SLR Investment Corp (SLRC) 2018 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Q2 2018 Solar Capital Earnings Conference Call.

女士們先生們，美好的一天，歡迎參加 2018 年第二季度太陽能資本收益電話會議。

(Operator Instructions) As a reminder, this call is being recorded.

（操作員說明）提醒一下，此通話正在錄音中。

I would like to turn the call over to Michael Gross, Chairman and Chief Executive Officer.

我想把電話轉給董事長兼首席執行官邁克爾·格羅斯。

You may begin.

你可以開始了。

Thank you very much, and good morning.

非常感謝，早上好。

Welcome to Solar Capital's earnings call for the quarter ended June 30, 2018.

歡迎來到 Solar Capital 截至 2018 年 6 月 30 日的季度財報電話會議。

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

今天，我們的首席運營官 Bruce Spohler 和我一起來到這裡；和我們的首席財務官 Richard Peteka。

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

Rich，在我們開始之前，請先介紹一下網絡廣播和前瞻性陳述好嗎？

Of course, Michael.

當然，邁克爾。

Thank you.

謝謝。

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

我想提醒大家，今天的電話和網絡直播正在錄製中。

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

請注意，它們是 Solar Capital Ltd. 的財產，嚴禁以任何形式進行未經授權的廣播。

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

此電話會議正在我們的網站 www.solarcapltd.com 上進行網絡直播。

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

正如我們的收益新聞稿中所披露的那樣，今天晚些時候將提供此次電話會議的音頻重播。

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

我還想提請您注意我們新聞稿中有關前瞻性信息的慣例披露。

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.

在今天的電話會議和網絡廣播中發表的聲明可能構成前瞻性聲明，涉及未來事件或我們未來的業績或財務狀況。

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

這些陳述不是我們未來業績、財務狀況或結果的保證，並涉及許多風險和不確定性。

Additionally, past performance is not indicative of future results.

此外，過去的表現並不代表未來的結果。

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.

實際結果可能因多種因素而存在重大差異，包括我們在提交給美國證券交易委員會的文件中不時描述的因素。

Solar Capital Ltd.

太陽能資本有限公司

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

除非法律要求，否則不承擔更新任何前瞻性陳述的義務。

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

要獲取我們最新提交給美國證券交易委員會的文件的副本，請訪問我們的網站或致電 (212) 993-1670 與我們聯繫。

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

此時，我想把電話轉回給我們的董事長兼首席執行官邁克爾·格羅斯。

Thank you, Rich.

謝謝你，里奇。

In the second quarter, Solar Capital delivered solid operating results and extended our long-running strong fundamental performance as measured by credit quality, NAV preservation and earnings power.

在第二季度，Solar Capital 取得了穩健的經營業績，並延續了我們長期強勁的基本面表現（以信用質量、資產淨值保值和盈利能力衡量）。

At June 30, 2018, Solar Capital's portfolio was 100% performing, and our net asset value was $21.93 per share, up $0.06 per share from the prior quarter.

截至 2018 年 6 月 30 日，Solar Capital 的投資組合表現 100%，我們的資產淨值為每股 21.93 美元，比上一季度每股上漲 0.06 美元。

During the quarter, we generated $0.45 of net investment income per share, consistent with the prior quarter.

本季度，我們產生了 0.45 美元的每股淨投資收益，與上一季度持平。

Fundamental credit performance continued to be strong, supported by stable economic conditions and corporate earnings growth.

在穩定的經濟狀況和企業盈利增長的支持下，基本信貸表現繼續強勁。

At June 30, over 98% of Solar Capital's highly diversified comprehensive portfolio was comprised of senior secured cash flow and asset-based loans, with 78% of them in floating rate loans.

截至 6 月 30 日，Solar Capital 高度多元化的綜合投資組合中超過 98% 由高級擔保現金流和基於資產的貸款組成，其中 78% 為浮動利率貸款。

During these frothy market conditions in cash flow lending, our asset-based lending businesses, including Crystal, Nations Equipment Finance and Life Science, facilitated portfolio expansion via loans with strong structural protections.

在現金流貸款的這些泡沫市場條件下，我們的資產貸款業務，包括 Crystal、Nations Equipment Finance 和 Life Science，通過具有強大結構保護的貸款促進了投資組合擴張。

Not only do our asset-based loans carry credit protections and yields superior to those available in the capital market, but the higher income we receive from our asset-based loans enables us to be more highly selective in underwriting middle-market cash flow transactions.

我們的資產貸款不僅具有優於資本市場的信用保護和收益率，而且我們從資產貸款中獲得的更高收入使我們能夠更有選擇性地承銷中間市場現金流交易。

Our barbell approach to portfolio construction has allowed Solar Capital to maintain a weighted average comprehensive portfolio yield at fair value close to 11% in the face of continued spread compression in cash flow lending.

我們對投資組合構建的槓鈴方法使 Solar Capital 能夠在現金流貸款持續利差壓縮的情況下，將公允價值的加權平均綜合投資組合收益率維持在接近 11% 的水平。

In addition, approximately 65% of our comprehensive [portfolio] assets in the second quarter are from specialty financed investment strategies.

此外，第二季度我們綜合[投資組合]資產中約有 65% 來自專業融資投資策略。

Yesterday, we announced that Solar Capital's board approved the reduction in the asset coverage requirements under the Small Business Credit Availability Act.

昨天，我們宣布 Solar Capital 的董事會批准根據《小企業信貸可用性法》降低資產覆蓋率要求。

As a result, on June -- on August 2, 2019, Solar Capital's asset coverage requirements will change from 200% to 150% and the company will target a range of 0.9 to 1.25x debt to equity.

因此，從 2019 年 6 月到 8 月 2 日，Solar Capital 的資產覆蓋率要求將從 200% 變為 150%，公司的目標是將債務與股本的比率控制在 0.9 到 1.25 倍之間。

Given our history of a very conservative use of leverage, we expect to operate at a substantial cushion to the new allowable regulatory limits.

鑑於我們對槓桿的使用非常保守的歷史，我們希望在新的允許監管限制下有很大的緩衝。

In order to potentially accelerate the adoption, Solar Capital's Board authorized the submission of a proposal for voting shareholders to approve the modified asset coverage requirement.

為了有可能加速採用，Solar Capital 的董事會授權提交一份提案，供有投票權的股東批准修改後的資產覆蓋要求。

If passed, the change will go into effect the day after the shareholder meeting.

如果通過，該變更將於股東大會次日生效。

Solar Capital's Board also approved an amendment to the investment advisory agreement, reducing the annual base management fee to 1% on assets financed using leverage over 1x debt to equity.

Solar Capital 的董事會還批准了投資諮詢協議的修正案，將使用超過 1 倍債權比的槓桿融資的資產的年度基本管理費降至 1%。

The asset coverage modification will not change our investment strategy, but it will enhance Solar Capital's ability to further expand our specialty finance asset-based lending platform.

資產覆蓋範圍的修改不會改變我們的投資策略，但會增強 Solar Capital 進一步擴展我們的專業金融資產貸款平台的能力。

The additional flexibility will also enable Solar Capital to simplify our business model.

額外的靈活性還將使 Solar Capital 能夠簡化我們的業務模型。

Specifically, we expect to bring the SSLPs' assets onto the company's balance sheet.

具體來說，我們希望將 SSLPs 的資產納入公司的資產負債表。

In the program's current format, SSLP equity is included in our portfolio as a nonqualified asset, which is capped at 30% of our gross assets.

在該計劃的當前格式中，SSLP 股權作為非合格資產包含在我們的投資組合中，其上限為我們總資產的 30%。

By consolidating the SSLPs, our portfolio of cash flow senior secured loans will have approximately the same leverage on balance sheet as the current look through leverage but will count as a qualified asset.

通過合併 SSLP，我們的現金流高級擔保貸款組合在資產負債表上的槓桿率將與當前的槓桿率大致相同，但將被視為合格資產。

This will free up 30% capacity, and once the new asset coverage requirements are in place, we will have even greater strategic flexibility to make acquisitions and expand our specialty finance platform.

這將釋放 30% 的產能，一旦新的資產覆蓋要求到位，我們將擁有更大的戰略靈活性來進行收購和擴展我們的專業金融平台。

Collapsing the SSLPs will also result in enhanced transparency, simplicity of reporting and streamlined decision-making.

取消 SSLP 還將提高透明度、簡化報告並簡化決策。

We intend to move closer to our new target leverage range by growing our portfolio organically over time but only when the market opportunity permits.

我們打算通過隨著時間的推移有機地增加我們的投資組合來接近我們新的目標槓桿範圍，但前提是市場機會允許。

Consistent with our longstanding conservative investment approach, we will be prudent with the use of leverage.

與我們長期以來保守的投資方法一致，我們將謹慎使用槓桿。

We view the increased leverage flexibility as simply another investment and risk management tool.

我們將增加的槓桿靈活性視為簡單的另一種投資和風險管理工具。

As you've seen from our conservative historical approach to leverage, if the market opportunity does not merit increased leverage, then we will not incur it.

正如您從我們保守的槓桿歷史方法中看到的那樣，如果市場機會不值得增加槓桿，那麼我們就不會招致它。

We will continue to be highly disciplined in deploying our available capital.

我們將繼續高度自律地部署可用資金。

When combined with the management fee reduction, we believe the additional leverage flexibility provides Solar Capital with the potential to generate incremental long-term returns to shareholders.

結合管理費的減少，我們認為額外的槓桿靈活性為 Solar Capital 提供了為股東帶來增量長期回報的潛力。

Importantly, Solar Capital has sufficient debt capacity in place today to operate within the range of targeted debt to equity without having to raise additional equity or debt.

重要的是，Solar Capital 今天擁有足夠的債務能力，可以在目標債務與股權的範圍內運營，而無需籌集額外的股權或債務。

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

此時，我會將電話轉給我們的首席財務官 Rich Peteka，向您介紹財務亮點。

Thank you, Michael.

謝謝你，邁克爾。

Solar Capital Ltd.'s net asset value at June 30, 2018, was $926.8 million or $21.93 per share compared to $924.3 million or $21.87 per share at March 31.

Solar Capital Ltd. 截至 2018 年 6 月 30 日的資產淨值為 9.268 億美元或每股 21.93 美元，而 3 月 31 日為 9.243 億美元或每股 21.87 美元。

At June 30, Solar Capital's on-balance sheet investment portfolio had a fair market value of $1.40 billion in 100 portfolio companies across 32 industries compared to a fair market value of $1.47 billion in 100 portfolio companies across 33 industries at March 31, 2018.

截至 6 月 30 日，Solar Capital 的資產負債表內投資組合在 32 個行業的 100 家投資組合公司中的公允市值為 14 億美元，而 2018 年 3 月 31 日在 33 個行業的 100 家投資組合公司中的公允市值為 14.7 億美元。

The weighted average yield on our income-producing portfolio was 10.1% at June 30, 2018, compared to 10.6% at March 31, measured at cost.

按成本計算，截至 2018 年 6 月 30 日，我們創收投資組合的加權平均收益率為 10.1%，而 3 月 31 日為 10.6%。

At June 30, Solar Capital had $473.6 million of debt outstanding and leverage of 0.5x net debt to equity compared to $545.5 million and 0.58x at March 31.

截至 6 月 30 日，Solar Capital 的未償債務為 4.736 億美元，淨債務與股本的槓桿率為 0.5 倍，而 3 月 31 日為 5.455 億美元和 0.58 倍。

Subsequent to quarter end, the company utilized the accordion feature under its revolving credit facility and further expanded revolving commitments by $35 million up to now $480 million in total revolving commitments.

季度末後，該公司利用其循環信貸額度下的手風琴功能，將循環承諾進一步擴大了 3500 萬美元，目前循環承諾總額達到 4.8 億美元。

When considering available capacity from the company's credit facility, combined with available capital at 6/30 from the nonrecourse credit facilities at Crystal, Nations Equipment Finance and the SSLPs and including the $35 million of expanded balance sheet revolver commitments, Solar Capital had more than $675 million to fund future portfolio growth, subject to borrowing base limits.

考慮到公司信貸額度的可用能力，加上來自 Crystal、Nations Equipment Finance 和 SSLPs 的無追索權信貸額度的 6/30 可用資本，並包括 3500 萬美元的擴大資產負債表循環承諾，Solar Capital 擁有超過 675 美元萬以資助未來的投資組合增長，但受借款基數限制。

Turning to the P&L, for the 3 months ended June 30, 2018, gross investment income totaled $39.2 million versus $39.0 million for the 3 months ended March 31, 2018.

談到損益表，截至 2018 年 6 月 30 日的三個月，總投資收入總計 3920 萬美元，而截至 2018 年 3 月 31 日的三個月為 3900 萬美元。

Expenses totaled $20.0 million for the 3 months ended June 30 compared to $20.1 million for the 3 months ended March 31.

截至 6 月 30 日的三個月，費用總計 2000 萬美元，而截至 3 月 31 日的三個月，費用為 2010 萬美元。

Accordingly, the company's net investment income for the 3 months ended June 30, 2018, totaled $19.2 million or $0.45 per average share compared to $18.9 million or $0.45 per average share for the 3 months ended March 31.

因此，公司截至 2018 年 6 月 30 日止三個月的淨投資收益總計 1920 萬美元或平均每股收益 0.45 美元，而截至 3 月 31 日止三個月的淨投資收益為 1890 萬美元或平均每股收益 0.45 美元。

Below the line, the company had net realized and unrealized gains for the second fiscal quarter totaling $0.6 million versus net realized and unrealized gains of $1.2 million for the first quarter.

在此線之下，公司第二財季的已實現和未實現淨收益總計 60 萬美元，而第一季度的已實現和未實現淨收益為 120 萬美元。

Ultimately, the company had a net increase in net assets resulting from operations of $19.8 million or $0.47 per average share for the 3 months ended June 30.

最終，該公司在截至 6 月 30 日的三個月中，運營產生的淨資產淨增加 1,980 萬美元或每股平均增加 0.47 美元。

This compares to an increase of $20.0 million or $0.47 per average share for the 3 months ended March 31.

相比之下，截至 3 月 31 日的三個月增加了 2000 萬美元或每股平均 0.47 美元。

Finally, our Board of Directors recently declared a fiscal third quarter distribution of $0.41 per share payable on October 2, 2018, to shareholders of record on September 20, 2018.

最後，我們的董事會最近宣布將於 2018 年 10 月 2 日向 2018 年 9 月 20 日登記在冊的股東派發每股 0.41 美元的第三財季股息。

With that, I'll turn the call over to our Chief Operating Officer, Bruce Spohler.

有了這個，我將把電話轉給我們的首席運營官 Bruce Spohler。

Thank you, Rich.

謝謝你，里奇。

Overall, the financial health of our portfolio companies remains sound, reflecting our disciplined underwriting and focus on downside protection.

總體而言，我們投資組合公司的財務狀況依然良好，反映了我們嚴格的承銷和對下行保護的關注。

At June 30, the weighted average investment risk rating of Solar's portfolio was just under 2x when measured at fair market value, based on our 1 to 4 risk rating scale, with 1 representing the least amount of risk.

截至 6 月 30 日，根據我們的 1 至 4 風險評級等級，以公平市場價值衡量，Solar 投資組合的加權平均投資風險評級略低於 2 倍，其中 1 代表風險最小。

As further indication of the strong underlying fundamentals of our portfolio, only 1% of our portfolio at fair value was on watch list status.

作為我們投資組合強大的基本面的進一步跡象，我們的投資組合中只有 1% 的公允價值處於觀察名單狀態。

This is near historic lows.

這接近歷史低點。

Additionally, 100% of our portfolio was performing at quarter end.

此外，我們 100% 的投資組合在季度末表現良好。

At June 30, over 78% of Solar's income-producing portfolio was floating rate when measured at fair value.

截至 6 月 30 日，按公允價值衡量，Solar 超過 78% 的創收投資組合採用浮動利率。

The fixed rate loan exposure principally comes from NEF's short-duration equipment financings with an average life of just over 2 years.

固定利率貸款風險主要來自 NEF 的短期設備融資，平均壽命剛剛超過 2 年。

At quarter end, our comprehensive portfolio encompassed 230 distinct issuers across 97 industries.

截至季度末，我們全面的投資組合涵蓋 97 個行業的 230 家不同的發行人。

The average investment per issuer was just over $7.5 million or 0.4% of the overall portfolio.

每個發行人的平均投資剛剛超過 750 萬美元，佔整個投資組合的 0.4%。

Also at June 30, over 98% of our portfolio consisted of senior secured loans comprised of approximately 83% first lien senior secured loans and just under 15% in second lien secured loans.

同樣在 6 月 30 日，我們超過 98% 的投資組合由優先擔保貸款組成，其中約 83% 為第一留置權優先擔保貸款，略低於 15% 為第二留置權擔保貸款。

While our exposure to higher-risk and higher-yielding second lien loans is down from approximately 20% in the first quarter, the weighted average yield of our portfolio was 10.9% compared to 10.8% in Q1.

雖然我們對高風險和高收益的第二留置權貸款的敞口低於第一季度的約 20%，但我們投資組合的加權平均收益率為 10.9%，而第一季度為 10.8%。

We have been able to maintain this yield of close to 11% at the asset level, in spite of spread compression in the cash flow lending market, and have replaced our second lien exposure with lower-risk, higher-return commercial finance investments.

儘管現金流借貸市場的利差壓縮，我們仍能夠在資產層面維持接近 11% 的收益率，並用風險較低、回報較高的商業金融投資取代了我們的第二留置權敞口。

Including activity across our 4 business lines, originations totaled approximately $260 million and repayments were approximately $295 million, resulting in net portfolio reduction of approximately $35 million.

包括我們 4 條業務線的活動，發起總額約為 2.6 億美元，還款總額約為 2.95 億美元，導致投資組合淨減少約 3500 萬美元。

Given the continued heated cash flow market conditions, we intentionally allowed that portfolio to shrink.

鑑於持續的現金流市場狀況，我們有意讓該投資組合縮減。

The modest decline in our cash flow portfolio was predominantly from the repayment of second lien assets and, again, was partially offset by growth through our ABL strategies, which, today, offer more favorable risk return characteristics.

我們現金流量組合的適度下降主要來自第二留置權資產的償還，並且再次被我們的 ABL 策略的增長部分抵消，這些策略在今天提供了更有利的風險回報特徵。

Now let me give a brief update on each of our 4 investment verticals.

現在讓我簡要介紹一下我們的 4 個投資垂直領域中的每一個。

Our cash flow business invests in senior secured loans, which are predominately first lien and stretch first lien, to sponsor-backed companies in the upper mid-market with average EBITDA of approximately $70 million today.

我們的現金流業務投資於高級擔保貸款，這些貸款主要是優先留置權和延伸優先留置權，提供給中高端市場的讚助商支持的公司，目前平均 EBITDA 約為 7000 萬美元。

Included in this vertical are senior secured cash flow loans held both on balance sheet as well as in our SSLPs.

這個垂直領域包括在資產負債表和我們的 SSLP 中持有的高級擔保現金流貸款。

During the second quarter, we originated cash flow investments of approximately $45 million and had repayments of approximately $122 million.

在第二季度，我們發起了約 4500 萬美元的現金流投資，並償還了約 1.22 億美元。

At June 30, our cash flow loan portfolio was just over $600 million, representing 34% of our $1.8 billion total portfolio.

截至 6 月 30 日，我們的現金流貸款組合剛剛超過 6 億美元，占我們 18 億美元總投資組合的 34%。

Our exposure to second lien loans declined again to 15% of this portfolio, down from 20% in Q1.

我們對第二留置權貸款的敞口再次下降至該投資組合的 15%，低於第一季度的 20%。

We expect this to continue to decline during the remainder of 2018.

我們預計這將在 2018 年剩餘時間內繼續下降。

At June 30, the weighted average trailing 12-month revenue and EBITDA for our issuers were up mid-single-digits, reflecting continued positive fundamental trends for our portfolio companies.

截至 6 月 30 日，我們發行人過去 12 個月的加權平均收入和 EBITDA 呈中等個位數增長，反映出我們投資組合公司的持續積極基本面趨勢。

In the cash flow segment, leverage [to our] security was just under 5x, slightly lower than first quarter, and interest coverage was approximately 2.3x.

在現金流部分，[對我們的] 證券的槓桿率略低於 5 倍，略低於第一季度，利息保障倍數約為 2.3 倍。

In addition, the weighted average yield on our cash flow investments was 9.6%, consistent with the prior quarter.

此外，我們現金流投資的加權平均收益率為 9.6%，與上一季度一致。

Turning to our asset-based lending business, Crystal Finance, these loans, as you may recall, are made up of loans against realizable liquidation value of an underlying borrowers' assets, and they come with meaningful upfront and prepayment fees as well as structural protections.

談到我們基於資產的貸款業務 Crystal Finance，您可能還記得，這些貸款是由基於借款人資產的可變現清算價值的貸款組成的，它們附帶有意義的預付費用和預付費用以及結構性保護.

During the second quarter, we funded $108 million of new asset-based investments and had repayments of approximately $67 million, resulting in portfolio growth of just over $40 million.

在第二季度，我們為新的基於資產的投資提供了 1.08 億美元的資金，並償還了大約 6700 萬美元，導致投資組合增長超過 4000 萬美元。

At June 30, the senior secured asset-based portfolio was approximately $567 million, representing 32% of our total portfolio.

截至 6 月 30 日，基於高級擔保資產的投資組合約為 5.67 億美元，占我們總投資組合的 32%。

The weighted average yield of the asset-based portfolio was 12.3%, up slightly from the first quarter of 12.1%.

基於資產的投資組合的加權平均收益率為 12.3%，略高於第一季度的 12.1%。

Our ABL platform paid Solar Capital a second quarter dividend of $7.5 million, equating to a 10.7% yield on cost.

我們的 ABL 平台向 Solar Capital 支付了 750 萬美元的第二季度股息，相當於 10.7% 的成本收益率。

Moving on to our equipment finance business, NEF, Solar Capital entered this business through the acquisition of NEF last year.

接下來是我們的設備融資業務 NEF，Solar Capital 去年通過收購 NEF 進入了該業務。

Included in this business are equipment financings held both directly on Solar's balance sheet as well as in our wholly owned subsidiary, NEF Holdings, that for tax efficiency, holds certain of these investments.

該業務包括直接在 Solar 的資產負債表上以及我們的全資子公司 NEF Holdings 持有的設備融資，為了節稅，NEF Holdings 持有其中的某些投資。

During the second quarter, NEF had new investments of approximately $60 million and had portfolio repayments of approximately $25 million.

第二季度，NEF 的新投資約為 6000 萬美元，投資組合償還額約為 2500 萬美元。

At quarter end, our equipment finance strategy had a total portfolio of approximately $350 million of funded assets to 136 different borrowers with an average exposure $2.6 million.

在本季度末，我們的設備融資策略為 136 個不同的借款人提供了大約 3.5 億美元的融資資產組合，平均風險敞口為 260 萬美元。

The equipment finance asset class represents approximately 20% of our total portfolio.

設備融資資產類別約占我們總投資組合的 20%。

100% of NEF's investments are first lien loans and approximately 95% are fixed rate.

NEF 100% 的投資是第一留置權貸款，大約 95% 是固定利率。

The interest rate risk is mitigated through the relatively short holding period of just over 2 years as well as our efforts to match fund NEF's assets with our unsecured fixed rate liabilities of approximately $250 million.

通過僅超過 2 年的相對較短的持有期以及我們努力將 NEF 的資產與我們約 2.5 億美元的無擔保固定利率負債相匹配，利率風險得到了緩解。

The weighted average yield on our equipment finance portfolio was 10.5% at quarter end, consistent with the prior quarter.

我們設備融資組合的加權平均收益率在季度末為 10.5%，與上一季度一致。

Finally, a brief update on our life science lending business.

最後，簡要介紹一下我們的生命科學貸款業務。

As a reminder, these are first lien senior secured loans and typically come with either success fees or warrants to enhance our yield.

提醒一下，這些是優先留置權優先擔保貸款，通常附帶成功費用或認股權證以提高我們的收益率。

During the second quarter, our team originated just under $50 million of new senior secured life science loans.

在第二季度，我們的團隊發起了近 5000 萬美元的新高級有擔保生命科學貸款。

Repayments totaled approximately $80 million.

還款總額約為 8000 萬美元。

Our life science portfolio totaled approximately $204 million at quarter end across 19 borrowers with an average investment size of just over $10 million.

截至季度末，我們的生命科學投資組合在 19 個借款人中總計約 2.04 億美元，平均投資規模剛剛超過 1000 萬美元。

Our life science loans represent just over 11% of our total portfolio.

我們的生命科學貸款僅占我們總投資組合的 11% 以上。

The weighted average yield on the life science portfolio is approximately 12% and, again, excluding any exit, success fees and warrants.

生命科學投資組合的加權平均收益率約為 12%，同樣不包括任何退出、成功費用和認股權證。

As Michael mentioned, the middle-market cash flow lending environment remains frothy.

正如邁克爾所提到的，中間市場現金流貸款環境仍然存在泡沫。

We at Solar benefit from our diversified origination sources across not only cash flow but also asset-based lending verticals, which allow us to allocate capital to investments that meet our strict underwriting criteria regardless of market conditions.

我們在 Solar 受益於我們多元化的來源，不僅包括現金流，還包括基於資產的貸款垂直領域，這使我們能夠將資本分配給符合我們嚴格承保標準的投資，而不管市場條件如何。

We will continue to be prudent and highly disciplined in deploying our substantial available capital.

我們將繼續審慎和高度自律地部署大量可用資金。

Now I'll turn the call back to Michael.

現在我會把電話轉回給邁克爾。

Thank you, Bruce.

謝謝你，布魯斯。

From the inception of Solar Capital 12 years ago, our investment and management decisions have focused on building long-term shareholder value, protecting capital and maintaining alignment with our shareholders.

自 12 年前 Solar Capital 成立以來，我們的投資和管理決策一直專注於建立長期股東價值、保護資本並與股東保持一致。

We have been disciplined in the face of sustained frothy credit markets and have remained patient and disciplined in not compromising credit quality for yield.

面對持續的泡沫信貸市場，我們一直受到紀律處分，並且在不為收益而犧牲信貸質量方面保持耐心和紀律。

We have been thorough in analyzing and reaching our decision to reduce the asset coverage requirements.

我們一直在徹底分析並做出降低資產覆蓋要求的決定。

We studied how the increased leverage flexibility could impact Solar Capital's strategic priorities and long-term value creation for our shareholders as well as assessed the associated risks and how they can be managed and mitigated.

我們研究了增加的槓桿靈活性如何影響 Solar Capital 的戰略重點和為我們的股東創造的長期價值，並評估了相關風險以及如何管理和減輕這些風險。

As you know, we have never allowed leverage to drive our investment decisions.

如您所知，我們從未允許槓桿來推動我們的投資決策。

For Solar Capital, our Board's decision to modify the asset coverage requirement focused on the opportunity for balance sheet optimization, portfolio and financing flexibility and risk management and not on maximizing leverage.

對於 Solar Capital，我們董事會修改資產覆蓋率要求的決定側重於優化資產負債表、投資組合和融資靈活性以及風險管理的機會，而不是最大化槓桿。

The greater flexibility will not change our investment strategy.

更大的靈活性不會改變我們的投資策略。

However, it meaningfully enhances our ability to grow, build and potentially acquire niche specialty finance businesses as we continue to broaden our diversified commercial finance platform.

然而，隨著我們繼續擴大多元化商業金融平台，它顯著增強了我們發展、建立和潛在收購利基專業金融業務的能力。

Importantly, the reduced asset coverage requirement allows us to operate with an increased cushion to the regulatory leverage threshold, which should be a significant benefit in more volatile markets.

重要的是，降低的資產覆蓋率要求使我們能夠以更高的緩衝來應對監管槓桿閾值，這在更加動蕩的市場中應該是一個顯著的好處。

We have maintained an investment philosophy of assuming we are late in the credit cycle, and we believe that in the current investment environment, it pays to be cautious.

我們一直保持假設我們處於信貸週期後期的投資理念，我們相信在當前的投資環境下，保持謹慎是值得的。

No one knows how long seemingly inflated enterprise values, loose structures and low pricing will persist or when a correction will come.

沒有人知道看似膨脹的企業價值、鬆散的結構和低定價會持續多久，或者何時會出現調整。

We believe our differentiated origination platform and diversified portfolio position us well to navigate in any environment we face.

我們相信，我們差異化的起源平台和多元化的產品組合使我們能夠在我們面臨的任何環境中順利航行。

At 0.5x net debt to equity, we are underlevered and have substantial dry powder to deploy via our differentiated investment verticals.

在 0.5 倍的淨債務與股本比率下，我們槓桿不足，並且有大量幹火藥可以通過我們差異化的垂直投資來部署。

We believe Solar Capital has a clear path to a run rate quarterly net investment income per share in the mid- to upper 40s.

我們相信 Solar Capital 有一條清晰的道路，可以在 40 多歲左右實現季度每股淨投資收益。

As the earnings increase on a sustainable basis, our Board of Directors will further evaluate increasing our distribution to shareholders.

隨著收益在可持續的基礎上增加，我們的董事會將進一步評估增加我們對股東的分配。

At 11:00 this morning, we'll be hosting an earnings call for the second quarter results of Solar Senior Capital, or SUNS.

今天上午 11:00，我們將召開 Solar Senior Capital（簡稱 SUNS）第二季度財報電話會議。

Our ability to provide traditional middle-market senior secured financing through this vehicle continues to enhance our origination team's ability to meet our clients' capital needs and we continue to benefit from the value proposition in Solar Capital's deal flow.

我們通過這種工具提供傳統的中間市場高級擔保融資的能力繼續增強我們的發起團隊滿足客戶資本需求的能力，我們繼續受益於 Solar Capital 交易流程中的價值主張。

We thank you very much for your time this morning.

我們非常感謝你今天早上抽出時間來。

Operator, could you please open the line for questions?

接線員，您可以打開問題熱線嗎？

(Operator Instructions) Our first question comes from Chris York of JMP Securities.

（操作員說明）我們的第一個問題來自 JMP 證券公司的 Chris York。

So maybe I will begin with Mr. Peteka.

所以也許我將從皮特卡先生開始。

Embedded in interest income is unamortized loan fees and prepayment fees.

利息收入中包含未攤銷的貸款費用和預付款費用。

So how much accelerated [OI fees,] prepayment fees were in the interest income this quarter?

那麼本季度的利息收入中有多少加速 [OI 費用，] 預付款費用？

Accelerated?

加速？

Hold on.

堅持，稍等。

If we include some of the life science income that we get, it would be -- one second.

如果我們包括我們獲得的一些生命科學收入，那將是 - 一秒鐘。

Accelerated, about $0.02 a share.

加速，每股約 0.02 美元。

And then shifting to strategy a little bit.

然後稍微轉向戰略。

So as I analyze recent drivers of portfolio growth in maybe say over the last 2 years, the main drivers have been your commercial finance niches; the growth has been welcomed.

因此，正如我分析的最近兩年投資組合增長的驅動因素一樣，主要驅動因素是您的商業金融利基市場；增長受到歡迎。

But how should investors balance the lack of growth in sponsored cash flow lending with the near-term growth potential being provided with more leverage?

但是，投資者應該如何平衡贊助現金流貸款增長不足與近期增長潛力提供更多槓桿？

I think to echo Michael's comments, Chris, what we would say is we think that we are well positioned for growth across all the verticals but don't want to be reliant on growth in any one vertical.

我想回應邁克爾的評論，克里斯，我們要說的是，我們認為我們為所有垂直領域的增長做好了準備，但不想依賴任何一個垂直領域的增長。

And as you and everyone around our industry knows, the cash flow sector has become somewhat frothy while fundamentals are strong, structures have been weakened at the levels that we've never seen in our 30-year career.

正如您和我們行業中的每個人都知道的那樣，現金流行業已經變得有些泡沫，而基本面強勁，結構被削弱到我們 30 年職業生涯中從未見過的水平。

And so we like the ability that we can be opportunistic and deploy the capital across a variety of strategies.

因此，我們喜歡機會主義並通過各種策略部署資本的能力。

I think near term, we wouldn't expect any meaningful growth in cash flow unless some recent transactions actually turned into a trend and we saw some better conditions in the cash flow business.

我認為短期內，我們預計現金流量不會有任何有意義的增長，除非最近的一些交易實際上變成了一種趨勢並且我們看到現金流量業務出現了一些更好的情況。

We continue to see growth opportunities in our specialty finance, to your point.

就您而言，我們繼續在我們的專業金融領域看到增長機會。

And by putting the SSLPs on balance sheet and adopting the 2:1, albeit with a much lower target of 0.9 to 1.25, it really frees us up to do what we've done well over the last couple years in terms of acquiring and adding and incubating other specialty finance businesses.

通過將 SSLPs 放在資產負債表上並採用 2:1，儘管目標要低得多，為 0.9 到 1.25，但它確實讓我們騰出時間去做我們在過去幾年在收購和增加方面做得很好的事情孵化其他專業金融業務。

So I think if you're looking for near-term growth, that's where it would most likely come from.

所以我認為，如果你正在尋找近期增長，那就是它最有可能來自的地方。

Got it.

知道了。

Okay.

好的。

And then I guess you talked a little bit about collapsing the JVs.

然後我猜你談到了一些關於關閉合資企業的事情。

How will that work?

那將如何運作？

And then what is the timing for the on balance sheet of these assets, presuming you get shareholder approval?

然後假設您獲得股東批准，這些資產在資產負債表上的時間是什麼時候？

So we do not need shareholder approval to bring these on balance sheet.

因此，我們不需要股東批准即可將這些納入資產負債表。

And shareholder approval is likely to happen early in the fourth quarter.

股東批准可能會在第四季度初發生。

But we will be bringing these on balance sheet by the end of the third quarter.

但我們將在第三季度末將這些納入資產負債表。

So when you see our Q3 10-Q, what will look different is all the assets within the SSLPs will show up on our schedule of investments because they will be consolidated onto our balance sheet, and all the liabilities of the SSLPs will show up as debt on our balance sheet.

因此，當您看到我們的 Q3 10-Q 時，看起來不同的是 SSLPs 中的所有資產都將出現在我們的投資計劃表中，因為它們將合併到我們的資產負債表中，而 SSLPs 的所有負債將顯示為我們資產負債表上的債務。

But had we done that, Chris, just for illustration purposes, at June 30 and actually collapsed then, our 0.5 leverage would be 0.65 with the SSLPs consolidated, our pro rata share.

但是，克里斯，如果我們這樣做只是為了說明目的，在 6 月 30 日實際上崩潰了，我們的 0.5 槓桿將是 0.65，合併 SSLP，我們按比例分配。

Okay.

好的。

So just to confirm, so at the end of Q3, you'll collapse, bring all the assets on, bring the liabilities on the balance sheet.

所以只是確認一下，所以在第三季度末，你會崩潰，把所有的資產都帶上，把負債記在資產負債表上。

And then Q4 is when the special meeting will occur.

然後是第 4 季度召開特別會議的時間。

So you don't -- that's not the impediment, the approval.

所以你不——那不是障礙，不是批准。

You're going to move forward the collapse.

你將繼續崩潰。

We're going to collapse at the end of Q3.

我們將在第三季度末崩潰。

We're not going to know what the outcome of the shareholder vote is at the time.

我們當時不會知道股東投票的結果是什麼。

We fully expect to get it, but that's a part of our strategy.

我們完全希望得到它，但這是我們戰略的一部分。

Got it.

知道了。

Okay.

好的。

Last question, then I'll potentially hop back in queue.

最後一個問題，那麼我可能會跳回到隊列中。

So what are your target ROE thresholds?

那麼您的目標 ROE 閾值是多少？

Or how should investors think about the additional leverage capacity that should accrue to investors in that incremental return?

或者投資者應該如何考慮在增量回報中應該為投資者帶來的額外槓桿能力？

I believe you had targeted 9% ROE at 0.7x under the 1:1 framework.

我相信您在 1:1 框架下將 9% 的 ROE 定為 0.7 倍。

I'm just curious on how (inaudible).

我只是好奇如何（聽不清）。

I think the simplest way to answer that and most meaningful, I think, for our shareholders is that were we to achieve our debt to equity target assuming the environment we're in today and where we're seeing returns we're seeing today, we will have an earnings power of around $0.50 on net investment income on a quarterly basis.

我認為，對我們的股東來說，回答這個問題最簡單也是最有意義的方法是，假設我們今天所處的環境以及我們今天看到的回報，我們是否能夠實現我們的債務股本目標，我們每季度的淨投資收益約為 0.50 美元。

So a significant upside from where we are today.

因此，我們今天所處的位置有很大的好處。

(Operator Instructions) Our next question comes from Ryan Lynch of KBW.

（操作員說明）我們的下一個問題來自 KBW 的 Ryan Lynch。

With passing the 2:1 leverage, you guys set out a target of 0.9 to 1.25.

通過 2:1 槓桿，你們設定了 0.9 到 1.25 的目標。

That feels like a pretty ambitious target given that historically, you guys have really never run closer to your previous target and always run with pretty low leverage.

從歷史上看，這感覺是一個非常雄心勃勃的目標，你們真的從來沒有接近過你以前的目標，而且總是以相當低的槓桿率運行。

And additionally, you guys have the cash flow lending portion of your portfolio continues to shrink.

此外，你們投資組合中的現金流貸款部分繼續縮減。

I think you said that you expect it to shrink in the second half of the year.

我想你說你預計它會在下半年收縮。

So I guess, just what are the prospects of you guys hitting within your guys' target leverage ratio of 0.9 to 1.25 in the next, say, 12 to 18 months?

所以我想，你們在接下來的 12 到 18 個月內達到 0.9 到 1.25 的目標槓桿率的前景如何？

And if it's a low probability of hitting that, I guess, wouldn't collapsing the SSLPs onto your balance sheet give you the flexibility to further utilize your 30% bucket and it would only increase your debt to equity to 0.65, as you mentioned and it -- without actually passing the 2:1 and not giving you guys any sort of risk of potential downgrade from the rating agencies?

如果達到這個目標的可能性很低，我想，將 SSLP 折疊到您的資產負債表上不會讓您靈活地進一步利用您的 30% 桶，而且它只會將您的債務與股本比增加到 0.65，正如您提到的和它 - 沒有實際通過 2:1 並且沒有給你們任何評級機構潛在降級的風險？

So 2 parts to your question.

所以你的問題分為兩部分。

Yes, as Michael mentioned, we are going to collapse the SSLPs.

是的，正如 Michael 提到的，我們將取消 SSLP。

It will only take us to 0.65.

它只會帶我們到 0.65。

But just to reiterate our comments around the 2:1, today, we would tell you, near term, we don't expect to grow much beyond that unless conditions were to change in the cash flow market, although we do continue to see growth in our specialty finance verticals.

但只是重申我們關於 2:1 的評論，今天，我們會告訴你，短期內，我們預計不會超過這個增長，除非現金流市場的情況發生變化，儘管我們確實繼續看到增長在我們的專業金融垂直領域。

What the 2:1 does in connection with bringing the SSLPs on balance sheet is to your -- the rest of your question, over 12 to 18 months, we would expect to utilize that additional flexibility to expand our commercial finance platform.

2:1 在將 SSLP 納入資產負債表方面的作用是針對您的 - 您的其餘問題，在 12 到 18 個月內，我們希望利用這種額外的靈活性來擴展我們的商業金融平台。

And I think as part of that, you would see an expansion of our leverage.

我認為作為其中的一部分，你會看到我們的影響力擴大。

So this is more about strategically being able to take advantage of additional acquisitions, additional teams in commercial finance that we can onboard to grow that part of our platform and then opportunistically continue to grow our cash flow business as well.

因此，這更多的是在戰略上能夠利用額外的收購、額外的商業金融團隊，我們可以加入這些團隊來發展我們平台的這一部分，然後機會主義地繼續發展我們的現金流業務。

So near term, you're right, we're probably not going to reach that 0.9 to 1.25 target.

所以短期內，你是對的，我們可能不會達到 0.9 到 1.25 的目標。

The caveat is, we want our team out there aggressively looking for additional commercial finance platforms.

需要注意的是，我們希望我們的團隊積極尋找更多的商業金融平台。

And as you know, that can happen at any time.

如您所知，這隨時可能發生。

Okay.

好的。

That's helpful.

這很有幫助。

And, obviously, you guys have the asset-based lending.

而且，很明顯，你們有基於資產的貸款。

You have the equipment finance.

你有設備資金。

Sounds like you guys intend to grow those 2 current verticals that you have.

聽起來你們打算發展你們目前擁有的兩個垂直領域。

What other areas -- specialty, finance or commercial finance areas you guys are looking to potentially make acquisitions?

你們還有哪些其他領域——專業、金融或商業金融領域有可能進行收購？

Is it to further boost -- bolster your current strategies, equipment financing and asset-based lending?

是否會進一步推動 - 加強您當前的戰略、設備融資和基於資產的貸款？

Or are there any other verticals you guys are potentially looking, at least exploring or wanting to potentially get into?

或者你們是否有任何其他潛在的垂直領域，至少探索或想要進入？

Sure.

當然。

The only one that you left off there is our life science lending business, where we're basically lending against cash and IP.

你唯一離開的是我們的生命科學貸款業務，我們基本上是在現金和知識產權貸款。

We think of that as an ABL platform that is also poised for additional growth with additional 30% flexibility.

我們認為這是一個 ABL 平台，它也準備好以額外的 30% 的靈活性實現額外的增長。

But I think it's a combination of adding to the existing platforms.

但我認為這是添加到現有平台的組合。

We're viewed as a strategic buyer.

我們被視為戰略買家。

Our teams are deep, and we think they can handle additional both portfolios as well as teams where we can diversify geographically.

我們的團隊很深，我們認為他們可以處理更多的投資組合以及我們可以在地理上實現多元化的團隊。

So we would like to grow [that] as well as look at new platforms.

因此，我們希望發展 [that] 以及尋找新平台。

As you know, very often, historically, we've gotten into these businesses by being a lender first and then an owner second.

如您所知，從歷史上看，我們通常首先成為貸方，然後才是所有者，從而進入這些業務。

And so even a loan into these businesses uses up 30% capacity, so this frees us up to plant some seeds across a variety of ABL platforms.

因此，即使向這些企業提供貸款也會佔用 30% 的產能，這樣我們就可以騰出時間在各種 ABL 平台上播種。

(Operator Instructions) Our next question comes from Fin O'Shea of Wells Fargo Securities.

（操作員說明）我們的下一個問題來自 Wells Fargo Securities 的 Fin O'Shea。

Just to expand a little bit on what Ryan was just asking, can you kind of touch on the opportunity set for ABL platforms, vehicles, et cetera, assuming that those 2 are very expensive?

只是稍微擴展一下 Ryan 剛才問的問題，你能不能談談 ABL 平台、車輛等的機會，假設這兩個非常昂貴？

Should -- is this something you're willing to go forward with, pay a premium for a book?

應該 - 這是你願意繼續前進的東西，為一本書支付額外費用嗎？

Or if you can kind of explain what you see is the opportunity set out there.

或者，如果你能解釋一下你看到的是那裡的機會。

I think, again, because historically, we've been very successful in not paying a substantial premium, at least relative to market premiums, if you look at Crystal, if you look at NEF, I think the history of the team, senior management having worked together with a number of other senior members here at Solar in their formative days back at GE Capital, helped drive very attractive pricing, also providing certainty of closure.

我認為，再一次，因為從歷史上看，我們在不支付高額溢價方面非常成功，至少相對於市場溢價而言，如果你看看 Crystal，如果你看看 NEF，我認為團隊的歷史，高級管理層在 GE Capital 的成長期與 Solar 的許多其他高級成員一起工作，幫助推動了非常有吸引力的定價，也提供了關閉的確定性。

So we feel very good about the premiums paid in our life science business.

因此，我們對生命科學業務支付的保費感到非常滿意。

We were able to bring the team on and incubate them and, basically, create a business at book value.

我們能夠讓團隊加入並孵化他們，基本上，以賬面價值創建業務。

But again, because we are a strategic buyer, we feel that we can add on to the existing platforms at more favorable prices and actually buy down our multiple.

但同樣，因為我們是戰略買家，我們覺得我們可以以更優惠的價格增加現有平台，並實際買下我們的倍數。

But clearly, we need to be selective.

但顯然，我們需要有選擇性。

Sure.

當然。

And just kind of with the collapse of the vehicles moving presumably up market on your core balance sheet, this will probably look to be a step closer to SUNS.

只是隨著車輛的崩潰可能在您的核心資產負債表上移動到市場上，這可能看起來更接近 SUNS 了。

Is that -- I know that call is in a few minutes, but is the SUNS platform, too, going to evolve like this?

那是——我知道電話會在幾分鐘內發出，但是 SUNS 平台是否也會像這樣發展？

Or are they going to look a bit more alike?

或者他們會看起來更像一點？

So we'll talk about SUNS later.

所以我們稍後再談 SUNS。

But for both Solar and SUNS, the adoption of the new leverage regime is not changing the target investment strategy at all.

但對於 Solar 和 SUNS 來說，採用新的槓桿機制根本不會改變目標投資策略。

So the cash-flow strategy for Solar will continue to be stretch first lien, not unitranche, not second lien.

因此，Solar 的現金流策略將繼續是優先留置權，而不是單一留置權，也不是次要留置權。

We're not -- our average EBITDA already is very significant, so we're not changing the size we're going after.

我們不是 - 我們的平均 EBITDA 已經非常重要，所以我們不會改變我們追求的規模。

Importantly, though, what we are taking advantage of for Solar is the fact that our capital base across our platform has grown, so we can take down larger transactions for the same-sized companies and spread it across our different vehicles and yet keep our diversification.

不過，重要的是，我們在 Solar 上利用的是我們平台上的資本基礎已經增長，因此我們可以為相同規模的公司完成更大的交易，並將其分散到我們的不同工具中，同時保持我們的多元化.

So I think it is very important for everyone to know that, again, the adoption of this new leverage regime is not changing investment strategy at all.

所以我認為讓每個人都知道這一點非常重要，再次強調，採用這種新的槓桿機制根本不會改變投資策略。

It's the same strategy regarding cash flow.

這是關於現金流的相同策略。

We're just waiting for a better environment to be more aggressive in that market.

我們只是在等待一個更好的環境，以便在該市場更具侵略性。

And it's the same strategy for asset-based lending strategy to continue to grow those businesses and then, again, to Bruce's point earlier, to take advantage of the fact that we've now created in excess of $400 million of capacity for 30% assets to be able to become more acquisitive.

基於資產的貸款戰略與繼續發展這些業務的戰略相同，然後再一次，正如 Bruce 之前所說的那樣，利用我們現在已經為 30% 的資產創造了超過 4 億美元的能力這一事實能夠變得更加貪得無厭。

And just to clarify, the Solar first lien assets, as Michael mentioned, are stretch first lien, whereas Solar Senior is traditional lower leverage first lien, lower return.

需要澄清的是，正如邁克爾所提到的，Solar 優先留置權資產是延伸優先留置權，而 Solar Senior 是傳統的低杠桿優先留置權，回報率較低。

So they don't overlap that often.

所以它們不會經常重疊。

Very well.

很好。

One last question on the dividend, forgive me if you mentioned it.

關於股息的最後一個問題，如果你提到它，請原諒我。

It's -- you've been at $0.45 now, and it sounds like it's only getting better.

它是——你現在的價格是 0.45 美元，而且聽起來只會越來越好。

Surely don't expect it to get worse near term, so any outlook on another bump near term on the dividend?

當然不要指望它在短期內會變得更糟，那麼短期內股息再次上漲的前景如何？

Yes.

是的。

I think, as Michael mentioned in his closing remarks, we are, as you know, looking for sustainable earnings as we did this first quarter when we raised the dividend to the $0.41.

我認為，正如邁克爾在他的結束語中提到的那樣，正如你所知，我們正在尋找可持續的收益，就像我們在第一季度將股息提高到 0.41 美元時所做的那樣。

I think as we continue to drive sustainable earnings above the mid-40s, you should see us follow with a step-up in the dividend.

我認為，隨著我們繼續推動 40 多歲以上的可持續收益，您應該會看到我們緊隨其後增加股息。

So are you generally going to keep a large cushion?

那麼你通常會保留一個大墊子嗎？

Or are you going to raise it from $0.41 to the mid-40s?

或者你打算將它從 0.41 美元提高到 40 美元？

We're going to keep a cushion.

我們要保留緩衝。

We haven't decided how much, but there will be a cushion.

我們還沒有決定多少，但會有一個緩衝。

We want to make sure we have adequate dividend coverage, especially because there will be quarters where earnings may dip.

我們希望確保我們有足夠的股息覆蓋率，尤其是因為有些季度的收益可能會下降。

If we don't have -- we get consistent prepayment fees, but there could be quarters where we don't have any.

如果我們沒有——我們會得到一致的預付費用，但可能有幾個季度我們沒有。

And we want to be able to make sure we continue to out-earn our dividend.

我們希望能夠確保我們繼續賺取紅利。

(Operator Instructions) Our next question comes from Chris York of JMP Securities.

（操作員說明）我們的下一個問題來自 JMP 證券公司的 Chris York。

Just one follow-up.

只是一個跟進。

So in your strategic review, presumably consideration was given to the reduction in base management fees at other BDCs like Aries, TPG and maybe even Goldman.

因此，在您的戰略審查中，大概考慮了其他 BDC（如白羊座、TPG 甚至高盛）基本管理費的減少。

So I'm curious whether the conversation came up with the Board, whether it was prudent to further align the base management fee to maybe a 1.5% level now that the management fee benefits to shareholders from the off-balance sheet arrangement will be reduced.

因此，我很好奇董事會是否進行了對話，將基本管理費進一步調整至 1.5% 的水平是否謹慎，因為資產負債表外安排給股東帶來的管理費收益將會減少。

Yes, as you know, we just lowered our base management fee to 1.75% at the beginning of the year.

是的，如您所知，我們剛剛在年初將基本管理費降低至 1.75%。

So it was our intention to reflect a sharing and, hopefully, an increase in ROE for the shareholders were we to increase our leverage above 1:1.

因此，如果我們將槓桿率提高到 1:1 以上，我們打算反映分享，並希望增加股東的股本回報率。

And that was really the primary focus.

這才是真正的主要焦點。

There are no further questions at this time.

目前沒有其他問題。

I'd like to turn the call back over to Michael Gross, Chairman and Chief Executive Officer, for any closing remarks.

我想將電話轉回給董事長兼首席執行官邁克爾格羅斯，聽取任何結束語。

We thank you for all your time.

我們感謝你所有的時間。

If you have any follow-up questions, please feel free to follow up directly.

如果您有任何後續問題，請隨時直接跟進。

And for those who will be on our SUNS call, we'll talk to you in 20 minutes.

對於那些將參加我們 SUNS 電話會議的人，我們將在 20 分鐘後與您交談。

Ladies and gentlemen, thank you for participating in today's conference.

女士們，先生們，感謝你們參加今天的會議。

This does conclude the program, and you may all disconnect.

這確實結束了程序，你們都可以斷開連接。

Everyone, have a great day.

大家，祝你有美好的一天。