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    Paul Johnson • KBW

    Paul Johnson's questions to PennantPark Floating Rate Capital Ltd (PFLT) leadership

    Paul Johnson's questions to PennantPark Floating Rate Capital Ltd (PFLT) leadership • Q3 2025

    Question

    Paul Johnson of Keefe, Bruyette & Woods (KBW) asked about the ATM issuance during the quarter, noting it likely occurred when the stock was at a larger discount to NAV. He questioned the strategy behind this and whether the company plans to continue this practice for capital management going forward.

    Answer

    Art Penn, Founder and Managing Partner, confirmed the $32 million in ATM issuance occurred at an average price of $11.31 per share before "Liberation Day" as part of a strategy to build a "war chest" for anticipated deal flow. He acknowledged the deal flow was subsequently delayed but stated the company is now well-capitalized with its under-levered balance sheet and two JVs. He indicated that PFLT is now focused on deploying this capital, suggesting further ATM issuance is not an immediate priority.

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    Paul Johnson's questions to PennantPark Floating Rate Capital Ltd (PFLT) leadership • Q1 2025

    Question

    Paul Johnson asked if the successful exit from Marketplace Events could trigger a special dividend and inquired about recent credit trends, specifically any notable amendment activity or credit migrations within the portfolio.

    Answer

    Arthur Penn, Chairman and CEO, explained that gains like the one from Marketplace Events increase spillover income, which is used to cushion the regular dividend rather than fund a special dividend, reinforcing their goal of a steady, stable payout. Regarding credit, he described current amendment activity as normal for a diversified portfolio of 159 companies and reported no abnormal credit migrations, highlighting the portfolio's conservative structure as a key risk mitigant.

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    Paul Johnson's questions to PennantPark Floating Rate Capital Ltd (PFLT) leadership • Q4 2024

    Question

    Paul Johnson inquired about the attractive aspects of the current investment vintage, the outlook for 2025 amid potential administration changes and rate declines, and the specifics of any deterioration in deal terms. He also asked for the drivers behind the recent decline in non-accruals and the NAV impact from ATM share issuance.

    Answer

    Chairman and CEO Arthur Penn explained that the current vintage is attractive due to strong credit quality in the core middle market, including average debt-to-EBITDA of 3.4x and loan-to-value of 38%. He noted that while spreads have tightened, covenant protections remain meaningful. Penn clarified the non-accrual decrease was due to the restructuring of one company, Dynata. CFO Richard Allorto added that the impact of ATM issuance on NAV was immaterial as shares were issued at or above NAV.

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    Paul Johnson's questions to Fidus Investment Corp (FDUS) leadership

    Paul Johnson's questions to Fidus Investment Corp (FDUS) leadership • Q2 2025

    Question

    Paul Johnson from Keefe, Bruyette & Woods (KBW) asked for details on the positive write-up of the Quest Software credit and questioned the general priorities of sponsors regarding capital structure optimization versus returning capital through dividends.

    Answer

    CEO & Investment Committee Chair Edward Ross explained that Quest Software, a cybersecurity provider, underwent an LME transaction that improved the risk profile of Fidus's second lien security without any principal reduction, leading to the write-up. On the topic of sponsor priorities, Ross stated that while returning capital is a market theme, the significant dividend income Fidus received in Q1 and Q2 was episodic, driven by specific company refinancings and distributions, and should not be considered a recurring event.

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    Paul Johnson's questions to Fidus Investment Corp (FDUS) leadership • Q3 2024

    Question

    Paul Johnson of Keefe, Bruyette & Woods asked about the timing for utilizing the newly approved SBIC license, the general migration of credit quality in the portfolio, and whether secondary transactions could provide an exit path for equity investments.

    Answer

    Executive Shelby Sherard explained that the new SBIC license provides flexibility and buys time, with plans to begin drawing on it in the first half of the next year. Executive Edward Ross described portfolio company performance as generally healthy but flattish, with some credit migration due to the high-interest-rate environment, though the overall portfolio remains sound. Regarding exits, Ross clarified that the company is not planning a large-scale sale of its equity portfolio but is well-positioned for episodic realizations as individual companies mature.

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    Paul Johnson's questions to BlackRock TCP Capital Corp (TCPC) leadership

    Paul Johnson's questions to BlackRock TCP Capital Corp (TCPC) leadership • Q2 2025

    Question

    Paul Johnson inquired about the impact of the BlackRock/HPS integration on TCPC's investment process, particularly with new investment committee members. He also asked how TCPC would maintain its strategic priority and access to resources within the larger platform, and sought clarification on the markdown of the AutoAlert investment.

    Answer

    Chairman, CEO & Co-CIO Phil Tseng explained that the new Private Financing Solutions (PFS) platform centralizes origination, enhancing deal flow. He noted that while the core investment process remains, it is now supplemented by HPS professionals, including on the investment committee and in restructuring efforts. Tseng assured that TCPC is a key strategic priority as the only publicly traded BDC on the PFS platform. He clarified the AutoAlert markdown was driven by lower market comps for similar companies, not a decline in its operational performance, which has improved since restructuring.

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    Paul Johnson's questions to BlackRock TCP Capital Corp (TCPC) leadership • Q1 2025

    Question

    Paul Johnson requested details on the significant markup of the Job and Talent investment, asking what drove the valuation change. He also inquired about the company's plans and timeline for pursuing a new SBIC license.

    Answer

    Chairman, Co-CIO & CEO Philip Tseng explained the Job and Talent markup resulted from both the company's strong performance and the enhanced economics from a new preferred debt investment TCPC provided. CFO Erik Cuellar confirmed that TCPC is in the process of obtaining a second SBIC license, the maximum allowed, and stated that the process and timing have not been materially affected by recent administrative changes.

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    Paul Johnson's questions to BlackRock TCP Capital Corp (TCPC) leadership • Q3 2024

    Question

    Paul Johnson of KBW asked for the portfolio's total exposure to Amazon aggregator companies following the markdown of Razor Group. He also questioned the basis for optimism in the sector's future. Additionally, he inquired about the reasons for the higher-than-expected cost of debt during the quarter and asked about the remaining capacity under the company's SBA license.

    Answer

    President Philip Tseng reported that Amazon aggregators comprise 5.9% of the portfolio's fair value and expressed confidence in a path to successful outcomes through consolidation and improved capital structures. CFO Erik Cuellar explained the higher cost of debt was due to refinancing notes at higher rates and temporarily carrying extra cash, which should normalize. He also confirmed TCPC has $10 million in remaining SBA capacity and the ability to apply for a second license.

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    Paul Johnson's questions to Blue Owl Capital Corp (OBDC) leadership

    Paul Johnson's questions to Blue Owl Capital Corp (OBDC) leadership • Q2 2025

    Question

    Paul Johnson asked if further spread compression is expected as the portfolio rotates and whether there is a significant opportunity to invest in junior capital as loans refinance into the BSL market.

    Answer

    CEO Craig Packer stated that he believes the vast majority of spread compression has already worked through the portfolio and expects spreads to be stable. President Logan Nicholson characterized the junior capital opportunity, like the Trucordia deal, as closer to a 'one-off' due to tight pricing in public markets. He emphasized that deal flow between the direct lending and BSL markets is balanced, with many names also moving from BSL to direct.

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    Paul Johnson's questions to Blue Owl Capital Corp (OBDC) leadership • Q4 2024

    Question

    Paul Johnson sought clarification on whether the ATM program would ever be used in a dilutive manner, asked about the nature of the large multi-billion dollar deals done during the quarter, and inquired about trends in amendment activity.

    Answer

    CEO Craig Packer stated unequivocally that the ATM program will only be used to issue shares on a net basis above book value, ensuring it is always accretive to shareholders. President Logan Nicholson clarified that the large deals were new money transactions, including public-to-private LBOs like Catalent and Squarespace, not refinancings. Nicholson also reported that amendment activity was flat quarter-over-quarter with no material uptick in significant amendments.

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    Paul Johnson's questions to FS KKR Capital Corp (FSK) leadership

    Paul Johnson's questions to FS KKR Capital Corp (FSK) leadership • Q2 2025

    Question

    Paul Johnson from Keefe, Bruyette & Woods asked about competition between private credit and the BSL market, the reason for the JV's fair value write-down, and what options are being considered for the 2026 dividend policy.

    Answer

    President & CIO Daniel Pietrzak explained their focus on the $50-$150M EBITDA range is strategic and that the JV's mark-to-market write-down was correlated with the same assets that impacted the parent BDC. He reiterated that the 2026 dividend will be NII-led, with concepts like a base and supplemental payout being considered in light of the current rate and spread environment.

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    Paul Johnson's questions to Trinity Capital Inc (TRIN) leadership

    Paul Johnson's questions to Trinity Capital Inc (TRIN) leadership • Q2 2025

    Question

    Paul Johnson asked about the current deployment status of funds within the RIA, the desired long-term contribution of the RIA to Trinity's business, and the likelihood of loans at their interest rate floors being refinanced as rates decline.

    Answer

    CFO Michael Testa noted that RIA deployment is ramping up, representing about 12% of new fundings. CEO Kyle Brown added that the RIA is a critical tool for managing leverage and driving accretive EPS growth, with the ultimate goal being accretive growth for investors. COO Gerry Harder addressed refinancing, explaining that while some rate-driven refinancing may occur, most prepayments happen when companies 'graduate' to lower-cost bank debt, an outcome Trinity views positively.

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    Paul Johnson's questions to Trinity Capital Inc (TRIN) leadership • Q1 2025

    Question

    Paul Johnson questioned the drivers behind lower portfolio yields in recent quarters, requested the percentage of the portfolio in a first-lien position without other senior debt, and asked about any recent increase in liquidity demands from borrowers.

    Answer

    CEO Kyle Brown attributed slight yield compression to rate changes and a strategic push into more mature, lower-risk sponsor finance deals, which improves portfolio diversification. Chief Credit Officer Ron Kundich confirmed that 78% of the portfolio is first lien. Kyle Brown also stated there has been no unusual uptick in revolver draws or liquidity requests from portfolio companies.

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    Paul Johnson's questions to Trinity Capital Inc (TRIN) leadership • Q4 2024

    Question

    Paul Johnson of Keefe, Bruyette & Woods asked for quantification of the expense from the upcoming bond conversion, inquired about the fintech portfolio's dependence on bank partnerships, and sought details on the Space Perspective non-accrual.

    Answer

    CFO Michael Testa quantified the Q1 NAV impact from the convertible debt retirement at an estimated $0.27 per share. COO Gerry Harder and CEO Kyle Brown explained that their underwriting requires fintechs to have multiple bank partners and noted their ABL group often replaces banks, providing senior financing against receivables. Chief Credit Officer Ron Kundich clarified the Space Perspective non-accrual is a company-specific issue related to a small venture loan, not an industry-wide trend.

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    Paul Johnson's questions to Trinity Capital Inc (TRIN) leadership • Q3 2024

    Question

    Paul Johnson inquired about the AUM growth in off-balance sheet vehicles, the drivers behind the improved portfolio credit rating, and the operational and financial strategy for the European expansion.

    Answer

    CFO Michael Testa reported ~$41M was syndicated to off-balance sheet vehicles in Q3 and they are working on adding leverage. COO Gerry Harder attributed the improved credit rating to a mix of strong new originations and upgrades to existing portfolio companies. Multiple executives explained the European expansion uses the same underwriting rigor and will be supported by dedicated capital raised through the RIA.

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    Paul Johnson's questions to Bain Capital Specialty Finance Inc (BCSF) leadership

    Paul Johnson's questions to Bain Capital Specialty Finance Inc (BCSF) leadership • Q2 2025

    Question

    Paul Johnson of Keefe, Bruyette & Woods (KBW) inquired about the rationale for refinancing an attractively priced 2019 securitization, the drivers behind strong Q2 origination activity, and whether these new investments could be moved to joint ventures.

    Answer

    Amit Joshi, Treasurer and SVP - Finance & CFO, explained the CLO was refinanced because its investment period was ending and the company secured even more attractive pricing. CEO Michael Ewald attributed strong originations to sustained activity in the core middle market and a successful expansion of sponsor outreach. President Michael Boyle confirmed that the new first lien loans are eligible to be moved into the company's joint ventures in the future.

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    Paul Johnson's questions to Bain Capital Specialty Finance Inc (BCSF) leadership • Q1 2025

    Question

    Paul Johnson asked for quantification of the impact from back-weighted fundings on Q1 interest income and inquired about the resolution and recovery details for realized losses, specifically Forming Machine Industries.

    Answer

    President Michael Boyle acknowledged the back-weighted fundings but highlighted the stable 11.5% portfolio yield and new origination spreads of 540 basis points. Boyle also explained that two non-accrual investments, Atlas (Forming Machine) and Ambridge, were exited during the quarter through restructuring efforts, with recoveries north of $0.50 on the dollar, which was in line with prior marks. CEO Michael Ewald added that the new origination spread was down only about 10 basis points from the prior quarter.

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    Paul Johnson's questions to Bain Capital Specialty Finance Inc (BCSF) leadership • Q3 2024

    Question

    Paul Johnson inquired about the drivers of the Q3 portfolio yield decline, the outlook for spread compression, the relative value of U.S. versus international private credit, the reasons for a minor increase in underperforming investments, and the source of a realized gain.

    Answer

    President Michael Boyle attributed the yield decline primarily to lower base rates and reduced dividend income from the aviation portfolio and joint ventures, not significant spread degradation. CEO Michael Ewald noted that spread compression has largely played out, with current spreads bifurcating by credit quality. He also explained that the U.S. private credit market offers better structural terms than Europe currently. Boyle added that the uptick in lower-rated investments was idiosyncratic and the realized gain came from the successful exit of a legacy investment, BlackBrush.

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    Paul Johnson's questions to Sixth Street Specialty Lending Inc (TSLX) leadership

    Paul Johnson's questions to Sixth Street Specialty Lending Inc (TSLX) leadership • Q2 2025

    Question

    Paul Johnson of Keefe, Bruyette & Woods asked about the drivers of higher "other income," the specific amount of prepayment income per share, whether sponsor optimization deals generate structuring fees, and details on the Lithium earn-out security.

    Answer

    CFO Ian Simmonds and CEO Joshua Easterly explained that "other income" and prepayment fees, which are close cousins, totaled 11-13 cents per share, driven by miscellaneous exit fees. Easterly detailed their accounting policy of deferring all upfront fees into OID, which boosts NII upon repayment. President Robert Stanley described the Lithium earn-out as an equity participation in cash flows with an expected three-year duration to realize its value.

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    Paul Johnson's questions to Sixth Street Specialty Lending Inc (TSLX) leadership • Q2 2025

    Question

    Paul Johnson of Keefe, Bruyette & Woods asked about the drivers of higher "other income," the amount of prepayment income, the potential for structuring fees, and the specifics of the Lithium earn-out security.

    Answer

    CFO Ian Simmonds attributed the higher "other income" to miscellaneous exit fees and quantified prepayment fees at about 6 cents per share. CEO Joshua Easterly noted total exit-related fees were 11-13 cents per share and explained their accounting policy defers all upfront fees into OID, boosting NII upon repayment. Vice President Robert Stanley described the Lithium earn-out as an equity participation with an expected three-year realization timeline based on future cash flows.

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    Paul Johnson's questions to Sixth Street Specialty Lending Inc (TSLX) leadership • Q1 2025

    Question

    Paul Johnson of KBW asked about the status of the maturing IRG Sports and Entertainment loan, the drivers behind the significant decline in the cost of debt, and the firm's view on structured risk transfers (SRTs) in the BDC space.

    Answer

    President Bo Stanley stated they are working to sell the assets of IRG Sports and Entertainment to resolve the loan. CEO Joshua Easterly and CFO Ian Simmonds explained the lower cost of debt was driven by a favorable funding mix, including rolling off a matured unsecured note onto the revolver and issuing a new lower-spread bond. Regarding SRTs, Ian Simmonds suggested they are done for capital relief for banks, which could expand bank lending capacity on the margin but is unlikely to reduce pricing.

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    Paul Johnson's questions to Sixth Street Specialty Lending Inc (TSLX) leadership • Q4 2024

    Question

    Paul Johnson from KBW asked if new partnerships, like with First Citizens, would generate deal flow for TSLX, inquired about the nature of non-sponsored opportunities, and questioned the company's stance on raising new equity capital.

    Answer

    CEO Joshua Easterly stated the First Citizens partnership is for equipment leasing and won't feed into TSLX's portfolio. He described non-sponsored deals as a mix of long-term relationships and transitory opportunities. On capital, he was firm that they will not raise permanent equity if they cannot deploy it at accretive ROEs, prioritizing shareholder returns over growth.

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    Paul Johnson's questions to Sixth Street Specialty Lending Inc (TSLX) leadership • Q4 2024

    Question

    Paul Johnson asked if new partnerships like the one with First Citizens would generate deal flow for TSLX, inquired about the nature of non-sponsor financing opportunities, and questioned their stance on raising new equity capital.

    Answer

    CEO Joshua Easterly explained that the First Citizens equipment leasing partnership is not expected to feed into TSLX's corporate lending portfolio, but other platform opportunities could. He described non-sponsor deals as a mix of long-term relationships and more transitory, opportunistic financings. Critically, he affirmed they would not raise new equity unless they were confident they could deploy it at accretive, long-term ROEs, underscoring their disciplined, investor-first approach.

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    Paul Johnson's questions to Crescent Capital BDC Inc (CCAP) leadership

    Paul Johnson's questions to Crescent Capital BDC Inc (CCAP) leadership • Q1 2025

    Question

    Paul Johnson asked about the new nonaccrual investment, Nuvera technology, questioning its valuation in light of a potential restructuring and its size relative to CCAP's typical deals. He also inquired about Crescent's general approach to workout situations and the percentage of the portfolio that is Crescent-originated.

    Answer

    President Henry Chung clarified that the valuation mark for Nuvera is in line with the expected restructuring outcome. CEO Jason Breaux added that a restructuring has not yet occurred on their books and offered to discuss specifics offline. Regarding workout strategies, Jason Breaux explained that the primary goal is capital preservation, utilizing various options from sponsor partnerships to sales or taking ownership. Henry Chung added that they take a longer-term view to maximize value rather than pursuing quick secondary sales. Finally, Henry Chung stated that 92% of the portfolio's fair value consists of Crescent-originated assets.

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    Paul Johnson's questions to Crescent Capital BDC Inc (CCAP) leadership • Q4 2024

    Question

    Paul Johnson asked about the origin of new non-accrual investments, whether Crescent leads deals on the watchlist, the driver of the quarter's realized loss, current market spreads, and if tariff discussions change the opportunity for manufacturing-focused investments.

    Answer

    CEO Jason Breaux stated one of the three new non-accruals was Crescent-originated. President Henry Chung confirmed Crescent leads the majority of watchlist deals and that about 20% of the watchlist by fair value are acquired assets. CFO Gerhard Lombard identified the restructuring of portfolio company CECO as the primary driver of the realized loss. Regarding spreads, Chung and Breaux explained that while the market sees deals below 500 bps, particularly for larger borrowers, they maintain pricing discipline. Chung also affirmed they will stick to their strategy of avoiding capital-intensive businesses despite tariff dynamics.

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    Paul Johnson's questions to Crescent Capital BDC Inc (CCAP) leadership • Q3 2024

    Question

    Paul Johnson inquired about the company's appetite for future BDC acquisitions, the specific drivers of unrealized portfolio depreciation, and the mechanism that capped the Q3 supplemental dividend at $0.07.

    Answer

    CEO Jason Breaux explained that while CCAP is open to M&A, it prioritizes measured growth and benefits from the scale of the broader Crescent platform. CFO Gerhard Lombard attributed the unrealized losses primarily to four names, including the Logan JV and two nonaccrual assets. Lombard also clarified that the supplemental dividend was capped by a formula limiting the combined impact of the supplemental dividend and unrealized NAV changes over a two-quarter period.

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    Paul Johnson's questions to Crescent Capital BDC Inc (CCAP) leadership • Q2 2024

    Question

    Paul Johnson from KBW inquired why CCAP's PIK income is significantly lower than the BDC average, asked for a breakdown of new investment activity, and requested an update on the Logan JV's performance.

    Answer

    CEO Jason Breaux attributed the low PIK income to a disciplined focus on cash-yielding assets and avoidance of PIK-heavy structures like ARR loans. CFO Gerhard Lombard noted strong portfolio company fundamentals have also reduced the need for PIK amendments. President Henry Chung detailed the quarter's investment mix, and CEO Jason Breaux stated the Logan JV's performance is in line with expectations, with its CLO's reinvestment period ending in April 2025.

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    Paul Johnson's questions to MidCap Financial Investment Corp (MFIC) leadership

    Paul Johnson's questions to MidCap Financial Investment Corp (MFIC) leadership • Q1 2025

    Question

    Paul Johnson of Keefe, Bruyette & Woods asked about the size of the portfolio's exposure to tariffs, trends in loan amendment activity, and the company's approach to share repurchases given current leverage levels.

    Answer

    CEO Tanner Powell stated that direct tariff exposure is in the 'single digits' and that the firm is more focused on second-order economic effects. Executive Chairman Howard Widra noted that amendment activity was flat quarter-over-quarter. Regarding buybacks, Mr. Widra explained that they are always weighed against other capital uses and become a higher hurdle at target leverage. He also mentioned that practical constraints like trading windows and volume limits impact the execution of repurchases.

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    Paul Johnson's questions to MidCap Financial Investment Corp (MFIC) leadership • Q4 2024

    Question

    Paul Johnson requested more detail on the 'stability in certain credit metrics,' asked about the drivers of the quarter's net depreciation, and inquired how the new CLO financing might change the company's unsecured funding mix.

    Answer

    President Ted McNulty pointed to stable revolver utilization and an improved interest coverage ratio as signs of stability. CFO Gregory Hunt noted that over 60% of the net depreciation was from positions already on non-accrual. He also stated that CLOs are expected to be an important and favorable source of capital going forward, given their attractive pricing relative to unsecured debt.

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    Paul Johnson's questions to MidCap Financial Investment Corp (MFIC) leadership • Q3 2024

    Question

    Paul Johnson from KBW questioned the company's strategy regarding share buybacks, particularly given the stock's weakness post-merger and the competitive market. He asked why buybacks weren't considered more strongly and how the breakeven price for repurchases might change with market returns.

    Answer

    Executive Chairman Howard Widra stated that the company's policy remains to buy back stock when it is accretive compared to other capital uses, referencing a previous breakeven guideline of around 0.8x price-to-NAV. He suggested the stock's recent underperformance could be temporary as legacy fund shareholders ineligible to hold the stock exit their positions. He also noted that the company's trading window was closed for much of the quarter. Widra emphasized that the buyback decision is based on a long-term view of spreads and returns, not just daily market fluctuations.

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    Paul Johnson's questions to Blackstone Secured Lending Fund (BXSL) leadership

    Paul Johnson's questions to Blackstone Secured Lending Fund (BXSL) leadership • Q1 2025

    Question

    Paul Johnson from KBW asked for a breakdown of the $0.17 per share NAV decline, seeking to understand the split between credit-specific issues and general mark-to-market movements. He also inquired about the frequency of securing equity co-investments.

    Answer

    CFO Teddy Desloge detailed that the NAV decline was driven primarily by the reversal of unrealized gains on repayments and a mark-down on a single company, Medallia, due to competitive pressures. Co-CEO Brad Marshall explained that the value BXSL adds through the Blackstone network provides more opportunities for selective equity co-investments, which serve as a strategic tool to offset potential credit losses but will remain a small part of the portfolio.

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    Paul Johnson's questions to Blackstone Secured Lending Fund (BXSL) leadership • Q3 2024

    Question

    Paul Johnson of KBW inquired about the target borrower size for the anticipated increase in deal activity, asking if the focus would be on the upper middle market or more traditional middle market companies.

    Answer

    Co-CEO Brad Marshall explained that while the platform sees deals of all sizes, they have a bias towards larger companies, which they view as better businesses. He noted that while they were more active in the middle market this year, they might skew further upmarket in 2025 if the expected deal volume materializes with appropriate structures, as they passed on some larger deals this year due to leverage or documentation concerns.

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    Paul Johnson's questions to Hercules Capital Inc (HTGC) leadership

    Paul Johnson's questions to Hercules Capital Inc (HTGC) leadership • Q1 2025

    Question

    Paul Johnson from KBW inquired about the equity cushions in later-stage deals and whether the current VC market creates an opportunity to invest in earlier-stage companies.

    Answer

    CEO & CIO Scott Bluestein reiterated that Hercules' debt supplements, not replaces, equity and that they focus on a company's ability to continue raising capital. He stated that while a medium-to-long-term opportunity may exist in earlier-stage companies, it is currently too early to re-enter that market segment, and they are waiting for more stability, validating their recent focus on later-stage deals.

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    Paul Johnson's questions to Hercules Capital Inc (HTGC) leadership • Q4 2024

    Question

    Paul Johnson sought clarification on which 'syndicates' were struggling with high valuations, asked for an update on unfunded commitment trends, and inquired about the specific contribution of the Palantir investment exit to quarterly gains.

    Answer

    CEO Scott Bluestein explained his comment referred to a broad market trend where new investors are pushing back on high valuations from 2021-2022, putting pressure on existing investor syndicates to fund those companies. He noted unfunded commitments are trending down as companies let older, higher-rate commitments expire. He also confirmed the Palantir exit was the largest driver of realized equity gains in Q4, contributing approximately $15 million.

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    Paul Johnson's questions to Hercules Capital Inc (HTGC) leadership • Q2 2024

    Question

    Paul Johnson of Keefe, Bruyette & Woods, Inc. asked about the drivers behind the recent increase in PIK income. He also inquired about the compression in core yields and whether this trend is expected to continue as Hercules focuses on higher-quality, later-stage assets.

    Answer

    CEO Scott Bluestein attributed the slight PIK increase to the competitive environment for later-stage deals, some borrowers opting for PIK, and selective use in certain transactions. Regarding yields, Bluestein explained the main driver of core yield compression is the mix shift from older, higher-yielding loans being prepaid and replaced by new, slightly lower-yielding loans. He expects minor continued degradation but no material decrease.

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    Paul Johnson's questions to Oaktree Specialty Lending Corp (OCSL) leadership

    Paul Johnson's questions to Oaktree Specialty Lending Corp (OCSL) leadership • Q2 2025

    Question

    Paul Johnson questioned the significant quarter-over-quarter decline in the portfolio yield, asking if the current level is a good run-rate. He also asked for clarification on the JV's 10.6% ROE and its potential for growth.

    Answer

    CFO Christopher McKown attributed the yield decline to reference rate resets, the impact of new non-accruals (approx. 30 bps), and some spread compression, confirming the current yield is a 'decent run rate.' He clarified the JV's ROE is based on NII and subordinated note interest, and stated that an 11-12% ROE is achievable depending on the opportunity set.

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    Paul Johnson's questions to Oaktree Specialty Lending Corp (OCSL) leadership • Q4 2024

    Question

    Paul Johnson inquired about the recurring nature of the incentive fee waiver, the status of non-accrual credits like nThrive and Thrasio, details of the Pluralsight restructuring, and the outlook for credit terms and covenants in 2025.

    Answer

    President Mathew Pendo clarified that the $1.2 million incentive fee waiver is discretionary and decided quarter-to-quarter, unlike the permanent base management fee reduction. CEO Armen Panossian addressed the credit questions, noting a recent positive development for nThrive, a longer execution timeline for Thrasio, and that the Pluralsight revolver is intended for business support, not paying coupons. Panossian also stated that while he expects strong covenants to hold in the middle market, the large-cap space has seen erosion, though increased deal flow could help restore some lender protections.

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    Paul Johnson's questions to Kayne Anderson BDC Inc (KBDC) leadership

    Paul Johnson's questions to Kayne Anderson BDC Inc (KBDC) leadership • Q4 2024

    Question

    Paul Johnson inquired about the terms of new investment activity, specifically asking how leverage multiples, covenants, and covenant bands have held up compared to the more refinancing-heavy market of the previous year.

    Answer

    Co-CEO Douglas Goodwillie responded that leverage has remained consistent, with new investments averaging around 4x leverage. He explained that the primary change has been in pricing, not structure. Spreads on new deals have seen modest compression, moving from an average of 575 basis points in 2024 to around 550 basis points in Q1 2025, with closing fees also slightly lower. Mr. Goodwillie characterized this price movement as relatively muted compared to the upper middle and broadly syndicated markets.

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    Paul Johnson's questions to Kayne Anderson BDC Inc (KBDC) leadership • Q2 2024

    Question

    Paul Johnson asked for high-level statistics on the BSL portfolio, such as the number of borrowers, average duration, and whether the investments were new issues or secondary purchases. He also inquired about credit amendment trends in the broader portfolio beyond the new non-accrual.

    Answer

    Executive Frank Karl provided details on the BSL portfolio, stating it consists of 22 names, has a duration north of three years, and that all but one investment were secondary market purchases. Co-CEO Douglas Goodwillie addressed credit trends, noting the portfolio is performing well with only a handful of names on the watch list and normal course amendment activity. He mentioned that the primary negative trend observed has been challenges to the consumer, which has impacted one or two portfolio companies.

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    Paul Johnson's questions to Morgan Stanley Direct Lending Fund (MSDL) leadership

    Paul Johnson's questions to Morgan Stanley Direct Lending Fund (MSDL) leadership • Q4 2024

    Question

    Paul Johnson from Keefe, Bruyette & Woods asked for the reasons behind the low level of investment repayments in Q4 and inquired about recent trends in credit-related amendments within the portfolio.

    Answer

    CEO Jeff Levin noted that repayment activity can be lumpy and advised analyzing the business over a longer timeframe than a single quarter, stating there was no specific driver for the low Q4 figure. Regarding credit quality, Levin emphasized the portfolio's health, citing best-in-class non-accrual and PIK income statistics. He added that repricing activity was more pronounced earlier in 2024 and has since subsided, while the team maintains its defensive investment posture.

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    Paul Johnson's questions to SLR Investment Corp (SLRC) leadership

    Paul Johnson's questions to SLR Investment Corp (SLRC) leadership • Q4 2024

    Question

    Paul Johnson from KBW inquired about the platform's ongoing commitment to sponsor-backed lending, the sustainability of the high Q4 dividend income, and the specifics of new hires in the ABL segment.

    Answer

    Chairman & Co-CEO Michael Gross stated that the entire platform participates in cash flow lending, maintaining relevance with sponsors in targeted industries like healthcare. He attributed the higher dividend income to the ABL and leasing portfolios, particularly the Webster acquisition, and considers it a sustainable run rate. He also clarified that new ABL hires are on the origination side and are employed at the specialty finance company level.

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    Paul Johnson's questions to Ares Capital Corp (ARCC) leadership

    Paul Johnson's questions to Ares Capital Corp (ARCC) leadership • Q4 2024

    Question

    Paul Johnson asked about the significant increase in the Ivy Hill distribution, the portfolio's exposure to government contracts, and whether PE sponsors were attempting to limit lender control in deals.

    Answer

    Then-CEO Robert DeVeer clarified the Ivy Hill dividend included a one-time $10 million special dividend on top of a higher recurring base dividend reflecting the company's growth. He stated that exposure to government contracts is not significant. On lender control, he said they haven't seen unusual attempts to limit voting rights in performing situations and that ARCC maintains strict documentation standards.

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    Paul Johnson's questions to Ares Capital Corp (ARCC) leadership • Q3 2024

    Question

    Paul Johnson asked if spread compression has also affected structuring fees, inquired about the resolution of an investment removed from non-accrual, and sought management's view on current inflation trends within the portfolio.

    Answer

    CEO Robert Kipp DeVeer acknowledged some pressure on fees alongside spreads but noted it was too early to call a definitive trend. An unnamed executive confirmed the specific non-accrual investment was fully exited. DeVeer also stated that inflation has moderated significantly over the past year to more normalized levels.

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    Paul Johnson's questions to Golub Capital BDC Inc (GBDC) leadership

    Paul Johnson's questions to Golub Capital BDC Inc (GBDC) leadership • Q4 2024

    Question

    Paul Johnson of Keefe, Bruyette & Woods questioned the rationale behind the $1 billion in originations, asking if it was a platform-wide trend and why GBDC deployed significant capital in a challenging credit environment. He also requested quantification of the non-cash interest expense from swap markdowns.

    Answer

    Executive David B. Golub clarified that while deployment is platform-wide, GBDC was under-levered post-merger and aimed to increase assets. He emphasized focusing on the net funds growth of $368 million, which is a more normal figure, and noted that originations were heavily skewed towards repeat sponsors and borrowers, leveraging competitive advantages. Chief Financial Officer Christopher Ericson specified that the non-cash interest expense related to the swap was approximately $0.02 per share.

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    Paul Johnson's questions to Golub Capital BDC Inc (GBDC) leadership • Q3 2024

    Question

    Paul Johnson of KBW asked for the motivation behind the voluntary incentive fee waiver in the quarter, questioning if it was related to specific credit events like the Imperial Optical restructuring or broader market pressures.

    Answer

    David B. Golub, Executive, explained that Golub Capital has a long-standing tradition of periodically and voluntarily waiving fees. He stated that given the significant 'onetime noise' in the quarter's results, management felt it was appropriate to waive the incentive fee to support shareholder returns and maintain a positive investor experience, consistent with their long-term perspective as a manager.

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    Paul Johnson's questions to Eagle Point Credit Company Inc (ECC) leadership

    Paul Johnson's questions to Eagle Point Credit Company Inc (ECC) leadership • Q3 2024

    Question

    Paul Johnson asked for the company's outlook on the upcoming year's loan and CLO market, and later inquired about the potential for NAV upside in CLO equity given the current spread environment.

    Answer

    Executive Thomas Majewski expressed optimism for the upcoming year, anticipating a 'risk on' market that will create more opportunities for cost-saving resets and refinancings. He stated that NAV upside can be driven by discounted loans paying off at par and, most significantly, by crystallizing value through proactive management actions like resets, which improve the portfolio's value even if the market partially anticipates these actions.

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    Paul Johnson's questions to Nuveen Churchill Direct Lending Corp (NCDL) leadership

    Paul Johnson's questions to Nuveen Churchill Direct Lending Corp (NCDL) leadership • Q3 2024

    Question

    Paul Johnson of Keefe, Bruyette & Woods asked about the increase in watch list investments this quarter, questioning if the new additions were due to idiosyncratic issues and what level of maintenance these companies require.

    Answer

    Executive Kenneth Kencel responded that the portfolio remains in very good shape with no new non-accruals. He characterized the moves on the watch list as a reflection of the company's proactive portfolio management approach, stating there were no broad trends or themes. He confirmed the issues with the downgraded names were company-specific and that the situations are being worked on to maximize shareholder value.

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