Q2 2024 Trinity Capital Inc Earnings Call

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Operator: Please stand by. Your program is about to begin. If you need assistance during your conference today, please press star zero. Good afternoon.

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Speaker Change: Please stand by. Your program is about to begin. If you need assistance during your conference today, please press star zero.

Angela: Good afternoon, my name is Angela, and I will be your conference operator today.

Angela: My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to Trinity Capital's second quarter 2024 earnings conference call. All participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. Finally, if you should require operator assistance, please press star zero. It is now my pleasure to turn the call over to Ben Malcolmson, Head of Investor Relations for Trinity Capital. Please go ahead.

Angela: At this time, I would like to welcome everyone to Trinity Capital's like at quarter 2024 earnings conference call. All participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. Lastly, if you should require operator assistance, please press star zero.

Angela: Good afternoon. My name is Angela and I will be your conference operator today. At this time, I would like to welcome everyone to Trinity Capital's second quarter 2024 earnings conference call. All participants have been placed in a listen-only mode and the floor will be open for questions following the presentation.

Angela: If you would like to ask a question at that time, please press star 1 on your telephone keypad.

Angela: If at any point your question has been answered, you may remove yourself from the queue by pressing star 2.

Angela: Lastly, if you should require operator assistance, please press star zero.

Ben Malcolmson: It is now my pleasure to turn the call over to Ben Malcolmson, Head of Vester Relations for Trinity Capital. Please go ahead.

Ben Malcolmson: It is now my pleasure to turn the call over to Ben Malcolmson, Head of Investor Relations for Trinity Capital. Please go ahead.

Ben Malcolmson: Thank you, Angela, and welcome to Trinity Capital's earnings conference call at the second quarter of 2024. Today, I'm joined by Kyle Brown, Chief Executive Officer, Michael Testa, Chief Financial Officer, and Jerry Harder, Chief Operating Officer. Also joining us for the Q&A portion of the call are Ron Kundich, Chief Credit Officer, and Sarah Stin, Chief Compliance Officer and General Counsel.

Ben Malcolmson: Thank you, Angela, and welcome to Trinity Capital's earnings conference call for the second quarter of 2024. Today, I'm joined by Kyle Brown, Chief Executive Officer, Michael Testa, Chief Financial Officer, and Jerry Harder, Chief Operating Officer. Also joining us for the Q&A portion of the call are Ron Kundich, Chief Credit Officer, and Sarah Stanton, Chief Compliance Officer and General Counsel. Trinity's financial results were released earlier today and can be accessed on our investor relations website at ir.trinitycap.com. A replay of the call will be available on our website or by using the telephone number provided in today's earnings release.

Ben Malcolmson: Thank you, Angela, and welcome to Trinity Capital's earnings conference call for the second quarter of 2024.

Speaker Change: Today, I'm joined by Kyle Brown, Chief Executive Officer, Michael Testa, Chief Financial Officer, and Jerry Harder, Chief Operating Officer.

Speaker Change: Also joining us for the Q&A portion of the call are Ron Kundich, Chief Credit Officer, and Sarah Sten, Chief Compliance Officer and General Counsel.

Ben Malcolmson: Trinity's financial results were released earlier today and can be accessed on our Investor Relations website at ir.truitycap.com. A replay of the call will be available on our website or by using the telephone number provided in today's earnings release.

Speaker Change: Trinity's financial results were released earlier today and can be accessed on our investor relations website at ir.trinitycap.com.

Speaker Change: A replay of the call will be available on our website or by using the telephone number provided in today's earnings release.

Ben Malcolmson: Before we begin, I would like to remind everyone that certain statements that are not based on historical facts made during this call, including any statements relating to financial guidance. Maybe to be forward-looking statements under federal securities laws. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. We encourage you to refer to our most recent SEC filings for information on some of these risk factors. Trinity Capital assumes no obligation or responsibility to update any forward-looking statements.

Ben Malcolmson: Before we begin, I would like to remind everyone that certain statements that are not based on historical facts made during this call, including any statements relating to financial guidance, may be deemed forward-looking statements under federal securities laws. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. We encourage you to refer to our most recent SEC filings for information on some of these risk factors.

Speaker Change: Before we begin, I would like to remind everyone that certain statements that are not based on historical facts made during this call, including any statements relating to financial guidance.

Speaker Change: may be deemed forward-looking statements under federal securities laws. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements.

Speaker Change: We encourage you to refer to our most recent SEC filings for information on some of these risk factors.

Ben Malcolmson: Trinity Capital assumes no obligation or responsibility to update any forward-looking statements. Please note that the information reported on this call speaks only as of today, August 7, 2024. Therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading. Now, please allow me to turn the call over to Trinity Capital's CEO, Kyle Brown.

Speaker Change: Trinity Capital assumes no obligation or responsibility to update any forward-looking statements. Please note that the information reported on this call speaks only as of today, August 7, 2024.

Ben Malcolmson: Please note that the information reported on this call speaks only as of today, August 7, 2024. Therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading.

Speaker Change: Therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading. Now please allow me to turn the call over to Trinity Capital's CEO , Kyle Brown.

Kyle Brown: Now please allow me to turn the call over to Trinity Capital CEO, Kyle Brown. Great. Thanks, Ben. In the second quarter, we continued executing across all our strategies to deliver a record quarter. We achieved record investment income of $27 million, a 21% increase versus quarter two of last year. Net asset value grew to a record of $680 million, up from $626 million last quarter. Platform AUM reached a record of $1.7 billion, up 36% year-to-year. In Q2, we made $231 million gross fundings, which includes debt investments to 10 new portfolio companies. That deployment was heavily driven by $118 million of equipment financings.

Kyle Brown: Great, thanks Ben. In the second quarter, we continued executing across all our strategies to deliver a record quarter. We achieved record investment income of $27 million, a 21% increase versus quarter two of last year. Net asset value grew to a record $680 million, up from $626 million last quarter. Platform AUM reached a record $1.7 billion, up 36% year over year.

Kyle Brown: Great, thanks Ben. In the second quarter we continued executing across all our strategies to deliver a record quarter.

Kyle Brown: We achieved record investment income of $27 million, 21% increase versus quarter two of last year. Net asset value grew to a record of $680 million, up from $626 million last quarter.

Kyle Brown: Platform AUM reached a record $1.7 billion up 36% year-over-year. In Q2 we made $231 million of gross fundings which includes debt investments to 10 new portfolio companies. That deployment was heavily driven by $118 million of equipment financings.

Kyle Brown: In Q2, we made $231 million of gross funding, which included debt investments to 10 new portfolio companies. That deployment was heavily driven by $118 million of equipment financing. For Q2, Trinity paid a cash dividend of $0.51 per share, representing the 18th consecutive quarter of a consistent and growing dividend.

Kyle Brown: For Q2, Trinity paid a cash dividend of 51 cents per share, representing the 18th consecutive quarter of a consistent and growing dividend.

Speaker Change: For Q2, Trinity paid a cash dividend of $0.51 per share, representing the 18th consecutive quarter of a consistent and growing dividend.

Kyle Brown: Foundation. We haven't been busy this year, executing on several initiatives. While we historically have had a focus on venture debt, we've all been to a platform of diversified verticals. Venture debt is now just one of our products. As today we're comprised of five distinct business verticals that enhance our abilities of scale and reach more of our private credit market. Those five business verticals are tech lending, equipment financing, life sciences, warehouse financing, and our news vertical that we launched, May Sponsor Finance, which focuses on private equity-backed businesses. Each of these business verticals has its own originations, credit, portfolio, and management teams. They have seasoned veterans who lead them, which allows for efficient scalability.

Kyle Brown: We have been busy this year, executing on several initiatives. While we historically have had a focus on venture debt, we've evolved into a platform of diversified verticals. Venture debt is now just one of our products, as today we're comprised of five distinct business verticals that enhance our ability to scale and reach more of our private credit market. Those five business verticals are tech lending, equipment financing, life sciences, warehouse financing, and our newest vertical that we launched in May, Sponsor Finance, which focuses on private equity-backed businesses. Each of these business verticals has its own originations, credit, portfolio, and management team.

Speaker Change: We have been busy this year executing on several initiatives. While we historically have had a focus on venture debt, we've evolved into a platform of diversified verticals. Venture debt is now just one of our products, as today we're comprised of five distinct business verticals that enhance our ability to scale and reach more of our private credit market.

Speaker Change: Those five business verticals are Tech Lending, Equipment Financing, Life Sciences, Warehouse Financing, and our newest vertical that we launched in May, Sponsor Finance, which focuses on private equity-backed businesses.

Speaker Change: Each of these business verticals has its own originations, credit, portfolio, and management teams.

Kyle Brown: They have seasoned veterans who lead them, which allows for efficient scalability. Our commitment to expanding the platform is highlighted by our investments in these strategic growth initiatives, which have generated extraordinary momentum. We also recently announced our expansion into Europe, giving us global exposure, better access to an active tech landscape, and allowing us to support high-growth companies across multiple continents. In support of our growth, we've been active in our capital fundraising efforts.

Kyle Brown: Our commitment to expanding the platform is highlighted by our investments in these strategic growth initiatives, which have generated extraordinary momentum. We also recently announced our expansion into Europe, giving us global exposure, better access to an active tech landscape, and allowing us to support high growth companies across multiple continents. In support of our growth, we've been active in our capital fundraising efforts. In Q2, we raised nearly $47 million in that proceeds through our ATHLE market equity program, all out of premium to NAF. Subsequent to quarter end, we raised $115 million of unsecured notes during in 2029 and completed an extension and upsized to our revolving credit facility.

Speaker Change: They have seasoned veterans who lead them, which allow for efficient scalability.

Speaker Change: Our commitment to expanding the platform is highlighted by our investments in these strategic growth initiatives, which have generated extraordinary momentum.

Speaker Change: We also recently announced our expansion into Europe , giving us global exposure, better access to an active tech landscape, and allowing us to support high-growth companies across multiple continents.

Kyle Brown: In Q2, we raised nearly $47 million in net proceeds through our At-The-Market Equity Program, all at a premium to NAV. Subsequent to quarter end, we raised $115 million of unsecured notes, maturing in 2029, and completed the extension and upsize to our revolving credit facility.

Speaker Change: In support of our growth, we've been active in our capital fundraising efforts.

Speaker Change: In Q2, we raised nearly $47 million in net proceeds through our at-the-market equity program, all at a premium to NAV. Subsequent to quarter end, we raised $115 million of unsecured notes, ensuring in 2029, and completing an extension and upsize to our revolving credit facility.

Kyle Brown: In June, we announced a new private vehicle through our strategic partnership with the Eagle Point Credit. Trinity's wholly owned RIA is the advisor to the vehicle, further enhancing our sources of capital and generating fee income that flows directly to our shareholders. Trinity is an internally managed BDC. We're different than externally managed BDCs in that when you buy our stock, you're buying into a pool of diversified assets across our various verticals, yes, and you're buying into a management company. We are not like externally managed BDCs that are simply a pool of assets. Over the past year, we started to leverage our internally managed structure as we launched a joint venture and an RIA to allow us to secure private capital.

Kyle Brown: In June, we announced a new private vehicle through our strategic partnership with Eagle Point Credit. Trinity's wholly owned RIA is the advisor to the vehicle, further enhancing our sources of capital and generating fee income that flows directly to our shareholders. Trinity is an internally managed BDC. We're different than externally managed BDCs in that when you buy our stock, you're buying into a pool of diversified assets across our various verticals, yes, but you're also buying into a management company.

Speaker Change: In June , we announced a new private vehicle through our strategic partnership with Eagle Point Credit.

Speaker Change: Trinity's wholly owned RIA is the advisor to the vehicle, further enhancing our sources of capital and generating fee income that flows directly to our shareholders.

Kyle Brown: We're not like externally managed BDCs that are simply a pool of assets. Over the past year, we started to leverage our internally managed structure as we launched a joint venture and an RIA to allow us to secure private capital. We began to generate income above and beyond the returns we collect from our direct lending.

Speaker Change: Trinity is an internally managed BDC.

Speaker Change: We're different than externally managed BDCs in that when you buy our stock, you're buying into a pool of diversified assets across our various verticals, yes, and you are buying into a management company. We're not like externally managed BDCs that are simply a pool of assets.

Speaker Change: Over the past year, we started to leverage our internally managed structure as we launched a joint venture and an RIA to allow us to secure private capital. We began to generate income above and beyond the returns we collect from our direct lending. Our goal is to continue our creative platform growth, driving further value for our shareholders.

Kyle Brown: We began to generate income above and beyond the returns we collect from our direct lending. Our goal is to continue our creative platform growth, driving further value for our shareholders.

Kyle Brown: Our goal is to continue our creative platform growth, driving further value for our shareholders. Our team of nearly 90 professionals is a cornerstone of Trinity's track record and is the key to our trajectory going forward. We're committed to fostering a culture of excellence built around six pillars, humility, integrity, trust, uncommon care for our people and partners, continuous learning, and an entrepreneurial spirit. These values are what create the differentiated lending platform we've built here at Trinity.

Kyle Brown: Our team of nearly 90 professionals is the cornerstone of Trinity's track record and is the key to our trajectory going forward. We're committed to fostering a culture of excellence built around six pillars: humility, integrity, trust, uncommon care for our people and partners, continuous learning, and an entrepreneurial spirit. These values are what create the differentiated lending platform we built here at Trinity. We strive to provide value that exceeds expectations in every part of the Trinity platform for employees, clients, and investors. It's also important to note that because we are an internally managed BDC, our employees, management, and board all own the same shares as you do are investors.

Speaker Change: Our team of nearly 90 professionals is a cornerstone of Trinity's track record and is the key to our trajectory going forward.

Speaker Change: We're committed to fostering a culture of excellence built around six pillars, humility, integrity, trust,

Speaker Change: Uncommon care for our people and partners, continuous learning, and an entrepreneurial spirit. These values are what create the differentiated lending platform we've built here at Trinity. We strive to provide value that exceeds expectations in every part of the Trinity platform, for employees and clients and investors.

Kyle Brown: We strive to provide value that exceeds expectations in every part of the Trinity platform for employees, clients, and investors. It's also important to note that because we are an internally managed BDC, our employees, management, and board all own the same shares as you do, our investors. We can't think of a better way to maintain 100% alignment with our shareholders in order to maximize returns. We continue to take a selective approach to new opportunities.

Speaker Change: It's also important to note that because we are an internally managed BDC, our employees, management, and board all own the same shares as you do, our investors. We can't think of a better way to maintain 100% alignment with our shareholders in order to maximize return.

Kyle Brown: We can't think of a better way to maintain a hundred percent alignment with our shareholders in order to maximize return. We continue to take a selective approach to new opportunities. As a direct lender, we maintain our own pipeline and have originations strategically located in major markets, cultivating deep relationships with sponsors, banks, and operators. We are the agent on the vast majority of our loans and do not buy paper in large syndicated deals. Year to date through June 30, 40 of our portfolio companies have collectively raised just shy of $2 billion of equity, far exceeding our portfolio's 2023 capital rating pace and demonstrating our portfolio's quality and ability to secure funding.

Kyle Brown: As a direct lender, we maintain our own pipeline and have originations strategically located in major markets, cultivating deep relationships with sponsors, banks, and operators. We are the agent on the vast majority of our loans and do not buy paper in large syndicated deals.

Speaker Change: We continue to take a selective approach to new opportunities. As a direct lender, we maintain our own pipeline and have originations strategically located in major markets, cultivating deep relationships with sponsors, banks, and operators. We are the agent on the vast majority of our loans and do not buy paper in large syndicated deals.

Kyle Brown: Year-to-date through June 30th, 40 of our portfolio companies have collectively raised just shy of $2 billion of equity, far exceeding our portfolio's 2023 capital raising pace and demonstrating our portfolio's quality and ability to secure funding. We ended the quarter with a strong investment pipeline, including $436 million of unfunded commitments, leaving us well positioned for continued growth in the second half of 2024. As a reminder, all of Trinity's unfunded commitments are subject to ongoing diligence and approval by our investment committee. Credit and underwriting, and portfolio management are fundamental to our success. We remain very selective and adhere to a rigorous diligence process, with an increasingly smaller percentage of our deals reaching the underwriting stage.

Speaker Change: Year-to-date, through June 30th, 40 of our portfolio companies have collectively raised just shy of $2 billion of equity, far exceeding our portfolio's 2023 capital-raising pace and demonstrating our portfolio's quality and ability to secure funding.

Kyle Brown: We ended the quarter with a strong investment pipeline, including $436 million of unfunded commitments, leaving us well positioned for continued growth in the second half of 2024. As a reminder, all of Trinity's unfunded commitments are subject to ongoing diligence and approval by our Investment Committee. Credit and underwriting and portfolio management are fundamental to our success. We remain very selective and adhere to a rigorous diligence process, with an increasingly smaller percentage of our deals reaching the underwriting stage. Our distinct structure and collaborative originations, credit and portfolio teams take a proactive approach to managing our inbound opportunities and active portfolio companies, all of which greatly mitigate risk and position us to excel in all macroeconomic cycles.

Speaker Change: We ended the quarter with a strong investment pipeline, including $436 million of unfunded commitments, leaving us well-positioned for continued growth in the second half of 2024. As a reminder, all of Trinity's unfunded commitments are subject to ongoing diligence and approval by our Investment Committee.

Speaker Change: Credit and underwriting and portfolio management are fundamental to our success. We remain very selective.

Speaker Change: and adhere to a rigorous diligence process with an increasingly smaller percentage of our deals reaching the underwriting stage.

Kyle Brown: Our distinct structure and collaborative originations, credit, and portfolio teams take a proactive approach to managing our inbound opportunities in active portfolio companies, all of which greatly mitigate risk and position us to excel in all macroeconomic cycles. At Trinity, we pride ourselves on three core principles, exhibiting uncommon care for our employees, customers, and stakeholders, serving our clients by being partners rather than just money, and then providing outsized returns for our shareholders. We are excited about the future.

Speaker Change: Our distinct structure and collaborative originations, credit, and portfolio teams take a proactive approach to managing our inbound opportunities in active portfolio companies, all of which greatly mitigate risk and position us to excel in all macroeconomic cycles.

Kyle Brown: At Trinity, we pride ourselves on three core principles: exhibiting uncommon care for our employees, customers, and stakeholders; serving our clients by being partners rather than just money; and then providing outside returns for our shareholders.

Speaker Change: At Trinity, we pride ourselves on three core principles, exhibiting uncommon care for our employees, customers, and stakeholders, serving our clients by being partners rather than just money, and then providing outsized returns for our shareholders.

Kyle Brown: We are excited about the future. We plan to continue to invest in our teams and systems, diversifying our investments to create a best-in-class direct lending platform.

Kyle Brown: We plan to continue to invest in our teams and systems, diversifying our investments to create a best-in-class direct lending platform. We look forward to extending our momentum as we grow and maximize value for our shareholders. And with that, I'll turn the call over to our CFO, Michael Testa.

Speaker Change: We are excited about the future. We plan to continue to invest in our teams and systems, diversifying our investments to create a best-in-class direct lending platform.

Kyle Brown: We look forward to extending our momentum as we grow and maximize value for our shareholders.

Michael Testa: And with that, I'll turn the call over to our CFO, Michael Testa, to discuss financial results in more detail. Michael. Thank you, Kyle. In the second quarter, we achieved record total investment income of $54.6 million, resulting in an 18.7% increase over the same period in 2023. Our effective yield on the portfolio for Q2 was once again an industry-leading 16% in our core yield, which includes the income, with strong at 14.7%.

Michael Testa: We look forward to extending our momentum as we grow and maximize value for our shareholders. And with that, I'll turn the call over to our CFO Michael Testa to discuss financial results in more detail. Michael.

Michael Testa: Thank you, Kyle. In the second quarter, we achieved a record total investment of $54.6 million, resulting in an 18.7% increase over the same period in 2023. Our effective yield on the portfolio for Q2 was once again an industry-leading 16%. Our core yield, which excludes fee income, was strong at 14.7%. Net investment income for the second quarter was $26.7 million, or $0.53 per basic share, compared to $22.1 million, or $0.61 per basic share, in the same period of the prior year.

Michael Testa: Thank you, Kyle. In the second quarter, we achieved record total investment income.

Michael Testa: A $54.6 million resulting in an 18.7% increase over the same period in 2023.

Michael Testa: Our effective yield on the portfolio for Q2 was once again an industry-leading 16% in our core yield, which excludes fee income, was strong at 14.7%.

Michael Testa: Net investment income for the second quarter was $26.7 million, or 53 cents per basic share, compared to $22.1 million, or 61 cents per basic share, in the same period of the prior year. The increase of $4.6 million for a 21% year-over-year net investment income group is primarily triple to the continued earnings power of the platform. Our net investment income represents 104% coverage of our quarterly distribution. In our estimated, undistributed taxable income is approximately $64 million or $1.24 per share. We continue to reinvest this capital for the benefit of our investors and continue to maintain a consistent and meaningful distribution to our shareholders.

Michael Testa: Net investment income for the second quarter was $26.7 million, or $0.53 per basic share, compared to $22.1 million, or $0.61 per basic share, in the same period of the prior year.

Michael Testa: The increase of $4.6 million, for a 21% year-over-year net investment income growth, is primarily attributable to the continued earnings power of the platform. Our net investment income represents 104% coverage of our quarterly distribution, and our estimated undistributed taxable income is approximately $64 million, or $1.24 per share.

Michael Testa: The increase of $4.6 million for a 21% year-over-year net investment income growth is primarily attributable to the continued earnings power of the platform.

Michael Testa: Our net investment income represents 104% coverage of our quarterly distribution and our estimated undistributed taxable income is approximately $64 million or $1.24 per share.

Michael Testa: We continue to reinvest this capital for the benefit of our investors and continue to maintain a consistent and meaningful distribution to our shareholders. Our platform continues to generate strong returns for our shareholders, with an ROA of 16.3% based on net investment income over average equity, and an ROAA of 7.4% based on net investment income over average toll assets. As of June 30, 2024, our NAV was $680 million, which increased from $626 million as of March 31, 2024.

Michael Testa: We continue to reinvest this capital for the benefit of our investors.

Michael Testa: and continue to maintain a consistent and meaningful distribution to our shareholders.

Michael Testa: Our platform continues to generate strong returns for our shareholders, with ROA of 16.3% based on net investment income over average equity, and ROA of 7.4% based on net investment income over average total assets. As of June 30, 2024, our NAV was $680 million, which increased from $626 million as of March 31, 2024. And our corresponding NAV per share was $13.12 at the end of Q2, which increased 24 cents from $12.88 per share as of March 31, 2024.

Michael Testa: Our platform continues to generate strong returns for our shareholders.

Michael Testa: with ROAE of 16.3% based on net investment income over average equity and ROAA of 7.4% based on net investment income over average toll assets.

Michael Testa: As of June 30th, 2024, our NAV was $680 million, which increased from $626 million as of March 31st, 2024.

Michael Testa: And our corresponding NAV per share was $13.12 at the end of Q2, which increased 24 cents from $12.88 per share as of March 31st, 2024. The increase in NAFPA shares this quarter was primarily attributable to out-earning or quality distribution, net portfolio gains, and accretive share activity.

Michael Testa: And our corresponding NAV per share was $13.12 at the end of Q2, which increased 24 cents from $12.88 per share as of March 31st, 2024.

Michael Testa: The increase in NAV per share of this quarter was primarily triple to outerning our quarterly distribution, net portfolio gains, and accretive share activity. Under our ATM program in Q2, we raised $46.9 million in net proceeds at an accretive premium to NAV to fund our ongoing portfolio growth. as of June 30th, 2024. We had total equity of $141 million, comprised of $95 million of undrawn capacity under our credit facility and approximately $46 million in unreserved cash and cash equipment.

Michael Testa: The increase in NAFTA per share this quarter was primarily attributable to out-earning or quality distribution, net portfolio gains, and accretive share activity.

Jerry Harder: Under our ATM program in Q2, we raised $46.9 million in net proceeds at an accretive premium to NAV to fund our ongoing portfolio growth. As of June 30th, 2024, we had total equity of $141 million, comprised of $95 million of undrawn capacity under our credit facility and approximately 46 million dollars in unrestricted cash and cash. Subsequent to the end of the quarter, we further enhanced our balance sheet and liquidity position by raising $115 million through the issuance of investment grade unsecured notes maturing in 2029.

Michael Testa: Under our ATM program in Q2, we raised $46.9 million in net proceeds at an accretive premium to NAV to fund our ongoing portfolio growth.

Michael Testa: As of June 30, 2024, we had total equity of $141 million, comprised of $95 million of undrawn capacity under our credit facility and approximately $46 million in unrestricted cash and cash equivalents.

Michael Testa: Subsequent to the end of the quarter, we further enhance our balance and liquidity position by raising $115 million through the issuance of investment-grade unsecured notes, maturing in 2029. We also amended our key bank credit facility, upsized from $350 million to $440 million in commitments, and it includes an accordion feature pursuant to which we may increase the size of the credit facility to an aggregate principal amount of $690 million. We believe our current debt funding mix, which is currently 67% unscured debt, is appropriate and we remain consistent with managing the right side of the value sheet.

Michael Testa: Subsequent to the end of the quarter, we further enhanced our balance sheet and liquidity position by raising $115 million through the issuance of investment-grade unsecured notes.

Jerry Harder: We also amended our KeyBank credit facility to upsize it from $350 million to $440 million in commitments. And it includes an accordion feature, pursuant to which we may increase the size of the credit facility to an aggregate principal amount of $690 million. We believe our current debt funding mix, which is currently 67% unsecured debt, is appropriate, and we remain consistent with managing the right side of the balance. We also continue to realize the benefit of our co-investment in the joint venture, which in Q2 provided approximately $1.3 million, or $0.03 per share, of interest, dividend, and fee income to the BDC.

Michael Testa: Maturing in 2029.

Michael Testa: We also amended our KeyBank credit facility upsized from $350 million to $440 million in commitments, and it includes an accordion feature pursuant to which we may increase the size of the credit facility to an aggregate principal amount of $690 million.

Michael Testa: We believe our current debt funding mix, which is currently 67% unsecured debt, is appropriate and we remain consistent with managing the right side of the balance sheet.

Michael Testa: We also continue to realize the benefit of our co-investment and the joint venture, which in Q2 provided approximately $1.3 million, or $3 cents per share, of interest, dividend, and fee income to the BDC.

Michael Testa: We also continue to realize the benefit of our co-investment in the joint venture, which in Q2 provided approximately $1.3 million or $0.03 per share of interest, dividend, and fee income to the BDC.

Michael Testa: We also announced the launch of a private vehicle managed by our RIA subsidiary. And as of June 30th, 2024, we had more than $250 million of assets under management in these private vehicles, providing incremental capital for growth and a creative return to our shareholders. In the second quarter, we repaid $30 million of our 2025 notes using a portion of the proceeds raised last quarter from unsecured notes maturing in 2029. Our weighted average cost of debt increased slightly from the prior quarter at 7.6%, and we continue to benefit from the low fixed rate debt, having access to unsecured market during the period of lower interest rates.

Jerry Harder: We also announced the launch of a private vehicle managed by our RIA subsidiary. And as of June 30, 2024, we had more than $250 million that passed under management in these private vehicles, providing incremental capital for growth and accretive returns to our shareholders. In the second quarter, we repaid $30 million of our 2025 notes using a portion of the proceeds raised last quarter from unsecured notes maturing in 2029. Our weighted average cost of debt increased slightly from the prior quarter at 7.6%, and we continue to benefit from the low fixed-rate debt, having accessed the unsecured market during a period of lower interest rates.

Speaker Change: We also announced the launch of a private vehicle managed by our RIA subsidiary.

Speaker Change: And as of June 30, 2024, we had more than $250 million of assets under management in these private vehicles, providing incremental capital for growth and accretive returns to our shareholders.

Speaker Change: In the second quarter, we repaid $30 million of our 2025 notes using a portion of the proceeds raised last quarter from unsecured notes maturing in 2029.

Speaker Change: Our weighted average cost of debt increased slightly from the prior quarter at 7.6% and we continue to benefit from the low fixed rate debt having accessed the unsecured market during a period of lower interest rates.

Michael Testa: Our net leverage ratio, which represents principal debt outstanding, less cash on hand, was 107 times as of June 30th, 2024.

Jerry Harder: Our net leverage ratio, which represents principal debt outstanding less cash on hand, was 107 times as of June 30th, 2020. Both our strong liquidity position and the fact that they were operating within the targeted leverage ratio provide Trinity with the flexibility to manage a strong pipeline and be opportunistic in the marketplace. I'll now turn the call over to our COO, Jerry Harder, to discuss our portfolio performance and platform in more detail. Jerry. Thank you, Michael.

Speaker Change: Our net leverage ratio, which represents principal debt outstanding, less cash on hand, was 107 times as of June 30, 2024.

Jerry Harder: Both are strong liquidity position in the fact they were offering within the target leverage ratio, provide Trinity with the flexibility and manage a strong pipeline and be opportunistic in the market terms. I'll now turn the call over to our COO, Jerry Harder, to discuss our portfolio performance and platform in more detail, Jerry. Thank you, Michael. Since our last call, Trinity has had an active summer. Our expansion into Europe and the launch of the first private fund managed under our RIA strengthened our business and enhanced our ability to offer customized financing solutions to our evolving client base and new entrants in the market.

Speaker Change: our strong liquidity to position in the fact they were opering within the targeted leverage ratio

Speaker Change: Provide Trinity with the flexibility to manage a strong pipeline and be opportunistic in the marketplace.

jry harder: I'll now turn the call over to our COO Jerry Harder to discuss our portfolio performance and platform in more detail. Jerry. Thank you, Michael.

Jerry Harder: Since our last call, Trinity has had an active summer. Our expansion into Europe and the launch of the first private fund managed under our RIA strengthen our business and enhance our ability to offer customized financing solutions to our evolving client base and new entrants in the market. We are dedicated to supporting companies at every stage of their growth journey. At the end of the second quarter, on a cost basis, our total portfolio consisted of approximately 71% secured loans, 23% equipment financing, 4% equity, and 2% warrants.

jord: Since our last call, Trinity has had an active summer.

Speaker Change: Our expansion into Europe and the launch of the first private fund managed under our RIA strengthen our business and enhance our ability to offer customized financing solutions to our evolving client base and new entrants in the market. We are dedicated to supporting companies at every stage of their growth journey.

Jerry Harder: We are dedicated to supporting companies at every stage of their growth journey. At the end of the second quarter on a cost basis, our total portfolio consisted of approximately 71% secured loans, 23% equipment financings, 4% equity, and 2% warrants. The composition of our portfolio remained consistent with prior quarters, with the diversification across investment type, transaction size, industry, and geography. Our portfolio is segmented across 21 industry categories, with our largest industry exposure, finance and insurance, representing 13.1% of the portfolio at cost. Cost. Our next largest industry concentrations are green technology and medical devices, representing 10.9% and 8.9% of the portfolio at cost, respectively.

Speaker Change: At the end of the second quarter, on a cost basis, our total portfolio consisted of approximately 71% secured loans, 23% equipment financings, 4% equity, and 2% warrants.

Jerry Harder: The composition of our portfolio remained consistent with prior quarters, with diversification across investment type, transaction size, industry, and geography. Our portfolio is segmented across 21 industry categories, with our largest industry exposure, finance and insurance, representing 13.1% of the portfolio at cost. Our next largest industry concentrations are green technology and medical devices, representing 10.9% and 8.9% of the portfolio at cost, respectively. Life sciences related industries, including medical devices, as well as healthcare technology, biotechnology, diagnostics, and tools, collectively made up 21.4% of our total portfolio on a cost basis.

Speaker Change: The composition of our portfolio remained consistent with prior quarters, with diversification across investment type, transaction size, industry, and geography.

Speaker Change: Our portfolio is segmented across 21 industry categories, with our largest industry exposure, finance and insurance, representing 13.1 percent of the portfolio at cost.

Speaker Change: Our next largest industry concentrations are green technology and medical devices, representing 10.9% and 8.9% of the portfolio at cost, respectively.

Jerry Harder: Life sciences related industries, including medical devices, as well as healthcare technology, biotechnology, diagnostics, and tools, collectively made up 21.4% of our total portfolio on a cost basis. Among our five business verticals, the detailed breakdown of our $231 million of growth fundings in Q2 went as follows. 52% to our equipment financing business, 15% to life sciences, 15% to tech lending, 9% to sponsor finance, and 6% to warehouse lending. As of the end of Q2, our largest debt financing was to Rocket Lab USA Inc and represents 3.6 of our debt portfolio and 3.4% of our total portfolio on a cost basis.

Speaker Change: Life Sciences related industries, including medical devices, as well as healthcare technology, biotechnology, diagnostics and tools, collectively made up 21.4% of our total portfolio on a cost basis.

Jerry Harder: Among our five business verticals, the detailed breakdown of our $231 million in gross funding in Q2 went as follows: 52% to our equipment financing business; 15% to life sciences; 15% to tech lending.

Speaker Change: Among our five business verticals, the detailed breakdown of our 231 million dollars of gross fundings in Q2 went as follows.

Speaker Change: 52% to our equipment financing business.

Speaker Change: 15% to Life Sciences, 15% to Tech Lending,

Jerry Harder: 9% to sponsor finance, and 6% to warehouse lend. As of the end of Q2, our largest debt financing was to Rocket Lab USA, Inc., and it represents 3.6% of our debt portfolio and 3.4% of our total portfolio on a cost basis. Our 10 largest debt investments collectively represent 24.7% of our total portfolio on a cost basis. Moving on to credit, the credit quality of our portfolio companies remains stable, with approximately 98.2% of our portfolio performing on a fair value basis.

Speaker Change: 9% to sponsor finance and 6% to warehouse lending.

Speaker Change: As of the end of Q2, our largest debt financing was to Rocket Lab USA Inc. and represents 3.6% of our debt portfolio and 3.4% of our total portfolio on a cost basis.

Jerry Harder: Our 10 largest debt investments collectively represent 24.7% of our total portfolio on a cost basis. Moving on to credit, the credit quality of our portfolio companies remains stable, with approximately 98.2% of our portfolio performing on a fair value basis. Our average internal credit rating for the second quarter stood at 2.7, based on our one to five rating system, with five indicating very strong performance. This rating is in line with our average credit rating in each of the last four quarters and reinforces Trinity's track record of low loss rates. The total number of credits in our lowest two credit tiers decreased from Q1 2024 to Q2 2024 and was reduced on both a cost and a fair value basis.

Speaker Change: Our 10 largest debt investments collectively represent 24.7% of our total portfolio on a cost basis.

Speaker Change: Moving on to credit. The credit quality of our portfolio companies remains stable with approximately 98.2% of our portfolio performing on a fair value basis.

Jerry Harder: Our average internal credit rating for the second quarter stood at 2.7 based on our 1 to 5 rating system, with 5 indicating very strong performance. This rating is in line with our average credit rating for each of the last four quarters and reinforces Trinity's track record of low loss ratings. The total number of credits in our lowest two credit tiers decreased from Q1 2024 to Q2 2024 and was reduced on both a cost and a fair value basis.

Speaker Change: Our average internal credit rating for the second quarter stood at 2.7, based on our 1-5 rating system, with 5 indicating very strong performance.

Speaker Change: This rating is in line with our average credit rating in each of the last four quarters and reinforces Trinity's track record of low loss rates.

Speaker Change: The total number of credits in our lowest two credit tiers decreased from Q1 2024 to Q2 2024 and was reduced on both a cost and a fair value basis.

Jerry Harder: Portfolio companies on non-accrual decreased to four in Q2 from five in the first quarter. At the end of Q2, our non-accrual credits had a total fair value of approximately $24 million, representing 1.8% of the total debt portfolio. At quarter end, 78% of our total principal outstanding was backed by first position liens on enterprise equipment or both. The weighted average loan to value of our entire portfolio sits at 21%. While 69% of our portfolio companies have a loan to value of less than 15%. These statistics demonstrate that our portfolio companies are generally not over-levered and are in a healthy position to service the debt, even in instances when our loan may not be in first position.

Jerry Harder: Portfolio companies on non-accrual decreased to four in Q2 from five in the first quarter. At the end of Q2, our non-accrual credits had a total fair value of approximately $24 million, representing 1.8% of the total debt portfolio. At quarter end, 78% of our total principal outstanding was backed by first position liens on enterprise, equipment, or both. The weighted average loan-to-value of our entire portfolio sits at 21%, while 69% of our portfolio companies have a loan-to-value of less than 15%.

Speaker Change: Portfolio companies on non-accrual decreased to four in Q2 from five in the first quarter.

Speaker Change: At the end of Q2, our nonaccrual credits had a total fair value of approximately $24 million, representing 1.8% of the total debt portfolio.

Speaker Change: At quarter end, 78% of our total principal outstanding was backed by first position liens on enterprise, equipment, or both.

Speaker Change: The weighted average loan-to-value of our entire portfolio sits at 21 percent.

Speaker Change: while 69% of our portfolio companies have a loan-to-value of less than 15%.

Jerry Harder: These statistics demonstrate that our portfolio companies are generally not overly levered and are in a healthy position to service the debt, even in instances when our loan may not be in first position. In closing, I'd like to remind our stakeholders that our team is made up of dozens of veteran investment professionals who are solely focused on portfolio management and asset quality. They've always taken a prudent approach to the overall health of our portfolio companies.

Speaker Change: These statistics demonstrate that our portfolio companies are generally not over levered and are in a healthy position to service the debt even in instances when our loan may not be in first position.

Jerry Harder: In closing, I'd like to remind our stakeholders that our team has made up of dozens of veteran investment professionals who are solely focused on portfolio management and asset quality. They've always taken a vigilant approach to the overall health of our portfolio companies, and when necessary, they find resolutions that benefit both the portfolio company as well as our shareholders.

Speaker Change: In closing, I'd like to remind our stakeholders that our team is made up of dozens of veteran investment professionals who are solely focused on portfolio management and asset quality.

Speaker Change: They've always taken a vigilant approach to the overall health of our portfolio companies, and when necessary, they find resolutions that benefit both the portfolio company as well as our shareholders.

Operator: At this time, we'd like to open the line for questions. Operator? At this time, if you would like to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue at any time by pressing Star 2. Once again, that is star 1 to ask a question. We will pause for a moment to allow questions to queue.

Jerry Harder: And when necessary, they find solutions that benefit both the portfolio company as well as our shareholders. And at this time, we'd like to open the line for questions. Operator? At this time, if you would like to ask a question, please

Speaker Change: And at this time, we'd like to open the line for questions. Operator?

Operator: At this time, if you would like to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. Once again, that is star 1 to ask a question. We will pause for a moment to allow questions to queue. We'll take our first question from Doug Harder with UBS. Please go ahead.

Speaker Change: At this time, if you would like to ask a question, please press star 1 on your telephone keypad.

Speaker Change: You may remove yourself from the queue at any time by pressing star 2.

Speaker Change: Once again, that is star one to ask a question.

Speaker Change: We will pause for a moment to allow questions to queue.

Doug Harder: We'll pick our first question from Doug Harder with UBS. Please go ahead. Hi, this is Doug. Can you talk about, you saw a decline in one and not a cruel asset. Talk about the pace of resolution on the other four and what you're seeing more broadly in terms of credit clause.

Ron Kundich: This is Doug. Can you talk about the decline in one of the non-accrual assets, and talk about the pace of resolution on the other four and what you're seeing more broadly in terms of credit quality.

Speaker Change: We'll take our first question from Doug Harder with UBS. Please go ahead.

Doug Harder: this is can you talk about you saw a decline in one nonaccrual assets talk about the pace of resolution on the other four and what you're seeing more broadly in terms of credit qu

Ron Kundich: Hey Doug, this is Ron Kundich, Chief Credit Officer.

Ron Kundich: Hey, Doug. This is Ron Kundich, Chief Credit Officer. I would be happy to take that. We have one fewer non-accrual credit this quarter, as opposed to last, and we actually promoted a company off of the non-accrual list during the quarter. And it is now a portfolio performing asset. The remaining four companies are holdovers from Q1, um, you know, they're in various stages of working out, as you might expect of note. Nexi is a 2575 participant deal with another publicly traded company.

Ron Kundich: Be happy to take that. As you noted, we have one fewer non-accrual credit this quarter as opposed to last. Actually, we promoted a company off of the non-accrual list during the quarter. And it is now a portfolio performing asset.

paydog: paydog this is a runon kindagege chief credit officer be happy to take that as you noted

Speaker Change: We have one fewer non-accrual credit this quarter, as opposed to last, actually promoted a company off of the non-accrual list during the quarter, and it is now a portfolio performing asset.

Ron Kundich: The remaining four companies are holdovers from Q1. You know, they're in various stages of work out, as you might expect of note.

Speaker Change: The remaining four companies are holdovers from Q1.

Speaker Change: Thank you.

Speaker Change: You know they're in various stages of

Ron Kundich: Next seat is a 25 75 participant deal with another publicly traded BDC. You'll see some movement on that and hear some news on that next quarter, but that company has gone through the Canadian equivalent of a bankruptcy. And you know, as a subsequent event has reconstituted itself, part of our debt has rolled forward; another portion of our debt has converted to equity. The remaining three companies remain in the same status of last quarter. Can get into a little more detail if you like.

Speaker Change: Worked out as you might expect of note

Speaker Change: Nexi is a 25-75 participant deal with another publicly traded BDC.

Ron Kundich: You'll you'll see some movement on that and hear some news on that next quarter, but that company has gone through the Canadian equivalent of a bankruptcy and, as a subsequent event has reconstituted itself, part of our debt has rolled forward, and another portion of our debt has converted to equity. The remaining three companies remain in the same status as last quarter.

Speaker Change: You'll see some movement on that and hear some news on that next quarter, but that company has gone through the Canadian equivalent of a bankruptcy.

Speaker Change: As a subsequent event has reconstituted itself, part of our debt has rolled forward, another portion of our debt has converted to equity.

Speaker Change: The remaining three companies remain in the same status of last quarter. You can get into a little more detail if you'd like.

Ron Kundich: I can get into a little more detail if you'd like.

Doug Harder: I appreciate that answer. Thank you.

Ron Kundich: I appreciate that answer. Thank you.

Speaker Change: I appreciate that answer. Thank you.

Christopher Nolan: As a reminder, if you would like to ask a question today, please press star and one on your telephone keypad. We'll take our next question from Christopher Nolan with Layton Bergthalvin.

Operator: As a reminder, if you would like to ask a question today, please press star and 1 on your telephone keypad. We'll take our next question from Christopher Nolan on Leidenberg-Feldman.

Speaker Change: sto

Speaker Change: As a reminder, if you would like to ask a question today, please press star and 1 on your telephone keypad.

Christopher Nolan: Hey guys, can you hear me? Great. Multi-sector holdings. I saw it given the new venture with Eagle Point.

christophernelllen: We'll take our next question from Christopher Nolan with Ladenburg Feldman.

Michael Testa: Great. Multi-sector holdings. I thought, given the new venture with Eagle Point, should we expect... Triple, excuse me, Trinity to carry debt for, any debt for that entity, similar to you?

Speaker Change: guys going to hearme

christophernelllen: like you 't of bit

Speaker Change: Multisector holdings.

Michael Testa: I mean, should we expect triple us to be trying to carry debt for any debt for that entity, similar that you do for senior credit court? Hey Chris, this is Michael. At the current time, it is just an equity investment.

Speaker Change: I thought, given the new venture with Eagle Point, should we expect...

Speaker Change: to carry debt for any debt for that entity similar that you do for Senior Credit Corp.

Michael Testa: Hey, Chris, this is Michael. At the current time, it's just an equity investment. We'll look as that investment grows and we start to scale, whether it does make sense from a tax perspective, as well as from an income earning perspective, to bifurcate our investment.

Speaker Change: Hey Chris, this is Michael. At the current time it's just an equity investment.

Michael Testa: We'll look at that investment, you know, grows. We start the scale, whether it does make sense from a tax perspective, as well as, you know, income earning perspective to bifurcate our investments. Great.

Speaker Change: will look at that investment.

Speaker Change: It grows when we start to scale, whether it does make sense from a tax perspective as well as an income earning perspective to bifurcate our investments.

Michael Testa: Great. But should we look at senior credit corporations, sort of like a senior loan fund?

Michael Testa: And then, should we look at senior credit court sort of like a senior loan fund? Bond. It's a co-investment vehicle. It invests rateably alongside the BDC, and which is really how the co-investment vehicles that we now manage are set up.

Speaker Change: Great, and then should we look at senior credit corps, sort of like a senior loan fund?

Michael Testa: It's a co-investment vehicle. It invests rateably, alongside the BDC, which is really how the co-investment vehicles that we now manage are set up; they're an outside partner.

Speaker Change: It's a co-investment vehicle. It invests rateably alongside the BDC, which is really how the co-investment vehicles that we now manage are set up.

Sarah Stanton: Is there an outside partner for that one? Are you speaking about the senior credit fund, or are you talking about the new fund we just launched? I'm sorry. Oh, I'm just speaking about Senior Credit Corp specifically. Yeah, we go this close to that is, but we do have an institutional investor that we partner with there. Okay, great.

Michael Testa: Is there an outside partner for that one?

Speaker Change: Is there an outside partner for that one?

Michael Testa: Are you speaking about the senior credit fund, or are you talking about the new fund we just launched? I'm sorry.

Speaker Change: Are you speaking about the Senior Credit Fund or are you talking about the new fund we just launched? I'm sorry. Oh, I'm just speaking about Senior Credit Corp.

Michael Testa: Oh, I'm just speaking about Senior Credit Corp. specific.

Michael Testa: Yeah, we don't disclose who that is, but we do have an institutional investor that we partner with there.

Speaker Change: specifically.

Speaker Change: Yeah, we don't disclose who that is, but we do have an institutional investor that we partner with there.

Sarah Stanton: Okay, great. And then the move into Europe. I presume all this is good for activities, which are going to be outside the BDCs because, as I understand it, the 1940 acts were a limit on non-U.S. investments. Is that a fair way to look at it, or am I misinterpreting it?

Sarah Stanton: And then the move into Europe, I presume all these, that's come for activities, which is going to be outside of the BDCs, because so I understand that in the 1940s, where it limits the amount of non-US investments, that fairway look at or am I misinterpreting that? Hi, Chris, this is Sarah. I'll take this one. So, you know, we will continue to reevaluate how we make those investments in Europe on a go-forward basis at this time. As you know, we have, you know, the 30% quote-unquote bad asset bucket, which we have plenty of room in. I think it's under 10% full at this point.

Speaker Change: okay right and then um the move into europe

Speaker Change: I presume all these, that's good for activities which is going to be outside of the BDCs because as I understand it, the 1940 Act sort of limits the amount of...

Sarah Stanton: Hi Chris. This is Sarah. I'll take this one.

Speaker Change: non u s investments that fairway look at it or my misinterpreting that

Speaker Change: Hi Chris, this is Sarah. I'll take this one.

Sarah Stanton: So, you know, we will continue to re-evaluate how we make those investments in Europe on a go-forward basis. At this time, as you know, we have, you know, the 30 percent, quote-unquote, bad asset bucket, which we have plenty of room in. I think it's under 10 percent full at this point and obviously continues to grow as, you know, the platform grows as well. So, we'll continue to optimize that as time continues, but for the time being, we will be making some investments at the BDC level.

Speaker Change: You know, we will continue to reevaluate how we make those investments in Europe on a go-forward basis. At this time, as you know, we have, you know, the 30% quote-unquote bad asset bucket.

Speaker Change: which we have plenty of room in. I think it's under 10% full at this point and obviously continues to grow as the platform grows as well. So we'll continue to optimize that as time continues, but for the time being, we will be making some investments at the BDC level.

Sarah Stanton: And obviously, continues to grow as, you know, the platform grows as well.

Sarah Stanton: So, we'll continue to optimize that as time continues, but for the time being, we will be making some investments at the BDC level. Great.

Sarah Stanton: Great, a follow-up question. Any consideration of getting an SBA license?

Sarah Stanton: A final question. Any consideration of getting SBA lessons? Yes. There is definitely consideration. That's a process. We're working through it. And more to come there. Okay.

Speaker Change: greata file questionum

Speaker Change: Any consideration of getting an SBA license?

Sarah Stanton: Yes, there is definitely consideration. That's a process. We're working through it, and there is more to come.

Speaker Change: Yes, there is definitely consideration. That's a process. We're working through it.

Sarah Stanton: Okay, that's it for me. Thanks, guys.

Christopher Nolan: That's it for me. Thanks, guys.

Speaker Change: and more to come there.

Speaker Change: Okay, that's it for me. Thanks guys.

Bryce Rowe: Our next question comes from Bryce Row with B. Riley. Please go ahead. Thanks.

Operator: Our next question comes from Bryce Rowe with B. Reilly. Please go ahead.

Kyle Brown: Thanks. Good afternoon from the East Coast.

Speaker Change: Our next question comes from Bryce Rowe with B. Reilly. Please go ahead.

Bryce Rowe: Good afternoon from the Police Coast. One in Brazil, maybe just start with the co-investment vehicles. Obviously, good to see more progress there.

Kyle Brown: I wanted to maybe just start with the co-investment vehicles. Obviously, it's good to see more progress there. Mike or Kyle, can you talk about the leverage that you expect to use in maybe the newer vehicle? And any guidance or color on ultimate leverage at the original JV would be helpful.

Bryce Rowe: Thanks. Good afternoon from the East Coast.

Bryce Rowe: Wanted to maybe just start with the co-investment vehicles. Obviously, good to see more progress there.

Kyle Brown: You know, Mike or Kyle, can you talk about, you know, the leverage that you expect to use in this, you know, in maybe the newer vehicle and, you know, any guidance or color on kind of ultimate leverage at the original JV would be helpful. Yeah, I think we're focused on one-to-one leverage for the co-investment vehicle that really will mirror what we do at the publicly traded BDC. So, you know, we've got some new liquidity available to us with that in mind. Okay.

Bryce Rowe: Mike or Kyle, can you talk about, you know, the leverage that you expect to use in this, you know, in maybe the newer vehicle and, you know, any guidance or color on kind of ultimate leverage at the original JV would be helpful.

Speaker Change: Yeah, I think we're, you know, we're focused on one-to-one leverage for the co-investment vehicles. It really will mirror what we do at the publicly traded BDC. So you know, we've got some new liquidity available to us with that in mind.

Kyle Brown: Maybe next question here. You know, it looks like unfunded commitments who can continue to grow in size. And, you know, you've got, you know, the five verticals now and, you know, having added a couple, you know, as of relatively recently, can you talk about kind of what the mix of the unfunded looks like? And then maybe talk about, you know, how the pipeline is starting to build from a mixed perspective between the, you know, the multiple verticals. You know, I think, you know, we broke this business into verticals a couple of years ago. We did that intentionally so that it could really scale.

Kyle Brown: Okay, okay. Maybe next, next question here, you know, it looks like unfunded commitments, continue to grow in size and you know you've got you know the the five verticals now and, Having added a couple, you know, as of relatively recently, can you talk about kind of what the mix of the unfunded looks like and then maybe talk about, you know, how the pipeline is starting to build from a mixed perspective between the, you know, the multiple vertical

Speaker Change: Okay, okay.

Speaker Change: Maybe next question here. It looks like unfunded commitments continue to grow in size, and you've got the five verticals now.

Speaker Change: having added a couple, you know, as of relatively recently. Can you talk about kind of what the mix of...

Speaker Change: The unfunded looks like, and then maybe talk about how the pipeline is starting to build from a mixed perspective between the multiple verticals.

Kyle Brown: Sure. I think we broke this business into verticals a couple years ago. We did that intentionally, so it could really scale. We brought in 20-plus year veterans to run each of those businesses, both on the management side and the credit side.

Speaker Change: Sure, you know, I think we broke this business into verticals a couple years ago. We did that intentionally so that it could really scale. We brought in 20-plus year veterans to run each of those businesses.

Kyle Brown: We brought in 20 plus year veterans to run each of those businesses, both on the management side and the credit side, and we're seeing the results of that now. We're seeing the scale begin now, and the pipeline has been continued to increase there. You saw the mix of deployment this quarter that's not too different than kind of how we see this. These verticals continuing to grow our venture debt business is a little bit more at scale. So it's growing a little bit slower on a percentage basis, where sponsor finance, life science equipment are all growing at a higher percentage as those businesses get up to scale.

Speaker Change: on the management side and the credit side.

Speaker Change: And we're seeing the results of that now. We're seeing the scale begin now. And the pipeline has continued to increase there.

Speaker Change: You saw the mix of deployment this quarter, that's not too different than kind of how we see these verticals continuing to grow. Our venture debt business is a little bit more at scale, so it's growing a little bit slower on a percentage basis.

Kyle Brown: And we're seeing the results of that now. We're seeing the scale begin to tip. And the pipeline has continued to increase there. You saw the mix of deployments this quarter. That's not too different from how we see this, these verticals continuing to grow. Our venture debt business is a little bit more at scale, so it's growing at a little bit slower on a percentage basis, whereas sponsor finance, life science, and equipment are all growing at a higher percentage as those businesses get up to scale.

Speaker Change: where Sponsored Finance, Life Science, Equipment are all growing at a higher percentage as those businesses get up to scale. That diversification that you saw this quarter, I think you can expect that going forward across our verticals.

Kyle Brown: And so, you know, that diversification that you saw this quarter, that's, I think you can expect that going forward across our verticals. And we're seeing, you know, as we see one vertical maybe have a little bit less activity in one quarter, another one is picking up the slack. And so being more diversified that way, having products focused on different industries and stages, really gives us the ability to continue to scale regardless of what's going on.

Kyle Brown: And so, you know, that diversification that you saw this quarter, that's I think you can expect that going forward across our verticals. And we're seeing, you know, as we see, you know, one vertical maybe have a little bit less activity in one quarter. Another one is picking up the slack. And so, being more diversified that way, having products focus on different industries and stages really gives us the ability to continue to scale regardless of what's going on.

Speaker Change: And we're seeing, you know, as we see, you know, one vertical maybe have a little bit less activity in one quarter, another one is picking up the slack. And so being more diversified that way, having products focus on different industries and stages.

Kyle Brown: Okay, okay. Maybe the last one for me in terms of kind of asset sensitivity, we're you know we're starting to... To see some talk of rate cuts and lower short-term interest rates, just maybe remind us what the asset sensitivity position is of the BDC and how that may change, you know, as different verticals take more weight within the portfolio.

Kyle Brown: Okay, okay. Maybe last one from me in terms of kind of asset sensitivity.

Speaker Change: really gives us the ability to continue to scale regardless of what's going on.

Speaker Change: Okay, okay. Maybe the last one for me in terms of kind of asset sensitivity, we're you know we're starting to...

Kyle Brown: We're, you know, we're certain to see some talk of rate cuts and lower short term interest rates.

Speaker Change: to see some some talk of rate cuts and lower short-term interest rates just maybe remind us what the asset sensitivity position is of the BDC and how that may change

Kyle Brown: Just maybe remind us what the asset sensitivity position is. Of the BDC and how that may change, you know, as you know, is different verticals take more weight within the portfolio. Yeah, I think maybe the first thing I'll point out, and you can just confirm this on our schedule investments, anybody can. We've got floor rates on almost all of our deals. Floor rates that across the board are exceeding 12 plus percent. And so we've got this really interesting. And I think this is different than most BDCs. We have an interesting dynamic where we can either see some offset to the lowering of rates, where our floor rate remains with our bars.

Speaker Change: as different verticals take more weight within the portfolio.

Kyle Brown: Yeah, I think, May, the first thing I'll point out, and you can just confirm this on our schedule of investments, anybody can, we've got floor rates on almost all of our deals, floor rates that are, across the board, exceeding 12 plus percent. And so we've got this really interesting, and I think this is different than most BDCs; we have an interesting dynamic where we can either see some offset to the lowering of rates where our floor rate remains with our borrowers.

Speaker Change: Yeah, I think may the first thing I'll point out and you can just confirm this on our schedule of investments anybody can we've got floor rates on almost all of our deals

Speaker Change: floor rates that across the board are exceeding 12 plus percent.

Speaker Change: And so we've got this really interesting, and I think this is different than most BDCs, we have an interesting dynamic where.

Speaker Change: We can either see some offset to the lowering of rates, where our floor rate remains with our borrowers. We're not making less revenue, but our cost of debt at the corporate level and our revolver goes down.

Kyle Brown: We're not making less revenue, but our cost of debt at the corporate level and on our revolver goes down. And so it'll be interesting to see how that plays out. I think we're probably protected more than most BDCs in the event of a rate-decreasing environment.

Kyle Brown: We're not making less revenue, but our cost of debt at the corporate level and our revolver goes down. And so, you know, it'll be interesting to see how that plays out. I think we're probably protected more than most BDCs in the event of a rate-decreasing environment. And can call when you when you say, you know, that maybe maybe a little as you have, if you guys have a kind of a weighted average floor for the portfolio. And is that relative to get on slide 15 of your deck, you've got a, you've got a weighted average coupon rate line in that in one of the charts with that weighted average floor kind of compared to that weighted average coupon rate that you show on that.

Speaker Change: You know, it'll be interesting to see how that plays out. I think we're probably protected more than most BDCs in the event of a, you know, rate decreasing environment.

Kyle Brown: And Kyle, when you say that, you know, maybe a little, if you guys have a kind of weighted average floor for the portfolio, and is that relative to, I guess on slide 15 of your deck, you've got a weighted average coupon rate line in that, in one of the charts. Would that weighted average floor kind of compare to that weighted average coupon rate that you show on that slide? That's fair. I think we can follow up with you on...

Kyle Brown: and can Kyle when you when you say that you know with it maybe maybe a little if you have

Speaker Change: If you guys have a kind of a weighted average floor for the portfolio and is that is that relative to guess on slide 15 of your deck you've got a you know you've got a weighted average coupon rate.

Speaker Change: line in one of the charts. Would that weighted average floor kind of compare to that weighted average coupon rate that you show on that slide?

Kyle Brown: That's fair. I think we could follow up with you on the exact number. When we have it, but that's, you know, that's, that's definitely the ballpark.

Kyle Brown: That's fair. I think we can follow up with you on the exact number. Okay. When we have it, but that's, you know, that's definitely the ballpark.

Speaker Change: That's fair. I think we can follow up with you on the exact number when we have it, but that's, you know, that's definitely the ballpark. Okay. Thanks a lot.

Kyle Brown: Okay. Thanks a lot. Sure.

Operator: Thanks for asking. It appears we have no further questions at this time.

Operator: It appears we have no further questions at this time. I will now turn the floor back over to Kyle Brown, Chief Executive Officer, for closing remarks.

Bryce Rowe: Sure. Thanks, Bryce.

Kyle Brown: I will now turn the floor back over to Kyle Brown, Chief Executive Officer, for closing remarks. Great. Thanks.

Bryce Rowe: It appears we have no further questions at this time. I will now turn the floor back over to Kyle Brown, Chief Executive Officer, for closing remarks.

Kyle Brown: Great, thanks. We're proud of the second quarter results, and we're looking forward to updating you on our next call in three months. I'd like to thank everybody for participating in the call today and appreciate your interest and investment in Trinity Capital. Have a great rest of your day. Thanks, bye.

Kyle Brown: Now, we're proud of the second quarter results, and we're looking forward to updating you on our next call in three months.

Kyle Brown: Great, thanks. We're proud of the second quarter results and we're looking forward to updating you on our next call in three months. I'd like to thank everybody for participating in the call today and appreciate your interest and investment in Trinity Capital. Have a great rest of your day. Thanks, bye.

Kyle Brown: I'd like to thank everybody for participating in the call today and appreciate your interest and investment in Trinity Capital. Have a great rest of your day. Thanks, bye. ¶ ¶ ¶

Kyle Brown: i