Q4 2019 Earnings Call

Yes to the net per share increased or decreased and stockholders Equity resulting from operations the most directly comparable gaap. Financial measures can be found in the accompanying slide presentation for this call in addition reconciliation of these measures may also be found in our earnings release to file this morning with the SEC on form 8-k certain information discussed in this presentation including information off to portfolio companies was derived from third parties and has not been independently verified and accordingly. The company makes no representation or warranty in respect to this information off the company's fourth-quarter ended December 31st, 2019 earnings presentation can be found on the company's website at ww.w by clicking on the Queue 1019 earnings presentation link on the homepage of the investor resources section of the website carries Capital corporations earnings release and 10K are also available on the company's website, ma'am.

I'd like to turn the call over to mister Kip to hear Ares Capital corporations chief executive officer.

Thanks.

Hello to everyone and thank you for joining us. I'm here with our co-president Michael Smith or Chief Financial Officer Pennyroyal and several other members of our management team. I'll start off highlighting our fourth-quarter and full-year results and then provide some thoughts on the company's position and current market conditions.

This morning, we reported fourth-quarter quarter earnings of $0.45 per share, which is a strong finish to a great year for ares Capital Corporation our core earnings for the year of a dollar ninety-nine cents per share benefited from an active year of investing modest portfolio growth and higher utilization of our low-cost borrowing facilities.

We generated strong gaap earnings of $0.48 per share for the fourth quarter and a dollar eighty cents per share for the year, which drove another year of net asset value growth to $17.32 per share a year end supporting these results our portfolio continues to demonstrate stable credit performance.

Looking Beyond these strong results. We believe the company is well-positioned the addressable Market opportunity for ares capital is large and growing but small and upper middle Market companies are increasingly accessing the private markets for Financial Solutions. We see concrete evidence of this as the pipeline of transactions that we review annually is increased by approximately 40% since 2015. We think a major factor here is our increased market share and larger deals where we feel we offer companies more attractive solution than the alternative smaller syndicated deals that typically come with a lot of execution for their sponsors.

Is our Market opportunity expands, we benefit from our large direct origination platform extensive Market reach and long-standing relationships with companies financial sponsorship deal participants by reviewing a large pipeline. We can remain selective and choose to invest with in what we believe or the strongest borrowers, which is critical in these highly competitive market conditions over the past ten plus years. We've closed on only about 4% of the Investments we've evaluated with new borrowers and dealer are cautious view of the market for much of 2019. We became increasingly selective resulting the second-lowest closing rate of deals to new borrowers in a decade.

well

The most important sources of deal flow is are expanding core of incumbent portfolio companies, which we believe allows us to finance the growth requirements of our best borrowers are incumbent portfolio companies accounted for half of our investments in 2019 and 52% of our investing activity in the fourth quarter. We believe these opportunities provided Tractive and differentiated Investments and often reflect lower-risk rep positions is we typically have spent years observing a companies management team and operations.

All these long-term secular Trends continue to to drive and expanding opportunity for ares Capital we've had to counteract would have been doubtedly been strong flows of new capital to the sector wage that have put more pressure on our investing business in our view newer entrants often acquiesce on terms and reduced pricing to win deals and to deploy their Capital given are stringent underwriting criteria and the breadth of our deal flow. We're finding ourselves passing more and more and for a host of different reasons including pricing and structure.

the good news is

We see a stable and slow growing economy after a difficult end of 2018. The credit markets spent most of 2019 with positive momentum and this has continued into 2028. The healthy financing environment is likely to remain although we are seeing things slow a bit in terms of activity us companies and investors are highly focused on the fact that we have an upcoming election and the uncertainty that exists with the seemingly wide variety of potential outcomes at this point. There's also a belief that accommodative monetary policy and low interest rates for long are needed to support growth in Corporate America with this in mind with this in mind. We're not surprised to see a wait-and-see approach from a lot of deal sponsors and companies particularly with regard to m&a activity.

Finally in these types in these kinds of markets were focused on building deep sources of committed Capital so that we are positioned to be opportunistic should Market volatility increase since the beginning of 2019 through to today, we've strengthened our financial position by closing on an additional four point 1 billion dollars of new financing capacity from both Bank and Capital markets providers and we've extended maturity is on over 3.5 billion dollars of committed Bank financing given this project progress. We currently have approximately 3 billion of undrawn credit commitments and believe that our balance sheet continues to be a source of strength for our company. I'll now turn things over to Penny to provide some more detail on the fourth quarter and full-year results.

Thank you, kiss and good.

Turn in our core earnings per share were $0.45 for the fourth quarter of 2019 compared to $0.48 for the third quarter of 2019 and consistent with $0.55 for the fourth quarter of 2018, excluding the 2 and 1/2 cents per share impact from the expired fee waiver. Our fourth quarter 2019 quarter earnings were large consistent with the prior 2 quarters of 2019. Our gaap earnings per share for the fourth quarter of 2019 were $0.48 which compares to $0.41 for the third quarter of 2019 and 36 Cents for the fourth quarter of 2018.

Skip mentioned we close 2019 with strong financial results with core earnings per share of a dollar $89 compared to a dollar sixty-eight or 2018 and gas an income per share of a dollar $86 compared to $2.01 for 2018.

As of December 31st, 2019 our Investment Portfolio totaled fourteen point four billion dollars of fair value, and we had total assets of 14.9 billion as of December 31st, 2019. The weighted average yield on our debt and other income-producing Securities and amortized cost was 9.6% And the weighted average yield on total Investments at amortized cost was 8.6% as compared to 9.8% and 8.8% respectively at September thirty two thousand and compared to 10.2% and 9% respectively at December 31st, 2018.

The year and yields on our portfolio, we're down from the third quarter largely due to declines and live our our earnings benefited in 2018 from a rising Libor, but we saw that upward Trend began to reverse an early 2019 with 1 month Libor declining about 74 basis points during the course of 2019.

this reversed

so created a modest head win for us throughout the year and could continue to reduce all

further until reaching our live or floors

At your end existing or sorry excluding our investment in the sdlp certificates 78% of our total portfolio was in floating-rate investments in seventy-nine per-cent of these floating-rate Investments had an average Libor floor of approximately 1.1%

We continue to be focused on obtaining live or floors on new Investments and amending documents on existing Investments to add Libor floors, whenever possible importantly for our new commitments this quarter with a floor. We were able to negotiate a higher average Libor floor of approximately 1.3%

Moving to the right hand side of the balance sheet are stockholders Equity at December 31st, 2019 with 7.5 billion dollars resulting in a net asset value per share of $7,000.32 vs $17.26 a quarter ago and $17.12 at year-end 2018. As of December 31st. Our debt-to-equity ratio was nine times and our debt-to-equity ratio net of available cash of 153 million was 9 3 times. This compares to 9.1 times and point eight nine times respectively at September 30th, 2019.

We ended 2019 with our leverage at the low end of our current target range of 9 to 1.25 times. I would add that. We are bit behind the higher-level targets that we were hoping to reach by now, but we have legs slowly to be cautious on the investing front.

Skip mentioned we focused throughout 2019 on extending an increasing our access to efficient and committed sources of debt Capital during the fourth quarter of 2019, We pre paid six hundred million dollars of 3 7/8 percent unsecured notes at par that were originally scheduled to mature in January 2020 taking advantage of the early part Redemption feature of the notes and we upsized our SMBC revolving funding Facility by $150 as of December 31st, 2019. We had approximately two billion dollars of available capital.

Post your end we've continued to be active on the capital-raising front increasing our available Capital to just over $3 in January. We issued 750 million dollars of them secured notes maturing in July 2025 with a coupon of 3.25% This execution was the lowest cost unsecured note issuance and Thursday history and is below the current all-in cost of our bank lines under today's market rates.

We now have no.

The term debt maturing over the next two calendar years and our next maturity is not until January 2022.

As for a floating-rate secured credit facilities, we upsized r s n b c and Wells Fargo funding facilities in January by a combined $325 million dollars and extended maturity for the wells Facility by one year. The earliest maturity of our bank credit facilities is now March 2024.

Before I conclude I want to discuss our undistributed taxable income and our dividend for 2019. We once again now turned the dividends we paid result in an increase in our undistributed taxable income. We currently estimate that are spillover Income reached $400 or 95 cents per share at the end of 2019 an increase of $65 million dollars or fifteen cents per share from 2018 s level.

We Believe having

Strong and meaningful undistributed spillover supports our goal of maintaining a steady dividend through varying market conditions.

To that end this morning. We announced that we declared a regular first quarter dividend of $0.40 per share, which is consistent with the regular quarterly dividend paid throughout 2019. This first quarter dividend is payable on March 31st, 2022 stockholders of record on March 16th, 2020. This represents our 42nd consecutive quarter of reporting a stable or higher regular dividend for our shareholders.

No, it's not. I'd like to turn the call over to Michael to walk through our investment activities for the quarter and year. Thanks Benny and good afternoon. I would like to spend a few minutes providing more detail on our investments portfolio performance for both the fiscal year end and fourth quarter of 2019. I will then provide an update on post quarter and activity and our backlog and pipeline off during 2019. Our team originated 7.3 billion of new investment commitments across 163 transactions, including 1.6 billion of commitments 243 borrowers in the fourth quarter our investments throughout the year came from a diverse set of high quality companies across more than twenty distinct Industries the ETA of the companies. We feel this year range from $12 to $670, which should give our investors more insight to the breadth of our sourcing capabilities.

skip mentioned earlier

In 2019 half of our commitments were to existing borrowers and the other half came from a significant and growing pipeline of new investment opportunities.

For the full year 2019, we evaluated more than 1,600 new lending opportunities, which were Diversified across Industries and geographies and had an average wage of $47. If one assumes the average company requires roughly five to six times even in debt financing this translates into approximately $3,075 to $450 billion of potential transaction volume that we reviewed for the year.

As far as the portfolio composition at year end 2000 nineteen eighty percent of our portfolio inclusive of the sdlt investment was in senior secured loans, which is similar to the portfolio composition at year end 2018 and 2017. The weighted average of our portfolio companies of $139 million gives greater prominence to our large hold position while our portfolio average ETA of $75 million dollars reflects our continued focus on the upper middle Market.

We continue to broaden and diversify our portfolio this quarter reaching 354 different borrowers with an average hold position at fair value of only 0.53% excluding our investments in sdlp and Ivy Hill our largest single borrower was just 2.6% of the portfolio at fair value underscoring that no single name is likely to have a material impact on the aggregate performance of our company.

We Believe are large and diversified portfolio which is focused on High free cash flow non-cyclical Industries is resilient and positioned to perform well through a wide variety of economic conditions

You may have noticed that at your end, we revised the industry classification of our Investment Portfolio to conform to the gics classifications. We believe in a presentation provides stakeholders more clarity with regard to our portfolio and is more consistent with broader Market standards. You can review which gics driven a mystery each of our portfolio companies resides and our schedule of Investments.

The credit quality of our portfolio continues to be stable our portfolio generated weighted average growth of 3% over the past twelve months, which was consistent with past quarter our 2019 year-end non-accrual ratio of 1.9% at amortized cost is lower than the 2.5% off corded at year end 2018 two companies were added to the non-accrual list in 2019 and six companies came off leaving the total number of companies on non-accrual slightly below that at last year end before I turn the call back over to Kip for some closing remarks. Let me provide a brief update on our post quarter investment activity from January 1st through February 6th 2020.

We made new investment commitments totaling $453 million of which $361 million were funded over the same. We exited or will I get paid on 282 million of investment commitments generating approximately 21 million of net realized gains on the exit as of February 6th. Our backlog blind student roughly $735 million and 390 million respectively note that our backlog contains Investments that are still subject to approvals and documentation and may close or we may sell a portion of these Investments post closings with that. I'll turn it back over to Kim. Thanks a lot Michael and closing are strong fourth-quarter capped off another successful year or solid earnings and continued nav growth. We continue to execute on the same plan that we've had for the past fifteen years maintaining a defensively position portfolio investing in origination capable.

You see the broadest amount of deal.

Being highly selective and focussing our investments on the highest quality borrowers and maintaining a strong balance sheet with deep sources of liquidity.

We enter 2020 with continued caution on the investing side. We are confident that we're still able to find compelling investment opportunities for the company. We also remain optimistic about our competitive position and platform advantages, which we believe will allow our cc to continue to benefit from the growth of the Middle Market and the secular shift we're seeing is more companies seek private capital.

Reflecting on the urine to close out our prepared remarks. I would like to thank the Investment Portfolio management teams for their tremendous effort and originating and monitoring the portfolio the Finance and Accounting teams for their continued wage in extending our credit facilities and long-term debt the legal and compliance teams for always looking out for us and advancing our efforts in and finally thanks to our investor relations team. We always do a superb job of representing the company. It was a fantastic 2019 for a r c c that concludes our prepared remarks. We'd be happy to open the line for questions.

This time. If you would like to ask a question, please press * then 1 on your touchtone phone. If you would like to withdraw from the question. Can you please press * then two, please note as a courtesy to those who may wish to ask a question. Please limit yourself to one question and a single file on if you have additional questions, you may re-enter the queue. The investor relations team will be available to address any further questions at the conclusion of today's call.

The first question comes from Rick Schoen with JPMorgan, please go ahead.

Hey guys. Thanks for taking my question. I want to make sure that we understand the movements and the nautical sometimes name change pierced off. The new nautical disorder is the problem and just want to make sure that we're looking at this correctly in terms of that was not on non-accrual before it is in in life. And what develop that.

That's true. So there are two new not accruals. One is the other one was a small Legacy loan called by access from the old Venture portfolio.

Got it. And do you mind providing a little bit be prop is a relatively large investment on a cost basis. The marks have been pretty benign at this point. So the impacts relatively well, but want to make sure we understand the risks there and also the impact from an interest income perspective.

Yeah, I mean Penny can take a quick look. I think she probably has the the interest income number but look this is one of the oil and gas Investments that we've been in for quite a long period of time. We've upsized it over the years that the company should be held um, the process and distributes, um fracking sand for the for the drilling, you know industry the fracking drilling industry. If you go look at some public comments in the space, you'll see that there's quite a lot of stress in that industry. There's been a fair amount of over-capacity this company. I think the good news is has high-quality assets that are largely um in drilling regions that you all their assets are in Texas. So companies done a nice job over the years growing its business because it's at Logistics advantages that being said 2015 was a difficult year for that industry as the commodity price because of the oversupply of sand assets and sand mines in the industry had been over built wage.

you just saw a commodity price collapse, so

I think we're being cautious on the mark But there is real work to do there. I mean, we're engaged day-to-day with the management team there working on it restructuring.

Yeah, and then thank you very much money. But you may have them please go ahead. Sorry. If you look at the wage loss for twenty twenty. We did put it on non-accrual in the fourth quarter. So we had a little bit of rings last four nineteen. But if you look at a full Year's loss two twenty20. It's about $0.03 a month. Not a fee. Yeah. Let me look. The good news is we've got and I try to emphasize this too quarter-to-quarter. We've got a highly Diversified company and unlike some of the other bdcs that people may be invested in Orange follow his analysts. It's really difficult to have an impact in any way shape or form on our companies operating profile with a single or even a couple of defaults even in in large names right at the diversity allows us to generate very consistent income and keep you know, the dividend, you know, where it is, obviously, even if we have some bumps along the road.

Got it. Thank you guys very much. Thanks Rick. The next question is from Aaron cyganiewicz of City, please go ahead.

Thanks, not the park on credit quality too much. But in the release you had mentioned that 9% of the exits were in on a cruise, but I didn't see anything that large last quarter that was on that package. Was there something in order that got placed on a cruel and then exited?

I had not noticed that so the there were three names realized one. I know for sure that was on non-accrual which was ending of things. I'm looking at you go. What is it? Oh, I'm sorry dancing yet the recognition of an old oil and gas name that we have put on non-accrual years back called petroflow.

Okay, nothing that we can check the numbers with you if you want offline Aaron, but that's that's the possible. I just missed them off. Okay, and then in terms of you raised a small amount of equity in the ATM just curious as to to you know, why you would utilize that when you're not quite at your you know, let's change that you wanted to be registered in the low end. I think we think of the ATM program as convenient and a creative way to raise, you know, small amounts of a thousand and two

you know not have

Think about you know, a marketed or bought offering in a larger way. So we just think it's good long-term planning as we continue to want to grow the company. Obviously the company requires Equity over the Long Haul for its growth. Um, so just we take a long-range view on that. Okay. Thank you.

When the next question is from Ryan Lynch have KBW, please go ahead.

Very good afternoon, and thanks for taking my questions. I did want to follow up on the equity ATM offering so because you guys issued home equity this quarter, but you guys still actually had had deployments that that actually grew your overall leverage or we expect should we expect at the 8 p.m. Should should just compliment portfolio growth and we should actually expect leverage to continue to grow or you going to manage your your your target leverage right around this level the wage as well as now ATM Equity offerings.

Yeah, we're not.

Look the direction that we'd like to take. The Leverage is up. You've seen that over the last couple of quarters. Again. The ATM issuance has been minimal, but we found it to be a useful tool. So I think the simple answer is yes, we're going to probably continue to raise a little bit of equity in with that grow the portfolio and take leverage up as well.

Okay, and then my follow-up I wanted to talk about the dividend office. You guys had a really strong year in 2019. You paid out some special dividends and actually even off while paying up a special dividend still grew your spillover and come pretty meaningfully. I think it shows that the strong results you had you guys did not declare a special dividend for 2012. Can you just talk about you know why that decision was made to to not declare one at all and you know so far in 2020, which is a little bit unlike the policy you guys said in 2019 of declaring, you know, quarterly special dividends to kind of start the year.

Sure.

To the additional dividend for last year that we announced we really announced if you remember because we had really significant sort of unusual net gains in 2018. So obviously share holders benefited from that with the payouts throughout 2019, you know, there are a couple of things that are different as we look forward into 2023 number one, you know live Wars down 90 basis points or so in the last 12 months and there's a Ford curve that forecast it being lower. So I'm being cautious today. The other thing I'd say is look we we've we've been running the company now a long time. This is a space. Obviously we're investors have conditioned us to be cautious Iraq and because there are pretty negative ramifications from dividend Cuts as we've seen in other companies. So I think we're just being conservative for the time being wanting to look at the live War environment.

and the

Performance. I appreciate you providing that comment, right, you know may allow us to do that in the future. But we just thought this quarter we'd let the the specials from last year roll off and evaluate it as as we get further into the year.

Okay. Thank you for taking my questions. I appreciate the time. Thanks.

The next question is from Kyle Joseph Jeffries, please go ahead. Hey, good afternoon. And thanks very much for taking my questions. Just first in the quarter. Can you give us a sense for the pace or the the timing of deployments and repayments just to give us a better sense for yield Dynamics in the quarter?

You know, we typically don't provide that kind of color. We don't provide Guidance with this company. So I don't want to I don't want to really answer that question directly if that's okay, Let me look as I said activities slowed down he gave you some numbers in terms of Pipeline and backlog and all of that. So if you look, you know, if you look over the last four quarters, I would tell you that are pacing is reason a consistent quarter-to-quarter. So take a take the last four quarters of last year divided by 4, and then subtract the pipeline and backlog and probability adjusted and you can probably get to a number that tells you you know what it look like over the last six weeks, but I don't want to provide any guidance regarding Q one. Oh, no. Sorry Kip. I was talking about Q4 and in terms of any of the deployment sort of back or

I'd have to go back and look I actually don't I'm not sure we have that in front of us. I just say nothing remarkable, you know, but I don't think it's going to nothing that's going to change your modeling exercise for your for your thought on the quarter.

Got it, and then my follow-up just just stepping back you guys commented on where rates have gone. And then also given we've seen many peers raise leverage in the office in the BDC space. Can you just refresh this on sort of any competitive changes you're seeing either from Banks or other bdcs?

No, it's it's the same still competitive. A lot of capital has been brought into the space. I made the comment about slower activity to start the year off kind of wait-and-see approach on a lot of fronts for people and again, you know, we're watching live or because obviously we're going to spread based business. You know, we've got largely live work plus assets off the left side of the balance sheet and about half the right side, you know in terms of liabilities anywhere floating right, but I can't tell you what I I don't really have a view away from looking at the forward curve around live work. If I had to guess I see stability. We don't see uh any need for decreases, but I I also don't really see it floating up so

I hope that answers the question it does. Thanks very much for answering my questions.

The next question is from Kenneth Lee of RBC Capital markets, please go ahead. Hi. Thanks for taking my question just in terms of the funding costs you recently extended maturities and you've also recently embarked an effort to diversify funding sources. Just wondering given the current environment whether you anticipate any any further changes to to your funding next Thursday. Thanks if any comment but I don't think we do. Yeah, we try to keep it balanced between secured and unsecured between flooding and fixed and you know, keep the average duration of liabilities in line with where wage the average, you know maturity or you know, average sort of tenure of the of the assets.

I mean, I think you know, it's really same as usual. We try to watch the markets and continue to issue into the markets when we see a strong Market to issue and to just like we did back in January. But as far as the composition of the balance sheet, I see a lot of the same as we move forward.

Gotcha.

And just one follow-up if I may just in terms of the in the investment backlog the pipeline and realize this is just a snapshot off, but just looking at the the industry breakdowns. They're wondering how that lines up to to what you think which sectors are are the most favorable or at least be able to invest in in the current environment. Also realizing that that you tend to prefer non cyclical Industries. Thanks.

Sure. Yeah, I mean we we, you know kept the industry mix I'll be changing the way that we reported it as somebody mentioned this quarter very similar, you know, the places that were being coughing. I think we're the places where we've seen issues oil and gas retail probably some aspects of the healthcare services business, but generally the backlog and pipeline is in line with what you've seen from us in the past.

Thank you very much.

The next question is from Casey Alexander of compass point please go ahead. Hi. Good morning. Good afternoon. I just have one question and no follow-up noticed in your origination a couple of sub debt loans made in the solar power industry, which has been an area that has been kind of tricky for bdcs to length too. So I was kind of wondering, you know, what was unique or interesting about those opportunities that led you to go ahead and land into those.

Yeah, thank you. We didn't destroy the structure that markets a little bit different you tend to see more, you know, mezzanine paper Equity like paper behind you no longer term senior financing. I think we did a hundred, you know, $135 million dollar deal to develop residential solar one of the largest in the US Bank. The other one is a vertically integrated developer of utility-scale solar projects. So look, we've got a team that's been here a long time making investments in the space for us. We took you know, the two that they found this past quarter were particularly interesting, you know, we've actually had great experience and I've had no defaults in our power investing vertical so to speak these days, so we're nothing nothing unusual. Maybe just two deals that happen to come in the same quarter.

All right. Thanks for taking my question. I appreciate it.

The next question is from finish a with Wells Fargo, please go ahead. Hi. Good afternoon. Thanks for taking my question. Just a small one on the box. I think with some of your opening remarks on execution risk in the syndicated market and you know some peers talking about this as well unit Ranch opportunity would would we look at the sdlp as perhaps a candidate for a leg up in investment in size this year?

Maybe I mean, I think it'll grow I think your point on some of these larger deals getting done by you know, non-banks is a phenomenon that's like Thursday to continue to increase that being said, you know spend with the size of our balance sheet over all these you know, we we can do those deals either on our own or in the STL so and they get old, perhaps be a beneficiary, but I think the company is a whole be a beneficiary whether it's an sdlp or not.

Sure. Thank you for the color. And then just one Ivy Hill, you know, this marked obviously moves around a little bit off. Correct me if I'm wrong. The dividend was up this quarter that's also been sort of a normal thing for the fourth quarter. But any change in in the course of business office in Ivy Hill anything to look into on the valuation Improvement. Yeah. It was just it was actually just a fair value increase. I don't think the dividend increase this quarter but like look, I mean they were a little bit under invested so they got more cash to work in their vehicles and obviously with less cash Dragon a clo you're generating better Returns. The other thing I'd say off the market conditions have been more favorable. I you spread to tighten and that's a beneficiary for them or that's a benefit for them. Rather.

Okay, that's all for me. Thank you.

Have a question, please. Press * then 1 the next question is from Robert with Raymond James, please go ahead hi guys on on the Libor floor issue and I appreciate the color that you gave on that already. I mean you said 79% of the the floating book has them the new commitments at slightly higher floors, but faith in in the upper upper end to the markets for seem to be getting very well, which seems a little odd with with viable falling but on so on the new commitments is it you know, as long as relatively easy to get I should we expect the the round numbers 80% you're floating book that has flaws to stay stable or they getting harder to achieve off in the book. But but where you can get them, you know at slightly higher floors any color on that.

Yeah, I mean, I think the general answer is yes, you know with the prospect of you know, live board likely to increase call it whatever that was twelve months ago. The expectation was the short-range going up when that changes obviously it forces us in the rest of the market to be more cautious and insist upon live or floors. So I think over the last two quarters, it's gotten easier, um to do that and we think it'll continue in that direction particularly with you know, with a Ford curve showing a 40 basis-point decline on the library side. I think we're going to be practiced on it.

again, if you

Okay. Thank you. Welcome.

This concludes our question-and-answer session. I'd like to turn the conference back over to mr. For any closing remarks.

I just thank everybody for joining the call and your interest in the company and we'll catch up with you all next quarter.

Ladies and gentlemen, this concludes our conference call for today. If you missed any part of today's call and archives replay of this conference call will be available approximately one hour after the end of the call through February. I called in this conference 2020 at 5 p.m. To domestic cars by dialing 177-344-7529 and to International Colors by Dolly one +641-231-700-8843. Please please reference conference number 1 0 1 3 7-6 2-6 and archived replay will also be available on our webcast link located on the homepage of the investor resources section of Ares Capital website. The conference has now concluded please

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Thank you for attending today's presentation.