Core Viewpoint - Many investors are anticipating further interest rate cuts in December, with a 93% probability assigned to this outcome, while dividend stocks like Plains All American Pipeline LP, Hercules Capital, and TORM plc are highlighted as attractive options for building a high-yield portfolio without resorting to Treasuries [3][4][6]. Company Summaries Plains All American Pipeline (PAA) - Plains All American Pipeline is a midstream company that transports and processes crude oil and natural gas liquids, generating steady cash flow through fee-based contracts, independent of commodity prices [5][7]. - The stock has appreciated by 83.27% over the past five years, not accounting for its substantial dividend [7]. - The company benefits from increased pipeline usage driven by long-term energy demand growth and booming exports from North America to Europe, with a forward dividend yield of 8.74% [8]. Hercules Capital (HTGC) - Hercules Capital is a business development company focused on venture lending, known for high dividend yields due to its tax structure that mandates nearly all income distribution to shareholders [9]. - The company offers a forward dividend yield of 10.23% and has received a Baa2 investment-grade rating upgrade from Moody's [5]. TORM plc (TRMD) - TORM benefits from Europe's transition to North American and Middle Eastern energy sources, necessitating longer-distance tanker transport [5].

Financial Data and Key Metrics Changes - For Q1 2025, total investment income was $22.5 million with a portfolio yield of 14.4%, compared to $29.3 million and 15.4% in the prior year period [26] - Net investment income for Q1 2025 was $10.7 million or $0.27 per share, down from $15.5 million or $0.41 per share in Q1 2024 [27] - The company's net increase in net assets resulting from operations for Q1 2025 was $12.7 million or $0.32 per share, compared to $8 million or $0.21 per share in Q1 2024 [28] Business Line Data and Key Metrics Changes - In Q1 2025, the company signed $315 million in term sheets with venture growth stage companies, up from $130 million in Q1 2024 [14] - Funded investments in Q1 2025 totaled $28 million, compared to $14 million in Q1 2024 [15] - The weighted average annualized portfolio yield for funded investments was 13.3%, slightly down from 13.5% in Q4 2024 [15] Market Data and Key Metrics Changes - The company noted a significant increase in demand for venture lending driven by a backlog of high-quality companies in the IPO queue and companies seeking financing for growth and acquisitions [8] - The company has observed no material impact from tariffs on its AI, software, B2B, and enterprise-focused portfolio companies [17] Company Strategy and Development Direction - The company is focused on portfolio diversification and investment sector rotation, particularly in high-potential sectors such as AI, software solutions, and cybersecurity [11] - The management aims to increase net investment income through debt investment portfolio growth and increasing balance sheet leverage [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving market conditions in the venture capital market, with increased fundraising activity and positive outlook for capital markets [21] - The company is monitoring the impact of geopolitical uncertainties and tariffs on its portfolio, but has not seen immediate effects [20][36] Other Important Information - The company ended Q1 2025 with total liquidity of $337 million, consisting of cash and available capacity under its revolving credit facility [25] - The Board declared a regular quarterly dividend of $0.30 per share, with an estimated spillover income of $42.5 million at the end of the period [29] Q&A Session Summary Question: Can you share your fundings outlook for the second quarter and beyond? - Management confirmed that the outlook for Q2 remains unchanged at $25 million to $50 million in fundings, expecting to make up for the shortfall from Q1 [33] Question: Can you speak to your views on credit today and the outlook going forward? - Management noted improved market conditions and increased fundraising activity, but acknowledged the challenges posed by geopolitical uncertainty [34][36] Question: What is your willingness to do share repurchase versus making new investments? - Management indicated a preference for growing the portfolio with debt capital rather than repurchasing shares, aiming to achieve long-term objectives [39] Question: What is the expected repayment and prepayment activity in the second quarter? - Management expects one to two prepayments per quarter, primarily from older vintages, which should have a low impact on net investment income [42] Question: Can you walk me through the dynamic of your debt investments at their floors? - Management explained that 35% of the portfolio is at the floor, which means they will not see a reduction in yield as rates go down [65][68]