Q4 2019 Earnings Call
Ladies and gentlemen, good afternoon.
Welcome everyone to Black Rock TCP Capital Corp, fourth quarter and for year 2009, <unk> earnings Conference call.
Today's call is being recorded for replay purposes.
The presentation, all participants will be in listen only mode.
A question and answer session for following the company's formal remarks.
The question questions. Please press star followed by did you want.
I will repeat these restructurings before we begin to Q1 nice session.
And now I'd like to turn the call over to Kevin Mcmullen direct Lifelock TCP Capital Corp, Global Investor Relations team Ceighty. Please proceed.
Thank you before he began I'll note that this conference call may contain forward looking statements based on the estimates and assumptions of management at the time as such statements and are not guarantees of future performance.
Forward looking statements involve risks and uncertainties and actual results could differ materially from those projected any forward looking statements made on this call I mean as of today and are subject to change without and what it.
Morning, we issued our easily for the fourth quarter in full year ended December 31st 2019th we also posted a supplemental earnings presentation to our web site at TCP capital Dotcom.
If you decide presentation, which we will refer to on today's call. Please click on the Investor Relations link and select events and presentations.
These documents should be reviewed in conjunction with the company's form 10-K, which was filed with the FCC. This morning, I'll now turn the call over to our chairman and CEO Howard Levkowitz Thanksgiving.
I'm here with our TCPC team and we thank everyone for participating on our call today I will start with an overview of our performance in 2019, and then our CFO Paul Davis will review our financial results. After Paul's comments I will provide some closing remarks before opening the colder your questions beginning with our Q.
Complishments in 2019, which are summarized on slide four of our presentation first we leveraged to both our longstanding relationships with borrowers and deal sources and the power of the Blackrock platform to identify attractive investment opportunities.
For all 2019, we invested $700 million in 45 investments almost 45% of which came from existing portfolio companies.
He also continue to emphasize portfolio diversification, our average portfolio company investments, which just $15.7 million are less than 1% of total investments as of December 31st 2019.
Second.
We generated $94.9 million net and trust income a slight increase from 2018.
Despite the pressure on yields in 2019 from a decline in LIBOR.
We also continued our track record of covering our quarterly dividend every quarter for nearly eight years third we continue to see debt financing on attractive and shareholder friendly terms toward this effort. We successfully issued a total of $200 million of notes due 2024 at a rate of 3.9.
Percent this is significantly lower than the five in a quarter percent convertible notes that matured in December and we also reduced the rate on our S. VCP credit facility by 25 basis points.
Finally in connection with our shareholders' approval of an increase in our regulatory leverage limitation early in 2019, we reduced the management fee to 1% on assets financed with leverage greater than one to one.
We reduced the incentive fee rate to 17.5% and we reduced the hurdle rate to 7%, while maintaining our cumulative total return or were hurdle, which is one of the only such structures in the industry.
Before moving onto our fourth quarter highlights.
I would like to address the year over year decline in our net asset value.
The write off of our investment and fidelity accounted for almost all of this decline.
On our last two quarterly earnings calls we described several companies specific challenges that fidelity space in the increasingly competitive cyber security industry.
At the time of our initial underwriting more than four years ago Fidelis was operating at a high growth industry with a strong client base.
The company was well capitalized with a low loan to value.
However, the owners and management team failed to sufficiently react to the shift in industry dynamics the accelerated in the last several years.
Utilizing our extensive turnaround experience our team worked alongside the sponsor of the management team to try to resolve these issues that ultimately decided to exit rather than to invest further in the company. We're not satisfied with this result, but believe the challenges faced by the Dallas were distinct and are not indicative of any broader macro economic.
Issues or other trends.
Moving to a few highlights from the border.
As shown on slide six we earned net investment income of 38 cents per share out, earning our dividend by two cents and today, we declared a first quarter dividend of 36 cents per share payable on March 31 to shareholders of record as of March 17.
Additionally, we delivered another strong quarter of deployments totaling $142 million dispositions in the quarter were $152 million.
Turning to slide seven of the presentation at yearend or portfolio had a fair market value of $1.6 billion, 92% of which was in senior secured debt.
Instructing our portfolio, we have consistently focused on seniority as well as diversification.
As of December 31st our largest position represented only 4% of the portfolio and taken together, our five largest positions represented less than 17% of the portfolio.
Furthermore, as the chart on the left side of slide seven illustrates our recurring income is distributed across a diverse set of portfolio companies. We are not reliant on income from any one portfolio company in fact on an individual company basis, well over half of our portfolio companies each contribute less than 1% to our recurring income.
Our portfolio continues to be predominantly floating rate with an emphasis on first lien exposure.
At year end, 92% of our debt investments are floating rate and 81% consistent first lien exposure as demonstrated on slide eight.
I would now like to take a minute to provide more detail our investment approach.
Which has remained consistent throughout our teams two decades of investing in middle market companies.
We continue to leverage our deep industry knowledge and experience. In addition to the expanded access to deal flow and additional resources of the broader Blackrock platform to identify attractive investment opportunities.
To this point deployment activity in the fourth quarter included 10, new loans four of which were with existing borrowers.
Follow on investments in existing portfolio companies continue to be an important source of investment opportunities.
In 2019, nearly half of our new investments came from existing borrowers.
From a portfolio risk management perspective. These are credits we know when understand well. We believe these opportunities reflect the strength of our borrower relationships and the value we delivered to them beyond just capital.
We also continue to focus on investments, where we lead or co lead negotiations, which allows us to said deal terms, a solid credit or protections.
Our investments in the fourth quarter demonstrate our unique access deal flow as well as our ability to drive terms in the investments we underwrite.
Our largest investment the Puerto was a $19 million senior secured first lien term loan fiery financial group.
Bari presented a compelling investment opportunity. The company has a 35 year operating history as a leading provider of diversified consumer financial services the rapidly growing it often underserved Hispanic community.
We let a group of three lenders, allowing us to negotiate deal terms and loan documents to include creditor protections taking into account the diversified nature of the business.
We also provided a significant follow on investments with a $14 million senior secured first lien term loan to snow software, increasing our total loan size to $29 million. The company is the largest dedicated developer of software asset management solutions Snow software helps companies optimized.
Getting dollars they invest in enterprise software applications.
We had originally provide snow with a first lien term loan in February 2019.
Since that time, the company has significantly outperformed relative to budget and our underwriting assumptions the incremental financing we provided in the fourth quarter will support snow softwares inorganic growth strategy.
Overall investments in the fourth quarter demonstrate our emphasis on building a diverse portfolio with exposure to a variety of industries and our disciplined approach to underwriting.
Our two decades of experience through multiple cycles reminds us of the important of investing in companies and industries that can perform consistently throughout economic cycles.
Dispositions in the quarter totaled $152 million that include the pay off for a 29 million dollar loan to KBC health care, our 26 million dollar loan to bond International software and our 19 million dollar loan to trade show.
New investments during the quarter had a weighted average effective yield of 9.6% investments we exited at a weighted average effective yield of 11.4% as several higher yielding positions were either repaid or reduced.
The overall effective yield on our debt portfolio at quarter end was 10.3% compared to 10.6% at the end of last quarter, primarily as a result of the decline in LIBOR.
Our portfolio is not immune to downward pressure on yields resulting from the decline in LIBOR. However, we remain focused on evaluating each investment on it.
Oh, it unique merits and selecting appropriately priced credits the produced strong risk adjusted returns for our shareholders.
As shown on slide nine and 10, respectively. We have returned in excess of $11 per share in dividends and outperform the wells Fargo BDC index by 23% since our IPO now I will turn the call over to Paul will discuss our financial results.
Thanks, Howard and Hello, everyone. Starting on slide 17, net investment income for the fourth quarter was 38 cents per share exceeding our dividend of 36 cents per share.
On an annual basis net investment income was $1.61 cents substantially out, earning our dividends for the year.
This extends our nearly eight year record of covering our regular dividend every quarter since we went public.
Over this period on a cumulative basis weve outlined our dividends by an aggregate $44 million.
Or 76 cents per share based on total shares outstanding at year end.
Investment income for the fourth quarter was 81 cents per share substantially all of which was interest income.
This includes recurring cash interest 68 cents.
Recurring discount and fee amortization of four cents and pick income of four and a half sense.
We also generated four cents per share from prepayment income, including both prepayment fees and unamortized, though I'd and if any from dividend income.
Our income recognition follows our conservative policy of generally amortizing upfront economics over the life of an investment rather than recognizing all of it at the time investment is made.
Operating expenses for the fourth quarter were 43 cents per share and included incentive compensation of eight cents per share.
As well as interest and other debt expenses of 21 cents per share for net investment income of 38 cents per share.
Incentive compensation during the fourth quarter reflected the reduction in our incentive fee rate from 20% to 17.5%.
It took effect on February nine of 29 team.
The net decrease in net assets of $1.2 million or two cents per share was primarily driven by the disposition of fidelis as Howard discussed earlier.
Our net asset value benefited during the quarter from us from $7.8 million and gains and interest from Inventum offset by a 9.7 million markdown on Securus net of interest income.
So curious is a leading provider of communication services to correctional facilities.
And our loan traded down during the quarter as Prism service providers were subject to recent political and regulatory scrutiny. However, our loan continues to be well covered and the company continues to perform strongly as it has done over the course of our seven year investment.
The gain on advancing results from the significant efforts of our team as we worked with the company to manage through a number of challenges.
Leveraging our deep special situations investing expertise.
We are pleased that these efforts are continuing to show improved results in the financial performance of the company, which has lifted the value of our debt and equity holdings.
As of December 31st we had two loans, we had loans to two portfolio companies EG why in Avanti on non accrual. These loans represented 0.5% portfolio at fair value and 0.9% at cost.
Turning to slide 16.
We had total liquidity of $349 million at quarter end.
This included available leverage of $316 million.
Cash of $45 million.
And that pending settlements of $12 million.
In 2019, we expanded our credit facility capacity by a net $100 million [noise].
Reduce the interest rate on our SBC be facility about 25 basis points.
And extended the maturity of both facilities to May 2023.
Our credit facility expansion earlier in the year gave us flexibility as we plan for the maturity over 2019 convertible notes in December.
Subsequently, we issued 20 $200 million of unsecured five year notes at a favorable rate of 3.9%.
Including a $50 million follow on issuance in November.
The weighted average interest rate on our debt outstanding at December 30, Onest was 3.8%.
Our diverse leverage program now includes two low cost credit facilities, one convertible note issuance to straight unsecured note issuances and NSP program.
Outstanding draws on our 150 million dollar SPD program remained at $138 million at December 30 Onest.
We're also pleased that Fitch initiated coverage of TCPC at investment grade rating in January of this year.
As S&P also reaffirmed its rating at investment grade.
We now have an investment grade rating from all three rating agencies major rating agencies, S&P, Moody's and Fitch.
Net regulatory leverage which is net of SB I see that cash and sending trades remains unchanged from September 30 at 0.96 times common equity.
Well within our two to one leverage limitation following shareholder approval of our increased leverage flexibility last year.
I'll now turn the call back over to Howard.
Thanks, Paul I'll conclude with a few comments in the market environment and our outlook for 2020 before opening the call the questions.
US economic indicators include being employment in GDP growth support the cautiously optimistic growth outlook for the first half of 2020. However.
We think domestic political uncertainty, including the pending 2020 presidential election could weigh on business investment decision, making and long term capital expenditure planning in addition.
Geopolitical volatility.
And the other disruptions like the Corona virus continue to create uncertainty.
Well the economic outlook, maybe uncertain. Our team is focused on delivering the results are shareholders have come to expect from TCPC. We remain highly disciplined in our underwriting executing only a small number of the investment opportunities we review each quarter.
We make investment decisions based on a comprehensive analysis of each company its management team and strategy and relevant industry dynamics.
Our investment committee evaluates each investment and regularly monitors the financial performance of each of our holdings from our perspective, where we are in the credit cycle matters less than the ability to select selectively capture opportunities throughout the cycle.
To that end, we drop on our teams two decades of experience and Blackrocks vast resources to prudently identify opportunities that align with our selective investment approach, while providing our borrowers with financing solutions to help grow their business.
We continue to source strong senior secured credit opportunities, which have historically outperformed equities bonds and other unsecured debt through economic downturns, well underweight highly cyclical industries. We will also continue to maintain a broadly diverse portfolio in closing.
2019 presented challenges we are cautiously optimistic about the operating environment and we remain focused on generating strong risk adjusted returns for our shareholders in the years ahead and with that operator, Please open questions.
Thank you.
Ladies and gentlemen, as a reminder to ask the question you would need to press Star then one on your telephone.
To withdraw your question first the path.
Again that star wants to ask a question.
Please standby we've compiled the kian I roster.
Our first question comes from the line of Chris Kotowski with Oppenheimer. Your line is open.
Yes, good afternoon.
I just wanted to.
Ask unsecured is that you noted the markdown is that purely secondary market trading driven or was there any.
Diminution in their debt service capability during the quarter.
It was based on trading levels, It's a club deal it's ill liquid.
And.
It coincided with some headlines from several politicians on the business model, we have finance the company for seven years, there was a period under prior ownership, we re up to under the last acquisition. We're a similar thing happened and the company.
Wound up in court and in fact prevailed.
On that yet.
On its practices, but it's come under.
A number of headlines from from a couple of politicians. The company has made very clear that it is working to satisfy these concerns and we believe that the company itself is.
We're running a critical business in that it provides connections between prisoners and their families.
Mostly through public prisons and in contracts with the series of public prisons around the country and in fact last time. It went through some scrutiny. The counterparties came out in support of the company.
Okay, Alright, and on on for Dallas that exit is complete there is no.
Prospect of any recovery on that Thats chapters close right.
That.
Exactly the words I was going to use.
It's a chapter is closed we view it as a.
Unfortunate, but very isolated incident, and really I think Howard covered.
Most of the commentary in his opening remarks.
But we just.
Saw it there.
Options that take over the business and funded further or to make the tough decision and move on which is which is what we did but your characterization is accurate okay.
And then I guess, just somewhat more big picture Howard.
You view, you sounded a bit more cautionary on the economy for reasons that I can understand and.
And knowing that the Corona virus and all this is very recent.
You are any of your portfolio companies as far as you can tell seeing.
Changing.
Economics or is it does for US just still primarily the stock market is uncertain their corona buyers headlines and that's what we all see.
Well said, Chris date, we're not aware of any portfolio companies that have been impacted.
He noted that with caution because we thought.
Not say something about that given the market activity. The last couple of weeks would be remiss.
And so we did flag it but we have built a.
Portfolio.
That is mostly non cyclical and is highly diverse and has less international exposure.
But if you have something thats impacting the world second largest economy. We thought it was important to note that we could be impact okay.
Alright fair enough. That's that's it for me thank you.
Thank you for your questions.
Thank you. Our next question comes from the line of Robert Dodd Raymond.
Raymond James Your line is open.
Hi, guys.
Just following up on kind of either I mean, when I look yes.
Obviously lending to U.S. businesses, but when I look at the third largest industry segment textiles luxury goods and obviously, China is the largest producer who else textiles, and one of the fastest growing.
Market, so luxury goods, so while I.
Do you have any expectation that in directly that supply chain could get.
Updated an impact that segment in particular, obviously I mean, this news out of China that.
On the smallest side still only like 30% small business is actually back at work.
So it is it just too early to tell could you give us any more color about some potential supply chain.
Yes, it's a great question with respect to our portfolio the companies that fall into that category are primarily licensing businesses. So we are financing the license source.
Our multi channel the licenses are sold online through stores through various other channels very broad diversified companies.
These include.
ABG Kenneth Cole.
Psdb, which is Eddie Bauer, and and and and clients. So these are a diversified series of license or businesses now their underlying products that the licensees sell our course manufactured around the world and primarily in Asia for a lot of these products and so if there's broad disruption.
It's reasonable to assume that they may be impacted but to date.
We have not heard anything and many of these businesses have.
Guarantees and minimum streams of revenue from from a lot of their counterparties. So we had intentionally constructed this as a.
Less cyclical less retail sensitive part of the portfolio. We've talked about this on several occasions as we've thought about the retail business, we've really focused on doing.
Two things the last few years, one is doing asset backed deals and Thats really what the Eddie Bauer is and the other is doing license deals. So we have hard asset coverage on some of these and license straight stream of coverage on the others.
Got it got I appreciate very helpful. Thank you.
Good day, the Dallas, but not really put Dallas.
So flat is is obviously has been pretty decent between internet software and various other components itself has a pretty decent.
Segment, he'll portfolio, which it can so well see high margins can be a great fit so long as customer attention stays high.
The Dallas, obviously, I think what are the Pacific saving causes if I remember that was they lost a bit customer.
Is that in the vast if you will software book are there any of the.
You will self will play a companies which have relatively concentrated.
Estimate books that we should be aware off and that because that is at risk.
Thanks, its Raj I'll take that.
The answer is generally no and to be honest lets if we further distinguished fidelis from the rest of the software book, We don't it's a security software company versus.
A subscription or enterprise.
Software company into your point.
Theres a lot we focused on retention, we focus on to the value proposition of the business.
And for Dallas is very different in that it was a very different sales cycle. It's a tougher sell it's more of a product sale.
With less recurring elements to it.
And it's in an area, where when it's working.
To be honest, you don't know the value proposition as because it's working you're not seeing security breaches. So it's a tougher.
The high value and a good segment.
That's a tougher credit profile, if you will which is which we learned along the way as the business is deteriorating. So I think come back to your main question. The rest of it really is more predictable high margin high recurring.
[noise] contractual revenue streams.
In some of them are horizontal software some of them are concentrated within a vertical but I would not characterize any of them really as a similar to the delis both on the nature of the business.
And the concentration of the customers.
Got it got I appreciate that and one more if I can kind of them on the accounting side.
We should the dividend this year roughly 2.4 million all of that came from 36, a street capital partners. According to the K.
Obviously, the conventional lending JV, which is pretty small right now, but could vote to be a more material piece of your book.
900, maybe two.
Thousand in dividends, but they don't show up in the dividend line.
So can you tell us where that is on the income statement and why it's not included in the dividend line given it's a distribution some LLC member unit.
It's a it's a look through that so that one is to look through too.
The interest income so we included in the interest income section.
Got it appreciating I'm not.
Sure. Thank you.
Our next question comes from the loan.
With Wells Fargo.
Hi, Good afternoon. Thank you for taking my question and.
Sorry to make use of BDC managers that has to provide all of the corona virus expertise this quarter.
But the one that stood out to me there were a couple last year was.
The airlines.
Given that most of what we see.
As the immediate impact I think Mesa is mostly domestic from what I gather but would it be fair to say is that something that you've looked at.
With these developments post quarter as a potential pressure point there.
Yep Yep.
Thanks for the question the end to you and the rest of you have wished. So good afternoon, it's still morning here in Santa Monica [laughter].
We're very comfortable with the Mesa exposure.
Mesa as you point out is a.
Regional us carrier, it's a theater to the majors.
And so it doesn't have the international exposure of course, the whole industry could be.
Subject to a slowdown in travel, but these are asset backed loans, we have engines, we have planes.
These engines are substitute collateral on regional jets many of them.
And we're comfortable with our attachment points.
These planes are really necessary.
For the feeder system to function, which feeds the hubs.
Which are the backbone of the large U.S. legacy carriers and so Mesa is a great partner, we've been financing them for many years, we've known senior management for over two decades, they do a great job running it.
We also feel very comfortable with the underlying collateral values and when we made these phones the real focus of them was the hard assets themselves.
Oh sure appreciate that and.
Just a follow on portfolio question on each you why I think those your another mark this quarter.
Obviously sort of a legacy name the sub that's on non accrual.
I.
Just wondering if it looks like you're treating sort of the sub as equity given that moves around a lot and your first lien.
It is.
Marked at par crews income so if that's the case.
This is a near term maturity.
Why continue to accrue taxable income on the second lien.
Yes, if it's really under underwater versus the current capital stack and on and as a second part to the question is there any outlook there given.
The maturities.
Later this year.
Yes, let me address the fundamentals of the business first this is a good fundamental company, we've talked about that last couple of quarters.
What's been disappointing is and the topline is good they make high end.
Glass they composites that are used in sophisticated.
Industrial military and consumer uses their input costs.
Have soared to record levels.
They use some metals as a part of their manufacturing process, one of which is that a record high.
We said that on our last call. It is now up 50% higher than that it's 12 times, where it was most of the last eight years.
Yes. This is not normal for commodity cycles, it's really spiked up in an unusual way and so that has been creating.
Pressure on the company's cash flow and so that's why you've seen some of this movement on what was a cash paying instrument.
Which then went to pick and then ultimately on the non accrual.
Okay, I appreciate that context, and thanks for taking my questions.
Thanks, Thank you.
Thank you.
Our next question comes from the line of.
MP security your line is open.
That's good morning, guys and thanks for taking my question.
Our garage just wondering comfortable from management for a moment.
And Dotonel you heard a couple investment professionals and then bomb.
Other direct lenders.
If the turnover does happen in this industry, but in light of changes happen then if you're from the acquisition of Blackrock you wanted to know if you think there or can you hold true for operational changes at Blackrock.
That could induce your employees.
Glenn.
I'll take that one I think the short answer is no.
I think we've had you may not be it hit as obviously, we'd also had additions come onto the team both internally and Blackrock and externally and we expect to have more people because of our coming on because we're growing.
I think we've always had some level of people.
In the business find other opportunities.
I think that the way I define I when I look at it is it's where are they going and are they going for something that's particularly interesting and a good place because of what they've been able to do here and generally that's been the case, we're proud of.
The things people have done when they when they've moved on to something that just works better for them.
But I don't see any change or abnormal level of that and rather we've actually seen a lot of influx of interest.
Joining the team because of what we've been able to do a stand alone and what we're actually I think I end up in the early stages of doing as a combined platform, which is pretty exciting.
It's great to hear maybe just a follow up on that so could you provide us any color on maybe the investment professionals you had at year end versus what it was in the previous here.
Sure.
I want to say, it's about the same if not a few more at the margin.
But but yes, I had an exact numbers, but I wouldn't we grew our total number of investment professionals and we have have been growing over time.
In connection with the acquisition by Blackrock, We increased the total number of investment professionals that we have working across our private and public vehicles by almost 50%.
And so we have a more significant and robust staff than we had.
The average tenure of most of our senior people is well over a decade and the most senior ones. Many of them have been here 15 years in a few of us to over over 20 years. So we have a lot of seniority and tenure in the business and we've been growing the platform and just to add.
Go Rochus prior comment.
We've been pleased with the significant interest from people incoming to join US and are continuing to higher yes, Chris if you're looking to send your your resume and we've got the take it.
First a question.
[laughter], yes, thank you very much for that.
Last one just on that topic.
It's been maybe 18 months since acquisition close.
Hey, good benefit shareholders today from that decision.
Hi. This is Howard yes, there are a series of benefits that we've got.
And I think the biggest one is as tennenbaum capital, we built a great nish brand in the market, but what is clear to US is that there are many borrowers and counter parties out there that embrace doing business with the world's large.
This asset manager they like our resources they like our knowledge they like knowing that there is that kind of support and information.
And credibility they wish to go public or do other things with their capital structure.
And we found that to be very powerful I will just add to that we're also working with a fantastic group of people across a large and talented org organization.
Got it no obviously, we know that you've reduced your prospect capital and then obviously the new investment grade rating. There. So it's very curious what was the because obviously there.
I was listening to my last question I didn't notice so first.
And we'll keep down this quarter, it's an interesting investment and I was little bit surprised given.
Originated in the summer so was that Paydown encouraged by you or would simply a function of just cash flow and amortization.
So.
It's a highly structured loan that has.
A series of protections and features associated with it and as has been public jewel has.
Raised significant junior capital recently.
And so we have continued to have significant asset coverage.
And so the they've been paying down the loan.
Just as we we contemplated.
Got it that's it for me, Thanks, and Roger maybe after brush up that resonate for you.
[laughter] Thanks, Chris.
Thank you as a reminder, ladies and gentlemen should ask the question do we need to press Star then one on your telephone.
Our next question comes from Milan, NOLA Atlantic Birdsong. Your line is open.
Powered.
Turning to the election, if standards as the nominee and become the close race to expect slowdown in.
You'll origination activity in the second half of the year.
Yeah.
It's a good question.
We talked about that in our earlier comments, if you think about the.
Last collection that we had in 2018, there was a lot of rancor around it and I think there were a number of people that felt that that election caused ANC stunned slowed down business activity and clearly a presidential election alongside of.
Congressional local elections is going to be far more impactful than that.
And so we think that.
Regardless of who is on the ticket.
The discrepancies between the different agendas of the parties and the rhetoric coming out of some of the candidates.
And the Unsi Asian, a very different policies is likely to give some businesses pause our portfolio is less heavily weighted to capital expenditures and long term projects.
This is intentional it's part of a reorientation, we've been going through for the last three or four years sort of preparing for.
As a change in the economy or an economic slowdown.
But that doesn't mean, we're immune and clearly a lot of the companies. We have been there still have big ticket items, but theyre, probably less susceptible than a more.
Capex heavy portfolio.
Thank you and also as a follow up.
Other Corona question Hows, the discussion of Corona and the possibility of a pandemic driving your negotiations and new investments other affecting terms and.
Or just the overall conversation.
Yes, obviously this is very new.
Okay that Blackrock has vast resources, including offices and the number of the more impacted countries and so our data flow and data sources are probably more expanded than many.
And so we're trying to balance.
No.
Obviously first and foremost concerns for people safety.
But also an appropriate caution about things that could happen in companies I think most people are trying to go about business is normal under the assumption.
This will pass and the life will resume normal C and it certainly is normal for many businesses, particularly in the U.S.
But in the real recent term you can see a backing off in the traded markets and a little bit more caution and whether that will spill into our markets, which are more negotiated intend to remove a little bit more slowly remains to be seen.
But I would say the lender borrower dynamic the last few weeks is probably on the margin tilted a little bit more in favor of the lenders in some of the deals we've been working on as some people on the borrower side are probably more interested in getting things done quickly with a trusted counterparty.
The thing no we'll get across the line instead of taking capital markets risk.
Okay. Thank you.
Thank you the question.
Our next showing any further questions I would now like to turn the call back over to how it left.
Uh huh.
We appreciate your questions and our dialogue today I'd like to thank all of our shareholders for your confidence in your continued support and our experienced and talented team of professionals at Blackrock TCP Capital Corp. For your continued hard work dedication. Thanks again for joining US This concludes todays call.
Ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect everyone have a wonderful day.
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