Q2 2023 BlackRock TCP Capital Corp Earnings Call
Ladies and gentlemen, good afternoon.
Welcome everyone to Blackrock TCP Capital Corp, Second quarter 2023 earnings Conference call. Today's conference call is being recorded for replay purposes.
During 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 followed by the digital 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 Blackrock TCP Capital Corp, Investor Relations team Casey. Please proceed.
Thank you Barry before we begin I will 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.
Additionally, certain information discussed and presented May have been derived from third party sources.
It has not been independently verified and accordingly, we make no representation or warranty with respect to such information.
Earlier today, we issued our earnings release for the second quarter ended June 32023, we also posted a supplemental earnings presentation to our website at www Dot TCP capital Dot com.
To view, the 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 form the company's Form 10-Q, which was filed with the SEC earlier today.
I will now turn the call over to our chairman and CEO Raj Vig.
Thanks, Katie and thank you all for joining us for <unk> second quarter 2023 earnings call.
I will begin with an overview of our second quarter results I will then turn the call over to our President and Chief operating Officer, Phil <unk>, who will provide an update on our portfolio and investment activity and our CFO . Eric <unk> will then review our financial results as well as our capital and liquidity position in greater detail.
I will conclude with a few closing remarks before we take your questions.
Turning now to the highlights from the quarter.
For the second quarter TCE PC delivered net investment income of 48 per share representing a 30% increase year over year and an approximate 15% annualized net investment income return on equity.
The floating rate nature of our portfolio and a higher proportion of our liabilities that are fixed rate. Our net investment income continues to benefit from strong underwriting in an environment of higher base rates as well as marginally wider spreads.
Our run rate NII as of the end of the second quarter is among the highest in Tcp's history as a public company.
Our board of directors today reaffirmed a third quarter dividend of 34 cents per share, which is reflective of the two cent dividend increase the board has announced since the third quarter of last year. The two dividend increases since the board has announced since the third quarter of last year.
The third quarter dividend is payable on September 29 to shareholders of record on September 15th.
In addition, and there's an acknowledgment of Tcp's strong earnings year to date, our board also announced a 10 special dividend payable.
2029 to shareholders record on September 15th.
This announcement is consistent with our disciplined approach to the dividend and our emphasis on stability and strong coverage from our recurring net investment income.
As a reminder, throughout Tcp's history, we have consistently and comfortably covered our dividends with recurring net investment income.
Phil will discuss our second quarter investment activity in more detail, but in summary transaction volumes remained muted in this uncertain environment.
Creasing the importance of our disciplined approach to deploying new capital.
Consistent with our historical activity, we've reviewed a substantial number of transactions during the quarter and invested in only a small percentage of those opportunities.
Given the slowdown in private equity deal volumes, we continue to be reminded of the benefits of our channel agnostic approach to deal sourcing.
Because of our direct relationships with management teams and other industry participants as well as our deep our team's deep experience investing across cycles.
And our ability to drop the power of the Blackrock platform. Our pipeline continues to build and we are encouraged by the compelling opportunities we have identified.
Our underwriting continues to prove very effective with NAV declining a de minimis <unk>, 5% during the quarter.
The unrealized losses being driven primarily by mark to market impact on quoted names.
The credit quality of our portfolio remains solid with loans to just two portfolio companies on non accrual as of the end of the second quarter totaling just 0.3% of total investments at fair value a level that continues to be among the lowest non accrual levels and T. C. P. CS history.
Finally, while we do not have an explicit forward view on rates. We do believe we will be in a slower growth and elevated rate environment for the foreseeable future with a range of macroeconomic uncertainties.
It isn't complex periods like this that on our historical experience and deep industry knowledge are an advantage.
<unk> strong results throughout various market cycles looking.
Looking back at historical performance as a public company. Since 2012, we have generated a 10, 3% annualized return on invested assets and a total annualized cash return of nine 5%.
Much of which we delivered while base rates, which much were much lower than they are today.
We believe this performance remains at the high end of our peer group and reflects our ability to consistently identify attractive opportunities at premium yields and deliver exceptional returns for our shareholders across market cycles.
Now I will turn it over to Phil to discuss our investment activity and portfolio positioning Bill.
Thanks, Rod I'll start with a few comments on the investment environment before providing an update on our portfolio and highlights from our investment activity during the second quarter.
As Raj noted economic uncertainty has driven this slowdown in market transaction volumes.
Institutional leveraged loan issuance and use M&A volumes are both down more than 30% year over year in the second quarter.
Despite the slowdown in market activity, our industry focus deal teams continue to proactively identify unique investment opportunities from a wide range of sources.
Frankly through industry context.
And the teams as well correct traditional sponsor relationships.
However, we're not immune to the year to date slowdown in market volumes.
We remain disciplined and are passing on more opportunities, particularly when pricing does not appropriately reflect.
The current market conditions or where in terms of not provide adequate lender protections.
In the second quarter, Tcp's invested $17 million deployment in the quarter included loans to new and two existing companies primarily senior secured loans.
And reviewing new opportunities, we emphasized transactions, where we are positioned as a lender of influence which enables us to leverage our two decades of experience and negotiating deal terms and conditions that we believe provide meaningful downside protection.
We believe this has been a key factor in our low realized loss rates over a long term track record.
In addition, our industry specialization, which our borrowers value provides two key benefits.
First it bolsters, our ability to assess and effectively mitigate risk in our underwriting and when negotiating terms and credit documentation.
It expands our deal sourcing capabilities of sponsors who value our industry experience, which lends itself to more reliable execution and also with non sponsors like corporates and founder owned businesses, who value and informed balance sheet partner.
Follow on investments in existing holdings continue to be important sources of opportunity.
45% of total dollars deployed over the last 12 months with existing portfolio companies.
TCP six largest new investments during the second quarter was a senior secured first lien term loan to support the acquisition and carve out a global payments gaming solutions Division, which has since been rebranded as Standalone business called for $1 billion payments.
Civilians as a payment services provider to the gaming sector, providing a full suite of on premise and online gaming payment solutions.
We view this as an attractive business given strong positioning in an industry with high barriers to entry because of regulatory oversight and unique industry requirements.
Blackrock participating as lead lender among a small group of lenders.
New investments in the second quarter were offset by total dispositions of $32 million.
We also continue to closely monitor our existing portfolio companies.
Our team members are continuously engaged in dialogue with the owners and operators to assess both current and projected performance relative to our original underwriting assumptions.
Given the rate environment higher input costs and the general uncertainty in the economy.
A few of our portfolio companies are navigating slower revenue growth and margin pressure.
We're working closely with the management teams and owners of these handful of companies in this position.
However, we recently completed our quarterly review process and are pleased to report that their portfolio generally remains in good shape.
Our emphasis is on companies with established business models and proven core customer basis that make them more resilient in times like this.
At quarter end, our portfolio had a fair market value of approximately $1 6 billion.
88% of our investments were senior secured debt spread across a wide range of industries, providing portfolio diversity and minimizing concentration risk.
We also continue to emphasize companies and less cyclical industry.
The portfolio at quarter end consisted of investments in 143 companies.
Our average portfolio company investment was 11 and a half.
Yeah.
As the chart on slide six other presentation illustrates our recurring income is distributed broadly across our portfolio.
Not reliant on income from any one company back more than 90% of our portfolio companies each contribute less than 2% to our recurring income.
86% of our debt investments are first lien providing substantial downside protection.
And 94% of our investments are floating rate.
Clearly an important benefit in this.
Pardon me.
The overall effective yield on our portfolio increased to 13, 8% compared with 98% one year ago, reflecting the benefit of a higher base rates and wider spreads on new investments.
Investments in new portfolio companies during the quarter had a weighted average effective yield of 14, 1% exceeding the 12, 2% weighted average effective yield on exited positions.
Given further pullback in commercial banks ability and willingness to lend in this environment, we're continuing to benefit from a more lender friendly investment environment.
<unk> in both pricing and terms relative to 12 months ago.
Post quarter end, we've seen a modest pickup in activity and have been investing selectively maintaining our underwriting discipline, while being mindful of the inflationary environment.
We have the size of companies that have significant pricing power to pass on higher input costs, including increases in their cost of capital.
It's also important to note that we did not underwrite to perfection.
Seek to build in sufficient buffers to ensure companies can withstand changes in the macro environment, including higher costs without impairing our ability to service our though.
Our pipeline is building and the yields on investments in our pipeline are generally in line with our current portfolio.
To date, we have had no prepayment income in the third quarter.
Let me now turn it over to Eric to walk through our financial results as well as our capital and liquidity position.
Thank you Phil.
As rational noted our net investment income in the second quarter benefited from the increase in base rates.
Last 15 months.
Net investment income of $27 $6 million 48 per share.
30% versus the second quarter of 2022.
We ended the second quarter dividend <unk> 34 per share.
The <unk> <unk> per share dividend increase announced last quarter.
Today, we declared a third quarter dividend <unk> 34 per share and a supplemental dividend of <unk> 10 cents per share.
We remain committed to paying a sustainable dividend that is fully covered by net investment income regardless of the Patriot environment.
We have done consistently over the last 11 plus years.
Investment income for the second quarter was 93 per share.
This included cash interest of 83.
Recurring discount and fee amortization of <unk>.
And Pik income up 7%.
Well, we did see an uptick in pick income in the second quarter.
<unk> <unk> of onetime fixed income.
Our recurring Pik income remains in line with the average over our history.
Investment income also included <unk> <unk> of dividend income.
As a reminder, we amortize upfront economics over the life of an investment.
Other than recognizing all of it at the time of their investments.
Operating expenses for the second quarter were 35 cents per share and included interest and other debt expenses 21 cents per share.
Incentive fees in the quarter totaled $5 $9 million or <unk> 10 per share.
Net realized losses for the quarter were $395000 or <unk> per share.
Net unrealized losses in the second quarter totaled $11 million or <unk> 19 per share.
Primarily reflecting mark to market impact on Mark market quoted me.
These included unrealized losses of $3 $9 million and our investment in Astro acquisition.
A $3 $4 million unrealized.
Unrealized losses throughout the year.
$2 $2 million on our investment and market.
As well as a $3 4 million unrealized loss on our investment in Thailand.
Unrealized losses were partially offset by a $6 3 million unrealized gain on our investment in secure.
The net increase in net assets for the quarter was $16 $3 million or 28 cents per share.
As a reminder, we have a robust validation process and substantially all of our investments are valued every quarter using prices provided by independent third party sources.
These include quotation services and independent validation Sir.
And this process is also subject to rigorous oversight.
Putting back testing every disposition I guess our valuation.
The rationale is the credit quality of our overall portfolio remains strong.
Only two portfolio companies were on nonaccrual status.
At the end of the second quarter.
Representing 0.3% of the portfolio at fair value and 0.5% of that cost.
Now turning to our liquidity.
Our balance sheet positioning remains very strong.
And we ended the quarter with total liquidity of $333 million.
Relative to our total investment of $1 $6000.
This included available leverage of $210 million and cash of $123 million.
Unfunded loan commitments to portfolio companies at quarter end equal to 5% of total investments.
<unk> $90 million.
Of which only 35 million revolver commitment.
Our diverse and flexible leverage program includes two low cost credit facilities, two unsecured note issuance and.
SBA program.
And April Fitch reaffirmed <unk> investment grade rating with stable outlook.
And our unsecured notes unsecured debt continues to be investment grade rated by Fitch and weak.
Given the modest size of each of our debt issuances.
We're not overly reliant on any single source of finance.
And our maturity remained well out here.
Additionally, we are comfortable with our current makes us secure and unsecured financing.
And do not have any immediate financing.
Combined weighted average interest rate on our outstanding borrowings increased modestly to $4 two 8%.
This compares with $3 two 6% at the end of 'twenty or 'twenty one.
That is an increase of only 102 basis points over the last 18 months.
The base rate increase of approximately 504 basis points during that same period.
This is the result of having over 70% of our borrowing from fixed rate swaps.
Now I'll turn the call back over to Raj.
Thanks, Eric.
Even as market volatility persist.
And our proven strategy and approach to investing but has delivered strong risk adjusted returns for our shareholders throughout different economic environments.
We believe we have demonstrated a consistent ability to execute in both periods of economic growth and contraction.
Also makes us a reliable partner for our borrowers and further helps us to attract appealing investment opportunities.
With that operator, please open the call up for questions.
Thank you.
We'd like to ask a question. Please press star followed by one of your telephone keypad. If for any reason you would like to leave that question. Please press star followed by <unk>.
Again to ask a question. Please press star followed by one.
Could you remind me if you all usually speakerphone. Please remember to pick up your handset before asking your question and please do ensure muted locally.
Our first question today comes from the line of Christopher Nolan from that embed Selman. So please go ahead Christopher your line is now open.
Hey, guys.
Raj.
Dosing of the deals that you guys walk away from you made a comment that.
They're not able to meet their terms and conditions has T. C. P C.
Basically made their pnc's tougher than before or is the company's performance is weaker than just making it.
Thanks for the question a question Chris how.
I wouldn't say that we've made them tougher I think categorically we are focused on.
Many of the same things. Unfortunately, that's been a focus coming into this environment.
Highlight those as.
No real financial covenants.
The documentation, particularly areas of leakage.
Payments out in front of us and things of that sort in a lot of.
Very targeted.
Negative consents or things like that.
We want to have approval rights on all focus items I would say in some cases the levels of those items has tightened up so between loan to value.
Multiples.
Percentage of buffer off of our targeted covenants.
Certainly things, we can tightening up.
And in some cases, it's just a little more murky ness of the credit.
What we want and are targeting may not match up with what's available so.
All of this is in the context of as Phil mentioned, just a lower deal environment overall.
For us it's never been about just growing for the sake of growth you've seen us.
<unk> had lower deployment quarters, even in sort of more.
Active environments and I think that's just one of the things that as a consequence of how we're approaching the market, but I wouldn't call. It.
Our four new items I think its probably marginally tighter.
In an environment of more uncertainty.
Meaning more buffer and I think the results are good credit performance holding assets for longer probably and in some cases over occasionally you know low deployment, which is which was fine in the scheme of things.
My follow up question on value.
Please go ahead.
Yeah.
We decided that that.
Our pass rate has always been quite high we pass on.
90% plus of our deal. So we've always been quite selective and we continue to be in this market environment.
But I would also add that clearly for a lot of companies that are out there seeking financing.
A lot of it comes from M&A and eat.
You don't need to be a seller in this environment you can wait.
And you have the luxury of waiting them then.
You should to.
To get perhaps a higher valuation at some point later on given that.
Uncertainty in the environment and the impact on the valuation multiple so I think what we're seeing in a lot of the highest quality assets.
Still on the sidelines they havent transacted.
So what we're seeing in the market are folks that need to refinance or need to raise financing and sometimes they might have more of them more complexities of their story.
So we're still trying to be selective but that just gives you a little bit of context for the type of flow regime.
Great and then as a follow up question turns on valuations.
Surprised to see the number of <unk>.
Realize appreciation excuse me unrealized depreciation in the quarter.
And it raises the question since most investments in the BDC land tend to be so.
Variation on discounted cash flow what is the risk free rate.
That your value value were use given that we have an inverted yield curve, where short term rates are higher than longer term rates.
Cause if youre keying off short term rates, which is what youre investments key off of the.
The valuations for a lot of these things should go down I'm, just trying to get a clarification.
Yeah, I'll try to add some color on ultimately think youre highlighting the key point, which is this book is valued.
Almost just about entirely by third parties or in the case of <unk>.
Market quotes were there Martin quotes are available.
More of that.
Driver of some of the unrealized losses.
As far as the valuation providers go they typically are doing.
Annulation of approaches its not just the discounted market rate there will be precedent transactions.
Particularly around M&A, and then there will be some public market comp.
Possibilities now and obviously.
Never.
Clean fit, but it's really a.
Combination of those two but I think in terms of the market rate. They are using it'll vary there will be a reference rate.
And then and then a.
It's kind of spread adjusted above that they do try to take a longer term view on the discounted cash flows.
And and you.
What are they using three months.
Sofa or some forward kind of adjustment.
And the forecasted rates will vary by provider I guess from our point of view of the overall book, though keep in mind, we have taken some.
No in earlier quarters, but there was more volatility and.
Before a recovery in the equity markets, which has happened through this year, we have taken more of.
The markdowns I would guess.
Part of it and this market is more of what's happening in the public market.
That has a knock on effect to their approach, but it will be valuation provider specific and ultimately done independently.
Okay.
And Chris I'll add that at <unk>.
No.
We are doing fundamental validation part of it.
Oh Asia providers, they are using market spreads so whatever price you are seeing in the public market is typically what people use to.
To discount the cash flows.
You did a one off basis.
Those were relatively flattish quarter over quarter.
Mark down so you can just see work more on the more traded.
Loans that we hold where you do tend to see a little bit more volatility in markets like this.
Thank you.
Yeah.
Thank you.
Our next question today comes from the line of Robert Dodd from Raymond James. Please go ahead.
Not really.
Hi, guys.
Questions first I got to ask on the dividend.
The the Tencent and I realize again, it's a board decision, but the <unk> special.
Wouldn't it be reasonable to assume I mean, if we look at the forward curve, which is.
As it stands today coming down slowly.
Oh projected to come down slightly your earnings could stay elevated for some time and generator.
I used it.
So should investors.
We'll anticipate maintenance is that 10%.
Special this quarter.
Continues in the future so long as earnings exceed the base dividend by a sizable margin or can you give us any color on how.
Now how that.
Towards that.
Yes.
Thanks for the question Robert I'm glad you joined by your.
Yes, sorry, I cannot disclose it in the background, but.
Let me provide a little color and as you know we are.
Very focused on being prudent and disciplined around the dividend.
Didn't call us a fast mover in this regard, but very methodical and deliberate.
But one where we are very focused on a sustainable dividend.
And even.
The question is special or four dividend increase I would argue I would sort of.
Highlight that we've done both.
Within the last.
Give me a call at.
The three to four quarters as far as the special goes it's the way we thought about it was it is a very effective way and one quarter to give.
More cash back then even a.
The increase on an annualized basis.
It does not it.
It does not force us to take a forward view.
And as we've done that we've taken a more cautious for you because as you pointed out a lot of the.
Oracle benefit has been reference rate, which can come down although it seems like it will stay a little elevated for longer.
Then we are layering in our view of the.
The credit book in the environment and.
We will be methodical, but gradual and how we.
Take up the dividend as we have done in the last few quarters. So if everything is as it is today and we have this run rate.
Which is which has really benefited from underwriting and not.
Impacted by a lot of credit issues.
We will continue to assess and look to reward our shareholders for that work.
And then determine the best way to do it and do you have a couple of options, whether it's more immediate and one time more and more on a run rate basis.
And so I think rather than forecasting one or the other I can I would tell you that if we had this.
Elevated return in it and things are.
On the credit side staying intact, then our board will continue to look at this and what is most favorable for shareholders and it will choose amongst those tools it could be one it could be both.
And I think at the end of the day it will be in the context of what's most sustainable and not.
Compromising your ability to pay the dividend.
Comfortably from our current run rate.
That's a constant and quarterly assessment, resulting fortunately.
A fair bit of returned back to shareholders both through the increase in dividend in this quarter.
Pretty sizable I think like most sizable historically, one time special dividend.
Yes.
I appreciate that color very helpful. Thank you then secondly on.
You mentioned a couple of a couple of portfolio companies experiencing some slow growth that one of your traded names did did get called out by S&P.
Having some deterioration.
And may not have a sustainable capital structure without.
Additional equity from Qantas.
So in general of course, I mean, what water on the at the market.
A lot of names in that situation, but at the margin.
The conversations with <unk>.
<unk> going on.
Without being specific.
Are they willing to step up and put the equity in.
These businesses Zafar.
How does the negotiation on that front.
Yes, Robert Thanks for the question this is Phil.
So it's a great question because.
Clearly.
It speaks to a number of a number of things one is.
What is the nature of where private equity sponsors are today with with their portfolio and their willingness to protect their positions.
But I think the other aspect of it is what protections do we have to bring these conversations to the table.
We have we're seeing with our amendment activity pick up largely because of the covenants that we have in place and that really speaks to I think the benefit of of how we negotiate and structure our deals with these terms.
Because without these covenants naturally the only.
The moment that you have to bring the sponsors at the table, perhaps a payment default so.
So we think by virtue of these covenants were having these conversations and whats important when we structure. These covenant instruction at a level that.
That implies that there continues to be meaningful amount of equity values.
Remaining so so long as there continues to be.
Good equity option, there based on valuation and based on our prospects of the business.
<unk>.
That we feel at the sponsor.
Or whoever is in the equity whatever stakeholders, there or it could be a family owned business or so on that they are actively engaged and willing to put more equity so.
So every one of these amendment type negotiations are opportunities for us too.
De risks our loan.
Restructuring as you know.
Robert don't don't happen in a vacuum they happen over a series of.
Events and because we have these amendment discussions those are opportunities and events, where we can try and derisk our though.
I appreciate that thank you.
Thank you.
Mind, you if you would like to ask a question. Please press star followed by one on your telephone keypad.
Our next question today comes from the line of Ryan Lynch with <unk>. Please go ahead, Brian Your line is now.
Hey, good morning.
First question I had is in your commentary you talked about conducting a thorough review of your entire portfolio every quarter to kind of stay ahead of any potential issues I would just love to get some more details on what what that portfolio review sort of entails from your end.
Yes, thanks for the question.
So so what Intel's first of all.
<unk>.
Our investment teams as you know are organized along industry.
A number of industries that they specialize and so we view our monitoring is not quarterly necessarily quarterly is just the formal review process, but are monitoring is is.
Ongoing continuous.
And continued vigilance over.
Events are going on in industries that are borrowers ran the borrowers themselves competitors and so on.
One of the benefits of having that approach.
So we're always monitoring our portfolios closely the quarterly.
Portfolio review.
That includes.
Discussions with management teams discussions with stakeholders, including the equity or other lenders as well really assessing the financial performance of the business using there.
For financial reporting materials.
And also assessing what's going on in the broader industry context, and putting that together in a formal memorandum for our investment Committee to review and we do that across our entire portfolio.
What are the benefits it gives us it gives us a lot of synaptic views lots to put certain deals and borrowers into the broader industry context.
We also are able to leverage that.
The benefit of the broader Blackrock platform in terms of information.
Helpful for us not just to monitor in a vacuum our portfolio companies.
Maybe the middle market.
Private debt universe, but also.
The traded markets.
In the equity markets and be cool on resources from across the Blackrock platform to really make sure we're informed across the entire industry where borrowers operate it.
Okay. That's that's helpful and good color on that.
Following up on Robert's questions regarding the dividend I understand that's a board decision, but Raj you're you're the chairman of the board. So I'd love to hear what is.
Peter.
Your opinion or the boards, if you can speak to the board's opinion on what is the hasnt hesitancy for increasing the dividend.
So sort of what kind of the core earnings power of <unk> businesses today, given where current base rates are and then if base rates end up changing and going down which they will obviously at some point, reducing the dividend to match the current environment of phase space, what's the hesitancy to kind of.
Not pay out.
Nearer closer to the earnings power of the business and then adjust it depending on what base rates to over long periods of time.
Yeah.
That's a good question I mean, maybe that is the penultimate question.
And I guess, what I would say as I look.
Call It a hesitancy.
Our intent and our desire is to.
Reward shareholders as much as possible in.
Uh huh.
And fishing and but also.
Manner that maintains.
Their confidence in us.
Part of that is the answer to your question, which is.
Keep in mind these earnings have moved positively.
In some cases very quickly and we're talking about a 30% year over year.
Increase in our in our NII.
And that will that pace is certainly ahead of our.
Deliberate.
<unk> two we wouldn't just match it at that pace.
And then.
At an elevated risk of taking it down because I do believe the volatility in doing that even though logically it sounds like.
If you just match the run rate or the earnings power I think the.
We see a change in that.
And I may be wrong on this but I would say think the frequency of changing that can.
Underlying that confidence and whether that means you are now operating at a higher.
The required cost of capital or Youre, not getting the reward for the dividend.
The ability.
It was obviously debatable it feels to us like our shareholders and we hear this from many of them.
Like the confidence in our dividend being covered if we've done it every quarter since we've been public I'm not sure everyone can say that.
And what we try to do is we try to not be overly cumbersome and slow, but very deliberate and.
Moving back up to those levels you have seen.
More dividend increases in the last year than we than we've had.
Maybe a decade.
I think that trend.
As we have the ability to really be predictive on the business.
Hi.
Those discussions we will obviously continue.
The answer to your question on along the way as we don't want to invite.
Unnecessary or undue volatility in the perception of our dividend versus reinforcing.
The quality of that dividend in the value of it.
Less volatility, which means we'd rather just take it up and keep it up versus taking it up and down.
Towards something that approaches a little more of a whimsical.
Our approach in that just arent philosophy, I don't want my philosophy, and I don't want to speak for anyone individually on the board.
These discussions have been actively but hopefully that gives you a little more color on how we think about it and we do have these discussions are very actively in this environment.
Because the performance is notable as you highlight.
Mhm, Yeah no.
That's helpful I understand the reason behind.
That's all from me I appreciate the time today.
Thank you.
Thank you. Thank you.
Yes.
There are currently no additional questions waiting so I'd like to pass the call back over to <unk> for any closing remarks.
Yeah.
Thank you we appreciate your participation on today's call.
I would like to thank our team for all of the continued hard work and dedication I would also like to thank our shareholders and our capital partners.
Your confidence and your continued support thanks for joining US This concludes today's call.
I'd like to thank our team for all of the continued hard work and dedication I would also like to thank our shareholders and our capital partners.