Ares Capital Corp (ARCC) 2024 Q3 法說會逐字稿

Thank you. Let me start with some important reminders. Comments during the course of this conference call and webcast and accompanying documents contain forward-looking statements and are subject to risks and uncertainties. The company's actual results could differ materially from those expressed in such forward-looking statements for any reason, including those listed in its SEC filings. Ares Capital Corporation assumes no obligation to update any such forward-looking statements. Please also note that past performance or market information is not a guarantee of future results.

謝謝。讓我從一些重要的提醒開始。本次電話會議和網路直播期間的評論以及隨附文件包含前瞻性陳述，並存在風險和不確定性。該公司的實際結果可能因任何原因與此類前瞻性聲明中表達的結果存在重大差異，包括其向 SEC 文件中列出的結果。Ares Capital Corporation 不承擔更新任何此類前瞻性陳述的義務。另請注意，過去的表現或市場資訊並不能保證未來的結果。

During this conference call, the company may discuss certain non-GAAP measures as defined by SEC Regulation G, such as core earnings per share or core EPS. The company believes that core EPS provides useful information to investors regarding financial performance because it's one method the company uses to measure its financial condition and results of operation. A reconciliation of GAAP net income per share of the most directly comparable GAAP financial measure to core EPS can be found in the accompanying slide presentation for this call. In addition, a reconciliation of these measures may also be found in our earnings release filed this morning with the SEC on Form 8-K.

在本次電話會議期間，公司可能會討論 SEC G 條例定義的某些非 GAAP 指標，例如核心每股盈餘或核心每股盈餘。該公司認為，核心每股收益為投資者提供了有關財務業績的有用信息，因為它是公司用來衡量其財務狀況和經營業績的一種方法。最直接可比較的 GAAP 財務衡量標準的 GAAP 每股淨利潤與核心每股收益的調整表可以在本次電話會議隨附的幻燈片演示中找到。此外，這些措施的協調也可以在我們今天早上向 SEC 提交的 8-K 表格收益報告中找到。

Certain information discussed in this conference call and the accompanying slide presentation, including information related to portfolio companies, which derive from third-party sources and has not been independently verified. And accordingly, the company makes no representation or warranties with respect to this information.

本次電話會議和隨附的幻燈片演示中討論的某些信息，包括與投資組合公司相關的信息，這些信息來自第三方來源，未經獨立核實。因此，本公司對此資訊不作任何陳述或保證。

The company's third quarter ended September 30, 2024, earnings presentation can also be found on the company's website at www.arescapitalcorp.com by clicking on the third quarter 2024 earnings presentation link on the homepage of the Investor Resources section of the website. Ares Capital Corporation's earnings release and Form 10-Q are also available on the company's website.

該公司截至2024年9月30日的第三季財報也可在該公司網站www.arecapitalcorp.com上找到，方法是點擊該網站投資者資源部分主頁上的2024年第三季財報連結。Ares Capital Corporation 的收益報告和 10-Q 表格也可在該公司網站上取得。

I'll now turn the call over to Mr. Kipp DeVeer, Ares Capital Corporation's Chief Executive Officer. Kipp?

現在我將把電話轉給 Ares Capital Corporation 執行長 Kipp DeVeer 先生。基普？

Thanks a lot, John. Hello, everyone, and thanks for joining our earnings call today. I'm here with our Co-President, Kort Schnabel, and our newly appointed Co-President, Jim Miller; Jana Markowitz, our Chief Operating Officer; Scott Lem, our Chief Financial Officer; and other members of the management team will also be available during our Q&A session.

非常感謝，約翰。大家好，感謝您參加今天的財報電話會議。我和我們的聯合總裁科特·施納貝爾 (Kort Schnabel) 以及我們新任命的聯合總裁吉姆·米勒 (Jim Miller) 一起來到這裡。 Jana Markowitz，我們的營運長； Scott Lem，我們的財務長；管理團隊的其他成員也將出席我們的問答環節。

Before discussing our third quarter results, I want to recognize the leadership changes that we announced this morning. As I mentioned, Jim Miller will now join Kort Schnabel as a Co-President of ARCC. And by way of background, Jim joined Ares in 2006 and currently serves as a co-head of our US direct lending strategy and as a member of our Investment Advisors Investment Committee. Jim has been one of the key contributors to the success of ARCC and the Ares Direct Lending platform and we look forward to having him play an even more prominent role in this company's direction in the years ahead.

在討論我們第三季的業績之前，我想先介紹一下我們今天早上宣布的領導層變動。正如我所提到的，Jim Miller 現在將加入 Kort Schnabel 擔任 ARCC 聯合總裁。作為背景，Jim 於 2006 年加入 Ares，目前擔任我們美國直接貸款策略的聯合主管以及我們投資顧問投資委員會的成員。Jim 是 ARCC 和 Ares Direct Lending 平台成功的關鍵貢獻者之一，我們期待他在未來幾年在公司的發展方向上發揮更突出的作用。

As part of this change, Mitch Goldstein is stepping down as Ares Capital's Co-President, but he is joining Ares Capital's Board where he and Michael Smith will serve as Co-Chairman, which will also continue to lead Ares Global Credit Group as a co-head. And as part of this transition, Michael Arougheti will relinquish his role as Chairman but remain a Director of the company. This transition demonstrates the depth and tenure of our team and the continued evolution of our company and its success over a long period of time.

作為此次變動的一部分，米奇·戈爾茨坦(Mitch Goldstein) 將辭去Ares Capital 聯席總裁一職，但他將加入Ares Capital 董事會，他和邁克爾·史密斯(Michael Smith) 將擔任聯席董事長，該董事會也將繼續以合夥人身分領導Ares Global Credit Group。作為此次過渡的一部分，Michael Arougheti 將放棄董事長職務，但仍擔任公司董事。這一轉變展示了我們團隊的深度和任期，以及我們公司的持續發展和長期的成功。

With that, let me now turn to the third quarter results. This morning, we reported another quarter of strong core earnings of $0.58 per share and another quarter of record NAV per share of $19.77. As we've discussed in the past, we believe we are well positioned to what we expect will be a more active deal environment in the future, driven by expanding M&A and sponsor activity as private equity managers are benefiting from lower rates while at the same time, feeling growing pressure to return capital to their investors.

現在讓我談談第三季的業績。今天早上，我們公佈了另一個季度強勁的核心收益，每股 0.58 美元，每股資產淨值又創下歷史新高，達到 19.77 美元。正如我們過去所討論的，我們相信，在擴大併購和贊助活動的推動下，我們已經準備好迎接未來更加活躍的交易環境，因為私募股權管理公司正從較低的利率中受益，同時保持不變隨著時間的推移，他們覺得將資本回饋給投資人的壓力越來越大。

In the third quarter, we saw a further increase in overall M&A volume with an acceleration in sponsor-backed transactions in particular. Against this backdrop, direct lenders have continued to finance a high percentage of new leverage buyouts, specifically representing about half of the loan volume supporting buyouts in the third quarter. We believe that Ares is well positioned to take advantage of this environment given our deep and long-standing sponsor relationships and our focus on strategic transactions in defensive industries with strong secular trends.

第三季度，我們看到整體併購量進一步增加，特別是贊助商支持的交易加速。在此背景下，直接貸款機構繼續為高比例的新槓桿收購提供融資，特別是佔第三季支持收購的貸款量的一半左右。我們相信，鑑於我們深厚而長期的贊助商關係，以及我們對具有強勁長期趨勢的防禦性行業戰略交易的關注，Ares 處於有利的地位，能夠充分利用這一環境。

Due to our strong competitive position and a more active investing environment, we saw meaningful year-over-year growth in both transactions reviewed and new commitments during the third quarter. Specifically, we reviewed nearly 30% more transactions compared to the same period last year, resulting in an estimated $155 billion in quarterly deal volume reviewed.

由於我們強大的競爭地位和更活躍的投資環境，我們在第三季度審查的交易和新承諾均實現了同比顯著增長。具體而言，我們審核的交易量比去年同期增加了近 30%，審核的季度交易量估計為 1,550 億美元。

For context, this amount exceeded the completed transaction volume reported for the entire broadly syndicated leveraged loan market for the quarter. Our long-held approach of sourcing as many transactions as possible is a key factor in remaining highly selective, which we believe ultimately results in strong long-term portfolio performance.

就背景而言，這筆金額超過了本季整個銀團槓桿貸款市場報告的已完成交易量。我們長期以來採取的尋找盡可能多的交易的方法是保持高度選擇性的關鍵因素，我們相信這最終會帶來強勁的長期投資組合績效。

Our ability to grow with our existing portfolio of companies that we know well is another key factor in our high level of selectivity, further reducing underwriting risk and driving stronger credit performance. This advantage supported our loan growth in the third quarter as over 75% of our new commitments were to incumbent borrowers. We believe the growing trend of existing portfolio companies consolidating their financing relationships with us is an encouraging trend.

我們能夠與我們熟悉的現有公司投資組合一起成長，這是我們高水準選擇性的另一個關鍵因素，進一步降低核保風險並推動更強勁的信貸表現。這一優勢支持了我們第三季的貸款成長，因為我們超過 75% 的新貸款承諾是針對現有借款人的。我們認為，現有投資組合公司鞏固與我們的融資關係的趨勢不斷增長，這是一個令人鼓舞的趨勢。

We also added 23 new companies to the portfolio, bringing our highly diverse portfolio to over 530 companies. Ares Capital's strong credit profile can be seen in the health and performance of our portfolio companies. Our nonaccrual rates declined quarter-over-quarter and remain at levels well below industry averages and the fair value of our risk-rated one and two loans also declined from the second quarter.

我們還在投資組合中增加了 23 家新公司，使我們高度多元化的投資組合涵蓋 530 多家公司。Ares Capital 強大的信用狀況可以從我們投資組合公司的健康狀況和業績中看出。我們的非應計利率環比下降，並保持在遠低於行業平均水平的水平，我們的風險評級一級和二級貸款的公允價值也較第二季度有所下降。

Further underscoring the consistent health of our borrowers, the LTM EBITDA growth of our portfolio companies remained in the low double-digits for the third consecutive quarter. And finally, as Scott will discuss in more detail, the right-hand side of our balance sheet continues to support our investing activities and remains a competitive advantage.

我們的投資組合公司的長期 EBITDA 成長連續第三個季度保持在較低的兩位數水平，這進一步凸顯了我們借款人的持續健康狀況。最後，正如斯科特將更詳細討論的那樣，我們資產負債表的右側繼續支持我們的投資活動，並保持競爭優勢。

You've seen that we were recently upgraded by Moody's to a higher investment-grade notch which we believe further solidifies Ares Capital as the highest rated company in our sector by all three major rating agencies. With moderate leverage just over 1 times debt to equity and well over $5 billion in available liquidity, incorporating post-quarter end financing activities, we believe we have significant financial flexibility and leading access to efficient forms of capital.

您已經看到，穆迪最近將我們的投資級別升級至更高的投資級別，我們相信這進一步鞏固了 Ares Capital 作為我們行業中三大評級機構評級最高的公司的地位。憑藉適度的槓桿率，債務股本比略高於 1 倍，可用流動性遠超 50 億美元，加上季度末融資活動，我們相信我們擁有顯著的財務靈活性，並領先獲得有效的資本形式。

With that, let me turn the call over to Scott to provide more details on our financial results and some further thoughts on the balance sheet.

接下來，讓我將電話轉給斯科特，以提供有關我們財務業績的更多詳細資訊以及對資產負債表的進一步想法。

Thanks, Kipp. Let me walk through our income statement before discussing our balance sheet and the actions we took during the quarter to enhance our capital position. This morning, we reported GAAP net income per share of $0.52 for the third quarter of 2024 compared to $0.52 in the prior quarter and $0.89 in the third quarter of 2023. We also reported core earnings per share of $0.58 for the third quarter of 2024 compared to $0.61 in the prior quarter and $0.59 in the third quarter of 2023.

謝謝，基普。在討論我們的資產負債表以及我們在本季為增強資本狀況而採取的行動之前，讓我先介紹一下我們的損益表。今天上午，我們報告 2024 年第三季 GAAP 每股淨利潤為 0.52 美元，而上一季為 0.52 美元，2023 年第三季為 0.89 美元。我們還報告稱，2024 年第三季的每股核心收益為 0.58 美元，而上一季為 0.61 美元，2023 年第三季為 0.59 美元。

Overall, our total investment income increased compared to the prior quarter, largely due to higher interest and dividend income from net portfolio growth, offset by lower restructuring fees as the majority of the new commitments during the quarter were with existing portfolio companies.

總體而言，我們的總投資收入與上一季相比有所增加，這主要是由於投資組合淨增長帶來的利息和股息收入增加，但由於本季度大部分新承諾來自現有投資組合公司，因此重組費用較低，從而抵消了這一影響。

In terms of our expenses, the increase in our interest and credit facility fees was consistent with our higher leverage during the quarter to fund a portion of our portfolio growth. Our total portfolio at fair value at the end of the quarter was $25.9 billion, up from $25 billion at the end of the second quarter. The weighted average yield on our debt and other income-producing securities at amortized costs was 11.7% at September 30, which was down from 12.2% at June 30, and 12.4% for the same period a year ago.

就我們的費用而言，我們的利息和信貸便利費用的增加與我們在本季度為部分投資組合增長提供資金的槓桿率提高是一致的。截至本季末，我們以公允價值計算的投資組合總額為 259 億美元，高於第二季末的 250 億美元。截至9月30日，我們的債務和其他創收證券的攤餘成本加權平均收益率為11.7%，低於6月30日的12.2%和去年同期的12.4%。

Our total weighted average yield on total investments at amortized cost was 10.7% which compares to 11.1% a quarter ago and 11.2% from a year ago. The declines in our yields were largely due to reduced base rates and, to a lesser extent, spread on new investments. Our stockholders equity ended the quarter at $12.8 billion or $19.77 per share, another record high for us, as Kipp noted earlier in the call.

我們以攤餘成本計算的總投資的總加權平均收益率為 10.7%，而第一季前為 11.1%，一年前為 11.2%。我們的收益率下降主要是由於基本利率下降，以及在較小程度上由於新投資的利差所致。正如基普早些時候在電話會議中指出的那樣，我們的股東權益本季末達到 128 億美元，即每股 19.77 美元，再創歷史新高。

Before discussing our capitalization and liquidity, let me start by highlighting the notable accomplishment Kipp mentioned related to our credit ratings. At the end of September, Moody's upgraded the long-term issuer and senior unsecured rating for Ares Capital to Baa2 from Baa3. In addition to being rated investment grade by all three of the major rating agencies, we now have two of our three ratings firmly mid-BBB. We believe this should lead to even more efficient funding costs and potentially increase debt capacity over time.

在討論我們的資本化和流動性之前，讓我先強調基普提到的與我們的信用評級相關的顯著成就。9月底，穆迪將Ares Capital的長期發行人和高級無抵押評級從Baa3上調至Baa2。除了獲得三大主要評級機構的投資等級外，我們的三個評級中現在有兩個評級為中 BBB。我們相信，隨著時間的推移，這應該會帶來更有效率的融資成本，並有可能增加債務能力。

These ratings further distinguish Ares Capital, not only within the BDC sector but also among a select universe of firmly BBB or higher-rated public companies in the US. Within the BDC sector, we are the only BDC that has both the highest credit ratings from all three major agencies and positive outlooks from S&P and Fitch.

這些評級進一步使 Ares Capital 脫穎而出，不僅在 BDC 行業內，而且在美國精選的 BBB 級或更高評級的上市公司中也是如此。在 BDC 行業中，我們是唯一一家同時獲得三大主要機構最高信用評級以及標準普爾和惠譽正面展望的 BDC。

In terms of our recent debt capital activity, we amended our revolving funding facility, which included extending the end of the reinvestment period and the maturity to a full three and five years, respectively, and upside in the facility from $1.78 billion to $2.15 billion. We also announced that we priced our second on-balance sheet CLO for ARCC, which we expect will close next month subject to customary closing conditions. This closing will bring an additional $544 million of low-cost secured debt capital priced at SOFR plus 158 basis points. We're happy to continue both diversifying and lowering the weighted average cost of our debt capital and believe CLO financing can continue to be a nice addition to our debt capital going forward.

就我們最近的債務資本活動而言，我們修改了循環融資安排，其中包括將再投資期結束時和到期日分別延長至整整三年和五年，並將安排的上行空間從17.8 億美元延長至21.5 億美元。我們也宣布，我們為 ARCC 定價了第二個表內 CLO，我們預計該專案將於下個月根據慣例成交條件完成。這次交割將額外帶來 5.44 億美元的低成本擔保債務資本，定價為 SOFR 加 158 個基點。我們很高興繼續實現債務資本多元化並降低債務資本的加權平均成本，並相信 CLO 融資可以繼續成為我們未來債務資本的良好補充。

Lastly, as we discussed on our last earnings call, earlier in the third quarter, we amended our SB funding facility, where we extended the reinvestment period and maturity each by more than one year. upsized the facility from $865 million to $1.3 billion and reduced the drawn spread by 40 basis points. In total, pro forma of all these transactions since June 30, we have added over $1.3 billion of new debt capacity and reduced the weighted average spread of our committed floating rate debt capital.

最後，正如我們在第三季早些時候的上次財報電話會議上討論的那樣，我們修改了 SB 融資安排，將再投資期限和到期日分別延長了一年以上。該融資規模從 8.65 億美元增至 13 億美元，並將提領利差減少 40 個基點。從 6 月 30 日以來的所有這些交易來看，我們總共增加了超過 13 億美元的新債務能力，並減少了我們承諾的浮動利率債務資本的加權平均利差。

Our overall liquidity position remains strong with nearly $5.8 billion of total available liquidity, including available cash on a pro forma basis for the post quarter end activity that I just highlighted. We also ended the quarter with a debt-to-equity ratio net of available cash of 1.03 times. We believe our significant amount of dry powder positions us well to continue supporting our portfolio company commitments and new investing activities.

我們的整體流動性狀況仍然強勁，可用流動性總額接近 58 億美元，其中包括我剛才強調的季度末活動的預計可用現金。截至本季末，扣除可用現金後的負債股本比率為 1.03 倍。我們相信，我們大量的乾粉使我們能夠繼續支持我們的投資組合公司的承諾和新的投資活動。

Moving on to the dividend. We declared a fourth quarter of 2024 dividend of $0.48 per share. ARCC has been paying stable or increasing regular quarterly dividends for over 61 consecutive quarters. This dividend is payable on December 30, 2024, to stockholders of record on December 13, and is consistent with our third quarter 2024 dividend.

繼續討論股息。我們宣布 2024 年第四季股利為每股 0.48 美元。ARCC 已連續超過 61 個季度支付穩定或不斷增加的定期季度股息。該股將於 2024 年 12 月 30 日支付給 12 月 13 日登記在冊的股東，與我們 2024 年第三季的股利一致。

In terms of our taxable income spillover, we finalized our 2023 tax returns and are happy to report that we ended 2023 with approximately $631 million or $1.04 per share available for distribution to stockholders in 2024. In addition to our third quarter core earnings being well in excess of our current dividend, the spillover level is more than 2 times our current regular quarterly dividend, which we believe is a significant differentiator for us in the BDC sector and helps provide further visibility and stability to our dividend in a potentially declining rate environment.

就應稅收入溢出而言，我們最終確定了 2023 年的報稅表，並很高興地報告，截至 2023 年，我們有約 6.31 億美元或每股 1.04 美元可在 2024 年分配給股東。除了我們第三季的核心收益遠遠超過當前股息外，溢出水準是我們目前定期季度股息的2 倍以上，我們認為這是我們在BDC 領域的一個顯著差異化因素，有助於提供進一步的可見度和在利率可能下降的環境中，我們的股息保持穩定。

I will now turn the call over to Kort to walk through our investment activities.

我現在將把電話轉給科特，以介紹我們的投資活動。

Thanks, Scott. I'm now going to spend a few minutes providing more details on our investment activity, our portfolio performance and our positioning for the third quarter. I will then conclude with an update on our post-quarter-end activity and backlog.

謝謝，斯科特。我現在將花幾分鐘提供有關我們的投資活動、投資組合表現和第三季定位的更多詳細資訊。最後，我將介紹我們季度末活動和積壓訂單的最新情況。

In the third quarter, our team originated approximately $3.9 billion of new investment commitments across 74 different transactions. Excluding the $670 million of loans we originated and distributed as agents, our new investment commitments more than doubled year-over-year, reflecting the strength of our platform and a more active overall M&A market.

第三季度，我們的團隊在 74 項不同交易中發起了約 39 億美元的新投資承諾。不包括我們作為代理商發起和分配的 6.7 億美元貸款，我們的新投資承諾同比增加了一倍以上，反映了我們平台的實力和更加活躍的整體併購市場。

Our level of originations also reflects our growing market share with our existing borrowers, as Kipp discussed previously. Evidencing this trend, our share of the overall financings for our top 10 largest incumbent commitments in the quarter more than doubled.

正如基普之前所討論的，我們的發起水準也反映了我們在現有借款人中不斷增長的市場份額。本季我們十大現有承諾的整體融資份額增加了一倍多，就證明了這一趨勢。

Shifting to our portfolio. We ended the third quarter with a $25.9 billion portfolio at fair value, which grew 4% from the prior quarter and 18% from the prior year. In addition to our expanding market share with incumbent borrowers, our growth is supported by our ability to provide flexible capital solutions to a wide variety of new companies seeking a direct lending solution.

轉向我們的投資組合。第三季末，我們的投資組合以公允價值計算為 259 億美元，比上一季成長 4%，比上年成長 18%。除了我們在現有借款人中不斷擴大的市場份額之外，我們為尋求直接貸款解決方案的各種新公司提供靈活的資本解決方案的能力也支持了我們的成長。

This can be seen in the total number of companies in our portfolio, which reached 535 in the third quarter and increased 9% year-over-year. Further underscoring our focus on covering the broader middle market, the median EBITDA of the borrowers in our portfolio was $82 million in the third quarter, with approximately one-third having less than $50 million of EBITDA.

這可以從我們投資組合的公司總數中看出，第三季達到 535 家，年增 9%。第三季度，我們投資組合中藉款人的 EBITDA 中位數為 8,200 萬美元，其中約三分之一的 EBITDA 不足 5,000 萬美元，這進一步凸顯了我們對覆蓋更廣泛的中間市場的關注。

As Kipp mentioned, our portfolio companies remain healthy, and credit performance remains strong. Our weighted average portfolio grade of 3.1 remained unchanged from the prior quarter's level. Our nonaccruals at cost ended the quarter at 1.3%, representing another 20 basis points decline from the prior quarter and is within 50 basis points at our lowest level in the last decade.

正如基普所提到的，我們的投資組合公司保持健康，信貸表現依然強勁。我們的加權平均投資組合評級為 3.1，與上一季的水平保持不變。本季末，我們以成本計算的非應計利潤率為 1.3%，比上一季又下降了 20 個基點，與過去十年來的最低水準相差不到 50 個基點。

Our current nonaccrual level remains well below our 2.8% historical average since the great financial crisis and the BDC historical average of 3.8% over the same time period. Our nonaccrual rate at fair value also decreased to 0.6% from 0.7% last quarter, which continues to be well below historical levels for us as well. Further underpinning the strength of our portfolio, at the end of the third quarter, the weighted average loan-to-value in the portfolio was 43%, which we believe provides us with strong downside protection for our loans. This loan-to-value is also significantly below our 10-year average.

我們目前的非應計水準仍遠低於自金融危機以來 2.8% 的歷史平均值以及同期 BDC 3.8% 的歷史平均值。我們的公允價值非應計利率也從上季的 0.7% 下降至 0.6%，這也繼續遠低於我們的歷史水準。截至第三季末，投資組合的加權平均貸款價值比為 43%，這進一步支撐了我們投資組合的實力，我們相信這為我們的貸款提供了強有力的下行保護。該貸款成數也遠低於我們的 10 年平均值。

When looking at performance by company size, it is noteworthy that company size continues to not be a driver of performance as companies in all size bands in our portfolio had similar EBITDA growth rates over the last 12 months. In our view, our underwriting and portfolio management processes and our ability to select what we believe are the best companies in attractive industries drives these results.

在按公司規模查看業績時，值得注意的是，公司規模仍然不是業績的驅動因素，因為我們投資組合中所有規模的公司在過去 12 個月中的 EBITDA 成長率相似。我們認為，我們的承保和投資組合管理流程以及我們在有吸引力的行業中選擇我們認為最好的公司的能力推動了這些結果。

It is also noteworthy that to further our advantages and to support our broad middle market coverage, Ares Management acquired Riverside Credit Solutions during the third quarter. Riverside is a well-established, lower middle market-focused firm managed by a team that we have known for a long time with a very strong investing track record. We believe this team is additive to Ares direct lending platform's coverage in this important part of the market.

另外值得注意的是，為了進一步擴大我們的優勢並支持我們廣泛的中間市場覆蓋，Ares Management 在第三季度收購了 Riverside Credit Solutions。Riverside 是一家信譽卓著、專注於中低階市場的公司，其管理團隊是我們很早就認識的、擁有非常出色的投資記錄的團隊。我們相信，該團隊將擴大 Ares 直接貸款平台在這一重要市場領域的覆蓋範圍。

As we discussed in detail at our Investor Day in June, we believe Ares is the only direct lending platform at scale that actively focuses across the lower, middle and upper middle markets. This differentiated coverage approach supports our ability to focus on market segments that offer better risk-adjusted returns while remaining highly selective.

正如我們在 6 月的投資者日詳細討論的那樣，我們相信 Ares 是唯一一個積極關注中低端市場的大規模直接貸款平台。這種差異化的覆蓋方法支持我們專注於提供更好的風險調整回報同時保持高度選擇性的細分市場的能力。

Across our markets, we have seen credit dispersion start to emerge with certain other managers experiencing growing and elevated levels of nonaccruals. We continue to believe the merits of our many competitive advantages are driving differentiated results as diversification and industry selection have contributed to ARCC's strong credit performance in comparison with other BDCs.

在我們的市場中，我們已經看到信貸分散開始出現，某些其他管理公司的非應計費用水準不斷增長和升高。我們仍然相信，我們的眾多競爭優勢正在推動差異化的業績，因為多元化和行業選擇使得 ARCC 與其他 BDC 相比具有強勁的信用表現。

Through our time-tested underwriting processes and collaborative culture, our highly selective approach to investing and focus on incumbent borrowers as a differentiated opportunity for growth, we have been able to avoid many of the problems that have driven recent nonaccruals in the BDC space.

透過我們經過時間考驗的核保流程和協作文化、高度選擇性的投資方法以及對現有借款人的關注，將其視為差異化的成長機會，我們已經能夠避免導致BDC 領域近期非應計利息的許多問題。

Another point of differentiation for ARCC versus other BDCs is our high level of portfolio diversification. By maintaining small individual company position sizes of less than 0.2% of the portfolio on average, ARCC has been able to mitigate the impact of negative credit events in any one company or industry.

ARCC 與其他 BDC 的另一個區別在於我們的投資組合高度多元化。透過將單一公司的小頭寸規模維持在平均不到投資組合 0.2% 的水平，ARCC 能夠減輕任何一家公司或行業的負面信用事件的影響。

Finally, let me highlight our active start to the fourth quarter. From October 1, 2024, to October 24, 2024, we made new investment commitments totaling $408 million of which $320 million were funded. We exited or were repaid on nearly $1.2 billion of investment commitments, which resulted in us earning $4 million of net realized gains.

最後，讓我強調我們第四季的積極開局。從2024年10月1日到2024年10月24日，我們做出了總額為4.08億美元的新投資承諾，其中已融資3.2億美元。我們退出或償還了近 12 億美元的投資承諾，這使我們獲得了 400 萬美元的淨收益。

As of October '24, our backlog stood at roughly $2.8 billion, more than triple the level one year ago. Our backlog contains investments that are subject to approvals and documentation and may not close or we may sell a portion of these investments post closing.

截至 24 年 10 月，我們的積壓訂單約為 28 億美元，是一年前水準的三倍多。我們的積壓訂單包含需要獲得批准和文件記錄的投資，可能不會關閉，或者我們可能會在關閉後出售這些投資的一部分。

I will now turn the call back over to Kipp for some closing remarks.

現在我將把電話轉回給基普，讓他發表一些結束語。

Thanks so much, Kort. So let me just take an opportunity to share a few thoughts on our past and our future. As many of you know, we're celebrating the company's 20 anniversary this month. Over the course of our 20-year history, my partners and I have seen the growth of direct lending evolve from a small handful of BDCs competing with banks for their lower middle market loans to a proven industry with real institutional backing and recognition.

非常感謝，科特。因此，讓我藉此機會分享一些關於我們的過去和未來的想法。正如你們許多人所知，我們本月將慶祝公司成立 20 週年。在我們 20 年的歷史中，我和我的合作夥伴見證了直接貸款的成長，從少數 BDC 與銀行爭奪中低端市場貸款，發展成為一個擁有真正機構支持和認可的成熟行業。

During this time, we've continued to refine our processes, grow our team and leverage some new thinking. However, we've remained consistent in our approach, our investment philosophy and our focus on the team and our culture, which underpin everything that we do. Our third quarter earnings and credit results build upon our 20-year track record of successfully managing the company throughout a wide variety of economic and market cycles.

在此期間，我們繼續完善我們的流程，發展我們的團隊並利用一些新的思維。然而，我們的方法、投資理念以及對團隊和文化的關注始終如一，這些都是我們所做一切的基礎。我們第三季的獲利和信貸業績建立在我們 20 年在各種經濟和市場週期中成功管理公司的記錄之上。

Over the past two decades, Ares Capital has made nearly 4,000 investments with a cumulative net realized loss rate of 0% and at an asset level realized gross IRR of approximately 13%. And over the same time period, our shareholders have been rewarded having enjoyed an average annual total return of roughly 13%, which represents outperformance of over 225 basis points per year for the S&P 500 Index. Needless to say, we're very proud of this performance.

在過去的二十年裡，Ares Capital 進行了近 4,000 項投資，累計實現淨損失率為 0%，資產層面實現的總 IRR 約為 13%。同期，我們的股東獲得了約 13% 的平均年總回報率，這意味著每年的表現優於標準普爾 500 指數 225 個基點。不用說，我們對這樣的表現感到非常自豪。

Looking forward, we believe Ares Capital and its competitive advantages remain strong. With the declaration of the fourth quarter dividend, ARCC's regular quarterly dividend has been stable, we're growing now for more than 15 years, and we remain confident in our ability to maintain this dividend level in the foreseeable future even in the face of lower expected interest rates.

展望未來，我們相信Ares Capital及其競爭優勢依然強勁。隨著第四季度股息的宣布，ARCC的定期季度股息已經穩定，我們現在已經增長了超過15年，即使​​面對較低的股息，我們仍然有信心在可預見的未來維持這一股息水平。

Furthermore, should market interest rates decline, we believe the value of our attractive dividend yield that is well covered by core earnings and supported by a strong level of spillover income will become even more valued by equity investors.

此外，如果市場利率下降，我們相信，我們有吸引力的股息殖利率的價值將受到股權投資者的更加重視，而股息殖利率由核心收益充分覆蓋，並得到強勁的溢出收入水平的支持。

As we look to the future, we believe the company remains very well positioned to address what we see as a growing market opportunity. And the management team and the Board remain committed in continuing to build upon what we believe is a successful long-term track record. As always, we appreciate you joining the call today. We look forward to speaking with you next quarter.

展望未來，我們相信該公司仍處於有利位置，可以應對我們認為不斷增長的市場機會。管理團隊和董事會仍然致力於繼續鞏固我們認為成功的長期業績記錄。一如既往，我們感謝您今天加入電話會議。我們期待下個季度與您交談。

And with that operator, we'd like to open the line for questions.

我們希望透過此接線生開通提問專線。

(Operator Instructions)

（操作員說明）

John Hecht, Jefferies.

約翰‧赫克特，傑弗里斯。

Congratulations on the 20 anniversary, very cool. You've been talking -- well, I guess the whole market has been talking about this potential for when rates stabilize, if not drop and maybe people get a little bit more confident about the economy that there's this massive wave of private equity that needs to be somewhat churned. You've had a couple of good quarters of investment activity, and it sounds like the pipeline is good. I mean, are we now entering that phase of the market? And does that mean are you guys kind of bracing for a really active '25 at this point? Or is it too early to make that call?

恭喜20週年紀念日，太酷了。你一直在談論——嗯，我想整個市場都在談論利率穩定（如果不是下降）時的這種潛力，也許人們對經濟更有信心，因為需要大量的私募股權投資有點攪動。你們已經經歷了幾個季度的良好投資活動，而且聽起來管道狀況良好。我的意思是，我們現在正在進入這個市場階段嗎？這是否意味著你們現在正在為一個真正活躍的 25 年做好準備？或者現在做出這樣的決定還為時過早嗎？

I mean, I think -- I appreciate the comment, John. The last two quarters have been good. And I mean, the simple answer is yes, we remain pretty busy. I mean, I think getting the election behind us will help and then we'll obviously be getting into year-end, but I expect a busy year next year for sure.

我的意思是，我想——我很欣賞你的評論，約翰。過去兩個季度的表現不錯。我的意思是，簡單的答案是肯定的，我們仍然很忙。我的意思是，我認為選舉的結束將會有所幫助，然後我們顯然會進入年底，但我預計明年肯定會是忙碌的一年。

Okay. And then just a quick question on Riverside and maybe give us a sense of what's their kind of origination, I guess, trend. And this sounds like it's lower middle market will -- so will that kind of take even to a slightly different asset class than you guys have been focused on in the last few years?

好的。然後問一個關於 Riverside 的簡單問題，也許可以讓我們了解他們的起源，我想，趨勢是什麼。這聽起來像是中低端市場將會——那麼，這是否會涉及到與你們過去幾年關注的資產類別略有不同的資產類別？

Yeah. It's Kort. I can jump in on that. I wouldn't say it's a slightly different asset class. I think the takeaway is Riverside is a very active lower middle market lender. It's not a large team. It's a nine-person team. We've known them for a really long time. And we have immediately integrated them into our team and our process, and they're going to help us energize and double down on our commitment to cover the lower middle market even as we scale.

是的。這是科特。我可以參與其中。我不會說這是一個略有不同的資產類別。我認為重點是 Riverside 是一家非常活躍的中低端市場貸款機構。這不是一個大團隊。這是一個九人團隊。我們認識他們很久了。我們立即將它們整合到我們的團隊和流程中，即使我們規模擴大，它們也將幫助我們增強活力並加倍履行我們覆蓋中低端市場的承諾。

And I think we're excited to have them on board. They're going to bring deals to our investment committee just like any of our other 200 investment professionals. And it should be a good thing for our broader market coverage.

我認為我們很高興他們加入。他們將像我們其他 200 名投資專業人士一樣向我們的投資委員會帶來交易。對於我們更廣泛的市場覆蓋範圍來說，這應該是一件好事。

Finian O'Shea, Wells Fargo Securities.

Finian O'Shea，富國銀行證券公司。

On the market opportunity for the asset class. So today, we have a lot of spread compression and hopefully, volume heals and relieves that dynamic. But we wanted to ask your view in light of all the capital being raised if the direct lending premium is on more of a secular decline?

關於該資產類別的市場機會。所以今天，我們有很多擴散壓縮，希望成交量能夠治癒並緩解這種動態。但我們想問一下，鑑於所有籌集的資金，直接貸款溢價是否會長期下降？

I don't think so because the way that the market works typically is folks lock up capital in illiquid credit when they look at other reference securities in liquid credit, in particular, and frankly, other surrounding markets, right? So the risk premium, the complexity premium that we get for locking up investor capital on illiquid credit, of course, varies over time, right? If you look at historical numbers, it's somewhere between 150 basis points and maybe 400 basis points. But for me, it's that relationship that really needs to remain in place for the capital to continue to support growth in the market.

我不這麼認為，因為市場通常的運作方式是人們在考慮流動信貸中的其他參考證券時將資本鎖定在非流動信貸中，特別是坦率地說，其他週邊市場，對嗎？因此，風險溢價，也就是我們將投資人資本鎖定在非流動性信貸上所獲得的複雜性溢價，當然會隨著時間的推移而變化，對嗎？如果你看一下歷史數據，你會發現它在 150 個基點到 400 個基點之間。但對我來說，真正需要維持這種關係，資本才能繼續支持市場的成長。

I think your point on spread compression is fair and it's there, but it's in response, not so much to lack of deal flow, but just I think to most of our teams as well as some of our competitors believe that the economy is in a better place than we might have expected to fall through very low. There's growth. And when you see less risk investing in a market, you're willing to take less return. And that's what's happened over the last year or two.

我認為你關於價差壓縮的觀點是公平的，而且是存在的，但它是一種回應，並不是因為缺乏交易流，而是我認為我們的大多數球隊以及我們的一些競爭對手都認為經濟正處於一個比我們預期的更好的地方，跌得很低。有增長。當您看到市場投資風險較小時，您願意接受較少的回報。這就是過去一兩年發生的事。

That's very helpful. If I can do a small follow-up on Riverside, just seeing how perhaps one-off that was or if maybe this is indicative of another large trend where large managers such as yourselves are able to consolidate and add on a lot of sort of investment origination capacity that way amongst the perhaps likely sprawling lower middle market firms out there.

這非常有幫助。如果我可以對 Riverside 做一個小的後續跟踪，看看這可能是一次性的，或者這是否表明了另一個大趨勢，像你們這樣的大型管理者能夠整合並增加大量投資在可能龐大的中低端市場公司中，這種創新能力是存在的。

Yeah. I mean, all I'd say is something that I can add on to what Kort said, which is really the meat of the bone or the meat on the bone. Look, I mean, we've been at this 20 years, and the key is that you continue in our experience to build the best origination team you possibly can, which leads to the best outcomes. So we've been adding people in a whole host of different segments and industries and all of that for 20 years. Riverside is just another example of that, right?

是的。我的意思是，我想說的只是我可以補充科特所說的話，這實際上是骨頭上的肉或骨頭上的肉。聽著，我的意思是，我們已經走過了 20 年，關鍵是你要繼續利用我們的經驗，盡可能地建立最好的創始團隊，從而帶來最好的結果。因此，20 年來，我們一直在不同的細分市場和行業中增加人員。河濱只是另一個例子，對嗎？

It's, as Kort mentioned, a lower middle market team that can add to what we're doing, and it remains our commitment to keep adding things that we think bring value to the company and the shareholders.

正如科特所提到的，這是一個中低端市場團隊，可以為我們正在做的事情做出貢獻，我們仍然致力於不斷增加我們認為能為公司和股東帶來價值的東西。

And Fin, as you know, we've talked a lot about our ability to cover all different parts of the market. And I think, again, this is just a reiteration of our commitment to that lower than the market. I think it might be natural for us as we scale to potentially take our eye off the ball or focus a little less on that part of the market. And I think we want to make sure that we are intentionally not doing that both with our existing team as well as adding resources here through the acquisition of Riverside. So hopefully, that helps.

芬，如您所知，我們已經談論了很多關於我們覆蓋市場所有不同部分的能力。我再次認為，這只是重申我們對低於市場水準的承諾。我認為這對我們來說可能是很自然的，因為我們的規模可能會轉移我們的注意力，或減少對這部分市場的關注。我認為我們希望確保我們不會故意對現有團隊這樣做，也不會透過收購 Riverside 來增加資源。希望這會有所幫助。

Melissa Wedel, JPMorgan.

梅麗莎‧韋德爾，摩根大通。

Congrats to everyone with a new or expanded role with the company. I was hoping to follow up on the comments about growing share with existing clients and as they sort of consolidate relationships. I assume that, that involves a good amount of refi activity that happened within the portfolio? Is that the case in the third quarter? And do have sort of a view on what that could look like going forward?

祝賀在公司擔任新職務或擴大職務的每個人。我希望跟進有關與現有客戶增加份額以及鞏固關係的評論。我認為，這涉及投資組合內發生的大量再融資活動？第三季也是這樣嗎？您對未來的發展有什麼看法嗎？

I mean, not really necessarily unless I think the point is we've got a very, very diverse set of clients, right? I mean, the company today literally has representation with 200-plus sponsors, and that doesn't even take into account industry groups and nonsponsored deals and all of that stuff. But look, the key is that we keep doing more with the folks that we want to do more with. And I think that the large players with big teams have been able to continue to capture more and more share with the most relevant clients. It's not just us, it's others. But the focus is there. It's not needing to be heavier on refi activity in our minds.

我的意思是，不一定，除非我認為重點是我們擁有非常非常多樣化的客戶，對吧？我的意思是，今天的公司實際上擁有 200 多家贊助商的代表，這甚至還沒有考慮到行業團體和非贊助交易以及所有這些事情。但看，關鍵是我們不斷地與那些我們想要做更多事情的人一起做更多事情。我認為擁有大型團隊的大型企業已經能夠繼續與最相關的客戶爭奪越來越多的份額。不只是我們，還有其他人。但重點就在那裡。在我們看來，不需要更重視再融資活動。

Yeah. And in fact, I would say it's not a lot of refi activity. It's a lot of add-on capital activity into our existing portfolio companies to support growth in M&A. And the fact of the matter is we are providing more of that add-on capital than our other club members in those facilities, which is what's contributing to our market share gain. So it's definitely more of that and less refinancing.

是的。事實上，我想說這並不是很多再融資活動。我們現有的投資組合公司有大量的附加資本活動，以支持併購的成長。事實上，我們在這些設施中提供的附加資本比其他俱樂部會員更多，這有助於我們增加市場份額。所以肯定更多的是再融資，更少的是再融資。

Okay. I appreciate that context. Just as a follow-up, was there anything we should be thinking about in terms of sort of the timing of originations during the third quarter? I think they generally tend to be a little bit back-end loaded. Was there anything exacerbated in 3Q? Or is it pretty normal?

好的。我很欣賞這種背景。作為後續行動，在第三季的啟動時間方面，我們是否應該考慮什麼？我認為它們通常傾向於有點後端加載。第三季有沒有加劇的情況？還是這很正常嗎？

I think it was a pretty good quarter. I mean, comes and goes, unpredictable from quarter-to-quarter. But I don't think there's anything other than just circumstance and randomness.

我認為這是一個非常好的季度。我的意思是，來來去去，每個季度都不可預測。但我認為除了環境和隨機性之外沒有其他因素。

Casey Alexander, Compass Point.

凱西·亞歷山大，指南針點。

Happy anniversary. I noticed that your second lien exposure over the last three years have been cut by more than half from -- and so I'm wondering, have we been watching sort of a defined internal strategy on the run? Or is this more -- have to do more with the way that structure has changed across the private credit industry?

週年快樂。我注意到過去三年裡你們的第二次留置權風險已經減少了一半以上——所以我想知道，我們是否一直在關注某種明確的內部策略？或者這是否更多——必須與整個私人信貸行業的結構變化方式做更多的事情？

Yeah. I mean, look, I can jump in on that. I think what you're seeing is a little bit more of a change in the market that's happening now. I'm not sure it's -- and we go through a lot of cycles. And what we're seeing now is a lot of unitranche transactions, and that's taking market share from the second lien market. And so I would not say that it's an intentional shift on our part. It's more us looking for good relative value in all market environments and investing into the opportunities that are in front of us.

是的。我的意思是，聽著，我可以參與其中。我認為你所看到的是市場現在正在發生的一些變化。我不確定是不是——而且我們經歷了很多周期。我們現在看到的是大量的統一交易，這正在從第二留置權市場奪取市場份額。所以我不會說這是我們有意的轉變。我們更多的是在所有市場環境中尋找良好的相對價值，並投資於我們面前的機會。

Obviously, we like the returns we're getting on the first lien asset class and leverage levels are still lower than the average, returns are higher. So we think it's a good place to be putting dollars, but we'll see how the market develops from here.

顯然，我們喜歡第一留置權資產類別獲得的回報，槓桿水平仍然低於平均水平，但回報更高。因此，我們認為這是一個投入美元的好地方，但我們將看看市場如何發展。

Okay. But then let me follow up on that question, okay? 53% of your portfolio is first lien. Kind of how does that balance between pure first lien versus unitranche? And when you do a unitranche, which is going into that first lien bucket, what type of yield premium are you generally getting on that relative to a pure first lien?

好的。但接下來讓我跟進這個問題，好嗎？您投資組合的 53% 是第一留置權。純粹的第一留置權與統一留置權之間如何平衡？當您進行統一管理時，即進入第一留置權桶，相對於純粹的第一留置權，您通常會獲得哪種類型的收益溢價？

I mean, it's a little bit in the eye of the beholder, right? We've talked about what a unitranche is versus the first lien term loan. That's kind of a hard question to answer, to be honest, Casey.

我的意思是，這有點情人眼裡出西施，對吧？我們已經討論過什麼是統一貸款與第一留置權定期貸款。老實說，這是一個很難回答的問題，凱西。

Robert Dodd with Raymond James.

羅伯特·多德和雷蒙德·詹姆斯。

Congratulations to everybody on their new roles. A couple of questions mainly about your spreads and yields. I mean, I think, Scott in the prepared remarks said a dominant part of the decline in the weighted average yield this quarter was base rates. I mean, have you seen -- I mean, the three-month LIBOR at the beginning of the quarter weren't that different from the beginning of the previous quarter, but it's not always that reset.

祝賀大家擔任新角色。主要是關於您的點差和收益率的幾個問題。我的意思是，我認為斯科特在準備好的演講中表示，本季加權平均收益率下降的主要原因是基本利率。我的意思是，你有沒有看到 - 我的意思是，本季度初的三個月倫敦銀行同業拆借利率與上一季度初沒有太大不同，但並不總是那麼重置。

Have you seen a shift in elections to -- or should we expect to see a shift in elections towards a shorter-term like one month if rates start falling versus three months or when the reset dates are happening or anything like that? Because it seems like normal course, new month resets at the beginning of the quarter shouldn't have had that much impact this quarter. For fourth quarter, yes. But could you give us any color around that?

您是否看到選舉發生了轉變——或者我們是否應該期望看到選舉向更短期的轉變，例如如果利率開始下降而不是三個月，或者發生重置日期或類似的情況，那麼一個月？因為這似乎是正常過程，所以季度初的新月份重置不應該對本季產生那麼大的影響。對於第四季來說，是的。但你能給我們一些關於它的顏色嗎？

Yeah. So I think the comment about the decline in the yields were really -- those yields we disclosed are at the end of the period. So the effects of that really have not flown through until really the following quarter. In terms of the resets, I mean, it will vary depending on the borrower. So usually, it's at a month end but we haven't really seen a shift yet in terms of the terms of the contracts from three to one just given the rates just recently moved.

是的。因此，我認為有關收益率下降的評論確實是——我們披露的收益率是在期末的。因此，其影響直到下個季度才真正顯現出來。就重置而言，我的意思是，它會根據借款人的不同而有所不同。因此，通常是在月底，但考慮到最近剛剛調整的費率，我們還沒有真正看到合約條款從三項變為一項的變更。

I was just going to say just to hit it really hard on the head and put some math around it. I mean, we -- so there's been a 70 basis point decline in three months, so from Q2 to Q3. We've seen about 10 basis points of that flow through the numbers actually in Q3 due to the lag effect that occurs. So there will be a lag as these -- the base rate declines and we did not see much of that yet in this quarter.

我只是想說，只是為了狠狠地打擊它，並圍繞它進行一些數學計算。我的意思是，從第二季度到第三季度，三個月內下降了 70 個基點。由於出現了滯後效應，我們在第三季的實際數字中看到了大約 10 個基點的流動。因此，將會出現滯後——基本利率下降，而我們在本季還沒有看到太多滯後。

I think it's probably just important to highlight in our Q -- we put out disclosure so that people can do the math. Every 100 basis points reduction in -- for results in a $0.03 quarterly reduction for us. So I think the good news is people can see there's a lot of cushion relative to our dividend, which was very purposeful and intentional because we knew that eventually, rates were going to decline. And we've operated through lots of different rate environments over our history and feel good about the ability to continue to do so.

我認為在我們的問題中強調這一點可能很重要——我們進行了披露，以便人們可以進行數學計算。每減少 100 個基點，我們的季度就會減少 0.03 美元。所以我認為好消息是人們可以看到相對於我們的股息有很多緩衝，這是非常有目的和有意的，因為我們知道最終利率會下降。在我們的歷史上，我們經歷過許多不同的利率環境，並且對繼續這樣做的能力感到滿意。

Got it. And then kind of a follow-up on -- it looks this quarter like new onboarded not refinanced, not repriced, but new portfolio companies onboarded for first lien spreads looked like they were sub-500. And I mean, you've talked about spread compression before. That seems like -- I mean, that's the lowest I can find in a decade. I mean, is there something unique about this quarter? Or is that spread compression not just there, but getting worse? Can you give us any thoughts on that?

知道了。然後是後續行動——看起來本季新加入的公司沒有再融資，沒有重新定價，但新加入的投資組合公司的第一留置權利差看起來低於 500。我的意思是，您之前已經討論過傳播壓縮。這看起來——我的意思是，這是十年來我能找到的最低水準。我的意思是，這個季度有什麼獨特之處嗎？或者說，傳播壓縮不僅存在，而且還在惡化？您對此有何想法？

Yeah. I mean, I think -- look, spreads we've said -- I think we said this last earnings call have come in at least 100 basis points this year, right, from the beginning of this year towards the finish as we come up upon it. There are plenty of large cap unitranches getting done with force, but middle market deals or not. So I'd just say that the range is generally kind of -- it's kind of a 450 to 550 market depending on quality of credit, size of company, et cetera, which when you consider the base rate plus the spread in the fees is still getting you to a pretty attractive gross unlevered return on the asset, in our opinion.

是的。我的意思是，我認為——看，我們說過的利差——我想我們說過今年最後一次財報電話會議至少有 100 個基點，對吧，從今年年初到年底，我們提出了這一點在其上。有很多大盤股都在強力完成，但中型市場交易還是沒有。所以我只想說，這個範圍通常是 450 到 550 的市場，取決於信貸品質、公司規模等，當你考慮基本利率加上費用利差時，這個範圍是我們認為，仍然可以讓您獲得相當有吸引力的無槓桿總資產回報率。

So when -- I said this in an answer earlier, when the economy demonstrates strength and the portfolio is in good shape, people, Ares included, feel comfortable seeing returns go down modestly. So we expect that and I don't think it's -- I don't see it continuing, I think.

因此，當我之前在回答中說過這一點時，當經濟表現出實力並且投資組合狀況良好時，包括阿瑞斯在內的人們會放心地看到回報率小幅下降。所以我們預計會發生這種情況，但我認為這種情況不會持續下去。

Well, that's an important point, which is I think that they have actually stabilized. We did see spreads stabilize this past quarter relative to the prior quarters where there was consistent decline. So I think that's an important point. And then Kipp's point around looking at the absolute return, again, relative to our historical experience, we're still getting 10% on senior debt at leverage levels that are well below historical averages. So I think on an absolute basis, we're still feeling pretty good.

嗯，這是很重要的一點，我認為他們實際上已經穩定下來了。我們確實看到上個季度的利差相對於前幾季的持續下降趨於穩定。所以我認為這是很重要的一點。然後基普的觀點是關於絕對回報，相對於我們的歷史經驗，我們仍然以遠低於歷史平均的槓桿水平獲得 10% 的優先債務。所以我認為從絕對意義上講，我們仍然感覺很好。

Kenneth Lee, RBC Capital Markets.

肯尼斯李，加拿大皇家銀行資本市場。

Just in terms of the portfolio there, it looks like average interest coverage ratios ticked up to 1.8x. Just wondering, do you still expect a pickup in terms of credit losses across the industry? Or are things just getting much better, especially with the potential rate outlook there?

就投資組合而言，平均利息保障倍數似乎已升至 1.8 倍。只是想知道，您是否仍預期整個產業的信用損失會有所回升？還是情況正在變得更好，尤其是考慮到那裡的潛在利率前景？

I was forecasting, frankly, the things would get worse than they've gotten. I mean, I see it currently is stable, right? You have very low nonaccruals as a percentage of the portfolio, both on a fair value and cost basis. When we look at sort of the watch list names, ones and twos, again, the count has been pretty consistent.

坦白說，我預測事情會變得比現在更糟。我的意思是，我看到它目前很穩定，對嗎？無論是在公允價值或成本基礎上，非應計費用佔投資組合的百分比都非常低。當我們再次查看觀察名單的名稱時，數量非常一致。

So at this point, for me, it's a little bit difficult to predict. I guess, we'll see what the economy does, and we'll see what the trajectory of rate decreases likely are. But I see it as a pretty stable picture. I don't see an increase in defaults. I don't see things also materially getting much better than this. They're pretty good from a credit quality perspective today when you look against the historical numbers.

所以在這一點上，對我來說，預測有點困難。我想，我們會看看經濟會發生什麼，我們會看看利率下降的軌跡可能是什麼。但我認為這是一幅相當穩定的畫面。我沒有看到預設值增加。我不認為事情會比這有實質的改善。當你比較歷史數據時，從今天的信用品質角度來看，它們相當不錯。

Got you. And then just in terms of just a little bit of housekeeping. Any color around amendment activity you've seen in the quarter? And as well, any kind of revolver facility drawdowns that you want to highlight?

明白你了。然後就只是一點點家事。您在本季看到的修訂活動有什麼色彩嗎？另外，您想強調任何類型的左輪手槍設施縮減嗎？

I'll just say, amendment activity has been very stable, if not even a little bit lighter than normal. And then on the revolver draw point, revolver drawings -- revolver draws at our portfolio companies have actually gone down this quarter versus prior quarter. So liquidity and our borrowers feels healthy.

我只想說，修正活動一直非常穩定，甚至比正常情況少一點點。然後在左輪手槍抽籤方面，我們投資組合公司的左輪手槍抽籤實際上本季比上一季下降。因此，流動性和我們的借款人感覺都很健康。

Mark Hughes, Truist.

馬克‧休斯，真理主義者。

Exits in the fourth quarter, there was a chunk that went over to Ivy Hill, but it looked like the net activity was still negative. How do you see that playing out for the full quarter?

第四季度退出時，有很大一部分轉到了 Ivy Hill，但看起來淨活動仍然為負。您如何看待整個季度的情況？

Yeah. I think you're just talking about the post quarter end activity. It's 24 days. I think it's not -- yes. I wouldn't read too much into that. As you mentioned, $450 million of the exits were sales to Ivy Hill. Obviously, like you pointed out, still a net negative number, but the backlog we disclosed being in the mid-$2 billion level, we feel good about the level of activity out there.

是的。我認為你只是在談論季度末活動。已經24天了。我認為這不是——是的。我不會對此進行太多解讀。正如您所提到的，其中 4.5 億美元的退出是向 Ivy Hill 的出售。顯然，正如您所指出的，仍然是一個淨負數，但我們披露的積壓訂單處於 20 億美元左右的水平，我們對那裡的活動水平感到滿意。

Understood. And then the improvement in interest coverage, was that largely the lower portfolio yield? Or is there some improvement in the EBITDA? I think EBITDA was down a little bit sequentially, but that's -- could be misleading.

明白了。然後利息覆蓋率的改善，很大程度是投資組合報酬率的下降嗎？或者 EBITDA 是否有一些改善？我認為 EBITDA 連續下降了一點，但這可能會產生誤導。

We saw EBITDA growth in the portfolio and slightly lower rates for portfolio companies.

我們看到投資組合的 EBITDA 成長，而投資組合公司的比率略有下降。

Yeah, the growth rate of EBITDA was down sequentially from 12% to 10%, but still 10% growth, which will help with the interest coverage math as well as the modest rate declines.

是的，EBITDA 的成長率連續從 12% 下降到 10%，但仍是 10% 的成長，這將有助於計算利息覆蓋率以及適度的利率下降。

And then I did want to ask, Jim Miller, any plan to improve the 20-year process that's been put in place?

然後我確實想問 Jim Miller，有什麼計劃可以改進已經實施的 20 年流程嗎？

Jim Miller

吉姆·米勒

It's really difficult to come in after 20 years and improve something that's been run this well. That is...

20年後要進入並改進運行得如此良好的東西確實很困難。那是...

You've been here for, what, 18 of the 20?

你在這裡待了 20 年中的 18 年嗎？

Jim Miller

吉姆·米勒

Yes, the first two years, I was not here, so they can take full credit on it. But no, I'm very excited to be part of the team, close to working with ARCC, but it's -- this is a great business with a great team. So nothing exciting from my end.

是的，前兩年我不在這裡，所以他們可以完全相信這一點。但不，我很高興能成為團隊的一員，與 ARCC 密切合作，但這是一個偉大的企業，擁有一支偉大的團隊。所以我的結局沒有什麼令人興奮的。

(Operator Instructions)

（操作員說明）

Paul Johnson, KBW.

保羅·約翰遜，KBW。

Congrats on 20 years as well as the upgrade. On the spread compressions that you've kind of seen this year, has that also impacted structuring fees at all for new deals? Or is it just maybe a little too early to tell just given we're still kind of waiting on M&A recovery?

恭喜 20 週年以及升級。今年您看到的利差壓縮是否也影響了新交易的結構費用？或者考慮到我們仍在等待併購復甦，現在下結論還為時過早嗎？

I mean, I think you have to take it all together and say borrowers are looking at the all-in cost of financing fees, the base rate and obviously, spreads. A little bit of pressure on fees, too, the same way we've seen some pressure on spreads. We'll see where it goes from here. I don't think we have anything to take away quite yet.

我的意思是，我認為你必須把這一切放在一起，並說借款人正在考慮融資費用、基本利率和顯然的利差的全部成本。費用上也有一點壓力，就像我們看到點差上有一些壓力一樣。我們將看看它會從這裡走向何方。我認為我們還沒有什麼可以拿走的。

Appreciate that. And then on just one line, emergency communications, saw that was removed from nonaccrual from last quarter. Is there anything you can say, I guess, on the resolution there? Is that still in the portfolio? Or has that been exited fully at this point?

很欣賞這一點。然後，僅在一條緊急通訊線路上，就看到這一點從上季度的非應計項目中刪除了。我想，您對那裡的決議有什麼要說的嗎？那還在投資組合中嗎？或者現在已經完全退出了嗎？

It's been fully exited from the portfolio.

它已完全退出投資組合。

And last question just broader -- I mean, in terms of inflation, I guess, what do you see kind of from your broader observation of the portfolio? I mean, if we kind of last the worst points of inflation at this point has been -- sort of remain persistent. I mean, it seems to be a story that doesn't completely go away. Just kind of wondering just with the higher inflation outlook due to the potential outcome of the election.

最後一個問題更廣泛——我的意思是，就通貨膨脹而言，我想，您從對投資組合的更廣泛觀察中看到了什麼？我的意思是，如果我們能度過目前通膨最糟糕的時刻，那就保持持續下去。我的意思是，這似乎是一個並沒有完全消失的故事。只是想知道由於選舉的潛在結果而導致的更高的通膨前景。

We think it's moderated a lot. I mean, if you follow us from quarter-to-quarter, it has been a theme that we actually had talked about and something that was very evident in our portfolio as far back as probably the third, fourth quarter of '21 as we sort of emerged from that difficult period with the pandemic, it continued and it was quite persistent. But I would say this year, even in the last year, it's moderated quite a lot to levels that feel much more normalized on a go-forward basis.

我們認為它已經得到了很大的緩和。我的意思是，如果你逐季地關注我們，你會發現這是我們實際上討論過的一個主題，而且早在我們排序的21 年第三、第四季度，這在我們的投資組合中就非常明顯。但我想說，今年，即使在去年，它也已經緩和了很多，達到了在未來的基礎上更正常的水平。

Derek Hewett, Bank of America.

德里克·休伊特，美國銀行。

Reiterate the congratulations on the successful 20 years. My question has to do with PIK. So it's been stable at about 15% of revenue the past few quarters. So the first part of my question is, do you think PIK has peaked at these levels? And more importantly than that, what percentage of PIK was just temporarily built into the original deal to kind of give the borrower some additional flexibility versus kind of PIK related to any sort of borrower liquidity issues?

再次恭喜20週年的成功。我的問題與 PIK 有關。因此，過去幾季它一直穩定在收入的 15% 左右。所以我的問題的第一部分是，您認為 PIK 是否已達到這些水平的頂峰？更重要的是，與任何類型的借款人流動性問題相關的 PIK 相比，多大比例的 PIK 只是暫時納入原始交易中，以便為借款人提供一些額外的靈活性？

Yeah. And I'll -- thanks, Derek. I think you know this, but for others who may not think about it quite the same way. We do a fair amount of junior capital investing at this company, and we think we do it quite well. And a portion of that is particularly in a higher interest rate environment, being able to structure deals that have PIK components. That's why we win business in a lot of these circumstances. And we're doing them in what we think are really high-quality companies that simply are needing to adjust to the higher rate environment and having less cash on hand.

是的。我會——謝謝，德里克。我想你知道這一點，但對於其他人可能不會以同樣的方式思考。我們在這家公司進行了大量的初級資本投資，我們認為我們做得很好。其中一部分尤其是在利率較高的環境下，能夠建立包含 PIK 成分的交易。這就是我們在許多此類情況下贏得業務的原因。我們正在做這些我們認為真正高品質的公司，這些公司只是需要適應更高的利率環境並且手頭現金更少。

So the answer to your question is most of the PIK income is by choice, as I describe it, not as a concession for a portfolio company underperformance. It's very different from obviously where we were in 2000 where most of it was coming as a concession to companies that weren't open and weren't generating cash. But I think a lot -- in the BDC world is made of PIK and we spend a lot of time looking at the numbers. The number that I look at is just what percentage of your total interest and dividend income is PIK, right?

所以你的問題的答案是，正如我所描述的，大部分 PIK 收入是我的選擇，而不是作為投資組合公司表現不佳的讓步。這顯然與 2000 年的情況有很大不同，當時大部分資金都是對那些尚未開業且不產生現金的公司的讓步。但我想了很多——BDC 世界是由 PIK 組成的，我們花了很多時間看數字。我看的數字就是 PIK 佔你的總利息和股息收入的百分比，對嗎？

And the number that I'm looking at for this quarter for the company is down pretty substantially from 2020, 2021 and 2022. So it just doesn't give me a significant amount of concern today because, again, most of this is by choice and part of our investment philosophy, and I think has been one of the reasons we've been able to generate such significant ROEs in, frankly, this company relative to some of the competition.

我預計該公司本季的數字較 2020 年、2021 年和 2022 年大幅下降。因此，今天這並沒有給我帶來很大的擔憂，因為這大部分都是我們的選擇，也是我們投資理念的一部分，我認為這是我們能夠產生如此顯著的股本回報率的原因之一坦白說，這家公司相對於一些競爭對手來說。

And we actually did disclose at our Investor Day, and it still holds true today, 90% of our PIK income was structured at the time of the investment versus only 10%, which is amendment oriented PIK.

事實上，我們確實在投資者日披露了這一點，今天仍然如此，我們 90% 的 PIK 收入是在投資時構建的，而只有 10% 是面向修正的 PIK。

Okay. And then my follow-up question is, are there any, like, for lack of a better term, like credit blind spots that investors need to kind of pay attention to within the sector, just given the surprisingly strong trends that we continue to see within the middle market?

好的。然後我的後續問題是，考慮到我們繼續看到的令人驚訝的強勁趨勢，是否存在投資者需要在該行業內關注的信用盲點，因為缺乏更好的術語？

Yeah. I think personally, I think the one that everyone always misses is a lack of diversification. It's not something that we get enough credit for at this company with 500-plus portfolios. We're not exposed to a single name. And you've seen over time that we've had some credit problems, losses, whatever it may be, but over a 20-year history, investing in 4,000 companies. Diversification is actually a pretty big deal. And what you'll see, we get asked questions about, oh, what that's -- what happened to this portfolio of company.

是的。我個人認為，大家總是忽略的一點是缺乏多元化。對於這家擁有 500 多個投資組合的公司來說，我們並沒有對此給予足夠的信任。我們不會接觸到單一的名字。隨著時間的推移，你已經看到我們遇到了一些信用問題、損失，無論是什麼，但在 20 年的歷史中，我們投資了 4,000 家公司。多元化其實是一件大事。你會看到，我們會被問到，哦，那是什麼——公司的這個投資組合發生了什麼。

At the end of the day, most of the time, it doesn't matter. And companies be able to generate really, really consistent results over a long period of time, which is why we really don't comment very often on single name risks because we don't believe the company actually has any.

歸根結底，大多數時候，這並不重要。公司能夠在很長一段時間內產生真正、真正一致的結果，這就是為什麼我們真的不經常評論單一名稱風險，因為我們不相信公司實際上有任何風險。

And this concludes our question-and-answer session. I'd like to turn the conference call back over to Mr. Kipp DeVeer for any closing remarks.

我們的問答環節到此結束。我想將電話會議轉回 Kipp DeVeer 先生做總結發言。

Nothing as usual other than thanks for attending the call, and we will catch you next quarter. Have a great day.

像往常一樣，除了感謝您參加電話會議之外，我們將在下個季度與您聯繫。祝你有美好的一天。

Ladies and gentlemen, this concludes our conference call for today. If you missed any part of today's call, an archived replay of the call will be available approximately one hour after the end of the call through November 30, at 5:00 PM Eastern Time to domestic callers by dialing 1 (800) 839-5127 and to international callers by dialing +1 (402) 220-2692. An archived replay will also be available on a webcast link located at the homepage of the Investor Resources section of the Ares Capital website. Thank you for your participation, and you may now disconnect.

女士們先生們，我們今天的電話會議到此結束。如果您錯過了今天通話的任何部分，通話結束後大約一小時，直到東部時間 11 月 30 日下午 5:00，國內來電者可撥打 1 (800) 839-5127 獲取存檔的通話重播。撥打+1 (402) 220-2692。存檔重播也可透過位於 Ares Capital 網站投資者資源部分主頁上的網路廣播連結取得。感謝您的參與，您現在可以斷開連接。