Financial Data and Key Metrics Changes - The company generated net investment income (NII) and realized gains of $0.44 per share in Q1 2025, down from $0.54 per share in Q4 2024, comprised of $0.40 of NII and $0.04 of realized capital gains [5][20] - The NAV per share decreased to $14.16 as of March 31, 2025, from $14.99 as of December 31, 2024, representing a 5.5% decline [7][22] - Recurring cash flows for Q1 2025 were $16,500,000 or $0.71 per share, compared to $16,100,000 or $0.82 per share in Q4 2024 [8][9] Business Line Data and Key Metrics Changes - The decline in NII was primarily due to a significant drop in SOFR and spread compression on syndicated loans, adversely impacting earnings from the CLO equity portfolio [6][15] - The company deployed approximately $120,000,000 of gross capital across 27 CLO debt purchases and nine CLO equity purchases during Q1 2025 [13] - The trailing twelve-month default rate decreased slightly to 80 basis points as of March 31, remaining well below the historical average of 2.6% [16][17] Market Data and Key Metrics Changes - CLO issuance in Q1 2025 was $49,000,000,000, down from $59,000,000,000 in Q4 2024, but still healthy by historical standards [18] - The S&P UBS Leveraged Loan Index generated a total return of 60 basis points during Q1 2025, with a recent increase of 1.8% for the year as of May 23 [14] Company Strategy and Development Direction - The company is focused on capitalizing on market volatility by purchasing CLO debt and equity at discounted prices, which is expected to yield positive returns over time [11][24] - The management aims to extend the weighted average remaining reinvestment period of the CLO equity portfolio and seeks longer reinvestment period opportunities [18] Management's Comments on Operating Environment and Future Outlook - Management indicated that the decline in NII is largely driven by the drop in short-term rates, and the new distribution rate reflects the company's near to medium-term earnings potential [24] - The company believes it is well-positioned to continue generating strong returns for shareholders despite current market conditions [25] Other Important Information - The company declared three monthly distributions of $0.13 per share for the third quarter of 2025, a decline from previous distributions [9][21] - As of April 30, 2025, the company had $33,000,000 of cash and undrawn revolver capacity available for investment [19][22] Q&A Session Summary Question: About the reduction in dividend distribution - Management clarified that the reduction in dividend distribution is due to changes in SOFR and not related to capital losses, emphasizing that the majority of the portfolio is CLO BBs which fluctuate with rates [26][36] Question: Clarification on CLOs and default rates - Management confirmed that the change in distribution rate is principally driven by the change in SOFR, with no credit-related issues affecting the portfolio [35][37]