MidCap Financial Investment Corp (MFIC) 2015 Q3 法說會逐字稿

Good morning and welcome to Apollo Investment Corporation's earnings conference call for the period ending December 31, 2014. At this time, all participants have been placed in a listen-only mode. The call will be open for your questions following the speakers' prepared marks. (OPERATOR INSTRUCTIONS)

I will now turn the call over to Elizabeth Besen, Investor Relations Manager for Apollo Investment Corporation.

Thank you, operator, and thank you, everyone, for joining us today. With me today are Jim Zelter, Chief Executive Officer; Ted Goldthorpe, President and Chief Investment Officer; and Greg Hunt, Chief Financial Officer.

I'd like to advise everyone that today's call and webcast are being recorded. Please note that they are the property of Apollo Investment Corporation and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release.

I'd also like to call your attention to the customary Safe Harbor disclosure in our press release regarding forward-looking information. Today's conference call and webcast may include forward-looking statements. Forward-looking statements involve risks and uncertainties, including, but not limited to, statements as to our future results, our business prospects and the prospects of our portfolio companies.

You should refer to our registration statement and shareholder reports for risks that apply to our business and may adversely affect any forward-looking statements we make. We do not intend to update our forward-looking statements or projections unless required by law. To obtain copies of our SEC filings, please visit our website at www.apolloic.com.

I'd also like to remind everyone that we posted a supplement financial information package on our website, which contains information about the portfolio as well as the Company's financial performance.

At this time, I'd like to turn the call over to Jim Zelter.

Thank you, Elizabeth.

This morning, we released earnings for the December quarter and filed our 10-Q. I'll begin my remarks with some highlights for the period before turning over the call to Ted, who will discuss the market environment, provide a few comments about our oil and gas portfolio, and discuss our investment activity for the quarter. Greg will then discuss our financial results in greater detail. We will then open the call to a variety of questions.

For the quarter, we reported net investment income of $0.24 per share, which reflects a stable level of recurring investment income and a slightly elevated level of prepayment income, although down on a sequential basis.

At the end of December, net asset value per share was $8.43, down 3.3% from the end of September. The decline in NAV primarily reflects mark-to-market volatility in some of our oil and gas and natural resource investments, which Ted will address.

The volatility in the liquid credit markets during the quarter improved our ability to create better investment opportunities, as evidenced by the slight expansion in yield on new assets. That said, we remain selective in our approach with a focus on secured opportunities.

As we've said before, we do not currently intend to raise equity below net asset value, and we will continue to execute on our strategy of selectively deploying capital and proactively monetizing select investments to improve the existing portfolio's overall returns.

Taking all of this into account, we were able to increase the overall debt yield by approximately 10 basis points to 11.1% from 11% at the end of September.

It is during volatile periods like these when we expect to particularly benefit from the broader Apollo platform which provides us with scale, investment opportunities and market insights across a diverse set of asset classes and industries.

We remain relatively confident in our ability to continue to generate sufficient income to cover the dividends and maintain stable net asset value over a long-term cycle. We are cautiously optimistic that recent spread widening, the growing impact of regulations on lending environments and the potential for a rise in interest rates will create favorable market conditions for us to deploy capital in the coming year. We will remain selective investors, generally focused on complexity and illiquidity, and remain optimistic about the opportunities for providers of capital solutions.

Finally, turning our discussion to our dividend, the Board approved a $0.20 dividend for shareholders of record as of March 20, 2015.

With that, I will turn the call over to my partner, Ted Goldthorpe.

Thank you, Jim. I'll begin my comments with current market conditions, followed by some comments about our oil and gas portfolio, and then a discussion about our investment activity for the quarter.

Amid challenging market conditions -- including concerns about global growth, a sell-off in the liquid leverage credit markets, falling oil prices and persistent retail outflows -- new issue leverage loan volume for the quarter declined to a 3-year low. The lack of dealer inventories in fixed-income products contributed to volatility during the period.

Investors continue to exit loan funds, and there have been 40 weeks of outflows over the past 42 weeks. The continued strength of new issue (inaudible) markets only partially filled the void. As a result of the demand deficit, clearing yields rose to a 2-year high and spreads widened.

During periods of volatility in the liquid credit markets, borrowers focus on certainty of execution and rely less on the public markets to create a more favorable climate for asset deployment for investors like us.

With that said, the middle-market lending environment remained generally insulated from the trends in the broadly-syndicated lending market, as activity remained generally healthy, although spreads widened during the quarter.

With this backdrop, we had a busy origination quarter -- we had a busy quarter for originations. During the period, we invested $609 million in 13 new portfolio companies and 13 existing companies. We continue to focus on secured-debt opportunities, which accounted for 65% of the investments made during the period.

During the quarter, we exited $699 million of investments, and approximately 75% of exits were proactive sales, as we continued to rotate out of certain lower-yielding assets.

We continue to increase our exposure to floating rate assets, which represented 52% of the debt portfolio at the end of the quarter, up from 48% last quarter. This shift towards floating rate assets should be beneficial when interest rates ultimately rise.

Moving on to investment activity, during the quarter we invested $144 million into the secured debt and $5 to the equity of Dodge Data & Analytics, the market-leading provider of public and private non-residential construction project data and publications.

We syndicated down a portion of our debt investment to a hold level of $59 million at the end of December. Syndication capabilities have significant value because they can provide improved economics, including incremental fee income, enhanced yields, as well as reciprocal deal flow from lenders to whom we show deals. We realize all of these benefits with our syndication of Dodge Data.

We invested $37.8 million in AMP Solar, a new joint venture created by three established solar companies to acquire, build and manage a diverse portfolio of ground and building-mounted commercial and residential solar assets, with a special focus on social housing rooftop developments. The proceeds are being used to fund the construction and ownership of residential and ground-mount solar projects in the UK.

We also invested $25 million in secured debt of Appriss Holdings to support its acquisition by a sponsor. Appriss provides proprietary SAS-based data analytics solutions to government and commercial customers to satisfy safety, regulatory and compliance needs.

Exits -- which include sales, repayments and revolver pay-downs -- totaled $699 million for the quarter. We continue to sell lower-yielding assets, and the weighted average yield per investment sold was 9.9%. Sales totaled $444 million for the quarter, including the full exit of our positions in Panda Sherman, NVA Holdings and First Data, amongst others.

We also reduced our exposure to other investments, including the partial sale of investments in Walter Energy and Kronos Corporation.

We continue to see some of our investments get refinanced with new deals. Repayments for the quarter totaled $240 million, including our investments in BancTech, Evergreen Tank Solutions, VWR, Ranpak and Reichhold, amongst others. Revolver pay-downs totaled $14.6 million.

Overall, we believe our portfolio credit quality remains strong. The portfolio's weighted average risk rating increased to 2.2 from 2.1 on a cost basis and remained at 2.1 on a fair value basis. The increase on a cost basis is primarily attributable to oil and gas and mining investments. No investments were placed on non-accrual status during the quarter. In addition, the weighted average net leverage of our investments remained at 5.4 times, and the weighted average interest coverage remained at 2.5 times.

Given this decline in the price of oil, we wanted to make a few comments about our oil and gas portfolio. Our portfolio primarily consists of directly-originated senior secured investments that are generally higher in the capital structure, secured by the assets of the borrower, structured with strong covenants and include hedging requirements. We remain in constant with our borrowers. These companies are diversified geographically and are generally located in basins offered at the lower end of the cost curve. At the end of the quarter, oil and gas represented 13.6% of the portfolio on a fair value basis, compared to 13.2% at the end of September. And we do not have any exposure to oil services companies.

With that, I will now turn the call over to Greg, who will discuss financial performance for the quarter.

Thanks, Ted.

Total investment income for the quarter was $110 million, down 7% from last quarter and up 15% year over year. The decrease quarter over quarter was mainly due to lower prepayment income.

Interest income for the December quarter totaled $9.3 million of prepayment income, compared to $21.9 million in the September quarter and $2.5 million in the year-ago quarter. Fee income declined slightly but remained above average.

Expenses for the December quarter totaled $53.4 million, compared to $53.2 million last quarter and $44.9 million for the year-ago quarter. The sequential decrease in incentive fees associated with a decreased level of investment income generated during the period, as well as lower management fees associated with a decrease in the average portfolio, were offset by an increase in interest expense associated with $150 million of debt issued in October.

Net investment income was $56.7 million, or $0.24 per share, for the quarter. This compares to $65.7 million, or $0.28 per share, for the September quarter, and $49.7 million, or $0.22 per share, for the year-ago quarter.

For the quarter, the net loss on the portfolio totaled $76.1 million, or $0.33 per share, compared to a net loss of $23.7 [million], or $0.10 per share, for the September quarter and a net gain of $56.1 million, or $0.25 per share, for the year-ago quarter. The net loss for the quarter is primarily attributed to (inaudible) investments, partially offset by gains in other investments.

In total, our quarterly operating results decreased net assets by $19.5 million, or $0.09 per share, compared to an increase of $42 million, or $0.18 per share, for the September quarter and an increase of $105.7 million, or $0.47 per share, for the year-ago quarter.

On the liability side of the balance sheet, we had $1.6 billion of total debt outstanding at the end of the quarter, up from $1.58 billion at the end of September. The Company's net leverage ratio, which includes the impact of cash and unsettled transactions, stood at 0.74 times at the end of December, compared to 0.76 at the end of September.

Heading into quarter-end, we knew certain investments would be repaid in the March quarter and planned appropriately.

With that, operator, please open the call to questions.

(OPERATOR INSTRUCTIONS) Your first question comes from the line of Matthew Howlett of UBS.

Hi. Good morning, everybody. It's Ben on for Matt. Thanks for taking my question. With kind of equity -- your equity allocation increasing a little bit in the quarter and leverage mass, could you just talk about kind of how you're thinking about those investments and a potential to maybe harvest some of those and redeploy into income-producing assets? Thanks.

It's a great question. So I'd say a big focus for us over the next 6 to 12 months is to harvest some of our older private equity investments. There's no assurance that that'll happen, obviously, but to the extent we're able to monetize and at good levels and redeploy them into income-producing assets, that's obviously a big focus for us over the next 6 to 12 months.

Great. Thanks a lot.

Your next question comes from the line of Rick Shane of JP Morgan.

Actually, guys, that was my question. I was just sort of curious, given where you are in the leverage -- within your leverage regime and sort of where you [can] in terms of being able to monetize existing investments and take advantage of the market opportunities right now. So you guys answered it. Thank you.

Yes. But I would add one thing, Rick, just to build on your question. A third of our book still yields less than 10%, and unlike most BDCs, we still have a healthy amount of liquidity in our portfolio. And so if you look at where we sold assets last quarter, it was sub-10% yields on average, and our originations were obviously above 10% yield. So despite where our leverage is, which is obviously at the high end of the range, we think we continue to have organic opportunities to originate wider-spread assets and monetize lower-yielding assets. So obviously that includes our liquid portfolio and also, (inaudible) the previous question, obviously some of our private equity investments.

Ted -- and this is going to seem odd to ask a follow-up question, having not really asked a question on the first part, but you are -- your balance sheet is a little bit less asset-sensitive than your peer group. You're 50% floating rate. Do you see an opportunity, or does it make sense strategically at this point as you're moving through 2015, to pursue becoming more asset-sensitive?

Well, I think that certainly the low rate environment has persisted a bit longer than many would have thought. The question we got over the last couple years is how is the portfolio going to perform in a higher-rate environment, and the reality has been a lower-rate environment. I sort of -- I answer it a couple ways. One is Greg sort of suggested that we came into the quarter realizing that a variety of prepayments would occur naturally in the first quarter. Those have occurred thus far. So we're operating within a comfortable zone in terms of fixed -- in terms of leverage. And in the quarter, we did issue some debt and we would certainly expect to do so if we can do so [at] what we think are attractive rates. But having a strong view, we feel we have enough floating rate exposure and floating rate liabilities, and having a natural allocation to both fixed and floating is, I think, how we want to operate the business.

Got it. Okay. Thanks, Jim.

Your next question comes from the line of Troy Ward of KBW.

Great. Thank you and good morning. Hey, guys, can you just speak a little bit on the energy portfolio -- whether you've seen any significant changes in fair value since 12/31, especially on the liquid side, obviously, where you have good information? But then secondarily, on names where you're getting opportunities to speak with energy management teams as they prepare for 2015 and beyond -- can you talk about whether or not there's a big change in their capital plans, whether they've already or plan to do cost cutting -- things like that -- to help protect your asset quality?

Yes. So to answer the first question, we really haven't seen material moves in our liquid book since quarter-end, nor in our illiquid book. And I'd say a couple things. I think the market is very focused on these companies raising a bunch of secured debt. And having met many, many management teams as a firm -- our firm's met many, many management teams -- I think the -- so far, we have not seen that happen. Management teams are cutting CapEx. We've been very surprised this week -- somebody accessed the high-yield market regular way. A lot of people have done stock deals over the last 6 weeks, including some of our portfolio companies, which is clearly very credit-positive. And so management teams seem much more realistic about things than they have in previous downturns. I think people are preparing for lower for longer in the -- to the extent it happens -- and people are getting much closer to home in terms of capital spending, as opposed to raising new capital. So we think our business is very well-positioned to provide first-lien senior secured debt, and we think it's going to be a big opportunity for us. It really hasn't manifested itself yet. And when you look at our pipeline, our pipeline for new originated senior secured assets, in oil and gas specifically, is actually pretty anemic. So we're hoping this becomes a big opportunity for us the second half of this year, but really what we've done is seen management teams do a lot of credit-friendly things -- cutting CapEx, doing farm-ins, raising equity -- and that's kind of what we've seen for the first -- for the last 3 months.

Great. Thanks.

Your next question comes from the line of Doug Mewhirter of SunTrust.

Hi. Good morning. Two question. I guess first, just to follow up on the energy question, it's obvious that you have a very well-structured energy portfolio -- a lot of security there, a lot of, I guess, fallbacks and hedges. I guess the -- if oil stays between a $40 and $50 range for, say, 2 to 3 years, is that -- does that start pushing up against your comfort level? I realize everything's very well-hedged, but hedges do have to get rolled over and I'm just kind of wondering how your companies are set up for having to hold their breath for a longer period of time.

Yes. It's a great question. The answer is if oil stays at these levels for a sustained period of time, there's a lot of companies generically whose model does not work. And so we feel like we're pretty well-covered for the next couple years, and we're working very closely with each of our borrowers. Again, most of our borrowers are in lower-cost basins, but clearly, if you're in a $40 or $50 oil environment for 3, 4 years, it's going to put stress on a lot of these companies. And so, again, we feel very well-positioned and we feel very well-structured on our books, and a number of our portfolio companies have raised equity already. But clearly, we're in constant dialogue with each of these companies.

Okay. That's fair enough. It's hard to -- definitely hard to tell the future. The second question -- maybe a little more specific. It looks like you took the opportunity to invest in some structured products this quarter. I know you've always been an active member of that market. Is that just you were taking advantage of dislocations or some mispriced CLO equity traunches out there in the market that you picked up, or is it part of something broader that you were looking at -- some broader trend?

Yes. So we're -- when we define -- structured products is obviously a broad definition, covers lots of different things. We do not use this vehicle to buy generic CLO equity in general. We do it more strategic transactions. So, for example, we talk a lot about our Kirkwood Funds and our Madison transactions, which we think are very strategic. We have a transaction called Golden Hill which, again, is a very strategic transaction. It's not a generic buy-and-sell equity. It's a joint venture with a very, very large counterparty. So when you guy through our structured products business, we really don't have material exposure to what I'd call generic CLO equity or secondary liquid markets. It's really proprietary-originated things that come out of the Apollo platform -- (inaudible) trades, strategic partnerships with large counterparties who match up with us very well. And so we want to be very, very strategic with how we use that basket.

Okay. Thanks. That's all my questions.

Your next question comes from the line of Chris York of JMP Securities.

Good morning, guys. Thanks for taking my questions. Just one this morning. I would suspect that oil and gas E&P companies may be pursuing second-lien loans as borrowing bases have declined. What is your current appetite for new energy credits, given an already sizeable portfolio?

Listen. I think, as I said before -- well, listen. This is what I'd say. I'd say if the risk/reward is very favorable for us and we can pursue our existing strategy -- which, again, is top of the capital structure, full covenants, company's hedge -- that's something -- that's a business that we're very much interested in. And our oil and gas portfolio yields a substantial premium to the overall portfolio. So we continue to think it provides good risk, but as (inaudible) was saying before, we're really not seeing low-hanging fruit right now, and we're preparing our business for lower and longer as well. So we're being very, very disciplined and prudent about new deployment of capital.

Got it. Thanks, Ted.

Your next question comes from the line of Arren Cyganovich of Evercore ISI.

Thanks. Just thinking about the sector in general now trading -- you're not alone trading at a pretty big discount to book value. What kind of challenges does that pose for maybe committing to new investment opportunities? I know you have a fairly liquid portfolio that can allow for rotation, but in terms of providing capital to new opportunities, do you find yourself constrained at all in this environment?

I'll talk big picture and then Ted can talk. Certainly with the sector trading where it is in the aggregate, it doesn't appear there'll be a lot of equity issuance. So I think we've taken the approach that our capital should cost more to borrowers. And there are some parts of the market that are still healthy and competitive, but certainly over time I would suspect that the whole industry, if stocks continue to trade at levels where issuance of equity's not possible, we're going to reprice our collective capital so we are making higher margin on returns. But to Ted's point, a lot of discussion about energy right now -- a lot of the focus of activity is on the existing names in the high-yield and loan universe. They're really -- companies are resetting budgets, cutting back CapEx, pushing hard on their suppliers to cut cost. No one -- for the most part -- in aggregate, a lot of that rescue financing in energy has not occurred yet. But certainly I think that we are in a lower rate environment where our yields are relatively high -- trading below NAV -- I think we, like everybody else, is making sure we get paid for the money that we lend out as a broad strategy.

Yes. And the good news about -- the good news and bad news is it's also -- listen. The other 87% of our business away from oil and gas is still competitive. Activity levels are lower today than what they were a couple months ago. Spreads are still pretty tight. And so we just don't feel like this is a great environment for us to massively growing our business. Again, we think we have organic opportunities to high-grade yield within our portfolio, and it's still a reasonably robust credit market out there. And so we just want to be very, very cautious, just given all of the tail risks and macro risks out there today, about being disciplined about deploying capital.

Thanks. That's helpful. And in terms of -- I guess with a slower amount of activity, are you expecting a slower amount of repayments or exits from the portfolio?

Yes. So we always say that if you back-test our portfolio since we went public, really our gross -- I'm sorry -- our net activity is reasonably consistent. Our gross deployment and exits is typically pretty correlated. So in periods of time where we're really, really busy on the origination front, we typically have lots of repayments and vice-versa. So repayments, for our business, are down pretty materially generically, both at the end of last year and early this year. And so obviously we're getting repaid out of certain situations. That helps us churn our portfolio. But repayment activity is definitely down, but new origination activity is down as well. And so net activity, I think, has been -- is going to be pretty constant, but I think gross will be subdued for the foreseeable future when we look at our pipeline.

Got it. Thanks. And then just lastly, the oil and gas and your commentary about the protection you have in there are helpful. Why not just maybe sell some of it? [Marks] in the portfolio are pretty close to your cost basis for a lot of them. Why not just exit some of these positions to kind of reduce the exposure there and kind of take some of the target off of your back being a little bit higher exposed to that sector in general?

Yes. You go through our portfolio detail. Number one, we're earning excess spread and we still feel pretty good about -- we still feel good about the credits. And number two is this is not a -- these assets are not readily saleable. They -- this is a portfolio we feel really good about. We feel good about how we're positioned and everything else. But these are not liquid securities. And so these are originated pieces of paper. We're in constant dialogue with management teams. (Inaudible) spoke documents. And so I don't think that's something we're going to pursue. I don't think we're going to pursue a wholesale exit of certain [months].

Got it. Okay. Thank you.

Your next question comes from the line of Jonathan Bock of Wells Fargo Securities.

Ted, just wanted to understand a little bit about the covenant protection that you have within your oil and gas loans. You mentioned that there was a risk that some of these companies take on increased levels of senior secured debt, in effect kind of priming your positions to the extent that you are in a second. Do you have covenant protection that can prevent that from happening? And can you perhaps outline that risk a bit more because, yes, while we understand people cut CapEx budgets, we understand they don't go away completely and liquidity's going to need to come from somewhere.

Yes. Just a clarification point. The comment I made was a generic comment. And so when you look at the -- if you look at the high-yield index and you look at high-yield energy securities, typically the -- almost all of them have the ability to be primed. Our portfolio -- the originated portfolio which is the vast, vast majority of our portfolio -- does not have the ability to be primed. And so if you think about how a typical oil and gas company finances itself, it has a reserve base loan or what you call an ABL, and then behind it, it has high-yield bonds. That's -- the vast majority of the high-yield universe is structured that way. We're typically dealing with borrowers (inaudible) performing RBL. And so the vast majority of our portfolio you cannot layer us with additional debt.

Great. And then one question, Jim, for you. So as you look across the entirety of this space where perhaps we're starting to see spread widening to a greater degree and more liquid and tradable securities -- I could refer to it as BSL, but you know there's a kitsch layer there that middle market firms can focus on that are a bit larger -- versus direct originated volumes. Do you have a preference in terms of ease, in terms of how one actually goes in and originates in this environment? Is it a target-rich environment in the more liquid and tradable categories today or not?

Are you talking about energy or the broad universe?

Broadly speaking, Jim.

I think taking a step back -- and Ted has alluded to it. Energy, oil and gas -- anywhere between 16% and 20% of the broad high-yield markets, and really there's -- because of, as Ted mentioned, ABLs, RBLs, there's not a lot in the second-lien market today. There's only a broad handful. Certainly there's been broad dispersion in the high-yield market. We have a couple of positions in those, but I think, broadly speaking, there's -- while there's massive dislocation in that space and we are long-term constructive about this energy complex, I think there's -- there are some opportunities there. The broadly-syndicated loan market is sort of a world -- it's the haves and the have-nots. Companies that are large-scale and successful are having an ease to come to market; many others -- maybe in the technology space with higher leverage -- are having a more challenging time. So we did a run, looking at the broad credit space, of price dispersion last year and how many securities were up -- down 10, 20 and 30 points versus being up 10 or 20 points, and the dispersion is wildly on the negative side in an environment where the indexes are relatively flat. So there is a vast amount of dispersion going on, but the broadly-syndicated or the middle markets -- syndicated markets -- on deals that work -- work well, and there's a tremendous amount of demand. I think what we are trying to do is take the proverbial step back and, with this dislocation -- whether it's in energy or other areas -- price our capital accordingly. And I do want to emphasize we were very clear 3, 4 years ago how we were going to diversify our origination away from primarily-sponsored businesses. We've done so in aircraft. We've done so in energy. Management and the board is fully behind the strategies we've taken. And this is not a time for us to sort of cut and run. We've got well-structured securities. We're long-term-positive on the complex. And in terms of making and requiring -- investments to make our dividend, we stand behind our portfolio.

Yes.

Jonathan, I'd just make one other comment with this. Buying liquid securities is not (inaudible). We have -- like there's still a massive spread for illiquid risk, and we're super-focused on proprietary origination. And so despite there's been some spread-widening in the BSL market, that's translated into spread-widening in the middle market, and that is really where we're trying to focus on business.

That's great. And then I guess a question as it relates to belief in your portfolio. So if I'm looking at Dodge Data & Analytics where you're earning a 9-ish coupon -- slightly higher, I would imagine, with some fees, etc. that you're getting a little bit above that -- can you explain the return dynamics that would come from making an investment in Dodge versus making an investment in your own stock today below book? Which one provides the better risk-adjusted return?

Well, Jonathan, certainly you were out yesterday and I'm sure the whole market read your report, as did we, as did our board. And certainly that's a topic of discussion. And, as I'm sure you can imagine, there's a whole host of attributes one would go in to decide what makes sense to the portfolio long term. And we and management and the board are -- had a discussion yesterday and I'm sure will be ongoing -- the very question you've raised about whether it makes sense at certain points to buy back our stock vis-?-vis other activities and other investments. So we're certainly focused on it and certainly I think it's very easy, one day or the next, to make a decision. But the prudent thing to do is to take a step back, look at your overall portfolio, look at the capital structure you have and make long-term decisions which our shareholders have entrusted us with, and that's what we're doing right now. So I think making a decision based on one investment -- certainly when you look at what you think is the stated yield on Dodge and you look at what you think is the -- what we know the NAV is of our stock today and ability to purchase it, that looks quite obvious. But I would argue that there's another -- a variety of other ancillary benefits of doing Dodge. And we have found that while the stated yield looks quite low on many of these things, between prepayments and fees and when you really put the numbers through, names like Dodge we have found to be very nice low-to-mid-teens type of returns. So it actually compares quite favorably on what you may be able to buy our stock today on a given opportunity.

Yes. And make no mistake. Just the fact that they're having discussion, that is -- that's actually good. At the end of the day, people have already seen you and a number of the folks that are part of your team do the right thing as it relates to fees, etc. in terms of waivers, which is much appreciated. So we're glad you're having the discussion and there are intangibles, no doubt, but of course, as people start to look at the great value that's offered at Apollo below book, we're glad to know that you're looking at it as well. So guys, thank you so much for taking my questions.

Excellent.

We have no further questions at this time. I will now return the call to Jim Zelter for any additional or closing remarks.

Great. Well, as usual, we appreciate your broad support and interest in our company and we'll work feverishly to grow shareholder value over time. So thank you much. Thank you for attending and your questions today, and we look forward to talking to you in the near future. Bye-bye.

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