WHF - Earnings call 4 2023 | WhiteHorse Finance, Inc.

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Operator

[Operator Instructions] Good afternoon. My name is Angela, 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 2023 Earnings Conference Call.

Our hosts for today's call are Stuart Aronson, Chief Executive Officer; and Joyson Thomas, Chief Financial Officer. recorded X:XX be p.m. being replay available is at beginning call and made will for Today's Eastern time. dial-in replay The number is (XXX) XXX-XXXX. is code pass required. No [Operator Instructions]

to my the & It to Please Jacob over Company. now Rose Moeller ahead. is go of pleasure floor turn

Jacob Moeller

thank XXXX you, Quarter joining us Finance's Results. everyone, today Thank you, for discuss to and WhiteHorse operator, Earnings Fourth

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

may speakers XXXX the to WhiteHorse posted was morning. material refer website from Quarter this which presentation, our earnings Finance Fourth to Today's

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

Stuart Aronson

good Jacob, afternoon, you you, us Thank today. and Thank joining for everybody.

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

million per which representing and $X.XXX a as This net-to-net of to gap quarterly from report share, the share. net slight fourth performance or in by core portfolio. discuss negatively prior to than share net per QX afternoon, interest income will $XX.X investment the offset net quarter share. a at Markdowns of NII covered million represents of of mark-to-market credits, end $X.XXX I'm decrease and per shortly. from $X.XXX base I core quarter. the was per income dividend XXXX. X.X% more million our was or losses core QX company-specific GAAP was NAV and $XX.XX, per our $XX.X This $X.X the -- for of NAV impacted decline pleased were were markups share QX performance related across by a partially strong

constraints activity. with of level This existing deployments QX, portfolio deal in leading to to X $X.X $XX.X past tight origination to million remaining quarters Origination add-ons portfolio of below past capital our with gross activity totaled quarters fourth years. funding year funding million, was the primarily new was investments. a In lack a and and deal Turning XXXX slow $XX.X opportunities transactions a XXXX million the in but slightly highest were M&A environment, market.

deals had I had of new rate with to XX%. XXX deals were of average these average deals. loans half debt sponsor deals first an all other nonsponsor sponsor our spreads the Half basis EBITDA. were or QX of The all-in leverage that higher in were X.Xx approximately and points lien and originations note an

and detail in for X within Ohio exchange in more that totaling was STRS the the add-on quarter, $XX.X and to of I will the million, JV transferred these BDC shortly. the JV During discuss X deals new cash. activity on

X approximately driven fourth of X/X portfolio repayments QX, At partial secured nonsponsor. more primarily total complete $XX.X and XX% mix our X/X senior of than first and following were our sales and quarter was million the debt sponsor end In QX, was realizations. lien, portfolio originations, by and X

were there million on in $X.X repayments net addition, commitments. In revolver made

repayment companies the X relative and continue first lower at Currently, trend have a visibility As of in as earnings M&A And remained ability during in the addressed likely based have refinance on repayments activities we repayments first of -- of and full of XXXX million anticipate some $XX through rates. elevated the XXXX pickup into half sales we this call, half today, to had to already activity QX. of a our in sorry, number across in investments. last XXXX, and

redeploy investments going to this seek and attractive will quarter this We into forward. capital

and below quarter. modest offsetting prior X.XXx, activity, our lower transfers unchanged is leverage effect of With target at leverage from repayments end JV range. still the This net the remained deployment the our company's

lower so expect to portfolio lien we first risk the as than continue X.XXx loans, BDC loans, up heavily our long have which lien second to in at to remains And run concentrated leverage.

debt JV was mind, step portfolio and and QX. of in With of net transfers, million in as of the $XXX.X as end investment of well million of primarily weighted investments end increased entire After QX, our was This XX.X% at and fair variance value portfolio at The $X.X a accretion, The driven quarter. value $XXX.X portfolio into effects from the that spread. the to effective of QX. bring our rate on average mark-to-market end the yield in million the at STRS slight the of previous our million the net by to repayments the our base I'll now as portfolio's changes end back the investment of compares to of up $X.X the income-producing focus. XX.X% fair of increase

The the BDC up from utilize in million QX, successfully. approximately the $X.X income QX. $X.X to million in investment JV continue of We JV to STRS generated

XX, annual portfolio XXXX. at As XX.X% at was is This of in our of of equity portfolio compares to yield to of end to shareholders. unlevered fair investment equity the provides $XXX.X JV primarily WhiteHorse's of of due JV's producing is the yield rising average end the unlevered XX.X% return base the an and on the JV our mid-teens end We The an in had value believe at million QX the attractive increase December for year-over-year the the JV's returns rates. The average QX, in the XX.X%. QX and BDC. currently

increases BDC's the during to there investments. Transitioning portfolio in products. Software declines by QX, various mark-to-market more in the portfolio Atlas being which were mark-to-market is with known driven declines Aspect markdowns as These by Purchaser, Crafts, partially portfolio some broadly, net were and Claridge investments American in our offset also

companies, shared not in seen the financial remain portfolio healthcare, We or other TMT including consumer continue general As we demand pressure preparedly on we industrial in general see vigilant and some sectors, economy have we've weakness portfolio segment. monitoring our before, of the to and services. our BXB, in

with no have we protection, portfolio and totaled auto, we Additionally, our new as our credits credits the their noncyclical new X% nonaccrual are mostly contingent our of strong the value and or QX. No most partnered new includes were in and during equity QX, finding or the X.X% firms restaurants. construction of cases, to supporting gas, direct light oil total at to needed. or that, private covenant majority exposure of in portfolio equity deals compared The home borrowers, at with quarter. investments with fair have nonaccrual moved cash vast end at are we end of And

or of and NAV million in marked nonaccrual investment overall remain balanced this debt of credit Crafts portfolio down generally, pleased by portfolio, than longer was health portfolio. see performance in remains is turnaround anticipated. The our $X.X troubled we terms activity our in And the terms of approximately the asset status. per with share Across American QX. on of taking $X.XX the

in Play control we remain as that Our company of of Arcserve We implement other in and Crown on believe upside in potential the investments coming Crown has to and to hope asset to months our took Brands XX end Monster, exit profitability. Arcserve as investment XX the structure well. this successfully leaders and and to we the management QX, nonaccrual quarter. Subsequent changes we optimize

remains markdown we Atlas was effectively on Aspect and company's remain troubled a purchaser, we to ongoing be investments to and optimistic asset status, ability accrual turn appropriate around the Capital on capital situation. given continue We during QX, invested proven the our to resources in Software, taken restructuring. which expertise the and on capital. which monitor Finally, successful a H.I.G. The turn navigate Arcole objective our with of preservation. generated return to X.Xx have on WhiteHorse investment investments and losses around illustrated a by and the our collective minimizing ability exit to leverage believe of

our portfolio performance. with their to troubled companies We actively improve working are

Turning to the and lending liquidity increased markets from characterized both were by in market. lenders The direct banks. QX broader

points sponsor the a deals fell by pricing average. in As about on for result, XX basis market

in the market ramp this As up additional to with liquidity available has activity we continued becoming XXXX, enter marketplace.

had people seeing XXXX. on optimistic a including than moderate that and view cyclicals. in we more both of for the aggressive price, competitors are more our And a economy as as deep companies result, We most leverage are on and see have becoming they

of The between of structure. aggressiveness Pricing XXX down now price come sponsor SOFR terms has the of both deals right XXX. in upper on-the-run and is XXXX and market on reminiscent mid-market SOFR to

aggressive to deals the we X.Xx mid-market is the deals done for consistently loan very an in we're QX which to X.Xx SOFR levered value. deals and typically sector, as to XXX getting Xx deals cyclical In seeing with XX% we're to mid-market, X.Xx Loan-to-value, leverage XX% lower under XX% are SOFR XX% and XXX to lower at nonsponsor to XX% to at of the to average was in mid-market deals a under mid-market is deals. pricing XX%, to seeing lower now as and are loan-to-value up upper-mid-market. cyclicals leverage Xx, We XXX XXX and in still view seeing which for mid-market while at mid-market for being for In the credit. in higher Xx, XX%

nonsponsor market to remained XXX X SOFR in with at Additionally, pricing of to has multiples stable X.Xx. leverage XXX

are the where nonsponsor attractive. market terms our current more focus cautious in remains we In and with on-the-run market off-the-run being sourcing the remain very especially, the sponsors our on comparatively market market and deal environment,

because rate Our prices. target is still pressures low, inflation into will XXXX wages minimum, X% think to cuts overly on higher on expect recession, expect XXXX are that hit other and and and going view we as people there our underlying the Fed we is but growth on that down quickly because and a in raising that a market the to don't don't We are through that rates foresee raw its remains seem We slow the at is slower economy as believe think. materials unemployment XXXX. We economy. perspective maintain optimistic the

including competition, thus allows the which us our model, off-the-run an we market to derive particular nonsponsor where we environment deals there is sourcing market market far less corners market. from in XXXX, seeing what source the like of In are elevated and sponsor the and benefit

and in architecture H.I.G., and capabilities, X-tier is with provide to continue significant advantages BDC continues affiliation Our to XX shared of in conservative be mid-market who sourcing mid-market. a lower WhiteHorse from with leader enables the in pipeline the origination derive differentiated across deal and XX regional resources North to the we located markets our America. our selection. origination The us strength has professionals

we our terms originating in market a and pipeline the As and solid. deals general, levels volume general In attractive we are are deal of remain quality result, more rebound both seeing and in return. of a believe terms continuing risk activity we're than the

JV of BDC has existing repayment million at $XX approximately capacity Following QX, assets activity for sheet our The new the the million has BDC's capacity. of supplementing leverage target approximately capacity $XX balance range. in

sheet. are move at for XXX for the at above the our the SOFR the and that are XXX and targeted markets, and priced targeted below priced balance those With deals BDC in JV

first and these fit can would new and JV several Subsequent these to elect Of on transferred transact. nonsponsor X portfolio investment our acquisitions. of new mandates should with add-ons quarter. closed close, We're within more BDC XX all new while will add-on the be X Of platform no that to all originations, And deals the we any or the end, to the actively have during pending. companies working we was there mandates, JV assurance new are the deals. X quarter originations of to mandates existing

shareholders. for source continues to sustained remain due well opportunities, and standards continue we positioned delivering believe activity pick economic of our to challenges that short, to continue In conducive cautiously up, underwriting we Despite to remain are and softening, conditions attractive navigate rigorous optimistic concerns WhiteHorse. economic our market to we

January starting The Directors to As quarterly a share result, in rate Advisers, our X% the further management X.XX%, we increased our the BDC of QX increase basis. that announced share up cover to base per to year. of a release, effective ability BDC to from the results effect financial Board positive will WhiteHorse decrease and this base adviser our of in Board have from earnings $X.XX go-forward XXXX. a paid on approved on This in QX base an approved $X.XXX to fee X, dividend per H.I.G. our the the the dividend

to by Kevin counsel Finance. tenure Before friend the have invaluable and Burke. are saddened privilege like I passing dedication a I'd his worked for service to member, of address and passing. take grateful deeply to Board, a his to Kevin conclude, our are board throughout we and truly on we fellow provided alongside recent the Kevin WhiteHorse moment It his was and

additional details for and turn of call portfolio composition. our review a to I'll Joyson? over performance the Joyson

Joyson Thomas

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

per and of GAAP and core This of core of or share. $X.XXX $XX.X million $X.XXX $XX.X we quarter, or our income NII previously and declared recorded with compares the $X.XXX investment QX million NII per per share GAAP quarterly share. net During distribution NII

increased income investment million to generated full fee from our and from of small million Aeyon $X.X marketing. from by prepayment in QX QX a quarter-over-quarter amounts highlighted million amendment in fee the are approximately $X.X fee in a QX. QX realization motivational $X.X

we quarter, assets the $X.X of million. in net resulting For operations reported increase a net from

showed slightly a of our lower X positions prior Our quarter carried the quarter. XX.X% rating, risk in during either XX.X% that X than ratings the portfolio or

a risk X has reminder, company relative of indicates that to X initial initial rating performing and is a seen indicates according to the a expectations a As expectations. reduced loss rating its company

continue to Regarding its the we grow specifically, JV portfolio.

As million. deals add-on X new transferred totaling mentioned Stuart transaction we earlier, and X $XX.X

of portfolio in an value December aggregate As with of XXXX. value at $XXX.X million December companies compared positions XX helped fair of as XX fair JV's XX, million XXXX, aggregate an portfolio the portfolio to companies $XXX XX, of

investment of on equity. company continues new portfolio accretive JV X to the fourth to earnings, be X company. a quarter, in to end return the investments generating to the The Subsequent including JV, mid-teens transferred the BDC's the the

the investments, As investment result credit JV's timing the as performance prior fluctuate asset period-over-period we the factors, portfolio. changes in of of calls, the a underlying the number well in and have amount noted including portfolio yield in our yields a JV the investment overall of of capital on the may in as the as additional

at in cash undrawn revolving our restricted of balance Turning to resources credit had facility. of $XXX million end sheet. QX, We approximately cash million including million capacity approximately and $XX.X $XX.X the our of available under

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

after QX consistent X.XXx, with Our for prior effective cash the hand adjusting to debt was ratio equity net quarter. on

call that quarter. first XXXX again the Before distributions. $X.XXX like is with to to conclude a This we per the previous quarter open I distribution and share, announced questions, which morning, up Board highlight declared of I'd consistent our our

earlier of share, represents to compared actions we current BDC's create declared inaugural the of As strength consistent our which being as speak platform portfolio as quarter increased deal resilient distribution the a as our of the was at well IPO. to by income. cumulative dividend the $X.XXX mentioned fourth share to generating These that sourcing per per both capabilities able X.X% XXXX, well-balanced increase Stuart, quarterly and base consistent a $X.XXX in with the

beginning of our distribution. XXXX, supplemental a As quarterly was announced the in implemented also Board formulaic

that believe supplemental over preserving framework of We driver distributions For we maximize of a the did quarter, NAV, is declare an to us consistent stability allows our a with shareholders which our the time. supplemental formulaic important to distribution our factor shareholder while believe be Board framework. economics this distribution, fourth not the to

a we our distributions, assessing that taxable setting during have we In distributed the relative also consider dividend. income to when amounts overall year

of Our $XX taxable the referred million. of spillover current approximately as undistributed income, as our estimate QX is to of XXXX end sometimes

level having base of to that the believe beneficial our lower to is healthy dividend. stability income long-term continue We a to the

to earnings and We considerations. balance prudent levels undistributed against management monitor will continue these our capital

our December the $X.XXX be XXXX. with March distribution quarter will distribution, in X, payable quarterly XXXX, rate per above distributions XXth to all since stockholders record of per at XXXX, or of upcoming April share XX, of as paid IPO a consecutive on The

continue evaluate medium said factors previously, earnings and near portfolio we the quarterly in may As in other term both we on to our to will addition consideration. the core of warrant our that distribution, relevant based power

Operator? call your the turn now for I'll questions. the operator that, With to over

Operator

[Operator from Instructions] comes with Our Mickey question Ladenburg. Schleien first

Mickey Schleien

One question this afternoon, Stuart.

continuum, spreads the now origination, know, mentioned time. and -- which, You has harder a focused to we spread on you're source the of has become market is end at how and as tighter lead and the liquid more with direct aggressive longer

the repayments see this likely we're to comfortable to So deal in are that flow all these replace you that BDC's direct in origination with you're ability potentially environment experiencing?

Stuart Aronson

with And call X at years X Well, of sharing getting protection. heavily deals, and most Mickey, X that on very on X than nonsponsor we markets got deals of for were call call years. very you And to which deals, by on protection in, our least more many we of in at to years. our I'd focused or we start XXXX lenders favorable originate XXXX, our protection got competitors sponsor

M&A -- XXXX. activity, we that call pick be repayments So we we mitigated repayments due and this pricing due up that, that protection in think the while think will year, got to by will to XXXX the

desire firms. strong on solid. being what and they're pick the returns volumes based from of the pipeline by more in hear get And to markets LPs aggressive we capital from to right private overall up activity debt equity of are the driven that the now likely pretty M&A Our higher is market

deals that that there have think plenty may in But replace that of lower assets volume a been that put higher have repaid. environment replaced do get be deals interest rate we on to be with will So spreads.

could are in XXX that were replaced at on deals that like look of deals and sponsor the shared with pricing pricing XXX SOFR the JV, look And being were pretty on could BDC on always being XXX the with with remains deals replaced that So or XXX that XXX. with stable sheet, you, sector. that like balance at definitely or the And sector the market at XXX deals deals tightening we've there's XXX. But between as XXX. been nonsponsor typically SOFR a in

Operator

next with B. The Bryce Rowe comes Riley. from question

Bryce Rowe

of commentary around some activity. Let with quarter-to-date -- quarter-to-date of start first -- the the me repayment kind

You noted X kind here by of are of even if driven of Curious driven they kind activity? deals. for or refinance? they are maybe 'XX in those price slated for slated kind Or by some were or M&A maturity

Stuart Aronson

comfortable one was credit the to owner was whereas but the company wanted And Bryce, of doing given did and giving dividend. the the company, did wanted feel not a debt, profile Well, the that other only not were in take that the maturing it. deal a of of company we deals lenders the company refinance the the comfortable dividend feel sponsor to a

So exit. to chose that but deal we refinanced,

that M&A those getting deals sold were where activity we on mostly based companies. repaid the other of sale The were companies and were on repaid being

Bryce Rowe

do guess, think the of BDC? of finish kind Okay. of in you have, they can look -- those and And BDC investments, maturities How at or kind amount about kind the outside you of get That's if of line? to then Do them refinanced foresee I of within feel your you the helpful. getting moving schedule you 'XX. a do decent you

Stuart Aronson

economy lines those we we assets XXXX certain a in hope up have will And we to those or to But we our long for And owners. that not We situations, them have other optimistic like refinance term come follow exit. on companies probably, expectation 'XX. where choose companies probably trend companies of to based and muted would are as we the we for refinancing, but for see less these long-term about. new that definitely,

level, is on very really is those that's the our the for market And maturing, we at problem. outlook marked performing credit refinance and a normal market each right is that have will mix anything based feel that highly deals. that transactions now. of a no there the confident aggressive with we So But

Bryce Rowe

Okay.

you that the You that already up transferred BDC at and noted the that invest kind with JV? being the the or JV. Does capacity JV, have let's equity that on way. guess, more -- of in say, capacity capacity JV? both have the more is let's to of the behind in been at terms The of able current based or this I the capital into of ask And borrowing level capital I new it kind do taking is at within commit there? base it or the, firepower the kind deals mean,

Stuart Aronson

million that that balance are close. into million to the close believe to for all we the XXX are in account for the are not And do pipeline priced of deals and all or JV, nonsponsor in done. looking SOFR that $XX numbers are that those sheet into at the we again, I take looking are take new the deals recent have account that higher. of BDC pipeline deals the the $XX deals They all and transfers

able was because network, to at In we were fact, deals origination value. closed modest source nonsponsor modest we the SOFR here QX in of opportunity plus loan an to at one our and But leverage of that XXX.

that's would bank So terms. what was lien and at first a that normal, we deal call --

very very, on good So origination that.

Bryce Rowe

Yes.

Last one for Okay. me.

be portfolio. thoughts some would the mentioned helpful. You the markups? just within the around driving any markups What's markups specific, By

Stuart Aronson

an it that, this accounts may certain exit on I are that Crown we quarter. we credit situation. There Yes. And if that exiting happens, negotiated mentioned have where Brands, there's improving done earlier contemplated, higher will even be transaction at the And mark. we'll that's we be a get up as it be price the than -- quarter. deal was current that marked in if last this an

Operator

Zwick Hovde Erik comes Group. question next with The from

Erik Zwick

in in if additional provide But attractive the and wondering you to could Good I maybe pipeline, number little industry of -- terms want on first process is also of mix kind a a type start to noticing on versus the a question commentary of of afternoon. opportunities with by number now. which seeing? you've a or of kind there wanted that country has terms I it mentioned new the add-on of and of opportunities in you're any region whether common themes terms you're of in the and/or opportunities

Stuart Aronson

about I add-on for add-on done mix market a most and about the The market, borrowers believe based platforms higher more on opportunities. that opportunities, the price to because X the fact aggressive. adjustments is looking has priced the were part, X the become in deals new above although price current are for those that the market

As sheet. attractive. I deals all would more mentioned for activity nonsponsored mandated before, now pipeline new no deals. we at is BDC nonsponsor those above, XXX that be finding all priced that the of is sector particular the right are are balance of And And targeted and there are so

on company, just at that for us was be weakening into high believe a the XX% more say heading cyclical And loan was leverage was but to I deal there cyclical and came company multiple about a was we And and it a a to we is and company, a found recently we that to to are scaled for what brought putting to a company. leverage value company we that value. company like a than on would cyclical, X.XXx loan seeing, what us a Xx we leverage thought a don't and stunningly economy. this good deal

at we or from away priced XXX so above, And deal was walked opportunity. fact the despite that well that that,

the deals knitting sticking all a that we're Xx. and outlook working believe, as are So on, nonsponsor between conservative regards credit levered it our X and I to

that So modest leverage, good cyclicals. either flow and coverages will believe noncyclical we companies cash or be light

Erik Zwick

average additional presentation, of appreciate just has details there. then of size noticed Slide third since the down the portfolio in X million I -- that come about the X And 'XX. at $X I looking the investment quarter quarter

competitive? continue? it's would been So work guys smaller? if have end that size that's of that place more have curious, a certainly the the harder do of in in also keep something benefits actively smaller portfolio particular to deals more reflective, of just trend if to terms market becoming you concentration mix Just potentially the position. trying of physician expect that thinking to little lower kind the is said, the but size as you you to bit Or kind run same, I'm and to a larger curious some

just there. about your curious So thoughts

Stuart Aronson

Yes.

almost on X For a last take significant has and new not or portion either years, full the deals. to BDC of able full the been

good fact of some So that definitely believe and we getting BDC. bring we're positioned our actually the We sourcing feel new a flow into put in to are getting the that about well the solid repayments to to X-tier continue deals we architecture opportunity with deals.

the would definitely, are We which as I that deals market, larger off-the-run in sometimes that nonsponsor do earlier, over say and deals the last market sometimes the the I mentioned correct deals. focused result, on BDC. smaller general, in do and the quarter, you're bit we allocation general, concentrations more the we a But the deals. large the important most average asset And any BDC mid-market not to in a was are were putting lower. lower little doing is, as in were thing

of diversity allocations of going to which, positions it When a maximum million to too than size, were the we $X BDC thought keep across an more I forward good approximately first joined, allocation $XX our be concentration going or no much are just to us give $XX we million million probably was a portfolio. million million, that to closer on $XX $XX with we had to that average will and

Operator

question next JPMorgan. Melissa comes with Wedel The from

Melissa Wedel

whether not on wanted million end, the specific I'm of but you were not you end the I in about a side. with check $XX but this origination we got quarter post you there provided missed I said possible to amount quarter amount total new on repayments a I or It's subsequent think investment to activity? sure

Stuart Aronson

represented do was deals much volume, far? so I But this new think and have X deals how closed. the add-on in it you deals Joyson, quarter

Joyson Thomas

during deployments approximated QX, new they to regards about million. In $XX Yes.

repayments I to $XX QX the right right of QX sheet, into we the million about of think end during capacity Stuart's in balance now of the just of think way gets taking the by $XX approximately on comments, to million offset QX BDC that So earlier had this we deployments of about now. did is $XX then currently account the million and as

think that's I to way think about So it. the

Melissa Wedel

Okay.

really That's pipeline helpful. of Okay. your based that of today terms, space is segment comments it's say Or And a preference you comments there now. sponsored that strong clear right the because bit develop And on levels little space? I is the the the you follow Would is get the sounds the to source is pipeline. leverage sort wanted your of can very nonsponsored to tougher there up as -- just for pricing, also on those? sort strongly -- it developing the that, about it as

Stuart Aronson

find, downturn and frankly, is that portfolio said, complicated levered a perspective. well always business and during have because including they're and to much the portfolio. performed to longer even our our deals Nonsponsor That than experience, do from is more COVID we much the conservatively very sponsor structured harder as nonsponsor harder better or underwrite that

more But sponsor that extremely fact harder in broadly. involved source moment. many America, at X of the originators locations nonsponsored whom are solid understand is years the or low come those and which in over our regions XX frankly teams to we've them to the on the past sponsor deals, than it across It XX is experienced to out off-the-run responsibility And either North is actively had transactions. turnover a are regular we their nonsponsor is source primary very sourcing have basis. source we their pipeline of So those And deals. to sort due in just that

was But market, aggressive And certainly in what and similar more in in the XXXX. in from or the nonsponsor not more marketplace, to as XXXX. was is on, sponsor the pipeline activity M&A that The terms XXXX even hear it what available our going feed we it should with as it's large there's pipeline. financing both and

Melissa Wedel

I it one, I That's it. really appreciate helpful. in there. could last sneak if One

example in not M&A? owner as being et the comfortable So right capital you of nonsponsored a dividend, refi, it dividend with what I that the now? that you're engaging the Or a space, space, Begs in refi, companies a of you the nonsponsored cetera. you are Is to the in the also seeing lot do nonsponsored question, think wanted refi was the activity? and are mentioned gave use

Stuart Aronson

on M&A any I are through the organically The nonsponsor involve don't grow mandated deals either we're targeted loans deals that think are working primarily dividends. or companies activity. that of to

dividends M&A are sponsor equity growth or always very market are does primarily across firms -- and pickup nonsponsor serve in flow. these owners. to the doing the activity cautious the broadly again, both We nonsponsor loans. But about either And so private deal to

Operator

turn the today's our conclude for does period. remarks. This over back now program additional or presenters will I to closing any question-and-answer

Stuart Aronson

we try quarter. with conservative are down, that I the and those a XXXX do do us appreciate call for everyone that we companies on NII possibility realistic and be that to is we And accounts. a time WhiteHorse on not on through said, have those to believe BDC the on expertise some turn is very strong marked significant have. recovery basis, there we true decrease and spending that of today. across We and which NAV of in believe was recovery the accurate companies we potentially did the using industry we both deals XXXX each around. the the based to across the Recognize H.I.G. and That try mark necessarily that quarter information entire the

to work So to the hard portfolio. optimize continue we will

the company as acquisition example I out the years, to in but remarks, we're the the that one able own And to return Arcole with the recoveries for on of now. good had other assets some get troubled we with to some fortunate types work my said capital we transaction was hopefully, X.Xx invested. right have and we're a deal hope that dealing original of prepared of X a to hard of luck, similar And ultimately at

And that's very Thank you I it. time. everyone's appreciate much.

Operator

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

may at disconnect You any time.

WhiteHorse Finance (WHF) 29 Feb 242023 Q4 Earnings call transcript