Main Street Capital Corp (MAIN) 2019 Q4 法說會逐字稿

Greetings. Welcome to the Main Street Capital Corporation Fourth Quarter Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

問候。歡迎參加主街資本公司第四季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Zach Vaughan with Dennard Lascar Investor Relations. Thank you, Zach. You may now begin.

現在我很高興向您介紹主持人，丹納德·拉斯卡投資者關係部門的紮克·沃恩。謝謝你，扎克。你現在可以開始了。

Thank you, operator, and good morning, everyone. Thank you for joining us for Main Street Capital Corporation's Fourth Quarter 2019 Earnings Conference Call. Main Street issued a press release yesterday afternoon, that details the company's fourth quarter financial and operating results. This document is available on the Investor Relations section of the company's website at mainstcapital.com.

謝謝接線員，大家早安。感謝您參加 Main Street Capital Corporation 2019 年第四季財報電話會議。Main Street 昨天下午發布了一份新聞稿，詳細介紹了該公司第四季度的財務和營運業績。本文件可在公司網站 mainstcapital.com 的投資者關係部分取得。

A replay of today's call will be available beginning an hour after the completion of the call and will remain available until March 6. Information on how to access the replay was included in yesterday's release. We also advise you that this conference call is being broadcast live through the Internet and can be accessed on the company's homepage.

今天的電話會議的重播將在電話會議結束一小時後開始提供，並將持續到 3 月 6 日。有關如何存取重播的資訊已包含在昨天的新聞稿中。我們也通知您，本次電話會議正在透過網路進行現場直播，並且可以在公司主頁上觀看。

Please note that information reported on this call speaks only as of today, February 28, 2020, and therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.

請注意，本次電話會議報告的資訊僅截至今天（2020 年 2 月 28 日），因此，請注意，時間敏感的資訊在任何重播收聽或文字記錄閱讀時可能不再準確。

Today's call will contain forward-looking statements. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may or similar expressions. These statements are based on management's estimates, assumptions and projections as of the date of this call and are no guarantees of future performance.

今天的電話會議將包含前瞻性陳述。許多前瞻性陳述可以透過使用諸如預期、相信、期望、打算、將、應該、可能或類似表達等詞語來識別。這些陳述是基於管理階層截至本次電話會議當天的估計、假設和預測，並非對未來績效的保證。

Actual results may differ materially from the results expressed or implied in these statements as a result of risks, uncertainties and other factors, including, but not limited to, the factors set forth in the company's filings with the Securities and Exchange Commission, which can be found on the company's website or at sec.gov. Main Street assumes no obligation to update any of these statements unless required by law.

由於風險、不確定性和其他因素，包括但不限於公司向美國證券交易委員會提交的文件中列出的因素，實際結果可能與這些聲明中明示或暗示的結果有重大差異。可在公司網站或sec.gov 上找到。除非法律要求，否則 Main Street 不承擔更新任何這些聲明的義務。

During today's call, management will discuss non-GAAP financial measures, including distributable net investment income. Please refer to yesterday's press release for a reconciliation of these measures to the most directly comparable GAAP financial measures. Certain information discussed on this call, including information related to portfolio companies, was derived from third-party sources and has not been independently verified.

在今天的電話會議上，管理階層將討論非公認會計準則財務指標，包括可分配淨投資收益。請參閱昨天的新聞稿，以了解這些指標與最直接可比較的公認會計準則財務指標的調節表。本次電話會議討論的某些信息，包括與投資組合公司相關的信息，均來自第三方來源，未經獨立核實。

And now I'll turn the call over to Main Street's CEO, Dwayne Hyzak.

現在我將把電話轉給 Main Street 的執行長 Dwayne Hyzak。

Thanks, Zach, and thank you all for joining us today. Joining me for our call today with prepared comments are David Magdol, our President and Chief Investment Officer; and Brent Smith, our CFO. Also joining us for the Q&A portion of our call are Vince Foster, our Executive Chairman; and Nick Meserve, our Managing Director and Head of our Middle Market Investment Group.

謝謝扎克，也謝謝大家今天加入我們。我們的總裁兼首席投資長 David Magdol 和我一起參加今天的電話會議，並發表了準備好的評論。和我們的財務長布倫特史密斯。我們的執行主席文斯福斯特 (Vince Foster) 也參加了我們電話會議的問答部分。 Nick Meserve，我們的董事總經理兼中間市場投資集團負責人。

On today's call, I will start by providing a recap of our overall performance in the fourth quarter, and I will also comment on some current activities in our asset management business. I'll discuss our recent dividend announcement and other recent developments. And I will conclude with some remarks on our investment activities and our current investment pipeline. Following my comments, David and Brett will provide additional comments on our investment strategy, investment portfolio and financial results, after which we'll be happy to take your questions.

在今天的電話會議上，我將首先回顧我們第四季度的整體業績，我也會評論我們資產管理業務目前的一些活動。我將討論我們最近的股息公告和其他最新進展。最後我將就我們的投資活動和目前的投資管道發表一些評論。在我的評論之後，大衛和布雷特將對我們的投資策略、投資組合和財務表現提供更多評論，之後我們將很樂意回答您的問題。

We are pleased that for the fourth quarter and full year, we again generated distributable net investment income or DNII per share in excess of our regular monthly dividends exceeding the monthly dividends paid in the fourth quarter by approximately 7% and for the full year by approximately 10%.

我們很高興第四季度和全年的可分配淨投資收益或每股 DNII 再次超過我們的每月定期股息，超過第四季度支付的每月股息約 7%，全年約超過 7%。10% 。

During the quarter, we continued to focus our efforts on sourcing transactions in the lower middle market that are consistent with our historical investment profile and executing against our previously stated goal of growing our private loan investment portfolio, while being highly selective with new investments in our middle market portfolio.

本季度，我們繼續專注於在中低端市場尋找符合我們歷史投資狀況的交易，並按照我們先前提出的擴大私人貸款投資組合的目標執行，同時對我們的新投資進行嚴格挑選。中間市場投資組合。

Despite our successes in 2019, our actual results were below our stated long-term goals with an ROE, or return on equity, of 8.5%. And as a result, we executed on our core principle of maintaining alignment between our management team and our shareholders by reducing the amount of incentive cash compensation paid to our executive and senior management team when compared to prior years.

儘管我們在 2019 年取得了成功，但我們的實際表現仍低於我們既定的長期目標，ROE（股本回報率）為 8.5%。因此，與往年相比，我們透過減少向高階主管和高階管理團隊支付的激勵性現金薪酬金額，執行了維持管理團隊與股東之間一致性的核心原則。

We continue to believe that the advantages of our differentiated investment strategy, diversified investment portfolio, efficient operating structure and the alignment of interest with our shareholders, combined with our conservative capital structure and strong liquidity position, have us very well-positioned for long-term growth and continued future success.

我們仍然相信，我們差異化的投資策略、多元化的投資組合、高效的營運結構以及與股東利益一致的優勢，加上我們保守的資本結構和強勁的流動性狀況，使我們在長期發展中處於有利地位。成長和未來持續的成功。

Over the past several months, we have taken significant steps in our ongoing efforts to organically grow our asset management business. And we expect to be in position to announce the new strategic initiative in this part of our strategy in the near future. We also continue to actively review viable acquisition opportunities as we evaluate multiple options to grow our asset management business.

在過去的幾個月裡，我們採取了重大步驟，不斷努力自然地發展我們的資產管理業務。我們預計在不久的將來宣布這部分策略的新策略舉措。在評估發展資產管理業務的多種選擇時，我們也將繼續積極審查可行的收購機會。

Earlier this week, our Board declared our second quarter 2020 regular monthly dividends of $0.205 per share payable in each of April, May and June, an amount that is unchanged from our monthly dividends for the first quarter and representing a 2.5% increase from the second quarter of prior year.

本週早些時候，我們的董事會宣布2020 年第二季度定期每月股息為每股0.205 美元，將於4 月、5 月和6 月支付，這一金額與第一季的每月股息相同，比第二季增加2.5%上一年的季度。

Consistent with our prior practice, and as part of the execution of our plan to absorb our semiannual supplemental dividends into our regular monthly dividends, we currently expect to recommend that our Board declare a supplemental dividend payable in June of $0.23 per share, representing a decrease of $0.01 from our December 2019 dividend.

與我們先前的做法一致，並且作為執行將半年度補充股息吸收到每月定期股息的計劃的一部分，我們目前預計建議董事會宣布 6 月份應付的補充股息為每股 0.23 美元，相當於減少我們2019 年12 月的股息為0.01 美元。

We continue to expect that our dividend transition plan will take several years, with the ultimate timing and outcome of this transition, impacted by the level of our investment originations and repayments, the performance of our investment portfolio, and changes in the overall interest rate environment and the overall economy.

我們仍然預計我們的股息過渡計畫將需要數年時間，這項過渡的最終時間和結果將受到我們的投資來源和償還水準、投資組合的表現以及整體利率環境變化的影響以及整體經濟。

Now turning to our investment activities in the quarter and our current investment pipeline. We completed lower middle market investments of over $36 million in the quarter, and as of today, I would characterize our lower middle market investment pipeline as significantly above average.

現在轉向我們本季的投資活動以及我們目前的投資管道。我們在本季完成了超過 3,600 萬美元的中低階市場投資，截至今天，我認為我們的中低階市場投資管道明顯高於平均水準。

We continue to be focused on maintaining a disciplined and selective approach to new investment opportunities, and we remain confident in our future ability to continue to originate new investments, consistent with our historical investment profile.

我們繼續專注於對新的投資機會保持嚴格和選擇性的方法，並且我們對未來繼續發起新投資的能力充滿信心，這與我們的歷史投資狀況保持一致。

In our comments over the last few quarters, we noted that we are experiencing increased third-party interest in a few of our existing lower middle market portfolio companies. These activities have continued, and these ongoing activities could result in additional attractive exits over the next few quarters. We also continued the successful focus of our nonlower middle market investment growth on our private loan portfolio, resulting in this portfolio growing by over $71 million on a net basis in the quarter, while our middle market portfolio decreased by over $18 million.

在過去幾季的評論中，我們注意到第三方對我們現有的一些中低階市場投資組合公司的興趣正在增加。這些活動仍在繼續，而這些正在進行的活動可能會在未來幾季帶來更多有吸引力的退出。我們也繼續成功地將非中低端市場投資成長的重點放在私人貸款投資組合上，導致該投資組合在本季度淨增長超過7,100 萬美元，而我們的中端市場投資組合減少了超過1,800 萬美元。

As of today, I would characterize our private loan investment pipeline as average. And in closing, our officer and director group has continued to be regular purchasers of our shares, investing approximately $600,000 during the quarter and owning Main Street shares valued at over $143 million at quarter end.

截至今天，我認為我們的私人貸款投資管道處於平均水平。最後，我們的高階主管和董事團隊繼續定期購買我們的股票，在本季投資了約 60 萬美元，並在季度末持有價值超過 1.43 億美元的主街股票。

With that, I will turn the call over to David.

這樣，我就把電話轉給大衛。

Thanks, Dwayne, and good morning, everyone. The year-end provides a good opportunity to look back at our history and recap the benefits of our unique investment strategy and efficient operating structure and discuss how those factors have enabled us to deliver attractive returns to our shareholders over an extended period of time.

謝謝，德韋恩，大家早安。年終提供了一個很好的機會來回顧我們的歷史，回顧我們獨特的投資策略和高效的營運結構的好處，並討論這些因素如何使我們能夠在較長時間內為股東提供有吸引力的回報。

Since our IPO over 12 years ago, we have increased our monthly dividends per share by 86%, and we have declared cumulative total dividends to our shareholders of over $28 per share or 189% of our IPO price of $15 per share.

自 12 年前首次公開募股以來，我們的每月每股股息增加了 86%，我們已向股東宣布的累計股息總額超過每股 28 美元，相當於我們每股 15 美元 IPO 價格的 189%。

As we have previously discussed, we believe that the primary drivers of our long-term success has been and continue to be our focus on investing in both debt and equity investments in the underserved lower middle market, our third-party asset management business and related economics, which directly benefit our shareholders, our industry-leading low-cost structure and the strong alignment of interest that exists between our management team and our shareholders through the meaningful stock ownership we have throughout our organization.

正如我們之前所討論的，我們相信，我們長期成功的主要驅動力一直並將繼續是我們對服務不足的中低端市場的債務和股權投資、我們的第三方資產管理業務和相關業務的關注。經濟，這使我們的股東直接受益，我們行業領先的低成本結構以及我們的管理團隊和股東之間透過我們在整個組織中擁有的有意義的股權而存在的強烈利益一致性。

Most notably and uniquely, our lower middle market strategy provides attractive leverage points and yields on our first-lien debt investments while also allowing us to be a true partner to the management teams of our portfolio companies through our equity ownership positions.

最值得注意和獨特的是，我們的中低端市場策略為我們的第一留置權債務投資提供了有吸引力的槓桿點和收益率，同時也使我們能夠透過我們的股權地位成為我們投資組合公司管理團隊的真正合作夥伴。

In short, we believe that we have significant downside protection through our first-lien debt investments, while still benefiting from significant upside potential with our equity investments. As a result of this strategy, in 2019, we were able to generate approximately $13 million of net realized gains and approximately $35 million of dividend income from this segment of our business.

簡而言之，我們相信，透過我們的第一留置權債務投資，我們可以獲得顯著的下行保護，同時仍受益於我們的股權投資的巨大上行潛力。由於這項策略，2019 年，我們得以從該業務部門產生約 1,300 萬美元的已實現淨收益和約 3,500 萬美元的股息收入。

Given our success in the lower middle market, we are pleased that we continue to find attractive new investment opportunities in the market. Our ability to provide customized capital solutions for the predominantly family-owned businesses that exist in the lower middle market has been and continues to be a strong differentiator for us in the marketplace.

鑑於我們在中低階市場的成功，我們很高興能夠繼續在市場上尋找有吸引力的新投資機會。我們為中低階市場中以家族企業為主的企業提供客製化資本解決方案的能力一直並將繼續成為我們在市場上的強大優勢。

In 2019, Main Street invested in 5 new lower middle market portfolio companies. This pace was slower than what we expect to achieve in any given annual period of time. That said, our origination volume can be lumpy in the lower middle market. And to reiterate what Dwayne mentioned in his opening remarks, as of today, we would characterize our lower middle market pipeline at significantly above average. We look forward to making press announcements in the very near future about some exciting new investments that we currently have in the final stages of completing.

2019 年，Main Street 投資了 5 家新的中低階市場投資組合公司。這一速度比我們預期在任何給定的年度時間段內實現的速度都要慢。也就是說，我們在中低階市場的首發量可能不穩定。重申德韋恩在開場白中提到的內容，截至今天，我們將我們的中低端市場管道描述為明顯高於平均水平。我們期待在不久的將來就我們目前處於最後階段的一些令人興奮的新投資發布新聞公告。

As a part of our constant effort to provide value to our lower middle market portfolio companies, we hosted our Fourth Annual Main Street President's Day event last fall. For those of you who may be unfamiliar with President's Day, it is a Main Street-hosted event, in which we invite the majority of our lower middle market portfolio company leaders to share best practices, learn from each other and benefit from being part of the broader Main Street portfolio. The event continues to improve each year, and we received very positive feedback from our lower middle market portfolio company executives.

作為我們不斷努力為中低端市場投資組合公司提供價值的一部分，我們去年秋天舉辦了第四屆年度大街總統日。對於那些可能不熟悉總統日的人來說，這是由大街主辦的活動，我們邀請大多數中低端市場投資組合公司的領導者分享最佳實踐，相互學習並從成為其中一員中受益更廣泛的主街投資組合。這項活動每年都在不斷改進，我們從中低端市場投資組合公司高層那裡得到了非常積極的回饋。

Topics covered in our most recent meeting included industry-oriented workgroups, sales generation techniques, cybersecurity briefings and other timely matters that are top of mind for our portfolio company executives. 12 years ago, we could not have imagined we would be able to build this type of collaborative community event and bring such robust benefits to our portfolio companies. As a result, our portfolio companies have done business together, referred business to each other and made friendships that are invaluable.

我們最近一次會議涵蓋的主題包括面向行業的工作小組、銷售生成技術、網路安全簡報以及我們投資組合公司高管最關心的其他及時事項。12 年前，我們無法想像我們能夠舉辦這種類型的協作社群活動，並為我們的投資組合公司帶來如此強勁的效益。因此，我們的投資組合公司共同開展業務、互相推薦業務並建立了寶貴的友誼。

One other example of topics covered at President's Day is voluntary participation in a cost savings initiative that we undertook approximately 2 years ago. With our platform of 69 lower middle market companies, each can benefit from group savings in several expense categories that will be difficult for our companies to replicate on their own. Some examples include savings for travel, shipping, small parcels and insurance. As Main Street continues to grow, we are excited to provide our lower middle market portfolio companies the opportunity to participate in this highly effective annual event.

總統日主題的另一個例子是自願參與我們大約兩年前開展的一項成本節約計劃。憑藉我們由 69 家中低端市場公司組成的平台，每家公司都可以從多個費用類別的團體節省中受益，而我們的公司很難自行複製這些費用。一些例子包括旅行、運輸、小包裹和保險方面的節省。隨著 Main Street 的不斷發展，我們很高興為我們的中低端市場投資組合公司提供參與這項高效年度活動的機會。

Now turning to our current investment portfolio. As of December 31, we had investments in 185 portfolio companies spanning across more than 50 different industries. Our largest portfolio company represented 5.1% of our total investment income for the year and 2.8% of our total investment portfolio fair value at year-end. The majority of our portfolio companies' investments represent less than 1% of our income and our assets.

現在轉向我們目前的投資組合。截至 12 月 31 日，我們投資了 185 家投資組合公司，涵蓋 50 多個不同產業。我們最大的投資組合公司占我們當年總投資收益的5.1%，占我們年末總投資組合公允價值的2.8%。我們大多數投資組合公司的投資僅占我們收入和資產的不到 1%。

Our lower middle market portfolio included investments in 69 companies, representing approximately $1.2 billion of fair value, which is approximately 20% above our cost basis. The contributions from our lower middle market portfolio continue to be well-diversified with 40 of the 69 lower middle market companies having unrealized appreciation at year-end, and 35 of these companies contributed to our dividend income in 2019. In the past 12 months, we successfully exited 4 lower middle market companies, which generated a net realized gain of approximately $13 million. At the lower middle market portfolio level, the portfolio's median net senior debt-to-EBITDA ratio was a conservative 2.8:1 and the total EBITDA to senior interest ratio was 2.9:1.

我們的中低階市場投資組合包括對 69 家公司的投資，公允價值約為 12 億美元，比我們的成本基礎高出約 20%。我們的中低端市場投資組合的貢獻持續多元化，69家中低端市場公司中有40家在年底未實現升值，其中35家公司為我們2019年的股息收入做出了貢獻。在過去 12 個月中，我們成功退出了 4 家中低端市場公司，實現了約 1,300 萬美元的淨收益。在中低階市場投資組合層面，投資組合的淨優先債務與 EBITDA 比率中位數保守為 2.8:1，總 EBITDA 與優先利息比為 2.9:1。

As a complement to our lower middle market portfolio, we had investments in 65 companies in our private loan portfolio, representing approximately $690 million of fair value, and in our middle market portfolio, we had investments in 51 companies, representing approximately $520 million of fair value.

作為中低端市場投資組合的補充，我們在私人貸款投資組合中投資了65 家公司，公允價值約6.9 億美元；在中端市場投資組合中，我們對51 家公司進行了投資，公允價值約5.2 億美元。價值。

As we have discussed on previous conference calls, given our favorable view of the lower middle market and private loan opportunities that exist today, we have primarily focused our investment activities on these segments of the business with our middle market activities focused on highly selective investments instead of a growth-oriented strategy with the intent to shrink the middle market portfolio on a relative basis compared to our lower middle market and private loan portfolios.

正如我們在先前的電話會議上討論的那樣，鑑於我們對中低端市場和當今存在的私人貸款機會的看好，我們將投資活動主要集中在這些業務領域，而我們的中端市場活動則側重於高度選擇性的投資以成長為導向的策略，旨在相對於中低端市場和私人貸款投資組合縮小中端市場投資組合。

As a result, during 2019, we increased our private loan portfolio by 33% and decreased our middle market portfolio by 6%. The total investment portfolio at fair value at year-end was approximately 107% of the related cost basis, and we had 8 investments on nonaccrual status, which equaled 1.4% of the total investment portfolio at fair value and 4.8% of cost. Additional details on our investment portfolio at year-end are included in the press release we issued yesterday.

因此，2019 年，我們的私人貸款組合增加了 33%，中間市場組合減少了 6%。年末以公允價值計量的投資組合總額約為相關成本基礎的107%，其中有8項非權責發生製投資，相當於以公允價值計量的投資組合總額的1.4%和成本的4.8%。有關我們年底投資組合的更多詳細信息，請參閱我們昨天發布的新聞稿。

With that, I will turn the call over to Brent to cover our financial results, capital structure, and liquidity positions.

接下來，我將把電話轉給布倫特，介紹我們的財務表現、資本結構和流動性狀況。

Thanks, David. We are pleased to report that our total investment income increased over the same period in 2018 to a total of $60.6 million, primarily driven by an increase in dividend income. The change in total investment income is after a decrease of $0.4 million related to lower levels of accelerated income for certain debt investments when compared to the fourth quarter of last year. The overall increase in investment income is also after the negative impact to interest income from lower LIBOR rates when compared to the fourth quarter of last year.

謝謝，大衛。我們很高興地報告，我們的總投資收入較 2018 年同期增加至 6,060 萬美元，這主要是由於股息收入的增加。與去年第四季相比，總投資收入減少了 40 萬美元，原因是某些債務投資的加速收入水準較低。投資收入的整體成長也是在倫敦銀行同業拆借利率（LIBOR）較去年第四季下降對利息收入產生負面影響之後出現的。

Our operating expenses, excluding noncash share-based compensation expense, increased by $3.7 million over the same period of the prior year to a total of $18.6 million, primarily related to an increase in interest expense and an increase in compensation expense. The increase in compensation expense is primarily due to an increase in the fair value of our deferred compensation plan assets, which is an expense that is solely based on the public stock market price movement of these assets. It has no impact on our net income due to the offsetting unrealized appreciation on those same deferred compensation plan assets and a net decrease in the nonrecurring expense reduction or benefit to income that was recorded relating to the conversion of the cash bonus into a noncash restricted stock grant. The ratio of our total operating expenses, excluding interest expense as a percentage of our average total assets was 1.2% for the fourth quarter on an annualized basis and 1.4% for the full year. The combination of our unique investment strategy and leverage of our efficient operating structure resulted in distributable net investment income of $42.1 million or $0.66 per share, which exceeded our monthly dividends paid for the quarter by approximately 7%.

我們的營運費用（不包括非現金股份補償費用）比去年同期增加了370萬美元，達到總計1,860萬美元，主要與利息費用和補償費用的增加有關。補償費用的增加主要是由於我們的遞延補償計劃資產的公允價值增加，這是一項完全基於這些資產的公開股票市場價格變動的費用。它對我們的淨利潤沒有影響，因為抵消了相同遞延薪酬計劃資產的未實現升值，以及與現金紅利轉換為非現金限制性股票相關的非經常性費用減少或收入收益的淨減少授予。扣除利息費用後，我們的總營業費用占我們平均總資產的比例，第四季以年化計算為1.2%，全年為1.4%。我們獨特的投資策略和高效營運結構的結合帶來了 4,210 萬美元的可分配淨投資收益，即每股 0.66 美元，比我們本季支付的月度股息高出約 7%。

The activities on our external investment manager benefited our net investment income by approximately $2.8 million through the allocation of $1.7 million of operating expenses for services we provided to it and $1.1 million of dividend income.

我們的外部投資經理的活動透過為我們提供的服務分配 170 萬美元的營運費用和 110 萬美元的股息收入，為我們帶來了約 280 萬美元的淨投資收入。

We recorded a net realized loss of $0.9 million during the fourth quarter, primarily relating to the realized loss from the restructure of our middle market investment, partially offset by a realized gain related to the exit of a private loan investment. We recorded net unrealized depreciation on the investment portfolio of $23.5 million, primarily resulting from $10.8 million of net depreciation related to our middle market portfolio, $6.9 million of net depreciation on our lower middle market portfolio, $6.9 million of net depreciation on our private loan portfolio and $3 million of net depreciation on our other portfolio, partially offset by $4.2 million of appreciation relating to our external investment manager.

第四季我們錄得 90 萬美元的已實現淨虧損，主要與中間市場投資重組的已實現虧損有關，部分被與私人貸款投資退出相關的已實現收益所抵消。我們的投資組合未實現淨折舊為2,350 萬美元，主要是由於與中端市場投資組合相關的1,080 萬美元淨折舊、中低端市場投資組合的淨折舊為690 萬美元、私人貸款投資組合的淨折舊為690 萬美元我們其他投資組合的淨折舊為 300 萬美元，部分被我們外部投資經理相關的 420 萬美元升值所抵銷。

Our operating results for the fourth quarter resulted in a net increase in net assets of $16 million or $0.25 per share. Our overall capitalization and liquidity remains strong, as our total liquidity was approaching $500 million at the end of the year. During the fourth quarter, we repaid our $175 million investment-grade notes that matured in December, and we were also very pleased to be able to increase our $250 million investment-grade debt issuance from this past April by $75 million.

我們第四季的經營業績導致淨資產淨增加 1,600 萬美元，即每股 0.25 美元。我們的整體資本和流動性仍然強勁，年底流動性總額接近 5 億美元。在第四季度，我們償還了 12 月到期的 1.75 億美元投資等級票據，我們也很高興能夠將今年 4 月份的 2.5 億美元投資級債券發行量增加 7,500 萬美元。

The additional $75 million was issued at a yield to maturity of 3.95% and brought the total issuance to $325 million, representing our first index-eligible investment-grade debt deal in what we view as an important capital markets milestone. We also raised approximately $35 million in net proceeds under our ATM equity issuance program during the fourth quarter, with an average sale price of nearly $43 per share.

額外發行的 7,500 萬美元的到期收益率為 3.95%，發行總額達到 3.25 億美元，這是我們首筆符合指數資格的投資級債務交易，我們認為這是資本市場的一個重要里程碑。第四季度，我們也透過 ATM 股票發行計畫籌集了約 3,500 萬美元的淨收益，平均售價接近每股 43 美元。

As we look forward to our expected results for the first quarter of 2020 and taking into account the impact from the decline in LIBOR rates that occurred during 2019, which we estimate is a net -- as a negative net impact of approximately $0.04 per share in the upcoming first quarter when compared to the first quarter of last year, and taking into account our expected origination and repayment activity, we expect that we will generate distributable net investment income of $0.62 to $0.63 per share during the first quarter of 2020.

我們期待 2020 年第一季的預期結果，並考慮到 2019 年 LIBOR 利率下降的影響，我們估計這是一個淨影響，即每股約 0.04 美元的負面淨影響。與去年第一季相比，考慮到我們預期的發起和還款活動，我們預計即將到來的第一季將在2020 年第一季產生每股0.62 至0.63 美元的可分配淨投資收益。

This estimate is $0.005 to $0.015 per share or approximately 1% to 2% above our previously announced monthly dividends for the first quarter of $0.615 per share.

這項預估為每股 0.005 至 0.015 美元，比我們先前宣布的第一季每股 0.615 美元的月度股息高出約 1% 至 2%。

With that, I will now turn the call back over to the operator so we can take any questions.

現在，我將把電話轉回給接線員，以便我們回答任何問題。

(Operator Instructions) And our first question is from the line of Robert Dodd with Raymond James.

（操作員說明）我們的第一個問題來自羅伯特·多德（Robert Dodd）和雷蒙德·詹姆斯（Raymond James）。

First -- well, both questions really relate to the same thing, kind of COVID-19. With -- can you give us any color on any discussions you've had with your portfolio companies, primarily on the lower middle market side, I would say? About -- not their exposure because, obviously, they're domestic companies, but their supply chain exposure? And if there's any particular areas where they do have supply chain to China, particularly if it's Hubei province? And if there's any concentration in supply chain that touches on China in any of your businesses?

首先，這兩個問題實際上都與同一件事有關，即 COVID-19。我想說，您能否向我們介紹一下您與投資組合公司進行的任何討論，主要是在中低端市場方面？關於——不是他們的曝光度，因為顯然他們是一家國內公司，而是他們的供應鏈曝光？他們是否在某些特定地區有通往中國的供應鏈，特別是湖北省？你們的業務中是否存在涉及中國的供應鏈集中情況？

Yes. Thanks, Robert. What I would say is, as you touched on, our lower middle market portfolio is largely domestic U.S.-based companies and not only the U.S.-based, most of their vendors and customers, as we talked about in the past, were also going to be predominantly U.S.-based. We have had conversations with our portfolio companies on this topic. And I would say that the current expectation is the impact is not overly significant, definitely not as significant as you might see from the broader market or the broader economy. We do expect that as the issue continues to play out and works its way through all the supply chain issues, that we will have some impact. But again, I think we look at the impact and think it will be less significant on our side than it would be for the overall economy.

是的。謝謝，羅伯特。我想說的是，正如您所提到的，我們的中低端市場投資組合主要是美國本土公司，而且不僅是美國公司，正如我們過去談到的那樣，他們的大多數供應商和客戶也將主要位於美國。我們已經與我們的投資組合公司就這個主題進行了對話。我想說的是，目前的預期是影響不會太大，絕對不會像你從更廣泛的市場或更廣泛的經濟中看到的那麼重要。我們確實預計，隨著問題繼續發展並解決所有供應鏈問題，我們將產生一些影響。但我再次強調，我們會審視其影響，並認為它對我們的影響不會比對整體經濟的影響更大。

I think the areas where you would expect to see more impact would be areas where you've got heavy electronics. That's an area where I think we would expect to see some of the impact first. But again, I think we're in a more of a wait-and-see position until it’s got -- until these supply chain issues really work their way through.

我認為您期望看到更大影響的領域將是擁有重型電子產品的領域。我認為我們預計會首先在這個領域看到一些影響。但同樣，我認為我們更多地處於觀望狀態，直到它得到解決——直到這些供應鏈問題真正解決。

Got it. I appreciate that. And then, I mean -- sort of tied to the same thing. You characterized your lower middle market pipeline significantly above average. And I mean, you said today, but that may have been last week. Do you think -- is this kind of noise you think likely to have any impact on that either increasing it because, again, family-owned businesses, maybe, retirement planning or reducing it as people decide to sit on hands and kind of wait things out a little bit?

知道了。我很感激。然後，我的意思是——有點與同一件事有關。您描述的中低階市場通路明顯高於平均。我的意思是，你說今天，但那可能是上週。你認為這種噪音是否可能會產生任何影響，要么增加它，因為家族企業，也許，退休計劃，要么減少它，因為人們決定袖手旁觀並等待一些事情出了一點點？

Yes. I would say it's -- again, I think it should be little bit of a wait-and-see. I would say our current pipeline, as I said in my earlier comments, is significantly above average. The pipeline today is very robust. Obviously, the impact of coronavirus and the indirect impact to supply chain is something that we have to take into consideration as we work through our due diligence processes. But I would say that the characteristics of our current pipeline is consistent with the types of companies that we've executed historically in the lower middle market. So going back to my earlier response, while it's something we have to watch, it's not something that has a significant an impact as you might see from a broader economy standpoint.

是的。我想說的是──我認為應該再等等看。我想說，正如我在之前的評論中所說，我們目前的管道明顯高於平均水平。今天的管道非常強大。顯然，冠狀病毒的影響以及對供應鏈的間接影響是我們在盡職調查過程中必須考慮的因素。但我想說的是，我們目前管道的特徵與我們歷史上在中低端市場執行的公司類型一致。因此，回到我之前的回答，雖然這是我們必須關注的事情，但它並不會像從更廣泛的經濟角度來看那樣產生重大影響。

Right, right. And then if I can, one follow-up to that since it's still related to the same topic. On the potential for exits. And again, it's very early days. But have you seen anything over the last week of any of the -- typically, when there's an exit, it's either M&A, private equity, whatever somebody coming in to take, in many cases, one of these businesses as an add-on or a whole variety of things? But has there been any movement on that, that you've seen so far, I mean, literally days into this but...

是的是的。然後，如果可以的話，請跟進一下，因為它仍然與同一主題相關。關於退出的可能性。再說一次，現在還為時過早。但是，你在過去一周看到過任何一種情況嗎——通常，當出現退出時，要么是併購、私募股權，要么是有人進來，在很多情況下，這些業務之一作為附加業務或各種各樣的事情？但是到目前為止，你所看到的這方面是否有任何進展，我的意思是，實際上幾天后，但是...

Yes. Today, we've not. So again, it will be interesting to see how things play out over the coming weeks. But as we sit here today, we have not seen a material impact on that front either.

是的。今天，我們還沒有。所以，接下來幾週事情的發展將會很有趣。但當我們今天坐在這裡時，我們也沒有看到這方面的實質影響。

The next question is coming from the line of Bryce Rowe with National Securities.

下一個問題來自國家證券公司的布萊斯羅 (Bryce Rowe)。

Dwayne, obviously, you highlighted the asset management initiative that you hope to talk about here in the near future. Obviously, you're probably a bit constrained in what you can say. But I am curious how comparable will that be to the HMS situation? Is it a deviation from that? And so any kind of color around that asset management initiative would be helpful?

Dwayne，顯然，您強調了您希望在不久的將來在這裡討論的資產管理計劃。顯然，你能說的話可能有點受限。但我很好奇這與英國皇家海軍的情況有何可比性？是不是有偏差？那麼圍繞該資產管理計劃的任何顏色都會有幫助嗎？

Sure. So as you expected, Bryce, we're going to be limited on what we can say. But as we've talked about for a number of years, we've been actively looking for ways to grow our asset management business. It's a core part of our overall strategy. So I'd say the most recent progress we've made is that we worked through the process of looking at what we could do on a new private fund. So it would be different than what we would do with an HMS or if we were to do something from an M&A standpoint. From a -- from a BDC industry standpoint, it will be different from that. And I'd say we're kind of in the prelaunch stage of looking at what we can do on the private -- the new private fund that we would put in place.

當然。因此，正如你所期望的，布萊斯，我們能說的內容將受到限制。但正如我們多年來所談論的那樣，我們一直在積極尋找發展資產管理業務的方法。這是我們整體策略的核心部分。所以我想說，我們最近的進展是，我們研究了我們可以對新的私募基金做些什麼。因此，這與我們使用 HMS 所做的事情或從併購的角度做某事有所不同。從 BDC 產業的角度來看，情況會有所不同。我想說，我們正處於啟動前階段，研究我們可以對私募基金——我們將設立的新私募基金——做些什麼。

In terms of the goals, obviously, it's -- the goal is to grow our asset management business and to continue to diversify the funds that we manage. And I would say that the size of the opportunity will largely be dictated by what happens after we get through this prelaunch phase that we're in today.

就目標而言，顯然，目標是發展我們的資產管理業務並繼續實現我們管理的基金多元化。我想說，機會的大小很大程度上取決於我們度過今天所處的啟動前階段後會發生什麼。

Okay. That's helpful. And then a couple of more questions. Number one, you obviously highlighted incentive comp being down here in the fourth quarter. Could you remind us when we think about incentive comp, is there a set ROE target that you have, that really doesn't change year in, year out? Or does that fluctuate on an annual basis?

好的。這很有幫助。還有幾個問題。第一，您顯然強調了第四季度激勵薪酬的下降。當我們考慮激勵補償時，您能否提醒我們，您是否有一個設定的 ROE 目標，並且確實年復一年都不會改變？還是每年都有波動？

I would say, it fluctuates on an annual basis based upon what's going on in the marketplace, the overall economy and specifically in our portfolio. So I would say that's kind of on an annual -- year-to-year basis. I would say, long term, the ROE targets or goals do not move as much. So I'd say that our goals continue to be consistent with what we've given in the past. So I think long term, we expect to be in that same range from an ROE standpoint, which would be something in the 10-plus percent to mid-teens range. So I think long term, we continue to believe that we can achieve those types of ROE goals or targets. But I do think, on a year-to-year basis, you do adjust that based upon what's going on in the current time period.

我想說，它每年都會根據市場狀況、整體經濟狀況，特別是我們的投資組合而波動。所以我想說，這是每年的情況。我想說，從長遠來看，ROE 目標不會發生太大變化。所以我想說，我們的目標仍然與我們過去的目標一致。因此，我認為從長遠來看，從 ROE 的角度來看，我們預計會處於相同的範圍內，即 10% 以上到 10% 左右的範圍內。因此，我認為從長遠來看，我們仍然相信我們可以實現這些類型的 ROE 目標或具體目標。但我確實認為，在每年的基礎上，你確實會根據當前時期發生的情況進行調整。

Got it. Okay. And then lastly, this is kind of been an ongoing trend with the middle market portfolio, shrinking in absolute dollars and in relative and private loan growing. Is there -- is there any way to think about the middle market portfolio, will it continue to shrink? You talked about it in terms of relative there in your prepared remarks, but just curious where you kind of see that going over the next couple of years in terms of maybe absolute and relative terms?

知道了。好的。最後，這是中間市場投資組合的持續趨勢，絕對美元萎縮，相對貸款和私人貸款成長。有沒有什麼方法可以考慮中間市場投資組合，它會繼續萎縮嗎？您在準備好的發言中從相對的角度談到了這一點，但只是好奇您認為未來幾年從絕對和相對的角度來看會發生什麼？

Yes. So what I would say is, you've heard us say this before. In general, when you compare the middle market opportunities to the private loan opportunities, we believe we're seeing more attractive opportunities in the private loan space. That's largely dictated by what we believe are better terms, whether that's legal documentation or kind of legal protections or if it's the ability to be closer to the company, whether it's closer to the sponsor, closer to the management team or just closer overall to the business in terms of what you can do from an underwriting or a due diligence standpoint. So I think our position today continues to be what it's been for the last couple of years. We -- all things being equal, we favor the private loan opportunities above the middle market. That being said, as you've also heard us say in the past, to the extent we see good opportunities in the middle market, and we feel like there's acceptable terms, whether it's legal docs or otherwise, you'll continue to see us take opportunities as they come up in the middle market. But in general, you'll continue to see us move more towards the private loan opportunities and away from the middle market opportunities.

是的。所以我想說的是，你以前聽過我們這麼說過。總的來說，當您將中間市場機會與私人貸款機會進行比較時，我們相信我們在私人貸款領域看到了更具吸引力的機會。這很大程度上取決於我們認為更好的條款，無論是法律文件還是某種法律保護，或者是否能夠更接近公司，無論是更接近贊助商、更接近管理團隊還是只是更接近整體從承保或盡職調查的角度來看您可以做些什麼。所以我認為我們今天的立場仍然是過去幾年的立場。在所有條件相同的情況下，我們更青睞中間市場之上的私人貸款機會。話雖這麼說，正如您過去也聽我們說過的那樣，就我們在中間市場看到的良好機會而言，我們覺得有可以接受的條款，無論是法律文件還是其他方面，您都會繼續看到我們抓住中間市場出現的機會。但總的來說，您將繼續看到我們更多地轉向私人貸款機會，而不是中間市場機會。

(Operator Instructions) The next question will be coming from the line of Kenneth Lee with RBC Capital Markets.

（操作員說明）下一個問題將來自 RBC 資本市場的 Kenneth Lee。

Just want to get your sense if you have any updated thoughts on expectations for leverage over the near-term under the current conditions?

只是想了解您對當前條件下的短期槓桿預期是否有任何最新想法？

Yes, this is Brent. I'll take that question. We ended the year on a total debt to equity at 0.73x and on a regulatory basis, just over 0.5x. So consistent with our historical track record, we're maintaining a conservative leverage profile. I believe that our intent is certainly to maintain that going forward. We don't have any initiative to significantly increase leverage as we move forward. And I think it's prudent to do so given the uncertain economic environment.

是的，這是布倫特。我來回答這個問題。截至年底，我們的總負債與股本比率為 0.73 倍，而監管基礎上的比率略高於 0.5 倍。因此，與我們的歷史記錄一致，我們維持保守的槓桿狀況。我相信我們的意圖肯定是繼續保持這股勢頭。隨著我們的前進，我們沒有任何大幅提高槓桿率的措施。我認為考慮到經濟環境的不確定性，這樣做是謹慎的。

Okay, very helpful. And just 1 follow-up, if I may. Just on the funding costs, and I saw that you recently issued some notes, and just given the current interest rate levels, do you expect any further changes in terms of your funding mix going forward?

好的，非常有幫助。如果可以的話，只有 1 個後續行動。就融資成本而言，我看到你們最近發行了一些票據，考慮到目前的利率水平，你們預計未來的融資組合會有進一步的變化嗎？

I would say, generally, not. I think 1 thing we'll probably do is utilize revolver a little bit more in 2020. If you recall, when we did the investment-grade notes offering in -- first one in April of last year, we used those proceeds to repay the revolver. So on the whole, or on the balance of 2019, we had a lower revolver balance than we typically do. So I'd expect to have a higher revolver balance, which I think will be good to have some more variable rate -- a floating rate debt obligations out there. But generally speaking, we expect to maintain conservative -- the leverage profile and a mix of the debt and equity going forward.

我想說，一般來說，不會。我認為我們可能會做的一件事就是在 2020 年更多地使用左輪手槍。如果你還記得，當我們去年四月發行第一筆投資等級票據時，我們用這些收益來償還左輪手槍。因此，總的來說，或者說就 2019 年的餘額而言，我們的左輪手槍餘額比平常低。因此，我預計會有更高的左輪餘額，我認為這將有利於擁有更多可變的利率——浮動利率債務義務。但總的來說，我們預計將保持保守——槓桿狀況以及未來的債務和股本組合。

Our next question is a follow-up from the line of Robert Dodd with Raymond James.

我們的下一個問題是羅伯特·多德和雷蒙德·詹姆斯的後續問題。

Yes, just a follow-up. On the asset management business, I mean, just -- and again, you can't say much, but would you expect the accounting treatment to be the same? Hypothetically, if you're getting fees from that, would it show up as dividend and then a cost offset kind of akin to HMS? Or would there be some -- is there something about the contemplated structure that would differ from that kind of treatment?

是的，只是後續行動。在資產管理業務上，我的意思是，再說一次，你不能說太多，但你希望會計處理是一樣的嗎？假設一下，如果你從中獲得費用，它會顯示為股息，然後是類似 HMS 的成本抵銷嗎？或者，所設想的結構會與這種處理方式有所不同？

Yes, Robert, I would expect that the benefit to Main Street, and the goal we have is really to grow that asset management business, and it would come in the form to us from a benefit standpoint, largely through the asset management fees similar or consistent to what we receive on the HMS front.

是的，羅伯特，我預計大街的利益，我們的目標實際上是發展資產管理業務，從利益的角度來看，它將以我們的形式出現，主要是透過類似或與我們在英國皇家海軍戰線上收到的訊息一致。

Thank you. At this time, this will conclude our question-and-answer session. And I'll turn the call back to management for closing comments.

謝謝。到此，我們的問答環節就結束了。我會將電話轉回給管理層以徵求結束意見。

We thank everyone for joining us again this morning, and we look forward to talking after our first quarter results are issued. Thank you.

我們感謝大家今天早上再次加入我們，我們期待在第一季業績發布後進行討論。謝謝。

Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. You may now disconnect your lines and have a wonderful day.

女士們、先生們，感謝您的參與。今天的電話會議到此結束。您現在可以斷開線路並度過美好的一天。