Hercules Capital Inc (HTGC) 2024 Q2 法說會逐字稿

Good day, everyone, and thank you for standing by. Welcome to Hercules Capital second quarter 2024 financial results and conference call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions)

大家好，感謝你們的支持。歡迎來到 Hercules Capital 2024 年第二季財務業績和電話會議。此時，所有參與者都處於只聽模式。演講者演講結束後，將進行問答環節。（操作員說明）

And please be advised that today's conference is being recorded. I will hand the call over to the Managing Director of Investor Relations, Michael Hara. Please go ahead.

請注意，今天的會議正在錄製中。我會將電話轉交給投資人關係董事總經理 Michael Hara。請繼續。

Thank you, Carmen. Good afternoon, everyone, and welcome to Hercules conference call for the second quarter 2024. With us on the call today from Hercules are Scott Bluestein, CEO and Chief Investment Officer; and Seth Meyer, CFO.

謝謝你，卡門。大家下午好，歡迎參加 Hercules 2024 年第二季電話會議。今天與我們一起參加 Hercules 電話會議的是執行長兼首席投資長 Scott Bluestein；和財務長塞思·邁耶 (Seth Meyer)。

Hercules' financial results were released just after today's market close and can be accessed from Hercules' Investor Relations section at investor.htgc.com. An archived webcast replay will be available on the Investor Relations webpage for at least 30 days following the conference call.

Hercules 的財務表現於今天收盤後發布，可透過 Investor.htgc.com 的 Hercules 投資者關係部分查看。電話會議後至少 30 天內，投資者關係網頁上將提供存檔的網路廣播重播。

During this call, we may make forward-looking statements based on our own assumptions and current expectations. These forward-looking statements are not guarantees of future performance and should not be relied upon in making any investment decisions.

在本次電話會議中，我們可能會根據我們自己的假設和當前預期做出前瞻性陳述。這些前瞻性陳述並非對未來績效的保證，不應被依賴於做出任何投資決策。

Actual financial results may differ from the forward-looking statements made during this call for a number of reasons, including but not limited to the risks, the risks identified in our annual report on Form 10-K and other filings that are publicly available on the SEC's website. Any forward-looking statements made during this call are made only as of today's date, and Hercules assumes no obligation to update any such statements in the future.

由於多種原因，實際財務結果可能與本次電話會議期間做出的前瞻性陳述有所不同，包括但不限於風險、我們在10-K 表格年度報告和其他可在網站上公開取得的文件中確定的風險。本次電話會議期間所做的任何前瞻性陳述僅截至今天為止，Hercules 不承擔將來更新任何此類陳述的義務。

With that, I'll turn the call over to Scott.

這樣，我會將電話轉給史考特。

Thank you, Michael, and thank you all for joining the Hercules Capital Q2 2024 earnings call. Following our record funding activity in Q1 2024, we followed up with a record second quarter of total gross fundings of $461.5 million, which led to record total gross fundings of $1.07 billion for the first half of 2024. This is the first time in our 20 year history, where we have delivered more than $1 billion of gross fundings in the first half of the calendar year.

謝謝邁克爾，也謝謝大家參加 Hercules Capital 2024 年第二季財報電話會議。繼 2024 年第一季創紀錄的融資活動之後，我們第二季的融資總額達到創紀錄的 4.615 億美元，這使得 2024 年上半年的融資總額達到創紀錄的 10.7 億美元。這是我們 20 年歷史上的第一次，我們在上半年交付的總資金超過 10 億美元。

Our origination and funding performance in the first half continues to reflect the benefits of being able to operate an institutional venture and growth stage lending platform at scale and being the clear market leader in the asset class, our ability to again deliver creative solutions for our new borrowers and strong results for our shareholders in Q2, while managing our balance sheet and business conservatively positions us well heading into the second half of 2024.

我們上半年的發起和融資表現繼續反映出能夠大規模營運機構風險投資和成長期貸款平台以及成為資產類別中明顯的市場領導者的好處，我們有能力再次為我們的新產品提供創造性的解決方案。

Hercules, strong performance continues to be driven by our committed employees, our team first culture that emphasizes internal and external collaboration and a balance sheet that is liquid long term oriented and institutional. As of the end of Q2, Hercules Capital is now managing approximately $4.6 billion of assets, an increase of 14.7% from where we were a year ago.

赫拉克勒斯，強勁的業績繼續由我們忠誠的員工、強調內部和外部協作的團隊第一文化以及面向長期和製度的流動性資產負債表推動。截至第二季末，Hercules Capital 目前管理著約 46 億美元的資產，比一年前成長 14.7%。

We continue to expect the second half of 2024 to experience higher than normal market and macro volatility, given the presidential election and potential changes in the global geopolitical environment.

鑑於總統選舉和全球地緣政治環境的潛在變化，我們仍然預計 2024 年下半年市場和宏觀波動將高於正常水平。

As we discussed on our last call, we expected the market environment for new originations to improve throughout 2024, and we have certainly witnessed this in the first half of the year. While Q3 is typically a seasonally slow quarter for new originations, we remain optimistic about our funding activity over the second half of the year.

正如我們在上次電話會議中討論的那樣，我們預計新產品的市場環境將在 2024 年全年得到改善，我們在今年上半年確實見證了這一點。雖然第三季度對於新項目來說通常是季節性放緩的季度，但我們對下半年的融資活動仍然持樂觀態度。

We intend to continue to manage our business and our balance sheet defensively while maintaining maximum flexibility to take advantage of market opportunities. This includes continuing to enhance our liquidity position, maintaining low leverage, tightening our credit screens for new underwritings and maintaining our higher than normal first-lien exposure, which increased again in Q2 to 90.1%, up from 88.4% in Q1.

我們打算繼續防禦性地管理我們的業務和資產負債表，同時保持最大的靈活性以利用市場機會。這包括繼續增強我們的流動性頭寸、維持低槓桿率、收緊新承銷的信用篩選以及維持高於正常水平的第一留置權風險敞口（第二季度再次增加至90.1%，高於第一季度的88.4%）。

Let me now recap some of the key highlights of our performance for Q2. Given the strength of the technology markets and the moderate improvement in valuations, we continue to see a steady volume of quality, later-stage companies looking to add new capital to their balance sheets. We are enthusiastic about the profile of the companies that we have been able to partner with over the last several quarters and our primary focus remains on quality credits.

現在讓我回顧一下我們第二季度業績的一些主要亮點。鑑於科技市場的強勁和估值的適度改善，我們繼續看到大量優質的後期公司尋求為其資產負債表添加新資本。我們對過去幾季能夠合作的公司的概況充滿熱情，我們的主要關注點仍然是品質信用。

In Q2, we originated total gross debt and equity commitments of over $686 million and record Q2 gross fundings of nearly $462 million, given the strong funding start for the first half. For Q2, we generated record total investment income of $125 million, up nearly 8% year over year and net investment income of $82.4 million, up nearly 9% year over year for $0.51 per share and providing 128% coverage of our base distribution of $0.4 per share.

鑑於上半年融資開局強勁，第二季我們的債務和股權承諾總額超過 6.86 億美元，第二季融資總額創歷史新高，接近 4.62 億美元。第二季度，我們創造了創紀錄的總投資收入1.25 億美元，年增近8%，淨投資收入為8,240 萬美元，年增近9%，每股0.51 美元，並為我們的基礎分配0.4 美元提供了128% 的覆蓋率每股。

We were able to achieve 128% coverage of our base distribution, despite ending the quarter with very conservative GAAP leverage of 94.8%. This is our fifth consecutive quarter of over $100 million of quarterly core income, which excludes the benefit of prepayment fees or fee accelerations from early repayments.

儘管本季末的 GAAP 槓桿率非常保守，為 94.8%，但我們仍實現了 128% 的基礎分佈覆蓋率。這是我們連續第五個季度的季度核心收入超過 1 億美元，其中不包括提前還款費用或費用加速帶來的好處。

We also generated a return on equity in Q2 of 19.2%. Our portfolio generated a GAAP effective yield of 14.7% in Q2 and a core yield of 13.7%. The small decrease in core yield in Q2 was largely attributable to more first lien exposure, an emphasis on later-stage transactions and heavier payoffs from legacy higher yielding assets.

我們第二季的股本回報率為 19.2%。我們的投資組合在第二季的 GAAP 有效收益率為 14.7%，核心收益率為 13.7%。第二季核心殖利率小幅下降主要歸因於第一留置權風險增加、對後期交易的重視以及遺留高收益資產的更大回報。

Our balance sheet with conservative leverage and low cost of capital remains very well positioned to support our continued growth object objectives and provides us with the ability to go lower on yield for higher quality assets when warranted. This serves as a key differentiator of our business relative to our closest competition.

我們的資產負債表具有保守的槓桿率和較低的資本成本，仍然能夠很好地支持我們的持續成長目標，並使我們能夠在有保證的情況下降低更高品質資產的收益率。相對於最接近的競爭對手，這是我們業務的關鍵差異化因素。

The focus of our origination efforts in Q2 was once again on quality and diversification. Our Q2 origination activity was driven by both our technology and life sciences teams, delivering record funding performance during the quarter. Although new business activity was weighted slightly more towards technology companies.

我們在第二季的原創工作的重點再次集中在品質和多元化上。我們第二季的發起活動是由我們的技術和生命科學團隊推動的，在本季度實現了創紀錄的融資業績。儘管新業務活動對科技公司的權重略高。

In Q2, approximately 63% of our fundings were to technology companies, while approximately 55% of our commitments during the quarter were to technology companies. Our new commitments in Q2 reflect our more optimistic view on the technology sector and an increase in the number of later-stage QUALITY technology transactions that our team is currently seeing in the market.

第二季度，我們約 63% 的資金流向了科技公司，而本季我們約 55% 的承諾流向了科技公司。我們在第二季度的新承諾反映了我們對科技產業更加樂觀的看法，以及我們團隊目前在市場上看到的後期優質技術交易數量的增加。

The equity markets have been particularly robust for public life sciences companies, which has caused some life sciences companies to push out decisions on debt financings by a quarter or two. We funded debt capital to 25 different companies in Q2, of which 10 were new borrower relationships, consistent with what we saw in previous quarters, we expanded our funding relationship with numerous portfolio companies that continued to show strength and achieved performance milestones during the second quarter.

對於上市生命科學公司來說，股票市場尤其強勁，這導致一些生命科學公司將債務融資決策推遲了一、兩個季度。我們在第二季度向25 家不同的公司提供了債務資本，其中10 家是新的借款人關係，與我們在前幾季看到的情況一致，我們擴大了與眾多投資組合公司的融資關係，這些公司在第二季度繼續表現出實力並實現了業績里程碑。

Our available unfunded commitments decreased slightly to approximately $479.5 million from $483.4 million in Q1. Since the close of Q2 and as of July 29, 2024, our deal team has closed $28.1 million of new commitments and funded $45.4 million. We have pending commitments of an additional $210 million in signed nonbinding term sheets, and we expect this number to continue to grow as we progress in Q3.

我們可用的無資金承諾從第一季的 4.834 億美元略有減少至約 4.795 億美元。自第二季結束以來，截至 2024 年 7 月 29 日，我們的交易團隊已完成 2,810 萬美元的新承諾並提供了 4,540 萬美元的資金。我們在已簽署的非約束性條款清單中尚未承諾追加 2.1 億美元，我們預計隨著第三季的進展，這一數字將繼續增長。

Similar to what we saw in Q2 our expectation is that Q3 funding activity will be back-end weighted, consistent with our historical approach to underwriting credit. We will remain disciplined on new originations, and we will continue to prioritize asset quality over chasing high risk transactions with a slight yield premium.

與我們在第二季度看到的情況類似，我們的預期是第三季的融資活動將是後端加權的，這與我們承保信貸的歷史方法一致。我們將繼續嚴格遵守新的發起方式，並將繼續優先考慮資產質量，而不是追逐收益率溢價較小的高風險交易。

Our portfolio exit activity moderated a bit in Q2. In Q2, we had two technology portfolio companies complete acquisitions. We continue to have two portfolio companies that have previously filed registration statements for an IPO. As we anticipated, early loan repayments increased in Q2 to approximately $306 million which was at the upper range of our guidance of $200 million to $300 million.

我們的投資組合退出活動在第二季略有放緩。第二季度，我們有兩家技術投資組合公司完成了收購。我們仍有兩家投資組合公司先前已提交 IPO 註冊聲明。正如我們預期的那樣，第二季提前償還貸款增加至約 3.06 億美元，處於我們 2 億至 3 億美元指導範圍的上限。

Over 44% of our Q2 prepayments were attributable to M&A events or new equity capital events, which we view as a positive signal overall for Q3 2024, we expect prepayments to remain similar to Q2 levels and be in the range again of $200 million to $300 million. Although this could change as we progress in the quarter, we also anticipate that the majority of payoffs will come in the first half of the quarter, which will likely lead to a lower weighted average debt balance for the third quarter.

我們第二季超過44% 的預付款項歸因於併購事件或新股本事件，我們認為這對2024 年第三季總體來說是一個正面訊號，我們預計預付款項將保持與第二季水準相似，並再次在2 億美元至300 美元的範圍內百萬。儘管隨著本季的進展，這種情況可能會發生變化，但我們也預計大部分回報將在本季上半段實現，這可能會導致第三季的加權平均債務餘額下降。

Credit quality of the debt investment portfolio remained steady quarter over quarter. Our weighted average internal credit rating of 2.18 increased slightly from the 2.16 rating in Q1 and remains at the lower end of our normal historical range. Our Grade one and two credits decreased slightly to 67.2% compared to 68% in Q1.

債務投資組合的信用品質比去年同期維持穩定。我們的加權平均內部信用評級為 2.18，較第一季的 2.16 略有上升，仍處於正常歷史範圍的下限。我們的一年級和二年級學分略有下降，從第一季的 68% 降至 67.2%。

Grade three credits increased slightly to 31% in Q2 versus 29.2% in Q1, our rated for credits decreased modestly to 0.9% from 2.6% in Q1, and rated 5 credits were 0.9%. In Q2, the number of loans on nonaccrual remain the same with the write-off of one loan and the addition of a new one, we had two debt investments on nonaccrual with an investment cost and fair value of approximately $91.8 million and $32.1 million respectively, or 2.5% and 0.9% as a percentage of the company's total investment portfolio at cost and value, respectively.

三級學分在第二季小幅上升至 31%，而第一季為 29.2%，我們的學分評級從第一季的 2.6% 小幅下降至 0.9%，而 5 級學分評級為 0.9%。第二季度，非應計貸款數量保持不變，註銷了一筆貸款並增加了一筆新貸款，我們有兩筆非應計債務投資，投資成本和公允價值分別約為9,180 萬美元和3,210 萬美元，或分別占公司以成本和價值計算的總投資組合的2.5%和0.9%。

With respect to our broader credit book and outlook, we generally remain pleased by what we are seeing on a portfolio level and our monitoring remains enhanced. Our focus on credit underwriting and a diversified asset base is continuing to serve us well. We are continuing to see general outperformance and positive momentum in terms of capital raising, M&A activity and milestone achievement throughout our life sciences book. While things are beginning to improve on the technology side, with respect to the same metrics.

就我們更廣泛的信用帳簿和前景而言，我們總體上對投資組合層面所看到的情況感到滿意，並且我們的監控仍然得到加強。我們對信貸承銷和多元化資產基礎的關注繼續為我們提供良好服務。我們在整個生命科學書中繼續看到在融資、併購活動和里程碑成就方面的整體優異表現和積極勢頭。雖然技術方面的情況開始有所改善，但就相同的指標而言。

Companies with slower growth rates and thin liquidity positions continue to struggle broadly throughout the ecosystem. And we are seeing some indications that the higher for longer rate environment is beginning to have an impact on certain sponsor-backed companies. During Q2, capital raising across our portfolio was very strong, with 24 companies raising approximately $1.7 billion in new capital, which was again heavily weighted towards our life sciences portfolio.

在整個生態系統中，成長率較慢且流動性不足的公司繼續陷入困境。我們看到一些跡象表明，較高的長期利率環境開始對某些贊助商支持的公司產生影響。第二季度，我們投資組合的融資非常強勁，有 24 家公司籌集了約 17 億美元的新資本，這再次對我們的生命科學投資組合產生了重要影響。

For the first half of the year, we had 56 portfolio companies raised over $4.3 billion of new capital. During Q2 2024, Hercules had net realized losses of $5.8 million, comprised of gross realized gains of $5.8 million, primarily due to the gain on warrant and equity investments, offset by $11.6 million due to the loss on debt investments warrant and equity investments and losses resulting from fluctuations in foreign exchange rates.

今年上半年，我們有 56 家投資組合公司籌集了超過 43 億美元的新資本。2024 年第二季度，Hercules 的已實現淨虧損為580 萬美元，其中已實現總收益為580 萬美元，主要是由於認股權證和股權投資的收益，被債務投資權證和股權投資損失和損失所抵銷的1,160 萬美元所抵銷因外匯匯率波動而產生的。

Our net asset value per share in Q2 was $11.43, a decrease of 1.7% from Q1 2024. We ended Q2 with strong liquidity of $482 million. Our balance sheet puts us in a strong position to be able to benefit from a new business environment that we believe is as strong as we have seen in several years. We further strengthened our balance sheet with the approval of our fourth SBIC license, which we received in July.

第二季我們的每股淨資產值為 11.43 美元，比 2024 年第一季下降 1.7%。第二季結束時，我們的流動性強勁，達到 4.82 億美元。我們的資產負債表使我們處於有利地位，能夠從新的商業環境中受益，我們相信這一環境與我們幾年來所看到的一樣強大。我們於 7 月獲得了第四個 SBIC 許可證，並獲得批准，進一步增強了我們的資產負債表。

This fourth license will provide access to $175 million of additional growth capital and help us to maintain our overall blended cost of capital. Also subsequent to Q2, we retired our July 2024 unsecured notes, which Seth will discuss in more detail.

第四個許可證將提供 1.75 億美元的額外成長資本，並幫助我們維持整體混合資本成本。同樣在第二季之後，我們註銷了 2024 年 7 月的無擔保票據，Seth 將對此進行更詳細的討論。

Venture capital ecosystem fundraising and investment activity moderately picked up in Q2 with year to date fund raising activity at approximately $37.4 billion and investment activity at approximately $93.4 billion. According to data gathered by PitchBook-NVCA. Both fundraising and investment activity are on pace with 2023 levels.

第二季度，創投生態系統的募款和投資活動適度回升，年初至今的募款活動約為 374 億美元，投資活動約 934 億美元。根據 PitchBook-NVCA 收集的數據。籌款和投資活動均與 2023 年的水準保持一致。

We expect investment activity to remain at these levels, driven by more selectivity in terms of the profile of the companies receiving equity funding. Given our strong operating performance in Q2, we exited the quarter with undistributed earnings spillover increasing to approximately $145 million or $0.89 per ending shares outstanding.

我們預計投資活動將保持在這些水平，這是由於對接受股權融資的公司的情況進行了更多的選擇。鑑於我們第二季強勁的經營業績，我們在本季結束時未分配的獲利溢出增加到約 1.45 億美元，即每股已發行股 0.89 美元。

In Q2, Hercules delivered its fifth consecutive quarter of over $100 million of quarterly core income, which excludes the benefit of prepayment fees or fee accelerations from early repayments. Our success is attributable to the tremendous dedication, efforts and capabilities of our 100 plus employees and I trust that our venture capital and private equity partners place with us every day. We are thankful to the many companies', management teams and investors that continue to make Hercules their partner of choice.

第二季度，Hercules 連續第五個季度實現了超過 1 億美元的季度核心收入，其中不包括提前還款費用或費用加速的好處。我們的成功歸功於我們 100 多名員工的巨大奉獻、努力和能力，我相信我們的創投和私募股權合作夥伴每天都在支持我們。我們感謝許多公司、管理團隊和投資者繼續將 Hercules 作為他們的首選合作夥伴。

I will now turn the call over to Seth.

我現在將把電話轉給塞斯。

Thank you, Scott, and good afternoon, ladies and gentlemen. Q2 marked another quarter of solid execution, record financial performance and conservative balance sheet management for Hercules Capital. We continue to see the benefits of operating at scale and the diversity of our balance sheet with no near-term material maturities.

謝謝斯科特，女士們先生們下午好。第二季標誌著 Hercules Capital 又一個執行力紮實、財務業績創紀錄、資產負債表管理保守的季度。我們繼續看到大規模營運的好處和資產負債表的多樣性，且沒有近期的重大到期情況。

In Q2, we had record total investment income of $125 million and record net interest margin of $103.5 million, thanks to our year to date portfolio growth and low average borrowing costs. We continue to maintain strong available liquidity of approximately $0.5 billion as of quarter end and more than $750 million across the platform, including the advisor funds managed by our wholly owned subsidiary, Hercules advisor, LLC.

第二季度，我們的總投資收入達到創紀錄的 1.25 億美元，淨利差達到創紀錄的 1.035 億美元，這得益於我們今年迄今的投資組合成長和較低的平均借貸成本。截至季末，我們繼續保持約 5 億美元的強大可用流動性，整個平台保持超過 7.5 億美元的流動性，其中包括由我們的全資子公司 Hercules Advisor, LLC 管理的顧問資金。

Post quarter end, we repaid at maturity $105 million of institutional notes issued in July 2019 and received approval for our fourth SBIC license unlocking another $175 million of liquidity to help us maintain our very competitive low cost of capital.

季末後，我們償還了2019 年7 月發行的1.05 億美元到期機構票據，並獲得了第四個SBIC 許可證的批准，釋放了另外1.75 億美元的流動性，以幫助我們保持極具競爭力的低成本資本。

With all this in mind, let's review the income statement performance and highlights, NAV, unrealized and realized activity, leverage and liquidity and then finally, the financial outlook. And the income statement performance and highlights, total investment income as I mentioned, was a record of $125 million, driven by the record first quarter growth in the debt portfolio.

考慮到這一切，讓我們回顧一下損益表的表現和亮點、淨值、未實現和已實現的活動、槓桿和流動性，最後是財務前景。在債務投資組合創紀錄的第一季成長的推動下，損益表的表現和亮點，也就是我提到的總投資收入，達到創紀錄的 1.25 億美元。

Core investment income, a non-GAAP measure increased to a record of $116.4 million. Core Investment income excludes the benefit of income recognized as a result of loan prepayment. Net investment income increased to $82.4 million or $0.51 per share in Q2, a 4% quarter-over-quarter increase driven by the increase in total investment income on the portfolio growth in the first half of 2024.

核心投資收入（非公認會計準則衡量標準）增加至創紀錄的 1.164 億美元。核心投資收入不包括因提前償還貸款而確認的收入收益。第二季淨投資收益增至 8,240 萬美元，每股 0.51 美元，季增 4%，這是由於 2024 年上半年投資組合成長導致總投資收益增加。

Our effective and core yields decreased modestly in the second quarter to 14.7% and 13.7%, respectively, compared to 14.9% and 14% in the prior quarter. The Second quarter gross operating expenses were $45.5 million compared to $45.3 million in the prior quarter. Net of costs recharged to the RIA., our net operating expenses were $42.6 million.

第二季度我們的有效收益率和核心收益率分別小幅下降至 14.7% 和 13.7%，而上一季分別為 14.9% 和 14%。第二季總營運費用為 4,550 萬美元，上一季為 4,530 萬美元。扣除向 RIA 充值的成本後，我們的淨營運費用為 4,260 萬美元。

Interest expense and fees increased to $21.5 million from $20 million in the prior quarter due to greater utilization of the credit facilities as a result of the investment portfolio growth in the first half of 2024. SG&A expenses decreased to $24 million, in line with my guidance. Net of costs recharged to the RIA, the SG&A expenses were $21.1 million. Our weighted average cost of debt increased slightly to 5%. Our ROAE, or NII over average equity increased to 19.2% for the second quarter and ROAA or NII over average, total assets increased to 9.6%.

由於 2024 年上半年投資組合成長導致信貸額度利用率提高，利息支出和費用從上一季的 2,000 萬美元增加到 2,150 萬美元。SG&A 費用減少至 2400 萬美元，與我的指導一致。扣除向 RIA 充值的成本後，SG&A 費用為 2,110 萬美元。我們的加權平均債務成本小幅上升至 5%。第二季度，我們的 ROAE（或 NII 平均股本）增至 19.2%，ROAA 或 NII 平均總資產增至 9.6%。

Switching to NAV realized and unrealized activity during the quarter our NAV per share decreased $0.2 per share to $11.43 per share. This represents an NAV per share decrease of 1.7% quarter over quarter, the main driver was the investment portfolio net unrealized depreciation of $34.7 million.

轉向本季已實現且未實現的淨值活動後，我們的每股淨值下降了 0.2 美元，至每股 11.43 美元。這意味著每股淨值環比下降 1.7%，主要驅動因素是投資組合未實現淨折舊 3,470 萬美元。

Our $34.7 million of net unrealized depreciation was the result of $19.8 million of net unrealized depreciation on the loan portfolio, $9.8 million of depreciation to the private equity and warrant portfolio and $5.5 million of depreciation to the publicly held equity and warrant portfolio.

我們的 3,470 萬美元未實現淨折舊是貸款組合 1,980 萬美元未實現淨折舊、私募股權和認股權證投資組合 980 萬美元折舊以及公開持有股權和認股權證投資組合 550 萬美元折舊的結果。

In addition, we had $2.5 million of depreciation on the overall portfolio due to the reversal of prior unrealized appreciation. These were partially offset by $2.2 million of appreciation attributable to other investment related receivables and $0.7 million of appreciation on the form of forward currency derivatives.

此外，由於先前未實現的升值的逆轉，我們的整體投資組合出現了 250 萬美元的折舊。這些部分被其他投資相關應收款增值 220 萬美元和遠期貨幣衍生品形式增值 70 萬美元所部分抵銷。

Moving to leverage and liquidity, our GAAP and regulatory leverage increased modestly to 94.8% and 85.4% respectively, compared to the prior quarter due to greater utilization of the leverage facilities in the first half portfolio growth. Netting out leverage with cash on the balance sheet, our net GAAP and regulatory leverage was 93.3% and 83.9%, respectively.

在槓桿和流動性方面，由於上半年投資組合成長中槓桿工具的利用率更高，與上一季相比，我們的 GAAP 和監管槓桿分別小幅上升至 94.8% 和 85.4%。以資產負債表上的現金扣除槓桿後，我們的淨 GAAP 和監管槓桿分別為 93.3% 和 83.9%。

We ended the quarter with nearly $500 million of available liquidity. As a reminder, this excludes capital raised by the funds managed by our wholly owned or a subsidiary. Inclusive of these amounts, the Hercules platform had more than $750 million of available liquidity. The strong liquidity positions us very well to support our existing portfolio companies and source new opportunities.

本季結束時，我們的可用流動資金接近 5 億美元。需要提醒的是，這不包括我們全資或子公司管理的基金所募集的資金。包括這些金額在內，Hercules 平台擁有超過 7.5 億美元的可用流動性。強大的流動性使我們能夠很好地支持現有的投資組合公司並尋找新的機會。

As a final point in mid-July, we secured our fourth SBIC license, adding to an additional $175 million of leverage availability to support future growth of the portfolio.

作為 7 月中旬的最後一點，我們獲得了第四個 SBIC 許可證，額外增加了 1.75 億美元的可用槓桿，以支持投資組合的未來成長。

Finally, on the outlook points for the third quarter, we expect core yield to be between 13.3% and 13.5% excluding any future benchmark interest rate changes. As a reminder, more than 97% of our portfolio was floating with the floor. So any Fed decreases in interest rate may not have an equal reduction in our core yield.

最後，關於第三季的前景，我們預計核心殖利率將在 13.3% 至 13.5% 之間，不包括任何未來基準利率變化。提醒一下，我們超過 97% 的投資組合都在場內浮動。因此，聯準會降息可能不會同等程度地降低我們的核心殖利率。

Although very difficult to predict, as communicated by Scott, we expect $200 million to $300 million in prepayment activity in the third quarter. We expect our third quarter interest expense to increase slightly on the growth of the balance sheet compared to the prior quarter. For the third quarter, we expect SG&A expenses of $22 million to $23 million and RIA expense allocation of approximately $2.5 million.

儘管很難預測，但正如 Scott 所說，我們預計第三季的預付款活動將達到 2 億至 3 億美元。我們預計第三季利息支出將因資產負債表的成長而較上一季略有增加。對於第三季度，我們預計 SG&A 費用為 2,200 萬至 2,300 萬美元，RIA 費用分配約為 250 萬美元。

Consistent with previous guidance, we expect a quarterly dividend from the RIA that we're increasing the range to $1.25 to $1.5 million per quarter.

與先前的指引一致，我們預計 RIA 的季度股息範圍將增加至每季 1.25 至 150 萬美元。

In closing, we are very proud of the tremendous start. We have reported for the first half of 2024 and look forward to working together with our financial partners during the remainder of the year to continue to find efficient ways to finance our business.

最後，我們對這一巨大的開端感到非常自豪。我們已經報告了 2024 年上半年的情況，並期待在今年剩餘時間內與我們的金融合作夥伴合作，繼續尋找有效的方式為我們的業務融資。

I will now turn the call over to Carmen to begin the Q&A portion of our call. Carmen, over to you.

我現在將把電話轉給卡門，開始我們電話的問答部分。卡門，交給你了。

Thank you so much. (Operator Instructions)

太感謝了。（操作員說明）

Crispin Love, Piper Sandler.

克里斯平·洛夫，派珀·桑德勒。

Thanks and good afternoon. Appreciate taking my questions. And first one, just a just a big picture question on rate cuts. We seem to be getting closer to rate cuts from the Fed. So can you just discuss how you expect how low rates might impact we see deal activity and how you think that could impact you on a on a fundings and activity basis going forward as we get to the end of '24 and probably more likely in 2025.

謝謝，下午好。感謝回答我的問題。第一個是關於降息的總體問題。我們似乎距離聯準會降息越來越近。那麼，您能否討論一下，您預計低利率可能會對我們看到的交易活動產生多大影響，以及您認為隨著我們到24 年底，更有可能在2025 年，這可能會對您的資金和活動產生怎樣的影響？

Thanks, Crispin. And I think our expectation internally is that we will see demand activity pick up in a declining rate environment. I think one of the things that our team has consistently been hearing over the last several quarters from some quality late-stage companies that they're holding off just given the current rate environment. And so I think our operating assumption is that as rates do start to come down, which we expect to happen in the second half of the year and then potentially throughout the course of next year that if anything demand will likely increase in terms of the amount of quality venture stage companies that are looking for secured debt solutions.

謝謝，克里斯平。我認為我們的內部預期是，我們將看到需求活動在利率下降的環境中回升。我認為我們的團隊在過去幾季中一直從一些優質的後期公司那裡聽到的一件事是，鑑於當前的利率環境，他們正在推遲。因此，我認為我們的營運假設是，隨著利率確實開始下降，我們預計這將在今年下半年發生，然後可能在明年整個過程中發生，如果有的話，需求可能會增加數量正在尋找擔保債務解決方案的優質創投階段公司。

Great. Thank you, Scott. And then Scott, and then just on credit quality side, I believe you mentioned a write off on one loan in the quarter. I'm just first is that the $6 million realized loss and just any other color that you can provide there?

偉大的。謝謝你，斯科特。然後斯科特，然後就信貸品質而言，我相信您提到了本季一筆貸款的沖銷。我首先要說的是 600 萬美元的已實現損失，以及您能提供的任何其他顏色嗎？

And then just for credit broadly, any leading indicators that you're looking at that and it makes you confident going forward. Are there just any pockets of stress that that you want to call out?

然後就廣義的信用而言，您正在關注的任何領先指標都會讓您對未來充滿信心。是否有一些你想要釋放的壓力？

Sure. So overall and continue to be optimistic about credit. Broadly speaking, when looking at our portfolio there are certain key metrics that we evaluate and track on a quarterly basis. Our weighted average credit rating maintains at 2.18. That's just a slight uptick from 2.16. So that continues to show strength and stability.

當然。所以整體來說繼續看好信貸。一般來說，在審視我們的投資組合時，我們會按季度評估和追蹤某些關鍵指標。我們的加權平均信用評等維持在2.18。這僅比 2.16 略有上升。這樣就繼續表現出力量和穩定性。

Second metric that we look at pretty closely is what percentage of our entire portfolio do our Grade 4 and Grade 5 credits makeup as of the end of Q2, that was approximately 1.8% of the portfolio. That was actually down from 2.8% of the portfolio in Q1 and down from 3.4% of the portfolio in Q4 of last year. So that shows a pretty optimistic trend in terms of rated four and rated five credits as a percentage of our total investment portfolio.

我們密切關注的第二個指標是，截至第二季末，我們的 4 級和 5 級學分佔整個投資組合的百分比，約為投資組合的 1.8%。這實際上低於第一季投資組合的 2.8%，也低於去年第四季投資組合的 3.4%。因此，就評級為 4 和評級為 5 的信用占我們總投資組合的百分比而言，這顯示出相當樂觀的趨勢。

And as I mentioned in my remarks, we do have two loans on nonaccrual from a fair value perspective that makes up less than 1% of our debt investment portfolio with respect to the one particular write-off that we spoke about and that you just referenced in your question, that was a small loan that was placed on nonaccrual.

正如我在發言中提到的，從公允價值的角度來看，我們確實有兩筆非應計貸款，相對於我們談到的和您剛才提到的一項特定沖銷而言，這兩項貸款占我們債務投資組合的不到1%在你的問題中，這是一筆非應計利息的小額貸款。

We took action in cooperation with the company and board and ended up selling the assets of that company, which culminated and completed in Q2. Then the result resulted in a small net realized loss in the quarter. So there's nothing more to add on that one unless you have additional questions on.

我們與該公司和董事會合作採取行動，最終出售了該公司的資產，並在第二季完成。結果導致該季度出現小幅淨實現虧損。因此，除非您還有其他問題，否則沒有什麼可補充的。

No, I appreciate the color, and thanks for taking my questions.

不，我很喜歡這個顏色，感謝您提出我的問題。

Sure, thanks, Crystal.

當然，謝謝，水晶。

Casey Alexander, Compass Point Research.

凱西·亞歷山大，指南針點研究。

Yeah, hi, good afternoon. Thanks for taking my questions. Seth, you mentioned that you expect interest expense to be up slightly, but you have the debt repayment in July. Are you funding that with the credit facility because that comes at a reasonably higher rate? And is your strategy to let that sit in the credit facility for a while until hopefully rates come down? And maybe you can refinance in the unsecured market at a better rate than you can right now?

是的，嗨，下午好。感謝您回答我的問題。Seth，您提到您預計利息支出會略有增加，但您在 7 月需要償還債務。您是否透過信貸便利為其提供資金，因為其利率相當高？你們的策略是讓它在信貸安排中保留一段時間，直到利率有望下降嗎？也許您可以在無擔保市場上以比現在更好的利率進行再融資？

Yeah. Let me take that in pieces. Casey, thanks for your question. So we did utilize the credit facilities to repay the $105 million. We had ample availability in those to cover that. Certainly as we see the interest rates move in the direction for that opportunity we'll take advantage of it and opportunistic basis. But we did as well add to our liquidity availability with the SBIC license, which obviously is more attractive than what we could get in the open market at them at the moment.

是的。讓我把它分成幾個部分。凱西，謝謝你的問題。所以我們確實利用了信貸額度來償還 1.05 億美元。我們有足夠的可用資源來滿足這一點。當然，當我們看到利率朝著這個機會的方向變動時，我們將利用它和機會主義基礎。但我們也透過 SBIC 許可證增加了我們的流動性可用性，這顯然比我們目前在公開市場上獲得的更具吸引力。

So it was a takeout that was liquidity and leverage neutral because we use the credit facilities and we will be opportunistically looking at the market. But at the moment, we still, as Scott mentioned, we have a very strong liquidity and the balance sheet is in great shape for continuing growth.

因此，這是一個流動性和槓桿中性的外賣，因為我們使用信貸便利，我們將機會主義地關注市場。但目前，正如史考特所提到的，我們仍然擁有非常強勁的流動性，資產負債表狀況良好，有利於持續成長。

Okay, thank you. Scott, this is for you on it kind of strikes me that is Hercules becoming sort of a hybrid lender. And what I mean by that is, sort of you've moved up market to a lot of big companies and many times public companies, kind of what percentage of your originations or portfolio or however you would like to characterize it.

好的，謝謝。史考特，這是給你的，讓我印象深刻的是赫拉克勒斯正在成為一種混合貸款人。我的意思是，你已經進入了很多大公司，很多時候是上市公司，你的起源或投資組合的百分比是多少，或者你想如何描述它。

Don't really involve direct interface with a venture capital company, but are more direct lending to a technology or life science company where it's your core competency, but maybe it's not really what you would call it traditional venture capital loan anymore?

並不真正涉及與創投公司的直接聯繫，而是更直接地向科技或生命科學公司提供貸款，這是您的核心競爭力，但也許它不再是您所謂的傳統創投貸款？

It's a great, a great observation and great question. Our business has really transformed itself over the course of our 20-year operating history in the early years, Hercules was exclusively focused primarily on private venture-backed companies in the two verticals that we cover technology and life sciences.

這是一個偉大的觀察和偉大的問題。在我們早年 20 年的經營歷史中，我們的業務確實發生了轉變，Hercules 主要專注於技術和生命科學這兩個垂直領域的私人風險投資支持的公司。

And then if you look at the business sort of 10 years in as we started to mature as we started to scale as we started to develop our own capabilities, the business began to transition away from that traditional sort of venture-backed model into more institutionally backed companies that still continue to be growth stage.

然後，如果你看一下 10 年來的業務，當我們開始成熟、開始規模化、開始發展自己的能力時，業務開始從傳統的風險投資支持模式轉變為更加製度化的模式支持仍處於成長期的公司。

If you look at the business today, 20 years in and $20 billion later, we no longer sort of describe the business as a venture lending firm. We describe it as a venture and growth stage lending firm, the vast majority of companies in our portfolio continue to be institutionally backed by venture capital firms. But the reality is these are later-stage companies.

如果你看看今天的業務，20 年後、價值 200 億美元之後，我們不再將其描述為風險貸款公司。我們將其描述為一家創投和成長期貸款公司，我們投資組合中的絕大多數公司繼續由創投公司的機構支持。但現實是這些都是後製公司。

Many of these companies are now publicly traded just because they are publicly traded does not mean that the venture capital firms no longer have equity at risk or an investment in these companies. But that certainly has been a change that we've seen over the last several years. We also look at the technology business differently than we look at the Life Sciences business.

其中許多公司現在已經公開交易，僅僅因為它們公開交易並不意味著創投公司不再擁有這些公司的創投或投資。但這確實是我們在過去幾年中看到的變化。我們對技術業務的看法也與對生命科學業務的看法不同。

On the Life Sciences side, and this is just a virtue of the way, the life sciences ecosystem works about 80% to 85% of our investments are in publicly traded company on the technology side of our business, about 90% of our investments are in privately held companies. So it really depends on which part of the business we're speaking about. But in broad terms, we have transitioned away from that early-stage venture model that we had 20 years ago into more of it institutionally back growth stage lender.

在生命科學方面，這只是一種方式的優點，生命科學生態系統的運作方式大約 80% 到 85% 我們的投資是在我們業務的技術方面的上市公司，大約 90% 的投資是在私人公司。所以這實際上取決於我們談論的是業務的哪一部分。但從廣義上講，我們已經從 20 年前的早期創投模式轉變為更多在機構上支持成長階段的貸款人。

Thank you. That's all my questions. I appreciate that answer very much.

謝謝。這就是我的所有問題。我非常感謝這個答案。

Thanks.

謝謝。

Christopher Nolan, Ladenburg Thalmann.

克里斯多福諾蘭，拉登堡塔爾曼。

Hey, guys. Two quick questions. Scott, the comments you made on the increase in NAM activity for the life science, it's going to be tech area. Is there a particular focus on that such as AI any color you can give in terms of specifics.

嘿，夥計們。兩個簡單的問題。Scott，您對生命科學 NAM 活動增加的評論，這將是技術領域。是否有特別關注的方面，例如人工智慧，您可以在細節方面給出任何顏色嗎？

Pretty broad-based Chris. We've -- our investment team on the technology side has been very active over the last quarter or two, both from a closed deal perspective and from a pipeline perspective, and there's really no specific sectors or subsectors that we're focused on. We're focused on overall quality credit underwriting, and there's a number of different profiles from a sector perspective within technology that we've been aggressive in.

克里斯的基礎相當廣泛。無論是從已完成交易的角度還是管道的角度來看，我們在技術方面的投資團隊在過去一兩個季度都非常活躍，而且我們確實沒有重點關注的特定行業或子行業。我們專注於整體品質信貸核保，從我們一直積極進取的技術領域的角度來看，有許多不同的概況。

Great. And then a follow-up for Seth. On the interest rate sensitivity on the press release shows, if 25 bps cut, it impacts NII by $0.03, would that likely be offset by just higher investment volumes pursuant to your earlier comments?

偉大的。然後是賽斯的後續行動。關於新聞稿中的利率敏感性，如果降息 25 個基點，則會影響 NII 0.03 美元，根據您先前的評論，這可能會被更高的投資量所抵消嗎？

Yeah, that's a good question. So I think what's interesting is when you look at that on the 100 basis point movement, the big difference, it really shows are floating with a floor structure because there's a 20% difference. But you're absolutely correct. We could grow away that $0.03. And I hit I mean, it's an annual basis just on a quarterly basis.

是的，這是一個好問題。因此，我認為有趣的是，當你觀察 100 個基點的走勢時，你會發現巨大的差異，它確實顯示出浮動的地板結構，因為有 20% 的差異。但你是絕對正確的。我們可以把這 0.03 美元拿掉。我的意思是，這是按年度計算，只是按季度計算。

And so that could be covered by the growth over time. But as we're standing today without additional growth or any other change that would be the impact.

隨著時間的推移，這可以透過成長來彌補。但就我們今天的情況而言，如果沒有額外的成長或任何其他變化，就會產生影響。

Douglas Harter, UBS.

道格拉斯‧哈特，瑞銀集團。

Just sticking with the growth thought, so how are you thinking about the outlook for growth in the coming quarters and how that mix might be between third party capital and balance sheet?

堅持成長思維，那麼您如何看待未來幾季的成長前景以及第三方資本和資產負債表之間的組合可能如何？

We're optimistic about what the second half of the year is going to look like in terms of new commitments and gross fundings.

我們對今年下半年的新承諾和總資金狀況感到樂觀。

We don't give growth guidance on a quarterly basis, just given the unpredictability associated with the early repayments. And in Q2, we had $306 million of prepayments. Our guidance for Q3 is that we expect to have $200 million to $300 million again. So that's two healthy quarters in a row of expected prepayments and how much ultimate growth there is in terms of the BDC balance sheet will largely be driven by the level of prepayments. We're not we're not cautious at all in terms of our ability to deliver in terms of new commitments and new fundings.

我們不會按季度提供成長指引，只是考慮到提前還款的不可預測性。第二季度，我們有 3.06 億美元的預付款。我們對第三季的指導是，我們預計將再次獲得 2 億至 3 億美元的收入。因此，這是預期預付款連續兩個健康季度的結果，而 BDC 資產負債表的最終增長量將主要由預付款水準驅動。我們不是，我們對履行新承諾和新資金的能力一點也不謹慎。

With respect to the private fund business, the business continues to operate above our initial expectations. We do disclose in our press release the allocations that are going to the private fund business on a quarterly basis. If you look at that, just in terms of aggregate numbers in 2022, for example, we funded about $400 million out of the private funds in 2023, we funded about $350 million out of the private funds, in Q1 we funded about $113 million out of the private funds. And then in Q2, we just funded about another $117 million. So the pace of fundings out of our private fund business continues to be fairly robust.

私募基金業務方面，業務運作持續高於我們最初的預期。我們確實在新聞稿中揭露了每季私募基金業務的分配。如果你看一下，僅就2022 年的總數而言，例如，2023 年我們從私募基金中資助了約4 億美元，我們從私募基金中資助了約3.5 億美元，在第一季我們從私募基金中資助了約1.13 億美元。然後在第二季度，我們又資助了約 1.17 億美元。因此，我們私募基金業務的融資步伐仍然相當強勁。

Great. Thank you.

偉大的。謝謝。

Finian O'Shea, Wells Fargo Securities.

Finian O'Shea，富國銀行證券公司。

Hey, everyone, good afternoon. Just a quick follow there. On the private fund discussion, what was the input that led to I think Seth gave higher go-forward guidance on that, I think at least our impression last quarter was that it was the economics were in place with a lot for a while. If you could touch on that and like how likely that is to happen going forward? Thanks.

嘿，大家下午好。只需快速跟隨即可。在私募基金的討論中，是什麼導致了我認為 Seth 對此給出了更高的前瞻性指導，我認為至少上個季度我們的印像是，經濟狀況在一段時間內已經到位。如果您能談談這一點，那麼這種情況未來發生的可能性有多大？謝謝。

So thanks, Ben, for the question. What we did was kind of narrow the range. We've been a little bit over my guidance or at the top end of the guidance for each of the past two quarters. And so all we did was we narrowed it a little bit rather than $1 million to $1.5 million. I just shortened it up to $1.25 million to $1.5 million, as I said, just because we've been at the top end or over for the last two quarters.

謝謝本提出的問題。我們所做的就是縮小範圍。在過去的兩個季度中，我們每個季度都有點超出了我的指導或指導的上限。所以我們所做的就是將範圍縮小一點，而不是從 100 萬美元縮小到 150 萬美元。正如我所說，我只是將其縮短至 125 萬美元至 150 萬美元，只是因為過去兩個季度我們一直處於高端或更高水平。

Okay, helpful. Thank you. I guess one for Scott. There's been a bit reported in the financial community, at least about the sum come back of Silicon Valley Bank. And seeing what your views are and what your observations are on that front? Thanks.

好的，有幫助。謝謝。我猜是史考特的。金融界已經有一些報道，至少是關於矽谷銀行的返還款項。看看你在這方面的觀點和觀察是什麼？謝謝。

And then getting my observations with respect to SVB, First Citizens would be very consistent with respect to what we've said now several quarters in a row, they continue to be active, we continue to see them in the market. We don't see them to the to the same extent that we did a year year-and-a-half, two years ago, but they continue to be active, we have continued to partner with them on a select number of transactions.

然後根據我對 SVB 的觀察，First Citizens 與我們現在連續幾個季度所說的非常一致，他們繼續活躍，我們繼續在市場上看到他們。我們對他們的關注程度與一年半、兩年前不同，但他們仍然活躍，我們繼續與他們在選定數量的交易上合作。

And so I would sort of characterize them as a viable competitor in the market that we both compete with from time to time and partner with from time to time. Nothing else to add outside of what I just said.

因此，我將他們描述為市場上可行的競爭對手，我們既不時與之競爭，也不時與之合作。除了我剛才說的之外，沒什麼好補充的了。

Great. Thanks so much.

偉大的。非常感謝。

Paul Johnson, KBW.

保羅·約翰遜，KBW。

Yeah, good evening. Thanks for taking my questions. Most of mine have been asked, but one I did want to ask is over the last few quarters, seems that take income as a percent of interest income and increasing. I was wondering if there was anything specific that's been driving that, or have we just been seeing more of that as you move upmarket and some of these borrowers or getting that option within their structure, but I'm just wondering what's been driving that over the last few quarters?

是的，晚上好。感謝您回答我的問題。我的大部分人都被問過，但我確實想問的是在過去的幾個季度中，似乎將收入視為利息收入的百分比並不斷增加。我想知道是否有什麼具體因素推動了這種情況，或者當你轉向高端市場和其中一些借款人或在他們的結構中獲得這種選擇時，我們是否只是看到更多這種情況，但我只是想知道是什麼推動了這種情況最近幾季？

Sure. Thanks, Paul. I'd say a couple of things. First and foremost, I pick income on a relative basis when you look at our entire income continues to be a really small part of the overall income or top line from Hercules Capital with respect to why it has been increasing slightly over the last couple of quarters.

當然。謝謝，保羅。我想說幾件事。首先也是最重要的，當你看到我們的整體收入仍然只佔大力士資本總收入或頂線的一小部分時，我會在相對基礎上選擇收入，這也解釋了為什麼它在過去幾個季度略有增長。

There's really three things contributing to that. Number one, that focus on stage. Again, we're going after larger later-stage more quality companies. The competitive environment for those deals tends to be a little bit more tech centric. So we are utilizing a small amount of picked in some of these later-stage transactions that's the first thing.

實際上有三件事促成了這一點。第一，專注於舞台。同樣，我們正在尋找規模更大、後期階段更優質的公司。這些交易的競爭環境往往更以技術為中心。因此，我們首先在一些後期交易中使用少量精選的資金。

Second thing, in a lot of our straight down the fairway deals, we do give some of our companies in option to toggle between cash and to a small degree. And so as rates have stayed higher for longer, some companies are choosing to pay, for example, 1% of cash by transitioning that to 1.1% or 1.2% of PIK, and that's really the second driver.

其次，在我們的許多直接交易中，我們確實為我們的一些公司提供了在現金和小額交易之間切換的選擇。因此，隨著利率在較長時間內保持較高水平，一些公司選擇支付 1% 的現金，將其轉換為 PIK 的 1.1% 或 1.2%，這實際上是第二個驅動因素。

And then the third piece is just we have selectively been utilizing for a certain profile of transaction. I really don't want to speak to what that is just from a competitive perspective. But on a small number of transactions, we've been utilizing pick a little bit more aggressively, but we have limits and we do not intend to go above it.

第三部分是我們選擇性地用於某種交易的情況。我真的不想僅僅從競爭的角度來談論這是什麼。但在少量交易中，我們一直在更積極地利用pick，但我們有限制，我們不打算超越它。

And I would just add one thing from a balance sheet perspective, it's less than a percent on our balance sheet. So it's completely insignificant as far as the profile of the balance sheet.

我只想從資產負債表的角度補充一件事，它在我們的資產負債表上還不到百分之一。因此，就資產負債表的情況而言，它完全無關緊要。

Got it. Thanks. That's very helpful. And then just one more on, but just again, I think you've talked about this on your remarks, but the overall compression on just the core yields and the coupon rate on the portfolio, I assume that's been driven by the same things we're talking about moving the market moving up higher in the cap structure, more more first lien, but should investors just overall be expecting this to continue and are tighter spreads lower core yields on the portfolio as you continue to do so or and kind of where would you expect that to trend here, just given the kind of compression over the last one to two quarters or so?

知道了。謝謝。這非常有幫助。然後再說一遍，但我想你已經在演講中談到了這一點，但核心收益率和投資組合票面利率的整體壓縮，我認為這是由我們所推動的相同因素推動的。在上限結構中走高，更多的第一留置權，但投資者是否應該總體上預期這種情況會持續下去，並且當你繼續這樣做時，利差收窄會降低投資組合的核心收益率？考慮到過去一到兩個季度左右的壓縮情況，您預計這裡的趨勢是什麼？

Yeah. Thanks, Paul. So a couple of things with respect to yield. First, each of those things that you just mentioned in the question, it certainly contributed some of that. But the biggest driver is actually the mix between prepayments and fundings. If you look at the prepayment activity that we've had over the last three to four quarters the mix is largely centered around older legacy assets where the core yield on those deals tends to be 14% to 16%.

是的。謝謝，保羅。關於產量，有幾件事。首先，你剛才在問題中提到的每一件事，它肯定都做出了一些貢獻。但最大的推動因素實際上是預付款和資金之間的混合。如果你看我們過去三到四個季度的預付款活動，你會發現這種組合主要集中在較舊的遺留資產上，這些交易的核心收益率往往在 14% 到 16% 之間。

The new fundings that we're putting on the books right now tend to be in the range of 13% to 14% core. And so just that shift in mix in terms of the higher yielding assets paying off being replaced by a new deals in that 13% to 14% core are causing some of that slight degradation in terms of core yield.

我們現在登記的新資金往往在核心資金的 13% 到 14% 之間。因此，高收益資產的組合轉變被 13% 至 14% 核心資產的新交易所取代，導致核心收益率略有下降。

The thing that we're really managing to is solving for the ultimate GAAP yield that we can deliver. And if you look at the effective yield in the portfolio today at 14.7%, it is identical just by way of example, to the 14.7% effective yield that we delivered in Q4 of 2022.

我們真正要做的是解決我們可以提供的最終 GAAP 收益率。如果你看看今天投資組合的有效收益率為 14.7%，僅舉例來說，它與我們在 2022 年第四季度交付的 14.7% 的有效收益率相同。

And so the goal for us is to make sure that we are delivering and above market acceptable yield with appropriate spreads. And that's what we've been able to do.

因此，我們的目標是確保我們以適當的利差提供高於市場可接受的收益率。這就是我們已經能夠做到的。

Our expectation per sets updated guidance is that we will continue to see some small incremental degradation in terms of core yield. But we certainly don't expect any material of changes or decrease in core yield, obviously, barring any activity from the Fed.

我們對每套更新指引的預期是，我們將繼續看到核心報酬率出現一些小幅增量下降。但顯然，除非聯準會採取任何行動，否則我們當然預期核心殖利率不會出現任何重大變化或下降。

Thank you very much. That's very helpful. It's all for me.

非常感謝。這非常有幫助。這一切都是為了我。

Casey Alexander, Compass Point Research.

凱西‧亞歷山大，羅盤點研究公司。

Yeah, I'm sorry, maybe I've missed this, or maybe it was in the technical blackout, but can you discuss and give us an idea of what the situation is surrounding core of the company that was put on nonaccrual this quarter?

是的，很抱歉，也許我錯過了這一點，或者可能是因為技術中斷，但是您能否討論一下並讓我們了解一下本季度採用非應計利息的公司核心的情況如何？

Sure. So, that is an ongoing active situation. Can't provide a ton of color because it is a private company and we have certain confidentiality provisions. That is a loan that we have participated in with several other large BDCs and investment firms.

當然。所以，這是一個持續活躍的情況。無法提供大量顏色，因為它是一家私人公司，我們有一定的保密規定。這是我們與其他幾家大型 BDC 和投資公司共同參與的貸款。

We made the decision this quarter to impair that loan. So Khoros has a cost basis of roughly $60 million, and we've impaired that down to about $32 million. And per your observation, we did also make the decision to put that loan on nonaccrual this quarter. That's largely based on two factors: number one, we did believe that it warranted a significant collateral based impairment, which means that our expectation based on what we know today is that we will not have a full recovery on principal.

我們本季決定減損該貸款。因此，Khoros 的成本基礎約為 6,000 萬美元，我們已將其降至約 3,200 萬美元。根據您的觀察，我們也確實決定在本季將該貸款轉為非應計貸款。這主要基於兩個因素：第一，我們確實認為它需要進行重大的基於抵押品的減值，這意味著根據我們今天所知，我們的預期是我們不會完全收回本金。

And then the second component is that the cash coupon in that transaction has now transitioned to PIK and so that investment is no longer paying cash income, which and our model turns that into a nonaccrual.

第二個組成部分是，該交易中的現金優惠券現已轉變為 PIK，因此投資不再支付現金收入，這和我們的模型將其轉變為非應計收入。

All right. Thanks, very helpful.

好的。謝謝，非常有幫助。

Thank you. And I see no further questions in the queue. I will turn the call back to Scott Bluestein for closing remarks.

謝謝。我在隊列中沒有看到更多問題。我將把電話轉回給斯科特·布魯斯坦（Scott Bluestein），讓他發表結束語。

Thank you, Carmen, and thanks to everyone for joining our call today. As a final note, we will be participating in the KBW BDC conference on October 2 in New York. If you're interested in meeting with us at this event, please contact KBW directly or Michael Hara. We look forward to reporting our progress on our Q3 2024 earnings call. Thanks, everybody, and have a great rest of the day.

謝謝卡門，也謝謝大家今天加入我們的電話會議。最後一點，我們將參加 10 月 2 日在紐約舉行的 KBW BDC 會議。如果您有興趣在本次活動中與我們見面，請直接聯絡 KBW 或 Michael Hara。我們期待在 2024 年第三季財報電話會議上報告我們的進展。謝謝大家，祝您今天休息愉快。

Thank you all for participating in today's conference. You may now disconnect.

感謝大家參加今天的會議。您現在可以斷開連線。