Financial Data and Key Metrics Changes - For the quarter ended September 30th, core net investment income was $0.28 per share, with GAAP net investment income also at $0.28 per share [5][16] - Net asset value (NAV) decreased by 1.2% to $10.83 per share from $10.96 per share in the previous quarter [16] - The debt to equity ratio was reported at 1.6 times, which was reduced to 1.4 times after subsequent asset sales [16][17] Business Line Data and Key Metrics Changes - The portfolio grew to $2.8 billion, up from $2.4 billion in the prior quarter, with a weighted average yield on debt investments at 10.2% [12][17] - The portfolio consists of 90% first lien senior secured debt, with only 0.4% of the portfolio in non-accrual status [10][17] - The company invested $633 million in 11 new and 105 existing portfolio companies during the quarter, achieving a weighted average yield of 10.5% [13] Market Data and Key Metrics Changes - The pricing on high-quality first lien term loans is reported at SOFR plus 475-525 basis points, with leverage ratios remaining reasonable [8][9] - The company noted a steady increase in transaction activity in the private middle market lending sector, which is expected to lead to higher loan origination volumes [8] Company Strategy and Development Direction - The company is focused on enhancing earnings power through scale, diversification, and disciplined capital deployment, as evidenced by a $250 million portfolio acquisition and the formation of a new joint venture [5][6] - The goal is to grow the new joint venture, PSSL2, to over $1 billion in assets, similar to existing joint ventures [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, highlighting strong private equity sponsor relationships and disciplined underwriting as key advantages [8] - The company anticipates that the increase in transaction activity will provide opportunities to exit some equity co-investments and reinvest in income-producing assets [8] Other Important Information - The company has a strong credit quality track record, with a loss ratio on invested capital of only 11 basis points annually since inception [12] - The sectors targeted for investment include business services, consumer, government services and defense, healthcare, and software and technology, which are considered recession resilient [10][11] Q&A Session Summary Question: How did the portfolio acquisition come about? - The acquisition was part of a joint venture with a third party, involving assets that were well-known and originated by the company [21][22] Question: Are there more opportunities like the portfolio acquisition? - The company is optimistic about future opportunities, particularly in sectors where they have existing relationships and expertise [21] Question: What impact did the government shutdown have on portfolio companies? - The company has minimal exposure to civilian government activities, focusing more on defense and intelligence, which were not impacted by the shutdown [24] Question: What is the NII contribution from the sold assets? - The NII contribution from the $310 million of assets sold is expected to ramp up over the next year or two as the new joint venture scales [29][30] Question: How does the current leverage ratio cover the dividend? - The company believes that a leverage ratio of 1.5 should easily cover the dividend, even with potential reductions in SOFR [43] Question: What trends are seen in the underlying portfolio companies? - The company is observing double-digit revenue growth and single-digit EBITDA growth across its portfolio, with a healthy overall portfolio despite some choppier credits [46][47] Question: Any consideration for buybacks given the stock price is below book value? - The board considers all options, including buybacks, especially given the current valuation [59]