Q4 2020 Pennantpark Investment Corp Earnings Call
Good morning, and welcome to the Pennantpark investment Corporation's fourth fiscal quarter of 2020 earnings Conference call. Today's conference is being recorded at this part of all participants have been placed in a listen only mode. The call will be open for question and answer session for the speaker's remarks, if you would like to ask a question I part time simply per star one on your debt.
Thank you God, if you would like to withdraw your question. Please press star true on the telephone keypad.
It is now my pleasure to turn the call over to Mr. Art, Penn Chairman and Chief Executive Officer of Pennantpark Investment Corporation Mr. Penn You May begin your conference.
Good morning, everyone I'd like to welcome you to kind of book investment Corporation's fourth fiscal quarter 2020 earnings Conference call I'm joined today by the you got from our Chief Financial Officer the.
These please start off by disclosing some general conference call information and of course, the discussion about forward looking statements.
[noise] like you Arts total.
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Our forward looking statements unless required by the <unk>.
So it's been copies of our latest SEC.
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The board Dot Com book that you want you like the or five 1000.
I'd like to turn the call back for Charlie <unk>, Chief Executive Officer of Art Penn.
Thanks for the first we hope the you your families and those your work with are staying healthy.
I'm going to spend a few minutes discussing how we fared in the quarter ended September thirtyth, how the portfolio is positioned for the upcoming quarters, our capital structure of liquidity the financials and then open it up for Q1 day.
Despite the challenging economic conditions brought on by the pandemic, we're pleased with our performance this past quarter.
We achieved the 1.7% increase in the adjusted EPS Navy as the.
Portfolio continued to improve during the quarter.
We have several portfolio companies, which we have substantial equity positions that are benefiting from the K shape recovery.
This is solidifying the bolstering of that NPV, we will highlight this company is in a few minutes.
Additionally, we are pleased with the formation of Pennantpark senior loan funds P.S. all of our joint venture with Pantheon, a leading global private markets investor.
On October Thirtyth pantheon upsize their commitment to P.S. the sell by another $27.5 million, bringing their total contribution the $62.5 million.
Pantheon of additional investment came into P.S.L.S. at any day.
The equity from pantheon into our platform not only validates the value proposition of the existing portfolio, but also help scale the kind of art platform to continue to be a leading the lending partner in the market.
Creates additional capital for future investment into the attractive new vintage of loans that we are seeing today.
That's the out of new 27.5 million dollar investment of the P.S. all that was against splitting the into approximately 65% subordinated debt the 35 per cent equity.
PMT also invested an additional $2 million in the P.S.L.S. at any of the on October Thirtyth.
For a while for the new investments PNNT GE on 60.5% of the JV and pantheon, 39.5%.
Although we never predict of the global pandemic as you May know, we have been preparing for an eventual recession for some time for.
Part of the COVID-19 crisis, we proactively position of the portfolio of stuff that's always possible.
For the past several years, we've generally been moving into the into senior secured positions tired of the higher in the capital structure and into a more diversified portfolio overseas.
Well were 60% of the portfolio is in first and second lien secured positions across 80 investments.
The overall portfolio is constructed to withstand market and economic volatility as of September thirtyth. The average debt to EBITDA out of the portfolio was 4.5 times and the.
The average interest coverage ratio the amount by which the cash income exceeds cash interest expense was 3.1 times.
We have only two non accruals on our book out of 80.
The nine different names of PNM GMP SLS the.
This represents 4.9% of the portfolio the cost of 3.4% at market value.
We have largely avoided some of the sectors. The has been hurt by the most by the pandemic such as retail restaurants health clubs apparel and airlines, although PNNT. She does have exposure to oil and gas, which we will discuss later.
The portfolio is highly diversified with 80 companies and 29 different industries.
Since the inception PNNT. He has invested $5.9 billion at an average yield of 12%. This compares to an annualized realized loss ratio of about 20 based 24 basis points annually.
If we include both realized and unrealized losses, the annualized loss ratio is the only 35 basis points annually.
The strong rack track record includes our it area for energy investments are part of <unk>, primarily subordinated debt investments made prior to the financial crisis and now some portion of the pandemic.
Our performance through the through the global financial crisis of recession was excellent during the recession. The weighted average EBITDA of our underlying portfolio of companies declined by 7.2% at the bottom of the recession.
This compares to the average EBITDA decline of the Bloomberg North American high yield index of down.
I'm, 42%.
We are proud of this downside case track record in the prior recession.
Based on tracking EBITDA of our underlying companies through co of it. So far we believe that our EBITDA decline will be substantially less than it was during the global financial crisis.
Now, let's turn to the outlook ahead in the coming quarters, and how our portfolio is positioned well.
We are gratified that our historical investment focus has protected us from some of the worst at areas of the economy, such as retail restaurants health clubs the power of one airlines.
We've been pleased with the way our portfolio companies had moved to rapidly just cost and focused on shoring up liquidity.
Many of our portfolio of companies aren't industries, such as government services Health care software communications, and cyber security, which collectively comprise the substantial portion of our portfolio and are less impacted by co of it.
Additionally, alongside of the debt investments, we make in many companies we invest in the equity usually as a co investor with the financial sponsor our returns on these equity call investments have been excellent overtime overall for our platform from inception through September Thirtyth, our 209 million of equity called best of generated an IR of 25.3 per se.
At the multiple on investing capital of 2.3 times.
We believe the we are experiencing acacia for recovery with some companies in the industry is being large beneficiaries of the environment.
We are pleased that we have.
The attractive debt and significant equity investments in four of these companies, which can substantially moved the needle of our eye Navy.
Like the highlight those for companies the for companies, our cattle wheel pros Walker Edison and P.T. network.
Kanno health as a national leader in primary health care, who is leading the way and transforming health care to provide high quality care at a reasonable cost to a large population.
Our equity position as a cost of fair market value on September thirtyth of $4.3 million and $18.8 million respectively cash.
Net what has been experiencing rapid growth with revenues nearly quint toppling and EBITDA more than tripling over the last three years.
[noise], we believe that there is a massive market opportunity for cat out to grow in the years ahead with the Medicare advantage program.
Based on the recently announced transaction with Giles acquisition.
And more jobs, just trading that position would be valued at $72 million.
About 12% of that value is in cash that we will receive before at consummation of the deal in early 2021, and the rest of Ishares of jaws acquisition.
The shares are locked up and the limited partnership controlled by the financial sponsor.
Well likely be valued by the independent valuation for our at a discount to the traded value.
Well pros is the largest national distributor of aftermarket custom wheels. The company has consistently grown since our initial investment with revenue doubling and EBITDA of tripling over the last 2.5 years, our position as the cost of $4.5 million and fair market value of $23 million as of September thirtyth.
Walker Edison is the leading ecommerce platform focused on selling furniture exclusively online and through the top ecommerce companies. Since our investment was made in 2018 sales of more than tripled and EBITDA is up almost four times.
Our position as the cost of $1.9 million and the fair market value of $12 million as of September Thirtyth.
[noise] PT network is the leading physical and occupational therapy provider in the mid Atlantic States.
Our equity investment the PT came sort of restructuring which came about after the company made several operational mistakes.
We've always had a positive view of the industry and the outlook to the industry Tailwinds and demographics, which result, the comparable companies trading of EBITDA multiples of 12 to 15 times.
Under our ownership we brought in an excellent management team the corrected those operational mistakes and the shepherded the company well for kind of it.
Equity position as the cost of $23 million at fair market value of $39 million as of September Thirtyth.
All four of these companies are getting financial momentum in this environment and are any of you should be solidified the bolstered for me substantial equity investments at their momentum continues.
The energy investments represent 8.8% of the overall portfolio. Despite the challenges facing the oil and gas industry Ram energy successfully refinanced all its outstanding debt with the new credit facility led by vast bank under the main street lending program the.
New loan maturity lowers Rams cost of capital and provides runway to execute on its operating plan and time to wait for a recovery in prices.
Our gaming portfolio has proven to be extremely resilient and continues to perform well with.
For the repayment of Peninsula Pacific Colonial Downs since quarter end.
An 11% of higher our gaming exposure has been reduced from 3.6% of the portfolio to 2.6%.
We continue to review and we'll look to selectively making new investments the.
For new financings is attractive we believe the middle market lending is the vintage business. This upcoming vintage of loans is likely to be the most attractive we've seen since the 2009 to 2012 time period.
Leverage levels are lower equity cushion is higher yields are higher and the package of protections, including covenants are tighter.
After enduring about five years of the late cycle market for middle market lending, it's refreshing the have attractive risk reward available to us.
Now I will turn the call over to of each of our CFO to take us through the financial results.
Thank you art.
The quarter ended September Thirtyth core net investment income totaled 14 cents per share GAAP.
GAAP net investment income was 11 cents per share you two of three cents per share onetime cost related to the creation of of the SLS.
Looking at some of the expense categories.
Basically told the $4.4 million.
General and administrative expenses totaled $1.4 million and interest expense totaled $8 million, including the $2.1 million onetime costs.
Net unrealized gain on our investment was $21 million for 32 cents per share.
Net unrealized depreciation on our credit facilities was 14 cents per share almost all of which was due to the deconsolidation of all the yes.
Net realized losses on the investment was 15 cents per share the again, almost all of which was due to the deconsolidation of yes.
Our our dividend exceeded our net income by one cents per share.
Consequently, net of your per share went from $7.82 to $7.84 per share.
Adjusted EBITDA, excluding the mark to market of our liabilities was $7.59 per share of 1.7% from $7.46 per share our core.
The increase in other <unk>, primarily due to almost 3% valuation increase on the investment portfolio.
The other reminder, our and part of the portfolio credit facility and senior notes are mark to market by our board of directors of each quarter using the exit price provided by independent valuation firms security of exchanges for independent broker dealer quotes when active markets are available under the eight.
28 25.
Okay. So for a book of dealer quotes are inactive we use independent valuation firms to value of the investments.
Well worth the of older.
As of September Thirtyth flow through.
33 cents per share.
Our debt to equity ratio the.
Chris the substantially over the quarter due to the formation of the sell it.
Our GAAP.
Debt to equity ratio net of cash was the one times down from 1.5 times last quarter.
Regulatory of debt to equity ratio net of cash, which excludes the acute that was 0.9 times down from 1.4 times last quarter.
With regard to any of our GAAP in the U.S. seven dollar 84 cents as of September September Thirtyth of approximately 0.3% from the prior quarter, which reflects both the marked up all the assets offset by the bulk of outsourcing of liabilities.
For the liabilities were not the mark to market adjusted EPS Seven dollar 50 line set up a.
Approximately 1.7% from the prior quarter.
We have ample liquidity Dupont revolver draws and were in compliance with all of our facilities at September 30 day.
We have the readily available borrowing capacity and cash liquidity to support our commitments.
We have a strong capital structure with diversified funding sources and no near term maturities.
We have 475 million all the revolving credit facility maturing in the 2024 week of indicate for banks.
119 million of all this be a debentures maturing in 2026.
And 86 million of unsecured notes maturing in 2020 for it.
We have been in constant dialogue with our vendors and are thankful for their support.
We have withdrawn our application for on the U.S.B. I see of despite.
We intend to gradually pay down if the I see two while also providing proving out our portfolio of fruit quoted before the we are facing.
Our overall debt portfolio has a weighted average yield of 8.9 per se.
Well at September Thirtyth, all portfolio consisted of 80 companies across 29 different industries.
The portfolio what the left the 40 want this I think for US no particular debt.
20% in second lien secured debt.
10% of the subordinated debt, including 6% Npls.
And 29% except for the common equity, including for the person MPS the list.
93% of the portfolio has a floating rate of weeks 90 per cent set the LIBOR floor.
The average like the floor is one of Corcept.
We have concluded in consultation with our board the extent things like the fee waiver through December 30, Onest 2020.
Now, let me turn the call back to art.
Thanks for me.
The include we want to reiterate our mission.
Goal is to generate attractive risk adjusted returns through income coupled with long term preservation of capital everything.
Everything we do is aligned the that goal, we try to find less risky middle market companies that of high free cash flow. The conversion, we capture the free cash flow primarily in debt instruments, and we pay out those contractual cash flows of the far as dividends to our shareholders.
In closing I'd like to thank our extremely talented team of professionals for their commitment and dedication.
Thank you all for your time today and for your continued investment and confidence in us.
That concludes our remarks at this time I'd like to open up the call for questions.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad and if you're using the speaker phone. Please make sure that your mute function is turned off all of your signal to reach our equipment again lot of star one of the signal and our first question today comes from Robert Dodd Raymond James.
Hi, guys I'm asking.
A question for you back at all on the on the JV.
I mean, it looks like obviously no no.
The technical question since I got no dividend paid this quarter all of these see how the things.
Is it going to be the in 10 minutes, the that's going to pay the dividend dog on kind of the lagging basis or was it just a.
Uh huh tightening function of set so why.
Well the snow distribution for the this this quarter because of the so called the school.
Yeah, Hi, Thanks, Robert Yes. It was a it was just because we had just closed and we were getting squared away with everything for going forward. The it'll it'll be paying dividends each quarter and this first quarter was was just kind of a quarter of getting set up.
Understood just the on that as well I mean, what's the kind of putting.
Of the money in the voyage.
The the discussion now we see of after selling the assets into all of your balance sheet into the JV you have capital as well.
What's that any of the discussion about whether you would put in more canceled the wood.
The new did to match, perhaps the I'm kind of maintain the ownership percentage for isn't the deliberate strategy.
Peter let Ben.
Hello, Dan do you have the.
The second shoppers.
Yeah, you know you may remember from last quarter of from even the press release, we put out day. It always intended to the upside it was just.
It was just the their Lps and when they're all piece, we're able to kind of come into the vehicle. So you know we closed on the first the piece you know.
All of your on and then we did the second piece, which was always the anticipated from the get go.
Got it. Thank you all on some of the other pulled by the company Oh, We don't tell obviously, they just did a tip of the cap you know on on your equity I mean, the and should we be expecting the dividend from you on that.
Piece of the give them the they just price the recap I guess like this.
Yeah.
Eddie any color you can give a debt.
Yeah. So I I think for PNM cash think it's going to be something like three or three and a half million of cash we don't yet know whether that will be characterized as a return of capital.
Dividends several waiting for their estimate of there how would I characterize that but that will be cash that's coming to PNNT Jake.
Okay got it. Thank you and then just in general sense of it.
Two of the Sicad I will accept the any you know any more kobi gives about the time line of.
Moving some of these things going as you kind of there's going to be a lot GAAP book sets up.
And any idea about how fast some of that's the the equity could be monetized given the it does seem to be the end of <unk> by the is it picking up that might be in and by the way I guess some of these assets to cash.
She gets sold so any Eddie Bauer said.
Yeah. So I I think we're getting taken out of our debt and the next week or two.
So thatll be a liquidity event and I think we're getting a little bit of the cash on the equity also at that same time.
The either before or at closing of the total value that we're talking about 12% will be cash either in the next couple of weeks or at closing and then the other 88% won't be stock.
In this limited partnership that's controlled by the sponsor.
I don't see Charles acquisition stock.
There will be at least the six month lockup on that stock and you get out of this kind.
Kind of the sponsor and management of well along with about 65% of Canada, which is obviously a lot of value. So it's not like we're going to double of flip the switch and punch out of the box.
The you can take guidance and one of two ways of wait for want of she would be nice to watch out of hand flip the switch a or b.
What I'd encourage you and others to take a look at the public information on the Charles acquisition website about Catoe itself about the marketplace. The ran about their comparable which is a great company called Oak Street health, which trades at about $11 billion valuation and you were the line up CAD of side by side with Oak Street Health.
Oh in lots of very favorably in terms of revenues in terms of EBITDA in terms of members in terms of medical loss ratios.
So there is the case and I think the he believes this case that can know should be a very attractive stock and has the ability to double or triple.
Potentially from from here, So we'll see but yeah. We are we are locked up for a for a while and that they might actually be up the other thing.
Okay got it I appreciate that the one of the one of the equity piece I guess, you do come true I think control since you.
At the losses in the restructuring will be pp metwox any any out of them.
The interest in potentially monetizing that or is it still too too early in the.
What can the management team and getting that backhaul.
I called the <unk> Jack.
Yes, so yeah, we do control of that particular the company we brought in a new management team has done a great job.
To recall of it I think we've seen other 12 to 18 months you know the kind of get back in the good position get beyond Kobin.
And there's a myriad of the of all the physical therapy companies getting out of the public domain or privately.
Value the 12 to 15 times EBITDA. So so yeah I think we want to you know kind of the you know enhanced that we might do some small tuck in acquisitions and try to get that EBITDA up a little bit. So the we can then you know I should add.
Tractor multiple.
Got it thank you that's losses.
Thank you out of.
And our next question comes from Casey Alexander with Compass point.
Hi, Yeah, the warning I have the a couple of questions.
You you've got room to invest now I mean, the regulatory debt to equity ratio is 0.8 times can you talk about what the origination pipeline looks like coming into the end of the year here and what sort of opportunities that you're seeing to enhance your earnings power.
Yeah, well you know in terms of the vintage we think it's an attractive vintage where the bar and the machine is is operating on we're looking a lot of deals.
And we are looking for ways to enhance the earnings power to the points.
You know right now we've seen for the last six to eight months Weve been focused obviously on the portfolio coupled with getting the right positioning of I do think we are in a timeframe that when we can look at opportunities of the market as well and we're going to look now to answer as the any before you know it feels like it's coming into 18.
You know kind of a nice position it feels a lot better than it has in the while I think you. The it's time for us to turn to our earnings generation.
As an additional focus obviously as we rotate these equity positions that well enough itself the being a great opportunity, but we are starting to look for ways to the power the of the earnings to a better place.
Yeah, well and on that I believe you also control ran.
[music].
And looking at the Rand website. It it certainly appears from the press releases or the the updates on the Ram website.
That it's a better picture and the end in some ways the considerably better picture than what we had looked at over the last several quarters the there.
Can you discuss and give some more color there wells that are operating or how sustainable is it the impact of the main street lending program and.
And how that extend your runway of I'm really curious the here.
You know because it sure seems by looking at it that they'd say.
Have changed a bit for the better there.
Yeah, No the company is generating cash flow and.
And ER and he has the mainstreet lending facility.
Okay got her phone the lender of Macquarie and and put you in a more cash on the balance sheet.
So the of the wells are operating it's the cash flow generative credit cash flow positive company. We would hope that we can you know the pay down that debt or a portion of that debt over the next two or three years, it's very low cost debt.
There's a pik option for it so we can benefit from being an issuer of of that tech. It's.
It's kind of like a lot of ore plus 300 sales very very cheap and of the Macquarie facility was one of like a 10% yielding the a yielding facilities. So yeah. The the you know what love the idea the areas to generate.
Generate free cash flow pay down the debt to the extent, we can and then position the company as best we can for sale, you know should <unk> or if and when there is a good opportunity to maximize maximize that sales, but the main street a lending part of them certainly for the Ram is transformational and the and the company's wells of ours are doing.
They are.
He's doing actually very well in this volume. So so we're hopeful it's been a that's it's been a long ride, but we think we've positioned brand as wells can be positioned at this point.
All right well. Thank you for taking my questions and yeah, I I guess when you have all lost the 20 bagger on on kind of help congratulations or certainly in order for that line.
And so that's why it's nice when it works.
Thank you.
And our next question comes from Nike Swim of Ladenburg.
Oh, good morning art than of the two wells just a few housekeeping sort of questions I noticed the other income line was up pretty meaningfully quarter to quarter and repayments and exits were actually down can you give us some insight into what drove that increase.
[noise] I'm looking at my notes of even if you have any of you of any color.
We do have some prepayment penalties this would have recorded.
There are large show of this quarter, so you're right about four cents of four cents per share of that would have recorded the is a fairly large usually you should look at it a total pro forma basis, maybe one or two cents just kind of of normal so extraordinary or larger sort of the Oh, you know large the onetime the income that we have book.
The again hard to handicap, what it's going to be next quarter, but it's primarily prepayment penalties on the on exits.
Thank you for that at least that's what I suspected art can you remind us of sort of what's your target blended return on investment on the T.S. itself.
Yes, yes, so we're targeting the P.S. hotel is over in Pflp me P.S.L.S. ups.
I'm, sorry, yes, I guess a lot of <unk>.
There's a lot of tea.
And all of Al So I get it that the S. I'll add my RV eat [laughter] joint venture with with Pantheon, we're targeting kind of the same you know 12 ish percent. The you know our away on P.S.L. FSB our M. P. S. The salads are.
The similar of University in the portfolio similar you know kind of leverage ratios.
So we think it's a very nice adjunct to the to the mix for PNM taste.
And are you, including the sub debt investment in that calculation.
That's right all of the all of the capital level setting but.
Put into the work, yes, correct and and lastly in the past you gave us the target leverage on your balance sheet and regulatory leverage of if I recall correctly 1.1 of the 1.5, but now you've announced your even on the wind the S.P.A. or I'm sorry, the FDIC subsidiaries can you give us the sense.
With the current conditions of the market what your target leverage is on a go forward basis.
Yeah, So I think for right now, particularly with the of the portfolio. That's the you know equity heavy which is what it is and in many of these equities are you know because of value creation.
We we said one for one of the 1.5 and I think we're going to be a well you're at the lower end were below the lower EPS, we would expect for the lower end of that of that range.
The regulatory correct.
That's that's that's regulatory.
Regularly.
For sure that those are all my questions I. Appreciate your time. Thank you.
Hey.
Hello.
Well take our next question from Ryan Lynch with KBW.
[noise] [noise].
Just have a a one question you'd mentioned kind of the the prospects for for piano housing and by the way congrats on that aren't that that's really great. Great News from you also talked about teaching networks, which you guys are of the controlling equity because they're sharing.
The other two though walk rather see engine wheels, CRO I believe you guys for in the minority equity position, but just given the strength of both of those businesses over the last several years as well as.
The increase in the M&A market [laughter] or at least the they'd be hurt the pipelines increasing of private equity getting more out is you know as a general commentary you know what do you think about the the prospects of being able to actually get those you know over the next six to 12 months.
Yeah. It's a great question for dogs control those two of other companies are doing very well. So certainly we would think within the next 12 months.
You know six months, there's a possibility.
But you know kind of hard to hard to put a pin it but yeah I'd say six to 12 months of fine timeframe to the company.
Okay.
That was all my other question Hunger me again, congrats on the really nice quarter.
Thank you.
And we'll go net income Kyle Joseph with Jefferies.
Morning, like the thanks for taking my questions are most of the answered I just wanted to get a sense for for yield obviously, there were some moving parts in the quarter with.
With the with the JV you know given your your your pipeline interest rates. The lawyers in your portfolio can you give the defense for where you would expect yields to the Chen from here.
Yeah look we think he'll still be roughly steady I think it's a question of the Oh, starting to put the money to work to drive a true to driving from and then also equity rotation. So.
You know I would probably model of steady yields from the.
All right that's it for me thanks for them Yeah.
Thank you.
Well go next to Rick Shane with JP Morgan.
Hey, guys. Thanks for taking the questions. This morning.
One of the things are.
We noticed is that your upcoming portfolio of maturities of 2021.
We are very low and very manageable it looks like one of the factors you know the standard that is it appears cascade was restructured or.
The sort of rolled poor I'm curious, how we should look at the transaction that was the transaction that was a large deal with 100% yeah.
It looks now that it's been bifurcated into Oh, crap and eat pet.
I'm curious how the crude hit works on that transaction that there was a reversal of any income associated with that and whether or not the price will be cash Pat.
Yeah. There the press. Thank you read the profit is as non cash pay on that particular investment were accruing. The company is doing well. This was a situation where you can you can't was kicked down the road because of the timing of co. The.
But we believe the company will be sold in the next 12 to 18 months.
And it's actually going very well sort of covered and seeing a little bit of the left.
We aren't we're accruing the outerwear accruing income.
Got it and so when the <unk>.
I guess, what I'm trying to understand is that if I look at the notional of both the price and it historically it looks like your basis is roughly the same.
If that's the case and so effectively you're who pick now and for your cash exit will be essentially where you thought it was going to be or is there a change.
The cat, so they'll be pic accrual of them and we hope that when we actually have we.
We get the other the principal amounts.
Yeah, the entire principal amount paid back.
Thanks, So I mean, we can circle back after the call and I can drill down into the specifics with you, but the we I believe off the cuff here that we are picking that was the mouse company is has had a balance here with the goal of the company being sold here in the not too distant future.
Got it and show the idea that in terms of.
Getting of additional time with the maturity of maturity was supposed to be August.
<unk> of 21, you have the additional kind of worked through the transaction of but it didnt look like the coupon on the pit was lower the net coupon to you guys is actually lower between the kras and.
The pair what the.
What's the benefit the u.
Received from this transaction.
Okay, you know I recognize that the go back and take a look at it on and I don't remember the exact facts and circumstances on the system was probably six months ago either of you know right around one code for those hitting but you know we believe that our general our ball of risk reward is roughly the same and cash.
Moving to grow but I can certainly after the call circle back any of that details.
Okay, great. Thank you and the sponsor putting in of the any additional capital I again, I don't know the level off the top line yeah, Yeah, I mean, I do remember the <unk> I do remember that the sponsor did but additional capital itself in general. This is a this was a sponsored putting money in.
ER restructuring of the balance sheet to kick the can down the road the put the company in the better positioned for exit.
You know kind of post of it and I think it's the general theme as the specifics of exactly the the coupon guidance I don't remember off the cuff here, but we can certainly getting for that after the call.
Perfect. Thank you guys very much.
Thank you.
Well go next the Devin Ryan with JMP Securities.
Hi, Good morning, this is Kevin pull talk for debt.
You've talked about focusing on football for an argument over the past two quarter of <unk>. The the same time. The students is particularly attractive I'm just curious how you evaluate making in that place versus preserving liquidity for a potential second line.
[laughter], that's a great question.
And perhaps that's the reason weve been a a little bit you know, particularly with this company for a little bit more careful about.
You know about the pulling a lot of capital. So we've been focused on the existing portfolio of getting in the investor shape as possible positioning in the existing portfolio as well as possible. You know now we're looking operating then we're saying what's going on now to the extent, we we deploy capital.
Well the only being companies are industries that we think are going to be very coverage of resilient.
And you know we do have most of the industries. We've invested in demand with a couple of exceptions have been covered the resilient industry. So they'd be situations that accompanies the industries, where the other companies are doing well, where it's a sensible amount of leverage where the return is attractive and we feel the at a high degree of.
Conviction around the investment.
Okay. Thank you that's helpful. And then lastly can you provide the weighted average life book <unk> My book for for the portfolio and then also the percent of flow there the investments that are coming up for for.
Yeah, So a 93% the of the portfolios of floating rate, 90% of which nine.
90% of the 93% of the level of floor and the average floors of 1%.
Okay. Thank you I appreciate you taking my question.
And that concludes the question and answer session I'd like to turn the call back over to Mr. art Penn for any additional share additional for closing remarks.
Thanks, everybody for being on the call today wishing everyone health and safety of Great Thanksgiving and.
You know early February is the short time around the from here.
The end of November since this is the capably the for the spring due in early February Thank you very much.
And again this does conclude today's call. We appreciate everyone's participation today and you may now disconnect.
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