Q4 2020 Golub Capital BDC Inc Earnings Call
Please standby the conference will begin momentarily. Thank you for your patience.
[music].
Welcome to GBDC September Thirtyth 2020 quarterly earnings conference call B.
Before we begin I would like to take a moment to remind our listeners that remarks made during this call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Statements other than statements of historical facts and make it made during this call may constitute forward looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties.
Actual results may differ materially from those and the forward looking statements as a result of a number of factors, including those described from time to time and Gbdcs filings with the FCC.
From materials the company intends to refer to on today's earnings Conference call. Please visit the Investor resources tab on the home page of the company's website Www Dot Golub capital BDC Dot com and click on the events <unk> presentations link.
Gbdcs earnings release release is also available on the company's website and the Investor resources section.
As a reminder, this call is being recorded for replay purposes, I will now turn the call over to David Golub, Chief executives Executive officer at Golub capital BDC.
Please go ahead.
Hi, Thanks, Felicia Oh, everybody and thanks for joining us today I'm joined by Ross to New York, CFO, Greg Robbins, and Johnson and his book managing directors, who called capital, we and the rest of the GAAP capital T. and hope that.
You and your family or are safe and that like us you're you're all recovering from meeting too much over Thanksgiving yes.
Yesterday afternoon, we issued our earnings press release from the quarter and fiscal year ended September Thirtyth, and we posted and earnings presentation on our website, we're gonna reported that presentation throughout the call today.
For those of you who are new to GBDC, our investment strategy is and since inception has been to focus on providing first lien senior secured loans to healthy resilient and middle market companies that are backed by strong partnership oriented private equity sponsors.
Let me start today's meeting by sharing with you two headlines. The first headline is the Gbdcs results for fiscal Q4, <unk> were strong and were in line with the preliminary estimates that we filed on October 19th.
The primary driver of the results was the continuation of trends that we described on last quarter's earnings call and and I'll discuss those trends and a minute.
Second headline is that GBDC is very well positioned as we head into fiscal 2021 with ample dry powder and liquidity and flexibility to capital Y. side, what we expect will be an attractive investment environment and in fiscal 2021 I'll discuss this in more detail and my closing remarks, and after that we'll take your.
Questions.
Let's now take a closer look at Gbdcs results for the quarter and for the fiscal year and the key drivers of those results.
Please turn to slide four.
We're just from skewed toward Gbdcs adjusted net investment income per share was 28 cents. Adjusted EPS was 57 cents and ending NAV per share was 14 33. All of these were the mid pointed as we published previously.
Right. So that the primary driver of these results was the continuation of trends that we talked about last quarter, what do I mean by that slide six outlines three key themes beyond just simple good underwriting that we believed growth GBDC strong fiscal fourth quarter from.
First in calendar Q3, the U.S. economy strongly rebounded from the heavy degree of covert impact in calendar Q2.
Second our portfolio companies generally continued to perform better than expected, especially that the companies that are in covert impacted subsectors and third private equity sponsors have generally continued to step up to support their portfolio companies.
If the second and third and these themes sounds familiar they should this story of this quarter was largely a continuation of the story of the prior quarter.
And just like fiscal Q3. These these themes and reflected in the positive credit quality trends with the and the right hand side of the slide, let's say culture and look at each of the indicators on that slide starting with performance ratings. Please turn to slide seven.
In fiscal Q4 internal performance ratings continue to improve.
Start with some context, you'll recall, we highlighted in last quarter's earnings presentation, the upward migration and internal performance ratings in fiscal Q3.
There was an increase in.
Owns and categories four and five those are loans that are performing at or better than expectations and underwriting and there was a decrease in category. Three loans. Those are loans that are performing we're expected to perform below expectations. The percentage of the portfolio performing materially below expectations. Those that are in categories, one and two also.
Declined significantly between fiscal Q2 in fiscal Q3.
All of these positive trends continued in fiscal Q4 in fiscal Q4 loans and categories four and five continues to increase.
Went from 76% of the portfolio as of 630% to 78.9% of the portfolio at 930.
Category three loans continued to decrease they went from 22.3% at 630, the 19.7 per cent at 930.
And category, one and two loans also declined quarter over quarter from 1.7% to 1.4%.
Very small proportion of the portfolio that's in categories, one and two I think that's particularly important because it indicates that even in this cobot stressed environment significant credit impairment in the portfolio remains rare and idiosyncratic.
What proportion of the portfolio rated three still higher than we typically saw pretty cold up but its meaningfully improved from 331 and continues to go in the right direction.
Second key indicator of improving quite a credit quality is non accruals nonaccruals at fair value also decline. They went from 2% at June 30% to 1.7% will come back to this point in our usual discussion of Gbdcs financial results.
Slide eight shows two other key indicators and improving credit quality.
Low net realized losses and solid net unrealized gains. So this slide shows a bridge from Gbdcs $14.05 NAV per share as of 632. The 14 33 NAV per share as of 930, let's just quickly walk through the bridge and.
Adjusted and <unk> per share of 28 cents was in line with our dividend of 29 cents and consistent with prior quarter.
Net realized losses were very low at two cents per share and net unrealized gains were 36 cents per share.
These unrealized gains reflect a reversal of another portion of the unrealized losses that were and created the March quarter.
You've heard me say before that our top priority since calls it has been and and continues to be the minimize gbdcs permanent or realized credit losses, and the long run unrealized gains and losses wash out all that matters for lenders like us who tend to hold their loans to maturity is whether or not those loans get repaid so were pleased.
The reported in fiscal Q4, GBDC kept realized credit losses blow it and enjoyed another meeting full reversal of unrealized losses.
With that let me hand, the call over to Greg Robbins, He's can offer and update on our strategic response to covert 19th.
Thank you David.
Starting on slide.
You can see that GBDC continues to execute on its three key goals for navigating the cobot nights and crisis.
First proactive management of our highly diversified first lien senior secured investment portfolio.
Second continued optimization of our balance sheet.
And third capitalizing on attractive new investment opportunities.
Turning to slide 11, you'll recall that we described a three phase strategy per proactively managing our portfolio during COVID-19.
That entailed gathering information that.
Developing strategic plans and executing their strategic plans.
We're now in phase three of our strategy and we have been implementing game plans for each effect and borrower.
Working collaboratively with sponsors management teams and junior capital lenders.
This strategy has produced meaningful results.
Our team has executed more than 90 credit enhancing amendments.
We define a credit and enhancing amendment as one and bobbing and spread increase and prove documentation terms or an incremental equity infusion.
We have talked at length about the strong sponsor support for our portfolio companies.
He described one flavor of this since cope and began.
Answers have put and over $700 million of new equity into GBDC portfolio companies.
Slide 12 shows how GBDC export applied its balance sheet.
At September Thirtyth, GAAP leverage was 0.85 times, which is at the low end of our target range.
Regulatory leverage was 0.76 times.
She BDC had nearly $500 million of liquidity in the form of cash and borrowing capacity at quarter end.
We've also continued to take steps to optimize gbdcs debt capital structure.
During the quarter GBDC completed its fourth flexible low cost CLL.
We remain one of a handful of bdcs with consistent access this funding market on attractive terms even during covet.
And at September Thirtyth, GBDC received investment grade ratings from S&P and Fitch.
And price its debut issuance of $400 million unsecured bonds.
The bonds have an interest rate of 3.375% one of the lowest cost debut unsecured bond issuances and the BDC space.
GBDC use the proceeds primarily to pay down secured debt under its revolving credit facilities, which has significantly expanded gbdcs unencumbered asset base without materially changing gbdcs overall leverage.
As a result of these initiatives GBDC has more flexibility and firepower.
That flexibility and firepower put GBDC and a great position to capitalize on attractive opportunities.
And as we've discussed in prior quarters and illustrated on Slide 13, we believe GBDC has powerful competitive advantages, which will help us deliver premium shareholder returns going forward.
With that let me hand, it over to Jon Samuels to go through our financial results for the quarter ended September Thirtyth and more to tell truck.
Thanks Gregory.
Just as a reminder, a.
Please note that in addition to the GAAP financial measures and the Investor presentation. We're also providing certain non-GAAP measures.
We refer to those non-GAAP measures as adjusted measures and they seek to strip out the impact of the GC IC merger related purchase premium write off and amortization.
We describe those adjusted measures further in the appendix of the earnings presentation.
And we refer to them where appropriate as we think they are better indicators of our performance and are consistent with how we evaluate our own results.
So with that context, let's turn to slide 15, and I'm going to talk through the column on the right hand page right hand side of the page to discuss the quarter and more detail.
Adjusted net investment income per share or as we call. It income before credit losses for the September Thirtyth quarter was 28 cents.
Adjusted net realized and unrealized gain per share was 29 cents.
This compares to adjusted net realized and unrealized gain per share of 66 cents per the June thirtyth quarter.
The adjusted net realized and unrealized gain this quarter was primarily driven by the continued reversal of unrealized losses from the March quarter.
Adjusted earnings per share for the quarter ended September Thirtyth was 57 cents net.
This compares to and adjusted earnings per share for the June 30 quarter of 94 cents.
Our net asset value per share at September Thirtyth 2020 increased to $14.33.
Up from $14.05 as of June Thirtyth.
On September 29, we paid a quarterly distribution of 29 cents a share.
And finally on November 20-F, 2020, our board declared a quarterly distribution of 29 cents a share.
Payable on December Thirtyth 2020 to shareholders of record as of December 11, 2020.
The distribution is consistent with our historical cash distributions, which approximate 8% of NAV annually.
With that I'll hand, the call over to Ross to go through the quarterly results in more detail Ross.
Great. Thanks, John turning to slide 16. This slide highlights our total originations of 141.2 million and total exits and sales of investment of $172.4 million for the quarter ended June Thirtyth I'm, sorry September thirtyth.
As we noted on last quarters earnings call, we started to see a pickup and deal activity and that trend has continued into the current quarter.
Factoring and unrealized appreciation and other portfolio activity total investments at fair value decreased slightly by 8.3% or 12.2 million.
As of September Thirtyth, we had 41.6 million of Undrawn revolver commitments and 100.2 million of Undrawn commitments on delayed draw term loans.
These unfunded commitments are relatively small and the context of gbdcs balance sheet and liquidity position.
As shown in the table on the bottom of the weighted average rate of 7.6% and new investments and the weighted average spread over LIBOR or a new floating rate investments of 6.5% both increased from the prior quarter.
As a reminder of the weighted average interest rate and new investments is based on the contractual interest rate up and time of funding.
For variable rate loans, the contractual rate would be calculated using current LIBOR.
Spread over LIBOR and the impact of any LIBOR floor.
The top of slide 17 shows that Gbdcs portfolio remains highly diversified by obligor with an above average investment size of less than 40 basis points.
The bottom of the slide shows that our overall portfolio mix by investment type has remained consistent quarter over quarter with one stop loans continuing to represent our largest investment category at 82% of the portfolio.
Turn to slide 18, 97% of our investment portfolio remained and first lien senior secured floating rate loans and defensively positioned than what we believed to be resilient industries.
It is worth noting that we updated our industry classifications this quarter using the S&P 2018 industry codes.
And we think this change provides our investors with more detail and transparency about the industry exposure of our underlying portfolio relative to the industry classifications that we were using previously.
Turning to slide 19, this graph summarizes portfolio yields and net investment spreads for the quarter.
Focusing first on the light Blue line. This line represents the income yield or the actual amount earned on the investments.
Moving interest and fee income, but excluding the amortization of upfront origination fees and purchase price premium.
The income yield decreased by 30 basis points to 7.4% for the quarter per.
Primarily due to the continued decline and LIBOR.
The investment income yield or the dark Blue line, which includes the amortization of fees and discounts also decreased by 30 basis points to 7.8% during the quarter, primarily due to the decline and LIBOR.
Since our variable rate debt facilities are not subject to a LIBOR floor, our weighted average cost of debt for the OCC will do line decreased by 50 basis points to 2.7%.
As a result, our net investment spread or the Green line, which is the difference between the investment income yield and the weighted average cost of debt increased by 20 basis points to 5.1%.
Moving to the next to slide nonaccrual investment as a percentage of total debt investment at cost and fair value remain low and decreased to 2.4% and 1.7% respectively as of September Thirtyth.
During the quarter the number of non accrual investments decreased to nine investments as one portfolio company investment was restructured and returned to accrual status.
As David discussed and is open opening commentary as a result of stronger portfolio company performance per.
Percentage of investments rated three and our internal performance rating scale decreased to 19.7 per cent of the portfolio at fair value.
As of September Thirtyth.
As a reminder, independent valuation firms value at least 25% of our investments each quarter.
Slides 22, and 23 and provide further details on our balance sheet and income statement as of and for the three months ended September thirtyth.
Slide 24, the graph on the top summarizes our quarterly returns and equity over the past five years and the graph on the bottom summarizes our regular quarterly distributions as well as our special distributions over the same timeframe.
Turning to slide 25, this graph illustrates our long history of strong shareholder returns since our IPO.
Slide 26, summarizes our liquidity and I'm, sorry, and liquidity and investment capacity as of September Thirtyth and highlight the recent as net initiatives to further enhance the right side of our balance sheet.
As Gregory mentioned during the quarter, we issued $189 million notes through a term debt securitization and August 26.
Proceeds were used to redeem all outstanding notes issued in the 2014 that securitization and outstanding debentures issued by one of our SB I see subsidiaries Gcs C.
We also issued 400 million and unsecured notes on October 2nd.
The proceeds of which were used to pay down existing debt, including a full repayment of the revolving credit facility with Deutsche Bank.
Slide 27 summarizes the terms or debt facilities as of September thirtyth prior to the closing of the bond deal and October 2nd.
And lastly, slide 28 summarizes our long history of consistent distributions.
Most recently our board declared a distribution of 29 cents per share payable on December thirtyth to stockholders of record as of December 11th.
With that I'll turn it over and turn it back to David for some closing remarks.
Thanks, Ross so to sum up GBDC had a strong fiscal Q4 adjusted.
Adjusted net investment income remained consistent realized credit losses were very low and unrealized losses were substantial reflecting the continued reversal of unrealized losses that were incurred in the March quarter.
I mentioned in my opening comments that we think GBDC is well positioned I want to elaborate now and why we think thats the case.
First credit.
I think the Companys portfolio is nicely diversified its defensively positioned and we're poised to see more reversals of unrealized losses in coming quarters.
Second dry powder and balance sheet flexibility the company's GAAP leverage is low and 0.85 times debt to equity that's below our target liquidity is abundant and our capital base is strong and flexible.
Third the deal environment.
Now M&A now is muted because of covered related uncertainty, but we think that in 2021 conditions, you are going to improve and private equity firms you're going to accelerate their investment activity.
Consider that private equity has its largest reserve of dry powder ever it's over 1.5 trillion dollars. According to data from frequent to put that in context. The whole of the current syndicated loan market is one trillion.
So the continuing growth of private equity is and our judgment and near certainty and represents a large tailwind for sponsor finance firms like ourselves.
For competitive advantages in important ways. This could it impacted period has been playing to our strengths.
It's hard to form new.
Relationships, it's hard to form deep bonds over xoom. So there's a natural tendency per sponsors to want to work with lending partners. They already know.
For us that's and very helpful. Because we already have a lot of great relationships no as I've told this group before and more than 80% of our originations each year going back nearly a decade have been with a core group of about 200 sponsors that weve done multiple deals with.
Income and Caesar and similar story precluded the existing lender tended to be and the pole position when the company needed more capital or the company was getting sold from one sponsor to another sponsor.
Post close and we think it's proving even more true for the reasons that I just noted again, it's it's.
The difficulty of switching horses of doing due diligence of creating new relationships over zoom. All these things essentially the competitive advantages and barger establish lenders like all of capital.
Our other competitive advantages are also important including our large buy and hold capabilities our reputation for reliability, our market leadership and one stops our deep industry expertise.
Our ability to partner with sponsors on a wide range of different kinds of transactions larger small traditional senior one stops buy and hold your syndicated.
That's why our game plan for fiscal 21 is going to sound very familiar and stay humble and cautious.
And lean on these competitive advantages that have served us well.
Thank you our.
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[noise] [noise] once again, please press one for if he would like to ask a question.
First question is coming from the line of Robert Dodd with Raymond James James. Please go ahead.
Hi, guys and congratulations on the quarter on from multiple funds all first.
And what if I can with the termination of the Deutsche Bank facility. After you did the unsecured and that's will there be any acceleration.
Acceleration or accelerated expenses tied to that and the next quarter.
Ross I'm going to let you handle that.
No nothing material Robert Okay got it thank you.
And then just you know one of your comments and that David that you think you are poised to see additional and unrealized appreciation and the portfolio I mean, if I look at it you still got round numbers or a dollar per share depreciation and that given that the fair value and the portfolio.
And as cost right now what gives you the confidence that.
You're going to get back to school you know.
Is that all that youve covered some so far is that directly tied to the 700, but the sponsor someone unrelated and additional equity that sponsors have put in I mean are you is the appreciation expected future and appreciation and kind of contingent on private equity book.
And willing to put in more money or what what drives the confidence that you're going to get more of that back.
Sure So let's go back and but couldn't contact so so at 331 and we had write downs that were the result of multiple factors.
One was a degree of spread widening market wide spread widening.
That resulted from a coated related.
They did uncertainty and the second was and expectation that lockdowns and cobot impacts were going to negatively affect credit quite.
Quite apart from spread so should we think about fees, it's hard to disentangle. The two of them one from the other but there were two key elements to it one was when was spread related and one was credit related and here, we sit and it's what nine months later and and we've got a lot more information than the market had.
At that time about.
What the impact of Cove, its going to be and how companies, we're going to perform and two things that happened. One is that spreads have narrowed as the markets generally have.
Recovered significantly from the the.
March timeframe and the second is that.
And specific perspective, our portfolio we've seen.
And sleep better than expected performance and we talked about how.
We saw meaningful.
Meaningfully better than expected performance when we're talking about the June thirtyth quarter, and you've heard me again talk about and the September Thirtyth.
Why have we seen that better than expected performance will.
There are variety of reasons one one element is good underwriting a second element is a.
Management teams have been very adept at pivoting.
And cutting costs, finding new revenue sources.
Managing their companies to be meaningfully profitable and cash generative despite challenges.
The third element and you alluded to this is that sponsors have stepped up and we've seen very significant.
Support from sponsors sometimes in the form of advice and counsel, sometimes in the form of operating executives, who have been parachute in and sometimes in the form of of of equity infusions I think it's challenging to try to dissect.
Which degree of of.
Improvement and valuations unrealized gains stems from which should be different threads that I. Just described the good news Robert is that.
All of them are continuing with significant momentum what.
What do I mean by that well, we're continuing to see the economy.
Warm better than I expected, we're continuing to see.
Management teams deliver in a way that's better than expected, we're continuing to see sponsors be very supportive. So it's not one factor that gives me optimism. It's it's a variety of factors and I I don't want to make the sound like it's a guarantee its not a guarantee there there are many source.
Sales of uncertainty that we're all as investors and and as people dealing with today Cove its not.
Cured, we don't have a vaccine that's been widely administered.
We believe we've got a variety of different potential.
Potential sources of risk.
But as we sit here to day in November I would actually December one excuse me I would tell you that that I'm cautiously optimistic about our ability to continue to manage the portfolio to keep realized losses low and to sustain some continuing unrealized gains.
I appreciate that thank you and if I got one more quick question when.
And your comments.
And like you a lot more optimistic about 2021 than you. All you know we are now in December and as one month.
And the year left to go I mean, what's the the activity level clearly I think the audits and VAM pop into this this this fourth calendar quarter. I mean, what are you just seeing in terms of activity or is when you're talking about the M&A market being being muted in terms of from.
Closings is that activity.
People, just noting a hobby now and.
You know and less worried about.
Next is changing next year and things like that I mean is there anything going up this year versus things just filling open to to next year.
So.
And just let me put in context and.
In calendar Q2, very low activity.
Everybody was was responding to the surprise of coated and and there was very little new deal activity or any.
Anywhere even in sectors that were less could impact it.
In calendar Q3, we started to see some.
Some come back, particularly in less codes that impacted sectors, including software including.
Some some elements of health care.
And you can see and the reported results that we discuss today, a meaningfully higher level of new originations in the quarter ended September Thirtyth and the quarter ended June Thirtyth I anticipate that that the quarter ended December 31st we'll we'll continue that trend, we'll see more improvement, we'll see a higher.
Our level of originations in calendar Q4 them and.
And we saw in calendar Q3.
And we're seeing that more broadly in other words, it's not just software and a few niches within healthcare it's broader than that.
But if you compared activity in calendar Q4, 20 to calendar Q4, 19, a calendar Q4 20 is muted relative to calendar Q4, 90, and I think it's going to be into 2021 until we start seeing euro per year increases.
And.
M&A activity and new origination activity.
Got it and it's going to see that the key factor is going to be very simple, it's going to be.
Reduced uncertainty related to code.
Understood. Thank you.
Our next question is coming from the line of Ryan Lynch with KBW. Please go ahead.
Hey, good morning, Thanks for taking my questions first one and I just wanted to touch on you mentioned you had one default in the quarter and and restructuring was that Rubio restaurants, or what portfolio company was was that related sales.
So.
There.
It really does is a is a default it.
It is currently and in bankruptcy, we are working with the company and the sponsor and the restructuring.
Of the company, so that it can emerge from bankruptcy and and and do well again.
And I think it's as a company in good shape to be able to do that.
The other company that I think you're alluding to which is it.
Calendar Q3 event.
Is that a dental practice company called elite dental.
Where we also did a consensual restructuring with this sir.
As part of which we we reduced the amount of debt on the company and we took an equity stake.
Okay perfect.
Oh, and then you know.
You kind of touched on this earlier and and you mentioned in your presentation, but but yes.
Executing 90, plus you know credit enhancing amendments you know since co that with a focus on some of these most impacted Kobe and 19 impacted subsectors.
Just from a higher level. When you are looking to make you know a credit amendment to a company and I know every situation is general, but maybe could you just walk through kind of the priorities that you look at are you guys looking at to take it.
Higher spreads more fees tighter guardrails around your your covenants and what are you most wanting and return from the private equity sponsors.
And and.
Support those amendments.
It is hard to generalize I think you're you're.
Introduction and your questions right, it's hard to it's hard to give you a single answer to that question and arc, our key priority and.
I think I've been very clear about this our key priority is to minimize realized credit losses. So if you were to rank order the.
The things that are important to us that the first and most important of all things to us is help us avoid losing money.
Be beyond that it's very much situation specific and.
And and we we.
Book It all the facts and circumstances in a particular in a particular borrower and and assess what's most important to us and whats most important to the sponsor and and the company and and and seek to create a win win solution.
Sure Okay.
Okay.
And then and I just had one last one regarding the.
The unsecured notes issuance Ah first off congratulations on and on the investment grade rating.
And and that note issuance sellers, a very attractive rate just as you sit here today your balance sheet.
You know it looks to be and very good shape very low leverage.
And some pretty good diversity you know at this point, but just looking forward.
And it looks like you have about 20% of your liability structure and and unsecured notes.
Today.
Is that kind of a level that you guys want to run going forward or would you guys like to increase that ores and mortgage is going to be and have an opportunistic approach to wine view when the market opens up and and has very attractive rates you guys will look to tap the unsecured market from more.
And I I'd say somewhere between two and three so so yes, we would like over time to have a higher proportion of our debt in the form of unsecured notes and yes, we're going to be opportunistic and thoughtful about when we go to market because.
We think that cost and liabilities is a critical competitive advantage and we we think it's one of the most important things we can manage.
Okay.
That's all from me I appreciate the time today.
Our next question is from the line of John camera with Nike Capital. Please go ahead.
Hi, This is John and my question.
As a response to the fed talking about the LIBOR phase out yesterday, just curious when we might see your first.
Loan with a.
Non LIBOR benchmark and then.
Sort of related question, maybe you could just summarize from me the overall impact on your operations of of this change.
Sure so.
I think everybody on this call probably knows that.
There is an industry wide effort underway to shift from live work to a new.
Standard for floating rate loans don't is so for.
We served on the.
LSTA, that's the industry Trade association, the below and syndication trading Association BLS T.A.S Special Committee and on LIBOR transition.
And our expectation is that the the why were transitioned to sow for is.
Not going to be particularly eventful.
Internally, we have a number of working groups, making sure that we have the appropriate.
Systems and operational procedures to to make the transition.
I think that's well in hand.
So I think this is this is a bit like why two k. It requires a lot of work and preparation and then when it happens it's.
There is.
You almost forget.
That's a big deal because all of the preparation and work in anticipation of it made it not a big deal. So that's that's we're in the we're in the work and preparation phase right now.
Got it and so is there a timeline when you might originate and the first loan with the with the new benchmark.
Well I think that the loans are going to have a LIBOR language with what's called fall back and language, which which means.
Specified language that.
That shows what happens when LIBOR is removed.
And we're starting to see that build out which and credit agreements now.
Okay. Thank you.
And there are no further questions at this time.
Great well I want to thank everyone. Once again for tuning in for this quarters call look forward to speaking to you all next quarter and as always if you have any questions.
Before then please feel free to update any gross.
That does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect your line.
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