Capital Southwest Corp (CSWC) 2024 Q2 法說會逐字稿

Thank you for joining today's Capital Southwest Second Quarter Fiscal Year 2024 Earnings Call. Participating on today's call are Bowen Diehl, CEO; Michael Sarner, CFO; and Chris Rehberger, VP Finance. I will now turn the call over to Chris Rehberger.

感謝您參加今天的 Capital Southwest 2024 財年第二季財報電話會議。參加今天電話會議的有執行長 Bowen Diehl；麥可‧薩納，財務長；和財務副總裁 Chris Rehberger。我現在將把電話轉給克里斯·雷伯格。

Thank you. I would like to remind everyone that in the course of this call, we will be making certain forward-looking statements. These statements are based on current conditions, currently available information and management's expectations, assumptions and beliefs. They are not guarantees of future results and are subject to numerous risks, uncertainties and assumptions that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties the Capital Southwest publicly available filings with the SEC.

謝謝。我想提醒大家，在這次電話會議中，我們將做出某些前瞻性陳述。這些陳述是基於當前狀況、目前可獲得的資訊以及管理層的期望、假設和信念。它們不是對未來結果的保證，並受到許多風險、不確定性和假設的影響，可能導致實際結果與此類陳述有重大差異。有關這些風險和不確定性的信息，請參閱 Capital Southwest 向 SEC 公開提交的文件。

The company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release, except as required by law. I will now hand the call off to our President and Chief Executive Officer, Bowen Diehl.

除非法律要求，否則本公司不承擔更新或修改任何前瞻性聲明的義務，無論是由於新資訊、未來事件、情況變化或本新聞稿發布後的任何其他原因。現在我將把電話轉給我們的總裁兼執行長 Bowen Diehl。

Thanks, Chris. And thank you, everyone, for joining us for our second quarter fiscal 2024 earnings call. We are pleased to be with you this morning and look forward to giving you an update on the performance of our company and our portfolio as we continue to diligently execute our investment strategy as stewards of your capital. Throughout our prepared remarks, we will refer to various slides in our earnings presentation, which can be found in the Investor Relations section of our website at www.capitalsouthwest.com. You will also find our quarterly earnings press release issued last evening on our website.

謝謝，克里斯。感謝大家參加我們的 2024 財年第二季財報電話會議。我們很高興今天早上與您在一起，並期待為您提供有關我們公司和我們的投資組合的最新業績，因為我們作為您資本的管理者，將繼續努力執行我們的投資策略。在我們準備好的發言中，我們將參考收益演示中的各種幻燈片，這些幻燈片可以在我們網站 www.capitalsouthwest.com 的投資者關係部分找到。您也可以在我們的網站上找到我們昨晚發布的季度收益新聞稿。

We'll begin on Slide 6 of the earnings presentation, where we have summarized some of the key performance highlights for the quarter.

我們將從收益簡報的幻燈片 6 開始，其中我們總結了本季的一些關鍵業績亮點。

During the quarter, we generated pretax net investment income of $0.67 per share, which represented 24% growth over the $0.54 per share generated a year ago in the September quarter. With $0.67 per share, more than covered both our regular dividend and our supplemental dividend paid during the quarter, up $0.56 and $0.06 per share, respectively. Portfolio earnings continue to be strong. And as of the end of the quarter, we estimate that our undistributed taxable income was $0.42 per share.

本季度，我們產生了每股 0.67 美元的稅前淨投資收益，比去年同期的每股 0.54 美元成長了 24%。每股 0.67 美元，超出了我們在本季支付的定期股息和補充股息，每股分別增加了 0.56 美元和 0.06 美元。投資組合收益持續強勁。截至本季末，我們估計未分配的應稅收入為每股 0.42 美元。

We're also pleased to announce today that our Board of Directors has declared a $0.01 per share increase in our regular dividend to $0.57 per share for the quarter ending December 31, 2023. This represents an increase of 1.8% compared to the $0.56 per share regular dividend paid during the September quarter and 9.6% over the 52% per share paid a year ago in the December quarter. These increases in our regular dividends are a result of the increased fundamental earnings power of our portfolio given its growth and performance as well as further improvements in our operating leverage.

我們今天也很高興地宣布，董事會已宣布將截至 2023 年 12 月 31 日的季度的定期股息每股增加 0.01 美元，至每股 0.57 美元。與每股 0.56 美元相比，增加了 1.8% 9 月季度支付的定期股息比去年12 月季度支付的每股52% 提高了9.6%。我們定期股息的增加是由於我們的投資組合的基本盈利能力不斷增強，考慮到其增長和業績，以及我們營運槓桿的進一步改善。

In addition, due to the excess earnings being generated by our floating rate debt investment portfolio in this high interest rate environment, our Board has again declared a supplemental dividend of $0.06 per share from December '23 quarter, bringing total dividends declared for the December '23 quarter to $0.63 per share, which in total represent 11% growth over total dividends paid out a year ago quarter. While future dividend declarations are at the discretion of our Board of Directors, it is our intent and expectation that Capital Southwest will continue to distribute quarterly supplemental dividends for the foreseeable future.

此外，由於我們的浮動利率債務投資組合在這種高利率環境下產生了超額收益，我們的董事會再次宣布從12月23日季度開始派發每股0.06美元的補充股息，使12月宣布的股息總額達到預期。23 季度每股股息增至 0.63 美元，比去年同期支付的股息總額增長 11%。雖然未來的股息宣派由我們的董事會酌情決定，但我們的意圖和期望是，Capital Southwest 將在可預見的未來繼續派發季度補充股息。

While base rates are above historical averages, and we have a meaningful UTI, which is generated by earnings in excess of our dividend and realized gains from our equity investment portfolio.

雖然基本利率高於歷史平均水平，但我們有一個有意義的 UTI，它是由超過我們的股息的收益和我們的股權投資組合的已實現收益產生的。

During the quarter, deal quality and activity in the lower middle market continued at a healthy pace, and we continue to be able to find attractive investment opportunities. Deal flow continues to be weighted more towards acquisitions rather than refinancing and the environment continues to be a favorable one for nonbank first lien lenders like Capital Southwest.

本季度，中低端市場的交易品質和活動繼續保持健康的步伐，我們繼續能夠找到有吸引力的投資機會。交易流程繼續更偏重於收購而不是再融資，而且環境仍然有利於像 Capital Southwest 這樣的非銀行第一留置權貸款機構。

Private equity firms and business owners continue to transact while nonbank lenders continue to provide more certainty to closing than traditional bank financing structures. Loan pricing spreads remained attractive, but moderated somewhat. We're attracting 25 to 50 basis points versus the most recent couple of quarters as competition in the lower middle market among nonbank lenders migrated slightly towards more normal levels. That said, we are still seeing very attractive loan pricing spreads on new portfolio loans that are 25 to 50 basis points higher than 12 to 18 months ago. Leverage levels on the new portfolio company loans remain generally lower by half to a full turn of EBITDA.

私募股權公司和企業主繼續進行交易，而非銀行貸款機構繼續提供比傳統銀行融資結構更多的確定性。貸款定價利差仍然具有吸引力，但有所放緩。與最近幾季相比，我們吸引了 25 至 50 個基點，因為非銀行貸款機構之間中低端市場的競爭略有轉向更正常的水平。儘管如此，我們仍然看到新投資組合貸款的貸款定價利差非常有吸引力，比 12 至 18 個月前高出 25 至 50 個基點。新投資組合公司貸款的槓桿水準總體上仍低於 EBITDA 的一半至一倍。

We also continue to see loan-to-value levels on new loans calculated as our first lien loan divided by the enterprise value being paid for an acquisition, down meaningfully from 12 to 18 months ago as private equity firms remain willing to pay relatively full multiples for quality companies.

我們也繼續看到新貸款的貸款價值水準（以我們的第一筆留置權貸款除以收購所支付的企業價值計算）較12 至18 個月前顯著下降，因為私募股權公司仍然願意支付相對完整的倍數對於優質公司。

Portfolio growth during the quarter was driven by $110 million in new commitments, consisting of $81.7 million in commitments to 5 new portfolio companies and $28.3 million in commitments to 6 existing portfolio companies.

本季投資組合成長由 1.1 億美元的新承諾推動，其中包括對 5 家新投資組合公司的 8,170 萬美元承諾和對 6 家現有投資組合公司的 2,830 萬美元承諾。

On the capitalization front, we are pleased to announce that during the quarter, we successfully amended, extended and upsized our corporate revolving credit facility while also raising $22.8 million in gross equity proceeds at a weighted average price of $20.77 per share or 127% of the prevailing NAV per share. We have remained diligent to ensuring we have strong balance sheet liquidity, while also funding a meaningful portion of our investment activity with accretive equity issuances. As we believe it is important to maintain a conservative mindset to both balance sheet liquidity and BDC leverage.

在資本化方面，我們很高興地宣布，在本季度，我們成功修改、延長和擴大了我們的企業循環信貸額度，同時也以每股20.77 美元的加權平均價格籌集了2,280 萬美元的總股本收益，佔每股收益的127%。現行每股資產淨值。我們一直努力確保擁有強大的資產負債表流動性，同時透過增值股票發行為我們投資活動的重要部分提供資金。我們認為，對資產負債表流動性和 BDC 槓桿保持保守心態非常重要。

We continue to manage our BDC with a full economic cycle mentality. This starts with our underwriting of new opportunities, but it also applies to how we manage the BDC's capitalization, managing leverage to the lower end of our target range positions us to invest throughout a potential recession when risk-adjusted returns can be particularly attractive. It also allows us to support our portfolio of companies, while also opportunistically repurchasing our stock if it were to trade meaningfully below NAV.

我們繼續以全經濟週期的心態來管理我們的BDC。這始於我們對新機會的承保，但它也適用於我們如何管理BDC 的資本，將槓桿管理到目標範圍的下限，使我們能夠在整個潛在衰退期間進行投資，此時風險調整後的回報可能特別有吸引力。它還使我們能夠支持我們的公司投資組合，同時如果我們的股票交易價格大幅低於資產淨值，我們也可以趁機回購我們的股票。

Finally, subsequent to quarter end, we received shareholder approval to increase authorized shares of our common stock to 75 million shares, up from 40 million shares. These new shares will allow us to continue our track record of growing our asset base while maintaining conservative balance sheet leverage by raising accretive equity primarily through our ATM program.

最後，在季度末後，我們獲得股東批准，將普通股的法定股數從 4,000 萬股增加到 7,500 萬股。這些新股將使我們能夠繼續保持資產基礎成長的記錄，同時透過主要透過 ATM 計劃籌集增值股本來維持保守的資產負債表槓桿。

On Slide 7 and 8, we illustrate our continued track record of producing strong dividend growth, consistent dividend coverage and solid value creation since the launch of our credit strategy back in January of 2015. Since that time, we have increased our regular dividend paid to shareholders 28x and have never cut the regular dividend, all while maintaining strong coverage of our regular dividend with pretax NII.

在投影片 7 和 8 中，我們展示了自 2015 年 1 月推出信貸策略以來，我們持續實現強勁股息成長、持續股息覆蓋率和穩健價值創造的記錄。自那時起，我們增加了支付給股東人數為28 倍，並且從未削減定期股息，同時透過稅前NII 維持我們定期股息的強勁覆蓋。

Additionally, over the same time period, we have paid or declared 22 special or supplemental dividends totaling $3.83 per share including the $0.06 per share the Board has declared for the December 2023 quarter, all generated for excess earnings and realized gains from our investment portfolio.

此外，在同一時期，我們還支付或宣布了22 筆特別或補充股息，總計每股3.83 美元，其中包括董事會為2023 年12 月季度宣布的每股0.06 美元，所有股息均來自我們投資組合的超額收益和已實現收益。

We believe our track record of thoughtfully growing our dividend, the solid performance of our portfolio as well as our company's sustained access to multiple capital sources has demonstrated the strength of our investment in capitalization management strategies as well as the absolute alignment of all our decisions with the interest of our shareholders.

我們相信，我們深思熟慮地增加股息的記錄、我們投資組合的穩健表現以及我們公司持續獲得多種資本來源的能力，都證明了我們在資本管理策略方面的投資實力以及我們所有決策的絕對一致性。我們股東的利益。

Turning to Slide 9, we lay out the core tenets of our investment strategy. Our core strategy is lending and investing in the lower middle market. The vast majority of which is in first lien senior secured loans, the company's backed by product equity firms. In fact, approximately 91% of our credit portfolio is backed by private equity firms which provide important guidance and leadership to the portfolio companies as well as the potential for new junior capital support if needed.

轉向投影片 9，我們列出了投資策略的核心原則。我們的核心策略是在中低端市場進行貸款和投資。其中絕大多數是第一留置權優先擔保貸款，該公司由產品股權公司提供支援。事實上，我們大約 91% 的信貸投資組合得到私募股權公司的支持，這些公司為投資組合公司提供重要的指導和領導，並在需要時提供新的初級資本支持的潛力。

We have been pleased with the leadership and support that our private equity firm partners have provided our portfolio companies both in the few instances where capital has been required to maintain the operating and growth strategies of the portfolio companies and in realizing operational efficiencies in an environment where business input costs have been rising. In the lower middle market, we often have the opportunity to invest on a minority basis in the equity pursuit with the private equity firm, when we believe the equity thesis is compelling.

我們對私募股權公司合作夥伴為我們的投資組合公司提供的領導和支持感到高興，無論是在少數需要資本來維持投資組合公司的營運和成長策略的情況下，還是在以下環境中實現營運效率：企業投入成本不斷上升。在中低端市場，當我們相信股權論點令人信服時，我們通常有機會以少數股權的方式投資於私募股權公司的股權追求。

As of the end of the quarter, our equity co-investment portfolio consists of 59 investments with a total fair value of $121.1 million, which was marked at 147% of cost representing $38.9 million in embedded unrealized appreciation or $0.97 per share.

截至本季末，我們的股權聯合投資組合由 59 項投資組成，公允價值總額為 1.211 億美元，以成本的 147% 計算，即嵌入未實現增值 3,890 萬美元或每股 0.97 美元。

Our equity portfolio, which represented approximately 9% of our total portfolio fair values at the end of the quarter, continues to provide our shareholders participation in the attractive upside potential of these growing lower middle market businesses which will come in the form of NAV per share growth and supplemental dividends over time.

截至本季末，我們的股票投資組合約佔投資組合公允價值總額的9%，繼續讓我們的股東參與這些不斷增長的中低端市場業務的有吸引力的上行潛力，這些潛力將以每股資產淨值的形式反映隨著時間的推移而增長和補充股息。

Our lower middle market strategy is complemented by club participation in first lien loans to larger companies led by like-minded lenders with whom we have relationships and have gained confidence in their post-closing loan management from working together across multiple deals. Virtually all of these club deals are first lien senior secured and backed by private equity firms.

我們的中低端市場策略得到了俱樂部參與向由志同道合的貸方領導的大公司提供的第一留置權貸款的補充，我們與這些貸方有關係，並通過在多筆交易中的合作對他們的交割後貸款管理產生了信心。事實上，所有這些俱樂部交易都是由私募股權公司提供優先留置權擔保和支持的。

As illustrated on Slide 10, our on-balance sheet credit portfolio as of the end of the quarter grew 6% quarter-over-quarter to $1.2 billion compared to $1.1 billion as of the end of the prior quarter.

如投影片 10 所示，截至本季末，我們的表內信貸投資組合較上季成長 6%，達到 12 億美元，而上一季末為 11 億美元。

Year-over-year, the portfolio has grown 31% from $903 million end of the September '22 quarter end. For the current quarter, 100% of our new portfolio company debt originations were first lien senior secured. And as of the end of the quarter, 97% of the credit portfolio was first lien senior secured.

與去年同期相比，該投資組合較 2022 年 9 月季度末的 9.03 億美元增長了 31%。本季度，我們新投資組合公司債務的 100% 均由優先留置權擔保。截至本季末，97% 的信貸投資組合均獲得優先留置權擔保。

The weighted average credit exposure per company in our portfolio was 1.1%. We believe our portfolio of granularity speaks to our continued investment discipline, of maintaining a conservative posture to overall risk management as we grow our balance sheet.

我們投資組合中每家公司的加權平均信用風險為 1.1%。我們相信，我們的投資組合粒度體現了我們持續的投資紀律，即在我們擴大資產負債表的同時對整體風險管理保持保守的態度。

On Slide 11, we detailed a $110 million of capital invested in and committed to portfolio companies during the quarter. Capital committed this quarter included $79.7 million in first lien senior secured debt committed to the 5 new portfolio companies, including 2 in which we also invested a total of $2 million equity. We also committed a total of $27.8 million in first lien senior secured debt and $550,000 in equity in 6 existing portfolio companies. We are pleased with the strong market position that our team has established in the lower middle market as a premier debt and equity capital provider, as evidenced by the broad array of relationships across the country from which our team is sourcing quality opportunities.

在投影片 11 中，我們詳細介紹了本季向投資組合公司投資和承諾的 1.1 億美元資本。本季承諾的資本包括向 5 家新投資組合公司承諾的 7,970 萬美元第一留置權優先擔保債務，其中我們還向其中 2 家公司投資了總計 200 萬美元的股權。我們也承諾向 6 家現有投資組合公司提供總計 2,780 萬美元的第一留置權優先擔保債務和 55 萬美元的股本。我們對我們的團隊作為主要債務和股權資本提供者在中低端市場建立的強大市場地位感到高興，我們的團隊在全國範圍內尋找優質機會的廣泛關係就證明了這一點。

Deal activity over the past quarter continued at a healthy pace, and we continue to expect solid net portfolio growth in the coming quarters.

過去一個季度的交易活動繼續保持健康的步伐，我們繼續預計未來幾季投資組合淨成長將穩健。

Slide 12, we detail key stats for our on-balance sheet balance sheet portfolio as of the end of the quarter, excluding our I-45 joint venture. As of the end of the quarter, the total portfolio at fair value was weighted 87.8% of first lien senior secured debt, 2.8% to second lien senior secured debt, 0.1% of sub debt, and 9.3% to equity co-investments. The credit portfolio had a weighted average yield of 13.5% and weighted average leverage through our security of 3.6x EBITDA.

在投影片 12 中，我們詳細介紹了截至本季末表內資產負債表投資組合的關鍵統計數據，不包括我們的 I-45 合資企業。截至本季末，以公允價值計算的總投資組合中，第一留置權優先擔保債務佔87.8%，第二留置權優先擔保債務佔2.8%，次級債務佔0.1%，股權共同投資佔9.3% 。信貸投資組合的加權平均收益率為 13.5%，我們的證券的加權平均槓桿率為 3.6 倍 EBITDA。

As seen on Slide 13, our total investment portfolio, including our I-45 JV continues to be well diversified across industries with an asset mix, which provides strong security for our shareholders' capital. The portfolio remains predominantly weighted towards first lien senior secured debt with less than 3% of the total portfolio in second lien senior secured debt.

如投影片 13 所示，我們的總投資組合（包括 I-45 合資企業）繼續在各個行業實現多元化，資產組合為我們股東的資本提供了強有力的保障。此投資組合仍主要著重於第一留置權優先擔保債務，第二留置權優先擔保債務佔投資組合總額的比例不到 3%。

Turning to Slide 14. We have laid out the rating migration within our portfolio during the quarter. As a reminder, all loans upon origination are initially assigned an investment rating of 2 on a 4-point scale, with 1% being the highest rating and 4% being the lowest rating.

轉向投影片 14。我們已經列出了本季投資組合中的評級遷移。提醒一下，所有貸款在發放時最初都會被分配 2 級投資評級（滿分為 4 分），其中 1% 為最高評級，4% 為最低評級。

We feel very good about the performance of our portfolio with 96.9% of the portfolio at fair value rated in one of the top 2 categories, a 1 or 2.

我們對投資組合的表現感到非常滿意，96.9% 的投資組合以公允價值評級屬於前 2 個類別之一（1 或 2）。

I will now hand the call over to Michael to review more specifics of our financial performance for the quarter.

我現在將把電話轉交給邁克爾，以審查我們本季財務業績的更多細節。

Thanks, Bowen. Specific to our performance for the quarter, as summarized on Slide 16, we increased pretax net investment income by 6% quarter-over-quarter to $26.4 million or $0.67 per share compared to $25 million or $0.67 per share in the prior quarter.

謝謝，鮑文。具體到我們本季的業績，如幻燈片16 所示，我們的稅前淨投資收益環比增長6%，達到2640 萬美元，即每股0.67 美元，而上一季為2500 萬美元，即每股0.67 美元。

During the quarter, we paid out a $0.56 per share regular dividend and a $0.06 per share supplemental dividend. As mentioned earlier, our Board has approved a $0.01 per share increase to the regular dividend to $0.57 per share and maintained a $0.06 per share supplemental dividend for the December quarter.

本季度，我們支付了每股 0.56 美元的定期股息和每股 0.06 美元的補充股息。如前所述，我們的董事會已批准將定期股息每股增加 0.01 美元，至每股 0.57 美元，並維持 12 月季度每股 0.06 美元的補充股息。

Maintaining a consistent track record of meaningfully covering our dividend with pretax net investment income is important to our investment strategy. We continue our strong track record of regular dividend coverage with 120% coverage for the last 12 months ended September 30, 2023, and 109% cumulative coverage since the launch of our credit strategy in January 2015.

保持用稅前淨投資收入有意義地覆蓋股息的一貫記錄對我們的投資策略很重要。我們繼續保持定期股利覆蓋率的良好記錄，截至 2023 年 9 月 30 日的過去 12 個月覆蓋率為 120%，自 2015 年 1 月推出信貸策略以來累計覆蓋率為 109%。

Given the floating nature of our credit portfolio, elevated interest rates continued to be a tailwind to our net investment income. The quarter-over-quarter increase in the base rate index used to calculate interest on a majority of our loans moderated from the pace of increase we have seen in the past several quarters, having reset in early October to approximately 5.39%.

鑑於我們信貸投資組合的浮動性質，利率上升仍然是我們淨投資收入的推動力。用於計算我們大部分貸款利息的基本利率指數的季度環比增幅較過去幾季的增幅有所放緩，於 10 月初重置為約 5.39%。

This represented an increase of 15 basis points from its early July base rate reset of approximately 5.24%. As a reminder, our intent is to continue to share a portion of the excess of our quarterly pretax NII over our regular dividend with our shareholders in a quarterly supplemental dividend. We are confident in our ability to continue to distribute quarterly supplemental dividends for the foreseeable future based upon our current UTI balance of $0.42 per share, our ability to grow UTI each quarter organically by over-earning our total dividend and the expectation that we will harvest gains over time from our existing $0.97 per share in unrealized appreciation on the equity portfolio.

這比 7 月初重置的約 5.24% 的基準利率增加了 15 個基點。提醒一下，我們的目的是繼續以季度補充股息的形式與股東分享季度稅前 NII 超出常規股息的部分。基於我們目前每股 0.42 美元的 UTI 餘額、我們透過超額賺取總股息來有機增長 UTI 的能力以及我們將收穫的預期，我們對在可預見的未來繼續分配季度補充股息的能力充滿信心隨著時間的推移，我們現有的股票投資組合未實現每股升值0.97 美元。

For the quarter, we increased total investment income to $42.8 million, representing 6% growth quarter-over-quarter and [60%] growth from a year ago. Weighted average yield in the portfolio on all investments was 13%. Total investment income was $2.4 million higher this quarter due to growth in our credit portfolio as well as an increase in our weighted average yield on investments. As of the end of the quarter, we had 4 portfolio companies with loans on nonaccrual, representing 2% of our investment portfolio at fair value.

本季度，我們將總投資收入增加至 4,280 萬美元，較上季成長 6%，較去年同期成長 [60%]。所有投資組合的加權平均收益率為 13%。由於我們信貸投資組合的成長以及加權平均投資收益率的增加，本季總投資收入增加了 240 萬美元。截至本季末，我們有 4 家投資組合公司持有非應計貸款，占我們以公允價值計算的投資組合的 2%。

As seen on Slide 17, we further improved LTM operating leverage to 1.8% for the current quarter. Achieving 2% or better operating leverage as one of our initial long-term goals when we relaunched CSWC as a middle market lender back in 2015. To put this metric in perspective, our 1.8% operating leverage is second best in the entire BDC industry. We believe this metric speaks to the benefits of an internally managed model and our absolute alignment with shareholders. The internally managed model has and will continue to produce real fixed cost leverage while also allowing for significant resources to invest in people and infrastructure to continue to build a best-in-class BDC. As we look forward, we expect further improvements in operating leverage as we continue to grow the balance sheet over time.

如投影片 17 所示，我們將本季的 LTM 營運槓桿進一步提高至 1.8%。當我們在2015 年重新推出CSWC 作為中間市場貸款機構時，實現2% 或更高的營運槓桿是我們最初的長期目標之一。從這個指標來看，我們1.8% 的營運槓桿在整個BDC 行業中排名第二。我們相信這項指標說明了內部管理模式的好處以及我們與股東的絕對一致。內部管理模式已經並將繼續產生真正的固定成本槓桿，同時也允許大量資源投資於人員和基礎設施，以繼續建立一流的 BDC。展望未來，隨著我們不斷擴大資產負債表，我們預計營運槓桿將進一步改善。

Turning to Slide 18. The company's NAV per share at the end of the quarter increased by $0.08 per share to $16.46. The primary drivers of the NAV per share increase for the quarter were earnings in excess of our dividends for the quarter and accretion from the issuance of common stock at a premium to NAV per share, partially offset by net depreciation on our investment portfolio.

轉向幻燈片 18。該公司季度末的每股資產淨值增加了 0.08 美元，達到 16.46 美元。本季每股淨值成長的主要驅動因素是收益超過了本季的股息，以及以每股資產淨值溢價發行普通股而增加，部分被我們投資組合的淨折舊所抵銷。

Turning to Slide 19. We're pleased to report that our balance sheet liquidity remains strong with approximately $207 million in cash and undrawn leverage commitments on our revolving credit facility as of the end of the quarter. We recently completed an amendment upsize and extension on our revolving credit facility as our bank syndicate continues to support our growth. In fact, 8 of our existing lenders in the facility upsized their commitments, which we believe demonstrates their confidence in our stewardship, especially in the current capital markets environment.

轉向幻燈片 19。我們很高興地報告，我們的資產負債表流動性仍然強勁，截至本季度末，我們的循環信貸安排擁有約 2.07 億美元的現金和未提取的槓桿承諾。隨著我們的銀行銀團繼續支持我們的成長，我們最近完成了循環信貸額度的修訂、擴充和延長。事實上，我們現有的 8 家貸款機構增加了他們的承諾，我們認為這表明他們對我們的管理充滿信心，特別是在當前的資本市場環境下。

The amendment increased total revolving facility commitments from $400 million to $435 million and extended the maturity of the facility from August 2026 to August 2028. Based on our current borrowing base, we have full access to the incremental revolver capacity. The facility also has an accordion feature, allowing for the further increase of total commitments up to an aggregate of $750 million, allowing us to continue to grow our revolver capacity in lockstep with the growth of our overall balance sheet.

該修正案將循環貸款承諾總額從4 億美元增加到4.35 億美元，並將貸款期限從2026 年8 月延長至2028 年8 月。根據我們目前的借款基礎，我們可以完全利用增量循環貸款能力。該設施還具有手風琴功能，可將總承諾進一步增加至總計 7.5 億美元，使我們能夠隨著整體資產負債表的增長而繼續擴大左輪手槍產能。

In addition, we have a $45 million uncommitted SBA debentures capacity to draw from in the future. As of the end of the September quarter, 49% of our capital structure liabilities were in unsecured covenant-free bonds and our earliest debt maturity is in January 2026.

此外，我們還有 4,500 萬美元未承諾的 SBA 債券可供未來使用。截至 9 月季度末，我們 49% 的資本結構負債是無擔保無契約債券，我們最早的債務到期日為 2026 年 1 月。

As Bowen mentioned earlier, subsequent to quarter end, we have received shareholder approval to increase the number of authorized shares from 40 million to 75 million. These incremental shares provide Capital Southwest with the flexibility to continue our track record of raising accretive equity to maintain conservative balance sheet leverage as we continue to grow our asset base.

正如 Bowen 先前提到的，季度末後，我們已獲得股東批准，將授權股份數量從 4,000 萬股增加到 7,500 萬股。這些增量股份為 Capital Southwest 提供了靈活性，可以繼續我們籌集增值股本的記錄，以在我們繼續擴大資產基礎的同時維持保守的資產負債表槓桿。

Our regulatory leverage, as seen on Slide 20, ended the quarter at a debt-to-equity ratio of 0.92:1. down meaningfully from 1.11:1 as of the year ago September quarter.

如投影片 20 所示，我們的監管槓桿在本季末的負債股本比為 0.92:1。較去年 9 月季度的 1.11:1 大幅下降。

We will continue to methodically and opportunistically raise both secured and unsecured debt capital as well as equity capital through both our ATM program and secondary offerings to ensure we continue to maintain significant liquidity, conservative leverage and adequate covenant cushions throughout all economic cycles.

我們將繼續透過我們的ATM 計劃和二次發行有條不紊地、機會主義地籌集有擔保和無擔保債務資本以及股本資本，以確保我們在整個經濟週期中繼續保持充足的流動性、保守的槓桿率和充足的契約緩衝。

I will now hand the call back to Bowen for some final comments.

我現在將把電話轉回鮑文以徵求一些最終意見。

Thanks, Michael. And again, thank you, everyone, for joining us today. We appreciate the opportunity to provide you an update on our business, our portfolio and the market environment. Our company and portfolio continue to demonstrate strong performance, and we continue to be impressed by the job our team has done in building a robust asset base, deal origination and portfolio management capability as well as the flexible capital structure.

謝謝，麥可。再次感謝大家今天加入我們。我們很高興有機會向您提供有關我們業務、產品組合和市場環境的最新資訊。我們的公司和投資組合繼續展現出強勁的業績，我們的團隊在建立強大的資產基礎、交易發起和投資組合管理能力以及靈活的資本結構方面所做的工作繼續給我們留下了深刻的印象。

As to the uncertainty in the economy, we have been underwriting new deals and managing the overall BDC with a full economic cycle mentality since day 1, which we believe has positioned us well for the potential economic volatility in the coming months and years.

至於經濟的不確定性，我們從第一天起就一直以完整的經濟週期心態承銷新交易並管理整個BDC，我們相信這使我們能夠很好地應對未來幾個月和幾年的潛在經濟波動。

In summary, we have a credit portfolio heavily weighted to first lien senior secured debt allocated across a broad array of companies and industries, over 90% of which is backed by private equity firms. We had a well-capitalized balance sheet with multiple capital sources, strong liquidity and a flexible capital structure, much of which is fixed rate and covenant light.

總而言之，我們的信貸投資組合以第一留置權優先擔保債務為主，分佈於眾多公司和產業，其中 90% 以上由私募股權公司支持。我們的資產負債表資本充足，資金來源多樣，流動性強，資本結構靈活，其中大部分是固定利率和輕契約。

We believe our first lien senior secured investment focus and our capitalization strategy provide us complete confidence in the health and positioning of our company and our portfolio as we look ahead.

我們相信，我們的第一留置權優先擔保投資重點和我們的資本化策略使我們對公司的健康狀況和定位以及我們的投資組合充滿信心，展望未來。

This concludes our prepared remarks. Operator, we are ready to open the lines for Q&A.

我們準備好的演講到此結束。接線員，我們已準備好開通問答線路。

(Operator Instructions) Our first question comes from Mickey Schleien with Ladenburg.

（操作員說明）我們的第一個問題來自 Ladenburg 的 Mickey Schleien。

Bowen, one of your larger investments this quarter was in Swensons restaurants. And obviously, that can be a difficult sector to invest in. And eating out is one of those things that people cut back on during a recession, which may be coming. I do see that its menu seems to be focused on value, which is appealing. But is there anything else in that deal in particular that attracted you to this investment?

Bowen，您本季較大的投資之一是在 Swensons 餐廳。顯然，這可能是一個很難投資的領域。而外食是人們在經濟衰退期間減少的事情之一，而經濟衰退可能即將到來。我確實看到它的菜單似乎注重價值，這很有吸引力。但該交易中還有什麼特別吸引您參與這項投資的地方嗎？

Yes. It's an interesting question because we don't do a lot of restaurant deals, obviously. That one is kind of unique. You referenced the value menu, but it's also, it's founded back in 1934, and it's in a certain couple of markets that has been there for a long time, and it's kind of nostalgic drive-in where literally the waiters and waitresses jog to your car and back, and it's very nostalgic and it's been -- it's kind of a very loved by the community, let's put it that way.

是的。這是一個有趣的問題，因為顯然我們並沒有做很多餐廳優惠。那是一種獨特的。你提到了超值菜單，但它也是，它成立於 1934 年，在某些市場已經存在很長時間了，這是一種懷舊的汽車餐廳，服務員慢悠悠地慢跑到你的餐廳。汽車和回來，這是非常懷舊的，而且它一直- 它是一種非常受社區喜愛的，讓我們這樣說吧。

And so a lot of people go there because they went there right there, their parents and grandparents went there, that type of thing. So it's very -- that's why I included the word nostalgic in the press release, that's literally what it is. And then obviously, the leverage, profitability and all those other things were very attractive to us. But those are the reasons that it's different than your typical restaurant deal.

所以很多人去那裡是因為他們就去那裡，他們的父母和祖父母去了那裡，諸如此類的事情。所以這就是為什麼我在新聞稿中加入了「懷舊」這個詞，字面意思就是「懷舊」。顯然，槓桿率、獲利能力和所有其他因素對我們非常有吸引力。但這就是它與典型餐廳交易不同的原因。

Appreciate that. Wanted to ask you also a couple of questions about the operating leverage ratio. Can you give us a sense of the number of portfolio companies you're now managing per investment professional. And do you see that -- how do you see that ratio trending?

感謝。我也想問您幾個有關經營槓桿率的問題。您能否讓我們了解一下您現在每個投資專業人士管理的投資組合公司的數量？你看到了嗎——你如何看待這個比率的趨勢？

So we've got 94 portfolio companies, and we have 15...

所以我們有 94 家投資組合公司，還有 15 家…

15...

15...

15 investment professionals. So that's the average of 6.3 per investment professional. I mean it's -- plus we've got a bunch of employees that have been here for a while, too, so it underwrote those portfolio companies. So we feel pretty good about the coverage ratio that you're asking about. And certainly, we watch obviously. And as we grow, we'll certainly be increasing people as well as internally, promoting people and then hiring more junior people underneath them to leverage our time.

15名投資專業人士。也就是說，每位投資專業人士的平均分數是 6.3。我的意思是，加上我們還有一群已經在這裡工作了一段時間的員工，所以它為這些投資組合公司提供了承保。因此，我們對您所詢問的覆蓋率感到非常滿意。當然，我們顯然在觀察。隨著我們的成長，我們肯定會在內部增加人員，提拔人員，然後僱用更多初級人員來利用我們的時間。

And I might want to just touch about the scale. We've added significant employees in middle levels, we promoted employees from within. We're probably as deep today than we've ever been. And as Bowen said, a lot of these people are seasoned professionals that can handle -- certainly can handle 6 deals at a time.

我可能只想談談規模。我們在中階增加了重要的員工，我們從內部提拔了員工。今天我們可能比以往任何時候都更陷得更深。正如鮑文所說，這些人中有很多都是經驗豐富的專業人士，可以處理——當然可以一次處理 6 筆交易。

Yes, we're certainly very biased towards internal professional development and then letting people grow and learn how we do things, how the business model has actually worked through. It's worked quite well over the last [8] years.

是的，我們當然非常偏向內部專業發展，然後讓人們成長並了解我們如何做事，商業模式如何實際運作。它在過去[8]年裡運作良好。

Yes, I agree.

是的我同意。

Our people underneath them. So the staffing ratio looks pretty good right now.

我們的人民在他們下面。所以目前的人員配置比例看起來還不錯。

So my last question, sort of segue from that, your operating leverage ratio is now very close to the peer you mentioned in your prepared remarks. And they've obviously been around a long time, and they're quite a bit larger than you. So do you see more upside in this ratio? Or is this about as good as this -- as it can get?

因此，我的最後一個問題是，您的經營槓桿率現在非常接近您在準備好的評論中提到的同行。而且它們顯然已經存在很長時間了，而且它們比你大很多。那麼您認為這個比率還有更多的上升空間嗎？或者說這已經是最好的了？

Yes. I mean I think we might have improved a little bit. But I mean it's, I mean obviously, we need to have the best professionals in the industry. So we have to compensate them accordingly. And so there's only asset management business or something like that. The operating leverage will grow and probably improve a little bit, but it's not going to drop by half.

是的。我的意思是我認為我們可能會有所進步。但我的意思是，我的意思顯然是，我們需要擁有業內最優秀的專業人士。所以我們必須給予他們相應的補償。所以只有資產管理業務或類似的業務。營運槓桿將會成長，並且可能會有所改善，但不會下降一半。

Well, I'd say, right now, run rate is about 1.7% and we probably see over the next -- I would actually say, for the next 6 to 12 months, we'd see us dropping to that 1.7% on an LTM and probably down to 1.6%.

好吧，我想說，現在，運行率約為1.7%，我們可能會在接下來的時間裡看到——我實際上會說，在接下來的6 到12 個月裡，我們會看到我們的運行率下降到 1.7%。LTM 可能會降至 1.6%。

Yes. So a little bit of improvement.

是的。所以一點點改進。

Yes.

是的。

For sure.

一定。

Our next question comes from Vilas Abraham with UBS.

我們的下一個問題來自瑞銀集團的維拉斯·亞伯拉罕。

You mentioned on the last call that there was some potential M&A percolating and potentially $35 million to $75 million in prepaid through the end of the year. Can you just talk a little bit about what transpired over the quarter that -- it may and delay that? Is it just broader public market volatility or idiosyncratic dynamics that may have changed things?

您在上次電話會議中提到，有一些潛在的併購滲透，到年底可能會預付 3500 萬至 7500 萬美元。您能否簡單談談本季發生的事情—可能會延遲？只是更廣泛的公開市場波動還是特殊的動態可能改變了一切？

Yes. No, I think I wouldn't say that -- I'm just thinking of the processes we're referring to, I wouldn't say they were significantly delayed. And a lot of the sale processes kind of take a while. Obviously, the financing market is choppier than it was 12, 18 months ago. So raising financing is, I'd say probably a larger -- a more of a handholding type exercise for a private equity firm that it might have been into 1.5 years ago. So maybe things take a little bit longer, but...

是的。不，我想我不會這麼說——我只是在考慮我們所指的流程，我不會說它們被嚴重延遲了。許多銷售流程都需要一段時間。顯然，融資市場比 12、18 個月前更有波動。因此，我想說，對於一家私募股權公司來說，籌集融資可能是一項更大的、更像是一種控股型的活動，而這在 1.5 年前就可能進行。所以也許事情需要更長的時間，但是...

And 2 of them actually, one of them is going through an HSR process that was not identified before the need for it. So that actually puts that out 8 to 10 weeks still expected to close. The other one that we were probably alluding to is actually not happening. I think they're probably more likely to do a dividend recap and stay in the deal. So those were the 2 largest deals.

實際上，其中兩個，其中一個正在經歷 HSR 流程，但在需要之前並未確定。因此，實際上預計仍需 8 至 10 週才能結束。我們可能提到的另一件事實際上並沒有發生。我認為他們更有可能進行股息回顧並留在交易中。這是兩筆最大的交易。

Okay. That's helpful. And then yes, just as you think about just line of sight into pre-pays over the next couple of quarters and just balancing that with managing leverage. Just any thoughts there on the look forward.

好的。這很有幫助。然後是的，就像您考慮未來幾季的預付款，並透過管理槓桿來平衡這一點一樣。只是對未來的任何想法。

Yes. So I think you're talking about really leverage. And we obviously ended the quarter at 0.92. And we want to note, we just received approval to increase our share base for the share from 40 million to 75 million. So we had essentially had a partial quarter of a run rate at ATM raises. We'd probably tell you in this [fourth quarter], we'll be more than the $22 million that was raised in this quarter.

是的。所以我認為你談論的是真正的槓桿。很明顯，本季結束時的比率為 0.92。我們要指出的是，我們剛剛獲得批准將我們的股份基數從 4000 萬股增加到 7500 萬股。因此，我們基本上已經在 ATM 機上加薪了部分四分之一的運作率。我們可能會告訴您，在這個[第四季]，我們籌集的資金將超過本季的 2,200 萬美元。

Prepayments.

預付款項。

Okay. So actually, in the prepayment side, I think we have around maybe $25 million to $30 million in prepayments that we're expecting, but those could also slip past the end of the year. So we'll see that is. We do plan to bring leverage down this quarter, probably closer to the 0.85% to 0.9% range if that's our expectation, without that exit.

好的。所以實際上，在預付款方面，我認為我們預計的預付款約為 2500 萬至 3000 萬美元，但這些也可能會滑過今年年底。所以我們會看到這一點。我們確實計劃在本季度降低槓桿率，如果這是我們的預期的話，可能會接近 0.85% 至 0.9% 的範圍，但不退出。

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

我們的下一個問題來自 Bryce Rowe 和 B. Riley。

Maybe wanted to touch on that last point, Michael and Bowen it sounds like the shareholder vote to increase the authorized shares is really the reason for maybe less usage on the ATM this past quarter?

也許想談談最後一點，Michael 和 Bowen，聽起來股東投票增加授權股份確實是上個季度 ATM 使用量減少的原因？

That's correct. Yes.

這是正確的。是的。

That's correct. Yes.

這是正確的。是的。

Okay. That's helpful. And then maybe I wanted to hit on I-45, leverage within that JV kind of continues to go down in terms of debt outstanding on that particular facility. What's the outlook there? Do you expect to continue to see debt outstanding within that -- for that facility going down or kind of steady state from this point forward?

好的。這很有幫助。然後也許我想使用 I-45，該合資企業的槓桿率在該特定設施的未償債務方面繼續下降。那裡的前景如何？您是否期望繼續看到其中的未償債務——從現在開始，該設施會下降或保持某種穩定狀態？

Yes. I mean -- over time, we've seen less attractive opportunities in that market, and I think Main Street and Capital Southwest both believe that's the case. So we haven't originated in quite some time, but we have seen significant amounts of capital coming back which we've utilized to pay down that facility. We would tell you probably over the next 1 to 2 quarters, we will look to continue to pay down that facility and with -- the notion that there's always -- we've talked to the market in times about consolidation being a possibility. That is something that in order to do so we probably be delevering ahead of time.

是的。我的意思是，隨著時間的推移，我們在該市場看到的吸引力越來越少，我認為 Main Street 和 Capital Southwest 都相信情況就是如此。因此，我們已經有一段時間沒有發起了，但我們已經看到大量資本回來，我們用這些資本來償還貸款。我們可能會告訴您，在接下來的 1 到 2 個季度中，我們將繼續償還該貸款，並且我們已經多次與市場討論整合的可能性。為了做到這一點，我們可能會提前去槓桿化。

So by delevering that obviously give us a little bit of flexibility of what we want to do.

因此，透過去槓桿化，顯然可以讓我們在想做的事情上有一點彈性。

Okay. That's helpful. And then maybe one follow-up just on expenses. Compensation, Michael, do you expect kind of an uptick here in the fourth quarter in that comp line as maybe you get some catch-up bonus accruals?

好的。這很有幫助。然後也許只是關於費用的後續行動。邁克爾，你是否預計第四季度的薪酬會有所上升，因為也許你會獲得一些追趕的應計獎金？

Yes, for sure. I think so what you saw during the [9/30] quarter was, I'd tell you, the run rate of SG&A was probably about $200,000 high actually based on the fact that we have a special meeting but the cash comp was right on in terms of our run rate. So we would expect potentially, probably, I would almost say $1 million to $2 million in addition to the current quarter's cash cost in the following quarter.

是肯定的。我想你在 [9/30] 季度看到的是，我告訴你，SG&A 的運行率可能大約是 200,000 美元，實際上是基於我們有一個特別會議的事實，但現金補償是正確的就我們的運行率而言。因此，我們預計，除了當前季度的現金成本之外，下個季度可能會增加 100 萬至 200 萬美元。

Our next question comes from Erik Zwick with Hovde Group.

我們的下一個問題來自 Hovde Group 的 Erik Zwick。

I wanted to first just start thinking about the outlook for the weighted average yield in the portfolio and kind of what that implies for interest income. Just curious how much of the SOFR continued to kind of move higher in 3Q, it looks like it may have stabilized here for a little bit, if we assume. The Fed doesn't move tomorrow, and we're kind of in this current environment now. Is there still a little bit more of the our [9/30] quarter increase in SOFR to trickle through the portfolio? Or has most of that been realized at this point?

我想首先開始考慮投資組合中加權平均收益率的前景以及這對利息收入意味著什麼。只是好奇 SOFR 在第三季度繼續走高的程度，如果我們假設的話，它看起來可能會在這裡穩定一點。聯準會明天不會採取行動，而我們現在就處於當前的環境中。我們 [9/30] 季度 SOFR 的成長是否還有更多的資金流入投資組合？或者現在大部分已經實現了嗎？

Yes. There's probably, I think, 15 basis points based on the most recent reset in October for the coming quarter.

是的。我認為，根據 10 月最新的重置，下一季可能有 15 個基點。

Okay. Great. And then I know you addressed prepayment fees a little bit already, but just looking at that prepayment fees and other income line, down a little bit in the [9/30] quarter. Just curious what percentage of that line item is driven by prepayment fees versus other? And just curious about kind of the outlook going forward from your perspective?

好的。偉大的。然後我知道您已經解決了一些預付款費用問題，但僅看看預付款費用和其他收入線，在 [9/30] 季度略有下降。只是好奇該訂單項目中預付款費用與其他費用的比例是多少？只是想知道從您的角度來看，未來的前景如何？

Yes. So the prepayments were about $330,000, which we've considered onetime. On top of that, there's another $400,000 that's really the base. Those are really admin fees and management fees that we have received on a recurring basis from our portfolio companies. So going forward, you should expect that $400,000 has grown at about $25,000 a quarter based on originations, historically. And then prepayment fees and amendment fees, that's obviously a lot harder to judge.

是的。所以預付款約為 33 萬美元，我們曾經考慮過。除此之外，還有 40 萬美元，這才是真正的基礎。這些其實是我們從投資組合公司定期收到的管理費和管理費。因此，展望未來，您應該預計，根據歷史數據，每季 400,000 美元的成長約為 25,000 美元。然後是預付款費和修改費，這顯然更難判斷。

We would tell you that we saw amendment fees, labor fees sort of peak 2 quarters ago. And so it's come down precipitously over the last 2. So right, looking at the 12/31 quarter right now, there's not a whole lot of activity that way. So I wouldn't expect a significant amount there.

我們會告訴你，我們看到修改費、人工費在兩個季度前達到了高峰。因此，在過去的 2 年裡，它急劇下降。所以，從現在的 12/31 季度來看，並沒有太多的活動。所以我預計那裡的金額不會很大。

That's helpful. And last one, just looking at the Slide 14 and the 3 credits that were downgraded in the quarter. Wondering if you could add a little color there in terms of the industries, that those companies operate in? And maybe what developments in the quarter led to the downgrades.

這很有幫助。最後一張，只看投影片 14 和本季被降級的 3 學分。想知道您是否可以在這些公司所從事的行業方面添加一些色彩？也許本季的發展導致了評級下調。

Yes, especially, so there are 3 companies downgraded and 3 companies upgraded. On the downgrades, it's pretty idiosyncratic to those certain companies, one services, utilities and [legislation] management and that industry has moved a bit once in farm services and the farmers kind of delayed some of their budgeting. And so that kind of affected that business. The other recent credit run from industrial type things, but around that particular company.

是的，特別是，所以有 3 家公司降級，3 家公司升級。在降級方面，對於某些公司來說，這是相當特殊的，其中包括服務、公用事業和[立法]管理，而該行業在農業服務方面已經發生了一些變化，而農民則推遲了一些預算。這對這項業務產生了一定的影響。最近的另一筆信貸來自工業類型的事物，但圍繞著該特定公司。

So nothing really economic per se. It was encouraging this quarter of the 3 upgrades to the 2 companies that were upgraded to 2 were formerly 3. And so the credit risk improved meaningfully in both those cases. And so seeing things migrate up from struggling to performing is obviously encouraging.

所以本質上沒有什麼真正經濟的。令人鼓舞的是，本季有 3 家公司升級為 2 家，升級為 2 家，之前為 3 家。因此，這兩種情況下的信用風險都得到了顯著改善。因此，看到事情從掙扎轉向表現顯然是令人鼓舞的。

And just nice to see that the overall total rating went up even with the downgrades as you've noted, some upgrades as well. So excellent. That's all for me today.

正如您所指出的，很高興看到即使降級，整體評級仍然上升，還有一些升級。太棒了。這就是我今天的全部內容。

next question comes from Sean-Paul Adams with Raymond James.

下一個問題來自肖恩·保羅·亞當斯和雷蒙德·詹姆斯。

Just a few questions. Have you guys seen any change in types of businesses that are coming to market now versus 3 to 6 months ago, whether it be industry sectors or credit quality?

只是幾個問題。你們是否看到現在進入市場的企業類型與 3 至 6 個月前相比有什麼變化，無論是行業領域還是信用品質？

That's interesting question. Because I think -- not really on the tight companies. And the credit quality, any time you have an environment where yield in a healthy loan value multiples are about the same and leverage levels down for your loan to value on your new loans, it's come down. It's been down kind of over the last 3 or 4 -- 3 quarters anyway. That's obviously a good thing for a first lien lender. And so I'd say, quality of deals has been strong. We slightly changed this quarter, as I referenced in our remarks with the competitive landscape in the overall markets.

這是個有趣的問題。因為我認為──並不是真正針對緊張的公司。至於信貸質量，只要你所處的環境是健康貸款價值倍數的收益率大致相同，並且貸款槓桿水平下降，貸款與新貸款的價值之比就會下降。在過去的三、四個季度——至少三個季度裡，它一直在下降。對於第一留置權貸款人來說，這顯然是一件好事。所以我想說，交易品質一直都很高。正如我在評論中提到的整體市場競爭格局，本季我們略有變化。

Increased a bit, but still not back to normal levels, I would say, but it's definitely like I said in the remarks, slightly moved towards normal loans. But loan to value is still very attractive. Yields are still obviously very strong for folks like us. So I feel like it's the flow of -- deal flow has been attractive.

我想說，增加了一點，但仍然沒有回到正常水平，但這絕對像我在評論中所說的那樣，稍微朝著正常貸款邁進。但貸款價值比仍然非常有吸引力。對於我們這樣的人來說，收益率顯然仍然非常強勁。所以我覺得交易流很有吸引力。

Yes, I'm not sure if Bowen earlier, but our loan-to-value probably a year ago before was 40%. Over the last 2, 3 quarters, it was really in the 25% to 30%. Now it's ticked up between maybe 30% to 40% so still so attractive. But...

是的，我不確定鮑文是否更早，但一年前我們的貸款價值比可能是 40%。在過去的 2、3 個季度中，這一比例確實在 25% 到 30% 之間。現在它的漲幅可能在 30% 到 40% 之間，所以仍然很有吸引力。但...

Yes. Low 30s. Yes. Yes.

是的。低30歲。是的。是的。

Certainly, this last 12 to 18 months has definitely been strong in terms of tighter LTV.

當然，過去 12 到 18 個月的 LTV 確實非常強勁。

I appreciate the color. And my last question was, last quarter, you briefly touched on the 2 nonaccruals in the portfolio, I think, bringing to a total of 3 as well as your expectations for restructuring event for both by the year-end? Has there been any update on those plans? And was there any surprises on the nonaccrual performance for the quarter?

我很欣賞它的顏色。我的最後一個問題是，上個季度，您簡要談到了投資組合中的2 個非應計項目，我認為，總共3 個非應計項目，以及您對年底前這兩個項目的重組事件的預期？這些計劃有更新嗎？本季的非應計業績表現是否有任何意外？

No. I mean the restructuring, I think one of them will happen before the other one, the company that we moved to -- will be restructured probably the next couple of weeks, actually improved slightly since the end of the quarter, but it will be restructured.

不，我的意思是重組，我認為其中一個將在另一個之前發生，我們搬到的公司可能會在接下來的幾週內進行重組，實際上自本季度末以來略有改善，但它會進行重組。

The other one is a little bit unclear as far as the timing and other one because anyways, the question really is this sponsor, the quantum of dollars coming in, et cetera, some things like that, specific to that company. But one of them will be done in the next couple of weeks and the other ones 4 or 6 weeks away, maybe.

另一個就時間安排而言有點不清楚，因為無論如何，問題實際上是這個贊助商，進入的美元數量等等，諸如此類的特定於該公司的事情。但其中一項可能會在接下來的幾週內完成，其他的可能會在 4 到 6 週後完成。

Yes. And we also say one of the other portfolio companies that it wasn't upgraded or downgraded, but it's performing -- it's pretty well over the 3 quarters, we've been conservative to maintain it on nonaccrual, but there's a high chance that one of those actually is removed and probably upgraded to a 2.

是的。我們還說，其他投資組合公司之一沒有升級或降級，但它的表現很好——在過去的三個季度表現相當不錯，我們一直保守地維持非應計利潤，但很有可能其中實際上已刪除並可能升級到2。

Our next question comes from Vilas Abraham with UBS.

我們的下一個問題來自瑞銀集團的維拉斯·亞伯拉罕。

Sorry about that. I was on mute. UTI is up to $0.42 per share this quarter. Can you just discuss that trend and whether there's a range that you'd like to be on an ongoing basis? Would that...

對於那個很抱歉。我當時處於靜音狀態。本季 UTI 每股上漲 0.42 美元。您能否簡單討論一下這種趨勢以及您是否希望持續保持一個範圍？會是...

Absolutely. So I think you noted we have $0.42 at the end of the quarter. If you look at where our run rate NII is, which is around $0.67 a good run rate. But I think a question earlier in terms of the increase by 15 basis points will drive that higher over the next few quarters. Assuming rates continue to be maintained in this range, we'd expect to share half of this under distributed income to grow our UTI bucket by $0.05 a quarter.

絕對地。我想您已經注意到我們在季度末有 0.42 美元。如果您查看我們的 NII 運行率，大約 0.67 美元是一個不錯的運行率。但我認為早些時候關於升息 15 個基點的問題將在未來幾季推動這一數字走高。假設利率繼續維持在這個範圍內，我們預計將分享分配收入的一半，以使我們的 UTI 桶每季增加 0.05 美元。

So if you look ahead, that's probably, it's another $0.20 we're targeting probably having a minimum of $0.60 or more -- going forward. And we think that, that type of level will help support the $0.06 supplemental dividend that we're paying today as a minimum. There's always a possibility we would grow it. This certainly allows us to maintain that success long term into the future.

因此，如果你展望未來，我們的目標可能是另外 0.20 美元，未來可能至少為 0.60 美元或更多。我們認為，這種水準將有助於支持我們今天支付的最低 0.06 美元的補充股息。我們總是有可能種植它。這無疑使我們能夠在未來長期保持這種成功。

Okay. That's very helpful. And maybe if I could sneak just one more in here. Can you give some color on how your portfolio companies are thinking about 2024 budgeting in terms of EBITDA expectations. Is it preparing for the worst and hoping for the best kind of situation? Or is there a more sanguine way to characterize how they're thinking about things looking at it.

好的。這非常有幫助。也許如果我能再偷偷溜進這裡一次就好了。您能否介紹一下您的投資組合公司如何根據 EBITDA 預期考慮 2024 年預算？是為最壞的情況做準備並期待最好的情況嗎？或者是否有一種更樂觀的方式來描述他們對事物的看法。

Yes. I mean so just to be clear, I mean, with 91% of them being portfolio or private equity firm banks are going through the budgeting process right now. So I don't have any specific views of the actual budgets in front of us or internally necessarily yet.

是的。我的意思是為了明確起見，我的意思是，其中 91% 是投資組合或私募股權公司，銀行現在正在經歷預算流程。因此，我對我們面前或內部的實際預算還沒有任何具體的看法。

But that said, I mean, these PE firms have been working -- we all hear about all the business input costs going up across the whole economy. And the other thing going up is their interest burden. And so they've been working very diligently on streamlining every -- everywhere, all levels of the cost structure to counterbalance that. And so one would think inflation should start moderating next year. I mean, the companies have really positioned themselves well on automating where it's automating, digitizing where you can digitize and that type of thing.

但話雖如此，我的意思是，這些私募股權公司一直在運作——我們都聽說整個經濟的所有業務投入成本都在上升。另一件上升的事情是他們的利息負擔。因此，他們一直在非常努力地簡化各個地方、各個層面的成本結構，以平衡這一點。因此，人們會認為明年通膨應該會開始放緩。我的意思是，這些公司確實把自己定位在自動化的地方，在可以自動化的地方數位化，以及諸如此類的事情。

So we've got companies very efficient in my view. And so I would expect -- I don't really know what the budgets will be as a general matter. I mean the portfolio companies now are growing on an EBITDA level, kind of low single digits year-over-year and high single digits on a revenue basis year-over-year. And so they're kind of plugging along.

因此，在我看來，我們的公司非常有效率。所以我預計——我真的不知道一般情況下的預算是多少。我的意思是，投資組合公司現在的 EBITDA 水準正在成長，較去年同期較低的個位數成長，而營收的年成長則較高。所以他們有點堅持不懈。

So it will be interesting to see what the budgets look like for '24. But we haven't seen them yet, given it's obviously end of October, and they're working through right now. And I guess as we will see them, see the budget by -- certainly by the next time we talk to our shareholders. That will be early February, I guess, late January. So we will have better knowledge of that. So I would say, ask that question again next quarter, and we'll have a better view of really actually seeing budgets.

因此，看看 24 年的預算是什麼樣子將會很有趣。但我們還沒有看到他們，因為顯然已經是十月底了，而且他們現在正在工作。我想，當我們看到他們時，肯定會在我們下次與股東交談時看到預算。我想那會是二月初，一月底。所以我們對此會有更好的了解。所以我想說，下個季度再次問這個問題，我們將更了解真正的預算。

And Vilas one thing I just want to step back on is on the UTI, the other part of our UTI balance on top of just the undistributed earnings is realized gains that will harvest in the future, when I notice the $0.60, that's probably a minimum number because we do anticipate being able to harvest gains in 2024.

維拉斯，我只想談一談 UTI，除了未分配收益之外，我們 UTI 餘額的另一部分是未來將收穫的已實現收益，當我注意到 0.60 美元時，這可能是最低限度這個數字是因為我們確實預計能夠在2024 年獲得收益。

That concludes the question-and-answer session. At this time, I would like to turn it back to Bowen Diehl for closing remarks.

問答環節到此結束。此時，我想請鮑文·迪爾 (Bowen Diehl) 致閉幕詞。

Great. Thank you, operator, and thanks, everyone, for joining us. As always, we enjoy giving updates on the company and things are going well, and we appreciate all of y'all support. We will talk to you next quarter.

偉大的。謝謝運營商，也謝謝大家加入我們。一如既往，我們很高興提供有關公司的最新信息，一切進展順利，我們感謝大家的支持。我們將在下個季度與您交談。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。