Main Street Capital Corp (MAIN) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Main Street Capital second-quarter earnings conference call. (Operator Instruction) As a reminder, this call is being recorded. It is now my pleasure to introduce your host, Zach Vaughan. Thank you Zach, you may begin.

您好，歡迎參加 Main Street Capital 第二季財報電話會議。（接線生說明）謹此提醒，此通話正在錄音。現在我很高興向大家介紹你們的主持人扎克·沃恩。謝謝扎克，你可以開始了。

Thank you, operator, and good morning, everyone. Thank you for joining us for Main Street Capital Corporation's second-quarter 2024 earnings conference call. For joining me today with prepared comments are Dwayne Hyzak, Chief Executive Officer; David Magdol, President and Chief Investment Officer; and Jesse Morris, Chief Financial Officer and Chief Operating Officer. Also participating for the Q&A portion of the call is Nick Meserve, Managing Director and Head of Main Street's Private Credit Investment Group.

謝謝接線員，大家早安。感謝您參加 Main Street Capital Corporation 的 2024 年第二季財報電話會議。今天與我一起發表準備好的評論的是執行長 Dwayne Hyzak； David Magdol，總裁兼首席投資長；財務長兼營運長傑西莫里斯 (Jesse Morris)。Main Street 私人信貸投資集團董事總經理兼負責人 Nick Meserve 也參加了電話會議的問答部分。

Main Street issued a press release yesterday afternoon that details the company's second quarter financial and operating results. This document is available on the Investor Relations section of the company's website at .mainstcapital.com. A replay of today's call will be available beginning one hour after the completion of the call and will remain available until August 16. Information on how to access the replay was included in yesterday's release.

Main Street 昨天下午發布了一份新聞稿，詳細介紹了該公司第二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。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 8 月 16 日。有關如何存取重播的資訊已包含在昨天的發布中。

We also advise you that this conference call is being broadcast live through the internet and can be accessed on the company's homepage. Please note that information reported on this call speaks only as of today, August 9, 2024, and therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.

我們也建議您，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。請注意，本次電話會議報告的資訊僅截至今天（2024 年 8 月 9 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.

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。

These statements are based on management's estimates, assumptions and projections as of the date of this call, and there are no guarantees of future performance. 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.

這些陳述是基於管理層截至本次電話會議之日的估計、假設和預測，對未來績效不提供任何保證。由於風險、不確定性和其他因素，包括但不限於本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。 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 for DNII. DNII is net investment income or NII as determined in accordance with the US generally accepted accounting principles or GAAP, excluding the impact of non-cash compensation expenses.

在今天的電話會議上，管理層將討論非 GAAP 財務指標，包括 DNII 的可分配淨投資收入。DNII 是根據美國公認會計原則或 GAAP 確定的淨投資收益或 NII，不包括非現金補償費用的影響。

Management believes that presenting DNII and the related per share amounts are useful and appropriate supplemental disclosures for analyzing Main Street's financial performance since non-cash compensation expenses did not result in net cash impact to Main Street upon settlement. Please refer to yesterday's press release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures.

管理層認為，提出 DNII 和相關每股金額對於分析 Main Street 的財務業績是有用且適當的補充披露，因為非現金補償費用在結算時不會對 Main Street 產生淨現金影響。請參閱昨天的新聞稿，以了解這些非 GAAP 指標與最直接可比較的 GAAP 財務指標的調整表。

Two additional key performance indicators that management will be discussing on this call are net asset value or NAV and return on equity or ROE. NAV is defined as total assets minus total liabilities and is also reported on a per-share basis. Main Street defines ROE as the net increase in net assets resulting from operations divided by the average quarterly total net assets. Please note that certain information discussed on this call, including information related to portfolio companies was derived from third-party sources and has not been independently verified.

管理階層將在本次電話會議上討論的另外兩個關鍵績效指標是資產淨值（NAV）和股本回報率（ROE）。資產淨值定義為總資產減去總負債，也是以每股為基礎報告的。Main Street 將 ROE 定義為營運產生的淨資產淨成長除以平均季度總淨資產。請注意，本次電話會議中討論的某些資訊（包括與投資組合公司相關的資訊）來自第三方來源，未經獨立核實。

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

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

Thanks, Zach. Good morning, everyone, and thank you for joining us. We appreciate your participation on this morning's call, and we hope that everyone is doing well.

謝謝，扎克。大家早安，感謝您加入我們。我們感謝您參加今天早上的電話會議，希望每個人都一切順利。

On today's call, I will provide my usual update regarding our performance in the quarter, while also providing updates on our asset management activities, our recent dividend declarations, our expectations for dividends going forward, our recent investment activities and current investment pipeline and several other noteworthy updates.

在今天的電話會議上，我將按照慣例提供有關本季度業績的最新信息，同時提供有關我們的資產管理活動、我們最近的股息聲明、我們對未來股息的預期、我們最近的投資活動和當前的投資管道以及其他幾個方面的最新資訊值得注意的更新。

Following my comments, David and Jesse will provide additional comments regarding our investment strategy, investment portfolio, financial results, capital structure and leverage and our expectations for the third quarter of 2024, after which we'll be happy to take your questions.

在我發表評論後，David 和Jesse 將就我們的投資策略、投資組合、財務表現、資本結構和槓桿以及我們對2024 年第三季的預期提供更多評論，之後我們將很樂意回答您的問題。

We are pleased with our second quarter results, which were highlighted by an annualized return on equity of 16.1%, DNII per share that continued to exceed the dividends paid to our shareholders and a new record for NAV per share for the eighth consecutive quarter. We believe these continued strong results demonstrate the sustainable strength of our overall platform, the benefits of our differentiated and diversified investment strategies, the unique contributions of our asset management business and the continued underlying strength and quality of our portfolio companies.

我們對第二季的業績感到滿意，年化股本回報率為 16.1%，每股 DNII 繼續超過支付給股東的股息，每股資產淨值連續第八個季度創下新紀錄。我們相信，這些持續強勁的業績證明了我們整體平台的可持續實力、差異化和多元化投資策略的優勢、資產管理業務的獨特貢獻以及投資組合公司持續的基礎實力和品質。

We're also pleased that we generated significant growth in both our lower middle market and private loan investment portfolios and ended the quarter with attractive investment pipelines in both investment strategies, which we expect will be beneficial in the future.

我們也很高興我們的中低端市場和私人貸款投資組合都實現了顯著增長，並在本季度結束時在這兩種投資策略中都獲得了有吸引力的投資渠道，我們預計這將在未來受益。

We remain encouraged by the continued favorable performance of our diversified lower middle market and private loan investment strategies and remain confident that these strategies, together with the benefits of our asset management business and our cost efficient operating structure will allow us to continue to deliver superior results for our shareholders in the future.

我們對多元化中低端市場和私人貸款投資策略的持續良好表現感到鼓舞，並堅信這些策略，加上我們資產管理業務的優勢和具有成本效益的營運結構，將使我們能夠繼續取得優異的業績為了我們的股東的未來。

Additionally, with the continued support of our long-term lender relationships, as evidenced by our recent extension and expansion of our corporate facility and the benefits of our second investment grade debt offering of the year in June, we continue to maintain strong liquidity and a conservative leverage profile, which we believe is important in the current economic environment and remain excited about the current opportunities in both our lower middle market and private loan investment strategies.

此外，在我們長期貸款人關係的持續支持下，正如我們最近擴展和擴大我們的企業融資以及今年 6 月第二次投資級債務發行的好處所證明的那樣，我們繼續保持強勁的流動性和保守的槓桿狀況，我們認為這在當前的經濟環境中很重要，並且對我們中低端市場和私人貸款投資策略的當前機會感到興奮。

These positive results for the second quarter, combined with our favorable outlook for the third quarter resulted in our recommendations to our Board of Directors for our most recent dividend announcements, which I'll discuss in more detail later.

第二季度的這些積極業績，加上我們對第三季度的樂觀前景，使我們向董事會推薦了最新的股息公告，我將在稍後詳細討論。

Our NAV per share increased in the quarter primarily due to the impact of net fair value increases in our investment portfolio and the accretive impact of our equity issuances, which Jesse will discuss in more detail. The continued favorable performance of the majority of our lower middle market portfolio companies resulted in strong dividend income contributions and another quarter of significant net fair value appreciation in the equity investments in the lower middle market portfolio.

我們的每股資產淨值在本季度有所增長，主要是由於我們的投資組合淨公允價值增加的影響以及我們股票發行的增值影響，傑西將更詳細地討論這一點。我們大多數中低端市場投資組合公司的持續良好表現導致了強勁的股息收入貢獻，以及中低端市場投資組合的股權投資又一個季度的淨公允價值大幅升值。

We are also excited about the follow-on investments we made to finance strategic acquisitions by two of our high-performing lower middle market portfolio companies, each of which were funded by follow-on debt investments by Main Street for a total of over $36 million of incremental debt investments in these portfolio companies. We expect that these follow-on investments will help drive additional fair value appreciation in these portfolio companies in future quarters in addition to the highly attractive interest income provided by these incremental debt investments.

我們也對我們為兩家中低端市場表現出色的投資組合公司的策略性收購融資而進行的後續投資感到興奮，其中每家公司均由 Main Street 的後續債務投資提供資金，總額超過 3600 萬美元這些投資組合公司的增量債務投資。我們預計，除了這些增量債務投資提供的極具吸引力的利息收入之外，這些後續投資將有助於在未來幾季推動這些投資組合公司的公允價值進一步升值。

In the second quarter, we were also pleased to have recognized a meaningful realized gain upon the combination of one of our lower middle market portfolio companies with a strategic acquirer, which resulted in the full exit of our debt investments and a partial exit of our equity investment in the company, while retaining an equity investment in the combined company and the related future upside from the strategic combination.

在第二季度，我們也很高興地認識到，我們的一家中低端市場投資組合公司與戰略收購方合併後實現了有意義的收益，這導致我們完全退出債務投資和部分退出股權投資該公司，同時保留對合併後公司的股權投資以及策略合併帶來的相關未來優勢。

We are excited that we continue to see increased interest from potential buyers in several of our lower middle market portfolio companies that could lead to favorable realizations over the next few quarters in which we believe highlights the strength and quality of our portfolio companies.

我們很高興看到潛在買家對我們的幾家中低端市場投資組合公司的興趣不斷增加，這可能會在未來幾季帶來有利的實現，我們相信這突顯了我們投資組合公司的實力和品質。

We are very pleased with our investment activity in the second quarter. This activity included total lower middle market investments of $155 million, including new investments totaling $88 million, resulting in a net increase in our lower market investments of $69 million after repayments and other investment activity. Our private loan investment activities in the quarter included new investments of $324 million, which after repayments and other investment activity resulted in a net increase in our private loan investments of $225 million.

我們對第二季的投資活動感到非常滿意。這項活動包括中低階市場投資總額 1.55 億美元，其中新投資總額為 8,800 萬美元，導致我們的中低階市場投資在還款和其他投資活動後淨增加 6,900 萬美元。本季我們的私人貸款投資活動包括新增投資 3.24 億美元，扣除還款和其他投資活動後，我們的私人貸款投資淨增加 2.25 億美元。

Given our conservative capital structure and strong liquidity position, we remain very well-positioned to continue the growth of our investment portfolio over the next few quarters. We've also continued to produce positive results in our asset management business. The funds we advised through our external investment manager continued to experience favorable performance in the second quarter, resulting in significant incentive fee income for our asset management business for the seven consecutive quarter and together with our recurring base management fees, a significant contribution to our net investment income.

鑑於我們保守的資本結構和強勁的流動性狀況，我們仍然處於有利位置，可以在未來幾季繼續投資組合的成長。我們的資產管理業務也持續取得正面成果。我們透過外部投資經理提供諮詢服務的基金在第二季度繼續表現良好，為我們的資產管理業務連續七個季度帶來了可觀的激勵費收入，加上我們的經常性基本管理費，對我們的淨收入做出了重大貢獻投資收益。

We remain excited about our plans for the external funds that we manage as we execute our investment strategies and other strategic initiatives. And we are optimistic about the future performance of the funds and the attractive returns we are providing to the investors of each fund. We remain optimistic about our strategy for growing our asset management business within our internally managed structure and are actively working to increase the contributions from this unique benefit to our Main Street stakeholders.

我們對在執行投資策略和其他策略性舉措時管理的外部資金的計劃仍然感到興奮。我們對基金的未來表現以及我們為每個基金的投資者提供的有吸引力的回報感到樂觀。我們對在內部管理結構內發展資產管理業務的策略保持樂觀，並積極努力增加此獨特利益對我們主要利害關係人的貢獻。

As a result of these continued efforts, a few weeks ago, MSC Income Fund, a non-listed BDC that is advised by our external investment manager filed a preliminary proxy statement that contains certain proposals intended to position the fund to listed shares on a National Securities Exchange.

由於這些持續努力，幾週前，MSC Income Fund（由我們的外部投資經理建議的非上市BDC）提交了一份初步委託書，其中包含旨在將該基金定位於全國股票交易所上市股票的某些建議。

The preliminary proxy statement also details additional activities and changes at MSC Income Fund, including a transition of the fund's investment strategy to be solely focused on this private loan investment strategy and a potential amendment to the investment advisory agreement between the extra investment advisor and the fund, both of which will become effective upon a listing of the fund shares.

初步委託書還詳細介紹了 MSC Income Fund 的其他活動和變化，包括將基金的投資策略轉變為僅專注於私人貸款投資策略，以及對額外投資顧問與基金之間的投資諮詢協議的潛在修訂，均於基金份額上市時生效。

We are very excited about these potential changes in MSC Income Fund, which we believe represents significant catalyst to the future growth of the fund and the opportunity for significant future benefits to both the MSC Income Fund shareholders and our asset management business. Based upon our results for the second quarter, combined with our favorable outlook in each of our primary investment strategies and for our asset management business.

我們對 MSC 收入基金的這些潛在變化感到非常興奮，我們相信這代表著該基金未來成長的重要催化劑，以及為 MSC 收入基金股東和我們的資產管理業務帶來重大未來利益的機會。基於我們第二季的業績，結合我們對每個主要投資策略和資產管理業務的樂觀前景。

Earlier this week, our Board declared a supplemental dividend of $0.3 per share payable in September, representing our 12th consecutive quarterly supplemental dividend to go with the [eight] increases to our regular monthly dividends since the fourth quarter of 2021. Our Board also declared regular monthly dividends for the fourth quarter of 2024 of $0.245 per share payable in each of October, November and December, representing a 4% increase from the regular monthly dividends paid in the fourth quarter of 2023.

本週早些時候，我們的董事會宣布9 月份支付每股0.3 美元的補充股息，這是我們連續第12 個季度補充股息，同時自2021 年第四季度以來我們的定期月度股息增加了[8]次。我們的董事會也宣布，2024 年第四季的定期月度股息為每股 0.245 美元，分別於 10 月、11 月和 12 月支付，比 2023 年第四季支付的定期月度股息增加 4%。

The supplemental dividend for September is a result of our strong performance in the second quarter and will result in total supplemental dividends paid during the trailing 12 month period of $1.175 per share, representing an additional 41% paid to our shareholders in excess of our regular monthly dividends and total dividends for the trailing 12 month period of over $4 per share and at current total yield we're providing to our shareholders of over 8%.

9 月的補充股息是我們第二季強勁業績的結果，將導致過去 12 個月期間支付的補充股息總額為每股 1.175 美元，相當於向股東支付的額外股息超出我們每月定期支付的金額過去12 個月期間的股息和總股息超過每股4 美元，以目前的總收益率計算，我們向股東提供的股息超過8%。

We currently expect to recommend that our Board continue to declare future supplemental dividends to the extent DNII significantly exceeds our regular monthly dividends paid in future quarters, and we maintain a stable to positive NAV. Based upon our expectations for the continued favorable performance in the third quarter, we currently anticipate proposing an additional supplemental dividend payable in December 2024.

目前，我們預計建議董事會繼續宣布未來的補充股息，前提是 DNII 顯著超過我們未來季度支付的每月定期股息，並且我們保持穩定至正的資產淨值。基於我們對第三季持續良好業績的預期，我們目前預計建議在 2024 年 12 月支付額外補充股利。

Now turning to our current investment pipeline. As of today, I would characterize our lower middle market investment pipeline as well above average. We believe that the unique and flexible financing solutions that we can provide to lower middle market companies and their owners and management teams and our differentiated long-term to permanent holding periods represent an attractive solution to the needs of many lower middle-market companies and we are confident in our expectations for strong, new lower middle market investment investment activity over the next few months.

現在轉向我們目前的投資管道。截至今天，我認為我們的中低階市場投資管道遠高於平均水準。我們相信，我們可以為中低端市場公司及其所有者和管理團隊提供獨特而靈活的融資解決方案，以及我們差異化的長期至永久持有期，這對許多中低端市場公司的需求來說是一種有吸引力的解決方案，我們對未來幾個月強勁的新中低端市場投資活動的預期充滿信心。

We also continue to be very pleased with the performance of our private credit team and the significant growth that they have provided for our private loan portfolio and our asset management business.

我們也對私人信貸團隊的表現以及他們為我們的私人貸款組合和資產管理業務帶來的顯著增長感到非常滿意。

And as of today, I'd characterize our private loan investment pipeline as average. My last update relates to our activities to expand and improve our finance, accounting and treasury functions to match the growth and best-in-class performance of our investment teams, investment portfolio and asset management business.

截至今天，我將我們的私人貸款投資管道描述為平均水平。我的最新更新涉及我們擴大和改進財務、會計和財務職能的活動，以適應我們投資團隊、投資組合和資產管理業務的成長和一流業績。

As part of these activities, yesterday, we announced several promotions and changes in these areas, including a change in Main Street CFO position. We are excited about these changes and what they mean for our company and for these specific individuals in the future.

作為這些活動的一部分，昨天，我們宣布了這些領域的多項晉升和變動，包括主街財務長職位的變動。我們對這些變化以及它們對我們公司和這些特定個人未來的意義感到興奮。

In conjunction with these changes, personally and on behalf of our executive management team and our Board of Directors, I want to thank Jesse for his significant contributions over the last few years as our CFO, who will also serving as our Chief Operating Officer and managing a lower middle market investment portfolio.

結合這些變化，我個人並代表我們的執行管理團隊和董事會，感謝傑西在過去幾年作為我們的財務長所做的重大貢獻，他也將擔任我們的營運長和管理中低端市場投資組合。

We are very excited to have us focus back solely on our investment and operations activities where we know that he will continue to add significant value to our firm. And we appreciate his significant contributions over the last few years as our CFO.

我們很高興讓我們專注於我們的投資和營運活動，我們知道他將繼續為我們公司增加重大價值。我們感謝他在過去幾年擔任我們的財務長期間所做的重大貢獻。

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. As Dwayne highlighted in his remarks, we believe our strong second quarter financial results continue to demonstrate the strength of Main Street platform, our differentiated investment approach and our unique operating model. We are pleased to report that the overall operating performance for most of our portfolio companies continued to be positive, which contributed to our attractive second quarter financial results.

謝謝德韋恩，大家早安。正如 Dwayne 在演講中所強調的那樣，我們相信我們強勁的第二季財務業績繼續證明了 Main Street 平台的實力、我們差異化的投資方法和獨特的營運模式。我們很高興地報告，我們大多數投資組合公司的整體營運表現持續保持樂觀，這為我們第二季的財務表現帶來了吸引力。

However, we did experience some continued softness in certain portfolio companies with consumer discretionary focused products or services, which we have been monitoring for several quarters, and we are actively working to maximize our recoveries on those specific investments.

然而，我們確實經歷了某些以非必需消費品為重點的產品或服務的投資組合公司持續疲軟的情況，我們已經連續幾個季度對其進行了監控，並且我們正在積極努力以最大限度地提高這些特定投資的回收率。

As we have discussed in the past, the largest portion of our investment portfolio and the primary driver of our long-term success has been and continues to be our focus on the underserved, lower middle market and specifically our strategy in investing in both the debt and equity in lower middle market companies.

正如我們過去所討論的，我們投資組合的最大部分和我們長期成功的主要驅動力一直是並將繼續是我們對服務不足的中低端市場的關注，特別是我們對債務投資的戰略以及中低端市場公司的股權。

Our view on the relative attractiveness of investing in the lower middle market remains unchanged, and we expect that this will continue to be our primary area of focus in the future. And as Dwayne noted, we are excited about our current lower middle market investment pipeline. Each quarter, we tried to highlight key aspects of our investment strategy and differentiated approach.

我們對投資中低端市場相對吸引力的看法保持不變，我們預計這將繼續是我們未來的主要關注領域。正如 Dwayne 所指出的，我們對目前中低端市場的投資管道感到興奮。每個季度，我們都試圖強調我們投資策略和差異化方法的關鍵面向。

For today's call, I'm going to spend some time discussing our private loan investment strategy, which is the second largest part of our investment portfolio and is the primary driver of our asset management business.

在今天的電話會議中，我將花一些時間討論我們的私人貸款投資策略，這是我們投資組合的第二大部分，也是我們資產管理業務的主要驅動力。

We have grown our private loan strategy significantly over the last several years, both on Main Street's balance sheet and for the third party client funds that we managed through the external investment manager. As a reminder, our private loan strategy principally represents investment in the senior secured debt of private equity sponsor businesses.

過去幾年，我們在大街資產負債表和透過外部投資經理管理的第三方客戶資金方面顯著發展了我們的私人貸款策略。提醒一下，我們的私人貸款策略主要代表對私募股權發起人企業的優先擔保債務的投資。

These investments are primarily originated by our internal investment professionals through strategic relationships they cultivate and maintain with the select group of private equity firms and their capital market intermediaries.

這些投資主要由我們的內部投資專業人士透過他們與精選的私募股權公司及其資本市場中介機構建立和維持的策略關係發起。

Our private loan investments are typically first-lien debt investments with attractive yield profiles and favorable terms. As of quarter end, 99% of our private loan secured debt investments were first lien loans and 97% had floating rate interest rates, which had an attractive weighted average yield of 12.8%. Over seven years ago, we announced our strategic decision to dedicate significant resources towards growing our private loan strategy while deemphasizing our middle market strategy. Our desire to make this significant shift was driven by our intention to focus on investing in companies that were smaller than those typically accessing the traditional syndicated loan market.

我們的私人貸款投資通常是第一留置權債務投資，具有有吸引力的收益率和優惠的條款。截至季末，我們的私人貸款擔保債權投資中，99%為第一留置權貸款，97%為浮動利率，加權平均收益率為12.8%，極具吸引力。七年前，我們宣布了戰略決定，即投入大量資源來發展我們的私人貸款策略，同時淡化我們的中間市場策略。我們之所以做出這一重大轉變，是因為我們打算專注於投資那些規模小於通常進入傳統銀團貸款市場的公司。

We believe that the opportunity existed to lead or co-lead the vast majority of our private loan investments, whereby we are able to directly manage the due diligence, the loan documentation and the post investment process. We believe this approach allows us to maximize our net returns on capital invested in private loans for Main Street and the investment portfolios we manage in our asset management business.

我們相信，我們有機會領導或共同領導我們絕大多數的私人貸款投資，以便我們能夠直接管理盡職調查、貸款文件和投資後流程。我們相信，這種方法使我們能夠最大限度地提高投資於大街私人貸款的資本淨回報以及我們在資產管理業務中管理的投資組合。

While the overall market competition for private credit products has increased over the last few years, we believe our niche focus on the smaller end of the market is less competitive and allows us to earn more attractive risk-adjusted returns for Main Street investors and the investors in the funds we manage. During the time of our intentional and purposeful repositioning in the market from 2016 year end through the second quarter of this year, we increased the total fair value of our private loan portfolio at Main Street from 17% of our total portfolio at fair value to 37%.

儘管過去幾年私人信貸產品的整體市場競爭有所加劇，但我們相信，我們對較小端市場的利基關注競爭力較弱，這使我們能夠為大街投資者和投資者賺取更具吸引力的風險調整報酬在我們管理的基金。從 2016 年底到今年第二季度，我們在市場上進行有目的的重新定位期間，我們將 Main Street 私人貸款投資組合的總公允價值從佔總投資組合公允價值的 17% 增加到 37% %。

Based on the capabilities relationships of our private credit team, the overall growth of our private loan platform and the strength of our investment pipeline, Mainstreet has also benefited from our ability to utilize our private loan investment strategy to grow our asset management business.

基於我們私人信貸團隊的能力關係、私人貸款平台的整體成長以及投資管道的實力，Mainstreet 也受益於我們利用私人貸款投資策略來發展資產管理業務的能力。

Through our external investment manager, our private loan strategy effectively allows Mainstreet to leverage our investment professionals time and our platform to benefit from the attractive fee-based income we receive from third-party clients while at the same time providing highly attractive investment opportunities and returns for those clients. We look forward to the continued future benefits to our overall platform as we pursue additional ways to grow our private loan platform and third party asset management business in the future.

透過我們的外部投資經理，我們的私人貸款策略有效地使Mainstreet 能夠利用我們的投資專業人士的時間和我們的平台，從我們從第三方客戶那裡獲得的有吸引力的收費收入中受益，同時提供極具吸引力的投資機會和回報對於那些客戶。隨著我們未來尋求更多方式來發展我們的私人貸款平台和第三方資產管理業務，我們期待我們的整體平台在未來繼續受益。

Now turning to the overall composition and operating results from our investment portfolio as of June 30th we continued to maintain a highly diversified portfolio with investments in 194 companies spanning across numerous industries and end markets. Our largest portfolio company, excluding our external investment manager, represented only 3.7% of our total investment income for the trailing 12 month period and 3.3% of our total investment portfolio fair value at quarter end.

現在讓我們來看看截至 6 月 30 日的投資組合的整體組成和經營業績，我們繼續保持高度多元化的投資組合，投資於跨越眾多行業和終端市場的 194 家公司。我們最大的投資組合公司（不包括我們的外部投資經理）僅占我們過去 12 個月期間總投資收入的 3.7%，佔季末總投資組合公允價值的 3.3%。

Majority of our portfolio investments represented less than 1% of our income and our assets. Our investment activity in the second quarter included total investments in our lower middle market portfolio of $155 million, which after aggregate repayments on debt investments, return of invested equity capital and realized losses resulted in a net increase in our lower middle market portfolio of $69 million. We completed $324 million in price in total private loan investments, which after aggregate repayments of debt investments resulted in a net increase in our private loan portfolio of $225 million.

我們的大部分投資組合僅占我們收入和資產的不到 1%。我們第二季的投資活動包括中低端市場投資組合的總投資為 1.55 億美元，在債務投資總償還額、投資股本資本返還和已實現損失之後，中低端市場投資組合淨增加 6,900 萬美元。我們完成了 3.24 億美元的私人貸款投資總額，在償還債務投資總額後，我們的私人貸款投資組合淨增加了 2.25 億美元。

Finally, during the quarter, we had a net decrease in our middle market portfolio of $66 million as we continued to deemphasize this strategy, resulting in our remaining middle market investment portfolio of less than 4% of the total fair value of our investment portfolio. At the end of the first quarter, our lower middle market portfolio included investments in 83 companies, representing over $2.4 billion of fair value, which is over 27% above our cost basis.

最後，在本季度，由於我們繼續淡化這項策略，我們的中間市場投資組合淨減少了 6,600 萬美元，導致我們剩餘的中間市場投資組合不到我們投資組合總公允價值的 4%。截至第一季末，我們的中低階市場投資組合包括對 83 家公司的投資，公允價值超過 24 億美元，比我們的成本基礎高出 27% 以上。

We had investments in 92 companies in our private loan portfolio, representing $1.7 billion of fair value. In our middle market portfolio, we had investments in 19 companies representing $184 million of fair value. The total investment portfolio at fair value at quarter end was 115% of the related cost basis.

我們的私人貸款組合投資了 92 家公司，公允價值達 17 億美元。在我們的中間市場投資組合中，我們對 19 家公司進行了投資，公允價值達 1.84 億美元。季末公允價值投資組合總額為相關成本基礎的115%。

In summary, Main Street's investment portfolio continues to perform at a high level and deliver on our long-term results and goals. Additional details on our investment portfolio at quarter end are included in the press release that we issued yesterday.

總而言之，Main Street 的投資組合繼續保持高水準表現，並實現了我們的長期業績和目標。有關我們季度末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'll turn the call over to Jesse to cover our financial results, capital structure and liquidity position.

接下來，我將把電話轉給傑西，介紹我們的財務表現、資本結構和流動性狀況。

Thank you, David. To echo Dwayne's and David's comments, we are pleased with our operating results for the second quarter. Our total investment income for the second quarter was $132.2 million, increasing by $4.6 million or 3.6% over the second quarter 2023 and by $0.5 million or 0.4% from the first quarter 2024.

謝謝你，大衛。為了回應 Dwayne 和 David 的評論，我們對第二季的經營業績感到滿意。我們第二季的總投資收入為 1.322 億美元，比 2023 年第二季增加 460 萬美元，增幅 3.6%，比 2024 年第一季增加 50 萬美元，增幅 0.4%。

Our results for the second quarter 2024 included strong performance across our lower middle market and private loan investment portfolios and our asset management business, resulting in strong levels of investment income, which, as Dwayne and David touched on, demonstrates the continued strength of our differentiated investment and asset management strategies.

我們2024 年第二季的業績包括中低階市場和私人貸款投資組合以及資產管理業務的強勁表現，帶來了強勁的投資收入水平，正如Dwayne 和David 所談到的，這表明我們差異化的持續實力投資和資產管理策略。

Interest income increased by $2.8 million from a year ago and was comparable to the first quarter. The increase over the prior year was driven primarily by the impact of increased investment activity over the last year and increases in benchmark index rates, partially offset by the impact of an increase in investments on nonaccrual.

利息收入較去年同期增加280萬美元，與第一季持平。與前一年相比的成長主要是由於去年投資活動增加和基準指數利率上升的影響，部分被非應計投資增加的影響所抵消。

When compared to the first quarter, the second quarter benefited from the increased investment activity during the first and second quarter, offset by an increase in investments on nonaccrual. Dividend income increased by $1.1 million or 4.3% when compared to a year ago. With this increase after the impact of a $1.6 million decrease in unusual or non-recurring dividends and increased by $3.9 million or 17.1% from the first quarter, including a comparable level of unusual and non-recurring dividends between the quarters.

與第一季相比，第二季受益於第一季和第二季投資活動的增加，但被非應計投資的增加所抵消。股息收入較去年同期增加 110 萬美元，即 4.3%。這一增長是在異常或非經常性股息減少 160 萬美元的影響後增加的，較第一季增加了 390 萬美元或 17.1%，其中包括各季度之間相當水平的異常和非經常性股息。

The continued underlying strength of the majority of our lower middle market portfolio companies together with the unique benefits of our asset management business drove the strong level of dividend income in the quarter. Fee income increased by $0.7 million from a year ago and decreased by $3.3 million from the first quarter.

我們大多數中低階市場投資組合公司的持續潛在實力以及我們資產管理業務的獨特優勢推動了本季股息收入的強勁水平。手續費收入較去年同期增加70萬美元，較一季減少330萬美元。

The first quarter of this year included elevated levels of refinancing and prepayment fees considered nonrecurring. The aggregate amount of these items for the second quarter decreased by $2.7 million from the first quarter and were comparable to the prior year. For the second quarter, the impact of certain odd income considered less consistent, non-recurring in nature including dividends from our equity investments and accelerated prepayment, repricing and other activity related to our debt investments, as I mentioned earlier, totaled $5.1 million. In the aggregate, these items were consistent with the average of the prior four quarters and $1.6 million lower than the prior year and $2.5 million lower than the first quarter.

今年第一季的再融資和非經常性預付款費用水準有所提高。第二季這些項目的總金額比第一季減少了 270 萬美元，與去年同期相當。正如我之前提到的，第二季度，某些被認為不太一致、非經常性的零散收入的影響總計為510 萬美元，包括我們的股權投資的股息以及加速預付款、重新定價和與我們的債務投資相關的其他活動。總的來說，這些項目與前四個季度的平均水平一致，比上年減少 160 萬美元，比第一季減少 250 萬美元。

Our operating expenses increased by $3 million from a year ago, largely driven by increases in interest expense, share-based compensation expense and general and administrative related expenses. The ratio of our total operating expenses excluding interest expense as a percentage of our average total assets was 1.3% for the quarter on an annualized basis and continues to be amongst the lowest in our industry. Our external investment manager contributed $9.2 million to our net investment income during the second quarter, an increase of $0.7 million from a year ago and $0.6 million from the first quarter.

我們的營運費用比一年前增加了 300 萬美元，主要是由於利息費用、股權激勵費用以及一般和行政相關費用的增加。以年化計算，本季不計利息費用的總營運費用佔平均總資產的比例為 1.3%，繼續處於行業最低水準。第二季度，我們的外部投資經理為我們的淨投資收入貢獻了 920 萬美元，比去年同期增加了 70 萬美元，比第一季增加了 60 萬美元。

The manager earned $4.1 million in incentive fees during the quarter, increasing by $0.5 million from the prior year and $0.3 million from the first quarter, primarily as a result of the positive performance of the assets under management. The manager ended the quarter with total assets under management of $1.6 billion. During the quarter, we recorded net fair value appreciation, including net realized gains and net unrealized appreciation on the investment portfolio of $26.5 million.

該管理人在本季度賺取了 410 萬美元的獎勵費，比上一年增加了 50 萬美元，比第一季增加了 30 萬美元，這主要是由於所管理資產的積極表現。截至本季末，該管理公司管理的總資產為 16 億美元。本季度，我們記錄了淨公允價值增值，包括投資組合 2,650 萬美元的已實現淨收益和未實現淨增值。

We recorded net fair value appreciation in our lower middle market portfolio, our other portfolio, our middle market portfolio and in our external investment manager, partially offset by net fair value appreciation in our private loan portfolio. The net fair value appreciation in our lower middle market portfolio was largely driven by the continued positive performance of certain of our portfolio companies.

我們在中低階市場投資組合、其他投資組合、中端市場投資組合和外部投資經理人中記錄了公允價值淨增值，但部分被私人貸款投資組合中的公允價值淨增值所抵銷。我們中低階市場投資組合的淨公允價值升值主要是由我們某些投資組合公司的持續積極績效所推動的。

The net fair value appreciation or other portfolio was driven by positive performance in certain investments. The net fair value appreciation in our middle market portfolio was driven by the exit of a portfolio company at a favorable value competitor it's fair value at the end of the first quarter.

淨公允價值升值或其他投資組合是由某些投資的正面表現所推動的。我們的中間市場投資組合的淨公允價值升值是由於投資組合公司以有利的價值競爭對手退出（第一季末的公允價值）而推動的。

The fair value appreciation of our external investment manager was a result of an increase in the fees generated by the external investment manager, driven by the continued strong performance of our Asset Management business, partially offset by a decrease in the valuation multiples of publicly traded peers, which we use as one of the benchmarks for valuation purposes.

我們的外部投資管理人的公允價值升值是由於資產管理業務持續強勁的業績推動外部投資管理人產生的費用增加，但部分被公開交易同業估值倍數的下降所抵消，我們將其用作估值目的的基準之一。

The net fair value depreciation in our private loan portfolio was driven by the net impact of specific portfolio company underperformance, partially offset by the impact of decreases in market spreads. We ended the second quarter with investments on nonaccrual, comprising approximately 1.2% of the total investment portfolio at fair value and approximately 3.6% of cost.

我們私人貸款投資組合的淨公允價值貶值是由特定投資組合公司業績不佳的淨影響推動的，但部分被市場利差下降的影響所抵消。第二季結束時，我們進行了非應計投資，以公允價值計算，約佔總投資組合的 1.2%，約佔成本的 3.6%。

As David indicated, the new investments on nonaccrual for the second quarter largely relate to underperforming companies with significant exposure to consumer end markets. Net asset value or NAV increased by $0.26 per share over the first quarter and $2.11 or 7.6% when compared to a year ago to a record NAV per share of $29.80 at the end of the second quarter.

正如大衛所指出的那樣，第二季的非應計新投資主要與在消費終端市場有大量投資的表現不佳的公司有關。第一季每股資產淨值（NAV）成長 0.26 美元，與去年同期相比成長 2.11 美元，即 7.6%，第二季末每股資產淨值達到創紀錄的 29.80 美元。

Our regulatory debt-to-equity leverage calculated as total debt, excluding our SBIC debentures divided by net asset value was [$0.74] and our regulatory asset coverage ratio was [2.33], and these ratios continue to be slightly more conservative than our long-term target ranges of 0.8 to 0.9 times and 2.1 to 2.25 times, respectively.

我們的監管債務股本槓桿率按總債務（不包括 SBIC 債券）除以資產淨值計算為 [0.74 美元]，我們的監管資產覆蓋率為 [2.33]，這些比率仍然比我們的長期比率略為保守。目標範圍分別為0.8至0.9倍和2.1至2.25倍。

We continue to be active this quarter on capital activities aided by our strong relationships. In May, we repaid the $450 million due on our May 2024 notes at maturity. In June, we issued $300 million of unsecured notes maturing in June 2027 with a coupon rate of 6.5%. We also amended our corporate credit facility in June, increasing commitments by $115 million to $1.1 billion with a diversified group of 19 lenders and extended the maturity to June 2029 for $1.035 billion of the commitments.

在我們牢固的關係的幫助下，本季度我們繼續積極開展資本活動。5 月份，我們償還了 2024 年 5 月到期票據的 4.5 億美元。6 月份，我們發行了 3 億美元的無擔保票據，將於 2027 年 6 月到期，票面利率為 6.5%。我們也在 6 月修改了我們的企業信貸安排，將與 19 家多元化貸款機構的承諾增加了 1.15 億美元，達到 11 億美元，並將其中 10.35 億美元的承諾期限延長至 2029 年 6 月。

We were also active in our at-the-market or ATM program, raising net proceeds of $42.2 million during the quarter. After giving effect to the investment and capital activities in the first and second quarter of this year, we continue to maintain strong liquidity, including cash and availability under our credit facilities and one of our SBIC funds of approximately $1 billion.

我們也積極開展市場或 ATM 計劃，本季籌集了 4,220 萬美元的淨收益。在今年第一季和第二季的投資和資本活動生效後，我們繼續保持強勁的流動性，包括我們信貸安排下的現金和可用資金以及我們約 10 億美元的 SBIC 基金。

We continue to believe that our conservative leverage, strong liquidity and continued access to capital, our significant strengths have proven to benefit us historically and have us well-positioned for the future, allowing us to continue to execute our attractive investment strategy.

我們仍然相信，我們保守的槓桿率、強勁的流動性和持續獲得資本的機會，以及我們的顯著優勢，已被證明使我們在歷史上受益，並使我們為未來做好準備，使我們能夠繼續執行我們有吸引力的投資策略。

As we discussed last quarter, with this current level of liquidity, we currently expect to fund our net new investment activity in 2024 through a greater proportion of debt financing, and as such, we would expect leverage to continue to increase during the course of the year to be more in line with our long-term stated targets.

正如我們上季度討論的那樣，在目前的流動性水平下，我們目前預計透過更大比例的債務融資為 2024 年的淨新投資活動提供資金，因此，我們預計槓桿率將在 2024 年繼續增加。今年將更加符合我們既定的長期目標。

Coming back to our operating results. As a result of our strong performance for the quarter, our return on equity for the second quarter and the first six months of the year was 16.1% and 16.6% on an annualized basis respectively. DNII per share for the quarter of $1.7 was $0.05 or 4.5% lower than the record DNII per share for the second quarter last year and was $0.04 or 3.6% lower than the DNII per share for the first quarter.

回到我們的經營績效。由於本季表現強勁，第二季和今年前六個月的年化股本回報率分別為 16.1% 和 16.6%。本季每股 DNII 為 1.7 美元，比去年第二季創紀錄的每股 DNII 低 0.05 美元，即 4.5%，比第一季每股 DNII 低 0.04 美元，即 3.6%。

The combined impact of certain investment income considered less consistent and nonrecurring nature on a per share basis was in line with the average of the last four quarters, $0.02 per share lower than the same quarter a year ago, and $0.03 per share lower than the first quarter accounting for most of the declines in DNII. Total dividends paid in the second quarter were $1.2 per share, including a supplemental dividend of $0.3 per share, an increase of 13% over our total dividends paid during the same period in the prior year.

某些投資收益被認為不太一致和非經常性的每股收益的綜合影響與過去四個季度的平均水平一致，每股比去年同期低 0.02 美元，比第一季每股低 0.03 美元該季度是DNII 下降的主要原因。第二季支付的股利總額為每股1.2美元，其中補充股利為每股0.3美元，比去年同期支付的股利總額增加了13%。

Given the strength of our operating results and the outlook for the rest of the year, our Board approved a supplemental dividend of $0.3 per share payable in September 2024. With the supplemental dividend, total declared dividends for the third quarter of 2024 were $1.035 per share, representing a 7.3% increase over the total dividends paid in the third quarter of last year.

鑑於我們強勁的經營業績和今年剩餘時間的前景，董事會批准於 2024 年 9 月支付每股 0.3 美元的補充股息。加上補充股息，2024年第三季宣派股息總額為每股1.035美元，比去年第三季支付的股息總額增加7.3%。

Our Board also approved recurring monthly dividends of $0.245 per share for a total $0.735 per share for the fourth quarter of 2024. Looking forward, given the strength of our underlying portfolio, we expect another strong top line and earnings quarter in the third quarter with expected DNII of at least $1.7 per share with the potential for upside driven by the actual level of dividend income and portfolio investment activities during the quarter.

我們的董事會也批准了每股 0.245 美元的經常性每月股息，2024 年第四季每股股息總額為 0.735 美元。展望未來，鑑於我們基礎投資組合的實力，我們預計第三季度將再次實現強勁的營收和盈利季度，預計DNII 至少為每股1.7 美元，並有可能在股息收入和投資組合投資活動的實際水平的推動下上漲本季期間。

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

現在，我將把電話轉回接線員，以便我們回答任何問題。

Thank you. We will now be conducting a question and answer session. (Operator Instruction)

謝謝。我們現在將進行問答環節。（操作員說明）

Robert Dodd, Raymond James.

羅伯特·多德，雷蒙德·詹姆斯。

Hi, guys. Congratulations on the quarter. I mean, clarifying the question about pipeline. I am trying to recall the last time you characterized lower middle market as well above average. That sounds quite positive. So can you give us any incremental color on what that is? Because that seems like the lower middle market pipeline keeps getting stronger. So is there any clean characteristics in that? Obviously, every deal is unique, but I mean anything that's really driving the incremental activity of business owners kind of coming to the table?

嗨，大家好。恭喜本季。我的意思是，澄清有關管道的問題。我試著回想起上次您對中低市場的描述以及高於平均的情況。這聽起來相當正面。那麼你能給我們任何關於它的增量顏色嗎？因為中低階市場通路似乎正在變得越來越強大。那麼這裡面有什麼乾淨的特色嗎？顯然，每筆交易都是獨一無二的，但我的意思是真正推動企業主增量活動的任何事情？

Good morning, Robert. Thanks for the question. I don't know if I have point to anything specific that's driving owners to come to the table. I think our teams here internally at Main Street are doing a better job of proposing what we think is unique to the intermediaries that we deal with and then eventually to the business owners, and I think we're having a lot of success there. We are trying to give you guidance that the lower middle market pipeline is very, very strong.

早上好，羅伯特。謝謝你的提問。我不知道我是否指出了促使業主們坐到談判桌前的具體因素。我認為我們主街內部的團隊在向我們打交道的中介機構以及最終向企業主提出我們認為獨特的建議方面做得更好，我認為我們在這方面取得了很大的成功。我們試圖向您提供指導，表明中低端市場的管道非常非常強大。

We expect to have good originations this quarter, some of it may end up moving into the fourth quarter, but we feel really good about the pipeline, which is why we gave the guidance. As you've heard us say in the past, we always have to get through due diligence and legal documentation. So things can always change.

我們預計本季度會有良好的開端，其中一些最終可能會進入第四季度，但我們對管道感覺非常好，這就是我們給出指導的原因。正如您過去聽我們說過的那樣，我們始終必須完成盡職調查和法律文件。所以事情總是會改變的。

The economy can also change. But right now, we feel really, really good about the pipeline, and we expect to have robust lower middle market originations over the next couple of months, next couple of quarters. I'll let David add any additional comments that he might have on his side?

經濟也可能發生變化。但現在，我們對產品線感覺非常非常好，我們預計在接下來的幾個月、接下來的幾季將有強勁的中低階市場。我會讓大衛添加他可能有的其他評論嗎？

I think Dwayne hit on it. We're just resonating quite well with our referral network. The only other observation I'd make is our incoming deal volume is up and it's in part as a result of interest rates having more visibility and not having a rising interest rate kind of outlook like we had a year ago quite as unclear, and that's led intermediaries to advise their clients. It's a good time to go to market, whereas we think there were some that were hitting pause a year ago and the like.

我認為德韋恩擊中了它。我們與我們的推薦網絡產生了很好的共鳴。我要做的唯一的其他觀察是，我們的傳入交易量有所增加，部分原因是利率具有更多的可見性，並且沒有像一年前那樣不清楚的利率上升的前景，這就是引導中介機構為其客戶提供建議。現在是進入市場的好時機，而我們認為有些公司在一年前就暫停了等等。

Got it. Thank you for that. On on the private loan side, I mean average is, on the funds, is it that you're seeing average number of deals, but the price ask, I mean, I've seen a lot of talk from people about spread compression, et cetera, and a number of BDCs who were just like that rejecting deals because the pricing is too tight. So is that something that's having any impact on private loan? Or is the pricing consideration that comes in later rather than in pipeline characteristics?

知道了。謝謝你。在私人貸款方面，我的意思是，在基金方面，平均數是指您看到的平均交易數量，但價格問題，我的意思是，我看到人們很多關於利差壓縮的討論，等等，還有許多BDC 也因為定價太緊而拒絕交易。那麼這對民間借貸有影響嗎？還是後來才考慮定價而不是管道特性？

Yes, Robert, I'll give a few comments, and I'll let Nick Meserve add any additional commentary he has on his side. But just to be clear, our guidance, the well above average was on the lower middle market side. The guidance for private loan was average. We did have a--

是的，羅伯特，我會發表一些評論，我會讓尼克梅瑟夫添加他支持的任何其他評論。但需要明確的是，我們的指導遠高於平均水平，是在中低端市場。民間貸款指引一般。我們確實有一個——

Sorry, that's what I meant. I mean, the fact that the private loan is only average. Is that because of pricing or inflow versus the lower middle market, which was well above average? Sorry, if I didn't characterize that.

抱歉，我就是這個意思。我的意思是，事實上私人貸款只是平均水平。這是因為定價或資金流入遠高於平均的中低端市場嗎？抱歉，如果我沒有描述這一點。

That's okay, no problem. Just want to make sure we kind of got the question right. As you'll see, as you saw in our press release, you'll see in our 10-Q that the second quarter was a very, very robust quarter for us on the private loan side. So we had a lot of success, both on the front end of the pipeline, but more importantly, on the back end, working through the process diligence, legal documentation, et cetera, and getting to a closing.

沒關係，沒問題。只是想確保我們的問題是正確的。正如您將看到的，正如您在我們的新聞稿中看到的那樣，您將在我們的10-Q 中看到，第二季度對於我們的私人貸款方面來說是一個非常非常強勁的季度。因此，我們取得了巨大的成功，無論是在管道的前端，但更重要的是在後端，透過流程盡職調查、法律文件等工作，並最終完成。

So part of the reason that we think the pipeline is average today is that the second quarter were so robust. I do think that the broader market, I don't think we see this as much on the lower middle market side, but the broader market, just from a seasonal standpoint, you typically see a slowdown in August, September. People are on vacation.

因此，我們認為今天的通路處於平均水平的部分原因是第二季度非常強勁。我確實認為，在更廣泛的市場中，我認為我們在中低端市場方面並沒有看到這種情況，但從季節性的角度來看，更廣泛的市場通常會在八月、九月看到放緩。人們正在度假。

They're doing other things other than focusing on transactions. And I think you see some of that seasonality. We continue to view our part of the market, which again, as you've heard us say in the past, just to make sure we clarified, it's a different part of the market than what you see most other BDCs participate in.

除了專注於交易之外，他們還在做其他事情。我認為你看到了一些季節性。我們繼續審視我們的市場部分，正如您過去聽到我們所說的那樣，只是為了確保我們澄清，它是與您看到的大多數其他 BDC 參與的市場不同的部分。

These are the smaller part of the private equity world or the kind of the private credit world. We continue to see what we think are very attractive opportunities, both from a underwriting risk standpoint, leverage standpoint and a pricing standpoint.

這些是私募股權世界或私人信貸世界的一小部分。無論是從承保風險的角度、槓桿的角度還是定價的角度來看，我們都繼續看到我們認為非常有吸引力的機會。

But I'll let Nick give any additional comments or color that he thinks is helpful.

但我會讓尼克給出他認為有幫助的任何其他評論或顏色。

I think that pretty much covers that. I think the big one for 2Q that was a large quarter for us, part of that was pulling through some third quarter transactions that closed right at the end of the quarter for 2Q that could have moved into 3Q. But overall, I think, the portfolio feels good. I think it's not a spread. That's really a question on whether it's average or above average, spreads have condensed a little bit, like Dwayne said, not as much on that, the smaller of the market that we play.

我認為這幾乎涵蓋了這一點。我認為第二季度的重大交易對我們來說是一個重要的季度，其中一部分是完成了一些第三季度的交易，這些交易在第二季末結束，這些交易可能會轉移到第三季。但總的來說，我認為這個投資組合感覺不錯。我認為這不是傳播。這實際上是一個關於它是否處於平均水平或高於平均水平的問題，正如德韋恩所說，利差已經縮小了一點，但在我們所從事的市場較小的情況下，利差沒有那麼大。

Got it. Thank you and one more if we can. I mean, Dwayne, you talked about obviously you've seen some headwinds on the consumer facing side for a while. I've been talking about it a while. Are there any new segments of the economy or portfolio where there any emerging signs of a credit concern that are maybe not consumer direct?

知道了。謝謝你，如果可以的話，再多說一句。我的意思是，Dwayne，您顯然談到一段時間以來您在面向消費者方面遇到了一些阻力。我已經談論它有一段時間了。經濟或投資組合中是否有任何新的信貸問題跡象，而這些跡象可能不是直接面向消費者的？

Yes, Robert, I think to your point, we've been talking about consumer risk or concerns for a while, not just a couple of quarters, but for longer than that. We've been risk-off from a new investment standpoint in that area for a very specific reason. I think we have been wrong for a while, but I think you're seeing it not just in our portfolio, but I think broader across the US economy, you're seeing that, same feedback everywhere and that those headwinds from a overall industry standpoint with the challenges that some of these companies already had internally.

是的，羅伯特，我認為就你的觀點而言，我們談論消費者風險或擔憂已經有一段時間了，不僅僅是幾個季度，而是更長的時間。出於非常具體的原因，我們從該領域的新投資角度開始規避風險。我認為我們已經錯了一段時間了，但我認為你不僅在我們的投資組合中看到了這一點，而且我認為在整個美國經濟中，你都看到了，到處都有相同的反饋，以及來自整個產業的不利因素一些公司內部已經面臨的挑戰。

You've just got to the point in this quarter where we had an increase in the non-accruals. But hopefully, for you and others, it shouldn't have been a surprise because we've been trying to communicate that for the last couple of quarters. When you look at the broader parts of the economy, we feel good about it. The rest of the portfolio by and large is doing well.

本季我們的非應計費用有所增加。但希望對於您和其他人來說，這不應該感到意外，因為我們在過去幾個季度一直在努力傳達這一點。當你觀察更廣泛的經濟領域時，我們對此感覺良好。投資組合的其餘部分總體上表現良好。

You see that in our dividend income from the lower middle market, you see that in the fair value changes. So we feel good about it. We continue to say, if a portfolio company is struggling, it's probably more of a portfolio company specific issue than it is something more broad-based from a economic or an industry standpoint outside of that consumer segment.

您可以在我們來自中低端市場的股息收入中看到，您可以在公允價值變化中看到這一點。所以我們對此感覺良好。我們繼續說，如果一家投資組合公司陷入困境，那麼它可能更多的是投資組合公司的具體問題，而不是從該消費者細分市場之外的經濟或行業角度來看更廣泛的問題。

Got it. Thank you.

知道了。謝謝。

Thank you, Robert.

謝謝你，羅伯特。

Bryce Rowe, B. Riley Securities.

布萊斯‧羅 (Bryce Rowe)，B. 萊利證券 (Riley Securities)。

I think much, maybe a couple of follow-ups to Robert's questioning there. Dwayne in terms of the lower middle market pipeline, I agree, I don't know if I've heard you guys describe it is well above average before maybe you have, but it's certainly been a long time. Can you talk about the mix within that pipeline in terms of kind of add-ons versus new, so incumbent type relationships versus new?

我想了很多，也許對羅伯特的提問有一些後續。德韋恩（Dwayne）就中低端市場管道而言，我同意，我不知道我是否聽過你們描述它遠高於平均水平，也許你們之前有過，但這肯定已經很長時間了。您能否從附加元件與新元件、現有類型關係與新元件的角度來談談該管道中的混合？

Yes, Bryce. So just to reiterate some of the second quarter, we did have two really nice add-ons from an investment standpoint into existing portfolio companies to help finance what we think are very, very attractive strategic acquisitions for two of our high performing portfolio companies.

是的，布萊斯。因此，重申第二季度的一些情況，從投資的角度來看，我們確實對現有投資組合公司進行了兩項非常好的附加投資，以幫助我們認為對兩家高性能投資組合公司非常非常有吸引力的策略收購提供資金。

As we look forward to the current pipeline, I would say it's much more weighted towards new platforms that might be one or two potential add-ons that are in the earlier stages, but we're not really counting that in the pipeline guidance today. This pipeline guidance is more new platforms.

當我們期待當前的管道時，我想說它更傾向於新平台，這些平台可能是處於早期階段的一兩個潛在的附加元件，但我們並沒有真正將其計入今天的管道指南中。該管道指南是更多新平台。

The good news from our perspective is these platforms. When you look at your type of transaction, mix of debt, equity, leverage, valuation, kind of pricing, everything else that you would take into consideration, it's all consistent with what we've done consistently on a long term basis, which is what gets us so excited about the pipeline being is favorable as it is today.

從我們的角度來看，好消息是這些平台。當你考慮你的交易類型、債務、股權、槓桿、估值、定價類型以及你要考慮的所有其他因素時，這都與我們長期一貫所做的事情是一致的，即令我們如此興奮的是管道的存在是有利的，就像今天一樣。

Okay. It's helpful. And then maybe one more on the private loan activity. Any sense for kind of where maybe leverage attachment points are within private loan? Just curious if it's consistent with what you've done in the past?

好的。這很有幫助。然後也許還有一個關於私人貸款活動的問題。對於私人貸款中可能存在槓桿附著點有什麼意義嗎？只是好奇這是否與您過去所做的事一致？

Hey Bryce, it hasn't really changed from where we've been the last few years. So we're still kind of a 3.5 to 4.5 times range, usually in that 3.5 to 4times.

嘿布萊斯，與過去幾年相比，情況並沒有真正改變。所以我們仍然在 3.5 到 4.5 倍的範圍內，通常是 3.5 到 4 倍。

Okay. Good deal. Let's say on nonaccruals, certainly not surprised to hear you guys talk about some weakness in consumer discretionary. You certainly have talked about it for quite some time. If we look at, maybe the nonaccrual bucket just in general and maybe some of the newer inflows. Are they coming from lower middle market, private loan, middle market, just what portion of the investment portfolio are creating the non-accrual inflows?

好的。好交易。就非應計項目而言，聽到你們談論非必需消費品的一些弱點，我們當然不會感到驚訝。您肯定已經談論它很長一段時間了。如果我們看一下，也許是一般的非應計收入，也許是一些新的資金流入。它們來自中低階市場、私人貸款、中間市場嗎？

These are mostly on the lower middle market side.

這些大多位於中低階市場。

Okay. In terms of the the middle market, clearly a de-emphasis again here in the second quarter. Is that more of a kind of proactive approach or reactive approach just given a lot of the refinance activity we saw in the second quarter.

好的。就中間市場而言，第二季顯然再次不再受到重視。考慮到我們在第二季度看到的大量再融資活動，這更像是一種主動方法還是被動方法。

Yes. I'd say Bryce, you heard us talk about the middle market being an area that we've been deemphasizing for a while. I think when you look at quarter-to-quarter change, we're down to less than 20 names. I forget if it's 18 or 19 individual portfolio companies. The movement of that portfolio is just going to be lumpy and it's really going to come down to either a maturity date or refinancing opportunity.

是的。我想說布萊斯，你聽到我們談論中間市場是我們一段時間以來一直不重視的領域。我認為，當你觀察季度與季度的變化時，我們的名字減少到了不到 20 個。我忘了是 18 家還是 19 家單獨的投資組合公司。該投資組合的變動將是不穩定的，並且實際上取決於到期日或再融資機會。

I think we were happy with what happened in the second quarter, but it is going to be lumpy quarter-to- quarter just based upon what's going on. I do think the current environment should be constructive or conducive to continued repayments, which will welcome those opportunities as we continue to shrink that portfolio and move those kind of assets or capital into the lower middle market and private loan strategies.

我認為我們對第二季度發生的事情感到滿意，但僅根據正在發生的情況，每個季度的情況都會不穩定。我確實認為當前的環境應該是建設性的或有利於持續還款，隨著我們繼續縮小投資組合並將此類資產或資本轉移到中低端市場和私人貸款策略，這將歡迎這些機會。

Okay. And then maybe, last one for me. Dwayne you talked about the, it's part of the (inaudible) public of the MSC Income Fund converting to a simply private loan strategy. Can you can you talk about why just go straight to private loan and kind of lose the lower middle market piece of that?

好的。然後也許是我的最後一個。Dwayne，你談到了，這是 MSC 收入基金（聽不清楚）公眾的一部分，轉換為簡單的私人貸款策略。你能談談為什麼直接進入私人貸款而失去了中低端市場的份額嗎？

Sure Bryce. As you've heard us say in the past, we've been working with the MSC Income Fund Board for a while to try and to determine what we collectively thought was the right long-term answer for the fund. So we've come up with something that we think is a really attractive opportunity, both for Main Street, but also for the shareholders of MSC Income Fund.

當然是布萊斯。正如您過去聽到的那樣，我們已經與 MSC 收入基金董事會合作了一段時間，試圖確定我們共同認為的基金的正確長期解決方案。因此，我們提出了一個我們認為非常有吸引力的機會，無論是對大眾還是對 MSC 收入基金的股東來說。

And when you look at our ability to produce what we think are really, really attractive returns in our private loan strategy, and couple that with what we think will be a best in class of, kind of fee structure, both from a base management fee and an incentive fee structure going forward for the shareholders of MSC Income Fund.

當你看到我們在私人貸款策略中產生我們認為真正非常有吸引力的回報的能力，並將其與我們認為同類最佳的費用結構相結合時，兩者都來自基本管理費以及針對MSC 收入基金股東的激勵費用結構。

That was from our perspective, the best way to deliver really good long-term outcome. When I say long term, not one or two years, but 5, 10 years plus a really good outcome for the shareholders of MSC Income Fund will, again at the same time, providing what we think is really, really attractive outcome for Main Street.

從我們的角度來看，這是實現真正良好的長期成果的最佳方式。當我說長期時，不是一兩年，而是 5 年、10 年，再加上 MSC 收入基金股東的真正良好結果，同時也會為大街提供我們認為真正非常有吸引力的結果。

So we just think it's the right answer. We think it'll be something that's going to be very different than what you see from other publicly-traded BDCs, given the areas that that Nick and Sammy and our private credit team focus on to be able to deliver that different asset class with best-in-class fee structure. We think that's going to be a positive outcome.

所以我們只是認為這是正確的答案。考慮到 Nick 和 Sammy 以及我們的私人信貸團隊專注於能夠以最佳方式提供不同資產類別的領域，我們認為這將與您從其他公開交易的 BDC 中看到的情況有很大不同。 。我們認為這將是一個積極的結果。

Got it. Okay. That's for me. Appreciate the time.

知道了。好的。那是給我的。珍惜時間。

Thanks, Bryce.

謝謝，布萊斯。

(Operator Instruction)

（操作員說明）

Mark Hughes, Truist Securities.

馬克休斯，Truist 證券公司。

Thank you and good morning.

謝謝你，早安。

Good Morning Mark.

早上好，馬克。

What will be the impact of the lifting of the external adviser on the fee income? Is there going to be any kind of a near term volatility and maybe some increased expenses are reduced fees that may have some flow-through impact presumably in the short term. I hear what you're saying that it will be a very profitable in the long term.

取消外部顧問對費用收入有何影響？短期內是否會出現任何形式的波動，也許一些增加的費用是減少的費用，可能會在短期內產生一些流動影響。我聽你說，從長遠來看，這將是非常有利可圖的。

Sure, Mark. So just try to give some color to the fees. We are proposing a decrease in the base management fee from 1.75% to 1.5%. So there will be a little bit of an impact there. Obviously, long term, if we're in position between what we're doing here at Main Street and what we do at MSC Income Fund, we're in position to grow the assets. You should have a catalyst that goes the other direction.

當然，馬克。因此，請嘗試為費用添加一些色彩。我們建議將基本管理費從 1.75% 降至 1.5%。所以那裡會有一點影響。顯然，從長遠來看，如果我們在 Main Street 所做的事情和在 MSC Income Fund 所做的事情之間處於適當的位置，我們就有能力增加資產。你應該有一個相反方向的催化劑。

If we continue to have really good performance, you also get the benefit of the incentive fee. So we think there's potentially a little bit of a drag your day one just with the fee going from 1.75% to 1.5%. But we think it's a minimal change, and we think it's the right answer for the long term when you look at what we think the outcome can be several years down the road with the growth of assets and grow the capital, access the debt capital markets, et cetera, the positives that should come out of the listing of the fund and the subsequent growth.

如果我們繼續保持良好的業績，您還可以獲得獎勵費。因此，我們認為，第一天的費用從 1.75% 升至 1.5% 可能會有點拖累。但我們認為這是一個最小的變化，當你看到我們認為幾年後隨著資產的增長和資本的增長、進入債務資本市場可能產生的結果時，我們認為這是長期的正確答案等等，基金上市以及隨後的成長應該會帶來的正面影響。

Yes, thank you. And then the markdowns related to the exposure to consumer and you might have just addressed a couple of minutes ago, but if there's a broader rebound of the economy gets on a better footing, would you see the investment marks a rebound there? Or is that a company-specific? I'm sorry, if you'd addressed this.

是的，謝謝。然後，與消費者相關的降價，您可能在幾分鐘前剛剛談到，但如果經濟出現更廣泛的反彈，基礎更好，您會看到投資標誌著那裡的反彈嗎？還是說這是公司特有的？如果你能解決這個問題，我很抱歉。

Yes. No, Mark, it's a good question. I think it's both. I mean, these companies have faced some headwinds from an industry standpoint. Clearly, that's what we've been communicating for the last couple of quarters. So that has not been a positive, but these companies also have company-specific issues or challenges as they've been working through at least several of them do.

是的。不，馬克，這是個好問題。我認為兩者都是。我的意思是，從產業的角度來看，這些公司面臨一些阻力。顯然，這就是我們過去幾季一直在溝通的內容。因此，這並不是一個積極的結果，但這些公司也面臨著公司特有的問題或挑戰，因為他們至少已經解決了其中一些問題或挑戰。

So I think it's a combination of the two. When we look at the fair value marks going forward, we should not expect those fair value marks to rebound significantly next quarter. This will be a long-term path of us working with the portfolio companies and their management teams to figure out what the right long-term path is. And that's just going to take a while for that to play out. And it will take a while before you see a significant improvement or recovery of a fair value on those specific names.

所以我認為這是兩者的結合。當我們審視未來的公允價值標記時，我們不應期望這些公允價值標記在下個季度會大幅反彈。這將是我們與投資組合公司及其管理團隊合作的長期路徑，以找出正確的長期路徑。這需要一段時間才能發揮作用。您需要一段時間才能看到這些特定名稱的公允價值顯著改善或恢復。

Thank you very much.

非常感謝。

Thank you, Mark.

謝謝你，馬克。

Thank you. And this now concludes our question and answer session. I would like to turn the floor back over to management for closing comments.

謝謝。我們的問答環節到此結束。我想將發言權交還給管理層以徵求結束意見。

I just want to say thank you again, everyone, for joining us this morning, and we'll look forward to talking to you again after our third quarter earnings release in early November. Thank you.

我只想再次感謝大家今天早上加入我們，我們期待在 11 月初發布第三季財報後再次與大家交談。謝謝。

Ladies and gentlemen, thank you for your participation. This does concludes today's teleconference. You may 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。您可以斷開線路並度過美好的一天。