Prospect Capital Corp (PSEC) 2025 Q1 法說會逐字稿

Good day, and welcome to the Prospect Capital first fiscal quarter earnings release and conference call.

美好的一天，歡迎來到 Prospect Capital 第一財季財報發布和電話會議。

(Operator Instructions) Please note this event is being recorded.

（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 Barry, CEO.

我現在想將會議交給執行長約翰·巴里 (John Barry)。

Please go ahead.

請繼續。

Thank you, Dave.

謝謝你，戴夫。

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

今天和我一起參加電話會議的是我們的總裁兼營運長 Grier Eliasek；以及我們的財務長 Kristin Van Dask。

Kristin?

克里斯汀？

Thanks, John.

謝謝，約翰。

This call contains forward-looking statements that are intended to be subject to safe harbor protection.

本次電話會議包含旨在受到安全港保護的前瞻性陳述。

Future results are highly likely to vary materially.

未來的結果很可能會發生重大變化。

We do not undertake to update our forward-looking statements.

我們不承諾更新我們的前瞻性陳述。

For additional disclosure, see our earnings press release and 10-Q filed previously and available on our website, prospectstreet.com. Now I'll turn the call back over to John.

如需更多披露信息，請參閱我們之前提交的收益新聞稿和 10-Q，並可在我們的網站prospecttreet.com 上獲取。現在我將把電話轉回給約翰。

Thank you, Kristin.

謝謝你，克里斯汀。

Before we get started, I wanted to apologize to Finian O'Shea for what I said on our last earnings call.

在我們開始之前，我想為我在上次財報電話會議上所說的話向 Finian O'Shea 道歉。

When the love of your life tells you after an earnings call, John you shouldn't have said that.

當你一生的摯愛在財報電話會議後告訴你時，約翰，你不應該這麼說。

You instantly know you shouldn't have said that.

你立刻就知道你不該這麼說。

When you've been doing this for 37 years like I have and founded Prospect from scratch, sometimes criticism of our people can feel unfair.

當您像我一樣從零開始創建 Prospect 已經 37 年了，有時對我們員工的批評可能會讓人覺得不公平。

But at Prospect we have a saying, blast furnaces temper the best deal.

但在 Prospect，我們有一句話：高爐淬火是最好的交易。

Finnie and I appreciate your tough questions on our business and from other people at Wells and other firms, and we look forward to working with all of you in the years to come.

芬尼和我感謝您對我們的業務以及 Wells 和其他公司的其他人員提出的尖銳問題，我們期待在未來幾年與你們所有人合作。

Now on to official business.

現在開始正式工作。

In the September quarter, our net investment income or NII was $89.9 million or $0.21 per common share.

在 9 月季度，我們的淨投資收入或 NII 為 8,990 萬美元，即每股普通股 0.21 美元。

Our NAV was $3.51 billion or $8.10 per common share.

我們的資產淨值為 35.1 億美元，即每股普通股 8.10 美元。

At September 30, our net debt to total assets ratio was 29.7%.

截至9月30日，我們的淨負債與總資產的比率為29.7%。

Unsecured debt plus preferred is 86% of total debt, plus preferred for Prospect.

無擔保債務加優先債務佔總債務的 86%，加上 Prospect 的優先債務。

Since inception over 20 years ago through our January 2025 declared distribution we will have distributed $4.4 billion or $21.25 per share, representing 2.6 times September 2024 common NAV per share and 4.1 times our Wednesday stock price closing.

自20 多年前成立以來，透過我們2025 年1 月宣布的分配，我們將分配44 億美元或每股21.25 美元，相當於2024 年9 月每股普通資產淨值的2.6 倍，是我們週三收盤價的4.1 倍。

We are announcing monthly common shareholder distributions of $0.045 per share for each of November, December, and January.

我們宣布 11 月、12 月和 1 月的每月普通股股東分配為每股 0.045 美元。

We plan on announcing our next set of shareholder distributions in February.

我們計劃在二月宣布下一組股東分配。

We are rightsizing our common shareholder distribution rate as we continue to execute our long-term income and total return strategies by rotating structured credit, CLO equity and real estate investments into our core business of first lien senior secured middle market loans including sometimes with selected equity co-investments.

我們正在調整我們的普通股東分配率，同時我們繼續執行我們的長期收入和總回報策略，將結構性信貸、CLO股權和房地產投資轉移到我們的第一留置權高級擔保中間市場貸款（有時包括精選股權）的核心業務中共同投資。

Our preferred shareholder cash distributions continue at the contractual rates of such distributions.

我們的優先股股東現金分配繼續按照此類分配的合約比率進行。

CLO equity and real estate investments have generated attractive unlevered investment level, gross cash IRRs 12% for CLO equity and 24% for real estate property exited investments, since inception of such strategies in 2011 and 2012, respectively.

自 2011 年和 2012 年實施此類策略以來，CLO 股權和房地產投資已產生具有吸引力的無槓桿投資水平，CLO 股權的總現金 IRR 為 12%，房地產退出投資的總現金 IRR 為 24%。

But with more variability compared to our core business.

但與我們的核心業務相比，變化更大。

As we rotate into lower variability middle-market corporate investments, our recurring income, as shown by interest income as a percent of total income has reached 94% an increase of over 800 basis points for the year-over-year quarterly period.

隨著我們轉向波動性較低的中間市場企業投資，我們的經常性收入（以利息收入佔總收入的百分比表示）已達到 94%，同比季度增長超過 800 個基點。

We still perceive CLO equity and real estate investments as attractive risk-adjusted strategies.

我們仍然認為 CLO 股票和房地產投資是有吸引力的風險調整策略。

We intend another fund to be developed and to be managed by an affiliate of Prospect Capital Management to continue to focus on new CLO investments with less targeted Prospect Capital Corporation balance sheet investment in this strategy going forward.

我們打算開發另一隻基金，並由 Prospect Capital Management 的一家附屬公司管理，以繼續專注於新的 CLO 投資，而在這一策略中，未來目標較少的 Prospect Capital Corporation 資產負債表投資。

Similarly with real estate.

房地產也是如此。

CLO equity has decreased to 6% of our assets versus 18% as of September 30, 2017, as we execute on our rotation strategy to emphasize first lien senior secured lending with such mix growing significantly for us.

截至2017 年9 月30 日，隨著我們執行輪調策略以強調第一留置權優先擔保貸款，CLO 權益已降至我們資產的6%，而截至2017 年9 月30 日，這一比例為18% 。

CLO equity typically generates attractive cash-on-cash yields, but such yields tend to be higher in the initial years while lower in the later years thereby resulting in variability that we seek to reduce by focusing more on our core business at Prospect Capital Corporation.

CLO 股票通常會產生有吸引力的現金收益率，但這種收益率往往在最初幾年較高，而在以後幾年較低，從而導致我們透過更專注於Prospect Capital Corporation 的核心業務來減少波動性。

Real estate investing is a total return strategy that has been a solid fit for Prospect Capital Corporation during periods of low short-term and medium-term interest rates.

房地產投資是一種總回報策略，在短期和中期利率較低的時期非常適合 Prospect Capital Corporation。

We have exited dozens of our value-add properties in the past several years after achieving strong rent and net operating income performance.

在實現強勁的租金和淨營業收入表現後，我們在過去幾年中退出了數十個增值物業。

We have also generated substantial exit-related income from real estate property sales over the years with such exit-related income decreasing recently as we have had fewer exits.

多年來，我們也透過房地產銷售產生了大量與退出相關的收入，但由於我們退出的次數較少，因此此類退出相關收入最近有所下降。

While we expect to monetize further real estate property investments, with attractive returns, we are cautious about the pace of future exit-related income.

雖然我們預計將進一步的房地產投資貨幣化並獲得有吸引力的回報，但我們對未來退出相關收入的步伐持謹慎態度。

Over the last seven weeks, the Fed has reversed 75 basis points of prior short-term interest rate increases that hurt our book with market expectations for more reductions going forward, which may lower future shareholder distribution rates across all related credit industries.

在過去的七周里，聯準會已經扭轉了先前短期升息的75 個基點，這對我們的帳簿造成了損害，市場預期未來還會進一步降息，這可能會降低所有相關信貸行業未來的股東分配率。

We have already factored in the declining forward curve for short-term interest rates for our common shareholder distribution declaration today.

我們今天在普通股股東分配聲明中已經將短期利率下降的遠期曲線納入考量。

Thank you.

謝謝。

I'll now turn the call over to Grier.

我現在將把電話轉給格里爾。

Thank you, John.

謝謝你，約翰。

Over the past two decades, Prospect Capital Corporation has invested $11.4 billion and over 300 exited investments that have earned a 13% unlevered investment level gross cash IRR to Prospect Capital Corporation.

在過去的二十年裡，Prospect Capital Corporation 已投資了 114 億美元，並已退出了 300 多項投資，這些投資為 Prospect Capital Corporation 贏得了 13% 的無槓桿投資水平總現金 IRR。

This two decade time period includes the GFC and has been dominated in general by low reference interest rates.

這二十年期間包括全球金融危機，並且整體以低參考利率為主。

The majority of peer BDCs have not been battle-tested by such general economic downturn in other headwinds.

大多數同行 BDC 尚未經受過這種普遍經濟衰退和其他不利因素的考驗。

Our core business of directly originated non-syndicated first lien senior secured loans to US middle-market companies, sometimes with selected equity co-investments offers multiple compelling attributes.

我們的核心業務是直接向美國中間市場公司發起的非銀團第一留置權優先擔保貸款，有時會與選定的股權共同投資一起提供多種引人注目的屬性。

First lien loans as a percentage of total investments have now reached 65%, an increase of over 700 basis points for the year-over-year quarterly period.

第一留置權貸款佔總投資的比例現已達到 65%，較去年同期成長超過 700 個基點。

Such core business with proprietary opportunity flow offers higher spreads than lending to much larger companies which loans are experiencing significant spread compression for other lenders focused on that more competitive and commoditized larger end of the market.

這種擁有專有機會流的核心業務提供的利差比向規模大得多的公司提供的貸款要高，而對於專注於更具競爭力和商品化的較大市場的其他貸方來說，這些貸款正在經歷顯著的利差壓縮。

Middle market loans by comparison, offer higher interest rate floors, often 250 basis points to 400 basis points versus loans to larger companies which often have only 0 basis points to 100 basis points floors, thereby providing better protection for yield and income when short-term interest rates decline.

相較之下，中間市場貸款提供更高的利率下限，通常為250 個基點至400 個基點，而向大型公司提供的貸款通常只有0 個基點至100 個基點下限，從而在短期內為收益率和收入提供更好的保護利率下降。

Such higher floors benefited Prospect Capital Corporation greatly when the Fed last sharply reduced such rates during the GFC.

當聯準會在全球金融危機期間大幅降低此類利率時，較高的下限使 Prospect Capital Corporation 受益匪淺。

First lien senior secured middle market loans, different from CLO equity and real estate investments also are eligible for favorable financing with our efficient cost revolving credit facility, helping to further enhance our net investment income.

與CLO股權和房地產投資不同，第一留置權優先擔保中間市場貸款也有資格透過我們高效的成本循環信貸安排獲得有利的融資，有助於進一步提高我們的淨投資收益。

With such core business middle market investments, we also sometimes have an opportunity to structure investments with equity upside, including through warrants, convertible debt and 2 times liquidation preferences.

透過此類核心業務的中間市場投資，我們有時也有機會進行具有股權上漲空間的投資結構，包括透過認股權證、可轉換債務和兩倍清算優先權。

With an objective to maximize current yields and total returns in a prudent and risk-adjusted fashion.

目標是以審慎和風險調整的方式最大化當前收益率和總回報。

Many such investments that we are currently underwriting have targeted unlevered double-digit current yields and unlevered total returns of 12% to 15% or more.

我們目前承銷的許多此類投資的目標是無槓桿當前兩位數收益率和 12% 至 15% 或更高的無槓桿總回報。

With such yields and total returns further enhanced by our credit facility to lift targeted levered returns to 18% to 20% or more.

我們的信貸安排進一步提高了此類收益率和總回報，將目標槓桿回報率提高至 18% 至 20% 或更高。

Recent investments like RK Logistics, Discovery Point and Druid City, illustrate such non-syndicated middle-market focus where we also capture equity upside.

最近的投資，如 RK Logistics、Discovery Point 和 Druid City，說明了我們對非銀團中間市場的關注，我們也抓住了股票上漲的機會。

Our middle market portfolio companies also have the potential to drive substantial synergistic value creation with add-on acquisitions.

我們的中間市場投資組合公司還有潛力透過附加收購推動實質協同價值創造。

With examples, including Valley purchasing Comet and R-V Industries making multiple acquisitions.

舉例來說，包括 Valley 收購 Comet 和 R-V Industries 進行多次收購。

With such middle market investments, we have a greater ability to add value to management teams that benefit from our experienced prospect team of over 130 professionals in areas like Board supervision, operational assistance, strategic planning, executive recruiting, add-on acquisition sourcing in other important areas.

透過此類中間市場投資，我們有更大的能力為管理團隊增加價值，這些團隊受益於我們經驗豐富的潛在團隊，該團隊由130 多名專業人士組成，涉及董事會監督、營運協助、策略規劃、高階主管招募、其他領域的附加收購採購等領域。

Our pipeline continues to build with additional non-syndicated first lien senior secured middle market loans with selected equity co-investments, which we expect to deliver substantial benefits to Prospect Capital Corporation and its shareholders going forward.

我們的管道繼續建造額外的非銀團第一留置權優先擔保中間市場貸款與選定的股權共同投資，我們預計這將為 Prospect Capital Corporation 及其股東帶來巨大的利益。

For the September quarter, our portfolio at fair value comprised 64.9% first lien debt -- that's up 7.6% from the prior year, 11.1% second lien debt.

在 9 月季度，我們的投資組合以公允價值計算，第一留置權債務佔 64.9%，比上一年增長 7.6%，第二留置權債務佔 11.1%。

That's down 4.8% from the prior year. 6.2% subordinated structured notes with underlying secured first lien collateral, that's down 1.9% from the prior year and 17.8% unsecured debt and equity investments, that's down 0.9% from the prior year, resulting in 82.2% of our investments being assets with underlying secured debt benefiting from borrower-pledged collateral.

較上年下降 4.8%。 6.2% 的次級結構性票據帶有標的有擔保第一留置權抵押品，比上年下降1.9%；無擔保債務和股權投資佔17.8%，比上年下降0.9%，因此我們82.2% 的投資是有標的擔保的資產受益於借款人質押抵押品的債務。

We're pleased with our continued success in executing our plan to increase our first lien mix while reducing our second lien and subordinated structured notes exposure, thereby reducing portfolio risk.

我們很高興能夠繼續成功地執行我們的計劃，增加我們的第一留置權組合，同時減少我們的第二留置權和次級結構性票據風險，從而降低投資組合風險。

Prospect's approach is one that generates attractive risk-adjusted yields, and our performing interest-bearing investments, we're generating an annualized yield of 11.8% as of September.

Prospect 的方法能夠產生有吸引力的風險調整收益率，而我們的計息投資，截至 9 月的年化收益率為 11.8%。

Our interest income in the September quarter was 94% of total investment income, reflecting a strong recurring revenue profile to our business.

我們九月季度的利息收入佔總投資收入的 94%，反映出我們業務強勁的經常性收入狀況。

As of September, we held 117 portfolio companies with a fair value of $7.5 billion.

截至 9 月份，我們持有 117 家投資組合公司，公允價值達 75 億美元。

We also continue to invest in a diversified fashion across many different portfolio company industries with a preference for avoiding cyclicality and industry concentration.

我們也繼續以多元化的方式投資於許多不同的投資組合公司行業，並傾向於避免週期性和行業集中。

As of September, our asset concentration in the energy industry stood at only 1.5% in hotel, restaurant and leisure sector stood at only 0.3%.

截至9月份，我們的資產集中度在能源產業僅為1.5%，飯店、餐飲和休閒產業僅為0.3%。

And in the retail industry stood at only 0.1% as examples of cyclical industries where we have low exposure.

零售業的佔比僅為 0.1%，是我們風險敞口較低的週期性產業的例子。

Non-accruals as a percentage of total assets stood at approximately 0.5% in September.

9 月非應計費用佔總資產的比例約為 0.5%。

Weighted average middle market portfolio net leverage stood at 5.7 times EBITDA.

加權平均中間市場投資組合淨槓桿比率為 EBITDA 的 5.7 倍。

Our weighted average EBITDA per portfolio company stood at $105 million.

我們投資組合公司的加權平均 EBITDA 為 1.05 億美元。

Originations in the September quarter aggregated $291 million.

9 月季度的發起總額為 2.91 億美元。

We also experienced $282 million of repayments and exits as a validation of our capital preservation objective, resulting in net originations of $8 million.

作為對我們資本保值目標的驗證，我們也經歷了 2.82 億美元的還款和退出，從而產生了 800 萬美元的淨發起額。

During the September quarter, our originations comprised 85.8% middle market lending, 7.8%; real estate and 6.1% middle market lending and buyouts.

在 9 月的季度中，我們的原始貸款佔中間市場貸款的 85.8%，佔 7.8%；房地產和 6.1% 的中間市場貸款和收購。

So far in the current December quarter, we booked $42 million in originations and experienced $163 million of repayments.

到目前為止，在目前 12 月季度，我們預訂了 4,200 萬美元的發起資金，並經歷了 1.63 億美元的還款。

Thank you.

謝謝。

I'll now turn the call over to Kristin.

我現在將把電話轉給克里斯汀。

Kristin?

克里斯汀？

Thanks, Grier.

謝謝，格里爾。

We believe our prudent leverage, diversified access to matched book 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.

我們相信，我們審慎的槓桿率、多元化的匹配賬面融資渠道、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的大量流動性。

Our company has locked in a ladder of liabilities extending 28 years into the future.

我們公司已經鎖定了未來 28 年的負債階梯。

Our total unfunded eligible commitments to portfolio companies totals approximately $48 million representing approximately 0.6% of our assets.

我們對投資組合公司的無資金資助合格承諾總額約為 4,800 萬美元，約占我們資產的 0.6%。

Our combined balance sheet cash and undrawn revolving credit facility commitments currently stand at $1.5 billion.

目前，我們的資產負債表現金和未提取的循環信貸額度承諾合計為 15 億美元。

As of September, we held $4.9 billion of our assets as unencumbered assets, representing approximately 64% of our portfolio.

截至 9 月份，我們持有 49 億美元的資產作為未支配資產，約占我們投資組合的 64%。

.

。

The remaining assets are pledged to Prospect Capital funding, a nonrecourse SPV.

其餘資產質押至 Prospect Capital（一家無追索權 SPV）融資。

In June, we successfully completed an amended and extended credit facility with a new 5-year maturity.

6 月，我們成功完成了修訂和延期的信貸安排，期限為新的 5 年。

We currently have $2.12 billion of commitments from 48 banks, demonstrating strong support of our company from the lender community with the diversity unmatched by any other company in our industry.

目前，我們已獲得 48 家銀行的 21.2 億美元承諾，這表明我們公司得到了貸款機構的大力支持，其多樣性是業內任何其他公司無法比擬的。

The facility revolves until June 2028, followed by a year of amortization with interest distributions continuing to be allowed to us.

該貸款期限至 2028 年 6 月，隨後一年的攤銷，我們繼續允許進行利息分配。

Our drawn pricing continues to be SOFR plus 2.05%.

我們的定價仍是 SOFR 加 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.

除了我們的左輪手槍和受益於我們的未支配資產之外，我們在Prospect Capital Corporation 發行了多種類型的投資級無擔保債務，包括在過去幾年中，包括可轉換債券、機構債券、嬰兒債券和計劃票據。

All of these types of unsecured debt have no financial covenants, no asset restrictions, and no cross defaults with our revolver.

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。

We currently have 5 investment-grade ratings more than any other company in our industry.

目前，我們的投資等級評級比業內任何其他公司都多。

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 with our debt maturities extending through 2052.

現在，我們已多次利用無擔保定期債務市場來提高我們的到期日，並將我們的債務期限延長至 28 年，債務到期日延長至 2052 年。

With so many banks and debt investors across so many unsecured and non-recourse debt tranches, we have substantially reduced our counterparty risk.

由於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，我們已經大幅降低了交易對手風險。

At September 30, 2024, our weighted average cost of unsecured debt financing was 4.42%.

截至2024年9月30日，我們的無擔保債務融資加權平均成本為4.42%。

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.

謝謝你，克里斯汀。

I think it's time for us to take questions if we have any.

我認為現在是我們提出問題的時候了。

Thank you very much.

非常感謝。

(Operator Instructions)

（操作員說明）

Finian O'Shea, Wells Fargo Securities.

Finian O'Shea，富國銀行證券公司。

Hey, everyone.

嘿，大家。

Good morning.

早安.

I appreciate the opening remarks, John.

我很欣賞約翰的開場白。

Welcome back.

歡迎回來。

We're delighted to hear your voice.

我們很高興聽到您的聲音。

Likewise, I know we both always like to have a good time when talking about BDC.

同樣，我知道我們都喜歡在談論 BDC 時度過愉快的時光。

So just one this quarter on the dividend.

因此，本季僅發放股利。

So it feels more rightsized now, but it's still a comparatively low yield on book.

因此，現在感覺規模更加合理，但帳面收益率仍然相對較低。

And of course, that weighs on valuation for a BDC, which isn't ideal.

當然，這會影響 BDC 的估值，這並不理想。

So you touched on some things, I think, CLO rotation.

所以我認為你談到了一些事情，CLO 輪換。

But can you help outline or quantify like how much you can rotate where those pockets are and what you can -- what you sort of strive for on driving an improved book return.

但你能否幫助概述或量化，例如你可以在這些口袋的位置輪換多少，以及你可以做什麼——你在推動提高圖書回報方面所努力的目標是什麼。

Thanks.

謝謝。

I'd love to, but I'm not allowed to answer any questions.

我很願意，但我不被允許回答任何問題。

Actually, I gave my little [brace] at the beginning.

事實上，我一開始就給了我小小的[支撐]。

Grier, why do we hear from Grier because I'm sure he will have a slightly different perspective.

格里爾，為什麼我們會收到格里爾的來信，因為我確信他會有稍微不同的看法。

Sure.

當然。

Fannie, thank you for your question.

范妮，謝謝你的提問。

So in the CLO segment, we talked about how income and yield tends to be front-end weighted during the life of the deal.

因此，在 CLO 部分，我們討論了在交易期間收入和收益率如何傾向於前端加權。

And while we're enjoying a reasonably robust cash flows, we're actually not recognizing much income from a GAAP standpoint.

雖然我們享受著相當強勁的現金流，但從公認會計準則的角度來看，我們實際上並沒有意識到多少收入。

And that book is, therefore, amortizing significantly.

因此，這本書正在大幅攤提。

I think we're getting somewhere along 2% or 3% GAAP yield off of CLOs, which obviously is well below the double-digit yields plus equity upside in many cases that we can earn on our core business of middle market lending, which has been quite robust with successful recent investments.

我認為我們從CLO 中獲得了2% 或3% 的GAAP 收益率，這顯然遠低於兩位數的收益率加上在許多情況下我們可以透過我們的中間市場貸款核心業務賺取的股票上漲空間，最近的投資相當強勁。

So by continuing to amortize that book and you see every quarter it continues to amortize and drop as a percentage of the portfolio.

因此，透過繼續攤銷該書，您會發現每個季度它都在繼續攤銷並佔投資組合的百分比下降。

We're now at about 6% of the book in CLOs.

目前，我們的 CLO 佔比約為 6%。

That should provide in earnings boost.

這應該會帶來獲利成長。

That's area number one.

那是第一區。

Area number two, which we also highlighted is real estate, which is a terrific total return strategy, but a lot of the return is more exit driven as opposed to on a current basis.

我們也強調的第二個領域是房地產，這是一個非常棒的總回報策略，但許多回報更多是退出驅動的，而不是目前的基礎。

When SOFR was near 0 and maybe we'll return to that at some point, depending upon the pacing of Fed cuts.

當 SOFR 接近 0 時，也許我們會在某個時候回到這個水平，這取決於聯準會降息的節奏。

We've obviously had 75 bps and only 7 weeks here, getting a sort of high single-digit yield on real estate was competitive with middle market lending, plus we had upside beyond that.

顯然，我們已經有了 75 個基點，而且只有 7 週的時間，在房地產領域獲得高個位數的收益率與中間市場貸款具有競爭力，而且除此之外我們還有上漲空間。

And in the current environment, that's not as competitive and we think monetizing our real estate as we've continued to do and expect to do in a prudent and orderly fashion to again, rotate into our core business of middle market lending with equity upside is prudent and much of that real estate has appreciated through our successful investing in value-add workforce housing.

在當前環境下，這並不具有競爭力，我們認為，將我們的房地產貨幣化，就像我們繼續做的那樣，並期望以審慎有序的方式再次轉向我們的核心業務，即具有股票上漲空間的中間市場貸款業務。

So that's area number two, area number three would be exiting again in a prudent fashion successful middle market deals where we also hold equity, and we think that it's the right time to exit was often appreciated equity and rotate once again into a slate of new deals to produce a higher current income and total return running a permanent capital business, what we do from a capital efficiency and discipline standpoint is to examine our foregone return where we to potentially hold particular investments.

因此，第二個領域、第三個領域將以謹慎的方式再次退出，成功的中間市場交易，我們也持有股權，我們認為現在是退出的正確時機，因為股權經常升值，並再次轉向一系列新的領域。

And if we've concluded foregone IRR to foregone yield we examined both are below our hurdle rates then we'd rather sell to a third party and then rotate.

如果我們得出的結論是，我們檢查的放棄的內部收益率與放棄的收益率都低於我們的最低門檻利率，那麼我們寧願出售給第三方，然後進行輪換。

So we think this provides significant upside to our business going forward to boost our return on equity, which we're relentlessly focused on.

因此，我們認為這為我們的業務未來提供了顯著的優勢，以提高我們不懈關注的股本回報率。

Thank you.

謝謝。

Thank you, guys.

謝謝你們，夥計們。

This concludes our question-and-answer session.

我們的問答環節到此結束。

I would like to turn the conference back over to John Barry for any closing remarks.

我想將會議轉回給約翰·巴里（John Barry）發表閉幕詞。

Okay.

好的。

Well, thank you, everyone.

嗯，謝謝大家。

Have a wonderful morning, and we'll see you in a quarter.

祝你有個美好的早晨，我們四分之一後見。

Thanks so much.

非常感謝。

Bye now.

再見了。

Thank you all.

謝謝大家。

The conference has now concluded.

會議現已結束。

Thank you for attending today's presentation.

感謝您參加今天的演講。

You may now disconnect.

您現在可以斷開連線。