Q3 2023 Gladstone Capital Corporation Earnings Call
Greetings and welcome to the Gladstone Capital Corporation third quarter earnings call.
At this time all participants on you listen only mode. A brief question and answer session will follow the formal presentation. If anyone should be quiet operator assistance during the conference police Prestissimo on your telephone keypad.
[noise] reminder, discomfort is being recorded.
It is now my pleasure to introduce your host David Gladstone, Chief Executive Officer. Thank you Sir you may begin.
Thank you elect Tanya and that was a nice introduction and good morning, everybody. This is David Gladstone Chairman and this is the earnings conference call for Gladstone capital.
June 30, 20th 13, 2023 excuse me.
Thank you all for calling in we're always happy to talk to you about all the things going on here, we'd like to update our shareholders and analysts and welcome the opportunity to provide the update.
Our company.
And now we're here for my General Counsel, Michael the calcium who makes some statements regarding certain forward looking statements Michael Thanks, David Good morning, everybody.
Report May include forward looking statements under the Securities Act of 1933, and the Securities Exchange Act of 1934, including those regarding our future performance. These forward looking statements involve certain risks and uncertainties that are based on our current plans, which we believe to be reasonable. There are many factors may cause our actual results to be materially different from any few.
What's your results expressed or implied by these forward looking statements, including all the risk factors are forms 10-Q, 10-K, and other documents we filed with the F. C. C can find them on the investors page.
Website, that's Gladstone capital Dot com.
It also sign up for email notification on the website, where you can find the documents on the SEC's website, as well, which is W. W. W. Dot S. A C dot G O V.
We undertake no obligation to publicly update or revise any of these forward looking statements with her as a result of new information future events or otherwise, except as required by law now.
Today's calls an overview of our results. So we ask that you review our press release Form 10-Q, both issued yesterday for more detailed information again, you can find them on the investors page of our website now with that I'll turn the presentation over to Gladstone capitals, President Bob Mark hotspot.
Good morning, and thank you all for dialing in this morning I'll cover some of the highlights for last quarter.
Comments on the outlook for the balance of twenty-three before turning the call over to this call Shelton brand or see a photo review the details of our financial results for the period.
So beginning with our last quarter results originations, where 71 million for the period with three new platform investments representing the majority of these new investments portfolio amortization in repayments were 35 million, sorry, ending investment balance rose by 36 million.
Higher short term interest rates lifted the weighted average yield on our portfolio by 50 basis points to 13.6%. However, the 6.6 per cent increase in earning assets average, earning assets was the primary driver behind the 11.4 per cent increase in total interest income, which rose to <unk>.
21.8 million.
Borrowing costs increased by 700000 with higher sofa rates in bank borrowings. However, our net interest margin rose by 1.6 million.
15.9 million for the quarter.
Management fees for the period declined to 4.1 million or 2.3% of assets as deal closing and advisory fee credits more than offset the higher incentive fees associated with the increase in investment yields.
Our net investment income increased to 11.7 million for the quarter or 31 cents per share, which is up 21% from last quarter and 68% from the same period last year.
The net realized an unrealized gain on the portfolio on the <unk>.
Portfolio for the period came in at 200000 <unk>.
Positive however, undistributed earnings for the quarter lifted N a V per share by eight cents to $9.27.
Combination of increased net interest income and lower net expenses lifted or are we for the quarter to 13.3%.
Based on the portfolio performance an increase in net interest income, we recently announced the monthly dividend increase to 8.25 cents per month.
With respect to the overall portfolio our portfolio continues to perform well with generally modest leverage metrics favorite liquidity profile and we ended the quarter with only one non earning that investment representing $6.1 million it cost or 0.4% of assets at fair value.
The appreciation for the quarter of 200000 was primarily related to offsetting moves and several equity coinvestment positions as net depreciation on the debt investment portfolio was nominal.
We appreciate excuse him for the period included a realized gain of 3.7 million on the exit of our equity interest in pick 360, which is the legacy investment and kept it very successful outcome.
In reflecting on our outlook for the balance of twenty-three I'd like to leave you with a couple of comments, while the broader market Dealflo moderated we're continuing to see attractive investment opportunities within the lower middle market, including follow on investments within our existing portfolio and expect these opportunities to outpace repayments.
And support further growth of our investment portfolio.
We have maintained underwriting rigor in the face of interest rate escalation and continue to focus our investment activity on lower risk senior secured loans, which make up about 74% of our investments today and with a weighted average overall leverage in the portfolio of 3.5 times EBITDA.
It has helped mitigate the potential that service issues associated with and yields erosion assisted with Nonearning assets.
We continue to actively manage our balance sheet leverage within our modest leverage target range and market conditions permitting plan to continue to issue equity under ATM program to support the growth of our investment portfolio.
Lastly, with our floating rate investments exceeding are floating right assets by approximately 450 million in the current floating rates on pace to be up again. This quarter. We would expect our net interest income to rise further in the coming quarter.
And now I'd like to turn this call over to Nicole Shelton brand to provide a more detailed details on the funds financial results for the quarter.
Good morning, everyone jogging the June quarter tone.
Interesting.
2 million or 11.4% to 21.8 million based on the increase in short term rates.
A weighted average yield on our interest and portfolio 50 basis point to 13.6%.
The increase in floating rate.
92 per cent of the investment portfolio that carry sledding right.
The investment portfolio weighted average balance increased to 644 million, which was up 40 million or 6.6 per cent compared to the prior quarter other.
Neither income was largely unchanged.
In total investment income rose 2.3 million or 11% to 22.8 million for the quarter total expenses rather.
200000, a quarter over quarter with higher interest expenses.
Management fees declined 500000.
[noise] advisory fee credits more than offsetting the higher incentive pay.
Investment income for the quarter ended June 30th with 11.7 million, which was an increase of 2 million compared to the prior quarter are 31 cents per share, which exceeded the 24 cents per share dividends paid.
For you to increase to $24.75.
Quarter announced in July .
Increase in net assets, resulting from operations was 11.9 million or 32 cents for sure.
By the realize an unrealized valuation depreciations Howard Bipap earlier.
Anything over to the balance sheet assets.
30th total assets Friday to 730 million consisting of $715 million in investment that fair value and a $15 million in cash another asset.
Liabilities rose to 372 million as of June 30th and consisted primarily of $150 million or five and made senior notes do 2026 50 million of three and three quarters senior notes to May of 2027 and as of the end of the quarter advances under our line of credit for 164 million.
During the quarter, we successfully renewed our credit fidelity extending the revolving period in final maturity to October 2025 in October 2027, respectively.
Credit facility provides for an accordion of up to 350 million and given our fair favorable collateral position and the expected growth in our investment we intend to pursue an increase in the facility commitment in the near term.
As of June 30th net assets froze by $16.1 million from the prior quarter and with a net proceeds from common share issue incendiary G. M program, a 13.3 million and undistributed huh.
This is from $9.19 per share as of March 31st.
And 27 cents per share.
Yeah.
Our leverage as of the end of the quarter froze with the increase in assets to 104% of that office.
With respect to distribution or monthly distributions to common stockholders or increase to 8.25 cents per common share effective for the month of July August and September which is an annual run rate of 99 cents per share and in light of the accumulation of undistributed earnings this year a supplemental distribution.
Two cents per sample will be paid in September .
Board will meet in October to determine the monthly distribution to come stockholders for the following quarter.
At the current distribution run rate for our common stock and with a common stock price at about $10.86 per share yesterday. The distribution run rate is now producing a yield of about 9.1 per cent.
Now I will turn it back to David to conclude.
Oh, thank you.
Nicole Michael you all did a great job informing shareholders and the analysts that follow a company summary, another good quarter.
Congratulations to.
Bob and Nicole for really putting on a show of earnings increase the company delivered net investment income originations of 36 million for the quarter, which lifted the asset growth of the company to over 125 million or 22 per cent in the last 12 months.
Portfolios in good shape with modest leverage very low nonperforming assets.
And the net interest income rose, 11% to 15.9 million on a higher rate of earnings.
Investments and support the monthly common distribution increased.
0.25 cents.
I just think this has been a stellar quarter.
In summary of the company continues to stick with a strategy of investing in growth oriented lower middle market businesses with a good management.
Many of these investments are supported by mid sized private equity funds that are looking for experienced partners to support the acquisition and growth of the business, which is what we know how to do this.
This gives the company the opportunity to make attractive interest paying loans to support the ongoing commitment to pay cash distributions to our shareholders.
And now if they operated all those tania if you'll come on.
Asked the court ask the questions about the company from my people listening.
Thank you we will know conduct a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad it.
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Our first question comes from <unk> with Ladenburg. Please proceed.
Well good morning, everyone, Bob I'm curious about this portfolio company fee credit your investment activity.
In line with the last several quarters, but the level of fee credit was the highest it's been in a couple of years could you tell us about the nature of that portfolio company fee and.
To the extent possible any outlook on on what these fees could look like in the next few quarters.
Good morning <unk>.
Good good observation I would say that.
Two two unusual events one the exit that I referred to earlier pick 360.
We've been in that business gosh. It predates me so it's going over a decade.
There was an asset sale of the room residuals, there, which was a decent size fee on the exited that small position. So that was kind of an unusual item I would also say that the.
There was I think we flagged in our in our investment activity. There was a prepayment in a reinvestment and inspire and so it was an unusual then market conditions were positive we actually got a prepayments fee and a nuke fee on the new facility. So it was kind of a.
Double hit on that particular point, which probably lifted you know the numbers closer to a million dollars for the period that said you know I.
I would also suggest.
<unk>.
The fee levels that you're referencing from prior quarters.
There was probably a lot more competition driving fee pressures down last year than there is today I think in this current market environment. We're getting full fees. We are talking about origination fees that are you know it could be two or or north of 2%. So general fee led.
<unk> have increased.
Because the access to capital in the market has gotten tighter. So on an average I would say will probably be above where we have been historically, but last quarter was obviously a bit of an anomaly if that helps but yeah. That's helpful. I appreciate that one of your new positions.
Is a company called <unk> bridge and I couldn't find anything about them online can can you just describe what this company does what sort of business <unk>.
It actually is a business that is buying and accumulating.
Ah.
<unk>.
[noise] Condo Association management companies.
And an HOA management companies, it's it's a very interesting market when you look at at.
The real estate market today, most community developments or large multi off multi family dwellings have some sort of H O a management role and that includes financial accounting banking.
Contracting and other services, it's a growing business there are several large players in the business, but it's a very broad market and this company is aggregating those businesses and Systematizing and institutionalizing those processes, it's a modestly leveraged investment.
That actually is backed by several very large real estate investors. So we view that as a a a nice services business that is increasing in its demands and and service capabilities in the marketplace today.
That that sounds interesting.
Bob you mentioned that.
In terms of fees there, there's less pressure in the current market at the same time I have seen some spreads on deals which are actively sought after perhaps tightening a little bit are you seeing that in the market were you participate.
Or or not.
We really haven't seen that your your your observation I think is very very correct. I mean, typically in the marketplace, where <unk>, where where where rates are higher there's almost a reverse effect where market multiples go up.
And that's not because you know people like paying more for their financing. It has to do in fact that it's only the strongest of companies. They can come to market in an adverse situation and and their growth oriented so what you're seeing in spreads and in fees.
Has to do with high grading the investment activity. So only the best companies come through and there is always going to be a certain amount of of capital available to those good companies. So there is a little bit more of a competitive dynamic given what's happening in the regional bank market place and the general with.
Draw, a tighter terms and and capital position.
We're not seeing that in our segment because the amount of capital. That's you know currently trying to find a home in the segment, where we play doesn't have quite the same overhang that you would have in a larger larger facilities in a more a broader private capital invest.
Your base.
I understand that that's that's helpful. My last question, perhaps for Nicole I think Nicole said that you are looking to maybe upsize. The credit facility is the portfolio grows, but if I'm not mistaken you just downsized. It. So I could you just reconcile why you would downsize at and then re.
Upsize it.
Yeah, one one of our banks fell out of the facilities that we weren't necessarily intending to downsize is just one of the banks changing their focus so uhm.
Light of that and as well as our our growth plan, we will continuously love to potentially upsized.
Okay, I think I think the regional banks are going through it a soul search of what their long term strategy is and I'm sure. The bank the bank that actually dropped out exited the lender finance business and it so happens that they recently announced a very large acquisition of believe it or not a.
A venture lending portfolio from another failed institution. So you know people trying to figure out where they Wanna play where they want to allocate their capital and how they want it how they are going to make their earnings work under a more capital constrained environment. So we felt it prudent to close the facility.
Stabilize the framework and and move on going into you know a more positive outlook for the company. Clearly you know there are gonna be banks that are still out there interested in in the kind of financing that we do we just needed to cast a wider net.
And are currently working with a number of institutions, we would expect to bring in.
And Bob do you would you consider more unsecured debt to help expand the balance sheet or or or the terms just not economical right now.
Well, that's that's a that's a big question you know obviously doing a term placement in in some of the right environment.
Is is a bit of a gamble you know I would say we've been watching the momentum and certainly the feeling is that race.
Probably or near peak and I think what we're starting to see as investors are starting to creep into the marketplace to recognize that.
Time to probably extend maturities and duration.
And and that's that's something that we are actively monitoring.
And would expect something in modest size I would also point you to the fact that we filed a number of months ago. The intention to begin to distribute our perpetual preferred which will begin to Ah Ah Ah b in the marketplace in relatively short order so.
So we have multiple irons in the fire to begin to to begin to build galaxy the debt side, but.
As I said in my comments.
We're going to maintain the leverage in our target zone, and it's obviously gonna ultimately come back to continue to access to the a T M market on the equity side in order to to to support that growth. There's there's clearly more opportunities. Today. Then then we necessarily.
Farrelly have a fully fully capitalized in our balance sheet today from a capacity perspective.
Bob the perpetual preferred you're referring to that that's the 6.25% preferred sore or yes, and and that that would seem to be quite a bit below the current market or you were saying you are seeing interested at that price level.
It's a bit of an anomaly, making we can talk about it separately, but [noise].
It is a <unk>.
<unk> it is a a stable value security it is not going to be traded.
It is sold to certain accounts that value that as you may know, there's a few others that the <unk> that we have sold through some of our <unk> funds and this is actually priced wide to those securities.
I would also point you to the fact that.
There are other bdc's it had been selling similar securities in very large volumes to some of these same accounts it tends not to be public it tends to be high net worth or or more I R. A R. I a distributed networks and so we are.
Reasonably optimistic that the selling agreements and the comfort with Gladstone management companies and some of these similar securities will provide some momentum.
Momentum for us in that marketplace given the story.
And frankly, I think what people are beginning to recognize.
The the banking business is not gonna be where these companies are going to be financed on a go forward basis, we are well positioned to grow with as a as a player in financing those businesses. So it's just a.
It's a diversity of funding that I think we need to demonstrate as we as we look to continue to scale the business.
I understand that that's interesting those are all my questions. This morning. Thank you for your time.
Thank you for calling and Mickey Okay next up we got our next question comes from Kyle Joseph with Jeffries. Please proceed.
Hey, good morning, Thanks for taking my questions just Wanna get kind of your your your thoughts almost on a on a on the economy, giving your your portfolio I know.
Nonaccruals are stable around four but just to get a sense for.
Revenue and EBITDA growth trends, you've you've been seeing in in how does that differ between recent quarters.
Thanks for calling in you know the.
When we go through the the portfolio I would say.
For the most part we're very focused on revenue growth, obviously and what we're beginning to censor what we're focusing on right now is the price.
Increases associated with abroad inflationary pressures to the last year.
Have have for the most part and positive on a lot of the companies people increased price because people didn't know where things costs were and they wanted to get availability and they wanted to continue support you know they're downstream customers and so I think what we're seeing now is revenue increases in the in the portal.
Polio are almost 100 per cent price oriented and the volumes are getting softer. So we're very concerned that in the near term you're gonna get some blow back inflation's gonna get get squeezed.
Squeeze down and customers are gonna resist more vehemently the price increases. So we're we're very focused on on what that revenue growth is gonna look like for the most part I think our portfolios companies are holding together you know obviously, the places where people would be impacted most directly.
We are things like consumer building you know maybe some of the services sides of things.
I I think right now we're feeling like it's solid, but we're very cognizant of inflationary pressures pushing down the revenue.
Trends on some of these companies.
But we don't we don't really see any any significant fall off you know most of our businesses are <unk>.
Businesses that are serving downstream customers, we focus on businesses, where there's decent revenue visibility our competitive position or barriers to entry and so when I look at anybody that's got any measurable level of leverage.
The biggest challenges that they face are probably their own isolated instances or maybe some one or two where we have some measure of commercial commercial pressures.
I you know the the only other comment that I would make is when we think about businesses and some of the trends.
We've begun to see some of the withdrawal of the banks from funding companies and it's it's creating an interesting opportunity for us while we traditionally have done a lot of buyout leverage financings. We're now seeing folks that you know the lines.
[noise] aren't getting renewed and they're coming in and those companies tend to have lower leverage and dramatically higher asset coverage I mean folks with with a real asset coverage ratios as opposed to purely cash flow based deals. So I would expect our portfolio will probably migrate to have higher asset cut.
Bridge.
Although that's not our primary focus because of some of that movement and the underlying market. So I realize that's a bit of a diversion from your original question, but I hope that gives you some sense of of what we're seeing.
Oh, Yeah. That's that's really helpful in kind of a good segue into my follow up with.
With everything that's going on with with regional banks and memories of <unk>.
Increased capital requirements for banks I know you guys focus I'm kind of the lower middle market and banks don't necessarily operate there anymore.
Taxes, but I just want to get your sense for potential implications of what's going on with banks in recent months and quarters.
You know the the interesting thing is.
When you think about you know 2030 40 million dollar financings that that's the bread and butter of a lot of the regional banks and their CNI loans and you know many cases it might be acid baked asset backed type financings.
And you know we've seen situations, where you know a bank buys a bank in that bank gets bought in the other bank, it's spot and there is an asset back loan in it and the parent company says I'm not really in that business anymore.
So where does have a 20 or 30 million dollar asset backed receivable back loan go in this marketplace when the when the regional bank that services that area, there's no longer willing to do that deal and and it's not big enough to go to the the Mega Bank.
<unk> They Wanna do 100 to 300 million dollar Abl's. So there is a little bit of a vacuum that's created in in the market such as I'm, referring to in the deal that I referenced earlier.
And so I I think it's it's beginning to happen.
I don't think it's I think it may be somewhat temporary I think you have banks that are probably managing their capital base in reallocating. It based on the strategy, where they want to play but there's also thousands of bank. So there are others that are oh.
Over exposed to the CNI market or aren't didn't stretch there alone to deposit ratios and so what we're finding is.
We're tracking banks that have capacity Wanna grow and not only would they like to finance some of our portfolio companies with us, but they are interested in coming into our bank facilities. So we're kind of re honing to look at the folks that are are going to be active in the CNI market going forward and.
Will likely transition some of our some of our relationship isn't that way and it's for that reason I tend to think it's gotta be somewhat temporary we're going through probably contraction, there's going to be other banks that are that will come in and fill it whether there is a you know how long that that.
Location exists is probably a function of the magnitude of of capital shortfall that that the banks are have I I tend to think it will last a little longer based upon the sheer challenges of of losses of deposits and of regulation.
And it will take a while for that's ultimately work through the system and the lending criteria of those banks to come back into a more positive investment mode. So I think we've probably got if I were.
If I were you know risk to balling I think we can easily got a year, but it's probably not you know multi year, Sir scenario, where the banks are generally not active in certain segments of the market for us.
Got it very helpful. Thanks for answering my questions.
Thank you for calling in.
Once again gentlemen.
Once again, ladies and gentlemen to ask a question. Please press star one on your telephone keypad. Our next question comes from Robert Dot with Raymond James. Please proceed.
Hi, good morning, congratulations on the corner. So a couple of questions I mean first <unk>.
<unk> do you have a target size for the the preferred equity program I mean, nobody cheats in principle a maximum.
6 million Cheval thing, what should we couldn't pick but it's kind of a <unk> how long a large or what proportion of capital structure is actually prefer that to be.
It's a it's a good question since we really haven't brought in a whole lot of it Robert I I think.
If we look out 12 to 18 months from now given the growth rate that we're experiencing.
I would put us at.
Our goal as I've stated in earlier calls us to get closer to $1 billion, which would support of getting a a more traditional major rating agency investment grade rating and so given our current trajectory. That's that's kind of where I'm shooting too given that will be selling that preferred over that period of time.
You know getting it to you know 100 $150 million to be 10, or 15% of our capital base I I don't think it's out of line and it's really doing two things is hedging what what we're going to have in the way of maturity as we get out in in 25 to 626.
And seven and the second is.
We we need to diversify away from the regional banks that have been traditionally supporting the lower middle market Bdcs. So while we might have thought in the past 20 or 25 per cent of our capital base could come from those banks I think the the lessons of the last couple of quarters of some.
<unk> that might be that might be high so I think there'll be a lesser reliance on the on the commercial banks for for funding capacity on a permanent basis inside the portfolio. So if if you were at a billion dollars and we had 100 150 here you know, having 200 to 250 and.
The banks you know is is a is a more modest Ah Ah strategy.
And you know beyond that you have to tell me kind of where the where the medium term you know placement market rates are I I think we will go back to that marketplace, but but certainly given the current spreads it's it's not as attractive as pushing on the the perpetual preferred so.
10% to 15% from the perpetual preferred of a pro forma capitalization I think is where you should think about our target.
Perfect. Thank you.
Detail.
Hopefully I'll <unk> average leverage three and a half I mean interest how quick he is going to be very healthy across the bulk of the <unk>.
Can you give us something <unk> you talked about.
Inflation, you talked about worries about revenue vulgar and things like that walked in.
<unk> <unk> from your perspective, and also from <unk> photos cause company's perspective, what's kind of the primary worried right now cause.
It might not be rates like it is somebody <unk> <unk> on it.
But so you.
You just kind of what's the the is it is it the revenue or the unit volumes policemen questions or what is it that you worry right now if you hurt when we start when we start the when we in the underwrite the credits Robert We we're we're trying to find places that there's going to be a market growth opportunity.
You know will drive volume over time, it will attract additional add on investments and it will it will support an organic the leveraging so our primary focus is R is the growth.
Outlook and underwriting strategy in tact and if it's not intact. Then you know the capital structure and the risk profile that we we started with it's probably something that we have to reevaluate and and when when we start to see that growth.
Outlook diminish.
Our cost of capital and you know our discussions with those sponsors tends to go in the direction of you know what can you do to refinance and and deleverage the the the the the balance sheets and.
We do have some investments where you know growth is just not is going to be harder.
Now if you're in an industrial services business and industrial services aren't necessarily growing in a particular segment, we need to make sure. The leverage is low enough to sustain and continue to amortize the structure and so you know if if it's not coming down you know.
Typically the equity value isn't growing and in most cases those equity sponsors, it's probably time to think about exiting so we can exit via via a refinance because many of these companies have grown to deleverage over time, we can exit when the sponsor seeks to exit.
Because they've they've reached the <unk> the pinnacle peak point for them to exit the business and so we're focusing on growth. So you know I would say right now.
Certain industrial services certain consumer services I think we're also cognizant of of things in the.
Health care space Health care is.
Is a sector that has grown fairly fairly well, but it's beginning to see some price pressures. It will endeavour variably see some reimbursement pressures and it's certainly seeing costs on the.
Ah staffing side that are increasing or will continue to increase and so you know, we're probably mindful of places where staffing availability in staffing costs may fundamentally impair the margins of the business. So I guess when I when I.
Kind of circle back to conclude I would say is the growth is the growth intact and are there pricing pressures that are gonna make it more difficult for them to sustain their margins in cash flows and those are the sectors, where we are probably more acutely focussed on on.
On either deleveraging or deemphasizing, our investments in those sectors.
<unk> I I I I guess I would really appreciate that.
Helpful Last <unk> based on your your your remarks.
When you <unk> huh.
If we're gonna see.
The portfolio and then the problem as long as you've you've been around.
Great you're gonna <unk>.
Gladly funding to help you.
You you'd remarks that you said you you might see more at set back et cetera, because the the banks.
It sounds quite attractive except with <unk>, how does that.
How does your <unk>.
<unk>, which may or may.
Correct me a bit more focused on on on sponsors in many cases to to probably be L. B O activity, how does that sort of thing transitional <unk> two two sourcing more direct.
You can basically take taking over relationships banks logged in building relationships with with a new complete with a sponsor.
That makes sense.
You know it's interesting I I would say, we're probably not gonna change our sourcing framework.
It's it's it's somewhat topical, but we're not going to be able to cover the breath of of where those transactions by come from it's it's far too broad I will say that you know what we have seen so far is you know a good sized companies I mean.
You know 150 million dollar revenue companies in some cases.
Who have bank issues.
They're gonna call, an investment bank or a regional broker or somebody and you know say, we need help and those those those inner intermediaries are gonna say who's open and in today's environment. You know there are a few open bdcs with with <unk>.
Equity capital in and capacity there.
Maybe a few spic's, but they're obviously a little pricey here in a little smaller and so what we're gonna find I think is at least in the near term given the dislocations and the need to serve problems. Those those companies are gonna are gonna call Mmm Mmm who's open to pick up that business and.
In some cases their first commentary as.
You know the banks are are in disarray I don't understand what they want to do they're not acting rationally, let me find somebody that might understand my business and be a good financial partner to help me grow my business and so in the near term I would expect the vast majority of those to come through the intermediary contacts given are.
Position in the marketplace and or I mean.
They can be doing this for quite a while I know David David here, he's not saying a lot, but he's been doing it longer than anybody. So yeah. We're we're gonna we're gonna get our share of course.
Yeah understood. Thank you. Thank you.
Okay that Tonya is there anybody else that would like to ask a question.
No further questions Mister Gladstone, So I'll turn it back to you for closing comment.
Oh Shucks, we wanted more questions [laughter] alright, thanks, a lot I'll love you for calling in and asking US questions and we'll see you next quarter. That's the end of this call.
Thank you. This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.
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