Monroe Capital Corp (MRCC) 2024 Q2 法說會逐字稿

Welcome to Monroe Capital Corporation's second-quarter 2024 earnings conference call.

歡迎參加門羅資本公司 2024 年第二季財報電話會議。

Before we begin, I'd like to take a moment to remind our listeners that remarks made during this call today may contain certain forward-looking statements, including statements regarding our goals, strategies, beliefs, future potential, operating results, and cash flows.

在我們開始之前，我想花點時間提醒我們的聽眾，今天的電話會議中發表的言論可能包含某些前瞻性陳述，包括有關我們的目標、戰略、信念、未來潛力、經營業績和現金流的陳述。

Although we believe these statements are reasonable based on management's estimates, assumptions, and projections as of today, August 8, 2024, these statements are not guarantees of future performance.

儘管我們認為根據管理層截至 2024 年 8 月 8 日的估計、假設和預測，這些陳述是合理的，但這些陳述並不能保證未來的表現。

Further, time-sensitive information may no longer be accurate as at the time of any replay or listening.

此外，時間敏感資訊在任何重播或聆聽時可能不再準確。

Actual results may differ materially as a result of risks, uncertainty, or other factors, including, but not limited to, the risk factors described from time to time in the company's filings with the SEC.

由於風險、不確定性或其他因素，包括但不限於公司向 SEC 提交的文件中不時描述的風險因素，實際結果可能會存在重大差異。

Monroe Capital takes no obligation to update or revise these forward-looking statements.

門羅資本沒有義務更新或修改這些前瞻性陳述。

I will now turn the conference call over to Ted Koenig, Chief Executive Officer of Monroe Capital Corporation.

我現在將電話會議轉交給 Monroe Capital Corporation 執行長 Ted Koenig。

Sir, please go ahead.

先生，請繼續。

Good morning and thank you to everyone who has joined our call today.

早安，感謝今天加入我們電話會議的所有人。

Welcome to our second-quarter 2024 earnings call.

歡迎參加我們的 2024 年第二季財報電話會議。

I am here with Mick Solimene, our CFO and Chief Investment Officer; and Alex Parmacek, our Deputy Portfolio Manager.

我和我們的財務長兼首席投資長 Mick Solimene 一起來到這裡。以及我們的投資組合副經理 Alex Parmacek。

Last evening, we issued our second-quarter 2024 earnings press release and filed our 10-Q with the SEC.

昨晚，我們發布了 2024 年第二季財報新聞稿，並向 SEC 提交了 10-Q 報告。

On today's call, I'll begin by addressing our second-quarter results, and then share thoughts and insights into the macroeconomic environment and the current market conditions.

在今天的電話會議上，我將首先討論第二季的業績，然後分享對宏觀經濟環境和當前市場狀況的想法和見解。

I am pleased to report that for the 17th consecutive quarter, our adjusted net investment income covered our $0.25 per share dividend.

我很高興地報告，我們已連續第 17 個季度調整後的淨投資收入涵蓋了每股 0.25 美元的股息。

MRCC delivered a total annualized dividend yield at our trading price of 14% using our August 6, 2024, closing share price.

根據我們 2024 年 8 月 6 日的收盤價計算，MRCC 的總年化股息殖利率為 14%。

We are proud of our track record of delivering stable and consistent dividends to our shareholders.

我們為我們向股東提供穩定和一致的股息的記錄感到自豪。

In the second quarter of 2024, our adjusted net investment income was $6.7 million or $0.31 per share, an increase from $5.5 million or $0.25 per share in the first quarter.

2024 年第二季度，我們調整後的淨投資收益為 670 萬美元，即每股 0.31 美元，較第一季的 550 萬美元，即每股 0.25 美元有所增加。

Our adjusted net investment income covered our $0.25 per share dividend by nearly 1.25 times.

我們調整後的淨投資收益相當於每股 0.25 美元股息的近 1.25 倍。

We reported NAV of $199.3 million or $9.20 per share as of June 30, 2024, compared with NAV of $201.5 million or $9.30 per share as of March 31, 2024.

截至 2024 年 6 月 30 日，我們的資產淨值為 1.993 億美元，即每股 9.20 美元，截至 2024 年 3 月 31 日，資產淨值為 2.015 億美元，即每股 9.30 美元。

The slight decline in NAV was primarily the result of net unrealized losses attributable to certain portfolio companies, partially offset by net investment income in excess of the dividend paid during the quarter.

資產淨值小幅下降主要是由於某些投資組合公司的未實現淨虧損，部分被淨投資收入超過本季支付的股利所抵銷。

MRCC's debt-to-equity leverage decreased from 1.6 times as of March 31, 2024, to 1.54 times at June 30, 2024, driven by several payoffs that occurred late in the quarter.

受本季末發生的幾項支付的推動，MRCC 的債務股本槓桿從截至 2024 年 3 月 31 日的 1.6 倍下降至 2024 年 6 月 30 日的 1.54 倍。

Our focus remains primarily on managing and supporting our investment portfolio companies, with add-on lending opportunities and maintaining a highly selective and disciplined approach when redeploying capital into attractive investment opportunities with new portfolio company relationships.

我們的重點仍然主要是管理和支持我們的投資組合公司，提供附加貸款機會，並在透過新的投資組合公司關係將資本重新部署到有吸引力的投資機會時保持高度選擇性和嚴格的方法。

MRCC is predominantly comprised of first lien senior secured investments in companies operating in sectors that are historically resistant to challenging macroeconomic environments.

MRCC 主要由第一留置權優先擔保投資組成，這些投資投資於歷來能夠抵抗宏觀經濟環境挑戰的產業的公司。

In the face of persistent inflationary pressures and a volatile economic climate, our portfolio companies have continued to demonstrate healthy revenue and EBITDA growth.

面對持續的通膨壓力和不穩定的經濟環境，我們的投資組合公司繼續展現健康的收入和 EBITDA 成長。

The resiliency of our portfolio is further reflected in the stability of our risk-weighting distribution.

我們投資組合的彈性進一步體現在風險權重分佈的穩定性。

Further, despite enduring elevated borrowing costs, MRCC's portfolio companies generally have maintained a sound interest coverage ratio.

此外，儘管借貸成本上升，MRCC 的投資組合公司總體上保持了良好的利息覆蓋率。

Thus, MRCC is well positioned to navigate a higher for longer interest rate environment should it persist.

因此，如果利率環境持續下去，MRCC 將處於有利地位，能夠應對長期較高的利率環境。

The challenges we have seen in the portfolio have been, for the most part, due to idiosyncratic factors that are not indicative of broader fundamental stress within the portfolio.

我們在投資組合中看到的挑戰在很大程度上是由於特殊因素造成的，這些因素並未顯示投資組合中存在更廣泛的基本面壓力。

We will continue to leverage our deep roster of investment professionals, proven underwriting and portfolio management playbook and experience to work through and turnaround underperforming investments.

我們將繼續利用我們深厚的投資專業人士陣容、經過驗證的承保和投資組合管理手冊以及經驗來解決和扭轉表現不佳的投資。

We maintain a 20-year track record of navigating various market and economic environments and remain confident that we can continue to maximize outcomes and deliver value for our shareholders.

我們在應對各種市場和經濟環境方面保持了 20 年的記錄，並堅信我們能夠繼續實現成果最大化並為股東創造價值。

I will now turn our view on the market environment.

我現在談談市場環境的看法。

In the second quarter of 2024, we saw a rise in middle market loan volumes, driven by increased private equity sponsor activity.

2024 年第二季度，在私募股權發起人活動增加的推動下，中間市場貸款量增加。

According to LSEG LPC's second-quarter 2024 middle market analysis, middle market loan volumes increased 27% year over ear.

根據 LSEG LPC 的 2024 年第二季中間市場分析，中間市場貸款量較去年同期成長 27%。

Middle market direct lending M&A volumes were up 71% compared to prior year and sponsor direct lending volumes were up over 90% from the prior year.

中間市場直接貸款併購量較上年增加 71%，發起人直接貸款量較上年增加 90% 以上。

Sponsor demand for capital to support the growth of their portfolio companies and position those companies for exits has heightened the need for direct lending solutions that provide flexibility and low execution risk.

發起人對資本的需求是為了支持其投資組合公司的發展，並為這些公司的退出做好準備，這增加了對提供靈活性和低執行風險的直接貸款解決方案的需求。

While we did see a pickup in syndicated loan activity, direct lenders still accounted for 4.6 times the volume of syndicated and bank deals in the quarter.

雖然我們確實看到銀團貸款活動有所回升，但本季直接貸款機構的交易量仍是銀團和銀行交易量的 4.6 倍。

The accelerated sponsor activity has presented us with compelling opportunities for incumbency lending to our existing portfolio companies, where historically, we have been able to generate some of our most attractive risk-adjusted returns.

贊助商活動的加速為我們提供了向現有投資組合公司提供在職貸款的絕佳機會，從歷史上看，我們已經能夠產生一些最具吸引力的風險調整回報。

The intensifying competition in the credit markets that we noted in our call last quarter has carried on throughout the second quarter.

我們在上個季度的電話會議中註意到，信貸市場競爭的加劇一直持續到第二季​​。

This has resulted in the tightening of spreads across the middle market, especially with the pickup in syndicated loan and repricing activity happening, particularly in the upper middle market.

這導致整個中間市場的利差收緊，特別是隨著銀團貸款和重新定價活動的增加，特別是在中高端市場。

Concurrently, we saw leverage levels slightly increased across the middle market transactions in the second quarter.

同時，我們看到第二季中間市場交易的槓桿水平略有上升。

Monroe focuses on providing capital solutions to the lower middle market, which has experienced less spread compression and leverage expansion than that of the upper middle market.

Monroe專注於為中低端市場提供資本解決方案，與中高端市場相比，中低端市場的利差壓縮和槓桿擴張較少。

As a result, MRCC's effective yield has remained stable at an attractive rate of nearly 12% on heavily weighted first lien senior secured portfolio.

因此，在重權重第一留置權優先擔保投資組合中，MRCC 的有效收益率保持穩定，接近 12%，極具吸引力。

In the face of a market where overall spreads have decreased and leverage has increased, we continue to focus on supporting our incumbent portfolio companies.

面對整體利差下降和槓桿上升的市場，我們繼續專注於支持現有的投資組合公司。

Our ability to consistently generate deal flow through our existing portfolio has allowed us to retain higher quality assets, while maintaining a disciplined approach with our originations, underwriting, and deal execution.

我們透過現有投資組合持續產生交易流的能力使我們能夠保留更高品質的資產，同時在我們的發起、承銷和交易執行方面保持嚴格的方法。

Though interest rate cuts by the Fed have become increasingly likely, we remain focused on our loan-to-value attachment points, which have remained stable throughout the first half of 2024.

儘管聯準會降息的可能性越來越大，但我們仍然關注貸款價值附著點，該附著點在 2024 年上半年保持穩定。

This approach is consistent with other middle market direct lenders who are being increasingly cautious with overburdening portfolio companies with debt service obligations.

這種方法與其他中間市場直接貸款人的做法一致，這些貸款人對承擔償債義務的投資組合公司的負擔越來越謹慎。

In this direct lending environment, we will execute on opportunities that meet our rigorous underwriting standards and then offer us the necessary structures and protections that align with our portfolio management playbook.

在這種直接貸款環境中，我們將抓住符合嚴格承保標準的機會，然後為我們提供與我們的投資組合管理手冊一致的必要結構和保護。

MRCC enjoys a strong strategic advantage in being affiliated with a best-in-class middle market private credit manager with approximately $20 billion in assets under management, supported by a deep team consisting of over 250 employees, including 110 dedicated investment professionals as of July 1, 2024.

MRCC 擁有強大的策略優勢，隸屬於一流的中間市場私人信貸管理公司，管理約200 億美元的資產，並得到由250 多名員工組成的深厚團隊的支持，其中截至7 月1 日包括110 名專門的投資專業人員，2024 年。

We continue to focus on generating adjusted net investment income that meets or exceeds our dividend and achieving positive long-term NAV performance.

我們繼續專注於產生達到或超過股息的調整後淨投資收益，並實現積極的長期資產淨值表現。

I'm now going to turn the call over to Mick, who is going to walk us through our financial results in greater detail.

我現在要把電話轉給米克，他將向我們詳細介紹我們的財務表現。

Thank you, Ted.

謝謝你，泰德。

At quarter end, our investment portfolio totaled $485.8 million, a $15.1 million decrease from $500.9 million at the end of last quarter.

截至季末，我們的投資組合總額為 4.858 億美元，比上季末的 5.009 億美元減少了 1,510 萬美元。

Our investment portfolio consisted of debt and equity investments in 94 portfolio companies compared to 98 portfolio companies at the prior quarter end.

我們的投資組合包括 94 家投資組合公司的債務和股權投資，而上一季末為 98 家投資組合公司。

During the second quarter, we had a revolver and delayed drop fundings and add-ons to existing portfolio companies of $21.7 million.

第二季度，我們向現有投資組合公司提供了 2,170 萬美元的左輪手槍和延遲資金和附加資金。

We received four full payoffs aggregating to $13.5 million and incurred partial and normal course paydowns totaling $22.4 million.

我們收到了四筆全額付款，總計 1,350 萬美元，並產生了總計 2,240 萬美元的部分和正常付款。

As Ted noted earlier, these full payoffs occurred later in the second quarter, with two of those payoffs attributable to portfolio company sales and two of those payoffs attributable to refinancings.

正如特德早些時候指出的，這些全部收益發生在第二季度晚些時候，其中兩項收益歸因於投資組合公司的銷售，其中兩項收益歸因於再融資。

At June 30, 2024, we had total borrowings of $307.8 million, including $177.8 million outstanding under our floating rate revolving credit facility and $130 million of our 4.75% fixed rate 2026 notes.

截至 2024 年 6 月 30 日，我們的借款總額為 3.078 億美元，其中包括浮動利率循環信貸安排下的未償還貸款 1.778 億美元，以及 2026 年固定利率 4.75% 票據的 1.3 億美元。

Total borrowings outstanding decreased by $13.9 million during the quarter as we utilized proceeds from various deal payoffs to pay down the revolving credit facility.

本季未償還借款總額減少了 1,390 萬美元，因為我們利用各種交易收益來償還循環信貸額度。

At quarter end, the revolving credit facility had $77.2 million of availability subject to borrowing base capacity.

截至季末，循環信貸額度的可用金額為 7,720 萬美元，具體取決於借款基礎能力。

Now turning to our financial results.

現在轉向我們的財務表現。

Adjusted net investment income, a non-GAAP measure, was $6.7 million or $0.31 per share this quarter, compared to $5.5 million or $0.25 per share in the prior quarter.

本季調整後淨投資收益（非公認會計準則衡量標準）為 670 萬美元，即每股 0.31 美元，而上一季為 550 萬美元，即每股 0.25 美元。

The increase in adjusted net investment income during the quarter was primarily driven by a $1 million Part 1 incentive fee limitation, with the balance of the increase being a result of higher average invested assets over the period.

本季調整後淨投資收入的成長主要是由 100 萬美元的第 1 部分激勵費用限制推動的，其餘成長是由於該期間平均投資資產增加所致。

Excluding the shareholder-friendly incentive fee limitation in the quarter, pro forma adjusted net investment income would have been $0.26 per share, still in excess of our 25% -- $0.25 per share dividend.

排除本季有利於股東的激勵費用限制，預計調整後的淨投資收益將為每股 0.26 美元，仍超過我們 25% 的每股股息 0.25 美元。

As a result of the total return requirement within MRCC's incentive fee calculation, we expect limitations on our incentive fees to persist at varying levels over the next three quarters.

由於 MRCC 獎勵費計算中的總回報要求，我們預計未來三個季度對獎勵費的限制將持續在不同水準。

Our effective yield on the portfolio's debt and preferred equity investments remained stable during the quarter at 11.9%.

本季我們投資組合的債務和優先股投資的有效收益率保持穩定，為 11.9%。

As of June 30, 2024, our NAV was $199.3 million, which decreased slightly from $201.5 million as of March 31, 2024.

截至2024年6月30日，我們的資產淨值為1.993億美元，較截至2024年3月31日的2.015億美元略有下降。

Our corresponding NAV per share decreased by $0.10 from $9.30 per share to $9.20 per share.

我們相應的每股資產淨值下降了 0.10 美元，從每股 9.30 美元降至每股 9.20 美元。

The decline in NAV this quarter was primarily the result of net unrealized losses attributable to certain portfolio companies that have been mostly impacted by idiosyncratic factors.

本季資產淨值下降主要是由於某些投資組合公司的未實現淨虧損，這些公司主要受到特殊因素的影響。

These mark-to-market unrealized losses were partially offset by net investment income in excess of the dividend paid during the quarter.

這些按市值計價的未實現損失被超過本季度支付的股息的淨投資收入部分抵消。

I will now turn the call over to Alex, who will provide more details on our second-quarter operating performance.

我現在將把電話轉給亞歷克斯，他將提供有關我們第二季度營運業績的更多詳細資訊。

Thank you, Mick.

謝謝你，米克。

Looking to our statement of operations, investment income totaled $15.6 million during the second quarter of 2024, a slight increase from $15.2 million in the first quarter of 2024.

從我們的營運報表來看，2024 年第二季的投資收入總計 1,560 萬美元，比 2024 年第一季的 1,520 萬美元略有增加。

The $400,000 increase in investment income was primarily the result of higher average assets during the quarter as well as an increase in other income as part of a portfolio company realization during the quarter.

投資收入增加 400,000 美元，主要是由於本季度平均資產增加以及作為投資組合公司在本季度變現的一部分的其他收入的增加。

In the second quarter, we placed one new investment on nonaccrual, with a fair market value of $1.6 million.

第二季度，我們進行了新的非應計投資，公平市價為 160 萬美元。

As of June 30, 2024, we had eight investments on nonaccrual status, representing 1.9% of the portfolio at fair market value, which is consistent with that of March 31, 2024.

截至2024年6月30日，我們有8項非應計狀態投資，佔以公平市價計算的投資組合的1.9%，與2024年3月31日的情況一致。

Now shifting over to the expense side.

現在轉向費用方面。

Total expenses for the second quarter of 2024 were $9.1 million compared to $9.7 million of total expenses for the first quarter of 2024.

2024 年第二季的總費用為 910 萬美元，而 2024 年第一季的總費用為 970 萬美元。

Excluding the impact of the incentive fee limitation of $1 million, total expenses increased by $400,000, primarily due to an increase in interest and other debt financing expenses, driven by increases in our average debt outstanding and in excise taxes resulting from net investment income exceeding our dividend.

不包括100 萬美元激勵費用限制的影響，總費用增加了40 萬美元，主要是由於利息和其他債務融資費用增加，這是由於我們的平均未償債務增加以及淨投資收入超過我們的消費稅所致。

Our net loss for the quarter was $3.3 million compared to a net loss of $2.3 million for the prior quarter.

我們本季的淨虧損為 330 萬美元，而上一季的淨虧損為 230 萬美元。

These net losses for the quarter ended June 30, 2024, were primarily attributable to unrealized mark-to-market losses on certain portfolio companies that have underlying credit performance concerns.

截至 2024 年 6 月 30 日的季度的這些淨虧損主要歸因於某些存在潛在信用表現問題的投資組合公司的未實現按市值計價的虧損。

These mark-to-market unrealized losses were partially offset by a net realized gain associated with the sale of an equity position in one of our portfolio companies.

這些按市值計價的未實現損失被與出售我們投資組合公司之一股權相關的已實現淨收益部分抵消。

The average mark on the portfolio decreased slightly by 0.9% from 95.3% of cost at March 31, 2024, to 94.4% of cost at June 30, 2024.

投資組合的平均標記從2024年3月31日成本的95.3%小幅下降0.9%，至2024年6月30日成本的94.4%。

Turning now to SLF.

現在轉向 SLF。

As of June 30, 2024, the SLF had investments in 39 different borrowers, aggregating to $109.7 million of fair value.

截至 2024 年 6 月 30 日，SLF 對 39 個不同借款人進行了投資，公允價值總計 1.097 億美元。

The SLF's underlying investments are loans to middle market borrowers that are generally larger and more sensitive to market spread movements than the rest of MRCC's portfolio, which is focused predominantly on lower middle market companies.

SLF 的基礎投資是向中端市場借款人提供的貸款，與MRCC 投資組合的其他部分相比，這些借款人的規模通常更大，而且對市場利差變動更敏感，而MRCC 的投資組合主要集中在中低階市場公司。

In the quarter, the average mark on the SLF portfolio decreased modestly by approximately 60 basis points from 88.9% of amortized cost as of March 31, 2024, to 88.3% of amortized cost as of June 30, 2024.

本季度，SLF 投資組合的平均水準小幅下降約 60 個基點，從截至 2024 年 3 月 31 日的攤餘成本的 88.9% 降至截至 2024 年 6 月 30 日的攤餘成本的 88.3%。

Consistent with the prior quarter, MRCC received income distributions from SLF totaling $900,000.

與上一季一致，MRCC 從 SLF 獲得了總計 90 萬美元的收入分配。

As of June 30, 2024, SLF had borrowings under its nonrecourse credit facility of $50.8 million and $59.2 million of available capacity, subject to borrowing base availability.

截至 2024 年 6 月 30 日，SLF 在其無追索權信貸安排下的借款為 5,080 萬美元，可用能力為 5,920 萬美元，具體取決於借款基礎的可用性。

At this point, I will turn the call back to Ted for some closing remarks, before we open up the line for some questions.

此時，我將把電話轉回給特德，讓他發表一些結束語，然後再開始回答一些問題。

Thank you, Alex.

謝謝你，亞歷克斯。

In summary, we remain confident in the portfolio's ability to navigate an environment where there was uncertain macroeconomic backdrop and elevated interest rates.

總之，我們仍然相信該投資組合能夠應對宏觀經濟背景不確定和利率上升的環境。

Our focus continues to be on portfolio management, where we can leverage our deep and experienced team of investment professionals to execute our portfolio management playbook and maximize recoveries for our challenging investments.

我們的重點仍然是投資組合管理，我們可以利用我們深厚且經驗豐富的投資專業團隊來執行我們的投資組合管理手冊，並最大限度地提高我們具有挑戰性的投資的回收率。

In today's more competitive environment, we will lean on the scale of our originations platform and opportunities to support our incumbent portfolio through incremental investments.

在當今競爭更加激烈的環境中，我們將依靠我們的創始平台的規模和機會，透過增量投資來支持我們現有的投資組合。

MRCC continues to offer stable and consistent dividends to our shareholders as this quarter marked the 17th consecutive quarter where our adjusted net investment income has met or exceeded our $0.25 per share dividend yield.

MRCC 繼續向我們的股東提供穩定一致的股息，因為本季是我們調整後的淨投資收入連續第 17 個季度達到或超過每股 0.25 美元的股息收益率。

We believe that our predominantly first lien portfolio, which carries an average effective yield of nearly 12%, positions us well to continue delivering an active risk-adjusted return to our investors, as highlighted by our current 14% dividend yield based on our August 6, 2024, closing share price.

我們相信，我們以第一留置權為主的投資組合的平均有效收益率接近12%，使我們能夠繼續為投資者提供積極的風險調整回報，正如我們根據8 月6 日計算的當前14% 的股息殖利率所強調的那樣。

We believe that Monroe Capital Corporation, which is affiliated with an award-winning, best-in-class external private credit manager, with nearly $20 billion in assets under management, continues to provide a very attractive investment opportunity to our shareholders and to other investors.

我們相信，門羅資本公司隸屬於一家屢獲殊榮、一流的外部私人信貸管理公司，管理近 200 億美元的資產，將繼續為我們的股東和其他投資者提供非常有吸引力的投資機會。

Thank you all for your time today, and this concludes our prepared remarks.

感謝大家今天抽出寶貴的時間，我們準備好的演講到此結束。

I'm going to ask the operator to open the call now for questions.

我現在要請接線生打開電話詢問問題。

(Operator Instructions) Christopher Nolan, Ladenburg Thalmann.

（操作員說明）克里斯多福諾蘭、拉登堡塔爾曼。

Okay.

好的。

Hey, guys.

嘿，夥計們。

On the SLF -- according to my calculations, the SLF fair value decreased by roughly 5% or 6% quarter over quarter.

關於 SLF——根據我的計算，SLF 公允價值環比下降了大約 5% 或 6%。

Is this vehicle in a runoff mode?

這輛車是否處於徑流模式？

So hi, Chris.

嗨，克里斯。

Thank you for that question.

謝謝你提出這個問題。

So if you look at the value -- the fair market value of the vehicle, quarter over quarter was actually flat.

因此，如果你看一下價值——車輛的公平市場價值，季度環比實際上持平。

It was actually flat during the quarter in the context of a very modest decline in the average market of the portfolio.

在投資組合平均市場小幅下滑的背景下，該季度實際上持平。

We've been really conscious about bringing down our leverage in this portfolio, while maintaining our $900,000 per quarter dividend to MRCC, with our joint venture partner receiving as well a $900,000 dividend.

我們一直非常有意識地降低我們在該投資組合中的槓桿率，同時維持我們向 MRCC 提供的每季 90 萬美元的股息，我們的合資夥伴也獲得 90 萬美元的股息。

We're evaluating how to be constructive in this market with this vehicle given where we are in the tightened rate environment where we are in the economic cycle, but feel good about the dividend contribution that this vehicle provides.

考慮到我們正處於經濟週期的緊縮利率環境中，我們正在評估如何利用這種工具在這個市場上發揮建設性作用，但對這種工具提供的股利貢獻感到滿意。

And also to put this in perspective, SLF is about 6.8%, 6.9% of the fair market value of MRCC's portfolio, with the dividend representing a little under 6% of our investment income.

從長遠來看，SLF 約為 6.8%，佔 MRCC 投資組合公平市價的 6.9%，股息占我們投資收入的略低於 6%。

So we're evaluating this the right time to reenter the market and how to be constructive about the portfolio.

因此，我們正在評估現在重新進入市場的最佳時機以及如何對投資組合保持建設性。

Yeah.

是的。

And Chris, in the quarter, we had a couple of payoffs.

克里斯，在本季度，我們獲得了一些回報。

So that was the big driver there.

這就是那裡的主要推動力。

As Mick noted, the market was pretty much stable.

正如米克指出的那樣，市場相當穩定。

So we had two payoffs.

所以我們有兩個回報。

The size of the portfolio decreased from 41 to 39.

投資組合規模從 41 個減少至 39 個。

The payoffs amounted to about $6.5 million in fair value.

支付的公允價值約為 650 萬美元。

Yeah.

是的。

Okay.

好的。

The issue is for me on the SLF is the fact that the nonaccrual seem to be a little high, particularly since it is theoretically, more stable companies larger.

對我來說，SLF 的問題是非應計利息似乎有點高，特別是因為從理論上講，公司規模越大越穩定。

But effectively, MRCC has a subordinate position here because it's holding equity, not the debt.

但實際上，MRCC 在這裡具有從屬地位，因為它持有股權，而不是債務。

So for the rest of your portfolio, you're doing a lot first lien senior secured.

因此，對於您投資組合的其餘部分，您需要做很多優先留置權擔保的工作。

But for this, you're an equity holder.

但就這一點而言，你是股東。

And I just want to make

我只想讓

--

--

Yeah, this is -- yeah, that's a really good point, Chris.

是的，這是——是的，這是一個非常好的觀點，克里斯。

I mean this is a joint venture that we created, where the SLF position in our portfolio represents the equity in this portfolio.

我的意思是，這是我們創建的合資企業，我們投資組合中的 SLF 部位代表了該投資組合中的股權。

So at the end of the day, the equity ultimately, represents the net value to the roughly 39 portfolio companies in the business.

因此，歸根結底，股權最終代表了該行業約 39 家投資組合公司的淨值。

It's not unlike a lot of the joint ventures that you're going to see -- that you see in other BDCs, but you are correct that this represents an equity interest in a portfolio of loans in a levered vehicle.

這與您將在其他 BDC 中看到的許多合資企業沒有什麼不同，但您認為這代表了槓桿工具貸款組合中的股權，這是正確的。

Okay.

好的。

Switching over to Education Corporation of America, and I know it's been here for a while, but I noticed going through the queue that the -- it looked like the second lien debt position you guys have has a cost of $831,000 and a fair value of $2.3 million, while the preferred to the same company has a cost of $7.4 million and worth zero at fair value.

轉到美國教育公司，我知道它已經存在了一段時間，但我注意到在隊列中，--看起來你們擁有的第二個留置權債務頭寸的成本為 831,000 美元，公允價值為230 萬美元，而同一家公司的優先股成本為740 萬美元，以公允價值計算為零。

So how can the junior secured loan be at a premium to cost and the preferred be zilch?

那麼初級擔保貸款怎麼會比成本高，而優先貸款卻為零呢？

Yeah.

是的。

So you are correct, Chris, that the fair value of the debt position is $2.3 million relative to an $800,000-ish cost, and the value of the preferred, on a fair market value basis is zero relative to a $7.4 million-ish cost basis.

所以你是對的，克里斯，相對於80 萬美元左右的成本，債務頭寸的公允價值為230 萬美元，而在公平市場價值基礎上，相對於740 萬美元左右的成本，優先股的價值為零。

This is really about the recovery waterfall on those two positions.

這實際上是關於這兩個位置的恢復瀑布。

And the fact that, with respect to the debt position, we are getting fees and unaccrued interest above our cost.

事實上，就債務狀況而言，我們獲得的費用和未計利息高於我們的成本。

And that's been ticked along here for a handful of quarters and years.

這已經持續了幾個季度和幾年了。

So as a result, that fair market value relative to the cost has peaked up relative to our recovery analysis.

因此，根據我們的復甦分析，相對於成本的公平市場價值已經達到頂峰。

And with the preferred being at the bottom of the ECA waterfall, that's entitled to the last degree of proceeds over and above principal repayment on the debt, plus the accrued but yet unpaid interest.

由於優先股位於 ECA 瀑布的底部，因此有權獲得除債務本金償還之外的最後程度的收益，加上應計但尚未支付的利息。

Okay.

好的。

Thanks, Mick.

謝謝，米克。

Final question.

最後一個問題。

Given the expectations for a limited -- for the repeat of this fee waiver to one degree or another over the next couple of quarters, can we say, at this point, that third quarter EPS will cover the dividend?

鑑於對未來幾季在一定程度上重複這種費用減免的有限預期，我們現在是否可以說第三季每股收益將覆蓋股息？

Yes, third quarter EPS, we believe, will cover the dividend.

是的，我們相信，第三季每股收益將覆蓋股息。

That's it for me.

對我來說就是這樣。

Thanks, guys.

謝謝，夥計們。

Thank you, Chris.

謝謝你，克里斯。

(Operator Instructions) Robert Dodd, Raymond James.

（操作員說明）羅伯特·多德，雷蒙德·詹姆斯。

Hi, guys.

嗨，大家好。

Focusing to your point in the prepared remarks.

在準備好的發言中重點關注你的觀點。

I mean you focused on maximizing recoveries and you still got a 4.5% of the portfolio of cost is on nonaccruals?

我的意思是，您專注於最大化回收率，但您的成本組合中仍有 4.5% 是非應計費用？

What -- can you give us an update on that in terms of like how far are you along your own various workouts for the season?

可以為我們介紹一下最新情況嗎？

And do you think there's a possibility that some of those assets come back onto accrual?

您認為其中一些資產有可能重新計入應計利息嗎？

Or is this a situation where it's working out, recover capital, reinvest the capital and any income recovery from that capital, which was 1.9% of fair value?

或者這是一種正在解決、回收資本、再投資資本以及從該資本中回收任何收入（公允價值的 1.9%）的情況？

And the income recovery is going to be longer term post a prolonged workout process?

經過長時間的運動過程後，收入恢復將是長期的嗎？

Or can some of these companies will cover more short/medium?

或者其中一些公司可以覆蓋更多的短期/中期？

Yeah.

是的。

Thanks for that question, Chris -- or Robert, sorry.

謝謝你提出這個問題，克里斯——或者羅伯特，抱歉。

Our nonaccruals do represent 1.9% of fair market value or 4.8% of cost, represents eight assets in total across a range of industry with no clear themes within those industries.

我們的非應計費用確實佔公平市場價值的 1.9% 或成本的 4.8%，代表一系列行業中總共八項資產，但這些行業中沒有明確的主題。

ECA and NECB have been in the nonperforming buckets for the longest amount of time and working through those.

ECA 和 NECB 處於不良狀態的時間最長，並且正在努力解決這些問題。

And with all these cases, we are working with our internal workout team in maximizing recoveries and candidly getting them out of that nonaccrual bucket and into recovery mode as quickly as we can.

對於所有這些情況，我們正在與我們的內部鍛鍊團隊合作，最大限度地提高恢復率，並坦誠地讓他們盡快擺脫非應計桶並進入恢復模式。

Our ultimate goal with all of these is to maximize the long-term recovery on these assets, not necessarily short-term recovery, and doing the right thing with respect to maximizing value -- maximizing fair value on these assets.

我們所有這些的最終目標是最大化這些資產的長期回收，不一定是短期回收，並在價值最大化方面做正確的事情——最大化這些資產的公允價值。

So we're confident in our ability to manage these assets.

因此，我們對管理這些資產的能力充滿信心。

We're confident in our ability to reorient -- to help the companies reorient their earnings profiles and continue to actively manage each and every one of them.

我們對自己的重新定位能力充滿信心——幫助這些公司重新調整其獲利狀況，並繼續積極管理每一家公司。

And Robert, just to answer it directly as well, I think when you look at the universe of these names, the big names, they're all in different phases and different stages of turnaround and exciting process.

羅伯特，我也直接回答這個問題，我認為當你看看這些名字、大牌的宇宙時，他們都處於不同的階段和不同的周轉和令人興奮的過程階段。

And I looked at them, you have a couple that are a little bit more in the early stage, with a little bit more time that it's going to take to get to where we want to go.

我看著他們，有些還處於早期階段，需要更多的時間才能到達我們想去的地方。

Again, we feel confident in getting there.

我們再次對實現這一目標充滿信心。

We do have some that we feel are getting -- are starting to see the light at the end of the tunnel, and we feel good about those as well.

我們確實有一些我們認為正在獲得的東西——開始看到隧道盡頭的曙光，我們也對此感覺良好。

But when you look at them, it's pretty scattered over where they are in their time -- in their timeline.

但當你觀察他們時，你會發現他們的時間線非常分散。

But as Mick alluded to it, we feel good about the prospects of a successful outcome for these names.

但正如米克所提到的，我們對這些名字成功的前景感到樂觀。

Got it.

知道了。

Thank you.

謝謝。

Thank you, Robert.

謝謝你，羅伯特。

Thank you.

謝謝。

Now seeing as there are no more questions in the queue, that does conclude our question-and-answer session.

現在看到隊列中沒有更多問題了，我們的問答環節就結束了。

I will now turn the call back over to the Monroe Capital team for closing remarks.

我現在將把電話轉回門羅資本團隊進行總結發言。

I want to thank everyone for joining us on the call today.

我要感謝大家今天加入我們的電話會議。

As always, to the extent you've got questions, on an interim basis, please feel free to reach out to Mick and Alex.

像往常一樣，如果您有任何疑問，請隨時聯繫 Mick 和 Alex。

Otherwise, we will speak to you again next quarter.

否則，我們將在下個季度再次與您聯繫。

Have a good day.

祝你有美好的一天。

Thank you, all.

謝謝大家。

Ladies and gentlemen, that concludes today's call.

女士們、先生們，今天的電話會議到此結束。

Thank you all for joining.

感謝大家的加入。

Have a pleasant day and you may now disconnect.

祝您度過愉快的一天，您現在可以斷開連接了。