PFLT - Earnings call transcript Q1 2025 | PennantPark Floating Rate Capital Ltd.

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Operator

Good morning, and welcome to the PennantPark Floating Rate Capital's First Fiscal Quarter 2025 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions]

It is now my pleasure to turn the call over to Mr. Art Penn, Chairman and Chief Executive Officer of PennantPark Floating Rate Capital. Mr. your begin may you conference. Penn,

Arthur Penn

joined good Thank conference statements. Rick, welcome XXXX please I'd Allorto, call I'm to start forward-looking off some and everyone. to you, Earnings Chief PennantPark general Officer. Call. Quarter information and about you Fiscal Floating like First include Rick discussion disclosing morning, Rate Financial by today by Conference our Capital's a

Richard Allorto

harbor everyone is that note Thank property today's is in form to available you, in regarding Art. release information. An Rate on audio to our Please call I'd prohibited. is I'd any forward-looking being any of website. Floating that PennantPark remind of safe also this that like unauthorized strictly to the the disclosure like be of our attention recorded. and this call press call call will your replay Capital broadcast customary call the

not pennantpark.com forward-looking that We at the our projections, may to Today's and forward-looking SEC and from of please statements differ latest call important statements materially website for SEC To obtain undertake recent by ask us do we to cause most that factors also actual conference could results to refer filings include copies our update these you filings, our visit unless or projections. call required at our law. XXX-XXX-XXXX. with

back the this our Chairman to At Chief turn and Officer, I'd call like Penn. time, Executive Art to

Arthur Penn

then positioned up in minutes quarter for is to it a few market environment spend Q&A. discussing going how how private We're for the review a XX, of quarters, upcoming the ended lending, the current Rick. fared financials, detailed the middle open Thanks, the for December we portfolio market

per December net and was XX, share. ended per $X.XX investment net investment quarter share income income GAAP was the For our core $X.XX our

XX, prior December or our from $X.X billion to portfolio quarter. XX% of grew As the

a weighted originate and continued XX.X%. existing average we at quarter, to XX new yield and attractive XX million portfolio $XXX opportunities in of companies the investment During invested

quarter, a we COVID the and went We exit the led XXXX. completed X. shut shows. excellent of Events in of and successful in is our company management home X in in annualized team leader company's were the goods lender investment over Marketplace invested group during the a a to events X.Xx around our with During business-to-consumer XX% down EBITDA The the return generated Marketplace Events. worked the to We control took turn capital restructuring multiple on years. and a company. These

in and our our utilized a shareholders for We experience create and execution. strategic restructuring challenged through to situations operational significant value expertise complex navigate

We continue to see in an the core market. attractive vintage middle

quarter, EBITDA During was weighted new X.Xx in weighted to and average the value the coverage loan was to portfolio debt XX%. the average interest companies, was average The X.Xx. for weighted investments

and remain in to first to new companies. to to we quarter XXX core the continue be robust on a term to yield In end, XXX into to pipeline range. attractive to appears continue able plus Subsequent middle expect portfolio have the loans active, market market, deploy have SOFR lien stabilized the capital

believe to upper lower, tighter continue the and higher are loans core And spreads market middle originated we middle that are directly core indicate, in highlighted is excellent. market. leverage just vintage statistics the credit than market covenants current the the As of is middle

versus overall covenant the lowest is interest our income We of the and X.X% the is underwriting our kind to testament in or peers. income. continue only our meaningful PIK among in quality portfolio This and to industry, Pay is get a protection. our of

growing forward. are generate NII debt-to-equity of X.Xx XX, X.X:X, stable well to believe As and we the of with X and December ratio going target to we was our ratio that positioned

stability our expect investment joint the in to venture. due We part PSSL continued income, in investment in net

remained active portfolio quarter including companies average JV the JV of million XX, in and new December X $XXX $XXX million invested of weighted As during assets totaled yield a XX of existing PFLT. and the the at from portfolio XX.X%, billion and $X.X purchased

Last an $XXX to capital of that committed JV additional we and JV. the partner our million announced quarter, PFLT

is enhance consistent of additional momentum. with allow percentage. $X.X drive $XX.X grow the attractive to is on JV This continue capital share balance the which existing Our returns ownership JV's sheet that increase to million, mid-teens We to assets. the will PFLT's in economic earnings approximately of invested billion will and portfolio capital scale believe the

the facility the There facility quarter, to the the Truist million, interest revolving for is during resulting no of $XXX facility we in $XXX were our grew the so plus and by of credit million. Also terms changes commitments on total rate X.XX%.

a financings X, PFLT's at to generally X.XX%. a have of debt they X.Xx our continues financing other as maturity million term to the as attractive They table. a debt lower-risk for XXXX. the X-year a we other XX-year March. bond which environment X.XX% financing securitizations The structure we officer lien period spread average reinvestment The have a first expect priced new close be of contributor side to financing XX by $XXX financing and in favorable securitization week, are periods. the secured a weighted X- securitization main governed is was of reinvestment credit a are on similar may the Last to of for The creates transaction finance decrease the indenture of bank an X-year of existing weighted capital of early match ratio average spread and average new is by an decrease company. you junior AAA to good in a an instruments points a to this to The have we liquidity other which refinanced from July basis or weighted final of believe stated attractive maturity. a opposed We of plenty structures XX-year market to that with portion that assets. X.XX%, Additionally, securitization external spread was priced

be that CCC non credit assets how no again, with is excess all any is par, and gets deals time securitizations would securitization are And The will cause we further there experience note mark-to-market financing the financing an prescribes held if our securitizations, regardless this Once deterioration, are overcollateralization at securitization only which are counterparties. For market managed to downgrades mark-to-market cushions, via there asset means important of risk. which concentration an broader indenture. CCC volatility. the if that CCC vehicles mark-to-market. indenture mitigate with defaults whereby and are CCC It's risk importantly, of behavior from our irrational that or excess collaterals attractive the the prescribed

issued that that extraordinarily we through worked securitization of well portfolio. expected. capital depths financing XXXX, COVID managed cost our matched confidence of vehicles. driven and the securitizations Our we leveraged the has that the and in financing belief This September our our securitization attractive With exactly are securitizations risk, structure our to lower of lower first is lien for an an attractive provide portfolio, how

downside the important, mitigation of tool nature given Equally long-term and the a consistent they financing. stable provide

primarily GAAP in NAV increased X.X% nonaccruals add didn't status Credit net the cost Events. to of per strong. X.X% and NAV represent due portfolio from adjusted investment at quality The the new only per We of income Marketplace of quarter to and investments value. X.X% any remained and has portfolio nonaccrual $XX.XX market was our realization increase the $XX.XX onetime share for to from share.

market. is through leverage and portfolio's direct weighted X.Xx, X.Xx. coverage the this and As portfolios of most weighted a our in to middle focus core of the interest is security ratio on debt We industry December lending average the our XX, was portfolio's believe was average structured one the conservatively testament the

like being capital We as preservation for the lien a on States. lender senior secured positioned first focused United

with opportunities to the we borrowers. important where believe We market our investment strategic our to core that middle attractive on continue the capital focus provide provides company

services and sectors. market We cash also sectors value flow. record defense, the X health tend have have ask substantial track where These an services, financing technology. questions in track have and know middle we to growing government a record. generate domain of are business expertise, successfully sectors software long-term right They to and companies and by key excellent care free These strong consumer, resilient been have are generating

million define broadly is high-yield the markets In loan process does with EBITDA this the middle syndicated core which $XX strategic of million partner, market, with lending package $XX our the the compete not middle important an upper and In we are in or threshold to market. terms below peers as the we unlike we core of attractive. market, and because is companies receive

transactions diligence care, protect with have to structured covenants, thoughtfully meaningful sensible attractive we cushions co-investment. do to substantial We credit equity with spreads and equity our stats, our capital, weeks due many

in erosion is of of first reason This monitoring a a receive believe the well stay With virtually we this have positioned financial market, which to regard us middle Additionally, protect loans top help unlike help perspective, we our statements meaningful covenants, capital. the we're why our from to in the companies. covenants, environment. upper originated lien significant all on monthly

peers bigger intuitive less S&P, is of some more Many rate meaningful a of less higher reality those with companies may to sense, companies have to have performance. That differentiated this loans are middle the careful EBITDA with our an of core default market $XX than covenant to We the the companies important lower have and these focused monitoring the than bigger or believe protections higher loans million loans, recovery state on that of different. make part that market rate upper risky. been but and companies EBITDA. the diligence According tighter middle

XX we Since have has on loss been basis credit companies, is since XXX over Our annually. billion ratio $X.X inception PFLT invested XX excellent. years over experienced in only points XX has and inception, quality our only ago capital invested nonaccruals.

growth strategic of making in we company fuels portfolio capital, As the the in who provider cases, an upside a participate of equity many co-investment. the by companies, of our

and invested Overall multiple been Our through time. million in a have invested returns of co-investments equity $XXX capital December Xx. IRR XX, an inception of platform coinvestments have excellent XX% over equity over these have we generated on and our on from for

talented origination flow. is our team and and wide experienced active funnel deal Our producing

being capital investors. Our continued preservation focus patient remains on and

coupled are is and we goal to protected dividend aligned stream, and capital. the with preservation mission that do Everything steady, Our of stable goal.

pay seek have out in flow We instruments, cash flow and capture conversion. We cash market that secured the high shareholders. middle find senior we lien flows free companies our dividends that opportunities form primarily contractual first to those in free to investment growing cash of in

detail. over our financial take to me more CFO, results in the us turn Let through call the Rick, to

Richard Allorto

Thank you, Art.

of For fees incentive GAAP related was per the December impact income in investment to excludes on investment share $X.XX and net net investment accretion $X.XX quarter income, investment per net share ended share. per Marketplace our of Events. $X.XX the income income XX, accelerated core net the Core of was realization

interest and $XX.X were million. were on incentive follows: $XX.X as for for fees million. $X.X were expenses expenses debt General Operating and performance-based were million. the and quarter million. And Base taxes management were expenses administrative $X.X provision

change ended investments, $X.X XX, realized the on million. provision net for of For quarter a and loss December taxes unrealized was including

$XX.XX, $XX.XX per As from of adjusted and is share December last XX, GAAP X.X% NAV which both NAV up were quarter.

was is As XX, our capital secured of including across sources, funding debt. December both ratio X.Xx, diversified structure and and unsecured multiple our debt-to-equity

at follows: statistics on approximately As rate. X.X% investments across portfolio XX.X%, market equaled weighted in portfolio of equity PSSL debt, portfolio as PIK income first senior debt, debt income. of the were the We X% XXX% at yield lien X other floating The comprised secured The which XXX is X.X% is our December of average less companies with highly and different and X% total represent XX, remains XX of only and diversified our of key industries. portfolio had debt was our interest second in XX% cost of value. lien equity. in than nonaccruals, portfolio X% X.X%

to debt-to-equity EBITDA interest X.Xx. -- was portfolio our X.Xx the is Our debt coverage and on

Art. let me back the to turn Now call

Arthur Penn

our Thanks, investment for thank us. dedicated and talented commitment and to professionals of Thank continued for in for your you Rick. all In closing, team I'd and confidence your like its their shareholders. PFLT and to today time

concludes this time, That up call open to the like At questions. would remarks. I to our

Operator

call. our I'm sorry, -- first of going portion from Instructions] Brian question Q&A James. Raymond And our the Dodd come to from open [Operator now will Robert We is

Robert Dodd

so since On CCC -- into there's shadow it. facility, mark-to-market otherwise rating, the on the you so you can rating, a the come right, said bucket presumed securitization it's no

the securitization? you ratings but mark who shadow Obviously, change? what the other So does when the if the shadow all? those to inside ratings controls unless change, can said at market default, doesn't circumstances of how And

Arthur Penn

case, the and annual year, -- to Thanks, each S&P this if to an gets with annually to They them Yes. get Robert. in we one -- gets -- event update. an go And event we during share there's the the re-rate.

loans, have or they're good. -- up It's loans syndicated finger BSL where these there's us so to the an automatically these do So not pulse. when their to event, on so good are not probably either are

Robert Dodd

I than on Fair I have enough. a structure And know they then lower a just very there's mean, on how that good -- for been revolver. obviously, spread you.

So debt want be your it's to revolver chop in securitization stack of pretty attractive. would How comfortable much you having unsecured, however, you versus it?

Arthur Penn

Yes.

versus flexible. It we like for Revolver So both. kind -- term securitization view can of is It having we'd It's kind us. out like a revolver, of loan of revolver. fund. as a term can

revolvers in give revolver base cases to CCC a care needs funding of will right? take you is to immediate. certain the a to also, than good better that bucket, that it's some manage securitization. good of that's borrowing So And you the more kind If CCCs, are get have revolver

believe debt, So -- and having we too. we've unsecured

funding in believe to outcome. the things if diversified sources, we be move need being to able having So optimize around

we having having it's securitization the stack. our unsecured So a in we like capital a having like in out revolver, we and like the mind, revolver, of term

Robert Dodd

Got it. placements. market Congratulations on

how equity you questions, pick you've you more got one more lender control the and, color just because terms you you've this on like year the on Are more seeing owners shaking movement portfolio. to decision had to nice of some events? Are are equity from, obviously, Or out side? power that of any So you that? appetite wanting the a seeing Events return your seeing web. that's might -- obviously in So on equity pretty versus the monetize Marketplace on of marketplace have of you movement got kind in obviously,

Arthur Penn

an in as sponsors good where assess it liquidity. It marketplace more a we have to this be of after in and stake do as seems of equity time But when as we're we've it's would as higher kind XXXX passive well an do these for longer we liked. Interest events think options, it's is coming, ownership have for we a as co-invest seen will time to equity many may it's -- both as cases do Look, year. of rates time they year years not M&A generate Yes. of kind coming, active. private believe it in it's be low being like environment, the like. We're kind

market that $XX still grow see, That do core have runway wants said, in more the upper companies, the And been companies dormant think core, and it's the do and solution than where million, active. middle our we market, very in as add-on has different a lot some middle liquidity acquisitions. than you Upper $XX market. can the million, market, million there's those entrepreneur $XX to we've a been

on also we're So we be side, be going buy will side. think 'XX to to the active And on we active. continue the that believe exit

rotate think PFLT here Comvest has a We nicely equity about will that got, as said, X% portfolio. we XXXX. in

Robert Dodd

I if more, One Okay. can.

$X.X I really JV, capacity returns. now got to nice the mean, up billion, obviously, On

is is how 'XX mean, you're by, that going -- think mean... I fast a I longer do say, active, So it fill term? year-end you billion $X.X to or if

Arthur Penn

comprehensive. Yes. us, Look, X JV. and it's to PFLT all It's ecosystem, the all

we assets So PFLT. obviously put in

On move the makes sense. to them sees a they JV, over the while, we then when little initial, if it for applicable,

will 'XX busy. be comment, think So to the prior look, we

the So JV to to to we think billion get in months. that X we'll XX the be $X.X able next in the

Operator

next Citizens question from McKenna JMP. going our come is And Brian to from

Brian Mckenna

With $XXX more a bit originations, on question a of it robust was to Star. million have you leverage. capacity deployment So Clearly, on plus quarter. a

about over quarters? few pace the should the next we of how think originations So

Arthur Penn

ended quarter little is at little quarter point it was up an come a in in and movement. Calendar December. we're December. this which X, deals typical active seasonal for close takes a and by a January to slower, slower. that's air People Look, want They unusually always

repayments we are getting So right slower bit December, along and now, it's way. a it the in some was little than

quarter to right of but be of February my kind through XX, it's will in X modest. prior busy, now mode overall -- think we think kind calendar today, So I with QX 'XX again, ramp relatively comments,

of this to not stick we're going So portfolio try we're less or loan-to-value portfolio, and more and be our I zone. refis, look lose reload, for our sheet X% strike are for We're and mean XX%. it. to interest it the there's in deals to going that Xx see to you new no the to, Xx importantly, kind no That's And of most debt-to-EBITDA, pay, software where can both doing will get JV this some or cash ARR loans there's to selective. loans. remain look balance time the minds PIK only is that coverage,

try loan our try financing the We're revolvers the at posture conservative going level, to we've new been a through and to JV. way talking through keep to will the and about through we optimize then cautious securitization, and

Brian Mckenna

on Yes. weighted it's versus a That's add-on. just should the investments add-on? How to new helpful. think we of more And to mix about been then Clearly, originations. follow-up

next over of kind So the more expectation but And what's of new trajectory the to the kind balanced then become here exactly see split this start deals in time? does months, we'll M&A over call of XX it? broadly,

Arthur Penn

last can the of benefit term $XX like more we do not be in a do companies some things acquisitions, co-invest we do many strategic we're will in we deals will loans. kind about we it's point it to partner cases, draw is way from, where flow our million that up, and have in game or basis balanced. add-on we $XX delayed that EBITDA think plan grow those company. by things the about sponsor to We a substantial a prototypical the million one where and with delayed start we set With to nice million draw. Look, know to will What the $XX so of Yes. company built you're

it we you if do to kind right you way, -- because kind So the of set exactly a know how barrel in fish to it, flow is try you it's with, which some getting. you of of and in what shooting it's kind up begin comes know you're

Brian Mckenna

That's great. then for me. one, last just And one Okay.

bigger Just a question. picture

a clearly manages platform, the about great business AUM. PennantPark $XX of here, believe, broader built billion You've I

reach And mean, I'm of time, Just PFLT? where longer even the I for of over kind ultimately that as then curious, you platform does about thinking AUM? of growth the levels term? mean So scale, or what go trajectory does greater

Arthur Penn

$XX the take Yes. Look, in mission a couldn't floating PFLT, got platform secured private there talked that provide always market equity us. really to it fashion of we to you left to is $XX but and the of will with who AUM only in We can can to which we're to be. all sponsors, million up do a the now only talk who company few middle million rate are a do We EBITDA that that. can of to of $XX literally is one growth need like it of you and capital space million to senior willing from that, who do EBITDA many That's say you until out aren't the can people that conservative $XX million, and million up a place who us, $XX about, start in-house. at nice -- to

the space. to radar lenders the branded We're direct no kind of big below the have who massive below in interest of seem this radar

to use companies the we've about a that of lot runway. think interesting job -- it's thing could kinds there's about new back. and American So great learning It's entrepreneurs, the got we're all of and to we day, management industries, And this a best one There's get we there capital. get every financial sponsors our companies select and these about companies, of that out new learn parts meeting teams economy. we we new to of new which sponsors and is we're want

a of day to about it. think these all runway for a and economy long real excited to and lot be the see doing for a we're American come really there's in period direct. we're of what work We time. to it's every different So And areas. said joy We

Operator

is Truist. going Mark question come to next from Hughes Our from

Mark Hughes

Art, topics anything dodge the or economic around the day of tariff.

you relative do you portfolio, As of you're positioned some dynamics? look to at these think how your

Arthur Penn

Yes.

administration, kind And Far It's thankfully, it's So but the tariffs little maneuvers that Vietnam a many companies to given during already very proactively exposure. else on places tariff offshore prior those Those of there's the Trump of but bit usually around placed, Mexico manufacturing. outside are or or moved Mexico the or India not tariffs, it, -- also of East. limited really of or is material. other

tariffs of companies kind those many of again, part portfolio. is are and So small companies proactive our of the of but took back kind relatively action

Health is groups It's and Our are X and portfolio. economy. piece care of economy. one, largest of the XX% the U.S. U.S. our piece industry number number contracting over biggest health of the care, It's the government defense, two. largest

health you savings As side risk that your cost know, health is a providing care we focus companies of risk in in right the on reimbursement because are always care. on if

So that is deal savings delivering back high-quality one delivering with way and care. companies you cost you still are that

well to we back they're think we're to that is costs, in So thrown positioned are us win. weather because reducing that at going anything companies there we're

most contracting cybersecurity, I intelligence. computers, costs. companies these people of be again, businesses very can in of they where are sit A could nature. government doing the on on could not satellites, and them Same they doing be and/or It's lot the they behind right walk people that much upgrades either thing be side call things technology And government reducing missiles and of doing contracting. are they offices, of tanks into and

plus drill where for those of types are and contracting. There's government a plus margins XX%. margin. the To there's in further, EBITDA under the cases, team the And cost cost X down those reimbursing typically of is contracts government generally the

margins any companies exorbitant profit are not it's like So making cost-plus the of those in side.

well, to contractor on I if which service a price. to at the is And think well, they they fixed And going price have where then obviously, is if they if or piece to lower making price because fixed are a make price unless and very of contract we and are price, well, operators. where fixed fixed judicious And don't do and value portfolio the operators really provide lose that to excellent world is operate risk also excellent -- probably margins they contracts, make the they're they're headed good money. has you higher going going sure providing margins to the make The margins. believe the They're careful not it's the operate government. they're

So into answer, can like. and that's off-line, if long-winded a we go more you detail

But our think we're large, well the of positioned efficiently. and taxpayers watchful. as taxpayer -- spend dollars, we And is by its to dollars we and course, we're we're taxpayers, but government want

will we time on of we're So but it. top tell, believe

Mark Hughes

Understood. what terms or kind a quarter. quarters PSSL How some or portfolio of And anticipate coming should the of we shifts meaningful just should so? then moves think in this about visibility what from the we

Arthur Penn

earlier we where of in cycle and up on is of and depends ebbs that question, a are we It of of kind to It of term kind PSSL ramping kind the kind out Yes. thing. securitize flows. securitizations. view

sheet, then to So partner, the JV has will the every venture. PFLT over, JV partner. joint the transfer. will approval build of our in upon try Upon assets we'll as of partner over approval balance to it and then approve efficiently JV our finance Remember, we sell move asset the

also refinancing and and So just it on it flow needs. ebbs financing and deal flows, really depends

million securitization, a one need do small least assets medium kind To of to to place at $XXX in a have securitization. of securitization you do or

-- think facilities million, ramped facilities when to securitization. million that's $XXX $XXX for million when about get doing So up $XXX time a or us credit good to or

Operator

Schleien our Ladenburg. from And come from going question to is Mickey next

Mickey Schleien

some the year? stabilization the in quarter. spreads this like Art, that? you what your is for to slightly market spreads what were think behind outlook you mentioned understand I'd this that saw we of trends And

Arthur Penn

a certain math, Yes. of the million $XXX $XXX a us in What level drive middle this see million, just kind have million over market. the core you'll lender for make when $XXX it loves, was million -- question. middle kind loves, in scenario. spread Spreads just doesn't core loves to Good stabilized sense. of SOFR, Occasionally, particular for market, the a $XXX

was the helpful. So I think math

good relative people -- and can want But spread. their Leverage a to I the both feel that all of spread think and enhance of think unlevered that. return absolute a obviously double-digit investors. double-digit delivering the I kind about of to and a

market, then the syndicated also compressed. loan relative has And which broadly to

stable. So for now, it's

I think there's lot Washington, may will which this it. tighten will there's stability. if we at we goes tariffs, perhaps at all of the certainly all a they in into Fed, of supply-demand could with what on limited supply, impact, geopolitical widen. quarter But the goes hope supply, on spreads sphere, If the what or with point some next play X, least for time, this in sent

Mickey Schleien

for is than quarter you is high-level a us sort persisted strong cost. sense to your just That's was driving quite give good really less at XX% which ROE, Could what's is hear. great. of investment valued At But the markdowns, now those while? fund generating equity quarter a senior loan of which of after

Arthur Penn

the you also deals cover Mickey, perform well, retained the right? all So mean, as equity I industry and the PFLT. in does you and and take Not industry. CLO the JV co-invest, equity cover Yes. coinvest you is look, know, not

So the JV. of that that investment which have might part not co-invest is upside, some the

partner did JV coinvest. not to Our want

the in have to PFLT sheet. XX%, IC opportunity opportunity a we we not markdowns there's Xx default, when upside the BDC, balance that in the that the participate of or that there's in will participate when JV have and So

JV the so was not time of kind because really we have of that's the benefit -- the in in the markdowns, in some partner look you markdowns, markups. not our So but of can at if does the co-invest. participating the at up that's the And JV interested set participates

Mickey Schleien

A proportion What of was couple your of Yes, that million which your makes borrower's realize commitments, I unfunded questions. housekeeping sort sense. discretion? your case, I discretion understand. almost are of and didn't the at more $XXX versus that are

Arthur Penn

Yes.

Generally, if There's chime there's the is Allorto, of at and way. you see me their you I commitments. data some can in. X for Rick Let which have revolver, types

$XXX about to $XXX me, it's excuse think revolver. of be -- I million million

COVID, of And people were that's of not. when about So you XX% say to revolvers their go discretion. certain if Many I'd at drawn did COVID. people the kind revolver, drew back which was during

large. a making draws bit delayed meeting diligence. the commitments, to sure exact, $XXX million, discretion then $XXX we're our And by little that's doing at their delayed million are little We're draws and covenants and be a that their in and the more companies are over meeting because

that's a more So little bit way. in our

kind X are at they elements thing never happening time. And -- is these the the never they're of nice about same

You back go extent, revolvers no activity back. COVID, X everyone kind flow drew to draw people pulled went deal and was their some delay to there because the of to

the other when people draw not good, tends little be delayed activity times are draw bit the to and more a economic active. do hand, revolvers On

Mickey Schleien

Understood. Yes.

sense willing stock For to external managers much some lastly, fine. looks a you're just this Can balance liquidity current to terms from So time, NAV? issue are the the a example, external give subsidy I issuance, would sheet, And time manager just to NAV. ATM to at you extent, in of know relative how absorb? subsidizes the us of you issuing price of below so not

Arthur Penn

of is think every that. going and disclose quarter. it obviously, capturing be cases, activity a right? don't and to you deal vintage on vintage, good if you accretive activity, levels that We certain ATM So -- We lot vintage a for depending shareholders. I you're disclose think In think and depends the flow

you is to slower you not. vintage the think if you're or a if little You subsidize, attractive, less may may look

with with So price. basis our with what's new the market stock obviously a and is day it's then a what's going and on every day on going the case-by-case flow

circumstances consider the MCG a depends Capital. that company ago. a at good a at things shareholders, called are of are add these a very accretive in bought versions the ATMs really deal, that PFLT little long check accretive And that a added and that and will have ways, smaller facts lot point back busted wrote we to some going up ended company. Look, brought big to that, it to point. a for to deal. BDC lot being pretty time And really, the and it And a do time. It in on management just big that for was we check

Operator

from And question we Paul more have Johnson. one

Paul Johnson

The sort year? exit, trigger course that the any over Events dividend special potentially Marketplace of of does the

Arthur Penn

Rick. increases We over out not spillovers our special dividends. We use tend dividends. We to It amount. I'll pay certainly to talk kick offline. certainly spillover for to can it tend cushion

a and we're that. a as increase kind to want right to of, policy, others dividend, dividend which the steady supplementals is in from about goals about policy dividend to wrong how highest stable it always best is stable But dividend our increases policy spillover, You general, for of steady, we cushion and learning use one which provide to think Thanks. and dividend. the

Paul Johnson

if maybe another credit. on the And any activity stable of year? credit last one question level. like amendment quarter-over-quarter. quarter But And to It just sort the credit here hire would start seems you broader guess, good have were obviously any of portfolio? seen just quarter you, I migrations might during Nonaccruals for within or how sort describe the

Arthur Penn

There's There's companies PFLT. abnormal handful on. we Yes. in have a always nothing XXX -- going

companies always underperforming, nonaccruals. the So may of be may that the covenants an be or handful there's they a issue including

So of like you'd reasons nothing we one company companies with you But it's no the imagine, XXX abnormal. is can one really being of bring diversified so as kind down.

nothing this of cushion built we've of average always hopefully, have we're and normal interest activity. abnormal, even There's And X.Xx, against it. top watchful it's we're say but thrown some on an average were portfolio. there always and in coverage you substantial I'd if debt-to-EBITDA X.Xx hey, if So curveballs of

Operator

That back now remarks. closing over any question-and-answer to turn the to I'd Art conference or additional like for Penn concludes session. today's

Arthur Penn

look to on speaking a to We be in we'll call in great next today. and we'll everybody, when you wishing kind of winter, for being early talking forward you, early results. May Thank meantime, you X/XX the In with of the spring. everybody the the rest the about financial speak

Operator

And this concludes participation. today's call. your Thank you for

disconnect. You now may

PennantPark Floating Rate Capital (PFLT) 11 Feb 252025 Q1 Earnings call transcript