SLR Investment Corp (SLRC) 2012 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the year-end 2012 Solar Capital Limited earnings conference call.

My name is Erin and I will be your coordinator for today.

At this time, all participants are in a listen-only mode.

We will be facilitating a question-and-answer session toward the end of today's conference.

(Operator instructions)

As a reminder, this conference is being recorded for replay purposes.

I will now turn the presentation over to your host for today's call, Mr. Michael Gross, Chairman and CEO.

Please proceed, sir.

Thank you and good morning.

Welcome to Solar Capital Limited's earnings call for the year ended December 31, 2012.

I'm joined here today by Bruce Spohler, our Chief Operating Officer; and Richard Peteka, our Chief Financial Officer.

Rich, before we begin, would you please start off by covering the webcast and forward-looking statements?

Of course.

Thanks, Michael.

I would like to remind everyone that today's call and webcast are being recorded.

Please note that they are the property of Solar Capital Limited and that any unauthorized broadcasts in any form are strictly prohibited.

This conference call is being webcast on our website at www.solarcapLTD.com.

Audio replays of this call will be made available later today, as disclosed in our earnings press release.

I would also like to call your attention to the customary disclosures in our press release regarding forward-looking information.

Statements made in today's conference call and webcast may constitute forward-looking statements which relate to future events or our future performance or financial condition.

These statements are not guarantees of our future performance, financial condition, or results, and involve a number of risks and uncertainties.

Actual results may differ materially, as a result of a number of factors, including those described from time to time in our filings with the SEC.

Solar Capital Limited undertakes no duty to update any forward-looking statements, unless required to do so by law.

To obtain copies of our latest SEC filings, please visit our website or call us at 212-993-1670.

At this time, I would like to turn the call back to our Chairman and Chief Executive Officer, Michael Gross.

Thank you, Rich.

We believe 2012 was a pivotal year for the BDC sector.

Despite periods of market volatility caused by political events, positive economic indicators, and continued monetary easing, bolstered the liquid capital markets.

Capital inflows impacted the opportunity set on both the asset and liability side of the BDC balance sheet.

Particularly, during periods with frenzied market conditions like last year, we believe that manager discretion and adherence to core investment principles are critical to our BDC's long-term success.

At Solar Capital, we continue to operate with an ownership mentality, the same mindset we have always maintained, as one of the largest investors in our own common stock, resulting in a highly successful year.

We are pleased with our financial results for 2012.

At December 31, our NAV was $22.70 per share, a 3% increase for the year, and consistent with the Q3-ending NAV.

For the fourth quarter, we delivered $0.63 per share of net investment income, resulting in approximately $2.36 of net investment income per share for the full year, excluding one-time financing charges.

Our taxable earnings fully covered dividends for the year.

In addition to a strong finish to 2012, we completed several strategic initiatives that position us well for 2013 and the future.

First, we took advantage of the attractive conditions and the liquid capital markets to term out and further diversify our capital structure.

Specifically, in May we raised $75 million of private fixed-rate five-year notes from a diverse group of insurance companies.

Mid-year, we increased the size of our multi-lender credit facility and extended the maturity.

For both of our credit facilities, totaling $625 million, we reduced the borrowing rates.

In November, we issued $100 million of 30-year fixed-rate senior unsecured retail notes; and today we now have $800 million of borrowing capacity with a weighted average maturity of 2019.

40% of this capacity is either fixed-rate or is hedged against rising interest rates.

In August, we raised $45 million of equity in response to a reverse inquiry from one institutional investor.

Post year-end, we raised an additional $147 million of net proceeds in our first underwritten share offering since our IPO three years ago.

Together, these proceeds allow to take full advantage of our borrowing base, while staying well within our target leverage.

The attractive market conditions that enable us to optimize our capital structure for future growth cause us to be highly selective on the asset side of our balance sheet.

The high-yield and liquid-leverage loan markets experienced meaningful spread compression and loosening of terms as 2012 progressed.

The benefit of investing in our niche, the US middle-market, is that the impact of our opportunity set was far less pronounced.

We maintained a conservative, prudent approach to portfolio growth in 2012.

As a result of our direct origination platform, we were still able to source several unique investments with attractive risk-reward characteristics.

For the full year, we originated over $610 million par value of new investments, $275 million of which was invested in Crystal Financial, a portfolio company that we acquired at the end of the fourth quarter.

We evaluated this opportunity for almost a year, and believe it offers a superior risk-for-return profile than other investments available during the second half of the year.

We acquired substantially all the outstanding equity of the commercial finance company, which focuses on providing asset-based and other secured finance solutions to US middle-market companies with unique financing situations.

Crystal Financial's management team, including while at prior businesses, has underwritten and closed more than $20 billion of transactions for its clients since 1993.

In addition to the quarterly cash investment income we expect to earn on this investment, the asset has significant strategic value.

Crystal's strong origination platform has little overlap with our existing platform, providing us with the assets to a new opportunity set that has low correlation with our existing portfolio.

Their team's distinct expertise and focus broaden Solar Capital's spectrum of financing solutions, and our permanent capital enhances Crystal Financial's ability to meet its clients' needs.

Bruce will provide additional color during his review of our portfolio activity.

Over $250 million of our originations for the year, or nearly 75% excluding Crystal, occurred in the first half of the year, prior to the overheating of the liquid capital markets.

During the second half of the year, the adherence to our strict underwriting criteria and use of our investment capacity to acquire Crystal Financial resulted in less-traditional investment activity.

During the year, we had redemptions in sales of approximately $325 million, and during the fourth quarter, redemptions totaled approximately $111 million, and we had sales around $1 million in one asset.

Our redemptions for the year meaningfully reduced our percentage of 2006-2007 vintage assets to 15% of our portfolio.

Both Weetabix and AMC, which were redeemed in the fourth quarter, were pick assets that had been marked as low as the 50s during the market trough.

These were redeemed at par.

In summary, in 2012 we built long-term shareholder value by capitalizing on market conditions to optimize our balance sheet, and by taking a cautious and strategic approach to portfolio growth.

In 2013, we are focused on sourcing proprietary investments that meet our strict underwriting standards.

Our capital-raising efforts provided us with over $400 million of credit capacity to invest in new assets with prudent risk levels and acceptable returns.

Our year-end pro forma for [our gen] equity rates are leveraged with 0.33 times debt-to-equity.

We continue be on origination pace as $400 million per year, and currently we have not had any meaningful redemptions since year-end.

Finally, our Board of Directors declared a quarterly dividend of $0.60 per share, which was more than covered by our GAAP and taxable earnings in Q4.

The first-quarter 2013 dividend will be paid on April 2, 2013, to holders of record as of March 21, 2013.

At this time, I will turn the call over to our Chief Financial Officer, Rich Peteka, to take you through some of our financial highlights.

Thank you, Michael.

Solar Capital Limited's net asset value at the end of the year was $878.3 million, or $22.70 per share, consistent with our net asset value at September 30, 2012.

As of December 31, we had investments in 40 portfolio companies in 23 industries, totalling approximately $1.4 billion at fair value.

At December 31, 2011, we had investments in 42 portfolio companies in 24 industries, for the fair value totaling approximately $1.05 billion.

The approximate 33% increase in our portfolio year over year reflects both continued net growth of our portfolio, resulting in net increase in its fair value.

At the end of 2012, the weighted average yield on our combined debt and preferred portfolios was 14.2%, measured at fair value.

Gross investment income for the three months and full year ended December 31, 2012 totaled $41.5 million and $153.3 million respectively.

Total expenses for the three-month and the full-year periods ended December 31, 2012 was $17.3 million and $71.3 million respectively, including the nonrecurring expenses related to our new $525 million credit facility and our $75 million senior secured notes issue during the second quarter.

Net investment income for the three months ended December 31, 2012 was $24.2 million, or $0.63 per share.

Pro forma for the nonrecurring charges, net investment income for the full year was $87.8 million, or $2.36 per average share.

Net realized and unrealized losses totaled less than $1 million for our fourth fiscal quarter.

Net realized and unrealized gains were $33.8 million for the full year, and were driven primarily by general market improvements and modest yield tightening during 2012.

During the fourth quarter, we removed both Direct Buy and Granite Global from our non-accrual status as a result of recapitalization events at both companies.

Granite Global paid all its past-due interest in cash.

Accordingly, we had no loans on non-accrual status at December 31, 2012.

However, we expect to place Rug Doctor on non-accrual status during Q1 of 2013.

The company was current on its interest through December 31, 2012, but on January 31, we received notice from the company that its next scheduled-payment would be blocked by their senior lenders.

At December 31, Rug Doctor was valued at $43.3 million.

At this time, I would like to turn the call over to our Chief Operating Officer, Bruce Spohler.

Thank you, Rich.

Overall, the operating trends of our portfolio companies remain steady.

As we have highlighted before, during our underwriting process, we focused primarily on a company's ability to generate free cash flow as the primary driver to both de-risk and eventually repay our investments.

The defensive portfolio that we have constructed, concentrated in non-cyclical industries, continues to perform well in this low-growth environment.

At the end of 2012, the fair market value of our portfolio was approximately $1.4 billion, of which 100% was performing.

At 12/31, the fair-value weighted average mark on our portfolio, excluding our common equity, was approximately 97% of par, consistent with the prior quarter.

Approximately 34% of the fair value of our investment portfolio was in secured assets.

When considering Crystal's underlying portfolio, approximately 57% of the total fair value would be in secured assets.

We had investments in 40 portfolio companies, operating across 23 industries, and our income-producing assets represented approximately 96% of the portfolio.

The weighted average investment risk rating remains at 2, measured at fair market value at the year end, based on our 1-to-4 risk-rating scale, with 1 representing the least amount of risk.

Before I give you an overview of our activity in Q4, I would like to spend a moment on portfolio developments.

Our two assets on non-accrual at September 30 both completed restructurings during the fourth quarter, with positive outcomes that caused us to return both assets to full-growth status.

First off, in November, Direct Buy completed its restructuring.

Pro rata with the other holders in the original second lien tranche, Solar Capital's $25 million par value investment was converted into approximately $7.5 million of a new secured loan, as well as an equity plan, which represented approximately 7.5% of the common equity.

In total, the holders of our tranche received 100% of the common equity.

The fair value of the new loan equates to a $0.30 [mark] on our original par investment from the former security, up from $0.20 at September 30.

The Company's financial performance has been improving, with new memberships at existing franchisees trending positive.

In December, Granite Global completed a recapitalization.

The sponsor invested over $27 million of additional equity, together with the mezzanine lenders collectively investing approximately $10 million as additional mezzanine capital to support this transaction.

Solar Capital invested $7.5 million as our pro-rata share of the add-on investment to the existing mezzanine.

The proceeds to this recapitalization were used to pay down a portion of the senior debt and to facilitate the funding of a couple of add-on acquisitions.

The attachment point in total leverage through our tranche improved dramatically as a result of this recapitalization.

In conjunction with the transaction, we received all past-due interest and have returned our investment to full accrual status.

The company's financial performance continues to improve.

As Rich mentioned, post-year-end, we placed our investment in Rug Doctor on non-accrual.

We are in active discussions with the company, as well as the sponsor, to resolve this situation, and we view our attachment point at 2.4 times as a very positive factor in maximizing our realizable value.

Lastly, DS Waters is performing in line with expectations.

Customer growth continues to drive both increased revenues and EBITDA over prior-year results.

Importantly, the integration of Standard Coffee, acquired in early 2012, remains on-schedule, and the cost efficiencies are being realized as anticipated by Management.

On the origination front, during Q4, we committed approximately $300 million par value in two new and four existing portfolio companies.

Our principal repayments totaled approximately $111 million, and we sold just over $1 million of our position in NXP, publicly-traded common equity, which left just over $4 million in NXP post year end.

In January, we are happy to report that we sold our remaining NXP shares.

At the time of Solar Capital's IPO in early 2010, our position in NXP was valued at approximately $1.5 million.

Our cumulative realized gains since the IPO for the sale of our NXP shares approaches $30 million, underlying the importance of the patience of our capital to maximize realizable value.

I will now highlight some of our new fourth-quarter investments.

During Q4, we funded a $25 million second-lien investment in Endurance Group, the leading provider of web hosting and domain registration services in the US, offering highly-predictable and recurring revenue stream.

A portion of the company's refinancing will fund tuck-in acquisition.

Our sister fund, Solar Senior, had invested in the previous secured tranches of this company, and thus we were extremely familiar with the credit.

The all-in yield in this investment exceeds 10.5%.

Additionally, we invested $5 million in the incremental second-lien term loan for Trident Health Services, to support tuck-in acquisition in the company's core mobile x-ray footprint.

So, Solar Capital's total investment in the company now approaches $43 million.

Pro forma total leverage for this transaction is 4.5 times, and the all-in yield on our loan exceeds 12.5%.

During the fourth quarter, we received full repayment on three investments.

In conjunction with the acquisition of the company by Bright Foods of China, our approximately $55 million investment in Weetabix was redeemed at par.

At the trough of the credit cycle in December 2008, we carried Weetabix at a weighted average mark in the mid-50s.

Again, with the benefit of patient capital, we were able to realize an IRR in excess of 12%, and a multiple of our invested capital 1.8 times.

During Q4, our $33 million investment in the unitranche security of Grocery Outlet was redeemed at a premium to par in conjunction with the company's refinancing.

Solar initially invested in Grocery Outlet in 2011 as part of a refinancing of the company's then-existing capital structure.

Our IRR-to-realization on this investment approaches 17%.

Lastly, we redeemed out of the unitranche of T&D Solutions at a premium to par.

Solar Capital invested $17 million in T&D Solutions in July of 2012, and this IRR approached 19%, albeit over a short hold period.

As Michael mentioned, at the end of the year we funded a $275 million equity investment into Crystal Financial, which is a commercial finance company focused on providing asset-based and other secured financing solutions to mid-market companies.

At December 28, Crystal had a secured loan portfolio totalling approximately $400 million, consisting of loans to 22 different issuers.

All of its loans are floating rate, with an average loan size of $18 million and an average yield on the portfolio of approximately 12%.

At year end, total leverage on the Crystal portfolio was approximately 0.5 times debt-to-equity.

We believe that this asset offers a highly-attractive risk-return profile, given the cash-pay, senior-secured nature of the underlying loans.

On a quarterly basis, this asset will pay us a cash dividend which will be included in our net investment income going forward.

Now I would like to turn the call back over to Mike.

Thank you, Bruce.

In conclusion, we believe that our disciplined approach during year of frenzied market conditions should generate long-term shareholder value.

We took advantage of the heated conditions of the liquid capital market to reset our capital structure, and we remain conservative on the investment side.

The strategic investment in the portfolio of Crystal Financial provides us with a new source of net investment income, with what we believe is a better risk-reward profile than other opportunities available in the current market environment.

For 2013, we will continue to be prudent and highly selective in deploying our capital, given the frothy credit markets.

As a result of our efforts to optimize our balance sheet, we now have over $400 million of credit capacity available to invest in defensive credits with attractive risk-reward metrics.

In 2012, we originated over $600 million of investments, which was bolstered by acquisition of Crystal.

We continue to believe that a $400 million per-year origination pace -- provides for measured, prudent portfolio growth, which may be somewhat offset by redemptions.

Our underwriting model does not depend on forecasting macroeconomic conditions.

As Bruce mentioned, we underwrite to a low-growth environment, so I will leave it to others to predict 2013 and beyond.

We're in the business of delivering stable, steady income in the form of consistent dividends while managing our downside risk.

2012 was a highly successful year for us, and we believe Solar Capital is well-positioned to continue to perform well in 2013 and beyond.

Finally, we continue to believe that Solar Capital offers an attractive value proposition relative to other high current-income alternatives.

As of yesterday's close, our shares carried an annualized dividend yield of 9.6%.

This is significantly higher than the Barclays US corporate high-yield index, which is yielding only 5.9% on assets that are generally unsecured, do not have [color] protection, and typically carry higher leverage.

At 11 o'clock this morning, we will be hosting our earnings call for the full-year 2012 operations for Solar Senior Capital, or SUNS.

Our ability to provide senior-secured financing through this vehicle enhances our origination team's ability to meet our clients' capital needs.

We continue to see real benefit to the value proposition in Solar Capital's deal flow.

Thank you for your time.

Operator, at this time, will you please open the line for questions?

(Operator instructions)

John Stilmar.

Hi, John.

Mr. Stilmar, your line is open.

He is no longer in queue.

Your next question comes from the line of Arren Cyganovich.

Please proceed.

Thanks.

I appreciate the comments on the environment, and I guess it is not necessarily a forecast but you believe that you can generate about $400 million of new originations currently with your current pipeline of opportunities.

Maybe, with respect to that, you could talk a little bit about the repay expectations, and whether or not you would expect to have portfolio growth from your opportunities this year.

Yes.

I think, as we mentioned, we really have not seen anything significant year-to-date in the way of redemption's.

The only thing of note is what has been put out publicly, which is our second lien investment in Asurion, which is less than $20 million was refinanced in connection with the company's refinancing earlier this year.

But other than that, we have not seen any additional redemption's.

As you know, it's difficult for us to look out and see redemption's.

We are not privy to all of that dialogue with our underlying issuers.

But what I would say, Arren, is that, as you know, we have churned in excess of 80% of the portfolio over the last 2.5 years.

So we would expect that redemption's would abate here, as we move into 2013.

And I think with the combination of our existing platform of Crystal, we would expect net origination growth for the year.

Great that's helpful.

And maybe just talk about the environment, with respect to maybe how today's more frothy environment compares to some past markets.

I know we have kind of had some periods over the last few years we have had some increase in activity and then they widen out with different credit-spread events.

Maybe you could just talk about today's environment, and maybe relative to the really, really frothy market back in 2007.

The biggest differentiating factor between now and when things kind of peaked out last time around was that, at that time, people were financing higher multiples of EBITDA off of, frankly, peak earnings.

And I think that we feel today that we are nowhere near peak earnings of the economy portfolio companies, given how modest the recovery has been to-date.

The other big difference is that you are not seeing a preponderance of pick-type structures in the middle market at all today, whereas during the last go-round, you did.

So I think -- yes, things are little more frothy, they're not nearly as frothy as the liquid markets, and where you are seeing -- where you are seeing is modest leverage growth and compression rates, but you are not seeing compromise in capital structures.

Okay, that's helpful.

And then lastly, on Rug Doctor, with the, I think roughly around 80% mark on that position, how comfortable are you with that mark for now?

And also, I think the average yield in the K was around 17.5%.

Is that the yield on the market value or yield at cost?

Or yield at par, I mean?

I'm sorry, can you repeat that?

The average -- weighted average yield on Rug Doctor position, I believe, was around 17.5%.

Yes.

Is that on par?

Or is that on the --

That is the market value.

Market value.

Okay.

And then, just in terms of the valuation of it, how are you coming through with that?

At the end of the year, given that -- you know, at the end of the year, Rug Doctor had less than a one-year maturity on the investment.

And so, as we have in the past, we tend to value those investments on an enterprise-value basis.

So it's more looking at a multiple cash flow with the affect of equity values to business-wise.

So by year-end, we were comfortable with the number.

Obviously, since we are valuing this more as an equity-type security now, there will be some volatility, given performance of comps and the company, but as of year-end, we were clearly comfortable with that mark.

Okay, thank you.

Stephen Laws.

Alright, thanks.

Congratulations on a great quarter.

Can you maybe give us a little bit of an idea of what the new capital in January -- kind of how you see leverage increasing in the face of that from here, as well as how the mix will be between, say, traditional kind of Solar Capital investments versus stuff in the Crystal pipeline?

I think what we -- at pro forma for the offering, we were at about 0.33% debt-to-equity at year-end.

And I think with a -- and assume we paid for $400 million and modest redemption's, we will get back to our target leverage of 0.7 times as the year progresses.

Obviously, we cannot predict when and if that happens.

But that is clearly the intent -- to access our debt, which is [lock plus] $250 [million], and invest in substantially higher yields.

And I think with respect to Crystal, as we mentioned, they have got in excess of $130 million of capacity on their existing balance sheet to fund growth, which, in the near-term, will just boost our return on our investment there.

Great, okay.

Thanks for taking my question.

I appreciate it.

Thank you, Stephan.

Mickey Schleien.

Good morning.

I wanted to ask about the -- sort the level of expected yield on the Crystal investment that we can look forward to.

The portfolio -- their portfolio, I suppose, because their lending to larger companies -- produces a couple hundred basis points less than your portfolio.

Taking in account their expense structure and their leverage, what can we look for in terms of a dividend yield on that investment?

Sure, and just to be clear, we invest in similar-sized businesses, Mickey.

They're really just taking an asset-oriented approach for the primary source of repayment, as contrasted with our cash flow orientation.

But businesses tend to be consistent.

And I think the way we look at their yields, as we mentioned on the portfolio, it approaches 12% at year-end.

We think that somewhere in that 11%, plus or minus, is a good target for our expected return, once you take into account leverage and then the cost of leverage and expenses.

But be mindful that we view that as actually -- well, it is a lower return than our current portfolio return, and we view as a premium return, given the lower risk inherent in the senior-secured nature of the assets.

Sure, I understand.

And I think you said that they're going to upstream a dividend quarterly.

Is that correct?

Yes.

That is the intent.

Okay.

Thanks for your time.

Doug Bywater.

Good morning it is Doug Bywater from SunTrust.

Most of my questions have been answered.

Just two questions.

First, on Crystal, I don't know if you have even decided this yet, but will Crystal be -- will they even be allowed to retain any of their earnings?

Or are you looking at it more of a pure pass-through -- sort of a, almost a purely -- almost a variable dividend, in terms of how they -- almost like you are investing in another BDC, to put another way?

Yes, we do view it as a pass-through of their underlying investment income.

Okay, thanks.

My second question is a little more big-picture.

The -- it is obvious that the CLL market and the high-yield markets and the liquid markets have gone a little crazy, in terms of spread compression.

And you said it has had a small impact, mostly on your own spreads, but not an outsized impact.

Are there any particular areas on the credit structure or industries where that impact has had a more or less of an impact?

The influence from the liquid market?

Not really.

I think it's kind of -- I don't want to say it is across-the-board, but it is fairly consistent.

And the other thing we are seeing, just to the environment is that I think activity, seasonally, is generally always slower January, February, after year-end.

I think it is actually a little slower than we've seen historically.

There seems to be less middle-market companies for sale in the private equity community.

This seems to be lack of product to look at.

So we are -- we have seen a relatively slow start to the year, in terms of new things on the subordinated side.

Okay thanks.

That's all my questions.

Thank you.

(Operator instructions)

[Sean] Stilmar.

Sorry guys, for my poor phone operation there.

No problem.

The first question is -- with regards to all the headlines and sequestration -- I know there is a couple of investments that you have in the defense arena, or maybe businesses around military basis.

How do you guys think about, first, looming sequestration, and either the risks -- and maybe potential opportunities in your portfolio -- that this might pose?

Yes, I think, as you know, at Solar Capital, going back closer to the time of our IPO in 2010, we did have more exposure to government services generally, whether it was in ISC or Booz Allen, and those, as you know, have been repaid.

So we really don't have much exposure over at Solar, and as we look to our portfolio, we really don't have expect it to have any near-term impact.

As you know, our big sector at Solar is food and beverage.

So I guess, to the extent -- on the margin, derivatively, to the extent that it affects employment in the government services sector, perhaps there is going to be some trickle-down impact, but we don't think will be material, from Solar's perspective.

do have a little bit of exposure over at Solar Senior, which we will address our next conference call.

Right.

Absolutely.

And then, the second part -- it was externally touched on, but maybe, pulling back up -- you obviously have a -- it's been a great-performing investment with MidCap Financial.

You have made this Crystal acquisition.

How should we start thinking about as you are, sort of, expending your footprint?

Are there -- it seems like the sourcing and origination platform is probably a lot bigger than we would just see from just SLRC or SUNS, just from the network of your investments.

Can we start thinking -- as we started thinking 2013, and maybe even 2014, as the long-term business plan, is this a conscious strategy of yours, to sort of expand the footprint of the management team and your sourcing ability -- sort of buy your own capital?

Absolutely.

As I think -- look, we view ourselves as -- our core competency is investing in levered companies, whether that is senior subordinate or asset-based.

I think the important thing for us is -- whether it is someone like Crystal -- is that we still are controlling investment decisions here.

Bruce and I are the investment committee.

We don't want to have to change.

To the extent that we do find other opportunities or teams that we want to back -- they are teams that we are going to have spent a year with, like we did in Crystal before making a decision to invest in it -- and in a business that is very consistent with our culture and approach.

Great thank you guys.

Please stand by for your next question.

Ryan Lynch.

Good morning, gentlemen.

Hi, Ryan.

About how much pass-due income was received from Granite in Q4?

Just about -- a little over $2 million.

Okay.

And then one other kind of quick question.

Your Grocery Outlet and T&D -- you said they were both repaid a premium to par.

Can you guys tell us what kind of premiums they were repaid at?

It was a couple of points.

It was not the material driver of, though, of our [NII].

Okay, a couple points in each one?

Yes.

Alright.

That's all.

Thanks, guys.

Thanks, Ryan.

And I would now like to turn the call back over to Michael Gross, Chairman and CEO, for closing remarks.

Think you much for all your time.

We look forward to talking with those are involved in SUNS in the next 20 minutes, and if not we will talk to in a couple of months, after Q1.

Take care.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect.

Good day.