Great Elm Capital (US:GECC)2024-11-01 15:27Financial Data and Key Metrics Changes - Great Elm Capital Corporation reported a net investment income (NII) of $4.1 million or $0.39 per share for Q3 2024, an increase from $3.1 million or $0.32 per share in Q2 2024, exceeding the quarterly distribution of $0.35 [10][20] - The net asset value (NAV) per share was $12.04 as of September 30, 2024, slightly down from $12.06 as of June 30, 2024 [10][20] - The asset coverage ratio was 166.2% as of September 30, 2024, compared to 171% as of June 30, 2024 [21] Business Line Data and Key Metrics Changes - The CLO joint venture strategy has seen early success, with approximately $33 million deployed through September 30, 2024, generating about $3 million in distributions [14][15] - The portfolio composition has shifted, with first lien loans and CLO positions now making up 60% of the portfolio, up from 44% last year [23] Market Data and Key Metrics Changes - Nonaccruals declined to $1.3 million, or less than 1% of portfolio fair value, down from $9.4 million, or approximately 3% of portfolio fair value, as of June 30, 2024 [11] Company Strategy and Development Direction - The company aims to enhance portfolio quality by increasing secured debt positions and focusing on CLO investments, which are expected to provide high returns over time [17][23] - The company is taking a measured approach to capital deployment amid macroeconomic uncertainties [24] Management's Comments on Operating Environment and Future Outlook - Management expects NII to decrease in Q4 2024 due to the uneven nature of CLO distributions at the start of their life, but anticipates normalization over time as the asset base expands [12] - The company remains optimistic about the future, believing it is well-positioned to maintain dividend coverage and deliver attractive risk-adjusted returns [25] Other Important Information - The company successfully issued $36 million of 8.125% GECCH notes due 2029, extending its debt maturity profile into 2026 and beyond [18] - A cash distribution of $0.35 per share for Q4 2024 has been authorized, equating to an 11.6% annualized dividend yield on the September 30 NAV [22] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded with management expressing satisfaction with the quarter's performance and a commitment to continued investor dialogue [32][34]