Trinity Capital Inc (TRIN) 2026 Q3 法說會逐字稿

Good morning, everyone. My name is Beau, and I will be your conference operator today. At this time, I would like to welcome everyone to Trinity Capital's third-quarter 2026 earnings conference call, which is being held on November 4, 2026. (Operator Instructions)

It is now my pleasure to turn the call over to Trinity Capital's Head of Investor Relations, Mr. Ben Malcolmson. Please go ahead, sir.

Thank you and welcome to Trinity Capital's third-quarter 2026 earnings conference call. Speaking on today's call are Kyle Brown, Chief Executive Officer; Sarah Stanton, General Counsel and Chief Compliance Officer; Michael Testa, Chief Financial Officer; and Jerry Harder, Chief Operating Officer.

Also, joining us for the Q&A portion of the call is Ron Kundich, Chief Credit Officer.

Earlier today, we released our third quarter 2026 financial results, which are available on our website at ir.trinitycapital.com. As a reminder, certain statements on this call may be considered forward-looking under federal securities laws. For a full discussion of the risks and uncertainties related to these statements, please refer to our most recent SEC filings.

With that, allow me to turn the call over to Trinity Capital CEO, Kyle Brown.

Thanks, Ben. Trinity Capital had a strong quarter across the board and TRIN's stock year-to-date total return of 31% remains first in the BDC space as of the end of Q3.

We believe three key aspects are driving that: a diversified lending enterprise with five verticals spread across 24 industries; a growing managed funds platform which generated $0.05 per share of NII benefit in Q3; and an internally managed structure that keeps our interests aligned with our investors.

Let's start off with some shareholder-friendly news for Q3. As of September 30, TRIN's total shareholder return is the best in the BDC space over the past one, three, and five years. From our IPO in 2021 to the end of Q3, TRIN's stock has produced a total return of 177%, outperforming the S&P 500's 119% and the S&P BDC Index's 61% over the same time period.

We're paying a $0.17 monthly dividend through the end of Q4 and TRIN shareholders have now been the recipients of consistent distribution for seven consecutive years.

Looking forward, we have more positions in 128 portfolio companies, which have the potential to provide incremental upside to our shareholders.

Here are some highlights from TRIN's performance during the third quarter. Net investment income increased to $0.52 per share and exceeded our $0.51 distribution during the quarter, driven in part by our best-in-class ROE of 15.5%. Our credit remained strong with non-accruals improving to 0.7% of the portfolio at fair market value.

Our net asset value grew 5% quarter over quarter and 33% year over year to a record $1.3 billion. Also, NAV per share increased 1% from $13.47 to $13.61 quarter over quarter. It was a quarter defined by outperformance across NAV, originations, and credit quality.

Platform AUM increased to $3.4 billion, up 31% year over year, as we continue to grow thoughtfully and strategically. We funded $614 million in Q3, and our pipeline is thriving, with $880 million of new commitments in Q3 and $1.4 billion in total unfunded commitments as of September 30.

As a point of emphasis, 91% of our unfunded commitments remain subject to ongoing diligence and investment committee approval with just 9% unconditional, a structure that preserves underwriting discipline for future deployments.

Our originations activity is only possible because of our strong underwriting culture, both leading and lagging indicators of credit are positive, including sub 1% non-accruals, improved watch list movement, and best-in-class PIK of 1%.

Driven by an experienced team and proprietary pipeline, our consistency in originations and underwriting reflect a strong performance across Trinity's five lending verticals: Tech Lending, Equipment Finance, Healthcare and Life Sciences, Sponsor Finance, and ABL.

Our five verticals provide meaningful diversification while keeping us directly within our core competencies. Each vertical is staffed by world-class originators, underwriters, and portfolio managers, creating a scalable model that drives results without sacrificing focus.

For example, our Tech Lending vertical is one of the top most two active players in the venture debt space, while our Equipment Finance unit has deployed more than $1.7 billion in its history and currently has a portfolio approaching $600 million.

And as a direct lender, we originate our own deals with an agent on almost all deals and have immaterial overlap with other BDCs, giving our investors access to a genuinely differentiated portfolio.

Our goal since day one hasn't changed: out-earn the dividend, grow the business, and do it the right way. That means owning our own pipeline, underwriting our own deals to our standards, and making decisions as one aligned team.

That alignment starts with structure. As an internally managed BDC, there's no external manager collecting fees. Our employees, management, and Board, we all own the same shares. We operate like shareholders because we are shareholders.

Insiders own approximately 5% of TRIN's shares as of the end of Q3, so our commitment to consistent dividends and long-term value creation is more than just a talking point; it's a reality. And the fees generated through our managed funds flow back to the public BDC, creating incremental income that benefits shareholders directly rather than flowing to a third-party.

What we're building is a platform with unique diversification, growing scale, and a managed funds business that's delivering meaningful income above our loans. This architecture is the product of a consistent, strategic decisions made quarter over quarter, year after year.

Q3 proved, once again, that the model is working. Our pipeline is active, underwriting discipline is strong, and our capitalization strategy has been constructed to grow earnings power overtime. Trinity is built for now and for what's next.

From here, General Counsel, Sarah Stanton, who spearheads our corporate development efforts, will walk through updates on our managed funds platform. Sarah?

Thank you, Kyle. Our managed funds and joint ventures continue to scale meaningfully with nearly $1 billion of capacity across these strategies. The managed funds platform contributed $0.05 per share of NII benefit in Q3, enhancing returns for TRIN beyond the income generated by our BDC portfolio.

We'd like to highlight two recent developments in our managed funds platform. First, our SBIC fund has now closed more than $75 million in equity commitments and is already being deployed. At a 2-to-1 debt-to-equity ratio with low cost leverage from the federal government, the SBIC fund is expected to create more than $300 million of incremental platform capacity at full scale.

Meanwhile, we recently closed a second JV with Capital Southwest. This latest JV serves as a co-investment vehicle for deals in our Sponsor Finance vertical and has a potential total capacity of $500 million.

We believe this new joint venture provides an optimal capitalization strategy for these assets and is consistent with our previously discussed plans to use our managed funds platform to maximize capital efficiency for each of our five verticals.

This new JV is in addition to the first joint venture we announced with Capital Southwest earlier this year, which, as of the end of Q3, comprises $132 million of assets and 14 portfolio companies.

A co-investment vehicle focusing on first-out senior secured loans in the lower middle market, this strategic partnership has allowed us to diversify into a complementary segment of the lower middle market with a proven partner while minimizing risk and providing stable income for our investors.

As a reminder, it features 50/50 decision-making. We are encouraged by our growing partnership with a highly respected firm like Capital Southwest.

The managed funds platform is doing exactly what it was designed to do: generate incremental returns beyond our interest income, increase our originations capacity, and widen our pool of available capital, all without diluting shareholders.

The foundation is in place and we expect this platform to become an increasingly meaningful contributor to earnings overtime.

With that, I'll pass it off to CFO, Michael Testa, for a closer look at our financial results. Michael?

Thanks, Sarah. Our financial performance remained steady and strong in Q3. We generated $98 million in total investment income, a 30% year-over-year increase, and $50 million in net investment income, or $0.52 per share, representing 103% coverage of our quarterly distribution.

Total net assets grew 5% to a record $1.3 billion, up 33% year over year. NAV per share increased $0.14 to $13.61, driven primarily by accretive ATM issuances.

On the capital markets front, we continue to strengthen our balance sheet. We repaid $125 million of unsecured notes that matured in August, and on the last day of the quarter, we announced our second investment grade public fund offering of $350 million of long five-year senior unsecured notes, which closed post quarter end, though offering extends our maturity profile, increases our liquidity.

We also raised $58 million through our equity ATM at an average 32% premium to NAV, which is directly accretive to our existing shareholders.

Net leverage was 1.17 times at quarter end, consistent with our target range and total platform liquidity stands at $847 million.

And lastly, a few other metrics worth highlighting. Estimated undistributed taxable income stands at approximately $67 million or $0.69 per share, equivalent to more than four months of distributions.

Our 15.5% return on average equity and 15.2% effective portfolio yield are among the highest in the BDC sector, and PIK remains immaterial at 1% of income.

As we finish out the year and look toward 2027, we're confident in the earnings power of the platform and our ability to generate an industry-leading return on equity.

And now our COO, Jerry Harder, will walk you through our portfolio performance from here. Jerry?

Thank you, Michael. Portfolio quality stayed strong in Q3 with 99.3% of debt investments at fair value performing and our average internal credit rating improving slightly to 3.1 on our 1 to 5 scale.

The number of companies on non-accrual decreased to three with realizations of two small non-accruals and no additional credits added to non-accrual within the quarter.

First lien coverage remained strong with 89% of total principal secured by first position liens on enterprise value, equipment, or both. For enterprise-backed loans, the weighted average loan to value was 22%.

Our portfolio spans 24 industries and no single borrower exceeds 3% of total exposure. Our largest sector concentration, financial technology, represents 15% of our total portfolio at cost and is spread across 18 borrowers.

Regarding our AI exposure, it is diversified across both infrastructure and automation platforms, with each classification comprising less than 7% of our portfolio at cost.

Q3 included $7.5 million of net realized losses, partially offset by $4.4 million of net unrealized appreciation. Asset valuations are set by our internal valuations team, corroborated by independent third-party valuation firms, reviewed by our auditors, and approved by our Board of Directors, a multi-layered process designed to give investors confidence in the marks on our balance sheet.

Overall, we're encouraged by our portfolio turnover as our loan book continues to refresh in a beneficial way. 78% of the portfolio at cost has been originated since the start of 2025, with pre-2024 vintages now below 7%. And the average duration of our realized loans currently stands at 30 months.

Q3 fundings broke down across our five verticals as follows: 26% to Equipment Finance; 18% to Tech Lending; 17% to Sponsor Finance; 15% to Healthcare and Life Sciences; and 14% to Asset-Based Lending, with the remaining 10% invested in off-balance sheet entities.

At 89% first lien and 22% loan to value, the portfolio is built to hold up across cycles, which supports our dividend and NAV stability as we close out 2026 and look toward 2027.

With that, we'll open the line for questions. Operator, please go ahead.

(Operator Instructions) Mickey Schleien, Clear Street.

Yes. Good morning, everyone. I wanted to start with a question about the new JV with Capital Southwest- Desert Star. Could you expand on the type of investments you're putting in that JV versus Cap-TRIN?

Hi, Mickey. This is Sarah. Thanks for the question. Yeah. Happy to expand on that. So the first JV that we closed with Capital Southwest, that relates to first out senior secured loans that primarily Capital Southwest is originating. So that was a strategic and risk mitigated way for us to expand our reach into a segment of the lower middle market that we were not currently active in.

Our latest joint venture with Capital Southwest relates to deals in our Sponsor Finance vertical. So those are our more mature EBITDA-positive borrowers. And the real purpose of launching that joint venture is really just to get a better cost of capital for those assets.

We have a credit facility for that entity that is really optimized for those types of credits, which are, again, more mature, very creditworthy borrowers.

Are those borrowers concentrated in any particular sectors?

Those are primarily going to be lower middle market, fully integrated software companies. We'll see some service-oriented as well, but the focus for us are going to be the more mature software companies, senior secured facilities.

And so when you underwrite those, given everything that's been discussed about AI over the last few quarters and your target of the lower middle market, how do you approach underwriting for those companies? I mean, they clearly need to have some very meaningful competitive advantage for you to even consider them, I would assume. But what else are you looking for in those issuers before you dive in?

Yeah. I mean, we launched that business with all these things in mind. We don't carry some long legacy portfolio of software deals from 5, 10 years ago. These are mostly newly established facilities.

With that underwriting in mind, meaning what AI tools have they either developed or developing with the road map, what traction have they had selling those products, and so that goes into our underwriting and what we have been looking for are really mature software companies that are highly integrated within an organization that are not easy to rip out or can't rip out, who are selling and using these tools already.

And so our portfolio was really built with that whole concept in mind, meaning they're going to be winners and losers, let's identify who the winners are and let's use this period of volatility here to get in and really lock down some great credits.

And one more note on the JV is that's also co-investing, right? So these are investments, Desert Star, I mean. These are assets originated by TRIN, portions are held on the TRIN balance sheet, but also syndicated to Desert Star.

Understand. And just one follow-up question. From the analyst chair, it's hard to forecast the allocated expenses to the RIA, which they more than doubled $2 million, but platform AUM clearly didn't double it grew from $3.2 billion to $3.4 billion.

How should we think about the trend and the allocation of expenses to the RIA over the coming quarter as these managed fund businesses and joint ventures continue to grow?

Yeah. It should be actually pro rata based on the size and growth of the managed funds business. So this quarter, we did launch a Desert Star JV. There was a seed portfolio that we syndicated down there, $130 million. So that in and of itself grew the managed fund platform in a one-time launch. Overall, like syndications, those vehicles that are co-investing. It's anywhere from 15% to 20% to 30% of our deals that are funded in the quarter are going to be syndicated to those vehicles.

So is $2 million a decent run rate assumption for the next few quarters?

To the extent that there's no new vehicles, we're obviously continuously focusing on capital raising in the private and the managed funds businesses. But to the extent that those are just continue to scale evenly, periodically, you'll see those that pro rata allocation to be consistent.

I understand. Those are all my questions this morning. Thank you for your time.

Thanks, Mickey.

Paul Johnson, KBW.

Yeah. I just had a few questions. In terms of like repayment activity this quarter, higher level of repayments, just to ask, was that surprising or expected by you, guys? And is there anything, I guess, that you would see on your radar for that to potentially elevated into next year?

Hey, Paul. It's Kyle. Those repayments are consistent, but they ebb and flow. And so, we saw a little bit more last quarter. I don't believe that's any trend that we can point to going forward. It's going to continue to ebb and flow. It will be consistent every quarter. Just a little bit more Life Science and Tech, but it will just continue to be steady as it's always been, no trends to point to.

Thanks. And my next question is more of a higher level question, but as the origination funnel has expanded quite a bit over the years and the lending verticals have evolved as well, I mean, you now have conceivably an overlaying like allocation decision on top of just the individual credit reviews within your business.

With all the vehicles managed underneath the advisor and conceivably just the higher volume of deals, I would think that you would have to review. So I guess I'm wondering how has or how would you expect the investment committee or anything with the review process, I guess, to change overtime to reflect that?

Yeah. I mean, it's actually a little more simple than it sounds, but we've got five different businesses that all operate independent of one another. They're executing on an annual operating plan, meaning October of last year, November of last year, we sat down, we said what are we going to achieve in 2026 and how much are we going to deploy and when, over what period of time.

And those various teams are just executing exactly to that plan. And for the last three years, we've actually hit that plan pretty much right on the head or exceeded it. And so allocation to capital is really decided a year in advance. So everything we're doing right now, the dollars we're deploying and the capital that we're raising, both on and off balance sheet, it's all per plan.

And I would tell you that internally, we already have 2027 figured out and we have a plan for '28 and '29 and maybe some of that is going to be we're going to continue to iterate on it, but we are creating goals and we have a vision for the future and then we just execute on the plan and we build a system around it and we let that system carry the burden and we execute.

And so that's -- I mean, that's what we have been doing for years now. It isn't going to change going forward. We've created multiple layers of personnel and very senior personnel within each vertical from an underwriting perspective and portfolio management perspective, so that has to go through many filters before it gets to the eventual investment committee.

And so we have those buy boxes set, we have those underwriting standards and principles set, all the work is done, and then presented to the investment committee in a very clear, concise, and consistent manner. So we're good at building plans and executing them. That's what we're going to keep doing.

Appreciate it. Thanks for that, Kyle. That's all for me.

Thanks, Paul.

Erik Zwick, Lucid Capital Markets.

Thanks. Hello. Good day, everyone. Maybe just a quick follow-up on that the pipeline since we are just discussing that. In terms of you had two really strong quarters in a row of production, so just curious where the pipeline stands today versus say 90 days ago and what does the mix look like from a vertical perspective?

We continue to see -- thanks, Eric, this is Kyle. The pipeline has continued to build. We have, I would tell you, the largest pipeline that we've had in our history right now. And we're executing on those term sheets. We continue to push on pricing. We continue to see more and more equipment and manufacturing here domestically.

And with some of the AI boom going on, I continue to see Equipment being a bit of an outlier. But as you can see, last quarter was pretty distributed amongst the verticals. And I guess I'd go back to the previous comment, which is each of our verticals has an annual operating plan that they're executing to, and they have an allocation of capital to go out and deploy capital and execute on that plan, and that's what they're doing.

So that's how we think about it. There's going to continue to be some outperform on the Equipment side, but more or less we're just executing on that plan, which is starting to look more and more diversified across the verticals.

I would say, also, you can get a glimpse of that from the unfunded commitments, which we always remind our investors, these are subject to our investment committee approval nine-tenths of the time, right, but about one-third of that is within Healthcare and Life Sciences, about one-quarter of it in Equipment, and about 20% in Tech Lending, with ABL and Sponsor making up the rest. So that's a good proxy for the pipeline because those are deals that we've already won term sheets and these are subsequent tranches.

That's very helpful. Thanks. Next question, maybe for Michael, just looking at the income statement, there was a noticeable quarter-over-quarter increase in the non-control, non-affiliate fee income line. I guess anything in particular that drove that number higher and is that a one-time increase or non-recurring or would you expect some of that strength to continue?

Yeah. I mean, I think this quarter you saw a fee income increase. I think there hasn't been a whole lot of change between non-control and affiliate in our portfolio, but this quarter, we did see a spike of fee income, a combination of prepayment, exit fees, as well as origination fees, agent fees that we get that are somewhat transactional based.

Okay. And I guess were those transaction fees more on new origination activity or repayments? Just trying to figure out, I guess, you're obviously originating more, so you may see more of those on the front end, so just trying to understand how much of the increase we saw is sustainable in future quarters?

Yeah. I mean, a lot of this is driven from our Equipment Financing vertical. So we get anywhere from 2% to 3% closing structuring fees on those assets. So if you have a portfolio that continues to grow and has more origination activity, you'll see the benefit there.

This quarter, again, like Kyle mentioned, prepayment fees came through. Those were split between Tech and Life Sciences, but it's been elevated. Those continue that -- we saw that last quarter, we saw that in the previous quarter. So we can continue to see that as these companies are healthy. They're meeting their milestones. It's a combination of M&A activity, refinancing us out with cheaper debt, but continuing to grow.

Thank you. And last one for me, just looking at the pace of ATM share issuance in 3Q, it was lower than it had been in the past maybe four or five quarters. Any particular reason that it was lower in 3Q and what should we expect for your desire to utilize the ATM going forward?

Yeah. I mean, we love the ATM program. It's an efficient, optimal way of raising capital. When just in time, as we see deployments and the pipeline grow, we were able to manage the ATM program effectively to meet those funding requirements, but we had higher repayments and higher syndications, so we're able to manage the amount of equity, new equity we raise. At the end of the day, we're constantly looking at raising capital if it's accretive to net investment income or on a NAV basis.

Thank you for taking my questions today.

Thanks, Erik.

Jason Stewart, Compass Point.

Hi. Thanks. You guys have been pretty thoughtful about your approach to the infrastructure, equipment, GPU, compute finance space. Wondering if you could share some high-level thoughts on the election impact and maybe any change in the near-term landscape to that business and how your position vis-a-vis that change? Thanks.

Yeah. I mean, I think, first and foremost, when you remove some uncertainty, that typically helps or hurts markets, but at least that clarity gives investors the ability to make the decisions based on what they think they know, right? So I'd say, first and foremost, that's probably a good thing because we at least have an understanding as to where different politicians sit on the topic.

The business that we've done to date, assuming it is more difficult to get data centers up and going and GPUs deployed, will just simply benefit, I think, from some of that volatility. So if I'm taking the optimistic standpoint, what we've done so far is now a little bit more valuable than it was before.

And if it is more difficult to get GPUs online and data centers across the country, that cost of those units is going to go up. And so, I think for what we've done already, it means it's a positive impact to us. What we do going forward, I think we'll do what we always do, which is sit back, make sure we understand the playing field, understand the new risks, see if it's changed, and then start to step into the opportunity if it makes sense to. So I think that's how I see it.

Yeah. It strikes me as creative financing solutions will still be a necessary part of the puzzle. So thank you, Kyle, for that color. Thanks.

Yeah.

Chris Muller, Citizens Capital Markets.

Hey, guys. Thanks for taking my questions. So I guess looking at your five verticals and the prospects for higher rates, is there a particular area that you guys expect to outperform in a rising rate environment that you might lean in on a little more if the forward curve is realized?

Yeah. I mean, it's a great question. I think we're already leaning into that lower middle market space. We have been now for a couple of years. With a lot of private credit moving upstream, focusing on middle and upper middle markets, higher rates mean better returns there.

But I would say that all of them are really going to benefit. I mean, we provide this analysis to shareholders, which really shows pretty limited impact to trend on rates going down. But with rates going up, that really increases our income because our facilities, the majority of them, they have floors, which is great if rates are going down, but they don't have ceilings.

And so that can drive new payoffs, right, like we saw before when rates went up, which can increase fee income, or that can just create more and higher current income as well. So I think we set the portfolio up to do really well in a rate declining environment, knowing that if rates went up, we happen to benefit from that. So feel pretty good about our position relative to rates and rate sensitivity.

Got it. And rising rates are an obvious tailwind for the bottom line, but maybe thinking about some secondary effects, do you guys expect your fundraising efforts to also benefit from improving sentiment?

Yeah, man, that's a good question. Fundraising is always hard. I think that our track record and consistency in a raising rate environment, a declining rate environment, five different administrations, all of that has been very consistent. And when we're talking to investors, that's really what we're pointing to is our consistency throughout different markets, our ability to gauge what's going on, understand the new risks, pivot.

We like to say we're scrappy around here. I know Jerry hates that word.

None of us like it.

But we are. And so, we're going to assess what's going on. We're going to assess where the new maybe veins or pockets of investment and opportunities are. And then, we're not going to be afraid to jump in there and figure it out. So fundraising is going well. It's always hard, but I would say it's going really well and it's a big part of our future, providing liquidity through our managed funds business, which gives TRIN unlimited upside to our stock, earnings per share, NAV, et cetera.

So we're really going to focus on building out our verticals and making sure they're best-in-class. And then, we're going to align that with capital through our managed funds business to make sure that we have the liquidity necessary to keep building those businesses.

Got it. It's very helpful. Appreciate you guys taking the questions today.

You're welcome, Chris.

Christopher Nolan, Ladenburg Thalmann.

Sarah, what's going to be the leverage level for this new JV once it's fully deployed?

Leverage level for the new JV? What's it at right now, Mike?

Yeah. Right now, it's close to 1-to-1. It's going to be consistent with the BDC, slightly higher, trying to get up to 2-to-1. So moderate leverage, but it's optimal, right? You're setting it up a separate vehicle that has the structure of the online secured facility aligned to those assets. So it's a better advance rate and you're able to manage it in a better cost of capital there.

Okay. Is that really just bank facility financing?

That's right. A revolving facility launched it, continue to grow, expect to syndicate it further as it goes.

What advance rate are you getting?

Yeah. I think, again, this is a similar advance rate that our current BDC has, but again, you get better way to manage it with specific those type of assets, those type of deals, so anywhere from 60% to 70%.

Great. And I guess as a follow-up, with all these JVs going on, you actually have a lot of outside entities that want to work with you and tap your deal flow. Should we expect a material increase in your operating expenses or operating efficiencies going forward, or is there some operating leverage where you can basically scale up with minimal incremental growth in expenses?

Yeah. So I think the first thing to think about is we are -- these are all the same deals, right, with these various JVs. We're just tapping into different pockets of liquidity for them, right? So there is some scaling leverage there.

But you got to remember, we are not just a stagnant pool of assets, but a management company, an operating company, right? And so if we're growing at a 20% to 30% annual growth rate, which we have been for five years, that means expenses have to go up.

Now, income should go up and exceed that, which it has been and will continue to over time as our expense ratios have continued to come down to the point now where we're right in line with our BDC peers. And over time, as we continue to raise more capital and grow the business, that will just continue to improve.

But we're not trying to optimize for -- that is a lever that externally managed BDCs use because they have no other levers. That's not what we're focused on. We are building the business. We are hiring a lot of folks, and our income and our earnings per share will increase above and beyond those additional expenses.

And Chris, just to put a finer point on that, so like Kyle said, these are co-invest vehicles. So like the credit underwriting, the portfolio management, that's already being done. There's no incremental cost there. And then, any costs directly associated with a particular vehicle, whether it's accounting costs, funded admin, those are borne by the specific vehicle, not by the BDC.

Great. Thank you.

Thanks, Chris.

(Operator Instructions) Alexander Villalobos, Jefferies.

Thank you for taking my question. A little bit more detail on originations, just on the environment. What are you guys seeing with spreads, covenants, and leverage? Just a little more detail there on color would be great. Thank you.

Yeah. I think we've seen spreads, well, it depends on the vertical, but I'd say more often than not, our last few years, spreads have tightened up in some of our verticals, some not as much, but in some of them, they have been declining over the last few years with the competition and a lot of liquidity out there. We've seen that trend start to really hold up and in some ways, we're pushing pricing.

And so I think 2027 should probably look like a spread flat-to-up year and we are certainly testing that right now as I believe there is a lack of liquidity as I think back leverage and fundraising has become more difficult, supply and demand is going to start kicking in.

And so when you're thinking about the broadly syndicated market and spreads there, that's just not the market we play in, right? We are originating directly with these companies. The value that we're providing to them and working directly with them means we're going to end up with a higher spread generally.

And dealing in the market we deal in, which is this growth stage to lower middle market, we just have different companies, different competition, and there are different spreads. And so we haven't seen the spread compression that the rest of the private credit market has seen over the last five years. It's been smaller, and now it's knee-jerking back the opposite direction.

Perfect. Thank you, and congrats on the results.

Thanks, Alexander.

Thank you. And ladies and gentlemen, it appears we have no further questions this morning. Mr. Brown, I'll turn things back to you, sir, for any closing comments.

Great. Thank you. Well, on behalf of the Trinity Capital team, thank you for joining us today. Q3 was a strong quarter by all measures and Trinity Capital is experiencing tremendous momentum right now. We're enthusiastic about where we're headed.

We're excited to host many of you at our investor event next Thursday at the New York Stock Exchange before we have the honor of ringing the closing bell that afternoon with our team. We look forward to sharing our Q4 results in February. In the meantime, please don't hesitate to reach out to the IR desk with further questions. Have a great day. Thanks.

Thank you very much, Mr. Brown. Again, ladies and gentlemen, that will conclude Trinity Capital's third quarter earnings call. We'd like to thank you all so much for joining us. Wish you all a great afternoon. Goodbye.