Financial Data and Key Metrics Changes - For Q3 2025, the company reported invested income of $5.4 million or $0.80 per share, a slight decrease from $5.5 million in the previous quarter [15] - Total expenses remained stable at $2.4 million or $0.35 per share, consistent with the prior quarter [15] - The company recorded net unrealized losses on investments of $6.9 million or $1.02 per share, alongside a modest net realized loss of $424,000, resulting in a net loss of $4.3 million or $0.64 per share [15] - Recurring cash flows from the CLO portfolio totaled $8.7 million or $1.28 per share, an increase from $8 million or $1.18 per share in the previous quarter [15][16] - Total assets as of September 30, 2025, were $157.5 million, down from $166.1 million as of June 30, 2025 [16] Business Line Data and Key Metrics Changes - The portfolio's average junior OC cushion stands at 4.5%, with deals exposed to First Brands having a slightly higher cushion of 4.6% [6] - The weighted average gap yield of the portfolio increased from 12.75% to 13.07% due to refinancing activities [10] Market Data and Key Metrics Changes - The broader CLO equity market faced headwinds, primarily due to spread tightening in the broadly syndicated loans market [5] - The company noted a significant uptick in leveraged buyout (LBO) activity, with approximately $200 billion in deals announced during the first three quarters of 2025, surpassing the $164 billion recorded for all of 2024 [9] Company Strategy and Development Direction - The company remains focused on disciplined portfolio management and long-term total return, viewing market dislocations as opportunities [5][9] - The investment platform combines machine learning and natural language processing with traditional credit analysis, providing a competitive advantage in sourcing opportunities [11][12] - The company plans to utilize leverage opportunistically when attractive investment opportunities arise [16] Management's Comments on Operating Environment and Future Outlook - Management views the current environment as presenting opportunities in the CLO market, with expectations of a constructive outlook for CLO equity performance in a gradually easing monetary environment [10][19] - The company believes that CLOs provide an efficient way to access senior secured corporate loans and can offer an attractive risk-return profile across various credit cycles [19] Other Important Information - The company has started to tap its at-the-market equity issuance program, issuing approximately 26,600 shares for net proceeds of approximately $0.4 million [17] - Dividends of $0.22 per common share were distributed in July, August, September, and October, with plans for the same in November, December, and January, representing an annualized dividend yield of approximately 16% [17] Q&A Session Summary Question: Insights on the primary CLO market and investment opportunities - Management indicated that arbitrage returns in the primary CLO equity market are currently not adequate for large-scale participation, with more attractive opportunities in the secondary CLO equity markets [21][22][23] Question: Impact of resets and refinancings on expected yields - Management preferred not to comment on intra-quarter activities but noted that previous resets and refinancings contributed significantly to yield improvements [24][25] Question: Mix of opportunities between U.S. and European CLOs - The majority of the portfolio is focused on the U.S. CLO market, with occasional consideration of European CLOs, particularly single B positions that can provide stronger NAV protection [29] Question: Future ATM issuance versus share repurchase - Management is evaluating both ATM issuance and share repurchase options but considers it too early to prioritize one over the other [31] Question: Potential portfolio growth and leverage management - Management stated that portfolio growth will depend on the attractiveness of leverage costs and will continue to monitor conditions as they evolve [32][33]