GECC - Earnings call transcript Q1 2021

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Operator

Greetings. Thank you for standing by, and welcome to the Great Elm Capital Corp.

First Quarter 2021 Financial Results Conference Call. [Operator Instructions] I would now like to hand the conference over to representative of the company. Please go ahead.

Adam Yates

morning, good and you, everyone. Thank joining Thank Corp.'s Great Capital for quarter you Earnings for first conference Elm us call.

where up If you website you relations@greatelmcap.com, list, to at our can would like to can be www.greatelmcc.com. e-mail on alerts directly for added distribution you our sign investor

investor In to an for an accompaniment. we'll be today's addition as call, comments utilizing our presentation

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Peter Reed

detail, and for then $X.X while you capital investments, with and today's of To portfolio. of will current for new morning, slower-than-anticipated our excellent GECC's portfolio excluding overview experienced quarter. and quarter performance the Kleinman; we discuss able early of quarter Adam. new the return SPACs have an Adam in you, position approximately discuss joining Kaplan, in and begin thank COO, weighted we're our in I call, Davis; that greater ended first our million On will the manager us I'll to of Thank Matt in Keri closing a NII yield during will begin, X.X%. remarks. position. deployment an depressed degree, And for in deploy Good Matt Keri a today. we the our Committee. we CFO, capital Investment period investment to average a a member at our

we ended with the In strongest the the since addition, asset ratio beginning of our pandemic. coverage period ratio and debt-to-equity

opportunities we Finally, assets of invested as $XX allow specialty advantage finance to and our are or To million we market fair will credit of of begin that outline, fully seeing also value cash had take of in of value revolving of investments million, with position per overflow Capital. quick announced a signing more $X.XX with $XX.X be share. facility yesterday portfolio ownership quarter-end, Prestige Elm $XX.X of a at in asset a million Great the yielding net million $XXX.X part GECC a and the

was a XXXX. reported as for to million NII high the we to realized this of the largely cash NII quarter is detail In and the December unrealized per ended $X.XX quarter higher due and NII which for XX, is from XXXX. compared $X.X as approximately or This share we'll per $X.XX gains on depressed on terms increase December sizable quarter NAV, expenses with a remain investments, share XX, shortly. share elevated. $X.XX or balance of was million $X.X entered legal per the

the that Matt NII couple the a legacy April. related quarter exited detail will let developments a I'll and no fees NII position after served favorably expect will in a go incur These past While into greater fees We we X in drag review, quarters. there coming on on Boardriders legal quarters. during longer portfolio have impact the notable as over of our were

increased capital continue important quantify of into understand February timing January, quarter. deployed the and and have was the second in period. March. during $XX.X our to the it's considerably of quarter, the million seen of Second, the during XX% impact over for after we GECC We To deployment momentum deployed this

factoring to to provide opportunities increase have are calls, continue increasingly channels Prestige to and sheet investment achieve transactions as utilizing an background sourcing in first our to IRRs with I to these a the can to attractive GECC unable been and invest. leverage quarter, larger In in of Prestige create In Prestige also Prestige over XX-year balance diversified the opportunities due we provided of on benefit size pursue, investment sheet building continued certain that as works We have directly. constraints. to capital enables in a number from a to past, this of and larger work would relationship proprietary transactions on participate may balance we Capital. insight pursue we Prestige portfolio our provides Today, little may to allow In investment the past transactions the how its want time. GECC's and factoring business. Prestige's that GECC its history towards

in However, XX% XXXX, XXXX, stronger Prestige per believe a In X a completed following investments, which we additional than opportunities. quality rate at leverage investment have we these needed typical pursue participations annum. of it capital merely to in Prestige credit investments that became apparent our

and a with Bank to million to Our goal LIBOR the a pursue a This allows National capital. very and working $XX investments on into at that continue make of credit were other Prestige at to help cost enter them To our rate facility now facility of maturity. favorable larger liquidity, X-year X.X% management with efficiently with advantage overflow we interest us to is to with revolving Prestige take transactions. more end, plus pleased manage borrowings City opportunities an at

added like their portfolio over recent to As our Kaplan. we've we discuss the credit To and performance from selection Jason I quarter. closing committee investment call throughout Imperial facility, benefited I'd recently Jason to turn end, our investment Both Matt new discussed Matt were Capital in last that our and to the process. members instrumental from and for to X call, the Asset Management; Reese Matt expertise

Matt Kaplan

are this period, initiation early strategy the moving the parts including cash SPAC-based of in a There Thanks, some Pete. management quarter.

value our with or excluding fair we The equity million Our equity on XX yield fixed investments Away X invested X.X%. other a for debt million debt of debt Roughly investments income-generating value. comprised investments account current yield totaling holdings, X approximately X of of $XX current in or or a current in weighted rate the investments, roughly average X% $XX floating weighted of investments is accounting from is our SPACs. debt March yielding of XX.X%. million $XXX $XXX million fair average $XX and rate XX million average approximately with investments and The is of XX.X%. million yield equity debt Of for of investments, debt portfolio XX% weighted value. other portfolio portfolio $XX fair have XX% debt equity invested holdings, approximately

Partners income-generating our instruments also average X approximately We is of for current SPAC accounting Partners in of Equity weighted have value. The X% yield Prestige, million, Energy in approximately equity holdings $XX Blueknight of Crestwood XX.X%. fair and investments

currently telecommunications into Our weighted services is portfolio holding the in heavily wireless Avanti. our industry largest

finance of grow However, monetized less further portfolio our the expect quarter, investments concentrated to stable. generally and we million with additional In in specialty million in space diversify finance we the the holdings, portfolio first as our into our yield deployed we with focus approximately $XX investments and new $XX remaining sector. investments the specialty be

in we We to XX% This at were below debt of successfully and average compelling weighted monetized par capital the able of to at to last investments par. deploy investment find of have prices opportunities quarters. XX% able quarter, past price been X par a each at

associated a exit a our past average fees, XX% was price NII par on of due Boardriders, we at weighted this legal investments which monetized to Excluding of quarter. drag

permanent cash warrants. in call SPAC on million a securities financial $XX upside to up, to for all are X% a management We deployment Before to or wanted are of risk invested the few form cash, I into new decided we recently implemented the turn highlights, inherent NYSE. investments XX, better believe advantage turn GECC a it dynamics structure earn shares or through deploying as March of To mitigation to to million management on IPOs. invested into portfolio over on opportunities to has SPACs focused highlights. to take invest we entered Keri? our go discuss the to short, capital SPACs financial an take able create risk to of the we for with also $XX I'll minimal Keri their be securities NASDAQ I SPAC a upside. a leverage for potential impairment Keri portion return of be investments deploy a cash our review Elm. cash retaining our our the to which upside with ramped tool avenue a utilizing At With capital instruments. that allocation In as and XXX cash relationships of We into of SPAC higher-yielding listed publicly SPAC of our capital, will for of Great while broad quarter clear, capital hybrid moments as believe to the yielding in was that than we the with seek traded are to is our in that, of approximately our approach underlying

Keri Davis

increased of of over March as which invite was prior from at the shares Net XX go entirely for presentation XX the December $XXX.X assets to by from Matt. depreciation million the GECC share year. XX.X value offering compared The million pretty prior net was from million our those average first XX, in March filings. the company slightly to and in quarter current gains. accompanying in these of I'll debt loss and Total of was through from quickly, asset review million came outstanding quarter. NII in per $X.XX prior the were quarter, million, in prior share compared quarter. unrealized in in to compared you share operations $XX.X to per quarter, or the rights to but increase course XXXX, to to the the due weighted all $XXX.X share main the million and reason prior period $XXX.X to XXXX. per the prior XX.X of $X.XX million net of unrealized XX.X in release, was SEC completed from approximately or due outstanding Total largely of which quarter significantly comprised year the million in press $X.XX largely was net net per a $X.XX share prior reported Thanks, increase quarter. at increased the unsecured fair $X.XX value NAV $X.XX bonds. our baby investments as in Total up was $XX.X October

turn Pete ways our million credit I'll CNB. exemplified lower as by at with to of our period We evaluate $XX.X with to continue remarks. facility capital, it cost end. closing was revolving that, for And Cash back new to

Peter Reed

and I'd Board we authorized for a be questions. Thanks, shareholders Matt. Keri your our to happy announced March, take close XXXX. $X.XX the distribution we distribution, quarter XX, with then and per to that information regarding ended to June would like cash our share In

XX.X% on at close earlier, of on mentioned I As April as of an yield an on XX.X% our stock indicated common XX. this and year-end price represents yield NAV the

expect and announce this payable record shortly. dates the distribution to We for

quarter a distribution payment pursuant Our Board to the of are set Board XX, in for to authority of the the dates in its granted also The share distribution by Directors. by expected Directors GECC per quarter $X.XX XXXX. record authorized third be for September cash ending

the have and year, new we what us With over What that equally investments. exiting additional that have attractive to relationship flexibility growth. the increasingly has that, be made We're is will we proactively for with helped call operator high-quality we Prestige, for the credit open future a capital important we provides into to cultivated with to questions. with revolving the period facility last that market greater financial an we'll portfolio believe CNB is for success turn Over which feel position deploy the decisions we the in GECC current environment. proprietary

Operator

you the And of have from Denzer. Alan Instructions] [Operator a question line

Alan Denzer

what going the more Avanti for viability color the little in of recovery us give that potential a business about is on Question business forward. Please Yes. the set?

Peter Reed

your past form for question. and customers lien believe of and thank for first in the was future quarter also Alan, flow. This we debt amount refinance to will significant you one drive contracts business cash that one an its new with important of revenue Avanti new

be about continue business our optimistic and to what means we that trajectory Avanti's So of investment. the for

Operator

At [Operator time, turn to for team this the speakers comments. Instructions] like to for the back the I'd -- to over any management further

Peter Reed

for us we forward if helpful can be us know look dialogue, anything to We joining morning. and again please follow-up. you this Thank in with continued let

Operator

today's concludes conference Thank gentlemen, participating. you call. and Ladies for your this

You may now disconnect.

Great Elm Capital (GECC) 10 May 212021 Q1 Earnings call transcript