Goldman Sachs BDC - Q4 2023
February 29, 2024
Transcript
Austin Neri (Investor Relations)
Good morning. This is Austin Neri, a member of the Investor Relations Team for Goldman Sachs BDC Inc., and I would like to welcome everyone to the Goldman Sachs BDC Inc. 4th Quarter 2023 Earnings Conference Call. Please note that all participants will be in listen-only mode until the end of the call when we will open up the line for questions. Before we begin today's call, I would like to remind our listeners that today's remarks may include forward-looking statements. These statements represent the company's belief regarding future events that, by their nature, are uncertain and outside of the company's control. The company's actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements as a result of a number of factors, including those described from time to time in the company's SEC filings.
This audiocast is copyrighted material of Goldman Sachs BDC, Inc. and may not be duplicated, reproduced, or rebroadcast without our consent. Yesterday, after the market closed, the company issued an earnings press release and posted a supplemental earnings presentation, both of which can be found on the homepage of our website at www.goldmansachsbdc.com, under the Investor Resources section, and which includes reconciliations of non-GAAP measures to the most directly comparable GAAP measures. These documents should be reviewed in conjunction with the company's annual report on Form 10-K filed yesterday with the SEC. This conference call is being recorded today, Thursday, February 29, 2024, for replay purposes. I'll now turn the call over to Alex Chi, Co-Chief Executive Officer of Goldman Sachs BDC, Inc.
Alex Chi (Co-CEO)
Thank you, Austin. Good morning, everyone, and thank you for joining us for our 4th Quarter and 2023 Fiscal Year-End Earnings Conference Call. I'm here today with David Miller, our Co-Chief Executive Officer, Tucker Greene, our Chief Operating Officer, and Stanley Matuszewski, our Chief Financial Officer. I'll begin the call by providing an update on the Goldman Sachs Private Credit Platform before providing a brief overview of our 4th Quarter results and then discuss the current market environment in more detail. I'll then turn the call over to David and Tucker to describe our portfolio activity and performance before handing it off to Stan to take us through our financial results, and then finally we'll open the line for Q&A. With that, I'd like to provide a brief update of the Goldman Sachs Private Credit Platform and the positive impact on GSBD of being part of it.
We're proud to announce that next week marks the second anniversary of our platform integration process. This endeavor brought all of Goldman Sachs's private credit origination and underwriting capabilities, as well as various pools of capital with track records that stretch back over 28 years under a single roof within our asset management business. As you may recall, historically our BDC complex, including GSBD, operated as a separate and distinct platform on the public side of the house that was walled off from the rest of the firm and could not take full advantage of being part of the Goldman Sachs ecosystem. In these two short years, GSBD has been able to take advantage of the full origination capabilities of the broader private credit platform and its scale, enhance our infrastructure, and improve upon our underwriting capabilities. I'd like to highlight a few examples.
Amidst a volatile market and muted deal environment, the Goldman Sachs Private Credit Platform remained active deploying $12 billion in 2023. The Direct Lending Americas platform comprised the majority of that activity with over $6 billion deployed. Furthermore, taking advantage of the broader scale and origination capabilities, GSBD served as agent or lead lender on well above the majority of its new deals in 2023. Second, the team has spent the past two years actively upgrading GSBD's portfolio quality. As a point of reference, in the 4th Quarter of 2021, just prior to the integration, GSBD had 89.3% at fair value in First Lien Senior Secured Loans, whereas as of the 4th Quarter of 2023 that figure stood at 95.3% at fair value.
At the same time, in the 4th Quarter of 2021, Second Lien Loans comprised 8.2% of the portfolio at fair value versus the 4th Quarter of 2023 where Second liens made up only 1.9% at fair value. This is a result of actions we have discussed in previous quarters, whereby repayments in junior lien positions have allowed us to redeploy capital into attractive opportunities higher up in the capital structure, and we proactively took marks on legacy junior positions. Finally, our integration has allowed, with a significant expansion of our overall deal funnel, to provide more proprietary and unique direct lending opportunities for GSBD. For example, since 2004, Goldman Sachs Private Credit has been the leading lender to the middle market wireless tower sector, deploying close to $7 billion of capital with no losses to date.
During the quarter, the Goldman Sachs Private Credit Platform served as a lead arranger on a senior secured facility to Skyway. Founded in 2005, Skyway is a Florida-based wireless tower operator with 445 towers in its portfolio. The facility continues a longstanding Goldman Sachs relationship with the Skyway team, which began with the financing of the Skyway's first portfolio in 2011 before its sale to American Tower, followed by the financing of multiple subsequent tower portfolios, including the current one. This is but one example of a new set of investment opportunities made available to GSBD resulting from our integration efforts. Harrington is another example of an investment in the quarter where GSBD utilized the scale of the broader senior direct lending platform to provide a commitment for the entire facility that allowed the sponsor to win the asset, and we served as lead arranger.
Harrington is a California-based specialty distributor of precision fluid control products across a variety of industry sectors. We are proud that we have been able to capitalize on the thesis that we communicated to our shareholders and lenders when we integrated GSBD, and we remain committed to leveraging the broader private credit platform for the benefit of GSBD shareholders in the quarters and years ahead. As we announced after the market closed yesterday, our board declared our first quarter $0.45 per share dividend payable to shareholders of record as of March 28, 2024. This marks the company's 36th consecutive quarter of a $0.45 per share dividend, totaling $16.20 per share since our IPO, excluding the special dividends we paid in 2021 post-merger with MMLC. Net asset value was $14.62 per share as of December 31, 2023.
This increase was primarily attributable to net investment income exceeding our quarterly dividend, partially offset by net realized and unrealized losses for the quarter. We had previously expressed confidence that deal volumes would increase as the year progressed, and the trend indeed continued in the 4th quarter as it did in the 3rd quarter. During the 4th quarter, we reviewed more than 150 investment opportunities across our Direct Lending Americas platform and deployed capital at strong levels as David will expand upon in a bit. While we acknowledge that recent deal volumes have improved from recent lows in the past several quarters, we have also witnessed greater competition in the direct lending space, resulting in spread tightening over the past several months.
We anticipate that as the overall deal environment improves, supply-demand for private credit will align to support spread premiums and tighter lending terms in line with historical private credit underwriting experience. At the same time, it is worth considering that while the broadly syndicated loan market has also reopened, although primarily for near-term refinancings, this is a dynamic that is more impactful to the upper middle market to larger cap segments, whereas GSBD is more focused on the core of the middle market. With that, let me turn it over to my co-CEO, David Miller.
David Miller (Co-CEO)
Thanks, Alex. During the quarter, we originated $166.2 million in new investment commitments to 14 new and four existing portfolio companies. Sales and repayment activity totaled $224 million, primarily driven by the full repayment and exit of investments in seven portfolio companies. In particular, as we continue to upgrade the quality of the portfolio, we are pleased with the full repayment of one junior lien position and exit of two equity positions, which will allow us to continue redeploying capital into new first lien-oriented opportunities. Turning to portfolio composition. As of December 31, 2023, total investments in our portfolio were $3.4 billion at fair value, comprised of 97.2% in senior secured loans, including 91.1% first lien, 4.2% first lien last-out unit tranche, and 1.9% in second lien debt, as well as a negligible amount in unsecured debt, and 2% in a combination of preferred and common stock and warrants.
As of quarter-end, the company held investments in 144 portfolio companies operating across 38 different industries. The weighted average yield of our investment portfolio at cost at the end of Q4 was 11.8% as compared to 11.6% from the prior quarter. The weighted average yield of our total debt and income-producing investments at amortized cost remained at 12.6% at the end of Q4. I will now turn the call over to Tucker Greene to discuss our overall credit quality.
Tucker Greene (COO)
Thank you, David. The weighted average net debt to EBITDA of the companies in our investment portfolio increased to 6.1 times from 5.9 times during the 3rd quarter. This increase is primarily attributable to a single position that had a dip in EBITDA, which we believe is one-time in nature. Excluding this one-time move, weighted average net debt to EBITDA would have been 5.9 times. Importantly, our portfolio companies have both top-line growth and EBITDA growth year-over-year on a weighted average basis. The weighted average interest coverage of the companies in our investment portfolio at quarter-end remained flat at 1.5 times, as SOFR rates decreased very slightly for the quarter. We continue to monitor interest coverage sensitivity at underwrite for new investments and for each name in the portfolio. The underlying borrower's EBITDA growth, combined with lower rate increases, has provided stability to the coverage ratio.
Finally, turning to asset quality, as of December 31, 2023, one portfolio company was placed on non-accrual status, LCG Vardaman Black LLC, also known as Specialty Dental, a first lien position representing less than 1% of fair value. Further, certain investments in three portfolio companies were removed from non-accrual, two of which were due to repayment and one due to improvement in performance. As of December 31, 2023, investments on non-accrual status remained consistent at 2.3% of the total investment portfolio at fair value compared to 2.3% as of September 30, 2023, and decreased to 3.8% of the total investment portfolio at amortized cost from 4.2% as of September 30, 2023. With respect to underperforming credits in the portfolio, it is worth noting that our upgraded platform also includes embedded workout resources and expertise to address the aforementioned underperforming credits that were predominantly originated prior to the integration.
Of note, our restructuring team currently has an average of 13 years of industry workout experience. I will now turn the call over to Stan Matuszewski to walk through our financial results.
Stan Matuszewski (CFO)
Thank you, Tucker. We ended the 4th quarter of 2023 with total portfolio investments at fair value of $3.4 billion, outstanding debt of $1.8 billion, and net assets of $1.6 billion. Our ending net debt to equity ratio as of the end of Q4 was 1.11 times, which continues to be below our target leverage of 1.25 times. At quarter-end, approximately 47% of the company's total principal amount of debt outstanding was in unsecured debt, and we had $724 million of capacity available under our secured revolving credit facility. As previously mentioned, during the quarter, we executed an extension of the maturity of our secured revolving credit facility from May 2027 to October 2028. As a reminder, we have two separate unsecured notes due February 2025 and January 2026, respectively. As we mentioned on last quarter's call, we plan to address these maturities at the appropriate time.
Before continuing to the income statement, as a reminder, in addition to GAAP financial measures, we will also reference certain non-GAAP or adjusted measures. This is intended to make the company's financial results easier to compare to results prior to our October 2020 merger with MMLC. These non-GAAP measures remove the purchase discount amortization impact from our financial results. For Q4, GAAP and adjusted after-tax net investment income were $61.8 million and $60.7 million, respectively, as compared to $72.9 million and $69.7 million, respectively, in the prior quarter. On a per-share basis, GAAP net investment income was $0.56. Excluding the impact of asset acquisition accounting in connection with the merger with MMLC, adjusted net investment income for the quarter was $0.55 per share, equating to an annualized net investment income yield on book value of 15%.
Importantly, we would note that while total investment income declined between the third and fourth quarters, the decline was driven by lower non-recurring investment income resulting from a decrease in repayment-related activity, despite an increase in recurring investment income. Finally, the PIK percentage of our total investment income decreased slightly quarter-over-quarter and is only slightly up year-over-year, remaining in the single digits. Distributions during the quarter remain consistent at $0.45 per share. Our spillover taxable income is approximately $118 million, or $1.08 per share, on a per-share basis, which we believe provides continued stability on our consistent dividends since inception. As Alex mentioned, net asset value per share on December 31, 2023, was $14.62 as compared to $14.61 last quarter. With that, I'll turn it back to Alex for closing remarks.
Alex Chi (Co-CEO)
Thanks, Stan, and thanks everyone for joining our earnings call. We remain optimistic about the performance of our portfolio, the current environment, and the outlook for deployment into attractive opportunities. With that, let's open the line for Q&A.
Operator (participant)
If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach your equipment. Again, please press star one to ask a question. We'll go first to Finian O'Shea with Wells Fargo Securities.
Finian O'Shea (Equity Research Analyst)
Hey everyone, good morning. Alex, we were interested in some of your earlier comments on the private credit integration in GSAM.
Speaker 10
All right, could you open the line for Q&A, please?
Operator (participant)
The line is open, sir.
Finian O'Shea (Equity Research Analyst)
Hi, can you hear me? Can you hear me?
Operator (participant)
I can hear you, sir.
Finian O'Shea (Equity Research Analyst)
Alex? I can't hear the Goldman team.
Robert Dodd (Equity Research Analyst)
Operator?
Operator (participant)
Yes, I am here. Can you hear me?
Finian O'Shea (Equity Research Analyst)
I can. It's Finian. Okay, can anyone hear me?
Operator (participant)
This is the operator. Yes, I can hear you, Mr. O'Shea.
Finian O'Shea (Equity Research Analyst)
Can the team hear me?
Operator (participant)
It appears not. Give me just a moment.
Speaker 10
The host would like you to unmute your microphone. You can press star six to unmute.
Finian O'Shea (Equity Research Analyst)
I don't think I'm muted.
Operator (participant)
You are not, sir.
Finian O'Shea (Equity Research Analyst)
Oh, okay.
Speaker 10
I dialed green. Should I try dialing in from the phone?
Robert Dodd (Equity Research Analyst)
Hello, I can hear you now. It's the thing you turned.
Operator (participant)
We can hear you now.
Robert Dodd (Equity Research Analyst)
Oh. All right. Can you hear us? Can you hear us?
Finian O'Shea (Equity Research Analyst)
Yes, I can hear you now.
Robert Dodd (Equity Research Analyst)
Can you hear us?
Finian O'Shea (Equity Research Analyst)
All right.
Speaker 10
All right. Why don't we start over? Sorry about that. We're having some technical difficulties here.
Finian O'Shea (Equity Research Analyst)
Okay.
Robert Dodd (Equity Research Analyst)
Sounds like Finn. How are you?
Finian O'Shea (Equity Research Analyst)
Good, good. Thanks for having me on, and we'll start the Q&A. So, Alex, we were interested in some of your initial comments on the integration. There are historically three credit franchises with distinct strategies. So does this mean it's all collapsed into one strategy now, or else what's new about the way the platform works?
Tucker Greene (COO)
That's a good question. And again, it's all part of one platform now. And to your point, just for historical reasons, we had three different arms of Goldman Sachs that were in the private credit direct lending business, and then two years ago, we brought it all together. With respect to the various vehicles that we have, they continue to pursue their own distinct strategies. So, for example, we have other pockets of capital that are in the large-cap senior direct lending space, and that continues. GSBD has and will continue to focus on the core middle market. And then we have other pockets of capital that focus on Mezz, on hybrid special situations, etc. And so it all brings it together.
It's all on the private side here at Goldman, and so it just allows us to take advantage of the broader ecosystem, as I mentioned, where we can get the full benefit of all the sourcing and the origination and the army of bankers that we have talking to companies and sponsors every single day. And it just brings a full weight of the firm, and it just allows us to have a wide funnel, as we've talked about, proprietary deals and the benefit of just really strong due diligence. At the same time, it's one team, so we don't have three different teams. So in the U.S., we have about 80 investment professionals, and they're all focused on origination and core underwriting.
And then when we source a deal, an investment, we know exactly where it's going to go based upon the various vehicles and the strategies that we have. So we just want to be a direct lending solutions provider to our borrowing clients.
Finian O'Shea (Equity Research Analyst)
Sure. Within the other strategies, what's the benefit of a core middle market deal? How much more capital do you have to, say, lead a deal or drive terms and all of the above? What helps the core? Go ahead. Sure.
Tucker Greene (COO)
No, it's a great question. So first of all, what we couldn't do before was if the large-cap pocket of the firm originated a deal that was, call it, core GSBD focus area, $50 million EBITDA, it was too small for the large-cap. We could not refer it to GSBD, even if we wanted to. Just weren't allowed to. So when we obviously collapsed it, GSBD now gets the benefit of that origination. On top of that, as we've also talked about, GSBD has its own vehicle, has its capital, as you know. But when we're in an increasingly competitive environment where scale matters, for example, the Harrington deal that I just talked about, we have other pockets of capital that can speak for that deal in its entirety.
So that allowed us, as a platform, to go to that sponsor and say, "We can underwrite the entire deal, give you a commitment for the entire financing so you can go win that sell-side auction." And that's exactly what we did. GSBD got an allocation to that, and so that's how we go to market now.
Finian O'Shea (Equity Research Analyst)
Okay, so if I take this, you can do larger deals, and I think you were in the commentary, you also flagged the non-accrual as a pre-integration credit. Does this mean you're going to move up in EBITDA in a meaningful way?
Tucker Greene (COO)
No. No, look, that's something we could explore at some point in the future, but as I mentioned, in terms of the criteria for the size that we've stuck to for GSBD, it's really up to businesses with EBITDA of up to $200 million. And so that's why you just really haven't seen the EBITDA move up meaningfully. It ticked up a little bit in the fourth quarter, but it's still in or around the $50-$55 million EBITDA range for the portfolio within GSBD. We have other pockets of capital that can pursue large-cap as well as mid-market at the same time. GSBD will always be focused on, will continue to be focused on, on the middle market.
Finian O'Shea (Equity Research Analyst)
Okay, that's helpful. Last one for me on this thread. The other two groups historically sourced origination from the investment bank, sponsor coverage, leveraged finance, etc. Is that going to bring the BDC franchise? Does that come into that fold, or are we now going to source from the investment bank?
Tucker Greene (COO)
So first of all, I appreciate that it's certainly an advantage to have the investment bank, their originating investment opportunities for us. But still, the vast majority of the deals that we've originated are really directly off the platform. Having said that, we get a tremendous amount of referrals that come in from investment banking, from private wealth that cover the largest family-owned enterprises in the world. If you look at just over the course of the year where we had the full year of the benefit of integration, roughly about a third of the new deals that we did within GSBD came from this one Goldman Sachs advantage, as we'll talk about. So we're not certainly relying upon investment banking to source for us, but it certainly provides additional flow and allows us to be a lot more selective about what we choose to do.
Finian O'Shea (Equity Research Analyst)
Awesome. Thanks so much.
Tucker Greene (COO)
Thanks, Finn.
Operator (participant)
We'll go next to Arren Cyganovich with Citi.
Arren Cyganovich (Equity Research Analyst)
Thanks. I think you mentioned in your prepared remarks that you're seeing kind of activity or expecting activity to pick up and expectations for spread to tighten. Are you seeing, from a competitive standpoint, banks reentering into lending, or is this still primarily just the direct lenders you're competing against?
Tucker Greene (COO)
So we're certainly seeing the BSL market reopening. We have our own leveraged finance department within banking that's certainly active. But what we're also seeing is that that's really a large-cap phenomenon. We have our own large-cap vehicles, and we're certainly seeing additional competitive pressure from that standpoint in addition to the large amount of private capital that's just been raised overall. But we have not seen banks really get back into the core middle market, which is where GSBD plays. And so although we have seen a bit of spread compression over the course of the year and quarter-over-quarter, it has not been the magnitude of what we've seen on the large-cap side of the business.
Arren Cyganovich (Equity Research Analyst)
Okay. And then you had mentioned that you had one company that had dipped in EBITDA, but from a broader perspective in your portfolio of companies, are you seeing continued EBITDA growth, or is that starting to slow to some extent?
Tucker Greene (COO)
We're certainly seeing continued EBITDA growth. If you look at the fourth quarter on an LTM basis, our top line for the portfolio grew on a weighted average basis about 16.5%, and on an EBITDA basis, it grew about 7.5%. But what's also interesting is if you look at EBITDA margins quarter-over-quarter, we're certainly seeing how our portfolio companies are passing along price increases to their customers. EBITDA margins actually expanded about 130 basis points in the fourth quarter over the third, so we were really happy to see that.
Arren Cyganovich (Equity Research Analyst)
That's helpful. Thank you.
Tucker Greene (COO)
Thank you.
Operator (participant)
We'll go next to Mark Hughes with Truist.
Mark Hughes (Managing Director and Senior Research Analyst)
Yeah, thank you. Good morning. Just looking at your spread of ratings, just looking at the percentage of the portfolio, kind of the one through four, a little bit of movement in there, still high quality, but a little bit of erosion. Is that kind of the higher-for-longer, just interest coverage issue? What would account for the little bit of movement? And then do you think that's kind of hit its worst? Should it stabilize from here given the interest rate environment, given the economy? How do you see that?
Tucker Greene (COO)
I think with respect to the portfolio, there might be some movement from name to name, but in terms of the overall quality of the portfolio, we really haven't seen much movement. It's actually quite stable. As you saw, we moved one name from rating two to rating three, and we took a mark on that particular position. But we also moved a number of names off of non-accrual as well as we exited those investments, two of them, and another one actually we put back on accrual just based upon good performance. So I wouldn't call out anything idiosyncratic about our portfolio. It's just really quarter-over-quarter just based upon the dynamics that we've talked about.
Mark Hughes (Managing Director and Senior Research Analyst)
Understood. And then on your net investment activity, it sounds like more opportunities that you're looking at. You've had some decent repayment activity here lately. How do you think that's going to shake out in the near term? Is it still kind of a push, or when do you start to get ahead of that?
Tucker Greene (COO)
Look, in terms of activity, we remain quite optimistic about the second half of this year, lots of different factors which I'm sure you've heard of from us as well as other managers in the space. But private credit continues to be driven really by private equity activity, leveraged buyouts, add-on activity. It's well known, just the sheer amount of dry powder that's out there. In addition, there is a significant amount of portfolio companies that are owned by private equity firms that really just have to be monetized. I believe last year was the second lowest amount of distributions from private equity firms to their LPs in a quarter century. So in order for private equity firms to really raise their next funds, they're going to have to distribute capital.
So at the same time, just going back to Finn's question, we have the benefit of speaking with our investment bankers who sell many companies to private equity firms. And they will tell us that the backlog of companies that they've been mandated to sell just continues to sit at near-record levels. So for all those reasons, we remain optimistic. If rates do start to come down later in the year, that should signal more confidence. And so that will also just open the floodgates a bit more on M&A activity, and we will get our share of that.
Mark Hughes (Managing Director and Senior Research Analyst)
Thank you.
Tucker Greene (COO)
Thank you.
Operator (participant)
As a reminder, if you do have a question, that is star one.
Tucker Greene (COO)
Perfect. Excellent.
Operator (participant)
We'll go to our next question from Robert Dodd with Raymond James.
Robert Dodd (Equity Research Analyst)
Hi, guys. On the repayment activity in the quarter, obviously, that was up pretty significantly, but the repayment fees, accretive yields, etc., were down. Was that just coincidental, or was there any effort by you to, how can I put it, encourage some of the older assets, which had had lower accretive yields, to migrate out of the portfolio? I mean, is this a part of the rotation or just coincidental?
Speaker 10
Yeah. Hi, Robert. Yeah, it's just coincidence. I'd say last quarter, we had some investments that exited that were some larger investments with a greater amount of OID, which was unamortized, some deals that had come over in the MMLC merger that had large unamortized balances. That was really what was kind of driving up that non-recurring income last quarter. We did still see some accelerated amortization and repayment-related interest income this quarter, but it just wasn't to the magnitude coincidentally with the handful of investments last quarter with the larger balances unamortized.
Robert Dodd (Equity Research Analyst)
Got it. Got it. Thank you. On leverage, I mean, you are below target right now. I mean, obviously, with rates where they are, you don't need to be pushing the envelope on leverage to produce earnings well in excess of the dividend, right? So should we expect leverage to ramp up rapidly, or is it going to be relatively rapid, depending on the market and activity? Or is the intent to ramp it up a little slower maybe as rates come down, that's kind of a long-term factor?
David Miller (Co-CEO)
Hey, Robert. It's David. No, I think you'll see us take that up slightly. I don't think you're going to see a rapid increase. As you know, 1.25 is our target leverage, so I think you'll see us in future quarters probably approach that level, but it's going to bounce around up and down a little bit from our target level depending on activity in the portfolio.
Robert Dodd (Equity Research Analyst)
Got it. Thank you. Then on the last one for me, the unsecured side, obviously, you don't have maturities until 2025, 2026, but would you be looking to potentially come to market if that opens up maybe this year to increase your unsecured mix or pre-fund the 2025s? And how could that if you did, would you be looking to do that at fixed rate, or well, it would be a fixed rate, but would you be looking to swap that to manage the exposure to rate differentials, or are you going to stay with your historic pattern of unsecured stays fixed?
David Miller (Co-CEO)
Yeah. I mean, look, we're actively monitoring the market. As you point out, we have some 2025 maturities, so I think you'll see us address those at the right time. As far as fixed versus floating, we're going to evaluate that at time based on where the curve is and what's most beneficial to our investors depending on when we execute a transaction.
Robert Dodd (Equity Research Analyst)
Okay. Thank you.
Operator (participant)
There are no other questions at this time.
Tucker Greene (COO)
Thank you very much, everybody.
Austin Neri (Investor Relations)
Appreciate it. Thank you.
Operator (participant)
This does conclude today's conference call. Thank you for your participation. You may now disconnect.