HRZN - Earnings call transcript Q3 2018 | Horizon Technology Finance Corporation

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Operator

Good morning and welcome to Horizon Technology Finance’s Third Quarter 2018 Conference Call. Today’s call is being recorded. All lines have been placed on mute.

We will conduct a question and answer session after the opening remarks. Instructions will follow at that time. to for conference of introductions Harbor like Bacon to the now statements. Horizon of and would turn over the Megan Safe I a reading ahead. go Please

Megan Bacon

XXXX Horizon Thank Rob are, Trolio, Chief Michaud, Finance you. Chief to Gerry Chairman, Representing the Officer; and And Third Company welcome Pomeroy, Quarter President; Conference Executive today Financial Call. the Technology Dan Officer.

and horizontechfinance.com. the would that the press release Before Company’s out QX on available site point we Form like begin, are to I Web XX-Q earnings

Now, the read I statement. will Harbor Safe following

conference uncertainties call, statements, are Company. cause future expressions factors anticipates, this performance from statements. forward-looking conditions. Certain to results and Horizon During expects, make actual those Technology similar in forward-looking the certain including the used predicting a statements. Finance statements projected the These forward-looking material to forward-looking Words could of regard results differ believes, are to on or subject will such identify as these statements basis in with intends, future inherent to

new statements, this undertakes whether or events over update Pomeroy. Rob like And Exchange Company some Company’s call Securities XX, year The any to in December the the filings Company’s with I these in or result and to detailed of no would obligation Factor ended At discussion revise information, time, as to forward-looking Risk future including XX-K a for the otherwise. the XXXX. Form turn the factors Commission, the of are

Rob Pomeroy

notable quarter, important a first strategies in positive of strong of areas. earlier generated Good implementing we morning XXXX, and thank the third we number the joining year, established for on all you half our the made in results momentum Building progress for established in us. the we

backlog our since products. earning posted investment our quarter, non-accrual We’ve on grew the that growth, no new only the income net strong finished debt third demand the net Specifically, portfolio quarter share. NAV consecutive committed XXXX, of investment $X.XX our for our We with had distribution one consecutive the per we share of ventured Horizon’s cover and quarter second and beginning for highlighting by per the loans grew for quarter. of $X.XX non-accrual income

leverage Finally, proposal portfolio the strongly with discuss align remains potential, past passed during this yesterday strengthen The These Today, growth Credit detail. the million steps by investment the income. ensure Business Small earlier $XX contributed interest will higher increased our approved our Act possible liquidity Availability this to quarters more two our as made implement loan as the year. shareholders should progress well to we by shareholders. growth of in over our has and

to the We BDC rate the of floating in highest portfolios continue loan yielding industry. maintain one

and scheduled quarter, income fee For the as yield for and takes the liquidity from into past which interest was XX.X% quarters, our well four consideration debt portfolio regularly as income, events. third XX.X%

the third in portfolio of us than million, enable loans earnings As pace in more events has $XX quarter $XX portfolio XXXX's prepayments we seven over present to our which opportunities of to accelerated liquidity in increase and totaling discussed have We on size funded higher stable XXXX, normalized of and Prepayment by XXXX previous continue levels. power. calls, from terms million. new a for will more income the relative to

for we also strong approved backlog We closed in $XX demand committed increased to $XX the commitments our and believe million highlights capital. our growth approvals which and new that million,

third one have quarter. progress had Again, to of only on make during of the new XXXX, we the and quality. the since the to no loans continue end loan not-accrual non-accrual first We on quarter portfolios' at quarter credit the

third agreement improved M&A for Three definitive into during to our activity some portfolio entered portfolio in the technology the are has companies. market companies prospects We the see continuing quarter. be a to acquired that for

in in As over we past fair monthly our the portfolio board value our value an an share and and in had the we of in distributions quarters increase the NII I This loan companies. fair earlier, of be $X.XX and the to can mentioned in stability the NAV. hold upon increase outlook, March of attributed our Based our three January, the private growth per XXXX. for February declared portfolio warrants

share investment time with $X.XX this declared per maintain We have consecutive share distributions distributions an and by our undistributed future shareholders support to that now net We quarters. nine are at providing distributions. income per $X.XX over level committed remain covered spillover in of for our

the Board implementation of that additional joint venture with coverage New at venture second reduced that the with approved and Investors to in Directors which pleased shareholders voted to early complement We asset June. was Horizon expand of leverage test, and Arena the our We Life the approve our established are by quarter our brand York we in the will market lending position. leveraged believe

for of technology Horizon stage alter senior life investment not loans the It important sponsored to requirements well to to been to securities equivalent Rather, ratio. science its X; in immediately, XXX% and prudent will reduced to debt is senior from effective ratio to and and to be X:X note Specifically markets. that strategy. continue debt equivalent we companies secured intend have continue XXX% asset development equity provide to coverage equity to a Horizon's X in leverage its utilization to will the

market, mentioned able improved on higher equity produce we for leverage, even taking consideration achieve moderately can increase yields current the the at and to are shareholders. we net income quarter, return levels, last the As in increased investment into our that

to target in into X to from effect, range X.X: asset modified coverage a leverage X.X:X. to seek opportunities Now, our increase that are expect we the requirements

the flexibility over coming our manner target a provide portfolio. the quarters in disciplined and us We strategy previous execute X.XX:X, assets will will from to of diversify which and this judiciously grow investment increased

We to reduced advisor In management and we fee with our gross $XXX,XXX. to progress which X.X% credit our performance coverage strengthen agreement Cap during in by leverage. has of making during liquidity To continues enhance solid shareholders as we waived substantial and agreement we access a agreed our further Horizon's quarter. fees third on the NII, fronts. on align and has advisor quarter covering The addition to now the was $XXX to base new portfolio, that while the protection waive Total deferred continue equivalent and cash XXXX. success was the advisor further total implemented earned third advisory quality, of proposal, dividend was to ensures Fee conclude, a approved grew the number our with strong and achieved percentage provide cash now amount the activity to growth continue to to potential. the The and our see will expanded as increased who waiver Mechanism and I Deferral will to performance and XXXX At market asset will detail the strong interests financial the previously the the who recoupment Jerry new The incentive $XXX,XXX environment, and investment origination conditions. advisor shareholders update exceeds have over and assets to continue our then through call our of approved backlog. million. includes waive turn operating on business Dan, same efforts time, we development and amounts

Gerry Michaud

Thanks, everyone. morning, Rob. Good

portfolio, added based continued transaction When quality we growth quarter, yields the totaling new on debt our store $XX managed adding loans of During seven portfolio. venture execute attractive floating on-boarding to to strategy we high rate sustained our million. We XXXX strong third on with on achieved over and grown quarters, year-to-date achieved portfolio portfolio have quality consistently we the now combined with the focus maintained in seven has date a growth product yields. XX% and in last XXXX, while our strong

the economic reality rate to During growing strategy the quarter, provide environment. reflected a rising life benefits XX.X% companies, our the of as of science well solutions secured technology as of debt on-boarding senior yields and our to

in two prepayment have including million, income these accelerated QX was yield quarter credit of XX.X%. the $X.X in resulted two for portfolio of the during exit our portfolio exits We of a The XXXX. of in from loan successful rated the the and SavingStar, events totaling which quarter, portfolio

lower maintain opportunities prepayment the while prepayment high in debt income one quarters, investments than we industry was going prior yielding and with of our loans, of highest was higher adding with the forward. new continued when predictable While more a it yielding stream, to growing portfolio ETPs with activity BDC combined portfolios all

$XX in backlog of committed addition In fair million. the value at we companies of closed million compared a XX backlog end quarter, $XX a At and also million quarter, during commitments loan approvals of and million with portfolio a funding new in equity activity our the $XX to of $XX.X quarter warrant the the end to QX. ended with of held and we positions the

an end, had eAsic, to proceeds and two of existing value transactions, $X.X our in one have early Subsequent we quarter, investments received and warrant QX increased our $XX.X Ekahau, M&A $XX which announced loan addition warrant two the of of warrant also and $X QX of approximately quarter three had totaling million. totaling companies the during been QX. new CM, new we approved Spring portfolio transactions In million and in transaction million awarded impact of million to

and awarded million. of of pipeline over of opportunities as today Our XX $XXX new $XX.X to million backlog committed approved companies a is and

already In portfolio income prepayment two exited and quarter, the $X.X companies have in of in accelerated addition, fourth million. we resulting

anticipated backlog be the of exit quarter With one coming we a very active aware as also in QX committed quarter to take place solid exit the fourth could that well. We’re and expect additional activity, our into quarter.

will with ultimate while our goal modest more quarter accelerated NII the portfolio. for stream a be predictable combined portfolio to growing income prepayment Our to high yield from and enhancing growth growing with achieve continue income

according capital quarter QX. to XX% to venture companies strengthened the third VC $XX QX with over transactions environment, across back for VC invested Moneytree. investment during were X,XXX new Billion to now Turning up highs Investments to the

nine or deal $XX value. already billion angel company for deal in was and value a a XXXX remains annual back prospects first quarter which reflects meet continue slight seed and high the on in indication invested the across stages, positive third a pace terms in During VC exceed companies, reduction potential of Despite to during in of months to levels, XXXX which quarters. decade XXXX, as debt new we formation future view early

of we exceed Horizon. IPO remains QX milestone seen percentage exited capital $XX year exists a is totals on to number have being as XXXX meet greater and billion due to for exit in year-end much pace encouraging part XXXX venture has over XXXX achieved. the exited activity in in to terms backed easily of a we well PitchBook. slowdown. quarter, XXXX, totals. indication fifth including In continues in companies life needed valuations should consecutive third healthier fund been to A Total In that no to XXXX the VC or sector, of exceed fund-raising XX of provide reinvestment. capital now already XX saw raising, at XXXX shows in according reflecting the VC significant larger for surpass market IPOs, returns which to expected science LPs is the and by backed raised bodes

public we favorable biotech conditions strong especially run. Given their continue market expect IPOs IPOs, in for to

under companies public One go recently of the to our science Jobs Act. has portfolio filed

to market related companies. to now Horizon quarter, Turning debt. remained third robust demand markets. and market see our with continues medical In equity device science life active the core to for the solid an

During million developer the loan quarter, a CSA closed protected we facility cryotherapy novel medical of Medical, venture devices. to $XX

healthy in in continues debt added in the technology disease remains a to curable available window. pioneer detection landscape, and positive healthcare quarter. eye beginning to growth Internet to to broader the Additionally, The and Autonomous of very see market Companies portfolio signs and molecular AI the new FinTech Technology, we age technology related grow. dominate Vehicles, tech third with degeneration continue MacuLogix, equity investment companies. and and our funding our are for sector VC oriented IPO for We healthcare active for the

and portfolio QX. in the had in quarter As mentioned during earlier, we two our already third own one

prior the venture was in the debt the competitive third quarters. general we environment consistent have landscape, experienced with what quarter recent Regarding in

relax structure market strategic have three applied the cautionary larger While increase this recognize provided the terms transactions debt to pressure that requests which we and position middle XX and we continue past lenders, an by market. taken these and We transaction other seen we also in a afflicting market. being three to past market past quarters of market now lending the beginning to see venture to our raises products, during over issues. debt for related milestones have and risk quarters, some been overall debt an months, to are more see have a to potential same otherwise our for venture Covenant the light positive strong lending note demand by borrowers defensive debt

many growth On growth funding and combination of sizes revenue the a of competition from and by trends positive rounds. are side, larger Despite larger significant equity driven covenants Horizon’s the year loan innovate lighter often different companies sources, opportunities. and to to XX continue investment core us positioned reputation makes identify attractive presence provide And well in our capital to market markets. we in win

the in we VC exit third over backed strength financing science on the to companies. credit robust Dan. companies on and portfolio that the provide with levels growth. Horizon its investment quarters, call sustained both we investments these with and in and expect deliver market, IPO now disciplined of for Additionally, to turn opportunities debt pipeline, particularly their Based long-term update, investment focus continue With quality I'll trends VC proceeding quarter will to and continued the to record life believe

Dan Trolio

as was portfolio. our 'XX. for third interest given on quarter to million for income everyone. to good million and quarter the higher discuss earned financial compared third XXXX. Gerry, $X.X Thanks, the of quarter of increase results 'XX total Horizon investments size income briefly The of investment will the for $X.X third our now larger the of loan I morning, due average of

compared quarter, on-boarding For loan third yields quarter. second to achieved XX.X% in the of XX.X% the we

the loan year's the Our XX.X% third quarter second of last portfolio third in for was the quarter. compared XX.X% and XXXX to for XX.X% yield quarter

prepayments the mentioned prepayment prepayments, and yields turn the unamortized by payments. As of past, timing originations from and changes are fees of the loan to fee those in timing related new our of and previously acceleration income portfolio extent of including the loan the driven primary end period-to-period and

'XX. to our prior in the change $X.X $X.X period. in compared average year-over-year net third expense million the growth were primarily Turning the our Interest increase fee $X.X an investment quarter average with of with size in to for total to million in expenses, year to million of increased change compared This year million million, due third was compared Base primarily to expenses $X This the $X.X due quarter borrowing. prior the to increase million management was the year-over-year period. $X.X portfolio. in

XXXX. incentive addition, expense of In $XXX,XXX the we quarter third in fee recorded of

receipt As the the in agreement amount that of of March deferred XXXX year. the irrevocably XXXX, the fees be under previously Advisor previously mentioned, it waived to incentive receive for the entitled to may management related investment

would 'XX the share 'XX, which was $XXX,XXX, During the fee income performance take. quarter per the year. for third have Net waived of $X.XX the with of second then quarter per otherwise based the this quarter share in $X.XX investment incentive of Advisor share of expenses compared the for and advisor quarter third per $X.XX third

income our of As undistributed the remains with for Company's cover XXth at net quarter, $X.XX investment third distribution share. per we spillover as income the September

XXXX with aggregate an in $XXX with $X with investment fair $X companies quarter in and JV of portfolio million, totaled which due in debt share Our companies as $XX ended in events, the increased quarter, which fair of The aggregate interest activities with million NAV a our XXth $XX.XX aggregate principal company an other scheduled includes million our equity prepayments. originations million as aggregate portfolio the payments million, in value September our new in To per $XX.XX and equity and quarter. million. of million, principal offset fair to value four fair third by in was with fair $XX companies $X compared the increase warrants. of which primarily position of investments value value We $X investments portfolio value the of was an summarize successful prior of warrant third portfolio million, of XX for an to $XXX XX were

we’ve principal in past, bear the As interest nearly amount increase our as of with XXX% at interest of floating outstanding rise. rates investments to the structured coupons debt are highlighted rates that

Horizon believe from benefit income both we expanding rate and positioned margin. net such, As a experienced environment interest to well increasing remains and rising

million in in $XX the ended in facility. our with quarter million $X liquidity. our under includes liquidity, existing funds and available This cash Horizon at $XX Looking million available credit

we with our XXth, had outstanding facility credit under September of KeyBanc. As million $XX

lower the X.X:X approved our X.XX: X. X.X: of requirements. X leverage recently to to shareholders our part to proposal from the previous opportunities asset mentioned, our to target a increase we And to coverage as Rob seek intend result, As range

prior we In discussed on owned addition, a in Investors. quarter equal we venture Arena second as by the on basis call, established the joint an Horizon and

or investment York continue to leverage beginning JV us to to reach this several access We certain quarter to quarters year’s thresholds New expect XXXX, fourth over calculate will Life. from the which expect the and of next the during enable

call hold be Lastly, This questions to our note quarter report to early our have may opening in conference XXXX we take concludes March. I'd happy plan We’ll time. next like to at that remarks. you fourth this results to

Operator

Ryan Instructions]. Thank from from comes KBW. question you first And [Operator our Lynch

now Your open. line is

Ryan Lynch

growth actually this quarter. growth I curious, question I Horizon guys you fund. you senior have First guys any I had, net in portfolio but in was didn’t guess had can good you -- loan walk just portfolio growth

through is loans Horizon's So or can walk fund senior what actually Horizon's on versus which loan actually you loan fund? balance maybe what sheet termination between placed on loans sheet go just loans and me into be what get balance this could the

Dan Trolio

So JV Horizon. to in of similar senior the the at QX. and loan it in we in with it's It’s mentioned the strategy as the the we the early end strategy closed process

in months So the with Arena our we’re investor. we’re process in JV working four to three through and the

opportunity we we discussed what another then with manages opportunities in and side as its we do normally And and through Horizon those arena goes those an So that is as platform. portfolio investment JV process. there the

Ryan Lynch

so also if essentially loans, the you as sheet case well put guys it sheet guys you want some was actually fund. so as on and placed was obviously on the quarter. fund. to with those some loans put be that today on they loans that’s like balance ones the within who you split And the Arena guys So sheet, in could the it your -- you didn’t balance the the this the loans balance put Were those

none understanding of why some into of quarter? quarter, trying those Just actually you loans to made when were loans this last guys placed fund the

Rob Pomeroy

is -- timing intention a Rob, I balance between on our it this sheet joint deals think of Ryan split thing. venture. the and to about more with the -- It's

make that the said, Dan to we'll process as So effectively. work work through

expect to we would I forward to so placed and those up new loans on And JV some and loans the loans be JV going in for already and that funded the the have see the of some two some balance sheet. on --

Ryan Lynch

the And immaterial waive incentive then the an the remainder regarding made waiver, have of or you guys fee decision XXXX, to deferred the that’s now. fee portion not the through of

I’m is XXXX. the just we wondering continuing as for to thought is what process So, waiver? look What potentially that --

Rob Pomeroy

decision We March made do in the that. to

at the look XXXX, time. For outlook take make year in next a we’ll decision a that at and

Operator

our question from And from Dodd you. comes Robert next Thank Raymond James.

open. now is line Your

Robert Dodd

questions down seemed they yield gone quarter Congrats then over period. QX base on mean, versus and side, QX quarter four yields is the the up. LIBOR if been quarters the fees have it a were part I amortization XX And on in prepay, I the I pretty Joe’s quarter, in the I regular versus in look market if if tick But covering just dividend -- competitive. at just was anything the pretty stable XX.X the couple this they as prior I yields second overall spread. to XX.X tiny stable that QX, to last point, the rates quarter, up was if on but amortization look and mean of quarter. a on-boarding Obviously, got have XX.X. right, well, And the last

a and maybe average little and two on-boarding competitive up us yields fee So, I reconcile mean higher markets. can it to are spreads for that’s things bit you a highly in be competitive a seems pretty stable, like going when sounds rare market those in higher income

issues you those us? reconcile for can So

Gerry Michaud

maybe that particular could had So or to a I relative as to impacted investors, going and able on have have be two were we transactions to which -- the just There wouldn’t deal. one was the indication. insight It the transaction could here. take the quarter an borrower, one the track on trend we relationship related with

relative again very rates to competitive it I And compared necessarily we market. today, as right are to the it well points wouldn’t think relatively quarter ways compete So rate on but a a take other actually relatively other in relative million is to interest I going. where $XX absolutely focused the third where in to And all we is -- are as always you’re this are But they quarters. structure fundings one finding transaction quarter absolutely the like overall are those things. was both

it more draw on any give I So, before would a quarters couple of we that. conclusions

Robert Dodd

things they structure, I shareholder do take facility, liability bond, obviously, it's the of covenant approval like a one-to-one the your of presume also just can does and a over which adjusted obviously And you to either ready equity. on to need then to net baby and is to a shareholder the debt looks just or or then the approval And right those have advantage you key on base. covenants covenant Do now? go borrowing are go very which worth before just XXx, be --

Gerry Michaud

those that take of of it advantage to documents in either today. will prohibit us they nothing There's are as

Robert Dodd

you've needs I -- consideration? I to X.X it you related a X.X, dividend want if fee. 'XX not asset that was order X.X, mean, one the in not with done or more. now X.X? will lower fee that can, that mean, to cover why It's announced above come Obviously, that's you've be needs went through board process it if to the on right. base up a is I -- more the X.XX? for that seems And me then was that that the the incremental an what to separate incremental? desire to why And I on what mean, why I it in the

Rob Pomeroy

of the on to thought X.X the a was and and took unpunished. ROE argument good we peers down they about no look would because Robert, preamble, NII. at we that average at to increased not about your and this There's managers, all a -- hard the leverage with about that deed was said, essence But all are. margin, goes the the not lot in appreciate managers where our it's X.XX, X.X also helps people we on thought I

And so X.X. on assets we we decided should forward, loans think just -- leverage. above going And you on on were not it did I X:X those as that note

to equity continue we're if grow, some able average the So, to on at both debt point and down. margin, will the fee

Operator

Thank Alexander you. Compass And our next question comes from Point. from Casey

now Your line is open.

Casey Alexander

Can only leverage, increased for you the And filing from the I explain not XX%. the that it only or outstanding your at last the technicalities that for the looking vote of actually shares night of the that leverage? so is XX% voted asked appears reason

So, a positive the XX% for of I'm achieving when what the of less curious vote the just than are technicalities proposal? new voted shareholders

Rob Pomeroy

voting stock than that vote was have there to are technicalities for a have me. have to or understand quorum it, on vote, not more the shareholders than shareholder for. vote. XX% And held those I but to register leverage is you leverage quorum in the achieve lawyer the September. the to date, you hurdles then In for case for voters, the I'm two think early the Casey which of -- as more needed raise a to you was One XX% I So the of of shares

the XX% shares of had had total about favor we voted, and close who our of proposal voted people XX% voted. to in So the we of

Casey Alexander

the a as market in position? venture And you’re to debt to cautionary And big light Okay, entering I’m means Gerry, And Could comment defensive you cove I how a your to said market it regards structures what simple a base. a for for is task. believe position. that backlog, is retail your to special get explain defensive It's that Company as me curious explains difficult for not in appreciate vote it you shareholders has you. this about me can a BDC you. taking and thank me about remember. the I note provision. yet

Gerry Michaud

debt have the So we the see request absolutely three for form, increase on quarters, seen Casey significant larger over last we and borrowers the in a from those transactions.

As well. larger attractive they're accompanied the ramps, actually revenue by as as from as equity growth I either if revenue it’s speaking, being company, mentioned, also a companies generally well

continue fact protect in equity million if they what So continue forward to, XX% they’ve grew case going investment the the that they we the can’t make done $XX round to that. we that continue equity on It’s they trying transaction, be to to they structuring may to and done or looking to mean It’s have that that ourselves with will growth all thing. they about about the does they we’re to today, can’t, revenues enamored not not just we to us do do and able all way And and are that. be with in year. prior is do the about go about trajectory what that if but our do what able to be round relative it’s need the

over we year, they And the thing. that that’s relative then have But and continuing money will way to debt based making, continue to recent first trenching performed So will we use like the second to perform milestones the covenants. historically access the so them thing maybe commitment. the to a on relative and same look larger to our things thing deals is at

is So on covenants pipeline. that’s And trying plenty there we to may from that we protect the we we down that are are doing. yes, a believe pressure ourselves, continuing so one we competitive have that thing of still are but to put road standpoint we in do that,

transactions so get win the because pretty we transactions, can’t all lost couldn’t if attractive that’s So, we right one and have we thing. some structure, the

we’re a pretty Company, are being structure, the of transactions basis know and impact comparative down to on being XXXX material the good don’t started we since for better where at cap looking senior database a structure, we a we because out more things when the in have in have structure. cap further Second thing have go a we in the cap senior we transaction are can we feel the is

-- we that I transactions. So, we’re relative to these years someone of good in suggest the next going a in audience, sees gone the because but sitting out go in to be or and the probably as that incorporating is two regular I’m us revenues. not investment whether credit growth actually coming. it basically to But some not timeframe relative know is know -- don’t certainly, we’re And the cycle. to conferences, They’re we the to I on our to thinking panel conferences very now, basis, hit you going to go look strong everyone I’m I’ve trying over to very, equity downturn and all market give a on evaluate on a about enamored, in some that

recognize so appropriate really a say and we're we strong structure to that trying today. in I transactions just be cognizant of environment that won’t it And that or we’re in should

Casey Alexander

I’ve heard in Well, fourth the is the the prevalent of comment year credit cycle.

than not do whether making next I’m in going what different they companies terms sustainable versus evaluating over and you to what loan looking have and that couple already were done. you’re So that’s of sure by think you the forward might is of anything years the

different you ask me question. Let

are -- out keeping or the equity little portfolio more You and more deal portion larger. sizes diversified? a your the syndicating protect whole a mentioned and the that and thereby that sizes of raises asked being portion out of your smaller a you clubbing that deal are the Can sizes the deal deal by yourself

Gerry Michaud

strategy. always actually always that been part across done, it’s something we’ve our of That’s

think portfolio. million where so changed about that’s now backlog in that’s that XX certainly the we backlog that’s I committed I right is about how to awarded committed And $X.X XX million, about whole yes, $XX comfortable. think in our is size -- whole relative our sizes we’re hasn’t deals mean, place

Operator

Thank you. National Christopher last And comes our from question Testa from Securities.

line open. is Your now

Christopher Testa

comfortable feel repeatedly passed you touching Just terms any bit with, regarding of have the to might VC do in and done getting are might at or some proper cov you might Casey what is guys in if you good gets place? just a what something it where immediately instances and this loan if cove on are business light or little that’s be with light you loser the a was what a guys on that that the protections have Are there it's seeing. find terms deterioration

Gerry Michaud

perfect I XXXX was We actually, to through XXXX, horrible globally. think answer to there question time is that’s it. which overall went but a a great no

our what many ways portfolio were the portably in than that portfolio Our part to closely in and in relative VC to most were the were doing came suppose in companies product investors did with do that VC but them developing that classes of through investors very raise weren’t to was bad. we reason their the whatever, fact markets work allow the very get extent that capital, work lot for company did the or companies. with that us and that they asset portfolio the closely period. their portfolio to allowing the We and so because a And themselves in things to through

at decision do. looking fact difficult, that just we because matter you have bottom they do can a you are like your matter their companies just exposed, yourself putting is do. we firm work they that going of be portfolio And on might they that portfolio absolutely That a there. find be when things rank are aren’t facing probably that good if on I capital transactions. you at side going to investors think portfolio because be, to investors, the more the we’re like And VC have wrong So get no good part said, as ledger of just how the who the

own to it the we VCs are, the with have them, is what with very have them results, helped in as on who transaction. difficult not the fact relative to underwriting well. but our But by worked how we on situations we've structuring and relationships the solid do past, of just So good

Christopher Testa

early definitely stage the explanation And also lot and with That's stage of the that theme, you. in will more Thank or from mid is companies a affected at? you stage already. that deterioration look come sticking a the that good has guys later terms companies

Gerry Michaud

what larger technology, I in most I our that's true to the of whatever of would have unusual putting with Well, been, a fact way AI was or effect. it's is would money a But where markets a not in. has transaction come there trickledown maybe later say by trend there there I a toward VCs work. sizes it is would certain lot are call, the say also stage which technology in where is

of stage that requests debt and the that that. are down are absolutely that in some companies Sometimes companies come training can it seen trickle from early technologies pretty we have stage to very specific positive, earlier markets

Christopher Testa

have And give just the quarter. it investments just in was amount, one and slight color investment. you you increase were assuming probably why? system on internal rated your there this what Could am moved I on guys dollar the to that a some by

Rob Pomeroy

a portfolio. way into two stress raise Company, normal is that This company manage move or is of to a that we needs behind plan on if credit and putting Chris. the categories, materially is we money our feel it And we'll the the part

and deal the earlier our repayment credit think that get were actually was recoupment. sold able this the deal a to was was It the we company moved out was -- and quarter. able we to this to two-rated I a year of be history SavingStar, in full and moving tax on those that full including the Gerry was it sold mentioned similar

with So, very it's other recovery. we're we the come as But for that do twos we a of managing and deal the aggressively. expect all we a full side through will that watching

Christopher Testa

at of the gears and side looking switching And the just equation. financing

going as on almost pick do guys in more get don't up -- full, move but you some You leverage, forward. facility, seems utilized that could the it capacity credit have that obviously

guess, another Horizon? backlog, your mix? do makes it market the and unsecured You are a curious. that actually seems what prone upsize back you I just the think BDCs. that is the and to given up in most I'm also Or guys in note more you facility? Are opening sense you is the guys in from what for securitization done past So have potentially where are seeing spreads

Dan Trolio

just And correct activity a question of and with a you you're there's great and Chris, in that's of as bond couple a on finished. all up the has said, market options. securitization that opened deals three baby lot of those

our and KeyBanc And analyzing are and are currently current those facility. we with so discussions in we

as we're all in for analyzing get But we'll -- that there's process and of we us announce when it. analyzing the there's we So of there, get opportunity that in those and obviously. those, but closer good to three we're still

Christopher Testa

And might last me. just have I for missed this. one

a You was that? What the in income on thus guys far. amount related number I had received, the believe, fourth alluded prepayment of to quarter certain

Dan Trolio

$X.X million…

Christopher Testa

prepayment that does of fees that or include any acceleration all is And [OID]?

Gerry Michaud

That’s both…

Operator

Thank the for comments. closing no There are you. Rob call to back like would questions. I now further turn and to Chairman CEO Pomeroy,

Rob Pomeroy

with us forward you this Horizon, speaking all in continued your appreciate for joining and We look our will again conclude and This March. in Thank interest to support we morning. call. you Thanks.

Operator

gentlemen, thank conference. participation today’s in you for Ladies and program. This concludes your today’s

Everyone, may You great disconnect. day. all have a

Horizon Technology Finance (HRZN) 31 Oct 182018 Q3 Earnings call transcript