Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How has Trinity Capital maintained low non-accruals, and are there any early warning signs of credit deterioration as we head into 2025? A: Ron Kundich, Chief Credit Officer, explained that Trinity Capital's low non-accruals are due to their rigorous underwriting process and expertise within each of their five business verticals. Each vertical has specialized underwriters and portfolio managers, which helps maintain credit quality. There are no immediate warning signs of credit deterioration as they head into 2025.
Q: How is Trinity Capital approaching leverage in the current environment? A: Kyle Brown, CEO, stated that Trinity Capital aims to decrease leverage over time. They plan to raise money off-balance sheet and create new liquidity, allowing them to maintain a healthy leverage level around one-to-one. The goal is to decrease leverage while increasing earnings per share as the RIA generates new earnings.
Q: What is Trinity Capital's strategy for raising capital through the ATM program, and how does it align with maintaining leverage? A: Kyle Brown, CEO, mentioned that the ATM program is used as just-in-time financing, which is less expensive and efficient. They plan to raise equity or debt in a way that is accretive to investors. Michael Testa, CFO, added that they are diversifying capital sources and have launched a debt ATM for additional flexibility.
Q: Can you quantify the retirement expense for the bond conversion next quarter? A: Michael Testa, CFO, estimated a $0.27 per share impact on NAV due to the bond conversion. The cost to extinguish the debt is approximately $66 million.
Q: How does Trinity Capital manage fintech exposure, particularly regarding bank partnerships? A: Gerald Harder, COO, explained that they consider bank partnerships during underwriting, ensuring multiple banks are involved to mitigate risks. Kyle Brown, CEO, added that their ABL group focuses on fintech, often replacing banks by providing advances against receivables, which they find favorable.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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