Prospect Capital Corp (PSEC) 2024 Q2 法說會逐字稿

And good day, and welcome to the Prospect Capital second quarter fiscal year 2024 earnings release and conference call. (Operator Instructions) Please note this event is being recorded. I would now like to hand the conference over to Mr. John Barry, Chairman and CEO. Please go ahead.

美好的一天，歡迎來到 Prospect Capital 2024 財年第二季收益發布和電話會議。（操作員說明）請注意此事件正在被記錄。我現在將會議交給董事長兼執行長約翰·巴里先生。請繼續。

Thank you, Betsy. Joining me on the call today are Grier Eliasek, our President and Chief Operating Officer, and Kristin Van Dask, our Chief Financial Officer. Kristin?

謝謝你，貝特西。今天與我一起參加電話會議的有我們的總裁兼營運長 Grier Eliasek 和我們的財務長 Kristin Van Dask。克里斯汀？

Thank you, John. This call contains forward-looking statements that are intended to be subject to Safe Harbor protection. Future results are highly likely to vary materially. We do not undertake to update our forward-looking statements for additional disclosure, see our earnings press release and 10-Q filed previously and available on our website prospect Street.com. Now I'll turn the call back over to John.

謝謝你，約翰。本次電話會議包含旨在受到安全港保護的前瞻性陳述。未來的結果很可能會發生重大變化。我們不承諾更新我們的前瞻性聲明以進行額外揭露，請參閱我們先前提交的收益新聞稿和 10-Q，並可在我們的網站 Prospect Street.com 上取得。現在我將把電話轉回給約翰。

Thank you, Kristin. In the December quarter, our net investment income or and I was $96.9 million or $0.24 per common share. Our NAV stood at $3.68 billion or $8.92 per common share, down $0.33 from the prior quarter. Since inception in 24, prospect has invested $20.6 billion across 420 investments exiting 287 of those in there in the December quarter, our net debt to equity ratio was 46.2%, down 27.9 percentage points from March 2020, down 0.3 percentage points from the September 2023 quarter as we continue to run and under-leveraged balance sheet, which has been the case for us over multiple quarters and year, we have no plans to increase our actual drawn debt leverage beyond our historical target of 0.7 to 0.85 debt to equity, and we are currently significantly below such range.

謝謝你，克里斯汀。在 12 月季度，我們的淨投資收入為 9,690 萬美元，即每股普通股 0.24 美元。我們的資產淨值為 36.8 億美元，即每股普通股 8.92 美元，比上一季下降 0.33 美元。自24 年成立以來，Prospect 已在420 項投資中投資了206 億美元，在12 月季度退出了其中287 項投資，我們的淨債務股本比率為46.2%，較2020 年3 月下降27.9 個百分點，較2023 年9 月下降0.3 個百分點由於我們繼續運行資產負債表槓桿率不足的情況（我們在多個季度和年度中一直如此），我們沒有計劃將實際提取的債務槓桿率提高到超過債務股本比0.7 至0.85 的歷史目標，而我們目前遠低於這個範圍。

We are announcing monthly cash common shareholder distributions of $0.06 per share for each of February, March and April these three months represented 78 79 and 80th consecutive $0.06 per share cash distributions. Consistent with past practice, we plan on announcing our next share of shareholder distributions in May since our IPO nearly 20 years ago through our April two oh to 4 distribution. At the current share count, we will have distributed $20.76 per common share two original shareholders aggregating approximately $4.2 billion in cumulative distribution to all common shareholders.

我們宣布 2 月、3 月和 4 月的每月普通股東現金分配為每股 0.06 美元，這三個月代表了 78、79 和 80 次連續分配每股 0.06 美元的現金分配。與過去的做法一致，我們計劃在 5 月透過 4 月 2 日至 4 日的分配宣布自近 20 年前首次公開募股以來的下一次股東分配。依照目前的股份數量，我們將向兩名原始股東分配每股普通股 20.76 美元，並向所有普通股股東累積分配的金額總計約為 42 億美元。

Thank you. I will now turn the call over to Grier.

謝謝。我現在將把電話轉給格里爾。

Thank you, John. Our scaled platform with $8.9 billion of assets and undrawn credit at Prospect Capital Corporation continues to deliver solid performance in the current dynamic environment. Our experienced team consists of nearly 150 professionals, which represents one of the largest middle market investment groups in the industry. With our scale, longevity experience and deep bench, we continue to focus on a diversified investment strategy that spans third party private equity sponsor related lending, direct non-sponsor lending, Prospect sponsored operating and financial buyouts, structured credit and real estate yield investing consistent with past cycles. We expect during the next downturn to see an increase in secondary opportunities, coupled with wider spread primary opportunities with a pullback from other investment groups, particularly highly leveraged ones.

謝謝你，約翰。我們在 Prospect Capital Corporation 擁有 89 億美元資產和未提取信貸的規模化平台繼續在當前的動態環境中提供穩健的績效。我們經驗豐富的團隊由近 150 名專業人士組成，代表著業界最大的中間市場投資集團之一。憑藉我們的規模、長期經驗和深厚的基礎，我們繼續專注於多元化投資策略，涵蓋第三方私募股權贊助商相關貸款、直接非贊助商貸款、前景贊助的營運和金融收購、結構性信貸和房地產收益投資與過去的周期。我們預計，在下一次經濟低迷期間，二次投資機會將會增加，同時主要投資機會也會擴大，而其他投資集團（尤其是高槓桿投資集團）也會出現撤退。

Unlike many other groups. We have maintained and continue to maintain significant dry powder and balance sheet flexibility that we expect will enable us to capitalize on such attractive opportunities as they arise.

與許多其他團體不同。我們已經並將繼續保持顯著的乾粉和資產負債表靈活性，我們預計這將使我們能夠利用這些有吸引力的機會。

This diversity of origination approaches allows us to source a broad range and high volume of opportunities then select in a disciplined, bottoms-up manner. The opportunities we deem to be the most attractive on a risk-adjusted basis. Our team typically evaluates thousands of opportunities annually and invests in a disciplined manner and a low single digit percentage of such opportunities. Our non-bank structure gives us the flexibility to invest in multiple levels of the corporate capital stack with a preference for secured lending and senior loans. Consistent with our investment strategy, our secured lending and first lien mix has continued to increase. As of December, our portfolio at fair value comprised 58.7%, first-lien debt, up 1.4% from the prior quarter 15.5%. Second lien debt, down 0.4% from the prior quarter, 7.9% subordinated structured notes with underlying secured first lien collateral down 0.2% from the prior quarter and 17.8%. Unsecured debt and equity investments down 0.8% from the prior quarter, resulting in 82.1% of our investments BEING assets with underlying secured debt benefiting from borrower pledged collateral. That's up 0.8% from the prior quarter.

這種多樣化的發起方法使我們能夠尋找廣泛且大量的機會，然後以嚴格的、自下而上的方式進行選擇。在風險調整的基礎上，我們認為最具吸引力的機會。我們的團隊通常每年評估數千個機會，並以嚴格的方式進行投資，而此類機會的百分比較低。我們的非銀行結構使我們能夠靈活地投資於多個層面的企業資本結構，並優先考慮擔保貸款和優先貸款。與我們的投資策略一致，我們的擔保貸款和第一留置權組合持續增加。截至 12 月，我們以公允價值計算的投資組合包含 58.7% 的第一留置權債務，比上一季的 15.5% 成長 1.4%。第二留置權債務較上季下降 0.4%，帶有基礎擔保第一留置權抵押品的次級結構性票據較上季下降 0.2% 和 7.9%，較上季下降 0.2% 和 17.8%。無擔保債務和股權投資較上一季下降 0.8%，導致我們 82.1% 的投資是具有受益於借款人質押抵押品的基礎擔保債務的資產。比上一季成長 0.8%。

Prospect's approach is one that generates attractive risk-adjusted yields and our performing interest-bearing investments were generating an annualized yield of 12.3% as of December 2023, a decrease of 0.4 percentage points from the prior quarter. Our interest income in the December quarter was 92.3% of total investment income, reflecting a strong recurring revenue profile to our business. We also hold equity positions in certain investments that can act as yield enhancers or capital gains contributors. As those positions generate distributions, we've continued to prioritize senior and secured debt with our originations to protect against downside risk while achieving above market yields through credit selection discipline and a differentiated origination approach. As of December, we held 126 portfolio companies, a decrease of two from the prior quarter, the fair value of 7.6 billion, a decrease of approximately $105 million. We also continued to invest in a diversified fashion across many different portfolio company industries with a preference for avoiding cyclicality and with no significant industry concentration, the largest is 17.8% as of December. Our asset concentration in the energy industry stood at 1.4%, hotel restaurant leisure sector 0.2% and retail industry 0.3%. Non-accruals as a percentage of total assets stood at approximately 0.2% in December, no change from the prior quarter. Weighted average middle market portfolio net leverage was 5.4 times EBITDA, substantially below our reporting peers and our weighted average EBITDA per portfolio company was 110 million. Originations in the December quarter aggregated $171 million. We also received 131 million of repayments, sales and exits as a validation of our capital preservation objective, resulting in net originations of over $40 million as we continue to take a cautious approach toward new credit underwriting given macro economic conditions.

Prospect 的方法能夠產生有吸引力的風險調整收益率，截至 2023 年 12 月，我們的計息投資的年化收益率為 12.3%，比上一季下降 0.4 個百分點。我們 12 月季度的利息收入佔總投資收入的 92.3%，反映出我們業務強勁的經常性收入狀況。我們也持有某些投資的股權，這些投資可以作為收益增強劑或資本利得貢獻者。隨著這些頭寸產生分配，我們繼續在我們的發起中優先考慮優先債務和擔保債務，以防範下行風險，同時透過信貸選擇紀律和差異化發起方法實現高於市場的收益率。截至12月，我們持有126家投資組合公司，較上季減少兩家，公允價值76億美元，減少約1.05億美元。我們也持續以多元化的方式投資於多個不同的投資組合公司產業，傾向避免週期性，且產業集中度不高，截至12月最大為17.8%。我們的資產集中度在能源產業為1.4%，飯店餐飲休閒產業為0.2%，零售業為0.3%。12 月非應計費用佔總資產的百分比約為 0.2%，與上一季相比沒有變化。中間市場投資組合加權平均淨槓桿率 EBITDA 的 5.4 倍，遠低於我們報告的同行，而我們每個投資組合公司的加權平均 EBITDA 為 1.1 億。12 月季度的發起總額為 1.71 億美元。我們也收到了 1.31 億美元的還款、銷售和退出，作為我們資本保值目標的驗證，由於我們在宏觀經濟條件下繼續對新的信貸承銷採取謹慎態度，因此淨起源超過 4000 萬美元。

During the December quarter, our originations comprised 53.8%, middle-market lending, 30.2% real estate, 10.5%, middle market lending and buyouts and 5.5% subordinated structured notes investment. To date, we've deployed significant capital in the real estate arena through our private rate strategy, largely focused on multifamily workforce, stabilized yield acquisitions with attractive in-place and largely fixed rate multi-year financing. To date, on a cumulative basis, we've invested in $3.8 billion in 108 properties, including three triple-net lease, 81 multifamily, eight student housing, 12 self-storage, and four senior living in the current higher financing cost environment, which has recently started to abate a bit. Our new investment focus includes preferred equity structures with significant third party capital support underneath our investment attachment points, NPRC or private rate as real estate properties that have benefited over the last several years from rising rents, showing the inflation hedge nature of this business segment, solid occupancies, high collections, work-from-home tailwinds, high returning value-added renovation programs and attractive financing recapitalizations, resulting in an increase over time and cash yields as a validation of this income growth business alongside our corporate credit businesses, NPRC as of December and not including partially exited deals where we've received back more than our capital invested from distributions. And recapitalizations has exited completely 46 properties at an average net realized IRR to NPRC of 25.2% average realized net multiples of invested capital of 2.5 times and an objective to redeploy capital into new property acquisitions, including with repeat property manager relationships, our structured credit business has delivered attractive cash yields, demonstrating the benefits of pursuing majority stakes, working with world-class management teams, providing strong collateral underwriting through primary issuance and focusing on favorable risk-adjusted opportunities as of December, we held 601 million across 33 nonrecourse subordinated structured notes investments. We focused on amortizing our subordinated structured notes portfolio while electing to grow our other investment strategies. As a result, the structured notes portfolio now comprises less than 8% of our investment portfolio and is expected to decrease over time. These underlying structured credit portfolios comprised nearly 1,600 loans in the December 2023 quarter. This portfolio generated a GAAP yield of 5.8%, down 4.9% from the prior quarter and a cash yield of 20%, up 2.5% from the prior quarter. The difference represents amortization of our cost basis, the returns capital to prospect that we intend on utilizing for other investment strategies and corporate purposes. As of December, our current subordinated structured credit portfolio has generated 1.45 billion in cumulative cash distributions to us representing over 118% of our original investment through December. We've also exited 15 investments with an average realized IRR of 12% and cash-on-cash multiple of 1.3 times so far in the current March quarter across our overall business, we've booked $63 million in originations and experienced 22 million of repayments for approximately $41 million of net originations. Our originations have consisted of 62.3% middle-market lending and 37.7% real estate.

在 12 月季度，我們的原始投資包括 53.8% 的中間市場貸款、30.2% 的房地產、10.5% 的中間市場貸款和收購以及 5.5% 的次級結構性票據投資。迄今為止，我們已透過私人利率策略在房地產領域部署了大量資本，主要關注多戶勞動力，透過有吸引力的就地和基本上固定利率的多年期融資來穩定收益收購。迄今為止，在當前較高的融資成本環境下，我們已累計投資38 億美元，投資於108 處房產，其中包括3 處三重淨租賃房產、81 處多戶住宅、8 處學生住房、12 處自助儲藏室和4 處老年住宅。最近開始減弱。我們新的投資重點包括在我們的投資附著點、NPRC 或私人利率下擁有重要第三方資本支持的優先股權結構，這些房地產在過去幾年中受益於租金上漲，顯示了該業務部門的通膨對沖性質，穩定的入住率、高收款率、在家工作的順風、高回報的增值改造計劃和有吸引力的融資資本重組，導致隨著時間的推移和現金收益率的增加，作為這一收入增長業務與我們的企業信貸業務、NPRC 的驗證12 月份的數據，不包括部分退出的交易，在這些交易中我們收到的回報超過了我們從分配中投資的資本。資本重組已完全退出46 處房產，對NPRC 的平均已實現淨內部收益率為25.2%，投資資本的平均已實現淨淨倍數為2.5 倍，目標是將資本重新部署到新的房產收購中，包括與重複的房產經理關係、我們的結構性信貸業務已經實現了有吸引力的現金收益率，展示了追求多數股權、與世界一流的管理團隊合作、透過一級發行提供強大的抵押品承銷以及專注於有利的風險調整機會的好處。截至12 月，我們在33 個無追索權次級結構債券中持有6.01 億美元筆記投資。我們專注於攤銷我們的次級結構性票據投資組合，同時選擇發展我們的其他投資策略。因此，結構性票據投資組合目前占我們投資組合的比例不到 8%，並且預計會隨著時間的推移而減少。這些基礎結構性信貸投資組合在 2023 年 12 月季度包含近 1,600 筆貸款。該投資組合的 GAAP 收益率為 5.8%，較上一季下降 4.9%，現金收益率為 20%，較上一季上升 2.5%。差異代表我們的成本基礎的攤銷，即我們打算用於其他投資策略和公司目的的資本回報。截至 12 月，我們目前的次級結構性信貸投資組合已累計向我們分配了 14.5 億現金，占我們截至 12 月原始投資的 118% 以上。到目前為止，我們還退出了15 項投資，平均已實現IRR 為12%，現金現金倍數為1.3 倍，在當前的3 月份季度，我們的整體業務已預訂6,300 萬美元的初始資金，並經歷了2,200 萬美元的投資。償還約 4,100 萬美元的淨發起資金。我們的起源包括 62.3% 的中間市場貸款和 37.7% 的房地產。

Thank you. I'll now turn the call over to Kristin. Kristin?

謝謝。我現在將把電話轉給克里斯汀。克里斯汀？

Thanks, Grier. We believe our prudent leverage, diversified access to matchbook funding substantial majority of unencumbered assets weighting toward unsecured fixed-rate debt, avoidance of unfunded asset commitments and lack of near-term maturities demonstrate both balance sheet strength as well as substantial liquidity to capitalize on attractive opportunities. Our company has locked in a ladder of liabilities extending 20 years into the future. Our total unfunded eligible commitments to portfolio companies totals approximately $28 million, representing approximately 0.4% of our assets. Our combined balance sheet, cash and undrawn revolving credit facility commitments currently stand at approximately 1.02 billion. We're a leader and innovator in our marketplace. We were the first company in our industry to issue a convertible bond develop a notes program issue under a bond and equity ATM, acquire another BDC issuer listed perpetual preferred undertake a preferred program and many other lists of firsts, Shareholders and unsecured creditors alike should appreciate the thoughtful approach differentiated in our industry, which we have taken toward construction of the right-hand side of our balance sheet. As of December 2023, we held approximately 4.7 billion of our assets as unencumbered assets representing approximately 60% of our portfolio. The remaining assets are pledged to Prospect Capital Funding and non-recourse SPV.

謝謝，格里爾。我們相信，我們審慎的槓桿率、多元化的火柴帳融資管道（絕大多數無擔保固定利率債務的無負擔資產）、避免無資金支持的資產承諾以及缺乏短期到期日，都表明了資產負債表的實力以及可利用有吸引力的流動性的充足性。機會。我們公司已經鎖定了未來 20 年的負債階梯。我們對投資組合公司的無資金資助合格承諾總額約為 2,800 萬美元，約占我們資產的 0.4%。我們的合併資產負債表、現金和未提取的循環信貸額度承諾目前約為 10.2 億美元。我們是市場的領導者和創新者。我們是業內第一家發行可轉換債券的公司，在債券和股票ATM 下開發票據計劃，收購另一家BDC 發行人，上市永久優先股，實施優先計劃以及許多其他第一，股東和無擔保債權人都應該讚賞我們在建立資產負債表右側時所採取的深思熟慮的方法在我們的行業中與眾不同。截至 2023 年 12 月，我們持有約 47 億美元的資產作為未支配資產，約占我們投資組合的 60%。剩餘資產質押給 Prospect Capital Funding 和無追索權 SPV。

We currently have 1.95 billion of commitments from 53 banks, demonstrating strong support of our company from the lender community with the diversity unmatched by any other company in our industry shortly after the well-publicized bank failures in March 2023, we added two new banks and upsized an existing bank within our credit facility. The facility revolves until September 2026, followed by a year of amortization with interest distributions continuing to be allowed to us.

目前，我們有來自53 家銀行的19.5 億美元承諾，這表明我們公司得到了貸款機構的大力支持，其多樣性是我們行業中任何其他公司都無法比擬的。在2023 年3 月廣為人知的銀行倒閉事件發生後不久，我們增加了兩家新銀行和在我們的信貸設施內擴大現有銀行的規模。該貸款期限至 2026 年 9 月，隨後一年的攤銷，我們繼續允許進行利息分配。

Our drawn pricing is now so far, plus 2.05% outside of our revolver and benefiting from our unencumbered assets we've issued at Prospect Capital Corporation, including in the past few years, multiple types of investment grade unsecured debt, including convertible bonds, institutional bonds, baby bonds and program notes. All of these types of unsecured debt have no financial covenants, no asset restrictions and no cross defaults with our revolver. We enjoy an investment grade triple B minus rating from S&P, an investment grade B double-A three rating from Moody's, an investment grade triple B minus rating from Kroll, an investment grade triple B rating from Egan Jones and an investment grade triple B low rating from DBRS. We currently have five investment grade ratings more than any other or any other company in our industry. All of these ratings have stable outlooks. We've now tapped the unsecured term debt market on multiple occasions to ladder our maturities and to extend our liability duration out 28 years. Our debt maturities is extended through 2052 With so many banks and debt investors across so many unsecured and non-recourse debt tranches. We substantially reduced our counterparty risk over the years in the December 2023 quarter. We have continued utilizing our revolving credit and have continued with our weekly programmatic Internet issuance on an efficient funding basis. To date, we have raised over $1.7 billion in aggregate issuance of our perpetual preferred stock across our preferred programs and listed preferred, including 66.5 million in the December 2023 quarter and 11.7 million to date in the March 2024 quarter. During the December 2023 quarter, we commenced a tender offer to purchase for cash. Any and all of 5,882,351 shares. I've outstanding 5.35% perpetual preferred stock, resulting in 631,194 shares validly tendered at a price of $15.88 plus accrued and unpaid dividends for a total consideration of $16 per share. We have four separate unsecured debt issuances, aggregating $1.2 billion, not including our program notes with maturities extending through October 2028 as of December 2023, we had $391 million of program notes outstanding with staggered maturities through March 2052 at December 31st, 2023. Our weighted average cost of unsecured debt financing was 4.15%, an increase of 0.07% from September 30th, 2023, and a decrease of 0.18% from December 31, 2022.

到目前為止，我們的提取定價是在我們的循環之外加上2.05%，並受益於我們在Prospect Capital Corporation 發行的無抵押資產，包括過去幾年的多種類型的投資級無擔保債務，包括可轉換債券、機構債券債券、嬰兒債券和計畫說明。所有這些類型的無擔保債務都沒有財務契約，沒有資產限制，也沒有與我們的左輪手槍交叉違約。我們享有標準普爾投資級 Triple B 減去評級、穆迪投資級 B 雙 A 三級評級、Kroll 投資級 Triple B 減去評級、Egan Jones 投資級 Triple B 評級以及投資級 Triple B low DBRS 的評級。目前，我們的投資等級評級比業內任何其他公司多五個。所有這些評級的展望均為穩定。我們現在已多次利用無擔保定期債務市場來提高我們的到期日並將我們的負債期限延長至 28 年。我們的債務期限延長至 2052 年，有如此多的銀行和債務投資者參與如此多的無擔保和無追索權債務。多年來，我們在 2023 年 12 月季度大幅降低了交易對手風險。我們繼續利用我們的循環信貸，並繼續在高效的融資基礎上每週進行程序性互聯網發行。迄今為止，我們透過優先計畫和上市優先股發行的永久優先股總額已超過 17 億美元，其中 2023 年 12 月季度的 6,650 萬股和 2024 年 3 月季度迄今為止的 1,170 萬股。在 2023 年 12 月季度，我們啟動了現金收購要約。任何及全部 5,882,351 股。我已發行 5.35% 的永久優先股，有效投標的股票數量為 631,194 股，價格為 15.88 美元，加上應計和未支付的股息，總對價為每股 16 美元。我們有四次單獨的無擔保債務發行，總計12 億美元，不包括截至2023 年12 月到期的計劃票據，其到期日為2028 年10 月。截至2023 年12 月31 日，我們有3.91億美元的未償計畫票據，其到期日為2052 年3 月。我們的無擔保債務融資加權平均成本為4.15%，較2023年9月30日上升0.07%，較2022年12月31日下降0.18%。

Now, I'll turn the call back over to John.

現在，我將把電話轉回給約翰。

Thank you, Kristin. We can now answer any questions.

謝謝你，克里斯汀。我們現在可以回答任何問題。

We will now begin the question-and-answer session. (Operator Instructions)

我們現在開始問答環節。（操作員說明）

Finian O'Shea, Wells Fargo.

菲尼安‧奧謝，富國銀行。

Hi, good morning, everybody. Thanks for having me on for First question on the preferred stock you've been buying down the Series A, should we anticipate you exercising the issuer optional conversion feature when those Series A preferred are ultimately out of the way pipeline?

嗨，大家早安。感謝您邀請我回答有關您在 A 輪融資中購買的優先股的第一個問題，當這些 A 輪優先股最終退出管道時，我們是否應該預期您會行使發行人可選轉換功能？

Hi, Finian. Thanks for your question. I'm not sure what you mean by buying down the Series A., I don't think we've been doing that, but and we have no plans to to exercise such option we actually can exercise such option for another and 2.5 years because of an undertaking related to a listed preferred, but we have no plans to do so anyway, and actually moving the other direction. We just launched a new series that's not convertible at all into our common stock. So we've actually or moving the other direction.

嗨，菲尼安。謝謝你的提問。我不確定你所說的購買 A 輪融資是什麼意思，我不認為我們一直在這樣做，但是我們沒有計劃行使這樣的選擇權，我們實際上可以再行使這樣的選擇權 2.5 年因為一項與上市優先股相關的承諾，但我們無論如何都沒有計劃這樣做，而且實際上正在朝另一個方向發展。我們剛剛推出了一個新系列，該系列根本不能轉換為我們的普通股。所以我們實際上已經或正在朝另一個方向發展。

Okay. I appreciate that. And just a follow up on the read you it looks like you sold a property there this quarter. I hope I didn't get this one wrong as well. But curious given the market environment, the headlines we all read like how that that exit shook out. Any color you can give on the IRR, you experience what it what you sold versus your mark, what the cap rate you sold that was. I would really appreciate color there, and that's all for me. Thank you.

好的。我很感激。只是對您的後續報道，看起來您本季在那裡出售了一套房產。我希望我也沒有弄錯這一點。但出於好奇，考慮到市場環境，我們都讀到的頭條新聞就像退出是如何發生的。你可以在 IRR 上給出任何顏色，你會體驗到你賣出的東西與你的標記相比，你賣出的上限利率是多少。我真的很欣賞那裡的色彩，這就是我的全部。謝謝。

Sure. Thanks. Of the asset we sold was a an asset in the student lending sorry, student housing portfolio on student housing book is actually performing quite well and there is significant buyer interest in that segment of the real estate market so we're happy to have diversification in our real estate portfolio. I know we sold at close to our mark. I don't have the IRR at our fingertips that I know it was well into the double digits on overall within within real estate, our book is doing quite well. On recall, we focus on workforce housing, multifamily. We don't invest in office. We don't invest in retail. These are the areas that have been most deeply impacted, of course, within real estate, sort of on the wrong side of the digital divide, if you will, we're on the right side of the digital divide folks need a place to live.

當然。謝謝。我們出售的資產中是學生貸款中的一項資產，抱歉，學生住房賬簿上的學生住房投資組合實際上表現相當不錯，買家對房地產市場的這一領域有濃厚的興趣，因此我們很高興能夠實現多元化我們的房地產投資組合。我知道我們的售價接近我們的目標。我手邊沒有內部報酬率，我知道在房地產產業內，整體內部報酬率已經達到兩位數，我們的書做得很好。回想起來，我們關注的是勞動力住房、多戶住宅。我們不投資辦公室。我們不投資零售業。當然，這些是受到影響最深的領域，在房地產領域，有點處於數位落差的錯誤一邊，如果你願意的話，我們位於數位落差的正確一邊，人們需要一個居住的地方。

Multifamily has benefited significantly from some problems in affordability issues in the single-family housing market, keeping people in their apartments. We actually see less turnover and folks want to and need to stay in their apartments for a lot longer. We're also have a greater mix exposure into markets like the Midwest, for example, and selected Mid-Atlantic Northeast markets that have had less supply additions compared to the Western states and certain markets in the Southeast places, Nashville and Austin for example, have had huge surges of supply, and we've declined to purchase any properties in those areas because of supply concerns even in those markets with additional supply.

多戶住宅從單戶住房市場的一些負擔能力問題中受益匪淺，使人們留在自己的公寓裡。事實上，我們看到營業額減少了，人們希望並且需要在公寓裡待更久。例如，我們還對中西部等市場以及選定的大西洋中部東北部市場進行了更大的混合投資，與西部各州和東南部地區的某些市場（例如納什維爾和奧斯汀）相比，這些市場的供應增量較少，供應量大幅增加，但由於供應問題，我們拒絕購買這些地區的任何房產，即使在供應量增加的市場也是如此。

When you look at the forward pipeline past 2024 sort of falls off a cliff. So most folks in the industry expect absorption to occur and over the long term for and some significant positive rent growth too, continue from there. So we're very happy to have our real estate book and it's performing well.

當你看到 2024 年後的未來管道時，你會發現它就像是從懸崖上掉了下來。因此，業內大多數人預計會發生吸收，並且從長遠來看，租金也會繼續出現顯著的正成長。因此，我們很高興擁有我們的房地產書籍，並且表現良好。

Well, some Thank you, Grier. And I was just thinking of it. If I'm able to sneak in a third sort of a topic we've touched on over the years, of course, which has been on sort of running off the CLO book just wondering with the sort of resurgence and some resets and refis starting to build up, is there any room, you know, are you compelled to pursue that kind of strategy? You know, kind of rebuild the CLO book extend these out? Or should we still view them as no runoff or such? And that's all for me. Thank you.

好吧，有些謝謝你，格里爾。我只是在想。當然，如果我能偷偷地談一下我們多年來接觸過的第三種主題，這個主題已經從 CLO 書中消失了，只是想知道那種復甦以及一些重置和重新啟動建立起來，有沒有空間，你知道，你是否被迫追求這種策略？你知道嗎，重建 CLO 書來擴展這些內容？或者我們仍然應該將它們視為沒有徑流之類的嗎？這就是我的全部。謝謝。

Sure. So what we do with our CLO book is really no different in what we do with any of our position on an ongoing basis, including real estate, including Middle Market Lending, including Middle Market, buyouts when we examine a range of options for investment, we're looking always at the NPV the net present value of each potential option. And we're desiring, of course, to select the highest NPV option with CLOs. The range of options for an existing investment and is an actively managed book includes our calling and investment, and we get the benefit of having call premium optionality as majority holder in our book here. That's number one, number two, refinancing, one or more tranches of the liability stack.

當然。因此，我們對CLO 書所做的事情實際上與我們對我們持續持有的任何頭寸所做的事情沒有什麼不同，包括房地產，包括中間市場貸款，包括中間市場，當我們檢查一系列投資選擇時進行收購，我們始終關注 NPV，即每個潛在選項的淨現值。當然，我們希望透過 CLO 選擇最高 NPV 選項。現有投資的選擇權範圍是主動管理的書籍，包括我們的看漲期權和投資，並且我們從看漲期權溢價期權作為我們書籍中的多數持有人中受益。這是第一、第二、再融資、負債堆疊的一部分或多部分。

Now we're pursuing that in one of our deals for example, number three would be, as you referenced, extending or resetting on a deal. We're looking at a number for the selling of a position on a secondary basis. So we're constant looking at all four of those options, our desire is not a one size fits all sort of tops down, but rather bottoms up. It is a diversified portfolio of over 30 positions. And so what's appropriate for one deal may not be appropriate for another deal. But in general on a we expect for that book to be a lesser percentage of our portfolio over time as other strategies grow and the overall balance sheet grows, we've got a very under-leveraged balance sheet with a lot of dry powder. And then on a dollar basis, I would expect for it to decline over time as well.

例如，現在我們正在其中一項交易中追求這一點，正如您所提到的，第三點是延長或重置交易。我們正在尋找二級頭寸出售的數字。因此，我們一直在關注所有這四個選擇，我們的願望不是一種自上而下適合所有類型的方案，而是自下而上的方案。它是一個包含 30 多個部位的多元化投資組合。因此，適合一項交易的內容可能不適合另一項交易。但總的來說，隨著其他策略的增長和整體資產負債表的增長，我們預計隨著時間的推移，隨著其他策略的增長和整體資產負債表的增長，這本書在我們的投資組合中所佔的比例會越來越小，我們的資產負債表槓桿率非常低，有許多乾粉。然後以美元為基礎，我預計它也會隨著時間的推移而下降。

We've got significant amortization occurring. It is true in the last couple of years because of where liability spreads have been activity for refinancing and extensions have been somewhat muted in the current environment. As you pointed out, liability spreads are starting to tighten up. So there is some more optionality there and it wouldn't be out of the question too, do a refinancing and still continue to amortize at a higher NPV or do an extension and still sell. So these are mutually exclusive exits for us. But over time, if you just look at one point was almost 20% of our portfolio and now it's in the sevens percent, it's declined substantially. And I would expect for that to continue.

我們發生了重大攤銷。過去幾年確實如此，因為在當前環境下，再融資和延期的活動一直在進行，因此負債利差有所減弱。正如您所指出的，負債利差開始收緊。因此，還有更多的選擇，也不是不可能的，進行再融資並仍然繼續以更高的淨現值攤銷，或者進行延期並仍然出售。所以這些對我們來說是互斥的出口。但隨著時間的推移，如果你只看一個點，它幾乎占我們投資組合的 20%，而現在它佔了 7%，它已經大幅下降。我希望這種情況能夠持續下去。

Thanks, Grier.

謝謝，格里爾。

Thank you, Finian.

謝謝你，菲尼安。

Robert Dodd, Raymond James.

羅伯特·多德，雷蒙德·詹姆斯。

Good morning. You just answered my follow-up question. So on the whole, the other one I had was on the allocation to two prospect administration. It spiked up this quarter. Is that a new normal or was there any one-time expense embedded in that? And then maybe related to that, the preferred tender or whatever. Can you give us any color on that? And it was up 10 million sequentially?

早安.您剛剛回答了我的後續問題。總的來說，我的另一個任務是分配給兩個潛在客戶管理部門。本季有所上升。這是一種新常態還是其中包含一次性費用？然後可能與此相關，首選招標或其他什麼。你能給我們任何顏色嗎？而且季增了1000萬？

Sure. Thank you for your question on. It's not the new normal. We should expect a lesser number, probably more in the five range per quarter going forward, Robert, on what you saw there was a couple of things. One, comping it to the past from time to time, we will have a contra expense that we'll happily reduce of that number. We had a significant litigation settlement in our favor in the past, which reduced that number associated with assisting one of our portfolio companies. And then there's some sort of catch-up allocation on top of that. But the answer is no, that's not the new normal and we should expect more in the range of 5 million per quarter.

當然。謝謝你的提問。這不是新常態。羅伯特，根據您所看到的情況，我們應該預計未來每個季度的數字會更少，可能會更多，在五個範圍內。第一，時不時地與過去進行比較，我們將有一筆相反的費用，我們很樂意減少這個數字。我們過去曾達成一項對我們有利的重大訴訟和解，這減少了與協助我們的投資組合公司之一相關的數量。除此之外還有某種追趕分配。但答案是否定的，這不是新常態，我們應該預期每季 500 萬左右。

Going to. I appreciate it. Thank you.

即將。我很感激。謝謝。

Thank you, Robert.

謝謝你，羅伯特。

This concludes our question-and-answer session. I would like to turn the conference back over to John Barry for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給約翰·巴里（John Barry）發表閉幕詞。

Well, thank you, everyone. Have a wonderful day, and we'll see you in 90 days. Thanks to all. Bye.

嗯，謝謝大家。祝您有美好的一天，90 天後我們再見。謝謝大家。再見。

Thank you.

謝謝。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。