Financial Data and Key Metrics Changes - For the quarter ended September 30, core net investment income was $0.28 per share, with GAAP net investment income also at $0.28 per share [4][14] - As of September 30, net asset value (NAV) was $10.83 per share, down 1.2% from $10.96 per share in the previous quarter [15] - The debt to equity ratio was 1.6 times, which was reduced to 1.4 times after subsequent asset sales [15][16] Business Line Data and Key Metrics Changes - The company invested $633 million in 11 new and 105 existing portfolio companies at a weighted average yield of 10.5% during the quarter [12] - The portfolio grew to $2.8 billion, up from $2.4 billion in the prior quarter [11] - The portfolio remains well-diversified, comprising 164 companies across 50 industries, with 90% in first lien senior secured debt [16] Market Data and Key Metrics Changes - The pricing on high-quality first lien term loans in the core middle market is SOFR plus 475-525 basis points, with leverage being reasonable [8] - The median leverage ratio of the portfolio's debt securities was 4.5 times, and the median interest coverage was 2 times [8][17] - Non-accruals represented only 0.4% of the portfolio at cost and 0.2% at market value, indicating strong credit metrics [9][16] Company Strategy and Development Direction - The company is focused on enhancing earnings power through scale, diversification, and disciplined capital deployment, as evidenced by the $250 million portfolio acquisition and the formation of a new joint venture [4][5] - The goal is to grow the PSSL2 joint venture to over $1 billion in assets, similar to existing joint ventures, which should lead to net investment income exceeding current dividends [5][12] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about a steady increase in transaction activity in private middle market lending, which is expected to lead to higher loan origination volumes [6] - The company believes the current environment favors lenders with strong private equity sponsor relationships and disciplined underwriting, areas where it has a clear advantage [6][10] - Management noted that the average consumer is relatively soft, but sectors like government services, defense, and healthcare remain strong [22] Other Important Information - The company has invested $8.4 billion in 539 companies since inception, with a loss ratio on invested capital of only 11 basis points annually [11] - The weighted average yield on debt investments was 10.2%, and approximately 99% of the debt portfolio is floating rate [16] 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 already well-known to the company, which originated a couple of years ago [20] Question: Are you seeing any bifurcation in the market? - There is a general reversion to the mean in the economy, with some sectors like logistics still dealing with post-COVID issues, while government services and healthcare remain strong [21][22] Question: What is the NII contribution from the assets sold? - The $250 million portfolio acquisition is expected to add about 1-2 cents per share of NII for a full quarter, while the new joint venture will take time to ramp up [28] Question: How are new loan spreads stabilizing? - New loans are being accessed at SOFR plus 175 basis points, with average spreads in the 475-525 range, reflecting a focus on solid credit [36] Question: What is the strength of the underlying portfolio companies? - The portfolio is seeing double-digit revenue growth and mid-single-digit EBITDA growth, with a healthy overall portfolio despite some choppier credits [44][46] Question: Any consideration for buybacks given the stock price? - The board considers all options, including buybacks, especially given the current valuation [58]