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TCG BDC, Inc. (CGBD 1.42%)
Q3Â 2020 Earnings Call
Nov 5, 2020, 11:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by and welcome to the TCG BDC Inc Third Quarter Earnings Conference Call. [Operator Instructions] After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]
I would now like to turn the conference to your speaker today, Daniel Harris, Head of Investor Relations. Please go ahead, Sir.
Daniel Harris -- Head of Investor Relations
Good morning and welcome to TCG BDC's Third Quarter 2020 Earnings Call. Last night we issued an earnings press release and detailed earnings presentation with our quarterly results, A copy of which is available on the TCG BDC Investor Relations website. Following our remarks today, we will hold a question-and-answer session for analysts and institutional investors. This call is being webcast and a replay will be available on our website. Any forward-looking statements made today, do not guarantee future performance and undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors section of our annual report on Form 10-K that could cause actual results to differ materially from those indicated TCG BDC assumes no obligation to update forward-looking statements at anytime.
And with that, I'll turn the call over to our Chief Executive Officer. Linda Pace
Linda Pace -- Head of Carlyle Loan and Structured Credit Investment Committee member
Thank you, Dan. Good morning everyone and thank you for joining us on our call this morning to discuss our third quarter 2020 results.Joining me on the call today is our Chief Investment Officer Taylor Boswell and our Chief Financial Officer, Tom Hennigan. I'm going to focus my remarks today across three areas. First I once again start with a review of our portfolio, which continues to be in good shape. Second, I'll provide a quick review of our third quarter results. And third, will discuss all of the positive developments at TCG BDC that we've completed over the past year that has led to significantly improve performance. Let's start with a discussion of our current credit position which was stable in the quarter and continues to perform well despite the significant economic headwinds this year. Several key measures highlight our strong and improving outlook. We had zero new non-accruals during the quarter. In fact, the number of non-accruals across our portfolio has been flat the past three quarters. And on both a fair value and cost basis non-accruals ticked down in the quarter. The amount of investments in our risk level three to five buckets ticked down 2% sequentially during the third quarter.
Recall, but last quarter, we changed our risk rating methodology to be more forward-looking based on business trends rather than backward looking, So improvement in these ratings gives us further confidence in our forward credit profile and our watchlist also continues to trend in a positive direction, and we believe the vast majority of amendment activity in our portfolio is now behind us. Along with other more granular factors these indicators give us increased confidence in the positive trajectory of our portfolio. Moving on to an overview of our financial results for the third quarter, we generated net investment income of $0.36 per share, net of our preferred dividend expense. This comfortably covered our $0.32 fixed dividend that we announced for the fourth quarter. We also announced a $0.04 special dividend so in total, we have declared a $0.36 dividend for the fourth quarter. We are just under a 10% ROE. Net asset value per share increased 1.4% quarter-over-quarter to $15.10 from $14.80 last quarter, as we had our second consecutive quarter of net gains in the portfolio. In a stable macro and market environment, we would expect a continued gradual recovery in our NAV over the coming quarters. Lastly, I would like to put the strong position of our business today in perspective which highlights our improved operating outlook. Over the past year we have undertaken significant steps, some plainly visible while others are more behind the scenes to achieve our goal of delivering sustainable income to our shareholders. We optimized our investment portfolio. We recently created our second joint venture shifting $250 million of loans from our balance sheet into this vehicle and earlier this year, we sold approximately $200 billion of loans. In both cases, these actions created capacity on our balance sheet for new investments and reduced leverage. We also identified and quickly extinguished an under performing strategy in our portfolio, our small borrowers last out unitranche program which help drive improved credit performance.
In addition, we focused on our investment process, we implemented a strong sector alignment for all investment professionals, installed a new Head of Underwriting, beefed up our origination team and improved the process flows for all of our investment committees. We also created a stronger All Weather balance sheet. Over the past year, we raised $115 million of unsecured debt and $50 million in convertible preferred equity with limited NAV dilution and which affirmed our strong relationship with Carlyle. Financial leverage declined to 1.2 times as of 3Q from 1.6 times earlier this year and pro forma for our recent second joint venture leverage declined further to 1.0 times. Given the strength and performance of our balance sheet as well as the incredible value we see an CGBD shares, we are now in a position to restart a steady repurchase strategy as our trading window opens. Our Board of Directors recently increased our repurchase authorization to $150 million and extended the program to November 2021. And lastly, we set a sustainable and attractive fixed dividend. Our $0.32 fixed dividend currently equates to current mid teens dividend yield with upside from special distributions and has been set to reflect the new operating environment and exceptionally low interest rates. We are incredibly confident in our ability to deliver this level of dividend to our shareholders over the long term. These initiatives have all been done with a focus on improving shareholder value. Our goal remains to deliver sustainable income. And while COVID impact CGBD and our entire industry in 2020. We remain confident in our ability to meet this objective.
Let me now turn the call over to our Chief Investment Officer Taylor Boswell.
Taylor Boswell -- Chief Information Officer of Direct Lending
Thank you, Linda. As usual, I will begin today with a summary of what Carlyle's proprietary macro research is telling us about the global economy. After that I'll provide comment on both the evolution of credit in our portfolio, as well as the new deal environment. From Carlyle's perch, we witnessed the global economy continue its recovery in the third quarter. Those significant dispersion has emerged across industries and geographies. China continues to lead the global recovery, largely driven by domestic demand. In Europe, the travel and tourism sectors are bearing the brunt of the economic impact from a second wave of infections. Posing risk too many Southern European economies. While activity continues to improve and other areas of the continent. In the US, the economic impact of new infections has similarly been focused in the hospitality, travel and energy sectors. As hotel occupancy remained stuck at half capacity, airline passenger volumes hover 70% below year ago activity and gasoline demand has stagnated 10% below 2019 levels. However, more broadly, business and consumer spending remain robust and continue to drive the US recovery, led by software and services companies and searching online spending. More recently, we have been carefully monitoring the impact of second waves of COVID across several geographies, including the US. While our current view is that future disruptions will be less severe than those of the first half of 2020.
We do not expect the path recovery will be without volatility. This is a perspective, we have held since the beginning of this crisis and one which continues to strongly inform our portfolio management decisions at CGBD. On the portfolio side, the last several months have generally played out as expected, transitioning out of an active period of COVID related covenant amendments and into a third more tempered and likely longer running stage of this credit cycle. At this point, less COVID impacted borrowers are generally seeing recoveries in demand and financial performance. While for more COVID impacted borrowers problems have been fully assessed and sufficiently addressed as such there were now very few known pending covenant breaches or liquidity issues across our portfolio. In general, heavily COVID impacted borrowers have secured sufficient liquidity and covenant breathing room for the forward three to six quarter period providing significant runway for value recovery to both credit and equity participants in these capital structures. CGBD portfolio level credit metrics are evidencing these same trends as Linda mentioned earlier, but it's certainly worth reiterating we had no new non-accruals in the third quarter, while also experiencing positive valuation and risk ratings migration. With regards to new investments, the uptick in activity, we noted at the time of our last call transitioned into a brisk transaction environment in recent months.
Our new originations in Q2 and Q3 concentrated in attractive incremental financings typically at low leverage points with high quality borrowers that we know well as well as in the ABL space where we have transacted on a number of compelling opportunities today, the preponderance of new deal activity is related to regular way M&A demand. Both new platform and add-on acquisitions, as sale processes delayed by COVID resume while other seek to transact ahead of potential changes in tax and regulatory regimes. With higher transaction activity, we expect both repayments and new deployment to increase in the coming quarters. Concurrently, we are also seeing a normalization of the competitive environment with syndicated markets reopening and the private credit market continuing on it's path to healing competition for assets in the technology and healthcare spaces has been particularly robust while other profiles, continue to offer differentiated relative value that said, more broadly speaking Spreads leverage and documentation terms generally remain comparable to or more favorable than the pre-COVID market. In our estimation, it remains an attractive environment for new deployment and we are very active across our footprint. Before concluding my comments, allow me to share a few additional thoughts first, let me say how pleased I am by the performance of our team here at Carlyle through the last several quarters.
It feels as if we have compressed an entire economic cycle and the five years' worth of hard work that come with it in the just six months layering on top of that the personal challenges this crisis has thrown at many has only increased the degree of difficulty, we are deeply appreciative and proud of the team's efforts. Second, it should also be noted that this cycle is in many respects, the first severe credit test for what is a young private credit industry given that the preponderance of this market's growth in evolution have occurred in the relatively benign environment of the last 10 years encouragingly both in our portfolio and the market we largely see evidence of an asset class performing well and as expected, given the severity of the economic shock. For this and other reasons mentioned here, we have confidence in our ability to deliver for our shareholders going forward. As always we thank you for your continuing support.
I'll hand the call over to Tom Hennigan, our CFO. Tom.
Thomas M. Hennigan -- Managing Director
Thank you. Taylor. Today have to give you with a review of our third quarter earnings then I'll provide further detail on the portfolio and our balance sheet position. As Linda previewed we had another stable quarter of total income generation, particularly given the macroeconomic backdrop in some of the earnings headwinds we discussed last quarter. Total investment income for the third quarter was $43 million jump from $45 million in the prior quarter. The decrease was driven by a couple of factors. First the decrease in interest income on the core investment book driven primarily by a lower average invested loan balance however, despite the low rate environment, our portfolio yield increased slightly from the second quarter and second, lower amendment and underwriting fees. Total expenses were $22 million in the quarter, down from $24 million last quarter. The largest component of the decrease was again, interest expense due to lower LIBOR as we have the benefit of a full quarter of low LIBOR on our liabilities. Well, most assets in the portfolio benefited from LIBOR floors. This resulted in net investment income for the quarter of $20 million or $0.36 per common share which is right in line with the general guidance we provided last quarter when we set the regular dividend.
On November 2, our Board of Directors declared the dividends for the fourth quarter of 2020 as Linda noted and total level of $0.36 per share, which is payable to shareholders of record as of the close of business on December 31. And I'll reiterate we remain very confident in our ability to meet the $0.32 regular dividend and anticipate continuing to pay special dividends this quarter there'll besides based on the prior quarter's actual earnings. Moving on to the JV's performance, the dividend yield on our equity was about 11% in the third quarter again consistent with the 9% to 11% expected range. Following very light repayments across the BDC and JV portfolios over the last two quarters, we've seen a sharp increase in expected repayment activity this quarter, particularly at the JV. So this could weigh on JV earnings and distributions in coming quarters. On the valuations, our total aggregate realized and unrealized net gain was $12 million for the quarter. Similar to the second quarter, we saw valuations increase based on the continued rebound in market benchmark yields and our stable to improving credit outlook. With reference to the buckets I outlined last quarter first performing lower COVID impacted names plus our equity investment in the JV, which accounts for a combined 70% of fair value at 930 increase in value about $17 million compared to 630. The assets that had been underperforming pre-pandemic, some which have COVID exposure were flat on an aggregate basis.
The second consecutive quarter of stability. The final category is the moderate to heavier COVID impacted names, similar to last quarter we attempted to be appropriately conservative in our assessment of these names which resulted in a $5 million markdown across these investments. I'll turn next to a more granular look at the portfolio and related activity. We continue to be encouraged by the outperformance of our borrowers. relative to our expectations set back in March when we conducted a full reunderwriting of our portfolio. That outperformance ranges from recovery in revenue and EBITDA to fewer financial covenant issues to overall improve bar with liquidity. This is very evident in the revolver activity across our borrowers. Utilization levels across revolvers historically about 20% increased almost 65% in early April. But now is normalized close to pre-pandemic levels. That said, what's largely behind us now. We definitely experienced a normal uptick in a more material amendment activity during the third quarter and into early October. Dating back to March, we've closed credit enhancing amendments for about 20% of our debt investments at fair value. which is up from about 7% at the end of the second quarter. These amendments typically included some companies have increased economics, tightening of documentation terms and when necessary sponsor equity to support liquidity.
For over half these amendments, we received additional yield, which ended on average 125 basis points of spread on those investments. And you won't see this until next quarter's filings but in early October, we completed balance sheet restructurings for two investments that were already on non-accrual status as of nine third. In both cases, we think with lenders now in the controlling equity seat. We're better positioned to drive longer term recoveries. I'll finish with a review of our financing facilities and liquidity. Total debt outstanding was about $1.1 billion at quarter end. That's up about 40 million from 630 based on the modest net deployment for the quarter. Well, statutory leverage and net financial leverage will roughly flat at 1.3 and 1.2 times respectively. However, net financial leverage improved to about 1.0 times after giving effect to the recent closing of our second JV. Let me provide a bit more color on this new investment vehicle, which closed on November 3. It consist of a portfolio of $250 million of assets contributed by CGBD and is generally representative of our current portfolio. It's intended to be an extension of our existing investment strategy in the underlying financing vehicle has an initial 18 months reinvestment period. CGBD maintains at 84% equity interest for governance shared with our partner to the vehicle is not consolidated on the balance sheet and the use net proceeds will be to repay debt.
With the improved leverage and liquidity profile provided by this transaction, we feel very well positioned going forward, whether to withstand another possible leg down the economy from the second wave or under more normalized market conditions, to pursue both attractive new investment opportunities and share repurchases.
With that, let me turn the call back over to Linda for some closing remarks.
Linda Pace -- Head of Carlyle Loan and Structured Credit Investment Committee member
Thank you, Tom. Delivering a sustainable dividend to our shareholders alongside a stable or growing NAV are our top priorities, which all begins with strong credit performance. We are on the right track to deliver on these goals for our shareholders.
Thank you all for your time and attention this morning and I'll now turn the call back over to the operator for Q&A.
Questions and Answers:
Operator
Thank you. [Operator Instructions] Our first question comes from Rick Shane with JP Morgan. Your line is now open.
Rick Shane -- JP Morgan -- Analyst
Hey, good morning everybody and thanks for taking my question. I'd love to go through the core investments on non-accrual and put them in context of their maturity dates. When we look at central security and derm growth, Central securities of 21 maturity, derm growth is a 22. Based on the timeline of when they went on non-accrual, it appears that that was idiosyncratic because it was before any COVID-19 related writedowns. I'm curious what the sort of outlook for both of those is, particularly Central security given the timeline to maturity.
Thomas M. Hennigan -- Managing Director
Hey, good morning, Rick. Thanks for the questions. This is Tom. On both those-- you're correct, and they were idiosyncratic credit issues not related primarily to COVID. On Central security, I'll note that was one of the transactions that we restructured in early October. So that deal, now I'll say, has a new capital structure fit for the earnings profile and an extended maturity date. So see that one, we have appropriately restructured. Dermatology Associates is one we have been engaged and we remain engaged and we anticipate a similar resolution on that transaction or that current capital structure within, let's call it the next couple of quarters.
Rick Shane -- JP Morgan -- Analyst
Got it. Okay, that's helpful. And then moving to the two investments that are potentially more COVID related, direct travel obviously that appears to be highly correlated to what's going on with developments there that's maturing in 21. How are the sponsors behaving, and how are they looking toward that maturity and then and I apologize if I mispronounced that but Solera Technologies. I can't figure that one out that business in theory making panels or solar panels for satellites shouldn't be impacted, but it does look like Softbank financing potentially related to COVID-19 issues, is that business fundamentally impacted and by the way, I'm sorry hopefully I am seeing of their largest customer, I should say.
Thomas M. Hennigan -- Managing Director
Right. Good observation. So on Solaro that's a deal we actually restructured about a year and a half ago, that had just fundamental issues based on the industry solid industry. It's highly typical, and you're exactly right, that this is had some issues based on its ties to one web that's one that we are in the equity see in that transaction and it's one that we see a positive resolution going forward or at least we're in negotiations and hoping to have positive resolution in terms of that company, turning the corner and working with their top customer one web as one way emergence from their bankruptcy.
Rick Shane -- JP Morgan -- Analyst
Got it. And then on direct travel.
Thomas M. Hennigan -- Managing Director
Yeah. Direct travel probably one of, if not the most severely COVID impacted name on our book and that was the other transaction I noted, we had two deals that restructured that deal also restructured in early October timeframe and the lenders again supporting that business and are the majority owners going forward it providing the capital for that, for that business.
Rick Shane -- JP Morgan -- Analyst
Got it. Okay, great. Thank you. Thank you very much, and sorry if I recovered some materials, we've had so many companies report today, it's a blur. I don't know.
Thomas M. Hennigan -- Managing Director
No problem at all and bring this morning, I will say is each all four of those situations what I'd highlight is we are the original debt and existing debt is in the first lien position in each case. In three cases the lenders are there now all in the equity or we anticipate will own the equity. So we think we're in a good position based on our seniority and based on our equity position to drive strong outcomes in recoveries in those situations.
Rick Shane -- JP Morgan -- Analyst
Great. Hey, Tom. Thank you so much.
Operator
Thank you. Our next question comes from Finian O'Shea with Wells Fargo. Your line is now open.
Finian O'Shea -- Wells Fargo -- Analyst
Hi, good morning. Thanks, I'll reiterate Rick's comments my questions might be a below on three here, but can you, first talk about the NAV improvement, you had a bit less of a write up then. Your peers. Is this a function of a name or two or is it less of a benchmark spread enhancement, any color you provide there.
Thomas M. Hennigan -- Managing Director
Hey Fin it's Tom. When we look across the board I mentioned three buckets in categories. The performing book primarily valuations up based on stable credit and outlook and improving credit outlook. And then the benchmark yields improving. I think our legacy underperforming deals flat which is really good about those in terms of just stability and again those are more driven based on enterprise value and not necessarily market benchmark yields. And then that last bucket is the COVID bucket where we saw a little bit more deteriorations and will say that direct travel investment. I've mentioned the five million that represented more than half of that bucket to decline and that valuation went from roughly 80 to 70 round numbers. So I'd say that limited on media idiosyncratic besides direct route we think overall, which really good about the overall performance of the book and what we call modest migration upward and we expect to continue to see that migration going forward.
Linda Pace -- Head of Carlyle Loan and Structured Credit Investment Committee member
Yeah let me just add that as Tom kind of explained on his question. We were pretty busy in the third quarter sort of getting resolution on some of these restructured names and whatnot. So now that that is kind of set, what we see given how our visibility into the portfolio now is kind of a path to just continued improving NAV. So we feel pretty good about what's on the horizon and would kind of guide you to not necessarily a step function up but kind of slow and steady progress on increasing NAV.
Finian O'Shea -- Wells Fargo -- Analyst
Okay. That's helpful. And on the the second joint venture can you just go through this sort of basics of kind of what segment of loans will go in there and what it's leverage will look like as well.
Thomas M. Hennigan -- Managing Director
Hi Finn, it's Tom. Maybe best way if we compare it to what I'll call JV 1. The existing JV1 focuses primarily on first lien loans with a lower price point, let's say 0 plus 400 and that vehicle has ranged anywhere up to target leverage that five times right now, we're running at about half of that 2.5 times the distinction this JV two is primarily more unitranche loans and a higher percentage of second liens of the weighted average spread in that portfolio was spread around L plus six and based on a little bit more risk in that book, the leverage is lower the leverage will only be 1.7 times. That's a singular credit facility with a 63% advance rates.
Finian O'Shea -- Wells Fargo -- Analyst
Okay, that's helpful.
Taylor Boswell -- Chief Information Officer of Direct Lending
Maybe I'll just touch on the strategic rationale there quickly as well. We really think that's a transaction that serves us well in any variance of forward macroeconomic scenario. So in a in a downside case, of course, liquidity, enhancing and the like in a base case or an upside case frees up a fair amount of balance sheet for us to both pursue in this new investment environment, which we regard as attractive and also get going again on the share repurchase front.
Finian O'Shea -- Wells Fargo -- Analyst
Yeah. And that sort of segue into my last question and I'll hop off. Where does this pro forma you're one times is that about where you want to be, given obviously what we've gone through in COVID and but you have obviously the opportunity to buy back stocks is a few moving parts, just like what where if your leverage profile target has changed at all in light of these joint ventures in today's environment. Thank you.
Taylor Boswell -- Chief Information Officer of Direct Lending
Sure. I think I'll go ahead. Tom, you pick this one up.
Thomas M. Hennigan -- Managing Director
For sure, but when I can say it's been again with our focus on net financial leverage. That's the 1.0 times and I think we still feel very comfortable based on the composition of our current portfolio. The composition of both JVs that running in that anywhere from one right now, we're at the lower end of to 1.4 times. We think ultimately, we're very comfortable settling right in the middle of that range. We anticipate will continue to operate within the range. Obviously, it's a low end now, which is quite frankly we feel very good about based on just more uncertainty in the market with COVID cases rising, who knows what's going to happen. Some noise with the elections, we feel very well positioned right now to feel that we're at a lower leverage position in case things turn negative. But also we're seeing quite frankly right now, a lot of very attractive opportunities in the market so to potentially put new money to work. And then as we noted to share buyback, but we expect to remains remain again in that one out of 1.4 range as a target.
Linda Pace -- Head of Carlyle Loan and Structured Credit Investment Committee member
Yeah. And it's, it's, Linda, just to sort of to drive at home Finn. We do continue to see really good value in CGBD share errors. So we're looking forward to restarting the repurchase program and in the past, we weren't market timers right, we just kind of we get it really, really steady Eddie and we would, we would take that same position going forward.
Finian O'Shea -- Wells Fargo -- Analyst
Sure. That's all from me. And congratulations on very good quarter here.
Operator
Thank you. Our next question comes from Paul Johnson with KBW. Your line is now open.
Paul Johnson -- KBW -- Analyst
Hey, good morning guys. Thanks for taking my questions. Those have already been asked, but two short questions, one I was just curious, the slight tick up in portfolio yield this quarter, was that driven more upon and commence this quarter and last or was there something else driving that?
Thomas M. Hennigan -- Managing Director
Hey, Paul, it's Tom. That's exactly right to ten basis points is roughly the 125 basis points across roughly 10% of the portfolio.
Paul Johnson -- KBW -- Analyst
Okay, great. And then my last question is just on the the you guys issued from the advisor. I'm just curious if that's something that is possible to be retired early and then I also realize that there is a conversion price attached to that is that something you would evaluate retiring, if price start of the conversion price or if you have any sort of plans with with the preferred.
Linda Pace -- Head of Carlyle Loan and Structured Credit Investment Committee member
I'll. I'll take that. Carlyle obviously is a strategic investor in the BDC and the investment is looked at with that eye. It's, we're clearly long term constituents with with that money coming from the firm so never say never say never, but there is, there is really not an eye toward terms what you're talking about right now, it's kind of a looked at as a key part of our, of our balance sheet and is meant to be able to position us to have not only an appropriate leverage profile and all Weather balance sheet as we mentioned, but really to be in a position to act act accordingly when we see good opportunities to put money to work in the market. So, I would, I would, I would caution you to look at it as kind of a long-term piece of capital in our balance sheet.
Paul Johnson -- KBW -- Analyst
Okay, thank you very much. That's all from me.
Operator
Thank you. Our next question comes from Derek Hewett with Bank of America. Your line is now open.
Derek Hewett -- Bank of America -- Analyst
Good morning. And we want. My first question is more of a clarification. So what is that. The target leverage of one to 1.4 times. Was that based on regulatory or statutory leverage or was that purely financial leverage.
Thomas M. Hennigan -- Managing Director
Hey Derek, It's Tom to clarify, the 1.0 to 1.4 currently right now, we look at it, manage the business based on net financial leverage.
Derek Hewett -- Bank of America -- Analyst
Okay, great. And then how should we think about the kind of the ongoing special dividend in terms of sizing that, is it more formulaic or are there other considerations being made.
Thomas M. Hennigan -- Managing Director
Hey, Derek, it's Tom. Again, right now our call it our run rate earnings, we feel very comfortable that give or take each quarter based on repayment activity fees that will be in the mid 30s territory. Recall that our current normalized earnings, so we anticipate every quarter we'll be paying the stated $0.32 loss effectively the outperformance above $0.32.
Derek Hewett -- Bank of America -- Analyst
Okay.
Thomas M. Hennigan -- Managing Director
So, like we did, much like the third quarter, we earned $0.36 so we declined to $0.32 plus we're going to pay $0.34 next quarter.
Derek Hewett -- Bank of America -- Analyst
Okay. I understood. Great, thank you.
Operator
Thank you. I'm not showing any further questions at this time, I would now like to turn the call back over to Daniel Harris for closing remarks.
Daniel Harris -- Head of Investor Relations
Thank you everyone for listening and your time today. We look forward to speaking with you again next quarter. If you have any additional follow-ups after the call, feel free to contact Investor Relations at any time. Thank you very much.
Operator
[Operator Closing Remarks]
Duration: 36 minutes
Call participants:
Daniel Harris -- Head of Investor Relations
Linda Pace -- Head of Carlyle Loan and Structured Credit Investment Committee member
Taylor Boswell -- Chief Information Officer of Direct Lending
Thomas M. Hennigan -- Managing Director
Rick Shane -- JP Morgan -- Analyst
Finian O'Shea -- Wells Fargo -- Analyst
Paul Johnson -- KBW -- Analyst
Derek Hewett -- Bank of America -- Analyst
