Dividend Coverage Confidence
Q: How confident are you in covering the dividend after the fee cut?
A: Management feels very comfortable covering the dividend due to the reduction in the management fee to 1% effective July 1 " , adjustments for inter-quarter timing differences in repayments and fundings " , and a healthy pipeline of investments. "

Spread Compression and Yield Impact
Q: What caused the decline in interest income—spreads or timing?
A: The decline was due to spread compression of around 15 basis points on the weighted average yield " , partly from the second-lien portfolio impact of 10 basis points " , and timing differences, with $330 million deployed mid-February to March causing about a 1.5-cent impact this quarter. "

Portfolio Credit Quality and NPAs
Q: How are portfolio valuations trending excluding nonperforming assets?
A: Excluding NPAs, the portfolio was relatively flat quarter-on-quarter. " Unrealized depreciation was mainly due to write-downs in Thrasio, Impel, and OTG, their nonperforming assets from December 31. "

Fee Cut Rationale and First Lien Shift
Q: Does the fee cut reflect expected lower returns due to spread tightening?
A: The portfolio has shifted to 80% first lien from 60% 24 months ago " , reflecting a lower risk profile. The fee reduction to 1% aligns with this shift and aims to deliver stability to shareholders, not necessarily predicting future spreads. "

Balance Sheet and JV Leverage
Q: Is there appetite to increase leverage at JVs and on balance sheet?
A: JV leverage increased to 1.3x with a target of 1.5x to 1.75x as they rotate into more first lien assets. " On balance sheet, net leverage is over 1.0x, moving toward 1.1x, leaving capacity up to their 1.25x target. "

Prepayment Income Outlook
Q: Should we expect normalized prepayment income in a high-rate environment?
A: Prepayments may be higher over the next 12 months than in late 2022 and most of 2023 " , driven by idiosyncratic events like company outperformance or M&A. " However, it's difficult to predict due to rising rates and portfolio turnover. "

Investment Activity Expectations
Q: What are your expectations for new investments and prepayments ahead?
A: Already funded $100 million this quarter " , with a healthy pipeline suggesting another strong quarter for originations. " They have less visibility on unexpected prepayments but note the market is opening up. "

Portfolio Company Performance
Q: How are portfolio company revenues and EBITDA trending year-over-year?
A: Generally, revenues are stable to modestly increasing, and EBITDA is stable. " Over the past 2-3 years, companies have seen revenue growth of a few percentage points annually, with EBITDA flat to slightly up. "

Repayment Activity and Turnover
Q: Can you provide color on recent repayments and exits?
A: Repayments included large private positions like Melissa and Doug " , Ardana, and a second-lien repayment in Blackhawk Networks. " Total exits were about $56 million in public assets and $201 million in private assets, often at better than par. "

Nontraded BDC Fundraising
Q: How is nontraded BDC fundraising progressing, and does it strain resources?
A: They've been raising about $150 million per month for two years " , which works well and is not a burden on resources. " " The partnership with Brookfield in Brookfield Oaktree Wealth Solutions supports retail channel activities. "

Secondary Market Activity
Q: What drove the higher secondary market purchases at higher prices?
A: They rotated into higher-spread public names and purchased CLO BB tranches in the high 90s, with spreads in the mid-700s. " This opportunistic move was due to strong CLO issuance and allowed them to obtain outsized pricing. "