New Mountain Finance Corp (NMFC) 2023 Q3 法說會逐字稿

Good morning, everyone, and welcome to the New Mountain Finance Corporation's Third Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

大家早安，歡迎參加新山金融公司 2023 年第三季財報電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to John Kline, President and CEO. Please, go ahead.

現在我想將會議交給總裁兼執行長約翰·克萊恩 (John Kline)。請繼續。

Thank you, and good morning, everyone. Welcome to New Mountain Finance Corporation's Third Quarter 2023 Earnings Call. On the line here with me today are Steve Klinsky, Chairman of NMFC and CEO of New Mountain Capital; and Laura Holson, COO and Interim CFO of NMFC.

謝謝大家，大家早安。歡迎參加 New Mountain Finance Corporation 2023 年第三季財報電話會議。今天和我一起在線的有 NMFC 董事長兼新山資本首席執行官 Steve Klinsky；以及 NMFC 首席營運長兼臨時財務長 Laura Holson。

Steve is going to make some introductory remarks, but before he does, I'd like to ask Laura to make some important statements regarding today's call.

史蒂夫將做一些介紹性發言，但在此之前，我想請勞拉就今天的電話會議發表一些重要聲明。

Thanks, John. Good morning, everyone.

謝謝，約翰。大家，早安。

Before we get into the presentation, I would like to advise everyone that today's call and webcast are being recorded. Please note that they are the property of New Mountain Finance Corporation and that any unauthorized broadcast in any form is strictly prohibited.

在我們開始演講之前，我想提醒大家，今天的電話會議和網路廣播正在錄音。請注意，它們是新山金融公司的財產，嚴禁以任何形式進行未經授權的廣播。

Information about the audio replay of this call is available in our November 2 earnings press release. I would also like to call your attention to the customary safe harbor disclosure in our press release and on Page 2 of the slide presentation regarding forward-looking statements.

有關本次電話會議音訊重播的信息，請參閱我們 11 月 2 日的財報新聞稿。我還想提請您注意我們的新聞稿和幻燈片演示第二頁中有關前瞻性陳述的慣例安全港披露。

Today's conference call and webcast may include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from those statements and projections. We do not undertake to update our forward-looking statements or projections unless required to by law.

今天的電話會議和網路廣播可能包括前瞻性陳述和預測，我們要求您參考我們向 SEC 提交的最新文件，以了解可能導致實際結果與這些陳述和預測有重大差異的重要因素。除非法律要求，否則我們不承諾更新我們的前瞻性陳述或預測。

To obtain copies of our latest SEC filings and to access the slide presentation that we will be referencing throughout this call, please visit our website at www.newmountainfinance.com.

若要取得我們最新的 SEC 文件副本並造訪我們將在本次電話會議中引用的幻燈片簡報，請造訪我們的網站：www.newmountainfinance.com。

At this time, I'd like to turn the call over to Steve Klinsky, NMFC's Chairman, who will give some highlights beginning on Page 5 of the slide presentation. Steve?

現在，我想將電話轉給 NMFC 主席 Steve Klinsky，他將從投影片簡報的第 5 頁開始重點介紹一些內容。史蒂夫？

Thanks, Laura. It's great to be able to address you all today, both as NMFC's Chairman and as a major fellow shareholder.

謝謝，勞拉。很高興今天能夠以 NMFC 董事長和主要股東的身份向大家發表演說。

Adjusted net investment income for the third quarter was $0.40 per share, more than covering our $0.32 per share regular dividend that was paid in cash on September 29.

第三季調整後的淨投資收益為每股 0.40 美元，高於 9 月 29 日以現金支付的每股 0.32 美元定期股息。

Our earnings increased by $0.08 compared to Q3 of last year, and $0.01 sequentially over Q2 of this year. Our net asset value per share decreased slightly to $13.06, an $0.08 decline compared to last quarter, demonstrating continued stable credit performance across our portfolio.

與去年第三季相比，我們的收入增加了 0.08 美元，與今年第二季相比，季增了 0.01 美元。我們的每股資產淨值小幅下降至 13.06 美元，較上季下降 0.08 美元，顯示我們整個投資組合的信貸表現持續穩定。

We believe our loans are well positioned overall in defensive growth industries that we think are right in all times and particularly attractive in less certain economic times.

我們相信，我們的貸款在防禦性成長產業總體上處於有利地位，我們認為這些產業在任何時候都是正確的，並且在不太確定的經濟時期尤其有吸引力。

New Mountain's private equity funds have never had a bankruptcy or missed an interest payment and the firm now manages over $45 billion of assets. Similarly, as shown on Page 14 of this presentation, since inception over 12 years ago, NMFC has experienced net gains across all of its realized credit investments, with only $89 million of unrealized depreciation on our books as of the end of Q3.

New Mountain 的私募股權基金從未破產或未能支付利息，該公司目前管理著超過 450 億美元的資產。同樣，如本簡報第14 頁所示，自12 年前成立以來，NMFC 的所有已實現信貸投資均實現了淨收益，截至第三季末，我們帳面上的未實現折舊僅為8,900 萬美元。

The higher rate environment continues to be a substantial positive for our quarterly earnings. We expect to continue to significantly outperform our $0.32 per share regular dividend at current interest rates, if all other factors hold constant.

較高的利率環境持續對我們的季度收益產生重大正面影響。如果所有其他因素保持不變，我們預計將繼續大幅優於以當前利率計算的每股 0.32 美元的定期股息。

Given our earnings of $0.40 per share this quarter, we will make our third consecutive variable supplemental dividend payment. The variable supplemental dividend for this quarter will be $0.04 per share, which is equal to half of the amount of our Q3 quarterly earnings in excess of our regular dividend of $0.32.

鑑於本季每股收益為 0.40 美元，我們將連續第三次支付可變補充股息。本季的可變補充股息將為每股 0.04 美元，相當於我們第三季季度收益超出定期股息 0.32 美元的一半。

This additional $0.04 dividend will raise the total dividend to $0.36 per share all in for this quarter, which is at the high end of our previous guidance. NMFC will pay these distributions on December 29 to holders of record as of December 15. The remainder of the excess earnings will remain on our balance sheet and may be paid out in the future.

額外的 0.04 美元股息將使本季度的總股息增至每股 0.36 美元，這是我們先前指導的上限。 NMFC 將於 12 月 29 日向截至 12 月 15 日的記錄持有人支付這些分配。剩餘的超額收益將保留在我們的資產負債表上，並可能在未來支付。

Our dividend at $0.36 represents an annualized current dividend yield of just under 12%. Looking forward to Q4, in addition to our $0.32 regular dividend, we expect to generate a variable supplemental dividend of $0.03 to $0.04 per share, payable in the first quarter of 2024. This incremental payout is supported by expected strong credit performance and continued elevated base rates.

我們的股息為 0.36 美元，目前年化股息殖利率略低於 12%。展望第四季度，除了0.32 美元的定期股息外，我們預計還將產生每股0.03 至0.04 美元的可變補充股息，將於2024 年第一季度支付。這種增量派息得到了預期強勁的信貸表現和持續提高的基數的支持費率。

We believe the strength of New Mountain and of NMFC is driven by the quality of our team. New Mountain overall now numbers 250 members, and the firm has developed specialties in attractive defensive growth that is a cyclical growth sectors, such as life science supplies, health care information technology, software, infrastructure services and digital engineering.

我們相信新山和 NMFC 的實力是由我們團隊的素質所驅動的。 New Mountain 目前共有 250 名會員，該公司在具有吸引力的防禦性成長（週期性成長產業）領域開發了專業知識，例如生命科學用品、醫療保健資訊科技、軟體、基礎設施服務和數位工程。

When pursuing our credit investing efforts, we utilize our extensive group of industry experts to provide unique knowledge and expertise that allows us to make very informed high-conviction underwriting decisions. Over the last 9 months, we have continued to expand the quality of our overall team.

在進行信貸投資工作時，我們利用廣泛的行業專家團隊提供獨特的知識和專業知識，使我們能夠做出非常明智的、高度可信的核保決策。在過去的 9 個月裡，我們不斷提高整個團隊的品質。

Finally, we, as management, continue as major shareholders of NMFC. Senior management and employee share ownership has been rising over time, and we now own approximately 13% of NMFC's total shares personally.

最後，我們作為管理階層，繼續作為 NMFC 的主要股東。隨著時間的推移，高階主管和員工的持股量不斷增加，目前我們個人持有 NMFC 股份總數的約 13%。

With that, let me turn the call to John.

現在，讓我把電話轉給約翰。

Thank you, Steve. Good morning again, everyone. I would like to offer some more details on our direct lending investment strategy and track record.

謝謝你，史蒂夫。大家早安。我想提供有關我們的直接貸款投資策略和業績記錄的更多詳細資訊。

Starting on Page 8, we highlight our disciplined industry selection, which shows exposure to a diversified list of defensive noncyclical sectors. These sectors and industry niches are characterized by durable growth drivers, predictable revenue streams, margin stability and great free cash flow conversion.

從第 8 頁開始，我們強調了我們嚴格的行業選擇，這顯示了我們對防禦性非週期性行業的多元化清單的曝險。這些部門和行業利基市場的特點是持久的成長動力、可預測的收入流、利潤穩定和巨大的自由現金流轉換。

We have successfully avoided cyclical, volatile and secularly challenged industries, which could be riskier areas to invest in today's higher rate environment. Our strategy has been consistent over our 12-plus years as a public company, and it allows us to operate with confidence in any economic environment.

我們成功地避開了週期性、波動性和長期面臨挑戰的行業，這些行業在當今利率較高的環境下可能是投資風險較高的領域。作為一家上市公司 12 多年來，我們的策略始終如一，這使我們能夠在任何經濟環境下充滿信心地運作。

Page 9 provides a high-level snapshot of our business, where we show a long-term track record of delivering consistent enhanced yield by avoiding losses and distributing virtually all of our excess income to shareholders.

第 9 頁提供了我們業務的高級快照，其中展示了我們透過避免損失並將幾乎所有超額收入分配給股東來提供持續提高的收益的長期記錄。

Since our IPO in 2011, NMFC has returned over $1.1 billion to shareholders through our dividend program, generating an annualized return of approximately 10%. Our current portfolio is exposed to companies in good industries that are performing well, and where our last dollar of risk is approximately 40% of the purchase price paid for the business.

自 2011 年首次公開募股以來，NMFC 已透過股息計畫向股東返還超過 11 億美元，年化回報率約為 10%。我們目前的投資組合面向錶現良好的優秀行業中的公司，我們最後一美元的風險約為為該業務支付的購買價格的 40%。

We lend primarily to businesses owned by financial sponsors who are sophisticated and supportive owners with significant capital that is junior to the loans that we make.

我們主要向金融贊助商擁有的企業提供貸款，這些贊助商是經驗豐富且支持性的所有者，擁有大量資本，而這些資本的規模低於我們發放的貸款。

Turning to Page 10. The internal risk ratings of our portfolio were relatively stable quarter-over-quarter, with approximately 93% of our portfolio rated green. Our most challenged names within the orange and red categories represent only approximately 2% of NMFC's fair value, and we have derisked our book by marking our red names to 11% of face value and our orange names to 68% of face value. At these valuation levels, our weaker names do not represent material future downside risk to our book value.

翻到第 10 頁。我們投資組合的內部風險評級較上季相對穩定，約 93% 的投資組合被評為綠色。我們在橘色和紅色類別中最具挑戰性的名稱僅佔NMFC 公允價值的約2%，我們透過將紅色名稱標記為面值的11%，將橘色名稱標記為面值的68%，從而降低了帳本的風險。在這些估值水準上，我們的較弱名稱並不代表我們的帳面價值未來有重大下行風險。

The updated heat map is shown in its entirety on Page 11. Given our portfolio's orientation towards defensive sectors like software, business services and health care, we believe our assets are well positioned to continue to perform, no matter how the economic landscape develops. We did have two names representing only 1% of total fair value migrate negatively this quarter. Both companies are experiencing short-term operational headwinds, but we remain optimistic about the long-term value proposition and prospects for a full recovery on our first lien positions.

更新後的熱圖完整顯示在第11 頁。鑑於我們的投資組合以軟體、商業服務和醫療保健等防禦性行業為導向，我們相信，無論經濟形勢如何發展，我們的資產都處於有利位置，能夠繼續表現。本季度，我們確實有兩個僅佔總公允價值 1% 的名字出現負遷移。兩家公司都面臨短期營運阻力，但我們對長期價值主張和第一留置權部位全面恢復的前景仍然持樂觀態度。

On the positive side, we are pleased to report that EaglePicher second lien, which was previously a yellow name, marked at $0.70, was moved to green during the quarter and subsequently repaid at par in October. Overall, as we reflect on the prospects of our yellow names, we are optimistic that we may have more positive outcomes like this one in the future.

從積極的一面來看，我們很高興地報告，EaglePicher 第二留置權以前是黃色名稱，標記為 0.70 美元，在本季度已轉為綠色，隨後於 10 月按面值償還。總的來說，當我們反思我們的黃色名字的前景時，我們樂觀地認為，我們將來可能會取得更多這樣的積極成果。

Turning to Page 12, we provide a graphical analysis of NAV changes during the quarter. Starting on the left. Credit-specific movements represented a $0.20 decrease in book value, driven by relatively minor equity markdowns, reflecting the more challenged valuation environment for mid-cap companies.

翻到第 12 頁，我們提供了本季資產淨值變化的圖形分析。從左邊開始。受相對較小的股票降價推動，信貸特定變動導致帳面價值下降 0.20 美元，反映出中型企業面臨的估值環境更具挑戰性。

Broad credit market movements were an $0.08 book value tailwind, as credit spreads tightened during Q3 due to the modest new issue supply. And as Steve mentioned earlier, we overearned the regular and supplemental dividends by $0.04 per share, which accrued to our book value. Combined, these changes netted to an $0.08 decline in book value for the quarter.

由於新股發行供應量不大，第三季信貸利差收緊，信貸市場的整體波動為帳面價值帶來了 0.08 美元的推動力。正如史蒂夫之前提到的，我們超額賺取了每股 0.04 美元的定期股息和補充股息，這計入了我們的帳面價值。這些變化合計導致本季帳面價值下降 0.08 美元。

It is important to note that if we were to value all of our green rated loans at par and continue to value the balance of the portfolio at current fair value, our book value would be [$13.50] compared to our actual NAV of $13.06 at 9/30.

值得注意的是，如果我們以面額對所有綠色評級貸款進行估值，並繼續以當前公允價值對投資組合的餘額進行估值，則我們的帳面價值將為[13.50 美元]，而我們的實際資產淨值為13.06 美元（9 點）。 /30。

Page 13 addresses NMFC's nonaccrual performance. On the left side of the page, we show the current state of the portfolio, where we have $3.1 billion of investments at fair value, with $48 million or 1.5% of the portfolio currently on nonaccrual. The number of companies on nonaccrual decreased this quarter as we move Integro second lien back to accrual status due to our increased conviction of a full recovery in the next 12 months. Of the name to remain on nonaccrual, most are from older vintages, have been written down materially and have a good chance of exiting the portfolio in the medium term.

第 13 頁討論了 NMFC 的非應計績效。在頁面左側，我們顯示了投資組合的當前狀態，其中我們有 31 億美元的公允價值投資，其中 4,800 萬美元或投資組合的 1.5% 目前為非應計投資。由於我們對未來 12 個月內全面復甦的信心增強，我們將 Integro 第二留置權恢復為應計狀態，本季採用非應計利潤的公司數量有所減少。在保留非應計利息的名稱中，大多數來自較舊的年份，已被大量減記，並且很有可能在中期退出投資組合。

On the right side of the page, we show our cumulative credit performance since IPO, where NMFC has made $9.2 billion of investments and achieved net gains on all realized positions of $15 million. This is consistent with our value proposition of preserving principal value and distributing nearly all of our net investment income through predictable quarterly dividends.

頁面右側顯示了自 IPO 以來的累積信用表現，NMFC 已進行 92 億美元的投資，所有已實現頭寸實現了 1500 萬美元的淨收益。這與我們保持本金價值並透過可預測的季度股息分配幾乎所有淨投資收入的價值主張是一致的。

On Page 14, we present NMFC's overall economic performance since IPO, showing that we have delivered consistent and compelling returns. Cumulatively, NMFC has earned $1.2 billion in net investment income, while generating $15 million of cumulative net realized gains and only $89 million of net unrealized depreciation, netting to over $1.1 billion of value created for our shareholders.

在第 14 頁，我們介紹了 NMFC 自 IPO 以來的整體經濟表現，顯示我們提供了一致且引人注目的回報。 NMFC 累計賺取了 12 億美元的淨投資收入，同時產生了 1500 萬美元的累計已實現淨收益和僅 8900 萬美元的未實現淨折舊，為我們的股東創造了超過 11 億美元的淨價值。

Page 15 shows a stock chart detailing NMFC's equity returns since IPO. Over this period, NMFC has generated a compound annual return of approximately 10%, which represents a very strong cash flow-oriented return well in excess of both the high-yield index and an index of BDC peers who have been public at least as long as we have.

第 15 頁顯示了詳細說明 NMFC 自首次公開發行以來的股本回報的股票圖表。在此期間，NMFC 產生了約 10% 的複合年回報率，這代表著非常強勁的以現金流為導向的回報率，遠遠超過高收益指數和上市時間至少相同的 BDC 同行指數就像我們一樣。

I will now turn the call over to our Chief Operating Officer and Interim Chief Financial Officer, Laura Holson, to discuss our current portfolio construction and financial results.

我現在將把電話轉給我們的營運長兼臨時財務長 Laura Holson，討論我們目前的投資組合建構和財務表現。

Thanks, John. we continue to believe the outlook for the rest of 2023 and 2024 in the sponsor-backed direct lending market is positive. Deal flow continues to be down overall, as valuation expectations reset in the world of higher base rates, but there are pockets of activity in our defensive growth verticals where we have the opportunity to make loans at attractive yields while remaining very selective.

謝謝，約翰。我們仍然認為 2023 年剩餘時間和 2024 年贊助商支持的直接貸款市場前景樂觀。隨著基準利率上升，估值預期重新設定，交易流量整體持續下降，但我們的防禦性成長垂直領域存在一些活動，我們有機會以有吸引力的收益率發放貸款，同時保持非常有選擇性。

Yield structures remain compelling, with leverage levels meaningfully below peak levels and significant sponsor equity contributions representing the vast majority of the capital structures.

收益率結構仍然引人注目，槓桿水平明顯低於峰值水平，而贊助商的大量股權貢獻佔資本結構的絕大多數。

We remain bullish on the medium- and long-term outlook for M&A, given the magnitude of dry powder for private equity and the ongoing need to return capital to LPs as well as the general maturity wall-facing borrowers. We saw a bit of a flurry of deal activity post Labor Day, including some opportunistic issuance, but it continues to be episodic at the moment.

考慮到私募股權的乾火藥規模以及持續需要向有限合夥人和一般到期借款人返還資本，我們仍然看好併購的中長期前景。我們在勞動節後看到了一些交易活動，包括一些機會主義發行，但目前仍然是間歇性的。

Given our large portfolio of over 100 unique borrowers, we continue to see good opportunities to make incremental loans to existing well-performing portfolio companies seeking to pursue accretive M&A.

鑑於我們擁有超過 100 個獨特借款人的龐大投資組合，我們繼續看到向尋求增值併購的現有業績良好的投資組合公司提供增量貸款的良好機會。

Despite lower overall deal volume, the direct lending market remains the primary market for sponsors, while the syndicated market has reopened, it is practically only open for select issuers with higher ratings. Ongoing market volatility continues to push borrowers toward the more certain execution of a direct lending deal.

儘管整體交易量較低，但直接貸款市場仍然是發起人的主要市場，而銀團市場已重新開放，但實際上僅對評級較高的精選發行人開放。持續的市場波動繼續推動借款人更確定地執行直接貸款交易。

Page 17 presents an interest rate analysis that provides insight into the positive effect of increasing base rates on NMFC's earnings. As a reminder, the NMFC loan portfolio is 88% floating rate and 12% fixed rate, while our liabilities are 50% fixed rate and 50% floating rate.

第 17 頁提供了利率分析，深入了解提高基本利率對 NMFC 收益的正面影響。提醒一下，NMFC 貸款組合為 88% 浮動利率和 12% 固定利率，而我們的負債為 50% 固定利率和 50% 浮動利率。

Moving on to Page 18. In Q3, we continued our focus on modest deleveraging towards the middle of our 1 to 1.25x debt-to-equity range. As a result, outside of some modest DDTL draws, we actually experienced net repayment activity, as several borrowers repaid due to refinancings or M&A. I'd highlight that two of the repayments were second lien positions, whereby strong performance enables both companies to take out the second lien with incremental first lien.

轉到第 18 頁。第三季度，我們繼續關注適度去槓桿化，以達到 1 至 1.25 倍債務股本範圍的中間水平。因此，除了一些適度的 DDTL 提款外，我們實際上還經歷了淨還款活動，因為一些借款人因再融資或併購而償還了貸款。我要強調的是，其中兩次還款是第二留置權，憑藉強勁的業績，兩家公司都可以透過增量第一留置權來取出第二留置權。

Given the high base rate environment, the impact of minor deleveraging has not impeded our ability to significantly outearn our regular dividend. As I discussed in the market overview, we continue to see compelling opportunities, and post quarter end, have received a few additional repayments that should provide some available capital for deployment into our highest conviction deals.

鑑於高基準利率環境，小幅去槓桿化的影響並沒有妨礙我們大幅超出定期股利的能力。正如我在市場概述中所討論的，我們繼續看到令人信服的機會，並且在季度末後，我們已經收到了一些額外的還款，這應該為部署到我們最有信心的交易中提供一些可用資本。

In addition to the $10.8 million EaglePicher repayment that John mentioned, we also received a post quarter end repayment of our $67.5 million position in PhyNet, a dermatology practice management business.

除了 John 提到的 1,080 萬美元 EaglePicher 還款之外，我們還收到了 PhyNet（皮膚科實踐管理業務）的 6,750 萬美元頭寸的季後還款。

Turning to Page 19. Which show that our asset mix is consistent with prior quarters where about 2/3 of our investments, inclusive of first lien, SLPs and net lease are senior in nature. Approximately 8% of the portfolio is comprised of our equity positions, the largest of which are shown on the right side of the page. As mentioned in prior quarters, we hope to monetize certain of these equity positions in the medium term and rotate those dollars into cash-yielding assets.

轉向第 19 頁。這表明我們的資產組合與前幾季一致，其中約 2/3 的投資（包括第一留置權、SLP 和淨租賃）本質上是優先的。大約 8% 的投資組合由我們的股票頭寸組成，其中最大的頭寸顯示在頁面右側。正如前幾季所提到的，我們希望在中期內將其中某些股權部位貨幣化，並將這些美元轉化為現金收益資產。

Our net lease portfolio, while only 4% of the portfolio, continues to be a strong performer, and we thought it was worth a brief refresher on our strategy. We enter into sale-leaseback transactions for operationally critical properties with creditworthy tenants in our core defensive growth verticals.

我們的淨租賃投資組合雖然只佔投資組合的 4%，但仍然表現強勁，我們認為值得簡要回顧一下我們的策略。我們與核心防禦性成長垂直領域中信譽良好的租戶就營運關鍵物業進行售後回租交易。

We like the longer duration nature of the asset class, the annual rent escalators as well as the downside protection associated with owning the physical real estate. We've generated $41 million of realized gains to date in the strategy and a weighted average cash yield of approximately 11%.

我們喜歡該資產類別的較長期限、年租金自動扶梯以及與擁有實體房地產相關的下行保護。迄今為止，我們已透過該策略實現了 4,100 萬美元的已實現收益，加權平均現金收益率約為 11%。

Page 20 shows the current portfolio at a glance. We own 70 operationally essential and geographically diversified properties, including manufacturing facilities, pharmaceutical manufacturing and packaging facilities and warehouses that are leased to 13 tenants. We have no office or retail exposure.

第 20 頁顯示了目前的投資組合一目了然。我們擁有 70 處營運必需且地理位置多元化的資產，包括製造設施、藥品製造和包裝設施以及租賃給 13 個租戶的倉庫。我們沒有辦公室或零售業務。

Page 21 shows that the average yield of NMFC's portfolio has increased from 11.6% in Q2 to 11.8% for Q3, primarily due to the higher for longer shift in the base rate curve. Generally speaking, spreads remain attractive and support our net investment income target.

第 21 頁顯示，NMFC 投資組合的平均殖利率從第二季的 11.6% 上升至第三季的 11.8%，主要是由於基本利率曲線移動較長而較高。總體而言，利差仍然具有吸引力並支持我們的淨投資收益目標。

Page 22 highlights the scale and credit trends of our underlying borrowers. As you can see, the weighted average EBITDA of our borrowers has increased over the last several quarters to $147 million. While we first and foremost concentrate on how an opportunity maps against our defensive growth criteria and internal new knowledge, we believe that larger borrowers tend to be marginally safer, all else equal.

第 22 頁重點介紹了我們基礎借款人的規模和信用趨勢。正如您所看到的，過去幾季我們借款人的加權平均 EBITDA 已增加至 1.47 億美元。雖然我們首先關注的是機會如何與我們的防禦性成長標準和內部新知識相對應，但我們認為，在其他條件相同的情況下，規模較大的借款人往往會稍微安全一些。

We also show the relevant leverage and interest coverage stats across the portfolio. Portfolio company leverage has been consistent over the last several quarters. Loan-to-values continue to be quite compelling, and the current portfolio has an average loan-to-value of 42%.

我們也顯示了整個投資組合的相關槓桿率和利息覆蓋率統計數據。過去幾個季度，投資組合公司的槓桿率一直保持穩定。貸款價值比仍然相當引人注目，目前投資組合的平均貸款價值比為 42%。

From an interest coverage perspective, we've continued to see modest compression as base rates rise. The weighted average interest coverage on the portfolio declined slightly to 1.5x, from 1.6x last quarter. We expect interest coverage ratios to stabilize, and note that we've seen sponsors continue to proactively support company liquidity and continued M&A activity. This is a great indication that our portfolio consists of companies that are performing well and that are able to attract additional investment and healthy valuations.

從利息覆蓋率的角度來看，隨著基本利率的上升，我們繼續看到適度的壓縮。投資組合的加權平均利息覆蓋率從上季的 1.6 倍小幅下降至 1.5 倍。我們預計利息覆蓋率將穩定，並注意到贊助商繼續積極支持公司流動性和持續的併購活動。這很好地表明我們的投資組合由表現良好、能夠吸引額外投資和健康估值的公司組成。

Finally, as illustrated on Page 23, we have a diversified portfolio across 110 portfolio companies. The top 15 investments inclusive of our SLP funds and net lease account for about 42% of total fair value and represents our highest conviction names.

最後，如第 23 頁所示，我們擁有涵蓋 110 家投資組合公司的多元化投資組合。包括我們的 SLP 基金和淨租賃在內的前 15 項投資約佔總公允價值的 42%，代表了我們最有信心的名字。

I will now cover our financial results. For more details, please refer to our quarterly report on Form 10-Q that was filed yesterday with the SEC.

我現在將介紹我們的財務表現。如欲了解更多詳情，請參閱我們昨天向 SEC 提交的 10-Q 表格季度報告。

As shown on Slide 24, the portfolio had approximately $3.1 billion in investments at fair value on September 30 and total assets of $3.3 billion, with total liabilities of $2 billion, of which total statutory debt outstanding was $1.6 billion, excluding $300 million of drawn SBA guaranteed debentures.

如投影片24 所示，截至9 月30 日，該投資組合以公允價值計算的投資約為31 億美元，總資產為33 億美元，總負債為20 億美元，其中未償法定債務總額為16億美元，不包括提領的3 億美元的SBA擔保債券。

Net asset value of $1.3 billion or $13.06 per share was down slightly compared to the prior quarter. At quarter end, our statutory debt-to-equity ratio was 1.21x to 1 and 1.16x net of available cash on the balance sheet, consistent with the balance sheet deleveraging I mentioned previously.

資產淨值為 13 億美元，即每股 13.06 美元，較上一季略有下降。截至季末，我們的法定債務股本比率為 1.21 倍：1 倍，扣除資產負債表上的可用現金後為 1.16 倍，這與我之前提到的資產負債表去槓桿化一致。

On Slide 25, we show our quarterly income statement results. For the current quarter, we earned total investment income of $94.1 million, a 20% increase over prior year. Total net expenses were approximately $53.7 million, an 18% increase over prior year.

在投影片 25 上，我們展示了季度損益表結果。本季度，我們的總投資收益為 9,410 萬美元，比去年同期成長 20%。淨支出總額約 5,370 萬美元，較上年增加 18%。

As a reminder, the investment adviser has committed to a management fee of 1.25% for the 2023 and '24 calendar years. The investment adviser has also pledged to reduce this incentive fee, if and as needed, during this period to fully support the $0.32 per share regular quarterly dividend. It is important to note that the investment adviser cannot recoup fees previously waived.

提醒一下，投資顧問已承諾 2023 年和 24 年的管理費為 1.25%。投資顧問也承諾在此期間如有需要，將減少激勵費用，以全力支持每股 0.32 美元的定期季度股息。值得注意的是，投資顧問無法收回先前免除的費用。

Our adjusted NII for the quarter was $0.40 per weighted average share, which meaningfully exceeded our Q3 regular dividend of $0.32 per share.

我們本季調整後的 NII 為每股加權平均 0.40 美元，這大大超過了我們第三季每股 0.32 美元的定期股息。

As Slide 26 demonstrates, 99% of our total investment income is recurring this quarter, given the minimal fees earned in Q3. You will see historically that over 90% of our quarterly income is recurring in nature and on average, over 80% of our income is regularly paid in cash. We believe this consistency shows the stability and predictability of our investment income. Importantly, over 99% of our quarterly noncash income is generated from our green rated names.

如投影片 26 所示，考慮到第三季賺取的費用最低，本季我們總投資收入的 99% 是經常性的。從歷史上看，我們超過 90% 的季度收入是經常性收入，平均而言，超過 80% 的收入定期以現金支付。我們相信這種一致性反映了我們投資收益的穩定性和可預測性。重要的是，我們超過 99% 的季度非現金收入來自我們的綠色評級名稱。

Turning to Slide 27. The red line shows the coverage of our regular dividend. This quarter adjusted NII exceeded our Q3 regular dividend by $0.08 per share. For Q4 2023, our Board of Directors has again declared a regular dividend of $0.32 per share as well as a supplemental dividend of $0.04 per share.

轉向幻燈片 27。紅線顯示了我們定期股息的覆蓋範圍。本季調整後的 NII 超出了我們第三季定期股息每股 0.08 美元。對於 2023 年第四季度，我們的董事會再次宣布派發每股 0.32 美元的定期股息以及每股 0.04 美元的補充股息。

On Slide 28, we highlight our various financing sources and diversified leverage profile. Taking into account SBA guaranteed debentures, we had $2.2 billion of total borrowing capacity at quarter end, with $313 million available on our revolving lines subject to borrowing base limitations. We have a valuable mix of fixed and floating rate debt, and the 50% of fixed rate debt continues to be an earnings tailwind.

在投影片 28 中，我們重點介紹了我們的各種融資來源和多元化的槓桿狀況。考慮到 SBA 擔保債券，截至季末我們的總借貸能力為 22 億美元，其中受借貸基礎限制的循環額度為 3.13 億美元。我們擁有有價值的固定利率和浮動利率債務組合，其中 50% 的固定利率債務仍然是獲利的推動力。

As a reminder, covenants under both of our Wells Fargo and Deutsche Bank credit facilities are generally tied to the operating performance of the underlying businesses that we lend to, rather than the marks of our investments at any given time, which we think is particularly important during more volatile times.

提醒一下，我們的富國銀行和德意志銀行信貸安排下的契約通常與我們貸款的基礎企業的經營業績掛鉤，而不是與我們在任何特定時間的投資標誌掛鉤，我們認為這一點特別重要在更加動蕩的時期。

Finally, on Slide 29, we show our leverage maturity schedule. As we've diversified our debt issuance, we've been successful at laddering our maturities to manage liquidity. Post quarter end, we have successfully amended both of our Wells Fargo and Deutsche Bank credit facilities to extend maturities to 2028 and 2027, respectively.

最後，在投影片 29 上，我們展示了我們的槓桿到期時間表。隨著我們的債務發行多元化，我們成功地提高了債務期限以管理流動性。季度末後，我們成功修改了富國銀行和德意志銀行的信貸安排，分別將期限延長至 2028 年和 2027 年。

We additionally upsized and extended our management company revolver maturity to 2027. Pro forma for that, over 60% of our debt matures in or after 2027. Our multiple investment-grade credit ratings provide us access to various unsecured debt markets that we continue to explore to further ladder our maturities in the most cost-efficient manner.

我們還擴大了管理公司的循環期限並將其期限延長至2027 年。預計，我們超過60% 的債務將在2027 年或之後到期。我們的多個投資級信用評級使我們能夠進入我們繼續探索的各種無擔保債務市場以最具成本效益的方式進一步提升我們的成熟度。

With that, I would like to turn the call back over to John.

有了這個，我想把電話轉回給約翰。

Thank you, Laura. As we look out over the balance of 2023, we remain confident in the quality of our investment portfolio, and believe we are on track to continue to deliver great risk-adjusted returns for our shareholders.

謝謝你，勞拉。展望 2023 年，我們對投資組合的品質仍然充滿信心，並相信我們有望繼續為股東帶來巨大的風險調整回報。

We once again thank you for your support and look forward to maintaining an open and transparent dialogue with all of our stakeholders.

我們再次感謝您的支持，並期待與所有利害關係人保持開放、透明的對話。

I will now turn things back to the operator to begin Q&A. Operator?

我現在將把事情交還給操作員以開始問答。操作員？

(Operator Instructions) Our first question comes from Finian O'Shea from Wells Fargo.

（操作員說明）我們的第一個問題來自富國銀行的 Finian O'Shea。

Can you expand on the adviser revolver upsize post quarter? And how might that play into the remaking of your capital structure if applicable.

您能否在季度後擴大顧問左輪手槍的規模？如果適用的話，這將如何影響你的資本結構的重塑。

Sure. Yes. So post quarter end, we upsized our management company revolver from $50 million to $100 million and also extended maturity 3 years to December '27 from December '24. And it still remains a relatively small portion of our overall liability stack, but we do think it's an important signal from just the commitment from the investment adviser, but also just generally help support liquidity.

當然。是的。因此，在季度末後，我們將管理公司的左輪手槍規模從 5,000 萬美元擴大到 1 億美元，並將到期日從 24 年 12 月延長到 27 年 12 月。它仍然是我們整體負債中相對較小的一部分，但我們確實認為這是投資顧問承諾的重要訊號，而且通常也有助於支持流動性。

We've historically not ever drawn on this facility. But again, it's good to have as just incremental liquidity. And it was just part of, I would say, a series of things that we did on the liability side post quarter end to try to just push out maturities, which continues to be a big focus for us.

我們歷史上從未利用過該設施。但同樣，擁有增量流動性也是好事。我想說，這只是我們在季度末後在負債方面所做的一系列事情的一部分，試圖推遲到期日，這仍然是我們的一大焦點。

Right. That's helpful. And just to drill down and touch more, as you pointed out, you don't really use it. So does the upsize indicate that you might use it? Or is it more of a show of support to -- for your other lending facilities that this is a sort of supplemental liquidity you might need?

正確的。這很有幫助。正如您所指出的，只是為了深入了解並接觸更多內容，您並沒有真正使用它。那麼尺寸增大是否表示您可能會使用它？或者這更多的是對您的其他貸款機構的支持，這是您可能需要的一種補充流動性？

I view this somewhat as a show of force. I mean we have really strong relationships with all of our key providers. And as Laura said, we extended many of those facilities just recently. And as we get bigger and as we're in an uncertain environment, why wouldn't we try to maximize liquidity with all available tools that we have. So as Laura said, we don't expect to use it, but we just really want to show every avenue for liquidity and balance sheet strength that we could and the manager was more than happy to do that.

我認為這在某種程度上是一種武力的展現。我的意思是，我們與所有主要提供者都擁有非常牢固的關係。正如勞拉所說，我們最近剛剛擴建了其中許多設施。隨著我們的規模不斷擴大，並且處於不確定的環境中，為什麼不嘗試利用我們擁有的所有可用工具來最大化流動性？因此，正如勞拉所說，我們不希望使用它，但我們真的想展示我們可以利用的一切流動性和資產負債表實力的途徑，而經理非常樂意這樣做。

Okay. Great. And just a follow-up, you touched on the fee waiver in your commentary. I know that was the last quarter event, the extension, but we've seen more BDCs are going that way to sort of the 1.25% base fee rate. So are your discussions leaning to keep it that way at the end of '24? And if so, why not sort of permanize it so people can, of course, model it with more confidence long term and give you that credit? Just any understanding this is still a private matter more or less, but just color on how you're thinking about it would be helpful.

好的。偉大的。作為後續行動，您在評論中談到了費用減免。我知道那是上個季度的事件，即延期，但我們看到更多的 BDC 正在採取這種方式，以達到 1.25% 的基本費率。那麼你們的討論是否傾向於在 24 年底保持這種狀態？如果是這樣，為什麼不將其永久化，這樣人們當然就可以更有信心地長期建模並給予你這樣的信任呢？任何理解這或多或少仍然是一個私人問題，但只要用顏色表達你的想法就會有所幫助。

Sure. I think I hope -- I think with a lot of investors, we do get credit for being at 1.25%. We've been there for a while. We've extended it 8 quarters. And I think it's fair to say that it is a topic of discussion. But when I think about our base management fee, I know there's been some activity on base management fees around the industry. I think we're still top quartile when you look at the base management fee. So we do feel good about where we're at, where we're at. We do have a track record of being shareholder friendly. We've been at 1.25% for a while. That said, we're always going to maintain dialogue with our adviser and our Board just around that fee and other aspects to our management agreement.

當然。我想我希望——我認為對於許多投資者來說，我們確實因 1.25% 的利率而受到讚譽。我們已經在那裡待了一段時間了。我們已將其延長了 8 個季度。我認為可以公平地說這是一個討論的話題。但當我想到我們的基本管理費時，我知道業界已經有一些關於基本管理費的活動。我認為，當你考慮基本管理費時，我們仍然處於前四分之一的水平。所以我們確實對自己所處的位置感覺良好。我們確實有對股東友善的記錄。我們維持 1.25% 已經有一段時間了。也就是說，我們始終會就該費用和管理協議的其他方面與我們的顧問和董事會保持對話。

And our next question comes from Bryce Rowe from B. Riley.

我們的下一個問題來自 B. Riley 的 Bryce Rowe。

John. Let's see, I wanted to maybe start on some of the origination activity and how it plays into repayment activity and how it plays into the balance sheet leverage. We talked about this last quarter, but it feels like you're taking a slightly more conservative approach in terms of balance sheet leverage, and we've seen it come down for a couple of quarters in a row now. You just highlighted some repayment activity here subsequent to third quarter. And -- so I guess the question is, do you think we'll see that trend continue in terms of balance sheet leverage kind of working lower? And then as far as the activity for the third quarter, relatively muted origination activity, is that kind of work with this whole discussion around leverage? Or is it more just kind of a view of the macro environment and what you're seeing in terms of investment opportunities?

約翰。讓我們看看，我想也許從一些發起活動開始，以及它如何影響還款活動以及它如何影響資產負債表槓桿。我們在上個季度討論過這個問題，但感覺您在資產負債表槓桿方面採取了稍微保守的方法，而且我們已經看到它已經連續幾個季度下降。您剛剛強調了第三季之後的一些還款活動。而且 - 所以我想問題是，您認為我們會看到資產負債表槓桿率下降的趨勢繼續下去嗎？然後就第三季的活動而言，相對平靜的發起活動，這是否是圍繞槓桿的整個討論的一種工作？或者這只是對宏觀環境以及您所看到的投資機會的看法？

Sure. I'm happy to cover that. So in terms of just the deleveraging and kind of where we are. So we do have -- we continue to have our stated range of 1 to 1.25x is where we're comfortable operating within that range from a leverage perspective. But as we tried to highlight, I think we are focused on trying to get more to the middle of that range, because I think there had been several quarters in a row where we had been at the very high end of that range.

當然。我很高興能介紹這一點。因此，就去槓桿化和我們所處的情況而言。所以我們確實——我們繼續保持我們所規定的 1 至 1.25 倍範圍，從槓桿角度來看，我們在這個範圍內操作是舒適的。但正如我們試圖強調的那樣，我認為我們的重點是努力達到該範圍的中間位置，因為我認為我們已經連續幾個季度處於該範圍的非常高端。

And so just given the macro environment we're in, we thought it made sense to kind of come down a little bit more towards the middle of the range. So that is what is reflected in our Q3 results here. I think it's obviously hard to predict. It does bounce around a little bit depending on kind of repayments that we get. But I think the repayments that we received after quarter end, I think we're comfortable redeploying those proceeds and continuing to operate kind of more in the middle of the leverage range.

因此，考慮到我們所處的宏觀環境，我們認為向區間中間稍微下降一點是有意義的。這就是我們第三季結果所反映的內容。我認為這顯然很難預測。它確實會根據我們獲得的還款類型而有所波動。但我認為，我們在季度末後收到的還款，我認為我們很樂意重新部署這些收益，並繼續在槓桿範圍的中間進行操作。

So in terms of the Q3 originations, they definitely were more muted. As I said, that was intentional. I don't think it's necessarily reflective of the overall market as we have been -- continue to be active and see good opportunities in some other pockets of capital that we have, but we did want to make that conscious decision to get a little bit more conservative from a leverage profile for NMFC.

因此，就第三季的起源而言，他們肯定更加低調。正如我所說，這是故意的。我認為這不一定反映了我們一直以來的整體市場——繼續活躍，並在我們擁有的其他一些資​​本領域看到了良好的機會，但我們確實希望做出有意識的決定，以獲得一點從NMFC 的槓桿情況來看，該槓桿較為保守。

But we -- as I said, kind of in the market commentary, we do continue to see some good opportunities. It's not as fast and furious as it might have been a couple of years ago, but we are still seeing some. And so I do think we'll be able to redeploy some of those repayments that we received post quarter end and some attractive opportunities.

但正如我所說，在市場評論中，我們確實繼續看到一些好的機會。它不像幾年前那樣快速和激烈，但我們仍然看到一些。因此，我確實認為我們將能夠重新部署我們在季度末收到的部分還款和一些有吸引力的機會。

That's good stuff. And then one more for me. John, I think you highlighted the yellow rated name getting repaid at par, up from a mark around $0.70. And you made the comment that there were prospects for possibly more yellow rated names following that same path. Can you maybe speak to that in a little bit more detail?

那是好東西。然後再給我一張。約翰，我想你強調了黃色評級的名字得到了平價償還，高於 0.70 美元左右的水平。您評論說，可能會有更多黃色評級名稱遵循相同的路徑。您能否更詳細地談談這一點？

Sure. And I don't have any specific yellow names as I'm looking at the list of yellow names. I don't have any specific names that I know we're going to repay. But in general, I wanted to make the point that just because the name is yellow doesn't mean that it can't go back to green. It doesn't mean that it's on a one-way trip to red. And when we look at our yellow names, we do see names on that list that we do have some pretty good optimism around. They're not yet performing the way we want them to perform. But as I mentioned, I think there's a good chance that we could see some good outcomes. So every time a yellow gets repaid, we're very excited and particularly a yellow that we had marked at fair value of $0.70 when that gets through paid at par, even though it was a small position, it does feel very good.

當然。當我查看黃色名稱列表時，我沒有任何特定的黃色名稱。我沒有任何我知道我們將償還的具體名字。但總的來說，我想指出的是，僅僅因為名稱是黃色並不意味著它不能變回綠色。這並不意味著它正在單程走向紅色。當我們查看我們的黃色名字時，我們確實看到名單上的名字我們確實非常樂觀。他們還沒有按照我們希望的方式行事。但正如我所提到的，我認為我們很有可能看到一些好的結果。因此，每次黃牌得到償還時，我們都會非常興奮，尤其是當我們以平價支付時，我們將公允價值標記為 0.70 美元的黃牌，儘管它是一個小頭寸，但感覺確實非常好。

(Operator Instructions) We have a question now from Paul Johnson from KBW.

（操作員說明）我們現在收到來自 KBW 的 Paul Johnson 的問題。

I only have a few. On the mark for Edmentum, this quarter is down $0.13 or so in the slide you guys gave. What drove the margin lower? Was that just current valuations or anything specific of the business?

我只有幾個。就 Edmentum 而言，本季在你們提供的幻燈片中下降了 0.13 美元左右。是什麼導致利潤率下降？這只是目前的估值還是該業務的具體情況？

Yes. No. Edmentum overall continues to be a good performer for us, right? Particularly when you think about just the history of that business. And so I would say the markdown this quarter is a little bit more consistent with just the overall M&A environment that we're in, where valuations, we think, have come down for some of the -- for some industries, and so we were just kind of taking it down in sympathy a little bit with that just as we look to fair value all of our positions every quarter.

是的。不會。總體而言，Edmentum 對我們來說仍然表現良好，對嗎？特別是當你只考慮該業務的歷史時。因此，我想說，本季的降價與我們所處的整體併購環境更加一致，我們認為，某些行業的估值有所下降，所以我們只是出於同情而將其降低一點，就像我們希望每季對所有部位進行公允價值一樣。

Got it. And then just for the SLPs for all the joint ventures, I mean, as far as kind of future quarters go, I know income has been obviously growing from those investments, but is this a good around $8.6 million or so is kind of what I have for the third quarter. Is that a decent run rate from what you think you'd be getting off the JVs? Or is there any sort of onetime stuff in there that you expect it to be slightly lower?

知道了。然後，就所有合資企業的 SLP 而言，我的意思是，就未來幾個季度而言，我知道這些投資的收入明顯在增長，但這是否合適，大約 860 萬美元左右？第三季度有。與您認為從合資企業獲得的運作率相比，這是一個不錯的運作率嗎？或者是否有任何一次性的東西，你預計它會稍微低一些？

Yes. There's no massive onetime items. Obviously, we've seen good benefits from the SLPs in particular, just the benefit of the rising rate environment, given all those underlying assets are floating rate. But as rates start to stabilize, it seems a little bit. I do think that's a reasonably good estimate. All the JV, SLPs and also net lease, they do move around a little bit, just naturally quarter-over-quarter, but I think it's a relatively good indication.

是的。沒有大量的一次性物品。顯然，考慮到所有這些基礎資產都是浮動利率，我們特別看到了 SLP 的良好效益，尤其是利率上升環境的好處。但隨著利率開始穩定，似乎有所下降。我確實認為這是一個相當不錯的估計。所有合資企業、SLP 以及淨租賃，它們確實都有一點變動，自然是季度環比，但我認為這是一個相對較好的跡象。

One thing that's been going on in the LLF JVs is because those are first lien syndicated loan assets. Over the course of the year, we have been able to trade out of lower spread names and buy higher spread names at similar dollar price. And that's been very helpful in driving better yields. So we feel very good about what we're doing in that fund. And we continue to see good opportunities to enhance the yield of the portfolio without taking increased credit risk. So these are our exciting little mini funds within NMFC.

LLF 合資企業中發生的一件事是因為這些是第一留置權銀團貸款資產。在這一年中，我們能夠以類似的美元價格賣出較低價差的名稱併購買較高價差的名稱。這對於提高產量非常有幫助。因此，我們對該基金所做的事情感到非常滿意。我們繼續看到在不增加信用風險的情況下提高投資組合收益率的好機會。這些是 NMFC 內令人興奮的小型迷你基金。

And this concludes our question-and-answer session. I'd like to turn the conference over to John Kline.

我們的問答環節到此結束。我想把會議交給約翰·克萊恩。

Great. Well, thanks, everyone, for joining our third quarter earnings conference call, and we look forward to speaking with you next year. Thank you.

偉大的。好的，謝謝大家參加我們的第三季財報電話會議，我們期待明年與您交談。謝謝。

The conference has now concluded. Thank you so much for attending today's presentation. You may now disconnect.

會議現已結束。非常感謝您參加今天的演講。您現在可以斷開連線。