Q1 2022 BlackRock TCP Capital Corp Earnings Call
Ladies and gentlemen, good afternoon, welcome everyone to Blackrock TCP Capital Corp, first quarter 2022 earnings Conference call. Today's conference call is being recorded for replay purposes during the.
The presentation, all participants will be in a listen only mode. A question and answer session will follow the Companys formal remarks to ask a question. Please press the star key followed by the digit one I will repeat these instructions before we begin the Q&A session and now I would like to turn the call over to Katie Mcglynn director of the Blackrock.
C P capital core Investor Relations team Katy. Please proceed.
Thank you for me before I begin I'll note that this conference call may contain forward looking statements based on the estimates and assumptions of management at the time of such statements and are not guarantees of future performance forward looking statements involve risks and uncertainties and actual results could differ materially from those projected any forward looking.
Statements made on this call are made as of today and are subject to change without notice.
Earlier today, we issued our earnings release for the first quarter ended March 31st 2022, We also posted a supplemental earnings presentation to our website at TCP capital Dotcom W.
A slide presentation, which we will refer to on today's call. Please click on the Investor Relations link and select events and presentations.
These documents should be reviewed in conjunction with the company's Form 10-Q, which was filed with the SEC earlier today.
I'll now turn the call over to our chairman and CEO Raj Vig.
Thanks, Katie and thank you all for joining us today for <unk> first quarter 2022 earnings call.
I'll begin today's call with a few comments on the market environment as well as highlights from our first quarter results.
Then turn the call over to our President and Chief operating Officer, Phil Tseng, who will provide an update on our portfolio and investment activity.
Our CFO , Eric <unk> will review, our financial results as well as our capital and liquidity positioning in greater detail.
I will then conclude with a few closing remarks before we take your questions.
Turning to the current environment. Despite notable volatility in the public markets direct lending continues to provide a reliable source of financing for a wide spectrum of middle market companies.
We continue to work with a broad range of businesses as they seek to finance growth.
Acquisitions are simply refinance their existing debt with typically greater earnings power.
As such we believe that our shareholders continue to benefit from our efforts and expertise.
Our investments deliver a premium source of predictable and mainly variable rate interest income at an attractive risk reward levels.
I would note that the first quarter of the year tends to have a cyclically lower level of investment activity as it did this quarter. However, our team reviewed a substantial number of opportunities and selectively deploy capital on favorable terms.
As you all know the last few years since the initial onset of the COVID-19 pandemic had been challenging on many levels.
As I look back a little over two years from the depth of the Covid I'm exceedingly proud of the results we delivered for our shareholders in this challenging environment.
Non accruals throughout the pandemic have remained below 1% of the portfolio at fair value and below one 8% of cost.
We've also delivered a 28, 5% ROE as since you started the pandemic, including net realized and unrealized gains on the portfolio over this period.
These results are a testament to the hard work and dedication of our team and I'm very appreciative of their significant effort.
Let's now turn to our review of our first quarter performance discuss a few highlights from the quarter.
First we delivered strong net investment income of 34 per share, which exceeded our first quarter dividend of <unk> 30 per share, resulting in a dividend coverage ratio of 113%.
This extends our record of continuous dividend coverage throughout our 10 years as a public company.
Fourth our board of directors declared a second quarter 2022 dividend <unk> 30 per share payable on June 30 to shareholders of record of June 16th.
Second our portfolio credit quality remains very strong.
As of March 31, non accruals declined to just 3% of the portfolio at fair value with no not no new non accruals for the quarter.
Excellent credit quality as a function of our disciplined and consistent underwriting along with stable or improving profitability across many of our portfolio companies. Both during the pandemic and in the post pandemic period.
Third as Phil will discuss in more detail the strength of our underwriting platform continued to drive significant investment opportunities that resulted in a total of $112 million deployed 11 investments during the first quarter.
This is driven by the strength of our vendor relationships, we develop with a broad variety of deal sources over our more than two decades indirect lending as.
As well as the extensive resources and relationships of the broader Blackrock platform that we benefit from.
I would note that although the direct lending market remains robust.
Market companies continued to opportunistically refinance their existing debt.
This was the case with a number of our portfolio of companies in the first quarter as we experienced a $153 million of sales and repayments, resulting in net sales and repayments of $41 million.
Fourth Fitch reaffirmed our investment grade rating with a stable outlook and TCP C continues to be investment grade rated by both Moody's and Fitch.
During the quarter, we continued to exceed our total return hurdle.
As a reminder, tcp's he maintains a 7% hurdle rate based on total returns, including a realized and unrealized gains and losses and with a cumulative look back.
Since 2012, when we took Tcp's Republic, we have generated a 10, 8% annualized return on invested assets and a total annualized cash return of nine 7%.
We believe that this is at the higher end of our peer group demonstrating our ability to consistently identify attractive opportunities at premium yields.
We did see a slight decline in any of the of <unk>, 6% during the first quarter, which was driven by wider credit spreads that resulted in minor net unrealized losses on our existing portfolio.
These were partially offset by net investment income in excess of our dividend.
I'd now like to spend a few minutes to provide a portfolio overview.
Quarter end, our portfolio had a fair market value of approximately $1 $8 billion.
88% of our investments were senior secured debt and are spread across a wide range of industries, providing portfolio diversity and minimizing concentration risks are.
Our portfolio continues to be weighted towards companies with established businesses business models and less cyclical industries.
At quarter end the portfolio was made up of investments in 119 companies now.
As the chart on the left side of slide seven of the presentation illustrates our recurring income is distributed broadly across our portfolio and is not reliant on income from any one company in fact, nearly 90% of the portfolio companies each contribute less than 2% to our recurring income.
84% of our debt investments are first lien, providing significant downside protection and 95% of our debt investments are floating rate positioning us well for a rising rate rising rate environment. We are currently at.
I'll now turn it over to Phil to discuss our investment activity and portfolio positioning.
Thanks Raj.
Moving onto our investment activity.
So while the number of direct lending managers has grown in recent years, we remain one of the small group of reputable lenders capable of providing complete and customized financing solutions.
As such we emphasize transactions, where we act as a lead Kobe or small part or part small club of lenders negotiating deal terms and conditions that we believe provide downside protection on our investments.
Also of note our team is generally finding opportunities to invest at higher spreads than the average middle market transaction.
This is a result of our extensive longstanding relationships developed over the past two decades, having delivered for borrowers and deal sources up over a thousand transactions.
Across the U S private capital platform.
In addition, our industry specialization, which our borrowers certainly value enables us to assess and underwrite risk well.
We source an increasingly large set of investment opportunities from multiple channels and while we've been actively deploying capital in this market, we maintain a very disciplined approach to our investments.
We regularly review the substantial number of opportunities in our pipeline, but we ended up investing in only a small percentage of them.
Market transaction levels were beat it at the start of the year relative to the record levels of activity in the fourth quarter of last year, but momentum picked up again towards the end of the first quarter.
<unk> invested $112 million in the first quarter, primarily in 11 investments, including loans to eight new portfolio companies and three existing ones.
Follow on investments in existing holdings also continue to be an important source of opportunity for us accounting for nearly 40% of our total investments over the past 12 months.
Incumbency has become an important factor in sourcing opportunities and we believe that advantage will continue for us.
Certainly from a risk perspective. These are companies, we already know and understand well and therefore are quite comfortable making these follow on investments.
As we analyze new investment opportunities, we emphasize seniority in the capital structure portfolio diversity and transactions, where we can act as leader Kobe.
Our largest new investment during the first quarter was our first lien delayed draw term loan to elevate brands.
Consolidated small to medium sized brands that sell primarily through third.
Third party platform.
Our team identified the opportunity in consolidators of Amazon Third party sellers early on leveraging our broader consumer and retail industry expertise.
As a result, we have often been presented opportunities in this space early allowing us to choose what we view are the highest quality companies in this space.
Elevate specifically represented an opportunity to invest in a company with a strong management team and significant growth prospects with a loan structure that provides the appropriate downside protection and upside through warrants.
The second largest investment in the quarter was the first lien term loan to $40 40.
The largest provider recycled wood pellet solutions to the North American market.
The company has demonstrated meaningful earnings growth through organic growth initiatives as well as acquisition and is benefiting from several industry tailwind, including the continued expansion of e-commerce.
Blackrock funds, including TCP see provided the entire incremental term loan financing, which will support the company's near term M&A plans.
As Raj mentioned, new investments in the first quarter were offset by dispositions and repayments totaling $153 million.
As we had several successful exits in paydowns.
These included the payoff of our loans to financial Force Anne Klein, Kenneth Cole and spark networks.
The overall effective yield on our debt portfolio was nine 1% as of March 31.
Investments in new portfolio companies during the quarter had a weighted average effective yield of eight 4%.
The weighted average effective yield on exited positions with nine 2%.
Given that 95% of our debt portfolio is floating rate and the majority of our outstanding liabilities are fixed rate.
We believe we're well positioned as rates continue to rise.
In fact, a further increase in base rates of approximately 60 basis points from the levels at March 31 would take substantially all of our floating rate loans above their floors and start to add meaningfully to our net investment income and those large reset at the end of the quarter.
We continue to invest selectively maintaining our underwriting discipline and being mindful of the inflation environment. We're in.
We focus on companies with established business models that are well positioned to succeed through cycles.
And our pipeline today is healthy and we are sourcing opportunities across multiple sectors.
The yield on investments in our pipeline are generally in line with our current portfolio and to date, we've had limited prepayment income in the second quarter.
Let me now turn it over to Eric to walk through our financial results as well as our capital and liquidity positioning.
Thank you Bill.
Turning to our financial results for the first quarter.
We generated net investment income of 34 cents per share.
Which exceeded our dividend of <unk> 30 per share.
We're committed to paying a sustainable dividend that is fully covered by net investment income.
We have done consistently every quarter for the last 10 years.
Today as Raj noted, we declared a second quarter dividend of <unk> 30 per share.
Investment income for the first quarter was 73 per share.
This included recurring cash interest of 60.
Recurring discount and fee amortization of <unk> and.
And Pik income of <unk>.
Notably our Pik income remains at its lowest level in more than three years.
Investment income also included three cents of dividend income and <unk> from accelerated OID and exit fees.
As a reminder, our income recognition follows our conservative policy of generally amortizing upfront economics over the life of an investment rather than recognizing all of it at the time the investment is made.
Operating expenses for the first quarter were 32 per share.
It included interest and other debt expenses 16 per share.
Incentive fees in the quarter totaled $4 2 million or seven cents per share.
Our net increasing that ask us for the quarter was $12 $4 million or 22 per share.
Which included net unrealized losses of $7 2 million or <unk> 13 per share.
Unrealized losses during the first quarter, primarily reflecting mark to market adjustments across the portfolio.
As a result of wider market spreads during the period.
As well as a $3 7 million reversal of previously recognized unrealized gain.
Investment in core entertainment.
These were partially offset by a $3 $6 million increase in the valley for investment 36th Street.
At $3 $4 million increase in racer group.
And at $2 $2 million increase in their value for an investment in Thailand.
Subsequent to quarter end, we fully exited our investment in core entertainment.
<unk>, we managed through several challenges.
Optimally, we successfully exited our investment following the company's acquisition by Sony.
Core is a great example of how we leverage our team special situations expertise to help navigate challenged credits toward a favorable outcome.
Substantially all of our investments are valued every quarter using prices provided by independent third party sources.
These include quotation services and independent valuation services.
And our process is also subject to rigorous oversight.
Including back testing every disposition against our valuation.
Our credit quality remains strong with non accrual loans at quarter end limit it to two portfolio companies that represent just 30 basis points of the portfolio at fair value and 90 basis points at cost.
Now turning to our liquidity.
We ended the quarter with total liquidity of $245 million relative to our total investments of $1 $8 billion.
This included available leverage of $201 million in cash of $44 million.
Unfunded loan commitments to portfolio companies at quarter end equaled seven 5% of total investments or approximately $134 million.
Which only 29 million revolver commitments.
Our diverse and flexible leverage program includes two low cost credit facilities two.
Two unsecured note issuances and an SBA program.
As Raj mentioned, our unsecured debt continues to be investment grade rated by both Moody's and Fitch and in March Fitch reaffirmed their investment grade rating with a stable outlook.
Additionally, given the modest size of each of our debt issuances, we are not overly reliant on any single source of financing and our maturity remained well ladder.
Combined the weighted average interest rate on our outstanding liabilities decreased to 291% from $3 two 6% at the end of 2021.
Now I'll turn the call back over to Raj.
Thanks, Eric to conclude we delivered another strong quarter of results and are confident in our team's ability to generate attractive ongoing risk adjusted returns.
For our shareholders in this complex environment, we have.
Noted the increase in volatility in the public markets and started the year driven in part by uncertainty around rates inflation concerns and the war in Ukraine.
In periods of increased volatility we are reminded of the benefits of private credit and direct lending investments in particular, which have historically performed well throughout economic cycles.
Our loans are typically at the top of this cap the top of the capital stack, often with collateral protections and with significant equity <unk> subordinated capital structures below our investment.
Additionally, we structure, our loans with meaningful financial maintenance covenants, and our portfolio remains well diversified by issuer and industry.
In this environment, we are leveraging our team's competitive advantages, including 23 years of experience lending to middle market companies.
Our long track record combined with our industry specialization make us a unique and valuable partner to our borrowers and deal sponsors and.
In addition, our experience and structuring loans that are downside protected has helped contribute to our exceptional long term performance.
With that operator, please open the call for questions.
Absolutely.
Ask a question. Please press the star key followed by the digit Blaine.
Our first question is from Kevin <unk> with JMP Securities.
Your line is open. Please proceed.
Hi, good morning, and thank you for taking my questions.
First question relates to leverage right now youre at net regulatory leverage of one two times, which is in the middle of your range over the past year.
Considering the current environment are you right, where you want to be from a leverage standpoint or would you be comfortable taking leverage up a bit from here given your conservative portfolio mix.
Yeah. Thank you Kevin for the question.
I can I can kick it off and others can comment I think.
You know first and foremost we really are cognizant of maintaining the investment grade rating.
In all environments, particularly as rates are going up we think that's an important.
Vintage.
For financing purposes, so where are they where are they sort of have their implied cap is something we're cognizant of it may move around based on their perception of the space.
But I do think that gives us a little more room from where we are today.
Eric also mentioned some of the flexibility you will look to maintain around the undrawn commitments.
And in the market you know there really has become part of the of.
Being able to be competitive competitively positioned to provide undrawn capacity.
Very much become the norm.
We're operating in so we're cognizant of.
Maintaining the rating and the Levered, but also that capacity just to fund as those needs come up.
I do think we have a little more room, and we're very judicious on where we're deploying the capital.
Within that context, but hopefully that gives you a little more color around around your question.
Yeah.
Right.
Sure I think yeah I shouldn't have.
We really don't manage to a target level of leverage.
Does the lack of flexibility we like to look at deals one at a time were very comfortable looking or letting the portfolio shrinks like we did this quarter.
But we're not going on.
Just deploy it for the sake of the plane.
That makes sense and then just one follow up touching on prepayments what visibility do you have around the cadence of prepayments.
Sorry can you repeat what would you like do we have around the cadence of prepayments.
Yes, very little.
I think I think you just look if you look at the last two quarters.
You saw very little in the last quarter and pick up in this quarter.
And I'd like to say, we could average out over a long period and can give you a sense.
That's more recurring.
But.
The drivers of prepayments or just episodic it can be opportunistic refinancing.
Lot of it is M&A based on M&A by definition, it's hard to project when it closes.
I do think we've done a nice job of getting the run rate of our NII.
Back up to you know very healthy levels and the prepayment.
Sort of dynamic just kind of flows through Episodically as you saw this quarter versus last so it isn't great visibility, but over time it seems to be regular interest in any one quarter, it's it's hard to predict.
So it definitely makes sense I'll leave it there congratulations on the quarter.
Thank you.
Thank you.
Next question comes from Robert Dodd with Raymond James Your line is open.
Hi, guys.
Maybe following up on that question on prepayment activity and just the general theme is obviously you know the the forward curve is moving higher base rates are expected to go up to treat today.
And in the past that has tended to produce some element of spread compression. That's certainly not going on in the broadly broad market right now with all the volatility but yes.
If that does happen would you expect an acceleration in those prepayments if spreads compressed spreads.
Why would you I mean basically as it is.
As you said a lot of it can be M&A, rather than just opportunistically financing, but instead of a particular drive away.
In a market movement could accelerate or decelerate that.
Yeah, Robert It's Raj I don't I don't necessary think its linearly correlated.
From our experience I mean in a declining rate environment obviously.
Extended its opportunistic Refis theres more I would say of a logic of seeing it happen, which we did.
In a rising rate environment.
I don't know that that spreads compressed point for point we're.
Assessing that now.
Because it's also a higher volatility environment, which which correlates to against that.
But if you think about like I just mentioned what the drivers are at least from what we see.
A lot of it is M&A a lot of it is.
A business that even in a rising rate environment.
<unk> be able to evidence its ability to graduate so to speak to the to a more efficiently more liquid market.
So if the business model as evidenced itself too.
A more syndicated loan market or a bank or bond market.
Even in a rising rate environment that can drive.
Repayment or prepayment. So there's just many underlying factors that may not be rate driven that make it episodic and drive it versus some linear correlation.
Correlations just that just the rate story from what from our perspective.
Yes.
I appreciate it.
Thank you.
And the other one if I can on core entertainment I mean, obviously, yes, it's been an asset would be with you for.
A while now exited after after quarter end I mean on the books, it's small.
Pretty healthily above cost.
About $11 million.
Premium fair value over cost is that fair value reflect roughly the actual exit and obviously that cost basis is also a restructured cost space.
Can you give us any color I mean, what was the the Ultima oil from initial capital put in to exit.
The type of operation.
Yeah, you're recovering a lot more than the restructured value is what appears to be.
Yes, Thanks, Robert this is Phil.
I think you pointed out a good a good topic, which is a successful outcome on core after.
Our extensive time and dealing with the challenged credit and driving to a favorable outcome for Ts peasy.
B.
The final outcome, we expect not to be too different from where the most recent $3 31, Mark is so I think that's I think that's the address that directly addresses your question.
The issue around the write down.
That was coming of course from the later stage negotiations, which reflected that but.
End of the day, we are quite happy and pleased with the.
With the outcome here and to your point.
The gain in that position.
Yes.
Yeah, and Robert Let me just add while we can't disclose the individual IRR. It was positive after a lot of work in open a long hold as you as you rightly pointed out so I think it's another good example of maybe not as significant.
But but.
But positive and a significant recovery.
And you know the hands on work of.
Really moving into an owner owner.
Operator type role.
You had mentioned and some others that are that have come to exit. So we're happy with the outcome and it was a far cry from where it was.
Earlier in the earlier days of teaching P C.
Thank you for that color, but I think that kind of a.
Positive at all with a lot of work up in that clip points out that.
Although a lot of work and sometimes.
Justified in terms of getting capital returns.
Investors. So I appreciate the color and congratulations on the quarter and the AR and the resolution.
Thank you.
Yeah.
Thank you.
The next question comes from Christopher Nolan with Ladenburg Thalmann.
Please proceed.
Hey, guys Highland.
It seems to be back on accruing status extended maturities and all cash coupons.
What happened there.
Yes, we are.
That's another credit that we worked very hard on and we are successfully restructure the company and right size the balance sheet.
As a result of that.
The remaining debt is performing again, and we feel that the company should be able to.
To maintain that.
The coverage under that.
Just to be clear Youre looking at restructured securities now so there is an ownership piece.
Including our corporate presentation, you know, we're sort of in the early days of Gist.
Kind of a segue from the core discussion we are in the early days of this process with Highland.
And have a seat at the table, we did not exchange the entire stack into into equity and we tried to keep balancing and maintain a preference where we can what remains is performing and then the balance that was exchange is going to be.
Reflected in the equity ownership.
On the books.
Great and a broader question given the firm has a background in.
Restructuring and so forth.
What do you guys see as the bigger systemic threat right now the supply chain crunch or inflation.
Hum.
It's kicked that off and then ask others to comment I think.
Well Theres two ways all parts of that question one is what do we see.
Sort of in aggregate and then what do we see that's applicable to the portfolio because it is a little different.
In aggregate I think both are our issues are clearly issues of the day, we've got a lot of insight and feedback.
The platform Ron.
Two.
SaaS really what's going on around the world, which is which is nice to have that access.
As far as the portfolio goes keep in mind much of our portfolio is weighted towards.
Services companies software professional services financial services, we don't have a lot of true working our supply chain exposure risk.
Even though the supply chain exposure may be a risk in the market.
We do see inflation wage inflation.
To some degree commodity prices again, which don't aren't applicable to us.
Being risk, but when we do our underwriting we fundamentally why don't I understand that these companies have pricing power.
And we've seen that regular consistency that.
Were there just wage inflation or other type of inflation in the ER.
Cost of goods, our operating expenses. The companies we've worked with have a good ability to pass it on in terms of price increases or other forms of.
Revenue benefit so just wanted to parse the question from what's going on in the market versus what's come on the portfolio.
Great. Thanks Raj.
Yeah.
Thank you.
We have a question from Ryan Lynch with <unk>. Your line is open.
Sure.
Hey, good morning, guys.
First question I had.
How much of the slowdown in activity that we saw in Q1 do you think is attributed just towards.
He's analogy and I'm kind of a really robust back half of 2021 versus.
Versus the sponsors.
I guess the way an uncertainty that they were looking at.
Rest of 2022 with the with inflation labor issues geopolitical rising rates all of those uncertainties out in the marketplace like what do you think was really the main contributor.
The slowdown in Q1 because.
The latter of those issues, that's really not going to change anytime soon so I'm just curious of Av.
Based on your answer to that question what is the rest of the year look like you see from kind of sponsors appetite.
Back in the marketplace.
Yeah. Thanks for the question right. So.
So.
Our Q1 volumes, what we saw was.
March was substantially more active than than January and February and April was more active.
And then the.
And margins I think may is becoming more active than the in April . So I think what youre seeing is is that certainly the beginning of Q1 we.
We think there is a lot of pull forward.
In volumes into 2021.
That was because of naturally uncertainty around rates uncertainty around them.
The market's the market started getting a little bit more volatile towards the end of the year.
I recall, and so I think theres a tremendous pull forward in demand in Q4.
So we think that kind of going forward based on the pipeline today and the level of activity.
We think 'twenty.
2022 was actually going to be a pretty strong year.
Now there is of course, a lot of things we can't predict.
In the markets.
With world events.
But based on the activity levels that we're seeing month to month.
It looks it looks quite promising at least our pipeline's been very healthy in the sectors that we focus on.
Okay. That's helpful color.
The other question I had was.
There's certainly been I would say an increase appetite and an increase.
Volume surrounding sort of direct lenders claim in the preferred space.
Particularly with some of these these.
These high multiple L. D errors that are taking place.
I know you guys, usually talk about wanting to be high up the capital structure.
I was just wanted to get your opinion on what do you Guy what's your guys' take on on some of the preferred equity.
That are getting done out there do you guys have an appetite.
To start playing in that market.
Yeah, I'll take that and I just wanted to add or until just last question for Phil Just a reminder that.
The sponsor activity isn't going to be the only thing that dictates our pipeline we're very.
Ignostic on deal sourced so there's actually a lot of non sponsor activity that plays through but the activity comment.
It is consistent.
Should wider base of sourcing in terms of the preferreds I agree with you I think there's been a lot of.
Growth in sort of that some of the junior capital out there to bridge to bridge the gap to do.
Deals getting done.
We are biased to being senior.
No near the top or at the top of the capital structure, we believe that our pipeline.
We will continue to allow us to find the right type of deals for.
This business and strategy, which is focused on credit and also focused on stable well covered dividend.
This quarter evidence is I.
I think we've always been.
Open to reviewing kind of more of a risk on situation just given the platform capability and the team's capability, but this fund and this and this this business really is I think centered on our credit strategy, where there is kind of premium return for safe relatively safe.
Senior risk.
And that May mean that we have the ability to get warrants or some other kickers, which I think you've seen.
Yeah that is the norm, but.
With some consistency, including in the recent quarters I think preferred is probably a little bit further out of the.
The the mandate in my mind, it doesn't mean that the firm of the platform can participate.
Although we don't get those looks we actually do quite regularly I think we're finding very good opportunity.
In our pipeline for traditional middle market credit.
That has allowed us.
Performed the way we performed.
The most recent quarter.
Okay.
I appreciate the time today.
Thank you.
Thank you. The next question is from Derek Hewett with Bank of America. Your line is open.
Hello, everyone and thanks for taking my question most of my questions actually were already addressed but maybe could you talk a little bit about your funding strategy once rates stabilize.
Would you look to increase the level of unsecured funding.
Which dropped this quarter given the that the converts matured.
Or are you comfortable with the existing level of secured funding.
Yeah, they're good it's Eric I'll take that question.
Yeah, I'd say, yes, we definitely are continuing semi or the capital markets, we like having flexibility and certainly.
The funding availability that we have currently it gives us that flexibility.
The markets as you have seen have been pretty rocky lately. So.
Perhaps not that's not the best time to go out to market, but.
Certainly we as you mentioned it is slower than it's been the last couple of years, but if you'll remember.
A couple of years back this is around the percentage of unsecured debt that we had previously so.
Within a range, we'll look to go out to market if the conditions are right.
Yes.
Okay.
Thank you.
Sure.
Thank you.
There are no questions waiting at this time, so I will now pass the conference back to Raj Vig.
Thank you.
We appreciate your participation on today's call I would like to again, thank our team for all of the continued hard work and dedication through this period I would also like to thank our shareholders and capital partners for your confidence and your continued support thank.
Thank you for joining US This concludes today's earnings call.
Uh huh.
This concludes the conference call. Thank you for your participation you may now disconnect your line.
Uh huh.