Financial Data and Key Metrics Changes - The company generated net investment income and realized gains of $0.39 per share in Q2 2025, compared to $0.44 per share in the previous quarters [19] - Recurring cash flows were $18 million or $0.67 per share, down from $16 million or $0.71 per share in Q1 2025 [6] - The NAV as of June 30 was $14.08 per share, slightly down from $14.16 per share as of March 31 [7][21] - The company recorded a non-annualized GAAP return of 3.5% for the second quarter [7] Business Line Data and Key Metrics Changes - The company opportunistically deployed $40 million into discounted CLO debt and equity securities during the quarter [8] - The company repurchased over 488,000 shares of common stock for a total of $6.5 million, resulting in NAV accretion of $0.02 per share [21] Market Data and Key Metrics Changes - The S&P UBS Leveraged Loan Index had a total return of 2.3% in Q2 and was up almost 3% year-to-date as of June 30 [14] - The trailing twelve-month default rate increased to 1.1% as of June 30, remaining below the historical average of 2.6% [14] - New CLO issuance was $51 billion in Q2, with reset and refinancing activity at $44 billion and $9 billion, respectively [15][16] Company Strategy and Development Direction - The company plans to continue buying back stock as market opportunities arise, viewing this as a strong investment [24] - The management emphasized the importance of maintaining a strong liquidity position to capitalize on attractive investment opportunities [16][24] Management's Comments on Operating Environment and Future Outlook - Management noted that market volatility in April created attractive buying opportunities for discounted CLO securities [7][24] - The company remains confident in its ability to generate strong returns and is well-positioned to deploy capital into investments offering compelling risk-adjusted returns [16][24] Other Important Information - The company declared three monthly distributions of $0.13 per share for Q4 2025, maintaining the distribution level from the previous quarter [12][20] - As of July month-end, the company's NAV was estimated to be between $14.34 and $14.44 per share, indicating a recovery from June [22] Q&A Session Summary Question: Can you elaborate on the all-in yield from the debt portion of your CLO portfolio? - Management explained that CLO debt is sensitive to short-term rates and that a Fed rate movement could lead to lower income in the fall, while CLO equity is less affected by rate changes [28][30] Question: Is the push out of loan maturities indicative of credit distress? - Management clarified that issuers are refinancing their debt due to a strong market, allowing them to extend maturities without indicating distress [38] Question: How is the pipeline for new investments shaping up? - Management indicated a strong pipeline for both CLO BB debt and equity, with plenty of opportunities in the market [48] Question: What is the status of the share buyback program? - Management noted that the buyback program has been effective in reducing the discount to NAV and that they plan to continue this strategy [50][52] Question: Is there a possibility of a special distribution at the end of the year? - Management stated that while recurring cash flows are currently in line with expenses and distributions, the potential for a special distribution depends on taxable income exceeding distributions [62] Question: Why hasn't the coupon on the BB CLO debt changed dramatically? - Management explained that while spreads have tightened, the overall yield or coupon of CLO BBs has remained stable due to various market factors [66] Question: What is the status of the OC cushion? - Management noted that the OC cushion has declined slightly but remains robust, with plenty of cushion available [70]