However, increased year levels. fourth we year. perhaps in timeline activity the remind traditional see with will pleased increase the investment investments, are or early activity Nevertheless, we recent would investors likely next our impact that new

to Turning activity. investment

long-term portfolio $XXX investments. our million KKR add-on companies During primarily originated on relationships. the investments surprisingly, quarter, Not to were focused second of we and new financings existing

we quarter, M&A a second go part environment. to our to proactive of was the as we sought of capacity sale investment the view on during increase third-party This million based investments. on accelerating completed lower $XXX yielding our approximately forward our of the sale Additionally,

$XXX As a million million sales decrease with to new our portfolio $XXX opportunistic of million. portfolio equated result, and combined net $XXX of when investments repayments a of

dermatology for The company markets in the deployment over-the-counter the and and an receivable manufactures, at opportunities, the recent Bausch of financing closed Company. end eye we a medical range quarter, terms health and device, space. Health of products develops, of pharmaceutical, In facility primarily account

provided the balance investment accounts undrawn for points are off We backed receivable basis X.X% pharmaceutical financing upfront who was and fee. sheet with plus from a XXX by fees distributors. facility XX sold point with $XXX grade their Pricing million customers basis a company

and million example opportunities committed $XXX to in finding ABL of million transaction – in growing to we environment. are has This we corporate of compelling FSK is the funded type $XX and investment financing strategy current which an the date. our

an optimize reasonable outlook meaningful unitranche with asset-based asset-based begin seeing M&A traditional balance in with Additionally, business, the banks the particularly Combining our improved activities their half year. recent sheets. increase associated focus financings our to to we we for market finance of second given the finance are improving as on pressure opportunities on the the creates traditional

the quarter, a interest our had portfolio end of of interest at of companies terms coverage, the X.X coverage median times. second In

For uses better base March company to align clarity, portfolio this calculation rates XX, with as financials. of XXXX,

of forward-looking companies, deep weighted are XXXX. to positioned. our average XX, focus believe perspective, is EBITDA our In and well portfolio with which These continue evidenced high-quality operating cushions. we From our on margins as by statistics June part, strong borrowers equity the portfolio $XXX a million large in was due to

companies, portfolio XXXX. since have April X% weighted growth which companies invested we reported of a our average EBITDA year-over-year rate Additionally, in across of approximately

that, I’ll to our with turn to detail. in portfolio discuss more Brian over And call the

Brian Gerson

Dan. Thanks,

As XXX $XX.X portfolio billion, XXX to of a to decline companies The the June XXXX. lower a portfolio and had in XX, fair fair – our compares $XX.X of XX, March spoke due yielding XXXX, value companies. consisting earlier. of which largely our billion investment Dan as lower value of fair sale This assets, of portfolio portfolio about the of is to the value of

quarter, approximately the XX% second of portfolio the our end of largest value represented of the our XX At fair portfolio. companies

first investments We consisted focus XX. our debt loans XX.X% to as secured June senior XX.X% secured as on of lien and continue portfolio senior of

In of to of based addition, the note, lien represented to asset-based portfolio venture, investments XX. venture of are asset represented the our debt as comprised consisted XX% through our senior investments or joint finance which in secured the of our portfolio June finance value predominantly investments. secured loans looking XX%, and joint first It’s important fair of X.X%

XX.X% investments The XX.X% of weighted as accruing XX. debt average compared June to of XXXX March as XX, was yield on

the calculation with FSKR. higher FS the merger average with yield XX% of increase experienced either the during was the quarter, activity Advisor. investment our XXXX, reminder, primarily The originations quarters. as continued originated on rates XX, yields June investment we of portfolio a during well of weighted the adjusted As is as average the credit as associated effects is of past by accretion yield to the associated KKR our or weighted rise total the investments second new base in quarter comprised exclude the of Including second in with approximately the now KKR during few

excluding merger of second and on quarter, calls. which During earnings have the including of depreciation Home, in experienced net of Wittur investments both approximately we on NBG a concentrated million, $XX the handful primarily of mentioned portfolio prior accounting, impact names we

our first liquidity well week, will company past KKR majority in will as to of and agreement, to the managed stake Pursuant significantly first to of the ownership million debt provide company at This be to operations, the the by and will the equity FSK [indiscernible] lenders management, company lien sponsor capital into as converted second reduced business. this lien be its as additional delever loan a operating the fund level, to the other equity sheet. balance as funds provide lien well new €XX majority

approvals. closing conditions transaction The and standard regulatory subject to is

other majority led month. company Home NBG ownership We Chapter funds and emerged successful to company’s securities and delivered FSK the last the equity Pursuant surviving also of reorganization, this XX own the managed debt capital of company. new a and from by year, plan well restructuring the as of the now as structure earlier KKR protection

it to cost by June XX, XXXX, of assets of fair the on improved a a market to originated cost portfolio value March basis improved on of and non-accruals a on by KKR our Credit. XXXX. believe with as fair X.X% X.X% basis compared value is to XX, – helpful X.X% the and basis on basis based a information X.X% on As We provide

Advisor KKR basis were of KKR of which fair value XX% to total the the a have and basis. second of the on related end a non-accruals As quarter, by and our X.X% the cost been on X.X% FS originated Credit portfolio,

I’ll to And with call turn the over that, Steven.

Steven Lilly

Brian. Thanks,

interest by follows: income million, increased investment a increased million, our $X income during decrease million the as increase $XX of of $XXX million driven million Dividend interest and were $XXX to fee Total of total quarter-over-quarter income was quarter-over-quarter. by $X income. $X The an quarter-over-quarter. quarter components totaled Our investment income total million

dividend recurring venture, of million during Our dividend income fee during the summarized various totaling from $XX companies income as the totaling dividends follows: million from portfolio fee approximately our approximately and is income joint and quarter. $X quarter quarter $XX million during the other

of Our totaled facilities. to of rates expense million rising $XXX million, an increase $X the on quarter-over-quarter impact interest our debt secured base due

of weighted fees million Management during quarter. was second XX. Other totaled June incentive decrease expenses debt quarter-over-quarter, the quarter. during million, $XX million Our $X X.X% average as and $XX the million of cost fees a of $XX totaled totaled

and The to first net net of our was quarter per as by portfolio. due our income share a increased is decreased overall by investment share XXXX per detailed the asset in on asset follows: and per GAAP of $X.XX of net value decrease $XX.XX ending quarter-over-quarter was per value share investment a $X.XX share bridge value Our basis

Our reduced by the special was our value $X.XX share per per and distribution. quarterly share share per distribution asset net $X.XX

of $X.XX June net the of share per share Accounting value our For in distribution some XXXX per the results per for XX, was $XX.XX. paid our adjusted asset during activities $XX.XX. net share these quarter, special asset value

forward-looking to GAAP $X.XX to a share. adjusted we we approximate $X.XX and approximate share, income net quarter perspective, XXXX per expect From investment income per guidance expect investment our third net

due sale $XXX is GAAP assets expected Detailed income Dan to of were relatively well third primarily the to guidance as repaid flat July. be earlier, million. approximate is certain quarter basis is month as on a income recurring portfolio expected as to Interest during interest the Our which follows: mentioned quarter-over-quarter,

approximate We expect $XX associated to recurring dividend joint million. income with venture our

incrementally We to ABF of and income fee September. approximate course and be $XX end now expect as between we normal to dividend other dividends the expect lower million

expense an management fees our we to From $XX million. approximate standpoint, expect

approximate incentive expect to We fees $XX million.

to approximate expense approximate other expect our expect interest expenses We we million to million. and $XX $XXX G&A

quarter accretion affected. GAAP due the reminder, other to during expected share between our revenues net a $X.XX of categories As expenses and the to relates and our This income per of difference investment are difference income net not investments our interest merger our the affects adjusted investment income, recurrent accounting.

available $XXX and to to up XX, was of respectively of of $X the our million Primarily to our and the from unsecured of approximately party June XX, our assets was liquidity were at committed to compared the the of a sale comprised Approximately during net March $X.X and gross of balance sheet first XX% average quarter, and overall XXX% due our debt XX, quarter. levels XX% at billion weighted XXXX. X.X%. XXXX, billion, of XXX% sheet our XXX% drawn June XXX% balance debt At cost at effective debt second third was and equity end

for the the turn call to And few Michael back call that, open remarks with for a closing we before questions. I’ll

Michael Forman

to continuing remained attractive The FSK shareholders companies, strong team in available focused quality on earnings, and us losses diligent capacity to and In enables of assets. closing, deliver the success company is such with minimizing challenged Steven. defensive pleased from an which proactively has investment the high long-term I by our award managing Thanks, am investing distribution.

the to see which we both are for FSK. in just during overall an and pick a basis, also as up We’re our on quarter activity, advantageous pleased with pleased deal is results clearly year-to-date

team, On to with for thank open the call for your we’d the questions. call continued for and And we support. of that the behalf joining operator, like you

Operator

comes [Operator Hecht question you. John Instructions] Thank with first Our from Jefferies.

John Hecht

a much. good very Thanks guys. morning on Good Congratulations quarter.

on to and likely some in is events capital and some those given, industry this during just the touched you even recent level and high one regulatory to you call very just the of guys But here. the give First banking of requirements the see changes permanent long even what guys guys are you structural maybe a or you to in forward? and type an today would of that characteristics Do edge we And kind where asset relative term of the shift going framework. business?

Michael Forman

a there, mean, been it I especially out. market. think, I probably in expect do question situation terms to going in longer-term fair I this plays how John. the Thanks, considering think of we on be what’s

liquidity relates You Basel see manage it new Obviously, as concerns there’s assets. how sort of III. and banks to rules around

crisis in many and do this I private starting tailwind a seen we’ve space. think I the financial continuing, for think ways, overall with the credit it’s

I think we’ll benefit from that.

but I’ll lending bit tailwind will less it’s years. a probably of on asset-based call direct business, more as the I that It’s over our I probably think something regular little focus a what for think I a space. several said, it’s of finance play out

John Hecht

update Okay. you That’s quick a helpful. on And been just any asset know Global Jet. then, there on. Is big update maybe I working there? have that’s a guys

Michael Forman

One, think I remain strong. of performance two assets No, underlying things. the the

side tailwind There’s folks think space the asset on I both real also the terms paying leases, in right? values, the but just been a in of that COVID. other on of

improve sort done quite to looking the also of I and think to ROE. good the of management as has team a cost job relates business it company

a So for last there the I story think good several it’s years. been

still to the out figure remains but it it, team working strong. as relates performance next think the with steps to asset I we’re

John Hecht

much very Thanks Great. guys.

Michael Forman

Thank you.

Operator

Casey our for comes moment Compass question Research Trading. our with next One next Alexander And and question. Point from

Casey Alexander

Hi, couple at of here. I and looking of at good the X%. asset morning. XX% a mix JV I’m at have questions ABF the

that expect as portfolio your should the total this of bucket. put room in work? there’s you given of of we the ABF to proceeds about sales ABF, discussion percentage a of rise to some And kind these So percentage as

Michael Forman

that talking a there the Good bucket, range sort the our Casey. range. Well, to middle consistent XX% of about, of think market I with of ABF we’re for been sort in I think and morning, we’ve XX%

will deals it are to quarters up. certain some in that of adding think, in ramp there sort terms of trend continuing There assets. are I

XX%. So will I XX% way the of think of to expect think that range I it’s its it’s sort but sort it fair be I – that make term long to assume would to XX%, that towards the over

Casey Alexander

relation was price In sale a as percentage of the Okay. par the the sale, to what average value? of portfolio

Michael Forman

we the excited just of were capacity So done slightly some honestly XXs to we to create sort sort strip I remain get but these want of performing sort of were own, of We lower we think and upper and inside XX mean sort I assets, other yielding. we mean, assets of sense. it just approaching to of FSK. themselves these sold FSK, I that accounts that are not assets right? The assets a proud inside of manage.

capacity. was future not This was story. investment this So managing a credit

I with think clear target we’ve for was what been leverage our always range FSK.

using to as a bring times an moment made sense X.XX looking picking this to that’s market to think lot up M&A I it down at a us. of

Casey Alexander

Well, the loans. consider stuff. of receiving rationale yielding discount the the you be I a good selling me at the them loans understand par so in can to less par on order to what that of you the there? for explain reinvest to kind what’s sold, at new you’re perhaps value higher principal mix loans you rationale to assets for the But

Michael Forman

Okay.

mind loans held [ph]. one. of better level. plus wide right? it sort because So fees sort probably would two that’s loans I there’s think, is fees of on remember let’s spread basis points So Two, The that keep at it that – I things, The slight a generated, of right? and XX the sort in three market have call a points sort you’re with add I of call upfront of kind always discount themselves, today pro originating OID of sort

bit of So a it’s a just little rotation. portfolio

sort Steven has of than think number lower in usual. that I remarks, prepared picks fee income been I of think, mentioned his that our sort up. number

was to that. generate you’ve out the net sort able seen been of we’ve I think numbers income

focus would those I on So points.

Casey Alexander

in Can is bump you last in through the the income question change that quarter. reasonably component, walk And in up there’s a my please? us Okay. PIK meaningful then

Dan Pietrzak

Sure. that got were period, base. There cash equity to to of and other well-performing the sort happening earn-outs $X PIK. put others of who’s non-recurring items on meaningful cash name, Entirely of post was of of of of the a strong this during going one-off attractive billion Solera. a one the first sort case They quarters sort EBITDA, of I certain during rate This thought very north year. where in PIK of sort side dollars then was the change related half but back two both is would there. company, sponsor requested as a a loan in the sort we

not So situation, about this I think move. as is a credit would challenged a two-quarter

Casey Alexander

All for right, you it. questions. taking my great. appreciate I Thank

Dan Pietrzak

you. Thank day. Have a good

Operator

One moment KBW. for question next our Ryan question. next from with comes our Lynch And

Ryan Lynch

morning. good Hi,

had question First of on portfolio I $XXX was sale the million.

forward? opportunity? I if lower then explore $XXX I just sales question that makes portfolio. older that this investments this portfolio guys was million looking Or of exposure the you I sense, – to And of that sales some one-off spread going there of it was, know that you know on off a were vintage. that not, average I selling those sort missed are purely don’t current investments of get of what think to those of that yielding sort on that or to more you weighted but a strips could of of My said was provide more – lot assets something is portfolio sold? sort or

Dan Pietrzak

good Ryan. and Sure morning,

itself, I active think on focused of portfolio portfolio being the terms terms always of management. sale we’re In in

a part that’s be got participants. lot of platform to of a fortunate we’re different think market I

we be I We part something sort that I of I have repeat as consistently said a we’re of it quite course. about otherwise. relationships, as said, normal are think, That wouldn’t think as pleased, would investors current sort additional to capacity we active additional get where I can or the volatility the in do in maybe more in like this vintage, of is done. market. entity the there it having

roughly think about it – spread would of terms in that X% assets. on context, sort I of So in of terms in the the spread

Ryan Lynch

there lot and activity question increased of talked about been spreads spectrum? finance then would the across? increased just any Then my just you sort a you are I underlying the That other helpful. sort specific investments. was finance guys the whole of Or on yields and is that to or subsector across assets across portfolio, if different specific is by asset-based I marketplace, or was, a fixed it’s different of second floating SOFR, I And of the net current That’s vertical, like to love to asked in hear opportunity is rate looking pipeline the that deal there mentioned guys seeing vertical. Okay. are kind that spreads investment lot at of part deals sort you’re you they’re when the based portfolio asset-based look just of in would at some more your what rate. current in seeing some asset-based if in yields either of are investments? finance are love hear it that

Dan Pietrzak

recall, you taken call multi-asset space. if class But have multi-sector I’ll what to a approach we or the

that’s it think to here. the let’s kind following put and flows team We it, want generally finance, important. and XX best those. risk-adjusted I cash be commercial contractual below subsectors assets, consumer, We’ve there’s, the available are mortgage, that hard buckets: of in returns on call focused the

quite think we’re in over $XX capital got very a able We’ve that’s XX involved to large billion I of business. team. large of are right? got directly that at We’ve got that, We’ve north base people AUM. the a do

with So we’re pleased it, quite let’s in competing I we call from, where we’re how the market. think stand

bit think of more and lending more I that I things I you’re clients daily. to what business assets certain That those would interesting sort opportunistic say traditional are, little is all of have the forced what thematic business where would a today. cover than call, direct

up months five regional either to certain one the dispose specifically tailwinds clean some the that or are the from this of last assets. we’ve has I interesting probably think seen bank asset space, the been year, portfolios the there who of is over most four, thing looking

there. there good tailwind think, a I So, is

different. bit think I right. mean, you are a I is deal little every

Some be deals floating. might

from a might deals would Some it about I broad stroke. fixed. think be

XX% that a think in from kind to to that the that’s IRRs, simplest of space way targeting base deals of sort about case are We’re probably it. perspective, do roughly really

Ryan Lynch

Okay. follow-up that And then one just point. on

of kind is space, just inbound of the portfolios? And regional because from a less or something opportunities you are interested pullback mentioned seeing – to looking onboarding? is guys from that deal sort entire would banks there less banking you from sell You regional competition. looking opportunities be But any the in off creating new

Dan Pietrzak

Yes. mean answer short I the is yes.

I with been of or quite the assets, sort that Republic or sort think is dialogues public some some has First team having of but constant Signature the SVB of of there.

I think we are looking on these transactions. to partner several with of banks

Some of that could be buying portfolios in whole.

could that, markets, sort that The of of that a of Honestly, is normal a kind active are fixed flow from specifically rate of of space. that step assets. those be that think be are active even but perspective I these business cornerstone today. parts in very of is just we’re originating buying thing of banks a interesting today probably one would more in back different on portfolios, banks kind assets Some but that a is certain more from A on FinCos taking lot acquiring lot those. of the

well. and the there I we’re So, of able done that couple come void to portfolios. a in think, as fill on We’ve

again, types. I think that across asset it’s themselves there. present the excited different sort these all opportunities we’re by of And

that team busy but coming think quarters, the you able prosecute I So I’m that, to coming for folks to the be expecting need years. to the be

Ryan Lynch

the today. for stepping for in and That’s deal I interesting from on appreciate me. void. FinCos that all to these time That’s comment the flow

Dan Pietrzak

a Thanks. day. good Have

Operator

Capital our question. comes Lee next Markets. from question our And for moment One with next Ken RBC

Ken Lee

is terms more more you Hi, what like you’re sounds activity for Thanks recently. talk good little still taking Thanks. activity. question. pricing a for bit could competitive morning. just my favorable and about wonder the origination in if seeing terms of It I

Dan Pietrzak

Good morning, Yes. Ken.

So you’ve I been talk M&A and have volumes about call many prior quarters, on general in lower. ways, today the or been, there think the has heard us

think you’d expect I that.

– has to articles was don’t that sort of think due lower I of that’s correct. think lack the available that financing. there the I some been

and mismatches thereof. it driven the ability entirely a on it’s a of been or think call we’ll agree lack buyer seller valuation company valuation I of to between by the

think the has more that weeks. I see pipeline in to that thaw, active handful we’re the dramatically been of starting last

advisor the community boutique larger at the they’re hearing M&A of some of or of we’re think firms polls kind brackets. I up, sort ramping whether

volume So think to I available the I the to you’re the think going market the pick do deal. and see has capital up,

what active So has of are I here. players sort imagine is there mean remained, you’d the competitive environment

step I prepared think kind deals, in We’re about. to this of going volume, we’re but to excited these see into you’re which pickup

Ken Lee

Thanks. perhaps additional you. then to Got And share there. time? you may or one stepping NAV that price the I around just helpful Very thoughts current help the could consider about narrow just back, follow-up discount if are of talk one and could over what actions options shares you trading

Dan Pietrzak

Yes.

I ours. of think share there. of of of focus a couple points the One, prices is obviously a clear sort

in calls quite guidance. the these of to going and through with through think be going transparent, as see the I Steven can earning you we’ve sort quarter tried

have in we’ve results. we quite put up think what been terms of I operating pleased with

we When the attractive. price, team announce calls attractive dividend just attractive, can. about it’s doing that investors, more special spending that terms about even is you of obviously terms we’re of think in share think but to we think many I stock road quite it I NAV, of in more attractive. even think happy I time as is a a it quite mean, thinking meeting on $X.XX lot as the with

putting there. that to little kind numbers of market I need we’re guidance I the has to meet legacy while up struggled put sort for continue out a these numbers of portfolio. And think the perform We to the think on

got handful that’s now to sort on give and a that consistently push It’s to do to But guidance of I of bring down. continue really focused with on the only XX% hope to more we’ve think of we some tried work names. those. portfolio. We’ve

ways it’s above. some all kind of in So the

Ken Lee

again. there. Got Thanks, Very helpful you.

Operator

And Raymond next Instructions] Robert from James. with [Operator question Dodd our comes

Robert Dodd

Hi guys, A environment. question congratulations restructuring of on the the quarter. on kind

restructuring you’ve prior If obviously those and out one when progress we and have you come NBG, one, valuations – Wittur down came quarter. on look of at mean, about the this on But et cetera. calls, talked – chapter I those of to you are wanted made

So there imply outcomes ago. worse that have been would that say you’re than months expecting three tend to slightly may the

So can known you months and Is give deterioration just businesses those lower of or groups drove recovery that, that it than value us incremental any a issues driving that, less color the lender were enough? worse? on the today restructuring ongoing was slightly that? fair that, three what’s environment when cooperative ago being that Is

Dan Pietrzak

And our I to our think Robert. prepared think I remarks Brian in were morning, was that get cetera, I be in restructurings well. final just done. mean, Good glad on done. we the Yes. those as were Wittur regulatory want subject remarks, we et And might to we’ll I It’s to clear this quite to but add think to call to still get it approvals, announced. – pleased

I team, think dedicated a this space. got focused we’re fortunate that on we’ve

really is think much or I this. probably wouldn’t environment necessarily that into more too I I read in the situations. don’t – think helps these difficult probably

difficult of got I as was it went think difficult more situation probably along. and more a NBG

of with business ended globally. the power that up really marks. yielded relates did numbers or being it standalone a that sort have Wittur and reconstituted company That And you complicated a think other I that it in was level strong things. a see and itself jurisdictions was up process the of arguably any footprint that to process business. not being is good a of as a bunch liquidated a then part part name of as of ended pricing It

Brian Gerson

tend I a winding the to negotiations. look, road. I course mean, change Yes. these take Things over long restructurings think and of

both value of in the of companies or PRG on some Board, value Where of own great team hopefully think things, done other That the things. management, control our create means the Time that [ph], in direction, of companies, hopefully, those case have had situations. those tell think really we at yes, all in majority those when an some real I APX we’ve where we the outcomes you similar I we of look of company, can like stock. things appreciation the strategic sorts equity but both businesses. and has some will sort

Dan Pietrzak

comments, restrictions we’ll equity done, Brian’s today. post own on clear be to just getting those own And the Yes. not the

Robert Dodd

that. Thank you. for you Thank the it. on clarity Got

I kind spread slide, the on may finally. valuation narrowing mean, high of is be On I think bid there indication, the the the Dan,

we refinancing. lot as… wouldn’t but give mix things maybe dividend platform of rather dividend of should expect any of seeing us more of you’re color necessarily activity So new a and kind recaps, that you the pipeline than type what in maturity can companies I – what expect portfolio on

Dan Pietrzak

to. happy No,

I think you’re correct.

should portfolio new names. expect You

the the think environment I or continue. business add-on add-on will

the north sort sort They’re better But I of well. last company I committed I have some of do looking dollars think private of the we usually know across loans us. were mean, think you these at those today, of sort M&A can would night the we that so new transactions you and since there’s about situations. driven. to. mean, for That’s billion a entire numbers – of of of couple are credit are the that sort platform I

no my get There’s But that. the all necessarily but required of in piece QX level in close close. or remarks of sort activity I mention won’t these of in up. deals to one QX is some or deals new you all approvals big done, thing of the should line a those expect maybe those is, even obviously not have portfolio. sort items some of guarantees them that is The picked did definitely FSK But

Robert Dodd

Thank it. Got you.

Dan Pietrzak

you. Thank

Operator

next And Securities. question comes Instructions] from Mark [Operator Hughes with our Truist

Mark Hughes

Good Thanks. Yes. morning.

Dan Pietrzak

morning. Good

Mark Hughes

of near-term in perhaps a participation their In thinking figure kind do think a permanent as about do shift that’ll you banks think asset slowdown you the the out bank? be the financing, from their in Or banks requirements? backed away just the that’s and capital the

Dan Pietrzak

a I some environment of both. both. certain think they’re is a have forced expect perspective U.S. I in the as even manage capital would I to just a be it I sort It’s for asset classes, of near-term clearly points good how cornerstone or from amount the banks liquidity. wait And are that’s probably attractive of evolves, space. bit sort of continue, it’s think of think but to of And of they a consolidation bit going sort there I right sort sort little not probably But – might you probably and certain of think I until mean, the then a to story of

Mark Hughes

be your about you the when in you up activity think up, parallel? will think Yes. you ramping And portfolio, payoffs deal do then see ramping is

Dan Pietrzak

months deal on of I quarters even but or of to maybe of of close, activity, I take We more an There’s a on would probably gotten before, we And mentioned couple been think commit thing. expecting I the little while do. mismatch as a of – those. several mean, a refied maybe it to immediate several both new we’ve just so there’s might of bit you sides. some deals that that’s out sort we’re of, some

Mark Hughes

spicy I’m that in environment? you opinion rates on just will the to for you how a you longer. curious, cut fed think strong do about Will or do? informed and they’ll interest maybe seem view recognize think the what Any higher behave pretty they this not have

Dan Pietrzak

Yes.

to I think always to do. predict tough the it’s going what fed’s

more quite the I seems to well. hire frankly, for be about just doing quite think comment economy the longer is

to that if of slightly money, be in had People good think continuing consumer you view a spend I probably crowded. airports in to a out. year restaurants asked sort me played But – would’ve it be would’ve seem I different seems shape. are good of the to are crowded, how a ago,

more I’m longer. hikes night, be giving out fed going would of – So of a just governors there like higher comments snap sure how too they’ll you’re it from rate not different this couple it this views. feels see feel like a be, kind read their for of any, There’s quick of couple But if doesn’t to I it kind last back. sort but many morning

Mark Hughes

Understood. Appreciate it.

Michael Forman

Thank you.

Operator

from Melissa question Morgan. Instructions] comes And Wedel next with J.P. [Operator our

Melissa Wedel

taking I Good them was dividend. actually my questions. been the lot already A asked your Thanks answered. on to of and could morning. have earlier comments back go for we hoping,

full level income of a as just is of minimum spillover dividend You what year the for $X.XX could payout XXXX. a you us a mentioned of remind of at Was hoping the sort second quarter?

Steven Lilly

sort Yes, publish a $XXX the between of $XXX in Melissa, XX-K. that it’s million. million and once Steven. We It’s year

so sort an year. during And of the estimate it’s

of north dividends. quarters quarters, us that between So three puts still and two two of

feel where very are. about we good So

the in levels we have in areas industry. think the highest of I kind

nice So for us. a level it’s

Dan Pietrzak

the supplemental, that Melissa, And and there the remember declared then sort was special. of dividend we of $X.XX the the the is sort $X.XX buildup base, six

Melissa Wedel

given or spillover Steven end the for sort that the level additional… coverage should I’m potential timing board two Yes. is of quarters intend you something to income of year that around of mentioned, just say you wondering, that I and specials sort expect revisit or of the

Steven Lilly

this also things one, not date board. board clearly the with get two the not the into from conversation sure. that having that fact – had had not Number we preclude the Well, conversation that this we does conversation have to we’ve of further with year. It extending a to yet wanted us

how the it So the we’ll would next would conversation it have meeting, I meeting our would to think wait probably year. in the and comes. of bookings see in February of November were be to be earliest would occur latest be, our that

So a to come there. little more

Melissa Wedel

Steven. Thanks, it. Appreciate

Steven Lilly

you. Thank

Operator

Riley. from question Bryce our Rowe Instructions] B. with [Operator next comes And

Bryce Rowe

within balance just JV. Thanks. both on and lower the Wanted start the at the Good morning. on leverage to net sheet of maybe – dynamic BDC

a seeing down, what thinking to And the curious that about with and maybe the dynamic follow-up up you’re time? that, to back how similar what kind relever JV’s to within of then of debt over BDC. equity going might Just just level

Dan Pietrzak

find wouldn’t there. the two morning. or I of Yes. try tie sort a good linkage to And together

normal business. I course think of it’s

that’s at times. think X.XX I

think to operate, to dry where the powder. I and before, sort within I the said some we’re ROE pay sort downs. at there’ll income target of sort new – of nice getting both we operating think some the have for There’ll can But range these, as be we’re of generate and I deals continue if net be funded. that and of sort there, of it’s

Bryce Rowe

That’s Okay. debt markets kind a we’ve maybe seen recently. here back little Dan. of fair, up gears open capital switching And bit,

looks time Thanks. your to right but maturities, thinking if mix kind and get debt quite got about, XXXX of relative to and there from You’ve half about year trying a a now until capital bit maybe you’re it think I’m to now. like of active of what curious how year, just

Dan Pietrzak

something talk about. markets the reopen good to see a as been there. it’s that Clearly, it’s sort we of No, always team

think XX quite been over the today. north that’s billion, done I I last of what to we’ve with out the the we’ve mean, capital $X.X of pleased handful years. revolver with structure

the second quarters, You’re next no right. are XXXX the maturities $XXX odd half the all four There’s maturities, of of over million the the kind year. which are

of position. some think us mentioned Steven I So puts pretty sort the it bilateral that of we strong extend. financings did a in

market. this in active been we’ve think, I

a continue unsecured I mix to think the see as to and and we probably going to of active from of keep will sort be revolver continue kind today sort we’re of perspective. you

Bryce Rowe

taking questions. Excellent. Great. Thanks for the

Dan Pietrzak

Thank you.

Operator

for now showing turn like I’m I questions no further closing the back conference remarks. time. at this would to Pietrzak to Dan

Dan Pietrzak

and speak today Thank quarter. enjoy next great rest the and you summer Thank your all for you. hope with you of your all you time questions. we’ll We the

Operator

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

You may now disconnect.

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.