NYSE:GSBD Goldman Sachs BDC Q3 2023 Earnings Report $10.63 +0.16 (+1.53%) Closing price 05/2/2025 03:59 PM EasternExtended Trading$10.57 -0.06 (-0.60%) As of 06:00 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Goldman Sachs BDC EPS ResultsActual EPS$0.64Consensus EPS $0.57Beat/MissBeat by +$0.07One Year Ago EPSN/AGoldman Sachs BDC Revenue ResultsActual Revenue$120.06 millionExpected Revenue$113.62 millionBeat/MissBeat by +$6.44 millionYoY Revenue GrowthN/AGoldman Sachs BDC Announcement DetailsQuarterQ3 2023Date11/7/2023TimeN/AConference Call DateWednesday, November 8, 2023Conference Call Time9:00AM ETUpcoming EarningsGoldman Sachs BDC's Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled on Friday, May 9, 2025 at 9:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Goldman Sachs BDC Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 8, 2023 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Good morning. This is Austin Eary, a member of the Investor Relations team for Goldman Sachs BDC, Inc. And I would like to welcome everyone to the Goldman Sachs BDC, Inc. 3rd quarter 2023 earnings conference call. Please note that all participants will be in listen only mode until the end of the call when we will open up the line for questions. Operator00:00:19Before we begin today's call, I would like to remind our listeners that today's remarks and may include forward looking statements. These statements represent the company's belief regarding future events that, by their nature, are uncertain and outside of the company's control. The company's actual results and financial condition may differ, possibly materially, from what is indicated in those forward looking statements as a result of a number of factors, including those described from time to time in the company's SEC filings. This audio cast is copyrighted material of Goldman Sachs BDC, Inc. That may not be duplicated, reproduced or rebroadcast without our consent. Operator00:00:57Yesterday, after the market closed, The company issued an earnings press release and posted a supplemental earnings presentation, both of which can be found on the homepage of our website at www. Goldmansachsbdc.com under the Investor Resources section and which include reconciliations of non GAAP measures to the most directly comparable GAAP measures. These documents should be reviewed in conjunction with the company's quarterly report on Form 10 Q filed yesterday with the SEC. This conference call is being recorded today, Wednesday, November 8, 2023, for replay purposes. I'll now turn the call over to Alex Gee, Co Chief Executive Officer of Goldman Sachs BDC, Inc. Speaker 100:01:39Thank you, Austin. Good morning, everyone, and thank you for joining us Q3 2023 earnings conference call. I'm here today with David Miller, our Co Chief Executive Officer Tucker Green, our Chief Operating Officer and David Pesa, our Chief Financial Officer. I'll begin the call by providing a brief overview of our 3rd quarter results before discussing the current market environment in more detail. I'll then turn the call over to David Miller and Tucker Greene to describe our portfolio activity and performance before handing it off to David Pesa to take us through our financial results. Speaker 100:02:14And then finally, we'll open the line for Q and A. So with that, let's get to our Q3 results. Our net investment income per share for the quarter was $0.67 an increase of 13.6% over the prior quarter's $0.59 Excluding the impact of asset acquisition accounting in connection with the merger with MMLC. Adjusted net investment income for the quarter was $0.64 per share, equating to an annualized net investment income yield on book value of 17.5%. The increase in investment income during the quarter was primarily driven by an increase in repayments and related accretion of discounted positions. Speaker 100:02:54As we announced after the market closed yesterday, Our Board declared a $0.45 per share dividend payable to shareholders of record as of December 29, 2023. This marks the company's 35th consecutive quarter of a $0.45 per share dividend totaling $15.75 per share since our IPO, excluding the special dividends we paid in 2021 post the merger with MMLC. Net asset value per share increased to $14.61 as of September 30, 2023, an increase of $0.02 from the end of the prior quarter. This was primarily attributable to the increase of net investment income, which is partially offset by an increase in unrealized losses for the quarter. On a fair value basis, 1st lien loans are 94.9% of the investment portfolio as of September 30, 2023, which speaks to our continued focus on maintaining a higher quality portfolio. Speaker 100:03:54Again, this quarter, we continue to invest only in directly originated 1st lien senior secured debt with no participation in the secondary market for broadly syndicated loans. As our portfolio continues to evolve, we believe it's particularly important to proceed with an abundance of caution with new underwritings as the economic cycle evolves over the next few quarters, while base interest rates are expected to remain higher for longer. We've previously expressed confidence that deal volumes will increase as the year progresses. During the Q3, We reviewed more than 150 investment opportunities across our Direct Lending Americas platform, which is sizably more and the opportunities seen to start the year. Although recent macroeconomic and geopolitical headlines may delay the timing of current deal closings by a quarter or so, we believe our existing pipeline of new opportunities remains extremely robust and we expect that 2024 will be an active year for private credit across the spectrum. Speaker 100:04:56Of note this quarter, GSBD was a lead lender in the refinancing of Blue Brick, one of the first investments we made post integration of the BDC platform with the broader Goldman Sachs Private Credit Complex. Rubrik is a provider of data backup and recovery software for enterprise customers and is an existing GSPD borrower. The latest transaction also involved the partial financing of an acquisition, which keeps the company's pro form a capital structure at a very attractive loan to value. RV Media is another example of a new origination in the 3rd quarter where the Goldman Sachs Private Credit platform was a lead lender and GSBD was able to participate in financing the buyout of the business by a new financial sponsor. GSPD stands to benefit from deploying into a more favorable vintage and high quality credits and where we are an incumbent, not only resetting economics to current market pricing, but setting covenants and documentation to align with our orientation towards downside risk management. Speaker 100:05:59With that, Let me turn it over to Speaker 200:06:01my Co CEO, David Miller. Thanks, Alex. During the quarter, we originated $168,200,000 in new investment commitments to 8 new and 5 existing portfolio companies. Sales and repayment activity totaled 257 point $4,000,000 primarily driven by the full repayment and exit of investments in 7 portfolio companies. In particular, we are pleased with the full repayment of 3 junior lien positions, which will allow us to continue redeploying capital in the new 1st lien oriented opportunities while remaining well within our leverage targets. Speaker 200:06:40Turning to portfolio composition. As of September 30, 2023, total investments in our portfolio were $3,400,000,000 at fair value, comprised of 97.5 percent senior secured loans, including 91.3% in 1st lien, 3.6% in 1st lien last out unit tranche and 2.6% in 2nd lien debt as well as the negligible amount in unsecured debt and 2.2% in a combination of preferred and common stock and warrants. As of quarter end, the company held investments in 137 portfolio companies operating across 38 different industries. The weighted average yield of our investment portfolio at cost at the end of Q3 was 11.6%. Amortized cost remained at 12.6% at the end of Q3. Speaker 200:07:44I will now turn the call over to Tucker Green to discuss our overall credit quality. Operator00:07:48Thank you, David. The weighted average net debt to EBITDA of the companies in our investment portfolio remained flat at 5.9 times in the 2nd quarter. Importantly, our portfolio companies have both top line and EBITDA growth year over year on a weighted average basis. The weighted average interest coverage of the companies in our investment portfolio at quarter end declined slightly from 1.56 to 1.51 times as so far rates continue to increase for the quarter. It is important to note that we calculate our coverage ratios based on current quarter metrics rather than on a trailing or last 12 month basis. Operator00:08:23Were we to use the LTM calculation, then our interest coverage ratio The companies in our investment portfolio would be 1.7x. We continue to monitor interest coverage sensitivity. The quarterly increase in SOFR is slowing and the Fed held rates flat, which creates more stability. We also see our interest coverage levels a reflection of legacy vintage exposure within the book that will continue to be supported with repayment activity and new deployment in the current environment. And finally, turning to asset quality. Operator00:08:53As of September 30, 2023, 2 new positions were placed on non accrual and one portfolio company was removed from non accrual during Q3. Investments on a non accrual status amount to 2.3% and 4.2% of the total investment portfolio at fair value and amortized costs respectively. Subsequent to quarter end, One additional name was placed on non accrual status. The size of this position does not constitute a meaningful change to the percentage stated above. I will now turn the call over to David Pesa to walk through our financial results. Speaker 300:09:28Thank you, Tucker. We ended the Q3 of 2023 with total portfolio investments at fair value of $3,400,000,000 outstanding debt of $1,900,000,000 and net assets of 1,600,000,000 Our ending net debt to equity ratio as of the end of Q3 was 1.13x, which continues to be below our target leverage range of 1.25x. At quarter end, approximately 46% of the company's total principal amount of debt outstanding was in unsecured debt and had $671,000,000 of capacity available under our secured revolving credit facility. Subsequent to quarter end, we executed an extension to the maturity of our secured revolving credit facility from May 2027 to October 2028. As a reminder, we have 2 separate unsecured notes due in February of 2025 and January of 2026 respectively. Speaker 300:10:27We plan to address these maturities at the appropriate time. Before continuing to the income statement, as a reminder, in addition to GAAP financial measures, We also reference certain non GAAP or adjusted measures. This is intended to make the company's financial results easier to compare to results prior to our October 2020 merger with MNLC. These non GAAP measures remove the purchase discount amortization impact from our financial results. For Q3, GAAP and adjusted after tax net investment income were $72,900,000 $69,700,000 respectively, as compared to $64,500,000 $63,100,000 respectively in the prior quarter. Speaker 300:11:10The increase in net investment income was primarily driven by repayment related activity that was discussed earlier. On a per share basis, GAAP net investment income was $0.67 And adjusted net investment income was $0.64 as compared to $0.59 $0.58 respectively last quarter. Distributions during the quarter remained consistent at $0.45 per share. Our spillover taxable income is approximately $124,300,000 or $1.13 on a per share basis, which we believe provides continued stability on our consistent dividend since inception. Net asset value per share on September 30, 2023 was $14.61 as compared to $14.59 last quarter. Speaker 300:12:01With that, I'll turn it back to Alex for closing remarks. Thanks, David. Speaker 100:12:05As you all are probably aware, On September 7, we announced that David tendered his resignation from his position at the company effective November 10 to pursue a new professional opportunity. On September 25, the Board appointed Stanley Matyshevsky as our CFO and Treasurer, effective immediately upon David's resignation on November 10. Stan has been at Goldman Sachs since 2013 and has been managing the product controllers team for our entire BDC platform. We want to congratulate and welcome Stan to our management team and wish David, all the best for the future. In conclusion, thank you all for joining us on our call. Speaker 100:12:44With that, let's open the line for Q and A. Speaker 400:12:48Thank And our first question will come from Maxwell Fritchard with Truist Securities. Speaker 500:13:20Hi, good morning. I'm calling in for Mark Hughes. And I joined a little late, so I'm sorry if you mentioned this, but can you touch on spreads you're seeing Currently a couple of other BDCs have mentioned a contraction in the quarter. Speaker 100:13:34Hey, good morning. Thanks a lot for the question. So we certainly saw a bit of further spread compression in the quarter. In the prior quarters, I think the average spread that we were seeing It was well into the 600s, probably the mid-600s on average. We've seen some spread compression now where for the kind of standard rate for the middle of the fairway credit is more like 600 basis points plus or minus. Speaker 100:14:03For some of the larger credits, you might see a bit more spread compression and for some of the more middle market credits, you might see a little bit wider, but it's around 600 is what we're seeing. Speaker 500:14:14Okay, thank you. And could you provide a figure for the percentage of your portfolio companies That are below 1x interest coverage ratio? Speaker 300:14:25It's a we haven't disclosed that in Speaker 100:14:28the past, But it's a very small percentage, single digit percentage. Okay. Thank you. Speaker 400:14:40Thank you. And our next question will Speaker 100:14:41come from Speaker 400:14:42Sean Paul Adams with Raymond James. Speaker 600:14:47Hey guys, good morning. Quick question, I know you guys talked a little bit about the 2nd lien book. I know you said you had some junior lien positions that exited. What's the status of the remainder of your 2nd lien book? What are you guys seeing on the pipeline? Speaker 200:15:07Yes, I mean from a pipeline It's not something we're actively pursuing. We look at them from time to time, but it's not the focus where we're expanding that. I think as we said in our prepared comments, Our first lien book is right around 95%, so the legacy book continues to run down and is a very small percentage of the overall portfolio today. Speaker 600:15:29Excellent. Thank you. And I didn't notice if you said the 2 new non accruals, which companies were those? Speaker 200:15:39Grassfield and Zodiac. Speaker 600:15:43Got you. Thank you. As far as far as Grazio, has there been any communication between the sponsor as far as the Speaker 100:15:53status of that? Yes. So we're in active discussions amongst the lender group with the sponsors behind the company, which is relatively sizable group lenders that are in the club. So we're in active discussions and this is a relatively sizable position for us. Drazio is, as you might know, it's a market leader in the online ecosystem, where many of the players in that ecosystem are experiencing some issues and we wouldn't be surprised if consolidation is the likely outcome, but more to come on that. Speaker 600:16:30Got it. Thank you. Speaker 400:16:40We'll take our next question from Derek Hewett with Bank of America. Speaker 700:16:46Good morning, everyone. Most of my questions were already asked and answered. But could you, from a modeling perspective, could you talk a little bit about what was the impact of the look back on Q3 results. How much on a per share basis was that? Thank you. Speaker 300:17:04Thanks for the question. This is the last Of the 2020 look back from COVID impact, it was roughly it was about $0.04 of cap To the per share calculation itself that was removed because of the look back. Speaker 100:17:23Okay, great. Thank you. Speaker 600:17:26Thank you. Speaker 400:17:29And that concludes today's question and answer session. Mr. Chi, at this time, I will turn the conference back to you for any additional or closing remarks. Speaker 100:17:38Thanks everyone for joining our call. We appreciate the interest and support and then we look forward to closing the year. Thank you very much. Thank you. Goodbye.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallGoldman Sachs BDC Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Goldman Sachs BDC Earnings HeadlinesInvestors turn to emerging market debt after Trump tariffs hit U.S. TreasurysApril 30, 2025 | cnbc.comWells Fargo & Company Has Lowered Expectations for Goldman Sachs BDC (NYSE:GSBD) Stock PriceApril 29, 2025 | americanbankingnews.comHere’s How to Claim Your Stake in Elon’s Private Company, xAII predict this single breakthrough could make Elon the world’s first trillionaire — and mint more new millionaires than any tech advance in history. And for a limited time, you have the chance to claim a stake in this project, even though it’s housed inside Elon’s private company, xAI.May 5, 2025 | Brownstone Research (Ad)Goldman Sachs BDC, Inc. Schedules Earnings Release and Conference Call to Announce First Quarter 2025 ResultsApril 8, 2025 | tmcnet.comGoldman Sachs BDC: Huge Dividend Yield, Yet Mediocre Overall ChoiceMarch 11, 2025 | seekingalpha.comGoldman Sachs BDC (GSBD) Q4 2024 Earnings Call TranscriptFebruary 28, 2025 | seekingalpha.comSee More Goldman Sachs BDC Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Goldman Sachs BDC? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Goldman Sachs BDC and other key companies, straight to your email. Email Address About Goldman Sachs BDCGoldman Sachs BDC (NYSE:GSBD) is a business development company specializing in middle market and mezzanine investment in private companies. It seeks to make capital appreciation through direct originations of secured debt, senior secured debt, junior secured debt, including first lien, first lien/last-out unitranche and second lien debt, unsecured debt, including mezzanine debt and, to a lesser extent, investments in equities. The fund primarily invests in United States. It seeks to invest between $10 million and $75 million in companies with EBITDA between $5 million and $75 million annually.View Goldman Sachs BDC ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025)Mplx (5/6/2025)Brookfield Asset Management (5/6/2025)Arista Networks (5/6/2025)Duke Energy (5/6/2025)Zoetis (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 8 speakers on the call. Operator00:00:00Good morning. This is Austin Eary, a member of the Investor Relations team for Goldman Sachs BDC, Inc. And I would like to welcome everyone to the Goldman Sachs BDC, Inc. 3rd quarter 2023 earnings conference call. Please note that all participants will be in listen only mode until the end of the call when we will open up the line for questions. Operator00:00:19Before we begin today's call, I would like to remind our listeners that today's remarks and may include forward looking statements. These statements represent the company's belief regarding future events that, by their nature, are uncertain and outside of the company's control. The company's actual results and financial condition may differ, possibly materially, from what is indicated in those forward looking statements as a result of a number of factors, including those described from time to time in the company's SEC filings. This audio cast is copyrighted material of Goldman Sachs BDC, Inc. That may not be duplicated, reproduced or rebroadcast without our consent. Operator00:00:57Yesterday, after the market closed, The company issued an earnings press release and posted a supplemental earnings presentation, both of which can be found on the homepage of our website at www. Goldmansachsbdc.com under the Investor Resources section and which include reconciliations of non GAAP measures to the most directly comparable GAAP measures. These documents should be reviewed in conjunction with the company's quarterly report on Form 10 Q filed yesterday with the SEC. This conference call is being recorded today, Wednesday, November 8, 2023, for replay purposes. I'll now turn the call over to Alex Gee, Co Chief Executive Officer of Goldman Sachs BDC, Inc. Speaker 100:01:39Thank you, Austin. Good morning, everyone, and thank you for joining us Q3 2023 earnings conference call. I'm here today with David Miller, our Co Chief Executive Officer Tucker Green, our Chief Operating Officer and David Pesa, our Chief Financial Officer. I'll begin the call by providing a brief overview of our 3rd quarter results before discussing the current market environment in more detail. I'll then turn the call over to David Miller and Tucker Greene to describe our portfolio activity and performance before handing it off to David Pesa to take us through our financial results. Speaker 100:02:14And then finally, we'll open the line for Q and A. So with that, let's get to our Q3 results. Our net investment income per share for the quarter was $0.67 an increase of 13.6% over the prior quarter's $0.59 Excluding the impact of asset acquisition accounting in connection with the merger with MMLC. Adjusted net investment income for the quarter was $0.64 per share, equating to an annualized net investment income yield on book value of 17.5%. The increase in investment income during the quarter was primarily driven by an increase in repayments and related accretion of discounted positions. Speaker 100:02:54As we announced after the market closed yesterday, Our Board declared a $0.45 per share dividend payable to shareholders of record as of December 29, 2023. This marks the company's 35th consecutive quarter of a $0.45 per share dividend totaling $15.75 per share since our IPO, excluding the special dividends we paid in 2021 post the merger with MMLC. Net asset value per share increased to $14.61 as of September 30, 2023, an increase of $0.02 from the end of the prior quarter. This was primarily attributable to the increase of net investment income, which is partially offset by an increase in unrealized losses for the quarter. On a fair value basis, 1st lien loans are 94.9% of the investment portfolio as of September 30, 2023, which speaks to our continued focus on maintaining a higher quality portfolio. Speaker 100:03:54Again, this quarter, we continue to invest only in directly originated 1st lien senior secured debt with no participation in the secondary market for broadly syndicated loans. As our portfolio continues to evolve, we believe it's particularly important to proceed with an abundance of caution with new underwritings as the economic cycle evolves over the next few quarters, while base interest rates are expected to remain higher for longer. We've previously expressed confidence that deal volumes will increase as the year progresses. During the Q3, We reviewed more than 150 investment opportunities across our Direct Lending Americas platform, which is sizably more and the opportunities seen to start the year. Although recent macroeconomic and geopolitical headlines may delay the timing of current deal closings by a quarter or so, we believe our existing pipeline of new opportunities remains extremely robust and we expect that 2024 will be an active year for private credit across the spectrum. Speaker 100:04:56Of note this quarter, GSBD was a lead lender in the refinancing of Blue Brick, one of the first investments we made post integration of the BDC platform with the broader Goldman Sachs Private Credit Complex. Rubrik is a provider of data backup and recovery software for enterprise customers and is an existing GSPD borrower. The latest transaction also involved the partial financing of an acquisition, which keeps the company's pro form a capital structure at a very attractive loan to value. RV Media is another example of a new origination in the 3rd quarter where the Goldman Sachs Private Credit platform was a lead lender and GSBD was able to participate in financing the buyout of the business by a new financial sponsor. GSPD stands to benefit from deploying into a more favorable vintage and high quality credits and where we are an incumbent, not only resetting economics to current market pricing, but setting covenants and documentation to align with our orientation towards downside risk management. Speaker 100:05:59With that, Let me turn it over to Speaker 200:06:01my Co CEO, David Miller. Thanks, Alex. During the quarter, we originated $168,200,000 in new investment commitments to 8 new and 5 existing portfolio companies. Sales and repayment activity totaled 257 point $4,000,000 primarily driven by the full repayment and exit of investments in 7 portfolio companies. In particular, we are pleased with the full repayment of 3 junior lien positions, which will allow us to continue redeploying capital in the new 1st lien oriented opportunities while remaining well within our leverage targets. Speaker 200:06:40Turning to portfolio composition. As of September 30, 2023, total investments in our portfolio were $3,400,000,000 at fair value, comprised of 97.5 percent senior secured loans, including 91.3% in 1st lien, 3.6% in 1st lien last out unit tranche and 2.6% in 2nd lien debt as well as the negligible amount in unsecured debt and 2.2% in a combination of preferred and common stock and warrants. As of quarter end, the company held investments in 137 portfolio companies operating across 38 different industries. The weighted average yield of our investment portfolio at cost at the end of Q3 was 11.6%. Amortized cost remained at 12.6% at the end of Q3. Speaker 200:07:44I will now turn the call over to Tucker Green to discuss our overall credit quality. Operator00:07:48Thank you, David. The weighted average net debt to EBITDA of the companies in our investment portfolio remained flat at 5.9 times in the 2nd quarter. Importantly, our portfolio companies have both top line and EBITDA growth year over year on a weighted average basis. The weighted average interest coverage of the companies in our investment portfolio at quarter end declined slightly from 1.56 to 1.51 times as so far rates continue to increase for the quarter. It is important to note that we calculate our coverage ratios based on current quarter metrics rather than on a trailing or last 12 month basis. Operator00:08:23Were we to use the LTM calculation, then our interest coverage ratio The companies in our investment portfolio would be 1.7x. We continue to monitor interest coverage sensitivity. The quarterly increase in SOFR is slowing and the Fed held rates flat, which creates more stability. We also see our interest coverage levels a reflection of legacy vintage exposure within the book that will continue to be supported with repayment activity and new deployment in the current environment. And finally, turning to asset quality. Operator00:08:53As of September 30, 2023, 2 new positions were placed on non accrual and one portfolio company was removed from non accrual during Q3. Investments on a non accrual status amount to 2.3% and 4.2% of the total investment portfolio at fair value and amortized costs respectively. Subsequent to quarter end, One additional name was placed on non accrual status. The size of this position does not constitute a meaningful change to the percentage stated above. I will now turn the call over to David Pesa to walk through our financial results. Speaker 300:09:28Thank you, Tucker. We ended the Q3 of 2023 with total portfolio investments at fair value of $3,400,000,000 outstanding debt of $1,900,000,000 and net assets of 1,600,000,000 Our ending net debt to equity ratio as of the end of Q3 was 1.13x, which continues to be below our target leverage range of 1.25x. At quarter end, approximately 46% of the company's total principal amount of debt outstanding was in unsecured debt and had $671,000,000 of capacity available under our secured revolving credit facility. Subsequent to quarter end, we executed an extension to the maturity of our secured revolving credit facility from May 2027 to October 2028. As a reminder, we have 2 separate unsecured notes due in February of 2025 and January of 2026 respectively. Speaker 300:10:27We plan to address these maturities at the appropriate time. Before continuing to the income statement, as a reminder, in addition to GAAP financial measures, We also reference certain non GAAP or adjusted measures. This is intended to make the company's financial results easier to compare to results prior to our October 2020 merger with MNLC. These non GAAP measures remove the purchase discount amortization impact from our financial results. For Q3, GAAP and adjusted after tax net investment income were $72,900,000 $69,700,000 respectively, as compared to $64,500,000 $63,100,000 respectively in the prior quarter. Speaker 300:11:10The increase in net investment income was primarily driven by repayment related activity that was discussed earlier. On a per share basis, GAAP net investment income was $0.67 And adjusted net investment income was $0.64 as compared to $0.59 $0.58 respectively last quarter. Distributions during the quarter remained consistent at $0.45 per share. Our spillover taxable income is approximately $124,300,000 or $1.13 on a per share basis, which we believe provides continued stability on our consistent dividend since inception. Net asset value per share on September 30, 2023 was $14.61 as compared to $14.59 last quarter. Speaker 300:12:01With that, I'll turn it back to Alex for closing remarks. Thanks, David. Speaker 100:12:05As you all are probably aware, On September 7, we announced that David tendered his resignation from his position at the company effective November 10 to pursue a new professional opportunity. On September 25, the Board appointed Stanley Matyshevsky as our CFO and Treasurer, effective immediately upon David's resignation on November 10. Stan has been at Goldman Sachs since 2013 and has been managing the product controllers team for our entire BDC platform. We want to congratulate and welcome Stan to our management team and wish David, all the best for the future. In conclusion, thank you all for joining us on our call. Speaker 100:12:44With that, let's open the line for Q and A. Speaker 400:12:48Thank And our first question will come from Maxwell Fritchard with Truist Securities. Speaker 500:13:20Hi, good morning. I'm calling in for Mark Hughes. And I joined a little late, so I'm sorry if you mentioned this, but can you touch on spreads you're seeing Currently a couple of other BDCs have mentioned a contraction in the quarter. Speaker 100:13:34Hey, good morning. Thanks a lot for the question. So we certainly saw a bit of further spread compression in the quarter. In the prior quarters, I think the average spread that we were seeing It was well into the 600s, probably the mid-600s on average. We've seen some spread compression now where for the kind of standard rate for the middle of the fairway credit is more like 600 basis points plus or minus. Speaker 100:14:03For some of the larger credits, you might see a bit more spread compression and for some of the more middle market credits, you might see a little bit wider, but it's around 600 is what we're seeing. Speaker 500:14:14Okay, thank you. And could you provide a figure for the percentage of your portfolio companies That are below 1x interest coverage ratio? Speaker 300:14:25It's a we haven't disclosed that in Speaker 100:14:28the past, But it's a very small percentage, single digit percentage. Okay. Thank you. Speaker 400:14:40Thank you. And our next question will Speaker 100:14:41come from Speaker 400:14:42Sean Paul Adams with Raymond James. Speaker 600:14:47Hey guys, good morning. Quick question, I know you guys talked a little bit about the 2nd lien book. I know you said you had some junior lien positions that exited. What's the status of the remainder of your 2nd lien book? What are you guys seeing on the pipeline? Speaker 200:15:07Yes, I mean from a pipeline It's not something we're actively pursuing. We look at them from time to time, but it's not the focus where we're expanding that. I think as we said in our prepared comments, Our first lien book is right around 95%, so the legacy book continues to run down and is a very small percentage of the overall portfolio today. Speaker 600:15:29Excellent. Thank you. And I didn't notice if you said the 2 new non accruals, which companies were those? Speaker 200:15:39Grassfield and Zodiac. Speaker 600:15:43Got you. Thank you. As far as far as Grazio, has there been any communication between the sponsor as far as the Speaker 100:15:53status of that? Yes. So we're in active discussions amongst the lender group with the sponsors behind the company, which is relatively sizable group lenders that are in the club. So we're in active discussions and this is a relatively sizable position for us. Drazio is, as you might know, it's a market leader in the online ecosystem, where many of the players in that ecosystem are experiencing some issues and we wouldn't be surprised if consolidation is the likely outcome, but more to come on that. Speaker 600:16:30Got it. Thank you. Speaker 400:16:40We'll take our next question from Derek Hewett with Bank of America. Speaker 700:16:46Good morning, everyone. Most of my questions were already asked and answered. But could you, from a modeling perspective, could you talk a little bit about what was the impact of the look back on Q3 results. How much on a per share basis was that? Thank you. Speaker 300:17:04Thanks for the question. This is the last Of the 2020 look back from COVID impact, it was roughly it was about $0.04 of cap To the per share calculation itself that was removed because of the look back. Speaker 100:17:23Okay, great. Thank you. Speaker 600:17:26Thank you. Speaker 400:17:29And that concludes today's question and answer session. Mr. Chi, at this time, I will turn the conference back to you for any additional or closing remarks. Speaker 100:17:38Thanks everyone for joining our call. We appreciate the interest and support and then we look forward to closing the year. Thank you very much. Thank you. Goodbye.Read morePowered by