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 later reduced to 1.4 times after 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, indicating a strong increase in assets under management [12] - The weighted average yield on debt investments was 10.2%, with approximately 99% of the debt portfolio being floating rate [17] - The portfolio maintained a median leverage ratio of 4.5 times and a median interest coverage of 2 times [9][18] Market Data and Key Metrics Changes - The pricing on high-quality first lien term loans was reported at SOFR plus 475-525 basis points, with reasonable leverage and meaningful covenant protections [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 for the new joint venture, PSSL2, is to grow it 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 opportunities for capital deployment in core middle market companies with lower leverage and higher spreads [8][11] - The company remains committed to delivering a stable dividend stream while preserving capital and creating long-term value for stakeholders [19] 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 portfolio is well-diversified, comprising 164 companies across 50 industries, with a focus on sectors that are recession resilient [10][12] 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 to the company, which originated a couple of years ago [21][22] Question: Are there more opportunities like the portfolio acquisition? - Management indicated that they are always looking for similar opportunities and emphasized the value of acquiring assets they are familiar with [21][22] 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 expected NII contribution from the recent asset sales? - The NII contribution from the $250 million portfolio acquisition is expected to add about 1-2 cents per share for a full quarter [29] Question: How does the current leverage ratio cover the dividend? - Management believes that a leverage ratio of 1.5 should easily cover the dividend, even with potential reductions in SOFR [43] Question: What trends are being observed in the underlying portfolio companies? - The company is seeing double-digit revenue growth and single-digit EBITDA growth across its portfolio, with a healthy overall portfolio despite some choppier credits [46][47] Question: Is there any consideration for stock buybacks given the stock price is trading below book value? - The board considers all options, including buybacks, and acknowledges that the current stock price appears to be a good value [59]