Q4 2024 Chicago Atlantic BDC Inc Earnings Call

Operator: Good morning, and welcome to the Chicago Atlantic BDC Q4 2024 Conference Call. I would now like to turn the conference over to Tripp Sullivan of Investor Relations. Please go ahead.

Good morning and welcome to the Chicago Atlantic BDC 4th quarter 2024 conference call.

Tripp Sullivan: Thank you. Good morning. Welcome to the Chicago Atlantic BDC conference call to review the company's results. On the call today will be Peter Sack, Chief Executive Officer, Martin Rodgers, Chief Financial Officer, and Dino Colonna, President. Our results were released this morning in our earnings press release, which can be found on the investor relations section of our website, along with our supplemental earnings presentation filed with the SEC. A live audio webcast of this call is being made available today. For those who listen to the replay of this webcast, we remind you that the remarks made herein are as of today and will not be updated subsequent to this call.

Tripp Sullivan: 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 related 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 that are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. We would encourage you to refer to our most recent SEC filings for information on some of these risk factors. Chicago Atlantic BDC 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, 31 March 2025. Therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay or transcript reading.

<unk> that could cause actual results to differ materially from those expressed or implied by these forward looking statements.

We encourage you to reference.

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

Speaker Change: Cargo Atlantic BDC, It seems no obligation or responsibility to update any forward looking statements. Please note that the information reported on this call speaks only as of today March 31, 2025, and therefore, you're advised that time sensitive information may.

Speaker Change: No longer be accurate at the time of any replay or transcript rereading I'll now turn the call over to Peter Sac. Please go ahead.

Tripp Sullivan: I'll now turn the call over to Peter Sack. Please go ahead.

Peter Sack: Thanks, Tripp. Good morning, everyone. We are pleased to announce the company's first full quarter of operations as Chicago Atlantic BDC, Inc. When we launched in October, we pledged to create a scaled, diversified portfolio of senior secured investments, generating highly attractive yields and leveraging Chicago Atlantic's industry-leading expertise in cannabis and other underserved lending markets. We have delivered to and continue to execute to that plan, we are quite proud of our achievements to date. I want to take a moment to call out several of these achievements. First, we declared two dividends of $0.34 per share, a 36% increase from the $0.25 per share dividend for the quarter ended 30 September 2024. We closed on a $100 million senior secured credit facility with an attractive rate of 300 basis points over SOFR.

Chip: Thanks Chip. Good morning, everyone. We are pleased to announce the company's first full quarter of operations of Chicago, Atlanta BDC, Inc.

When we launched in October we pledged to create a scaled diversified portfolio of senior secured investments generating highly attractive yields and leveraging Chicago Atlantic industry, leading expertise in cannabis and other underserved funding markets.

Chip: We have delivered to and continue to execute to that plan and we are quite proud of our achievements to date.

Chip: I want to take a moment to call out several of these achievements.

Chip: First we declared two dividends of 34 cents per share a 36% increase from the 25 per share dividend for the quarter ended September 32024.

Chip: We closed on a $100 million senior secured credit facility with an attractive rate of 300 basis points over silver.

Peter Sack: We also deployed a total of $45.5 million in gross fundings by principal value from 1 October 2024 to 31 March 2025. Since establishing the Chicago Atlantic platform in 2019, we have maintained a disciplined underwriting process that reflects the core tenets of successful direct lending, and that same thesis is deployed in Chicago Atlantic BDC, Inc. We focus on strong operators, strong markets, diversity of cash flow, low leverage, high amortization, and robust collateral coverage to manage downside risk and to ensure protection of principal. We are a differentiated BDC as the only BDC focused on and able to lend to cannabis companies. We also have three sub-strategies where we work collaboratively with borrowers in other industries, generally non-sponsor transactions, where the more traditional BDC lenders don't provide capital, leading to idiosyncratic opportunities that aren't available in other BDCs or private funds.

Chip: We also deployed a total of $45 5 million in gross fundings by principal value from October one 2024.

Chip: March 31 2025.

Chip: Since establishing the Chicago Atlantic platform in 2019, we have maintained a disciplined underwriting process that reflects the core tenants of successful direct lending and that same thesis is deployed in Chicago, Atlanta BDC, Inc.

Chip: We focus on strong operators strong markets diversity of cash flow low leverage high amortization and robust collateral coverage to manage downside risks and to ensure protection of principal.

Chip: We are a differentiated BDC as the only BDC focused on and able to lend to cannabis companies.

Chip: We also have three sub strategies, where we were collaborating with borrowers and other industries generally non sponsor transactions, where the more traditional BDC lenders don't provide capital leading to idiosyncratic opportunities that arent available in other bdcs or private funds.

Peter Sack: When we compare Chicago Atlantic BDC to other BDCs, our key financial metrics are differentiated as well. Our weighted average yield on debt investments as of 31 December was 16.5%, compared with the BDC average of 12.1%, according to recent BDC research from Ladenburg Thalmann. We have almost no exposure to second lien subordinated debt or equity compared to the BDC average of 19%. We had no leverage at year-end and no non-accruals, which compares favorably to the BDC average of 1.1x and 3.9% respectively. This vehicle provides an attractive yield to shareholders on an unlevered basis. Once we begin deploying the capital from the credit facility and that deployment flows to earnings and distributions, we expect we'll have an even further differentiated risk-reward profile compared to other BDCs.

Chip: When we compare Chicago Atlantic BDC to other Bdcs.

Chip: Our key financial metrics are differentiated as well.

Chip: Our weighted average yield on debt investments as of December 31 was 16, 5% compared with the BDC average of 12, 1%. According to recent BDC research from Ladenburg Thalmann.

Chip: We have almost no exposure to second lien subordinated debt or equity compared to the BDC average of 19%.

Chip: We had no leverage at year end and no non accruals, which compares favorably to the BDC average of 1.1 X and three 9% respectively.

Chip: This vehicle provides an attractive yield to shareholders on an unlevered basis.

Chip: Once we begin deploying the capital from the credit facility and that deployment flows to earnings and distributions. We expect we will have an even further differentiated risk reward profile compared to other bdcs.

Peter Sack: A lack of meaningful federal cannabis reforms has created challenges within our industry of focus, but we continue to underwrite, assuming that the federal regulatory environment remains unchanged and that operators will continue to need debt capital to grow. This philosophy and our strong liquidity have enabled us to grow the portfolio in 2024 and build a pipeline of nearly $644 million, comprised of many of the leading operators and brands. We believe our remarkable consistency and the ability to work collaboratively with our borrowers will be an important asset in 2025. Martin, why don't you take it from here?

Chip: A lack of meaningful federal cannabis reforms has created challenges within our industry a focus but we continue to underwrite assuming that the federal regulatory environment remains unchanged and that operators will continue to need that capital to grow.

Chip: This philosophy and our strong liquidity have enabled us to grow the portfolio in 2024 and build a pipeline of nearly $644 million comprised of many of the leading operators and brands.

Chip: We believe our remarkable consistency and the ability to work collaboratively with our borrowers will be an important asset in 2025.

Martin: Martin why don't you take it from here.

Martin Rodgers: Good morning. Thanks, Peter. Before I start my brief comments, I want to highlight our investor presentation that we filed this morning that serves as our earnings supplemental. Coming to our highlights for Q4. Gross investment income for this quarter was $12.7 million, compared to $3.7 million in Q4 of last year. Excluding the costs specifically related to the loan portfolio acquisition, expenses were $4.3 million, compared to $1.2 million a year ago. Investment income, excluding these transaction expenses, was $8.3 million or $0.36 per share, compared with $1.7 million or $0.28 per share a year ago. Consistent with our expectations of a much smaller amount of transaction-related expenses this quarter, we had a total of $300,000 related to the loan portfolio acquisition.

Martin: Morning, Thanks, Peter.

Speaker Change: Before I start my brief comments I want to highlight our investor presentation that we filed this morning.

Martin: Dental.

Martin: Turning to the highlights for the fourth quarter gross investment income this quarter was $12 $7 million compared to $3 7 million in the fourth quarter last year.

Martin: Excluding the costs specifically related to the loan portfolio acquisition expenses were $4 3 million compared to $1 2 million a year ago.

Martin: Bill.

Martin: Investment income excluding these transaction expenses was eight female or <unk> 56 per share compared with $1 7 million or <unk> 28 per share a year ago.

Martin: Consistent with our expectations of a much smaller amount of transaction related expenses. This quarter, we had a total of $300000 related to the loan portfolio acquisition.

Martin Rodgers: Reported net investment income was $8 million or $0.35 per share for the Q4. Net assets were $301.2 million at Q4 end, and NAV per share was $13.20. As of year-end, there were 22.8 million common shares issued and outstanding on a basic and diluted basis. As we look to the investment portfolio, I'd like to highlight how strong and diversified the portfolio is as of year-end. We have 28 portfolio companies. 23.2% of our portfolio is invested outside of cannabis across multiple sectors. Our average debt position size is about 3.3% of our debt portfolio. 7% to 9.5% of the portfolio is floating rate, and 99% of these loans have a rate floor, which shields us from declining interest rates.

Martin: Reported net investment income was $8 million.

Martin: <unk> per share for the quarter.

Martin: One 2 million a quarter and enough for sure we're stuffing goes from 'twenty.

Martin: As of year end, there were 22 8 million common shares issued and outstanding on a basic and diluted basis.

Martin: As you look to the investment portfolio I'd like to highlight our strong and diversified portfolio as of year end.

Martin: We are trying to a portfolio of companies could exceed 2% of our portfolio is invested outside candidates across multiple sectors.

Martin: Average debt position size is about two point essentials portfolio.

Martin: 95% of the portfolio is floating rate and 99% of these launch of a rate floor shields us from declining interest rates.

Martin Rodgers: The gross weighted average yield of company debt investments is approximately 16.5%. The weighted average secured net leverage for our portfolio companies is 1.5x, and none of our loans is on non-accrual status. At the BDC level, we had no debts as of year-end, as we continued to deploy cash from the balance sheet to fund new investments. Subsequent to year-end, we closed on the new $100 million credit facility Peter mentioned earlier. This facility gives us additional capital to deploy, which should take leverage up slightly as the year progresses. We still expect our leverage to remain well below BDC averages, even as we grow the investment portfolio during 2025. I will now turn it over to Dino to talk about our origination efforts.

Martin: Gross weighted average yield company.

Martin: It's approximately 60%.

Martin: The weighted average secured net leverage for our portfolio companies is one five times and none of our loans on non accrual status.

Martin: At the BDC level, we had no debt as of year end as we continue to deploy cash from the balance sheet to fund new investments.

Martin: Subsequent to year end, we closed on the new $100 million credit facility, It's a nation Dallas.

This facility gives us additional capital to deploy we should take leverage up slightly as the year progresses.

Martin: We still expect our leverage to remain well below the BDC average is even as we grow the investment portfolio during 'twenty to 'twenty five.

Martin: I will now turn it over to Dino who talk about origination efforts.

Dino Colonna: Thanks, Martin. We funded 7 investments in Q4 with a par value of approximately $24.8 million, comprised of 5 investments to existing borrowers for approximately $18.9 million and 2 investments to new borrowers of about $5.9 million. We are proud to continue to help fund the growth of our existing portfolio companies and are excited to welcome 2 new borrowers to the Chicago Atlantic platform. During Q4, we also had principal repayments and sales of investments totaling approximately $17.1 million. Subsequent to Q4 end, we committed approximately $32.3 million in new debt investments and funded approximately $20.8 million of that. This included the funding of 4 investments to 4 new borrowers to the BDC, all originated directly from our origination platform. The current pipeline across the Chicago Atlantic platform remains robust, with approximately $644 million in potential debt transactions across 39 unique companies.

Dino: Thanks Martin.

Dino: We funded seven investments in the fourth quarter with a par value approximately $24 8 million comprised of five investments to existing borrowers for approximately $18 9 million in two investments new borrowers are about $5 9 million.

Dino: We are proud to continue to help fund the growth of our industry.

Dino: Portfolio companies and are excited to welcome two new borrowers at Chicago.

Dino: During the quarter, you also had principal repayments and sales of investments totaling approximately $17 1 million.

Dino: Obsequent to quarter end, we committed approximately $32 3 million in new debt investments.

Dino: We funded approximately $28 million.

Dino: This included the funding of four investments for new borrowers at the BDC all originated directly from our origination platform.

Dino: The current pipeline across the Chicago Atlantic platform remains robust with approximately 644 million potential debt transactions across 39 unique companies.

Dino Colonna: Our pipeline continues to be full of highly attractive opportunities to a diverse group of companies across cannabis and non-cannabis. With our $100 million credit facility in place, we are now better positioned to capture more of this pipeline and grow the portfolio over the next several quarters. Recall that in addition to cannabis, we are also now able to invest in other unique opportunities to provide credit to underserved pockets of the lower and middle market. We have segmented these opportunities into 3 sub-strategies, which include growth in technology companies, esoteric and asset-based lending opportunities, and companies in need of liquidity-driven debt solutions. As of year-end, roughly 23% of our portfolio was comprised of non-cannabis investments, and a roughly similar amount of non-cannabis companies made up the active pipeline.

Dino: Our pipeline continues to be full of highly attractive opportunity to a diverse group of companies across Canada.

Dino: Yes.

Dino: With our 100 million dollar credit facility in place we are now better positioned to capture more of this pipeline and grow the portfolio over the next several quarters.

Dino: In addition to cannabis. We are also now able to invest in other unique opportunities to provide credit underserved pockets of the lower middle market we have.

Speaker Change: Segmented these opportunities three sub strategies would you.

Dino: Growth in technology companies.

Dino: That's a terrific asset based lending opportunities.

Dino: Neither need liquidity driven solutions.

Dino: As of year end, roughly 23% of our portfolio was comprised of non cannabis investments.

Dino: And a roughly similar amount of non cannabis companies made up the active pipeline.

Dino Colonna: These three sub-strategies greatly expand the number of companies and industries that we can work with to tailor customized lending solutions, diversifies the portfolio, and enhances our ability to deliver differentiated credit alpha. Similar to how we have approached cannabis investing, we are focused on lending to leading companies, brands, and management teams with low debt to enterprise value and ample collateral or cash flow coverage. We have the same methodical and quantitatively driven approach to underwriting. It's just part of the DNA of the Chicago Atlantic platform, regardless of industry, company, or opportunity. We also have the same approach to crafting lender-friendly loan documents with strong covenant packages that protect principal. We are excited about the current pipeline across both cannabis and non-cannabis and are working hard to execute on these opportunities in a methodical but expeditious manner.

Dino: These three sub strategies greatly expand the number of companies and industries that we can work with to tailor customized lending solutions.

Dino: Diversifies the portfolio and enhances our ability to deliver a differentiated credit.

Dino: Similar to how we have approached cannabis investing we are focused on lending to leading companies brands that management teams with low debt to enterprise value and ample collateral or cash flow coverage.

Dino: We have the same methodical and quantitatively driven approach to underwriting.

Dino: It's just part of the DNA of the Chicago, Atlanta platform, regardless of industry company or opportunity.

Dino: You also have the same approach to crafting lender friendly loan documents with strong covenant packages.

Dino: Cool.

Dino: We are excited about the current pipeline across both candidates.

Dino: And are working hard to execute on these opportunities and methodical expeditious manner.

Dino Colonna: We anticipate the opportunities set in front of us to grow the portfolio will remain robust, and we are pleased to have a flexible credit facility in place with a great banking partner that gives us the dry powder to execute on. Operator, we are now ready for questions.

Dino: We anticipate the opportunity set.

Dino: All of us to grow the portfolio will remain robust and we are.

Dino: Pleased to have a flexible credit facility in place with a great banking partner it gives us the dry powder to execute on.

Dino: Operator, we're now ready for questions.

Operator: Our first question comes from Pablo Zuanic with Zuanic & Associates. Please go ahead.

Speaker Change: We will now begin the question and answer session.

Speaker Change: You ask a question you May press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.

Speaker Change: At any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two.

Pablo: Our first question comes from Pablo.

Xu: Xu on itch with <unk> Associates. Please go ahead.

Pablo Zuanic: Thank you. Good morning, everyone. Peter, maybe it's a two-part question, maybe if we can remind the audience of the advantages of the BDC, both from the Chicago Atlantic point of view, but also from the borrower point of view. What's advantage for the borrower of borrowing money from a BDC compared to a mortgage REIT or a sale-leaseback? If you can just add in general terms. The second part to the question is in terms of model restrictions around what is the assets you can invest in. There's a percentage that has to be, I understand, private or smaller. Just talk about that, where you are. There seem to be quite a bit of public companies or larger companies in the portfolio. Maybe I'm wrong about that, but just remind us about the restrictions in terms of what you can invest in and what you cannot.

Pablo: Thank you and good morning, everyone.

Peter Sac: Peter you know, maybe it's a two part question but.

Peter Sac: Maybe if we can remind the audience of the advantages of the BDC.

Peter Sac: Both from the Chicago Atlantic Point of group point of view, but also from the borrower point of view you know, what's the advantage for the borrower.

Peter Sac: Our borrowing money from I, B B C compared to a mortgage REIT or to sell leaseback, if you're going to just add in general terms, but the second part of your question I think there's a more of a strict shows around you know what it is they are since you're going to invest in there as a percentage of that has to be you know I understand probably become smaller to just talk about that where you are I mean, there seem to be.

Peter Sac: Quite a bit of public companies or larger companies in the portfolio, maybe I'm wrong about that but just remind us of what the restrictions in terms of what you're going to invest in and what do you got it. Thank you.

Pablo Zuanic: Thank you.

Peter Sack: Thank you, Pablo Zuanic. From a borrower perspective, the borrower doesn't want to know about your restrictions. The borrower doesn't want to hear about what a lender's limitations are. A borrower wants availability of capital and a strategic partner that understands their business and can support their growth, both through good times and challenging times. The BDC is another lever through which Chicago Atlantic can support operators across the industry, and provide another toolkit, another source of funding to allow us to provide more flexible capital solutions to our operators. BDCs are registered by the Investment Company Act of 1940. BDCs have limitations on concentration, and they have limitations on the number of companies that may be invested in that are public with a market cap above $250 million.

Pablo: Thank you Pablo.

Pablo: From a borrower perspective, the borrower if the borrower doesn't want to know about your restrictions the borrower doesn't want to hear about what our lenders limitations are.

Pablo: A borrower wants to a borrower wants availability of capital and a strategic partner.

Pablo: Ken that understands their business and can support their growth.

Pablo: Both through good times and challenging times.

Pablo: And so the BDC is.

Pablo: Another lever through with Chicago Atlantic can support.

Pablo: Operators across the industry.

Pablo: Uh huh.

Pablo: And provide another toolkit another another source of funding to allow us to provide more flexible capital solutions.

Pablo: <unk> to our operators.

Pablo:

Pablo: Bdcs are registered by the 1940 investment Act Bdcs have limitations on concentration.

Pablo: And they have limitations on the number of companies that may be invested in that.

Pablo: Our public with a market cap of about $250 million.

Peter Sack: They were established in order to support lending to small and medium-sized private companies across the US. That's the purpose to which we deploy this capital today with particular focus on the US cannabis industry and other underserved lending markets.

Pablo: They were established in order to support lending to small and medium sized private companies across the U S and and that's the purpose to which we deploy this capital today in part with particular focus on the U S cannabis industry and other underserved others and other underserved lending markets.

Pablo Zuanic: All right. That's good. Thank you. Just moving on in terms of the pipeline you've talked about, I don't know how much guidance you can give, but $32 million in new debt, new fundings in Q1. Is that a pace that we can assume can be sustained throughout the year, $30 million each quarter? Just related to that, the appetite for leverage. I think Martin referred to taking on debt, but leverage less than the average we see. What does that mean? 20%? 50%? Thank you.

Speaker Change: Alright, that's good. Thank you. So just moving on in terms of a pipeline you've talked about I don't know how much guidance you can give by $32 million in new debt new fundings in the new debt in the first quarter.

Speaker Change: Is that it basically we can assume can be sustained throughout the year, you know 30 million each on each quarter and just related to that the appetite for leverage or if you're marketing referred to taking on debt, but leverage less than the average BDC what does it mean, 20% 50%. Thank you.

Speaker Change: Okay.

Peter Sack: We're focused on deploying the credit facility that we announced in Q1. As far as pacing goes, it's difficult to forecast because deployments can be lumpy and can accelerate quickly. It's difficult for us to forecast quarter by quarter throughout the end of the year. We're focused on deploying the existing credit facility today.

Speaker Change: We're focused on deploying the credit facility that we announced in the first quarter.

Speaker Change: As far as pacing goes it's difficult to forecast because deployments can be lumpy.

Speaker Change: And can accelerate quickly so it's difficult for us to forecast quarter by quarter throughout the end of the year, but we're focused on deploying the existing credit facility today.

Martin Rodgers: Pablo Zuanic, just to clarify, that was roughly $30 million of commitments and roughly $20 million of fundings, post the end of the year.

Speaker Change: Probably just to clarify that was roughly $30 million of commitments and roughly 20 million of fundings.

Speaker Change: Towards the end of the year.

Pablo Zuanic: Right. Yeah. All right. Understood. Okay. In terms of leverage target, we can just assume you make full use of a facility by year-end.

Speaker Change: Right Yep Yep Yep.

Speaker Change: Right understood. Okay. So in terms of leverage target I mean, we can just assume you can wait for years, where our facility by year end.

Speaker Change: Uh huh.

Peter Sack: That's not an unreasonable assumption.

Speaker Change: That's not an unreasonable assumption.

Pablo Zuanic: Okay. Thank you. Just obviously, you highlighted the quality of the book. We've seen issues at other companies, right? Dividend cuts, some issues with Innovative Industrial Properties, with their tenants. From one angle, we could say, well, it's a challenging industry, that's something that should be expected. It sounds like you are in a much better situation in terms of your book. I don't know what more color you can give, because from outside, one could say it's not so much about execution on the lender side, it's more about just the landscape out there. Maybe that's a wrong read. Thank you.

Speaker Change: Okay. Thank you.

Speaker Change: And then just you know obviously you highlighted the quality of the book, we've seen issues that other companies right dividend got some issues with a P. R. We'd have tenants.

Speaker Change:

Speaker Change: No.

Speaker Change: From one angle, we would say well, it's a challenging industry. So that's something that should be expected, but it sounds like you already know joining them in a much better situation industrial book I don't know what more color you can give it goes without saying one would say it's not so much about execution on the lender side, it's more about just the landscape out there, but maybe that's wrong.

Speaker Change: Thank you.

Speaker Change: I think that it's Chicago Atlantic we've created something special we've been operating in this space for close to six years.

Peter Sack: I think that at Chicago Atlantic, we've created something special. We've been operating in this space for close to 6 years. We've deployed more than $2 billion of capital across close to 200 investments, we've done so through various cycles of cannabis equity capital markets, through challenging state-level dynamics. We've done so with a pretty impressive track record. We do think of it as execution, but it's execution on our side. Our task is to underwrite risk that features characteristics that is our area of focus, which is low leverage, to focus on diversified cash flows, strong collateral base with some of the best operators in the industry. That discipline has allowed us to maintain our track record of operator success and portfolio construction over the last 6 years, and that's what we're looking to continue to perform to in the BDC.

Speaker Change: More than $2 billion of capital across close to 200 investments.

Speaker Change: And we've done so through various cycles of.

Speaker Change: Okay cannabis equity capital markets through.

Speaker Change: Challenging state level dynamics.

Speaker Change: And we've done so with a pretty impressive track record.

Speaker Change: We do think of it is execution execution on our side our task is to underwrite.

Speaker Change: Risks that features characteristics that is our area of focus which is low leverage to.

Speaker Change: Our focus on diversified cash flows.

Speaker Change: Strong collateral base with some of the best operators in the industry.

Speaker Change: And that discipline has allowed us to maintain our track record.

Speaker Change: Hum.

Speaker Change: Operator success in portfolio construction over the last six years and that's what we're looking to continue to perform to the BDC.

Pablo Zuanic: Thank you. One last one maybe for Martin. Just talk about your interest rate exposure, floors, fixed rate versus flexible rates, if you can touch on that. Thank you. Floating.

Speaker Change: Thank you and one last one maybe for Martin just talk about you know your our interest rate exposure floors flexible fixed rate or some sort of flexible rates. If you can touch on that thank you for noting.

Martin Rodgers: Yeah, appreciate the question, Pablo. I think we've mentioned that the vast majority of our loans are fixed rate or have floors, usually between SOFR and Prime. Now, approximately 99% of our loans have a floor, so it certainly helps to decrease the downside risk of any interest rates. I'm not sure if there's any more color you want me to add to that, Pablo.

Yeah I appreciate the question Pablo.

Speaker Change: That we've mentioned that.

Speaker Change: The vast majority of our loans.

Speaker Change: Right.

Speaker Change: I'll have floor.

Speaker Change: Usually between silicones on Prime now.

Speaker Change: Approximately 99%.

Speaker Change: Although the ones have a of a floor. So certainly helps to decrease the downside risk of an interest rates.

Speaker Change:

Speaker Change: I'm not sure if there's any more color you want to add to that you wanted to add to that Pablo.

Pablo Zuanic: No, that's fine. That's good. All right. That's all for me. Thank you.

Pablo: No that's fine that's good alright, that's all for me. Thank you.

Martin Rodgers: Thank you, Pablo. Appreciate the question.

Speaker Change: Thank you Pablo appreciate the question.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Peter Sack for any closing remarks.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Peter sack for any closing remarks.

Peter Sack: Thank you to our investors for the support, and we look forward to reporting Q1 in the coming weeks. Thank you.

Peter Sac: Thank you to our investors for the support and we look forward to reporting Q1.

Speaker Change: In the coming weeks.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.