SLR Investment Corp (SLRC) 2023 Q2 法說會逐字稿

Good day, everyone, and welcome to today's SLR Investment Corporation Second Quarter Earnings Call. (Operator Instructions) Please note this call will be recorded. It is now my pleasure to turn today's call over to Mr. Michael Gross, Chairman and Co-Chief Executive Officer of SLR Investment Corp. Mr. Gross, you may begin the conference.

大家好，歡迎參加今天的 SLR Investment Corporation 第二季財報電話會議。 （操作員說明）請注意，此通話將會被錄音。現在我很高興將今天的電話轉給 SLR Investment Corp 董事長兼聯合執行長 Michael Gross 先生。Gross 先生，您可以開始會議了。

Thank you very much, and good morning. Welcome to SLR Investment Corp.'s earnings call for the second quarter ended June 30, 2023. I'm joined today by Bruce Spohler, our Co-Chief Executive Officer; and our Chief Financial Officer, Shiraz Kajee. Shiraz, before we begin, would you please start by covering the webcast and forward-looking statements.

非常感謝，早安。歡迎參加 SLR Investment Corp. 截至 2023 年 6 月 30 日的第二季財報電話會議。今天我們的聯合執行長 Bruce Spohler 也加入了我的行列。以及我們的財務長 Shiraz Kajee。設拉子，在我們開始之前，請您先介紹一下網路廣播和前瞻性陳述。

Thanks, Michael. Good morning, everyone. I would like to remind everyone that today's call and webcast are being recorded. Please note that they are the property of SLR Investment Corp. and that any unauthorized broadcast in any form are strictly prohibited. This conference call is also being webcast from the events founded in the Investors section on our website at www.slrinvestmentcorp.com.

謝謝，麥可。大家，早安。我想提醒大家，今天的電話和網路直播都是錄音的。請注意，它們是 SLR Investment Corp. 的財產，嚴禁以任何形式未經授權進行傳播。本次電話會議也透過我們網站 www.slrinvestmentcorp.com 投資者部分的活動進行網路直播。

Audio replays of this call will be made available later today as disclosed in our August 8 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 on today's conference call and webcast may constitute forward-looking statements which relate to the future events or future performance or financial condition.

正如我們 8 月 8 日的財報新聞稿中所披露的那樣，本次電話會議的音訊重播將於今天晚些時候提供。我還想提請您注意我們新聞稿中有關前瞻性資訊的慣例披露。今天的電話會議和網路廣播中的陳述可能構成與未來事件或未來業績或財務狀況相關的前瞻性陳述。

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

這些陳述並不是對我們未來業績、財務狀況或結果的保證，並且涉及許多風險和不確定性。過去的表現並不預示未來的結果。

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. SLR Investment Corp. does not undertake to update any forward-looking statements unless required to do so by both. To obtain copies of our latest SEC filings, please visit our website or call us at (212) 993-1670.

實際結果可能會因多種因素而產生重大差異，包括我們向 SEC 提交的文件中不時描述的因素。 SLR Investment Corp. 不承諾更新任何前瞻性聲明，除非雙方都要求這樣做。如需我們最新的 SEC 文件副本，請造訪我們的網站或致電 (212) 993-1670。

At this time, I would like to turn the call back over to our Chairman and Co-CEO, Michael Gross.

現在，我想將電話轉回給我們的董事長兼聯合首席執行官邁克爾·格羅斯。

Thank you, Shiraz. We are pleased to report that for the second quarter of 2023, SLRC generated net investment income of $0.42 per share, over-earning the quarterly distribution and continuing the steady growth in net investment income over the past several quarters as we rebuild the portfolio post our COVID area deleveraging and importantly, during a very attractive investment environment.

謝謝你，設拉子。我們很高興地報告，2023 年第二季度，SLRC 產生了每股 0.42 美元的淨投資收益，超出了季度分配，並在我們重建投資組合後繼續保持過去幾個季度淨投資收益的穩定增長。重要的是，新冠疫情導致去槓桿化，投資環境非常有吸引力。

The improved NII performance resulted from the combination of a larger portfolio and the increase in index rates for a predominantly floating rate portfolio. At June 30, our net asset value per share was $17.98, compared to $18.04 at March 31. Before digging into our performance, I'll touch on the market conditions and investment climate. As Federal Reserve has continued to fight to curb inflation, labor statistics and consumer spending have remained relatively stable. Based on both the recent economic data and our portfolio company success in navigating higher interest rates as well as input expenses, we view the recession as less inevitable.

NII 表現的改善得益於更大的投資組合和以浮動利率為主的投資組合指數利率的增加。截至 6 月 30 日，我們的每股淨值為 17.98 美元，而 3 月 31 日為 18.04 美元。在深入探討我們的業績之前，我先談談市場狀況和投資環境。由於聯準會繼續努力遏制通膨，勞動力統計和消費者支出保持相對穩定。根據最近的經濟數據以及我們的投資組合公司在提高利率和投入費用方面所取得的成功，我們認為經濟衰退不太不可避免。

As the full impact of hire rates reverb rates to the economy, we believe our defensively positioned portfolio should weather those conditions. As conservative credit investors, we have always managed our portfolio is that we are heading into a downturn, and we will continue to do so despite signs that the U.S. government's fiscal policy may result in a soft landing for this cycle.

由於僱用率的全面影響會對經濟產生影響，我們相信我們的防禦性投資組合應該能夠經得起這些條件。作為保守的信貸投資者，我們一直在管理我們的投資組合，因為我們正在走向低迷，儘管有跡象表明美國政府的財政政策可能會導致本週期的軟著陸，但我們將繼續這樣做。

The overall health of our portfolio remained solid, and we did not place any assets on non-accrual during the second quarter. Our weighted average interest coverage on our sponsor finance loans remains at comfortable levels at approximately 2x. We believe that this is a result of our investment focus in sponsor finance and recession-resilient industries with high recurring free cash flow, such as health care and business services as well as our emphasis on specialty finance investments with borrowing bases supporting our loans. Additionally, we are monitoring near-term maturities and have not identified any loans to the material risk of non-repayment.

我們投資組合的整體健康狀況依然穩健，第二季我們沒有將任何資產置於非應計項目上。我們對贊助商融資貸款的加權平均利息覆蓋率仍維持在約 2 倍的舒適水準。我們認為，這是因為我們的投資重​​點是贊助商融資和具有高經常性自由現金流的抗衰退行業，例如醫療保健和商業服務，以及我們重視以藉款基礎支持我們貸款的專業金融投資。此外，我們正在監控近期到期情況，尚未發現任何貸款有重大不償還風險。

At June 30, approximately 98% of our comprehensive investment portfolio was comprised of first lien senior secured loans. Our long-standing investment focus on first lien loans has resulted in a portfolio better equipped to withstand continued inflationary and interest rate pressures and portfolios with second lien loans or equity exposure.

截至 6 月 30 日，我們綜合投資組合的約 98% 由第一留置權優先擔保貸款組成。我們長期以來對第一留置權貸款的投資重點，使我們的投資組合能夠更好地承受持續的通膨和利率壓力，以及具有第二留置權貸款或股票曝險的投資組合。

Additionally, with 76% of our comprehensive investment portfolio invested in specialty finance assets, which are borrowing base is supporting and full covenant structures. We are defensively positioned should the (inaudible) Group unable to withstand the continued higher interest rate environment.

此外，我們綜合投資組合的 76% 投資於專業金融資產，這些資產的借貸基礎是支持性的、完整的契約結構。如果（聽不清楚）集團無法承受持續走高的利率環境，我們將採取防禦性立場。

Our unique investment approach of coupling cash flow loans of specialty finance loans provided with greater diversification and additional downside protection. Although direct lending new issue activity picked up in the second quarter, total new issuance volume remained lighter than prior years. Much of the second quarter activity was relating to add-on acquisition financings. We're beginning to see more M&A processes as a bid-ask spread for assets narrows. Additionally, access to the broadly syndicated loan market remains extremely limited for all but the largest and highest rated issuers in our market, and the retrenchment by regional banks continues to benefit our specialty finance strategies.

我們獨特的將現金流貸款與專業金融貸款相結合的投資方法提供了更大的多元化和額外的下行保護。儘管第二季直接貸款新發行活動有所回升，但新發行總量仍低於往年。第二季的大部分活動都與附加收購融資有關。隨著資產買賣價差的縮小，我們開始看到更多的併​​購流程。此外，除了我們市場上最大和最高評級的發行人之外，進入廣泛的銀團貸款市場的機會仍然極其有限，而且區域銀行的緊縮繼續有利於我們的專業融資策略。

In the second quarter, SLRC originated $394 million of new investments across the platform. With repayments of $265 million during the second quarter, we had net portfolio growth in each of our forward lending strategies totaling $129 million.

第二季度，SLRC 在整個平台上發起了 3.94 億美元的新投資。第二季還款額為 2.65 億美元，我們每項遠期貸款策略的投資組合淨成長總計 1.29 億美元。

Looking forward, the current investment environment remains as favorable as we've seen in several years. We currently have a sizable pipeline in which we believe will prove to be a strong vintage for private credit. Our specialty finance businesses are benefiting from the regional banking turmoil as these banks have historically competed with our commercial finance strategies.

展望未來，目前的投資環境仍與幾年前一樣有利。我們目前擁有相當大的管道，我們相信這將成為私人信貸的強勁時期。我們的專業金融業務正受益於區域銀行業的動盪，因為這些銀行歷來與我們的商業金融策略競爭。

Additionally, during uncertain economic times, borrowers increasingly turn to asset-based lending strategies for working capital and liquidity management. We believe the structure and collateral supporting our loans provides our investors with greater downside protection across economic cycles.

此外，在經濟不確定時期，借款人越來越多地轉向以資產為基礎的貸款策略來進行營運資金和流動性管理。我們相信，支持我們貸款的結構和抵押品為我們的投資者在整個經濟週期中提供了更大的下行保護。

Our ABL businesses have historically outperformed during challenging market conditions when asset-rich companies access to traditional lending sources is constrained, and we have the flexibility to allocate more of our capital to these strategies to take advantage of the attractive risk-reward attributes.

歷史上，當資產豐富的公司獲得傳統貸款來源受到限制時，我們的ABL 業務在充滿挑戰的市場條件下表現出色，而我們可以靈活地將更多資本分配給這些策略，以利用有吸引力的風險回報屬性。

Firms with significant available capital, such as the SLR Platform are able to fill the void left by regional banks retreat and installing of the syndicated loan markets. Borrowers value our speed and certainty of execution, flexibility and ability to invest $150 million to $200 million in a given upper middle market financing, which gives us greater pricing power and influence over turns. With $13 billion of total investable capital across the platform, inclusive of anticipated leverage, SLR has the scale necessary to provide full financial solutions, which benefits SLRC through co-investment.

擁有大量可用資本的公司（例如 SLR 平台）能夠填補區域銀行撤退和建立銀團貸款市場留下的空白。借款人看重我們的執行速度和確定性、靈活性以及在特定中高端市場融資中投資 1.5 億至 2 億美元的能力，這使我們擁有更大的定價能力和周轉影響力。 SLR 整個平台的可投資資本總額為 130 億美元（包括預期槓桿），擁有提供全面金融解決方案所需的規模，這透過共同投資使 SLRC 受益。

Importantly, we have ample dry powder to capitalize on this favorable investment environment. Our funding profile is in a strong position to weather a rising rate environment with our next fixed-rate maturity not until the end of 2024. Additionally, our senior unsecured fixed rate notes have a weighted average annual interest rate of 3.8%.

重要的是，我們有充足的乾粉來利用這個有利的投資環境。我們的資金狀況處於有利地位，能夠抵禦利率上升的環境，下一個固定利率到期日要到 2024 年底。此外，我們的優先無抵押固定利率票據的加權平均年利率為 3.8%。

With $1.2 billion of funded debt at June 30, our leverage was 1.23x net debt to equity. This point-in-time level of leverage doesn't fully reflect the ramp of the SSLP through loan asset contributions from our balance sheet. Since the end of the second quarter, we continue to make progress on ramping the SSLP. Based on transfers from SLRC's balance sheet during the third quarter to date, as well as new deal activity, we expect a substantially increased investment commitment in SSLP by the end of the third quarter.

截至 6 月 30 日，我們的融資債務為 12 億美元，我們的槓桿率為淨負債與股本的 1.23 倍。這一時間點的槓桿水準並不能完全反映透過資產負債表中的貸款資產貢獻來實現 SSLP 的成長。自第二季末以來，我們在 SSLP 提升方面繼續取得進展。根據迄今為止第三季 SLRC 資產負債表的轉帳以及新交易活動，我們預計到第三季末，SSLP 的投資承諾將大幅增加。

We believe we are on track to reach $250 million of commitments by the end of this year. As a result of our continued efforts to ramp the SSLP, we expect our leverage ratio to once again be in the middle of our target leverage range of 0.9x to 1.25x. At June 30, including available credit facility capacity as the SSLP and our specialty finance portfolio companies subject to borrowing base limits, SLRC had approximately $600 million in available capital to take advantage of the current attractive investment environment.

我們相信，到今年年底，我們預計將實現 2.5 億美元的承諾。由於我們不斷努力提高 SSLP，我們預計我們的槓桿率將再次處於 0.9 倍至 1.25 倍目標槓桿範圍的中間。截至 6 月 30 日，包括 SSLP 的可用信貸額度和受借款基礎限制的專業金融投資組合公司，SLRC 擁有約 6 億美元的可用資本，可以利用當前有吸引力的投資環境。

I'll now turn the call back over to Shiraz, our CFO, to take you through the second quarter financial highlights.

現在我將把電話轉回給我們的財務長 Shiraz，向您介紹第二季的財務亮點。

Thank you, Michael. SLR Investment Corp.'s net asset value at June 30, 2023, was $981 million or $17.98 per share compared to $984 million or $18.04 per share at March 31, 2023.

謝謝你，邁克爾。截至 2023 年 6 月 30 日，SLR Investment Corp. 的資產淨值為 9.81 億美元，即每股 17.98 美元，而截至 2023 年 3 月 31 日，資產淨值為 9.84 億美元，即每股 18.04 美元。

At quarter end, SLRC's on-balance sheet investment portfolio had a fair market value of approximately $2.2 billion in 156 portfolio companies across 45 industries compared to a fair market value of $2.1 billion and 145 portfolio companies across 45 industries at March 31.

截至季末，SLRC 的表內投資組合在45 個產業的156 家投資組合公司中的公平市值約為22 億美元，而截至3 月31 日，45 個產業的145 家投資組合公司的公平市值為21 億美元。

At June 30, the company had approximately $1.2 billion of debt outstanding with leverage of 1.23x net debt to equity. The increase in leverage is temporarily higher as the company continues to ramp its SSLP. When considering the company's plan to utilize the SSLP's facility as well as the available capacity from the company's credit facilities, together with available capital from the company's specialty finance subsidiaries, SLRC has ample available capital to fund future portfolio growth while remaining within its target leverage range of 0.9x to 1.25x net debt to equity.

截至 6 月 30 日，該公司的未償債務約為 12 億美元，槓桿率為淨負債股本的 1.23 倍。隨著公司持續提高 SSLP，槓桿率的增幅暫時較高。在考慮公司利用 SSLP 設施的計劃以及公司信貸設施的可用能力以及公司專業金融子公司的可用資本時，SLRC 擁有充足的可用資本來為未來投資組合增長提供資金，同時保持在其目標槓桿範圍內淨債務與權益比率為0.9 倍至1.25 倍。

Moving to the P&L. For the 3 months ended June 30, 2023, gross investment income totaled $56.3 million versus $53.5 million for the 3 months ended March 31, 2023. Net expenses totaled $33.7 million for the 3 months ended June 30. This compares to $31.4 million for the 3 months period March 31st. As a reminder, at the time of the merger of SLR's Senior Investment Corp or SUNS into the company last year, the investment adviser agreed to waive incentive fees resulting from income earned due to the accretion of purchase discounts allocated to investments acquired as part of the merger.

轉向損益表。截至2023 年6 月30 日的3 個月，總投資收入總計5,630 萬美元，而截至2023 年3 月31 日的3 個月為5,350 萬美元。截至6 月30 日的3 個月，淨支出總計3,370 萬美元。而截至6 月30 日的3 個月，淨支出總計3,140 萬美元。月期間 3 月 31 日。提醒一下，去年 SLR 的 Senior Investment Corp 或 SUNS 併入該公司時，投資顧問同意免除因分配給作為 SLR 一部分而收購的投資的購買折扣增加而賺取的收入所產生的獎勵費。合併。

During the quarter ended June 30, the company waived approximately $125,000 of merger-related incentive fees. Accordingly, the company's net investment income for the 3 months ended June 30 totaled $22.7 million or $0.42 per average share compared to $22.1 million or $0.41 per average share for the 3 months ended March 31.

在截至 6 月 30 日的季度中，該公司免除了約 125,000 美元的合併相關激勵費用。因此，截至6月30日的三個月，該公司的淨投資收益總計為2,270萬美元，即每股0.42美元，而截至3月31日的三個月為2,210萬美元，即每股0.41美元。

Below the line, the company had net realized and unrealized loss for the second quarter totaling $3.7 million versus a net realized and unrealized loss of $15.3 million for the first quarter of 2023. As a result, the company had a net increase in net assets resulting from operations of $19 million or $0.35 per average share for the 3 months ended June 30, 2023. This compares to a net increase of $6.8 million or $0.13 per average share for the 3 months ended March 31, 2023.

線下，該公司第二季度的已實現和未實現淨虧損總計 370 萬美元，而 2023 年第一季的已實現和未實現淨虧損為 1,530 萬美元。因此，該公司的淨資產淨增加截至2023 年6 月30 日止的3 個月，營業收入為1,900 萬美元，即每股增加0.35 美元。相較之下，截至2023 年3 月31 日止的3 個月，淨增加額為680 萬美元，即每股增加0.13 美元。

Finally, on August 8, the Board of SLRC declared a monthly distribution of $0.137 per share, payable on August 30, 2023, to holders of record as of August 18, 2023.

最後，SLRC 董事會於 8 月 8 日宣布每月分配每股 0.137 美元，將於 2023 年 8 月 30 日支付給截至 2023 年 8 月 18 日有記錄的持有人。

Moving forward, the company intends to make its distributions on a quarterly rather than a monthly basis. We expect this change to begin in Q4 2023.

展望未來，該公司打算按季度而不是按月分配。我們預計這項變更將於 2023 年第四季開始。

With that, I'll turn the call over to our co-CEO, Bruce Spohler.

接下來，我會將電話轉給我們的聯合執行長 Bruce Spohler。

Thank you, Shiraz. Let me begin by providing an overview of our portfolio. June 30, on a fair value basis, the comprehensive portfolio consisted of approximately $3.1 billion of senior secured loans to approximately 780 distinct borrowers across over 115 industries, with an average exposure of just under $4 million. Measured at fair value, 99.4% of our portfolio consisted of senior secured loans with approximately 98% invested in first lien loans, including investments in the SSLP attributable to the company and only 0.2% was invested in second lien cash flow loans, with the remaining 1.2% invested in second lien asset-based loans.

謝謝你，設拉子。首先讓我概述一下我們的產品組合。截至 6 月 30 日，以公允價值計算，綜合投資組合包括向超過 115 個行業的約 780 名不同借款人提供約 31 億美元的優先擔保貸款，平均風險敞口略低於 400 萬美元。以公允價值衡量，我們的投資組合的99.4% 由優先擔保貸款組成，其中約98% 投資於第一留置權貸款，包括對公司歸屬的SSLP 的投資，只有0.2% 投資於第二留置權現金流貸款，其餘1.2% 投資於第二留置權資產貸款。

Our specialty finance investments account for approximately 76% of the portfolio with the remaining 24% invested in senior secured cash flow loans to upper mid-market sponsor-backed companies. We believe that this defensive portfolio composition positions us well for potential economic weakness and provides a differentiated risk return profile for our shareholders.

我們的專業金融投資約佔投資組合的 76%，其餘 24% 投資於向中高端市場贊助商支持的公司提供優先擔保現金流貸款。我們相信，這種防禦性的投資組合使我們能夠很好地應對潛在的經濟疲軟，並為我們的股東提供差異化的風險回報。

At quarter end, our weighted average asset level yield was 12.1% up from 11.9% at Q1. The weighted average investment risk rating was under 2 based on our 1 to 4 risk rating scale, with 1 representing the least amount of risk. During the second quarter, we restructured our investment in Amerimark, which we had placed on non-accrual last quarter. While it's still early days, we are pleased with the results of our efforts thus far. To date, we foreclosed on the business, contributed transition capital, which has since been fully repaid at par, sold certain assets for cash entered into a partnership with both operating and financial investors in respect to the company's core operations and expect to exit bankruptcy later this month.

截至季末，我們的加權平均資產水準收益率為 12.1%，高於第一季的 11.9%。根據我們的 1 至 4 級風險評級，加權平均投資風險評級低於 2，其中 1 代表風險最小。第二季度，我們重組了對 Amerimark 的投資，上個季度我們將其投資為非應計項目。雖然現在還處於早期階段，但我們對迄今為止的努力結果感到滿意。迄今為止，我們取消了該業務的贖回權，貢獻了過渡資本（此後已按面值全額償還），出售了某些資產以換取現金，與營運和財務投資者就公司的核心業務建立了合作夥伴關係，並預計稍後退出破產保護這個月。

As a result, we increased our second quarter mark by 10% from the prior quarter. We view the successful restructuring of this investment as evidence of our team's long-standing private equity style approach to investing. It's in our team's DNA to approach a restructuring with an operational mindset using our expertise and experience to maximize our recovery.

因此，我們第二季的成績比上一季提高了 10%。我們認為此次投資的成功重組證明了我們團隊長期採用私募股權風格的投資方法。我們團隊的基因是利用我們的專業知識和經驗以營運思維進行重組，以最大限度地實現復甦。

Now let me turn to our 4 investment verticals. Sponsor finance or cash flow business. Here, we're originating first-lien senior secured loans to upper mid-market companies in non-cyclical industries, such as health care providers and diversified financials. Our historical focus on these sectors has helped to reduce the impact on the portfolio from rising input costs. As a result of the positive market dynamics Michael highlighted, we are continuing to see new issue yields of 12% to 13% in comparison to the recent historical range of 8% to 10%. Importantly, these investments are carrying less leverage than we had seen historically.

現在讓我談談我們的 4 個投資領域。贊助融資或現金流業務。在這裡，我們向非週期性行業的中高端市場公司（例如醫療保健提供者和多元化金融公司）發放第一留置權優先擔保貸款。我們歷史上對這些產業的關注有助於減少投入成本上升對投資組合的影響。由於邁克爾強調的積極的市場動態，我們繼續看到新發行債券的收益率達到 12% 至 13%，而近期的歷史範圍為 8% 至 10%。重要的是，這些投資的槓桿率比我們歷史上看到的要低。

Middle market loans continue to be priced at a premium to leverage loans with the added benefit of having these better structural protections and lower leverage levels. Our Q3 pipeline has an average yield of just under 13% and a loan-to-value of just under 40%, which supports our thesis that this year should be a great vintage for investing in sponsor finance cash flow upper mid-market loans.

中間市場貸款的定價繼續高於槓桿貸款，並具有更好的結構性保護和更低的槓桿水平的額外好處。我們第三季管道的平均收益率略低於 13%，貸款價值比略低於 40%，這支持了我們的論點，即今年應該是投資贊助商融資現金流中高端市場貸款的絕佳時機。

Given our current pipeline and reduced level of expected repayments, we expect continued portfolio growth during the remainder of this year. At quarter end, our cash flow portfolio was approximately $740 million or 24% of the total portfolio invested across 48 borrowers. We have defensively positioned this portfolio with borrowers that have an average EBITDA of over $140 million and low loan to values of approximately 40%.

鑑於我們目前的通路和預期還款水準的降低，我們預計今年剩餘時間內投資組合將持續成長。截至季末，我們的現金流量投資組合約為 7.4 億美元，佔 48 個借款人投資組合總額的 24%。我們將此投資組合防禦性地定位於平均 EBITDA 超過 1.4 億美元且貸款價值低至約 40% 的借款人。

Interest coverage ratios have come down from the high of 3x a few years ago but have leveled off at 2x. Our portfolio is comprised of businesses that perform essential services with either recurring or reoccurring revenues and have low capital intensity. Overall, the portfolio has exhibited solid credit metrics that have remained steady this year.

利息保障倍數已從幾年前的 3 倍高點回落，但已穩定在 2 倍。我們的投資組合由提供經常性或經常性收入的基本服務且資本密集度較低的企業組成。總體而言，該投資組合展示了今年保持穩定的可靠信用指標。

During the quarter, we originated $115 million of new loans and experienced repayments of $55 million. These investments were made on compelling terms. Our second quarter investments were focused on existing borrowers with over 85% of this capital committed to companies that we have exposure to and have exited strong operating performance.

本季度，我們發放了 1.15 億美元的新貸款，並償還了 5,500 萬美元。這些投資是按照令人信服的條件進行的。我們第二季的投資主要集中在現有借款人上，其中超過 85% 的資本致力於我們所接觸並已退出強勁營運績效的公司。

At quarter end, the weighted average cash flow yield was 11.6%. With approximately 98% of this portfolio invested in first lien loans, we believe our investments are well positioned to withstand liquidity pressures that borrowers may face.

季末加權平均現金流收益率為11.6%。該投資組合約 98% 投資於第一留置權貸款，我們相信我們的投資能夠很好地承受借款人可能面臨的流動性壓力。

Now let me turn to our ABL segment. Historically, the ABL segment has performed well during periods of market volatility and economic contraction such as today's environment. Bars, which are asset rich but have cash flows that are pressured by rising interest rates and slowing demand are forced to raise capital in the ABL market rather than the cash flow market. The rising rate environment and economic challenges have put pressure on these borrowers particularly those in more cyclical sectors, which has resulted in an increased opportunity set for our ABL teams. We're seeing increased deal volume that we believe will continue throughout this year.

現在讓我談談我們的 ABL 部分。從歷史上看，ABL 部門在市場波動和經濟收縮時期（例如當今的環境）表現良好。金條資產豐富，但現金流受到利率上升和需求放緩的壓力，被迫在 ABL 市場而不是現金流市場籌集資金。不斷上升的利率環境和經濟挑戰給這些借款人帶來了壓力，尤其是週期性產業的借款人，這為我們的 ABL 團隊帶來了更多的機會。我們看到交易量增加，我們相信這一趨勢將持續到今年。

With limited access to capital, as regional banks largely continue to sit on the sidelines, we expect the rate of repayments to slow, translating into additional portfolio growth. Our ABL team has been working to provide full solutions to potential borrowers, including working closely with our life science team. At quarter end, the senior secured ABL portfolio totaled just under $1 billion or 32% of our total portfolio and was invested across 165 issuers.

由於獲得資本的管道有限，而且地區銀行基本上仍處於觀望狀態，我們預計還款率將放緩，從而轉化為投資組合的額外增長。我們的 ABL 團隊一直致力於為潛在藉款人提供全面的解決方案，包括與我們的生命科學團隊密切合作。截至季末，優先擔保 ABL 投資組合總額略低於 10 億美元，占我們投資組合總額的 32%，投資於 165 個發行人。

The weighted average asset level yield was 14.6% compared to 13.6% in the first quarter, and our average loan to value was approximately 74%. For the second quarter, we originated $113 million of new investments and had repayments of just under $100 million.

加權平均資產水準收益率為 14.6%，而第一季為 13.6%，我們的平均貸款價值約為 74%。第二季度，我們發起了 1.13 億美元的新投資，並償還了近 1 億美元。

Now let me move to Equipment Finance. At quarter end, the portfolio totaled just under $1 billion, representing 32% of our total portfolio and was highly diversified, invested across 550 issuers. The credit profile of the portfolio is as strong as it's ever been. The weighted average asset level yield is 9.6%. During the second quarter, we originated $150 million of new assets and had repayments of just under $110 million. Our current investment pipeline in Equipment Finance has increased significantly over the past quarter.

現在讓我轉向設備財務。截至季末，投資組合總額接近 10 億美元，占我們投資組合總額的 32%，且高度多元化，投資於 550 個發行人。投資組合的信用狀況一如既往地強勁。加權平均資產水準收益率為9.6%。第二季度，我們創造了 1.5 億美元的新資產，並償還了近 1.1 億美元。我們目前在設備融資方面的投資管道在過去一個季度顯著增加。

Finally, let me turn to our Life Science segment. Activity has moderated in the wake of the SVB failure. Our Life Science team continues to be extremely selective as borrowers seek to increase leverage as an alternative to issuing more equity at this time where valuations have come down in the markets. However, due to our strong presence, we are still seeing attractive investment opportunities and attractive pricing. We anticipate that the opportunity set will continue to improve as we move through the second half of this year.

最後，讓我談談我們的生命科學部分。 SVB 故障後，經濟活動放緩。我們的生命科學團隊仍然非常挑剔，因為借款人尋求提高槓桿率，作為在市場估值下降的情況下發行更多股票的替代方案。然而，由於我們的強大影響力，我們仍然看到有吸引力的投資機會和有吸引力的價格。我們預計，隨著今年下半年的到來，機會將繼續改善。

At quarter end, our portfolio totaled $340 million across 15 borrowers. The substantial majority of the portfolio is invested in loans to borrowers that have over 12 months of cash runway. Life Science loans represent 11% of our portfolio and contributed just under 23% of our gross investment income for the quarter.

截至季末，我們的投資組合涵蓋 15 個借款人，總額達 3.4 億美元。投資組合的絕大多數投資於向擁有超過 12 個月現金跑道的借款人提供的貸款。生命科學貸款占我們投資組合的 11%，佔本季總投資收入的近 23%。

During the second quarter, the team committed to $20 million of new investments and had repayments of $2.7 million. We have just under $120 million of unfunded commitments, which may be drawn by borrowers based upon hitting important milestones, such as FDA approvals, revenue metrics, liquidity and other milestones. At quarter end, the weighted average yield on this portfolio was 13.2% compared to 12.8% in Q1. These yields exclude any success fees and warrants.

第二季度，該團隊承諾進行 2,000 萬美元的新投資，並償還 270 萬美元。我們有近 1.2 億美元的無資金承諾，借款人可以根據達到重要的里程碑（例如 FDA 批准、收入指標、流動性和其他里程碑）來提取這些資金。截至季末，該投資組合的加權平均收益率為 13.2%，而第一季為 12.8%。這些收益率不包括任何成功費用和認股權證。

In conclusion, all of our lending verticals inked a strong quarter on the origination front while maintaining consistent credit quality. Given our available capital and ability to provide a wide spectrum of debt financing solutions, we believe we are well positioned to take advantage of the attractive investment environment.

總之，我們所有的貸款垂直領域在發放方面都表現強勁，同時保持了一致的信貸品質。鑑於我們的可用資本和提供廣泛債務融資解決方案的能力，我們相信我們有能力利用有吸引力的投資環境。

Now let me turn the call back to Michael.

現在讓我把電話轉回給麥可。

Thank you, Bruce. In closing, we are pleased with our progress in re-ramping our portfolio since our COVID era lows into investments that have more attractive terms we've seen in many years. Our specialty plans businesses, which were particularly impacted by borrowers having access to government stimulus during the pandemic have either reached or near nearing pre-COVID portfolio balances.

謝謝你，布魯斯。最後，我們對自新冠疫情時代以來我們在重新調整投資組合方面取得的進展感到高興，這些投資是我們多年來見過的更具吸引力的投資條款。我們的專業計劃業務尤其受到大流行期間獲得政府刺激的借款人的影響，已經達到或接近新冠疫情前的投資組合平衡。

Importantly, the available capital across our platform provides us with the capacity for additional earnings growth. With our investment strategy is benefiting from the reduced competition from regional banks in the BSL market, we currently have a sizable investment pipeline. Importantly, we believe it's one of the most attractive we've ever had.

重要的是，我們平台上的可用資本為我們提供了額外收益成長的能力。我們的投資策略受惠於 BSL 市場區域銀行競爭的減少，因此我們目前擁有龐大的投資管道。重要的是，我們相信這是我們擁有過的最具吸引力的產品之一。

In closing, our investment advisers' alignment of interest with the company's shareholders continue to be one of our guiding principles. The SLR team owns over 8% of the company's stock including have a significant percentage of the annual incentive compensation invested in its stock. The team's investment alongside fellow SLRC shareholders demonstrates our confidence in the company's defensive portfolio, stable funding and favorable position.

最後，我們的投資顧問與公司股東的利益一致仍然是我們的指導原則之一。 SLR團隊擁有公司8%以上的股票，其中很大一部分年度激勵薪酬投資於其股票。該團隊與其他 SLRC 股東的投資表明我們對該公司的防禦性投資組合、穩定的資金和有利的地位充滿信心。

Thank you for your time today. Operator, will you please open up the line for questions.

感謝您今天抽出時間。接線員，請開通提問線路。

(Operator Instructions) And we'll take our first question from Sean-Paul Adams with Raymond James. Sean-Paul, your line is open. Please check your mute function.

（操作員說明）我們將回答 Sean-Paul Adams 和 Raymond James 提出的第一個問題。肖恩-保羅，您的線已接通。請檢查您的靜音功能。

I was hoping you guys were able to share some commentary on whether you plan to amend your credit facility to extend their maturities since both mature in 2026 and provide some insight whether the revolving period for the secured credit facilities are the same as maturity?

我希望你們能夠就你們是否計劃修改信貸安排以延長其到期日（自 2026 年到期以來）分享一些評論，並提供一些見解，以了解擔保信貸安排的循環期是否與到期日相同？

Yes. No, we have some time on our primary corporate revolver. I think that maturity, if I'm not mistaken, is in '25 in terms of the investing period. And then we have the smaller SUNS facility that came with the merger with SUNS, which matures next spring, and we're already in conversations to both upsize it and extend it.

是的。不，我們有一些時間來討論我們的主要公司左輪手槍。如果我沒記錯的話，我認為就投資期間而言，成熟期是在 25 年。然後我們有了與 SUNS 合併後的較小的 SUNS 設施，該設施將於明年春天成熟，我們已經在討論擴大和擴展它的規模。

Okay. Perfect. And as a follow-on, can you provide just any details on the impact of the bank -- banking market tightening?

好的。完美的。接下來，您能否提供有關銀行——銀行市場緊縮——影響的任何細節？

I'm sorry, can you just repeat in terms of specifically what you'd like us to address on that front?

抱歉，您能具體重複一下您希望我們在這方面解決的具體問題嗎？

Yes, yes, of course. And so, in regards to the -- like just generally the banking market tightening and just issuance and, I guess, general flows. Can you provide some just general targets for the next couple of quarters?

是的，是的，當然。因此，就銀行市場收緊和發行以及我猜的整體流動而言。您能否提供未來幾季的一些總體目標？

Sure. I would just say, high level, the cash flow market has been impacted by the tightening on the money center banks, who are the biggest players there, the BSL market is really only open for the largest of issuers. And so on the cash flow side, as you can see in our origination numbers year-to-date, we've seen great opportunity in the upper mid-market there.

當然。我只想說，現金流市場受到貨幣中心銀行緊縮政策的影響，貨幣中心銀行是最大的參與者，BSL 市場實際上只對最大的發行人開放。因此，在現金流方面，正如您在我們今年迄今為止的創始數據中看到的那樣，我們在中高端市場看到了巨大的機會。

I think, on the specialty finance businesses, they're most impacted and benefit from the tightening in the regional banks, whether it's equipment finance, all the way through ABL strategies into Life Sciences, where obviously, Silicon Valley and to some extent, Signature Bank were put on the sidelines. Those teams have we surface, but we'll see whether the banks that they landed at will actually put up the capital to support that sector.

我認為，在專業金融業務上，它們受到地區銀行緊縮政策的影響最大並從中受益，無論是設備融資，還是透過 ABL 策略進入生命科學領域，顯然，矽谷以及在某種程度上，Signature銀行則處於觀望狀態。這些團隊讓我們浮出水面，但我們會看看他們登陸的銀行是否真的會提供資金來支持這個行業。

So we have seen that dislocation create better opportunities for us, not so much in terms of the fundamentals, but as you know, the regional banks were relatively aggressive when they like investment opportunities relative to direct lenders such as ourselves. And so having more rationality in those sectors, I think, has led to higher-quality opportunities as well as better pricing. Too soon to know how long that will last, but it has definitely given us a better opportunity set.

因此，我們看到，錯位為我們創造了更好的機會，不是在基本面方面，而是如您所知，當區域銀行喜歡相對於我們這樣的直接貸款機構的投資機會時，它們相對激進。因此，我認為，這些領域更加理性可以帶來更高品質的機會和更好的定價。現在還不知道這種情況會持續多久，但它確實給了我們更好的機會。

(Operator Instructions) We will take our next question from Paul Johnson with KBW.

（操作員說明）我們將接受 KBW 的 Paul Johnson 提出的下一個問題。

On the equipment financing vertical, specifically the SLR equipment, formerly Nations Equipment Financing. This year, there's obviously been no return out of that investment. I know there was no dividend return on investment last year as well, either. Can you just remind us, I guess, how -- I guess, what you intend to do with the return from that investment? And if there's anything, I guess, that you say the portfolio seems to be performing quite well. So was there, I guess, anything that's lumpy in there on timing? Or is there anything pressuring the return at this moment? Just any kind of thoughts around that investment would be kind of helpful.

在設備融資垂直領域，特別是 SLR 設備，以前稱為 Nations Equipment Financing。今年，這項投資顯然沒有任何回報。我知道去年也沒有股息投資報酬。我想，您能否提醒我們，您打算如何利用該投資的回報？如果有什麼的話，我想，你說的投資組合似乎表現得相當不錯。我想，那麼在時間上有什麼不協調的地方嗎？還是此時有什麼因素會對回報造成壓力？圍繞這項投資的任何想法都會有所幫助。

Sure. So just as a reminder, that -- we have 2 equipment finance verticals. One is the Kingsbridge vertical that provides equipment finance for investment-grade borrowers and then there's the equipment finance vertical, formerly NEF, that is more focused on non-investment-grade borrowers. And that vertical, particularly has been repositioning itself particularly in this stage of the economic cycle to take less -- more focus on the fundamental credit of the borrower and a little bit less reliance purely on the liquidation value of the equipment. So it's a short way of saying we've been taking down the risk in that portfolio.

當然。提醒一下，我們有兩個設備融資垂直領域。一個是 Kingsbridge 垂直市場，為投資等級借款人提供設備融資，另一個是設備融資垂直市場（以前稱為 NEF），更專注於非投資等級借款人。尤其是在經濟週期的這個階段，這個垂直領域一直在重新定位，以減少更多關注借款人的基本信用，並減少純粹對設備清算價值的依賴。因此，這是我們一直在降低該投資組合風險的簡短說法。

Having said it has been growing. And just as a reminder, that portfolio is housed on balance sheet as well as in that subsidiary. So the expense of the team is in the subsidiary, but the majority of the assets are on balance sheet. So when we report, we report on a consolidated basis rather than just look at that legal subsidiary. So it has been generating nice income. We expect that to grow. But you need to look at it consolidated between the subsidiary as well as the assets on balance sheet.

話雖如此，它一直在增長。提醒一下，該投資組合既包含在資產負債表上，也包含在該子公司中。因此，團隊的費用在子公司中，但大部分資產都在資產負債表上。因此，當我們報告時，我們會在合併的基礎上進行報告，而不僅僅是查看該合法子公司。所以它一直在產生可觀的收入。我們預計這一數字將會成長。但您需要查看子公司之間的合併以及資產負債表上的資產。

Got it. That's pretty helpful. And then just kind of broadly, you guys had a lot of growth this quarter. It sounds like you're -- you like what you see in terms of coming up with the pipeline and expect growth this year. Leverage is up to about 1.2x on a gross basis this quarter. However, the ROE is obviously clearly lagged the space quite a bit to date. I'm just wondering what are kind of in your mind, the catalyst to get that ROE up maybe increase your return from some of your verticals? Is there any sort of repricing catalyst within the portfolio somewhere -- your ideas there would also be helpful.

知道了。這很有幫助。從廣義上講，你們本季取得了很大的成長。聽起來你很喜歡你所看到的管道，並預計今年會出現成長。本季總槓桿率高達約 1.2 倍。然而，迄今為止，ROE 顯然明顯滯後於空間相當多。我只是想知道你的想法是什麼，提高股本回報率的催化劑可能會增加你從某些垂直領域的回報？投資組合中的某個地方是否存在某種重新定價催化劑——您的想法也會有所幫助。

Sure. There are several levers we can pull in our point to accomplish that across our strategies. The first, as we mentioned, our leverage we quoted was at a point in time with the actions we have in place to put more assets into the SSLP that will bring our leverage back down to kind of the midpoint of the range. It will also have the effect of increasing our ROE because we're putting assets into that levered 2x just as a refresh.

當然。我們可以透過多種手段來實現我們的戰略目標。首先，正如我們所提到的，我們所引用的槓桿率是在我們採取行動將更多資產投入 SSLP 的某個時間點上的，這將使我們的槓桿率回落至該範圍的中點。它還將具有增加我們的 ROE 的效果，因為我們將資產投入槓桿 2 倍，就像刷新一樣。

We've been selling assets into that with our JV partner at par, and these are assets yielding L plus 550. So we're able to take that capital, we get back from those sales and redeploy it into assets that are yielding anywhere from 12% to 15%, depending on the strategy.

我們一直在與我們的合資夥伴以面值出售資產，這些資產的收益率為L+550。因此，我們能夠利用這些資本，從這些銷售中收回資金，並將其重新部署到收益率為550 的資產中。12% 到 15%，取決於策略。

Got it. That's all the questions for me.

知道了。這就是我要問的所有問題。

We'll take our next question from Casey Alexander with Compass Point.

我們將接受來自 Compass Point 的 Casey Alexander 的下一個問題。

Can you quantify the capacity that the JV has in terms of how much can you sell down to the JV that then you can replace on balance sheet?

您能否量化合資企業的產能，也就是您可以向合資企業出售多少資金，然後在資產負債表上進行替換？

Sure. So Casey, at June 30, we had about $79 million down in the slip and it's been set up to take $300 million of assets. So roughly another $220 million of assets.

當然。因此，凱西，截至 6 月 30 日，我們的單據中預付了約 7,900 萬美元，並且已準備好收取 3 億美元的資產。大約還有 2.2 億美元的資產。

Okay. That's helpful. My second question is -- and this may be an entirely ignore question. But it seems to me that one of the assets that the JV was designed to take was some of the lower-yielding assets from Solar Senior. But it seems to me that the assets from Solar Senior are now yielding more than the average yield on the equipment finance portfolio. Is there anything that prevents you from downstreaming some of the equipment finance loans so that you can replace those with significantly higher yielding assets on balance sheet?

好的。這很有幫助。我的第二個問題是──這可能是個完全被忽視的問題。但在我看來，合資企業旨在收購的資產之一是 Solar Senior 的一些低收益資產。但在我看來，Solar Senior 的資產現在的收益率高於設備融資投資組合的平均收益率。是否有任何因素阻止您將部分設備融資貸款下游化，以便您可以用資產負債表上收益率明顯更高的資產來替換那些貸款？

Great question. The JV is set up both from an equity partnership perspective as well as the credit facility to only take cash flow loans. So to your point, it was set up to take the lower-yielding SUNS cash flow loans, which, as Michael just shared, are in the L5 handle spread at par versus the new cash flow loans, which are coming at SOFR 650 at 97. So there is a nice yield delta there. But no, I think on the Equipment Finance business, as you know, those are fixed-rate assets. They do have a longer life, but they do amortize down monthly. And so we are looking to continue to cycle out of those assets and bring on higher-yielding equipment finance assets or not. If we are seeing better opportunities elsewhere, we'll deploy the capital into higher-yielding strategies.

很好的問題。該合資企業是從股權合夥的角度以及僅接受現金流貸款的信貸安排的角度設立的。因此，就您而言，它的設立是為了接受收益較低的SUNS 現金流貸款，正如邁克爾剛剛分享的那樣，這些貸款與新的現金流貸款按面值計算在L5 處理利差中，而新的現金流貸款的SOFR 650 為97 .所以那裡有一個不錯的收益率增量。但不，我認為在設備融資業務上，如你所知，這些是固定利率資產。它們的壽命確實更長，但它們確實每月攤提。因此，我們希望繼續淘汰這些資產，並引入更高收益的設備融資資產。如果我們在其他地方看到更好的機會，我們會將資金部署到收益更高的策略中。

Okay. We'll see what happens when you give an analyst a calculator, he'll start trying to get you to do things you're not allowing to.

好的。我們會看看當你給分析師一個計算器時會發生什麼，他會開始試圖讓你做你不被允許做的事情。

We like your idea.

我們喜歡你的想法。

We're going to take the calculator away from you.

我們要把計算器從你身邊拿走。

(Operator Instructions) And it does appear that we have no further questions at this time. I'll turn the call back to Mr. Gross for closing remarks.

（操作員說明）目前看來我們沒有其他問題了。我會將電話轉回給格羅斯先生，讓其結束語。

Just thank you for your time, and have a great summer. And again, as always, if you have any questions, please feel free to reach out to any of us directly. Take care.

感謝您抽出寶貴時間，祝您夏天愉快。像往常一樣，如果您有任何疑問，請隨時直接與我們任何人聯繫。小心。

Thank you. And this does conclude today's program. Thank you for your participation. You may disconnect at any time.

謝謝。今天的節目到此結束。感謝您的參與。您可以隨時斷開連線。