Sixth Street Specialty Lending Inc (TSLX) 2020 Q2 法說會逐字稿

Good morning, and welcome to Sixth Street Specialty Lending Inc.'s June 30, 2020 Quarterly Earnings Conference Call.

早安，歡迎參加 Sixth Street Specialty Lending Inc. 於 2020 年 6 月 30 日舉行的季度財報電話會議。

Before we begin today's call, I would like to remind our listeners that remarks made during the call may contain forward-looking statements. Statements other than statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risk and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Sixth Street Specialty Lending, Inc.'s fillings with the Securities and Exchange Commission. The company assumes no obligation to update any such forward-looking statements.

在我們開始今天的電話會議之前，我想提醒我們的聽眾，電話會議期間的言論可能包含前瞻性陳述。本次電話會議中除歷史事實陳述外的其他陳述可能構成前瞻性陳述，不能保證未來業績或結果，並涉及許多風險和不確定性。由於多種因素的影響，實際結果可能與前瞻性陳述中的結果有重大差異，其中包括 Sixth Street Specialty Lending, Inc. 向美國證券交易委員會提交的文件中不時描述的因素。該公司不承擔更新任何此類前瞻性陳述的義務。

Yesterday, after the market close, the company issued its earnings press release for the second quarter ended June 30, 2020, and posted a presentation to the Investor Resources section of its website, www.sixthstreetspecialtylending.com.

昨天收盤後，該公司發布了截至 2020 年 6 月 30 日的第二季收益新聞稿，並在其網站 www.sixthstreetspecialtylending.com 的投資者資源部分發布了簡報。

The presentation should be reviewed in conjunction with the company's Form 10-Q filed yesterday with the SEC. Sixth Street Specialty Lending, Inc.'s earnings release is also available on the company's website under the Investor Resources section.

該演示文稿應與該公司昨天向 SEC 提交的 10-Q 表格一起進行審查。Sixth Street Specialty Lending, Inc. 的收益報告也可在該公司網站的投資者資源部分找到。

Unless noted otherwise, all performance figures mentioned in today's prepared remarks are as of and for the second quarter ended June 30, 2020. As a reminder, this call is being recorded for replay purposes.

除非另有說明，今天準備好的評論中提到的所有業績數據均截至 2020 年 6 月 30 日的第二季。謹此提醒，本次通話將會被錄音以供重播。

I will now turn the call over to Joshua Easterly, Chief Executive Officer of Sixth Street Specialty Lending, Inc.

我現在將把電話轉給第六街專業貸款公司執行長約書亞‧伊斯特利 (Joshua Easterly)。

Thank you. Good morning, everyone, and thank you for joining us. With me today is my partner and our President, Bo Stanley; and our CFO, Ian Simmonds. We and everyone here at Sixth Street hope you and your loved ones are able to stay safe and healthy in this uncertain environment.

謝謝。大家早安，感謝您加入我們。今天與我在一起的是我的合作夥伴兼我們的總裁 Bo Stanley；和我們的財務長伊恩·西蒙茲。我們和第六街的每個人都希望您和您的親人能夠在這個不確定的環境中保持安全和健康。

When we spoke in May, our hope has been that by August, there would've been -- there would be more clarity on the path and timeline of return to full business activity. However, the current health crisis continues to take a toll on human lives as well as the economic health of households and businesses around the world. While the Fed and U.S. government have provided rapid and extraordinary fiscal monetary support, it remains to be seen how long a return to normalcy will take and what the long-term impact of COVID will ultimately be.

當我們在五月講話時，我們希望到八月份，恢復全面商業活動的路徑和時間表將會更加清晰。然而，當前的健康危機持續對世界各地的人類生命以及家庭和企業的經濟健康造成影響。儘管聯準會和美國政府提供了快速且非同尋常的財政貨幣支持，但恢復正常需要多長時間以及新冠疫情最終會產生什麼長期影響仍有待觀察。

As shared in our stakeholder letter less than 2 weeks ago, we've always believed that any business model, including the BDC model has inherent constraints and risks. These risks make it fragile and particularly vulnerable to market shocks and uncertainty. That is why over the last years, we've taken steps across our business, not only to mitigate the undesired outcomes of the inherent fragility, but also to allow us to create value in periods of volatility.

正如不到兩週前我們在利害關係人信中所分享的那樣，我們始終相信任何商業模式，包括 BDC 模式都有固有的約束和風險。這些風險使其脆弱，特別容易受到市場衝擊和不確定性的影響。這就是為什麼在過去幾年中，我們在整個業務中採取了一些措施，不僅是為了減輕固有脆弱性帶來的不良後果，也是為了讓我們在波動時期創造價值。

These elements we've introduced into our business model include: our focus on high-quality underwriting and cycle-appropriate portfolio construction, match funding the nature of our liabilities with our assets, proactively managing liquidity and liability role risk, setting a financial policy that preserves our reinvestment option, and finding the optimal business model to provide both the benefits of scale and outsize returns for our stakeholders. While still early in the unfolding of this COVID-induced downturn, we believe that the strength of our Q2 results is an early indication of the value we can create for our stakeholders in the period ahead.

我們在業務模式中引入的這些要素包括：我們注重高品質承保和適合週期的投資組合構建，將融資性質與我們的資產相匹配，主動管理流動性和負債角色風險，制定財務政策保留我們的再投資選擇，並找到最佳的商業模式，為我們的利害關係人提供規模和超額回報。雖然新冠肺炎引發的經濟低迷仍處於初期階段，但我們相信，第二季的強勁業績是我們在未來一段時間內可以為利害關係人創造價值的早期跡象。

With that, let me turn this quarter's highlights, which are consistent with the preliminary earnings results we provided on July 23. After the market closed yesterday, we reported second quarter net investment income of $0.59, against our Q2 base dividend of $0.41. Net income per share of Q2 was $1.43. These results correspond to an annualized return of equity on net investment income and net income of 15.6% and 38.0%, respectively, and an annualized year-to-date return on equity on net investment income and net income of 13.1% and 7.6%, respectively.

接下來，讓我來談談本季的亮點，這些亮點與我們 7 月 23 日提供的初步獲利結果一致。昨天收盤後，我們報告第二季淨投資收益為 0.59 美元，而第二季基本股利為 0.41 美元。第二季每股淨利為 1.43 美元。這些結果對應於投資淨收益和淨利潤的年化股本回報率分別為15.6%和38.0%，以及淨投資收益和淨利潤的年化股本回報率分別為13.1%和7.6%，分別。

Net investment income this quarter was reported -- was supported by elevated prepayment and other fee activity in our portfolio, most notably our realized investment in Ferrellgas. Our strong net income this quarter was primarily due to the unrealized gains related to the impact of market spread tightening during this quarter as well as a robust net investment income. Over the course of Q2, LCD first-lien and second-lien spreads re traced 60% and 71% of their respective Q1 spread widening. Consistent with the broadly syndicated market, the impact of this on valuation of our portfolio this quarter resulted in a reversal of approximately 60% of our Q1 spread-related unrealized losses, which was reflected as an unrealized gain for Q2.

本季度報告的淨投資收入受到我們投資組合中預付款和其他費用活動增加的支持，最引人注目的是我們對 Ferrellgas 的已實現投資。我們本季強勁的淨利潤主要是由於本季市場利差收緊影響相關的未實現收益以及強勁的淨投資收入。在第二季度，LCD 第一留置權和第二留置權和第二留置權分別比第一季利差擴大了 60% 和 71%。與廣泛的銀團市場一致，這對本季我們投資組合估值的影響導致我們第一季與利差相關的未實現損失約 60% 逆轉，這反映為第二季的未實現收益。

Net asset value per share was $16.08, increasing by 6.7% from our pro forma March 31 net asset value per share of $15.07, which accounts for the impact of the $0.50 aggregate special dividends per share that was paid during Q2. Ian will walk through the quarter's net asset value bridge in more detail.

每股資產淨值為 16.08 美元，較 3 月 31 日預估的每股資產淨值 15.07 美元增長 6.7%，其中考慮了第二季度支付的每股 0.50 美元特別股息總額的影響。伊恩將更詳細地介紹本季的淨值橋樑。

Taking a step back, our net asset value per share at quarter end, if we were to add back our $0.50 per share of special dividends paid to shareholders in Q2, would be $16.58, which brings almost entirely back to our starting level of $16.77 at the beginning of the year, even though our spread-related unrealized losses have only been reversed by 60%. This is because we've been able to rebuild net asset value in other ways, including through the over-earning of our base dividend, outperformance on some of our small equity positions and unrealized mark-to-market gains on our interest rate swaps.

退一步來說，如果我們再加上第二季度支付給股東的每股0.50 美元的特別股息，我們季度末的每股淨資產價值將為16.58 美元，這幾乎完全回到了我們16.77 美元的起始水平。年初，儘管我們與價差相關的未實現損失僅扭轉了 60%。這是因為我們能夠透過其他方式重建資產淨值，包括透過超額賺取基本股利、部分小額股票部位的優異表現以及利率互換的未實現以市價計價收益。

Yesterday, our Board declared a third quarter base dividend of $0.41 per share to shareholders of record as of September 15, payable on October 15. Consistent with what we said last quarter, based on our view on the core earnings power of our portfolio, we do not anticipate making any changes to our base dividend level in the near or medium term.

昨天，我們的董事會宣布向截至 9 月 15 日登記在冊的股東派發每股 0.41 美元的第三季基本股息，並於 10 月 15 日支付。與我們上季度所說的一致，根據我們對投資組合核心獲利能力的看法，我們預計在短期或中期不會對基本股利水準做出任何改變。

There were no supplemental dividends declared relating to Q2 earnings as a result of the net asset value test in our framework, which specifies that no supplemental dividends are declared if our pro forma net asset value per share, adjusted for the impact of any supplemental dividends over the current and preceding quarter, declines by more than $0.15 per share. Any downward impact on net asset value as a result of special dividends, not supplemental dividends, are added back for the purpose of the net asset by value test. If we compare this quarter's net asset value per share, adding back our $0.50 per share of special dividends of $16.58 against our Q4 [2019] (corrected by company after the call) pro forma net asset value of $16.77, there was $0.19 of NAV per share decline against a limit of $0.15. Therefore, we are $0.04 short of being able to declare a supplemental dividend of 50% of this quarter's over earning.

根據我們框架中的淨資產值測試，沒有宣派與第二季度收益相關的補充股息，該框架規定，如果我們的備考每股淨資產值（根據任何補充股息的影響進行調整），則不會宣派補充股息。本季和上一季每股下跌超過 0.15 美元。由於特別股息（而非補充股息）而對淨資產價值產生的任何下降影響，均會在淨資產價值測試中予以加回。如果我們比較本季的每股淨資產值，將每股0.50 美元的特別股息16.58 美元與我們[2019]第四季（電話會議後由公司更正）的預計淨資產值16.77 美元相加，則每股資產淨值為0.19 美元。股價下跌 0.15 美元。因此，我們距離宣布本季超額獲利 50% 的補充股息還差 0.04 美元。

Based on our current outlook and assuming no material declines to our net asset value per share as a result of exogenous events, like the market volatility we observed in March, we would expect to resume declaring supplemental dividends on overearnings in Q3, provided that our reported net asset value per share at September 30 is greater of $14.92.

根據我們目前的前景，並假設我們的每股淨值不會因外部事件（例如我們在3 月觀察到的市場波動）而出現實質下降，我們預計將在第三季恢復宣布超盈補充股息，前提是我們的報告9 月 30 日每股資產淨值大於 14.92 美元。

With that, I'd like to turn the call over to Bo to walk through the activity and health of our portfolio in more detail.

說到這裡，我想將電話轉給 Bo，以更詳細地介紹我們投資組合的活動和健康狀況。

Thanks, Josh. I'll begin with a quick overview of our market backdrop during the quarter. Amid economic uncertainty, M&A activity continue to be significantly muted as buyers and sellers struggled to agree on valuations. Meanwhile, in the second quarter, there was significant tightening of risk premiums in the broader credit markets. A disconnect emerged between asset prices and economic reality, which we believe was primarily fueled by extensive Fed and government intervention, driving investor demand back into risk assets.

謝謝，喬許。我將首先快速概述本季的市場背景。在經濟不確定性的情況下，由於買家和賣家難以就估值達成一致，併購活動持續大幅減少。同時，第二季度，更廣泛的信貸市場的風險溢價顯著收緊。資產價格與經濟現實之間出現了脫節，我們認為這主要是由聯準會和政府的廣泛幹預所推動的，從而推動投資者需求重新轉向風險資產。

As a result, secondary prices across credit rose sharply in Q2, and there was abundant liquidity in the investment-grade and high-yield markets for a broad variety of issuers, including those in sectors most impacted by COVID.

因此，第二季信貸二級市場價格大幅上漲，投資等級和高收益市場中的各類發行人（包括受新冠疫情影響最嚴重的產業的發行人）擁有充足的流動性。

In light of these market dynamics and given our focus on maintaining strong risk-adjusted returns across our portfolio, Q2 originations activity was relatively light at $89 million of commitments and $77 million of fundings. These fundings were across 6 new and 6 existing portfolio companies. The majority of our fundings on a dollar basis this quarter was providing a new financing in connection with the recapitalization of Moran Foods, where we replaced our existing ABL loan with a new one at a higher spread and refresh call protection.

鑑於這些市場動態，並考慮到我們致力於在整個投資組合中保持強勁的風險調整回報，第二季的發起活動相對較少，承諾資金為 8900 萬美元，資金為 7700 萬美元。這些資金涉及 6 家新投資組合公司和 6 家現有投資組合公司。本季我們以美元計算的大部分資金用於提供與 Moran Foods 資本重組相關的新融資，我們以更高利差和刷新呼叫保護的新貸款取代了現有的 ABL 貸款。

Other new investments included small opportunistic purchases of BBB CLO liabilities and limited junior debt co-investments alongside our affiliated funds and growth businesses with attractive risk-adjusted returns. As a result, our portfolio is first-lien exposure decreased slightly from 97% to 96% quarter-over-quarter on a fair value basis.

其他新投資包括對 BBB CLO 負債的小額機會主義購買以及有限的次級債務聯合投資以及我們的附屬基金和具有有吸引力的風險調整回報的成長型業務。因此，我們的投資組合的第一留置權風險敞口以公允價值計算，環比從 97% 略有下降至 96%。

Repayments during Q2 totaled $211 million across 3 full and 2 partial paydowns. Ferrellgas and Nektar, which were our 2 largest portfolio names at the end of Q1, were both fully repaid early in the quarter. As a result, net repayment activity for the quarter was $134 million.

第二季的還款總額為 2.11 億美元，包括 3 次全額還款和 2 次部分還款。Ferrellgas 和 Nektar 是我們第一季末最大的兩個投資組合名稱，均在本季初全額償還。因此，本季的淨還款活動為 1.34 億美元。

During the quarter, as M&A activity slowed and the immediate opportunity set for our secondary market purchases and rescue financings became less actionable given Fed intervention, our team continued to work hard to build a pipeline of opportunities where we can create value through our core competencies of deep sector expertise and the ability to underwrite complexity.

本季度，隨著併購活動放緩，以及聯準會幹預下，二級市場購買和救援融資的直接機會變得不那麼可行，我們的團隊繼續努力建立一系列機會，透過我們的核心競爭力創造價值深厚的行業專業知識和承擔複雜性的能力。

As we previewed in our letter on July 23, we've been active in capital deployment post quarter end. As of today, Q2 fundings totaled approximately $135 million, primarily led by 2 new investments. In broad strokes, our reputation is creative solutions providers, particularly amongst participants within our sector themes put an important role in outsourcing of these investments. Our deep diligence and underwriting capabilities, along with the scaled solutions we're able to offer as part of the $34 billion Sixth Street platform, allowed us to structure investments with attractive spreads, strong call protection and other fees that enhances the overall risk-adjusted return profile of our portfolio.

正如我們在 7 月 23 日的信中預覽的那樣，我們在季度末後一直積極進行資本部署。截至目前，第二季融資總額約 1.35 億美元，主要由兩項新投資領投。從廣義上講，我們的聲譽是創意解決方案提供商，特別是我們行業主題的參與者在這些投資的外包中發揮了重要作用。我們深入的調查和承銷能力，以及作為340 億美元第六街平台的一部分能夠提供的規模化解決方案，使我們能夠建立具有有吸引力的利差、強大的呼叫保護和其他費用的投資結構，從而提高整體風險調整後的收益。我們投資組合的回報概況。

Today, we continue to have a robust pipeline, which we are constantly working to build through our direct sourcing channels. Looking ahead, we believe the competitive advantage of our human capital will become increasingly evident as a financing solution sought by companies, management teams and sponsors will only grow in complexity in this uncertain environment.

如今，我們仍然擁有強大的管道，並不斷努力透過我們的直接採購管道來建立這項管道。展望未來，我們相信我們的人力資本的競爭優勢將變得越來越明顯，因為在這種不確定的環境中，公司、管理團隊和贊助商尋求的融資解決方案只會變得越來越複雜。

As it relates to our portfolio at quarter end, the overall performance of our portfolio continues to be solid with approximately [97%] (corrected by company after the call) rated 1 or 2 on a performance rating scale of 1 to 5 with 1 being the highest. And minimal nonaccruals at approximately 0.4% of the portfolio on a fair value basis, representing 3 investments. To revisit Josh's introductory remarks, we have long recognized the inherent fragility of the left-hand side of the balance sheet. Our assets are callable loans, which means that the investments where we are over-earning due to borrower outperformance are typically the ones that get called away. And in periods of volatility when credit spreads widen, the value of our assets tend to decline.

由於它與我們季度末的投資組合相關，因此我們投資組合的整體業績繼續保持穩健，大約[97%]（由公司在電話會議後更正）在1 至5 的業績評級範圍內評級為1 或2 ，其中1 為最高的。以公允價值計算，非應計費用最低約為投資組合的 0.4%，相當於 3 項投資。回顧喬許的介紹性發言，我們很早就認識到資產負債表左側固有的脆弱性。我們的資產是可贖回貸款，這意味著我們因借款人表現出色而獲得超額收益的投資通常會被贖回。在信用利差擴大的波動時期，我們的資產價值往往會下降。

In order to combat the fragile elements of the left side of our balance sheet, we have over the years focused on strong underwriting discipline and defensive portfolio construction, which includes sector, business model and management team selection. We believe these efforts have played a role in the performance of our portfolio to date. However, we'd be remiss not to highlight our portfolio companies' high-quality management teams who took quick action at the onset of COVID to optimize cost structures and protect their liquidity positions. Albeit still early, our portfolio has performed above our expectations given the macro backdrop.

為了應對資產負債表左側的脆弱因素，多年來我們一直專注於嚴格的承保紀律和防禦性投資組合建設，其中包括行業、業務模式和管理團隊的選擇。我們相信，這些努力對我們迄今為止的投資組合的表現發揮了作用。然而，我們不能不強調我們的投資組合公司的高素質管理團隊，他們在新冠疫情爆發時迅速採取行動，優化成本結構並保護其流動性狀況。儘管還為時過早，但考慮到宏觀背景，我們的投資組合的表現超出了我們的預期。

The slight increase in this quarter's nonaccruals from approximately 0.1% to 0.4% of the portfolio by fair value at quarter end was driven by our Neiman markets first-lien term loan, not our ABL FILO term loan, and the residual non-DIP roll up portions of our JCPenney first-lien term loan and secured notes. Given what we believe may be less-than-par recovery, we have applied the regularly scheduled cash interest payments we received during the quarter to the amortized cost of our positions, all of which were acquired at prices less than par.

以季末公允價值計算，本季非應計費用從投資組合的約0.1% 略有增加至0.4%，這是由我們的Neiman 市場第一留置權定期貸款（而不是我們的ABL FILO 定期貸款）以及剩餘非DIP 累積推動的我們的 JCPenney 第一留置權定期貸款和擔保票據的一部分。鑑於我們認為復甦可能低於面值，我們已將本季度收到的定期現金利息支付應用於我們頭寸的攤餘成本，所有這些頭寸都是以低於面值的價格購買的。

As we covered in our preliminary release in July, our retail ABL exposure at quarter end was stable from prior quarter at 9.4% of the portfolio at fair value. 99 Cents, Moran Foods and Staples, businesses that were generally deemed essential during COVID shutdown, continue to benefit from tailwinds in the current environment and together represent 44.5% of our retail ABL exposure at quarter end.

正如我們在 7 月的初步發布中所介紹的，季度末我們的零售 ABL 敞口與上一季相比保持穩定，按公允價值計算佔投資組合的 9.4%。99 Cents、Moran Foods 和 Staples 這些在新冠疫情關閉期間被普遍認為至關重要的企業，繼續受益於當前環境的順風車，合計占我們季度末零售 ABL 敞口的 44.5%。

Our largest retail ABL exposure is our FILO term loan in Neiman Marcus, which was 3.6% of our portfolio at fair value at quarter end. Our current expectation based on the company's plan of reorganization and case milestones is that we will be refinanced upon Neiman Marcus' exit from bankruptcy, which is expected to occur in the fall of 2020.

我們最大的零售 ABL 曝險是 Neiman Marcus 的 FILO 定期貸款，以季末公允價值計算，該貸款占我們投資組合的 3.6%。根據公司的重組計劃和案件里程碑，我們目前的預期是，我們將在 Neiman Marcus 擺脫破產保護後獲得再融資，預計將於 2020 年秋季發生。

With Sixth Street as lenders of size in each of Neiman and JCPenney's prepetition capital structures, we were able to have meaningful roles in driving the DIP financing process and terms. As a result, we believe our $11.5 million par value DIP loan for Neiman and our $6 million par value DIP loan for JCPenney at quarter end offer attractive risk-adjusted returns given the structural protection of DIP loans in combination with our contractual economics.

憑藉第六街作為 Neiman 和 JCPenney 的預申請資本結構中的規模貸款人，我們能夠在推動 DIP 融資流程和條款方面發揮有意義的作用。因此，我們相信，鑑於DIP 貸款的結構性保護與我們的合約經濟相結合，我們在季度末為Neiman 提供的1150 萬美元面值DIP 貸款和為JCPenney 提供的600 萬美元面值DIP 貸款可提供有吸引力的風險調整回報。

Our portfolio's energy exposure at quarter end was 3.9% at fair value but has since fallen to 2.8% on a pro forma basis given partial paydowns on Verdad and Energy Alloys post quarter end. We expect to be fully repaid on Energy Alloys during Q4 2020 as the company completes an out-of-court wind down via liquidation of its assets.

我們的投資組合在季度末的能源風險敞口以公允價值計算為 3.9%，但考慮到季度末後 Verdad 和 Energy Alloys 的部分付款，預計該風險敞口已降至 2.8%。我們預計，隨著該公司透過資產清算完成庭外清算，能源合金業務將在 2020 年第四季獲得全額償還。

Our portfolio composition and credit stats for Q2 remained relatively stable from prior quarter. Top industry exposures continue to be business services at 22% of portfolio at fair value, followed by financial services and healthcare at approximately 17% and 11%, respectively.

我們第二季的投資組合組成和信用統計數據與上一季相比保持相對穩定。最主要的產業曝險仍是商業服務，佔投資組合的公允價值 22%，其次是金融服務和醫療保健，分別約佔 17% 和 11%。

Based on the financial information through March 31 of our core portfolio companies, the average net attachment point at last dollar average was 0.4x and 4.3x compared to 0.3x and 4.1x, respectively. Our average interest coverage ratio was 3.3x compared to 3.2x in the prior quarter.

根據我們核心投資組合公司截至 3 月 31 日的財務信息，最後美元平均水平的平均淨附著點分別為 0.4 倍和 4.3 倍，而此前分別為 0.3 倍和 4.1 倍。我們的平均利息覆蓋率為 3.3 倍，而上一季為 3.2 倍。

We would caveat that these figures, given the timing lag and trailing nature do not fully reflect the impact of the economic shutdown that persisted through most of Q2. However, based on our ongoing engagement with borrowers, we do not expect a material deterioration of credit metrics across our portfolio in the near term. This quarter, out of our portfolio of 65 names, we had only 1 investment outside of the retail sector ones we discussed earlier, complete an amendment with COVID cited as a direct cause.

我們需要注意的是，考慮到時間滯後和落後性質，這些數字並不能完全反映第二季大部分時間持續的經濟停擺的影響。然而，根據我們與借款人的持續接觸，我們預期短期內我們投資組合的信用指標不會出現實質惡化。本季度，在我們的 65 個投資組合中，除了我們之前討論的零售業之外，我們只有 1 項投資完成了修訂，並將新冠疫情列為直接原因。

To the extent state reopenings are paused or reversed, we would expect that this figure will increase in order to provide our borrowers with additional flexibility on covenants. As of today, we do not expect any defaults on debt service obligations in the near term.

如果州重新開放被暫停或逆轉，我們預計這個數字將會增加，以便為我們的借款人提供更多的契約彈性。截至今天，我們預期短期內不會出現償債義務違約的情況。

Now on to our portfolio yields. The weighted average total yield on our debt and income-producing securities at amortized cost increased by approximately 10 basis points quarter-over-quarter to 10%.

現在談談我們的投資組合收益率。以攤餘成本計算的債務和創收證券的加權平均總收益率環比增長約 10 個基點，達到 10%。

Breaking this down, there were 15 basis points of yield uplift from the impact of new and exited investments this quarter and 10 basis points of uplift from the impact of amendments. These were partially offset by 15 basis points of downward yield impact from the Neiman and LIBOR prior to it reaching our average floors of 115 basis points across our floating rate assets. Quarter-over-quarter, the weighted average spread over the 3-month LIBOR of our floating rate investments increased by 100 basis points, almost entirely due to the benefit of our LIBOR floors.

細分來看，本季新投資和退出投資的影響使收益率上升了 15 個基點，修正案的影響使收益率上升了 10 個基點。在我們的浮動利率資產達到 115 個基點的平均下限之前，內曼和倫敦銀行同業拆借利率 (LIBOR) 收益率下降 15 個基點的影響部分抵消了這些影響。與上一季相比，我們浮動利率投資的 3 個月 LIBOR 加權平均利差增加了 100 個基點，這幾乎完全歸功於我們 LIBOR 下限的好處。

With that, I'd like to turn it over to Ian.

有了這個，我想把它交給伊恩。

Thank you, Bo. I'll begin with an overview of our balance sheet. Total investments at fair value decreased slightly from $2.05 billion to $1.98 billion quarter-over-quarter primarily due to net repayment activity in our portfolio, partially offset by the positive valuation impact of tightening credit spreads on the fair value of our investments.

謝謝你，博。我將首先概述我們的資產負債表。以公允價值計算的總投資額環比從20.5 億美元小幅下降至19.8 億美元，主要是由於我們投資組合中的淨還款活動，但信貸利差收緊對我們投資公允價值的正面估值影響部分抵消了這一影響。

Total principal amount of debt outstanding was $875 million, and net assets were $1.08 billion or $16.08 per share. Our average debt-to-equity ratio was 0.87x, and our ending debt-to-equity ratio was 0.81x, down from 0.96x in the prior quarter. At quarter end, we had $1.08 billion of liquidity under our revolver against $73 million of unfunded portfolio company commitments available to be drawn.

未償債務本金總額為 8.75 億美元，淨資產為 10.8 億美元，即每股 16.08 美元。我們的平均負債股本比率為 0.87 倍，期末負債股本比率為 0.81 倍，低於上一季的 0.96 倍。截至季末，我們的循環資金下有 10.8 億美元的流動資金，而可供提取的無資金支持的投資組合公司承諾資金為 7,300 萬美元。

Given the net funding activity thus far in Q3, our leverage today is approximately 0.91x, and our liquidity stands at $975 million with an estimated $75 million of unfunded portfolio company commitments available to be drawn.

考慮到第三季迄今為止的淨融資活動，我們目前的槓桿約為 0.91 倍，我們的流動性為 9.75 億美元，預計可提取 7,500 萬美元的無資金投資組合公司承諾。

In our recent letter to stakeholders, we discussed at length the structural limitations that make BDC model innately fragile. To review, these include the requirement to be long only, the need to be fully invested in order to generate a dividend level that the market expects and the fact that there aren't limitless, alpha-generating direct middle-market lending opportunities. This is further complicated by strict regulatory requirements and a mark-to-market valuation framework. Bo discussed the elements we've introduced to the left-hand side of our balance sheet to address the inherent fragility of our business model, and I'll now cover our efforts on the right-hand side of the balance sheet.

在我們最近致利害關係人的信中，我們詳細討論了導致 BDC 模型本質上脆弱的結構性限制。回顧一下，這些包括只做多的要求，需要充分投資以產生市場預期的股息水平，以及不存在無限的、產生阿爾法的直接中間市場貸款機會的事實。嚴格的監管要求和按市值計價的估值框架使情況變得更加複雜。Bo 討論了我們在資產負債表左側引入的元素，以解決我們業務模式固有的脆弱性，現在我將介紹我們在資產負債表右側的努力。

As risk managers and capital solutions providers, we believe paying for the option on liquidity during periods of low volatility is critical in our ability to operate and create value for both stakeholders and clients in periods of high volatility. At quarter end, our liquidity represented approximately 54% of our total assets, and we had nearly 15x coverage on our unfunded commitments available to be drawn by our borrowers based on contractual requirements in the underlying loan agreements. This compares to a peer median of approximately 5x at March 31. Our robust liquidity, combined with our financial leverage of 0.91x today, means that we have substantial investment capacity and flexibility during these uncertain times.

作為風險管理者和資本解決方案提供者，我們認為，在低波動時期支付流動性選擇權對於我們在高波動時期運作和為利害關係人和客戶創造價值的能力至關重要。截至季末，我們的流動性約佔總資產的 54%，並且根據基礎貸款協議中的合約要求，我們的無資金承諾的承保範圍幾乎是藉款人提取的 15 倍。相比之下，截至 3 月 31 日，同行中位數約為 5 倍。我們強勁的流動性，加上目前 0.91 倍的財務槓桿，意味著我們在這些不確定的時期擁有強大的投資能力和靈活性。

To put some numbers around the cost of our option on liquidity, if our revolver was sized to have only 5x coverage of our unfunded commitments at quarter end, similar to the median of our peers, we would have picked up approximately 25 basis points of ROE on an annualized basis or approximately $2.6 million. However, through our ability to be opportunistic in both new portfolio investments and investments in our own capital structure in the past few months, we believe we have already realized a return on this investment.

為了用一些數字來說明我們的流動性選擇權成本，如果我們的左輪手槍規模僅為我們在季度末無資金承諾的覆蓋範圍的5 倍（類似於我們同行的中位數），我們的ROE 將會提高約25 個基點以年計算約 260 萬美元。然而，透過過去幾個月我們在新的投資組合投資和對我們自己的資本結構的投資中機會主義的能力，我們相信我們已經實現了這項投資的回報。

During the quarter, given our strong liquidity position, we were able to opportunistically purchase $29.7 million principal amount of our 2022 Convertible Notes and $2.5 million principal amount of our 2024 Notes at prices below par. Concurrent with these purchases, we permanentized a portion of the unrealized mark-to-market gains on the interest rate swaps corresponding to those notes by effectively canceling pro-rata portions of our swaps.

在本季度，鑑於我們強勁的流動性狀況，我們能夠以低於票面價格的價格機會購買 2970 萬美元本金的 2022 年可轉換票據和 250 萬美元本金的 2024 年票據。在進行這些購買的同時，我們透過有效取消掉期的按比例部分，永久化了與這些票據相對應的利率掉期的部分未實現的按市價計價的收益。

Taking these gains into account, our weighted average purchase price on the combined $32.2 million of notes was approximately 94%. To put this into perspective, the benefits of these purchases alone, namely our gains on the swaps and the reduction to our blended cost of debt covered the majority of our cost of the option for liquidity on the entire year.

考慮到這些收益，我們對總計 3,220 萬美元票據的加權平均購買價格約為 94%。從這個角度來看，僅這些購買的好處，即我們的掉期收益和混合債務成本的降低，就涵蓋了我們全年流動性選擇權成本的大部分。

Moving on. To address the size and access constraints that BDCs face in the funding markets, we've also been paying for insurance to mitigate our refinancing risk. We extend the maturity of our 5-year revolver every 12 to 15 months and opportunistically issue notes in the unsecured market to create a diverse funding profile with staggered long-term maturities. Our next maturity is approximately 2 years away at only $143 million principal amount, and our funding mix at quarter end was comprised of 73% unsecured and 27% secured debt. The average remaining life of our investments funded with debt was 2.2 years compared to a weighted average remaining maturity on our debt commitments of 4.2 years at the end of Q2.

繼續。為了解決 BDC 在融資市場中面臨的規模和准入限制，我們也購買了保險，以減輕我們的再融資風險。我們每 12 至 15 個月延長 5 年期左輪手槍的期限，並在無擔保市場上機會性地發行票據，以創建具有交錯長期期限的多元化融資狀況。我們的下一個到期日約為 2 年，本金金額僅為 1.43 億美元，季度末的融資組合由 73% 的無擔保債務和 27% 的有擔保債務組成。我們以債務融資的投資的平均剩餘期限為 2.2 年，而第二季末我們債務承諾的加權平均剩餘期限為 4.2 年。

With respect to our fixed-rate liabilities, we continue to use interest rate swaps to match our liabilities with the predominantly floating-rate nature of our assets. In periods of economic uncertainty, which typically can coincide with falling rate environments, these swaps have enhanced our capital, liquidity and earnings profile. At quarter end, we had approximately $34 million of unrealized mark-to-market gains on our interest rate swaps, of which $15 million was embedded in our NAV. The remainder was reflected in the carrying value of our 2024 unsecured notes at quarter end, given the application of hedge accounting on our swaps associated with those notes.

就我們的固定利率負債而言，我們繼續使用利率掉期來將我們的負債與我們主要的浮動利率資產相匹配。在經濟不確定時期（通常與利率下降的環境同時發生），這些互換增強了我們的資本、流動性和獲利狀況。截至季末，我們的利率互換有約 3,400 萬美元未實現的以市價計價收益，其中 1,500 萬美元嵌入我們的資產淨值中。考慮到我們對與這些票據相關的掉期應用了對沖會計，其餘部分反映在我們 2024 年無擔保票據季末的帳面價值中。

Turning to our presentation materials. Slide 8 is the NAV bridge for the quarter. As Josh mentioned, the impact of credit spread tightening on the valuation of our portfolio was a significant driver of NAV movement this quarter, with unrealized gains of $0.72 per share. Walking through the other drivers of NAV movement this quarter, we added $0.59 per share from net investment income against the base dividend of $0.41 per share. There was a $0.15 per share reduction to NAV as we reversed net unrealized gains on the balance sheet related to investment realizations and recognize these gains into this quarter's net investment income. "Other changes" resulted in a positive $0.25 per share impact to this quarter's NAV. This was primarily driven by unrealized gains related to some of our equity positions.

轉向我們的簡報材料。投影片 8 是本季的資產淨值橋。正如 Josh 所提到的，信貸利差收緊對我們投資組合估值的影響是本季資產淨值變動的重要驅動因素，每股未實現收益為 0.72 美元。回顧本季資產淨值變動的其他驅動因素，我們從淨投資收益中增加了每股 0.59 美元，而基礎股息為每股 0.41 美元。由於我們沖銷了資產負債表上與投資變現相關的未實現淨收益，並將這些收益計入本季度的淨投資收益，每股資產淨值減少了 0.15 美元。「其他變化」對本季的淨值產生了每股 0.25 美元的正面影響。這主要是由於與我們的一些股權頭寸相關的未實現收益所致。

Moving to the income statement on Slide 9. Total investment income of $70.2 million compared to $66.3 million in the prior quarter. This was driven by "other fees" which consists of prepayment fees and accelerated amortization of upfront or amortization of upfront fees from unscheduled paydowns of $14.3 million, compared to $7.6 million in the prior quarter. The largest driver of this quarter's fees was Ferrellgas. "Other income" increased to $6.5 million compared to $2.8 million in the prior quarter. "Interest and dividend income" was $49.5 million, down $6.4 million from the prior quarter due to the decrease in the average size of our portfolio. It was also due to the impact of a falling LIBOR, which was mitigated by the average floors across our floating rate debt.

轉到投影片 9 上的損益表。總投資收入為 7,020 萬美元，而上一季為 6,630 萬美元。這是由「其他費用」推動的，其中包括預付款費和預付款加速攤銷或計劃外付款的預付款攤銷 1,430 萬美元，而上一季為 760 萬美元。本季費用的最大推動者是 Ferrellgas。「其他收入」增加至 650 萬美元，而上一季為 280 萬美元。「利息和股息收入」為 4,950 萬美元，比上一季減少 640 萬美元，原因是我們的投資組合平均規模下降。這也是由於倫敦銀行同業拆借利率下降的影響，我們浮動利率債務的平均下限緩解了這種影響。

Net expenses decreased by $1.8 million quarter-over-quarter to $29.8 million, primarily driven by lower interest expense from a lower effective LIBOR and a decrease in our average debt outstanding. This quarter's weighted average cost of debt outstanding decreased by approximately 60 basis points to 3.3%, reflecting the decrease in the effective LIBOR in our debt outstanding as well as a small accretive impact of our opportunistic notes repurchases.

淨費用較上季減少 180 萬美元，至 2,980 萬美元，主要是由於有效倫敦銀行同業拆借利率 (LIBOR) 下降和平均未償債務減少導致利息費用減少。本季未償債務加權平均成本下降約 60 個基點至 3.3%，反映出我們未償債務中有效 LIBOR 的下降以及我們機會主義票據回購的小幅增值影響。

Given the one quarter timing lag on the LIBOR reset date for our interest rate swaps, we have relatively good visibility into our cost of debt for the quarter ahead as we think about our net interest margin for Q3 and beyond. So long as LIBOR remains below the average floors on our assets, any incremental declines in LIBOR will benefit our cost of debt and flow directly to our net interest margin for any given level of asset yields and leverage. Assuming an average leverage for Q3, in line with our current level of 0.91x and based on our Q2 asset level yields, we would expect net interest margin expansion for Q3 of approximately 90 basis points. This would imply a year-over-year net interest expansion in our business of approximately 115 basis points. Unlike most of our peers, with unswapped fixed rate liabilities that are likely experiencing net interest margin compression in this low rate environment, we have been able to enhance the earnings power of our portfolio in this period of economic uncertainty.

鑑於我們的利率互換的 LIBOR 重置日期有一個季度的時間滯後，當我們考慮第三季度及以後的淨息差時，我們對未來季度的債務成本有相對較好的了解。只要 LIBOR 仍低於我們資產的平均下限，LIBOR 的任何增量下降都將有利於我們的債務成本，並直接流入我們在任何給定資產收益率和槓桿水平下的淨息差。假設第三季的平均槓桿率與我們目前 0.91 倍的水平一致，並基於我們第二季的資產水準收益率，我們預計第三季的淨利差將擴大約 90 個基點。這意味著我們業務的淨利息年增約 115 個基點。與我們的大多數同業不同，在這種低利率環境下，未掉期的固定利率負債可能會經歷淨利差壓縮，在這個經濟不確定的時期，我們能夠增強我們投資組合的獲利能力。

On this note, let me wrap up with an update on our earnings guidance for the remainder of the year. Given our results for the first half of 2020 and our current outlook, we would expect our full year net investment income per share to be on the upper end of our previously communicated range of $1.84 to $2.01. Given the strength of our pipeline and the prospect for higher asset level yields given our capabilities as a solutions provider in this environment, we feel good about our ability to continue generating attractive ROEs for the period ahead.

最後，讓我介紹一下我們今年剩餘時間的獲利指引的最新情況。鑑於我們 2020 年上半年的業績和當前的前景，我們預計全年每股淨投資收益將位於我們先前通報的範圍的上限，即 1.84 美元至 2.01 美元。考慮到我們的管道實力以及更高資產水平收益率的前景，考慮到我們在這種環境下作為解決方案提供者的能力，我們對我們在未來一段時間內繼續產生有吸引力的股本回報率的能力感到滿足。

With that, I'd like to turn it back to Josh for concluding remarks.

說到這裡，我想把它轉回給喬許做總結發言。

Thank you, Ian. While we're pleased with our Q2 results and proud of what the team has been able to accomplish to date in these challenging times, we're operating with the mindset that there will be prolonged economic challenges ahead of us. However, our deliberate efforts in creating a business that not only survives volatility and uncertainty but thrive on it continues to result in small wins.

謝謝你，伊恩。雖然我們對第二季的業績感到滿意，並對團隊迄今為止在這個充滿挑戰的時期所取得的成就感到自豪，但我們的經營理念是，我們面前將面臨長期的經濟挑戰。然而，我們刻意努力創造一家不僅能夠經得起波動和不確定性，而且能夠蓬勃發展的企業，這將繼續帶來小小的勝利。

Hindsight is always 20/20, and therefore, we are continually learning along the way. We will continue to evolve and refine our thinking in our processes to create a differentiated business model and experience for our stakeholders and our clients.

事後諸葛亮總是20/20，因此，我們一路上不斷學習。我們將繼續發展和完善我們的流程思維，為我們的利害關係人和客戶創造差異化的業務模式和體驗。

Before moving to Q&A, I'd like to spend a moment to reflect on the impact of COVID on our communities. When we take a step back, it's evident that the economic fallout of this pandemic has had a disproportional impact on people with lower income, less job security and those lacking caregiver flexibility. The regressive impact of COVID was magnified by the inherent inequalities--racial, gender, socioeconomic--to name a few that has been built into our institutions over time. As a result, as a business that strives to be leaders in our communities, we can't help but feel an imperative to support change that helps create a better and more inclusive society.

在進行問答之前，我想花點時間思考一下新冠疫情對我們社區的影響。當我們退後一步時，很明顯，這種流行病的經濟影響對收入較低、工作保障較差和缺乏護理靈活性的人產生了不成比例的影響。新冠疫情的倒退影響因種族、性別、社會經濟等固有的不平等而被放大，僅舉幾例，這些不平等隨著時間的推移已經融入我們的機構中。因此，作為一家致力於成為社區領導者的企業，我們不禁感到有必要支持變革，以幫助創造一個更美好、更具包容性的社會。

Over the past few months, in addition to trying to facilitate honest conversations with our teams on these topics, Sixth Street has been contributing resources to organizations, addressing inequality as well those directly counteracting COVID's economic impact. We've also been, for some time now, been exploring ways to addressing underrepresentation in finance through our recruiting and business partnership efforts. We think a silver lining of COVID is that these issues of inequality are being brought to the forefront, and we will continue doing our part as an organization to be an agent of change.

在過去的幾個月裡，除了努力促進與我們的團隊就這些主題進行誠實對話外，第六街還一直為組織提供資源，解決不平等問題以及直接抵消新冠病毒經濟影響的問題。一段時間以來，我們一直在探索透過招募和業務合作努力解決金融領域代表性不足的問題。我們認為，新冠疫情帶來的一線希望是，這些不平等問題正被帶到最前沿，我們將繼續作為一個組織盡自己的一份力量，成為變革的推動者。

With that, I'd like to thank you for your continuing interest and your support today. Operator, please open up lines for questions.

在此，我要感謝您今天的持續關注與支持。接線員，請開通提問線。

(Operator Instructions) Our first question comes from Rick Shane with JPMorgan.

（操作員指示）我們的第一個問題來自摩根大通的 Rick Shane。

Glad everybody is doing well. I wanted to talk to you a little bit about your relative cost of capital versus peers and your relative multiples. I know that, in general, you think of cost of capital on an absolute basis in terms of your investment strategy. But right now, your relative advantages are so significant. I'm wondering how you think about monetizing that. Is it through the possibility of acquisition? Is it through growth in a period when your peers can't necessarily grow and access capital in the same way that you do or could?

很高興每個人都做得很好。我想和您談談您與同業相比的相對資本成本以及相對倍數。我知道，一般來說，您在投資策略方面會絕對考慮資本成本。但現在，你的相對優勢是如此顯著。我想知道您如何看待將其貨幣化。是透過收購的可能性嗎？是在您的同行不一定能像您或能夠以同樣的方式實現成長和獲取資本的時期實現成長嗎？

Rick, thanks for the question. So look, I don't think we get caught in the moment -- in a moment looking at our cost of capital. We kind of have a view of the world, which is the market will tell you our cost -- the market will tell us our cost of capital, but that will fluctuate during times, and so we try to look at our cost of capital across cycles.

里克，謝謝你的提問。所以看，我不認為我們會陷入困境——在考慮我們的資本成本的時刻。我們對世界有一個看法，那就是市場會告訴你我們的成本——市場會告訴我們我們的資本成本，但這會隨著時間的推移而波動，所以我們嘗試著眼於不同時期的資本成本。循環。

On the M&A front, I think it's very hard to -- at this moment in time to get any accretive M&A done. Historically, the only kind of M&A in the BDC space has either been very, very small, externally managed BDCs that have really, really deep credit problems. We're -- at the time we have done work, we don't think that the kind of the valuation -- we think the market valuation is kind of reasonable to reflect those credit problems or on internally managed BDCs, where it's easier to get something done. Quite frankly, there's not that many scaled internally managed BDCs left.

在併購方面，我認為目前很難完成任何增值性併購。從歷史上看，BDC 領域唯一的併購類型要么是規模非常非常小的、由外部管理的 BDC，而這些 BDC 的信用問題確實非常嚴重。我們——在我們完成工作時，我們認為這種估值——我們認為市場估值對於反映這些信貸問題或內部管理的 BDC 來說是合理的，因為在這種情況下更容易完成某事。坦白說，規模化的內部管理 BDC 所剩無幾。

So I think as we think about the path forward to create value for our stakeholders on a go-forward basis, my view is continuing to buying high risk-adjusted return, opportunities to put our balance sheet to work. And we'll see if -- and I think that is ultimately the path for value creation. And that's kind of been our North Star since inception. And I think it's worked pretty well for our stakeholders.

因此，我認為，當我們思考未來為利害關係人創造價值的道路時，我的觀點是繼續購買高風險調整回報，以及讓我們的資產負債表發揮作用的機會。我們將看看是否——我認為這最終是創造價值的道路。自成立以來，這就是我們的北極星。我認為這對我們的利害關係人來說效果很好。

So I think we're most definitely in the latter camp versus a former camp as it relates to the value-creation path going forward.

因此，我認為我們絕對屬於後一個陣營，而不是前一個陣營，因為它關係到未來的價值創造路徑。

Got it. My head is spinning between latter and former in the context of your thoughts.

知道了。在你的想法中，我的頭腦在後者和前者之間旋轉。

The organic growth in putting capital work in high risk-adjusted opportunities where our competitors are more capital constrained and we're not capital constrained versus the inorganic acquisition path.

將資本投入高風險調整機會的有機成長，與無機收購路徑相比，我們的競爭對手資本更加有限，而我們不受資本限制。

Got it. Okay. I appreciate that. Look, to some extent, obviously, you're a financial company but if you think about it in the context of being a manufacturing business, you make loans, and right now -- and it's been persistent, but I think right now, it's more disparate than it's been at any point in a long time. Your cost of goods sold is so advantageous versus your peers. I'm just wondering if there are more aggressive ways to take advantage of that.

知道了。好的。我很感激。顯然，在某種程度上，你是一家金融公司，但如果你在製造企業的背景下考慮它，你會發放貸款，而且現在 - 而且它一直持續存在，但我認為現在，它是比很長一段時間以來的任何時候都更加不同。與同行相比，您的銷售成本非常有優勢。我只是想知道是否有更積極的方法來利用這一點。

Yes. I mean, just to be -- like it's a little bit circular, I think. I think our cost of goods sold, so our cost of capital is low on a relative basis because the market thinks we are a very prudent allocator of capital, and that we try to build in a large margin of safety as it relates to the assets we're creating versus our cost of goods sold, i.e., have high gross margin.

是的。我的意思是，我想，就像它有點圓形一樣。我認為我們的銷售成本相對較低，因此我們的資本成本相對較低，因為市場認為我們是非常謹慎的資本配置者，並且我們試圖建立與資產相關的較大安全邊際我們正在創造相對於我們的銷售成本的產品，即具有高毛利率。

And when things go wrong, we're still able to create high returns on capital. I think the more you lean into the, "Hey, I'm super low in the cost curve," the more you'll probably end up eroding that relative advantage. If that makes sense?

當出現問題時，我們仍然能夠創造高資本報酬率。我認為你越傾向於“嘿，我的成本曲線超低”，你就越可能最終削弱這種相對優勢。如果這有道理嗎？

It absolutely does. And again, understanding what motivates you guys in this issue helps us understand sort of where you're going, that makes a lot of sense.

確實如此。再說一次，了解你們在這個問題上的動機有助於我們了解你們的目標，這很有意義。

Thanks, Rick.

謝謝，瑞克。

Our next question comes from the line of Ryan Lynch with KBW.

我們的下一個問題來自 Ryan Lynch 與 KBW 的對話。

First off, I really appreciate the shareholder letter that you guys provided, that was very thoughtful and informative. So thank you for that. Though, some of your comments earlier, you mentioned that M&A has been really muted in the market, which has pressured market activity as buyers and sellers struggle to agree on valuation. But then you also mentioned that you have a robust pipeline today.

首先，我非常感謝你們提供的股東信，內容非常周到且資訊豐富。非常感謝你的幫忙。不過，您之前的一些評論提到，市場上的併購活動確實很平靜，這給市場活動帶來了壓力，因為買家和賣家難以就估值達成一致。但隨後您也提到，您現在擁有強大的管道。

And so I'm just wondering, what has really changed in the marketplace to grow your pipeline? Has there been more market activity, generally speaking, or are you guys just getting better hit rates on some of the deals that you guys are searching for as well as can you kind of clarify when you talk about a robust pipeline, are you talking about just the potential for deal activity to pick up from the depth? You're talking about the pipeline returning to levels more seen in 2019.

所以我只是想知道，市場上到底發生了什麼變化來擴大您的管道？一般來說，是否有更多的市場活動，或者您正在尋找的一些交易的命中率是否更高？當您談論強大的管道時，您能澄清一下嗎？只是交易活動有可能從深度回升嗎？您談論的是管道恢復到 2019 年的水平。

Sure. Thanks, Ryan. Yes, as I mentioned, I think we're encouraged by both the depth and quality of the pipeline recently. And its really across all channels that we focused on, so direct to company, ABL, and now we're starting to see some sponsor-led opportunistic M&A activity. So we're encouraged to see that.

當然。謝謝，瑞安。是的，正如我所提到的，我認為我們最近對管道的深度和品質感到鼓舞。它確實跨越了我們關注的所有管道，所以直接針對公司、ABL，現在我們開始看到一些贊助商主導的機會主義併購活動。所以我們很高興看到這一點。

I will say, as compared to Q2, where there was a pipeline, the quality is getting better. So we're continuing to be selective, and we'll always be selective and really focus our capital on the opportunities that we think are best for our shareholders. But it is across each of those channels. We're not seeing yet as a lot of new platform M&A from sponsors, rather more opportunistic M&A from existing portfolio companies. But still, again, I think the quality is up from what we saw, not only in Q2, but really throughout most of 2019.

我想說的是，與有管道的第二季相比，品質越來越好。因此，我們將繼續進行選擇性，並將始終進行選擇性，並將我們的資本真正集中在我們認為對股東最有利的機會上。但它是跨每個管道的。我們還沒有看到來自贊助商的大量新平台併購，而是來自現有投資組合公司的更多機會主義併購。但我仍然認為，品質比我們所看到的有所提高，不僅在第二季度，而且在 2019 年的大部分時間裡都是如此。

You guys have a -- do you guys have a preference? Or do you guys favor in this environment more deep value sort of rescue-financing deals? Given just the tumultuous market backdrop, and I would assume that those opportunities are probably going to come up quite a bit, and you can get obviously extremely good pricing in terms or would you guys want to more lean into more secular grower stories, companies that don't -- haven't really been affected by COVID downturn, but obviously, the structures in terms of those aren't going to be as favorable. Do you guys have a preference?

你們有一個──你們有偏好嗎？或者在這種環境下你們是否贊成更深層價值的救援融資交易？考慮到動蕩的市場背景，我認為這些機會可能會出現很多，而且你顯然可以獲得非常好的定價，或者你們是否希望更多地關注更世俗的種植者故事，即那些沒有——並沒有真正受到新冠疫情衰退的影響，但顯然，這些方面的結構不會那麼有利。你們有偏好嗎？

We really don't have a preference. I think the beauty of the platform is that the expertise of our people and it even goes across each of those channels. We're obviously very active in rescue financings from time to time when we think the opportunity set is good. And we also like to pursue growth opportunities for businesses that are growing greater than GDP, have secular tailwinds and tend to weather downturns, economic downturns better. So we really focus the opportunity set based on the core competencies of our team, which is very diverse.

我們確實沒有偏好。我認為這個平台的美妙之處在於我們員工的專業知識，甚至可以跨越每個管道。當我們認為機會很好時，我們顯然會不時地非常積極地參與救援融資。我們也喜歡為那些成長超過 GDP、具有長期順風並且能夠更好地抵禦經濟低迷的企業尋求成長機會。因此，我們確實根據我們團隊的核心能力來關注機會集，這是非常多樣化的。

Okay. Fair enough. And then just one last one. You mentioned really only one investment outside of the 2 retail ones you talked about has completed in a net-net. You don't expect any new defaults in the near term. I mean, that's surprising but, obviously, in a very positive way that you guys have a lot of confidence in your portfolio going forward.

好的。很公平。然後只有最後一張。您提到，除了您談到的兩項零售投資之外，實際上只有一項投資是在網路上完成的。您預計短期內不會出現任何新的預設值。我的意思是，這令人驚訝，但顯然，以一種非常積極的方式，你們對自己的投資組合的未來充滿信心。

Can you just talk about with that assertion you guys made, what is the economic backdrop that you guys are using as a base case to make that assertion? And then from a higher level, why do you think that your portfolio has held up so well and performed so much better than other BDCs thus far in this?

您能談談你們所做的斷言嗎？你們以什麼經濟背景作為基本情況來做出這一斷言？然後從更高的層面來看，為什麼您認為您的投資組合迄今為止在這方面表現得如此出色，並且比其他 BDC 表現得好得多？

Bo, let me hit some of that and then you can jump in or Fishy can jump in. Look, I think when you look at our portfolio, we didn't have -- we have very -- we had a small amount of cyclical exposure and cyclical business models typically have high fixed costs. And so that we avoided kind of the clinical cyclical business model generally.

Bo，讓我打一些，然後你可以跳進去，或者 Fishy 也可以跳進去。看，我認為當你看看我們的投資組合時，我們沒有——我們有非常——我們有少量的周期性風險，而週期性商業模式通常具有很高的固定成本。因此，我們通常避免了臨床週期性商業模式。

When you look at our top 3 industries, which include business services, financial services, but really fintech, and healthcare, which is really either pharma royalty financings or healthcare IT, you just had -- those typically had variable cost structures and a strong kind of less-cyclical exposure and strong secular tailwinds.

當您查看我們的三大行業（包括商業服務、金融服務，但實際上是金融科技）和醫療保健（實際上是藥品特許權融資或醫療保健IT）時，您會發現，這些行業通常具有可變成本結構和強大的成本結構。週期性風險較小且長期有利的因素。

And so to me, it was just a -- most of the outside retail, which obviously has been impacted, we were just set up to have kind of a cycle -- what we would call late-cycle mining portfolio construction or cycle-appropriate portfolio construction, means that might change over time. And so when we look at our portfolio, it's really a bottoms-up view versus a top-down view, i.e. slow recovery, V-shaped, U-shaped. It's really how these companies are doing. What are their forecasts? Are those realistic forecast? And so our view is really a bottoms-up view.

所以對我來說，這只是一個 - 大多數外部零售，顯然受到了影響，我們只是為了有一個週期 - 我們稱之為後期採礦投資組合建設或適合週期投資組合構建，意味著可能會隨著時間的推移而改變。因此，當我們審視我們的投資組合時，這實際上是一種自下而上的觀點與自上而下的觀點，即緩慢恢復，V形，U形。這些公司確實就是這樣做的。他們的預測是什麼？這些預測現實嗎？所以我們的觀點其實是一個由下而上的觀點。

I don't know, Bo or Fishy or any have anything to add, but it was really just business model and sector exposure.

我不知道 Bo 或 Fishy 或任何人有什麼要補充的，但這實際上只是商業模式和行業曝光。

I -- that's exactly right. I don't have a lot to add. I think we also had, as we mentioned in the script, we had a lot of really high-quality management teams that's focused on liquidity and appropriate cost structures early in the cycle, and that is accretive to our benefit as well.

我——完全正確。我沒有太多要補充的。我認為，正如我們在腳本中提到的，我們擁有許多真正高品質的管理團隊，他們專注於週期早期的流動性和適當的成本結構，這也增加了我們的利益。

Our next question comes from Finian O'Shea with Wells Fargo Securities.

我們的下一個問題來自富國銀行證券公司的 Finian O'Shea。

First question on new deals this quarter. There were a couple that are PIK paying. You historically shied away from that reasonably so for the BDC structure, but what makes these more suitable or safer than opportunities that might be very attractive if it weren't for their PIK structure?

關於本季新交易的第一個問題。有一對夫婦是 PIK 付錢的。對於 BDC 結構，您歷來都會迴避這種情況，但是什麼讓這些機會比如果沒有 PIK 結構可能非常有吸引力的機會更合適或更安全呢？

Yes. So look, TSLX and our affiliated funds, our growth platform originated those investments. And quite frankly, you hit on the nail on the head. Given the underlying business models that were growing at significant rates and the capital requirements for that growth, we did a -- we did structures that allowed the PIK. We're really bullish on the company, really bullish in the markets they serve, really bullish on the management teams. Unfortunately, the BDC -- the Sixth Street Specialty Lending only could take small amounts, given we have a policy about how much PIK we're willing to have in the book.

是的。所以看，TSLX 和我們的附屬基金、我們的成長平台發起了這些投資。坦白說，你說得一中要害。考慮到基礎業務模式正在以顯著的速度成長以及這種成長的資本要求，我們做了一個——我們做了允許 PIK 的結構。我們非常看好這家公司，非常看好他們所服務的市場，非常看好管理團隊。不幸的是，BDC——第六街專業貸款公司只能接受少量資金，因為我們有關於我們願意在書中擁有多少 PIK 的政策。

And so if those structures were not PIK structures, we would have had significantly more appetite for those in the BDC, but given our financial policy and given our risk limitations around PIK, they were relatively small size. Ian, what was the -- I think they were each like kind of $5 million or $7 million or something like that?

因此，如果這些結構不是 PIK 結構，我們會對 BDC 中的結構有更大的興趣，但考慮到我們的財務政策以及我們圍繞 PIK 的風險限制，它們的規模相對較小。伊恩，我想他們每人大概是 500 萬美元或 700 萬美元或類似的東西？

Yes, that's right.

恩，那就對了。

So that -- Bo, do you have anything to add there?

那麼——Bo，你還有什麼要補充的嗎？

No, I think you hit it on the head.

不，我認為你擊中了頭部。

I think frankly, it was $3.75 million, and it was a convertible note. And service channel was a $5 million investment at a 12% PIK. Again, those were much larger deals we have, but we thought they were very, very high risk-adjusted returns.

坦白說，我認為是 375 萬美元，而且是一張可轉換票據。服務通路投資額為 500 萬美元，PIK 為 12%。同樣，這些是我們擁有的規模更大的交易，但我們認為它們的風險調整回報非常非常高。

Quite frankly, those companies might need more capital in the future that have a -- that are not PIK nature. When they -- when growth slows, they become more mature and, quite frankly, one of the reasons why we actually made the co-invest even in small sizes. If they -- if you -- if we weren't in those capital structures, we would not be able to provide those financings on a go-forward basis when they become appropriate for the BDC, given that the rules around joint transactions and affiliated transactions with affiliated funds.

坦白說，這些公司未來可能需要更多的資本，但這些資本不具有 PIK 性質。當成長放緩時，它們會變得更加成熟，坦白說，這也是我們實際進行小規模聯合投資的原因之一。如果他們——如果你——如果我們不採用這些資本結構，那麼當這些融資適合 BDC 時，我們將無法繼續提供這些融資，因為有關聯合交易和附屬機構的規則與附屬基金的交易。

And so there -- we love them as a stand-alone investment. We also think there's going to be opportunity to put more capital in that are more appropriate for the BDC going forward.

因此，我們喜歡將它們作為一項獨立投資。我們也認為，未來將有機會投入更多更適合 BDC 的資金。

Okay. And another portfolio name, AvidXchange, you've had that for a while. And I think the growth platform also took part in an equity round or I'm not sure if there's a few capital structures there. But the BDC got a very small piece of it. There's 2 it looks like. Can you give us some color on the nature of that capital raise and why the very small BDC allocation?

好的。還有另一個產品組合名稱 AvidXchange，您已經使用它有一段時間了。我認為成長平台也參與了股權融資，或者我不確定那裡是否有一些資本結構。但 BDC 只得到了很小的一部分。好像有2個您能否向我們介紹一下此次融資的性質以及為什麼 BDC 分配額非常小？

So there was a Bo, correct me -- I think there were 2 pieces. There was a staple financing between a senior-secured facility and a redeemable pref with warrants, correct, Bo?

所以有一個 Bo，糾正我——我認為有 2 塊。優先擔保貸款和帶有認股權證的可贖回優先權之間存在主要融資，對嗎，Bo？

Correct.

正確的。

And you -- and there were a strip and so the redeemable pref with warrants was much larger than the senior-secured facility. So again, the exact same considerations that we discussed before.

而你——而且有一個地帶，所以帶有認股權證的可贖回優先權比高級擔保設施要大得多。再說一次，我們之前討論過的考慮因素完全相同。

AvidXchange is actually a kind of a more mature business. It's in the B2B payment space but much more mature business. But again, it came down to having the right -- having been appropriate for the BDC, which has a cash paid dividend as a liability that we're always thoughtful about.

AvidXchange其實是一種比較成熟的業務。它屬於 B2B 支付領域，但業務更為成熟。但同樣，這歸結為擁有權利——對於 BDC 來說是適當的，BDC 將現金支付股息作為我們一直深思熟慮的負債。

That's right. The only thing that I would add is that's a business that we've known well since 2015. We think it's excellent risk/reward, but again, sized appropriately given the PIK component.

這是正確的。我唯一要補充的是，這是一項我們自 2015 年以來就已熟知的業務。我們認為這是極好的風險/回報，但同樣，考慮到 PIK 組件，其規模也適當。

Our next question comes from Robert Dodd with Raymond James.

我們的下一個問題來自羅伯特·多德和雷蒙德·詹姆斯。

Just a kind of general question. I mean, obviously, in the prepared remarks, you brought up, obviously, the amount of stimulus that's been put in and that's one of the contributing factors to spreads retracing so much of the widening they went through before. So there's -- obviously, there's benefit to NAV on that.

只是一種一般性問題。我的意思是，顯然，在準備好的發言中，您顯然提到了所實施的刺激措施的數量，這是利差大幅回落之前經歷的擴大的影響因素之一。顯然，資產淨值在這方面有好處。

What do you think the risks are given how much private capital there still is out there as in all that rate is a result of this COVID issue that those spreads continue to retrace to NAV benefit, but potentially to the opportunity set getting excessively competitive, again, as it was, call it, last year, but before we had this COVID event.

考慮到仍有多少私人資本存在，您認為風險是什麼，因為所有這些利率都是新冠病毒問題的結果，這些利差繼續回撤至資產淨值收益，但可能再次導致機會集變得過度競爭可以這麼說，去年，但在我們發生這次新冠病毒事件之前。

Yes. So you hit it, Robert, as you always do, the good news and the bad news. The good news is the -- with the spread retracing, there has been a benefit to NAV, a benefit of the capital in the BDC space, a benefit to people not getting closed out, stakeholders not getting closed out of their option, i.e., having issues with -- from a regulatory framework or from lenders in the space. So that's the good news.

是的。所以你擊中了，羅伯特，就像你一直做的那樣，好消息和壞消息。好消息是——隨著利差回撤，資產淨值受益，BDC 領域的資本受益，人們不會被排除在外，利益相關者也不會被排除在外，即：存在來自監管框架或該領域貸方的問題。這就是好消息。

The bad news is, the question is has it truncated, that coupled with the amount of private credit dry powder, has it truncated the go-forward opportunity.

壞消息是，問題是它是否被截斷了，加上私人信貸乾粉的數量，它是否截斷了前進的機會。

I think -- is that the question?

我想──這是個問題嗎？

Yes.

是的。

Yes. So look, I would say it's surely -- it's most definitely, I wouldn't say, uber competitive. It's a lot less competitive than a year ago. We actually saw when you look at the data, you actually saw yields -- absolute yields, not only on a spread basis, but actually come up quarter-over-quarter, I think, in our book.

是的。所以，我想說，它肯定是——我不會說，它絕對是超級有競爭力的。與一年前相比，競爭已經減弱了很多。我們實際上看到，當你查看數據時，你實際上看到了收益率——絕對收益率，不僅是在利差的基礎上，而且我認為，在我們的書中，實際上是逐季上升的。

And so I think in -- so I think last yield amortized cost last quarter was 9.9%. It's at 10%. On a spread basis against LIBOR, it's much wider. The new investments we put in, in Q -- that we've put in Q3 to date have been much wider. And so it's surely not -- I don't think it's been -- it's surely not what it would have been if the Fed hadn't stepped in. There would have been a ton of issues across the BDC space, I think, and across -- generally across risk assets if the Fed didn't step in. I think we would have been very well positioned to take advantage of that.

所以我認為上個季度的攤餘成本收益率是 9.9%。是10%。以倫敦銀行間同業拆借利率 (LIBOR) 的利差計算，其範圍要廣得多。我們在第三季投入的新投資——迄今為止我們在第三季投入的投資範圍要廣泛得多。因此，如果聯準會沒有介入，情況肯定不會是這樣——我認為不會是這樣。我認為，如果聯準會不介入，整個 BDC 領域以及整個風險資產都會出現大量問題。我認為我們能夠很好地利用這一點。

But we would have had less investment capacity, we would have been more concerned about liquidity. So I think if it is what it is, I don't think that there is the go-forward opportunity set. At least, what we're seeing today has been completely truncated. And we feel like there's probably some -- there is some good opportunities out there. And we've executed on that in Q3.

但我們的投資能力會減少，我們會更關心流動性。所以我認為，如果情況確實如此，我認為不存在繼續前進的機會。至少，我們今天看到的已經完全被截斷了。我們覺得可能存在一些很好的機會。我們已經在第三季執行了這一點。

Mike, do you have anything to add, Fishy, I always try to throw Fishy in the mix, just to keep him on his toes. Fishy is on the West Coast.

麥克，你有什麼要補充的嗎，Fishy，我總是試著讓 Fishy 參與其中，只是為了讓他保持警惕。Fishy位於西海岸。

No. I have nothing.

不。我什麼都沒有。

Thanks. Nice value-add there, Fish.

謝謝。魚，有很好的附加價值。

If I could ask just to kind of bifurcate that a little bit, maybe, because to your point, spreads widened in Q3, but the biggest investment in Q3 was the extension of renewal, if you will, of the ABL with whose name I've written down so as I've misplaced it. So is that -- is the opportunity set, given ABL financing there's a much more specialized labor-intensive business. I mean, is that where the spreads and yields are staying wider versus in the traditional cash flow lending such that it is, given renewed activity there? Is there going to be an increased divergence between available returns in, for a lack of word, a specialized book versus a commodity lending book? And should we expect maybe the ABL book to grow faster as a result?

如果我可以問一點，也許，因為就你的觀點而言，第三季的利差擴大了，但第三季最大的投資是延長續約，如果你願意的話，我的名字是 ABL。已經寫下來了，因為我把它放錯地方了。這就是機會集，考慮到 ABL 融資，存在更專業化的勞動密集型業務。我的意思是，考慮到那裡的新活動，與傳統現金流貸款相比，利差和收益率是否保持在更大範圍？由於缺乏文字，專業書籍與商品借貸書籍的可用回報之間的差異是否會更大？我們是否應該期望 ABL 書籍會因此成長得更快？

Yes. I think that's a good question. So what I would say is that -- so we made 2 large investments in Q3. One was ABL deal, receivables financing and one was, which quite frankly, had very much wide spreads. It was complicated, had very much wide spreads historically available. And then one was a -- we don't call -- it's a cash flow loan, although it's a company that has high-recurring revenue embedded -- ERP like embedded in their customer base. So we think there's a second way out. And so it's not -- and so we don't think about we're not pure cash flow lenders in that sense.

是的。我認為這是一個好問題。所以我想說的是——所以我們在第三季進行了兩項大規模投資。一種是 ABL 交易，即應收帳款融資，坦白說，一種是價差非常大的交易。它很複雜，歷史上有非常廣泛的價差。然後一個是——我們不稱之為——這是一筆現金流貸款，儘管它是一家嵌入了高經常性收入的公司——就像嵌入在其客戶群中的 ERP 一樣。所以我們認為還有第二條出路。所以它不是——所以我們不認為我們不是這個意義上的純粹的現金流貸款人。

That loan, we had -- we got warrants. I think Bo, correct me if I'm wrong, 7% of the company is struck at the money. And so -- and it was done at probably 200 -- 150 to 200 basis points wider with more call protection than what would have been done pre-COVID.

那筆貸款，我們有──我們有認股權證。我想 Bo，如果我錯了，請糾正我，公司 7% 的人都被錢嚇到了。因此，與新冠疫情之前相比，利率可能擴大了 200 至 150 至 200 個基點，並提供了更多的呼叫保護。

Correct.

正確的。

And -- so look, I think you're going to see wider spreads across credit asset classes, and quite frankly, if lenders are not pricing stuff with wider spreads, they're effectively telling their investor base and telling their stakeholders that they see no uncertainty in the world. Like there's no -- like wider spreads or to compensate us, they compensate investors for uncertainty. And I can't imagine anybody in the world if they're being disciplined as it relates to allocating capital, doesn't think that uncertainty has increased significantly over the last 6 months.

而且- 所以看，我認為你會看到各種信貸資產類別的利差更大，坦率地說，如果貸方不以更寬的利差定價，他們實際上是在告訴他們的投資者基礎並告訴他們的利害關係人他們看到了世界上沒有不確定性。就像沒有一樣——例如擴大利差或補償我們，它們補償了投資者的不確定性。我無法想像世界上任何人如果在資本分配方面受到紀律處分，都不認為過去 6 個月不確定性顯著增加。

And so I expect that you'll see wider spreads or you should see wider spreads if people are doing their jobs and being fiduciaries to their stakeholders across the opportunity set. My guess is on the margin, you're going to see wider spreads for specialized kind of lending opportunities. Where there is complexity, you'll see more drastic because people, when they already have problems in their book, don't want to take on more kind of problems through complexity. But it would be shocking to me if people are trying not -- are pricing the same things as competitive as they were a year ago. A year ago, there was a lot less uncertainty. And again, you got to get paid for the uncertain world we're in.

因此，我預計您會看到更廣泛的利差，或者如果人們在整個機會集中做好自己的工作並成為利益相關者的受託人，那麼您應該會看到更廣泛的利差。我的猜測是，在一定程度上，您會看到專門類型的貸款機會的利差更大。在存在複雜性的地方，你會看到更加激烈的情況，因為當人們在書中已經有問題時，他們不想透過複雜性來解決更多類型的問題。但如果人們不嘗試將同樣的產品定價為與一年前一樣具有競爭力，那將讓我感到震驚。一年前，不確定性要少得多。再說一次，你必須為我們所處的不確定世界獲得報酬。

Our next question comes from Mickey Schleien with Ladenburg.

我們的下一個問題來自拉登堡的米奇·施萊恩 (Mickey Schleien)。

Yes. Glad to hear you're doing well. I sort of want to follow up on Robert's question and ask you about the market's tone, Josh. We're obviously in a yield-hungry world, and there's a lot of capital which is formed to invest in private debt and disintermediate the banks. And when we look at the forward LIBOR curve, which has been wrong many times, nevertheless, it implies that very low interest rates will persist for years. But like we've all talked about this morning loan spreads are tightening again. GDP looks like it will bounce back a lot in the third quarter with the economies reopening, obviously, from very poor results in the first half of the year.

是的。很高興聽到你做得很好。我有點想跟進羅伯特的問題並向你詢問市場的基調，喬許。顯然，我們正處於一個渴望收益的世界，並且有大量資本被用來投資私人債務並實現銀行脫媒。然而，當我們觀察遠期倫敦銀行同業拆借利率曲線時，它已經多次出現錯誤，這意味著極低的利率將持續多年。但就像我們今天早上都談到的那樣，貸款利差再次收緊。隨著經濟重新開放，GDP 看起來將在第三季大幅反彈，顯然，這是從上半年非常糟糕的業績中恢復過來的。

But after that, the forecast looks pretty weak. Which could keep the fed from tightening again. So this scenario, to me, seems to point to continued pressure on portfolio yields. A lot of that has been in place for a while, but as you pointed out, you generally maintained excellent portfolio yield.

但在那之後，預測看起來相當疲軟。這可能會阻止聯準會再次收緊貨幣政策。因此，對我來說，這種情況似乎表明投資組合收益率面臨持續壓力。其中許多已經實施了一段時間，但正如您所指出的，您通常保持著出色的投資組合收益率。

So I'd just like to step back for a moment and ask what factors in your origination process and perhaps your relationships provide you the ability to generate the loan terms that we see, particularly the fee structures that have helped to mitigate that pressure like we saw with Ferrellgas this quarter.

因此，我想退後一步，問一下您的發起過程中的哪些因素以及也許您的關係使您有能力生成我們所看到的貸款條款，特別是有助於減輕像我們這樣的壓力的費用結構本季與Ferrellgas 合作。

Yes. So look, I think, a, we're willing to -- I think there's a couple of different pieces of our business, a good question, Mickey. The first one is, like we have really deep expertise in some sectors. And we're involved in those sectors. We're involved in those ecosystems. And so I think as it relates to those -- as it relates to that piece of our business, we -- our counterparties don't think we're a commodity lender. They think they can get speed and certainty because we have deep knowledge in the nuances of how those industries and how those ecosystems work. And so I think that's most definitely been helpful on our sponsor business.

是的。所以，我認為，我們願意——我認為我們的業務有幾個不同的部分，這是一個很好的問題，米奇。第一個是，我們在某些​​領域擁有非常深厚的專業知識。我們參與了這些領域。我們參與了這些生態系統。因此，我認為，由於它與我們的業務相關，我們的交易對手並不認為我們是商品貸款人。他們認為他們可以獲得速度和確定性，因為我們對這些產業和生態系統如何運作的細微差別有深入的了解。所以我認為這對我們的贊助商業務絕對有幫助。

The second thing is that the -- we're not in the asset-gathering game. Like we're in the creating returns, serving our clients and creating returns for our stakeholders game. And so I think part of the spread widening, I mean, as far as supply tightening over time is people or competitors or the industry growing much faster than the actual true demand for capital from GDP.

第二件事是──我們沒有參與資產收集遊戲。就像我們正在參與創造回報、服務客戶並為利害關係人創造回報的遊戲一樣。因此，我認為利差擴大的部分原因是，隨著時間的推移供應趨緊，人們、競爭對手或產業的成長速度遠快於 GDP 對資本的實際需求。

And you've seen this in when you see -- when you look at historically over time, right, the corporate sector is massively levered. That corporate debt has grown faster than GDP. And so asset managers have leaned into growing assets and they've traded growing assets for creating high stakeholder returns. And so we surely have a different model on that front.

當你觀察一段時間的歷史時，你會看到這一點，對吧，企業部門的槓桿率很高。企業債務的成長速度快於國內生產毛額的成長速度。因此，資產管理公司傾向於不斷成長的資產，並用不斷成長的資產來換取利害關係人的高回報。因此，我們在這方面肯定有不同的模型。

And just -- and if people haven't looked at it, the corporate sector had -- it's going to be really interesting and actually, this is why I think this is why I'm quite bullish on the opportunity set. If you look up through 2007 pre-global financial crisis, the corporate sector had a lot less GDP than it did. The corporate debt as a percentage of GDP was a lot less than it did pre-COVID.

只是 - 如果人們還沒有看到它，企業部門已經看到了 - 這將非常有趣，實際上，這就是為什麼我認為這就是為什麼我非常看好機會集。如果你回顧 2007 年全球金融危機前的情況，你會發現企業部門的 GDP 比當時少很多。企業債務佔 GDP 的百分比比新冠疫情之前要低得多。

So the corporate sector started the cycle much more levered and, quite frankly, has issued much more debt in post-COVID than post-global financial crisis. And so you're going to end up with a massively over-levered corporate sector when things settle out with what I would expect to be relatively anemic growth, especially if you look at the LIBOR curve and which to me will create an opportunity for providing creative financings where there's complexity.

因此，企業部門在這一周期開始時的槓桿率要高得多，而且坦白說，在新冠疫情之後，企業部門發行的債務比全球金融危機之後要多得多。因此，當事情以我預期的成長相對疲軟的方式解決時，你最終會看到企業部門槓桿率大幅過高，特別是如果你看看倫敦銀行同業拆借利率(LIBOR)曲線，對我來說，這將創造一個提供複雜的創造性融資。

And then outside the sector expertise outside of our desire not to grow the business, but kind of shade creating stakeholder returns and serving our clients, we're willing to deal with complexity in another way that is really not a great investment from the investment manager standpoint because those assets tend to churn more. You can't build -- you can't stack assets because of the booked churns, and therefore, you can't grow fees, but they tend to be a great return for shareholders. We've been willing to do that, and we'll continue to do that for our stakeholders.

然後，在行業專業知識之外，我們不希望發展業務，而是希望創造利益相關者回報並為我們的客戶提供服務，我們願意以另一種方式處理複雜性，這實際上不是投資經理的一項偉大投資的立場，因為這些資產往往會流失更多。你不能建造——你不能因為預訂的流失而堆積資產，因此，你不能增加費用，但它們往往會給股東帶來巨大的回報。我們一直願意這樣做，並將繼續為我們的利害關係人這樣做。

I appreciate that. It's a great philosophy, and I really appreciate it. In light of what you just said, Josh, how do you see LIBOR floors trending on new deals over time. In other words, for the most part, everyone's deals are now benefiting from LIBOR floors that were negotiated 2 or 3 years ago, but LIBOR has crashed. Is the market being more accommodative? Or are lenders sort of sticking to their guns on LIBOR floors?

我很感激。這是一個偉大的哲學，我真的很欣賞它。Josh，根據您剛才所說的，您如何看待 LIBOR 下限隨著時間的推移新交易的趨勢。換句話說，在大多數情況下，現在每個人的交易都受益於兩、三年前談判達成的 LIBOR 下限，但 LIBOR 已經崩潰了。市場是否更加寬鬆？還是貸款機構在 LIBOR 地板上堅持己見？

Look, look, I think the -- if you look at our -- the vintages across our labor floors, 2020 vintages for LIBOR floors were really no different than 2019.

看，看，我認為——如果你看看我們的——我們勞工樓層的年份，LIBOR 樓層的 2020 年年份確實與 2019 年沒有什麼不同。

And post-COVID, is that still the case?

新冠疫情過後，情況還是如此嗎？

Yes.

是的。

Okay. Good. That's good to hear.

好的。好的。聽起來還不錯。

And quite frankly, again, like I actually think to Rick Shane's point is we sit the lowest on the cost curve, right? And effectively, we have lower fees, we have lower -- given our floating rate liability structure, we're the lowest on the cost curve. So I would -- I would if things work with the way they should work, people should be more focused than we are, and we should have -- there should be less pressure on keeping and maintaining net interest margin, which we should benefit from because we're the lowest on the cost curve.

坦白說，就像我實際上認為 Rick Shane 的觀點是我們處於成本曲線上的最低位置，對吧？實際上，我們的費用更低，考慮到我們的浮動利率負債結構，我們是成本曲線上最低的。所以我會——如果事情按照應有的方式進行，人們應該比我們更專注，我們應該——保持和維持淨息差的壓力應該更小，我們應該從中受益因為我們是成本曲線上最低的。

I understand. Josh, in terms of your particular expertise, obviously, one area is taking advantage of the tail spin in the brick-and-mortar retail space. And we've seen a number of bankruptcies in the last few days, and you've been very adept there. How do you see competition developing in that segment? Are there new entrants coming in to try to take advantage and dislocating deal terms? Or are you still in a position where you think you can get comfortable risk-adjusted returns there?

我明白。喬什，就您的特殊專業知識而言，顯然，一個領域是利用實體零售領域的尾部旋轉。在過去的幾天裡，我們看到了許多破產事件，而你在這方面表現得非常熟練。您如何看待該領域的競爭發展？是否有新進入者試圖利用並擾亂交易條款？或者您仍然認為您可以在那裡獲得舒適的風險調整回報嗎？

Yes. So the good -- there's most definitely more competition. The good news is there's more supply of opportunity as well.

是的。所以好的方面是——肯定會有更多的競爭。好消息是還有更多的機會。

Yes.

是的。

All right. So in that space, quite frankly, that's not good news, right? It's obviously very -- I'm being a little bit flip. It's obviously very -- it's when you take a big step back and you look at communities, and there's a lot of hourly workers that are being affected.

好的。因此，坦白說，在這個領域，這不是好消息，對吧？顯然我有點輕率了。顯然，當你退一步看看社區時，你會發現很多小時工都受到了影響。

But from an opportunity set, there's a lot more opportunities. There is slightly more capital formation, but it feels like there's good risk adjusted -- continues to be good risk-adjusted returns there as well.

但從機會來看，還有更多的機會。資本形成略有增加，但感覺風險調整後的回報良好——風險調整後的回報也仍然良好。

Our next question comes from the (inaudible) with Delphi Capital.

我們的下一個問題來自（聽不清楚）德爾福資本。

Yes. I have 2 questions. The first question is that how many loan modifications out of total borrowers did you make last quarter? And how are you going to deal with loan modification request? This is my first question.

是的。我有 2 個問題。第一個問題是，上季您對總借款人進行了多少次貸款修改？您將如何處理貸款修改請求？這是我的第一個問題。

And the second question is that I'd like to know the impairment -- loan impairment station last quarter. And if you have loan impairment, I'd like to hear from you the expected recoveries of those loan impairments.

第二個問題是我想知道上個季度的減損——貸款減損站。如果您有貸款減值，我想聽聽您對這些貸款減損的預期回收。

Let me answer the second question first. So the -- I would refer you to our schedule of investments. The schedule of investments have -- in BDCs, you have to mark your assets at fair value. And so those would incorporate recoveries and time lines, those fair values. So you -- and on Level 3 assets, those are mark-to-model, but again, they incorporate time and recoveries in the fair value. And then on Level 2 assets that incorporates effectively, the market's collective view on time lines and recoveries that for fair value, i.e., if a loan trades at $0.40, the recovery -- the market views that the recovery is something above $0.40 based on whatever the ultimate recovery based on an assumed time line. So I would refer you to schedule of investments and you can look at fair value.

我先回答第二個問題。因此，我建議您參考我們的投資計劃。在 BDC 的投資計劃中，您必須以公允價值標記您的資產。因此，這些將包括回收率和時間表，以及那些公允價值。因此，對於第 3 級資產，這些資產是按模型計價的，但同樣，它們將時間和回收率納入公允價值。然後，對於有效納入市場對時間線和回收率的集體看法（以公允價值計算）的第二級資產，即，如果貸款交易價格為0.40 美元，則回收率——市場認為回收率高於0.40 美元，基於任何因素基於假設時間線的最終恢復。所以我建議您參考投資時間表，您可以查看公允價值。

On the first question was there were effectively 3 -- there was no really uptick, and we constantly are doing amendments or waivers for companies given the structure of our loan agreements that relate to, quite frankly, if they open a -- typically, if they open up a new checking account, they need to come to us and get an amendment or waiver, or we need to get a control agreement in place.

關於第一個問題，實際上有3 個- 沒有真正的上升，考慮到我們的貸款協議的結構，我們不斷地對公司進行修改或豁免，坦率地說，這些協議涉及到他們是否開設- 通常，如果他們開設了一個新的支票帳戶，他們需要來找我們並獲得修改或豁免，或者我們需要達成控制協議。

And so generally, there was not a material uptick in amendments and waivers. The -- there was 3 COVID-related kind of -- or kind of what I would say, non-normal minutes and waivers. Two of those were Neiman and JCPenneys, which is obviously retail-related and has filed a bankruptcy that we're involved in. And the third one was a consumer company.

總的來說，修正案和豁免並沒有實質增加。有 3 個與新冠病毒相關的，或者我想說的，非常規的會議記錄和棄權。其中兩家是 Neiman 和 JCPenneys，它們顯然與零售有關，並且已經申請破產，我們也參與其中。第三家是消費品公司。

And I'm currently showing no further questions at this time. I'll turn the call back over to Joshua Easterly for closing remarks.

目前我沒有提出任何進一步的問題。我會將電話轉回約書亞·伊斯特利 (Joshua Easterly) 進行結束語。

Great. Well, look, we really appreciate people's time. And we hope everybody has a good remainder of the summer and a good Labor Day and clearly, it's going to continue to be interesting.

偉大的。嗯，看，我們真的很感激人們的時間。我們希望每個人都能度過一個美好的夏天和一個美好的勞動節，顯然，這將繼續變得有趣。

And for anybody who's a parent to figure out what's happening with their kids going to school and not going to school, and obviously, the investment environment continues to remain tricky, but we'll continue to work very hard for our stakeholders and for our clients in providing valuable creative solutions, so they can create value for their stakeholders, and we'll continue to work for our stakeholders.

對於任何為人父母的人來說，要弄清楚他們的孩子上學和不上學發生了什麼，顯然，投資環境仍然很棘手，但我們將繼續為我們的利益相關者和我們的客戶努力工作提供有價值的創意解決方案，以便他們能夠為利害關係人創造價值，我們將繼續為我們的利害關係人工作。

Thank you very much.

非常感謝。

Thanks, everyone.

感謝大家。

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。