Saratoga Investment Corp (SAR) 2026 Q1 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Saratoga Investment Corp. fiscal first quarter 2026 financial results conference call. Please note that today's call is being recorded. (Operator Instructions)

女士們、先生們，早安。感謝您的支持。歡迎參加 Saratoga Investment Corp. 2026 財年第一季財務業績電話會議。請注意，今天的通話正在錄音。（操作員指示）

At this time, I would like to turn the call over to Saratoga Investment Corp's. Chief Financial and Chief Compliance Officer, Mr. Henri Steenkamp. Sir, please go ahead.

現在，我想將電話轉給 Saratoga Investment Corp。財務長兼首席合規官 Henri Steenkamp 先生。先生，請繼續。

Thank you. I would like to welcome everyone to Saratoga Investment Corp's. fiscal first quarter 2026 earnings conference call. Today's conference call includes forward-looking statements and projections. We ask you to refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these forward-looking statements and projections. We do not undertake to update our forward-looking statements unless required to do so by law.

謝謝。歡迎大家參加 Saratoga Investment Corp 2026 財年第一季財報電話會議。今天的電話會議包括前瞻性陳述和預測。我們請您參考我們最近向美國證券交易委員會提交的文件，以了解可能導致實際結果與這些前瞻性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。

Today, we will be referencing a presentation during our call. You can find our fiscal first quarter 2026 shareholder presentation in the Events and Presentations section of our Investor Relations website. A link to our IR page is in the earnings press release distributed last night. For everyone new to our story, please note that our fiscal year-end is February 28, so any reference to Q1 results reflects our May 31 quarter-end period. A replay of this conference call will also be available, please refer to our earnings press release for details.

今天，我們將在通話中參考一份簡報。您可以在我們投資者關係網站的「活動和演示」部分找到我們 2026 財年第一季的股東介紹。我們的 IR 頁面的連結位於昨晚發布的收益新聞稿中。對於所有剛了解我們故事的人來說，請注意我們的財政年度結束於 2 月 28 日，因此對第一季業績的任何提及均反映我們 5 月 31 日的季度末期間。本次電話會議的重播也將提供，詳情請參閱我們的收益新聞稿。

I would now like to turn the call over to our Chairman and Chief Executive Officer, Christian Oberbeck, who will be making a few introductory remarks.

現在，我想將電話轉給我們的董事長兼執行長克里斯蒂安·奧伯貝克 (Christian Oberbeck)，他將做一些開場發言。

Thank you, Henri, and welcome, everyone. Saratoga Investment Corp. highlights this quarter include a 17.9% increase in adjusted NII per share from the previous quarter, continued growth of NAV, a strong return on equity, beating the industry average, two new portfolio company investments and most importantly, a continued solid performance from the core BDC portfolio in a volatile macro environment.

謝謝你，亨利，歡迎大家。Saratoga Investment Corp. 本季的亮點包括調整後的每股 NII 較上一季度增長 17.9%、NAV 持續增長、股本回報率強勁、超過行業平均水平、兩家新的投資組合公司投資，最重要的是，核心 BDC 投資組合在動蕩的宏觀環境下繼續保持穩健表現。

Building on our historical strong dividend distribution history, we announced a base dividend of $0.25 per share per month or $0.75 per share in aggregate for the second quarter of fiscal 2026. Our annualized second quarter dividend of $0.75 per share represents an 11.8% yield based on the stock price of $25.44 as of July 7, 2025. And offering strong current income from an investment value standpoint. Our Q1 adjusted NII of $0.66 per share continues to reflect the impact of the past 12-month trend of decreasing levels of short-term interest rates and spreads on Saratoga Investment's largely floating rate assets and the continued effect of the recent repayments. This has resulted in $224 million of cash as of quarter end, available to be deployed accretively in investments or to repay existing debt.

基於我們歷史上強勁的股息分配歷史，我們宣布 2026 財年第二季的基本股息為每月每股 0.25 美元或總計每股 0.75 美元。我們第二季的年度股息為每股 0.75 美元，根據 2025 年 7 月 7 日的股價 25.44 美元計算，收益率為 11.8%。並從投資價值的角度提供強勁的當前收入。我們第一季調整後的每股 NII 為 0.66 美元，這繼續反映了過去 12 個月短期利率和利差下降趨勢對 Saratoga Investment 大部分浮動利率資產的影響，以及近期還款的持續影響。截至本季末，這已產生 2.24 億美元現金，可用於投資增值或償還現有債務。

During the quarter, we continued to see a slower level of deal volume and M&A activity in the lower middle market following the recent tariff developments and a slowdown in new debt issuances. Despite these macro factors, our portfolio had multiple debt repayments and an equity realization in Q1 and in addition to healthy new originations, generating $2.9 million of realized gains and $50.1 million invested in two new portfolio companies, six follow-ons and new investments in multiple BB CLO debt securities. Our strong reputation and differentiated market positioning, combined with our ongoing development of sponsor relationships, continues to create an attractive investment opportunities from high-quality sponsors, while we remain prudent and discerning in terms of new commitments in the current volatile environment.

本季度，由於近期關稅變化和新債發行放緩，我們繼續看到中低端市場的交易量和併購活動放緩。儘管有這些宏觀因素，我們的投資組合在第一季仍進行了多次債務償還和一次股權變現，此外還有健康的新發起，產生了 290 萬美元的已實現收益，並投資了兩家新的投資組合公司、六家後續公司和多支 BB CLO 債務證券的新投資 5010 萬美元。我們良好的聲譽和差異化的市場定位，加上我們不斷發展的贊助商關係，繼續從高品質的贊助商創造有吸引力的投資機會，同時我們在當前動盪的環境中對新的承諾保持謹慎和敏銳。

We believe Saratoga continues to be favorably situated for potential future economic opportunities as well as challenges. At the foundation of our strong operating performance is the high-quality nature and resilience of our $968.3 million portfolio in the current environment with all four challenged portfolio company situations resolved. Our current core non-CLO portfolio was marked up by $2.6 million this quarter, and the CLO and JV were marked down by $0.2 million. We also had $0.6 million net realized appreciation on an equity realization and numerous debt repayments that generated $2.2 million of life-to-date realized gains further net realized gains of $0.7 million from escrow payments on the Netreo and Hema Terra investments and $0.2 million of net appreciation in our new BB investments, resulting in the fair value of the portfolio increasing by $3.8 million during the quarter. As of quarter end, our total portfolio fair value was 2.1% below cost, while our core non-CLO portfolio was 1.7% above cost.

我們相信，薩拉託加將繼續處於有利地位，迎接未來的潛在經濟機會和挑戰。我們強勁經營業績的基礎是我們 9.683 億美元投資組合的高品質和韌性，在當前環境下，所有四個受挑戰的投資組合公司的情況都已解決。本季度，我們目前的核心非 CLO 投資組合增加了 260 萬美元，而 CLO 和 JV 投資組合減少了 20 萬美元。我們還透過股權變現和多次債務償還實現了 60 萬美元的淨增值，產生了 220 萬美元的迄今為止的已實現收益，並透過 Netreo 和 Hema Terra 投資的託管付款實現了 70 萬美元的淨增值，以及我們新的 BB 投資實現了 20 萬美元的淨增值，導致投資組合的公允價值在本季度增加了 380 萬美元。截至季末，我們的總投資組合公允價值比成本低 2.1%，而我們的核心非 CLO 投資組合比成本高 1.7%。

The overall financial performance and solid earnings power of our current portfolio reflects strong underwriting in our growing portfolio companies and sponsors in well-selected industry segments.

我們目前投資組合的整體財務表現和穩健的盈利能力反映了我們不斷增長的投資組合公司和精心挑選的行業領域的贊助商的強勁承銷。

During the first quarter, our net interest margin expanded meaningfully from $13.7 million last quarter to $15.6 million driven by a $1.4 million increase in non-CLO interest income as the full benefit of Q4 originations was realized and repayments largely occurred late in Q1. Average yields were relatively unchanged. This was further supported by a $0.5 million decrease in interest expense, reflecting the full quarter benefit of repaying $44 million in SBIC II debentures at year-end, and the partial period impact of retiring the $20 million, 8.75% baby bond this quarter.

第一季度，我們的淨利差大幅擴大，從上季度的 1,370 萬美元增至 1,560 萬美元，這得益於非 CLO 利息收入增加 140 萬美元，因為第四季度發起的收益已全部實現，而還款大部分發生在第一季末。平均收益率相對沒有變化。利息支出減少了 50 萬美元，進一步支持了這一增長，這反映了年底償還 4400 萬美元 SBIC II 債券的整個季度收益，以及本季度償還 2000 萬美元、8.75% 的嬰兒債券的部分期間影響。

In addition, the full period impact of the 1.2 million shares issued through the ATM program in Q4 and a partial impact of the additional 0.2 million shares issued in Q1, resulting in a $0.04 per share dilution to NII per share.

此外，第四季度透過 ATM 計劃發行的 120 萬股股票的整個期間影響以及第一季額外發行的 20 萬股股票的部分影響，導致每股 NII 稀釋 0.04 美元。

Our overall credit quality for this quarter remained steady at 99.7% of credits rated in our highest category with the two investments remaining on nonaccrual status being Zollege and Pepper Palace, both of which have been successfully restructured, representing only 0.3% and 0.6% of fair value and cost, respectively. With (inaudible) of our investments at quarter end and first lien debt and generally supported by strong enterprise values and balance sheets in industries that have historically performed well in stress situations, we believe our portfolio and company leverage is well structured for future economic conditions and uncertainty.

本季度，我們的整體信貸品質保持穩定，最高評級信貸品質為 99.7%，其中仍處於非應計狀態的兩項投資是 Zollege 和 Pepper Palace，這兩項投資均已成功重組，分別僅佔公允價值和成本的 0.3% 和 0.6%。憑藉我們在季度末和第一留置權債務方面的投資（聽不清楚），以及在歷史上在壓力情況下表現良好的行業的強大企業價值和資產負債表的普遍支持，我們相信我們的投資組合和公司槓桿率能夠很好地適應未來的經濟狀況和不確定性。

As we continue to navigate the challenges posed by the current geopolitical landscape and the volatility seen in the broader underwriting and macro environment, we remain confident in our experienced management team, robust pipeline, strong leverage structure and high underwriting standards to continue to steadily increase the size, quality and investment performance of our portfolio over the long term and deliver exceptional risk-adjusted returns to our shareholders.

在我們繼續應對當前地緣政治格局和更廣泛的承保及宏觀環境波動所帶來的挑戰的同時，我們仍然對我們經驗豐富的管理團隊、強大的產品線、強大的槓桿結構和高承保標準充滿信心，將繼續穩步增加我們投資組合的規模、質量和長期投資業績，並為我們的股東帶來卓越的風險調整回報。

As always, and particularly in the current uncertain environment, balance sheet strength, liquidity and NAV preservation remain paramount for us. At quarter end, we maintained a substantial $430 million of investment capacity to support our portfolio companies with $136 million available through our existing SBIC III license, $70 million from our two revolving credit facilities and $224 million in cash. This level of cash improves our current regulatory leverage of 163.8% to 188.1% net leverage, netting available cash against outstanding debt.

像往常一樣，特別是在當前不確定的環境下，資產負債表實力、流動性和資產淨值保持對我們來說仍然至關重要。截至本季末，我們維持了 4.3 億美元的巨額投資能力來支持我們的投資組合公司，其中 1.36 億美元可透過我們現有的 SBIC III 許可證獲得，7,000 萬美元可透過我們的兩個循環信貸安排獲得，2.24 億美元可透過現金獲得。這一現金水準將我們目前的監管槓桿率從 163.8% 提高到 188.1% 的淨槓桿率，即用可用現金抵銷未償債務。

Moving on to Saratoga Investments Fiscal '26 first quarter, key performance indicators as compared to the quarters ended May 31, 2024, and February 28, 2025. Our quarter end NAV was $396.4 million, up 7.8% from $367.9 million last year and up 0.9% from $392.7 million last quarter. Our adjusted NII was $10.1 million this quarter, down 29.3% from last year and up 26.2% from last quarter. Our adjusted NII per share was $0.66 this quarter, down 37.1% from $1.05 last year and up 17.9% from $0.56 last quarter. Adjusted NII yield was 10.3% this quarter, down from 15.5% last year and up from 8.4% last quarter.

繼續討論 Saratoga Investments 26 財年第一季度，關鍵績效指標與截至 2024 年 5 月 31 日和 2025 年 2 月 28 日的季度相比。我們的季末資產淨值為 3.964 億美元，比去年的 3.679 億美元成長 7.8%，比上季的 3.927 億美元成長 0.9%。本季我們的調整後 NII 為 1,010 萬美元，比去年下降 29.3%，比上一季成長 26.2%。本季我們的調整後每股 NII 為 0.66 美元，比去年的 1.05 美元下降 37.1%，比上一季的 0.56 美元增加 17.9%。本季調整後的 NII 收益率為 10.3%，低於去年的 15.5%，但高於上季的 8.4%。

Latest 12 months return on equity was 9.3%, up from 4.4% last year and up from 7.5% last quarter and above the industry average of 7%. And our NAV per share was $25.52, down from $26.85 last year and down from $25.86 last quarter. Of note, the recently implemented change to monthly dividend distributions resulted in the March and April dividend record dates falling into this first quarter for an additional onetime dividend reducing NAV per share by $0.50. Excluding this onetime occurrence, NAV per share would have risen to $26.02, reflecting a $0.16 or a 0.6% increase.

最新 12 個月的股本回報率為 9.3%，高於去年的 4.4% 和上一季的 7.5%，且高於 7% 的行業平均水平。我們的每股資產淨值為 25.52 美元，低於去年的 26.85 美元，也低於上一季的 25.86 美元。值得注意的是，近期實施的月度股息分配變更導致3月和4月的股息記錄日期落入第一季度，這筆額外的一次性股息導致每股資產淨值(NAV)減少0.50美元。若不計入這筆一次性股息，每股資產淨值將升至26.02美元，即增加0.16美元，增幅為0.6%。

While last year saw markdowns to a small number of credits in our core BDC, slide 3 illustrates how our recent strong results have delivered a return on equity of 9.3% for the last 12 months, above the industry average of 7%. Additionally, our long-term average return on equity over the past 11 years of 10.2% is well above the BDC industry average of 6.9%. Our long-term return on equity has remained strong over the past decade plus being the industry (inaudible) the past 11 years and consistently positive every year.

儘管去年我們的核心 BDC 中的少量信貸出現降價，但幻燈片 3 顯示了我們最近的強勁業績如何在過去 12 個月中實現了 9.3% 的股本回報率，高於 7% 的行業平均水平。此外，我們過去 11 年的長期平均股本回報率為 10.2%，遠高於 BDC 行業平均 6.9%。過去 10 年來，我們的長期股本回報率一直保持強勁，而且在過去 11 年裡，我們的行業（聽不清楚）每年都保持正值。

Of note, the weighted average common shares outstanding in Q1 was 15.3 million, increasing from 14.5 million and 13.7 million shares for the last quarter and last year's first quarter, respectively.

值得注意的是，第一季加權平均流通普通股為 1,530 萬股，高於上一季的 1,450 萬股和去年第一季的 1,370 萬股。

Adjusted NII was $10.1 million this quarter, down from 29.3% -- down 29.3% from last year and up 26.2% from last quarter. This quarter's increase in adjusted NII as compared to the prior quarter was primarily due to the nonreoccurrence this quarter of the $2.4 million annual excise tax recognized in the prior quarter. The decrease from the previous year's first quarter was largely due to lower AUM from recent significant repayments and lower base interest rates. The weighted average interest rate on the core BDC portfolio of 11.5% this quarter compared to 12.6% as of the previous year's first quarter and 11.5% as of last quarter. The yield reduction from last year primarily reflects the SOFR base rate decreases over the past year.

本季調整後的 NII 為 1,010 萬美元，低於 29.3%——比去年下降 29.3%，比上一季成長 26.2%。本季調整後 NII 與上一季相比有所增加，主要是因為本季沒有再次發生上一季確認的 240 萬美元年度消費稅。與去年第一季相比有所下降，主要是由於近期大量還款導致的 AUM 下降以及基準利率下降。本季核心 BDC 投資組合的加權平均利率為 11.5%，而去年第一季為 12.6%，上季為 11.5%。收益率較去年同期的下降主要反映了SOFR基準利率在過去一年中的下降。

Total expenses for this first quarter 2026, excluding interest and debt financing expenses, base management fees and incentive fees and income and excise taxes decreased $0.1 million to $2.8 million as compared to $2.9 million last year and increased $1.4 million from $1.4 million last quarter. This represents 0.8% of average total assets on an annualized basis, unchanged from last quarter and down from 1% last year.

2026 年第一季的總支出（不包括利息和債務融資費用、基本管理費和激勵費以及所得稅和消費稅）較去年的 290 萬美元減少 10 萬美元至 280 萬美元，較上一季的 140 萬美元增加 140 萬美元。以年率計算，這佔平均總資產的 0.8%，與上一季持平，低於去年的 1%。

As you can see on slide 4, our assets under management have steadily and consistently risen since we took over the BDC 14 years ago despite a slight pullback recently reflecting significant repayments. This quarter saw significant repayments, again, offsetting solid originations. This recent AUM decline does not detract from our expectation of long-term AUM growth. The quality of our credits remain strong with only the two recently restructured Pepper Palace and Zollege credits on nonaccrual consistent with last quarter. Our management team is working diligently to continue this positive long-term trend as we deploy our significant levels of available capital into our pipeline while at the same time being appropriately cautious in this evolving credit and volatile economic environment.

正如您在幻燈片 4 中看到的，自 14 年前我們接管 BDC 以來，我們管理的資產一直在穩步增長，儘管最近由於大量償還而略有回落。本季出現了大量還款，再次抵銷了穩固的發放金額。近期 AUM 的下降並未影響我們對長期 AUM 成長的預期。我們的信貸品質依然強勁，只有最近重組的 Pepper Palace 和 Zollege 兩筆未計息信貸與上一季一致。我們的管理團隊正在努力延續這一積極的長期趨勢，我們將大量可用資本投入到我們的產品線中，同時在不斷變化的信貸和動盪的經濟環境中保持適當的謹慎。

With that, I would like to now turn the call over to Henri to review our financial results as well as the composition and performance of our portfolio.

現在，我想將電話轉給亨利，讓他回顧我們的財務表現以及投資組合的組成和表現。

Thank you, Chris. Moving on to slide 6. NAV was $396.4 million as of fiscal quarter end, a $3.7 million increase from last quarter and a $28.5 million increase from the same quarter last year. During this quarter, $6.4 million of new equity was raised at or above net asset value, respectively, through our ATM program. This chart also includes our historical NAV per share, which highlights how this important metric has increased 22 of the past 31 quarters, seeing a decrease this quarter solely due to the transition to monthly dividends in March, resulting in the March and April dividend record date both falling into the first fiscal quarter, reducing NAV per share by an additional $0.50. Excluding this onetime reduction, NAV per share would have risen to $26.02 reflecting a 0.6% increase.

謝謝你，克里斯。繼續看投影片 6。截至財政季末，資產淨值為 3.964 億美元，較上一季增加 370 萬美元，較去年同期增加 2,850 萬美元。本季度，我們透過 ATM 計劃籌集了 640 萬美元的新股本，相當於或超過了淨資產價值。這張圖表還包含了我們歷史每股資產淨值，突顯了這一重要指標在過去31個季度中22個季度有所增長，而本季度則出現下降，這完全是由於3月份轉為月度分紅，導致3月和4月的分紅記錄日期均落在第一財季，導致每股資產淨值再次減少0.50美元。若不計入這一次性的減損，每股資產淨值將升至26.02美元，增幅為0.6%。

Over the long term, our net asset value has steadily increased since 2011 and grown by $3.55 per share or 16% over the past 8 years. Also, we have again added the KPI slides 26 through 30 in the appendix at the end of the presentation that shows our income statement and balance sheet metrics for the past two years.

從長期來看，我們的淨資產價值自 2011 年以來穩步增長，在過去 8 年中每股增長 3.55 美元，增幅達 16%。此外，我們在簡報末尾的附錄中再次新增了 KPI 投影片 26 至 30，其中顯示了過去兩年的損益表和資產負債表指標。

Slide 30 is a new slide comparing our nonaccruals to the BDC Industry. You will see that our nonaccrual rate of 0.6% of cost is significantly lower than the industry average of 3.7%. And that the broader industry has experienced an increase in nonaccruals of 0.3% since the previous quarter, while ours have remained steady and low. This highlights the strength in credit quality of our core BDC portfolio.

投影片 30 是一張新投影片，將我們的不提項目與 BDC 產業進行了比較。您會發現，我們的成本未提列率為 0.6%，遠低於 3.7% 的行業平均值。自上一季以來，整個行業的不計提比率增加了 0.3%，而我們的不計提比率一直保持穩定且較低。這凸顯了我們核心 BDC 投資組合的信用品質優勢。

Moving on to slide 7, you will see a simple reconciliation of the major changes in adjusted NII and NAV per share on a sequential quarterly basis. Starting at the top, adjusted NII per share was up $0.10 in Q1 primarily due to: first, the nonrecurrence of the annual excise tax, which was $0.13 in the previous quarter related to unpaid spillover; and second, an increase of $0.09 in non-CLO net interest income, reflecting the full period impact of Q4 originations. This was offset by an increase in operating expenses, excluding excise taxes, and dilution from the increased net ATM and DRIP share count, reducing NII by $0.06 and $0.04, respectively.

翻到第 7 張投影片，您將看到按季度連續計算的調整後 NII 和每股 NAV 的重大變化的簡單對帳。從頂部開始，調整後的每股 NII 在第一季度上漲了 0.10 美元，主要原因是：首先，年度消費稅沒有再次發生，上一季度與未付溢出相關的年度消費稅為 0.13 美元；其次，非 CLO 淨利息收入增加了 0.09 美元，反映了第四季度發起的整個期間的影響。這被營業費用的增加（不包括消費稅）以及淨 ATM 和 DRIP 股份數量增加的稀釋所抵消，分別導致 NII 減少 0.06 美元和 0.04 美元。

On the lower half of the slide, NAV per share decreased by [$0.34] primarily due to the $0.50 reduction from the change to a monthly dividend payment structure discussed earlier. Net realized gains and unrealized depreciation added $0.25 to NAV per share. There was no dilution from the ATM and DRIP program.

在投影片的下半部分，每股淨值減少了 [0.34 美元]，主要原因是由於前面討論的每月股息支付結構變化導致每股減少了 0.50 美元。淨實現收益和未實現折舊使每股資產淨值增加 0.25 美元。ATM 和 DRIP 計劃並未造成稀釋。

Slide 8 outlines the dry powder available to us as of quarter end, which totaled $430.3 million. This was spread between our available cash, undrawn SBA debentures and undrawn secured credit facility. This quarter end level of available liquidity allows us to grow our assets by an additional 44% without the need for external financing, with $224 million of quarter end cash available and that's fully accretive to NII when deployed, and $136 million of available SBA debentures with its low-cost pricing also very accretive. In addition, all $301 million of our baby bonds, effectively all our 6% plus debt is callable now, creating a natural protection against potential continuing future decreasing interest rates, which should allow us to protect our net interest margin, if needed. These calls are also available to be used prospectively to reduce current debt.

投影片 8 概述了截至季末我們可用的乾粉，總額為 4.303 億美元。這筆資金分佈在我們的可用現金、未提取的 SBA 債券和未提取的擔保信貸額度之間。本季末的可用流動資金水準使我們能夠在不需要外部融資的情況下將資產額外增加 44%，季度末有 2.24 億美元的可用現金，部署後可完全增值至 NII，而 1.36 億美元的可用 SBA 債券由於其低成本定價也非常具有增值性。此外，我們全部 3.01 億美元的嬰兒債券（實際上我們所有 6% 以上的債務）現在都可以贖回，從而對未來可能持續下降的利率形成自然保護，如果需要，這應該可以讓我們保護我們的淨利差。這些電話也可以用於前瞻性地減少當前債務。

We remain pleased with our available liquidity and leverage position, including our access to diverse sources of both public and private liquidity and especially taking into account the overall conservative nature of our balance sheet. Also, our debt is structured in such a way that we have no BDC covenants that can be stressed during volatile times, especially important in the current economic environment.

我們對我們的可用流動性和槓桿狀況仍然感到滿意，包括我們能夠獲得多種公共和私人流動性來源，特別是考慮到我們的資產負債表的整體保守性質。此外，我們的債務結構使得我們沒有在動盪時期承受壓力的 BDC 契約，這在當前的經濟環境下尤其重要。

Now I would like to move on to slides 9 through 12 and review the composition and yield of our investment portfolio. Slide 9 highlights that we have $968 million of AUM at fair value and this is invested in 46 portfolio companies, one CLO fund, one joint venture and various new BB investments. Our first lien percentage is 86.9% of our total investments of which 22% is in first lien last out positions.

現在我想轉到第 9 至 12 張投影片，回顧一下我們的投資組合的組成和收益率。投影片 9 強調，我們擁有 9.68 億美元的公允價值 AUM，投資 46 家投資組合公司、一個 CLO 基金、一個合資企業和各種新的 BB 投資。我們的第一留置權百分比佔總投資的 86.9%，其中 22% 為第一留置權最後出資額。

On slide 10, you can see how the yield on our core BDC assets, excluding our CLO investments, has changed over time especially this past year, reflecting the recent decreases to interest rates. This quarter, our core BDC yield remained unchanged from last quarter at 11.5% despite the 10 basis points reduction in average SOFR. The CLO yield decreased to 13.7% from 16.4% last quarter, reflecting the inclusion of the new BB CLO debt investments to this category that have a yield of approximately 10%.

在第 10 張投影片上，您可以看到我們的核心 BDC 資產（不包括 CLO 投資）的收益率是如何隨時間變化的，尤其是在過去一年，這反映了近期利率的下降。本季度，儘管平均 SOFR 下降了 10 個基點，但我們的核心 BDC 收益率與上一季相比保持不變，為 11.5%。CLO 收益率從上一季的 16.4% 下降至 13.7%，反映了將新的 BB CLO 債務投資納入此類別，其收益率約為 10%。

Slide 11 shows how our investments are diversified through primarily the US. And on slide 12, you can see the industry breadth and diversity that our portfolio represents spread over 40 distinct industries in addition to our investments in the CLO JV and BB CLO debt securities, which are all included as structured finance securities.

幻燈片 11 展示了我們的投資如何主要透過美國實現多元化。在第 12 張投影片上，您可以看到我們的投資組合所代表的行業廣度和多樣性，除了我們對 CLO JV 和 BB CLO 債務證券的投資外，還涵蓋 40 個不同的行業，這些都包含在結構性融資證券中。

Moving on to slide 13, 7.9% of our investment portfolio consists of equity interest, which remain an important part of our overall investment strategy. This slide shows that for the past 13 fiscal years, we had a combined $42.5 million of net realized gains from the sale of equity interest or sale or early redemption of other investments. This includes $2.2 million of realized gains on the sale of our identity equity investment this quarter. This long-term realized gain performance highlights our portfolio credit quality, has helped grow our NAV and is reflected in our healthy long-term ROE.

延續第 13 張投影片，我們的投資組合中有 7.9% 由股權構成，這仍然是我們整體投資策略的重要組成部分。這張投影片顯示，在過去的 13 個財政年度中，我們透過出售股權或出售或提前贖回其他投資共計獲得了 4,250 萬美元的淨實現收益。其中包括本季出售身份股權投資所實現的 220 萬美元收益。這一長期實現收益表現凸顯了我們的投資組合信用質量，有助於提高我們的資產淨值，並反映在我們健康的長期股本回報率中。

That concludes my financial and portfolio review. Our Chief Investment Officer, Michael Grisius, will now provide an overview of the investment market.

我的財務和投資組合審查到此結束。我們的首席投資長 Michael Grisius 現在將概述投資市場。

Thank you, Henri. Today, I will give an update on the market since we recently spoke with everyone in May and then comment on our current portfolio performance and investment strategy. Year-to-date deal volumes in our market have been down significantly every month as compared to 2024 and are down further still as compared to 2021 through 2023. We believe that M&A activity will invariably revert to historical levels, but that pickup in deal volume appears to be postponed for the time being.

謝謝你，亨利。今天，我將介紹自我們五月與大家交談以來的市場最新情況，然後評論我們當前的投資組合表現和投資策略。與 2024 年相比，我們市場今年迄今的交易量每月都在大幅下降，與 2021 年至 2023 年相比則進一步下降。我們相信，併購活動將不可避免地恢復到歷史水平，但交易量的回升似乎暫時被推遲。

The combination of historically low M&A volume in the lower middle market and an abundant supply of capital is causing spreads to tighten and leverage to remain full as lenders compete to win deals especially premium ones. We've also experienced repayment activity from some of our lower leverage loans being refinanced on more favorable terms. The historically low deal volumes we're experiencing has made it more difficult to find quality new platform investments than in prior periods. As we noted on last quarter's call, this may naturally prompt the question of -- what is our approach to operating in this difficult asset deployment climate.

中低端市場併購交易量處於歷史低位，加上資本供應充裕，導致利差收窄，槓桿率保持較高水平，因為貸款機構競相贏得交易，尤其是優質交易。我們也經歷了一些低槓桿貸款的償還活動，這些貸款以更優惠的條件進行了再融資。我們目前經歷的交易量處於歷史低位，這使得尋找優質的新平台投資比以往更加困難。正如我們在上個季度的電話會議上所指出的，這自然會引發一個問題：在這種困難的資產部署環境下，我們的營運方式是什麼。

First, the Saratoga management team has successfully managed through a number of credit cycles over many years and that experience has made us particularly aware of being disciplined when making investment decisions and being proactive in managing our portfolio. Taking this approach has allowed us to produce unlevered realized returns in our core non-CLO portfolio of 15%. The weighted average return on our exits this quarter were consistent with our track record at 14.9%. We'll continue to invest in high-quality assets and will not lower our investment standards and take on more risk than we feel is prudent just because the market is presently difficult. We believe our shareholders will appreciate this approach in the long run.

首先，薩拉託加管理團隊多年來成功度過了多個信貸週期，這些經驗使我們特別意識到在做出投資決策時要嚴守紀律，並積極主動地管理我們的投資組合。採用這種方法使我們能夠在核心非 CLO 投資組合中實現 15% 的無槓桿實現回報。本季我們退出的加權平均報酬率與我們的往績一致，為 14.9%。我們將繼續投資優質資產，不會因為目前市場困難而降低投資標準並承擔超出我們認為合理的風險。我們相信，從長遠來看，我們的股東會欣賞這種做法。

Second, we're greatly expanding our business development efforts and are investing in resources to provide greater bandwidth for our professionals to dedicate themselves to this effort. We have a new Managing Director joining us this summer, who has a strong origination and investment track record in our markets. We've also recently hired a VP of Portfolio Management and a business development analyst, and we have two new investment associates joining us this summer. All of these investments will allow our professionals to better leverage themselves and shift more emphasis on investment origination.

其次，我們正在大力擴展業務發展力度，並投入資源，為我們的專業人員提供更大的頻寬，使他們能夠全心投入這項工作。今年夏天，我們有一位新董事總經理加入我們，他在我們的市場擁有豐富的發起和投資經驗。我們最近也聘請了一位投資組合管理副總裁和一位業務發展分析師，今年夏天還有兩位新的投資助理加入我們。所有這些投資將使我們的專業人員能夠更好地發揮自己的優勢，並將更多的重點放在投資發起上。

While we have developed a strong presence in the lower end of the middle market, the number of companies in our marketplace is vast compared to the traditional middle market and is occupied with hundreds of thousands of businesses. We believe the number of deal sources in our market that we have yet to build relationships with far exceeds the number that we have.

雖然我們在中端市場的低端已經佔據了強大的地位，但與傳統的中端市場相比，我們市場上的公司數量非常龐大，有數十萬家企業。我們相信，在我們的市場中，尚未建立關係的交易來源數量遠遠超過我們已經建立關係的數量。

Further, our market benefits from a natural underpinning of deal flow, driven by business owners seeking to transition ownership as they age. We're in the early stages of our expanded business development initiatives, but have already seen some positive results in our current pipeline and in the most recent portfolio company we closed in April.

此外，我們的市場受益於交易流的自然支撐，這種支撐是由企業主隨著年齡增長而尋求所有權轉移所推動的。我們正處於擴大業務發展計劃的早期階段，但目前我們已在現有管道和 4 月關閉的最新投資組合公司中看到了一些積極成果。

Third, our existing portfolio serves as a healthy source of deal flow. Our payoffs, as again seen this quarter, tend to be lumpy as our portfolio investments reached scale and maturity, while our new portfolio companies tend to be small initially, and provide an embedded resource for asset deployment as we support their growth. Because of the nature of the way we invest our capital in this manner, follow-on activity has exceeded our new portfolio company deployment in each of our past five fiscal years.

第三，我們現有的投資組合是健康的交易流來源。正如本季再次看到的那樣，隨著我們的投資組合達到規模和成熟度，我們的回報往往是不穩定的，而我們的新投資組合公司最初往往規模較小，並在我們支持其成長的同時為資產部署提供嵌入式資源。由於我們以這種方式投資資本的本質，在過去五個財年中，後續活動都超過了我們新投資組合公司的部署。

In summary, the way we're approaching the currently challenging environment is to first stay disciplined on asset selection; second, invest in and greatly expand our business development efforts in a market that is still largely underpenetrated by us; and third, continue to support our existing healthy portfolio companies as they pursue growth. The relationships and overall presence we've built in the marketplace, combined with our ramped up business development initiatives, give us confidence in our ability to achieve healthy portfolio growth in a manner that we expect to be accretive to our shareholders in the long run.

總而言之，我們應對當前充滿挑戰的環境的方式是：首先，嚴格選擇資產；其次，在我們尚未完全滲透的市場中進行投資並大力擴展我們的業務發展力度；第三，繼續支持我們現有的健康投資組合公司追求成長。我們在市場上建立的關係和整體影響力，加上我們不斷加強的業務發展計劃，讓我們有信心實現健康的投資組合成長，並期望從長遠來看為股東帶來增值。

In the midst of these market conditions, we had $50 million of gross originations in the lower end of the middle market this quarter.

在這樣的市場條件下，本季我們在中階市場低階的總發起額達到 5,000 萬美元。

Now before leaving this topic, I'll also point out that we continue to believe that the lower end of the middle market is the best place to be in terms of capital deployment. As compared to the larger end of the middle market, the due diligence we're able to perform when evaluating an investment is much more robust. The capital structures are generally more conservative with less leverage and more equity. The legal protections and covenant features in our documents are considerably stronger and our ability to actively manage our portfolio through ongoing interaction with management and ownership is greater. As a result, we continue to believe that the lower middle market offers the best risk-adjusted returns, and our track record of realized returns reflects this.

在結束這個主題之前，我還要指出，我們仍然相信，就資本配置而言，中端市場的低端是最佳位置。與中端市場的較大端相比，我們在評估投資時能夠進行的盡職調查更加嚴格。資本結構通常較保守，槓桿率較低，股權較高。我們的文件中的法律保護和契約特徵更加強大，我們透過與管理層和所有者的持續互動來積極管理投資組合的能力也更強。因此，我們仍然相信中低端市場提供最佳的風險調整回報，而我們實現的回報記錄也反映了這一點。

A new initiative I'd like to highlight is that we have recently seen a new opportunity to invest BB and BBB CLO debt securities. These investments have performed well through numerous economic cycles in the past, experiencing very low long-term default rates while also providing enhanced yields relative to comparably rated corporate debt securities. Further, our underwriting process driven by quantitative metrics that measure individual manager and deal level performance allows us to identify those managers and deals we believe will outperform over the long term, and provide attractive risk-adjusted returns for our shareholders.

我想強調的一項新舉措是，我們最近看到了投資 BB 和 BBB CLO 債務證券的新機會。這些投資在過去的多個經濟週期中表現良好，長期違約率非常低，同時相對於同等評級的公司債務證券也提供了更高的收益率。此外，我們的承銷流程由衡量個人經理和交易層面績效的量化指標所驅動，這使我們能夠識別出那些我們認為將在長期內表現優異的經理和交易，並為我們的股東提供有吸引力的風險調整回報。

During this past quarter, we invested 9 different CLO BB securities across seven different CLO managers for a total notional amount of $13 million. We anticipate third-party managed CLO BBs and to a lesser extent, CLO BBBs will play a role in our investment portfolio going forward, and will also allow us to take advantage of dislocations in the liquid loan and high-yield credit markets.

在過去的一個季度，我們透過 7 個不同的 CLO 經理投資了 9 種不同的 CLO BB 證券，總名目金額為 1300 萬美元。我們預計第三方管理的 CLO BB 以及程度較小的 CLO BBB 將在我們未來的投資組合中發揮作用，同時也使我們能夠利用流動貸款和高收益信貸市場的錯位。

Our underwriting bar remains high as usual. In a very tough market, yet we continue to find opportunities to deploy capital. As seen on slide 14, our more recent performance has been characterized by continued asset deployment to existing portfolio companies. As demonstrated with 8 follow-ons in calendar year 2025 thus far, and we have invested in three new platform investments this calendar year as well. More recently, during calendar Q2, we closed one new portfolio company.

我們的承保標準一如既往地高。在非常艱難的市場中，我們仍在繼續尋找部署資本的機會。如投影片 14 所示，我們最近的表現特點是繼續向現有投資組合公司部署資產。正如迄今為止在 2025 日曆年中已有 8 個後續項目所示，並且我們今年還投資了三個新的平台。最近，在第二季度，我們關閉了一家新的投資組合公司。

Overall, our deal flow is increasing as our business development efforts continue to ramp up. Our consistent ability to generate new investments over the long term, despite ever-changing and increasingly competitive market dynamics is a strength of ours.

整體而言，隨著我們業務發展力度的不斷加大，我們的交易量也不斷增加。儘管市場不斷變化且競爭日益激烈，我們始終能夠長期持續地進行新的投資，這是我們的優勢。

Portfolio management continues to be critically important, and we remain actively engaged with our portfolio companies and in close contact with our management teams. They remain the same two portfolio companies that we are actively managing as discussed in previous quarters. But in general, our portfolio companies are healthy and the fair value of our core BDC portfolio is 1.7% above its cost. 86.9% of our portfolio is in first lien debt and generally supported by strong enterprise values in industries that have historically performed well in stressed situations. We have no direct energy or commodities exposure. In addition, the majority of our portfolio is comprised of businesses that produce a high degree of recurring revenue and have historically demonstrated strong revenue retention.

投資組合管理仍然至關重要，我們仍然積極與我們的投資組合公司合作並與我們的管理團隊保持密切聯繫。正如前幾季所討論的，它們仍然是我們積極管理的兩家投資組合公司。但總體而言，我們的投資組合公司狀況良好，我們的核心 BDC 投資組合的公允價值比其成本高出 1.7%。我們投資組合中的 86.9% 為第一留置權債務，並且通常受到在壓力環境下歷來表現良好的行業的強大企業價值的支撐。我們沒有直接的能源或商品風險。此外，我們的投資組合中大部分都是那些產生大量經常性收入並且歷史上表現出強勁收入保留率的企業。

At quarter end, we have the same two investments on nonaccrual, namely Pepper Palace and Zollege consistent with last quarter. We continue to hold them on nonaccrual following their restructurings with Zollege particularly demonstrating notable improvement in company performance.

截至季末，我們有兩項未提列的投資，即 Pepper Palace 和 Zollege，與上一季一致。在 Zollege 重組之後，我們繼續將其視為非應計資產，尤其體現在公司業績的顯著改善。

Now looking at leverage on the same slide, you can see that industry debt multiples increased north of 5x with unitranche loans in the mid-5s. Total leverage for our overall portfolio decreased slightly to 5.22x excluding Pepper Palace and Zollege, reflecting lower leverage across several portfolio companies.

現在查看同一張幻燈片上的槓桿率，您可以看到行業債務倍數增加了 5 倍以上，而單一貸款則增加了 5 倍左右。除 Pepper Palace 和 Zollege 外，我們整體投資組合的總槓桿率略微下降至 5.22 倍，這反映出幾家投資組合公司的槓桿率較低。

Slide 15 provides more data on our deal flow. As you can see, the top of our deal pipeline is significantly up from the end of calendar year 2024, despite the current M&A activity in the lower middle market remaining low. This recent increase of deal sourced as is a result of our recent business development initiatives with 18 of the term sheets issued over the last 12 months being from deals that came from new relationships.

投影片 15 提供了更多有關我們的交易流程的數據。如您所見，儘管目前中低端市場的併購活動仍然較低，但我們的交易管道的頂部從 2024 年底開始顯著上升。近期交易數量的增加是我們近期業務發展舉措的結果，過去 12 個月發布的條款清單中有 18 份來自新關係的交易。

Overall, the significant progress we've made in building broader and deeper relationships in the marketplace is noteworthy because it strengthens the dependability of our deal flow and reinforces our ability to remain highly selective as we rigorously screen opportunities to execute on the best investments.

總體而言，我們在建立更廣泛、更深入的市場關係方面所取得的重大進展是值得注意的，因為它增強了我們交易流程的可靠性，並增強了我們在嚴格篩選機會以執行最佳投資時保持高度選擇性的能力。

As you can see on slide 16, our overall portfolio credit quality and returns remain solid. As demonstrated by the actions taken and outcomes achieved on the nonaccrual and watch list credits we had over the past year. Our team remains focused on deploying capital and strong business models where we are confident that under all reasonable scenarios, the enterprise value of the businesses will sustainably exceed the last dollar of our investments.

正如您在第 16 張投影片上看到的，我們的整體投資組合信用品質和回報仍然穩健。正如我們過去一年針對不提列和觀察名單信用所採取的行動和所取得的成果所證明的那樣。我們的團隊仍然專注於部署資本和強大的商業模式，我們相信，在所有合理的情況下，企業的企業價值將持續超過我們投資的最後一美元。

Our approach and underwriting strategy has always been focused on being thorough and cautious at the same time. Since our management team began working together almost 15 years ago, we've invested $2.36 billion in 122 portfolio companies and have had just three realized economic losses on these investments. Over that same time frame, we've successfully exited 82 of those investments, achieving gross unlevered realized returns of 15% on $1.26 billion of realizations. Even taking into account the recent credit write-downs of a few discrete credits, our combined realized and unrealized returns on all capital invested equal 13.4%.

我們的方法和核保策略始終注重全面和謹慎。自從我們的管理團隊大約 15 年前開始合作以來，我們已經向 122 家投資組合公司投資了 23.6 億美元，而這些投資中只有三家公司出現了經濟損失。在同一時間段內，我們成功退出了 82 項投資，實現了 12.6 億美元的 15% 的無槓桿總回報。即使考慮到最近對一些離散信貸的減記，我們所有投資資本的已實現和未實現回報率仍達到 13.4%。

Total realized gains for the quarter were $2.9 million, of which, this quarter's identity realization produced a gross IRR of 22.6% with a $2.2 million realized gain. Continuing our track record of successful capital deployment. We think this performance profile is particularly attractive for a portfolio predominantly constructed with first lien debt.

本季實現的總收益為 290 萬美元，其中本季的身份實現產生了 22.6% 的總 IRR，實現的收益為 220 萬美元。延續我們成功的資本配置記錄。我們認為，對於主要由第一留置權債務所構成的投資組合來說，這種績效狀況尤其有吸引力。

Consistent with previous couple of quarters, we have only two investments on nonaccrual. Although both Pepper Palace and Zollege have been restructured, we are still classifying Pepper Palace's red and Zollege is yellow, with a combined fair value of $6.9 million, including equity. Pepper Palace continues to be managed actively with several initiatives underway. Zollege has demonstrated notable improvements in company performance that resulted in a $1.1 million appreciation in its value this quarter.

與前幾季一致，我們只有兩項非應計投資。儘管 Pepper Palace 和 Zollege 都已重組，但我們仍將 Pepper Palace 歸類為紅色，將 Zollege 歸類為黃色，其合併公允價值為 690 萬美元（包括股權）。胡椒宮繼續積極管理，並正在實施多項措施。Zollege 的公司業績顯著改善，本季其價值升值 110 萬美元。

In addition, during the quarter, our overall core non-CLO portfolio was marked up by $2.6 million of net appreciation including Pepper Palace and Zollege, reflecting the strength of our overall portfolio. Our overall investment approach has yielded exceptional realized returns and recovery of our invested capital and our long-term performance remained strong as seen by our track record on this slide.

此外，在本季度，包括 Pepper Palace 和 Zollege 在內的整體核心非 CLO 投資組合淨增值 260 萬美元，反映了我們整體投資組合的實力。我們的整體投資方法已獲得卓越的實際回報並回收了投資資本，正如這張投影片上的業績記錄所示，我們的長期業績仍然強勁。

Now moving on to slide 17. You can see our second SBIC license is fully funded and deployed, although there is cash available there to invest in follow-ons and we are currently ramping up our new SBIC III license with $136 million of lower cost, undrawn debentures available, allowing us to continue to support US small businesses, both new and existing.

現在翻到第 17 張投影片。您可以看到，我們的第二個 SBIC 許可證已完全獲得資金並已部署，儘管那裡還有現金可用於投資後續項目，但我們目前正在通過 1.36 億美元的低成本、未提取的債券來擴大我們的新 SBIC III 許可證，這使我們能夠繼續支持美國新舊小型企業。

This concludes my review of the market, and I'd like to turn the call back to our CEO. Chris?

我對市場的回顧到此結束，我想將電話轉回給我們的執行長。克里斯？

Thank you, Mike. As outlined on slide 18, our latest dividend of $0.75 per share in aggregate for the quarter ended May 31, 2025, was paid in three monthly increments of $0.25. Recently, we declared that same level of $0.75 for the quarter ended August 31, 2025, marking the second quarter of our new dividend payment structure. The Board of Directors will continue to evaluate the dividend level on at least a quarterly basis considering both company and general economic factors, including the current interest rate and macro environments impact our earnings.

謝謝你，麥克。如第18張投影片所述，截至2025年5月31日的季度，我們最新的股利為每股0.75美元，分三個月支付，每次0.25美元。最近，我們宣布截至2025年8月31日的季度股息水準與上一季相同，為每股0.75美元，這標誌著我們新的股息支付結構已實施了第二個季度。董事會將繼續至少每季評估一次股利水平，同時考慮公司和一般經濟因素，包括當前利率和宏觀環境對我們收益的影響。

Moving to slide 19. Our total return over the last 12 months, which includes both capital appreciation and dividends, has generated total returns of 22%, beating the BDC indexes 3% for the same period by over 7x.

移至投影片 19。我們過去 12 個月的總回報（包括資本增值和股息）產生了 22% 的總回報率，比同期 BDC 指數 3% 的回報率高出 7 倍以上。

Our longer-term performance is outlined on the next slide 20. Also our 5-year and 3-year returns, both place us above the BDC index. And since Saratoga took over management of the BDC in 2010, our total return has been 826% versus the industry's 294%.

我們的長期表現概述在下一張投影片 20 中。此外，我們的 5 年和 3 年回報率均高於 BDC 指數。自 2010 年 Saratoga 接管 BDC 管理以來，我們的總回報率為 826%，而產業回報率為 294%。

On slide 21, you can further see our last 12 months' performance placed in the context of the broader industry and specific to certain key performance metrics. We continue to focus on our long-term metrics such as return on equity, NAV per share, NII yield and dividend growth and coverage, all of which reflect the value our shareholders are receiving. While NAV per share growth and dividend coverage are lagging in this past year, this is largely due to last year's two discrete nonaccrual investments previously discussed, as well as the aforementioned impact of the shift to a new dividend structure impacting this quarter's NAV per share growth.

在第 21 張投影片上，您可以進一步看到我們過去 12 個月在更廣泛的產業背景下的表現，以及特定關鍵績效指標的表現。我們繼續關注我們的長期指標，例如股本回報率、每股資產淨值、NII 收益率以及股息成長和覆蓋率，所有這些都反映了我們的股東所獲得的價值。雖然每股淨值成長和股息覆蓋率在過去一年中有所滯後，但這主要是由於之前討論過的去年兩項獨立的非應計投資，以及前面提到的轉向新股息結構對本季度每股淨資產值增長的影響。

In addition, we had significant recent repayments that have reduced Q1's NII as AUM has recently shrunk, resulting in us having healthy levels of cash to deploy. In this volatile macro environment, we will be prudent in deploying our significant available capital into strong credit opportunities that meet our high underwriting standards. We also continue to be one of the few BDCs who have grown NAV accretively over the long term with our long-term return on equity at 1.5x the industry average.

此外，由於 AUM 最近縮減，我們最近進行了大筆還款，從而減少了第一季的 NII，導致我們擁有健康的現金水準可供部署。在這種動盪的宏觀環境下，我們將謹慎地將大量可用資本投入到符合我們高承保標準的強勁信貸機會中。我們也繼續成為少數幾家資產淨值長期持續成長的 BDC 之一，我們的長期股本回報率為行業平均水平的 1.5 倍。

Moving on to slide 22. All of our initiatives discussed on this call are designed to make Saratoga investment a leading BDC that is attractive to the capital markets community. We believe that our differentiated performance characteristics outlined in this slide will help drive the size and quality of our investor base, including adding more institutions. These differentiating characteristics, many previously discussed include maintaining one of the highest levels of management ownership in the industry at 11.1%, ensuring that we are strongly aligned with our shareholders.

翻到第 22 張投影片。我們在本次電話會議上討論的所有舉措都是為了使 Saratoga 投資成為對資本市場界有吸引力的領先 BDC。我們相信，本投影片中概述的差異化業績特徵將有助於擴大我們的投資者群體的規模和質量，包括增加更多的機構。這些差異化特徵（許多之前已經討論過）包括保持行業最高水準的管理所有權（11.1%），確保我們與股東保持一致。

Looking ahead on slide 23, as we navigate through a reshaped yield curve environment with decreasing short term and increasing long-term rates and an uncertain economic outlook in the face of an ever-evolving geopolitical landscape remain confident that our reputation, experience management team, robust pipeline and historically strong underwriting standards and time and market tested investment strategy will serve us well to continue to steadily increase our portfolio size, quality and investment performance over the long term. This will allow us to deliver exceptional risk-adjusted returns to shareholders and to navigate through the current challenges in the market and uncover opportunities in the current and future environment.

展望第 23 張投影片，當我們在重塑的殖利率曲線環境中前進時，短期利率下降、長期利率上升，面對不斷變化的地緣政治格局，經濟前景不明朗，我們仍然相信，我們的聲譽、經驗豐富的管理團隊、強大的管道和歷史上強大的承保標準以及經過時間和市場考驗的投資策略將很好地幫助我們繼續穩步增加我們的投資績效。這將使我們能夠為股東提供卓越的風險調整回報，並應對當前市場挑戰並發現當前和未來環境中的機會。

Recognizing the challenges posed by the current tariff discussions and the volatility seen in the broader macro environment, we also believe that our strong balance sheet, capital structure and liquidity places us in a strong position to successfully address these types of uncertainties.

認識到當前關稅討論和更廣泛的宏觀環境中的波動所帶來的挑戰，我們也相信，我們強大的資產負債表、資本結構和流動性使我們處於有利地位，能夠成功應對這些類型的不確定性。

In closing, I would again like to thank all of our shareholders for their ongoing support. I would like to now open the call for questions.

最後，我再次感謝所有股東的持續支持。現在我想開始提問。

(Operator Instructions) Erik Zwick, Lucid Capital Markets.

（操作員指示）Erik Zwick，Lucid Capital Markets。

I hope you're all doing well. I wanted to kind of just start on your commitment to kind of getting back to AUM expansion, and I realize there's some variables outside of your control that have kind of driven the declines over the past couple of quarters. But as you kind of frame up the opportunities now, it sounds like the efforts you've made on kind of the nonsponsored origination side are showing some positive trends. I think the things that are harder to predict now are just the level of prepayments going forward, and I guess, to some extent, you may have some visibility into potential relatively large maturities that could be coming due over the next quarter or 2. But as you kind of frame those all together, what is your expectation for your ability to return growing the portfolio over the next quarter or 2?

我希望你們一切都好。我想先談談您對恢復 AUM 擴張的承諾，我意識到有一些您無法控制的變數導致了過去幾個季度的下滑。但是，當您現在建立機會時，聽起來您在非贊助發起方面所做的努力正在顯示出一些積極的趨勢。我認為現在更難預測的是未來的預付款水平，我想，在某種程度上，您可能會對未來一兩個季度可能到期的潛在相對較大的到期款項有一定的了解。但是，當您將所有這些因素綜合起來時，您對未來一兩個季度投資組合回報成長的能力有何預期？

Well, maybe I'll start and then hand it off to Mike. Look, I think you expressed it very well. Redemptions are difficult to predict as our originations. And I think the -- I think one of the important things that we have focused on is portfolio quality. And I think Henri have some slides on some metrics on them where you can see that while our AUM has declined due to net originations being less than our redemptions, the credit quality of our portfolio remains very, very strong. Credit performance, we think, significantly outperforms the industry. So we have a period of time here where the environment, there's kind of a significant inflow of capital into the private credit industry. And at the same time, with tariffs and other things, the total M&A market has slowed down, M&A has generally been one of the big drivers of activity and financings.

好吧，也許我會開始，然後把它交給麥克。看，我認為你表達得很好。贖回就像我們的起源一樣難以預測。我認為——我們關注的重要事項之一是投資組合品質。我認為 Henri 有一些關於一些指標的幻燈片，從中你可以看到，雖然我們的 AUM 因淨發起量低於贖回量而下降，但我們投資組合的信用品質仍然非常非常強勁。我們認為，信用表現明顯優於同業。因此，我們現在處於這樣一個時期，即有大量資本流入私人信貸產業。同時，由於關稅和其他因素，整個併購市場已經放緩，而併購通常是活動和融資的主要驅動力之一。

And so there's a lot of refinancing activity, but not as much M&A driven. And so you kind of have a little bit of a mismatch in supply and demand, and we're trying to manage that very, very carefully because credit quality in the long -- putting some more assets to work that are not going to be great assets is certainly not in our interest or the shareholders' interest. And so we had to be cautious. I mean we've had a lot of opportunities, but we haven't executed on as many of them because of the quality and in some instances, pricing, but mostly it's credit quality.

因此，有許多再融資活動，但併購活動並不多。因此，供需之間會存在一些不匹配的情況，我們正非常小心地處理這個問題，因為從長期來看，信貸品質——投入一些不會成為優質資產的資產肯定不符合我們的利益或股東的利益。因此我們必須謹慎。我的意思是，我們有很多機會，但由於品質問題，在某些情況下是定價問題，我們並沒有抓住很多機會，但主要是信用品質問題。

So with all that said, we've got a very -- we've got a reinvigorated and invigorated new business effort. I think Mike mentioned, we've got -- we've been hiring more new people, and we've got a very robust pipeline and we think that's going to come through for us over time. But one of the things we have learned is you just got to be very careful and pick your spots and pick your markets and being aggressive for the sake of AUM growth as opposed to sticking to our real knitting, which is quality credits is going to be the most important thing in the long run. And Mike, I don't know if you want to add to that?

所以，綜上所述，我們已經獲得了非常——我們已經獲得了重新煥發活力的新業務努力。我想麥克提到過，我們一直在招募更多的新員工，我們擁有非常強大的人才儲備管道，我們認為隨著時間的推移，這些都會實現。但我們學到的一件事是，你必須非常小心，選擇你的位置，選擇你的市場，為了 AUM 的成長而積極進取，而不是堅持我們的真正目標，從長遠來看，優質信貸將是最重要的。麥克，我不知道您是否想補充一點？

Yes. Let me add a little bit of additional color. And I'll also just address one of the things that you had brought up to directly, which is that on the redemption side, as Chris mentioned, that's very unpredictable. But I would say that best that we know, we don't see anything that's looming, if you will. So we would expect that the redemption experience that we'd have would be sort of consistent with what we've experienced in the past generally.

是的。讓我添加一點額外的顏色。我還將直接解決您提出的一個問題，即在贖回方面，正如克里斯所提到的，這是非常難以預測的。但我想說的是，據我們所知，我們沒有看到任何即將發生的事情，如果你願意的話。因此，我們期望我們所擁有的救贖體驗與我們過去所經歷的大致一致。

Also, our pipeline is growing and not only with non-sponsored deals, but there are a number of lower middle market sponsors and investor groups that we're forming relationships with that we haven't historically, and it's just due to the fact that the lower end of the middle market that we operate in is so fragmented that it's amazing. I mean we'll go to a new city and make the rounds with four or five of the groups that we know, and we'll come back with new groups that we didn't know of almost every time we visit the countryside looking for deal opportunities.

此外，我們的管道也不斷擴大，不僅包括非贊助交易，還有許多中低端市場贊助商和投資者團體，我們正在與他們建立關係，而我們以前從未與他們建立過關係，這只是因為我們經營的中低端市場非常分散，所以這是令人驚訝的。我的意思是，我們會去一個新的城市，和我們認識的四五個團體一起巡視，然後幾乎每次我們去鄉村尋找交易機會時，我們都會帶著我們不認識的新團體回來。

I'll step back a little. I mean, there's one -- and I think this is probably just healthy to think about in general, just in terms of our business. We -- as we mentioned, we very much like being at the lower end of the middle market. It's one of the reasons we believe that we've produced such outsized returns to get 15% returns over time with very low volatility and very low loss experience in mostly senior debt is to us just a very, very attractive place to be.

我稍微退後一點。我的意思是，有一個——而且我認為從總體上考慮這可能是健康的，就我們的業務而言。正如我們所提到的，我們非常喜歡處於中端市場的低端。我們相信，這就是為什麼我們能夠創造如此豐厚的回報的原因之一，即在長期內獲得 15% 的回報，同時波動性非常低，損失非常低，主要在優先債務方面的經驗對我們來說是一個非常非常有吸引力的地方。

Being at the lower end of the middle market allows us to do much better underwriting, we can be far more value add with our borrowers and our ownership group, much less commoditized than what you see at the upper end of the middle market, where they're just kind of responding to a grid and it's largely who's going to get the lowest price, the most leverage in the easiest terms, i.e., who's going to be most borrower-friendly. In our case, we actually have a chance to create real relationships with our management teams and our ownership groups. We typically have board observation rights or very active interaction with the management teams that we're lending to. And that interaction allows us to build a really healthy pipeline of follow-ons.

處於中端市場的低端使我們能夠進行更好的承保，我們可以為借款人和所有權集團增加更多價值，商品化程度遠低於中端市場的高端，在高端市場，他們只是對電網做出反應，而這主要取決於誰能以最簡單的條件獲得最低的價格、最大的槓桿，即誰對借款人最友好。就我們而言，我們實際上有機會與我們的管理團隊和所有權集團建立真正的關係。我們通常擁有董事會觀察權或與我們貸款的管理團隊進行非常積極的互動。這種互動使我們能夠建立真正健康的後續管道。

And I think as I mentioned in the prepared remarks, if you went back over the last five years, our follow-on activity actually exceeds our new origination platform activity in dollars reflective of sort of what I just described in terms of the type of relationship that we have with our borrowers.

我認為，正如我在準備好的發言中提到的那樣，如果回顧過去五年，我們的後續活動實際上超過了我們新的發起平台活動的金額，這反映了我剛才所描述的我們與借款人的關係類型。

Now what comes with that, and this is kind of where I'm going is that it does require a lot more hands-on work, not only in asset selection and underwriting, and we've been doing this for a long time, so we know how important it is to remain very disciplined on asset selection, but also on portfolio monitoring. Staying close to the businesses that we lend to does allow us to feed the growth in follow-on activity, but it requires a lot more time. In a normal market, where you have kind of historical normal levels of deal activity, we can grow at a healthy clip as we have historically. In our origination pace generally would outpace our repayments. In this market, especially in the lower end of the middle market where you see such a low amount of deal activity, it's really below almost any historical level that we've seen for quite some time.

現在隨之而來的是，這就是我要說的，它確實需要更多的實際工作，不僅在資產選擇和承保方面，而且我們已經做了很長時間，所以我們知道在資產選擇上保持嚴格紀律是多麼重要，而且在投資組合監控上也一樣。與我們貸款的企業保持密切聯繫確實使我們能夠促進後續活動的成長，但這需要更多的時間。在正常的市場中，如果交易活動處於歷史正常水平，我們就可以像歷史上一樣以健康的速度成長。我們的發起速度通常會超過我們的償還速度。在這個市場中，特別是在中端市場的低端，交易活動非常少，實際上低於我們相當長一段時間以來看到的任何歷史水平。

We've decided that given all of what I described in the lower end of the middle market and what it requires, that it is important for us to invest in people. And the investments that I highlighted in the prepared remarks are really aimed at giving our deal professionals an opportunity to shift some of the allocation of their time much more toward outward-facing origination activity and enabling them to leverage themselves much better. And we're already seeing the benefits of that where that's starting to bear fruit in our pipeline. And over the long term, we're very confident that it will allow us to get back on a path of growth while continuing to be very disciplined in our asset selection.

我們決定，考慮到我所描述的中端市場低端的所有情況及其要求，投資於人才對我們來說非常重要。我在準備好的發言中強調的投資實際上旨在讓我們的交易專業人員有機會將他們的部分時間分配更多地轉向面向外部的發起活動，並使他們能夠更好地利用自己。我們已經看到了它的好處，它開始在我們的管道中取得成果。從長遠來看，我們非常有信心，這將使我們重回成長軌道，同時繼續嚴格選擇資產。

I appreciate the very detailed commentary there. Kind of taking some of that and realizing that the near-term growth is likely to continue to still be challenged kind of given all of the factors that you've mentioned there, it seems that the run rate of NII could continue to come in below the kind of declared dividend here for the near term. So could you just remind us -- I don't think I have it for the most recent quarter kind of where the spillover level is, either dollar terms or on a per share basis?

我很欣賞那裡非常詳細的評論。考慮到其中的一些因素，並意識到短期成長可能仍會繼續受到挑戰，考慮到您提到的所有因素，NII 的運行率似乎可能會繼續低於短期內宣布的股息。那麼，您能否提醒我們——我認為我還沒有了解最近一個季度的溢出水平，無論是按美元計算還是按每股計算？

Yes. Sure, Erik. If you recall, we had about $3 of -- just over $3 as of year-end, and we paid now $1.24 in this quarter. So we're just under $2 at the moment from the February spillover. And then, of course, we've also earned earnings since March 1. So we're probably closer to the (inaudible) level at the moment.

是的。當然，埃里克。如果你還記得的話，截至年底，我們的現金約為 3 美元——略高於 3 美元，而本季度我們的現金支付額為 1.24 美元。因此，目前我們距離 2 月外溢效應僅一步之遙。當然，自 3 月 1 日以來我們也開始獲利。因此我們目前可能更接近（聽不清楚）水準。

Okay. And then just kind of continuing on the theme of growth being challenged in the near term, we have quite a bit of liquidity on the balance sheet and capacity to lend further. You do have some notes coming due later this year and some in early calendar '26 as well. So just kind of thoughts on how you would look to kind of replace those today with new notes versus maybe using the revolver. And I guess there's also the unknown of where rates may be, I think the market over the next year is forecasting about another 100 basis points in Fed funds cut, but whether or not we get those, I think, still remains to be seen. But just curious on your thoughts on kind of the liability and funding side of the balance sheet?

好的。然後繼續討論短期內成長面臨挑戰的主題，我們的資產負債表上有相當多的流動性和進一步放款的能力。您確實有一些票據將於今年稍後到期，還有一些將於 26 年初到期。所以，我只是在想，今天你會如何用新鈔票來取代這些鈔票，而不是用左輪手槍。我想，利率水準也存在未知數，我認為市場預測明年聯邦基金利率將再下調 100 個基點，但我認為，我們是否能實現這一目標仍有待觀察。但我只是好奇您對資產負債表的負債和融資方面的看法？

Well, I think we tend to cross a lot of those bridges when we come to them because there's so many variables in what we're looking at. And -- and so by the time we have to face that, we certainly are in a good position with all the liquidity that we have. So we don't have we have a lot of flexibility as to how to address those upcoming maturities. We have plenty of credit facilities and cash. But I think a lot of it's going to be driven by the next six months or so of originations and the net picture on asset deployment. And so when we come to that moment, things look how much things have changed in the last three months. And we think in the next three to six months, we've got a very, very different economic picture it could be much better and it could be somewhat worse or it could be stable. And we're not economists or predictors of that. We just structure ourselves to be most flexible and conservative. We don't think this is time to take excess risks.

嗯，我認為當我們遇到這些問題時，我們往往會跨越很多障礙，因為我們所考慮的變數太多了。所以，當我們必須面對這個問題時，憑藉我們擁有的所有流動性，我們肯定會處於有利地位。因此，對於如何處理即將到期的債務，我們沒有太多的靈活性。我們擁有充足的信貸額度和現金。但我認為，這在很大程度上將取決於未來六個月左右的資產發起情況和資產部署的淨狀況。所以當我們來到那一刻，事情看起來在過去三個月裡發生了多大的變化。我們認為，在未來三到六個月內，我們的經濟狀況將有很大不同，可能會好得多，也可能會稍微糟糕一些，也可能會保持穩定。我們不是經濟學家，也不是預測者。我們只是將自己建構得盡可能靈活和保守。我們認為現在還不是承擔過度風險的時候。

And so -- as we come up to that moment, we'll have to decide. And I apologize for not giving you a hard answer because we don't -- that's not how we are managing the situation right now. We just have a lot of flexibility. And as things change, whether it be Fed cuts, whether or not be Fed cuts, with the economy step up and grow after the build back better bill, the tariffs have a negative or a positive impact, there's just so many variables at work right now. And again, we just feel like we're extremely well positioned with a lot of liquidity and a portfolio that's performing extremely well. And so we've got a lot of options, and we're going to keep those options open as we come to these situations.

所以——當我們到達那個時刻時，我們必須做出決定。我很抱歉沒有給你一個明確的答复，因為我們沒有——這不是我們目前處理情況的方式。我們只是有很大的靈活性。隨著情況的變化，無論是聯準會降息，或是聯準會不降息，隨著經濟在重建美好法案之後的加速和成長，關稅會產生負面或正面的影響，現在有太多的變數在起作用。而且，我們感覺我們處於非常有利的地位，擁有大量流動性和表現極其出色的投資組合。因此，我們有很多選擇，當我們遇到這些情況時，我們會保留這些選擇。

Yes. No, that makes sense, optionality is very positive to have. So that's great. And last topic for me, then I'll step aside. In terms of the new CLO, the BB investments kind of maybe -- two questions. One, were those new primary issues? Or were those purchased in the secondary market? And secondarily, just kind of thinking maybe longer term, it sounds like you're attracted to that asset class. How large could you potentially see that portfolio come relative to the total investment portfolio?

是的。不，這是有道理的，可選性是非常積極的。這太棒了。這是我的最後一個話題，然後我就離開了。就新的 CLO 而言，BB 投資可能有點——兩個問題。第一，這些是新的初選議題嗎？還是在二級市場購買的？其次，從長遠來看，你似乎對該資產類別很感興趣。相對於總投資組合而言，您認為該投資組合的規模可能有多大？

Sure. Well, I think the origins of our investment there, we've been managing the CLOs for many, many, many, many years. And so we're very familiar with that marketplace. And our objective is risk adjust -- strong risk-adjusted returns and credit -- largely credit securities. And what we have found through our research over time is that the BB asset classes generally delivers very close to the type of yields we're looking for in some of our regular way private credit investments. And with a very, very good historic credit performance and also liquidity. So you can get in and you can get out of these. Obviously, if there's a big market dislocation, all bets are off for that period of time. But as a general rule, one of the differences in this asset class is that you have a general -- much more liquidity than you would have in another class.

當然。嗯，我認為我們在那裡投資的起源是，我們已經管理 CLO 很多很多年了。所以我們對那個市場非常熟悉。我們的目標是風險調整——強勁的風險調整回報和信貸——主要是信貸證券。透過長期研究，我們發現 BB 資產類別通常能夠提供與我們在一些常規私人信貸投資中尋求的收益率非常接近的收益類型。並且具有非常非常好的歷史信用表現和流動性。所以你可以進去也可以出來。顯然，如果出現嚴重的市場混亂，那麼那段時間所有的預測都會失效。但一般來說，這個資產類別的不同之處之一在於，它比其他類別的資產具有更高的流動性。

And we stated this for a long time. We have a very elaborate process and research in terms of which of the BBs we invest in, which of the managers we invest in, we have our own tiering mechanism, Tiers 1, 2, 3, 4 and top tier and then even within the top tier, the different vintages. And so we've been able to assemble a tremendous research base, and experience in watching this market for a long time. And so now we started to enter it.

我們早就聲明過這一點。對於我們投資哪些 BB、投資哪些經理，我們有一個非常複雜的流程和研究，我們有自己的分層機制，第 1、2、3、4 層和頂層，甚至在頂層中，也有不同的年份。因此，我們能夠建立龐大的研究基礎，並累積長期觀察這個市場的經驗。所以現在我們開始進入它。

In terms of asset size, I think it's a very substantial industry and (inaudible) asset class, but not massive, but there -- I mean, it would be the ability to deploy significantly more than we're deploying, whether we do that or not is going to be a function of, a, the opportunities in this BB class; and b, the -- also the opportunities in our traditional private credit exposure area.

就資產規模而言，我認為這是一個非常重要的行業和（聽不清楚）資產類別，但規模並不大，但 - 我的意思是，它將有能力部署比我們部署的更多的資產，我們是否這樣做將取決於，a，這個 BB 類別中的機會；以及 b，以及我們傳統私人信貸風險敞口領域的機會。

And then as to your question, on the mix, we have a mix between the secondary (inaudible) at the top of your tongue. I mean, I think this is sort of falling a little bit of both. At certain times like right now, there's kind of a big cycle of issuance is somewhat of a seasonality or at certain times of the year, more of these are issued on a primary basis and at other times of the year of having to do with payment dates and things like that. There's a lot of peculiarities to this market. And so just recently, it's been weighted more heavily to the primary and at other times, the secondary. And we just watch both, and we're looking for the best alpha in putting the assets to work. Henri?

然後關於您的問題，在混合方面，我們在舌頭頂部的次級（聽不清楚）之間進行了混合。我的意思是，我認為這有點兩者兼而有之。在某些時候，例如現在，發行週期很大，有一定的季節性，或者在一年中的某些時候，更多的是主要發行，而在一年中的其他時間，則與付款日期等有關。這個市場有很多特殊性。因此，最近，它變得更加側重於主要因素，而有時則側重於次要因素。我們只是觀察兩者，並尋找讓資產發揮作用的最佳阿爾法。亨利？

Yes. No, exactly. We do both, Erik and both primary and secondary is we obviously focus on where the opportunity is at that point in time. So I think it will always be a combination of both.

是的。不，確實如此。艾瑞克，我們兩者都做，主要和次要的是我們顯然關注的是當時的機會在哪裡。所以我認為它永遠是兩者的結合。

Robert Dodd, Raymond James.

羅伯特多德、雷蒙德詹姆斯。

Kind of following up on one of the questions about the balance sheet. And you do have a lot of liquidity and you have plenty of time to address some of the larger maturities. But I mean looking at this quarter, you did have a $20 million bond that you paid off. But the -- you clearly made the decision to utilize or to adjust the revolvers by increasing the size of the Live Oak facility, et cetera, rather than using the cash.

有點像是跟進資產負債表的一個問題。而且你確實擁有大量的流動性，並且有足夠的時間來處理一些較大的到期債務。但我的意思是，看看這個季度，你確實還清了 2000 萬美元的債券。但是——您顯然決定利用或調整循環信貸，透過擴大 Live Oak 設施的規模等等，而不是使用現金。

So would it be fair to read into that the bias is to kind of maintain the cash for deployments and manage the refinancings in terms of drawing on other debt kind of liabilities either refinancing or the revolver, et cetera. I mean just trying to get -- is the bias to use the cash for deployments to grow your AUM? Or how much -- how likely is that cash to be used to actually just pay down debt?

因此，公平地理解為，其傾向是維持部署現金並透過利用其他債務類型的負債（再融資或循環信貸等）來管理再融資。我的意思是，只是想了解——是否傾向於使用現金進行部署來增加您的 AUM？或者說——這些現金實際上用來償還債務的可能性有多大？

Well, I think that's a very good question. And obviously, it's something that we were constantly considering. I guess we would take issue with your -- you said several times the word bias. We try not to have a bias. What we try and do is optimize...

嗯，我認為這是一個非常好的問題。顯然，這是我們一直在考慮的事情。我想我們會對你的——你多次提到偏見這個詞提出異議。我們盡量不抱持偏見。我們嘗試做的是優化...

Inclination.

傾角。

Okay, inclination. And we don't even have an inclination. We try not to have an inclination. We try to basically assess the situations as they arise from a relatively neutral position with a lot of optionality. And I think that it was kind of axiomatic that you raise capital when you can and you raise and you generate lending relationships when you can, and that's often in good times. As everybody knows on this call, it's very difficult to increase your credit facility in an adverse market environment. And so -- and so I think Henri and the team has worked very hard to create sort of an optimal flexible revolver position for the company. And these are good times. And then the [Valley Bank] is a very good relationship that's being developed.

好的，傾向。而我們甚至沒有這種傾向。我們盡量不產生這種傾向。我們嘗試從相對中立的立場出發，對出現的情況進行基本評估，並且具有許多可選性。我認為，當你能夠籌集資金時，你就應該籌集資金，當你能夠籌集資金並建立借貸關係，這是不言而喻的，而且這通常是在經濟狀況良好的時候。正如本次電話會議中大家所知，在不利的市場環境下增加信貸額度非常困難。所以——所以我認為亨利和他的團隊已經非常努力地為公司創造了一種最佳的靈活循環信貸部位。這是美好的時光。我們與 [Valley Bank] 之間正在建立非常好的關係。

And so putting that -- that's a facility that you can't predict these things, but we've had very long relationships with our creditors, and this could be something in place for 5, 10 years. I mean this is a strong relationship and all that. And so -- so that is kind of market independent event, right? That's just like let's create the most flexibility we have for our balance sheet. And we have a lot of fixed rate debt. This is variable rate. This is revolver, so we can draw it and pay it back and that type of thing. So that's like a super flexible thing.

因此，這是一個你無法預測的事情，但我們與債權人有著非常長期的關係，這可能會持續 5 年或 10 年。我的意思是這是一種牢固的關係等等。所以——這是一種與市場無關的事件，對嗎？這就像讓我們為資產負債表創造最大的彈性一樣。我們有很多固定利率債務。這是可變利率。這是循環貸款，所以我們可以提取並償還諸如此類的事情。所以這就像是一件超級靈活的事情。

And then I think as we said earlier, how we deploy the cash and plan. Right now, the cash is earning around 4%. So it's better than it was a few years ago when it was 0. But -- so it's not like the cash isn't producing something, and obviously, it's risk-free, the way we're investing it. So we feel like we want to be prepared for a lot of different eventualities. And I think, again, not to overly repeat the things we've said before. We've basically had a period of very significant redemptions. And these redemptions on the one hand, you say, "Oh, but these redemptions, a lot of them were very significantly sized investments that we made five years ago, six years ago, they started out of small investments. They became very large over time. And then now they've just been sold and realized. And so -- this is the way it goes in our business. And we don't think that's anything different or should cause us to change our approach to the market, right? That's just something that's happened and this happened in a concentrated period of time. And we have -- and so sometimes, you can't match everything up.

然後我想正如我們之前所說的，我們如何部署現金和計劃。目前，現金收益率約為4%。所以這比幾年前的 0 好得多。但是——這並不意味著現金沒有產生任何作用，而且顯然，我們投資現金的方式是無風險的。因此，我們覺得我們應該為各種可能發生的情況做好準備。我認為，不要過度重複我們之前說過的話。我們基本上經歷了一段非常重要的救贖時期。一方面，你會說，這些贖回中很多都是我們五年前、六年前進行的大規模投資，都是從小額投資開始的。隨著時間的推移，它們變得非常大。現在它們剛剛被出售並實現。所以——這就是我們的業務運作方式。我們不認為這有什麼不同，或應該導致我們改變我們的市場策略，對嗎？這只是發生的事情，並且發生在一個集中的時間段內。我們有——所以有時候，你無法把所有東西都匹配起來。

So again, we just want to be -- we want to maximize our flexibility and have the best credit structure we can and put that in place in good times so that if there are bad times, we're ready. And if there aren't bad times, we've got a lot of flexibility to grow.

所以，我們只是想——我們希望最大限度地提高我們的靈活性，擁有最好的信貸結構，並在經濟繁榮時期實施，以便在經濟不景氣時，我們也能做好準備。如果沒有遇到困難，我們就有很大的彈性去成長。

Robert, just to clarify one thing on the credit facility. So we actually didn't choose to draw that. What we chose to do was to upsize it, which for us is a long term, (inaudible) and there's a 50% utilization. So that's why there was the draw. The more important thing is it's upside, the upside and creating more liquidity for us that's available.

羅伯特，我只是想澄清一下關於信貸安排的一件事。所以我們其實沒有選擇畫這個。我們選擇做的是擴大它的規模，這對我們來說是一個長期目標，（聽不清楚）並且利用率為 50%。所以這就是抽籤的原因。更重要的是它的好處，它能為我們創造更多的流動性。

Understood. Understood. And just the next one. I mean, to your point, and word, a repayment is -- if you do high-quality assets getting repaid is a good outcome, right? And your focus is doing on quality in those high-quality assets. But the color on course, there's just less of that right now, right? Other fair question. What does it take in the market -- is it just the stability? Are we too late in the year that even if tariffs, et cetera, et cetera, stabilized now? -- is M&A activity at 2026 event? Or can you give us any color on like when things could ramp for quality deals, right? There's always lower quality deals, but you don't want to -- so for your quality (inaudible) you think...

明白了。明白了。只是下一個。我的意思是，就你的觀點和說法而言，償還是——如果你擁有高品質的資產，獲得償還是一個好的結果，對嗎？您的重點是提高這些高品質資產的品質。但是，現在球場上的顏色已經很少了，對嗎？其他公平問題。市場需要什麼——僅僅是穩定性嗎？即使關稅等現在已經穩定下來，現在是否為時已晚？ 2026 年還會有併購活動嗎？或者您能否告訴我們何時可以達成優質交易，對嗎？總是有質量較低的交易，但你不想 - 所以對於你的質量（聽不清楚）你認為...

Sure. I'll turn this over to Mike after I say a couple of things. But I mean, we have a lot of very interesting deals in our pipeline. Now it's a competitive environment. But I mean, if we have a bit of a winning streak here, there could be some very significant additions over the next three to six months, but there also could not be. And again, there's a competitive environment, our sponsors are -- some of them are at the LOI stage, some of them are still looking stage, but we have some very nice quality deals we're looking at in our pipeline. It's just predicting that we're going to land those on our balance sheet. It's just something, first of all, that we're not going to do on a call like this. And secondly, it's not something we can actually predict and we can only work very hard to get in a position to win these deals, but it's a competitive market right now.

當然。我說完幾句話後，我會把這個問題交給麥克。但我的意思是，我們正在籌備很多非常有趣的交易。現在這是一個競爭環境。但我的意思是，如果我們在這裡取得一些連勝，那麼在接下來的三到六個月內可能會有一些非常重要的補充，但也可能不會。再說一次，這是一個競爭環境，我們的贊助商 - 其中一些處於意向書階段，有些仍在尋找階段，但我們正在考慮一些非常好的優質交易。這只是預測我們會將這些列入我們的資產負債表。首先，我們不會在這樣的電話會議上做這件事。其次，這不是我們能夠真正預測的事情，我們只能非常努力地爭取贏得這些交易，但現在這是一個競爭激烈的市場。

And so -- and the part of the reason we're not worried about our cash is we feel like there's a lot of opportunity out there, and we're in the process of getting to it, but the timing is not something that we can control on a quarter-to-quarter basis. Mike?

所以——我們不擔心現金的部分原因是我們覺得有很多機會，我們正在抓住這些機會，但時機不是我們可以逐季控制的。麥克風？

Let me add to that. So just addressing your question directly in terms of where we are and what we're seeing in the marketplace, we're continuing to see deal activity down, and we aren't seeing any signs of that recovering. Having done this for a long time, usually, you don't -- you just really don't have visibility on that. And so it's not something that we predict or try to time like what inning are we in or any of those things. But what we do have confidence in, in addition to what we're seeing in our pipeline right now, but what we do have confidence in is that the initiatives that we're undertaking in terms of investing in more resources and really getting out there and doubling our efforts to be on the origination kind of focus will -- we think yield results where we can get back on a growth path, even if the deal activity doesn't recover.

讓我補充一下。因此，直接回答您的問題，就我們現在的情況和我們在市場上看到的情況而言，我們看到交易活動持續下降，而且沒有看到任何復甦的跡象。做這件事很久之後，通常你不會——你只是真的不了解這一點。因此，我們無法預測或嘗試確定我們處於哪一局或任何此類事情的時間。但我們確實有信心，除了我們目前在管道中看到的情況之外，我們確實有信心的是，我們正在採取的舉措，即投入更多資源，真正走出去，加倍努力關注起源類問題——我們認為，即使交易活動沒有恢復，我們也能夠回到增長軌道上。

So we're optimistic of that. I mean, time will tell, but we do have confidence that we can operate successfully and continue to grow our balance sheet even if the deal market doesn't recover. And if it -- if it does, all the better.

因此我們對此持樂觀態度。我的意思是，時間會證明一切，但我們確實有信心，即使交易市場沒有復甦，我們也能成功運作並繼續增加我們的資產負債表。如果確實如此，那就更好了。

And I would now like to hand the call back to Christian Oberbeck for closing remarks.

現在我想把發言權交還給克里斯蒂安·奧伯貝克，請他作最後發言。

Okay. Well, again, we'd like to thank everyone for joining us today, and we look forward to speaking with you next quarter.

好的。好吧，我們再次感謝大家今天的加入，我們期待下個季度與你們交談。

Thank you, everyone, for joining us today. We look forward to speaking to everyone next quarter. This concludes today's conference call.

感謝大家今天加入我們。我們期待下個季度與大家交談。今天的電話會議到此結束。