Pennantpark Investment Corp (PNNT) 2020 Q3 法說會逐字稿

Welcome to the PennantPark Investment Corporation's 3rd Fiscal Quarter 2020 Earnings Conference Call. It is now my pleasure to turn the call over to Mr Art Penn, Chairman and Chief Executive Officer of PennantPark Investment Corporation. Mr Penn, you may begin your conference.

Good morning, everyone. I'd like to welcome you to PennantPark Investment Corporation's 3rd Fiscal Quarter 2020 earnings conference call. I'm joined today by Aviv Efrat, our Chief Financial Officer. Aviv, please start off by disclosing some general conference call information and included discussion about forward-looking statements.

Thank you, Art. I'd like to remind everyone that today's call is being recorded. Please note that this call is the property of PennantPark Investment Corporation and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by using the telephone numbers and PIN provided in our earnings press release as well as on our website. 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 may also include forward-looking statements and projections, and we have that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these projections. We do not undertake to earnings our forward-looking statements unless required by law, to take copies of our latest SEC filings. Please visit our website www.pennantpark.com or call us at 212905 1000, at this time I'd like to turn the call back to our term and Chief Executive Officer Art Penn

Thanks. Aviv, first, we hope that you, your families and those who work with are staying healthy. We are pleased to report that PennantPark continues to operate smoothly and effectively and remains committed to working diligently on behalf of our investors. We're going to spend a few minutes discussing how we fared in the quarter ended June 30. How the portfolio is positioned for upcoming quarters. Our capital structure and liquidity, the value proposition in our stock, the financials and then open it up for Q&A. Despite the challenging economic conditions brought on by the pandemic, we are pleased that we have a couple of key goals this past quarter, we achieved a 7% increase in adjusted NAV as the market stabilized during the quarter we also achieved our goals of reducing leverage and increasing liquidity we are particularly pleased with our announcement of the foundation of PennantPark Senior Loan Fund PSLF, our joint venture with Pantheon, a leading global private markets investor.

The initial $35 million equity investment made by Pantheon is in an existing portfolio of loans at an attractive price of $0.95 on the dollar. They plan to invest an additional $30 million of equity over time into the JV at fair market value. Additionally, our leverage will decrease by about $245 million which bolsters our balance sheet. The equity from Pantheon into our platform. Not only validates the value proposition of our existing portfolio. It also helps scale the PennantPark platform to continue to be a leading lending partner in the market and creates additional capital for future investment into the attractive new vintage of loans that we are seeing in the market.

We believe that our rigorous underwriting process and disciplined approach has successfully positioned us to manage through the challenges ahead. We have an excellent team of talented and dedicated professionals many with decades of experience managing through multiple economic cycles to help ensure the best possible outcome in this type of difficult environment. Although we never predicted a global pandemic as you may know, we have been preparing for an eventual recession for some time prior to the COVID-19 crisis we proactively position the portfolio as defensively as possible over the past several years, we've generally been moving into first lien secured positions higher in the capital structure and into a more diversified portfolio.

The overall portfolio is constructed to withstand market and economic volatility as of June 30 average debt EBITDA on the portfolio was 4.6 times and the average interest coverage ratio with the amount by which cash income exceeds cash interest expense was 2.9 times. We had only one non-accrual on our book at of 86 different names in PNNT this represents only 2% of the portfolio cost and 2.3% at market value. We have largely avoided some of the factors that have been hurt the most by the pandemic such as retail restaurants, health clubs, apparel and airlines of a PNNT does have exposure to oil and gas, which we will discuss later. The portfolio is highly diversified with 86 companies in 30 different industries. Since its inception PNNT has invested $5.9 billion at an average yield of 12%. This compares to an annualized realized loss ratio of about 24 basis points annually.

If we include both realized and unrealized losses, the annualized loss ratio is only 37 basis points annually. This strong track record includes our energy investments are primarily subordinated debt investments made prior to the financial crisis and now some portion of the pandemic. You will recall that in 2007. Just as today PNNT was focused on financing middle-market financial sponsors transactions. Our performance through the global financial crisis and recession was solid prior to the onset of the global financial crisis in September 2008.

We initiated investments which ultimately aggregated $480 million. Our playbook that is similar to our playbook now we focus primarily on the existing portfolio to preserve capital while raising the bar and becoming even more highly selective on new investments. The investments performed well average EBITDA of the underlying portfolio companies fell about 7% to the bottom of the recession, according to the Bloomberg North American High Yield Index. The average high-yield company EBITDA was down about 42% during that timeframe. As a result, we had few defaults and attractive recoveries on that portfolio. The IRR of those underlying investments was 8% even though they were done prior to the financial crisis and recession. We are proud of this downside case track record, we've had only 14 companies going non-accrual and 254 investments since inception over 13 years ago.

Further, we are pleased that even when we've had those non-accruals, we've been able to preserve capital for our shareholders. Now let's turn to the outlook ahead in the coming quarters and how our portfolio is positioned. We've been communicating on a frequent basis with management teams and the private equity sponsor owners of our portfolio companies. As mentioned previously, we are gratified that our historical focus has protected us from some of the worst-hit areas of the economies, such as retail, restaurant, health clubs, apparel and airlines.

We've been pleased with the way our portfolio companies have moved to rapidly just cost and focused on shoring up liquidity, looking forward to the quarter ended September 30 and beyond that remains meaningful uncertainty about the timing and pace of the economic recovery and its impact on the portfolio. Nevertheless, where things stand today or analysis suggest that the vast majority of the companies in our portfolio have sufficient liquidity to pay their interest payments as they come due in the coming quarters. With regard to investments in the energy industry, those investments represent 8.3% of the overall portfolio. There is no material updates since last quarter, the quarter was challenging from a pricing perspective and oil prices were briefly negative but Ram and ETX have spent have suspended all drilling activities and reduced all non-essential capital expenditures expenses in personnel, revenues and cash flow were materially reduced as the entire industries conserving liquidity.

While hedges in place are helpful only partially mitigate the impact of lower oil prices. We are encouraged that with a partial reopening of the economy oil prices seem to have stabilized around $40 in May trend higher in coming months. On the positive side, many of our portfolio companies on the industries such as government services defense, contracting, software communication and cybersecurity, which collectively comprise a substantial portion of the portfolio and less impacted by COVID. Our focus has been on traditional middle market companies where we have benefited from terms covenants structure is much more attractive to lenders and those of larger companies.

These terms enables us to see potential challenges and portfolio companies and be positioned to assist and protect our capital much sooner in the low to no covenant loans, which are typical of larger borrowers. Due to the covenant protection, we have negotiated. We've been able to be at the table quickly with borrowers, as a result we have negotiated increased protections including more equity from sponsors, as well as enhance economics including amendment fees and increased yield.

Inevitably in certain cases there may need to be a broader restructuring of the capital stack or 2 as we have proven over 13 years and business we are depth to dealing with and maximizing value over time in these situations. With regard to our financials, I'll give some summary highlights and Aviv will go into more detail and net investment income of $0.16 per share above our dividend of $0.12 per share. Our GAAP debt to equity ratio, net of cash was 1.5 times.

Regulatory debt to equity ratio, net of cash, which excludes SBIC debt was 1.4 times as many of you know in early 2009 in response to the GFC, we started marketing many of our liabilities, our credit facilities and bonds to market to better align our asset and liability values. This reduces the volatility of NAV in times of market volatility such as we have today. The additional benefit at that time and for the ensuing decade was that a reduced the volatility of our leverage as calculated for regulatory asset coverage test.

Last year the SEC guided us that for the regulatory asset coverage purposes, they will prefer we marked liabilities and cost and not market which we now do for that test. As a result, we will be highlighting both GAAP leverage and regulatory asset coverage leverage with regard to NAV. Our GAAP NAV was $7.82 as of June 30 of approximately 1.4% from the prior quarter, which reflects both the markup of assets, offset by the markup of certain liabilities assuming liabilities were not market to market. Adjusted NAV would have been $7.46 up approximately 7% from the prior quarter.

With regard to leverage, we've been targeting a regulatory debt to equity ratio of 1.1 to 1.5x. Our net regulatory asset coverage ratio of 1.4x was within the range this past quarter. Pro forma for the creation of the PSLFJV with pantheon our net regulatory asset coverage ratio would be 0.9x. We have ample liquidity to fund a revolver draws and were in compliance with all of our facilities at June 30, we have readily available borrowing capacity and cash liquidity to support our commitments.

We have a strong capital structure with diversified funding sources and no near-term maturities, we have $475 million revolving credit facility maturing in 2024 with the syndicated banks, 134 million of SBA debentures maturing in 2026 and 86 million of unsecured notes maturing in 2024, we've been consistent dialog with our lenders and we're thankful for their support.

Regarding our capital structure over the last few quarters, we have discussed 2 initiatives. One of them has been our PSLFJV that is now in place, our other initiative is our application to the SBA, following up on the green light letter, we received for our SBIC III. We are still in process with the SBA spend a minute on our new JV with Pantheon PLSF. Pantheon invested $35 million to take a 28% stake in an SPV that previously existed as a wholly owned subsidiary of PNNT as a result of this JV, the subsidiary and as $245 million credit facility from BMP moved off balance sheet.

The portfolio PSLF is entirely first lien senior secured loans and as a fair value of $356 million, the Pantheon investment value to loans at $94.5 on the dollar, which is a small discount to the June 30 fair value of $96.6 on the dollar. As a result of the transaction is dilutive to NAV by about $2 million or $0.04 per share. The BMP facility moving off balance sheet a par due to the mark-to-market of that credit facility. The additional impact to GAAP NAV is $8 million or $0.12 a share. As a result of the impact on adjusted NAV is $0.04 a share and the impact on GAAP NAV in $0.16 per share. 22.5 million of 35 million invested by Pantheon was invested into the SPV, and the other 0.5 million was paid in cash to PNNT.

The PNNT and Pantheon investments are split into approximately 70% subordinated debt and 30% equity, the subordinated debt has a LIBOR spread of 800 and a LIBOR floor of 1% target leverage for PLSF is 1.5 times debt to equity. With regard to our stock price, we believe that the share price of PNNT does not accurately reflect the long-term value of the company. As stated earlier the average debt to EBITDA of our underlying portfolio as of June 30 was 4.6 times. Translating this into the language value investors had stock price at PNNT today well below NAV and every company defaulted with the shareholders would own a portfolio of companies at a multiple of about 2 times cash flow, even in a recession with potential decline in cash flow value investors should be able to appreciate that attractive low multiple.

We continue to review and we'll look to selectively make new investments. Our focus continues to be on companies and structures that are defensive have reasonable leverage covenant projections and attractive returns. The outlook for new financings is attractive, we believe there middle-market lending is a vintage business is upcoming vintage of loans is likely to be the most attractive we've seen since 2009 to 2012 time period leverage levels are lower equity cushion higher yields are higher and the package of protections including covenants are tighter after joining about 5 years of light of a late-cycle market for middle-market lending it is refreshing to have attractive risk-reward available to us.

Let me now turn the call over to Aviv, our CFO, to take you through the financial results.

Thank you, Art. For the quarter ended June 30. Net investment income totaled $0.16 per share. Looking at some of the expense categories base fees, totaled $4.6 million taxes, general and administrative expenses totaled $1.5 million and interest expense totaled $8 million. Additionally, the incentive fee of $1.9 million was fully waived, net unrealized gain on our investment was $29 million or $0.44 per share. Net unrealized depreciation on our credit facilities was $0.37 per share. Our net investment income exceeded our dividend by $0.04 per share. Consequently, entity per share went from $7 $0.71 to $7.82 per share.

Adjusted in any excluding the mark-to-market of our liabilities was $7.46 per share, up 7% from $6.97 per share, the increase NAV was primarily due to our 2% valuation increase on our investment portfolio. Reminder our entire portfolio credit facility and senior notes are mark to market by on our Board of Directors each quarter using the exit price provided by independent valuation firms securities and exchanges or independent broker-dealer quotes when active markets are available under ASC 820 and 8.25.

In cases where broker-dealer quotes are inactive we use independent valuation firms to value the investments, our overall debt portfolio has a weighted average yield of 8.7% on June 30, our portfolio consisted of 56 companies across 30 different industries. The portfolio was invested 59% in first-lien secured loans 18% in second-lien secured debt 5% in subordinated debt and 18% in preferred and common equity 94% of the portfolio had a floating rate of which 92% has a LIBOR floor. The average LIBOR floor is 1%.

Now let me turn the call back to Art.

Thanks, Aviv. To conclude, we want to reiterate our mission, our goal is to generate attractive risk-adjusted returns through income coupled with long-term preservation of capital, everything is aligned to that goal. We try to find less risky middle-market companies and if high free cash flow conversion we capture that free cash flow primarily in debt instruments and we pay out those contractual cash flows in the form of dividends to our shareholders. In closing, I'd like to thank our extremely talented team of professionals for their commitment and dedication. Thank you all for your time today and for your continued investment and confidence in us.

That concludes our remarks. At this time, I would like to open up the call to questions.

We'll take our first question from Kyle Joseph with Jefferies.

I just wanted to get a sense, are you touched on this a bit here. Obviously investment activity was light in the quarter. But given what you guys done with your balance sheet in the increased investment capacity following the JV, how quickly can we expect the new deal environment to ramp. I know you mentioned that it should be an attractive vintage here you know how quickly should we expect a new rate new origination to recover.

Thanks, Kyle. Look, we're only seeing green shoots right now in terms of kind of new flow, we're encouraged by the new flow that we're saying it's very attractive risk-adjusted returns higher, higher yields lower leverage more equity tighter covenants so encouraged and it will be financed through a combination of our existing portfolio of getting refinance for sure our shipping portfolio is going to turn it over time, as well as Q2 careful growth. Yes, our leverage is, is it a very nice level and we want to be careful and thoughtful about what we do.

So a combination of of picky advantage of repayments, that we will actually have as well as some careful growth into the future.

Yes, sure. And then so balancing that we've got a lot of moving parts in terms of the JV. The rate environment anticipated yield on new investments. So just balancing that, can you give us a sense for, for the outlook on yields for the portfolio kind of near term, medium term and then longer term?

Sure. It's a great question in of course seeing yields on new issues up maybe 100 to 150 in some case, up 200 basis points from where they were and just 5 or 6 months ago. Importantly with all of that is the credit and the underlying credit we think is, is more conservative and has better capital preservation attribute. So, a typical down the middle of the fairway deal today. We think it's probably levered 4 to 4.5 times debt to EBITDA and generating in our 600 or 700 kind of kind of LIBOR spread.

6 months ago there might have been 5 to 5.5 times debt to EBITDA with a LIBOR spread of 5% to 5.5% over LIBOR. So the overall package is very attractive today, in addition to having even tighter covenant. Our book is always going to be below 5 times we specifically wanted to keep it below 5 times. But this vintage will be very attractive risk-adjusted returns.

And we'll take our next question from Robert Dodd with Raymond James.

So some questions that relates to the JV, and congratulations on that structure. I mean to the point in the prepared remarks, obviously everything in that JV is going to be first lien that does mean that the pro forma information that JV, the mix of by asset type no industry etcetera on balance sheet is going to skew much more towards much further away from first lien when you had that shifting. So can you give us any color on how you're going to view that approach to the market about whether when they you offsets on first lien are total growth as almost consolidating the the JV portfolio in terms of how you think of the currency mix in the portfolio or is the intent to just look at the maybe taking up the firstly mix on balance sheet come from where it's going to stand pro forma. So the JV format.

Yes. Yes. So to a couple of a couple of comments and now, Robert, and thank you. First, we're only selling a minority position 28% of that first-lien portfolio panting I wanted to invest more and that's why we took the 35 million today and they wanted invest potentially up to $30 million in the future. So we only wanted to sell a minority piece of that of that portfolio which we think is a really good portfolio in that portfolio in and of itself could and should grow over time and then you talk about what's our balance sheet also has been mostly pivoting towards first lien in the last couple of years and that's what we're going to continue to do by and large, not to say that if there is a fantastic second lien deal that's compelling. We're always thinking about that, but generally, we're looking for capital preservation. First and foremost, we do have equity has a chunk of our portfolio that over time, we want to exit kind of the pandemic probably push those plans back a year, but we still have some equity that we think is very promising and should happen here over the coming year or 2.

And until we exit those equity investments. I think we're going to stay pretty cautious and conservative for the rest of PNNT and then as we exit goes over time we can assess and see where the market is and see what the proforma mix of investments should be, but I think we're focused on capital preservation and over the next year or 2 exiting this equity investments. It's good price as possible.

Got it. And on the topic, if that obviously you gave some color in the prepared remarks with them ETX suspended drilling, but obviously oil handsome rebounded somewhat stabilized at 40 I think 45 this week even what would the oil forward curve, how we were not going to need to look like. We use those to kind of reactivate drilling programs at Ram and ETX and what would the cap would they have sufficient capital if those will be activated obviously has from Macquarie. So, any color you can give all.

Yes. On a quarter, we're hunkered down there. I think it's starting $55 or $60 then starts to be a more realistic debate. And I think to be quite frank, we would look to outside capital or look to exit those investments if and when oil gets back up to those to those levels. What we know. I think at this point, we're extending the option as long as we can and we think we can extend for quite a while and should oil hit those levels and we hope it doesn't at some point that might be a good time to have those investments.

Got it. And if I can, one more. I don't know if you said the vast majority companies have the liquidity to pay interest. Yes. Going forward, et cetera. Obviously, vast majority is in. So those -- why you've done an evaluation and in the not vast majority bucket, how are the discussions going with them? I mean them more or sponsors of what I mean what's being done for those where the liquidity situation is still perhaps, there is a gap.

Yes. It's really thankfully and kind of if you were to ask me rather 3 months ago, if we do every day talking about up NAV for the quarter and very minor nonaccruals I would have been Sharpton astounded and thrilled and we're here today. And quite frankly BNL or touch whether we're in really good shape. I mean certainly, there are going to be some companies, mostly related to travel-related things where there is going to be some issues and it's kind of case by case with the sponsors, where they put equity in or not, you know how we amend things how we get paid to do that.

Do we roll up our sleeves and take control? In certain cases, that may make the most sense. So case by case, it's mainly by name. And what the outlook for the particular name is what the sponsor is willing to do or willing to do, but it's a very, very small thankfully very small piece of the portfolio at this point. Now the disclaimer is we're not out of the woods yet. Right. So you know we have to see how the fall goes and what the public health issues are and what the vaccine issues are and all that, those kind of, if you say we're kind of midway through the pandemic, or what do you think we're halfway through in a quarter. The way through mostly through it, we feel we're feeling pretty good about this portfolio.

We'll take our next question from Paul Johnson with Keefe, Bruyette & Woods.

I had another question on the JV. I'm just curious how do you plan on structuring the JV. Do you intend on this being solely an equity investment or possibly bifurcating into debt investment along with the equity investment?

Yes. It is a similar to -- good question, Paul. Similar to our joint venture over at PFLT with Kemper as JV will be split it will be about 70% subordinated debt L plus 800 and below 1% and the rest will be equity.

Okay. Great. And then I guess also on the JV, I realize it probably have definitely this went into your thought process, but just given the higher equity allocation in your portfolio on the balance sheet. I think it's 18% or so fair value with the formation of the JV do you expect to have any kind of issue with the limitation in your non-qualified asset bucket?

No, it's a good question, where we've got plenty of plenty of dry powder in that 30% bucket, the amount of foreign investments has committed us so not really an issue and we look, we think the market will see through this JV likely feature all the other JVs and understand the underlying assets are first-lien debt. But in terms of the qualifying asset issue few problems.

Okay. And then a little bit is on the loan modifications waivers you've been dealing with that the quarter. Just curious if that's sort of activity has moderated quite a bit so far, or if you just kind of seeing kind of same level of requests coming in at this time.

Yes. That's yes. We have seen less over time. We -- in essence, it was more activity going on in that area kind of in April, we're still seeing some and we're still have some of the work or a process on, but the momentum or the pacing of those amendment request has certainly slowed down now as time has gone on

And the last question, it has to do I mean you mentioned just the outlook for potential investments improving potentially entering into a time where there's going to be some very attractive investments. I mean as far as how you evaluate the current portfolio. I'm curious how do you balance or how do you consider an investment like Ram Energy if, even if the environment today just stayed static and nothing changed obviously still challenged. I mean do you ever consider the maybe possibly the opportunity cost of holding on to an investment that large versus what could be a pretty attractive areas for new capital to be deployed and I say that I also realize it's much easier said than done to make a sale on some of these types of asset especially in this environment.

Yes, it's a great question. We think you down all the time and we, of course, always way the existing portfolio against new loans and we look forward today where we can get an attractive exit opportunity [in our end]. Okay.

We'll take our next question from Rick Shane with JPMorgan.

Okay. If you exited what we talked about on these calls.

I'm going to talk about the JV. I mean that's the topic today. Yes. But you're right, I guess I will talk about it.

Yes. I appreciate that. All it's actually a bit for me because I did want to talk about the JV a little bit. You've had a couple of questions on the JV. You had some questions on sort of reentering the origination market. I'm assuming given where the leverage is on the overall portfolio right now, the incremental deployment of capital will be through the JV, is that likely to be in hand.

I think it's going to be -- it could be both. I mean the JV and it's about on balance sheet PNNT both add-on investments. So, and then I think both the JV and the balance sheet will have repayments. We are starting to see some repayments happening, and of course, it is an opportunity to upscale yield on the portfolio.

Got it. That actually leads to my final question, given the actual both market structure right now and physical structure in terms of being able to do things like due diligence. Do you think that your origination channels will change a little bit, would you do more clubs syndicated transactions, simply because there are advantages to collaborative due diligence.

You're putting a couple of different issues together which is a good question. I haven't thought about it that way, you're putting in the challenge of due diligence question along with kind of diversification club type things, I mean, look, I think I hadn't really thought about putting the 2 together, but it's an interesting way to think about things, certainly due diligence is more challenging today certainly though if we want to get deals done we will figure it out. How much can we can do on desktop, how much we or our people who we work with can actually do physical due diligence, how much were relying on independent 3rd parties like the sponsor or consultants. You can do everything, almost everything without actually going kicking the tires.

The question is what do you do ultimately to kick the tires and how best to do that. So I don't think and I think we can get deals done. I think we can get your has done I think we will we are figuring out how to how to not physically send for people to a factory somewhere. And so I think deals will get done in terms of the bite sizes, you're kind of question is I think alluding to the fact that because you can do full due diligence everyone wants to be more diversified, because you just don't want to take a big, big by the Thomson then have a big, big hiccup. I don't know if that's really what you're thinking about. But I think the market of at least on diversification right now.

I mean some of the folks who we partner with have come to us and said, we really do want to just have more diversified portfolio. Just as a matter of risk management and managing our portfolios. I think that's happened naturally you're regardless of the due diligence question. I don't know if I answered your question. Rick. But if I haven't please, please, please to drill in a little bit.

You absolutely did it. It is interesting and it's fascinating. How every business is evolving at this point. So I appreciate you taking the question.

We'll take our next question from [Aaron Cattle], private investor.

Hi, can you hear me okay?

Yes.

So I have one question, one follow-up on the first is, I would assume that many of your portfolio companies had taken advantage of the payment protection program and other statements in the company. With all just skip can you hear me now?

Yes, I can hear you.

The question is just do you have a sense of how much of your portfolio has benefited from the PPP or other short-term stimulus plans and thus how will they manage through that should those should this program to roll off, which could be quite imminent in this fall or later this year.

Yes. Thank you. That's a good question. We say a handful of our companies did participate Triple-T, typically, there would be companies that already in an SBIC or they were already in an SBA program. So they were already kind of part of the SBA world based on what we've seen those funds. Certainly been accretive and helpful and enhance the liquidity. That said, since most of our companies have been our professional management teams are sponsorship looking through the Triple-T, they're looking at the long-term trends and they're doing what they need to do to bolster the liquidity, either through cost cuts or managing our working capital or capital expenditure programs. Capital expenditure programs very tightly.

So as I said in the prepared remarks, we're feeling pretty good about the liquidity of the underlying portfolio. It will be included in some portion of those names. So I just to use that as a segue, we haven't yet seen any Fed Main Street if it means program I think is now up and running, we haven't yet seen it impact our portfolio. But we're, our ears to the ground and we're going to see what happens with that program.

Great. A quick follow-up and beer stock as you talk about new purpose remarks. It's a the one could argue that rather than investing in any new deal at maybe 8-9% will you could be investing stock purchase of stock in that capacity.

Yes. If you were to look at it here you're cutting out. I think you're asking about stock buyback. That's my influence. You're asking about stock buyback at something that we look at all the time, we've done 2 stock buybacks in our history of PennantPark one we've completed about a year ago. So we bought back about 60 million of stock over the course of time today the market cap. That's a relatively large amount of capital relative to these are market cap of the company. It's something we think about all the time in a world where we are focused right now mostly on liquidity making sure that we can get through the pandemic. I think we've kind of put-put that on hold for a while or at least the next few quarters until we get through the pandemic and then we'll pick it up again.

We just want to make sure we have excess liquidity to deal with. Most importantly, our existing portfolio companies get through the pandemic, and that's why my comments about kind of a new originations are somewhat muted. We just really want to. I want to preserve capital at this point preserve liquidity. Certainly, we do want to look at new deals but we are very focused on getting through the pandemic in this good fashion as possible. So I don't know if that answered your question, your question was a little unclear. It looks like you're, you may be on the cell phone but Aaron anything else or did I answer your question?

No. Sorry, sorry for the communication to come and I'm on a cellphone time.

Thank you.

It appears there are no further questions at this time. Mr Penn, I'd like to turn the conference back to you for any additional or closing remarks.

I want to thank everybody for on the call today reminder that the next time we are doing a call. It is our 10-K. So will be a couple of weeks later than normal probably mid-November. Look forward to speaking to people then if don't want to jump between now and then we'll be happy to talk to you. Thank you very much for your time today.

This concludes today's call. Thank you for your participation. You may now disconnect.