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Art Penn, Founder and Managing Partner, explained that until about a month ago, activity was dominated by add-on loans to existing portfolio companies. However, in the last month, there has been an increase in new platform investment opportunities. He confirmed that PFLT's deal flow remains virtually all sponsor-backed to maintain a strong equity cushion and that investments continue to be focused on their five core, recession-resilient sectors while avoiding tariff-impacted industries.

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President Matthew Freund reported that follow-on investments comprised 60-70% of originations. He noted optimism for the forward pipeline but remained cautious. He specified the yield on new originations was approximately 10.2%, about 10 basis points higher than the portfolio average. Regarding tariffs, he reiterated that the direct impact remains less than 5% of the portfolio but noted that broader uncertainty is causing issuers to delay investments.

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CFO Joyson Thomas explained that after the October distribution, a small amount of the spillover will remain. This could potentially be addressed with a special dividend; otherwise, it would roll into tax incurrence. This remaining amount, along with current year earnings, will be a factor in setting the dividend for 2026.

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Co-CEO Bruce Spohler explained that the lower SSLP income was a lagging effect from allowing certain lower-yielding assets to repay in prior quarters. He clarified that the current $1.1 million income level is not a new constant, as the portfolio began to rebuild in Q2, and he expects the dividend distribution to grow accordingly in the future.

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CEO David Golub clarified that while quarter-end leverage was at the high end of their target range (0.85x to 1.25x), the quarterly average was lower at 1.21x, and the company is not planning significant deleveraging or further leveraging. Regarding spreads, Golub explained that while the core middle market is somewhat insulated, it is not immune to the compression seen in the broadly syndicated market. He noted that private credit spreads are 'stickier' but will still be influenced by broader market trends, with the larger end of the private credit market responding more quickly.

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CEO Tanner Powell described the M&A recovery timeline as 'path-dependent,' noting that while current conditions are challenging, significant private equity dry powder and the need to return capital to LPs will eventually drive activity. He also highlighted future infrastructure spending as a source of opportunities. For the quarterly breakdown, Mr. Powell specified that of the 33 new deals, 19 were with new companies and 14 were add-on investments in existing companies.

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CEO Jeffrey Levin stated that the core investment strategy remains unchanged, focusing on defensive, first-lien positions in non-cyclical sectors like software and insurance services, which are well-insulated from direct tariff impacts. He noted that while M&A activity is delayed due to uncertainty, MSDL's strong origination platform continues to find quality deals, including opportunities with larger companies avoiding the volatile syndicated market.

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Co-CEO Brad Marshall explained that BXSL's low-cost structure allows it to focus on higher-quality, more resilient assets, especially in volatile times, without needing to 'reach for risk.' CFO Teddy Desloge added that the portfolio is defensively positioned in less-impacted domestic sectors like software and healthcare, and while a name-by-name analysis was done, their defensive, first-lien strategy remains unchanged.

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