FS KKR Capital Corp (FSK) 2024 Q3 法說會逐字稿

Good morning. Ladies and gentlemen, welcome to FS KKR Capital Corp third-quarter 2024 earnings conference call (Operator Instructions) Please note that this conference is being recorded.

早安.女士們、先生們，歡迎參加 FS KKR Capital Corp 2024 年第三季財報電話會議（操作員說明） 請注意，本次會議正在錄音。

At this time, Anna Kleinhenn, Head of Investor Relations will proceed with the introduction. You may now begin.

以下由投資者關係主管Anna Kleinhenn 進行介紹。你現在可以開始了。

Thank you. Good morning, and welcome to FS KKR Capital Corp's third-quarter 2024 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.

謝謝。早安，歡迎參加 FS KKR Capital Corp 的 2024 年第三季財報電話會議。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。

Replay information is included in a press release that FSK issued yesterday. In addition, FSK posted on its website, a presentation containing supplemental financial information with respect to its portfolio and financial performance for the quarter ended September 30, 2024.

重播訊息包含在 FSK 昨天發布的新聞稿中。此外，FSK 在其網站上發布了一份演示文稿，其中包含有關其截至 2024 年 9 月 30 日的季度投資組合和財務業績的補充財務資訊。

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. Today's conference call includes forward-looking statements and are subject to risks and uncertainties that could affect FSK or the economy generally.

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。今天的電話會議包含前瞻性陳述，並受到可能影響 FSK 或整體經濟的風險和不確定性的影響。

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. In addition, this call will include certain non-GAAP financial measures.

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結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。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。

For such measures, reconciliations to the most directly comparable GAAP measures can be found in FSK's third quarter earnings release that was filed with the SEC on November 6, 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.

對於此類指標，可以在 FSK 於 2024 年 11 月 6 日向 SEC 提交的第三季財報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。

To obtain copies of the company's latest SEC filings, please visit FSK's website. 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 on the call today are Co-Chief Operating Officers, Drew O'Toole and Ryan Wilson.

若要取得該公司最新 SEC 備案文件的副本，請造訪 FSK 網站。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）。今天參加電話會議的還有聯合營運長德魯‧奧圖爾 (Drew O'Toole) 和瑞安‧威爾森 (Ryan Wilson)。

I will now turn the call over to Michael.

我現在將把電話轉給邁克爾。

Thank you, Anna, and good morning, everyone. Thank you all for joining us today for FSK's third-quarter 2024 earnings call. FSK's financial and operating results showed continued strength during the third quarter. as we again exceeded our earnings guidance and over earned our quarterly base and supplemental distribution. During the third quarter, FSK generated net investment income of $0.77 per share and adjusted net investment income of $0.74 per share as compared to our public guidance of approximately $0.72 and $0.70 per share respectively.

謝謝你，安娜，大家早安。感謝大家今天加入我們 FSK 的 2024 年第三季財報電話會議。FSK 第三季的財務和營運表現持續強勁。因為我們再次超越了我們的獲利指導，並超越了我們的季度基礎和補充分配。第三季度，FSK 產生每股 0.77 美元的淨投資收益和每股 0.74 美元的調整後淨投資收益，而我們的公開指引分別約為每股 0.72 美元和 0.70 美元。

Our net asset value per share at the end of the third quarter was $23.82. On October 8, 2024, we announced that our Board declared a total fourth quarter distribution of $0.70 per share consisting of our base distribution of $0.64 per share and a supplemental distribution of $0.06 per share. This results in $2.90 per share of total distributions in 2024, which equates to a 12.2% yield on our September 30, 2024 net asset value of $23.82 per share and a yield of approximately 14% based on our recent share price.

第三季末我們的每股淨值為 23.82 美元。 2024 年 10 月 8 日，我們宣布董事會宣布第四季度分配總額為每股 0.70 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。這導致 2024 年總分配為每股 2.90 美元，相當於我們 2024 年 9 月 30 日每股資產淨值 23.82 美元的收益率為 12.2%，根據我們最近的股價計算，收益率約為 14%。

As Dan will discuss in more detail during his comments, the FSK care adviser continues to maintain its high bar on credit quality and disciplined underwriting process. During the third quarter, we originated approximately $1.1 billion of investments, and we ended the quarter with ample liquidity totaling approximately $4.4 billion.

正如 Dan 將在評論中更詳細地討論的那樣，FSK 護理顧問將繼續保持其高標準的信貸品質和嚴格的核保流程。第三季度，我們發起了約 11 億美元的投資，本季結束時，我們擁有總計約 44 億美元的充足流動性。

As we begin focusing on 2025, FSK is well positioned to capitalize on expected market conditions. First, given the recent reduction interest rates and assuming some level of additional rate cuts over the next 12 months, our portfolio companies should experience improved credit metrics such as interest and fixed charge coverage ratios.

當我們開始關注 2025 年時，FSK 已做好充分利用預期市場條件的準備。首先，考慮到最近的利率下調，並假設未來 12 個月內還會有一定程度的額外降息，我們的投資組合公司應該會看到利息和固定費用覆蓋率等信用指標的改善。

Next, based on our expectation for continued improvement in the M&A environment, there should be additional opportunities to rotate out of certain legacy portfolio companies, which have positioned themselves favorably over the last several years.

接下來，根據我們對併購環境持續改善的預期，應該有更多機會從某些傳統投資組合公司中退出，這些公司在過去幾年中處於有利地位。

Lastly, we are optimistic about the outlook for new investment opportunities. I continue to believe that the KKR credit platform is well positioned to generate differentiated deal flow across private debt, and asset-based finance investments.

最後，我們對新的投資機會前景持樂觀態度。我仍然相信 KKR 信貸平台處於有利地位，可以在私人債務和基於資產的金融投資領域產生差異化的交易流。

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。

Thank you, Michael, and good morning, everyone. Despite the recent noise surrounding the presidential election, the US economy continues to remain on solid footing. Since the Fed began raising rates in early 2022, the US economy has experienced a 6.8% growth rate in real terms.

謝謝你，邁克爾，大家早安。儘管最近圍繞著總統選舉產生了一些噪音，但美國經濟仍然保持穩固的基礎。自聯準會2022年初開始升息以來，美國經濟實際成長率為6.8%。

Recent economic data released through September illustrates that the labor market has remained resilient, boosting income levels for workers, which continues to support consumer spending. At the same time, inflation has declined from 9.1% in June of 2022, through approximately 2.4% today. Both of these inputs create a favorable backdrop for a sustained economic expansion.

截至 9 月發布的最新經濟數據表明，勞動力市場保持彈性，提高了工人的收入水平，從而繼續支持消費者支出。同時，通膨率已從 2022 年 6 月的 9.1% 下降至目前的約 2.4%。這兩種投入都為經濟持續擴張創造了有利的背景。

As Michael alluded in his comments, we believe that M&A activity will increase meaningfully in 2025, as the market has seen interest rates peak and economic sentiment improve. In line with this, we have seen greater momentum in middle market deal volumes and our pipeline of new investment opportunities continues to grow.

正如邁克爾在評論中提到的那樣，我們認為，隨著市場利率見頂和經濟信心改善，2025 年併購活動將大幅增加。與此一致的是，我們看到中間市場交易量的強勁勢頭，並且我們的新投資機會管道持續成長。

The bar remains high when looking for new opportunities to deploy capital. The market continues to be competitive, which has resulted in tighter credit spreads and more borrower friendly terms. Nevertheless, we remain prudent and disciplined in our underwriting and have continued to pass on opportunities that do not meet our credit standards.

尋找新的資本配置機會的門檻仍然很高。市場競爭持續激烈，導致信貸利差收緊，貸款條件更加友善。儘管如此，我們在核保方面仍保持審慎和自律，並繼續放棄不符合我們信用標準的機會。

We continue to see compelling opportunities in asset based finance, as banks strategically reposition their portfolios, largely due to regulatory requirements. As we have discussed previously, our ABS investments are often structured as fixed rate which helps offset the impact of declining rates in the direct lending portion of our investment portfolio.

隨著銀行策略性地重新定位其投資組合（很大程度上是由於監管要求），我們繼續看到基於資產的金融領域的誘人機會。正如我們之前所討論的，我們的 ABS 投資通常採用固定利率結構，這有助於抵消我們投資組合中直接貸款部分利率下降的影響。

During the third quarter, FSK originated $1.1 billion of new investments. Approximately 57% of our new investments were focused on add-on financings to existing portfolio companies and long-term KKR relationships.

第三季度，FSK 發起了 11 億美元的新投資。我們約 57% 的新投資集中於現有投資組合公司的附加融資和長期 KKR 關係。

Our new investments, combined with $1 billion of net sales and repayments, when factoring in sales to our joint venture, equated to a net portfolio increase of $185 million. New originations consisted of approximately 84% in first lien loans and 16% in asset based finance investments. Our new direct lending investments had a weighted average EBITDA of approximately $211 million, 6.3times leverage through our security and the weighted average coupon of approximately SOFR, plus 505 basis points.

考慮到對合資企業的銷售額，我們的新投資加上 10 億美元的淨銷售額和還款，相當於投資組合淨增加 1.85 億美元。新發放的貸款中約 84% 為第一留置權貸款，16% 為基於資產的金融投資。我們新的直接貸款投資的加權平均 EBITDA 約為 2.11 億美元，我們的證券槓桿率為 6.3 倍，加權平均息票約為 SOFR，再加上 505 個基點。

Through our ABF team and the broader KKR network, we have developed deep relationships, which allows us to access niche sectors that we find attractive within the ABF market. And to structure deals that many market participants are unable to execute on due to transaction size, complexity or platform capabilities.

透過我們的 ABF 團隊和更廣泛的 KKR 網絡，我們建立了深厚的關係，這使我們能夠進入 ABF 市場中我們認為有吸引力的利基產業。並建構許多市場參與者因交易規模、複雜性或平台功能而無法執行的交易。

One example of an asset-based finance deal that we originated during the quarter was the purchase of an approximately $10 billion pool of seasoned private student loans from Discover Financial Services. This portfolio is focused on prime borrowers or cosigners and has an average FICO score above 750. KKR Credit and another large manager jointly led and structured the multibillion dollar deal with FSK committing $94 million.

我們在本季發起的一項以資產為基礎的融資交易的一個例子是從 Discover Financial Services 購買了約 100 億美元的成熟私人學生貸款池。該投資組合專注於主要藉款人或聯合簽名人，平均 FICO 分數高於 750 分。KKR Credit 和另一家大型管理公司共同主導並建立了這項價值數十億美元的交易，FSK 承諾投資 9,400 萬美元。

The trend of well performing portfolio companies proactively seeking re-pricings continued during the third quarter. We have also experienced instances of companies seeking overly aggressive price reductions or structural amendments, which don't align with our return or risk thresholds. In those situations, we have proactively chose to be repaid. When we look at aggregate trends across our portfolio companies, we observed a 13% year-over-year EBITDA growth rate at portfolio companies in which we have invested in since April of 2018.

業績良好的投資組合公司主動尋求重新定價的趨勢在第三季持續存在。我們也經歷過一些公司尋求過於激進的降價或結構性修改的例子，這與我們的回報或風險門檻不符。在這種情況下，我們主動選擇了償還。當我們觀察投資組合公司的整體趨勢時，我們發現自 2018 年 4 月以來我們投資的投資組合公司的 EBITDA 年成長率為 13%。

Additionally, the weighted average and median EBITDA of our portfolio companies was $237 million and $121 million respectively, as of September 30, 2024. As of the end of the third quarter, non-accruals represented 3.8% of our portfolio on a cost basis and 1.7% of our portfolio on a fair value basis. This compares to 4.3% of our portfolio on a cost basis and 1.8% of our portfolio on a fair value basis as of June 30, 2024.

此外，截至 2024 年 9 月 30 日，我們投資組合公司的加權平均 EBITDA 和中位數分別為 2.37 億美元和 1.21 億美元。截至第三季末，以成本計算，非應計費用占我們投資組合的 3.8%，以公允價值計算，占我們投資組合的 1.7%。相較之下，截至 2024 年 6 月 30 日，我們的投資組合中以成本計算的比例為 4.3%，以公允價值計算的投資組合比例為 1.8%。

Brian will provide further details on this during his comments. We also believe it is helpful to provide the market with information based on the FSK assets originated by KKR Credit. Non-accruals relating to the 88% of our total portfolio, which has been originated by KKR Credit and the FS KKR adviser were 2.2% on a cost basis and 50 basis points on a fair value basis. as of the end of the third quarter. This compares to 2.4% on a cost basis and 60 basis points on a fair value basis as of June 30, 2024.

布萊恩將在評論中提供更多細節。我們也認為，向市場提供基於 KKR Credit 起源的 FSK 資產的資訊是有幫助的。由 KKR Credit 和 FS KKR 顧問發起的我們總投資組合 88% 的非應計費用以成本計算為 2.2%，以公允價值計算為 50 個基點。截至第三季末。相較之下，截至 2024 年 6 月 30 日，以成本計算為 2.4%，以公允價值計算為 60 個基點。

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. At the end of the third quarter, our investment portfolio had a fair value of $13.9 billion, consisting of 217 portfolio companies. This compares to a fair value of $14.1 billion and 208 portfolio companies as of June 30, 2024. Our net leverage remained flat quarter-over-quarter and the decline in our investment portfolio's fair value was primarily driven by unrealized depreciation relating to three investments, Production Resource Group, Miami Beach Medical Group and worldwide.

謝謝，丹。截至第三季末，我們的投資組合公允價值為 139 億美元，由 217 家投資組合公司組成。相較之下，截至 2024 年 6 月 30 日，其公允價值為 141 億美元，投資組合公司有 208 家。我們的淨槓桿率環比保持持平，投資組合公允價值的下降主要是由於與生產資源集團、邁阿密海灘醫療集團和全球三項投資相關的未實現折舊所致。

PRG continues to be impacted by the lingering effects of the Ryder strike and its corresponding impact on TV and film as well as softness in its live performance business due to the delay of certain artist tours. Miami Beach recently filed for Chapter 11 as part of its anticipated sale to Humana. Over the coming months, should this transaction close, we will exit our position in Seoul.

PRG 繼續受到萊德罷工的揮之不去的影響及其對電視和電影的相應影響，以及由於某些藝術家巡演推遲而導致現場表演業務疲軟的影響。邁阿密海灘最近申請了破產法第 11 章，作為其預期出售給 Humana 的一部分。在接下來的幾個月裡，如果這筆交易完成，我們將退出在首爾的部位。

Worldwide has experienced headwinds in its core pet bed business due to increased competition from low-cost foreign suppliers. We are actively engaged with the sponsor worldwide to negotiate a potential restructuring and we will provide additional updates as we learn more. At the end of the third quarter, our 10 largest portfolio companies represented approximately 20% of the fair value of our portfolio, which is in line with prior quarters.

由於來自低成本外國供應商的競爭加劇，Worldwide 的核心寵物床業務遇到了阻力。我們正在積極與世界各地的贊助商進行潛在的重組談判，我們將在了解更多資訊後提供更多最新資訊。截至第三季末，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 20%，與前幾季持平。

We continue to focus on senior secured investments as our portfolio consisted of approximately 60% first lien loans and 67% senior secured debt as of September 30. In addition, our joint venture represented 9.9% 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 totaled approximately 69% of our portfolio and senior secured investment totaled approximately 76% of our portfolio as of September 30.

我們繼續專注於優先擔保投資，因為截至 9 月 30 日，我們的投資組合由約 60% 的第一留置權貸款和 67% 的優先擔保債務組成。此外，我們的合資企業占我們投資組合公允價值的9.9%。因此，當投資人考慮我們的整個投資組合，審視我們合資企業的投資時，截至9 月30 日，第一留置權貸款總計約占我們投資組合的69%，優先擔保投資總計約占我們投資組合的76%。

The weighted average yield on accruing debt investments was 11.5% as of September 30, a decrease of 50 basis points compared to 12% at the end of the second quarter. The decrease is primarily attributable to lower spreads on new investments, the repayment of certain higher-yielding investments during the quarter and portfolio company repricing. As a reminder, the calculation of weighted average yield is adjusted to exclude the accretion associated with the merger with FSKR.

截至9月30日，應計債務投資加權平均收益率為11.5%，較第二季末的12%下降50個基點。下降的主要原因是新投資利差下降、本季某些高收益投資的償還以及投資組合公司的重新定價。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。

During the third quarter, Global Jet returned $76 million of capital to FSK, which is used to further reduce our position. This distribution brings our total capital received to $205 million over the last 2.5 years, and we continue to be pleased with the performance of the company.

第三季度，Global Jet 向 FSK 返還了 7,600 萬美元的資金，用於進一步減少我們的部位。此次分配使我們在過去 2.5 年中收到的總資本達到 2.05 億美元，我們仍然對公司的業績感到滿意。

During the quarter, one investment was added to non-accrual status and three investments were removed. Our subordinated delayed draw position in Miami Beach Medical was added to non-accrual status contributing $17 million of costs and $8 million of fair value.

本季度，一項投資被添加到非應計狀態，三項投資被刪除。我們在邁阿密海灘醫療公司的次級延遲提款頭寸被添加到非應計狀態，貢獻了 1700 萬美元的成本和 800 萬美元的公允價值。

Five Arch income fund, a legacy investment, which has been on nonaccrual since 2020 was fully exited removing $54 million of cost and $2 million of fair value. Lastly, a recapitalization of Belk resulted in the removal of $36 million of cost and $13 million of fair value across two investments.

Five Arch 收益基金是一項遺留投資，自 2020 年以來一直為非應計收益，現已完全退出，扣除了 5,400 萬美元的成本和 200 萬美元的公允價值。最後，Belk 的資本重組消除了兩項投資的 3,600 萬美元成本和 1,300 萬美元公允價值。

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 increased by $2 million during the third quarter to $441 million. The primary components of our total investment income during the quarter were as follows, total interest income was $356 million, representing an increase of $3 million quarter-over-quarter. A component of interest income, PIK interest, was $66 million as three portfolio companies, ATX, ERG and KDS paid their interest in the form of PIK. Dividend and fee income totaled $85 million, a decrease of $1 million quarter-over-quarter.

謝謝，布萊恩。第三季我們的總投資收入增加了 200 萬美元，達到 4.41 億美元。本季總投資收益主要構成如下：總利息收入3.56億美元，較上季增加300萬美元。利息收入的一個組成部分，即 PIK 利息，為 6,600 萬美元，因為 ATX、ERG 和 KDS 三家投資組合公司以 PIK 的形式支付利息。股息和費用收入總計 8,500 萬美元，季減 100 萬美元。

Our total dividend and fee income during the quarter is summarized as follows, $46 million of recurring dividend income from our joint venture, other dividends from various portfolio companies totaling approximately $18 million during the quarter and fee income totaling approximately $21 million during the quarter. Our interest expense totaled $118 million, an increase of $3 million quarter-over-quarter and our weighted average cost of debt was 5.5% as of September 30.

我們本季的股息和費用收入總額總結如下：來自合資企業的經常性股息收入為4600 萬美元，來自各個投資組合公司的其他股息本季度總計約1800 萬美元，本季度的費用收入總計約2100 萬美元。截至 9 月 30 日，我們的利息支出總計 1.18 億美元，季增 300 萬美元，加權平均債務成本為 5.5%。

Management fees totaled $54 million, unchanged quarter-over-quarter and incentive fees totaled $44 million, a decrease of $1 million quarter-over-quarter. Other expenses totaled $10 million unchanged quarter-over-quarter.

管理費總計 5,400 萬美元，季後不變；獎勵費總計 4,400 萬美元，季減 100 萬美元。其他費用總計 1000 萬美元，環比不變。

The detailed bridge in our net asset value per share on a quarter-over-quarter basis is as follows, our ending 2Q 2024, net asset value per share of $23.95 was increased by GAAP net investment income of $0.77 per share and was decreased by $0.20 per share due to a decrease in the overall value of our investment portfolio.

我們的每股淨值環比的詳細情況如下，截至 2024 年第二季度末，每股資產淨值為 23.95 美元，按 GAAP 計算的每股淨投資收益增加了 0.77 美元，減少了 0.20 美元由於我們的投資組合整體價值下降，每股盈餘下降。

Our net asset value per share was reduced by our $0.70 per share total quarterly distribution paid during the quarter. The sum of these activities results in our September 30, 2024, net asset value per share of $23.82. From a forward-looking guidance perspective, we expect fourth quarter 2024 GAAP net investment income to approximate $0.63 per share and we expect our adjusted net investment income to approximate $0.68 per share.

我們的每股資產淨值因本季支付的每股季度分配總額減少了 0.70 美元。這些活動的總和導致我們截至 2024 年 9 月 30 日的每股資產淨值為 23.82 美元。從前瞻性指引的角度來看，我們預計 2024 年第四季 GAAP 淨投資收益約為每股 0.63 美元，調整後的淨投資收益約為每股 0.68 美元。

Detailed fourth quarter guidance is as follows, our recurring interest income on a GAAP basis is expected to approximate $332 million. We expect recurring dividend income associated with our joint venture to approximate $52 million. an increase of approximately $6 million quarter-over-quarter.

詳細的第四季指引如下，以 GAAP 計算，我們的經常性利息收入預計約為 3.32 億美元。我們預計與我們的合資企業相關的經常性股息收入約為 5,200 萬美元。環比增加約 600 萬美元。

The expected increase is a result of the recent sale of $370 million of assets to the joint venture from FSK's balance sheet. We expect other fee and dividend income to approximate $31 million due to lower non-recurring fee income within our investment portfolio.

預期成長是由於最近從 FSK 資產負債表中向合資企業出售了 3.7 億美元的資產。由於我們投資組合中的非經常性費用收入較低，我們預計其他費用和股息收入約為 3,100 萬美元。

From an expense standpoint, we expect our management fees to approximate $53 million. We expect incentive fees to approximate $36 million. We expect our interest expense to approximate $117 million, and we expect other G&A expenses to approximate $10 million. During the fourth quarter, we expect our excise taxes will approximate $24 million. We expect the net effect of excise taxes to be partially offset by the accretion of our investments due to merger accounting.

從費用角度來看，我們預計管理費約為 5,300 萬美元。我們預計獎勵費用約為 3600 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。第四季度，我們預計消費稅將約為 2,400 萬美元。我們預期消費稅的淨影響將被合併會計帶來的投資增加部分抵銷。

The primary drivers of the change from FSK's third quarter adjusted net investment income of $0.74 per share to our expected fourth quarter adjusted net investment income guidance of $0.68 per share are the reduction in interest rates by the Federal Reserve in September and lower fee income in the fourth quarter as compared to the third quarter.

FSK 第三季調整後淨投資收益每股 0.74 美元調整為我們預期的第四季度調整後淨投資收益指引每股 0.68 美元，主要驅動因素是聯準會 9 月降息以及 2019 年費用收入下降。與第三季相比。

Turning to our capital structure. Our gross and net debt to equity levels were 121% and 109%, respectively, at September 30, 2024, as compared to 119% and 109% at June 30, 2024. As of the end of the third quarter, our available liquidity was $4.4 billion and approximately 66% of our drawn balance sheet and 46% of our committed balance sheet was comprised of unsecured debt.

轉向我們的資本結構。截至2024年9月30日，我們的總負債與股本水準分別為121%及109%，而2024年6月30日為119%及109%。截至第三季末，我們的可用流動資金為 44 億美元，我們提取的資產負債表的約 66% 和承諾資產負債表的 46% 由無擔保債務組成。

As a team, we are very focused on managing the right side of our balance sheet and optimizing our capital structure through multiple funding sources. like certain other BDCs, which took advantage of the lower rate environment in 2019 and 2020, FSK has some lower cost debt maturing next year.

作為一個團隊，我們非常注重管理資產負債表的右側並透過多種資金來源來優化我們的資本結構。與其他利用 2019 年和 2020 年較低利率環境的 BDC 一樣，FSK 也有一些成本較低的債務將於明年到期。

In 2025, FSK has approximately $1.2 billion of unsecured notes maturing, representing approximately 10% of our total debt commitments and carrying a weighted average cost of 5.1%. FSK has been a frequent issuer in the unsecured market with a focus on well laddered maturities.

到 2025 年，FSK 將有約 12 億美元的無擔保票據到期，約占我們債務承諾總額的 10%，加權平均成本為 5.1%。FSK 一直是無擔保市場的頻繁發行人，專注於階梯式期限。

We will continue to opportunistically assess the unsecured market and we have over $3.5 billion of undrawn capacity under our senior secured revolving credit facility to utilize should we desire to aid with timing differences.

我們將繼續機會主義地評估無擔保市場，如果我們希望幫助解決時間差異，我們的優先擔保循環信貸安排下擁有超過 35 億美元的未提取能力。

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。

Thank you, Steven. In closing, we are pleased with FSK's third quarter performance as we have further reduced our non-accrual investments and are continuing to see significant new investment opportunities. As we look towards 2025, we believe the next several quarters could yield meaningful opportunities for FSK as the M&A market continues to improve, as we actively pursue well-structured new investments and focus on rotating legacy investments, we believe that 2025 is the potential to be a very active year for FSK.

謝謝你，史蒂文。最後，我們對 FSK 第三季的表現感到滿意，因為我們進一步減少了非應計投資，並繼續看到重要的新投資機會。展望2025 年，我們相信，隨著併購市場持續改善，未來幾季可能會為FSK 帶來有意義的機會，同時我們積極尋求結構良好的新投資並專注於輪調遺留投資，我們相信2025 年有潛力對 FSK 來說，這是非常活躍的一年。

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

接線員，我們現在開始提問。

(Operator Instructions)

（操作員說明）

Bryce Rowe, B Riley Securities.

布萊斯羅 (Bryce Rowe)，B 萊利證券公司。

Thanks a lot. Good morning to everyone. Wanted to, maybe start on just on yields and what you're seeing there in the market. Obviously, you called out yield compression within the portfolio in the quarter of 50 basis points.

多謝。大家早安。我想，也許只是從收益率和你在市場上看到的情況開始。顯然，您指出本季投資組合的收益率壓縮了 50 個基點。

Just wanted to try to understand the impact from lower rates and spread compression within that 50 basis points. And then the guide that you're giving here for the fourth quarter of I guess, lower interest income from rate. Is that all lower rate? Or is there some spread compression kind of baked into that assumption too?

只是想嘗試了解較低利率和 50 個基點內利差壓縮的影響。然後，我猜您在這裡提供的第四季度指南是，利率利息收入較低。都是低利率嗎？或者是否也有一些傳播壓縮也融入了這個假設？

Yeah. Good morning Bryce. Yeah. I think the simple summary is it's a little bit of both, right? Clearly, there was the initial Fed move of the 50 basis points. We have seen from a new deal perspective, your regular way, direct lending deal is probably 500 basis points to 550 basis points that's before kind of fees and OID.

是的。早上好，布萊斯。是的。我認為簡單的總結就是兩者兼而有之，對嗎？顯然，聯準會最初升息了 50 個基點。我們從新交易的角度來看，常規的直接貸款交易可能是 500 到 550 個基點，這還不包括各種費用和 OID。

We have seen some repricing across the book. I think we called that out in our prepared comments. I think for names that we're comfortable with, we like the risk, what we can be supportive of those. We have used a couple of those opportunities to just get repaid.

我們在書中看到了一些重新定價。我想我們在準備好的評論中指出了這一點。我認為對於我們喜歡的名字，我們喜歡風險，我們可以支持這些名字。我們已經利用了其中一些機會來獲得回報。

It is, I think, a little bit of a harder market these days, right? The M&A volumes that everybody has been forecasting, including ourselves have been a little bit slow to return. I think we've been happy with our deployment numbers, but there's a bit of an imbalance in terms of available capital and kind of deal flow, which I think is driving some of that.

我認為現在的市場有點困難，對吧？每個人（包括我們自己）都預測的併購交易量的回歸有點緩慢。我認為我們對我們的部署數字感到滿意，但在可用資本和交易流方面存在一些不平衡，我認為這是其中的推動因素。

All that being said, I think what you are earning on these loans in totality is still north of 10%. And considering, I think, the quality of the company that we are seeing, considering the LTV or the equity check below us that is one comforting fact in terms of total return on these deals.

話雖如此，我認為您從這些貸款中獲得的總收入仍然超過 10%。我認為，考慮到我們所看到的公司的質量，考慮到我們下面的生命週期價值或股權檢查，就這些交易的總回報而言，這是一個令人欣慰的事實。

Okay. That's helpful. And then one more for me, and I'll jump back in queue. But when we think about kind of the guide and obviously, we're getting to a point where most BDCs are seeing earnings compression and putting themselves into a position where you've got dividend coverage starts to fall below 100%, especially when we're thinking about the supplemental plus the base. You guys have plenty of spillover income.

好的。這很有幫助。然後再給我一份，我就會插回隊列。但當我們考慮指南的類型時，顯然，我們已經到了這樣一個地步：大多數 BDC 都看到收益壓縮，並將自己置於股息覆蓋率開始低於 100% 的境地，尤其是當我們「正在考慮補充加基礎。你們有很多溢出收入。

So I think you all have communicated in the past that spillover income is certainly sufficient to bridge any gaps, Kind of curious where you'd like the spillover to kind of base out, so to speak. We're do you want to try to reserve or keep two quarters of spillover versus what you have right now in roughly three?

因此，我認為你們過去都曾表示，溢出收入肯定足以彌合任何差距，可以這麼說，有點好奇你們希望溢出效應在哪裡。您是否想嘗試保留或保留兩個季度的溢出效應，而不是目前大約三個季度的溢出效應？

No, that's a fair question. I think your estimates there are pretty much on point. I do think the spillback income is quite beneficial in the environment that we're in. I would kind of note, I mean, our starting point from an earnings perspective is strong.

不，這是一個公平的問題。我認為你的估計非常正確。我確實認為溢出收入對於我們所處的環境是非常有益的。我想指出，我的意思是，從獲利角度來看，我們的起點是強大的。

I think 12.2% on NAV from a yield perspective is attractive. I think we are, as Steven talked about, forecasting lower income and lower fee income in Q4. I think the one thing that we're going to, we'll watch play out is we do believe increased activity in '25 will occur, that should be beneficial to that fee income line and provide some offset. But yes, the nearly three quarters of spillback is available as it relates to $0.70.

我認為從收益率的角度來看，12.2%的淨值是有吸引力的。我認為，正如史蒂文所說，我們預測第四季的收入和費用收入都會下降。我認為我們將要關注的一件事是，我們確實相信 25 年的活動將會增加，這應該有利於該費用收入線並提供一些抵消。但是，是的，近四分之三的溢出是可用的，因為它與 0.70 美元相關。

Okay. Thank you guys.

好的。謝謝你們。

Thank you.

謝謝。

Casey Alexander, Compass Point.

凱西·亞歷山大，指南針點。

Yeah, hi, good morning. The income generation in the quarter was, I think, better actually than most of us expected. But there was a meaningful, especially over the last two quarters increase in PIK income. Can you give us some sense of how you expect that to develop next quarter and in some of the succeeding quarters?

是的，嗨，早安。我認為，本季的收入實際上比我們大多數人的預期要好。但 PIK 收入出現了有意義的成長，尤其是在過去兩個季度。您能否告訴我們您預計下個季度以及隨後的一些季度的發展情況如何？

Yeah, good morning Casey. Yes. I think in PIK, in terms of the PIK, I kind of frame it in one way, and then maybe Brian will talk about some of the specific deals. While it's a smaller part of our portfolio, we have been active in certain junior debt deals. Athena health would be an example of that. So of the PIK income, roughly half of that is what I'll call regular way kind of new business.

是的，早上好，凱西。是的。我認為在 PIK 中，就 PIK 而言，我以一種方式建立它，然後布萊恩可能會談論一些具體的交易。雖然它只占我們投資組合的一小部分，但我們一直積極參與某些初級債務交易。雅典娜健康就是一個例子。因此，在 PIK 收入中，大約有一半是我所說的常規方式新業務。

A lot of those companies end up being kind of a larger size, which we like more risk perspective. I think when we did the Athena deal, as an example, it was like $1 billion of EBITDA. The rest of it, as Steve called out, was related to a handful of names.

很多這樣的公司最終規模都更大了，我們更喜歡這樣的風險視角。我認為，以我們進行 Athena 交易為例，EBITDA 約為 10 億美元。正如史蒂夫所說，剩下的部分與幾個名字有關。

And those names, we're using that as they were reinvesting dollars into kind of growth activities which I think we're supportive of them doing. But I think in terms of the forward outlook, I think we were roughly 15% this quarter. You're probably in and around that range my guess would be for the next couple of quarters. But Brian, you might want to add to that.

我們使用這些名稱是因為他們將美元再投資於某種成長活動，我認為我們支持他們這樣做。但我認為就前景而言，本季我們的成長率約為 15%。我猜接下來幾季你可能會處於這個範圍內。但是布萊恩，你可能想補充一點。

Yes. Look, I think when you step back, as it relates to these (inaudible) when we restructure businesses, we always have debt capacity to the current projecting earnings part of the business. But these businesses are being restructured because these are underperforming. They've lacked strategic guidance. They often need management upgrades.

是的。聽著，我認為當你退一步時，因為它與我們重組業務時的這些（聽不清楚）有關，我們總是對業務的當前預計盈利部分有債務能力。但這些業務正在重組，因為它們表現不佳。他們缺乏策略指導。他們經常需要管理升級。

They may have been under invested in SG&A or CapEx. And we structured these loans, this new debt with a PIK option, which gives us an management flexibility to address the underperformance issues and gives us, but we do have sign off on all the budgeting since we're on the Board.

他們可能在 SG&A 或資本支出方面的投資不足。我們用PIK 選項建立了這些貸款，即這種新債務，這為我們提供了管理靈活性，以解決績效不佳的問題，並為我們提供了，但自從我們加入董事會以來，我們確實已經簽署了所有預算。

So I do think these PIKs they're not surprising. They were intentionally structured. And I think currently, the deals that do have that option are utilizing it, that may address your question about the future. But again, there's a lot of thought that goes into how we structure these deals and really focusing on the ultimate outcome in activity.

所以我確實認為這些 PIK 並不令人驚訝。它們是有意建造的。我認為目前，確實有這種選擇的交易正在利用它，這可能會解決你對未來的問題。但同樣，我們對如何建立這些交易以及如何真正關注活動的最終結果進行了許多思考。

Okay, thanks. My next question is, last year around this time, you gave kind of pretty clear indications of how you sort of intended to manage the dividend for 2024, and it ended up getting broken into kind of three components. I'm curious if you have any view of how you think the Board expects to handle it, especially against, a, rate compression, b, declining base rates would it be your expectation that in 2025, investors should think more in terms of the base dividend and then see how things develop through 2025.

好的，謝謝。我的下一個問題是，去年這個時候，您非常明確地表明了您打算如何管理 2024 年的股息，最終它分為三個部分。我很好奇您對董事會希望如何處理這個問題有什麼看法，特別是針對 a、利率壓縮、b、基本利率下降，您是否期望在 2025 年，投資者應該更多地考慮基本股息，然後看看2025年情況如何發展。

And thanks for that, Casey. I think we try to be pretty transparent the way we thought about dividend policy. And you are correct, we broke it into kind of three pieces, right? We wanted to reward shareholders for what's called outperformance on the income side, that was the $0.05 that was the additional that I think we paid for five straight quarters.

謝謝你，凱西。我認為我們在考慮股息政策時盡量保持透明。你是對的，我們把它分成了三塊，對吧？我們希望獎勵股東所謂的收入方面的優異表現，即 0.05 美元，我認為這是我們連續五個季度支付的額外費用。

We have broken it down into the $0.64 and the six to get to the [$0.70]. I think when we do talk about this with the Board, we do think about it over a longer term and a longer-term horizon, right? That's why we did set the base at [$0.64]. I think we'll continue to evaluate that with the Board.

我們將其分解為 0.64 美元和 6 美元以獲得[0.70 美元]。我認為當我們與董事會討論這個問題時，我們確實會從更長遠的角度考慮這個問題，對嗎？這就是為什麼我們將基數設定為[0.64 美元]。我認為我們將繼續與董事會一起評估這一點。

I think you had an interesting piece out yesterday, as it relates to the potential impact of the presidential election. Our, I think our initial gut is while rates will continue to trend down, it probably will be a little bit slower than maybe we would have guessed 30 or 60 days ago.

我認為你昨天發表了一篇有趣的文章，因為它與總統選舉的潛在影響有關。我認為我們最初的直覺是，雖然利率將繼續下降，但可能會比我們 30 或 60 天前猜測的要慢。

So I think we have to kind of watch that play out. I think we have to watch the deal volume sort of play out, see what that does to kind of fee income. But I would go back to Bryce's question, we're at the upper end of the range on the spill back and that's available to support that $0.70 number we've been paying out.

所以我認為我們必須靜觀其結果。我認為我們必須觀察交易量的表現，看看這對費用收入有何影響。但我想回到 Bryce 的問題，我們處於溢回範圍的上限，這可以支持我們一直支付的 0.70 美元。

And just to be clear and put a fine point on it, the $0.05 was the spillover that we were paying after five quarters and (inaudible) the was what reflects in the higher rate environment that we were not reading in.

需要明確一點的是，0.05 美元是我們在五個季度後支付的溢出效應，（聽不清楚）這反映在我們沒有讀到的較高利率環境中。

All right, great. Thank you for taking my questions.

好吧，太好了。感謝您回答我的問題。

Thank you, Casey.

謝謝你，凱西。

John Hecht, Jefferies.

約翰‧赫克特，傑弗里斯。

Thanks very much for taking my questions. Actually, a couple just were asked. But I'm wondering on the investment pipeline, I mean, Dan, it sounded like there's more activity, but maybe the kind of pipeline of activity growth isn't quite as much as you would have expected.

非常感謝您回答我的問題。事實上，剛剛有一對夫婦被問到。但我想知道投資管道，我的意思是，丹，聽起來好像有更多的活動，但也許活動成長的管道並不像你預期的那麼多。

I guess my question is, as you look into 2025, given the forward curve and some anticipated maybe de-regulation. Do you think that the M&A pipeline and the investment pipeline will grow over the course of the next few quarters? Or is kind of where we are, where we are?

我想我的問題是，當你展望 2025 年時，考慮到遠期曲線和一些預期的可能放鬆管制。您認為未來幾季的併購管道和投資管道會成長嗎？還是我們在哪裡，我們在哪裡？

Yes. Thanks, John. I think we do believe that it will grow, right? You have the continued fact out there that the holding period for a bunch of these deals that are sponsor owned has been probably longer than intended. You do have, I think, a continued focus from LPs to get capital back out of these funds. So I think there is a certain amount of pressure to sell some of these companies.

是的。謝謝，約翰。我想我們確實相信它會增長，對吧？持續存在的事實是，贊助商擁有的一系列此類交易的持有期可能比預期的要長。我認為，有限合夥人確實持續關注從這些基金中收回資本。所以我認為出售其中一些公司存在一定的壓力。

There's a lot of dry powder on the private equity side, that's arguably getting kind of further down the road inside of fun life. So you have the capital there to be involved or acquire these companies. So I think that setup kind of remains. It probably has been well, let's just call it slower to start than I think we would have guessed maybe at the start of '24.

私募股權方面有很多乾粉，可以說它們在樂趣生活的道路上走得更遠。所以你有資本參與或收購這些公司。所以我認為這種設定仍然存在。情況可能還不錯，我們可以說它的啟動速度比我認為我們在 24 年初所猜測的要慢。

I think we did out of a view that to make the bid-ask kind of difference narrow, you needed kind of market participants to get their arms around inflation being under control rates being, let's call it, more stable and kind of the hard landing being removed from people's kind of mines. I think that all happened, but I think we have seen more and more people anticipating these rate reductions.

我認為我們這樣做的目的是為了縮小買賣差價，你需要某種市場參與者來控制通貨膨脹，讓我們稱之為更穩定和硬著陸被從人們的地雷中移除。我認為這一切都發生了，但我認為我們已經看到越來越多的人期待這些降息。

So it has been kind of slower. Now all that said, when I do look at the pipeline, I do look at activity of the deal teams. It's been the highest, it's been since the start of '22, so I think that's positive. So I think we do expect that to play out as we get into 2025.

所以速度有點慢。話雖如此，當我查看管道時，我確實查看了交易團隊的活動。這是自 22 年初以來的最高水平，所以我認為這是積極的。因此，我認為我們確實預計這種情況會在 2025 年到來時實現。

Okay, That's helpful context. And then maybe just from a credit outlook perspective, is there anything to talk about or maybe call out in terms of EBITDA or revenue trends within the portfolio at the company level?

好的，這是有用的背景。然後，也許只是從信用前景的角度來看，在公司層級的投資組合內的 EBITDA 或收入趨勢方面，有什麼可以談論或可以指出的嗎？

Yeah. I think two things. I mean number one, we've still seen revenue and EBITDA growth. I think that's positive. I would say that revenue and EBITDA growth has been slower than we would have seen maybe in the years prior.

是的。我認為有兩件事。我的意思是，第一，我們仍然看到收入和 EBITDA 成長。我認為這是積極的。我想說的是，收入和 EBITDA 的成長速度比我們前幾年看到的要慢。

So I think we are kind of watching that. And I think all market participants would probably say this, but we are in an environment with where rates have been that most companies interest coverage ratios are just tighter than we'd probably like it to be.

所以我認為我們正在關注這一點。我認為所有市場參與者可能都會這麼說，但我們所處的環境是，大多數公司的利息保障倍數都比我們希望的要緊。

So I think that does provide a backdrop if there is a challenge, if somebody does lose a customer, they had done a bad M&A deal or what it might be. These kind of issues bubble to the surface more because there's not a lot of room to maneuver.

因此，我認為這確實提供了一個背景，如果存在挑戰，如果有人確實失去了客戶，他們做了一筆糟糕的併購交易或可能是什麼。由於沒有太多迴旋餘地，此類問題更容易浮現。

I think that obviously can change a little bit the one benefit of a falling rate environment is kind of more cash flow at these kind of companies. But I think in totality, it's generally been positive. I think some of the issues that we have seen either in the portfolio or in the market have been more idiosyncratic to the particular name than anything that's more widespread.

我認為這顯然可以稍微改變一點，利率下降環境的一個好處是這類公司的現金流量增加。但我認為總的來說，這總體上是積極的。我認為我們在投資組合或市場中看到的一些問題對於特定名稱來說比任何更普遍的問題都更特殊。

Yes. And really, the couple factor is that we've been seeing underperforming over the course of the year, sort of continue to be anything that sort of touching old (inaudible) exposure to. But consumer product companies are being far down because the retailers just are carrying much lower levels of inventory.

是的。事實上，有兩個因素是，我們在這一年中一直看到表現不佳，仍然是任何接觸舊（聽不清楚）的東西。但消費品公司的業績卻大幅下滑，因為零售商的庫存水準要低得多。

People keep talking about destocking. I don't know how you destock for two years, but I think you're talking about just a lower inventory model. And then within, in industrial, there's certain markets of weakness, given I think this year, there was more of a conservative outlook on capital spend in a lower rate environment, that should be positive.

人們一直在談論去庫存。我不知道兩年來你是如何去庫存的，但我認為你所說的只是一種較低的庫存模式。然後，在工業領域，存在著某些疲軟的市場，考慮到今年，在較低利率環境下，資本支出的前景更加保守，這應該是積極的。

Great. Thanks very much.

偉大的。非常感謝。

Thanks, John.

謝謝，約翰。

Mark Hughes, Truist.

馬克‧休斯，真理主義者。

Yeah, thanks. Good morning. The repricing activity you've seen portfolio companies looking for better terms. How has that trended over the last few months? Is that kind of a step function you see the rates change? Or is that just flow with the day-to-day interest rates and spreads?

是的，謝謝。早安.您已經看到投資組合公司正在尋求更好的條款的重新定價活動。過去幾個月的趨勢如何？您看到的利率變動是那種階躍函數嗎？還是這只是隨著日常利率和利差而流動？

I think it's probably, maybe a little bit more nuanced than that, right? I mean, I think it's based upon what I would call new deal activities. You have data points out there that someone can sort of comp to. I think companies can only really make those ask as they've had steady performance over a period of time.

我認為這可能比這更微妙，對吧？我的意思是，我認為這是基於我所謂的新交易活動。你有數據點，有人可以進行比較。我認為公司只有在一段時間內表現穩定的情況下才能真正提出這些要求。

So the one, let's call it, positive thing of the re-pricings would be a high correlation to well-performing businesses. I think we would have a thesis, Mark, that as rates do fall, I think that will put some, a little bit of pressure on spreads to widen.

因此，我們可以稱之為重新定價的正面因素是與業績良好的企業高度相關。馬克，我認為我們會有一個論點，即隨著利率確實下降，我認為這會給利差擴大帶來一些壓力。

I don't think that will be basis point per basis point in any scenario. But I think general kind of fixed income markets as the benchmark sort of change, there will be some impact on credit spreads. Obviously, the benchmark moved almost 500 basis points and you've seen some spread reduction since January '22. So I think it is sort of case by case, but I think we would expect as rates fall a bit of movement wider on spreads.

我認為在任何情況下這都不會成為每個基點的基點。但我認為一般固定收益市場隨著基準種類的變化，會對信用利差產生一定的影響。顯然，基準移動了近 500 個基點，並且自 22 年 1 月以來利差有所縮小。所以我認為這要視具體情況而定，但我認為隨著利率下降，利差會出現更大的波動。

Okay. And then have you seen any change in the trajectory on that activity in the recent months? Or has it been reasonably steady?

好的。那麼近幾個月來您是否看到該活動的軌跡發生了任何變化？或者說已經相當穩定了？

Yes. I would say it's probably been a little bit slower, right, or at least kind of spreads have settled at a level. I think there's a level of where our spreads are that on particular deals wouldn't make sense for pools of capital like this. So I think there's a little bit of a floor there. But I think you've seen, let's call it, a bit of slowdown notifying kind of that sort of bottom point.

是的。我想說，這可能有點慢，對吧，或者至少利差已經穩定在一個水平上。我認為我們的利差在某種程度上對於特定交易來說對於這樣的資本池來說是沒有意義的。所以我認為那裡有一點地板。但我認為你已經看到了，我們稱之為，一點點放緩，通知某種類型的底部。

Yes. And then you talked about passing on more deals, based on the pricing issue you're maintaining your discipline. When you think about kind of when you do pass credit versus competition, what's the usual dynamic there? And maybe if you can't separate those because they're interrelated. But, how significant is that when you get a little tighter market? How much harder is it to see the origination activity and your usual ratios?

是的。然後你談到了根據你保持紀律的定價問題傳遞更多交易。當你考慮在競爭中傳遞信用時，通常的動態是什麼？也許你無法將它們分開，因為它們是相互關聯的。但是，當市場稍微緊張時，這有多重要呢？查看發起活動和您通常的比率有多困難？

Yes. I'll probably answer it a little bit differently, but tell me if it makes sense. I think we have, as I mentioned, been happy to see, let's call it, an uptick of activity. I think the larger lenders like us do benefit from these existing portfolios, so you can maintain that incumbency position. We can pass on deals for a multitude of reasons. I mean sometimes it's just the sector of the credit. We're not going to do it. Those deals probably don't even make it to a screening or an investment committee.

是的。我可能會以不同的方式回答它，但請告訴我這是否有意義。正如我所提到的，我認為我們很高興看到（我們可以稱之為）活動的增加。我認為像我們這樣的大型貸方確實可以從這些現有的投資組合中受益，因此您可以維持現有的地位。我們可以出於多種原因放棄交易。我的意思是有時這只是信貸部門。我們不會這麼做。這些交易可能甚至沒有進入篩選或投資委員會。

It's more of a desk kill. There are deals we won't play in because of where it's priced versus where we think it should be priced. That said, I think our primary focus is on credit and then there are structural pieces, right?

這更像是一場辦公桌殺戮。有些交易我們不會參與，因為它的定價與我們認為應該定價的不同。也就是說，我認為我們的主要關注點是信貸，然後還有結構性部分，對嗎？

I mean there are certain asks on certain deals that we think is a step too far for private debt or liquid credit and we've walked away from certain deals after having done a lot of work on it because it was not comfortable in the structure.

我的意思是，對某些交易提出了某些要求，我們認為這些要求對於私人債務或流動信貸來說太過分了，在做了大量工作後，我們放棄了某些交易，因為它的結構不舒服。

Yes. Look, I think the other thing to note is that our leverage is currently in the middle of our target range. So there's no pressure to deploy. I mean, we do benefit as Dan set from those compositions. And when repricings occur, we might to credit, we maintain.

是的。看，我認為另一件事需要注意的是，我們的槓桿率目前處於目標範圍的中間。所以沒有部署壓力。我的意思是，當丹從這些作品中設定時，我們確實受益匪淺。我們認為，當重新定價發生時，我們可能會相信。

And maybe one last point, Mark, I think it is important. I think we're very focused on maintaining kind of that broad origination funnel, right? We've always talked about being active in the upper end of the middle market, we'd probably classify that as $50 million to $150 million of EBITDA.

也許最後一點，馬克，我認為這很重要。我認為我們非常注重維持廣泛的發起管道，對嗎？我們一直在談論活躍於中端市場的高端，我們可能會將其歸類為 5,000 萬至 1.5 億美元的 EBITDA。

Obviously, when the syndicated loan markets were shut in '22 and '23, we had the opportunity to participate in some larger deals. I think those were on a very, very good risk reward. We are prepared to go down to a lower number than that $50 million. The floor is probably 25%, but there's a very high bar for that. It would be an industry or a sector that we really like.

顯然，當銀團貸款市場在 22 年和 23 年關閉時，我們有機會參與一些更大的交易。我認為這些都是非常非常好的風險報酬。我們準備將這個數字降至 5000 萬美元以下。下限可能是 25%，但這個門檻非常高。這將是我們真正喜歡的行業或部門。

We're probably lending to one of their competitors. So we've got a real view in it that it's going to grow. But we do think it's important to have a broad kind of funnel there. We've got a very active non-sponsor business. We have people dedicated to that. We think that's helpful. We've been active in some of the ABL activity, let's call that receivables and inventory, right?

我們可能正在向他們的競爭對手之一提供貸款。所以我們確實認為它會成長。但我們確實認為建立廣泛的管道很重要。我們有非常活躍的非贊助商業務。我們有專人致力於此。我們認為這很有幫助。我們一直積極參與一些 ABL 活動，我們稱之為應收帳款和庫存，對吧？

We find those deals quite interesting from a risk-adjusted return perspective. And then our asset based finance business remains active. We talked about discover in our prepared remarks, but those deals are generally returning several 100 basis points wide of what we're seeing in direct lending. So I think that broad funnel is an advantage to us and the ability to deploy across different companies, sponsor, non-sponsor and things like asset based finance is quite important.

從風險調整報酬的角度來看，我們發現這些交易非常有趣。然後我們的資產金融業務仍然活躍。我們在準備好的演講中談到了發現，但這些交易的回報率通常比我們在直接貸款中看到的高出 100 個基點。因此，我認為廣泛的管道對我們來說是一個優勢，在不同公司、贊助商、非贊助商以及基於資產的融資等方面進行部署的能力非常重要。

Yeah. Thanks for that perspective. Appreciate it.

是的。感謝您的觀點。欣賞它。

Have a good day.

祝你有美好的一天。

Thank you.

謝謝。

Kenneth Lee, RBC.

肯尼斯李，加拿大皇家銀行。

Hey, good morning. Thanks for taking my question. Just one follow-up on that last comment around the asset based finance opportunities there. Wondering which benchmark rates are they typically keyed off given that they're fixed rates, and it sounds like the spreads are pretty wide right now. Just any kind of additional color there around that? Thanks.

嘿，早安。感謝您提出我的問題。只是對最後關於基於資產的融資機會的評論的一個後續行動。想知道他們通常會放棄哪些基準利率，因為它們是固定利率，而且聽起來現在利差相當大。周圍有任何額外的顏色嗎？謝謝。

Yes. No, happy to give. It is a different, let's call it, return profile in a lot of ways than what you're seeing in direct lending. I think you could either have our loan portfolios that you're buying, that the underlying loans themselves are fixed rate. We're usually using the bank market or the capital markets to finance those loan portfolios. So you can generate kind of that, what I'll call fixed rate return.

是的。不，很高興給予。我們稱之為回報率，它在許多方面都與您在直接貸款中看到的不同。我認為您可以擁有我們正在購買的貸款組合，基礎貸款本身是固定利率的。我們通常利用銀行市場或資本市場為這些貸款組合融資。所以你可以產生這樣的東西，我稱之為固定利率報酬。

Even though if it's floating rate loans, if we are financing, and we'll be financing with floating rate debt, you're effectively creating that more kind of stable or almost fixed rate return profile. In that part of the market, I don't think we think about it entirely like spreads, you're acquiring these asset portfolios thinking about making a kind of targeted return on it, that's generally in kind of the mid-teens type context. We remain quite bullish on the market opportunity there.

即使是浮動利率貸款，如果我們正在融資，並且我們將透過浮動利率債務進行融資，那麼您實際上正在創建更穩定或幾乎固定的利率回報狀況。在市場的這一部分，我認為我們並不完全像利差一樣思考它，你在獲取這些資產投資組合時考慮的是獲得某種目標回報，這通常是在十幾歲左右的背景下。我們仍然非常看好那裡的市場機會。

We think that market is approaching $7 trillion of market size. That doesn't mean everything is for us. But that does mean there's a lot of white space because there has not necessarily been a lot of scale capital raised, and we're fortunate to have 50 people dedicated to that space. There's some pretty good tailwinds there that we expect to continue to be quite active.

我們認為該市場的市場規模已接近 7 兆美元。這並不意味著一切都適合我們。但這確實意味著存在大量空白，因為不一定籌集大量規模的資金，而且我們很幸運有 50 名員工致力於該領域。那裡有一些相當好的順風因素，我們預計這些因素將繼續非常活躍。

Got you. Very helpful there. And just one follow-up on the comments around the PIK income and the earlier comments you made there. I just want to clarify, how much of the PIK income is, was originally underwritten as PIK versus electing? Thanks.

明白你了。那裡非常有幫助。關於 PIK 收入的評論以及您之前發表的評論只是一個後續行動。我只是想澄清一下，PIK 收入中有多少最初是作為 PIK 承保的，而不是作為選舉的？謝謝。

Roughly half.

大約一半。

Okay. Got you. That's all I had. Thanks again.

好的。明白你了。這就是我所擁有的一切。再次感謝。

Thank you.

謝謝。

Melissa Wedel, JPMorgan.

梅麗莎‧韋德爾，摩根大通。

Good morning. Thanks for taking my questions. Just to follow up on the theme of PIK, definitely take your point that those were, those deals were structured to give some flexibility during perhaps a return around. I'm curious how PIK versus cash paying income will impact sort of if it impacts and to what extent it impacts your fair value marks over time, particularly as you see in certain deals PIK persisting longer than you would have originally expected?

早安.感謝您回答我的問題。為了跟進 PIK 的主題，請務必接受您的觀點，這些交易的結構是為了在可能的回歸期間提供一定的靈活性。我很好奇，隨著時間的推移，PIK 與現金支付收入相比會如何影響您的公允價值標記，尤其是當您在某些交易中看到PIK 持續時間比您最初預期的時間長時，它會在多大程度上影響您的公允價值標記？

Yeah, good morning, Melissa. Yes, I would say, and Brian, you might want to add to this. It's probably, it's going to be very much on a case-by-case basis. I think you could probably make a correlation that if a company is forced to pick for an extended period of time, the company could be underperforming.

是的，早上好，梅麗莎。是的，我會說，布萊恩，你可能想補充一下。很可能，這將根據具體情況而定。我認為你可能會做出這樣的關聯：如果一家公司被迫在很長一段時間內進行選擇，那麼該公司可能會表現不佳。

But on the other side of that, you could have, because these companies are in turnaround kind of either the seeds being planted or some meaningful, let's call it, upside kind of on the revenue side. So I think you are independently valuing these businesses based upon what their financial performance is and all the other inputs that would go into the valuation model. So there's probably not kind of the perfect answer, but it's, and Brian, feel free to add to that.

但另一方面，你也可以這樣做，因為這些公司正在扭虧為盈，要么正在播下種子，要么在收入方面取得了一些有意義的、讓我們稱之為上行的東西。因此，我認為您是根據這些企業的財務表現以及進入估值模型的所有其他輸入來獨立評估這些企業的。所以可能沒有完美的答案，但它是，布萊恩，請隨意補充。

Yes. I mean, look, when you own a business, you're always making capital decisions and trying to figure out how, what dollars can be invested at the highest return on capital. So I mean that sort of goes to the commentary of flexibility, because we are very much focused on the long-term exit in all of these. And look, it's going to be performance related in terms of and capital decision-making related decisions as we go forward in terms of what the company is continue to pick it up.

是的。我的意思是，當你擁有一家企業時，你總是在做出資本決策，並試圖弄清楚如何投資、投資哪些資金以獲得最高的資本回報。所以我的意思是，這涉及到靈活性的評論，因為我們非常關注所有這些方面的長期退出。看，隨著我們繼續推進公司的發展，這將與績效和資本決策相關。

Okay. And then to your comments about rates likely to trend lower, but the initial thought is maybe they won't go as low or as quickly as we would have thought a few months ago. Does that impact how you're thinking about sort of credit trends across the industry broadly. We think if there's a slower pace of rate decline that a natural trade-off on that would be a bit more distressed or default activity. Thanks.

好的。然後是您對利率可能會下降的評論，但最初的想法是利率可能不會像我們幾個月前想像的那麼低或那麼快。這是否會影響您對整個行業信用趨勢的看法？我們認為，如果利率下降的速度較慢，那麼自然的權衡將是更多的不良或違約活動。謝謝。

No, it's a fair question. And I think our thoughts on this are probably evolving because obviously, there were some pretty big market moves in the last couple of days. I think we've always expected the Fed to be kind of disciplined as they've bring down kind of rates.

不，這是一個公平的問題。我認為我們對此的想法可能正在演變，因為顯然，過去幾天出現了一些相當大的市場波動。我認為我們一直期望聯準會在降低利率時保持一定的紀律。

I think the Fed has done a nice job of getting inflation under control. I think there are certain things that could happen in this Republic administration that could be viewed as inflationary. That said, I think the big focus was to, of the election was to make sure inflation is under control.

我認為聯準會在控制通膨方面做得很好。我認為，在本屆共和國政府中可能會發生一些可能被視為通貨膨脹的事情。也就是說，我認為選舉的重點是確保通膨得到控制。

So I think it will be balanced there. I don't think that slower pace, though, Melissa, is kind of that long to have a real impact to kind of credit. I just, if you were thinking that there was going to be three or four rate cuts in the next, let's call it, 12 to 18 months, maybe you're just kind of one lower than that or one less than that. But it's, I think it will be interesting to watch how that kind of plays out in the coming months and the coming quarters.

所以我認為那裡會平衡。不過，梅麗莎，我認為放慢步伐不會對信用產生真正的影響。我只是，如果你認為接下來，我們稱之為 12 到 18 個月，將會有三到四次降息，也許你只是比這個數字低一次或比這個少一次。但我認為，觀察這種情況在未來幾個月和未來幾季的表現將會很有趣。

Yes. Look, I'll add is where it's less constructive to the equity in these deals. Higher rates have extended the whole period for companies had less aid debt (inaudible). To the extent rates stay higher it could extend, but that's offset by the pressure that LPs are putting on GPs to sell assets and return capital. So there's certainly a balance there.

是的。我要補充的是，這些交易對股權的建設性較差。較高的利率延長了援助債務較少的公司的整個期限（聽不清楚）。如果利率保持在較高水平，它可能會延長，但這被有限合夥人向普通合夥人施加的出售資產和返還資本的壓力所抵消。所以那裡肯定存在著平衡。

Got it. Thank you.

知道了。謝謝。

That concludes our question and answer session. I'd now like to hand back over to Dan Pietrzak for closing remark.

我們的問答環節到此結束。現在我想請 Dan Pietrzak 作結束語。

Well, thank you everyone for your time today. We're always available for any follow up points as needed. We do wish everyone a great holiday season and we'll talk with you next quarter. Thank you.

好的，謝謝大家今天抽出時間。我們隨時可以根據需要提供任何跟進點。我們衷心祝福每個人都有一個愉快的假期，我們將在下個季度與您交談。謝謝。

Thank you for attending today's call. You may now disconnect. Have a wonderful day.

感謝您參加今天的電話會議。您現在可以斷開連線。祝你有美好的一天。