WHF - Earnings call transcript Q4 2019 | WhiteHorse Finance, Inc.

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Operator

Good afternoon. My name is Maria, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance Fourth Quarter 2019 Earnings Conference call.

Our host for today's call are Stuart Aronson, Chief Executive Officer; and Joyson Thomas, Chief Financial Officer.

Today's call is being recorded and will be available for replay beginning at 4:00 p.m. Eastern. is and number is pin dial-in XXXXXXX. replay (XXX) the XXX-XXXX number The all placed questions have and this participants At time, been will open presentation. the be in for the your following floor mode listen-only Instructions] [Operator

Sean It now my Prosek to turn Silva over the Partners. of floor pleasure to

Sean Silva

you, thank for you Thank joining discuss to today Maria, fourth-quarter Finance's and WhiteHorse XXXX everyone us earnings results.

to any not during begin, everyone guidance, deemed these that are Litigation which or the those expressed including differ and are statements remind forward-looking forward-looking this and known or financial uncertainties, would made certain implied Because by important unknown Private WhiteHorse obligation of facts to based could these relating like that forward-looking I historical may Before forward-looking no these Finance we assumes risks any statements. results materially the on to XXXX. statements Securities factors statements. statements responsibility from involve call, actual meaning Act statements, be update Reform to cause within of

may material presentation, website from earnings Finance XXXX to fourth-quarter posted was which morning to speakers at www.whitehorsefinance.com. this refer the WhiteHorse Today's our

may With to Aronson. you Finance's introduce begin. CEO, that, Stuart, Stuart WhiteHorse me allow

Stuart Aronson

for Sean. joining Thank thank today. and Good you, morning us you

are open Financial through take As Thomas, Joyson Officer, available morning questions. hope to market results which operating open review on Chief press you've to going you're and our fourth-quarter our I'm for line you had release we also before will our financial prior results, aware, results, we our our I issued website. this to the our the a review and chance

investment our a which for deployments share and produced are $X.XXX. fundamentals million per quarterly share, $X.X WhiteHorse disrupted GAAP-net all marketplace per income quarter gross record the During a for to the quarter, was was fourth of strong continues $X.XXX $X.XXX million an high. quarter core exceed in opportunistic or $XXX.X and time Finance NII setting was approach dividend our to

Our per NAV $XX.XX was share.

a per NAV special quarter, an to would our know, in share $XX.XX is dividend NAV to of in our you note fourth $X.XXX December IPO It that As adjusted important per to third of end addition the compared on dividend the dividend, quarter. to issued basis share our the $XX special excluding share. have increased from we of $XX.XX the of at regular exceeds quarterly as price per hence XXXX

of during market the As loan XXXX, experienced which I half drove the elevated year. origination our activity quarter, end during partially second referenced last the did of liquid disruption This by the a quarter. normalize the

confines of the closing deals, of our our unprecedented of and were X we Within in originations deals. XX XX were underwriting, to deals quality sponsored number three an ad-ons, new disciplined ad-ons all also of our deals high sponsored or XX sourced new approach

in gross repayments resulting our $XXX.X of sales $XX.X an The first commitments. lien and activity we transactions the total of originations did million of of and XXXX. in new not by repayments X second XX of million and All deals $XX.X lien any in with a net all million from total all our offset record revolver transactions ad-ons million close $X.X additional were ad-ons investment on

the decreased weighted basis XX from in QX market a rate. average yield income-producing point on effective investments base QX, XX.X% included Our in which XX% to in decline

we X.XX our times times. and We one-to-one to now times leverage of and leverage are target X.XX a from our also meaningfully increased quarter approaching range

details shortly. leverage Morgan XXX. capacity with our while transaction on will our rate To JP we this that interest quarter Joyson reducing to from more LIBOR increased end, XXX provide that

vehicle. are joint our venture out Turning

the JV of and we $XX end million. XX% XXXX, into deal investment XX.X existing approximately representing JV our investment the quarter, remaining At was four in the million, an the During transferred interest. totaling deals WhiteHorses a in total

The JVs XX% our XX% JV and on increase leverage. in value fair the portfolio the ramp continues XX.X the million, aggregate as had we and issuers yield of an targeted investment to levels of vehicle with to total XX approach the

the or majority out XXXX, of funds of within HIG, managed XX% our held capital Bayside as are the and beginning have Turning the base. structure. known position it's inquired Investors of were shareholder liquidity At that private by about that all shares our impacted Funds also this outstanding. shareholder

during ownership in our and in interest June that year one addressed With diluting to two reduce Funds we in Bayside existing the proactively XXXX, the of the conducted shareholders. without we shares mind, liquidity in one the during offerings, December

Also, additional Bayside base. to Funds shareholder our diversify further executed trades the non-dilutive block private

Bayside are pleased from the Funds We reduced outstanding. position XX.X% of that XXXX, XX% XX, of has been as to December to shares report

is enhance year and are to their to we value shareholder reduce shareholder value. and that way further coming in rigorously This proof work and in position understanding investor the long with feedback committed Funds Bayside we enhances that the addressing a term to expect

that portfolio $XXX.X end of end reported to With fair at of QX. million now our investment the increased XXXX, value turn to portfolio. compared I'll the the the QX At to million of $XXX.X

now These increase sponsored mentioned, back. in deals with quality lien approximately a were XX% credit and all portfolio XX.X% in of $XXX.X due the originated XX our million this ad-ons, are gross loans As and loans was loans first to strong first of X newly totaling within deployments. lien are

the investment driven level Total quarter's of our multiple last the X at accrual a at us allowing which were had repayments of StackPath. that put primarily investor was was sales loan million back StackPath most a on balance, end and On loan a to large realizations, QX. strategic I that notable the mentioned call, a XX.X by are cash into of made

to of million an recorded was income fee about of at then, success rate positively report results are QX. internal Since during fee income out our premium and of accounted X.X million we for and addition X.X which of to pleased generating a fee of we that StackPath par overall return in XX% repaid impacted the

While down consecutive Kings, marked to for with experience we position dollar. outcome from the are second $X.XX successful pleased we for we our in to $X.XX which the and continue our StackPath, headwinds on AG quarter

We manner are that resolve delayed more lenders; the we expected. credit to been however, a hard than favorable is to initially working has in process this

Our to times our target times a million the million. fair significantly in size XX average of portfolio There's portfolio past million. X only value size had debt year ratio QX. falling our investment our from of range also X.XX in of XXXX over to three We've improved leverage QX of above X.XX $XX companies investment

times one-to-one over one assets basis reminder, leverage fees quarter and target on a will our and As management is leverage ratio by times XX drop between a points.

deal an Thus historically lien that additional we've which deals quarter, is slowest seven with far mandated. are in one first secured our sponsor senior QX, closed

our always, partial can have of As pay we down QX in finance. recorded that lien be Oasis no those there deals assurance a legal in investment Already mandated close. second will

Turning the a By the loan now and previous XXXX markets XXXX, sourcing in we condition. this market capitalized the the and liquid of saw disturbance resolved of by to our market second overview, end a to on disruption during deployments. gross normalized naturally of was level half record

has now into However, created the recent just insignificant debt spreading new the disruptions that the market. epidemic are of coronavirus equity market growth

continue to evolving evaluate market We will conditions. these closely

the We with continue in will maintaining that credit disruptions phase discipline to a focus have and on historically we're been market the opportunistic in seeing of same markets do the today.

turn now more about Joyson? financial. to Joyson it detail to will in over I our speak

Joyson Thomas

$X.XXX the $X.XXX share Thanks, share. capital compares NII for per resulted gains of or share. share quarter share from incentive Stuart. per million per of to We $X.X million in was $X.X income quarter. for compares portfolio dividend This a recorded in million or to of per or $X.X gains quarter. fees quarterly net accrued, NII $X.XXX QX. prior in $X.X investment GAAP Core per or covering earning X.X million This this million $X.XXX $X.XXX Core net $X.X the adjust million which

this We the Syncsort. quarter. loan Parent, off realization our which $X in losses Fleet driven Inc, Realized million, million, of million this doing by driven $X.X of by and during a crews were a business $X.X of offset Crews quarter primarily net for Farm on related by reported at million Mills $X.X Kings markup mark-to-market occurred pay partially of gains with conjunction X.X California warrants on Vero of AG markdowns the million, in

net After for share considering our in net losses, approximately a resulting net assets per increase $X.X from realized of operations reported quarter. we and $X.XX unrealized or the million fourth

which of As or in value reported XX, during $X.XXX XXXX, the million $XX.XX approximately share to $XX.XX attributable of share, per The compares decrease asset $XXX.X million per special as to the quarter. QX. NAV XXX for December paid is or was dividend share per net

been have would NAV dividend, $XX.XX this share. per Excluding

to an portfolio our rating our carries a one has a to to X, initial expectations asset on X and portfolio of pertains rated scale nearly it activity, is where reduced two a investment of and XX.X% X loss that expectations. an or risk such assets relative either initial performing rate As to according performed been X risk those has the of better our

our balance our the facility to. to quarter, Turning with sheet, during credit Morgan amended we JP

interest First rate X.XX%. reduce the from spread X.XX% to

accordion with the $XXX an facility $XXX to million increase size $XXX a option. Second, million additional million from

changed Third, increase the XX%; the to XX% advance an XX% from barrel interim and finally, facility rates to size. requirement of

our approximately of at XX, WE a million as XX.X $XX.X million cash capacity to approximately excluding under $XX.X resources of under accordion credit revolving facility, the the and December had undrawn million including cash XXXX straight a revolver.

continue comfortable and our XXXX. a with leverage coverage monitor as feel closely We to XX, ratio asset December

barrowed quarter, under well Act of by Company's the for of asset coverage at XXX%. XXX% The XXXX reduced the mounts end above the defined fourth the ratio statute a as was requirement

quarter. for end was equity debt effective in net to of the hand Our adjusting X.X on times as cash after the ratio

a quarterly like of ended I X, record a XXst, for declared stockholder Next, quarter of as This December million, all XXXX December $X.XXX is distribution to at of stockholders $X.XXX have per of XXXX. distribution quarterly to was XX, share on on total we December, The paid in the IPO quarter. for to January marks a distribution a X.X distribution December XXXX X, Company's the XXth per share your rate that consecutive distribution per since XXXX. distribution

In Company's XX, record December directors a paid as board special of stockholder XX, declared to October as $X.XXX which addition, was earlier, XXXX on mentioned of the XXXX. of per share distribution

to We expect distributions. our a in position to be regular continue

the your operator to turn for over now questions. the Operator call I'll

Operator

the Our first of Riley Hayes FBR. of Tim line from comes B. question

Tim Hayes

just this Stuart. on your afternoon, given quarter-to-date activity the the originations so for region similarly, questions. My closed far, into a you've touch rally is you, seasonally credit for term? I good interest around but markets, around just And should you Thanks there, to know appreciate update the volatility I my but first at quarter expect taking Hey, increased what would slower one, expect in in comments, repair want And read the near impact the that the that then you will do all? and rates? volatility we

Stuart Aronson

basis Because I'll So answer have the our part floating their second decrease in repayment Tim. and LIBOR the not interest of on loans should for all rate, rates impact first, activity. the any is

per pressure in deals if do LIBOR some all, continues not floors put decline all we on that LIBOR have deals and X.X%. LIBOR our does to our floors X% between if get Although the our virtually will that I that highlight earnings on range share. of

some we below but exposure. have interest have exposure rates, virtually X%, to So, declining no we

but the that in market any impact close, volatility, itself we deals is over deals not have on the credits the the equity last in in equity travel folks those have regard or course most the pipeline for on and volatility the does event or the in are according couple close has to market view transactions the changed. coronavirus. we market quarter, don't equity the of to In And of industry reason in there specifically volatility had of our where weeks industry

event weeks pandemic. had much taking that people the cautious are And up six so, a of concepts risk weeks things might've we things risk. i.e., ago, that view of we're more four attending the events closed ago given that on

pandemic. the many rolling where deals general now. of are are we is that course, that could volatility come There economic there from So, in

We say I are if was where it's our than oriented that, the event carefully looks normal. less those. I would businesses travel and at evaluating particularly are moment still flow, pipeline those pretty likely in pipeline But say would close. to the there deals other

Tim Hayes

a making volatility there that underlying guess the little just about appreciate market driving recapping following asking have the more pipeline. like when you're could that, I up it really sounds some I And factors you so that distinction. on fallout the in bit, though, credit

you year result any it very So, levels? origination your for see factors and sentiment of portfolio the you strong XXXX. coronavirus the what of changed for same And companies growth volatility? the of a guys are in as from this your a underlying has over Do course the to stacking expectations driving year, was up

Stuart Aronson

have We ever and are bigger than been. we stronger

people. with now are to up We accepted offers XX

We Oregon. cities with America X are now in Portland, that and XX North we've be in across in being opened newest located offices Toronto,

involved Midwest the actively in are and potentially We additional Southeast. in adding offices

get And we was as did direct deal be originations be our that another year into right disruption starting as disruption. as model it unless we're throw And be with or experiencing that a so, there's to better that year last again, flow should things may may last extremely of now. this fact in couple week. than we and on won't lap QX be It our the being caveat good continues this anticipate in it that robust, the disruption average

we terms want leverage In to this in We really to X.XX times. leverage one X.XX we took up, anywhere estimating take a from end don't of year. quarter beyond where

a that we credit a of that So our considerations to best to being and will get one time to to significant get frankly, in last we again, terms choose limit we degree. do portfolio need quarter get less done by anticipate deployment leverage we times leverage. subject our year, to in one But any very we to have in one not growth, quarter do than increase to than more to to

Tim Hayes

mentioned played ago, into look but on a and year at well? you how quarter I mix the yield, you part yield also, effective then attribute And higher environment bit impact all a the has portfolio the just the that, competitive rate and spreads? basis points sponsored the the do Clearly, in on was of deals And as played the average this degradation much then down a quarter-to-quarter, XX believe. that that to base weighted

Stuart Aronson

that California returning LIBOR deals was repaid. deal that beyond our XX% thing to it a And another credit impact was of plus time, that by fact a the and felt long, LIBOR to The the credit. a first Crews the yield decreasing long riskier was on it portfolio for vendor list very high credit that several that. was on time evidenced as take exit let deal, lien that first we was

So that were that an exit was we supportive of.

XX% Company our was a to good second and even loan successful We a company at and Sunteck named down second was that also getting boost the continued repaid performing a loan lien had company has lien into got very would up that XX%, further. and concentration on then the our return deals. more average done back which -- sold, so was second we've took But to would of I first on if lien, concentration credit that I as we our on portfolio take the lien the yield to the put help assets. more that considerations pressure the

of equity targeted level XX%. our for in the invest you're said, most and non-sponsored average JV than That addition, that deals are In expected returns sponsored we the to lower that JV correct of XX% priced sponsor on deals. deals are

success of sheet. So, will be where to non-sponsored is the in on be The balance and the at goal X.XX of the for the the continue sponsor sponsoring mix JV. the deals will deals above BDC non-sponsored a many funded LIBOR priced deals of BDC robust funded

fees, working to that very prepayment and amendments get amendment of and basis BDC the prepayment get almost leadership basis happen all but waiver natural give earnings community one high a try the It's on $X.XXX and yielding fees, every portfolio to a a a have and as leverage that the to core you can to end quarter. non-sponsored to fees, the try amendment dividend to the of goal analyst stable, fees to we and book without a us asked the community with occurrence the try is $X.XXX fees a times and create be game. waiver And to income which a penalties, and from reliance prepayment waiver will fees earning we and an ultimate excess where to penalties shareholder our at quarter us penalties, generate as have core quarterly hard on seen to get

Tim Hayes

given And is it possible something you takes believe so that it's it there that. different is longer achieve can to elements But know tough many Or I in bit around a little you that? than XXXX?

Stuart Aronson

know weeks with economy past fact don't the what's we markets to couple given happen going especially we've know the to I don't going year, in the this happen to a seen the that of the and volatility coronavirus. given over what's that

I which no XXXX we So, if we All then idea, make But with progress. there. XXXX be like say get would I anything can't year. rapidity going last very I the is if XXXX is, good like to can behave predict have

Operator

question from Schleien of next Our Mickey one comes of Ladenburg.

Mickey Schleien

you imagine to the related Are related most been most previously, your their to forecasting to asked questions book coronavirus of just difficult few right but more to or the of what any management you're borrowers your understand happening happen take not that people's specific their So, may what may. your may out Stuart, about but are now a I very pulse to is I I that now, if there concerned credits that? think they particularly started minds that right I in reach think business. is to teams on have

Stuart Aronson

say of longer exposure The range of period good thing Company the demand with weddings. company where has Quest that a the that if events most does dip a company because proposition, to would that a to people we time events would So, provides then Quest. is at good no long, during very draperies, value is draperies very the credit virus simple the credit virus, a the corporate I think events that this were period. our corporate were afraid for holding very long term were but there people from

by the equity firm, personally three private am virus. what going I to six private there's or firm nothing equity through the about months, is And be, That a go of of period said, Quest the whether do the would whatever months. support that's the owned months, nine that's that away, ultimately opinion they coronavirus would because Company

Nothing our the credit, else much than amount in at the we what the China, because but much degree. an to don't that focused lower-mid other not than has market a, China portfolio by very portfolio other concern being American which I would think our call there impacted. have least view credit, I'll BDC there's than we're on the less again, exposure measurable linked more a in been why to that risk really is average temporarily event So market level lower-mid that fact is trade that, of sourcing of particular it our and much not the portfolio, focus impacted companies market on and in any our so small war

US So pretty credit the for have seeing management moment weakness And any the coronavirus low have it level across a feedback no coronavirus. any the look from we do of the seems as a our teams from at our general and portfolio they're resources moment a has taken of in economic exposure. that been resulting in that there

Mickey Schleien

that's really, appreciate and That's Stuart. it. helpful, interesting I

anything positive the in Just adjustments from for time else? of more StackPath questions. Were either questions, there one income, or a housekeeping investment quarter, couple to any negative more or sort example,

Joyson Thomas

Joyson. is Mickey, Hey this

did exits. fee from income So these have some recognized during the we nonrecurring quarter five

a to fee we of was was and success on the due driven premium. our StackPath that that from largely mentioned X.X income think essentially on as call million I earlier fee

income it the terms really of element. in quarter, fee think down that onetime for I adjustments on it, nonrecurring the boils to So again,

Mickey Schleien

or that income something How about may sometimes we accruals been for was for example, deferred have reversals on understand past I nonaccrual that Joyson. that? see interest income like interest anything for

Joyson Thomas

to relation in Nothing interest calls.

and put it as prior So income did on quarter up there a little was interest in QX, that. back the relates StackPath we to bump

that. to So adjustments related there wasn't any

we would on prepayments these a the accelerated little from recognition Of course as of well. bit amortization have discount

Stuart Aronson

but gets the we to assets, a view into try quarter-to-quarter. by how had up, highlight we of StackPath since troubled as that There StackPath people just asset transparent will way lot being was a view downside mark brought be that would I as into the were we risk. very the good, there StackPath be Mickey ran it problem.

we And themselves sponsor for obviously it the that had at of So dollar. of we had really managed and good in well. in marked we're for ultimately that final as the with credit, us outcome that such a happy But, highlighted on up well. QX I ended mark $X.XX BDC that the believe who for upside a outcome our that lot as

Mickey Schleien

news, welcome that's on and that. Absolutely, congratulations

are expected remind just you target JV, and the on your its us for that on equity JV's can the of vehicle? what's own on Stuart, metrics Lastly, return balance leverage sort what

Stuart Aronson

expected will capitals JV JV about assets. on return XX%. first-lien leverage run that times in general XX% X.X be JV to the assets us The in the to is all projected on are the junior And to

Operator

Next comes Oppenheimer. from Christoph of Kotowski one line from of question

Christoph Kotowski

there or asked accordion on or there were to and page talking about else the current balance of little is revolving at capacities and leverage is that the any mine is million of is efficient went get of sheet? you're hand and And leverage looking availability of upper something I I'm go to your a $XX Most it fast side the facility XXX target amendments the what to can you feature? credit of, the conditionality getting you leverage is through the the to at just what to or you you're when do of need ratio, deck XX middle just guess into going end liquidity your the but

Stuart Aronson

Morgan then have balance the using That We leverage back lows. JP time and all rates facility. our interest target the question to that fixed hit of to pass of could part Joyson. and I'll said, answer the dropped last the just

as the issuing secure issued point And QX. opposed in so debt do a at to what combination be asset deployment also will what we by expected more using And can to And of unsecured in are decision at, the the of time. aware entertaining the driven debt. more debt spread be also to and as possibility of this

do we unsecured now it given open not may debt. option that sitting. a us. unsecured XX and need X again, to year are debt any But year be So is attractive more is treasuries And where

Joyson Thomas

just Joyson, or changes again is the this Chris, facility. summarize on credit I'll

So the interest rate spread at was X.XX%.

We be accordion. core was to size, out facility will setting size million XXX facility a million X.X%. The with $XX the

So XXX now we XXX million with have million of capacity accordion. of additional

XXX in on again see say if And the requirement collateralized rate advanced total from percentage So XX% capacity, that assets to size. XX% facility borrower's the will again is go increase XX%. and of then

to equates on that So XXX XXX based capacity. current million the million

Christoph Kotowski

whistles to you accordion and any of is, do are XXX? like levels to special the drawing there the like that? just on initial to go kind Or bells through it And draw need is on that

Stuart Aronson

some terms It's it to just that take submitting days, But lead And couple or bit approval of on don't But more long paperwork. is committee. a a time time kind basically going in beating few, is then little push that. we approval it of of, send just a in a right. the of lead some terms for than large with

Operator

comes Rick JP of Shane Our Morgan. the of line next question from

Rick Shane

or follow if I'm percentage and that the increase sponsored one Just wondering, we year. about something on? up. opportunistic We that's be thinking of in one strategic deals should an see question over the there's going last

Joyson Thomas

we have or we side, We're And general of those synergize have we off X.X ago. we are EBITDA sponsor are X.X the multiples multiples significantly. done didn't reach sponsor candidly two the And X.X, breadth the as than ranges. on market more. the do three years of higher up careful lending actual multiples into to Rick, very market, are In leverage very even ramped those sponsor leverage about the X.X, adjusted that a what are or aware. that has people business being such X.X even time itself believe

X.Xx X.Xx light. of sponsor smaller sponsors are where that what of covenants range primarily doing in to are covenant that the the sponsor And doing the we leverage. were market all almost run With directly doing We're of the greater. equity gone originated we're much with calling XX% call on we're off or sponsors. deals The deals checks has

in from side. side, doing a very covenants we're credit And we're that perspective, sponsor we on with the the think so to is value taking on loan what of non-sponsor consistent the terms risk and leverage,

different and harder price, they to said, deals the place in often to price is just lending That organically get We non-sponsor majority is typically our deals non-sponsor much you vast a there's leverage. where between non-sponsor and find regions Because XX and sort originate deals. X.Xx no can between we're non-sponsor And of always different situated lien XXX are very a It X.Xx LIBOR the endeavor. go first of those them. on deals. almost LIBOR directly A

try of in because we QX and at at and we We in and of our given that find, what would up deals, a in sponsor deals. what that get a syndicated broadly lot just much sponsored And our joined marketplace, love to came But a of on said, mix terms were the about the frankly, side, in lot were up what those And things way ended getting the non-sponsor and of quarter, have the number disruption We're in keep lower them clubbed that would to particular, there's sponsor clubs. ended the up pricing keep mix side marketplace up of the the in mandated about to XX-XX. close. we are hiring variation we more any we people XX-XX. on on

or plus say of minus sourcing being quarter, a I'd to activity, or our XX-XX, you're case going XX-XX. the more of normal XX-XX with see in market sponsor the case So, disruption, any given deals. in But

Rick Shane

of up way And then just the been now quarter. through we're quarter. It's follow a the volatile as there, two thirds a

quarter-to-date on even the you given regular a Just do of just would what but the basis, not seen volatility be, the back of a on that asset envelope, think basis? we've sort marks asset

Joyson Thomas

Well, cap the us that assets vary mid are the news market for of our vast assets good large marks. don't majority the with is lower

and of underlying assets the couple that cap way. So, we generally assets core on valued of are large performance have a our asset. But, assets the a that vary couple

volatile seen mark believe equity stocks. little markets, moves very the but based travel Also any so, I has some so to most materiality like I've movements. large of large quarter, markets, what don't debt And on in which price little the cap the seen points notwithstanding noting cap markets airline the in thousand little that the names the very a in other there candidly, the the are in even the is multi than far debt that compression the bit,

Operator

comes Our of next Securities. from York JMP Chris question

Chris York

I your bigger stronger. wanted on being to and for elaborate comment

So, principal X.X I development quantum early the growth lending raised the the noticed of view billion as and positive I this platform. another in of January WhiteHorse for

So, investors BDC this benefits expect should the the that question or direct indirect capital receive any from rates? outside will is

Stuart Aronson

linkage the BDC, closed of reasons Yes, in fund, there a between that a space. now flow that are the one solution majority ability was of win through. clear underwrite It's to our deals. as WhiteHorse and sponsor The lower transaction. sponsor $XXX coming individual you of under sole is both And organization, ability million has management. seeing for that an additional But the us non-sponsor players very the the market principle a business the sponsor to gives mid be capital focus more vast we publicly an HIG to source and can with announced WhiteHorse new lending on as

ago, now indicated to years A will on years three simply our of positioned the the significantly and or is we've we whereas $XX hit diversity and $XX positions thing $XXX about few back lots we we opportunities very were of targets. shareholders position million found million an BDC, adding asset between XX are several that to to we and for $XX we and our been to $XX and deployment go $XXX for do XXX to increasing opportunities been we couldn't more for that you're you between if million now are And ago, seeing that in ultimately upwards land positions million get that those as have pool if $X up that. our our $XXX BDC. on a were million weren't in million years speak had million ago, shareholders other we million and really So, than

of much do assets base diversified allocations. and can more off we're that the that win it's we fact pool and of deals capital managing better come of this appropriate So

Rick Shane

Great. color. That's great

that think I and appreciate, scale on your now platform. I

for So, me. that's it Thanks.

Stuart Aronson

No problem.

Operator

Our next Gaden Matt of question comes from James. Raymond

Matt Gaden

Hi, guys.

Just a Grupo quick question HIMA. on

as remember on bit end far I to some expected little the than same a the said marks you this as correctly, quarter take a received expecting the weaker So, I financial asset. XQ documents can that are and prior. that, quarter call, the compared post were markdown to asset tell, And on we're if you the as

So, color that. you on any us give can

Stuart Aronson

got data therefore getting weakness, the improved that that weakness, that any have, came, After we we implied That's on based and question. great data not a see that mark to the down subsequent that currently that reversed further. data reason we and asset did

to HIMA be pleased you a our Rico abated that hopefully Grupo strengthen risk in and to that we a report is I'm a So, asset to see will continue that that outcome will good risk, hospital be able Puerto for operating to and which and hopefully, shareholders. did but as

Matt Gaden

Okay. color. guys. That's Thanks for for Alright. it me. Thanks

Stuart Aronson

problem. No

Operator

Tim from Our of Hayes one FBR. of next comes B. Riley question

Tim Hayes

Stuart. Hey,

the the one the you're dividend just right liquidity to returns and and about there trading NAV below Just stock. putting follow XX% of the up. right and one I of versus and buybacks you strategic wondering at executing now. But to yield, the now how to just initiatives footprint where work stock think XX.X% a flow capital had with your know is Bayside price increase reduce on

Stuart Aronson

Yes.

the theory, a the in taken anymore. in XX.X, they ultimately the of question, XX overhang have people community small from take for off to enough some have. that, of are that the overhang the make to take number they the order it They've less we've the the to and course NAV. But worry And market rational at as can of shareholders all we then understand me it which to entities, of even shareholders in overhang. assets point, becomes shouldn't are, evidence need you Bayside analyst discount all exit So exit. address understand some sell smart, to recent down help have, will below to the Bayside There attractive routes we of the the to sold

where Other intimidating go, possible get to we're happen relative but, get that nothing that to have gauge is there's than that do share best should to going value viewing that shareholders overhang the will be a very try their again, that a to the closely shares and position trying creates. on fair a in XXXX on them to that not is on level risks to we're to really but that, whatever we're done. that working overhang, Bayside good with at if So resolved that to that our marketplace, trading the to to level based the be are

Tim Hayes

it. feel guess maybe comments. that just about repurchasing I appreciate how one that part asked the open maybe clarify is in Got market? I I your to I question stock just those you of want

Stuart Aronson

where moment reason, traded stock to it be illogical is at absent to the back the under repurchase could a the sense, the there no given to repurchase the Company would that was shares. trading of of what make advisement the take no performance Board good of If plan for down very but shares it levels Company appeared recently

Operator

Instructions]. [Operator

Next question comes Bryce Rowe Securities. National from of

Bryce Rowe

some make that the flagged activity you curious JV. might just I'm quarter, into XXX plus way the of L this its

this into JV expect past So the its quarter? make just first should way to we if quarter in from curious here the activity

Stuart Aronson

said, most XXX be between part will that most XXX optimize assets and at are LIBOR XXX, part, BDC. we leverage JV the balance earnings to power seek priced for assets For the BDC. sheet go that -- the XXX the returns that deployment That into the will will and with and of of at vis-a-vis the remain on the the LIBOR priced LIBOR are the will those assets

an the the assets another sheet it of easier below. have XXX been transferred have LIBOR said but at BDC, and the higher so the balance into that far the to the way, asset, on asset is the all yielding So JV have been

Bryce Rowe

down maybe That's to Or you credit are LIBOR are compression to comment And Okay. spreads that the here ability into follow-up -- in starting you quite yet? possibly way seeing about one that its being XXXX market not some offset the wider And the with then that deals? finding LIBOR to equity not is make with on markets. helpful. your volatility

Stuart Aronson

We saw market but that the volatility. were weeks hoping January -- to of see in that, What coronavirus let's were but ago to in as we're get we call we're lower market the now was on the or much before to to volatility assets two the have price self-correct We terms in by stable. but Not right say may cut discovery LIBOR, happening worse, competition pricing price not the price find under we pretty trying seen very And is out of What us and we'll it general thinking that. I'm discovery. whether was several trying the based in same. on more not. other and people

Operator

wonderful and That was and have a disconnect our call. and your Please this conference today's time conclude final that question. day. we at gentlemen Ladies with will lines

WhiteHorse Finance (WHF) 2 Mar 202019 Q4 Earnings call transcript