COCONUT CREEK, Fla. and NEW YORK, Jan. 05, 2026 (GLOBE NEWSWIRE) -- Willis Lease Finance Corporation (NASDAQ: WLFC) (“WLFC” or the “Company”), the leading lessor of commercial aircraft engines and a global provider of aviation services, and Blackstone Credit & Insurance (“BXCI”) announced a strategic aircraft engine leasing partnership with plans to deploy over $1 billon in the next two years in current and next generation aircraft engines and select aircraft. This unique partnership brings together a leadi ...

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Financial Data and Key Metrics Changes - For calendar Q3, the company reported GAAP net income of $0.11 per share and net investment income of $0.23 per share, with a weighted average GAAP yield for the CLO portfolio at 15.5% [9][10] - The NAV as of September 30th was $5.99 per share, with cash and cash equivalents totaling $20.1 million, resulting in a NAV-based total return for the quarter of 9.6% annualized [13][21] Business Line Data and Key Metrics Changes - The CLO portfolio increased by 20% to $380 million, with new purchases totaling $116 million, of which 62% was in CLO debt and 38% in CLO equity [11][12] - CLO equity represented 51% of total CLO holdings, down from 53% at the beginning of the quarter, while European CLO investments accounted for 14%, roughly unchanged quarter-over-quarter [11][12] Market Data and Key Metrics Changes - The credit markets rallied during the third calendar quarter, supported by a dovish shift from the Federal Reserve, leading to tightened corporate credit and CLO spreads [4][5] - In the U.S. leveraged loan market, lower quality CCC-rated loans fell several points amid default concerns, while single B-rated loans advanced due to sustained CLO demand [10] Company Strategy and Development Direction - The company is focusing on increasing its portfolio allocation to mezzanine debt to gain more attractive yields while reducing exposure to new issue equity [6][7] - The strategy emphasizes active trading to capitalize on mispricings and manage risk effectively, with a preference for secondary market acquisitions over new issues [6][16] Management's Comments on Operating Environment and Future Outlook - Management noted that volatility and credit dispersion remain defining features of the corporate credit markets, with concerns about idiosyncratic volatility highlighted by recent bankruptcies [19][20] - The company expects elevated repricing activity and ongoing credit dispersion to create opportunities for outperformance through active portfolio management [23] Other Important Information - The company increased its credit hedge portfolio to approximately $90 million by the end of the quarter, equating to about 40% of its NAV, to provide downside protection [21] - Following the quarter end, the synthetic short position in credit hedges reached over $150 million in high-yield equivalents [21] Q&A Session Summary Question: What drove the increase in credit hedges from the end of September to the end of October? - The increase was primarily due to the growth in portfolio size and leverage, ensuring liquidity during market downturns [26][27] Question: Was the decrease in the CLO portfolio a more cautious view on credits? - The decrease was not necessarily a reflection of a cautious view but may have been due to distributions and markdowns in prices during the quarterly payment date [30][31] Question: Can you discuss the appetite for leverage and potential unsecured debt issuance? - The company is close to being fully invested and could potentially increase leverage to around $400 million, constrained by regulatory restrictions [40][41] Question: What are the predictions for CLO supply next year? - Predictions are uncertain, but there may be more reset and refinancing activities rather than new issues, depending on loan supply and market conditions [44][46] Question: How does AI impact the CLO market? - AI will affect the loan market, creating winners and losers, which raises concerns about credit dispersion and overall portfolio performance [48][50]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income of $0.11 per share and net investment income of $0.23 per share, with a weighted average GAAP yield of 15.5% on the CLO portfolio [9][11][12] - The NAV as of September 30 was $5.99 per share, with cash and cash equivalents totaling $20.1 million, and a NAV-based total return for the quarter of 9.6% annualized [12][21] Business Line Data and Key Metrics Changes - The CLO portfolio increased by 20% to $380 million, with new purchases totaling $116 million, of which 62% was in CLO debt and 38% in CLO equity [11][12] - CLO equity represented 51% of total CLO holdings, down from 53% at the beginning of the quarter [11] Market Data and Key Metrics Changes - The credit markets rallied in Q3, supported by a dovish shift from the Federal Reserve, leading to tightened corporate credit and CLO spreads [4][5] - In the US leveraged loan market, lower quality CCC-rated loans fell amid default concerns, while single B-rated loans advanced due to sustained CLO demand [10] Company Strategy and Development Direction - The company is focusing on increasing its allocation to mezzanine debt due to attractive yields and downside protection, while reducing exposure to new issue equity [6][7] - The strategy emphasizes active trading to capitalize on mispricings and manage risk effectively, with a preference for secondary market acquisitions [6][17] Management's Comments on Operating Environment and Future Outlook - Management noted that volatility and credit dispersion are defining features of the corporate credit markets, with concerns about idiosyncratic credit issues impacting performance [20][21] - The company expects elevated repricing activity and ongoing credit dispersion to create opportunities for outperformance through active portfolio management [25] Other Important Information - The company has increased its credit hedging portfolio to approximately $90 million, equating to about 40% of NAV, to provide downside protection [21][22] - Following the quarter end, the synthetic short position in credit hedges reached over $150 million as of October 31 [22] Q&A Session Summary Question: What drove the increase in credit hedges from the end of September to the end of October? - The increase was primarily due to the growth in portfolio size and leverage, ensuring liquidity during market downturns [28][29] Question: Is there a more cautious view on credits reflected in the decrease of the CLO portfolio? - The decrease was attributed to quarterly payment distributions and markdowns in CLO equity prices, not necessarily a more cautious view [35][36] Question: Can you discuss the appetite for leverage and potential unsecured debt issuance? - The company is close to being fully invested and could increase leverage to around $400 million, constrained by regulatory restrictions [39][40] Question: What are the predictions for CLO supply next year? - Predictions are uncertain, but there may be more reset and refinancing activities rather than new issues, depending on market conditions [42][43] Question: How does AI impact the CLO market and credit flow? - AI may create winners and losers in the loan market, affecting CLO equity returns and increasing concerns about credit dispersion [45][46]

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 prior quarter [15] - Total expenses remained stable at $2.4 million or $0.35 per share, consistent with the previous 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, exceeding distributions and expenses by $0.26 per share, up from $8 million or $1.18 per share in the prior quarter [15][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] Management's Comments on Operating Environment and Future Outlook - Management views the current environment as broadly positive for CLO equity, especially with anticipated rate cuts leading to improved corporate refinancing conditions [9] - 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 - As of September 30, 2025, total assets were $157.5 million, with total net assets of $114.9 million, resulting in a net asset value per share of $16.89 [16] - The company distributed dividends of $0.22 per common share in July, August, September, and October, with plans for the same in the following months, 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 [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 for European CLOs, particularly single B positions that can provide stronger NAV protection [29] Question: Future ATM issuance versus share repurchase - Management is evaluating both options but believes it is too early to consider share repurchase as a viable option at this stage [31] Question: Potential portfolio growth and leverage management - Management will add leverage when costs are attractive, and they continue to monitor conditions to modulate leverage levels as needed [32][33]

Group 1 - The article discusses the potential interest in senior securities issued by CLO equity CEFs, highlighting their minimum coverage ratio as a positive aspect [1] - The investment group European Small Cap Ideas focuses on high-quality small-cap investment opportunities in Europe, emphasizing capital gains and dividend income [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1]

Financial Data and Key Metrics Changes - The company generated net investment income less realized losses from investments of $0.16 per share, consisting of $0.23 of net investment income offset by $0.07 of realized losses from investments [5][14] - The NAV as of June 30 was $7.31 per share, up 1.1% from $7.23 as of March 31 [6] - The company recorded GAAP net income of $58 million or $0.47 per share for the second quarter, compared to GAAP net losses of $0.84 per share in the previous year [16] Business Line Data and Key Metrics Changes - Recurring cash flows for the second quarter were $85 million or $0.69 per share, exceeding quarterly aggregate common distributions and total expenses by $0.08 per share [6][12] - The company deployed $86 million into new investments during the quarter, taking advantage of market dislocation to acquire CLO equity positions at attractive levels [7][19] Market Data and Key Metrics Changes - The S&P UBS Leveraged Loan Index experienced a total return of 2.3% for the second quarter, recovering from a decline in April [20] - The trailing twelve-month default rate for loans stood at 1.1% as of June 30, well below the long-term average of 2.6% [21] Company Strategy and Development Direction - The company is focused on refinancing and reset activities to reduce CLO financing costs and enhance net investment income [9][25] - A second strategic CLO collateral manager partnership was established, which is expected to enhance shareholder returns over time [11][62] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for the portfolio, citing strong recurring cash flows and a robust pipeline of refinancing opportunities [26] - The company believes that the market dislocation presents opportunities for CLO equity investors with the right positioning and patience [25] Other Important Information - The company issued $41 million of common stock at a premium to NAV, resulting in an accretion of NAV by $0.02 per share during the quarter [10] - The company's asset coverage ratios for preferred stock and debt were 243% and 525%, respectively, exceeding statutory requirements [17] Q&A Session Summary Question: What drove the realized losses this quarter? - Realized losses included $0.02 from trading losses and $0.05 from the reclassification of three CLO equity positions that were past their reinvestment period [35][36] Question: Can you shed light on the significant sell-off in CLO equity recently? - The sell-off was primarily driven by more sellers than buyers, with concerns about tariff-related increases in defaults contributing to market sentiment [82][83] Question: How sensitive are repayments to lower rates? - Repayments are driven by bullish or bearish sentiment on spreads rather than interest rates, with higher repayments typically occurring in strong debt markets [68][70]

Financial Data and Key Metrics Changes - The company generated net investment income and realized capital gains of $0.33 per share for Q1 2025, consisting of $0.28 of net investment income and $0.05 of realized capital gains [7] - The NAV as of March 31 was $7.23 per share, a 13.7% decrease from $8.38 per share at year-end [8] - The company's first quarter GAAP net loss was $97.5 million, with total investment income of $52.3 million and realized capital gains of $5.3 million [16] Business Line Data and Key Metrics Changes - The company priced three new CLO equity investments and reset nine positions in its portfolio, lengthening reinvestment periods to five years [5] - During Q1, sales and paydowns of CLO debt in the portfolio totaled $48.5 million, generating $0.05 per share of realized gains [10] - Approximately 18% of the CLO equity portfolio based on fair value are new investments or recently reset CLOs, scheduled to make initial payments in subsequent quarters [12] Market Data and Key Metrics Changes - The S&P UBS Leveraged Loan Index generated a total return of 0.6% during Q1, with a trailing twelve-month default rate of 82 basis points, well below the long-term average of 2.6% [20][21] - The weighted average spread of the CLO's underlying loan portfolios stood at 3.36% as of March 31, down from 3.49% at year-end [22] - The percentage of loans trading below 80 within the CLOs stood at 2.9%, more favorable than the market average of 4.6% [26] Company Strategy and Development Direction - The company has completed its planned portfolio rotation from CLO debt into CLO equity and other investments prior to the recent market volatility [10] - The focus remains on enhancing net investment income and cash flow through proactive investment strategies, particularly in resetting and refinancing CLOs [29] - The company maintains 100% fixed-rate financing with no maturities prior to 2028, providing protection from future interest rate rises [27] Management's Comments on Operating Environment and Future Outlook - Management views the recent market price fluctuations as short-term and not indicative of concerns specific to the portfolio [9] - The company believes that current discounted loan opportunities will benefit it in the medium term, similar to past periods of volatility [10] - Management remains optimistic about the stability of cash flows and the potential for increased CLO refinancing and reset activity as markets stabilize [28] Other Important Information - The company utilized its at-the-market program to issue $66 million of common stock at a premium to NAV, resulting in NAV accretion of $0.02 per share [13] - The company declared common regular monthly distributions for Q3 2025 of $0.14 per share [14] Q&A Session Summary Question: What will it take for the market to recognize the stability of CLO cash flows? - Management noted that cash flows have historically been stable and continue to come in despite market fluctuations [32][34] Question: Will the pace of resets and refinancings continue? - Management indicated that while the pace may slow, they expect single to double-digit resets per quarter under current market conditions [48][50] Question: What accounts for the difference between gross and net capital deployed? - The difference is due to significant rotation from CLO debt into CLO equity, which reduces the net capital figure [54] Question: Why was the pace of deployment slower in April? - Management explained that market volatility led to a slowdown in CLO equity trading, affecting deployment speed [60][62] Question: How does the company handle loan loss reserves compared to banks? - Management clarified that while they do not reserve for loan losses like banks, their effective yields account for future losses, and they focus on cash generation [90][92]

Financial Data and Key Metrics Changes - The company generated net investment income and realized capital gains of $0.33 per share for Q1 2025, consisting of $0.28 of net investment income and $0.05 of realized capital gains, compared to $0.12 per share in Q4 2024 [6][15] - The company's NAV as of March 31 was $7.23 per share, a 13.7% decrease from $8.38 per share at year-end [6][7] - The first quarter GAAP net loss was $97.5 million, with total investment income of $52.3 million and realized capital gains of $5.3 million [15] Business Line Data and Key Metrics Changes - The company priced three new CLO equity investments and reset nine positions in its portfolio, lengthening reinvestment periods to five years [4][5] - Sales and paydowns of CLO debt in the portfolio totaled $48.5 million during the first quarter, generating $0.05 per share of realized gains [9] - Approximately 18% of the CLO equity portfolio based on fair value are new investments or recently reset CLOs, scheduled to make their initial payments in subsequent quarters [11] Market Data and Key Metrics Changes - The S&P UBS Leveraged Loan Index generated a total return of 0.6% during Q1 2025, with a trailing twelve-month default rate of 82 basis points, well below the long-term average of 2.6% [18][19] - The weighted average spread of the CLO's underlying loan portfolios stood at 3.36% as of March 31, down from 3.49% at year-end [20] - The total issuance volume for CLOs reached $153 billion during Q1 2025, significantly above the $88 billion from Q1 2024 [23] Company Strategy and Development Direction - The company has completed its planned portfolio rotation from CLO debt into CLO equity and other investments prior to the recent market volatility [9] - The focus remains on enhancing net investment income and cash flow through proactive investment strategies, including resetting and refinancing CLOs [28] - The company maintains a 100% fixed-rate financing structure with no maturities prior to 2028, providing protection against future interest rate rises [25] Management's Comments on Operating Environment and Future Outlook - Management views the recent market price fluctuations as short-term and not indicative of fundamental issues within the portfolio [7][28] - The company believes that current discounted reinvestment opportunities will translate into good returns in the medium term, similar to past periods of volatility [9][28] - Management remains optimistic about the stability of cash flows from CLO equity, despite recent market challenges [32][41] Other Important Information - The company utilized its at-the-market program to issue $66 million of common stock at a premium to NAV, resulting in NAV accretion of $0.02 per share [12] - The company declared common regular monthly distributions for Q3 2025 of $0.14 per share [13] Q&A Session Summary Question: What will it take for the market to recognize the stability of CLO cash flows? - Management noted that cash flows from CLO equity have historically been stable, even during market downturns, and emphasized the importance of cash generation [31][32] Question: Will the pace of resets and refinancings continue? - Management indicated that while the pace may slow compared to Q1, they expect single to double-digit resets per quarter under current market conditions [45][46] Question: What accounts for the difference between gross and net capital deployed? - The difference is attributed to the significant rotation of CLO debt into CLO equity, which reduces the overall net capital figure [50][51] Question: Why was the pace of deployment slower in April? - Management explained that market volatility led to a slowdown in CLO equity trading, affecting deployment rates, but they expect activity to pick up as the market stabilizes [56][58] Question: How does the company handle loan loss reserves compared to banks? - Management clarified that while they do not create reserves like banks, their effective yields account for future losses, and they focus on cash generation for distributions [86][88]

Company Overview - Pearl Diver Credit Company Inc. is an externally managed, non-diversified, closed-end management investment company focused on maximizing total return and generating high current income through investments primarily in equity and junior debt tranches of CLOs [4] - As of March 31, 2025, the company has approximately $2.8 billion in assets under management, backed by institutional investors including public pension plans and university endowments [6] Upcoming Financial Results - The company will release its first quarter 2025 financial results before market open on April 29, 2025, and will host a conference call at 11:00 a.m. Eastern Time to discuss these results [1][2] Conference Call Details - Investors and analysts can participate in the conference call by dialing the provided numbers approximately 10 minutes prior to the start [2] - A live audio webcast of the conference call will be available on the company's website [2] Company Management and Strategy - Pearl Diver Capital LLP, founded in 2008, specializes in CLO investing and employs advanced analytics to identify opportunities in the CLO market [5] - The firm has established relationships with over 80 CLO managers, providing access to critical credit information while avoiding conflicts of interest [6]