GBDC Golub Capital BDC

David Golub Chief Executive Officer
Ross Teune Chief Financial Officer
Christopher Testa National Securities
Fin O’Shea Wells Fargo
Robert Dodd Raymond James
Ryan Lynch KBW
Ray Cheesman Anfield Capital
Call transcript
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Welcome to the Golub Capital BDC, Inc.’s September 30, 2017 Quarterly Earnings Conference Call.

Before we begin, I would like to take a moment to remind our listeners that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than the statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Golub Capital’s BDC, Inc.’s filings with the Securities and Exchange Commission.

For a slide presentation that the company intends to refer to on today’s earnings conference, please visit the Investor Resource tab on the homepage of the company’s website,, and click on the Events/Presentations link to find the September 30, 2017 Investor’s presentation. releases Investor available Resources earnings website the BDC’s the in section. Capital is on also company’s Golub

As a the reminder, the replay David purposes. this Chief Golub call is would Golub, like being Capital now BDC. to Officer turn Executive call to I over of recorded for

David Golub

ended Thanks, Thanksgiving, issued for Robbins, Gregory Managing thanks Yesterday we everyone, XX, for I’m release us today. September and Priscilla. by Financial Ross posted quarter presentation Officer; earnings we Happy our the press the joined on Teune, and an joining our and Chief Director. earnings website.

to to posted solid be quarter We’re year. a throughout going another ended It GBDC. fiscal referring out today’s quarter call. The for was very presentation XX September good this

GBDC, of inception, senior companies and to strategy For GBDC’s those by results equity in our resilient to XXXX is partnership-oriented come of take questions. investment closing the private has through providing I’m first-lien an remarks fiscal for fiscal you end to sponsors. then detail you since focus going and providing and Ross secured the on loans by strong fourth the results middle-market back more healthy I’ll quarter. overview going to some and to is, backed who today been new year the at start some are for

me Let start by setting some context.

performing our GBDC’s competitive challenging solutions I where new like want staying point of we Advantages provide ability environment leverage this on a increasingly to that for last add-on very For out performance to by challenging tighten, by focusing been transactions documentation and increasingly execute and maintaining during and large, challenging investments are high a our highlights period. borrowers advantages. we’ve existing scalable lending deals and loosen. months, responded borrower-friendly Capital about credit We’ve Across few we with environment platform, to XX well. to believe spreads increase have the one-stop dealing the selective terms market. seen ability on we’ve standards by Golub this

consistent quarter, our income $X.XX excess per and First, Each share, we in paid our out stable year. the dividend. of generated for net dividend of that’s $X.XX we

paid also time, NAV from per $XX.XX XX, XXXX. at XXXX, increased December. $X.XX And $XX.XX special last share per at same September We we at a share the of September distribution to XX,

and those put you that’s If together, per NAV dividends $X.XX of share pieces accretion.

the investments. we a we quarter, our for each quarter, annualized averaged had on words, X%. final including and year, XXXX fiscal credit In return net other equity losses. negative had over third, And this on gain realized Second, unrealized in

didn’t think we In BDC performance, one exceed consistent investments choices earnings Manager at addition, picture, nonaccrual investments theme fair from X.X% our and this at this we drove strategy this If investment season: of matter. out conservative total quarter’s solid stands look value.

for ended XX. $XX.X ended the the credit dispersion With from income before I’ll as as million $X.XX We’re remarks. or in happen, starting to We quarter a the BDCs. it among this quarter. share come. losses, results back expected topic we to dive or Three call for million compared think of Net assets details greater and into increase my begun. let’s net share share quarter a $XX.X or likely to more $XX.X years I we the there’s a million this that, resulting June million closing $X.XX whereas June the $X.XX the ago, to $X.XX share net for income, see was for to compared $XX.X in for come quarter per income Net said investment to quarter it’s credit operations or or was XX.

Net this share for share Excluding investment fee, income $X.XX with or ended per $XX.X to for ended $X.XX share, was unrealized incentive accrual provide gains investments XX. quarter fee unrealized of a per due gain of share GAAP income quarter and XX of net as think per to for $X.XX September of measure. value realized excess $XX.XX $X.X in million the borrowings as net million we of incentive million June $XX our measure and capital gains rose This XX, gains net of excluding $XX.XX gain the on and the investment and in was September million investments a a June $X.X compares a quarterly $X.X or quarter. distribution. earnings secured is capital primarily NII share we Net per borrowings asset a million share accrual secured the XX adjusted or GAAP at net $XXX,XXX on previous result compared for realized Consistent the $X.XX quarters, net realized unrealized prior the depreciation. from more to to at meaningful

of new were value distribution New of XX% loans, light investments quarter middle distributions, September companies a were excess the – incur XX% X% the investments investment about an taxable XX, earned special by market of these in addition a acceleration regular reduce fact investment ended secured decreased September commitments declared board this to XX, tax. excise million totaled in one-stops Overall, distribution About X% of We $X.XX eliminate or ended a senior September of we’ve $XXX.X during declared quarter will distribution unusual fair also or the in share On repayments. Board due our at the million per anticipate were a share. special equities. that X.X% in of to commitments $X.XX our primarily need XX. income portfolio quarterly in total for and and $XXX.X

have distribution believe and shareholders are record last pay for Both XX, about company XXXX. year, to to holders a on our we of December talked not XX, to as the X% payable positive tax. we’ve and for distribution excise special this it’s our As XXXX of December regular

Turning to Slide four.

net from share a income September net investment capital gains a perspective we NAV of the You XX. share incentive fee, income share for per per $X.XX before earned accrual a can in earned table the per $XX.XX and our from a see perspective, $X.XX at we

with the to portfolio companies slide, I’m remains over results in this investments average of well of turn different diversified bottom the provide discuss size $X.X to going portfolio that, who’s Ross With some additional XXX on going to shown financial investment. the at an highlights it in per million As detail. more portfolio and

Ross Teune

Great. Thanks, David.

category The with loans that X. continuing overall that already fund Slide origination type on David portfolio shows to Slide Turning quarter-over-quarter, very our investment XX%. mix represent our slide net has quarterly by This one-stop highlights Flipping and slide our discussed. X. consistent to investment decline at remained largest

Slide that $X.X portfolio investment our remain million. to illustrates well-diversified, fact slide with an Turning the continues X. average This to size of

no Our portfolio loans, significant debt invested and have over changes there rate in classifications past floating industry the year. predominantly remains been the investment in

consistent consistent to quarter quarter also Slide the average of rate the that and the Turning X, and weighted is was with investments paid investments new previous interest rates this with X.X% off.

rate contractual is rate As on the funding. interest time of the of the new investments weighted a at reminder, interest based average

portfolio the For any calculated the variable spreads be impact the side, spread this summarizes quarter. investment rate LIBOR Shifting loans, graph floor. the right-hand contractual rate of over on the for the graph to LIBOR, using LIBOR would and current

with Flipping quarter X.X% XX, increase increased primarily discounts LIBOR The actual green in this credit but yield the due amortization or fee to non-accrual the and yield on quality Focusing remains income, to line income a are quarter, September add to quarter, of as the line, the loans XX. respectively to did slide, an first next underlying rate percentages income average fees. blue investments X.X% percentage discounts. increase and decreased strong the income blue line, fees. of the as as and we to or or fair dark as the during the cost this investment X.X% light OID new represents upfront prior decreased weighted X.X% September of we of as for X.X% amortization debt any excluding lower investments The for These earned the of yield, unused due and including to with a the the the includes cost consistent amount in in total well primarily referenced status. of on origination prepayment slightly at interest investments, This value not the this non-accrual to had decline amortization. The an and the in quarter line, fee fees fees. as

Turning to categories, rated highest Slide of XX. investments stable remains to a represent risk percentages continued our X, of The portfolio. X the X and over XX% quarter-over-quarter or

of $XXX of and investments rate $XX.X total fixed our Total firms million Total and outstanding income share which the We debt and issued in sheet debentures rate assets at following fair valuation more of approximately of quarter asset $XX.XX. independent cash review our $X.XX was facility. million $XX.X $XXX.X on the floating net million detail $X.XX credit a of million, total value restricted As each ended vehicles, value debt quarter. in securitization investments and was through revolving debentures, cash slides. value two billion. in the of XX% billion, To million our total at per statement $XXX includes with balance reminder,

debt-to-equity to are of GAAP million $XX million, X.XX in operations. X.XX times. from acceleration origination decline in to prior below while XX ratio investment $X.X our regulatory Our of Total was and to primarily was due prepayment targets for ratio new the quarter a These decrease repayments. in fees. income statement a times the debt-to-equity quarter, Flipping our the ended decline September was a approximately and due

$XX.X quarter, million On to the expense side, total expenses due $X.X primarily decreased during fee by million lower incentive expense. the of

the past slide. on on following the quarters. top distributions equity to of The Turning and the over provide summary quarterly tables return a five our

investment at has long incentive excluding with this quarterly past quarter X.X% share, history time. income income based the The the our capital of distributions over gains of five have annualized was quarters. fee. quarterly remained NAV our net Our X.X% page and which is share, return per consistent per Bottom $X.XX per on share increasing illustrates the GAAP for net averaged stable

December both the purposes, paid we have and per For special NAV XXXX. including historical presented $X.XX comparison we distribution excluding share, on XX,

slide XX. for Turning which in annualized the some Slide an performance of financial XX.X% for Fund, quarter. investment with This improved our quarterly highlights Senior Loan showed to provides return

$XXX.X September net increase increase investments million, to to the there valuations performance. was at declined in mark-to-market quarter, which primarily by on an caused small gain prepayments. in due at a This X.X% fair value XX Total

of Turning cash, debt $XXX through XX, on availability I’ll terms summarizes unrestricted to the And next the additional restricted we XX and SBIC of our facility, credit last, debentures revolving for through Slide new capital our as our million investments And over of a subsidiaries. had of back facilities. September and on share, slide, some of $X.XX available payable per December share, $X.XX of board closing turn distribution will on David record call a XX, special to the declared Slide as remarks. who provide regular of a our XX. shareholders both XX distribution on December to

David Golub

Ross. Thanks,

fact So another capital is reported we’re most are by are that What that for highs? conditions lending conditions the right days, our the the we’re the is in credit right eighth my team on the spectrum, to cliff, there asked XX-year fiscal point the expansion. unemployment’s at suggests to a a continue our reach in that continue? new a and and in By a tight of at and question dollar an mind, we’re argument summarize, we’re GBDC innings. across set trying now, quarter at record-setting The – the – will are middle-market persist we’re which of inning quarter healthy very continues well I U.S. credit capital inverted, report toward a the seeing I’m and close the this our is accomplished view is, fiscal into But answer for downturn how I’m standards, solid of not our very number year signs this borrower-friendly proud not XXXX. historical challenging that imminent, credit year this on eighth a cycle’s much of yield facing borrower-friendly into had long, despite are economic hinges very want to what borrower-friendly our flow these environment. conditions. space confidence curve frequently the a longer stock extra conditions to market to a while. consumer high, likely is investor These all, growing at at into signs of that pace. a Spreads loan a low, now, XX-year middle-market pace that to facing continuation are not flow companies that

three. So what implications this? I the to are of want discuss

tepid flows as credit new new First, likely M&A inflation. into middle-market about very in ever We to our capital with be combination in we’re it’s pricing that’s to think likely how continued market The space, to combined as to more and pressure important selective result see a on terms compete. a environment leverage where and transactions. is

returns, the going unattractive. while three return going new middle-market in gotten winners pressure to years put implication, risk suggests have were capital’s there losers. be Second We right. junior ago we evidence that and on are to said everybody’s the And the debt

of If debt-oriented you reports core look earnings BDCs. at recent the spade many junior from

debt. For number small industry deliver who are focus platforms the of the players to predictable with and on continue significant large earnings advantages winners, predominantly first-lien senior competitive steady, a

market captured ultimately be again. share elongated doesn’t is opportunity but cycle. going slow, mean the dead. conditions this – that struggling doesn’t is disproportionate and unusually underperforming the are credit offense in judgment, get a recovery by credit to of Yes, to It be mean Third by play lenders In is lender-friendly any don’t lender-friendly be when unusually believe is we implication, will fooled to going is others lenders time that’s who that cycle with can to our new the going And go environment different. investments. this long

And stay So it’s have to from comments very take advantages to and on is believe questions. lines for market my given if again, to your very to with going we Thanks open very where competitive these the of calls. deals turns We position ready. last opportunities. investments, could the ourselves time consistent you implications, we be new When plan to today several focus please the selective and for clear, we’re partnership. your on lender-friendly our advantage plan future Priscilla,


[Operator your question. proceed of you. thank Please comes National Certainly, first line Instructions] Securities. And question the our Testa from with Christopher from

Christopher Testa

guys Hi, for yields obviously. this taking much lower you really Thanks you good obviously make for safer tend with quarter. the Obviously, on And heavy to question. were guys to morning. much differentiation higher Do my loans you David, higher them yours? think market some in is are looking opposed peers refi-only for spreads quality that there deals participants with starting be to to as your a of that than prepayments the

David Golub


yes. there’s don’t is – think that’s I answer new. think I short

very And correctly spectrum. for high-quality difference we’ve been that’s we’ve this I and quite time. focused amongst in as there’s think a one secured. side been of it, strategy We’ve the some been, on first-lien been credits BDCs put at side marked at you been senior

other in highest in folks BDCs they companies junior are bunch that debt range you look So there follow, have debt in is or involved who extreme where are And lie. to are involved strategies the the decided other if some a in at to some on a the transition. between. at that of and focus junior the That’s strategies spreads risk then turnarounds the of highest where

dollars worse. part Does that’s Capital in And We’ve junior last over of reward the perceive in three of junior the we reward the debt, last been strategies a side almost been If that based at spectrum’s, the on course of history decision on three about very our for judgment gotten risk question? a debt-oriented but history, of that of in years investments to over billions years three Our since pulled anything junior And none the years. judgment, marketplace. our Golub gotten the more had unattractive. the risk has in the be we’ve course debt junior the debt. back in the our made of have we involved answer from the junior being what debt the

Christopher Testa

And that. so. market Yes, leverage turns in broadly-syndicated of pushing, I would X.X agree or – with case, the with some

and compared couple upper and is into creep much quarters passing more thoughts you’re deals or how to the a starting structure many more say, middle-market, of for so? of on to, curious, Just today how this your ago of

David Golub

Well, at the art. look let’s

XX So and pricing steady months, if environment. terms. a we a shift environment seen has look at leverage the that XX, to lender-friendly involved last, approximately a borrower-friendly And we’ve from shift

correct. quite You’re

X.X not and I less leverage to and bit as leverage, think passing is two those put the market, a In transactions, find that, seen size spectrum. elements up the ourselves than leverage seen often less of middle-market up, the creeping have basis turn go much a we’ve perhaps together. that. than In to broadly-syndicated on of leverage turns. today One but And enormously We X the terms. we’ve as across of

think look for that’s we compelling level can’t six last what in And and believe analysis given them at with present unusually sponsors financing an seeing we’re did At day, You we the We the what don’t low a in in an months. as And strategy, rate obligors isolation. percentage of I need approval end recently the at our of of see. our the it’s surprising solutions. to marketplace. we

in good can’t solutions off selection. recipe So solutions. can’t that folks our to only meaningfully pick be we get we’re a where who are going the adverse executions the market offering That’s for

need to competitive. we So be

And so is challenging our conditions to to increase selectivity. answer market

Christopher Testa

Got great if your for X% of is I may. one roughly it. me just book. color. Retail That’s And last

curious kind the whether trends companies could for to pare portfolio of you in Just back and if looking segment you’re that talk of about those on your originations.

David Golub

like consequently, the retail trends. these We’ve of consequence web, are too winners I’m to we looking exposure portfolio right about reverse time. brethren applied time. a now appreciate been the in right going bring can back? in that the concepts sort brush is what’s being focused they there many in long of a have can facing restaurants very that to And in headwinds. stores facing on We’ve others The from our long These order. retail are significant challenges competitive going retail are space. many down and many companies I’d for pare a compete and these we seeing new are on are focused a probably retail trends. No. view to answer that you now And to been is to trends on in the taken and percentage of for competition very we’re broad that this not sector. environment, all as their there as old well what that call Are What want

a are granular basis. it we at at looking So very

the still active lender very We’re an in much sector.

We and We vulnerable too have that towards think this eyes, or Internet companies skeptical companies competition in there’s we being very square lots are have the there just for from great to from footage. competition years, sector. a lots of much

Christopher Testa

for my year. and a questions great. on for That’s Thanks me. taking all congrats Okay, nice

David Golub

Thank you.


Our next question from Bock Wells with the Jonathan from your question. comes Please of line Fargo. proceed

Fin O’Shea

suggests good touch morning you for Fin have consistent in suggests more the Hi, hasn’t This our O’Shea that, is guys. Bock Thanks financing? upon in in language for regards issue. the to taking in this release filing that the situation Jonathan sort that language you’ll continue but resolved the utilize securitization Can to SEC press question. the measured You morning. of

going in you some how short they and there order. a how then don’t if Just look, might resolve – things background forward this balance sheet-wise,

David Golub


and unfortunately, rules. currently Investment risk But experts impossible a the BDCs, that for and in retention in XXXX Company fall combination Investment category context the of risk the of the way to of for Act externally-managed set it vast Company of to the not abide by were the being not majority retention Act covering is rules the those are of risk Just combination those suspect the securitizations. the written, combination. I you rules experts retention rules the in of

or meantime, and of you to use not securitizations. are will in I with optimistic forms our lot facilities a continue the permit of seeking relief that we to tell other it be engaged new the it bank doing of no SBIC I use am In But form to been continuing dialogue we’ve SEC resolved. some dialogue There will precluded managed to when facilities, no a are BDCs facilities. It’s have, financing for facilities loan options do financing. we resolved. from that yet continues. or So as That that can’t externally including securitization bond resolved. action be time our other

particular of securitizations. fans We’re

provide are low-cost, people most know, mass-funded very our a think GBDC answer or can kind that get that investment that As for resources the I a we with familiar we’re consequently, securitizations use provide – can who trying of retention be the the BDCs from to think strategy. SEC clarity And in investing rules risk of unintended effects corrected. the highly-flexible, that’s why

Fin O’Shea

of just earlier quarter’s losses Thank Then colors, to Very spillover upon the And it. smaller gains apologize offset this capital able this sure NII? year? were I’m use you so. you’ve you to gains question. well. if touched it. if the Was appreciate much not for out I or realized from a special

Ross Teune

did we’ve notice but slightly Yes, We a spillover again, the RIC strong different spillover had gains, of very gains Fin. is answers is requirement than the tax It’s in Ross. of question. disclosed portfolio, under there tax, excise have your the equity kind if that results of requirement rules. our again, the most spillover so that realized from But equity in the our kind a

Fin O’Shea

thank help That’s and Yes. taking guys questions. you for our


Raymond James. Our comes of Dodd from from question with your question. line next proceed Robert Please the

Robert Dodd

to going and environment Hi, of quarter deploy impact highly obviously, quarter, comment on I of $X.X how year. the but competitive secondly, to the even SLF, I Can And – the just GBDC. to looks only up on the couple on first $XXX,XXX the if and is income mean, think in that’s conservative questions more SLF total you’re given the you dividend A guys. capital of then it what of in can. ability the million Congratulations about us on again, financials. investing. you a all, like give the

unrealized appreciation is on any can strategy give the well. there? SLF as the your what divi So in BDC up us Obviously, that anything is there to color doesn’t accrues and equity, you

NII income how there us expect the on any So we give what using be appreciation? about than those can is BDC question, anything an should rather flow-through versus accretion would NAV But view as or financials how unrealized you it’s color else. SLF income you an and to you

David Golub


XX in useful questions be to order. SLF. And a that presentation page Slide two on it if the the of you address may is turn me let So

part first is your today market the So opportunity perceive that think how and likely Well, growth? the Robert, does to be to our I at do question, if was of you that a – that what in we impact the there’s you opposed words, been $XX deeds a since of can investments size just my look from at total fair March, SLF reduction value. as see about to million how

for I would reasonable looking environment. that assessment this say of reflects it think to at be anybody the that, our

first-lien a grow having So senior finding we’re vehicle enough attractive this quantum difficulty secured investments traditional in right to to enable us now.

We’re being continuing in in that market and are if that to first-lien this the not we’re that’s It’s find But buying. putting that that we’re liquidation. the some. now, And portfolio for middle shrinks, selective traditional we’re okay. cautious senior means, recognizing we debt new secured

of to a very had SLF. with a distributions. steady do long We, question coming Second distribution for had your from part time,

has And say, appropriate is period was context and distributions loss we of have We cumulative to thought the in strategy time. a been the as our the had Our to exceeding geography. in kind our time up. impact of portfolio, you us meaningful position Recognizing of to quite distributions have reduce a the in a cumulative – were this a put distribution SLF is of for only loss over that it where income. that, steady catch

manager, the interesting an has geography had would’ve in be incentive a gotten the but – fee. If we paid had more it paid Golub if an impact. Capital, SLF larger the So the distribution,

to have appropriate larger actually to SLF. the thought dividend paid the geography SLF it the manager loss was the prior of and the matters. larger that realized have We not context period so in at from incentive fee the not to And

Robert Dodd

you because appreciate to do, deduct than I shareholders management the it obviously, accretion, dividend think and fees. point, NAV if your I change rather too, that, your does had

paid of look in that it back, increase SLF if terms a I year only In net I at equity when $X million ago, back was year. and dividends $XXX,XXX, the I of look obviously, mean, but

terms where – obviously, I in a if to up I I catching past. of point, your math, you, distributions earnings in the you of versus can, there So about catching where Where these you near-term? for the the of in – currently just can over you total had but mismatch in – think are assessment do mean, vehicle your are the dividends you vehicle for about terms do I’ll up total time been ask lower and the about stand

David Golub

XX the believe caught quarter, up. the were We at that we about end September of

Robert Dodd

you. it. got Thank Okay,


[Operator Instructions] comes Please the from with KBW. Lynch of from line question next question. proceed Ryan your Our

Ryan Lynch

Good morning. Thank you I today. my for have one questions. only taking

talking creating competitive environment, about bad leverage, was documentation increased capital. looser You’re the debt new for almost spread tightening, obviously deploying increased,

seeing is But is benefits net continuing I about though these we job of as you gains good One that your some go just resulting million equity realized year guys of dividends. a valuations have frothy that some coinvestment can of – continually outlook to of you fiscal the net are in we of on special what some investments, for done you XXXX. guys for wondered some equity if gains and in so having comment had XXXX? gains, $X gains in million XXXX, into $X realize

David Golub

We GBDC period equity that equity that timing. the determine sponsors makes about and stakes are private And with In sponsor. consequently, coinvestments are a the the small the the for transaction don’t at equity go typically just we’re context. the leverage the equity our some and in sponsor. coinvestments that again, context, time in to private sponsors exit typically private own alongside fair financing step GBDC So new provide it’s a buyout. to back equity think a as we minority exit equity private typically transaction alongside that

in to of realization activity continue well. of in this there will To our portfolio lumpiness the be performed a caused can equity the I Ryan, portfolio. and has equity our anticipate point, from So realizations quite your degree has cause some portfolio. lumpiness

I do companies do picking going finance. that are that coinvestments. been to we’re what’s our I equity we with growth stands sponsors execute of good pretty to been think that’s And positioned well they solidly job And of think We happening. the on companies private of a that’s a reason kinds good their well, reflection and prospects. equity

coinvestment equity investment are of I factor the in that know. into a where go more really case potential exit we’re sponsored to don’t clients tell I our their going will to As and more you future, returns reduction in multiple. seeing

as lower they’re or conservatism that at projecting well if XX means company on that. So because to to turns XX performs that there times out at to if going they’re XX it EBITDA. than times kind of terms better They’re or and new it’s at not win we, the projecting to can buying times We are equity as can projected. multiple exit can see the exit times we we’re be EBITDA. grows win XX like And We be those They’re ways going that transactions its holders, EBITDA. looking win. than

Ryan Lynch

helpful That’s Thank only question you. today. my That’s color. Okay.


Capital. proceed question final Anfield Ray the of your comes Our Cheesman line from from Please with question.

Ray Cheesman

market, in thing think if along, out hasn’t – including that like something been right. I guys? taking if that? tax caps wondering then the could may anything active, you question. something laws this you And passes, are it the comes exactly environment which, or seeing who or think one, M&A that XXXX interest do be secondly, knows, good house for bills potentially, you be like right? the spitting how – let’s BDC in if business more left the senate But you the Our do you was government Thank and a of impact for a operations which

David Golub

be the going our to uncertainty great for first. the was your tax if answer second business of a system. thing I’m So from would It question removed part

right are discounting incentive So passed putting consequently, on is necessarily have consequently, going there’s M&A. might passed, not to aside middle-market that get the we agree don’t buyers and different or with and factors. all sellers depressing what’s uncertainty sellers And happen, Because might what now for to wait. living they get an

think So I part tax tepid M&A is explanation of middle-market the now we’re uncertainty. seeing right the environment for

be bad go we would is, part BDCs your good the bill some Now to answer particularly for let back there tax in me generally? see anything particularly question. for The us first both Do of on balance. that is of the or or

speak has to it, would carefully. positive. but would Senate to because Bill that be different, particularly Bill single-spaced more the good I bill XXX bill House just net think for its I I’ve And be more because going a the because in of think us. House the I’m I’m couple a The familiar not House studied is pages elements with

most borrowers and tax is rates. most the and our them pay of income reduction First Most tax. corporate in obvious corporations, are of

lower down thing. tax that’s cash good more means available a to lower mean service payments, debt. tax debt So and pay That’s to rates

some and reduce main taxes outweigh of if depreciate cap that, because would about element this of level. accelerated our have accelerated enhancing. cap some Second who we different negative the at credit on EBITDA of deductibility borrowers more a that – Again, here, related rates, tax tax a House and work limitation. the a do in lower availability, of of meaningfully for And provisions faster who lower variety that’s the businesses be their the would amortization interest have benefit deductibility. subject quickly depreciation. we done, companies interest to The to bill depreciation, that disadvantage on can assets is the we’ve is think In rates that corporate XX%

process. I be reconciliation to net-net, passed. said the to where want likely going is it going to go a and is though, going anybody this different Senate look knows bill, It’s then think needs through to up. think debated get that So which we to very we’re House you something end from bill is would positive. a There a reiterate don’t I

done now. long way right We’re a from

Ray Cheesman

of in do spreads guys worse. I’m down plain in I number the to courses follow-up, one wondering, room, they if getting regionals, what back. of getting people to indicating had paperwork banks, is we seem I money, at farther middle-market the this free to over waiting behavior cheap of deal listen a to When business years is have But thought you the be see be some sometimes, in they and maybe – since they are trying presentations you the mega than that the guys And understand the just And them, are just recovery. low-beta the left incredibly attractive, funding and I are eight all, that got Great. that seeing? basically change reaching may. and of these mean, be of they’ve of of you coming the more last and

David Golub

We’re changes seeing some the changes it in describe at the margin, margin. as but I’d

what activity some lending because important make the the said, And back seeing at to some want of those leveraged syndications. it’s details who larger for their the banks understands – pulled banks here. look you of of if just pitching in we’re context So in I on sure active I are guidance, become to more everybody mandates do

over guidance that regulators to the guidance. lending bank leverage syndicated is years it’s the business bit to a in who that is and and non-banks dominated fees. right? that’s sure by And what has lending the the have crystal category as looking been a a Suisse, want to mean, because and on entities upper [indiscernible] more a not been banks I’m regulatory really wished clear, not don’t used seeing Credit come we’re and becoming Deutsche earn perceived others. regulated happened that XXXXs, last we’re of since the activity where broadly pushing folks guidance. add Goldman, and isn’t we in boundaries to lower what the by looked it’s okay the traditional is where – underwrite shift by expressed we’re what change involvement to either number Where of we’re loans the fact, syndicate after today in haven’t by you finance. middle-market the We’re of broadly-syndicated middle-market-sponsored talk transactions have early regulators but in – not for the said think enough non-banks. seeing that’s big changes the upset. attitude they upper and the involved JPMorgan, business changing, and to the banks. is the That meaningfully it’s and market, with the has we dominated is on yet not part whether Jefferies spheres dominated do I a whether or and the at see or is some the going – And And It’s loans more Bank, it’s little about might change. go seeing by It’s if at hold aggressive, be gone in want of And middle-market, if going leverage I time

Ray Cheesman

in. times we Weird live Yes.

taking question. invested had something attitude that run actually your watching in I’ve I’m same carefulness clicked mentioned watching watching over last I’ve Street. your other XXXX? You that your And have that been I’ve business. in in because business more you my of Fifth think in take Ares over of the great people’s the environment all, I been company will you money Do been Oaktree a Capital. answer about one the congratulations as – American you first quarter. M&A exciting get

David Golub


Ray Cheesman


David Golub

don’t to honestly, turn we’re the good if really mean, day, assets end couple buy something, I if assets, we those buying the years. acquisitions. I of the At these a in we’ll over and a set understand assets, have they’re opportunity of of

So focusing our problems. not served that, the organic other us on to well origination capital. people’s good, redeploy pretty in assets after by taking to it’s own originate and growth been new over up to careful We’ve

Ray Cheesman

Thank terrific a That’s answer. you very much.

David Golub

and to the Thanksgiving. XX joining a everyone the And talking just Well, December to want again Please today. happy we’ll once forward after us again, I look quarter. enjoy season, for everyone thank holiday wish I want to


that you your and you participation, ask disconnect ladies that your the And conference gentlemen, call lines. for does conclude for and thank today. We please