MidCap Financial Investment Q1 2026 Earnings Report

MidCap Financial Investment EPS Results

• Actual EPS: -$0.30
• Consensus EPS: $0.36
• Beat/Miss: Missed by -$0.66
• One Year Ago EPS: N/A

MidCap Financial Investment Revenue Results

• Actual Revenue: ($17.79) million
• Expected Revenue: $74.62 million
• Beat/Miss: Missed by -$92.41 million
• YoY Revenue Growth: N/A

MidCap Financial Investment Announcement Details

• Quarter: Q1 2026
• Date: 5/6/2026
• Time: After Market Closes
• Conference Call Date: Thursday, May 7, 2026
• Conference Call Time: 8:30AM ET

MidCap Financial Investment (NASDAQ:MFIC) (NASDAQ: MFIC) is a business development company that provides financing solutions to middle-market companies across the United States. The firm specializes in direct lending and asset-based financing, offering a range of debt instruments designed to support working capital needs, equipment acquisitions, lease financing and corporate recapitalizations. Its focus on senior secured loans, unitranche structures and equipment financings positions it to serve clients in sectors such as manufacturing, healthcare, transportation and energy.

Through its lending platform, MidCap Financial Investment Corporation partners with privately held and sponsor-backed companies that typically generate annual revenues between $25 million and $500 million. The company’s investment strategy emphasizes risk-adjusted returns by targeting assets with strong collateral profiles and stable cash flows. By structuring loans with customized terms and covenants, the firm aims to preserve capital while generating attractive yield for its shareholders.

MidCap Financial Investment Corporation is externally managed by MidCap Financial, LLC, an independent investment advisor with a dedicated team of credit analysts and portfolio managers. The management team leverages industry expertise and rigorous due diligence to underwrite transactions and monitor ongoing credit performance. With a nationwide footprint, the company serves businesses in key U.S. markets and seeks to build long-term relationships through tailored financing solutions.

MidCap Financial Investment Q1 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: MFIC reported NII of $0.38 per share but a GAAP net loss of $0.30 per share and a portfolio net loss of $0.67 per share, driving NAV to $13.82 (down 2.5% QoQ).
• Positive Sentiment: The company fully executed its $107.9 million share repurchase authorization (≈$76M in Q1 and $31.9M post‑quarter), which added about $0.24 per share of accretion, and the board declared a $0.31 quarterly dividend.
• Negative Sentiment: Buybacks plus the quarter's losses increased net leverage to 1.55x$100M net repayments post‑quarter) to reduce leverage.
• Negative Sentiment: The quarter's losses were roughly evenly split between market‑related write‑downs (spread widening/multiple compression, notably in tech/software) and credit deterioration; non‑accruals rose to 3.5% of the portfolio (FV).
• Positive Sentiment: The portfolio remains diversified and structurally defensive with a $2.97B fair value across 236 companies, 99% first‑lien, ~94% sponsor‑backed, modest software/SOFR exposure (11%), and broad covenant protections.

Good morning, welcome to the earnings conference call for the period ended March 31, 2026 for MidCap Financial Investment Corporation. At this time, all participants have been placed in a listen-only mode. The call will be open for your question-and-answer session following the speaker's prepared remarks. If you would like to ask a question at that time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, press the star 2. I will now turn the call over to Elizabeth Besen, Investor Relations Manager for MidCap Financial Investment Corporation.

Thank you, operator, and thank you everyone for joining us today. We appreciate your interest in MidCap Financial Investment Corporation. Speaking on today's call are Tanner Powell, Chief Executive Officer, Ted McNulty, President, and Kenneth Seifert, Chief Financial Officer. Howard Widra, our Executive Chairman, is available for the Q&A portion of today's call. I'd like to advise everyone that today's call and webcast are being recorded. Please note that they are the property of MidCap Financial Investment Corporation, and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our press release. I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call and webcast may include forward-looking statements.

You should refer to our most recent filings with the SEC for risks that apply to our business and that may adversely affect any forward-looking statements we make. We do not undertake to update our forward-looking statements or projections unless required by law. To obtain copies of our SEC filings, please visit either the SEC's website at www.sec.gov or our website at www.midcapfinancialic.com. I'd also like to remind everyone that we posted a supplemental financial information package on our website, which contains information about the portfolio as well as the company's financial performance. Throughout today's call, we will refer to MidCap Financial Investment Corporation as either MFIC or the BDC, and when we use MidCap Financial, we refer to the lender headquartered in Bethesda, Maryland. At this time, I'd like to turn the call over to Tanner Powell, MFIC's Chief Executive Officer.

Thank you, Elizabeth. Good morning, everyone, and thank you for joining us for MidCap Financial Investment Corporation's quarterly earnings conference call. Yesterday, after market close, we issued our earnings press release and filed our quarterly Form 10-Q for the period ending March 31, 2026. I'll begin today's call with an overview of MFIC's first quarter results, followed by a discussion of our share purchase activity and our dividend announcement. Following that, I'll hand the call over to Ted, who will walk through our investment activity for the quarter and provide a portfolio update, including a review of our SOFR exposure. Kenny will then review our financial results in detail. Net investment income or NII per share for the quarter was $0.38, while GAAP net loss per share was $0.30.

Net asset value per share at the end of March was $13.82, representing a 2.5% decline from the prior quarter. The $0.36 per share decrease in NAV was driven by a net loss of $0.67 on the portfolio, which was partially offset by net investment income exceeding the dividend by $0.07 per share, plus approximately $0.24 per share of accretion from stock repurchases executed below NAV. As a result of the net loss in our stock buyback activity, which I will discuss in more detail shortly, net leverage increased to 1.55x at quarter end. We plan to reduce MFIC's net leverage by continuing to de-emphasize new commitments and through expected repayments.

Subsequent to quarter end, we completed the existing share repurchase authorization and have received net repayments in excess of $100 million, demonstrating our commitment to enhancing shareholder value and de-leverage. Our net loss for the quarter was driven by a combination of market-related write-downs, reflecting credit spread widening and multiple compression, particularly within the technology sector, including software as well as credit weakness across certain positions. Our net loss was roughly evenly split between market-related factors and credit-related weakness. The vast majority of our direct lending portfolio is valued using a yield approach. Changes in market spreads are incorporated into quarterly valuation of our investments. As always, our third-party valuation firms ensure our marks reflect current market conditions, including spread widening, the impact of heightened market volatility, increasing uncertainty around software valuations alongside broader macroeconomic and geopolitical pressures.

Despite the loss this quarter, we believe our focus on first lien positions, our cautious usage of PIK, and low SOFR exposure keeps us well-positioned. As discussed last quarter, given the size of the stock's discount to NAV, we believe it was prudent to prioritize allocating capital towards stock repurchases rather than deploying capital into new investments. Consistent with that view, new investment activity during the March quarter was relatively modest, with MFIC making $50 million of new commitments across 8 transactions. Given the modest amount of new commitments, we had net repayments of $142 million in the quarter, which included a $22 million repayment from Merx. At the end of March, MFIC's investment in Merx totaled approximately $81 million at fair value, representing 2.7% of the portfolio at fair value. Let me remind you about what remains of Merx.

MFIC's remaining investment in Merx consists of 4 aircraft plus the value associated with Merx's servicing platform. Merx earns income through its servicing activities for Navigator, Apollo's dedicated aircraft leasing fund, which currently owns 36 aircraft. Having fully deployed its equity commitments, Navigator is in the harvest period, and as such, the fund is opportunistically monetizing assets to optimize fund level returns. Merx receives a remarketing fee on each aircraft sale. At the end of March, the servicing business represented approximately 38% of the total value of Merx. The servicing component of Merx will naturally decline as servicing income is received.

Turning back to stock repurchases, as mentioned, we have been actively repurchasing shares, including through a 10b5-1 trading plan. We have fully utilized our existing 107.9 million authorization, with $76 million repurchased in the first quarter, and the remaining $31.9 million repurchased post-quarter end in April. The authorization was fully utilized more quickly than anticipated, driven by the increase in our trading volume. Moving to the dividend. On May 5th, 2026, our board of directors declared a quarterly dividend of $0.31 per share as of record as of June 9th, 2026, payable on June 25th, 2026. With that, I will now turn the call over to Ted McNulty.

Thank you, Tanner. Good morning, everyone. I'm going to spend a few minutes reviewing our first quarter investment activity and then provide some details on our investment portfolio. As Tanner mentioned, new investment activity during the March quarter was relatively modest. MFIC's new commitments in the quarter totaled $50 million, with a weighted average spread of 469 basis points across 8 different companies. The vast majority of these new commitments were made prior to our decision to allocate more capital to stock buybacks. The weighted average net leverage on new commitments was 3.6x in the quarter. Gross fundings, excluding revolvers, totaled $68 million. Sales and repayments, excluding revolvers and Merx, totaled $181 million. Net revolver fundings were approximately $1 million, and as previously mentioned, we received a $22 million pay down from Merx.

In aggregate, net repayments for the quarter totaled $142 million. Shifting to our investment portfolio. At the end of March, our portfolio had a fair value of $2.97 billion and was invested in 236 companies across 45 different industries. Direct origination and other represented 96% of the total portfolio. Merx represented less than 3% of the total portfolio. Liquid positions acquired during our mergers with 2 funds in 2024 totaled approximately 1%. All of these figures are on a fair value basis. Specific to the direct origination portfolio, at the end of March, 99% was first lien and 94% was backed by financial sponsors, both on a fair value basis. The average funded position was $12.6 million. The median EBITDA was approximately $51 million.

Approximately 94% had 1 or more financial covenants on a cost basis. Covenant quality is the key point of differentiation for the core middle market, as substantially all of our deals have at least 1 covenant. The weighted average yield at cost on our direct origination portfolio was 9.6% on average for the March quarter, down from 10% for the December quarter. The sequential decrease in the portfolio yield was driven by lower base rates as well as the decline in the average spread across the portfolio. At the end of March, the weighted average spread on the directly originated corporate lending portfolio was 538 basis points, down 8 basis points compared to the end of December. Next, let me make a few comments about our SOFR exposure.

You can find additional details on our software exposure on page 5 of the earnings supplement. As of March 31st, software represented just 11% of MFIC's portfolio at fair value, which is well below the BDC industry average. These positions are primarily cash pay, 100% first lien, and highly diversified across 28 borrowers, with an average position size of $12 million. Our software book is diversified across a wide range of end markets and carries a low average LTV of 35%. The median EBITDA of our software portfolio companies is $50 million. Only one borrower's PIK and PIK income from our software portfolio is de minimis. The weighted average interest coverage of our software portfolio is 2.3 times, in line with the overall portfolio.

The weighted average net leverage is 4.4 times, down from 4.6 times in the prior quarter, and is below the overall portfolio. The weighted average spread of the SOFR portfolio is 533 basis points, roughly in line with the overall portfolio. MidCap's approach to lending to software companies has remained consistent, though has become more selective in the current environment. The strategy is always centered on borrowers with mission-critical products, high switching costs, and strong revenue visibility supported by long-term contracts. Turning now to credit quality. On the overall portfolio, investments on non-accrual status increased to 3.5% of the total portfolio at fair value compared to 2.6% at the end of the prior quarter. The two largest contributors to the increase were Midwest Vision and Tasty Chicken.

Underlying portfolio company credit metrics were stable quarter-over-quarter. Borrower net leverage or debt to EBITDA was 5.29 times at the end of March, unchanged from the end of December. The weighted average interest coverage ratio is 2.3 times, also unchanged from the end of December. We believe the steady revolver utilization rate we see from our borrowers is an indicator of greater financial stability and provides us with incremental and more frequent financial information. Revolving facilities provide insight into a company's liquidity position through draw behavior. At the end of March, the percentage of our leveraged lending revolver commitments that were drawn was essentially flat compared to the prior quarter. PIK income represented 4.7% of total investment income for the month quarter, down slightly compared to the prior quarter.

With that, I'll now turn the call over to Kenny to discuss our financial results in detail.

Thank you, Ted. Good morning, everyone. Total investment income for the March quarter was approximately $71.8 million, a decline of $6.5 million or 8.3% from the prior quarter. The decrease was driven by lower interest income resulting from lower base rates, fewer accrual days in the quarter, a decrease in the size of the portfolio, an increase in non-accruals, as well as lower fee income. As a reminder, the impact of changes in base rates on our interest income occurs with a lag, depending on the reset frequency of our loans. During the December quarter, the average daily three-month SOFR declined 38 basis points compared to the prior quarter. Prepayment income was approximately $2.7 million, up from $2.4 million last quarter. Fee income was approximately $500,000, down from $1 million.

Dividend income was approximately $300,000. Net expenses for the quarter were $37.6 million, a decline of $4.8 million or 11.3% from the prior quarter. This decline was driven primarily by lower interest expense resulting from lower base rates as well as lower administrative service expenses. In addition, the total return feature in our incentive fee calculation eliminated the incentive fee again this quarter. Portfolio had a net loss of $61.1 million or $0.67 per share. For the March quarter, net investment income per share was $0.38, while GAAP net loss per share was $0.30. On to the balance sheet. At the end of March, the portfolio had a fair value of $2.97 billion.

Total principal debt outstanding was $1.87 billion. Total net assets stood at $1.18 billion or $13.82 per share. Company ended the quarter at 1.55 net leverage. As Tanner mentioned, we plan to reduce MFIC's net leverage by continuing to de-emphasize new commitments and through expected repayments. The cost of debt for the quarter declined to 5.61%, down from 5.95% in the prior quarter, largely driven by lower base rates and somewhat from the refinancing activities that occurred during the December quarter. With respect to the $125 million of 4.5% fixed rate notes maturing in July 2026, we intend to repay those notes using availability under our revolving credit facility.

At today's base rates, the revolving credit facility carries a higher cost relative to the notes, which is expected to modestly increase our cost of debt. This concludes our prepared remarks. Operator, please open up for any questions.

Thank you. If you would like to ask a question, please press star 1 on your keypad. To leave the queue at any time, press star 2. Once again, that is star 1 to ask a question. We'll pause for just a moment to allow everyone a chance to join the queue. We'll take our first question from Arren Cyganovich from Truist Securities. Please go ahead. Your line is open.

Hi. Thanks. You utilized your share repurchases rather quickly. You could talk a little bit about, you know, future repurchases. I know you've used the entire approved repurchases. Is that something that you expect to continue to do, or do you think that you'll start to, you know, grow the portfolio again?

Thanks, Arren. As we called out in the prepared remarks, the dynamic with the increased trading volume enabled us to, under our 10b5-1 plan, repurchase more quickly than we thought. We also separately had some prepays that pushed, and we guided to the fact that we've already seen $100 million in the quarter to date period since March 31. Obviously the loss leaves us at a leverage level that is elevated. At this juncture, we believe that prudent not to make a decision with respect to a share buyback or commencing of deployment until such time as we get down to the lower end of our range or lower.

at that point, you know, evaluate the capital allocation decision. Importantly, I will also call your attention to the statements we made on our last earnings call. You know, we are very focused on shareholder value, and you know, we wanted to make a big statement with the size of the buyback, and with the ultimate goal of trying to narrow the discount between our trading price and NAV. That logic and that goal will be, you know, top of mind when we do make that decision as we get down to leverage level again at or below the bottom end of our range.

Okay. That makes sense. The non-accruals increased, I think they're over 5% at cost now, so it seems, I don't know, a little bit worse than what I would say for kind of a normal credit environment. You know, how are you viewing credit broadly and, you know, what led to these increases in non-accruals? You mentioned the two companies.

Yeah, sure. Thanks, Arren. You know, when we look at the overall portfolio, we did see very healthy revenue and EBITDA growth across, you know, the 200 plus borrowers that we have. You know, we do have, you know, some borrowers that are suffering challenges, you know, and some of that, you know, is thematic. You know, we have, you know, exposure, it's very small exposure to quick service restaurant industry is one of the companies we mentioned, you know, is in that category. We also see, you know, some credit challenges in companies where they're seeing cost pressures, whether that's from, you know, goods inflation, labor inflation, et cetera, and pressure or revenue reliance on the low end of the consumer.

When we see, you know, those factors coming together, you know, that's where we tend to see problems. Usually, if you have a credit go on non-accrual, it's, you know, not due to one factor. It's due to a confluence of several factors. As we think about

You know, the outlook, you know, the vast majority of the credits are performing quite well. You know, we are monitoring very closely, you know, the names on our watch list. In conjunction with the portfolio management functions at MidCap Financial, you know, we're, you know, on top of those names. You know, I think your question kind of started off with, for a normal credit cycle, it seems high. I think if we kind of look across the, you know, lending, the lending environment, you know, you do start to see non-accruals ticking up kind of around the sector. I think that Yeah, I think we should just all ask ourselves, like, where are we in the credit cycle?

Arren, to clean up the other non-accrual that we called out is in Midwest Vision, and that happens to be an ophthalmology PPM. The good news, broadly speaking, is we're relatively under-indexed to PPMs. The bad news, we do have actually 2, and this is one of them. The challenges there are well understood in terms of cost pressures and also a dynamic wherein those business models were particularly sensitive to cost of capital, the ability to roll up and ultimately the valuation of those franchises to maintain the relationships with doctors and retain those doctors and so on.

Unfortunately, in that particular case, those stresses resulted in a deterioration in that credit and hence, that name also got put on non-accrual. Thank you. Appreciate it.

Thank you. We'll take our next question from Rick Shane with J.P. Morgan. Please go ahead.

Hey, guys. Thanks for taking my question. Look, you guys have set out on a pretty different path from a lot of your peer companies in terms of how you're approaching returning capital and growth. You know, if you kind of look at the questions we've asked of many of your peers, over the last quarter and similar companies, in theory, it's a view that we share. There is an interesting analog here, which is ARI, another Apollo vehicle, where they facing the same dynamics chose to sell off the vast majority of their assets at close to carrying value and are now sort of considering strategic alternatives.

I am curious, you know, given that the analog, how you guys are thinking about growth long term and what are, you know, what is the path forward if publicly traded BDCs continue to trade at discounts to NAV?

Yeah. Thanks. Thanks for the question, Rick. A very good one. You know, as we've stated, as you rightly pointed out, you know, manifesting in the firm's approach to ARI, you know, we're very focused as a firm, you know, where we manage public vehicles, you know, making sure, you know, we are operating them with the objective of maximizing value to shareholders. What I would point you to is structurally a BDC and ARI structure are different. You know, the arrows in the quiver, so to speak, for a BDC are limited relative to ARI.

Thus, the, the path that was afforded in the case of ARI does not avail itself to us in quite the same way. That said, I would, and at the risk of being redundant, you know, call your attention to, irrespective of all the options that are available, you know, our focus remains on, you know, delivering value to shareholders and doing our best to narrow the discount. As a result, as we look at the situation right now, we're mainly focused on, you know, in the current moment, obviously, as I alluded to, getting leverage down.

You know, also, you know, upon getting down to that leverage, making that capital allocation decision based on, you know, obviously, where market is and where we are, where we're trading at the time.

Got it. And look, I think you guys realize I'm newly revisiting the name but have a lot of history with the company. You know, my experience is that over time, you guys have been very thoughtful about premiums and discounts and thinking about what that means for shareholders. It is interesting to see you take what I think is a pretty different path from some of your peers right now. At what point do you worry that if this continues, that not only is there a financial leverage issue, but you lose operating leverage on the platform?

Another very good question, Rick. Appreciate it. There, there's a couple things there. I think it's very important, and what we've kind of stressed as a team as we've evaluated these options is we have a, you know, kind of think of it as a macro framework of what we're operating to, but each individual decision as it presents itself has to be looked at, you know, kind of in the current market framework. I don't need to tell you that things are changing quite a bit and thus it's informed by, you know, what the, you know, what's on the field at the particular time. You know, in terms of operating leverage, we obviously have SG&A at the BDC.

As we shrink that there is a, you know, deleterious effect there, but that's relatively modest. I think one of the other dynamics that's important to consider and one of the that enabled us to make this decision is, Rick, if you think about our MidCap business, it's, you know, overall it's a $50 billion business between the balance sheet of MidCap and the various sidecars and the assets that are managed there. Thus, you know, when we thought about undertaking this decision, we were fortunate given that setup, given those dynamics that MFIC's non-participation in a particular deal, and hence, you know, or, you know, indicative of where we are right now, where we're not deploying, does not impair our ability to deliver the solution for the client.

You know, the capital, you know, on the MidCap balance sheet and in all those other sidecars enables us to continue to, you know, operate and make commitments at scale to our sponsor clients and our corporate clients. As a result, you know, the operating leverage, if you will, is not impaired there, or from a business standpoint, I should say. You know, we still have the ability to prosecute our business. So, you know, again, we're fortunate to be in this position that enabled us to undertake that decision.

Getting back to the other part of the question, there is a modest effect on SG&A, not as efficiently levered, but, you know, again, in summation, we still feel that this is the prudent right approach for our company in this time.

Got it. Thank you. Look, you know, whether people are agree or disagree with the, with the strategy, I think that investors value an alternative way of looking at the space and their ability to express their views as well. Thank you, guys.

Thanks, Rick.

Thank you. We'll take our next question from Kenneth Lee with RBC Capital Markets. Please go ahead. Your line is open.

Hey, good morning, and thanks for taking my question. I apologize if this has been covered before. I've just been hopping on different calls. I think I heard in the prepared remarks that there's a potential de-emphasis on new investments go forward. Just curious, does that mean go forward originations are mainly going to be driven by incumbent kind of financings? Then obviously, letting the prepayment activity slowly get leverage back down to the more lower end of the leverage range there. Thanks.

Thanks, Ken. Thanks for the question. You know, I think the to summarize kind of what we have said around, you know, deleveraging and origination and stock buybacks, you know, step one, which is what we're in right now, is to, you know, deleverage back to the lower end or slightly below of, the targeted range that we have, you know, presented to the market, you know, over the last several years. Then once that as we approach that level, you know, we, along with our board, will be evaluating the capital allocation decision, for new originations versus stock buybacks. Kind of the inputs there, you know, are what are the market conditions at the time and where is our stock trading at the time. We're not saying that we're not originating.

I would just add to that just for the clarity, Ken, a lot of the transactions that are done in the middle market or in the direct lending space come with delayed draws and revolvers. We've already committed to many of those across our borrowers. We will obviously be honoring those commitments. From time to time, it might make sense that even before we get down to the target leverage, we will still be standing up to those commitments. As Ted alluded to, the decision as to capital allocation will be made upon achieving our target leverage.

Gotcha. Very, very helpful there. One follow-up, if I may, just in terms of the non-accruals, the pickup quarter to quarter. Just to clarify the earlier comments, were some of the non-accruals the relative new ones related to any of the 2022 vintages or were they just throughout the portfolio there? Thanks.

Yes. Yes, Ken. I think what your question was were the non-accruals, you know, from older vintages? If that's the case, if that's what your question was, then the answer is yes.

Yes. Gotcha. Very helpful there. Thanks again.

Thank you. We'll take our next question from Heli Sheth with Raymond James. Please go ahead.

Good morning. Thanks for the question. Looking back to last year when we had Liberation Day, we kind of saw a muted M&A market following for the remainder of the year. With the current macro factors, what are you expecting for the pipeline and activity for the remainder of the year?

Yeah, sure. You know, we obviously still see, you know, what comes off the mid-cap pipeline notwithstanding we are at the current juncture not participating. It's really become a fool's game trying to predict M&A because, you know, recent history has been littered with events that have conspired to take things offline. I think we're cautious. It's hard not to point to some of the geopolitical stress and the duration there as really influencing M&A.

The backdrop and perhaps the reason that ourselves and many others in the market have been sanguine going into each successive year about the pickup in M&A is that, you know, you look at the private equity space and you look at the quantum of the dry powder and the limited DPI to date in returning capital to shareholders makes them very motivated sellers in many cases. You know, unfortunately, they've gotten nicked up or the market's gotten nicked up by these stresses, as you alluded to. Tariffs was a big one amongst others. You know, I think we're cautious.

We exercise a little bit of humility in making such a prediction because of the, you know, the spate of drivers that have, you know, impaired M&A volumes. The broader term macro, the broader term dynamic around the sponsored capital and the duration of those investments suggests to us that it's not a question of if, it's more of a question of when.

Got it. Thanks for the color. A quick follow-up on leverage. Where do you see the pacing of reducing leverage going any incremental detail there?

Yeah, sure. You know, we called out we've got about $100 million. This actually is not a terrible segue from your previous question there, is we've gotten $100 million in the quarter to date period. We have line of sight on a number of other prepayments. To the question you asked previously, we are in an environment that can be, that should be characterized and is characterized by some volatility. It's unclear when that happens. You know, our business is one where we don't necessarily control the exit. We're susceptible to what happens.

You know, we do benefit from a very diverse portfolio with, you know, 236 names and are confident that over time, you know, we will be able to get back to that leverage level. Conceding that, even though we have, you know, line of sight into some specific pay downs, you know, the dynamics are ultimately, to some extent, out of our control and more a function of whether the market bears that out.

Got it. Thanks.

Thank you.

Thank you. It appears we have no further questions at this time. I'll turn it back to our presenters for any closing comments.

Thank you, operator. Thank you everyone for listening to today's call. On behalf of the entire team, we thank you for your time today. Please feel free to reach out to us if you have any other questions. Have a good day.

This concludes today's meeting. We appreciate your time and participation. You may now disconnect. Thank you.