Horizon Technology Finance Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
July 31, 2024

There are 10 speakers on the call.

Operator

Ladies and gentlemen, good morning, and welcome to the Horizon Technology Finance Corporation Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Megan Bacon, Director, IR and Marketing.

Operator

Please go ahead.

Speaker 1

Thank you, and welcome to Horizon Technology Finance Corporation's Q2 2024 Conference Call. Representing the company today are Rob Pomeroy, Chairman and Chief Executive Officer Jerry Michaud, President Dan Dvorsef, Chief Operating Officer and Chief Investment Officer and Dan Trolio, Chief Financial Officer. I would like to point out that the Q2 earnings press release and Form 10 Q are available on the company's website at horizontechfinance.com. Before we begin our formal remarks, I need to remind everyone that during this conference call, the company will make certain forward looking statements, including statements with regard to the future performance of the company. Words such as believes, expects, anticipates, intends or similar expressions are used to identify forward looking statements.

Speaker 1

These forward looking statements are subject the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ on a material basis from those projected in these forward looking statements. And some of these factors are detailed in the risk factor discussion in the company's filings with the Securities and Exchange Commission, including the company's Form 10 ks for the year ended December 31, 2023. The company undertakes no obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise. At this time, I would like to turn the call over to Rob Pomeroy.

Speaker 2

Welcome everyone and thank you for your interest in Horizon. Today, we will update you on our performance and our current overall operating environment. Dan DeBorsitz will take us through recent business and portfolio developments. Jerry will then discuss the current status of the venture lending market and Dan Trolio will detail our operating performance and financial condition. We will then take some questions.

Speaker 2

On our conference call last quarter, I began by speaking about the nature and current status of the Venture Lending business. Venture debt is driven by the demand for advanced technology and the support of risk taking venture investors. Is an exciting and rewarding endeavor. The Horizon platform has one of the most experienced team of venture lenders and we are passionate about the venture industry, the role of venture debt in the industry and the prospects of both. We seek investment opportunities that drive technological innovation by companies that are backed by committed investors who have already made significant investments.

Speaker 2

These development stage companies rely on additional investment to provide the financial resources to operate and further advance their technology and businesses. And venture debt provides a critical source of such additional capital. While we underwrite a venture loan, we base our investment thesis on a number of factors, including the strength of the enterprise's technology or market position, its ability to further develop its market and technology and its ability to grow its revenue or attract additional institutional capital or strategic interest. We understand that business plans and markets of these companies are subject to many kinds of detours and the agility of management teams and investors is necessary to navigate ever changing waters. As seasoned venture lenders, we know that plans and the environment are always changing, including jolts to the macro environment like the one we experienced last year with the Tech Bank crisis.

Speaker 2

Global unrest, higher interest rates and pandemics can upset business plans and require management, investors and venture lenders to pivot. We've experienced all of these impacts over the past several quarters, but we believe we are starting to see the beginnings of recovery in the venture ecosystem. We recognize these signs because we have seen and worked through negative cycles in the past. Our management team has an average tenure in the venture lending business of over 20 years. We have experienced supporting our companies through these difficult times and in maximizing the value of our stressed investments.

Speaker 2

The macro environment continues to hamper the recovery of certain stressed assets in our portfolio, but we continue to rely upon our expertise and take the appropriate actions to preserve the value of our investments as the markets begin to improve. Looking forward, as we always have through up and down cycles, we continue to be optimistic about Horizon's prospects. Our portfolio yield is strong and our earnings have covered our distributions for over 6 years. Our pipeline is growing with quality new customer opportunities. We have strengthened our liquidity and balance sheet.

Speaker 2

And the technology markets are active and in need of the debt investments we are uniquely able to provide. This is the essence of the venture lending model. I will now turn the call over to Dan, Jerry and Dan to give you the details of our Q2 results and progress. We appreciate your continued interest and support in the Horizon Technology Finance platform. Dan?

Speaker 2

Thanks, Rob, and good morning to everyone.

Speaker 3

Our portfolio size reduced in the Q2 to $647,000,000 as modest originations were more than offset by prepayments and normal portfolio amortization as well as fair value adjustments. In the Q2, we funded 4 debt investments totaling $11,000,000 one of which was to a new portfolio company and the remainder to existing portfolio companies. As we previously anticipated, the market for quality new venture loans remained soft for much of the first half of the year, resulting in fewer prospective lending opportunities in Q2. As such, our focus in the second quarter was to carefully seek opportunities and continue to focus on supporting our existing portfolio. More recently, we're seeing increased market activity and we are building our pipeline with companies across our target sectors, which possess disruptive technology in large and important markets and are supported by quality investors who have made recent investments.

Speaker 3

As a result, while the portfolio reduced in size in Q2, we have made considerable progress on some excellent new opportunities, including several awarded transactions, which we are currently underwriting and documenting. We are increasingly confident that we will return to portfolio growth beginning in Q3. That said, we will always be disciplined in our approach to originating loans to new companies. We will not chase growth for the sake of growth. During the quarter, we experienced one loan prepayment totaling $34,000,000 in prepaid principal.

Speaker 3

Since the end of the quarter, in July, we also received 3 prepayments totaling $30,000,000 These recent prepayments are mostly driven by refinancing activity, including several refinancings resulting from positive revenue performance, allowing the borrowers to graduate from venture debt into more traditional and lower cost forms of debt financing. This is an expected and positive part of the venture debt cycle. Unfortunately, we are not yet seeing prepayments driven by IPOs and M and A activity, which would be a strong signal that the debt and equity markets are returning to more historical behavior. Our onboarding debt investment yield of 13

Speaker 4

on boarding debt investment yield of 13.7% during the Q2 remained high compared to our historic levels.

Speaker 3

We expect to continue to generate strong on boarding yields with our current pipeline of opportunities, further demonstrating our capabilities in structuring and pricing transactions to continue to produce strong net investment income. Our debt portfolio yield of 15.9% for the quarter was once again one of the highest yielding debt portfolios in the BDC industry. Our ability to generate these industry leading yields continues to be a testament to the profitability of our venture lending strategy and our execution of that strategy across various market cycles and interest rate environments. As of June 30, we held warrant and equity positions in 99 portfolio companies with a fair value of $29,000,000 Structuring investments with warrants equity rights is a key component of our venture debt strategy and a potential generator of shareholder value. In the second quarter, we closed $13,000,000 in new loan commitments and approvals and ended the quarter with a committed and approved backlog of $138,000,000 compared to $168,000,000 at the end of the Q1.

Speaker 3

We also are currently underwriting a number of new transactions expected to fund during the Q3. We believe our pipeline combined with our committed backlog with most of our funding commitments subject to companies achieving certain key milestones provides solid base to prudently grow our portfolio. As of quarter end, 88% of the fair value of our debt portfolio consisted of 34 rated debt investments compared to 90% on March 31. 12% of the fair value of our portfolio was rated 201, up from 10% on March 31. We are working very closely on our stressed investments in order to maximize additional recoveries, though it is admittedly a historically difficult environment to do so.

Speaker 3

We continue to collaborate with all of our management teams, investors and stakeholders to help navigate this challenging period. To summarize, we are optimistic about sourcing and originating new venture loans to grow our portfolio in the coming quarters. The current portfolio continues to benefit from the interest rate environment and we will continue to work with our borrowers to maximize outcomes. With that, I'll turn it over to Jerry for a look at that overall venture industry and current environment.

Speaker 5

Thank you very much, Dan. Turning now to the venture capital environment. According to pitch book, approximately $56,000,000,000 was invested in VC backed companies in the Q2, the highest total over the past 8 quarters. However, the increase was principally due to a couple of outsized deals and the overall pace of VC investment remained well short of 2021 and 2022 lows. The most challenging issue in the venture ecosystem right now is a significant lack of exit opportunities for VC backed tech and life science companies.

Speaker 5

Limited partners and VC funds are not getting capital returned and are very reluctant to invest more in venture capital funds. According to PitchBook, VC funds are presently managing or have access to approximately $1,200,000,000,000 of LP capital. While there have been a few outsized exits over the last 12 months, they are not reflective of the overall market and do not move the needle on the enormous backlog of VC backed companies that would like to find an exit. While valuations have declined significantly over the past 24 months, they have not yet created excitement or momentum on the M and A and IPO front. Until the M and A and IPO markets truly open up for VC backed companies, the rest of the VC ecosystem, including investments in capital raising will be somewhat muted.

Speaker 5

That said, there are recent positive economic indicators leading into Q3, including the rate of inflation decreasing to 3% in July, while the U. S. GDP grew 2.8%, which barring our reversal will likely result in a lowering of interest rates in the second half of twenty twenty four. To that end, we believe the combination of lower interest rates and a significant reduction in the valuation of VC backed tech and life science companies over the last two years may result in a vastly improved M and A market in the second half of twenty twenty four or early 2025. Generally, when M and A markets improve, the IPO market for tech and life science companies accelerates as IPO investors become more optimistic and seek to participate in high quality tech and life science IPOs.

Speaker 5

Additionally, VC fundraising benefits from a lower interest rate environment and a more robust M and A market. VC fundraising in Q2 of $28,000,000,000 while well off fundraising levels of 2021 and 2022 did reflect a significant increase over Q1 fundraising levels of approximately 10,000,000,000 dollars Again, should M and A activity improve, it may allow VC funds to begin to return capital to VC Limited Partners, which could improve the fundraising environment before the end of the year. While VC investment activity was slow in Q2, VC firms did continue to invest in new AI tech companies as well as healthcare service companies that are using enhanced technology capabilities to provide improved and lower cost healthcare services to the healthcare market. In terms of market conditions for new venture loan investments, we are optimistic about the high quality venture debt opportunities that we have screened or vetted, which provide us with potential new investments in the weeks months ahead. Our pipeline remains robust at $1,700,000,000 as of today, a testament to our reputation, brand and sourcing capabilities.

Speaker 5

We are increasingly confident that we will return to portfolio growth in the back half of this year. To sum up, while we will continue to navigate through the ever changing VC environment, we remain focused on credit quality and providing our portfolio companies with support to ensure optimal outcomes. But just as importantly, we are committed to sourcing high quality investment opportunities to grow our portfolio in the second half of twenty twenty four in order to ensure we generate solid NII for our shareholders and build additional long term value. With that, I will now turn the call over to Dan Trolio.

Speaker 6

Thanks, Jerry, and good morning, everyone. I'll start with a review of our efforts to strengthen our balance sheet and capital structure in the quarter and then I'll provide a review of our 2nd quarter results. We took significant steps to enhance our capital resources in the quarter. First, we completed amendments to our key bank and New York Life credit facilities, reducing our cost of capital, increasing our credit availability and extending our investment periods. In addition, we added a new $100,000,000 credit facility, which increases our overall capacity.

Speaker 6

To be able to match the new debt capacity with equity, we continued to opportunistically access our ATM program as we successfully and accretively sold over 1,500,000 in shares in the quarter, raising $17,000,000 We believe these actions will allow us to grow the portfolio in the coming quarters. As of June 30, we had $150,000,000 available liquidity consisting of $117,000,000 in cash and $33,000,000 in funds available to be drawn under our existing credit facilities. We currently have no borrowings outstanding under our $150,000,000 KeyBanc credit facility $181,000,000 outstanding on our $250,000,000 New York Life credit facility and $50,000,000 outstanding on our new one $100,000,000 Nuveen credit facility, leaving us with ample capacity to grow the portfolio. Our debt to equity ratio stood at 1.36:one as of June 30 and netting out cash on our balance sheet, our net leverage was 1:one, which is well within our target leverage. Based on our cash position and our borrowing capacity on our credit facilities, our potential new investment capacity as of June 30 was $386,000,000 Turning to our operating results.

Speaker 6

We had another solid quarter from an NII standpoint, once again generating NII that more than covered our distributions. For the Q2, we earned investment income of $26,000,000 compared to $28,000,000 in the prior year period, primarily due to lower interest income on our debt investment portfolio. Our debt investment portfolio on a net cost basis stood at $675,000,000 as of June 30 compared to $720,000,000 as of March 31, 2024. For the Q2 of 2024, we achieved onboarding yields of 13.7% compared to 13.4% achieved in the Q1. Our loan portfolio yield was 15.9% for the 2nd quarter compared to 16.3% for last year's Q2.

Speaker 6

Total expenses for the quarter were $12,400,000 compared to $11,900,000 in the Q2 of 2023. Our interest expense increased to $7,900,000 from $7,200,000 in last year's Q2 due to higher interest rates on our borrowings. Our base management fee was $3,000,000 down from $3,200,000 in the prior year period. We had no performance based incentive fee in the 2nd quarter as we continue to experience the deferral of incentive fees otherwise earned by advisor in the quarter under our incentive fee cap and deferral mechanism. The deferral was driven by net unrealized losses on our portfolio.

Speaker 6

We expect deferrals to end in the back half of twenty twenty four. Net investment income for the Q2 of twenty twenty four was $0.36 per share compared to $0.38 per share in the Q1 of 2024 and $0.54 per share for the Q2 of 2023. The company's undistributed spillover income as of June 30 was $1.28 per share. We anticipate that the size of our portfolio along with the portfolio's elevated interest rates and our predictive pricing strategy will enable us to continue generating NII that covers our distribution over time. Given the current macro environment and although we did have a solid July in terms of prepayments, we expect prepayment activity will remain modest in the near term.

Speaker 6

To summarize our portfolio activities for the Q2, new originations totaled $11,000,000 which were offset by $12,000,000 in scheduled principal payments and $45,000,000 in principal prepayments and partial paydowns. We ended the quarter with a total investment portfolio of $647,000,000 We expect to return to growing the portfolio in the second half of the year. At June 30, the portfolio consisted of debt investments in 54 companies with an aggregate fair value of $609,000,000 and a portfolio of warrant, equity and other investments in 103 companies with an aggregate fair value of 38,000,000 dollars Based upon our outlook, our Board declared monthly distributions of $0.11 per share for October, November December 2024. We remain committed to providing our shareholders with distributions that are covered by our net investment income over time. Our NAV as of June 30 was $9.12 per share compared to $9.64 as of March 31, 2024 and $11.07 as of June 30, 2023.

Speaker 6

The $0.52 reduction in NAV on a quarterly basis was primarily due to our paid distributions and adjustments to fair value, partially offset by net investment income and accretive sales equity. As we've consistently noted, nearly 100 percent of our outstanding principal amount of our debt investments bear interest at floating rates with coupons that are structured to increase if interest rates rise with interest rate floors. This concludes our opening remarks. We'll be happy to take questions you may have at this

Operator

time. Thank you. Ladies and gentlemen, we will now be conducting a question and answer Our first question is from the line of Douglas Harter with UBS. Please go ahead.

Speaker 7

Hi. This is actually Corey Johnson on for Doug. So this quarter, 2 rated loans went from 1 to 4 loans and 1 rated loans went from 4 to 5.

Operator

Could you just talk a little bit about

Speaker 7

the reasons for some of the downgrade?

Speaker 3

Sure, Corey. This is Dan Dvorcet. Nice to speak with you. So in our portfolio and in the market right now, it's challenging sometimes to get rounds completed. Some of our deals are and some of the names on that list are in the process of raising money or getting acquired.

Speaker 3

They have disrupted products and technology in large markets and they are definitely innovating. But there is in cases where there is some delays or in commercialization or some delays in R and D, where in a more normalized or robust market, investors might fund through that and get to the other side. In today's market, those rounds are a bit more challenging to come by. That's particularly true in cases where there are multiple investors in the syndicate and they might have some different priorities or different challenges that they're seeking. So even if there are some investors that are supportive and willing to invest, if is 1 or 2 in the syndicate that are having challenges, pulling those rounds together can be a bit of a challenge.

Speaker 3

So we're seeing that and we're working with these companies to get them properly capitalized, so that they can execute on their plan. So that's kind of the overarching primary reason is most of them are a function of the macro funding environment.

Speaker 7

Thank you. And just one more question. And you had also mentioned earlier that you guys are seeing more activity in markets. Are there any particular sectors in which you're starting to see some more activity?

Speaker 3

It's really the pipeline is as we said in the remarks, it's really quite across our sectors of technology, life science, healthcare services, sustainability. It's quite it's really across those sectors. We are seeing a lot of use of AI in a number of those sectors. You have to be careful to make sure that they're actually using that for business reasons and not just using it as a buzzword, but we're seeing a lot of AI enabled technology and sustainability in healthcare, certainly in life science. So, it's really a cross section of our markets.

Speaker 7

Thanks for taking my question.

Operator

Thank you. Our next question comes from the line of Paul Johnson with KBW. Please go ahead.

Speaker 8

Yes, good morning. Thank you for taking my questions. In terms of the challenged companies in the portfolio, I mean, in your opinion, is the deterioration that you have seen, has that what has driven that for the most part? Is it just kind of been this lack of exit opportunities or lack of kind of available financing or as you were mentioning earlier, has it really been this LP kind of disruption holding up potential refinancing rounds, etcetera? What has kind of been the biggest, I guess, challenge with some of these new NOC rules?

Speaker 3

So I think you hit the nail on the head again there. The lack of exit markets, lack of IPOs, although they're starting to happen, but we need a bunch more. And the reduction in strategic M and A bleeds into the willingness and capability of the VCs to continue to fund across their portfolio. So it's really the exit markets drive a lot of behavior across the ecosystem in terms of funding, in terms of LPs, in terms of companies that are in need of cash being able to access it. So the exit markets are the macro and then that leads into deal by deal specifics.

Speaker 8

Thanks for that. And I mean in terms of all that, I mean how would you I guess describe the difference in performance here, or perhaps the state of its current recovery in terms of kind of later stage versus earlier stage companies? Is there a big difference there? Or

Speaker 3

So that's a really interesting question. I'd say, in general, earlier stage companies that have yet to prove their business model on a unit economic basis, but have strong products, which would traditionally be supported are having a bit more challenges than the later stage companies that are growing and have unit economics, but are still burning capital. Those tend to be a bit more successful in the capital raise or exits, but that's not universal by any means.

Speaker 8

Got it. Appreciate that. And then, I guess moving over kind of to the quarter and to the results, I mean how should investors I guess be thinking about earnings given you're at $0.36 this quarter without the incentive fee if we add that back in that could potentially put NII below the dividend although that may not come into play maybe until next year depending on how the total return hurdle works out. But how should investors kind of be thinking about earnings as we move forward? And if we get kind of what you're talking about recovery in M and A, potentially less pressure on downward valuations, should we expect earnings to pick up from here?

Speaker 8

Or how should we think about that?

Speaker 6

So, yes, I would look at that based on the portfolio size and what we've been we've talked about year over year is the venture debt model assumes prepayments every quarter and prepayments have been picking up from the last couple of quarters than it compared to the prior year. So this run rate is kind of where you could expect it, but it's definitely determined based on pre payments. So it could fluctuate quarter over quarter.

Operator

Hi, Paul. This is the operator.

Speaker 8

Sorry about that. I was on mute there. Last one I would ask there is just kind of in general But let's just end it there. That's all for me. Thank you.

Operator

Thank you. Our next question comes from the line of Bryce Roe with B. Riley Securities. Please go ahead.

Speaker 9

Thank you. Appreciate the time here. Maybe wanted to ask about some of the prepared remarks you made in terms of second half pickup and trying to maybe size up what that could look like. I mean, obviously, you've had some prepayment activity here in the Q3. So wanted to get a feel for how that second half pickup could look.

Speaker 9

Is it kind of is it dependent on rate cuts or a strengthening of the economy? And then wanted to ask a couple other questions after you answer that. Thanks.

Speaker 5

Hi, Bryce. This is Jerry Michaud. I'm going to partially answer it and I'm going to let Dan jump in with some actual numbers here. So we have been signaling in the 1st and second quarter that we wanted to basically hold our fire and make sure markets were actually starting to make a significant turn relative to the venture capital ecosystem and that's what we've done. And so that's what you have seen so far.

Speaker 5

However, as we've indicated in our remarks, we believe the second half is going to be a significantly better environment overall for venture lending. And in that regard, and again, I'll let Dan give you some numbers here. But I think we noted we had we've already had about $30,000,000 in prepayments already in July, but we've also had fundings that have exceeded that in July. So and we have a very good pipeline. So both in awards, transactions that being unwritten, additional commitments we put in the portfolio.

Speaker 5

So we do expect a much stronger second half relative to our just to our own environment. What we're doing here at Horizon, we're seeing quality investments. And again, I'll let Dan talk a little bit more about that. But so in addition to prepayment activity, which does generate additional fee income as Dan Trolio mentioned, we're also expecting fairly reasonable growth in the portfolio over the second half. So we're much more bullish here as we start the second half of the year.

Speaker 5

I mean, I think it goes almost without saying, but I'll say it anyway, if interest rates do go lower in the second half of the year, I think that that's going to really open up the overall VC ecosystem and we're going to start seeing better exits. We know we have a lot of late stage companies in our own portfolio that are looking for exits. So we're pretty optimistic about that. But I'm going to let Dan give you a little more info on that.

Speaker 3

Sure, Jerry. Bryce, so just specifically, so over the last kind of month or 2 since the middle of June to really yesterday, we've received 7 awards for a total of over $160,000,000 $170,000,000 of total commitments. A good portion of that $100,000,000 $125,000,000 or so would fund could fund in Q3 if they make it all the way through our process. Those deals, as I said earlier, are across our sectors. It's a combination of some portfolio opportunities for deals that are doing well, either current or previous portfolio companies as well as new deals.

Speaker 3

So we and we have a pipeline of near term proposals out there that we think will add to that number over the coming weeks. So we funded 1 yesterday. There's a few more that are scheduled to fund in the coming weeks. So that's just some additional detail that put some specifics around where we are from a pipeline basis.

Speaker 9

Excellent. That's helpful. And so when we kind of think about, I mean, you all have been pretty proactive from a capital structure perspective. You're sitting on a bunch of cash. I mean, I don't know if this is a record level of cash in terms of percentage of assets, but I would imagine it's pretty close.

Speaker 9

Still raising equity on the ATM, you've got the new credit facility. So just curious with that with those potential fundings, how should we think about the balance sheet? How will you use the cash to push it down? Will you continue to raise equity on the ATM? And then and or would you draw some on the credit facilities to fund?

Speaker 9

Just trying to think about all those dynamics.

Speaker 6

Yes, sure. That would probably I would say all of the above. First part of that process would be to use the cash on the balance sheet. And then when we think about our debt capital and our equity capital and what we have available, We look to what we have lined up for funding in the quarter and what we need. And so we'll continue to pull each one of those levers as needed.

Operator

Okay.

Speaker 9

And then maybe last one for Dan. There's a subsequent event in the Q with a look to be a restructuring or a transfer of the Nexi investment. Can you talk about what that's going to look like in terms of debt versus equity? Did you swap some there to get equity or are the debt obligations still out there?

Speaker 3

Yes. Thanks, Bryce. So again, Dan Dvoracek. So yes, Nexi was acquired out of the Canadian port process by investor group that is really experienced buyer and operator of construction technology companies. Our loan is we have a we got a small amount of cash and some senior debt, but the going forward, we have primarily both preferred and common equity positions and we are supporting the buyer as they execute their plans.

Operator

Our next question is from the line of Christopher Nolan with Ladenburg Thalmann. Please go ahead.

Speaker 4

Hey, guys. On Bryce's question on leverage, what flexibility do you have to use cash to pay down the New York Life facility or this new Nuveen facility?

Speaker 6

These are structured financing. There is more flexibility in the New York Life facility than there is in the Nuveen facility, but we do have the ability to pay down and draw up again.

Speaker 4

Okay. And then given you have some all the extra cash and a lot of moving pieces, but any opportunity to buy your 2026 or 2027 notes from the market?

Speaker 6

Yes. I mean, we do have the opportunity to do that. However, those are priced fairly nicely, the 4.875.25. So it makes more sense to leave it out today based on what we're putting our debt investments on and the spread we're getting between those.

Speaker 3

Okay. And did you guys mention what the spillover was in the quarter?

Speaker 6

Yes, it's a $1.28 dollars

Speaker 4

Okay. That's it for me. Thank you.

Speaker 6

Thank you.

Operator

Thank you. Our next question is from Paul Johnson with KBW. Please go ahead.

Speaker 8

And just one more. Can you just tell me what percent of your companies in the portfolio are the sole, the lead, I guess the sole lender in that company versus being partner or lender perhaps?

Speaker 3

You broke up there a little Paul. Can you repeat that? I'm sorry, I didn't hear the question.

Speaker 8

I was just asking, what percent of your portfolio companies are you the sole or kind of lead lender in that company as opposed to being partnered with another lender?

Speaker 3

So there are there's a portion of our portfolio where we are partnered or sub to bank lendings, primarily revolvers. But in terms of our particular position, we are almost always the sole lender, where about 75% or approximately 75% of our deals are senior in the cap table with no bank partner.

Speaker 8

Got it. Thank you very much. That's all for me.

Operator

Thank you. Ladies and gentlemen, there are no further questions. I would now hand the conference over to Robert Pomeroy, Chairman and CEO. Please go ahead, sir.

Speaker 2

Thank you all for joining us this morning. We appreciate your continued interest and support in Horizon. We look forward to speaking with you again soon. This will conclude our call.

Operator

Thank you. The conference of Horizon Technology Finance Corporation has now concluded. Thank you for your participation. You may now disconnect your lines.

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Horizon Technology Finance Q2 2024
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