Financial Data and Key Metrics Changes - For Q4 2025, the company reported investment income of $5.9 million, or $0.86 per share, compared to $5.4 million in the previous quarter [15] - Total expenses for the quarter were $2.5 million, or $0.37 per share, up from $0.35 in the prior quarter [15] - Net investment income increased to $3.4 million, or $0.49 per share, from $3 million, or $0.44 per share in Q3 [15] - The net loss for the quarter was $12.4 million, or $1.81 per share [16] - Total assets as of December 31, 2025, were $141.3 million, with total net assets of $98.6 million, resulting in a net asset value per share of $14.42, down from $16.89 as of September 30 [16][21] Business Line Data and Key Metrics Changes - The portfolio generated strong recurring cash flows totaling $9.8 million, or $1.44 per share, exceeding distributions and expenses by $0.41 per share, an increase from $8.7 million, or $1.28 per share in the prior quarter [16] - The weighted average GAAP yield of the portfolio decreased slightly to 12.99% at quarter end from 13.07% as of September 30 [11] Market Data and Key Metrics Changes - The CLO equity market faced significant challenges in 2025, with industry returns estimated at -10% for the year [9] - The U.S. loan market experienced substantial spread tightening of approximately 34 basis points [9] - The company noted that tightening credit spreads occurred unevenly, with higher quality credits being bid up while stressed names faced difficulties [9] Company Strategy and Development Direction - The company remains optimistic about CLOs, viewing them as attractive investment opportunities compared to other asset classes, with high demand expected to continue [6] - The focus is on disciplined portfolio management, opportunistic investments, and driving long-term total returns [7] - The company aims to utilize a data-driven approach to CLO equity investing, leveraging machine learning and natural language processing technologies [12] Management's Comments on Operating Environment and Future Outlook - Management highlighted a resilient macro environment with improving inflation and healthy corporate earnings, which could provide opportunities for CLO equity investing [6][7] - The company expects refinancing activity to deliver less spread compression in 2026 compared to 2025, potentially stabilizing the market [10] - Management expressed cautious optimism regarding improving M&A activity and new loan issuance in specific sectors [27] Other Important Information - The company executed share issuances through its ATM equity issuance program, issuing 30,680 shares for net proceeds of approximately $0.5 million [17] - Dividends of $0.22 per common share were distributed in the last quarter and are planned for the upcoming months [18] Q&A Session Summary Question: Can you comment on the investment environment in the primary versus secondary market? - Management noted opportunities in both markets but is currently more overweight in the secondary market [24] Question: Can you comment on refinancing and reset opportunities in your portfolio? - Management indicated multiple positions exiting non-call periods, expecting upside in a tightening CLO liability spread environment [25] Question: What is the expected supply of new loans in 2026? - Management anticipates a marginal increase in M&A activity and new loan issuance, with certain sectors lagging [26] Question: Is the slowing loan repricing momentum specific to the portfolio or a larger market dynamic? - Management confirmed it is both a larger market dynamic and observable in their portfolio, with a gradual slowing in loan repricing speeds [30][32] Question: How does the company view the ATM share issuance relative to stock trading at NAV? - Management stated they continue to utilize the ATM when trading at a premium, but the stock was trading at NAV recently [34]