Financial Data and Key Metrics Changes - For the quarter ended September 30, core net investment income was $0.15 per share compared to total distributions of $0.24 per share [4] - As of September 30, the net asset value (NAV) was $7.11 per share, down 3.4% from $7.36 per share in the prior quarter [14] - The debt-to-equity ratio was 1.6 times, with a target ratio of 1.25-1.3 times [14][15] Business Line Data and Key Metrics Changes - The portfolio totaled $1.3 billion, with 166 companies across 37 different industries [11][15] - The weighted average yield on debt investments was 11%, with 91% of the portfolio being floating rate [15] - The median leverage ratio on debt securities was 4.5 times, and the median interest coverage ratio was 2 times [7][15] Market Data and Key Metrics Changes - The company is encouraged by a steady increase in transaction activity in the private middle-market lending sector, expecting higher loan origination volumes [5][7] - In the core middle market, pricing on high-quality first lien loans is between $475-$525, with reasonable leverage and meaningful covenant protections [7][9] Company Strategy and Development Direction - The company is focused on rotating out of equity positions and redeploying capital into interest-bearing debt investments to increase core net investment income [4][5] - The strategy emphasizes capital preservation and disciplined investment in growing middle-market companies with high free cash flow conversion [12] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about the increase in transaction activity leading to opportunities for equity rotation and new income-producing investments [7] - The current market environment is seen as favorable for lenders with strong private equity sponsor relationships and disciplined underwriting [7][9] Other Important Information - The company has $48 million, or $0.73 per share, of undistributed spillover income, which will be used to cover shortfalls in net investment income versus the dividend [5] - The PSLF joint venture portfolio totaled $1.3 billion, with an average net investment income yield of 17% over the last 12 months [11] Q&A Session Summary Question: Why not right-size the dividend today? - Management is constantly evaluating the dividend and has substantial spillover income that needs to be paid out, balancing this with the equity rotation process [20] Question: Any updates on realization events for equity positions? - Management is seeing more activity and is hopeful for rotation opportunities, with a constructive backdrop for monetizing some equity positions [23] Question: What types of deals are being seen with increased investment activity? - The deals are a combination of add-on delayed draw term loans for existing companies and new platform investments with strong credit quality [45] Question: How does the company view dividend recaps? - Dividend recaps are approached cautiously, with a high bar for participation, focusing on alignment of interests and substantial equity beneath the loans [50] Question: What are the trends in the private equity space? - There is optimism for equity rotation as the M&A market is starting to pick up, with buyers and sellers beginning to find common ground [52][53]