WHF - Earnings call transcript Q4 2021 | WhiteHorse Finance, Inc.

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Operator

Good afternoon. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance Fourth Quarter and Full Year 2021 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 5:00 p.m. Time. Eastern number dial-in (XXX) is replay XXX-XXXX. The It floor over Instructions] is Rose now the turn to pleasure to Company. my & [Operator Robert of Brinberg ahead. go Please

Robert Brinberg

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

assumes like would be XXXX. historical factors Securities statements, forward-looking to on remind everyone these made Finance the you the website that, statements morning. from expressed statements related to With these during and this financial meaning I differ responsibility Fourth the implied which Earnings involve Today's to Reform posted and begin, forward-looking CEO, update any was Because that not may deemed materially Aronson. are we results cause to XXXX forward-looking Before any to of guidance, actual may Finance's based known from facts of the those on statements WhiteHorse certain call Litigation obligation uncertainties, Presentation, this material begin. Act no WhiteHorse Private refer these statements. Stuart that within to or WhiteHorse unknown me risks Quarter are including or Finance allow speakers could important which by forward-looking statements. introduce may Stuart,

Stuart Aronson

good and today. all afternoon. Rob, you, for Thank you Thank joining us

Officer Joyson the addressing we detail, performance market and release floor which Thomas, XXXX, our by after aware, review XXst, our our to open which be chance morning you're the and our Chief prior ended quarter, On results you've Financial also for in press December current then website. discuss we call, a full had as I our and questions. found fourth will this greater results As issued to hope I'll well. today's year market will open, our conditions begin can period on from

in quarter XXXXs year. core in increased the the We core quarter from are a $X.XXX per $XXX.X share, by baby Core was quarter issuance or In the NII our $X.X $X.XXX Gap year, X.X financial per alone. adjusting per $XX which million share. million $X.XXX for results QX annual report full bond NII gross strong the for costs issuance. $XXX core $X.X a the $X.XXX amortization to was and gains the originations compares XX.X% share. share. reversal, pleased with per This from for and These and share. and million after income of per totaled or $X.XXX million fee with strong incentive XXXX, of investing is net NII of million retirement deferred deployments results fourth of NII for capital or QX reflect accelerated fourth the This million

originations strength issued of secondary million average million new and at In proceeds. in We of to an price competed this shares quarter, shares. outlook past we offering a for generating addition, given deployments $XX.XX X.X $XX.X approximately

price. these decline the result proceeds, we and issued the and to due impacted investments our capital QX. per then HIMA, the WhiteHorse consistent share deeper To Grupo representing And offering. with dividend quarter. share QX due decrease was was at this share per This the NAV per to issued of subsidize since support primarily deploying follow-on $XX.XX advisors special our fees $XX.X was a $X.XX offering, our for of to shareholders per of share. IPO earnings share the a QX. consecutive in from contributed end underwriting the of Furthermore, company. XXth per IPO $X.XX to we and in a quickly on distribution per to per I all fourth from which as distributions during quarter's note our share in of into management quarterly PlayMonster this was Importantly, at markdowns were on issuance NAV minimized by delay paid our QX, XXXX, our were account deploy the Through also payment company's our into that NAV rate costs share, taking $XX.X. these remains quarter covered the able at offering drag shares above distribution

think The I totaling historically million capital during period the the and went our approach XX a million deal remaining deployments new driven platform $XXX.X gross structuring. $XX.X to $XXX.X the investments. originations made points deal financed million million to issuance were from net quarter this was portfolio partially by well sourcing as equity and net record and $XX as full We respectively. of $XXX.X strength setting issuance add-ons capabilities realizations. of and was our result million Gross deployments of of capital of $XX $XX $XXX.X with deployments funded conservative new into QX deployments, by primarily to offset deployments. million of million, million, debt existing repayments this

X.XXx. deployment, Our setting leverage record to and a however, result, fundraising, effective outpaced increased as the company's our

that this to delayed. repayments increase of leverage were was due in several Some

these likely be expect levels throughout duration are We occur reduced. our delayed which of XXXX, to year leverage cause fiscal repayments the to would

average earlier, strong deployments, note were offering of in a end Of of and were I'm pleased pace that quarter. continue end with do met our the only to first was continue we except with say, our net six but lean offering happy mentioned leverage parameters. balance Needless transactions. add XXX% one the share report portfolio, given than XX was sponsored senior deals were originations, risk QX to to were level deployed to our lean an these conservative would the found XX% XX for At non-sponsored between new all of portfolio deployment. and we I follow-on QX, only We of one the that more of the As proceeds closing of second the the loans that debt be to of to and the the look I lean Xx. first secured. capital

opposed our meet X% loans to XX%. risk target that to second is our standards, closer Given level of as lean our Lien the now approximately Loans portfolio shortage of Second

as loans, operating lien X.XX its earn a long times we return risk Lien leverage also Loans, BDC target dividend portfolio consider at concentrated consistently to overly and lower in of order in to So than slightly BDC on quarterly the level cent $X.XXX help which up will remains second our First lower higher have the basis. a

bring Now into stepping entire focus. investment back portfolio to our

due Our investment level the $XXX of effective weighted QX. from increase on investments status remains portfolio value fair $XXX debt of was yield as at X.X%. PlayMonster reaching from X.X% an placed status average portfolio of on end Non increase the portfolio end in non-accrual income of value achieved accruals The slightly QX at debt an QX, were HIMA the in below overall the our represented non-accrual million QX. portfolio, producing on of our and fair our X.X% size. QX. growth unchanged Non-accruals was in million Grupo percentage to stable at debt a

As we QX. we earnings prior indicated to during marked our of value par the down in call, HIMA of XX% Grupo

the As to Grupo QX. marked lenders investment with took and with We quarter based to on restructuring Monster that marked we the quarter down XX% year to be down data we asset negotiations until non-accrual the expect on in again first be since control end HIMA this in par expect previous and new of of company. Play company conclude

of portfolio keeping labor far, As to disruptions to issues increases their cost companies it generally the and high to regards the our EBITDA impact and mitigated to majority keeping through been cost customers, increasing. of pass rising have these thus supply vast and chain able have stable revenues

a with rate well debt are our XX.X% benefit environment from from of reasonable all portfolios rate our interest of reasonable investments. and rising insulated comprised rising Our environment environment portfolio holistically rising as debt -- rate leverage levels, portfolio would floating as levels

investment to million joint during in the BDC utilize venture quarter which successfully to of compared the X.X income with continue QX. $X.X generated We our as million approximately

to million the an well market add-on quarter size JV’s $XXX.X deals, loans. unleveraged into million particularly portfolio additional returns QX had X%, the million higher and to deal value at we the supports current JV. which market investment JV for of its JV’s XX. the three portfolio yield QX, to portion JV, million portfolio The remain in JV. as contribution of is incremental for The JV. cash the compared the fair We the The portfolio million approximately of yield JV $XX closed the $XXX for of pleased secured currently from of the teens, on STRS contribution of as new $XX.X we at million. annual an of QX and We ‘XX in-time During million believe in to was with and one end is JV’s X.X% income average $XX.X transferred has senior a December another given $X.X relevant including average the fourth of $XX.X an investments remaining equity exchange comprised in produced backdrop. shareholders of in the the commitment low of first capacity return translates JV lien solely The the average

at leverage still competitive, COVID have our the to increases and run pre for pipeline result, and accretive flow and deal the a particularly the deals scale increased terms diversification where for portfolio, in of should This the JV our future market to process quite meantime, document an interest high. remains pricing, As exposure The XX.X% from highly is for sponsor allow greater busy In to the a our economic additional is capacity sourcing on returned all-time JV’s earning XX%. and stream. levels.

levels are are to than While are approach under the aggressive we the have EBITDA activity equity conservative run continue origination which on our the terms to less private adjustments sponsor scenarios. a firms remain the and in underwrite expect we sponsor market. billion with market, off to sizes and cautious they in run a Documentation generally dollars, high, downside

for off markets, significant and there -- source our leverage at differentiated physical profiles. has is due with We to continue XX presence WhiteHorse attractively we to consistent priced our sourcing presence deals our less in attractive three non-sponsored tier regional through architecture. capabilities have run competition continue transactions advantages prior where sourcing the to quarters,

deals, it gives plus We accountants, advantages targeted Thus resources closed H.I.G of investment deals have underwriting add-ons income that QX. split investing. our CEOs, leverage from and lean quality are of or the number development continue XX closed are new is record a dedicated on tier in portfolio. portfolio closings new-year leveraging positioned and names sourcing we to a new and X and higher person H.I.G’s are X wealth level low at continue three deal remain complete X competition we which attorneys, that are leader with sourcing dividend. for for CFOs, pipeline mandates. sponsor team X.XXx beyond. including transactions very QX BDC a deals are with our with lending, of brokers, enabling assuming are concentration the to between In managers. as exceptional more mandated access will pipeline database, sourcing our relationship X maintained ultimately add-ons. that over markets professionals standards the us and XX,XXX level to new a deal closing, originations with this deals to of growth, in know growth, the This H.I.G At additional to it business to in and includes which deals the make XX not and The we professionals in obtain rigorous prospect the platform second which is drive and WhiteHorse we includes sponsor proprietary below, and our affiliation shared H.I.G, We direct will derive the now these the target into in well to less working from QX, mandates, greater a of in lead however again, and in may some QX. coverage mid-market at portfolio and significant pipeline Five these the mandates and manage likely loans to XXX at continue than that in H.I.G, in drives JV, of far high strategy, grow our are BDC, and stage, to I our the execute

healthy. and quality high very remains whole a as portfolio Our

We a in we for review last solid we we well Further, to raised pandemic QX to the the the remain and of have Joyson the credit full earnings XXXX and effects market, strong details late cyclical tailwind performance lingering and optimistic XXXX. a in Joyson? balance a as deployments from I'll the JV, contribution XXXX. And and while of QX process. composition. industries, underwriting additional the very about performance the a incremental cautious of are the our call team financial very With the in year, capital built our effective that, provide of Europe and the about War turn for portfolio of sourcing we the additional believe state competitive strong and as the

Joyson Thomas

Thanks, call. And today's thank joining for Stuart. you everyone

well $XX.X income the share investment was $X.X $XX.X was QX adjusting of a XXXX. number During $X.X were share anticipated quarter. end, current the retirement compares of the prior that the investment we've reduced the expected baby was for net million $X.X of million after $X.X QX in quarter. capital This The million net third prepayment quarter, into share. pushed million million to NII were in during net GAAP activities recorded To per per reversal. recorded $XX and per as associated that as GAAP quarter. income million occur $XX.XX with in like cost to amendment repayments $X.X impact or incentive of income fee -- bonds, debt the million with gains highlight debt amortization accelerated due compared Core decrease fee $X.X for to I'd deferred a to the that

to So million. accelerated fee net from expect from $X.X assets of prepayment these We increase we first see half XXXX. net over resulting of income a in OID reported the accretion operations and

two at risk in of a XX.X% either Our portfolio or our carried to positions XX.X% quarter the as during showed QX. compared one ratings rating

we JV grow investment. specifically, the continued Regarding our to

as three the proceeds million, the which earlier, in to $XX.X investment new of deals, add-on well cash transaction, $X.X we $XX.X as for and exchange previously of approximately mentioned transferred transferred in approximately one of remaining one net As million million. a JV deal, aggregated portion

companies $XXX accreted QX. BDCs million The XX/XX, of of of JV be the in an $XXX.X portfolio the in aggregate portfolio with continues fair million to JV’s XX investment held portfolio As companies at XX to value to fair positions the earnings. compared in value a

the the our of perform as portfolio overall JV’s investment as capital yield investment JV additional the of We timing the assets in expect underlying fluctuate on of changes as may in well a invested, period-over-period, the the result yields portfolio. the

as Turning undrawn had million resources cash revolving $XX.X end, to credit our of sheet. we balance At $XX.X approximately XX/XX, $XX.X had cash. million restricted including under facility. We approximately our quarter of million

$XX million to borrow I'd the $XXX the the period to XXXX. credit to temporarily things, amended for Xth, which note amended allowed during XXXX, earnings April credit to facility on mentioned to beginning Xth. last account facility a between like quarter’s through temporary degree originations. quarter end, This the for As among of Subsequent call, October million $XX upsize allow prepayments and other to was previous this month to to a were extend by anticipated better facility upside get to total, that terms October million credit and Xth, permanently to by significant $XXX provides to differences flexibility the million, three on us BDC up the million timing in $XX upsize

XXXX was above Act As minimum by the of asset XXXX, coverage XXX%. amounts borrowed ratio XXX.X%, coverage was the company's defined XXst, as of asset ratio December for the which

cash debt net ratio after as compared X.XXx adjusting equity to hand to from quarter. on effective prior X.XXx QX was with Our

capital activities to Turning during raising quarter. the

we of successfully During X.X approximately million price shares resulting per primary in public a common net $XX.XX completed at offering million. offering a proceed share at $XX.X that's QX,

In registered that mentioned, speaks due in the has $XX buyer. in sold Shortly notes November, to resulted X% of XXXX million public a proceeds pipeline. of our announced our a breadths which in to proceeds closing were broad deployed we the December, of and offering due of new Stuart portion million. investments, of As quality XXXX, to quickly X.XX% these due million, of thereafter to proceeds private X.X% net Finance were which approximately the redeem WhiteHorse $XX million, the used notes qualified placement notes a A institutional XXXX. $XX were offering $XX.X offering

Before December the to up quarter distribution I December paid On as for for of Xth, January to on open a Xth, of highlight ended of XXXX. and cents the share I'd like stockholders conclude XXXX, $X.XXX declared dividend The questions XXXX was per record distributions. we XXth. November XXst, call

a spill distribution, of as The this XXXX. on stockholders excise we special to paid quarterly cents share distribution Inclusive of were elected record to as addition continue XXXX to per distribution back income and December our $X.XXX for October XXXX In of monitor the tax. manage per distributions XXth, declare $X.XXX we a distribution, total was share. in XX, special paid

quarter consecutive paid morning, $X.XXX payable share This will April Board per share this in cents March per distribution distribution Finally, of be mark quarterly our XXth, to declared XXth announced IPO we the all with a at as per first since distributions rate December XXXX, of consistent XXXX Xth, to quarter. the on XXXX. company's that record stockholders of our $X.XXX of

both earnings factors As turn on we the to to now in we medium based said near I'll warrant power the With term that may relevant call continue addition and portfolio over operator questions. that quarterly distribution the will evaluate our back previously, core other consideration. your to in for the of Operator?

Operator

Instructions] go first with Schleien our ahead. Ladenburg. we take [Operator question And Mickey from Please will

Mickey Schleien

give can and their how margins debt, you Stewart, trending rate the confronting, potential us given to for including about you and their how sense all are borrowers’ some of service we’re increases? headwinds revenues the do feel ability your

Stuart Aronson

Mickey, question. it's a great

times leverage That at on X.Xx finance you strategy. in are market is leverage XX to a our on not basis. As of and that know EBITDA basis certain XX making leverage people Xx loans an cashflow parts the are regularly to

leaves revenues which I've what cashflow, across on general, customers at are quarter, they're EBITDA or increasing. that our put rates services, to EBITDA. As are do maintained the those move or about cashflow of up cost on companies seeing to are seeing When companies our X.Xx typically being the cost this the we In more and pushing and business debt. we're market, consumer I service mentioned in earlier, our from that basis, majority through and leads service our are successfully that to very you originations this levels to average before on portfolio very and Xx ability a the it chain experiencing finance and originations Xx evaluation vast we're either labor strong room portfolio coverage pressure interest our increases supply increases of majority considerably would are in growing and companies their heard of for debt the generally levels at

performance and which cases, very strong the all gently Gruupo significantly. but exception HIMA, COVID general COVID is or some the accounts in portfolio on even So other remains affected the improving with bad, either of are accounts quite still affected

Mickey Schleien

Stuart, terms in in, either inputs invested not that that in If in have are in you've to risks is of? follow BDC companies, aware tend that know to a cyclical sanctions you, helpful any Thank developing Europe could in be they common their the the explanation. cost that of but just which should companies you general do or to sector, outside that's prices the I I up, we invest portfolio within commodity

Stuart Aronson

have hearing we're passthroughs. market seen is Foods in companies. say companies have Whole portfolio increased March which be the that course, inputs on in are right country. probably across we're on portfolio in have those see have and that that to requiring gone it's increases continue include the the are portfolio, about and But but feedback will in of every and been do are seeing day going And accepting are are that in like April. that price an again, see We rate on costs the that companies company terms that reading and increases their the we to every those There price be with, of customers, about now that being I doing obviously cost And the of that prior We inflation pressure. have would nature places a getting number are the pressures literally increases companies that put and through. acceptance in all months linked and seems price Walmart of we pushed our oil only not definitely able increased to to understanding

Mickey Schleien

explanation. Thank you, Stuart. I that appreciate

you Just where ended last us give can maybe sense one special made? for of undistributed of housekeeping income your question a you distribution the net the year taxable for Joyson,

Joyson Thomas

is Making pro in the paid forma for $XX.X was that January about million. approximately distribution XXXX, regular of income undistributed

Mickey Schleien

have questions, Thank but $XX.X couple million. give you, chance into to I'll questions. to a someone queue Joyson. ask Thank I else hop more a you.

Operator

Bryce from go And Rowe Please ahead. we'll take our next Hovde. question with

Bryce Rowe

and the Thanks good for afternoon. taking question,

spilled Wanting size here, here start and mandates, I talk lot then about deal that digest. like what think in activity that first into to both first you've a quarter. seen quarter, out a looks the over closings and relative trying the with to maybe repayment to the to to lot kind activity the of

Stuart Aronson

alerted Yes. from and a that were repayments intended those intended not were consummated lot yet. to of sales borrowers we In A have QX number most large company. QX, repay, those by they of of sales of

them here QX. of going Some are to consummate in

Some are in or QX. expected them consummate of QX to

until out year. pushed been have them of later in Some the

where room not are in. or assets put The the the So, at are And that evidenced repayments and not year. WhiteHorse in likely told matter. those the where direct back at getting that, have consolidated same volumes the that we are record we all XX% volumes leverage true not BDC we performance QX XXXX unit, XXX% expect strong to the BDC, record XXXX, in the entity. have this a of of QX by in And volume a had business the on XXXX across close while we record of QX closed a there WhiteHorse strong the so assets. to that also that been been our QX time, the lending exceptionally BDC for at to then in of in last whole addition QX, we for are experiencing a as necessarily top given of the more We is market, as to is are on we

BDC trying only higher the yielding of earn volume saw support If those. replace a dividend. to origination currently of surge repayments, targeting consistently assets the are to we plenty for we we have in of so And

target long so as XX% the the And so we BDC remarks, target, operate long at concentration the and loans stays second as lien under in I are opposed slightly many cover the doing will not as That generate lien larger the we reliable those prepared well second assets will mentioned dividend asset X.XXx. prior balance to higher help leverage more and on of basis. more the of about X.XXx that more will us a income

Bryce Rowe

follow-ups those that, a comments. Understood maybe couple to

You said higher yielding, curious what that's that something increased in JV exactly pipeline? does $XX that kind follow-up you such strong of talked mean? to down you've And now you've past, is the the the quickly that then got JV commitment a into you've million follow-up -- take obviously another you about how that might the

Joyson Thomas

our are be that assurance million JV. close, to incremental to although that are that supposed would has that Bryce, never close, $XX the can mandated allocation deals all deals existing will of of pipeline there consume that

planned, the of caveat the in early question, to as sometimes deals subject this JV to are I very the BDC, the pipeline the LIBOR asset the in limited if is targeting mandated assets excess the seven. close And either or be have to I capacity of sheet all I'm in and LIBOR least I utilized balance don't new in QX. close put don't by moment, into on that end based yields am that at on BDC. as putting unless QX of BDC, any planning planned, several projections on that that deals based on that have that So, your of seven deals the capacity other my at yield on will And

that the to So and LIBOR build first secured above. with with BDC XXX able assets are it's situation senior a very to yielding high the be class lien portfolio

Bryce Rowe

It come is. chance. I'll I'll Thanks Stuart. queue but Think give Yep. a back two, and maybe or a somebody into follow else the certainly jump with back up

Stuart Aronson

Bryce. Thanks

Operator

will B. Securities, we go next take Sherbetchyan from Riley please And question Sarkis ahead. our with

Stuart Aronson

Hi, Sarkis.

Sarkis Sherbetchyan

taking Hi, thank you here. for question the

concentration the that to going at with investment could in, It zip you And again what's know, Just this, and portfolio sheet keep the this then of you're do against, leverage of of kind want repayments very you higher or I the know yielding higher kind Is of to activity the right? first you target, can of of the balance but be deal the that you like, come sounds seeing? reconcile you on to you'll code, kind lien, it know, like framework? as this know, look you now, And right in clearly, the sounds just, -- maybe you're new based prepayments come kind that level towards called choosy. back assets. redeploy the back

Stuart Aronson

of supposed times in the current BDC little we're your non-sponsor the our in the At currently are includes moment both strong. should operating higher and a quarter. based are on the exactly on repayments the of we based pipeline expecting say before come mandated moment side have But very where leverage today a the would sponsor to our several deals, actually fact at assessment across the originations X.XX and that is is in, activity current the situation problem no are We right. I about leverage, which pipeline, repayments some end at

return good BDC JV the balance for QX yielding yielding And finding are sheet. good, do risk of BDC the to and We of high assets assets the QX balance as even our for in portfolio. we optimize higher we the the very operate will and best

Sarkis Sherbetchyan

what was a gears inside line, different it Great. a And than the Is at bit the then because place? XQ debt look shifting I there interest here about extinguishment higher cost if thinking That's I was super just a in be anticipating. that I bit, expense think I should helpful. or

Joyson Thomas

be would from debt costs issuance Sarkis, accelerated line. those expense is that correct. The amortization the on interest

Stuart Aronson

Joyson, you what people so calculate that just Can share cost was in. that can

Joyson Thomas

Thank The XXX,XXX, you. is approximately X.X gross amount million. Yeah.

was million, mentioned NII. core benefit the net I X.X that before, impact fee the As adjusted to out incentive net of

Stuart Aronson

And first on about share the $X.X that's a what, Joyson, basis, share?

Joyson Thomas

Somewhere half between a three and and Yep. four.

Sarkis Sherbetchyan

Okay. Fantastic. I'll in the queue. hop me. for back That's all

Stuart Aronson

Sarkis. Thank you,

Operator

we ahead. Please with Melissa from [Operator And JP will next our Morgan. go question Wedel Instructions] take

Your line is open.

Melissa Wedel

today. questions Good morning. taking you my I appreciate

for the share was you activity, half getting driving bit made comments context those of the hoping or uncertainty can the more is the this in year. bit sort pushed What's Thank you given this helpful. reason -- first could concern more delays. One be sort into to you. that. any there repayment Is of around a Anything capital share with of little delay I about a us in environment? would or you little of are increased companies closely, the clinging

Stuart Aronson

equity that bad would heard Yes. sellers them them, on equity that players nothing firm private some I've those I concerning. equity assets. what the they to sell. There's is that lower could certain some leading the bankers through firms in representing And and want who were valuations told nothing from or not say some levels at non-private get came valuations to cases, their even

So delaying in or they're XXXX. sale that until later the either

none are And those of exits companies problem, we the -- just infrastructure happened well. just so It taken for not to A of cases, strategic of that relates that to was gains desired has assets, they're the equity company phenomenally regulatory in to company have the that approval. some is buying anticipated, than credit. pro So And company. holding particular, credit not of a a longer related planned continues related the there one And which sale is in regulatory are yet one and QX. have the where primarily approval do They're spending, going performing. on. problem to in sellers all the

point or to think occur XXXX, I March. expect secure most of there sitting we're have during do -- we month those we expecting during three and see even two of some at repayments that the repayments more today, So

Melissa Wedel

that and interesting, public It's valuations, exactly Got it. on discrepancy might but there's that, hold with I a new appreciate directions that up activity. where -- BDC heard we've deal, speaking heard be other that season some to market managers originations context. to private two a we've speak and could slow from point managers One that some that -- different could it that. between

demand private could other in that, drive The to a market thesis growth the is tailwind for of possible debt it origination. sort from capital

having Thank the with growth contacts some tone your new but of activity conversations you're on the deal point, portfolio interesting. I'm on hold on for the your looking talking that Are at you're company? BDC this given constrained and So they curious be up the of understood you. would the that is capital that about, what's issuance,

Stuart Aronson

Yes.

Our on mode. portfolio are the whole in growth very companies doing and well are

add-on that number organic expansions. a do greenfield companies to have acquisitions continue We or of

Grupo So to of of have very We're chain Grupo Rico of HIMA past Omicron again, at from are resolve asset positive. down, sense COVID but our in -- the the with exception exception to the of marked other information. tried and and to to the COVID it accounts marks I'd Grupo sometimes we've the sometimes HIMA, is Puerto that how in trend you that's right portfolio, move the some us, and very results you balance largest steady the a down realistic be Grupo downward direction, cases, the hard to only steady generally it way been has But flash the quarter for is on the working I'll continue to and HIMA affected next say line, quarter with in march on not And caused performance the hospital had, with marks of look see issues downward march significantly. combination new HIMA. best be seeming the positive. asset will again, the going been up the portfolio get We've doing second it is move historically trending in anything February Rico that. just of always the a the very is assets. have even to Puerto they're a that's on in suffer and remind secular

Operator

Raymond We’ll take with our from Dodd Robert James. question next

Robert Dodd

from my line. morning time Good

is and Grupo mean, then trending that in origination are of the direction? financials on on that mentioned the just trending more on HIMA you direction. negotiations the are one in Is I you it question. HIMA direction wrong incremental any or wrong give Grupo trending us in First the the -- wrong Can the work

Stuart Aronson

continued has negative to performance has financial very the to negative situations HIMA be led and performance Grupo financial the the say, ongoing markdowns. would I

that different options And And But had don't below H.I.G. giving markdown estimated Last and have expectation optimize comfortable -- our our will of those mark, mark it's further that week a situation, of performance of the we at you we're range. our we out employing week strategies that's is we our was, of asset. quarter, mark both why, the an We on that above the by outcomes a a different there Robert. quarter, were because number outs be company. estimation the know based a based financial at I'd -- on yet where played were be have using number of a our not best that been this number to resources on have above come. end

$X.XX I markdown probably that be that $X.XX marked to think or at currently. the it’s to $X.XX will compared

Robert Dodd

I participants and in general think this we’re slow the a of seeing in I year, of it seems was you're volume as difference up in has opportunities QX. strong different in lot any be versus in -- through you and BDCs like with even pre-COVID been trend rest any quarter? other credit clearly we are why it QX sourcing about I this mean, QX, Can to The you're us also is that the telling significantly versus channels you a is is? that -- should which it the on outperforming a industry it what seeing, seem mean, just mix say but say, what was for starting -- QX coming terms is you those a case the of the very now, mean, that through -- QX getting the doesn't private it go to maybe give quarter rebuild there down you, what of is

Stuart Aronson

America. can North XX we I tell you offices representatives All is across have that regional in

New banks we so own volume. rely York volume. to bring don't and generate on And Chicago our the We us

guess some not I've a down refer QX, from for to so us. the And been QX experiencing has lot and are normal in that of case industry from slowed heard a QX people most that is they'd what the what other players has as I the

more deals to into where that the indicating higher leverage unless capacity, I operate are we're our still being the turning would've can't XX deals relatively we others what that year from are my a aggressive because levered. in is market. Our we're we're be equally there And mid-sixties regional even career too ever to in heavily. as you've origination leverage. price. had we’d capacity too honest consistent you, wish that strong. a up to the anything take in take I network that including of deals We being busy, both don't which history private put I or BDC, liked going hundred to my And BDC at number to just equity portfolio was selective seen the operating and And strong. with leverage, doing. is non-private a highly think with we to frustration, QX. the But at down operating also we equity I we're team the and deals predict on them is BDC, has on speaking, been generally this is down closing have cyclical where almost people surprisingly of remember what the percent exceptionally QX. or can't result, turning budget the My biggest up think deals modest didn't strong, the want frankly We're with We're being are so And is be pricing of too I

likely is deals will the and the JV, XXX So and sheet on would at LIBOR on to be which now would be XXX I anything we're of above, JV say focused right the deals again, or XXX I going going above. all into probably focusing the is the on say, higher the deals BDC XXX, to balance historically priced yielding deals.

Robert Dodd

it. Thank you. Thanks a lot. Yeah, appreciate

Stuart Aronson

No problem.

Operator

Please We'll from Schleien Ladenburg. take a go with Mickey follow up ahead.

Mickey Scheleien

about frustration BDC. Stuart, just the to follow at up on leverage your

trading stock some capacity? prices these raising at and equity common some open you are NAV, unleashing the above to With

Stuart Aronson

We cause always the future we it, we as we above have down depending in not The for been shareholders. think have At but opportunities that. do what willing consider the has that we consider to not what on to far consistently, trading chosen could very path go right been so moment is we strong it'll BDC NAV see the basis BDC fairly that these promise can't assets. comfortably know. reliable happen, But to -- higher a we're portfolio dividend is cover desire allow us on assets on the lien yields a And with desire our to build optimizing and quarter never instead the portfolio quarter. with first our you yielding our again, to

fees. X write As cents of bond of earlier, on you we and had share But per that, the a been earnings three impact heard share an higher. would've the absent about or half off the a

the are no promises, right optimistic where in Again at optimistic. we capacity we're about we're sitting So now but moment XXXX.

Mickey Scheleien

I understand.

debt am exits to were your on, quarter, it In seems at and that in year. when I correct? investments of the missing the terms portfolio, interesting Is the fourth cadence that in end investments I versus of Or the portfolio look something? skewed the trajectory you’re the growth very your much the net of

Stuart Aronson

my whole -- very close We XX had in been QX lot that's and that the of it's December for normal a year Yes. in deals career.

in to we So into then QX. that were roll yes, a over things supposed a too, assets had of lot couple close of that happened QX and the that did

Mickey Scheleien

what notes private. Understand. are your in My which of give future? – understanding Can ones you of them point at callable sense last a time to are notes are extent this question, many of the in that us or unsecured near

Stuart Aronson

commentary have on do Joyson, you that? a

Joyson Thomas

Mickey, callable. of of we right any or are end as of -- XXXX QX don’t have now the as that

have in As you know, we do that XXXX. roll off some

And so probably this back in year. that at the of we'll look half

Mickey Scheleien

So or kind they the do those XXXXs, it was is I call -- make of thinking feature which ones a about, were have

Joyson Thomas

right. do, They

response. just my maybe to clarify so And

paid, in prepayment there that's that aspect, with require we focus. to -- would a the call are that's technically of could As year, with I now also be And I'm so that ones end, maybe premiums and you this prepaid a sure where that not certain appreciate features be on that later think in from right? from that can would come at some that these look premium, right redeemed

Mickey Scheleien

I enough. all time. Fair Those your you questions. thank are I follow-up my for that. appreciate

Operator

Rowe go we'll take Please up And another follow with Bryce ahead. Hovde. from

open. line Your is

Bryce Rowe

BDC the relative or JV’s to both give maybe portfolio at within about JV? the then is asset and the weighted a can question feel sensitivity BDC to ask the floor the or JV, us at debt the Thanks what asset you Joyson, and a the might lot. how similar a BDC’s Wanted for look the sensitivity Stuart average floors just within

Stuart Aronson

fairly our There SOFR of basis or with floors portfolio deals floors a are floors LIBOR The points. at lower, are bit XX consistently couple are little across X%. that

or as I we is our floors all and have our think all virtually well. pipeline assets consistent assets current of with our either on of that

floors. adding are We any not deals don't that SOFR have or in QX LIBOR

Bryce Rowe

That's tied of the fourth And non-accrual to reversal in that? for PlayMonster, Stuart. move to any quarter me, interest the more great, for

Joyson Thomas

was There none.

Operator

are there -- questions at no further And

Stuart Aronson

Any other question?

Operator

are to turn further for there the at I apologize, questions No, this I’ll speakers time. call no back closing any over remarks.

Stuart Aronson

our be us very we As with to in our us there's the call call between any to always, market, let that if we address, share do any what know like and next and to please time. have thank for shareholders do responsive. I transparency the of seek would their topics analysts this we'll best or everybody

Operator

Thank you. for your program. participation. Thank this And conclude today's you does

any time. disconnect at You may

WhiteHorse Finance (WHF) 3 Mar 222021 Q4 Earnings call transcript