Release Date: March 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What are the key drivers to get net investment income (NII) back above the $0.33 dividend rate? A: Daniel Trolio, CFO, explained that the key drivers include harvesting prepayments and growing the balance sheet. The fourth quarter was light on prepayments, which impacted NII. They aim to continue growing the balance sheet through 2025 to cover the distribution on a quarterly basis.
Q: What primarily drove the portfolio marks this quarter, and how much was from the debt portfolio versus the equity? A: Daniel Devorsetz, COO, stated that the marks were due to the fair value process, with markdowns primarily on debt investments. Some companies are in challenging fundraising or acquisition processes, leading to markdowns.
Q: Can you provide an update on Evelo Biosciences and Swift Health Systems? A: Gerald Michaud, President, noted that Evelo is now a recovery asset, with potential future recoveries based on asset sales. Daniel Devorsetz mentioned that Swift Health Systems is still in an active fundraising process and has not been resolved.
Q: How are portfolio companies in life sciences affected by potential federal spending cuts or regulatory changes? A: Gerald Michaud explained that while there is uncertainty, there are positive signs such as reduced drug development costs and potential regulatory streamlining. The market is cautiously optimistic, with significant M&A activity expected due to expiring patents.
Q: How did the Fed's rate cuts in the fourth quarter affect yields? A: Daniel Trolio noted that the rate cuts had an impact, with the third quarter cut having a larger effect. The overall impact was about $0.02 per quarter, with the fourth quarter cut having a smaller impact due to its timing.
Q: How have core debt portfolio yields held up, and what is the expectation for spreads going forward? A: Daniel Devorsetz stated that yields are within the normalized range, despite some spread compression due to competition. The portfolio yield is expected to remain within the range achieved over past quarters.
Q: How have end-of-term fees held up historically? A: Daniel Devorsetz mentioned that end-of-term fees have not changed significantly over the last several years.
Q: How much did share repurchases add to fourth quarter NAV per share? A: Daniel Trolio stated that share repurchases added about $0.02 to the NAV per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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