Q4 2021 First Eagle Alternative Capital BDC Inc Earnings Call
[music].
Good morning, and welcome to first Eagle Alternative Capital BDC, Inc. Earnings conference call for its fourth fiscal quarter.
Remember 31st 2021. It is my pleasure to turn the call over to Sabrina Rusnak Carlson of first Eagle are telling it gives capital BDC Inc. Ms. Rusnak Carlson you may begin.
Thank you operator, good morning, and thank you for joining US joining me on today's call are Chris <unk> President of first Eagle alternative credit Michelle handy kind of portfolios, you're underwriting for direct lending and John Wilson, Our Chief Accounting Officer and Treasurer before.
Before we begin please note that statements made on this call may constitute forward looking statements within the meaning of the security back in 1933 as amended and such.
Such statements reflect various assumptions by first Steve on alternative capital to BDC concerning anticipated results that are not guarantees of future performance and are subject to known and unknown.
Uncertainties and other factors that could cause actual results to differ materially from such statements.
The uncertainties and other factors are in some ways beyond management's control and include the factors included in the section entitled Risk factors in our most recent annual report on Form 10-K as updated by our quarterly report on Form 10-Q , and our periodic and other filings with the securities and exchange.
Commission.
Although we believe that the assumptions on which any forward looking statements are based on are reasonable.
Any of those assumptions could prove to be inaccurate and as a result, the forward looking statements based on those assumptions also could be incorrect.
You should not place undue reliance on these forward looking statements first these alternative capital BDC undertakes no duty.
Any forward looking statements made herein unless required by law.
All forward looking statements speak only as of the date of this call.
Our earnings announcement, and 10-K were released yesterday afternoon copies of which can be found on our website along with our Q4 earnings presentation that we may refer to during this call are.
A webcast replay of this call will be available until March 14th 2022, starting approximately two hours. After we conclude this morning.
To access the replay please visit our website at Www Dot F E AC BBC dot com with that I'll turn the call over to Chris.
Thanks, Sabrina and good morning, and thank you for joining us on our earnings call.
Today's call will provide an overview of our fourth quarter results some portfolio highlights and Michelle will share some market perspective, and then Jim will discuss the portfolio and financial results in more detail.
And again with a quarter or so.
First.
It was a productive quarter for the BDC and we feel good about the balance sheet and are proactively taking actions to increase net investment income now current key initiatives include the following further reduce our cost of debt.
Instruction of the financing package inside of Logan.
Increase our portfolio allocation to higher yielding ABL transactions and then further increase our portfolio diversification and reduce exposure to the legacy concentrated positions.
Now with a stable balance sheet, we can look forward to growing our net investment income, which we believe will assist the narrowing of the gap in our stock price and book value.
The fourth quarter net investment income was slightly lower than expectations at nine cents per share compared with our 10 cent per share dividend in this quarter of 11 <unk> per share.
In Q3.
We continue to focus on expanding our portfolio of investments through continued utilization of our leverage capacity. We concluded Q4 with consolidated leverage of one eight times up from 113 times at the end of Q3.
As you May recall last quarter, we increased our target leverage ratio to one 2% one three in light of our continued improvement in diversification and stabilization of our investment portfolio.
We made significant progress on deploying capital with $53 million par of new investments made during the quarter. Despite.
Despite the seasonality of origination activity in the first quarter typically being a slow we continue to believe we have the ability to move into our target leverage ratio of one two to one three of this year based on the deal pipeline and current lending environment.
During the quarter, we continued our progress of refinancing our balance sheet through a $42 million add on offering of our 5% notes due in 2026 and the redemption of our six and one eight notes due in 2023.
We ended the quarter with a net asset value of $6 34.
Down two 5% on a quarter over quarter basis, however, on a year over year basis net asset value was up 3%.
During the quarter, we had a net realized gain of $3 1 million or <unk> 10, a share the gain realized.
It was primarily comprised of the sale of our preferred stock and science building solutions and the sale of our common stock in Urology management associates.
The impact of this unrealized gain was offset by a change in unrealized depreciation net of tax of $7 8 million or 26 per share over half of this write down our 2014 was related to a non income producing second lien position in OEM and loadmaster.
<unk> write downs were not material on an individual investment basis and spread across a handful of names in the portfolio.
As we communicated on our Q3 earnings call, we exited <unk> at the end of October our debt investment was repaid at par and our equity position was acquired for cash with a one year earn out.
Even though it was one of the two remaining legacy concentrated positions that represented five 5% of our portfolio as of September and was the largest single position prior to that redemption.
Overall, the portfolio continues to perform well limit the continuing impact of the COVID-19 pandemic.
Revenue and EBITDA levels and liquidity for the most COVID-19 impacted businesses in the portfolio continue to improve and in many instances have returned to or exceeded pre COVID-19 levels.
Companies that are not fully rebounded continued to maintain good liquidity profile. There are no significant amendments to existing loans in Q4.
We added two new names to nonaccrual this quarter smart towards an <unk> with a combined par balance of $4 4 million. This represents less than 1% of the total portfolio based on fair value.
With regard to smart towards a provider of direct to consumer pre packaged international travel toward.
Primarily targeted retirees and seniors only the $1 $4 million second lien Pik only loan was placed on non accrual as a reminder, we received a second lien loan as part of the restructuring that took place at the end of 2020.
The first lien loan continues to perform.
While the Pik only loan was put on non accrual we still remain confident in the turnaround this business. Despite the delayed recovery due to omni chron.
<unk> a provider of digital transformation services and business solutions, primarily to the U S. Federal health care agencies underperformed and elected not to make it the principal and interest payments in December 2021.
Pursuing strategic alternatives and expect to exit this $3 $3 million position in the coming quarters.
With regard to OEM, we held our first lien position at par took a write down on the second lien non income producing position in Q4 under.
Under the plasma thermal transaction that we consummated at the end of 2020 to commercialize and distribute OEM technology to the market. The principal consideration was in the form of deferred payments for several years. These payments are contingent on certain milestones, including manual annual payments for the first four years that will be used to service our debt and cover certain operating costs OEM.
<unk> received its required minimum annual payment for 2021.
First eagle direct lending origination activity picked up in the fourth quarter, making 44, new investments across the entire platform totaling over $1 billion in Q4 alone. It was a strong year for the industry and it was no different for us with a direct lending platform deploying approximately $2 4 billion in assets across a 114 investment portfolio.
In 2021.
The CRT portfolio consistent invested in $33 2 million in 2014, new portfolio investments in Q4 alone and $172 million and 39, new investments for the full year.
The pace of deployment not only speaks to the overall level of deal activity in the market, but also the power of being part of the first Eagle direct lending lending platform.
<unk> was also made an additional $21 million of follow on investments, including rollover and delayed draw fundings during the quarter.
We were able to monetize to non income producing equity positions provide an additional $4 3 million in capital, which will be deployed into income producing assets.
Additionally, there were six debt prepayment at par.
Our direct lending pipeline remains strong and the BDC continues to benefit.
From the first eagle's approximately $5 billion direct lending platform the growth of the platform allows the BDC to hold a more diversified portfolio with a number of positions up from 45 in Q1 of 2018 to 76. This quarter, while also allowing first eagle to provide more capital to middle market companies.
You may recall in early 2021st Eagle's direct lending platform expanded its capacity to include asset based lending.
<unk> is another incremental solution foreseeable can provide the sponsors are middle market companies.
Cases, where a company needs liquidity, but may not be able to utilize the traditional cash flow lending option.
L deals generally also provide a higher yield relative to cash flow deals. We have found ABL deal spreads to be anywhere from a 150 to 300 basis points wider than the middle market cash flow deal.
We've added two new ABL deals to the quarter this quarter, one yourself and XL brands, while we are doing ABL deals for the direct lending platform. These are the first ABL deals for the BDC. They represent five 6% of the portfolio on a fair value basis, and we plan to grow this allocation to approximately 50% over time as we get repaid on lower yielding.
Assets.
On yourself as a holding company for intellectual property companies that licensed the Jessica Simpson brand, which is a signature lifestyle concept inspired and designed in collaboration with Jessica Simpson.
The company offers multiple product categories, including footwear apparel fragrance and fashion accessories, maternity apparel girls' clothing and home products.
Capital provided by first Eagle supported Jessica Simpson and her mother, Peanuts Simpson and buying back the company from sequential brands, which had acquired a majority stake in 2015.
XL brands as a brand management company engaged in the design production and marketing of apparel jewelry and other home goods and consumer products through interactive TV brick and mortar and e-commerce channels.
Capital provided by first Eagle supported the company and its operations and growth of the business.
First eagle's direct lending platform has remained robust and we expect it to continue to provide us with attractive investment opportunities.
We continue to be very selective about where we deploy capital and are mindful of the macro environment and on our investment committee decisions.
To that end, we have invited Michelle handy head of portfolio and underwriting of the direct lending platform to provide a brief update on the market.
Joe.
Okay.
Thanks, Chris and good morning in light of the recent public market volatility stemming from the Russia, Ukraine conflict wanted to proactively share our perspective on the impact on the BDC and private credit market first in short the impact of the BDC should be limited as you know we invest primarily in the U S businesses that has no direct.
Closure to eastern European markets, However, geopolitical events such as these do cause market volatility, resulting from fluctuations in the cost of capital. Additionally, inflation and ongoing supply chain disruption could be exacerbated.
But Ah Bac, we typically invest in high free cash flow low capex business models in certain industry, such as healthcare technology business services and financial services.
Industry tend to be less susceptible to certain inflationary factors such as increases in raw material prices and supply chain disruption.
Further our borrowers are modestly levered and as a result increases in interest rates are likely to be less impactful.
Biggest risk to our <unk> to our portfolio is potential wage increases, which we are closely monitoring we feel our portfolio is well positioned with a primarily first lien indefinitely and conservative leverage.
Despite geo.
Political environment, we have a positive outlook for the overall middle market lending environment.
Nation activity remains robust and deal quality remains rising.
Rising interest rate environments can be good for floating rate credit.
There is price discovery in the market and we anticipate spreads could widen we will continue to closely monitor the economic environment and we will remain disciplined in our investment approach.
In summary, we believe that the investment environment remains favorable from a fundamental credit standpoint.
And that a conservative portfolio of floating rate senior secured loans is a good stable asset class during periods of public market volatility, especially when the volatility is not directly impacting the fundamentals of the underlying business.
Thank you Michelle for sharing those perspectives, having a pulse on the current market environment to help us better understand the opportunities and risks today is imperative ultimately our goal is to continue to diversify our investment approach as we grow the BDC portfolio in 2022 and beyond with that I'll turn the call over to Jen.
Thanks, Chris and good morning, everyone.
First I'd like to start off with some investment and portfolio highlights.
Chris mentioned, we added at this quarter with 14, new and several follow on investments totaling $53 3 million at a blended yield of 7%. Additionally, we had fixed notable realizations through the repayment of our first lien positions Igloo Urology management associates.
S G X L brands and trades, III, and our subordinated debt position in TNK markets, which generated $50 $8 million in cash proceeds.
And Additionally, we sold our series a preferred equity and science building installations, and our common equity in Urology management associates.
Generating an additional $4 3 million of cash proceeds.
As of December 31, our portfolio was valued at $392 1 million down slightly from $402 million at the end of Q3. It was invested 76% in first lien senior secured debt and 19% in the Logan JV as a reminder, the Logan JV is 99% invested in first lien.
Asset.
The remaining 5% of the Bdc's portfolio was held in second lien debt and other non income producing and equity holdings, including our restructured equity like second lien investment in OEM.
The weighted average yield on the debt and income producing portfolio based on cost and including Logan was six 5% in Q4. This was down slightly from the prior quarter, primarily driven by the repayment of our investment in igloo, which paid interest at 11, 5%.
Subsequent redeployment into lower yielding asset.
As Chris noted, we placed two additional investment or attack and the second lien Pik position, a smart choice on non accrual during Q4 total non accruals as a percentage of our portfolio at fair value and it costs were two 3% and four 4% respectively.
Now I'd like to address the financials for the fourth quarter. During Q4, we recognized $8 1 million of investment income primarily from interest and dividends.
Interest income decreased approximately 249000 from Q3 to $6 million from Q4. The decrease was primarily driven by the repayment of igloo, which I previously discussed.
And then the redeployment of the proceeds into lower yielding assets included in the $6 million is 367000 related to accelerated amortization of OID.
Dividend income from the Logan JV was relatively flat quarter over quarter at $1 7 million in other income of 355000 was relatively flat as well.
Total expenses for the quarter were $5 3 million up slightly from Q3.
Driver of the increase was $152000 increase in interest and fees on borrowings during the quarter.
This was primarily due to.
Carrying the additional add on.
Of our 200 of our 2026 notes.
That we held for 30 day period before we were able to redeem our 2023 notes.
With respect to other items below the net investment income line. The company had a net realized gain for Q4 $3 1 million. This included gains on the disposition of our series a preferred stock and science building solutions and common stock of Urology management assets.
As well as a loss on the extinguishment of debt in connection with the redemption of our 2023 notes.
From a leverage perspective, we ended Q4 with a debt to equity ratio of one eight times, we had ample borrowing capacity on our credit facility to continue to grow and increase leverage towards our target of one two to one three times.
In November we closed on a $42 $6 million public debt offering add onto our 5% notes due 2026 <unk>.
The new bonds were issued at a price of 101% of the aggregate principal amount of the notes issued resulting in a yield to maturity of approximately four 5%.
Proceeds from the issuance in addition to funds from our revolving credit facility were used to redeem our six and then 8% 2023 bonds at par the.
The refinancing resulted in the loss on the extinguishment of debt equal to the difference between the amount we paid to redeem the bonds such as par and the carrying value of the bonds, which includes the impact of the unamortized deferred financing cost of the bond with the redemption of the 2023 bonds, we were able to reduce our weighted average cost of debt to 41, 9%.
As of December 31. This is a 39 basis point decrease from September 30, and 102006 basis point decrease from December 31, 2020, we continue to evaluate opportunities to further reduce our cost of financing.
That I would like to turn the call back over to Chris.
Overall this was another productive quarter for the BDC, we further reduced our cost of debt liabilities.
We are seeking to work with our joint venture partner in the Logan joint venture to restructure the existing financing.
To increase our portfolio allocation to higher yielding ABL transactions and further increased portfolio diversification and reduce exposure to the legacy concentrated investments I'd now like to turn the call back to the operator to open it up for questions operator.
Thank you, thank you and ladies and gentlemen, if you have a question. Please press star one on your telephone to withdraw your question press the pound or hash key once again that is star. One if you have a question one moment, while we compile the Q&A roster.
Our first question is from Lee Cooperman with Omega family Office. Your line is open. Thank you I appreciate it let me say what I've said before very few managers have stood behind the product and the way that you guys have.
Honestly very few managers have done the poor job you or your predecessors have done and I realize you have to fix it up mode.
We went public in 2010 and 13, we had an underwriting or free good 2012 was <unk> nine and 2013, we show a more stock at $14 62, and basically are we know where you are today $4.45.
I would say that the market I think has quadrupled in the same period of time.
<unk> showing at 671% of book value.
<unk>, which is a result of the poultry.
6% return on equity so now for the questions. After this statement given the way you want to run the business what is it realistic return on equity expectation.
When can it likely be achieved I'll give you all my questions are one shot number one number two is the manager first eagle willing to do the right thing for shareholders emerged at company and forego the magic insurance payment.
We are simply the relevancy with a market cap of $335 million Nobody's interested in this except me and a few other people.
When are we likely see a dividend increase which is what will be necessary to get you start to get closer to book value.
And then you've addressed loan quality I guess, where we've had a couple of non accruals is lift of 1% of the portfolio. So it shouldn't be comfortable your loan quality.
I'll answer the first question myself.
It's krish.
Lee Thanks I appreciate the question.
Let me walk you through my observations and maybe give you a sense of why im actually optimistic.
First as it relates to the <unk> versus the <unk>.
Basically around the message that we had another $80000 of income we would would've hernan <unk> on the earnings release I can assure you I would've not personally bought shares in December .
Worried that we weren't going to cover the <unk>.
Second as it relates to the NAV decreased decrease the majority of that was related to two securities that were already not earnings. So it's not affecting my earnings potential because we currently earn zero on them already.
We talked on OEM a bit in the script, but I'll provide a bit more color. This is our partnership with this is our first year of our partnership with plasma plasma therapy. The first you had some growing pains and now those have been resolved and we feel good about our prospects in 2022 with that said, we can't ignore the fact that 2021 was behind expectations, hence the markdown on the balance sheet.
Now next if you look at the two non accruals the first with smart tours. As a reminder, this is the investment restructured as part of Covid. The management team's done an excellent job navigating a very difficult travel market and while bookings from rebounding nicely. There there was a step back with Omnicom and now we have the Russian invasion of Ukraine, We're still very optimistic about this investment in the long run but the rebound.
The above will be delayed for a period of time as for oral Tech. This is an investment that struggled since close and we're looking to exit as soon as possible. The reason I highlight this now is with our new portfolio guidelines. This investment capital at risk for <unk> is $3 $3 million and put it on non accrual is not a material hit to our earnings under the past strategy, that's kind of been a 25%.
$30 million investment, which has likely resulted in significant pressure on our dividends.
My point is now that we have an asset side of the balance sheet properly set and we can manage a diversified portfolio much easier given the risk in the portfolio is much lower highly diversified 95% first lien.
Which brings me back to the first comments I made in the earnings call. We're finally in a position to go on the offense and work to increase NII. We've already we've done our bond deal that a substantial savings we're actively moving to reduce cost debt in both the <unk> balance sheet and the Logan joint venture.
Prior to the Russian invasion by expectations that the debt reductions that I just referenced would've increased NII between 20 and 30%. My hope was to have this done prior to the call today, but market factors have delayed that to the extent, we're able to execute we will be back in front of our investors with updated guidance. We recognize the status quo is not an option and have said at the start I'm optimistic we can actually start to see.
The growth in our portfolio and growth in NII.
I guess the question is what is it realistic return on equity for the shareholders based upon how you want to run the company.
Yes, if I can get the balance sheet.
If I can increase in NII by 20% to 30%, So 10 sense today and it will move it to 12 to 13 and.
Timetable for that.
As did the market to stabilize.
I wish I could tell you today that soon as I know, we will we will we will tell you we will and we will come back and provide new guidance I think I think you're running at a time basically Lee.
Lee.
I don't I don't disagree with your statement, we're running as fast as we can the good news is for one side as I said upfront. We're on the offense now the balance sheet is set we can reduce our cost of liabilities and we can now start focusing on growing the NII, which should move.
Stock price closer to book value.
Got you well I'm rooting for you you know that.
I'm rooting for it to where the two largest shareholders. So.
We're 100% aligned.
Good luck. Thank you. Thank you Sir.
Thank you. Our next question comes from Paul Johnson with <unk>. Your line is open.
Yes, good morning, guys. Thanks for taking my questions.
On the ABL segment that we talked about this morning.
I'm, just curious where is that being sourced from in the first eagle platform.
Is it going to have any sort of particular focus it sounds like the first deals you did were more retail focus is that going to be when we can kind of expect from those deals and also what sort of yields do you.
Could we expect to see from that.
No I appreciate the questions.
We did a team lift out in July of 2020.
Larry class on Liza gallium.
Both of them had been in the industry for a number of years have known in both personally and professionally.
I have attempted to have them as part of the platform for a for a for a few few times. It's whenever you can get a transaction done.
We're happy to have them here on board. So it's just it's an added team as part of the direct lending platform.
First time transactions, we put in our retail, but they have they have the ability to do non retail deals as well.
So I wouldn't expect necessarily has to be concentrated there regardless of what the factor that they invest in it as a collateral based loan meaning that we're only going in on our balance sheet, where we can carve out specific collateral so while there might be a slight higher probability of default loss given default on any of these investments should be should be de minimis.
Average spreads range on these investments from anywhere as well as <unk>.
<unk> plus 600 to 652 is why does 800 to 850.
We're just now starting to leg it.
As I said I think we have about 5% of the book an ABL right now our goal is to move that to 15 over time.
Great I appreciate that.
Good color.
<unk>.
Segue from there.
The pipeline that you guys are looking at today.
I think the portfolio yield today is six 5%.
A few investments quarter to date this quarter around the same yield.
I mean do you have a general idea of what sort of your pipeline is an incentive the yield on those assets.
Yes, I think the pipeline yield is I'd say right now it's flat I think theres, a little price discovery going on and just given the volatility in the market.
Too early to tell.
What the new level will be I can assure you, it's not going to be lower if anything it will be higher.
The last couple of term sheet, we've put out we've tried to move pricing, maybe 50 50 basis points, we'll see if that lance, but I'd describe the pricing environment is stable consistent what we've done in the past with potentially some upside to the extent there's continued volatility in the market.
Okay.
Thanks for that.
Then on the JV the Logan JV.
I believe the cost of funding within that JV is L plus two and a half correct me if I'm wrong there.
I mean, I know you said, you're working on potentially refinancing the debt within there.
Where do you think that could realistically be brought down incrementally.
And then also with the JV itself.
I think.
I believe the leverages around one five or one six times I mean could that be increased whats happening with the capital are you guys reinvesting within the JV do you intend to grow the JV anymore.
Color there would be great yes.
Yes, no. It's a great question and I appreciate it.
Not in a position right now given that we're pursuing a few different activities to point, an exact direction that we're going I'll, just say that we have the ability to both lower cost and increased leverage to this event, we think it's prudent and that'll be a key driver into the reference I made to Lee's question.
And we're able to execute what we think we want to execute it.
You can see that nice pop in NII like I said pro forma than that 20% to 30% increase range.
Okay, and one or two more.
On OEM group the write down there was that the bigger.
It sounds like that was the main driver of depreciation or correct me if I'm wrong and then just an update on that company I know thats been a company. That's been marked down every other quarter. So is that being impacted by the semiconductor supply chain issues that.
Globally, we're facing at the moment.
Yes, so just as a reminder, OEM has been an investment in our portfolio since 2010.
We've owned the entire capital structure of the debt and the equity for a significant period of time, we finally positioned the business in such a way where we could develop a technology.
And some.
Great.
Engineering capabilities that we think are marketable just given the size of the investment we were not comfortable making the investment to develop a sales force ourselves. So we obviously partner with plasma firm, which specializes in distribution.
These are two private companies I'm, probably not going to go into too much detail on on what the issues were I think as I said in my comments, we just we categorized it simply just growing pains.
Working with the two businesses together for the first year. We do believe those are those pains have been resolved and we're optimistic for 2022, but reflected in the mark down and Youre right. It was the largest markdown on the book again, if not income, earning so it's not going to hurt my NII.
It was related to reflect in the 2021 was softer than we than we originally underwrote.
But again, we think those issues are behind us and we look forward to a good 2022 on that name.
Okay I appreciate that last question.
Forgive me if you already mentioned this on the call I just didn't catch it but for your current share repurchase program.
You bought back some shares this quarter, what sort of capacity do you guys have remaining under that under that program.
Yes, we do have we do have a program in place I'll, let I'll, let deferred agenda Washington.
All right Jim.
No. That's fine. So we were authorized for $10 million through December 31, we had just implemented that can be five so we had repurchased approximately 152000 and so I would say that we have about $9 5 million we've been out in the market.
We will continue with.
<unk> five one plan that we've got plenty of capacity.
This repurchase plan right now.
Okay.
Sure.
All the questions for me today. Thanks.
Thank you Sir.
Thank you and as a reminder, if you have a question. Please press star one to get in the queue.
Our next question is from Matt Jansen with Raymond James. Please go ahead.
The pay all morning, and appreciate you taking my questions. Chris I think you said you expect to exit the nonaccrual and <unk> should we expect any modest markdown versus the 12 31 Mark.
Yeah.
If you're referencing.
Yes, yes, there can be a further markdown on that position yes.
Got it.
Maybe following up on <unk>.
Clear, though I just want a therapy.
A very small position so even if there is a further markdown its not its not going to have a material move to our book value.
Fair enough.
Maybe following up on Paul's question on the ABL opportunity do you have a longer term target of what you think the ABL opportunity could represent as a percent of the total portfolio.
Our target right now is 15, 2%, we may move that to 20, depending on how the portfolio performs and where we sit with our with our lenders and our ability to grow the borrowing base.
Got it.
Last one for me on leverage so I think as we sat and <unk>. Chris You said you expected to hit that one to low end of the target range by <unk> <unk>. So a little short this quarter was that just a function of unexpected repays flowing through and then at the secondary question that we're in 2022 would you expect kind of to get into that low end of.
The target range.
Yes, <unk> was a very sizable position that came in late in the quarter and it was about 30.
Five 5% of the book So that came in they came back late so we would have missed our guidance by a small amount of.
Our pipeline is robust like I said last year, we did over $2 $4 billion in origination.
Pressure point.
It's not on the pipeline, it's more just in getting the balance sheet right for us to leg into that leverage so I would like to push through that one point to 1.3 as soon as we can.
Q1 has been a bit slow obviously right now with some uncertainty in the market.
A lot of price discovery, So I'd say, there's a pause on new business, but.
We anticipate that to stabilize and we anticipate to be writing new loans here in the near term and well I guess that will be in that one two to one three in short order.
Got it that's it for me I appreciate the time this morning.
Thank you Sir.
Thank you and I'm not showing any further questions in the queue.
Alright.
Thank you operator, we participated we appreciate the support of our shareholders and look forward to providing you with an update in the spring for our Q1 2022 results feel free to reach out to Jennifer myself. If you have any additional questions before them.
Thank you, ladies and gentlemen, with dad, we conclude today's program. Thank you for your participation and you may now disconnect.
Okay hang up.
Yes.
Okay.
Okay.
Thank you.
Sure.
Okay.
[music] growth.
Okay.
Yes.
[music].