Core Viewpoint - UBS forecasts that Hong Kong Exchanges and Clearing Limited (HKEX) will report a year-on-year increase in quarterly revenue and net profit of 43% and 53%, reaching HKD 7.7 billion and HKD 4.8 billion respectively, setting new records [1] Financial Performance - The forecasted quarterly revenue and net profit are 8% and 11% higher than market expectations [1] - Estimated net investment income for Q3 is projected at HKD 933 million, reflecting a year-on-year and quarter-on-quarter decline of 23% and 40% respectively, primarily due to weaker HKD interbank rates and potential foreign exchange losses from USD depreciation [1] Trading Activity - Q3 average daily turnover is expected to reach a new high of HKD 286 billion, with southbound capital contribution increasing to approximately 27%, compared to 23% and 24% in Q1 and Q2 respectively [1] - The turnover rate of southbound capital is estimated to be more than twice that of local and foreign investors since 2020, indicating a structural improvement in overall turnover rates [1] Future Projections - UBS has raised its average daily turnover forecast for 2025 to 2027 by 9% to 16% and adjusted its earnings per share forecast for HKEX upward by 7% to 12% [1] - The target price for HKEX has been increased from HKD 464 to HKD 485, maintaining a "Neutral" rating [1]

Core Viewpoint - UBS forecasts that Hong Kong Exchanges and Clearing Limited (HKEX) will report record high revenues and net profits for Q3 this year, with year-on-year growth of 43% and 53% respectively, reaching HKD 77 billion and HKD 48 billion, exceeding market expectations by 8% and 11% [1] Revenue and Profit Forecast - The estimated net investment income is projected to be HKD 933 million, reflecting a year-on-year and quarter-on-quarter decline of 23% and 40% respectively, primarily due to weaker Hong Kong interbank offered rates and potential foreign exchange losses from a depreciating US dollar [1] Trading Volume and Market Participation - Daily average trading volume has reached a new high of HKD 286 billion, with southbound capital contribution increasing to approximately 27%, compared to 23% and 24% in Q1 and Q2 respectively [1] Adjustments to Future Projections - In response to market sentiment and increased participation from southbound capital, HKEX's daily average trading volume forecasts for 2025 to 2027 have been raised by 9% to 16%, and earnings per share forecasts have been adjusted upward by 7% to 12% [1] Target Price and Rating - The target price for HKEX has been revised from HKD 464 to HKD 485, maintaining a "Neutral" rating [1]

Core Viewpoint - Bank of America Securities has raised the average daily trading volume forecast for Hong Kong Exchanges and Clearing (HKEX) from HKD 2,400 billion, 2,600 billion, and 2,600 billion for 2025 to 2027, to HKD 2,600 billion, 2,700 billion, and 2,700 billion respectively, while lowering net investment income forecasts by 5% to 7% due to a low interest rate environment, and raising earnings forecasts by 1% to 2%, maintaining a target price of HKD 520 and reiterating a "Buy" rating [1] Group 1 - The expected profit for HKEX in the first three quarters of this year is projected to reach HKD 12.9 billion, representing a year-on-year increase of 39% [1] - The average daily trading amount for the third quarter reached HKD 286 billion, setting a historical high [1] - Net investment income is expected to be affected by fluctuations in Hong Kong interbank offered rates (HIBOR), with a lagged impact likely to manifest in the third quarter [1] Group 2 - Profit growth for HKEX from 2026 to 2027 is expected to slow from 24% in 2025 to 8%, unless there is a significant increase in total market capitalization [1] - Relying solely on trading volume growth may not be sufficient to drive revenue [1] - Derivative products are anticipated to become a key growth engine for HKEX [1] Group 3 - Competition between Hong Kong IPOs and Shanghai and Shenzhen exchanges is expected to intensify, as mainland China places greater emphasis on new technology sectors and may implement incentive policies to retain key enterprises for domestic listings [1]

Financial Data and Key Metrics Changes - The company reported net investment income (NII) of $0.46 per share for Q2 2025, an increase from $0.45 per share in Q1 2025. Excluding one-time accelerated amortization, NII was $0.48 per share [5][21] - NAV per share decreased by approximately 0.4% to $19.55, down from $19.62 at the end of Q1 2025, primarily due to a special dividend of $0.05 per share paid during the quarter [6][22] - The company maintained a 110% base dividend coverage for the quarter [6] Business Line Data and Key Metrics Changes - The investment portfolio totaled over $1.6 billion at fair value, consisting of 187 companies with an average investment size of approximately 0.6% of the total portfolio [9] - First lien loans represented 91% of the portfolio at fair value, indicating a strong focus on senior secured debt [11] Market Data and Key Metrics Changes - Deal activity remained constrained in Q2 2025 due to ongoing tariff discussions and regulatory uncertainty, impacting M&A volume [6] - The weighted average yield of income-producing securities remained stable at 10.4% [18] Company Strategy and Development Direction - The company focuses on disciplined credit underwriting, capital preservation, and strong free cash flow generation, particularly in the lower middle market [26] - A $20 million stock repurchase program was approved to opportunistically repurchase shares, reflecting confidence in the company's valuation [15] Management's Comments on Operating Environment and Future Outlook - Management expressed that the current discount to NAV is unwarranted and highlighted the company's long-term performance track record, which has outperformed public BDC averages [14][15] - The company remains optimistic about its ability to navigate market volatility and maintain a stable NAV profile [26] Other Important Information - The company declared a regular dividend of $0.42 per share for Q3 2025, payable on October 15, 2025 [12][24] - The company will not pay a Q3 supplemental dividend as the measurement test cap exceeded 50% of this quarter's excess available earnings [25] Q&A Session Summary Question: Credit quality concerns regarding the watch list - Management acknowledged a slight increase in the watch list to 14% but emphasized a proactive approach to monitoring investments and maintaining transparency about portfolio health [29][30][31] Question: Impact of tariffs on portfolio companies - Management indicated that the direct impact of tariffs on the portfolio remains low and that companies are proactively managing tariff exposure through pricing power and alternative sourcing strategies [36][38][40] Question: Future portfolio growth and repositioning - Management stated that while they do not expect significant net portfolio growth, they are focused on rotating acquired assets into Crescent-originated opportunities without sacrificing diversification [42][46][49] Question: Evaluation of unitranche investments - Management noted that unitranche investments remain a small part of the portfolio, and they are opportunistic in pursuing such opportunities, ensuring control over the capital structure [52][54] Question: Operating leverage from declining energy prices - Management clarified that fuel input costs are not a significant component of the cost structure for most borrowers, and while some benefits may arise, they do not expect it to materially impact portfolio performance [57][58] Question: Second lien loan strategy - Management confirmed that second lien loans will not become a large component of the portfolio, maintaining a focus on first lien investments due to risk considerations [61][62]

Financial Data and Key Metrics Changes - Net investment income (NII) per share was $0.39 for the quarter, corresponding to an annualized return on equity (ROE) of 10.5% [11] - GAAP net income per share was $0.19, corresponding to an annualized ROE of 5.2% [11] - Net asset value (NAV) per share was $14.75, down 1.2% compared to the prior quarter [11] Business Line Data and Key Metrics Changes - MFIC made $262 million of new commitments across 29 transactions during the quarter [12] - The weighted average spread on new commitments was 538 basis points, with a slight increase compared to the prior quarter [12][23] - The weighted average net leverage on new commitments was 4.0 times, down from 4.2 times in the prior quarter [23] Market Data and Key Metrics Changes - The quarter began with heightened volatility due to U.S. tariffs, but market sentiment improved as tariffs were paused and trade deals were struck [20] - The labor market showed resilience with steady unemployment, and the Federal Reserve kept its policy rate unchanged [20] - The weighted average yield at cost of the direct origination portfolio was 10.5%, down from 10.7% in the prior quarter [35] Company Strategy and Development Direction - The company is focused on lending to the core middle market on a first lien senior secured basis, which offers attractive risk-adjusted returns [22] - The reduction in exposure to Merx is expected to provide capital for deployment into first lien middle market loans, which are believed to deliver higher returns [17] - The company intends to redeploy capital repaid from Merx to enhance earnings power and strengthen dividend coverage [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the M&A pipeline is building, with sponsors remaining active despite previous uncertainties [55] - The company expects a busy second half of the year with plenty of opportunities to deploy capital [55] - Management expressed confidence in covering the declared dividend of $0.38 per share through net investment income, despite potential base rate pressures [90] Other Important Information - The company reported total investment income of approximately $81.3 million, up 3.2% compared to the prior quarter [33] - Total principal debt outstanding was $2.05 billion, with total net assets standing at $1.3 billion [38] - The company received an $8.5 million pay down from Merx during the quarter [24] Q&A Session Summary Question: Can you clarify the structure of the remaining investment in Merx? - The remaining investment consists of four aircraft and a servicing platform, with 40% of the remaining exposure related to servicing contracts [43][44] Question: What are the expectations for investment activity in the second half of the year? - The company anticipates a busy second half with a growing M&A pipeline and active sponsors, which should provide ample opportunities for deployment [55] Question: How does the company view the current leverage levels? - The company is comfortable with the current leverage levels and expects them to remain within target ranges, especially with anticipated M&A activity [56][58] Question: What is the expected impact of the Merx transactions on NAV? - The Merx transactions are expected to result in a positive impact to NAV in the high single-digit per share range, specifically between $0.06 to $0.09 [94]

Financial Data and Key Metrics Changes - For Q2 2025, adjusted net investment income (NII) was $20 million, an increase from $18.4 million in Q2 2024, with fee income accounting for about half of the $1.6 million increase [6] - Adjusted NII per share was $0.57 for both periods, reflecting an increase in average shares outstanding due to the equity ATM program [7] - Total investment income for Q2 was $40 million, a $3.5 million increase from Q1 2025, driven by higher interest income and fee income [12] - Total expenses for Q2 were $21.3 million, a $3.1 million increase over Q1, primarily due to higher capital gains incentive fees and interest expenses [12] Business Line Data and Key Metrics Changes - The debt portfolio totaled $1 billion on a fair value basis, with 81% consisting of first lien investments, while the equity portfolio stood at $138.8 million, or 12% of the total portfolio [10] - The weighted average effective yield on debt investments was 13.1% as of June 30, slightly down from 13.2% at the end of Q1 [15] Market Data and Key Metrics Changes - The company noted that M&A activity was dampened in Q2 due to economic and tariff policy uncertainty but showed signs of improvement in late Q2 and into Q3 [6][20] - The company’s portfolio remains diversified by industry, with non-accrual companies under 1% of the total portfolio on a fair value basis [10] Company Strategy and Development Direction - The company aims to grow net asset value over time by carefully selecting high-quality companies with defensive characteristics and positive growth outlooks [11] - The investment strategy focuses on generating attractive risk-adjusted returns while preserving capital in the fragmented lower middle market [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the increase in deal flow, indicating a better environment for investment activity in the latter half of Q3 and into Q4 [20][23] - The company is well-positioned to grow its portfolio, although repayment activity is expected to be episodic and not as high as in the previous quarter [22][23] Other Important Information - The net asset value grew slightly to $692.3 million at quarter end compared to $677.9 million as of March 31, 2025 [8] - The board declared a total dividend of $0.57 per share for 2025, which includes a supplemental dividend of $0.14 per share [7] Q&A Session Summary Question: What is the outlook for M&A activity in the second half of the year? - Management noted that while Q1 had decent deal flow, Q2 saw a drop due to uncertainty, but activity has improved in late Q2 and continues into Q3, with expectations for a decent market in the latter half of the year [20][23] Question: Are there any changes in the competitive environment? - Management indicated that while the market remains competitive, there has been an increase in competition over the past few years, particularly in the lower middle market [25][26] Question: Can we expect the prepayment fees to decrease in Q3? - Management agreed that the prepayment fees and accelerated amortization seen in Q2 are not expected to repeat at the same levels in Q3 [28] Question: Can you provide insights on Quest Software's performance? - Management described Quest as a cybersecurity solutions provider with a solid long-term outlook, although it has faced challenges due to being over-leveraged and higher interest rates [34] Question: What is the priority for financial sponsors regarding capital structure? - Management noted that financial sponsors are looking for ways to return capital to LPs, but the level of dividend income may not be recurring and is often episodic [38]

Financial Data and Key Metrics Changes - BXSL reported net investment income (NII) of $0.77 per share, representing an 11.2% annualized return on equity, primarily from interest income [9][27] - Net asset value (NAV) per share decreased slightly to $27.33 from $27.39 in the previous quarter [9][28] - The distribution of $0.77 per share was fully covered by NII, yielding an annualized distribution yield of 11.3% [9][20] Business Line Data and Key Metrics Changes - BXSL's total portfolio investments at fair value increased to $13.3 billion, up from $11.3 billion year over year [14][28] - The weighted average yield on performing debt investments remained stable at 10.2% [16][29] - 98% of investments are in first lien senior secured loans, with a low non-accrual rate of 0.3% at cost [16][18] Market Data and Key Metrics Changes - The company experienced a nearly 50% increase in new Blackstone credit insurance (BXCI) global private credit deal screenings compared to the fourth quarter of the previous year [8][9] - The average EBITDA of the portfolio companies is approximately $219 million, with year-over-year EBITDA growth of nearly 11% [17][78] Company Strategy and Development Direction - BXSL is focusing on maximizing operational efficiency and maintaining a disciplined approach to investment quality, avoiding unnecessary risks [11][12] - The company aims to lead the market with lower fees and expenses compared to peers, which is seen as a priority for creating a stronger portfolio over time [11][12] - BXCI's scale and expertise are leveraged to enhance revenue and lower costs for portfolio companies, indicating a commitment to value creation [14][25] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in market conditions with improved investor sentiment and a return to open markets, leading to increased deal activity [7][8] - There is cautious optimism regarding the economic outlook, with management emphasizing the importance of quality over risk in investment decisions [11][44] - The company is preparing for heightened deal activity, particularly within existing portfolio companies, while remaining vigilant about market risks [10][11] Other Important Information - The company maintained its dividend distribution at $0.77 per share, reflecting a commitment to delivering high-quality yield to shareholders [20][27] - Total liquidity was reported at nearly $3 billion, providing ample cash and undrawn debt available for future investments [31] Q&A Session Summary Question: Sustainability of the dividend - Management indicated that the dividend is regularly assessed and is currently 15% higher than the average BDC, with long-term signals being prioritized over short-term deal activity [35][38] Question: Deal activity and spread expectations - Management acknowledged the potential for increased deal activity to impact spreads but emphasized the importance of supply and demand dynamics in the market [41][43] Question: Types of deals being seen - Management noted a mix of M&A activity within existing portfolio companies and some refinancing deals, with a focus on both lower middle market and large-cap spaces [48][49] Question: Repayment activity expectations - Management expects repayment activity to normalize higher as M&A activity picks up, following a low base in Q2 [56][58] Question: Concerns about net investment losses - Management reassured that the marks on assets reflect a robust valuation process, with a long track record of managing through various market conditions [75][78]

Core Viewpoint - United Fire Group reported a significant turnaround in Q2 2025, with adjusted earnings per share of $0.90, surpassing analyst estimates and marking a recovery from a loss in the same quarter of the previous year [1][2]. Financial Performance - Adjusted EPS (non-GAAP) was $0.90, beating estimates of $0.54 by $0.36, compared to a loss of $0.07 in Q2 2024 [2]. - Revenue (GAAP) reached $335.47 million, exceeding the consensus of $314.38 million and up 11.4% from $301.17 million in Q2 2024 [2]. - Net written premium increased by 14.3% to $372.88 million, driven by a 20% rise in core commercial lines [2][5]. - The combined ratio improved to 96.4%, down 9.2 percentage points from 105.6% in the prior year, indicating profitable underwriting [2][6]. - Net investment income rose by 20.2% to $21.67 million, reflecting a shift to higher-yielding fixed maturity investments [2][8]. Business Overview - United Fire Group specializes in property and casualty insurance, primarily distributing policies through independent agencies, focusing on commercial insurance [3]. - The company emphasizes disciplined underwriting, strong agency relationships, and technology investments to enhance efficiency [4]. Strategic Focus - Recent strategies include improving risk selection, ensuring pricing aligns with potential losses, and expanding core commercial insurance offerings [4]. - The company aims to maintain low loss ratios and effectively manage catastrophe exposure while adapting to industry changes [4]. Quarterly Performance Insights - The catastrophe loss ratio decreased to 5.5%, significantly lower than the previous year's 11.2% [6]. - The underwriting expense ratio improved to 34.9%, benefiting from favorable reserve development [7]. - No new major business lines were introduced, focusing instead on enhancing existing market capabilities [7]. Future Outlook - Management did not provide specific future financial guidance but emphasized a commitment to the turnaround plan and core strategy [10]. - A 10.0% return on equity for the first half of 2025 was highlighted as a significant milestone [10]. - Investors are expected to monitor expense ratios and the sustainability of underwriting improvements closely [11].

Financial Data and Key Metrics Changes - The company reported net investment income (NII) of $16.6 million or $0.45 per share for Q1 2025, down from $20.5 million or $0.55 per share in Q4 2024, primarily due to lower base rates, the roll-off of one-time items, and reduced dividend income from the Logan JV [5][23][24] - The weighted average yield of income-producing securities at cost decreased by 50 basis points quarter over quarter to 10.4% [20] - GAAP earnings per share for Q1 2025 was $0.11, with stockholders' equity at $727 million, resulting in a net asset value (NAV) per share of $19.62 [26] Business Line Data and Key Metrics Changes - Gross deployment in Q1 totaled $105 million, with 98% in first lien investments, compared to approximately $78 million in exits, resulting in a net deployment of approximately $27 million [16][17] - The investment portfolio consists primarily of first lien loans, representing 91% of the portfolio at fair value, with a focus on non-cyclical industries [11] Market Data and Key Metrics Changes - The company noted a slowdown in M&A activity due to tariff announcements, leading to a wait-and-see approach from sponsors [7] - The overall direct material exposure of the portfolio to tariffs is modest at 4%, with most businesses serving domestic markets [18] Company Strategy and Development Direction - The company emphasizes a disciplined credit underwriting approach, capital preservation, and strong free cash flow generation to navigate market volatility [30] - The focus remains on high-quality assets and maintaining a stable NAV rather than chasing yield [82] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the market, noting that while there are attractive investment opportunities, the recent tariff announcements have created uncertainty [8][78] - The company anticipates potential near-term tailwinds from asset-based facility repricing and rightsizing completed at the beginning of the quarter [6] Other Important Information - The company declared a regular dividend of $0.42 per share for Q2 2025, along with a special dividend related to undistributed taxable income [12][29] - The weighted average loan-to-value across investments is 39%, indicating a conservative approach to leverage [11] Q&A Session Summary Question: Regarding the new accruals this quarter, does it reflect the restructuring recently announced for that company? - Management clarified that the company has not yet restructured and that the mark reflects the latest view on earnings outlook [34][37] Question: What is Crescent's overall approach to working toward a resolution for non-accruals? - The company prioritizes capital preservation and may consider various options, including restructuring or selling the company, depending on the situation [42][43] Question: How much of the portfolio consists of Crescent-led or originated deals? - Approximately 8% of the total fair value consists of acquired assets, while 92% are loans originated by Crescent [45] Question: Can you explain the significant sequential decline in the Logan dividend? - Management explained that the decline was due to timing mismatches in cash flows and the nature of the equity tranche, which can be volatile during the deleveraging period [48][54] Question: Were there any warning signs for the new non-accruals? - Management indicated that the non-accruals were previously on the watch list, and developments at the respective borrowers warranted the classification [59]

Financial Data and Key Metrics Changes - For the first quarter ended March 31, 2025, the company generated GAAP net investment income of $0.35 per share and core net investment income of $0.37 per share, which excludes estimated excise taxes [5] - The net asset value per share decreased by $0.21 during the quarter, primarily due to company-specific write-downs in the loan portfolio and a reduction of spillover income [5] - The company has paid $295 million in dividends to investors since its IPO, representing $17.9 per share to an investor in the IPO [5] Business Line Data and Key Metrics Changes - The investment portfolio at fair value increased to $991.1 million across 110 portfolio companies, up from $953.5 million across 105 companies as of December 31, 2024 [6] - During the first quarter, the company invested $46.7 million in seven new portfolio companies and had $8.7 million in other investment activity at par [6] - The average loan per company is $9.4 million, with the largest overall investment at $21.9 million, both at fair value [6] Market Data and Key Metrics Changes - 90% of the company's loans were secured, and 91% were priced at floating rates as of March 31, 2025 [6] - Currently, loans to five portfolio companies are on non-accrual status, comprising 6.7% of the total cost and 4% of the fair value of the total loan portfolio, representing a decrease from the prior quarter [7] Company Strategy and Development Direction - The company plans to draw new leverage under the SBIC III license to continue funding qualifying portfolio company investments [8] - The company aims to grow its portfolio to over $1 billion, with potential for more than $10 million in equity gains by year-end [10] - The company has shifted its investment strategy to focus on first lien unitranche secured lending with equity co-investments, moving away from second lien loans due to risk management considerations [38] Management's Comments on Operating Environment and Future Outlook - The management noted that the pipeline for new loan originations is slower compared to three months ago, affected by tariff activity and overall economic conditions [17] - The management expressed optimism about picking up activity as clarity improves in the market, indicating that the current slowdown is temporary [46] - The company expects to maintain the dividend at $0.40 per share for the second and third quarters, although net investment income is currently running below this level [19][21] Other Important Information - The company issued $75 million in aggregate principal amount of 7.25% notes due April 1, 2030, using the proceeds to repay the bank facility [8] - The company has received a green light letter from the Small Business Administration for Stellus Capital SBIC III, which is a significant step in the licensing process [8] Q&A Session Summary Question: Impact of first quarter originations on interest income - The average portfolio in the first quarter was higher than in the fourth quarter, which is expected to result in a pickup in yield in dollars for the second quarter [13][14] Question: Pipeline status and opportunities - The pipeline is slower than three months ago, but there are still interesting opportunities expected to close in the current and next quarter [17][18] Question: Trajectory of net investment income to cover dividends - The company is currently running at a level of net investment income less than the dividend, but expects to be in a good position by the end of the year [21][22] Question: Trade education acquisition restructuring - The business was restructured and recapitalized satisfactorily, with expectations for improved performance going forward [25][26] Question: Logic behind issuing fixed-rate debt - The issuance was necessary to retire maturing bonds and to have some unsecured debt in the capital stack [32][33] Question: Future issuance of common shares - The company will consider issuing shares based on market conditions to ensure accretive outcomes [36] Question: Second lien loans strategy - The company does not expect to issue new second lien loans, focusing instead on first lien unitranche secured lending [38] Question: Impact of SBA green light letter on earnings - The potential for SBIC debentures could allow for lower rates than current borrowing, positively impacting earnings [40][41]