FS KKR Capital Corp (FSK) 2023 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to FS KKR Capital Corporation's Fourth Quarter and Full Year 2023 Earnings Conference Call. (Operator Instructions) Please note that this conference is being recorded. At this time, Robert Paun, Head of Investor Relations, will proceed with the introduction. Mr. Paun, you may begin.

早安，女士們，先生們。歡迎參加 FS KKR Capital Corporation 2023 年第四季和全年財報電話會議。（操作員說明）請注意，本次會議正在錄製中。以下由投資者關係主管Robert Paun進行介紹。潘先生，您可以開始了。

Thank you. Good morning, and welcome to FS KKR Capital Corp fourth quarter and full year 2023 earnings conference call. Please note that FS KKR Capital Corp may be referred to as FSK, the fund or the company throughout the call. Today's conference call is being recorded and an audio replay of the call will be available for 30 days. Replay information is included in a press release that FSK issued yesterday.

謝謝。早安，歡迎參加 FS KKR Capital Corp 第四季和 2023 年全年財報電話會議。請注意，在整個電話會議中，FS KKR Capital Corp 可能被稱為 FSK、基金或公司。今天的電話會議正在錄音，電話會議的音訊重播將保留 30 天。重播訊息包含在 FSK 昨天發布的新聞稿中。

In addition, FSK has posted on its website a presentation containing supplemental financial information with respect to its portfolio and financial performance for the quarter ended December 31, 2023. A link to today's webcast and the presentation is available on the Investor Relations section of the company's website under Events and Presentations. Please note that this call is the property of FSK. Any unauthorized rebroadcast of this call in any form is strictly prohibited.

此外，FSK 還在其網站上發布了一份演示文稿，其中包含有關其截至 2023 年 12 月 31 日的季度投資組合和財務業績的補充財務資訊。今天的網路廣播和簡報的連結可在公司網站投資者關係部分的「活動和簡報」下找到。請注意，此呼叫屬於 FSK 的財產。嚴禁以任何形式未經授權轉播本次通話。

Today's conference call includes forward-looking statements and are subject to risks and uncertainties, it could affect FSK or the economy generally. We ask that you refer to FSK's most recent filings with the SEC for important factors and risks that could cause actual results or outcomes to differ materially from these statements. FSK does not undertake to update its forward-looking statements unless required to do so by law.

今天的電話會議包含前瞻性陳述，並受到風險和不確定性的影響，可能會影響 FSK 或整體經濟。我們要求您參考 FSK 最近向 SEC 提交的文件，以了解可能導致實際結果或成果與這些聲明有重大差異的重要因素和風險。除非法律要求，否則 FSK 不承諾更新其前瞻性聲明。

In addition, this call will include certain non-GAAP financial measures. For such measures, reconciliations to the most directly comparable GAAP measures can be found in FSK's fourth quarter earnings release that was filed with the SEC on February 25, 2024. Non-GAAP information should be considered supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly named measures reported by other companies. To obtain copies of the company's latest SEC filings, please visit FSK's website.

此外，本次電話會議還將包括某些非公認會計準則財務指標。對於此類指標，可以在 FSK 於 2024 年 2 月 25 日向 SEC 提交的第四季度收益報告中找到與最直接可比較的 GAAP 指標的對帳。非 GAAP 資訊本質上應被視為補充訊息，不應被孤立地考慮或作為根據 GAAP 準備的相關財務資訊的替代品。此外，這些非公認會計原則財務指標可能與其他公司報告的類似名稱的指標不同。若要取得該公司最新 SEC 備案文件的副本，請造訪 FSK 網站。

Speaking on today's call will be Michael Forman, Chief Executive Officer, and Chairman; Dan Pietrzak, Chief Investment Officer, and Co-President; Brian Gerson, Co-President; and Steven Lilly, Chief Financial Officer. Also joining us in the room are Co-Chief Operating Officers, Drew O’Toole, and Ryan Wilson. I will now turn the call over to Michael.

執行長兼董事長 Michael Forman 將在今天的電話會議上發言。 Dan Pietrzak，首席投資長兼聯合總裁；布萊恩‧格森，共同總裁；和財務長史蒂文·禮來（Steven Lilly）。加入我們會議室的還有聯合營運長德魯·奧圖爾 (Drew OâToole) 和瑞安·威爾遜 (Ryan Wilson)。我現在將把電話轉給邁克爾。

Thank you, Robert, and good morning, everyone. Thank you all for joining us for FSK's Fourth Quarter and Full Year 2023 Earnings Conference Call. During 2023, FSK accomplished many key objectives. First, our total investment income grew approximately 12% year-over-year. Second, our adjusted net investment income per share increased by approximately 6% year-over-year. Third, for the full year, FSK generated an ROE of 10%. Fourth, we pay $2.95 per share in total distributions in 2023, representing an 11% increase over distributions paid in 2022, equating to a 12% yield on our average net asset value during the year.

謝謝羅伯特，大家早安。感謝大家參加 FSK 2023 年第四季和全年財報電話會議。2023 年，FSK 實現了許多關鍵目標。首先，我們的總投資收益年增約12%。其次，調整後每股淨投資收益較去年同期成長約6%。第三，FSK全年的淨資產收益率為10%。第四，我們在 2023 年支付的股息總額為每股 2.95 美元，比 2022 年支付的股息增加了 11%，相當於我們當年平均資產淨值的收益率為 12%。

Fifth, we continued to optimizing our capital structure by amending and upsizing our revolver in October and issuing [$400 million] of unsecured notes in early November.

第五，我們繼續優化資本結構，在 10 月修改和擴大了我們的左輪手槍，並在 11 月初發行了[4 億美元]無擔保票據。

In terms of our fourth quarter results, we generated net investment income totaling $0.71 per share and adjusted net investment income totaling $0.75 per share.

就第四季業績而言，我們產生的淨投資收益總計為每股 0.71 美元，調整後的淨投資收益總計為每股 0.75 美元。

During the fourth quarter, our investment team originated approximately $680 million of new investments resulting in net portfolio growth of approximately $162 million. Our net asset value declined by 1.7% for the quarter, primarily due to specific challenges associated with a few credits, which we will discuss in more detail later in the call.

第四季度，我們的投資團隊發起了約 6.8 億美元的新投資，導致投資組合淨成長約 1.62 億美元。本季我們的淨資產價值下降了 1.7%，主要是由於與一些信貸相關的具體挑戰，我們將在稍後的電話會議中更詳細地討論這些挑戰。

From a liquidity perspective, we ended the quarter with approximately $3.9 billion of available liquidity. Based upon our overall operating results our Board has declared a first quarter distribution of $0.7 per share, consisting of our base distribution of $0.64 per share and a supplemental distribution of $0.06 per share. Also, as we mentioned on our last earnings call, in early November, our Board declared a special distribution totaling $0.1 per share.

從流動性角度來看，本季末我們的可用流動性約為 39 億美元。根據我們的整體經營業績，我們的董事會宣布第一季分配每股 0.7 美元，其中包括每股 0.64 美元的基本分配和每股 0.06 美元的補充分配。此外，正如我們在 11 月初的上次財報電話會議上提到的，我們的董事會宣布進行每股 0.1 美元的特別分配。

This special distribution we paid in two equal installments of $0.05 per share in the first and second quarters of this year, and while we paid, in addition to our quarterly base and supplemental distributions. Based on the continued trajectory of the company's earnings power, coupled with our view that interest rate reductions will be more muted than some market participants expect, we are pleased to provide forward-looking dividend guidance for the full year 2024.

我們在今年第一季和第二季分兩期等額支付了每股 0.05 美元的特別分配，同時我們也支付了季度基本分配和補充分配。基於公司獲利能力的持續發展軌跡，加上我們認為降息幅度將比一些市場參與者預期的更為溫和，我們很高興為 2024 年全年提供前瞻性股息指引。

As we currently expect, our base and supplemental distributions will total at least $0.7 per share per quarter throughout the year. Combining our $0.7 per share quarterly distributions for the full year, with our [$0.25] per share special distributions to be paid during February, May, investors should expect to receive a minimum of $2.90 per share of total distributions during 2024.

正如我們目前預計的那樣，我們全年每季的基本分配和補充分配總計至少為每股 0.7 美元。結合我們全年每股0.7 美元的季度分配，以及我們將在2 月、5 月期間支付的每股[0.25 美元] 特別分配，投資者預計在2024 年期間將至少收到每股2.90 美元的總分配。

This equates to an 11.9% yield on our current net asset value and an annualized yield of approximately 14.3% based on our recent share price. While Dan will discuss the current market environment in greater detail, we continue to be optimistic about the significant growth trends within the private credit sector, which we believe will provide meaningful benefits for our industry for many years to come.

這相當於我們目前資產淨值的 11.9% 收益率，以及根據我們近期股價計算的年化收益率約為 14.3%。雖然丹將更詳細地討論當前的市場環境，但我們仍然對私人信貸行業的顯著增長趨勢持樂觀態度，我們相信這將在未來許多年為我們的行業帶來有意義的利益。

And with that, I'll turn the call over to Dan and the team to provide additional color on the market and the quarter.

接下來，我會將電話轉給 Dan 和團隊，以提供有關市場和本季的更多資訊。

Thanks, Michael. Looking back on 2023, I am pleased with the results for FSK. As we produced an ROE of 10%, and we continued to take positive steps rotating our investment portfolio.

謝謝，麥可。回顧 2023 年，我對 FSK 的結果感到滿意。當我們的股本回報率達到 10% 時，我們繼續採取積極措施輪換我們的投資組合。

Looking back on the last six years since the establishment of the FS KKR Advisor, I take great pride in the team's accomplishments as well as the continued growth of the KKR Credit platform, which has current assets under management of $219 billion.

回顧 FS KKR Advisor 成立以來的六年，我對團隊的成就以及 KKR Credit 平台的持續成長感到非常自豪，平台管理的流動資產達 2,190 億美元。

Within FSK, we've originated over $22 billion of new investments. And we have an annualized depreciation rate, which includes both realized and unrealized amounts of less than 50 basis points.

在 FSK 內部，我們發起了超過 220 億美元的新投資。我們的年折舊率包括低於 50 個基點的已實現和未實現金額。

In terms of the current economic and market environment, with US inflation beginning to stabilize, combined with significant private equity dry powder, pent-up demand from an [M&A] perspective, as well as the desire for private equity fund LPs to see a higher level of return of capital. We expect to see a material increase in private market transaction activity during 2024, which we believe will be weighted towards the second half of the year.

就當前經濟市場環境而言，美國通膨開始企穩，加上私募乾粉較多，併購角度被壓抑的需求，以及私募基金LP希望看到更高的回報。資本回報水準。我們預計 2024 年私募市場交易活動將大幅增加，我們認為這一趨勢將在今年下半年增加。

As Michael mentioned, private credit continues to be an exceptionally attractive asset class due to its directly negotiated transactions, attractive total returns, and significant issuer diversification. As a result, even if the syndicated debt markets become more active during 2024, which we expect they will. We believe private credit structures will continue to be one of the primary avenues for many sponsors as there is an increasing desire for sponsors to know their lenders. With that said, we are seeing spread compression in the upper end of the middle market with spreads back to January 2022 levels.

正如邁克爾所提到的，由於其直接協商交易、有吸引力的總回報以及發行人的顯著多元化，私人信貸仍然是一種極具吸引力的資產類別。因此，即使銀團債務市場在 2024 年變得更加活躍（我們預計它們會變得更加活躍）。我們相信，私人信貸結構將繼續成為許多發起人的主要途徑之一，因為發起人越來越希望了解其貸方。話雖如此，我們看到中端市場高端的價差壓縮，價差回到 2022 年 1 月的水平。

In addition, still elevated interest rates, supply chain disruptions due to the Middle East crisis and inventory destocking could potentially lead to a slowdown in economic growth. These market inputs will require borrowers and lenders to remain cautious during the coming quarters.

此外，利率仍然居高不下、中東危機造成的供應鏈中斷以及去庫存可能會導致經濟成長放緩。這些市場投入將要求借款人和貸款人在未來幾季保持謹慎。

In terms of our most recent results, this macro backdrop created challenges for a few of our portfolio companies during the fourth quarter, specifically Miami Beach Medical Group and Reliant Rehab, [Q&A] as we have discussed on prior calls continue to be affected by higher wage pressures and a challenging Medicare reimbursement environment. And while we do not have any meaningful additional exposure to Medicare reimbursement dependent companies, both of these issuers were placed on nonaccrual during the fourth quarter.

就我們最新的業績而言，這種宏觀背景在第四季度給我們的一些投資組合公司帶來了挑戰，特別是邁阿密海灘醫療集團和Reliant Rehab，[問答]正如我們之前討論的那樣，我們之前的電話繼續受到更高的影響工資壓力和充滿挑戰的醫療保險報銷環境。儘管我們對依賴醫療保險報銷的公司沒有任何有意義的額外風險，但這兩家發行人在第四季度都被置於非應計利息上。

Additionally, late in the fourth quarter, we received an update from [Kellen Meyer], Burger and services, another name we have discussed on prior earnings calls, which showed a material deterioration and the company's forward earning projections. KBS is a labor intensive facilities, maintenance business and the impact of higher interest rates, wage inflation and a loss of certain customers has resulted in restructuring discussions.

此外，在第四季度末，我們收到了來自[Kellen Meyer]、Burger and services（我們在之前的財報電話會議上討論過的另一個名字）的最新消息，該消息顯示了實質性惡化和公司的預期獲利預測。KBS 是一家勞力密集的設施、維護業務，利率上升、工資上漲和某些客戶流失的影響導致了重組討論。

The first step of the restructuring was completed during the fourth quarter, which resulted in a portion of our investment in KBS being placed on non-accrual. We expect the full restructuring to occur in the near term. Our workout team has been active on these names for some time. And as Brian will discuss, they have achieved positive results, including significant principal paydowns at par and meaningful progress towards debt restructuring.

重組的第一步已於第四季完成，這導致我們對 KBS 的部分投資轉為非應計專案。我們預計全面重組將在短期內進行。一段時間以來，我們的健身團隊一直在積極研究這些名字。正如布萊恩將討論的那樣，他們取得了積極的成果，包括按面值償還大量本金以及在債務重組方面取得有意義的進展。

Turning to investment activity, during the fourth quarter, we originated $680 million of new investments. Approximately 58% of our new investments were focused on add-on financings to existing portfolio companies and long-term KKR relationships. Our new investments combined with $518 million of net sales and repayments when factoring in sales to our joint venture equated to a net portfolio increase of $162 million.

談到投資活動，第四季我們發起了 6.8 億美元的新投資。我們約 58% 的新投資集中在現有投資組合公司和長期 KKR 關係的額外融資。考慮到對合資企業的銷售，我們的新投資加上 5.18 億美元的淨銷售額和還款，相當於投資組合淨增加 1.62 億美元。

We are pleased with the quality of our new originations. During the fourth quarter, our direct lending investments had a weighted average EBITDA of approximately $250 million, 5.3 times leverage through our security and a 60% equity contribution, all with a weighted average coupon of approximately [so for] plus 600.

我們對新產品的品質感到滿意。第四季度，我們的直接貸款投資的加權平均 EBITDA 約為 2.5 億美元，透過我們的證券槓桿率為 5.3 倍，股權出資為 60%，所有加權平均票息約為 [so for]+ 600。

We also continue to see very attractive opportunities at asset-based finance with our investments this quarter having a weighted average projected IRR of approximately 14%. One asset-based finance investment worth noting is vehicle Secured Funding Trust, which is an approximately $7 billion secured portfolio of super-prime RV loans that we purchased from the Bank of Montreal.

我們也繼續看到資產融資領域非常有吸引力的機會，本季我們的投資的加權平均預計 IRR 約為 14%。值得注意的一項基於資產的金融投資是車輛擔保融資信託，這是我們從蒙特利爾銀行購買的約 70 億美元的超級房車貸款擔保投資組合。

Given the scale of our asset-based finance business and the experience of the team, we will a -- we were able to acquire this high-quality loan portfolio on attractive terms. While the macro backdrop suggests a continued uncertain economic environment in 2024, we continue to see portfolio company revenue and earnings growth.

考慮到我們基於資產的金融業務的規模和團隊的經驗，我們將能夠以有吸引力的條件獲得這個高品質的貸款組合。儘管宏觀背景顯示 2024 年經濟環境仍存在不確定性，但我們仍看到投資組合公司的收入和獲利成長。

We remain focused on large, high-quality borrowers with strong operating margins and significant equity cushions. The weighted average EBITDA of our portfolio companies was $236 million as of December 31, 2023. Additionally, our portfolio companies reported a weighted average year-over-year EBITDA growth rate of approximately 6% across companies in which we have invested in since April of 2018.

我們仍專注於擁有強勁營業利潤和顯著股本緩衝的大型優質借款人。截至 2023 年 12 月 31 日，我們投資組合公司的加權平均 EBITDA 為 2.36 億美元。此外，我們的投資組合公司自 2018 年 4 月以來投資的公司中，加權平均 EBITDA 成長率約為 6%。

And with that, I'll turn the call over to Brian to discuss our portfolio in more detail.

接下來，我會將電話轉給布萊恩，更詳細地討論我們的投資組合。

Thanks, Dan. As of December 31, 2023, our investment portfolio had a fair value of $14.6 billion, consisting of 204 portfolio companies. This compares to a fair value of $14.7 billion and 200 portfolio companies as of September 30, 2023.

謝謝，丹。截至2023年12月31日，我們的投資組合公允價值為146億美元，由204家投資組合公司組成。相較之下，截至 2023 年 9 月 30 日，其投資組合公司的公允價值為 147 億美元，投資組合公司數量為 200 家。

At the end of the fourth quarter, our 10 largest portfolio companies represented approximately 19% of the fair value of our portfolio, which consists -- which is consistent with prior quarters. We continue to focus on senior secured investments as our portfolio consists of approximately 58% First-Lien Loans and 66% Senior Secured Debt as of December 31.

截至第四季末，我們最大的 10 家投資組合公司約占我們投資組合公允價值的 19%，這與前幾季一致。我們繼續專注於優先擔保投資，因為截至 12 月 31 日，我們的投資組合由約 58% 的第一留置權貸款和 66% 的優先擔保債務組成。

In addition, our joint venture represented 9.5% of the fair value of our portfolio. As a result when investors consider our entire portfolio, looking through to the investments in our joint venture then First-Lien Loans, total approximately 67% of our total portfolio and Senior Secured Investments totaled approximately 75% of our portfolio as of December 31.

此外，我們的合資企業占我們投資組合公允價值的9.5%。因此，當投資者考慮我們的整個投資組合時，請查看我們合資企業的投資，然後是第一留置權貸款，截至12 月31 日，總計約占我們投資組合總額的67%，高級擔保投資總計約占我們投資組合的75%。

The weighted average yield on accruing debt investments was 12.2% as of December 31, 2023, which was flat compared to the yield as of September 30. As a reminder, the calculation of weighted average yield is adjusted to exclude the accretion associated with the merger with FSKR. Including effects for our investment activity during the fourth quarter as of December 31, 2023, approximately 80% -- [87%] of our total investment portfolio is comprised of investments originated either by KKR Credit for the FS KKR Advisor.

截至2023年12月31日，應計債務投資的加權平均收益率為12.2%，與截至9月30日的收益率持平。提醒一下，加權平均收益率的計算進行了調整，以排除與 FSKR 合併相關的增量。包括截至 2023 年 12 月 31 日第四季對我們投資活動的影響，我們總投資組合的約 80% - [87%] 由 KKR Credit 為 FS KKR Advisor 發起的投資組成。

From a nonaccrual perspective, as of the end of the fourth quarter, our nonaccruals represented approximately 8.9% of our portfolio on a cost basis and 5.5% of our portfolio on a fair value basis. We believe it is also helpful to provide the market with information based on the assets originated by KKR credit. As of the end of the fourth quarter, nonaccruals related to the 87% of our total portfolio, which has been originated by KKR Credit and the FS KKR Advisor were 5.1% on a cost basis and 2.6% on a fair value basis. During the fourth quarter, we placed five investments on nonaccrual with a combined cost and fair value of $654 million and $422 million, respectively.

從非應計項目角度來看，截至第四季末，我們的非應計項目以成本計算約佔投資組合的 8.9%，以公允價值計算約佔投資組合的 5.5%。我們認為，向市場提供基於 KKR 信貸來源的資產的資訊也很有幫助。截至第四季末，與我們總投資組合 87%（由 KKR Credit 和 FS KKR Advisor 發起）相關的非應計費用按成本計算為 5.1%，以公允價值計算為 2.6%。第四季度，我們進行了五項非應計投資，總成本和公允價值分別為 6.54 億美元和 4.22 億美元。

The credit stress we have seen in these names primarily relates to the factors that Dan mentioned earlier. Specifically, Miami Beach Medical Group and Reliant Rehab continue to be affected by higher wage pressures and a challenging Medicare reimbursement environment. Miami Beach is the second largest independent provider of capitated primary care services to Medicare Advantage plans in South Florida.

我們在這些名稱中看到的信用壓力主要與丹之前提到的因素有關。具體來說，邁阿密海灘醫療集團和 Reliant Rehab 繼續受到工資壓力上升和醫療保險報銷環境挑戰的影響。邁阿密海灘是南佛羅裡達州 Medicare Advantage 計劃中第二大按人頭初級保健服務的獨立提供者。

Reliant is hired by skilled nursing facilities to provide outsourced physical and occupational therapy and has also been impacted by a post COVID environment where skilled nursing facilities are more reluctant to bring outside personnel into their facilities.

Reliant 受熟練護理機構聘用，提供外包物理和職業治療，也受到新冠疫情后環境的影響，熟練護理機構更不願意將外部人員帶入其設施。

During the fourth quarter, we restructured our line, $125 million First-Lien term loan into a cash pay $62.5 million first-out term loan and a $62.5 million second-out term loan, which was placed on nonaccrual. Due to the proactive work of the KKR workout team, to date, we have received par paydowns of over $100 million in Reliant Rehab and $75 million on Miami Beach.

在第四季度，我們將 1.25 億美元的第一留置權定期貸款重組為現金支付的 6,250 萬美元的先出定期貸款和 6,250 萬美元的次出定期貸款，該貸款為非應計利息。由於 KKR 鍛鍊團隊的積極工作，迄今為止，我們已在 Reliant Rehab 獲得超過 1 億美元的平價付款，在邁阿密海灘獲得 7,500 萬美元的平價付款。

KBS is a labor-intensive Facilities Maintenance business and the impact of higher interest rates, wage inflation and the loss of certain customers has resulted in restructuring discussions. The first step of the restructuring was completed during the fourth quarter, which resulted in our $366 million First-Lien Loan exposure being restructured into $166 million, first-out and a $200 million second-out term loan with the second-out investment in KBS being placed on nonaccrual.

KBS 是一家勞力密集的設施維護業務，利率上升、工資上漲和某些客戶流失的影響導致了重組討論。重組的第一步已於第四季度完成，這導致我們的3.66 億美元第一留置權貸款敞口被重組為1.66 億美元的先出貸款和2 億美元的次出定期貸款，其中第二次出的貸款投資於KBS被置於非應計制。

We expect a full consensual restructuring to occur in the near term which will result in the lenders equitizing a portion of the second out and taking control of the company.

我們預計，全面的、雙方同意的重組將在短期內進行，這將導致貸方將第二家的一部分股權化，並控制該公司。

Our First-Lien position and sleeping Corp of America, which is the largest outsource provider of street and parking lot sweeping services in the US was placed on nonaccrual due to poor integration of add-on acquisitions and higher than expected customer churn following price increase. We are actively negotiating the sponsor regarding restructuring, which will result in the sponsor, investing a meaningful amount of equity into the company and the majority of the position going back on accrual.

我們的第一留置權地位和沈睡的美國公司（美國最大的街道和停車場清掃服務外包提供商）由於附加收購整合不力以及價格上漲後的客戶流失率高於預期而被置於非應計利潤狀態。我們正在積極與保薦人就重組事宜進行談判，這將導致保薦人向公司投資大量股權，而大部分部位將恢復應計。

Additionally, our preferred stock position in JW Aluminum was placed on nonaccrual based on the company's total enterprise value, contributing $215 million of cost and $149 million of fair value to our portfolio. JW Aluminum continues to perform well with strong EBITDA growth. However, given our preferred equity position, our current view of enterprise value does not support continuing to accrue on the name.

此外，我們在 JW Aluminium 的優先股根據該公司的企業總價值被設定為非應計利息，為我們的投資組合貢獻了 2.15 億美元的成本和 1.49 億美元的公允價值。JW Aluminium 繼續表現良好，EBITDA 強勁成長。然而，考慮到我們的優先股權地位，我們目前對企業價值的看法並不支持繼續增加這個名稱。

In terms of one other portfolio update, [solara] a borrower would switch to pick accrual from cash accrual two quarters ago returned to cash accrual as expected during the fourth quarter. This change accounted for the majority of the reduction in our [PIC] interest income recognized during the quarter.

就另一項投資組合更新而言，[solara] 借款人將從兩個季度前的現金應計中選擇應計，並按預期在第四季度恢復現金應計。這項變更是我們本季確認的 [PIC] 利息收入減少的主要原因。

And with that, I'll turn the call over to Steven to go through our financial results.

接下來，我會將電話轉給史蒂文，讓他查看我們的財務表現。

Thanks, Brian. Our total investment income decreased by $18 million quarter-over-quarter to $447 million, primarily due to the specific portfolio company results, Dan and Brian mentioned, as well as lower quarterly asset-based finance dividends.

謝謝，布萊恩。Dan 和 Brian 提到，我們的總投資收入環比下降 1800 萬美元，至 4.47 億美元，這主要是由於特定投資組合公司的業績，以及基於資產的季度財務股息的減少。

The primary components of our total investment income during the quarter were as follows. Total interest income was $368 million, a decrease of $6 million quarter-over-quarter. Dividend and fee income totaled $79 million, a decrease of $12 million quarter-over-quarter.

本季我們總投資收益的主要組成部分如下。利息收入總額為3.68億美元，季減600萬美元。股息和費用收入總計 7,900 萬美元，季減 1,200 萬美元。

Our total dividend and fee income during the quarter is summarized as follows. $51 million of recurring dividend income from our joint venture, other dividends from various portfolio companies totaling approximately $16 million during the quarter and fee income totaling approximately $12 million during the quarter.

我們本季的股利和費用總收入總結如下。本季來自我們合資企業的經常性股息收入為 5,100 萬美元，來自各個投資組合公司的其他股息總計約 1,600 萬美元，本季的費用收入總計約 1,200 萬美元。

Our interest expense totaled $118 million, an increase of $1 million quarter-over-quarter, and our weighted average cost of debt was 5.4% as of December 31. Management fees totaled $56 million, unchanged quarter-over-quarter and incentive fees totaled $41 million, a decrease of $6 million quarter-over-quarter. Other expenses totaled $10 million during the fourth quarter, a decrease of $1 million.

截至 12 月 31 日，我們的利息支出總計 1.18 億美元，季增 100 萬美元，加權平均債務成本為 5.4%。管理費總計 5,600 萬美元，環比不變；獎勵費總計 4,100 萬美元，季減 600 萬美元。第四季其他費用總計 1,000 萬美元，減少 100 萬美元。

A detailed bridge in our net asset value per share on a quarter-over-quarter basis is as follows. Our ending Q3, 2023 net asset value per share of $24.89. It was increased by GAAP net investment income of $0.71 per share and was decreased by $0.39 per share due to a decrease in the overall value of our investment portfolio.

我們每股資產淨值環比的詳細情況如下。2023 年第三季末每股資產淨值為 24.89 美元。 GAAP 淨投資收益增加了每股 0.71 美元，但由於我們投資組合整體價值的下降，每股淨投資收益減少了 0.39 美元。

Our net asset value per share was reduced by our $0.7 per share quarterly distribution and the $0.05 per share special distribution. Some of these activities results in our December 31, 2023, net asset value per share of $24.46.

我們的每股淨值因每股 0.7 美元的季度分配和每股 0.05 美元的特別分配而減少。其中一些活動導致我們截至 2023 年 12 月 31 日的每股資產淨值為 24.46 美元。

From a forward-looking guidance perspective, we expect first quarter 2024 GAAP net investment income to approximate $0.73 per share and we expect our adjusted net investment income to approximate $0.71 per share.

從前瞻性指引角度來看，我們預計 2024 年第一季 GAAP 淨投資收益約為每股 0.73 美元，調整後淨投資收益約為每股 0.71 美元。

Detailed first quarter guidance is as follows. Our recurring interest income on a GAAP basis is expected to approximate $348 million. We expect recurring dividend income associated with our joint venture to approximate $51 million. We expect other fee and dividend income to approximate $30 million during the first quarter.

詳細的第一季指引如下。根據 GAAP 計算，我們的經常性利息收入預計約為 3.48 億美元。我們預計與合資企業相關的經常性股息收入約為 5,100 萬美元。我們預計第一季的其他費用和股息收入約為 3000 萬美元。

From an expense standpoint, we expect our management fees to approximate $55 million. We expect incentive fees to approximate $42 million. We expect our interest expense to approximate $117 million, and we expect other G&A expenses to approximate $10 million. And as Michael indicated during his remarks, we currently expect our distributions during the year will total at least $2.90 per share, comprised of $2.80 per share of quarterly distributions and $0.1 per share of special distributions during the first half of the year.

從費用角度來看，我們預計管理費約為 5,500 萬美元。我們預計獎勵費用約為 4200 萬美元。我們預計利息支出約為 1.17 億美元，其他一般管理費用約為 1,000 萬美元。正如麥可在演講中指出的那樣，我們目前預計今年的分配總額將至少為每股 2.90 美元，其中包括每股 2.80 美元的季度分配和上半年每股特別分配 0.1 美元。

Our gross and net debt to equity levels were 120% and 113%, respectively at December 31, 2023, compared to 115% and 110% as of September 30, 2023. At December 31, our available liquidity was $3.9 billion and approximately 63% of our drawn balance sheet and 44% of our committed balance sheet was comprised of unsecured debt.

截至2023年12月31日，我們的總負債與股本水準分別為120%及113%，截至2023年9月30日為115%及110%。截至 12 月 31 日，我們的可用流動資金為 39 億美元，我們提款資產負債表的約 63% 和承諾資產負債表的 44% 由無擔保債務組成。

Additionally, in November, we issued $400 million of 7.875% unsecured notes due 2029, further enhancing our balance sheet and liquidity position and extending our maturity ladder.

此外，11 月，我們發行了 4 億美元、2029 年到期、利率為 7.875% 的無擔保票據，進一步改善了我們的資產負債表和流動性狀況，並延長了我們的期限階梯。

And with that, I'll turn the call back to Michael for a few closing remarks before we open the call for questions.

接下來，在我們開始提問之前，我會把電話轉回邁克爾，讓他做一些總結發言。

Thanks, Steven. In 2023 FSK shareholders earned a total return of over 30% and from a forward-looking perspective, giving our earnings prospect for the year, we believe we'll continue to provide shareholders with an attractive distribution and total return in 2024.

謝謝，史蒂文。2023年FSK股東獲得了超過30%的總回報，從前瞻性的角度來看，考慮到我們今年的獲利前景，我們相信我們將在2024年繼續為股東提供有吸引力的分配和總回報。

And while we were disappointed with the challenged credits during the fourth quarter, the temporary loss of revenue associated with these companies does not alter the long-term view of our ability to continue to provide investors with an above-average dividend yield going forward. On behalf of our team, we thank you all for joining the call and for your continued support. And with that, operator, we'd like to open the call for questions.

儘管我們對第四季度的信貸挑戰感到失望，但與這些公司相關的暫時收入損失並沒有改變我們對未來繼續為投資者提供高於平均水平的股息收益率的能力的長期看法。我們謹代表我們的團隊感謝大家加入此次電話會議並給予我們持續的支持。接線員，我們現在開始提問。

(Operator Instructions) John Hecht from Jefferies.

（操作員說明）Jefferies 的 John Hecht。

Hey, guys, good morning. Thanks for taking my questions. Just on credit, maybe could you just give us an update on Global Jet and then maybe talk about -- kind of the pipeline of credit as you see other companies within the portfolio that are exposed to either wage pressures or interest rate pressures and given that inflation and rates are now stabilizing, are those types of issues starting to stabilize as well?

嘿，夥計們，早安。感謝您回答我的問題。就信貸而言，也許您可以向我們介紹Global Jet 的最新情況，然後也許可以談談信貸管道，因為您看到投資組合中的其他公司面臨工資壓力或利率壓力，並考慮到這一點點通貨膨脹和利率現已穩定，這些類型的問題是否也開始穩定？

Yeah, good morning, John. Maybe starting with Global Jet, it's a fair question -- it is a decent size position. It is a name that is on nonaccrual. I think it's just north of 2% of the nonaccrual balance. I think on the positive side of the story that the business continues to perform quite well. I think there's actually not an even delinquent sort of line item in their entire leasing or sort of loan book. So the management team there has done a very good job. That market has held up quite well. As you recall, that's more of a [fenco] who does loan and leasing to the private jet space, which has had no upon intended a good sort of tailwind behind it in the last several years.

是的，早上好，約翰。也許從 Global Jet 開始，這是一個公平的問題——這是一個不錯的規模位置。這是一個非應計名稱。我認為這略高於非應計餘額的 2%。我認為從積極的一面來看，該業務繼續表現良好。我認為在他們的整個租賃或貸款簿中實際上沒有任何拖欠的項目。所以那裡的管理團隊做得非常好。該市場一直表現良好。正如您所記得的那樣，這更像是一個向私人飛機領域提供貸款和租賃的[fenco]，而在過去的幾年裡，私人飛機領域並沒有帶來良好的推動力。

Yeah, I think on the credit side, it's obviously sort of a tough quarter with some of these names. I mean, you have some sector issues with the Medicare reimbursement space. You've got kind of wage inflation a bit of a common theme. We haven't necessarily seen that update yet. I think we are kind of cautious on kind of macro sort of generally, yeah, I think this the rates for our sort of higher will continue to put kind of free cash flow stress on companies.

是的，我認為從信用方面來看，對於其中一些名字來說，這顯然是一個艱難的季度。我的意思是，醫療保險報銷空間存在一些部門問題。薪資上漲是一個共同的主題。我們還不一定看到更新。我認為我們對宏觀方面持謹慎態度，是的，我認為我們較高的利率將繼續給公司帶來一定的自由現金流壓力。

I think those who have the big wage footprint could be a challenge. But I think we are seeing revenue growth across the portfolio. I think there's always going to be a watch list and credit business of kind of names on it, but there's not really much in the near term sort of watch list that probably has us sort of focused other than the names that were sort of talking about sort of here on the call today.

我認為那些工資足跡大的人可能是一個挑戰。但我認為我們看到整個投資組合的收入成長。我認為總會有一個觀察名單和信貸業務的名字，但在短期內，除了我們正在談論的名字之外，可能沒有太多讓我們關注的觀察名單。今天就在電話會議上。

So yeah, I guess just like somebody Global Jet comp feels in a pretty good spot from just an overall credit perspective and kind of mindful about risk. But the rest of the portfolio feels okay.

所以，是的，我想就像 Global Jet 公司從整體信用角度來看處於一個非常好的位置，並且對風險有所關注。但投資組合的其餘部分感覺還不錯。

That's helpful. And then just thinking about 2024, I guess, kind of balancing your cautious outlook along with the other side of the story, which is that there's the deal environment, it looks like it's improving over the course of the year, given that -- I guess, the private equity framework out there, kind of -- maybe balanced your kind of your perspectives on -- So the leverage that you're willing to put on the book relative to where you are now and then maybe thinking about interest rates, kind of your willingness or your appetite to use the revolver to fund growth relative to other sources of capital?

這很有幫助。然後想想 2024 年，我想，平衡你的謹慎前景和故事的另一面，那就是交易環境，看起來它在這一年中正在改善，考慮到——我猜測，那裡的私募股權框架，可能會平衡你的觀點，所以你願意在這本書上相對於你現在的情況以及可能考慮利率的槓桿作用，相對於其他資本來源，您是否願意或有興趣使用左輪手槍為增長提供資金？

Yeah. I mean, a couple of questions in there. I mean, I guess first and foremost, we're not going to change, I think sort of our leverage target, right? I think we feel comfortable with that side of the range we talked about. I think kind of [11372], [118212] feels like a good number. So yeah, we do have some room for some growth, but I think want to be mindful about going above any sort of target there.

是的。我的意思是，裡面有幾個問題。我的意思是，我想首先也是最重要的是，我們不會改變我們的槓桿目標，對吧？我認為我們對我們所討論的範圍的這一面感到滿意。我認為 [11372]、[118212] 感覺像是一個不錯的數字。所以，是的，我們確實有一些成長的空間，但我認為要注意超越任何目標。

The deal environment, we are expecting more robust deal flow just generally in private markets. Obviously, M&A has been quite slow now for approaching two years. You do have, I think, a bit of a situation out there where your LPs and private equity funds are looking for return of capital. So there is some pressure on what I'd call the selling side and there remains a fair amount of dry powder on the buying side. And I think the market has been waiting for you -- I believe that inflation has kind of stabilized, which I think [broadstroke] would agree with that. I think you're still going to see it in sort of some spots.

就交易環境而言，我們預期私募市場的交易量普遍會更加強勁。顯然，近兩年來併購進展相當緩慢。我認為，你確實遇到了這樣的情況：你的有限合夥人和私募股權基金正在尋求資本回報。因此，我所說的賣方面臨一些壓力，而買方仍然有相當多的乾粉。我認為市場一直在等待——我相信通膨已經趨於穩定，我認為[broadlines]會同意這一點。我想你仍然會在某些地方看到它。

Yeah, our view has been and got remains that -- the rate environment will remain elevated for some period of time. I think the market got a fair amount of euphoria around, there almost pricing in service six rate cuts, which we just didn't see. I think you'll see some downward movement in rates, but probably pretty muted during the course of '24.

是的，我們的觀點仍然是——利率環境將在一段時間內保持在高位。我認為市場相當興奮，服務六次降息幾乎已經定價，但我們只是沒有看到。我認為您會看到利率有所下降，但在 24 年期間可能會相當平靜。

Okay. Great, thanks.

好的。萬分感謝。

Thanks, John.

謝謝，約翰。

Thank you.

謝謝。

Bryce Rowe, B. Riley.

布萊斯·羅，B.萊利。

Thanks. Good morning. Wanted to maybe follow up on John's question there about the balance sheet use of leverage. Dan, it certainly sounds like you're comfortable maybe going a little bit higher from a leverage perspective, but do want to get a sense for what that leverage might look like, especially with some note maturities that come up here in the second half of '24 and in the first half of '25. Just trying to get a feel for how the debt stack might look as we get to about this time next year. Thanks.

謝謝。早安.也許想跟進約翰關於資產負債表槓桿使用的問題。丹，聽起來您確實對從槓桿角度來看可能會更高一點感到滿意，但確實想了解槓桿可能會是什麼樣子，特別是考慮到下半年出現的一些票據到期日24年和25年上半年。只是想了解一下明年這個時候債務堆疊的情況。謝謝。

I'm happy to do that. And good morning. I think we're pretty happy with where we sit from a liability perspective. We increased and extended the revolver during the course of 2023. Again, revolver provides a lot of flexibility to us. Obviously, we've got a lot of capacity on that. We did the note issuance that we mentioned in our prepared remarks that was essentially pre-funding these kind of near term maturities that are out there.

我很高興這樣做。早安.我認為從責任的角度來看，我們對我們的處境非常滿意。我們在 2023 年期間增加並擴展了左輪手槍。再次，左輪手槍為我們提供了很大的靈活性。顯然，我們在這方面有很大的能力。我們在準備好的評論中提到了票據發行，本質上是為此類近期到期的債券預先提供資金。

So I think you should see us to remain consistent with how we think about the right side of the balance sheet, the revolver will be important. We will keep looking to extend that every so often the capital, more of a long-term maturity, we will continue to access the unsecured. So the bond market, we have used CLOs in the past that may be something else we should consider, but I think we want to be cautious on the liability side. You'll operate with inside that target leverage be a frequent partners depend in the market. I think those are important pieces of -- I think BDC balance sheets. I think we've done a good job there over the last several years, and we intend to continue that.

因此，我認為您應該看到我們對資產負債表右側的看法保持一致，左輪手槍將很重要。我們將繼續尋求經常擴展資本，更多的是長期成熟度，我們將繼續獲得無擔保資金。因此，在債券市場上，我們過去曾使用過抵押貸款債券，這可能是我們應該考慮的其他事情，但我認為我們要在負債方面保持謹慎。您將在目標槓桿範圍內進行操作，成為市場上常見的合作夥伴。我認為這些是 BDC 資產負債表的重要組成部分。我認為過去幾年我們在這方面做得很好，我們打算繼續這樣做。

Great. That's helpful color. And maybe one more just around the spread environment. I mean, you mentioned in your prepared remarks that spreads were back to January 2022 levels.

偉大的。這是有用的顏色。也許在傳播環境周圍還有一個。我的意思是，您在準備好的發言中提到利差回到了 2022 年 1 月的水平。

Can you talk about kind of how it how it might feel with the environment, the way it is right now. I guess the prepared comments you made about market activity possibly picking up. Do you think that there will be more spread compression from here or a bit of a stabilization going forward?

可以談談它對環境的感受，現在的情況嗎？我猜你對市場活動的準備評論可能會回升。您認為從現在開始價差會進一步壓縮還是未來會穩定？

Yeah. I mean, obviously, the spread moves have been, I think, pretty material sort of both sides, right? Kind of your regular way loan in January of '22, I would say, would have been 555, 75 that gapped out arguably 675 was accounted for fees and sort of more call Pro during. It will come somewhere '23, and now you've got to come back.

是的。我的意思是，顯然，我認為雙方的利差走勢都相當重要，對吧？我想說，你在 22 年 1 月的常規貸款是 555，75 美元，可以說 675 美元是用於費用的，期間還有更多的電話。它會在23年的某個地方出現，現在你必須回來。

Yeah, I think part of that move back has been that lack of deal flow. There -- we've had a pretty decent origination number this quarter inside of FSK and even sort of across the platform, we're just not regular way deal volume is lower. So I think that there is a bit of -- I will call it technical on their side.

是的，我認為撤退的部分原因是缺乏交易流。在那裡——本季度我們在 FSK 內部甚至整個平台上都有相當不錯的發起數量，我們只是不按常規方式交易量較低。所以我認為他們有一點——我稱之為技術性。

Yeah, I think we're getting maybe close to the point of maybe that bottom line. So the spread moves maybe even see a little bit sort of wider if that volume picks up kind of more normally, but maybe TBD on that.

是的，我認為我們可能已經接近那個底線了。因此，如果交易量恢復得更正常，價差走勢甚至可能會更大一些，但也許有待確定。

The only point that I would say, though, is I do think the quality of risk that we're seeing is quite good and what we're getting paid and a total return to the fashion. These loans are still paying roughly 11% when you factor in some amortization of the upfront fee and sort of OID, you have to get paid back on a level for the size of companies that we're seeing for the equity contributions that are below us, building very good risk-adjusted returns. So we're not entirely surprised by that spread move.

不過，我想說的唯一一點是，我確實認為我們所看到的風險品質非常好，我們得到的報酬和時尚的總回報。當你考慮一些預付費用和 OID 的攤銷時，這些貸款仍然支付大約 11% 的費用，你必須按照我們所看到的股權貢獻低於我們的公司規模水平獲得償還。 ，建立非常好的風險調整回報。因此，我們對這種價差走勢並不完全感到驚訝。

Usually when your benchmark kind of gaps out, especially as much as it did for how these loans are priced, which is so for base, you don't get the benefit of spread widening too. I think we're not surprised by that move. And I just 11%, for this type of risk feels pretty good.

通常，當您的基準出現差距時，尤其是這些貸款的定價方式出現差距（對於基礎貸款而言就是如此），您也不會從利差擴大中受益。我認為我們對這一舉動並不感到驚訝。我只支持 11%，對於這種類型的風險感覺還不錯。

Okay, thanks for taking the questions.

好的，感謝您提出問題。

Thank you, have a good day.

謝謝你，祝你有美好的一天。

(Operator Instructions) Finian O'Shea from Wells Fargo.

（操作員說明）富國銀行的 Finian O'Shea。

Hey, Ryan, good morning.

嘿，瑞安，早安。

Good morning.

早安.

First -- So question, I want to hit on the partial accruals. It looks like we have a couple of new examples with the Keller Meyer and Reliant Rehab cases on this quarter, but it does seem to be a general practice where you're acknowledging that you won't fully recover the investment you made, but then you carve out a piece that allows you to run interest income through and that can create the impression that you're further super prioritizing your performance fee at the expense of shareholder recovery. So can you outline the thinking in these setups?

首先，我想談談部分應計項目。看起來本季我們有幾個關於 Keller Meyer 和 Reliant Rehab 案例的新例子，但這似乎是一種普遍做法，您承認您不會完全收回所做的投資，但隨後你開闢了一個部分，允許你運行利息收入，這可以給人留下這樣的印象：你以犧牲股東恢復為代價，進一步超級優先考慮你的績效費。那麼您能概述一下這些設定的想法嗎？

Thank you.

謝謝。

Yeah, I'm happy say that and yeah, I would put it in context with maybe just the way a normal restructuring or tried, but just to take these two cases kind of individually, and we talked about these in the prepared remarks, I mean on KBS, I think the first step of that restructuring has taken place. We expect there to be a consensual sort of handover of that business.

是的，我很高興這麼說，是的，我會把它放在正常重組或嘗試的方式中，但只是單獨考慮這兩個案例，我們在準備好的發言中討論了這些，我KBS 的意思是，我認為重組的第一步已經發生。我們期望該業務能夠以協商一致的方式移交。

So the loan has essentially been right-sized for what that amount will be on kind of the go forward basis. You'll rely on, I think not entirely the same situation, but that loan has been placed and that has been restructured into two pieces. One of those pieces is your regulatory cash-pay. One of them has the ability for the borrower and the sponsor to pick, they would have to pick up additional sort of rate. But that is giving the company sort of flexibility to kind of manage their cash flow or sort of cash burn and effectively reinvest in the business.

因此，貸款的規模基本上已經根據未來的金額進行了適當調整。你會依賴，我認為情況不完全相同，但貸款已經發放並且已重組為兩部分。其中之一是您的監管現金支付。其中一個可以讓借款人和擔保人選擇，他們必須選擇額外的利率。但這給了公司一定的靈活性，可以管理現金流或現金消耗，並有效地對業務進行再投資。

So I don't think that's entirely distinct when you restructure company, you are going to put a deadline back on that company. You are going to sort of own equity in that. So the company on the other side, I'd equate it similar to the situations that are here.

因此，我認為當您重組公司時，這並不完全不同，您將為該公司設定最後期限。你將在其中擁有自己的權益。所以另一邊的公司，我認為它與這裡的情況類似。

The only other point I would note is it is more likely than not that onto two examples that we just talked about, at least one of them, if not both of them, the pieces that we put on nonaccrual will pay cash in the coming quarter or coming quarters. But we would just you use that to reduce the basis.

我要指出的唯一一點是，在我們剛才討論的兩個例子中，至少其中一個，如果不是兩個，我們採用非應計利息的部分很可能會在下個季度支付現金或未來幾個季度。但我們只是希望你用它來減少基礎。

Okay, thanks. And then just zooming out a follow on the advisor joint venture, there's a lot of discussions still on your success and rotation, but the new FS/KKR Advisor is starting to chalk up its own, sometimes significant credit losses. So do you think like is it time maybe to look more inward and on that matter is the partnership model really working the right way for shareholders? Thank you.

好的謝謝。然後只是縮小顧問合資企業的後續範圍，仍然有很多關於您的成功和輪調的討論，但新的 FS/KKR 顧問開始記錄自己的，有時是重大的信用損失。那麼，您是否認為現在是時候更多地審視自己了？在這個問題上，合夥人模式真的對股東來說是正確的嗎？謝謝。

Yeah, I'm happy to do it. I think the partnership model has worked quite well. And I think -- then you got to look at the numbers a bit, right? When we did take over this portfolio, it was -- and then the entities were sort of merged. It was roughly 75% sort of legacy assets, 25%, so the KKR originated, that's [8713] today, the other way, including one of the large positions as part of that 13 would have repaid in January. You look at just total originations and we look at '22, '23 odd billion of originations inside of FSK since April 2018 and a 50 basis point or sub 50 basis point sort of depreciation rate, which is realized and unrealized numbers like that's pretty good.

是的，我很高興這樣做。我認為合作模式運作得很好。我認為——那麼你必須看一下這些數字，對吧？當我們確實接管這個投資組合時，然後這些實體就被合併了。大約 75% 是遺留資產，25%，所以 KKR 誕生了，也就是今天的 [8713]，相反，包括其中一個大型頭寸，作為 13 個將在一月份償還的一部分。你只看總的發起量，我們看看自2018 年4 月以來FSK 內的「22」、「23」十億個發起量，以及50 個基點或低於50 個基點的折舊率，這樣的已實現和未實現的數字相當不錯。

And I looked at our kind of performance on the institutional funds that was investing in the same assets, which has led to the vintage, like those are sort of, I think, pretty strong numbers. So we're not happy with the quarter here. I think we can be honest with that. And we were always expecting a certain amount of either nonaccruals or challenges and assets that we invested. It is a credit book, right? but I do think it's a pretty interesting stat.

我觀察了我們在投資相同資產的機構基金上的表現，這導致了年份，我認為這些數字相當強勁。所以我們對這個季度並不滿意。我認為我們可以誠實地對待這一點。我們總是期待一定數量的非應計收益或挑戰以及我們投資的資產。這是一本信用簿，對嗎？但我確實認為這是一個非常有趣的統計數據。

You look at, roughly half of the nonaccruals are coming from 87% of the portfolio, roughly half of the nonaccruals are coming from 13% of the portfolio. So we know we're in the business of -- in the credit business. You need to be raised with 99 out of 100 times, right? I think these credits have got a lot of focus on them from the deal team, the restructuring team, and we're going to look to maximize value there, but yeah, I think that 22-odd-billion to 23-odd-billion is a pretty real number as is that sub 50 basis point depreciation rate.

你看，大約一半的非應計費用來自 87% 的投資組合，大約一半的非應計費用來自 13% 的投資組合。所以我們知道我們從事的是信貸業務。100 次你需要加註 99 次，對嗎？我認為這些信用得到了交易團隊和重組團隊的高度關注，我們將尋求價值最大化，但是，是的，我認為 22 億到 23 億是一個非常真實的數字，低於50 個基點的折舊率也是如此。

Thank you.

謝謝。

Thanks, Fin.

謝謝，芬。

(Operator Instructions) Casey Alexander, Compass Point.

（操作員指示）Casey Alexander，Compass Point。

Hi, good morning. Not to over [knitpick], but in relation to Miami Beach and Reliant, medical -- Medicare reimbursement has been an area that private credit managers have assiduously avoided. So I'm curious when were those underwritten and kind of what was the base case that made you comfortable that you could underwrite a Medicare reimbursement model?

早安.不是過度[knitpick]，但就邁阿密海灘和 Reliant 而言，醫療——醫療保險報銷一直是私人信貸經理刻意迴避的領域。所以我很好奇這些是什麼時候承保的，以及讓您放心可以承保醫療保險報銷模式的基本情況是什麼？

And then how does that get sideways and lead us again through the potential recoveries on those?

那麼，這種情況如何發展並引導我們再次實現這些方面的潛在復甦呢？

Yeah, not happy to -- and then frame of (technical difficulty) essentially prior to COVID or at least and kind of the earliest of days of COVID, both of these deals would have been well south of 50 LTV from an equity perspective. I think it's one of the interesting things is these were both sponsor owned businesses; the sponsors injected a meaningful amount of additional capital and the sort of post-close. That's the reference we made that we got $175 million of par debt pay downs along the way.

是的，不高興——然後基本上在新冠疫情之前或至少在新冠疫情爆發初期的（技術難度）框架下，從股權角度來看，這兩筆交易都遠遠超出了 50 LTV。我認為有趣的事情之一是這些都是贊助商擁有的企業；發起人注入了大量額外資金，並在交割後進行了類似的投資。這就是我們提到的，我們在此過程中獲得了 1.75 億美元的面額債務償還。

Yes, I think that's been a good result and will make kind of -- you think about a net recovery rate on the overall loan, yeah, sort of much higher and makes these kind of smaller positions to where we sit today. I think the path to reach is probably still an active dialogue. I mean, we have been approached for certain of these or either of them with inbound sort of M&A sort of opportunities or merger opportunities. I think there will be some settling in these businesses over the course of the medium sort of long term, but they were materially impacted from COVID, probably specifically Reliant, and we'll do -- we can to kind of maximize value.

是的，我認為這是一個很好的結果，並且會產生某種——你會想到整體貸款的淨回收率，是的，會高得多，並使這些較小的頭寸達到我們今天的水平。我認為達到的途徑可能仍然是積極對話。我的意思是，我們已經就其中某些或其中任何一個進行了入境併購機會或合併機會的接觸。我認為，從中長期來看，這些業務將會得到一些解決，但它們受到了新冠疫情（尤其是 Reliant）的重大影響，我們會這樣做，我們可以實現價值最大化。

But I would these weren't kind of one-off kind of random things. I mean, big name, I think kind of sponsors and their larger equity checks, we thought we will [downside] protected, we've taken real principal dollars off the table along the way.

但我希望這些不是一次性的隨機事件。我的意思是，大牌，我認為贊助商和他們更大的股權檢查，我們認為我們會[下行]受到保護，我們一路上已經拿走了真正的本金。

All right. Thank you for that. And second, my follow-up question is the stock is now once again at a pretty elevated discount to NAV. Is there an existing share repurchase program and are we at levels where you think the Board would consider starting to act on a share repurchase program given the elevated level of the discount?

好的。謝謝你。其次，我的後續問題是，該股票現在再次相對於資產淨值有相當高的折扣。是否有現有的股票回購計畫？鑑於折扣水準較高，您認為董事會是否會考慮開始實施股票回購計畫？

Yeah. I think we've been active here in the past just in terms of the sheer number of dollars that we have repurchased. Obviously, we've been rewarding shareholders with ensuring, we're paying out kind of all of the earnings we earned. I think that we essentially declared $0.2 of specials this year, right?

是的。我認為我們過去在這方面一直很活躍，只是就我們回購的美元數量而言。顯然，我們一直在獎勵股東，確保我們支付了我們賺取的所有收益。我想我們今年基本上宣布了 0.2 美元的特價，對嗎？

So even though you look at our -- kind of year-on-year, so the numbers that 10% ROE, you do see a 1.7% so the [NAV] decline after the specials, that's closer to 85 basis points. It is a conversation we frequently have with the Board will continue to do that. But it is something we've said in the past, and we'll have it under consideration.

因此，即使您查看我們的同比情況，ROE 為 10%，您確實會看到 1.7%，因此特價後的 [NAV] 下降，接近 85 個基點。這是我們經常與董事會進行的對話，並將繼續這樣做。但這是我們過去說過的，我們會考慮的。

Thank you.

謝謝。

Thanks.

謝謝。

(Operator Instructions) Paul Johnson, KBW.

（操作員說明）Paul Johnson，KBW。

Yeah, good morning. Thanks for taking my questions. I'm just curious, so any of the nonaccruals on the new nonaccruals this quarter, do any of those overlap with the joint venture? And with that, I guess what drove I guess, the lower mark on the joint venture this quarter?

是的，早安。感謝您回答我的問題。我只是很好奇，本季新非應計專案中的任何非應計專案是否與合資企業重疊？說到這裡，我想是什麼推動了本季合資企業的較低分數？

Yeah, just to level set again, I mean, obviously, we went through the names that we put on nonaccrual, five in total, two of those relate to the Medicare reimbursement, sorry, to those relate to the wage kind of inflation piece and maybe some of the rollups, and JWA was more of an EV point than a performance point and that we took two names kind of off non-accrual.

是的，只是為了再次設定水平，我的意思是，顯然，我們檢查了非應計的名稱，總共五個，其中兩個與醫療保險報銷有關，抱歉，與工資類型的通貨膨脹部分有關，也許是一些匯總，JWA 更多的是一個EV 點而不是性能點，我們把兩個名字從非應計項目中剔除。

There was some overlap with these names between FSK and the JV, I think KBS and Reliant one of them the bigger of those, but smaller-sized dollar got them in the JV. Did you recall the JV most of the assets are kind of originated onto the FSK balance sheet and then you were creating that portfolio down to the JV. A little bit strategically based upon the purpose of the JV, but then also just thinking about broader kind of diversification and Portfolio Management. They'll sell little bit of overlap, but not everything.

FSK 和合資企業之間的這些名稱有一些重疊，我認為 KBS 和 Reliant 其中較大的一個，但規模較小的美元讓它們進入了合資企業。您是否還記得合資企業的大部分資產都源自 FSK 資產負債表，然後您創建了直至合資企業的投資組合。有點策略性地基於合資企業的目的，但也只是考慮更廣泛的多元化和投資組合管理。他們會出售一些重疊的部分，但不是全部。

Got it. Thanks. And then for any of these nonaccruals are new or existing I guess you are talking about KBS on the sweeping. I mean, are any of these in any way related to kind of the downturn in the CRE market? just kind of referring to like a lower CapEx and lower property level budgets. Is that -- are any of these related to that situation?

知道了。謝謝。然後，對於任何這些非應計費用是新的或現有的，我猜你正在談論 KBS 的掃蕩。我的意思是，這些是否與商業房地產市場的低迷有任何關係？只是指較低的資本支出和較低的財產水準預算。這些是否與該情況有關？

Yes, it's an interesting question, and I think a thoughtful one, considering what's going on into that office market. It's not a big driver here, though. I think the big driver is more -- your wage inflation and then sort of higher interest costs higher, so the debt cost creating kind of limited sort of free cash flow. And then when you sort of, I think, exacerbate that, or include that in a situation where caveat that golf revenue volatility has extremely strong performance during and right after COVID. That was always going to sort of fall off a bit, but probably fell off a little bit more than sort of folks' expectations. So yeah, it has to be a certain amount of a factor, but I just don't find -- I just don't think it's material or sort of major one.

是的，這是一個有趣的問題，考慮到辦公室市場的現狀，我認為這是一個深思熟慮的問題。不過，這並不是一個很大的驅動因素。我認為最大的推動因素是——你的薪資通膨，然後更高的利息成本更高，因此債務成本創造了某種有限的自由現金流。然後，我認為，當你加劇這種情況時，或者將其納入警告高爾夫收入波動在新冠疫情期間和之後表現極其強勁的情況下。這個數字總是會有所下降，但下降幅度可能會超出人們的預期。所以，是的，它必須是一個一定程度的因素，但我只是沒有發現——我只是認為它不是實質的或主要的因素。

Got it.

知道了。

Thanks. That's helpful. And last one, just kind of stepping back here, just on the pipeline and just any high-level comments you might have on kind of the outlook for the year. And just I'm also sort of curious what the pipeline looks like today, maybe compared to like a year ago at the beginning of last year? That's all for me. Thanks.

謝謝。這很有幫助。最後一個，只是回到這裡，只是關於管道以及您可能對今年的前景發表的任何高層評論。我也有點好奇今天的管道是什麼樣子，也許與一年前去年初相比？這就是我的全部。謝謝。

Yeah, now and it's in line with, I think what we've talked about either from the remarks or maybe John, actually the question, but it feels like it will be a more active 24, it feels like there's pressure on both sides for lack of better word to do deals. I think the valuation, mismatch that exists to get the willing buyer, willing seller, they're starting to sort of fall away. Obviously, the syndicated loan markets have started to return. I think that would be highly correlated to just more M&A volumes sort of coming through.

是的，現在這與我們所討論的內容一致，無論是從言論還是約翰，實際上是問題，但感覺這將是一個更積極的 24 小時，感覺雙方都面臨著壓力缺乏更好的詞來進行交易。我認為，為了讓願意的買家、願意的賣家而存在的估值不匹配，他們開始消失了。顯然，銀團貸款市場已經開始回歸。我認為這與更多的併購交易量的出現高度相關。

So yeah, that is our expectation. I think it will be weighted to the back half of '24 just because as we're seeing more and more kind of processes either being considered or started, it takes time to get those done for the deals to sign the deals to close. So I would probably point to fundings more in the second half of the year. Obviously, that should be accretive to fee income, which has been historically low for us during the course of 2023.

是的，這就是我們的期望。我認為它會被加權到 24 年後半段，因為我們看到越來越多的流程正在考慮或啟動，需要時間來完成這些流程，以便簽署交易以完成交易。因此，我可能會在下半年更專注於資金。顯然，這應該會增加費用收入，而 2023 年我們的費用收入一直處於歷史低點。

Thank you, [Bob].

謝謝你，[鮑伯]。

(Operator Instructions) Kenneth Lee, RBC Capital Markets.

（操作員指令）Kenneth Lee，RBC 資本市場。

Hey, good morning. Thanks for taking my question. Wondering if you could just share some thoughts around where you think portfolio average interest coverage ratios could trough and perhaps give us a little color around what you're seeing from portfolio companies in terms of managing across the elevated interest expense there? Thanks.

嗨，早安。感謝您提出我的問題。想知道您是否可以分享一些關於您認為投資組合平均利息覆蓋率可能會觸底的想法，也許可以讓我們對您從投資組合公司看到的管理高利息支出方面看到的情況有一些了解？謝謝。

Yeah. Thanks for the question. Yeah, I think we have sort of a trough, right? You start to see silver trend down, this kind of past quarter, although that number is de [minimus], I think it was like seven basis points on average across the portfolio. As I said before, I don't believe in the six rate cuts, but I think you will start to see that getting trend down sort of overall, so I think we have kind of hit the bottom there. I would note, Ken, for your benefit, I think there's only seven or eight names in the portfolio that have an interest coverage less than one.

是的。謝謝你的提問。是的，我認為我們有一個低谷，對吧？你開始看到白銀趨勢下降，就像過去的季度一樣，儘管這個數字是微不足道的，但我認為整個投資組合的平均水平約為七個基點。正如我之前所說，我不相信六次降息，但我認為你會開始看到整體趨勢下降，所以我認為我們已經觸底了。肯，我想指出的是，為了您的利益，我認為投資組合中只有七到八個名字的利息覆蓋率小於一。

So that's roughly 200 names. So not a small sort of percentage there, but I think you'll see that [15] sort of start to tick up over the course of 2024. I think in terms of how they're managing it, I think they're doing all they can sort of pulling the levers they can, a decent amount of companies that have a certain amount of hedges, but they were never perfect in a lot of those. So that could be rolling off. So I think it is involved. It is an environment that portfolio company, CFOs and treasurers obviously have a lot to do these days. And I have spent a lot of nice sort of focused on that. And I think the majority of the portfolio has done a good job in that.

大約有 200 個名字。因此，這個比例並不小，但我認為您會看到 [15] 在 2024 年期間開始上升。我認為就他們的管理方式而言，我認為他們正在盡其所能地拉動槓桿，相當多的公司擁有一定程度的對沖，但他們在許多方面從來都不是完美的那些。所以這可能會消失。所以我認為這有關係。在這種環境下，投資組合公司、財務長和財務主管如今顯然還有很多工作要做。我花了很多時間專注於此。我認為大部分投資組合在這方面都做得很好。

The other thing, Brian, the other thing that we've seen is for our more acquisitive companies, bonds are raising junior capital typically tick preferred or something like that to continue to drive acquisition strategies and growth, so as well as sponsors contributing equity on their own.

另一件事，布萊恩，我們看到的另一件事是，對於我們更具收購欲的公司來說，債券正在籌集初級資本，通常會勾選優先或類似的東西，以繼續推動收購策略和成長，以及贊助商貢獻股權他們自己的。

So we're definitely seeing some junior capital support in certain companies.

因此，我們肯定會在某些公司看到一些初級資本支持。

Got you. Very helpful there. And just one follow-up, if I may. Wonder if you could talk about what you're seeing around either covenants or documentation for recent investments, especially within the upper middle market segment?

明白你了。那裡非常有幫助。如果可以的話，只有一個後續行動。想知道您是否可以談談您對近期投資的契約或文件的看法，特別是在中高端市場領域？

Thanks.

謝謝。

Yeah, I think that the documentation, I think, is held, right? I think people know that we're and I'd like to say we're in the stores business and direct lending and private credit. So they're not as it will be business. So yeah, I think things like collateral stripping or other terms like that have not made their way into the market.

是的，我認為文檔已被保存，對嗎？我認為人們知道我們，而且我想說我們從事商店業務、直接貸款和私人信貸業務。所以他們並不像生意那樣。所以，是的，我認為抵押品剝離或其他類似條款尚未進入市場。

I think covenants is also the case specific. I think as we've just you opened more and more active in sort of larger size deals, I mean the EBITDA numbers I spoke in the prepared remarks, $250 million plus, you're getting less and less access to what I would call financial covenants, but your lending, the better companies, which I think we're sort of comfortable with that.

我認為契約也是具體情況而定的。我認為，隨著您在更大規模的交易中越來越活躍，我的意思是我在準備好的發言中談到的EBITDA 數字，2.5 億美元以上，您獲得我所說的財務的機會越來越少契約，但是你的貸款，更好的公司，我認為我們對此感到滿意。

I don't think those size numbers, though. Yeah, necessarily be sustainable. But as the companies have access to the public markets some of them will take that I think will average more down in line with what our historical kind of medians or weighted average numbers of bids, but there will be certain parts of where certain sectors are sized companies where we would only do the deal with the financial covenant. Larger companies, I think will be a little more flexible there because we're going to like the credit risk.

不過，我不認為這些尺寸數字。是的，必須是可持續的。但隨著這些公司能夠進入公開市場，我認為其中一些公司會根據我們歷史上的中位數或加權平均投標數量，將平均價格進一步下調，但某些行業的某些部分的規模會有所下降。我們只會根據財務契約進行交易的公司。我認為較大的公司會更靈活，因為我們會喜歡信用風險。

Got you.

明白你了。

Very helpful there. Thanks again.

那裡非常有幫助。再次感謝。

Thanks.

謝謝。

Thank you.

謝謝。

(Operator Instructions)

（操作員說明）

Mark Hughes, Truist Securities.

馬克休斯，Truist 證券公司。

Yeah, thank you. Good morning let's look at the good progress with the asset base, the finance in the quarter. Is there anything there that was just kind of opportunistic or is there more of activity?

是的，謝謝。早上好，讓我們看看本季資產基礎和財務方面的良好進展。有沒有什麼只是機會主義的事情，還是有更多的活動？

Yeah, and actually push back a little bit more, I'd say, activity, the one I mentioned in the prepared remarks, the high bicoastal loan book out of e-mail, we were pretty excited about that $7 billion-odd portfolio. We're pretty constructive on the prime and super prime part of the consumer to the portfolio's about that is I think we're happy to be in that.

是的，實際上，我想說的是，活動，我在準備好的發言中提到的活動，透過電子郵件發出的高額兩岸貸款簿，我們對這個70 億美元以上的投資組合感到非常興奮。我們對消費者的優質和超優質部分的投資組合非常有建設性，我認為我們很高興參與其中。

The two other names, just you have it that probably drove that. We talked about on prior calls the deal with PayPal in Europe that transaction funded. So we're happy to see that getting off to a good start and that we did do a receivables facility, I think there was a press release out there on it for a company [Weber]. So those were the three big drivers, but we do think that's a really interesting space right now. We do think what's going on with the regional banks in the United States allows us to potentially acquire assets or fill certain void. So that's an area we're spending a lot a lot of time on.

另外兩個名字，只要你有它可能就可以推動這一點。我們在先前的電話會議中談到了與歐洲 PayPal 的交易資助的交易。因此，我們很高興看到有一個良好的開端，並且我們確實建立了應收帳款設施，我認為有一家公司就此發布了一份新聞稿[韋伯]。這就是三大驅動因素，但我們確實認為現在這是一個非常有趣的領域。我們確實認為美國地區銀行的現狀使我們有可能收購資產或填補某些空白。所以這是我們花費大量時間的領域。

Understood.

明白了。

And then you talked about some pressure on spreads in the -- I think the larger deals, does that extend down to the middle market smaller deals?

然後您談到了價差的一些壓力——我認為較大的交易，這是否會延伸到中間市場較小的交易？

Yeah, we do see it kind of extending.

是的，我們確實看到它在延伸。

I mean, I think what our definition of upper end of the middle market is pretty broad, right? So we're thinking about companies historically at kind of 50 to 150 context. Obviously, we've been above that with the numbers that we've quoted in the remarks about around the deal flow in Q4?

我的意思是，我認為我們對中端市場高端的定義相當廣泛，對嗎？因此，我們歷史上考慮的是 50 到 150 家公司。顯然，我們在有關第四季度交易流程的評論中引用的數字已經超出了這一點？

Yeah, I do think it's an important point, though, to think about what the total return is on these deals versus the risk you're taking versus where you're sitting in the capital structure as of -- still pretty darn interesting risk-adjusted returns, but spreads definitely did move in Q4 down.

是的，我確實認為這一點很重要，要考慮這些交易的總回報與您所承擔的風險以及您在資本結構中的位置（仍然是非常有趣的風險）調整後的回報，但利差確實在第四季下降了。

Understood.

明白了。

Thank you.

謝謝。

Thank you.

謝謝。

Thank you.

謝謝。

Robert Dodd, Raymond James.

羅伯特·多德，雷蒙德·詹姆斯。

Good morning. If I can ask another question about the JV, right? So if we look at the BDC, total income dropped up 3.5%, I think this quarter, but within the JV it was down more than double that north of 8%, yet this same exposure Reliant KBS. [Logano] whether dividend stopping. But can you walk us through about what's driving that greater decline at the JV that you're experiencing at the BDC? And given that the guidance for the dividend for Q1 is down again, it appears maybe whatever is driving that isn't over yet. So can you give us any color on that?

早安.我可以再問一個關於合資企業的問題嗎？因此，如果我們看一下 BDC，我認為本季總收入下降了 3.5%，但在合資企業內部，下降幅度超過 8%，但同樣的風險來自 Reliant KBS。 [Logano] 是否停止分紅。但您能否向我們介紹一下是什麼原因導致您在 BDC 的合資企業中經歷了更大的衰退？鑑於第一季股息指引再次下降，看來推動這一趨勢的因素尚未結束。那你能給我們任何顏色嗎？

Yeah, It's a fair question. I think part of it and then Steven Lilly might want to sort of add to this as well. But part of it was just a certain amount of larger fee income or [ABF] dividends on names that were probably overweight in the joint venture flowing through in Q3 than they were in Q4.

是的，這是一個公平的問題。我認為其中一部分，然後史蒂文·莉莉（Steven Lilly）可能也想對此進行補充。但部分原因只是一定數量的較大費用收入或[ABF]股息，這些名字在第三季度流經的合資企業中可能比第四季度超配。

There's nothing kind of broader than that. These are the kind of the rest of the portfolio there. If anything, I think we've got room to grow the joint venture, room to sort of increase, kind of dividends that can be paid out there over the coming quarters or during the overall kind of [2024]. But I've given that, but that's exactly it.

沒有什麼比這更廣泛的了。這些是其餘投資組合的類型。如果有什麼不同的話，我認為我們有發展合資企業的空間，有增加的空間，可以在未來幾個季度或總體情況下支付的股息。[2024]。但我已經給了，但就是這樣。

Okay, thank you.

好的謝謝。

Thank you.

謝謝。

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Dan Pietrzak for any further remarks.

今天節目的問答環節到此結束。我想將程式交還給 Dan Pietrzak 以供進一步評論。

Well, thank you all for joining the call today and the support during 2023. If you do have any follow-ups, please let us know. We're very happy to spend the time. Thanks and have a good day.

好的，感謝大家今天加入電話會議以及 2023 年期間的支持。如果您有任何後續行動，請告訴我們。我們很高興度過這段時間。謝謝，祝你有美好的一天。

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

女士們、先生們，感謝你們參加今天的會議。這確實結束了該程式。您現在可以斷開連線。